The board of directors at Lucky Cement Limited, one of Pakistan’s largest cement manufacturers, has decided to reclassify a sum of Rs116 billion from the revenue reserves to separate capital reserves, according to a notice sent to the stock exchange on Thursday.

It said the move, which makes the amount “un-distributable by way of dividend”, is to “more accurately reflect the nature of these reserves”.

“The Board of Directors of Lucky Cement Limited in their meeting held on 21 June, 2023, discussed that over the years the company has continued with its expansion and diversification strategy and has made significant investments which have enhanced enterprise value for the shareholders,” read the notice.

In addition, Lucky has carried out buy-back of its shares in the past and continues to do the same at present.

“The BoD noted that because of the above mentioned reasons, the general reserves of the cement manufacturer have been utilised and are not entirely available for distribution as dividend.

“The BoD, therefore, decided to reclassify a sum of Rs116 billion from the revenue reserves to separate capital reserves (un-distributable by way of dividend) to more accurately reflect the nature of these reserves,” it said.

Out of the Rs116 billion which are currently classified as general reserves and unappropriated profits, Rs40 billion will be reclassified as capital reserve against long-term investments, another Rs40 billion as capital reserves against capacity expansions and Rs36 billion as capital redemption reserve, read the notice.

Moreover, the board in its meeting decided not to proceed with the increase in the authorised share capital of the company and not to alter the Articles of Association of Lucky Cement.

“The board has withdrawn all the agenda items and has decided to cancel the extraordinary general meeting which was scheduled to be held on June 26, 2023,” it added.

Incorporated in Pakistan in 1993, Lucky Cement Limited has a well-diversified portfolio of businesses, which – besides local and international cement operations – consists of automobiles, chemicals and agricultural sciences, mobile phone assembling and energy.

The company saw a massive increase in its profit, which clocked in at Rs30.21 billion, an increase of over 222% during the first quarter (January-March) of 2023 when compared to Rs9.38 billion in the corresponding period last year.