Lucky Cement Limited (PSX: LUCK) has decided to reclassify Rs. 116 billion from its revenue reserves to separate capital reserves (un-distributable by way of dividend), the company informed the Pakistan Stock Exchange on Thursday.

According to the stock filing, this re-classification will help “more accurately reflect the nature of these reserves”.

Accordingly, the company has approved the allocation as hereunder:

Current Classification Re-classify to Capital Reserves (Not Available for distribution by way of dividend) Amount (PKR in billion)

General reserves and unappropriated profits Capital reserve against long-term investments 40

Capital reserve against capacity expansions 40

Capital redemption reserve u/s 88 of the Companies Act, 2017 36

Total 116

At today’s meeting, the Board of Directors (BoD) discussed that over the years the Company has continued with its expansion and diversification strategy and has made significant investments that have enhanced enterprise value for the shareholders. In addition, the Company has carried out the buyback of its shares in the past and continues to do the same at present.

The Board noted that because of these reasons, the general reserves of the Company have been utilized and are not entirely available for distribution as dividends. Due to this reason, the BoD decided to reclassify Rs. 116 billion to separate capital reserves.

Separately, the board also decided not to proceed with the expansion of the company’s permitted share capital and not to change the Lucky Cement Articles of Association.

Source: Pro Pakistani