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spective. Lakson is massive. The McDonald’s Big Mac you ordered? That’s a Lakson subsidiary that owns the McDonald’s franchise in Pakistan. The news clip you just watched on Express News? Lakson. The Internatio­nal New York Times you read in the morning? Published in partnershi­p with Lakson. In the grand scheme of things, Merit Packaging is not exactly top of the list. It was incorporat­ed on January 28, 1980, and manufactur­es and sells printing and packaging materials. Between 2015 and 2017, it made sales roughly in the ballpark of between taxation wildly oscillated, from Rs15 million in 2015, Rs3 million in 2016, and Rs33 million in 2017. But then, starting in 2018, something happens: total sales increase (reach their highest at Rs2.8 billion in 2019), while the company begins to accrue losses: Rs8 million in 2018, Rs311 million in 2019, and Rs693 million in 2020. Meanwhile, capital expenditur­e rose in the same time period, along with long-term liabilitie­s; property, plant and equipment; and total capital employed. Additional­ly, deferred taxation also rose. In both the company’s 2019 and 2020 annual reports, Merit Packaging pointed out that the losses were in part due to “The other due to increase in markup rates and higher borrowings required for CAPEX and working capital requiremen­ts”. In addition, “Full capacity production and sales orders could not be achieved due to slow developmen­t of value products on new double coater machine, lower production performanc­e of old offset printing machines in Karachi, at the same time substantia­l increase in input cost coupled with abnormal market conditions and shifting of Lahore factory to new location hampered the production.” In short, a tumultuous year. But Munaf was not having any of it. In the resolution he proposed, he set out a list of below: 1. That the management as special business be asked to discuss the current affairs of business of the company subsequent to the issue of rights shares in FY18 and with special reference to the continuing losses in the business which may have serious impact on the business viability / going concern of the company. 2. Why even after investing close to Rs2.3 billion, the company has been unable to even achieve its revenue levels from before the expansion? 3. The rights offer in FY18 stated that the company was repaying debt to the tune of Rs400 million. So, what was the need of investing close to Rs2.3 billion right after the rights offer was closed? And that too by borrowing Rs2.5 billion? 4. What kind of growth management was targeting in the business and why has that growth not been achieved? Merit Packaging has not one, but four phone numbers listed which do not work, dearly loved to know what they think about Munaf’s exhaustive list. What is perhaps most interestin­g, is that the shareholde­rs have asked that the manMerit Packaging Ltd into Century Paper & Board Mills Ltd [another Lakson company, formed in 1984]”. According to the shareholde­rs, that could potentiall­y mean “better usage of tax losses prospectiv­ely and improved costs mean lower administra­tion and sales expenses along with improved economies of scale for both companies and the group too.” This may not actually happen, despite the shareholde­rs’ best attempts. But still, the A.A. Soomro, Managing director at KASB Securities, “This is a great beginning of shareholde­r activism. The minority shareholde­rs have the right to question and anchor the management. Unfortunat­ely, in Pakistan the family any loss of control. The concept of shareholde­r based growth is non existent. The regulator has to make it mandatory to feed in investors recommenda­tions.” Security Leasing Company: coming out of bankruptcy? crisis, but has been consistent­ly chipping away at restructur­ing their debts I t is truly a miracle that the Security Leasing Corporatio­n Ltd (SLCL) has been alive as a company for as long as it has. In eight out of the 11 years between 2009 and 2020, the leasing company has recorded a loss after taxation. According to the most recent annual report for the year ending June 30, 2020, the accumulate­d loss stood at Rs566 million, while liabilitie­s exceeded assets by Rs305 million. In fact, the independen­t auditors of the company in the report basically said that the company was beyond the realm of just ‘going concern assumption’. In its adverse opinion, the auditors said that “there given that the management's plans are feasible… in our opinion the going concern assumption used in the preparatio­n of and the company may not be able to realise its assets and discharge its liabilitie­s in the normal course of business.” Those are some sharp words. The auditors are effectivel­y saying that, not only is the company bankrupt, but that there is no hope of coming out of bankruptcy. The report was released on September 30; and just one week later on October 6, the SECP had sent a letter to the company asking them to explain themselves. SLCL scrambled to justify their existence, and game plan, in a letter sent to the SECP on October 12. The SLCL was incorporat­ed in December 1993 and began operations in REVOLT

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