D.G C:P Part-1

2018 Annual Report D.G. KHAN CEMENT COMPANY LIMITED Hub Cement Plant of D.G. Khan Cement Company Limited DGKC proudly presents its newly built, recently completed and successfully operational green field 9000 tons per day clinker, integrated cement plant – Hub Plant. This more of a strategic expansion will give physical presence in South – near port, with better ability to cater the southern side local demand and sea-route exports. The installed plant is of European origin. Pyro process is obtained from FLSmidth of Denmark. Cement Mills, Coal Mills and Raw Mills are from Loesche GMBH of Germany and Packing Plant is from Haver & Boecker of Germany. Renowned local organisations were hired for civil, mechanical and fabrication work. The project started in mid of 2015 and was completely set up by May 2018. The project activity time spans on about 3 years. The Company has not only concentrated on bringing in latest, efficient and state of the art technology to Pakistan but also enormous efforts have been spent on aesthetics and architectural planning. The plant is latest, unique and efficient. This will bring more economy and enhances margins. We thank government and its institutions, all our vendors, contractors and suppliers on achieving this milestone. We gratitude all the labour involved in this project and our employees whose efforts are simply amazing. This plant would be great addition to our fleet and a landmark for Pakistan Cement Industry. For Investors’ Relations: Mr. Inayat Ullah Niazi – Chief Financial Officer [email protected] Mr. Khalid Mahmood Chohan – Company Secretary [email protected] D.G. Khan Cement Company Limited Head Office Nishat House, 53-A, Lawrence Road, Lahore, Pakistan UAN: +92-42-111 11 33 33 Phone: +92-42-36360154 Fax: +92-42-36367414 Email: [email protected] Contents A Vision & Mission 01 Chairperson’s Message & Chief Executive‘s Review 02 The Company 03 Product Features 03 Quality Standards 04 Contact Details 04 Production Facilities 05 Nishat 06 Group Companies 06 Corporate Structure Pattern of Share Holding 07 DGKC Cross Investments 15 Organogram 15 Board of Directors, Board Committees and Executive Management 16 Profiles of Directors and Management 16 Chairperson’s Review Report on Board Performance 19 Board Audit Comittee Report 20 Attendance of Directors 21 Status of Director Training Programme 21 Share Registrar, Auditors, Legal Advisor 21 Bankers 22 Stakeholders‘ Engagement 22 Statement of Compliance with CCG 23 Auditor’s Review Report to the Members on Statement of Compliance with CCG 24 Corporate Calander FY18 25 Principles 27 Company Rating 28 Business Global Economy 29 Pakistan Economy Review 31 Global Cement Sector 37 Pakistan Cement Sector 38 Business Performance of Pakistan Cement Industry 45 PSX Performance 45 Pakistan Cement Industry Performance in Stock Exchange 46 DGKC Share Trends 47 Company Business Risks 49 Company Performance Return of Equity 52 Volumes & Production 53 Sales 54 Cost of Sales 57 Total Assets & Equity, Borrowings 58 Fixed Assets & Working Capital 59 Investments 60 Investors‘ Ratios 60 Consolidated Results 61 Looking Ahead 61 Financial Statement Analysis Quarterly Analysis 62 Per Share Income Statement 63 Decade at a Glance and Ratios 64 Vertical Analysis 66 Horizontal Analysis 68 Value added Statement 70 Directors’ Report to the Shareholders 71 B Financial Statements Auditors’ Report to the Members 76 Financial Statements 82 Consolidated Financial Statements Directors’ Report 144 Auditors’ Reports to the Members 146 Consolidated Financial Statements 152 Glossary of Terms 227 Consolidated Directors’ Report in Urdu 229 DGKC Directors’ Report in Urdu 232 Notice of Annual General Meeting 233 Jama Punji Ad 247 Form of Proxy 249 Section - A This section is prepared on best effort basis. Besides company’s own data and other information, this involves macro-economic, international and national data, estimates, forecasts and opinions available publicly. Such figures may vary among organizations producing such data. Furthermore, interpretations and derivations from this information could be different from person to person. Wherever dividend for FY18 is referred in this section, that is subject to approval from shareholders of the Company. Where period/year is referred to in analysis, it is financial year that starts from July 01 and ends on June 30 unless contrary is stated specifically. Wherever sales quantity is reported, it is exclusive of own consumption. Vision Statement To transform the Company into a modern and dynamic cement manufacturing company with qualified professionals and fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan. Mission Statement To provide quality products to customers and explore new markets to promote/ expand sales of the Company through good governance and foster a sound and dynamic team, so as to achieve optimum prices of products of the Company for sustainable and equitable growth and prosperity of the Company. Chairperson’s Message Chief Executive’s Review I feel pride to write down my views and I am feeling superb and joyful to share feelings on close of another successful with you year highlights of the Company year of the Company. and successful start up of our new production line of 9,000 tons per day at The recently completed year – financial Hub, District Lasbela, Baluchistan. year 2018, is very special to us. This year marks the success in not only The setting up of this new plant was adding another plant but another site to taken as a challenge. Today I recall our company operations. 9,000 tons per those moments about three years back day Hub Plant is indeed a marvelous when we initiated this project. It was addition. This project is conceived on backdrop of strategy to certainly an uphill task develop a green field. I remember the cater demand of southern provinces of country, lifting up of marathon meetings, day and night struggle, monitoring and exports and Company’s operational presence in south of country evaluation we gone through during these years. But it was a as we already hold production facilities in north and central valuable experience. I like to mention and thank here all those Pakistan. I am hopeful that this plant will bring far reaching fruits who participated and facilitated in this project. to the Company in times to come. As the project is now live, the next phase of efforts is on and that Pakistan economic digits, though not very comfortable, but not so is to effectively and efficiently run this plant. As we met success in disappointing. The institutions of Pakistan, intrinsic national first phase, we will do the next in much better way by grace of resilience and strategic position of Pakistan are strong enough to Almighty. cater the situation. On the world level political and economic winds are on a fast changing mode. Instead of panic, shield is FY18 was a year of rising financing rates, sheer devaluation of needed in propelling winds to safeguard and rather it is prudent local currency, elections and dwindling economy. Yet in this, the and worthwhile to install windmills. industrial despatches touched a double-digit growth. The core three areas that need to be addressed on war footing The Company’s highlights for year FY18 are: and prioritized are foreign direct investment, manufacturing base development and agriculture. GP to Sales (%): 28.50 The Company results for financial year 2018 though declined but PBT to Sales (%): 24.03 not unusual in prevailing economic and industry situation. I am PAT to Sales (%): 28.82 confident on Company’s bright future. EBITDA to Sales (%): 33.24 ROE - Dou Pont (%): 11.46 Dividend/Share (PKR): 4.25 EPS: 20.17 Naz Mansha Chairperson Break Up Value/Share (PKR): 176.06 Debt to Equity (%): 41.81 Equity to Total Assets (%): 63.28 Clinker Production (% change wrt last year): 2.29 Local Sales (% change wrt last year): 11.74 Total Sales Utilisation (%): 113.96 Local Sales Utilisation (%): 103.11 Exports Sales Utilisation (%): 10.85 Raza Mansha Chief Executive Officer 2 DG Cement Annual Report 2018 The Company Product Features D.G. Khan Cement Company Limited (DGKC/the Company) is a Ordinary Portland public limited company incorporated in Pakistan on 27-09-1978 as limited liability company under company law in Islamic Strength Republic of Pakistan. It is listed on Pakistan Stock Exchange. It is a blue-chip stock. The Company is created and governed by its To ensure that cement dispatched to customers is with Zero statutory documents, Memorandum and Articles of Association, defect quality and has exceptionally high strength superseding registered with country corporate authority. national and international standards, automatic quality control is done through online X-ray analyzer and computer-controlled The Company is primarily engaged in production and sale of systems. Our focus is not only on the quality of cement Clinker and Cement. dispatched but on the consistency of the high-quality cement dispatched. We may further add that the Quality Control Applicable Laws & Regulations department carries out regular checks and analysis of various raw materials, intermediate products and final products in order to Many laws and regulations apply to the Company including: have additional quality checks. At DGKC the chemical composition and grinding fineness are closely monitored to The Companies Act ensure that both Pakistani and other international standards are Stock Exchange Regulations surpassed and our customers get cement of exceptional

Load more