DGAnnual 2023
DGAnnual 2023
DGAnnual 2023
UNLOCKING
2023 Annual Report
DGKC
Driving value creation through integrated thinking Reporting boundary and scope
Through our FY2023 Annual Report, we aim to provide concise communication about
Our commitment to our purpose is fundamental to DGKC approach to value creation. This is provided in the context of our material matters
how we manage our business, develop and deliver on addressed through our purpose, strategy and as informed by our key relationships,
our strategy and create sustainable value for our principal risks and associated opportunities. We also provide a succinct overview of our
stakeholders. With this in mind, and by embracing governance practices, business model and capitals performance in terms of financial and
integrated thinking as a central tenet of our strategy non-financial indicators for the financial year.
and purpose-led business model, we can manage the
effects of our business activities on the six capitals, as Governance
referred to in the Integrated Reporting Framework. DGKC governance system led by the board and its committees, operates on the principles
of transparency, accountability and good governance, by safeguarding the interest of the
As we connect for a better future our purpose-led stakeholders. Our governance structure is explained in detail in the Corporate
strategy is designed to positively influence our Governance section on page.
operating context and meaningfully contribute to the
United Nations Sustainable Development Goals (UN Strategic Focus and Future Outlook
SDGs)." Strategic objectives and outlook is the result of our well-articulated business strategy
which defines these objectives. The resource allocation mechanism is in place to
implement those strategic objectives, which also elaborates the measurement
achievements and target outcomes. Our forward looking statement addresses our
expected condition and performance, status of projects disclosed last year also explaining
about the sources of information and assumptions used for projections.
Materiality
The topics discussed in this report reflect the issues that could impact the role we play in
society, as well as how our business deals with evolving market dynamics and allocates
resources to ensure we deliver.
In FY2023, we conducted a review of the material matters that could, in our judgement,
significantly impact the value we create for our stakeholders. The content of this report is
based on the outcome of this assessment
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DGKC 2023
OUR INTEGRATED
OUR INTEGRATED REPORTING PROCESS REPORT
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DGKC
TABLE OF CONTENTS
01 07 to 37
ORGANIZATIONAL
02 39 to 49
STRATEGY AND
OVERVIEW AND RESOURCE
EXTERNAL ALLOCATION
ENVIRONMENT
03 RISKS AND
51 to 59 04 61 to 97
OPPORTUNITIES GOVERNANCE
05 99 to 117
PERFORMANCE
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DGKC 2023
06 119 to 121
STAKEHOLDERS
07 131 to 138
SUSTAINABILITY AND
RELATIONSHIP AND CORPORATE SOCIAL
ENGAGEMENT RESPONSIBILITY
08 139 to 144
DIRECTORS' REPORT
09 145 to 214
UNCONSOLIDATED
FINANCIAL STATEMENTS
10 215 to 296
CONSOLIDATED
FINANCIAL STATEMENTS
05
ORGANIZATIONAL
OVERVIEW AND
EXTERNAL
ENVIRONMENT
VISION & MISSION 08
CODE OF CONDUCT 09
CULTURE 09
ETHICS AND VALUES 10
COMPANY INFORMATION 11
PRINCIPAL BUSINESS ACTIVITIES 12
KEY BRANDS AND PRODUCT FEATURES 12
LOCAL & INTERNATIONAL MARKETS 13
PRODUCTION FACILITIES 14
GROUP PROFILE 15
RELATIONSHIP WTIH GROUP COMPANIES 16
DGKC-GROUP CROSS INVESTMENTS 17
SUBSIDIARIES 18
DISCLOSURE OF BENEFICIAL OWNERSHIP AND
FLOW CHART OF INVESTMENTS 22
ORGANIZATION STRUCTURE 23
BUSINESS MODEL 24
POSITION OF THE REPORTING ORGANIZATION WITHIN
THE VALUE CHAIN 26
SIGNIFICANT FACTORS AFFECTING THE EXTERNAL ENVIRONMENT 27
S.W.O.T. ANALYSIS 28
THE EFFECT OF SEASONALITY ON BUSINESS IN TERMS
OF PRODUCTION AND SALES 29
POLITICAL ENVIRONMENT WHERE ORGANIZATION OPERATES 29
LEGITIMATE NEEDS AND INTERESTS OF KEY STAKEHOLDERS 30
COMPETITIVE LANDSCAPE AND MARKET POSITIONING 31
HISTORY OF MAJOR EVENTS (BRICK BY BRICK) 32
LEGISLATIVE AND REGULATORY REQUIREMENTS IN WHICH
ORGANIZATION OPERATES 34
EVENT CALANDER 36
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DGKC
VISION
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
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.
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CODE OF CONDUCT
DG Khan Cement Company Limited continues to hold in Protection and Paper Use of Company Assets: All
high esteem the best practices of corporate governance directors/employees are expected to exercise their
and believes in widely propagating its values and ethics business judgment in a manner that protects the assets
for strict adherence by all employees, contractors, of the Company and promotes their efficient use.
suppliers and others while doing business for the
Company. The Company’s commitment to encouraging Reporting Any Illegal or Unethical Behaviour: Every
ethical and responsible practices is demonstrated by the director/employee of the Company is encouraged to
fact that DG Khan Cement Company Limited had a promptly contact the Chairman of the Board or the
comprehensive Code of Conduct in place well before the Compliance Officer/ HR department if he or she has
introduction of the Stock Exchange requirement. observed a violation of this Code, illegal or unethical
behaviour.
Salient Features of Code of Conduct
Public Company Reporting: The Company expects
Compliance Officer: The Company has designated directors/employees to provide prompt and accurate
Company Secretary/ HR department respectively, as its answers to enquiries relating to its public disclosure
Compliance Officer to administer this Code. requirements.
Compliance with Law: Directors/Employees must Disclosure of Interest: Directors/Employees are also
comply with all of the laws, rules, and regulations of required to disclose their interest, at the time of
Pakistan and other countries applicable to either appointment and on an annual basis the directorships
Company or its business. and/or memberships they hold in other companies.
Conflict of Interest: Any director/employee who becomes Insider Trading: No director/employee shall, directly or
aware of a conflict or potential conflict of interest is indirectly, deal in the shares of the Company in any
expected to bring it to the attention of the Chairman of the manner during the Closed Period prior to the
Board or the Compliance Officer/ HR department. announcement of financial results.
Confidentiality: All directors/employees must maintain Amendment, Modification and Waiver: This Code may be
the confidentiality of confidential information entrusted amended, modified or waived only by the Company’s
to them by either Company, except when the applicable Board of Directors and must be publicly disclosed if
Company authorizes disclosure or disclosure is required required by any applicable law or regulation. As a general
by laws, regulations, or legal proceedings. Policy, the Board will not grant waivers to the Code.
Fair Dealing: Each director/employee is expected to deal (Approved code of conduct for directors and employees
fairly with the respective customer of the Company, are shown on webside in detail)
suppliers, competitors, officers, and employees.
CULTURE
P Positive contribution and commitment collaborative efforts. With this belief inculcated as DG
culture, every member of the team positively contributes
R Respect for self and others
and selflessly commits for the cause of the team and the
I Integrity in actions and decisions organisation; has self-belief and respect for himself and
for others; imbibes integrity and passion in all his actions
D Drive to continuously improve
and decisions; has tremendous drive and zeal to
E Excellence in everything we do continuously improve and seeks to achieve excellence in
all its actions. This collaborative team spirit at DGKC has
People at DGKC believe in shared values and goals. All resulted in continuous improvement and made us stay at
team members collaborate, share knowledge, the top. Our culture is built on the strong pillar of
communicate and support one another. They believe that ‘Together We Perform. Together We Achieve. Together We
any result positive or not is an outcome of their Grow’.
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DGKC
We're ambitious and innovative. We get excited about our work. We bring energy and imagination to
our work in order to achieve a level of performance, not achieved before. We achieve a higher
standard of excellence.
We are accountable for providing quality products & excellent services along with
meeting the strict requirements of regulatory standards and ethical business practices.
Everything we do, should work perfectly. We maintain integrity & excellence. We believe
in actions, not in words.
BE RESPECTFUL
COMPETENCE
COMMITMENT
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COMPANY INFORMATION
Board of Directors
Company Products
Mrs. Naz Mansha Chairperson / Non-Executive
I. Clinker
Mr. Raza Mansha Chief Executive / Executive
II. Ordinary Portland Cement (OPC)
Mr. Khalid Niaz Khawaja Non-Executive
Mr. Usama Mahmud Independent III. Sulphate Resistant Cement (SRC)
Mr. Shehryar Ahmad Buksh Independent
Mr. Farid Noor Ali Fazal Executive
Mr. Shahzad Ahmad Malik Non-Executive HS Code
CUIN: 0006469 NTN: 1213275-6 Mr. Khalid Mehmood Chohan (Company Secretary)
STRN: 0402252300164 PSX Symbol: DGKC E-mail: kchohan@dgcement.com Phone: +92 42 111 11 33 33
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DGKC
The Company is primarily engaged in production and sale of Clinker and Cement with more than 1,900+ regular
employees. As at June 30, 2023; total market capitalization was about Rs 22 billion. Total market share of the company
(local and export) is about 13%.
ISO Certifications
HATHI CEMENT ISO-9001-2015
ISO-14001-2015
BLOCK CEMENT
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DGKC also enjoys notable presence in foreign markets including Bangladesh, Afghanistan, USA, China, Srilanka and other
parts of central Africa. The Company is also trying to find new export markets through its HUB plant close to the port.
Khairpur: Factory
Expansion on table
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PRODUCTION FACILITIES
PLANT MAKE
Description Site Manufacturer Capacity Year Installed
Cement Plant (line-1) DGK UBE Industries, Japan 2,000 tpd 1986
Cement Plant (line-1) DGK FLSmidth, Denmark 200 tpd 1994
Cement Plant (line-2) DGK FLSmidth, Denmark 4,000 tpd 1998/2005
Cement Plant (line-1) DGK FLSmidth, Denmark 500 tpd 2005
Cement Plant KHP FLSmidth, Denmark 6,700 tpd 2007
Kiln HUB FLSmidth, Denmark 9,000 tpd 2018
Mills HUB Loesche GMBH, Germeny 2018
Pack House HUB Haver & Boecker, Germeny 2018
Captive Power Plant** HUB Niigata, Japan
Captive Power Plant DGK Wartsila, Finland
Captive Power Plant KHP Wartsila, Finland
Coal Fired Power Plant DGK Sinoma, China 30 MW 2016
WHR Plant DGK Nanjing Turbine Electricity Machinery Group Company 10.4 MW 2010
WHR Plant KHP FLSmidth, Denmark 12 MW 2020
RDF Plant KHP Vecoplan, Germany & Elden , Germany
RDF Plant DGK Vecoplan, Germany & Elden , Germany
WHR Plant HUB Sinoma, China 10 MW 2021
Coal Fired Power Plant HUB Sinoma, China 30 MW Sep, 2021
Solar Power Plant KHP Sinoma, China 6.9 MW 2023
PLANT CAPACITIES
Factory Clinker Clinker
(Tons per day) (Tons per annum)
Dera Ghazi Khan 6,700 2,010,000
Khairpur 6,700 2,010,000
Hub 9,000 2,700,000
Total 22,400 6,720,000
ELECTRICITY REQUIREMENTS
Factory MW
DGK 42
KHP 31
HUB 40
Total 113
**Transferred to HUB from DGK site
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GROUP PROFILE
About Founder:
Mian Mohammad Yahya, the founding father, was born in Nishat is a Pakistani business conglomerate group. It has
1918 in Chiniot. In 1947 when he was running a leather a diversified presence in various sectors. All its entities
business in Calcutta, he witnessed the momentous are run by professionals on update business practices in
changes that swept the Indo-Pak sub-continent and compliance with national and international regulations.
culminated in the emergence of Pakistan. This is a story
of success through sheer hard work and an undaunted The Group has notable presence in following business
spirit of entrepreneurship. Beginning with a cotton export
sectors:
house, he soon branched out into ginning, cotton and jute
textiles. He was elected Chairman of All Pakistan Textile • Banking & Financial Services • Insurance
Mills Association, the prime textile body in the country. • Cement • Textiles
• Hospitality & Hotels • Energy
He died in 1969, at the age of 51 having achieved so much
• Aviation • Automobiles
in so short time. After him, Mian Mohammad Mansha,
like his father, continues the spirit of entrepreneurship, • Paper packing products • Real Estate
and has led the Group to become a multi-dimensional • Agriculture & Farming, Livestock & Dairy
corporation, with wide ranging interests. Nishat has
grown from a cotton export house into the premier
business group of the country.
- Adamjee Insurance
- Nishat Power Limited ENERGY INSURANCE Company Limted
- Lalpir Power Limited - Security General
- Pakgen Power Limited Insurance Company
Limited
PAPER
PACKING TEXTILE - Nishat Mills Limited
- Nishat Paper Products
PRODUCTS - Nishat Linen (Private)
compnay Limited
Limited
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DGKC HOLDING IN
No. of Shares %
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SUBSIDIARIES
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In October 2018, Nishat Group inked a joint agreement with SÜTAS, a Turkish brand which is one of the largest producers
of milk and dairy products in Turkey. The agreement aimed for the manufacturing, marketing and sale of premium dairy
products in Pakistan and development of Pakistan’s dairy sector. The venture is initiating a processed milk brand
“MilkField” subsequent to year end. DGKC owns 55.1% holding in NDPL
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DISCLOSURE OF BENEFICIAL
OWNERSHIP AND FLOW CHART
OF INVESTMENTS
The company hereby discloses its significant beneficial ownership, inclusive of indirect interests, in its subsidiaries, Nishat
Paper Products Limited and Nishat Dairy (Pvt) Limited, where it holds approximately 55% of shares in each. The company
presents consolidated financial accounts that encompass these subsidiaries, ensuring transparency in its financial
reporting.
Furthermore, the company maintains investments in several private and public companies within the group, which
consistently yield dividends or capital appreciation. These investments include holdings in prominent entities such as MCB
Bank, Nishat Mills Limited, Adamjee Insurance Limited, Nishat Hotels (Pvt) Limited, and Hyundai Nishat Motors (Pvt)
Limited.
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ORGANIZATION STRUCTURE
BOD
Head of GM
Head of Finance Exports Works DGK
& Treasury
Head of DGM
Local Sales Works
Head of Sales,
Receivable & Taxation
Head of GM
Admin & HR HO Works KHP
Head Accounts/
Payables DGM
Works
Department GM
Head Imports Works HUB
DGM
Works
Department
Head Domestic Payables
GM
Admin DGK
Accounts
Controller-DGK
GM
Admin KHP
Accounts
Controller-KHP GM
Admin HUB
Accounts Head of
Controller-HUB Purchase
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DGKC
BUSINESS MODEL
D.G. Khan Cement, operates on a strong sustainable business model growing into a high-quality building material that
mainly focuses environmental responsibility and customer satisfaction. Our core strategy is the efficient production of
cement through modern, energy-efficient manufacturing processes that reduce carbon emissions and have minimum
environmental impact.
We strategically source raw materials such as limestone and clay from nearby quarries located adjacent to our
manufacturing plants to reduce transportation costs and support local communities in which we operate. We prioritize
• Economic enviroment
and market demand Financial Capital
• Inflation and cost of • Equity - 64.19 Billion Laterite Bauxite
production • Total Assets - 134.71 Billion
• Legal and Compliance
Manufacturing From Suppliers
(Refer to Risks and • Production facility at 3
Opportunities Section) different Sites Additive
• Clinker production capacity of Crusher
6.7 Million ton/ annum
Natural
Strong governance Water, energy & environement
oversight conservation
(Refer to Governance
Section)
Gypsum Crusher
From Suppliers
Gypsum
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both residential and commercial customers to ensure a diverse audience. Our distribution network is increasingly focused
in regions where housing and commercial industry is growing who are expanding our market and customer reach, not only
in Pakistan but also around the world. DGKC also invests heavily in R&D to continuously develop new cost-effective
processes without compromising the quality benchmark and produce environmentally friendly cement with the use of
advanced technologies. Our revenue includes sales of cement, value-added services and working with construction
companies to ensure strong growth and profitability.
DGKC goal is to become a leader in the industry by providing high quality cement, reducing environmental impact,
promoting sustainable construction practices, and putting customers and communities first in our business process.
Our Capitals
And Process (Value Generated
and Added)
Financial Capital
Limestone Clay
• Profit Before Tax - 3.1
Billion
From Quarry • 26+ Billion in government
treasury
Limestone/Clay
Crusher Human Capital
Social Capital
• Contributing to substitute
imports
• Providing better quality of
Clinker Silo Clinker storage yard
Cement
• Higher market share
Natural Capital
Grinding of Clinker and Gyspum
Cement Mill • Better utilization of
to produce clinker
natural resources
including water, energy &
other natural resources.
Packing Filling, packing and loading of cement (Refer to Performance
Plant in bags / bulkers
Section)
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DGKC
On the upstream part of value chain, we source essential raw materials like limestone, gypsum, and clay from mines.
Mining sites are secured through leases, with monthly royalties paid to the Minerals department. Coal, a crucial
component, is imported to fuel cement production. Stringent oversight by experts ensures the quality of their cement.
On the downstream part our efficient distribution is enabled by outsourced fleet of specialized trucks and vehicles,
facilitating material movement and timely customer deliveries. Strong distribution and dealers’ network in key markets
enhance their delivery speed and service quality, setting them apart from competitors.
By fostering strong relationships with upstream suppliers, ensuring a seamless flow of raw materials, and collaborating
efficiently with downstream partners, we strive to meet the demands of the construction industry and contribute to the
growth and development of infrastructure worldwide. Together with our valued partners, we are committed to delivering
high-quality cement products while promoting sustainability and responsible practices throughout the value chain.
Limestone,
Clay, Shale, Iron Ore,
Gypsum Transportation DG Cement Plant
UPSTREAM UPSTREAM
DOWNSTREAM
End Over
The effective management of these connections ensures a steady supply of raw materials, energy, and equipment for
cement production and the efficient delivery of cement products to construction companies and end-users. This integrated
approach is crucial for the company's success and its contribution to the construction industry's value chain.
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• Extensive competition, devaluation • Management continues to identify new markets for its
of currency, fluctuating interest products, internationally to offset local demand
rates and higher inflation. contraction and hedge currency fluctuation.
• Low Government’s development • Company constantly strives to bring efficiencies in its
spending, prevailing pandemic and manufacturing process and energy mix including BMR,
Economic lower economic growth, which supports in mitigating adverse effect of increase
construction activities slow-down. in production cost.
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DGKC
S.W.O.T. ANALYSIS
S W
SS
T
NG
ES
STRE
O T
AT S
OP
RE
PO
TU
R
NI
TIE S
potential particularly effecting the margins
exports to USA • Devaluation of money
• Focus on cost optimizing • Inconsistent economic policies
• Export opportunities due to fully • Protectionism in export market
operational HUB facility • Rising cost of logistics
• CPEC led growth opportunities • High cost of financing
• Flood related infrastructure requirement • Slashing PSDP funds
• Alternate energy sources • Rise in coal prices
• Economic instability
• Price war threat
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EMPLOYEES
GOVERNMENT/REGULATORS
INVESTORS
FINANCIAL INSTITUTES
DEALERS/RETAILERS
CONSUMERS
SUPPLIES
LOCAL COMUNITIES
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DGKC
19 19 19 20 20
78 19 92 19 96 19 01 20 07
86 93 98 05
Commenced Clinker Addition of Increase in
commercial production another production
production capacity of production capacity of
with clinker existing line with existing
capacity of production clinker lines to
2,000 TPD at line capacity of 6,700 tons
DG Khan site increased to 3,300 TPD at per day
2,200 TPD DG Khan site
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Addition of
Installation Installation new plant at
of 33 MW of 8.6 MW HUB Addition of
dual fuel WHR power enhanced Addition of 6.9 MW
power plant plant at the clinker 10 MW WHR Solar power
at Khairpur Khairpur capacity to power plant plant at
site site 22,400 TPD at HUB site Khairpur
site
20 20 20 20 20
07 20 13 20 18 20 21 20 23
10 16 20 22
Installation Installation Addition of 12 Addition of
of 10.4 MW of 30 MW MW WHR 30 MW CFPP
WHR power Coal Fired power plant at power plant
plant at DG Power Plant Khairpur site. at HUB site
Khan site at DG Khan Old plant was
site decomissioned
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• Being a publicly listed entity, DGKC adheres to stock • Property tax payments are made to maintain property
exchange regulations to safeguard market integrity legality.
and investor interests. It commits to high corporate
governance standards through the Code of Corporate • DGKC upholds labor rights, workplace safety, and
Governance, promoting transparency and environmental compliance. It adheres to labor laws,
accountability. ensuring employee welfare, and complies with health
and safety regulations to minimize workplace
• The company follows international accounting and hazards.
financial reporting standards to maintain financial
reporting accuracy and global comparability. • Environmental responsibility is acknowledged
Compliance with income tax, sales tax, and excise through compliance with emission standards, waste
laws at provincial and federal levels is vital for disposal regulations, and measures aimed at
financial sustainability and legal standing. reducing environmental impact.
• DGKC is in full compliance with the Mining Act, as well DGKC's commitment to these requirements, as
as the laws and regulations administered and evidenced in its 2023 Annual Report, underscores its
supervised by the Ministry of Mines and Minerals. dedication to ethical and responsible operations,
reinforcing its reputation as a responsible corporate
entity.
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EVENT CALANDER
JULY 01, 2022 TO JUNE 30, 2023
Notice of Meeting of HR&R Committee sent to Members of Meeting of the Members of Audit Committee conducted for
HR&R Committee. recommendation of Un Audited Accounts for the 1st Quarter
ended September 30, 2022, Related Party Transactions etc. etc.
September 13, 2022 to the Board of Directors for their approval.
September 05, 2022 Meeting of the Board of Directors conducted for consideration
and approval of Un-Audited Accounts for the 1st Quarter ended
Notice of Meeting of Audit Committee sent to Members of Audit September 30, 2022, Directors Report, Related Party
Committee. Transactions etc. etc.
Meeting of the Board of Directors conducted for consideration Certified Copy of Resolutions Passed by the Shareholders in
and approval of Annual Audited Accounts for the year ended their Annual General Meeting held on October 28, 2022 sent to
June 30, 2022 Director's Report, Related Party Transactions, Stock Exchange.
Appointment of External Auditors, Agenda and Venue of AGM,
Special Business Under Section 199 of the Companies Act, 2017
etc. etc. October 29, 2022
September 29, 2022 Meeting of the Board of Directors conducted for Appointment of
Chairperson, CEO and Re-constitution of Board Committees.
Notice of AGM Sent to Pakistan Stock Exchange.
November 08, 2022
October 05, 2022
10% Final Cash Dividend Credited into designated bank
Notice of Annual General Meeting published in Newspapers. accounts of shareholders
Notice of Meeting of Audit Committee sent to Members of Audit Minutes of Annual General Meeting held on October 28, 2022
Committee. sent to Stock Exchange.
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Notice of Meeting of Audit Committee sent to Members of Audit Financial Results for the 3rd Quarter ended March 31, 2023
Committee. along with other Coprorate Actions, if any, Sent to Stock
Exchange immediately after conclusion of Board Meeting.
Meeting of the Board of Directors conducted for consideration Notice of Extraordinary General Meeting published in
and approval of Un-Audited Accounts for the Half Year ended Newspapers.
December 31, 2022, Directors Report, Related Party
Transactions.
June 05, 2023
February 22, 2023 Notice of Meeting for consideration of Budgetry Impact on the
business of the Company Sent to Board of Directors.
Financial Results for the Half Year ended December 31, 2022
along with other Coprorate Actions, Sent to Stock Exchange
immediately after conclusion of Board Meeting. June 12, 2023
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STRATEGY AND
RESOURCES
ALLOCATION
STRATEGY AND RESOURCE ALLOCATION 40
RESOURCE ALLOCATION PLANS TO IMPLEMENT THE STRATEGY 42
KEY RESOURCES AND CAPABILITIES 43
SUSTAINABILITY STRATEGY 44
SDG - SUSTAINABLE DEVELOPMENT GOALS 45
FACTORS EFFECTING COMPANY’S STRATEGY
AND RESOURCE ALLOCATION 47
SIGNIFICANT PLANS & DECISIONS 48
DEFAULT IN PAYMENT OF DEBTS 49
STRATEGY FOR LIQUIDITY PROBLEMS 50
2023 Annual Report
DGKC
• Develop strong dealership network. • Capacity expansion in line with demand and supply
gap in the market
• Expand dealership network selectively depending
on purpose and customer satisfaction index • Continuously invest in new technologies to ensure
competitive advantage over other manufacturers
• Developing strong relationship with institutional
customers • Eradicating operational inefficiencies via strong
controls
• Develop and promote the brand as 'first choice'
among its customers and develop the strong and
loyal dealers'
Relevance Relevance
These KPIs will remain relevant in These KPIs will remain relevant in future
of KPIs of KPIs
future
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Nature Short term to medium term Nature Medium term Long term
• Continuously explore the profitable export markets • Contribute to sustainable development of society
• Get certification regarding high quality of cement & through all commercial and social activities of the
clinker, plant outstanding standards to get access Company.
in international market (particularly China and
USA). • Ensure compliance to all applicable laws via strong
• Financial planning to ensure effective and legal and compliance team.
profitable sales utilization of plant.
Relevance Relevance
These KPIs will remain relevant in future These KPIs will remain relevant in future
of KPIs of KPIs
Relevance
These KPIs will remain relevant in future
of KPIs
Nature Medium term Long term
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1 Financial Capital
We intend to maintain sufficient liquidity available for operations. Our investments in banking, textile, and insurance
sectors generate adequate return on investments throughout the year in the form of dividends. This provides the
management with the flexibility to fund business expansion and invest in cost-saving initiatives. Moreover, the
Company has an efficacious Cash Flow Management System in place whereby cash inflows and outflows are projected
and monitored on a regular basis. Working capital requisites are managed mainly through internal cash generation
and subsidized financing, whenever available.
2 Manufactured Capital
Realizing the significant impact of manufactured capital on the Company’s ability to achieve its strategic objectives,
DGKC makes a deliberate effort to create and maintain a technologically superior asset base. Infrastructure at our
plant-sites, Head Office and the extensive marketing and distribution network constitute the Company’s manufactured
capital.
Proper technical and financial due diligences are carried out when new plant or machinery is to be installed to ensure
that they provide depth to the Company in meeting its objectives. Power mix and future supply chain for stores and
spares are also considered to avoid any disruption of the plant.
3 Intellectual Capital
Intellectual Capital is the value of the Company’s cumulative knowledge and resources that it can utilize to enhance
profits, gain new customers, improve product quality or otherwise improve the business.
DGKC accords highest priority to the development of its Information Systems resources to ensure accurate data
processing, efficient communications, streamlined business processes and accumulation of market intelligence.
State-of the art ERP system and sales ordering system are in place to gather real time market information and plant
performance. Business Continuity plan and assets backups are in place to ensure the protection of intellectual capital.
4 Human capital
Best available talents are not only attracted but also retained to maintain the quality of our human capital. Regular
training and developments, proper reward and HR planning are regularly reviewed to ensure the HR capital remain in
line with our strategic objectives and helped the organization in achieving them.
Relationships with key stakeholders are always part of our plan in pursuance of our strategy. Regular meetings with
Banks, trade associations, Government bodies etc are conducted for the purpose of communication in achieving
shared objectives.
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• Geographically diverse & • Investments in multiple • Well diversified fuel mix % &
state-of-art production companies and regular efficient operations
facilities dividend income • Strategic location at Hub site,
• Self-sufficiency in electricity • Strong brand recognition boosting ability to export.
requirement • Sufficient production • Easy access to production
capacity to meet the market resources
demand
Value Creation
Growth in
shareholders’ wealth
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SUSTAINABILITY STRATEGY
Sustainability Strategy and Measurable Objectives
Sustainability is one of the most important strategic priorities and is present in every aspect of our business. For this
reason, our executive team evaluates and guides to the board members regarding DGKC’s efforts to achieve the following
goals:
S
E
Enviroment
Social
G
Governance
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SDG - SUSTAINABLE
DEVELOPMENT GOALS
At DGKC we recognize the importance of sustainability and has made it our priority. Our businesses has embeded the
sustainability throughout in organization in order to achieve real results. The UN 17 SDG- Sustainable Development Goals
(a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity)
are:
17 01
16 Partnership No
02
for the Poverty
Peace, Goal
Justice, Zero
& strong Hunger
15 Institution
03
Life Good Health
on Land & Well Being
13 Climate
Action
Respon-
GOALS Gender
Equality
Clean
Water
05
sible
Consum- & Sanitation
12 ption
06
Sustainable Clean
Cities Energy
Reduced Economic
11 Inequalities Industry,
Innovation,
Growth 07
Infrastructure
10 08
09
At DGKC , We actively persue UN Sustainable Development Goals (SDGs) and we continue to align our practices to meet
the Global goals by 2030. We have defined a new set of ambitions with a 2030 vision that strengthens our commitment to
building a better world and helping to alleviate some of the most significant challenges communities face today and until
today we are committed to integrate stated SDGs (relevant to our business process) into our business and have developed
strategies accordingly:
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2023 Annual Report
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Sustainablity SDG
Our Strategy
Targets Reference
SDG-3 In addition to existing running schools and hospitals we are planning to add on
Education and more schools around the site areas to provide free education and health facilities.
Health
SDG-4
We are focused to create job opportunities for the local community and provides
Poverty SDG-1 the platform to train technical staff at all levels particularly to fresh diploma
Reduction and holders and graduate engineers. In this way, we will empower the new
Skills Development SDG-2 generation to stand on their feet and contribute in the development of country.
Our Corporate Social Responsibility (CSR) section translates our aforementioned strategles into actionable initiatives.
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FACTORS EFFECTING
COMPANY’S STRATEGY AND
RESOURCE ALLOCATION
Company’s strategies and resource allocations are driven Environmental Issues
by not only by internal factors but external factors such as
technological changes, societal issues, climate changes DGKC implements its strategies in accordance with
and environmental factors. DGKC has also considered well-defined environment policy. We consider all factors
these factors in shaping its strategies and has before taking strategic decisions about expansion and
accordingly planned its resources. other activities which has impact on environment to
mitigate its affects/ footprint on environments. All the
Technological Changes business processes, new investments and any other
strategic decision is made keeping in line with their
Technology has changed the pace of business and raised environmental effects and the contribution they make
the expectations of our customers. Being a responsive towards society. Keeping up with its commitment for
Company towards change, DGKC always adapts the latest environment protection, the Company has implemented a
technology, whether it pertains to automation of business solar power project at its Plant in Khairpur site.
processes, advanced financial software for data analytics
or adoption of latest technologies for production. The
Company not only ensures that it acquires latest Initiatives In Promoting And
technologies and tools for its expansion projects, it also Enabling Innovation
implements/replicates the newer technologies for its
earlier plants as well. These investments in technology
DGKC takes following initiatives to boost innovation in
allows the Company to reap benefits in terms of
business and encourages its employees to come up with
efficiencies and lower costs in pursuance of its long and
new ways to improve products and processes:
medium terms goals.
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However, for the time being, these projects have been deferred keeping in view discount rates and other macro-economic
indicators.
The Company does not have any immediate plans for further expansion or discontinuation of any operations, other than the
ones already mentioned in the Directors’ Report.
Company had plans to install Solar power plants at HUB and DG site but expensive capital and cost escalation caused the
Company to defer these plans. Further, management intends to lower the debt profile in order to improve debt equity ratio
and as part of our sustainability strategy.
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Cash flow management is achieved through effective forecasting and periodic evaluation of planned inflows in the form of
turnover and investment income. There have been consistent stream of dividend income of around Rs 2.5 billion (mainly
from MCB) that provides needed liquidity to our operations.
Further, maturity profiles of assets and liabilities are regularly maintained and evaluated to ensure optimization of cash
inflows and outflows as per expected business operation needs.
All debt repayments maturing this year were paid on their due time and there have been no defaults in repayment of any
debt during the year.
The strategy to overcome liquidity problem is to ensure minimum cash requirement for working capital. Cash generation
left out after financing working capital will be used to finance capex (that has been strategically deferred or minimized).
Rest of the funds available will be used to lower the total debt. During the year, Company has reduced total debt by Rs 4.4
billion.
49
RISKS AND
OPPORTUNITIES
RISK MANAGEMENT FRAMEWORK 52
RISK APPETITE AND TOLERANCE 53
RISK REPORTING 54
BOARD COMMITMENT TOWARDS RISK MANAGEMENT 54
KEY RISKS AND OPPORTUNITIES 55
RISK OF SUPPLY CHAIN DISRUPTION 59
2023 Annual Report
DGKC
Bottom-Up Top-Down
Approach Approach
Annual Assessment of risk Identifies strategic level
in Board risks, cascading these
downward
Emerging
Operational level
Risk Review
Company’s risks are An emerging risk assessment
identified at executive level is conducted and reported at
Periodic risk reviews with the different Management
management committee Committees to identify any new
Annual tactical risk or emerging threats and
assessment trends. These are allocated to
risk owners to investigate and
assess
Identified risks are
Quarterly-Annual
assigned to member of
Operational risk
management or risk
assessment
champion for evaluation
Mitigating Actions
Board-level Review
The Board reviews and approves the risk appetite for each principal risk to enable informed, risk-based
decision-making.
The process outlined above guarantees that risk management is embedded across all levels of the organization, leading
to risk-based, informed decision-making with the appropriate levels of accountability. In order to ensure that all risks are
effectively mitigated and managed, we adopt a multiple line of defense model to provide assurance to our stakeholders.
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• Exploiting the full potential of its risk appetite and whether it is sufficient to achieve its stated objectives
• Protecting itself sufficiently from risks associated with its pursuit of value creation
• Making the appropriate disclosures on risks and opportunities to its stakeholders.
The process of setting the overall risk appetite continues to provide the board with the opportunity to oversee the strategic
direction of the business in a volatile macroeconomic environment, in which the rise of unpredictable risks and emerging
structural opportunities will continue to have an impact on the business model into the future.
risk the company can bear are willing to take to meet our strategic maximum amount of exposure by risk or
priorities risk category that is deemed acceptable
MEASUREMENT
Our ability to service our debt Our risk tolerance is measured according
Our risk capacity is assessed in obligations and preserve asset valuations to qualitative thresholds aligned to our
terms of balance sheet strength is used as a yardstick to measure risk approved appetite levels
appetite
Used by the board in assessing risk and Used in setting strategy and business Used by the board as a reference point
opportunities planning to assess, review and monitor the
strategic direction of the business
Management considered the improved Aligned with Redefine’s strategic priorities
USE
risk capacity in the annual insurance and uses our risk registers as a key Enables management to make prompt
cycle reference point and proactive decisions to ensure risk
management objectives are achieved in
Acts as a reference point for significant the ordinary course of business
risk taking and risk mitigation decisions
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RISK REPORTING
In alignment with our commitment to transparency, we provide the following risk reporting mechanisms:
• Quarterly risk assessments and reports to the • Full compliance with regulatory reporting
board of directors. requirements.
• Monthly operational risk reviews with department • Transparent disclosure of material risks in our
heads. annual reports.
• Regular updates to risk owners and relevant • Ongoing communication with investors, analysts,
stakeholders. and stakeholders about our risk management
practices.
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Capital Impacted: Financial Capital, Social and Capital Impacted: Financial Capital,
relationship capital, Human Capital Manufactured Capital, Human Capital
Opportunity: As a significant tax contributor, Opportunity: Week PKR against USD provides us the
highlighting the role we play as a partner to opportunity to look for avenues in international
governments and citizens – especially as tax markets
contributions enable governments to deliver their
developmental agendas
• Consult regularly with tax advisers to understand the • Take an export-oriented approach to improve the
impact of our current operating environment. plant utilization
• Proactively understand tax pressures in all • Ensure cost effective procurement and price
jurisdictions and engage with governments to adjustments where necessary
minimize impacts
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3 4
High-Interest Rate Fluctuation in Coal Prices
Source: External Source: External
Strategic Objectives: Sustainable and profitable Strategic Objectives: Sustainable and profitable
cement manufacturer, footprint strengthened, cement manufacturer
market diversification
Opportunity: High-interest rates may pose a risk, but Opportunity: Fluctuations in foreign coal prices would
they also offer an opportunity for enhanced returns provide opportunity to look for internal source of
through strategic financial management. energy to make appropriate mix to reduce cost and to
save valuable foreign exchange reserves. High Coal
prices may also push the Company to replace Coal
usage with RDF and TDF to some extent
• Working capital management strategies to be placed • Evaluate the various options of local coals to replace
to reduce the short term debt profile. foreign coal and to reduce cost
• Keeping eye on the inflation and interest rate trends • Keep an eye on international coal prices and make
and make appropriate strategies in this regard. necessary stocks in line with coal anticipated prices.
• Taking appropriate cash management strategies to • Negotiate the long term contracts with vendors to
reduce debt and to decrease the related finance ensure sustainable supplies.
costs.
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5 6
Cybersecurity Risk High Power Cost
Source: Internal/External Source: Internal/External
Capital Impacted: Financial Capital, Capital Impacted: Financial Capital, Natural Capital,
Intellectual Capital Manufactured Capital
Strategic objectives: Strong brand image, Strategic objectives: Sustainable and profitable
HR Excellence cement manufacturer
Opportunity: Providing world-class data security as Opportunity: High power costs and future possible
part of our growing business needs, customer base trend provides opportunity to diversify into renewables
and data sensitivity. to ensure sustainable and cost-efficient energy source.
• Proactively assess and increase security measures • Invest in energy-efficient technologies to reduce total
and controls in place across projects, infrastructure
power requirement.
and while storing and transmitting confidential
information.
• Develop the own power sources at all sites to make
• Enhance our third-party security reviews through them independent of Wapda/K-Electric
efficient, standardized, automated tooling and
processes, which decreases third-party security risk, • Explore the options of renewable energies like solar
including the number and impact of third-party power plants for green and sustainable energies.
incidents.
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7 8
Legal and Compliance Health and Safety Risk
Risk
Source: Internal/External Source: External/Internal
Capital Impacted: Financial Capital, Social and Capital Impacted: Human Capital, Financial Capital,
Relationship Capital, Intellectual capital Manufactured Capital
Strategic objectives: Social and environmentally Strategic objectives: Ensuring the health and safety of
responsible our workforce, maintaining operational continuity,
sustaining profitability, and contributing to public
health efforts.
Opportunity: Proactively responding to the changing Opportunity: Strengthening health and safety measures
regulatory context provides opportunities for can enhance employee well-being, improve workforce
“first-mover advantage” productivity, and bolster our reputation as a responsible
employer and corporate citizen.
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SUPPLIER ASSESSMENT
Regular evaluation of supplier ESG practices ensures alignment with our values and
expectations.
DIVERSIFICATION
We actively diversify our supplier base to reduce dependency on a single source,
bolstering our supply chain resilience.
RISK ANALYTICS
We employ data analytics to monitor ESG-related trends, enabling proactive
identification of potential risks and opportunities.
CONTINGENCY PLANNING
Robust contingency plans outline responses to supply chain disruptions, facilitating swift
mitigation.
STAKEHOLDER ENGAGEMENT
Engaging with stakeholders fosters strong relationships, reducing the likelihood of
ESG-related incidents.
SUSTAINABILITY INTEGRATION
Sustainability principles are integrated into supply chain management, promoting
responsible sourcing and ethical practices among suppliers.
Our commitment to ESG risk management underscores our dedication to long-term sustainability and responsible
business practices. By proactively monitoring and mitigating these risks, we aim to safeguard operations and contribute
positively to the global ESG landscape.
59
GOVERNANCE
PROFILES OF DIRECTORS & MANAGEMENT 62
BOARD COMPOSITION AND LEADERSHIP STRUCTURE 65
CHAIRPERSON’ REVIEW REPORT ON PERFORMANCE OF THE BOARD 67
DISCLOSURE OF RELATED PARTY TRANSACTIONS 69
CORPORATE GOVERNANCE FRAMEWORK 70
INDEPENDENT AUDITOR'S REVIEW REPORT ON STATEMENT
OF COMPLIANCE 75
STATEMENT OF COMPLIANCE 76
TERMS OF REFERENCE OF AUDIT COMMITTEE 79
TERMS OF REFERENCE OF HR &REMUNERATION COMMITTEE 80
ANNOUNCEMENT OF FINANCIAL RESULTS 80
EXTERNAL SEARCH CONSULTANCY FOR APPOINTMENT
OF ANY DIRECTOR 80
AUDIT COMMITTEE REPORT 81
DISCLOSURE ON COMPANY’S USE OF ENTERPRISE
RESOURCE PLANNING (ERP) 84
IT GOVERNANCE AND CYBER SECURITY 85
COMPLIANCE OF FINANCIAL ACCOUNTING AND
REPORTING STANDARDS 88
ADOPTION OF INTERNATIONAL INTEGRATED REPORTING FRAMEWORK 89
ATTENDANCE IN BOARD MEETINGS 90
PATTERN OF SHAREHOLDING 91
CATEGORIES OF SHAREHOLDERS 94
ADDITIONAL INFORMATION 95
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Mrs. Naz Mansha has over 36 years’ experience as a Mr. Khalid Niaz Khawaja is a Fellow of Institute of
Director on the Board of different companies. She has Bankers, Pakistan. He has more than 49 years’ experience
been associated with D. G. Khan Cement Company to work in different capacities in banking industry and CEO
Limited (DGKCC) since 1994 and she is also a Chief in one of the leading Leasing company. He had been on the
Executive of Nishat Linen (Private) Limited, a subsidiary of board as a director on the leading institutions Including
Nishat Mills Limited and Director/Chief Executive of Lahore Stock Exchange Limited.
Emporium Properties (Pvt) Limited and Director on the
Board of Golf View Land (Pvt) Limited and Adamjee Life
Assurance Company Limited. She is a graduate from
Kinnaird College, Lahore.
Mian Raza Mansha has more than 28 years diversified Mr. Usama graduated from University of Pennsylvania
professional experience in various business sectors (UPenn) with a B.S.E. in Bioengineering and a Masters
including Banking, Textile, Power, Cement, Insurance, in Public Administration. He is a seasoned professional
Hotels, Properties, Natural Gas, Agriculture, Dairy etc. He with cross-cutting experience of working in both public
received his Bachelor degree from the University of and private sector. His areas of expertise include
Pennsylvania, USA. Currently he is on the Board of: management consulting, technical assistance, policy
development and project implementation. He has also
Director/Chief Executive Officer worked with international organizations such as DFID,
• D. G. Khan Cement Company Limited UN, and the World Bank. Usama has spearheaded
• Nishat Paper Products Co. Limited large scale initiatives and reform programs, such as
• Nishat Developers (Pvt.) Limited the education reforms in Punjab. He serves as the
Director of Delivery Management Consultants (Pvt)
Director Limited.
• MCB Islamic Bank Limited
• Nishat Hotels & Properties Limited
• Nishat (Raiwind) Hotels and Properties Ltd.
• Nishat (Aziz Avenue) Hotels and Properties Ltd
• Nishat Dairy (Pvt.) Limited
• Euronet Pakistan (Pvt.) Limited
• Nishat Agriculture Farming (Pvt.) Limited
• Hyundai Nishat Motor (Pvt.) Limited
• Nishat Agrotech Farms (Pvt) Limited
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A part from Executive Director’s (Sales & Marketing) day to
day operational activities, he is currently Senior Vice
Chairman of All Pakistan Cement Manufacturers
Association (APCMA) and has also served as its Acting
Chairman in 2002. Moreover, he serves on boards of
Directors of Nishat Papers Products Company Limited
MR. Shehryar Ahmad Buksh
(NPPCL) and Nishat Mills Limited as well.
Director/Independent
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He is a Commerce Graduate and C.A. Inter. His experience He holds Bachelors and Master’s degree in Information
spans about 39 years, through out with DGKC. He Technology (IT) from Preston University. He has
supervised the financial matters related to expansion of DG experience of over 28 years in different areas of IT
Plant. He also oversaw critical financing arrangements for including ERP, Software development, Network
installation of new plants at Khairpur (2007) and Hub communication, Data Centers, Security and BMS. He also
(2018). His expertise is in accounts, tax, audit, finance, has many international affiliations and certifications.
treasury, budget and planning. He remained a crucial (CISCO, Microsoft, Oracle, Dell, IBM, Honeywell, Bosch
negotiator and dealer in transactions with international etc.)
financial institutions, development institutions and export
credit agencies. He started his career in 1994 from DGKC. After 13 years
with Nishat Group, he moved to work at different positions
He has served as director of Lahore Stock Exchange, in Government of Pakistan & Punjab’s departments up to
National Clearing Company of Pakistan Limited and LSE “BPS-20” (Expo Center Lahore, Punjab IT Board, TEVTA,
Financial Services Limited. He is also CFO of Nishat Paper Home department, ZTE Telecomm). He is one of the
Products Company Limited. pioneers behind the concept of “E-Governance” in public
sector enterprises and transform and implement the
He is also serving as a director in Security General technology of Punjab Prisons, Forensics and Securities.
Insurance Company Limited, Nishat Hotels & Properties
Limited, Nishat (Aziz Avenue) Hotels & Properties Limited,
Nishat (Raiwind) Hotels & Properties Limited, Nishat
Energy Limited, Lalpir Power Limited and Pakistan Aviators
and Aviation (Private) Limited.
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Female Director: 01
Male Directors: 06
Mr. Raza Mansha
Chief Executive
Mr. Khalid Niaz Khawaja Mr. Usama Mahmud MR. Shehryar Ahmad Buksh Mr. Farid Noor Ali Fazal Mr. Shahzad Ahmad Malik
Director/Non-Executive Independent Director/Independent Executive Non-Executive
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ROLE OF CHAIRPERSON AND of Reference. They are responsible for review of requisite
matters and make necessary recommendations.
CEO
Respective roles of the Board and management are
The Chairman is responsible for leading the Board and pre-defined explicitly, while CEO has been entrusted with
focusing it on strategic matters, overseeing the the routine business operations in an effective and ethical
Company’s business and setting high governance manner, in compliance with the Company’s Articles of
standards. She plays a pivotal role in fostering the Association.
effectiveness of the Board and individual Directors.
The Board has approved strategies and goals including
The CEO is responsible for the day-to-day leadership and but not limited to annual targets of production, sales,
management of the business, in line with the strategic turnover, cost, profitability, identifying new areas of
Framework, risk appetite and annual and long-term investment for the Company and compliance with legal
objectives approved by the Board. and regulatory requirements. The management is also
responsible for identification and administration of key
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The Board has constituted adequate number of Committees like Audit Committee and Human Resource and Remuneration
Committee. The Committees performed well according to their Terms of Reference. The Board has developed a
mechanism for annual evaluation of Board’s own performance, members of the Board and its Committees. The Board
carried out annual evaluation of Board’s own performance, Members of the Board and its Committees on April 19, 2023.
The overall performance of the Board measured on the basis of approved criteria for the year was satisfactory. The overall
assessment as satisfactory is based on an evaluation of the following integral components, which have a direct bearing on
Board’s role in achievement of Company’s objectives.
Diversity in Board: The Board is composed of members with diverse background having relevant knowledge, skills and
experience of cement. Its appropriate balance of one executive, four non-executive and two independent directors ensure
its independence and empowerment.
Formulation of corporate strategy: Board has a clear understanding of the stakeholders (shareholders, customers,
employees, vendors, society at large) whom the Company serves. The Board has spent sufficient time on strategy
formulation and it has set annual goals and targets for the management in all major performance areas. The Board
subsequently follows up and monitors overall corporate strategy, key financial performance indicators and other budgetary
targets.
Process and procedures: The Board members diligently performed their duties and thoroughly reviewed, discussed and
approved business strategies, corporate objectives, plans, budgets, financial statements and other reports. It received
clear and succinct agendas and supporting written material in sufficient time prior to board and committee meetings. The
board met frequently enough to adequately discharge its responsibilities.
Monitoring of organization’s business activities: The Board remained updated with respect to achievement of Company’s
objectives, goals, strategies and financial performance through regular presentations by the management, internal and
external auditors and other independent consultants. The Board provided appropriate direction and oversight on a timely
basis.
Oversight: The Board has effectively set the tone-at-the-top, by putting in place transparent and robust system of
governance. This is reflected by setting up an effective control environment, compliance with best practices of corporate
governance and by promoting ethical and fair behavior across the company. The Board reviewed the Company’s significant
accounting policies according to the financial reporting regulatory framework. Board also ensured the effective risk
management system in place.
Lahore
August 31, 2023
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•
members to study and understand the information
Whether adequate and qualitative information is EXTERNAL OVERSIGHT OF
•
provided to directors
Whether conflicts of interests between Board
VARIOUS FUNCTIONS AND
members are avoided and fully documented. MEASURES
• Compliance with Code of Corporate Governance etc
The Board places great emphasis on transparency,
Oversight mainly: accountability, good governance and safeguarding the
interest of the stakeholders. DGKC has not only
• Whether Board considers the quality and well-articulated internal control and systems in place
appropriateness of financial accounting and reporting within the company but also emphasized on external
and the transparency of disclosures oversight to enhance the credibility of the information
• Whether Board takes into account significant risks provided to stakeholders. These are:
that may directly or indirectly affect the Company
such as regulatory and legal requirements; market • External audits of statutory accounts
and competitive trends; export demand and price; • Cost Audit on annual basis
energy availability and cost; foreign exchange • Internal audit on regular basis
fluctuations, interest rate risk; financial and liquidity • ERP system audit by external auditors (PwC) and
risk SCARLET Systems
• Whether Board reviews details of financing facilities • Independent assessment of technology environment
availed by the Company and networks are carried out by CNS Engineering
• Whether Board evaluates the significant investment Services
and divestment of funds etc
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DISCLOSURE OF RELATED
PARTY TRANSACTIONS
All transactions with related parties arising in the normal disclosure is in line with the requirements of the 4th
course of business are carried out on an unbiased, arm’s Schedule to the Companies Act, 2017 and applicable
length basis at normal commercial terms and conditions, International Financial Reporting Standards.
under the Company’s Related Party Policy developed in
accordance with the law. All transactions or arrangements (other than investment
in Hyundai Nishat Motor (Private) Limited) with all related
In compliance with the regulatory requirements, all parties were carried out in the ordinary course of
related party transactions are placed before the Audit business on an arm’s length basis. During the year,
Committee for review and recommendation to the Board Company invested Rs 1,007 million in Hyundai Nishat
of Directors at the end of each quarter. The same are then Motor (Private) Limited in accordance with the
considered and approved by the Board keeping in view the shareholders approval in last AGM to earn dividend and
Committee’s recommendations. Any transactions where prospective capital gains.
majority of the directors are interested, are referred to
the shareholders in General Meeting for approval. During the year, there was no conflict of interest
observed with any of the director in any of the contract or
The Company has made detailed disclosures about arrangement with the related party. However, all the
related party transactions (along with basis of related parties transactions have been annexed in the
relationship with the related parties) in its financial attached notice of AGM to seek approvals from
statements annexed with this annual report. Such shareholders in the AGM held on October 27, 2023.
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CORPORATE GOVERNANCE
FRAMEWORK
BOARD'S POLICY ON where they are concerned or interested. Where majority
of directors are interested, the matter is laid before the
GOVERNANCE OF RISK AND General meeting for approval.
INTERNAL CONTROL
POLICY FOR RUMENERATION
The Company has developed a mechanism for
identification of risks and assigning appropriate criticality
OF NON-EXECUTIVE AND
level and devising appropriate mitigation measures which INDEPENDENT DIRECTORS
are regularly monitored and implemented by the
management across all major functions of the Company The Company shall not pay remuneration to its
and presented to the Audit Committee for information non-executive directors including independent directors
and review. except for meeting fee for attending Board and its
Committee meetings. The Company will reimburse or
The Company has devised and implemented an effective incur expenses of travelling and accommodation of
internal control framework which also includes an Directors in relation to attending of Board and its
independent internal audit function. The Internal Audit Committees meetings. The Directors’ Remuneration
function is responsible for providing assurance on the Policy will be reviewed and approved by the Board of
effectiveness and adequacy of internal control and risk Directors from time to time.
management framework in managing risks within
acceptable levels throughout the Company. The
Company’s approach towards risk management has been BOARD FEE ON ACTING AS
disclosed in the Risk and Opportunity section of this
Report. NON-EXECTIVE DIRECTOR IN
DIVERSITY IN CULTURE OTHER COMPANIES
The Company will not pay any remuneration to its
The Board continues to have a firm commitment to directors acting as a non-executive director in other
promote diversity, equal opportunity and talent group companies. However, they are entitled to get
development at every level throughout the Company, meeting fee on attending the Board and its Committee
including at Board and management level and is meetings, which of course shall be borne by the company
constantly seeking to attract and recruit highly qualified in which they are acting as a non-executive director.
candidates for all positions in its business. The Company
believes that diversity helps to ensure that it can achieve
its overall business goals, especially in light of our SECURITY CLEARANCE OF
FOREIGN DIRECTORS
geographical footprint, and is critical in promoting a
diverse and inclusive culture across the whole Company.
The Board of Directors firmly believes that the diverse
mix of gender, knowledge, expertise and skill sets of the Since all member of board of directors are Pakistani,
members enhances the effectiveness of the Board. In this there is no need for security clearance.
regard, Board ensures that a diverse mix of directors are
elected on the Board of the Company, which represent
the interests of all stakeholders. Diversity and inclusion is
a part of who we are, how we lead and what we believe in.
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It is our policy to reward the employees with fair and • Actively pursue a policy of pollution prevention.
competitive salaries and perks along with an opportunity • Comply with Company policies and procedures and all
to share in the success of the business in terms of applicable local laws and regulations. Make strategic
promotions and personal growth. All the elements of the efforts to maximize our energy and resource
reward system are designed to support the achievement efficiency, lower our carbon intensity and reduce
of the desired behaviour, values and standards as well as emissions by managing our usage of energy, water
high performance and continuous improvement/ consumption and waste generation.
development. • Responsibly manage the land within our operations to
protect ecosystems and biodiversity and to maximize
our contribution to nature conservation.
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• Keep records of all first aid treatments, inspections, Reporting a wrongdoing: If you have a concern you wish to
incident investigations, and training activities. raise, you may write to any of the Designated Officers or
• Awareness campaign of preventive measures against contact them via telephone or fax. The designated officers
COVID-19 are:
• Onsite gym, sports complex, swimming and other
facilities for employee fitness • Director Marketing
• Free dispensaries at sites • Chief Financial Officer
• Suitable medical policies in place to provide quality • GM HR & Admin
treatment to employees’ in case of major or minor
illness. All employees of DGKC are made aware of this Policy and
• Mandatory breaks and time-off the safeguards it provides to the whistle-blower.
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and understanding, we employ a clear and accessible provide a mechanism for disaster recovery in the
policy dissemination strategy. This includes respective areas. The Company has arranged the security
dissemination through emails, uploading on Company of all the factory sites by hiring well-trained security
website (where relevant) and training and workshops personnel on its payroll. All the physical assets are
across the organization. properly safeguarded and insured. Back up of virtual
assets such as IT programs and software are regularly
The policies and procedures; including for procurement, arranged. Very efficient and effective firefighting systems
waste and emissions are subject to review at regular have been in place at all our manufacturing facilities.
intervals and take into account any change in regulatory Standard Operating Procedures for all the processes
environment, operational efficiencies and compliance have been devised and documented according to the best
with international best practices. practices prevailing in the industry. All transactions and
affairs of the Company are properly documented; and
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INDEPENDENT AUDITOR'S
REVIEW REPORT ON STATEMENT
OF COMPLIANCE
TO THE MEMBERS OF D.G. KHAN CEMENT COMPANY LIMITED
REVIEW REPORT ON THE STATEMENT OF COMPLIANCE CONTAINED IN LISTED COMPANIES (CODE OF CORPORATE
GOVERNANCE) REGULATIONS, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) prepared by the Board of Directors of D. G. Khan Cement Company Limited (the
Company) for the year ended June 30, 2023 in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility
is to review whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of
the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A
review is limited primarily to inquiries of the Company's personnel and review of various documents prepared by the
Company to comply with the Regulations.
As a part of our audit of the financial statements, we are required to obtain an understanding of the accounting and internal
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider
whether the Board of Directors' statement on internal control covers all risks and controls or to form an opinion on the
effectiveness of such internal controls, the Company's corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit
Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only
required and have ensured compliance of this requirement to the extent of the approval of the related party transactions
by the Board of Directors upon recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does
not appropriately reflect the Company's compliance, in all material respects, with the requirements contained in the
Regulations as applicable to the Company for the year ended June 30, 2023.
UDIN: CR2023100705szuwWjd0
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STATEMENT OF COMPLIANCE
WITH LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE)
REGULATIONS, 2019
The company has complied with the requirements of the Regulations in the following manner:
a. Male: 6
b. Female: 1
3. The directors have confirmed that none of them is serving as a director on more than seven listed companies,
including this company;
4. The company has prepared a code of conduct and has ensured that appropriate steps have been taken to disseminate
it throughout the company along with its supporting policies and procedures;
5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the
company. The Board has ensured that complete record of particulars of the significant policies along with their date
of approval or updating is maintained by the company;
6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by the
Board/ shareholders as empowered by the relevant provisions of the Act and these Regulations;
7. The meetings of the Board were presided over by the Chairperson and, in her absence, by a director elected by the
Board for this purpose. The Board has complied with the requirements of Act and the Regulations with respect to
frequency, recording and circulating minutes of meeting of the Board;
8. The Board have a formal policy and transparent procedures for remuneration of directors in accordance with the Act
and these Regulations;
9. The following Directors have either obtained certificate of Directors’ Training Program or are exempted from the
requirement of Directors’ Training Program as per the Listed Companies (Code of Corporate Governance)
Regulations, 2019:
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Six out of the seven Directors of the company, as above, have either obtained certificate of Directors’ Training
Program or are exempted from the requirement of Directors’ Training Program. The company has planned to
arrange Directors’ Training Program certification for the remaining one director, Mr Shehryar Ahmad Buksh.
10. The Board has approved appointment of chief financial officer, company secretary and head of internal audit,
including their remuneration and terms and conditions of employment and complied with relevant requirements of
the Regulations;
11. Chief financial officer and chief executive officer duly endorsed the financial statements before approval of the
Board;
12. The board has formed committees comprising of members given below:
a) Audit Committee
13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee
for compliance.
15. The Board has set up an effective internal audit function who are considered suitably qualified and experienced for
the purpose and are conversant with the policies and procedures of the company;
16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the
Quality Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit
Oversight Board of Pakistan, that they and all their partners are in compliance with International Federation of
Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and
that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and
non-dependent children) of the chief executive officer, chief financial officer, head of internal audit, company
secretary or director of the company;
17. The statutory auditors or the persons associated with them have not been appointed to provide other services except
in accordance with the Act, these Regulations or any other regulatory requirement and the auditors have confirmed
that they have observed IFAC guidelines in this regard;
18. We confirm that all requirements of regulations 3, 6, 7, 8, 27,32, 33 and 36 of the Regulations have been complied
with; and
a. In respect of regulation 6(1), the Company believes that it has sufficient impartiality & is able to exercise
independence in decision making within the Board and hence, does not require to roundup the fraction to 3
independent directors.
19. Explanation for non-compliance with requirements, other than regulations 3, 6, 7, 8, 27, 32, 33 and 36 are below:
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2 Responsibilities of the Board and its members Non-mandatory provisions of the CCG 10(1)
Adoption of the corporate governance practices. Regulations are partially complied.
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TERMS OF REFERENCE OF
AUDIT COMMITTEE
The Audit Committee. shall be responsible to recommend (viii) consideration of major findings of internal
to the Board of Directors the appointment of external investigations of activities characterized by fraud,
auditors, their removal, audit fees, the provision by the corruption and abuse of power and
external auditors of any service to the listed company in management's response thereto;
addition to audit of its financial statements and the Board
of Directors shall give due consideration to the (ix) ascertaining that the internal control systems
recommendations of the Audit Committee in all these including financial and operational controls,
matters and where it acts otherwise, it shall record the accounting systems for timely and appropriate
reasons thereof and approved the following terms of recording of purchases and sales, receipts and
references of Audit Committee payments, assets and liabilities and the reporting
structure are adequate and effective;
(i) determination of appropriate measures to
safeguard the Company’s assets; (x) review of the company’s statement on internal
control systems prior to endorsement by the Board
(ii) review of annual and interim financial statements of and internal audit reports;
the company, prior to their approval by the Board,
focusing on,- (xi) instituting special projects, value for money studies
or other investigations on any matter specified by
(a) major judgmental areas; the Board, in consultation with the chief executive
(b) significant adjustments resulting from the officer and to consider remittance of any matter to
audit; the external auditors or to any other external body;
(c) going concern assumption;
(d) any changes in accounting policies and (xii) determination of compliance with relevant statutory
practices; requirements;
(e) compliance with applicable accounting
standards; (xiii) monitoring compliance with these Regulations and
(f) compliance with these Regulations and other identification of significant violations thereof;
statutory and regulatory requirements; and
(g) all related party transactions; (xiv) review of arrangement for staff and management to
report to audit committee in confidence, concerns, if
(iii) review of preliminary announcements of results any, about actual or potential improprieties in
prior to external communication and publication; financial and other matters and recommend
instituting remedial and mitigating measures;
(iv) facilitating the external audit and discussion with
external auditors of major observations arising from (xv) recommend to the Board the appointment of
interim and final audits and any matter that the external auditors, their removal, audit fees, the
auditors may wish to highlight (in the absence of provision of any service permissible to be rendered
management, where necessary); to the company by the external auditors in addition
to audit of its financial statements, measures for
(v) review of management letter issued by external redressal and rectification of non-compliances with
auditors and management’s response thereto; the Regulations. The Board shall give due
consideration to the recommendations of the audit
(vi) ensuring coordination between the internal and committee and where it acts otherwise it shall
external auditors of the company; record the reasons thereof;
(vii) review of the scope and extent of internal audit, audit (xvi) consideration of any other issue or matter as may be
plan, reporting framework and procedures and assigned by the Board;
ensuring that the internal audit function has
adequate resources and is appropriately placed
within the company;
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(ii) Recommending to the Board the selection, (iv) Consideration and approval on recommendations of
evaluation, compensation (including retirement CEO on such matters for Key management positions
benefits) and succession planning of the Chief who directly report to Chief executive officer.
Executive Officer.
(v) Consideration of any other issue or matter as may be
(iii) Recommending to the Board the Selection, assigned by the Board of Directors.
ANNOUNCEMENT OF
FINANCIAL RESULTS
The Company has communicated its Quarterly / Half-Yearly and Annual Financial Results in a timely manner. Following
is the timeline for authorization of financial statements by the Board of Directors:
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All the members have extensive knowledge and experience in the field of finance, accounting, controls, system
management, reporting and compliance areas.
During the year, four meetings of the Audit Committee were held which the Chief Executive Officer and Chief Financial
Officer also attended by invitation. The external auditors of the company also attended two of the meetings when issues
related to accounts and audit were discussed.
The Audit Committee reviewed quarterly, half-yearly and annual financial statements of the Company and recommended
for approval of the Board of Directors. It has also reviewed preliminary announcements of results prior to publication. BAC
ensured that:
• Appropriate accounting policies have been consistently applied except for the changes, if any, which have been
appropriately disclosed in the financial statements.
• Accounting estimates are based on reasonable and prudent judgment. Proper and adequate accounting records
have been maintained by the Company in accordance with the applicable laws and financial reporting is consistent
with management processes and adequate for shareholder needs.
• These financial statements have been prepared in accordance with approved accounting standards as applicable in
Pakistan. Accordingly, approved accounting standards comprise of such International Financial Reporting Standards
(IFRSs) issued by the International Accounting Standards Board as are notified under the Companies Act, 2017 (the
Act), provisions of and directives issued under the Act. In case requirements differ, the provisions of or directives
under the Act prevail.
• The CEO and the CFO have endorsed the standalone as well as consolidated financial statements of the Company and
the Board of Directors Report. They acknowledge their responsibility for true and fair presentation of the Company’s
financial statements, accuracy of reporting, compliance with regulations and applicable accounting standards and
establishment and maintenance of internal controls and systems of the company.
The BAC has effectively implemented the internal control framework through an in-house Internal Audit function, which is
independent of the External Audit function. The Company’s system of internal controls is sound in design and has been
continually evaluated for effectiveness and adequacy.
The BAC has ensured the achievement of operational, compliance and financial reporting objectives, safeguarding of the
assets of the Company and the shareholders wealth through effective financial, operational and compliance controls and
risk management at all levels within the Company.
BAC also evaluated the significant changes in the external and internal environment and risks arising out of. BAC ensured
that significant controls and strategies are in place to mitigate those risk.
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BAC also reviewed IT Governance practices and instances of cybersecurity breaches. Committee underscored that breach
of cybersecurity may have implication for data authenticity and Company physical and virtual assets. CIO also apprised the
committee about the controls in place and future plans in this regard.
Internal audit
The Internal Audit Department carried out independent audits in accordance with an internal audit plan which was
approved by the BAC. Further, the BAC has reviewed material Internal Audit findings and management’s response thereto,
taking appropriate action or bringing the matters to the Board’s attention where required.
The Head of Internal Audit has direct access to the Chairman of the BAC and BAC has ensured staffing of personnel with
sufficient internal audit acumen and that the function has all necessary access to management and the right to seek
information and explanations.
Coordination between the external and internal auditors was facilitated to ensure efficiency and contribution to the
Company’s objectives, including a reliable financial reporting system and compliance with laws and regulations.
The Committee regularly reviews the mechanism for employees and management to report concerns to the Audit
Committee and ensures that any allegations are scrutinized seriously. During the year, no whistle was blown which needed
to be reported to BAC.
The external auditors of the Company, M/s A.F. Ferguson & Co, Chartered Accountants, have completed their audit of the
standalone and consolidated financial statements, the “Statement of Compliance with Listed Companies (Code of
Corporate Governance) Regulations, 2019” for the year ended June 30, 2023.
The BAC has reviewed and discussed Key Audit Matters and observations with the external auditors. The final Management
Letter including such audit observations is required to be submitted within 45 days of the date of the Auditors’ Report on
the financial statements as required by the Code of Corporate Governance and shall therefore, accordingly be discussed
in the next Board Audit Committee meeting.
The external auditors were allowed direct access to the Audit Committee.
External auditors shall retire on the conclusion of the Annual General Meeting. Appointment of external auditors and fixing
of their audit fee was reviewed and the Audit Committee following this review, recommended to the Board of Directors for
reappointment of M/s. A.F. Ferguson & Co., Chartered Accountants, as external auditors for the year ending June 30, 2024.
The current engagement partner has started his tenure from FY 2021.
The Company also obtains taxation related services from M/s. A.F. Ferguson & Co, Chartered Accountants as it is one of
the reputed firm in provision of said services and has sound professional policies and procedure to ensure independence.
BAC ensured that sufficient safeguards are in place both at firm level and management level to ensure independence and
objectivity of external auditors. Being one of the Big Four Audit firms, the Audit Committee is satisfied with the integrity,
objectivity and effectiveness of the services provided by the firm.
M/s. A.F. Ferguson & Co., Chartered Accountants has been given a satisfactory rating under the Quality Control Review
Program of the Institute of Chartered Accountants of Pakistan (ICAP) and they are registered with Audit Oversight Board
of Pakistan. The firm is fully compliant with the International Federation of Accountants (IFAC) Guidelines on Code of
Ethics, as adopted by ICAP and have indicated their willingness to continue as auditors for the year ending June 30, 2024.
The Company has issued a very comprehensive Integrated Annual Report, which gives fair, balanced and understandable
information in excess of the regulatory requirements to offer an in depth understanding about the management style, the
policies set in place by the Company, its performance during the year, and future prospects to various stakeholders of the
Company.
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The Audit Committee believes that the Integrated Annual Report 2023 includes both financial and non-financial
performance, risks and opportunities and outcomes attributable to Company’s activities and key stakeholders having
significant influence on its value creation ability
• The Company has adhered in full, without any material departure, with both the mandatory and voluntary provisions
of the listing regulations of the Pakistan Stock Exchange, Listed Companies (Code of Corporate Governance)
Regulations, 2019, the Company’s Code of Conduct and Values and the international best practices of governance
throughout the year.
• The Company has issued a “Statement of Compliance with Listed Companies (Code of Corporate Governance)
Regulations, 2019” which has also been reviewed and certified by the External Auditors of the Company.
• The Company’s Code of Conduct has been disseminated and placed on Company’s website.
• Closed periods were duly determined and announced by the Company, precluding the Directors, the CEO and
Executives of the Company from dealing in Company’s shares, prior to each Board meeting involving announcement
of interim/final results, distribution of dividend to the shareholders or communication of any other business decision,
which could materially affect the market share price of the Company
• All direct or indirect trading and holdings of Company’s shares by Directors & executives or their spouses were
notified in writing to the Company Secretary along with the price, number of shares, form of share certificates and
nature of transaction which were notified by the Company Secretary to the Board within the stipulated time. All such
holdings have been disclosed in the Pattern of Shareholding
• The statutory and regulatory obligations and requirements of best practices of governance have been met
The BAC has reviewed the related party transactions and recommended the same for approval of the Shareholders in the
Annual General Meeting after ratification from the Board of Directors.
Self evaluation
The Committee members carried out the Annual Evaluation of the BAC in terms of structure, composition, frequency of
meetings and contribution towards Board in decision making and policy making.
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ERP has full support of the management in terms of ERP System security in connection with
resources required and emphasis on use of the system. sensitivity of Data
System is kept updated through regular upgrades. DGKC
is currently on ORACLE for execution of business Authorization to transactions and reports is granted
processes. A rectifying system is in place to address based on business user role in organization. There are
business users’ issues and service requests. A full different levels ranging from entry level to checking and
dedicated team is employed by DGKC in this regard. approval level to ensure segregation of duties. This is
duly reviewed by our internal audit function, ERP
department and process owners in finance department.
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IT GOVERNANCE AND
CYBER SECURITY
BOARD GOVERNANCE under IT governance policy, the Company has taken
sufficient measures to ensure its network security and
FRAMEWORK has implemented stringent controls to protect its data
OVER IT AND CYBER SECURITY privacy, compliance with legal and regulatory
requirements of cyber security and continuously
IT governance, otherwise referred to as “enterprise upgrades the systems. SOC (Security Operation Center)
governance of IT” or “corporate governance of IT”, is a has been implemented along with EDR/XDR solution for
focus area of corporate governance that is concerned with Servers and Endpoints. Best practices are regularly
the organization’s IT assets. In analogy to corporate researched and applied with the goal of effectively
governance, it is concerned with the oversight of IT managing and monitoring cyber hazards. In collaboration
assets, their contribution to business value and the with the legal advisors, the function keeps track of any
mitigation of IT-related risks. amendments to laws and regulations, such as the
Prevention of Electronic Crimes Act 2016 and the
Board has developed IT governance framework with the Copyright Ordinance of 1962. Company’s CIO is
following stated objectives: empowered to enforce, evaluate and monitor this process
on regular basis.
• Strategic alignment, with focus on aligning IT with the
business and collaborative solutions During the year, the system observed numerous cyber
attacks on database and Information System. However,
• Value delivery, concentrating on optimizing expenses with proper controls, layers of latest security measures,
and proving the value of IT these attacks were successfully thwarted. No
compromise of data and physical assets were observed
• Risk management, addressing the IT related business during the year.
risks
IT GOVERNANCE AND
• Resource management, optimising IT related
knowledge and resources CYBERSECURITY PROGRAMS,
POLICIES AND PROCEDURES
• Performance management, monitoring IT enabled
investment and service delivery. IT Governance Framework provides basis for IT
Governance policy that also include cybersecurity and IT
In the line of above stated objectives, the Board has related risk management. The features of the policy are
developed IT Governance policy for the management to as follows:
implement. The policy is continuously evaluated and
discussed keeping in view rapidly changing IT • Establishing information technology goals, and the
environment and cyber risks. strategies for achieving IT related goals.
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• The controls, rules and procedures for all individuals • BYOD is strictly prohibited in organizations.
accessing and using an organization’s IT assets and
resource. • To monitor Physical Security, deployment of security
appliances is in the implementation process with 24/7
CYBERSECURITY AND BOARD’S surveillance.
INDEPENDENT COMPREHENSIVE
COMMITTEE TO OVERSIGHT IT
SECURITY ASSESSMENT
GOVERNANCE AND
CYBERSECURITY MATTERS Apart from the compliance with defined security policies
and procedures, a third party independent assessment
Company holds 2-3 meetings annually comprising of Key and review related to:
Management Personnel, CIO and one executive director
with an agenda of new developments, network • Technology environment and networks are carried out
upgradation, security risks, network, and system-level By CNS Engineering Services.
challenges and resolution strategy and approvals for the
implementations of new tools and enhance security level • ERP is carried out by SCARLET Systems and PwC (as
over enterprise level. The recommendations from this part of external audit).
committee is presented to Board Audit Committee for
further recommendations. The recommendations are Both are carried out annually to ensure that adequate
then presented to Board for approvals or any or additional controls are in place to address the cyber security risks.
line of actions. The management committee is further These reviews related to risk assessments remain under
tasked with apprising the Board about new and potential observation from time to time as soon as some new
IT risks, their likelihoods and measures to address them. vulnerabilities related to systems come to notice.
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CONTINGENCY AND DISASTER This digital transformation offered by Industry 4.0 will
allow DGKC to create digital twins that are virtual replicas
RECOVERY PLAN of processes, production lines, plants and supply chains.
DGKC has deployed SSL certificated for web/Cloud traffic
Disaster recovery and various backup plans are in place to as we are using a hybrid solution and a complete cloud
ensure continuity of company’s business and to cope with computing system is in process to transform company
the failures resulting into a cyber breach. Company’s digitally.
cyber insurance is under consideration. For Disaster
Recovery, we have three levels of backups of data of During the year, DGKC automated the documentation
users, systems, configurations, etc. Disaster Recovery system with M-files providing base for paperless
Plan related to IT contains the guidelines related to: environment in future. Further, the process provides
complete trail of all the transactions enabling the users to
• The criteria to activate the plan including detection of have easy access to data and information.
a disaster and notification to relevant personnel;
DGKC also developed mobile app for the management to
• Procedures to implement the recovery strategy and have easy access to MIS reports that are updated on real
recover all vital data, information, software, hardware time. HR system was also developed for all the employees
and communication networks; to have easy access to information regarding leaves,
medical requests, attendance etc
• Procedures to revert back to normal processing;
testing procedures
EDUCATION AND TRAINING TO
Backup testing is performed on regularly basis to ensure MITIGATE CYBER SECURITY RISKS
the reliability and completeness of backup media.
We encourage and monitor that user trainings are held
ADVANCEMENT IN DIGITAL regularly at all sites for development. In addition, focused
sessions are held for infrequent processes and complex
TRANSFORMATION TO IMPROVE occasional scenarios relating to cyber security on regular
TRANSPARENCY AND basis live and through video conference. Company also
GOVERNANCE provides awareness related to emerging cyber threats
that is disseminated via emails to all Company users.
Industry 4.0 is revolutionizing the way companies
During the year, DGKC has also provided some specific
manufacture, improve and distribute their products.
training relating to cyber security to its employees from
Manufacturers are integrating new technologies,
the NETCAD Academy (cyber security courses on the
including Internet of Things (IoT), cloud computing and
platform of a virtual university with an affiliation with
analytics, and AI and machine learning into their
CISCO) and some training courses from Udemy.
production facilities and throughout their operations.
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COMPLIANCE OF FINANCIAL
ACCOUNTING AND REPORTING
STANDARDS
DGKC is preparing its statutory financial statements in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
i) International Financial Reporting Standards ('IFRS') issued by the International Accounting Standards Board (IASB)
as notified under the Companies Act, 2017; and
ii) Provisions of and directives issued under the Companies Act, 2017 ('Act').
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
Note 2.2 to the unconsolidated financial statement specify initial application of standards, amendments or an
interpretation to existing standards.
The Board holds the responsibility for supervising the Company's financial reporting process. On the other hand, the
management is accountable for both the creation and accurate presentation of the financial statements. Management is
also tasked with establishing internal controls as necessary to ensure the preparation of financial statements devoid of
significant errors or fraudulent activities.
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ADOPTION OF INTERNATIONAL
INTEGRATED REPORTING
FRAMEWORK
We're pleased about adopting the International Integrated Reporting (IR) Framework. An integrated report is a concise
communication about how an organization’s strategy, governance, performance and prospects, in the context of its external
environment, leads to the creation of value over the short, medium and long-term. Keeping in view the globalized business
scenario and the ever-increasing expectations of all the stakeholders being users of published annual report, integration of
corporate governance briefings, social and environmental information with financial information is vital to organizational position
and performance reporting.
DGKC fully applies the Fundamental Concepts’, ‘Content Elements’ and ‘Guiding Principles’ of IR framework. This is a true and
fair move that connects us to global standards, support us to reflect a complete picture of how we create value as a company.
Fundamental Concepts
Fundamental concept behind IR framework is to reinforce the fact that value is not created, preserved or eroded by or within an
organization alone. It is:
• Influenced by the external environment
• Created through relationships with stakeholders
• Dependent on various resources
Guiding Principles
The seven Guiding Principles underpin the preparation and presentation of an integrated report, informing the content of the
report and how information is presented.
• Strategic focus and future orientation
• Connectivity of information
• Stakeholder relationships
• Materiality
• Conciseness
• Reliability and completeness
• Consistency and comparability
These Guiding Principles are applied individually and collectively for the purpose of preparing and presenting an integrated
report; accordingly, judgement is needed in applying them, particularly when there is an apparent conflict between them (e.g.
between conciseness and completeness).
Contents of elements
An integrated report includes eight Content Elements, posed in the form of questions to be answered. These are:
• Organizational overview and external environment
• Governance
• Business model
• Risks and opportunities
• Strategy and resource allocation
• Performance
• Outlook
• Basis of preparation and presentation
We fully apply underlying concept behind IR framework for the purpose of transparent and fair communication with our
stakeholders enabling them to make effective and timely decision.
Raza Mansha
Chief Executive
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Mr. Khalid Niaz Khawaja1 (Ex-Chairman) 4 Mr. Raza Mansha (Chief Executive Officer) 6
Mr. Usama Mahmud2 2
Mr. Mahmood Akhtar3 2 Mrs. Naz Mansha (Chairperson) 4
Mr. Shehryar Ahmed Buksh4 (Chairman) 2
Mr. Shahzad Ahmad Malik5 2 Mr. Shehryar Ahmed Buksh1 4
Audit Committee was re-constituted on November 4, 2023 Mr. Khalid Niaz Khawaja 7
after Election of Directors held on October 28, 2022
Mr. Usama Mahmud 6
1 Re-appointed as member of Audit Committee on November
04, 2023 Mr. Farid Noor Ali Fazal 7
2 Retired as member Audit Committee on October 28, 2023
3 Retired on October 28, 2023
Mr. Shahzad Ahmad Malik 6
4 Appointed as member and Chairman of Audit Committee on
November 04, 2023
5 Appointed as member on November 04, 2023 Mr. Mikaal Mustafa Iqbal2 0
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PATTERN OF SHAREHOLDING
AS ON 30/06/2023
Continued
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CATEGORIES OF SHAREHOLDERS
AS ON JUNE 30, 2023
SHARES HELD %
8. General Public:
9. Others
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ADDITIONAL INFORMATION
AS ON JUNE 30, 2023
No. of Shares %
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IV. Executives:
Trading in the shares of the Company, carried out by its Directors, Chief Excutive Officer, Chief Operating Officer, Chief
Financial Officer, Head of Internal Audit, Company Secretary, their Spouses and minor children during the period July
01, 2022 to June 30, 2023, are as under:
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97
PERFORMANCE
KEY PERFORMANCE INDICATORS 100
CHAIRPERSON’S MESSAGE 102
CHIEF EXECUTIVE MESSAGE 103
ANALYSIS OF FINANCIAL PERFORMANCE 104
ANALYSIS OF NON-FINANCIAL PERFORMANCE 105
FINANCIAL RATIOS 107
ANALYSIS OF FINANCIAL RATIOS 108
HORIZONTAL AND VERTICAL ANALYSIS 109
SUMMARY OF CASH FLOW STATEMENT 111
METHODS AND ASSUMPTIONS IN COMPILING INDICATORS 111
CASH FLOW STATEMENT FROM DIRECT METHOD 112
SEGMENTAL REVIEW AND ANALYSIS 113
SHARE PRICE SENSITIVITY 114
DECLARATION OF DIVIDEND 114
LOCAL VS IMPORTED RAW MATERIAL 115
QUARTERLY ANALYSIS 116
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DGKC
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DGKC 2023
Production (MT)
2023 4,628,354
2022 6,370,194
Percentage -27%%
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CHAIRPERSON’S MESSAGE
I am delighted to share my views on occasion of
presenting the annual report of the Company.
FY23 has been very tough for all the segments of the
society. Record breaking inflation, political chaos, legal
battles and indecisiveness on part of Government have
cost the middle-class segment of society very badly.
Consequently, GDP grew by 0.29% only while large scale
manufacturing shrank by 8.11%, depicting low volumes
and profitability across all industries. Increase in Super
Tax rate from 4% to 10% also affected the bottom line of
the industry
Lahore
August 31, 2023
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Mr Raza Mansha
Chief Executive Officer
Lahore
August 31, 2023
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ANALYSIS OF FINANCIAL
PERFORMANCE
Company historically registered satisfactory Actual Budget
performance with regard to its financial performance.
1
Rs in million
During the period, the Company registered Profit Before
Tax of Rs 3.163 billion despite historic high finance cost of Sales 64,984 77,647
Rs 6.742 billion. Comparison with last year and budgeted GP 9,556 9,435
results are as follows: PBT 3,163 4,937
The plant remained under-utilized due to demand and • High discount rates may indicate better profitability
supply gap prevailing in local market. Clinker export for banking sector. Company has significant
sales also decreased due to unfavorable rates in export investment in MCB Bank Limited. Management
market. In addition to that, there is inflationary pressure expects better rate of dividend from MCB, that
on cost side. The whole effect of inflation could not be contributes positively towards profitability.
passed on to customers by increasing prices. Company
resorted to different cost saving measures, like changing • Paper bags prices are also expected to decrease on
mix of coals, use of RDF and TDF in replacement of coal account of downward trend of international kraft
etc. Despite all these measures, Company could not avoid paper prices.
hit on its GP. PBT decline was mainly attributable to
rising finance costs, mainly on account of high discount • Company will contribute to export clinker to keep
rates. plant capacity utilization at optimum level,
contributing towards fixed costs.
Company’s net profitability is negative due to increase in
deferred tax liability mainly on account of rise in super tax • Company is also looking for exports options in USA
and lapse of tax credits. market at favorable rates.
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ANALYSIS OF NON-FINANCIAL
PERFORMANCE
Analysis of non-financial performance has been recent past. In view thereof, DGKC undertook a
presented for material non-financial KPIs relevant for the comprehensive and critical review of its Information.
business and stakeholders around other forms of
capitals as mentioned under International Integrated Security function followed by several actions to further
Reporting Framework. fortify protective measures. Active directions and support
by the Board of Directors enabled swift execution.
Manufactured Capital Further investment in the security infrastructure has also
been approved to strengthen the security posture
Our business activities of production, marketing and
distribution of quality cement help us to create value for Human Capital
our stakeholders and economy. To meet the expectations
of our customers and in line with our strategy, we are DGKC has a well-defined Human Resource policy to
committed to producing only quality cement which manage HR priorities, succession planning, recognizing
correspond to the international environment and safety and rewarding the prestigious talent and leadership
standards. During the year, our sales and marketing development. Our aim is to bring the most talented and
team did not receive any significant complain about the imaginative people on board, nurture their talent and
quality of the cement from its dealers and distributors. In provide them with the best facilities to exhibit their talent.
fact, Company managed to get certifications from
different USA states regarding quality of cement and • DGKC has employed 1,902 permanent employees in
upkeeping of its plants, enabling DGKC to diversify its our operations including plants, marketing offices
exports base to USA market. and head office. The Company offers the right mix of
benefits, rewarding work and career advancement
As part of its strategy to continuously invest in state-of prospects to attract and retain competent people.
the art and green projects, DGKC installed 7 MW solar
power plant at its Khairpur site, to replace high cost • In 2023, DGKC paid Rs 5.4 billion as workforce
energy from fossil fuels and IESCO. salaries and benefits compared to Rs 4.6 billion last
year. The Company also maintains funded gratuity
Intellectual Capital schemes for its employees.
Intellectual Capital is the value of the Company’s • DGKC does not discriminate on the basis of gender
cumulative knowledge and resources that it can utilize to as benefits are provided according to the type of
enhance profits, gain new customers, or otherwise employment contract.
improve the business. The Company strongly believes in
allocating resources to its development as we believe • To improve our competitiveness and value creation
that it contributes significantly towards enhancing ability, skills retention and development are crucial.
operational efficiency and gaining competitive advantage It is critical that we play an active role in supporting
in the modern technological era. the existing workforce through reskilling and
upskilling. DGKC believes that people learn every
DGKC accords highest priority to the development of its day, through experiential, social or formal avenues.
Information Systems resources to ensure accurate data During the year, various training workshops were
processing, efficient communications, streamlined conducted at different plant sites, to keep
business processes and accumulation of market employees updated about latest trends regarding
intelligence. The Company also continues to adopt and operations, IT and sales.
leverage the latest state of the art Information
Technology infrastructure in line with best practices to • DGKC is committed to the wellbeing of employees by
streamline business processes and enhance operational providing a safe working environment. We continue
efficiency. to focus on enhancing safety systems and adopt
most recent industrial safety standards to eliminate
Information Security has become a cause of concern or minimize the potential harm from the risks and
globally, especially during the ‘work from home’ hazards. Significant security investment has been
environment. Leading international and local made at different sites, especially at DG plant,
organizations have witnessed security breaches in the keeping in view law and order situation in
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FINANCIAL RATIOS
FY 23 FY 22 FY 21 FY 20 FY 19 FY 18
Profitability Ratios
Gross Profit ratio % 14.70 17.97 17.89 4.17 13.24 28.50
Net Profit to Sales % (5.60) 5.12 8.25 (5.68) 3.97 28.82
EBITDA Margin to Sales % 21.31 23.27 24.99 12.06 21.71 33.24
Operating leverage ratio % 18.58 18.74 22.89 21.57 20.73 22.80
Return on Equity (Average) % (5.42) 4.15 5.31 (3.14) 2.17 11.63
Return on Capital employed % 9.28 8.24 6.56 0.79 4.72 7.21
Shareholders' Funds (Net Equity) Rs ('000') 64,192,277 69,918,102 73,477,873 66,644,157 70,928,415 77,134,421
Return on Shareholders' Funds % (5.66) 4.25 5.06 (3.24) 2.27 11.46
Liquidity Ratios
Current Ratio (times) Times 0.80 0.89 0.91 0.91 0.98 1.29
Quick / Acid test ratio Times 0.32 0.36 0.52 0.56 0.57 0.88
Cash to Current Liabilities Times 0.01 0.01 0.33 0.36 0.42 0.73
Cash flow from operations to Sales Rs ('000') 6,504,238 (3,932,479) 6,161,981 (343,131) (1,530,631) 8,910,698
Cash flow to capital expenditures Rs ('000') (3,418,069) (1,739,551) (5,087,104) (7,374,428) (7,014,359) (17,816,476)
Cash flow coverage ratio Times 1.99 0.26 3.59 1.30 0.54 21.53
Capital Structure
Financial leverage ratio % 31.57 34.03 31.76 36.65 32.78 26.46
Weighted average cost of debt (excluding taxation) % 15.15 7.91 6.40 10.48 8.99 1.93
Debt to Equity ratio
Debt/ (Debt+Equity) (%) % 39.85 39.93 37.34 41.60 36.79 29.48
Debt/ (Debt+Equity) (%) (w.r.t Market value) % 65.42 62.93 45.88 55.95 62.50 39.13
Net assets per share Rs/Share 146.52 159.59 167.71 152.11 161.89 176.06
Interest Cover /Time Interest earned ratio Times 2.05 3.78 3.86 0.99 2.66 19.63
Others
No of employees (average during the year) No. 1,902 1,900 1,861 1,824 1,716 1,455
Production per Employee Tons 2,433 3,353 3,361 3,751 3,718 3,033
Revenue per Employee Rs ('000') 34,166 30,549 24,238 20,851 23,611 21,078
Staff turnover ratio % 10.04 8.16 5.96 7.24 7.46 7.08
% of Plant Availability % 68.87 94.79 93.08 101.81 94.95 109.79
Customer Satisfaction Index (based on average
no. of distributors) % 99.30 93.80 98.00 99.20 97.60 96.20
Spares Inventory as % of Assets Cost % 5.40 5.18 4.50 4.41 3.68 2.72
Maintenance Cost as % of Operating Expenses % 7.29 6.15 9.47 8.51 9.70 10.02
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Current ratio remained less than 1 for last 5 years. Part of Average number of employees almost remained same
Cash generation has been utilized in capex payments. with turnover ratio of 10.04%. As discussed earlier, plant
There has been decrease in short term investment value remained under-utilized due to demand and supply gap,
in MCB due to decline in share price. The Company has causing lower production per employee. Customer
been timely meeting its short-term liabilities, debt satisfaction index almost touched to 100%, consistent
repayments and statutory obligations. The Company has with the trend over the years. The indicator is based on
not made any default in any of its short-term obligations. number of distributors/dealers left the company’s
On the cash flow side, Company generated Rs 6.5 billion network during the year. Maintenance cost % of operating
of cash from its operations out of profit before tax of Rs expenses increased mainly on account of inflationary
3.1 billion. This depicted efficient working capital pressure and schedule maintenance of power plant at DG
management. Cash flow coverage has also been above plant site.
1.0 indicating no imminent risk of inability to meeting
short term liabilities.
Market ratios
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During the year total balance sheet footing dropped on account of net loss and FV loss on investments. This fact disturbed vertical
analysis of balance sheet of all balance sheet items. Non-current liabilities as percentage of total assets showed upward variation
due to increase in deferred tax liabilities on account of lapse of tax credits and revaluation of deferred tax liability from 33% to 39%
due to super tax. Net Equity declined due to FV loss and net loss during the year. Current liabilities in absolute terms increased
due to increase in accrued markup due to hike in discount rates. Consequently, its share in total balance sheet footing showed
upward trend in FY23.
Taking into account profit and loss vertical analysis, GP declined from last year due to under-utilization of plant and inflationary
pressure, the effect of which could not be passed on to customers. Finance cost jumped upward due to hike in discount rates
despite repayment of loan. Almost whole of GP was absorbed by Finance cost. PBT was converted into net loss after taxation due
to super tax impact of 4% to 10% and lapse of tax credits.
Horizontally, taking YOY% analysis, we see significant increase in non-current liabilities due to increase in deferred tax liability
effect. Current liabilities increase was justified with increase in accrued markup due to increase in discount rate. On profit and
loss side, there is increasing trend on sales and COS side mainly due to inflation push on price and costs. Finance cost also
increased dramatically on account of record high discount rates despite repayments of long term loans. PAT showed massive
variation due to one time adjustment in taxation related to super tax and tax credit lapse in current year.
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0.60
0.00
FY23 FY22 FY21 FY20 FY19
0.40
(5.00)
0.20
-
(10.00)
FY23 FY22 FY21 FY20 FY19
165.00 41.00
40.00
160.00
39.00
155.00
38.00
150.00
37.00
145.00 36.00
140.00 35.00
135.00 34.00
FY23 FY22 FY21 FY20 FY19 FY23 FY22 FY21 FY20 FY19
120.00
4.00
100.00
80.00 3.00
60.00
2.00
40.00
1.00
20.00
0.00 -
FY23 FY22 FY21 FY20 FY19 FY23 FY22 FY21 FY20 FY19
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Analysis of cash flow statement shows that Company depicted strong cash potential before working capital changes effect
taken into account. Effect of working capital on cash flow was positive this year as there was built up of coal inventory and
clinker stock last year in anticipation of coal price increase and scheduled shutdown upfront. Company has consistent and
reliable stream of dividend income that has been reflected in investing activities. However, continuous capital expenditure
inline with industry trends and upkeeping of manufacturing facilities resulted in net cash out flow in investing activities.
During the year, Company also invested Rs 1 billion in Hyundai Nishat Motor (private) limited in line with shareholders’
approval. Company has been successfully reducing its debt from last two years as has been evidenced in net outflow in
financing activities.
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Payments for property, plant and equipment and Intangible (3,418,069) (1,739,551)
Proceeds from disposal of property, plant and equipment 206,392 99,592
Long term loans, advances and deposits - net (2,900) (4,013)
Investment in equity instruments (1,007,500) -
Recovery of loan given to related party - 765,000
Interest received 3,551 37,882
Dividend received 2,471,373 2,302,736
Net cash outflow from investing activities (1,747,153) 1,461,646
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-23
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the DGKC.
DGKC shares are traded on Pakistan. Its free float is • Profitability and future prospects of equity
50.0% and total market capitalization at the end of investments of the Company also incentivize the
financial year was PKR 22 billion. Its beta is 1.71. Share investors. Company has major investments in MCB
price is exposed to numerous quantitative or qualitative Bank Limited, Hyundai Nishat Motor (Pvt) Limited and
factors during the year some of which are listed below: Nishat Mills Limited etc. Any positive developments in
these sectors also affected DGKC share price as it
• High inflation trend in the country during the year on derived dividend income from it.
account of high fuel and utilities prices as it could
affect profitability. DGKC is exposed to K.Electric and • State bank announcements related to discount rates
Wapda for its electricity requirement. Any variation on as company’s profitability is highly exposed to
account of electricity prices may materially affect financial expenses. This has also been evident from
Company overall profitability. current year results where higher financial expenses
eroded the GP into lower profitability before tax.
• Commodity prices particularly coal, that trended very Company has around Rs 40 billion of exposure
high during the year, as the effect could not be passed towards debt. Any change in KIBOR rate significantly
on to customers and may reduce Company’s margin. affects its profitability. Owing to higher discount rates,
Company has shifted to local and Afghan coals and DGKC share price remained depressed throughout
towards RDF/TDF in substitution of coal to offset the the year.
negative effect of Imported coal.
• DGKC is also exposed to general market and industry
• Government regulation and taxation policies relevant risk prevailing in the stock market.
to cement sector in particular and businesses as
DECLARATION OF DIVIDEND
The company has registered net loss of Rs 3.6 billion. any dividend for FY23. The recommendation has been
Keeping in view debt profile and future demand cycle, made with aim of lowering outstanding debt, financial
Board of directors of the Company has not recommended expenses and maximizing shareholders’ wealth.
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LOCAL VS IMPORTED
RAW MATERIAL
Greatest strength for cement manufacturer is availability Fuel in the form of RDF, as part of cost measure and
of its raw material at low cost. Limestone and shale environment sustainability initiative. These measures
quarries are usually leased from the government on a helped DGKC to offset negative fallouts of high coal prices
long-term basis. Other additives are either self-mined or in international market without disrupting its operations.
purchased from local markets. Packing material is For the purpose of price sensitivity analysis of major raw
largely purchased from subsidiary, Nishat Paper Product material, coal, a fluctuation of Rs 100/ton in its price
Company Limited. affects cost of clinker by Rs 14/ton that ultimately
reduces margins.
Coal is the major fuel for cement production and power
generation that accounts for about 51% of manufacturing
cost. For FY23, coal prices showed stability and During the year Company purchased USD 16 million of
downward trend after touching record high of CIF USD imported coal that are exposed to foreign currency.
400/ton in international market last year due to
commodity super cycle and Russia-Ukraine War. DGKC DGKC consistently monitors coal price and currency rates
managed to diversify coal sources, largely purchasing and takes necessary steps accordingly
from Afghan and local market in addition to international
market. DGKC also partially shifted to Alternate Energy
Breakup of Fuel
8%
29%
63%
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QUARTERLY ANALYSIS
Extracts of Profit and loss (Rs in thousands)
FY22 Q1 Q2 Q3 Q4 FY 23
Cash flow from Operating activities (3,932,479) 1,756,957 (1,196,062) 6,860,743 (917,400) 6,504,238
Cash flow from Investing activities 1,461,646 (150,536) (785,206) (567,777) (243,634) (1,747,153)
Cash flow from Financing activities (4,864,956) (931,553) (1,840,230) (504,054) (1,607,735) (4,883,572)
Quarterly results were in line with industry trends and towards growth trajectory except for Q4 where PAT was hit by high
taxation expense due to enactment of super tax from 4% to 10% and lapse of tax credits. Q4 was also slowed down in terms
of sales and lower GP on account of lower demand. This was depicted from Government tough negotiation with IMF and
subsequent fiscal adjustments. GP% also declined in Q4 due to lower base of sales and high per unit fixed costs
Consequently, Company resorted to exporting clinker to contribute positively towards fixed costs. Finance costs kept on
increasing quarter on quarter despite reduction in borrowing, the trend in line with SBP announcements of hike in policy
rate.
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117
FUTURE OUTLOOK
FORWARD-LOOKING STATEMENT 120
PERFORMANCE OF THE COMPANY AGAINST FORWARD-LOOKING
DISCLOSURES MADE LAST YEAR 121
STATUS OF THE PROJECTS 121
SOURCES OF INFORMATION AND ASSUMPTIONS USED
FOR PROJECTIONS / FORECASTS 121
2023 Annual Report
DGKC
FORWARD-LOOKING STATEMENT
As we look ahead for our cement company's journey, it's This will put significant pressure on our profitability as it
crucial to recognize the effects of both known and already did in FY23. The situation persists in short term to
possible risks related to our product, finances, and how medium term. However, as inflation numbers settle
we work over the short, medium, and long terms. This down, we foresee the interest rates to drop down in 2-3
detailed assessment aims to show how things are years time. Further, repayments of long term loan will
shaping up in the Pakistani cement industry and also reduce our total exposure.
specifically influencing our company: Economic instability may also affect how much people
want to invest in construction projects and big
Expanding Export Base infrastructure plans in the next few years.
We're expecting a significant increase in exports, and this Dealing with High Energy Costs And
positive direction is mostly because coal prices have
Inflation
recently gone down. This makes it more reasonable to
export cement, especially to the US as we have already
Energy costs are a constant challenge, and we need to
got necessary certifications to get ourself registered as
change how we work to save energy and handle the
prospective supplier. We also secured some orders last
pressure on our profits. Considering the market
year and we aimed to penetrate there more aggressively.
challenges, it is not possible to pass on whole effect of
In the medium to long term, we plan to increase our
this cost pressure to consumers by increasing sale price.
export base from Hub plant to offset the low local demand
Changes in how much things cost (inflation) and how
in the South Market.
money from different countries compares (exchange
rates) might cause problems with getting what we need
However, it's important to note that higher costs for
and selling our cement at good prices.
materials, labor, and transportation have made it tough
for all businesses to stay reasonably profitable. Because
of this, fewer new construction projects are starting, Competition in the Medium Term
which affects the demand for cement locally.
Looking ahead, our competitors might become stronger,
which could lead to a competitive situation. To handle this,
Challenges in the Construction we're planning to be smart about how we set prices and
Sector manage our costs to make sure we stay strong in the
market and keep making money. Considering all of these
Builders are facing higher costs to get loans, which changes, we're taking an active approach. We're focusing
makes starting new projects more expensive. This on being innovative, making our workplace more diverse,
financial strain has led to less demand for cement and forming smart partnerships. We're also investing in
products in the market. We also expect that construction new ways to get energy, like solar power, to make our
work might slow down, and there are limits on spending operations more efficient. By using cost optimization
for public projects, adding complications as we approach models and finding better ways to do things, we're ready
the start of FY2024. The situation persists in short to to adapt to changes and find new ways to grow.
medium term. However, there is persistent housing
demand in Pakistan market. As situation gets better at When tough times come, we know how to turn them into
macro-economic level, we foresee the demand for chances for positive change. With our experience, ability
cement would grow at reasonable rate in long term. to change, and forward-thinking attitude, we're all set to
use uncertainty as a way to make things even better.
Impact of Interest Rates and We're confident that this will lead us toward long-lasting
success.
Economic Instability
Following is the projected results management believes
Interest rates have been high for a while and might even to achieve despite all above factors:
increase further, looking at inflation numbers. This, along
with the ongoing shaky economic and political situation 2024
and unstable exchange rate could increase our borrowing Total sales 69,465
costs and make consumers less confident. DGKC has high Gross Profits 13,102
exposure towards debt amounting to around Rs 40 billion. Profit before Tax 5,169
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The company's financial difficulties are consistent with the predicted impact of these factors on the company's
profitability. The GP remained in line with our forecasts. However, higher finance cost rate (than anticipated) and
additional super tax have further hampered the company's net profitability (due to deferred taxation impact) and
resulting net losses, aligning with the previously disclosed financial pressures.
However, because the current financial situation has very high interest rates, we made a careful choice to pause
the rest of the power projects we had planned. We did this because these projects would cost a lot due to the
high interest rates, so we need to think about them again and decide if they still make sense financially. We're
being responsible with our finances, and we're always looking for the best ways to make these projects happen.
We'll keep an eye on the economic situation, and when things look better, we'll restart these projects.
To make these predictions, we've looked at information from different places. We've paid attention to what's happening in
the cement industry, as well as how the bigger economy is doing. We've gotten this information from reliable sources like
the All-Pakistan Cement Manufacturers Association (APCMA), Annual Fiscal Budget, Economic research reports, Pakistan
Bureau of Statistics (PBS), and the International Monetary Fund (IMF), among others.
Inside our company, our managers have also worked hard to figure out what might happen. They've looked at how the
market is doing right now and where there could be opportunities for growth. They also get information directly from the
dealers and distributors in the market, predicting the future trends. Historical events and trends are also source of these
assumption and information.
It's important to know that these ideas about the future come from the thoughts and experience of our management team.
They know a lot about cement and the business world, and that's how they've come up with these predictions.
No assistance has been taken from any external consultant in this regard.
121
STAKEHOLDERS
ENGAGEMENT
STAKEHOLDERS ENGAGEMENT POLICY 124
STAKEHOLDERS’ ENGAGEMENT PROCESS 125
SIGNIFICANCE AND MANAGEMENT OF RELATIONSHIP
WITH STAKEHOLDERS 126
ENCOURAGEMENT OF MINORITY SHAREHOLDERS TO ATTEND
THE GENERAL MEETINGS 128
ISSUES RAISED IN THE LAST AGM 128
VALUE ADDED AND ITS DISTRIBUTION 129
BOARD COMMITMENT TOWARDS CORPORATE BRIEFING SESSIONS 130
HIGHLIGHTS ABOUT REDRESSAL OF INVESTORS' COMPLAINTS 130
INVESTORS' RELATIONSHIP SECTION ON WEBSITE 130
2023 Annual Report
DGKC
STAKEHOLDERS
ENGAGEMENT POLICY
DGKC recognizes that stakeholder engagement is an Stakeholder Engagement Standard, DGKC analyses its
integral part of our business operations. We strive to internal and external environment to identify its internal
provide long-term sustainable value to our stakeholders and external stakeholders, which may include those
such as investors, employees, customers, individuals, groups of individuals and/or organizations:
dealers/retailers, trade union and suppliers, government
and communities. To this end, it is vital for us to develop • that are directly or indirectly dependent on DGKC’s
an understanding of our stakeholders’ needs, interests activities, products or services and associated
and expectations. We endeavor to achieve this through performance, or on whom DGKC is dependent in order
collaboration and regular interaction with all our to operate
stakeholder groups. Effective stakeholder engagement on • to whom DGKC has, or in the future may have, legal,
an ongoing basis is essential for us to identify the commercial, operational or ethical/moral
opportunities and concerns arising from stakeholders’ responsibilities; and
material issues and work towards their effective • who can influence or have impact on DGKC’s strategic
resolution. The objectives of that policy are: or operational decision-making;
We identify stakeholders as those individuals, groups of Stakeholders are prioritized based on the relevance and
individuals or organizations that affect us and/or could be profiled into different categories depending upon the
affected by our activities, products or services and the specific context of engagement.
associated performance. In line with the AA1000
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STAKEHOLDERS’ ENGAGEMENT
PROCESS
At DGKC, we promote a culture of ongoing engagement and devise ways and means to address them.
with every stakeholder group, collecting feedback. The Potential risks may include participation fatigue, lack
most appropriate engagement tools and methods range of stakeholder integrity, conflicts of interest,
from written communications, one-to-one meetings, disruptive or uninformed stakeholders, and an
feedbacks, information sessions, joint projects, surveys, unwillingness to engage.
focus group discussions etc. We strive to abide by the • Allow stakeholders to provide feedback and engage
following when engaging with any stakeholder: positively in business operations;
• Prior to engaging with a stakeholder, define the • Proactively engage with and respond to those that are
purpose, scope and frequency of engagement and disadvantaged, vulnerable and marginalized.
design appropriate engagement methods. The Additionally, DGKC gives special attention and
method and the level of engagement with a develops special initiatives in relation to stakeholders
stakeholder is defined by nature of relationship that in areas that are underdeveloped;
DGKC has with them or aims to develop with them; • Settlement of stakeholder grievances in a fair,
• Assign adequate resources and responsibilities for equitable and timely manner;
effective stakeholder engagement, striving to imbibe • Align our goals and actions with the stakeholders’
the principles of inclusiveness and transparency at all high priority areas based on our assessment; and
times; • Communicate and report the outcome of the
• Acknowledge and assume responsibility about the stakeholder engagement to internal and external
impact of DGKC’s policies, decisions, products, stakeholder groups through various modes as
services and associated operations on the appropriate, including but not limited to the annual
stakeholders; report, notices on our official website, one-to-one
• Consider potential stakeholder engagement risks meetings etc.
prior to selecting the level or method of engagement,
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Annual Report
DGKC 2023
To summarize, our stakeholder engagement procedure is an essential and ever-evolving part of DGKC's activities. Through
committed teams and adapted communication tactics, we guarantee these connections are handled correctly, permitting us
to surpass difficulties, take advantage of opportunities, and establish durable value for all stakeholders.
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DGKC
ENCOURAGEMENT OF MINORITY
SHAREHOLDERS TO ATTEND
THE GENERAL MEETINGS
We value our shareholders who are the providers of • Notices are posted on the Company’s website and
Financial Capital. Each shareholder is important to the disseminated to PSX for better reach to the
Company irrespective of the holding and voting power. We shareholders.
value our investors, their concerns and grievances (if
any). We take the following steps to encourage our • We also provide video link facility to all shareholders
minority shareholders to attend the general meetings: for the general meetings.
• DVDs of the Annual Report of the Company along with • We structure interactive sessions to be engaging and
the printed proxy forms are circulated to every informative, providing opportunities for shareholders
shareholder. through corporate briefing session to ask questions,
raise concerns and participate in discussions.
• We provide proxy voting services to shareholders who
are unable to attend in person, making it easier for By implementing these policies, we aim to create an
them to have their say on matters of importance to inclusive environment that encourages minority
them. Proxy forms enable them to nominate someone shareholders to actively participate.
to attend the meeting on their behalf.
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Wealth Distributed
Suppliers:
- Against raw and packing materials 4,574,814 4,310,729
- Against services 1,633,825 1,799,674
- Against stores spares 4,418,134 3,282,181
- Against fuels and other energy sources 38,152,734 48,779,507 55% 33,234,367 42,626,951 53%
Employees 5,479,640 6% 4,680,304 6%
Government:
- Direct taxes 6,798,519 3,047,629
- Indirect taxes 19,190,821 18,651,861
- Other levies and duties 858,297 26,847,637 30% 1,305,235 23,004,725 29%
Providers of Capital:
- Banks 6,742,292 3,571,187
- Ordinary share holders - 6,742,292 8% 438,119 4,009,306 5%
Reinvested in business
- Depreciation 3,936,961 3,909,107
- Retained profits after dividend (3,635,976) 300,985 0% 2,534,013 6,443,120 8%
Other operating costs - Net 382,133 0% (447,927) -1%
88,532,194 100% 80,316,479 100%
2023 2022
Other operating cost - Net Other operating cost - Net
Providers of Capital Reinvested in business
Providers of Capital
Reinvested in business
Government Government
Employees Employees
Suppliers Suppliers
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2023 Annual Report
DGKC
The Company generally holds annual analysts’ briefings This briefing was held at DGKC’s head office and was
to present its business perspective to the investors keenly attended by representatives of Pakistan Stock
enabling them in making sound investment decisions. Exchange, investment analysts and other stakeholders;
Board values these engagements and feedbacks from and were followed by detailed ‘questions & answers’
such briefings are discussed in their next meetings. An sessions where all queries raised by the esteemed
executive director, on behalf of the Board, is present in the participants were appropriately answered.
briefings to address the concerns raised by the
stakeholders and if necessary, take them to Board for Detailed presentations of the Analysts’ Briefings can be
necessary action. accessed at our website:
https://www.dgcement.com/CorporateBriefingSession.html
Each shareholder is personally contacted and in collaboration with corporate department and registrar; complainants
were satisfied amicably.
INVESTORS' RELATIONSHIP
SECTION ON WEBSITE
Company has dedicated a section at its website that includes all material information, notices, queries &
complaint handling and all other information necessary to keep an investor update link to website is as follows:
https://www.dgcement.com
130
SUSTAINABILITY AND
CORPORATE SOCIAL
RESPONSIBILITY
STATEMENT FOR ADOPTION OF BEST PRACTICES FOR CSR. 132
STATEMENT ABOUT THE COMPANY’S STRATEGIC
OBJECTIVES ON ESG 132
CHAIRMAN’S OVERVIEW ON COMPANY’S SUSTAINABLE PRACTICES 132
HIGHLIGHTS OF THE COMPANY'S INITIATIVES TOWARDS
SUSTAINABILITY AND CSR 133
CERTIFICATIONS & ACCREDITATIONS 138
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DGKC
CHAIRMAN’S OVERVIEW ON
COMPANY’S SUSTAINABLE
PRACTICES
Adoption of sustainable practices provide opportunities to regulatory risks and potential legal liabilities associated
support our financial bottom line. Optimizing resources with environmental and social issues, safeguarding our
and minimizing waste through efficient manufacturing company from financial penalties and reputation damage.
processes can lead to cost savings. By implementing
energy-efficient technologies like CFPP, WHR, Solar and Our investors also incorporate above stated practices into
utilizing alternative fuels, we can reduce operational their decision-making and our company becomes more
expenses significantly, thereby enhancing profitability. attractive to socially responsible investors and
sustainable investment funds. This broader investor base
Sustainable practices improve our market reputation and can improve share price performance and increase the
brand’s value, fostering customer loyalty and attracting liquidity of our shares.
environmentally conscious consumers. This increased
market appeal can result in higher sales and market In conclusion, our cement company's sustainable
share, driving revenue growth. This also strengthen our practices hold the potential to drive cost savings, revenue
relationships with stakeholders, including investors, growth, improved access to capital, and enhanced brand
regulators, and communities. Improved stakeholder value. Embracing sustainability is not only the right thing
engagement can lead to increased access to capital and to do for our planet and communities but also a strategic
reduced risk premiums, thus positively impacting our cost imperative for ensuring our long-term financial success.
of capital. Specially these practices can mitigate Together, we can forge a sustainable path that benefits
both our stakeholders and our financial performance.
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DGKC community engagement initiatives including social investments and business inclusive projects, combining financial
and managerial resources to enrich lives and pave the way for sustainable living.
In our Sustainability Strategies and Sustainable Development Goals section of this report, we have provided a
comprehensive explanation of our SDG goals, their corresponding targets, and the strategies we have in place to
attain those objectives. In this particular section, we have explained how our CSR activities and initiatives are actively
translating our sustainability targets into concrete actions:
KHP
HUB
EDUCATION
At DG Khan Site, two schools are currently operational,
accommodating over 800 students. Additionally, the
company has taken the initiative to provide school
teachers to nearby institutions, addressing the need of
educators at remote areas of DG Khan Site. Notably, the
students who have received their education at DG Khan
Site have proved themselves responsible citizens of
Pakistan and are playing significant role in different
spheres of life.
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MEDICAL
Medical services to local community are being provided by
establishing free dispensary at sites where around 10,000
patients are managed yearly under the supervision of
qualified doctors, lady doctors and Nursing staff. Free
factory ambulance services, medicines and lab test
facilities are available for local patients 24/7 in case of
emergencies.
EMPLOYEES SAFETY
As part of our commitment to employee safety and
corporate social responsibility (CSR), we prioritize the
well-being of our workforce through a range of initiatives:
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All our work activities strictly adhere to company Standard
Operating Procedures (SOPs). We have a Permit-to-Work
(PTW) system in place, which is closely monitored and
supervised at the senior level. Prior to commencing
critical activities, thorough Risk Assessments are
conducted, and pre-job training is administered to ensure
the safety of our employees and those involved. At our
core, safety is paramount, and these initiatives collectively
contribute to a safe and secure working environment.
CHARITY
At the DG Khan site, we have undertaken several
initiatives to support the local community. Firstly, we
installed two water filtration plants in the D.G. Khan
District, serving the adjacent community. Additionally, our
company's water pipelines and water tankers provide a
daily supply of water to thousands of people in the area. To
address water issues in the Tribal Area, we've
implemented solar-operated water pumps. Furthermore,
we established three "Langar Khanna" food points, where
deserving locals received daily meals. DGKC also extends
food assistance to needy individuals in neighboring
regions. Moreover, we try to offer free transportation to
residents of the Tribal Area near the Quarry and Long Belt
Conveyor using company buses allocated for employee
transportation.
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ENVIRONMENTAL STEWARDSHIP
& ECOLOGICAL FOOTPRINT
This year, DGKC has taken significant steps to enhance
sustainability and reduce environmental impact. One
major initiative involves reducing the reliance on costly
imported coal in favor of local coal sources, supplemented
by city-collected waste and imported tires. This shift
towards alternative fuels not only addresses a variety of
waste streams, including industrial, agricultural, and
municipal sources, but also results in reduced production
costs, carbon foot prints and the preservation of valuable
foreign exchange reserves.
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To ensure rigorous environmental monitoring, we have
engaged an independent consultant, SGS-Pakistan.
Monthly third-party environmental monitoring is an
integral part of our operations. We submit quarterly
reports to the Baluchistan Government and maintain
strict compliance with ISO 14001 (Environmental
Management System). Our environmental management
system undergoes external audits on a quarterly basis.
CSR initiatives endorsed by the top management reflecting their understanding and commitment to CSR, thereby ensuring
that:
• CSR practice is incorporated into the vision, code of ethics and business plan/strategy of the company
• Guidelines, processes and systems exist to support the CSR initiatives by the Company and the philosophy is to be
incorporated into ethical values of the Company
• Defining objectives for carrying out CSR activities and setting targets for these objectives
• Determining the working model and devising action plan (time, resources, budget)
• Sensitization and training of the senior management and employees for implementation of CSR targets
• Mechanism for stakeholder engagement prior, during and on conclusion of CSR plans
Areas of interest and initiatives in this regard have been thoroughly explained in “Initiatives Towords Corporate Social
Responsibility Section” reflecting our compliance with the CSR guidelines, 2013 issued by SECP.
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138
DIRECTORS’
REPORT
The performance numbers of your Company for the year ended on June 30, 2023 are:
FY23 FY22
Rupees in '000'
Sales 64,983,821 58,043,863
Cost of sales (55,428,046) (47,615,551)
Gross profit 9,555,775 10,428,312
Administrative expenses (879,356) (751,052)
Selling and distribution expenses (1,818,028) (1,748,859)
Net impairment gain/(losses) on financial assets (104,094) (8,990)
Other operating expenses (96,461) (1,042,803)
Other income 3,246,999 2,714,340
Finance cost (6,742,292) (3,571,187)
Profit/(loss) before taxation 3,162,543 6,019,761
Taxation (6,798,519) (3,047,629)
Profit/(loss) for the year (3,635,976) 2,972,132
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from IMF till March to facilitate transition into new minimum tax credits may not be utilized against future tax
government. Subsequently, deposits from KSA and UAE profits.
also brought much needed stability on external front.
However, the year brought great challenges for middle Consolidated Results
class, the backbone of the country, that dented their
purchasing power, hit their expense flows and greatly Consolidated results for FY23 are as follows:
affected their buying pattern. This effect has been
witnessed across all industries, affecting profitability and Rs in Million FY23 FY22
business operations.
Net Sales 70,495 61,653
Cement industry dispatches and analysis Gross Profit 10,674 11,325
PBT 3,825 6,801
In volume terms, total sales quantity of industry PAT (3,366) 3,382
witnessed decline of 8.3 million tons (15.7%) year on year EPS (PKR/Share) (8.06) 7.21
basis to 44.5 million tons. North zone registered negative
growth of 6.5 million tons (16.1%) while South Zone of 1.8 Detail analysis of consolidated results are provided in
million tons (14.4%). Further analysis shows that negative “Segmental Review of Business Performance” Section
growth was driven by local dispatches that declined by
7.6 million tons (16.0%) while exports showed contraction Future Outlook
by 0.7 million tons. Sales utilization of industry declined to
60% against 76% for the corresponding period last year. It The government has entered into stand-bye agreement
was largely contributed by local sales of 54% and exports with IMF. Interim Government is in place and general
sales utilization of 6%. elections are due. Politico-economic situation of the
country is still vulnerable. If elections are delayed beyond
Business Performance Review a reasonable time, this may cast a doubt about the future
dealings with IMF program. Any unreasonable delay may
Kiln operational days of your Company decreased by 26% push the country further into political, economic and legal
from 1,030 days to 759 days. Clinker production % battle. All these factors may disturb overall business
reduced to 69% (FY22: 95%). Sales utilization of your environment in the country. PKR/USD parity will remain
Company declined to 71% (FY22: 93%). The trend was in under pressure and may be pushed further upward. This
inline with industry numbers, mainly due to may create a concern on cost side. Keeping inflation
demand-supply gap. Clinker was exported to contribute projected numbers in view, discount rates may remain
towards fixed costs earning valuable total foreign high throughout FY24. Coal is trending downward,
exchange of USD 36 million (including from export of providing much needed relief in cost for the cement
cement). industry. However, some of the benefit may be offset by
currency devaluation. Company will continue to use mix
Sales, in value terms, registered growth primarily due to of imported and local coals as part of its cost saving
stable local cement prices. Whole effect of inflation, high strategy. Considering inflation and expected GDP growth
energy and fuel prices could not be passed on to the numbers, local dispatches may not see significant growth
consumers. The Company partially shifted to Alternate from last year. Company will continue with the strategy to
Fuel, local and Afghan coal in substitution of imported export clinker to contribute towards fixed costs and to
coal, taking into account cost consideration and also earn valuable foreign currency reserves. Company is also
saving valuable foreign exchange reserves. ‘Other evaluating export opportunities in USA market, which if
expenses’ decrease was associated with decline in materialized may contribute significantly to profitability.
exchange loss as there has been no major import
payment exposed to exchange rate fluctuation this year. Appropriation
Rate of Dividend from our MCB investment increased as
compared to last year, resulting into increase in ‘Other The Board keeping in view loss for the year and debt
Income’. Scrap sales also increased on account of wire profile, recommended no dividend for FY23.
scrap from tyres being used as alternate fuel. Financial
expenses registered increase due to rise in discount rates Principal Risks
including ERF rates as compared to last year. Effective tax
rate increased to 214.97% against 50.63% in FY22. This is Principal activity of the Company is manufacture and sale
mainly due to deferred taxation impact of super tax rate of cement and clinker and following are the principal risks
increase from 4% to 10% and lapse of tax credits as the Company face:
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(Please refer to risks & opportunities section for detailed Human Resource &
analysis) Remuneration Committee:
Directors’ Remuneration Mr. Usama Mahmud Chairman
Mr. Raza Mansha Member
The Board of Directors has approved Directors’ Mr. Khalid Niaz Khawaja Member
Remuneration Policy. The main features of the policy are
as follows: Post Balance Sheet Events:
• The Company shall not pay remuneration of its There are no material post balance sheet events affecting
non-executive directors including independent the period end position.
directors except for meeting fee for attending Board
and its Committee meetings. Business Impact on Environment:
• The Company will reimburse or incur expenses of Our plants and operations are complying with
travelling and accommodation of Directors in relation international and national environmental standards.
to attending of Board and its Committees meetings. Company has also invested heavily in state-of-the-art
machineries for producing electricity from waste heat of
• The Directors’ Remuneration Policy will be reviewed plant and burning of industrial and municipal wastes.
and approved by the Board of Directors from time to
time Corporate Social Responsibility:
Chief Executive remuneration package includes salary DGKC is fully cognizant of its responsibility towards
(including allowances), bonus and medical society and welfare.
reimbursements.
Education
Executive director remuneration package includes salary
(including allowances), bonus, medical reimbursements, The company runs two schools namely Bloomfield Hall
housing, utilities reimbursement and retirement benefits School and Cement Model trust School at DG Khan.
(Provident Fund and Gratuity).
Medical & Fire Fighting
Please also refer to note 36 of unconsolidated financial
statements for remuneration of Chief Executive and • Free Dispensary facility is available at DG Khan,
executive director. Khairpur and Hub sites. Dispensary facility is in use
by people of localities free of any charge.
Directors:
• Free van transportation facility at site from and to
Following are the directors of the Company: Dispensary and nearby villages.
Mrs. Naz Mansha (Chairperson) Non- Executive
Mr. Raza Mansha Chief Executive • Company runs free ambulance services for local
/ Executive communities.
Mr. Khalid Niaz Khawaja Non-Executive
Mr. Usama Mahmud Independent • Company also runs a free fire -fighting service for
Mr. Shehryar Ahmed Buksh Independent nearby areas.
Mr. Farid Noor Ali Fazal Executive
Mr. Shahzad Ahmad Malik Non-Executive Water Supply and food distribution
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• Food distribution to flood affectees near plant sites. Principal activity of the Company
Awareness & HSE The principal activity of the Company is manufacture and
sale of cement and clinker. Information related to
• Company conducts various awareness sessions on subsidiaries are disclosed in annual report.
diseases and prevention there-from.
Related parties’ transactions:
• Company conducts sessions on security, health and
safety and conduct mock exercises of emergency Board has developed the related parties policy in
situations. accordance with law that has been summarized in the
annual report. All the related parties transactions are
• General disclosed in the notes to financial statements.
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(g) There has been no material departure from the best practices of the Corporate Governance as detailed in the Listing
regulations.
(h) Significant deviations from last year in operating results of the company are highlighted and reasoned in other parts of
Directors report/annual report. Other significant business matters are have been discussed in annual report.
(i) Key operating and financial data of last six years is annexed in this annual report;
(j) Where any statutory payment on account of taxes, duties, levies and charges is outstanding, the amount together with
a brief description and reasons for the same is disclosed in the financial statements;
(k) Significant plans and decisions, such as corporate restructuring, business expansion and discontinuance of
operations, has been outlined along with future prospects, risks and uncertainties surrounding the company;
(l) The number of board and committees’ meetings held during the year and attendance by each director is annexed in this
annual report;
(m) The details of training programs attended by directors is annexed in this annual report;
(p) All trades in the shares of the company, carried out by its directors, executives and their spouses and minor children
is annexed in this annual report.
(q) Value of investments on the basis of unaudited accounts of Provident Fund is Rs 2,315 million (FY22: Rs 1,948 million)
and of Gratuity Fund is Rs 585 million (FY22: Rs 539 million)
Lahore
August 31, 2023
144
UNCONSOLIDATED
FINANCIAL
STATEMENTS
2023 Annual Report
DGKC
Opinion
We have audited the annexed unconsolidated financial statements of D. G. Khan Cement Company Limited (the Company), which
comprise the unconsolidated statement of financial position as at June 30, 2023, and the unconsolidated statement of profit or
loss, the unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity, the
unconsolidated statement of cash flows for the year then ended, and notes to the unconsolidated financial statements, including
a summary of significant accounting policies and other explanatory information, and we state that we have obtained all the
information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the unconsolidated statement of
financial position, unconsolidated statement of profit or loss, unconsolidated statement of comprehensive income, the
unconsolidated statement of changes in equity and the unconsolidated statement of cash flows together with the notes forming
part thereof conform with the accounting and reporting standards as applicable in Pakistan and give the information required by
the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of the state of the
Company's affairs as at June 30, 2023 and of the profit and other comprehensive loss, the changes in equity and its cash flows for
the year then ended.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Unconsolidated
Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered
Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
unconsolidated financial statements of the current period. These matters were addressed in the context of our audit of the
unconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Sr.
Key audit matters How the matters were addressed in our audit
No.
1. Deferred taxation
(Refer note 11 to the annexed unconsolidated Our audit procedures included the following:
financial statements)
• Obtained an understanding of the Company's process of
The Company has recognized deferred tax in preparing the deferred tax working and tested internal
respect of unused tax credits and unused tax controls over management's valuation of deferred tax
losses. Deferred tax assets on such items have assets;
been recognized as it is probable that sufficient
taxable profits will be available in future, before • Obtained an understanding regarding the relevant tax
their expiry, for their utilization on the basis of the laws with respect to availability of tax credits and unused
Company's approved business plan. tax losses;
Due to the significant level of judgement and • Recalculated the amount of tax credits and unused tax
estimation required in preparing the business plan losses in accordance with the provisions of Income Tax
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Sr.
Key audit matters How the matters were addressed in our audit
No.
(Refer notes 19.1.3 and 19.1.4 to the annexed Our audit procedures included the following:
unconsolidated financial statements)
• Understood and evaluated the process by which the cash
The Company holds investments in equity flow forecasts were prepared and approved, including
instruments of Nishat Hotels and Properties confirming the mathematical accuracy of the underlying
Limited ('NHPL') and Hyundai Nishat Motor calculations;
(Private) Limited ('HNMPL'). Due to NHPL and
HNMPL being non-listed companies, their shares • Evaluated the cash flow forecasts by obtaining an
do not have a quoted price in an active market. understanding of respective businesses of NHPL and
Therefore, fair values of their shares have been HNMPL;
determined through valuation methodology based
on discounted cash flow method. This involves • Obtained an understanding of the work performed by the
several estimation techniques and management's management's expert on the models for the purpose of
judgements to obtain reasonable expected future valuations;
cash flows of respective businesses and related
discount rates. Management involved an expert to • Examined the professional qualification of management's
perform these valuations on its behalf. expert and assessed the independence, competence and
experience of the management's expert in the field;
Due to the significant level of judgment and
estimation required to determine the fair values of • Obtained corroborating evidence relating to the values as
the investments, we consider it to be a key audit determined by the management's expert by challenging
matter. key assumptions for the growth rates in the cash flow
forecasts by comparing them to historical results and
economic forecasts and challenging the discount rate by
independently estimating a range based on market data;
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Information Other than the Unconsolidated and Consolidated Financial Statements and Auditor’s Reports Thereon
Management is responsible for the other information. The other information comprises the information included in the
annual report, but does not include the unconsolidated and consolidated financial statements and our auditor’s reports
thereon.
Our opinion on the unconsolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the unconsolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the unconsolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Unconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the unconsolidated financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies Act,
2017 (XIX of 2017) and for such internal control as management determines is necessary to enable the preparation of
unconsolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the unconsolidated financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Board of directors are responsible for overseeing the Company’s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these unconsolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgement and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the unconsolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the unconsolidated financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including the
disclosures, and whether the unconsolidated financial statements represent the underlying transactions and events in
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a manner that achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance in
the audit of the unconsolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
(a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
(b) the unconsolidated statement of financial position, the unconsolidated statement of profit or loss, the
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity and the
unconsolidated statement of cash flows together with the notes thereon have been drawn up in conformity with the
Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
(c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the
Company’s business; and
(d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company
and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Khurram Akbar Khan.
Lahore
Date: September 12, 2023
UDIN: AR202310070tRZ6szrY5
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2023 2022
Note (Rupees in thousand)
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
The annexed notes 1 to 45 form an integral part of these unconsolidated financial statements.
Chief Executive
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2023 2022
Note (Rupees in thousand)
ASSETS
NON-CURRENT ASSETS
CURRENT ASSETS
134,713,254 136,562,013
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2023 2022
Note (Rupees in thousand)
(Loss)/earnings per share - basic and diluted (in Rupees) 35 (8.30) 6.78
The annexed notes 1 to 45 form an integral part of these unconsolidated financial statements.
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2023 2022
(Rupees in thousand)
Tax effect of change in fair value of investments at fair value through OCI (345,241) 42,583
(1,651,729) (6,093,784)
The annexed notes 1 to 45 form an integral part of these unconsolidated financial statements.
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2023 2022
Note (Rupees in thousand)
Payments for property, plant and equipment and intangible asset (3,418,069) (1,739,551)
Proceeds from disposal of property, plant and equipment 206,392 99,592
Long term loans, advances and deposits - net (2,900) (4,013)
Investment in equity instruments (1,007,500) -
Recovery of loan to related party - 765,000
Interest received 3,551 37,882
Dividends received 2,471,374 2,302,736
Cash and cash equivalents at the beginning of the year (24,799,703) (17,555,677)
Effect of exchange rate changes on cash and cash equivalents 106,869 91,763
Cash and cash equivalents at the end of the year 38 (24,819,321) (24,799,703)
The annexed notes 1 to 45 form an integral part of these unconsolidated financial statements.
154
Capital Reserves Revenue Reserves
Capital
Share Share FVOCI redemption General Un-Appropriated
Total
Capital premium reserve reserve reserve Profits
fund
Rupees in thousand
Balance as on July 01, 2021 4,381,191 4,557,163 20,297,619 353,510 5,071,827 38,816,563 73,477,873
Total comprehensive loss for the year
- Profit for the year - - - - - 2,972,132 2,972,132
- Other comprehensive loss for the year
- Changes in fair value of investments at fair value
through OCI - net of tax - - (6,041,495) - - - (6,041,495)
- Remeasurements of retirement benefits - net of tax - - - - - (52,289) (52,289)
- - (6,041,495) - - 2,919,843 (3,121,652)
Transactions with owners in their capacity as owners
recognised directly in equity
for the Year Ended June 30, 2023
Balance as on June 30, 2023 4,381,191 4,557,163 12,609,667 353,510 5,071,827 37,218,919 64,192,277
The annexed notes 1 to 45 form an integral part of these unconsolidated financial statements.
Annual Report
DGKC
155
UNCONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2023
D. G. Khan Cement Company Limited (the 'Company') is a public company limited by shares incorporated in Pakistan in
1978 under the repealed Companies Act, 1913 (now the Companies Act, 2017). The Company's ordinary shares are listed
on the Pakistan Stock Exchange Limited. The registered office of the Company is situated at 53-A, Lawrence Road, Lahore.
The Company is principally engaged in production and sale of Clinker, Ordinary Portland and Sulphate Resistant Cement.
It has four cement plants, two plants; located at Dera Ghazi Khan ('D.G. Khan'), one at Khairpur District, Chakwal
('Khairpur') and one at Hub District, Lasbela ('Hub').
These financial statements (hereinafter may be referred to as 'unconsolidated financial statements') are the separate
financial statements of the Company in which the investment in subsidiary has been carried at cost less accumulated
impairment losses, if any. Consolidated financial statements are prepared separately.
The Company has regional offices located across Pakistan, the geographical locations of which are listed below:
2. Basis of preparation
These unconsolidated financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
i) International Financial Reporting Standards ('IFRS') issued by the International Accounting Standards Board
(IASB) as notified under the Companies Act, 2017; and
ii) Provisions of and directives issued under the Companies Act, 2017 ('Act').
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
The following amendments to existing standards have been published that are applicable to the Company’s
unconsolidated financial statements covering annual periods, beginning on or after the following dates:
2.2.1 Standards, amendments to published standards and interpretations that are effective in the current
year
Certain standards, amendments and interpretations to IFRS are effective for accounting periods beginning
on July 1, 2022 but are considered not to be relevant or to have any significant effect on the Company’s
operations (although they may affect the accounting for future transactions and events) and are, therefore,
not detailed in these unconsolidated financial statements.
2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Company
There are certain standards, amendments to the approved accounting standards and interpretations that
are mandatory for the Company's accounting periods beginning on or after July 1, 2023 but are considered
not to be relevant or to have any significant effect on the Company's operations and are, therefore, not
detailed in these unconsolidated financial statements, except for the following:
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a) Narrow scope amendments to International Accounting Standard (IAS) 1 Practice Statement 2
and International Accounting Standard (IAS) 8 (effective for annual period beginning on July 1,
2023)
The IASB has issued narrow-scope amendments to IFRS Standards. The amendments will help
companies:
- improve accounting policy disclosures so that they provide more useful information to investors and
other primary users of the financial statements; and
The amendments to IAS 1 require companies to disclose their material accounting policy information
rather than their significant accounting policies.
The amendments introduce a new definition for accounting estimates clarifying that they are
monetary amounts in the financial statements that are subject to measurement uncertainty. The
amendments also clarify the relationship between accounting policies and accounting estimates by
specifying that a company develops an accounting estimate to achieve the objective set out by an
accounting policy. The amendments will apply prospectively to changes in accounting estimates and
changes in accounting policies occurring on or after the beginning of the first annual reporting period
in which the company applies the amendments.
The amendments narrow the scope of the initial recognition exemption (IRE) so that it does not apply
to transactions that give rise to equal and offsetting temporary differences. As a result, companies will
need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising on
initial recognition of a lease and a decommissioning provision. For leases and decommissioning
liabilities, the associated deferred tax asset and liabilities will need to be recognised from the
beginning of the earliest comparative period presented, with any cumulative effect recognised as an
adjustment to retained earnings or other components of equity at that date.
These amendments clarify how conditions with which an entity must comply within twelve months
after the reporting period affect the classification of a liability. The amendments also aim to improve
information an entity provides related to liabilities subject to these conditions.
The Company is yet to assess the impact of these amendments on its financial statements.
3. Basis of measurement
3.1 These unconsolidated financial statements have been prepared on a historical cost basis except for the following:
- certain financial instruments, government grant and plan assets of defined benefit gratuity at fair value, and
The preparation of unconsolidated financial statements requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the
Company’s accounting policies. Following are the areas that involved a higher degree of judgement or complexity,
and of items which are more likely to be materially adjusted due to the estimates and assumptions turning out to be
wrong.
a) Provision for taxation and recognition of deferred tax asset for tax credits and for carried-forward tax losses -
notes 4.2, 11 and 35
b) Employee benefits obligations - notes 4.3 and 10
c) Useful lives and residual values of property, plant and equipment - notes 4.6 and 17.1
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d) Fair value of unquoted fair value through other comprehensive income ('FVOCI') investments - notes 4.10 and 19
e) Impairment of financial assets (other than investments in equity instruments) - note 4.13.4
f) Estimate of present value of provisions - notes 4.5 and 12
Estimates and judgements are continually evaluated. They are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Company and that are
believed to be reasonable under the circumstances.
The significant accounting policies adopted in the preparation of these unconsolidated financial statements are set out
below. These policies have been consistently applied to all the years presented.
4.1 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it
is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it
relates.
Borrowings are removed from the statement of financial position when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
4.2 Taxation
Income tax comprises current and deferred tax. Income tax is recognised in the statement of profit or loss except
to the extent that relates to items recognised directly in equity or other comprehensive income, in which case it is
recognised directly in equity or other comprehensive income.
Current
The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to profit for the year
if enacted or substantively enacted at the end of the reporting period in accordance with the prevailing law for
taxation of income, after taking into account tax credits, rebates and exemptions, if any. Management periodically
evaluates position taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that the tax authorities will accept an uncertain tax treatment.
The charge for current tax also includes adjustments, where considered necessary, to provision for tax made in
previous years arising from assessments framed during the year for such years. The Company measures its tax
balances either based on the most likely amount or the expected value, depending on which method provides a
better prediction of the resolution of the uncertainty. Current tax assets and tax liabilities are offset where the
Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
Deferred
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of
the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
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recognised to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences, unused tax losses and tax credits can be utilised. Deferred tax assets and liabilities are offset
where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax
balances relate to the same taxation authority.
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leaves that are
expected to be settled wholly within twelve months after the end of the period in which the employees
render the related service are recognised in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the statement of financial position.
The Company operates an approved funded defined benefit gratuity plan for all regular employees
having a service period of more than five years for officers and six months for workers. Provisions are
made in the unconsolidated financial statements to cover obligations on the basis of actuarial
valuations carried out annually. The most recent valuation was carried out as at June 30, 2023 using
the "Projected Unit Credit Method".
The actual return on plan assets represents the difference between the fair value of plan assets at the
beginning of the year and as at the end of the year after adjustments for contributions made by the
Company as reduced by benefits paid during the year.
The amount recognized in statement of financial position represents the present value of the defined
benefit obligation as reduced by the fair value of the plan assets.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to equity in other comprehensive income in the year in which they arise. Past
service costs are recognized immediately in the statement of profit or loss.
The future contribution rate of the plan includes allowances for deficit and surplus. Projected Unit
Credit Method, using the following significant assumptions, has been used for valuation of this
scheme:
2023 2022
The expected mortality rates assumed are based on the SLIC (2001-2005) mortality table set back
one year.
The Company operates a recognised provident fund for all its regular employees. Equal monthly
contributions are made to the fund both by the Company and the employees at the rate of 10% of the
basic salary for officers and 10% of basic salary plus cost of living allowance for workers. The
Company has no further payment obligations once the contributions have been paid. Obligation for
contributions to defined contribution plan is recognised as an expense in the statement of profit or
loss as and when incurred.
The Company provides for accumulating compensated absences, when the employees render services
that increase their entitlement to future compensated absences. Under the service rules, employees are
entitled to 2.5 days leave per month. Unutilised leaves can be accumulated up to 30 days in case of
officers. However, leave policy for officers whose leave balance was already accumulated to 90 days or
above as of July 01, 2019 may keep leaves accumulated up to 90 days. An officer is entitled to encash the
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unutilised earned leave accrued during the year. In addition, he can also encash some portion of his
accumulated leave balance during the year. Any further unutilised leaves lapse. The earned leave
encashment is based on basic salaries. In case of workers, unutilised leaves may be accumulated up to
120 days, however, accumulated leave balance above 50 days is encashable upon demand of the worker.
Unutilised leaves can be used at any time by all employees, subject to the approval of the Company's
management.
Provisions are made annually to cover the obligation for accumulating compensated absences based on
actuarial valuation and are charged to statement of profit or loss . The most recent valuation was carried
out as at June 30, 2023 using the "Projected Unit Credit Method.
The amount recognised in the statement of financial position represents the present value of the defined
benefit obligations. Actuarial gains and losses are charged to the statement of profit or loss immediately in
the period when these occur.
Projected unit credit method, using the following significant assumptions, has been used for valuation of
accumulating compensated absences:
2023 2022
These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial
year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
4.5 Provisions
Provisions for legal claims and make good obligations are recognised when the Company has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.
Operating fixed assets except freehold land are stated at cost less accumulated depreciation and any
identified impairment loss. Freehold land is stated at cost less any identified impairment loss. Cost in relation
to certain operating fixed assets signifies historical cost and borrowing costs as referred to in note 4.20.
Depreciation on all operating fixed assets is charged to the statement of profit or loss on the reducing
balance method, except for plant and machinery and leasehold land which is being depreciated using the
straight line method, so as to write off the depreciable amount of an asset over its estimated useful life at
following annual rates.
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Depreciation method Annual depreciation rate
The assets' residual values and useful lives are reviewed at each financial year end, and adjusted if impact on
depreciation is significant. The Company's estimate of the residual value and useful life of its operating fixed assets
during the year has not required any adjustment as its impact is considered insignificant.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount as fully explained in note 4.8 to these financial statements.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repair and maintenance costs are charged to statement of profit
or loss during the year in which they are incurred.
Proceeds from the sale of items while bringing that asset to the location and condition necessary for it to be capable
of operating in the manner intended by management are not deducted from the cost of an item of property, plant
and equipment. Instead, the Company recognizes the proceeds from selling such items, and the cost of producing
those items, in profit or loss.
The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and
the carrying amount of the asset is recognized as an income or expense.
Major spare parts and stand-by equipment qualify as property, plant and equipment when an entity
expects to use them for more than one year. Transfers are made to operating fixed assets category as and
when such items are available for use.
Capital work-in-progress is stated at cost less any identified impairment loss. All expenditure including
borrowing costs connected with specific assets incurred during installation and construction period are
carried under capital work-in-progress. These are transferred to operating fixed assets as and when these
are available for use.
Expenditure incurred to acquire computer software is capitalised as intangible asset and stated at cost less
accumulated amortisation and any identified impairment loss. Computer software is amortised using the straight
line method over a period of three years.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount (as explained in note 4.8 to these financial statements).
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from
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other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
4.9 Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Company.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease, or if that rate cannot be readily
determined, the Company's incremental borrowing rate is used, being the rate that the individual lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
- variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
- the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option, less any
lease incentives receivable.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is
remeasured when there is a change in future lease payments arising from a change in fixed lease payments or an
index or rate, change in the Company's estimate of the amount expected to be payable under a residual value
guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option. The corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in the statement of profit or loss if the carrying amount of right-of-use asset has been reduced to zero.
The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located,
less any lease incentive received. The right-of-use asset is depreciated on a straight line method over the lease term
as this method most closely reflects the expected pattern of consumption of future economic benefits. The
right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
When there is a change in scope of a lease, or the consideration for a lease, that was not part of the original terms
and conditions of the lease, it is accounted for as a lease modification. The lease modification is accounted for as a
separate lease if modification increases the scope of lease by adding the right to use one or more underlying assets
and the consideration for lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope adjusted to reflect the circumstances of the particular contracts, if any. When the lease
modification is not accounted for as a separate lease, the lease liability is remeasured and corresponding
adjustment is made to right-of-use asset.
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less without a
purchase option.
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4.10 Investments
Investments intended to be held for less than twelve months from the reporting date or to be sold to raise operating
capital, are included in current assets. All other investments are classified as non-current. Management determines
the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a
regular basis.
Investment in equity instruments of subsidiaries are measured at cost as per the requirements of IAS-27
"Separate Financial Statements". However, at subsequent reporting dates, the Company reviews the
carrying amount of the investment and its recoverability to determine whether there is an indication that
such investment has suffered an impairment loss. If any such indication exists, the carrying amount of the
investment is adjusted to the extent of impairment loss. Impairment losses are recognised as an expense
in the statement of profit or loss.
The Company assesses at the end of each reporting period whether there is any indication that a
previously recognised impairment loss may no longer exist or may have decreased. It assesses whether
there have been favourable events or changes in circumstances, since impairment loss was recognised. If
any such indication exists, the Company estimates the recoverable amount of that investment and
reverses the impairment loss. The amount of any reversal recognised is restricted to increasing the carrying
value of investment to the carrying value that would have been recognised if the original impairment had
not occurred.
The Company is required to issue consolidated financial statements along with its separate financial
statements in accordance with the requirements of IFRS 10, 'Consolidated financial statements' and IAS
27, 'Separate financial statements'.
Stores, spare parts and loose tools are valued at moving weighted average cost except for items in transit which are
stated at invoice value plus other charges paid thereon till the reporting date. For items which are slow moving
and/or identified as obsolete, adequate provision is made for any excess book value over estimated realizable value.
The Company reviews the carrying amount of stores and spares on a regular basis and provision is made for
obsolescence.
4.12 Stock-in-trade
Stock of raw materials (except for those in transit), work-in-process and finished goods are valued principally at the
lower of weighted average cost and net realisable value ('NRV'). Stock of packing material is valued principally at
moving average cost. Cost of work-in-process and finished goods comprises cost of direct materials, labour and
related production overheads (based on normal operating capacity).
Materials in transit are stated at cost comprising invoice value plus other charges paid thereon.
Net realisable value is determined on the basis of estimated selling price of the product in the ordinary course of
business less estimated costs of completion and the estimated costs necessary to make the sale.
If the expected net realisable value is lower than the carrying amount, a write-down is recognised for the amount by
which the carrying amount exceeds its net realisable value. Provision is made in the unconsolidated financial
statements for obsolete and slow moving stock-in-trade based on management estimate.
4.13.1 Classification
The Company classifies its financial assets other than investments in subsidiaries in the following
measurement categories:
- those to be measured subsequently at fair value [either through other comprehensive income ('OCI') or
through profit or loss]; and
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The classification depends on the Company’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Company
has made an irrevocable election at the time of initial recognition to account for the equity investment at
fair value through other comprehensive income (FVOCI).
The Company reclassifies debt investments when and only when its business model for managing those
assets changes.
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which
the Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership.
4.13.3 Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in
profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payments of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Company classifies its debt instruments:
i) Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are measured at amortised cost. Interest income
from these financial assets is included in other income using the effective interest rate method. Any
gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are
presented as a separate line item in the statement of profit or loss.
ii) FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at
FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest income and foreign exchange gains and losses, which are
recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these
financial assets is included in other income using the effective interest rate method. Impairment
expenses are presented as a separate line item in the statement of profit or loss.
iii) FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain
or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss in
the period in which it arises.
Equity instruments
The Company subsequently measures all equity investments except for investments in subsidiaries, at fair
value through other comprehensive income. Where the Company’s management has elected to present
fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the investment. Dividends from such
investments continue to be recognised in profit or loss as other income when the Company’s right to
receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in the statement of profit or loss.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
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reported separately from other changes in fair value.
The Company assesses on a forward-looking basis the expected credit losses (ECL) associated with its
financial assets. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. For trade debts, the company applies IFRS 9 simplified approach to measure the
expected credit losses (loss allowance) which uses a life time expected loss allowance to be recognised
from initial recognition of the receivables, while general 3-stage approach for deposits, loans, bank
balances and other receivables i.e. to measure ECL through loss allowance at an amount equal to
12-month ECL if credit risk on a financial instrument or a group of financial instruments has not increased
significantly since initial recognition.
Following are the financial assets that are subject to the ECL model:
- Trade debts;
- Long term deposits;
- Deposits and other receivables; and
- Bank balances
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e.
the magnitude of the loss if there is a default) and the exposure at default. The assessment of the
probability of default and loss given default is based on historical data adjusted by forward-looking
information (adjusted for factors that are specific to the counterparty, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions at the reporting date,
including time value of money where appropriate). As for the exposure at default for financial assets, this is
represented by the assets’ gross carrying amount at the reporting date.
- reasonable and supportable information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The Company recognizes an impairment gain or loss in the statement of profit or loss for financial assets
with a corresponding adjustment to their carrying amount through a loss allowance account.
The Company writes off financial assets, in whole or in part, when it has exhausted all practical recovery
efforts and has concluded that there is no reasonable expectation of recovery. The assessment of no
reasonable expectation of recovery is based on unavailability of debtor’s sources of income or assets to
generate sufficient future cash flows to repay the amount. The Company may write-off financial assets that
are still subject to enforcement activity. Subsequent recoveries of amounts previously written off will result
in impairment gains.
All financial liabilities are recognized at the time when the Company becomes a party to the contractual provisions
of the instrument. Financial liabilities at amortised cost are initially measured at fair value less transaction costs.
Financial liabilities at fair value through profit or loss are initially recognised at fair value and transaction costs are
expensed in profit or loss.
Financial liabilities, other than those at fair value through profit or loss, are subsequently measured at amortised cost
using the effective interest rate method. Gain and losses are recognized in the profit or loss, when the liabilities are
derecognized as well as through effective interest rate amortization process.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in respective carrying
amounts is recognized in the statement of profit or loss.
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Financial assets and liabilities are offset and the net amount is reported in the unconsolidated financial statements
only when there is a legally enforceable right to set off the recognised amount and the Company intends either to
settle on a net basis or to realise the assets and to settle the liabilities simultaneously.
Trade debts are amounts due from customer for goods sold or services performed in ordinary course of business.
Other receivables generally arise from transactions outside the usual operating activities of the Company. Trade
debts and other receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing component in which case such are recognised at fair value. The Company holds the
trade debts with the objective of collecting the contractual cash flows and therefore measures the trade debts
subsequently at amortised cost using the effective interest rate method less loss allowance.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in
the statement of financial position.
A contract asset is recognised for the Company’s right to consideration in exchange for goods or services that it has
transferred to a customer. If the Company performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, the Company presents the amount as a contract asset,
excluding any amounts presented as a receivable.
A contract liability is recognised for the Company’s obligation to transfer goods or services to a customer for which
the Company has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration, or the Company has a right to an amount of consideration that is unconditional (i.e. a
receivable), before the Company transfers a good or service to the customer, the entity shall present the contract as
a contract liability when the payment is made or the payment is due (whichever is earlier).
Items included in the unconsolidated financial statements of the Company are measured using the currency
of the primary economic environment in which the Company operates (the functional currency). The financial
statements are presented in Pak Rupees, which is the Company’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions,
and from the translation of monetary assets and liabilities denominated in foreign currencies at year end
exchange rates, are generally recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or
loss on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. For example, translation differences on
non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in
profit or loss as part of the fair value gain or loss, and translation differences on non-monetary assets such as
equities classified as at fair value through other comprehensive income are recognised in other
comprehensive income.
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4.20 Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale. Qualifying assets are assets that necessarily take a substantial time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in statement of profit or loss in the period in which they are incurred.
Revenue is recognised when or as performance obligations are satisfied by transferring control of a promised good
or service to a customer, and control either transfers over time or at a point in time. Revenue is measured at fair
value of the consideration received or receivable, excluding discounts, commissions and government levies.
In case of local sales, revenue is recognised at the time of despatch of goods from the factory.
In case of export sales, the delivery of goods and transportation are two distinct performance obligations and the
total transaction price is allocated to each performance obligation. Revenue relating to each performance obligation
is recognized on satisfaction of each distinct performance obligation.
Finance income comprises interest income on funds invested (financial assets), dividend income, gain on disposal
of financial assets and changes in fair value of investments. Interest income is recognized as it accrues in profit or
loss, using effective interest method. Dividend income is recognized in profit or loss on the date that the Company’s
right to receive payment is established.
Ordinary shares are classified as equity and recognized at their face value. Incremental costs directly attributable to
the issue of new shares are shown in equity as a deduction, net of tax, if any.
4.24 Dividend
Dividend distribution to the Company's members is recognised as a liability in the period in which dividends are
approved.
- there is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company;
or
- there is present obligation that arises from past events but it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be
measured with sufficient reliability.
Contingent liabilities are not recognized. A contingent liability is disclosed unless the possibility of an outflow is
remote.
Contingent asset is disclosed when an inflow of economic benefits is probable. Contingent assets are not
recognised in the financial statements since this may result in recognition of income that may never be realised.
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- A weighted average of all the possible outcomes (the ‘expected value’ method). This is likely to be the most
appropriate method for a large population of similar claims, but can also be applied to a single obligation with
various possible outcomes.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Company will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand Rupees
unless otherwise stated.
5.1 137,574,201 (2022: 137,574,201), 428,500 (2022: 228,500) and 6,122,518 (2022: 4,242,155) ordinary shares of the
Company are held by the following related parties; Nishat Mills Limited, Security General Insurance Company
Limited and Adamjee Life Assurance Company Limited respectively.
Nishat Mills Limited is an Investor and the Company is an associate of Nishat Mills Limited as per IAS 28,
'Investments in Associates and Joint Ventures'.
5.2 20,000,000 ordinary shares of Rs 10 each were issued to the shareholders of D.G. Khan Electric Company Limited
upon its merger with D.G. Khan Cement Company Limited on July 01, 1999. These shares were issued as
consideration of merger against all assets, properties, rights, privileges, powers, bank accounts, trade marks,
patents, leaves and licenses of D.G. Khan Electric Company Limited.
2023 2022
(Rupees in thousand)
6. Other reserves
Capital reserves
Revenue reserve
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6.1 This reserve can be utilised by the Company only for the purposes specified in section 81 of the Companies Act,
2017.
6.2 This represents the unrealised gain on remeasurement of equity investments at FVOCI and is not available for
distribution.
6.3 The Capital redemption reserve fund represents fund created for redemption of preference shares and in
accordance with the terms of issue of preference shares, to ensure timely payments, the Company was required to
maintain a redemption fund with respect to preference shares. The Company had created a redemption fund and
appropriated Rs 7.4 million each month from the statement of profit or loss in order to ensure that fund balance at
redemption date was equal to the principal amount of the preference shares. The preference shares were redeemed
during the year ended June 30, 2007.
2023 2022
(Rupees in thousand)
Number of
Lender 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
Loan 1
Allied Bank Limited - 142,585 Nil Quarterly
Loan 2
Faysal Bank Limited - 143,746 Nil Quarterly
Loan 3
National Bank of Pakistan 3,156,276 4,006,676 15 equal quarterly Quarterly
instalments ending
in March 2027
Loan 4
Faysal Bank Limited - note 7.1.1 585,778 600,000 14 equal semi-annual Half yearly
instalments of each
tranche - note 7.1.1
3,742,054 4,893,007
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Such facilities are available at mark-up rates ranging from base rate plus 0.5% to 0.75% (2022: 0.15% to 0.75%)
per annum. The base rate applicable during the year on such facilities is SBP rate ranging from zero to one percent
resulting in coupon rate ranging from 0.50% to 1.7% (2022: 0.50% to 1.7%) per annum.
Loan 1
This represents long term financing facility availed under the State Bank of Pakistan's (SBP) Refinance Scheme for
Payment of Wages and Salaries to the Workers and Employees of Business Concerns ('Refinance Scheme'). The
loan was secured by a first pari passu charge of Rs 767 million over fixed assets of the Company.
Loan 2
This represents long term financing facility availed under the SBP Refinance Scheme. The loan was secured by first
pari passu charge of Rs 767 million over present and future fixed assets of the Company (including land &
machinery).
Loan 3
This represents long term financing facility availed under the SBP Temporary Economic Refinance Scheme. The
loan is secured by first pari passu charge over present and future fixed assets of the Company for Rs 6,993.33
million with 25% margin.
Loan 4
This represents long term financing facility availed under the SBP Temporary Economic Refinance Scheme. The
loan is secured by first pari passu charge of Rs 800 million over present and future fixed assets of the Company
(including land & machinery).
Number of
Tranche 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
585,778 600,000
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2023 2022
(Rupees in thousand)
Discount on liability:
Balance as at beginning of the year (664,567) (927,027)
Unwinding of discount on liability 214,234 262,460
(450,333) (664,567)
Balance as at end of the year 3,291,719 4,228,437
Current portion shown under current liabilities - note 15 (933,980) (1,169,983)
2,357,739 3,058,454
Number of
Lender 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
Loan 1
The Bank of Punjab - note 7.2.3 200,000 250,000 4 equal semi-annual Half yearly
instalments ending
in December 2024
Loan 2
The Bank of Punjab 1,200,000 1,500,000 8 equal semi-annual Half yearly
instalments ending
in May 2027
Loan 3
The Bank of Punjab - note 7.2.3 900,000 1,000,000 9 equal semi-annual Half yearly
- Islamic instalments ending
in June 2027
Loan 4
Habib Bank Limited 750,000 1,250,000 3 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 5
Habib Bank Limited 749,941 1,249,902 3 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 6
Bank Alfalah Limited - note 7.2.3 1,000,000 1,250,000 4 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 7
Bank Alfalah Limited 250,000 750,000 2 equal quarterly Quarterly
instalments ending
in November 2023
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Number of
Lender 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
Loan 8
Bank Alfalah Limited 1,031,250 1,312,500 11 equal quarterly Quarterly
instalments ending
in December 2025
Loan 9
National Bank of Pakistan 897,000 1,495,000 6 equal quarterly Quarterly
instalments ending
in October 2024
Loan 10
National Bank of - note 7.2.3 600,000 700,000 6 equal semi annual Half yearly
Pakistan - Islamic payments ending
in December 2025
Loan 11
Allied Bank Limited 540,000 720,000 12 equal quarterly Quarterly
instalments ending
in May 2026
Loan 12
Allied Bank Limited 2,288,222 3,595,778 7 equal quarterly Quarterly
instalments ending
in March 2025
Loan 13
Allied Bank Limited 1,166,667 1,833,333 7 equal quarterly Quarterly
instalments ending
in January 2025
Loan 14
The Bank of Punjab 586,693 130,445 20 equal quarterly Quarterly
instalments starting
in June 2024
Loan 15
Allied Bank Limited 900,000 - 20 equal quarterly Quarterly
instalments starting
in March 2024
Loan 16
Meezan Bank Limited 682,491 - 20 equal quarterly Quarterly
instalments starting
in June 2024
13,742,264 17,036,958
Such facilities are available at mark-up rates ranging from three to six months Karachi Inter-Bank Offered Rate
('KIBOR') plus 0.15% to 0.35% (2022: three to six months KIBOR plus 0.15% to 0.75%) per annum. Markup rate
charged during the year on outstanding balance ranged from 14.69% to 23.22% (2022: 7.54% to 15.88%) per annum.
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7.2.1 Security
Loan 1
First pari passu charge over present and future fixed assets of the Company for Rs 667 million with 25%
margin.
Loan 2
First pari passu charge over present and future fixed assets of the Company for Rs 2,000 million.
Loan 3
First pari passu charge over present and future fixed assets of the Company for Rs 1,333 million.
Loan 4
First pari passu charge over present and future fixed assets of the Company for Rs 3,333 million with 25%
margin.
Loan 5
First pari passu charge over present and future fixed assets of the Company for Rs 3,333 million with 25%
margin.
Loan 6
First pari passu charge over present and future fixed assets of the Company for Rs 3,333 million with 25%
margin.
Loan 7
First pari passu charge over present and future fixed assets of the Company for Rs 2,667 million.
Loan 8
Ranking charge over present and future fixed assets of the Company for Rs 2,000 million to be upgraded to
first pari passu charge.
Loan 9
First pari passu charge over present and future fixed assets of the Company for Rs 4,000 million with 25%
margin.
Loan 10
First pari passu charge over present and future fixed assets of the Company for Rs 1,333 million.
Loan 11
First pari passu charge over present and future fixed assets of the Company for Rs 1,200 million with 25%
margin.
Loan 12
First pari passu charge over present and future fixed assets of the Company for Rs 7,867 million with 25%
margin.
Loan 13
First pari passu charge over present and future fixed assets of the Company for Rs 1,333 million.
Loan 14
Joint pari passu charge of Rs 1,056 million over present and future fixed assets of the Company.
Loan 15
First pari passu charge over present and future fixed assets of the Company with 25% margin.
Loan 16
Joint pari passu charge over all present and future plant and machinery of the Company with 20% margin.
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2023 2022
(Rupees in thousand)
7.2.3 This includes one instalment of Rs 593.750 million due on June 30, 2023. The repayments were made
subsequent to the year end due to closure of financial institutions on the last three days of June on account
of Eid Holidays.
This represents deferred grant recognized in respect of the benefit of below-market interest rate on the facilities as referred
to in note 7.1 to these unconsolidated financial statements. The benefit has been measured as the difference between the
fair value of the loan and the proceeds received. The Company used the prevailing market rate of mark-up at the date of
disbursement for similar instruments to calculate fair values of respective loans. The discount rates used range from 7.34%
to 7.76% per annum. The reconciliation of the carrying amount is as follows:
2023 2022
(Rupees in thousand)
2023 2022
(Rupees in thousand)
These include interest free security deposits from stockists and suppliers and are repayable on cancellation/withdrawal of
the dealership or on cessation of business with the Company. As per the agreements signed with these parties, the
Company has the right to utilise the amounts for the furtherance of their business, hence, the amounts are not required to
be kept in a separate account maintained in a scheduled bank. Therefore, the Company is in compliance with section 217
of the Companies Act, 2017. These deposits have not been carried at amortised cost since the effect of discounting is
immaterial in the context of these financial statements.
2023 2022
(Rupees in thousand)
This represents:
Staff gratuity - note 10.1 657,255 530,909
Accumulating compensated absences - note 10.2 192,260 181,731
849,515 712,640
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2023 2022
(Rupees in thousand)
10.1 Staff gratuity
Present value of defined benefit obligation as at beginning of the year 1,070,156 882,460
Current service cost 102,308 87,770
Interest cost 134,553 85,820
Payments against opening payables (5,638) -
Benefits paid during the year (76,560) (36,694)
Remeasurements:
- Actuarial losses from changes in financial assumptions 5,051 5,035
- Experience adjustments 13,359 45,765
18,410 50,800
Present value of defined benefit obligation as at end of the year 1,243,229 1,070,156
2023 2022
(Rs in '000') Percentage (Rs in '000') Percentage
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2023 2022
(Rupees in thousand)
10.1.7 The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Discount rate 3.00% 3.25% Decrease by 8.11% 7.88% Increase by 5.63% 6.63%
Salary growth rate 3.00% 3.25% Increase by 5.70% 6.72% Decrease by 8.29% 8.07%
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the
same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied as when calculating the defined benefit liability
recognised in the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
to the prior period.
- Final salary risk (linked to inflation risk) – the risk that the final salary at the time of cessation of service
is greater than what is currently assumed. Since, the benefit is calculated on the final salary (which will
closely reflect inflation and other macroeconomic factors), the benefit amount increases as salary increases.
- Demographic risks
Mortality risk - The risk that the actual mortality experience is different than the assumed mortality. This
effect is more pronounced in schemes where the age and service distribution is on the higher side.
Withdrawal risk - The risk of actual withdrawals experience is different from assumed withdrawal probability.
The significance of the withdrawal risk varies with the age, service and the entitled benefits of the
beneficiary.
- Investment risk – the risk of the investment underperforming and being not sufficient to meet the liabilities.
10.1.9 Expected contribution to the defined benefit plan for the year ending June 30, 2024 is Rs 140.800 million.
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10.1.10 The weighted average duration of the defined benefit obligation is 7 years (2022 – 7 years). The expected
benefit payment for the next 10 years and beyond is as follows:
2023 2022
(Rupees in thousand)
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10.2.4 The sensitivity of the accumulating compensated balances to changes in the weighted principal
assumptions is:
Discount rate 3.00% 3.25% Decrease by 7.14% 7.46% Increase by 8.17% 8.58%
Salary growth rate 3.00% 3.25% Increase by 8.08% 8.49% Decrease by 7.17% 7.49%
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the accumulating leave absences to significant actuarial assumptions the
same method (present value of the accumulating compensated absences calculated with the projected unit
credit method at the end of the reporting period) has been applied for valuation of balance of accumulating
compensated absences in the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
to the prior period.
- Final Salary Risk (linked to inflation risk) - the risk that the final salary at the time of cessation of service
is greater than what we assumed. Since, the benefit is calculated on the final salary (which will closely reflect
inflation and other macroeconomic factors), the benefit amount increases as salary increases.
- Demographic risks
Mortality Risk - The risk that the actual mortality experience is different than the assumed mortality. This
effect is more pronounced in schemes where the age and service distribution is on the higher side.
Withdrawal risk - The risk of actual withdrawals experience is different from assumed withdrawal probability.
The significance of the withdrawal risk varies with the age, service and the entitled benefits of the
beneficiary.
2023 2022
(Rupees in thousand)
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2023 2022
(Rupees in thousand)
The gross movement in net deferred tax liability during the year is as follows:
Opening balance 4,942,150 3,378,941
Charged/(credited) to other comprehensive income 308,410 (66,136)
Charged to statement of profit or loss - note 34 5,363,043 1,629,344
Closing balance 10,613,603 4,942,150
Deferred tax asset on tax losses and tax credits available for carry forward have been recognized to the extent that the
realisation of related tax benefits is probable from reversal of existing taxable temporary differences and future taxable
profits. Based on the Company's approved business plan, it is probable that sufficient taxable profits will be available for
utilization of deferred tax asset. However, the Company has not recognised deferred tax asset in respect of minimum tax
available for carry forward under section 113 of the Income Tax Ordinance, 2001 amounting to Rs 1,371.103 million as
sufficient taxable profits would not be available to utilise these in the foreseeable future. These tax credits would expire as
follows:
2023 2022
(Rupees in thousand)
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12.2 This represents contract liabilities of the Company towards various parties. Revenue recognised in the current year
that was included in the contract liability balance at the beginning of the year amounts to Rs 1,266.072 million (2022:
Rs 630.225 million).
12.3 Includes Gas Infrastructure Development Cess (GIDC) that was levied through GIDC Act, 2015. The Supreme Court
of Pakistan (SCP) through its judgment dated August 13, 2020 has declared GIDC Act, 2015 a valid legislation.
Under the judgement, all gas consumers including the Company were ordered to pay the outstanding GIDC liability
as at July 31, 2020 to the Government of Pakistan in 24 equal monthly instalments. The Company has partially paid
GIDC amounting to Rs 84.5 million. The Company also filed a Suit with the Sindh High Court against collection of
GIDC instalments, before a factual determination of GIDC passed on to end consumers or not is carried out. The
Sindh High Court granted a stay in March 2021 against recovery of GIDC payable from the Company till the
finalisation of matter by the Court. The matter is currently pending in the Sindh High Court. The Company has
followed the relevant accounting standards and guidelines of the Institute of Chartered Accountants of Pakistan
(ICAP) in this regard.
2023 2022
(Rupees in thousand)
12.6 Includes payable to employees' provident fund amounting to Rs 0.0218 million (2022: Rs 31.473 million).
2023 2022
(Rupees in thousand)
Short term running finances/short term borrowings - note 13.1 20,019,028 10,569,147
Import finances - note 13.2 1,897,265 9,479,359
Export finances - note 13.3 3,578,000 5,162,000
25,494,293 25,210,506
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13.1 Short term running finances/short term borrowings
Short term running finance facilities and short term borrowings available from various commercial banks under
mark-up arrangements aggregate to Rs 38,150 million (2022: Rs 31,150 million). Such facilities are available at
mark-up rates ranging from one to three months KIBOR plus -0.05% to 1% (2022: One to three months KIBOR plus
-0.05% to 1%) per annum. The mark-up rate charged during the year on the outstanding balance ranged from
14.23% to 22.68% (2022: 7.35% to 15.15%) per annum and markup is payable monthly to quarterly. These are
secured by joint registered charge on all present and future current assets of the Company wherever situated
including stores and spares, stock in trade, book debts, investments and receivables.
Import finance facilities available from various commercial banks under mark-up arrangements aggregate to Rs
19,850 million (2022: Rs 18,600 million). Such facilities are available at mark-up rates ranging from one to six months
KIBOR plus -0.10 % to 0.05% (2022: one to six months KIBOR plus -0.05% to 0.1%) per annum. The mark-up rate
charged during the year on the outstanding balance ranged from 10.64% to 22.96% (2022: 7.51% to 15.18%) per
annum and markup is payable on settlement. The aggregate import finances are secured by a registered charge on
all present and future current assets of the Company wherever situated including stores and spares, stock in trade,
trade debts, investments and other receivables.
Export finance facilities available from various commercial banks under mark-up arrangements aggregate to Rs
15,250 million (2022: Rs 14,250 million). Such facilities are available at markup rate agreed as per State Bank of
Pakistan plus 0.25% to 1.00% (2022: State Bank of Pakistan agreed rate plus 0.00% to 1.00%) per annum. The
Export Finance Scheme rate has ranged from 2% to 18% throughout the year. These loans are obtained for a period
of 180 days and are secured against joint pari passu hypothecation charge over current assets of the Company.
Of the aggregate facility of Rs 47,050 million (2022: Rs 35,750 million) for opening letters of credit and Rs 4,850
million (2022: Rs 5,750 million) for guarantees, all being either main limits or sub-limits of the running finance
facilities, the amount utilised as at June 30, 2023 was Rs 25,538 million (2022: Rs 16,054 million) and Rs 2,825
million (2022: Rs 3,309 million) respectively. The facilities for opening letters of credit are secured against lien over
import documents whereas aggregate facilities for guarantees are secured against registered joint pari passu
charge over the present and future current assets of the Company. Of the facility for guarantees, Rs 14.48 million
(2022: Rs 14.480 million) is secured by a lien over bank deposits as referred to in note 26.2.
2023 2022
(Rupees in thousand)
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16.1 Contingencies
Contingent assets:
16.1.1 The matter relating to interpretation of provisions of section 4(2) of the repealed Central Excise Act, 1944
(1944 Act) has now attained finality after having been adjudicated by the honourable Supreme Court of
Pakistan through its judgment dated 27 January 2009 (upholding its previous judgment dated 15 February
2007). The longstanding controversy between the Revenue Department and the tax payers related
primarily to finer interpretation of the provisions of section 4(2) of the 1944 Act wherein the department had
a view that excise duty shall be included as a component for determination of the value (retail price) for
levying excise duty. The departmental view, being against the spirit of law, was challenged by the taxpayers
in appeals before the honourable High Courts of Pakistan which, duly appreciating the contentions of the
taxpayers, overturned the departmental view and succeeded the appeals.
Now, since the controversy has attained finality up to the highest appellate level, the Company has initiated
the process of claiming refund of excess excise duty paid by it during the periods from 1994 to 1999 which
aggregates Rs 1,115.145 million. The amount of refund, however, shall be incorporated in the books of
account once it is realized by the Company.
16.1.2 The Income Tax Officer, while framing the assessments for the assessment years 1984-85 to 1990-91, has
taxed the income of the Company on account of the interest on the deposits and sale of scrap etc. The
Appellate Tribunal on appeal filed by the Company issued an order in favour of the Company for the
assessment years 1984-85 to 1990-91. The Income Tax Department filed reference before the Lahore High
Court. Pending final outcome of such reference, no adjustment has been made in these financial
statements for the relief granted by the Appellate Tribunal aggregating to Rs 35.090 million.
Contingent liabilities:
16.1.3 During the period 1994 to 1996, the Company imported plant and machinery relating to expansion unit, for
which exemption was claimed under various SROs from the levy of custom duty and other duties including
sales tax. As per the provisions of SRO 484(I)/92, 978(I)/95 and 569(I)/95, the exemption from the statutory
duty would be available only if the said plant and machinery was not manufactured locally. However, the
Custom Authorities rejected the claim of the Company by arguing that the said machinery was on the list
of locally manufactured machinery, published by the Federal Board of Revenue. Consequently, the
Company appealed before the Lahore High Court, Multan Bench, which allowed the Company to release
the machinery on furnishing indemnity bonds with the Custom Authorities.
Collector of Customs and Central Excise, Multan, passed an order dated November 26, 1999, against the
Company on the grounds that the said machinery was being manufactured locally during the time when it
was imported.
After various appeals at different forums, the honourable Supreme Court of Pakistan remanded the case
back to the Customs Authorities to reassess the liability of the Company. The custom authorities
re-determined the liability of the Company upon which the Company preferred an appeal to the Customs
Appellate Tribunal. The Tribunal decided the case in favour of the Company, upon which the Company
discharged all liabilities. However, the custom authorities preferred a reference to the Lahore High Court,
Multan Bench on November 19, 2013. Last hearing of the case was conducted on June 25, 2018. In case
of any adverse decision, the management assesses liability to the tune of Rs 233.390 million. No provision
for this amount has been made in the financial statements as according to the management of the
Company, there are meritorious grounds that the ultimate decision would be in its favour.
16.1.4 The Competition Commission of Pakistan ('the CCP') took suo moto action under Competition Ordinance,
2007 and issued Show Cause Notice on October 28, 2008 for increase in prices of cement across the
country. The similar notices were also issued to All Pakistan Cement Manufacturers Association ('APCMA')
and its member cement manufacturers. The Company filed a Writ Petition in the Lahore High Court. The
Lahore High Court, vide its order dated August 24, 2009 allowed the CCP to issue its final order. The CCP
accordingly passed an order on August 28, 2009 and imposed a penalty of Rs 933 million on the Company.
The Lahore High Court vide its order dated August 31, 2009 restrained the CCP from enforcing its order
against the Company for the time being.
The vires of the Competition Commission of Pakistan have been challenged by a large number of petitioners
and all have been advised by their legal counsels that prima facie the Competition Ordinance, 2007 is ultra
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vires of the Constitution of Pakistan. The Honourable Supreme Court of Pakistan sent the appeals of the
petitioners to newly formed Competition Appellate Tribunal ('CAT') to decide the matter. The Company has
challenged sections 42, 43 and 44 of the Competition Act, 2010 in the Sindh High Court. The Honourable
Sindh High Court upon petition filed by large number of petitioners gave direction to CAT to continue with
the proceedings and not to pass a final order till the time petition is pending in Sindh High Court. No
provision for this amount has been made in the financial statements as according to the management of the
Company, there are meritorious grounds that the ultimate decision would be in its favour.
16.1.5 The Company, consequent to the order-in-appeal passed by the learned Customs, Federal Excise and
Sales Tax Appellate Tribunal, Lahore, filed a petition before the Lahore High Court on March 27, 2008,
challenging the levy of sales tax on the in-house consumption of Shale, Gypsum and Limestone for the
period from June 13, 1997 to August 11, 1998. Last hearing of the case was conducted on December 17,
2015. According to the legal counsel of the Company, chances of favourable outcome of the petition are
fair, therefore the payable amount has not been incorporated in these financial statements amounting to Rs
212.239 million.
16.1.6 On August 31, 2021, the Lahore High Court has granted interim relief to the Company in respect of a writ
petition filed by the Company to challenge a showcause notice issued by the Deputy Commissioner Inland
Revenue (DCIR) dated July 02, 2021, whereby, it was alleged that the Company had claimed inadmissible
input tax for the periods from July 2018 to December 2020 aggregating Rs 1,384.644 million primarily
related to construction/building material.
During the year, the Lahore High Court through its order dated March 31, 2023, directed the DCIR to
constitute a team of qualified/experts to attain an on-site/physical verification, clarifying the fact that
whether the items on which input tax claimed by the Company has been done as per provisions of Sales
Tax Act, 1990 or not. The said team will visit the manufacturing premises of the Company in order to verify
each and every invoice to conclude whether the goods thereunder have been used for the purpose of
taxable activity of making taxable supply. After completion of the said exercise, the matter will be finally
decided by the Lahore High Court.
As per management, meritorious grounds exist to support the position that the ultimate decision would be
in its favour wherein such claim of input tax would be allowed to the Company. Therefore, such credit of
input sales tax has not been reversed in these financial statements. However, in case of an adverse
decision, such input sales tax shall be reversed and will become part of the cost of the related fixed assets
that would result in increase in depreciation charge of such fixed assets over their remaining useful lives.
Consequently, no provision has been made in these financial statements on this account.
16.1.7 The DCIR passed an order dated August 20, 2021 for tax periods July 2017 to June 2018, whereby, a
demand was raised for recovery of sales tax of Rs 5,795.981 million, including applicable default surcharge
and penalty (amounting to Rs 275.999 million) imposed under sections 34 and 33(5) of the Sales Tax Act,
1990 respectively. The demand was raised mainly on account of alleged suppression of production and
sales of cement and disallowance of input sales tax on various goods and services (including that related
to fixed assets and building materials).
Further for these tax periods, a Federal Excise Duty (‘FED’) demand of Rs 2,884.751 million, along with
applicable default surcharge and penalty was also raised by the DCIR on November 30, 2021 under
relevant provisions of the Federal Excise Act, 2005 solely on account of alleged suppression of production
and sales of cement on bases identical to those framed through order dated August 20, 2021.
The Company had preferred appeal before the CIR(A) against the said orders, whereby through CIR(A)'s
order dated March 29, 2022 decision has been made in the Company's favour as the matter has been
remanded back to learned DCIR to adjudicate the matter afresh. The department has, however, appealed
against this decision before the ATIR.
The management, on the basis of consultation with its legal counsel and the favorable decision of the
CIR(A), considers that meritorious grounds exist to defend the company’s stance and that such sales tax
and FED demands are not likely to sustain appellate review by appellate authorities. Consequently, no
provision has been created in these financial statements on this account.
16.1.8 The banks have issued the following guarantees on Company's behalf in favour of:
- Collector of Customs, Excise and Sales Tax against levy of sales tax, custom duty and excise amounting
to Rs 30.538 million (2022: Rs 30.538 million).
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- Director, Excise Collection Office, Sindh Development and Maintenance against recovery of infrastructure
fee amounting to Rs 1,177.900 million (2022: Rs 1,287.900 million).
- The President of the Islamic Republic of Pakistan against the performance of a contract to Frontier Works
Organization amounting to Rs 0.5 million (2022: Rs 0.5 million).
- Sui Northern Gas Pipelines Limited against supply of 6 MMCFD and 14 MMCFD gas for captive use at
plants at Khairpur and at D.G. Khan respectively amounting to Rs 544.414 million (2022: Rs 544.414
million).
- Sindh High Court against levy of sales tax, custom duty and excise amounting to Rs 228.174 million
(2022: Rs 176.860 million).
- Pakistan Railways against supply of cement amounting to Rs 5.906 million (2022: Rs 7.075 million).
16.1.9 The Company has provided a guarantee to Meezan Bank Limited (MBL) against the loan provided by MBL
to Hyundai Nishat Motor (Private) Limited, a related party, amounting to Rs 1,238.471 million (2022: Rs
1,262.243 million).
16.1.10 The Company has issued a post dated cheque in favour of Nazir of the High Court of Sindh amounting to
Rs 227.760 million (2022: Rs 227.760 million) against the Industrial Support Package Adjustment on
K-Electric electricity bills.
(i) Contracts for capital expenditure Rs 520.310 million (2022: Rs 164.581 million).
(ii) Letters of credit for capital expenditure Rs 93.980 million (2022: Rs 1,254.466 million).
(iii) Letters of credit other than capital expenditure Rs 1,161.854 million (2022: Rs 3,037.820 million).
(iv) The amount of future payments under leases and the period in which these payments will become due are
as follows:
2023 2022
(Rupees in thousand)
184
17.1 Operating fixed assets
2023 (Rupees in thousand)
Accumulated Accumulated
Cost as at Depreciation
depreciation depreciation Book value
Cost as at Additions / June 30, 2023 charge /
and impairment and impairment as at June
July 01, 2022 (deletions) (deletions)
as at July as at June 30, 2023
for the year
01, 2022 30, 2023
(16,305)
- Office building and housing colony 3,980,932 58,452 4,039,384 986,649 151,419 1,138,068 2,901,316
Plant and machinery 78,690,058 1,482,230 80,172,288 23,975,855 2,247,425 26,223,280 53,949,008
Furniture and fittings 518,259 61,543 516,833 385,713 45,245 372,688 144,145
(62,969) (58,270)
(92,258) (83,395)
(24,796) (15,348)
Power and water supply lines 4,022,461 4,284 4,026,745 1,540,490 248,349 1,788,839 2,237,906
(196,328) (157,013)
185
2023
2022 (Rupees in thousand)
Accumulated Accumulated
Depreciation
depreciation depreciation Book value
Cost as at Additions / Cost as at charge /
and impairment and impairment as at June
July 01, 2021 (deletions) June 30, 2022 (deletions)
186
2023
- Office building and housing colony 3,599,679 381,253 3,980,932 844,594 142,055 986,649 2,994,283
Roads 2,322,250 127,238 2,449,488 856,914 151,978 1,008,892 1,440,596
Plant and machinery 71,929,058 6,761,000 78,690,058 21,805,276 2,170,579 23,975,855 54,714,203
Quarry equipment 4,471,330 2,282 4,473,612 2,192,276 183,734 2,376,010 2,097,602
Furniture and fittings 497,808 20,451 518,259 333,398 52,315 385,713 132,546
Office equipment 551,050 38,182 589,215 384,354 54,100 438,442 150,773
(17) (12)
Vehicles 887,008 158,227 970,522 453,323 77,602 481,400 489,122
(74,713) (49,525)
Aircraft 328,752 - 328,752 314,061 4,406 318,467 10,285
Power and water supply lines 3,953,150 69,311 4,022,461 1,268,227 272,263 1,540,490 2,481,971
112,632,523 8,728,068 121,285,861 35,492,264 3,909,107 39,351,833 81,934,028
(74,730) (49,537)
17.1.1 Freehold land and building include book values of Rs 12 million (2022: Rs 12 million) and Rs 4.252 million (2022: Rs 4.252 million) respectively which are held in the name of Chief Executive of
the Company. This property is located in the locality of Defence Housing Authority, Lahore, where the bye-laws restrict transfer of title of the residential property in the name of the Company.
17.1.2 Following are the particulars of the Company’s immovable fixed assets:
2023 2022
Location Usage of immovable property Total Area (in Acres)
Hub, Mauza Chichai, Balochistan Plant site and staff colony 1462.5 1467.5
Khairpur district, Chakwal, Punjab Plant site and staff colony 901.5 901.5
Kanrach Nai, District Lasbela, Balochistan Source of raw material 723.14 723.14
Dera Ghazi Khan, Punjab Plant site and staff colony 590 590
Lakho Dair, Lahore, Punjab Processing site 44 44
Gulberg, Lahore, Punjab Administrative offices 1.5 1.5
Others Sales offices 0.28 0.28
2023 2022
(Rupees in thousand)
17.1.3 The depreciation charge for the year has been allocated as follows:
Related party
Security General Insurance Company Limited 7,610 3,452 7,552 4,100 Insurance claim
Employees
Ijaz Khalid 1,851 688 688 - As per Company Policy
Muhammad Amin 2,096 738 738 - -do-
Abid Naseer 1,847 601 601 - -do-
Related party
Security General Insurance Company Limited 3,323 1,106 3,288 2,182 Insurance claim
Annual Report
DGKC
187
2023
17.2 Capital work-in-progress
188
2023
Advances to suppliers
and contractors 51,929 164,803 - - (125,138) - - 91,594
Plant and machinery 5,864,018 525,260 59,578 - 152,220 (6,241,547) (28,534) 330,995
Advances to suppliers
and contractors 84,336 119,813 - - (152,220) - - 51,929
17.4 All property, plant and equipment are pledged as security against long term finances as referred to in note 7.
2023 2022
(Rupees in thousand)
Computer Software
COST
Balance as at July 01 21,500 -
Additions during the year - 21,500
Balance as at June 30 21,500 21,500
AMORTIZATION
Balance as at July 01 4,181 -
Charge for the year - note 30 7,167 4,181
Balance as at June 30 11,348 4,181
2023 2022
(Rupees in thousand)
19. Investments
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2023 2022
(Rupees in thousand)
FVOCI - quoted:
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2023 2022
(Rupees in thousand)
FVOCI - unquoted:
19.1.1 Nishat Paper Products Company Limited is principally engaged in the manufacture and sale of paper
products (packaging material). The registered office of the subsidiary is situated at 53-A, Nishat House,
Lawrence Road, Lahore and the manufacturing facility is located at Khairpur, District Chakwal on the
Company's land.
19.1.2 The principal activity of Nishat Dairy (Private) Limited is to carry on the business of production of raw milk.
The registered office of the subsidiary is situated at 53-A, Nishat House, Lawrence Road, Lahore and its
production facility and factory is situated at 1- KM Sukheki Road, Pindi Bhattian.
19.1.3 This represents investment in the ordinary shares of Nishat Hotels and Properties Limited ('NHPL') which
is principally engaged in establishing and managing a multi-purpose facility including a shopping mall,
hotel and banquet halls in Johar Town, Lahore, by the name of 'Nishat Emporium'. Since NHPL's ordinary
shares are not listed, an independent valuer engaged by the Company has estimated a fair value of Rs
19.16 per ordinary share as at June 30, 2023 (2022: Rs 18.44 per share) through a valuation technique
based on discounted cash flow analysis of NHPL. Hence, it has been classified under level 3 of fair value
hierarchy as further explained in note 43.3 to these financial statements. The fair value gain of Rs 75.300
million recognised during the year is included in other comprehensive income.
The main level 3 inputs used by the Company are derived and evaluated as follows:
- Discount rate is determined using a capital asset pricing model to calculate a post-tax rate that reflects
current market assessments of the time value of money and the risk specific to NHPL.
- Long term growth rate is estimated based on historical performance of NHPL and current market
information for similar type of entities.
- Long term growth rate of 2% per annum for computation of terminal value.
- Annual growth in costs is linked to inflation with a range of 6.50% to 25.60% per annum.
Sensitivity analysis
Sensitivity analysis of the significant assumptions used in the valuation technique are as follows:
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If the discount rate increases by 1% with all other variables held constant, the impact on fair value as at
June 30, 2023 would be Rs 209.375 million lower.
If the long term growth rate decreases by 1% with all other variables held constant, the impact on fair value
as at June 30, 2023 would be Rs 71.875 million lower.
If inflation decreases by 1% with all other variables held constant, the impact on fair value as at June 30,
2023 would be Rs 21.875 million higher.
If interest rate increases by 1% with all other variables held constant, the impact on fair value as at June
30, 2023 would be Rs 15.625 million lower.
19.1.4 This represents investment in the ordinary shares of Hyundai Nishat Motor (Private) Limited ('HNMPL') that
has setup up a greenfield project for assembly and sales of Hyundai Motor Company passenger and
commercial vehicles. During the year, the Company under right issue acquired further equity shares of
HNMPL amounting to Rs 1,007.500 million (fully paid shares of Rs 10 each). Since HNMPL's ordinary
shares are not listed, an independent valuer engaged by the Company has estimated a fair value of Rs
19.67 per ordinary share as at June 30, 2023 (2022: Rs 25.15 per share) through a valuation technique
based on discounted cash flow analysis of HNMPL. Hence, it has been classified under level 3 of fair value
hierarchy as further explained in note 43.3 to these financial statements. The fair value gain of Rs 453.612
million recognised during the year is included in other comprehensive income.
The main level 3 inputs used by the Company are derived and evaluated as follows:
- Discount rate is determined using a capital asset pricing model to calculate a post-tax rate that reflects
current market assessments of the time value of money and the risk specific to HNMPL.
- Long term growth rate is estimated based on historical performance of HNMPL and current market
information for similar type of entities.
- Long term growth rate of 2% per annum for computation of terminal value.
- Annual growth in costs are linked to inflation and currency devaluation at 15% per annum and revenues
are linked to currency devaluation at 15% per annum.
Sensitivity analysis
Sensitivity analysis of the significant assumptions used in the valuation technique are as follows:
If the discount rate increases by 1% with all other variables held constant, the impact on fair value as at
June 30, 2023 would be Rs 191.977 million lower.
If the long term growth rate decreases by 1% with all other variables held constant, the impact on fair value
as at June 30, 2023 would be Rs 77.093 million lower.
If inflation decreases by 1% with all other variables held constant, the impact on fair value as at June 30,
2023 would be Rs 317.710 million higher.
If interest rate increases by 1% with all other variables held constant, the impact on fair value as at June
30, 2023 would be Rs 30.499 million lower.
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2023 2022
(Rupees in thousand)
19.2 Others
FVOCI - quoted:
168,693 79,718
19.3.1 This represents 100.75 million shares acquired against right issue of HNMPL at a par value of Rs 10 per
ordinary share.
19.3.2 Pursuant to the Scheme of Compromises, Arrangement and Reconstruction (Under Sections 279 to 283
and 285 of the Companies Act, 2017) amongst Nishat (Chunian) Limited and its members and Nishat
Chunian Properties (Private) Limited and its members duly sanctioned by Honorable Lahore High Court,
Lahore, the Company on, 18 August 2022, received 5,683,067 ordinary shares of Nishat Chunian Power
Limited as one of the principal objects of the Scheme was to make Nishat (Chunian) Limited and Nishat
Chunian Power Limited totally independent of each other by the transfer amongst the members of Nishat
(Chunian) Limited of 187,585,820 ordinary shares of Nishat Chunian Power Limited owned by Nishat
(Chunian) Limited. Hence, the Company has also become a shareholder of Nishat Chunian Power Limited
with effect from August 18, 2022.
19.4 3,860,267 (2022: 3,860,267) shares of MCB Bank Limited are blocked in Central Depository Company ('CDC')
account.
These represent security deposits against various goods and services. These deposits have not been carried at amortised
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2023 Annual Report
DGKC
cost mainly because the period after which the deposits are to be refunded is indefinite. Further, the effect of discounting
is immaterial in the context of these financial statements.
2023 2022
(Rupees in thousand)
21.1 Stores and spare parts include items which may result in fixed capital expenditure but are not distinguishable.
2023 2022
(Rupees in thousand)
22. Stock-in-trade
23.1.1 The maximum aggregate amount outstanding at the end of any month during the year was Rs 44.861
million (2022: Rs 19.697 million). The aging analysis of trade debts from related parties that are past due
and carry loss allowance is as follows:
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Annual Report
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2023 2022
(Rupees in thousand)
FVOCI:
Nishat (Chunian) Limited
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2023 Annual Report
DGKC
25.1 This represents receivable from Nishat Sutas Dairy (Private) Limited and Hyundai Nishat Motor (Private) Limited,
related parties, amounting to Nil (2022: Rs 1.511 million) and Rs 0.008 million (2022: Rs 0.320 million ) respectively,
on account of shared expenses. The maximum aggregate amount outstanding at the end of any month during the
year from such related parties was Rs 15.816 million (2021: Rs 1.832 million). The balances are neither past due nor
impaired.
25.2 Sales tax recoverable includes amounts which have been recovered by the sales tax department against
miscellaneous demands raised by it. The Company has filed appeals against the demands at different forums as
referred to in note 16.
Furthermore, the vires of section 8(h) and (i) of the Sales Tax Act, 1990 (the “Act”), in the context of disallowance of
adjustment of input tax on goods used for taxable services, was called in question by the Company. The honourable
Lahore High Court vide its order dated January 29, 2020 on the basis of its reading of sections 7 and 8 of the Act,
observed that input tax paid on goods can be deducted or reclaimed, only if such goods are used for the purpose
of taxable supplies. Thus, in light of the said observation, the case was disposed of with a direction to the tax
authorities to determine each and every case on its merits and allow adjustment of input tax on goods used for
taxable supplies. Management is confident that the input tax already claimed shall not be disallowed by the relevant
tax authorities.
25.3 Includes a receivable of Rs 5.793 million (2022: Rs 6.160 million) from Hyundai Nishat Motor (Private) Limited, being
a related party of the Company. The maximum aggregate amount outstanding at the end of any month during the
year of Hyundai Nishat Motor (Private) Limited was Rs 5.793 million (2022: Rs 6.160 million). This amount is neither
past due nor impaired.
2023 2022
(Rupees in thousand)
At banks:
Savings accounts
Local currency - notes 26.1, 26.2 & 26.3 74,899 82,023
Foreign currency: US$ 1,481,054 (2022: US$ 1,277,401) 423,567 261,671
Current accounts
Local currency 43,172 66,581
Foreign currency: US$ 547,892 (2022: Nil) 132,969 -
674,607 410,275
In hand 365 528
674,972 410,803
26.1 The balances in saving accounts bear mark-up of 14% per annum (2022: 12% per annum).
26.2 Included in balances at banks on saving accounts are Rs 14.480 million (2022: Rs 14.480 million) which are under
lien to secure bank guarantees referred to in note 14.4.
26.3 Included in balances at banks in saving accounts is Rs 0.004 million (2022: Rs 0.004 million) which relates to unpaid
dividend held by the Company.
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2023 2022
(Rupees in thousand)
27. Revenue
27.1 It includes rebate and incentive on exports amounting to Rs 3.67 million (2022: Rs 7.53 million) and Rs 20.197 million
(2022: Nil) respectively. Incentive is received due to early shipment made under the contract.
27.2 Represents freight cost incurred upon shipping goods to export customers under cost and freight terms in the
capacity of agent.
2023 2022
(Rupees in thousand)
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28.1 Salaries, wages and other benefits include Rs 100.778 million (2022: Rs 92.532 million), in respect of provident fund
contribution by the Company. Further, the provision for gratuity and accumulating compensated absences included
in the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 81,195 69,870
Interest cost for the year 106,786 68,318
Interest income on plan assets (56,933) (40,959)
131,048 97,229
Accumulating compensated absences
Current service cost 48,810 46,206
Interest cost for the year 15,429 10,816
Remeasurements 212 2,670
64,451 59,692
28.2 This represents royalty to Governments of Punjab and Balochistan for extraction of raw materials as per relevant
laws.
28.3 This includes rentals of heavy machinery used at quarry site where raw materials i.e. clay and limestone, are
extracted.
2023 2022
(Rupees in thousand)
29.1 Salaries, wages and other benefits includes Rs 12.086 million (2022: Rs 11.192 million) in respect of provident fund
contribution by the Company. Further, the provision for gratuity and accumulating compensated absences included
in the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 12,720 10,782
Interest cost for the year 16,729 10,542
Interest income on plan assets (8,919) (6,320)
20,530 15,004
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2023 2022
(Rupees in thousand)
30.1 Salaries, wages and other benefits includes Rs 11.124 million (2022: Rs 9.992 million) in respect of provident fund
contribution by the Company. Further, the provision for gratuity and accumulating compensated absences included
in the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 8,393 7,118
Interest cost for the year 11,038 6,960
Interest income on plan assets (5,885) (4,173)
13,546 9,905
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2023 Annual Report
DGKC
2023 2022
(Rupees in thousand)
31.1 Represents donation made to Pakistan Agricultural Coalition. None of the directors or their spouses have any
interest in the donee.
2023 2022
(Rupees in thousand)
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Annual Report
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33.1 Included in this is the finance cost on ITERF and Islamic re-finance facilities for payment of salaries and wages,
which has been set off against the amount of unwinding of grant as referred in note 8.
2023 2022
(Rupees in thousand)
34. Taxation
Current:
- For the year 1,411,796 1,371,940
- Prior years' 23,680 46,345
1,435,476 1,418,285
2023 2022
% %
Applicable tax rate as per Income Tax Ordinance, 2001 29.00 29.00
- Amounts that are not deductible for tax purposes - net 0.41 0.27
- Change in prior years' tax (2.62) (1.34)
- Effect of Super tax 76.60 29.40
- Income not subject to tax (1.57) -
- Previously recognized deferred tax asset charged off 43.87 10.10
- Change in allocation ratio of temporary differences among
Normal Tax Regime and Final Tax Regime - (12.67)
- Recognition of deferred tax on temporary differences related to
exports revenue stream that is to be taxed under Normal Tax Regime 80.67 -
- Income chargeable under Final Tax Regime (11.39) (4.13)
185.97 21.63
Average effective tax rate 214.97 50.63
A diluted earnings per share has not been presented as the Company does not have any convertible instruments in
issue as at June 30, 2023, and June 30, 2022, which would have any effect on the earnings per share if the option
to convert is exercised.
201
36. Remuneration of Chief Executive, Directors and Executives
36.1 The aggregate amount charged in the financial statements for the year for remuneration, including certain benefits, to the Chief Executive, directors and executives of the Company
202
2023
are as follows:
(Rupees in thousand)
DGKC
Contributions to Provident
and Gratuity Fund - - 4,505 4,095 102,301 91,037
78,990 57,214 36,634 30,292 1,333,374 1,257,053
36.2 The Company also provides the Chief Executive, certain directors and executives with Company maintained car, travelling and utilities. Certain executives are provided with housing
facilities.
36.3 During the year, the Company paid meeting fee amounting to Rs 1.140 million (2022: Rs 0.910 million) to its non-executive directors. The number of non-executive directors is 5
(2022: 5).
Annual Report
DGKC 2023
2023 2022
(Rupees in thousand)
2023 2022
(Rupees in thousand)
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2023 Annual Report
DGKC
39.1 This represents remuneration of the Chief Executive, executive director and certain executives that are included in
the remuneration disclosed in note 36 to these unconsolidated financial statements.
39.2 Transactions with related parties have been carried out on mutually agreed terms and conditions. The related parties
with whom the Company had entered into transactions or had arrangements/agreements in place during the year
have been disclosed below along with their basis of relationship:
Plant I & II - D.G. Khan - note 40.1 2,010,000 2,010,000 1,328,904 1,655,502
Plant III - Khairpur - note 40.1 2,010,000 2,010,000 1,339,707 1,727,607
Plant IV - Hub - note 40.1 2,700,000 2,700,000 1,959,742 2,987,085
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40.1 Plant capacity is based on 300 working days, that can be exceeded if the plant is operational for more than 300 days
during the year. Actual production is less than the installed capacity due to planned maintenance shutdown and gap
between market demand and supply of cement.
2023 2022
(USD in thousand)
The investments by the provident fund in collective investment schemes, listed equity and debt securities have been made
in accordance with the provisions of section 218 of the Companies Act, 2017 and the conditions specified thereunder.
As at reporting date, the provident fund has signed the term sheet for appointment of ‘investment advisor’ and is in the
process of signing the agreement.
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate
risk and other price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s
financial performance.
Risk management is carried out by the Board of Directors ('the Board'). The Company's finance department
evaluates and hedges financial risks. The Board provides written principles for overall risk management, as well as
written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, investment of
excess liquidity. All treasury related transactions are carried out within the parameters of these policies.
The Company's overall risk management procedures to minimise the potential adverse effects of financial market
on the Company's performance are as follows:
Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Currency risk arises mainly from future commercial transactions and recognised
assets and liabilities that exist due to transactions in foreign currencies.
The Company is exposed to currency risk arising from various currency exposures, primarily with respect to the
United States Dollar (USD). Currently, the Company’s foreign exchange risk exposure is restricted to bank balances,
amounts payable to/receivable from foreign entities and short term borrowings.
2023 2022
(USD in thousand)
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At June 30, 2023, if the Rupee had weakened/strengthened by 10% against the USD with all other variables held
constant, post-tax loss for the year would have been Rs 65.066 million lower/higher (2022: Rs 30.879 million
higher/lower) mainly as a result of foreign exchange gains/losses on translation of USD - denominated financial
assets.
Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes
are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar
financial instruments traded in the market.
The Company is exposed to equity securities price risk because of investments held by the Company and classified
as fair value through other comprehensive income. Material investments within the portfolio are managed on an
individual basis and all buy and sell decisions are approved by the Board. The primary goal of the Company's
investment strategy is to maximise investment returns.
The Company’s certain investments in equity instruments are publicly traded on the Pakistan Stock Exchange
Limited.
The table below summarises the impact of increases/decreases of the KSE-100 index on the Company’s equity. The
analysis is based on the assumption that the KSE-100 index had increased/decreased by 10% with all other
variables held constant and all the Company’s equity investments moved according to the historical correlation with
the index:
As at June 30, 2023, the Company had no investments classified as at fair value through profit or loss, hence there
is no impact on the profit for the year.
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Company’s interest rate risk arises from loan to related party, bank balances, short term and long-term
borrowings. These borrowings issued at variable rates expose the Company to cash flow interest rate risk.
The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these
scenarios, the Company calculates the impact on profit or loss of a defined interest rate shift. The scenarios are run
only for liabilities that represent the major interest-bearing positions.
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2023 2022
(Rupees in thousand)
Financial assets
Bank balances - savings accounts 498,466 343,694
Financial liabilities
Export finances (3,578,000) (5,162,000)
Financial liabilities
Long term finances (13,742,264) (17,036,958)
Short term borrowings (21,916,293) (20,048,506)
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.
Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Company.
At June 30, 2023, if interest rates on variable rate instruments had been 1% higher/lower with all other variables held
constant, post-tax loss for the year would have been Rs 217.517 million (2022: Rs 248.473 million lower/higher)
higher/lower, mainly as a result of higher/lower interest expense on floating rate instruments.
Credit risk represents the risk of financial loss being caused if counter party fails to discharge an obligation.
Credit risk of the Company arises from deposits with banks and other financial institutions, as well as credit
exposures to customers, including outstanding receivables and committed transactions. The management
assesses the credit quality of the customers, taking into account their financial position, past experience and other
factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board.
For banks and financial institutions, only independently rated parties with a strong credit rating are accepted.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was as follows:
2023 2022
(Rupees in thousand)
The Company's financial assets, other than investments in equity instruments, are subject to the expected credit
losses model. While bank balances, loans to employees, deposits and other receivables are also subject to the
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impairment requirements of IFRS 9, the identified impairment loss was immaterial and are therefore not exposed to
any material credit risk.
Trade debts
The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade debts.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due. These trade receivables are netted off with the collateral obtained from these
customers to calculate the net exposure towards these customers. The Company has concluded that the expected
loss rates for trade debts against local sales are different from the expected loss rates for trade debts against export
sales.
The expected loss rates are based on the payment profiles of sales over a period of 24 months before June 30, 2023
and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted
to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers
to settle the trade debts. The Company has identified the Gross Domestic Product and the Consumer Price Index
of the country in which it majorly sells its goods and services to be the most relevant factors, and accordingly
adjusts the historical loss rates based on expected changes in these factors. Security deposits pledged by the
customers to Company have been regarded as collateral against trade receivables. These security deposits are in
liquid form.
On that basis, the loss allowance as at June 30, 2023 and June 30, 2022 was determined as follows:
Trade debts
against which 169,848 - - -
collateral is held
Gross Trade debts 904,957 130,330 507,973 89,160
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Local sales Export sales
Expected Trade debts Loss Expected Trade debts Loss
June 30, 2022 loss rate allowance loss rate allowance
% (Rupees in thousand) % (Rupees in thousand)
Trade debts
against which 72,601 - - -
collateral is held
Gross Trade debts 1,384,873 50,843 198,385 64,553
* This represents amounts net of trade debts against which security deposits, considered as collateral, are held
amounting to Rs 169.848 million (2022: Rs 72.601 million).
The amount of loss allowance that best represents maximum exposure to credit risk at the end of the reporting
period without taking into account any collateral is Rs 153.192 million (2022: Rs 133.650 million).
Generally, default is triggered when more than 360 days have passed. However, in case of certain parties, extended
credit period is allowed by the Credit Committees of the Company. The names of defaulting parties of outstanding
trade debts from export sales and their respective default amount is as follows:
2023 2022
(Rupees in thousand)
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The credit quality of financial assets that are neither past due nor impaired (mainly bank balances) can be assessed
by reference to external credit ratings (if available) or to historical information about counterparty default rate:
Rating Rating
Short term Long term Agency 2023 2022
(Rupees in thousand)
Liquidity risk represents the risk that the Company shall encounter difficulties in meeting obligations associated with
financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the Company's
businesses, the Company's finance department maintains flexibility in funding by maintaining availability under
committed credit lines. At June 30, 2023, the Company had Rs 38,150 million available borrowing limits from
financial institutions under short term mark up arrangements, Rs 19,850 million available borrowing limits from
financial institutions under import finance facilities and Rs 671.716 million in cash and bank balances.
Management monitors the forecasts of the Company’s cash and cash equivalents (note 38 to these financial
statements) on the basis of expected cash flow. This is generally carried out in accordance with practice and limits
set by the Company. These limits vary by location to take into account the liquidity of the market in which the entity
operates. In addition, the Company's liquidity management policy involves projecting cash flows in each quarter
and considering the level of liquid assets necessary to meet its liabilities, monitoring statement of financial position
liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date.
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(Rupees in thousand)
Total
At June 30, 2023 Less than Between 1 2 to Over contractual Carrying
1 year and 2 years 5 years 5 years cashflows value
(Rupees in thousand)
Total
At June 30, 2022 Less than Between 1 2 to Over contractual Carrying
1 year and 2 years 5 years 5 years cashflows value
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
The Company manages its capital structure and makes adjustments to it in the light of changes in economic
conditions. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders or issue new shares.
Consistent with others in the industry and the requirements of the lenders, the Company monitors the capital
structure on the basis of gearing ratio. This ratio is calculated as net debt divided by total equity (as shown in the
statement of financial position). Net debt is calculated as total borrowings (including current and non-current
borrowings) including book overdraft (if any) less cash and bank balances and liquid investments.
The gearing ratios as at June 30, 2023 and 2022 were as follows:
2023 2022
(Rupees in thousand)
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In accordance with the terms of agreements with the lenders of long term finances (as referred to in note 7 to these
financial statements), the Company is required to comply with certain financial covenants. The Company has
complied with these covenants throughout the reporting period except for certain covenants in respect of which the
lenders have not raised any objection to the Company.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit
price) regardless of whether that price is directly observable or estimated using another valuation technique.
The table below analyses the financial instruments carried at fair value, by valuation method. The different levels
have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The following table presents the Company's assets and liabilities that are measured at fair value:
Total liabilities - - - -
Total liabilities - - - -
Movement in the above mentioned assets has been disclosed in notes 19 and 24 to these financial statements and
movement in fair value reserve has been disclosed in the statement of changes in equity. There were no transfers
between Levels 1 and 2 & Levels 2 and 3 during the year and there were no changes in valuation techniques during
the year. Since the ordinary shares of Nishat Hotels and Properties Limited and Hyundai Nishat Motor (Private)
Limited are not listed, an investment advisor engaged by the Company has estimated fair values of Rs 19.16 and Rs
19.67 per ordinary share, respectively, as at June 30, 2023, through a valuation technique based on discounted cash
flow analysis. The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as
at the end of the reporting period. Changes in level 2 and 3 fair values are analysed at the end of each reporting
period during the annual valuation discussion between the Chief Financial Officer and the investment advisor. As
part of this discussion, the investment advisor presents a report that explains the reason for the fair value
movements.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by
the Company is the current bid price. These instruments are included in Level 1.
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The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on
observable yield curves.
- Other techniques, such as discounted cash flow analysis, are used to determine fair values for the remaining
financial instruments. An appropriate discount for lack of control and lack of marketability is also applied, where
relevant.
The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair
values.
At fair value
through other
comprehensive At amortised
income cost Total
(Rupees in thousand)
At fair value
through other
comprehensive At amortised
income cost Total
(Rupees in thousand)
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Financial liabilities at
amortized cost
2023 2022
(Rupees in thousand)
There are no significant financial assets and financial liabilities that are subject to offsetting, enforceable master
netting arrangements and similar agreements.
2023 2022
(Rupees in thousand)
The Company has obtained short term borrowings and long term finances, and has maintained bank balances with shariah
compliant banks.
These financial statements were authorised for issue on August 31, 2023 by the Board of Directors of the Company.
214
CONSOLIDATED
FINANCIAL
STATEMENTS
2023 Annual Report
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Opinion
We have audited the annexed consolidated financial statements of D. G. Khan Cement Company Limited and its
subsidiaries (the Group), which comprise the consolidated statement of financial position as at June 30, 2023, and the
consolidated statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated
financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion, consolidated financial statements give a true and fair view of the consolidated financial position of the Group
as at June 30, 2023, and of its consolidated financial performance and its consolidated cash flows for the year then ended
in accordance with the accounting and reporting standards as applicable in Pakistan.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the
Institute of Chartered Accountants of Pakistan (the Code), and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Sr.
Key audit matters How the matters were addressed in our audit
No.
1. Deferred taxation
(Refer note 11 to the annexed consolidated Our audit procedures included the following:
financial statements)
• Obtained an understanding of the Group's process of
The Group has recognized deferred tax in respect preparing the deferred tax working and tested internal
of unused tax credits and unused tax losses. controls over management's valuation of deferred tax
Deferred tax assets on such items have been assets;
recognized as it is probable that sufficient
taxable profits will be available in future, before • Obtained an understanding regarding the relevant tax
their expiry, for their utilization on the basis of laws with respect to availability of tax credits and
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Sr.
Key audit matters How the matters were addressed in our audit
No.
the approved business plan. unused tax losses;
Due to the significant level of judgement and • Recalculated the amount of tax credits and unused tax
estimation required in preparing the business losses in accordance with the provisions of Income Tax
plan for determining recoverability of deferred Ordinance, 2001;
tax assets and the significance of the amounts
involved, we consider it to be a key audit matter. • Involved internal tax specialists to check the income
tax computation for the year and assessed the
management’s conclusion on carry forward of the tax
credits and unused tax losses;
(Refer notes 21.1.1 and 21.1.2 to the annexed Our audit procedures included the following:
consolidated financial statements)
• Understood and evaluated the process by which the
The Group holds investments in equity cash flow forecasts were prepared and approved,
instruments of Nishat Hotels and Properties including confirming the mathematical accuracy of the
Limited ('NHPL') and Hyundai Nishat Motor underlying calculations;
(Private) Limited ('HNMPL').
• Evaluated the cash flow forecasts by obtaining an
Due to NHPL and HNMPL being non-listed understanding of respective businesses of NHPL and
companies, their shares do not have a quoted HNMPL;
price in an active market. Therefore, fair values
of their shares have been determined through • Obtained an understanding of the work performed by
valuation methodology based on discounted cash the management's expert on the models for the
flow method. This involves several estimation purpose of valuations;
techniques and management's judgements to
obtain reasonable expected future cash flows of • Examined the professional qualification of
respective businesses and related discount management's expert and assessed the
rates. Management involved an expert to independence, competence and experience of the
perform these valuations on its behalf. management's expert in the field;
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Sr.
Key audit matters How the matters were addressed in our audit
No.
Due to the significant level of judgment and • Obtained corroborating evidence relating to the values
estimation required to determine the fair value of as determined by the management's expert by
the investments, we consider it to be a key audit challenging key assumptions for the growth rates in
matter. the cash flow forecasts by comparing them to
historical results and economic forecasts and
challenging the discount rate by independently
estimating a range based on market data;
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
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supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is Khurram Akbar Khan.
Lahore
Date: September 12, 2023
UDIN: AR202310070V9HGItZUi
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2023 2022
Note (Rupees in thousand)
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
The annexed notes 1 to 53 form an integral part of these consolidated financial statements.
Chief Executive
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2023 2022
Note (Rupees in thousand)
ASSETS
NON-CURRENT ASSETS
CURRENT ASSETS
142,246,271 141,590,854
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2023 2022
Note (Rupees in thousand)
(3,366,054) 3,382,422
The annexed notes 1 to 53 form an integral part of these consolidated financial statements.
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2023 2022
(Rupees in thousand)
The annexed notes 1 to 53 form an integral part of these consolidated financial statements.
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2023 2022
Note (Rupees in thousand)
The annexed notes 1 to 53 form an integral part of these consolidated financial statements.
224
Capital Reserve Revenue Reserve
Total equity
Capital
Un- attributable to Non-
Share Share FVOCI redemption General
appropriated owners of Controlling Total equity
Capital premium reserve reserve reserve
Profits parent Interest
fund
company
Rupees in thousand
Balance as on July 01, 2021 4,381,191 4,557,163 20,201,824 353,510 5,110,851 39,089,297 73,693,836 2,182,351 75,876,187
Balance as on June 30, 2022 4,381,191 4,557,163 14,131,957 353,510 5,110,851 41,759,427 70,294,09 2,349,613 72,643,712
Final dividend for the year ended June 30, 2022 - - - - - (438,119) (438,119) (20,941) (459,060)
Balance as on June 30, 2023 4,381,191 4,557,163 12,472,308 353,510 5,110,851 37,785,778 64,660,801 2,482,081 67,142,882
The annexed notes 1 to 53 form an integral part of these consolidated financial statements.
Annual Report
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225
Chief Executive Chief Financial Officer Director
2023
2023 Annual Report
DGKC
D. G. Khan Cement Company Limited is a public company limited by shares, incorporated in Pakistan in 1978 under the
repealed Companies Act, 1913 (now, the Companies Act, 2017, hereinafter may be referred to as the 'Act'). Its ordinary
shares are listed on the Pakistan Stock Exchange Limited. It is principally engaged in production and sale of Clinker,
Ordinary Portland and Sulphate Resistant Cement (hereinafter referred to as the 'Cement segment'). It has four cement
plants; two plants located at Dera Ghazi Khan ('D. G. Khan'), one at Khairpur District, Chakwal ('Khairpur') and one at Hub
District, Lasbela ('Hub').
Nishat Paper Products Company Limited is a public company limited by shares, incorporated in Pakistan on July 23, 2004
under the repealed Companies Ordinance, 1984 (now, the Act). It is principally engaged in the manufacture and sale of
paper products and packaging material (hereinafter referred to as the 'Paper segment'). Its manufacturing facility is located
at Khairpur on the parent company's land.
Nishat Dairy (Private) Limited is a private company limited by shares, incorporated in Pakistan on October 28, 2011 under
the repealed Companies Ordinance, 1984 (now, the Act). It is principally engaged in the business of production and sale of
raw milk (hereinafter referred to as the 'Dairy segment'). Its production facility and factory is situated at 1- KM Sukheki Road,
Pindi Bhattian.
The registered office of all the above companies is situated at 53-A, Nishat House, Lawrence Road, Lahore. The parent
company's holding in its subsidiaries is as follows:
Effective
percetage of holding
The Group has regional offices located across Pakistan, the geographical locations of which are listed below:
2. Basis of preparation
These consolidated financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
i) International Financial Reporting Standards ('IFRS') issued by the International Accounting Standards Board
('IASB') as notified under the Companies Act, 2017; and
ii) Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of and
directives issued under the Companies Act, 2017 have been followed.
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2.2 Initial application of standards, amendments or an interpretation to existing standards
The following amendments to existing standards have been published that are applicable to the Group's
consolidated financial statements covering annual periods, beginning on or after the following dates:
2.2.1 Standards, amendments to published standards and interpretations that are effective in the current
year
Certain standards, amendments and interpretations to IFRS are effective for accounting periods beginning
on July 1, 2022 but are considered not to be relevant or to have any significant effect on the Group’s
operations and are, therefore, not detailed in these consolidated financial statements.
2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Group
There are certain standards, amendments to the IFRS and interpretations that are mandatory for Group's
accounting periods beginning on or after July 1, 2023 but are considered not to be relevant or to have any
significant effect on the Group's operations and are, therefore, not detailed in these consolidated financial
statements, except for the following:
The IASB has issued narrow-scope amendments to IFRS Standards. The amendments will help
companies:
- improve accounting policy disclosures so that they provide more useful information to investors and
other primary users of the financial statements; and
The amendments to IAS 1 require companies to disclose their material accounting policy information
rather than their significant accounting policies.
The amendments introduce a new definition for accounting estimates clarifying that they are monetary
amounts in the financial statements that are subject to measurement uncertainty. The amendments
also clarify the relationship between accounting policies and accounting estimates by specifying that
a company develops an accounting estimate to achieve the objective set out by an accounting policy.
The amendments will apply prospectively to changes in accounting estimates and changes in
accounting policies occurring on or after the beginning of the first annual reporting period in which the
company applies the amendments.
The amendments narrow the scope of the initial recognition exemption (IRE) so that it does not apply
to transactions that give rise to equal and offsetting temporary differences. As a result, companies will
need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising on
initial recognition of a lease and a decommissioning provision. For leases and decommissioning
liabilities, the associated deferred tax asset and liabilities will need to be recognised from the
beginning of the earliest comparative period presented, with any cumulative effect recognised as an
adjustment to retained earnings or other components of equity at that date.
These amendments clarify how conditions with which an entity must comply within twelve months
after the reporting period affect the classification of a liability. The amendments also aim to improve
information an entity provides related to liabilities subject to these conditions.
The Group is yet to assess the impact of these amendments on its financial statements.
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3. Basis of measurement
3.1 These consolidated financial statements have been prepared under the historical cost convention except for the
following:
- certain financial instruments, government grant and plan assets of defined benefit gratuity at fair value;
The preparation of consolidated financial statements requires the use of accounting estimates which, by definition,
will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s
accounting policies. Following are the areas that involved a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to the estimates and assumptions turning out to be wrong.
a) Provision for taxation and recognition of deferred tax asset for tax credits and for carried-forward tax losses
- notes 4.3, 11 and 39
b) Employee benefit obligations - notes 4.4 and 10
c) Useful lives and residual values of property, plant and equipment - notes 4.6 and 18.1
d) Fair valuation of biological assets - notes 4.9 and 20
e) Fair value of unquoted fair value through other comprehensive income ('FVOCI') investments - note 4.15 and
21
f) Impairment of financial assets (other than investments in equity instruments) - note 4.15.4
g) Estimate of present value of provisions - notes 4.21 and 12
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Group and that are believed to be
reasonable under the circumstances.
The significant accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, except for the accounting policy adopted as set
out in note 4.7.
a) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity where the Group is exposed to, or has rights to, variable returns from its involvement with
the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group. The
acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a
subsidiary comprises the:
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are,
with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
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Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred, amount of any non-controlling interest in the acquired entity,
and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the
net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as a
bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value, with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains
or losses arising from such remeasurement are recognised in profit or loss.
Intercompany transactions, balances and unrealised gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment
of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Non-controlling interests ('NCI') in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated statement of financial position respectively.
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests
in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognised in a separate reserve within equity attributable to owners of the
Group.
When the Group ceases to consolidate because of a loss of control, any retained interest in the entity is
re-measured to its fair value, with the change in carrying amount recognised in consolidated statement of
profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts
previously recognised in consolidated statement of comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in consolidated statement of comprehensive income are reclassified to
consolidated statement of profit or loss.
4.2 Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in consolidated statement of profit or loss over the period of the borrowings using the effective
interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it
is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee
is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the consolidated statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in consolidated statement of profit or loss as other income or
finance costs.
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Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
4.3 Taxation
Income tax comprises current and deferred tax. Income tax is recognised in the consolidated statement of profit or
loss except to the extent that relates to items recognised directly in consolidated statement of changes in equity or
consolidated statement of comprehensive income, in which case it is recognised directly in equity or consolidated
statement of comprehensive income.
Current
The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to profit for the year
if enacted or substantively enacted at the end of the reporting period in accordance with the prevailing law for
taxation of income, after taking into account tax credits, rebates and exemptions, if any. Management periodically
evaluates position taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that the tax authorities will accept an uncertain tax treatment.
The charge for current tax also includes adjustments, where considered necessary, to provision for tax made in
previous years arising from assessments framed during the year for such years. The Group measures its tax
balances either based on the most likely amount or the expected value, depending on which method provides a
better prediction of the resolution of the uncertainty. Current tax assets and tax liabilities are offset where the Group
has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle
the liability simultaneously.
Deferred
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of
the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences, unused tax losses and tax credits can be utilised. Deferred tax assets and liabilities are offset
where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax
balances relate to the same taxation authority.
Liabilities for wages and salaries, including non-monetary benefits and accumulating annual leaves that are
expected to be settled wholly within twelve months after the end of the period in which the employees render
the related service are recognised in respect of employees’ services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the consolidated statement of financial position.
The Cement segment operates an approved funded defined benefit gratuity plan for all regular
employees having a service period of more than five years for officers and six months for workers.
Provisions are made in the consolidated financial statements to cover obligations on the basis of
actuarial valuations carried out annually. The most recent valuation was carried out as at June 30,
2023 using the "Projected Unit Credit Method".
The actual return on plan assets represents the difference between the fair value of plan assets at the
beginning of the year and as at the end of the year after adjustments for contributions made by the
Group as reduced by benefits paid during the year.
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The amount recognized in consolidated statement of financial position represents the present value of
the defined benefit obligation as reduced by the fair value of the plan assets.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to equity in consolidated statement of comprehensive income in the year in
which they arise. Past service costs are recognized immediately in the consolidated statement of profit
or loss.
The future contribution rate of the plan includes allowances for deficit and surplus. Projected Unit
Credit Method, using the following significant assumptions, is used for valuation of this scheme:
2023 2022
The expected mortality rates assumed are based on the SLIC (2001-2005) mortality table set back one
year.
The Group operates provident funds for all its regular employees. Equal monthly contributions are
made to the funds both by the Group and the employees as follows:
Cement segment: at the rate of 10% of the basic salary for officers and 10% of basic salary plus cost
of living allowance for workers.
Dairy segment: at the rate of 9.5% of the basic salary plus cost of living allowance
The Group has no further payment obligations once the contributions have been paid. Obligation for
contributions to defined contribution plan is recognised as an expense in the consolidated statement
of profit or loss as and when incurred.
The Cement segment provides for accumulating compensated absences, when the employees render
services that increase their entitlement to future compensated absences. Under the service rules,
employees are entitled to 2.5 days leave per month. Unutilised leaves can be accumulated up to 30 days in
case of officers. However, leave policy for officers whose leave balance was already accumulated to 90 days
or above as of July 01, 2019 may keep leaves accumulated up to 90 days. An officer is entitled to encash
the unutilised earned leave accrued during the year. In addition, he can also encash some portion of his
accumulated leave balance during the year. Any further unutilised leaves lapse. The earned leave
encashment is based on basic salaries. In case of workers, unutilised leaves may be accumulated up to 120
days, however, accumulated leave balance above 50 days is encashable upon demand of the worker.
Unutilised leaves can be used at any time by all employees, subject to the approval of the Group's
management.
Provisions are made annually to cover the obligation for accumulating compensated absences based on
actuarial valuation and are charged to the consolidated statement of profit or loss . The most recent
valuation was carried out as at June 30, 2023 using the "Projected Unit Credit Method".
The amount recognised in the consolidated statement of financial position represents the present value of
the defined benefit obligations. Actuarial gains and losses are charged to the consolidated statement of
profit or loss immediately in the period when these occur.
Projected unit credit method, using the following significant assumptions, has been used for valuation of
accumulating compensated absences:
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2023 2022
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at
amortised cost using the effective interest method.
Operating fixed assets except freehold land are stated at cost less accumulated depreciation and any
identified impairment loss. Freehold land is stated at cost less any identified impairment loss. Cost in relation
to certain operating fixed assets signifies historical cost and borrowing costs as referred to in note 4.22.
Depreciation on all operating fixed assets of the Group is charged to the consolidated statement of profit or
loss on the reducing balance method, except for plant and machinery and leasehold land of the Cement and
Paper segments, which are being depreciated using the straight line method, so as to write off the
depreciable amount of such assets over their estimated useful life at annual rates mentioned in note 18.1
after taking into account their residual values.
The assets' residual values and useful lives are reviewed at each financial year end and adjusted if impact
on depreciation is significant. The Group's estimate of the residual value and useful life of its operating fixed
assets as at June 30, 2023 has not required any adjustment as its impact is considered insignificant.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount as fully explained in note 4.10 to these
consolidated financial statements.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item shall flow to the
Group and the cost of the item can be measured reliably. All other repair and maintenance costs are charged
to consolidated statement of profit or loss during the period in which they are incurred.
Proceeds from the sale of items while bringing that asset to the location and condition necessary for it to be
capable of operating in the manner intended by management are not deducted from the cost of an item of
property, plant and equipment. Instead, the Group recognizes the proceeds from selling such items, and the
cost of producing those items, in profit or loss.
The gain or loss on disposal or retirement of an asset represented by the difference between the sale
proceeds and the carrying amount of the asset is recognised as an income or expense.
Major spare parts and stand-by equipment qualify as property, plant and equipment when an entity expects
to use them for more than one year. Transfers are made to operating fixed assets category as and when such
items are available for use.
Capital work-in-progress is stated at cost less any identified impairment loss. All expenditure including
borrowing costs connected with specific assets incurred during installation and construction period are
carried under capital work-in-progress. These are transferred to operating fixed assets as and when these
are available for use.
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4.7 Non-current assets classified as held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and a sale is considered highly probable. They are measured at the
lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets
arising from employee benefits, financial assets that are carried at fair value, and contractual rights under insurance
contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the assets classified as held for sale to
fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of assets
classified as held for sale, but not in excess of any cumulative impairment loss previously recognised. A gain or loss
not previously recognised by the date of the sale of the assets classified as held for sale is recognised at the date
of derecognition.
Non-current assets are not depreciated while they are classified as held for sale. Assets classified as held for sale
are presented separately from the other assets in the statement of financial position.
Expenditure incurred to acquire computer software is capitalised as intangible asset and stated at cost less
accumulated amortisation and any identified impairment loss. Computer software is amortised using the straight
line method over a period of three years.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount (as explained in note 4.10 to these consolidated financial
statements).
Livestock are measured at their fair value less estimated point-of-sale costs. Fair value of livestock is determined by
an independent valuer on the basis of best available estimates for livestock of similar attributes.
Gains or losses arising from changes in fair value less estimated point-of-sale costs of livestock is recognized in the
consolidated statement of profit or loss.
Livestock are categorized as mature or immature. Mature livestock are those that have attained harvestable
specifications. Immature livestock have not yet reached that stage.
Farming cost such as feeding, labour cost, pasture maintenance, veterinary services and sheering are expensed as
incurred. The cost of purchase of cattle plus transportation charges are capitalized as part of biological assets.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an
impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
4.11 Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group.
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The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease, or if that rate cannot be readily
determined, the Group's incremental borrowing rate is used, being the rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
- variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
- the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option, less any
lease incentives receivable.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is
remeasured when there is a change in future lease payments arising from a change in fixed lease payments or an
index or rate, change in the Group's estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option. The corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in the
consolidated statement of profit or loss if the carrying amount of right-of-use asset has been reduced to zero.
The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located,
less any lease incentive received. The right-of-use asset is depreciated on a straight line method over the lease term
as this method most closely reflects the expected pattern of consumption of future economic benefits. The
right-of-use asset is reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
When there is a change in scope of a lease, or the consideration for a lease, that was not part of the original terms
and conditions of the lease, it is accounted for as a lease modification. The lease modification is accounted for as a
separate lease if modification increases the scope of lease by adding the right to use one or more underlying assets
and the consideration for lease increases by an amount that is commensurate with the stand-alone price for the
increase in scope adjusted to reflect the circumstances of the particular contracts, if any. When the lease
modification is not accounted for as a separate lease, the lease liability is remeasured and corresponding
adjustment is made to right-of-use asset.
Payments associated with short-term leases and all leases of low-value assets are recognised on a straight-line
basis as an expense in the consolidated statement of profit or loss. Short-term leases are leases with a lease term
of 12 months or less without a purchase option.
4.12 Investments
Investments intended to be held for less than twelve months from the reporting date or to be sold to raise operating
capital, are included in current assets, all other investments are classified as non-current. Management determines
the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a
regular basis.
Stores, spare parts and loose tools are valued at moving weighted average cost except for items in transit which are
stated at invoice value plus other charges paid thereon till the reporting date. For items which are slow moving
and/or identified as obsolete, adequate provision is made for any excess book value over estimated realizable value.
The Group reviews the carrying amount of stores and spares on a regular basis and provision is made for
obsolescence.
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4.14 Stock-in-trade
Stock of raw materials (except for those in transit), work in process and finished goods are valued principally at the
lower of weighted average cost and net realisable value ('NRV'). Stock of packing material is valued principally at
moving average cost. Cost of work-in-process and finished goods comprises cost of direct materials, labour and
related production overheads (based on normal operating capacity).
Materials in transit are stated at cost comprising invoice value plus other charges paid thereon.
Net realisable value is determined on the basis of estimated selling price of the product in the ordinary course of
business less estimated costs of completion and estimated cost necessary to make the sale.
If the expected net realisable value is lower than the carrying amount, a write-down is recognised for the amount by
which the carrying amount exceeds its net realisable value. Provision is made in the consolidated financial
statements for obsolete and slow moving stock-in-trade based on management estimate.
4.15.1 Classification
The Group classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value [either through other comprehensive income ('OCI') or
through profit or loss]; and
The classification depends on the Group’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For
investments in equity instruments that are not held for trading, this will depend on whether the Group has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income.
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.
Regular way purchases and sales of financial assets are recognised on trade date, being the date on which
the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
4.15.3 Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their
cash flows are solely payments of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the
asset and the cash flow characteristics of the asset. There are three measurement categories into which the
Group classifies its debt instruments:
i) Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows
represent solely payments of principal and interest, are measured at amortised cost. Interest income
from these consolidated financial assets is included in other income using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment
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losses are presented as a separate line item in the consolidated statement of profit or loss.
ii) FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at
FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest income and foreign exchange gains and losses, which are
recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these
consolidated financial assets is included in other income using the effective interest rate method.
Impairment expenses are presented as a separate line item in the consolidated statement of profit or
loss.
iii) FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain
or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss in
the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent
reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in profit or loss as other income when the
Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in the statement of profit or loss.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
The Group assesses on a forward-looking basis the expected credit losses (ECL) associated with its
financial assets. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. For trade debts and contract assets, the Group applies IFRS 9 simplified approach to
measure the expected credit losses (loss allowance) which uses a life time expected loss allowance to be
recognised from initial recognition of the receivables while general 3-stage approach for loans, deposits,
other receivables and bank balances i.e. to measure ECL through loss allowance at an amount equal to
12-month ECL if credit risk on a financial instrument or a group of financial instruments has not increased
significantly since initial recognition.
Following are the financial assets that are subject to the ECL model:
- Trade debts;
- Contract assets;
- Long term loans;
- Long term deposits;
- Loans, deposits and other receivables; and
- Bank balances
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e.
the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability
of default and loss given default is based on historical data adjusted by forward-looking information
(adjusted for factors that are specific to the counterparty, general economic conditions and an assessment
of both the current as well as the forecast direction of conditions at the reporting date, including time value
of money where appropriate). As for the exposure at default for financial assets, this is represented by the
assets’ gross carrying amount at the reporting date.
- reasonable and supportable information that is available at the reporting date about past events, current
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conditions and forecasts of future economic conditions.
The Group recognizes an impairment gain or loss in the consolidated statement of profit or loss for financial
assets with a corresponding adjustment to their carrying amount through a loss allowance account.
The Group writes off financial assets, in whole or in part, when it has exhausted all practical recovery efforts
and has concluded there is no reasonable expectation of recovery. The assessment of no reasonable
expectation of recovery is based on unavailability of debtor’s sources of income or assets to generate
sufficient future cash flows to repay the amount. The Group may write-off financial assets that are still
subject to enforcement activity. Subsequent recoveries of amounts previously written off will result in
impairment gains.
All financial liabilities are recognized at the time when the Group becomes a party to the contractual provisions of
the instrument. Financial liabilities at amortised cost are initially measured at fair value less transaction costs.
Financial liabilities at fair value through profit or loss are initially recognised at fair value and transaction costs are
expensed in profit or loss.
Financial liabilities, other than those at fair value through profit or loss, are subsequently measured at amortised cost
using the effective interest rate method. Gain and losses are recognized in the profit or loss, when the liabilities are
derecognized as well as through effective interest rate amortization process.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired.
Where an existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in respective carrying
amounts is recognized in the consolidated statement of profit or loss.
Financial assets and liabilities are offset and the net amount is reported in the consolidated financial statements only
when there is a legally enforceable right to set off the recognised amount and the Group intends either to settle on
a net basis or to realise the assets and to settle the liabilities simultaneously.
Trade debts are amounts due from customer for goods sold or services performed in ordinary course of business.
Other receivables generally arise from transactions outside the usual operating activities of the Group. Trade debts
and other receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing component in which case such are recognised at fair value. The Group holds the trade
debts with the objective of collecting the contractual cash flows and therefore measures the trade debts
subsequently at amortised cost using the effective interest rate method less loss allowance.
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank overdrafts. Short term borrowings are also included in cash and
cash equivalent if it is repayable on demand and forms an integral part of the Group's cash management. Bank
overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.
Items included in the consolidated financial statements of the Group are measured using the currency of the
primary economic environment in which the Group operates (the functional currency). The financial
statements are presented in Pak Rupees, which is the Group’s functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the
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dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies at
year end exchange rates, are generally recognised in consolidated statement of profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the consolidated statement of
profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the
consolidated statement of profit or loss on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. For example, translation differences on
non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in
consolidated profit or loss as part of the fair value gain or loss, and translation differences on non-monetary
assets such as equities classified as at fair value through other comprehensive income are recognised in
other comprehensive income.
Items included in the consolidated financial statements of the Group are measured using the currency of the
primary economic environment in which the Group operates (the functional currency). The financial
statements are presented in Pak Rupees, which is the Group’s functional and presentation currency.
4.21 Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated.
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a
whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting period. The discount rate used to determine the present value is a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
The increase in the provision due to the passage of time is recognised as interest expense.
General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,
are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale. Qualifying assets are assets that necessarily take a substantial time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in consolidated statement of profit or loss in the period in which they are
incurred.
Revenue is recognised when or as performance obligations are satisfied by transferring control of a promised good
or service to a customer, and control either transfers over time or at a point in time. Revenue is measured at fair
value of the consideration received or receivable, excluding discounts, commissions and government levies.
Revenue is recognised upon satisfaction of performance obligations.
In case of local sales for all segments, except for made-to-order paper products produced by the paper segment,
revenue is recognised at the time of despatch of goods from the factory.
In case of export sales, the delivery of goods and transportation are two distinct performance obligations and the
total transaction price is allocated to each performance obligation. Revenue relating to each performance obligation
is recognized on satisfaction of each distinct performance obligation.
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Finance income comprises interest income on funds invested (financial assets), dividend income, gain on disposal
of financial assets and changes in fair value of investments. Interest income is recognized as it accrues in profit or
loss, using effective interest method. Dividend income is recognized in profit or loss on the date that the Group’s
right to receive payment is established.
Ordinary shares are classified as equity and recognized at their face value. Incremental costs directly attributable to
the issue of new shares are shown in equity as a deduction, net of tax, if any.
4.26 Dividend
Dividend distribution to the members is recognised as a liability in the period in which the dividends are approved.
Segment reporting is based on the operating (business) segments of the Group. An operating segment is a
component of the Group that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of the Group’s other components. An operating
segment’s operating results are reviewed regularly by the Chief Operating Decision Makers (the CODMs) to make
decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available. The CODM, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of the parent company.
Segment results that are reported to the CODMs include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, income tax
assets, liabilities and related income and expenses. Segment capital expenditure is the total cost incurred during the
year to acquire property, plant and equipment.
The business segments are engaged in providing products or services which are subject to risks and rewards which
differ from the risk and rewards of other segments.
The Group’s strategic steering committee, consisting of the Board of Directors of the parent company, examines the
Group’s performance both from a product and geographic perspective and has identified three reportable segments
of its business:
Cement segment: Production and sale of clinker, ordinary portland and sulphate resistant cements.
Paper segment: Manufacture and supply of paper products and packing material.
- there is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Group; or
- there is present obligation that arises from past events but it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be
measured with sufficient reliability.
Contingent liabilities are not recognized. A contingent liability is disclosed unless the possibility of an outflow is
remote.
Contingent asset is disclosed when an inflow of economic benefits is probable. Contingent assets are not
recognised in the financial statements since this may result in recognition of income that may never be realised.
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- A weighted average of all the possible outcomes (the ‘expected value’ method). This is likely to be the most
appropriate method for a large population of similar claims, but can also be applied to a single obligation with
various possible outcomes.
A contract asset is recognised for the Group’s right to consideration in exchange for goods or services that it has
transferred to a customer. If the Group performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, the Group presents the amount as a contract asset,
excluding any amounts presented as a receivable.
A contract liability is recognised for the Group’s obligation to transfer goods or services to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration, or the Group has a right to an amount of consideration that is unconditional (i.e. a receivable), before
the Group transfers a good or service to the customer, the entity shall present the contract as a contract liability
when the payment is made or the payment is due (whichever is earlier).
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate.
All amounts disclosed in the consolidated financial statements and notes have been rounded off to the nearest
thousand Rupees unless otherwise stated.
5.1 137,574,201 (2022: 137,574,201), 428,500 (2022: 228,500) and 6,122,518 (2022: 4,242,155) ordinary shares of the
parent company are held by the following related parties; Nishat Mills Limited, Security General Insurance Company
Limited and Adamjee Life Insurance Company Limited respectively.
Nishat Mills Limited is an Investor and the parent company is an associate of Nishat Mills Limited as per IAS 28,
'Investments in Associates and Joint Ventures'.
5.2 20,000,000 ordinary shares of Rs 10 each were issued to the shareholders of D. G. Khan Electric Company Limited
upon its merger with the parent company on July 01, 1999. These shares were issued as consideration of merger
against all assets, properties, rights, privileges, powers, bank accounts, trade marks, patents, leaves and licenses
of D. G. Khan Electric Company Limited.
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2023 2022
(Rupees in thousand)
6. Other reserves
Capital reserves
Revenue reserve
6.1 This reserve can be utilised by the Group only for the purposes specified in section 81 of the Companies Act, 2017.
6.2 This represents the unrealised gain on remeasurement of equity investments at FVOCI and is not available for
distribution.
6.3 The Capital redemption reserve fund represents fund created for redemption of preference shares. In accordance
with the terms of issue of preference shares, to ensure timely payments, the Group was required to maintain a
redemption fund with respect to preference shares. The Group had created a redemption fund and appropriated Rs
7.4 million each month from the consolidated statement of profit or loss in order to ensure that fund balance at
redemption date was equal to the principal amount of the preference shares. The preference shares were redeemed
during the year ended June 30, 2007.
2023 2022
(Rupees in thousand)
9,763,223 14,566,482
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Number of
Lender 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
Loan 1
Allied Bank Limited - 142,585 Nil Quarterly
Loan 2
Faysal Bank Limited - 143,746 Nil Quarterly
Loan 3
Bank Alfalah Limited - 12,231 Nil Quarterly
Loan 4
Allied Bank Limited - 7,588 Nil Quarterly
Loan 5
National Bank of Pakistan 3,156,276 4,006,676 15 equal quarterly instalments Quarterly
ending in March 2027
Loan 6
Faysal Bank Limited - note 7.1.1 585,778 600,000 14 equal semi-annual instalments Half yearly
of each tranche - note 7.1.1
Loan 7
MCB Islamic Bank Limited 105,000 105,000 32 equal quarterly instalments Quarterly
starting from two years after the
date of respective disbursement.
3,847,054 5,017,826
Such facilities are available at mark-up rates ranging from base rate plus 0.5% to 1.25% (2022: 0.15% to 0.75%)
per annum. The base rate applicable during the year on such facilities is SBP rate ranging from zero to one percent
resulting in coupon rate ranging from 0.50% to 1.7% (2022: 0.50% to 1.7%) per annum.
Loan 1
This represents long term financing facility availed under the State Bank of Pakistan's (SBP) Refinance Scheme for
Payment of Wages and Salaries to the Workers and Employees of Business Concerns ('Refinance Scheme'). The
loan was secured by a first pari passu charge of Rs 767 million over fixed assets of the Cement Segment.
Loan 2
This represents long term financing facility availed under the SBP Refinance Scheme. The loan was secured by first
pari passu charge of Rs 767 million over present and future fixed assets of the Cement Segment (including land &
machinery).
Loan 3
This represents long term financing facility availed under SBP Refinance Scheme. The loan was secured by first pari
passu charge on plant and machinery of the of the Dairy segment with 25% margin.
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Loan 4
This represents long term financing facility availed under the SBP Refinance Scheme. The loan was secured by first
pari passu charge over current assets of the Paper Segment with 25% margin.
Loan 5
This represents long term financing facility availed under the SBP Temporary Economic Refinance Scheme. The
loan is secured by first pari passu charge over present and future fixed assets of the Cement Segment for Rs
6,993.33 million with 25% margin.
Loan 6
This represents long term financing facility availed under the SBP Temporary Economic Refinance Scheme. The
loan is secured by first pari passu charge of Rs 800 million over present and future fixed assets of the Cement
segment (including land and machinery).
Loan 7
This represents long term financing facility availed under the SBP Temporary Economic Refinance Scheme. The
loan is secured by by exclusive hypothecation and pari passu charge over specific plant and machinery of the Dairy
segment with 25% margin.
585,778 600,000
2023 2022
(Rupees in thousand)
Discount on liability:
Balance as at beginning of the year (692,093) (928,300)
Discounting adjustment for recognition at fair value -
deferred government grant - note 8 - (33,194)
Unwinding of discount on liability 221,488 269,401
(470,605) (692,093)
Balance as at end of the year 3,371,441 4,325,733
Current portion shown under current liabilities - note 16 (941,873) (1,184,770)
2,429,568 3,140,963
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Loan 1
The Bank of Punjab - note 7.2.3 200,000 250,000 4 equal semi-annual Half yearly
instalments ending
in December 2024
Loan 2
The Bank of Punjab 1,200,000 1,500,000 8 equal semi-annual Half yearly
instalments ending
in May 2027
Loan 3
The Bank of Punjab
- Islamic - note 7.2.3 900,000 1,000,000 9 equal semi-annual Half yearly
instalments ending
in June 2027
Loan 4
Habib Bank Limited 750,000 1,250,000 3 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 5
Habib Bank Limited 749,941 1,249,902 3 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 6
Bank Alfalah Limited - note 7.2.3 1,000,000 1,250,000 4 equal semi-annual Quarterly
instalments ending
in December 2024
Loan 7
Bank Alfalah Limited 250,000 750,000 2 equal quarterly Quarterly
instalments ending
in November 2023
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Number of
Lender 2023 2022 instalments Mark-up
(Rupees in thousand) Payable
outstanding
Loan 8
Bank Alfalah Limited 1,031,250 1,312,500 11 equal quarterly Quarterly
instalments ending
in December 2025
Loan 9
National Bank of Pakistan 897,000 1,495,000 6 equal quarterly Quarterly
instalments ending
in October 2024
Loan 10
National Bank of - note 7.2.3 600,000 700,000 6 equal semi annual Half yearly
Pakistan - Islamic payments ending
in December 2025
Loan 11
Allied Bank Limited 540,000 720,000 12 equal quarterly Quarterly
instalments ending
in May 2026
Loan 12
Allied Bank Limited 2,288,222 3,595,778 7 equal quarterly Quarterly
instalments ending
in March 2025
Loan 13
Allied Bank Limited 1,166,667 1,833,333 7 equal quarterly Quarterly
instalments ending
in January 2025
Loan 14
The Bank of Punjab 586,693 130,445 20 equal quarterly Quarterly
instalments starting
in June 2024
Loan 15
Allied Bank Limited 900,000 - 20 equal quarterly Quarterly
instalments starting
in March 2024
Loan 16
Meezan Bank Limited 682,491 - 20 equal quarterly Quarterly
instalments starting
in June 2024
Loan 17
Habib Bank Limited 240,000 360,000 4 equal semi annual Half yearly
instalments ending
in February 2025
Loan 18
The Bank of Punjab 83,333 138,887 3 equal semi annual Half yearly
instalments ending
in October 2024
14,065,597 17,535,845
Such facilities are available at mark-up rates ranging from three to six months Karachi Inter-Bank Offered Rate
('KIBOR') plus 0.15% to 0.35% (2022: three to six months KIBOR plus 0.15% to 0.75%) per annum. Markup rate
charged during the year on outstanding balance ranged from 14.69% to 23.22% (2022: 7.54% to 15.88%) per annum.
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7.2.1 Security
Loan 1
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 667 million with
25% margin.
Loan 2
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 2,000 million.
Loan 3
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 1,333 million.
Loan 4
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 3,333 million with
25% margin.
Loan 5
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 3,333 million with
25% margin.
Loan 6
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 3,333 million with
25% margin.
Loan 7
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 2,667 million.
Loan 8
Ranking charge over present and future fixed assets of the Cement Segment for Rs 2,000 million to be
upgraded to first pari passu charge.
Loan 9
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 4,000 million with
25% margin.
Loan 10
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 1,333 million.
Loan 11
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 1,200 million with
25% margin.
Loan 12
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 7,867 million with
25% margin.
Loan 13
First pari passu charge over present and future fixed assets of the Cement Segment for Rs 1,333 million.
Loan 14
Joint pari passu charge of Rs 1,056 million over present and future fixed assets of the Cement Segment.
Loan 15
First pari passu charge over present and future fixed assets of the Cement Segment with 25% margin.
Loan 16
Joint pari passu charge over all present and future plant and machinery of the Cement Segment with 20%
margin.
Loan 17
First pari passu hypothecation charge on present and future fixed assets (plant and machinery) of the Paper
Segment with 25% margin
Loan 18
First pari passu charge over present and future operating fixed assets (plant and machinery) of the Paper
Segment with 25% margin.
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2023 2022
(Rupees in thousand)
7.2.3 This includes one instalment of Rs 593.750 million due on June 30, 2023. The repayments were made
subsequent to the year end due to closure of financial institutions on the last three days of June on account
of Eid Holidays.
This represents deferred grant recognized in respect of the benefit of below-market interest rate on the facilities as referred
to in note 7.1 to these unconsolidated financial statements. The benefit has been measured as the difference between the
fair value of the loan and the proceeds received. The Company used the prevailing market rate of mark-up at the date of
disbursement for similar instruments to calculate fair values of respective loans. The discount rates used range from 7.34%
to 7.76% per annum. The reconciliation of the carrying amount is as follows:
2023 2022
(Rupees in thousand)
These include interest free security deposits from stockists and suppliers and are repayable on cancellation/withdrawal of
the dealership or on cessation of business with the Group. As per the agreements signed with these parties, the Group has
the right to utilise the amounts for the furtherance of their business, hence, the amounts are not required to be kept in a
separate account maintained in a scheduled bank. Therefore, the Group is in compliance with section 217 of the
Companies Act, 2017. These deposits have not been carried at amortised cost since the effect of discounting is immaterial
in the context of these consolidated financial statements.
2023 2022
(Rupees in thousand)
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The amounts recognised in the consolidated statement of financial position are as follows:
2023 2022
(Rupees in thousand)
Present value of defined benefit obligation as at beginning of the year 1,070,156 882,460
Current service cost 102,308 87,770
Interest cost 134,553 85,820
Payments against opening payables (5,638) -
Benefits paid during the year (76,560) (36,694)
Remeasurements:
- Actuarial losses from changes in financial assumptions 5,051 5,035
- Experience adjustments 13,359 45,765
18,410 50,800
Present value of defined benefit obligation as at end of the year 1,243,229 1,070,156
2023 2022
(Rs in '000') Percentage (Rs in '000') Percentage
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Annual Report
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2023 2022
(Rupees in thousand)
10.1.7 The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Discount rate 3.00% 3.25% Decrease by 8.11% 7.88% Increase by 5.63% 6.63%
Salary growth rate 3.00% 3.25% Increase by 5.70% 6.72% Decrease by 8.29% 8.07%
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the
same method (present value of the defined benefit obligation calculated with the projected unit credit
method at the end of the reporting period) has been applied as when calculating the defined benefit liability
recognised in the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
to the prior period.
- Final salary risk (linked to inflation risk) – the risk that the final salary at the time of cessation of service
is greater than what is currently assumed. Since, the benefit is calculated on the final salary (which will
closely reflect inflation and other macroeconomic factors), the benefit amount increases as salary increases.
- Demographic risks
Mortality risk - The risk that the actual mortality experience is different than the assumed mortality. This
effect is more pronounced in schemes where the age and service distribution is on the higher side.
Withdrawal risk - The risk of actual withdrawals experience is different from assumed withdrawal
probability. The significance of the withdrawal risk varies with the age, service and the entitled benefits of the
beneficiary.
- Investment risk – the risk of the investment underperforming and being not sufficient to meet the liabilities.
10.1.9 Expected contribution to the defined benefit plan for the year ending June 30, 2024 is Rs 140.800 million.
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10.1.10 The weighted average duration of the defined benefit obligation is 7 years (2022 – 7 years). The expected
benefit payment for the next 10 years and beyond is as follows:
2023 2022
(Rupees in thousand)
10.2.3 Assumptions used for valuation of the accumulating compensated absences are as under:
2023 2022
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10.2.4 The sensitivity of the accumulating compensated balances to changes in the weighted principal
assumptions is:
Discount rate 3.00% 3.25% Decrease by 7.14% 7.46% Increase by 8.17% 8.58%
Salary growth rate 3.00% 3.25% Increase by 8.08% 8.49% Decrease by 7.17% 7.49%
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the accumulating leave absences to significant actuarial assumptions the
same method (present value of the accumulating compensated absences calculated with the projected unit
credit method at the end of the reporting period) has been applied for valuation of balance of accumulating
compensated absences in the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared
to the prior period.
- Final Salary Risk (linked to inflation risk) - the risk that the final salary at the time of cessation of service
is greater than what we assumed. Since, the benefit is calculated on the final salary (which will closely reflect
inflation and other macroeconomic factors), the benefit amount increases as salary increases.
- Demographic risks
Mortality Risk - The risk that the actual mortality experience is different than the assumed mortality. This
effect is more pronounced in schemes where the age and service distribution is on the higher side.
Withdrawal risk - The risk of actual withdrawals experience is different from assumed withdrawal probability.
The significance of the withdrawal risk varies with the age, service and the entitled benefits of the
beneficiary.
2023 2022
(Rupees in thousand)
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2023 2022
(Rupees in thousand)
The gross movement in net deferred tax liability during the year is as follows:
Deferred tax asset on tax losses and tax credits available for carry forward have been recognized to the extent that the
realisation of related tax benefits is probable from reversal of existing taxable temporary differences and future taxable
profits. Based on the Cement and Dairy segment's approved business plans, it is probable that sufficient taxable profits will
be available for utilization of deferred tax assets. However, the Group has not recognised deferred tax asset in respect of
minimum tax available for carry forward under section 113 of the Income Tax Ordinance, 2001 amounting to Rs 1,423.472
million (2022: Rs 703.646 million) as sufficient taxable profits would not be available to utilise these in the foreseeable future.
These tax credits would expire as follows:
2023 2022
(Rupees in thousand)
12.1 Trade creditors includes amount due to the following related parties:
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12.2 This represents contract liabilities of the Group towards various parties. Revenue recognised in the current year that
was included in the contract liability balance of the Group at the beginning of the year amounts to Rs 1,363.440
million (2022: Rs 639.42 million).
12.3 Includes Gas Infrastructure Development Cess (GIDC) that was levied through GIDC Act, 2015. The Supreme Court
of Pakistan (SCP) through its judgment dated August 13, 2020 has declared GIDC Act, 2015 a valid legislation.
Under the judgement, all gas consumers including the Group were ordered to pay the outstanding GIDC liability as
at July 31, 2020 to the Government of Pakistan in 24 equal monthly instalments. The Group has partially paid GIDC
amounting to Rs 84.5 million. The Group also filed a Suit with the Sindh High Court against collection of GIDC
instalments, before a factual determination of GIDC passed on to end consumers or not is carried out. The Sindh
High Court granted a stay in March 2021 against recovery of GIDC payable from the Group till the finalisation of
matter by the Court. The matter is currently pending in the Sindh High Court. The Group has followed the relevant
accounting standards and guidelines of the Institute of Chartered Accountants of Pakistan (ICAP) in this regard.
2023 2022
(Rupees in thousand)
12.6 Includes payable to employees' provident fund amounting to Rs 0.803 million (2022: Rs 33.288 million).
2023 2022
(Rupees in thousand)
Short term running finances/short term borrowings - note 13.1 22,449,758 11,528,835
Import finances - note 13.2 1,897,265 9,479,359
Export finances - note 13.3 3,578,000 5,162,000
27,925,023 26,170,194
Short term running finances available from various commercial banks under mark-up arrangements aggregate to Rs
44,975 million (2022: Rs 38,375 million). Such facilities are available at mark-up rates ranging from one to three
months KIBOR plus -0.05% to 1.5% per annum (2022: one to three months KIBOR plus 0.05% to 1.5% per annum).
The mark-up rate charged during the year on the outstanding balance ranged from 11.89% to 23.30% (2022: 7.35%
to 15.81%) per annum and mark-up is payable monthly to quarterly. These are secured by joint registered charge
on all present and future current assets of the Group wherever situated including stores and spares, stock in trade,
book debts, investments, receivables.
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Import finance facilities available from various commercial banks under mark-up arrangements aggregate to Rs
19,850 million (2022: Rs 23,020 million). Such facilities are available at mark-up rates ranging from one to six months
KIBOR plus -0.10 % to 0.05% (2022: one to six months KIBOR plus 0.05% to 0.2%) per annum. The mark-up rate
charged during the year on the outstanding balance ranged from 10.64% to 22.96% (2022: 7.39% to 15.18%) per
annum and markup is payable on settlement. The aggregate import finances are secured by a registered charge on
all present and future current assets of the Cement Segment wherever situated including stores and spares, stock
in trade, trade debts, investments and other receivables.
Export finance facilities available from various commercial banks under mark-up arrangements aggregate to Rs
15,250 million (2022: Rs 14,250 million). Such facilities are available at markup rate agreed as per State Bank of
Pakistan plus 0.25% to 1.00% (2022: State Bank of Pakistan agreed rate plus 0.00% to 1.00%) per annum. The
Export Finance Scheme rate has ranged from 2% to 18% throughout the year. These loans are obtained for a period
of 180 days and are secured against joint pari passu hypothecation charge over current assets of the Cement
segment.
Of the aggregate facility of Rs 51,825 million (2022: Rs 40,100 million) for opening letters of credit and Rs 4,850
million (2022: Rs 5,750 million) for guarantees, all being either main limits or sub-limits of the facilities, the amount
utilised as at June 30, 2023 was Rs 26,057 million (2022: Rs 16,216 million) and Rs 2,825 million (2022: Rs 3,309
million) respectively. The facilities for opening letters of credit are secured against lien over import documents
whereas aggregate facilities for guarantees are secured against registered joint pari passu charge over the present
and future current assets of the Group. Of the facility for guarantees, Rs 14.48 million (2022: Rs 14.48 million) is
secured by a lien over bank deposits as referred to in note 30.2.
2023 2022
(Rupees in thousand)
15. This represents unsecured and interest free loans provided by the three directors (including Chief Executive) of Nishat Dairy
(Private) Limited to finance the working capital requirements. The loan amount was fully repaid during the year.
2023 2022
(Rupees in thousand)
17.1 Contingencies
Contingent assets:
17.1.1 The matter relating to interpretation of provisions of section 4(2) of the repealed Central Excise Act, 1944
(1944 Act) has now attained finality after having been adjudicated by the honourable Supreme Court of
Pakistan through its judgment dated 27 January 2009 (upholding its previous judgment dated 15 February
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2007). The longstanding controversy between the Revenue Department and the tax payers related
primarily to finer interpretation of the provisions of section 4(2) of the 1944 Act wherein the department had
a view that excise duty shall be included as a component for determination of the value (retail price) for
levying excise duty. The departmental view, being against the spirit of law, was challenged by the taxpayers
in appeals before the honourable High Courts of Pakistan which, duly appreciating the contentions of the
taxpayers, overturned the departmental view and succeeded the appeals.
Now, since the controversy has attained finality up to the highest appellate level, the Group has initiated
the process of claiming refund of excess excise duty paid by it during the periods from 1994 to 1999 which
aggregates Rs 1,115.145 million. The amount of refund, however, shall be incorporated in the books of
account once it is realized by the Group.
17.1.2 The Income Tax Officer, while framing the assessments for the assessment years 1984-85 to 1990-91, has
taxed the income of the Group on account of the interest on the deposits and sale of scrap etc. The
Appellate Tribunal on appeal filed by the Group issued an order in favour of the Group for the assessment
years 1984-85 to 1990-91. The Income Tax Department filed reference before the Lahore High Court.
Pending final outcome of such reference, no adjustment has been made in these consolidated financial
statements for the relief granted by the Appellate Tribunal aggregating Rs 35.090 million.
Contingent liabilities:
17.1.3 During the period 1994 to 1996, the Group imported plant and machinery relating to expansion unit, for
which exemption was claimed under various SROs from the levy of custom duty and other duties including
sales tax. As per the provisions of SRO 484(I)/92, 978(I)/95 and 569(I)/95, the exemption from the statutory
duty would be available only if the said plant and machinery was not manufactured locally. However, the
Custom Authorities rejected the claim of the Group by arguing that the said machinery was on the list of
locally manufactured machinery, published by the Federal Board of Revenue. Consequently, the Group
appealed before the Lahore High Court, Multan Bench, which allowed the Group to release the machinery
on furnishing indemnity bonds with the Custom Authorities.
Collector of Customs and Central Excise, Multan, passed an order dated November 26, 1999, against the
Group on the grounds that the said machinery was being manufactured locally during the time when it was
imported.
After various appeals at different forums, the honourable Supreme Court of Pakistan remanded the case
back to the Customs Authorities to reassess the liability of the Group. The custom authorities
re-determined the liability of the Group upon which the Group preferred an appeal to the Customs
Appellate Tribunal. The Tribunal decided the case in favour of the Group, upon which the Group
discharged all liabilities. However, the custom authorities preferred a reference to the Lahore High Court,
Multan Bench on November 19, 2013. Last hearing of the case was conducted on June 25, 2018. In case
of any adverse decision, the management assesses liability to the tune of Rs 233.390 million. No provision
for this amount has been made in the financial statements as according to the management of the Group,
there are meritorious grounds that the ultimate decision would be in its favour.
17.1.4 The Competition Commission of Pakistan ('the CCP') took suo moto action under Competition Ordinance,
2007 and issued Show Cause Notice on October 28, 2008 for increase in prices of cement across the
country. The similar notices were also issued to All Pakistan Cement Manufacturers Association ('APCMA')
and its member cement manufacturers. The Group filed a writ petition in the Lahore High Court. The Lahore
High Court, vide its order dated August 24, 2009 allowed the CCP to issue its final order. The CCP
accordingly passed an order on August 28, 2009 and imposed a penalty of Rs 933 million on the Group.
The Lahore High Court vide its order dated August 31, 2009 restrained the CCP from enforcing its order
against the Group for the time being.
The vires of the Competition Commission of Pakistan have been challenged by a large number of
petitioners and all have been advised by their legal counsels that prima facie the Competition Ordinance,
2007 is ultra vires of the Constitution of Pakistan. The Honourable Supreme Court of Pakistan sent the
appeals of the petitioners to newly formed Competition Appellate Tribunal ('CAT') to decide the matter. The
Group has challenged sections 42, 43 and 44 of the Competition Act, 2010 in the Sindh High Court. The
Honourable Sindh High Court upon petition filed by large number of petitioners gave direction to CAT to
continue with the proceedings and not to pass a final order till the time petition is pending in Sindh High
Court. No provision for this amount has been made in the financial statements as according to the
management of the Group, there are meritorious grounds that the ultimate decision would be in its favour.
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17.1.5 The Group, consequent to the order-in-appeal passed by the learned Customs, Federal Excise and Sales
Tax Appellate Tribunal, Lahore, filed a petition before the Lahore High Court on March 27, 2008, challenging
the levy of sales tax on the in-house consumption of Shale, Gypsum and Limestone for the period from
June 13, 1997 to August 11, 1998. Last hearing of the case was conducted on December 17, 2015.
According to the legal counsel of the Group, chances of favourable outcome of the petition are fair,
therefore the payable amount has not been incorporated in these consolidated financial statements
amounting to Rs 212.239 million.
17.1.6 On August 31, 2021, the Lahore High Court has granted interim relief to the Group in respect of a writ
petition filed by the Group to challenge a showcause notice issued by the Deputy Commissioner Inland
Revenue (DCIR) dated July 02, 2021, whereby, it was alleged that the Group had claimed inadmissible
input tax for the periods from July 2018 to December 2020 aggregating Rs 1,384.644 million primarily
related to construction/building material.
During the year, the Lahore High Court through its order dated March 31, 2023, directed the DCIR to
constitute a team of qualified/experts to attain an on-site/physical verification, clarifying the fact that
whether the items on which input tax claimed by the Group has been done as per provisions of Sales Tax
Act, 1990 or not. The said team will visit the manufacturing premises of the Group in order to verify each
and every invoice to conclude whether the goods thereunder have been used for the purpose of taxable
activity of making taxable supply. After completion of the said exercise, the matter will be finally decided
by the Lahore High Court.
As per management, meritorious grounds exist to support the position that the ultimate decision would be
in its favour wherein such claim of input tax would be allowed to the Group. Therefore, such credit of input
sales tax has not been reversed in these consolidated financial statements. However, in case of an adverse
decision, such input sales tax shall be reversed and will become part of the cost of the related fixed assets
that would result in increase in depreciation charge of such fixed assets over their remaining useful lives.
Consequently, no provision has been made in these consolidated financial statements on this account.
17.1.7 The DCIR passed an order dated August 20, 2021 for tax periods July 2017 to June 2018, whereby, a
demand was raised for recovery of sales tax of Rs 5,795.981 million, including applicable default surcharge
and penalty (amounting to Rs 275.999 million) imposed under sections 34 and 33(5) of the Sales Tax Act,
1990 respectively. The demand was raised mainly on account of alleged suppression of production and
sales of cement and disallowance of input sales tax on various goods and services (including that related
to fixed assets and building materials).
Further for these tax periods, a Federal Excise Duty (‘FED’) demand of Rs 2,884.751 million, along with
applicable default surcharge and penalty was also raised by the DCIR on November 30, 2021 under
relevant provisions of the Federal Excise Act, 2005 solely on account of alleged suppression of production
and sales of cement on bases identical to those framed through order dated August 20, 2021.
The Group had preferred appeal before the Commissioner Inland Revene (Appeals) ('CIR(A)') against the
said orders, whereby CIR(A) through order dated March 29, 2022 decision has been made in the Group's
favour as the matter has been remanded back to learned DCIR to adjudicate the matter afresh. The
department has, however, appealed against this decision before the ATIR.
The management, on the basis of consultation with its legal counsel and the favorable decision of the
CIR(A), considers that meritorious grounds exist to defend the Group’s stance and that such sales tax &
FED demands are not likely to sustain appellate review by appellate authorities. Consequently, no provision
has been created in these consolidated financial statements on this account.
17.1.8 The Group filed an appeal before the Commissioner Inland Revenue CIR(A), against the amended
assessment order passed by the Deputy Commissioner Inland Revenue (DCIR) under section
122(9)/122(5A) of the Income Tax Ordinance, 2001 for the tax year 2011. The DCIR through the order made
additions under section 21 thereby reducing the declared loss of tax year 2011 by Rs 56.19 million. Further,
the amount of refund was reduced by Rs 2.05 million through levy of Workers Welfare Fund. The CIR(A)
upheld the additions of Rs 55.63 million as valid against which the Group filed an appeal before the
Appellate Tribunal Inland Revenue which is pending adjudication. The management, based on the advice
of its legal counsel, is confident that there are strong arguments and the matter will be decided in its favor
and no financial obligation is expected to accrue. Consequently, no provision been made in these
consolidated financial statements.
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17.1.9 Commissioner Inland Revenue amended the assessments made for tax years 2016 and 2017 through
order passed under section 122 (5A) of the Income Tax Ordinance, 2001 and disallowed the adjustments
on account of brought forward 'minimum' taxes of Rs 72.653 million and Rs 44.850 million claimed under
section 113 and 113C of the Income Tax Ordinance, 2001 against normal tax liabilities pertaining to tax
year 2016 and 2017 respectively.
The Group preferred an appeal before the CIR(A) against the order. CIR(A) accepted the appeals and
allowed tax credits in respect of minimum taxes subject to due verification by the department.
Commissioner Inland Revenue preferred an appeal before the Appellate Tribunal Inland Revenue which is
pending adjudication. Management, on the basis of legal advice from its consultant believes that there are
reasonable arguments that the decision would be in favour of the Group and accordingly, no provision has
been made in these consolidated financial statements.
17.1.10 Assistant / Deputy Commissioner Inland Revenue (ADCIR) through an order dated July 11, 2023 under
section 170(3) of the Income Tax Ordinance, 2001, has issued the refund for adjustment against the
advance tax liability for the tax year 2024 to the extent of Rs 62.370 million with the remaining refund of Rs
95.180 million was not allowed on account of disallowance of the adjustment of the minimum tax brought
forward under section 113(2)(c) of the Income Tax Ordinance, 2001 for the tax year 2018 and
non-verification of tax payments / want of relevant documentary evidence. The Group is in process of
preferring an appeal before the CIR(A). Management, on the basis of legal advice from its consultants
believes that there are reasonable arguments that the decision would be in favour of the Group and
accordingly, no provision has been made in these consolidated financial statements.
17.1.11 The banks have issued the following guarantees on Group's behalf in favour of:
- Collector of Customs, Excise and Sales Tax against levy of sales tax, custom duty and excise amounting
to Rs 30.538 million (2022: Rs 30.538 million).
- Director, Excise Collection Office, Sindh Development and Maintenance against recovery of infrastructure
fee amounting to Rs 1,177.900 million (2022: Rs 1,287.900 million).
- The President of the Islamic Republic of Pakistan against the performance of a contract to Frontier Works
Organization amounting to Rs 0.5 million (2022: Rs 0.5 million).
- Sui Northern Gas Pipelines Limited against supply of 6 MMCFD and 14 MMCFD gas for captive use at
plants at Khairpur and at D.G. Khan respectively amounting to Rs 544.414 million (2022: Rs 544.414
million).
- Sindh High Court against levy of sales tax, custom duty and excise amounting to Rs 228.174 million
(2022: Rs 176.860 million).
- Pakistan Railways against supply of cement amounting to Rs 5.906 million (2022: Rs 7.075 million).
- Director, Excise and Taxation, Karachi under direction of Sindh High Court in respect of suit filed for levy
of infrastructure cess amounting to Rs 26 million (2022: Rs 22 million).
- Metro Habib Cash and Carry against purchase of goods and supplies on credit amounting to Rs 2 million
(2022: Rs 2 million).
- Sui Northern Gas Pipelines Limited against connection of gas supply for Sukheki Farm amounting to Rs
26.6 million (2022: Rs 26.6 million).
- Directorate General of Customs Valuation, Custom House Karachi on account of valuation ruling
amounting to Rs 21.770 million (2022: Rs 22.650 million).
- The Director Excise and Taxation Karachi on account of infrastructure development cess amounting to Rs
177.420 million (2022: Rs 136.920 million).
17.1.12 The Group has provided a guarantee to Meezan Bank Limited (MBL) against the loan provided by MBL to
Hyundai Nishat Motor (Private) Limited, a related party, amounting to Rs 1,238.471 million (2022: Rs
1,262.243 million).
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17.1.13 The Group has issued a post dated cheque in favour of Nazir of the High Court of Sindh amounting to Rs
227.760 million (2022: Rs 227.760 million) against the Industrial Support Package Adjustment on K-Electric
electricity bills.
(i) Contracts for capital expenditure Rs 520.310 million (2022: Rs 191.251 million).
(ii) Letters of credit for capital expenditure Rs 93.980 million (2022: Rs 1,254.466 million).
(iii) Letters of credit other than capital expenditure Rs 1,246.104 million (2022: Rs 3,037.820 million).
(iv) The amount of future payments under leases and the period in which these payments will become due are
as follows:
2023 2022
(Rupees in thousand)
258
18.1 Operating fixed assets
(16,305)
- Office building and housing colony 5 3,999,199 58,452 - 4,057,651 1,117,019 151,436 - 1,268,455 2,789,196
Plant and machinery 3 to 9 81,505,530 1,487,306 (322,708) 82,669,936 25,013,565 2,353,848 (150,070) 27,217,343 55,452,593
(192)
(92,258) (83,395)
Furniture, fixture and office equipment 10 to 30 1,137,064 62,249 - 1,136,344 788,114.00 46,822 - 776,666 359,678
(62,969) (58,270)
(27,952) (15,348)
Power and water supply lines 10 4,177,077 20,877 - 4,197,954 1,591,889.00 256,858 - 1,848,747 2,349,207
(199,676) (157,013)
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259
2023
2023 (Rupees in thousand)
Annual Accumulated Depreciation Reclassification Accumulated
Cost as Reclassification Book value
rate of Additions / Cost as at depreciation charge/ to assets depreciation
at to assets as at June
depreciation (deletions) June 30, 2023 as at July (deletions) held for as at June
July 01, 2022 held for sale 30, 2023
% 01, 2022 for the year
260
sale 30, 2023
2023
leasehold land
- Office building and housing colony 5 3,617,946 381,253 - 3,999,199 974,946 142,073 - 1,117,019 2,882,180
Plant and machinery 3 to 9 74,677,616 6,827,914 - 81,505,530 22,712,515 2,301,050 - 25,013,565 56,491,965
Furniture, fixture and office equipment 10 to 30 1,074,605 62,652 - 1,137,064 679,110 109,016 - 788,114 348,950
(193) (12)
(75,338) (49,520)
Power and water supply lines 10 4,107,766 69,311 - 4,177,077 1,319,343 272,546 - 1,591,889 2,585,188
(75,531) (49,532)
18.1.1 Freehold land and building include book values of Rs 12 million (2022: Rs 12 million) and Rs 4.252 million (2022: Rs 4.475 million) respectively which are held in the name of Chief
Executive. This property is located in the locality of Defence Housing Authority, Lahore, where the bye-laws restrict transfer of title of the residential property in the name of the Group.
18.1.2 Following are the particulars of the Group’s immovable fixed assets:
2023 2022
Cement segment Location Usage of immovable property Total Area (in Acres)
Hub, Mauza Chichai, Balochistan Plant site and staff colony 1462.5 1467.5
Khairpur district, Chakwal, Punjab Plant site and staff colony 901.5 901.5
Kanrach Nai, District Lasbela,
Balochistan Source of raw material 723.14 723.14
Dera Ghazi Khan, Punjab Plant site and staff colony 590 590
Lakho Dair, Lahore, Punjab Processing site 44 44
Gulberg, Lahore, Punjab Administrative offices 1.5 1.5
Others Sales offices 0.28 0.28
2023 2022
(Rupees in thousand)
18.1.3 The depreciation charge for the year has been allocated as follows:
18.1.4 Book values of operating fixed assets consist of the following with respect to operating segments:
Plant and machinery 53,949,008 54,714,203 1,131,921 1,363,704 413,131 414,058 55,494,060 56,491,965
All other assets 26,090,237 27,219,825 172,602 192,931 1,477,735 1,487,801 27,740,574 28,900,557
261
Total 80,039,245 81,934,028 1,304,523 1,556,635 1,890,866 1,901,859 83,234,634 85,392,522
2023
18.1.5 Sale of operating fixed assets
Detail of operating fixed assets sold during the year is as follows:
2023 (Rupees in thousand)
262
2023
Related party
Security General Insurance Company Limited 7,610 3,452 7,552 4,100 Insurance claim
Employees
Ijaz Khalid 1,851 688 688 - As per Group Policy
Muhammad Amin 2,096 738 738 - -do-
Abid Naseer 1,847 601 601 - -do-
Related party
Security General Insurance Company Limited 3,323 1,106 3,288 2,182 Insurance claim
18.2 Capital work-in-progress
Advances to suppliers
and contractors 64,163 164,803 - - (125,138) (12,234) - 91,594
Plant and machinery 5,866,231 584,543 59,578 554 152,220 (6,303,956) (28,534) 330,636
Advances to suppliers
and contractors 84,336 132,047 - - (152,220) - - 64,163
263
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2023 2022
(Rupees in thousand)
18.4 All operating fixed assets of Cement and Paper segments are pledged as security against long term finances as
referred to in note 7.
2023 2022
(Rupees in thousand)
COST
Balance as at July 01 21,500 -
Additions during the year - 21,500
Balance as at June 30 21,500 21,500
AMORTIZATION
Balance as at July 01 4,181 -
Charge for the year - note 34 7,166 4,181
Balance as at June 30 11,347 4,181
20.2 As at June 30, 2023, the Group held 3,535 (2022: 3,270) mature assets able to produce milk and 3,319 (2022: 3,086)
immature assets that are being raised to produce milk in the future. During the year, 2,678 (2022: 2,054) cows were
sold. During the year, the Group produced approximately 36.53 million (2022: 31.65 million) gross litres of milk from
these biological assets. As at June 30, 2023, the Group also held 50 (2022: 25) immature male calves.
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20.3 The valuation of dairy livestock as at June 30, 2023 has been carried out by an independent valuer. In this regard
the valuer examined the physical condition of the livestock, assessed the key assumptions and estimates and relied
on the representations made by the Group as at June 30, 2023. Further, market and replacement values of similar
livestock from active markets in Pakistan have been used as basis of valuation model by the independent valuer.
The milking animals have been classified according to their lactations. As the number of lactations increase, the fair
value keeps on decreasing.
2023 2022
(Rupees in thousand)
21. Investments
FVOCI - quoted:
FVOCI - unquoted:
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21.1.1 This represents investment in the ordinary shares of Nishat Hotels and Properties Limited ('NHPL') which
is principally engaged in establishing and managing a multi-purpose facility including a shopping mall,
hotel and banquet halls in Johar Town, Lahore, by the name of 'Nishat Emporium'. Since NHPL's ordinary
shares are not listed, an independent valuer engaged by the Group has estimated a fair value of Rs 19.16
per ordinary share as at June 30, 2023 (2022: Rs 18.44 per share) through a valuation technique based on
discounted cash flow analysis of NHPL. Hence, it has been classified under level 3 of fair value hierarchy
as further explained in note 48.3 to these financial statements. The fair value gain of Rs 75.300 million
recognised during the year is included in other comprehensive income.
The main level 3 inputs used by the Group are derived and evaluated as follows:
- Discount rate is determined using a capital asset pricing model to calculate a post-tax rate that reflects
current market assessments of the time value of money and the risk specific to NHPL.
- Long term growth rate is estimated based on historical performance of NHPL and current market
information for similar type of entities.
- Long term growth rate of 2% per annum for computation of terminal value.
- Annual growth in costs is linked to inflation with a range of 6.50% to 25.60% per annum.
Sensitivity analysis
Sensitivity analysis of the significant assumptions used in the valuation technique are as follows:
If the discount rate increases by 1% with all other variables held constant, the impact on fair value as at
June 30, 2023 would be Rs 209.375 million lower.
If the long term growth rate decreases by 1% with all other variables held constant, the impact on fair value
as at June 30, 2023 would be Rs 71.875 million lower.
If inflation decreases by 1% with all other variables held constant, the impact on fair value as at June 30,
2023 would be Rs 21.875 million higher.
If interest rate increases by 1% with all other variables held constant, the impact on fair value as at June
30, 2023 would be Rs 15.625 million lower.
21.1.2 This represents investment in the ordinary shares of Hyundai Nishat Motor (Private) Limited ('HNMPL') that
has setup up a greenfield project for assembly and sales of Hyundai Motor Company passenger and
commercial vehicles. During the year, the Group under right issue acquired further equity shares of HNMPL
amounting to Rs 1,007.500 million (fully paid shares of Rs 10 each). Since HNMPL's ordinary shares are
not listed, an independent valuer engaged by the Group has estimated a fair value of Rs 19.67 per ordinary
share as at June 30, 2023 (2022: Rs 25.15 per share) through a valuation technique based on discounted
cash flow analysis of HNMPL. Hence, it has been classified under level 3 of fair value hierarchy as further
explained in note 48.3 to these financial statements. The fair value gain of Rs 453.612 million recognised
during the year is included in other comprehensive income.
The main level 3 inputs used by the Group are derived and evaluated as follows:
- Discount rate is determined using a capital asset pricing model to calculate a post-tax rate that reflects
current market assessments of the time value of money and the risk specific to HNMPL.
- Long term growth rate is estimated based on historical performance of HNMPL and current market
information for similar type of entities.
- Long term growth rate of 2% per annum for computation of terminal value.
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- Annual growth in costs are linked to inflation and currency devaluation at 15% per annum and revenues
are linked to currency devaluation at 15% per annum.
Sensitivity analysis
Sensitivity analysis of the significant assumptions used in the valuation technique are as follows:
If the discount rate increases by 1% with all other variables held constant, the impact on fair value as at
June 30, 2023 would be Rs 191.977 million lower.
If the long term growth rate decreases by 1% with all other variables held constant, the impact on fair value
as at June 30, 2023 would be Rs 77.093 million lower.
If inflation decreases by 1% with all other variables held constant, the impact on fair value as at June 30,
2023 would be Rs 317.710 million higher.
If interest rate increases by 1% with all other variables held constant, the impact on fair value as at June
30, 2023 would be Rs 30.499 million lower.
2023 2022
(Rupees in thousand)
21.2 Others
FVOCI - quoted:
168,693 79,718
23.2.1 This includes 100.75 million shares acquired against right issue of HNMPL at a par value of Rs 10 per
ordinary share.
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21.3.2 Pursuant to the Scheme of Compromises, Arrangement and Reconstruction (Under Sections 279 to 283
and 285 of the Companies Act, 2017) amongst Nishat (Chunian) Limited and its members and Nishat
Chunian Properties (Private) Limited and its members duly sanctioned by Honorable Lahore High Court,
Lahore, the Group on, 18 August 2022, received 5,683,067 ordinary shares of Nishat Chunian Power
Limited as one of the principal objects of the Scheme was to make Nishat (Chunian) Limited and Nishat
Chunian Power Limited totally independent of each other by the transfer amongst the members of Nishat
(Chunian) Limited of 187,585,820 ordinary shares of Nishat Chunian Power Limited owned by Nishat
(Chunian) Limited. Hence, the Group has also become a shareholder of Nishat Chunian Power Limited with
effect from August 18, 2022.
21.4 3,860,267 (2021: 3,860,267) shares of MCB Bank Limited are blocked in Central Depository Company ('CDC')
account.
2023 2022
(Rupees in thousand)
This represents interest free loans given to employees, receivable in monthly instalments in accordance with the Group's
policy. These loans are secured against the accumulated provident fund balance of the relevant employee. These loans
have not been carried at amortised cost as the effect of discounting is not considered material. The total balance includes
amounts due from executives of Rs 8.23 million (2022: Rs 13.23 million).
2023 2022
(Rupees in thousand)
24.1 Stores and spare parts include items which may result in fixed capital expenditure but are not distinguishable.
2023 2022
(Rupees in thousand)
25. Stock-in-trade
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Annual Report
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2023 2022
(Rupees in thousand)
26.1.1 The maximum aggregate amount outstanding at the end of any month during the year was Rs 44.763
million (2022: Rs 19.013 million). The aging analysis of trade debts from related parties that are past due
and carry loss allowance is as follows:
2023 2022
(Rupees in thousand)
27. This represents the Group's right to consideration for work completed but not billed at the reporting date on made to order
paper products. The contract assets are transferred to receivables when the rights become unconditional. This usually
occurs when the Group issues an invoice to the customer.
2023 2022
(Rupees in thousand)
28. Investments
FVOCI - quoted:
Related parties - note 28.1 9,270,898 9,962,421
At FVPL
Others 15 19
- note 28.2 9,270,913 9,962,440
At Amortized Cost
Term deposit certificates - note 28.3 13,000 4,000
9,283,913 9,966,440
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2023 Annual Report
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2023 2022
(Rupees in thousand)
28.3 This represents term deposit receipts having maturity of three months from the date of purchase. These bear
markup at the rates of 16.25% to 19.75% (2022: 6.2% to 8.25%) per annum.
2023 2022
(Rupees in thousand)
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Annual Report
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2023 2022
(Rupees in thousand)
29.1.1 The maximum aggregate amount outstanding at the end of any month during the year was Rs 6.686 million
(2022: Rs 3.331 million). The balances have an age of upto 90 days.
29.2 Sales tax recoverable includes amounts which have been recovered by the sales tax department against
miscellaneous demands raised by it. The Group has filed appeals against the demands at different forums as
referred to in note 17.
29.3 The vires of section 8(h) and (i) of the Sales Tax Act, 1990 (the “Sales Tax Act”), in the context of disallowance of
adjustment of input tax on goods used for taxable services, was called in question by the Group. The honourable
Lahore High Court vide its order dated January 29, 2020 on the basis of its reading of sections 7 and 8 of the Sales
Tax Act, observed that input tax paid on goods can be deducted or reclaimed, only if such goods are used for the
purpose of taxable supplies. Thus, in light of the said observation, the case was disposed of with a direction to the
tax authorities to determine each and every case on its merits and allow adjustment of input tax on goods used for
taxable supplies. Management is confident that the input tax already claimed shall not be disallowed by the relevant
tax authorities.
29.4 Includes a receivable of Rs 5.793 million (2022: Rs 6.160 million) from Hyundai Nishat Motor (Private) Limited, being
a related party of the Group. The maximum aggregate amount outstanding at the end of any month during the year
of Hyundai Nishat Motor (Private) Limited was Rs 5.793 million (2022: Rs 6.160 million). This amount is neither past
due nor impaired.
2023 2022
(Rupees in thousand)
At banks:
Saving accounts:
- Local currency - notes 30.1, 30.2 & 30.3 275,197 91,840
- Foreign currency: US$ 1,481,054 (2022: US$ 1,277,401) 423,567 261,671
Current accounts:
- Local currency 353,172 75,122
- Foreign currency: US$ 547,892 (2022: Nil) 132,969 -
1,184,905 428,633
In hand 14,955 2,525
1,199,860 431,158
30.1 The balances in saving accounts bear mark-up at rates ranging from 11.5% to 19.5% (2022: 5.5% to 12.25%) per
annum.
30.2 Included in balances at banks on saving accounts are Rs 14.480 million (2022: Rs 14.480 million) which are under
lien to secure bank guarantees referred to in note 13.4.
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30.3 Included in balances at banks in saving accounts is Rs 0.004 million (2022: Rs 0.004 million) which relates to unpaid
dividend held by the Group.
In February 2023, management committed to a plan to sell one of Paper segment's production line. Accordingly, that asset
is presented as asset held for sale in accordance with IFRS-5 'Non-current Assets Held for Sale and Discontinued
Operations'. Efforts to sell the asset have started and sale of asset is expected within one year.
At June 30, 2023, the assets held for sale were stated at carrying amount being lower than the fair value less cost to sell.
2023 2022
(Rupees in thousand)
32. Revenue
32.1 This includes unbilled revenue amounting to Rs 67.400 million (2022: Rs 24.360 million).
32.2 It includes rebate and incentive on exports amounting to Rs 3.67 million (2022: Rs 7.53 million) and Rs 20.197 million
(2022: Nil) respectively. Incentive is received due to early shipment made under the contract.
32.3 Represents freight cost incurred upon shipping goods to export customers under cost and freight terms in the
capacity of agent.
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2023 2022
(Rupees in thousand)
273
2023 Annual Report
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33.1 Salaries, wages and other benefits include Rs 112.288 million (2022: Rs 102.692 million), in respect of provident
fund contribution by the Group. Further, the provision for gratuity and accumulating compensated absences
included in the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 81,195 69,870
Interest cost for the year 106,786 68,318
Interest income on plan assets (56,933) (40,959)
131,048 97,229
Accumulating compensated absences
Current service cost 48,810 46,206
Interest cost for the year 15,429 10,816
Remeasurements 212 2,670
64,451 59,692
33.2 This represents royalty to Governments of Punjab and Balochistan for extraction of raw materials as per relevant
laws.
33.3 This includes rentals of heavy machinery used at quarry site where raw materials i.e. clay and limestone, are
extracted.
2023 2022
(Rupees in thousand)
34.1 Salaries, wages and other benefits include Rs 16.716 million (2022: Rs 15.442 million) in respect of provident fund
contribution by the Group. Further, the provision for gratuity and accumulating compensated absences included in
the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 12,720 10,782
Interest cost for the year 16,729 10,542
Interest income on plan assets (8,919) (6,320)
20,530 15,004
Accumulating compensated absences
Current service cost 7,551 7,053
Interest cost for the year 2,387 1,651
Remeasurements 33 408
9,971 9,112
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Annual Report
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2023 2022
(Rupees in thousand)
35.1 Salaries, wages and other benefits include Rs 11.244 million (2022: Rs 10.142 million) in respect of provident fund
contribution by the Group. Further, the provision for gratuity and accumulating compensated absences included in
the above is as follows:
2023 2022
(Rupees in thousand)
Gratuity
Current service cost 8,393 7,118
Interest cost for the year 11,038 6,960
Interest income on plan assets (5,885) (4,173)
13,546 9,905
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2023 Annual Report
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2023 2022
(Rupees in thousand)
36.1 Represents donation made to Pakistan Agricultural Coalition. None of the directors or their spouses have any
interest in the donee.
2023 2022
(Rupees in thousand)
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38.1 Included in this is the finance cost on ITERF and Islamic re-finance facilities for payment of salaries and wages,
which has been set off against the amount of unwinding of grant as referred in note 8.
2023 2022
(Rupees in thousand)
39. Taxation
Current
- For the year 1,709,877 1,586,868
- Prior years 23,680 9,712
1,733,557 1,596,580
Deferred - note 11 5,457,582 1,822,333
7,191,139 3,418,913
2023 2022
% %
- Amounts that are not deductible for tax purposes - net 0.68 0.49
- Change in prior years' tax (2.17) (1.19)
- Change in tax rate 2.29 1.36
- Effect of Super tax 65.87 26.50
- Income not subject to tax (1.30) -
- Income chargeable under final tax regime (9.16) (4.25)
- Previously recognized deferred tax asset charged off 36.27 8.94
- Change in allocation ratio of temporary differences among
Normal Tax Regime and Final Tax Regime - (11.21)
- Recognition of deferred tax on temporary differences related to
exports revenue stream that is to be taxed under Normal Tax Regime 66.70 -
- Deferred tax recognised on depreciation losses - 0.04
- Permanent differences 0.37 0.27
- Deferred tax asset not recognised on minimum tax available
for carry forward - 0.32
- Others (0.02) -
159.53 21.27
Average effective tax rate 188.53 50.27
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There is no dilution effect on the basic earnings per share as the Group has no such commitments.
2023 2022
(Rupees in thousand)
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43. Transactions with related parties
The related parties include the Investor, related parties on the basis of common directorship, group companies, key
management personnel including directors, other related parties and post employment benefit plans. Key management
personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
Group, directly or indirectly, including any director (whether executive or otherwise). The Group in the normal course of
business carries out transactions with various related parties. Amounts due from and to related parties are shown under
receivables and payables. Related party transactions carried out during the year are as follows:
2023 2022
(Rupees in thousand)
ii. Other related parties Sale of goods and services 633,141 461,072
Insurance premium 247,443 204,495
Purchase of goods and services 388,921 268,041
Insurance claims received 45,976 73,062
Rental income 1,946 -
Dividend paid 37,244 35,189
Dividend income 2,451,369 2,281,977
Initial gain on shares received
as a result of merger scheme 102,408 -
Purchase of shares 1,007,500 -
Purchase of fixed assets 3,938 2,664
Reimbursement of expenses 84,280 31,801
43.1 This represents remuneration of the Chief Executive, executive director and certain executives that are included in
the remuneration disclosed in note 44 to these consolidated financial statements.
43.2 Transactions with related parties have been carried out on mutually agreed terms and conditions. The related parties
with whom the Group had entered into transactions or had arrangements/agreements in place during the year have
been disclosed below along with their basis of relationship:
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280
44. Remuneration of Chief Executive, Directors and Executives
44.1 The aggregate amounts charged in the consolidated financial statements for the year for remuneration, including certain benefits, to the Chief Executive, Executive Director and
Executives are as follows:
(Rupees in thousand)
Chief Executive Executive Director Executives
2023 2022 2023 2022 2023 2022
Contributions to Provident
and Gratuity Fund - - 4,505 4,095 106,671 94,914
78,990 57,214 36,634 30,292 1,416,655 1,329,204
44.2 The Group also provides the Chief Executive, certain directors and executives with company maintained cars, travelling and utilities. Certain executives are provided with housing
facilities.
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44.3 During the year, the Group paid meeting fee amounting to Rs 1.140 million (2022: Rs 0.910 million) to its non-executive directors. The number of non-executive directors is 5
281
(2022: 5).
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Cement segment:
Paper segment:
Dairy segment:
Milk-litres
-[100,000 litres per day] - note 45.3 40,150,000 36,500,000 36,529,439 31,650,987
45.1 Plant capacity is based on 300 working days, that can be exceeded if the plant is operational for more than 300 days
during the year. Actual production is less than the installed capacity due to planned maintenance shutdown and gap
between market demand and supply of cement.
45.2 Lower capacity utilization is due to gap between demand and supply of the products.
45.3 Actual milk production is lower due to the mortality of milking cows and poor health of certain animals.
2023 2022
The investments by the provident fund in collective investment shcemes, listed equity and debt securities have been
made in accordance with the provisions of section 218 of the Companies Act, 2017 and the conditions specifed
thereunder.
As at reporting date, the provident fund has signed the term sheet for appointment of ‘investment advisor’ and is in
the process of signing the agreement.
The investments by the provident fund in collective investment schemes, listed equity and debt securities have been
made in accordance with the provisions of section 218 of the Companies Act, 2017 and the conditions specified
thereunder.
The investments by the provident fund in collective investment schemes, listed equity and debt securities have been
made in accordance with the provisions of section 218 of the Companies Act, 2017 and the conditions specified
thereunder.
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48. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk
and other price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial
performance.
Risk management is carried out by the Board of Directors ('the Board'). The Group's finance department evaluates
and hedges financial risks. The Board provides written principles for overall risk management, as well as written
policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative
financial instruments and non-derivative financial instruments, and investment of excess liquidity.
The Group's overall risk management procedures to minimise the potential adverse effects of financial market on
the Group's performance are as follows:
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates. Currency risk arises mainly from cash and bank balances, short term
borrowings, receivables and payables that exist due to transactions in foreign currencies.
The Group is exposed to currency risk arising from various currency exposures, primarily with respect to the United
States Dollar (USD). Currently, the Group’s foreign exchange risk exposure is restricted to bank balances and
amounts receivable from foreign entities and short term borrowings.
2023 2022
(USD in thousand)
Financial assets
Cash and bank balances 2,029 1,277
Receivable against sales to foreign parties 1,702 965
3,731 2,242
2023 2022
(Euros in thousand)
Financial assets - -
Financial liabilities
Trade and other payables (1,063) (570)
Net liability exposure (1,063) (570)
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At June 30, 2023, if the Rupee had weakened/strengthened by 10% against the USD with all other variables held
constant, post-tax loss for the year would have been Rs 65.066 million lower/higher (2022: Rs 30.879 million
higher/lower) mainly as a result of foreign exchange gains/losses on translation of USD - denominated financial
assets.
At June 30, 2023, if the Rupee had weakened/strengthened by 10% against the Euro with all other variables held
constant, post-tax loss for the year would have been Rs 20.291 million (2022: post-tax profit would have been Rs
8.240 million lower/higher) higher/lower, mainly as a result of foreign exchange losses/gains on translation of
Euro-denominated financial assets and liabilities.
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those
changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all
similar financial instruments traded in the market.
The Group is exposed to equity securities price risk because of investments held by the Group and classified as
FVOCI and at FVPL. Material investments within the portfolio are managed on an individual basis and all buy and
sell decisions are approved by the Board. The primary goal of the Group's investment strategy is to maximise
investment returns.
The Group’s certain investments in equity instruments of other entities are publicly traded on the Pakistan Stock
Exchange Limited.
The table below summarises the impact of increases/decreases of the KSE-100 index on the Group’s post-tax loss
for the year and on equity. The analysis is based on the assumption that the KSE had increased/decreased by 10%
with all other variables held constant and all the Group’s equity instruments moved according to the historical
correlation with the index.
Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
The Group's interest rate risk arises from loan to related party, bank balances, short term and long-term borrowings.
These borrowings issued at variable rates expose the Group to cash flow interest rate risk.
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these
scenarios, the Group calculates the impact on profit or loss of a defined interest rate shift. The scenarios are run only
for liabilities that represent the major interest-bearing positions.
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2023 2022
(Rupees in thousand)
Financial assets
Bank balances - savings accounts 698,764 353,511
Term deposit receipts 13,000 4,000
711,764 357,511
Financial liabilities
Export finances (3,578,000) (5,162,000)
Financial liabilities
Long term finances - secured (17,437,036) (21,861,578)
Short term borrowings - secured (24,347,023) (21,008,194)
(41,784,059) (42,869,772)
Net exposure (41,784,059) (42,869,772)
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.
Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Group.
At June 30, 2023, if interest rates on floating rate instruments had been 1% higher/lower with all other variables held
constant, post-tax loss for the year would have been Rs 254.913 million (2022: post-tax profit would have been Rs
287.227 million lower/higher) higher/lower, mainly as a result of higher/lower interest expense on floating rate
borrowings.
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the other party
by failing to discharge an obligation.
Credit risk of the Group arises from deposits with banks and other financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed transactions. The management assesses the credit
quality of the customers, taking into account their financial position, past experience and other factors. Individual
risk limits are set based on internal or external ratings in accordance with limits set by the Board. For banks and
financial institutions, only independently rated parties with a strong credit rating are accepted.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was as follows:
2023 2022
(Rupees in thousand)
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The Group's financial assets, other than investments in equity instruments, are subject to the expected credit losses
model. While bank balances, loans to employees, deposits and other receivables are also subject to the impairment
requirements of IFRS 9, the identified impairment loss was immaterial and are therefore not exposed to any material
credit risk.
Trade debts
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade debts.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past due. These trade receivables are netted off with the collateral obtained from these
customers to calculate the net exposure towards these customers. The Group has concluded that the expected loss
rates for trade debts against local sales are different from the expected loss rates for trade debts against export
sales.
The expected loss rates are based on the payment profiles of sales over a period of 12 months before June 30, 2023
and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted
to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers
to settle the receivables. The Group has identified the Gross Domestic Product and the Consumer Price Index of the
country in which it majorly sells its goods and services to be the most relevant factors, and accordingly adjusts the
historical loss rates based on expected changes in these factors.
On that basis, the loss allowance as at June 30, 2023 and June 30, 2022 was determined as follows:
Trade debts
against which 169,848 - - -
collateral is held
Gross Trade debts 935,087 131,349 507,973 89,160
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Local sales Export sales
Expected Trade debts Loss Expected Trade debts Loss
June 30, 2022 loss rate allowance loss rate allowance
% (Rupees in thousand) % (Rupees in thousand)
* This represents amounts net of trade debts against which security deposits, considered as collateral, are held
amounting to Rs 169.848 million (2022: Rs 72.601 million).
The amount of loss allowance that best represents maximum exposure to credit risk at the end of the reporting
period without taking into account any collateral is Rs 153.192 million (2022: Rs 133.650 million).
Generally, default is triggered when more than 360 days have passed. However, in case of certain parties, extended
credit period is allowed by the Credit Committees of the Group. The names of defaulting parties of outstanding trade
debts from export sales and their respective default amount is as follows:
2023 2022
(Rupees in thousand)
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The credit quality of financial assets that are neither past due nor impaired (mainly bank balances) can be assessed
by reference to external credit ratings (if available) or to historical information about counterparty default rate:
Rating Rating
Short term Long term Agency 2023 2022
(Rupees in thousand)
Liquidity risk represents the risk that the Group shall encounter difficulties in meeting obligations associated with
financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the Group's
businesses, the Group's finance department maintains flexibility in funding by maintaining availability under
committed credit lines. The Group's borrowing limits and cash and bank balances have been disclosed in notes 13
and 30 to these consolidated financial statements.
Management monitors the forecasts of the Group’s cash and cash equivalents (note 42 to these consolidated
financial statements) on the basis of expected cash flow. This is generally carried out in accordance with practice
and limits set by the Group. These limits vary by location to take into account the liquidity of the market in which the
entity operates. In addition, the Group's liquidity management policy involves projecting cash flows in each quarter
and considering the level of liquid assets necessary to meet its liabilities, monitoring consolidated statement of
financial position liquidity ratios against internal and external regulatory requirements and maintaining debt
financing plans.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date.
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(Rupees in thousand)
Total
At June 30, 2023 Less than Between 1 2 to Over contractual Carrying
1 year and 2 years 5 years 5 years cashflows value
(Rupees in thousand)
Total
At June 30, 2022 Less than Between 1 2 to Over contractual Carrying
1 year and 2 years 5 years 5 years cashflows value
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders or issue new shares.
Consistent with others in the industry and the requirements of the lenders, the Group monitors the capital structure
on the basis of gearing ratio. This ratio is calculated as net debt divided by total equity (as shown in the consolidated
statement of financial position). Net debt is calculated as total borrowings (including current and non-current
borrowings) including bank overdraft less cash and bank balances and liquid investments.
The gearing ratios as at June 30, 2023 and 2022 were as follows:
2023 2022
(Rupees in thousand)
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In accordance with the terms of agreement with the lenders of long term finances (as referred to in note 7 to these
consolidated financial statements), the Group is required to comply with certain financial covenants such as
maintaining certain level of gearing ratio and current ratio. The Group has complied with these covenants
throughout the reporting period except for certain covenants in respect of which the lenders have not raised any
objection to the Group.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit
price) regardless of whether that price is directly observable or estimated using another valuation technique.
The table below analyses the financial instruments carried at fair value, by valuation method. The different levels
have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The following table presents the Group's assets and liabilities that are measured at fair value:
Total liabilities - - - -
Total liabilities - - - -
Movement in the above mentioned assets has been disclosed in notes 21 and 28 to these financial statements and
movement in fair value reserve has been disclosed in the statement of changes in equity. There were no transfers
between Levels 1 and 2 & Levels 2 and 3 during the year and there were no changes in valuation techniques during
the year. Since the ordinary shares of Nishat Hotels and Properties Limited and Hyundai Nishat Motor (Private)
Limited are not listed, an investment advisor engaged by the Group has estimated fair values of Rs 19.16 and Rs
19.67 per ordinary share, respectively, as at June 30, 2023, through a valuation technique based on discounted cash
flow analysis. The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at
the end of the reporting period. Changes in level 2 and 3 fair values are analysed at the end of each reporting period
during the annual valuation discussion between the Chief Financial Officer and the investment advisor. As part of
this discussion, the investment advisor presents a report that explains the reason for the fair value movements.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting
date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer,
broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly
occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by
the Group is the current bid price. These instruments are included in Level 1.
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The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. These valuation techniques maximise the use of observable market data where it is available and rely
as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in Level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
- The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on
observable yield curves.
- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining
financial instruments. An appropriate discount for lack of control and lack of marketability is also applied, where
relevant.
Investments - FVOCI
Since the ordinary shares of Nishat Hotels and Properties Limited and Hyundai Nishat Motor (Private) Limited are
not listed, an investment advisor engaged by the Group has estimated fair values of Rs 19.16 and Rs 19.67 per
ordinary share, respectively, as at June 30, 2023, through a valuation technique based on discounted cash flow
analysis.
The method for calculation of fair value and valuation inputs including sensitivity analysis has been explained in note
21.1.1 and 21.1.2 to these consolidated financial statements.
Biological assets
The fair value of these assets is determined by an independent professionally qualified valuer. Latest valuation of
these assets was carried out on June 30, 2023. Level 3 fair value of biological assets has been determined
considering the prices of animals in local markets (replacement cost approach), health profile of the herd, disease
outbreaks in Pakistan, current economic conditions of the country and the current trends in dairy industry in
Pakistan.
The fair value is also dependent on the age of the cattle. The milking animals have been classified according to their
lactations. As the number of lactations increase, the fair value keeps on decreasing. At the same time, a value was
fixed on the calf heifer recently born according to the estimation and in relation with referential values of the similar
cattle breeding in Pakistan.
When the cow arrives at 6 years i.e. 72 months of age or more (5th Lactation) and is considered an old cow as is
usual in Pakistan, and if the cow remains in the farm because she is profitable, normally this is the stage of culling.
The value of cow at this stage shall be kept constant.
The valuation inputs used in the calculation includes the farm cost to raise the heifer (as starting point) and
according to actual cost in the farm and the analysis of the average local market prices in Pakistan.
The milking performance for the Australian imported heifers, Dutch heifers and farm born heifers has been almost
same throughout the year and hence same values have been ascertained for all the milking animals regardless of
their categories but according to their lactation levels.
If the fair value of biological assets, at the year end date fluctuates by 1% higher / lower with all other variables held
constant, post tax loss for the year would have been Rs 8.17 million (2022: Rs 6.85 million) lower/higher mainly as
a result of higher / lower fair value gain /(loss) on biological assets.
The carrying values of all other financial assets and liabilities reflected in the financial statements approximate their
fair values. Fair value is determined on the basis of objective evidence at each reporting date.
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At fair value
through At fair value At amortised
profit or loss through OCI cost Total
(Rupees in thousand)
As at June 30, 2023
Financial liabilities at
amortized cost
2023 2022
(Rupees in thousand)
There are no significant financial assets and financial liabilities that are subject to offsetting, enforceable master
netting arrangements and similar agreements.
292
49. Operating Segments
A business segment is a group of assets and operations engaged in providing products that are subject to risk and returns that are different from those of other business segments.
The Group's operations comprise of the following main business segment types:
The identification of operating segments was based on the internal organisational and reporting structure, built on the different products and services within the Group. Allocation of the individual organisational entities to
the operating segments was exclusively based on economic criteria, irrespective of the participation structure under the Companies Act, 2017.
The information by operating segment is based on internal reporting to the Group executive committee, identified as the 'Chief Operating Decision Maker' as defined by IFRS 8. This information is prepared under
the IFRSs applicable to the consolidated financial statements. All Group financial data are assigned to the operating segments.
(Rupees in thousand)
Cement Paper Dairy Elimination - net Total
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Revenue from
- External customers 64,983,821 58,043,863 569,566 784,130 4,941,814 2,825,840 - - 70,495,201 61,653,833
- Inter segment - - 2,522,027 2,286,036 271 536 (2,522,298) (2,286,572) - -
64,983,821 58,043,863 3,091,593 3,070,166 4,942,085 2,826,376 (2,522,298) (2,286,572) 70,495,201 61,653,833
Segment gross profit/(loss) 9,555,775 10,428,312 480,465 669,859 655,915 244,307 (17,871) (17,247) 10,674,284 11,325,231
Segment expenses (2,897,939) (3,512,940) (367,184) (129,243) (140,404) (157,422) 88,187 (14,705) (3,317,340) (3,814,310)
Other income 3,246,999 2,675,576 86,548 63,932 27,141 20,608 (114,748) (24,655) 3,245,940 2,735,461
Segment assets 134,713,251 136,562,013 5,597,511 4,430,998 4,920,138 3,749,576 (2,984,629) (3,151,733) 142,246,271 141,590,854
Segment liabilities 70,520,974 66,643,909 3,629,026 2,214,861 1,767,867 1,088,790 (814,478) (1,000,418) 75,103,389 68,947,142
Depreciation, amortization and impairment 3,944,128 3,913,288 60,290 61,939 158,527 160,644 15,726 20,135 4,178,671 4,156,006
Capital expenditure (3,418,069) (1,718,051) (49,078) (1,642) (213,225) (191,862) (27,574) (21,497) (3,707,946) (1,933,052)
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All segments of the Group are managed on a nation-wide basis and operate manufacturing facilities and sales
offices in Pakistan only.
2023 2022
(Rupees in thousand)
The subsidiaries as at June 30, 2023 are set out below. Unless otherwise stated, they have share capital consisting
solely of ordinary shares that are held directly by the parent company, and the proportion of ownership interests
held equals the voting rights held by the parent company. The country of incorporation or registration and their
principal places of business are disclosed in note 1.
Nishat Dairy (Private) Limited 55.10% 55.10% 44.90% 44.90% Production and
sale of raw milk
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50.2 Non-controlling interests ('NCI')
Set out below is summarised financial information for each subsidiary that has non-controlling interests that are
material to the Group. The amounts disclosed for each subsidiary are before inter-company eliminations:
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2023 2022
(Rupees in thousand)
The Cement segment has obtained short term borrowings and long term finances, and has maintained bank balances with
shariah compliant banks.
These consolidated financial statements were authorised for issue on August 31, 2023 by the Board of Directors.
Corresponding figures have been re-arranged, wherever necessary, for the purposes of comparison and better presentation
as per reporting framework. However, no significant re-arrangement / reclassifications have been made in these
consolidated financial statements.
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GLOSSARY
Term Meaning
BAC Board Audit Committee
Breakup Value Shareholders' Equity/Number of Shares
Current Ratio Current Assets divided by Current Liabilities
Debt to Equity Total Debt/Equity
DGK Dera Ghazi Khan
DGKC D.G. Khan Cement Company Limited
Dividend Yield Dividend Per Share/Stock Price
Divident Payout Dividend per Share/ EPS
EBITDA Earnings Before Interest, Tax, Depreciation & Amortisation
EPS Earnings Per Share
FX Foreign Exchange (Currency)
FY Financial Year
GDP Gross Domestic Product
GP Gross Profit
HR & R Human Resource & Remuneration Committee
Interest Coverage EBITDA/Interest
IT Information Technology
KHP Khairpur
KIBOR Karachi Interbank Offer Rate
LIBOR London Interbank Offer Rate
MIS Management Information System
MT Million Tons
MW Mega Watt
OPC Ordinary Portand Cement
PAT Profit After Tax
PE Price Earning Ratio= Stock Price/EPS
PKR Pakistani Rupee
ROA Return Assets
ROE Return on Equity
SRC Sulphate Resistant Cement
TPD Tons Per Day
USD United States Dollar
Working Capital Current Assets less Current Liabilities
WPPF Workers Profit Participation Fund
WWF Workers Welfare Fund
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2023 31
298
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299
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300
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301
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2022 2023
61,653 70,495
11,325 10,674
6,801 3,825
3,382 (3,366)
7.21 (8.06)
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2022 2023
58,043,863 64,983,821
(47,615,551) (55,428,046)
10,428,312 9,555,775
(751,052) (879,356)
(1,748,859) (1,818,028)
(8,990) (104,094)
(1,042,803) (96,461)
2,714,340 3,246,999
(3,571,187) (6,742,292)
6,019,761 3,162,543
(3,047,629) (6,798,519)
2,972,132 (3,635,976)
2022 2023
6,370,194 4,628,354
5,354,142 4,325,760
5,358,873 4,273,517
5,061,409 4,112,798
297,464 160,719
1,173,745 768,944
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1. To receive, consider and adopt the Audited Un-consolidated and Consolidated Financial Statements of the
Company for the year ended June 30, 2023 together with the Chairman’s Review, Directors' and Auditors' reports
thereon.
2. To appoint statutory Auditors for the year 2023-24 and fix their remuneration.
3. Special Business:-
a) To ratify and approve transactions conducted with the Related Parties during the year ended June 30,
2023 by passing the following special resolution with or without modification:
Resolved that the Related Party Transactions disclosed in the annual audited financial statements for the year
ended June 30, 2023 as approved by the Board of Directors of D. G. Khan Cement Company Limited (“the
Company”) be and are hereby ratified, approved and confirmed in all respects.
b) To authorize the Board of Directors of the Company to approve transactions with the Related Parties
during the financial year ending on June 30, 2024 by passing the following special resolution with or
without modification:
Resolved that the Board of Directors of D. G. Khan Cement Company Limited (“the Company”) be and is
hereby authorized to approve the transactions to be conducted with the related parties during the financial year
ending on June 30, 2024 and these transactions shall be deemed to have been approved by the shareholders
and shall be placed before the shareholders in the next Annual General Meeting for their ratification.
c) To consider and if deemed fit, to pass the following resolutions as special resolutions in pursuance of
S.R.O. 389(I)/2023 dated March 21, 2023 of the Securities and Exchange Commission of Pakistan to
authorize the Company to circulate the annual audited financial statements to its members through QR
enabled code and weblink with or without modification, addition(s) or deletion(s).
Resolved that the approval of the members of D. G. Khan Cement Company Limited (the “Company”) be and
is hereby accorded for transmission of Annual Reports including Annual Audited Financial Statements to the
members for future years commencing from the financial year 2024 through QR enabled code and Weblink
instead of transmitting the same through CD/DVD/USB, as allowed by Securities and Exchange Commission
of Pakistan vide its S.R.O. 389(I)/2023 dated March 21, 2023.
Resolved further that that the Chief Executive Officer and/or Chief Financial Officer and/or Company
Secretary of the Company be and are hereby singly authorized to do all acts, deeds and things, take or cause
to be taken all necessary actions to comply with all legal formalities and requirements and file necessary
documents as may be necessary or incidental for the purposes of implementing this resolution.
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A Statement of Material Facts as required under Section 134(3) of the Companies Act, 2017 is annexed to the notice of
meeting circulated to the members of the Company.
NOTES:
The Ordinary Shares Transfer Books of the Company will remain closed from 20.10.2023 to 27.10.2023 (both days
inclusive) for attending and voting at Annual General Meeting. Physical transfers/ CDS Transactions IDs received in order
in all respects up to 1:00 p.m. on 19.10.2023 at the office of Share Registrar, THK Associates (Pvt) Limited, Karachi
Office, Plot No.32-C, Jami Commercial Street No.2, DHA, Phase VII, Karachi, Lahore Office, THK Associates (Pvt) Ltd.,
Office No. 309, 3rd Floor, North Tower, LSE Building, 19-Shahrah-e-Aiwan-e-Iqbal, Lahore shall be considered in time for
entitlement for attending of meeting.
Proxies
A member eligible to attend and vote at this meeting may appoint another member his / her proxy to attend and vote
instead of him/her. Proxies in order to be effective must reach the Company's registered office not less than 48 hours
before the time for holding the meeting. Proxies of the Members through CDC shall be accompanied with attested copies
of their CNIC. In case of corporate entity, the Board’s Resolution/power of attorney with specimen signature shall be
furnished along with proxy form to the Company. The shareholders through CDC are requested to bring original CNIC,
Account Number and Participant Account Number to produce at the time of attending the meeting. The proxy shall
produce his / her original valid CNIC or original passport at the time of meeting.
Shareholders are requested to immediately notify the Company of change in address, if any.
Members who have deposited their shares into Central Depository Company of Pakistan Limited (“CDC”) will further have
to follow the under mentioned guidelines as laid down by the Securities and Exchange Commission of Pakistan.
a. In case of Individuals, the account holder and/or sub-account holder and their registration details are uploaded
as per the CDC Regulations, shall authenticate his/her identity by showing his/her original CNIC or, original
Passport at the time of attending the Meeting.
b. In case of corporate entity, the Board’s resolution/power of attorney with specimen signature of the nominee
shall be produced (unless it has been provided earlier) at the time of the Meeting.
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B. For Appointing Proxies
a. In case of individuals, the account holder and/or sub-account holder and their registration details are uploaded
as per the CDC Regulations, shall submit the proxy form as per above requirements.
b. The proxy form shall be witnessed by two persons, whose names, addresses and CNIC numbers shall be
mentioned on the form.
c. Attested copies of the CNIC or the passport of beneficial owners and the proxy shall be furnished with the
proxy form.
d. The proxy shall produce his original CNIC or original passport at the time of the Meeting.
In case of corporate entity, the Board’s resolution/power of attorney with specimen signature shall be furnished (unless it
has been provided earlier) along with proxy form to the Company.
In pursuance of the directions given by the Securities and Exchange Commission of Pakistan (SECP) vide SRO 787
(I)/2014 dated September 8, 2014, those shareholders who desire to receive Annual Financial Statements in future
through email instead of receiving the same by post are advised to give their formal consent along with their valid email
address on a standard request form which is available at the Company’s website i.e. www.dgcement.com and send the
form, duly signed by the shareholder, along with copy of his/her CNIC to the Company’s Share Registrar M/s THK
Associates (Pvt) Limited.
Pursuant to the SECP’s notification SRO 470(I) / 2016 dated 31st May, 2016 the Members of D. G. Khan Cement
Company Limited in AGM held on 28th October 2017 had accorded their consent for transmission of annual reports
including audited annual financial statements and other information contained therein of the Company through
CD/DVD/USB instead of transmitting the same in hard copies. The shareholders who wish to receive hard copies of the
aforesaid documents may send to the Company Secretary / Share registrar, the standard request form available on the
Company’s website and the Company will provide the aforesaid documents to the shareholders on demand, free of cost,
within one week of such demand.
Shareholders who could not collect their dividend/physical shares are advised to contact our Share Registrar to
collect/enquire about their unclaimed dividend or shares, if any.
In terms of the Companies Act, 2017, members residing in a city holding at least 10% of the total paid up share capital
may demand the facility of video-link for participating in the annual general meeting. The request for video-link facility
shall be received by the Share Registrar at the address given hereinabove at least 7 days prior to the date of the meeting
on the Standard Form placed in the annual report which is also available on the website of the Company.
The members are hereby notified that pursuant to Companies (Postal Ballot) Regulations, 2018 (“the Regulations”)
amended through Notification dated December 05, 2022, issued by the Securities and Exchange Commission of Pakistan
(“SECP”), SECP has directed all the listed companies to provide the right to vote through electronic voting facility and
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Accordingly, members of D. G. Khan Cement Company Limited (the “Company”) will be allowed to exercise their right to
vote through electronic voting facility or voting by post for the special business in its forthcoming Annual General Meeting
to be held on Friday, October 27, 2023, at 03:00 PM, in accordance with the requirements and subject to the conditions
contained in the aforesaid Regulations.
I. Details of the e-voting facility will be shared through an e-mail with those members of the Company who have their
valid CNIC numbers, cell numbers, and e-mail addresses available in the register of members of the Company by the
close of business on October 20, 2023.
II. The web address, login details, and password, will be communicated to members via email. The security codes will
be communicated to members through SMS from the web portal of CDC Share Registrar Services Limited (being the
e-voting service provider).
III. Identity of the Members intending to cast vote through e-voting shall be authenticated through electronic signature
or authentication for login.
IV. E-Voting lines will start from October 24, 2023, 09:00 a.m. and shall close on October 26, 2023 at 5:00 p.m. Members
can cast their votes any time during this period. Once the vote on a resolution is cast by a Member, he / she shall not
be allowed to change it subsequently.
The members shall ensure that duly filled and signed ballot paper, along with copy of Computerized National Identity Card
(CNIC), should reach the Chairman of the meeting through post on the Company’s registered address Nishat House 53-A,
Lawrence Road, Lahore, Pakistan or email at chairman@dgcement.com one day before the Annual General Meeting on
October 26, 2023 up to 5:00 p.m. The signature on the ballot paper shall match the signature on CNIC.
This postal Poll paper is also available for download from the website of the Company at www.dgcement.com or use the
same as attached to this Notice and published in newspapers.
Please note that in case of any dispute in voting including the casting of more than one vote, the Chairman shall be the
deciding authority.
In light of COVID-19 situation, the Securities and Exchange Commission of Pakistan (“SECP”) has advised vide Circular
No. 4 of 2021 dated 15 February, 2021 to provide participation of the members through electronic means. The members
can attend the AGM via video link using smart phones/tablets/. To attend the meeting through video link, members and
their proxies are requested to register themselves by providing the following information along with valid copy of
Computerized National Identity Card (both sides)/passport, attested copy of board resolution / power of attorney (in case
of corporate shareholders) through email at kchohan@dgcement.com or smahmood@dgcement.com by October 20
2023.
Name of Member/ CNIC No. Folio No. / CDC Cell No. Email ID
Proxyholder Account No. Whatsapp No.
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Conversion of Physical Shares into Book Entry Form
As per Section 72 of the Companies Act, 2017 all existing companies are required to convert their physical shares into
book-entry form within a period not exceeding four years from the date of commencement of the Companies Act, 2017.
The Securities & Exchange Commission of Pakistan through its circular # CSD/ED/Misc./2016-639-640 dated March 26,
2021 has advised the listed companies to pursue their such members who still hold shares in physical form, to convert
their shares into book-entry form.
We hereby request all members who are holding shares in physical form to convert their shares into book-entry form at
the earliest. They are also suggested to contact the Central Depository Company of Pakistan Limited or any active
member / stock broker of the Pakistan Stock Exchange to open an account in the Central Depository System and to
facilitate conversion of physical shares into book-entry form. Members are informed that holding shares in book-entry
form has several benefits including but not limited to Secure and convenient custody of shares, conveniently tradeable
and transferable, No risk of the loss, damage or theft, No stamp duty on transfer of shares in book-entry form and Hassle
free credit of bonus or right shares.
We once again strongly advise members of the Company, in their best interest, to convert their physical shares into
book-entry form at earliest.
This statement sets out the material facts pertaining to the special business to be transacted at the Annual General
Meeting of the Company to be held on October 27, 2023.
Following transactions carried out with associated companies/related parties have been approved by the Board as
recommended by the Audit Committee on a quarterly basis pursuant to provisions of applicable laws. However, as
majority of Company Directors were interested in certain related party transactions due to their common directorship
and holding of shares in the associated companies/related parties, the Board has recommended for placement of
the same before the shareholders of the Company in general meeting for ratification/approval.
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v. Post Employment benefit plan Expense charged in respect of defined benefit plans 245,561
Expense charged in respect of defined contribution plan 123,989
All these related party transactions during the mentioned period were executed at Arm’s Length Price in a fair and
transparent manner and there was no departure from the guidelines mentioned in the Companies (Related Party
Transactions and Maintenance of Related Records) Regulations, 2018 and listed companies regulations 2019 Code
of Corporate Governance for such transactions.
Pursuant to the above, these transactions have to be approved/ratified by the shareholders in the General Meeting.
The Company shall be conducting transactions with its related parties during the year ending June 30, 2024 on an
arm’s length basis as per approved policy with respect to transactions with related parties’ in the normal course of
business. The majority of Directors are interested in certain transactions due to their relationship with the Company.
In order to promote the transparent business practices, the Board of Directors has to be authorized to approve all
transactions with the related parties from time to time during the year ending June 30, 2024 and the same will be
placed before the Shareholders in the next AGM for their ratification / approval.
The Securities and Exchange Commission of Pakistan vide its S.R.O. 389(I)/2023 dated March 21, 2023 has allowed
companies to circulate annual audited financial statements to its members through QR enabled code and Weblink,
therefore, the Board of Directors of D. G. Khan Cement Company Limited (“the Company”) in their meeting held on
August 31, 2023 has recommended for transmission of Annual Reports including Audited Financial Statements of
the Company to its members through QR enabled code and Weblink instead of transmitting the same through
CD/DVD/USB, however, hard copy of the annual audited financial statements will be supplied to the shareholders,
on demand, at their registered addresses, free of cost, within one week of receipt of such demand.
The Directors, Sponsors, majority shareholders and their relatives are not interested, directly or indirectly, in the
above businesses except to the extent of shares that are held by them in the Company.
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Statement Under Rule 4(2) of the Companies (Investment in Associated Companies or
Associated Undertakings) Regulations, 2017
Name of Investee
Hyundai Nishat Motor (Pvt) Limited (HNMPL)
Company
Total Investment Equity investment upto Additional Equity investment Guarantee / continuing
Approved: Rupees 850 million was upto Rupees 900 million Stand by Letter(s) of Credit
approved in EOGM held on was approved by the (SBLC) for an amount of up
March 28, 2018 and further shareholders in their AGM to PKR 1,000 Million for a
enhanced from PKR 850 held on October 28, 2022 for tenure of 7.5years was
million to PKR 1,056.400 the period of 4 years. approved by members in
million by the shareholders EOGM held on March 28,
in their AGM held on 2018 and further enhanced
October 28, 2019 for the from PKR 1,000 million to
period of 4 years. PKR 1,277 million by the
shareholders in their AGM
held on October 28, 2019 for
the period of 7.5 years.
Reasons for Partial investment has been Full investment has been Partial guarantee has been
deviations from the made in investee company. made in investee company. extended after the approval.
approved timeline Commercial operations of The Company will arrange
of investment, the investee company have issuance of further
where investment not yet started. The Guarantee /SBLC as and
decision was to be Company will make further when requested by HNMPL
implemented in equity investment as and within the approved time line
specified time: when further shares offered and amount.
by HNMPL.
Material change in At the time of approval, as At the time of approval, as At the time of approval, as
financial per available latest audited per available latest audited per available latest audited
statements of financial statements for the financial statements for the financial statements for the
associated year ended December 31, year ended December 31, year ended December 31,
company or 2017, the basic loss per 2021, the basic earnings 2017, the basic loss per
associated share was Rs.19.67 and share was Rs. 1.44 and share was Rs.19.67 and
undertaking since breakup value per share was breakup value per share was breakup value per share was
date of the Rs. 4.85. As per latest Rs. 8.22. As per latest Rs. 4.85. As per latest
resolution passed audited financial statements audited financial statements audited financial statements
for approval of for the year ended for the year ended for the year ended
investment in such December 31, 2022 the December 31, 2022 the December 31, 2022 the
company: basic earnings per share is basic earnings per share is basic earnings per share is
Rs. 0.28 and breakup value Rs. 0.28 and breakup value Rs. 0.28 and breakup value
per share is Rs. 16.15. per share is Rs. 16.22. per share is Rs. 16.22.
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NISHAT
Designated email address of the Chairman at which the duly filled in ballot paper may be sent: chairman@dgcement.com.
I/we hereby exercise my/our vote in respect of the following special resolutions through postal ballot by giving my/our assent or
dissent to the following resolutions by placing tick (√) mark in the appropriate box below:
Special Resolutions
To ratify and approve transactions conducted with the Related Parties during the year ended June 30, 2023 by
passing the following special resolution with or without modification:
Resolved that the Related Party Transactions disclosed in the annual audited financial statements for the year ended June
30, 2023 as approved by the Board of Directors of D.G. Khan Cement Company Limited (“the Company”) be and are
hereby ratified, approved and confirmed in all respects.
To authorize the Board of Directors of the Company to approve transactions with the Related Parties during the
financial year ending on June 30, 2024 by passing the following special resolution with or without modification:
Resolved that the Board of Directors of D. G. Khan Cement Company Limited (“the Company”) be and is hereby
authorized to approve the transactions to be conducted with the related parties during the financial year ending on June
30, 2024 and these transactions shall be deemed to have been approved by the shareholders and shall be placed before
the shareholders in the next Annual General Meeting for their ratification.
To consider and if deemed fit, to pass the following resolutions as special resolutions in pursuance of S.R.O.
389(I)/2023 dated March 21, 2023 of the Securities and Exchange Commission of Pakistan to authorize the
Company to circulate the annual audited financial statements to its members through QR enabled code and
weblink with or without modification, addition(s) or deletion(s).
Resolved that the approval of the members of D. G. Khan Cement Company Limited (the “Company”) be and is hereby
accorded for transmission of Annual Reports including Annual Audited Financial Statements to the members for future
years commencing from the financial year 2024 through QR enabled code and Weblink instead of transmitting the same
through CD/DVD/USB, as allowed by Securities and Exchange Commission of Pakistan vide its S.R.O. 389(I)/2023 dated
March 21, 2023.
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RESOLVED further that that the Chief Executive Officer and/or Chief Financial Officer and/or Company Secretary of the
Company be and are hereby singly authorized to do all acts, deeds and things, take or cause to be taken all necessary
actions to comply with all legal formalities and requirements and file necessary documents as may be necessary or
incidental for the purposes of implementing this resolution.
I/we hereby exercise my/our vote in respect of above mentioned special resolutions through postal ballot by conveying
my/our assent or dissent to the said resolutions by placing tick (√) mark in the appropriate box below:
Sr. Nature and Description I/We assent to the I/We dissent to the
No. of resolutions Resolutions (FOR) Resolutions (AGAINST)
Place: __________________
Date: __________________
NOTES:
1. Duly filled postal ballots should be sent to the Chairman at Nishat House, 53-A, Lawrence Road, Lahore or through
email at: chairman@dgcement.com .
2. Copy of CNIC, NICOP/Passport (In case of foreigner) should be enclosed with the postal ballot form.
3. Postal Ballot form should reach the Chairman of the Meeting on or before October 26, 2023 up to 5:00 p.m. Any
Postal Ballot received after this time/date, will not be considered for voting.
4. In case of a representative of a body corporate, corporation or Federal Government, the Ballot Paper form must be
accompanied by a copy of the CNIC of an authorized person, an attested copy of Board Resolution / Power of
Attorney / Authorization Letter etc., in accordance with Section(s) 138 or 139 of the Companies Act, 2017 as
applicable. In the case of foreign body corporate etc., all documents must be attested by the Consul General of
Pakistan having jurisdiction over the member.
5. Signature on postal ballot should match with signature on CNIC, NICOP/Passport (In case of foreigner).
6. Incomplete, unsigned, incorrect, defaced, torn, mutilated, over written ballot paper will be rejected.
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D. G. KHAN CEMENT COMPANY LIMITED
NISHAT
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316
Form of Proxy
I /We
of
of
or failing him/her
of
member(s) of the Company, as my/our proxy in my/our absence to attend and vote for me/us and on my/our behalf at
the Annual General Meeting of the Company to be held on October 27, 2023 (Friday) at 03:00 P.M. at Emporium Mall,
The Nishat Hotel, Trade and Finance Centre Block, Near Expo Centre, Abdul Haq Road, Johar Town, Lahore.
Signature(s) of Member(s)
Address Address
CNIC # CNIC #
Please quote:
Important: This instrument appointing a proxy, duly completed, must be received at the Registered Office of the Company
at Nishat House, 53-A, Lawrence Road, Lahore not later than 48 hours before the time to holding the annual general
meeting.
AFFIX
D.G. KHAN CEMENT CORRECT
COMPANY LIMITED POSTAGE
2023
AFFIX
D.G. KHAN CEMENT CORRECT
COMPANY LIMITED POSTAGE