Nishat Annual Report 2013

D.G. Khan Cement Company Limited
2013
Annual Report

D.G.KhanCementCompanyLimitedAnnualReport2013
01
ContentsVision Statement 04
Mission Statement 05
Company profile 07
Notice of Annual General Meeting 08
Directors’ Report to the Shareholders 12
Statement of Value Addition 21
Operating and Financial Data 22
Pattern of Shareholding 26
Statement of Compliance with the
Code of Corporate Governance 33
Review Report to the Members on Statement of
Compliance with the Code of Corporate Governance 35
Auditors’ Report to the Members 39
Financial Statements 40
Directors’ Report on the Consolidated Financial Statements 94
Auditors’ Report to the Members on the
Consolidated Financial Statements 95
Consolidated Financial Statements 96
Form of Proxy 151

03
Innovation
Committed Workforce
Energy Efficiency
Environment Friendliness

04
Vision Statement
To transform the Company into a modern and dynamic
cement manufacturing company with qualified professionals
and fully equipped to play a meaningful role on sustainable
basis in the economy of Pakistan.

05
Mission StatementTo 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.

07
Board of Directors Mrs. Naz Mansha Chairperson
Mian Raza Mansha Chief Executive
Mr. Khalid Qadeer Qureshi
Dr. Arif Bashir
Mr. Farid Noor Ali Fazal
Mr. Inayat Ullah Niazi Chief Financial Officer
Ms. Nabiha Shahnawaz Cheema
Audit Committee Mr. Khalid Qadeer Qureshi Member/Chairman
Mr. Farid Noor Ali Fazal Member
Ms. Nabiha Shahnawaz Cheema Member
Human Resource & Mian Raza Mansha Member
Remuneration Committee Mr. Khalid Qadeer Qureshi Member/Chairman
Ms. Nabiha Shahnawaz Cheema Member
Company Secretary Mr. Khalid Mahmood Chohan
Bankers Allied Bank Limited Habib Metropolitan Bank
Askari Bank Limited MCB Bank Limited
Bank Alfalah Limited Meezan Bank Limited
Bank Islami Pakistan Limited National Bank of Pakistan
Barclays Bank Plc NIB Bank Limited
Citibank N.A. Samba Bank Limited
Deutsche Bank AG Standard Chartered Bank
Dubai Islamic Bank (Pakistan) Limited
Faysal Bank Limited Silk Bank Limited
HSBC Bank Middle East Limited The Bank of Punjab
Habib Bank Limited Limited United Bank Limited
External Auditors A.F. Ferguson & Co, Chartered Accountants
Cost Auditors Qadeer & Company, Chartered Accountants
Legal Advisors Mr. Shahid Hamid, Bar-at-Law
Registered Office Nishat House, 53-A, Lawrence Road,
Lahore-Pakistan
Phone: 92-42-36367812-20 UAN: 111 11 33 33
Fax: 92-42-36367414
Email: info@dgcement.com
web site: www.dgcement.com
Factory 1. Khofli Sattai, Distt. Dera Ghazi Khan-Pakistan
Phone: 92-641-460025-7
Fax: 92-641-462392
Email: dgsite@dgcement.com
2. 12, K.M. Choa Saidan Shah Road,
Khairpur, Tehsil Kallar Kahar,
Distt. Chakwal-Pakistan
Phone: 92-543-650215-8
Fax: 92-543-650231
Company Profile

08
Notice is hereby given that Annual General Meeting of the Shareholders of D. G. Khan Cement Company
Limited ("the Company") will be held on October 31, 2013 (Thursday) at 11:00 A.M. at Nishat House, 53-A,
Lawrence Road, Lahore to transact the following business:
1. To receive and adopt the Audited Unconsolidated and Consolidated Financial Statements of the
Company for the year ended June 30, 2013 together with the Directors' and Auditors' reports there-
on.
2. To approve Final Cash Dividend @ 30% [i.e. Rs. 3/- Only (Rupee Three Only) Per Ordinary Share] as
recommended by the Board of Directors.
3. To elect seven Directors of the Company for a period of three years in accordance with the provisions
of Section 178 of the Companies Ordinance, 1984 in place of the following retiring Directors :-
1. Mrs. Naz Mansha 2. Mian Raza Mansha
3. Mr. Khalid Qadeer Qureshi 4. Mr. Farid Noor Ali Fazal
5. Dr. Arif Bashir 6. Mr. I. U. Niazi
7. Ms. Nabiha Shahnawaz Cheema
4. To appoint statutory Auditors for the year ending June 30, 2014 and fix their remuneration.
By order of the Board
LAHORE (KHALID MAHMOOD CHOHAN)
SEPTEMBER 4, 2013 COMPANY SECRETARY
NOTICE OF ANNUAL GENERAL MEETING
NOTES:
1. BOOK CLOSURE NOTICE:-
The Ordinary Shares Transfer Books of the Company will remain closed from 18-10-2013 to 31-10-2013
(both days inclusive) for entitlement of 30% Final Cash Dividend [ i.e. Rs. 3/- (Rupees Three Only) Per
Ordinary Share] and attending and voting at Annual General Meeting. Physical transfers/ CDS Transac-
tions IDs received in order in all respect up to 1:00 p.m. on 17-10-2013 at Registered Office, Nishat House,
53-A, Lawrence Road, Lahore, will be considered in time for entitlement of 30% Final Cash Dividend and
attending of meeting.
2. 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 Regis-
tered 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 shareholder through CDC are requested to bring original CNIC, Account Number
and Participant Account Number to produce at the time of attending the meeting.
3. Shareholders are requested to immediately notify the change in address, if any.
4. Members who have not yet submitted photocopies of their CNICs to the Company are requested once
again to submit the same at the earliest to mention it on dividend warrants in compliance with the
directive of the Securities and Exchange Commission of Pakistan vide SRO No. 831(1)/2012 dated 05 July
2012, it is mandatory for the listed companies to print the CNIC Numbers of the registered shareholder(s)
or authorized persons on the Dividend Warrants.

09
STATEMENT UNDER RULE 4(2) OF THE COMPANIES (INVESTMENT IN
ASSOCIATED COMPANIES OR ASSOCIATED UNDERTAKINGS) REGULATIONS, 2012.
Name of the Investee Company
Total Investment Approved
Amount of Investment made to date
Reason for not having made complete investment so
far where resolution required it to be implemented in
specified time.
Material Change in financial statements of associat-
ed company or associated undertaking since date of
the resolution passed for approval of investment in
such company.
Nishat Dairy (Pvt) Limited
PKR 500 Million was approved by the members in their
meeting held on October 24, 2012 for a period of
three (3) years.
PKR 300 Million
Investment has been made in Nishat Dairy (Pvt)
Limited as per funds requirement of the investee com-
pany and further investment will be made according
to the financial need of investee company.
The Company has started its commercial operation
and as per available financial statements for the year
ended June 30, 2013, the loss per share is Rs. 2.29 and
break-up value per share is Rs. 9.14. At the time of
approval investee company had not started its com-
mercial operation therefore basic earnings per share
and break-up value per share for that time is not avail-
able.

11
from Dreams to Reality
from Raw to Structure
from Rural to Urban
from Past to Future
from Vision to Execution
from Small Units to Big Cities
from Moments to Monuments
from Home to Workplace
from Science to Art
from Individual to Society
We are there

12
DIRECTORS
REPORT
DIRECTORS’
REPORT

13
The Directors of your company are pleased to submit
their report along with audited financial statements
for the year ended June 30, 2013.
THE ECONOMY
The economy of Pakistan is experiencing hard times
since last five years. National economic performance
was affected by the internal security hazards, the
devastating floods and rains and the energy crisis.
According to economic survey of Pakistan 2013, the
domestic economy grew at average rate of 2.9
percent per annum. Hazardous situation of power
supply is the main constraint on growth and energy
crisis is thwarting the materialization of our potential.
Power outages have shaved off annual GDP growth.
Pakistan has the potential to grow at 6 to 7 percent in
the next couple of years which is also needed to
absorb new workforce entrants. The GDP growth for
2012-13 was targeted at 4.3 percent which realized at
3.6 percent. Pakistan has undergone the general
election in May 2013 and its results and participation
indicated hope and awareness in people of Pakistan.
There are expectations for new vibrant policies,
keeping view on long term goals while managing
short term crisis, on terrorism, law and order and
economics. The current fiscal year 2012-13 started
with single digit inflation but it is expected that recent
measures by government will inflate the inflation.
Even after four years of global financial crisis, world
economy is still trying to come out of its untoward
impacts. Developing economies are the main driver
of global growth, but their output has slowed
compared with the pre-crisis period. To regain
pre-crisis growth rates, developing countries must
once again emphasize internal productivity
enhancing policies. Europe is still struggling to break
the bubble of vicious debt virus. Middle East unrest is a
major threat to global economy.
THE INDUSTRY
Though the cement trade may not be global,
consumption follows the same path as other more
widely traded commodities that have a close
correlation with economic expansion. In recent years
demand in emerging economies has risen sharply, as
they urbanise and industrialise: they now consume
90% of the world’s cement output, and this share is
likely to keep growing. According to some reports
cement supply will grow by around 5% per year. The
best growth will be in Africa and the Middle East at
around 4%. Europe is expected to see negative
cement growth in upcoming year. Chinese growth
rates have moderated with further chances of price
reduction. Indian pricing has been strong, but it
remains to be seen if this can continue with incipient
regional oversupply. There has been strong
government spending in some Far East countries
leading to double-digit growth in cement demand.
Last year was comparatively good for Pakistani
cement industry for pocketing better margins. Main
factors for this exceptional trend are favourable price
and persistent demand. In 2013, due to increase in
construction activities cement demand increased by
1.1 million tons as compared to last year. There is a
decrease of 2.3% in exports volumes compensated by
about 5% depreciation of Pakistani currency. The
decrease in exports volumes is attrib uted to entry of
Iranian cement in Afghanistan market.
According to the economic survey of Pakistan 2013,
the construction sector is having 11.42 percent share
in overall industrial sector. The construction sector has
recorded 5.2 percent growth as compared to 3.2
percent growth last year. The increase in growth is
due to rapid execution of work on the rehabilitation of
the flood affected areas, increased investment in
small scale construction and rapid implementation of
PSDP schemes and other development projects of
federal and provincial governments.
COMPANY’S BUSINESS PERFORMANCE 2013
Here are the annual performance highlights for FY13:
Industrial Cement Despatches
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
2009
2010
2011
2012
2013
Export in metric tons Local in metric tons
Pakistan Cement Industry
Despatches and Utilisation Trend in
% (in terms of QTY)
100
80
60
40
20
-
FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06
82
89
75 73 70
74 74 7475 7569 65
80 79
87
25 26 30 31 35
25
13 8
Local Exports Utilisation

14
Particulars PKR in thousands
Sales (Net) 24,915,924
Cost of Sales 15,589,917
Administrative Cost 405,579
Selling Cost 1,751,174
Other Costs 544,806
Finance Cost 994,879
Total Costs 19,286,355
Other Income 1,466,289
Taxation 1,593,689
Income After Tax 5,502,169
2013 2012
Clinker Production (MT) 3,924,090 3,773,948
Cement Production (MT) 4,031,801 4,004,458
Clinker Sales (MT) 6,000 5,945
Cement Sales (MT) (Local) 2,887,812 2,765,534
Cement Sales (MT) (Export) 1,120,464 1,253,422
Campany’s Clinker Production
Clinker Production
5000000
4000000
3000000
2000000
1000000
0
FY11 FY10 FY09 FY08 FY07FY12FY13
In line with the industry’s performance, our local
volumes increased by more than 4%. While our export
volumes decreased about 10 %. Our clinker
production increased about 4% compared to last
year.
During Financial Year 2013, our company
performance exhibit all time high post-tax profit of Rs
5.5 billion and our Earning per Share (EPS) remained at
Rs. 12.56 / Share.
Our sales increased about 9% while COGS about 1%.
Stable and favourable local prices, maintained
demand and devaluation in local currency
contributed to comparatively more sales value. Cost
of sales to Sales ratio lowered to 62% from 67% due to
use of alternate fuels, electricity generation through
waste heat recovery and reduced coal prices which
overshadowed the inflationary impact of other
materials. During the year your company generated
about 61million KWH from waste heat recovery thus
The Company’s domestic sales network is spread
throughout the country while its major exports markets
are Afghanistan, various countries in African
Continent, Sri Lanka and India. Company’s extensive
dealer network is one of our strength.

15
long term loans are reduced by 36% while short term
debt slashed by 19.5%. The company’s equity to debt
rose from 1.15 times to 4.9 times from FY09 till FY13.
Better cash flows from sales and cost saving measures
made this possible. Now the company’s balance
sheet is bearing much less financial risk when
compared with last five years.
The Company has a policy of continuous
development, innovation and upgradation of its
production facilities. This policy is translated into
COGS
62%
Distribution of Net Sales
Admin 2%
Other 2%
Finance 4%
Profit
before Other
Income and Tax
23%
Selling 7%
Others 28%
Energy
Cost
48%Employee
Costs 7%
Stores
consumption 9%
Selling Freight 8%
Major expenses as % of total costsharing the burden of national grid with bringing
economy to operations. Selling expenses reduced by
20% on YOY basis. Reason behind this is low volumes
of exports. The projects of alternate fuels are a
success and contributed to noticeable cost savings. It
not only reduced imported coal cost but also saved
income statement from exchange loss to some
extent. Use of alternate fuels also contributed to
healthier environment which would be hazardous
waste for community if not disposed off properly.
40% YOY reduction in finance cost is attributed to
repayment of loans, effective utilization of short term
credit lines, reduction in discount rate and banking
spreads. This all come from better cash flows!
Due to exposure in foreign currencies a net exchange
loss of PKR 145 million for the year is also recorded
owing to currency devaluation. However, this loss is
reduced by 49% when compared with last year due
to reduction in foreign currency exposure. While the
currency devaluation remained at about 5% YOY for
FY13 compared with about 10% for FY12. Other
income includes dividend of PKR 1.295 billion
received during the year. Taxation includes provision
of deferred taxation amounting to PKR 1.5 billion
arising out of capitalization of assets and change in
mix from exports to local sales.
Within the total costs of the Company the energy cost
shares the highest value of about 48% and the selling
freight was occupying 8% mark. The company’s
employee cost is about 7% of its total cost and about
5.5% of net sales.
The Company is maintaining a very safe and sound
balance between owners’ capital and lenders funds.
Company’s liability and capital structure is very well
maintained. Total assets of the company are
represented by 25% liabilities and 75% capital.
Whereas, within liabilities, 63% relates to financial
institutions as of June 30, 2013. The company’s
FY09
FY10
FY11
FY12
FY13
0 2000 4000 6000 8000 10000
777
2,606 9,069
9,135
1,903
1,671
2,051
4,052
7,223
6,875
6,733
6,786
7096
5420
4328
995
9,586
8,692
358
601
12000
PBT Mark Up Expense Short Term Loans
Long Term Loans * PKR in millions
Long Term Loans Short Term Loans Equity
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
FY13 FY12 FY11 FY10 FY09
PKRinmillions

16
During FY13 the Company’s plants operated
efficiently at 97.6% compared to 93.8% of FY12. Your
Company contributed PKR 4.7 billion to national
exchequer during FY13 in terms of various taxes and
levies. The company also contributed its due share in
earning foreign exchange for the country and
earning good name and ties for motherland.
FUTURE OUTLOOK
The management foresees that your Company has
splendid capability to grow and flourish further.
However, organizations work in various layers of
environments all of which have different spells.
It requires untiring and sincere efforts from
government to support the shaky economic situation
and may demand tough decisions. But decisions
should be in the right direction!
Energy being the life line of economy is vital to
economic growth of a country. Government’s efforts
to consolidate the current state are expected to result
in reduction in power crises. However, new ventures
need to be explored to generate extra energy at a
cheaper rate. High increase in electricity and gas
tariffs would increase the cost of business. Middle East,
specifically Syria unrest may cast frustrating impacts
on global economy including Pakistan. This unrest
may result in Oil price hikes which would be translated
into high inflation. World trade may also get affected
by probable struck of war which would ultimately
worsen many sectors in Pakistan as well.
It is expected that repayments of national foreign
loans and imbalanced balance of payment would
result in further devaluation of local currency. SBP may
start picking up the discount rate which in turn may
raise financial costs.
In recent Finance Act, the government has taken
various steps to document the economy and to
generate extra revenue from tax sources. However,
due to lack of planning this put extra burden on
business community. Moreover, instead of
broadening tax base, government put extra burden
on current tax payers in terms of documentation and
additional taxes.
It is expected that local demand of cement may
increase due to expected government spending on
infrastructure projects. Recent flood in Punjab and
Sindh has damaged major infrastructure and crops.
Revival activities may result in additional demand of
construction material.
Our cost of sales may escalate owing to excepted
devaluation of Pakistani Rupees and probable
inflation rise. On the other side in upcoming year we
anticipate to reap the benefits of waste heat
recovery plant installed at Khairpur site. We are
reality which is evident from our year wise
capitalization. In FY13 major capitalizations include
waste heat recovery at Khairpur site and few phases
of alternate fuel projects. The total assets are
deployed in very systematic manner. The Company’s
balance sheet represents its strength and your
Company’s management’s controls.
Company’s Assets Claims
Company’s
Total
Assets
Other
Liabilities
Total
Capital
Company’s Liabilities Structure
Liabilites
towards
banks
including
accrued
mark up
64%
Others
36%
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Long Term LoansShort Term Loans
PKRinmillions

17
working on sites near Lahore and Multan to Process
waste into a refused derived fuel. These plants are
expected to be operational by November 2013 and
would bring economy to our business process.
The company recently abandoned establishing a
plant in Mozambique due to lack of major infrastru-
cture required to set up a cement plant. However, we
still intend to make a venture in African Continent. We
intend to make a green field cement plant at Hub,
District Lasbela, with a capacity of upto 2.6 million
tons per annum to explore its unattended market and
get benefits of nearness of port.
COMPANY’S SENSITIVITY FACTORS
The Company’s areas with major sensitivity are Price,
Volume, Foreign Exchange, Interest Rates and Energy.
Price is dependent on the economic activity of the
country and market circumstances. Cement industry
in Pakistan have had a volatile trend in terms of price.
Even at times in past product was being sold as cash
loss. Price is determinant factor in obtaining
reasonable profitability.
Volume is important factor and is a phenomenon
closely linked to price factor as well. However, the
demand of cement till a certain level is inelastic.
Volumes of cement appear to have more responsive
correlation with economic activity than price,
although price plays a vital role as well. If
governmental level spending increases it will have
huge impact. Demand from households normally
stays constant with some impact of price and more
impact of economy. Institutional sales are important
when institutions are on way towards expansions, new
setups etc.
Foreign Exchange is important sensitivity factor in the
company as the company has reasonable exposure
towards foreign currencies. The Company has its
huge volumes of imports denominated mostly in Euro
and some are in US Dollar, Japanese Yen and other
currencies. Company has substantial footing in
exports which are US Dollar based. Besides the
company used to have USD based long term and
short term financings as well. Management of your
company is vigilant in maintaining a balance.
However, FX extra ordinary movements are beyond
control of management. Currencies are very reactive
to economical data therefore, US and EU data
impacts are noticeable. During FY13 PKR lost its further
5% value as compared to July 13. The company has
entered into a cross currency swap to cover half of its
foreign long term loan. For rest the company’s exports
provide a natural hedge for its imports and FCY loans.
Interest Rate has reasonable impact on income
statement of the Company as the Company has
substantial loaning – long and short term. Moreover,
Company is also having USD based loans exposure.
Therefore, movements in KIBOR or/and LIBOR both
have sensitivity for the Company. The financial and
money market factors also impart respective impacts
as these are crucial in determining the spreads being
charged by banks. However, continuous improve-
ment in sales is fading out the financial risk.
Energy – The highest shareholder in cement cost, is
undoubtedly one of major factors that could affect
profitability and operations due to its inelastic nature
for this product. Cement producing facility is energy
intensive. Heavy loads of power are needed to run
the giant structures. Your company has sufficient
captive power capacity besides national grid to
overcome the power failures. Besides, massive
quantity of coal is required to burn the kilns. Your
company is fully aware of this major aspect of its
operation. We have invested in alternate fuels to
reduce consumption of coal. Heavy machineries are
installed to generate electricity from the waste heat
of kilns. However, availability and prices of energy in
its various forms, that includes national grid, furnace
oil, gas, imported coal, local coal and alternate fuels,
is a major risk for this industrial sector. Oil prices and
ocean and local freight are among those factors
which may impart considerable impact. Inflation is
not a less important risk factor which can affect the
cost of doing business in either way.
Demand, Market Circumstances Price
Economic Activity, Government
Spending
Volume
KIBOR/ LIBOR variations,
Fiscal and Monetary Policies
Interest
Rate
Currency Market Circumstances,
International and National
Economies
FX
Availability and price of Power from
national grid, furnace oil, gas, alternate
fuels, local and imported coal
Energy

18
Credit, Liquidity and other risks have been discussed
at length in notes to the accounts.
Corporate Social Responsibility
Your company place highest value to human
development and community progress. Human and
community values are core to us. Organisations are
not made up of bricks and sand but of human beings.
Humans are part of society and better society could
produce better persons.
We treat our employees as our greatest asset. We are
committed to attract, retain and develop the
dedicated work force of highest quality. We stress to
hire and promote our employees on the basis of their
qualification and performance. We are also
determined to provide equal opportunity to our
employees and provide them work environment free
from any illegal discrimination both direct and
indirect. Employees safety is on top at our priorities.
Best practices have been adopted and implemented
to ensure employees safety.
The company has privilege to send 12 employees for
Hajj through ballot each year. The company bears all
expenses of these employees pertaining to religious
offering. For us, the health and welfare of our
employees has always been a matter of supreme
importance. The company provides comprehensive
medical coverage to all employees and their families.
The company also invested in sports complex with
state of the art sports facilities for its employees.
Understanding the importance of education, the
company is operating two schools in DG Khan
bearing total cost of about PKR 20 million.
During the year, our company contributed more than
PKR 3.5 million towards flood affected people of D.G.
khan district and water supply at Chakwal district.
The company operates ambulance for its employees
and nearby locality. The company operates a free
medical centre in Chakwal. Further, in case of any
mishap on motorway or nearby vicinity of Khairpur
factory the company provides support for restoration
by providing equipments with services free of any
cost.

19
Carbon Credits
Our four projects two of waste heat recovery and two
of alternate fuels have been approved by UNFCCC.
Excepted per annum CERs from these four projects
would amount to approximately 350,000. First
verification of these CERs is now due. This is an
evidence of the company’s commitment to cleaner
and healthier environment.
Appropriation
The Board, keeping in view the profitability and
capacity expansion requirements, decided to
recommend dividend of PKR 3 per share for FY 13.
Auditors
The present auditors, M/s A. F. Ferguson & Co.,
Chartered Accountants retire and offer themselves
for reappointment.
The Board has recommended the appointment of
M/s A. F. Ferguson & Co., Chartered Accountants as
auditors for the ensuing year as suggested by the
Audit Committee subject to approval of the members
in the forthcoming Annual General Meeting.
Compliance with Code of Corporate Governance
The requirements of the Code of Corporate
Governance set out by Karachi, Lahore and
Islamabad Stock Exchanges in their Listing
Regulations, relevant for the year ended 30 June 2013
have been adopted by the company and have
been fully complied with. A Statement to this effect is
annexed to the Report.
Meeting of Board of Directors
During the year under consideration, seven (7) Board
meetings were held and the number of meetings
attended by each Director is given in the annexed
table.
Audit Committee
An Audit Committee of the Board has been in
existence since the enforcement of the Code of
Corporate Governance, which now comprises of two
(2) Non-Executive Directors (including its Chairman)

20
and one (1) Executive Director. During the year, 5
Meetings of the Audit Committee were held. The
Audit Committee has its terms of reference which
were determined by the Board of Directors in
accordance with the guidelines provided by the
Listing Regulations.
Corporate and Financial Reporting Frame work
The financial statements together with the notes
thereon have been drawn up by the management of
the company in conformity with the Company
Ordinance, 1984 and applicable International
Financial Reporting Standards (IFRS). These
Statements present fairly the company’s state of
affairs, the results of its operations, cash flow and
changes in equity.
• Any departure from the application of IFRS has
been adequately disclosed in” Notes to the
Accounts” of financial statements.
• Proper books of account have been maintained
by the company.
• Appropriate accounting policies have been
consistently applied in the preparation of
financial statements and accounting estimates
are based on reasonable and prudent judgment.
• The system of internal control is sound in design
and has been effectively implemented and
monitored and is being continuously reviewed by
the internal auditors.
• There are no doubts upon the company’s ability
to continue as a going concern.
• There has been no material departure from the
best Practices of Corporate Governance, as
detailed in the Listing Regulations.
• The key operating and financial data for the last
six years is annexed.
• Value of investments of Provident Fund based on
its audited financial statements is Rs.622.806
million (2012: Rs 513.350 million).
Pattern of Shareholding
A statement of pattern of shareholding of certain
class of shareholders as at 30 June 2013, disclosure of
which is required under the reporting frameworks, is
included in the annexed shareholders’ information.
The Directors, Chief Executive, Chief Financial Officer,
Company Secretary, their spouses or minor children
did not carry out any trade in the shares of the
company during the year.
Company’s Staff and Customers
We wish to record our appreciation of continued
commitment of our employees and patronage of our
customers.
Mian Raza Mansha
Chief Executive Officer
Lahore: September 04, 2013

21
Revenue Distribution 2013
Other operating
costs - Net 2%
Reinvested in
business 23%
Providers
of Capital
3%
Government
19%
Employees
4%
Suppliers: 49%
49%
4% 4%
19%
23%
19%
2% 4%
14%
3%
6%
53%
Suppliers Employees
2013
Government Providers
of Capital
Reinvested
in business
Other operating
costs - Net
Revenue Distribution
2012
STATEMENT OF VALUE ADDITION
FOR THE YEAR ENDED JUNE 30, 2013
2013 2012
(Rupees in thousand) (Rupees in thousand)
Revenue Generated
Revenues:
- Local sales 22,733,690 20,258,088
- Exports 6,866,192 29,599,882 95% 7,146,522 27,404,610 96%
Income from other sources
- Investment income 1,295,633 1,058,707
- Other income 170,656 1,466,289 5% 129,229 1,187,936 4%
31,066,171 100% 28,592,546 100%
Revenue Distributed
Suppliers:
- Raw and packing materials 2,036,742 1,877,887
- Services 1,690,951 2,155,540
- Stores spares 1,940,394 1,599,699
- Fuels and energy 9,260,559 14,928,646 49% 9,379,576 15,012,702 53%
Employees 1,376,040 4% 1,155,599 4%
Government:
- Direct taxes 1,593,689 (55,652)
- Indirect taxes 4,328,090 4,177,559
- Other levies and duties - 5,921,779 19% - 4,121,907 14%
Providers of Capital:
- Banks 994,880 1,670,784
- Ordinary share holders - 994,880 3% - 1,670,784 6%
Reinvested in business
- Depreciation 1,596,207 1,466,164
- Profit for the year 5,502,166 7,098,373 23% 4,108,118 5,574,282 19%
Other operating costs - Net 746,453 2% 1,057,272 4%
31,066,171 100% 28,592,546 100%

22
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
-
(5.00)
Gross Profit to Sales (%) Net Profit to Sales (%)
2013
2012
2011
2010
2009
2008
OPERATING AND FINANCIAL DATA
2013 2012 2011 2010 2009 2008
PRODUCTION (M.Tons)
Clinker 3,924,090 3,773,948 3,738,404 4,684,379 3,946,101 4,142,764
Cement 4,031,801 4,004,458 4,176,733 4,908,593 3,877,296 4,227,767
SALES
Cement 4,008,276 4,018,956 4,165,635 4,908,962 3,854,949 4,233,953
Local 2,887,812 2,765,534 2,860,795 4,103,861 2,831,115 3,572,078
Export 1,120,464 1,253,422 1,304,840 805,101 1,023,834 661,875
Clinker
Local - - - - - 72,481
Export 6,000 5,945 98,521 71,041 177,064 95,202
OPERATING RESULTS (Rupees in thousand)
Net sales 24,915,924 22,949,853 18,577,198 16,275,354 18,038,209 12,445,996
Gross profit 9,326,007 7,506,755 4,384,969 2,705,360 5,679,730 1,915,273
Pre-tax profit/ (Loss) 7,095,858 4,052,466 601,192 358,403 776,900 (250,930)
After tax profit/ (Loss) 5,502,169 4,108,118 170,961 233,022 525,581 (53,230)
FINANCIAL POSITION
Current assets 25,983,994 18,440,377 18,325,209 16,417,492 13,287,591 19,202,591
Current liablilities 9,307,593 11,205,943 12,687,375 13,786,189 15,834,799 12,054,718
Property, Plant & Equipment 27,324,794 25,192,214 24,611,565 25,307,302 24,345,793 22,977,894
Total assets 63,526,719 50,685,198 49,703,229 47,046,043 42,723,041 51,992,934
Long term liabilites 3,053,873 4,882,554 5,090,685 5,274,674 4,528,224 8,538,959
Shareholder's equity 47,998,214 32,930,632 30,217,283 26,519,220 20,918,442 30,080,257
RATIOS
Current ratio 2.79 : 1 1.65 : 1 1.45 : 1 1.19 : 1 0.84 : 1 1. 59 : 1
Debt to equity ratio * 11 : 89 19 : 81 25 : 75 28 : 72 27: 73 45 : 55
Gross profit to sales (%) 37.43 32.71 23.60 16.62 31.49 15.39
Net profit to sales (%) 22.08 17.90 0.92 1.43 2.91 (0.43)
Break up value per Share (Rs.) 55.23 44.17 41.75 37.28 39.97 41.89
Earnings per share:
Basic (Rs.) 12.56 9.38 0.45 0.70 1.63 (0.21)
Diluted (Rs.) 12.56 9.38 0.45 0.70 1.63 (0.21)
* Share holder capital to long
term loan non-current portion.

23
100
80
60
40
20
0
2013 2012 2011 2010 2009 2008
Equity times of Debt
3
2
1
0
2013 2012 2011 2010 2009 2008
Current Assets times of Current Liabilities
60.00
50.00
40.00
30.00
20.00
10.00
-
(10.00)
2013 2012 2011 2010 2009 2008
Break up value per share
Break Up Value & EPS
Earnings per share
2013 2012 2011 2010 2009
Total assets Shareholder’s equity
2008
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
-
2007 2008 2009 2010 2011 2012 2013 2014
Sales (MT) Net Sales (PKR)
Lincar (Sales (MT)) Linear (Net Sales (PKR))
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
PKRinthousands
PKRinthousands

25
With every house built
we accomplish
With every vehicle
passes through
bridge
we achieve
With every
development in nation
we share

26
1208 1 100 Shares 48996
1480 101 500 Shares 507513
934 501 1000 Shares 803315
1297 1001 5000 Shares 3271343
331 5001 10000 Shares 2625017
105 10001 15000 Shares 1361037
80 15001 20000 Shares 1467859
48 20001 25000 Shares 1135838
46 25001 30000 Shares 1313426
29 30001 35000 Shares 957180
20 35001 40000 Shares 762551
13 40001 45000 Shares 562020
25 45001 50000 Shares 1236347
11 50001 55000 Shares 586088
9 55001 60000 Shares 532400
7 60001 65000 Shares 451300
18 65001 70000 Shares 1244489
10 70001 75000 Shares 740406
6 75001 80000 Shares 462258
7 80001 85000 Shares 579200
4 85001 90000 Shares 351206
4 90001 95000 Shares 372949
21 95001 100000 Shares 2095453
3 100001 105000 Shares 313000
3 105001 110000 Shares 328120
4 115001 120000 Shares 480000
4 120001 125000 Shares 492050
2 125001 130000 Shares 253500
2 130001 135000 Shares 266500
3 135001 140000 Shares 420000
1 140001 145000 Shares 141000
6 145001 150000 Shares 900000
4 150001 155000 Shares 604722
2 155001 160000 Shares 315000
5 160001 165000 Shares 821184
1 165001 170000 Shares 169500
1 170001 175000 Shares 172800
2 180001 185000 Shares 368790
6 195001 200000 Shares 1197000
2 200001 205000 Shares 402678
1 205001 210000 Shares 206000
1 215001 220000 Shares 216000
1 220001 225000 Shares 225000
2 225001 230000 Shares 454500
1 230001 235000 Shares 233000
1 240001 245000 Shares 242000
2 245001 250000 Shares 496240
1 250001 255000 Shares 252300
1 255001 260000 Shares 259200
2 285001 290000 Shares 575600
1 290001 295000 Shares 294000
4 295001 300000 Shares 1200000
2 310001 315000 Shares 626500
1 330001 335000 Shares 333800
NO. OF SHARE HOLDING TOTAL SHARES
SHAREHOLDERS FROM (NO. OF SHARES) TO HELD
PATTERN OF SHARE HOLDING AS AT JUNE 30, 2013 (ORDINARY SHARES)
Continued

27
1 335001 340000 Shares 339500
1 350001 355000 Shares 354800
1 355001 360000 Shares 360000
1 365001 370000 Shares 366500
1 375001 380000 Shares 377501
1 395001 400000 Shares 400000
2 400001 405000 Shares 809341
2 425001 430000 Shares 853853
1 435001 440000 Shares 437690
2 440001 445000 Shares 883726
1 460001 465000 Shares 462000
1 475001 480000 Shares 480000
1 490001 495000 Shares 493000
5 495001 500000 Shares 2499208
1 545001 550000 Shares 550000
1 550001 555000 Shares 552000
1 570001 575000 Shares 570500
2 575001 580000 Shares 1156871
1 590001 595000 Shares 591000
1 600001 605000 Shares 604300
1 625001 630000 Shares 625200
1 630001 635000 Shares 633000
2 660001 665000 Shares 1328444
1 680001 685000 Shares 683000
1 690001 695000 Shares 691500
1 735001 740000 Shares 735046
1 740001 745000 Shares 742500
2 745001 750000 Shares 1500000
3 755001 760000 Shares 2275300
1 780001 785000 Shares 784500
1 790001 795000 Shares 795000
4 795001 800000 Shares 3191707
1 800001 805000 Shares 802080
1 840001 845000 Shares 842409
1 850001 855000 Shares 850320
1 935001 940000 Shares 936500
1 950001 955000 Shares 955000
1 980001 985000 Shares 981849
2 990001 995000 Shares 1986000
1 995001 1000000 Shares 1000000
1 1030001 1035000 Shares 1032100
1 1050001 1055000 Shares 1053232
1 1065001 1070000 Shares 1066800
1 1095001 1100000 Shares 1100000
1 1100001 1105000 Shares 1103500
1 1155001 1160000 Shares 1159546
1 1205001 1210000 Shares 1209600
1 1215001 1220000 Shares 1215708
1 1240001 1245000 Shares 1242000
1 1280001 1285000 Shares 1281000
1 1300001 1305000 Shares 1300879
1 1330001 1335000 Shares 1331973
1 1395001 1400000 Shares 1395677
1 1400001 1405000 Shares 1402500
1 1410001 1415000 Shares 1415000
1 1465001 1470000 Shares 1469500
Continued

28
1 1495001 1500000 Shares 1500000
1 1545001 1550000 Shares 1548485
1 1650001 1655000 Shares 1651805
1 1720001 1725000 Shares 1722800
1 1795001 1800000 Shares 1800000
1 1920001 1925000 Shares 1924079
1 1945001 1950000 Shares 1948800
1 1950001 1955000 Shares 1955000
1 1955001 1960000 Shares 1956760
1 1985001 1990000 Shares 1990000
1 2035001 2040000 Shares 2039500
1 2055001 2060000 Shares 2058000
1 2175001 2180000 Shares 2177500
1 2240001 2245000 Shares 2241500
1 2245001 2250000 Shares 2246400
1 2330001 2335000 Shares 2331000
1 2440001 2445000 Shares 2443430
1 2670001 2675000 Shares 2674500
1 2705001 2710000 Shares 2707944
1 2750001 2755000 Shares 2751181
2 3045001 3050000 Shares 6091200
1 3095001 3100000 Shares 3096607
1 3135001 3140000 Shares 3140000
1 3330001 3335000 Shares 3332100
1 3655001 3660000 Shares 3655911
1 3870001 3875000 Shares 3872181
1 3995001 4000000 Shares 4000000
1 4330001 4335000 Shares 4332532
1 4635001 4640000 Shares 4635974
1 4730001 4735000 Shares 4734000
1 4905001 4910000 Shares 4909249
1 5070001 5075000 Shares 5072000
1 5385001 5390000 Shares 5386000
1 6005001 6010000 Shares 6006253
1 7215001 7220000 Shares 7216722
1 8060001 8065000 Shares 8060906
1 8820001 8825000 Shares 8821028
1 9365001 9370000 Shares 9367500
1 9860001 9865000 Shares 9862617
1 11145001 11150000 Shares 11149920
1 13125001 13130000 Shares 13126141
1 15725001 15730000 Shares 15729997
1 21285001 21290000 Shares 21289060
1 22925001 22930000 Shares 22929033
1 114645001 114650000 Shares 114645168
5903 TOTAL 438119118

29
Categories of Shareholders AS ON June 30, 2013
Shares Held %
1. Directors, Chief Executive Officer, 18,708,591 4.27
and their spouse and minor children
2. Associated Companies, undertakings 140,282,145 32.02
and related parties.
3. NIT and ICP 8,822,533 2.01
4. Banks Development Financial 31,790,255 7.26
Institutions Non Banking Financial Institutions.
5. Insurance Companies 7,532,027 1.72
6. Modarabas and Mutual Funds 52,939,580 12.08
7. Shareholders holding 10% 137,574,201 31.40
8. General Public :
a. Local 50,869,266 11.61
b. Foreign 66,102,364 15.09
9. Others
Joint Stock Companies 146,876,820 33.52
Investment Companies 5,711,528 1.30
Pension Funds, Provident Funds etc. 2,120,467 0.48

30
No. of Shares %
I. Associated Companies, undertakings and related parties
Nishat Mills Limited 137,574,201 31.40
Adamje Insurance Company Limited 2,707,944 0.62
II. Mutual Funds:
NATIONAL BANK OF PAKISTAN-TRUSTEE DEPARTMENT NI(U)T FUND 2,751,181 0.63
CDC - TRUSTEE PAKISTAN STOCK MARKET FUND 88,250 0.02
MCBFSL - TRUSTEE JS VALUE FUND 2,177,500 0.50
CDC - TRUSTEE PAKISTAN CAPITAL MARKET FUND 17,500 0.00
CDC - TRUSTEE PICIC INVESTMENT FUND 2,674,500 0.61
CDC - TRUSTEE JS LARGE CAP. FUND 1,500,000 0.34
CDC - TRUSTEE PICIC GROWTH FUND 5,386,000 1.23
CDC - TRUSTEE PAK STRATEGIC ALLOC. FUND 20,100 0.00
CDC - TRUSTEE ATLAS STOCK MARKET FUND 500,000 0.11
CDC - TRUSTEE MEEZAN BALANCED FUND 842,409 0.19
CDC - TRUSTEE JS ISLAMIC FUND 500,000 0.11
CDC - TRUSTEE ALFALAH GHP VALUE FUND 499,208 0.11
CDC - TRUSTEE UNIT TRUST OF PAKISTAN 800,000 0.18
CDC - TRUSTEE JS AGGRESSIVE ASSET ALLOCATION FUND 165,000 0.04
ASIAN STOCK FUND LIMITED 1,415,000 0.32
CDC - TRUSTEE AKD INDEX TRACKER FUND 57,537 0.01
SAFEWAY MUTUAL FUND LIMITED 1,469,500 0.34
CDC-TRUSTEE PAK. INT. ELEMENT ISLAMIC ASSET ALLOCATION FUND 78,500 0.02
MC FSL - TRUSTEE JS KSE-30 INDEX FUND 11,738 0.00
CDC - TRUSTEE AL MEEZAN MUTUAL FUND 1,651,805 0.38
CDC - TRUSTEE MEEZAN ISLAMIC FUND 7,216,722 1.65
CDC - TRUSTEE UBL STOCK ADVANTAGE FUND 995,000 0.23
CDC - TRUSTEE ATLAS ISLAMIC STOCK FUND 500,000 0.11
CDC - TRUSTEE UBL SHARIA STOCK FUND 955,000 0.22
CDC - TRUSTEE NAFA STOCK FUND 285,600 0.07
CDC - TRUSTEE NAFA MULTI ASSET FUND 120,000 0.03
CDC - TRUSTEE MCB DYNAMIC STOCK FUND 71,406 0.02
CDC - TRUSTEE ASKARI ASSET ALLOCATION FUND 151,440 0.03
CDC - TRUSTEE MEEZAN TAHAFFUZ PENSION FUND - EQUITY SUB FUND 796,397 0.18
CDC - TRUSTEE APF-EQUITY SUB FUND 75,000 0.02
CDC - TRUSTEE JS PENSION SAVINGS FUND - EQUITY ACCOUNT 55,000 0.01
CDC - TRUSTEE ALFALAH GHP ISLAMIC FUND 462,000 0.11
CDC - TRUSTEE HBL - STOCK FUND 3,096,607 0.71
CDC - TRUSTEE NAFA ISLAMIC MULTI ASSET FUND 43,500 0.01
CDC - TRUSTEE APIF - EQUITY SUB FUND 95,000 0.02
MC FSL - TRUSTEE JS GROWTH FUND 4,734,000 1.08
CDC - TRUSTEE HBL MULTI - ASSET FUND 404,341 0.09
FIRST CAPITAL MUTUAL FUND LIMITED 49,900 0.01
CDC - TRUSTEE JS ISLAMIC PENSION SAVINGS FUND-EQUITY ACCOUNT 84,500 0.02
CDC - TRUSTEE IGI STOCK FUND 366,500 0.08
CDC - TRUSTEE ALFALAH GHP ALPHA FUND 98,953 0.02
CDC - TRUSTEE NIT-EQUITY MARKET OPPORTUNITY FUND 4,332,532 0.99
CDC - TRUSTEE ABL STOCK FUND 784,500 0.18
MC FSL-TRUSTEE ASKARI ISLAMIC ASSET ALLOCATION FUND 151,000 0.03
CDC - TRUSTEE FIRST HABIB STOCK FUND 86,000 0.02
CDC - TRUSTEE LAKSON EQUITY FUND 72,000 0.02
CDC - TRUSTEE CROSBY DRAGON FUND 120,550 0.03
MCBFSL-TRUSTEE URSF-EQUITY SUB FUND 127,500 0.03
MCBFSL-TRUSTEE UIRSF-EQUITY SUB FUND 104,500 0.02
CDC-TRUSTEE NAFA ASSET ALLOCATION FUND 121,500 0.03
CDC-TRUSTEE PAKISTAN PREMIER FUND 45,947 0.01
CDC-TRUSTEE NAFA SAVINGS PLUS FUND - MT 441,000 0.10
Information Under Clause ( j ) of sub-regulation (XVI) of Regulation 35 of chapter (XI) of Listing
Regulations of the Karachi Stock Exchange Limited As at June 30, 2013

31
CDC - TRUSTEE AKD AGGRESSIVE INCOME FUND - MT 15,000 0.00
CDC - TRUSTEE PICIC INCOME FUND - MT 311,500 0.07
CDC-TRUSTEE HBL ISLAMIC STOCK FUND 604,300 0.14
CDC-TRUSTEE MEEZAN CAPITAL PROTECTED FUND-II 401 0.00
CDC - TRUSTEE PICIC STOCK FUND 126,000 0.03
CDC - TRUSTEE HBL IPF EQUITY SUB FUND 82,000 0.02
CDC - TRUSTEE HBL PF EQUITY SUB FUND 44,000 0.01
CDC - TRUSTEE ASKARI EQUITY FUND 141,000 0.03
MCBFSL - TRUSTEE NAMCO BALANCED FUND - MT 9,000 0.00
MCBFSL - TRUSTEE ABL AMC CAPITAL PROTECTED FUND 40,000 0.01
CDC - TRUSTEE KSE MEEZAN INDEX FUND 426,653 0.10
MCBFSL - TRUSTEE PAK OMAN ADVANTAGE ASSET ALLOCATION FUND 125,000 0.03
MCBFSL - TRUSTEE PAK OMAN ISLAMIC ASSET ALLOCATION FUND 100,000 0.02
CDC - TRUSTEE LAKSON INCOME FUND - MT 9,000 0.00
CDC-TRUSTEE FIRST HABIB ISLAMIC BALANCED FUND 54,500 0.01
CDC - TRUSTEE ATLAS INCOME FUND - MT 339,500 0.08
CDC - TRUSTEE KASB INCOME OPPORTUNITY FUND - MT 20,000 0.00
MCBFSL - TRUSTEE ABL ISLAMIC STOCK FUND 795,000 0.18
III. Directors and their spouse(s) and minor children:
Mrs. Naz Mansha Director/Chairperson 113,098 0.03
Mian Raza Mansha Director/CEO 12,696,880 2.90
Mr. Khalid Qadeer Qureshi Director 720 0.00
Mr. Farid Noor Ali Fazal Director 1,200 0.00
Mr. I.U. Niazi Director/CFO 2,775 0.00
Ms. Nabiha Shahnawaz Cheema Director 2,820 0.00
Mrs. Ammil Raza Mansha Spouse of CEO 5,891,098 1.34
IV. Executives:
Nil
V. Public Sector Companies and Corporations:
Joint Stock Companies 146,876,820 33.52
VI. Banks, Development Finance Institutions, Non-banking Finance
Companies, Insurance Companies, Takaful, Modaraba and
Pension Funds:
Investment Companies 5,711,528 1.30
Insurance Companies 7,532,027 1.72
Financial Institutions 31,790,255 7.26
Modaraba Companies 47,103 0.01
Mutual Funds 52,892,477 12.07
Pension Funds/Providend Funds Etc. 2,120,467 0.48
VII. Shareholders holding Five percent or more voting interest
in the Listed Company
Mian Umer Mansha 27,295,313 6.23
Mian Hassan Mansha 26,879,917 6.14
Nishat Mills Limited 137,574,201 31.40
Information Under Clause ( l ) of sub-regulation (XVI) of Regulation 35 of chapter (XI) of Listing Regulations of
the Karachi Stock Exchange Limited As at June 30, 2013
There is no trading in the shares of the Company, carried out by its directors, executives and their spouses and
minor children during the period July 1, 2012 to June 30, 2013

32
ATTENDANCE OF DIRECTORS IN BOARD MEETINGS DURING THE YEAR JULY 01, 2012 TO JUNE 30, 2013
During the year under review, Seven Board of Directors Meetings were held, attendance position was as under:-
Sr. No. Name of Director No. of meetings attended
1. Mrs. Naz Mansha 2
2 Mian Raza Mansha 5
3 Dr. Arif Bashir 7
4 Mr. Khalid Qadeer Qureshi 7
5 Mr. Farid Noor Ali Fazal 6
6 Mr. I. U. Niazi 7
7 Ms. Nabiha Shahnawaz Cheema 6
ATTENDANCE OF MEMBERS IN AUDIT COMMITTEE MEETINGS DURING THE YEAR JULY 01, 2012 TO JUNE 30, 2013
During the year under review, Five Audit Committee Meetings were held, attendance position was as under:-
Sr. No. Name of Member No. of meetings attended
1. Mr. Khalid Qadeer Qureshi (Member/Chairman) 5
2. Mr. Farid Noor Ali Fazal (Member) 5
3. Ms. Nabiha Shahnawaz Cheema (Member) 4

33
Name of company D.G. Khan Cement Company Limited
Year ending June 30, 2013.
This statement is being presented to comply with the Code of Corporate Governance contained in Regulation
No.35 of listing regulations of Karachi Stock Exchange Ltd, Lahore Stock Exchange Ltd and Islamabad Stock
Exchange Ltd for the purpose of establishing a framework of good governance, whereby a listed company is
managed in compliance with the best practices of corporate governance.
The company has applied the principles contained in the CCG in the following manner: -
1. The company encourages representation of independent non-executive directors and directors
representing minority interests on its board of directors. At present the board includes:
Category Names
Independent Directors Nil
Executive Directors Mian Raza Mansha
Mr. Farid Noor Ali Fazal
Dr. Arif Bashir
Mr. I.U. Niazi
Non Executive Directors Mrs. Naz Mansha
Mr. Khalid Qadeer Qureshi
Ms. Nabiha Shahnawaz Cheema
The requirement of Executive Directors and Independent Director in composition of Board under CCG will be
met at the time of next election of directors.
2. The directors have confirmed that none of them is serving as a director on more than seven listed
companies, including this company (excluding the listed subsidiaries of listed holding companies
where applicable).
3. All the resident directors of the company are registered as taxpayers and none of them has defaulted
in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock
exchange, has been declared as a defaulter by that stock exchange.
4. No casual vacancy occurred on the board during the year.
5. 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.
6. The board has developed a vision/mission statement, overall corporate strategy and significant policies
of the company. A complete record of particulars of significant policies along with the dates on which
they were approved or amended has been maintained.
7. All the powers of the board have been duly exercised and decisions on material transactions,
including appointment and determination of remuneration and terms and conditions of employment
of the CEO, other executive and non-executive directors, have been taken by the board/
shareholders.
8. The meetings of the board were presided over by the Chairperson and, in his absence, by a director
elected by the board for this purpose and the board met at least once in every quarter. Written notices
of the board meetings, along with agenda and working papers, were circulated at least seven
days before the meetings. The minutes of the meetings were appropriately recorded and circulated
courses.
9. Orientation Course: -
All the directors on the Board are fully conversant with their duties and responsibilities as directors of
corporate bodies. The directors were apprised of their duties and responsibilities through orientation
courses.
STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE (CCG) [See clause (xl)]

34
Directors’ Training Programme: -
(i) Three (3) Directors of the Company are exempt from directors training programme due to 14
years of education and 15 years of experience on the board of a listed company.
(ii) One director Ms. Nabiha Shahnawaz Cheema has completed the directors training programme
from the Institute of Chartered Accountants of Pakistan.
10. No new appointment of CFO, Company Secretary and Head of Internal Audit has been approved
by the board. The remuneration of CFO, Head of Internal Audit and Company Secretary was revised
during the year after due approval of the Board.
11. The directors’ report for this year has been prepared in compliance with the requirements of the CCG
and fully describes the salient matters required to be disclosed.
12. The financial statements of the company were duly endorsed by CEO and CFO before approval of
the board.
13. The directors, CEO and executives do not hold any interest in the shares of the company other than
that disclosed in the pattern of shareholding.
14. The company has complied with all the corporate and financial reporting requirements of the CCG.
15. The board has formed an Audit Committee. It comprises 3 members, of whom 2 are non-executive
directors and the Chairman of the committee is not an independent director and will be changed
after next election of directors.
16. The meetings of the audit committee were held at least once every quarter prior to approval of interim
and final results of the company and as required by the CCG. The terms of reference of the committee
have been formed and advised to the committee for compliance.
17. The board has formed an HR and Remuneration Committee. It comprises 3 members, of whom 2 are
non-executive directors and the chairman of the committee is a Non Executive director.
18. 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
and they are involved in the internal audit function on full time basis.
19. The statutory auditors of the company have confirmed that they have been given a satisfactory
rating under the quality control review program of the ICAP, that they or any of the partners of the
firm, their spouses and minor children do not hold shares of the company and that the firm and all its
partners are in compliance with International Federation of Accountants (IFAC) guidelines on code
of ethics as adopted by the ICAP.
20. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the listing regulations and the auditors have confirmed that they
have observed IFAC guidelines in this regard.
21. The ‘closed period’, prior to the announcement of interim/final results, and business decisions, which
may materially affect the market price of company’s securities, was determined and intimated to
directors, employees and stock exchange(s).
22. Material/price sensitive information has been disseminated among all market participants at once
through stock exchange(s).
23. We confirm that all other material principles enshrined in the CCG have been complied.
MIAN RAZA MANSHA
CHIEF EXECUTIVE
NIC Number : 35202-2539500-5

35
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate
Governance prepared by the Board of Directors of D.G. Khan Cement Company Limited (‘the Company’) to
comply with the Listing Regulation No. 35 of the Karachi, Lahore and Islamabad Stock Exchanges, where the
Company is listed.
The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of
the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of
the Code of Corporate Governance and report if it does not. 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 Code.
As part of our audit of 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’s statement on internal controls 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.
Further, Sub-Regulation 35 (x) of the Listing Regulations of Karachi, Lahore and Islamabad Stock Exchanges
require the Company to place before the Board of Directors for their consideration and approval related party
transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s
length transactions and transactions which are not executed at arm’s length price recording proper
justification for using such alternate pricing mechanism. Further, all such transactions are also required to be
separately placed before the audit committee. We are only required and have ensured compliance of
requirement to the extent of approval of related party transactions by the Board of Directors and placement
of such transactions before the audit committee.
We have not carried out any procedures to determine whether the related party transactions were
undertaken at arm’s length price or not.
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 best practices contained in the Code of Corporate Governance as applicable
to the Company for the year ended June 30, 2013.
A. F. Ferguson & Co.
Chartered Accountants
Lahore,
Date: September 27, 2013
Name of engagement partner: Muhammad Masood
REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES
OF CODE OF CORPORATE GOVERNANCE

19
Financial
Statements

39
We have audited the annexed balance sheet of D.G. Khan Cement Company Limited as at June 30, 2013 and
the related profit and loss account, statement of comprehensive income, statement of changes in equity and
cash flow statement together with the notes forming part thereof, for the year then ended 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 our audit.
It is the responsibility of the company’s management to establish and maintain a system of internal control, and
prepare and present the above said statements in conformity with the approved accounting standards and
the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
require that we plan and perform the audit to obtain reasonable assurance about whether the above said
statements are free of any material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the above said statements. An audit also includes assessing the
accounting policies and significant estimates made by management, as well as, evaluating the overall
presentation of the above said statements. We believe that our audit provides a reasonable basis for our
opinion and, after due verification, we report that:
(a) in our opinion, proper books of account have been kept by the company as required by the
Companies Ordinance, 1984;
(b) in our opinion:
(i) the balance sheet and profit and loss account together with the notes thereon have been drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of
account and are further in accordance with accounting policies consistently applied except for
the changes resulted on initial application of standards, amendments or interpretations to existing
standards, as stated in note 2.2.1 to the annexed financial statements with which we concur;
(ii) the expenditure incurred during the year was for the purpose of the company’s business; and
(iii) the business conducted, investments made and the expenditure incurred during the year were in
accordance with the objects of the company;
(c) in our opinion and to the best of our information and according to the explanations given to us, the
balance sheet, profit and loss account, statement of comprehensive income, statement of
changes in equity and cash flow statement together with the notes forming part thereof conform
with approved accounting standards as applicable in Pakistan, and, give the information required
by the Companies Ordinance, 1984, 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, 2013 and of the profit, total comprehensive
income, changes in equity and its cash flows for the year then ended; and
(d) in our opinion, 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.
Lahore,
AUDITORS' REPORT TO THE MEMBERS

Chief Executive
2013 2012
Note ----(Rupees in thousand)----
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Authorised capital
- 950,000,000 (2012: 950,000,000)
ordinary shares of Rs 10 each 9,500,000 9,500,000
- 50,000,000 (2012: 50,000,000)
preference shares of Rs 10 each 500,000 500,000
10,000,000 10,000,000
Issued, subscribed and paid up capital
438,119,118 (2012: 438,119,118)
ordinary shares of Rs 10 each 5 4,381,191 4,381,191
Reserves 6 33,785,204 23,562,612
Accumulated profit 9,831,819 4,986,829
47,998,214 32,930,632
NON-CURRENT LIABILITIES
Long term finances 7 2,899,187 4,629,083
Long term deposits 8 65,383 68,355
Retirement and other benefits 9 89,303 185,116
Deferred taxation 10 3,167,039 1,666,069
6,220,912 6,548,623
CURRENT LIABILITIES
Trade and other payables 11 2,286,351 2,108,894
Accrued finance cost 12 125,830 162,931
Short term borrowing-secured 13 5,420,290 6,733,467
Current portion of non-current liabilities 14 1,440,032 2,165,561
Provision for taxation 35,090 35,090
9,307,593 11,205,943
CONTINGENCIES AND COMMITMENTS 15 - -
63,526,719 50,685,198
The annexed notes 1 to 46 form an integral part of these financial statements.
BALANCE SHEET
40

Director
2013 2012
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 16 28,740,974 27,185,726
Intangible assets 17 55,356 73,808
Investments 18 8,650,860 4,864,945
Long term loans and deposits 19 95,535 120,342
37,542,725 32,244,821
CURRENT ASSETS
Stores, spare parts and loose tools 20 4,107,003 4,137,262
Stock-in-trade 21 1,661,721 954,645
Trade debts 22 273,535 317,970
Investments 23 17,862,718 11,126,051
Advances, deposits, prepayments
and other receivables 24 611,777 621,001
Income tax receivable 996,522 855,007
Derivative financial instrument 25 1,837 -
Cash and bank balances 26 468,881 428,441
25,983,994 18,440,377
63,526,719 50,685,198
AS AT JUNE 30, 2013
41

DirectorChief Executive
2013 2012
Sales 27 24,915,924 22,949,853
Cost of sales 28 (15,589,917) (15,443,098)
Gross profit 9,326,007 7,506,755
Administrative expenses 29 (405,579) (267,705)
Selling and distribution expenses 30 (1,751,174) (2,202,901)
Other operating expenses 31 (544,806) (500,835)
Other income 32 1,466,289 1,187,936
Profit from operations 8,090,737 5,723,250
Finance cost 33 (994,879) (1,670,784)
Profit before taxation 7,095,858 4,052,466
Taxation 34 (1,593,689) 55,652
Profit after taxation 5,502,169 4,108,118
Earnings per share - basic and diluted 35 12.56 9.38
PROFIT AND LOSS ACCOUNT
42

2013 2012
----(Rupees in thousand)----
Other comprehensive income /(loss) for the year - net of tax
Items that may be re-classified subsequently to profit and loss
Available for sale financial assets
- Change in fair value of available for sale investments 10,222,592 (1,394,769)
Total comprehensive income for the year 15,724,761 2,713,349
STATEMENT OF COMPREHENSIVE INCOME
43

CASH FLOW STATEMENT
2013 2012
Cash flows from operating activities
Cash generated from operations 36 8,108,646 6,162,787
Finance cost paid (1,177,447) (1,792,708)
Retirement and other benefits paid (174,011) (20,205)
Taxes paid (234,234) (335,702)
Long term deposits - net (2,972) (2,538)
Net cash generated from operating activities 6,519,982 4,011,634
Cash flows from investing activities
Fixed capital expenditure (3,173,088) (2,751,451)
Proceeds from sale of property, plant and equipment 51,621 30,300
Long term loans, advances and deposits - net 24,807 12,877
Interest received 49,841 52,735
Dividend received 995,643 1,058,707
Net cash used in investing activities (2,051,176) (1,596,832)
Cash flows from financing activities
Proceeds from long term finances 800,000 1,906,382
Repayment of long term finances (3,258,010) (2,132,049)
Dividend paid (657,179) -
Net cash used in financing activities (3,115,189) (225,667)
Net increase in cash and cash equivalents 1,353,617 2,189,135
Cash and cash equivalents at the beginning of the year (6,305,026) (8,494,161)
Cash and cash equivalents at the end of the year 37 (4,951,409) (6,305,026)
44

Director
STATEMENT OF CHANGES IN EQUITY
Chief Executive
Balance as on June 30, 2011 4,381,191 4,557,163 14,974,881 353,510 5,071,827 878,711 30,217,283
- Profit for the year - - - - - 4,108,118 4,108,118
- Other comprehensive loss
for the year - - (1,394,769) - - - (1,394,769)
Total comprehensive income
for the year - - (1,394,769) - - 4,108,118 2,713,349
Balance as on June 30, 2012 4,381,191 4,557,163 13,580,112 353,510 5,071,827 4,986,829 32,930,632
Transactions with owners
Final Dividend for the year
ended June 30, 2012
Rs 1.50 per share - - - - - (657,179) (657,179)
- Profit for the year - - - - - 5,502,169 5,502,169
- Other comprehensive
income for the year - - 10,222,592 - - - 10,222,592
Total comprehensive
income for the year - - 10,222,592 - - 5,502,169 15,724,761
Balance as on June 30, 2013 4,381,191 4,557,163 23,802,704 353,510 5,071,827 9,831,819 47,998,214
Share
capital
Share
premium
Fair
value
reserve
Capital
redemption
reserve
fund
General
reserve
Accumulated
profit Total
( R u p e e s i n t h o u s a n d )
Capital reserve Revenue reserve
45

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. Legal status and nature of business
D. G. Khan Cement Company Limited ("the Company") is a public limited Company incorporated in
Pakistan and is listed on Karachi, Lahore and Islamabad Stock Exchanges. It is principally engaged in
production and sale of Clinker, Ordinary Portland and Sulphate Resistant Cement. The registered office of
the Company is situated at 53-A Lawrence Road, Lahore.
2. Basis of preparation
2.1 These financial statements have been prepared in accordance with the requirements of the
Companies Ordinance, 1984 (the Ordinance) and the approved accounting standards as applicable
in Pakistan. Approved accounting standards comprise of such International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board and Islamic Financial
Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as are
notified under the Companies Ordinance, 1984, provisions of and directives issued under the
Companies Ordinance, 1984. Wherever the requirements of the Companies Ordinance, 1984 or
directives issued by Securities and Exchange Commission of Pakistan differ with the requirements of
IFRS or IFAS, the requirements of the Companies Ordinance, 1984 or the requirements of the said
directives prevail.
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
Company's 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 and are relevant to the Company.
There were certain new standards, amendments to the approved accounting standards and new
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).
Interpretations which became effective during the year but are considered not to be relevant or have
any significant effect on the Company's operations and are, therefore, not disclosed in these financial
statements except for the amendment to IAS1 'Presentation of financial statements' regarding' other
comprehensive income' as explained below :
- Amendment to IAS 1, ‘Financial statement presentation’ regarding other comprehensive income,
emphasises on the requirement for entities to group items presented in other comprehensive income
(OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently
(reclassification adjustments). The application of the amendment will not affect the results or net
assets of the Company as it is only concerned with presentation and disclosures.
2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Company.
The following amendments and interpretations to existing standards have been published and are
mandatory for the Company's accounting periods beginning on or after July 01, 2013 or later periods,
and the Company has not early adopted them:
- IFRS 7, ‘Disclosures on offsetting financial assets and financial liabilities' (Amendment), issued on
December 19, 2011. The new disclosure requirements apply to offsetting of financial assets and
financial liabilities. The amendment clarifies that the right of set-off must be available at present i.e. it
is not contingent on a future event and must be legally enforceable for all counterparties. This
amendment reflects the requirements to enhance current offsetting disclosures. The new disclosure is
intended to facilitate comparison between those entities that prepare IFRS financial statements and
46

those that prepare US GAAP financial statements. The Company shall apply these amendments for
the financial reporting period commencing on July 01, 2013 and does not expect to have any
material impact on its financial statements.
- IAS 19, 'Employee Benefits' (Amendment), issued on June 2011. This is applicable on annual periods
beginning on or after 1 January 2013. These amendments eliminate the corridor approach and
calculate finance costs on a net funding basis. The Company shall apply these amendments for the
financial reporting period commencing on July 01, 2013 and is yet to assess the impact of this
transition.
- IFRS 9, ‘Financial Instruments’, addresses the classification, measurement and derecognition of
financial assets and financial liabilities. The standard is not applicable until January 01, 2015 but is
available for early adoption. This is the first part of a new standard on classification and measurement
of financial assets and financial liabilities that will replace IAS 39, ‘Financial Instruments: Recognition
and measurement’. IFRS 9 has two measurement categories: amortised cost and fair value. All equity
instruments are measured at fair value. A debt instrument is measured at amortised cost only if the
entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the IAS 39 requirements. These include amortised-cost
accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is
that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change
due to an entity's own credit risk is recorded in other comprehensive income rather than the income
statement, unless this creates an accounting mismatch. This change will mainly affect financial
institutions. There will be no impact on the company’s accounting for financial liabilities, as the new
requirements only affect the accounting for financial liabilities that are designated at fair value
through profit or loss, and the company does not have any such liabilities.
- IFRS 10, 11 and 12, (Amendment on transitional guidance) , issued on July 2012, is applicable on
annual periods beginning on or after January 01, 2013, provide additional transition relief in IFRSs 10, 11
and 12, limiting the requirement to provide adjusted comparative information to only the preceding
comparative period. For disclosures related to unconsolidated structured entities, the amendments
will remove the requirement to present comparative information for periods before IFRS 12 is first
applied. The Company shall apply this amendment for the financial reporting period commencing on
July 01, 2013 and does not expect to have any material impact on its financial statements.
- IFRS 11, 'Joint Arrangements', applicable on annual periods beginning on or after January 01, 2013, is
a more realistic reflection of joint arrangements by focusing on the rights and obligations of the
arrangement rather than its legal form. There are two types of joint arrangement: joint operations and
joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations
relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and
expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement
and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer
allowed. The Company shall apply these amendments for the financial reporting period commencing
on July 01, 2013 and does not expect to have any material impact on its financial statements.
- IFRS 12 - ‘Disclosures of interests in other entities’. This is applicable on accounting periods beginning
on or after January 01, 2013. This standard includes the disclosure requirements for all forms of interests
in other entities, including joint arrangements, associates, special purpose vehicles and other off
balance sheet vehicles. The Company shall apply this standard from July 01, 2013 and does not
expect to have any material impact on its financial statements.
- IFRS 13 - ‘Fair value measurement’. This is applicable on accounting periods beginning on or after
January 01, 2013. This standard aims to improve consistency and reduce complexity by providing a
precise definition of fair value and a single source of fair value measurement and disclosure
requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US
GAAP, do not extend the use of fair value accounting but provide guidance on how it should be
applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The
Company shall apply this standard from July 01, 2013 and does not expect to have any material
impact on its financial statements.
47

3. Basis of measurement
3.1 These financial statements have been prepared under the historical cost convention except for
revaluation of certain financial instruments at fair value and recognition of certain employee
retirement benefits at present value.
3.2 The Company's significant accounting policies are stated in note 4. Not all of these significant policies
require the management to make difficult, subjective or complex judgments or estimates. The
following is intended to provide an understanding of the policies the management considers critical
because of the complexity, judgment and estimation involved in their application and their impact
on these financial statements. Judgments and estimates are continually evaluated and are based on
historical experience, including expectations of future events that are believed to be reasonable
under the circumstances. These judgments involve assumptions or estimates in respect of future
events and the actual results may differ from these estimates. The areas involving a higher degree of
judgments or complexity or areas where assumptions and estimates are significant to the financial
statements are as follows:
a) Provision for taxation - note 4.2 and 34
b) Provision for employees' retirement benefits - note 4.3 and 9
c) Residual values and useful lives of depreciable assets - note 4.5 and 16.1
d) Provisions and contingencies - note 15
e) Determining the useful lives and residual values of intangible assets - note 4.7 and 17
4. Significant accounting policies
The significant accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
4.1 Borrowings
Interest bearing borrowings are recognised initially at fair value less attributable transaction cost.
Subsequent to initial recognition, these are stated at amortised cost with any difference between cost
and redemption value being recognised in the profit and loss over the period of the borrowings on an
effective interest rate basis. Preference shares, which are mandatorily redeemable on a specific date
at the option of the Company, are classified as liabilities. The dividend on these preference shares is
recognised in the profit and loss account as finance cost. Finance costs are accounted for on an
accrual basis.
4.2 Taxation
Income tax expense comprises current and deferred tax. Income tax is recognised in profit and loss
account except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current
Provision of current tax is based on the taxable income for the year determined in accordance with
the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax
rates or tax rates expected to apply to profit for the year if enacted after taking into account tax
credits, rebates and exemptions, if any. 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.
Deferred
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary
differences arising from differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of the taxable profit.
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.
48

Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to
the profit and loss account, except in the case of items charged or credited to equity in which case it
is included in the statement of changes in equity.
4.3 Employees' retirement benefits and other obligations
The main features of the schemes operated by the Company for its employees are as follows:
Defined benefit plans
The Company operates an approved funded defined benefit gratuity plan for all employees having
a service period of more than five years for management staff and one year for workers. Provisions are
made in the 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, 2013 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 balance sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized actuarial gains and losses and as reduced by the fair value of
the plan assets.
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:
Discount rate 10.5% p.a.
Expected increase in eligible pay 9.5% p.a.
Expected rate of return on plan assets 5.0% p.a.
The expected mortality rates assumed are based on the EFU 61-66 mortality table.
The Company's policy with regard to actuarial gains / losses is to follow minimum recommended
approach under IAS 19 "Employee Benefits".
Defined contribution plan
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. Obligation
for contributions to defined contribution plan is recognised as an expense in the profit and loss
account as and when incurred.
Accumulating compensated absences
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 upto 90
days in case of officers. Any balance in excess of 90 days can be encashed upto 17 days a year only.
Any further unutilised leaves lapse. In case of workers, unutilised leaves may be accumulated without
any limit, 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 profit and loss account. The most recent valuation
was carried out as at June 30, 2013 using the "Projected Unit Credit Method".
49

The amount recognised in the balance sheet represents the present value of the defined benefit
obligations. Actuarial gains and losses are charged to the profit and loss account 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:
Expected rate of increase in salary level per annum; and 9.5% p.a.
Expected mortality rate EFU 61-66 mortality table.
4.4 Trade and other payables
Financial liabilities are initially recognised at fair value plus directly attributable cost, if any, and
subsequently at amortised cost using effective interest rate method.
Other amounts payable are carried at cost which is the fair value of the consideration to be paid in
future for goods and services.
4.5 Property, plant and equipment
Property, plant and equipment, 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 property, plant and equipment signifies historical cost, gains
and losses transferred from equity on qualifying cash flow hedges as referred to in note 4.16 and
borrowing costs as referred to in note 4.19.
Depreciation on all property, plant and equipment is charged to the profit and loss account on the
reducing balance method, except for plant and machinery which is being depreciated using the
straight line method, so as to write off the historical cost of such asset over its estimated useful life at
annual rates mentioned in note 16.1 after taking into account their residual values.
Depreciation methods, residual values and the useful lives of the assets are reviewed at least at each
financial year end and adjusted if impact on depreciation is significant.
Depreciation on additions to property, plant and equipment is charged from the month in which an
asset is acquired or capitalised while no depreciation is charged for the month in which the asset is
disposed off.
The Company assesses at each balance sheet date whether there is any indication that property,
plant and equipment may be impaired. If such indication exists, the carrying amounts of such assets
are reviewed to assess whether they are recorded in excess of their recoverable amount. Where
carrying amounts exceed the respective recoverable amount, assets are written down to their
recoverable amounts and the resulting impairment loss is recognised in profit and loss account. The
recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Where an
impairment loss is recognised, the depreciation charge is adjusted in the future periods to allocate the
asset's revised carrying amount over its estimated useful life.
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 Company and the cost of the item can be measured reliably. All other repair and maintenance
costs are charged to profit and loss account during the period in which they are incurred.
The profit 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.
4.6 Capital work-in-progress
Capital work-in progress is stated at cost less any identified impairment loss and represents
expenditure incurred on property, plant and equipment during the construction and installation. All
50

expenditure connected with specific assets incurred during installation and construction period are
carried under capital work-in-progress. Cost also includes applicable borrowing costs. Transfers are
made to relevant property, plant and equipment category as and when assets are available for use.
4.7 Intangible assets
Expenditure incurred to acquire Oracle Enterprise Resource Planning (ERP) system has been
capitalised as intangible assets and stated at cost less accumulated amortisation and any identified
impairment loss. Intangible assets are amortised using the straight line method over a period of five
years.
Amortisation on additions to intangible assets is charged from the month in which an asset is acquired
or capitalised while no amortisation is charged for the month in which the asset is disposed off.
The Company assesses at each balance sheet date whether there is any indication that intangible
assets may be impaired. If such an indication exists, the carrying amounts of such assets are reviewed
to assess whether they are recorded in excess of their recoverable amount. Where carrying amounts
exceed the respective recoverable amount, assets are written down to their recoverable amounts
and the resulting impairment loss is recognised in profit and loss account. The recoverable amount is
the higher of an asset's fair value less costs to sell and value in use. Where an impairment loss is
recognised, the amortisation charge is adjusted in the future periods to allocate the asset's revised
carrying amount over its estimated useful life.
4.8 Leases
Finance leases
Leases where the Company has substantially all the risks and rewards of ownership are classified as
finance leases. At inception, finance leases are capitalised at the lower of present value of minimum
lease payments under the lease agreements and the fair value of the assets, less accumulated
depreciation and impairment loss, if any.
The related rental obligations, net of finance costs, are included in liabilities against assets subject to
finance lease. The liabilities are classified as current and non-current depending upon the timing of the
payment.
Minimum lease payments made under finance leases are apportioned between the finance cost and
the reduction of the outstanding liability. The finance cost is allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments, if any, are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed. The interest element of the
rental is charged to income over the lease term.
Assets acquired under a finance lease are depreciated over the estimated useful life of the assets on
reducing balance method except plant and machinery which is depreciated on straight line method.
Depreciation of leased assets is charged to the profit and loss account.
financial year-end and adjusted if impact of depreciation is significant.
Depreciation on additions to leased assets is charged from the month in which an asset is acquired
while no depreciation is charged for the month in which the asset is disposed off.
Operating leases
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit on a straight-line basis over the lease term.
51

4.9 Investments
Investments in equity instruments of subsidiary company
Investment in subsidiary company is measured at cost as per the requirements of IAS-27 "Consolidated
and 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.
Investments in equity instruments of associated company
Investments in associates where the Company has significant influence are measured at cost in the
Company's separate financial statements.
The Company is required to issue consolidated financial statements along with its separate financial
statements, in accordance with the requirements of IAS 27 'Consolidated and Separate Financial
Statements'. Investments in associated undertakings, in the consolidated financial statements, are
being accounted for using the equity method.
At each balance sheet date, the Company reviews the carrying amounts of the investments in
associates to assess whether there is any indication that such investments have suffered an
impairment loss. If any such indication exists, the recoverable amount is estimated in order to
determine the extent of the impairment loss, if any. In making an estimate of recoverable amount of
these investments, the management considers future stream of cash flows and an estimate of the
terminal value of these investments. Impairment losses are recognised as expense in the profit and loss
account.
Available for sale
Investments which are intended to be held for an indefinite period of time but may be sold in response
to the need for liquidity are classified as available for sale. Available for sale investments are
recognised initially at fair value plus any directly attributable transaction costs. After initial recognition,
these are stated at fair values unless fair values can not be measured reliably, with any resulting gains
and losses being taken directly to equity until the investment is disposed off or impaired. At each
reporting date, these investments are remeasured at fair value, unless fair value cannot be reliably
measured. At the time of disposal, the respective surplus or deficit is transferred to profit and loss. Fair
value of quoted investments is their bid price on Karachi Stock Exchange at the balance sheet date.
Unquoted investments, where active market does not exist, are carried at cost as it is not possible to
apply any other valuation methodology. Unrealised gains and losses arising from the changes in the
fair value are included in fair value reserves in the period in which they arise.
Investments intended to be held for less than twelve months from the balance sheet 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.
All purchases and sales of investments are recognised on the trade date which is the date that the
Company commits to purchase or sell the investment.
At each balance sheet date, the Company reviews the carrying amounts of the investments to assess
whether there is any indication that such investments have suffered an impairment loss. If any such
indication exists, the recoverable amount is estimated in order to determine the extent of the
impairment loss, if any. Impairment losses are recognised as expense in the profit and loss account.
Impairment losses recognised in the profit and loss account on equity instruments are not reversed
through the profit and loss account.
4.10 Stores and spares
Usable stores and spares are valued principally at moving weighted average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice
value plus other charges paid thereon.
52

Provision is made in the financial statements for obsolete and slow moving stores and spares based on
management estimate.
4.11 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. 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 appropriate manufacturing overheads.
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 be
incurred in 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
financial statements for obsolete and slow moving stock in trade based on management estimate.
4.12 Financial instruments
4.12.1Financial assets
The Company classifies its financial assets in the following categories: at fair value through profit or loss,
loans and receivables, available for sale and held to maturity. The classification depends on the
purpose for which the financial assets were acquired. Management determines the classification of its
financial assets at the time of initial recognition.
a) Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss are financial assets held for trading and financial
assets designated upon initial recognition as at fair value through profit or loss. A financial asset is
classified as held for trading if acquired principally for the purpose of selling in the short term. Assets
in this category are classified as current assets.
b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for maturities
greater than twelve months after the balance sheet date, which are classified as non-current
assets. Loans and receivables comprise advances, deposits and other receivables and cash and
cash equivalents in the balance sheet.
c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or
not classified in any of the other categories. They are included in non-current assets unless
management intends to dispose of the investments within twelve months from the balance sheet
date.
d) Held to maturity
Financial assets with fixed or determinable payments and fixed maturity, where management has
the intention and ability to hold till maturity are classified as held to maturity and are stated at
amortized cost.
All financial assets are recognized at the time when the Company becomes a party to the
contractual provisions of the instrument. Regular purchases and sales of investments are
recognized on trade-date; the date on which the Company commits to purchase or sell the asset.
53

Financial assets are initially recognized at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss
are initially recognized at fair value and transaction costs are expensed in the profit and loss
account. Dividend income from financial assets at fair value through profit or loss is recognized in
the profit and loss account when the Company's right to receive payments is established.
Available-for-sale financial assets and financial assets at fair value through profit and loss are
subsequently carried at fair value. 'Loans and receivables' and 'held to maturity' instruments are
carried at amortised cost using effective interest rate method.
The fair values of quoted investments are based on current prices. If the market for a financial asset
is not active (for unlisted securities), the Company measures the investments at cost less
impairment in value, if any.
Financial assets are derecognized when the rights to receive cash flows from the assets have
expired or have been transferred and the Company has transferred substantially all the risks and
rewards of ownership.
4.12.2 Financial liabilities
All financial liabilities are recognized at the time when the Company becomes a party to the
contractual provisions of the instrument.
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 profit and loss account.
4.13 Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the 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.
4.14 Trade debts and other receivables
Trade debts are recognised initially at original invoice amount less provision for doubtful debts.
A provision for doubtful debts is established when there is objective evidence that the Company
will not be able to collect all amounts due according to the original terms of the receivable.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation, and default or delinquency in payments are considered indicators that
the trade receivable is doubtful. Debts, considered irrecoverable, are written off as and when
identified.
4.15 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of cash flow
statement, cash and cash equivalents comprise cash in hand, demand deposits, other short term
highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value and short term borrowings. In the balance sheet,
short term borrowings are included in current liabilities.
4.16 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into
54

and are subsequently re-measured at their fair values. The method of recognizing the resulting
gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. The Company has not designated any derivatives as hedging
instruments and accordingly, the changes in fair value re-measurement are recognised in the profit
and loss account. Trading derivatives are classified as a current asset or liability.
4.17 Foreign currency transactions and translation
a) Transactions and balances
All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates
prevailing at the balance sheet date. Transactions in foreign currencies are translated into rupees
at exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are translated into rupees at
exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities
denominated in foreign currency that are stated at fair value are translated into rupees at
exchange rates prevailing at the date when fair values are determined. Exchange gains and losses
are included in income.
b) Functional and presentation currency
The financial statements are presented in Pak Rupees, which is the Company’s functional and
presentation currency. Figures are rounded to the nearest thousand.
4.18 Provisions
Provisions 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 shall be required to settle the
obligation; and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow shall 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.
4.19 Borrowing costs
Mark up, interest and other charges on borrowings are capitalised up to the date of commissioning
of the related property, plant and equipment acquired out of the proceeds of such borrowings. All
other mark up, interest and other charges are charged to profit and loss account.
4.20 Revenue recognition
Revenue represents the fair value of the consideration received or receivable for goods sold, net
of discounts and sales tax. Revenue is recognised when it is probable that the economic benefits
associated with the transaction will flow to the Company and the amount of revenue, and the
associated cost incurred, or to be incurred, can be measured reliably.
Revenue from sale of goods is recognised when the significant risk and rewards of ownership of the
goods are transferred to the buyer i.e. on the dispatch of goods to the customers.
Dividend income and entitlement of bonus shares are recognised when right to receive such
dividend and bonus shares is established.
Return on deposits is accrued on a time proportion basis by reference to the principal outstanding
and the applicable rate of return.
4.21 Dividend
Dividend distribution to the Company's shareholders is recognised as a liability in the period in
which the dividends are approved.
55

4.22 Contingent liabilities
Contingent liability is disclosed when:
- 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.
5 Issued, subscribed and paid up capital
2013 2012 2013 2012
----(Number of shares)---- ----(Rupees in thousand)----
343,512,029 343,512,029 Ordinary shares of Rs.10 each fully paid in cash 3,435,120 3,435,120
20,000,000 20,000,000 Ordinary shares of Rs. 10 each issued for
consideration other than cash 200,000 200,000
74,607,089 74,607,089 Ordinary shares of Rs. 10 each issued as fully
paid bonus shares 746,071 746,071
438,119,118 438,119,118 4,381,191 4,381,191
137,574,201 (2012: 137,574,201) ordinary shares of the Company are held by Nishat Mills Limited, an associated
concern as at June 30, 2013. In addition, 2,707,944 (2012: 1,407,944) ordinary shares are held by Adamjee
Insurance Company Limited, a related party as at June 30, 2013.
2013 2012
6. Reserves
Movement in and composition of reserves is as follows:
Capital
- Share premium
At the beginning of the year 4,557,163 4,557,163
Additions during the year - -
At the end of the year - note 6.1 4,557,163 4,557,163
- Fair value reserve
Fair value gain / (loss) during the year 10,222,592 (1,394,769)
- Capital redemption reserve fund - note 6.3 353,510 353,510
28,713,377 18,490,785
Revenue
- General reserve
Transferred (to) / from profit and loss account - -
At the end of the year 5,071,827 5,071,827
33,785,204 23,562,612
56

6.1 This reserve can be utilised by the Company only for the purposes specified in section 83(2) of the
Companies Ordinance, 1984.
6.2 As referred to in note 4.9 this represents the unrealised gain on remeasurement of investments at
fair value and is not available for distribution. This amount shall be transferred to profit and loss
account on realisation.
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
profit and loss account in order to ensure that fund balance at redemption date was equal to the
principal amount of the preference shares. The preference shares have been redeemed during
the year ended June 30, 2007.
2013 2012
7. Long term finances
These are composed of:
- Long-term loans - secured - note 7.1 - 7.2 3,966,591 5,584,601
- Loan under Musharika arrangement - secured - note 7.1 - 7.2 361,250 1,201,250
4,327,841 6,785,851
Less : Current portion shown under current liabilities - note 14 1,428,654 2,156,768
2,899,187 4,629,083
57

7.1 Long term loans - secured
Rate of Number of
Loan Lender 2013 2012 Mark-up installments Mark-up
(Rupees in thousand) per annum outstanding payable
1 Bank Alfalah Limited - 230,545 *** Base rate + 1.0% The loan has been Quarterly
fully repaid during
the year.
2 Allied Bank Limited 512,500 825,000 ***Base rate +0.6% 7 step-up quarterly Quarterly
installments ending
in May 2015.
3 Allied Bank Limited 425,000 675,000 ***Base rate +0.6% 8 step-up quarterly Quarterly
installments ending
in June 2015.
4 Bank of Punjab 116,667 183,333 **Base rate + 0.5% 7 equal quarterly Quarterly
installments ending
in February 2015.
5 Bank of Punjab 720,000 - **Base rate + 0.5% 18 equal quaterly Quarterly
installments ending
in December 2017.
6 Askari Bank 350,000 431,250 **Base rate + 0.6% 11 step-up quarterly Quarterly
installments, ending
in January 2016.
7 Faysal Bank - 500,000 **Base rate + 1.1% The loan has been Quarterly
fully repaid during
the year.
Foreign Currency
8 European Investment Bank - 762,686 ****Base rate + 0.063% The loan has been Quarterly
US$ Nil (2012: US$ 8.096 million) fully repaid during
the year.
9 Eco Trade and Development Bank 1,842,424 1,976,787 ****Base rate + 1.65% 8 equal semi-annual Semi-annual
US$ 18.653 million installments ending
(2012: US$ 20.985 million) in May 2017.
3,966,591 5,584,601
Musharika Arrangement
10 Meezan Bank 361,250 701,250 **Base rate + 0.6% 7 step-up quarterly Quarterly
installments, ending
in March 2015
11 Standard Chartered Bank - 500,000 * Base rate +0.6% The loan has been Quarterly
fully repaid during
the year.
4,327,841 6,785,851
* Base rate: Average ask rate of one-month Karachi Inter Bank Offer Rate ("KIBOR") to be reset for each mark-up period.
** Base rate: Average ask rate of three-month Karachi Inter Bank Offer Rate ("KIBOR") to be reset for each mark-up period.
*** Base rate: Average ask rate of six-month Karachi Inter Bank Offer Rate ("KIBOR") reset for each mark-up period.
**** Base rate: Average ask rate of three-month and six-month London Inter Bank Offer Rate ("LIBOR") reset for each
mark-up period.
58

7.2 Security
Loan 1
The loan was secured by registered first pari passu charge over all present and future fixed assets of the
Company, amounting to Rs 1,045.33 million. The total facility amount available was Rs 634 million.
Loan 2
The loan is secured by first pari passu charge over all present and future fixed assets of the Company
amounting to Rs 1,734 million. The total facility amount available is Rs 750 million.
Loan 3
amounting to Rs 1,334 million. The total facility amount available is Rs 1,000 million.
Loan 4
The loan is secured by first pari passu charge on the fixed assets including land, building, plant and
machinery of the Company of Rs 500 Million. The total facility amount available is Rs 200 million.
Loan 5
The loan is secured by an Initial ranking charge over present and future land, building and plant and
machinery of the Company to the tune of Rs 1,066.667 million. The charge shall be upgraded to 1st Pari
Passu within 180 days from the date of first drawn down. The total facility amount available is
Rs 800 million.
Loan 6
The loan is secured by first pari passu charge of Rs. 666.667 Million over present and future plant, machinery
and by equitable mortgage of specific land of the Company measuring 482 Acres 1 Kanal. The total
facility amount available is Rs 500 million.
Loan 7
The loan was secured by first pari passu charge of Rs 667 Million (inclusive of 25% margin) over all present
and future assets of the Company. The total facility amount available was Rs. 500 million.
Loan 8
The loan was secured by first pari passu charge over all present and future movable fixed assets of the
Company amounting to USD 8,349,469. The total facility amount available was USD 44.530 million.
Loan 9
amounting to USD 27.980 million. The total facility amount available is USD 20.985 million.
Loan 10
The loan is secured by first pari passu charge on all present and future fixed assets of the Company. The
charge amount at all times will at least equal the outstanding facility amount with 25% margin. The total
facility amount available is Rs 850 million.
Loan 11
The loan was secured by first pari passu charge over all present and future fixed assets of the Company
amounting to Rs 1,333.333 million. The total facility amount available was Rs 1,000 million.
59

2013 2012
8. Long term deposits
Customers 34,571 34,482
Others 30,812 33,873
65,383 68,355
These represent 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 respectively.
2013 2012
9. Retirement benefits
Staff gratuity - note 9.1 12,343 119,528
Leave encashment - note 9.2 76,960 65,588
89,303 185,116
9.1 Staff gratuity
The amounts recognised in the balance sheet are as follows:
Present value of defined benefit obligation 225,816 167,467
Fair value of plan assets (149,756) (82)
Unrecognised actuarial losses (63,717) (47,857)
Liability as at June 30 12,343 119,528
9.1.1 Movement in net liability for staff gratuity
Liability as at July 1 119,528 87,673
Charge for the year including capitalised during the year 51,026 41,271
Contributions plus benefit payments made directly
by the Company during the year (158,211) (9,416)
9.1.2 Movement in defined benefit obligation
Present value of defined benefit obligation as at July 1 167,467 127,935
Current service cost 30,097 21,783
Interest cost 20,933 17,228
Benefits paid during the year (9,937) (9,701)
Actuarial loss on present value of defined
benefit obligation 17,256 10,222
Present value of defined benefit obligation as at June 30 225,816 167,467
9.1.3 Movement in fair value of plan assets
Fair value of plan assets as at July 1 82 332
Expected return on plan assets 4 2
Contributions during the year 158,211 9,416
Actuarial gain on plan assets 1,396 33
Fair value of plan assets as at June 30 149,756 82
60

2013 2012
9.1.4 Actual return on plan assets
1,400 35
9.1.5 Plan assets
Plan assets are comprised as follows:
2013 2012
(Rs in ‘000) Percentage (Rs in ’000) Percentage
Cash and Bank 1,201 1% 82 100%
Debt instruments 148,555 99% - 0%
149,756 100% 82 100%
2013 2012
9.1.6 Movement in unrecognised actuarial losses
Unrecognised actuarial losses as at July 1 47,857 39,931
Actuarial losses arising during the year 15,860 10,222
Actuarial losses charged to profit during the year - (2,296)
Un recognised actuarial losses as at June 30 63,717 47,857
9.1.7 Charge for the year (including capitalised during the year)
Expected return on plan assets (4) (2)
Actuarial losses charged to profit during the year - 2,262
51,026 41,271
9.1.8 Amounts for current period and previous four annual periods of the fair value of plan assets and present
value of defined benefit obligation are as follows :
2013 2012 2011 2010 2009
(Rupees in thousand)
As at June 30
Present value of defined
benefit obligation 225,816 167,467 127,935 75,264 56,040
Fair value of plan assets (149,756) (82) (332) (394) (274)
Deficit 76,060 167,385 127,603 74,870 55,766
Experience adjustment
arising on plan obligation 17,256 10,222 25,954 (46) 8,850
arising on plan assets 1,396 33 1 (28) -
61

9.1.9 Assumptions used for valuation of the defined benefit scheme for managment and non-managment
staff are as under:
2013 2012
Discount rate Per annum 10.5 % 12.5 %
Expected rate of increase in salary Per annum 9.5 % 12.5 %
Expected rate of return on plan assets Per annum 5.0 % 5.0 %
Average expected remaining working life
time of employee Number of years 12 12
9.1.10 The Company expects to pay Rs 41.254 million in contributions to defined benefit plan in 2014.
2013 2012
9.2 Leave encashment
Opening balance 74,381 58,558
Expenses recognised 29,757 26,612
Payments made (15,800) (10,789)
88,338 74,381
Payable within one year - note 14 (11,378) (8,793)
Closing balance 76,960 65,588
9.2.1 Movement in liability for accumulating compensated
absences
Actuarial loss on present value of defined benefit obligation 17,205 14,739
88,338 74,381
Actuarial losses charged to profit during the year 17,205 14,739
29,757 26,612
Amounts for current period and previous four annual periods of the present value of defined benefit
obligation are as follows :
2013 2012 2011 2010 2009
As at June 30
arising on obligation 17,205 14,739 8,115 587 5,969
62

9.2.3 Assumptions used for valuation of the accumulating compensated absences are as under:
2013 2012
time of employees Number of years 12 11
Expected withdrawal and early
retirement rate EFU 61-66 Mortality table
Officers Workers
2013 2012 2013 2012
(days) (days) (days) (days)
Average number of leaves
- Utilized per annum 15.00 15.00 17.00 19.00
- Encashed per annum 9.00 7.00 12.00 16.00
- Utilized per annum in excess
of accrued leave of 30 days 1.00 1.00 2.00 2.00
- Encashed per annum in excess
2013 2012
10. Deferred income tax liabilities
The liability for deferred taxation comprises temporary differences relating to:
Deferred tax liability
Accelerated tax depreciation 4,993,726 4,681,653
Deferred tax assets
Provision for retirement and other benefits (27,004) (52,739)
Unabsorbed tax credits (1,799,683) (2,962,845)
3,167,039 1,666,069
Deferred tax asset on tax losses available for carry forward and those representing minimum tax paid
available for carry forward u/s 113 of the Income Tax Ordinance, 2001 are recognized to the extent that
the realisation of related tax benefits through future taxable profits is probable. The Company has not
recognised deferred tax assets of Nil (2012: 28.513 million) in respect of minimum tax paid and available for
carry forward u/s 113 of the Income Tax Ordinance, 2001, as sufficient taxable profits would not be available
to set these off in the foreseeable future. Minimum tax paid u/s 113 aggregating to Rs 28.513 million would
not be available for carry forward against future tax liabilities subsequent to year 2014.
63

2013 2012
11. Trade and other payables
Trade creditors - note 11.1 316,685 647,238
Infrastructure cess 89,164 125,464
Advances from customers 493,726 531,799
Accrued liabilities 696,252 441,234
Workers' profit participation fund - note 11.2 541,681 214,987
Federal excise duty payable 7,117 5,204
Special excise duty payable - 118
Withholding tax payable 10,633 1,342
Retention money payable 17,667 27,038
Unclaimed dividends 6,788 4,870
Advances against sale of scrap 8,789 930
Advance against sale of fixed assets 68 -
Unclaimed dividend on redeemable preference shares - 125
Others 97,781 108,545
2,286,351 2,108,894
11.1 Trade creditors include amount due to related parties amounting
to Rs 4.368 million (2012: Rs 2.996 million).
MCB Bank Limited 53 58
Adamjee Insurance Company Limited 2,281 31
Security General Insurance Company Limited 2,034 702
Pakistan Aviators & Aviation (Private) Limited - 2,205
4,368 2,996
11.2 Workers' profit participation fund
Provision for the year 373,466 213,288
Interest for the year 1,261 1,190
589,714 246,120
Less: payments made during the year 48,033 31,133
12. Accrued finance cost
Accrued mark-up on:
- Long term loans - secured 41,424 62,892
- Short term borrowings - secured 84,322 99,955
Preference dividend on redeemable preference shares 84 84
125,830 162,931
13. Short term borrowings - secured
Short term running finances - note 13.1 1,411,141 1,681,568
Import finances - note 13.2 1,039,149 1,133,899
Export refinance - note 13.3 2,970,000 3,918,000
5,420,290 6,733,467
64

13.1 Short term running finances - secured
Short term running finances available from various commercial banks under mark up arrangements
amount to Rs 9,575 million (2012: Rs 8,595.163 million). The rates of mark up range from 9.36% to 14.60%
(2012: 12.02% to 15.03%) or part thereof on the balance outstanding. These are secured by first
registered charge on all present and future current assets of the Company wherever situated
including stores and spares, stock in trade, book debts, investments, receivables and pledge of 10
million (2012: 10 million) shares of MCB Bank Limited, 13.5 million (2012: 13.5 million) shares of Nishat Mills
Limited.
13.2 Import finances - secured
The Company has obtained import finance facilities aggregating to Rs 6,513 million (2012: Rs 6,167.837
million) from commercial banks. The rates of mark up range from 1.15% to 12.31% (2012: 1.66% to
12.76%). 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, book
debts, investments and receivables.
Of the aggregate facility of Rs 9,704 million (2012: Rs 9,566.400 million) for opening letters of credit and
Rs 1,430 million (2012: Rs 1,880 million) for guarantees, the amount utilised as at June 30, 2013 was Rs
2,203.533 million (2012: Rs 1,712.999 million) and Rs 837.327 million (2012: Rs 1,158 million) respectively.
The aggregate facilities for guarantees are secured by a registered charge on current assets of the
Company. Of the facility for guarantees, Rs 14.48 million (2012: Rs 14.48 million) is secured by a lien over
bank deposits as referred to in note 25.2.
13.3 Export finances - secured
This represents export refinance loans obtained from various commercial banks, which carry mark up
at 8.5% to 12.30% per annum (2012: 10.5% to 11%). These loans are obtained for a period of 180 days
and are secured against pari passu hypothecation charge over current assets of the Company.
2013 2012
14. Current portion of non-current liabilities
Long term finances - note 7 1,428,654 2,156,768
Leave encashment - note 9.2 11,378 8,793
1,440,032 2,165,561
15. Contingencies and commitments
15.1 Contingencies
15.1.1 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 interest on 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 Rs 35.090 million.
15.1.2 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.
65

Collector of Customs and Central Excise, Multan has 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.
An appeal against the order was filed with the Lahore High Court, which has been decided in favour
of the Company. However, the Custom Authorities have filed an appeal with the Supreme Court of
Pakistan against the orders of the Lahore High Court. The Honourable court remanded back the case
to Customs Authorities to reassess the liability of the company. Appeal against the order is still pending
with the authorities. The Company has paid Rs 159.241 million during the year on account of Court
order. No provision for the remaining outstanding balance of Rs 475.147 million 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.
15.1.3 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 has 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, 2007 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. A large number of grounds have been raised by these
Petitioners and the matter is currently being adjudicated by the Lahore High Court, the Sindh High
Court and the Supreme Court of Pakistan. In all these cases, stay orders have been granted by the
Courts. Based on the legal opinion, the management is confident that the Company has a good case
and there are reasonable chances of success in the pending Petition in the Supreme Court of
Pakistan.
15.1.4 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 judgement dated January 27, 2009 (upholding its previous judgement
dated February 15, 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
the country 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 to Rs 1,115.145 million. The amount of refund, however, shall be incorporated
in the books of accounts once it is realised by the Company.
15.1.5 The Company, consequent to the order passed by the Supreme Court of Pakistan against the decision
of the Sindh High Court in the matter of infrastructure cess, filed a petition before the Sindh High Court,
challenging the levy of fifth version of the law enforcing infrastructure cess. Earlier, the Sindh High
Court, in August 2008, ruled out that only levies computed against consignments made on or after
December 28, 2006 shall be payable by the petitioners. Although the parties have reached an interim
arrangement, through an order of Sindh High Court dated May 31, 2011, for release of 50% of the
guarantees, the final order from Sindh High Court is still pending. According to the legal counsel of
the Company, chances of favourable outcome of the appeal are fair, therefore 50% of the amount
of infrastructure cess payable has not been incorporated in these financial statements amounting to
Rs. 89.164 million.
15.1.6 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, challenging the
66

levy of sales tax on the in-house consumption of Shale, Gypsum and Limestone for the period of June
13, 1997 to August 11, 1998. 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.
15.1.7 The tax authorities have raised demands aggregating to Rs 403.968 million against the Company in tax
years 2010 through 2012 that primarily pertain to concurrent imposition of 'minimum tax' and tax on
'dividend income' under sections 113 and 5 of the Income Tax Ordinance, 2001 respectively. While
the Company's appeals on this ground are presently pending adjudication at the various levels of
appellate authorities, no provision on this account has been incorporated in the financial statements
as the management considers that meritorious grounds exist to support the position that the matter
will ultimately be decided in Company's favour.
15.1.8 The Company has issued the following guarantees in favour of:
- Collector of Customs, Excise and Sales Tax against levy of Sales Tax, custom duty and excise amounting
to Rs. 27.124 million (2012: 30.389 million)
- Director, Excise Collection Office, Sindh Development and Maintenance against recovery of infrastructure
fee amounting to Rs. 390.900 million (2012: Rs 375.900 million)
- Director General, Mines and Minerals, Punjab against installation of cement factory near Khairpur,
District Chakwal amounting to Rs. 3 million (2012: Rs. 3 million)
- Director General, Mines and Minerals, Quetta against Limestone, Shale and other cement manufacturers
amounting to Rs. 3 million (2012: Rs. 3 million)
- The President of the Islamic Republic of Pakistan against the performance of a contract to Frontier
Works Organization amounting to Rs. 2.0 million (2012: Rs. 1.5 million)
- Managing Director, Pakistan Railways against the performance of a contract amounting to Nil (2012:
Rs. 1.908 million)
- Sui Northern Gas Pipelines Limited against supply of 6 MMCFD and 14 MMCFD gas for captive use for Khairpur
Project and for D.G Khan Project respectively amounting to Rs. 341.022 million (2012: Rs. 722.377 million)
- Professional Tax imposed by Administration Zila Council (The District Coordination Officer, DG Khan)
amounting to Rs. 0.05 million (2012: Rs. 0.05 million)
- The District Coordination Officer, Faisalabad amounting to Rs. 5 million (2012: Nil)
- The Managing Director, Lahore Waste Management Company (LWMC) against the performance of
a contract amounting to Rs. 20 million (2012: Rs. 20 million)
- Guarantees against export orders amounting to Rs. 45.231 million (2012: Nil)
15.2 Commitments in respect of:
(i) Contracts for capital expenditure Rs. 224.650 million (2012: Rs. 156.17 million)
(ii) Letters of credits for capital expenditure Rs. 666.128 million (2012: Rs. 760.127 million)
(iii) Letter of credit other than capital expenditure Rs. 1,537.405 million (2012: Rs. 952.872 million)
(iv) The amount of future payments under operating leases and the period in which these payments
will become due are as follows:
2013 2012
Not later than one year 331 331
Later than one year and not later than five years 1,325 1,325
Later than five years 5,839 6,170
7,495 7,826
67

Freeholdland-509,41970,369579,788---579,788
Leaseholdland3.3363,000-63,0009,4502,10011,55051,450
Buildingsonfreeholdland
-Factorybuilding105,266,410433,3135,699,7232,362,530304,6852,667,2153,032,508
-Officebuildingandhousingcolony5800,80712,503813,310249,10428,052277,156536,154
Roads10546,234-546,234225,21632,102257,318288,916
Plantandmachinery4.76-4.9827,737,3852,643,40730,380,7928,086,715968,8919,055,60621,325,186
Quarryequipment201,538,072146,5521,684,624975,68085,6521,061,332623,292
Furnitureandfittings10122,64411,382104,07256,1216,73941,82462,248
(29,954)(21,036)
Officeequipment10234,80019,903216,51787,82614,79378,793137,724
(38,186)(23,826)
Vehicles20252,22683,857306,01488,71634,514108,845197,169
(30,069)(14,385)
Aircraft3038,185328,752328,75236,97074,06073,968254,784
(38,185)(37,062)
Powerandwatersupplylines10467,575382467,957206,21526,167232,382235,575
37,576,7573,750,42041,190,78312,384,5431,577,75513,865,98927,324,794
(136,394)(96,309)
16.1Operatingassets
Bookvalue
asatJune
30,2013
Accumulated
Depreciation
asatJuly01,
2012
Accumulated
depreciation
asatJune
30,2013
Depreciation
charge/
(deletions)
fortheyear
Costasat
July01,2012
Cost
asat30June
2013
Annual
rateof
depreciation
%
Additions/
(Deletions)
2013(Rupeesinthousand)
20132012
----(Rupeesinthousand)----
16.Property,plantandequipment
Operatingassets-note16.127,324,79425,192,214
Capitalwork-in-progress-note16.21,416,1801,993,512
28,740,97427,185,726
68

Freeholdland-341,302168,117509,419---509,419
Leaseholdland3.3363,000-63,0007,3502,1009,45053,550
-Factorybuilding104,948,925317,4855,266,4102,056,349306,1812,362,5302,903,880
Roads10438,963107,271546,234191,54233,674225,216321,018
Quarryequipment201,497,96640,1061,538,072879,63596,045975,680562,392
Furnitureandfittings10114,5998,996122,64449,2606,94856,12166,523
(951)(87)
Officeequipment10191,99143,022234,80073,60714,24087,826146,974
(213)(21)
Vehicles20197,86779,828252,22681,45922,64488,716163,510
(25,469)(15,387)
Aircraft3038,185-38,18536,45052036,9701,215
35,563,8912,039,49937,576,75710,952,3261,447,71212,384,54325,192,214
(26,633)(15,495)
16.1.1FreeholdlandandbuildingincludebookvaluesofRs12million(2012:Rs12million)andRs7.101million(2012:Rs7.101million)respectivelywhichare
heldinthenameofChiefExecutiveoftheCompany.ThispropertyislocatedinthelocalityofDefenceHousingAuthoritywheretheby-lawsrestrict
transferoftitleoftheresidentialpropertyinthenameoftheCompany.
Bookvalue
asatJune
30,2012
Accumulated
Depreciation
asatJuly01,
2011
Accumulated
depreciation
asatJune
30,2012
Depreciation
charge/
(deletions)
fortheyear
Costasat
July01,2011
Cost
asat30June
2012
Annual
rateof
depreciation
%
Additions/
(Deletions)
69

2013 2012
16.1.2 The depreciation charge for the year has been allocated as follows:
Cost of sales - note 28 1,475,667 1,429,379
Administrative expenses - note 29 97,952 15,578
Selling and Distribution expenses - note 30 4,136 2,755
1,577,755 1,447,712
16.1.3 No impairment has been recognised on operating assets in the current year.
16.1.4During the year, the Company has identified certain items of operating assets from which further
economic benefits are no longer being derived. Therefore, assets having cost of Rs 68.14 million (2012:
Nil) and net book value of Rs 23.278 million (2012: Nil) have been retired from active use and have been
written off in these financial statements.
16.1.5 Disposal of property, plant and equipment
Detail of property, plant and equipment disposed off during the year is as follows:
Vehicles
Employees
Nazir Hussain 555 354 201 586 385 Auction
Mirza Asghar Ali 1,501 944 557 1,333 776 -do-
Khawaja Fakhar-ul-Islam 1,462 316 1,146 1,146 - -do-
Mr. Riayat Ullah Khan 571 365 206 206 - -do-
Arshad Ali 571 368 203 670 467 -do-
Amjad Ali 1,279 805 474 815 341 -do-
Muhammad Salah-ud-din 555 378 177 580 403 -do-
Outside parties
Anwar Ahmed Batla 571 445 126 486 360 Auction
Nadeem Gul 570 344 226 615 389 -do-
Ithfz Mills Ltd. 13,695 4,500 9,195 14,500 5,305 -do-
Amer Adnan 1,520 906 614 1,385 771 -do-
Hameed Ullah 272 149 123 124 1 -do-
Irfan Khan 571 359 212 611 399 -do-
Irfan Khan 571 359 212 651 439 -do-
Asim Murtaza 1,279 916 363 866 503 -do-
Asim Murtaza 570 368 202 456 254 -do-
Maj. Shehzada Jahanzeb 530 281 249 300 51 -do-
Irfan Khan 275 144 131 542 411 -do-
SecurityGeneralInsuranceCompany 678 511 167 750 583 Insurance Claim
Khalid Farooq Hashmi 612 375 237 615 378 Auction
Nadeem Gul 290 216 74 398 324 -do-
Rehan Sabri 1,515 944 571 1,262 691 -do-
Office Equipment 38,186 23,826 14,360 - (14,360) Assets written off
Furniture and Fittings 29,954 21,036 8,918 - (8,918) Assets written off
Aircraft Outside party
Syed Sibghat Ullah Shah 38,185 37,062 1,123 22,702 21,579 Sale
Other assets with book
value less than Rs 50,000 56 38 18 22 4 Auction
136,394 96,309 40,085 51,621 11,536
Particulars
of assets
Sold to Cost Accumulated
depreciation
Book
value
Sales
proceeds
Mode of
Disposal
Gain/(Loss)
on disposal
2 0 1 3 (Rupees in thousand)
70

Vehicles
Employees
Muhammad Sajid 560 343 217 527 310 Auction
Iqbal Ghani 12,294 6,903 5,391 16,000 10,609 -do-
Syed Yasir Hussain 174 82 92 368 276 -do-
Hasnat Aziz Bantth 1,501 894 607 1,000 393 -do-
Ch. Muhammad Ali 174 87 87 397 310 -do-
Rizwan Javed 318 276 42 355 313 -do-
Irfan Ahmed 555 318 237 554 317 -do-
Irfan Ahmed 1,090 662 428 767 339 -do-
Sayed Yasir Hussain 427 305 122 375 253 -do-
Attiq-ur-Rehman 879 564 315 1,087 772 -do-
Raheem Buksh 353 256 97 526 429 -do-
Nasir Zahoor 555 343 212 525 313 -do-
Rizwan Javed 555 362 193 555 362 -do-
Ahmed Haroon Khan 571 324 247 686 439 -do-
Imran Fatima 398 207 191 460 269 -do-
Nazar Hussain 555 355 200 582 382 -do-
Major Iftikhar 1,517 870 647 1,125 478 -do-
Tahir Ali Shah 760 708 52 950 898 -do-
Irfan Ahmed 275 139 136 512 376 -do-
Waseem Riaz 753 655 98 635 537 -do-
Nadeem Gul 560 375 185 500 315 -do-
Khalid Farooq Hashmi 555 355 200 560 360 -do-
Office Equipment 213 21 192 213 21 Assets written off
Furniture and Fittings 334 31 303 334 31 -do-
334 31 303 334 31 -do-
284 26 258 284 26 -do-
Other assets with book value less
than Rs 50,000 89 3 86 89 3 Auction
26,633 15,495 11,138 30,300 19,162
Particulars
of assets
depreciation
Book
value
Sales
proceeds
Mode of
Disposal
Gain/(Loss)
on disposal
Civil works 346,024 288,960 - - 106,774 (435,635) 306,123
Plant and machinery 1,549,765 2,081,096 46,055 - - (2,698,934) 977,982
Advances 31,108 154,049 - - (106,774) (16,228) 62,155
Others 4,672 13,952 - - - (18,219) 405
Expansion Project :
- Civil works 18,992 46 - - - - 19,038
- Others 42,951 7,526 - - - - 50,477
1,993,512 2,545,629 46,055 - - (3,169,016) 1,416,180
Balance
as at June
30, 2012
Capital
expenditure
incurred
during
the year
Borrowing
cost
capitalized
during
the year
Capital
expenditure
charged off
during
the year
Transfers
within
capital work
in progress
Transfers to
operating
fixed
assets
Balance
as at June
30, 2013
16.2. Capital work-in-progress
71

2013 2012
17. Intangible assets
This represents Oracle ERP system.
Cost
As at July 1 92,260 -
Additions - 92,260
As at June 30 92,260 92,260
Less: Accumulated amortisation
As at July 1 18,452 -
Amortisation for the year - note 17.1 18,452 18,452
As at June 30 36,904 18,452
55,356 73,808
17.1 Oracle ERP system is being amortised over a useful life of five years.
17.2 The amortisation charge for the year has been allocated as follows:
Cost of sales - note 28 12,916 12,916
Selling and distribution expenses - note 30 2,768 2,768
18,452 18,452
18. Investments
These represent the long term investments in:
- Related parties - note 18.1 8,649,051 4,863,873
- Others - note 18.2 1,809 1,072
8,650,860 4,864,945
18.1 Related Parties
Nishat Chunian Limited- quoted
5,419,590 (2012: 4,926,900) fully paid ordinary shares of Rs 10 each
Equity held 2.98% (2012: 2.98%)
Market value - Rs 323.82 million (2012: Rs 85.679 million) 45,254 45,254
Fair value gain 278,566 40,424
323,820 85,678
Civil works 218,310 544,242 - - - (416,528) 346,024
Plant and machinery 925,123 2,375,199 - (57,438) - (1,693,119) 1,549,765
Advances 74,190 106,880 - - - (149,962) 31,108
Others 103,496 13,054 - - - (111,878) 4,672
Expansion Project :
- Civil works 18,992 - - - - - 18,992
- Others 33,709 9,242 - - - - 42,951
1,373,820 3,048,617 - (57,438) - (2,371,487) 1,993,512
Balance
as at June
30, 2011
Capital
expenditure
incurred
during
the year
Borrowing
cost
capitalized
during
the year
Capital
expenditure
charged off
during
the year
Transfers
within
capital work
in progress
Transfers to
operating
fixed
assets
Balance
as at June
30, 2012
72

2013 2012
Subsidiaries - unquoted
Nishat Paper Products Company Limited
23,268,398 (2012: 23,268,398) fully paid ordinary
shares of Rs 10 each
Equity held: 50% (2012: 50%) 203,631 203,629
203,631 203,629
Associates - quoted
Nishat Mills Limited
Equity held 8.61% (2012: 8.61%)
Market value - Rs 2,853.574 million (2012: Rs 1,441.174 million) 1,577,174 1,577,174
Less: Cumulative impairment Loss (250,615) (250,615)
1,326,559 1,326,559
MCB Bank Limited
Equity held: 1.91% (2012: 1.91%)
Market value Rs 4,698.597 million (2012: Rs 2,927.104 million) 125,834 125,834
125,834 125,834
Adamjee Insurance Company Limited
Equity held 2.86% (2012: 2.86%)
230,154 230,155
Fair value gain 6,139,053 2,892,018
8,025,231 4,778,195
Associates - unquoted
Nishat Dairy Private Limited
30,000,000 (2012: Nil) fully paid ordinary shares of Rs 10 each
Equity held 10.6% (2012: Nil) 300,000 -
300,000 -
8,649,051 4,863,873
Nishat Mills Limited, MCB Bank Limited and Adamjee Insurance Company Limited are associated
undertakings as per the Companies Ordinance, 1984, however, for the purpose of measurement, these
have been classified as available for sale and measured at fair value as the Company does not have
significant influence over these companies.
2013 2012
18.2 Others
Maple Leaf Cement Factory Limited
13,747 (2012: 13,747) fully paid ordinary shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
Market value - Rs 0.301 million (2012: Rs 0.064 million) 282 282
Less: Cumulative impairment Loss (253) (253)
29 29
Nil (2012: 1,999) fully paid preference shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
Market value - Rs 0.0 million (2012: Rs 0.012 million) - 20
Less: Cumulative impairment Loss - (10)
- 10
73

2013 2012
First Capital Mutual Fund
89,000 (2012: 89,000) certificates of Rs 10 each
Equity held 0.3% (2012: 0.3%)
212 212
Habib Bank Limited
191 (2012: 174) fully paid ordinary shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
18 18
Oil and Gas Development Company Limited
Equity held 0.0% (2012: 0.0%)
76 76
Pakistan Petroleum Limited
1,197 (2012: 958) fully paid ordinary shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
27 27
Kot Addu Power Company Limited
Equity held 0.0% (2012: 0.0%)
15 15
Fair value gain 1,432 685
1,809 1,072
18.3 Investments with a face value of Rs 135 million (2012: Rs 235 million) are pledged as security against
bank facilities. 3,509,334 (2012: 3,190,304) shares of MCB Bank Limited are blocked in CDC account.
2013 2012
19. Long term loans, advances and deposits
Considered Good
- Loans to related parties - note 19.1 51,617 68,823
- Other loans and advances - note 19.2 43,918 51,519
95,535 120,342
19.1 Loans and advances to related parties
Loan to related party 68,823 86,029
Less: receivable within one year 17,206 17,206
51,617 68,823
74

This represents an unsecured loan of Rs 49 million and Rs 19.823 million (2012: Rs 61.250 million and Rs
24.778 million) given to Sui Northern Gas Pipelines Limited (SNGPL) for the development of infrastructure
for the supply of natural gas to the plants at D.G. Khan and Khairpur respectively. Mark up is charged
at rates of 2% and 1.5% per annum (2012: 2% and 1.5% per annum) respectively and is received annually.
The principal amount is receivable in 5 annual instalments ending December 31, 2016 and March 28,
2017 respectively.
2013 2012
19.2 Other loans and advances
Loans to employees
- Executives - note 19.2.1 94 259
- Others 4,177 3,819
4,271 4,078
Less: receivable within one year
- Executives 56 126
- Others 1,090 1,240
1,146 1,366
3,125 2,712
Security deposits 40,793 48,807
43,918 51,519
19.2.1 Executives
Opening balance 259 383
Transfer from others to executives 72 -
Interest accrued 5 5
336 388
Less: repayment during the year 242 129
94 259
These represent secured loans given to executives and other employees for house building and
purchase of motor vehicles and are recoverable in equal monthly instalments over a period of 24 to
96 months. The loans given to executives and other employees carry interest at the rate of 10% per
annum (2012: 10% per annum) except for loans given to workers which are interest free.
The loans of Rs 2.565 million (2012: Rs 2.563 million) are secured against the employees' respective
retirement benefits.
The maximum aggregate amount due from executives at any time during the year was Rs 0.331 million
(2012: Rs 0.383 million).
2013 2012
20. Stores and spares
Stores [including in transit Rs 15.366 million 1,344,419 1,389,093
(2012: Rs 50.216 million)]
Spare parts [including in transit Rs 138.368 million 2,755,228 2,741,073
(2012: Rs 195.193 million)]
Loose tools 7,356 7,096
4,107,003 4,137,262
20.1 Stores and spare parts include items which may result in fixed capital expenditure but are not
distinguishable.
75

76
2013 2012
21. Stock-in-trade
Raw materials 198,920 177,405
Packing material [including in transit Rs 5.365 million
(2012: Rs 0.013 million)] 285,896 200,201
Work-in-process 856,587 322,049
Finished goods 320,318 254,990
1,661,721 954,645
22. Trade debts - considered good
Secured 184,727 194,271
Unsecured
- Related parties - note 22.1 15,582 11,923
- Others 73,226 111,776
273,535 317,970
22.1 Related parties - unsecured
Nishat Hospitality (Private) Limited 1,424 4,256
Nishat Dairy (Private) Limited 3,781 3,587
Nishat Chunian Limited 5,039 -
Nishat Hotels and Properties Limited 3,740 -
Nishat Linen (Private) Limited 289 -
MCB Bank Limited 1,309 2,974
Nishat Developers (Private) Limited - 732
Lalpir Power Limited - 374
15,582 11,923
Ageing analysis of the amounts due from related parties is as follows :
1 to 3 More then 3 As at June 30, As at June 30,
months months 2013 2012
--------------------Rupees in 000-------------------
Nishat Developers (Private) Limited - - - 732
Nishat Hospitality (Private) Limited 1,424 - 1,424 4,256
Nishat Dairy (Private) Limited 3,781 - 3,781 3,587
Nishat Chunian Limited 5,039 - 5,039 -
Nishat Hotels and Properties Limited 3,740 - 3,740 -
Nishat Linen (Private) Limited 289 - 289 -
MCB Bank Limited 1,309 - 1,309 2,974
Lalpir Power Limited - - - 374
15,582 - 15,582 11,923
2013 2012
23. Investments
Available for sale - quoted
Related parties - note 23.1 479,066 479,066
479,066 479,066
Cumulative fair value gain 17,383,652 10,646,985
17,862,718 11,126,051

2013 2012
23.1 Related Parties
MCB Bank Limited - Associated company
Equity held: 7.27% (2012: 7.27%)
Nishat Chunian Limited
Equity held: 0.05% (2012: 0.05%)
479,066 479,066
MCB Bank Limited is an associated undertaking as per the Companies Ordinance, 1984, however, for
the purpose of measurement, this has been classified as available for sale and measured at fair value
as the Company does not have significant influence over this company.
2013 2012
24. Advances, deposits, prepayments and other receivables
Current portion of loans to employees - considered good 1,145 1,366
Current portion of long term receivable from related party 17,206 17,206
Advances - considered good
- To employees - note 24.1 4,331 3,135
- To suppliers 143,807 70,715
148,138 73,850
Due from related parties - note 24.2 226,819 311,228
Prepayments 5,565 2,812
Mark-up receivable from related party - note 24.3 35,918 48,920
Profit receivable on bank deposits - 1,285
Letters of credit - margins, deposits, opening charges, etc 13,201 2,361
Balances with statutory authorities
- Sales tax - note 24.4 81,007 62,932
- Excise duty 17,243 17,243
- Export rebate 65,342 68,831
163,592 149,006
Other receivables 193 12,967
611,777 621,001
24.1 Included in advances to employees are amounts due from executives of Rs 1,993 thousand (2012:
Rs 1,483 thousand).
2013 2012
24.2 Due from related parties - unsecured
Nishat Mills Limited 17,507 13,461
Nishat Developers (Private) Limited 733 -
Nishat Paper Products Company Limited - note 24.2.1 208,579 297,755
226,819 311,228
24.2.1 This represents amount due from subsidiary company relating to advance for purchase of paper bags
carrying interest at average borrowing rate of the Company.
77

24.3 This represents mark-up receivable from Sui Northern Gas Pipelines Limited against the loan as referred
to in note 19.2 and from Nishat Paper Products Company Limited against advances as referred to in
note 24.2.
24.4 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.
2013 2012
25. Derivative financial instrument
Cross currency interest rate swap - note 25.1 1,837 -
25.1 During the year, the Company has entered into a derivative cross currency interest rate swap with a
commercial bank. Under the terms of cross currency swap arrangement, the Company pays Karachi
Inter-Bank Offered Rate (KIBOR) minus bank spread to the arranging bank on the notional PKR amount
for the purposes of the cross currency swap, and receives London Inter-Bank Offered Rate (LIBOR) on
the notional USD amount from the arranging bank. There have been no transfers of liabilities under the
arrangements, only the nature of the interest payment has changed. The derivative cross currency
swap outstanding as at June 30, 2013 has been marked to market and the resulting gain has been
included in the profit and loss account.
2013 2012
26. Cash and bank balances
At banks:
Saving accounts
Local currency - note 26.1 - 26.2 181,950 133,258
Foreign Currency: US$ 1,460,280
(2012: US$ 902,962) 144,276 85,044
Current accounts 142,538 206,905
468,764 425,207
In hand 117 3,234
468,881 428,441
26.1 The balances in saving accounts bear mark-up which is 6% to 9.7% per annum (2012: 0.1% to 5% per
annum).
26.2 Included in balances at banks on saving accounts are Rs 14.480 million (2012: Rs 14.480 million) which
are under lien to secure bank guarantees referred to in note 13.2.
2013 2012
27. Sales
Local sales 22,733,691 20,258,088
Export sales - note 27.1 6,866,192 7,146,523
29,599,883 27,404,611
Less:
Sales tax 3,170,835 2,792,019
Excise duty and special excise duty 1,157,255 1,385,540
Commission to stockists and export agents 355,869 277,199
4,683,959 4,454,758
24,915,924 22,949,853
27.1 Export sales include rebate on exports amounting to Rs 35.127 million (2012: Rs 38.378 million).
78

2013 2012
28. Cost of sales
Raw and packing materials consumed 2,036,742 1,877,887
Salaries, wages and other benefits - note 28.1 1,119,129 941,316
Electricity and gas 2,263,755 2,109,987
Furnace oil and coal 6,990,815 7,262,703
Stores and spares consumed 1,650,244 1,375,329
Repairs and maintenance 290,150 224,370
Insurance 60,450 57,814
Depreciation on property, plant and equipment - note 16.1.2 1,475,667 1,429,379
Amortisation of intangible assets - note 17.1 12,916 12,916
Royalty 153,526 147,132
Excise duty 17,270 13,715
Vehicle running 23,076 24,672
Postage, telephone and telegram 3,156 3,200
Printing and stationery 8,729 5,029
Legal and professional charges 2,702 1,984
Travelling and conveyance 23,328 24,673
Estate development 14,615 19,822
Rent, rates and taxes 23,955 18,379
Freight charges 9,713 6,328
Other expenses 30,535 25,711
16,210,473 15,582,346
Opening work-in-process - note 21 322,049 169,612
Closing work-in-process - note 21 (856,587) (322,049)
(534,538) (152,437)
Cost of goods manufactured 15,675,935 15,429,909
Opening stock of finished goods - note 21 254,990 294,737
Closing stock of finished goods - note 21 (320,318) (254,990)
(65,328) 39,747
Less: Own consumption 20,690 26,558
15,589,917 15,443,098
28.1 Salaries, wages and other benefits include Rs 28.519 million (2012: Rs 24.626 million), Rs 37.390 million
(2012: Rs 30.252 million) and Rs 21.826 million (2012: Rs 19.518 million) respectively, in respect of provident
fund contribution by the Company, provision for gratuity and staff compensated absences.
28.1.1 Salaries, wages and other benefits
Salaries, wages and other benefits include the following in respect of retirement benefits:
2013 2012
Gratuity
Interest cost for the year 15,339 12,628
Actuarial loss - 1,658
37,390 30,252
Leave Encashment
Actuarial loss 12,619 10,810
21,826 19,518
79

2013 2012
29. Administrative expenses
Salaries, wages and other benefits - note 29.1 170,948 139,338
Electricity, gas and water 4,803 5,678
Insurance 3,030 1,738
Depreciation on property, plant and equipment - note 16.1.2 97,952 15,578
Legal and professional services - note 29.2 20,611 16,321
Rent, rates and taxes 5,483 147
Entertainment 2,109 2,316
School expenses 18,574 18,888
Fee and subscription 15,149 11,549
405,579 267,705
29.1 Salaries, wages and other benefits include Rs 5.807 million (2012: Rs 4.949 million), Rs 9.133 million (2012:
Rs 7.365 million) and Rs 5.335 million (2012: Rs 4.763 million) respectively, in respect of provident fund
contribution by the Company, provision for gratuity and staff compensated absences.
2013 2012
Gratuity
Expected return on plan assets (1) -
Actuarial loss - 404
9,133 7,365
Leave Encashment
Current service cost 583 815
5,335 4,763
29.2 Legal and professional charges
Legal and professional charges include the following
in respect of auditors' remuneration for:
Statutory audit 1,650 1,500
Half-yearly review 450 400
Audit of consolidated financial statements and
other certification charges 100 100
Out of pocket expenses 75 75
2,275 2,075
80

2013 2012
30. Selling and distribution expenses
Repairs and maintenance 1,487 819
Insurance 713 481
Legal and professional charges - 695
Entertainment 647 838
Advertisement and sales promotion 5,162 7,349
Freight and handling charges - export 1,626,759 2,095,508
Debtors written off 5,010 -
1,751,174 2,202,901
2013 2012
Salaries, wages and other benefits include the following in
respect of retirement benefits:
Gratuity
4,374 3,526
Leave Encashment
Interest cost for the year 798 627
2,554 2,280
31. Other operating expenses
Workers' profit participation fund 373,466 213,288
Donations - note 31.1 3,741 1,700
Realized loss on derivative financial instrument 22,132 -
Exchange loss 145,467 285,847
544,806 500,835
31.1 None of the directors and their spouses had any interest in any of the donees.
81

2013 2012
32. Other income
Income from financial assets
Income on bank deposits 5,820 3,434
Interest on loans to employees 5 24
Mark-up on loan / advances to related parties 36,839 50,000
Unrealized gain on derivative financial instruments 1,837 5,467
Dividend income from:
- Others 52 29
1,295,633 1,058,707
1,340,134 1,117,632
Income from non-financial assets
Rental income 813 759
Gain on disposal of property, plant and equipment - note 16.1.5 11,536 19,162
Scrap sales 111,593 27,601
Provisions and unclaimed balances written back 2,188 22,632
Others 25 150
126,155 70,304
1,466,289 1,187,936
32.1 Dividend income from related parties
MCB Bank Limited 1,170,695 945,162
Adamjee Insurance Company Limited 8,853 3,541
Nishat Chunian Limited 10,020 10,020
1,295,581 1,058,678
33. Finance costs
Interest and mark-up on:
- Workers' profit participation fund 1,261 1,191
Guarantee commission 11,336 15,020
Bank charges 34,680 37,908
994,879 1,670,784
34. Taxation
Current
- For the year - 101,500
- Prior 92,719 (115,335)
92,719 (13,835)
Deferred 1,500,970 (41,817)
1,593,689 (55,652)
34.1 The provision for current taxation represents minimum tax under section 113 of the Income Tax Ordinance,
2001 at the rate of 0.5% (2012: 1%) of turnover from local sales as which has been reduced to nil by
tax credit under section 65B of the Income Tax Ordinance, 2001. In addition to this, it includes tax on
exports and rental income which is full and final discharge of Company's tax liability in respect of
income arising from such source.
For purposes of current taxation, the tax losses available for carry forward as at June 30, 2013 are
estimated approximately at Rs 5,016.666 million (2012: Rs 8,465.270 million).
82

2013 2012
% %
34.2 Tax charge reconciliation
Numerical reconciliation between the average effective
tax rate and the applicable tax rate
Applicable tax rate 35.00 35.00
Tax effect of amounts that are:
- Not deductible for tax purposes 0.13 0.18
- Chargeable to tax at different rates (4.57) (9.15)
Effect of change in prior years' tax 0.01 (24.18)
Effect of change in tax rate 0.71 -
Tax credits and losses in respect of which no deferred
tax asset has been recognised (3.72) 0.74
Effect of presumptive tax regime (5.09) -
Tax effect for higher of minimum tax or dividend income - (3.97)
Rounding and others (0.01) 0.01
(12.54) (36.37)
Average effective tax rate charged to profit and loss account 22.46 (1.37)
35. Earnings per share
35.1 Earnings per share - Basic
Profit for the year Rupees 5,502,165,854 4,108,117,688
Weighted average number of ordinary shares Number 438,119,118 438,119,118
Earnings per share - basic Rupees 12.56 9.38
35.2 Earnings per share - Diluted
There is no dilution effect on the basic earnings per share as the Company has no such
commitments.
2013 2012
36. Cash generated from operations
Profit before tax 7,095,858 4,052,466
Adjustments for:
- Depreciation on property, plant and equipment 1,577,755 1,447,712
- Amortisation on intangible assets 18,452 18,452
- Gain on disposal of property, plant and equipment (11,536) (19,162)
- Unrealized gain on derivative financial instruments (1,837) (5,467)
- Dividend income (1,295,633) (1,058,707)
- Mark-up income (36,839) (50,000)
- Provision for retirement benefits 80,783 67,883
- Exchange loss 145,467 285,847
- Finance costs 994,879 1,670,784
Profit before working capital changes 1,471,491 2,357,342
Effect on cash flow due to working capital changes
- Decrease / (increase) in stores, spares and loose tools 30,259 (594,228)
- Increase in stock-in-trade (707,076) (92,504)
- Decrease in trade debts 44,435 158,010
- Increase / (decrease) in advances, deposits,
prepayments and other receivables (3,778) 12,825
- Increase in trade and other payables 177,457 268,876
(458,703) (247,021)
8,108,646 6,162,787
83

84
2013 2012
37. Cash and cash equivalents
Cash and bank balances - note 26 468,881 428,441
Short term borrowings - secured - note 13 (5,420,290) (6,733,467)
(4,951,409) (6,305,026)
38. Remuneration of Chief Executive, Directors and Executives
38.1 The aggregate amount charged in the financial statements for the year for remuneration, including
certain benefits, to the Chief Executive, full time working Directors and Executives of the Company
are as follows:
Chief Executive Directors Executives
2013 2012 2013 2012 2013 2012
Managerial remuneration 12,240 8,621 23,675 20,127 204,996 169,044
Contributions to provident
and gratuity fund - - 4,340 3,690 33,609 26,170
Housing 270 270 1,064 1,064 78,017 61,580
Utilities - - - - 16,511 13,494
Leave passage - - 1,477 818 - 4,461
Bonus - - - - - -
Fees - - - - - -
Medical expenses 383 169 408 171 - 5,764
Others 7,890 5,477 3,506 3,432 - 43,585
20,783 14,537 34,470 29,302 333,133 324,098
Number of persons 1 1 3 3 185 152
The Company also provides the chief executive and some of the directors and executives with Company
maintained cars, travelling and utilities.
The Company does not provide any remuneration and benefits to non-executive directors of the Company.
38.2 Remuneration to other directors
Aggregate amount charged in the financial statements for the year for fee to 5 directors (2012: 5
directors) is Nil (2012: Nil).
39. Transactions with related parties
The related parties comprise subsidiary company, associated companies, other related companies, directors,
key management personnel and post employment benefit plans. The Company 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, dividend income is disclosed in note 32.1, expense charged in
respect of staff retirement benefit plans is disclosed in note 9, amounts due from directors and key
management personnel are shown under receivables and remuneration of directors and key management
personnel is disclosed in note 38. Other significant transactions with related parties are as follows:
2013 2012
Relationship with the Company Nature of transactions
i. Subsidiary company Purchase of goods 922,042 996,426
Rental income 813 759
Interest income 35,358 48,218
ii. Other related parties Sale of goods 170,603 100,571
Purchase of asset 381,351 1,700
Insurance premium 64,192 82,159
Purchase of services 1,346,020 1,033,558
Insurance claims received 12,389 10,539
Mark-up income on balances
with related parties 5,813 1,782
Dividend income 1,295,581 1,058,678
iii. Post employment benefit plans Expense charged in respect of
retirement benefit plans 80,783 67,883
Transactions with provident
fund account funds paid 112,957 104,335

85
All transactions with related parties have been carried out on commercial terms and conditions.
40 Plant capacity and actual production
Capacity Actual production
2013 2012 2013 2012
Clinker (Metric Tonnes)
Unit I 810,000 810,000 798,167 839,989
Unit II 1,200,000 1,200,000 1,195,047 1,253,632
Unit III 2,010,000 2,010,000 1,930,876 1,680,327
2013 2012
41. Number of employees
Total number of employees as at June 30 1,068 1062
Average number of employees during the year 1069 1057
42. Provident Fund Related Disclosures
The company operates a provident fund for its employees.
The following information is based on un-audited financial statements of the Fund as at June 30, 2013 and
audited financial statements as at June 30, 2012.
2013 2012
(i) Size of the fund - total assets 905,565 651,578
(ii) Cost of investments made 622,806 513,350
(iii) Fair value of investments - note 42.1 807,907 575,132
(iv) Percentage of investments made 89.22% 88.27%
42.1 The breakup of fair value of investments is :
2013 2012
(Rs. In ‘000) ----%--- (Rs. In ’000) ----%----
Break up of investments
Special accounts in a
scheduled banks 136,885 16.95% 127,909 22.24%
Term finance certificates - listed 37,271 4.61% 26,601 4.63%
Term finance certificates - unlisted 10,422 1.29% 10,336 1.80%
Government securities 180,083 22.29% 144,616 25.14%
Mutual funds - open ended - listed 66,205 8.19% 45,393 7.89%
Mutual funds - open ended - unlisted (NIT) 24,460 3.03% 15,484 2.69%
Mutual funds - closed ended - listed 11,070 1.37% 7,083 1.23%
Ordinary shares of listed companies 303,881 37.61% 191,640 33.32%
Modaraba certificates - listed 4,508 0.56% 1,896 0.33%
Redeemable capital - listed 21 0.00% 1,836 0.32%
Redeemable capital - unlisted 26,636 3.30% 2,338 0.41%
Debt securities - listed 6,465 0.80% - 0.00%
807,907 100.00% 575,132 100.00%
The investments of the provident fund have been made in accordance with the provisions of Section
227 of the Companies Ordinance, 1984 and the rules formulated for this purpose except for:
- investments in unlisted security (NIT units)
- investments in listed securities in excess of 30% of provident fund
The management is taking steps to dispose off such investments

43. Financial risk management
43.1 Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (including currency
risk, fair value interest rate risk, cash flow interest rate risk and 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. The Company uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by the Company's 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, use of derivative financial instruments and non-derivative financial
instruments, and investment of excess liquidity.
The Company's overall risk management procedures to minimise the potential adverse effects of
financial market on the Company's performance are as follows:
(a) Market risk
(i) Currency risk
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 future commercial
transactions or receivables and payables 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 and amounts receivable from / payable to the foreign entities.
2013 2012
Cash and bank balances - USD 1,460 903
Receivable against sales to foreign parties - USD 2,207 2,066
Long term loan - USD (18,653) (29,081)
Advance received against sale - USD (1,299) (1,077)
Net exposure - USD (16,285) (27,189)
At June 30, 2013, if the Rupee had weakened / strengthened by 10% against the US dollar with all other
variables held constant, post-tax profit for the year would have been Rs 160.896 million (2012:
Rs 245.981 million) lower / higher, mainly as a result of foreign exchange losses / gains on translation of
US dollar-denominated financial assets and liabilities.
(ii) Price risk
The Company is exposed to equity securities price risk because of investments held by the Company
and classified as available for sale. 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 investments in equity of other entities that are publicly traded are included in all
of the following three stock exchanges; Karachi Stock Exchange, Lahore Stock Exchange and
Islamabad Stock Exchange.
The table below summarises the impact of increases / decreases of the KSE-100 index on the Company’s
post-tax profit 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 Company’s equity
instruments moved according to the historical correlation with the index:
86

Impact on post-tax profit Impact on other components of equity
2013 2012 2013 2012
Karachi Stock Exchange - - 260,099 157,874
Post-tax profit for the year would increase / decrease as a result of gains / losses on equity securities
classified as at fair value through profit or loss. Other components of equity would increase / decrease
as a result of gains / losses on equity securities classified as available for sale. As at June 30, 2013, the
Company has no investments classified as fair value through profit or loss.
(iii) Cash flow and fair value interest rate risk
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.
As the Company has no significant floating interest rate assets, the Company’s income is substantially
independent of changes in market interest rates.
The Company’s interest rate risk arises from 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 and loss of a defined interest
rate shift. The scenarios are run only for liabilities that represent the major interest-bearing positions.
At June 30, 2013, if interest rates on floating rate borrowings had been 1% higher / lower with all other
variables held constant, post-tax profit for the year would have been Rs 75.619 million (2012: Rs 108.867
million) lower / higher, mainly as a result of higher / lower interest expense on floating rate borrowings.
(b) Credit risk
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 Company arises from cash and cash equivalents, derivative financial instruments
and deposits with banks and financial institutions, as well as credit exposures to distributors and
wholesale and retail 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. The utilisation of credit limits is regularly monitored and
major sales to retail customers are settled in cash. For banks and financial institutions, only
independently rated parties with a strong credit rating are accepted.
(i) Exposure to credit risk
The Company monitors the credit quality of its financial assets with reference to historical performance
of such assets and available external credit ratings. The carrying values of financial assets exposed to
credit risk and which are neither past due nor impaired are as under:
2013 2012
Long term loans and deposits 95,535 120,342
Trade debts 88,808 123,699
Advances, deposits, prepayments 281,281 392,972
Balances with banks 468,764 425,207
934,388 1,062,220
87

2013 2012
The ageing analysis of trade receivables is as follows:
Up to 90 days 64,858 45,678
90 to 180 days 2,954 16,097
181 to 365 days 8,075 6,482
Above 365 days 12,921 55,442
88,808 123,699
The management estimates the recoverability of trade receivables on the basis of financial position and past
history of its customers based on the objective evidence that it shall not receive the amount due from the
particular customer. The provision is written off by the Company when it expects that it cannot recover the
balance due. Any subsequent repayments in relation to amount written off are credited directly to profit
and loss account.
(ii) Credit quality of financial assets
The credit quality of financial assets that are neither past due nor impaired 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 2013 2012
Allied Bank Limited A1+ AA+ PACRA 378 -
Askari Bank Limited A1+ AA PACRA 210 10,783
Bank Alfalah Limited A1+ AA PACRA 147,244 85,044
Bank Islami
Pakistan Limited A1 A PACRA 313 1,499
Bank of Punjab A1+ AA- PACRA 226 10,021
Barclay's Bank
PLC Pakistan A-1 A S&P 6,751 9,157
Citibank N.A. P-2 A3 Moody's 44 96
Dubai Islamic Bank
Pakistan Limited A-1 A JCR-VIS 1,844 1,079
Faysal Bank Limited A1+ AA PACRA 159 47,413
Habib Bank Limited A-1+ AAA JCR-VIS 13,720 -
HSBC Bank Middle
East Limited P-1 A2 Moody's 24 40
MCB Bank Limited A1+ AAA PACRA 250,150 240,137
Meezan Bank Limited A-1+ AA JCR-VIS 1,107 160
National Bank of Pakistan A-1+ AAA JCR-VIS 1,087 1,387
NIB Bank Limited A1+ AA- PACRA 14,671 14,924
Silk Bank Limited A-2 A- JCR-VIS 155 376
Standard Chartered Bank
(Pakistan) Limited A1+ AAA PACRA 338 2,852
United Bank Limited A-1+ AA+ JCR-VIS 30,097 239
Soneri Bank Limited A1+ AA- PACRA 246 -
468,764 425,207
(c) Liquidity risk
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.
88

Management monitors the forecasts of the Company’s cash and cash equivalents (note 37) 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
balance sheet liquidity ratios against internal and external regulatory requirements and maintaining
debt financing plans.
The table below analyses the Company’s financial liabilities and net-settled derivative financial liabilities
into relevant maturity groupings based on the remaining period at the balance sheet to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows as the
impact of discounting is not significant.
At June 30, 2013 Carrying Less than 1 Between 1 and
value year 2 years 3 to 5 years
Long term finances 4,327,841 1,428,654 1,007,215 1,891,972
Trade and other payables 1,783,768 1,783,768 - -
Accrued finance cost 125,830 125,830 - -
Short term borrowings - secured 5,420,290 5,420,290 - -
11,657,729 8,758,542 1,007,215 1,891,972
15,258,414 10,629,331 1,356,225 3,272,858
43.2 Capital risk management
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 total debt divided by total
capital employed. Total debt represents long term and short-term finances obtained by the Company.
Total capital employed includes equity as shown in the balance sheet plus total debt. The Company’s
strategy, which was unchanged from last year, was to maintain a gearing ratio of 60% debt and 40%
equity. The gearing ratio as at June 30, 2013 and June 30, 2012 is as follows:
2013 2012
Total debt 9,748,131 13,519,318
Total equity 47,998,214 32,930,632
Total capital employed 57,746,345 46,449,950
Gearing ratio 17% 29%
89

43.3 Fair value estimation
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:
As at June 30, 2013
Level 1 Level 2 Level 3 Total
Assets
Investments - Available for sale 26,009,947 - - 26,009,947
Derivative financial instruments - 1,837 - 1,837
Total assets 26,009,947 1,837 - 26,011,784
Liabilities - - - -
Total liabilites - - - -
As at June 30, 2012
Assets
Derivative financial instruments - - - -
15,787,367 - - 15,787,367
Liabilities - - - -
Total liabilites - - - -
43.4 Financial instruments by categories
At fair value
through profit Available for Loans and
or loss sale receivables Total
As at June 30, 2013
Assets as per balance sheet
Derivative financial instrument 1,837 - - 1,837
Long term loans and advances - - 95,535 95,535
Loans, advances and other
receivables - - 281,281 281,281
Investments - 26,513,578 - 26,513,578
Cash and bank balances - - 468,881 468,881
1,837 26,513,578 845,697 27,361,112
90

At fair value
As at June 30, 2012
Loans, advances and other
receivables - - 392,972 392,972
Investments - 15,990,996 - 15,990,996
- 15,990,996 941,755 16,932,751
Financial liabilities at amortized
cost
2013 2012
Liabilities as per balance sheet
Long term finance - secured 4,327,841 6,785,851
Accrued mark up 125,830 162,931
Trade and other payables 1,206,670 1,327,476
5,660,341 8,276,258
44. Date of authorisation for issue
These financial statements were authorised for issue on September 04, 2013 by the Board of Directors of
the Company.
45. Events after the balance sheet date
The Board of Directors have proposed a final dividend for the year ended June 30, 2013 of Rs. 3 (2012: Rs 1.50)
per share, amounting to Rs 1,314.357 million (2012: Rs 657.179 million) at their meeting held on September 04,
2013 for approval of the members at the Annual General Meeting to be held on October 31, 2013. These
financial statements do not reflect this appropriation.
46. Corresponding figures
Corresponding figures have been re-arranged and reclassified, wherever necessary, for the purposes of
comparison. Significant re-arrangement made are as follows:
Opening balance of "Others" - Capital Work in Progress for the year ended
June 30,2012 has been classified to "Civil Works" - Capital Work in Progress 11,534
“Mark-up on loan / advances to related parties" has been classified from
Income from non-financial assets to Income from financial assets as it is
considered a better presentation under International Accounting Standard
32 - Financial instruments : Presentation. 36,839
91

19
Consolidated
Financial Statements

D.G.KhanCementCompanyLimitedGroupAnnualReport2013
94
The Directors of your company are pleased to submit
their report along with audited consolidated financial
statements for the year ended June 30, 2013.
Our economy is in continuous grip of financial turmoil
since last five years besides devastating law and order
condition and energy crisis. The new government of
country will have to face the situation and should take
concrete steps with sincerity in right direction. Pakistan’s
economy has a lot of potential to explore. Our GDP
grew at about 3.6% for last year that represent sluggish
trend.
We hope that the synergy benefits of DG Khan Cement
Company Limited (DGKC) and Nishat Paper Products
Limited (NPPL) will soon be collected. NPPL’s operational
profitability is linked with cement sector. While slow
economic activity directly hit the construction and its
related industries. New avenues need to be explored
to reap the benefits of synergy and this vertical
integration. The main identified risks are energy, foreign
exchange, price volatility, demand of products and
interest rates. The management of your company is
keeping its eyes on all possible risks and is trying its best
to mitigate those.
DIRECTORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
Sales 25,826,642 23,846,341 19,451,360 16,973,236 18,368,507
Cost of Sales 16,401,263 16,236,017 14,797,866 13,928,614 12,563,681
Gross Profit 9,425,379 7,610,324 4,653,494 3,044,622 5,804,826
Administrative Cost 410,957 273,884 216,927 176,497 145,547
Selling Cost 1,763,924 2,218,815 2,484,622 1,005,271 1,881,101
Other Operating Cost 553,441 520,101 169,139 204,791 1,081,078
Other Income 1,434,605 1,147,425 1,088,666 875,085 735,021
Operational Income 8,131,662 5,744,949 2,871,472 2,533,148 3,432,121
Finance Cost 1,105,707 1,782,871 2,189,613 2,022,399 2,777,663
Income before Tax 7,025,955 3,962,078 681,859 510,749 654,458
Taxation 1,632,422 123,753 484,698 199,973 239,376
Net Profit 5,393,533 4,085,831 197,161 310,776 415,082
Here are the annual performance highlights for FY13 in comparison with last years:
Companys’ Staff and Customers
We wish to record our appreciation of continued commitment of our employees and patronage of our customers.
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
-
Consolidated
GP (%)
Consolidated
NP (%)
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
Consolidated
Sales (Net)
Mian Raza Mansha
Chief Executive Officer
Lahore: September 04, 2013
* PKR in thousands
* PKR in thousands

95
We have audited the annexed consolidated financial statements comprising consolidated balance sheet
of D.G. Khan Cement Company Limited (the Holding Company) and its subsidiary company (hereinafter
referred to as ‘the Group’) as at June 30, 2013 and the related consolidated profit and loss account,
consolidated statement of comprehensive income, consolidated cash flow statement and consolidated
statement of changes in equity together with the notes forming part thereof, for the year then ended. We
have also expressed a separate opinion on the financial statements of D.G. Khan Cement Company Limited.
Its subsidiary company, Nishat Paper Products Company Limited, was audited by another firm of auditors,
whose report has been furnished to us and our opinion in so far as it relates to the amounts included for such
company, is based solely on the report of such other auditors. These financial statements are the responsibility
of the Holding Company’s management. Our responsibility is to express an opinion on these financial statements
based on our audit.
Our audit was conducted in accordance with the International Standards on Auditing and accordingly
included such tests of accounting records and such other auditing procedures as we considered necessary
in the circumstances.
As stated in note 2.2.1 annexed to the financial statements, the Group has changed its accounting policies
on initial application of standards, amendments or interpretations to existing standards.
In our opinion the consolidated financial statements present fairly the financial position of D.G. Khan Cement
Company Limited and its subsidiary company (the Group) as at June 30, 2013 and the results of their operations
for the year then ended.
Lahore,
AUDITORS' REPORT TO THE MEMBERS

Chief Executive
CONSOLIDATED BALANCE SHEET
2013 2012
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Authorised capital
-950,000,000 (2012: 950,000,000)
ordinary shares of Rs 10 each 9,500,000 9,500,000
-50,000,000 (2012: 50,000,000)
preference shares of Rs 10 each 500,000 500,000
10,000,000 10,000,000
Issued, subscribed and paid up capital
438,119,118 (2012: 438,119,118)
ordinary shares of Rs 10 each 5 4,381,191 4,381,191
Reserves 6 33,824,228 23,601,636
Accumulated profit 9,827,566 5,036,891
48,032,985 33,019,718
Non-controlling interest 275,949 330,265
48,308,934 33,349,983
NON-CURRENT LIABILITIES
Long term finances 7 3,117,937 4,649,083
Long term deposits 8 65,383 68,355
Retirement and other benefits 9 89,303 185,116
Deferred taxation 10 3,133,194 1,602,750
6,405,817 6,505,304
CURRENT LIABILITIES
Trade and other payables 11 2,464,828 2,231,863
Accrued finance cost 12 145,940 178,652
Short term borrowing - secured 13 6,388,501 7,559,348
Current portion of non-current liabilities 14 1,471,282 2,245,561
Provision for taxation 35,090 35,090
10,505,641 12,250,514
CONTINGENCIES AND COMMITMENTS 15 - -
65,220,392 52,105,801
The annexed notes 1 to 47 form an integral part of these consolidated financial statements
96

Director
2013 2012
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 16 29,764,372 28,073,573
Intangible assets 17 55,356 73,808
Investments 18 8,447,231 4,661,316
Long term loans, advances and deposits 19 96,441 138,748
38,363,400 32,947,445
CURRENT ASSETS
Stores, spares and loose tools 20 4,187,541 4,198,477
Stock-in-trade 21 2,219,664 1,596,784
Trade debts 22 481,889 486,597
Investments 23 17,862,741 11,126,071
Advances, deposits, prepayments
and other receivables 24 418,338 301,567
Income tax recoverable 1,185,693 986,467
Derivative financial instrument 25 1,837 -
Cash and bank balances 26 499,289 462,393
26,856,992 19,158,356
65,220,392 52,105,801
AS AT JUNE 30, 2013
97

2013 2012
Sales 27 25,826,642 23,846,341
Cost of sales 28 (16,401,263) (16,236,017)
Gross profit 9,425,379 7,610,324
Administrative expenses 29 (410,957) (273,884)
Selling and distribution expenses 30 (1,763,924) (2,218,815)
Other operating expenses 31 (553,441) (520,101)
Other income 32 1,434,605 1,147,425
Profit from operations 8,131,662 5,744,949
Finance cost 33 (1,105,707) (1,782,871)
Profit before taxation 7,025,955 3,962,078
Taxation 34 (1,632,422) 123,753
Attributable to:
Equity holders of the parent 5,447,849 4,096,975
Non-controlling interest (54,316) (11,144)
5,393,533 4,085,831
Earnings per share - basic and diluted 35 12.43 9.35
The annexed notes 1 to 47 form an integral part of these consolidated financial statements.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
98

2013 2012
Other comprehensive income /(loss) for the year
Items that may be re-classified subsequently to profit and loss
Available for sale financial assets
- Change in fair value 10,222,592 (1,394,769)
Total comprehensive income for the year 15,616,125 2,691,062
Attributable to:
Equity holders of the parent 15,670,441 2,702,206
Non-controlling interest (54,316) (11,144)
15,616,125 2,691,062
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
99

CONSOLIDATED CASH FLOW STATEMENT
2013 2012
Cash flows from operating activities
Cash generated from operations 36 8,201,525 6,191,390
Finance cost paid (1,292,521) (1,909,363)
Retirement and other benefits paid (174,011) (20,205)
Taxes paid (301,204) (397,808)
Long term deposits - net (2,972) (2,538)
Net cash generated from operating activities 6,430,817 3,861,476
Cash flows from investing activities
Fixed capital expenditure (3,349,154) (2,761,493)
Proceeds from sale of property, plant and equipment 51,689 205,300
Long term loans, advances and deposits - net 42,307 (4,623)
Interest received 1,623 1,917
Dividend received 995,645 1,058,708
Net cash used in investing activities (2,257,890) (1,500,191)
Cash flows from financing activities
Proceeds from long term finances 800,000 1,906,382
Repayment of long term finances (3,108,010) (2,242,049)
Dividend paid (657,174) -
Net cash used in financing activities (2,965,184) (335,667)
Net increase in cash and cash equivalents 1,207,743 2,025,618
Cash and cash equivalents at the beginning of the year (7,096,955) (9,122,573)
Cash and cash equivalents at the end of the year 37 (5,889,212) (7,096,955)
100

D.G.KhanCementCompanyLimitedGroup
DirectorChiefExecutive
CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY
FORTHEYEARENDEDJUNE30,2013
BalanceasonJune30,20114,381,1914,557,16314,974,881353,5105,110,851939,91630,317,512341,40930,658,921
Totalcomprehensiveincome/
(loss)fortheyear
-Profit/(loss)fortheyear-----4,096,9754,096,975(11,144)4,085,831
-Othercomprehensiveloss
fortheyear--(1,394,769)---(1,394,769)-(1,394,769)
--(1,394,769)--4,096,9752,702,206(11,144)2,691,062
BalanceasonJune30,20124,381,1914,557,16313,580,112353,5105,110,8515,036,89133,019,718330,26533,349,983
Transactionswithowners
-Finaldividendfortheyear
endedJune30,2012
Rs1.50pershare-----(657,179)(657,179)-(657,179)
Totalcomprehensiveincome
/(loss)fortheyear
-Profit/(loss)fortheyear-----5,447,8545,447,854(54,316)5,393,538
-Othercomprehensiveincome
fortheyear--10,222,592---10,222,592-10,222,592
--10,222,592--5,447,85415,670,446(54,316)15,616,130
BalanceasonJune30,20134,381,1914,557,16323,802,704353,5105,110,8519,827,56648,032,985275,94948,308,934
Theannexednotes1to47formanintegralpartoftheseconsolidatedfinancialstatements.
Share
Premium
Fair
Value
Reserve
Capital
Redemption
Reserve
Fund
General
Reserve
Accumulated
Profit
Totalequity
attributableto
shareholders
ofparent
company
Non-
Controlling
Interest
Rupeesinthousand
Total
Share-
holders
equity
Share
Capital
CapitalReserveRevenueReserve
AnnualReport2013
101

CONSOLIDATED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
1. Legal status and nature of business
The group comprises of:
- D. G. Khan Cement Company Limited ("the Parent Company"); and
- Nishat Paper Products Company Limited ("the Subsidiary Company")
D. G. Khan Cement Company Limited is a public limited company incorporated in Pakistan and is listed on
Karachi, Lahore and Islamabad Stock Exchanges. It is principally engaged in production and sale of Clinker,
Ordinary Portland and Sulphate Resistant Cement. The registered office of the Parent Company is situated
at 53-A Lawrence Road, Lahore.
Nishat Paper Products Company Limited is a public limited company incorporated in Pakistan under the
Companies Ordinance, 1984 on July 23, 2004. It is principally engaged in the manufacture and sale of paper
products and packaging material.
% age of holding
- Nishat Paper Products Company Limited 50%
2. Basis of preparation
2.1 These consolidated financial statements have been prepared in accordance with the requirements
of the Companies Ordinance, 1984 (the Ordinance) and the approved accounting standards as
applicable in Pakistan. Approved accounting standards comprise of such International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board and Islamic
Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as
are notified under the Companies Ordinance, 1984, provisions of and directives issued under the
Companies Ordinance, 1984. Wherever the requirements of the Companies Ordinance, 1984 or
directives issued by Securities and Exchange Commission of Pakistan differ with the requirements of
IFRS or IFAS, the requirements of the Companies Ordinance, 1984 or the requirements of the said
directives prevail.
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 and are relevant to the Group
There were certain new standards, amendments to the approved accounting standards and new
interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).
Interpretations which became effective during the year but are considered not to be relevant or have
any significant effect on the Group's operations and are, therefore, not disclosed in these financial
statements except for the amendment to IAS 1 'Presentation of financial statements' regarding 'other
comprehensive income' as explained below :
- Amendment to IAS 1, ‘Financial statement presentation’ regarding other comprehensive income,
emphasises on the requirement for entities to group items presented in other comprehensive income
(OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently
(reclassification adjustments). The application of the amendment will not affect the results or net
assets of the Group as it is only concerned with presentation and disclosures.
102

2.2.2 Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Group
The following amendments and interpretations to existing standards have been published and are
mandatory for the Group's accounting periods beginning on or after July 01, 2013 or later periods, and
the Group has not early adopted them:
-IFRS 7, ‘Disclosures on offsetting financial assets and financial liabilities' (Amendment), issued on
December 19, 2011. The new disclosure requirements apply to offsetting of financial assets and
financial liabilities. The amendment clarifies that the right of set-off must be available at present i.e. it
is not contingent on a future event and must be legally enforceable for all counterparties. This
amendment reflects the requirements to enhance current offsetting disclosures. The new disclosure is
intended to facilitate comparison between those entities that prepare IFRS financial statements and
those that prepare US GAAP financial statements. The Group shall apply these amendments for the
financial reporting period commencing on July 01, 2013 and does not expect to have any material
impact on its financial statements.
-IAS 19, 'Employee Benefits' (Amendment), issued in June 2011. This is applicable on annual periods
beginning on or after 1 January 2013. These amendments eliminate the corridor approach and
calculate finance costs on a net funding basis. The Group shall apply these amendments for the
financial reporting period commencing on July 01, 2013 and is yet to assess the impact of this
transition.
-IFRS 9, ‘Financial Instruments’, addresses the classification, measurement and derecognition of
financial assets and financial liabilities. The standard is not applicable until January 01, 2015 but is
available for early adoption. This is the first part of a new standard on classification and measurement
of financial assets and financial liabilities that will replace IAS 39, ‘Financial Instruments: Recognition
and measurement’. IFRS 9 has two measurement categories: amortised cost and fair value. All equity
instruments are measured at fair value. A debt instrument is measured at amortised cost only if the
entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the IAS 39 requirements. These include amortised-cost
accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is
that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change
due to an entity's own credit risk is recorded in other comprehensive income rather than the income
statement, unless this creates an accounting mismatch. This change will mainly affect financial
institutions. There will be no impact on the Group’s accounting for financial liabilities, as the new
requirements only affect the accounting for financial liabilities that are designated at fair value
through profit or loss, and the Group does not have any such liabilities.
-IFRS 10, 11 and 12, (Amendment on transitional guidance) , issued in July 2012, is applicable on annual
periods beginning on or after January 01, 2013, provide additional transition relief in IFRSs 10, 11 and
12, limiting the requirement to provide adjusted comparative information to only the preceding
comparative period. For disclosures related to unconsolidated structured entities, the amendments
will remove the requirement to present comparative information for periods before IFRS 12 is first
applied. The Group shall apply this amendment for the financial reporting period commencing on July
01, 2013 and does not expect to have any material impact on its financial statements.
-IFRS 11, 'Joint Arrangements', applicable on annual periods beginning on or after January 01, 2013, is
a more realistic reflection of joint arrangements by focusing on the rights and obligations of the
arrangement rather than its legal form. There are two types of joint arrangement: joint operations and
joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations
relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and
expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement
and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer
allowed. The Group shall apply these amendments for the financial reporting period commencing on
July 01, 2013 and does not expect to have any material impact on its financial statements.
-IFRS 12 - ‘Disclosures of interests in other entities’. This is applicable on accounting periods beginning
on or after January 01, 2013. This standard includes the disclosure requirements for all forms of interests
in other entities, including joint arrangements, associates, special purpose vehicles and other off
103

balance sheet vehicles. The Group shall apply this standard from July 01, 2013 and does not expect to
have any material impact on its financial statements.
-IFRS 13 - ‘Fair value measurement’. This is applicable on accounting periods beginning on or after
January 01, 2013. This standard aims to improve consistency and reduce complexity by providing a
precise definition of fair value and a single source of fair value measurement and disclosure
requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US
GAAP, do not extend the use of fair value accounting but provide guidance on how it should be
applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The
Group shall apply this standard from July 01, 2013 and does not expect to have any material impact
on its financial statements.
3. Basis of measurement
3.1 These consolidated financial statements have been prepared under the historical cost convention
except for revaluation of certain financial instruments at fair value and recognition of certain
employee retirement benefits at present value.
3.2 The Group's significant accounting policies are stated in note 4. Not all of these significant policies
require the management to make difficult, subjective or complex judgments or estimates. The
following is intended to provide an understanding of the policies the management considers critical
because of the complexity, judgment and estimation involved in their application and their impact on
these consolidated financial statements. Judgments and estimates are continually evaluated and are
based on historical experience, including expectations of future events that are believed to be
reasonable under the circumstances. These judgments involve assumptions or estimates in respect of
future events and the actual results may differ from these estimates. The areas involving a higher
degree of judgments or complexity or areas where assumptions and estimates are significant to the
consolidated financial statements are as follows:
a) Provision for taxation - note 4.3 and 34
b) Provision for employees' retirement benefits - note 4.4 and 9
c) Residual values and useful lives of depreciable assets - note 4.6 and 16.1
d) Provisions and contingencies - note 15
e) Determining the useful lives and residual values of intangible assets - note 4.8 and 17
4. Significant accounting policies
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, unless otherwise stated.
4.1 Principles of consolidation
Subsidiary Company
The consolidated financial statements include the financial statements of D. G. Khan Cement
Company Limited and its subsidiary Nishat Paper Products Company Limited with 50% holding (2012:
50%) ("the Group Companies").
Subsidiary is that enterprise in which Parent Company directly or indirectly controls, beneficially owns
or holds more than 50% of voting securities or otherwise has power to elect and appoint more then
50% of its Directors. The financial statements of the subsidiary are included in the consolidated
financial statements from the date control commences until the date control ceases.
The assets and liabilities of the Subsidiary Company have been consolidated on a line by line basis and
carrying value of investments held by the Parent Company is eliminated against the Subsidiary
Company's shareholders' equity in the consolidated financial statements. Material intra-group
balances and transactions have been eliminated.
Non-controlling interests are that part of the net reserves of the operation and of net assets of the
subsidiary attributable to interests which are not owned by the Group. Non-controlling interest is
presented as a separate line item in the consolidated financial statements.
104

4.2 Borrowings
Interest bearing borrowings are recognised initially at fair value less attributable transaction cost.
Subsequent to initial recognition, these are stated at amortised cost with any difference between cost
and redemption value being recognised in the consolidated profit and loss over the period of the
borrowings on an effective interest rate basis. Preference shares, which are mandatorily redeemable
on a specific date at the option of the Group, are classified as liabilities. The dividend on these
preference shares is recognised in the consolidated profit and loss account as finance cost. Finance
costs are accounted for on an accrual basis.
4.3 Taxation
Income tax expense comprises current and deferred tax. Income tax is recognised in consolidated
profit and loss account except to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current
Provision of current tax is based on the taxable income for the year determined in accordance with
the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax
rates or tax rates expected to apply to profit for the year if enacted after taking into account tax
credits, rebates and exemptions, if any. 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.
Deferred
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary
differences arising from differences between the carrying amount of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of the
taxable profit. 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 calculated at the rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on the tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to
the consolidated profit and loss account, except in the case of items charged or credited to equity in
which case it is included in the consolidated statement of changes in equity.
4.4 Employees' retirement benefits and other obligations
The main features of the schemes operated by the Group for its employees are as follows:
D. G. Khan Cement Company Limited
Defined benefit plans
The Parent Company operates an approved funded defined benefit gratuity plan for all employees
having a service period of more than five years for management staff and one year 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,
2013 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
Parent Company as reduced by benefits paid during the year.
The amount recognized in consolidated balance sheet represents the present value of the defined
benefit obligation as adjusted for unrecognized actuarial gains and losses and as reduced by the fair
value of the plan assets.
105

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:
Expected increase in eligible pay 9.5% p.a.
Expected rate of return on plan assets 5.0% p.a.
The expected mortality rates assumed are based on the EFU 61-66 mortality table.
The Parent Company's policy with regard to actuarial gains / losses is to follow minimum
recommended approach under IAS 19 "Employee Benefits".
The Parent Company operates a recognised provident fund for all its regular employees. Equal
monthly contributions are made to the fund both by the Parent 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. Obligation for contributions to defined contribution plan is recognised as an expense in the
consolidated profit and loss account as and when incurred.
Accumulating compensated absences
The Parent Company provides for accumulating compensated absences, when the employees
render service that increases 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 90 days in case of officers. Any balance in excess of 90 days can be encashed up to 17 days a year
only. Any further unutilised leaves lapse. In case of workers, unutilised leaves may be accumulated
without any limit, 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 Parent Company's management.
Provisions are made annually to cover the obligation for accumulating compensated absences
based on actuarial valuation and are charged to consolidated profit and loss account. The most
recent valuation was carried out as at June 30, 2013 using the "Projected Unit Credit Method".
The amount recognised in the consolidated balance sheet represents the present value of the
defined benefit obligations. Actuarial gains and losses are charged to the consolidated profit and loss
account 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:
Expected rate of increase in salary level per annum; and 9.5% p.a.
Expected mortality rate EFU 61-66 mortality table.
Nishat Paper Products Company Limited
The Subsidiary Company operates a recognised provident fund for all its regular employees. Equal
monthly contributions are made to the fund both by the Parent 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. Obligation for contributions to defined contribution plan is recognised as an expense in the
consolidated profit and loss account as and when incurred.
4.5 Trade and other payables
Financial liabilities are initially recognised at fair value plus directly attributable cost, if any, and subse-
quently at amortised cost using effective interest rate method.
Other amounts payable are carried at cost which is the fair value of the consideration to be paid in
future for goods and services.
106

4.6 Property, plant and equipment
Property, plant and equipment, 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 property, plant and equipment signifies historical cost, gains
and losses transferred from equity on qualifying cash flow hedges as referred to in note 4.17 and
borrowing costs as referred to in note 4.20.
Depreciation on all property, plant and equipment is charged to the consolidated profit and loss
account on the reducing balance method, except for plant and machinery which is being
depreciated using the straight line method, so as to write off the historical cost of such asset over its
estimated useful life at annual rates mentioned in note 16.1 after taking into account their residual
values.
financial year end and adjusted if impact on depreciation is significant.
Depreciation on additions to property, plant and equipment is charged from the month in which an
asset is acquired or capitalised while no depreciation is charged for the month in which the asset is
disposed off.
The Group assesses at each balance sheet date whether there is any indication that property, plant
and equipment may be impaired. If such indication exists, the carrying amounts of such assets are
reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying
amounts exceed the respective recoverable amount, assets are written down to their recoverable
amounts and the resulting impairment loss is recognised in the consolidated profit and loss account.
The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Where
an impairment loss is recognised, the depreciation charge is adjusted in the future periods to allocate
the asset's revised carrying amount over its estimated useful life.
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 profit and loss account during the period in which they are
incurred.
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.
4.7 Capital work-in-progress
Capital work-in-progress and stores held for capital expenditure are stated at cost less any identified
impairment loss and represents expenditure incurred on property, plant and equipment during the
construction and installation. All expenditure connected with specific assets incurred during
installation and construction period are carried under capital work-in-progress. Cost also includes
applicable borrowing costs. Transfers are made to relevant property, plant and equipment category
as and when assets are available for use.
4.8 Intangible assets
Expenditure incurred by the Parent Company to acquire Oracle enterprise resource planning (ERP)
system has been capitalised as intangible assets and stated at cost less accumulated amortisation
and any identified impairment loss. Intangible assets are amortised using the straight line method at
the rate mentioned in note 17.1.
Amortisation on additions to intangible assets is charged from the month in which an asset is acquired
or capitalised while no amortisation is charged for the month in which the asset is disposed off.
The Parent Company assesses at each balance sheet date whether there is any indication that
intangible assets may be impaired. If such an indication exists, the carrying amounts of such assets are
107

reviewed to assess whether they are recorded in excess of their recoverable amount. Where carrying
amounts exceed the respective recoverable amount, assets are written down to their recoverable
amounts and the resulting impairment loss is recognised in the consolidated profit and loss account.
The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Where
an impairment loss is recognised, the amortisation charge is adjusted in the future periods to allocate
the asset's revised carrying amount over its estimated useful life.
4.9 Leases
Finance leases
Leases where the Group has substantially all the risks and rewards of ownership are classified as
finance leases. At inception, finance leases are capitalised at the lower of present value of minimum
lease payments under the lease agreements and the fair value of the assets, less accumulated
depreciation and impairment loss, if any.
The related rental obligations, net of finance costs, are included in liabilities against assets subject to
finance lease. The liabilities are classified as current and non-current depending upon the timing of the
payment.
Minimum lease payments made under finance leases are apportioned between the finance cost and
the reduction of the outstanding liability. The finance cost is allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Contingent lease payments, if any, are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed. The interest element of the
rental is charged to income over the lease term.
Assets acquired under a finance lease are depreciated over the estimated useful life of the assets on
reducing balance method except plant and machinery which is depreciated on straight line method
at the rates mentioned in note 16. Depreciation of leased assets is charged to the consolidated profit
and loss account.
financial year-end and adjusted if impact of depreciation is significant.
Depreciation on additions to leased assets is charged from the month in which an asset is acquired
while no depreciation is charged for the month in which the asset is disposed off.
Operating leases
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit on a straight-line basis over the lease term.
4.10 Investments
Investments in equity instruments of associated company
Associates are all entities over which the Group has significant influence but not control. Investments
in associates are accounted for using the equity method of accounting and are initially recognised at
cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss)
identified on acquisition. The Group's share of its associates' post acquisition profits or losses is
recognised in the consolidated profit and loss account, and its share of post-acquisition movements
in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against
the carrying amount of the investment. When the Group's share of losses in an associate equals or
exceeds its interest in the associate, including any other unsecured receivables, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate. Unrealised gains on transactions between the Group and its associates are eliminated to
the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred.
108

Available for sale
Investments which are intended to be held for an indefinite period of time but may be sold in response
to the need for liquidity are classified as available for sale. Available for sale investments are
recognised initially at fair value plus any directly attributable transaction costs. After initial recognition,
these are stated at fair values unless fair values cannot be measured reliably, with any resulting gains
and losses being taken directly to equity until the investment is disposed off or impaired. At each
reporting date, these investments are remeasured at fair value, unless fair value cannot be reliably
measured. At the time of disposal, the respective surplus or deficit is transferred to consolidated profit
and loss account. Fair value of quoted investments is their bid price on Karachi Stock Exchange at the
balance sheet date. Unquoted investments, where active market does not exist, are carried at cost as
it is not possible to apply any other valuation methodology. Unrealised gains and losses arising from the
changes in the fair value are included in fair value reserves in the period in which they arise.
Investments intended to be held for less than twelve months from the balance sheet 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.
Group commits to purchase or sell the investment.
At each balance sheet date, the Group reviews the carrying amounts of the investments to assess
whether there is any indication that such investments have suffered an impairment loss. If any such
indication exists, the recoverable amount is estimated in order to determine the extent of the
impairment loss, if any. Impairment losses are recognised as expense in the consolidated profit and
loss account. Impairment losses recognised in the consolidated profit and loss account on equity
instruments are not reversed through the consolidated profit and loss account.
Investments at fair value through profit or loss
Investments that are acquired principally for the purpose of generating a profit from short-term
fluctuations in price are classified as 'at fair value through profit or loss' and are included in current
assets. They are initially measured at cost and at subsequent reporting dates, these investments are
remeasured at fair value (quoted market price), unless fair value cannot be reliably measured. The
investments for which a quoted market price is not available, are measured at cost as it is not possible
to apply any other valuation methodology. Realised and unrealised gains and losses arising from
changes in fair value are included in consolidated profit or loss for the period in which they arise.
Group commits to purchase or sell the investment.
4.11 Stores and spares
Usable stores and spares are valued principally at moving weighted average cost, while items
considered obsolete are carried at nil value. Items in transit are valued at cost comprising invoice
value plus other charges paid thereon.
Provision is made in the financial statements for obsolete and slow moving stores and spares based on
management estimate.
4.12 Stock-in-trade
Stock of raw materials, except for those in transit, work in process and finished goods are valued
princi-pally at the lower of weighted average cost and net realisable value. 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 appropriate manufacturing overheads.
Materials in transit are stated at cost comprising invoice value plus other charges paid thereon.
Net realisable value signifies the estimated selling price in the ordinary course of business less costs
necessary to be incurred in order to make a sale.
109

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
financial statements for obsolete and slow moving stock in trade based on management estimate.
4.13 Financial instruments
4.13.1Financial assets
The Group classifies its financial assets in the following categories: at fair value through profit or loss,
loans and receivables, available for sale and held to maturity. The classification depends on the
purpose for which the financial assets were acquired. Management determines the classification of its
financial assets at the time of initial recognition.
a) Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss are financial assets held for trading and financial
assets designated upon initial recognition as at fair value through profit or loss. A financial asset is
classified as held for trading if acquired principally for the purpose of selling in the short term. Assets in
this category are classified as current assets.
b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are included in current assets, except for maturities greater
than twelve months after the balance sheet date, which are classified as non-current assets. Loans
and receivables comprise advances, deposits and other receivables and cash and cash equivalents
in the consolidated balance sheet.
c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are included in non-current assets unless management
intends to dispose of the investments within twelve months from the consolidated balance sheet date.
d) Held to maturity
Financial assets with fixed or determinable payments and fixed maturity, where management has the
intention and ability to hold till maturity are classified as held to maturity and are stated at amortized
cost.
All financial assets are recognized at the time when the Group becomes a party to the contractual
provisions of the instrument. Regular purchases and sales of investments are recognized on
trade-date; the date on which the Group commits to purchase or sell the asset.
Financial assets are initially recognized at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are
initially recognized at fair value and transaction costs are expensed in the consolidated profit and loss
account. Dividend income from financial assets at fair value through profit or loss is recognized in the
consolidated profit and loss account when the Group's right to receive payments is established.
Available-for-sale financial assets and financial assets at fair value through profit and loss are
subsequently carried at fair value. 'Loans and receivables' and 'held to maturity' instruments are
carried at amortised cost using effective interest rate method.
The fair values of quoted investments are based on current prices. If the market for a financial asset is
not active (for unlisted securities) , the Group measures the investments at cost less impairment in
value, if any.
Financial assets are derecognized when the rights to receive cash flows from the assets have expired
or have been transferred and the Group has transferred substantially all the risks and rewards of
ownership.
110

4.13.2 Financial liabilities
All financial liabilities are recognized at the time when the Group becomes a party to the
contractual provisions of the instrument.
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 profit and loss account.
4.14 Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the Group 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.
4.15 Trade debts
Trade debts are carried at original invoice amount less an estimate made for doubtful debts based
on a review of all outstanding amounts at the year end. Bad debts are written off when identified.
A provision for doubtful debts is established when there is objective evidence that the Group will
not be able to collect all amounts due according to the original terms of the receivable. Significant
financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments are considered indicators that the trade
receivable is doubtful. Debts, considered irrecoverable, are written off as and when identified.
4.16 Cash and cash equivalents
Cash and cash equivalents are carried in the consolidated balance sheet at cost. For the purpose
of consolidated cash flow statement, cash and cash equivalents comprise cash in hand, demand
deposits, other short term highly liquid investments that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of change in value and short term borrowings.
In the consolidated balance sheet, short term borrowings are included in current liabilities.
4.17 Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently re-measured at their fair values. The method of recognizing the resulting gain
or loss depends on whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. The Group has not designated any derivatives as hedging
instruments and accordingly, the changes in fair value re-measurement are recognised in the
consolidated profit and loss account. Trading derivatives are classified as a current asset or liability.
4.18 Foreign currency transactions and translation
a) Transactions and balances
All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates
prevailing at the balance sheet date. Transactions in foreign currencies are translated into rupees
at exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities that
are measured in terms of historical cost in a foreign currency are translated into rupees at
exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities
denominated in foreign currency that are stated at fair value are translated into rupees at
exchange rates prevailing at the date when fair values are determined. Exchange gains and losses
are included in consolidated profit and loss account.
111

b) Functional and presentation currency
The consolidated financial statements are presented in Pak Rupees, which is the Group's functional
and presentation currency. Figures are rounded to the nearest thousand.
4.19 Provisions
Provisions 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 embodying economic benefits will be
required to settle the obligation; and a reliable estimate of the amount can be made. However,
provisions are reviewed at each consolidated balance sheet date and adjusted to reflect current
best estimate.
Where there are a number of similar obligations, the likelihood that an outflow shall 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.
4.20 Borrowing costs
Mark up, interest and other charges on borrowings are capitalised up to the date of commissioning
of the related property, plant and equipment acquired out of the proceeds of such borrowings. All
other mark up, interest and other charges are charged to the consolidated profit and loss
account.
4.21 Revenue recognition
Revenue represents the fair value of the consideration received or receivable for goods sold, net
of discounts and sales tax. Revenue is recognised when it is probable that the economic benefits
associated with the transaction will flow to the Group and the amount of revenue, and the
associated cost incurred, or to be incurred, can be measured reliably.
Revenue from sale of goods is recognised when the significant risk and rewards of ownership of the
goods are transferred to the buyer i.e. on the dispatch of goods to the customers.
Dividend income and entitlement of bonus shares are recognised when right to receive such
dividend and bonus shares is established.
Return on deposits is accrued on a time proportion basis by reference to the principal outstanding
and the applicable rate of return.
4.22 Dividend
Dividend distribution to the shareholders is recognised as a liability in the period in which the
dividends are approved.
4.23 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to
the chief operating decision-maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been identified as
the Group executive committee.
4.24 Contingent liabilities
Contingent liability is disclosed when:
- 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.
112

4.25 Related party transactions
The Group enters into transactions with related parties on an arm's length basis. Prices for
transactions with related parties are determined using admissible valuation methods, except in
extremely rare circumstances where, subject to approval of the Board of Directors, it is in the
interest of the Group to do so.
5 Issued, subscribed and paid up capital
2013 2012 2013 2012
----(Number of shares)---- ----(Rupees in thousand)----
343,512,029 343,512,029 Ordinary shares of Rs.10 each fully paid in cash 3,435,120 3,435,120
20,000,000 20,000,000 Ordinary shares of Rs. 10 each issued for
consideration other than cash 200,000 200,000
74,607,089 74,607,089 Ordinary shares of Rs. 10 each issued as fully
paid bonus shares 746,071 746,071
438,119,118 438,119,118 4,381,191 4,381,191
137,574,201 (2012: 137,574,201) ordinary shares of the Company are held by Nishat Mills Limited, an associated
concern as at June 30, 2013. In addition, 2,707,944 (2012: 1,407,944) ordinary shares are held by Adamjee
Insurance Company Limited, a related party as at June 30, 2013
113

2013 2012
6. Reserves
Movement in and composition of reserves is as follows:
Capital
- Share premium
Additions during the year - -
- Fair value reserve
Fair value gain / (loss) during the year 10,222,592 (1,394,769)
- Capital redemption reserve fund - note 7.3 353,510 353,510
28,713,377 18,490,785
Revenue
- General reserve
Transferred (to) / from consolidated profit and loss account - -
At the end of the year 5,110,851 5,110,851
33,824,228 23,601,636
6.1 This reserve can be utilised by the Group only for the purposes specified in section 83(2) of the
Companies Ordinance, 1984.
6.2 As referred to in note 4.10 this represents the unrealised gain on remeasurement of investments at
fair value and is not available for distribution. This amount shall be transferred to consolidated profit
and loss account on realisation.
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
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 profit and loss account in order to ensure that fund balance at redemption date was
equal to the principal amount of the preference shares. The preference shares have been
redeemed during the year ended June 30, 2007.
2013 2012
7. Long term finances
These are composed of:
- Long-term loans - secured - note 7.1 - 7.2 4,216,591 5,684,601
- Loan under Musharika arrangement - secured - note 7.1 - 7.2 361,250 1,201,250
4,577,841 6,885,851
Less : Current portion shown under current liabilities - note 14 1,459,904 2,236,768
3,117,937 4,649,083
114

7.1 Long term loans - secured
Rate of Number of
Loan Lender 2013 2012 Mark-up installments Mark-up
(Rupees in thousand) per annum outstanding payable
1 Bank Alfalah Limited - 230,545 *** Base rate + 1.0% The loan has been Quarterly
fully repaid during
the year
2 Allied Bank Limited 512,500 825,000 *** Base rate +0.6% 7 step-up quarterly Quarterly
instalments ending
in May 2015
3 Allied Bank Limited 425,000 675,000 *** Base rate +0.6% 8 step-up quarterly Quarterly
instalments ending
in June 2015
4 The Bank of Punjab 116,667 183,333 ** Base rate + 0.5% 7 equal quarterly Quarterly
instalments ending
in February 2015
5 The Bank of Punjab 720,000 - ** Base rate + 0.5% 18 equal quarterly Quarterly
instalments ending
in December 2017
6 Askari Bank 350,000 431,250 ** Base rate + 0.6% 11 step-up quarterly Quarterly
instalments, ending
in January 2016
7 Faysal Bank - 500,000 ** Base rate + 1.1% The loan has been Quarterly
fully repaid during
the year
8 Habib Bank Limited - 60,000 *** Base rate + 1.65% The loan has been Quarterly
fully repaid during
the year
9 Habib Bank Limited - 40,000 *** Base rate + 1.65% The loan has been Quarterly
fully repaid during
the year
10 The Bank of Punjab 250,000 - ** Base rate + 0.75% 16 equal quarterly Quarterly
instalments ending
in October 2017
Foreign Currency
11 European Investment Bank - 762,686 **** Base rate + 0.063% The loan has been Quarterly
Nil (2012: USD 8.096 million) fully repaid during
the year
12 Eco Trade and Development Bank 1,842,424 1,976,787 **** Base rate + 1.65% 8 equal semi-annual Semi-annually
USD 18.653 million instalments ending
(2012: USD 20.985 million) in May 2017
4,216,591 5,684,601
Musharika Arrangement
13 Meezan Bank 361,250 701,250 ** Base rate + 0.6% 7 step-up quarterly Quarterly
instalments, ending
in March 2015
14 Standard Chartered Bank - 500,000 * Base rate + 0.85% The loan has been Quarterly
fully repaid during
the year
4,577,841 6,885,851
* Base rate: Average ask rate of one-month Karachi Inter Bank Offer Rate ("KIBOR") to be reset for each mark-up period.
** Base rate: Average ask rate of three-month Karachi Inter Bank Offer Rate ("KIBOR") to be reset for each mark-up period.
*** Base rate: Average ask rate of six-month Karachi Inter Bank Offer Rate ("KIBOR") reset for each mark-up period.
****Base rate: Average ask rate of three-month and six-month London Inter Bank Offer Rate ("LIBOR") reset for each mark-up
period.
115

7.2 Security
Loan 1
The loan was secured by registered first pari passu charge over all present and future fixed assets of the
Parent Company, amounting to Rs 1,045.33 million. The total facility amount available was Rs 634 million.
Loan 2
The loan is secured by first pari passu charge over all present and future fixed assets of the Parent Company
amounting to Rs 1,734 million. The total facility amount available is Rs 750 million.
Loan 3
amounting to Rs 1,334 million. The total facility amount available is Rs 1,000 million.
Loan 4
The loan is secured by first pari passu charge on the fixed assets including land, building, plant and
machinery of the Parent Company of Rs 500 Million. The total facility amount available is Rs 200 million.
Loan 5
The loan is secured by an initial ranking charge over present and future land, building and plant and
machinery of the Parent Company to the tune of Rs 1,066.667 million. The charge shall be upgraded to
first Pari Passu within 180 days from the date of first drawn down. The total facility amount available is Rs
800 million.
Loan 6
The loan is secured by first pari passu charge of Rs. 666.667 Million over present and future plant, machinery
and by equitable mortgage of specific land of the Parent Company measuring 482 Acres 1 Kanal. The
total facility amount available is Rs 500 million.
Loan 7
The loan was secured by first pari passu charge of Rs 667 Million (inclusive of 25% margin) over all present
and future assets of the Parent Company. The total facility amount available was Rs. 500 million.
Loan 8
The loan was secured by first exclusive charge over all fixed assets of the Subsidiary Company amounting
to Rs 960 million.
Loan 9
The loan was secured by first exclusive charge over all fixed assets of the Subsidiary Company amounting
to Rs 960 million.
Loan 10
The loan is secured by first pari passu charge over the present and future current assets of the Subsidiary
Company amounting to Rs 334 million and corporate guarantee of the Parent Company.
Loan 11
The loan was secured by first pari passu charge over all present and future movable fixed assets of the
Parent Company amounting to USD 8.349 million. The total facility amount available was USD 44.530 million.
Loan 12
amounting to USD 27.980 million. The total facility amount available is USD 20.985 million.
Loan 13
The loan is secured by first pari passu charge on all present and future fixed assets of the Parent Company.
The charge amount at all times will at least equal the outstanding facility amount with 25% margin. The
total facility amount available is Rs 850 million.
Loan 14
The loan was secured by first pari passu charge over all present and future fixed assets of the Parent
Company amounting to Rs 1,333.333 million. The total facility amount available was Rs 1,000 million.
116

2013 2012
8. Long term deposits
Customers 34,571 34,482
Others 30,812 33,873
65,383 68,355
These represent 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 respectively.
2013 2012
9. Retirement benefits
Staff Gratuity - note 9.1 12,343 119,528
Leave Encashment - note 9.2 76,960 65,588
89,303 185,116
9.1 Staff gratuity
The amounts recognised in the consolidated balance sheet
are as follows:
Present value of defined benefit obligation 225,816 167,467
Fair value of plan assets (149,756) (82)
Unrecognised actuarial losses (63,717) (47,857)
9.1.1 Movement in net liability for staff gratuity
Liability as at July 1 119,528 87,673
Charge for the year including capitalised during the year 51,026 41,271
Contributions plus benefit payments made directly
by the Parent Company during the year (158,211) (9,416)
9.1.2 Movement in defined benefit obligation
Present value of defined benefit obligation as at June 30 225,816 167,467
117

2013 2012
9.1.3 Movement in fair value of plan assets
Fair value of plan assets as at July 1 82 332
Contributions during the year 158,211 9,416
Fair value of plan assets as at June 30 149,756 82
9.1.4 Actual return on plan assets
1,400 35
9.1.5 Plan assets consist of the following:
2013 2012
(Rs in ‘000) Percentage (Rs in ’000) Percentage
Cash and other deposits 1,201 1% 82 100%
Debt instruments 148,555 99% - 0%
149,756 100% 82 100%
2013 2012
9.1.6 Movement in unrecognised actuarial losses
Un-recognised actuarial losses as at July 1 47,857 39,931
Actuarial losses arising during the year 15,860 10,222
Actuarial losses charged to profit during the year - (2,296)
Un recognised actuarial losses as at June 30 63,717 47,857
Actuarial losses charged to profit during the year - 2,262
51,026 41,271
9.1.8 Amounts for current period and previous four annual periods of the fair value of plan assets and present
value of defined benefit obligation are as follows :
2013 2012 2011 2010 2009
As at June 30
Fair value of plan assets (149,756) (82) (332) (394) (274)
Deficit 76,060 167,385 127,603 74,870 55,766
arising on plan obligation 17,256 10,222 25,954 (46) 8,850
on plan assets 1,396 33 1 (28) -
118

9.1.9 Assumptions used for valuation of the defined benefit scheme for managment and non-managment
staff are as under:
2013 2012
Expected rate of return on plan assets Per annum 5.0 % 5.0 %
9.1.10 The Company expects to pay Rs 41.254 million in contributions to defined benefit plan in 2014.
2013 2012
9.2 Leave encashment
Expenses recognised 29,757 26,612
Payments made (15,800) (10,789)
88,338 74,381
Payable within one year - note 14 (11,378) (8,793)
9.2.1 Movement in liability for accumulating compensated
absences
88,338 74,381
Actuarial losses charged to profit during the year 17,205 14,739
29,757 26,612
2013 2012 2011 2010 2009
As at June 30
arising on obligation 17,205 14,739 8,115 587 5,969
9.2.3 Assumptions used for valuation of the accumulating compensated absences are as under:
2013 2012
Expected with drawal and early retirement rate EFU 61-66 mortality table
119

Officers Workers
2013 2012 2013 2012
(days) (days) (days) (days)
Average number of leaves
- Utilized per annum 15.00 15.00 17.00 19.00
- Encashed per annum 9.00 7.00 12.00 16.00
- Utilized per annum in excess
- Encashed per annum in excess
2013 2012
10. Deferred income tax liabilities
The liability for deferred taxation comprises temporary differences relating to:
Deferred tax liability
Accelerated tax depreciation 5,203,450 4,844,508
Deferred tax assets
Provision for retirement and other benefits (27,004) (52,739)
Unabsorbed tax credits (2,043,252) (3,189,019)
3,133,194 1,602,750
Deferred tax asset on tax losses available for carry forward and those representing minimum tax paid available
for carry forward u/s 113 of the Income Tax Ordinance, 2001 are recognized to the extent that the realisation
of related tax benefits through future taxable profits is probable. The Company has not recognised deferred
tax assets of Rs 44.162 million (2012: Rs 81.268 million) in respect of minimum tax paid and available for carry
forward u/s 113 of the Income Tax Ordinance, 2001, as sufficient taxable profits would not be available to
set these off in the foreseeable future. Minimum tax paid u/s 113 aggregating to Rs 72.675 million would not
be available for carry forward against future tax liabilities subsequent to year 2014 through 2018.
2013 2012
11. Trade and other payables
Trade creditors - note 11.1 450,878 682,446
Infrastructure cess 114,992 146,387
Advances from customers 493,726 531,799
Accrued liabilities 697,182 443,292
Workers' profit participation fund - note 11.2 554,977 227,413
Federal excise duty payable 7,117 5,204
Special excise duty payable - 118
Custom duty payable 3,199 51,776
Withholding tax payable 10,633 1,342
Retention money payable 17,767 27,061
Unclaimed dividends 6,788 4,870
Advances against sale of scrap 8,789 930
Advance against sale of fixed asset 68 -
Unclaimed dividend on redeemable preference shares - 125
Others 98,712 109,100
2,464,828 2,231,863
120

11.1 Trade creditors include amount due to related parties amounting to Rs 4.368 million (2012: Rs 2.996
million).
2013 2012
MCB Bank Limited 53 58
Adamjee Insurance Company Limited 2,281 31
Security General Insurance Company Limited 2,034 702
Pakistan Aviators & Aviation (Private) Limited - 2,205
4,368 2,996
11.2 Workers' profit participation fund
Provision for the year 374,336 213,288
Interest for the year 1,261 2,320
603,010 260,870
Less: payments made during the year 48,033 33,457
12. Accrued finance cost
Accrued mark-up on:
Preference dividend on redeemable preference shares 84 84
145,940 178,652
13. Short term borrowings - secured
Short term running finances - secured - note 13.1 1,953,279 2,230,489
Import finances - secured - note 13.2 1,465,222 1,410,859
Export refinance - secured - note 13.3 2,970,000 3,918,000
6,388,501 7,559,348
13.1 Short term running finances - secured
Short term running finances available from various commercial banks under mark up arrangements
amount to Rs 10,275 million (2012: Rs 9,195.163 million). The rates of mark up range from 9.36% to 14.60%
(2012: 12.02% to 15.79%) or part thereof on the balance outstanding. These are secured by first 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 and pledge of 10 million (2012: 10 million)
shares of MCB Bank Limited and 13.5 million (2012: 13.5 million) shares of Nishat Mills Limited.
13.2 Import finances - secured
The Group has obtained import finance facilities aggregating to Rs 8,563 million (2012: Rs 7,617.837
million) from commercial banks. The rates of mark up range from 1.15% to 13.60% (2012: 1.66% to
16.55%). The aggregate import finances are secured by a registered charge on all present and future
current assets of the Group, wherever situated, including stores and spares, stock in trade, book debts,
investments and receivables.
Of the aggregate facility of Rs 10,011.157 million (2012: Rs 10,516.400 million) for opening letters of
credit and Rs 1,430 million (2012: Rs 1,880 million) for guarantees, the amount utilised as at June 30,
2013 was Rs 2,510.69 million (2012: Rs 1,795.340 million) and Rs 837.327 million (2012: Rs 1,158 million)
respectively. The aggregate facilities for guarantees are secured by a registered charge on current
assets of the Group. Of the facility for guarantees, Rs 41.580 million (2012: Rs 36.580 million) is secured
by a lien over bank deposits as referred to in note 26.2.
13.3 Export finances - secured
This represents export refinance loans obtained from various commercial banks, which carry mark up
at 8.5% to 12.30% per annum (2012: 10.5% to 11%). These loans are obtained for a period of 180 days
and are secured against pari passu hypothecation charge over current assets of the Group.
121

2013 2012
14. Current portion of non-current liabilities
Long term finances - note 7 1,459,904 2,236,768
Retirement and other benefits - note 9.2 11,378 8,793
1,471,282 2,245,561
15. Contingencies and commitments
15.1 Contingencies
15.1.1 The Income Tax Officer, while framing the assessments for the assessment years 1984-85 to 1990-91,
has taxed the income of the Parent Company on account of interest on deposits and sale of scrap,
etc. The Appellate Tribunal on appeal filed by the Parent Company issued an order in favour of the
Parent 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 Rs 35.090 million.
15.1.2 During the period 1994 to 1996, the Parent 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 Parent Company
by arguing that the said machinery was on the list of locally manufactured machinery, published by
the Federal Board of Revenue. Consequently, the Parent Company appealed before the Lahore
High Court, Multan Bench, which allowed the Parent Company to release the machinery on furnishing
indemnity bonds with the Custom Authorities.
Collector of Customs and Central Excise, Multan has passed an order dated November 26, 1999,
against the Parent Company on the grounds that the said machinery was being manufactured
locally during the time when it was imported.
An appeal against the order was filed with the Lahore High Court, which has been decided in favour
of the Parent Company. However, the Custom Authorities have filed an appeal with the Supreme
Court of Pakistan against the orders of the Lahore High Court. The Honourable court remanded back
the case to Customs Authorities to reassess the liability of the Parent Company. Appeal against the
order is still pending with the authorities. The Parent Company has paid Rs 159.241 million during the
year on account of Court order. No provision for the remaining outstanding balance of Rs 475.147
million has been made in the financial statements as according to the management of the Parent
Company, there are meritorious grounds that the ultimate decision would be in its favour.
15.1.3 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 Parent Company has 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 Parent Company. The Lahore High Court vide its order dated August
31, 2009 restrained the CCP from enforcing its order against the Parent Company for the time being.
The vires of the Competition Commission of Pakistan, 2007 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. A large number of grounds have been raised by
these Petitioners and the matter is currently being adjudicated by the Lahore High Court, the Sindh
High Court and the Supreme Court of Pakistan. In all these cases, stay orders have been granted by
the Courts. Based on the legal opinion, the management is confident that the Parent Company has
a good case and there are reasonable chances of success in the pending Petition in the Supreme
Court of Pakistan.
122

15.1.4 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 judgement dated January 27, 2009 (upholding its previous judgement
dated February 15, 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 the country 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 Parent Company
has initiated the process of claiming refund of excess excise duty paid by it during the periods from
1994 to 1999 which aggregates to Rs 1,115.145 million. The amount of refund, however, shall be
incorporated in the books of accounts once it is realised by the Parent Company.
15.1.5 The Parent Company, consequent to the order passed by the Supreme Court of Pakistan against the
decision of the Sindh High Court in the matter of infrastructure cess, filed a petition before the Sindh
High Court, challenging the levy of fifth version of the law enforcing infrastructure cess. Earlier, the Sindh
High Court, in August 2008, ruled out that only levies computed against consignments made on or after
December 28, 2006 shall be payable by the petitioners. Although the parties have reached an interim
arrangement, through an order of Sindh High Court dated May 31, 2011, for release of 50% of the
guarantees, the final order from Sindh High Court is still pending. According to the legal counsel of the
Parent Company, chances of favourable outcome of the appeal are fair, therefore 50% of the amount
of infrastructure cess payable has not been incorporated in these financial statements amounting to
Rs. 89.164 million.
15.1.6 The Parent 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, challenging
the levy of sales tax on the in-house consumption of Shale, Gypsum and Limestone for the period of
June 13, 1997 to August 11, 1998. According to the legal counsel of the Parent 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.
15.1.7 The tax authorities have raised demands aggregating to Rs 403.968 million against the Parent Company
in tax years 2010 through 2012 that primarily pertain to concurrent imposition of 'minimum tax' and tax
on 'dividend income' under sections 113 and 5 of the Income Tax Ordinance, 2001 respectively. While
the Parent Company's appeals on this ground are presently pending adjudication at the various levels
of appellate authorities, no provision on this account has been incorporated in the financial statements
as the management considers that meritorious grounds exist to support the position that the matter
will ultimately be decided in Parent Company's favour.
15.1.8 The Group has issued the following guarantees in favour of:
-Collector of Customs, Excise and Sales Tax against levy of Sales Tax, custom duty and excise amounting
to Rs 27.124 million (2012: Rs 30.389 million).
-Director, Excise Collection Office, Sindh Development and Maintenance against recovery of
infrastructure fee amounting to Rs 390.900 million (2012: Rs 375.900 million).
-Director General, Mines and Minerals, Punjab against installation of cement factory near Khairpur,
District Chakwal amounting to Rs 3 million (2012: Rs 3 million).
-Director General, Mines and Minerals, Quetta against Limestone, Shale and other cement manufacturers
amounting to Rs 3 million (2012: Rs 3 million).
-The President of the Islamic Republic of Pakistan against the performance of a contract to Frontier
Works Organization amounting to Rs 2.0 million (2012: Rs 1.5 million)
123

-Managing Director, Pakistan Railways against the performance of a contract amounting to Nil (2012:
Rs 1.908 million).
-Sui Northern Gas Pipelines Limited against supply of 6 MMCFD and 14 MMCFD gas for captive use for
Khairpur Project and for D.G Khan Project respectively amounting to Rs 341.022 million (2012: Rs 722.377
million)
-Professional Tax imposed by Administration Zila Council (The District Coordination Officer, DG Khan)
amounting to Rs 0.05 million (2012: Rs 0.05 million)
-The District Coordination Officer, Faisalabad amounting to Rs 5 million (2012: Nil)
-The Managing Director, Lahore Waste Management Company (LWMC) against the performance of
a contract amounting to Rs 20 million (2012: Rs 20 million)
-Guarantees against export orders amounting to Rs 45.231 million (2012: Nil)
15.2 Commitments in respect of:
(i) Contracts for capital expenditure Rs 224.650 million (2012: Rs 156.17 million).
(ii) Letters of credits for capital expenditure Rs 666.128 million (2012: Rs 760.127 million).
(iii) Letter of credit other than capital expenditure Rs 1,844.562 million (2012: Rs 1,035.213 million).
(iv) The amount of future payments under operating leases and the period in which these payments
will become due are as follows:
2013 2012
Not later than one year 331 331
Later than one year and not later than five years 1,325 1,325
Later than five years 5,839 6,170
7,495 7,826
(v) Commitments for ijarah rentals for ijarah financing from Standard Chartered Modaraba of
Subsidiary Company amounting to Nil (2012: Rs 211.488 million)
2013 2012
Not later than one year - 33,827
Later than one year and not later than five years - 177,661
Later than five years - -
- 211,488
16. Property, plant and equipment
Operating assets - note 16.1 28,348,192 26,076,700
Capital work-in-progress - note 16.2 1,416,180 1,996,873
29,764,372 28,073,573
124

16.1Operatingassets
Freeholdland-509,41970,369579,788---579,788
Leaseholdland3.3363,000-63,0009,4502,10011,55051,450
-Factorybuilding5-105,550,325436,7455,987,0702,437,433312,8772,750,3103,236,760
Roads10556,491-556,491229,56032,693262,253294,238
Quarryequipment201,538,072146,5521,684,624975,68085,6521,061,332623,292
Furniture,fixtureandofficeequipment10-30364,10331,310327,273148,24421,904125,286201,987
(68,140)(44,862)
Vehicles20255,84083,925309,58890,13134,845110,591198,997
(30,177)(14,385)
Aircraft3038,185328,752328,75236,97074,06073,917254,835
(38,185)(37,113)
38,705,5363,929,84742,498,88112,628,8361,618,21314,150,68928,348,192
(136,502)(96,360)
Bookvalue
asatJune
30,2013
Accumulated
Depreciation
asatJuly01,
2012
Accumulated
depreciation
asatJune
30,2013
Depreciation
charge/
(deletions)
fortheyear
Costasat
July01,2012
Cost
asat30June
2013
Annual
rateof
depreciation
%
Additions/
(Deletions)
2013
(Rupeesinthousand)
125

Bookvalue
asatJune
30,2012
Accumulated
Depreciation
asatJuly01,
2011
Accumulated
depreciation
asatJune
30,2012
Depreciation
charge/
(deletions)
fortheyear
Costasat
July01,2011
Cost
asat30June
2012
Annual
rateof
depreciation
%
Additions/
(Deletions)
Freeholdland-341,302168,117509,419---509,419
Leaseholdland3.3363,000-63,0007,3502,1009,45053,550
-Factorybuilding5-105,231,157319,1685,550,3252,122,710314,7232,437,4333,112,892
Roads10449,220107,271556,491195,22934,331229,560326,931
(216,561)(38,439)
Quarryequipment201,497,96640,1061,538,072879,63596,045975,680562,392
Furniture,fixtureandofficeequipment10-30312,83252,435364,103126,74621,606148,244215,859
(1,164)(108)
Vehicles20200,47780,832255,84082,64222,87690,131165,709
(25,469)(15,387)
Aircraft3038,185-38,18536,45052036,9701,215
36,902,5502,046,18038,705,53611,195,3711,487,39912,628,83626,076,700
(243,194)(53,934)
16.1.1FreeholdlandandbuildingincludebookvaluesofRs12million(2012:Rs12million)andRs7.101million(2012:Rs7.101million)respectivelywhichare
heldinthenameofChiefExecutiveoftheParentCompany.ThispropertyislocatedinthelocalityofDefenceHousingAuthoritywheretheby-laws
restricttransferoftitleoftheresidentialpropertyinthenameoftheParentCompany.
20132012
(Rupeesinthousand)
16.1.2Thedepreciationchargefortheyearhasbeenallocatedasfollows:
Costofsales-note281,515,9441,468,832
Administrativeexpenses-note2998,13215,812
SellingandDistributionexpenses-note304,1372,755
1,618,2131,487,399
16.1.3Duringtheyear,theParentCompanyhasidentifiedcertainitemsofoperatingassetsfromwhichfurthereconomicbenefitsarenolongerbeing
derived.Therefore,assetshavingcostofRs68.14million(2012:Nil)andnetbookvalueofRs23.278million(2012:Nil)havebeenretiredfromactiveuse
andhavebeenwrittenoffinthesefinancialstatements.
126

Vehicles
Employees
Employees
Nazir Hussain 555 354 201 586 385 Auction
Mirza Asghar Ali 1,501 944 557 1,333 776 -do-
Khawaja Fakhar-ul-Islam 1,462 316 1,146 1,146 - -do-
Mr. Riayat Ullah Khan 571 365 206 206 - -do-
Arshad Ali 571 368 203 670 467 -do-
Amjad Ali 1,279 805 474 815 341 -do-
Muhammad Salah-ud-din 555 378 177 580 403 -do-
Outside parties
Anwar Ahmed Batla 571 445 126 486 360 Auction
Nadeem Gul 570 344 226 615 389 -do-
Ithfz Mills Ltd. 13,695 4,500 9,195 14,500 5,305 -do-
Amer Adnan 1,520 906 614 1,385 771 -do-
Hameed Ullah 272 149 123 124 1 -do-
Irfan Khan 571 359 212 611 399 -do-
Irfan Khan 571 359 212 651 439 -do-
Asim Murtaza 1,279 916 363 866 503 -do-
Asim Murtaza 570 368 202 456 254 -do-
Maj. Shehzada Jahanzeb 530 281 249 300 51 -do-
Irfan Khan 275 144 131 542 411 -do-
Security General Insurance Company 678 511 167 750 583 Insurance Claim
Khalid Farooq Hashmi 612 375 237 615 378 Auction
Nadeem Gul 290 216 74 398 324 -do-
Rehan Sabri 1,515 944 571 1,262 691 -do-
Sutlej Security Services (Pvt) Ltd 108 51 57 69 12 Negotiation
Office Equipment 38,186 23,826 14,360 - (14,360) Assets written off
Furniture and Fittings 29,954 21,036 8,918 - (8,918) Assets written off
Aircraft Outside party
Syed Sibghat Ullah Shah 38,185 37,062 1,123 22,701 21,578 Sale
136,502 96,360 40,142 51,689 11,547
Particulars
of assets
depreciation
Book
value
Sales
proceeds
Mode of
Disposal
Gain/(Loss)
on disposal
2 0 1 3
16.1.4 Disposal of property, plant and equipment
Detail of property, plant and equipment disposed off during the year is as follows:
127

Plant and
machinery Outside party
Standard Chartered Modaraba 216,561 38,439 178,122 175,000 (3,122) Sale and
leaseback
Vehicles Employees
Muhammad Sajid 560 343 217 527 310 Auction
Iqbal Ghani 12,294 6,903 5,391 16,000 10,609 -do-
Syed Yasir Hussain 174 82 92 368 276 -do-
Hasnat Aziz Bantth 1,501 894 607 1,000 393 -do-
Ch. Muhammad Ali 174 87 87 397 310 -do-
Rizwan Javed 318 276 42 355 313 -do-
Irfan Ahmed 555 318 237 554 317 -do-
Irfan Ahmed 1,090 662 428 767 339 -do-
Sayed Yasir Hussain 427 305 122 375 253 -do-
Attiq-ur-Rehman 879 564 315 1,087 772 -do-
Raheem Buksh 353 256 97 526 429 -do-
Nasir Zahoor 555 343 212 525 313 -do-
Rizwan Javed 555 362 193 555 362 -do-
Ahmed Haroon Khan 571 324 247 686 439 -do-
Imran Fatima 398 207 191 460 269 -do-
Nazar Hussain 555 355 200 582 382 -do-
Major Iftikhar 1,517 870 647 1,125 478 -do-
Tahir Ali Shah 760 708 52 950 898 -do-
Irfan Ahmed 275 139 136 512 376 -do-
Waseem Riaz 753 655 98 635 537 -do-
Nadeem Gul 560 375 185 500 315 -do-
Khalid Farooq Hashmi 555 355 200 560 360 -do-
Office Equipment 213 21 192 213 21 Assets written off
Furniture and Fittings 334 31 303 334 31 -do-
334 31 303 334 31 -do-
284 26 258 284 26 -do-
243,194 53,934 189,260 205,312 16,040
Particulars
of assets
depreciation
Book
value
Sales
proceeds
Mode of
Disposal
Gain/(Loss)
on disposal
2 0 1 2
128

Civil works 349,385 289,030 - - 106,774 (439,066) 306,123
Plant and machinery 1,549,765 2,081,096 46,055 - - (2,698,934) 977,982
Advances 31,108 154,049 - - (106,774) (16,228) 62,155
Others 4,672 13,952 - - - (18,219) 405
Expansion Projects:
- Civil works 18,992 46 - - - - 19,038
- Others 42,951 7,526 - - - - 50,477
1,996,873 2,545,699 46,055 - - (3,172,447) 1,416,180
Balance
as at June
30, 2012
Capital
expenditure
incurred
during
the year
Borrowing
cost
capitalized
during
the year
Capital
expenditure
charged off
during
the year
Transfers
within
capital work
in progress
Transfers to
operating
fixed
assets
Balance
as at June
30, 2013
16.2. Capital work-in-progress
Balance
as at June
30, 2011
Capital
expenditure
incurred
during
the year
Borrowing
cost
capitalized
during
the year
Capital
expenditure
charged off
during
the year
Transfers
within
capital work
in progress
Transfers to
operating
fixed
assets
Balance
as at June
30, 2012
Civil works 218,310 547,603 - - - (416,528) 349,385
Plant and machinery 925,123 2,375,199 - (57,438) - (1,693,119) 1,549,765
Advances 74,190 106,880 - - - (149,962) 31,108
Others 103,496 13,054 - - - (111,878) 4,672
Expansion Projects:
- Civil works 18,992 - - - - - 18,992
- Others 33,709 9,242 - - - - 42,951
1,373,820 3,051,978 - (57,438) - (2,371,487) 1,996,873
2013 2012
17. Intangible assets
This represents Oracle ERP system.
Cost
As at July 1 92,260 -
Additions - 92,260
As at June 30 92,260 92,260
Less: Accumulated amortisation
As at July 1 18,452 -
Amortisation for the year - note 17.1 18,452 18,452
As at June 30 36,904 18,452
55,356 73,808
129

2013 2012
17.1 Oracle ERP system is being amortised over a useful life of five years.
17.1.1 The amortisation charge for the year has been allocated as follows:
Cost of sales - note 28 12,916 12,916
Selling and distribution expenses - note 30 2,768 2,768
18,452 18,452
18. Investments
Related parties - note 18.1 2,027,802 1,727,802
Others - note 18.2 377 387
2,028,179 1,728,189
8,447,231 4,661,316
18.1 Related parties
Nishat Chunian Limited- quoted
Equity held 2.98% (2012: 2.98%)
45,254 45,254
Associates - quoted
Nishat Mills Limited
30,289,501 (2012: 30,289,501) fully paid
ordinary shares of Rs 10 each
Equity held 8.61% (2012: 8.61%)
Market value - Rs 2,853.574 million (2012: Rs 1,441.174 million) 1,577,174 1,577,174
1,326,559 1,326,559
MCB Bank Limited
Equity held: 1.91% (2012: 1.91%)
125,834 125,834
Adamjee Insurance Company Limited
Equity held 2.86% (2012: 2.86%)
230,155 230,155
1,682,548 1,682,548
Associates - unquoted
Nishat Dairy (Private) Limited
30,000,000 (2012: Nil) fully paid ordinary shares of Rs 10 each
Equity held 10.6% (2012: Nil) 300,000 -
300,000 -
2,027,802 1,727,802
Nishat Mills Limited, MCB Bank Limited and Adamjee Insurance Company Limited are associated
undertakings as per the Companies Ordinance, 1984, however, for the purpose of measurement, these
have been classified as available for sale and measured at fair value as the Parent Company does not
have significant influence over these companies.
130

2013 2012
18.2 Others
Maple Leaf Cement Factory Limited
Equity held 0.0% (2012: 0.0%)
Less: Cumulative impairment loss (253) (253)
29 29
Nil (2012: 1,999) fully paid preference shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
Market value - Rs 0.0 million (2012: Rs 0.012 million) - 20
Less: Cumulative impairment loss - (10)
- 10
First Capital Mutual Fund
89,000 (2012: 89,000) certificates of Rs 10 each
Equity held 0.3% (2012: 0.3%)
212 212
Habib Bank Limited
Equity held 0.0% (2012: 0.0%)
18 18
Oil and Gas Development Company Limited
Equity held 0.0% (2012: 0.0%)
76 76
Pakistan Petroleum Limited
1,197 (2012: 958) fully paid ordinary shares of Rs 10 each
Equity held 0.0% (2012: 0.0%)
27 27
Kot Addu Power Company Limited
Equity held 0.0% (2012: 0.0%)
15 15
377 387
18.3 Investments with a face value of Rs 135 million (2012: Rs 235 million) are pledged as security against
bank facilities. 3,509,334 (2012: 3,190,304) shares of MCB Bank Limited are blocked in CDC account.
131

2013 2012
19. Long term loans, advances and deposits
Considered Good
- Loans to related parties - note 19.1 51,617 68,823
- Other loans and advances - note 19.2 44,824 69,925
96,441 138,748
19.1 Loans and advances to related parties
Loan to related party 68,823 86,029
Less: receivable within one year 17,206 17,206
51,617 68,823
These represent unsecured loans of Rs 49 million and Rs 19.823 million (2012: Rs 61.250 million and Rs
24.778 million) given to Sui Northern Gas Pipelines Limited (SNGPL) for the development of infrastructure
for the supply of natural gas to the plants at D.G. Khan and Khairpur respectively. Mark up is charged
at rates of 2% and 1.5% per annum (2012: 2% and 1.5% per annum) respectively and is received annually.
The principal amount is receivable in 5 annual instalments ending December 31, 2016 and March 28,
2017 respectively.
2013 2012
19.2 Other loans and advances
Loans to employees
- Executives - note 19.2.1 94 259
- Others 4,177 3,819
4,271 4,078
Less: receivable within one year
- Executives 56 126
- Others 1,090 1,240
1,146 1,366
3,125 2,712
Security deposits 41,699 67,213
44,824 69,925
19.2.1Executives
Opening balance 259 383
Transfer from others to executives 72 -
Interest accrued 5 5
336 388
Less: repayment during the year 242 129
94 259
These represent secured loans given to executives and other employees for house building and
purchase of motor vehicles and are recoverable in equal monthly instalments over a period of 24 to
96 months. The loans given to executives and other employees carry interest at the rate of 10% per
annum (2012: 10% per annum) except for loans given to workers which are interest free.
The loans of Rs 2.565 million (2012: Rs 2.563 million) are secured against the employees' respective
retirement benefits.
The maximum aggregate amount due from executives at any time during the year was Rs 0.331 million
(2012: Rs 0.383 million).
132

133
2013 2012
20. Stores and spares
Stores [including in transit Rs 15.366 million
(2012: Rs 50.216 million)] 1,349,409 1,393,011
Spare parts [including in transit Rs 144.018 million
(2012: Rs 195.313 million)] 2,829,215 2,798,016
Loose tools 8,917 7,450
4,187,541 4,198,477
20.1 Stores and spares include items which may result in fixed capital
expenditure but are not distinguishable.
21. Stock-in-trade
Raw materials [including in transit Rs 224.92 million
(2012: Rs 82.22 million)] 713,850 776,030
Packing material [including in transit Rs 5.365 million
(2012: Rs 0.013 million)] 280,279 198,086
Work-in-process 856,587 322,049
Finished goods 368,948 300,619
2,219,664 1,596,784
22. Trade debts - considered good
Secured 393,081 362,898
Unsecured
- Related parties - note 22.1 15,582 11,923
- Others 73,226 111,776
481,889 486,597
22.1 Related parties - unsecured
Nishat Developers (Private) Limited - 732
Nishat Hospitality (Private) Limited 1,424 4,256
Nishat Dairy (Private) Limited 3,781 3,587
MCB Bank Limited 1,309 2,974
Nishat Chunian Limited 5,039 -
Nishat Hotels and Properties Limited 3,740 -
Nishat Linen (Private) Limited 289 -
15,582 11,923
Ageing analysis of the amounts due from related parties is as follows :
1 to 3 More then 3 As at June 30, As at June 30,
months months 2013 2012
--------------------Rupees in 000-------------------
Nishat Developers (Private) Limited - - - 732
Nishat Hospitality (Private) Limited 1,424 - 1,424 4,256
Nishat Dairy (Private) Limited 3,781 - 3,781 3,587
Nishat Chunian Limited 5,039 - 5,039 -
Nishat Hotels and Properties Limited 3,740 - 3,740 -
Nishat Linen (Private) Limited 289 - 289 -
MCB Bank Limited 1,309 - 1,309 2,974
Lalpir Power Limited - - - 374
15,582 - 15,582 11,923

2013 2012
23. Investments
Available for sale - quoted
Related parties - note 23.1 479,066 479,066
479,066 479,066
17,862,718 11,126,051
At fair value through profit or loss -note 23.2 23 20
17,862,741 11,126,071
23.1 Related Parties - quoted
MCB Bank Limited - Associated company
73,610,834 (2012: 66,918,940) fully paid
ordinary shares of Rs 10 each
Equity held: 7.27% (2012: 7.27%)
478,234 478,234
Nishat Chunian Limited
Equity held: 0.05% (2012: 0.05%)
832 832
479,066 479,066
MCB Bank Limited is an associated undertaking as per the Companies Ordinance, 1984, however,
for the purpose of measurement, this has been classified as available for sale and measured at fair
value as the Parent Company does not have significant influence over this Company.
2013 2012
23.2 At fair value through profit or loss
Habib Bank Limited - Quoted
Market value - Rs 0.023 million (2012: 0.020 million) 23 20
23 20
24. Advances, deposits, prepayments and other receivables
Current portion of loans to employees - considered good 1,145 1,366
Current portion of long term receivable from related party 17,206 17,206
Advances - considered good
- To employees - note 24.1 4,374 3,179
- To suppliers 144,435 71,871
148,809 75,050
Due from related parties - note 24.2 18,240 13,473
Prepayments 5,712 2,959
Mark-up receivable from related party - note 24.3 560 702
Profit receivable on bank deposits - 1,286
Letters of credit - margins, deposits, opening charges, etc 13,201 2,361
Claims recoverable from government
- Sales tax - note 24.4 129,805 87,806
- Excise duty 17,243 17,243
- Export rebate 65,342 68,831
212,390 173,880
Other receivables 1,075 13,284
418,338 301,567
134

24.1 Included in advances to employees are amounts due from executives of Rs 1,993 thousand (2012:
Rs 1,483 thousand).
2013 2012
24.2 Due from related parties - unsecured
Nishat Developers (Private) Limited 733 -
18,240 13,473
24.3 This represents mark-up receivable from Sui Northern Gas Pipelines Limited against the loan as
referred to in note 19.1.
24.4 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.
2013 2012
25. Derivative financial instrument
Cross currency interest rate swap - note 25.1 1,837 -
25.1 During the year, the Parent Company has entered into a derivative cross currency interest rate swap
with a commercial bank. Under the terms of cross currency swap arrangement, the Parent Company
pays Karachi Inter-Bank Offered Rate (KIBOR) minus bank spread to the arranging bank on the notional
PKR amount for the purposes of the cross currency swap, and receives London Inter-Bank Offered Rate
(LIBOR) on the notional USD amount from the arranging bank. There have been no transfers of liabilities
under the arrangements, only the nature of the interest payment has changed. The derivative cross
currency swap outstanding as at June 30, 2013 has been marked to market and the resulting gain has
been included in the profit and loss account.
2013 2012
26. Cash and bank balances
At banks:
Saving accounts
Local currency - note 26.1 & 26.2 210,249 156,258
Foreign Currency: US$ 1,460,280
(2012: US$ 902,962) 144,276 85,044
Current accounts 144,647 217,857
499,172 459,159
Cash in hand 117 3,234
499,289 462,393
26.1 The balances in saving accounts bear mark-up which ranges from 6% to 10.4% per annum (2012:
0.1% to 10.4% per annum).
26.2 Included in balances at banks on saving accounts are Rs 41.580 million (2012: Rs 36.580 million)
which are under lien to secure bank guarantees referred to in note 13.2.
135

2013 2012
27. Sales
Local sales 23,791,926 21,298,015
Export sales - note 27.1 6,866,192 7,146,523
30,658,118 28,444,538
Less: Sales tax 3,318,352 2,935,458
Excise duty and special excise duty 1,157,255 1,385,540
Commission to stockists and export agents 355,869 277,199
4,831,476 4,598,197
25,826,642 23,846,341
27.1 Export sales include rebate on exports amounting to Rs 35.127 million (2012: Rs 38.378 million).
2013 2012
28. Cost of sales
Raw and packing materials consumed 2,716,708 2,612,445
Salaries, wages and other benefits - note 28.1 1,143,200 962,566
Electricity and gas 2,278,889 2,122,656
Furnace oil and coal 6,990,819 7,262,708
Stores and spares consumed 1,681,971 1,388,716
Insurance 65,205 63,257
Depreciation on property, plant and equipment - note 16.1.2 1,515,944 1,468,832
Lease rentals - Ijara financing 16,008 15,924
Royalty 153,526 147,132
Excise duty 17,270 13,715
Legal and professional charges 2,802 2,084
Estate development 14,615 19,822
Freight charges 10,084 6,500
17,024,820 16,427,552
Opening work-in-process - note 21 322,049 169,612
Closing work-in-process - note 21 (856,587) (322,049)
(534,538) (152,437)
Cost of goods manufactured 16,490,282 16,275,115
Opening stock of finished goods - note 21 300,619 288,079
Closing stock of finished goods - note 21 (368,948) (300,619)
(68,329) (12,540)
Less: Own consumption 20,690 26,558
16,401,263 16,236,017
28.1 Salaries, wages and other benefits include Rs 29.133 million (2012: Rs 25.203 million), Rs 37.390 million
(2012: Rs 30.252 million) and Rs 21.826 million (2012: Rs 19.518 million) respectively, in respect of provident
fund contribution by the Group, provision for gratuity and staff compensated absences.
136

2013 2012
Salaries, wages and other benefits include the following
in respect of retirement benefits:
Gratuity
Actuarial loss - 1,658
37,390 30,252
Leave Encashment
21,826 19,518
29. Administrative expenses
Legal and professional services - note 29.2 21,686 17,143
Rent, rates and taxes 5,483 224
Entertainment 2,173 2,373
School expenses 18,574 18,888
Fee and subscription 15,149 11,549
410,957 273,884
contribution by the Group, provision for gratuity and staff compensated absences.
2013 2012
Salaries, wages and other benefits include the following in
respect of retirement benefits:
Gratuity
Expected return on plan assets (1) -
9,133 7,365
Leave Encashment
5,335 4,763
137

2013 2012
29.2 Legal and professional charges
Legal and professional charges include the following
in respect of auditors' services for:
Statutory audit - Parent Company 1,650 1,500
Half-yearly review 450 400
Certification and sundry services 100 100
KPMG Taseer Hadi & Co.
Statutory audit - Subsidiary Company 440 400
2,740 2,500
30. Selling and distribution expenses
Repairs and maintenance 1,487 819
Legal and professional charges - 695
Entertainment 659 852
Advertisement and sales promotion 5,162 7,349
Freight and handling charges 1,637,289 2,109,247
Debtors written off 5,010 -
1,763,924 2,218,815
2013 2012
Gratuity
4,374 3,526
Leave Encashment
Interest cost for the year 798 627
2,554 2,280
138

2013 2012
31. Other operating expenses
Workers' profit participation fund 373,466 213,288
Donations - note 31.1 3,741 1,700
Realized loss on derivative financial instrument 22,132 -
Exchange loss 154,102 305,113
553,441 520,101
31.1 None of the directors and their spouses had any interest
in any of the donees.
32. Other income
Income from financial assets
Income on bank deposits 8,120 7,430
Fair value gain on investment 4 2
Interest on loans to employees 5 24
Mark-up on loan / advances to related parties 1,481 1,783
Unrealized gain on derivative financial instruments 1,837 5,467
Dividend income from:
- Others 53 30
1,295,634 1,058,708
1,307,081 1,073,414
Income from non-financial assets
Gain on disposal of property, plant and equipment - note 16.1.4 11,547 16,040
Scrap sales 113,655 29,138
Provisions and unclaimed balances written back 2,297 28,684
Others 25 149
127,524 74,011
1,434,605 1,147,425
32.1 Dividend income from related parties
MCB Bank Limited 1,170,695 945,162
Adamjee Insurance Company Limited 8,853 3,541
Nishat Chunian Limited 10,020 10,020
1,295,581 1,058,678
33. Finance costs
Interest and mark-up on:
- Short term borrowings - secured 673,854 1,051,239
- Workers' profit participation fund 2,131 2,321
Guarantee commission 11,336 15,020
Bank charges 35,217 38,939
1,105,707 1,782,871
34. Taxation
Current
- For the year 9,244 118,954
- Prior 92,734 (114,571)
101,978 4,383
Deferred
- For the year 1,530,444 (128,136)
1,632,422 (123,753)
34.1 Provision for taxation
The provision for current taxation represents minimum tax under section 113 of the Income Tax
Ordinance, 2001 at the rate of 0.5% (2012: 1%) of turnover from local sales. In addition to this,
it includes tax on exports and rental income which is full and final discharge of the Group's
tax liability in respect of income arising from such source.
139

For purposes of current taxation, the tax losses available for carry forward as at June 30, 2013 are
estimated approximately at Rs 5,712.576 million (2012: Rs 9,111.482 million).
2013 2012
% %
34.2 Tax charge reconciliation
Numerical reconciliation between the average effective
tax rate and the applicable tax rate
Applicable tax rate 35.00 35.00
Tax effect of amounts that are:
- Not deductible for tax purposes 0.13 0.19
- Chargeable to tax at different rates (4.57) (9.35)
Effect of change in prior years' tax 0.01 (24.71)
Effect of change in tax rate 0.71 -
Tax credits and losses in respect of which no deferred
tax asset has been recognised (3.72) 1.20
Tax effect under presumptive tax regime and others (4.32) (4.06)
Rounding and others -0.01 (1.39)
(11.77) (38.12)
Average effective tax rate charged to consolidated
profit and loss account 23.23 (3.12)
35. Earnings per share
2013 2012
35.1 Earnings per share - Basic
Profit for the year - attributable to equity holders
of the Parent Company Rupees 5,447,849,000 4,096,975,000
Weighted average number of ordinary shares Number 438,119,118 438,119,118
Earnings per share - basic Rupees 12.43 9.35
35.2 Earnings per share - Diluted
There is no dilution effect on the basic earnings per share as the Group has no such commitments.
2013 2012
36. Cash generated from operations
Profit before tax 7,025,955 3,962,078
Adjustments for:
- Depreciation on property, plant and equipment 1,618,213 1,487,399
- Amortisation on intangible assets 18,452 18,452
- Gain on disposal of property, plant and equipment (11,547) (16,040)
- Gain on derivative financial instruments (1,837) (5,467)
- Dividend income (1,295,634) (1,058,708)
- Mark-up income (1,481) (1,783)
- Fair value gain on revaluation of investment (4) (2)
- Provision for retirement benefits 80,783 67,883
- Exchange loss 154,102 305,113
- Finance costs 1,105,707 1,782,871
Profit before working capital changes 1,666,754 2,579,718
Effect on cash flow due to working capital changes
- Decrease / (increase) in stores, spares and loose tools 10,936 (593,523)
- Increase in stock-in-trade (622,880) (83,770)
- Decrease in trade debts 4,708 180,366
- Increase in advances, deposits, prepayments and other receivables (116,913) (41,864)
- Increase in trade and other payables 232,965 188,385
(491,184) (350,406)
8,201,525 6,191,390
140

141
2013 2012
37. Cash and cash equivalents
Cash and bank balances - note 26 499,289 462,393
Short term borrowings - secured - note 14 (6,388,501) (7,559,348)
(5,889,212) (7,096,955)
38. Remuneration of Chief Executive, Directors and Executives
38.1 The aggregate amount charged in the consolidated financial statements for the year for remuneration,
including certain benefits, to the Chief Executive, full time working Directors and Executives of the
Group are as follows:
Chief Executive Directors Executives
2013 2012 2013 2012 2013 2012
Managerial remuneration 12,240 8,621 24,451 20,869 207,006 170,867
Contributions to provident
and gratuity fund - - 4,340 3,690 33,761 26,170
Housing 270 270 1,413 1,398 78,921 62,400
Utilities - - - - 16,511 13,494
Leave passage - - 1,477 818 - 4,461
Medical expenses 383 169 408 171 - 5,764
Others 7,890 5,477 3,674 3,593 283 43,847
20,783 14,537 35,763 30,539 336,482 327,003
Number of persons 1 1 4 4 187 154
The Group also provides the chief executive and some of the directors and executives with Group
maintained cars, travelling and utilities.
The Group does not provide any remuneration and benefits to non-executive directors of the Group.
38.2 Remuneration to other directors
Aggregate amount charged in the consolidated financial statements for the year for fee to 5 directors
(2012: 5 directors) is Rs Nil (2012: Rs Nil).
39. Transactions with related parties
The related parties comprise associated companies, other related companies, directors, key management
personnel and post employment benefit plans. 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, dividend income is disclosed in note 32.1, expense charged in respect of staff retirement
benefit plans is disclosed in note 9, amounts due from directors and key management personnel are shown
under receivables and remuneration of directors and key management personnel is disclosed in note 38.
Other significant transactions with related parties are as follows:
2013 2012
Relationship with the Group Nature of transactions
i. Related parties Sale of goods 170,603 100,571
Purchase of asset 381,351 1,700
Insurance premium 64,192 94,475
Purchase of services 1,346,020 1,033,558
Insurance claims received 12,389 4,011
Mark-up income on balances
with related parties 5,813 1,782
Dividend income 1,295,581 1,058,678
ii. Post employment benefit Expense charged in respect of
plans retirement benefit plans 80,783 67,883
Transactions with provident
fund account funds paid 114,362 105,707
All transactions with related parties have been carried out on commercial terms and conditions.

142
40 Plant capacity and actual production
Capacity Actual production
2013 2012 2013 2012
Clinker (Metric Tonnes)
Unit I 810,000 810,000 798,167 839,989
Unit II 1,200,000 1,200,000 1,195,047 1,253,632
Unit III 2,010,000 2,010,000 1,930,876 1,680,327
Cement bags (number of bags
in thousand) 120,000 120,000 91,647 87,476
41. Number of employees
2013 2012
Total number of employees as at June 30 1,123 1,116
Average number of employees during the year 1,124 1,111
42. Provident Fund Related Disclosures
Parent Company
The Parent Company operates a provident fund for its employees.
The following information is based on un-audited financial statements of the Fund as at June 30, 2013 and
audited financial statements as at June 30, 2012.
2013 2012
(iii) Fair value of investments - note 42.1 807,907 575,132
(iv) Percentage of investments made 89.22% 88.27%
2013 2012
(Rs. In ‘000) ----%--- (Rs. In ’000) ----%----
Break up of investments - at fair value
Special accounts in a scheduled bank 136,885 16.95% 127,909 22.24%
Term finance certificates - listed 37,271 4.61% 26,601 4.63%
Term finance certificates - unlisted 10,422 1.29% 10,336 1.80%
Government securities 180,083 22.29% 144,616 25.14%
- Mutual funds - open ended - listed 66,205 8.19% 45,393 7.89%
- Mutual funds - open ended - unlisted (NIT) 24,460 3.03% 15,484 2.69%
Mutual funds - closed ended - listed 11,070 1.37% 7,083 1.23%
Ordinary shares of listed companies 303,881 37.61% 191,640 33.32%
Modaraba certificates - listed 4,508 0.56% 1,896 0.33%
Redeemable capital - listed 21 0.00% 1,836 0.32%
Redeemable capital - unlisted 26,636 3.30% 2,338 0.41%
Debt securities - listed 6,465 0.80% - 0.00%
807,907 100.00% 575,132 100.00%
The investments of the provident fund have been made in accordance with the provisions of Section
227 of the Companies Ordinance, 1984 and the rules formulated for this purpose except for:
- investments in unlisted securites
- investments in listed securities in excess of 30% of provident fund
The management is taking steps to dispose off such investments

Subsidiary Company
The Subsidiary Company operates a provident fund for its employees.
The following information is based on un-audited financial statements of the Fund as at June 30, 2013
and audited financial statements as at June 30, 2012.
2013 2012
(iii) Percentage of investments made 90.80% 95.03%
(iv)Fair value of investments 3,317 3,288
2013 2012
(Rs. In ‘000) ----%--- (Rs. In ’000) ----%----
Break up of investments - at fair value
Special accounts in a scheduled bank 958 29% 625 19.01%
Term deposit receipts 2,359 71% 2,663 80.99%
3,317 100% 3,288 100.00%
Investments out of the Provident Fund have been made in accordance with the provisions of section
227 of the Ordinance and the rules formulated for this purpose.
43. Financial risk management
43.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair
value interest rate risk, cash flow interest rate risk and 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. The Group uses derivative
financial instruments to hedge certain risk exposures.
Risk management is carried out by the Group's 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:
(a) Market risk
(i) Currency risk
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 future commercial
transactions or 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) and Euro. Currently, the Group’s foreign exchange risk exposure is
restricted to bank balances and amounts receivable from / payable to the foreign entities.
143

2013 2012
Cash and bank balances - USD 1,460 903
Receivable against sales to foreign parties - USD 2,207 2,066
Long term loan - USD (18,653) (29,081)
Advance received against sale - USD (1,299) (1,077)
Finances under mark-up arrangements - USD - (810)
Mark-up payable - USD - (0.975)
Trade and other payables - USD (527) (231)
Net exposure - USD (16,812) (28,231)
Trade and other payables - Euro (1,282) (6)
Net exposure - Euro (1,282) (6)
At June 30, 2013, if the Rupee had weakened / strengthened by 10% against the US dollar with all other
million) lower / higher, mainly as a result of foreign exchange losses / gains on translation of US
dollar-denominated financial assets and liabilities.
At June 30, 2013, if the Rupee had weakened / strengthened by 10% against the Euro with all other
million) lower / higher, mainly as a result of foreign exchange losses / gains on translation of
Euro-denominated financial assets and liabilities.
(ii) Price risk
The Group is exposed to equity securities price risk because of investments held by the Group and
classified as available for sale and fair value through profit or loss. 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 investments in equity of other entities that are publicly traded are included in all of the
following three stock exchanges; Karachi Stock Exchange, Lahore Stock Exchange and Islamabad
Stock Exchange.
The table below summarises the impact of increases / decreases of the KSE-100 index on the Group’s
post-tax profit 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.
Impact on post-tax profit Impact on other components of equity
2013 2012 2013 2012
Karachi Stock Exchange - - 260,100 157,874
Post-tax profit for the year would increase / decrease as a result of gains / losses on equity securities
classified as at fair value through profit or loss, this impact is considered to be immaterial. Other
components of equity would increase / decrease as a result of gains / losses on equity securities
classified as available for sale.
(iii) Interest rate risk
As the Group has no significant floating interest rate assets, the Group’s income is substantially
independent of changes in market interest rates.
The Group's interest rate risk arises from short term and long-term borrowings. These borrowings issued
at variable rates expose the Group to cash flow interest rate risk.
144

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 consolidated profit and loss of a defined
interest rate shift. The scenarios are run only for liabilities that represent the major interest-bearing
positions.
At June 30, 2013, if interest rates on floating rate borrowings had been 1% higher / lower with all other
million) lower / higher, mainly as a result of higher / lower interest expense on floating rate borrowings.
(b) Credit risk
Credit risk represents the risk of financial loss being caused if counter party fails to discharge an
obligation.
Credit risk of the Group arises from cash and cash equivalents, derivative financial instruments and
deposits with banks and financial institutions, as well as credit exposures to distributors and wholesale
and retail 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. The utilisation of credit limits is regularly monitored and major sales to retail
customers are settled in cash. For banks and financial institutions, only independently rated parties
with a strong credit rating are accepted.
(i) Exposure to credit risk
The Group monitors the credit quality of its financial assets with reference to historical performance of
such assets and available external credit ratings. The carrying values of financial assets exposed to
credit risk and which are neither past due nor impaired are as under:
2013 2012
Long term loans, advances and deposits 96,441 138,748
Trade debts - unsecured 88,808 123,699
Advances, deposits, prepayments 38,226 47,317
Balances with banks 499,172 459,159
722,647 768,923
The ageing analysis of trade receivables - unsecured
is as follows:
Up to 90 days 64,858 45,678
90 to 180 days 2,954 16,097
181 to 365 days 8,075 6,482
Above 365 days 12,92 55,442
88,808 123,699
The management estimates the recoverability of trade receivables on the basis of financial position
and past history of its customers based on the objective evidence that it shall not receive the amount
due from the particular customer. The provision is written off by the Group when it expects that it cannot
recover the balance due. Any subsequent repayments in relation to amount written off, are credited
directly to consolidated profit and loss account.
(ii) Credit quality of financial assets
The credit quality of financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (if available) or to historical information about counterparty
default rate
145

Rating Rating
Short term Long term Agency 2013 2012
Allied Bank Limited A1+ AA+ PACRA 378 -
Askari Bank Limited A1+ AA PACRA 27,468 32,942
Bank Alfalah Limited A1+ AA PACRA 147,244 85,044
Bank Islami
Pakistan Limited A1 A PACRA 313 1,499
Bank of Punjab A1+ AA- PACRA 228 10,022
Barclay's Bank
PLC Pakistan A-1 A S&P 6,751 9,157
Citibank N.A. P-2 A3 Moody's 44 96
Dubai Islamic Bank
Pakistan Limited A-1 A JCR-VIS 1,844 1,079
Faysal Bank Limited A1+ AA PACRA 183 47,499
Habib Bank Limited A-1+ AAA JCR-VIS 13,720 -
HSBC Bank Middle
East Limited P-1 A2 Moody's 24 40
MCB Bank Limited A1+ AAA PACRA 251,592 251,788
Meezan Bank Limited A-1+ AA JCR-VIS 1,107 160
National Bank of Pakistan A-1+ AAA JCR-VIS 1,125 1,442
NIB Bank Limited A1+ AA- PACRA 14,671 14,924
Silk Bank Limited A-2 A- JCR-VIS 155 376
Standard Chartered Bank
(Pakistan) Limited A1+ AAA PACRA 410 2,852
United Bank Limited A-1+ AA+ JCR-VIS 31,669 239
Soneri Bank Limited A1+ AA- PACRA 246 -
499,172 459,159
(c) Liquidity risk
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.
Management monitors the forecasts of the Group’s cash and cash equivalents (note 37) on the basis
of expected cash flows. 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 balance
sheet liquidity ratios against internal and external regulatory requirements and maintaining debt
financing plans.
The table below analyses the Group’s financial liabilities and net-settled derivative financial liabilities
into relevant maturity groupings based on the remaining period at the balance sheet to the contractual
maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows as the
impact of discounting is not significant.
146

13,074,527 9,956,590 1,069,715 2,048,222
16,322,985 11,673,902 1,376,225 3,272,858
43.2 Capital risk management
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 total debt divided by total
capital employed. Total debt represent long term and short-term finances obtained by the Group.
Total capital employed includes equity as shown in the consolidated balance sheet plus total debt.
The Group’s strategy, which was unchanged from last year, was to maintain a gearing ratio of 60%
debt and 40% equity. The gearing ratio as at June 30, 2013 and June 30, 2012 is as follows:
2013 2012
Total debt 10,966,342 14,445,199
Total equity 48,032,985 33,019,718
Total capital employed 58,999,327 47,464,917
Gearing ratio 19% 30%
43.3 Fair value estimation
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).
147

The following table presents the Company's assets and liabilities that are measured at fair value:
As at June 30, 2013
Assets
Investment - At fair value
through profit or loss 23 - - 23
Derivative financial instruments - 1,837 - 1,837
Total assets 26,309,972 1,837 - 26,311,809
Liabilities - - - -
Total liabilities - - - -
As at June 30, 2012
Assets
Investment - At fair value
through profit or loss 20 - - 20
15,787,387 - - 15,787,387
Liabilities - - - -
Total liabilities - - - -
43.4 Financial instruments by categories
At fair value
or loss sale receivable Total
As at June 30, 2013
Derivative financial instrument 1,837 - - 1,837
Loans, advances, deposits and
other receivables - - 38,226 38,226
Investments 23 26,309,949 - 26,309,972
1,860 26,309,949 633,956 26,945,765
At fair value
As at June 30, 2012
Loans, advances, deposits and
other receivables - - 47,317 47,317
Investments 20 15,787,367 - 15,787,387
20 15,787,367 648,458 16,435,845
148

Financial liabilities at amortized
cost
2013 2012
Liabilities as per balance sheet
Long term finance-secured 4,577,841 6,885,851
Accrued mark up 145,940 178,652
Trade and other payables 1,368,552 1,386,220
6,092,333 8,450,723
44. Operating Segments
Segment information is presented in respect of the Group's business. The primary format, business segment,
is based on the Group's management reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one year.
The Group's operations comprise of the following main business segment types:
Type of segments Nature of business
Cement Production and sale of clinker, ordinary portland and
sulphate resistant cements
Paper Manufacture and supply of paper products and
packing material
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 Companies Ordinance, 1984.
44.1 Segment analysis and reconciliation
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.
149

2013 2012 2013 2012 2013 2012 2013 2012
Rupees in thousands
Revenue from
- External customers 24,915,924 22,949,853 910,718 896,488 - - 25,826,642 23,846,341
- Inter group - - 938,022 848,924 (938,022) (848,924) - -
24,915,924 22,949,853 1,848,740 1,745,259 (938,022) (848,924) 25,826,642 23,846,341
Segment gross profit 9,326,007 7,506,755 116,929 79,871 (17,557) 23,698 9,425,379 7,610,324
Segment expenses (2,701,559) (2,971,441) (18,125) (25,214) (8,638) (16,145) (2,728,322) (3,012,800)
Impairment on
investments - - - - - - - -
Other income 1,466,289 1,187,936 4,488 11,587 (36,172) (52,098) 1,434,605 1,147,425
Financial charges (994,879) (1,670,784) (154,820) (179,570) 43,992 67,483 (1,105,707) (1,782,871)
Taxation (1,593,689) 55,652 (38,733) 68,101 - - (1,632,422) 123,753
Profit after taxation 5,502,169 4,108,118 (90,261) (45,225) (18,375) 22,938 5,393,533 4,085,831
Segment net assets 47,998,214 32,930,632 281,102 371,362 29,618 47,989 48,308,934 33,349,983
Segment liabilities 15,528,505 17,754,566 1,648,907 1,403,509 (265,954) (402,257) 16,911,458 18,755,818
Depreciation and
amortisation 1,596,207 1,466,164 30,382 29,612 10,076 10,075 1,636,665 1,505,851
Net cash generated
from / (used in)
operating activities 6,519,982 4,011,634 (121,619) (223,638) 32,454 73,480 6,430,817 3,861,476
Capital expenditure (3,173,088) (2,751,451) (17,664) (10,042) (158,402) - (3,349,154) (2,761,493)
Net cash used in
investing activities (2,051,176) (1,596,832) (15,855) (4,879) (190,859) 101,520 (2,257,890) (1,500,191)
44.2 Geographical segments
All segments of the Group are managed on nation-wide basis and operate manufacturing facilities
and sales offices in Pakistan only.
45. Date of authorisation for issue
These consolidated financial statements were authorised for issue on September 04, 2013 by the Board of
Directors of the Company.
46. Events after the balance sheet date
The Board of Directors of the parent company have proposed a final dividend for the year ended June 30, 2013
of Rs. 3 (2012: Rs 1.50) per share, amounting to Rs 1,314.357 million (2012: Rs 657.179 million) at their meeting held
on September 04, 2013 for approval of the members at the Annual General Meeting to be held on October 31,
2013. These financial statements do not reflect this appropriation.
47. Corresponding figures
Corresponding figures have been re-arranged and reclassified, wherever necessary, for the purposes of comparison.
However, no significant rearrangement has been made.
Cement paper Elimination - net Total
150

FORM OF PROXY
Folio No. CDC Participant I.D. No.
CDC Participant’s Name A/C, Sub A/C No.
Shares Held
I/We
of
being a member of D.G. KHAN CEMENT COMPANY LIMITED hereby appoint
or failing him/her
of
who is also a member of the Company, vide Registered Folio No./CDC A/C Sub A/C No.___________________as
my/our proxy to vote for me / us and on my / our behalf at the Annual General Meeting of the Company to be held
on 31st October 2013 at 11:00 a.m. at Registered Office, Nishat House, 53-A, Lawrence Road, Lahore and at any
adjournment thereof.
As witness my/our hand this day of 2013
Signed by the said in the presence
of
Affix Rs. 5/-
Revenue Stamp which must be
cancelled either by signature
over it or by some other means
Place
Date
(Witness’s Signature)
(Member’s Signature)
Member’s CNIC No.
Witness’s CNIC No.
IMPORTANT
Proxies, in order to be effective, must be received at the
Company’s registered Office not less than forty eight hours
before the time for holding the meeting and must be stamped,
signed and witnessed. Proxies of the members through CDC
shall be accompanied with attested copies of thier CNIC. The
shareholders through CDC are requested to bring their
original CNIC, Sub Account Number and Participant I.D.
Number. to produce at the time of attending the meeting.
Please quote Registered Folio Number/CDC Account Number

Nishat House, 53-A, Lawrence Road, Lahore-Pakistan.
UAN:+92-42-111-11-33-33
D.G. KHAN CEMENT COMPANY LIMITED
VERSATILEPh:+924237121920

Nishat Annual Report 2013

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