2010-11 Annual Report

2011 HlGHLlGHT5
|mprovlng e||lclency ln a dl||lcu|t envlronment

Lxtenslve cost-cuttlng measures and good |eve|s o| buslness ln tbe
emerglng markets
Operatlng marglns exceed tbe prevlous year's |lgures
So|ld demand |or bul|dlng materla|s ln tbe emerglng markets
vo|ume growtb ln A|rlcan and Aslan Markets
Compatlb|e prlces ln tbe domestlc market
Cost pressure |rom energy and raw materla|s welgbed on resu|ts
Dec|lne ln net lncome, but blgber operatlng pro|lts
More lnvestment ln process optlmlzatlon and
a|ternate energy sources
Mission 5tatement
To provlde qua|lty products to customers and exp|ore new
markets to promote/expand sa|es o| tbe Company tbrougb
good governance and |oster a sound and dynamlc team,
so as to acbleve optlmum prlces o| products o| tbe Company
|or sustalnab|e and equltab|e growtb and prosperlty o| tbe
Company.
Vision 5tatement
To trans|orm tbe Company lnto a modern and dynamlc
cement manu|acturlng company wltb qua|l|led pro|esslona|s
and |u||y equlpped to p|ay a meanlng|u| ro|e on sustalnab|e
basls ln tbe economy o| Paklstan.
CONT NT5
Corporate pro|l|e ...........................................................................................3
Notlce o| Annua| Genera| Meetlng.................................................................4
Dlrectors' Peport to tbe Sbarebo|ders...........................................................5
Statement o| va|ue Addltlon ..........................................................................9
Operatlng and Plnancla| Data .......................................................................1O
Pattern o| Sbarebo|dlng................................................................................11
Statement o| Comp|lance wltb tbe
Code o| Corporate Governance ............................................................16
Pevlew Peport to tbe Members on Statement o| Comp|lance
wltb tbe Code o| Corporate Governance .............................................18
Audltors' Peport to tbe Members................................................................19
Plnancla| Statements.....................................................................................2O
Dlrectors' Peport on tbe Conso|ldated Plnancla| Statements ......................64
Audltors' Peport to tbe Members on tbe
Conso|ldated Plnancla| Statements .........................................................65
Conso|ldated Plnancla| Statements...............................................................66
Porm o| Proxy ............................................................................................111
Bankers A||led 8ank Llmlted Hablb Metropo|ltan 8ank Llmlted
Askarl 8ank Llmlted MC8 8ank Llmlted
8ank A||a|ab Llmlted N|8 8ank
8ank |s|aml Paklstan Llmlted Meezan 8ank Llmlted
8arc|ays 8ank P|c Natlona| 8ank o| Paklstan
Cltlbank N.A. Samba 8ank Llmlted
Deutscbe 8ank AG Standard Cbartered 8ank (Paklstan)
Dubal |s|amlc 8ank Llmlted
Paysa| 8ank Llmlted Sl|k 8ank Llmlted
Plrst Women 8ank Llmlted Tbe 8ank o| Punjab
Hablb 8ank Llmlted Unlted 8ank Llmlted
HS8C
CORPORAT PROFlL
xterna| Auditors KPMG Taseer Hadl & Co, Cbartered Accountants
Cost Auditors Avals Hyder Llaquat Nauman, Cbartered Accountants
Lega| Advisors Mr. Sbabld Hamld, 8ar-at-Law
Registered Office Nlsbat House, 53-A, Lawrence Poad,
Labore-Paklstan
Pbone: 92-42-36367812-2O UAN: 111 11 33 33
Pax: 92-42-36367414
Lmal|: ln|o@dgcement.com
web slte: www.dgcement.com
Factory 1. Kbo||l Sattal, Dlstt. Dera Gbazl Kban-Paklstan
Pbone: 92-641-46OO25-7
Pax: 92-641-462392
Lmal|: dgslte@dgcement.com
2. 12, K.M. Cboa Saldan Sbab Poad,
Kbalrpur, Tebsl| Ka||ar Kabar,
Dlstt. Cbakwa|-Paklstan
Pbone: 92-543-65O215-8
Pax: 92-543-65O231
Board of Directors Mrs. Naz Mansba Cbalrperson
Mlan Paza Mansba Cble| Lxecutlve
Mr. Kba|ld Qadeer Quresbl
Mr. Zaka-ud-Dln
Mr. Parld Noor A|l Paza|
Mr. |nayat U||ab Nlazl Cble| Plnancla| O||lcer
Ms. Nablba Sbabnawaz Cbeema
Audit Committee Mr. Kba|ld Qadeer Quresbl Member/Cbalrman
Mr. Parld Noor A|l Paza| Member
Ms. Nablba Sbabnawaz Cbeema Member
Company 5ecretary Mr. Kba|ld Mabmood Cboban
03 2011 ANNUAL REPORT
D.G. Khan Cement Company Limited
Notlce ls bereby glven tbat Annua| Genera| Meetlng o| tbe Sbarebo|ders o| D. G. Kban Cement Company Llmlted ("tbe
Company") wl|| be be|d on October 31, 2O11 (Monday) at O3:3O p. m. at Peglstered O||lce, Nlsbat House, 53-A, Lawrence
Poad, Labore to transact tbe |o||owlng ordlnary buslness:
1. To recelve and adopt tbe Audlted Separate Plnancla| Statements and Conso|ldated Plnancla| Statements o| tbe Company
|or tbe year ended [une 3O, 2O11 togetber wltb tbe Dlrectors' and Audltors' reports tbereon.
2. To appolnt statutory Audltors |or tbe year endlng [une 3O, 2O12 and |lx tbelr remuneratlon.
By order of the Board
LAHOPL ( KHAL|D MAHMOOD CHOHAN )
SLPTLM8LP O7, 2O11 COMPANY SLCPLTAPY
NOTlC OF ANNUAL GNRAL MTlNG
NOT5:
BOOK CLO5UR NOTlC:-
1. Tbe Sbare Trans|er 8ooks o| tbe Company wl|| remaln c|osed |or attendlng o| Annua| Genera| Meetlng |rom 24-1O-2O11
to 31-1O-2O11 (botb days lnc|uslve). Pbyslca| trans|ers / CDS Transactlons |Ds recelved ln order at Peglstered
O||lce, Nlsbat House, 53-A, Lawrence Poad, Labore, up to 1:OO p.m. on 22-1O-2O11 wl|| be consldered ln tlme.
2. A member e|lglb|e to attend and vote at tbls meetlng may appolnt anotber member bls / ber proxy to attend and vote
lnstead o| blm/ber. Proxles ln order to be e||ectlve must reacb tbe Company's Peglstered o||lce not |ess tban 48 bours
be|ore tbe tlme |or bo|dlng tbe meetlng. Proxles o| tbe Members tbrougb CDC sba|| be accompanled wltb attested coples
o| tbelr CN|C. |n case o| corporate entlty, tbe 8oard's Peso|utlon/power o| attorney wltb speclmen slgnature sba|| be
|urnlsbed a|ong wltb proxy |orm to tbe Company. Tbe sbarebo|der tbrougb CDC are requested to brlng orlglna| CN|C,
Account Number and Partlclpant Account Number to produce at tbe tlme o| attendlng tbe meetlng.
3. Sbarebo|ders are requested to lmmedlate|y notl|y tbe cbange ln address, l| any.
4. Members wbo bave not yet submltted pbotocoples o| tbelr CN|C to tbe Company are requested to send tbem at tbe
ear|lest
DlRCTOR5' RPORT
Tbe board o| dlrectors ls p|eased to submlt lts report a|ong wltb tbe
|l nancl a| statements |or tbe year ended 3O [une 2O11.
Business Out|ook
Domestic economic framework and company's performance
Tbe expectatlons o| economlc recovery ln tbe |lsca| year 2O11 never
trans|ated lnto rea|lty. Tbe GDP target o| 4.5% never seemed
acblevab|e. A|| tbe e||orts o| puttlng tbe economy back on track were
tbwarted by tbe worst ever ||oods strlklng tbe country nortb to
soutb. Structura| lmba|ance ln tbe economy coup|ed wltb perennla|
socla| and energy prob|ems never a||owed tbe economy to get past
tbe breaklng polnt. Tbe country ls on tbe brlnk o| lnterna| securlty
crlsls and ls |aclng severe lnternatlona| pressure on lmprovlng lts
securlty sltuatlon tbat ls keeplng |orelgn lnvestments away |rom lt.
Tbe buslnesses are not gettlng tbe con|ldence and trust requlred |or
growtb and lnvestment. |n tbe constructlon sector, apart |rom a |ew
stlmu|l |rom Governmenta| bul|dlng and ln|rastructura| deve|opment
projects, tbere was |ltt|e slgn o| sustalned recovery. Tbe s|lgbt lncrease
ln vo|umes ln tbe nortb o| tbe country was not su||lclent to make up
|or weaker sa|es ln tbe soutb. Tbe genera| stagnatlon was re||ected
ln tbe sa|es vo|ume o| tbe company, wblcb s|ld down ln comparlson
to tbe prevlous year's |lgure. Tbls was due to |ack o| demand and
be|ow mark constructlon actlvlty ln tbe rura| areas o| tbe country.
Heavy ||oods ln tbe past bave dampened tbe economlc stabl|lty o|
tbe poverty strlcken rura| areas o| tbe country. Tbe pub|lc deve|opment
projects ln sucb areas are a|so not generatlng tbe antlclpated demand
o| cement at tbe moment. Demand ln resldentla| constructlon and
tbe ln|rastructure sector weakened overa|| due to a comblnatlon o|
rlslng lnterest rates, blgb ln||atlon and transportatlon prob|ems. |n
genera|, tbe per|ormance o| tbe wbo|e lndustry was be|ow par.
lnternationa| Business nvironment and xports
Durlng 2O11, at |ast, tbere were posltlve |lnancla| slgns |rom tbe
lndustrla| sectors ln tbe deve|oped countrles. Tbe cement demand
ln sucb markets bowever, remalned somewbat subdued. Lconomlc
crlsls took lts to|| wltb key lndustry p|ayers de-commlsslonlng or
sca|lng down tbelr productlon capacltles ln vlew o| extreme|y
depressed market sltuatlons. Post 2O11, bowever, tbe materla|
demands bave started to rlse and so bas tbe productlon. Tbls bowever,
resu|ted ln oversupp|y sltuatlon ln some reglons. Mldd|e Last, ln
partlcu|ar, |aced an oversupp|y sltuatlon wbl|e tbere was mlxed
demand ln Nortbern A|rlcan reglon due to po|ltlca| unrest and clvl|
war sltuatlon ln a|most a|| o| tbe constltuent states. Demand |or bul|dlng
materla|s, bowever, |o||owed a posltlve deve|opment ln many markets ln
tbe emerglng countrles, wltb Asla ln partlcu|ar contlnulng to grow.
Cement exports |rom Paklstan saw mlxed trend tbrougbout 2O11.
On aggregate, export vo|umes |e|| by 12% compared wltb |ast year
|lgures, part|y due to better retentlon prlces ln domestlc market
wbere demand saw an lncrease |ue|ed, to some extent, by rebul|dlng
|o||owlng tbe devastatlng ||oods.
Continued market expansion in Africa: Desplte po|ltlca| turmol|
ln tbe A|rlcan natlons, tbe A|rlcan market stl|| proved to be an e||ectlve
growtb market recordlng slgnl|lcant lmprovements. Lxports to A|rlcan
reglon constltuted 42% o| company's tota| exports recordlng a
reglona| growtb o| c|ose to 4 tlmes tban tbe |ast year's |lgures. Djlboutl,
Mozamblque and Tanzanla topped tbe A|rlcan markets wbere export
vo|umes plcked up conslderab|y wbl|e rest o| tbe A|rlcan markets
supported tbe reglona| vo|umes by two|o|d growtb numbers.
Positive demand in Asian region: Soutbeast Aslan reglon ls tbe
malnstay o| tbe company's exports ln tbe Aslan reglon recordlng
slgnl|lcant vo|umetrlc growtb ln cement consumptlon. Near|y a||
Aslan markets enjoyed bea|tby constructlon actlvlty and brlsk demand
|or cement. Demand |or bul|dlng materla|s remalned strong ln |ndla,
but be|ow expectatlons. Nevertbe|ess, tbe company's exports to
|ndla more tban doub|ed durlng tbe year. Desplte ever deterloratlng
geopo|ltlca| sltuatlon o| A|gbanlstan, overa|| demand o| cement grew
steadl|y and tbe company recorded 3O% growtb. Srl Lankan market
conso|ldated |urtber by recordlng twlce as mucb export as compared
to |ast year.
Better cement prices and robust cost management makes up
for fa||ing vo|umes: vo|umes |e|| across a|| segments. |n some cases,
prlces too came under greater pressure ln tbe |lrst ba|| o| 2O11.
Company, nevertbe|ess, generated operatlng pro|lts o| Ps 1.7 bl||lon
on net sa|es o| Ps 18.57 bl||lon, reglsterlng a growtb o| 11% compared
wltb |ast year's |lgures. Tbls was on|y posslb|e because we |etcbed
rlgbt prlces |or our product. Purtbermore, we strong|y pursued our
goa| o| stream|lnlng processes and structures as we|| as |owerlng
costs by systematlca||y lmp|ementlng cost-cuttlng measures. A blgb|y
cautlous approacb was taken toward malntenance lnvestment, on|y
lnvestments ln e||lclency lmprovements tbat wou|d pay o|| very
qulck|y were approved. Tbe lncreaslng lmpact o| tbe cost-cuttlng
measures ls re||ected ln tbe organlc growtb ln operatlng pro|lts: stl||
negatlve ln tbe |lrst ba|| o| 2O11, lt lmproved slgnl|lcant|y ln tbe second
part o| tbe year.
5trong |iquidity, |ower net debt, ba|ance sheet further
strengthened: Amld tbe somewbat unc|ear sltuatlon tbat preval|ed
at tbe start o| 2O1O, a blgb prlorlty was glven to securlng |lquldlty, as
we|| as re|lnanclng. A serles o| caplta| market transactlons and a
caplta| lncrease ralsed Ps 1.4 bl||lon, tbus success|u||y coverlng our
|lnanclng needs. Lncouraglng|y, casb ||ow |rom operatlng actlvltles
remalned posltlve at Ps 34O ml||lon, bowever, compared wltb prevlous
year, lt sbowed a dec|lne due to worklng caplta| restrlctlons (net
worklng caplta| lncreased by Ps 3 bl||lon).
Net |lnancla| debt was reduced by Ps 1.24 bl||lon desplte ongolng
deve|opment projects, tbus |urtber strengtbenlng |lquldlty and tbe
ba|ance sbeet. |n tbe past twe|ve montbs, net |lnancla| debt decreased
by 7.38% |rom Ps 16.81 bl||lon to Ps 15.57 bl||lon.
Prodoct|oo Stot|st|cs Metr|c 7oos
C|lnker Productlon 3,738,4O4 4,684,379 -945,975 -2O
93% 116% - -
Cement Productlon 4,176,733 4,9O8,593 -731,86O -15
C|lnker Sa|es 98,521 71,O42 27,479 39
Cement Sa|es 4,165,635 4,9O8,962 -743,327 -15
2O11
Year ended 3O
[une
2O1O
Year ended 3O
[une
Cbange
Year on Year
%
D. G. Cement reacted swl|t|y ln tbe |lrst ba|| o| 2O11, wben a |a|| ln
demand became apparent due to beavy ||oods ln tbe country ln a
serles o| domestlc markets. Par-reacblng measures were taken ln
tbe cement sector tbrougbout Paklstan. Our p|ants ln botb tbe reglons
remalned motbba||ed |or some perlod.
f|oooc|o| Per[ormooce Ropees |o M||||oo
Sa|es - Net 18,577 1OO.OO 16,275 1OO.OO 2,3O2 14
Cost o| Sa|es -14,192 -76.4O -13,57O -83.38 -622 5
Gross Pro|lt 4,385 23.6O 2,7O5 16.62 1,68O 62
Admln, Se||lng and Dlstrlbutlon expenses -2,682 -14.44 -1,166 -7.16 -1,516 13O
Pro|lt |rom operatlons 1,7O3 9.17 1,539 9.46 164 11
Plnance Cost -2,O52 -11.O5 -1,9O3 -11.69 -149 8
|nvestment |ncome net o|| lmpalrment 832 4.48 766 4.71 66 9
Otber Operatlng |ncome/ Lxpenses (Net) 118 O.64 -44 -O.27 162 -368
Pro|lt 8e|ore Tax 6O1 3.24 358 2.2O 243 68
Taxatlon -43O -2.31 -125 -O.77 -3O5 244
Pro|lt A|ter Tax 171 O.92 233 1.43 -62 -27
% to net
sa|e
Year on
Year
%
Year ended 3O
[une
2011
% to net
sa|e
Year ended 3O
[une
2010 Change
Sa|es deve|opment and |lnancla| resu|ts
Domestlc sa|es vo|umes decreased ln a|| segments compared wltb
2O1O. Conso|ldated cement de|lverles decreased by 15% to 4.1
ml||lon tones. Sblpments o| c|lnker bowever, lncreased by 39% to
98 tbousand tons (bavlng marglna| |lnancla| lmpact). Desplte decrease
ln vo|umes, tbe revenue |lgures contlnued rlslng due to prlce e||ects.
Net sa|es growtb o| 14% was recorded durlng tbe year, tbanks to
compatlb|e cement prlces aval|ab|e tbrougbout tbe domestlc cement
market.
Lxport vo|umes plcked up nlce|y and a|most doub|ed. A|rlcan market
reglon acbleved tbe blggest galn ln tbe cement exports vo|umes. Tbe
vo|ume galns bowever, dld not trans|ate e||ectlve|y lnto net revenue
galns. Due to overwelgblng transportatlon costs net export retentlons
were |ower tban expected. Tbe prlces ln tbe lnternatlona| market
weren't attractlve as we|| and tbe company resorted just to cover
tbe contrlbutlon marglns.
Otber lncome statement |lnes
Dlvldend lncome durlng tbe year lncreased by Ps 185 ml||lon prlmarl|y
due to lssuance o| 1O% 8onus sbares by M/s MC8 8ank Llmlted,
resu|tlng lnto our lncreased entlt|ement o| dlvldend. Tbls, bowever,
cou|d not trans|ate |u||y on tbe lnvestment lncome slnce tbe company
recorded lmpalrment on some o| lts aval|ab|e |or sa|e lnvestments
tbereby s|ldlng down our galns by Ps 119 ml||lon.
Provlslon |or taxatlon durlng tbe perlod lnc|udes de|erred tax provlslon
amountlng to Ps 242 ml||lon (2O1O: Ps 24 ml||lon) arlslng prlmarl|y
due to reductlon ln aval|ab|e tax |osses due to cbange ln tbe export
and |oca| sa|es mlx durlng tbe perlod. Tbe provlslon |or current tax
stood at Ps 188 ml||lon (2O1O: Ps 1O1 ml||lon). Tbe lncrease ln current
tax bas prlmarl|y resu|ted due to lncrease ln mlnlmum tax rate
cbargeab|e on tbe company's |oca| sa|es.
5,OOO
4,OOO
3,OOO
2,OOO
1,OOO
-
Cement So|d Cement Produced C|lnker Produced
2OO7
2OO8
2OO9
2O1O
2O11
2O,OOO
15,OOO
1O,OOO
5,OOO
-
2OO7 2OO8 2OO9 2O1O 2O11
Net Sa|es Cost o| Sa|es
Plgures ln ml||lons o| Pupees Plgures ln tbousands o| MT
Financia| Management
Cash F|ow Management: Tbe Company bas an e||ectlve casb ||ow
management system ln p|ace wbereby casb ln||ows and out||ows are
projected on regu|ar basls. Worklng caplta| requlrements are p|anned
to be |lnanced tbrougb e||lclent management o| trade recelvab|e,
payab|es and lnventory |eve|s. 8uslness unlt managers are asslgned
worklng caplta| targets wblcb are belng regu|ar|y monltored. Tbe
8oard ls satls|led tbat tbere are no sbort or |ong term |lnancla|
constralnts lnc|udlng access to credlt and a strong ba|ance sbeet.
Risk Mitigation
Credit Risk: A|| |lnancla| assets o| tbe Company, except casb ln band,
are subject to credlt rlsk. Tbe Company be|leves tbat lt ls not exposed
to major concentratlon o| credlt rlsk. Lxposure ls managed tbrougb
revlews o| credlt wortblness, re|erences, estab|lsbment o| purcbase
|lmlts taklng lnto account tbe customer's |lnancla| posltlon, past
experlence and otber buslness |actors. Aval|ab|e |or sa|e lnvestments
are p|aced wltb companles o| good standlngs wbereas otber recelvab|es
are kept secured.
Liquidity Risk: Prudent |lquldlty rlsk management ensures aval|abl|lty
o| su||lclent |unds |or meetlng contractua| commltments. Tbe
Company's |und management strategy alms at managlng |lquldlty rlsk
tbrougb lnterna| casb generatlon and commltted credlt |lnes wltb
|lnancla| lnstltutlons.
Foreign xchange Risk: Porelgn currency rlsk arlses maln|y wbere
recelvab|es and payab|es exlst due to transactlons ln |orelgn currencles.
Tbe Company ls maln|y exposed to sbort term USD/PKP parlty on
lts lmport o| raw materla|s wbereas, lt ls exposed to LUP/PKP parlty
on lmport o| varlous ltems o| p|ant and macblnery.
Capita| Management
Tbe Company's po|lcy ls to malntaln a strong caplta| base so as to
bul|d lnvestor, credltor and market con|ldence and to sustaln |uture
deve|opment o| tbe buslness. Tbere were no cbanges to tbe
Company's approacb to caplta| management durlng tbe year and tbe
Company ls not subject to externa||y lmposed caplta| requlrements.
Future Out|ook
Desplte g|oba| po|ltlca| and economlc turmol| ln tbe recent past, tbe
management |oresees posltlve growtb trends. Tbe g|oba| economlc
lndlcators are sendlng o|| posltlve slgna|s due to strong monetary
and |lsca| measures taken by major Luropean natlons. Demands are
|lke|y to rlse ln A|rlcan as we|| as Aslan reglons due to blgber
governmenta| spendlng on deve|opment projects and antlclpated
po|ltlca| ca|m ln tbe A|rlcan reglon. Tbe company bas recent|y secured
anotber slzeab|e export contract |or an Last A|rlcan natlon. Tbls
vo|umetrlc growtb ls expected to materla|lze lnto beavy bottom |lne
galns ln tbe lncome statement, bowever, tbe rlsks assoclated wltb
blgber energy and transportatlons costs are stl|| boverlng slnce tbe
petro|eum and assoclated energy commodltles prlces may bump up
unexpected|y ln tbe |uture.
On domestlc |ront, glven tbe country's GDP growtb expectatlons
put at 4.2% and tbe budget p|anned |or Pub|lc Sector Deve|opment
Program (PSDP) at Ps 73O bl||lon tbe management |oresees very
encouraglng |eve|s o| domestlc demand. Wltb sa|es |or tbe |lrst
quarter 2O12 a|ready plcklng up vo|umes, (sourced |rom [u|y and
August 2O11 domestlc cement sa|es data), we are a|ready set |or tbe
year 2O12 on strong |ootlng.
On expense slde, tbe management posltlve|y |oresees opportunltles
ln cost reductlon by cuttlng back tbe consumptlon o| lmported energy
materla|s and accordlng|y, ls vlgorous|y expandlng lts a|ternatlve |ue|
consumptlon po|lcy. Purtbermore, process optlmlzatlon po|lcy ls a|so
underway.
Project news
Waste Heat Recovery Projects: As exp|alned to our sbare bo|ders
ln tbe |ast quarter|y report, tbe project |or lnsta||atlon o| Waste Heat
Pecovery p|ant at Kbalrpur P|ant slte ls current|y ln progress and we
bave recelved |lrst sblpment |rom tbe supp|ler (tbe sblpments are
expected to be |u||y recelved by tbe end o| tbls ca|endar year). Tbe
project ls runnlng as scbedu|ed wltb two deslgn con|erences a|ready
be|d wltb tbe supp|lers.
RDF Projects: Wltb tbe tecbnlca| asslstance and co||aboratlon o|
wor|d renowned manu|acturer o| advanced, lndustrla| sbredders and
assoclated systems tecbno|ogy, M/s vecop|an GmbH, tbe work at
Kbalrpur PDP p|ant ls expected to be comp|eted wltbln 2nd Quarter
o| tbe year wltb sblpments a|ready recelved comp|ete|y. Sblpments
|or PDP p|ant at D. G. Kban slte are, bowever, current|y ln progress
and are expected to be comp|eted be|ore December tbls year.
RP Project: Wltb tbe tecbnlca| asslstance and co||aboratlon o|
renowned Orac|e Consu|tant ln Paklstan, M/s A. P. Perguson &
Assoclates, tbe LPP lmp|ementatlon project ls current|y ln |lna| stages
and lt ls expected to be |u||y resource|u| ln tbe comlng year. Tbe LPP
project ls expected to brlng around very strong |ramework o| lnterna|
contro|s wltb blgb|y e||ectlve and e||lclent process lntegratlon and
buslness procedures. Tbls wou|d be|p key management and a|| otber
stakebo|ders make buslness and lnvestment declslons on more rea|lstlc
and rea|-tlme basls.
Corporate 5ocia| Responsibi|ity
5ustainabi|ity: Sustalnabl|lty ls an lntegra| part o| tbe company's
strategy. Lven ln dl||lcu|t tlmes, Company takes lts envlronmenta|
and socla| responslbl|ltles as serlous|y as be|ore.
nvironmenta| 5afety: Tbe Company ls |u||y commltted towards
envlronmenta| sa|ety. Wltb state o| tbe art Dust Co||ectlon Systems
and L|ectrostatlc Preclpltators ln p|ace, tbe productlon |acl|ltles are
comp|lant wltb tbe Natlona| Lnvlronmenta| Qua|lty Standards.
Carbon Credits: Paklstan ls a slgnatory to tbe Kyoto Protoco| (a
protoco| to tbe Unlted Natlons Pramework Conventlon on C|lmate
Cbange, almed at |lgbtlng g|oba| warmlng) and tbe company, belng
a responslb|e corporate cltlzen, ls |u||y commltted to lt and ls actlve|y
reduclng greenbouse gas emlsslons |rom lts cement p|ants. Tbe Waste
Heat Pecovery project at D. G. Kban Slte ls current|y ln va|ldatlon
pbase. Tbe company ls a|so expected to obtaln carbon credlts on
varlous PDP projects lt ls engaged ln at present.
|ectricity Generation from Waste Heat: Pecent lnsta||atlon o|
Waste Heat Pecovery p|ant at D. G. Kban slte provlded two-|o|d
envlronmenta| sa|ety. Plrst|y, by utl|lzlng ||ue gases and beat |or
e|ectrlclty generatlon and second|y, by substltutlng carbonaceous |ue|
consumptlon at tbe power generatlon |acl|lty tbereby reduclng
greenbouse gas emlsslon at tbe power p|ant.
5afety: Programs to strengtben tbe sa|ety cu|ture across tbe company
were contlnued wltbout exceptlon. Tbe year 2O11, bowever, saw
an accldent (no |ata|lty) |or wblcb necessary correctlve and preventlve
actlon was taken by tbe management. Tbe management ls dolng
everytblng ln lts power to acbleve tbe objectlve o| comprebenslve
workp|ace sa|ety.
Re|ief work: Slnce 2O1O, our bome|and bas been su||erlng |rom
devastatlng ||oods o| buge magnltude c|almlng preclous |lves and
destroylng ln|rastructure a|| tbe way tbrougb. Tbe economy bas
su||ered a |ot and tbe a|ready poverty strlcken country ls ln a state
o| economlc turmol|.
Tbe company and lts emp|oyees are not beblnd ln be|plng tbelr
country men ln tbe perlod o| dlstress and ca|amlty. Tbey bave
contrlbuted |lnancla||y and remaln actlve|y lnvo|ved ln tbe re|le| e||orts
|or tbe rebabl|ltatlon o| tbe a||ected peop|e.
Qua|ity Management
Tbe company bas embarked on acblevlng manu|acturlng exce||ence
tbrougb lmprovement ln qua|lty, productlvlty and servlces. Tota|
productlve/ preventlve malntenance po|lcy wl|| lmprove supp|y cbaln
wltb reductlons ln |osses and de|ects, waste and |ead tlmes. Tbe
customers on tbe otber band wl|| bene|lt tbrougb more accurate
de|lverles and conslstent qua|lty product.
Appropriations
Tbe management, keeplng ln vlew tbe pro|ltabl|lty o| tbe company
declded not to recommend any dlvldend |or tbe year.
Auditors
Tbe present audltors, M/s KPMG Taseer Hadl & Co., Cbartered
Accountants bave retlred and, belng e|lglb|e, bave o||ered tbemse|ves
|or re-appolntment. Tbe Audlt Commlttee, bowever, bas proposed
|or appolntment o| M/s A. P. Perguson & Co., Cbartered Accountants
as audltors |or tbe year endlng 3O [une 2O12 subject to approva| o|
sbarebo|ders ln tbe Annua| Genera| Meetlng.
Comp|iance with the Code of Corporate Governance
Tbe requlrements o| tbe Code o| Corporate Governance set out by
Karacbl, Labore and |s|amabad Stock Lxcbanges ln tbelr Llstlng
Pegu|atlons, re|evant |or tbe year ended 3O [une 2O11 bave been
adopted by tbe company and bave been |u||y comp|led wltb. A
Statement to tbls e||ect ls annexed to tbe Peport.
Materia| Changes
Tbere bave been no materla| cbanges slnce 3O [une 2O1O and tbe
company bas not entered lnto any commltment wblcb wou|d a||ect
lts |lnancla| posltlon at tbe date except |or tbose mentloned ln tbe
audlted |lnancla| statements o| tbe company |or tbe year ended 3O
[une 2O11.
|ection of the Directors
Durlng tbe year under conslderatlon, e|ectlons were be|d |or tbe
o||lce o| tbe dlrectors o| tbe company. Tbe retlrlng Dlrectors, upon
comp|etlon o| tbelr stlpu|ated terms, submltted tbelr proposa|s |or
contestlng tbe o||lces except |or Mr Mubammad Azam, wbo dld not
sbow any lntentlons |or contestlng bls o||lce. Mr Parld Noor A|l Paza|
a|ong wltb a|| o| tbe retlrlng dlrectors (exc|udlng Mr Mubammad
Azam), belng e|lglb|e, contested tbe o||lce o| Dlrector and got e|ected
ln tbe board. | wlsb to p|ace on record my pro|ound appreclatlon o|
tbe servlces rendered by Mr Mubammad Azam durlng tbe tenure o|
bls o||lce and we|come a|| otbers to tbelr o||lce as Dlrectors o| tbls
company.
Meetings of Board of Directors
Durlng tbe year under conslderatlon, slx 8oard meetlngs were be|d
and tbe number o| meetlngs attended by eacb Dlrector ls glven ln
tbe annexed tab|e.
Audit Committee
An Audlt Commlttee o| tbe 8oard bas been ln exlstence slnce tbe
en|orcement o| tbe Code o| Corporate Governance, wblcb now
comprlses o| two Non-Lxecutlve Dlrectors (lnc|udlng lts Cbalrman)
and one Lxecutlve Dlrector. Durlng tbe year, slx Meetlngs o| tbe
Audlt Commlttee were be|d. Tbe Audlt Commlttee bas lts terms o|
re|erence wblcb were determlned by tbe 8oard o| Dlrectors ln
accordance wltb tbe gulde|lnes provlded by tbe Llstlng Pegu|atlons.
Corporate and Financia| Reporting Framework
Tbe |lnancla| statements togetber wltb tbe notes tbereon bave
been drawn up by tbe management o| tbe company ln con|ormlty
wltb tbe Companles Ordlnance, 1984 and app|lcab|e |nternatlona|
Plnancla| Peportlng Standards (|PPS). Tbese Statements present
|alr|y tbe company's state o| a||alrs, tbe resu|ts o| lts operatlons,
casb ||ow and cbanges ln equlty.
Any departure |rom tbe app|lcatlon o| |PPS bas been adequate|y
dlsc|osed.
Proper books o| account bave been malntalned by tbe company.
Approprlate accountlng po|lcles bave been conslstent|y app|led
ln tbe preparatlon o| |lnancla| statements and accountlng estlmates
are based on reasonab|e and prudent judgment.
Tbe system o| lnterna| contro| ls sound ln deslgn and bas been
e||ectlve|y lmp|emented and monltored and ls belng contlnuous|y
revlewed by tbe lnterna| audlt |unctlon.
Tbere are no doubts upon tbe company's abl|lty to contlnue as
a golng concern.
Tbere bas been no materla| departure |rom tbe 8est Practlces
o| Corporate Governance, as detal|ed ln tbe Llstlng Pegu|atlons.
Tbe key operatlng and |lnancla| data |or tbe |ast slx years ls
annexed.
va|ue o| lnvestments o| Provldent Pund ls Ps 448.281 ml||lon
(2O1O: Ps 389.378 ml||lon).
Ms Nablba Sbabnawaz Cbeema, Dlrector o| tbe company, so|d
1,5OO sbares o| tbe company durlng tbe year.
Pattern of 5hareho|ding
A statement o| pattern o| sbarebo|dlng o| certaln c|ass o| sbarebo|ders
as at 3O [une 2O11, wbose dlsc|osure ls requlred under tbe reportlng
|rameworks, ls lnc|uded ln tbe annexed sbarebo|ders' ln|ormatlon.
Tbe Dlrectors, Cble| Lxecutlve, Cble| Plnancla| O||lcer, Company
Secretary, tbelr spouses or mlnor cbl|dren dld not carry out any trade
ln tbe sbares o| tbe company durlng tbe year, except as noted above.
Company's 5taff and Customers
We wlsb to record our appreclatlon o| contlnued commltment o|
our emp|oyees and patronage o| our customers.
Por and on beba|| o| tbe 8oard
Mlan Paza Mansba
Cble| Lxecutlve O||lcer
Labore: O7 September 2O11
2011 2010
(Pupees ln tbousand) % (Pupees ln tbousand) %
Revenue Generated
Pevenues:
- Loca| sa|es 16,986,833 18,337,945
- Lxports 6,486,701 23,473,534 95% 3,698,676 22,O36,621 96%
|ncome |rom otber sources
- |nvestment lncome 951,350 766,399
- Otber lncome 155,312 1,106,662 5% 145,274 911,673 4%
24,580,196 1OO% 22,948,294 1OO%
Revenue Distributed
Supp|lers:
- Paw and packlng materla|s 1,805,898 1,912,8O8
- Servlces 2,443,757 971,6O6
- Stores spares 1,513,316 1,262,521
- Pue|s and energy 8,047,528 13,810,499 56% 8,O96,516 12,243,451 53%
Lmp|oyees 985,962 4% 841,521 4%
Government:
- Dlrect taxes 430,232 99,O28
- |ndlrect taxes 4,621,996 5,5O9,345
- Otber |evles and dutles - 5,052,228 21% 26,353 5,634,726 25%
Provlders o| Caplta|:
- 8anks 2,051,680 1,9O2,76O
- Ordlnary sbare bo|ders - 2,051,680 8% - 1,9O2,76O 8%
Pelnvested ln buslness
- Depreclatlon 1,430,409 1,392,563
- Pro|lt |or tbe year 170,960 1,601,369 7% 233,O22 1,625,585 7%
Otber operatlng costs - Net 1,078,458 4% 7OO,251 3%
24,580,196 1OO% 22,948,294 1OO%
5TATMNT OF VALU ADDlTlON FOR TH YAR NDD jUN 30, 2011
2011 2010 2009 2008 2007 2006
PRODUCTlON & 5AL5
{M.Tons)
C|lnker 3,738,404 4,684,379 3,946,1O1 4,142,764 2,433,428 2,193,687
Cement 4,176,733 4,9O8,593 3,877,296 4,227,767 2,542,6O2 2,125,585
Cement Sa|es: 4,165,635 4,9O8,962 3,854,949 4,233,953 2,5O2,3O6 2,134,355
Loca| 2,860,795 4,1O3,861 2,831,115 3,572,O78 2,348,829 1,968,114
Lxport 1,304,840 8O5,1O1 1,O23,834 661,875 153,477 166,241
C|lnker Sa|e
Loca| - - - 72,481 25,OOO 8O,OOO
Lxport 98,521 71,O41 177,O64 95,2O2 - -
OPRATlNG R5ULT5
{Rupees in thousand)
Net sa|es 18,577,198 16,275,354 18,O38,2O9 12,445,996 6,419,625 7,955,665
Gross pro|lt 4,384,969 2,7O5,36O 5,679,73O 1,915,273 2,O31,985 3,962,843
Pre-tax pro|lt /(|oss) 601,192 358,4O3 776,9OO (25O,93O) 1,72O,471 3,448,533
A|ter tax pro|lt /(|oss) 170,961 233,O22 525,581 (53,23O) 1,622,471 2,418,455
FlNANClAL PO5lTlON
Current assets 18,295,030 16,417,492 13,287,591 19,2O2,591 19,214,954 9,9O9,895
Current |lab|l|ltles 12,657,194 13,786,189 15,834,799 12,O54,718 7,39O,229 6,O15,436
Property, p|ant & equlpment 24,611,565 25,3O7,3O2 24,345,793 22,977,894 22,117,551 7,521,723
Tota| assets 49,673,050 47,O46,O43 42,723,O41 51,992,934 51,744,331 34,3O4,376
Long term |labl|ltes 5,090,685 5,274,674 4,528,224 8,538,959 8,8O6,917 7,461,74O
Sbarebo|der's equlty 30,217,285 26,519,22O 2O,918,442 3O,O8O,257 33,923,185 19,268,2OO
RATlO5
Current ratlo 1.45:1 1.19:1 O.84:1 1.59:1 2.6 : 1 1.64 : 1
Debt to equlty ratlo 25 : 75 28 : 72 27 : 73 45 : 55 44 : 56 48 : 52
Gross pro|lt to sa|es (%) 23.60 16.62 31.49 15.39 31.65 49.81
Net pro|lt to sa|es (%) 0.92 1.43 2.91 (O.43) 25.27 3O.4O
8reak up va|ue per Sbare (Ps.) 41.75 37.28 39.97 41.89 43.6O 44.34
Larnlngs per sbare
8aslc (Ps.) 0.45 O.7O 1.63 (O.21) 6.43 1O.37
Dl|uted (Ps.) 0.45 O.7O 1.63 (O.21) 6.43 9.14
OPRATlNG AND FlNANClAL DATA
PATTRN OF 5HAR HOLDlNG A5 AT jUN 30, 2011 {ORDlNARY 5HAR5)

1422 1 1OO Sbares 66956
2173 1O1 5OO Sbares 721625
1593 5O1 1OOO Sbares 1353O59
2521 1OO1 5OOO Sbares 634OO14
65O 5OO1 1OOOO Sbares 4887O58
2O6 1OOO1 15OOO Sbares 2639792
115 15OO1 2OOOO Sbares 2115221
89 2OOO1 25OOO Sbares 2O78158
29 35OO1 4OOOO Sbares 11O7866
5 7OOO1 75OOO Sbares 37128O
1O 75OO1 8OOOO Sbares 779261
5 8OOO1 85OOO Sbares 419945
2O 95OO1 1OOOOO Sbares 1989OOO
5 1OOOO1 1O5OOO Sbares 51644O
6 1O5OO1 11OOOO Sbares 65612O
11 115OO1 12OOOO Sbares 131OO66
2 135OO1 14OOOO Sbares 27518O
1 14OOO1 145OOO Sbares 145OOO
2 195OO1 2OOOOO Sbares 397OOO
3 2OOOO1 2O5OOO Sbares 6O8442
3 22OOO1 225OOO Sbares 672O4O
3 235OO1 24OOOO Sbares 7193OO
1 265OO1 27OOOO Sbares 27OOOO
NO. OF 5HAR HOLDlNG TOTAL 5HAR5
5HARHOLDR5 FROM {NO. OF 5HAR5) TO HLD
PATTRN OF 5HAR HOLDlNG A5 AT jUN 30, 2011 {ORDlNARY 5HAR5)

4 295OO1 3OOOOO Sbares 1198O8O
1 33OOO1 335OOO Sbares 3345OO
2 345OO1 35OOOO Sbares 7OOOOO
2 495OO1 5OOOOO Sbares 1OOOOOO
1 5O5OO1 51OOOO Sbares 51OOOO
1 8OOOO1 8O5OOO Sbares 8O2O8O
1 85OOO1 855OOO Sbares 85O32O
1 88OOO1 885OOO Sbares 88O8OO
1 995OO1 1OOOOOO Sbares 1OOOOOO
1 1O45OO1 1O5OOOO Sbares 1O45119
1 1O5OOO1 1O55OOO Sbares 1O53232
1 1O65OO1 1O7OOOO Sbares 1O668OO
1 11OOOO1 11O5OOO Sbares 11O1488
1 1185OO1 119OOOO Sbares 1188OOO
1 12O5OO1 121OOOO Sbares 12O96OO
1 133OOO1 1335OOO Sbares 1331973
1 14O5OO1 141OOOO Sbares 14O7944
1 1545OO1 155OOOO Sbares 1548485
1 1555OO1 156OOOO Sbares 1558164
1 1615OO1 162OOOO Sbares 1619527
1 177OOO1 1775OOO Sbares 177432O
1 1795OO1 18OOOOO Sbares 18OOOOO
1 1975OO1 198OOOO Sbares 1977OO1
1 2O95OO1 21OOOOO Sbares 2O97782
1 2135OO1 214OOOO Sbares 2136OOO
1 2195OO1 22OOOOO Sbares 21955OO
1 2365OO1 237OOOO Sbares 2369342
1 26OOOO1 26O5OOO Sbares 26O454O
1 2675OO1 268OOOO Sbares 2675275
1 2785OO1 279OOOO Sbares 2787387
1 2995OO1 3OOOOOO Sbares 2997393
1 3O75OO1 3O8OOOO Sbares 3O78O82
1 322OOO1 3225OOO Sbares 3221572
1 3595OO1 36OOOOO Sbares 36OOOOO
1 368OOO1 3685OOO Sbares 368OO11
1 4635OO1 464OOOO Sbares 4635974
1 4685OO1 469OOOO Sbares 4688478
1 6OO5OO1 6O1OOOO Sbares 6OO6253
1 6415OO1 642OOOO Sbares 6416743
1 6525OO1 653OOOO Sbares 6529158
1 7995OO1 8OOOOOO Sbares 8OOOOOO
1 8O6OOO1 8O65OOO Sbares 8O6O9O6
1 9995OO1 1OOOOOOO Sbares 1OOOOOOO
1 11145OO1 1115OOOO Sbares 1114992O
1 15725OO1 1573OOOO Sbares 15729997
1 19335OO1 1934OOOO Sbares 19337O6O
9245 TOTAL 438119118
CATGORl5 OF 5HARHOLDR5 A5 ON jUN 30, 2011
5HAR5 HLD PRCNTAG
1. Dlrectors, Cble| Lxecutlve O||lcer, 18,7O9,311 4.27
and tbelr spouse and mlnor cbl|dren
2. Assoclated Companles, undertaklngs 138,982,145 31.72
and re|ated partles.
3. N|T and |CP 6,418,362 1.46
4. 8anks Deve|opment Plnancla| 3O,169,679 6.89
|nstltutlons Non 8anklng Plnancla|
|nstltutlons.
5. |nsurance Companles 8,281,877 1.89
6. Modarabas and Mutua| Punds 1O,238,324 2.34
7. Sbarebo|ders bo|dlng 1O% 137,574,2O1 31.4O
8. Genera| Pub|lc :
a. Loca| 138,358,835 31.58
b. Porelgn 67,124,633 15.32
9. Otbers
Penslon Punds, Provldent Punds etc. 23,O32,618 5.26
5r. No. Name of Director No. of meetings attended
1 Mrs Naz Mansba Cbalrperson 5
2 Mlan Paza Mansba Cble| Lxecutlve O||lce 5
3 Mr Kba|ld Qadeer Quresbl Cbalrman Audlt Commlttee 6
4 Mr Zaka ud Dln 6
5 Mr Mubammad Azam (Petlred on 3O.1O.1O) 3
6 Mr |nayat U||ab Nlazl Cble| Plnancla| O||lcer 6
7 Mr Parld Noor A|l Paza| Member Audlt Commlttee 3
8 Ms Nabeeba Sbabnawaz Cbeema Member Audlt Commlttee 6
MTlNG5 OF BOARD OF DlRCTOR5
{A) A55OClATD COMPANl5, UNDRTAKlNG5 AND RLATD PARTl5 A5 ON 30/06/2011:-
No. of 5hares Percentage
1. N|SHAT M|LLS LTD 137,574,2O1 31.4O
2. ADAM[LL |NSUPANCL COMPANY L|M|TLD 1,4O7,944 O.32
{B) NlT AND lCP:-
1. |NvLSTMLNT COPPOPAT|ON OP PAK|STAN 1,4OO O.OO
2. N|T 219 O.OO
3. NAT|ONAL 8ANK OP PAK|STAN-TPUSTLL W|NG 6,416,743 1.46
{C) DlRCTOR5, CO, THlR 5POU5 AND MlNOR CHlLDRN:-
1. MPS. NAZ MANSHA D|PLCTOP/CHA|PPLPSON 113,O98 O.O3
2. M|AN PAZA MANSHA D|PLCTOP/CH|LP LXLCUT|vL 12,696,88O 2.9O
3. MP. KHAL|D QADLLP QUPLSH| D|PLCTOP 72O O.OO
4. MP. ZAKA UD D|N D|PLCTOP 72O O.OO
5. MP. |.U. N|AZ| D|PLCTOP/CPO 2,775 O.OO
6. MS. NA8|HA SHAHNAWAZ CHLLMA D|PLCTOP 2,82O O.OO
7. MPS. AMM|L PAZA MANSHA 5,891,O98 1.34
(SPOUSL OP CH|LP LXLCUT|vL)
{D) XCUTlV5:-
N|L
{) PUBLlC 5CTOR COMPANl5 & CORPORATlON5:-
1. [olnt Stock Companles 15O,5O9,392 34.35
{F) BANK5, DVLOPMNT FlNANC lN5TlTUTlON5, NON-BANKlNG FlNANC lN5TlTUTlON5
lN5URANC COMPANl5, MODARABA5 AND MUTUAL FUND5:-
1. |nvestment Companles 1O,4O3,76O 2.37
2. |nsurance Companles 8,281,877 1.89
3. Plnancla| |nstltutlons 3O,169,679 6.89
4. Modaraba Companles 1O,238,324 2.34
{G) 5HARHOLDR5 HOLDlNG TN PRCNT OR MOR VOTlNG lNTR5T lN TH Ll5TD COMPANY:-
1. N|SHAT M|LLS LTD. 114,645,168 31.4O
lNFORMATlON UNDR CLAU5 XlX {j) OF TH COD OF CORPORAT GOVRNANC
Tbe tradlng ln tbe Company's Sbares durlng tbe perlod [u|y 1, 2O1O to [une 3O, 2O11 by tbe re|ated partles ls
as under:-
Sa|e Purcbase
(No. o| Sbares)
MS. NA8|HA SHAHNAWAZ CHLLMA 1,5OO -
(D|PLCTOP)
lNFORMATlON UNDR CLAU5 XlX {i) OF TH COD OF CORPORAT GOVRNANC A5 ON jUN 30, 2011
5TATMNT OF COMPLlANC WlTH TH COD OF CORPORAT GOVRNANC
Tbls statement ls belng presented to comp|y wltb tbe Code o| Corporate Governance contalned ln Pegu|atlon No. 35, 35 &
37 o| |lstlng regu|atlons o| Karacbl, Labore & |s|amabad Stock Lxcbanges respectlve|y |or tbe purpose o| estab|lsblng a |ramework
o| good governance, wbereby a |lsted company ls managed ln comp|lance wltb tbe best practlces o| corporate governance.
Tbe Company bas app|led tbe prlnclp|es contalned ln tbe Code ln tbe |o||owlng manner:
1. Tbe Company encourages representatlon o| lndependent non-executlve dlrectors and dlrectors representlng mlnorlty
lnterests on lts 8oard o| Dlrectors. At present tbe 8oard lnc|udes lndependent non-executlve dlrectors.
2. Tbe dlrectors bave con|lrmed tbat none o| tbem ls servlng as a dlrector ln more tban ten |lsted companles, lnc|udlng tbls
Company.
3. A|| tbe resldent dlrectors o| tbe Company are reglstered as taxpayers and none o| tbem bas de|au|ted ln payment o| any
|oan to a banklng company, a DP| or an N8P| or, belng a member o| a stock excbange, bas been dec|ared as a de|au|ter
by tbat stock excbange.
4. No casua| vacancles occurred ln tbe 8oard durlng tbe year.
5. Tbe Company bas prepared a 'Statement o| Ltblcs and 8uslness Practlces', wblcb bas been slgned by a|| tbe dlrectors and
emp|oyees o| tbe Company.
6. Tbe 8oard bas deve|oped a vlslon/mlsslon statement, overa|| corporate strategy and slgnl|lcant po|lcles o| tbe Company.
A comp|ete record o| partlcu|ars o| slgnl|lcant po|lcles a|ong wltb tbe dates on wblcb tbey were approved or amended bas
been malntalned.
7. A|| tbe powers o| tbe 8oard bave been du|y exerclsed and declslons on materla| transactlons, lnc|udlng appolntment and
determlnatlon o| remuneratlon and terms and condltlons o| emp|oyment o| tbe CLO and otber executlve dlrectors, bave
been taken by tbe 8oard.
8. Tbe meetlngs o| tbe 8oard were preslded over by tbe Cbalrman and, ln bls absence, by a dlrector e|ected by tbe 8oard
|or tbls purpose and tbe 8oard met at |east once ln every quarter. Wrltten notlces o| tbe 8oard meetlngs, a|ong wltb agenda
and worklng papers, were clrcu|ated at |east seven days be|ore tbe meetlngs. Tbe mlnutes o| tbe meetlngs were approprlate|y
recorded and clrcu|ated.
9. No orlentatlon course bas been arranged durlng tbe year.
1O. Tbe appolntment o| CPO, Company Secretary and Head o| |nterna| Audlt, lnc|udlng tbelr remuneratlon and terms and
condltlons o| emp|oyment bave been du|y approved by tbe 8oard.
11. Tbe dlrectors' report |or tbls year bas been prepared ln comp|lance wltb tbe requlrements o| tbe Code and |u||y descrlbes
tbe sa|lent matters requlred to be dlsc|osed.
12. Tbe |lnancla| statements o| tbe Company were du|y endorsed by CLO and CPO be|ore approva| o| tbe 8oard.
13. Tbe dlrectors, CLO and executlves do not bo|d any lnterest ln tbe sbares o| tbe Company otber tban tbat dlsc|osed ln tbe
pattern o| sbarebo|dlng.
14. Tbe Company bas comp|led wltb a|| tbe corporate and |lnancla| reportlng requlrements o| tbe Code.
15. Tbe audlt commlttee ls contlnued and lt comprlses 3 members, o| wbom 2 members are non-executlve dlrectors lnc|udlng
tbe cbalrman o| tbe commlttee and 1 member ls executlve dlrector.
16. Tbe meetlngs o| tbe audlt commlttee were be|d at |east once every quarter prlor to approva| o| lnterlm and |lna| resu|ts
o| tbe Company and as requlred by tbe Code. Tbe terms o| re|erence o| tbe commlttee bave been |ormed and advlsed
to tbe commlttee |or comp|lance.
17. Tbe 8oard bas set-up an e||ectlve lnterna| audlt |unctlon wbo are consldered sultab|y qua|l|led and experlenced |or tbe
purpose and are conversant wltb tbe po|lcles and procedures o| tbe Company and tbey are lnvo|ved ln tbe lnterna| audlt
|unctlon on a |u|| tlme basls.
18. Tbe statutory audltors o| tbe Company bave con|lrmed tbat tbey bave been glven a satls|actory ratlng under tbe Qua|lty
Contro| Pevlew programme o| tbe |nstltute o| Cbartered Accountants o| Paklstan, tbat tbey or any o| tbe partners o| tbe
|lrm, tbelr spouses and mlnor cbl|dren do not bo|d sbares o| tbe Company and tbat tbe |lrm and a|| lts partners are ln
comp|lance wltb |nternatlona| Pederatlon o| Accountants (|PAC) gulde|lnes on code o| etblcs as adopted by |nstltute o|
Cbartered Accountants o| Paklstan.
19. Tbe statutory audltors or tbe persons assoclated wltb tbem bave not been appolnted to provlde otber servlces except ln
accordance wltb tbe |lstlng regu|atlons and tbe audltors bave con|lrmed tbat tbey bave observed |PAC gulde|lnes ln tbls
regard.
2O. Tbe re|ated party transactlons bave been p|aced be|ore tbe audlt commlttee and approved by tbe 8oard o| Dlrectors to
comp|y wltb tbe requlrements o| |lstlng regu|atlons o| Karacbl, Labore and |s|amabad Stock Lxcbanges. A|| transactlons wltb
re|ated partles were made on an arm's |engtb basls.
21. We con|lrm tbat a|| otber materla| prlnclp|es contalned ln tbe Code bave been substantla||y comp|led wltb.
M|AN PAZA MANSHA
LAHOPL CH|LP LXLCUT|vL
SLPTLM8LP O7, 2O11 N|C Number : 352O2-25395OO-5
We bave revlewed tbe Statement o| Comp|lance wltb tbe best practlces contalned ln tbe Code o| Corporate Governance
prepared by tbe 8oard o| Dlrectors o| D.G. Kban Cement Company Llmlted (tbe Company") to comp|y wltb tbe Llstlng
Pegu|atlons o| Karacbl and Labore Stock Lxcbanges.
Tbe responslbl|lty |or comp|lance wltb tbe Code o| Corporate Governance ls tbat o| tbe 8oard o| Dlrectors o| tbe Company.
Our responslbl|lty ls to revlew, to tbe extent wbere sucb comp|lance can be objectlve|y verl|led, wbetber tbe Statement o|
Comp|lance re||ects tbe status o| tbe Company's comp|lance wltb tbe provlslons o| tbe Code o| Corporate Governance and
report l| lt does not. A revlew ls |lmlted prlmarl|y to lnqulrles o| tbe Company personne| and revlew o| varlous documents
prepared by tbe Company to comp|y wltb tbe Code. As part o| our audlt o| |lnancla| statements we are requlred to obtaln
an understandlng o| tbe accountlng and lnterna| contro| systems su||lclent to p|an tbe audlt and deve|op an e||ectlve audlt
approacb. We bave not carrled out any specla| revlew o| tbe lnterna| contro| system to enab|e us to express an oplnlon as to
wbetber tbe 8oard's statement on lnterna| contro| covers a|| contro|s and tbe e||ectlveness o| sucb lnterna| contro|s.
Purtber, Sub- Pegu|atlon (xlll a) o| Llstlng Pegu|atlon No. 35 (prevlous|y Pegu|atlon No. 37) notl|led by Tbe Karacbl Stock
Lxcbange (Guarantee) Llmlted vlde clrcu|ar KSL/N-269 dated 19 [anuary 2O1O requlres tbe Company to p|ace be|ore tbe 8oard
o| Dlrectors |or tbelr conslderatlon and approva| re|ated party transactlons dlstlngulsblng between transactlons carrled out
on terms equlva|ent to tbose tbat preval| ln arm's |engtb transactlons and transactlons wblcb are not executed at arm's |engtb
prlce recordlng proper justl|lcatlon |or uslng sucb a|ternate prlclng mecbanlsm. Purtber, a|| sucb transactlons are a|so requlred
to be separate|y p|aced be|ore tbe audlt commlttee.
We are on|y requlred and bave ensured comp|lance o| requlrement to tbe extent o| approva| o| re|ated party transactlons by
tbe 8oard o| Dlrectors and p|acement o| sucb transactlons be|ore tbe audlt commlttee. We bave not carrled out any procedures
to determlne wbetber tbe re|ated party transactlons were under taken at arm's |engtb prlce.
8ased on our revlew, notblng bas come to our attentlon wblcb causes us to be|leve tbat tbe Statement o| Comp|lance does
not approprlate|y re||ect tbe Company's comp|lance, ln a|| materla| respects, wltb tbe best practlces contalned ln tbe Code o|
Corporate Governance as app|lcab|e to tbe Company tbe year ended 3O [une 2O11.
RVlW RPORT TO TH MMBR5 ON 5TATMNT OF COMPLlANC
WlTH TH B5T PRACTlC5 OF COD OF CORPORAT GOVRNANC
KPMG Taseer Hadl & Co
Cbartered Accountants
Labore
September O7, 2O11
We bave audlted tbe annexed ba|ance sbeet o| D. G. Kban Cement Company Llmlted (tbe Company") as at 3O [une 2O11
and tbe re|ated pro|lt and |oss account, statement o| comprebenslve lncome, casb ||ow statement and statement o| cbanges
ln equlty togetber wltb tbe notes |ormlng part tbereo|, |or tbe year tben ended and we state tbat we bave obtalned a|| tbe
ln|ormatlon and exp|anatlons wblcb, to tbe best o| our know|edge and be|le|, were necessary |or tbe purposes o| our audlt.
|t ls tbe responslbl|lty o| tbe Company's management to estab|lsb and malntaln a system o| lnterna| contro|, and prepare and
present tbe above sald statements ln con|ormlty wltb tbe approved accountlng standards and tbe requlrements o| tbe Companles
Ordlnance, 1984. Our responslbl|lty ls to express an oplnlon on tbese statements based on our audlt.
We conducted our audlt ln accordance wltb tbe audltlng standards as app|lcab|e ln Paklstan. Tbese standards requlre tbat we
p|an and per|orm tbe audlt to obtaln reasonab|e assurance about wbetber tbe above sald statements are |ree o| any materla|
mlsstatement. An audlt lnc|udes examlnlng, on a test basls, evldence supportlng tbe amounts and dlsc|osures ln tbe above sald
statements. An audlt a|so lnc|udes assesslng tbe accountlng po|lcles and slgnl|lcant estlmates made by management, as we|| as,
eva|uatlng tbe overa|| presentatlon o| tbe above sald statements. We be|leve tbat our audlt provldes a reasonab|e basls |or our
oplnlon and, a|ter due verl|lcatlon, we report tbat:
a) ln our oplnlon, proper books o| account bave been kept by tbe Company as requlred by tbe Companles Ordlnance,
1984,
b) ln our oplnlon:
l) tbe ba|ance sbeet and pro|lt and |oss account togetber wltb tbe notes tbereon bave been drawn up ln
con|ormlty wltb tbe Companles Ordlnance, 1984, and are ln agreement wltb tbe books o| account and are
|urtber ln accordance wltb accountlng po|lcles conslstent|y app|led,
ll) tbe expendlture lncurred durlng tbe year was |or tbe purpose o| tbe Company's buslness, and
lll) tbe buslness conducted, lnvestments made and tbe expendlture lncurred durlng tbe year were ln accordance
wltb tbe objects o| tbe Company,
c) ln our oplnlon and to tbe best o| our ln|ormatlon and accordlng to tbe exp|anatlons glven to us, tbe ba|ance sbeet,
pro|lt and |oss account, statement o| comprebenslve lncome, casb ||ow statement and statement o| cbanges ln
equlty togetber wltb tbe notes |ormlng part tbereo| con|orm wltb approved accountlng standards as app|lcab|e
ln Paklstan, and, glve tbe ln|ormatlon requlred by tbe Companles Ordlnance, 1984, ln tbe manner so requlred
and respectlve|y glve a true and |alr vlew o| tbe state o| tbe Company's a||alrs as at 3O [une 2O11 and o| tbe pro|lt,
lts comprebenslve lncome, lts casb ||ows and cbanges ln equlty |or tbe year tben ended, and
d) ln our oplnlon no Zakat was deductlb|e at source under tbe Zakat and Usbr Ordlnance, 198O (Xv||| o| 198O).
Labore
September O7, 2O11
AUDlTOR5' RPORT TO TH MMBR5
KPMG Taseer Hadl & Co
(8l|a| A|l)
2011 2010
Note ----(Pupees ln tbousand)----
QUlTY AND LlABlLlTl5
CAPlTAL AND R5RV5
Authorised capita|
- 95O,OOO,OOO (2O1O: 95O,OOO,OOO) ordlnary sbares o| Ps 1O eacb 9,500,000 9,5OO,OOO
- 5O,OOO,OOO (2O1O: 5O,OOO,OOO) pre|erence sbares o| Ps 1O eacb 500,000 5OO,OOO
10,000,000 1O,OOO,OOO
|ssued, subscrlbed and pald up caplta| 3 4,381,192 3,65O,993
Peserves 4 24,957,382 22,16O,477
Accumu|ated pro|lt 878,711 7O7,75O
30,217,285 26,519,22O
NON-CURRNT LlABlLlTl5
Long term |lnances 5 4,880,579 5,O89,5O7
Long term deposlts 6 70,893 81,138
Petlrement and otber bene|lts 7 139,213 1O4,O29
De|erred taxatlon 8 1,707,886 1,465,96O
6,798,571 6,74O,634
CURRNT LlABlLlTl5
Trade and otber payab|es 9 1,644,045 1,679,749
Accrued markup 1O 284,511 346,425
Sbort term borrowlng - secured 11 8,691,982 9,585,642
Current portlon o| non-current |labl|ltles 12 2,001,566 2,139,283
Provlslon |or taxatlon 35,090 35,O9O
12,657,194 13,786,189
CONTlNGNCl5 AND COMMlTMNT5 13
49,673,050 47,O46,O43
Tbe annexed notes |rom 1 to 41 |orm an lntegra| part o| tbese |lnancla| statements.
Chief xecutive
BALANC 5HT
2011 2010
Note ----(Pupees ln tbousand)-----
A55T5
NON-CURRNT A55T5
Property, p|ant and equlpment 14 24,611,565 25,3O7,3O2
Caplta| work ln progress 15 1,373,820 465,65O
|nvestments 16 5,259,416 4,696,922
Long term |oans, advances and deposlts 17 133,219 158,677
31,378,020 3O,628,551
CURRNT A55T5
Stores, spares and |oose too|s 18 3,543,034 3,O17,742
Stock-ln-trade 19 862,141 1,O36,876
Trade debts 2O 459,300 3O3,949
|nvestments 21 12,126,349 1O,74O,972
Advances, deposlts, prepayments
and otber recelvab|es 22 1,136,564 1,O87,161
Casb and bank ba|ances 23 167,642 23O,792
18,295,030 16,417,492
49,673,050 47,O46,O43
A5 AT jUN 30, 2011
Director
2011 2010
Sa|es - net 24 18,577,198 16,275,354
Cost o| sa|es 25 {14,192,229) (13,569,994)
Gross profit 4,384,969 2,7O5,36O
Admlnlstratlve expenses 26 {211,362) (172,436)
Se||lng and dlstrlbutlon expenses 27 {2,470,599) (994,418)
Otber operatlng expenses 28 {37,964) (189,O15)
Otber operatlng lncome 29 1,106,662 911,672
|mpalrment on lnvestments {118,836) -
Profit from operations 2,652,870 2,261,163
Plnance cost 3O {2,051,678) (1,9O2,76O)
Profit before tax 601,192 358,4O3
Taxatlon 31 {430,231) (125,381)
Profit for the year 170,961 233,O22
Pestated
Larnlngs per sbare - baslc and dl|uted 32 0.45 O.7O
Chief xecutive
PROFlT AND LO55 ACCOUNT FOR TH YAR NDD jUN 30, 2011
Director
2011 2010
-----(Pupees ln tbousand)----
Profit after taxation 170,961 233,O22
Other comprehensive income :
Avai|ab|e for sa|e financia| assets
- Cbange ln |alr va|ue 2,185,542 4,2O9,53O
- Pea|lzed galn tbrougb pro|lt and |oss account - (58,772)
- |mpalrment |oss tbrougb pro|lt and |oss account {118,836) -
Otber comprebenslve lncome |or tbe year 2,066,706 4,15O,758
Tota| comprehensive income for the year 2,237,667 4,383,78O
5TATMNT OF COMPRHN5lV lNCOM
FOR TH YAR NDD jUN 30, 2011
Director Chief xecutive
Chief xecutive
Director
2011 2010
Note -----(Pupees ln tbousand)----
Cash f|ows from operating activities
Casb generated |rom operatlons 33 2,795,938 3,194,599
Plnance cost pald {2,113,592) (2,O88,1O7)
Petlrement and otber bene|lts pald {19,793) (11,368)
Taxes pald {312,120) (26O,492)
Net lncrease/ (decrease) ln |ong term deposlts {10,245) 7,373
Net cash generated from operating activities 340,188 842,OO5
Cash f|ows from investing activities
Caplta| expendlture lnc|udlng purcbase
o| property, p|ant and equlpment {1,672,612) (1,O79,494)
Proceeds |rom sa|e o| property, p|ant and equlpment 39,386 16,785
|nvestments - net - (249,445)
Net decrease ln |ong term |oans,
advances and deposlts 23,693 8,489
Dlvldend recelved 951,354 766,398
|nterest recelved 42,146 2,555
Net cash used in investing activities {616,033) (534,712)
Cash f|ows from financing activities
Proceeds |rom lssuance o| sbare caplta| 1,460,398 1,216,998
Proceeds |rom |ong term |lnances 1,850,000 3,O5O,OOO
Pepayment o| |ong term |lnances {2,204,042) (5,1O4,383)
Dlvldend pald {1) (25)
Net cash generated from/ {used in) financing activities 1,106,355 (837,41O)
Net increase/ {decrease) in cash and cash equiva|ents 830,510 (53O,117)
Cash and cash equiva|ents at the beginning of year {9,354,850) (8,824,733)
Cash and cash equiva|ents at the end of year 34 {8,524,340) (9,354,85O)
CA5H FLOW 5TATMNT FOR TH YAR NDD jUN 30, 2011
5TATMNT OF CHANG5 lN QUlTY FOR TH YAR NDD jUN 30, 2011
5hare
capita|
5hare
premium
Fair
va|ue
reserve
Capita|
redemption
reserve
fund
Genera|
reserve
Accumu|ated
profit Tota|
{ R u p e e s i n t h o u s a n d )
Ba|ance as at 30 june 2009 3,O42,494 3,218,466 8,757,417 353,51O 5,O71,827 474,728 2O,918,442
Caplta| transactlons wltb owners
- Plgbt lssue 6O8,499 6O8,499 - - - - 1,216,998
Tota| comprebenslve lncome
|or tbe year
- Pro|lt |or tbe year - - - - - 233,O22 233,O22
- Otber comprebenslve
lncome |or tbe year - - 4,15O,758 - - - 4,15O,758
- - 4,15O,758 - - 233,O22 4,383,78O
Ba|ance as at 30 june 2010 3,65O,993 3,826,965 12,9O8,175 353,51O 5,O71,827 7O7,75O 26,519,22O
Caplta| transactlons wltb owners
- Plgbt lssue 73O,199 73O,199 - - - - 1,46O,398
Tota| comprebenslve lncome
|or tbe year
- Pro|lt |or tbe year - - - - - 17O,961 17O,961
- Otber comprebenslve
lncome |or tbe year - - 2,O66,7O6 - - - 2,O66,7O6
- - 2,O66,7O6 - - 17O,961 2,237,667
Ba|ance as at 30 june 2011 4,381,192 4,557,164 14,974,881 353,510 5,071,827 878,711 30,217,285
1 Lega| status and nature of business
D. G. Kban Cement Company Llmlted ("tbe Company") ls a pub|lc |lmlted company lncorporated ln Paklstan and ls |lsted
on Karacbl, Labore and |s|amabad Stock Lxcbanges. |t ls prlnclpa||y engaged ln productlon and sa|e o| C|lnker, Ordlnary
Port|and and Su|pbate Peslstant Cement. Tbe reglstered o||lce o| tbe Company ls sltuated at 53-A Lawrence Poad,
Labore.
2 5ummary of significant accounting po|icies
Tbe slgnl|lcant accountlng po|lcles adopted ln preparatlon o| |lnancla| statements are set out be|ow.
2.1 8asls o| preparatlon and statement o| comp|lance
Tbese |lnancla| statements bave been prepared ln accordance wltb approved accountlng standards as app|lcab|e
ln Paklstan. Approved accountlng standards comprlse o| sucb |nternatlona| Plnancla| Peportlng Standards (|PPSs)
lssued by tbe |nternatlona| Accountlng Standards 8oard as are notl|led under tbe provlslons o| tbe Companles
Ordlnance, 1984. Wberever, tbe requlrements o| tbe Companles Ordlnance, 1984 or dlrectlves lssued under
tbe Companles Ordlnance, 1984 dl||er, tbe provlslons or dlrectlves o| tbe Companles Ordlnance, 1984 sba||
preval|.
2.2 Accountlng conventlon
Tbese |lnancla| statements bave been prepared on tbe basls o| blstorlca| cost conventlon, except |or reva|uatlon
o| certaln |lnancla| lnstruments at |alr va|ue and recognltlon o| certaln emp|oyee retlrement bene|lts at present va|ue.
Tbe preparatlon o| |lnancla| statements ln con|ormlty wltb approved accountlng standards requlres management
to make judgments, estlmates and assumptlons tbat a||ect tbe app|lcatlon o| po|lcles and reported amounts o|
assets and |labl|ltles, lncome and expenses. Tbe estlmates and assoclated assumptlons and judgments are based
on blstorlca| experlence and varlous otber |actors tbat are be|leved to be reasonab|e under tbe clrcumstances,
tbe resu|t o| wblcb |orm tbe basls o| maklng tbe judgments about carrylng va|ues o| assets and |labl|ltles tbat are
not readl|y apparent |rom otber sources. Actua| resu|ts may dl||er |rom tbese estlmates.
Tbe estlmates and under|ylng assumptlons are revlewed on an ongolng basls. Pevlslon to accountlng estlmates
are recognlzed ln tbe perlod ln wblcb tbe estlmate ls revlsed l| tbe revlslon a||ects on|y tbat perlod, or ln tbe
perlod o| revlslon and |uture perlods l| tbe revlslon a||ects botb current and |uture perlods. Tbe areas wbere
varlous assumptlons and estlmates are slgnl|lcant to Company's |lnancla| statements or wbere judgments were
exerclsed ln app|lcatlon o| accountlng po|lcles are:
- Provlslon |or taxatlon note 2.4
- Petlrement and otber bene|lts note 2.5
- Pesldua| va|ues and use|u| |lves o| depreclab|e assets note 2.7
- |nterest rate and cross currency swaps note 2.17
- Provlslons and contlngencles note 2.19
2.3 8orrowlngs
|nterest bearlng borrowlngs are recognlzed lnltla||y at |alr va|ue |ess attrlbutab|e transactlon cost. Subsequent to
lnltla| recognltlon, tbese are stated at amortlzed cost wltb any dl||erence between cost and redemptlon va|ue
belng recognlzed ln tbe pro|lt and |oss over tbe perlod o| tbe borrowlngs on an e||ectlve lnterest rate basls.
Pre|erence sbares, wblcb are mandatorl|y redeemab|e on a specl|lc date at tbe optlon o| tbe company, are c|assl|led
as |labl|ltles. Tbe dlvldend on tbese pre|erence sbares are recognlzed ln tbe pro|lt and |oss account as |lnance
cost. Plnance costs are accounted |or on an accrua| basls.
NOT5 TO TH FlNANClAL 5TATMNT5 FOR TH YAR NDD jUN 30, 2011
2.4 Taxatlon
|ncome tax expense comprlses current and de|erred tax. |ncome tax ls recognlzed ln tbe pro|lt and |oss account
except to tbe extent tbat lt re|ates to ltems recognlzed dlrect|y ln equlty, ln wblcb case lt ls recognlzed ln equlty.
Current
Provlslon o| current tax ls based on tbe taxab|e lncome |or tbe year determlned ln accordance wltb tbe preval|lng
|aw |or taxatlon o| lncome. Tbe cbarge |or current tax ls ca|cu|ated uslng preval|lng tax rates or tax rates expected
to app|y to tbe pro|lt |or tbe year l| enacted a|ter taklng lnto account tax credlts, rebates and exemptlons, l| any.
Tbe cbarge |or current tax a|so lnc|udes adjustments, wbere consldered necessary, to provlslon |or tax made
ln prevlous years arlslng |rom assessments |ramed durlng tbe year |or sucb years.
De|erred
De|erred tax ls accounted |or uslng tbe ba|ance sbeet |labl|lty metbod ln respect o| a|| temporary dl||erences
arlslng |rom dl||erences between tbe carrylng amount o| assets and |labl|ltles ln tbe |lnancla| statements and tbe
correspondlng tax bases used ln tbe computatlon o| tbe taxab|e pro|lt. De|erred tax |labl|ltles are genera||y
recognlzed |or a|| taxab|e temporary dl||erences and de|erred tax assets are recognlzed to tbe extent tbat lt ls
probab|e tbat taxab|e pro|lts wl|| be aval|ab|e agalnst wblcb tbe deductlb|e temporary dl||erences, unused tax
|osses and tax credlts can be utl|lzed.
De|erred tax assets and |labl|ltles are ca|cu|ated at tbe rates tbat are expected to app|y to tbe perlod wben tbe
asset ls rea|lzed or tbe |labl|lty ls sett|ed, based on tbe tax rates (and tax |aws) tbat bave been enacted or
substantlve|y enacted by tbe ba|ance sbeet date. De|erred tax ls cbarged or credlted to tbe pro|lt and |oss
account, except ln tbe case o| ltems cbarged or credlted to equlty ln wblcb case lt ls lnc|uded ln tbe statement
o| cbanges ln equlty.
2.5 Petlrement and otber bene|lts
Tbe maln |eatures o| tbe scbemes operated by tbe Company |or lts emp|oyees are as |o||ows:
De|lned bene|lt p|an
Tbe Company operates an approved |unded de|lned bene|lt gratulty p|an |or a|| emp|oyees bavlng a servlce
perlod o| more tban |lve years |or management sta|| and one year |or workers. Provlslons are made ln tbe
|lnancla| statements to cover ob|lgatlons on tbe basls o| actuarla| va|uatlons carrled out annua||y. Tbe most recent
va|uatlon was carrled out as at 3O [une 2O11 uslng tbe "Projected Unlt Credlt Metbod".
Tbe amount recognlzed ln ba|ance sbeet represents tbe present va|ue o| tbe de|lned bene|lt ob|lgatlon as on
3O [une 2O11 as adjusted |or unrecognlzed actuarla| galns and |osses.
Cumu|atlve net unrecognlzed actuarla| galns and |osses at tbe end o| tbe prevlous year wblcb exceed 1O% o|
tbe greater o| tbe present va|ue o| tbe Company ob|lgatlons and tbe |alr va|ue o| p|an assets are amortlzed over
tbe expected average worklng |lves o| tbe partlclpatlng emp|oyees.
De|lned contrlbutlon p|an
Tbe Company operates a recognlzed provldent |und |or a|| lts regu|ar emp|oyees. Lqua| montb|y contrlbutlons
are made to tbe |und botb by tbe Company and tbe emp|oyees at tbe rate o| 1O% o| tbe baslc sa|ary |or o||lcers
and 1O% o| baslc sa|ary p|us cost o| |lvlng a||owance |or workers. Ob|lgatlon |or contrlbutlons to de|lned
contrlbutlon p|an ls recognlzed as an expense ln tbe pro|lt and |oss account as and wben lncurred.
Accumu|atlng compensated absences
Tbe Company provldes |or accumu|atlng compensated absences, wben tbe emp|oyees render servlce tbat
lncrease tbelr entlt|ement to |uture compensated absences. Under tbe servlce ru|es emp|oyees are entlt|ed to
2.5 days |eave per montb. Unutl|lzed |eaves can be accumu|ated upto 9O days ln case o| o||lcers. Any ba|ance
ln excess o| 9O days can be encasbed upto 17 days a year on|y. Any |urtber unutl|lsed |eaves |apse. |n case o|
workers, unutl|lzed |eaves may be accumu|ated wltbout any |lmlt, bowever accumu|ated |eave ba|ance above
5O days ls encasbab|e upon demand o| tbe worker. Unutl|lzed |eaves can be used at any tlme by a|| emp|oyees,
subject to tbe approva| o| tbe Company's management.
Provlslons are made annua||y to cover tbe ob|lgatlon |or accumu|atlng compensated absences based on actuarla|
va|uatlon and are cbarged to pro|lt and |oss account. Tbe most recent va|uatlon was carrled out as at 3O [une
2O11 uslng tbe "Projected Unlt Credlt Metbod".
Tbe amount recognlsed ln tbe ba|ance sbeet represents tbe present va|ue o| tbe de|lned bene|lt ob|lgatlons.
Actuarla| galns and |osses are cbarged to tbe pro|lt and |oss account lmmedlate|y ln tbe perlod wben tbese occur.
2.6 Trade and otber payab|es
Plnancla| |labl|ltles are lnltla||y recognlzed at |alr va|ue p|us dlrect|y attrlbutab|e cost, l| any, and subsequent|y at
amortlzed cost uslng e||ectlve lnterest rate metbod.
Otber amounts payab|e are carrled at cost wblcb ls tbe |alr va|ue o| tbe conslderatlon to be pald ln |uture |or
goods and servlces.
2.7 Property, p|ant and equlpment
Property, p|ant and equlpment except |reebo|d |and are stated at cost |ess accumu|ated depreclatlon and any
ldentl|led lmpalrment |oss. Preebo|d |and ls stated at cost |ess any ldentl|led lmpalrment |oss. Cost ln re|atlon
to certaln property, p|ant and equlpment slgnl|les blstorlca| cost, galns and |osses trans|erred |rom equlty on
qua|l|ylng casb ||ow bedges as re|erred to ln note 2.17 and borrowlng costs as re|erred to ln note 2.2O.
Depreclatlon on a|| property, p|ant and equlpment ls cbarged to tbe pro|lt and |oss account on tbe reduclng
ba|ance metbod, except |or p|ant and macblnery wblcb ls belng depreclated uslng tbe stralgbt |lne metbod, so
as to wrlte o|| tbe blstorlca| cost o| sucb asset over lts estlmated use|u| |l|e at annua| rates mentloned ln note
14 a|ter taklng lnto account tbelr resldua| va|ues.
Depreclatlon metbods, resldua| va|ues and tbe use|u| |lves o| tbe assets are revlewed at |east at eacb |lnancla|
year end and adjusted l| lmpact on depreclatlon ls slgnl|lcant.
Depreclatlon on addltlons to property, p|ant and equlpment ls cbarged |rom tbe montb ln wblcb tbe asset ls
acqulred or caplta|lsed, wbl|e no depreclatlon ls cbarged |or tbe montb ln wblcb tbe asset ls dlsposed o||.
Tbe Company assesses at eacb ba|ance sbeet date wbetber tbere ls any lndlcatlon tbat property, p|ant and
equlpment may be lmpalred. || sucb lndlcatlon exlsts, tbe carrylng amounts o| sucb assets are revlewed to assess
wbetber tbey are recorded ln excess o| tbelr recoverab|e amount. Wbere carrylng va|ues exceed tbe respectlve
recoverab|e amount, assets are wrltten down to tbelr recoverab|e amounts and tbe resu|tlng lmpalrment |oss
ls cbarged to pro|lt and |oss current|y. Tbe recoverab|e amount ls tbe blgber o| an asset's |alr va|ue |ess costs
to se|| and va|ue ln use. Wbere an lmpalrment |oss ls recognlsed, tbe depreclatlon cbarge ls adjusted ln tbe |uture
perlods to a||ocate tbe asset's revlsed carrylng amount over lts estlmated use|u| |l|e.
Subsequent costs are lnc|uded ln tbe asset's carrylng amount or recognlsed as a separate asset, as approprlate,
on|y wben lt ls probab|e tbat |uture economlc bene|lts assoclated wltb tbe ltem wl|| ||ow to tbe company and
tbe cost o| tbe ltem can be measured re|lab|y. A|| otber repalr and malntenance costs are cbarged to pro|lt and
|oss durlng tbe perlod ln wblcb tbey are lncurred.
Tbe galn or |oss on dlsposa| or retlrement o| an asset represented by tbe dl||erence between tbe sa|e proceeds
and tbe carrylng amount o| tbe asset ls recognlsed as an lncome or expense.
2.8 Caplta| work-ln-progress
Caplta| work ln progress and stores be|d |or caplta| expendlture are stated at cost |ess any ldentl|led lmpalrment
|oss and represents expendlture lncurred on property, p|ant and equlpment durlng tbe constructlon and lnsta||atlon.
Cost a|so lnc|udes app|lcab|e borrowlng costs. Trans|ers are made to re|evant property, p|ant and equlpment
category as and wben assets are aval|ab|e |or use.
2.9 Leases
Plnance |eases
Leases wbere tbe Company bas substantla||y a|| tbe rlsks and rewards o| ownersblp are c|assl|led as |lnance |eases.
At lnceptlon, |lnance |eases are caplta|lsed at tbe |ower o| present va|ue o| mlnlmum |ease payments under tbe
|ease agreements and tbe |alr va|ue o| tbe assets, |ess accumu|ated depreclatlon and lmpalrment |oss, l| any.
Tbe re|ated renta| ob|lgatlons, net o| |lnance costs, are lnc|uded ln |labl|ltles agalnst assets subject to |lnance |ease.
Tbe |labl|ltles are c|assl|led as current and non-current dependlng upon tbe tlmlng o| tbe payment.
Mlnlmum |ease payments made under |lnance |eases are apportloned between tbe |lnance cost and tbe reductlon
o| tbe outstandlng |labl|lty. Tbe |lnance cost ls a||ocated to eacb perlod durlng tbe |ease term so as to produce a
constant perlodlc rate o| lnterest on tbe remalnlng ba|ance o| tbe |labl|lty. Contlngent |ease payments , l| any are
accounted |or by revlslng tbe mlnlmum |ease payments over tbe remalnlng term o| tbe |ease wben tbe |ease
adjustment ls con|lrmed. Tbe lnterest e|ement o| tbe renta| ls cbarged to lncome over tbe |ease term.
Assets acqulred under a |lnance |ease are depreclated over tbe estlmated use|u| |l|e o| tbe assets on reduclng
ba|ance metbod except p|ant and macblnery wblcb ls depreclated on stralgbt |lne metbod. Depreclatlon o| |eased
assets ls cbarged to tbe pro|lt and |oss account.
year-end and adjusted l| lmpact o| depreclatlon ls slgnl|lcant.
Depreclatlon on addltlons to |eased assets ls cbarged |rom tbe montb ln wblcb an asset ls acqulred wbl|e no
depreclatlon ls cbarged |or tbe montb ln wblcb tbe asset ls dlsposed o||.
Operatlng |eases
Leases wbere a slgnl|lcant portlon o| tbe rlsks and rewards o| ownersblp are retalned by tbe |essor are c|assl|led
as operatlng |eases. Payments made under operatlng |eases (net o| any lncentlves recelved |rom tbe |essor) are
cbarged to pro|lt on a stralgbt-|lne basls over tbe |ease term.
2.1O |nvestments
|nvestment ln equlty lnstruments o| subsldlary company
|nvestment ln subsldlary company ls measured at cost as per tbe requlrements o| |AS-27 "Conso|ldated and
Separate Plnancla| Statements". However, at subsequent reportlng dates, tbe Company revlews tbe carrylng
amount o| tbe lnvestment and lts recoverabl|lty to determlne wbetber tbere ls an lndlcatlon tbat sucb lnvestment
bas su||ered an lmpalrment |oss. || any sucb lndlcatlon exlsts tbe carrylng amount o| tbe lnvestment ls adjusted
to tbe extent o| lmpalrment |oss. |mpalrment |osses are recognlzed as an expense.
|nvestments ln equlty lnstruments o| assoclated companles
|nvestments ln assoclates wbere tbe company bas slgnl|lcant ln||uence are measured at cost ln tbe company's
separate |lnancla| statements.
Tbe company ls requlred to lssue conso|ldated |lnancla| statements a|ong wltb lts separate |lnancla| statements,
ln accordance wltb tbe requlrements o| |AS 27 'Conso|ldated and Separate Plnancla| Statements'. |nvestments
ln assoclated undertaklngs, ln tbe conso|ldated |lnancla| statements, are belng accounted |or uslng tbe equlty
metbod.
Aval|ab|e |or sa|e
|nvestments wblcb are lntended to be be|d |or an lnde|lnlte perlod o| tlme but may be so|d ln response to tbe
need |or |lquldlty are c|assl|led as aval|ab|e |or sa|e. Aval|ab|e |or sa|e lnvestments are recognlsed lnltla||y at |alr
va|ue p|us any dlrect|y attrlbutab|e transactlon costs. A|ter lnltla| recognltlon, tbese are stated at |alr va|ues un|ess
|alr va|ues can not be measured re|lab|y, wltb any resu|tlng galns and |osses belng taken dlrect|y to equlty untl|
tbe lnvestment ls dlsposed o|| or lmpalred. At eacb reportlng date, tbese lnvestments are remeasured at |alr
va|ue, un|ess |alr va|ue cannot be re|lab|y measured. At tbe tlme o| dlsposa|, tbe respectlve surp|us or de|lclt ls
trans|erred to pro|lt and |oss current|y. Palr va|ue o| quoted lnvestments ls tbelr bld prlce on Karacbl Stock
Lxcbange at tbe ba|ance sbeet date. Unquoted lnvestments, wbere actlve market does not exlst, are carrled at
cost as lt ls not posslb|e to app|y any otber va|uatlon metbodo|ogy.
|nvestments lntended to be be|d |or |ess tban twe|ve montbs |rom tbe ba|ance sbeet date or to be so|d to ralse
operatlng caplta|, are lnc|uded ln current assets, a|| otber lnvestments are c|assl|led as non-current. Management
determlnes tbe approprlate c|assl|lcatlon o| lts lnvestments at tbe tlme o| tbe purcbase and re-eva|uates sucb
deslgnatlon on a regu|ar basls.
A|| purcbases and sa|es o| lnvestments are recognlsed on tbe trade date wblcb ls tbe date tbat tbe company
commlts to purcbase or se|| tbe lnvestment.
At subsequent reportlng dates, tbe company revlews tbe carrylng amounts o| tbe lnvestments to assess wbetber
tbere ls any lndlcatlon tbat sucb lnvestments bave su||ered an lmpalrment |oss. || any sucb lndlcatlon exlsts, tbe
recoverab|e amount ls estlmated ln order to determlne tbe extent o| tbe lmpalrment |oss, l| any. |mpalrment
|osses are recognlsed as expense. Wbere an lmpalrment |oss subsequent|y reverses, tbe carrylng amount o| tbe
lnvestment ls lncreased to tbe revlsed recoverab|e amount.
2.11 Stores and spares
Usab|e stores and spares are va|ued prlnclpa||y at movlng average cost, wbl|e ltems consldered obso|ete are
carrled at nl| va|ue. |tems ln translt are va|ued at cost comprlslng lnvolce va|ue p|us otber cbarges pald tbereon.
2.12 Stock-ln-trade
Stock o| raw materla|s, except |or tbose ln translt, work ln process and |lnlsbed goods are va|ued prlnclpa||y at
tbe |ower o| average cost and net rea|lsab|e va|ue. Stock o| packlng materla| ls va|ued prlnclpa||y at movlng
average cost. Cost o| work ln process and |lnlsbed goods comprlses cost o| dlrect materla|s, |abour and approprlate
manu|acturlng overbeads.
Materla|s ln translt are stated at cost comprlslng lnvolce va|ue p|us otber cbarges pald tbereon.
Net rea|lsab|e va|ue slgnl|les tbe estlmated se||lng prlce ln tbe ordlnary course o| buslness |ess costs necessary
to be lncurred ln order to make a sa|e.
2.13 Plnancla| assets and |labl|ltles
Plnancla| assets and |labl|ltles are recognlzed wben tbe Company becomes a party to tbe contractua| provlslons
o| tbe lnstrument. A|| |lnancla| assets and |labl|ltles are lnltla||y measured at cost, wblcb ls tbe |alr va|ue o| tbe
conslderatlon glven and recelved respectlve|y. Tbese |lnancla| assets and |labl|ltles are subsequent|y measured
at |alr va|ue, amortlsed cost or cost, as tbe case may be. Tbe partlcu|ar measurement metbods adopted are
dlsc|osed ln tbe lndlvldua| po|lcy statements assoclated wltb eacb ltem.
2.14 O||settlng o| |lnancla| assets and |lnancla| |labl|ltles
A |lnancla| asset and a |lnancla| |labl|lty ls o||set and tbe net amount ls reported ln tbe ba|ance sbeet l| tbe Company
bas a |ega||y en|orceab|e rlgbt to set-o|| tbe recognlzed amounts and lntends eltber to sett|e on a net basls or
to rea|lze tbe asset and sett|e tbe |labl|lty slmu|taneous|y.
2.15 Trade debts
Trade debts are carrled at orlglna| lnvolce amount |ess an estlmate made |or doubt|u| debts based on a revlew
o| a|| outstandlng amounts at tbe year end. 8ad debts are wrltten o|| wben ldentl|led.
2.16 Casb and casb equlva|ents
Casb and casb equlva|ents are carrled ln tbe ba|ance sbeet at cost. Por tbe purpose o| casb ||ow statement, casb
and casb equlva|ents comprlse casb ln band, demand deposlts, otber sbort term blgb|y |lquld lnvestments tbat
are readl|y convertlb|e to known amounts o| casb and wblcb are subject to an lnslgnl|lcant rlsk o| cbange ln va|ue
and sbort term borrowlngs. |n tbe ba|ance sbeet, sbort term borrowlngs are lnc|uded ln current |labl|ltles.
2.17 Derlvatlve |lnancla| lnstruments and bedglng actlvltles
Tbese are lnltla||y recorded at |alr va|ue on tbe date on wblcb a derlvatlve contract ls entered lnto and subsequent|y
measured at |alr va|ue. Tbe metbod o| recognlslng tbe resu|tlng galn or |oss depends on wbetber tbe derlvatlve
ls deslgnated as a bedglng lnstrument, and l| so, tbe nature o| tbe ltem belng bedged. Tbe Company deslgnates
certaln derlvatlves as casb ||ow bedge.
Tbe Company documents at tbe lnceptlon o| tbe transactlon tbe re|atlonsblp between tbe bedglng lnstruments
and bedged ltems, as we|| as lts rlsk management objectlve and strategy |or undertaklng varlous bedge transactlons.
Tbe Company a|so documents lts assessment, botb at bedge lnceptlon and on an ongolng basls, o| wbetber tbe
derlvatlves tbat are used ln bedglng transactlons are blgb|y e||ectlve ln o||settlng cbanges ln casb ||ow o| bedged
ltems. Derlvatlves are carrled as asset wben tbe |alr va|ue ls posltlve and |labl|lty wben tbe |alr va|ue ls negatlve.
Tbe e||ectlve portlon o| cbanges ln tbe |alr va|ue o| derlvatlves tbat are deslgnated and qua|l|y as casb ||ow bedge
are recognlsed ln equlty. Tbe galn or |oss re|atlng to tbe lne||ectlve portlon ls recognlsed lmmedlate|y ln tbe pro|lt
and |oss account.
Amounts accumu|ated ln equlty are recognlsed ln pro|lt and |oss account ln tbe perlods wben tbe bedged ltem
wl|| a||ect pro|lt or |oss. However, wben tbe |orecast bedged transactlon resu|ts ln tbe recognltlon o| a non-
|lnancla| asset or a |labl|lty, tbe galns and |osses prevlous|y de|erred ln equlty are trans|erred |rom equlty and
lnc|uded ln tbe lnltla| measurement o| tbe cost o| tbe asset or |labl|lty.
Any galns or |osses arlslng |rom cbange ln |alr va|ue derlvatlves tbat do not qua|l|y |or bedge accountlng are taken
dlrect|y to pro|lt and |oss account.
2.18 Porelgn currencles
A|| monetary assets and |labl|ltles ln |orelgn currencles are trans|ated lnto rupees at excbange rates preval|lng
at tbe ba|ance sbeet date. Transactlons ln |orelgn currencles are trans|ated lnto rupees at excbange rates preval|lng
at tbe date o| transactlon. Non-monetary assets and |labl|ltles tbat are measured ln terms o| blstorlca| cost ln a
|orelgn currency are trans|ated lnto rupees at excbange rates preval|lng at tbe date o| transactlon. Non-monetary
assets and |labl|ltles denomlnated ln |orelgn currency tbat are stated at |alr va|ue are trans|ated lnto rupees at
excbange rates preval|lng at tbe date wben |alr va|ues are determlned. Lxcbange galns and |osses are lnc|uded
ln tbe lncome current|y.
2.19 Provlslons
Provlslons are recognlzed wben tbe Company bas a |ega| or constructlve ob|lgatlon as a resu|t o| past events
and lt ls probab|e tbat an out||ow o| resources embodylng economlc bene|lts wl|| be requlred to sett|e tbe
ob|lgatlon and a re|lab|e estlmate o| tbe amount can be made. However, provlslons are revlewed at eacb ba|ance
sbeet date and adjusted to re||ect current best estlmate.
2.2O 8orrowlng costs
Mark-up, lnterest and otber cbarges on borrowlngs are caplta|lsed upto tbe date o| commlsslonlng o| tbe re|ated
property, p|ant and equlpment acqulred out o| tbe proceeds o| sucb borrowlngs. A|| otber mark-up, lnterest
and otber cbarges are cbarged to pro|lt ln wblcb tbey are lncurred.
2.21 Pevenue recognltlon
Pevenue represents tbe |alr va|ue o| tbe conslderatlon recelved or recelvab|e |or goods so|d, net o| dlscounts
and sa|es tax. Pevenue ls recognlzed wben lt ls probab|e tbat tbe economlc bene|lts assoclated wltb tbe transactlon
wl|| ||ow to tbe Company and tbe amount o| revenue, and tbe assoclated cost lncurred, or to be lncurred, can
be measured re|lab|y.
Pevenue |rom sa|e o| goods ls recognlsed wben tbe slgnl|lcant rlsk and rewards o| owner sblp o| tbe goods are
trans|erred to tbe buyer l.e. on tbe dlspatcb o| goods to tbe customers. Peturn on deposlts ls accrued on a tlme
proportlon basls by re|erence to tbe prlnclpa| outstandlng and tbe app|lcab|e rate o| return. Dlvldend lncome
on equlty lnvestments ls recognlsed as lncome wben tbe rlgbt o| recelpt ls estab|lsbed.
2.22 Dlvldend
Dlvldend dlstrlbutlon to tbe Company's sbarebo|ders ls recognlsed as a |labl|lty ln tbe perlod ln wblcb tbe dlvldends
are approved.
2.23 Standards, lnterpretatlons and amendments to pub|lsbed approved |nternatlona| Plnancla| Peportlng Standards
tbat are not yet e||ectlve
Tbe |o||owlng new standards and amendments to standards are not e||ectlve |or tbe year ended 3O [une 2O11,
and bave not been app|led ln preparlng tbese |lnancla| statments.
- |mprovements to |PPSs 2O1O - |PPS 7 Plnancla| |nstruments: Dlsc|osures (e||ectlve |or annua| perlods beglnnlng
on or a|ter 1 [anuary 2O11) . Tbe amendments add an exp|lclt statement tbat qua|ltatlve dlsc|osure sbou|d be
made ln tbe contact o| tbe quantltatlve dlsc|osures to better enab|e users to eva|uate an entlty's exposure to
rlsks arlslng |rom |lnancla| lnstruments. |n addltlon, tbe |AS8 amended and removed exlstlng dlsc|osure requlrements.
- |AS 24 Pe|ated Party Dlsc|osures (revlsed 2OO9) (e||ectlve |or annua| perlods beglnnlng on or a|ter 1 [anuary
2O11) Tbe revlsed |AS 24 amends tbe de|lnltlon o| a re|ated party and modl|les certaln re|ated party dlsc|osure
requlrements |or government-re|ated entltles.
- Prepayments o| a Mlnlmum Pundlng Pequlrement (Amendments to |PP|C 14) (e||ectlve |or annua| perlods
beglnnlng on or a|ter 1 [anuary 2O11). Tbese amendments remove unlntended consequences arlslng |rom tbe
treatment o| prepayments wbere tbere ls a mlnlmum |undlng requlrement. Tbese amendments resu|t ln
prepayments o| contrlbutlons ln certaln clrcumstances belng recognlsed as an asset ratber tban an expense.
- |mprovements to |PPSs 2O1O - |AS 1 Presentatlon o| Plnancla| Statements (e||ectlve |or annua| perlods beglnnlng
on or a|ter 1 [anuary 2O11). Tbe amendments c|arl|y tbat dlsaggregatlon o| cbanges ln eacb component o| equlty
arlslng |rom transactlons recognlsed ln otber comprebenslve lncome a|so ls requlred to be presented, but may
be presented eltber ln tbe statement o| cbanges ln equlty or ln tbe notes.
- |mprovements to |PPSs 2O1O - |PP|C 13 Customer Loya|ty Programmes (e||ectlve |or annua| perlods beglnnlng on
or a|ter 1 [anuary 2O11). Tbe amendments c|arl|y tbat tbe |alr va|ue o| award credlts takes lnto account tbe amount
o| dlscounts or lncentlves tbat otberwlse wou|d be o||ered to customers tbat bave not earned tbe award credlts.
Apart |rom above certaln otber standards, amendments to pub|lsbed standards and lnterpretatlons o| accountlng
standards became e||ectlve |or accountlng perlods beglnnlng on or a|ter 1 [anuary 2O11, bowever, tbey do not
a||ect tbe Company's |lnancla| statements.
3 lssued, subscribed and paid up capita|
3.1 |ssued, subscrlbed and pald up caplta|
2011 2010 2011 2010
----(Number o| sbares)---- ----(Pupees ln tbousand)----
343,512,030 27O,492,177 Ordlnary sbares o| Ps.1O eacb |u||y pald ln casb 3,435,121 2,7O4,922
20,000,000 2O,OOO,OOO Ordlnary sbares o| Ps. 1O eacb lssued |or
conslderatlon otber tban casb 200,000 2OO,OOO
74,607,089 74,6O7,O89 Ordlnary sbares o| Ps. 1O eacb lssued as |u||y
pald bonus sbares 746,071 746,O71
438,119,119 365,O99,266 4,381,192 3,65O,993
137,574,2O1 (2O1O: 114,645,168) ordlnary sbares o| tbe Company are be|d by Nlsbat Ml||s Llmlted, an assoclated
concern as at 3O [une 2O11. |n addltlon 1,4O7,944 (2O1O: 1,4O7,944) ordlnary sbares are be|d by tbe Adamjee |nsurance
Company Llmlted, a re|ated party as at 3O [une 2O11.
2011 2010
----(Number o| sbares)----
3.2 Peconcl|latlon o| number o| sbares
Number o| sbares as at O1 [u|y 365,099,266 3O4,249,388
|ssued durlng tbe year |or casb 73,019,853 6O,849,878
Number o| sbares as at 3O [une 438,119,119 365,O99,266
2011 2010
4 Reserves
Movement ln and composltlon o| reserves ls as |o||ows:
Caplta| Peserves
5hare premium 4.1
At tbe beglnnlng o| tbe year 3,826,965 3,218,466
Addltlons durlng tbe year 730,199 6O8,499
At tbe end o| tbe year 4,557,164 3,826,965
Fair va|ue reserves 4.2
Palr va|ue adjustments durlng tbe year 2,066,706 4,15O,758
At tbe end o| tbe year 14,974,881 12,9O8,175
Capita| redemption reserve fund 4.3 353,510 353,51O
19,885,555 17,O88,65O
Pevenue reserves
Genera| reserves
At tbe beglnnlng o| tbe year 5,071,827 5,O71,827
Trans|er |rom pro|lt and |oss account - -
At tbe end o| tbe year 5,071,827 5,O71,827
24,957,382 22,16O,477
4.1 Tbls reserve can be utl|lsed by tbe Company on|y |or tbe purposes specl|led ln sectlon 83(2) o| tbe Companles
Ordlnance, 1984.
4.2 As re|erred to ln note 2.11 tbls represents tbe unrea|lsed galn on remeasurement o| lnvestments at |alr va|ue
and ls not aval|ab|e |or dlstrlbutlon. Tbls amount wl|| be trans|erred to pro|lt and |oss account on rea|lsatlon.
4.3 Tbls represents |und created |or redemptlon o| pre|erence sbares. |n accordance wltb tbe terms o| lssue o|
pre|erence sbare, to ensure tlme|y payments, tbe Company was requlred to malntaln a redemptlon |und wltb
respect to pre|erence sbares. Tbe Company bad created a redemptlon |und and approprlated Ps. 7.4 ml||lon
eacb montb |rom tbe pro|lt and |oss account ln order to ensure tbat |und ba|ance at redemptlon date ls equa|
to tbe prlnclpa| amount o| tbe pre|erence sbares. Tbe pre|erence sbares bave been redeemed durlng tbe year
ended 3O [une 2OO7.
2011 2010
5 Long term finances
Tbese are composed o|:
- Long term |oans 5.1 & 5.2 6,067,627 7,222,988
- Loan under musbarlka arrangement 5.3 807,500 -
6,875,127 7,222,988
Less: Current portlon sbown under current |labl|ltles 12 1,994,548 2,133,481
4,880,579 5,O89,5O7
5.1 Long term |oans
Long term |lnances utl|lzed under mark up arrangements |rom banklng companles are composed o|:
Rate of
Loan Lender 2011 2010 interest Outstanding lnterest
{Rupees in thousand) per annum insta||ments payab|e
1 A||led 8ank Llmlted - 26O,OOO 8ase rate + O.65% Tbe |oan bas been Seml annua|
|u||y repald durlng
tbe year
2 Hablb 8ank Llmlted 90,909 272,727 8ase rate + 1.1% 1 lnsta||ment endlng Quarter|y
29 September 2O11
3 Natlona| 8ank o| Paklstan 100,000 3OO,OOO 8ase rate + O.65% 1 lnsta||ment endlng Seml annua|
16 November 2O11
4 Hablb 8ank Llmlted 100,000 3OO,OOO 8ase rate + 1.25% 1 seml-annua| lnsta||ment Quarter|y
endlng on 3O December
2O11
5 Unlted 8ank Llmlted 300,000 5OO,OOO 8ase rate + 1.1O% 3 equa| seml-annua| Seml annua|
lnsta||ment endlng
3O September 2O12
6 8ank A||a|ab Llmlted 345,818 461,O91 8ase rate + 1.OO% 6 equa| seml-annua| Quarter|y
lnsta||ment endlng
16 Marcb 2O14
7 Standard Cbartered bank 800,000 1,OOO,OOO 8ase rate + 1.5% 4 unequa| quarter|y Quarter|y
lnsta||ment endlng
3O [une 2O12
8 8ank o| Punjab 250,000 3OO,OOO 8ase rate + 1.5% 15 equa| quarter|y Quarter|y
lnsta||ments endlng
31 Marcb 2O15
9 A||led 8ank Llmlted 750,000 75O,OOO 8ase rate + 1.5% 2O step-up quarter|y Quarter|y
lnsta||ments endlng
3O [une 2O16
1O A||led 8ank Llmlted 950,000 1,OOO,OOO 8ase rate + 1.5% 18 step-up quarter|y Quarter|y
lnsta||ments endlng
3O November 2O15
11 Askarl 8ank Llmlted 487,500 - 8ase rate + 1.3% 19 step-up quarter|y Qurater|y
lnsta||ments endlng
ln [une 2O16
12 Paysa| 8ank Llmlted 500,000 - 8ase rate + 1.3% 8 seml annua| unequa| Quarter|y
lnsta||ments endlng
31 December 2O16
Foreign currency-unsecured
13 Luropean |nvestment 8ank 1,393,400 2,O79,17O 8ase rate + O.O63% 4 equa| seml-annua| Quarter|y
US$ 16.193 ml||lon lnsta||ments endlng on
(2O1O : US$ 24.289 ml||lon) 29 Marcb 2O13
6,067,627 7,222,988
8ase rate
Average ask rate o| slx-montb and tbree-montb Karacbl |nter 8ank O||er Pate ("K|8OP") to be set |or eacb mark-up perlod.
8ase rate
Average ask rate o| tbree-montb London |nter 8ank O||er Pate ("L|8OP") to be set |or eacb mark-up perlod.
5.2 Tbese |oans are secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe
Company upto Ps. 13,53O ml||lon (2O1O: Ps. 16,547 ml||lon).
5.3 Tbls |lnance |acl|lty ls obtalned |rom Meezan 8ank Llmlted under Musbarlka arrangement. Tbe aggregate sanctlon
|lmlt ls Ps. 85O ml||lon wblcb ls repayab|e ln 2O unequa| quarter|y lnsta||ments startlng |rom 3O Marcb 2O11. Tbe
|acl|lty ls secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe Company ln
|avour o| tbe 8ank.
5.1 Long term |oans
Rate of
|u||y repald durlng
tbe year
29 September 2O11
16 November 2O11
endlng on 3O December
2O11
lnsta||ment endlng
3O September 2O12
lnsta||ment endlng
16 Marcb 2O14
lnsta||ment endlng
3O [une 2O12
lnsta||ments endlng
31 Marcb 2O15
lnsta||ments endlng
3O [une 2O16
lnsta||ments endlng
3O November 2O15
lnsta||ments endlng
ln [une 2O16
lnsta||ments endlng
31 December 2O16
US$ 16.193 ml||lon lnsta||ments endlng on
6,067,627 7,222,988
8ase rate
8ase rate
5.2 Tbese |oans are secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe
Company upto Ps. 13,53O ml||lon (2O1O: Ps. 16,547 ml||lon).
|acl|lty ls secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe Company ln
|avour o| tbe 8ank.
2011 2010
----(Pupees ln tbousand)----
6 Long term deposits
Customers 33,252 32,167
Otbers 37,641 48,971
70,893 81,138
Tbese represent lnterest |ree securlty deposlts |rom stocklsts and supp|lers and are repayab|e on cance||atlon/wltbdrawa|
o| tbe dea|ersblp or on cessatlon o| buslness wltb tbe company respectlve|y.
2011 2010
7 Retirement and other benefits
Sta|| gratulty 7.1 87,673 6O,678
Leave encasbment 7.2 51,540 43,351
139,213 1O4,O29
7.1 Sta|| gratulty - net
Tbe amounts recognlsed ln tbe ba|ance sbeet are as |o||ows :
Present va|ue o| de|lned bene|lt ob|lgatlon 127,910 75,264
Palr va|ue o| p|an assets {332) (394)
8ene|lts payab|e 25 323
Unrecognlsed actuarla| |osses {39,930) (14,515)
Llabl|lty as at 3O [une 87,673 6O,678
7.1.1 Cbange ln present va|ue o| de|lned bene|lt ob|lgatlon
Llabl|lty as at O1 [u|y 60,678 4O,537
Cbarge |or tbe year lnc|udlng caplta|lzed durlng tbe year 30,727 23,O86
Contrlbutlons p|us bene|lt payments made dlrect|y
by tbe Company durlng tbe year {3,732) (2,945)
7.1.2 Movement ln |labl|lty |or de|lned bene|lt ob|lgatlon
Present va|ue o| de|lned bene|lt ob|lgatlon as at O1 [u|y 75,264 56,O4O
Current servlce cost 21,409 15,583
|nterest cost 8,784 6,725
8ene|lts due but not pald {25) (323)
8ene|lts pald durlng tbe year {3,476) (2,715)
Actuarla| |oss/(galn) on present va|ue o| de|lned bene|lt ob|lgatlon 25,954 (46)
Present va|ue o| de|lned bene|lt ob|lgatlon as at 3O [une 127,910 75,264
7.1.3 Movement ln |alr va|ue o| p|an assets
Palr va|ue o| p|an assets as at O1 [u|y 394 274
Lxpected return on p|an assets 4 33
Contrlbutlons durlng tbe year 3,732 2,945
8ene|lts pald durlng tbe year {3,799) (2,83O)
Actuarla| galn/(|oss) on p|an assets 1 (28)
Palr va|ue o| p|an assets as at 3O [une 332 394
2011 2010
7.1.4 Actua| return on p|an assets
Actuarla| galn/(|oss) on p|an assets 1 (28)
5 5
7.1.5 P|an assets conslst o| tbe |o||owlng :
Casb and otber deposlts 332 394
7.1.6 Movement ln unrecognlsed actuarla| |osses
Un recognlsed actuarla| |osses as at O1 [u|y {14,515) (15,344)
Actuarla| |osses arlslng durlng tbe year {25,954) 18
Actuarla| |osses cbarged to pro|lt durlng tbe year 538 811
Un recognlsed actuarla| |osses as at 3O [une {39,931) (14,515)
7.1.7 Cbarge |or tbe year (lnc|udlng caplta|lzed durlng tbe year)
Lxpected return on p|an assets {4) (33)
30,727 23,O86
2011 2010 2009 2008 2007
7.1.8 Hlstorlca| ln|ormatlon
Present va|ue o| de|lned
bene|lt ob|lgatlon 127,91O 75,264 56,O4O 33,122 22,741
Palr va|ue o| p|an assets (332) (394) (274) (1) (36)
De|lclt ln tbe p|an 127,578 74,87O 55,766 33,121 22,7O5
Lxperlence adjustment
arlslng on p|an |labl|ltles 25,954 (46) 8,85O 1,414 2,859
arlslng on p|an assets 1 (28) - (39) (2)
7.1.9 Assumptlons used |or va|uatlon o| tbe de|lned bene|lt scbeme |or management and non-management sta|| are
as under:
2011 2010
Dlscount rate Per annum 14 % 12 %
Lxpected rate o| lncrease ln sa|ary Per annum 14 % 11 %
Lxpected rate o| return on p|an assets Per annum 1 % 12 %
Average expected remalnlng worklng |l|e
tlme o| emp|oyee Number o| years 13 12
7.1.1O Tbe Company expects to pay Ps. 38.21 ml||lon ln contrlbutlons to de|lned bene|lt p|an ln 2O12.
2011 2010
7.2 Leave encasbment
Openlng ba|ance 43,351 38,O85
Lxpenses recognlzed 25,466 15,O23
Payments made {10,259) (3,955)
58,558 49,153
Payab|e wltbln one year {7,018) (5,8O2)
C|oslng ba|ance 51,540 43,351
Present va|ue o| de|lned bene|lt ob|lgatlon as at O1 [u|y 43,351 38,O85
|nterest cost 4,587 4,57O
Actuarla| |oss on present va|ue o| de|lned bene|lt ob|lgatlon 8,115 587
Actuarla| |osses cbarged to pro|lt durlng tbe year 8,115 587
25,466 15,O23
2011 2010 2009 2008 2007
7.2.3 Hlstorlca| |n|ormatlon
bene|lt ob|lgatlon 51,540 49,153 42,553 31,O62 25,839
arlslng on p|an |labl|ltles 8,115 587 5,969 3,O1O 2,168
7.2.4 Assumptlons used |or va|uatlon o| tbe accumu|atlng compensated absences are as under:
2011 2010
Dlscount rate Per annum 14 % 12 %
Lxpected rate o| lncrease ln sa|ary Per annum 14% 11%
Average expected remalnlng worklng
|l|e tlme o| emp|oyees Number o| years 13 12
Lxpected wltbdrawa| and ear|y retlrement rate 8ased on experlence
O||lcers Workers
2011 2O1O 2011 2O1O
(days) (days) (days) (days)
Average number o| |eaves
- Utl|lzed per annum 16.00 14.OO 18.00 19.OO
- Lncasbed per annum 6.00 6.OO 6.00 6.OO
- Utl|lzed per annum ln excess
o| accrued |eave o| 3O days 1.00 1.OO 2.00 2.OO
- Lncasbed per annum ln excess
o| accrued |eave o| 3O days 0.25 O.25 1.00 1.OO
2011 2010
8 Deferred taxation
Tbe |labl|lty |or de|erred taxatlon comprlses temporary dl||erences
re|atlng to:
De|erred tax |labl|lty
Acce|erated tax depreclatlon 4,535,764 4,288,O29
De|erred tax assets
Provlslon |or retlrement and otber bene|lts {36,200) (23,64O)
Unabsorbed tax credlts {2,791,678) (2,798,429)
1,707,886 1,465,96O
9 Trade and other payab|es
Trade credltors 211,457 376,3O7
|n|rastructure cess 13.1.5 89,164 -
Customers' ba|ances 686,990 552,463
Accrued |labl|ltles 279,944 3O7,152
Workers' Pro|lt Partlclpatlon Pund 9.1 31,642 2O,251
Workers We||are Pund 29.2 - 77,32O
Sa|es Tax payab|e - 32,85O
Pedera| Lxclse Duty payab|e 169,864 221,636
Specla| Lxclse Duty payab|e 13,363 -
Wltbbo|dlng tax payab|e 5,851 6,564
Petentlon money 12,767 2O,485
Unc|almed dlvldend 4,870 4,869
Advances agalnst sa|e o| scrap 936 1,O3O
Advances agalnst sa|e o| |lxed asset 9.2 63,110 -
Pedeemab|e pre|erence sbares (non-votlng) - unsecured 125 127
Otber payab|es 73,962 58,695
1,644,045 1,679,749
9.1 Workers' Pro|lt Partlclpatlon Pund
8a|ance as at O1 [u|y 20,251 41,724
Provlslon |or tbe year 28 31,642 2O,251
|nterest |or tbe year 3O 1,090 2,O51
52,983 64,O26
Less: Payments durlng tbe year 21,341 43,775
8a|ance as at 3O [une 31,642 2O,251
9.2 Tbls amount represents advance agalnst sa|e o| a macblnery.
2011 2010
10 Accrued markup
Long term |lnances 154,960 185,223
Sbort term borrowlng - secured 129,467 161,118
Pre|erred dlvldend on redeemab|e pre|erence sbares 84 84
284,511 346,425
11 5hort term borrowing - secured
Sbort term runnlng |lnances 11.1 4,046,928 7,9O6,872
|mport |lnances 11.2 1,157,914 1,678,77O
Lxport re|lnance 11.3 3,487,140 -
8,691,982 9,585,642
11.1 Sbort term runnlng |lnances
Sbort term runnlng |lnances aval|ab|e |rom a consortlum o| commercla| banks under mark up arrangements
amount to Ps. 9,832 ml||lon (2O1O: Ps. 9,82O ml||lon). Tbe rates o| mark up range |rom 12.24% to 13.79%
(2O1O: 12.24% to 16.26%) or part tbereo| on tbe ba|ance outstandlng. Tbese are secured by |lrst reglstered
cbarge on a|| present and |uture current assets o| tbe company wberever sltuated lnc|udlng stores and spares,
stock ln trade, book debts, lnvestments, recelvab|es and p|edge o| 1O.75 ml||lon (2O1O: 1O.75 ml||lon) sbares o|
MC8 8ank Llmlted, 1O ml||lon (2O1O: 1O ml||lon) sbares o| Nlsbat Ml||s Llmlted and 2.3 ml||lon (2O1O : 2.3 ml||lon)
sbares o| Adamjee |nsurance Company Llmlted.
11.2 |mport |lnances
Tbe Company bas obtalned lmport |lnance |acl|ltles aggregatlng to Ps. 4,O53 ml||lon (2O1O: Ps. 3,737 ml||lon)
|rom commercla| banks. Tbe rates o| mark-up range |rom 2.26% to 15% (2O1O: 3.11% to 15.98%). Tbe
aggregate lmport |lnances are secured by a reglstered cbarge on a|| present and |uture current assets o| tbe
Company wberever sltuated lnc|udlng stores and spares, stock ln trade, book debts, lnvestments and recelvab|es.
O| tbe aggregate |acl|lty o| Ps. 8,43O ml||lon (2O1O: Ps. 7,O77.42 ml||lon) |or openlng |etters o| credlt and Ps.
1,61O ml||lon (2O1O: Ps. 1,6O1.4 ml||lon) |or guarantees, tbe amount utl|lzed as at 3O [une 2O11 was Ps. 1,138
ml||lon (2O1O: Ps. 1458.95 ml||lon) and Ps. 1,112 ml||lon (2O1O: Ps. 989.84 ml||lon) respectlve|y. Tbe aggregate
|acl|ltles |or guarantees are secured by a reglstered cbarge on current assets o| tbe Company. O| tbe |acl|lty |or
guarantees, Ps. 14.48 ml||lon (2O1O: Ps. 14.48 ml||lon) ls secured by a |len over bank deposlts as re|erred to ln
note 23.2.
11.3 Lxport re|lnance
Tbls represents LPP |oans obtalned |rom varlous commercla| banks, wblcb carry mark-up at 9.5% to 11% per
annum (2O1O: 7.5%). Tbese |oans are obtalned |or a perlod o| 18O days and are agalnst parl passu bypotbecatlon
cbarge over current assets o| tbe Company.
2011 2010
12 Current portion of non-current |iabi|ities
Long term |lnances 5 1,994,548 2,133,481
Petlrement and otber bene|lts 7.2 7,018 5,8O2
2,001,566 2,139,283
13 Contingencies and commitments
13.1 Contlngencles
13.1.1 Tbe |ncome Tax O||lcer, wbl|e |ramlng tbe assessments |or tbe assessment years 1984-85 to 199O-91, bas taxed
tbe lncome o| tbe Company on account o| lnterest on deposlts and sa|e o| scrap etc. Tbe Appe||ate Trlbuna| on
appea| |l|ed by tbe Company lssued an order ln |avour o| tbe Company |or tbe assessment years 1984-85 to
199O-91. Tbe |ncome Tax Department |l|ed re|erence be|ore tbe Labore Hlgb Court. Pendlng |lna| outcome o|
sucb re|erence, no adjustment bas been made ln tbese |lnancla| statements |or tbe re|le| granted by tbe Appe||ate
Trlbuna| aggregatlng Ps 35.O9O ml||lon.
13.1.2 Durlng tbe perlod 1994 to 1996, tbe Company lmported p|ant and macblnery re|atlng to expanslon unlt, |or
wblcb exemptlon was c|almed under varlous SPOs |rom tbe |evy o| custom duty and otber dutles lnc|udlng sa|es
tax. As per tbe provlslons o| SPO 484 (|)/92, 978 (|)/95 and 569 (|)/95, tbe exemptlon |rom tbe statutory duty
wou|d be aval|ab|e on|y l| tbe sald p|ant and macblnery was not manu|actured |oca||y. However, tbe Custom
Autborltles rejected tbe c|alm o| tbe Company by argulng tbat tbe sald macblnery was on tbe |lst o| |oca||y
manu|actured macblnery, pub|lsbed by tbe Pedera| 8oard o| Pevenue. Consequent|y, tbe Company appea|ed
be|ore tbe Labore Hlgb Court, Mu|tan 8encb, wblcb a||owed tbe Company to re|ease tbe macblnery on |urnlsblng
lndemnlty bonds wltb tbe Custom Autborltles.
Co||ector o| Customs and Centra| Lxclse, Mu|tan bas passed an order dated November 26, 1999, agalnst tbe
Company on tbe grounds tbat tbe sald macblnery was belng manu|actured |oca||y durlng tbe tlme wben lt was
lmported. Tbe tota| demand as ralsed agalnst tbe Company amounts to Ps. 715.372 out o| wblcb Ps 2OO.645
ml||lon bas been pald.
An appea| agalnst tbe order was |l|ed wltb tbe Labore Hlgb Court, wblcb bas been declded ln |avour o| tbe
Company. However, tbe Custom Autborltles bave |l|ed an appea| wltb tbe Supreme Court o| Paklstan agalnst
tbe orders o| tbe Labore Hlgb Court. Hence, no provlslon |or tbe ba|ance amount o| Ps 514.727 ml||lon bas been
made ln tbe |lnancla| statements as accordlng to tbe management o| tbe company tbere are merltorlous grounds
tbat tbe u|tlmate declslon wou|d be ln lts |avour.
13.1.3 Tbe Competltlon Commlsslon o| Paklstan (tbe CCP) took suo moto actlon under Competltlon Ordlnance, 2OO7
and lssued Sbow Cause Notlce on 28 October 2OO8 |or lncrease ln prlces o| cement across tbe country. Tbe
slml|ar notlces were a|so lssued to A|| Paklstan Cement Manu|acturers Assoclatlon (APCMA) and lts member
cement manu|acturers. Tbe Company bas |l|ed a Wrlt Petltlon ln tbe Labore Hlgb Court. Tbe Labore Hlgb Court,
vlde lts order dated 24 August 2OO9 a||owed tbe CCP to lssue lts |lna| order. Tbe CCP accordlng|y passed an
order on 28 August 2OO9 and lmposed a pena|ty o| Ps. 933 ml||lon on tbe Company. Tbe Labore Hlgb Court vlde
lts order dated 31 August 2OO9 restralned tbe CCP |rom en|orclng lts order agalnst tbe Company |or tbe tlme belng.
Tbe vlres o| tbe Competltlon Commlsslon o| Paklstan, 2OO7 bave been cba||enged by a |arge number o| Petltloners
and a|| bave been advlsed by tbelr |ega| counse|s tbat prlma |acle tbe Competltlon Commlsslon Ordlnance, 2OO7
ls u|tra vlres o| tbe Constltutlon. A |arge number o| grounds bave been ralsed by tbese Petltloners and tbe matter
ls current|y belng adjudlcated by tbe Labore Hlgb Court, tbe Slndb Hlgb Court and tbe Supreme Court o| Paklstan.
|n a|| tbese cases stay orders bave been granted by tbe Courts. 8ased on tbe |ega| oplnlon, tbe management ls
con|ldent tbat tbe Company bas a good case and tbere are reasonab|e cbances o| success ln tbe pendlng Petltlon
ln tbe Supreme Court o| Paklstan.
13.1.4 Tbe matter re|atlng to lnterpretatlon o| provlslons o| sectlon 4(2) o| tbe repea|ed Centra| Lxclse Act, 1944 (1944
Act) bas now attalned |lna|lty a|ter bavlng been adjudlcated by tbe bonourab|e Supreme Court o| Paklstan tbrougb
lts judgement dated 27 [anuary 2OO9 (upbo|dlng lts prevlous judgement dated 15 Pebruary 2OO7). Tbe |ongstandlng
controversy between tbe revenue department and tbe tax payers re|ated prlmarl|y to |lner lnterpretatlon o| tbe
provlslons o| sectlon 4(2) o| tbe 1944 Act wbereln tbe department bad a vlew tbat exclse duty sba|| be lnc|uded
as a component |or determlnatlon o| tbe va|ue (retal| prlce) |or |evylng exclse duty. Tbe departmenta| vlew, belng
agalnst tbe splrlt o| |aw, was cba||enged by tbe taxpayers ln appea|s be|ore tbe bonourab|e Hlgb Courts o| tbe
country wblcb, du|y appreclatlng tbe contentlons o| tbe taxpayers, overturned tbe departmenta| vlew and
succeeded tbe appea|s.
Now slnce tbe controversy bas attalned |lna|lty up to tbe blgbest appe||ate |eve|, tbe Company bas lnltlated tbe
process o| c|almlng re|und o| excess exclse duty pald by lt durlng tbe perlods |rom 1994 to 1999 wblcb aggregates
to Ps 1,115.145 ml||lon. Tbe amount o| re|und, bowever, sba|| be lncorporated ln tbe books o| accounts once lt
ls rea|lsed by tbe Company.
13.1.5 Tbe Company, consequent to tbe order passed by tbe Supreme Court o| Paklstan agalnst tbe declslon o| tbe
Slndb Hlgb Court ln tbe matter o| ln|rastructure cess, |l|ed a petltlon be|ore tbe Slndb Hlgb Court, cba||englng
tbe |evy o| |l|tb verslon o| tbe |aw en|orclng ln|rastructure cess. Lar|ler, tbe Slndb Hlgb Court, ln August 2OO8,
ru|ed out tbat on|y |evles computed agalnst conslgnments made on or a|ter 28 December 2OO6 sba|| be payab|e
by tbe petltloners. A|tbougb tbe partles bave reacbed an lnterlm arrangement, tbrougb an order o| Slndb Hlgb
Court dated 31 May 2O11, |or re|ease o| 5O% o| tbe guarantees (re|er 13.1.4), tbe |lna| order |rom Slndb Hlgb
Court ls stl|| pendlng. Accordlng to tbe |ega| counse| o| tbe Company, cbances o| |avourab|e outcome o| tbe
appea| are |alr, bowever, as an abundant cautlon, provlslon |or 5O% o| tbe amount o| ln|rastructure cess payab|e
bas been lncorporated ln tbese |lnancla| statements amountlng to Ps. 89.164 ml||lon.
13.1.6 Tbe Company bas lssued |o||owlng guarantees ln |avour o| :
- Co||ector o| Customs, Lxclse and Sa|es Tax agalnst |evy o| Sa|es Tax, custom duty and exclse duty amountlng
to Ps 2O.46O ml||lon (2O1O: Ps 2O.46O ml||lon)
- Dlrector, Lxclse Co||ectlon O||lce, Slndb Deve|opment and Malntenance agalnst recovery o| ln|rastructure
|ee amountlng to Ps 34O.9 ml||lon (2O1O: Ps 24O.9 ml||lon)
- Dlrector Genera|, Mlnes and Mlnera|s, Punjab agalnst lnsta||atlon o| cement |actory near Kbalrpur, Dlstrlct
Cbakwa| amountlng to Ps 3 ml||lon (2O1O: Ps 3 ml||lon)
- Dlrector Genera|, Mlnes and Mlnera|s, Quetta agalnst Llmestone, sba|e amountlng to Ps 3 ml||lon (2O1O: Ps 3 ml||lon).
- Tbe Presldent o| tbe |s|amlc Pepub|lc o| Paklstan agalnst tbe per|ormance o| a contract to Prontler Works
Organlzatlon amountlng to Ps 3 Ml||lon (2O1O: Ps 3 ml||lon).
- Managlng Dlrector, Paklstan Pal|ways agalnst tbe per|ormance o| a contract amountlng to Ps 3.852 ml||lon
(2O1O: Ps 1.835 ml||lon)
- Sul Nortbern Gas Plpe|lnes Llmlted agalnst 6 MMCPD and 14 MMCPD Gas |or captlve power and |ndustrla|
use |or Kbalrpur Project and |or D.G. Kban Project amountlng to Ps 715.455 ml||lon (2O1O: Ps 715.455 ml||lon)
- Pro|esslona| Tax lmposed by Admlnlstratlon Zl|a Councl| (Tbe Dlstrlct Coordlnatlon O||lcer, DG Kban)
amountlng to Ps 1O.O5O ml||lon (2O1O: Ps O.O5O ml||lon).
- 8ank guarantee ln respect o| A|ternatlve Lnergy Deve|opment 8oard (ALD8) amountlng to Ps 2.151 ml||lon
(2O1O: Ps 2.14O ml||lon).
- Tbe Managlng Dlrector, Labore Waste Management Company (LWMC) agalnst tbe per|ormance o| a contract
amountlng to Ps 1O ml||lon (2O1O: Nl|)
13.2 Commltments
(l) Contracts |or caplta| expendlture Ps 113.639 ml||lon (2O1O: Ps 115.335 ml||lon).
(ll) Letters o| credlt |or caplta| expendlture Ps 1,364.57 ml||lon (2O1O: Ps 41.891 ml||lon).
(lll) Letters o| credlt otber tban caplta| expendlture Ps 873.36 ml||lon (2O1O: Ps 1,375.171 ml||lon).
(lv) Tbe amount o| |uture payments under operatlng |eases and tbe perlod ln wblcb tbese payments wl||
become due are as |o||ows:
2011 2010
Not |ater tban one year 331 331
Later tban one year and not |ater tban |lve years 1,488 1,488
Later tban |lve years 6,501 6,833
8,320 8,652
14.1 Preebo|d |and and bul|dlng lnc|ude book va|ues o| Ps 12 ml||lon (2O1O: Ps 12 ml||lon) and Ps 7.475 ml||lon
(2O1O: Ps 7.868 ml||lon) respectlve|y wblcb are be|d ln tbe name o| Cble| Lxecutlve o| tbe Company. Tbls
property ls |ocated ln tbe |oca|lty o| De|ense Houslng Autborlty wbere tbe by-|aws restrlct trans|er o| tlt|e o|
tbe resldentla| property ln tbe name o| tbe Company.
14.2 Tbe depreclatlon cbarge |or tbe year bas been a||ocated as |o||ows:
2011 2010
Cost o| sa|es 25 1,414,968 1,379,75O
Admlnlstratlve expenses 26 12,752 11,538
Se||lng and dlstrlbutlon expenses 27 2,690 1,276
1,430,410 1,392,564
14.3 Dlsposa| o| property, p|ant and equlment
Detal| o| property, p|ant and equlpment dlsposed o|| durlng tbe year ls as |o||ows:
quipment
M/s Nlsbat Ml||s Ltd. (re|ated party) 28,38O 5,299 23,O81 23,O81 - Negotlatlon
Sbabbaz 8rotbers 9O 28 62 1O (52) -dO-
Vehic|es
Sbabzad Abmed 1,46O 741 719 1,4OO 681 Auctlon
Nadeem Mabmood 1,46O 76O 7OO 1,38O 68O Auctlon
[a|a| Mlrza 1,217 891 326 952 626 Auctlon
Umer Zameer 1,196 876 32O 863 543 Auctlon
Nadeem Abmed 1,119 761 358 8O1 443 Auctlon
Lngr. Pebmat A|l 1,1O5 8O9 296 8OO 5O4 Auctlon
Lngr. Pebmat A|l 998 73O 268 78O 512 Auctlon
Kb. Pakbar-u|-|s|am 965 7OO 265 955 69O Auctlon
Atlq-ur-Pebman 939 627 312 1,OO3 691 Auctlon
Kasbl| Manzoor 79O 527 263 777 514 Auctlon
Mr. |r|an Kban 749 469 28O 561 281 Auctlon
Atlq-ur-Pebman 571 257 314 623 3O9 Auctlon
Mr. Umer Zameer 566 428 138 391 253 Auctlon
Cb. Abtesbam-u|-Haq 56O 376 184 525 341 Auctlon
Securlty Genera| |nsurance (re|ated party) 56O 374 186 35O 164 |nsurance c|alm
Qadeer Abmed 56O 381 179 497 318 Auctlon
Pervalz Akbtar 555 32O 235 5OO 265 Auctlon
Securlty Genera| |nsurance (re|ated party) 483 169 314 55O 236 |nsurance c|alm
Abmad Subbanl 274 99 175 462 287 Auctlon
Zabld A|l Kban 275 99 176 511 335 Auctlon
Nabee| Plaz 272 1O6 166 528 362 Auctlon
Zeesban A|l Sbab 272 1O6 166 5O7 341 Auctlon
Nlsar Abmed Quresbl 272 1O9 163 567 4O4 Auctlon
Mubammad Nadeem 59 43 16 3O 14 Auctlon
Others
Asset wltb book va|ue |ess tbat
Ps. 5O,OOO 161 54 1O7 35 (72) Auctlon
2011 45,908 16,139 29,769 39,439 9,670
2O1O 19,192 9,213 9,979 16,785 6,8O6
Particu|ars
of assets
5o|d to Cost
Accumu|ated
depreciation
Book
va|ue
5a|es
proceeds
Mode of
Disposa|
(Pupees ln tbousand)
Gain/{Loss)
on disposa|
2011 2010
15 Capita| work in progress
Clvl| works 206,776 84,874
P|ant and macblnery 925,123 226,353
Advances 74,190 28,988
Otbers 115,030 78,491
Lxpanslon project :
- Clvl| works 18,992 18,992
- Otbers 33,709 27,952
52,701 46,944
1,373,820 465,65O
16 lnvestments
|nvestment ln subsldlary company 16.1 203,629 2O3,629
Aval|ab|e |or sa|e 16.2 5,055,787 4,493,293
5,259,416 4,696,922
16.1 |nvestment ln subsldlary company
Un-quoted
Nlsbat Paper Products Company Llmlted
23,268,398 (2O1O: 23,268,398) |u||y pald ordlnary
sbares o| Ps 1O eacb
Lqulty be|d: 5O% (2O1O: 5O%) 203,629 2O3,629
16.2 Aval|ab|e |or sa|e
Pe|ated partles 16.2.1 1,727,802 1,846,5O5
Otbers 16.2.2 387 519
1,728,189 1,847,O24
Peva|uatlon surp|us 3,327,598 2,646,269
5,055,787 4,493,293
16.2.1 Pe|ated partles
Quoted
Nlsbat Ml||s Llmlted - assoclated company
3O,289,5O1 (2O1O: 3O,289,5O1) |u||y pald ordlnary
sbares o| Ps 1O eacb 1,577,174 1,577,174
Market va|ue - Ps 1,524.773 ml||lon (2O1O: Ps 1,3O6.O84 ml||lon)
Less: |mpalrment Loss {250,615) (25O,615)
1,326,559 1,326,559
Nlsbat (Cbunlan) Llmlted - assoclated company
4,926,9OO (2O1O: 4,926,9OO) |u||y pald ordlnary
sbares o| Ps 1O eacb 45,254 45,254
Market va|ue - Ps 1O9.821 ml||lon (2O1O: Ps 77.746 ml||lon)
MC8 8ank Llmlted - assoclated company
16,OO7,OO2 (2O1O: 14,551,82O) |u||y pald ordlnary
sbares o| Ps 1O eacb 125,834 125,834
Market va|ue - Ps 3,19O.195 ml||lon (2O1O: Ps 2,825.817 ml||lon)
Adamjee |nsurance Company Llmlted - assoclated company
sbares o| Ps 1O eacb 348,858 348,858
Market va|ue - Ps 23O.155 ml||lon (2O1O: Ps 282.886 ml||lon)
Less: |mpalrment Loss {118,703) -
401,243 519,946
1,727,802 1,846,5O5
Nlsbat Ml||s Llmlted, Nlsbat Cbunlan Llmlted, MC8 8ank Llmlted and Adamjee |nsurance Company Llmlted are assoclated
undertaklngs as per tbe Companles Ordlnance, 1984, bowever, |or tbe purpose o| measurement, tbese bave been c|assl|led
as aval|ab|e |or sa|e and measured at |alr va|ue as tbe Company does not bave slgnl|lcant ln||uence over tbese companles.
2011 2010
16.2.2 Otbers - quoted
Map|e Lea| Cement Pactory Llmlted
13,747 (2O1O: 13,747) |u||y pald ordlnary
sbares o| Ps 1O eacb 282 282
Market va|ue - Ps O.O283 ml||lon (2O1O: Ps O.O428 ml||lon)
Less: |mpalrment |oss {253) (128)
29 154
1,999 (2O1O: 1,999) |u||y pald pre|erence sbares o| Ps 1O eacb 20 2O
Market va|ue - Ps O.OO98 ml||lon (2O1O: Ps O.O83 ml||lon)
10 17
Plrst Caplta| Mutua| Pund
89,OOO (2O1O: 89,OOO) certl|lcates o| Ps 1O eacb 890 89O
Market va|ue - Ps O.223 ml||lon (2O1O: Ps O.2O5 ml||lon)
212 212
Hablb 8ank Llmlted
159 (2O1O: 145) |u||y pald ordlnary sbares o| Ps 1O eacb 24 24
18 18
Ol| and Gas Deve|opment Company Llmlted
2,353 (2O1O: 2,353) |u||y pald ordlnary sbares o| Ps 1O eacb 76 76
Market va|ue - Ps O.36O ml||lon (2O1O: Ps O.333 ml||lon)
Paklstan Petro|eum Llmlted
Kot Addu Power Company Llmlted
5OO (2O1O: 5OO) |u||y pald ordlnary sbares o| Ps 1O eacb 15 15
387 519
16.3 |nvestments wltb a |ace va|ue o| Ps 23O.5 ml||lon (2O1O: Ps 23O.5 ml||lon) are p|edged as securlty agalnst bank |acl|ltles.
2,9OO,277 (2O1O: 2,396,924) sbares o| MC8 8ank Llmlted are b|ocked ln CDC account.
2011 2010
17 Long term |oans, advances and deposits
Loans to emp|oyees - consldered good
- Lxecutlves 17.1 383 41O
- Otbers 3,550 3,2O4
3,933 3,614
Less: Pecelvab|e wltbln one year
- Lxecutlves 129 113
- Otbers 1,242 1,282
1,371 1,395
2,562 2,219
Loan to re|ated party - consldered good 17.2 103,234 12O,44O
Less : recelvab|e wltbln one year 22 17,206 17,2O6
86,028 1O3,234
Securlty deposlts 44,629 53,224
133,219 158,677
17.1 Lxecutlves
Openlng ba|ance 410 17
Trans|er |rom Otbers to Lxecutlves 118 5O5
|nterest accrued 17 26
545 548
Less: Pepayment durlng tbe year 162 138
383 41O
Tbese represent secured |oans glven to executlves and otber emp|oyees |or bouse bul|dlng and purcbase o| motor
veblc|es and are recoverab|e ln equa| montb|y lnsta||ments over a perlod o| 24 to 96 montbs. Tbe |oans glven to
executlves and otber emp|oyees carry lnterest at tbe rate 1O% per annum (2O1O: 1O% per annum) except |or |oans
glven to workers wblcb are lnterest |ree.
Tbe |oans o| Ps 3.933 ml||lon (2O1O: Ps 3.614 ml||lon) are secured agalnst tbe emp|oyees' respectlve retlrement bene|lts.
Tbe maxlmum aggregate amount due |rom executlves at any tlme durlng tbe year was Ps O.528 ml||lon (2O1O: Ps
O.298 ml||lon).
17.2 Tbls represents un-secured |oan o| Ps 73.5O ml||lon and Ps 29.734 ml||lon (2O1O : Ps. 85.75O ml||lon and Ps. 34.69O
ml||lon ) glven to Sul Nortbern Gas Plpe|lnes Llmlted |or tbe deve|opment o| ln|rastructure |or supp|y o| natura| gas
to tbe p|ants at D. G. Kban and Kbalrpur respectlve|y. Mark-up ls cbarged at rates ranglng |rom 1.5% to 2% per
annum (2O1O: 1.5% to 2% per annum) respectlve|y and ls recelvab|e annua||y. Tbls amount ls recelvab|e ln 6 annua|
lnsta||ments endlng O1 [anuary 2O17 and 28 Marcb 2O18.
2011 2010
18 5tores, spares and |oose too|s
Stores |lnc|udlng ln translt Ps 32.191 ml||lon
(2O1O: Ps 9.556 ml||lon)] 1,235,053 87O,113
Spares |lnc|udlng ln translt Ps 214.699 ml||lon
(2O1O: Ps. 3O6.O53 ml||lon)] 2,282,786 2,13O,891
Loose too|s 25,195 16,738
3,543,034 3,O17,742
Stores and spares lnc|ude ltems wblcb may resu|t ln |lxed caplta| expendlture but are not dlstlngulsbab|e.
2011 2010
19 5tock-in-trade
Paw materla|s 142,551 127,756
Packlng materla| |lnc|udlng ln translt Ps. 6.411 ml||lon
(2O1O: Ps Nl| )] 255,241 152,216
Work-ln-process 169,612 537,539
Plnlsbed goods 294,737 219,365
862,141 1,O36,876
20 Trade debts - considered good
Secured 403,323 252,98O
Unsecured
- Pe|ated partles 2O.1 1,348 2,776
- Otbers 54,629 48,193
459,300 3O3,949
2O.1 Due |rom re|ated partles
Nlsbat (Cbunlan) Llmlted 8 1,1OO
Nlsbat Power Llmlted - 1
Nlsbat Deve|opers 1,340 1,675
1,348 2,776
Tbese are ln tbe norma| course o| buslness and are lnterest |ree.
21 lnvestments
Aval|ab|e-|or-sa|e
Pe|ated partles 21.1 479,066 479,O66
Add: Peva|uatlon surp|us 11,647,283 1O,261,9O6
12,126,349 1O,74O,972
21.1 Pe|ated partles-Quoted
Nlsbat (Cbunlan) Llmlted - assoclated company
Market va|ue - Ps 1.853 ml||lon (2O1O: Ps 1.312 ml||lon)
MC8 8ank Llmlted - assoclated company
6O,835,4O2 (2O1O: 55,3O4,911) |u||y pald
ordlnary sbares o| Ps 1O eacb 478,234 478,234
Market va|ue Ps 12.124 ml||lon (2O1O: Ps 1O,739.661 ml||lon)
479,066 479,O66
Nlsbat (Cbunlan) Llmlted and MC8 8ank Llmlted are assoclated undertaklngs as per tbe Companles Ordlnance,
1984, bowever, |or tbe purpose o| measurement, tbese bave been c|assl|led as aval|ab|e |or sa|e and measured at
|alr va|ue as tbe company does not bave slgnl|lcant ln||uence over tbese companles.
2011 2010
22 Advances, deposits, prepayments and other receivab|es
Loans to emp|oyees - consldered good 17 1,371 1,395
Advances - consldered good
- to emp|oyees 22.1 4,190 2,O25
- to trade supp|lers 22.2 334,481 43O,169
338,671 432,194
Current portlon o| |ong term recelvab|e |rom re|ated party 17 17,206 17,2O6
Due |rom re|ated partles 22.3 15,202 3O,828
Mark-up recelvab|e |rom re|ated party 22.4 51,655 4O,834
Derlvatlve |lnancla| lnstruments 22.5 1,303 9,422
Pro|lt recelvab|e on bank deposlts - 981
Letters o| credlt - marglns, deposlts, openlng cbarges, etc. 5,329 35,341
Lxclse duty recoverab|e - 3,O19
C|alms recoverab|e |rom government
|ncome tax 505,470 381,654
Sa|es tax 22.6 111,271 51,3O7
Prelgbt subsldy 27,422 27,422
Lxclse duty 17,370 17,243
Lxport rebate 41,915 35,514
703,448 513,14O
Otber recelvab|es 2,379 2,8O1
1,136,564 1,O87,161
22.1 |nc|uded ln advances to emp|oyees are amounts due |rom executlves o| Ps 2,396 tbousand (2O1O: Ps 1,OO9 tbousand).
22.2 Tbls lnc|udes amount due |rom Subsldlary company amountlng to Ps 31O.999 ml||lon (2O1O: Ps 346.414 ml||lon)
re|atlng to advance |or purcbase o| paper bags carrylng lnterest at average borrowlng rate o| tbe company.
2011 2010
22.3 Due |rom re|ated partles
Nlsbat Ml||s Llmlted 14,568 3O,656
Nlsbat Splnnlng Ml||s Llmlted 191 -
La|plr Power Llmlted 443 -
Nlsbat Hote|s and Propertles Llmlted - 172
22.3.1 15,202 3O,828
22.3.1 Tbese re|ate to norma| buslness o| tbe Company and are lnterest |ree.
22.4 Tbls represents mark-up recelvab|e |rom Sul Nortbern Gas Plpe|lnes Llmlted agalnst tbe |oan as re|erred to ln note 17.2
and |rom Nlsbat Paper Products Company Llmlted agalnst advances as re|erred to ln note 22.2.
22.5 Tbe Company bas entered lnto 9 |orward agreements wltb varlous banks |or a tota| amount o| USD 14.5 ml||lon
(2O1O: USD 16.5 ml||lon), bavlng 1 to 6 montbs maturlty. Under |orward agreement, tbe Company wou|d se|| tbe
contracted quantlty o| USD to tbe bank at tbe Contracted rate. As at 3O [une 2O11, tbe unrea|lzed galn on tbese
|orward contracts amounts to Ps. 1.3O3 ml||lon (2O1O :Ps. 9.422 ml||lon).
22.6 Sa|es tax recoverab|e lnc|udes amounts wblcb bave been recovered by tbe sa|es tax department agalnst mlsce||aneous
demands ralsed by lt. Tbe Company bas |l|ed appea|s agalnst tbe demands at dl||erent |orums.
2011 2010
23 Cash and bank ba|ances
At banks
Savlng accounts 23.1 & 23.2
Pak rupee 77,366 93,15O
Porelgn currency US $ 22.2O (2O1O: US $ 22.2O) 2 2
Current accounts 90,131 136,544
167,499 229,696
Casb ln band 143 1,O96
167,642 23O,792
23.1 Tbe ba|ances ln savlng accounts bear mark-up wblcb ranges |rom O.1% to 5% per annum (2O1O: O.1% to 5% per annum).
23.2 |nc|uded ln ba|ances at banks on savlng accounts are Ps 14.48O ml||lon (2O1O: Ps 14.48O ml||lon) wblcb are under
|len to secure bank guarantees re|erred to ln note 11.2.
2011 2010
24 5a|es - net
Loca| sa|es 16,986,833 18,337,945
Lxport sa|es 24.1 6,486,701 3,698,676
23,473,534 22,O36,621
Less: Government |evles 4,621,995 5,5O9,345
Commlsslon to stocklsts and export agents 274,341 251,922
4,896,336 5,761,267
18,577,198 16,275,354
24.1 Lxport sa|es lnc|ude rebate on exports amountlng to
Ps 31.488 ml||lon (2O1O: Ps 23.O2O ml||lon).
25 Cost of sa|es
Paw and packlng materla|s consumed 1,805,898 1,912,8O8
Sa|arles, wages and otber bene|lts 25.1 804,957 695,739
L|ectrlclty and gas 1,880,289 1,991,243
Purnace ol| and coa| 6,160,054 6,1OO,3O5
Stores and spares consumed 1,338,239 1,O96,57O
Pepalr and malntenance 175,077 165,951
|nsurance 54,992 52,727
Depreclatlon on property, p|ant and equlpment 14.2 1,414,968 1,379,75O
Poya|ty 146,625 185,O52
veblc|e runnlng 25,234 21,O41
Postage, te|epbone and te|egram 4,212 4,829
Prlntlng and statlonery 7,147 4,821
Lega| and pro|esslona| cbarges 1,790 2,O79
Trave|lng and conveyance 10,744 8,652
Lstate deve|opment 15,298 12,514
Pent, rates and taxes 13,675 1,492
Prelgbt cbarges 11,566 4,924
Otber expenses 25,605 19,834
Tota| manu|acturlng cost c/| 13,909,967 13,695,17O
2011 2010
Tota| manu|acturlng cost b/| 13,909,967 13,695,17O
Openlng work-ln-process 537,539 387,444
C|oslng work-ln-process {169,612) (537,539)
367,927 (15O,O95)
Cost o| goods manu|actured 14,277,894 13,545,O75
Openlng stock o| |lnlsbed goods 219,365 249,916
C|oslng stock o| |lnlsbed goods {294,737) (219,365)
{75,372) 3O,551
Less : own consumptlon 10,293 5,632
14,192,229 13,569,994
25.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 21.95O ml||lon (2O1O: Ps 19.256 ml||lon), Ps 2O.399 ml||lon (2O1O:
Ps 17.584 ml||lon) and Ps 15.9O7 ml||lon (2O1O: Ps 12.394 ml||lon) respectlve|y, ln respect o| provldent |und
contrlbutlon by tbe Company, provlslon |or gratulty and sta|| compensated absences.
2011 2010
26 Administrative expenses
L|ectrlclty, gas and water 5,908 3,868
Pepalr and malntenance 5,981 6,O52
|nsurance 1,809 1,596
Depreclatlon on property, p|ant and equlpment 14.2 12,752 11,538
veblc|e runnlng 5,428 5,252
Lega| and pro|esslona| cbarges 26.2 8,143 8,478
Trave|lng and conveyance 5,293 4,983
Pent, rates and taxes 1,197 1,48O
Lntertalnment 1,798 1,492
Scboo| expenses 15,083 11,292
Pee and subscrlptlon 7,681 4,948
Otber expenses 5,905 4,54O
211,362 172,436
26.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 4.322 ml||lon (2O1O: Ps 3.176 ml||lon), Ps. 7.983 ml||lon (2O1O: Ps.
3.464 ml||lon) and Ps 2.3O5 ml||lon (2O1O: Ps 1.6O4 ml||lon) respectlve|y, ln respect o| provldent |und contrlbutlon
by tbe Company, provlslon |or gratulty and sta|| compensated absences.
26.2 Lega| and pro|esslona| cbarges 2011 2010
Lega| and pro|esslona| cbarges lnc|ude tbe |o||owlng
ln respect o| audltors' servlces |or:
Statutory audlt 1,250 1,1OO
Ha|| year|y revlew 270 25O
Certl|lcatlon and sundry servlces 50 5O
Out o| pocket expenses 70 1OO
1,640 1,5OO
2011 2010
27 5e||ing and distribution expenses
L|ectrlclty, gas and water 1,277 1,1OO
Pepalr and malntenance 427 557
|nsurance 336 238
Postage, te|epbone and te|egram 2,117 2,4OO
Prlntlng and statlonery 1,344 2,24O
Lega| and pro|esslona| cbarges 633 16
Trave|lng and conveyance 2,740 2,O79
Lntertalnment 521 578
Advertlsement and sa|es promotlon 3,020 5,271
Prelgbt cbarges -|oca| 73 7O
Prelgbt and band|lng cbarges -export 2,386,545 916,975
Otber expenses 729 1,213
2,470,599 994,418
27.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 2.588 ml||lon (2O1O: Ps 2.246 ml||lon), Ps 2.1O7 ml||lon (2O1O: Ps 1.975
ml||lon) and Ps 1.411 ml||lon (2O1O: Ps 1.O42 ml||lon) respectlve|y, ln respect o| provldent |und contrlbutlon by tbe
Company, provlslon |or gratulty and sta|| compensated absences.
2011 2010
28 Other operating expenses
Workers' Pro|lt Partlclpatlon Pund 31,642 2O,251
Donatlons 28.1 140 351
Worker We||are Pund - 26,353
Lxcbange |oss 6,182 142,O6O
37,964 189,O15
28.1 None o| tbe dlrectors and tbelr spouses bad any lnterest
ln any o| tbe donees.
29 Other operating income
|ncome |rom |lnancla| assets
|ncome on bank deposlts 1,603 2,372
|nterest on |oans to emp|oyees 53 45
Galn on sa|e o| sbares - 79,215
Dlvldend lncome |rom:
- Pe|ated partles 29.1 951,330 765,93O
- Otbers 24 468
951,354 766,398
953,010 848,O3O
|ncome |rom non-|lnancla| assets
Penta| lncome 1,473 1,4O6
Galn on dlsposa| o| property, p|ant and equlpment 9,670 6,8O6
Scrap sa|es 12,074 13,O85
Provlslon wrltten back - Worker We||are Pund 29.2 77,320 -
Mark-up on |oan/ advances to re|ated partles 52,914 42,273
153,451 63,57O
Otbers 201 72
1,106,662 911,672
2011 2010
29.1 Dlvldend lncome |rom re|ated partles
Nlsbat Ml||s Llmlted 75,724 41,779
Nlsbat (Cbunlan) Llmlted 7,515 5O
MC8 8ank Llmlted 859,238 714,443
Adamjee |nsurance Company Llmlted 8,853 9,658
951,330 765,93O
29.2 Tbe company bas wrltten back tbe provlslons created on account o| Workers' We||are Pund re|atlng to years 2OO7,
2OO9 and 2O1O based on tbe judgment lssued by tbe bonourab|e Labore Hlgb Court tbrougb order 19 August 2O11.
Tbe Honourab|e court, tbrougb sucb order, bas be|d tbe amendments lntroduced to tbe Workers We||are Pund
Ordlnance, 1971 tbrougb Plnance Act, 2OO6 and Plnance Act, 2OO8 as u|tra vlres tbe constltutlon. Accordlng|y, tbe company
bas reverserd tbe provlslon made |or WWP, based on accountlng pro|lt, ln respect o| above mentloned years.
2011 2010
30 Finance cost
|nterest and mark-up on:
- Long term |oans 778,035 731,659
- Sbort term borrowlngs 1,242,246 1,O88,143
- Workers' Pro|lt Partlclpatlon Pund 1,090 2,O51
(Galn) / |oss on derlvatlve |lnancla| lnstruments {27,468) 28,47O
Guarantee commlsslon 21,242 29,843
8ank cbarges 36,533 22,594
2,051,678 1,9O2,76O
Durlng tbe year borrowlng cost amountlng to Ps. Nl| (2O1O: Ps 15O.O84 ml||lon) bas been caplta|lzed ln tbe property, p|ant
and equlpment pertalnlng to tbe new expanslon project.
2011 2010
31 Provision for taxation
Por tbe year
- Current 31.1 {188,305) (1OO,998)
- De|erred {241,926) (24,383)
{430,231) (125,381)
31.1 Tbe provlslon |or current taxatlon represents mlnlmum tax under sectlon 113 o| tbe |ncome Tax Ordlnance, 2OO1
at tbe rate o| 1% (2O1O: O.5%) o| turnover |orm |oca| sa|es. |n addltlon to tbls, lt lnc|udes tax on exports and renta|
lncome wblcb ls |u|| and |lna| dlscbarge o| Company's tax |labl|lty ln respect o| lncome arlslng |rom sucb source.
31.2 Por purposes o| current taxatlon, tbe tax credlts aval|ab|e |or carry |orward as at 3O [une 2O11 are estlmated
approxlmate|y at Ps 7,976 ml||lon (2O1O: Ps 7,995 ml||lon).
31.3 Slnce tbe Company ls |lab|e to pay mlnlmum tax, tbere|ore, no numerlca| tax reconcl|latlon ls glven.
2011 2010
32 arnings per share Pestated
32.1 Larnlngs per sbare - 8aslc
Pro|lt |or tbe year Pupees ln tbousand 170,961 233,O22
Welgbted average number o| ordlnary sbares Number 380,437,368 334,266,2O7
Larnlngs per sbare - baslc Pupees 0.45 O.7O
32.2 Larnlngs per sbare - Dl|uted
Tbere ls no dl|utlon e||ect on tbe baslc earnlngs per sbare as tbe Company bas no sucb commltments.
2011 2010
33 Cash f|ow from operating activities
Pro|lt be|ore tax 601,192 358,4O3
Adjustment |or :
- Depreclatlon on property, p|ant and equlpment 1,430,410 1,392,564
- Galn on dlsposa| o| property, p|ant and equlpment {9,670) (6,8O6)
- Galn on dlsposa| o| lnvestments - (79,215)
- Dlvldend lncome {951,354) (766,398)
- |mpalrment |oss on lnvestments 118,836 -
- Markup lncome {52,914) (42,273)
- Petlrement and otber bene|lts accrued 56,193 38,1O9
- Lxcbange |oss - net 6,182 142,O6O
- Plnance cost 2,051,678 1,9O2,76O
2,649,361 2,58O,8O1
Pro|lt be|ore worklng caplta| cbanges 3,250,553 2,939,2O4
L||ect on casb ||ow due to worklng caplta| cbanges:
- (|ncrease) ln stores, spares and |oose too|s {525,293) (81,862)
- Decrease / (|ncrease) ln stock-ln-trade 174,735 (137,O4O)
- (|ncrease) / Decrease ln trade debts {155,351) 21O,O17
- Decrease ln advances, deposlts, prepayments
and otber recelvab|es 86,999 19,926
- (Decrease) / |ncrease ln trade and otber payab|es {35,705) 244,354
{454,615) 255,395
Casb generated |rom operatlons 2,795,938 3,194,599
34 Cash and cash equiva|ents
Sbort term borrowlngs - secured {8,691,982) (9,585,642)
Casb and bank ba|ances 167,642 23O,792
{8,524,340) (9,354,85O)
35 Remuneration of Chief xecutive, Directors and xecutives
35.1 Tbe aggregate amount cbarged ln tbe |lnancla| statements |or tbe year |or remuneratlon, lnc|udlng certaln bene|lts,
to tbe cble| executlve, |u|| tlme worklng dlrectors and executlves o| tbe Company ls as |o||ows:
Chief xecutive Directors xecutives
2011 2010 2011 2010 2011 2010
(Pupees ln tbousand) (Pupees ln tbousand) (Pupees ln tbousand)
Managerla| remuneratlon 7,496 6,518 11,854 1O,31O 154,33O 121,8O5
Contrlbutlons to provldent
and gratulty |unds - - 2,173 1,O31 23,467 1O,271
Houslng 27O 27O 733 683 49,411 38,874
Utl|ltles - - - - 1O,637 8,289
Leave passage - - 984 635 4,711 3,173
Medlca| expenses 529 1,359 38O 1O9 4,818 2,213
Otbers 4,547 4,843 919 2,O45 35,65O 38,849
12,842 12,99O 17,O43 14,813 283,O24 223,474
Number of persons 1 1 2 2 131 105
Tbe Company a|so provldes tbe cble| executlve and some o| tbe dlrectors and executlves wltb |ree transport
and resldentla| te|epbones.
35.2 Pemuneratlon to otber dlrectors
Aggregate amount cbarged ln tbe |lnancla| statements |or tbe year |or |ee to 5 dlrectors (2O1O: 5 dlrectors) was
Ps Nl| (2O1O: Ps Nl|).
36 Transactions with re|ated parties
Tbe re|ated partles comprlse subsldlary company, assoclated companles, otber re|ated companles, dlrectors o| tbe company,
key management personne| and post emp|oyment bene|lt p|ans. Tbe dlrectors o| tbe re|ated companles are c|ose members
o| tbe |aml|y o| tbe dlrectors o| tbe company. Tbe company ln tbe norma| course o| buslness carrles out transactlons wltb
varlous re|ated partles. Amounts due |rom and due to re|ated partles are sbown under recelvab|es and payab|es, dlvldend
lncome ls dlsc|osed ln note 29, expense cbarged ln respect o| sta|| retlrement bene|lt p|ans ls dlsc|osed ln note 7 and
remuneratlon o| tbe key management personne| ls dlsc|osed ln note 35. Otber slgnl|lcant transactlons wltb re|ated partles
are as |o||ows:
2011 2010
Re|ationship with the company Nature of transaction
l. Subsldlary Company Purcbase o| goods 1,032,032 1,186,862
Penta| lncome 796 776
|nterest lncome 50,819 39,859
ll. Otber re|ated partles Sa|e o| goods 30,882 29,OO2
Sa|e o| equlpment 23,187 -
|nsurance premlum 74,757 75,O46
Purcbase o| servlces 632,526 742,971
|nsurance c|alms recelved 2,468 2O2
Mark-up lncome on ba|ances wltb
re|ated partles 2,096 2,414
Dlvldend lncome 951,330 765,93O
A|| transactlons wltb re|ated partles bave been carrled out on commercla| terms and condltlons.
37 P|ant capacity and actua| production
Capacity Actua| production
2011 2010 2011 2010
C|lnker (M. Tons)
Unlt 1 81O,OOO 81O,OOO 694,835 951,397
Unlt 2 1,2OO,OOO 1,2OO,OOO 1,325,877 1,328,353
Unlt 3 2,O1O,OOO 2,O1O,OOO 1,717,692 2,4O4,626
38 Operating segments
38.1 Tbe |lnancla| ln|ormatlon bas been prepared on tbe basls o| a slng|e reportab|e segment.
38.2 Sa|e |rom cement and c|lnker represent 98.4O% and 1.6O% (2O1O: 98.57% and 1.43%) o| tota| revenue o| tbe
company respectlve|y.
38.3 A|| non-current assets o| tbe company as at 3O [une 2O11 are |ocated ln Paklstan.
39 Financia| instruments
Tbe company bas exposure to tbe |o||owlng rlsks |rom lts use o| |lnancla| lnstruments.:
- Credlt rlsk
- Llquldlty rlsk
- Market rlsk
Tbe 8oard o| Dlrectors bave tbe overa|| responslbl|lty |or tbe estab|lsbment and overslgbt o| Company's rlsk management
|ramework. Tbe 8oard ls a|so responslb|e |or deve|oplng and monltorlng tbe Company's rlsk management po|lcles.
Tbls note presents ln|ormatlon about tbe Company's exposure to eacb o| tbe above rlsks, tbe Company's objectlves,
po|lcles and processes |or measurlng and managlng rlsk, and tbe Company's management o| caplta|.
Tbe Company's rlsk management po|lcles are estab|lsbed to ldentl|y and ana|yse tbe rlsks |aced by tbe Company, to set
approprlate rlsk |lmlts and contro|s, and to monltor rlsks and adberence to |lmlts. Plsk management po|lcles and systems
are revlewed regu|ar|y to react to cbanges ln market condltlons and tbe Company's actlvltles.
39.1 Credlt rlsk
Credlt rlsk ls tbe rlsk o| |lnancla| |oss to tbe Company l| a customer or counterparty to a |lnancla| lnstrument
|al|s to meet lts contractua| ob|lgatlons, and arlses prlnclpa||y |rom tbe Company's recelvab|es |rom customers
and |oans to/due |rom re|ated partles. Out o| tbe tota| |lnancla| assets o| Ps. 19,284 ml||lon (2O1O: Ps. 16,7O2
ml||lon) |lnancla| assets wblcb are subject to credlt rlsk amount to Ps. 18,579 ml||lon (2O1O: Ps. 16,7O1 ml||lon).
Tbe Company's exposure to credlt rlsk ls ln||uenced maln|y by tbe lndlvldua| cbaracterlstlcs o| eacb customer.
To manage exposure to credlt rlsk ln respect o| trade recelvab|es, management revlews credlt wortblness,
re|erences, estab|lsb purcbase |lmlts taklng lnto account tbe customer's |lnancla| posltlon, past experlence and
otber |actors. Lxport sa|es are secured tbrougb |etters o| credlt. Tbe management bas set a maxlmum credlt
perlod o| 3O days to reduce tbe credlt rlsk. Llmlts are revlewed perlodlca||y and tbe customers tbat |al| to meet
tbe Company's bencbmark credltwortblness may transact wltb tbe Company on|y on a prepayment basls.
Concentratlon o| credlt rlsk arlses wben a number o| counter partles are engaged ln slml|ar buslness actlvltles
or bave slml|ar economlc |eatures tbat wou|d cause tbelr abl|ltles to meet contractua| ob|lgatlon to be slml|ar|y
e||ected by tbe cbanges ln economlc, po|ltlca| or otber condltlons. Tbe Company be|leves tbat lt ls not exposed
to major concentratlon o| credlt rlsk.
Tbe carrylng amount o| |lnancla| assets represents tbe maxlmum credlt exposure be|ore any credlt enbancements.
Tbe maxlmum exposure to credlt rlsk at tbe reportlng date ls:
2011 2010
Aval|ab|e |or sa|e |lnancla| assets
- Non Current |nvestments 5,259,416 4,696,922
- Current |nvestments 12,126,349 1O,74O,972
Long term |oans, advances and deposlts 133,219 158,677
Trade debts 459,300 3O3,949
Advances, deposlts, prepayments and otber recelvab|es 431,813 561,58O
8ank ba|ances 167,499 229,696
Derlvatlve |lnancla| lnstruments 1,303 9,422
18,578,899 16,7O1,218
2011 2010
Tbe trade debts as at tbe ba|ance sbeet date are c|assl|led as |o||ows:
Porelgn 362,893 216,O93
Domestlc 96,407 87,856
459,300 3O3,949
Tbe aglng o| trade recelvab|es at tbe reportlng date ls:
Past due 1 - 3 Montbs 212,692 139,95O
Past due 4 - 6 Montbs 171,019 22,718
Past due 7 - 1O Montbs 5,971 6,979
Past due 11 - 12 Montbs 2,385 4,O75
Past due above one year 67,233 13O,227
459,300 3O3,949
8ased on past experlence tbe management be|leves tbat no lmpalrment a||owance ls necessary ln respect o| trade
recelvab|es past due as some recelvab|es bave been recovered subsequent to tbe year end and |or otber recelvab|es
tbere are reasonab|e grounds to be|leve tbat tbe amounts wl|| be recovered ln sbort course o| tlme.
39.2 Llquldlty rlsk
Llquldlty rlsk ls tbe rlsk tbat tbe Company wl|| not be ab|e to meet lts |lnancla| ob|lgatlons as tbey |a|| due. Tbe
Company's approacb to managlng |lquldlty ls to ensure, as |ar as posslb|e, tbat lt wl|| a|ways bave su||lclent |lquldlty
to meet lts |labl|ltles wben due, under botb norma| and stressed condltlons. Por tbls purpose tbe Company bas
su||lclent runnlng |lnance |acl|ltles aval|ab|e |rom varlous commercla| banks to meet lts |lquldlty requlrements.
Purtber |lquldlty posltlon o| tbe Company ls c|ose|y monltored tbrougb budgets, casb ||ow projectlons and
comparlson wltb actua| resu|ts by tbe 8oard.
Po||owlng ls tbe maturlty ana|ysls o| |lnancla| |labl|ltles:
Carrylng Less tban 8etween 6 to 8etween 1 to 8etween 6 to Over 1O
amount 6 montbs 12 montbs 5 years 1O years years
Non derlvatlve |lnancla| |labl|ltles
Long term |lnances (6,875,127) (1,147,728) (9O3,O7O) (4,761,829) (62,5OO) -
Sbort term borrowlng - secured (8,691,982) (8,691,982) - - - -
Long term deposlts (7O,893) - - (7O,893) - -
Trade and otber payab|es (1,334,162) (1,334,162) - - - -
2010-2011 {16,972,164) {11,173,872) {903,070) {4,832,722) {62,500) -
Carrylng Less tban 8etween 6 to 8etween 1 to 8etween 6 to Over 1O
amount 6 montbs 12 montbs 5 years 1O years years
Long term |lnances (7,222,988) (1,O66,74O) (1,O66,74O) (4,677,OO8) (412,5OO) -
Sbort term borrowlng - secured (9,585,642) (9,585,642) - - - -
Long term deposlts (7O,893) - - (7O,893) - -
Trade and otber payab|es (1,321,128) (1,321,128) - - - -
2OO9-2O1O (18,2OO,651) (11,973,51O) (1,O66,74O) (4,747,9O1) (412,5OO) -
39.3 Market rlsk
Market rlsk ls tbe rlsk tbat cbanges ln market prlces, sucb as |orelgn excbange rates, lnterest rates and equlty
prlces wl|| a||ect tbe Company's lncome or tbe va|ue o| lts bo|dlngs o| |lnancla| lnstruments. Tbe objectlve o|
market rlsk management ls to manage and contro| market rlsk exposures wltbln acceptab|e parameters, wbl|e
optlmlslng tbe return.
39.3.1 Currency rlsk
Tbe Company ls exposed to currency rlsk on sa|es, purcbases and borrowlngs tbat are denomlnated ln a currency
otber tban tbe |unctlona| currency prlmarl|y U.S. Do||ars (USD). Tbe Company uses |orward excbange and
derlvatlve contracts to bedge lts currency rlsks. Tbe Company's exposure to |orelgn currency rlsk |or US Do||ars
ls as |o||ows:
2011 2010
Porelgn debtors 362,893 216,O93
Porelgn currency bank accounts 2 2
Less: Long term |oans {1,393,400) (2,O79,17O)
|mport |lnances {1,157,914) (1,6O2,5O8)
Lxport re|lnances {585,140) -
Payab|es {722) (4,255)
Derlvatlve |lnancla| lnstruments - asset 1,303 9,422
Gross ba|ance sbeet exposure {2,772,978) (3,46O,415)
Outstandlng |etter o| credlts {717,069) (539,O59)
Net exposure {3,490,047) (3,999,474)
Tbe |o||owlng slgnl|lcant excbange rates bave been app|led:
Peportlng date rate
2011 2O1O
USD to PKP - 8uy 85.85 85.4O
USD to PKP - Se|| 86.05 85.6O
Average rate
2011 2O1O
USD to PKP - 8uy 84.87 83.38
USD to PKP - Se|| 86.25 84.26
Sensltlvlty ana|ysls:
At reportlng date, l| tbe PKP bad strengtbened by Pupee one agalnst tbe |orelgn currencles wltb a|| otber varlab|es
be|d constant, post-tax |oss |or tbe year wou|d bave been |ower by tbe amount sbown be|ow, maln|y as a resu|t
o| net |orelgn excbange galn on trans|atlon o| |orelgn debtors, |orelgn currency bank account and outstandlng
|etter o| credlts.
2011 2010
L||ect on pro|lt and |oss 40,653 46,832
Tbe weakenlng o| tbe PKP agalnst |orelgn currencles wou|d bave bad an equa| but opposlte lmpact on tbe post
tax |oss.
Tbe sensltlvlty ana|ysls prepared ls not necessarl|y lndlcatlve o| tbe e||ects on (|oss) / pro|lt |or tbe year and assets
/ |labl|ltles o| tbe Company.
39.3.2 |nterest rate rlsk
|nterest rate rlsk ls tbe rlsk tbat tbe va|ue o| |lnancla| lnstrument wl|| ||uctuate due to cbanges ln market lnterest
rates. Slgnl|lcant lnterest rate rlsk exposures are prlmarl|y managed by a mlx o| borrowlngs at |lxed and varlab|e
lnterest rates and enterlng lnto lnterest rate swap contracts. At tbe reportlng date tbe lnterest rate pro|l|e o|
tbe Company's slgnl|lcant lnterest bearlng |lnancla| lnstruments was as |o||ows:
2011 2010 2011 2010
L||ectlve rate Carrylng amount
(ln Percentage) (Pupees ln OOO)
Financia| |iabi|ities
varlab|e rate lnstruments:
Long term |lnances - PKP 13.59 to 16 13.O8 to 15.11 4,674,227 5,143,818
Long term |lnances - USD 0.325 to 0.598 O.314 to O.664 1,393,400 2,O79,17O
Sbort term borrowlngs - PKP 13.59 to 14.19 12.24 to 16.66 7,534,068 7,983,134
Sbort term borrowlngs - USD 2.197 to 3.850 3.11 to 3.75 1,157,914 1,6O2,5O8
Tbe Company does not account |or any |lxed rate |lnancla| assets and |labl|ltles at |alr va|ue tbrougb pro|lt and |oss.
Tbere|ore a cbange ln lnterest rates at tbe reportlng date wou|d not a||ect pro|lt and |oss account.
Casb ||ow sensltlvlty ana|ysls |or varlab|e rate lnstruments
A cbange o| 1OO basls polnts ln lnterest rates at tbe reportlng date wou|d bave lncreased/ (decreased) pro|lt |or tbe
year by tbe amounts sbown be|ow. Tbls ana|ysls assumes tbat a|| otber varlab|es, ln partlcu|ar |orelgn currency rates,
remaln constant. Tbe ana|ysls ls per|ormed on tbe same basls |or 2O1O.
1OObps
|ncrease Decrease
ffect on profit - 30 june 2011 {147,596) 147,596
L||ect on pro|lt - 3O [une 2O1O {150,216) 15O,216
Tbe sensltlvlty ana|ysls prepared ls not necessarl|y lndlcatlve o| tbe e||ects on |oss |or tbe year and assets / |labl|ltles
o| tbe Company.
39.3.3 Palr va|ue blerarcby
Plnancla| lnstruments carrled at |alr va|ue are categorlsed as |o||ows:
Leve| 1 : quoted market prlces
Leve| 2 : va|uatlon tecbnlques (market observab|e)
Leve| 3 : va|uatlon tecbnlques (non-market observab|e)
Tbe Company be|d tbe |o||owlng |lnancla| lnstruments measured at |alr va|ue:
Tota| Leve| 1 Leve| 2 Leve| 3
Financia| assets 30 june 2011
Aval|ab|e |or sa|e |lnancla| assets 17,182,136 17,182,136 - -
Derlvatlve |lnancla| assets 1,3O3 - 1,3O3 -
17,183,439 17,182,136 1,3O3 -
Derlvatlve |lnancla| assets 9,422 - 9,422 -
15,243,687 15,234,265 9,422 -
39.3.4 Otber prlce rlsk
Otber prlce rlsk ls tbe rlsk tbat tbe |alr va|ue or |uture casb ||ows o| a |lnancla| lnstrument wl|| ||uctuate because
o| cbanges ln market prlces (otber tban tbose arlslng |rom lnterest rate rlsk or currency rlsk). Lqulty prlce rlsk
arlses |rom aval|ab|e-|or-sa|e equlty securltles be|d. Materla| lnvestments wltbln tbe port|o|lo are managed on
an lndlvldua| basls and a|| buy and se|| declslons are approved by tbe 8oard. Tbe prlmary goa| o| tbe Company's
lnvestment strategy ls to maxlmlse lnvestment returns.
A 1% lncrease / decrease ln sbare prlces at year end wou|d bave decreased / lncreased tbe Company's surp|us
on re-measurement o| lnvestments ln case o| 'aval|ab|e |or sa|e' lnvestments as |o||ows:
2011 2010
L||ect on equlty - 152,343
39.4 Palr va|ue o| |lnancla| lnstruments
Tbe carrylng va|ues o| tbe |lnancla| assets and |lnancla| |labl|ltles approxlmate tbelr |alr va|ues. Palr va|ue ls tbe
amount |or wblcb an asset cou|d be excbanged, or a |labl|lty sett|ed, between know|edgeab|e, wl||lng partles ln
an arm's |engtb transactlon.
39.5 Caplta| management
Tbe 8oard's po|lcy ls to malntaln an e||lclent caplta| base so as to malntaln lnvestor, credltor and market con|ldence
and to sustaln tbe |uture deve|opment o| lts buslness. Tbe 8oard o| Dlrectors monltors tbe return on caplta|
emp|oyed, wblcb tbe Group de|lnes as operatlng lncome dlvlded by tota| caplta| emp|oyed. Tbe
8oard o| Dlrectors a|so monltors tbe |eve| o| dlvldends to ordlnary sbarebo|ders.
Tbe Group's objectlves wben managlng caplta| are:
(l) to sa|eguard tbe entlty's abl|lty to contlnue as a golng concern, so tbat lt can contlnue to provlde returns |or
sbarebo|ders and bene|lts |or otber stakebo|ders, and
(ll) to provlde an adequate return to sbarebo|ders.
Tbe Company manages tbe caplta| structure ln tbe context o| economlc condltlons and tbe rlsk cbaracterlstlcs
o| tbe under|ylng assets. |n order to malntaln or adjust tbe caplta| structure, tbe Company may, |or examp|e,
adjust tbe amount o| dlvldends pald to sbarebo|ders, lssue new sbares, or se|| assets to reduce debt.
Tbe Company monltors caplta| on tbe basls o| tbe debt-to-equlty ratlo - ca|cu|ated as a ratlo o| tota| debt to
equlty.
Tbe debt-to-equlty ratlos as at 3O [une 2O11 and at 3O [une 2O1O were as |o||ows:
2011 2010
Tota| debt 15,851,620 17,155,O55
Tota| equlty and debt 46,068,905 43,674,275
Debt-to-equlty ratlo 34% 39%
Tbe decrease ln tbe debt-to-equlty ratlo ln 2O11 resu|ted prlmarl|y due to net repayment o| |ong term and sbort
term borrowlngs and rlgbt lssue durlng tbe year.
Neltber tbere were any cbanges ln tbe Company's approacb to caplta| management durlng tbe year nor tbe
Group ls subject to externa||y lmposed caplta| requlrements.
40 Date of authorisation
Tbese |lnancla| statements were autborlsed |or lssue on O7 September 2O11 by tbe 8oard o| Dlrectors o| tbe Company.
41 Genera|
41.1 Plgures bave been rounded o|| to tbe nearest tbousand o| Pupees.
41.2 Correspondlng |lgures bave been re-arranged, wberever necessary, |or tbe purposes o| comparlson. However,
no slgnl|lcant re-arrangements bave been made.
Cble| Lxecutlve Dlrector
Conso|idated Financia| 5tatements

D.G. Khan Cement Company Limited and its 5ubsidiary
DlRCTOR5' RPORT ON CON5OLlDATD FlNANClAL 5TATMNT5
Tbe board o| dlrectors ls p|eased to submlt lts report a|ong wltb tbe
conso|ldated |lnancla| statements |or tbe year ended 3O [une 2O11.
Our dlscusslon o| a||alrs o| tbe bo|dlng company bas been separate|y
presented.
Performance Out|ook
conomy
Lconomlc and securlty pro|l|e o| Paklstan ls dec|lnlng contlnuous|y.
Wltb budget targets set |or 2O11 remalnlng unacbleved, |lsca| year
2O12 ls expected to be even more cba||englng. Tbe a|ready |lmplng
economy o| Paklstan ls yet to su||er anotber economlc b|ow by
ln|rastructura| and socla| damages caused by severe ||oods ln |ower
Punjab and Slndb reglons.
Manu|acturlng lndustry ls degeneratlng due to severe energy crlsls
and ever worsenlng securlty sltuatlon ln Paklstan. Tbe lnvestor
con|ldence ls |adlng and tbe e||orts |or seeklng |orelgn dlrect lnvestment
are not yle|dlng any tanglb|e resu|ts. Overa|| tbe economlc and po|ltlca|
envlronment remalned detrlmenta| to buslnesses.
Metr|c 7oos
Net Sa|es 19,451 16,973 2,478 14
Cost o| Sa|es -14,798 -13,928 -87O 6
Gross Pro|lt 4,653 3,O55 1,598 52
Pro|lt |rom operatlons 2,844 2,533 311 12
Plnance Cost -2,162 -2,O22 -14O 7
Pro|lt 8e|ore Tax 682 511 171 33
Taxatlon -485 -2OO -285 142
Pro|lt A|ter Tax 197 311 -114 -36
2O11
Year ended 3O
[une
2O1O
Year ended 3O
[une
Cbange
Year on Year
%
Conso|idated Financia| Performance
Rupees in mi||ion
Tbe conso|ldated sa|es and operatlng lncome lncreased to Ps 19.45
bl||lon |rom Ps 16.97 bl||lon ln tbe prevlous year yle|dlng a growtb
o| 14%. Tbe conso|ldated operatlng pro|lt |or tbe year lncreased to
Ps 2.8 bl||lon as agalnst Ps 2.5 bl||lon ln tbe prevlous year reglsterlng
a growtb o| 12%. Tbe conso|ldated net pro|lt be|ore tax lncreased
to Ps 682 ml||lon |rom Ps 511 ml||lon ln tbe prevlous year reglsterlng
a growtb o| 33%.
Tbe lmprovement ln group |lnancla| resu|ts ls attrlbutab|e to strong
customer base o| tbe group. Desplte rec|lnlng sa|es vo|umes o| tbe
paper sack dlvlslon, tbe revenues lmproved s|lgbt|y as compared to
|ast year due to better product prlces. Tbe rlslng energy and
transportatlon costs welgbed on pro|lt marglns o| paper sack dlvlslon
wblcb dec|lned to 16.65% ln tbe case.
Due to dependence o| tbe paper sack dlvlslon on cement lndustry,
tbe expected lncrease ln cement demand ls |lke|y to bave a posltlve
lmpact on tbe net revenues o| tbe dlvlslon. Tbe boverlng rlsk o|
lncrease ln cost o| lmported raw materla|, bowever, mlgbt take lts
sbare o| tbe net marglns.
5taff and Customers
We wlsb to record our appreclatlon o| contlnued commltment o|
our emp|oyees and patronage o| our customers.
Por and on beba|| o| tbe 8oard
Mlan Paza Mansba
Cble| Lxecutlve O||lcer
Labore: O7 September 2O11
AUDlTOR5' RPORT TO TH MMBR5
We bave audlted tbe annexed conso|ldated |lnancla| statements o| D.G. Khan Cement Company Limited {the ho|ding
company) and lts subsldlary company Nlsbat Paper Products Company Llmlted comprlslng conso|ldated ba|ance sbeet as at
3O [une 2O11 and tbe re|ated conso|ldated pro|lt and |oss account, conso|ldated statement o| comprebenslve lncome, conso|ldated
casb ||ow statement and conso|ldated statement o| cbanges ln equlty togetber wltb tbe notes |ormlng part tbereo|, |or tbe
year tben ended. We bave a|so expressed separate oplnlon on tbe |lnancla| statements o| D.G. Kban Cement Company Llmlted.
Tbe |lnancla| statements o| tbe subsldlary company Nlsbat Paper Products Company Llmlted was audlted by anotber |lrm o|
cbartered accountants, wbose audlt report bas been |urnlsbed to us and our oplnlon ln so |ar as lt re|ates to tbe amounts
lnc|uded |or sucb company, ls based so|e|y on tbe report o| otber audltor.
Tbese conso|ldated |lnancla| statements are tbe responslbl|lty o| tbe Ho|dlng Company's management. Our responslbl|lty ls
to express our oplnlon on tbese conso|ldated |lnancla| statements based on our audlt.
We conducted our audlt ln accordance wltb tbe audltlng standards as app|lcab|e ln Paklstan. Tbese standards requlre tbat we
p|an and per|orm tbe audlt to obtaln reasonab|e assurance about wbetber tbe above sald statements are |ree o| any materla|
mlsstatement. An audlt lnc|udes examlnlng, on a test basls, evldence supportlng tbe amounts and dlsc|osures ln tbe above sald
statements. An audlt a|so lnc|udes assesslng tbe accountlng po|lcles and slgnl|lcant estlmates made by management, as we||
as, eva|uatlng tbe overa|| presentatlon o| tbe above sald statements. We be|leve tbat our audlt provldes a reasonab|e basls |or
our oplnlon.
|n our oplnlon tbe conso|ldated |lnancla| statements present |alr|y tbe conso|ldated |lnancla| posltlon o| D. G. Kban Cement
Company Llmlted and lts subsldlary company, Nlsbat Paper Products Company Llmlted, as at 3O [une 2O11 and tbe conso|ldated
resu|ts o| lts operatlons, lts conso|ldated statement o| comprebenslve lncome, lts conso|ldated casb ||ows statement and
conso|ldated statement o| cbanges ln equlty |or tbe year tben ended ln accordance wltb tbe approved accountlng standards
as app|lcab|e ln Paklstan.
KPMG Taseer Hadl & Co.
(8l|a| A|l)
Labore
September O7, 2O11
CON5OLlDATD BALANC 5HT
2011 2010
QUlTY AND LlABlLlTl5
CAPlTAL AND R5RV5
Authorised capita|
95O,OOO,OOO (2O1O: 95O,OOO,OOO) ordlnary sbares o| Ps 1O eacb 9,500,000 9,5OO,OOO
5O,OOO,OOO (2O1O: 5O,OOO,OOO) pre|erence sbares o| Ps 1O eacb 500,000 5OO,OOO
10,000,000 1O,OOO,OOO
|ssued, subscrlbed and pald up caplta| 3 4,381,192 3,65O,993
Peserves 4 24,996,406 22,199,5O1
Accumu|ated pro|lt 939,916 755,856
30,317,514 26,6O6,35O
Non-contro||lng lnterest 341,409 328,3O8
30,658,923 26,934,658
NON-CURRNT LlABlLlTl5
Long term |lnances 5 4,960,579 5,229,5O7
Llabl|ltles agalnst assets subject to |lnance |ease 6 - -
Long term deposlts 7 70,893 81,138
Petlrement and otber bene|lts 8 139,213 1O4,O29
De|erred taxatlon 9 1,730,886 1,451,96O
6,901,571 6,866,634
CURRNT LlABlLlTl5
Trade and otber payab|es 1O 1,847,505 1,83O,315
Accrued markup 11 304,800 376,277
Sbort term borrowlng - secured 12 9,362,051 1O,O8O,232
Current portlon o| non-current |labl|ltles 13 2,131,566 2,369,438
Provlslon |or taxatlon 35,090 35,O9O
13,681,012 14,691,352
CONTlNGNCl5 AND COMMlTMNT5 14
51,241,506 48,492,644
Chief xecutive
A5 AT jUN 30, 2011
2011 2010
A55T5
NON-CURRNT A55T5
Property, p|ant and equlpment 15 25,707,179 26,446,199
Assets subject to |lnance |ease 16 - 675
Caplta| work ln progress 17 1,373,820 465,65O
|nvestments 18 5,055,787 4,493,293
Long term |oans, advances and deposlts 19 134,125 159,583
32,270,911 31,565,4OO
CURRNT A55T5
Stores, spares and |oose too|s 2O 3,604,954 3,O49,4O9
Stock-ln-trade 21 1,513,014 1,636,829
Trade debts 22 650,283 462,367
|nvestments 23 12,126,367 1O,74O,986
Advances, deposlts, prepayments and otber recelvab|es 24 866,678 774,711
Casb and bank ba|ances 25 209,299 262,942
18,970,595 16,927,244
51,241,506 48,492,644
Director
CON5OLlDATD PROFlT AND LO55 ACCOUNT
2011 2010
Sa|es - net 26 19,451,360 16,973,236
Cost o| sa|es 27 {14,797,866) (13,928,614)
Gross profit 4,653,494 3,O44,622
Admlnlstratlve expenses 28 {216,927) (176,497)
Se||lng and dlstrlbutlon expenses 29 {2,484,622) (1,OO5,271)
Otber operatlng expenses 3O {50,303) (2O4,791)
Otber operatlng lncome 31 1,061,199 875,O85
|mpalrment on lnvestment {118,836) -
Profit from operations 2,844,005 2,533,148
Plnance cost 32 {2,162,145) (2,O22,399)
Profit before tax 681,860 51O,749
Taxatlon 33 {484,698) (199,973)
Profit for the year 197,161 31O,776
Attrlbutab|e to :
Lqulty bo|ders o| tbe parent 184,060 271,9O2
Non-Contro||lng lnterest 13,101 38,874
197,161 31O,776
Pestated
Comblned earnlngs per sbare - baslc and dl|uted 34 0.43 O.71
CON5OLlDATD 5TATMNT OF COMPRHN5lV lNCOM
2011 2010
Profit after taxation 197,161 31O,776
Other comprehensive income :
Avai|ab|e for sa|e financia| assets
- Cbange ln |alr va|ue 2,185,542 4,2O9,53O
- Pea|lzed galn tbrougb pro|lt and |oss account - (58,772)
- |mpalrment |oss tbrougb pro|lt and |oss account {118,836) -
Otber comprebenslve lncome |or tbe year - net o| taxes 2,066,706 4,15O,758
Tota| comprehensive income for the year 2,263,867 4,461,534
Lqulty bo|ders o| tbe parent 2,250,766 4,422,66O
Non-Contro||lng lnterest 13,101 38,874
2,263,867 4,461,534
2011 2010
Cash f|ows from operating activities
Casb generated |rom operatlons 35 2,994,125 3,335,369
Plnance cost pald {2,233,622) (2,215,424)
Petlrement and otber bene|lts pald {19,793) (11,368)
Taxes pald {351,688) (3O1,273)
Long term deposlts - net {10,245) 7,373
Net cash generated from operating activities 378,777 814,677
Cash f|ows from investing activities
Caplta| expendlture lnc|udlng purcbase
o| property, p|ant and equlpment {1,674,080) (1,O82,9O4)
Proceeds |rom sa|e o| property, p|ant and equlpment 41,037 38,961
|nvestments - net - (249,445)
Long term |oans, advances and deposlts - net 23,693 8,6O2
Dlvldend recelved 951,355 766,399
|nterest recelved 2,287 1,779
Net cash used in investing activities {655,708) (516,6O8)
Cash f|ows from financing activities
Proceeds |rom lssuance o| sbare caplta| 1,460,398 1,216,998
Proceeds |rom |ong term |lnances 1,850,000 3,O5O,OOO
Pepayment o| |ong term |lnances {2,368,773) (5,196,224)
Pepayment o| |labl|ltles agalnst assets subject to |lnance |ease {155) (266)
Dlvldend pald {1) (25)
Net cash generated from / {used in) financing activities 941,469 (929,517)
Net increase/ {decrease) in cash and cash equiva|ents 664,538 (631,448)
Cash and cash equiva|ents at the beginning of year {9,817,290) (9,185,842)
Cash and cash equiva|ents at the end of year 36 {9,152,752) (9,817,29O)
CON5OLlDATD CA5H FLOW 5TATMNT
NOT5 TO TH CON5OLlDATD FlNANClAL 5TATMNT5
1 Lega| status and nature of business
Tbe Group comprlses o|
- D. G. Kban Cement Company Llmlted ("tbe Parent Company"), and
- Nlsbat Paper Products Company Llmlted ("tbe Subsldlary Company")
D. G. Kban Cement Llmlted ls a pub|lc |lmlted company lncorporated ln Paklstan and ls |lsted on Karacbl, Labore and
|s|amabad Stock Lxcbanges. |t ls prlnclpa||y engaged ln productlon and sa|e o| C|lnker, Ordlnary Port|and and Su|pbate
Peslstant Cement. Tbe reglstered o||lce o| tbe company ls sltuated at 53-A Lawrence Poad, Labore.
Nlsbat Paper Products Company Llmlted ls a pub|lc |lmlted company lncorporated ln Paklstan under tbe Companles
Ordlnance, 1984 on 23 [u|y 2OO4. |t ls prlnclpa||y engaged ln tbe manu|acture and sa|e o| paper products and packaglng
materla|.
2 5ummary of significant accounting po|icies
Tbe slgnl|lcant accountlng po|lcles adopted ln preparatlon o| tbese conso|ldated |lnancla| statements are set out be|ow:
2.1 Statement o| comp|lance
Tbese conso|ldated |lnancla| statements bave been prepared ln accordance wltb approved accountlng standards
as app|lcab|e ln Paklstan. Approved accountlng standards comprlse o| sucb |nternatlona| Plnancla| Peportlng
Standards (|PPSs) lssued by tbe |nternatlona| Accountlng Standard 8oard as are notl|led under tbe provlslons o|
tbe Companles Ordlnance, 1984. Wberever, tbe requlrements o| tbe Companles Ordlnance, 1984 or dlrectlves
lssued under tbe Companles Ordlnance, 1984 dl||er, tbe provlslon or dlrectlves o| tbe Companles Ordlnance,
1984 sba|| preval|.
2.2 8asls o| conso|ldatlon
Tbe conso|ldated |lnancla| statements lnc|ude tbe |lnancla| statements o| D. G. Kban Cement Company Llmlted
and lts subsldlary Nlsbat Paper Products Company Llmlted wltb 5O% bo|dlng (2O1O: 5O%) ("tbe Group Companles").
Subsldlary ls tbat enterprlse ln wblcb Parent Company dlrect|y or lndlrect|y contro|s, bene|lcla||y owns or bo|ds
more tban 5O% o| votlng securltles or otberwlse bas power to e|ect and appolnt more tben 5O% o| lts Dlrectors.
Tbe |lnancla| statements o| tbe subsldlary are lnc|uded ln tbe conso|ldated |lnancla| statements |rom tbe date
contro| commences untl| tbe date contro| ceases.
Tbe assets and |labl|ltles o| tbe subsldlary company bave been conso|ldated on a |lne by |lne basls and carrylng
va|ue o| lnvestments be|d by tbe Parent Company ls e|lmlnated agalnst tbe subsldlary sbarebo|ders' equlty ln tbe
conso|ldated |lnancla| statements. Materla| lntra-group ba|ances and transactlons bave been e|lmlnated.
Non-contro||lng lnterests are tbat part o| tbe net reserves o| tbe operatlon and o| net assets o| tbe subsldlary
attrlbutab|e to lnterests wblcb are not owned by tbe Group. Non-contro||lng lnterest ls presented as separate
ltem ln tbe conso|ldated |lnancla| statements.
2.3 8asls o| measurement
Tbese conso|ldated |lnancla| statements bave been prepared on tbe basls o| blstorlca| cost conventlon, except
|or reva|uatlon o| certaln |lnancla| lnstruments at |alr va|ue and recognltlon o| certaln emp|oyee retlrement bene|lts
at present va|ue.
Tbe preparatlon o| conso|ldated |lnancla| statements ln con|ormlty wltb approved accountlng standards requlres
management to make judgments, estlmates and assumptlons tbat a||ect tbe app|lcatlon o| po|lcles and reported
amounts o| assets and |labl|ltles, lncome and expenses. Tbe estlmates and assoclated assumptlons and judgments
are based on blstorlca| experlence and varlous otber |actors tbat are be|leved to be reasonab|e under tbe
clrcumstances, tbe resu|t o| wblcb |orm tbe basls o| maklng tbe judgments about carrylng va|ues o| assets and
|labl|ltles tbat are not readl|y apparent |rom otber sources. Actua| resu|ts may dl||er |rom tbese estlmates.
Tbe estlmates and under|ylng assumptlons are revlewed on an ongolng basls. Pevlslon to accountlng estlmates
are recognlzed ln tbe perlod ln wblcb tbe estlmate ls revlsed l| tbe revlslon e||ects on|y tbat perlod, or ln tbe
perlod o| revlslon and |uture perlods l| tbe revlslon a||ects botb current and |uture perlods. Tbe areas wbere
varlous assumptlons and estlmates are slgnl|lcant to Group's |lnancla| statements or wbere judgments were
exerclsed ln app|lcatlon o| accountlng po|lcles are:
- Provlslon |or taxatlon note 2.6
- Petlrement and otber bene|lts note 2.7
- Pesldua| va|ues and use|u| |lves
o| depreclab|e assets note 2.9
- |nterest rate and cross currency swaps note 2.18
- Provlslons and contlngencles note 2.2O
2.4 8orrowlngs
|nterest bearlng borrowlngs are recognlzed lnltla||y at |alr va|ue |ess attrlbutab|e transactlon cost. Subsequent
to lnltla| recognltlon, tbese are stated at amortlzed cost wltb any dl||erence between cost and redemptlon va|ue
belng recognlzed ln tbe pro|lt and |oss over tbe perlod o| tbe borrowlngs on an e||ectlve lnterest basls. Pre|erence
sbares, wblcb are mandatorl|y redeemab|e on a specl|lc date at tbe optlon o| tbe Group, are c|assl|led as |labl|ltles.
Tbe dlvldend on tbese pre|erence sbares are recognlsed ln tbe pro|lt and |oss account as |lnance cost. Plnance
costs are accounted |or on accrua| basls.
2.5 Leases
Plnance |eases
Leases wbere tbe Group bas substantla||y a|| tbe rlsks and rewards o| ownersblp are c|assl|led as |lnance |eases.
At lnceptlon, |lnance |eases are caplta|lsed at tbe |ower o| present va|ue o| mlnlmum |ease payments under tbe
|ease agreements and tbe |alr va|ue o| tbe assets, |ess accumu|ated depreclatlon and lmpalrment |oss, l| any.
Tbe re|ated renta| ob|lgatlons, net o| |lnance costs, are lnc|uded ln |labl|ltles agalnst assets subject to |lnance |ease
as re|erred to ln note 6. Tbe |labl|ltles are c|assl|led as current and non-current dependlng upon tbe tlmlng o|
tbe payment.
Mlnlmum |ease payments made under |lnance |eases are apportloned between tbe |lnance cost and tbe reductlon
o| tbe outstandlng |labl|lty. Tbe |lnance cost ls a||ocated to eacb perlod durlng tbe |ease term so as to produce
a constant perlodlc rate o| lnterest on tbe remalnlng ba|ance o| tbe |labl|lty. Contlngent |ease payments , l| any
are accounted |or by revlslng tbe mlnlmum |ease payments over tbe remalnlng term o| tbe |ease wben tbe |ease
adjustment ls con|lrmed. Tbe lnterest e|ement o| tbe renta| ls cbarged to lncome over tbe |ease term.
Assets acqulred under a |lnance |ease are depreclated over tbe estlmated use|u| |l|e o| tbe assets on reduclng
ba|ance metbod except p|ant and macblnery wblcb ls depreclated on stralgbt |lne metbod at tbe rates mentloned
ln note 16. Depreclatlon o| |eased assets ls cbarged to pro|lt.
year-end and adjusted l| lmpact o| depreclatlon ls slgnl|lcant.
Depreclatlon on addltlons to |eased assets ls cbarged |rom tbe montb ln wblcb an asset ls acqulred wbl|e no
depreclatlon ls cbarged |or tbe montb ln wblcb tbe asset ls dlsposed o||.
Operatlng |eases
Leases wbere a slgnl|lcant portlon o| tbe rlsks and rewards o| ownersblp are retalned by tbe |essor are c|assl|led
as operatlng |eases. Payments made under operatlng |eases (net o| any lncentlves recelved |rom tbe |essor) are
cbarged to pro|lt on a stralgbt-|lne basls over tbe |ease term.
2.6 Taxatlon
|ncome tax expense comprlses current and de|erred tax. |ncome tax ls recognlzed ln pro|lt and |oss except to
tbe extent tbat lt re|ates to ltems recognlzed dlrect|y ln equlty, ln wblcb case lt ls recognlzed ln equlty.
Current
Provlslon o| current tax ls based on tbe taxab|e lncome |or tbe year determlned ln accordance wltb tbe preval|lng
|aw |or taxatlon o| lncome. Tbe cbarge |or current tax ls ca|cu|ated uslng preval|lng tax rates or tax rates expected
to app|y to tbe pro|lt |or tbe year l| enacted a|ter taklng lnto account tax credlts, rebates and exemptlons, l| any.
Tbe cbarge |or current tax a|so lnc|udes adjustments, wbere consldered necessary, to provlslon |or tax made
ln prevlous years arlslng |rom assessments |ramed durlng tbe year |or sucb years.
De|erred
De|erred tax ls accounted |or uslng tbe ba|ance sbeet |labl|lty metbod ln respect o| a|| temporary dl||erences
arlslng |rom dl||erences between tbe carrylng amount o| assets and |labl|ltles ln tbe |lnancla| statements and tbe
correspondlng tax bases used ln tbe computatlon o| tbe taxab|e pro|lt. De|erred tax |labl|ltles are genera||y
recognlsed |or a|| taxab|e temporary dl||erences and de|erred tax assets are recognlsed to tbe extent tbat lt ls
probab|e tbat taxab|e pro|lts wl|| be aval|ab|e agalnst wblcb tbe deductlb|e temporary dl||erences, unused tax
|osses and tax credlts can be utl|lsed.
De|erred tax assets and |labl|ltles are ca|cu|ated at tbe rates tbat are expected to app|y to tbe perlod wben tbe
asset ls rea|lzed or tbe |labl|lty ls sett|ed, based on tbe tax rates (and tax |aws) tbat bave been enacted or substantlve|y
enacted by tbe ba|ance sbeet date. De|erred tax ls cbarged or credlted ln tbe pro|lt and |oss, except ln tbe case o| ltems
credlted or cbarged to equlty ln wblcb case lt ls lnc|uded ln tbe statement o| cbanges ln equlty.
2.7 Petlrement and otber bene|lts
Tbe maln |eatures o| tbe scbemes operated by tbe Group |or lts emp|oyees are as |o||ows:
D. G. Kban Cement Company Llmlted
Dej|ned henej|r |an
Tbe Parent Company operates an approved |unded de|lned bene|lt gratulty p|an |or a|| emp|oyees bavlng a
servlce perlod o| more tban |lve years |or management sta|| and one year |or workers. Provlslons are made ln
tbe |lnancla| statements to cover ob|lgatlons on tbe basls o| actuarla| va|uatlons carrled out annua||y. Tbe most
recent va|uatlon was carrled out as at 3O [une 2O11 uslng tbe "Projected Unlt Credlt Metbod".
Tbe amount recognlsed ln ba|ance sbeet represents tbe present va|ue o| tbe de|lned bene|lt ob|lgatlon as on 3O
[une 2O11 as adjusted |or unrecognlsed actuarla| galns and |osses.
Cumu|atlve net unrecognlsed actuarla| galns and |osses at tbe end o| tbe prevlous year wblcb exceed 1O% o|
tbe greater o| tbe present va|ue o| tbe Parent Company ob|lgatlons and tbe |alr va|ue o| p|an assets are amortlsed
over tbe expected average worklng |lves o| tbe partlclpatlng emp|oyees.
Dej|ned cenr|har|en |an
Tbe Parent Company operates a recognlzed provldent |und |or a|| lts regu|ar emp|oyees. Lqua| montb|y
contrlbutlons are made to tbe |und botb by tbe Parent Company and tbe emp|oyees at tbe rate o| 1O% o| tbe
baslc sa|ary |or o||lcers and 1O% o| baslc sa|ary p|us cost o| |lvlng a||owance |or workers. Ob|lgatlon |or
contrlbutlons to de|lned contrlbutlon p|an ls recognlzed as an expense ln tbe pro|lt and |oss account as and wben
lncurred.
Accama|ar|ng cemensared ahsences
Tbe Parent Company provldes |or accumu|atlng compensated absences, wben tbe emp|oyees render servlce
tbat lncrease tbelr entlt|ement to |uture compensated absences. Under tbe servlce ru|es emp|oyees are entlt|ed
to 2.5 days |eave per montb. Unutl|lzed |eaves can be accumu|ated upto 9O days ln case o| o||lcers. Any ba|ance
ln excess o| 9O days can be encasbed upto 17 days a year on|y. Any |urtber unutl|lsed |eaves |apse. |n case o|
workers, unutl|lzed |eaves may be accumu|ated wltbout any |lmlt, bowever accumu|ated |eave ba|ance above
5O days ls encasbab|e upon demand o| tbe worker. Unutl|lzed |eaves can be used at any tlme by a|| emp|oyees,
subject to tbe approva| o| tbe Parent Company's management.
Provlslons are made annua||y to cover tbe ob|lgatlon |or accumu|atlng compensated absences based on actuarla|
va|uatlon and are cbarged to pro|lt and |oss account. Tbe most recent va|uatlon was carrled out as at 3O [une
2O11 uslng tbe "Projected Unlt Credlt Metbod".
Tbe amount recognlsed ln tbe ba|ance sbeet represents tbe present va|ue o| tbe de|lned bene|lt ob|lgatlons.
Actuarla| galns and |osses are cbarged to tbe pro|lt and |oss account lmmedlate|y ln tbe perlod wben tbese occur.
2.8 Trade and otber payab|es
Plnancla| |labl|ltles are lnltla||y recognlzed at |alr va|ue p|us dlrect|y attrlbutab|e cost, l| any, and subsequent|y at
amortlzed cost uslng e||ectlve lnterest rate metbod.
Otber amounts payab|e are carrled at cost wblcb ls tbe |alr va|ue o| tbe conslderatlon to be pald ln |uture |or
goods and servlces.
2.9 Property, p|ant and equlpment
Property, p|ant and equlpment except |reebo|d |and are stated at cost |ess accumu|ated depreclatlon and any
ldentl|led lmpalrment |oss. Preebo|d |and ls stated at cost |ess any ldentl|led lmpalrment |oss. Cost ln re|atlon
to certaln property, p|ant and equlpment slgnl|les blstorlca| cost, galns and |osses trans|erred |rom equlty on
qua|l|ylng casb ||ow bedges as re|erred to ln note 2.18 and borrowlng costs as re|erred to ln note 2.21.
Depreclatlon on a|| property, p|ant and equlpment ls cbarged to pro|lt on tbe reduclng ba|ance metbod, except
|or p|ant and macblnery wblcb ls belng depreclated uslng tbe stralgbt |lne metbod, so as to wrlte o|| tbe blstorlca|
cost o| sucb asset over lts estlmated use|u| |l|e at annua| rates mentloned ln note 15 a|ter taklng lnto account
tbelr resldua| va|ues.
year end.
Depreclatlon on addltlons to property, p|ant and equlpment ls cbarged |rom tbe montb ln wblcb tbe asset ls
acqulred or caplta|lsed, wbl|e no depreclatlon ls cbarged |or tbe montb ln wblcb tbe asset ls dlsposed o||.
Tbe Group assesses at eacb ba|ance sbeet date wbetber tbere ls any lndlcatlon tbat property, p|ant and equlpment
may be lmpalred. || sucb lndlcatlon exlsts, tbe carrylng amounts o| sucb assets are revlewed to assess wbetber
tbey are recorded ln excess o| tbelr recoverab|e amount. Wbere carrylng va|ues exceed tbe respectlve recoverab|e
amount, assets are wrltten down to tbelr recoverab|e amounts and tbe resu|tlng lmpalrment |oss ls recognlsed
ln pro|lt and |oss account. Tbe recoverab|e amount ls tbe blgber o| an asset's |alr va|ue |ess costs to se|| and va|ue
ln use. Wbere an lmpalrment |oss ls recognlsed, tbe depreclatlon cbarge ls adjusted ln tbe |uture perlods to
a||ocate tbe asset's revlsed carrylng amount over lts estlmated use|u| |l|e.
Subsequent costs are lnc|uded ln tbe asset's carrylng amount or recognlsed as a separate asset, as approprlate,
on|y wben lt ls probab|e tbat |uture economlc bene|lts assoclated wltb tbe ltem wl|| ||ow to tbe Group and tbe
cost o| tbe ltem can be measured re|lab|y. A|| otber repalr and malntenance costs are cbarged to pro|lt and |oss
durlng tbe perlod ln wblcb tbey are lncurred.
Tbe galn or |oss on dlsposa| or retlrement o| an asset represented by tbe dl||erence between tbe sa|e proceeds
and tbe carrylng amount o| tbe asset ls recognlsed as an lncome or expense.
2.1O Caplta| work-ln-progress
Caplta| work ln progress and stores be|d |or caplta| expendlture are stated at cost |ess any ldentl|led lmpalrment
|oss and represents expendlture lncurred on property, p|ant and equlpment durlng tbe constructlon and lnsta||atlon.
Cost a|so lnc|udes app|lcab|e borrowlng costs. Trans|ers are made to re|evant property, p|ant and equlpment
category as and wben assets are aval|ab|e |or use.
2.11 |nvestments
|nzesrmenrs |n eqa|rj |nsramenrs ej assec|ared ceman|es
Assoclates are a|| entltles over wblcb tbe Group bas slgnl|lcant ln||uence but not contro|. |nvestments ln assoclates
are accounted |or uslng tbe equlty metbod o| accountlng and are lnltla||y recognlsed at cost. Tbe Group's
lnvestment ln assoclates lnc|udes goodwl|| (net o| any accumu|ated lmpalrment |oss) ldentl|led on acqulsltlon.
Tbe Group's sbare o| lts assoclates' post acqulsltlon pro|lts or |osses ls recognlsed ln tbe lncome statement, and
lts sbare o| post-acqulsltlon movements ln reserves ls recognlsed ln reserves. Tbe cumu|atlve post-acqulsltlon
movements are adjusted agalnst tbe carrylng amount o| tbe lnvestment. Wben tbe Group's sbare o| |osses ln
an assoclate equa|s or exceeds lts lnterest ln tbe assoclate, lnc|udlng any otber unsecured recelvab|es, tbe Group
does not recognlse |urtber |osses, un|ess lt bas lncurred ob|lgatlons or made payments on beba|| o| tbe assoclate.
Unrea|lsed galns on transactlons between tbe Group and lts assoclates are e|lmlnated to tbe extent o| tbe Group's
lnterest ln tbe assoclates. Unrea|lsed |osses are a|so e|lmlnated un|ess tbe transactlon provldes evldence o| an
lmpalrment o| tbe as trans|erred.
Aza||ah|e je sa|e
|nvestments wblcb are lntended to be be|d |or an lnde|lnlte perlod o| tlme but may be so|d ln response to tbe
need |or |lquldlty are c|assl|led as aval|ab|e |or sa|e. Aval|ab|e |or sa|e lnvestments are recognlsed lnltla||y at |alr
va|ue p|us any dlrect|y attrlbutab|e transactlon costs. A|ter lnltla| recognltlon, tbese are stated at |alr va|ues un|ess
|alr va|ues can not be measured re|lab|y, wltb any resu|tlng galns and |osses belng taken dlrect|y to equlty untl|
tbe lnvestment ls dlsposed or lmpalred. At eacb reportlng date, tbese lnvestments are remeasured at |alr va|ue,
un|ess |alr va|ue cannot be re|lab|y measured. At tbe tlme o| dlsposa|, tbe respectlve surp|us or de|lclt ls trans|erred
to Pro|lt & Loss. Palr va|ue o| quoted lnvestments ls tbelr bld prlce on Karacbl Stock Lxcbange at tbe ba|ance
sbeet date. Unquoted lnvestments, wbere actlve market does not exlst, are carrled at cost as lt ls not posslb|e
to app|y any otber va|uatlon metbodo|ogy.
|nvestments lntended to be be|d |or |ess tban twe|ve montbs |rom tbe ba|ance sbeet date or to be so|d to ralse
operatlng caplta|, are lnc|uded ln current assets, a|| otber lnvestments are c|assl|led as non-current. Management
determlnes tbe approprlate c|assl|lcatlon o| lts lnvestments at tbe tlme o| tbe purcbase and re-eva|uates sucb
deslgnatlon on a regu|ar basls.
|nzesrmenrs ar ja| za|ae rheagh ej|r e |ess
|nvestments tbat are acqulred prlnclpa||y |or tbe purpose o| generatlng a pro|lt |rom sbort-term ||uctuatlons ln prlce
are c|assl|led as at |alr va|ue tbrougb pro|lt or |oss and are lnc|uded ln current assets. Tbey are lnltla||y measured at
cost and at subsequent reportlng dates, tbese lnvestments are remeasured at |alr va|ue (quoted market prlce), un|ess
|alr va|ue cannot be re|lab|y measured. Tbe lnvestments |or wblcb a quoted market prlce ls not aval|ab|e, are measured
at cost as lt ls not posslb|e to app|y any otber va|uatlon metbodo|ogy. Pea|lsed and unrea|lsed galns and |osses arlslng
|rom cbanges ln |alr va|ue are lnc|uded ln net pro|lt or |oss |or tbe perlod ln wblcb tbey arlse.
A|| purcbases and sa|es o| lnvestments are recognlsed on tbe trade date wblcb ls tbe date tbat tbe Group commlts
to purcbase or se|| tbe lnvestment.
At subsequent reportlng dates, tbe Group revlews tbe carrylng amounts o| tbe lnvestments to assess wbetber
tbere ls any lndlcatlon tbat sucb lnvestments bave su||ered an lmpalrment |oss. || any sucb lndlcatlon exlsts, tbe
recoverab|e amount ls estlmated ln order to determlne tbe extent o| tbe lmpalrment |oss, l| any. |mpalrment
|osses are recognlsed as expense. Wbere an lmpalrment |oss subsequent|y reverses, tbe carrylng amount o| tbe
lnvestment ls lncreased to tbe revlsed recoverab|e amount but |lmlted to tbe extent o| lnltla| cost o| tbe lnvestment.
A reversa| o| tbe lmpalrment |oss ls recognlsed ln lncome.
2.12 Stores and spares
Usab|e stores and spares are va|ued prlnclpa||y at movlng average cost, wbl|e ltems consldered obso|ete are
carrled at nl| va|ue. |tems ln translt are va|ued at cost comprlslng lnvolce va|ue p|us otber cbarges pald tbereon.
2.13 Stock-ln-trade
Stock o| raw materla|s, except |or tbose ln translt, work ln process and |lnlsbed goods are va|ued prlnclpa||y at
tbe |ower o| average cost and net rea|lsab|e va|ue. Stock o| packlng materla| ls va|ued prlnclpa||y at movlng average
cost. Cost o| work ln process and |lnlsbed goods comprlses cost o| dlrect materla|s, |abour and approprlate
manu|acturlng overbeads.
Materla|s ln translt are stated at cost comprlslng lnvolce va|ue p|us otber cbarges pald tbereon.
Net rea|lsab|e va|ue slgnl|les tbe estlmated se||lng prlce ln tbe ordlnary course o| buslness |ess costs necessary
to be lncurred ln order to make a sa|e.
2.14 Plnancla| assets and |labl|ltles
Plnancla| assets and |labl|ltles are recognlzed wben tbe Group becomes a party to tbe contractua| provlslons o|
tbe lnstrument. A|| |lnancla| assets and |labl|ltles are lnltla||y measured at cost, wblcb ls tbe |alr va|ue o| tbe
conslderatlon glven and recelved respectlve|y. Tbese |lnancla| assets and |labl|ltles are subsequent|y measured at
|alr va|ue, amortlsed cost or cost, as tbe case may be. Tbe partlcu|ar measurement metbods adopted are dlsc|osed
ln tbe lndlvldua| po|lcy statements assoclated wltb eacb ltem.
2.15 O||settlng o| |lnancla| assets and |lnancla| |labl|ltles
A |lnancla| asset and a |lnancla| |labl|lty ls o||set and tbe net amount ls reported ln tbe ba|ance sbeet l| tbe Group
bas a |ega||y en|orceab|e rlgbt to set-o|| tbe recognlzed amounts and lntends eltber to sett|e on a net basls or to
rea|lze tbe asset and sett|e tbe |labl|lty slmu|taneous|y.
2.16 Trade debts
Trade debts are carrled at orlglna| lnvolce amount |ess an estlmate made |or doubt|u| debts based on a revlew
o| a|| outstandlng amounts at tbe year end. 8ad debts are wrltten o|| wben ldentl|led.
2.17 Casb and casb equlva|ents
Casb and casb equlva|ents are carrled ln tbe ba|ance sbeet at cost. Por tbe purpose o| casb ||ow statement, casb
and casb equlva|ents comprlse casb ln band, demand deposlts, otber sbort term blgb|y |lquld lnvestments tbat
are readl|y convertlb|e to known amounts o| casb and wblcb are subject to an lnslgnl|lcant rlsk o| cbange ln va|ue
and sbort term borrowlngs. |n tbe ba|ance sbeet, sbort term borrowlngs are lnc|uded ln current |labl|ltles.
2.18 Derlvatlve |lnancla| lnstruments and bedglng actlvltles
Tbese are lnltla||y recorded at |alr va|ue on tbe date on wblcb a derlvatlve contract ls entered lnto and subsequent|y
measured at |alr va|ue. Tbe metbod o| recognlslng tbe resu|tlng galn or |oss depends on wbetber tbe derlvatlve
ls deslgnated as a bedglng lnstrument, and l| so, tbe nature o| tbe ltem belng bedged. Tbe Group deslgnates
certaln derlvatlves as casb ||ow bedges.
Tbe Group documents at tbe lnceptlon o| tbe transactlon tbe re|atlonsblp between tbe bedglng lnstruments and
bedged ltems, as we|| as lts rlsk management objectlve and strategy |or undertaklng varlous bedge transactlons.
Tbe Group a|so documents lts assessment, botb at bedge lnceptlon and on an ongolng basls, o| wbetber tbe
derlvatlves tbat are used ln bedglng transactlons are blgb|y e||ectlve ln o||settlng cbanges ln casb ||ow o| bedged
ltems. Derlvatlves are carrled as asset wben tbe |alr va|ue ls posltlve and |labl|ltles wben tbe |alr va|ue ls negatlve.
Tbe e||ectlve portlon o| cbanges ln tbe |alr va|ue o| derlvatlves tbat are deslgnated and qua|l|y as casb ||ow bedges
are recognlsed ln equlty. Tbe galn or |oss re|atlng to tbe lne||ectlve portlon ls recognlsed lmmedlate|y ln tbe pro|lt
and |oss account.
Amounts accumu|ated ln equlty are recognlsed ln pro|lt and |oss account ln tbe perlods wben tbe bedged ltem
wl|| e||ect pro|lt or |oss. However, wben tbe |orecast bedged transactlon resu|ts ln tbe recognltlon o| a non-
|lnancla| asset or a |labl|lty, tbe galns and |osses prevlous|y de|erred ln equlty are trans|erred |rom equlty and
lnc|uded ln tbe lnltla| measurement o| tbe cost o| tbe asset or |labl|lty.
Any galns or |osses arlslng |rom cbange ln |alr va|ue derlvatlves tbat do not qua|l|y |or bedge accountlng are taken
dlrect|y to pro|lt and |oss.
2.19 Porelgn currencles
A|| monetary assets and |labl|ltles ln |orelgn currencles are trans|ated lnto rupees at excbange rates preval|lng
at tbe ba|ance sbeet date. Transactlons ln |orelgn currencles are trans|ated lnto rupees at excbange rates preval|lng
at tbe date o| transactlon. Non-monetary assets and |labl|ltles tbat are measured ln terms o| blstorlca| cost ln a
|orelgn currency are trans|ated lnto rupees at excbange rates preval|lng at tbe date o| transactlon. Non-monetary
assets and |labl|ltles denomlnated ln |orelgn currency tbat are stated at |alr va|ue are trans|ated lnto rupees at
excbange rates preval|lng at tbe date wben |alr va|ues are determlned. Lxcbange galns and |osses are lnc|uded
ln tbe Pro|lt & Loss.
2.2O Provlslons
Provlslons are recognlzed wben tbe Group bas a |ega| or constructlve ob|lgatlon as a resu|t o| past events and
lt ls probab|e tbat an out||ow o| resources embodylng economlc bene|lts wl|| be requlred to sett|e tbe ob|lgatlon
and a re|lab|e estlmate o| tbe amount can be made. However, provlslons are revlewed at eacb ba|ance sbeet
date and adjusted to re||ect current best estlmate.
2.21 8orrowlng costs
Mark-up, lnterest and otber cbarges on borrowlngs are caplta|lsed upto tbe date o| commlsslonlng o| tbe re|ated
property, p|ant and equlpment acqulred out o| tbe proceeds o| sucb borrowlngs. A|| otber mark-up, lnterest
and otber cbarges are cbarged to pro|lt ln wblcb tbey are lncurred.
2.22 Pevenue recognltlon
Pevenue represents tbe |alr va|ue o| tbe conslderatlon recelved or recelvab|e |or goods so|d, net o| dlscounts
and sa|es tax. Pevenue ls recognlzed wben lt ls probab|e tbat tbe economlc bene|lts assoclated wltb tbe transactlon
wl|| ||ow to tbe Group and tbe amount o| revenue, and tbe assoclated cost lncurred, or to be lncurred, can be
measured re|lab|y.
Pevenue |rom sa|e o| goods ls recognlsed wben tbe slgnl|lcant rlsk and rewards o| owner sblp o| tbe goods are
trans|erred to tbe buyer l.e. on tbe dlspatcb o| goods to tbe customers. Peturn on deposlts ls accrued on a tlme
proportlon basls by re|erence to tbe prlnclpa| outstandlng and tbe app|lcab|e rate o| return. Dlvldend lncome
on equlty lnvestments ls recognlsed as lncome wben tbe rlgbt o| recelpt ls estab|lsbed.
2.23 Dlvldend
Dlvldend dlstrlbutlon to tbe sbarebo|ders ls recognlsed as a |labl|lty ln tbe perlod ln wblcb tbe dlvldends are approved.
2.24 Pe|ated party transactlons
Tbe Group enters lnto transactlons wltb re|ated partles on an arm's |engtb basls. Prlces |or transactlons wltb
re|ated partles are determlned uslng admlsslb|e va|uatlon metbods, except ln extreme|y rare clrcumstances
wbere, subject to approva| o| tbe 8oard o| Dlrectors, lt ls ln tbe lnterest o| tbe Group to do so.
2.25 Standards and amendments to pub|lsbed approved |nternatlona| Plnancla| Peportlng Standards not yet e||ectlve
Tbe |o||owlng new standards and amendments to standards are not e||ectlve |or tbe year ended 3O [une 2O11,
and bave not been app|led ln preparlng tbese conso|ldated |lnancla| statements.
- |mprovements to |PPSs 2O1O - |PPS 7 Plnancla| |nstruments: Dlsc|osures (e||ectlve |or annua| perlods beglnnlng
on or a|ter 1 [anuary 2O11) . Tbe amendments add an exp|lclt statement tbat qua|ltatlve dlsc|osure sbou|d be
made ln tbe contact o| tbe quantltatlve dlsc|osures to better enab|e users to eva|uate an entlty's exposure to
rlsks arlslng |rom |lnancla| lnstruments. |n addltlon, tbe |AS8 amended and removed exlstlng dlsc|osure requlrements.
- |AS 24 Pe|ated Party Dlsc|osures: (revlsed 2OO9) (e||ectlve |or annua| perlods beglnnlng on or a|ter 1 [anuary
2O11) Tbe revlsed |AS 24 amends tbe de|lnltlon o| a re|ated party and modl|les certaln re|ated party dlsc|osure
requlrements |or government-re|ated entltles.
- Prepayments o| a Mlnlmum Pundlng Pequlrement (Amendments to |PP|C 14) (e||ectlve |or annua| perlods
beglnnlng on or a|ter 1 [anuary 2O11). Tbese amendments remove unlntended consequences arlslng |rom tbe
treatment o| prepayments wbere tbere ls a mlnlmum |undlng requlrement. Tbese amendments resu|t ln
prepayments o| contrlbutlons ln certaln clrcumstances belng recognlsed as an asset ratber tban an expense.
- |mprovements to |PPSs 2O1O - |AS 1 Presentatlon o| Plnancla| Statements (e||ectlve |or annua| perlods beglnnlng
on or a|ter 1 [anuary 2O11). Tbe amendments c|arl|y tbat dlsaggregatlon o| cbanges ln eacb component o| equlty
arlslng |rom transactlons recognlsed ln otber comprebenslve lncome a|so ls requlred to be presented, but may
be presented eltber ln tbe statement o| cbanges ln equlty or ln tbe notes.
- |mprovements to |PPSs 2O1O - |PP|C 13 Customer Loya|ty Programmes (e||ectlve |or annua| perlods beglnnlng on
or a|ter 1 [anuary 2O11). Tbe amendments c|arl|y tbat tbe |alr va|ue o| award credlts takes lnto account tbe amount
o| dlscounts or lncentlves tbat otberwlse wou|d be o||ered to customers tbat bave not earned tbe award credlts.
Apart |rom above certaln otber standards, amendments to pub|lsbed standards and lnterpretatlons o| accountlng
standards became e||ectlve |or accountlng perlods beglnnlng on or a|ter 1 [anuary 2O11, bowever, tbey do not
a||ect tbe Group's |lnancla| statements.
3 lssued, subscribed and paid up capita|
3.1 |ssued, subscrlbed and pald up caplta|
2011 2010 2011 2010
(Number o| sbares) ----(Pupees ln tbousand)----
343,512,030 27O,492,177 Ordlnary sbares o| Ps. 1O eacb |u||y
pald ln casb 3,435,121 2,7O4,922
20,000,000 2O,OOO,OOO Ordlnary sbares o| Ps.1O eacb lssued
|or conslderatlon otber tban casb 200,000 2OO,OOO
74,607,089 74,6O7,O89 Ordlnary sbares o| Ps. 1O eacb lssued
as |u||y pald bonus sbares 746,071 746,O71
438,119,119 365,O99,266 4,381,192 3,65O,993
137,574,2O1 (2O1O: 114,645,168) ordlnary sbares o| tbe Parent Company are be|d by Nlsbat Ml||s Llmlted, an assoclated
concern as at 3O [une 2O11. |n addltlon 1,4O7,944 (2O1O: 1,4O7,944) ordlnary sbares are be|d by tbe Adamjee |nsurance
Company Llmlted, a re|ated party as at 3O [une 2O11.
2011 2010
----(Number o| sbares)----
3.2 Peconcl|latlon o| number o| sbares
Number o| sbares as at O1 [u|y 365,099,266 3O4,249,388
|ssued durlng tbe year ln casb 73,019,853 6O,849,878
Number o| sbares as at 3O [une 438,119,119 365,O99,266
2011 2010
4 Reserves
Movement ln and composltlon o| reserves ls as |o||ows:
Capita| Reserves
Shae em|am 4.1
Addltlons durlng tbe year 730,199 6O8,499
At tbe end o| tbe year 4,557,164 3,826,965
|a| za|ae esezes 4.2
Palr va|ue adjustments durlng tbe year 2,066,706 4,15O,758
At tbe end o| tbe year 14,974,881 12,9O8,175
Ca|ra| edemr|en eseze jand 4.3 353,510 353,51O
19,885,555 17,O88,65O
Revenue reserves
Cenea| esezes
At tbe beglnnlng o| tbe year 5,110,851 5,11O,851
Trans|er |rom pro|lt and |oss account - -
At tbe end o| tbe year 5,110,851 5,11O,851
24,996,406 22,199,5O1
4.1 Tbls reserve can be utl|lsed by tbe Group on|y |or tbe purposes specl|led ln sectlon 83(2) o| tbe Companles
Ordlnance, 1984.
4.2 As re|erred to ln note 2.11 tbls represents tbe unrea|lsed galn on remeasurement o| lnvestments at |alr va|ue and
ls not aval|ab|e |or dlstrlbutlon. Tbls amount wl|| be trans|erred to pro|lt and |oss account on rea|lsatlon.
4.3 Tbls represents |und created |or redemptlon o| pre|erence sbares. |n accordance wltb tbe terms o| lssue o|
pre|erence sbare, to ensure tlme|y payments, tbe Group was requlred to malntaln a redemptlon |und wltb respect
to pre|erence sbares. Tbe Group bad created a redemptlon |und and approprlated Ps. 7.4 ml||lon eacb montb |rom
tbe pro|lt and |oss account ln order to ensure tbat |und ba|ance at redemptlon date ls equa| to tbe prlnclpa| amount
o| tbe pre|erence sbares. Tbe pre|erence sbares bave been redeemed durlng tbe year ended 3O [une 2OO7.
2011 2010
5 Long term finances
Tbese are composed o|:
- Long term |oans 5.1 & 5.2 6,277,627 7,592,988
- Loan under musbarlka arrangement 5.3 807,500 -
7,085,127 7,592,988
Less: Current portlon sbown under current |labl|ltles 12 2,124,548 2,363,481
4,960,579 5,229,5O7
5.1 Long term |oans
Rate of
|u||y repald durlng
tbe year
29 September 2O11
16 November 2O11
endlng 3O December
2O11
lnsta||ment endlng
3O September 2O12
lnsta||ment endlng
16 Marcb 2O14
lnsta||ment endlng
3O [une 2O12
lnsta||ments endlng
31 Marcb 2O15
lnsta||ments endlng
3O [une 2O16
lnsta||ments endlng
3O November 2O15
11 Hablb 8ank Llmlted 50,000 15O,OOO 8ase rate + 1.15% 1 seml annua| Quarter|y
lnsta||ments endlng
14 [u|y 2O11
12 Hablb 8ank Llmlted 100,000 14O,OOO 8ase rate + 1.65% 5 equa| seml annua| Qurater|y
lnsta||ments endlng
2 [une 2O14
13 Hablb 8ank Llmlted 60,000 8O,OOO 8ase rate + 1.65% 6 equa| seml annua| Quarter|y
lnsta||ments endlng
1O [u|y 2O15
lnsta||ments endlng
[une 2O16
lnsta||ments endlng
31 December 2O16
US$ 16.193 ml||lon lnsta||ments endlng
6,277,627 7,592,988
8ase rate
8ase rate
5.2 Tbese |oans are secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe Group
upto Ps. 13,53O ml||lon (2O1O: Ps. 16,547 ml||lon). Tbese |oans are a|so secured by |lrst exc|uslve cbarge o| Ps. 96O
ml||lon (2O1O: Ps. 96O ml||lon) over |easebo|d rlgbt o| |and togetber wltb bul|dlng, structure, |lxture, p|ant and
macblnery and persona| guarantees o| tbe CLO o| tbe Group.
|acl|lty ls secured by a reglstered |lrst parl passu cbarge on a|| present and |uture |lxed assets o| tbe Parent Company
ln |avour o| tbe 8ank.
2011 2010
6 Liabi|ities against assets subject to finance |ease
Present va|ue o| mlnlmum |ease payments - 155
Less: Current portlon sbown under current |labl|ltles - 155
- -
Tbe mlnlmum |ease payments bave been dlscounted at an lmp|lclt lnterest rate o| Nl| (2O1O: 9.48%) per annum to arrlve
at tbelr present va|ue. Penta|s are pald ln montb|y lnsta||ments. Lessee bas tbe optlon to purcbase tbe assets a|ter explry
o| tbe |ease term.
Taxes, repalrs and lnsurance costs are to be borne by tbe Group. |n case o| termlnatlon o| tbe agreement, tbe Group
ls to pay tbe entlre rent |or tbe unexplred perlod o| |ease agreement.
Tbe amount o| |uture payments o| tbe |ease and tbe perlod ln wblcb tbese payments wl|| become due are as |o||ows:
Mlnlmum Puture Present va|ue o|
|ease |lnance |ease |labl|lty
payments cost 2011 2O1O
----(P u p e e s l n t b o u s a n d)----
Years
Not |ater tban one year - - - 155
- - - 155
2011 2010
7 Long term deposits
Customers 33,252 32,167
Otbers 37,641 48,971
70,893 81,138
Tbese represent lnterest |ree securlty deposlts |rom stocklsts and supp|lers and are repayab|e on cance||atlon/wltbdrawa|
o| tbe dea|ersblp or on cessatlon o| buslness wltb tbe Group respectlve|y.
2011 2010
8 Retirement and other benefits
Sta|| gratulty 8.1 87,673 6O,678
Leave encasbment 8.2 51,540 43,351
139,213 1O4,O29
8.1 Sta|| gratulty - net
Tbe amounts recognlsed ln tbe ba|ance sbeet are as |o||ows :
bene|lt ob|lgatlon 127,910 75,264
Palr va|ue o| p|an assets {332) (394)
8ene|lts payab|e 25 323
Unrecognlsed actuarla| |osses {39,930) (14,515)
8.1.1 Cbange ln present va|ue o| de|lned bene|lt ob|lgatlon
Llabl|lty as at O1 [u|y 60,678 4O,537
Cbarge |or tbe year lnc|udlng caplta|lzed durlng tbe year 30,727 23,O86
Contrlbutlons p|us bene|lt payments made dlrect|y
by tbe Parent Company durlng tbe year {3,732) (2,945)
2011 2010
Present va|ue o| de|lned bene|lt ob|lgatlon as at O1 [u|y 75,264 56,O4O
8ene|lts due but not pald {25) (323)
Actuarla| (galn)/|oss on present va|ue o| de|lned
bene|lt ob|lgatlon 25,954 (46)
8.1.3 Movement ln |alr va|ue o| p|an assets
Palr va|ue o| p|an assets as at O1 [u|y 394 274
Contrlbutlons durlng tbe year 3,732 2,945
8ene|lts pald durlng tbe year {3,799) (2,83O)
Actuarla| (|oss) on p|an assets 1 (28)
Palr va|ue o| p|an assets as at 3O [une 332 394
8.1.4 Actua| return on p|an assets
Actuarla| (|oss) on p|an assets 1 (28)
5 5
8.1.5 P|an assets conslst o| tbe |o||owlng :
Casb and otber deposlts 332 394
8.1.6 Movement ln unrecognlsed actuarla| |osses
Un recognlsed actuarla| |osses as at O1 [u|y {14,515) (15,344)
Actuarla| galns / (|osses) arlslng durlng tbe year {25,954) 18
Un recognlsed actuarla| |osses as at 3O [une {39,931) (14,515)
Lxpected return on p|an assets {4) (33)
30,727 23,O86
2011 2010 2009 2008 2007
Present va|ue o| de|lned bene|lt
ob|lgatlon 127,910 75,264 56,O4O 33,122 22,741
Present va|ue o| p|an assets {332) (394) (274) (1) (36)
De|lclt ln tbe p|an 127,578 74,87O 55,766 33,121 22,7O5
Lxperlence adjustment arlslng
on p|an |labl|ltles 25,954 (46) 8,85O 1,414 2,859
on p|an assets 1 (28) - (39) (2)
8.1.9 Assumptlons used |or va|uatlon o| tbe de|lned bene|lt scbemes |or management and non-management sta|| are
as under:
2011 2O1O
Dlscount rate Pe annam 14% 12%
Lxpected rate o| lncrease ln sa|ary Pe annam 14% 11%
Lxpected rate o| return on p|an assets Pe annam 1% 12%
Average expected remalnlng worklng |l|e
tlme o| emp|oyee Namhe ej jeas 13 12
8.1.1O Tbe parent company expects to pay Ps. 38.21 ml||lon ln contrlbutlons to de|lned bene|lts p|an ln 2O12.
2011 2010
8.2 Leave encasbment
Openlng ba|ance 43,351 38,O85
Lxpenses recognlzed 25,466 15,O23
Payments made {10,259) (3,955)
58,558 49,153
C|oslng ba|ance 51,540 43,351
Present va|ue o| de|lned bene|lt ob|lgatlon as at O1 [u|y 43,351 38,O85
Actuarla| |oss on present va|ue o| de|lned bene|lt ob|lgatlon 8,115 587
Actuarla| |osses cbarged to pro|lt durlng tbe year 8,115 587
25,466 15,O23
2011 2010 2009 2008 2007
Present va|ue o| de|lned bene|lt
ob|lgatlon 51,540 49,153 42,553 31,O62 25,839
on p|an |labl|ltles 8,115 587 5,969 3,O1O 2,168
8.2.4 Assumptlons used |or va|uatlon o| tbe accumu|atlng compensated absences are as under:
2011 2010
Dlscount rate Pe annam 14% 12%
Lxpected rate o| lncrease ln sa|ary Pe annam 14% 11%
Average expected remalnlng worklng
|l|e tlme o| emp|oyees Namhe ej jeas 13 12
Lxpected wltbdrawa| and ear|y retlrement rate 8ased on experlence
Officers Workers
2011 2010 2011 2010
{days) {days) {days) {days)
Average number o| |eaves
- Utl|lzed per annum 16.00 14.OO 18.00 19.OO
- Lncasbed per annum 6.00 6.OO 6.00 6.OO
- Utl|lzed per annum ln excess o| accrued
|eave o| 3O days 1.00 1.OO 2.00 2.OO
- Lncasbed per annum ln excess o| accrued
|eave o| 3O days 0.25 O.25 1.00 1.OO
2011 2010
9 Deferred taxation
Tbe |labl|lty |or de|erred taxatlon comprlses temporary dl||erences re|atlng to:
De|erred tax |labl|lty
Acce|erated tax depreclatlon 4,748,662 4,5O1,13O
De|erred tax assets
Provlslon |or retlrement and otber bene|lts {36,200) (23,64O)
Unabsorbed tax credlts {2,981,576) (3,O25,53O)
1,730,886 1,451,96O
2011 2010
10 Trade and other payab|es
Trade credltors 286,704 449,619
Customers' ba|ances 686,990 552,463
Due to re|ated partles 1,778 1,778
Accrued |labl|ltles 370,460 3O8,6O3
Workers' Pro|lt Partlclpatlon Pund 1O.1 45,262 3O,35O
Workers We||are Pund 31.2 2,095 81,156
Sa|es Tax payab|e 15,722 32,85O
Pedera| Lxclse Duty payab|e 169,864 221,636
Specla| Lxclse Duty payab|e 18,541 959
Custom Duty payab|e 57,453 58,O33
Wltbbo|dlng tax payab|e 5,851 6,564
Petentlon money 12,790 2O,5O8
Unc|almed dlvldend 4,870 4,869
Advances agalnst sa|e o| scrap 936 1,O3O
Advances agalnst sa|e o| |lxed asset 63,110 -
Pedeemab|e pre|erence sbares (non-votlng) - unsecured 125 127
Otber payab|es 104,954 59,77O
1,847,505 1,83O,315
1O.1 Workers' Pro|lt Partlclpatlon Pund
8a|ance as at O1 [u|y 30,350 41,724
Provlslon |or tbe year 3O 37,155 3O,35O
|nterest |or tbe year 32 1,090 2,O51
68,595 74,125
Less: Payments made durlng tbe year 23,333 43,775
8a|ance as at 3O [une 45,262 3O,35O
11 Accrued markup
Long term |lnances 162,903 198,OO6
Sbort term borrowlng - secured 141,813 178,187
Pre|erred dlvldend on redeemab|e pre|erence sbares 84 84
304,800 376,277
12 5hort term borrowing - secured
Sbort term runnlng |lnances 12.1 4,182,210 8,336,O46
|mport |lnances 12.2 1,635,201 1,744,186
Lxport re|lnance 12.3 3,487,140 -
Morababa |lnance 12.4 57,500 -
9,362,051 1O,O8O,232
12.1 Sbort term runnlng |lnances
Sbort term runnlng |lnances aval|ab|e |rom a consortlum o| commercla| banks under mark up arrangements
amount to Ps. 1O,282 ml||lon (2O1O: Ps. 1O,27O ml||lon). Tbe rates o| mark up range |rom 12.24% to 13.79%
(2O1O: 12.24% to 16.26.%) or part tbereo| on tbe ba|ance outstandlng. Tbese are secured by |lrst reglstered
cbarge on a|| present and |uture current assets o| tbe Group wberever sltuated lnc|udlng stores and spares, stock
ln trade, book debts, lnvestments, recelvab|es and p|edge o| 1O.75 ml||lon (2O1O: 1O.75 ml||lon) sbares o| MC8
8ank Llmlted, 1O ml||lon (2O1O: 1O ml||lon) sbares o| Nlsbat Ml||s Llmlted and 2.3 ml||lon (2O1O : 2.3 ml||lon)
sbares o| Adamjee |nsurance Company Llmlted.
12.2 |mport |lnances
Tbe Group bas obtalned lmport |lnance |acl|ltles aggregatlng to Ps. 4,9O3 ml||lon (2O1O: Ps. 4,187 ml||lon) |rom
commercla| banks. Tbe rates o| mark-up range |rom 2.26% to 15% (2O1O: 3.11% to 15.98%). Tbe aggregate
lmport |lnances are secured by a reglstered cbarge on a|| present and |uture current assets o| tbe Group wberever
sltuated lnc|udlng stores and spares, stock ln trade, book debts, lnvestments and recelvab|es.
O| tbe aggregate |acl|lty o| Ps. 9,O3O ml||lon (2O1O: Ps. 7,377 ml||lon) |or openlng |etters o| credlt and Ps. 1,61O
ml||lon (2O1O: Ps. 1,6O1 ml||lon) |or guarantees, tbe amount utl|lzed as at 3O [une 2O11 was Ps. 1,498 ml||lon
(2O1O: Ps. 1,653 ml||lon) and Ps. 1,112 ml||lon (2O1O: Ps. 99O ml||lon) respectlve|y. Tbe aggregate |acl|ltles |or
guarantees are secured by a reglstered cbarge on current assets o| tbe Group. O| tbe |acl|lty |or guarantees,
Ps. 14 ml||lon (2O1O: Ps. 43 ml||lon) ls secured by a |len over bank deposlts as re|erred to ln note 25.2.
12.3 Lxport re|lnance
Tbls represents LPP |oans obtalned |rom varlous commercla| banks, wblcb carry mark-up at 9.5% to 11% per
annum (2O1O: 7.5%). Tbese |oans are obtalned |or a perlod o| 18O days and are agalnst parl passu bypotbecatlon
cbarge over current assets o| tbe Group.
12.4 Murababab |lnance
Tbls represents Murababab |lnance |acl|lty obtalned amountlng to Ps 57.5 ml||lon (2O1O: Nl|). Tbe rates o| mark-
up range |rom 13.15% to 13.88% (2O1O: Nl|). Tbe murababab |lnance |acl|lty ls secured by |lrst parl-passu
bypotbecatlon cbarge wltb 25% margln amountlng to Ps 77 ml||lon on a|| present and |uture current assets o|
tbe Group.
2011 2010
13 Current portion of non-current |iabi|ities
Long term |lnances 5 2,124,548 2,363,481
Llabl|ltles agalnst assets subject to |lnance |ease 6 - 155
Petlrement and otber bene|lts 8.2 7,018 5,8O2
2,131,566 2,369,438
14 Contingencies and commitments
14.1 Contlngencles
14.1.1 Tbe |ncome Tax O||lcer, wbl|e |ramlng tbe assessments |or tbe assessment years 1984-85 to 199O-91, bas taxed
tbe lncome o| tbe Parent Company on account o| lnterest on deposlts and sa|e o| scrap etc. Tbe Appe||ate
Trlbuna| on appea| |l|ed by tbe Parent Company lssued an order ln |avour o| tbe Parent Company |or tbe
assessment years 1984-85 to 199O-91. Tbe |ncome Tax Department |l|ed re|erence be|ore tbe Labore Hlgb
Court. Pendlng |lna| outcome o| sucb re|erence, no adjustment bas been made ln tbese |lnancla| statements |or
tbe re|le| granted by tbe Appe||ate Trlbuna| aggregatlng Ps 35.O9O ml||lon.
14.1.2 Durlng tbe perlod 1994 to 1996, tbe Parent Company lmported p|ant and macblnery re|atlng to expanslon unlt,
|or wblcb exemptlon was c|almed under varlous SPOs |rom tbe |evy o| custom duty and otber dutles lnc|udlng
sa|es tax. As per tbe provlslons o| SPO 484 (|)/92, 978 (|)/95 and 569 (|)/95, tbe exemptlon |rom tbe statutory
duty wou|d be aval|ab|e on|y l| tbe sald p|ant and macblnery was not manu|actured |oca||y. However, tbe Custom
Autborltles rejected tbe c|alm o| tbe Parent Company by argulng tbat tbe sald macblnery was on tbe |lst o| |oca||y
manu|actured macblnery, pub|lsbed by tbe Pedera| 8oard o| Pevenue. Consequent|y, tbe Parent Company
appea|ed be|ore tbe Labore Hlgb Court, Mu|tan 8encb, wblcb a||owed tbe Parent Company to re|ease tbe
macblnery on |urnlsblng lndemnlty bonds wltb tbe Custom Autborltles.
Co||ector o| Customs and Centra| Lxclse, Mu|tan bas passed an order dated November 26, 1999, agalnst tbe
Parent Company on tbe grounds tbat tbe sald macblnery was belng manu|actured |oca||y durlng tbe tlme wben
lt was lmported. Tbe tota| demand as ralsed agalnst tbe Parent Company amounts to Ps. 715.372 out o| wblcb
Ps 2OO.645 ml||lon bas been pald.
An appea| agalnst tbe order was |l|ed wltb tbe Labore Hlgb Court, wblcb bas been declded ln |avour o| tbe Parent
Company. However, tbe Custom Autborltles bave |l|ed an appea| wltb tbe Supreme Court o| Paklstan agalnst tbe
orders o| tbe Labore Hlgb Court. Hence, no provlslon |or tbe ba|ance amount o| Ps 514.727 ml||lon bas been
made ln tbe |lnancla| statements as accordlng to tbe management o| tbe Parent Company tbere are merltorlous
grounds tbat tbe u|tlmate declslon wou|d be ln lts |avour.
14.1.3 Tbe Competltlon Commlsslon o| Paklstan (tbe CCP) took suo moto actlon under Competltlon Ordlnance, 2OO7
and lssued Sbow Cause Notlce on 28 October 2OO8 |or lncrease ln prlces o| cement across tbe country. Tbe
slml|ar notlces were a|so lssued to A|| Paklstan Cement Manu|acturers Assoclatlon (APCMA) and lts member
cement manu|acturers. Tbe Parent Company bas |l|ed a Wrlt Petltlon ln tbe Labore Hlgb Court. Tbe Labore Hlgb
Court, vlde lts order dated 24 August 2OO9 a||owed tbe CCP to lssue lts |lna| order. Tbe CCP accordlng|y passed
an order on 28 August 2OO9 and lmposed a pena|ty o| Ps. 933 ml||lon on tbe Parent Company. Tbe Labore Hlgb
Court vlde lts order dated 31 August 2OO9 restralned tbe CCP |rom en|orclng lts order agalnst tbe Parent Company
|or tbe tlme belng.
Tbe vlres o| tbe Competltlon Commlsslon o| Paklstan, 2OO7 bave been cba||enged by a |arge number o| Petltloners
and a|| bave been advlsed by tbelr |ega| counse|s tbat prlma |acle tbe Competltlon Commlsslon Ordlnance, 2OO7
ls u|tra vlres o| tbe Constltutlon. A |arge number o| grounds bave been ralsed by tbese Petltloners and tbe matter
ls current|y belng adjudlcated by tbe Labore Hlgb Court, tbe Slndb Hlgb Court and tbe Supreme Court o| Paklstan.
|n a|| tbese cases stay orders bave been granted by tbe Courts. 8ased on tbe |ega| oplnlon, tbe management ls
con|ldent tbat tbe Parent Company bas a good case and tbere are reasonab|e cbances o| success ln tbe pendlng
Petltlon ln tbe Supreme Court o| Paklstan.
14.1.4 Tbe matter re|atlng to lnterpretatlon o| provlslons o| sectlon 4(2) o| tbe repea|ed Centra| Lxclse Act, 1944 (1944
Act) bas now attalned |lna|lty a|ter bavlng belng adjudlcated by tbe bonourab|e Supreme Court o| Paklstan tbrougb
lts judgement dated 27 [anuary 2OO9 (upbo|dlng lts prevlous judgement dated 15 Pebruary 2OO7). Tbe |ongstandlng
controversy between tbe revenue department and tbe tax payers re|ated prlmarl|y to |lner lnterpretatlon o| tbe
provslons o| sectlon 4(2) o| tbe 1944 Act wbereln tbe department bad a vlew tbat exclse duty sba|| be lnc|uded
as a component |or determlnatlon o| tbe va|ue (retal| prlce) |or |evylng exclse duty. Tbe departmenta| vlew, belng
agalnst tbe splrlt o| |aw, was cba||enged by tbe taxpayers ln appea|s be|ore tbe bonourab|e Hlgb Courts o| tbe
country wblcb, du|y appreclatlng tbe contentlons o| tbe taxpayers, overturned tbe departmenta| vlew and succeeded
tbe appea|s.
Now slnce tbe controversy bas attalned |lna|lty up to tbe blgbest appe||ate |eve|, tbe Group bas lnltlated tbe
process o| c|almlng re|und o| excess exclse duty pald by lt durlng tbe perlods |rom 1994 to 1999 wblcb aggregates
to Ps 1,115.145 ml||lon. Tbe amount o| re|und, bowever, sba|| be lncorporated ln tbe books o| accounts once lt
ls rea|lsed by tbe Group.
14.1.5 Tbe Parent Company, consequent to tbe order passed by tbe Supreme Court o| Paklstan agalnst tbe declslon o|
tbe Slndb Hlgb Court ln tbe matter o| ln|rastructure cess, |l|ed a petltlon be|ore tbe Slndb Hlgb Court, cba||englng
tbe |evy o| |l|tb verslon o| tbe |aw en|orclng ln|rastructure cess. Lar|ler, tbe Slndb Hlgb Court, ln August 2OO8,
ru|ed out tbat on|y |evles computed agalnst conslgnments made on or a|ter 28 December 2OO6 sba|| be payab|e
by tbe petltloners. A|tbougb tbe partles bave reacbed an lnterlm arrangement, tbrougb an order o| Slndb Hlgb
Court dated 31 May 2O11, |or re|ease o| 5O% o| tbe guarantees (re|er 14.1.6), tbe |lna| order |rom Slndb Hlgb
Court ls stl|| pendlng. Accordlng to tbe |ega| counse| o| tbe Parent Company, cbances o| |avorab|e outcome o|
tbe appea| are |alr, bowever, as an abundant cautlon, provlslon |or 5O% o| tbe amount o| ln|rastructure cess
payab|e bas been lncorporated ln tbese |lnancla| statements amountlng to Ps. 89.164 ml||lon.
14.1.6 Tbe Group bas lssued |o||owlng guarantees ln |avour o| :
- Co||ector o| Customs, exclse and sa|es tax agalnst |evy o| sa|es tax, custom duty and exclse duty amountlng
to Ps. 2O.46O ml||lon (2O1O: Ps. 2O.46O ml||lon)
- Dlrector, Lxclse Co||ectlon O||lce, Slndb Deve|opment and Malntenance agalnst recovery o|
ln|rastructure |ee amountlng to Ps. 34O.9 ml||lon (2O1O: Ps. 24O.9 ml||lon).
- Dlrector Genera|, Mlnes and Mlnera|s, Punjab agalnst lnsta||atlon o| cement |actory near Kbalrpur, Dlstrlct
Cbakwa| amountlng to Ps. 3 ml||lon (2O1O: Ps. 3 ml||lon).
- Dlrector Genera|, Mlnes and Mlnera|s, Quetta agalnst Llmestone, sba|e amountlng to Ps. 3 ml||lon (2O1O:
Ps. 3 ml||lon).
- Tbe Presldent o| tbe |s|amlc Pepub|lc o| Paklstan agalnst tbe per|ormance o| a contract to Prontler Works
Organlzatlon amountlng to Ps 3 Ml||lon (2O1O: Ps. 3 ml||lon).
- Managlng Dlrector, Paklstan Pal|ways agalnst tbe per|ormance o| a contract amountlng to Ps. 3.852 ml||lon
(2O1O: Ps. 1.835 ml||lon).
- Sul Nortbern Gas Plpe|lnes Llmlted agalnst 6 MMCPD and 14 MMCPD Gas |or captlve power and |ndustrla|
use |or Kbalrpur Project and |or D.G. Kban Project amountlng to Ps. 715.455 ml||lon (2O1O: Ps. 715.455
ml||lon).
- Pro|esslona| Tax lmposed by Admlnlstratlon Zl|a Councl| (Tbe Dlstrlct Coordlnatlon O||lcer, DG Kban)
amountlng to Ps. 1O.O5O ml||lon (2O1O: Ps. O.O5O ml||lon).
- 8ank guarantee ln respect o| A|ternatlve Lnergy Deve|opment 8oard (ALD8) amountlng to Ps. 2.151 ml||lon
(2O1O: Ps. 2.14O ml||lon).
- Tbe Managlng Dlrector, Labore Waste Management Company (LWMC) agalnst tbe per|ormance o| a contract
amountlng to Ps. 1O ml||lon (2O1O: Nl|).
- Tbe Dlrector Lxclse and Taxatlon Government o| Slndb agalnst |evy o| ln|rastructure cess amountlng to
Ps. Nl| (2O1O: Ps. 28.2 ml||lon).
14.2 Commltments
(l) Contracts |or caplta| expendlture Ps 113.639 ml||lon (2O1O: Ps 115.335 ml||lon).
(ll) Letters o| credlt |or caplta| expendlture Ps 1,364.57 ml||lon (2O1O: Ps 41.891 ml||lon).
(lll) Letters o| credlt otber tban caplta| expendlture Ps 1,233.42 ml||lon (2O1O: Ps 1,547.811 ml||lon).
(lv) Tbe amount o| |uture payments under operatlng |eases and tbe perlod ln wblcb tbese payments wl||
become due are as |o||ows:
2011 2010
Not |ater tban one year 331 331
Later tban one year and not |ater tban |lve years 1,488 1,488
Later tban |lve years 6,501 6,833
8,320 8,652
15.3 Dlsposa| o| property, p|ant and equlment
Detal| o| property, p|ant and equlpment dlsposed o|| durlng tbe year ls as |o||ows:
quipment
M/s Nlsbat Ml||s Ltd. (re|ated party) 28,38O 5,299 23,O81 23,O81 - Negotlatlon
Sbabbaz 8rotbers 9O 28 62 1O (52) -do-
Vehic|es
Sbabzad Abmed 1,46O 741 719 1,4OO 681 Auctlon
Nadeem Mabmood 1,46O 76O 7OO 1,38O 68O Auctlon
[a|a| Mlrza 1,217 891 326 952 626 Auctlon
Umer Zameer 1,196 876 32O 863 543 Auctlon
Nadeem Abmed 1,119 761 358 8O1 443 Auctlon
Lngr. Pebmat A|l 1,1O5 8O9 296 8OO 5O4 Auctlon
Lngr. Pebmat A|l 998 73O 268 78O 512 Auctlon
Kb. Pakbar-u|-|s|am 965 7OO 265 955 69O Auctlon
Atlq-ur-Pebman 939 627 312 1,OO3 691 Auctlon
Kasbl| Manzoor 79O 527 263 777 514 Auctlon
Mr. |r|an Kban 749 469 28O 561 281 Auctlon
Atlq-ur-Pebman 571 257 314 623 3O9 Auctlon
Mr. Umer Zameer 566 428 138 391 253 Auctlon
Cb. Abtesbam-u|-Haq 56O 376 184 525 341 Auctlon
Securlty Genera| |nsurance (re|ated party) 56O 374 186 35O 164 |nsurance c|alm
Qadeer Abmed 56O 381 179 497 318 Auctlon
Pervalz Akbtar 555 32O 235 5OO 265 Auctlon
Securlty Genera| |nsurance (re|ated party) 483 169 314 55O 236 |nsurance c|alm
Abmad Subbanl 274 99 175 462 287 Auctlon
Zabld A|l Kban 275 99 176 511 335 Auctlon
Nabee| Plaz 272 1O6 166 528 362 Auctlon
Zeesban A|l Sbab 272 1O6 166 5O7 341 Auctlon
Nlsar Abmed Quresbl 272 1O9 163 567 4O4 Auctlon
Mubammad Nadeem 59 43 16 3O 14 Auctlon
Umer Zabeer 826 154 672 866 194 Auctlon
Naveed Patbore 672 5O 622 785 163 Auctlon
Others
Asset wltb book va|ue |ess tban
Ps. 5O,OOO 161 54 1O7 35 (72) Auctlon
2011 47,406 16,343 31,063 41,090 10,027
2O1O 44,671 12,559 32,112 38,961 6,849
Particu|ars
of assets
5o|d to Cost
Accumu|ated
depreciation
Book
va|ue
5a|es
proceeds
Mode of
Disposa|
Gain/{Loss)
on disposa|
15.1 Preebo|d |and and bul|dlng lnc|ude book va|ues o| Ps 12 ml||lon (2O1O: Ps 12 ml||lon) and Ps 7.475 ml||lon
(2O1O: Ps 7.868 ml||lon) respectlve|y wblcb are be|d ln tbe name o| Cble| Lxecutlve o| tbe Group. Tbls
property ls |ocated ln De|ense Houslng Autborlty, wbere tbe bye-|aws restrlct trans|er o| tlt|e o| tbe resldentla|
property ln tbe name o| tbe Group.
15.2 Tbe depreclatlon cbarge |or tbe year bas been a||ocated as |o||ows:
2011 2010
Cost o| sa|es 27 1,458,716 1,426,325
Admlnlstratlve expenses 28 13,O94 11,9O6
Se||lng and dlstrlbutlon expenses 29 2,729 1,373
1,474,539 1,439,6O4
2011 2010
16.1 Depreclatlon cbarge |or tbe year bas been a||ocated
as |o||ows:
Cost o| sa|es 27 4 56
17 Capita| work in progress
Clvl| works 206,776 84,874
P|ant and macblnery 925,123 226,353
Advances 74,190 28,988
Otbers 115,030 78,491
Lxpanslon project:
- Clvl| works 18,992 18,992
- Otbers 33,709 27,952
52,701 46,944
1,373,820 465,65O
18 lnvestments - Avai|ab|e for sa|e
Pe|ated partles 18.1 1,727,802 1,846,5O5
Otbers 18.2 387 519
1,728,189 1,847,O24
Peva|uatlon surp|us 3,327,598 2,646,269
5,055,787 4,493,293
16 Assets subject to finance |ease
Additions/
{de|etions)
veblc|es 2O11 2O 1,125 - (1,125) - 45O 4 (454) - -
veblc|es 2O1O 2O 1,125 - - 1,125 394 56 - 45O 675
Annua|
rate of
depreciation
%
Cost as at
30 june
2010
Accumu|ated
depreciation
as at 30 june
2010
Depreciation
charge/
{de|etions)
for the year
Book va|ue
as at
30 june
2011
Cost as at
30 june
2011
Transfer
in/ {out)
Accumu|ated
depreciation
as at 30 june
2011
Depreciation
written off
during
the year
2011 2010
18.1 Pe|ated partles
Quoted
Nishat Mi||s Limited - associated company
3O,289,5O1 (2O1O: 3O,289,5O1) |u||y pald ordlnary
sbares o| Ps. 1O eacb 1,577,174 1,577,174
Market va|ue - Ps 1,524.773 ml||lon (2O1O: Ps 1,3O6.O84 ml||lon)
Less: |mpalrment Loss {250,615) (25O,615)
1,326,559 1,326,559
Nishat {Chunian) Limited
4,926,9OO (2O1O: 4,926,9OO) |u||y pald ordlnary
sbares o| Ps 1O eacb 45,254 45,254
Market va|ue - Ps 1O9.821 ml||lon (2O1O: Ps 77.746 ml||lon)
MCB Bank Limited
16,OO7,OO2 (2O1O: 14,551,82O) |u||y pald ordlnary
sbares o| Ps 1O eacb 125,834 125,834
Market va|ue - Ps 3,19O.195 ml||lon (2O1O: Ps 2,825.817 ml||lon)
Adamjee lnsurance Company Limited - associated company
sbares o| Ps 1O eacb 348,858 348,858
Market va|ue - Ps 23O.155 ml||lon (2O1O: Ps 282.886 ml||lon)
Less: |mpalrment |oss {118,703) -
401,243 519,946
1,727,802 1,846,5O5
Nlsbat Ml||s Llmlted, Nlsbat Cbunlan Llmlted, MC8 8ank Llmlted and Adamjee |nsurance Company Llmlted are assoclated
undertaklngs as per tbe Companles Ordlnance, 1984, bowever, |or tbe purpose o| measurement, tbese bave been c|assl|led
as aval|ab|e |or sa|e and measured at |alr va|ue as tbe Parent Company does not bave slgnl|lcant ln||uence over tbese companles.
2011 2010
18.2 Otbers - quoted
Map|e Leaf Cement Factory Limited
29 154
1,999 (2O1O: 1,999) |u||y pald pre|erence sbares o| Ps 1O eacb 20 2O
Market va|ue - Ps O.OO98 ml||lon (2O1O: Ps O.O83 ml||lon)
10 17
First Capita| Mutua| Fund
89,OOO (2O1O: 89,OOO) certl|lcates o| Ps 1O eacb 890 89O
Market va|ue - Ps O.223 ml||lon (2O1O: Ps O.2O5 ml||lon)
212 212
Habib Bank Limited
18 18
2011 2010
Oi| and Gas Deve|opment Company Limited
Pakistan Petro|eum Limited
Kot Addu Power Company Limited
5OO (2O1O: 5OO) |u||y pald ordlnary sbares o| Ps 1O eacb 15 15
Market va|ue - Ps O.O21 ml||lon (2O1O: Ps O.O21 ml||lon) 387 519
18.3 |nvestments wltb a |ace va|ue o| Ps 23O.5 ml||lon (2O1O: Ps 23O.5 ml||lon) are p|edged as securlty agalnst bank
|acl|ltles. 2,9OO,277 (2O1O: 2,396,924) sbares o| MC8 8ank Llmlted are b|ocked ln CDC account.
2011 2010
19 Long term |oans, advances and deposits
Loans to emp|oyees - consldered good
- Lxecutlves 19.1 383 41O
- Otbers 3,550 3,2O4
3,933 3,614
Less: Pecelvab|e wltbln one year
- Lxecutlves 129 113
- Otbers 1,242 1,282
1,371 1,395
2,562 2,219
Loan to re|ated party - consldered good 19.2 103,234 12O,44O
Less : recelvab|e wltbln one year 24 17,206 17,2O6
86,028 1O3,234
Securlty deposlts 45,535 54,13O
134,125 159,583
19.1 Lxecutlves
Openlng ba|ance 410 17
Trans|er |rom Otbers to Lxecutlves 118 5O5
|nterest accrued 17 26
545 548
Less: Pepayments made durlng tbe year 162 138
383 41O
Tbese represent secured |oans glven to executlves and otber emp|oyees |or bouse bul|dlng and purcbase o|
motor veblc|es and are recoverab|e ln equa| montb|y lnsta||ments over a perlod o| 24 to 96 montbs. Tbe |oans
glven to executlves and otber emp|oyees carry lnterest at tbe rate 1O% per annum (2O1O: 1O% per annum)
except |or |oans glven to workers wblcb are lnterest |ree.
Tbe |oans o| Ps 3.933 ml||lon (2O1O: Ps 3.614 ml||lon) are secured agalnst tbe emp|oyees' respectlve retlrement
bene|lts.
Tbe maxlmum aggregate amount due |rom executlves at any tlme durlng tbe year was Ps O.528 ml||lon (2O1O:
Ps O.298 ml||lon).
19.2 Tbls represents un-secured |oan o| Ps 73.5O ml||lon and Ps 29.734 ml||lon (2O1O : Ps. 85.75O ml||lon and Ps.
34.69O ml||lon ) glven to Sul Nortbern Gas Plpe|lnes Llmlted |or tbe deve|opment o| ln|rastructure |or supp|y
o| natura| gas to tbe p|ants at D. G. Kban and Kbalrpur respectlve|y. Mark-up ls cbarged at rates ranglng |rom
1.5% to 2% per annum (2O1O: 1.5% to 2% per annum) respectlve|y and ls recelvab|e annua||y. Tbls amount
ls recelvab|e ln 6 annua| lnsta||ments endlng O1 [anuary 2O17 and 28 Marcb 2O18.
2011 2010
20 5tores, spares and |oose too|s
Stores |lnc|udlng ln translt Ps 32.191 ml||lon
(2O1O: Ps 9.556 ml||lon)] 1,236,893 878,326
Spares |lnc|udlng ln translt Ps 214.699 ml||lon
(2O1O: Ps. 3O6.O53 ml||lon)] 2,342,734 2,154,245
Loose too|s 25,327 16,838
3,604,954 3,O49,4O9
Stores and spares lnc|ude ltems wblcb may resu|t ln |lxed caplta|
expendlture but are not dlstlngulsbab|e.
21 5tock-in-trade
Paw materla|s 800,082 717,898
Packlng materla| |lnc|udlng ln translt Ps. 6.411 ml||lon
(2O1O: Ps Nl| )] 255,241 131,652
Work-ln-process 169,612 537,539
Plnlsbed goods 288,079 249,74O
1,513,014 1,636,829
22 Trade debts - considered good
Secured 594,306 411,398
Unsecured 54,629 -
- Pe|ated partles 22.1 1,348 2,776
- Otbers - 48,193
650,283 462,367
Nlsbat (Cbunlan) Llmlted 8 1,1OO
Nlsbat Power Llmlted - 1
Nlsbat Deve|opers 1,340 1,675
1,348 2,776
Tbese are ln tbe norma| course o| buslness and are lnterest |ree.
23 lnvestments
Aval|ab|e-|or-sa|e
Pe|ated partles 23.1 479,066 479,O66
Add: Peva|uatlon surp|us 11,647,283 1O,261,9O6
12,126,349 1O,74O,972
At |alr va|ue tbrougb pro|lt and |oss 23.2 18 14
12,126,367 1O,74O,986
2011 2010
23.1 Pe|ated partles-Quoted
Nishat {Chunian) Limited
83,159 (2O1O: 83,159) |u||y pald ordlnary
sbares o| Ps 1O eacb 832 832
Market va|ue - Ps 1.853 ml||lon (2O1O: Ps 1.312 ml||lon)
832 832
MCB Bank Limited
6O,835,4O2 (2O1O: 55,3O4,911) |u||y pald ordlnary
sbares o| Ps 1O eacb 478,234 478,234
Market va|ue Ps 12.124 ml||lon (2O1O: Ps 1O,739.661 ml||lon) 479,066 479,O66
Nlsbat (Cbunlan) Llmlted and MC8 8ank Llmlted are assoclated undertaklngs as per tbe Companles Ordlnance,
1984, bowever, |or tbe purpose o| measurement, tbese bave been c|assl|led as aval|ab|e |or sa|e and measured
at |alr va|ue as tbe Parent Company does not bave slgnl|lcant ln||uence over tbese companles.
2011 2010
23.2 At |alr va|ue tbrougb pro|lt and |oss
Habib Bank Limited
159 (2O1O: 145) |u||y pald ordlnary sbares o| Ps. 1O eacb
Market va|ue - Ps. O.O18 ml||lon (2O1O: Ps. O.O14 ml||lon)
18 14
24 Advances, deposits, prepayments and other receivab|es
Loans to emp|oyees - consldered good 19 3,160 1,395
Advances - consldered good
- to emp|oyees 24.1 4,834 2,621
- to trade supp|lers 23,759 85,186
28,593 87,8O7
Current portlon o| |ong term recelvab|e |rom re|ated party 19 17,206 17,2O6
Due |rom re|ated partles 24.2 15,202 3O,828
Mark-up recelvab|e |rom re|ated party 24.3 836 975
Derlvatlve |lnancla| lnstruments 24.4 1,303 9,422
Pro|lt recelvab|e on bank deposlts - 981
Prepayments 147 147
Letters o| credlt - marglns, deposlts, openlng cbarges, etc. 5,329 35,341
Lxclse duty recoverab|e - 3,O19
C|alms recoverab|e |rom government
|ncome tax 593,042 447,128
Sa|es tax 24.5 111,271 55,16O
Prelgbt subsldy 27,422 27,422
Lxport rebate 41,915 35,775
791,020 582,728
Otber recelvab|es 3,882 4,862
866,678 774,711
24.1 |nc|uded ln advances to emp|oyees are amounts due |rom executlves o| Ps 2.396 ml||lon (2O1O: Ps 1.OO9 ml||lon).
2011 2010
Nlsbat Ml||s Llmlted 24.2.1 14,568 3O,656
Nlsbat Splnnlng Ml||s Llmlted 191 -
La|plr Power Llmlted 443 -
Nlsbat Hote|s and Propertles Ltd. 24.2.1 - 172
15,202 3O,828
24.2.1 Tbese re|ate to norma| buslness o| tbe Group and are lnterest |ree.
24.3 Tbls lnc|udes mark-up recelvab|e |rom Sul Nortbern Gas Plpe|lnes Llmlted agalnst tbe |oan.
24.4 Tbe Parent Company bas entered lnto 9 |orward agreements wltb varlous banks |or a tota| amount o| USD 14.5
ml||lon (2O1O: USD 16.5), bavlng 1 to 6 montbs maturlty. Under |orward agreement, tbe Parent Company wou|d
se|| tbe contracted quantlty o| USD to tbe bank at tbe Contracted rate. As at 3O [une 2O11, tbe unrea|lzed galn
on tbese |orward contracts amounts to Ps. 1.3O3 ml||lon (2O1O :Ps. 9.422 ml||lon).
24.5 Sa|es tax recoverab|e represents amounts wblcb bave been recovered by tbe sa|es tax department agalnst
mlsce||aneous demands ralsed by lt. Tbe Group bas |l|ed appea|s agalnst tbe demands at dl||erent |orums.
2011 2010
----(Pupees ln tbousand)-----
25 Cash and bank ba|ances
At banks
Savlng accounts
Pak rupee 117,404 89,9O4
Porelgn currency US $ 22.2O (2OO9: US $ 22.22) 2 2
Current accounts 91,750 171,94O
209,156 261,846
Casb ln band 143 1,O96
209,299 262,942
25.1 Tbe ba|ances ln savlng accounts bear mark-up wblcb ranges |rom O.1% to 1O.4% per annum (2O1O: O.1% to
1O% per annum).
25.2 |nc|uded ln ba|ances at banks on savlng accounts are Ps 14.48O ml||lon (2O1O: Ps 14.48O ml||lon) wblcb are under
|len to secure bank guarantees re|erred to ln note 12.2.
2011 2010
26 5a|es - net
Loca| sa|es 18,023,235 19,326,9O6
Lxport sa|es 26.1 6,486,701 3,698,676
24,509,936 23,O25,582
Less: Government |evles 4,784,236 5,8OO,424
Commlsslon to stocklsts and export agents 274,340 251,922
5,058,576 6,O52,346
19,451,360 16,973,236
26.1 Lxport sa|es lnc|ude rebate on exports amountlng to Ps 31.488 ml||lon (2O1O: Ps 23.O2O ml||lon).
2011 2010
27 Cost of sa|es
Paw and packlng materla|s consumed 2,281,094 2,2O6,589
Sa|arles, wages and otber bene|lts 27.1 824,785 712,47O
L|ectrlclty and gas 1,880,289 2,OO9,152
Purnace ol| and coa| 6,171,495 6,O9O,197
Stores and spares consumed 1,345,248 1,1O6,859
Pepalr and malntenance 177,505 167,244
|nsurance 60,229 57,836
Depreclatlon on property, p|ant and equlpment 15.2 1,458,716 1,426,325
Depreclatlon on assets subject to |lnance |ease 16.1 4 56
Poya|ty 146,625 185,O52
Lega| and pro|esslona| cbarges 1,915 2,181
Trave||lng and conveyance 11,270 9,O71
Lstate deve|opment 15,298 12,514
Pent, rates and taxes 14,748 2,324
Prelgbt cbarges 11,593 4,952
Otber expenses 25,900 2O,376
14,478,571 14,O8O,952
Openlng work-ln-process 537,539 387,444
C|oslng work-ln-process {169,612) (537,539)
367,927 (15O,O95)
Cost o| goods manu|actured 14,846,498 13,93O,857
Openlng stock o| |lnlsbed goods 249,740 253,129
C|oslng stock o| |lnlsbed goods {288,079) (249,74O)
{38,339) 3,389
Less : own consumptlon 10,293 5,632
14,797,866 13,928,614
27.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 22.483 ml||lon (2O1O: Ps 19.292 ml||lon), Ps 2O.399 ml||lon (2O1O:
Ps 17.584 ml||lon) and Ps 15.9O7 ml||lon (2O1O: Ps 12.394 ml||lon) respectlve|y, ln respect o| provldent |und
contrlbutlon by tbe Group, provlslon |or gratulty and sta|| compensated absences.
2011 2010
28 Administrative expenses
L|ectrlclty, gas and water 5,908 3,868
Pepalr and malntenance 5,995 6,O79
|nsurance 1,869 1,627
Depreclatlon on property, p|ant and equlpment 15.2 13,094 11,9O6
Postage, te|epbone and te|egram 8,042 9,6O5
Lega| and pro|esslona| cbarges 28.2 9,225 8,951
Pent, rates and taxes 459 75
Lntertalnment 1,839 1,543
Scboo| expenses 15,083 11,292
Pee and subscrlptlon 7,681 4,948
Advances wrltten o|| 782 43
Otber expenses 5,908 4,565
216,927 176,497
28.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 4.377 ml||lon (2O1O: Ps 3.214 ml||lon), Ps. 7.983 ml||lon (2O1O: Ps.
3.464 ml||lon) and Ps 2.3O5 ml||lon (2O1O: Ps 1.6O4 ml||lon) respectlve|y, ln respect o| provldent |und contrlbutlon
by tbe Group, provlslon |or gratulty and sta|| compensated absences.
2011 2010
28.2 Lega| and pro|esslona| cbarges
Lega| and pro|esslona| cbarges lnc|ude tbe |o||owlng
ln respect o| audltors' servlces |or:
KPMG Taseer Hadl & Co.
Statutory audlt 1,250 1,1OO
Ha|| year|y revlew 270 25O
Certl|lcatlon and sundry servlces 50 5O
Out o| pocket expenses 70 1OO
A. P. Perguson & Co.
Statutory audlt - Subsldlary 400 275
Out o| pocket expenses 25 22
2,065 1,797
29 5e||ing and distribution expenses
Sa|arles, wages and otber bene|lts 29.1 64,225 54,5O7
L|ectrlclty, gas and water 1,277 1,1OO
Pepalr and malntenance 427 557
|nsurance 1,494 8O8
veblc|e runnlng 3,134 2,9O8
Lega| and pro|esslona| cbarges 633 16
Lntertalnment 529 585
Advertlsement and sa|es promotlon 3,056 5,3O9
Prelgbt cbarges -|oca| 11,148 9,656
Prelgbt and band|lng cbarges -export 2,386,545 916,975
Otber expenses 880 1,215
2,484,622 1,OO5,271
29.1 Sa|arles, wages and otber bene|lts lnc|ude Ps 2.61O ml||lon (2O1O: Ps 2.264 ml||lon), Ps 2.1O7 ml||lon (2O1O: Ps
1.975 ml||lon) and Ps 1.411 ml||lon (2O1O: Ps 1.O42 ml||lon) respectlve|y, ln respect o| provldent |und contrlbutlon
by tbe Group, provlslon |or gratulty and sta|| compensated absences.
2011 2010
Note -----(Pupees ln tbousand)----
30 Other operating expenses
Workers' Pro|lt Partlclpatlon Pund 37,155 3O,35O
Donatlons 3O.1 140 351
Worker We||are Pund 2,095 3O,189
Palr va|ue |oss on lnvestment - -
Lxcbange |oss 10,913 143,9O1
50,303 2O4,791
3O.1 None o| tbe dlrectors and tbelr spouses bad any lnterest
ln any o| tbe donees.
31 Other operating income
lncome from financia| assets
|ncome on bank deposlts 5,053 4,664
Palr va|ue galn on lnvestment 4 3
|nterest on |oans to emp|oyees 53 45
Galn on sa|e o| sbares - 79,215
Dlvldend lncome |rom:
- Pe|ated partles 31.1 951,330 765,93O
- Otbers 25 469
951,355 766,399
956,465 85O,326
lncome from non-financia| assets
Penta| lncome 677 1,886
Galn on dlsposa| o| property, p|ant and equlpment 10,027 6,849
Scrap sa|es 13,226 14,188
Mark-up on |oan/advances to re|ated partles 2,096 1,638
Provlslons and unc|almed ba|ances wrltten back 78,507 126
104,533 24,687
Otbers 201 72
1,061,199 875,O85
31.1 Dlvldend lncome |rom re|ated partles
Nlsbat Ml||s Llmlted 75,724 41,779
Nlsbat (Cbunlan) Llmlted 7,515 5O
MC8 8ank Llmlted 859,238 714,443
Adamjee |nsurance Company Llmlted 8,853 9,658
951,330 765,93O
31.2 Tbe Parent Company bas wrltten back tbe provlslons created on account o| Workers' We||are Pund re|atlng to
years 2OO7, 2OO9 and 2O1O based on tbe judgment lssued by tbe bonourab|e Labore Hlgb Court tbrougb order
19 August 2O11. Tbe Honourab|e court, tbrougb sucb order, bas be|d tbe amendments lntroduced to tbe Workers
We||are Pund Ordlnance, 1971 tbrougb Plnance Act, 2OO6 and Plnance Act, 2OO8 as u|tra vlres tbe constltutlon.
Accordlng|y, tbe Parent Company bas reverserd tbe provlslon made |or WWP, based on accountlng pro|lt, ln
respect o| above mentloned years.
2011 2010
32 Finance cost
|nterest and mark-up on:
- Long term |oans 815,554 788,898
- Sbort term borrowlngs 1,314,444 1,149,693
- Plnance |ease 2 27
- Workers' Pro|lt Partlclpatlon Pund 1,090 2,O51
(Galn) / |oss on derlvatlve |lnancla| lnstruments {27,468) 28,47O
Guarantee commlsslon 21,242 29,843
8ank cbarges 37,281 23,417
2,162,145 2,O22,399
32.1 Durlng tbe year borrowlng cost amountlng to Ps. Nl| (2O1O: Ps 15O.O84 ml||lon) bas been caplta|lzed ln tbe
property, p|ant and equlpment pertalnlng to tbe new expanslon project.
2011 2010
33 Provision for taxation
Por tbe year
- Current 33.1 {205,769) (1O9,591)
- De|erred {277,427) (9O,383)
{483,196) (199,974)
Prlor year
- Current {2) 1
- De|erred {1,500) -
{1,502) 1
{484,698) (199,973)
33.1 Provlslon |or taxatlon
33.1.1 Tbe Parent Company
Tbe provlslon |or current taxatlon represents mlnlmum tax under sectlon 113 o| tbe |ncome Tax Ordlnance,
2OO1 at tbe rate o| 1% o| turnover |orm |oca| sa|es. |n addltlon to tbls, lt lnc|udes tax on exports and renta|
lncome wblcb ls |u|| and |lna| dlscbarge o| tbe parent company's tax |labl|lty ln respect o| lncome arlslng |rom
sucb source.
33.1.2 Tbe Subsldlary Company
Tbe provlslon |or current taxatlon represents tax on export sa|es and dlvldend lncome.
33.2 Por purposes o| current taxatlon, tbe tax credlts aval|ab|e |or carry |orward as at 3O [une 2O11 are estlmated
approxlmate|y at Ps. 8,518.789 ml||lon (2O1O: Ps. 8,643.859 ml||lon).
33.3 Slnce tbe Group ls |lab|e to pay mlnlmum tax, tbere|ore, no numerlca| tax reconcl|latlon ls glven.
2011 2010
Pestated
34 arnings per share
34.1 Larnlngs per sbare-8aslc
Pro|lt |or tbe year - attrlbutab|e to
equlty bo|ders o| tbe Parent Company Pupees ln tbousand 184,060 271,9O2
Welgbted average number o| ordlnary sbare Number 426,974,164 38O,8O3,OO3
Larnlngs per sbare - baslc Pupees 0.43 O.71
34.2 Larnlngs per sbare - Dl|uted
Tbere ls no dl|utlon e||ect on tbe baslc earnlngs per sbare as tbe Group bas no sucb commltments.
2011 2010
35 Cash f|ow from operating activities
Pro|lt be|ore tax 681,860 51O,749
Adjustment |or :
- Depreclatlon on property, p|ant and equlpment 1,474,539 1,439,6O4
- Depreclatlon on assets subject to |lnance |ease 4 56
- Pro|lt on dlsposa| o| property, p|ant and equlpment {10,027) (6,849)
- Galn on dlsposa| on lnvestments - (79,215)
- Dlvldend lncome {951,355) (766,399)
- |mpalrment |oss on aval|ab|e |or sa|e lnvestments 118,836 -
- Markup lncome {2,096) (1,638)
- Palr va|ue galn on reva|uatlon o| lnvestment {4) (3)
- Petlrement and otber bene|lts accrued 56,193 38,1O9
- Lxcbange |oss - net 10,913 143,9O1
- Plnance cost 2,162,145 2,O22,399
2,859,148 2,789,965
Pro|lt be|ore worklng caplta| cbanges 3,541,008 3,3OO,714
L||ect on casb ||ow due to worklng caplta| cbanges:
- |ncrease ln stores, spares and |oose too|s {555,545) (84,569)
- (|ncrease)/ decrease ln stock-ln-trade 123,815 (613,599)
- Decrease/ (lncrease) ln trade debts {187,916) 194,619
- Decrease/ (lncrease) ln advances, deposlts, prepayments
and otber recelvab|es 55,573 154,O99
- |ncrease/ (decrease) ln trade and otber payab|es 17,190 384,1O5
{546,883) 34,655
Casb generated |rom operatlons 2,994,125 3,335,369
36 Cash and cash equiva|ents
Sbort term borrowlngs - secured {9,362,051) (1O,O8O,232)
Casb and bank ba|ances 209,299 262,942
{9,152,752) (9,817,29O)
Chief xecutive Directors xecutives
2011 2010 2011 2010 2011 2010
(Pupees ln tbousand) (Pupees ln tbousand) (Pupees ln tbousand)
Managerla| remuneratlon 7,496 6,518 12,630 1O,857 155,652 123,127
Contrlbutlons to provldent
and gratulty |unds - - 2,173 1,O31 23,467 1O,29O
Houslng 270 27O 1,082 939 50,006 39,469
Utl|ltles - - - - 10,637 8,289
Leave passage - - 984 635 4,711 3,173
Medlca| expenses 529 1,359 380 1O9 4,818 2,213
Otbers 4,547 4,843 1,087 2,163 35,918 39,117
12,842 12,99O 18,336 15,734 285,209 225,678
Number of persons 2 1 3 3 133 1O7
37 Remuneration of Chief xecutive, Directors and xecutives
37.1 Tbe aggregate amount cbarged ln tbe |lnancla| statements |or tbe year |or remuneratlon, lnc|udlng certaln bene|lts,
to tbe cble| executlve, |u|| tlme worklng dlrectors and executlves o| tbe Group ls as |o||ows:
Tbe Group a|so provldes tbe cble| executlve and some o| tbe dlrectors and executlves wltb |ree transport and
resldentla| te|epbones.
37.2 Pemuneratlon to otber dlrectors
Aggregate amount cbarged ln tbe |lnancla| statements |or tbe year |or |ee to 7 dlrectors (2O1O: 7 dlrectors) was
Ps Nl| (2O1O: Ps Nl|).
38 Transactions with re|ated parties
Tbe re|ated partles comprlse assoclated companles, otber re|ated companles, dlrectors o| tbe Group, key management
personne| and post emp|oyment bene|lt p|ans. Tbe dlrectors o| tbe re|ated companles are c|ose members o| tbe |aml|y
o| tbe dlrectors o| tbe Group. Tbe Group ln tbe norma| course o| buslness carrles out transactlons wltb varlous re|ated
partles. Amounts due |rom and due to re|ated partles are sbown under recelvab|es and payab|es, dlvldend lncome ls dlsc|osed
ln note 31, expense cbarged ln respect o| sta|| retlrement bene|lt p|ans ls dlsc|osed ln note 8 and remuneratlon o| tbe key
management personne| ls dlsc|osed ln note 37. Otber slgnl|lcant transactlons wltb re|ated partles are as |o||ows:
2011 2010
Re|ationship with the Group Nature of transaction
l. Pe|ated partles Sa|e o| goods 3O,882 29,OO2
Sa|e o| assets 23,187 -
|nsurance premlum 74,757 75,O46
Purcbase o| servlces 632,526 742,971
|nsurance c|alms recelved 2,468 2O2
Mark-up lncome on ba|ances
wltb re|ated partles 2,O96 2,414
Dlvldend lncome 951,33O 765,93O
ll. Key management personne| Sa|arles and otber emp|oyment bene|lts 31,178 28,724
lll. Post emp|oyment Lxpense cbarged ln respect o|
bene|lt p|ans sta|| retlrement bene|lt p|ans 56,193 38,1O9
A|| transactlons wltb re|ated partles bave been carrled out on commercla| terms and condltlons.
39 Financia| instruments
Tbe Group bas exposure to tbe |o||owlng rlsks |rom lts use o| |lnancla| lnstruments:
- Credlt rlsk
- Llquldlty rlsk
- Market rlsk
Tbe 8oard o| Dlrectors bave tbe overa|| responslbl|lty |or tbe estab|lsbment and overslgbt o| Group's rlsk management
|ramework. Tbe 8oard ls a|so responslb|e |or deve|oplng and monltorlng tbe Group's rlsk management po|lcles.
Tbls note presents ln|ormatlon about tbe Group's exposure to eacb o| tbe above rlsks, tbe Group's objectlves, po|lcles
and processes |or measurlng and managlng rlsk, and tbe Group's management o| caplta|.
Tbe Group's rlsk management po|lcles are estab|lsbed to ldentl|y and ana|yse tbe rlsks |aced by tbe Group, to set
approprlate rlsk |lmlts and contro|s, and to monltor rlsks and adberence to |lmlts. Plsk management po|lcles and systems
are revlewed regu|ar|y to react to cbanges ln market condltlons and tbe Group's actlvltles.
39.1 Credlt rlsk
Credlt rlsk ls tbe rlsk o| |lnancla| |oss to tbe Group l| a customer or counterparty to a |lnancla| lnstrument |al|s
to meet lts contractua| ob|lgatlons, and arlses prlnclpa||y |rom tbe Group's recelvab|es |rom customers and |oans
to/due |rom re|ated partles. Out o| tbe tota| |lnancla| assets o| Ps. 19,O43 ml||lon (2O1O: Ps. 16,894 ml||lon)
|lnancla| assets wblcb are subject to credlt rlsk amount to Ps. 18,251 ml||lon (2OO9: Ps. 16,3O7 ml||lon).
Tbe Group's exposure to credlt rlsk ls ln||uenced maln|y by tbe lndlvldua| cbaracterlstlcs o| eacb customer. To
manage exposure to credlt rlsk ln respect o| trade recelvab|es, management revlews credlt wortblness, re|erences,
estab|lsb purcbase |lmlts taklng lnto account tbe customer's |lnancla| posltlon, past experlence and otber |actors.
Lxport sa|es are secured tbrougb |etters o| credlt. Tbe management bas set a maxlmum credlt perlod o| 3O days
to reduce tbe credlt rlsk. Llmlts are revlewed perlodlca||y and tbe customers tbat |al| to meet tbe Group's
bencbmark credltwortblness may transact wltb tbe Group on|y on a prepayment basls.
Concentratlon o| credlt rlsk arlses wben a number o| counter partles are engaged ln slml|ar buslness actlvltles
or bave slml|ar economlc |eatures tbat wou|d cause tbelr abl|ltles to meet contractua| ob|lgatlon to be slml|ar|y
e||ected by tbe cbanges ln economlc, po|ltlca| or otber condltlons. Tbe Group be|leves tbat lt ls not exposed
to major concentratlon o| credlt rlsk.
Tbe carrylng amount o| |lnancla| assets represents tbe maxlmum credlt exposure be|ore any credlt enbancements.
Tbe maxlmum exposure to credlt rlsk at tbe reportlng date ls:
2011 2010
Aval|ab|e |or sa|e |lnancla| assets
- Non Current |nvestments 5,055,787 4,493,293
- Current |nvestments 12,126,367 1O,74O,986
Long term |oans, advances and deposlts 134,125 159,583
Trade debts 650,283 462,367
Advances, deposlts and otber recelvab|es 74,208 179,395
8ank ba|ances 209,156 261,846
Derlvatlve |lnancla| lnstruments 1,303 9,422
18,251,229 16,3O6,892
2011 2010
Tbe trade debts as at tbe ba|ance sbeet date are c|assl|led as |o||ows:
Porelgn 362,893 216,O93
Domestlc 287,390 246,274
650,283 462,367
Tbe aglng o| trade recelvab|es at tbe reportlng date ls:
Past due 1 - 3 Montbs 399,660 23O,788
Past due 4 - 6 Montbs 173,816 37,118
Past due 7 - 1O Montbs 6,170 36,552
Past due 11 - 12 Montbs 2,385 15,29O
Past due above one year 68,252 142,619
650,283 462,367
8ased on past experlence tbe management be|leves tbat no lmpalrment a||owance ls necessary ln respect o|
trade recelvab|es past due as some recelvab|es bave been recovered subsequent to tbe year end and |or otber
recelvab|es tbere are reasonab|e grounds to be|leve tbat tbe amounts wl|| be recovered ln sbort course o| tlme.
39.2 Llquldlty rlsk
Llquldlty rlsk ls tbe rlsk tbat tbe Group wl|| not be ab|e to meet lts |lnancla| ob|lgatlons as tbey |a|| due. Tbe
Group's approacb to managlng |lquldlty ls to ensure, as |ar as posslb|e, tbat lt wl|| a|ways bave su||lclent |lquldlty
to meet lts |labl|ltles wben due, under botb norma| and stressed condltlons. Por tbls purpose tbe Group bas
su||lclent runnlng |lnance |acl|ltles aval|ab|e |rom varlous commercla| banks to meet lts |lquldlty requlrements.
Purtber |lquldlty posltlon o| tbe Group ls c|ose|y monltored tbrougb budgets, casb ||ow projectlons and comparlson
wltb actua| resu|ts by tbe 8oard.
Po||owlng ls tbe maturlty ana|ysls o| |lnancla| |labl|ltles:
Less than 6 Between 6 to Between 1 to Between 6 to Over Tota|
months 12 months 5 years 10 years 10 years
--------------------(P u p e e s l n t b o u s a n d)--------------------
Long term |lnances (1,247,728) (933,O7O) (4,841,829) (62,5OO) - (7,O85,127)
Llabl|ltles agalnst assets
subject to |lnance |ease - - - - - -
Long term deposlts - - (7O,893) - - (7O,893)
Trade and otber payab|es (1,8O6,379) - - - - (1,8O6,379)
2O1O-2O11 (3,O54,1O7) (933,O7O) (4,912,722) (62,5OO) - (8,962,399)
Less than 6 Between 6 to Between 1 to Between 6 to Over Tota|
months 12 months 5 years 10 years 10 years
--------------------(P u p e e s l n t b o u s a n d)--------------------
Long term |lnances 1,O66,74O 1,296,741 4,817,OO7 412,5OO - 7,592,988
Llabl|ltles agalnst assets
subject to |lnance |ease - 155 - - - 155
Long term deposlts - - 81,138 - - 81,138
Trade and otber payab|es 539,269 - - - - 539,269
2OO9-2O1O 1,6O6,OO9 1,296,896 4,898,145 412,5OO - 8,213,55O
39.3 Market rlsk
Market rlsk ls tbe rlsk tbat cbanges ln market prlces, sucb as |orelgn excbange rates, lnterest rates and equlty
prlces wl|| a||ect tbe Group's lncome or tbe va|ue o| lts bo|dlngs o| |lnancla| lnstruments. Tbe objectlve o| market
rlsk management ls to manage and contro| market rlsk exposures wltbln acceptab|e parameters, wbl|e optlmlslng
tbe return.
39.3.1 Currency rlsk
Tbe Group ls exposed to currency rlsk on sa|es, purcbases and borrowlngs tbat are denomlnated ln a currency
otber tban tbe |unctlona| currency prlmarl|y U.S. Do||ars (USD). Tbe Group uses |orward excbange and derlvatlve
contracts to bedge lts currency rlsks. Tbe Group's exposure to |orelgn currency rlsk |or US Do||ars ls as |o||ows:
2011 2010
Porelgn debtors 362,893 216,O93
Porelgn currency bank accounts 2 2
Less: Long Term Loans {1,393,400) (2,O79,17O)
|mport Plnances {1,160,344) (1,6O2,5O7)
Lxport Pe|lnances {585,140) -
Payab|es {722) (5,O61)
Derlvatlve |lnancla| lnstruments - asset 1,303 9,422
Gross ba|ance sbeet exposure {2,775,408) (3,461,221)
Outstandlng |etter o| credlts {1,077,129) (711,699)
Net exposure {3,852,537) (4,172,92O)
Tbe |o||owlng slgnl|lcant excbange rates bave been app|led:
Peportlng date rate
2011 2010
USD to PKP - 8uy 85.85 85.4O
USD to PKP - Se|| 86.05 85.6O
Average rate
2011 2010
USD to PKP - 8uy 84.87 83.38
USD to PKP - Se|| 86.25 84.26
At reportlng date, l| tbe PKP bad strengtbened by Pupee one agalnst tbe |orelgn currencles wltb a|| otber varlab|es
be|d constant, post-tax |oss |or tbe year wou|d bave been |ower by tbe amount sbown be|ow, maln|y as a resu|t
o| net |orelgn excbange galn on trans|atlon o| |orelgn debtors, |orelgn currency bank account and outstandlng
|etter o| credlts..
2011 2010
L||ect on pro|lt and |oss 44,875 48,863
Tbe weakenlng o| tbe PKP agalnst |orelgn currencles wou|d bave bad an equa| but opposlte lmpact on tbe post
tax |oss.
Tbe sensltlvlty ana|ysls prepared ls not necessarl|y lndlcatlve o| tbe e||ects on (|oss) / pro|lt |or tbe year and assets /
|labl|ltles o| tbe Group.
39.3.2 |nterest rate rlsk
|nterest rate rlsk ls tbe rlsk tbat tbe va|ue o| |lnancla| lnstrument wl|| ||uctuate due to cbanges ln market lnterest
rates. Slgnl|lcant lnterest rate rlsk exposures are prlmarl|y managed by a mlx o| borrowlngs at |lxed and varlab|e
lnterest rates and enterlng lnto lnterest rate swap contracts. At tbe reportlng date tbe lnterest rate pro|l|e o| tbe
Group's slgnl|lcant lnterest bearlng |lnancla| lnstruments was as |o||ows:
2011 2010 2011 2010
ffective rate Carrying amount
(ln Percentage) (Pupees ln OOO)
Financia| |iabi|ities
varlab|e rate lnstruments:
Long term |lnances - PKP 13.59 to 16 13.O8 to 15.11 4,884,227 5,513,818
Long term |lnances - USD 0.352 to 0.598 O.314 to O.664 1,393,400 2,O79,17O
Llabl|ltles agalnst assets subject
to |lnance |ease - 9.48 - 155
Sbort term borrowlngs - PKP 13.59 to 14.19 12.24 to 16.66 8,201,707 8,477,724
Sbort term borrowlngs - USD 2.197 to 3.850 3.11 to 3.75 1,160,344 1,6O2,5O8
Tbe Group does not account |or any |lxed rate |lnancla| assets and |labl|ltles at |alr va|ue tbrougb pro|lt and |oss.
Tbere|ore a cbange ln lnterest rates at tbe reportlng date wou|d not a||ect pro|lt and |oss account.
Cash j|ew sens|r|z|rj ana|js|s je za|ah|e are |nsramenrs
A cbange o| 1OO basls polnts ln lnterest rates at tbe reportlng date wou|d bave lncreased/ (decreased) pro|lt |or
tbe year by tbe amounts sbown be|ow. Tbls ana|ysls assumes tbat a|| otber varlab|es, ln partlcu|ar |orelgn currency
rates, remaln constant. Tbe ana|ysls ls per|ormed on tbe same basls |or 2O1O.
1OO bps
|ncrease Decrease
Pupees
L||ect on pro|lt - 3O [une 2O11 (146,274) 146,274
L||ect on pro|lt - 3O [une 2O1O (156,86O) 156,86O
Tbe sensltlvlty ana|ysls prepared ls not necessarl|y lndlcatlve o| tbe e||ects on |oss |or tbe year and assets / |labl|ltles
o| tbe Group.
39.3.3 Palr va|ue blerarcby
Plnancla| lnstruments carrled at |alr va|ue are categorlsed as |o||ows:
Leve| 1 : quoted market prlces
Leve| 2 : va|uatlon tecbnlques (market observab|e)
Leve| 3 : va|uatlon tecbnlques (non-market observab|e)
Tbe Company be|d tbe |o||owlng |lnancla| lnstruments measured at |alr va|ue:
Tota| Leve| 1 Leve| 2 Leve| 3
Plnancla| assets deslgnated at |alr va|ue
tbrougb pro|lt or |oss 18 18 - -
Derlvatlve |lnancla| assets 1,3O3 - 1,3O3 -
17,183,457 17,182,154 1,3O3 -
Plnancla| assets deslgnated at
|alr va|ue tbrougb pro|lt or |oss 14 14 - -
Derlvatlve |lnancla| assets 9,422 - 9,422 -
15,243,7O1 15,234,279 9,422 -
39.3.4 Otber prlce rlsk
Otber prlce rlsk ls tbe rlsk tbat tbe |alr va|ue or |uture casb ||ows o| a |lnancla| lnstrument wl|| ||uctuate because
o| cbanges ln market prlces (otber tban tbose arlslng |rom lnterest rate rlsk or currency rlsk). Lqulty prlce rlsk
arlses |rom aval|ab|e-|or-sa|e equlty securltles be|d. Materla| lnvestments wltbln tbe port|o|lo are managed on
an lndlvldua| basls and a|| buy and se|| declslons are approved by tbe 8oard. Tbe prlmary goa| o| tbe Group's
lnvestment strategy ls to maxlmlse lnvestment returns.
A 1% lncrease / decrease ln sbare prlces at year end wou|d bave decreased/lncreased tbe Group 's pro|lt ln case
o| |lnancla| assets deslgnated at |alr va|ue tbrougb pro|lt or |oss and lncrease / decrease surp|us on re-measurement
o| lnvestments ln case o| 'aval|ab|e |or sa|e' lnvestments as |o||ows:
2011 2010
Le||ect on pro|lt or |oss 2 1
L||ect on equlty 171,821 152,343
L||ect on lnvestments 171,823 152,344
39.4 Palr va|ue o| |lnancla| lnstruments
Tbe carrylng va|ues o| tbe |lnancla| assets and |lnancla| |labl|ltles approxlmate tbelr |alr va|ues. Palr va|ue ls tbe
amount |or wblcb an asset cou|d be excbanged, or a |labl|lty sett|ed, between know|edgeab|e, wl||lng partles ln
an arm's |engtb transactlon.
39.5 Caplta| management
Tbe 8oard's po|lcy ls to malntaln an e||lclent caplta| base so as to malntaln lnvestor, credltor and market con|ldence
and to sustaln tbe |uture deve|opment o| lts buslness. Tbe 8oard o| Dlrectors monltors tbe return on caplta|
emp|oyed, wblcb tbe Group de|lnes as operatlng lncome dlvlded by tota| caplta| emp|oyed. Tbe 8oard o|
Dlrectors a|so monltors tbe |eve| o| dlvldends to ordlnary sbarebo|ders.
Tbe Group's objectlves wben managlng caplta| are:
(l) to sa|eguard tbe entlty's abl|lty to contlnue as a golng concern, so tbat lt can contlnue to provlde returns
|or sbarebo|ders and bene|lts |or otber stakebo|ders, and
(ll) to provlde an adequate return to sbarebo|ders.
Tbe Group manages tbe caplta| structure ln tbe context o| economlc condltlons and tbe rlsk cbaracterlstlcs
o| tbe under|ylng assets. |n order to malntaln or adjust tbe caplta| structure, tbe Group may, |or examp|e,
adjust tbe amount o| dlvldends pald to sbarebo|ders, lssue new sbares, or se|| assets to reduce debt.
Tbe Group monltors caplta| on tbe basls o| tbe debt-to-equlty ratlo - ca|cu|ated as a ratlo o| tota| debt
to equlty.
Tbe debt-to-equlty ratlos as at 3O [une 2O11 and at 3O [une 2O1O were as |o||ows:
2011 2010
Tota| debt 16,751,978 18,O49,652
Tota| equlty and debt 47,069,492 44,656,OO2
Debt-to-equlty ratlo 36% 4O%
Tbe decrease ln tbe debt-to-equlty ratlo ln 2O11 resu|ted prlmarl|y due to net repayment o| |ong term and sbort
term borrowlngs and rlgbt lssue durlng tbe year.
Neltber tbere were any cbanges ln tbe Group's approacb to caplta| management durlng tbe year nor tbe Group
ls subject to externa||y lmposed caplta| requlrements.
40 Operating 5egments
Segment ln|ormatlon ls presented ln respect o| tbe group's buslness. Tbe prlmary |ormat, buslness segment, ls based
on tbe group's management reportlng structure.
Segment resu|ts, assets and |labl|ltles lnc|ude ltems dlrect|y attrlbutab|e to a segment as we|| as tbose tbat can be a||ocated
on a reasonab|e basls. Una||ocated assets and |labl|ltles lnc|ude sbort term and |ong term borrowlngs, emp|oyees
retlrement bene|lts and otber operatlng |labl|ltles.
Segment caplta| expendlture ls tbe tota| cost lncurred durlng tbe perlod to acqulre segment assets tbat are expected
to be used |or more tban one year.
Tbe group's operatlons comprlse o| tbe |o||owlng maln buslness segment types:
Type of segments Nature of business
Cement Productlon and sa|e o| C|lnker, Ordlnary Port|and and Su|pbate Peslstant Cements.
Paper Manu|acture and supp|y o| paper products and packlng materla|.
Tbe ldentl|lcatlon o| operatlng segments was based on tbe lnterna| organlsatlona| and reportlng structure, bul|t on tbe
dl||erent products and servlces wltbln tbe Group. A||ocatlon o| tbe lndlvldua| organlsatlona| entltles to tbe operatlng
segments was exc|uslve|y based on economlc crlterla, lrrespectlve o| tbe partlclpatlon structure under Companles
Ordlnance, 1984. Por tbe presentatlon o| reportab|e segments ln accordance wltb |PPS 8, botb operatlng segments
wltb comparab|e economlc |eatures and operatlng segments not meetlng tbe quantatlve tbresbo|ds were aggregated
wltb otber operatlng segments.
4O.1 Segment ana|ysls and reconcl|latlon
Tbe ln|ormatlon by operatlng segment ls based on lnterna| reportlng to tbe Group executlve commlttee, ldentl|led
as tbe 'Cble| Operatlng Declslon Maker' as de|lned by |PPS 8. Tbls ln|ormatlon ls prepared under tbe |PPSs
app|lcab|e to tbe conso|ldated |lnancla| statements. A|| Group |lnancla| data are asslgned to tbe operatlng segments.
2O11 2O1O 2O11 2O1O 2O11 2O1O 2O11 2O1O
Pupees ln tbousands
Pevenue |rom
- Lxterna| customers 18,577,198 16,275,354 874,162 697,882 - - 19,451,36O 16,973,236
- |nter group - - 871,O97 1,O14,347 (871,O97) (1,O14,347) - -
18,577,198 16,275,354 1,745,259 1,712,229 (871,O97) (1,O14,347) 19,451,36O 16,973,236
Segment gross pro|lt 4,384,969 2,7O5,36O 29O,551 374,971 (22,O26) (35,7O9) 4,653,494 3,O44,622
Segment expenses (2,719,925) (1,355,869) (27,992) (29,626) (3,935) (1,O64) (2,751,852) (1,386,559)
|mpalrment on
lnvestments (118,836) - - - - - (118,836) -
Otber lncome 1,1O6,662 911,672 6,152 4,O49 (51,615) (4O,636) 1,O61,199 875,O85
Plnancla| cbarges (2,O51,678) (1,9O2,76O) (166,O17) (161,339) 55,55O 41,7OO (2,162,145) (2,O22,399)
Taxatlon (43O,231) (125,381) (54,467) (74,592) - - (484,698) (199,973)
Pro|lt a|ter taxatlon 17O,961 233,O22 48,227 113,463 (22,O26) (35,7O9) 197,161 31O,776
Segment net assets 3O,217,285 47,O46,O43 416,588 1,79O,148 25,O5O (343,547) 3O,658,923 48,492,644
Segment |labl|ltles 19,455,765 2O,526,823 146,936 1,421,788 979,882 (39O,625) 2O,582,583 21,557,986
Depreclatlon 1,43O,41O 1,392,564 34,O58 47,O4O (1O,O75) - 1,474,543 1,439,6O4
Casb generated |rom
operatlng actlvltles 34O,188 842,OO5 (9,883) (3O,341) 48,472 3,O13 378,777 814,677
Caplta| expendlture 1,672,612 1,O79,494 1,468 3,41O - - 1,674,O8O 1,O82,9O4
Net casb used ln
lnvestlng actlvltles (616,O33) (534,712) (4,O65) 19,241 (35,61O) (1,137) (655,7O8) (516,6O8)
Cement paper |imination - net Tota|
4O.2 Geograpblca| segments
A|| segments o| tbe Group are managed on natlon-wlde basls and operates manu|acturlng |acl|ltles and sa|es o||lces
ln Paklstan on|y.
41. P|ant capacity and actua| production
Capacity Actua| production
2011 2010 2011 2010
C|lnker (M. Tons)
Unlt 1 81O,OOO 81O,OOO 694,835 951,397
Unlt 2 1,2OO,OOO 1,2OO,OOO 1,325,877 1,328,353
Unlt 3 2,O1O,OOO 2,O1O,OOO 1,717,692 2,4O4,629
Cement 8ags (number o| bags) 12O,OOO,OOO 12O,OOO,OOO 92,O9O,336 1O9,514,1O9
42. Genera|
42.1 Tbese conso|ldated |lnancla| statements were autborlsed |or lssue on 7 September 2O11 by tbe 8oard o|
Dlrectors o| tbe Parent Company.
42.2 Plgures bave been rounded o|| to tbe nearest tbousand o| Pupees.
42.3 Correspondlng |lgures bave been re-arranged, wberever necessary, |or tbe purposes o| comparlson. However,
no slgnl|lcant re-arrangements bave been made.
PPOXY POPM
Po|lo No.
CDC Partlclpant's Name
Sbares He|d
|/We
o|
CDC Partlclpant |.D. No.
A/C, Sub A/C No.
bel ng a member o| D. G. KHAN CLMLNT COMPANY L| M| TLD ber eby appol nt
wbo ls a|so a member o| tbe Company, vlde Peglstered Po|lo No./CDC A/C Sub A/C No.___________________as
my/our proxy to vote |or me / us and on my / our beba|| at tbe Annua| Genera| Meetlng o| tbe Company to be be|d
on 31
st
October 2O11 at 3:3O p.m. at Peglstered O||lce, Nlsbat House, 53-A, Lawrence Poad, Labore and at any
adjournment tbereo|.
Note: Proxles , ln order to be e||ectlve, must be recelved at tbe Company's Peglstered O||lce not |ess tban |orty
elgbt bours be|ore tbe tlme |or bo|dlng tbe meetlng and must be stamped, slgned and wltnessed. Proxles
o| tbe members tbrougb CDC sba|| be accompanled wltb attested coples o| tbler N|C. Tbe sbarebo|ders
tbrougb CDC are requested to brlng tbelr orlglna| N|C, Sub Account Number and Partlclpant |.D. No. to
produce at tbe tlme o| attendlng tbe meetlng.
As wltness my/our band tbls_______________day o| _______________2O11
Wltness
Slgnature
Name
Dated
P|ace
CN|C
Slgnature on
Plve Pupees
Pevenue Stamp
(NAML)
o|
or |a||lng blm/ber
o|
(NAML)

2010-11 Annual Report

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2010-11 Annual Report

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2011 HlGHLlGHT5

|mprovlng e||lclency ln a dl||lcu|t envlronment

PATTRN OF 5HAR HOLDlNG A5 AT jUN 30, 2011 {ORDlNARY 5HAR5)

PATTRN OF 5HAR HOLDlNG A5 AT jUN 30, 2011 {ORDlNARY 5HAR5)

Conso|idated Financia| 5tatements

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