ROLL NO: BBA-ML-19-46

CLASS: BBA (Hon’s) (7thSEMESTER)

SESSION: 2019-2023
SUBJECT: ANALYSIS OF FINANCIAL STATEMENT
SUBMITTED BY: NADIR SHAHZAD
SUBMITTED TO: MUHAMMAD ASIF

BZU BAHADURSUB CAMPUS LAYYAH

D.G.K Cement Company Limited (DGKCC)

INTRODUCTION
D.G. Khan Cement Company limited, is amongst largest cement manufacturers in the country. It
was established under the management control of State Cement Corporation of Pakistan
Limited (SCCP) in 1978 as private limited company. DGKCC started its commercial production in
April 1986 with 2000 tons per day (TPD) clinker based on dry process technology.It is market
leader with respect to market share with about 12% market share. Its plant is situated in Dera
Ghazi Khan and head office is situated at Lahore. It is listed on Pakistan stock exchange. The
company is primarily engaged in production and sales of clinker, ordinary Portland cement and
Sulphate resistant cement.

The company is progressive and its track record is witness to it. It has created, developed and
improved stringent and efficient systems in all areas. Ethics are core to it. The company is
compliant to all applicable laws, regulations and standards.

D.G Khan Cement Company limited(DGKCCL) is among the largest manufacturers of Pakistan
with a production capacity of 22,400 tons per day (6.72 million tons/year). DGKCC has four
cement plants, two plans located at Dera Ghazi khan, one at Khairpur District Chakwal and one
at Hub lasbella District (Balochistan). All plants are based on latest dry process Technology.

The company operates through a countrywide distribution network managed by different

regional sales offices. The company’s products are preferred on projects of national repute both
locally and internationally due to the un-paralleled and consistent quality.
Products
Two different products are produced at DGKCC namely ordinary Portland and Sulphate
resistant cement. These products are marketed through two different brands:

 DG brand & Elephant brand ordinary Portland cement (it is also called OPC and its
demand is about 92% because of common use).
 DG Brand Sulphate Resistant Cement (it is also called SRC and its demand is about only
8% because It is only used in Standing the foundation and made the foundation much
strong).
 In addition to following two brands, they are also offering more two different packaging
which are as following:
 ELEPHANT BRAND
 DG PLASTIC BAG

Cost Structure

Power and Fuel

The cement industry relies on power. Power and fuel costs account for 30% of the price of
cement when it’s sold. As a result, power and fuel have a major impact on the company’s
operating expenditure.

Limestone and Other Raw Material:

The second major component in the production of cement is the cost of raw materials. The
primary raw material that's used is limestone. Raw materials account for 30%-40% of the cost
of sales.

Coal:
Around 25 tons of coal is used to make 100 tons of cement. Coal forms about 20% of the total
operating cost. The industry uses about 5% of coal produced in the country.

Power:
Cement industry is power intensive and about 120 kWh of power is required to produce one
tone of cement. Power accounts for 16% of total operating costs.
Transportation:
Cement is highly freight intensive in nature. Every tone of cement manufactured involves the
transportation of 1.6 tons of limestone, 0.25 tons of coal, 0.05 tons of gypsum and 1 tone of the
finished product. Freight accounts for about 18% of the total cost.

Selling and other expenses:

Other expenses include employee costs, administration expenses, and repair and maintenance
charges. These account for 15%-20% of the cost of sales.

Founders
D.G Khan Cement Company limited (DGKCC) is strategic business unit of Nishat Group, which is
the largest industrial group in Pakistan. Nishat is a Pakistani business conglomerate group. It
has a diversified presence in various sectors. All its entities are run by professionals on update
business practices in compliance with national and international regulations. Its Market
Capitalization as on June 30, 2021 is about PKR 311 billion (about USD 1.9 billion). The Group
regular employees are more than 43,000. As on June 30, 2021, 60.8% of group market
capitalization was occupied by banking sector, cement 16.6%, textile 10.5%, power 7.4%, and
insurance 4.7%.

Vision and Mission Statements

Vision
“To transform the company into modern and dynamic cement manufacturing company with
qualified professionals and fully equipped to play a meaningful role on a sustainable basis on
the economy of Pakistan”

Mission
“To provide quality products to customers and explore new markets to promote/expand sales
of the company through good governance and faster a sound and dynamic team, so as to
achieve optimum prices of products of the company for sustainable and equitable growth and
prosperity of the company”
Horizontal Analysis (%)
2022 2021 2020

Balance sheet YOY % Change

Net equity 4.84 10.25 6.04

Non-current liabilities 14.79 4.60 21.76

Current liabilities 14.38 7.19 9.86

Property plant and equipment 2.61 1.78 4.46

Non-current assets 5.24 5.87 3.40

Current assets 10.75 6.44 2.87

Profit and loss accounts YOY % Change

Sales 28.68 18.60 6.13

Cost of sales 28.57 1.61 3.68

Gross profit 29.19 408.98 70.43

Administrative expenses 16.12 1.84 4.83

Selling and distribution expenses 10.32 9.34 36.59

Net impairment loss on financial assets 108.59 171.50 555.45

Other expense 151.69 21.77 1.59

Other income 7.42 4.00 0.10

Finance cost 22.26 37.23 40.83

Profit before tax 26.16 227.03 288.67

Taxation 190.21 165.73 519.21

Profit after tax 20.13 272.39 234.10

Vertical Analysis (%)
2022 2021 2020

Balance sheet % of Total Assets

Net Equity 51.2 53.3 51.4

Non-Current liabilities 15.1 17.5 19.5

Current Liabilities 33.7 29.2 29.0

Property, plant and equipment 60.6 61.7 64.5

Non-Current Assets 70.1 73.3 73.3

Current Assets 29.9 26.7 26.3

Profit and loss accounts % of Net Sales

Sales 100.00 100.00 100.00

Cost of sales 82.03 82.11 95.83

Gross Profit 17.97 17.89 4.17

Administrative expense 1.29 1.43 1.77

Selling and distribution expenses 3.01 4.32 4.69

Net impairment loss on financial assets 0.02 0.23 0.39

Other Expense 1.80 0.92 1.39

Other income 4.68 5.6 6.39

Finance cost 6.15 6.48 12.23

Profit/ (loss) before tax 10.37 10.58 9.88

Taxation 5.25 2.3 4.20

Profit/ (loss) after tax 5.12 8.25 5.68

Key Competitors
The competitors of DG Cement are given below
 Best way Cement
 Lucky Cement
 Fauji Cement
 Maple Leaf Cement
 Deewan Cement
The Balance Sheet of key competitor (Fauji Cement) is given below for the
analysis
Total Current Assets - 28217.11 14776.03 16158.51

Cash and Short Term

- 6149.94 7604.42 7569.18
Investments
Cash - - 2162.98 2238.79
Cash & Equivalents - 2306.63 2162.98 -
Short Term Investments - - 5441.44 5330.39
Total Receivables, Net - 2586.29 1422.48 1500.05
Accounts Receivables -
- 2412.76 1350.47 1466.17
Trade, Net
Total Inventory - 15636.87 5347 6559.62
Prepaid Expenses - 7.63 212.22 325.43
Other Current Assets, Total - 3836.37 402.12 204.23
Total Assets - 113698.08 39969.17 37790.58

Property/Plant/Equipment,
- 74258.58 25028.84 21467.78
Total - Net
Property/Plant/Equipment,
- 93990.23 - -
Total - Gross
Accumulated Depreciation, -
- - -
Total 19731.66
Goodwill, Net - - - -
Intangibles, Net - 11029.76 - -
Long Term Investments - 66.66 61.72 61.72
Note Receivable - Long Term - 173.54 72.01 -
 Other Long Term Assets, Total - 125.97 102.57 102.57
Other Assets, Total - 20730.26 9768.08 -
Total Current Liabilities - 26721.25 6196.28 7169.92

Accounts Payable - 2683.21 2147.65 2153.75

Payable/Accrued - - 2147.65 2153.75
Accrued Expenses - 5518.4 1917.04 1856.75
Notes Payable/Short Term Debt - 10605.25 950.12 1888.45
Current Port. of LT Debt/Capital
- 3053.42 348.41 410.95
Leases
Other Current liabilities, Total - 4860.98 833.06 860.02
Total Liabilities - 55962.02 12584.16 11552.15

Total Long Term Debt - 19645.96 2333.45 380.39

Long Term Debt - 19556 2276.43 323.38
Capital Lease Obligations - 89.96 57.02 57.02
Deferred Income Tax - 7433.21 3954.51 3900.04
Minority Interest - - - -
-
Other Liabilities, Total - -3425.46 101.79
40502.55
Total Equity - 57736.06 27385.01 26238.44

Redeemable Preferred Stock,

- - - -
Total
Preferred Stock - Non
- - - -
Redeemable, Net
Common Stock, Total - 21803.09 13798.15 13798.15
Additional Paid-In Capital - - -1364.38 -1364.38
Retained Earnings (Accumulated
- 17954.45 14903.98 13670.19
Deficit)
Treasury Stock - Common - - - -
ESOP Debt Guarantee - - - -
Unrealized Gain (Loss) - - - -
Other Equity, Total - 17978.52 -1317.12 134.48
Total Liabilities & Shareholders' Equity - 113698.08 39969.17 37790.58
Total Common Shares Outstanding - 2452.85 1552.29 1552.29
Total Preferred Shares Outstanding - - - -

Suggestion
For DG Cement, I would like to suggest that they should use online advertisement to increase
their sales. They should give facilities to their small employs children and raise funds for
company’s positive face.

Reference
https://www.dgcement.com/

https://en.wikipedia.org/wiki/DG_Cement

https://www.investing.com/equities/fauji-cement-balance-sheet