1. Group MembersNasir Ali Khan(103137)H.Bilal Ahmad Ch (103145)Bilal Shamim (102119)Waqas Hassan Khan (121812)

2. D G Khan Cementand Lucky Cement 3. What is Cement?History of Cement: old as human civilization Romans used volcanic tuff mixed raw material fortheir construction Egyptians used it for the construction ofPYRAMIDES Mr. Joseph patented artificial cement with a famousbuilding stone obtained from the land of England in1824. 4. Introduction Of D.G Khan Cement: State Cement Corporation of Pakistan (S. C. C. P) was established in 1984. In 1977 demand is 3.7 m tons while the production is 3.1 m tons.Main purpose of establishment is to fulfill the demand of Northern MarketingZone. Selected a place D. G. Khan. The location is ideal because it is near to market as well as prior to rawmaterial. In 1992 SCCP was privatized and purchased by Nishat group of industries. its name changed from SCCP to D. G. Khan Cement Factory. The new plant is the relief forBhawalpur, Khanewal,Muzafargurh, Bhawalnagar, and Vehari. . Its design capacity of 3300 ton clinker per day. DGKCC has three cement plants, two plants located at Dera Ghazi Khan andone at Khairpur Distt. Chakwal 5. Mission StatementD. G. Khan Cement Company committed to produce and supply highquality conforming the local and international standards adoptingmodern technique satisfying the customer requirements the mostcompetitive prices.Future Planning:Export their high quality cementThe main purpose of ISO 9002 certificate it to get the approval fromISO, they can export their high quality cement according tointernational standards . 6. Introduction of Lucky Cement: Lucky Cement Limited was founded in 1994 Lucky Cement Limited is the largest cement producer inPakistan Its shares are traded on the Karachi Stock Exchange Its symbol in the Karachi Stock Exchange (KSE) is LUCK. Lucky Cement Limited has been sponsored by one of thelargest business groups in Pakistan, the Yunus BrothersGroup (YB Group), 7. Organization Structure: managed by the team of professionals. Two production plants & five marketing offices. 1800 permanent employees throughout Pakistan. 8. Economy overview Per capita income rose from $1073 to $1254 increaseof 16.9% Rs196.3billion borrowed from state bank and Rs275.9 billion by scheduled banks.. Tax collected Rs 1588 billions instead of Rs 1667billions This is due to floods during july and august 2011 Inflation rate is 14.1% but in last year it was 11.5% 9. Increase in inflation rate is attribute to increase in infood price This due to increase in price of sugar milk poultrymeat etc 10. Cement sector performance Total sales volume increased by 2.94millions tons Local cement demand increased by 14.6% to 23.53million tons against 19.4million 11. Past, present and future performance of lucky cement Larger manufacturer Signed a MoU with oracle coal for coal supply Implemented waste heat recovery project in karachi. During 2011 production of clinker and cementincreased by 7.92% and 13.05% Due to massive capacity expansion company hasbeen able to consolidate its position 12. Local sale increased by 12.43% while export declinedby 32% Local Market share increased by 12.79% to 15.61% Export segment declined by 33% to 26.21%Financial performance Inventory turnover ratio decline from 19.28 times to12 times Current ratio increased .7to .81 13. Debt to equity ratio increased 53%-55% Debt to assets ratio increased by 34%-36% Long term debt to equity decreased 14%-10% Earning per share shrunk from Rs7.92 to Rs 7.65 Lucky cement profit is Rs 3.889 million Cost per ton decreased by 11% 14. Future outlook Price of cement is expected to increase Local cement sale can also be increased due to theconstruction of 8dams in province Working capital ratio can easily improve 15. D G Khan Cement Present, Past & FuturePerformance: It is a unit of Nishat group I t is producer and seller of ordinary portland andsulphate resistant cement PAT declined by Rs388m toRs177m EPS decreased 1.06 - .49 current ratio is 1.19:1 16. Future outlook As GDP increased in 2011 by 4.5% so its expectedhigher per capita cement consumption The infrastructure redevelopment of flood affectedareas is also a potential area for demand of cement togrow DGKC is trying to cut down the costs that havesignificantly and adversely impacted its profits. To reduce electricity cost, DGKC has started a projectof power generation from waste heat at DGK Site 17. DGKC has also decided to use municipal solid wasteas fuel for heating purposes. Beneficiary for to reduce PC help to resolveenvironmental issues 18. THE HORIZONTAL ANALYSISOF COMPANYHORIZONTAL ANALYSIS OF BALANCE SHEET 19. HORIZONTAL ANALYSIS OF BALANCE SHEETLucky Cement 2006 2007 2008 200920102011Share capital & reserves 100.00 32.31 163.88228.90254.98292.85Non current Liabilities100.00 (15.06) (33.08) (48.80) (69.73) (76.78)Current Liabilities100.00 33.68 61.76 91.47 102.90125.10Total Equity & Liabilities 100.00 8.9244.94 62.52 62.18 74.45Non Current Assets 100.00 6.0235.04 59.30 64.0265.73Current Assets 100.00 21.40 87.53 76.37 54.22 111.97Total Assets 100.008.92 44.94 62.52 62.1874.45 20. Vertical analysis of balance sheet Lucky Cement 2006 200720082009 2010 2011Share capital & reserves 29.92 36.3554.4960.5665.50 67.39Noncurrent Liabilities 49.96 38.9623.0615.74 9.336.65Current Liabilities20.12 24.4922.4523.7035.17 25.96Total Equity & Liabilities 100.00 100.00 100.00 100.00 100.00 100.00Non Current Assets81.14 78.9875.6079.5382.06 77.08Current Assets18.86 21.0224.4020.4717.94 22.92Total Assets 100.00 100.00 100.00 100.00 100.00 100.00 21. Vertical analysis of Income statement Lucky cement 2006 2007 2008 2009 2010 2011Turnover 100.00 100.00 100.00 100.00 100.00 100.00Cost of Sales 63.0070.6574.3162.7467.4466.52Gross Profit 73.0029.3525.6937.2632.5633.48Distribution Cost 1.28 3.97 6.81 9.2214.0112.44Admin Cost1.33 0.89 0.74 0.63 1.24 1.20Operating Profit 43.3924.4918.1427.4117.3119.84Finance Cost1.03 6.89 0.75 4.70 2.32 1.99Other Income/Charges1.67(3.89)3.79 3.05 1.04 1.24Profit before tax31.7021.4913.6019.6613.9416.61Tax 7.66 1.14(2.19)2.20 1.14 1.35Profit after tax 24.0420.3415.7917.4612.8015.26 22. D.G. Khan Cement Company INCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31,. 20072008 200920102011100.00%100.00% 100.00% 100.00% 100.00%Net Sales68.34%84.60% 68.50%52.92%74.88%Cost of Sales31.65%15.40% 31.50%22.50%25.58%Gross Profit-1.62%-0.89% -0.78%-0.77%-1.54%Administrative expenses-1.01%-4.52% -10.37% 11.81% 6.54%Selling and distribution expenses-2.17%-4.67% -4.42%-2.49%-2.18%Other operating expenses __-1.42%-0.18%-1.22%Impairment on investments 7.47%6.80% 4.27% 4.71% 5.71%Other operating income34.32%15.10% 18.78%30.52%41.77%Profit from operations-7.28%Finance cost -14.05% -14.50% -6.23%-8.70%Profit before tax-2.02%4.34%24.29%26.82% 33.07%-1.52%1.58%-1.39%Taxation -1.42% 1.73%25.20%-2.44%2.92%Net profit 22.87%31.34% 23. D.G. Khan Cement CompanyhBALANCE SHEETAS AT DECEMBER 31,..2007 2008 20092010 2011ASSETSNON-CURRENT ASSETSProperty, Plant and equipment42.74%44.19% 56.90% 58.70% 62.40%capital work in process0.15% 0.11%0.35%0.21%0.13%Long term investments15.29%13.07% 7.42%19.40% 13.86%Long term loans, advances and deposits 0.38% 1.00%0.39%2.68%1.55%CURRENT ASSETSStores, spares and loose tools 2.89% 4.42%6.87%1.40%5.45%Stock-in trade 0.57% 0.85%2.10%8.19%4.88%Trade debts0.57% 0.70%1.20%0.46%2.68%Investments32.72%29.00% 18.22% 12.80% 24.78%Advances, deposits, and other receivables0.57% 1.50%2.12%2.68%1.90%Cash and bank balances 0.22% 0.43%0.57%1.50%0.45%EQUITY AND LIABILITIESCAPITAL AND RESERVESAuthorised capital 19.30%19.20% 23.40% 20.00% 22.50%Issued, subscribed and paid-up 4.80% 4.80%7.10%9.36%8.22%Reserves 57.20%53.07% 40.70% 38.60% 44.80%Accumulated profit 3.40% 0.09%1.11%2.55%3.75%Total Equity 65.40%57.70% 48.90% 70.51% 74.80%LIABILITIESNON-CURRENT LIABILITIESLong term finances 16.70%16.10% 10.20% 12.14% 15.80%Long term deposits 0.07% 0.14%0.07%1.05%0.55%Retirement and other benefits0.07% 0.10%0.18%0.48%0.19%Deferred taxation3.10% 2.50%3.30%2.88%3.45%CURRENT LIABILITIESTrade and other payables 1.98% 2.63%3.35%2.98%3.50%Accrued markup 0.66% 0.70%1.24%0.88%0.12%Short term borrowing - secured 7.62% 14.61% 21.20% 18.60% 22.23%Current portion of non-current liabilities 3.94% 5.16%11.10% 8.24%6.78%Provision for taxation 0.06% 0.06%0.08%0.12%0.15%Total14.58%23.38% 37.25% 30.82% 32.78% 24. Analysis of Income statement DGKC D.G Khan common size analysis of income statementshows that it has high cost of goods sold from lastyears Gross Profit of the Co has decreasing trend due tohigh cost of goods sold. Operative and selling expense are minimal andproject a 31.34% net profit 25. Analysis of BALANCE SHEET DGKC Increase in cash and market able securities 24.08% morethan previous two years while receivables are 1.34% Inventories are constant at 9.99% making current assts37% of total assets more than last two years Net fixed assets are 52.85% of which 69% includesbuilding machinery and equipment Total current liabilities are 26.70% of which 19% isareshort term debts Long term liabilities are 9% in total less than last year Total equity is 59.1% of which 41% are retained earningsand rest 17 is divided between common stcock and paidin capital 26. Financial Ratio Analysis of D.G Khan Cement & Lucky Cement Liquidity Ratios Current Ratio:The purpose of using liquidity ratio is to determine the ability of thecompany for paying off its short term debts. The higher value of liquidityratios reflects that the company is well secured in performing itsobligations of short term debts. The calculation of current ratio shows thatD.G khan cement is well secured in this region. is not so secured. So it istherefore that the company current ratio is better in 2011. Quick Ratio The purpose of using liquidity ratio is to determine the ability of thecompany for paying off its short term debts. The higher value of liquidityratios reflects that the company is well secured in performing itsobligations of short term debts. The calculation of quick ratio shows thatCompany is well secured in this region.. The Company can easily meets itsshort term liabilities. Even is position with respect to Inventory Turnover isalso better. 27. Assets management ratioInventory Turnover:Ratios that are typically used to analyze how well accompany uses its assets and liabilities internally. These ratios are meaningful when compared topers/competitors in the same industry and can identify business that are better managed relative to the others. Also, efficiency ratios are important because an improvement in the ratios usually translate to improved profitability. 28. Debt Management Debt ratio Debt ratio is the measure to check the equity to borrowed funds/long term financing. The best measure is the gearing ration (The results of the company shows that they are highly geared as the portion of their borrowed money is very much higher than the owners equity. The other best measure is to check, how much the profit covers its interest. The higher t he interest cover ratio value, the more safe the company position is. In the present case, both the companies are almost covering its interest through its profit with the ratio of 1:1. 29. Profitability Return on equity D.G Khan cement is very strong in this area and proved that the managementis well employing it Capital Employed (capital investment) generating almost4.5 times more return than the Stock or Shares and Long-term Liabilities. Return on asset D.G Khan cement is very strong in this area and proved that themanagement is well employing it Return on generating almost 2.5times more return. As compared to lucky cement 30. Net Profit Ratio: lucky cement has generated 1.01% Net Profit as compare to previous yearwhose Net Profit is 1.45%.We can drive result that lucky cement is performingwell.Gross Profit Ratio: Profitability ratios are the measure of assessing business performance ofgenerating profits with respect to its expenses and other relevant expensesin a specific period of time say one year. The higher value as compare to thecompetitors or industry average or relative to previous period show thebusiness is going well. In the present case, Company D.G Khan cementgenerated 23.6% Gross Profit as compare to year in 2010 which GrossProfit was 16.6% which shows that 2011 has better managed its COGSwhich resulted in increase of the Gross Profit. 31. Interest coverInterest cover ratio is the measure to check the equity to borrowed funds/long term financing. The best measure is the gearing ration (Debt to equity). The results of the company shows that they are highly geared as the portion of their borrowed money is very much higher than the owners equity. The other best measure is to check, how much the profit covers its interest. The higher t he interest cover ratio value, the more safe the company position is. In the present case, both the companies are almost covering its interest through its profit with the ratio of 1:1. Earning per share:Most important is what the company is paying back to its investors/owners. The greater value of EPS maintain the investors and owners confidence on the company. The Company is paying almost double the value and building its better image before the investors. Debt equity ratio:Debt equity ratio is the measure to check the equity to borrowed funds/long term financing. The best measure is the (Debt to equity). The results of both the company shows that they are highly geared as the portion of their borrowed money is very much higher than the owners equity. The other best measure is to check, how much the profit covers its interest. The higher t he interest cover ratio value, the more safe the company position is. In the present case, both the companies are almost covering its interest through its profit with the ratio of 1:1. 32. Thank You!He neer is crowned with immortality who fails to follow where airy voices lead!- JOHN KEATS