D.G. Khan Cement Co. Ltd.

CORPORATE BRIEFGINGLAHORE STOCK EXCHANGE

March 24th 2011

D.G Khan Cement Company- Dera Ghazi Khan Plant

NISHAT Truly Diversified Conglomerate

•MCB Bank Limited(The 3rd largest Bank in Pakistan)

•Adamjee Insurance Company Limited(The largest insurance business)

• Security General Insurance Co. Limited

Financial Services

• Nishat Mills Limited(The largest composite Unit in Pakistan)

• Nishat (Chunian) Limited(The largest composite Unit in Pakistan)

Textile

• D.G. Khan Cement Company Limited(The 2nd largest in Pakistan)

• Nishat Paper Products Company Limited

Cement & Cement Sacks

• Nishat Power Limited (200MW)

• Nishat Chunian Power Limited (200MW)

• Lal Pir Power Limited (362MW)

• Pak Gen Power Limited (365MW)

Power Generation

• Nishat Hotels & Properties Limited• Nishat Developers (Pvt.) Ltd.• Pakistan Aviators & Aviation (Pvt.) Ltd.

Others

BRIEF HISTORY

• Established in 1978 as private limited company by State cement corporation of Pakistan

• Cement production started in 1986 with an installed capacity of 2,000TPD

• Nishat acquired in May 1992 under the privatization initiative of the Govt.

• Company listed on Stock Exchange September 15, 1992

• Optimization of production capacity in 1993 by 200TPD, new capacity 2,200TPD

• Set up a captive power unit in the name of D.G. Khan Electric Company in 1995-(23.84WM)

BRIEF HISTORY

• Capacity Expansion by 3,300 tons initiated in 1994. Cement production Started in June1998. Total Clinker production capacity 5,500TPD.

• Coal Firing project, Furnace oil was being replaced with Coal FY 2001.

• Capacity optimization of 500TPD and 700TPD in Unit-1 & Unit-2 respectivelyFY 2005-06.

• New Gas fired Power plant Installed in FY 2006. (25.50MW)

• Total Captive generation Capacity 49.34 MW.

BRIEF HISTORY

• Greenfield Cement plant at Village Khairpur Dist. Chakwal (KHP Plant). Single LargestCement plant in the country with 6700TPD Clinker production.

• KHP Cement Plant Started production in June 1997. Total Investments US$ 260 million.

• Project is equipped with Duel fuel Power Generation plant of 33MW.

• Installed World’s largest vertical cement grinding mill at D.G. Khan Site. Totalinvestment of US$ 25 million (March 2009)

• The project substantially save on account of power consumption in cement grinding.Annual savings of about Rs. 200 million @ Current WPDA Tariff

BRIEF HISTORY

• Initiated first ever Power generation project using Waste Heat of cement plant at DGK Site. Project Started operations in June 2010.

• Total Project cost is US$ 26 million. Capacity 10.4MW.

• Alternative Fuel project. Trial & first phase of RDF ( Refused Derived Fuel) has already completed at KHP plant. Total Cost US$ 5.0 million. (February 2011)

1992 1994 1998 2005 2007

2,0

00

2,2

00

5,5

00

6,7

00

13,4

00

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000M.Tons

Years

• Capacity in 1992 = 2000 TPD(At the time of acquisition)

• Current Capacity = 13400TPD

• Capacity Enhancement = 570%(In only 19 years)

Capacity Additions (TPD)

• Capacity in 1992 = 0 MW(At the time of acquisition)

• Current Capacity = 92.34MW

Power Generation Capacity (MW)

23.8

4

49.3

4

82.3

4

92.3

4

-

10

20

30

40

50

60

70

80

90

100

1996 2005 2007 2010

MW

OPEARATING PERFORMANCE & MARKET SHARE

YEARS` INDUSTYRY(M. Tons)

D.G. K.C(M. Tons)

Market Share

Capacity Actual Capacity Actual Capacity Actual

1992 8,890,950 7,711,864 630,000 608,363 7.09% 7.89%

1995 10,173,450 8,380,065 693,000 698,063 6.81% 8.33%

1999 16,410,450 9,620,882 1,732,500 1,115,288 10.56% 11.59%

2005 17,908,550 16,353,300 1,732,500 1,826,519 9.67% 11.17%

2008 37,156,750 30,293,431 4,221,000 4,401,636 11.36% 14.53%

2009 41,760,499 31,285,807 4,221,000 4,027,633 10.11% 12.87%

2010 44,823,500 34,207,973 4,221,000 4,983,889 9.42% 14.57%

• Established Brand and Customer loyalty with the Brand

• Strong and effective Marketing and Sales Network across Pakistan

DGKC Market sharein local market was17% in FY 2010 against14% in FY 2009

2005 2006 2007 2008 2009 2010

17

,908,5

50

20,9

54,9

12

30,6

22,3

25

37,1

56,7

50

41,7

60,4

99

44,8

23,5

00

91.3%87.9%

79.1%81.0%

74.9% 76.3%

102.8% 101.8%

110.2%

102.6%

93.6%

118.2%

0%

20%

40%

60%

80%

100%

120%

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Cap

acit

y U

tilizati

on

M.Tons

Years

Industry DGK

DGKC capacity utilization iswell above the industry’saverage capacity utilization.

Capacity Utilization-Industry vs. DGKC

1,39

2,06

5

1,31

6,63

2

1,53

6,76

5

2,04

8,11

4

2,37

5,48

6

3,64

4,55

9

3,18

5,80

1

4,10

3,86

1

41,4

86

171,

345

290,

205

166,

241

153,

477

757,

077

1,20

0,89

8

883,

703

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2003 2004 2005 2006 2007 2008 2009 2010

M.TONS

YEARS

DGKC- Local vs. Exports Sales

DGKC Market sharein local market was17% in FY 2010 against14% in FY 2009

FINANCIAL HIGHLIGHTS

1992 1995 1999 2005 2008 2009 2010

Revenues 740 1,498 2,259 5,279 12,445 18,038 16,275

Profit/(loss) After tax 82 386 (580) 1,682 (53) 525 233

Total Assets 1,211 4,010 8,800 18,016 51,992 47,723 47,046

Total Equity 670 3,110 3,218 9,318 30,080 20,918 26,519

Rs. In Millions

2010 2009 %

Clinker Production 4,684,379 3,946,101 19 %

Cement Production 4,908,593 3,877,296 27 %

SALES : 4,977,944 4,029,002 24 %

Local Sales 4,101,801 2,828,103 45 %

Exports 876,143 1,200,898 (27) %

Production & Sales FY 2010

• Kiln run factor (Days):

FY 2010 FY 2009

• DGK-Unit-1 334.11 322.00

• DGK-Unit-2 334.14 276.00 ( Set record in FY 2008 for 342.99 Days)

• Khairpur Plant 346.51 282.50 ( Set new record in Pakistan in FY 2010 for

346.51 Days Kiln operations)

• Avg. Sales in FY 2010 grew by 15% in the country whereas DGK sales in the local market grew by

45%.

• Total Industry Sales increased by 9% whereas DGKC sales augmented by 24%.

M. Tons

Operating Results FY 2010

2010 2009 %

Net Sales 16,275,354 18,038,209 (10) %

Gross Profit 2,705,690 5,679,734 (53) %

Operating Profit 2,261,163 3,383,258 (33) %

Finance Cost 1,902,760 2,606,358 (27) %

Other Income 911,672 770,137 18 %

Profit Before Tax 358,493 776,900 (54) %

Profit After Tax 233,022 525,581 (56) %

• Sales revenue decline due to price war in the local market despite volumetric growth during FY 2010.

• Avg. Sale price plunged by 27% during FY 2010 vs. FY 2009

Rs. In Millions

• DGK invested Rs. 2.812billion in shares of listedcompanies.• Market of value ofshares as on March 22,2011 Rs. 16.012 billion.

Future Projects

• Objectives :• Reduce dependency on imported fossil fuels • Reduce cost of Production / Power generation• Maintain Market Share

PROJECTS• Alternative Fuel Projects (Refused Derived Fuel- RDF)

• RDF Project-Extension at KHP Cement Plant• RDF Project- DG Khan Site Phase –I

• Power Generation• Waste Heat Recovery-Khairpur Cement Plant (8.5 MW)

• Expansion Plans• Greenfield Cement plant- Hub Cement project• Off shore Cement plant/ Cement grinding mill

ONGOING PROJECTS

Power Generation-Waste Heat Recovery-

KHP PLANT

• The projects will reduce Co2 annually by 60,000 tons.

• Project entitles to annual carbon credits of Rs. 100 million Approx.

ONGOING PROJECTS

Alternative Fuel

Project (RDF)

Investments

US$ 15M Reduce Dependency on fossil fuels

Payback period 6

years.

• The project will reduce Co2 annually by 200, 000 tons.

• Projects entitle to annual carbon credits of Rs. 330 million Approx.

Nishat Paper Products Co. Ltd.

• Subsidiary of D.G. Khan Cement Co. Ltd.

• Vertical Integration for supply of Packing Materials

• 2nd Largest Sack Converting plant in the Country

• Annual Capacity of 150 millions Bags (75M x 2)

• Most Modern State of the Art Production Lines from Windmoller & HolscherGermany

• Total Investment of US$ 20 million

Nishat Paper Products Co. Ltd.

• Major Customers :• D.G. Khan Cement Co. Ltd.• Maple Leaf Cement • Lafarage Pakistan

FY 2010 Financial Highlights

• Annual Sales Rs. 1,713 million.

•Profit After tax of Rs. 133 million

• Bestway Cement • Atock Cement• Dewan Cement

Corporate Social Responsibility

• Community Welfare Services: • Heath Care:•A free medical Center and Hospital to local residents of the area.• Free Ambulance facility for the local residents.• Daily treatment of 180-200 patients of nearby area.

• Education & Training:• Running 2 schools at DG Khan site for employees and local residents. (About 500 Students)

• Bloomfield School (English Medium)• Dera Model School (Urdu Medium)• Spend Rs. 11.292 million in FY 2010

• Training and apprenticeship facilities to engineering students

Corporate Social Responsibility

• Community Welfare Services: (Contin…..)

• Drinking Water: DGKC providing water for drinking to local residents• Infrastructure: DGKC continuously work for social uplifts in the area, likeimprovements in road networks.

• Environment :• DGKC plant’s run under strict Environmental Management Control System.• Installed most modern equipments for collection of dust & waste gases.• Comply with both International and Pakistani Environmental Standards.• Planted more than 30 thousand plants in Khairpur Cement plant.

Corporate Social Responsibility

• Occupation Safety and Health : • DGK is a conscious employer and placed stiff occupational standards i.e. :• to prevent injuries and damage to employees, contractors, visitors and company’s assets.• to make work place more safe

• Contribution to Flood Victims:• DGK provided food to 300 people twice a day daily in the DG Khan area.• Provided Shelters

Q & A

THANK YOU