D. G. Khan Cement Company Limited (“DGKC”) is a Public Company Limited by shares, incorporated in Pakistan in 1978 under the Companies Act, 1913 (now the Companies Act, 2017). The Company’s ordinary shares are listed on the Pakistan Stock Exchange Limited. Its registered office is located at Nishat House, 53-A, Lawrence Road, Lahore.

Established in 1978 under the State Cement Corporation of Pakistan Limited, D. G. Khan Cement Company Limited commenced commercial operations in 1986 with an initial clinker capacity of 2,000 tons per day (TPD) at its Dera Ghazi Khan plant. Following its privatization in 1992, the Company was acquired by the Nishat Group, after which capacity optimization initiatives led to an increase in clinker capacity to 2,200 TPD in 1993. In 1996, a 23.84 MW furnace oil–based captive power plant was installed to improve energy efficiency and reduce operating costs. To meet growing domestic demand, the Company undertook major expansion projects from the late 1990s onwards, including the installation of an additional 3,300 TPD production line at the D.G. Khan site and subsequent capacity enhancements, raising total capacity to 6,700 TPD by 2005. A greenfield expansion at Khairpur, Chakwal, was completed in 2007, significantly increasing overall clinker capacity to 13,400 TPD. Over the years, the Company has also invested in diversified power generation sources, including waste heat recovery, coal-fired, and solar power plants, to reduce reliance on the national grid. The most recent major expansion was completed in 2018 with the commissioning of a greenfield cement plant at Hub, Balochistan, bringing the Company’s cumulative clinker capacity to over 22,000 TPD.

The Company is primarily engaged in the production and sale of clinker and cement and maintains a strong nationwide presence across Pakistan. With manufacturing facilities strategically located in the North, Central, and Southern regions, DGKC effectively serves domestic markets through an extensive distribution network comprising approximately 2,300 dealers. In addition to its local footprint, the Company has an established presence in international markets, including Bangladesh, Sri Lanka, Kenya, USA, Afghanistan and parts of West Africa. DGKC’s product portfolio includes Ordinary Portland Cement, Sulphate Resistant Cement, Low-Alkali Cement, and clinker, marketed under multiple brands tailored to specific technical requirements while adhering to international quality standards. The Company’s cumulative installed cement capacity stands at 22,400 tons per day (approximately 6.72 million tons per annum), with plants located at Dera Ghazi Khan (2.01 million MTPA), Khairpur (2.01 million MTPA), and Hub (2.70 million MTPA). Additionally, DGKC operates captive power generation facilities with a total capacity of 184.76 MW, utilizing a diversified energy mix comprising thermal, coal-based, waste heat recovery, and solar sources across its plant locations.

As at June 30, 2025, D. G. Khan Cement Company Limited is majority owned by the Nishat Group, which holds an aggregate 48.30% shareholding. This includes 31.40% held through Nishat Mills Limited and other associated companies, 16.79% held by family members, and 0.10% held by other related undertakings. The remaining shareholding is broadly diversified among financial institutions, including banks and non-banking financial institutions (4.15%), insurance companies (1.66%), modarabas and mutual funds (8.60%), pension and provident funds (2.51%), NIT and ICP (0.34%), joint stock and investment companies (6.40%), foreign companies (11.45%), charitable trusts and foundations (0.36%), and the general public, comprising local (15.26%) and foreign (0.97%) shareholders.

The Company’s majority ownership has consistently remained with the Nishat Group, providing stability to the shareholding structure and strong sponsor support. The sponsors’ demonstrated commitment to product quality, operational efficiency, and disciplined capacity expansion underpins DGKC’s competitive positioning and supports sustainable earnings generation. This stable ownership profile, combined with the Group’s long-term strategic orientation, enhances confidence in the Company’s governance framework and provides comfort regarding continuity of control and alignment of interests with minority shareholders.

The Company’s operating history of over three decades reflects the sponsors’ extensive experience and proven expertise in Pakistan’s cement manufacturing industry. Through timely capacity expansions, operational efficiencies, and sustained brand development, the sponsors have established DGKC as a prominent player in the domestic cement sector. Moreover, the Nishat Group is among Pakistan’s leading business conglomerates, with diversified interests spanning financial services, textiles, energy, insurance, automobiles, real estate, hospitality, paper and packaging, aviation, and agriculture-related businesses. Under the leadership of Mian Mohammad Mansha, the Group has evolved into a well-diversified corporate platform, which enhances DGKC’s governance standards, strategic depth, and overall business stability.

The financial strength of the Nishat Group is evident from its stable stream of income from its strategic investment portfolio across various sectors. Nishat Mills Limited, is the flagship Company of Nishat Group and is one of the most modern and largest vertically integrated textile companies in Pakistan. As of June 30, 2025, Nishat Mills Limited has a total shareholder equity of PKR ~144,599 million, proving the sponsors strong financial strength. Furthermore, the market capitalization of DGKC as of June 30, 2025, stood at PKR ~72.5 bln, further complementing the Group's strong financial muscle.

The Company is governed by a Board of Directors comprising 3 non-executive, 2 executive, and 2 independent members. DGKC complies with all the requirements set out in the Companies Act, 2017, and the Listed Companies (Code of Corporate Governance) Regulations, 2019, with respect to the composition, procedures, and meetings of the Board of Directors and its committees.

The Board of Directors of DG Khan Cement Company Limited comprises highly experienced professionals with diverse expertise across multiple sectors. The Chairperson, Mrs. Naz Mansha, has over 38 years of board-level experience and has been associated with DGKC since 1994, while also holding key leadership and directorship roles across the Nishat Group. Mr. Khalid Niaz Khawaja, Non-Executive Director, brings more than 51 years of experience in banking and leasing and has served on the boards of leading institutions, including the Lahore Stock Exchange. Mr. Raza Mansha, Director and Chief Executive Officer, has over 30 years of diversified experience spanning banking, cement, power, textile, insurance, hospitality, agriculture, and allied sectors. Independent Directors Mr. Usama Mahmud and Mr. Shehryar Ahmad Buksh contribute strong expertise in public policy, management consulting, retail development, industry leadership, and international market expansion. Mr. Shahzad Ahmad Malik, Non-Executive Director, adds deep financial, audit, and engineering insight from his long association with the Nishat Group. The Board is further strengthened by Mr. Farid Noor Ali Fazal, Executive Director, whose nearly six decades of experience in marketing, logistics, and international business supports effective governance and sustainable growth.

DGKC’s governance framework, led by the Board of Directors and its committees, is anchored in transparency, accountability, and sound corporate governance to safeguard stakeholder interests. The Board has constituted key committees, including the Audit Committee and the Human Resource & Remuneration Committee, to support effective oversight. It is responsible for setting strategic direction, reviewing governance practices, approving business plans and financial statements, overseeing investments, and monitoring internal controls and risk management systems. The Board also determines the Company’s risk appetite and regularly conducts comprehensive assessments of business, financial, solvency, and liquidity risks. The Chairman provides leadership by focusing the Board on strategic matters and maintaining high governance standards. During FY25, the Board held four meetings with satisfactory attendance, along with one Human Resource & Remuneration Committee meeting and four Audit Committee meetings, reflecting active and effective oversight.

As a publicly listed Company, DGKC operates in compliance with applicable laws and the Code of Corporate Governance, ensuring transparency and accountability in its financial reporting and disclosures. All material financial and non-financial information is disclosed in a timely manner and is subject to oversight by the Board Audit Committee. M/s A. F. Ferguson & Co., Chartered Accountants, serves as the Company’s external auditor and provides independent assurance on compliance with the Code of Corporate Governance. The external auditors have issued an unqualified opinion, confirming that the Company’s unconsolidated financial statements conform to applicable accounting and reporting standards and present a true and fair view of the Company’s financial position, performance, changes in equity, and cash flows for the year ended June 30, 2025.

The Company has a multi-tiered organizational structure divided into four key functions, including finance, marketing, technical & operations, and information technology. Each function is further divided into sub-divisions headed by divisional heads who report directly to the functional heads, who in turn report directly to the CEO. The CEO is responsible for the overall operations of the Company and reports directly to the Board of Directors.

The senior management comprises individuals having industry experience alongside relevant expertise in their respective areas. The CEO, Mr. Mian Raza Mansha, has rich experience of about 30 years in business management, corporate strategies, commercial insights, and project management. He has been associated with the Company for above 21 years and thus possesses vast experience and knowledge of the local cement industry. Simultaneously, he is also appointed as a director on the board of other associated companies of the Nishat Group. Mr. Farid Noor Ali Fazal is currently serving as the Director of Marketing of DGKC.  He has a vast experience of about 58 years in marketing, selling, trading, logistics, and administration. Additionally, he has been associated with the cement and steel sector in the Middle East for more than a decade, where he served in various capacities, mostly as General Manager (Sales & Marketing). He is also serving as an executive director on the board of DGKC. The CFO of the Company, Mr. Inayat Ullah Niazi, has experience that spans about 41 years, throughout which he has worked with DGKC. He supervised the financial matters related to the expansion of the DG Plant. He also oversaw critical financing arrangements for the installation of new plants at Khairpur and Hub. His expertise is in accounts, tax, audit, finance, treasury, budget, and planning.

The CEO is responsible for the day-to-day leadership and management of the business, in line with the strategic framework, risk appetite, and annual and long-term objectives approved by the Board. The management is also responsible for the identification and administration of key risks and opportunities, the establishment and maintenance of internal controls, and the preparation/presentation of financial statements in conformity with the applicable financial reporting framework consisting of approved accounting and financial reporting standards.

The Company’s Oracle ERP is the core back-office application for the Company. It consists of several modules, including the GL Module, Fixed Asset Module, Sales & Distribution Module, Purchase and Payable Module, Store and Inventory Module, Production Planning, Plant Maintenance Module, HR and Payroll Module, etc. All these modules are integrated with each other, which ensures data integrity and process controls. All the organization data and information reside inside the ERP. Information is either accessed directly from the ERP through system-generated reports or information is prepared from the data accessed or retrieved from the ERP, thus being the single source of information. State-of-the-art ERP systems and sales ordering systems are in place to gather real-time market information and plant performance.

The Company has devised and implemented an effective internal control framework that also includes an independent internal audit function. The Internal Audit function is responsible for providing assurance on the effectiveness and adequacy of the internal control and risk management framework in managing risks within acceptable levels throughout the Company. Furthermore, the management has formulated an enterprise risk management framework to identify the Company's key risks and provide the board with a robust assessment of the Company’s principal risks.

Pakistan’s cement industry is showing a measured recovery after a prolonged slowdown, supported by macroeconomic stabilization under the IMF program. Easing inflation, a largely stable Rupee, and a relatively supportive interest rate environment have improved business sentiment, although fiscal pressures continue to restrict public development spending. Industry demand has strengthened, with total cement dispatches recording double-digit growth, led by a 13% increase in domestic sales in 1HFY26 driven by revived private construction activity and improving project execution. Export volumes have although contracted by 4% to 4.58 MT. On a cumulative basis, for 1HFY26 industry offtake has risen by approximately 10% year-on-year. Policy initiatives such as the Mera Ghar Mera Ashiana housing scheme and selective tax incentives are supporting residential demand and urban property markets and the effects of increased demand after flood have also start to be realized. However, sector-wide capacity utilization remains low at around 61%, reflecting structural overcapacity. South based producers benefit from lower logistics costs and better export access, while northern players face cost disadvantages. Looking ahead, FY26 cement volumes are projected at 51–52 million tons, indicating a gradual but steady recovery trajectory.

D.G. Khan Cement Company Limited (DGKC) is one of the leading cement manufacturers in Pakistan, with a well-established operational history and significant installed capacity. During 1HFY26, the Company achieved total cement sales of 2.8 million tons, representing approximately an 10.85% market share of the local cement industry. DGKC maintains a strong nationwide presence with plants strategically located across the North, Central, and Southern regions of Pakistan. The Company effectively serves these markets through an extensive dealership network comprising around 2,300 dealers, enabling broad distribution coverage across the country.

During FY25, the Company recorded total volumetric sales of approximately 5.3 million metric tons (FY24: approximately 4.8 million metric tons) of cement and clinker, encompassing both local and export markets, generating net revenues of PKR 71,892 million (FY24: PKR 66,039 million). The growth in sales value was primarily driven by increased exports and higher clinker sales. This positive momentum continued into 1QFY26, where total volumetric sales reached 1.425 million metric tons compared to 1.112 million metric tons in the same period last year, with cement sales experiencing a significant increase of 35.03%. Consequently, the Company reported net sales of PKR 19,808 million for the latest quarter (1QFY25: PKR 15,300 million), reflecting a robust 29% growth attributable to an industry-wide rise in dispatches.

The Company’s gross profit margins have improved significantly from 16% in FY24 to 26% in FY25 and 21.7% in 1QFY26 in comparison to 19.5% in 1QFY25, driven by stable pricing that offset rising production costs and disciplined cost management, including the strategic use of alternate fuels to enhance efficiency. During FY25, net profit margins surged to 12.07%, a substantial increase from 0.82% in FY24 and 10.9% in 1QFY26 in comparison to 5.2% in 1QFY25, reflecting stronger operational performance and effective financial management. Additionally, the decline in policy rates contributed to a notable reduction in finance costs, further supporting margin expansion and overall profitability.

The cement industry, after facing declining local dispatches due to weak domestic demand and rising construction costs, is showing signs of recovery. Early FY26 indicators reflect a 16.25% year-on-year increase in industry dispatches, supported by improved domestic demand and exports. DGKC remains focused on reducing debt and boosting clinker exports, leveraging its Hub plant and newly established U.S.-based LLC to expand export opportunities and enhance profitability. Despite challenges such as elevated energy costs, currency volatility, and fiscal consolidation, the Company emphasizes operational efficiency, cost discipline, and strategic market positioning to sustain margins. Government infrastructure spending and post-flood reconstruction are expected to further stimulate demand. With prudent financial management, DGKC is well-positioned to navigate economic uncertainties.

The Company finances its operations through a mix of internally generated cash and working capital management to minimize risk by relying on different sources. During FY25, there was a fall in inventory days owing improved work in process leading to a decrease in gross working capital days to 41 days as of June 30, 2025, from 46 days from last year. The Company has sourced sufficient working capital facilities to bridge any financing gap. As of the end of September 2025, the Company had outstanding short-term borrowings of PKR 8,172 million.

During the period, there has been a continuous decline in policy rates from the highest level, along with the repayment of long-term loans, benefitting the Company in the form of lower finance costs. Additionally, the FCFO during FY25 stood at 16,016 mln, rising from the previous year, showing strong operational performance of the Company. Interest coverage (EBITDA/finance cost) of the Company for the period ended June 30, 2025, stood at 4.5x, which further improved to 8.2x in 1QFY26.

The Company has been deleveraging its balance sheet after it had acquired loans for its last expansion project. Furthermore, the overall decline in policy rate throughout the year will also provide further relief to the Company. The Company's total borrowings as of the end of September 2025 stood at PKR 16,088 million, resulting in a leveraging ratio of 13.2%, down from 18.9% at the end of June 2025.