Dawood Hercules Corporation Limited

FTM Project Report

Submitted by: Muneza Naeem

Registration No.: Fa-2014/ M. Sc. EM / 014

Introduction
Dawood Hercules Corporation Limited (DH Corp) is an investment holding company with
associated business interests which range from information technology and financial services to
food, fertilizer, chemicals manufacturing and storage, and energy. They ensure abiding
commitment to conducting business with the highest levels of integrity and professionalism.

Vision
Dawood Hercules envisions itself to be the leading investor and wealth creator of value driven
businesses.

Mission
The main mission of Dawood Hercules is profit maximization. The company achieves it by
investing in businesses that share their vision and investment criteria to achieve growth and yield
results on a consistent basis. They further aim to create intrinsic value by incorporating
efficiency and capability within their existing operations and investments.
DH Corp focuses on managing its investments including its 100% owned subsidiary DH
Fertilizers Limited, a 38% ownership of its associated company Engro Corporation Limited and
a recent acquisition of a 14% stake in The Hub Power Company Limited, Pakistans largest
private sector power producer.
We believe businesses should develop intellectual as well as financial capital. Our commitment
extends to encouraging sustainable business practices to protect our nation's human, natural and
cultural resources. Finally and most importantly, it is our unequivocal belief that ethical business
conduct is the only way to secure a better future for us all.

History
In 1948, Ahmed Dawood starts Dawood Group which would become the basis of many future
businesses. From 1952 to 1960, the group set up Dawood Cotton Mills in Karachi, Burewala
Textile Mills Limited in Punjab, Dawood Cotton Mills Limited set up in Karachi, Lawrencepur
Woolen & Textile Mills became operational and produced yarn for hand knotted carpets,
blankets for Armed Forces, tweed and worsted fabrics and the group establishes Central
Insurance Company. The company operated in all major cities of Pakistan and transacted all
conventional forms of insurance covers successfully. In 1960, radical steps were taken to expand
and modernize the production facilities in Lawrencepur Woolen & Textile Mills.
Formed in 1961, The Dawood Foundation is today one of the largest private charitable trusts in
the country. The foundation has contributed funds for establishing schools, colleges, hospitals,
dispensaries and towards scholarships for students. In 1967, Pakistans first Nylon Yarn
Producer, Dilon Limited was established.

The company stepped into a new business line i.e. Chemicals establishing Dawood Hercules
Chemicals Limited as a joint venture between the Dawood Group and Hercules Chemicals Inc.
of the USA. It was the first provate sector venture in Pakistan to receive a loan by the World
Bank. In 1971, Karnaphuli Paper Mills, Karnaphuli Rayon & Chemicals Limited, Dawood Jute
Mills and Dawood Shipping Company were founded in East Pakistan. But Group investments in
East Pakistan were lost with the creation of Bangladesh. The East Pakistan industrial
undertakings constituted almost 60% of the Groups activities. Moving on, the business
enterprise suffers further setbacks as the Government of Pakistan nationalizes a number of large
Pakistani industrial undertakings; the Group lost its flagship company, Dawood Petroleum Ltd.
Despite of all these losses, the group did not step back in opening new set ups. In 1984, a new
polyester plant was installed at Dilon unit with the daily capacity 4.5 ton of flat and textured
filament yarn. Burewala Textile Mills became Pakistans first spinning and weaving mill to
receive the prestigious ISO 9001 certification. Lawrencepur Woolen & Textile Mills obtained
ISO 9001 certification in April, 1998.
In 2002, Hussain Dawood elected Chairman of Dawood Hercules Chemicals Limited. Elixir
Securities, a full service brokerage firm was acquired the same year. The group acquired 10%
shares of Sui Northern Gas Pipelines.
In 2004. Dawood Lawrencepur Limited was created in 2004 as a result of the amalgamation of
all textile companies of the Dawood Group. The Group acquires a majority stake in Inbox
Business Technologies Pvt. Ltd. - Pakistan's leading computer brand.
In June 2010, Dawood Hercules Chemicals Limited announces the demerger of its fertilizer
business. The fertilizer business is transferred to a wholly owned and newly incorporated
subsidiary - DH Fertilizers Ltd.
In 2011, Dawood Hercules Chemicals Limited becomes Dawood Hercules Corporation Limited
(DH Corp.), a holding company which focuses on exploring investment opportunities. Central
Insurance renamed as Cyan Limited, becomes an equity investment company. DH Corp. and its
affiliates collectively acquire 16.42% stake comprising 190mn shares in Hub Power
Company Limited (HUBCO).

Success Stories
Hard work is the key to success, says Ahmed Dawood, founder of Dawood Group of Companies
and one of the most outstanding personalities of trade and industry.
Ahmed Dawood had lost all his business assets worth millions of rupees, spread all over India
including Bantwa, Madras, Calcutta, Bombay and other cities at the time of creation of Pakistan

in 1947. He had to face another serious setback at the time of Dhaka fall in 1971. At that time he
again lost huge industrial and business projects like Kernafuly Paper Mills Limited, Kernafuly
Rayon and Chemicals Limited, Dawood Jute Mills and Dawood Shipping Company with a fleet
of 25 cargo ships. All these assets slipped out of his hand with the separation of the then East
Pakistan. Dawood Group of Companies had to suffer huge losses due to nationalization policy
enforced during Bhutto regime. Major industrial projects of Dawood Group including Dawood
Petroleum and Central Life Insurance Company Limited were nationalized by the then
government in 1974.
Despite all these losses, Dawood Group managed to weather the storm and continued to retain its
leading position on the economic front of the country.
According Ahmed Dawood, who is a firm believer, "Time and circumstance snatched everything
from me but Almighty Allah continued to shower His blessings."
Dejected with the nationalization policy of the government, Dawood left Pakistan for the United
States along with his wife for a diversion. He proved his business acumen during his stay abroad
and set up an oil exploration company which successfully discovered six oil wells in Texas. He,
however, returned home in 1977. Despite the adversity it has faced, the group has proven itself in
ventures like textiles, chemicals, technology and financials.

Product Profile
Dawood Hercules Corporation Limited (DH Corp.) is an investment holding company with
diverse business interests ranging from IT and financial services to food, fertilizer, chemicals
manufacturing and storage, property development, and energy.
The business interests of Dawood Hercules are diverse and varying.
DH Fertilizers Limited
DH Fertilizers Limited (DHFL) is a Urea fertilizer manufacturing
and marketing concern. It was established in 1968 as a joint
venture with Hercules Chemicals Inc. of the USA. The 445,000
tons Urea plant is located in Sheikhupura, Punjab.
DH Fertilizers manufactures and markets Urea under the brand
name Bubber Sher, which has consistently delivered quality
and value for more than 35 years, and today it I recognized as a household name for farmers and
agriculturalists.

Dawood Lawrencepur Limited

Dawood Lawrencepur Limited has emerged from the amalgamation of
Lawrencepur Woolen and Textile Mills Limited, Dawood Cotton Mills
Limited, Burewala Textile Mills Limited, and Dilton Limited. For the past
half a century these companies embodies tradition and quality common
threads that now bind them together for the collective benefit of all
customer, shareholders, employees, and other stakeholders.
The company is principally engaged in the manufacture and sale of yarns and fabrics made from
natural and artificial fibres in various blends. It also offers numerous fabric and clothing product
lines under the well-known Lawrencepur umbrella brand.
Tenega Generasi Limited
Tenaga Generasi Limited is a wholly-owned subsidiary of Dawood
Lawrenceout Limited (DLL). The company is in the process of setting
up a 50MW Wind Energy Project in the main wind corridor of Gharo,
Sindh near Karachi, ata projected cost of USD 130nm.
TGL is one of the pioneers of wind energy in the country.
Inbox Business Technologies (Private) Limited
Established in 2000, Inbox has successfully redefined the Pakistani
computing industry. Inbox has branch offices in 7 cities with over 175
employees. With the acquisition of ThreeSixtyDegreez, a local software
development house, Inbox offers a strong and unique combination of
technology solution, industry expertise and consulting capabilities. It delivers best value for
money to its customers through integrated approach to customize software. It is the first
company in Pakistan to achieve the much-coveted Intel Premier Provider status.
Pebbles (Private) Limited
Pebbles (Private) Limited is a Real Estate venture established to create
quality based sustainable building Project Management and Development.
The Dawood Group entered the Reas Estate market in 1964, with the
construction of Dawood Centre, one of the most prestigious business
addresses in Pakistan to date. It is the only member company of USGBC
(United States Green Building Council (in Pakistan and is a registered member of ABAD
(Association of Builders and Developers).

Elixir Securities Pakistan (Private) Limited

Elixir Securities Pakistan (Private) Limited is a leading
securities firm in Pakistan providing a full range of services to
its corporate and instituitional clients domestically and
internationally. It is one of the largest and most active brokerage firms in Pakistan. Elixis has a
membership seat on the Karachi Stock Exchange. The company is among the top three brokerage
firms in Pakistan in terms of client trading volumes and handles the largest chunk of the total
annual foreign portfolio investment.
Cyan Limited
Cyan Limited is a public listed company focused on making equity
investments in high potential companies. Investing with Cyan will give
investors an access to sectors of the Pakistani economy that are not
adequately represented on the Stock Markets. Cyan also manages a
portfolio of listed securities. The liquid portfolio is invested and the
income generated is re-allocated towards equity investments in high potential private limited
companies, as and when opportunities are identified. The Growth Equity portfolio focuses on
investing in Pakistans core strengths.

Data Collection Methodology

The finalized project report is documented with data and information from several sources. The
major source of information is Dawood Hercules official website, Wikipedia and several other
sites having interview from Dawood Hercules leadership.
Further key contribution to the report has been taken from the published reports which includes
introduction to the company, its goals, portfolio, leadership of the company, highlights,
directors reports and financial statements.
The information about the business interests and the flagship companies of Dawood Hercules as
been obtained from their relevant websites.

Market/Industry Analysis
Among the top 5 Volume leaders in Chemical Industry Fauji Fert Bin was top volume leader
with a volume of 8,092,000 trader shares; followed by Engro Fertilizer Ltd. With volume of
7,331,500 trader shares and third in the series is Corp with 7,331,500 trader shares. Engros
profitability has improved significantly during the nine months and Dawood Hercules having
invested in Engro are equally successful.

Newspapers/Journals/Secondary Market Research

Reon Energy completes 125 kWp solar power project at Was Nobel
July 23, 2014
Reon Energy Solutions has recently completed a 125 kWp solar power installation
commissioned by Wah Nobel Group of Companies.
The successful completion of the project bears testament to Reon's capability as a world-class
renewable energy solutions provider and also reiterates Wah Nobel as a leader in adopting new
technologies of high quality, safety and reliability. The inauguration of the project was held on
July 14, 2014. Shahid Pracha, Chairman Reon Energy Solutions & Chief Executive Dawood
Hercules Corporation, while appreciating POF's initiative said, "Solar is a new technology for
Pakistan and the POF following on its rich tradition of innovation leadership has been amongst
the first to embrace it in a significant way. Inam ur Rahman, CEO, Reon Energy Solutions,
regarded the project as a positive start towards acquiring energy self-sufficiency.

Dawood Lawrencepur to set up a renewable energy company

July 8, 2014
Dawood Lawrencepur Limited (DLL) is planning to set up a renewable energy company, said
company secretary Hafsa Shamsie on Monday. The board of directors of DLL has decided to set
up a wholly-owned subsidiary under the name of Reon Energy Limited, which would solely
focus on the renewable energy business. The board also decided to invest Rs. 10 million as
equity in the proposed subsidiary. The company already has a renewable energy division called
Reon Energy Solutions.

HUBCO plans $900m coal-run power projects

June 20, 2014

The Hub Power Company Limited (Hubco) plans to develop coal-based projects of up to
660MW at a cost of $800-900 million. Hubco CEO Khalid Mansoor told that the company had
already sought NTDC approval for power evacuation and would be shortly seeking Letters of
Intent (LoI) from Private Power and Infrastructure Board (PPIB). The company is working on
the projects feasibility and it would take 12 to 18 months to achieve the financial closure of the
project, he said. The board of directors of Hubco in its meeting on June 19 also approved equity
investment of $20 million in Sindh Engro Coal Mining Company (SECMC). This investment
would be aimed at coal-mining which would revolutionize the power sector.

Elengy receives license to build LNG terminal at PQ

June 19, 2014
The Oil and Gas Regulatory Authority (Ogra) issued a licence to Elengy Terminal Pakistan
Limited (ETPL) a subsidiary of Engro Corporation to construct a terminal at Port Qasim
(PQ) for landing and re-gasification of liquefied natural gas (LNG) to be imported early next
year. The license was issued after ETPL fulfilled all requirements of Ogras LNG rules. An
ETPL official said the company was fully geared to start construction of the terminal within few
days. The terminal would have installed capacity to handle about 600mmcfd of LNG.

Nawaz, Zardari launch Thar coal project

Jan 31, 2014
THARPARKAR / MITHI: Prime Minister Nawaz Sharif and former president Asif Ali Zardari
attended the groundbreaking ceremony of Engro's open pit mining project in Thar. The project is
a joint venture between Engro Powergen and the government of Sindh. Initially the project
would projide 660MW of power to the energy-starved industrial units once completed in 2017.
Engro Corporation's Chairman Hussain Dawood said that the project was a major milestone that
would serve as a game changer in the energy sector. The Thar Coal Power Company would
produce 3,960MW of electricity, in six phases, from the coal in Block II of the project.

Engro Fertilizers Listed at KSE

Jan 16, 2014
The Karachi Stock Exchange allowed listing and quotation of shares of Engro Fertilizers
Limited. The market lot of the company was aimed at 500 shares of Rs. 10 each, while the
opening price of shares of the company was Rs. 28.25 per share as determined through book
building process.
Engro Fertilizer is 2nd in Chemicals industry on the basisi of volume of shares which is
7,331,500. Though the current price is 73.02 but the price is improving at a constant pace.

Dawood Hercules profits soar

From InpaperMagazine
Oct 14, 2013 07:27am
DAWOOD Hercules Corporation, a holding company with ownership stakes in corporate
stalwarts like Engro Corporation and Hub Power Company, saw its half yearly profits
skyrocket thanks to the improved performances of its associated companies.

The share prices of business improved after the peaceful change of civilian government. The new
government was attributed as being business favoring. By mid-year 2013, Dawood Hercules
owned roughly 38 percent stake in Engro Corporation. Fertilizer plant of Dawood Hercules and
Engro are almong the top four fertilizer plants getting the Lions share of gas. Thus, the
profitability of the company increased as the share prices of Engro increased.
In its half yearly report, Dawood Hercules Corporation attributed good performance to higher
production /sales of DAP. It also referred to the recent stellar financial performances of Engro
and Hubco.

Share Price Analysis on KSE

Share prices on KSE have been shown in month-wise graphs from Jan 2013 to November 2014.

35
34
33
32
31
30
29
28
27
26

Volume (in 1000s)

Close
1200.00
1000.00
800.00
600.00
400.00
200.00
0.00

Volume

Closing Value

Jan 2013: Closing Stock & Trading Volume

Dates

45
40
35
30
25
20
15
10
5
0

Volume (in 1000s)

Close
4000.00
3500.00
3000.00
2500.00
2000.00
1500.00
1000.00
500.00
0.00

Volume

Closing Value

Feb 2013: Closing Stock & Trading Volume

Dates

60
50
40
30
20
10
0

Volume (in 1000s)

Close
6,000
5,000
4,000
3,000
2,000
1,000
0

Volume

Closing Value

March 2013: Closing Stock & Trading Volume

Dates

56
54
52
50
48
46
44

Volume (in
Close
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

Volume

Closing Value

April 2013: Closing Stock & Trading Volume

Dates

64
62
60
58
56
54
52

Volume (in 1000s)

Close
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

Volume

Closing Value

May 2013: Closing Stock & Trading Volume

Dates

70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
2,500
2,000
1,500
1,000
500

Volume

Closing Value

June 2013: Closing Stock & Trading Volume

Dates

70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
2,500
2,000

1,500
1,000
500
0

Volume

Closing Value

July 2013: Closing Stock & Trading Volume

Dates

70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
6,000
5,000
4,000
3,000
2,000
1,000
0
Volume

Closing Value

Aug 2013: Closing Stock & Trading Volume

Dates

Volume (in 1000s)

Close
2,500

60
58
56
54
52
50
48
46

2,000
1,000
500

Volume

1,500

9/25/2013

9/24/2013

9/23/2013

9/22/2013

9/21/2013

9/20/2013

9/19/2013

9/18/2013

9/17/2013

9/16/2013

9/15/2013

9/14/2013

9/13/2013

9/12/2013

9/11/2013

9/10/2013

9/9/2013

9/8/2013

9/7/2013

9/6/2013

9/5/2013

9/4/2013

9/3/2013

0
9/2/2013

Closing Value

Sep 2013: Closing Stock & Trading Volume

54
53
52
51
50
49
48
47
46
45

Oct 2013: Closing Stock & Trading Volume

Volume (in 1000s)

Close
500
450
400
350
300
250
200
150
100
50
0

Volume

Closing Value

Dates

Dates

58
56
54
52
50
48
46

Volume (in 1000s)

Close
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Volume

Closing Value

Nov 2013: Closing Stock & Trading Volume

Dates

59
58
57
56
55
54
53
52

Volume (in 1000s)

Close
2,500
2,000
1,500
1,000
500

Volume

Closing Value

Dec 2013: Closing Stock & Trading Volume

Dates

80
70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Volume

Closing Value

Jan 2014: Closing Stock & Trading Volume

Dates

100
90
80
70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
3,000
2,500
2,000
1,500
1,000
500
0

Volume

Closing Value

Feb 2014: Closing Stock & Trading Volume

Dates

88
86
84
82
80
78
76
74

Volume (in 1000s)

Close
600
500
400
300
200
100
0

Volume

Closing Value

Mar 2014: Closing Stock & Trading Volume

Dates

100
90
80
70
60
50
40
30
20
10
0

Volume (in 1000s)

Close
1,400
1,200
1,000
800
600
400
200
0

Volume

Closing Value

Apr 2014: Closing Stock & Trading Volume

Dates

84
82
80
78
76
74
72
70

Volume (in 1000s)

Close
1,200
1,000
800
600
400
200
0

Volume

Closing Value

May 2014: Closing Stock & Trading Volume

Dates

June 2014: Closing Stock & Trading Volume

Volume

Closing Value

80
78
76
74
72
70
68
66
64
62

Volume (in 1000s)

Close
3,000
2,500
2,000
1,500
1,000
500
0

Dates

73
72
71
70
69
68
67
66
65

Volume (in 1000s)

Close
500
450
400
350
300
250
200
150
100
50
0

Volume

Closing Value

July 2014: Closing Stock & Trading Volume

Dates

70
68
66
64
62
60
58
56
54
52
50

Volume (in 1000s)

Close
700
600
500
400
300
200
100
0

Volume

Closing Value

August 2014: Closing Stock & Trading Volume

Dates

74
72
70
68
66
64
62
60
58
56
54

Volume (in 1000s)

Close
700
600
500
400
300
200
100
0

Volume

Closing Value

Sep 2014: Closing Stock & Trading Volume

Dates

79
78
77
76
75
74
73
72
71

Volume (in 1000s)

Close
450
400
350
300
250
200
150
100
50
0
Volume

Closing Value

Oct 2014: Closing Stock & Trading Volume

Dates

83
82
81
80
79
78
77
76

Volume (in 1000s)

Close
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Volume

Closing Value

Nov 2014: Closing Stock & Trading Volume

Dates

Monthly Average Closing Stock Price

Closing Stock

Nov-14

Oct-14

Sep-14

Aug-14

Jul-14

Jun-14

May-14

Apr-14

Mar-14

Feb-14

Jan-14

Dec-13

Nov-13

Oct-13

Sep-13

Aug-13

Jul-13

Jun-13

May-13

Apr-13

Mar-13

Feb-13

Jan-13

100
90
80
70
60
50
40
30
20
10
0

Monthly averaged graph represent the average share prices for the month. The share prices on
KSE show a continuous rising trend. The rise can be partly attributed to the changed government
favored for businesses. The share prices reach peak valu in April-14 and have started increasing
after Aug-14.

Pattern of shareholding
Category-wise Pattern of Shareholding as at December 31, 2013
Shareholders
Category - Alias
Category A

Category B
Category C
Category D

Category E
Category F
Category G
Category H
Sub Category I
Sub Category J

Shareholders Category
Directors, Chief Executive Officer,
and their spouses and minor
children.
Associated Companies,
undertakings and related parties
NIT and ICP
Banks Development Financial
Institutions, Non-Banking Financial
Institutions
Insurance Companies
Modarbas and Mutual Funds
Shareholders holding 10%
Others
General Public:
a. Local
b. Foreign
Total (excluding : Shareholders
holding 10%)

Number of
Total Shares
Shareholders Held
6
48,156,848

Percentage
%
10.01

97,725,260

20.30

1
14

2,120,896
9,288,117

0.44
1.93

4
5
2
57

13,716,860
131,023
144,584,964
8,873,914

2.85
0.03
30.04
1.84

3,783
12
3,886

26,435,486
274,838,692
481,287,116

5.49
57.10
100.00

62% of the shares are held by general public and the biggest share is held be Foreign General
Public i.e. 57%.And 20% are held by associated companies, undertakings and related parties.

Horizontal Analysis
Balance Sheet Analysis
Particulars

---------------------------------------Rs in million ----------------------------------------2008

2009
2010
2011
2012
2013
(Restated)
(Restated)

Share Capital and Reserves

Issued, subscribed and paid up capital
Revenue reserves
Fair value reserve
Shareholders equity with FVR
Non-Current Liabilities
Sub Total

1094
20,415
(4,127)
12,383
6,670
24,053

1,094
18,785
4
19,883
6,742
26,624

1,203
21,021
136
22,360
5,675
28,035

4,813
20,293
0
25,106
5,744
30,850

4,813
20,890
1
25,704
7,822
33,526

4,813
24,111
0
28,924
6,296
35,220

Current Liabilities
Current portion long term loan
Short term financing secured
Trade and other payables
Markup payable on secured loans
Provision for taxation
Sub Total
Total

0
70
538
276
693
1,577
25,630

0
1,197
648
280
858
2,983
29,607

661
46
695
233
686
2,320
30,355

0
0
642
9
29
680
31,530

216
32
302
32
0
582
34,109

1,996
905
892
54
0
3,847
39,066

Particulars
Assets
Property, plant and equipment
Long term investments
Long term loans and advances
Sub Total
Current Assets
Stores, spares and loose tools
Stock in trade
Trade debts
Loans, advances, deposit, prepayments
and other receivables including
advance income tax
Short term investments
Cash and bank balances
Sub Total
Total Assets Employed

-----------------------------------------------Rs in million -----------------------------------------2008

2009
2010
2011
2012
2013
(Restated)
(Restated)
1,396
19,206
1
20,603

2,075
21,543
2
23,621

2,238
22,425
2
24,665

2,247
24,702
2
26,951

2,229
20,814
1
33,044

2,009
34,393
0
36,401

1,026
90
9
735

1,303
83
10
913

1,074
216
2
708

678
151
3
66

676
52
0
298

768
72
40
308

2,233
934
5,027
25,630

3,399
278
5,987
29,607

2,440
1,250
5,690
30,355

2,951
731
4,579
31,530

3
36
1,065
34,109

1,335
143
2,665
39,066

Particulars
Share Capital and Reserves
Issued, subscribed and paid up capital
Revenue reserves
Fair value reserve
Shareholders equity with FVR
Non-Current Liabilities
Sub Total
Current Liabilities
Current portion long term loan
Short term financing secured
Trade and other payables
Markup payable on secured loans
Provision for taxation
Sub Total
Total

Particulars
Assets
Property, plant and equipment
Long term investments
Long term loans and advances
Sub Total
Current Assets
Stores, spares and loose tools
Stock in trade
Trade debts
Loans, advances, deposit, prepayments
and other receivables including
advance income tax
Short term investments
Cash and and balances
Sub Total
Total Assets Employed

---------------------------- Percentage Change ------------------------------09 Over 08 10 Over 09 11 Over 10 12 Over 11 13 Over 12

0%
-8%
-100%
14%
1%
11%

10%
12%
3307%
12%
-16%
5%

300%
-3%
-100%
12%
1%
10%

0%
3%
100%
2%
36%
9%

0%
15%
-100%
13%
-20%
5%

0%
1606%
20%
2%
24%
89%
16%

100%
-96%
7%
-17%
-20%
-22%
3%

-100%
-100%
-8%
-96%
-96%
-71%
4%

100%
100%
-53%
275%
-100%
-14%
8%

825%
2702%
195%
66%
0%
560%
15%

------------------------------ Percentage Change -----------------------------09 Over 08 10 Over 09 11 Over 10 12 Over 11 13 Over 12

49%
12%
92%
15%

8%
4%
-31%
4%

0%
10%
31%
9%

-1%
25%
-37%
23%

-10%
12%
-100%
10%

27%
-7%
14%
24%

-18%
160%
-79%
-22%

-37%
-30%
26%
-91%

0%
-66%
-88%
354%

14%
39%
12003
3%

52%
-70%
19%
16%

-28%
350%
-5%
3%

21%
-42%
-20%
4%

-100%
-95%
-77%
8%

50933%
302%
150%
15%

Profit and Loss Analysis

Particulars
Sales net
Cost of goods sold
Gross Profit

--------------------------------------Rs. in million ------------------------------------------2008

2009
2010
2011
2012
2013
7.429
11,040
8,716
6,310
4,602
4,840
4,312
7,080
5,214
4,044
3,816
4,051
3,116
3,960
3,501
2,266
786
789

Distribution expenses
Administrative expenses
Impairment loss
Other expenses
Other income
Result from operating activities

72
318
100
184
510
2,952

392
328
3,791
160
151
-560

268
432
2
116
462
3,145

67
418
587
82
351
1,462

76
443
0
9
488
746

96
641
39
280
294

Finance cost

901

985

910

811

915

850

Share of profit from associate net of tax

Profit before tax

1,850
3,900

1,331
-213

1,956
4,191

2,981
3,632

1,275
1,107

4,618
4,063

Income tax expenses

Profit after tax

838
3,063

925
-1,138

943
3,248

739
2,893

123
984

459
3,604

Particulars
Sales net
Cost of goods sold
Gross Profit

--------------------------------Percentage Change--------------------------------09 Over 08

10 Over 09 11 Over 10 12 Over 11 13 Over 12
49%
-21%
-28%
-27%
5%
64%
-26%
-22%
-6%
6%
27%
-12%
-35%
-65%
0%

Distribution expenses
Administrative expenses
Impairment loss
Other expenses
Other income
Result from operating activities

442%
3%
3679%
-13%
-70%
-119%

-32%
32%
-100%
-27%
206%
-662%

-75%
-3%
24449%
-29%
-24%
-54%

13%
6%
-100%
-89%
39%
-49%

26%
45%
0%
319%
-43%
-61%

Finance cost

9%

-8%

-11%

13%

-7%

Share of profit from associate net of tax

Profit before tax

-28%
-105%

47%
-2063%

52%
-13%

-57%
-70%

262%
267%

Income tax expenses

Profit after tax

2%
-137%

-22%
-385%

-22%
-11%

-83%
-66%

274%
266%

Vertical Analysis
Balance Sheet Analysis
Particulars

---------------------------------------Rs in million ----------------------------------------2008

2009
2010
2011
2012
2013
(Restated)
(Restated)

Share Capital and Reserves

Issued, subscribed and paid up capital
Revenue reserves
Fair value reserve
Shareholders equity with FVR
Non-Current Liabilities
Sub Total

1094
20,415
(4,127)
12,383
6,670
24,053

1,094
18,785
4
19,883
6,742
26,624

1,203
21,021
136
22,360
5,675
28,035

4,813
20,293
0
25,106
5,744
30,850

4,813
20,890
1
25,704
7,822
33,526

4,813
24,111
0
28,924
6,296
35,220

Current Liabilities
Current portion long term loan
Short term financing secured
Trade and other payables
Markup payable on secured loans
Provision for taxation
Sub Total
Total

0
70
538
276
693
1,577
25,630

0
1,197
648
280
858
2,983
29,607

661
46
695
233
686
2,320
30,355

0
0
642
9
29
680
31,530

216
32
302
32
0
582
34,109

1,996
905
892
54
0
3,847
39,066

Particulars
Assets
Property, plant and equipment
Long term investments
Long term loans and advances
Sub Total
Current Assets
Stores, spares and loose tools
Stock in trade
Trade debts
Loans, advances, deposit, prepayments
and other receivables including
advance income tax
Short term investments
Cash and bank balances
Sub Total
Total Assets Employed

-----------------------------------------------Rs in million -----------------------------------------2008

2009
2010
2011
2012
2013
(Restated)
(Restated)
1,396
19,206
1
20,603

2,075
21,543
2
23,621

2,238
22,425
2
24,665

2,247
24,702
2
26,951

2,229
20,814
1
33,044

2,009
34,393
0
36,401

1,026
90
9
735

1,303
83
10
913

1,074
216
2
708

678
151
3
66

676
52
0
298

768
72
40
308

2,233
934
5,027
25,630

3,399
278
5,987
29,607

2,440
1,250
5,690
30,355

2,951
731
4,579
31,530

3
36
1,065
34,109

1,335
143
2,665
39,066

Particulars
Share Capital and Reserves
Issued, subscribed and paid up capital
Revenue reserves
Fair value reserve
Shareholders equity with FVR
Non-Current Liabilities
Sub Total
Current Liabilities
Current portion long term loan
Short term financing secured
Trade and other payables
Markup payable on secured loans
Provision for taxation
Sub Total
Total

Particulars
Assets
Property, plant and equipment
Long term investments
Long term loans and advances
Sub Total
Current Assets
Stores, spares and loose tools
Stock in trade
Trade debts
Loans, advances, deposit, prepayments
and other receivables including
advance income tax
Short term investments
Cash and ank balances
Sub Total
Total Assets Employed

---------------------------------------Percentage -------------------------------------------2008
2009
2010
2011
2012
2013
4%
80%
-16%
68%
26%
94%

4%
63%
0%
67%
23%
90%

4%
69%
0%
73%
19%
92%

15%
64%
0%
80%
18%
98%

14%
61%
0%
75%
23%
98%

12%
62%
0%
74%
16%
90%

0%
0%
2%
1%
3%
6%
100%

0%
4%
2%
1%
3%
10%
100%

2%
0%
3%
1%
2%
8%
100%

0%
0%
2%
0%
0%
2%
100%

1%
0%
1%
0%
0%
2%
100%

5%
2%
2%
1%
0%
10%
100%

-----------------------------------------Percentage-------------------------------------------2008
2009
2010
2011
2012
2013
5%
75%
0%
80%

7%
73%
0%
80%

7%
74%
0%
81%

7%
78%
0%
85%

7%
90%
0%
97%

5%
88%
0%
93%

4%
0%
0%
3%

4%
0%
0%
3%

4%
1%
0%
2%

2%
0%
0%
0%

2%
0%
0%
1%

2%
0%
0%
1%

9%
4%
20%
100%

12%
1%
20%
100%

8%
4%
19%
100%

9%
2%
15%
100%

0%
0%
3%
100%

3%
1%
7%
100%

Profit and Loss Analysis

Particulars
Sales net
Cost of goods sold
Gross Profit

--------------------------------------Rs. in million ------------------------------------------2008

2009
2010
2011
2012
2013
7.429
11,040
8,716
6,310
4,602
4,840
4,312
7,080
5,214
4,044
3,816
4,051
3,116
3,960
3,501
2,266
786
789

Distribution expenses
Administrative expenses
Impairment loss
Other expenses
Other income
Result from operating activities

72
318
100
184
510
2,952

392
328
3,791
160
151
-560

268
432
2
116
462
3,145

67
418
587
82
351
1,462

76
443
0
9
488
746

96
641
39
280
294

Finance cost

901

985

910

811

915

850

Share of profit from associate net of tax

Profit before tax

1,850
3,900

1,331
-213

1,956
4,191

2,981
3,632

1,275
1,107

4,618
4,063

Income tax expenses

Profit after tax

838
3,063

925
-1,138

943
3,248

739
2,893

123
984

459
3,604

Particulars
Sales net
Cost of goods sold
Gross Profit

-----------------------------------------Percentage ------------------------------------------2008
2009
2010
2011
2012
2013
100%
100%
100%
100%
100%
100%
58%
64%
60%
64%
83%
84%
42%
36%
40%
36%
17%
16%

Distribution expenses
Administrative expenses
Impairment loss
Other expenses
Other income
Result from operating activities

1%
4%
1%
1%
7%
40%

4%
3%
34%
1%
1%
-5%

3%
5%
0%
1%
5%
36%

1%
7%
9%
1%
6%
24%

2%
10%
0%
0%
11%
16%

2%
13%
0%
1%
6%
6%

Finance cost

12%

9%

10%

13%

20%

18%

Share of profit from associate net of tax

Profit before tax

25%
53%

12%
-2%

22%
48%

47%
58%

28%
24%

95%
83%

Income tax expenses

Profit after tax

12%
41%

8%
-10%

11%
37%

12%
46%

3%
21%

9%
74%

Issues discussed in Directors Report and Auditors Report

Economic Overview Pakistan
The report has discussed the major change of government and its effects on the economy of
Pakistan. Projects like LNG terminal Project, Thar coal mining and projects we launched. Steps
were taken to improve the export economy of the company.
Further, there are several constraints related to electricity and gas shortages continued to plague
the industrial sector. The report states that the government will be able to achieve Rupee Dollar
stability only if government plans to float a Eurobond issue, get projected privatization and 3G
Licensing (auctioned this year) and hasten the disbursement of coalition support funds.

Fertilizer Market Overview

Urea production suffered in 2013 due to instable policies by government regarding gas supply.
The production was 16% higher but only utilization 75% of the production capacity. The Urea
sales in 2013 were 13% higher that usual so the gap between production and demand was met by
importing 0.9 million tons of the Urea.
Local production of 0.7 million ton of DAP was 15% higher while the demand was 1.7 million
tons. Pakistan took advantage by importing to cater for supply demand gap as the DAP prices
dropped in International market.

Business Overview
Fertilizers (DH Fertilizers Limited)
Due to inconsistent policies by the government and inadequate supply of the gas for just 56 days,
Dawood Hercules Fertilizers have continuously been facing reduced production of Urea.

Investments Energy
HUBCOs profitability for the year ended September 30, 2013 improved due to currency
devaluation and lower financing cost. The backlog of circular debt was paid off by the
government by June. However receivables from WAPDA and NTDC started accumulating again
and stood at Rs. 38.8 million by September.
The government has signed a Memorandum of Understanding with HUBCO to convert its
Residual Furnace Oil plant to coal. However if the government is unable to pay the outstanding
amounts and demonstrate that the circular debt would not build up again, HUBCO would not
be able to arrange financing for the coal conversion project. Further, the Government has not
announced specific policy incentives regarding this.
Investments Other
Engro Corporation Limited (Engro): Engros profitability has improved significantly during
the nine months. Engro Fertilizers shares were also listed on Karachi Stock Exchange in January.
Further, government contracted Elengy Terminal Pakistan Limited to set up Pakistans first ever
LNG Terminal which will increase the countrys gas supply by 10-15%.
e2e Business Enterprises (Private) Limited: Rice Bran Oil project is being set by e2e Business
Enterprises (Private) Limited in partnership with the Company has commenced in earnest and
various major items of imported plant & machine. The plant commissioning date is in rice
harvesting season in Q4 2014.
Financial Performance
The consolidated gross profit was higher than 2012 but operating profit was lesser due to one-off
expense incurred on a management consultancy exercise to chalk out the Groups future strategic
focus. Consolidated finance cost for 2013 was Rs 65 million lower than 2012 mainly due to
lower borrowing rates and repayment of loan installments. Consolidated tax charge is Rs 363
million higher than the previous year.
Engros consolidated profit was substantially higher due to profits from its fertilizer subsidiary.
As a result the profit after tax was higher.
HUBCOs consolidated profit after tax for the year was higher due to devaluation of PKR versus
US$ and lower financing cost. Half yearly profit was lower compared to previous year by Rs.
4,741 million.

Earnings per share

The unconsolidated earnings per share for the year 2013 were Rs. 0.89 per share compared to Rs.
0.35 per share for the year 2012. Consolidated earnings per share for the year were Rs 7.49
(2012: Rs. 2.04) per share.
Market capitalization and book value
At the close of the year, the market capitalization of the COmpay as Rs. 27,010 million (2012:
Rs. 15,661 million) with a market value of Rs. 56.12 per share (2012: Rs. 32.54 per share) and a
book value of Rs. 19,479 million (2012: Rs. 19,532 million) or Rs. 40.47 per share (2012: Rs.
40.59 per share).
Appropriation
A final cash dividend of Rs. 1 per share (10%) for approval by the shareholders in the 46th
Annual General Meeting was recommended by Board.
Contribution to the national exchequer and economy
During the year, in aggregate, a sum of Rs. 1,073 million (2012: Rs. 1,004 million) was paid as
taxes and levies. Furthermore, the contribution to the national exchequer as a withholding tac
agestn under different provisions of the Income Tac Ordinance 2001 amounted to Rs. 133
million (2012: Rs. 141 million).
Provident and gratuity funds
Fair value of the assets of the funded defined benefit gratuity plan was Rs. 19.5 million as at
December 31,2013. Based on the actuarial valuation, the value of assets of defined contribution
plan was Rs. 19.48 million as on December 31, 2013.
Auditors Report
A.F. Ferguson & Co. Chartered Accountants are the auditors and the audit committee has
recommended the re-appointment of A.F,. Ferguson & Co. Following are the conclusions in the
report by auditor:
1-

Proper books of accounts have been maintained by the company.

2The balance sheet and profit and loss account have been drawn up in conformity with the
Companies Ordinance 1984.
3-

The expenditure incurred during the year was for the purpose of the Companys business

4All business conducted and expenditure incurred were in accordance with the objects of
the Company.
5Zakat deductible at the source under the Zakat and Ushr Ordinance was deducted by the
company and deposited in the Central Zakat Fund.

Financial Ratios and Analysis

The financial statement enables the users to perform the comprehensive financial analysis and
helps to determine the viability of a business to assist in making important financial and
investment decisions. While it is relates to the accounting, it is less focused on manipulating the
numbers of a business than it is in looking at the business or market sector as a whole and
attempting to figure out how it will behave in the future. Financial analysts also conduct research
into the business itself or the broader market to report to management a suggested course of
action to increase the efficiency, profitability and growth of the business.
The financial analysis facilitates in predicting the future business trend, and bring into light the
strengths and weaknesses of a particular business. The evaluated financial ratios are usually
compared with the results of previous years and across the board to determine the relative
viability, efficiency & profitability of the business.
Liquidity Analysis /Operation Ratios:
The liquidity analysis determines the extent of companys financial capability to finance its short
term debts and its ability to take up the financing or investing activities and future business
commitments.
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations.
This is done by comparing a company's most liquid assets (or, those that can be easily converted
to cash), its short-term liabilities.
In general, the greater the coverage of liquid assets to short-term liabilities the better as it is a
clear signal that a company can pay its debts that are coming due in the near future and still fund
its ongoing operations. On the other hand, a company with a low coverage rate should raise a red
flag for investors as it may be a sign that the company will have difficulty meeting running its
operations, as well as meeting its obligations.
Profitability Ratios
It determines a company's revenue generation verses the expenditures incurred to earn that
revenue. As such, the profitability rations figures out the extent of the income generation.
Every firm is most concerned with its profitability. One of the most frequently used tools of
financial ratio analysis is profitability ratios which are used to determine the company's bottom
line earnings. Profitability measures are important to company managers and owners alike. If a
small business has outside investors who have put their own money into the company, the
primary owner certainly has to show profitability to those equity investors.
The ratios are used to assess a business's ability to generate earnings as compared to its expenses
and other relevant costs incurred during a specific period of time. For most of these ratios,

having a higher value relative to a competitor's ratio or the same ratio from a previous period is
indicative that the company is doing well.
Activity Analysis/ Turnover Ratios
It determines that how well a company can use its assets to return greater profits. Shareholder
return ratios show how well the company returns some of its profits to shareholders.
An indicator of how rapidly a firm converts various accounts into cash or sales.
It measure companys sales per another asset accountthe most common asset accounts used
are accounts receivable, inventory, and total assets. Activity ratios measure the efficiency of the
company in using its resources. Since most companies invest heavily in accounts receivable or
inventory, these accounts are used in the denominator of the most popular activity ratios.

Ratio Analysis
Ratio

Unit

2008

2009

2010

2011

2012

2013

Gross Profit (PR)

Net Profit to Sales (PR)
Operating Profit Margin (PR)
EBITDA margin (PR)
Earnings Per Share (SHR)
Inventory Turnover (AR)
Age of Inventory (AR)
Debtors Turnover (AR)
Average Collection Period (AR)
Operating Cycle (AR)
Total Assets Turnover (AR)
Fixed Assets Turnover (AR)
Break-up Value of Share
Dividend Yield (SHR)
Dividend Payout Ratio (SHR)
Return on Equity (PR)
Debt Equity Ratio (FLR)
Current Ratio (LR)
Quick Ratio (LR)
Total Debt Ratio (FLR)
Interest Cover Ratio (FLR)
Dividend Cover Ratio
Market Value per Share
Market Capitalization
Price Earnings Ratio (SHR)

%
%
%
%
Rs.
Time
Days
Time
Days
Days
Time
Time
Rs.
%
%
%
Time
Time
Time
Time
Time
Time
Rs.
Rs. In Million
Times

41.95
41.23
39.73
66.53
28.00
9.01
40.50
1,095.5
0.33
40.84
0.29
5.32
158.91
1.13
8.93
17.62
0.36
3.19
3.13
0.32
5.33
11.20
220.30
24,097
7.87

35.87
(10.31)
(5.07)
8.34
(9.46)
81.93
4.46
1,171.5
0.31
4.77
0.37
5.32
181.77
2.22
(38.44)
(5.72)
0.32
2.01
1.98
0.33
0.78
(2.60)
179.81
19.668
(19.01)

40.17
37.27
36.09
60.90
6.75
34.83
10.48
1,433.6
0.25
10.73
0.29
3.89
185.83
2.52
18.52
14.53
0.26
2.45
2.36
0.26
5.61
5.40
198.36
23,867
29.39

35.91
45.85
23.17
73.48
6.01
22.01
16.58
2,619.73
0.14
16.72
0.20
2.81
52.16
2.36
16.64
11.52
0.19
6.74
6.52
0.20
5.48
6.01
42.39
20,402
7.05

17.08
21.38
16.20
48.48
2.04
37.53
9.72
3,053.01
0.12
9.84
0.13
2.06
53.41
3.07
48.92
3.83
0.27
1.83
1.74
0.25
2.21
2.04
32.54
15,661
15.95

16.31
74.47
6.08
105.77
7.49
65.10
5.61
241.11
1.51
7.12
0.12
2.41
60.10
1.78
13.35
12.46
0.24
0.69
0.67
0.26
5.78
7.49
56.12
27,010
7.49

LR = Liquidity Ratio
PR = Profitability Ratio
AR = Activity Ratio
SHR = Shareholders Ratio
FLR = Financial Leverage Ratio

Activity Ratio Analysis:

The average collection period indicates the number of days for
which the company collects payables from the customers. It is
apparent from the graph that the average collection period has
increased in 2013 to 1.51 days. Though greater than previous
years, it is significantly less. The increase can be attributed to
the large scale projects and investments initiated in 2013.
The inventory turnover was high back in 2009 and after 2011 is
improving. Though a high inventory turnover is good but the
company should try to stabilize it.
The debtors turnover ratio indicates the number of times the
debtors clear the debt or make payments. Ideally, the debtors
turnover ratio should be very high. But as already discussed,
receivables are pending on WAPDA and other government
projects. This is the reason for low debtors turnover ratio in
2013. Though WAPDA made payments but by the end of 2013
the reveivables had started to pile up.
Liquidity Ratios Analysis:
The liquidity position of the company shows a decreasing trend.
From 2008 to 2013 the current ratio has decreased from 2.45 to 0.69.
Further, the quick ratio also has a declining trend from 2008 to 2013.

Profitability Ratios Analysis:

Gross Profit indicates what portion of sales is available
to meet expenses and generate profit after taking into
account the cost of goods sold. From the graph, we see
a declining trend of gross profit since 2008. This is
mainly due to the electricity and gas crisis in Pakistan.
The projects initiated to cater for it will complete in a
year or two and then there will be a rise in the gross
profit.
The Return on Equity (ROE) measures profitability
related to ownership. It indicates the a companys
efficiency to generate profits from every unit of
shareholderss equity. Though it is not possible to make
a solid judgment about it from the graph but the ratio
has improved after 2012. And with startup of new
projects and investments, it is expected to rise. Further,
the share prices on KSE show a gradual rising trend.
Financial Leverage Ratios Analysis:
Debt to equity ratio is a long term solvency ratio that
indicates the soundness of long-term financial policies
of the company. In the graph, less than 1 ratio indicates
that the portion of assets provided by stockholders is
greater than the portion of assets provided by creditors.
Creditors usually like a low debt to equity ratio because
a low ratio (less than 1) is the indication of greater
protection to their money.
Interest Coverage Ratio indicates the capacity of an
organization to pay its interest obligations. An interest
cover of 2 implies that the entity has sufficient
profitability to bear twice the amount of its current
finance cost. Thus, interest coverage ratio should be
high always. As apparent from the graph, the ratio
stayed almost constant for 2010 and 2011 after which it
dropped to 2. But for 2013 it has taken a leap to 6.

Shareholders Ratio Analysis:

The dividend payout ratio measures the percentage
of net income that is distributed to shareholders in
the form of dividends during the year. Since
investors want to see a steady stream of
sustainable dividends from a company, the
dividend payout ratio analysis is important. A
consistent trend in this ratio is usually more
important than a high or low ratio.As seen from
the graph, the dividend payout ratio is not stable and
decreased in 2013.
The price earnings ratio, often called the P/E ratio or
price to earnings ratio, is a market prospect ratio that
calculates the market value of a stock relative to its
earnings by comparing the market price per share by
the earnings per share. In other words, the price
earnings ratio shows what the market is willing to
pay for a stock based on its current earnings. In
general a higher ratio means that investors anticipate
higher performance and growth in the future. It also
means that companies with losses have poor PE ratios. But for Dawood Hercules, the ratio is
constant from 2011 to 2013.

Non-Financial Information
Corporate Social Responsibility Policy
DH Corp is fully committed to the principle of Corporate Social Responsibility (CSR). The
company aims to be known for transparent and ethical in all its dealings as well as bringing an
effective contributor to the community in which it operates. Following are the core values in all
aspects of their work, including the fulfillment of social responsibility:

Integrity
Diversity
Accountability
Commitment to Excellence
Teamwork

CSR Strategies
DH Corp pursues to achieve corporate and social objectives by focusing on four strategic areas:

Transparency Open and transparent business dealings and respect and abide by the
local laws and regulations.
Creating a great Workplace addressing the needs and aspirations of employees through
the continuing development of diversity, work-life balance and health and well-being
policies and initiatives.
Community Impact encouraging and assisting projects in support of the wider
community.
Environment further developing environmental management practices in our businesses
that minimize waste and maximize efficiencies.

Existing Policies
Existing policies in some areas may already, at least in part, address the issues listed above, and
initial work will focus on integrating these with CSR principles. In order to establish the
'baseline' of CSR work that is already taking place, a framework will be drawn up, detailing
corporate programs.
Guiding Principles
DH Corp recognizes the need to integrate business values and operations to meet the
expectations of stakeholders like investors, employees, suppliers, the community and the
environment.

Social, economic and environmental responsibilities to these stakeholders are integral to

business. Thus, they aim to demonstrate these responsibilities through actions and within
corporate policies.
Feedback, complaints and compliments from stakeholders are taken seriously and where
possible, open dialogue is maintained to ensure the fulfillment of requirements outlined
within this policy.
Openness and honesty in communicating policies, strategies, targets, performance and
governance to stakeholders to ensure commitment to sustainable development.
DH Corp make the necessary resources available to realize our corporate responsibilities
where possible. The responsibility for delivery lies with all employees.
In relation to community involvement, DH Corp looks for potential partners and staff
who can work together to raise funds and aid the charity in a practical way.
In selecting either a charity for this support or working with a charity in a team building
scenario, DH Corp supports programs which are inclusive in nature and reach across all
social and community backgrounds. Support is not given to individuals or groups with
political or sectarian connections.

Partnership Focus

They strive to improve environmental performance in businesses through implementation

of sustainable development and environmental policies.
They ensure a high level of business performance while minimizing and effectively
managing risk.
They encourage dialogue with local communities for shared benefit.
They encourage their employees to help local community organizations and activities.
They operate an equal opportunities policy for all present and potential future employees.
They offer their employees clear and fair terms of employment and provide resources to
enable their continued development.
They maintain forums for employee consultation and business involvement.
They provide safeguards to ensure that all employees are treated with respect and without
sexual, physical or mental harassment.
They provide, and strive to maintain, a clean, healthy and safe working environment.
They shall uphold the values of honesty, partnership and fairness in our relationships with
stakeholders.
Contracts with suppliers will clearly set out the agreed terms, conditions and the basis of
our relationship.

Reporting
CSR activity undertaken by DH Corp affiliated businesses is reported to the Board on a regular
(at least annual) basis. In addition, CSR activity is publicized both through the internal
communication, and externally as appropriate, through a variety of media.
DH Corp businesses aim to maintain a framework of current and future CSR programs that are
run within their business areas and report on these to the Board.

Review for company and its competitors

Among the top 5 Volume leaders in Chemical Industry Fauji Fert Bin was top volume leader
with a volume of 8,092,000 trader shares; followed by Engro Fertilizer Ltd. Currently ENGRO is
3rd in Volume Leaders. Dawood Hecules has investments in ENGRO so Dawood is earning
heavy returns from ENGRO.
Overall production of fertilizers is lesser compared to the capacity for all chemical companies in
Pakistan due to the limited gas supply in Pakistan.
The top competitor of Dawood Hercules is Fauji Fertilizers with annual capacity of 551,000
metric tons of urea and 445,500 metric tons of DAP, revamped to 670,000 metric tons of DAP.

Overall Financial Analysis & Conclusions Drawn

The overall financial position of the Dawood Hercules is good as it is one of the leading
chemical manufacturing companies in Pakistan.
The company has a versatile portfolio of businesses and has investments made in other
businesses.
Dawood Hercules is also engaged in long term projects which become very profitable after
completion.