Governance | Cherat Cement

Governance

CHAIRMAN’S REVIEW

The financial year 2023-24 was marked by numerous economic challenges. High inflation, increased taxation, political instability, and geopolitical tensions in Middle East had an adverse impact on the economy. Despite these hurdles, your Company has remained unwavering in its dedication to innovation, operational efficiency, and stringent financial oversight. Throughout the year, we have effectively managed to navigate these tough conditions, sustaining profitability and maximising shareholders value. Our performance has shown a steady improvement, despite the prevailing economic difficulties.

Cement industry in Pakistan faces many headwinds. Rising cost of inputs, economic & political instability, high inflation, fiscal limitations and restricted foreign aid have led to general slowdown in the construction sector. However, exports have risen substantially and have alleviated the problem to some extent.

On an aggregate basis, the overall sales volume of the Company decreased by 8% in which local sales declined by 13% while exports increased by 22% in comparison with last year. Despite lower volumes, the Company has managed profit after tax of PKR 5,500 million for the year ended June 30, 2024, as compared to PKR 4,404 million for the same period last year.

The Company has successfully increased solar power generation capacity and has plans to expand it further, reflecting our commitment to renewable energy and reducing our reliance on traditional power sources. We also continue to explore ways of reducing our dependence on imported fuel. Furthermore, the company is looking to invest in a range of high-potential projects in line with our long-term strategy.

The Board is committed to sustainability and recognises that it not only benefits society but also translates into substantial financial benefits for the Company. We continue our efforts to replace fossil fuels with renewable energy. Furthermore, the Company has undertaken extensive tree plantation to enhance air quality and contribute to an overall ecological balance.

Strategically, the Company focuses on market presence and optimizing operational efficiency, setting the stage for sustained growth. In terms of Corporate Social Responsibility (CSR), the Company has deepened our engagement with local communities through enhanced support programs and initiatives aimed at creating meaningful social impact. Moreover, commitment to Environmental, Social, and Governance (ESG) principles has also intensified, with new policies and practices implemented to further reduce our carbon footprint and enhanced transparency.

I am pleased to report that the Board of Directors has performed its duties and responsibilities meticulously and has contributed towards guiding the Company in its strategic affairs. It focused on major risk areas and remained actively involved in the strategic planning process of the Company. A strategy meeting was held during the year. The Board recognises that well defined corporate governance processes are important to preserve and enhance stakeholders’ value. All Directors including Independent Directors, fully participated and contributed to the decision-making process of the Board. The Board carried out its annual self-evaluation in line with the requirements of Code of Corporate Governance.

I would like to take this opportunity to extend my appreciation to the staff, customers, suppliers, bankers, Board of Directors, and shareholders for their continued support, commitment and hard work.

Omar Faruque

Chairman

BOARD OF DIRECTORS

Mr. Omar Faruque - Chairman

Non Executive Director

Mr. Omar Faruque studied from the City of London, Polytechnic London, and got a Honours degree in B.A. Finance. Currently, he is the Chief Executive of Zensoft (Pvt.) Limited and a Director of Greaves CNG (Pvt.) Limited. He is a ‘Certified Director’ from the Pakistan Institute of Corporate Governance.
Mr. Azam Faruque - Chief Executive

Executive Director

Mr. Azam Faruque is the Chief Executive of Cherat Cement Co. Ltd. He is an Electrical Engineering and Computer Science graduate from Princeton University, USA. He completed his MBA with high honors from the University of Chicago, Booth School of Business. Apart from the time he has spent in the cement industry, he has also served as a member on the Boards of State Bank of Pakistan, National Bank of Pakistan, and Oil and Gas Development Corporation Ltd. He was a Member of the Board of Governors of GIK Institute, Member of the National Commission of Science & Technology and also a Member of the National Committee of the Aga Khan Foundation. Mr. Azam Faruque has served on the Board of the Privatization Commission of the Government of Pakistan, Madian Hydro Power Ltd., Atlas Asset Management Ltd., International Industries Ltd., Atlas Battery Ltd., Indus Motor Company Ltd. and was the Chairman KPK Oil & Gas Development Company Ltd.

At present, he is a member of the Board of Directors of Faruque (Pvt.) Ltd., Greaves Pakistan (Pvt.) Ltd., Unicol Ltd., Habib University Foundation and Atlas Honda Ltd. He is a ‘Certified Director’ from the Pakistan Institute of Corporate Governance.
Mr. Akbarali Pesnani - Director

Non Executive Director

Mr. Akbarali Pesnani is an MBA and fellow member of both the Institute of Chartered Accountants and Institute of Cost and Management Accountants of Pakistan. He has served as Chairman Gwadar Port and Gwadar Port Implementation Authority from 2004 to 2006. Mr. Pesnani has been associated with the Aga Khan Development Network at senior levels for over 48 years. Presently he is the Chairman of Cherat Packaging Ltd., Aga Khan Cultural Service Pakistan, Jubilee General Insurance Co. Ltd. and a Director on the Board of Pakistan Cables Ltd. His association with the Ghulam Faruque Group dates back almost 43 years.
Mr. Arif Faruque - Director

Non Executive Director

Mr. Arif Faruque is a Swiss - qualified Attorney-at-Law and also holds Masters degrees in both Law and Business Administration from the United States of America. He recently completed the Owner President Management Program at Harvard Business School. He is the Chief Executive of Faruque (Pvt.) Ltd. He is on the Board of Directors of Mirpurkhas Sugar Mills Ltd., Cherat Packaging Ltd. and UniEnergy Ltd. Besides the above, he is also a member of the Board of Governors of Lahore University of Management Sciences (LUMS).
Mr. Ariful Islam - Director

Independent Director

Mr. Ariful Islam is a senior banker with over 39 years of experience with various banks in Bahrain and Pakistan. He qualified as a Chartered Accountant from the Institute of Chartered Accountants in England and Wales and is a Fellow member of the Institute of Chartered Accountants of Pakistan. He worked with Peat, Marwick, Mitchell & Co. (now KPMG) in their main London Office before starting his banking career with Faysal Islamic Bank of Bahrain. He joined Meezan Bank in April 1999 as the Bank’s first Chief Operating Officer and subsequently became Deputy CEO of the Bank in May 2013.

During his tenure he served on Meezan Bank Board, for Eighteen years, as an Executive Director. He was also the Chairman of the Board of Directors of Al Meezan Investment Management Limited - the Bank’s asset management subsidiary.

Currently, he is an Independent Director on the board of following companies:
• Honda Atlas Cars (Pakistan) Limited since March 2020
• Raqami Islamic Digital Bank
• Lucky Core Industries Limited
Mr. Abrar Hasan - Director

Independent Director

Mr. Abrar Hasan serves as the Chief Executive Officer and as a Director on Board of National Foods since 2000. National Foods is the leading multi-category food company in Pakistan producing over 250 different products, marketed both in Pakistan and exported to 40 countries worldwide. Under his leadership, the company has delivered steady sales growth year on year and tremendous success. Mr. Hasan is providing direction and leadership to the company by setting a clear vision for future growth and has actively pursued new market opportunities and delivered successful strategies to drive the company’s vision, focusing on continuous innovation, highest standards of quality and superior consumer value.

He graduated with a BS in Industrial Management and a minor in Industrial Engineering from Purdue University, Indiana, USA. He was elected on the Board of Cherat Cement Company Ltd. as an independent director on October 16, 2018. Mr. Abrar Hasan is also the Chairman of Board for Naymat Collateral Management Company, which is Pakistan’s first Collateral Management Company, that facilitates and empowers farmers by making formal credit accessible to them through financial institutions. Besides this, he is a also a Director of Associated Textile Consultants Holdings (Pvt.) Ltd., Pakistan Business Council. He is a Certified Director from the Pakistan Institute of Corporate Governance.
Mrs. Zeeba Ansar - Female Director

Independent Director

Mrs. Zeeba Ansar has over 27 years of private and corporate banking experience. She did her Bachelors in Economics and Statistics from the University of Punjab and then completed her MBA in Marketing and Finance from the Institute of Business Administration. In her career as a banker she has worked with Deutsche Bank AG as Manager Corporate Banking Department and Faysal Bank as Senior Vice President and Corporate Head-South. She then joined UBL as Executive Vice President and Regional Corporate Head-South and retained the position for 10 years. Her most recent professional engagement was with NIB Bank as Group Head-Corporate and Investment Banking where she worked till 2017.

She is currently serving as Director in Gul Ahmed Textile Mills Ltd. and Samba Bank Ltd. She is also a ‘Certified Director’ from the Pakistan Institute of Corporate Governance.
Mr. Yasir Masood - Director

Executive Director

Mr. Yasir Masood is a fellow member of the Institute of Chartered Accountants of Pakistan. He is a Certified Internal Auditor (CIA) and qualified Certified Information Systems Auditor (CISA). He is also a certified Director from Pakistan Institute of Corporate Governance. He is serving as the Director and Chief Operating Officer of Cherat Cement Company Ltd., and also serving on the Boards of Greaves Airconditioning (Pvt.) Ltd., Greaves CNG (Pvt.) Ltd., and Greaves Engineering Services (Pvt.) Ltd.

Mr. Yasir is also serving as Chief Financial Officer of Faruque (Pvt.) Ltd. He has been working and contributing in various committees of different Business forums. He is currently serving as Industry Expert and member of Arbitration panel of Pakistan Stock Exchange Limited (PSX).