Introduction Fatima Fertilizers Company Limited In 1988 a dynamic and radical person known as Mr. Mukhtar A.

Sheikh had conceptualized his revolutionary vision and laid the stone of a Multan based organization which commenced its business mainly in sugar. In subsequent years the untiring, dedicated and missionary zeal & zest of the founders of group had woven the net of Companies into glorified galaxy of shining Stars and named it Fatima Group. The substantial Strategic benefits of vertical integration led him and his associates to consider venturing into the manufacturing field of Textile, Sugar, Fertilizers, Malaises, Trading, Mining, Power Generation, Air Line and Packing Material etc. http://www.fatima-group.com/relianceweaving/pdf/AnnualReport2012.pdf Over the years and by the grace of all mighty Allah the Fatima Group of Companies now proudly stood unparallel and peerless leader in business groups of Pakistan. It ranks amongst the top Companies of Pakistan. The group has strong presence in most important business sectors of the region. It also has the distinction of being one of the largest players in each sector. The Group has a remarkable position in the market as good as any multinationals operating locally in terms of its quality of products, services and management skills. http://www.fatima-group.com/relianceweaving/pdf/AnnualReport2012.pdf Fatima Fertilizers Company Limited is operating under Fatima Group and received certificate of incorporation on December 24th, 2003 as a consequence of a joint venture between the Arif Habib Group and the Fatima Group. Both are prominent names and belong to the major business groups in Pakistan. Fatima Fertilizers Company Limited is the only instance of a green field project in Pakistan. The company was formed with venture partners intending to make contribution in the fertilizer industry of Pakistan, agriculture sector and hence economic growth. This project was materialized under the Fertilizer Policy 2001 by the Government of Pakistan to encourage investment in this ever growing fertilizer sector to satisfy humungous demand. The company today operates to produce both intermediate and final products which will be later discussed in this section. Fatima Fertilizers Company Limited has a production facility at Sadiqabad today with 56mW captive power plant and 110 MMCFD of dedicate gas supply from Mari Gas fields. (About Us. (n.d.). Retrieved April 24, 2012, from Fatima Fertilizers Company Limited: http://www.fatima-group.com/fatimafertilizer/aboutus.php) The foundation of production facility was laid by the then premier Shaukat Aziz on April 26th, 2006 and later construction along with engineering works started in March 2007. Over 4,000 engineers and technicians from China, Europe, Japan, United States and Pakistan were deployed to construct the production facility which erects on 950 acres of land as of today with designed urea production capacity of 500,000 Metric Tons of Urea per Annum, 420,000 Metric tons of Calcium Ammonium Nitrate per Annum, 360,000 Metric Tons of Nitro Phosphate per Annum and 420,000 Metric Tons of NPK per Annum. Soon after construction, Fatima Fertilizers Company Limited was listed on all three stock exchanges of Pakistan after first successful Initial Public Offering during month of February in 2010. As per Fatima

Fertilizers Company Limiteds Website, 200 million ordinary shares were offered to the public, causing issued share capital to increase from 1,800 million to 2,000 million shares. This complex of Fatima Fertilizers Company Limited is equipped with modern technology and encompasses all facilities such as housing, school, community center, medical center and sports related facilities for employees and their families. (About Us. (n.d.). Retrieved April 24, 2012, from Fatima Fertilizers Company Limited: http://www.fatima-group.com/fatimafertilizer/aboutus.php)

Organizational Structure:

Vision To be a Company recognized for its art of Textile and best business practices. Mission & Values The mission of company is to operate state of the art Textile plants capable of producing yarn and fabrics. The company will conduct its operations prudently assuring customer satisfaction and will provide profits and growth to its shareholders through: Manufacturing of yarn and fabrics as per the customers' requirements and market demand. Exploring the global market with special emphasis on Europe, USA and Far-East.

Keeping pace with the rapidly changing technology by continuously balancing, modernization and replacement (BMR) of plant and machinery. Enhancing the profitability by improved efficiency and cost controls.

 Recruiting, developing, motivating and retaining the personnel having exceptional ability and dedication by providing them good working conditions, performance based compensation, attractive benefit program and opportunity for growth. Protecting the environment and contributing towards the economic strength of the country and function as a good corporate citizen. http://www.fatima-group.com/relianceweaving/pdf/AnnualReport2012.pdf

The Fertilizer Industry of Pakistan Historical Review of the Fertilizer Industry 1952-1998

(MARKET WATCH (STOCK MARKET AT A GLANCE). (n.d.). Retrieved 04 30, 2012, from Pakistan Economist: http://www.pakistaneconomist.com/issue2002/issue27/market3.htm)

Operations
Production Facility Ammonia Plant Technology M.W. Kellogg's Catalytic Steam-Hydrocarbon Reforming Process Uhde Process Stamicarbon Technology CFIh, France Uhde GmbH Process

Nitric Acid Plant Urea Plant Nitro Phosphate Plant CAN Plant

(Production Facility. (n.d.). Retrieved 05 31, 2012, from Fatima Fertilizers Company Limited: http://www.fatima-group.com/fatimafertilizer/productionfacility.php)

Financials:

Fatima Fertilizers Company Limited Detailed Financials

FATIMA FERTILIZER COMPANY LIMITED

Income Statement (Rupees in thousands) For Years 2009 through 2011 2009 2010 2011 14,833,343 4,781,491 10,051,852 133,810 376,695 337,946 320,398 3,063,055 4,098,094 6,087,568 1,970,593 4,116,975 2.06

Sales Cost of Sales Gross Profit Other Income Administrative Expenses Distribution Cost Other Operating Expenses Finance Cost

6,578 96,205 7,494

1,746 113,866 8,950 122,816 (121,070) 42,569 (163,639) -0.09

Profit/(Loss) Before Taxation Taxation Profit/(Loss) for the Year Earnings per Share

(97,121) (97,121) -0.07

FATIMA FERTILIZER COMPANY LIMITED

Balance Sheet (Rupees in thousands) For Years 2009 through 2011 2009 Assets Non-Current Assets Property, Plant & Equipment Capital Work in Progress Deferred Tax Assets Long-term Loans & Deposits Total Non-Current Assets Current Assets Stores & Spares Stock-in-trade Trade Debts Loans, Advances, Deposits, Payments and Other Receivables Cash & Bank Balances Total Current Assets Total Assets Equity & Liabilities Capital & Reserves Authorized Share Capital Ordinary Shares Preferance Shares Issues, Subscribed & Paid-up Capital Ordinary Shares Preferance Shares Share Premium Accumulated Profit/(Loss) Total Shareholders' Equity Non-Current Liabilities Advance Against Preference Share Long-term Finance Dividend Payable on Preference Shares Deferred Taxation Employee Retirement Benefits Total Non-Current Liabilities Current Liabilities Curent Portion of Long-term Finance Short-term Finance - Secured Trade & Other Payables Accrued Finance Cost Provision for Taxation Total Current Liabilities Contegencies & Commitments Total Equity & Liabilities 57,202,539 69,457,038 76,347,248 2010 2011

684,940 54,292,989 8,150 54,986,076

875,984 64,044,130 21,914 16,330 64,958,358

66,827,913 1,387,735 5,481 68,221,129

1,142,798 849,238 224,417 2,216,453 57,202,539

2,479,249 539,730 256,548 939,864 283,289 4,498,680 69,457,038

1,930,679 1,215,014 196,840 945,225 3,839,361 8,126,119 76,347,248

21,000,000 4,000,000 18,000,000 (257,212) 17,742,788

21,000,000 4,000,000 20,000,000 4,000,000 790,000 (531,220) 24,258,780

21,000,000 4,000,000 20,000,000 4,000,000 790,000 3,264,865 28,054,865

3,898,250 30,846,063 54,493 34,798,806

37,446,530 603,672 73,796 38,123,998

34,457,218 1,270,163 1,704,264 102,754 37,534,399

402,796 1,662,141 2,596,001 4,660,938

316,208 3,704,173 2,989,396 64,483 7,074,260

3,032,833 4,650,956 2,837,988 236,207 10,757,984

FATIMA FERTILIZER COMPANY LIMITED

Common Size - Balance Sheets For Years 2009 through 2011 2009 Assets Non-Current Assets Property, Plant & Equipment Capital Work in Progress Deferred Tax Assets Long-term Loans & Deposits Total Non-Current Assets Current Assets Stores & Spares Stock-in-trade Trade Debts Loans, Advances, Deposits, Payments and Other Receivables Cash & Bank Balances Total Current Assets Total Assets Equity & Liabilities Capital & Reserves Authorized Share Capital Ordinary Shares Preferance Shares Issues, Subscribed & Paid-up Capital Ordinary Shares Preferance Shares Share Premium Accumulated Profit/(Loss) 2010 2011

1.20% 94.91% 0.01% 96.13%

1.26% 92.21% 0.03% 0.02% 93.52%

87.53% 1.82% 0.01% 89.36%

2.00% 1.48% 0.39% 3.87% 0.00% 100%

3.57% 0.78% 0.37% 1.35% 0.41% 6.48% 0.00% 100%

2.53% 1.59% 0.26% 1.24% 5.03% 10.64% 0.00% 100%

36.71% 6.99% 0.00% 31.47% -0.45% 31.02%

30.23% 5.76% 0.00% 28.79% 5.76% 1.14% -0.76% 34.93%

27.51% 5.24% 0.00% 26.20% 5.24% 1.03% 4.28% 36.75%

Non-Current Liabilities Advance Against Preference Share Long-term Finance Dividend Payable on Preference Shares Deferred Taxation Employee Retirement Benefits Total Non-Current Liabilities Current Liabilities Curent Portion of Long-term Finance Short-term Finance - Secured Trade & Other Payables Accrued Finance Cost Provision for Taxation Total Current Liabilities Contegencies & Commitments Total Equity & Liabilities

6.81% 53.92% 0.10% 60.83%

53.91% 0.87% 0.11% 54.89%

45.13% 1.66% 2.23% 0.13% 49.16%

0.70% 2.91% 4.54% 8.15%

0.46% 5.33% 4.30% 0.09% 10.19%

3.97% 6.09% 3.72% 0.31% 14.09%

100%

100%

100%

FATIMA FERTILIZER COMPANY LIMITED

Trend Index of Selected Accounts (Year 2009 = 100) 2009 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2010 217% 111% 126% 203% 27% 118% 119% 223% 115% 152% 2011 169% 111% 1711% 367% 2034% 392% 40873% 753% 280% 109% 231% 2009 1,142,798 849,238 224,417 2,216,453 6,578 96,205 7,494 402,796 1,662,141 2,596,001 4,660,938

Stores & Spares Loans, Advances, Deposits, Payments and Other Receivables Cash & Bank Balances Total Curren Assets Other Income Administrative Expenses Finance Cost Curent Portion of Long-term Finance Trade & Other Payables Accrued Finance Cost Total Current Liabilities

FATIMA FERTILIZER COMPANY LIMITED

Short-term Liquidity Analysis For Years 2009 through 2011 2009 2010 2011 0.48 0.64 0.76 0.48 0.56 0.64 65.43 5.45 5.50 66.06 71.56 10.13% 6.30% 47.25% 4.81% 4.00% 35.69% 11.65 (2,444,485) (2,575,580) (2,631,865) 143.12 -48.24% -6.50% 83.73%

Current Ratio Acid-test Ratio Accounts Receivable Turnover Inventory Turnover Days' Sales in Receivables Days' Sales in Inventory Approximate Conversion Period Cash to Current Assets Cash to Current Liabilities Liquidity Index Working Capital Average Net Trade Cycle Cash Provided by Operations to Average Current Liabilities

FATIMA FERTILIZER COMPANY LIMITED

Common Size - Cash Flow Statement For Years 2009 through 2011 2009 Cash Flows from Operating Activities Cash Generated/(Used in) Operations Finance Cost Paid Taxes Paid Employee Retrement Benefits Paid Net Cash Flow from/(Used in) Operating Activities Cash Flows from Investing Activities Fixed Capital Expenditure Finance Cost Paid Proceeds from Disposal of Property, Plant & Equipment Net Proceeds from Disposal of Short-term Investments Net Decrease/(Increase) in Long-term Loans & Deposits Profits Received on Savng Accounts Net Cash Used in Investing Activities Cash Flows from Financing Activities Proceeds/Advances Received Against Prefrence Shares Proceeds fro Share Deposit Money Cost of Issue of Share Capital Proceeds from Long-term Finance (Decrease)/Increase I Short-term Finance - Net Increase in Bills Payable Net Cash (Used in)/from Financing Activities Net Increase in Cash & Cash Equivalents Cash & Cash Equivalents - at Beginning of the Year Cash & Cash Equivalents - at the End of the Year 99% 0% 1% 0% 100% 2010 85% -2% 6% 7% 100% 2011 146% -42% -4% 0% 100%

669% 179% 0% 0% 848%

969% 1351% 0% 2% 2322%

-5% -44% 0% 0% 0% 0% -49%

-635% -935% 13% 0% -24% -11%

-1625% -83% -2437% -15% 0% -59% -74%

1% -4% -4% 48% 0% 4% 51%

FATIMA FERTILIZER COMPANY LIMITED

Cash Flow Statement (Rupees in thousands) For Years 2009 through 2011 2009 Cash Flows from Operating Activities Cash Generated/(Used in) Operations Finance Cost Paid Taxes Paid Employee Retrement Benefits Paid Net Cash Flow from/(Used in) Operating Activities Cash Flows from Investing Activities Fixed Capital Expenditure Finance Cost Paid Proceeds from Disposal of Property, Plant & Equipment Net Proceeds from Disposal of Short-term Investments Net Decrease/(Increase) in Long-term Loans & Deposits Profits Received on Savng Accounts Net Cash Used in Investing Activities Cash Flows from Financing Activities Proceeds/Advances Received Against Prefrence Shares Proceeds fro Share Deposit Money Cost of Issue of Share Capital Proceeds from Long-term Finance (Decrease)/Increase I Short-term Finance - Net Increase in Bills Payable Net Cash (Used in)/from Financing Activities Net Increase in Cash & Cash Equivalents Cash & Cash Equivalents - at Beginning of the Year Cash & Cash Equivalents - at the End of the Year (1,947,699) (7,494) (11,688) (2,810) (1,969,691) 2010 (323,166) 8,950 (21,593) (27,648) (381,357) 2011 10,921,854 (3,165,837) (281,917) (8,499) 7,465,601

(13,176,056) (3,530,065) 142 (2,751) (16,708,730)

(3,694,954) (5,152,581) 684 (8,180) (8,855,031)

(385,831) (3,311,446) 395 2,233 27,679 30,128 (3,636,842)

3,898,250 2,491,314 12,498,458 (464,440) 18,423,582 (254,839) 479,256 224,417

101,750 2,790,000 (110,989) 6,197,671 316,208 9,295,260 58,872 224,417 283,219

43,521 (316,208) (272,687) 3,556,072 283,289 3,839,361