Fauji Fertilizer Bin Qasim

201
Analysis of Financial
Statements Final
Report
Sectorial Analysis of Fauji Fertilizer Bin
Qasim
Table of Contents
Table of Contents.............................................................................................2
Acknowledgement............................................................................................4
Company Profile...............................................................................................5
Vision............................................................................................................ 6
Mission.......................................................................................................... 6
Company Performance .................................................................................6
Sponsors/group PROFILE...............................................................................6
ACHIEVEMENTS OF FFBL:..............................................................................8
FERTILIZER SECTOR
......................................................................................................................... 9
SECTORAL OUTLOOK.....................................................................................9
AGRICULTURE SECTOR...............................................................................9
TYPES OF FERTILIZER...............................................................................10
GLOBAL SCENARIO...................................................................................10
PRICING....................................................................................................12
DEMAND & SUPPLY......................................................................................14
TAXES...................................................................................................... 15
Company Financials.......................................................................................16
Balance Sheet.............................................................................................16
Income Statement.......................................................................................19
Vertical & Horizontal Analysis........................................................................19
Vertical Analysis..........................................................................................20
Vertical Analysis of Balance Sheet...........................................................20
Vertical Analysis of Income Statement.....................................................23
Horizontal Analysis......................................................................................24
Horizontal Analysis of Balance Sheet (Base Year 2005)...........................24
Horizontal Analysis of Income Statement (Base Year 2003)....................27
Internal Ratio Analysis....................................................................................29
External Ratio Analysis...................................................................................33
DuPont Return on Equity................................................................................37
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FAUJI FERTILIZER BIN QASIM LIMITED
Insight for Investors & Creditors.....................................................................40
Future Projections..........................................................................................41
Recommendation...........................................................................................42
References.....................................................................................................43
Appendix........................................................................................................ 44
Balance Sheet.............................................................................................44
Income Statement.......................................................................................47
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Acknowledgement
The compilation of this report could not have been realized without the blessings of
Almighty Allah. I am highly indebted to quite a few people who have been there from
the beginning till the completion of my research. Their undue support has been the source
of inspiration for us to complete it efficiently within time.
I would deeply like to thank our teacher for his guidance during the project. His excessive
support has been the source of motivation to perform our best, regarding the report.
4
Company Profile
Fauji Fertilizer Bin Qasim Limited Plant site is a modern Granular Urea and Di-
Ammonium Phosphate (DAP) fertilizers manufacturing complex, built at a cost
of US$ 468 Million and located in Eastern Zone of Bin Qasim, Karachi, with
Head Office at Harley Street, Rawalpindi.
Initially named as FFC-Jordan Fertilizer Company (FJFC), wef 17th Nov 1993,
with FFC (30%), FF (10%) and JPMC (10%) as main sponsors. The company
was formally listed with stock exchanges in May 1996 and commercial
production commenced wef Jan 2000. However, it continued to run in crises
due to technical, financial and managerial reasons till 2001. DAP Plant
brought to suspension in 2001 due to accumulated loss of Rs. 6.5 Billion. It
resumed production in Sep 2003, after a lapse of 2 years.
Renamed as Fauji Fertilizer Bin Qasim Ltd. (FFBL) in 2003, as such Jordan
Phosphate Mines Co. (JPMC) had sold its entire equity in the company.
Accordingly Phosphoric acid supply agreement with Jordan was terminated.
The company turned out to be profitable after 3 years i.e, by 2004 and
declared 'maiden dividend' in 2004. Profitability has constantly been on the
rise since then and 2007 has been the most profitable year of the company.
One of the milestones in the success of FFBL is its accreditation of ISO
certification, which was achieved in Mar 2006 for both the Head Office and
Plant site.
FFBL fertilizer complex is state of the art manufacturing facility with

advanced Distributed Control System for safe and efficient operation. The
phosphoric acid being raw material for DAP plant is imported from Morocco
and initially stored in tanks at Port Qasim. Design capacity viz-a-viz actual
production of Plants is as under:
Manufacturing Plants Production (Metric Ton / Day)
Original Actual (Approx)
Urea Granular 1670 1920
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DAP 1350 2230 (After Revamp)
Ammonia 1270 1570 (After Revamp)
Vision
• Be a leading fertilizer company with a diverse product base

• Continue to excel in operations
• Commitment to business ethics, safety, health, environment and
involvement in the community
• Remain a good corporate citizen
• Be one of the best corporate employers
• Keep exploring other project investment opportunities to remain
progressive, flexible and viable
Mission
Pursue as a team, the progressive strategy based on the principle of
maintaining the spirit of excellence to remain among the best companies for
delivering competitively priced quality products, achieving sustainable
growth rate in all activities and generating optimum profits to the satisfaction
of all stakeholders.
Company Performance
The adverse factors facing the Economy also affected Company’s
performance for the year 2008, despite the fact that Company achieved the
best results in its history under an extremely tough financial and sales
environment during the year. After completion of Ammonia Plant BMR in year
2007 and witnessing successful completion of DAP plant revamp project
during first quarter of the current year, the Company had the potential to
produce even better results than achieved. However, the DAP sales target
was not achieved due to significant up-surge in phosphoric acid prices,
substantial devaluation of Pak Rupee against other currencies, delay in
receipt of DAP subsidy claim from GOP, and very high interest rates over
much needed short term borrowings. Notwithstanding these factors,
arrangement of funds from financial institutions was itself a good job done by
the management of the Company.
Sponsors/group PROFILE
Fauji Foundation (FF) Group was founded in 1954 as a charitable trust for the
uplift of ex-servicemen of the armed forces and their families.
Today, the foundation is a multi-disciplinary welfare-cum-industrial entity,
having operations across the country. The trust has interest in a number of
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wholly and partially owned units, income from which is used to fund welfare
operations. No aid or funding is accepted from the federal and provincial
governments. Earnings of the trust are derived either directly from operations
of the wholly owned units or indirectly from shareholding projects. FF’s
shareholding projects are diverse and amongst others include cement
manufacture, power, oil terminal & distribution, fertilizer manufacture &
distribution and IT projects. With its well-managed and profitable business
concerns, FF is an entirely self-supported entity operating in a private sector.
The major companies under management of Fauji Foundation apart from

FFBL are:
1. Fauji Fertilizer Company Limited (Parent Company of FFBL holding of

51%)
2. Fauji Cement Company Limited
3. Mari Gas Company Limited
4. Fauji Oil Terminal Company Limited
5. Fauji Kabirwala Power Company Limited
Manifolds of funded & non-funded facilities for group concerns of FFBL i.e.
Fauji Fertilizer Co. Ltd., Fauji Kabirwala Power Company Ltd. and Fauji
Cement Co. Ltd. have already been offered.
The details of current exposure offered to group concerns of FFBL are as

under:
Non-
Non- Funded
Funded Funded
Associated Concerns Funded Outstandi
Exposure Outstandin
Exposure ng
g
Fauji Fertilizer Company 1,140.00 * 1,500.00 500.00 70.00

Ltd.
Fauji Cement Company Ltd. - 150.00 - -
Fauji Kabirwala Power - 300.00 - -

Company Ltd.
Total Group Exposure 1,140.00 1,020.00 500.00 70.0
Net Group Exposure 1,140.00 510.00** 500.00 70.0
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Max. Exposure on the
2,091.24 2,987.49
Client-Group
Cushion Available for

951.24 1,967.49
FFBL
* Total exposure of FFCL is to be capped at Rs. 1,710.00 M as per PR-1 of corporate banking.
** As per PRs for Corporate, R-1(e), in arriving at total exposure, 50% Weightage is given to non-fund
based financing facilities.
Note: Fauji Cement Company Ltd. & Fauji Kabirwala Power Company Ltd. has
been principally approved and indicative term sheets have been given to
them however acceptance have not been received yet.
ACHIEVEMENTS OF FFBL:
FFBL has witnessed one of the most successful turnarounds in Pakistan’s

fertilizer industry’s history, after undergoing re-structuring exercise with the
Government of Pakistan, sponsors and lenders. As a nascent company in
early 2000, FFBL suffered major losses. However, prudent strategies helped
the company to emerge out of this deplorable condition, marking the
relentless growth of the company from FY02 onwards. Further, the
commencement of previously resumed DAP plant in 2003 increased the profit
margins of the company by manifold.
The year 2008 is quite significant for the company due to completion of GOP
compensation and suspension of subsidy on feed gas, the only raw material
of ammonia which in turn is raw material for Urea and DAP. There was,
therefore, a dire necessity for the company of not only expanding its existing
capacities but also to look out and grab other appropriate business
opportunities.
The company has successfully completed its project of Ammonia Balancing,

Modernization, Revamping, Expansion (BMRE - Ammonia) in last year to
increase its production from 1270 MTPD to 1570 MTPD. An increase of about
23% over existing capacities with the total project cost of Euro 50 million
approx.
The company has undergone an extensive up gradation program of its plant

to improve efficiency and enhance capacity. They are continuing down their
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path of excellence by completing their project of DAP Plant Balancing,
Modernization and Revamping (DAP BMR). This project’s total cost was US$
26 million, which had been incurred to enhance production, to improve
reliability and efficiency.
FERTILIZER SECTOR
SECTORAL OUTLOOK
AGRICULTURE SECTOR
The undeniable importance of the agriculture sector to the economy of
Pakistan is reflected in its contribution to national output, employment and
export earnings. This sector contributes 22% to the country's Gross Domestic
Product (GDP) and employs 43% of total labour force. Growth in this area of
Economy is vital for poverty alleviation, as about 66 percent of rural

population is directly or indirectly dependent on the agriculture sector for
sustenance. Pakistan’s major source of foreign exchange earnings is the
textile sector which also relies on agricultural performance. The major crops
of Pakistan are wheat, cotton, rice and sugarcane, which make up 7% of the
country’s GDP.
Fertilizer has a significant contribution in increasing crop yields and

productivity. Proper application of nutrients helps in efficient utilization of
limited natural resources such as land and water. Fertilizers improve crop
yield by removing the deficiency of chemical elements taken from the soil by
harvesting, grazing, leaching or erosion. Coupled with improved seeds, better
insecticides and more effective fungicides, chemical fertilizers play a vital
role in boosting agricultural output. With proper farmer education and
increased awareness, the fertilizer off-take can improve substantially.
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Nutrient application in suitable quantities can further improve farm
productivity, thereby helping in eradicating poverty.
TYPES OF FERTILIZER
Urea, which represents 65% of total fertilizer consumed and di-ammonium
phosphate (DAP), which accounts for 18%, are the main types of fertilizer
used in Pakistan, but there is a total of eight different fertilizer products
which fall into three categories.
Urea, along with calcium ammonium nitrate (CAN) and ammonium sulphate
(AS) together make up almost three fourths of total fertilizer consumption
and come under the nitrogenous category. Under the phosphatic category
which makes up about 27%, is DAP, triple super phosphate (TSP), single
super phosphate (SSP) and nitrophosphate (NP). And under the last category,
potassic is sulphate of potash which makes up only 1%. Since the soil in
Pakistan generally tends to be deficient in nitrogen, urea is the most used
fertilizer. DAP is used, as most phosphatic fertilizers are to counter the effect
of the acidic urea and maintain levels of fertility in the soil.
GLOBAL SCENARIO
The world grain consumption has outpaced production in six of the last seven
years, with 2005 being the only exception, in which production superseded
supply due to favorable weather in almost all the major grain producing
countries. With the growing demand of food and rapid increase in demand for
biofuels, the grain consumption growth has witnessed an increase of 2% in
2007 from the historical average rate of 1.2% p.a. This has led to a widening
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gap between consumption and production resulting in sharp increase in food
prices in the global market.
During 2007, total global production of grains was recorded at 2.3bn tons, up
4% YoY. Despite, the increase in production the global commodity prices
have climbed significantly during the past twelve months on the back of
rising demand from emerging economies. Corn, wheat, and rice account for
about 85% of the global grain harvest (in terms of weight), while sorghum,
millet, barley, oats, and other less common grains make up the rest. China,
India, and the United States alone account for 46% of global grain production;
Europe, including the former Soviet states, grow another 21%.
In 2007, a 200mn ton jump in the global coarse grain harvest was responsible
for nearly all of the increase in the total grain harvest. Production of coarse
grains—a group that includes corn, barley, sorghum, and other grains fed
mainly to animals—increased 10% from 985mn tons in 2006 to 1,080mn tons
in 2007. During 2007, a significant amount of global corn production was
used in producing biofuels, the use of which is being promoted in developed
countries (mainly EU and USA). Governments in developed countries have
been encouraging the use of biofuels primarily due to (1) Increasing price of
international crude oil and (2) Bio-fuels are environment friendly.
Out of a total of 784mn tons of corn harvested during 2007, about 255mn
tons or 32.5% was used in extracting biofuels which has resulted in sharp
increase in price of the commodity. Higher corn prices prompted many a
farmers in various countries (China, Brazil and the United States) to switch to
corn harvesting. Another major consumer of grains is the livestock sector,
which accounted for approximately 627mn tons (27%) in the form of feed for
the cattle. Demand of grains from this sector has grown rapidly over the past
few years on account of higher consumption of dairy products and meat by
the developing countries especially China, India and Brazil.
The amount of grain stored by governments— a good measure of the global

cushion against poor harvests and rising prices—continues to decline. Global
cereal stocks were expected to stand at 318mn tons by the close of the 2007
season, equivalent to about 14 percent of annual consumption, lowest since
many years. In comparison to the global scenario, Pakistan’s food grain
production has witnessed a rising trend over the years registering a 4-year
CAGR (FY02-06) of 5.7% on the back of good harvest of major crops (wheat &
rice) which account for almost 84% of the total grain production of the
country.
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PRICING
Local Arena
Urea prices have shown a positive trend over the last few years on the back
of step-wise increase in feedstock gas prices, the primary raw-material for
urea manufacturing. Government heavily subsidizes feedstock prices in
Pakistan, to keep the urea prices within affordable limits of the farmers. A
50kg bag of urea is sold at PKR 558-565 (prices were revised upwards in
Dec’07) versus a price of approximately PKR 1000 per bag in the
international market. DAP prices on the other hand have undergone a radical
increase during 2007, due to record high phosphoric acid prices in the
international market (a major raw material). Local prices of DAP are highly
correlated with their global rates since over 70% of the commodity used in
the country is imported. As a result, domestic DAP prices have surged during
CY07, rising from PKR 800 per bag at the start of the year to touch PKR
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1,680 by Dec’07
Urea Prices
International urea prices have escalated at a healthy 4-year CAGR (FY03-07)
of 19.6%, driven by its increased usage globally from 128mntpa in 2005 to
138mntpa in 2007. On the other hand local urea prices have risen at a 4-year
CAGR of 6.8% from FY03 to FY07. GoP heavily subsidizes the feedstock gas
prices in order to make available the fertilizer to the local farmers at an
affordable cost. Urea prices are primarily linked to the increase in feedstock
gas prices, which are expected to rise at a next 4-year CAGR of 11% going
forward. Consequently we expect local urea prices to increase at a 4-year
CAGR of 5.5% for the period FY07-FY11.
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DAP Prices
International DAP prices have risen sharply during 2007 (+143% YoY) on the
back of rising demand for the phosphatic fertilizer for harvesting of crops
used in production of biofuels. In the local market, price of DAP fertilizer too
has followed suit and has gone up from PKR 873 per 50kg bag at the start of
2007 to around PKR 1,680 per bag at present. Despite the PKR 470 per bag
subsidy by the GoP, the hefty rise in DAP prices has caused its off-take to
drop significantly during the past few months with many farmers reverting to
the use of urea. FFBL the only producer of DAP and caters to only 31% of the
DAP demand of Pakistan while the rest of the demand is met through
imports. Since the local prices are highly correlated to global prices we
estimate DAP prices to increase at a 4-year CAGR (CY07-11E) of 6.3%.
DEMAND & SUPPLY
There are nine fertilizer plants in Pakistan with a total installed capacity of
4.35mn tons including urea, Di-ammonium phosphate (DAP), single super
phosphate (SSP), calcium ammonium nitrate (CAN), nitro phosphate (NP) and
ammonium sulfate (AS). Total demand of these fertilizers is estimated to
grow at an average of 4% per annum in the medium term. The shortfall of
approximately 1.1mntpa is met through import on which GoP provides
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subsidies. During FY08, the GoP allocated a sum of PKR 13.5bn for import of
various fertilizers.
The graph above shows the demand trend of both major fertilizers, urea and
DAP, which has increased at a 4-year CAGR (CY02-06) of 4.6% and 7.7%
respectively. Given the increase in crop prices, low per acre usage of
fertilizers, increasing awareness among the farming community and vast
cultivable land, we estimate demand growth of fertilizers to average over 4%
per annum over the next 4 years.
TAXES
The government has privatized and deregulated fertilizer imports and prices.
In 1986, all subsidies on nitrogenous fertilizers were abolished followed by
phosphates in 1993 and potash in 1997. Provincial quotas were abolished,
provincial supply organizations in the public sector abandoned and import
controls were lifted. All imports are affected by the private sector. In 2001,
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the government imposed a 15 percent general sales tax on all fertilizer
products. Farmers have to pay international prices for imported products,
apart from urea.
The share of the private sector in fertilizer marketing is 89 percent, compared

to 11 percent for the public sector. The private sector handles about 90
percent of the urea and 100 percent of the DAP, the two major fertilizer
products consumed in the country. A dealer network of about 8 000 retailers
exists in the country.
Fertilizer companies select and train the dealers. There is no government
intervention. However, under ‘Fertilizer Acts’ promulgated by provinces,
fertilizer quality is monitored by the provincial governments.
Company Financials
Balance Sheet
2001 2002 2003 2004 2005 2006 2007 2008
SHARE CAPITAL
AND RESERVES
Share capital 3,341,10 8,099,01 9,099,01 9,341,10 9,341,10 9,341,10 9,341,10 9,341,10
0 4 4 0 0 0 0 0
Capital reserve 228,350 228,350 228,350 228,350 228,350 228,350 228,350 228,350
Translation 572,399
reserve
Accumulated - - - - - - - 344,522
loss 6654018 4523151 3319790 2,422,80 1,841,91 1,031,75 1,060,52
8 9 4 3
TOTAL SHARE - 3,804,21 6,007,57 7,146,64 7,727,53 8,537,69 8,508,92 10,486,3
HOLDER EQUITY 3,084,56 3 4 2 1 6 7 71
8
NON-CURRENT
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LIABILITIES
Long term 2,710,13 2,293,19 1,876,24 1,459,30 1,042,36 625,416
financing 8 2 8 4 0
Liabilities 19,875 11,290 6,294 3,310
against assets
subject to
finance lease
Long term 251,408 212,730 174,051 135,373 96,694 58,017
murabaha
Deferred tax 19,000 1,322,28 2,634,33 4,080,52 4,196,79
liability 3 9 9 3
Long term loan 5,366,31 9,135,92 8,426,61 7,778,40 7,130,20 6,482,00 5,833,80 5,185,60
4 7 0 9 8 7 6 5
Redeemable 2,073,50 3,621,32
Capital 6 9
TOTAL NON- 7,439,82 12,776,2 11,408,0 10,295,6 10,509,0 10,714,3 11,053,3 10,065,8
CURRENT 0 56 31 21 84 33 89 31
LIABILITIES
CURRENT
LIABILITIES
Trade and other 929,295 2,163,36 2,905,99 2,674,90 2,377,95 6,264,66
payables 6 5 3 2 9
Mark - up 2,494 27,536 94,348 104,952 123,887 593,586
accrued
Short term 137,133 1,176,62 2,236,64 4,531,83 5,875,34 18,257,0
borrowings 5 9 6 1 82
Current portion
of:
- Long term 208,472 416,944 416,944 416,944 416,944 416,944
financing
- Liabilities 7,506 6,467 4,015 2,586 2,651
against assets
subject to
finance lease
- Long term 19,340 38,679 38,679 38,679 38,679 38,679
murabaha
- Long term loan 648,201 648,201 648,201 648,201 648,201 648,201
Sales tax 46,880 11,226 308
payable
TOTAL CURRENT 14,506,1 2,192,86 1,952,44 4,524,69 6,344,83 8,429,32 9,483,65 26,219,4
LIABILITIES 25 9 1 8 1 7 5 69
TOTAL 21,945,9 14,969,1 13,360,4 14,820,3 16,853,9 19,143,6 20,537,0 36,285,3
LIABILITIES 45 25 72 19 15 60 44 00
CONTINGENCIES
AND
COMMITMENTS
18,861,3 18,773,3 19,368,0 21,966,9 24,581,4 27,681,3 29,045,9 46,771,6
77 38 46 61 46 56 71 71
FIXED ASSETS
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Property, plant 16,701,9 15,801,5 15,178,8 14,539,3 14,563,1 14,930,3 16,458,2 15,847,1
and equipment 86 81 56 49 03 39 65 04
Intangible asset 47,370 23,686
Capital work in 52,228
progress
LONG TERM 358,600 734,275 1,411,15 1,411,15 2,416,77

INVESTMENTS 0 0 0
LONG TERM 34,496 26,936 25,210 18,518 17,395 17,273 15,228 15,228
DEPOSITS AND
DEFERRED
COSTS
DEFERRED TAX 999,351 1,160,68 143,527
8
CURRENT
ASSETS
Stores, spares 403,797 465,013 455,915 520,399 577,082 797,314 1,266,57 1,422,56
and loose tools 0 7
Stock in trade 324,764 130,676 209,511 252,252 1,022,95 800,535 587,946 5,676,73
7 9
Trade debts 558,982 644,967 392,377 431,246 115,081 231,272 243,751 285,454
Advances 447,177 405,924 11,886 207,391 37,816 61,160 79,519 64,637
Trade deposits 2,590 2,340 3,306 5,058 8,467 4,876
and short term
prepayments
Interest accrued 6,304 23,733 85,545 91,218 96,526 65,669
Due from GOP on 729,181 12,440,0
account of DAP 60
subsidy
Other 241,820 322,273 336,266 1,346,86 454,137 591,043
receivables 7
Income and sales 40,471 68,720 157,005 251,034
tax refundable -
net
Investments at 502,387
fair value
through profit or
loss
Short term 3,894,66
investments 2
Bank balances 319,121 199,292 1,618,73 5,078,61 6,931,61 7,235,74 3,800,56 7,941,52
2 3 5 9 9 4
TOTAL CURRENT 2,053,84 1,845,87 2,979,60 6,906,96 9,266,67 11,322,5 11,161,3 28,492,5
ASSETS 1 2 6 7 3 94 28 69
TOTAL ASSETS 18,861,3 18,773,3 19,368,0 21,966,9 24,581,4 27,681,3 29,045,9 46,771,6
77 38 46 61 46 56 71 71
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Income Statement
2001 2002 2003 2004 2005 2006 2007 2008
Sales - net 6,246,229 3,964,326 5,166,515 11,462,410 14,254,764 14,707,288 12,242,888 26,820,812
Cost of sales (6,237,734) (2,915,053) (4,002,866) (8,201,623) (9,692,236) (10,023,044) (7,420,310) (18,594,752)
GROSS PROFIT 8,495 1,049,273 1,163,649 3,260,787 4,562,528 4,684,244 4,822,578 8,226,060
Other operating income 36,545 48,145 43,401 107,688
Distribution costs (598,097) (523,570) (580,286) (931,066) (1,257,698) (1,420,401) (1,068,629) (1,776,864)
Administrative expenses (72,383) (74,706) (84,730) (90,653) (114,470) (103,643) (131,369) -207,383
(625,440) 499,142 542,034 2,346,756 3,190,360 3,160,200 3,622,580 6,241,813
Finance cost (156,705) (84,817) (259,817) (412,370) (630,513) (2,791,971)
Other operating expenses (19,970) (113,686) (169,746) (243,074) (343,813) (564,516)
Operating Profit (Loss) (625,440) 499,142 365,359 2,148,25 2,760,797 2,504,756 2,648,254 2,885,326
3
Share of profits of - 133,221
associate and joint
venture
Compensation from GOP 455,000 455,000 700,000 700,000 600,000 600,000
Others (4,556) (8,850) 454,123 552,158 651,675 786,328
Financial charges (2,558,636) (338,465)
(2,563,192) (347,315) 455,000 455,000 1,154,123 1,252,158 1,251,675 1,519,549
PROFIT BEFORE (3,188,632) 151,827 820,359 2,603,253 3,914,920 3,756,914 3,899,929 4,404,875
TAXATION
Taxation (31,231) 979,040 380,504 (772,161) (1,465,811) (1,312,056) (1,359,896) (1,505,254)
PROFIT AFTER TAXATION (3,219,863) 1,130,867 1,200,863 1,831,092 2,449,109 2,444,858 2,540,033 2,899,621
Earnings per share - basic (9.64) 2.07 1.31 1.98 2.62 2.62 2.72 3.10
and diluted (Rupees)
Vertical & Horizontal Analysis
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Vertical Analysis
A method of financial statement analysis in which each entry for each of the
three major categories of accounts (assets, liabilities and equities) in a
balance sheet is represented as a proportion of the total account.
Vertical Analysis of Balance Sheet
2001 2002 2003 2004 2005 2006 2007 2008
SHARE CAPITAL AND

RESERVES
Share capital 17.71 43.14 46.98 42.52 38.00 33.75 32.16 19.97
% % % % % % % %
Capital reserve 1.21% 1.22% 1.18% 1.04% 0.93% 0.82% 0.79% 0.49%
Translation reserve 1.22%
Accumulated loss - - - - - - - 0.74%
35.28 24.09 17.14 11.03 7.49% 3.73% 3.65%
% % % %
- 20.26 31.02 32.53 31.44 30.84 29.29 22.42
16.35 % % % % % % %
%
NON-CURRENT LIABILITIES
Long term financing 13.99 10.44 7.63% 5.27% 3.59% 1.34%
% %
Liabilities against assets 0.10% 0.05% 0.03% 0.01%
subject to finance lease
Long term murabaha 1.30% 0.97% 0.71% 0.49% 0.33% 0.12%
Deferred tax liability 0.10% 5.38% 9.52% 14.05 8.97%
%
Long term loan 28.45 48.66 43.51 35.41 29.01 23.42 20.08 11.09
% % % % % % % %
Redeemable Capital 10.99 19.29
% %
TOTAL NON-CURRENT 39.44 68.06 58.90 46.87 42.75 38.71 38.05 21.52
LIABILITIES % % % % % % % %
CURRENT LIABILITIES
Trade and other payables 4.80% 9.85% 11.82 9.66% 8.19% 13.39
% %
Mark - up accrued 0.01% 0.13% 0.38% 0.38% 0.43% 1.27%
Short term borrowings 0.71% 5.36% 9.10% 16.37 20.23 39.03
4
% % %
Current portion of:
- Long term financing 1.08% 1.90% 1.70% 1.51% 1.44% 0.89%
- Liabilities against assets 0.04% 0.03% 0.02% 0.01% 0.01%
subject to finance lease
- Long term murabaha 0.10% 0.18% 0.16% 0.14% 0.13% 0.08%
- Long term loan 3.35% 2.95% 2.64% 2.34% 2.23% 1.39%
Sales tax payable 0.21% 0.04%
TOTAL CURRENT LIABILITIES 76.91 11.68 10.08 20.60 25.81 30.45 32.65 56.06
% % % % % % % %
TOTAL LIABILITIES 116.35 79.74 68.98 67.47 68.56 69.16 70.71 77.58
% % % % % % % %
CONTINGENCIES AND
COMMITMENTS
100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
% % % % % % % %
Share capital which is also equity financing was 17.71% in 2001 which is the
lowest in all the years mentioned above but it has increased afterwards till
year 2004. As the number of shares issued in 2001 was 3,341,100 shares and
they have increased it to 9,341,100 shares in 2008. The reason for increasing
shares is to raise funds for the company.
As the share holder equity section is increasing year by year but in terms of
percentage it is going down and it is about 30% of the assets.
Long term financing is also falling down which means that the company has
increased its capital to overcome its business. Long term financing is a form
of financing that is provided for a period of more than a year. Long term
financing services are provided to those business entities that face a
shortage of capital. In the year 2008, it becomes 1.34% which is the best in
comparison of the previous years.
There is no redeemable capital after 2002 which tells us that the company
position is getting good and strong that they were not in the need of urgent
funds by issuing some temporary shares.
Trade & other payables are remained consistent while the short term
borrowings have increased over the period. It is the loan that a borrower
needs to pay back within 12 months.
The current liabilities are around 25 to 30% which means that the company is
paying off its liabilities within one year.
4
In the year 2001, the company’s total liabilities were over 100% afterwards it
drops to around 75% in the remaining years which means that the company
is about 75% debt financed in these years.
2001 2002 2003 2004 2005 2006 2007 2008

FIXED ASSETS
Property, plant and 88.55 84.17 78.37 66.19 59.24 53.94 56.66 33.88
equipment % % % % % % % %
Intangible asset 0.25% 0.12%
Capital work in progress 0.28%
LONG TERM INVESTMENTS 1.63% 2.99% 5.10% 4.86% 5.17%

LONG TERM DEPOSITS AND 0.18% 0.14% 0.13% 0.08% 0.07% 0.06% 0.05% 0.03%
DEFERRED COSTS
DEFERRED TAX 5.32% 5.99% 0.65%
CURRENT ASSETS
Stores, spares and loose 2.14% 2.48% 2.35% 2.37% 2.35% 2.88% 4.36% 3.04%
tools
Stock in trade 1.72% 0.70% 1.08% 1.15% 4.16% 2.89% 2.02% 12.14
%
Trade debts 2.96% 3.44% 2.03% 1.96% 0.47% 0.84% 0.84% 0.61%
Advances 2.37% 2.16% 0.06% 0.94% 0.15% 0.22% 0.27% 0.14%
Trade deposits and short 0.01% 0.01% 0.01% 0.02% 0.03% 0.01%
term prepayments
Interest accrued 0.03% 0.11% 0.35% 0.33% 0.33% 0.14%
Due from GOP on account of 2.51% 26.60
DAP subsidy %
Other receivables 1.25% 1.47% 1.37% 4.87% 1.56% 1.26%
Income and sales tax 0.21% 0.31% 0.64% 0.91%
refundable - net
Investments at fair value 1.81%
through profit or loss
Short term investments 13.41
%
Bank balances 1.69% 1.06% 8.36% 23.12 28.20 26.14 13.08 16.98
% % % % %
TOTAL CURRENT ASSETS 10.89 9.83% 15.38 31.44 37.70 40.90 38.43 60.92
% % % % % % %
TOTAL ASSETS 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
% % % % % % % %
4
Fixed assets of the company has deteriorated year by year which was 86% in
2001 and dropped to 34% in 2008 which tells that the company was not
interested in buying plants and equipment.
Total current assets has also increased year by year which shows that the
company has showed interest in increasing stores, spares and loose tools,
stock in trade, trade debts etc.
Vertical Analysis of Income Statement
2001 2002 2003 2004 2005 2006 2007 2008
Sales - net 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of sales 99.86% 73.53% 77.48% 71.55% 67.99% 68.15% 60.61% 69.33%
GROSS PROFIT 0.14% 26.47% 22.52% 28.45% 32.01% 31.85% 39.39% 30.67%
Other operating income 0.59% 1.21% 0.84% 0.94%
Distribution costs -9.58% -13.21% -11.23% -8.12% -8.82% -9.66% -8.73% -6.62%
Administrative expenses -1.16% -1.88% -1.64% -0.79% -0.80% -0.70% -1.07% -0.77%
-10.01% 12.59% 10.49% 20.47% 22.38% 21.49% 29.59% 23.27%
Finance cost -3.03% -0.74% -1.82% -2.80% -5.15% -10.41%
Other operating expenses -0.39% -0.99% -1.19% -1.65% -2.81% -2.10%
-10.01% 12.59% 7.07% 18.74% 19.37% 17.03% 21.63% 10.76%
Share of profits of associate and 0.50%
joint venture
Compensation from GOP 0.00% 8.81% 3.97% 4.91% 4.76% 4.90% 2.24%
Others -0.07% -0.22% 3.19% 3.75% 5.32% 2.93%
Financial charges -40.96% -8.54%
PROFIT BEFORE TAXATION -61.06% 3.83% 15.88% 22.71% 27.46% 25.54% 31.85% 16.42%
Taxation -0.50% 24.70% 7.36% -6.74% -10.28% -8.92% -11.11% -5.61%
PROFIT AFTER TAXATION -61.56% 28.53% 23.24% 15.97% 17.18% 16.62% 20.75% 10.81%
Cost of goods sold contribution has been decreasing over the year which is a
good sign for the company as it is able to control its cost.
Selling and administrative expenses contribution has remained which is a

positive sign as the firm is able to control its expenses.
4
An important development in 2008 is the amount spent on interest charges
which has increased by around 5% due to high debt.
Horizontal Analysis
The process of dividing each expense item of a given year by the same
expense item in the base year. This allows for the exploration of changes in
the relative importance of expense items over time and the behavior of
expense items as sales change.
Horizontal Analysis of Balance Sheet (Base

Year 2005)
2005 2006 2007 2008
SHARE CAPITAL AND RESERVES
Share capital 100.00 100.00 100.00 100.00

% % % %
Capital reserve 100.00 100.00 100.00 100.00
% % % %
Translation reserve
Accumulated loss 100.00 56.02 57.58 -
% % % 18.70
%
TOTAL SHARE HOLDER EQUITY 100.00 110.48 110.11 135.70
% % % %
NON-CURRENT LIABILITIES
Long term financing 100.00 77.78 55.56 33.33
% % % %
Liabilities against assets subject to 100.00 52.59 0.00% 0.00%
finance lease % %
Long term murabaha 100.00 77.78 55.55 33.33
4
% % % %
Deferred tax liability 100.00 199.23 308.60 317.39
% % % %
Long term loan 100.00 90.91 81.82 72.73
% % % %
Redeemable Capital
TOTAL NON-CURRENT LIABILITIES 100.00 101.95 105.18 95.78
% % % %
CURRENT LIABILITIES
Trade and other payables 100.00 92.05 81.83 215.58
% % % %
Mark - up accrued 100.00 111.24 131.31 629.15
% % % %
Short term borrowings 100.00 202.62 262.68 816.27
% % % %
Current portion of:
- Long term financing 100.00 100.00 100.00 100.00
% % % %
- Liabilities against assets subject to 100.00 64.41 66.03 0.00%
finance lease % % %
- Long term murabaha 100.00 100.00 100.00 100.00
% % % %
- Long term loan 100.00 100.00 100.00 100.00
% % % %
Sales tax payable
TOTAL CURRENT LIABILITIES 100.00 132.85 149.47 413.24
% % % %
TOTAL LIABILITIES 100.00 113.59 121.85 215.29
% % % %
CONTINGENCIES AND COMMITMENTS

100.00 112.61 118.16 190.27
% % % %
FIXED ASSETS
Property, plant and equipment 100.00 102.52 113.01 108.82
% % % %
Intangible asset
Capital work in progress
LONG TERM INVESTMENTS 100.00 192.18 192.18 329.14

% % % %
LONG TERM DEPOSITS AND DEFERRED 100.00 99.30 87.54 87.54
COSTS % % % %
DEFERRED TAX
4
CURRENT ASSETS
Stores, spares and loose tools 100.00 138.16 219.48 246.51
% % % %
Stock in trade 100.00 78.26 57.48 554.93
% % % %
Trade debts 100.00 200.96 211.81 248.05
% % % %
Advances 100.00 161.73 210.28 170.93
% % % %
Trade deposits and short term 100.00 152.99 256.11 147.49
prepayments % % % %
Interest accrued 100.00 106.63 112.84 76.77
% % % %
Due from GOP on account of DAP subsidy
Other receivables 100.00 400.54 135.05 175.77
% % % %
Income and sales tax refundable - net 100.00 159.89 0.00% 0.00%
% %
Investments at fair value through profit
or loss
Short term investments
Bank balances 100.00 104.39 54.83 114.57
% % % %
TOTAL CURRENT ASSETS 100.00 122.19 120.45 307.47
% % % %
TOTAL ASSETS 100.00 112.61 118.16 190.27

% % % %
The total shareholder equity section increased from year 2005 because from
year 2005 the company position was becoming better in all perspective.
The company’s non-current liabilities increased in year 2006 and 2007 but in
2008 it has deteriorated. Deferred taxation also increased by a huge amount
in percentage over the last two to three years.
The trade and other payable section has fallen down in 2006 and 2007 but it
has increased almost doubled in 2008. The company also increased the short
term borrowing amount by a much greater percentage from year 2005 until
now which tells the company really increased most of their liabilities in this
particular section.
So overall the taxation, total liabilities and SHE section increased in much
greater percentage from year 2005 till now which tells how much the
company increased their liabilities.
4
The percentage increase in the fixed assets was high which tells how much
the company has invested to buy more fixed assets to increase their
production and sales.
The company also invested a lot in the long term investments from year 2005
which was also by a greater proportion which tells how much the company is
trying to make money from greater long term projects.
So over the last three years we see how much the FFBL has improved in
perspective of all kinds of noncurrent and especially current assets and how
better they are managing it.
Horizontal Analysis of Income Statement (Base

Year 2003)
2003 2004 2005 2006 2007 2008
Sales - net 100.00 221.86 275.91 284.67 236.97 519.13

% % % % % %
Cost of sales 100.00 204.89 242.13 250.40 185.37 464.54
% % % % % %
GROSS PROFIT 100.00 280.22 392.09 402.55 414.44 706.92
% % % % % %
Other operating income 100.00 248.12 0.00% 0.00% 0.00% 0.00%
% %
Distribution costs 100.00 160.45 216.74 244.78 184.16 306.20
% % % % % %
Administrative expenses 100.00 106.99 135.10 122.32 155.04 244.76
% % % % % %
100.00 432.95 588.59 583.03 668.33 1151.5
% % % % % 5%
Finance cost 100.00 54.13% 165.80 263.15 402.36 1781.6
% % % % 7%
Other operating expenses 100.00 569.28 850.01 1217.2 1721.6 2826.8
% % % 0% 5% 2%
100.00 587.98 755.64 685.56 724.84 789.72
% % % % % %
PROFIT BEFORE TAXATION 100.00 317.33 477.22 457.96 475.39 536.94
% % % % % %
Taxation 100.00 - - - - -
% 202.93 385.23 344.82 357.39 395.59
% % % % %
PROFIT AFTER TAXATION 100.00 152.48 203.95 203.59 211.52 241.46
% % % % % %
4
As we know the FFBL’s financial positions started getting stronger and
stronger from year 2003 as they improved in almost all kinds of sections in
which they can earn profit by increasing their sales and make more money by
buying assets, short term investments and long term investment and huge
amount of loans.
Since the company bought fixed assets that definitely have improved their
production capacity and this was definitely due to much bigger demand and
supply. So the company really improved in much greater proportion in
increasing their sales from year 2002 and continued their progress until now.
Since the increase in sales much in greater proportion as compare to cost of

sales the company’s gross profit also rose year after year.
With all the increase in the sales and cost of sales the distribution cost also
rose with greater proportion as compare to last five years.
Due to all the steps taken by the company to reduce their expenses with the
increase in the sales that company also made a huge amount of operating
profit which better tells the company’s position that how better they are
getting year after year. This progress tells us also one more thing that the
company will really earn a lot of profit with increased sales the future as well.
Other expense also rose with the increase in the sales and as compared to
the country’s condition this rise and fall will continue in upcoming years so
the company should be aware of it and should have primitive measures for it.
Other income also rose which tells how better they are managing in almost
neglecting the increase in other expense means that although the other
expense also rose but the other income is playing a big role in order to
decreases its effects so the overall before tax and after tax profit should be
good.
The before tax profit was also high year after year from year 2004 and still
rising over the last five years.
The taxation amount also rose especially in the year 2008 due to the
increased taxes but the company’s good progress is not affected by it.
The FFBL’s net profit after taxation also rose too much in greater proportion
over all the last five years but raised much in year 2008 as compare to the
last few years due to the increased in demand and supply.
4
Internal Ratio Analysis
2001 2002 2003 2004 2005 2006 2007 2008
LIQUIDITY
Current Ratio 0.14 0.84 1.53 1.53 1.46 1.34 1.17 1.09
Quick Ratio 0.09 0.56 1.19 1.36 1.21 1.15 0.97 0.82
Cash Flow Liquidity Ratio 0.034 -0.003 1.77 1.89 1.76 1.13 0.78 -0.062
Average Collection Period 33 52 37 13 7 4 7 4
Average Inventory Days 31 29 16 10 24 33 34 61
Average Payable Days 91 73 91 91 122 91
TURNOVER/EFFICIE
NCY
Receivable Turnover 11 7 10 28 52 85 52 101
Inventory Turnover 12 13 23 37 15 11 11 6
Payable Turnover 4 5 4 4 3 4
Fixed Asset Turnover 0.37 0.25 0.34 0.79 0.98 0.99 0.74 1.69
Total Asset Turnover 0.33 0.21 0.27 0.52 0.58 0.53 0.42 0.57
SOLVENCY/LEVERA
GE
Debt Ratio 79.76% 68.98% 67.47 68.56 69.16 70.71 77.58
% % % % %
Long Term Debt To 71% 58% 52% 48% 43% 41% 33%
Capitalization Ratio
Debt To Equity Ratio 77% 66% 59% 57% 56% 56% 49%
COVERAGE
Times Interest Earned 3 26 12 8 6 6
PROFITABILITY
Gross Profit Margin 0.14 26.24 22.52 28.44 32.01 31.85 39.39 30.67
Operating Margin -11% 11% 10% 19% 22% 21% 30% 23%
Net Profit Margin -51.54 28.62 23.24 15.97 17.2 16.62 20.74 10.81
Cash Flow Margin 3% -5% 35% 31% 29% 15% 30% -36%
Return On Asset -17.07 7.9 3.85 6.25 8.11 7.19 7.40 5.37
Return On Equity 20.92 32.93 30.06 29.80 30.53
32.83% 15.20% % % % % %
Cash Return On Asset 5% -0.3% 10% 16% 10% 17% 18% -15%
4
MARKET
Earnings Per Share -9.64 3.9 1.31 1.98 2.62 2.62 2.72 3.10
Price to Earning -0.34 2.45 13.44 15.45 14.56 10.81 15.46 4.16
Dividend Payout 51.01 95.42 95.42 91.90 91.94
The current assets of the company registered a nominal decrease during the
year 2008 as compared to year 2007. The major portion of the current assets
is attributed to subsidy due from GOP on account of DAP amounting Rs.
12,440 Million, 44% of total current assets. The main reason of this increase
is that since July 01, 2008, the subsidy by the government was increased
from Rs. 470 per bag to Rs. 2,200 per bag which is payable by the
government. Moreover, the stock in trade has been surged from Rs 587 M to
Rs. 5,676M as the finished goods in the FY 2008 has been increased due to
inclusion of adjustments for writing down the stock to net realizable value.
Current liabilities showed a high increase during FY08 as compared to FY

2007. The major portion of the current liabilities is attributed to the short
term financing depicting an increase from Rs. 5,875 M in 2007 to Rs. 18,257
M in 2008, by availing running finance facilities from different banks and
financial institutions to meet the working capital requirements of company.
The company has made a huge investment for expansion of fertilizer
producing plants. Moreover, the company availed short-term loans from
various banks to fulfill the requirements concerning purchase of raw material
and to pile up the inventory as the capacity to stock finished goods has been
increased.
The business concern maintains current ratio of 1.09, which is adequately

above 1:1 indicating the concerns capability to meet its short-term
obligations. T he current ratio of FFBL has shown an increase year by year as
it was 0.14 times in 2001 and in 2008, it has become 1.09. This is due to
increase in assets as it liabilities has also increased but there is a high
change in assets as compare to liabilities.
The quick ratio has shown an effective increase as it was 0.09 times in 2001
and this increase remained till 2004 which was 1.36 times and afterwards
from 2005 till 2008, there is a drop in quick ratio due to high stock in trade,
this may be because of inflation.
Cash flow liquidity ratio has also increased from year to year but there is a
huge decline in the year 2008 because the cash flow from operations has
4
negative value, this is due to increase in stock in trade also there is an
increase in working capital.
Inventory turnover days have fluctuated through 2001 till 2007 which was
between 25-30 days. It means that there inventory finishes in 25-30 days but
there is a problem in the year 2008 as they have increased their inventory
level so it took more time to wipe out that is why it has increased as compare
to previous years.
Not many changes in average payable days as it was 91 days in 2003 and it
was remained in its range till 2008.
Receivable turnover has improved year by year as it was 11 times in 2001

and in 2008 it became 101 times, this is due to higher sales revenue.
The level of inventory turnover was rising from the year 2001 till 2004 and
afterwards it dropped to 6 times in 2008. The higher the inventory level, the
more time it takes to come to an end.
Payable turnover has not shown a significant change as it was same in all
years.
From 2001 to 2008, there is a slight rise in fixed asset turnover and total
asset turnover but both the ratios are close to 1.
The concern is one of the largest and renowned fertilizer producing

companies and the leverage ratios predict that there is still sufficient cushion
available for the client to avail funded facilities. Company’s long-term debt
was reduced but on the other side short term financing during the year was
increased. The business segment has much appetite to avail more financing
from financial institutions.
There is a slight increase in Total Debt- to- Total Assets ratio in the year 2008
as compared to the previous year. In the year 2008, the percentage of debt
has been increased through which the assets of the company have been
financed as the short term borrowings have been augmented in the FY 08. It
means 77.58% of total assets have been financed through debt financing and
remaining 22.42% financed through equity financing. The liabilities of a
company are higher than of its assets. From 2002-2007 it was around 70%
and in 2008 it has reached to the level of around 78%.
The total Debt to Equity reported a change in the FY 2008 as compared to the
previous year i.e. 49:51, depicting share of financing provided by creditors is
slightly lesser than the financing through equity of Company. In the FY 2008,
the declined Debt to Equity shows that the liabilities has been decreased
4
which were availed from different banks for the plant’s expansion purposes
and now reducing with the years. However, the net worth of the client has
been increased which conclusively improved the ratios in FY 2008.The
company has focused on equity financing as compare to debt financing.
During the years it has dropped its level of debt and become more equity
based as compare to its previous years. In 2008, it was 51% equity based
company which was highest as compare to previous years.
The company’s sales showed a commendable increase from Rs. 12,242

million in 2007 to Rs. 26,821 million in 2008. During 2008, Sona Urea sales
were 686 thousand tones, the highest ever and Sona DAP sales were 307
thousand tones.
The increase in cost incurred during the year is mainly due to the increase in
consumption of raw material. This improvement is mainly due to the increase
in the production capacity of the plants for which the raw material was
excessively used to utilize production facility and to meet the market
demand. Due to this, gross profit margin of the company shrunk from 39.4%
to 30.7% in the FY 2008. However, due to higher sales, the gross profit
increased by 71% from Rs 4,822 M in 2007 to Rs. 8,226 M in 2008.
Financial cost grew because of increase in short term borrowings from

different banks as to procure raw material which can be attributed due to the
rising interest rates and tight credit terms, besides the profit after taxation
increased from Rs. 2,540 M to Rs. 2,899 million in 2008.
Sales for the year 2008 as compared to the year 2007, depicts a growth by
119% due to sale of higher units in the market. Moreover, these sales do not
include subsidies which are provided by the government. However, as the
prices of DAP in the international market have been declined so it is expected
that the prices in the local market will also decline. In this situation, the
government will not provide any subsidy as the prices will be within the
affordability of farmers. The decrease in prices will enhance the demand in
the market and to give further boost to the sales of fertilizer’s manufacturers
and influence the yield by the farmers. The profit margin of the company
fluctuates in a range of 10-20%. Profitability of the company is dependent on
its net income. The higher the income the better the profitability or there is a
inverse relation of sales i.e. the lower the sales the higher the profit margin.
As the sales increased from 2001 to 2008, it also increased the gross profit of
the company and year by year there is a proper growth in the gross profit
margin.
4
External Ratio Analysis
LIQUIDITY RATIO
2001 2002 2003 2004 2005 2006 2007 2008
Current Ratio 0.14 0.84 1.53 1.53 1.46 1.34 1.17 1.09
Sector Current Ratio 1.62 2.94 2.09 2.15 1.99 1.27 2.09 1.91
Quick Ratio 0.09 0.56 1.19 1.36 1.21 1.15 0.97 0.82
Sector Quick Ratio 1.45 2.72 1.90 2.01 1.67 1.08 1.81 1.59
Cash Flow Liquidity Ratio 0.034 -0.003 1.77 1.89 1.76 1.13 0.78 -0.062
Sector Cash Flow Liquidity 1.28 2.67 1.71 1.76 1.50 0.88 1.49 1.09
Ratio
Average Collection Period 33.18 52.14 36.50 13.04 7.02 4.29 7.02 3.61
Sector Average Collection 25.37 26.73 40.54 32.76 17.97 14.21 21.71 4.28
Period
Average Inventory Days 31 29 16 10 24 33 34 61
Sector Average Inventory 38.97 35.89 23.77 17.45 32.73 31.83 53.75 48.08
Days
Average Payable Days 91.25 73 91.25 91.25 121.67 91.25
Sector Average Payable Days 64.65 58.34 84.20 89.51 95.18 67.83 83.75 72.04
4
Current ratio of the fertilizer sector is too much high as compare to individual
current ratio of the company but as we compare it year by year we clearly
see that the company has shown an improvement.
Quick ratio of the sector is almost double of the company. Here the
management of the company has to take some steps to make it close to the
sector average.
The company is also lagging behind in the cash flow liquidity ratio as in 2008
it is disastrously drop down to negative while the sector average is above 1
which shows that the sector has performed better in terms of cash flows.
The sector and the company both have almost fluctuations in their collection
period but from past performance of both we can conclude that they both
have performed better on yearly basis.
But there is a vice versa in the average inventory days, both of them have
gone down year by year.
An average payable day is almost the same in the company and sector both
showed a lot of ups and downs during the period.
EFFICIENCY RATIO
2001 2002 2003 2004 2005 2006 2007 2008
Receivable Turnover 11.00 6.59 9.96 27.83 52.18 84.93 51.55 101.36
Sector Receivable Turnover 16.36 23.00 11.28 17.97 33.15 39.33 23.67 88.76
Inventory Turnover 12.00 13.00 23.00 37.00 15.00 11.00 11.00 6.00
Sector Inventory Turnover 10.18 11.84 16.20 29.72 15.68 13.37 14.44 23.16
Payable Turnover 4.31 5.30 3.82 3.59 2.89 4.30
Sector Payable Turnover 7.36 7.02 9.12 10.73 7.56 9.69 12.51 14.33
Fixed Asset Turnover 0.37 0.25 0.34 0.79 0.98 0.99 0.74 1.69
Average Fixed Asset Turnover 4.25 3.18 2.84 2.41 2.63 2.17 2.05 2.48
Total Asset Turnover 0.33 0.21 0.27 0.52 0.58 0.53 0.42 0.57
Sector Total Asset Turnover 0.63 0.53 0.58 0.63 0.76 0.74 0.54 0.55
4
Receivable turnover of the company is higher than that of the sector as it is
101 times in 2008 while the sector has 89 times in 2008. The company is
better than that of the sector.
There is a problem in inventory turnover of the company as it is too much low

than that of sector, this is due to company’s policy they buy inventory at
higher prices or they stock too much inventory for future. The company
should make some efficient steps in order to better maintain their inventory
as well as come at least to the industry average.
Payable turnover was good of a company in comparison of a sector. The fixed

asset turnover of a sector is relatively higher than of a company while the
total asset turnover was meeting the sector average which tells how better
the company is managing its assets.
SOLVENCY/LEVERAGE RATIO
2001 2002 2003 2004 2005 2006 2007 2008
Debt Ratio 79.76% 68.98% 67.47 68.56 69.16 70.71% 77.58%
% % %
Sector Debt Ratio 27.28 54.00% 53.17% 51.83 49.85 51.48 55.49% 58.25%
% % % %
Long Term Debt To 71.00% 58.00% 52.00 48.00 43.00 41.00% 33.00%
Capitalization Ratio % % %
Sector Long Term Debt To 12.88 30.01% 25.18% 24.76 20.86 16.89 33.47% 36.16%
Capitalization Ratio % % % %
Debt To Equity Ratio 77.00% 66.00% 59.00 57.00 56.00 56.00% 49.00%
% % %
Sector Debt To Equity Ratio 92.07 135.56 109.79 91.43 92.33 79.42 121.75 129.36
% % % % % % % %
4
The company debt ratio is higher which is around 70% while the sector
average is around 51% , this shows that the company is more leveraged than
of the sector while the company is meeting the long term debt to
capitalization with the sector which nearly 34% in 2008. As the sector is more
debt financed than equity financing, the sector has crossed moreover 100%
debt in 2007 and in 2008 it became 129% debt financed while the company
focused on equity financing and it is 49% debt financed in 2008 .The sector is
almost 125% higher of the company debt financing in 2008.
PROFITABILITY
2001 2002 2003 2004 2005 2006 2007 2008
Gross Profit Margin 14.00% 26.24 22.52 28.44 32.01 31.85 39.39 30.67%
% % % % % %
Sector Gross Profit Margin 30.10% 33.64 31.16 30.43 31.85 30.53 33.34 34.90%
% % % % % %
Operating Margin -10.60% 11.38 10.10 19.48 22.38 21.49 29.59 23.27%
% % % % % %
Sector Operating Margin 17.53% 23.85 21.69 22.53 23.84 22.02 25.54 27.78%
% % % % % %
Net Profit Margin -51.54% 28.62 23.24 15.97 17.20 16.62 20.74 10.81%
% % % % % %
Sector Net Profit Margin 2.25% 21.39 24.30 23.39 34.07 24.87 63.86 22.90%
% % % % % %
Cash Flow Margin 2.80% -5.38% 35.42 30.51 29.44 15.37 29.84 -35.63%
% % % % %
Sector Cash Flow Margin 12.19% 15.65 19.96 21.88 19.88 6.86% 14.07 3.42%
% % % % %
Return On Asset -17.07% 7.90% 3.85% 6.25% 8.11% 7.19% 7.40% 5.37%
Sector Return On Asset 9.49% 12.49 12.81 12.91 17.65 15.30 19.17 13.68%
% % % % % %
Return On Equity 32.83 15.20 20.92 32.93 30.06 29.80
% % % % % % 30.53%
Sector Return On Equity 17.71% 24.30 24.10 24.62 33.29 28.44 36.50 29.20%
% % % % % %
Cash Return On Asset 5.41% -0.32% 10.38 16.18 10.44 16.98 18.03 -15.18%
% % % % %
Sector Cash Return On Asset 8.50% 8.36% 10.39 8.88% 8.31% 8.98% 7.30% -2.89%
%
Not a very much change in GPM of company’s and sector, both of them are
head to head. Although OPM is same over the last 4 years. The company has
shown improvement in these 4 years to maintain them equal to that of the
sector. The sector is enjoying higher profit margin than of company over the
years, the company is far behind to the profit margin of the sector which will
be due to lack of sales or low profit. Cash flow margin is also low of the
company and it has become lowered in the year 2008 which is -35.63% as
the sector has dropped in the year 2008 but it is much higher than of the
company. Return on asset of the company is relatively lower than of the
4
sector but return on equity of the company is relatively close to that of the
sector. Cash return on assets is almost higher of the company which means
that the company is covering its assets through its return while sector cash
return is lower, while year 2008 is not good for both.
MARKET RATIO
2001 2002 2003 2004 2005 2006 2007 2008
Earnings Per Share -9.64 3.9 1.31 1.98 2.62 2.62 2.72 3.1
Sector Earning Per Share 11.457 14.8725 18.35 17.355 28.245 24.67 51.14 31.58
5 5
Dividend Payout 51.00% 95.00% 95.00% 91.00% 91.94%
Sector Dividend Payout 82.48% 85.94% 65.29 64.24% 64.04% 61.82% 44.99% 43.37%
%
EPS of the company was not that good as compared to the sector average
which tells that they were not earnings on returned on the initial investment
amount. Earnings per share (EPS) are the earnings returned on the initial
investment amount.
The dividend payout ratio also quiet high over all the years as compared to
the sector average. The dividend payout ratio also raised much from year
2004 and until now it was still rising which tells how much better the
company is giving their dividend over earnings per share. The investors will
be happy from the company so as the management of the company because
year after year they have been earning profits and increasing every year.
DuPont Return on Equity

Three Component Disaggregation
4
Net Sales/Avg Net Inc/Avg Avg Assets/Avg Net Inc/Avg
Inc/Sales Assets Assets Equity Equity
200 -51.55% 0.33 -17.07% -6.11 104.39%
1
200 28.53% 0.21 6.01% 5.46 32.83%
2
200 14.44% 0.50 7.20% 2.11 15.20%
3
200 12.01% 0.96 11.51% 1.82 20.92%
4
200 17.18% 0.61 10.52% 3.13 32.93%
5
200 16.62% 0.56 9.36% 3.21 30.06%
6
200 20.75% 0.43 8.96% 3.33 29.80%
7
200 10.81% 0.71 7.65% 3.99 30.53%
8
The Du Pont identity breaks down Return on Equity into three or five distinct
elements. The return on equity (ROE) ratio is a measure of the rate of return
to stockholders. From the above DuPont analysis it is clear that over the past
few years the return on equity section of the company has declined.
As we see that there is decline in profit margin after year 2002 which has a
direct affect on ROE and it has also dropped ROE while the other factors like
total asset turnover is under 1 which does not affect ROE as much. The
asset/equity ratio is a capital/financial leverage ratio indicating the degree to
which assets are internally financed. A higher ratio indicates more outside
financing. And it has proved above that the assets/equity ratio is more than 1
which shows ROE is around 30% during last year’s which means that the
company is more financially leveraged.
4
Five Component Disaggregation
N.I/EB EBT/EB EBIT/Sal N.I/Sal Sales/Avg N.I/Avg Avg Assets/Avg N.I/Avg
T IT es es Assets Assets Equity Equity
20 1.01 4.82 -10.60% - 0.33 -17.07% 6.11 -104.39%
01 51.55
%
20 7.45 0.34 11.38% 28.53 0.21 6.01% 5.46 32.83%
02 %
20 2.04 0.70 10.10% 14.44 0.50 7.20% 2.11 15.20%
03 %
20 0.64 0.96 19.48% 12.01 0.96 11.51% 1.82 20.92%
04 %
20 0.63 1.42 19.37% 17.18 0.61 10.52% 3.13 32.93%
05 %
20 0.65 1.50 17.03% 16.62 0.56 9.36% 3.21 30.06%
06 %
20 0.65 1.47 21.63% 20.75 0.43 8.96% 3.33 29.80%
07 %
20 0.66 1.53 10.76% 10.81 0.71 7.65% 3.99 30.53%
08 %
Income tax burden has shown a constant trend after 2003. Taxes do not have
a role in declining the profitability of the firm. In FFBL’s case it’s pretty
remained same which shows its tax structure is not affecting its profitability.
There is much increase in financing portion year by year which has a direct
affect on company’s profitability as operation’s section has also increased
respectively but in the year 2008 operations has declined which has an
impact in the profitability.
In the turnover section there are ups and downs as in the year 2004 it was
reached at its best level and afterwards there is a decline each year till 2007.
As we see ROA was 11.51% in 2004 due to high turnover in proportion with
others.
The asset/equity ratio is a capital/financial leverage ratio indicating the

degree to which assets are internally financed. A higher ratio indicates more
outside financing. And it has proved above that the assets/equity ratio is
more than 1 which shows ROE is around 30% during last year’s which means
that the company is more financially leveraged.
4
Insight for Investors & Creditors
The fertilizer industry shows great promise in terms of future growth

and profitability. The strength of this sector can be derived from the
potency of the agricultural sector which is and will be an crucial
contributor to Pakistan’s GDP. Moreover the government support, both to
the agricultural sector and the fertilizer industry is a mainstay for the
coming years as both are vital variables in the social development of the
country, Therefore the fertilizer industry offers a safe and lucrative
opportunity to the banks.
This sector has offered outstanding investor profits and demand is still on
the rise as manufacturers expand aggressively to accommodate this
increase. So it is probably fair to conclude that the industry has sound
fundamentals and significant potential for the future.
The government is likely to keep input costs low for sometimes because local
manufacturers are determined to pass on all such increases to consumers.
This will preserve the industry's growth, expansion and move towards self-
sufficiency.
However, the fertilizer sector has shown stable and consistent results; with
the key players performing extremely well in terms of profitability and being
spurred on by racing demand.
Fertilizer sector can be categorized as the stable sector even in recessionary

conditions due to relatively inelastic demand of urea in the agriculture sector.
Also, these companies are obtaining natural gas at a steep discount from
4
international gas prices making these unaffected from competition from
imports.
Future Projections
The Company is actively looking out for further diversification opportunities

by either going for own projects or participating with other investors in
opportunities like privatization, Liquefied Natural Gas (LNG) Terminal,
Independent Power Projects, Cement Sector etc.
Land of 16 Canals has already been acquired at Defence Housing Authority

(DHA) PHASE II, Islamabad for the construction of Head Office building.
The company is also investing in Fauji Cement Company Limited (FCCL). Fauji
Cement Company Limited (FCCL), an Associated Company of FFBL, is in the
process of expanding its existing operating capacity from 1.17 MTPA to 3.51
MTPA (200% expansion). The Fauji Cement Brand carries a premium in the
market and is perceived as a better quality product. This is why FCCL has
been operating at a higher capacity than the industry over the last 5 years.
Diversification of business will help FFBL sustain profitability and add to

shareholders' value. Since FCCL has issuing fresh equity (at Rs 16 per share
having face value of Rs 10 each) in order to finance its expansion project,
FFBL has invested an amount of Rs. 300 Million, thereby becoming a 2.7%
ordinary shareholder (of revised equity) in FCCL. The plant is scheduled to
start its commercial production by the end of first Quarter 2010.
4
It is expected that the DAP off take to rise by about 30% next year at around
1 million tones. Deteriorated Urea/DAP application ratio and resultantly lower
than expected yields last year, coupled with low prices of DAP would force
the off take to rise.
Pakistan is having more than enough availability of both DAP and ‘lately
imported’ Urea during the first quarter 2009.
At current price levels, there does not seem any need of DAP subsidy.
Timely disbursement of promised wheat support price to the farmers must be

ensured, in order to improve their cash cycle.
However, despite challenges mentioned earlier, the company expects to have

highest production and sales during 2009 and accordingly, good results by
the end of Year 2009.
Recommendation
•Fauji Fertilizer Bin Qasim Ltd. is one of the top Fertilizer production plants of
Pakistan enjoying satisfactory reputation throughout the Country.
•Fauji Fertilizer Bin Qasim Limited is a subsidiary of Fauji Fertilizer Company

Limited (existing client) and the only fertilizer complex in Pakistan producing
DAP fertilizer and granular urea making significant contribution towards
agricultural growth of the country by meeting 40% demand of DAP and 13%
of urea in domestic market.
•Investment in Pak-Marco Phosphore (PMP) by FFBL ensures uninterrupted

supply of phosphoric acid at a cheaper price, which is a major raw material
for manufacturing DAP.
•Generally with Pakistan being a net importer for DAP (70% demand met
through imports), producers used to have a cost edge over importers owing
to fixed cost throughout the year. Being a sole producer of DAP in Pakistan,
FFBL avails scores of benefits as compared to other suppliers.
4
•FFBL enjoys an assured demand for its domestically manufactured product
as well as imports. Strong identity and recognition of brand “Sona” give an
edge to FFBL over its competitors.
•The adverse factors facing the Economy also affected Company’s

performance for the year 2008, but Company achieved the best results in its
history under an extremely tough financial and sales environment during the
year.
•Additionally, the augmented demand gives propensity to fertilizer plants to

capture more and more market share and to get leading position in the
industry.
•The year 2008 under review was yet another vibrant year as our first ever
offshore project in Morocco started production of raw material, being used in
the manufacturing of DAP fertilizer at our plant in Pakistan so the cost of raw
material will further reduce in next year.
•As the Company is enjoying strong financial position depicting steady and
positive net profit at the rate of almost 14.2% in the FY 2008 as compared to
year 2007, the risks associated with the exposure being offered to the
concern can be considered at minimum level.
References
http://www.ffbl.com.pk/
http://www.google.com.pk
http://en.wikipedia.org/
http://www.kse.com.pk/market-data/history_by_date.php?id=1&sid=1.20
http://www.sbp.org.pk/
http://www.brecorder.com/
http://www.investopedia.com
4
Appendix
Balance Sheet
2001 2002 2003 2004 2005 2006 2007 2008
SHARE CAPITAL
AND RESERVES
Share capital 3,341,10 8,099,01 9,099,01 9,341,10 9,341,10 9,341,10 9,341,10 9,341,10
0 4 4 0 0 0 0 0
Capital reserve 228,350 228,350 228,350 228,350 228,350 228,350 228,350 228,350
Translation 572,399
4
reserve
Accumulated - - - - - - - 344,522
loss 6654018 4523151 3319790 2,422,80 1,841,91 1,031,75 1,060,52
8 9 4 3
TOTAL SHARE - 3,804,21 6,007,57 7,146,64 7,727,53 8,537,69 8,508,92 10,486,3
HOLDER EQUITY 3,084,56 3 4 2 1 6 7 71
8
NON-CURRENT
LIABILITIES
Long term 2,710,13 2,293,19 1,876,24 1,459,30 1,042,36 625,416
financing 8 2 8 4 0
Liabilities 19,875 11,290 6,294 3,310
against assets
subject to
finance lease
Long term 251,408 212,730 174,051 135,373 96,694 58,017
murabaha
Deferred tax 19,000 1,322,28 2,634,33 4,080,52 4,196,79
liability 3 9 9 3
Long term loan 5,366,31 9,135,92 8,426,61 7,778,40 7,130,20 6,482,00 5,833,80 5,185,60
4 7 0 9 8 7 6 5
Redeemable 2,073,50 3,621,32
Capital 6 9
TOTAL NON- 7,439,82 12,776,2 11,408,0 10,295,6 10,509,0 10,714,3 11,053,3 10,065,8
CURRENT 0 56 31 21 84 33 89 31
LIABILITIES
CURRENT
LIABILITIES
Trade and other 929,295 2,163,36 2,905,99 2,674,90 2,377,95 6,264,66
payables 6 5 3 2 9
Mark - up 2,494 27,536 94,348 104,952 123,887 593,586
accrued
Short term 137,133 1,176,62 2,236,64 4,531,83 5,875,34 18,257,0
borrowings 5 9 6 1 82
Current portion
of:
- Long term 208,472 416,944 416,944 416,944 416,944 416,944
financing
- Liabilities 7,506 6,467 4,015 2,586 2,651
against assets
subject to
finance lease
- Long term 19,340 38,679 38,679 38,679 38,679 38,679
murabaha
- Long term loan 648,201 648,201 648,201 648,201 648,201 648,201
Sales tax 46,880 11,226 308
payable
TOTAL CURRENT 14,506,1 2,192,86 1,952,44 4,524,69 6,344,83 8,429,32 9,483,65 26,219,4
LIABILITIES 25 9 1 8 1 7 5 69
TOTAL 21,945,9 14,969,1 13,360,4 14,820,3 16,853,9 19,143,6 20,537,0 36,285,3
LIABILITIES 45 25 72 19 15 60 44 00
4
CONTINGENCIES
AND
COMMITMENTS
18,861,3 18,773,3 19,368,0 21,966,9 24,581,4 27,681,3 29,045,9 46,771,6
77 38 46 61 46 56 71 71
FIXED ASSETS
Property, plant 16,701,9 15,801,5 15,178,8 14,539,3 14,563,1 14,930,3 16,458,2 15,847,1
and equipment 86 81 56 49 03 39 65 04
Intangible asset 47,370 23,686
Capital work in 52,228
progress
LONG TERM 358,600 734,275 1,411,15 1,411,15 2,416,77

INVESTMENTS 0 0 0
LONG TERM 34,496 26,936 25,210 18,518 17,395 17,273 15,228 15,228
DEPOSITS AND
DEFERRED
COSTS
DEFERRED TAX 999,351 1,160,68 143,527
8
CURRENT
ASSETS
Stores, spares 403,797 465,013 455,915 520,399 577,082 797,314 1,266,57 1,422,56
and loose tools 0 7
Stock in trade 324,764 130,676 209,511 252,252 1,022,95 800,535 587,946 5,676,73
7 9
Trade debts 558,982 644,967 392,377 431,246 115,081 231,272 243,751 285,454
Advances 447,177 405,924 11,886 207,391 37,816 61,160 79,519 64,637
Trade deposits 2,590 2,340 3,306 5,058 8,467 4,876
and short term
prepayments
Interest accrued 6,304 23,733 85,545 91,218 96,526 65,669
Due from GOP on 729,181 12,440,0
account of DAP 60
subsidy
Other 241,820 322,273 336,266 1,346,86 454,137 591,043
receivables 7
Income and sales 40,471 68,720 157,005 251,034
tax refundable -
net
Investments at 502,387
fair value
through profit or
loss
Short term 3,894,66
investments 2
Bank balances 319,121 199,292 1,618,73 5,078,61 6,931,61 7,235,74 3,800,56 7,941,52
2 3 5 9 9 4
4
TOTAL CURRENT 2,053,84 1,845,87 2,979,60 6,906,96 9,266,67 11,322,5 11,161,3 28,492,5
ASSETS 1 2 6 7 3 94 28 69
TOTAL ASSETS 18,861,3 18,773,3 19,368,0 21,966,9 24,581,4 27,681,3 29,045,9 46,771,6
77 38 46 61 46 56 71 71
Income Statement
2001 2002 2003 2004 2005 2006 2007 2008
Sales - net 6,246,229 3,964,326 5,166,515 11,462,410 14,254,764 14,707,288 12,242,888 26,820,812
Cost of sales (6,237,734) (2,915,053) (4,002,866) (8,201,623) (9,692,236) (10,023,044) (7,420,310) (18,594,752)
GROSS PROFIT 8,495 1,049,273 1,163,649 3,260,787 4,562,528 4,684,244 4,822,578 8,226,060
Other operating income 36,545 48,145 43,401 107,688
Distribution costs (598,097) (523,570) (580,286) (931,066) (1,257,698) (1,420,401) (1,068,629) (1,776,864)
Administrative expenses (72,383) (74,706) (84,730) (90,653) (114,470) (103,643) (131,369) -207,383
(625,440) 499,142 542,034 2,346,756 3,190,360 3,160,200 3,622,580 6,241,813
Finance cost (156,705) (84,817) (259,817) (412,370) (630,513) (2,791,971)
Other operating expenses (19,970) (113,686) (169,746) (243,074) (343,813) (564,516)
Operating Profit (Loss) (625,440) 499,142 365,359 2,148,25 2,760,797 2,504,756 2,648,254 2,885,326
3
Share of profits of - 133,221

associate and joint venture
Compensation from GOP 455,000 455,000 700,000 700,000 600,000 600,000
Others (4,556) (8,850) 454,123 552,158 651,675 786,328
Financial charges (2,558,636) (338,465)
(2,563,192) (347,315) 455,000 455,000 1,154,123 1,252,158 1,251,675 1,519,549
4
PROFIT BEFORE (3,188,632) 151,827 820,359 2,603,253 3,914,920 3,756,914 3,899,929 4,404,875
TAXATION
Taxation (31,231) 979,040 380,504 (772,161) (1,465,811) (1,312,056) (1,359,896) (1,505,254)
PROFIT AFTER TAXATION (3,219,863) 1,130,867 1,200,863 1,831,092 2,449,109 2,444,858 2,540,033 2,899,621
Earnings per share - basic (9.64) 2.07 1.31 1.98 2.62 2.62 2.72 3.10
and diluted (Rupees)
4

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201

FFBL fertilizer complex is state of the art manufacturing facility with

Manufacturing Plants Production (Metric Ton / Day)

Original Actual (Approx)

Urea Granular 1670 1920

Ammonia 1270 1570 (After Revamp)

• Be a leading fertilizer company with a diverse product base

The major companies under management of Fauji Foundation apart from

1. Fauji Fertilizer Company Limited (Parent Company of FFBL holding of

2. Fauji Cement Company Limited

3. Mari Gas Company Limited

4. Fauji Oil Terminal Company Limited

5. Fauji Kabirwala Power Company Limited

The details of current exposure offered to group concerns of FFBL are as

Fauji Fertilizer Company 1,140.00 * 1,500.00 500.00 70.00

Fauji Cement Company Ltd. - 150.00 - -

Fauji Kabirwala Power - 300.00 - -

Total Group Exposure 1,140.00 1,020.00 500.00 70.0

Net Group Exposure 1,140.00 510.00** 500.00 70.0

Cushion Available for

FFBL has witnessed one of the most successful turnarounds in Pakistan’s

The company has successfully completed its project of Ammonia Balancing,

The company has undergone an extensive up gradation program of its plant

Economy is vital for poverty alleviation, as about 66 percent of rural

Fertilizer has a significant contribution in increasing crop yields and

The amount of grain stored by governments— a good measure of the global

DEMAND & SUPPLY

The share of the private sector in fertilizer marketing is 89 percent, compared

2001 2002 2003 2004 2005 2006 2007 2008

LONG TERM 358,600 734,275 1,411,15 1,411,15 2,416,77

2001 2002 2003 2004 2005 2006 2007 2008

Other operating income 36,545 48,145 43,401 107,688

(625,440) 499,142 542,034 2,346,756 3,190,360 3,160,200 3,622,580 6,241,813

Finance cost (156,705) (84,817) (259,817) (412,370) (630,513) (2,791,971)

Other operating expenses (19,970) (113,686) (169,746) (243,074) (343,813) (564,516)

Others (4,556) (8,850) 454,123 552,158 651,675 786,328

Financial charges (2,558,636) (338,465)

(2,563,192) (347,315) 455,000 455,000 1,154,123 1,252,158 1,251,675 1,519,549

Vertical & Horizontal Analysis

Vertical Analysis of Balance Sheet

2001 2002 2003 2004 2005 2006 2007 2008

SHARE CAPITAL AND

2001 2002 2003 2004 2005 2006 2007 2008

LONG TERM INVESTMENTS 1.63% 2.99% 5.10% 4.86% 5.17%

Vertical Analysis of Income Statement

2001 2002 2003 2004 2005 2006 2007 2008

Selling and administrative expenses contribution has remained which is a

Horizontal Analysis of Balance Sheet (Base

2005 2006 2007 2008

SHARE CAPITAL AND RESERVES

Share capital 100.00 100.00 100.00 100.00

CONTINGENCIES AND COMMITMENTS

LONG TERM INVESTMENTS 100.00 192.18 192.18 329.14

TOTAL ASSETS 100.00 112.61 118.16 190.27

Horizontal Analysis of Income Statement (Base

2003 2004 2005 2006 2007 2008

Sales - net 100.00 221.86 275.91 284.67 236.97 519.13

Since the increase in sales much in greater proportion as compare to cost of

Current liabilities showed a high increase during FY08 as compared to FY

The business concern maintains current ratio of 1.09, which is adequately

Receivable turnover has improved year by year as it was 11 times in 2001

The concern is one of the largest and renowned fertilizer producing

The company’s sales showed a commendable increase from Rs. 12,242