This is a project of Ratio Analysis uploaded for MBA 2nd Semester students. This is of Fatima Fertilizer, Pakistan. Hope will help you a lot. If any question feel free to mail me. Tk all.

1. 1
Company Profile
Fatima Group (History)
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.
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.
Textile.
Reliance Weaving Mills Ltd, the flagship company of the group was
established in 1991. Its annual turnover for the year 2012 is approx Rs. 9 billion with
the production facility of 35,520 spindles (two units) and 296 looms (two units). It is
listed on Karachi & Lahore Stock Exchanges of Pakistan.
Fertilizers.
Fatima Fertilizers Ltd is the largest fertilizer complex in Pakistan with
annual production capacity of 847,000 MT. It was put into operation in 1979. Under the
privatization policy of Government of Pakistan, the management of the company was
taken over by Fatima Group on July 14, 2005.
Fatima Fertilizer Company Ltd was incorporated on 24 December 2003 as a
Public Limited Company. Fatima Fertilizer is fully integrated fertilizer complex with
annual production capacity (in MT for the year 2011) of Urea 500,000, CAN 420,000,
NP 244,000, Nitric Acid 500,000 and Amonia 500,000. It is listed on all the Stock
Exchanges of Pakistan.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

2. 2
Sugar. Fatima Sugar Mills Limited was incorporated as a public limited company in
1988. Current production capacity is 9,500 MT per day with net profit of Rs. 786
million for the year ended September 2011.
Molasses.
Reliance Commodities (Pvt) Limited is a private limited company
incorporated in 1996 and deals in export of molasses, sugar, and other commodities.
Company has earned net profit for the year ended June 30, 2011 of Rs. 862 million.
Fatima Group of Companies.
1. Fatima Energy Limited.
2. Fatima Sugar Mills Limited.
3. Fazal Cloth Mills Limited.
4. Reliance Commodities (Private) Limited.
5. Reliance Weaving Mills Limited.
6. Pakistan Mining Company Limited.
7. Air One (Private) Limited.
8. Arif Habib Corporation.
9. Arif Habib Limited.
10. Arif Habib Investments Limited.
11. Arif Habib REIT Management Limited.
12. Arif Habib DMCC.
13. Aisha Steel Mills Limited.
14. Al-Abbas Cement Industries Limited.
15. Pakistan (Private) Equity Management Limited.
16. Rozgar Microfinance Bank Limited.
17. S.K.M. Lanka Holdings (Private) Limited.
18. Sweet Water Pakistan.
19. Dairies (Private) Limited.
20. Thatta Cement Company Limited.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

3. 3
Landmark Events Fatima Fertilizers
Emerging History by Date
Company Incorporation and Gas Allocation.
December 2003 GSA Signing.
September 2004 Ground Breaking Signing of.
July 2005 Contracts Financial Closure.
April 2006 Contracts Achieved.
June - September 2006 Ammonia Furnace 1st Fire.
November 2006 CAN Plant Production Initial.
November 2009 Public Offering Ammonia.
January 2010 Plant Production.
March 2010 Urea Plant Production.
April 2010 NA Plant Production.
April 2011 NP Plant Production.
July 2011 Declaration of Commercial Operations.
May 2012 Conversion and Redemption of Preference Shares.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

4. 4
MANAGEMENT AND
ORGANIZATION
Board of Directors
Mr. Arif Habib
-
Chairman
Mr. Fawad Ahmed Mukhtar
-
Chief Executive Officer
Mr. Fazal Ahmed Sheikh
-
Member
Mr. Nasim Beg
-
Member
Mr. Faisal Ahmed Mukhtar
-
Member
Mr. Rehman Naseem
-
Member
Mr. Abdus Samad
-
Member
Mr. Muhammad Kashif Habib
-
Member
Audit Committee
-
Mr. Nasim Beg
-
Chairman
Mr. Fazal Ahmed Sheikh
-
Member
Mr. Rehman Naseem
-
Member
Mr. Muhammad Kashif Habib
-
Member
Human Resource and Remuneration Committee
Mr. Nasim Beg
-
Chairman
Mr. Abdus Samad
-
Member
Mr. Faisal Ahmed Mukhtar
-
Member
Mr. Rehman Naseem
-
Member
Chief Financial Oficer
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

5. 5
Mr. Arif Hamid Dar
Company Secretary
Mr. Ausaf Ali Qureshi
Key Management
Mr. M. Abad Khan
-
Advisor to CEO
Mr. Qadeer Ahmed Khan
-
Director Special Projects
Mr. Muhammad Zahir
-
Director Marketing
Mr. Haroon Waheed
-
Group Head of Human Resource
Mr. Farrukh Iqbal Qureshi
-
General Manager Manufacturing
Mr. Asad Murad
-
Head of Internal Audit
Mr. Iftikhar Mahmood Baig
-
General Manager Business Development
Mr. Fuad Imran Khan
-
Chief Information Officer
Mr. Javed Akbar
-
Head of Procurement
Brig (R) Muhammad Ali Asif
Sirhindi
-
General Manager Administrative Services
Mr. Muhammad Saleem Zafar
-
General Manager Projects
-
Advocates, 1-A/245, Tufail Road, Lahore Cantt.
-
Chartered Accountants, 23-C, Aziz Avenue,
Canal Bank, Gulberg V, Lahore.
Legal Advisors
M/s. Chima & Ibrahim
Auditors
A. F. Ferguson & Co.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

6. 6
General information
Registered Name:
Fatima Fertilizers (private) limited.
Status:
A private limited company having only two partners.
Factory Location:
Machi Ghot, Rahim Yar Khan, Pakistan
Brand Name of
KISAN Urea, KISAN Nitro phosphate & KISAN Calcium
Products:
Ammonium Nitrate.
Main Products:
Calcium Ammonium Nitrate, Nitro phosphate and Urea
Intermediate products:
Ammonia, Nitric Acid, Nitric Acid Crystals.
Factory & Housing area
172 Acres and 130 Acres.
Plants Started:
Power Plant June 24, 1978
Nitric Acid plant Sep11,
Ammonia plant Sep 27, 1978
1978
CAN plant Nov 26,1978
Urea plant Oct 01,1978
NP pant Jan12, 1979
Capacities:
Ammonia Gas 313500 & CAN Nitric Acid 441600 &
450000 metric tons
Urea 2400 metric tons
Raw Material
Natural Gas 52.5 M. Cubic feet (per Rock Phosphate 710 tons
Requirements:
day)
(per day)
Storage capacity:
N-P(unbagged) 30000 TONS
CAN (unbagged) 27000
Urea (bagged) 12000 tons
TONS
Imported Rock 30000 tons
CAN (bagged) 5000 tons
Bagging Facilities:
4500 tons per day
Foreign Sources of
ADNOC
World Bank
Finance:
Asian Development Bank
OPEC Special Fund
City Corporation International Bank
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

7. 7
ORGANOGRAM
Board of
Directors
Audit Committee
HR & Remuneration
Committee
Chief Executive Officer
Dir Operations
Dir Marketing
Group Head of HR
Cheif Financial Officer
Company Secretary
GM & Business
Development
Head of Internal Audit
Head of Procurement
Head of IT
Dir Special Projects
Dir Technology
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

8. 8
Our Vision
To be a world class manufacturer of fertilizers and ancillary
products, with a focus on safety, quality and contribution to national
economic growth and development. We will care for the environment and
the communities we work in while continuing to create shareholders‘
value.
Mission
To be the preferred fertilizer company for farmers, business
associates and suppliers through quality and service. To provide
employees an exciting, enabling and supportive environment to excel in,
be innovative, entrepreneurial in an ethical and safe working place based
on meritocracy and equal opportunity.
To be a responsible corporate citizen with a concern for the
environment and the communities we deal with.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

9. 9
Our Initiatives
Farmers Support
We know our long-term success is linked to the success of the thousands of farmers
who grow crops. That‘s why we work on-the-ground with farmers and educate them the
proper use of fertilizers to help improve yields.
Mission Statement
Enhance farm productivity & profitability by improving farmer‘s knowledge &
perception on balanced fertilizer use.
Technical Services Team.
Activities for the farming Community.
Seminars.
Farmers ‗meetings.
Farm visits / individual contacts.
Product demonstrations & Field days.
Technical Literature.
Biological Control Service.
Soil Sample Analysis.
Our CSR Initiatives
Mukhtar A. Sheikh Memorial Welfare Hospital A Kidney and
Psychiatric Hospital in Multan
Total project cost of USD 23 million approximately.
Free treatment to all workers of EOBI or ESSI.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

10. 10
Domestic Fertilizer Market 2012
a) The fertilizer market in 2012, exhibited a mixed trend.
b) The Nitrogen market continued to decline for the third consecutive year.
2012 (2011) MT Mil National
Effective
National
Capacity
Production
Demand
6.8 (5.9)
4.6 (5.5)
5.7 (6.7)
1.3 (1.0)
10 (10)
1.6 (1.2)
Nitrogen
Phosphate
c) Urea off take further shrank by 12% in 2012 from 5.9 million tons to 5.2 million tons,
due to lower acreage on BT cotton, higher prices of urea and weakening of cotton
prices in midyear.
d) Urea demand spurred by yearend following late announcement of support increase for
wheat by the government.
e) Phosphate market for DAP increased by 7% over the year primarily due to increased
volumes in the first half of 2012 ~2013 Rabi season.
f) International prices of fertilizer (DAP) stayed around USD 600 mark for most of the
year.
Operational Performance ~ 2012
a) Year 2012 was challenging but successful.
b) Dehumidification Unit was successfully installed and commissioned at CAN Plant,
enabling ~200 T/Day increase in plant throughput in humid summer season.
c) Reliability of NP plant has considerably improved.
d) As a result of major efforts, consistent improvement in HSE Performance was
noticed. The yearend ‗Total Recordable Injury Rate (TRIR) was 0.22.
e) Company has launched an ―Excellence plan‖ to achieve excellence in all areas of its
operation
f) The ‗Integrated Management System‘ (IMS) certification by third party auditors is
planned by end 2013.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

11. 11
g) Implementation of Clean Development Mechanism (CDM) project was completed.
The verification report is submitted to UNFCC and their certification is awaited.
Ammonia Plant Revam for 1800 MT
a) Revamp study for 1800 MT is now complete.
b) Basic Engineering contract for 1800 MT is being awarded. Detail Engineering
contractors are also being engaged in parallel.
c) Revamp shall be executed in 2015.
d) In view of very attractive payback, Waste gas boiler project at Ammonia Plant is
being done ahead of Revamp study and targeted to complete by Mid of 2014. This
project will boost company profits by lowering Fuel gas bill significantly.
e) Numerous projects in hand to improve reliability and efficiency of the fertilizer
complex, which shall be completed phase wise within next 2~3 years.
Future Outlook
The industry will continue to grapple with the issues like:
a) Gas curtailment in the next year also.
b) This is likely to result in expensive imports again.
c) Capacity within the country continuously lying idle.
d) Continued decline in usage of nitrogenous fertilizer, which will eventually reduce
yields raising the specter of food insecurity.
Earliest possible restoration of gas to the local industry will lead to:
a) Reduction in prices.
b) Foreign exchange saving along with reduced burden of subsidy.
c) Enhanced usage of fertilizers to previous levels at least.
d) Yield improvement to counter food insecurity.
The Company with its unique product portfolio and the growing awareness of the Farming
community is well placed to secure a strong foothold. The continuing marketing, channel,
farmer services and logistics thrusts will drive differentiation and bolster our sales in 2013.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

12. 12
Financial Statements
(For the year ending Dec 2012)
Balance Sheet (as at December 31, 2012)
(Rupees in thousands)
2012
EQUITY AND LIABILITIES, CAPITAL AND RESERVES
Ordinary shares of Rs 10 each
21,000,000
Preference shares of Rs 10 each
4,000,000
Issued, subscribed and paid up share capital
21,000,000
Ordinary shares of Rs 10 each
1,790,000
Preference shares of Rs 10 each
Share premium
6,160,354
28,950,354
Accumulated profit
NON CURRENT LIABILITIES
Long term finance
27,023,742
Dividend & markup payable to related parties
2,917,615
Deferred liabilities
4,841,255
34,782,612
CURRENT LIABILITIES
Trade and other payables
4,996,727
Accrued finance cost
499,478
Short term finance - secured
2,690,246
Current portion of long term finance
4,085,379
Provision for taxation
CONTINGENCIES & COMMITEMENTS
12,271,830
2011
21,000,000
4,000,000
20,000,000
4,000,000
790,000
3,264,865
28,054,865
34,457,218
2,217,219
1,807,018
38,481,455
4,650,956
1,890,932
3,032,833
236,207
9,810,928
76,004,796
Long term Investments
Long term deposits
CURRENT ASSETS
Stores and spares
Stock in trade
Trade debtors
Loans, advances, deposits, prepayments and
other receivables
Cash and bank balances
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
65,882,892
33,881
1,662,461
67,579,234
85,190
11,361
67,675,785
66,827,913
1,287,735
68,115,648
5,481
68,121,129
3,230,805
2,507,927
138,480
1,930,679
1,215,014
195,840
1,467,655
984,144
8,329,011
1,045,225
3,839,361
8,226,119
76,004,796
ASSETS
NON CURRENT ASSETS
Property, plant and equipment
Intangible assets
Capital work in progress
76,347,248
76,347,248

13. 13
Profit and Loss Account
for the year ended Dec 31, 2012
2102
2011
29,518,623
14,833,343
Cost of Sales
-12,252,427
-4,740,961
Gross Profit
17,266,196
10,092,382
Distribution Cost
-1,233,944
-337,946
-738,792
-417,225
15,293,460
9,337,211
-5,773,821
-3,063,055
-506,135
-320,398
9,013,504
5,953,758
67,033
133,810
9,080,537
6,087,568
-2,969,418
-1,970,593
6,111,119
2.86
4,116,975
1.90
Sales
Administrative Expenses
Finance Cost
Other Operating Expenses
Other operating Income
Profit Before Tax
Taxation
Profit for the year
Earnings per Share - Basic (in Rupees)
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

14. 14
Pattern of Shareholding
for the year ended Dec 31, 2012
Categories of Shareholders
Shares
Held
Directors, Chief Executive Officer, and their spouse and
minor children
Associated Companies, undertakings and related parties
714,648,874
34.03
960,091,411
45.72
645,421
0.03
Public Sector Companies and Corporation
11,515,338
0.55
Banks, Development Financial Institutions, Non Banking
Financial Institutions, Insurance Companies, Takaful,
Modarabas and Pension Funds
87,932,669
4.19
Mutual Funds
17,334,064
0.83
223,593,997
10.65
787,012
0.04
Foreign Companies
30,330,361
1.44
Others
53,120,853
2.53
Executives
%
General Public
Local
Foreign
Total
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
2,100,000,000 100.00

15. 15
Financial Analysis
Key Performance Indicators
2012
2011
PROFITABILITY
Gross profit
%
58.49
67.77
EBITDA
%
55.35
66.48
Operating profit
%
50.09
60.79
Profit before tax
%
30.76
41.04
Net profit
%
20.7
27.75
Return on equity
%
21.11
14.67
Return on total assets
%
8.04
5.39
Current ratio
Times
0.68
0.84
Quick / Acid test ratio
Times
0.47
0.71
Cash from operations to sales
Times
0.24
0.5
Inventory turnover
Times
6.58
3.64
Fixed assets turnover
Times
0.43
0.22
Total assets turnover
Times
0.39
0.2
52:48:00
57:43:00
Times
2.57
2.99
Rs
2.86
1.9
LIQUIDITY / ACTIVITY
CAPITAL STRUCTURE
Debt : Equity
Interest cover Times
INVESTMENT / MARKET
Basic earnings per share
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

16. 16
Balance Sheet - Vertical Analysis
2012
2011
PKR
PKR
Non-Current Assets
Fixed Capital Expenditure
Deferred Tax Asset
Long Term Investments
Long Term Deposits
Total Non-Current Assets
Current Assets
Stores and Spares
Stock-in-Trade
Trade Debts
Loans, Advances, Deposits and
Prepayments
Cash and Bank Balances
Total Current Assets
Total Assets
Share Capital and Reserves
Issued, Subscribed and Paid-up
Capital
Preference Shares
Share Deposit Money for Ordinary
Shares
Hedging Reserve
Share Premium
Accumulated Profit / (loss)
Total Share Capital and Reserves
Non-Current Liabilities
Long Term Finance
Dividend and Markup Payable to
Related Parties
Deferred Liabilities
Advance against Preference Shares
Bills Payable
Total Non-current Liabilities
Current Liabilities
Trade and Other Payables
Accrued Finance Cost
Short Term Finance Secured
Current Portion of Long Term Loans
Derivative Financial Instruments
Provision for Taxation
Total Current Liabilities
Total Liabilities and Equity
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
%
67,579
85
11
67,676
88.91%
68,116
89.22%
0.11%
0.01%
89.04%
5
68,121
0.01%
89.23%
3,231
2,508
138
4.25%
3.30%
0.18%
1,931
1,215
196
2.53%
1.59%
0.26%
1,468
984
8,329
76,005
1.93%
1.29%
10.96%
100.00%
1,045
3,839
8,226
76,347
1.37%
5.03%
10.77%
100.00%
21,000
-
27.63%
20,000
4,000
26.20%
5.24%
1,790
6,160
28,950
2.36%
8.10%
38.09%
790
3,265
28,055
1.03%
4.28%
36.75%
27,024
35.56%
34,457
45.13%
2,918
4,841
34,783
3.84%
6.37%
2,217
1,807
2.90%
2.37%
45.76%
38,481
50.40%
4,997
499
2,690
4,085
6.57%
0.66%
3.54%
5.37%
4,651
1,891
6.09%
2.48%
3,033
3.97%
236
9,811
76,347
0.31%
12.85%
100.00%
12,272
76,005
16.15%
100.00%
%

17. 17
Balance Sheet - Horizontal Analysis
2012
PKR
12’ vs 11’
Change
2011
PKR
67,579
85
11
67,676
-0.8%
107.3%
-0.7%
68,116
3,231
2,508
138
1,468
984
8,329
67.3%
106.4%
-29.3%
40.4%
-74.4%
1.3%
1,931
1,215
196
1,045
3,839
8,226
Total Assets
76,005
-0.4%
76,347
Share Capital and Reserves
Issued, Subscribed and Paid-up Capital
Preference Shares
Share Deposit Money for Ordinary Shares
Hedging Reserve
Share Premium
Accumulated Profit / (loss)
Total Share Capital and Reserves
21,000
1,790
6,160
28,950
5.0%
-100.0%
20,000
4,000
126.6%
88.7%
3.2%
790
3,265
28,055
Non-Current Liabilities
Long Term Finance
Dividend and Markup Payable to Related Parties
Deferred Liabilities
Advance against Preference Shares
Bills Payable
Total Non-current Liabilities
27,024
2,918
4,841
34,783
-21.6%
31.6%
167.9%
---9.6%
34,457
2,217
1,807
4,997
499
2,690
4,085
7.4%
-73.6%
34.7%
4,651
1,891
12,272
76,005
-100.0%
25.1%
-0.4%
236
9,811
76,347
Non-Current Assets
Fixed Capital Expenditure
Deferred Tax Asset
Long Term Investments
Long Term Deposits
Total Non-Current Assets
Current Assets
Stores and Spares
Stock-in-Trade
Trade Debts
Loans, Advances, Deposits and Prepayments
Cash and Bank Balances
Total Current Assets
Current Liabilities
Trade and Other Payables
Accrued Finance Cost
Short Term Finance Secured
Current Portion of Long Term Loans
Derivative Financial Instruments
Provision for Taxation
Total Current Liabilities
Total Liabilities and Equity
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
5
68,121
38,481
3,033

18. 18
Profit and Loss Account - Vertical Analysis
2012
PKR Million
Sales
2011
%
PKR Million
%
29,519
100%
14,833
100%
Cost of sales
-12,252
-42%
-4,741
-32%
Gross Profit
17,266
58%
10,092
68%
Distribution cost
-1,234
-4%
-338
-2%
-739
-417
15,293
-3%
52%
9,337
-3%
63%
-5,774
-20%
-3,063
-21%
-506
9,013
-2%
-2%
31%
-320
5,954
40%
67
0.20%
134
0.90%
9,081
31%
6,088
41%
-2,969
-10%
-1,971
-13%
6,111
21%
4,117
28%
Administrative expenses
Finance cost
Other operating expenses
Other operating income
Profit Before Tax
Taxation
Profit for the year
Profit and Loss Account - Horizontal Analysis
2012
2011
PKR Million
Change
PKR Million
Sales
29,519
99%
14,833
Cost of sales
-12,252
158%
-4,741
Gross Profit
17,266
71%
10,092
-1,234
265%
-338
-739
77%
-417
Distribution cost
Administrative expenses
15,293
64%
9,337
Other operating expenses
Other operating income
Profit Before Tax
-5,774
88%
-3,063
-506
58%
-320
9,013
Finance cost
51%
5,954
67
50%
134
9,081
49%
6,088
Taxation
-2,969
51%
-1,971
Profit for the year
6,111
48%
4,117
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

19. 19
Profitability Ratios
GP Margin.
Gross Profit / Sales
Calculation
2012
2011
17,266,196 / 29,518,623
10,092,382 / 14,833,343
= 58.49%.
1.
= 68.04%
Interpretation.
The Decrease in GP Margin is less comparing to year 2011
Thousands
indicates that Financial Costs have increased.
30,000
25,000
20,000
Gross Profit
15,000
Sales
10,000
5,000
0
2012
2.
Operating Profit.
Calculation
2011
EBIT (fin cost + EBT) / Sales
2011
14,854,358 / 29,518,623
9,150,623 / 14,833,343
= 50.32%.
Interpretation.
2012
= 61.69%
The Decrease of 10% in Operating profit is due to increase in
Finance Cost and other expenses.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

20. Thousands
20
30,000
25,000
20,000
EBIT
15,000
Sales
10,000
5,000
0
2012
3.
Profit before Tax.
2011
EBT / Sales
Calculation
2011
9,080,537 / 29,518,623
6,087,568 / 14,833,343
= 30.76%.
Interpretation.
2012
= 41.04%
The Decrease in Profit before tax comparing to Sales shows that
Thousands
the financial Cost and Operating Expenses have increased more than year 2011.
30,000
25,000
20,000
Gross Profit
15,000
Sales
10,000
5,000
0
2012
4.
Net Profit Margin.
Calculation
2011
Net profit after tax / Net Sales
2011
6,111,119/ 29,518,623
4,116,975 / 14,833,343
= 20.70%.
Interpretation.
2012
= 27.75%
The Decrease of 10% in Operating profit is due to increase in
Finance Cost.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

21. Thousands
21
30,000
25,000
20,000
Net Profit Margin
15,000
Sales
10,000
5,000
0
2012
5.
2011
Return On Equity.
Net Income / Total Equity
Calculation
2012
6,111,119/ 28,950,354
4,116,975/ 28,054,865
= 21.11%.
Interpretation.
2011
= 14.67%
There is no major increase/ change in the Equity but the Net
Thousands
Income has increased by 7%.
30,000
25,000
20,000
Net Income
15,000
Total Equity
10,000
5,000
0
2012
6.
Return On Total Assets.
Calculation
2011
Net Income / Total Assets
2012
2011
6,111,119 / 76,004,796
4,117,000 / 76,347,000
= 8.04%
= 5.39%
Interpretation.
The Decrease of 10% in Operating profit is due to increase in
Finance Cost and other expenses.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

22. Thousands
22
80,000
70,000
60,000
50,000
Net Income
40,000
Total Assets
30,000
20,000
10,000
0
2012
2011
Liquidity/Activity Ratios
7.
Current Ratios. Current Assets / Current Liabilities
Calculation
2012
8,329,011 / 12,271,830
8,226,119 / 9,810,928
= 0.68 Times.
Interpretation.
2011
= 0.84 Times.
The Liabilities have decreased by 1.6 Times than the last year. A
Thousands
Good sign of company as they have increased their Assets and reduced the liabilities.
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Current Assets
Current Liabilities
2012
8.
Quick Ratios.
2011
Current Assets —Inventory / Current Liabilities
Calculation
2012
2011
[8329011 – (3230805 + 2507927)] /
[8226119 – (1930679 + 1215014)] /
12,271,830
9,810,928
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Shahzad

23. 23
= 0.21 Times
Interpretation.
= 0.52 Times
The Assets have decreased in year 2012, but on other hand the
increase in liabilities indicate that the company has good business in year 2012. The
Thousands
increase in Inventory also shows increase in the production.
15,000
10,000
Current Assets
5,000
Inventory
Current Liabilities
0
2012
9.
Cash Ratio.
2011
Cash / Current Liabilities
Calculation
2011
984,144 / 12,271,830
3,839,361/ 9,810,928
= 0.08 Times
Interpretation.
2012
= 0.39 Times
The Decrease in Cash reflects that more money has been
Thousands
invested in the business and the production has increased.
14,000
12,000
10,000
8,000
Cash
6,000
Current Liabilities
4,000
2,000
0
2012
10.
2011
Inventory Turn Over. CGS / Inventory
Calculation
2012
2011
12,252,427 / 5,738,732
4,740,961/ 3,145,693
= 2.14 Times
= 1.51 Times
Interpretation. The Increase in CGS indicates that the production is more by
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

24. 24
Thousands
0.63 times than 2011. The Business has expanded.
14,000
12,000
10,000
8,000
CGS
6,000
Inventory
4,000
2,000
0
2012
11.
2011
Fixed Asset Turn Over.
Calculation
Sales/Fixed Assets
2011
29,518,623 / 67,675,785
14,833,343 / 68,121,129
= 0.44 Times
Interpretation.
2012
= 0.22 Times
There is very marginal change in the Fixed Assets but the Sales
Thousands
has doubled in year 2012.
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Sales
Fixed Assets
2012
2011
12.
Total Asset Turn Over.
Calculation
Sales/Total Assets
2011
29,518,623 / 76,004,796
14,833,343 / 76,347,248
= 0.39 Times
Interpretation.
2012
= 0.19 Times
Sales have doubled and there is marginal increase in the Total
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

25. 25
Thousands
Assets.
80,000
70,000
60,000
50,000
Sales
40,000
Total Assets
30,000
20,000
10,000
0
2012
13.
A/R Turnover.
2011
Sales/ Acct Receivables
Calculation
2012
Interpretation.
2011
29,518,623 / 138,480,000
14,833,343 / 195,840,000
= 0.21 Times
= 0.08 Times
Sales have increased and on the other hand there is substantial
change of 0.13 times in the A/R. This shows that Credit Sales have decreased and Cash
Thousands
Sales have increased.
200,000
150,000
Sales
100,000
A/R
50,000
0
2012
2011
Capital Structure ratios
14.
Debt To Total Assets.
Calculation
Total Debt / Total Assets
2012
2011
47,054,442 / 76,004,796
= 61.91%.
48,292,383 / 76,347,248
= 63.25 %.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

26. 26
Interpretation.
The Debts have decreased by 1.34% which shows that company
Thousands
is focusing on decreasing the debts.
80,000
70,000
60,000
50,000
40,000
Total Debt
30,000
Total Assets
20,000
10,000
0
2012
15.
2011
Interest Coverage Ratio.
Calculation
EBIT / Interest Liabilities
2012
14,854,358 / 5,773,821
= 2.57 Times
EBT + Fin Cost =
EBIT
Interpretation.
2011
9,150,623 / 3,063,055
= 2.99 Times
The Interest Liabilities and EBIT have increased due to
substantial Increase in the production and overall business.
Thousands
14,854
15,000
9,151
10,000
5,774
5,000
3,063
0
2012
2011
EBIT
16.
Interest Liabilities
Debt To Equity. Debt : Equity
Calculation
2012
47,054,442 / 28,950,354
2011
48,292,383 / 28,054,865
= 162.53 %
= 172.14%
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

27. 27
Interpretation.
Due to the focused orientation of the company the Debts have
Thousands
reduced by 10.39%. This shows a Positive trend in the company‘s future.
60,000
50,000
40,000
30,000
20,000
10,000
0
2012
2011
Debt
Equity
Investment/ Market Ratio
17.
Basic Earnings Per Share Ratio.
Calculation
Net Income / No Of Shares
2011
6,111,119 / 2,100,000
4,116,975 / 2,100,000
= Rs 2.91
Interpretation.
2012
= Rs 1.96
The Profit on Share has increased by Rs 0.95 per Share. This
shows a Positive trend in the Company and the production and sales comparing to last
year have increased manifolds.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

28. Thousands
28
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2012
No of Shares
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
2011
Net Income

29. 29
SWOT Analysis
1.
STRENGTHS
a)
Capital Intensive nature of the sector.
b)
The players operating in this sector are financially strong.
c)
All the fertilizer plants are producing at more than 100 percent installed capacity
of utilization.
d)
Govt supports in the form of subsidy.
e)
Cheap labor.
f)
Heavy demand.
g)
Well established distribution sector.
h)
An agro based economy.
i)
Broad range of main and mid products.
j)
Central location of plant.
k)
Broad production range.
l)
Monopoly in Calcium Ammonium Nitrate & Nitro Phosphate production Support
from Ministry.
m)
2.
Experience in production and marketing of product.
WEAKNESSES
a)
Low capacity as compared to demand (demand supply gap).
b)
Due to existence of black market and heavy demand farmers had to pay above
the stated price.
c)
Technological backwardness and Lack of local resources.
d)
Urea made by Fatima is of more powdered form as compared to the urea made by
FFC and other urea producers.
e)
Obsolete plant with high operating cost.
f)
Govt. compellations especially for the pricing policy.
g)
Monetary sensitiveness to foreign exchange exposure.
h)
Dependence on imported feed stock suppliers and special repair/ maintenance
facilities.
i)
Environmental problem & proximity to urban area.
j)
Limitation
in
achieving
NITROPHOSPHATE
specifications.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
product
quality,
design

30. 30
k)
Too much centralization effects timely decision making.
l)
Unsatisfactory Product quality of urea.
m)
No proper sales promotion.
n)
Placement and number of warehouses.
o)
Lack of long term planning, decisions are made keeping in view the short-term
benefits.
p)
q)
3.
Lack of financial budgets for implementation at decisions.
Too much cost consciousness that affects the long run impact and profits.
OPPORTUNITIES
a)
As the demand is high compared to supply, fertilizer sector has an opportunity to
expand capacity to fulfill the local demand.
b)
Export.
c)
Introduction of BT crops.
d)
Improvement in product quality.
e)
Expansion of plants to meet the demand more efficiently.
f)
Proper sales promotion.
g)
Proper placement or warehouses.
h)
Delegation of authority so that decisions can be made at the spot without any
delay.
i)
Long term profits or benefits should be preferred over short-term profits. Quality
should be improved gradually with the results and trends in market.
4.
THREATS
a)
Scarce water resources.
b)
Load-shedding of gas.
c)
Hike in fuel prices.
d)
Taxes.
e)
Removal of subsidy.
f)
Rising global prices of fertilizer products.
g)
Government intervenes to stabilize the prices.
h)
Low product quality of competitive product (urea) is a major threat
i)
Major competitors are FFC, ENGRO CHEMICALS and DHC.
j)
Market share threat for Urea.
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Shahzad

31. 31
NFC
ENGRO
25-26%
a)
FFC
48%
24-25%
In market the 50-kg bag of Fatima is sold at rs.330 while engro and dhc at
rs.360sell that bag but even they are more effective.
b)
Fatima Fertilizer is giving almost negligible incentives to the customers while ffc
and engro are running efficient promotional schemes to attract the customer.
c)
Fatima Fertilizer is also lagging behind in providing the product at the right time
and place customer has to wait 3 to 4 days to load be second truck while at the
warehouses of ffc and engro-chemical customer immediately gets the product- so
the placement of warehouses is a threat. Neml has 6 warehouses in Multan region
while fec has 16 warehouses in that region.
d)
The packaging of ffc is also better than Fatima.
e)
Imported fertilizers are also a threat to local industry selling at rs.310 in the
market for a 50kg bag.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

32. 32
TREND ANALYSIS
Political Trend.
a)
Political trends are always in favor of this industry. The Government has provided
incentives under Fertilizer Policy, 2001, to encourage fertilizer production in the
country.
b)
To fulfill local demand of fertilizers at affordable prices, the Government is providing
subsidy on production and import of fertilizers.
c)
Investors will be allowed to relocate second hand plant, equipment and machinery,
with the same concession/ exemption as applicable to new plants.
d)
The Government is providing concessionary feed stock gas to the fertilizer plants for
production of urea.
e)
Import of Rock Phosphate and Phosphorous by manufacturers of fertilizer is free
of customs duty.
f)
Tax relaxation has also been offered by the Government.
g)
Export benefit to suppliers of capital goods for new/ modernization projects
of fertilizer.
h)
Gas price has been fixed for 10 years for new investments.
i)
Gas for balancing, modernization, replacement expansion for existing plants has been
filed for 7 years.
Economical Trend:
a)
One of the main sectors of economy is Agricultural as it contributes 22% to the GDP
and without Fertilizer industry this sector would not able to work. Due to that
Government always gives support to the fertilizer industry.
b)
Import by manufacturers of Rock Phosphate and Phosphorous of fertilizer Free
of customs duty.
c)
Tax relaxation has been offered in order to attract new entrants
d)
Export benefit to suppliers of capital goods for new/modernization projects
of fertilizer. To reduce the dependence on imported fertilizers by enhancing the local
production capacity.
e)
The Government is providing subsidy on production and import of fertilizers. A
massive subsidy of Rs. 27 billion in the supply of urea and DAP in 2009.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

33. 33
f)
Ban on export of fertilizer is also imposed so that economic stability would be gain.
Social Trends:
a)
Although the adverse effects of this industry is very high because of the improper
handling of the waste. Due to this, many diseases like asthma, kidney diseases,
hepatitis etc... are caused. Still, the usage of the fertilizers cannot be stopped because
it gives farmers so much ease in terms of saving time and actually, using it. Making
bio fertilizer has now become Old usage and farmers don‘t prefer to use it against
artificial fertilizer.
Technological Trend:
a)
To meet the demand of fertilizers in the country through indigenous production, selfreliance in design engineering and execution of fertilizer projects is very crucial. This
requires a strong indigenous technological base in planning, development of
b)
This requires a strong indigenous technological base in planning, development
of process know-how, detailed engineering and expertise in project management and
execution of projects.
c)
The fertilizer plant operators have now fully absorbed and assimilated the
latest technological developments, incorporating environmental friendly process
technologies, and are in a position to operate and maintain the plants at their optimum
levels and on international standards in terms of capacity utilization, specific energy
consumption & pollution standards. The average performance of gas-based plants in
the country today is amongst the best in the world.
d)
The fertilizer industry is also carrying out de-bottlenecking and energy saving scheme
in their existing plants and to enhance the capacity and reduce the specific energy
consumption per ton of product. Companies are also planning to convert to Liquefied
Natural Gas (LNG).
Legal Trend:
a)
Strengthening the Fertilizer Review Committee.
b)
Rationalization of quotas to private marketing organizations.
c)
Setting up of transport sub-agencies.
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Shahzad

34. 34
d)
Replacement of volumetric bagging machines at Port Karachi by weight baggers, to
ensure accuracy.
e)
Drafting and enactment of fertilizer legislation to provide a legal framework within
which marketing agencies and dealers should operate in a privatized system.
f)
Pursuing low-cost storage options in high consumption areas, and purchasing offseason at a discount.
g)
Postponing widespread custom blending until inland bulk handling is practiced.
Environmental Trend:
a)
Chemical fertilizer in the form of salts, when added to soils gets converted into ionic
forms after dissolving in the soil solution. They are relatively safer than pesticides
which exhibit toxic properties on living systems. However, all the quantities
of fertilizers applied to the soil are not fully utilized by plants. About 50 per cent
of fertilizers applied to crops are left behind as residues. Though, inorganic fertilizers
are not directly toxic to man and other life forms, they have been found to upset the
existing ecological balance. The nutrients escape from the fields and are found in
excessive quantities in underground water, rivers, lakes and coastal waters.
b)
Fertilizers can become a source of pollution when they are used in excess. Among the
three macro (N-P-K) fertilizers being used at present, only potassium fertilizer is not
yet considered a source of environmental pollution. The other substances like nitrogen
(urea or calcium ammonium nitrate) and phosphorus (DAP or MAP) fertilizers, if
used unreasonably, can cause environmental pollution and mainly through increase
of nitrate in agricultural products, drinking water, entropication of water sources and
increase of cadmium.
c)
Another hazard associated with excessive use of nitrogenous fertilizers is the gaseous
loss of nitrogen, into the atmosphere. High doses of carbon dioxide and ammonia that
escape into the atmosphere both from fertilizer manufacturing plant sand soils affect
human health. Further the oxides of nitrogen have been reported to adversely affect
the ozone layer.
d)
The oxides of nitrogen cause respiratory diseases like asthma, lung cancer and
bronchitis.
e)
Cadmium accumulation in agricultural products is also an important problem
of pollution. Cadmium exposures result in kidney damage, bone deformities, and
cardiovascular problems.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

35. 35
Demographical Trend:
a)
At present, eight children are born per minute in Pakistan, as Pakistan is developing
country, with limited ability to feed their growing populations or import food.
Application of chemical fertilizer to soil systems for increasing production and
maintaining soil fertility has been essential to increasing food production and will be
essential in future.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

36. 36
Recommendations
1.
Strict quality control and monitoring should be there to prevent import of substandard products and to curb adulteration and other malpractices prevailing in this
sector.
2.
The problem of logistics should be looked into. Transportation through railway (being
cheaper) especially during peak seasons should be made available.
3.
There is a need to educate the farmers on balanced fertilizer use so as to neutralize the
adverse impacts of constant use of nitrogenous fertilizers.
4.
Fatima fertilizers are giving almost negligible incentives to the customers while FFC
and ENGRO are running efficient promotional schemes to attract the customer.
Fatima Fertilizers should give more incentives to the customers.
5.
Fatima fertilizers should develop more ware houses to early provision of fertilizers to
the customers.
6.
The packaging should be improved to compete with the other companies in the field.
7.
The staff should be decreased to avoid unnecessary extra expenditures on Pay and
allowances.
8.
Short and bare minimum documentation should be made to provide easiness and
comfort to the customers.
9.
Career development programs of the employees should be increased to give
motivation and keep the interest of the employees.
10.
Some employees are working in the same department or section since they are
appointed. Employees should be transferred within departments so that the job variety
develops their interests, update their information and versatility in their performance.
11.
There should be delegation of authority up to certain extent that enables managers to
take timely decisions at the spot with confidence and get more involved and
responsible for the job and in turn their efficiency will increase.
12.
Due to high rate of unemployment in the country workers join those jobs which are
against their interest and not according to their calibers. So proper analysis should be
done and explores that employee which can do better what they are currently doing in
the organization.
13.
There is no strict means to force employees to take safety measures and show safety
rules. Management should take necessary action in implementing the safety rules in
the organization.
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

37. 37
Shares Information
Fatima Fertilizer Company Limited
PATTERN OF SHAREHOLDING AS AT DECEMBER 31, 2012
Category-Wise
Categories of Share holders
Shares Held
%
Directors, Chief Executive Officer, Spouses and minor children
714,648,874
34.03
Associated Companies, undertakings and related parties
960,091,411
45.72
645,421
0.03
Public Sector Companies and Corporation
11,515,338
0.55
Banks, Development Financial Institutions, Non Banking
87,932,669
4.19
17,334,064
0.83
Executives
Financial Institutions, Insurance Companies, Takaful, Modarabas
and Pension Funds
Mutual Funds
General Public
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad

38. 38
a. Local
223,593,997
10.65
787,012
0.04
Foreign Companies
30,330,361
1.44
Others
53,120,853
2.53
b. Foreign
Total Ordinary Shares
Report Compiled by Maj Raja Manzar & Maj Rana
Shahzad
2,100,000,000 100.00