Agritech Annual Report Web - 121 Viral · the production will improve the liquidity position. The...

Financial Statements

Agritech Limited (formerly Pak American Fertilizers Limited)28

FARUQ ALI & CO. CHARTERED ACCOUNTANTS

222 -A, Kar ach i Mem on

Cooperative Housing Society,

Ju st ic e In am ul la h Ro ad ,

Near Hill Park, Karachi.74800.

Em ai l: fa ac @c yb er .n et .p k

Telephone

Fax

: (021) 34301966

: (021) 34301967

: (021) 34301968

: (021) 34301969

: (021) 34301965

Auditors' Report to the Members

Annual Report 2010 29

Dated: October 09, 2010Place: Lahore

Engagement Partner: S. Naseem uz Zaman

CHARTERED ACCOUNTANTS

Continuation Sheet

Balance Sheet as at June 30, 2010

EQUITY AND LIABILITIES

Authorized share capital

Share capital and reserves

Issue, subscribed and paid-up capital

Reserves

Accumulated profit

Surplus on revaluation of property, plant and equipment

Loan from associates - Unsecured, Subordinated

Non-current liabilities

Redeemable capital - Secured

Long term finances - Secured

Liabilities against assets subject to finance lease - Secured

Long term payables - Unsecured

Deferred taxation

Current liabilities

Current maturity of non current liabilities

Short term borrowings

Trade and other payables

Mark-up accrued on borrowings

Contingencies and commitments

Note 2010 2009

Rupees Rupees

5 12,000,000,000

12,000,000,000

6 3,924,300,000

3,924,300,000

7 3,086,504,807

299,221,269

3,788,703,321

2,906,671,536

10,799,508,128

7,130,192,805

8 4,263,591,515

--

9 340,000,000

340,000,000

10 8,186,009,933

10,137,858,233

11 2,643,985,482

1,793,898,302

12 171,786,793

231,185,645

13 31,135,199

31,135,199

14 3,670,264,056

2,055,511,430

14,703,181,463

14,249,588,809

15 2,811,717,740

323,422,412

16 4,787,718,650

2,103,084,646

17 3,245,423,196

1,149,996,223

18 1,266,233,127 388,481,059

12,111,092,713

3,964,984,340

19 --

--

42,217,373,819

25,684,765,954

The annexed notes form an integral part of these financial statements.

Lahore CHIEF EXECUTIVE

ASSETS

Non-current assets

Property, plant and equipment

Intangible assets

Long term investments

Long term advances

Long term deposits - Unsecured, considered good

Current assets

Stores, spares and loose tools

Stock in trade

Trade receivables - Unsecured, considered good

Advances, deposits, prepayments and other receivables

Due from related parties - Unsecured, considered good

Current taxation

Cash and bank balances

Note 2010 2009

Rupees Rupees

20 31,777,589,323

16,617,563,469

21 2,567,310,828

2,567,310,828

22 4,463,069,207

1,675,785,669

23 30,881,917

29,389,657

24 15,048,517

14,344,817

38,853,899,792

20,904,394,440

25 1,216,265,750

719,482,502

26 23,572,749

1,663,917,185

229,460,227

759,205,021

27 1,140,550,298

382,318,055

28 525,865,626

798,147,896

29 151,517,334

179,708,719

30 76,242,043 277,592,136 3,363,474,027

4,780,371,514

42,217,373,819

25,684,765,954

DIRECTOR

Profit and Loss Accountfor the year ended June 30, 2010

Lahore CHIEF EXECUTIVE DIRECTOR

Sales - Net

Cost of sales

Gross profit

Selling and distribution expenses

Administrative and general expenses

Operating profit

Finance cost

Net other income/(expenses)

Profit before taxation

Taxation income/(expense)

Profit after taxation

Earnings per share - Basic and diluted


31 11,498,673,160

12,496,644,644

32 (8,451,538,320)

(8,290,723,238)

3,047,134,840

4,205,921,406

33 (324,409,438)

(242,731,083)

34 (209,452,417)

(170,988,063)

2,513,272,985

3,792,202,260

35 (2,427,782,709)

(2,679,960,045)

36 172,808,272

(6,701,661)

258,298,548

1,105,540,554

37 594,950,016

(220,491,869)

853,248,564

885,048,685

38 2.17

2.26

Note 2010 2009

Rupees Rupees

for the year ended June 30, 2010


2010 2009

Rupees Rupees

Statement of Other Comprehensive Income

853,248,564

885,048,685

2,787,283,538

290,221,269

--

(100,014,269)

6,560,395,944

--

(2,268,021,208)

--

4,292,374,736

--

44,281,879

--

(15,498,658)

--

28,783,221

--

7,961,690,059

1,075,255,685

(4,292,374,736)

--

3,669,315,323

1,075,255,685

Profit for the year

Other comprehensive income

Net change in fair value of available-for-sale financial assets

Net loss on cash flow hedges

Revaluation of property, plant and equipment

Related deferred tax

Incremental depreciation transferred from surplus on revalution of property, plant and equipment


Component of comprehensive income not reflected in equity - Net of tax

Total comprehensive income for the year


Cash Flow Statement for the year ended June 30, 2010


Note 2010 2009

Rupees Rupees

CASH FLOW FROM OPERATING ACTIVITIES

Cash generated from operations

Interest/markup paid

Interest received

Taxes paid

Net cash flow from / (used in) operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure

Proceeds from disposal of property, plant and equipment

Loan to related party

Investment in subsidiary

Proceeds from disposal of short term investments

Net cash used in investing activates

CASH FLOW FROM FINANCING ACTIVITIES

Long term finances obtained

Loan from associates

Proceeds from issue of term finance certificates

Redemption of term finance certificates

Repayment of liabilities against assets subject to finance lease

Transaction costs on issue of term finance certificates

Net increase in short term borrowings

Dividend paid

Net cash from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents as at beginning of the year

Cash and cash equivalents as at end of the year


39

2,528,531,259

(2,618,301,441)

10,527,878

(140,003,483)

(219,245,787)

(3,819,971,548)

257,796,432

(798,147,896)

(1,385,564,400)

738,222,249

(5,007,665,163)

1,856,398,302

340,000,000

2,031,962,744

--

(11,589,020)

--

511,413,878

(588,645,000)

4,139,540,904

(1,087,370,046)

1,364,962,182

40

277,592,136

6,393,807,221

(1,520,228,191)

1,060,255

(30,127,181)

4,844,512,104

(9,030,975,247)

38,608,995

(10,630,855)

--

--

(9,002,997,107)

1,356,337,180

--

--

(7,054,750)

(62,481,524)

(14,300,000)

2,684,634,004

--

3,957,134,910

(201,350,093)

277,592,136

76,242,043

Stat

emen

t o

f C

han

ges

in E

qu

ity

for

the

yea

r en

ded

Ju

ne

30

, 20

10

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CH

IEF

EX

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at Ju

ly 0

1, 2008

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taxa

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fin

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eq

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share

As

at Ju

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Pro

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Net ch

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fin

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ssets

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nsf

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from

surp

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luatio

n

o

f pro

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ment -

Net of ta

x

Tota

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com

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the y

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Tra

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s w

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, re

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eq

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The a

nnexe

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ote

s fo

rm a

n in

tegra

l part

of th

ese

fin

anci

al s

tate

ments

.

DIR

EC

TO

R

Reserv

es

To

tal

eq

uit

y

Ru

pees

6,6

43,5

82,1

20

885,0

48,6

85

290,2

21,2

69

(100,0

14,2

69)

1,0

75,2

55,6

85

(588,6

45,0

00)

7,1

30,1

92,8

05

853,2

48,5

64

2,7

87,2

83,5

38

28,7

83,2

21

3,6

69,3

15,3

23

--

10,7

99,5

08,1

28

Un

ap

pro

pri

ate

d

pro

fit

Ru

pees

2,6

10,2

67,8

51

885,0

48,6

85

-- --

885,0

48,6

85

(588,6

45,0

00)

2,9

06,6

71,5

36

853,2

48,5

64

--

28,7

83,2

21

882,0

31,7

85

--

3,7

88,7

03,3

21

To

tal

reserv

es

Ru

pees

109,0

14,2

69

--

290,2

21,2

69

(100,0

14,2

69)

190,2

07,0

00

--

299,2

21,2

69

--

2,7

87,2

83,5

38

--

2,7

87,2

83,5

38

--

3,0

86,5

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07

Availab

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for

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fin

an

cia

l assets

Ru

pees

-- --

290,2

21,2

69

290,2

21,2

69

--

290,2

21,2

69

--

2,7

87,2

83,5

38

--

2,7

87,2

83,5

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--

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77,5

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flo

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ges

Ru

pees

100,0

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-- --

(100,0

14,2

69)

(100,0

14,2

69)

-- -- -- -- -- -- -- --

Reven

ue

reserv

e

Ru

pees

9,0

00,0

00

--

--

--

-- --

9,0

00,0

00

-- -- -- -- --

9,0

00,0

00

Issu

ed

,

su

bscri

bed

an

d

paid

-up

cap

ital

Ru

pees

3,9

24,3

00,0

00

-- -- -- -- --

3,9

24,3

00,0

00

-- -- -- -- --

3,9

24,3

00,0

00

Notes to and forming part of Financial Statements for the year ended June 30, 2010

1 REPORTING ENTITY

1.1 Listing of Company's Shares on Karachi Stock Exchange (Guarantee) Limited

2 BASIS OF PREPARATION

2.1 Statement of compliance

2.2

2.3 Basis of measurement

These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirements of Companies

Ordinance, 1984. Approved accounting standards comprise of such International Financial Reporting Standards ("IFRSs") issued by the International Accounting

Standards Board as notified under the provisions of the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984.

In case requirements differ, the provisions of or directives under the Companies Ordinance, 1984 prevail.

Agritech Limited (formerly Pak American Fertilizers Limited) was incorporated on June 11, 1985 as an unlisted Public Limited Company under the Companies Ordinance,

1984 and was a wholly owned subsidiary of National Fertilizer Corporation of Pakistan (Private) Limited ('NFC'), a Government owned Corporation, until July 15, 2006.

Subsequently, 100% shares of the Company were acquired by Azgard Nine Limited ('ANL') as a part of privatization process of the Government of Pakistan as

stipulated in the Share Purchase Agreement dated July 15, 2006. The registered office of the Company is situated Ismail Aiwan-e-Science, Off Sharah -e-Roomi,

Lahore. The principal business of the Company is the production and sale of urea fertilizer.

Financial Liabilities Re-profiling

These financial statements have been prepared under the historical cost convention except for certain financial instruments measured at fair value and/or

amortized cost, employees retirement benefits under defined benefit plan at present value and certain items of property, plant and equipment measured at

revalued amounts. In these financial statements, except for the amounts reflected in the cash flow statement, all transactions have been accounted for on accrual

basis.

The worldwide and nationwide recessionary trends and other economic conditions have perpetuated general credit and liquidity crisis. These circumstances are

being faced by all the industrial and business sectors in Pakistan. The Company, during the year, also faced operational issues due to extended gas load

shedding in winter and gas curtailment by Government of Pakistan for shifting the gas towards power sector to reduce electricity load shedding. Additionally, the

Company has faced massive devaluation of the Pak Rupee over the past couple of years which increased urea project cost manifold, with high interest/mark-up

rates resulting in substantially high finance costs on project finance and acquisition loans. This has perpetuated temporary, liquidity issues, as referred to in note

44.2 to the financial statements.

The management has taken up this matter with the providers of debt finance for re-profiling of the existing liabilities. Majority of the lenders have given their

consent and the company is in final stage of execution of agreements. The management of the Company is confident that the above measures coupled with the

Company's strong capital base of Rs.15.4 billion (including surplus on revaluation of property, plant and equipment and subordinated loan), continuing profitable

trends (with accumulated profits of Rs.3.8 billion as at the reporting date) and expected improvement in operational profitability and supply of gas and accordingly

the production will improve the liquidity position. The management of the Company does not envisage any difficulty in generating and arranging necessary

finances and in meeting its financial obligations when due, and for continuing profitable operations of the Company.

Appropriateness of Going Concern Assumption - Continuing Operations' As already mentioned above, the management is confident and does not envisage any

difficulty in generating and arranging necessary finances for continuing operations of the company and in meeting its financial obligations. The fertilizer sector is

likely to remain robust in coming years. The trend indicates that the sales will continue to grow with improved operational profitability inspite of high finance costs

and other factors.

During the year ANL (the holding company) has divested its 20.13% shares comprising 79,006,816 Ordinary shares of Rs.10 each through private placement and

public offering. Accordingly company's shares have been listed on Karachi Stock Exchange (KSE) w.e.f. April 12, 2010 vide KSE Notification No. KSE/N-1940.

2.4 Judgements, estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies

and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions and judgements are based on historical

experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms the basis of making judgements about

carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying

assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future

periods affected. Judgements made by management in the application of approved accounting standards that have significant effect on the financial statements

and estimates with a risk of material adjustment in subsequent years are as follows:


2.4.1 Depreciation method, rates and useful lives of property, plant and equipment

2.4.2 Recoverable amount assets/cash generating units and impairment

2.4.3 Taxation

2.4.4 Provisions

2.4.5 Revaluation of property, plant and equipment

2.4.6 Obligations under defined benefit plans

2.4.7 Fair values of financial instruments with no active market

2.5 Functional currency

3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Property, plant and equipment

The management of the Company reassesses useful lives, depreciation method and rates for each item of property, plant and equipment annually by

considering expected pattern of economic benefits that the Company expects to derive from that item and the maximum period upto which such benefits

are expected to be available.

The management of the Company reviews carrying amounts of its assets and cash generating units for possible impairment and makes formal estimates

of recoverable amount if there is any such indication.

Provisions are based on best estimate of the expenditure required to settle the present obligation at the reporting date, that is, the amount that the

Company would rationally pay to settle the obligation at the reporting date or to transfer it to a third party.

Obligations under defined benefit plans are determined by independent actuaries based on various assumptions including expected rate of increase in

salaries, expected remaining working lives of employees, expected return on plan assets and discount rates.

Parts of an item of property, plant and equipment having different useful lives are recognized as separate items.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses with the exception of freehold

land, which is measured at revalued amount, building on freehold land, residential colony assets and, plant and machinery which are measured at revalued

amount less accumulated depreciation and capital work in progress which is measured at cost less accumulated impairment losses. Cost comprises purchase

price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and includes other costs directly attributable to the

acquisition or construction including expenditures on material, labour and overheads directly relating to construction, erection and installation of operating fixed

assets. Expenditure incurred on capital work in progress are transferred to operating fixed assets when related items become available for use.

Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of non-depreciable items are

determined by reference to local market values and that of depreciable items are determined by reference to present depreciated replacement values.

The Company takes into account the current income tax law and decisions taken by appellate authorities while estimating its tax liabilities.

Fair values of financial assets and financial liabilities with no active market are determined by discounting estimated future cash flows at effective interest

rate; the rate that exactly discounts estimated future receipts/payments through expected life of the financial assets/liabilities or, when appropriate, a

shorter period, to the net carrying amount of the financial assets/liabilities.

These financial statements have been prepared in Pak Rupees which is the Company's functional currency.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.


3.2 Surplus / deficit arising on revaluation of property, plant and equipment

3.3 Goodwill acquired in business combination

3.4 Stores, spares and loose tools

3.5 Stock in trade

Finished goods Average manufacturing cost

Trading stock Invoice price plus related expense

Stock in transit Invoice price plus related expense incurred up to the reporting date

3.6 Employee benefits

3.6.1 Short-term employee benefits

Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to

make the sale.

Major renewals and improvements to an item of property, plant and equipment are recognized in the carrying amount of the item if it is probable that the

embodied future economic benefits will flow to the Company and the cost of renewal or improvement can be measured reliably. The cost of the day-to-day

servicing of property, plant and equipment are recognized in profit or loss as incurred.

Surplus arising on revaluation of items of property, plant and equipment is recognized on balance sheet after reversing deficit relating to the same item previously

recognized in profit or loss, if any. Deficit arising on revaluation is recognized in profit or loss after reversing the surplus relating to the same item previously

recognized on balance sheet, if any. An amount equal to incremental depreciation, being the difference between the depreciation based on revalued amounts

and that based on the original cost, net of deferred tax, if any, is transferred from surplus on revaluation of property, plant and equipment to accumulated profit

every year.

The Company recognizes depreciation in profit or loss by applying straight line method over the useful life of each item of property, plant and equipment as

specified in note 20 to the financial statements. Depreciation on additions to property, plant and equipment is charged from the month in which the item becomes

available for use. Depreciation is discontinued from the month in which it is disposed or classified as held for disposal.

An item of property, plant and equipment is de-recognized when permanently retired from use. Any gain or loss on disposal of property, plant and equipment is

recognized in profit or loss.

These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for items in transit, which are valued

at invoice price plus related expenses incurred up to the reporting date. For items which are considered obsolete, the carrying amount is written down to nil.

These are valued at lower of cost and net realizable value. Cost is determined using the following basis:

Average manufacturing cost in relation to finished goods consists of direct material, labour and a proportion of appropriate manufacturing overheads.

The Company recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services rendered by employees as a

liability after deducting amount already paid and as an expense in profit or loss unless it is included in the cost of inventories or property, plant and

equipment as permitted or required by the approved accounting standards. If the amount paid exceeds the undiscounted amount of benefits, the excess

is recognized as an asset to the extent that the prepayment would lead to a reduction in future payments or cash refund.

Goodwill acquired in business combination represents future economic benefits arising from assets that are not capable of being individually identified and

separately recognized. Goodwill is initially recognized at cost which is determined as the excess of the cost of business combination over the Company’s interest

in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Subsequent to initial recognition, goodwill is measured at cost less

accumulated impairment losses, if any.


3.6.2 Post-employment benefits

3.6.2 (a) Defined contribution plan

3.6.2 (b) Defined benefit plan

3.7 Financial instruments

3.7.1 Recognition

3.7.2 Classification and measurement

3.7.2 (a) Loans and receivables

3.7.2 (b) Available for sale financial assets

3.7.2 (c) Financial liabilities at amortized cost

The Company operates an approved defined contributory provident fund for its employees excluding expatriates. Equal contributions are made

by the Company and employees at 8.33% of basic salary. Interest is charged @ 8.33% on the outstanding fund balance and is recognized in

profit or loss.

Details of scheme are referred to in note 17.1 to the financial statements.

Available for sale financial assets are non-derivative financial assets that are designated as such on initial recognition or are not classified as

loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Assets in this category are presented

as non-current assets unless the management intends to dispose of the asset within twelve months from the reporting date. The particular

measurement methods adopted are disclosed in the individual policy statements associated with each instrument.

Non-derivative financial liabilities that are not financial liabilities at fair value through profit or loss are classified as financial liabilities at

amortized cost. Financial liabilities in this category are presented as non-current liabilities except for maturities greater than twelve months from

the reporting date where these are presented as non-current liabilities. The particular measurement methods adopted are disclosed in the

individual policy statements associated with each instrument.

The amount recognized in the balance sheet represents the present value of defined benefit obligation less fair value of plan assets as

adjusted for unrecognized actuarial gains and losses.

Actuarial gains and losses are recognized using the "10% corridor approach" as set out by International Accounting Standard 19 - Employee

Benefits.

A financial instrument is recognized when the Company becomes a party to the contractual provisions of the instrument.

The Company classifies its financial instruments into following classes depending on the purpose for which the financial assets and liabilities are acquired

or incurred. The Company determines the classification of its financial assets and liabilities at initial recognition.

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and

receivables. Assets in this category are presented as current assets except for maturities greater than twelve months from the reporting date,

where these are presented as non-current assets. The particular measurement methods adopted are disclosed in the individual policy

statements associated with each instrument.

The Company operates a funded gratuity scheme (defined benefit plan) for all its permanent employees who have completed minimum

qualifying period of service excluding employees who were members of the discontinued pension scheme. Liability is adjusted annually to

cover the obligation and the adjustment is charged to profit or loss. The determination of obligation under the scheme requires assumptions to

be made of future outcomes, the principal ones being in respect of increases in remuneration, expected remaining useful lives of employees

and discount rates. These assumptions are determined by independent actuaries.


3.7.3 De-recognition

3.7.4 Off-setting

3.7.5 Regular way purchases and sales of financial assets

3.8 Ordinary share capital

3.9 Redeemable capital

3.10 Loans and borrowings

Redeemable capital, including embedded equity component existing due to conversion options, if any, is recognized as 'loans and borrowings', in accordance

with the interpretation of the provisions of the Companies Ordinance, 1984, including those pertaining to implied classification of redeemable capital .

Ordinary share capital is recognized as equity. Transaction costs directly attributable to the issue of ordinary shares and share options are recognized as

deduction from equity.

A financial asset and a financial liability is offset and the net amount reported in the balance sheet if the Company has legally enforceable right to set-off

the recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Financial assets are de-recognized if the Company's contractual rights to the cash flows from the financial assets expire or if the Company transfers the

financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are de-recognized if the

Company's obligations specified in the contract expire or are discharged or cancelled. Any gain or loss on de-recognition of financial assets and financial

liabilities is recognized in profit or loss.

Regular way purchases and sales of financial assets are recognized on trade dates.

Loans and borrowings are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being fair value at the date the

liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost with any difference between cost

and redemption value recognized in the profit or loss over the period of the borrowings on an effective interest basis.

3.11 Finance leases

3.12 Investments in equity securities

Investments in equity securities including investments in equity securities of subsidiaries are classified as 'available for sale financial assets'. On initial recognition

these are measured at cost, being their fair value on date of acquisition, less attributable transaction costs. Subsequent to initial recognition, these are measured

at fair value. Changes in fair value are recognized in other comprehensive income until the investment is derecognized or impaired. Gains and losses on de-

recognition and impairment losses are recognized in profit or loss.


3.13 Operating leases

3.14 Trade and other payables

3.14.1 Financial liabilities

3.14.2 Non-financial liabilities

3.15 Provisions and contingencies

3.16 Trade and other receivables

3.16.1 Financial assets

3.16.2 Non-financial assets

3.17 Revenue

3.18 Borrowing costs

Revenue from sale of goods is recognized when risks and rewards incidental to the ownership of goods are transferred to the buyer. Transfer of risks and rewards

vary depending on the individual terms of the contract of sale and usually occurs on dispatch of goods to customers.

These, on initial recognition and subsequently, are measured at cost.

Interest income is recognized using effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period

of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use

or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying asset is deducted from the

borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss as incurred.

These are classified as 'loans and receivables'. On initial recognition, these are measured at cost, being their fair value at the date of transaction, less

attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the effective interest method, with interest


Leases that do not transfer substantially all risks and rewards of ownership are classified as operating leases. Payments made under operating leases are

recognized in profit or loss on a straight line basis over the lease term.


Provisions are recognized when the Company has a legal and constructive obligation as a result of past events and it is probable that outflow of resources

embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is recognized at

an amount that is the best estimate of the expenditure required to settle the present obligation at the reporting date. Where outflow of resources embodying

economic benefits is not probable, a contingent liability is disclosed, unless the possibility of outflow is remote.

Revenue is measured at the fair value of the consideration received or receivable, net of returns allowances, trade discounts and rebates, and represents

amounts received or receivable for goods and services provided and other operating income earned in the normal course of business. Revenue is recognized

when it is probable that the economic benefits associated with the transaction will flow to the Company, and the amount of revenue and the associated costs

incurred or to be incurred can be measured reliably.

These are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being their fair value at the date the

liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the effective interest

method, with interest recognized in profit or loss.


3.19 Government grants

3.20 Income tax

3.21 Earnings per share (EPS)

3.22 Cash and cash equivalents

3.23 Impairment


Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks. These are classified as 'loans and receivables' and

are carried at amortized cost.

Current tax is the amount of tax payable on taxable income for the year, using tax rates enacted or substantively enacted by the reporting date, and any

adjustment to the tax payable in respect of previous years. Provision for current tax is based on current rates of taxation in Pakistan after taking into account tax

credits, rebates and exemptions available, if any. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any

excess paid over what is due in respect of the current or prior periods is recognized as an asset.

Deferred tax is accounted for using the balance sheet approach providing for temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for tax purposes. In this regard, the effects on deferred taxation of the portion of income that is subject to final

tax regime is also considered in accordance with the requirement of "Technical Release - 27" of the Institute of Chartered Accountants of Pakistan. Deferred tax is

measured at rates that are expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or substantively

enacted by the reporting date. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for deductible

temporary differences to the extent that future taxable profits will be available against which temporary differences can be utilized. Deferred tax assets are

reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items

recognized directly in other comprehensive income, in which case it is recognized in equity.

Government grants are recognized when there is reasonable assurance that they will be received and that the Company will comply with the conditions

associated with the grant. Grants related to future expenditure are initially recognized as deferred income. Subsequent to initial recognition grants related to

assets are recognized in profit or loss on a systematic basis over the useful life of the assets whereas grants relating to income are recognized in profit or loss on

a systematic basis in the same period in which related expenses are recognized. Grants that compensate the Company for expenses or losses already incurred

are recognized in profit or loss in the period in which these become receivable.

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares

outstanding during the year.

Diluted EPS is calculated by adjusting basic EPS by the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential

ordinary shares into ordinary shares and post-tax effect of changes in profit or loss attributable to ordinary shareholders of the Company that would result from

conversion of all dilutive potential ordinary shares into ordinary shares.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the

present value of the estimated future cash flows discounted at the original effective interest rate. Impairment loss in respect of a financial asset measured

at fair value is determined by reference to that fair value. All impairment losses are recognized in profit or loss. An impairment loss is reversed if the

reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the extent that

the financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined, net of amortization, if no

impairment loss had been recognized.

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. Individually significant

financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar

credit risk characteristics. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect

on the estimated future cash flows of the asset.



The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to

determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable

amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated

future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of money

and the risks specific to the asset or cash generating unit.

An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its estimated recoverable amount. Impairment

losses are recognized in profit or loss. Impairment losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of

the assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss

has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used in determine the recoverable

amount. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed the carrying amount that

would have been determined, net of depreciation and amortization, if no impairment loss had been recognized.

4

4.1 IAS 1 - PRESENTATION OF FINANCIAL STATEMENNTS (REVISED)

4.2 IAS 23 - BORROWING COSTS (REVISED)

Standard and interpretations that become effective during the year but not relevant

IFRS 3 - Business Combinations (Revised)

IFRS 7 - Financial Instruments: Disclosure (Amended)

IFRS 8 - Operating Segments

IAS 27 - Consolidated and Separate Financial Statements (Revised)

IAS 32 - Financial instruments (Amended of reputable instruments and obligations arising on liquidation)

IAS 39 - Financial Instruments: Recognition and Measurement (Amended)

IFRIC 15 - Agreements for the Construction of Real Estate.

IFRIC 16 - Hedges of a Net Investment in a Foreign Operation

IFRIC 17 - Distributions of Non-cash Assets to Owners

IFRIC 18 - Transfers of Assets from Customers

NEW AND REVISED APPROVED ACCOUNTING STANDARDS, INTERPRETATIONS AND AMENDMENTS THERETO

Certain amendments to IAS 23, “Borrowing cost” have been published that a applicable to the company`s financial statements covering annual period,

beginning on or after January 1, 2009. Adoption of these amendments requires the company to capitalized the borrowing cost directly attributable to

acquisition, construction or production of a qualifying assets (one that take substantial period of time to get ready for use or sale) as part of the cost of

that assets. The option of immediately expensing these borrowing cost has been removed. the adoption of said amendment resulted in additional

capitalization of borrowing cost amounting to Rs.335.780 million.

During the current year, the Company has adopted the following new and amended IAS as of July 01, 2009, which has resulted in extended disclosures as

described below:

The following standards (revised or amended) and interpretations become effective for the current financial year but are either not relevant or do not have any

material effect on the financial statements of the Company.

The revised IAS 1 as issued in September 2007 and became effective for financial years beginning on or after January 01, 2009. The revised standard

separates owner and non-owner changes in equity. The statements of changes in equity includes only details of transaction with owners. with non-owner

changes in equity presented as a single line. in addition, the standard has introduced a statements of comprehensive income, which presents all items of

recognized income and expense, either as a single statement, or in two linked statements. The Company has opted to present two inked statements and

accordingly has presented a separate statements of comprehensive income in these financial statements. Comparative figures have also been re-

presented to bring in conformity with the revised standard.


Effective for period

beginning on or after

IAS 24 - Related Party Disclosures (Revised) January 01, 2011

IAS 32 - Financial Instruments: Presentation - Amendments Relating to Classification of Rights Issues February 01, 2010

IFRS 2 - Share-based Payment: Amendments relating to Group Cash - settled Share-based Payments Transactions January 01, 2010

IFRIC 14 - IAS 19 - The Limited on Defined Benefit Asset, Minimum Funding Requirements and their Interaction (Amendment) January 01, 2011

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments July 01, 2010

The following are the standards and interpretations which have been issued but are not yet effective for the current financial year.

5 AUTHORIZED SHARE CAPITAL

Ordinary shares of Rs 10 each

600,000,000 (2009: 600,000,000) class A shares 5.1 6,000,000,000 6,000,000,000

200,000,000 (2009: 200,000,000l) class B shares 5.2 2,000,000,000 2,000,000,000

200,000,000 (2009: 200,000,000l) class C shares 5.3 2,000,000,000 2,000,000,000

10,000,000,000 10,000,000,000

Preference shares of Rs. 10 each

200,000,000 (2009: 200,000,000) shares 2,000,000,000 2,000,000,000

12,000,000,000 12,000,000,000

5.1

5.2

5.3

6 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

Class A ordinary shares of Rs. 10 each

383,430,000 (2009: 383,430,000) shares issued fully paid in cash 3,834,300,000 3,834,300,000

9,000,000 (2009: 9,000,000) shares issued for consideration other than cash 90,000,000 90,000,000

3,924,300,000 3,924,300,000

6.1 313,423,177 shares (2009: 392,429,993 shares) are held by ANL (holding company) as of reporting date.

Class C ordinary shares are non-voting ordinary shares of the Company that do not have any voting rights attached thereto and do not have any rights to receive

notice of, attend, or vote at a general meeting of the Company, However, holders of such shares shall have all other rights of ordinary shares, including right to

dividend and to share in the assets of the Company in event of its winding up.

Class A ordinary shares include all ordinary shares of the Company other than non-voting ordinary shares and restrictive rights voting ordinary shares, having all

rights and privileges, including voting rights as provided in the Ordinance.

Class B ordinary shares are restrictive rights voting ordinary shares that have the restricted or disproportionate rights and privileges.

Note 2010 2009

Rupees Rupees

2010 2009

Rupees Rupees

Standards and interpretations issued but not yet effective for the current financial year

2010 2009

Rupees Rupees


7 RESERVES

Revenue reserve 9,000,000

9,000,000

Available for sale financial assets 7.1 3,077,504,807

290,221,269

3,086,504,807

299,221,269

7.1

8 SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT

Revaluation carried out during the year 6,560,395,944

--

Related deferred tax liability (2,268,021,208)

--

Transfer to accumulated loss in respect of incremental depreciation charged during the year - Net of tax (28,783,221)

--

Surplus on revaluation of fixed assets - Closing 4,263,591,515 -- Land

Land, building and plant and machinery of the Company have been revalued as at March 07, 2010 by a firm of independent valuers, "Maricon Consultants". Basis of

revaluation are as follows:

This represents excess of cost of acquisition of Hazara Phosphate Fertilizers (Private) Limited ("HPFL") over the fair value of investment in HPFL. Refer to note

22 for details.

Revalued amount of land has been determined by reference to local market values of land taking into account prevailing fair market prices under the position and

circumstances present on the date of revaluation and current market scenario for properties of similar nature in the immediate neighbourhood and adjoining areas.

Building

Plant and machinery

W.D.V. of

Accumulated assets before Revalued Revaluation

Cost Depreciation revaluation Amount Surplus

Rupees Rupees Rupees Rupees Rupees

Freehold land 1,839,746,250

--

1,839,746,250

1,920,081,600

80,335,350

Buildings on freehold land 1,157,086,359

333,922,858

823,163,501

1,279,545,300

456,381,799

Plant and machinery 16,309,095,068

4,515,662,626

11,793,432,442

17,708,963,750

5,915,531,308

Residential colony assets 71,243,413

13,563,500

57,679,913

165,827,400

108,147,487

19,377,171,090

4,863,148,984 14,514,022,106 21,074,418,050 6,560,395,944

Revalued amount of building has been determined by reference to present depreciated replacement values after taking into consideration covered area and type of

construction, age of civil and ancillary structures, physical condition and level of preventive maintenance carried out by the Company.

Revalued amount of plant and machinery has been determined by reference to present depreciated replacement values after taking into consideration present physical

condition, remaining useful economic lives, technological obsolescence and level of preventive maintenance carried out by the Company.

The surplus arising from revaluation is Rs. 6,560 million. The closing balance of surplus on revaluation of fixed assets is not available for distribution to shareholders.

Note 2010 2009

Rupees Rupees


9 LOAN FROM ASSOCIATES - UNSECURED, SUBORDINATED

10 REDEEMABLE CAPITAL - SECURED

Term Finance Certificates (TFCs) - I 10.1 & 10.5 6,894,480,000

6,898,520,000

Term Finance Certificates (TFCs) - II 10.2 1,498,800,000

1,497,980,000

Term Finance Certificates (TFCs) - III 10.3 496,165,250

500,000,000

Sukuks 10.4 1,600,000,000

1,600,000,000

10,489,445,250

10,496,500,000

Transaction costs 10.6 (127,549,317)

(143,051,767)

10,361,895,933

10,353,448,233

Current maturity presented under current liabilities 15 (2,175,886,000)

(215,590,000)

8,186,009,933

10,137,858,233

10.1 These have been issued by way of private placements with a consortium of investors for redemption of privately placed term finance certificates issued earlier by

the Company. The total issue comprises of 1,380,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:

This represents loan obtained by the Company from an associated company to finance the acquisition of HPFL. The tenor of loan is six years and carries mark-up at six

months KIBOR plus a spread of 3.25% per annum (2009: six months KIBOR plus a spread of 3.25% per annum). The loan is subordinated to all long term finances

obtained by the Company. The conversion option in subordinated loan was rescinded, by mutual consent, during the year.

Principal redemption

Call option

Return on TFCs

Trustee

Security

10.2


The Company may redeem the TFCs by way of exercise of call option by giving notice in writing to TFC holders and the Trustee of not less than thirty days.

In order to protect the interests of TFC holders, Faysal Bank Limited has been appointed as trustee for the issue under a trust deed. The trustee has the power to

enforce the Company's obligations, in case it defaults, in accordance with the terms of the trust deed and to distribute the proceeds of any such enforcement

among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Company.

The principal redemption of TFCs is structured to be in ten equal semi-annual installments starting from July 2010.

The issue carries return at six months KIBOR plus 1.75% per annum, payable semi-annually.

The principal redemption of TFCs is structured to be in ten equal semi-annual installments starting from May 2010.

These have been issued by way of private placements with a consortium of investors for redemption of privately placed term finance certificates issued earlier by

the Company. The total issue comprises of 300,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:

The issue is secured by charge over property, plant and equipment of the Company.

Note 2010 2009

Rupees Rupees


Call option

Return on TFCs

Trustee

Security

10.3


Call option

Return on TFCs

Trustee

Security

10.4


Call option

These have been issued by way of private placements with a consortium of investors to finance the acquisition of HPFL. The total issue comprises of 100,000

certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:

The Company may redeem these certificates by way of exercise of call option by giving notice in writing to TFC holders and the Trustee of not less than thirty

days. However the call option can be exercised only after expiry of one year from the date of issue.

In order to protect the interests of TFC holders, JS Bank Limited has been appointed as trustee for the issue under a trust deed. The trustee has the power to

enforce the Company's obligations, in case the Company defaults, in accordance with the terms of the trust deed and to distribute the proceeds of any such

enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Company.

The issue carries return at three months KIBOR plus 3.25% per annum, payable quarterly.

In order to protect the interests of TFC holders, Pak Brunei Investment Company Limited has been appointed as trustee for the issue under a trust deed. The

trustee has the power to enforce the Company's obligations, in case the Company defaults, in accordance with the terms of the trust deed and to distribute the

proceeds of any such enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Company.

The principal redemption of TFCs is structured to be in sixteen equal quarterly installments starting from March 2010.



However the call option can be exercised only after expiry of two years from the date of issue.



However the call option can be exercised only after expiry of one year from the date of issue.


The principal redemption of these certificates is structured to be in ten equal semi annual installments starting from February 2011.

These have been issued by way of private placements with a consortium of investors to finance the balancing, modernization and replacement of Company's

property, plant and equipment. The total issue comprises of 320,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as

follows:


Return on TFCs

Trustee

Security

10.5

10.6 Transaction costs

As at beginning of the year 143,051,767 78,214,511

Incurred during the year 14,300,000 64,837,256

Amortized during the year (29,802,450) --

As at end of the year 127,549,317 143,051,767

10.7

11 LONG TERM FINANCES - SECURED

Syndicate Term Finance - I 11.1 481,250,000 500,000,000

Syndicate Term Finance - II 11.2 2,431,485,482 1,356,398,302

Term Finance 11.3 300,000,000 --

3,212,735,482 1,856,398,302

Current maturity presented under current liabilities 15 (568,750,000) (62,500,000)

2,643,985,482 1,793,898,302


For restrictions on title, and assets pledged as security, refer to note 46 to the financial statements.

The issue carries return at six months KIBOR plus 2% per annum, payable semi-annually.


trustee has the power to enforce the Company's obligations, in case the Company defaults, in accordance with the terms of the trust deed and to distribute the

proceeds of any such enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Company.

These represent long term finances utilized under markup arrangements from banking companies

This includes 120,000 certificates of Rs. 5,000 each (2009: 120,000 certificates of Rs. 5,000 each) held by ANL.

2010 2009

Rupees Rupees

Note

11.1

11.2 The finance has been obtained from a consortium of banking companies to finance the revamping of operational efficiencies of the Company's plant and is secured

by charge over property, plant and equipment of the Company. The finance carries mark-up at six months KIBOR plus a spread of 2.25% per annum, payable semi-

annually. The finance is repayable in equal semi-annual installments with the first installment due after two years from the date of disbursement on March 30, 2011.

The finance has been obtained from a consortium of banking companies to finance the acquisition of HPFL and is secured by charge over property, plant and

equipment of the Company. The finance carries mark-up at three months KIBOR plus a spread of 3.25% per annum (2009: three months KIBOR plus a spread of

3.25% per annum), payable quarterly. The finance is repayable in equal quarterly installments with the first installment due after fifteen months from the date of

disbursement on February 28, 2010.


11.3

11.4

12 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE - SECURED

Present value of minimum lease payments 12.1 & 12.2 238,868,533 276,518,057

Current maturity presented under current liabilities 12.2 & 15 (67,081,740) (45,332,412)

171,786,793 231,185,645

12.1

12.2

Not later than one year 91,891,637 88,022,603

Later than one year but not later than five years 231,420,199 309,408,176

Total future minimum lease payments 323,311,836 397,430,779

Finance charge allocated to future periods (84,443,303) (120,912,722)

Present value of future minimum lease payments 238,868,533 276,518,057

Not later than one year (67,081,740) (45,332,412)

Later than one year but not later than five years 171,786,793 231,185,645

12.3

13 LONG TERM PAYABLES - UNSECURED

14 DEFERRED TAXATION

Deferred tax liability arising on

Accelerated tax depreciation 4,034,624,998 2,788,501,603

Revaluation - net of related depreciation 2,252,522,550 --

Finance lease transactions 50,734,025 39,160,386

Deferred tax asset arising on

Unused tax losses and available tax credits 14.1 (2,667,617,517) (772,150,559)

Net liability recognized in balance sheet 3,670,264,056 2,055,511,430


These represent vehicles and machinery acquired under finance lease arrangements and are secured by lien over documents of title, specific charge over leased

assets and registration of leased vehicles jointly in the name of the Company and that of the lessor. Rentals are payable monthly/quarterly. The leases are priced

at interest rates ranging from three to six months KIBOR plus a spread of 2% to 3% per annum (2009: three to six months KIBOR plus a spread of 2% to 3% per

annum). Under the terms of agreement, taxes, repairs, replacements and insurance costs in respect of assets subject to finance lease are borne by the Company.

The Company also has the option to acquire these assets at the end of the respective lease terms and intends to exercise the option.

This represents amount payable to a contractor whose claim is pending with arbitrator. Refer to note 19.1.1 for details.

The amount of future payments under the lease arrangements and the period in which these payments will become due are as follows:


The above term finance facility has been obtained from KASB Bank Limited to meet working capital requirements. The finance carries mark-up at three months

KIBOR plus a spread of 3.5% per annum The loan is secured against ranking charge over fixed assets of the Company including Plant & Machinery equipment

(excluding land, building). The loan is repayable in equal monthly installments commencing from November 2010.

Note 2010 2009

Rupees Rupees

Note 2010 2009

Rupees Rupees


14.1

14.2

15 CURRENT MATURITY OF NON CURRENT LIABILITIES

Redeemable capital 10 2,175,886,000

215,590,000

Long term finances 11 568,750,000

62,500,000

Liabilities against assets subject to finance lease 12 67,081,740

45,332,412

2,811,717,740

323,422,412

16 SHORT TERM BORROWINGS

These represent short term finances utilized under mark-up arrangements from banking companies

Secured

Running finance 16.1 2,118,271,009

1,379,079,713

Cash finance 16.1 395,417,748

307,004,933

Finance against trust receipt 16.1 958,435,106

--

Morabaha/LPO 16.1 1,255,281,618

--

Demand finance 16.1 60,313,169

--

4,787,718,650

1,686,084,646

Unsecured

Commercial paper --

417,000,000

4,787,718,650

2,103,084,646

16.1

16.2

Deferred tax has been calculated at 35% (2009: 35%) of temporary differences as at the reporting date.

These finances carry markup at rates ranging from one to six months KIBOR plus a spread of 1.5% to 4.5% per annum (2009: three to six months KIBOR plus a

spread of 1.5% to 3.5% per annum), payable quarterly.

The aggregate available short term funded facilities amounts to Rs. 5,897 million (2009: Rs. 2,103 million) out of which Rs. 0.793 million (2009: Nil) remained

unavailed as at the reporting date. Limits available for opening of letters of credit / guarantee amount to Rs. 7,692 million (2009: Rs. 7,692 million) of which the

limits remaining unutilized as at the reporting date amount to Rs. 2,905 million (2009: Rs. 5,589 million).


These facilities have been obtained from various banking companies for working capital requirements and are secured by charge over current assets of the

Company, pledge of stocks, and personal guarantees of Directors of the Company.

Unused tax losses and available tax credits amounting to Rs.813.254 million have not been taken into account in determining deferred tax asset as future taxable

profits are expected to be available only to the extent of deferred tax asset recognized.

Note 2010 2009

Rupees Rupees


17 TRADE AND OTHER PAYABLES

Trade creditors 214,847,262

72,803,655

Bills payable 2,459,112,973

934,826,716

Accrued liabilities 175,412,809

31,043,348

Security deposits and retention money 33,360,861

44,138,751

Advances from customers 205,414,566

219,433

Tax deducted at source 14,574,523

5,684,628

Sales tax payable 321,544

--

Payable to gratuity trust 17.1 14,073,414

9,041,621

Payable to provident fund trust 17.2 84,210,584

4,193,230

Workers' Profit Participation Fund 17.3 13,887,019

23,397,269

Workers' Welfare Fund 17.4 5,554,808

11,378,290

Other payables 24,652,833

13,269,282

3,245,423,196

1,149,996,223

17.1 Balance sheet Liability

Present value of defined benefit obligations 31,478,117 22,661,840 Fair value of plan assets (14,960,335)

(15,519,512)

Deficit 16,517,782

7,142,328

Unrecognized actuarial gains/ (losses) (2,444,368)

1,899,293

Total Balance sheet Liability 14,073,414

9,041,621

Changes in fair value obligations

Present value of defined benefit obligation on 1 July 22,661,840

23,859,405

Current service cost 4,174,713

3,978,663

Interest cost for the year 2,719,421

2,863,129

Benefit paid/discharged during the year (1,114,582)

(4,256,378)

Actuarial (gains) loss on PVDBO 3,036,725

(3,782,979)

Present value of defined benefit obligation on 30 June 31,478,117

22,661,840

Changes in fair value of Plan assets

Fair value of Plan asset as on 1 July 15,519,512

19,338,907

Expected return on plan assets for the year 1,862,341

2,320,669


(4,256,378)

Actuarial losses on assets (1,306,936)

(1,883,686)

Fair value of Plan asset as on 30 June 14,960,335

15,519,512

Expense to be charged to P&L

Additional liability/(Assets) charge for the year --

(3,958,902)

Current service cost for the year 4,174,713

3,978,663


2,863,129

Expected return on plan assets (1,862,341)

(2,320,669)

Amount chargeable to P&L 5,031,793

562,221

Note 2010 2009

Rupees Rupees


Changes in actuarial gains / (loss)

Unrecognized gain (loss) as on 1 July 1,899,293 --

Total gain and (loss) arising in the year (4,343,661) 1,899,293

Unrecognized gain (loss) as on 30 June (2,444,368) 1,899,293

Changes In net liability

Liability as on 1 July 9,041,621 8,479,400

Expense charged during the year 5,031,793 562,221

Net liability as on 30 June 14,073,414 9,041,621

2010 2009

Principal Actuarial Assumptions

Discount rate 12% 12%

Expected Return on plan assets 12% 12%

Expected rates of salary increase in future 11% 11%

Expected remaining future working life 14 years 13 years

Actual return on plan assets

Expected return on plan assets 1,862,341 2,320,669

Actuarial gain on assets in the year (1,306,936) (1,883,686)

Actuarial return on plan assets 555,405 436,983

Historical information

2010 2009 2008

Rupees Rupees Rupees

Present Value of Defined Benefit Obligations 31,478 22,662 23,859

Fair Value of Plan Assets 14,960 15,520 19,339

Deficit in the plan 16,518 7,142 4,520

Experience adjustments arising on

Plan liabilities (gain)/losses 3,037 (3,783) Nil

Plan assets gains/(losses) (1,307) (1,884) Nil

17.2 Payable to provident fund trust

Markup at the rate of 18% has been accrued on payable to provident fund trust.

2010 2009

Rupees Rupees

2010 2009

Rupees Rupees


17.3 Workers' Profit Participation Fund ("WPPF")

As at the beginning of the year 23,397,269 31,241,440

Charged to profit or loss for the year 13,887,019 23,397,269

Paid during the year (23,397,269) (31,241,440)


17.4 Workers Welfare Fund ("WWF")

As at the beginning of the year 11,378,290 --

Charged to profit or loss for the year 5,554,808 11,378,290

Paid during the year (11,378,290) --


18 MARK-UP ACCRUED ON BORROWINGS

19 CONTINGENCIES AND COMMITMENTS

19.1 Contingencies

19.1.1

19.1.2

19.1.3

19.1.4

19.1.5

19.1.6

C.R no 66/2008 title WAPDA versus Agritech limited. The said reference is pending before the honourable high court, where in, WAPDA has assailed the

order dated 12.05.2005 passed by the Additional District and Sessions Judge ,Mianwali ,in favour of the Company .Through the order dated 12.05.2005,

it was held the Company was not liable to pay an amount Rs. 2,238,300/-as demand by WAPDA .In our view the company has very strong chances of

success and thus most probably there will not be any financial impact.

Certain cases against the Company are pending before labour courts, where the claim cannot be quantified and ascertained at this stage.

A contractor's claim amounting to Rs. 839.510 million (2009: Rs. 983.26 million) against the Company was not acknowledged as debt since the

Company also has a counter claim amounting to Rs. 2,556.02 million (2009: 2,556 million) against the contractor. The claim is under settlement with

arbitrator. The management expects a favourable decision.

These include mark-up of Rs. 127,148,170/- (2009: Rs. 43,809,757/-) on TFCs held by ANL (see note 10.5) and that of Rs.60,591,167/- (2009: Rs. 41,049,797/-) on

long term loan obatained from associated company. (see note 9).

Guarantees given by banks on behalf of the Company as at the reporting date amount to Rs. 196.3 million (2009: NIL million).

Some ex-employees of the Company have filed a petition demanding the benefits of golden hand shake scheme which was introduced in 1997. The

Company estimates liability amounting to Rs. 8 million in case the decision is made against it. The management claims that no benefits are payable to

the petitioners under the said scheme and is of the view that the decision will be made it the Company's favour.

2010 2009

Rupees Rupees


19.2 Commitments

19.2.1 Commitments under irrevocable letters of credit for:

- purchase of stores, spare and loose tools 17,567,001

233,375,257

- purchase of machinery 77,679,222

1,485,603,784

95,246,223

1,718,979,041

20 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 20.1 23,740,198,529

12,336,272,523

Capital work in progress 20.2 8,037,390,794

4,281,290,946

31,777,589,323

16,617,563,469

Note 2010 2009

Rupees Rupees

No

tes

to a

nd

fo

rmin

g p

art

of

Fin

an

cia

l Sta

tem

en

ts

for

the

ye

ar

en

de

d J

un

e 3

0,

20

10

Net

bo

ok v

alu

e

As a

t

Ju

ly 0

1A

dd

itio

ns

Rate

Ru

pees

Ru

pees

%

29,5

31,5

84

--

1,8

10,2

14,6

66

80,3

35,3

50

1,8

39,7

46,2

50

80,3

35,3

50

603,9

58,2

68

3,8

02,8

78

50

429,5

50,9

20

398,7

01,8

86

50

1,0

33,5

09,1

88

402,5

04,7

64

7,8

13,9

98,7

24

2,4

02,2

55,9

80

50

5,1

77,8

90,7

41

5,9

15,5

31,3

08

50

12,9

91,8

89,4

65

8,3

17,7

87,2

88

11,0

27,2

27

3,6

22,0

89

3-2

0

60,2

16,1

86

165,8

27,4

00

3-2

0

71,2

43,4

13

169,4

49,4

89

16,3

59,7

75

--

20

57,8

80,5

12

9,4

55,8

98

3-1

0

94,2

05,6

03

13,3

12

5

174,5

17,8

69

2,4

70,8

31

3-1

0

1,2

91,9

27,7

39

46,6

30,9

22

20

296,4

76

--

926,4

79

--

10

111,1

44,2

68

--

17,6

83,6

47,0

37

9,0

28,6

47,8

54

343,4

60,7

40

--

20

Assets

ow

ned

by t

he C

om

pan

y

Fre

ehold

land

- C

ost

- R

eva

luatio

n

Build

ings

on fre

ehold

land

- C

ost

- R

eva

luatio

n

Pla

nt and m

ach

inery

- C

ost

- R

eva

luatio

n

Resi

dentia

l colo

ny

ass

ets

- C

ost

- R

eva

luatio

n

Road,b

ridges

and c

ulv

ert

s

Furn

iture

, fix

ture

s and o

ffic

e e

quip

ment

Vehic

les

and r

ail

transp

ort

Tools

and o

ther

equip

ment

Ele

ctrica

l and o

ther

inst

alla

tions

Pla

nta

tion

Books

and li

tera

ture

Cata

lyst

Assets

su

bje

ct

to f

inan

ce lease

Pla

nt and m

ach

inery

Vech

iles

73,4

88,0

85

24,8

32,0

00

20

18,1

00,5

95,8

62

9,0

53,4

79,8

54

2010

CO

ST

/ R

EV

AL

UE

D A

MO

UN

TD

EP

RE

CIA

TIO

N

As a

tas a

t

Ju

ne 3

0Ju

ne 3

0

Ru

pees

Ru

pees

--

79,5

73,2

84

--

1,8

90,5

50,0

16

--

1,9

70,1

23,3

00

314,0

89,6

68

849,6

39,5

10

35,5

90,2

52

792,6

62,5

54

349,6

79,9

20

1,6

42,3

02,0

64

4,2

28,0

51,1

07

8,1

13,2

99,4

03

436,4

08,4

99

10,6

57,0

13,5

50

4,6

64,4

59,6

06

18,7

70,3

12,9

53

9,4

71,9

41

5,1

77,3

75

7,2

00,3

65

218,8

43,2

21

16,6

72,3

06

224,0

20,5

96

7,4

65,7

56

81,3

91,6

94

47,2

36,2

71

20,1

00,1

39

91,5

95,2

81

61,2

23

168,7

56,7

19

8,2

31,9

81

718,1

82,5

42

620,3

76,1

19

296,4

76

--

559,1

97

367,2

82

92,0

55,9

81

19,0

88,2

87

6,1

56,9

60,0

55

23,3

56,3

75,6

38

16,3

60,8

64

327,0

99,8

76

25,1

75,1

70

56,7

23,0

15

6,1

98,4

96,0

89

23,7

40,1

98,5

29

Ad

justm

en

t

Ru

pees

--

--

--

(108,4

04)

--

(1

08,4

04)

(215,4

17)

--

(215,4

17)

--

--

--

--

--

(2,4

86,5

42)

--

--

--

--

--

(2,8

10,3

63)

--

(8,9

81,0

87)

(11,7

91,4

50)

Fo

r th

e y

ear

Ru

pees

--

--

--

18,8

64,5

87

11

,249,0

31

30,1

13,6

18

176,4

84,3

01

142,9

94,6

90

319,4

78,9

91

177,1

49

3,9

68,1

14

4,1

45,2

63

339,7

60

4,6

49,3

21

562,4

06

7,6

23,4

11

26,4

63,6

71

66,8

01

30,5

47,7

89

423,9

91,0

31

5,4

84,6

07

16,4

88,5

62

445,9

64,2

00

As a

t

Ju

ly 0

1

Ru

pees

--

--

--

295,3

33,4

85

24,3

41,2

21

319,6

74,7

06

4,0

51,7

82,2

23

293,4

13,8

09

4,3

45,1

96,0

32

9,2

94,7

92

3,2

32,2

51

12,5

27,0

43

7,1

25,9

96

42,5

86,9

50

93,5

19,4

17

161,1

33,3

08

691,7

18,8

71

296,4

76

492,3

96

61,5

08,1

92

5,7

35,7

79,3

87

10,8

76,2

57

17,6

67,6

95

5,7

64,3

23,3

39

As a

t

Ju

ne 3

0

Ru

pees

79,5

73,2

84

1,8

90,5

50,0

16

1,9

70,1

23,3

00

1,1

63,7

29,1

78

828,2

52,8

06

1,9

91,9

81,9

84

12,3

41,3

50,5

10

11,0

93,4

22,0

49

23,4

34,7

72,5

59

14,6

49,3

16

226,0

43,5

86

240,6

92,9

02

88,8

57,4

50

67,3

36,4

10

91,6

56,5

04

176,9

88,7

00

1,3

38,5

58,6

61

296,4

76

926,4

79

111,1

44,2

68

29,5

13,3

35,6

93

343,4

60,7

40

81,8

98,1

85

29,9

38,6

94,6

18

Tra

nsfe

rs

Ru

pees

50,0

41,7

00

--

50,0

41,7

00

556,2

38,3

08

--

556,2

38,3

08

2,1

27,8

45,8

06

--

2,1

27,8

45,8

06

--

--

--

72,4

97,6

75

--

--

--

--

--

--

--

2,8

06,6

23,4

89

--

--

2,8

06,6

23,4

89

Dis

po

sals

Ru

pees

--

--

--

(270,2

76)

--

(2

70,2

76)

(2,7

50,0

00)

--

(2,7

50,0

00)

--

--

--

--

--

(2,5

62,4

11)

--

--

--

--

--

(5,5

82,6

87)

--

(16,4

21,9

00)

(22,0

04,5

87)

20.1

Pro

per

ty, p

lan

t an

d e

qu

ipm

ent

No

tes

to a

nd

fo

rmin

g p

art

of

Fin

anci

al S

tate

men

ts

for

the

yea

r en

ded

Ju

ne

30

, 20

10

As

at

July

01

Rup

ees

29,5

31,5

84

1,81

0,21

4,66

6

1,83

9,74

6,25

0

612,

656,

315

429,

550,

920

1,04

2,20

7,23

5

7,84

9,23

1,87

3

5,17

7,89

0,74

1

13,0

27,1

22,6

14

11,0

27,2

27

60,2

16,1

86

71,2

43,4

13

16

,359

,775

50,6

70,6

96

93,8

70,4

13

171,

045,

141

1,29

1,63

5,20

6

285,

976

926,

479

110,

407,

007

17,7

15,5

20,2

05

--

32,8

49,7

50

17,7

48,3

69,9

55

Net

boo

k va

lue

As

atA

s at

as a

t

June

30

Rat

eJu

ly 0

1Ju

ne 3

0

Rup

ees

%R

upee

sR

upee

s

29,5

31,5

84

--

29,5

31,5

84

1,81

0,21

4,66

6

--

1,81

0,21

4,66

6

1,83

9,74

6,25

0

--

1,83

9,74

6,25

0

603,

958,

268

5029

2,39

5,36

3

308,

624,

783

429,

550,

920

5015

,750

,201

405,

209,

699

1,03

3,50

9,18

8

308,

145,

564

713,

834,

482

7,81

3,99

8,72

4

503,

906,

844,

695

3,76

2,21

6,50

1

5,17

7,89

0,74

1

5018

9,85

5,99

4

4,88

4,47

6,93

2

12,9

91,8

89,4

65

4,09

6,70

0,68

9

8,64

6,69

3,43

3

11,0

27,2

27

3-20

9,11

5,11

4

1,73

2,43

5

60,2

16,1

86

3-20

2,02

7,92

7

56,9

83,9

35

71,2

43,4

13

11

,143

,041

58,7

16,3

70

16,3

59,7

75

206,

823,

669

9,23

3,77

9

57,8

80,5

12

3-10

38,6

16,2

39

15,2

93,5

62

94,2

05,6

03

591

,362

,109

686,

186

174,

517,

869

3-10

144,

986,

072

13,3

84,5

61

1,29

1,92

7,73

9

2066

5,94

5,88

0

600,

208,

868

296,

476

--

--

926,

479

1042

2,99

2

434,

083

111,

144,

268

27,0

16,3

20

49,6

36,0

76

17,6

83,6

47,0

37

5,39

1,16

2,57

5

11,9

47,8

67,6

50

343,

460,

740

20--

332,

584,

483

Ass

ets

owne

d by

the

Com

pany

Free

hold

land

- Cos

t

- Rev

alua

tion

Bui

ldin

gs o

n fre

ehol

d la

nd

- Cos

t

- Rev

alua

tion

Pla

nt a

nd m

achi

nery

- Cos

t

- Rev

alua

tion

Res

iden

tial c

olon

y as

sets

- Cos

t

- Rev

alua

tion

Roa

d, b

ridge

s an

d C

ulve

rts

Furn

iture

, fix

ture

s an

d of

fice

equi

pmen

t

Vehi

cles

and

rail

trans

port

Tool

s an

d ot

her e

quip

men

t

Ele

ctric

al a

nd o

ther

inst

alla

tions

Pla

ntat

ion

Boo

ks a

nd li

tera

ture

Cat

alys

t

Ass

ets

subj

ect t

o fin

ance

leas

e

Pla

nt a

nd m

achi

nery

Vehi

cles

73,4

88,0

85

207,

892,

834

55,8

20,3

90

18,1

00,5

95,8

62

5,39

9,05

5,40

9

12,3

36,2

72,5

23

2009

CO

ST

/ RE

VALU

ED

AM

OU

NT

DE

PR

EC

IATI

ON

As

at

June

30

Rup

ees

--

--

--

295,

333,

485

24,3

41,2

21

319,

674,

706

4,05

1,78

2,22

3

293,

413,

809

4,34

5,19

6,03

2

9,29

4,79

2

3,23

2,25

1

12,5

27,0

43

2,

737,

660

7,

125,

996

42,5

86,9

50

93,5

19,4

17

161,

133,

308

691,

718,

871

296,

476

492,

396

61,5

08,1

92

5,73

5,77

9,38

7

10,8

76,2

57

17,6

67,6

95

5,76

4,32

3,33

9

Adj

ustm

ent

Rup

ees

--

--

--

(8,6

97,6

25)

(8,6

97,6

25)

(10,

565,

674)

--

(10,

565,

674)

--

--

--

--

--

--

(2,9

25)

--

--

--

--

(19,

266,

224)

9,15

8,95

3

(301

,500

)

(10,

408,

771)

For t

he y

ear

Rup

ees

--

--

--

11,6

35,7

47

8,59

1,02

0

20,2

26,7

67

155,

503,

202

103,

557,

815

259,

061,

017

179,

678

1,20

4,32

4

1,38

4,00

2

30

2,32

7

3,97

0,71

1

2,15

7,30

8

16,1

50,1

61

25,7

72,9

91

296,

475

69,4

04

34,4

91,8

72

363,

883,

035

1,71

7,30

4

10,0

76,3

61

375,

676,

700

Tran

sfer

s

Rup

ees

--

--

--

--

--

--

(343

,460

,740

)

--

(343

,460

,740

)

--

--

--

--

--

--

--

--

--

--

--

(343

,460

,740

)

343,

460,

740

--

--

Dis

posa

ls

Rup

ees

--

--

--

(8,6

98,0

47)

--

(8,6

98,0

47)

(1,4

06,7

81)

--

(1,4

06,7

81)

--

--

--

--

--

--

(39,

000)

--

--

--

--

(10,

143,

828)

--

(1,0

05,0

00)

(11,

148,

828)

Add

ition

s

Rup

ees

--

--

--

--

--

--

309,

634,

372

--

309,

634,

372

--

--

--

--

7,20

9,81

6

335,

190

3,51

1,72

8

292,

533

10,5

00

--

737,

261

321,

731,

400

--

41,6

43,3

35

363,

374,

735

No

tes

to a

nd

fo

rmin

g p

art

of

Fin

anci

al S

tate

men

ts

for

the

yea

r en

ded

Ju

ne

30

, 20

10

AC

TIO

N O

F PA

K D

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F-07

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B-6

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SU

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CO

RO

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8361

SU

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I CU

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S C

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B 3

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Dis

posa

lG

ain/

(loss

)M

ode

of

proc

eeds

on d

ispo

sal

disp

osal

Par

ticul

ars

of b

uyer

Rup

ees

Rup

ees

27,5

96,5

76

25,0

61,9

93

Tend

erA

uctio

ned

to M

/s. M

ian

Ent

erpr

ises

8,00

0

(1,3

72)

Tend

erA

uctio

ned

to M

r Am

ir N

awaz

Saw

ra

54,0

00

(98,

500)

Tend

erA

uctio

ned

to M

/s. S

hah

Zeb

& A

mir

Bro

ther

s

370,

000

(8

9,83

3)

Com

pany

pol

icy

Sal

e to

Khu

rram

Nae

em S

r.Man

ager

(F)

380,

041

12

2,20

7

Com

pany

pol

icy

Sal

e to

Mia

n E

hsan

-ul-H

aq (U

nit.M

anag

er N

H3.

)

391,

289

133,

455

Com

pany

pol

icy

Sal

e to

Imtia

z A

li K

han

(Sr.

Man

ager

Ure

a.)

380,

041

122,

207

Com

pany

pol

icy

Sal

e to

Muh

amm

ad F

aroo

q (U

nit.M

anag

er U

rea)

360,

564

(46,

986)

Com

pany

pol

icy

Sal

e to

Muh

amm

ad R

izw

an S

adiq

Uni

t Man

ager

(Util

ity)

391,

289

133,

455

Com

pany

pol

icy

Sal

e to

Abd

ul W

akee

l (S

r. M

anag

er In

stt.)

380,

041

122,

207

Com

pany

pol

icy

Sal

e to

Akh

tar H

ussa

in S

r.Man

ager

(Mec

h.)

322,

551

(215

,124

)

Com

pany

pol

icy

Sal

e to

Ikra

m-u

l-Haq

Man

ager

(Pro

ject

s)

372,

879

115,

045

Com

pany

pol

icy

Sal

e to

Muh

amm

ad N

aeem

Man

ager

(HS

E)

380,

041

122,

207

Com

pany

pol

icy

Sal

e to

Ash

raf K

han

(Sr.

Man

ager

Ure

a)

373,

657

145,

574

Com

pany

pol

icy

Sal

e to

Reh

an M

unir

Man

ager

(PE

)

376,

838

8,17

2

Com

pany

pol

icy

Sal

e to

Muh

amm

ad A

rif S

r. M

anag

er (R

&D

)

368,

691

(217

,559

)

Com

pany

pol

icy

Sal

e to

Kha

leeq

ue U

r Reh

man

M

anag

er (H

R)

384,

997

78,9

07

Com

pany

pol

icy

Sal

e to

Atta

Ur R

ehm

an

Uni

t Man

ager

(Am

mon

ia)

339,

965

121,

798

Com

pany

pol

icy

Sal

e to

Muh

amm

ad F

aroo

q D

y. G

M (A

mm

onia

Mai

nt)

842,

000

359,

705

Com

pany

pol

icy

Sal

e to

Ria

z A

Kha

n (G

M M

anuf

actu

ring)

737,

124

391,

741

Com

pany

pol

icy

Sal

e to

Muh

amm

ad F

aisa

l Muz

amm

il (M

arke

ting

Man

ager

)

115,

000

95,9

09

Com

pany

pol

icy

Sal

e to

Aam

ir Ib

rahi

m (M

anag

er P

ort O

pera

tions

)

115,

000

58,2

42

Com

pany

pol

icy

Sal

e to

Bur

air N

azir

(Bra

nd M

anag

er)

546,

220

18,4

20

Com

pany

pol

icy

Sal

e to

Qur

ban

Ali

(Ele

ctric

al H

PFL

)

391,

289

173,

122

Com

pany

pol

icy

Sal

e to

Muh

amm

ad G

haza

nfer

Ali

Kha

n (D

y. G

M (M

ech)

417,

468

70,8

01C

ompa

ny p

olic

yS

ale

to O

mer

Pirz

ada

(Man

ager

Mar

ketin

g)

528,

934

104,

084

Com

pany

pol

icy

Sal

e to

Ham

id Iq

bal (

Gen

eral

Man

ager

HP

FL)

583,

000

582,

990

Tend

erA

uctio

ned

to K

HU

RR

AM

IMTI

AZ

537,

000

536,

990

Tend

erA

uctio

ned

to K

HU

RR

AM

IMTI

AZ

564,

500

386,

001

Tend

erA

uctio

ned

to A

GH

A M

US

TAFA

ALI

SH

AH

Cos

t

Rup

ees

2,75

0,00

0

20,2

76

250,

000

890,

000

59

5,00

0

59

5,00

0

595,

000

627,

000

595,

000

595,

000

1,07

5,35

0

595,

000

595,

000

595,

000

632,

000

1,00

5,00

0

680,

200

595,

000

1,31

5,35

0

1,21

9,00

0

572,

697

567,

562

754,

000

595,

000

800,

000

879,

000

815,

541

606,

611

595,

000

22,0

04,5

87

Acc

umul

ated

depr

ecia

tion

Rup

ees

215,

417

10,9

04

97,5

00

430,

167

33

7,16

6

33

7,16

6

337,

166

219,

450

337,

166

337,

166

537,

675

337,

166

337,

166

366,

917

263,

334

418,

750

374,

110

376,

833

833,

055

873,

617

553,

606

510,

804

226,

200

376,

833

453,

333

454,

150

815,

531

606,

601

416,

501

11,7

91,4

50

Net

book

val

ue

Rup

ees

2,53

4,58

3

9,37

2

152,

500

459,

833

25

7,83

4

25

7,83

4

257,

834

407,

550

257,

834

257,

834

537,

675

257,

834

257,

834

228,

083

368,

666

586,

250

306,

090

218,

167

482,

295

345,

383

19,0

91

56,7

58

527,

800

218,

167

346,

667

424,

850 10 10

178,

499

10,2

13,1

3738

,608

,995

28,3

95,8

58

20.1

.1

20.1

.2D

etai

l of a

sset

dis

pose

d of

f dur

ing

the

year

:

Tran

sfer

sto

owne

das

sets

repr

esen

tstra

nsfe

rsfro

mca

pita

lwor

kin

prog

ress

onth

ere

late

das

sets

beco

min

gav

aila

ble

foru

sean

dfro

mas

sets

subj

ectt

o fin

ance

leas

e on

exp

iry o

f lea

se te

rm. T

rans

fers

to a

sset

s su

bjec

t to

finan

ce le

ase

repr

esen

t ass

ets

sold

and

leas

ed b

ack.


20.1.3

Cost of sales 32 442,938,214

373,070,410

Administrative and General expenses 34 2,783,835

2,520,529

Income from experimental farms 36.3 242,151

85,761

445,964,200

375,676,700

20.2 CAPITAL WORK IN PROGRESS

As at As at

July 01 Additions Transfers June 30

Rupees Rupees Rupees Rupees

Building 91,230,799

627,073,922

(678,777,683)

39,527,038


5,935,649,415

(2,127,845,806)

7,997,863,756

4,281,290,946

6,562,723,337

(2,806,623,489)

8,037,390,794

As at As at



Building 10,543,728

80,687,071

--

91,230,799

Plant and machinery 772,507,073

3,417,553,074

--

4,190,060,147

783,050,801

3,498,240,145

--

4,281,290,946

20.2.1

Note 2010 2009

Rupees Rupees

21 INTANGIBLE ASSET

Goodwill acquired in business combination 21.1 2,567,310,828

2,567,310,828

The depreciation charge for the year has been allocated as follows:

Additions to capital work in progress include borrowing costs of Rs. 495.514 million (2009: Rs. 318.937 million) relating to specific borrowings and

Rs.335.780 million (2009: Nil) relating to general borrowings capitalized at annual capitalization rate of 16.02% and also include salaries and other

directly attributable expenses of Rs. 18.940 million (2009: Rs.30.942 million).

2010

2009

Note 2010 2009

Rupees Rupees


21.1

22 LONG TERM INVESTMENTS

Investment available for sale

Hazara Phosphate Fertilizers Limited

19,143,207 ordinary shares of Rs. 10 each

Equity held 100%

Cost 1,385,564,400

1,385,564,400

Fair value adjustment 3,077,504,807

290,221,269

4,463,069,207

1,675,785,669

23 LONG TERM ADVANCES

Advances to employees - Unsecured, considered good 23.1 & 23.3 25,932,322

20,444,326

Advances to employees - Secured 23.2 13,419,549

15,858,712

39,351,871

36,303,038

Current maturity presented under current assets 27 (8,469,954)

(6,913,381)

30,881,917

29,389,657

23.1

23.2

23.3 These include advances to executives amounting to Rs. 17,809,844 (2009: Rs. 16,618,948).

23.4

ANL acquired 100% shares in the Company on July 15, 2006, inclusive of shares offered to the employees of the Company, which were divested by the

employees in favour of ANL. As permitted by the terms and conditions of privatization for the purpose of raising finance ANL formed a wholly owned subsidiary;

Dominion Fertilizers (Private) Limited ('DFL'). By virtue of agreement ANL transferred 69.90% shares in the Company to DFL, which were later reverted back to

ANL on merger of DFL into the Company under the court order dated December 07, 2006 and as such effectively, ANL continued to hold 100% shares since

acquisition. This goodwill represents excess of purchase consideration paid by ANL to the Privatization Commission of Pakistan for acquisition of the Company

over DFL's interest in the fair value of the identifiable net assets of the Company. The amount of goodwill was transferred the Company on merger of DFL into the

Company.

These represent interest free soft loans provided to employees of the Company in accordance with the Company policy.

This represents investment in ordinary shares in Hazara Phosphate Fertilizers (Private) Limited ("HPFL"), a wholly owned subsidiary of the Company. HPFL was

acquired November 28, 2008 from National Fertilizer Corporation of Pakistan (Private) Limited through Privation Commission of Pakistan and was classified as

'available for sale financial asset'. Particulars of investment are as follows:

These represent loans provided to employees of the Company against future salaries and retirement benefits and carry mark-up at one half of six months KIBOR

per annum (2009: one half of six months KIBOR per annum)

These are classified as 'loans and receivables' under IAS 39 'Financial Instruments - Recognition and Measurement ' which are required to be carried at

amortized cost. However, in view of large number of advances, it is impracticable to determine amortized cost of each advance. Further, taking into account the

carrying amount of advances as at the reporting date, difference between the amortized cost and carrying amount of these advances is not considered to be

material.

Note 2010 2009

Rupees Rupees


24 LONG TERM DEPOSITS - UNSECURED, CONSIDERED GOOD

These include the following:

Deposits against finance lease 24.1 10,574,020

9,750,320

Security deposits with utility companies 24.2 4,474,497

4,594,497

15,048,517

14,344,817

24.1

24.2

25 STORES, SPARES AND LOOSE TOOLS

Stores 114,110,214

61,728,848

Spares 1,101,374,628

657,081,424

Loose tools 780,908

672,230

1,216,265,750

719,482,502

25.1

25.2 The Company does not hold any items for specific capitalization.

26 STOCK IN TRADE

Finished goods

Own manufactured 4,698,308

3,950,687

Trading stock 18,874,441

1,659,966,498

23,572,749

1,663,917,185

26.1 There are no stores or stocks which are pledged as security for finances.

26.2

These mainly include security deposits with Water and Power Development Authority and Sui Northern Gas Pipelines Limited. These are classified as 'loans and

receivables' under IAS 39 'Financial Instruments - Recognition and Measurement ' which are required to be carried at amortized cost. However, these, being held

for an indefinite period with no fixed maturity date, are carried at cost as its amortized cost is impracticable to determine.

These have been deposited with various banking companies and financial institutions against assets subject to finance lease.

No provision in respect of obsolescence of slow moving items has been made, as the same is considered to be immaterial.

The entire stock in trade is carried at cost being lower then net realizable value.

Rupees Rupees

Note 2010 2009

Rupees Rupees

2010 2009

Rupees Rupees

2010 2009


27 ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Advances to suppliers - unsecured, considered good 844,536,244

238,592,919

Advances to employees - unsecured, considered good

against purchases and expenses 11,301,532

7,452,322

against salaries and post employment benefits 23 8,469,954

6,913,381

Accrued mark-up 27.1 204,485,615

49,335,712

Deposit with High Court 19.1.4 36,000,000

36,000,000

Prepayments 8,884,863

34,404,878

Other receivables 26,872,090

9,618,843

1,140,550,298

382,318,055

27.1

28 DUE FROM RELATED PARTIES - UNSECURED, CONSIDERED GOOD


Due from HPFL 74,858,160

357,771,285

Due from ANL 28.1 451,007,466

440,376,611

525,865,626

798,147,896

28.1

29 CURRENT TAXATION

As at beginning of the year 179,708,719

28,572,106

Paid/deducted at source during the year 105,056,351

140,003,483

Provision for the year (57,493,366)

--

Adjustments and refunds (75,754,370)

11,133,130

As at end of the year 151,517,334

179,708,719

30 CASH AND BANK BALANCES

Cash in hand 443,558

418,620

Cash at banks

in current accounts 42,995,551

192,465,664

in deposit accounts 30.1 32,802,934

84,707,852

75,798,485

277,173,516

76,242,043

277,592,136

30.1 Rate of return on deposit accounts ranges from 5 % to 6% (2009: 5% to 6%) per annum.

This includes mark-up of Rs. 204,485,615 (2009: Rs. 49,331,932) on short term loan given to ANL. See note 28.

This represents short term loan to ANL and carries mark-up at 18% per annum (2009: 18% per annum).

Rupees Rupees

Note 2010 2009

Rupees Rupees

Note 2010 2009

Rupees Rupees

Note 2010 2009


31 SALES - Net

Sale of fertilizers

Own-manufactured 5,519,207,621

5,049,064,585

Trading stock 6,016,756,608

7,430,863,921

Other products 20,861,694

22,593,768

11,556,825,923

12,502,522,274

Sales tax (2,877,475)

(3,116,382)

Commission and brokerage (55,275,288)

(2,761,248)

11,498,673,160

12,496,644,644

32 COST OF SALES

Raw material consumed 32.1 712,074,637

409,047,587

Salaries, wages and benefits 32.2 390,507,157

326,499,928

Fuel and power 294,187,570 285,370,826 Stores, spares and loose tools consumed 270,623,681

356,139,306

Traveling, conveyance and entertainment 8,599,290

3,780,045

Rent, rates and taxes 1,717,577

755,797

Insurance 86,564,070

62,630,150

Repair and maintenance 12,896,834

12,764,799

Research and development 482,277

951,050

Depreciation 442,938,214

373,070,410

Printing and stationery 1,342,329

1,243,905

Communication 5,358,050

4,120,566

Handling charges 13,212,746

6,669,223

Others 51,589,404

47,120,536

Cost of goods manufactured 2,292,093,836

1,890,164,128

Finished goods


11,906,510

As at end of the year (4,698,308)

(3,950,687)

(747,621)

7,955,823

Cost of goods sold - own manufactured 2,291,346,215

1,898,119,951

Cost of goods sold - trading stock

- Cost of purchase including ancillary costs 6,160,192,105

6,392,603,287

6,160,192,105

6,392,603,287

8,451,538,320

8,290,723,238

32.1 This represents natural gas consumed.

32.2 These include charge in respect of employees retirement benefits amounting to Rs. 3,994,740 ( 2009: Rs. 478,376) and Rs. 10,725,121 (2009: Rs. 8,894,556) on

account of gratuity and provident fund respectively.

Rupees Rupees

Note 2010 2009


33 SELLING AND DISTRIBUTION EXPENSES

Salaries and benefits 33.1 50,456,903

38,801,014

Freight and other expenses 220,248,978

173,131,186


1,123,950

Traveling 21,504,975

1,830,140

Advertisement and marketing 6,874,455

6,178,359


8,660,588

Vehicle running and maintenance 1,035,379

1,464,850

Printing and stationery 461,464

372,724

Insurance --

768,140

Security services 6,090,599

6,890,000

Miscellaneous 7,064,667

3,510,132

324,409,438

242,731,083

33.1

34 ADMINISTRATIVE AND GENERAL EXPENSES


82,132,217


11,070,787


2,185,033


1,414,142


2,831,591

Legal and professional charges 34.2 31,710,307

26,033,162


2,520,529

Guest house expenses 1,622,255

904,488

Head office expenses 20,150,142

21,703,500


9,516,766

Others 14,282,151

10,675,848

209,452,417

170,988,063

34.1 These include charge in respect of employees retirement benefits amounting to Rs. 673,255 (2009: Rs. 63,205) and Rs. 2,404,592 (2009: Rs. 1,678,819) on


These include charge in respect of employees retirement benefits amounting to Rs. 363,798 ( 2009: Rs. 20,640) and Rs. 1,696,056 (2009: Rs. 1,283,502) on


Rupees Rupees

Note 2010 2009

Rupees Rupees

Note 2010 2009


34.2 These include following in respect of auditors' remuneration.

Annual statutory audit 1,100,000 750,000

Report on consolidated financial statements 200,000 --

Review report under Code of Corporate Governance 50,000 --

Interim audits and certifications 840,000 400,000

Out of pocket expenses 35,000 30,000

2,225,000 1,180,000

35 FINANCE COST

Interest / mark-up on:

loan from associates 61,916,790 40,782,670

redeemable capital 35.1 1,433,788,162 1,438,509,237

long term finances 35.2 430,502,669 305,665,137

exchange Loss 277,099,817 249,714,693

liabilities against assets subject to finance lease 47,209,745 25,739,672

payable to provident fund trust 1,775,904 --

short term borrowings 862,782,491 891,834,457

3,115,075,578 2,952,245,866

Borrowing costs capitalized (831,293,956) (318,937,000)

2,283,781,622 2,633,308,866

Amortization of transaction costs 10.6 29,802,450 --

Bank charges and commission 114,198,637 46,651,179

2,427,782,709 2,679,960,045

35.1

35.2 This includes mark-up of Rs. 61,916,790 (2009: Rs. 38,028,000) on long term loan from associates.

Note 2010 2009

Rupees Rupees

36 NET OTHER INCOME / (EXPENSES)

Net gains/(losses) on financial instruments

Return on bank deposits 8,386,161 8,955,749

Mark-up on loan to related party 36.1 155,200,304 49,417,305

Mark-up on advances to employees

Loss on sale of investments

1,009,854

--

966,101

(96,206,711)

164,596,319 (36,867,556)Other income/(expenses)

Workers' Profit Participation Fund (13,887,019) (23,397,269)

Workers' Welfare Fund (5,554,808) (11,378,290)

Gain on sale of property, plant and equipment 28,395,858 52,056,375

Donations 36.2 (10,000) --

(Loss)/income from experimental farm 36.3 (2,340,478) 1,766,566

Miscellaneous 1,608,400 11,118,513

8,211,953 30,165,895

172,808,272 (6,701,661)

This includes mark-up of Rs. 83,338,413 (2009: Rs. 121,541,000) on TFCs held by ANL. See note 10.5

Rupees Rupees

Note 2010 2009


36.1 This represents mark-up on short term loan given to ANL. See note 28.

36.2 None of the directors or their spouses had any interest in respect of these donations.

36.3 This includes depreciation amounting Rs. 242,151/-(2009: Rs. 85,761/-).

37 TAXATION

Current taxation 37.1 57,493,366 --

Deferred taxation (653,268,582) 220,491,869

Prior year 825,200 --

Net (income) / expense (594,950,016) 220,491,869

37.1

37.2

Unit

38 EARNINGS PER SHARE - BASIC AND DILUTED

There is no dilutive effect on basic earnings per share, which is based on:

Profit attributable to ordinary shareholders Rupees 853,248,564 885,048,685

Weighted average number of ordinary shares outstanding during the year No. of shares 392,430,000 392,430,000

Earnings per share - Basic and diluted Rupees 2.17 2.26

39 CASH GENERATED FROM OPERATIONS

Profit before taxation 258,298,548 1,105,540,554

Adjustments for non-cash and other items

Interest / markup expense 2,397,980,259 2,679,960,045

Amortization of transaction costs 29,802,450 --

Depreciation 445,964,200 375,676,700

Mark-up / Interest Income (156,210,158) (59,339,155)

Gain on sale of property, plant and equipment (28,395,858)

--

(52,056,375)

96,206,711

2,689,140,893 3,040,447,926

Operating profit before changes in working capital 2,947,439,441 4,145,988,480

Provision for current tax has been made in accordance with section 113 'Minimum tax on income of certain persons' of the Income Tax Ordinance, 2001 ('the

Ordinance). There is no relationship between tax expense and accounting profit as the provision for current taxation is based on turnover tax therefore no

numerical reconciliation has been presented.

Assessments upto and including tax year 2009 deemed to have been finalized.

Note

Rupees Rupees

2010 2009

2010 2009

Rupees Rupees

2010 2009



Changes in working capital

Increase in stores, spares and loose tools (496,783,248) (93,214,294)

Decrease in stock in trade 1,640,344,436 385,202,770

Decrease in trade receivables 529,744,794 (681,232,774)

Increase in advances, deposits, prepayments and other receivables (603,082,340) (129,799,390)

Decrease in due from subsidiary 282,913,125 --

Increase in long term advances (1,492,260) (5,345,415)

Increase in long term deposits (703,700) (5,227,721)

Increase in trade and other payables 2,095,426,973 (1,087,840,397)

3,446,367,780 (1,617,457,221)

Cash generated from operations 6,393,807,221 2,528,531,259

40 CASH AND CASH EQUIVALENTS

Cash and bank balances 30 76,242,043 277,592,136

76,242,043 277,592,136

41 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Nature of transaction Pricing mechanism

Sales Comparable uncontrolled price method

Purchases Comparable uncontrolled price method

Transfer of property, plant and equipment Net book value

Contribution to post employment benefit plan As per terms of the trust

Compensation of key management personnel As per terms of employment

Details of transactions and balances with related parties is as follows:

41.1 Transactions with related parties

41.1.1 Holding company

Mark-up income on short term loan 36.1 155,200,304 49,417,305

Mark-up expense on redeemable capital 35.1 83,338,413 94,320,978

Temporary loan given - net 28 10,630,855 440,376,611

41.1.2 Associates

Long term loan received -- 340,000,000

Redeemable capital -- 90,000,000

Mark-up on long term loan 35.2 61,916,790 40,782,670

Mark-up expense on redeemable capital 35.1 14,123,327 8,387,506

Transaction costs 70,000,000 --

Related parties from the Company's perspective comprise holding company, subsidiaries, associated undertakings, key management personnel (comprising the chief

executive and directors) and post employment benefit plans. The Company in the normal course of business carries out transactions with various related parties and

continues to have a policy whereby all such transactions are carried out at arm's length. Pricing for these transactions is determined as follows:

Rupees Rupees

Note 2010 2009

Rupees Rupees

Note 2010 2009


41.1.3 Subsidiary

Temporary loan - Net 28 (282,913,125)

357,771,285

41.1.4 Post employment benefit plans

Charge to profit or loss on account of

- provident fund trust 14,825,769

11,856,877

- gratuity trust 5,031,793

562,221

41.1.5 Key management personnel

41.2 Balances with related parties


Short term loan 28 451,007,466

440,376,611

Redeemable capital 10.5 599,520,000

599,760,000

Mark-up receivable 27.1 204,485,615

49,335,712

Mark-up payable 18.0 127,148,170

43,809,757

41.2.2 Associates

Long term loan 9 340,000,000

340,000,000


90,000,000

Mark-up payable 18 68,717,258

45,853,330


--

41.2.3 Subsidiary


357,771,285


Payable to provident fund trust 84,210,584

4,193,230

Payable to gratuity trust 14,073,414

9,041,621

42 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

The aggregate amount charged to profit or loss in respect of chief executive, directors and executives on account of managerial remuneration, perquisites and benefits,

and post employment benefits, and the number of such directors and executives is as follows:

Related parties includes associated group companies, directors, executives and key management personals. The remuneration paid to chief executive,

directors, executive and key management personal in terms of their employment is disclosed in note 42 to the financial statements.

Rupees Rupees

Note 2010 2009

Rupees Rupees

Note 2010 2009


Chief Executive Directors Executives


Managerial remuneration and allowances 13,200,000

3,081,250

108,383,907

Post employment benefits 753,036

161,602

5,595,040

13,953,036

3,242,852

113,978,947

Number of persons 1

2

66




--

103,763,354


--

5,544,755

14,255,565

--

109,308,109

Number of persons 1

--

91

42.1 The chief executive and certain executives are provided with free use of Company maintained car.

43 FINANCIAL INSTRUMENTS

43.1 Financial assets by class and category

Available Total

Loans and for sale financial

receivables financial assets assets


Long term investments --

4,463,069,207

4,463,069,207

Long term advances 30,881,917

--

30,881,917

Long term deposits 15,048,517

--

15,048,517

Trade receivables 229,460,227

--

229,460,227

Short term advances 8,469,954

--

8,469,954

Accrued mark-up 204,485,615

--

204,485,615

Due from related parties 525,865,626

--

525,865,626

Cash and bank balances 76,242,043

--

76,242,043

1,090,453,899

4,463,069,207

5,553,523,106

2010

2009

2010


Available Total




Long term investments --

1,675,785,669

1,675,785,669


--

30,881,917


--

14,344,817


--

798,147,896


--

6,913,381


--

49,335,712


--

798,147,896


--

277,592,136

1,975,363,755

1,675,785,669

3,651,149,424

43.2 Financial liabilities by class and category

Financial Financial

liabilities at liabilities at

amortized cost amortized cost

Loan from associates 9 340,000,000

340,000,000


10,353,448,233

Long term finances 11 3,212,735,482

1,856,398,302


276,518,057

Long term payables 13 31,135,199

31,135,199

Short term borrowings 16 4,787,718,650

2,103,084,646

Trade creditors 17 214,847,262

72,803,655

Bills payable 17 2,459,112,973

934,826,716

Accrued liabilities 17 175,412,809

31,043,348

Security deposits and retention money 17 33,360,861

44,138,751

Other payable 17 24,652,833

13,269,282

Mark-up accrued on borrowings 18 1,266,233,127

388,481,059

23,145,973,662

16,445,147,248

43.3 Fair values of financial instruments

43.3.1 Methods of determining fair values

Fair value is the amount for which an asset could be exchanged or liability be settled between knowledgeable willing parties in an arm's length transaction. As at

the reporting date, fair values of all financial instruments are considered to approximate their book values.

Fair values of financial instruments for which prices are available from the active market are measured by reference to those market prices. Fair values of

financial assets and liabilities with no active market are determined by discounting estimated future cash flows at effective interest rate; the rate that

exactly discounts estimated future receipts/payments through expected life of the financial assets/liabilities or, when appropriate, a shorter period, to the

net carrying amount of the financial assets/liabilities, using prices from observable current market transactions.

2009

Rupees Rupees

Note 2010 2009

43.3.2 Discount/interest rates used for determining fair values

44 FINANCIAL RISK EXPOSURE AND MANAGEMENT

44.1 Credit risk

Exposure to credit risk

Loans and deposits 15,048,517

14,344,817

Trade debts - considered good 229,460,227

759,205,021



49,335,712

Due from holding company-unsecured, considered good 451,007,466

440,376,611

Receivable from subsidiaries 74,858,160

357,771,285


9,618,843

Cash and bank balances 75,798,485 277,173,516

1,077,530,560 1,907,825,805

Credit quality and impairment

The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The Board of Directors has developed a risk policy

that sets out fundamentals of risk management framework. The risk policy focuses on unpredictability of financial markets, the Company’s exposure to risk of adverse

effects thereof and objectives, policies and processes for measuring and managing such risks. The management team of the Company is responsible for administering

and monitoring the financial and operational financial risk management throughout the Company in accordance with the risk management framework.

The Company’s exposure to financial risks, the way these risks affect the financial position and performance, and forecast transactions of the Company and the manner

in which such risks are managed is as follows:

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). These

risks affect revenues, expenses and assets and liabilities of the Company.

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss, without taking

into account the fair value of any collateral. Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or have

similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economics, political or other

conditions. Concentrations of credit risk indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve as at the reporting date plus an

adequate credit spread.

Credit risk of the Company arises principally from the trade debts, trade deposits and other receivables. The carrying amount of financial assets represents the

maximum credit exposure. To reduce the exposure to credit risk the Company has developed a formal approval process whereby credit limits are applied to its

customers. The management continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful

of recovery.

Credit quality of financial assets is assessed by reference to external credit ratings, where available, or historical information about the counterparty default rates.

All counterparties, with the exception of customers, have external credit ratings determined various credit rating agencies and other regulatory authorities. Credit

quality of customer is assessed by reference to historical default rates.


Rupees Rupees

2010 2009

Counterparties with external credit ratings

Counterparties without external credit ratings

Credit risk management

44.2 Liquidity risk

Carrying Contractual One year One to More than

amount cash flows or less three years three years


Subordinated loan - Secured 340,000,000

579,962,685

53,244,000

106,633,874

420,084,811

Redeemable capital - Secured 10,361,895,933

14,332,109,474

3,395,740,381

6,172,784,136

4,763,584,957

Long term loan-Secured 3,212,735,482

4,997,244,394

929,291,866

2,176,707,282

1,891,245,246

Liability against finance lease assets 238,868,533

346,786,634

109,872,041

118,457,296

118,457,297

Long term payable 31,135,199

31,135,199

--

--

31,135,199

Creditors, accrued and other liabilities 3,245,423,196

3,245,423,196

3,245,423,196

--

--

Short term borrowing - Secured 4,787,718,650

4,807,394,206

4,807,394,206

--

--

Mark-up accrued on borrowings 1,266,233,127 1,266,233,127 1,266,233,127 -- --

23,484,010,120

29,606,288,915

13,807,198,817

8,574,582,588

7,224,507,510





666,808,000

54,468,000

108,936,000

503,404,000


16,085,183,958

2,399,061,016

5,796,205,830

7,889,917,112


2,870,291,708

382,077,312

1,050,452,752

1,437,761,644


397,425,779

88,022,603

154,701,588

154,701,588


31,135,199

--

--

31,135,199


1,149,996,223

1,149,996,223

--

--


2,111,727,460

2,111,727,460

--

--

Mark-up accrued on borrowings 388,481,059

390,077,557

390,077,557

--

--

16,499,061,719

23,702,645,883

6,575,430,170

7,110,296,170

10,016,919,543

2009

Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk arises because of the possibility

that the Company could be required to pay its liabilities earlier than expected or difficulty in raising funds to meet commitments associated with financial liabilities

as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities

when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation, The following are

the contractual maturities of financial liabilities, including interest payment and excluding the impact of netting agreements:

The Company’s financial assets does not carry significant credit risk with the exception of trade receivables, which is also very limited. In this respect, company

manages its risk by selling on advance payments or bank guarantees. Moreover, the Company avoids any significant exposure to a single customer.

2010

These include trade receivables. The Company is exposed to credit risk in respect of trade receivables. Credit quality of trade receivables is assessed based on

historical default rates and present ages. Based on the historical data of the customers, company believes that no impairment allowance is necessary in respect

of trade debts.

These include bank deposits and accrued return thereon, deposits against finance leases and short term loans to related party. These are neither past due nor

impaired. Credit risk is considered minimal since the counterparties have reasonably high credit ratings as determined by various credit rating agencies. Due to

long standing business relationships with these counterparties and considering their strong financial standing, management does not expect non-performance by

these counterparties on their obligations to the Company.



Post balance sheet Total

As of (from July 01 to overdues as of

Nature of liability Note reporting date September 30, 2010) September 30, 2010


Bills payable 44.2.1 1,263,922,616

878,175,053

2,142,097,669

Markup on working capital Lines 44.2.2 118,724,767

266,355,589

385,080,356

Short term principle repayments 44.2.3 804,174,567

777,399,523

1,581,574,090

Markup on long term loans 44.2.4 308,154,002

608,726,006

916,880,008

Principal payable on long term loans 44.2.5 258,270,750

851,978,431

1,110,249,181

2,753,246,702

3,382,634,602

6,135,881,304

44.2.1

44.2.2

44.2.3

44.2.4

44.2.5

Overdues

The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark-up rates effective as at 30 June. The rates of mark-

up have been disclosed in note 9,10,11,12 and 16 to these financial statements.

Liquidity risk management

The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meeting its liabilities when due,

under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company monitors cash flow requirements and produces cash flow projections for the short and long term. Typically, the Company ensures that it has

sufficient cash on demand to meet expected operational cash flows, including servicing of financial obligations. This includes maintenance of balance sheet

liquidity ratios, debtors and creditors concentration both in terms of overall funding mix and avoidance of undue reliance on large individual customer. The

Company also maintains various lines of credit with banking companies.

The represents amount due on account of redeemable capital and long term loans provided to the company for urea revamp project and acquisition of the

company and its subsidiary Hazara Phosphate Fertilizers (Pvt.) Ltd. Due to increase in markup rates and massive devaluation of pak rupee, significant

funds have been routed to markup and project procurements. Therefore, Company anticipated the cash flow shortfall for principal repayment and

discussed the matter with lenders. Considering the situation, it is proposed to allow 2 years of grace period for principal repayment from the existing due

date. The lenders, in this context, has agreed in principal to the restructuring proposal. The company is in final stages of execution of a formal agreement

to this effect.

The Company, during the year and subsequently, faced operational issues due to extended gas load shedding in winter and gas curtailment by Government of

Pakistan for shifting the gas towards power sector to reduce electricity load shedding. Additionally, the Company has faced massive devaluation of the Pak

Rupee over the past couple of years which increased urea project cost manifold, with high interest/mark-up rates resulted in substantially high finance costs on

project finance and acquisition loans. This has perpetuated temporary, liquidity issues. As result, the following liabilities as of balance sheet date and as of date

the financial statements are authorized for issue, are overdue. The details are as follows:

This represents interest on redeemable capital and long term loans provided to the company for revamp project and acquisition of the company and its

subsidiary and is outstanding as at the reporting date.

This represents amount due on account of finance provided for the retirement of letter of credits (LC) established for purchase of raw material and trading

product. The Company is in discussion with the lenders for conversion of these loans to long term loan. The lenders, in this context, has agreed in

principal to the Company’s request. The company is in final stages of execution of a formal agreement to this effect.

This represents amount due on account of various letter of credits (LC) established for purchase of raw material and trading product. The Company is in

discussion with the lenders for conversion of these LCs to long term loan. The lenders, in this context, has agreed in principal to the Company’s request,

and LCs are under restructuring. The company is in final stages of execution of a formal agreement to this effect. Rest of the LCs are in process of

payment and further used for procurement of raw materials essential for smooth operations of the company.

This represents interest payable on working capital finance provided to the company for smooth flow of working capital.


44.3 Market risk

Currency risk

Interest rate risk

Cash flow sensitivity analysis for variable rate instruments

Price risk

45 CAPITAL MANAGEMENT

Unit 2010 2009

Total debt Rupees 14,153,499,948

12,826,364,592

Total equity Rupees 10,799,508,128

7,130,192,805

Total capital employed 24,953,008,076

19,956,557,397

Gearing %age 57% 64%

The management has taken up this matter with the providers of debt finance for re-profiling of the existing liabilities as more fully explained in note 2.2 to the

financial statements.

Financial Liabilities include Rs.2,459,112,973 (2009: Rs.934,826,716) which are subject to currency risk.

Currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign rates. Currency risk arises mainly

from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies.

Interest rate risk represents the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Financial liabilities includes balances of Rs.18,871,218,598 (2009: Rs.14,929,449,238) which are subject to interest rate risk. Applicable interest rates for financial

liabilities have been indicated in respective notes.

Financial assets includes balances of Rs.451,007,466 (2009: Rs. 440,376,611 ) which are subject to interest rate risk. Applicable interest rates for financial assets

have been indicated in respective notes.

The company is not exposed to price risk as the fair value of its financial institution is not based on market prices.

There were no changes in the Company's approach to capital management during the year. Further the Company is not subject to externally imposed capital

requirements, except those, related to maintenance of debt covenants, commonly imposed by the providers of debt finance which the Company remains compliant with

as at the reporting date.

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Board of Directors monitors the return on capital and level of dividends to ordinary shareholders. The Company seeks to keep a balance between the higher return

that might be possible with higher level of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using the

gearing ratio which is debt divided by total capital employed. Debt comprises, redeemable capital, long term finances and liabilities against assets subject to finances

lease, including current maturity. Total capital employed includes total equity as shown in the balance sheet, including surplus on revaluation of property, plant and

equipment and subordinated loan, plus debt. The Company's strategy is to maintain an optimal capital structure in order to minimize cost of capital. Gearing ratio of the

Company as at the reporting date is as follows:

A change of 100 basis point in interest rates at the reporting date would have increased / (decreased) profit by amounts presented below. The analysis assumes

that all other variables, in particular foreign exchange rates, remain constant. The impact of change of 100 basis point would have increased or decreased profit

by Rs. 120 Million (2009 : 94 million).


2010 2009

Rupees Rupees

46 RESTRICTION ON TITLE, AND ASSETS PLEDGED AS SECURITY

Mortgages and charges

Hypothecation of stocks and movables 25,248,096,666

23,730,096,666

Hypothecation of book debts and receivables 25,248,096,666

23,730,096,666

Mortgage over land and building 19,467,333,333

19,467,333,333

Hypothecation of plant and machinery 22,380,999,333

21,966,999,333

47 OPERTING SEGMENTS

These financial statements have been prepared on the basis of single reportable segments.

47.1

47.2

47.3

47.4

48 PLANT CAPACITY AND ACTUAL PRODUCTION

Unit 2010 2009

Rupees Rupees

Rated capacity Metric tonnes 346,500

346,500

Actual production Metric tonnes 369,933

379,105

Production efficiency %age 107

109

49 DATE OF AUTHORIZATION FOR ISSUE

50 GENERAL

Figures have been rounded off to the nearest rupee.

Comparative figures have been rearranged, where necessary for the purpose of comparison. There were no significant reclassifications during the year.

These financial statements were authorized for issue on October 09, 2010 by the Board of Directors of the Company.

One customer of the Company accounts for 6.63% (2009: 8.87%) of gross sales of the Company for the year.

100 % (2009: 100%) of the gross sales of the Company are made to customers located in Pakistan.

All non-current assets of the Company at 30 June 2010 are located in Pakistan.

Revenue from sales of fertilizers represents 99.82% (2009: 99.82%) of the gross sales of the Company.


This page has been left blank intentionally

Consolidated Financial Statements

FARUQ ALI & CO. CHARTERED ACCOUNTANTS

22 2- A, Ka ra ch i Me mo n

Cooperative Housing Society,

Ju st ic e In am ul la h Ro ad ,

Near Hill Park, Karachi.74800.

Em ai l: fa ac @c yb er .n et .p k

Telephone

Fax

: (021) 34301966

: (021) 34301967

: (021) 34301968

: (021) 34301969

: (021) 34301965

Dated: October 09, 2010Place: Lahore

Engagement Partner: S. Naseem uz Zaman

CHARTERED ACCOUNTANTS

Auditors' Report to the Members

Consolidated Balance Sheet as at June 30, 2010

Note 2010 2009

Rupees Rupees

EQUITY AND LIABILITIES

Authorized share capital

Share capital and reserves

Issue, subscribed and paid-up capital

Reserves

Accumulated profit

Surplus on revaluation of property, plant and equipment

Loan from associates - Unsecured, Subordinated

Non-current liabilities

Redeemable capital - Secured

Long term finances - Secured

Liabilities against assets subject to finance lease - Secured

Long term payables - Unsecured

Deferred taxation

Current liabilities

Current maturity of non-current Liabilities

Short term borrowings

Trade and other payables

Mark-up accrued on borrowings

Contingencies and commitments

5 12,000,000,000

12,000,000,000

6 3,924,300,000

3,924,300,000

7 9,000,000

9,000,000

4,738,565,770

3,824,131,963

8,671,865,770

7,757,431,963

8 4,263,591,515

--

9 340,000,000

340,000,000

10 8,186,009,933

10,137,858,233

11 2,643,985,482

1,793,898,302

12 176,659,033

233,936,515

13 31,135,199

31,135,199

14 4,080,394,717

2,495,162,975

15,118,184,364

14,691,991,224

15 2,813,312,542

324,018,797

16 4,787,718,650

2,103,084,646

17 3,682,738,510

1,531,042,212

18 1,266,233,127

388,481,059

12,550,002,829

4,346,626,714

19 --

--

40,943,644,478

27,136,049,901


Lahore CHIEF EXECUTIVE

Note 2010 2009

Rupees Rupees

ASSETS

Non-current assets

Property, plant and equipment

Intangible assets

Long term advances

Long term deposits - Unsecured, considered good

Current assets

Stores, spares and loose tools

Stock in trade

Trade receivables - Unsecured, considered good


Due from related parties - Unsecured, considered good

Current taxation

Cash and bank balances

20 33,878,586,040

18,649,196,450

21 2,567,310,828

2,567,310,828

22 30,881,917

29,389,657

23 18,237,248

16,390,492

36,495,016,033

21,262,287,427

24 1,273,258,490

748,919,524

25 413,608,321

2,289,562,552

311,346,429

780,726,403

26 1,753,272,532

1,128,746,212

27 451,007,466

440,376,611

28 159,638,163

191,945,680

29 86,497,044

293,485,492

4,448,628,445

5,873,762,474

40,943,644,478

27,136,049,901

DIRECTOR

Consolidated Profit and Loss Accountfor the year ended June 30, 2010

Sales - Net

Cost of sales

Gross profit

Selling and distribution expenses

Administrative and general expenses

Operating profit

Finance cost

Net other income/(losses)

Profit before taxation

Taxation

Profit after taxation

Earnings per share - Basic and diluted


30 12,854,550,981

12,997,800,257

31 (9,696,606,178)

(8,184,905,104)

3,157,944,803

4,812,895,153

32 (383,343,080)

(272,795,774)

33 (259,049,734)

(214,741,595)

2,515,551,989

4,325,357,784

34 (2,429,031,281)

(2,698,072,724)

35 181,438,368

280,837,022

267,959,076

1,908,122,082

36 617,691,510

(117,168,782)

885,650,586

1,790,953,300

37 2.26

4.56

Note 2010 2009

Rupees Rupees


for the year ended June 30, 2010

Consolidated Statement of Other Comprehensive Income

Profit for the year

Other comprehensive income:

Net change in fair value of available-for-sale financial assets

Net loss on cash flow hedges

Revaluation of property, plant and equipment


Incremental depreciation transferred from surplus on revaluation of property, plant and equipment


Component of comprehensive income not reflected in equity - net of tax

Total comprehensive income for the year


885,650,586

1,790,953,300

--

--

--

(100,014,269)

6,560,395,944

--

(2,268,021,208)

--

4,292,374,736

--

44,281,878

--

(15,498,657)

11,555,812

28,783,221

11,555,812

5,206,808,543

1,702,494,843

(4,292,374,736)

--

914,433,807

1,702,494,843

2010 2009

Rupees Rupees


Consolidated Cash Flow Statement for the year ended June 30, 2010

CASH FLOW FROM OPERATING ACTIVITIES

Cash generated from operations

Interest/markup paid

Interest Received

Taxes paid

Net cash flow from / (used in) operating activities

CASH FLOW FROM INVESTING ACTIVITIES

Capital expenditure

Proceeds from disposal of property, plant and equipment

Loan to related party

Investment in subsidiary

Proceeds from disposal of short term investments

Net cash used in investing activates

CASH FLOW FROM FINANCING ACTIVITIES

Long term finances obtained

Loan from associates

Issue of term finance certificates

Redemption of term finance certificates

Repayment of liabilities against assets subject to finance lease

Transaction costs on issue of term finance certificates

Net increase in short term borrowings

Dividend paid

Net cash from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents as at beginning of the year

Cash and cash equivalents as at end of the year


38 6,509,805,291

1,967,076,107

(1,521,476,758)

(2,386,699,426)

1,060,256

11,708,475

(32,790,440)

(152,240,444)

4,956,598,349

(560,155,288)

(9,147,921,716)

(3,851,639,714)

40,492,195

52,796,432

(10,630,855)

(440,376,611)

--

(1,356,667,637)

-- 738,222,249

(9,118,060,376)

(4,857,665,281)

1,356,337,180

1,856,398,302

--

340,000,000

--

2,031,962,744

(7,054,750)

--

(65,142,855)

195,213,955

(14,300,000)

--

2,684,634,004

511,413,878

--

(588,645,000)

3,954,473,579

4,346,343,879

(206,988,448)

(1,071,476,690)

293,485,492

1,364,962,182

39 86,497,044

293,485,492

Note 2010 2009

Rupees Rupees


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--

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2,61

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7,85

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3,58

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--

--

--

--

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1,79

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--

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7,43

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Notes to and forming part of Financial Statements Consolidated for the year ended June 30, 2010

1 REPORTING ENTITY

The Group comprises the following companies

Agritech Limited (formerly Pak American Fertilizers Limited) ('AGL') - Parent Company

1.1 Listing of Company's Shares on Karachi Stock Exchange (Guarantee) Limited

Hazara Phosphate Fertilizers (Private) Limited ('HPFL') - Subsidiary

2 BASIS OF PREPARATION

2.1 Statement of compliance

2.2

HPFL was incorporated on June 11, 1985 as a Private Limited Company under the Companies Ordinance, 1984 and was a wholly owned subsidiary of National

Fertilizer Corporation of Pakistan (Private) Limited ("NFC"), a Government owned Corporation, until November 28, 2008. Subsequently, 100% shares of HPFL were

acquired by Agritech Limited (formerly Pak-American Fertilizers Limited) as a part of privatization process of the Government of Pakistan as stipulated in the Share

Purchase Agreement dated November 28, 2008. The registered office of HPFL is situated at Haripur. The principal business of HPFL is the production and sale of

Granulated Single Super Phosphate ("GSSP") fertilizer.

Agritech Limited (formerly Pak American Fertilizers Limited) was incorporated on June 11, 1985 as an unlisted Public Limited Company under the Companies

Ordinance, 1984 and was a wholly owned subsidiary of National Fertilizer Corporation of Pakistan (Private) Limited ('NFC'), a Government owned Corporation, until

July 15, 2006. Subsequently, 100% shares of the Company were acquired by Azgard Nine Limited ('ANL') as a part of privatization process of the Government of

Pakistan as stipulated in the Share Purchase Agreement dated July 15, 2006. The registered office of the Company is situated Ismail Aiwan-e-Science, Off Sharah -e-

Roomi, Lahore. The principal business of the Company is the production and sale of urea fertilizer.

Appropriateness of Going Concern Assumption - Continuing Operations' As already mentioned above, the management is confident and does not envisage any

difficulty in generating and arranging necessary finances for continuing operations of the company and in meeting its financial obligations. The fertilizer sector is

likely to remain robust in coming years. The trend indicates that the sales will continue to grow with improved operational profitability inspite of high finance costs

and other factors.

The worldwide and nationwide recessionary trends and other economic conditions have perpetuated general credit and liquidity crisis. These circumstances are

being faced by all the industrial and business sectors in Pakistan. The Group, during the year, also faced operational issues due to extended gas load shedding

in winter and gas curtailment by Government of Pakistan for shifting the gas towards power sector to reduce electricity load shedding. Additionally, the Group

has faced massive devaluation of the Pak Rupee over the past couple of years which increased urea project cost manifold, with high interest/mark-up rates

resulting in substantially high finance costs on project finance and acquisition loans. This has perpetuated temporary, liquidity issues, as referred to in note 44.2

to the financial statements.

Financial Liabilities Re-profiling

During the year ANL (the holding company) has divested its 20.13% shares comprising 79,006,816 Ordinary shares of Rs.10 each through private placement

and public offering. Accordingly company's shares have been listed on Karachi Stock Exchange (KSE) w.e.f. April 12, 2010 vide KSE Notification No. KSE/N-

1940.

These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan and the requirementsofCompanies Ordinance, 1984. Approved accounting standards comprise of such International Financial Reporting Standards ("IFRSs") issued by the

International Accounting Standards Board as notified under the provisions of the Companies Ordinance, 1984, provisions of and directives issued under the

Companies Ordinance, 1984. In case requirements differ, the provisions of or directives under the Companies Ordinance, 1984 prevail.

The management has taken up this matter with the providers of debt finance for re-profiling of the existing liabilities. Majority of the lenders have given their

consent and the company is in final stage of execution of agreements. The management of the Group is confident that the above measures coupled with the

Group's strong capital base of Rs. 13.3 billion (including surplus on revaluation of property, plant and equipment and subordinated loan), continuing profitable

trends (with accumulated profits of Rs. 4.7 billion as at the reporting date) and expected improvement in operational profitability and supply of gas and

accordingly the production will improve the liquidity position. The management of the Group do not envisage any difficulty in generating and arranging necessary

finances and in meeting its financial obligations when due, and for continuing profitable operations of the Group.


accounting policies

on historical

judgements

Estimates and

revised and

effect on the

value and/or

measured at

accounted for on

2.3 Basis of measurement

2.4 Judgements, estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of

and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions and judgements are based

experience and various other factors that are believed to be reasonable under the circumstances, the result of which forms the basis of making

about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is

in any future periods affected. Judgements made by management in the application of approved accounting standards that have significant

financial statements and estimates with a risk of material adjustment in subsequent years are as follows:

These financial statements have been prepared under the historical cost convention except for certain financial instruments measured at fair

amortized cost, employees retirement benefits under defined benefit plan at present value and certain items of property, plant and equipment

revalued amounts. In these financial statements, except for the amounts reflected in the cash flow statement, all transactions have been

accrual basis.

2.4.1 Depreciation method, rates and useful lives of property, plant and equipment

2.4.2 Recoverable amount assets/cash generating units and impairment

2.4.3 Taxation

2.4.4 Provisions

2.4.5 Revaluation of property, plant and equipment

2.4.6 Obligations under defined benefit plans

2.4.7 Fair values of financial instruments with no active market

2.5 Functional currency

Fair values of financial assets and financial liabilities with no active market are determined by discounting estimated future cash flows at effective

interest rate; the rate that exactly discounts estimated future receipts/payments through expected life of the financial assets/liabilities or, when

appropriate, a shorter period, to the net carrying amount of the financial assets/liabilities.

These financial statements have been prepared in Pak Rupees which is the Group's functional currency.

The management of the Group reassesses useful lives, depreciation method and rates for each item of property, plant and equipment annually by

considering expected pattern of economic benefits that the group expects to derive from that item and the maximum period upto which such benefits are

expected to be available.

Obligations under defined benefit plans are determined by independent actuaries based on various assumptions including expected rate of increase in

salaries, expected remaining working lives of employees, expected return on plan assets and discount rates.

The management of the Group reviews carrying amounts of its assets and cash generating units for possible impairment and makes formal estimates of

recoverable amount if there is any such indication.

The Group takes into account the current income tax law and decisions taken by appellate authorities while estimating its tax liabilities.

Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued amounts of non-depreciable items are

determined by reference to local market values and that of depreciable items are determined by reference to present depreciated replacement values.

Provisions are based on best estimate of the expenditure required to settle the present obligation at the reporting date, that is, the amount that the

Group would rationally pay to settle the obligation at the reporting date or to transfer it to a third party.


3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Basis of consolidation

3.2 Property, plant and equipment

3.3 Surplus / deficit arising on revaluation of property, plant and equipment

3.4 Capital work in progress

Capital work in progress is stated at cost less identified impairment loss, if any, and includes the expenditures on material, labour and appropriate overheads

directly relating to the construction, erection or installation of an item of property, plant and equipment. These costs are transferred to property, plant and

equipment as and when related items become available for intended use.es, if any.

3.5 Goodwill acquired in business combination

Goodwill acquired in business combination represents future economic benefits arising from assets that are not capable of being individually identified and

separately recognized. Goodwill is initially recognized at cost which is determined as the excess of the cost of business combination over the Group’s interest in

the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Subsequent to initial recognition, goodwill is measured at cost less

accumulated impairment losses, if any.

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses with the exception of freehold

land, which is measured at revalued amount, building on freehold land, residential colony assets and, plant and machinery which are measured at revalued

amount less accumulated depreciation and capital work in progress which is measured at cost less accumulated impairment losses. Cost comprises purchase

price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, and includes other costs directly attributable to

the acquisition or construction including expenditures on material, labour and overheads directly relating to construction, erection and installation of operating

fixed assets. Expenditure incurred on capital work in progress are transferred to operating fixed assets when related items become available for use.

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating

policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights, if any, that are currently exercisable are taken into

account. However, potential voting rights that are not currently exercisable are not included in determination of the proportions of profit or loss and changes in

equity attributable to the Group.

The financial statements of the subsidiary are included in the consolidated financial statements from the date that control commences until the date control

ceases. The accounting policies of subsidiaries are changed when necessary to align them with those adopted by the Group. The assets and liabilities of the

subsidiaries are consolidated on a line-by-line basis and the carrying amount of the investment in subsidiaries is eliminated against the subsidiaries’ share capital

and pre-acquisition reserves. All intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions are

eliminated in full in preparing the consolidated financial statements.

Parts of an item of property, plant and equipment having different useful lives are recognized as separate items.

Major renewals and improvements to an item of property, plant and equipment are recognized in the carrying amount of the item if it is probable that the

embodied future economic benefits will flow to the Group and the cost of renewal or improvement can be measured reliably. The cost of the day-to-day servicing

of property, plant and equipment are recognized in profit or loss as incurred.

The Group recognizes depreciation in profit or loss by applying straight line method over the useful life of each item of property, plant and equipment as specified

in note to the financial statements. Depreciation on additions to property, plant and equipment is charged from the month in which the item becomes available

for use. Depreciation is discontinued from the month in which it is disposed or classified as held for disposal.

An item of property, plant and equipment is de-recognized when permanently retired from use. Any gain or loss on disposal of property, plant and equipment is


Surplus arising on revaluation of items of property, plant and equipment is recognized on balance sheet after reversing deficit relating to the same item

previously recognized in profit or loss, if any. Deficit arising on revaluation is recognized in profit or loss after reversing the surplus relating to the same item

previously recognized on balance sheet, if any. An amount equal to incremental depreciation, being the difference between the depreciation based on revalued

amounts and that based on the original cost, net of deferred tax, if any, is transferred from surplus on revaluation of property, plant and equipment to

accumulated profit every year.


3.6 Stores, spares and loose tools

3.7 Stock in trade

Finished goods

Trading stock

Stock in transit

3.8 Employee benefits

3.8.1 Short-term employee benefits

3.8.2 Post-employment benefits

3.8.2 (a) Defined contribution plan

3.8.2 (b) Defined benefit plan

The Group recognizes the undiscounted amount of short term employee benefits to be paid in exchange for services rendered by employees as a

liability after deducting amount already paid and as an expense in profit or loss unless it is included in the cost of inventories or property, plant and

equipment as permitted or required by the approved accounting standards. If the amount paid exceeds the undiscounted amount of benefits, the excess

is recognized as an asset to the extent that the prepayment would lead to a reduction in future payments or cash refund.

These are generally held for internal use and are valued at cost. Cost is determined on the basis of moving average except for items in transit, which are valued

at invoice price plus related expenses incurred up to the reporting date. For items which are considered obsolete, the carrying amount is written down to nil.

These are valued at lower of cost and net realizable value. Cost is determined using the following basis:

Average manufacturing cost in relation to finished goods consists of direct material, labour and a proportion of appropriate manufacturing overheads.

Net realizable value signifies the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to

make the sale.

Details of scheme are referred to in note 17.1 to the financial statements.

Actuarial gains and losses are recognized using the "10% corridor approach" as set out by International Accounting Standard 19 - Employee

Benefits.

AGL operates an approved defined contributory provident fund for its employees excluding expatriates. Equal contributions are made by

AGL and employees at 8.33% of basic salary. Interest is charged @ 8.33% on the outstanding fund balance and is recognized in profit or

loss.

HPFL operates an approved defined contributory provident fund for its employees excluding expatriates. Equal contributions are made by

HPFL and employees at 8.33% of basic salary. Interest is charged @ 8.33% on the outstanding fund balance and is recognized in profit or

loss.

PAFL operates a funded gratuity scheme (defined benefit plan) for all its permanent employees who have completed minimum qualifying

period of service excluding employees who were members of the discontinued pension scheme. Liability is adjusted annually to cover the

obligation and the adjustment is charged to profit or loss. The determination of obligation under the scheme requires assumptions to be made

of future outcomes, the principal ones being in respect of increases in remuneration, expected remaining useful lives of employees and

discount rates. These assumptions are determined by independent actuaries.

The amount recognized in the balance sheet represents the present value of defined benefit obligation less fair value of plan assets as

adjusted for unrecognized actuarial gains and losses.


3.9 Financial instruments

3.9.1 Recognition

3.9.2 Classification and measurement

3.9.2 (a) Loans and receivables

3.9.2 (b) Available for sale financial assets

3.9.2 (c) Financial liabilities at amortized cost

3.9.3 De-recognition

3.9.4 Off-setting

3.9.5 Regular way purchases and sales of financial assets

3.10 Ordinary share capital

3.11 Redeemable capital

Financial assets are de-recognized if the Group's contractual rights to the cash flows from the financial assets expire or if the Group transfers the

financial asset to another party without retaining control or substantially all risks and rewards of the asset. Financial liabilities are de-recognized if the

Group's obligations specified in the contract expire or are discharged or cancelled. Any gain or loss on de-recognition of financial assets and financial

liabilities is recognized in profit or loss.

A financial asset and a financial liability is offset and the net amount reported in the balance sheet if the group has legally enforceable right to set-off the

recognized amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Ordinary share capital is recognized as equity. Transaction costs directly attributable to the issue of ordinary shares and share options are recognized as

deduction from equity.

Redeemable capital, including embedded equity component existing due to conversion options, if any, is recognized as 'loans and borrowings', in accordance

with the interpretation of the provisions of the Companies Ordinance, 1984, including those pertaining to implied classification of redeemable capital.

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and

receivables. Assets in this category are presented as current assets except for maturities greater than twelve months from the reporting date,

where these are presented as non-current assets. The particular measurement methods adopted are disclosed in the individual policy

statements associated with each instrument.

Available for sale financial assets are non-derivative financial assets that are designated as such on initial recognition or are not classified as

loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Assets in this category are presented

as non-current assets unless the management intends to dispose of the asset within twelve months from the reporting date. The particular

measurement methods adopted are disclosed in the individual policy statements associated with each instrument.

Non-derivative financial liabilities that are not financial liabilities at fair value through profit or loss are classified as financial liabilities at

amortized cost. Financial liabilities in this category are presented as non-current liabilities except for maturities greater than twelve months

from the reporting date where these are presented as non-current liabilities. The particular measurement methods adopted are disclosed in

the individual policy statements associated with each instrument.

Regular way purchases and sales of financial assets are recognized on trade dates.

The Group classifies its financial instruments into following classes depending on the purpose for which the financial assets and liabilities are acquired or

incurred. The Group determines the classification of its financial assets and liabilities at initial recognition.

A financial instrument is recognized when the Group becomes a party to the contractual provisions of the instrument.


3.12 Loans and borrowings

3.13 Finance leases

3.14 Operating leases

3.16 Trade and other payables

3.16.1 Financial liabilities

3.16.2 Non-financial liabilities

3.17 Provisions and contingencies

3.18 Trade and other receivables



Loans and borrowings are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being fair value at the date the

liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost with any difference between cost

and redemption value recognized in the profit or loss over the period of the borrowings on an effective interest basis.


These are classified as 'loans and receivables'. On initial recognition, these are measured at cost, being their fair value at the date of transaction, less

attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the effective interest method, with interest


Leases that do not transfer substantially all risks and rewards of ownership are classified as operating leases. Payments made under operating leases are

recognized in profit or loss on a straight line basis over the lease term.


Provisions are recognized when the Group has a legal and constructive obligation as a result of past events and it is probable that outflow of resources

embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provision is recognized at

an amount that is the best estimate of the expenditure required to settle the present obligation at the reporting date. Where outflow of resources embodying

economic benefits is not probable, a contingent liability is disclosed, unless the possibility of outflow is remote.

These are classified as 'financial liabilities at amortized cost'. On initial recognition, these are measured at cost, being their fair value at the date the

liability is incurred, less attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the effective interest

method, with interest recognized in profit or loss.


3.19 Revenue

3.20 Borrowing costs

3.21 Government grants

3.22 Income tax

3.23 Earnings per share (EPS)

3.24 Cash and cash equivalents

Deferred tax is accounted for using the balance sheet approach providing for temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for tax purposes. In this regard, the effects on deferred taxation of the portion of income that is subject to final

tax regime is also considered in accordance with the requirement of "Technical Release - 27" of the Institute of Chartered Accountants of Pakistan. Deferred tax

is measured at rates that are expected to be applied to the temporary differences when they reverse, based on laws that have been enacted or substantively

enacted by the reporting date. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for deductible

temporary differences to the extent that future taxable profits will be available against which temporary differences can be utilized. Deferred tax assets are

reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Revenue is measured at the fair value of the consideration received or receivable, net of returns allowances, trade discounts and rebates, and represents

amounts received or receivable for goods and services provided and other operating income earned in the normal course of business. Revenue is recognized

when it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the associated costs

incurred or to be incurred can be measured reliably.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period

of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended

use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying asset is deducted from the

borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss as incurred.

Diluted EPS is calculated by adjusting basic EPS by the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential

ordinary shares into ordinary shares and post-tax effect of changes in profit or loss attributable to ordinary shareholders of the Group that would result from

conversion of all dilutive potential ordinary shares into ordinary shares.

Interest income is recognized using effective interest method.

Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items

recognized directly in other comprehensive income, in which case it is recognized in equity.

Current tax is the amount of tax payable on taxable income for the year, using tax rates enacted or substantively enacted by the reporting date, and any

adjustment to the tax payable in respect of previous years. Provision for current tax is based on current rates of taxation in Pakistan after taking into account tax

credits, rebates and exemptions available, if any. The amount of unpaid income tax in respect of the current or prior periods is recognized as a liability. Any

excess paid over what is due in respect of the current or prior periods is recognized as an asset.

Revenue from sale of goods is recognized when risks and rewards incidental to the ownership of goods are transferred to the buyer. Transfer of risks and

rewards vary depending on the individual terms of the contract of sale and usually occurs on dispatch of goods to customers.

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares

outstanding during the year.

Cash and cash equivalents for the purpose of cash flow statement comprise cash in hand and cash at banks. These are classified as 'loans and receivables' and

are carried at amortized cost.

Government grants are recognized when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated

with the grant. Grants related to future expenditure are initially recognized as deferred income. Subsequent to initial recognition grants related to assets are

recognized in profit or loss on a systematic basis over the useful life of the assets whereas grants relating to income are recognized in profit or loss on a

systematic basis in the same period in which related expenses are recognized. Grants that compensate the Group for expenses or losses already incurred are

recognized in profit or loss in the period in which these become receivable.


3.25 Impairment



4

4.1 IAS 1 - PRESENTATION OF FINANCIAL STATEMENNTS (REVISED)

4.2 IAS 23 - BORROWING COSTS (REVISED)

Standard and interpretations that become effective during the year but not relevant

NEW AND REVISED APPROVED ACCOUNTING STANDARDS, INTERPRETATIONS AND AMENDMENTS THERETO

An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its estimated recoverable amount. Impairment

losses are recognized in profit or loss. Impairment losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of

the assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the

loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used in determine the recoverable

amount. An impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not exceed the carrying amount that

would have been determined, net of depreciation and amortization, if no impairment loss had been recognized.

During the current year, the Group has adopted the following new and amended IAS as of July 01, 2009, which has resulted in extended disclosures as

described below:

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. Individually significant

financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in Groups that share similar

credit risk characteristics. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative

effect on the estimated future cash flows of the asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount, and the

present value of the estimated future cash flows discounted at the original effective interest rate. Impairment loss in respect of a financial asset

measured at fair value is determined by reference to that fair value. All impairment losses are recognized in profit or loss. An impairment loss is reversed

if the reversal can be related objectively to an event occurring after the impairment loss was recognized. An impairment loss is reversed only to the

extent that the financial asset’s carrying amount after the reversal does not exceed the carrying amount that would have been determined, net of

amortization, if no impairment loss had been recognized.

The carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to

determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable

amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated

future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset or cash generating unit.

The revised IAS 1 as issued in September 2007 and became effective for financial years beginning on or after January 01, 2009. The revised standard

separates owner and non-owner changes in equity. The statements of changes in equity includes only details of transaction with owners. with non-

owner changes in equity presented as a single line. in addition, the standard has introduced a statements of comprehensive income, which presents all

items of recognised income and expense, either as a single statement, or in two linked statements. The Group has opted to present two inked

statements and accordingly has presented a separate statements of comprehensive income in these financial statements. Comparative figures have

also been re-presented to bring in conformity with the revised standard.

Certain amendments to IAS 23, “Borrowing cost” have been published that a applicable to the company`s financial statements covering annual period,

beginning on or after January 1, 2009. Adoption of these amendments requires the company to capitalized the borrowing cost directly attributable to

acquisition, construction or production of a qualifying assets (one that take substantial period of time to get ready for use or sale) as part of the cost of

that assets. The option of immediately expensing these borrowing cost has been removed. the adoption of said amendment resulted in additional

capitalization of borrowing cost amounting to Rs.335.780 million.

The following standards (revised or amended) and interpretations become effective for the current financial year but are either not relevant or do not have any

material effect on the financial statements of the Group.


IFRS 3 - Business Combinations (Revised)

IFRS 7 - Financial Instruments: Disclosure (Amended)

IFRS 8 - Operating Segments

IAS 27 - Consolidated and Separate Financial Statements (Revised)

IAS 32 - Financial instruments (Amended of reputable instruments and obligations arising on liquidation)

IAS 39 - Financial Instruments: Recognition and Measurement (Amended)

IFRIC 15 - Agreements for the Construction of Real Estate.

IFRIC 16 - Hedges of a Net Investment in a Foreign Operation

IFRIC 17 - Distributions of Non-cash Assets to Owners

Standards and interpretations issued but not yet effective for the current financial year

Effective for period

beginning on or after

IAS 24 - Related Party Disclosures (Revised) January 01, 2011

IAS 32 - Financial Instruments: Presentation - Amendments Relating to Classification of Rights Issues February 01, 2010

IFRS 2 - Share-based Payment: Amendments relating to Group Cash - settled Share-based Payments Transactions January 01, 2010

IFRIC 14 - IAS 19 - The Limited on Defined Benefit Asset, Minimum Funding Requirements and their Interaction (Amendment) January 01, 2011

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments July 01, 2010

Note 2010 2009

Rupees Rupees

5 AUTHORIZED SHARE CAPITAL

Ordinary shares of Rs 10 each

600,000,000 (2009: 600,000,000) class A shares 5.1 6,000,000,000

6,000,000,000

200,000,000 (2009: 200,000,000l) class B shares 5.2 2,000,000,000

2,000,000,000

200,000,000 (2009: 200,000,000l) class C shares 5.3 2,000,000,000

2,000,000,000

10,000,000,000

10,000,000,000

Preference shares of Rs. 10 each

200,000,000 (2009: 200,000,000) shares 2,000,000,000

2,000,000,000

12,000,000,000

12,000,000,000

5.1

5.2

5.3

Class B ordinary shares are restrictive rights voting ordinary shares that have the restricted or disproportionate rights and privileges.

Class C ordinary shares are non-voting ordinary shares of the Agritech Limited that do not have any voting rights attached thereto and do not have any rights to

receive notice of, attend, or vote at a general meeting of the Agritech Limited , However, holders of such shares shall have all other rights of ordinary shares,

including right to dividend and to share in the assets of the Agritech Limited in event of its winding up.

Class A ordinary shares include all ordinary shares of the AGL other than non-voting ordinary shares and restrictive rights voting ordinary shares, having all

rights and privileges, including voting rights as provided in the Ordinance.

The following are the standards and interpretations which have been issued but are not yet effective for the current financial year.


2010 2009

Rupees Rupees

6 ISSUED, SUBSCRIBED AND PAID-UP CAPITAL

Class A ordinary shares of Rs. 10 each

383,430,000 (2009: 383,430,000) shares issued fully paid in cash 3,834,300,000

3,834,300,000

9,000,000 (2009: 9,000,000) shares issued for consideration other than cash 90,000,000

90,000,000

3,924,300,000

3,924,300,000

6.1 313,423,177 shares (2009: 392,429,993 shares) are held by ANL (holding company) as of reporting date.

7 RESERVES

Revenue reserve 9,000,000

9,000,000

9,000,000

9,000,000

8 SURPLUS ON REVALUATION OF FIXED ASSETS

Revaluation carried out during the year 6,560,395,944

--

Related deferred tax liability (2,268,021,208)

--

Transfer to accumulated loss in respect of incremental depreciation charged during the year - Net of tax (28,783,221)

--

Surplus on revaluation of fixed assets - Closing 4,263,591,515

--

Land

Building

Plant and machinery

The surplus arising from revaluation is Rs. 6,560 million. The closing balance of surplus on revaluation of fixed assets is not available for distribution to shareholders.

Revalued amount of building has been determined by reference to present depreciated replacement values after taking into consideration covered area and type of

construction, age of civil and ancillary structures, physical condition and level of preventive maintenance carried out by the Company.

Revalued amount of plant and machinery has been determined by reference to present depreciated replacement values after taking into consideration present physical

condition, remaining useful economic lives, technological obsolescence and level of preventive maintenance carried out by the Company.

Land, building and plant and machinery of the Company have been revalued as at March 07, 2010 by a firm of independent valuers, "Maricon Consultants". Basis of

revaluation are as follows:

Revalued amount of land has been determined by reference to local market values of land taking into account prevailing fair market prices under the position and

circumstances present on the date of revaluation and current market scenario for properties of similar nature in the immediate neighbourhood and adjoining areas.


W.D.V. of

Accumulated assets before Revalued Revaluation

Cost Depreciation revaluation Amount Surplus


Freehold land 1,839,746,250

--

1,839,746,250

1,920,081,600

80,335,350

Buildings on freehold land 1,157,086,359

333,922,858

823,163,501

1,279,545,300

456,381,799


4,515,662,626

11,793,432,442

17,708,963,750

5,915,531,308

Residential colony assets 71,243,413

13,563,500

57,679,913

165,827,400

108,147,487

19,377,171,090

4,863,148,984

14,514,022,106

21,074,418,050

6,560,395,944

9 LOAN FROM ASSOCIATES - UNSECURED, SUBORDINATED

Note 2010 2009

Rupees Rupees

10 REDEEMABLE CAPITAL - SECURED

Term Finance Certificates (TFCs) - I 10.1 & 10.5 6,894,480,000

6,898,520,000

Term Finance Certificates (TFCs) - II 10.2 1,498,800,000

1,497,980,000

Term Finance Certificates (TFCs) - III 10.3 496,165,250

500,000,000

Sukuks 10.4 1,600,000,000

1,600,000,000

10,489,445,250

10,496,500,000

Transaction costs 10.6 (127,549,317)

(143,051,767)

10,361,895,933

10,353,448,233

Current maturity presented under current liabilities 15 (2,175,886,000)

(215,590,000)

8,186,009,933

10,137,858,233

10.1


Call option

Return on TFCs

Trustee

This represents loan obtained by Agritech Limited from an associated company to finance the acquisition of HPFL. The tenor of loan is six years and carries mark-up at

six months KIBOR plus a spread of 3.25% per annum (2009: six months KIBOR plus a spread of 3.25% per annum). The loan is subordinated to all long term finances

obtained by Agritech Limited. The conversion option in subordinated loan was rescinded, by mutual consent, during the year.


Agritech Limited. The total issue comprises of 1,380,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:


The principal redemption of TFCs is structured to be in ten equal semi-annual installments starting from July 2010.

The Agritech Limited may redeem the TFCs by way of exercise of call option by giving notice in writing to TFC holders and the Trustee of not less than thirty

days.

In order to protect the interests of TFC holders, Faysal Bank Limited has been appointed as trustee for the issue under a trust deed. The trustee has the power

to enforce the Company's obligations, in case it defaults, in accordance with the terms of the trust deed and to distribute the proceeds of any such enforcement

among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Agritech Limited .


Security

10.2


Call option

Return on TFCs

Trustee

Security

10.3


Call option

Return on TFCs

Trustee

Security

The issue is secured by charge over property, plant and equipment of the Agritech Limited .


These have been issued by way of private placements with a consortium of investors to finance the acquisition of HPFL. The total issue comprises of 100,000

certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:


days. However the call option can be exercised only after expiry of one year from the date of issue.


The principal redemption of TFCs is structured to be in sixteen equal quarterly installments starting from March 2010.


the Agritech Limited . The total issue comprises of 300,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption are as follows:

In order to protect the interests of TFC holders, JS Bank Limited has been appointed as trustee for the issue under a trust deed. The trustee has the power to

enforce the AGL's obligations, in case the Agritech Limited defaults, in accordance with the terms of the trust deed and to distribute the proceeds of any such

enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the Agritech Limited .


days. However the call option can be exercised only after expiry of two years from the date of issue.

The principal redemption of TFCs is structured to be in ten equal semi-annual installments starting from May 2010.

The issue carries return at three months KIBOR plus 3.25% per annum, payable quarterly.


trustee has the power to enforce the Group's obligations, in case the Agritech Limited defaults, in accordance with the terms of the trust deed and to distribute

the proceeds of any such enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the

Agritech Limited .



10.4


Call option

Return on TFCs

Trustee

Security

10.5 This includes 120,000 certificates of Rs. 5,000 each (2009: 120,000 certificates of Rs. 5,000 each) held by ANL.

The principal redemption of these certificates is structured to be in ten equal semi annual installments starting from February 2011.

The Agritech Limited may redeem these certificates by way of exercise of call option by giving notice in writing to TFC holders and the Trustee of not less than

thirty days. However the call option can be exercised only after expiry of one year from the date of issue.


trustee has the power to enforce the AGL's obligations, in case the AGL defaults, in accordance with the terms of the trust deed and to distribute the proceeds

of any such enforcement among the TFC holders on pari passu basis subject to the priority rights of all other creditors and depositors of the AGL.

The issue is secured by charge over property, plant and equipment of the Agritech Limited

These have been issued by way of private placements with a consortium of investors to finance the balancing, modernization and replacement of Agritech

Limited property, plant and equipment. The total issue comprises of 320,000 certificates of Rs. 5,000 each. The terms and conditions of issue and redemption

are as follows:

The issue carries return at six months KIBOR plus 2% per annum, payable semi-annually.

Note 2010 2009

Rupees Rupees

10.6 Transaction costs


78,214,511

Incurred during the year 14,300,000

64,837,256

Amortised during the year (29,802,450)

--


143,051,767

10.7

11 LONG TERM FINANCES - SECURED

Syndicate Term Finance - I 11.1 481,250,000

500,000,000

Syndicate Term Finance - II 11.2 2,431,485,482

1,356,398,302

Term Finance 11.3 300,000,000

--

3,212,735,482

1,856,398,302

Current maturity presented under current liabilities 15 (568,750,000)

(62,500,000)

2,643,985,482

1,793,898,302


These represent long term finances utilized under markup arrangements from banking companies


11.3

11.4

The above term finance facility has been obtained from KASB Bank Limited to meet working capital requirements. The finance carries mark-up at three months

KIBOR plus a spread of 3.5% per annum. The loan is secured against ranking charge over fixed assets of the Agritech Limited including Plant & Machinery

equipment (excluding land, building). The loan is repayable in equal monthly installments commencing from November 2010.


Note 2010 2009

Rupees Rupees

12 LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE - SECURED

Present value of minimum lease payments 12.1 & 12.2 245,335,575

279,865,312

Current maturity presented under current liabilities 12.2 & 15 (68,676,542) (45,928,797) 176,659,033

233,936,515

12.1

12.2

2010 2009

Rupees Rupees

Not later than one year 94,252,181

89,445,529

Later than one year but not later than five years 236,988,897

312,436,819

Total future minimum lease payments 331,241,078

401,882,348

Finance charge allocated to future periods (85,905,503)

(122,017,036)

Present value of future minimum lease payments 245,335,575

279,865,312

Not later than one year (68,676,542)

(45,928,797)

Later than one year but not later than five years 176,659,033

233,936,515

12.3

13 LONG TERM PAYABLES - UNSECURED

This represents amount payable to a contractor whose claim is pending with arbitrator. Refer to note 19.1.1 for details.

These represent vehicles and machinery acquired under finance lease arrangements and are secured by lien over documents of title, specific charge over

leased assets and registration of leased vehicles jointly in the name of the Agritech Limited and that of the lessor. Rentals are payable monthly/quarterly. The

leases are priced at interest rates ranging from three to six months KIBOR plus a spread of 2% to 3% per annum (2009: three to six months KIBOR plus a

spread of 2% to 3% per annum). Under the terms of agreement, taxes, repairs, replacements and insurance costs in respect of assets subject to finance lease

are borne by the AGL. The Agritech Limited also has the option to acquire these assets at the end of the respective lease terms and intends to exercise the

option.

The amount of future payments under the lease arrangements and the period in which these payments will become due are as follows:


11.1

11.2 The finance has been obtained from a consortium of banking companies to finance the revamping of operational efficiencies of Agritech Limited. plant and is secured

by charge over property, plant and equipment of Agritech Limited. The finance carries mark-up at six months KIBOR plus a spread of 2.25% per annum, payable semi-

annually. The finance is repayable in equal semi-annual installments with the first installment due after two years from the date of disbursement on March 30, 2011.

The finance has been obtained from a consortium of banking companies to finance the acquisition of HPFL and is secured by charge over property, plant and

equipment of Agritech Limited. The finance carries mark-up at three months KIBOR plus a spread of 3.25% per annum (2009: three months KIBOR plus a spread of

3.25% per annum), payable quarterly. The finance is repayable in equal quarterly installments with the first installment due after fifteen months from the date of

disbursement on February 28, 2010.


2010 2009

Rupees Rupees

14 DEFERRED TAXATION

Deferred tax liability arising on

Accelerated tax depreciation 4,574,043,633

3,329,947,180

Revaluation - net of related depreciation 2,252,522,551

--

Finance lease transactions 50,652,831

39,258,114

Deferred tax asset arising on

Unused tax losses and available tax credits 14.1 (2,796,824,298)

(874,042,319)

Net liability recognized in balance sheet 4,080,394,717

2,495,162,975

14.1

14.2

Note 2010 2009

Rupees Rupees

15 CURRENT MATURITY OF NON-CURRENT LIABILITIES


215,590,000

Long term finances 11 568,750,000

62,500,000


45,928,797

2,813,312,542

324,018,797

16 SHORT TERM BORROWINGS

These represent short term finances utilized under mark-up arrangements from banking companies

Secured

Running finance 16.1 2,118,271,009

1,379,079,713

Cash finance 16.1 395,417,748

307,004,933

Finance against trust receipt 16.1 958,435,106

--

Morabaha/LPO 16.1 1,255,281,618

--

Demand finance 16.1 60,313,169

--

4,787,718,650

1,686,084,646

Unsecured

Commercial paper --

417,000,000

4,787,718,650

2,103,084,646

16.1

Deferred tax has been calculated at 35% (2009: 35%) of temporary differences as at the reporting date.

These facilities have been obtained from various banking companies for working capital requirements and are secured by charge over current assets of the AGL,

pledge of stocks, and personal guarantees of Directors of the AGL.

Unused tax losses and available tax credits amounting to Rs.1,698.254 million have not been taken into account in determining deferred tax asset as future

taxable profits are expected to be available only to the extent of deferred tax asset recognized.

Note


16.2

Note 2010 2009

Rupees Rupees

17 TRADE AND OTHER PAYABLES

Trade creditors 567,255,553

345,866,752

Bills payable 2,459,112,973

934,826,716


103,675,281

Security deposits and retention money 38,945,798

44,138,753

Advances from customers 281,143,051

12,198,750

Tax deducted at source 14,574,523

5,684,628

Sales tax payable 321,544 -- Payable to gratuity trust 17.1 14,073,414

9,041,621

Payable to provident fund trust 17.2 84,551,940

4,193,230

Workers' Profit Participation Fund 17.3 14,406,184

46,768,909

Workers' Welfare Fund 17.4 5,758,402

11,378,290

Other payables 24,652,832

13,269,282

3,682,738,510

1,531,042,212

17.1 Balance sheet Liability

Present value of defined benefit obligations 31,478,117

22,661,840

Fair value of plan assets (14,960,335)

(15,519,512)

(Surplus)/Deficit 16,517,782

7,142,328

Plus unrecognized actuarial gains/ (losses) (2,444,368)

1,899,293

Total Balance sheet Liability 14,073,414

9,041,621

Changes in fair value obligations

Present value of defined benefit obligation on 1 July 22,661,840

23,859,405

Current service cost 4,174,713

3,978,663


2,863,129


(4,256,378)

Actuarial (gains) loss on PVDBO 3,036,725

(3,782,979)

Present value of defined benefit obligation on 30 June 31,478,117

22,661,840

These finances carry markup at rates ranging from one to six months KIBOR plus a spread of 1.5% to 4.5% per annum (2009: three to six months KIBOR plus a

spread of 1.5% to 3.5% per annum), payable quarterly.


The aggregate available short term funded facilities amounts to Rs. 5,897 million (2009: Rs. 2,103 million) out of which Rs. 0.793 million (2009: Nil) remained

unavailed as at the reporting date. Limits available for opening of letters of credit / guarantee amount to Rs. 7,692 million (2009: Rs. 7,692 million) of which the

limits remaining unutilized as at the reporting date amount to Rs. 2,905 million (2009: Rs. 5,589 million).


Changes in fair value of Plan assets

Fair value of Plan asset as on 1 July 15,519,512

19,338,907

Expected return on plan assets for the year 1,862,341

2,320,669


(4,256,378)

Actuarial losses on assets (1,306,936)

(1,883,686)

Fair value of Plan asset as on 30 June 14,960,335

15,519,512

Expense to be charged to P&L

Additional liability / (assets) charge for the year --

(3,958,902)

Current service cost for the year 4,174,713

3,978,663


2,863,129

Expected return on plan assets (1,862,341)

(2,320,669)

Amount chargeable to P&L 5,031,793

562,221

Changes in Actuarial Gains / (Loss)

Unrecognized gain (Loss) as on 1 July 1,899,293

--

Total gain and (loss) arising in the year (4,343,661)

1,899,293

Unrecognized gain (Loss) as on 30 June (2,444,368)

1,899,293

Changes In net Liability

Liability as on 1 July 9,041,621

8,479,400

Expense charged during the year 5,031,793

562,221

Net Liability as on 30 June 14,073,414

9,041,621

2010 2009

Expected Return on plan Assets 12% 12%

Expected rates of salary increase in future 11% 11%

Expected remaining future working Life 14 years 13 years

Actuarial gain on assets in the year

Expected return on plan assets

(1,306,936)

1,826,341

(1,883,686)

2,320,669

Actuarial return on plan assets 555,405

436,983

Historical information

2010 2009 2008


31,478

22,662

23,859

14,960

15,520

19,339

Present Value of Defined Benefit Obligations

Fair Value of Plan Assets

Deficit in the plan 16,518

7,142

4,520

2010 2009

Rupees Rupees

2010 2009

Rupees Rupees

Discount Rate 12% 12%


Experience adjustments arising on

Plan liabilities (gain)/losses 3,037

(3,783)

Nil

Plan assets gains/(losses) (1,307)

(1,884)

Nil

17.2 Payable to provident fund trust

Markup at the rate of 18% has been accrued on payable to provident fund trust.

2010 2009

Rupees Rupees

17.3 Workers' Profit Participation Fund ("WPPF")

As at the beginning of the year 46,768,909

31,241,440

Charged to profit or loss for the year 14,406,184

46,768,909

Paid during the year (46,768,909)

(31,241,440)


46,768,909

17.4 Workers Welfare Fund ("WWF")

As at the beginning of the year 11,378,290 -- Charged to profit or loss for the year 5,758,402

11,378,290

Paid during the year (11,378,290)

--


11,378,290

18 MARK-UP ACCRUED ON BORROWINGS

19 CONTINGENCIES AND COMMITMENTS

19.1 Contingencies

19.1.1

19.1.2

19.1.3

19.1.4

Certain cases against the Agritech Limited are pending before labour courts, where the claim cannot be quantified and ascertained at this stage.

A contractor's claim amounting to Rs. 839.510 million (2009: Rs. 983.26 million) against the AGL was not acknowledged as debt since the AGL also has

a counter claim amounting to Rs. 2,556.02 million (2009: 2,556 million) against the contractor. The claim is under settlement with arbitrator. The

management expects a favourable decision.

These include mark-up of Rs. 37,801,479/- (2009: Rs. 43,809,757/-) on TFCs held by ANL (see note 10.5) and that of Rs.60,591,167/- (2009: Rs. 41,049,797/-) on long

term loan obatained from associated company. (see note 9).

Some ex-employees of the Agritech Limited have filed a petition demanding the benefits of golden hand shake scheme which was introduced in 1997.

The Agritech Limited estimates liability amounting to Rs. 8 million in case the decision is made against it. The management claims that no benefits are

payable to the petitioners under the said scheme and is of the view that the decision will be made it the AGL's favour.

2010 2009 2008



19.1.5

19.1.6

19.1.7

2010 2009

Rupees Rupees

19.2 Commitments

19.2.1 Commitments under irrevocable letters of credit for:

- purchase of stores, spare and loose tools 17,567,001

233,375,257

- purchase of machinery 77,679,222

1,485,603,784

95,246,223

1,718,979,041

20 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 25,790,551,897

14,361,612,465

Capital work in progress 8,088,034,143

4,287,583,985

33,878,586,040

18,649,196,450

Guarantees given by banks on behalf of the Agritech Limited as at the reporting date amount to Rs. 196.3 million (2009: NIL million).

The Company has payable to M/s National Fertilizers Pvt. Limited (NFC) against short term loan and interest thereon amounting to Rs. 210 Million. The

Company has lodged counter claim of Rs. 214 Million with NFC regarding disputed balances existing as on November 28, 2008. However NFC has

neither filed any suit to claim its receivables therefore the company is of the view that its counter claim will be settled with its payables and the company

may not have to pay to NFC.

C.R no 66/2008 title WAPDA versus Agritech limited. The said reference is pending before the honorable high court, where in, WAPDA has assailed the

order dated 12.05.2005 passed by the Additional District and Sessions Judge ,Mianwali ,in favour of the Agritech Limited .Through the order dated

12.05.2005, it was held the Agritech Limited was not liable to pay an amount Rs. 2,238,300/-as demand by WAPDA .In our view the Agritech Limited

has very strong chances of success and thus most probably there will not be any financial impact.

20.1

20.2

Note

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to a

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of

Fin

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Co

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65

2009

CO

ST

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AL

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EP

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CIA

TIO

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No

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nd

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Tender

Tender

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Auction

Auction

Auction

Book v

alu

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Seale

d T

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d T

ender

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d T

ender

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to M

uham

mad R

izw

an S

adiq

U

nit M

anager

(Utility

)

Sale

to A

bdul W

akeel (S

r. M

anager

Instt.)

Sale

to A

khta

r H

ussain

Sr.M

ana

ger

(Mech.)

Sale

to Ikra

m-u

l-H

aq M

anager

(Pro

jects

)

Sale

to M

uham

mad N

aeem

Manager

(HS

E)

Sale

to A

shra

f K

han (

Sr. M

anage

r U

rea)

Sale

to R

ehan M

unir M

anager

(PE

)

Sale

to M

uham

mad A

rif S

r. M

an

ager

(R&

D)

Sale

to K

hale

eque U

r R

ehm

an M

anager

(HR

)

Sale

to A

tta U

r R

ehm

an U

nit M

anager

(Am

monia

)

Sale

to M

uham

mad F

aro

oq D

y. G

M (

Am

monia

Main

t)

Sale

to R

iaz A

Khan (

GM

Manufa

ctu

ring)

Sale

to M

uham

mad F

ais

al M

uzam

mil (

Mark

eting M

anager)

Sale

to A

am

ir Ibra

him

(M

anager

Port

Opera

tion

s)

Sale

to B

ura

ir N

azir (

Bra

nd M

anager)

Sale

to Q

urb

an A

li (

Ele

ctr

ical H

PF

L)

Sale

to M

uham

mad G

hazanfe

r A

li K

ha

n (

Dy.

GM

(M

ech))

Sale

to O

mer

Pirzada (

Manager

Mark

eting)

Sale

to H

am

id Iqbal (G

enera

l M

anager

HP

FL)

Auctioned to K

HU

RR

AM

IM

TIA

Z

Auctioned to K

HU

RR

AM

IM

TIA

Z

Auctioned to A

GH

A M

US

TA

FA

ALI S

HA

H

Naveed S

cra

pe

Deale

r

Naveed S

cra

pe

Deale

r

Naveed S

cra

pe

Deale

r

Zaheer-

ud-d

in P

erv

aiz

, M

ultan (

Em

plo

yee)

Mr A

lam

Kh

an

Mr

Mahr A

shiq

Mr

Mahr A

shiq

Mr

Muham

mad R

iaz

Mr A

bdul R

aziq

AC

TIO

N O

F P

AK

DY

ES

PLA

NT

AN

D M

AC

HIN

ER

Y A

ND

BU

ILD

ING

S

OP

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AT

OR

CA

BIN

SE

CU

RIT

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FF

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BU

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GA

TE

B

TO

YO

TA

CO

RO

LLA

GLI LE

F-0

7-9

749

SU

ZU

KI C

ULT

US

CA

R L

EB

-6634

SU

ZU

KI C

ULT

US

CA

R L

EB

-9081

SU

ZU

KI C

ULT

US

CA

R L

EB

-9079

SU

ZU

KI C

ULT

US

LE

J-0

7-7

154

SU

ZU

KI C

ULT

US

CA

R L

EB

-6639

SU

ZU

KI C

ULT

US

CA

R L

EB

-9117

TO

YO

TA

CO

RO

LLA

CA

R L

ED

-57

84

SU

ZU

KI C

ULT

US

CA

R L

EB

-6627

SU

ZU

KI C

ULT

US

CA

R L

EB

-9118

SU

ZU

KI C

ULT

US

CA

R L

EB

-4615

SU

ZU

KI C

ULT

US

CA

R L

EB

-4875

TO

YO

TA

CO

RO

LLA

LE

H-0

7-1

039

SU

ZU

KI C

ULT

US

LE

H-0

7-2

157

SU

ZU

KI C

ULT

US

CA

R L

EB

-07-6

650

TO

YO

TA

CO

RO

LLA

CA

R L

EA

-9129

TO

YO

TA

CO

RO

LLA

CA

R L

EA

-9218

SU

ZU

KI C

ULT

US

(LZ

W-6

327)

SU

ZU

KI C

ULT

US

(LZ

Q-7

539)

SU

ZU

KI C

ULT

US

LE

F-0

8-7

448

SU

ZU

KI C

ULT

US

CA

R L

EB

-6630

TO

YO

TA

CO

RO

LLA

XL

I L

EH

-07-1

929

TO

YO

TA

CO

RO

LLA

CA

R L

EA

8083

TO

YO

TA

CO

RO

LLA

LX

B-9

600

TO

YO

TA

CO

RO

LLA

LO

V-8

361

SU

ZU

KI C

ULT

US

CA

R L

EB

3418

FU

RN

ITU

RE

& F

IXT

UR

E

OF

FIC

E/E

LE

C: E

QU

IPM

EN

TS

PLA

NT

& M

AC

HIN

ER

Y

TO

YO

TA

CO

RO

LLA

TO

YO

TA

HIA

CE

MIT

SU

BIS

HI V

AN

SU

ZU

KI M

AR

GA

LLA

CA

R

SU

ZU

KI K

HY

BE

R C

AR

SU

ZU

KI V

AN

Co

st

Ru

pee

s

2,7

50,0

00

20,2

76

250,0

00

890,0

00

595,0

00

595,0

00

595,0

00

627,0

00

595,0

00

595,0

00

1,0

75,3

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595,0

00

595,0

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595,0

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632,0

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572,6

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800,0

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815,5

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215,4

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337,1

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537,6

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337,1

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366,9

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Net

bo

ok v

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Ru

pee

s

2,5

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459,8

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257,8

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257,8

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407,5

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257,8

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257,8

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537,6

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257,8

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257,8

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368,6

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pro

ceed

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Ru

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380,0

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360,5

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115,0

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546,2

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122,2

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--

710,8

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417,7

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28


Note 2010 2009

Rupees Rupees

20.1.3 The depreciation charge for the year has been allocated as follows:

Cost of sales 31 493,768,334

405,790,036

Administrative and General expenses 33 5,317,532

5,317,532

Income from experimental farms 35.3 242,151

85,761

499,328,017

411,319,835

20.2 CAPITAL WORK IN PROGRESS

As at As at



Building 93,730,304

631,397,378

(685,433,659)

39,694,023


6,043,639,439

(2,189,153,000)

8,048,340,120

4,287,583,985 6,675,036,817 (2,874,586,659) 8,088,034,143 As at As at



Building 10,543,728

83,306,857

(120,281)

93,730,304

Plant and machinery 772,507,073

3,445,411,224

(24,064,616)

4,193,853,681

783,050,801

3,528,718,081

(24,184,897)

4,287,583,985

20.2.1

Note 2010 2009

Rupees Rupees

21 INTANGIBLE ASSET

Goodwill acquired in business combination 21.1 2,567,310,828

2,567,310,828

21.1

2010

2009

Additions to capital work in progress include borrowing costs of Rs. 495.514 million (2009: Rs. 318.937 million) relating to specific borrowings and

Rs.335.780 million (2009: Nil) relating to general borrowings capitalized at annual capitalization rate of 16.02% and also include salaries and other

directly attributable expenses of Rs. 18.940 million (2009: Rs.30.942 million).

ANL acquired 100% shares in the Agritech Limited on July 15, 2006, inclusive of shares offered to the employees of the Company, which were divested by the

employees in favour of ANL. As permitted by the terms and conditions of privatization for the purpose of raising finance ANL formed a wholly owned subsidiary;

Dominion Fertilizers (Private) Limited ('DFL'). By virtue of agreement ANL transferred 69.90% shares in the Company to DFL, which were later reverted back to

ANL on merger of DFL into the Company under the court order dated December 07, 2006 and as such effectively, ANL continued to hold 100% shares since

acquisition. This goodwill represents excess of purchase consideration paid by ANL to the Privatization Commission of Pakistan for acquisition of the Company

over DFL's interest in the fair value of the identifiable net assets of the Company. The amount of goodwill was transferred the Company on merger of DFL into

the Company.


Note 2010 2009

Rupees Rupees

22 LONG TERM ADVANCES

Advances to employees - Unsecured, considered good 22.1 & 22.3 25,932,322

20,444,326

Advances to employees - Secured 22.2 13,419,549

15,858,712

39,351,871

36,303,038

Current maturity presented under current assets 26 (8,469,954)

(6,913,381)

30,881,917

29,389,657

22.1

22.2

22.3 These include advances to executives amounting to Rs. 17,809,844 (2009: Rs. 16,618,948).

22.4

Note 2010 2009

Rupees Rupees

23 LONG TERM DEPOSITS - UNSECURED, CONSIDERED GOOD


Deposits against finance lease 23.1 11,321,397

9,934,620

Security deposits with utility companies 23.2 6,915,851

6,455,872

18,237,248

16,390,492

23.1

23.2

2010 2009

Rupees Rupees

24 STORES, SPARES AND LOOSE TOOLS

Stores 130,864,976

77,284,220

Spares 1,141,265,055

670,729,927

Loose tools 1,128,459

905,377

1,273,258,490

748,919,524

24.1

24.2 The Agritech Limited does not hold any items for specific capitalization.

These represent loans provided to employees of the Agritech Limited against future salaries and retirement benefits and carry mark-up at one half of six

months KIBOR per annum (2009: one half of six months KIBOR per annum)

These are classified as 'loans and receivables' under IAS 39 'Financial Instruments - Recognition and Measurement ' which are required to be carried at

amortized cost. However, in view of large number of advances, it is impracticable to determine amortized cost of each advance. Further, taking into account the

carrying amount of advances as at the reporting date, difference between the amortized cost and carrying amount of these advances is not considered to be

material.

These represent interest free soft loans provided to employees of the Agritech Limited in accordance with the Company policy.

These mainly include security deposits with Water and Power Development Authority and Sui Northern Gas Pipelines Limited. These are classified as 'loans and

receivables' under IAS 39 'Financial Instruments - Recognition and Measurement ' which are required to be carried at amortized cost. However, these, being

held for an indefinite period with no fixed maturity date, are carried at cost as its amortized cost is impracticable to determine.

These have been deposited with various banking companies and financial institutions against assets subject to finance lease.

No provision in respect of obsolescence of slow moving items has been made, as the same is considered to be immaterial.


Note 2010 2009

Rupees Rupees

25 STOCK IN TRADE

Packing material --

12,518,556

Raw material 32,331,476

184,713,248

Work in process 65,837,221

95,072,539

Finished goods

Own manufactured 296,565,183

344,580,203

Trading stock 18,874,441

1,652,678,006

413,608,321

2,289,562,552

25.1 There are no stores or stocks which are pledged as security for finances.

25.2

26 ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

Advances to suppliers - Unsecured, considered good 891,350,853

341,383,418

Advances to employees - Unsecured, considered good

against purchases and expenses 12,717,912

7,452,322

against salaries and post employment benefits 22 8,469,954

6,913,381

Accrued mark-up 26.1 204,485,615

49,335,712

Deposit with High Court 19.1.4 36,000,000

36,000,000

Prepayments 10,363,564

34,471,598

Sales tax receivable 12,079,238

15,094,700

Subsidy Receivable 550,823,960

627,865,600


10,229,481

1,753,272,532

1,128,746,212

26.1

Note 2010 2009

Rupees Rupees

27 DUE FROM RELATED PARTIES - UNSECURED, CONSIDERED GOOD


Due from ANL 27.1 451,007,466

440,376,611

451,007,466

440,376,611

27.1 This represents short term loan to ANL and carries mark-up at 18% per annum (2009: 18% per annum).

This includes mark-up of Rs. 204,485,615 (2009: Rs. 49,331,932) on short term loan given to ANL. See note 27.

The entire stock in trade is carried at cost being lower then net realizable value.


Note 2010 2009

Rupees Rupees

28 CURRENT TAXATION


28,572,106

Paid/deducted at source during the year 107,719,610

152,240,444

Provision for the year (59,097,769)

--

Adjustments and refunds (80,929,358)

11,133,130


191,945,680

29 CASH AND BANK BALANCES

Cash in hand 627,229

581,579

Cash at banks

in current accounts 51,390,185

202,562,026

in deposit accounts 29.1 34,479,630

90,341,887

85,869,815

292,903,913

86,497,044

293,485,492

29.1 Rate of return on deposit accounts ranges from 5 % to 6% (2009: 5% to 6%) per annum.

30 SALES - NET

Sale of fertilizers

Own-manufactured 6,924,875,618

5,560,465,314

Trading stock 6,016,756,608

7,438,808,540

Other products 20,861,694

23,643,033

12,962,493,920

13,022,916,887

Sales tax (2,877,475)

(3,116,382)

Trade Discount (49,790,176)

--

Commission and brokerage (55,275,288)

(22,000,248)

12,854,550,981

12,997,800,257


Note 2010 2009

Rupees Rupees

31 COST OF SALES

Raw material consumed 1,584,538,826

1,049,077,326

Salaries, wages and benefits 31.1 454,078,477

359,422,250

Fuel and power 367,303,627

327,298,023

Stores, spares and loose tools consumed 345,842,047

390,190,007


3,780,045


755,797

Insurance 92,481,012

63,528,139


13,177,392

Research and development 482,277

951,050


405,790,036


1,243,905


4,120,566

POL for pay loaders 7,312,772

--

Handling charges 17,954,195

6,669,223

Contract services 6,665,280

--

Others 53,477,445 56,196,775 3,459,163,735

2,682,200,534

Work in progress


7,656,296


(95,072,539)

29,235,318

(87,416,243)

Cost of goods manufactured 3,488,399,053

2,594,784,291

Finished goods


11,906,510


(344,580,203)

48,015,020

(332,673,693)

Cost of goods sold - own manufactured 3,536,414,073

2,262,110,598

Cost of goods sold - trading stock

- Cost of purchase including ancillary costs 6,160,192,105

5,922,794,506

6,160,192,105

5,922,794,506

9,696,606,178

8,184,905,104

31.1 These include charge in respect of employees retirement benefits amounting to Rs. 4,923,026 ( 2009: Rs. 1,554,687) and Rs. 10,725,121 (2009: Rs. 8,894,556)

on account of gratuity and provident fund respectively.


2010 2009

Rupees Rupees

32 SELLING AND DISTRIBUTION EXPENSES

Salaries and benefits 50,456,903

38,801,014

Freight and other expenses 277,289,585

203,195,877


1,123,950

Traveling 21,504,975

1,830,140

Advertisement and marketing 8,767,490

6,178,359


8,660,588

Vehicle running and maintenance 1,035,379

1,464,850

Printing and stationery 461,464

372,724

Insurance --

768,140


6,890,000


3,510,132

383,343,080

272,795,774

32.1

Note 2010 2009

Rupees Rupees

33 ADMINISTRATIVE AND GENERAL EXPENSES


100,056,645


11,800,302


2,185,033


1,414,142


3,193,225

Legal and professional charges 33.2 33,375,578

26,851,182


4,659,034

Guest house expenses 1,622,255

1,350,688

Head office expenses 20,150,142

21,703,500

VSS/GHS --

14,637,452

Utilities 3,383,355

--


--

Insurance expenses 538,903

--


9,516,766

Others 18,898,860

17,373,626

259,049,734

214,741,595

33.1 These include charge in respect of employees retirement benefits amounting to Rs. 1,067,712 ( 2009: Rs. 841,415) and Rs. 2,404,592 (2009: Rs. 1,678,819) on


These include charge in respect of employees retirement benefits amounting to Rs. 363,798 ( 2009: Rs. 20,640) and Rs. 1,696,056 (2009: Rs. 1,283,502) on



Note 2010 2009

Rupees Rupees

33.2 These include following in respect of auditors' remuneration.

Annual statutory audit 1,400,000

900,000

Report on consolidated financial statements 200,000

--

Review report under Code of Corporate Governance 50,000

--

Interim audits and certifications 1,165,000

536,450

Out of pocket expenses 127,354

30,000

2,942,354

1,466,450

34 FINANCE COST

Interest / mark-up on:

loan from associates 61,916,790

40,782,670

redeemable capital 34.1 1,433,788,162

1,438,509,237

long term finances 34.2 430,502,669

305,665,137

exchange Loss 277,099,817

249,714,693

liabilities against assets subject to finance lease 48,053,045

25,739,672

payable to provident fund trust 1,775,904

--

short term borrowings 862,782,491

909,570,952

3,115,918,878

2,969,982,361

Borrowing costs capitalized (831,293,956)

(318,937,000)

2,284,624,922

2,651,045,361

Amortization of transaction costs 10.6 29,802,450

--

Bank charges and commission 114,603,909

47,027,363

2,429,031,281

2,698,072,724

34.1

34.2 This includes mark-up of Rs. 61,916,790 (2009: Rs. 38,028,000) on long term loan from associates.

Note 2010 2009

Rupees Rupees

35 NET OTHER INCOME / (EXPENSES)

Net gains/(losses) on financial instruments

Return on bank deposits 8,847,313

10,222,107

Mark-up on loan to related party 35.1 155,200,304

49,417,305

Mark-up on advances to employees


1,009,854

--

966,101

(96,206,711)

165,057,471

(35,601,198)

This includes mark-up of Rs. 83,338,413 (2009: Rs. 121,541,000) on TFCs held by ANL. See note 10.5


Other income/(expenses)

Workers' Profit Participation Fund (14,406,184)

(46,768,909)

Workers' Welfare Fund (5,758,402)

(11,378,290)

Gain on sale of property, plant and equipment 30,279,028

52,056,375

Gain on cost of acquisition --

290,221,269

Donations 35.2 (10,000)

--

(Loss)/income from experimental farm 35.3 (2,340,478)

1,766,566

Provisions no longer required --

18,968,402


11,572,807

16,380,897

316,438,220

181,438,368

280,837,022

35.1 This represents mark-up on short term loan given to ANL. See note 27.

35.2 None of the directors or their spouses had any interest in respect of these donations.

35.3 This includes depreciation amounting Rs. 242,151/- (2009: Rs. 85,761/-).

36 TAXATION

Current taxation 36.1 64,272,757

--

Deferred taxation (682,789,467)

(117,168,782)

Prior Year 825,200

--

Net income/(expense) (617,691,510)

(117,168,782)

36.1

36.2

Unit 2010 2009

37 EARNINGS PER SHARE - BASIC AND DILUTED

There is no dilutive effect on basic earnings per share, which is based on:

Profit attributable to ordinary shareholders Rupees 885,650,586

1,790,953,300

Weighted average number of ordinary shares outstanding during the year No. of shares 392,430,000

392,430,000

Earnings per share - Basic and diluted Rupees 2.26

4.56

Provision for current tax has been made in accordance with section 113 'Minimum tax on income of certain persons' of the Income Tax Ordinance, 2001 ('the

Ordinance). There is no relationship between tax expense and accounting profit as the provision for current taxation is based on turnover tax therefore no

numerical reconciliation has been presented.

Assessments upto and including tax year 2009 deemed to have been finalized.

Note 2010 2009

Rupees Rupees

Note 2010 2009

Rupees Rupees


38 CASH GENERATED FROM OPERATIONS

Profit before taxation 267,959,076

1,908,122,082

Adjustments for non-cash and other items

Interest / markup expense 2,399,228,831

2,448,358,031

Amortization of transaction costs 29,802,450

--


409,973,630

Mark-up / Interest Income (156,210,158)

(60,519,753)

Loss on sales of investments --

96,206,711

Gain on Long term investment --

(290,221,269)

Gain on sale of property, plant and equipment (30,279,028)

(52,056,375)

2,741,870,111

2,551,740,975

Operating profit before changes in working capital 3,009,829,187

4,459,863,057

Changes in working capital

Increase in stores, spares and loose tools (524,338,966)

(92,675,943)

Decrease in stock in trade 1,875,954,231

36,016,352

(Increase) / decrease in trade receivables 469,379,974

(702,754,156)

Increase in advances, deposits, prepayments and other receivables (469,376,417)

(515,237,198)

Increase in long term advances (1,492,260)

(3,584,040)

Increase in long term deposits (1,846,756)

(7,273,396)

Increase / (decrease) in trade and other payables 2,151,696,298

(1,207,278,569)

3,499,976,104

(2,492,786,950)

Cash generated from operations 6,509,805,291

1,967,076,107

39 CASH AND CASH EQUIVALENTS

Cash and bank balances 29 86,497,044

293,485,492

86,497,044

293,485,492

40 TRANSACTIONS AND BALANCES WITH RELATED PARTIES

Nature of transaction Pricing mechanism

Sales Comparable uncontrolled price method

Purchases Comparable uncontrolled price method

Transfer of property, plant and equipment Net book value

Contribution to post employment benefit plan As per terms of the trust

Compensation of key management personnel As per terms of employment

Details of transactions and balances with related parties is as follows:

Related parties from the Company's perspective comprise holding company, subsidiaries, associated undertakings, key management personnel (comprising the chief

executive and directors) and post employment benefit plans. The Company in the normal course of business carries out transactions with various related parties and

continues to have a policy whereby all such transactions are carried out at arm's length. Pricing for these transactions is determined as follows:

Note 2010 2009

Rupees Rupees


Note 2010 2009

Rupees Rupees

40.1 Transactions with related parties


Mark-up income on short term loan 35.1 155,200,304

49,417,305

Mark-up expense on redeemable capital 34.1 83,338,413

94,320,978

Temporary loan - net 27 10,630,855

440,376,611

40.1.2 Associates

Long term loan received --

340,000,000

Mark-up on long term loan 34.2 61,916,790

40,782,670

Redeemable capital --

90,000,000

Mark-up expense on redeemable capital 14,123,327

8,387,506

Transaction costs 70,000,000

--


Charge to profit or loss on account of

- provident fund trust 14,825,769 11,856,877 - gratuity trust 5,031,793

562,221

40.1.4 Key management personnel

40.2 Balances with related parties



440,376,611


599,760,000

Mark-up receivable 26.1 204,485,615

49,335,712


43,809,757

40.2.2 Associates

Long term loan 9 340,000,000

340,000,000


90,000,000


41,049,796


--


Payable to provident fund trust 84,210,584

4,193,230

Payable to gratuity trust 14,073,414

9,041,621

41 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Related parties includes associated group companies, directors, executives and key management personals. The remuneration paid to chief executive,

directors, executive and key management personal in terms of their employment is disclosed in note 41 to the financial statements.

The aggregate amount charged to profit or loss in respect of chief executive, directors and executives on account of managerial remuneration, perquisites and benefits,

and post employment benefits, and the number of such directors and executives is as follows:

Note 2010 2009

Rupees Rupees





3,081,250

132,734,116

Post employment benefits 1,633,806

161,602

14,057,082

17,021,004

3,242,852

146,791,198

Number of persons 2

2

130




--

119,608,258


--

6,726,488

16,786,734

--

126,334,746

Number of persons 2

--

126

41.1 The chief executive and certain executives are provided with free use of Company maintained car.

42 BUSINESS COMBINATION

42.1

Rupees Rupees

Cost of acquisition 1,385,564,400

Identifiable assets acquired and liabilities assumed

Property, plant and equipment 2,032,717,461


Stores, spares and loose tools 29,975,373

Stock in trade 276,458,949

Advances, deposits, prepayments and other receivables 348,816,034

Current taxation 12,174,316


Deferred tax liability (554,530,443)

Trade and other payables (500,484,159)

1,675,785,669

Excess of fair value of net assets acquired over cost of acquisition 290,221,269

Cost of acquisition net of cash acquired 1,356,667,637

2010

2009

The cost of acquisition and its allocation to identifiable assets acquired and liabilities assumed are as follow:

During the year 2008 , Agritech Limited acquired 100% shares of Hazara Phosphate Fertilizers (Private) Limited from National Fertilizer Corporation of Pakistan

(Private) Limited through Privatization Commission of Pakistan for a consideration of Rs. 1,386 million. The effective control was obtained on 28 November

2008. This acquisition has brought about expansion and diversification of the Group's fertilizer business.


43 FINANCIAL INSTRUMENTS

43.1 Financial assets by class and category

Available Total





--

30,881,917


--

18,237,248


--

311,346,429


--

8,469,954


--

204,485,615


--

451,007,466


--

86,497,044

1,110,925,673

--

1,110,925,673

Available Total





--

30,881,917


--

16,390,492


--

440,376,611


--

6,913,381


--

49,335,712


--

440,376,611


--

293,485,492

1,277,760,216

--

1,277,760,216

2009

2010


Note 2010 2009

Rupees Rupees

43.2 Financial liabilities by class and category

Financial Financial

liabilities at liabilities at

amortized cost amortized cost

Loan from associates 9 340,000,000

340,000,000


10,353,448,233

Long term finances 11 3,212,735,482

1,856,398,302


279,865,312

Long term payables 13 31,135,199

31,135,199

Short term borrowings 16 4,787,718,650

2,103,084,646

Trade creditors 17 567,255,553

345,866,752

Bills payable 17 2,459,112,973

934,826,716

Accrued liabilities 17 177,942,296

103,675,281

Security deposits and retention money 17 38,945,798

44,138,753

Other payable 17 24,652,832

13,269,282

Mark-up accrued on borrowings 18 1,266,233,127

388,481,059

23,512,963,418

16,794,189,535

43.3 Fair values of financial instruments

43.3.1 Methods of determining fair values

43.3.2 Discount/interest rates used for determining fair values

44 FINANCIAL RISK EXPOSURE AND MANAGEMENT

Fair value is the amount for which an asset could be exchanged or liability be settled between knowledgeable willing parties in an arm's length transaction. As at

the reporting date, fair values of all financial instruments are considered to approximate their book values.

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including currency risk, interest rate risk and price risk). These

risks affect revenues, expenses and assets and liabilities of the Company.

The Board of Directors has the overall responsibility for establishment and oversight of risk management framework. The Board of Directors has developed a risk policy

that sets out fundamentals of risk management framework. The risk policy focuses on unpredictability of financial markets, the Company’s exposure to risk of adverse

effects thereof and objectives, policies and processes for measuring and managing such risks. The management team of the Company is responsible for administering

and monitoring the financial and operational financial risk management throughout the Company in accordance with the risk management framework.

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve as at the reporting date plus an

adequate credit spread.

Fair values of financial instruments for which prices are available from the active market are measured by reference to those market prices. Fair values

of financial assets and liabilities with no active market are determined by discounting estimated future cash flows at effective interest rate; the rate that

exactly discounts estimated future receipts/payments through expected life of the financial assets/liabilities or, when appropriate, a shorter period, to the

net carrying amount of the financial assets/liabilities, using prices from observable current market transactions.


44.1 Credit risk

Exposure to credit risk

2010 2009

Rupees Rupees

Loans and deposits 18,237,248

16,390,492

Trade debts - considered good 311,346,429

780,726,403



49,335,712

Due from holding company-unsecured, considered good 451,007,466

440,376,611


10,229,481

Cash and bank balances 85,869,815 292,903,913

1,097,928,009 1,589,962,612

Credit quality and impairment

Counterparties with external credit ratings

Counterparties without external credit ratings

Credit risk management

The Company’s exposure to financial risks, the way these risks affect the financial position and performance, and forecast transactions of the Company and the manner

in which such risks are managed is as follows:

Company’s financial assets does not carry significant credit risk with the exception of trade receivables, which is also very limited. In this respect, company

manages its risk by selling on advance payments or bank guarantees. Moreover, the Company avoids any significant exposure to a single customer.

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss, without taking

into account the fair value of any collateral. Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or

have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economics, political or other

conditions. Concentrations of credit risk indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.

Credit risk of the Company arises principally from the trade debts, trade deposits and other receivables. The carrying amount of financial assets represents the

maximum credit exposure. To reduce the exposure to credit risk the Company has developed a formal approval process whereby credit limits are applied to its

customers. The management continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful

of recovery.

Credit quality of financial assets is assessed by reference to external credit ratings, where available, or historical information about the counterparty default rates.

All counterparties, with the exception of customers, have external credit ratings determined various credit rating agencies and other regulatory authorities. Credit

quality of customer is assessed by reference to historical default rates.

These include bank deposits and accrued return thereon, deposits against finance leases and short term loans to related party. These are neither past due nor

impaired. Credit risk is considered minimal since the counterparties have reasonably high credit ratings as determined by various credit rating agencies. Due to

long standing business relationships with these counterparties and considering their strong financial standing, management does not expect non-performance

by these counterparties on their obligations to the Company.

These include trade receivables. The Company is exposed to credit risk in respect of trade receivables. Credit quality of trade receivables is assessed based on

historical default rates and present ages. Based on the historical data of the customers, company believes that no impairment allowance is necessary in respect

of trade debts.


44.2 Liquidity risk





579,962,685

53,244,000

106,633,874

420,084,811


14,332,109,474

3,395,740,381

6,172,784,136

4,763,584,957


4,997,244,394

929,291,866

2,176,707,282

1,891,245,246


346,786,634

109,872,041

118,457,296

118,457,297


31,135,199

--

--

31,135,199


3,682,738,510

3,682,738,510

--

--


4,807,394,206

4,807,394,206

--

--

Mark-up accrued on borrowings 1,266,233,127 1,266,233,127 1,266,233,127 -- -- 23,927,792,476

30,043,604,229

14,244,514,131

8,574,582,588

7,224,507,510





666,808,000

54,468,000

108,936,000

503,404,000


16,085,183,958

2,399,061,016

5,796,205,830

7,889,917,112


2,873,146,780

382,077,312

1,053,307,824

1,437,761,644


397,425,779

88,022,603

154,701,588

154,701,588


31,135,199

--

--

31,135,199


1,531,042,212

1,531,042,212

--

--


2,111,727,460

2,111,727,460

--

--

Mark-up accrued on borrowings 388,481,059

390,077,557

390,077,557

--

--

16,883,454,963 24,086,546,944 6,956,476,159 7,113,151,242 10,016,919,543

2010

2009

The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meeting its liabilities when due,

under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation .

The Company monitors cash flow requirements and produces cash flow projections for the short and long term. Typically, the Company ensures that it has

sufficient cash on demand to meet expected operational cash flows, including servicing of financial obligations. This includes maintenance of balance sheet

liquidity ratios, debtors and creditors concentration both in terms of overall funding mix and avoidance of undue reliance on large individual customer. The

Company also maintains various lines of credit with banking companies.

Liquidity risk is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due. Liquidity risk arises because of the possibility

that the Company could be required to pay its liabilities earlier than expected or difficulty in raising funds to meet commitments associated with financial liabilities

as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities

when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation, The following are

the contractual maturities of financial liabilities, including interest payment and excluding the impact of netting agreements:

Liquidity risk management

The contractual cash flows relating to the above financial liabilities have been determined on the basis of mark-up rates effective as at 30 June. The rates of

mark-up have been disclosed in note 10,11,12 and 16 to these financial statements.


Post balance sheet Total

As of (from July 01 to overdues as of

Nature of liability Note reporting date September 30, 2010) September 30, 2010


Bills payable 44.2.1 1,263,922,616

878,175,053

2,142,097,669

Markup on working capital Lines 44.2.2

385,080,356

Short term principle repayments 44.2.3 804,174,567

777,399,523

1,581,574,090

Markup on long term loans 44.2.4 308,154,002

608,726,006

916,880,008

Principal payable on long term loans 44.2.5 258,270,750

851,978,431

1,110,249,181

2,753,246,702 3,382,634,602 6,135,881,304

44.2.1

44.2.2

44.2.3

44.2.4

44.2.5

44.3 Market risk

Currency risk

Currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign rates. Currency risk arises mainly

from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies.

Financial Liabilities include Rs.2,459,112,973 (2009: Rs.934,826,716) which are subject to currency risk.

This represents amount due on account of various letter of credits (LC) established for purchase of raw material and trading product. The Company is in

discussion with the lenders for conversion of these LCs to long term loan. The lenders, in this context, has agreed in principal to the Company’s request,

and LCs are under restructuring. The company is in final stages of execution of a formal agreement to this effect. Rest of the LCs are in process of

payment and further used for procurement of raw materials essential for smooth operations of the company

The represents amount due on account of redeemable capital and long term loans provided to the company for urea revamp project and acquisition of the

company and its subsidiary Hazara Phosphate Fertilizers (Pvt.) Ltd. Due to increase in markup rates and massive devaluation of pak rupee, significant

funds have been routed to markup and project procurements. Therefore, Company anticipated the cash flow shortfall for principal repayment and

discussed the matter with lenders. Considering the situation, it is proposed to allow 2 years of grace period for principal repayment from the existing due

date. The lenders, in this context, has agreed in principal to the restructuring proposal. The company is in final stages of execution of a formal

agreement to this effect.

This represents interest on redeemable capital and long term loans provided to the company for revamp project and acquisition of the company and its

subsidiary. And is outstanding as at the reporting date.

This represents amount due on account of finance provided for the retirement of letter of credits (LC) established for purchase of raw material and trading

product. The Company is in discussion with the lenders for conversion of these loans to long term loan. The lenders, in this context, has agreed in

principal to the Company’s request. The company is in final stages of execution of a formal agreement to this effect.

The Company, during the year and subsequently, faced operational issues due to extended gas load shedding in winter and gas curtailment by Government of

Pakistan for shifting the gas towards power sector to reduce electricity load shedding. Additionally, the Company has faced massive devaluation of the Pak

Rupee over the past couple of years which increased urea project cost manifold, with high interest/mark-up rates resulted in substantially high finance costs on

project finance and acquisition loans. This has perpetuated temporary, liquidity issues. As result, the following liabilities as of balance sheet date and as of date

the financial statements are authorised for issue, are overdue. The details are as follows:

This represents interest payable on working capital finance provided to the company for smooth flow of working capital.

The management has taken up this matter with the providers of debt finance for re-profiling of the existing liabilities as more fully explained in note 2.2 to the

financial statements.

Overdues


Interest rate risk

Price risk

45 CAPITAL MANAGEMENT

Unit 2010 2009

Total debt Rupees 14,159,966,990

12,829,711,847

Total equity Rupees 8,671,865,770

7,757,431,963

Total capital employed 22,831,832,760

20,587,143,810

Gearing %age 62% 62%

2010 2009

Rupees Rupees

46 RESTRICTION ON TITLE, AND ASSETS PLEDGED AS SECURITY

Mortgages and charges

Hypothecation of stocks and movables 25,248,096,666

23,730,096,666

Hypothecation of book debts and receivables 25,248,096,666

23,730,096,666

Mortgage over land and building 19,467,333,333

19,467,333,333

Hypothecation of plant and machinery 22,380,999,333

21,966,999,333

The Group is not exposed to price risk as the fair value of its financial institution is not based on market prices.

Financial assets includes balances of Rs.451,007,466 (2009: Rs. 440,376,611 ) which are subject to interest rate risk. Applicable interest rates for financial

assets have been indicated in respective notes.

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Board of Directors monitors the return on capital and level of dividends to ordinary shareholders. The Company seeks to keep a balance between the higher return

that might be possible with higher level of borrowings and the advantages and security afforded by a sound capital position. The Company monitors capital using the

gearing ratio which is debt divided by total capital employed. Debt comprises, redeemable capital, long term finances and liabilities against assets subject to finances

lease, including current maturity. Total capital employed includes total equity as shown in the balance sheet, including surplus on revaluation of property, plant and

equipment and subordinated loan, plus debt. The Company's strategy is to maintain an optimal capital structure in order to minimize cost of capital. Gearing ratio of the

Company as at the reporting date is as follows:

Interest rate risk represents the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Financial liabilities includes balances of Rs.18,871,218,598 (2009: Rs.14,929,449,238) which are subject to interest rate risk. Applicable interest rates for

financial liabilities have been indicated in respective notes.

There were no changes in the Company's approach to capital management during the year. Further the Company is not subject to externally imposed capital

requirements, except those, related to maintenance of debt covenants, commonly imposed by the providers of debt finance which the Company remains compliant with

as at the reporting date.


47 OPERTING SEGMENTS

These financial statements have been prepared on the basis of single reportable segments.

47.1

47.2

47.3

47.4

48 PLANT CAPACITY AND ACTUAL PRODUCTION

Unit 2010 2009

Rupees Rupees

Agritech Limited


346,500


379,105

Production efficiency %age 107 109 HPFL


81,000


90,440

Production efficiency %age 125

112

49 DATE OF AUTHORIZATION FOR ISSUE

50 GENERAL

Figures have been rounded off to the nearest rupee.

Comparative figures have been rearranged, where necessary for the purpose of comparison. There were no significant reclassifications during the year.

These financial statements were authorized for issue on October 09, 2010 by the Board of Directors of the Company.

100 % (2009: 100%) of the gross sales of the Group are made to customers located in Pakistan.

One customer of the Group accounts for 5.91% (2009: 8.52%) of gross sales of the Group for the year.

All non-current assets of the Group at 30 June 2010 are located in Pakistan.

Revenue from sales of fertilizers represents 99.84% (2009: 99.82%) of the gross sales of the Group.


Agritech Limited (formerly Pak American Fertilizers Limited)124

Pattern of Shareholding as at June 30, 2010

Number of Shareholders From To

Shareholding Total Shares Held

924

460,474

108,679

233,103

62,661

106,889

114,701

50,000

29,700

150,000

164,210

84,800

102,756

281,650

641,458

659,933

815,800

1,128,967

1,250,000

1,333,333

1,809,612

3,000,000

6,666,666

6,666,667

7,697,500

8,333,333

11,499,000

12,000,000

40,000,000

120,420,000

166,557,184

100

500

1000

5000

10000

15000

20000

25000

30000

50000

55000

85000

105000

285000

645000

660000

820000

1130000

1250000

1335000

1810000

3000000

3335000

6670000

7700000

8335000

11500000

12000000

20000000

120420000

166560000

1

101

501

1001

5001

10001

15001

20001

25001

45001

50001

80001

100001

280001

640001

655001

815001

1125001

1245001

1330001

1805001

2995001

3330001

6665001

7695001

8330001

11495001

11995001

19995001

120415001

166555001

392,430,000 1,202

22

925

111

91

8

8

6

2

1

3

3

1

1

1

1

1

1

1

1

1

1

1

2

1

1

1

1

1

2

1

1

Total

IndividualsFinancial InstitutionInvestment CompaniesFundsJoint Stock CompaniesModarbas and Mutual FundsOthers

1,172351

1722

9,553,49025,165,66720,090,716

54,500329,685,194

3,418,1334,462,300

Shareholder'sCategory

Number ofShareholders

Number ofShares Held Percentage

2.436.415.120.01

84.010.871.14

1,202 392,430,000 100.00

Annual Report 2010 125

Information as required under Code of Corporate Governance

Shareholder'sCategory

Number ofShareholders

Number ofShares Held

Associated Companies, Undertakings and related parties

NIT and ICP

Directors, Chief Executive Officerand their spouse and minor children

Mr. Humayun N. Shaikh

Mr. A Jaudet Bilal

Mr. Mueen Afzal

Mr. Ahmed H. Shaikh

Mr. Khalid A.H. Al-Sagar

Mr. Irfan Nazir Ahmad

Mr. M. Faisal Muzammil

Mr. Khaleeque-ur-Rehman

Chairman

CEO

Director

Director

Director

Director

Director

Director

Executives

Public Sector Companies and Corporation

Banks, DFIs, NBFI, Insurance Companies

Leasing Companies, Modarabas & Mutual Funds

Sharesholdes ten precent ormore voting interest of the Company

Detail of trading in shares by the Directors,CEO, CFO, Company Sceretary,their Spouses and Minor Children.

1

1

1

1

1

1

1

1

1

1

6,666,667

1

501

1

1

1

1

1

1

Nil

11

8

5

Nil

329,685,187

45,256,383

7,934,933

Azgard Nine Ltd. 1 313,423,177

313,423,177

Nil

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