Fatima 2022

CATALYSING
GREEN
REVOLUTION
Agriculture is the backbone of our economy. We believe in striving for
Catalysing Green Revolution in Pakistan through the implementation of
precision technology driven farming operations to ensure national food
security and economic prosperity of the country. The modern farming
initiatives will transform agriculture that will address the issues of fiscal
and current account deficits significantly.
TABLE OF
CONTENT
Key Highlights 2022 02 Consolidated Financial
Vision & Mission Statement 04 Statements
Corporate Values 04
Code of Conduct 06 Report of the Audit Committee 82
Overall Strategic Objectives 07 Statement of Compliance 84
Management’s Objectives 08 Independent Auditor’s Review Report to the Members 86
Nature of Business 08 Independent Auditors’ Report to the Members 87
Communication of Financial Results 09 Consolidated Statement of Financial Position 92
Company Profile 10 Consolidated Statement of Profit or Loss 94
Landmark Events 11 Consolidated Statement of Comprehensive Income 95
Company Information 12 Consolidated Statement of Changes in Equity 96
Profiles of the Directors 14 Consolidated Statement of Cash Flows 97
Board Structure and Committees 18 Notes to the Consolidated Financial Statements 98
Key Management 22 Separate Financial Statements
Organizational Chart 26
Independent Auditor’s Report to the Members 149
Business Review Statement of Financial Position 154
Chairman’s Review Report 28 Statement of Profit or Loss 156
CEO’s Message 30 Statement of Comprehensive Income 157
Directors’ Report to the Shareholders 32 Statement of Changes in Equity 158
Annexures to Directors’ Report 48 Statement of Cash Flows 159
SWOT Analysis 55 Notes to the Financial Statements 160
Corporate Governance 56 Shareholders’ Information
Notice of the 20th Annual General Meeting 60
Statements under section 134(3) of the
Information Technology 66
Operational Performance 67 Companies Act, 2017 209
Marketing and Sales 68 Pattern of Shareholding 218
Sustainability Overview 70 Form of Proxy 223
Health, Safety and Environment standards,
Form of Electronic Dividend Mandate (IBAN) 227
systems and policies 72
Talent Sustainability 76
Corporate Social Responsibility 78
Our Reporting Parameters 80
CATALYSING
GREEN 01
REVOLUTION Annual Report 2022
KEY
HIGHLIGHTS
2022
2,829 2,735 152,231

MT in “000” MT in “000” Rs in Million
Fertilizer Production Fertilizer Sales Revenue
14,124 6.73 3.50

Rs in Million Rupees Rupees
Profit After Tax Earnings Per Share Dividend Per Share
12.55 19,445 104.6

Percentage Rs in Million Combined Safe Million
Return on Capital Contribution to National Man Hours
Employed Exchequer
02 Fatima Fertilizer Company Limited

25,799 62 112,647
Numbers Numbers Man Hours
Trees Planted Women Development Investing in Manpower
(Female Staff in Head Office)
29,043 2,545 1,021

Numbers Numbers Rs in Million
Agriculture Farms Permanent Employees Investment in CSR
Addressed
CATALYSING
GREEN 03
VISION & MISSION
STATEMENT
VISION
To be a world class manufacturer of fertilizer and ancillary products, with a focus on safety,
quality and positive contribution to national economic growth and development. We will care
for the environment and the communities we work in, while continuing to create shareholders’
value.
MISSION
• To be the preferred fertilizer company for farmers, business associates and suppliers by
providing quality products and services.
• To provide employees with an exciting, enabling and supportive environment to excel in, be
innovative, entrepreneurial in an ethical and safe working place based on meritocracy and
equal opportunity.
• To be a responsible corporate citizen with a concern for the environment and the
communities we deal with.
CORPORATE VALUES
These are the values that Fatima Fertilizer Company Limited epitomizes, and are
reflected in all our transactions and interactions. Congruence to these values
has been a part of our business strategy. They are bound in the very fabric of our
organization, shaped by organizational processes, procedures and practices.
Integrity Innovation
Our actions are driven by honesty, ethics, We encourage creativity and recognize
fairness and transparency. new ideas.
Teamwork Health, Safety, Environment & CSR

We work collectively towards a common goal. We care for our people and the communities
around us.
Customer Focus Excellence

We believe in listening to our customers and We strive to excel in everything we do.
delivering value in our products and services.
Valuing People
We value our people as our greatest resource.

CODE OF
CONDUCT
Fatima Fertilizer Company Limited (Fatima) conducts its business with the highest
ethical standards in full compliance with all applicable laws. Honesty and integrity
take precedence in all relationships including those with customers, suppliers,
employees and other stakeholders.
Ethics and Business Practices Assets and Proprietary

• We believe in conducting the Company’s business in Information
a manner that respects, protects and improves the
• We consider our Company’s assets, physical and
environment and provides employees with a safe and
intellectual, very valuable. We have, therefore, an
healthy workplace.
obligation to protect these assets in the interest of the
• We conduct our business in an environmentally Company and its shareholders.
responsible and sustainable manner. Employees must
• Protection of the Company’s information is important
be completely familiar with the permits, Health Safety
for our business. All employees are expected to know
and Environment policy, local laws and regulations
what information is proprietary and which must not be
that apply to their work.
disclosed to unauthorized sources. Employees are
• All employees are expected to understand the responsible for applying all available tools to manage
laws and business regulations related to their the Company’s information resources and records.
work and comply fully so that our shareholders,
employees, customers, suppliers, stakeholders and
the Government have complete faith in the way we Relations with Business
operate and that our business decisions are made Partners
ethically and in the best interests of the Company.
• We seek to do business with suppliers, vendors,
• Employees are obligated to act in accordance with
contractors and other independent businesses who
the Company’s code of Ethics and Business Conduct
demonstrate high standards of ethical business
and are restricted to using only legitimate practices
behaviour. Our Company will not knowingly do
in commercial operations and in promoting the
business with any persons or businesses that operate
Company’s position on issues before Governmental
in violation of applicable laws and regulations,
authorities. Inducements intended to reward
including Employment, Health, Safety and
favourable decisions and governmental actions are
Environmental laws. We shall take steps to assure that
unacceptable and prohibited.
our suppliers, vendors and contractors understand
• Employees are prohibited from using their positions, the standards we apply to ourselves, and expect the
Company property or information for personal gain, same from them.
and from competing with the Company. Employees
are also prohibited from taking advantage from
opportunities that become available through the use Our Employees
of Company information, property or their position.
• We believe that highly engaged employees are the
key ingredient in professional development and
business success. Therefore, we invite our employees
to contribute their best and to avail the opportunities
for improvement and growth. We are an equal
opportunity employer and promote gender diversity,
self development and innovation.
• We provide employees with tools, techniques and
training to master their current jobs, broaden their
skills and advance their career goals.

OVERALL
STRATEGIC
OBJECTIVES
We aim to be the industry leader and a sustainable contributor to the
nation’s agricultural sector.
We aspire to continuously improve by achieving and exceeding

global standards for product safety, quality, HSE, manufacturing and
management excellence.
We continue to pursue a global reach by leveraging and maximizing

our fertilizer / business potential. The Company aims to establish
strategic alliance and partnerships with global technology providers in
order to bring innovation and excellence in all our processes.
Our strategy revolves around the potential of our employees who are
critical to our long term growth and success. Our Company provides
the employees an opportunity to build their skills and professional
capabilities while enjoying their work place. Critical to our strategy
are also our technological resources and the image of our brand –
Sarsabz.
CATALYSING
GREEN 07
MANAGEMENT’S OBJECTIVES
& STRATEGIES FOR MEETING
THOSE OBJECTIVES
Sr. No. Management Objectives Strategies / KPIs to meet objectives
Aspire to be the market leader in fertilizer
1 Annual market share increases above main competitors
business
2 Efficient deployment of resources Positive cash flow from operations year on year
Investment in human resources and their Low turnover of high potential employees
3
capacities Providing career opportunities to talented professionals in an organized and transparent manner
4 Taking Global Initiatives Think globally when evaluating business expansion
Operational excellence for optimum plant
5 Develop a Risk Management Strategy and ensure continuous improvement in business processes
performance
Through market share enhancement and geographical diversification while nurturing our
6 Focus on enhancing sales relationship with existing customers and educating farmers on the use of Urea, NP, CAN, through
use of state of the art technology
Make new in-roads in distribution and
7 At least one next generation solution to distribution and channel management. Leverage technology.
create new businesses and channels
Excel in centralized strategy development and leverage technical, supply chain and other
8 Synergize investment and capacities
administrative functions.
Augment profitability with cost
Continuous improvement of Shared Services operations and consider profit center concepts for
9 effectiveness and lean business
certain functions
operations
Effective financial controls for swift
10 Financial indicators and KPI driven timelines to be monitored for continuous improvement
decision making at all levels
To be a responsible business concern, Investments to be focused on maximum impact on our communities. Monitor impact on regular
11
through CSR and sustainability initiatives basis.
Significant Changes in Relationship between Entity’s

Objectives and Strategies Results and Management’s
Fatima’s long term business objectives and the strategies Objectives
to meet those objectives are carefully developed and no
Performance of the Company is the realization of
major changes have occurred during the year to compel
management’s goals and objectives, which are
the Company to alter its approach to achieve these
strategically developed to increase the wealth of
objectives. However, the Company is looking at expanding
stakeholders. The said results are evaluated quarterly
through diverse investments, and striving for Catalysing
against the respective division’s strategic objectives to
Green Revolution in Pakistan.
confirm achievement.
NATURE OF BUSINESS
The principle activity of the Company is manufacturing, production, buying, selling, importing and exporting of fertilizers
and chemicals. It is capable of producing two intermediary products, i.e. Ammonia and Nitric Acid and three final products
which are Urea, Calcium Ammonium Nitrate (CAN) and Nitro Phosphate (NP). Fatima plays a significant role in nourishing
soils and enriching lives through its diverse fertilizer portfolio.

COMMUNICATION OF
FINANCIAL RESULTS
Periodic financial statements of the Company were circulated to Directors duly endorsed by the CEO and the CFO. Half
yearly and annual financial statements were initialed by the external auditors for presentation to Board Audit Committee
and the Board of Directors for approval.
Furthermore, quarterly unaudited financial statements of the Company along with Directors’ Report, were approved,
published and circulated to concerned quarters on a timely basis. Half yearly financial statements were subject to a limited
scope review by the statutory auditors. These annual financial statements have been audited by the external auditors and
approved by the Board and will be presented to the shareholders at the AGM for adoption. The said financial statements
circulated on PUCARS well within the statutory prescribed timelines and posted on the Company’s website accordingly.
Calendar of Major Financial Events held in 2022
Board Meeting AGM Board Meeting

For the Year Ended 2021 For the Year Ended 2021 For Q1 2022
April 07, 2022 April 29, 2022 April 22, 2022
Board Meeting Board Meeting Corporate Briefing

For Q2 2022 For Q3 2022 Session
August 25, 2022 Oct 26, 2022 Dec 23, 2022
Financial Calendar 2023
Board Meeting AGM Board Meeting

For Q1 2023
For the Year Ended 2022 For the Year Ended 2022
3rd Week of
April 03, 2023 April 28, 2023
April 2023
Board Meeting Board Meeting

For Q2 2023 For Q3 2023
3rd Week of 3rd Week of

August 2023 October 2023
CATALYSING
GREEN 09
COMPANY PROFILE
Fatima Fertilizer Company Limited (Fatima) is a The Ammonia plant was revamped to enhance its
joint venture between two major business groups in production capacity by 10% from 1500 MTPD to 1650
Pakistan namely, Fatima Group and Arif Habib Group, MTPD along with an improvement in the energy index and
with its head office located in Lahore. Three units of the reliability at a cost of USD 58 Million in 2015. Improvements
Company are situated across the province of Punjab at made in 2017 and 2019 further elevated daily production
three different strategic locations namely Mukhtar Garh, capacity to 1713 MTPD. In 2017, the Advanced Process
Sadiqabad (Sadiqabad Plant), Khanewal Road, Multan Control project, the first of its kind in Pakistan, was
(Multan Plant), and 28-KM Sheikhupura Road, Chichoki implemented at the Ammonia plant, further enhancing
Mallian (Sheikhupura Plant). capacity and improving the energy index. Via in house
modifications, debottleneckings, Phosphoric Acid based
Sadiqabad Plant production scheme etc., over the years the Company has
managed to increase its production capacity of CAN and
The fertilizer complex, producing mixed fertilizer products, NP by around 12% and 36% i.e. 50K and 130K MT per
is a fully integrated production facility, located at annum respectively.
Sadiqabad, District Rahim Yar Khan. The foundation stone
was laid on April 26, 2006, by the then Prime Minister of The Complex is housed on 8,884 kanals of land, which
Pakistan. The Complex has a dedicated gas allocation provides modern housing for its employees with all
of 110 MMCFD from Mari Gas Field and has 56 MW necessary facilities, including a well managed school, a
captive power plants in addition to off sites and utilities. medical center, and a large number of sports facilities.
Commercial production commenced on July 01, 2011. The
Complex, at its construction peak, engaged over 4,000 Sheikhupura Plant
engineers and technicians from Pakistan, China, USA,
Japan, and Europe. The Sheikhupura Plant was acquired by the Company in
2015. It is capable of producing 445,500 metric tons per
The Complex has the following original design and current annum of Urea and is located at 28-KM Sheikhupura Road,
revamped annual capacities as under: Chichoki Mallian.
Plant
Original Design
Current
Revamped
Multan Plant
Capacity
Capacity The Company acquired the production and operating
500,000 500,000 Plants (Ammonia, Urea, Nitric Acid, Nitro Phosphate,
Urea Calcium Ammonium Nitrate, and Clean Development
metric tons metric tons
Mechanism) having total nameplate capacity of 846,900
Calcium
420,000 470,000 metric tons per annum of mixed fertilizer products, from its
Ammonium
metric tons metric tons associated company namely Pakarab Fertilizers Limited
Nitrate (CAN) with effect from September 01, 2020, located at Khanewal
Nitro 360,000 490,000 Road, Multan.
Phosphate (NP) metric tons metric tons
Fatima Fertilizer Company Limited via its three plants
in operations at Sadiqabad, Multan and Sheikhupura is
serving the nation and stakeholders with a cumulative
nameplate capacity of 2.57 million MT per year.

LANDMARK EVENTS
2003-2008 2015 2020

• Company Incorporation • Ammonia Plant Revamped to • Acquisition of production
• Gas Allocation enhance capacity by 10% and operating plants from an
• Strategic acquisition of DH associated company, resulting
• GSA Signing
Fertilizers (now Sheikhupura Plant) in 2.57 Million MT combined
• Ground Breaking production capacity of three plants
• Dupont declared Fatima Site OSHA
• Financial Closure achieved • +77 Safe Million Man Hours
Compliant at level 3.6
• Sadiqabad Plant reliability yielding
ever highest on-stream-factor
2016
(97.8%)
• Highest ever sales volume
2009 • Achieved production of 1.38
• Market Share improved from 23%
to 24%
Million ton
• Ammonia Furnace 1st Fire • First ever loyalty program, “Sarsabz
• Issuance of Sukuk certificates. Royals” executed, engaging our
• CAN Plant Production
IPO over subscribed by more dealer network for the long run
than 4 times
• Launch of Digital Marketing
• Successful completion of initiatives that provided combined
Ammonia Revamp and reach of over 300 Million views
Debottlenecking Project with
2010 2021
‘’better than design’’ results
•
•
Initial Public Offering
Ammonia Plant Production
2017 • Sadiqabad plant achieved the
Guinness World Records title for
clocking 60.22 Million Safe Man-
• Urea Plant Production • Awarded excellence rating Hours
by Dupont (Level-4) in safety
• +91 combined Safe Million Man-
systems
Hours for three fertilizer plants
• Ammonia plant capacity
• Sadiqabad plant sustained its
2011
enhanced by 3.5% and
Excellence level on DuPont’s
efficiency improved by 1.5%
Process Safety Management
through various measures
System (PSM)
• NP Plant Production • Sheikhupura Plant achieved
Compliance level on DuPont’s PSM
2018
• Declaration of Commercial
Operations • Ever highest production by
Sadiqabad Plant in a Turnaround
• Additional 14,000 MT NP year
production by Phosphoric Acid • Highest ever sales volume and
2012 •
route
47 Safe Million Man Hours •
profitability
Highest sales revenue across the
• Conversion and Redemption of • Zero Loss Time Injury Fertilizer industry in Pakistan
Preference Shares • Winner of first ever International
Award – MarCom International
USA
2013 2019 2022

• Ammonia Revamp Study • Amalgamation of our two • Zero Total Recordable Injury
Completed fertilizer plants - Fatima Fertilizer Rate (TRIR)
and Fatimafert • 104.6 combined Safe Million
• Basic Engineering Design
contract for Ammonia Revamp • +53 Safe Million Man Hours Man-Hours
awarded • NP revamp by 22% • Sadiqabad Plant successfully
• EMS 1st Party Audit & L-II secured AWS International
Procedures Roll-out Water Stewardship Certification
• Ever Highest Urea Sale • A new benchmark of highest
2014 •
811,000 ton
Market Share improved from
annual production, highest ever
sales volume and sales revenue
20 to 23% • Acquisition of Fatima Cement
• Contract with Dupont signed Limited, and consolidation
for PSM • Agricultural Technology MOUs
of fertilizer business by
and Co Sponsorship agreement
• Basic Engineering Design amalgamating associated
with Chinese entities signed.
contract for Ammonia Revamp company Pakarab Fertilizers
awarded • Launch of Sarsabz Pakistan subject to requisite approvals.
Salam Kissan – Kissan Day
2019
CATALYSING
GREEN 11
COMPANY
INFORMATION
Board of Directors Mr. Atif Zaidi
Chief Information Officer
Mr. Arif Habib Mr. Salman Ahmad

Chairman Director Internal Audit
Mr. Fawad Ahmed Mukhtar Mr. Pervez Fateh

Chief Executive Officer G.M. Manufacturing
Mr. Fazal Ahmed Sheikh Mr. Faisal Jamal

Director Corporate HSE & Technical Support Manager
Mr. Faisal Ahmed Mukhtar

Director
Audit Committee Members
Mr. Muhammad Kashif Habib
Director Mr. Tariq Jamali
Chairman
Ms. Malika Nait Oukhedou
Independent Director Mr. Faisal Ahmed Mukhtar
Member
Mr. Tariq Jamali
Independent Director Ms. Malika Nait Oukhedou
Member
Chief Operating Officer & Mr. Muhammad Kashif Habib

Member
Chief Financial Officer
Mr. Asad Murad HR and Remuneration
Committee Members
Director Legal & Ms. Malika Nait Oukhedou
Company Secretary Chairperson
Mr. Fawad Ahmed Mukhtar

Mr. Omair Mohsin Member
(communications@fatima-group.com)
Mr. Muhammad Kashif Habib
Member
Key Management
Mr. M. Abad Khan Nomination and Risk
Advisor to the CEO
Management Committee
Ms. Sadia Irfan
Director Human Resources
Members
Mr. Iftikhar Mahmood Baig Mr. Fazal Ahmed Sheikh
Director Business Development Chairman
Mr. Ahsen-ud-Din Mr. Muhammad Kashif Habib

Director Technology Division Member
Mr. Ausaf Ali Qureshi Mr. Tariq Jamali

Advisor MFC Project Member
Mr. Hassan Altaf

Director Strategy
Mrs. Rabel Sadozai

Director Marketing and Sales

Legal Advisors Meezan Bank Limited
National Bank of Pakistan
M/s. Chima & Ibrahim Advocates Soneri Bank Limited
1-A/245, Tufail Road, Lahore Cantt Standard Chartered Bank (Pakistan) Limited
Summit Bank Limited
Auditors The Bank of Punjab

United Bank Limited
The Bank of Khyber
M/s. Yousuf Adil
Chartered Accountants, Lahore
134-A, Abu Bakar Block, New Garden Town, Lahore Registered Office /
Tel: +92 42 3591 3595-7, +92 42 3544 0520
Fax: +92 42 3544 0521
Head Office
E-110, Khayaban-e-Jinnah,
Registrar and Share Lahore Cantt, Pakistan

UAN: 111-FATIMA (111-328-462)
Transfer Agent Fax: +92 42 3662 1389
CDC Share Registrar Services Limited

CDC House, 99-B, Block ‘B’ Plant Sites
S.M.C.H.S., Main Shahra-e-Faisal
Mukhtar Garh, Sadiqabad,
Karachi-74400
Distt. Rahim Yar Khan, Pakistan
Tel: Customer Support Services
Tel: 068 – 5951000
(Toll Free) 0800-CDCPL (23275)
Fax: 068 – 5951166
Fax: (92-21) 3432 6053
Email: info@cdcsrsl.com
Khanewal Road, Multan, Pakistan
Website: www.cdcsrsl.com
Tel: 061 – 90610000
Fax: 061 – 92290021
Bankers
28-KM Sheikhupura Road, Chichoki Mallian, Pakistan
Allied Bank Limited Tel: 042 – 37319200 – 99
Askari Bank Limited Fax: 042 – 33719295
Bank Alfalah Limited
Bank Al-Habib Limited
Citibank N.A
Dubai Islamic Bank Pakistan Limited
Faysal Bank Limited
Habib Bank Limited
Habib Metropolitan Bank Limited
Industrial & Commercial bank of China (ICBC)
JS Bank Limited
MCB Bank Limited
CATALYSING
GREEN 13
PROFILE OF THE
DIRECTORS
Mr. Arif Habib

Chairman
Mr. Arif Habib is the Chairman of Fatima Fertilizer Company Limited and the Chief Executive
of Arif Habib Corporation Limited, the holding company of Arif Habib Group. He is also the
Chairman of Aisha Steel Mills Limited, Javedan Corporation Limited (the owner of Naya
Nazimabad) and Sachal Energy Development (Pvt.) Limited and Arif Habib Dolmen REIT
Management Limited.
Mr. Arif Habib remained the elected President/Chairman of Karachi Stock Exchange for six
times in the past and was a Founding Member and Chairman of the Central Depository
Company of Pakistan Limited. He has served as a Member of the Privatisation Commission,
Board of Investment, Tariff Reforms Commission and Securities & Exchange Ordinance
Review Committee. He has been a member of the Prime Minister’s Economic Advisory
Council (EAC) and the Think Tank constituted by the Prime Minister on COVID-19 related
economic issues. He is currently a member of the Prime Minister’s Task Force on attracting
Foreign Direct Investment (FDI) and a member of Advisory Committee of Planning
Commission.
Mr. Habib participates significantly in welfare activities. He remains one of the directors of
Pakistan Centre for Philanthropy (PCP), Habib University Foundation, Karachi Education
Initiative (KSBL), Arif Habib Foundation and Naya Nazimabad Foundation as well as trustee of
Memon Health & Education Foundation (MMI) and Fatimid Foundation.

Mr. Fawad Ahmed Mukhtar Mr. Fazal Ahmed Sheikh
Chief Executive Officer / Director Executive Director
Mr. Fawad Ahmed Mukhtar is the Chief Executive Officer and Mr. Fazal Ahmed Sheikh is a Director of the Company. He holds a
Director of the Company. He has extensive experience in degree in Economics from the University of Michigan, Ann Arbor,
manufacturing and industrial management. In addition to being a USA. He has played a strategic role in Fatima Group’s expansion
successful business leader, he is also a renowned philanthropist. and success. He is the CEO of Fatima Energy Limited, Fatima
After graduation, he has spent more than 32 years developing his Electric Company Limited, Fatima Management Company Limited,
family business into a sizable conglomerate. Pakarab Energy Limited and Air One (Pvt.) Limited. He is also a
member of the Board of Directors at Pakarab Fertilizers Limited,
Mr. Mukhtar leads several community service initiatives of the Fatimafert Limited, Reliance Commodities (Pvt.) Limited, Fatima
Group including the Fatima Fertilizer Trust and Welfare Hospital, Sugar Mills Limited, Fatima Holding Limited, Fatima Cement
Fatima Fertilizer Education Society and School and Mukhtar A. Limited and Fatima Steel Mills Limited.
Sheikh Welfare Trust, among others. He is also the Chairman of
Reliance Weaving Mills Limited, Fatima Holding Limited, Fatima
Sugar Mills Limited, Reliance Commodities (Pvt.) Limited, Air One
(Pvt.) Limited and is also the CEO of Pakarab Fertilizers Limited,
Fatimafert Limited, Fatima Cement Limited and Fatima Trading
Company (Pvt.) Limited. He is also the Director of Fatima Electric
Company Limited, Pakarab Energy Limited and Fatima Steel Mills
Limited. In addition, he is a member of the Board of Directors
of the National Management Foundation, a sponsoring body of
Lahore University of Management Sciences (LUMS).
CATALYSING
GREEN 15
PROFILE OF THE
DIRECTORS
Mr. Faisal Ahmed Mukhtar Mr. Muhammad Kashif Habib

Non-Executive Director Non-Executive Director
Mr. Faisal Ahmed Mukhtar is a Director of the Company. He is Mr. MUhammad Kashif Habib is the Director of the Company.
the former City District Nazim of Multan, and continues to lead He is also the Chief Executive of Power Cement Limited. Being
welfare efforts in the city. He is the Chief Executive Officer of a member of the Institute of Chartered Accountants of Pakistan
Reliance Weaving Mills Limited, Fatima Sugar Mills Limited, (ICAP) he completed his articleship from A.F. Ferguson & Co. (a
Farrukh Trading Company Limited and Fatima Steel Mills Limited. member firm of Price Waterhouse Coopers). Mr. Kashif Habib
He is also the Chairman of the Workers Welfare Board at Pakarab is dedicated to improving the country’s energy situation and is
Fertilizers Limited and is a member of the Board of Directors at engaged with experts to make renewable energy a more feasible
Pakarab Fertilizers Limited, Fatima Cement Limited, Fazal Cloth and accessible solution not just for industry but also the masses.
Mills Limited, Fatima Electric Company Limited, Pakarab Energy
Limited, Fatimafert Limited, Reliance Commodities (Pvt.) Limited He is also the member of Board of Directors of Arif Habib
and Air One (Pvt.) Limited. Additionally, he was also a member in Corporation Limited, Aisha Steel Mills Limited, Javedan
the Provincial Finance Commission (Punjab), Steering Committee Corporation Limited, MCB-Arif Habib Savings & Investments
of Southern Punjab Development Project and Decentralization Limited, Arif Habib Equity (Pvt.) Limited, Alternates (Pvt.) Limited,
Support Program. Mr. Mukhtar has also served as the Chairman Arif Habib Foundation, Arif Habib Development and Engineering
of Multan Development Authority and was also a member of a Consultants (Pvt.) Limited (formerly known as Arif Habib Real
syndicate of Bahauddin Zakariya University, Multan. Estate Development Company (Pvt.) Limited), Black Gold Power
Limited, Essa Textile And Commodities (Pvt.) Limited, Fatimafert
Limited, Fatima Cement Limited, Fatima Packaging Limited,
Nooriabad Spinning Mills (Pvt.) Limited, Pakarab Fertilizers
Limited, Pakistan Opportunities Limited, Rotocast Engineering
Company (Pvt.) Limited, Safemix Concrete Limited and Siddiqsons
Energy Limited.

Ms. Malika Nait Oukhedou Mr. Tariq Jamali
Non-Executive / Independent Director Non-Executive / Independent Director
Ms. Malika Nait Oukhedou holds a B.Sc. in Industrial Science & Mr. Tariq Jamali is Ex-SEVP / Group Chief Centralized Operations
Technology in Chemistry from PXL University of Applied Science & Administration Group at National Bank of Pakistan (NBP). He
in Belgium. Ms. Malika joined Haldor Topsoe Middle East in 2018 also held the charge of President NBP (Acting). He joined NBP
as an Account Manager in Chemical Business Unit, where she in 1987 and has held numerous senior management positions at
manages the sales, after sales and relationships with various Regional and Head Office levels.
customers across the Gulf region. In the past Ms. Malika worked in
The Netherlands for an operator simulation software company and He headed Assets Recovery Group, Logistics Support Group,
later on decided to move to Bahrain to join the catalysis business Commercial & Retail Banking Group and Compliance Group since
in 2013. Ms. Malika inherently understand that the customer is 2009. His work experience spans more than 30 years at different
the single most valuable asset an organization can have. She key positions. He has diversified work experience, knowledge and
brings a unique value to the organization, supporting Fatima in knack of working at different levels of management. He holds MBA
development and growth. Degree from University of Dallas, USA and BS (Civil Engineering)
from University of Texas at Arlington, USA and DAIBP from Institute
of Bankers Pakistan, Karachi.
CATALYSING
GREEN 17
BOARD STRUCTURE
AND COMMITTEES
Board Structure Terms of Reference and Salient Features
In addition to any other responsibilities which may be
Fatima’s Board consists of eminent individuals with diverse
assigned from time to time by the Board, the main purpose
experience and expertise. Currently, it comprises seven
of the Audit Committee is to assist the Board by performing
directors including a female director, Ms. Malika Nait
the following main functions:
Oukhedou. All of the Board members have been elected
by the shareholders for a term of three years commenced • to monitor the quality and integrity of the Company’s
from June 30, 2020. Ms. Malika Nait Oukhedou has accounting and reporting practices;
replaced Ms Anja E. Nielsen. There are two Executive • to oversee the performance of the Company’s internal
Directors including the Chief Executive Officer, and five audit function;
Non-Executive Directors including the Chairman and two
• to review the external auditor’s qualification,
Independent Directors.
independence, performance and competence; and
The Board provides leadership and strategic guidance • to comply with the legal and regulatory requirements,
to the Company; oversees the conduct of business and the Company’s by laws and internal regulations.
promotes the interests of all stakeholders. It reviews
corporate policies, overall performance, accounting The Terms of Reference of the Audit Committee have
and reporting standards, and other significant areas of been drawn up and approved by the Board of Directors
management, corporate governance, and regulatory in compliance with the Code of Corporate Governance.
compliance. It also reviews and approves the annual In addition to compliance with the Code of Corporate
budget and long term strategic plans. The Board is Governance, the Audit Committee carries out the following
headed by the Chairman who manages the Board’s duties and responsibilities for the Company as per its
business and acts as its facilitator and guide. The Board Terms of Reference:
is assisted by an Audit Committee, a Human Resource a) determination of appropriate measures to safeguard
and Remuneration Committee, and a Nomination and the Company’s assets;
Risk Management Committee while the CEO carries
b) review of preliminary announcements of results prior
responsibility for day to day operations of the Company
to publication;
and execution of Board policies.
c) review of quarterly, half yearly and annual financial
statements of the Company, prior to their approval by
Board Committees the Board of Directors, focusing on:
The standing committees of the Board are: • major judgemental areas;
• significant adjustments resulting from the audit;
Audit Committee • the going concern assumption;
• any changes in accounting policies and practices;
Composition
• compliance with applicable accounting standards;
The Audit Committee consists of four members of the
and
Board. All of the members of the Audit Committee are Non-
Executive Directors. The Committee has two Independent • compliance with listing regulations and other statutory
Directors. The Chairman of the audit committee is also an and regulatory requirements.
Independent Director. The members are:
d) facilitating the external audit and discussion with
external auditors of major observations arising from
1. Mr. Tariq Jamali Chairman
interim and final audits and any matter that the
2. Mr. Faisal Ahmed Mukhtar Member auditors may wish to highlight (in the absence of
3. Ms. Malika Nait Oukhedou Member
management, where necessary);
4. Mr. Muhammad Kashif Habib Member

e) review of management letter issued by external j) review of the Company’s statement on internal
auditors and management’s response thereto; control systems prior to endorsement by the Board of
Directors;
f) ensuring coordination between the internal and
external auditors of the Company; k) instituting special projects, value for money studies
or other investigations on any matter specified by
g) review of the scope and extent of internal audit and
the Board of Directors, in consultation with the Chief
ensuring that the internal audit function has adequate
Executive and to consider remittance of any matter to
resources and is appropriately placed within the
the external auditors or to any other external body;
Company;
l) determination of compliance with relevant statutory
h) consideration of major findings of internal
requirements;
investigations and management’s response thereto;
m) monitoring compliance with the best practices of
i) ascertaining that the internal control system including
corporate governance and identification of significant
financial and operational controls, accounting system
violations thereof; and
and reporting structure are adequate and effective;
n) consideration of any other issue or matter as may be
assigned by the Board of Directors.
CATALYSING
GREEN 19
2. Reporting Responsibilities
Human Resource and 2.1 the Committee Chairman shall report formally to the
Remuneration Committee Board on its proceedings after each meeting on all
matters within its duties and responsibilities;
Composition 2.2 the Committee shall make whatever recommendations
The Human Resource and Remuneration Committee to the Board it deems appropriate on any area within
consists of three members of the Board. The majority its remit where action or improvement is needed;
of the members of the Committee are Non-Executive
2.3 the Committee shall, if requested by the Board,
Directors. The Chairperson of the Committee is an
compile a report to shareholders on its activities to be
Independent Director. The members are:
included in the Company’s Annual Report.
1. Ms. Malika Nait Oukhedou Chairperson 3. Authorities and Powers

2. Mr. Fawad Ahmed Mukhtar Member The Committee is authorized and empowered:
3. Mr. Muhammad Kashif Habib Member 3.1 to seek any information it requires from any employee
of the Company in order to perform its duties;
Terms of Reference and Salient Features 3.2 to obtain, at the Company’s expense, outside legal
The Human Resource Committee is a body through or other professional advice on any matter within its
which the Board provides guidance on human resources terms of reference; and
excellence. The specific responsibilities, authorities and
3.3 to call any employee to be questioned at a meeting of
powers that the Committee carries out on behalf of the
the Committee, as and when required.
Board are as follows:
1. Duties and Responsibilities Nomination and Risk
The Committee shall carry out the duties mentioned
below for the Company:
1.1 to review and recommend the annual compensation Composition
strategy with focus on the annual budget for head The Nomination and Risk Management Committee
count and salaries and wages; consists of three members of the Board. The Committee
1.2 to review and recommend the annual bonus and comprises one Executive and two Non-Executive Directors
incentive plan; including an independent director. The members are:
1.3 to review and recommend the compensation of the
Chief Executive and Executive Directors; 1. Mr. Fazal Ahmed Sheikh Chairman
1.4 to assist the Board in reviewing and monitoring the 2. Mr. Muhammad Kashif Habib Member
succession plans of key positions in the Company; 3. Mr. Tariq Jamali Member
1.5 to review and monitor processes and initiatives related
to work environment and culture; Terms of Reference and Salient Features
1.6 to perform other duties and responsibilities as may be The specific responsibilities and authorities that the
assigned time to time by the Board of Directors. Committee carries out on behalf of the Board are as
follows:

a) Duties relating to Risk Management Function b) Duties relating to Nomination Function
i. To monitor and review of all material controls (financial, i. To formulate selection policies and evaluation criteria
operational, compliance); for appointment of members of the Board and Board
Committees;
ii. To make recommendations to the Board on the
Company’s strategic risks and their mitigation in ii. To recommend candidates for directorships for Board
ensuring the achievement of the Company’s overall approval after evaluating their suitability;
strategy; iii. To recommend Directors to fill positions of Board
iii. To analyze and provide report to the Board on the Committees;
results of the material investigations on the risks iv. To determine the annual assessment criteria and
identified and management’s feedback on the process to assess the effectiveness of the Board, its
investigation and appropriate recommendations; Committees and each individual Director;
iv. To monitor and review the process of the risk v. To assess the effectiveness of the Board as a whole;
management and advise to the Board about the
improvements to be made; vi. To develop criteria to assess independence and to
assess on an annual basis, the independence of the
v. To provide guidelines to the management on risk Independent Directors;
management and set up procedures to unveil, assess
and manage material risk factors; vii. To review Board succession plans;
vi. To review the internal control policies in respect of viii. To review the training need for Directors and ensure
the control procedures of risks, including the risk Board members receive appropriate training
management and the communication; programs; and
vii. To ensure the risk management is embedded in the ix. To perform such other duties and responsibilities
structure and culture of the management team within as may be assigned time to time by the Board of
the Company; Directors.
viii. To review the adequacy of the Company’s policies and c) Authorities and Powers
procedures regarding the risk management system
in consultation with the Company’s management, The Committee is authorized and empowered:
external auditor and internal auditor; i. To seek any information it requires from any employee
ix. To consider appropriate extent of disclosure of of the Company in order to perform its duties;
company’s risk framework and internal control system ii. To constitute sub-committee(s) of the management as
in Directors’ report; and and when deemed necessary in order to discharge its
x. To perform such other duties and responsibilities duties and responsibilities.
as may be assigned time to time by the Board of iii. To obtain, at the Company’s expense, outside legal
Directors. or other professional advice on any matter within its
terms of reference; and
iv. To call any employee to be questioned at a meeting of
the Committee as and when required.
CATALYSING
GREEN 21
KEY MANAGEMENT
Mr. Mohammad Abad Khan

Advisor to the CEO
Mr. M. Abad Khan graduated in Mechanical Engineering from UET Lahore and after extensive training in
fertilizer manufacturing from Europe, worked with PIDC for 8 years on the first Urea plant manufacturing
in the Country.
Mr. Khan joined Exxon Chemical Pakistan at the time of its project phase. During his 15 years of
service with Exxon, he received extensive trainings in technical and managerial fields and gained
valuable experience in various disciplines of manufacturing. Later he joined Fauji Fertilizer Company
as General Manager Plant. During 14 years of service with this company, the manufacturing site
worked par excellence and the site capacity increased to more than double due to revamp of facility
and an additional production line. In 2001, when FFBL faced serious operational challenges, Mr. Khan
took responsibility as head of manufacturing and was instrumental in ensuring smooth operation and
undertook a major revamp of the plant during his 4 years of assignment.
Mr. Khan has been with Fatima Group for almost 17 years as Advisor to CEO and has played a
significant role in establishing Fatima Fertilizer plant and undertaking operational improvements in
Pakarab Fertilizers Ltd and Fatimafert Ltd. He has extensive international exposure through seminars,
symposiums and trainings including one at Harvard Business School. He is Director of Fatimafert Ltd,
Fatima Energy Ltd, Pakarab Energy Ltd, Fatima Ventures (Pvt.) Ltd, Fatima Cement Ltd and Fatima
Electric Company Ltd.
Mr. Asad Murad

Chief Operating Officer & Chief Financial Officer
Mr. Asad Murad is the Chief Operating Officer & Chief Financial Officer of the Company. He is a
Fellow Member of the Institute of Chartered Accountants of Pakistan. In an over 25 year career, he has
held various senior management positions in the areas of financial management, strategic business
planning, risk management and corporate compliance. He joined Fatima Group in 2010 as Group
Head of Internal Audit and held the position of Chief Financial Officer of the Company from March 2014
till February 2021. As additional roles, he has served as the Head of Marketing & Sales and Director
Finance of the Company. He was also involved in Government Relations along with his Finance Director
role where he successfully consolidated all three fertilizer plants and also played an instrumental role in
revival of Multan plant operations by ensuring sustainable gas supply from Mari Gas among many other
contributions. He has also served as Chief Financial Officer at Honda Atlas Cars (Pakistan) Limited, a
subsidiary of Honda Motor Company, Japan.
Mrs. Rabel Sadozai

Director Marketing and Sales
Mrs. Rabel Sadozai is the first female Director Marketing and Sales in the Fertilizer Industry and the
Agriculture Sector of Pakistan. She holds a MBA degree from IBA Karachi and with over 23 years of
diverse professional experience, has held several leadership positions in the Petrochemical and Banking
sectors prior to joining the Fertilizer Industry.
Her enthusiasm for innovation has been her driving force during her ten-year tenure at Fatima Fertilizer.
She has propelled the company through many significant marketing milestones, including the proposal
and successful implementation of Pakistan’s first-ever National Farmer’s Day, which is officially
recognized by the Government of Pakistan and serves as a remarkable legacy for the Group.
Her work has not only received major acclaim locally but on prestigious international platforms as well,
which has positioned Sarsabz Fertilizers, the flagship brand of Fatima Fertilizer, to achieve a premium
brand status. These include winning the MARCOM (USA) International Marketing Award in 2018,
AVA Digital Award (USA) in 2019, the Pakistan Digital Awards (PDA) won by Fatima Fertilizer’s ‘Salam
Kissan’ campaign for three consecutive years 2020, 2021 & 2022, the Asian Experience Award
(Singapore) conferred on the Sarsabz Kahani Web Series in 2022, and a dedicated case study related
to Fatima Fertilizer’s ‘Salam Kissan’ campaign published by Kotler in his book “Essentials of Modern
Marketing” in 2022.

Mr. Omair Mohsin
Director Legal & Company Secretary
Mr. Mohsin joined Fatima Group in 2019 as Group General Counsel, Company Secretary, and Head of
External Affairs. He has over twenty years of experience ranging from litigation to corporate experience.
He plays a lead role in advising the CEO, the Board, and the Management on Legal, Compliance, and
Ethics. He is also integral to the key initiatives of diversification, expansion, and risk management. Prior
to joining Fatima Group, Mr. Mohsin worked as Ethics and Legal Head of Pakistan at ENGIE. Mr. Mohsin
graduated with a Juris Doctoris from the Washington University In Saint Lous.
Ms. Sadia Irfan

Director Human Resources
Ms. Sadia Irfan, is an accomplished HR professional and she brought to Fatima two decades of senior HR
leadership experience with MNCs, including PepsiCo & Nestle, across multiple International markets including
West Asia, Middle East & Africa, Pakistan and Afghanistan. She is an award winning HR professional, winning
Global honors in Talent & D&I space.
Ms. Irfan is recognized as a Strategic Business Partner with track record of building better businesses
through cultural transformation. Her expertise includes HR Strategic Leadership, Merger & Acquisition,
Startup Operations, Organization Development, Organization Design, Change Management and Employee
Engagement within complexed business models like Franchise Operated Bottling Operations (FOBO),
Operating Company (OpCo) and Company Owed Snacks Operations (CoSo). Her last assignment was with
PepsiCo where she led strategic HR for multiple Business Units (BU) as HR Director including West Asia,
Middle East, Africa, Pakistan and Afghanistan.
Ms. Irfan’s strategic leadership won PepsiCo Pakistan’s business many internal and external laurels. These
included PepsiCo’s most prestigious Harvey Russell Award for Diversity & Inclusion, Best Place to Work
multiple times in a row, Integrated Control Environment along with honors such as Highest Ever Female
Representation at the Board, Highest Ever Employee Engagement Index for Pakistan across Asia Pacific
Region & AMENA Sector, to name a few. She has been recognized for championing best practices in systems
and culture which were proudly shared across PepsiCo regions.
Since joining Fatima, Sadia has been the driving force behind many cultural interventions & business initiatives.
As a passionate D&I&E leader, she has strengthened an inclusive culture, with flexible policies and continues to
work towards increasing female representation in Fatima workforce. Ms. Irfan has been the first female Director
in the industry, inspiring other talented women to assume leadership roles in agriculture-based industries as
well.
Carrying a Master degree in English Language & literature supported by degree in Human Psychology, She
has earned several HR certifications & distinctions in the HR Space. She is a certified Hogan Executive Coach,
recognized Career Coach and Mentor,
Mr. Iftikhar Mahmood Baig

Director Business Development
Mr. Iftikhar Mahmood Baig is leading the Business Development function of Fatima Group. He is
responsible for implementation of strategic initiatives to identify sources for sustainable supply of gas at
affordable prices for the fertilizer business.
Mr. Baig has been instrumental in developing, strengthening and nurturing strategic relationships with
the government authorities and key stakeholders in assisting and accomplishing Group’s mission and
goals.
He has over 33 years of financial and commercial experience. He has been a part of Fatima Group
for over two and half decades. Mr. Baig has served in various senior positions in different Group
Companies.
He also played a vital role in getting the allocation of 110 mmscfd gas for implementation of Green Field
fertilizer manufacturing complex namely Fatima Fertilizer Company Limited (FFL) from Mari Petroleum
Company Limited ( MPCL) under Fertilizer Policy 2001 and successfully achieved Financial Close of
the largest rupee syndication of PKR 23 billion in 2006 for the FFL – an investment of USD 750 million
as Chief Financial Officer.
He also played an instrumental role in the acquisition of Pakarab Fertilizers Limited in 2005 and its
revival with the supply of gas in 2020 from MPCL.
CATALYSING
GREEN 23
Mr. Ahsen-ud-Din
Director Technology Division
Mr. Ahsen-ud-din has over 39 years of management experience with leading companies like Engro
Corporation, Exxon Chemical, where his last appointment was Vice President, he also worked in Fauji
Fertilizer, Kuwait National Petroleum and Gulf Petrochemical Industries Corporation. During his career,
Mr. Ahsen-ud-din has a track record of executing number of multi million dollar petrochemical and
fertilizer projects as project executive, he has also managed a number of world scale fertilizer and
petrochemical manufacturing facilities as General Manager while delivering best in class operational and
HSE performances.
Mr. Ausaf Ali Qureshi

Advisor MFC Project
Mr. Ausaf Ali Qureshi is a Fellow Member of Institute of Chartered Accountants of Pakistan. He joined the
Group in May 2010 as Company Secretary with the additional responsibility for investor relations. He has
been part of the senior team involved in developing the MFC project for over a decade. He is serving
on the Board of Fatima Energy Limited. He has over 40 years of experience with Fauji Fertilizer, Pakistan
International Airlines (Holdings) and Bristol Myers Squibb (BMS). In his over 20 year’s career at BMS, he
held various regional management positions in Pakistan, South Korea, Egypt and Singapore in the areas
of finance, corporate compliance and strategic project planning.
Mr. Hassan Altaf

Director Strategy
Hassan Altaf, the Director Strategy, has 30 years of global experience. He has worked with leading
organizations including Saudi Basic Industries Corp (SABIC; ARAMCO subsidiary)-Saudi Arabia, Ernst
& Young Corporate Finance (DIFC)-UAE and Pricewaterhouse Coopers/KMPG-Canada. He joined
Fatima Group in 2021 and has since played a vital role collaborating with internal stakeholders in
preparing a five year corporate strategy document while focused on overseas and diversification growth
opportunities.
At SABIC, one of the world’s leading petrochemical and agri nutrient companies, he was the Sr. Advisor
for Strategic Investments-Corporate Development (M&A division). He was involved in the evaluation,
negotiation and structuring of acquisitions and joint ventures with leading manufacturers of intermediate
and specialty downstream petrochemicals from across the globe. He also oversaw the evaluation of
equity/JV investments in fertilizer manufacturing and distribution in Africa & Latin America.
Hassan is a Chartered Financial Analyst (CFA, USA) and a Chartered Professional Accountant (CPA,
Canada). He holds Hons. BA in Chartered Accountancy Studies from University of Waterloo, Canada.
Mr. Faisal Jamal

Corporate HSE and Technical Services Manager
Mr. Faisal Jamal leads the Corporate HSE & Technical Services teams, providing guidance and expert
advice to develop and effectively implement Corporate HSE and Process Safety policies, standards,
strategies, SOPs and guidelines to proactively manage Process Safety and Operational Safety accident
risks.
A chemical engineer by qualification, with 23+ years of international professional experience, he

possesses strong HSE, PSM, Operational Excellence, risk management, auditing and culture
enhancement foundation augmented by rich experience in process engineering and operations. The
diversity of experience in major global and local organizations like British Petroleum, Qatar Petroleum,
Engro Corporation and Pak-Arab Refinery, and a robust knowledge base and skill set has enabled him
to utilize his expertise with a broader perspective and sustainable approach.
In addition to receiving numerous global, regional and local awards, he has also represented Fatima
Group at various international and national forums and events hosted by prestigious institutions and
organizations like Massachusetts Institute of Technology (MIT), American Institute of Chemical Engineers
(AIChE) and American Society of Safety Professionals (ASSP).

Mr. Pervez Fateh
G.M. Manufacturing
Mr. Pervez Fateh is heading the Fatima Fertilizer Plant Site, Sadiqabad as GM Manufacturing since April
20, 2020. He joined Fatima Group as Plant Head, PFL Multan on January 6, 2020 from Fauji Fertilizer
Company where he was serving as GM-Manufacturing and Operations. During his services with Fauji
Fertilizer he led both Mirpur Mathelo and Goth Machhi sites as General Manager.
A seasoned professional, having B.E (Mech) degree from NED University – Karachi. Mr. Fateh has over
37 years of rich experience in maintenance, inspection and plant management in Fertilizer Industry,
with demonstrated creativity, initiative, drive and success. Professional competence, vision, strategic
planning, capital asset oversight, cost containment, budgeting and staff training/mentoring are his forte.
Under his leadership, FFL has continued its journey of world class HSE Performance and achieved
Guinness World Record of maximum safe million man hours in the fertilizer sector across the globe.
Plant has performed exceptionally well on production front as well ALHAMDOLILLAH, by exceeding
world class plant reliability benchmark of ≥98% by achieving 98.8% in 2022.
He has multiple successful projects under his belt. He has also attended many prestigious leadership
development programs at LUMS, University of Michigan (USA) and MIT (USA).
Mr. Fateh is also involved in philanthropic activities and heads his own NGO Azm-e-Nau Foundation
working in the areas of upper Sindh and Northern Punjab, with prime focus on poverty alleviation and
educational support. His NGO actively worked for wellbeing of people in badly affected nearby Sindh
and Punjab areas during recent devastating floods.
Mr. Atif Zaidi

Chief Information Officer
Atif Zaidi is a globally recognized C-level executive with over 30 years of international experience in delivering
successful IT ventures, turning around businesses and bringing about futuristic digital transformations resulting
in commercial success across a multitude of industries. He is an active Boardroom contributor and expert in
business management, financial performance, strategic partnerships, digital transformations through latest
emerging technologies, and enabling innovation capabilities.
Prior to joining Fatima Group, Atif was hand picked as the Chief Information Officer and Head of Technology
& Digital Sector at NEOM, a $500 billion dollar greenfield initiative of developing a 26,500 sq.km. independent
state in the northwest of Saudi Arabia under the patronage of His Royal Highness, Prince Mohammed
Bin Salman, the Crown Prince of Saudi Arabia. He had the overarching accountability of developing and
implementing an independent technology venture, centrally approved digital strategy and technology
direction for the entire NEOM region across all aspects of citizen life including Manufacturing, Energy, Water,
Food, Environment, Retail, Entertainment, Tourism, Sports, Mobility, to name a few. Alongside, he was also
responsible for selecting and implementing fit-for-NEOM technologies and providing a cohesive technology
roadmap for NEOM’s current and future needs.
Previously, Atif has held global leadership positions in US, Europe, Middle East and Asia in notable blue chip
organizations like AT&T, Johnson & Johnson, The McGraw Hill Companies, Pfizer, Obeikan Education and
Sadara Chemical Company, a $30 billion dollar joint venture between Aramco and Dow Chemical Company.
He developed his experience strategically through delivering successful technology businesses, managing
complex mergers and acquisitions, and implementing multiple facets of bleeding edge technologies. His
accomplishments are built on successfully delivering multi billion dollar mega initiatives of international
magnitude with extensive experience across various prominent industries, including government and country
wide national programs, manufacturing, fertilizer, petrochemical, education, pharmaceutical, medical, finance,
and publishing sectors.
Atif is a globally recognized leader and keynote speaker with multiple publications. He has a Masters’ Degree in
Computer Science from New Jersey Institute of Technology where he was recognized for his perfect graduating
GPA of 4.0. He had obtained his Bachelors’ Degree from the same institute in Electrical Engineering and
graduated with Honors. He holds several prominent technology and leadership certifications.
Mr. Salman Ahmad

Director Internal Audit
Mr. Salman Ahmad joined Fatima Fertilizer as Head of Internal Audit in December 2016. He is a Fellow
Chartered Accountant (FCA) from the Institute of Chartered Accountants of Pakistan, with over 28 years
of experience in Audit and Finance in companies like PricewaterhouseCoopers (PWC); Al Rostamani
Group Dubai UAE; Oasis Group Holdings (South Africa); Gharibwal Cement Limited and Emaar.
CATALYSING
GREEN 25
ORGANIZATIONAL CHART
Board of Directors
Audit Chief Executive

Committee Officer
Executive Project Review

Committee Committee
Head of Chief Operating Chief Financial Director Chief Information

Internal Audit Officer Officer Strategy Officer
Director Sales & Director Legal & Director Business

Marketing Company Secretary Development

HR & Remuneration Nomination and Risk
Committee Management Committee
Enterprise Risk Other Management

Management Committee Committees
Director Director Human Chief Manufacturing Director

Special Projects Resources Officer Technology
Head of Head of Head of

Supply Chain Lean Six Sigma Administration
CATALYSING
GREEN 27
CHAIRMAN’S REVIEW
REPORT
to the Shareholders for the year ended
December 31, 2022
To my fellow Shareholders,
The year 2022 was severely impacted by challenges arising from the
ongoing economic and political instability in Pakistan. The significant
depreciation of Pakistani Rupee against US Dollar, ongoing increase in
policy rate, high inflation, rising fuel prices and supply chain disruptions
due to the accelerating climate change crisis were contributing factors in
cost escalation/inefficiencies in all sectors of the national economy.
The Company, despite such challenging times, was able to deliver

growth in its production and sales volumes. The Company continued
to deliver in line with its commitment of ensuring availability of products
to customers while maintaining high standards of health, safety &
environment, unwavering efforts to offset the cost pressures wherever
possible, and strategic allocation of resources.
During the year, the Board of Directors (“the Board”) performed

its duties diligently in the best interest of its shareholders and has
managed the affairs of the Company in its customary effective and
efficient manner. The Board remains committed to the highest standards
of corporate governance. The Board and its Committees remained
focused on ensuring compliance with all statutory and regulatory
requirements applicable to the Company.
On operating performance, I am pleased to report that all production

sites i.e. Sadiqabad, Multan and Sheikhupura, performed extremely well
and recorded highest ever production volume of 2.8 million MT. While
expanding its market outreach, the Company also achieved its highest
ever sales volume of 2.7 million MT. Safety remained one of the key
priorities, hence the Company has successfully achieved 104.6 Safe
Million Man hours and recorded zero TRIR (Total Recordable Incident
Rate). Record sales by the Company translated into its highest ever
revenue of Rs 152 billion, a 35% increase over last year, and highest
ever Profit before Tax posting growth of 9% over last year. However, due
to retrospective imposition of Super Tax, net Profit after Tax declined
to Rs 14.1 billion vs Rs 18.5 billion in 2021. Based on the financial
performance for the year, the Board is pleased to announce dividend
of Rs 3.50 per share, amounting to Rs 7,350 million, subject to the
approval of the shareholders at the Annual General Meeting to be held
on April 28, 2023.
The Company is committed to contributing fully to the food security and

economic prosperity of the country. I have strong confidence that we
will continue to grow the Company in line with its stated mission, and
the Board will play its strategic role in assuring sustainable growth of
the business and maximizing return for its shareholders. The Board is
conscious of below par performance of its investment portfolio, efforts
will be made to improve its performance.
I would like to recognize our Board members for their valuable

contribution to deliver profitable growth year on year. I would also like
to take this opportunity to thank our valued investors for their trust
and confidence in the Company. In addition, the Board would like
to acknowledge and particularly thank our CEO, Mr. Fawad Ahmed
Mukhtar, for his vision, commitment, and leadership in taking the
Company into a new era of growth.
Arif Habib
Chairman
April 03, 2023

CATALYSING
GREEN 29
CEO’S MESSAGE
Dear Shareholders,
The year 2022 was one of the most challenging years in our recent We are also looking towards the Government of Pakistan to support
past, due to several domestic and International factors, however, your the fertilizer sector in mitigating various critical challenges, including
Company remained committed to business continuity, sustainability, but not limited to, prioritized gas supply to fertilizer sector for full
safety, employee wellbeing, quality business delivery and positive utilization of available fertilizer production capacities in the country,
contribution to the national economy. availability of foreign exchange for various essential capital expenditure
and for smooth procurement of mandatory raw materials, spares
Despite the tough economic environment, the year 2022 has been a and chemicals which are vital for production of local fertilizers and
landmark year for the Company as we have set new benchmarks of for release of overdue tax and subsidy refunds. We are confident that
highest ever production volume of 2.8 million MT as well as highest such support will significantly help in overcoming challenges towards
ever sales volume of 2.7 million MT. Due to this volumetric growth sustained output from this sector, ensuring food security in the Country
of sales, the Company achieved its highest ever revenue of Rs. 152 and heading towards the Green Revolution to achieve other macro
Billion posting growth of 35% over last year. While absorbing huge economic challenges.
cost pressures primarily due to sharp devaluation of Pak Rupee, high
inflation, significant increase in input costs and rising interest rates, While facing anticipated business challenges in FY 2023, the Company
by efficient utilization of available resources the Company achieved is committed to its strategic priorities and is confident of growing its
9% growth of Profit before Tax. Despite this remarkable financial market share on a sustainable basis.
performance, Profit after Tax has been restricted to Rs 14.1 Billion
(2021: Rs. 18.5 Billion) due to retrospective imposition of Super Tax I am especially grateful to the Chairman of the Board and other
by Government. I am pleased to share that Company has recorded Board members for their contribution in setting strategic objectives
earnings of Rs 6.73 per share which has enabled the Board to and untiring commitment in steering the Company towards making
recommend cash dividend of Rs 3.50 per share which amounts to significant contributions for economic well being of the Country.
Rs 7,350 million for the year 2022.
Lastly, I would also like to thank our employees, esteemed customers,
Pakistan is facing huge pressures of fiscal and current account deficits. and valuable suppliers for their sheer support and hard work in 2022
Over the years, the Country has been spending billions of dollars and I look forward to continue working with them to attain success in
on imports of Cotton, Wheat, Oil/Oil Seeds and other agricultural 2023.
products. Via Catalysing Green Revolution, Agriculture sector has got
the potential to provide much needed support to the Government in
meeting its economic challenges. By promoting modern agricultural
techniques and technologies and by efficient use of available
resources, agricultural output can be enhanced significantly that will
help in saving billions of dollars for the Country by imports substitution
and by creating further avenues of exports. This will also provide much
needed fiscal space to Government for efficient use of its available
resources.
Fawad Ahmed Mukhtar
Agriculture has always remained backbone of our economy and with
Chief Executive Officer
the support of Government of Pakistan, local fertilizer industry has
always aimed and ensured timely provision of fertilizers to our farmers
at affordable prices. While ensuring food security of the country, local
fertilizer industry is contributing substantially towards foreign currency
April 03, 2023
reserves conservation and provision of locally produced fertilizer to
farmers at significantly low prices.

CATALYSING
GREEN 31
DIRECTORS’ REPORT
to the Shareholders for the year ended December 31, 2022
The Directors of the Company are pleased to present Directors’ Report, the audited
consolidated and standalone financial statements of the Company for the year
ended December 31, 2022, together with the auditors’ report thereon.
utilization from millions of acres of uncultivated lands has

Principal Activities the potential of generating an additional revenue of around
USD 34 billion per annum. Bringing 20% fallow lands under
The Company is engaged in the manufacturing, producing,
cultivation on an immediate basis has the potential to add
buying, selling, importing, and exporting fertilizers and
around USD 7 Billion in the national economy.
chemicals and is listed on Pakistan Stock Exchange.
Agriculture sector has always played the role of backbone
The Economy and Market for the economy ensuring food security in the country and
overview saving billions of dollars as import substitution. Catalysing

Green Revolution in Pakistan through implementation of
The year under review was challenging for Pakistan’s precision technology driven farming operations, use of
economy which faced high current account deficit and hybrid seeds etc. will ensure national food security and
inflation. This caused a sharp decline in value of rupee economic prosperity of the country by addressing issues of
and rising interest rates, resulting in increase in cost fiscal and current account deficits significantly.
of doing business. Further, the agriculture value chain
was significantly affected by high rains and flash floods International Market
which inflicted devastation across the country. Budget for
fiscal year 2022-23 relied heavily on revenue increasing The global markets for nitrogen, phosphates and potash
measures including but not limited to sharp increase in were already in a tightened state following strong demand
taxation, withdrawal of subsidies, imposition of super tax driven by the Covid-19 induced emphasis on food security
etc. and a series of supply interruptions and high raw material
costs in 2021. In early 2022, it was forecasted that the
In the year 2022, agriculture sector faced issues of rising fertilizer market would be driven by a fine balance of
prices and climate change which has increased frequency affordability and availability in the next two years. This
of weather events and directly impacted farm economics. became the reality, as 2022 was marked by record high
The weaknesses of Pakistan’s agriculture sector have now prices of fertilizer products, levels which were last recorded
begun to impact on macro-economic level. around 2008. DAP and MAP prices exceeded USD 1,000
per MT, peaking around April, while their inputs such as
According to Economic Survey of Pakistan 2021-22, Phosphoric Acid, Rock Phosphate, Ammonia, and Sulphur
agriculture sector contributed Rs 15,191 billion to GDP. also reached record high values. From April till December
Productivity of agriculture can be doubled by focusing 2022, these commodities softened gradually, despite
on vertical and horizontal growth strategies. In the last buyers holding back their purchasing in anticipation of
decade, the Agriculture CAGR remained 1.79% against sharper drops.
the minimum required growth of 4% per annum. As a
result, the country is spending approx. USD 7 billion (July Supply restrictions increased further complexity in 2022 as
to March 2022) in importing Agri commodities. Cotton compared to 2021, starting with the Russia-Ukraine conflict
production has reduced to 4.75 million bales in 2022 from in February. This resulted in Russia offering discounted
14 million bales in 2014. Pakistan needs USD 4 billion to pricing on fertilizer products. The Chinese government
import 10 million bales of raw cotton to satisfy domestic had imposed export restrictions from Q4 2021, notably
consumption of 15 million bales. introducing cargo inspections and prioritizing in-country
sales over export, eventually leading to lower plant capacity
Pakistan’s agriculture transformation can play a vital role utilization by Chinese fertilizer producers. Domestic factors
in reducing annual trade deficit of USD 48.5 billion. Per coupled with lower purchasing appetite in international
acre yield enhancement of wheat, cotton and oil seed market led to 43%, 47% and 13% reduction in China’s DAP,
crops can produce an additional revenue of USD 14.5 Urea and NPK exports respectively in 2022 as compared
billion per annum from the existing Agri landscape. Land to 2021. Like 2021, major consumers of phosphate and
nitrogen fertilizers were Latin American and sub-continental
buyers.

Price of Urea in the international market reached historic
highs in Q1 2022, eclipsing previous peaks of 2021 and
Business Overview and
2008, backed by strong price of Ammonia feedstock gas Developments
during the year, with surges in Urea prices seen in March
and then September, thereafter, easing off by around 30% The Company has delivered impressive business
during November and December to within USD 500 per performance and sustainable financial results driving
MT by year end. Raw material costs remained reasonably up the value for shareholders while maintaining the
stable primarily due to unavailability of ammonia from the best standards of Health, Safety & Environment for its
market owing to Russia-Ukraine clash, and ammonia plant employees, business partners and communities.
shutdowns around Europe due to unfavourable production
economics. All plant sites operations continued without any disruption
and persisted to build upon their reputation to be the
safest working sites for its stakeholders, which resulted
Local Market in increasing Safe Million Man-Hours and demonstrated
zero Total Recordable Incident Rate. The Company has
The year 2022 closed with a total fertilizer industry off-
also secured multiple awards and recognitions from
take (nitrogen & phosphate) of 9.5 million MT, decreasing
local and international organizations on Health, Safety &
by 5.9% in comparison with last year’s off-take of 10.1
Environment.
million MT. This decrease is primarily attributed to the
considerable decline in phosphate sales, particularly DAP.
Further, the Company continued the legacy of paying
DAP off-take stood at 1.20 million MT in the year 2022
tribute to our farmers through celebrating ‘Kissan Day’ and
which represents 36% decline when compared with 1.87
further strengthening its ‘Salam Kissan’ campaign. The
million MT off-take in 2021. DAP prices in the year 2022
Company is committed to position ‘Sarsabz’ as the most
were on an average 76% higher when compared with
premium fertilizer brand in the market and helping to lead
2021. This was mainly due to high cost of imported raw
the pursuit for a ‘Sarsabz Pakistan’.
materials and the significant devaluation of Pak Rupee vs
USD. Relative to 36% decline in DAP, NP recorded decline
During the year under review, the Company has been
in offtake by 15% in comparison to 2021. Major reasons for
able to set the new benchmark of highest ever production
the decline were highest ever phosphate prices throughout
volume of 2.8 million MT as well as highest ever sales
first half of the year, unprecedented floods & rainfall and
volume of 2.7 million MT. Such additional production
loss of standing crops which significantly impacted farmers
volumes have been generated because of enhanced
economics.
plants efficiencies and additional production from
Sheikhupura plant owing to better availability of Gas as
Nitrogen offtake on the other hand witnessed a growth
compared to previous year.
mainly because of better availability of Urea and increase
in phosphate prices which restricted farmers ability to
apply expensive fertilizers. Urea sales increased by 4.3%, Volume (‘000’ MT)
going up from 6.34 million MT in 2021 to 6.61 million MT in Production*/
Product Sales*
2022. It is pertinent to mention that local fertilizer industry Purchase
has shielded the farmers from international urea price 2022 2021 2022 2021
rise and local urea is available to farmers at a discount of
NP 867 830 745 882
~66%. Further, out of these substantial discounts being
enjoyed by local farmers, over 2/3rd of the discount has CAN 867 792 868 894
been provided by the industry while the government
Urea 1,095 801 1,101 836
contributes 1/3rd in the form of price difference of feed
Trading stock
and fuel gas. All the available CAN volumes were sold 55 35 21 65
incl. DAP
during the year reflecting its high demand in the farming
community of the country. Total 2,884 2,458 2,735 2,677
*Includes toll manufacturing operations
CATALYSING
GREEN 33
Directors’ Report cont’d
The Board of Directors of the Company in their meeting subject to the receipt of necessary approvals, sanctions,
held on August 26, 2020, accorded in principle approval consents, observations, no objection from the Creditors
for the transfer of operations related to the Company’s of the Company, Securities and Exchange Commission of
Sheikhupura plant to Fatimafert Limited, a wholly Pakistan, the relevant High Court or such other competent
owned subsidiary of the Company. The Scheme of authority as may be applicable.
Arrangement was drafted under the relevant provisions
of the Companies Act, 2017 between the Company and Further, the Company continued to provide services
Fatimafert Limited which was approved by the Board relating to sale and distribution of the fertilizers and for
of Directors of both Companies on July 15, 2021. The the collection of sale proceeds of the products from
Scheme was filed with the Lahore High Court for formal the customers of Pakarab Fertilizers Limited. As per the
sanction and approval of the Court. On December 01, terms of the arrangement for providing such services, the
2022, the Court granted its approval for the Scheme which Company is entitled to retain/use the sale proceeds during
is effective from January 01, 2022. On December 30, 2022, the retention period for its own benefit and is also entitled
the Board of the Company and the Subsidiary Company to use any profits earned on such proceeds.
have agreed to defer the effective date of implementation
of the Scheme from January 01, 2022 to January 01, Further, Company during the year, along with other fertilizer
2024 or such suitable date, earlier or later, as may be manufacturers and a gas supplier have entered into a
decided by the Board of the Company and the Subsidiary Framework Agreement for Gas Pressure Enhancement
Company due to prevailing economic situation in the Facilities project for its Sadiqabad plant. Under the
country. Subsequent to the year end, the Company has Agreement, the Fertilizer Manufacturers will jointly develop
approached the Court in this regard. and install pressure enhancement facilities at Mari
Petroleum Company Limited’s (MPCL’s) delivery node to
Further, the Board of Directors of the Company in their sustain the current level of pressure of gas supply from
meeting held on April 07, 2022, had approved investment HRL reservoir of MPCL in future years as well.
in Fatima Cement Limited (FCL), an associated Company,
by way of acquisition of 100% ordinary shares of FCL from
all the existing shareholders at par value, to make it wholly
Financial Performance
owned subsidiary of the Company, therefore FCL financial The Company has recorded sales revenue of PKR 152.2
statements have been consolidated into the Company billion in 2022 as compared to sales revenue of PKR
accordingly. 112.5 billion in the previous year. This has resulted due to
increase in volumetric sales and prices of all the products
Moreover, the Board of Directors of the Company, in their mainly due to higher international prices, increase in input
meeting held on December 5, 2022, has considered, and costs due to inflation, higher interest rates and change in
approved a comprehensive business expansion plan taxation regimes. NP contributed 55% of the total sales
and the Scheme of Compromises, Arrangements and revenue followed by Urea and CAN representing 26%
Reconstruction drafted under the relevant provisions of and 16% respectively, whereas remaining sales represent
the Companies Act, 2017, aimed at further consolidation revenue from imported fertilizer and mid-products.
of the fertilizer business by amalgamating its associated
company, Pakarab Fertilizers Limited (PFL) with and into
Fatima Fertilizer Company Limited with effect from July 01, Revenue Mix - 2022
NP 55%
2022. As per the terms of the Scheme, this Amalgamation
would lead to an increased asset base and size of the DAP 2%
Company allowing it to benefit from economies of scale

Others 1%
effectively and efficiently in the combined business and
assets base of both the companies, creating further
business expansion opportunities for the Company. Urea 26%
Accordingly, Fatima Packaging Limited, a wholly owned
subsidiary of PFL, will also become a wholly owned
subsidiary of the Company. This Scheme of Amalgamation
has been duly approved by the Shareholders of the
Company in the Extra Ordinary General Meeting held
CAN 16%
on December 31, 2022, under the supervision of the
Honorable Lahore High Court. This transaction would be

liability and various other grounds and there has been no
Revenue Mix - 2021
NP 54% significant progress in this regard during 2022.
DAP 3%
In addition, the Company has further recognized a loss
Others 1% allowance of PKR 109.7 million (2021: 109.7 million) on
subsidy receivable from the Government of Pakistan (GoP)
as per the requirements of International Financial Reporting
Urea 23%
Standards and in view of considerable delay in settlement
by the Government. This temporarily recorded loss
allowance will be reversed in due course of time.
Moreover, increase in taxation represents imposition of

CAN 19% Super Tax on profits for the current year as well as on
last year which has resulted in higher effective tax rate of
54% (2021: 34%), thus restricting bottom line growth in
Decline in gross margin as a percentage to revenue in comparison with corresponding period last year.
comparison to 2021 mainly emanates full year impact of
increase in gas price due to end of concessionary period Resultantly, the Company has posted Profit before Tax
gas in June 2021, higher input costs of raw materials and of Rs. 30.8 billion compared to Rs. 28.2 billion last year.
sharp decline in value of Pak Rupee as compared to last However, due to retrospective imposition of Super Tax, the
year. Further, the surge in manufacturing costs is primarily Company has posted a Profit after Tax of PKR 14.1 billion
attributable to inflationary pressures and costs relating for the year reflecting a decrease of 24% as compared to
to planned turnarounds for its Multan and Sheikhupura PKR 18.5 billion last year. Similarly, earnings per share has
plants. decreased to PKR 6.73 per share in 2022 as compared to
PKR 8.80 per share in 2021.
Despite costs increases, due to volumetric sales growth,
improved topline and owing to commitment towards 2022 2021 2020
manufacturing excellence, on consolidated basis, the Rs

%
Rs
%
Rs
%
Million Million Million
Company has posted gross profit of PKR 51.9 billion
as compared to PKR 43.1 billion in 2021. The increase Revenue 152,231 112,488 71,267
in distribution and administrative expenses is mainly

Gross Profit 51,943 34.1 43,084 38.3 28,795 40.4
attributable to increase in volumetric sales, higher fuel
costs and inflationary impact. EBITDA 39,072 25.7 37,840 33.6 25,180 35.3
Profit
30,765 20.2 28,185 25.1 18,743 26.3
The finance cost of the Company has increased mainly Before Tax
due to the surge in interest rates. Other operating Profit after
14,124 9.3 18,474 16.4 13,275 18.6
Tax
expenses escalated on account of impairment against
advance for investment, unrealized loss on remeasurement EPS (PKR) 6.73 8.80 6.32
of investments in listed securities and exchange loss.
The Board is cognizant of below par performance of
the Company’s investment portfolio and has suggested
Financial Performance
measures to improve its performance. Whereas the Rupees in Million
increase in other income is attributable to higher rate of
200000
profit on loans to related parties, short terms investments,
savings accounts, and dividend income.
150000
Further during the year, the Company has reversed

temporary gain amounting to PKR 274.2 million (2021: 100000
367.5 million) which was booked as notional gain in 2020
amounting to PKR 877.5 million on remeasurement of
Gas Infrastructure Development Cess (GIDC) liability. It is 50000
worthwhile to mention that the Company has filed suit for

declaration and injunction in the High Court of Sindh and 0
has obtained a stay order against collection and recovery 2022 2021 2020
Revenue Gross Profit EBITDA Profit After Tax
of such Cess on account of issues of computation of
CATALYSING
GREEN 35
Earnings Per Share activity during first quarter of the year, whereas Sadiqabad
Rupees plant activity is scheduled in later part of the year.
10
9
8.80
Capacity Utilization
8
Products 2022 2021 2020
7
6.73 Urea, CAN and NP 110% 94% 94%
6
6.32
5
2022 designed capacity is 2.57 million MT, additional
4
production volumes have been generated because of
3
enhanced plants efficiencies and additional production
2
from Sheikhupura plant owing to better availability of Gas
1
0
as compared to previous year. Underutilization in 2021 was
2022 2021 2020 due to planned turnarounds at plants as well as owing to
non availability of gas at Sheikhupura plant for a limited
Operational Performance period, whereas in 2020 capacity utilization was prorated to
the extent that Multan plant was acquired from September
During the year under review, each of the manufacturing 01, 2020.
sites have been able to set a new benchmark of highest
ever production volume resulting in 2.8 million MT of Dividends and Appropriations
production on combined basis which is 17% higher than
2021. This is mainly represented by increase in Urea The Board of Directors in its meeting held on April 03,
production by 37%, CAN by 9% and NP by 4%. The pursuit 2023, have proposed a final Cash Dividend @ PKR 3.50
to enhance plant assets’ reliability, teams’ professional per share i.e. 35% for approval of the members at the
focus, resilience, and perseverance were key drivers Annual General Meeting to be held on April 28, 2023. The
behind this unprecedented achievement. financial statements do not reflect this proposed dividend.
Production Appropriations PKR in Thousands

Metric Tons in ‘000’
Un appropriated profit brought forward 79,263,264
3,000
Final Dividend for the year 2021 (7,350,000)
2,500 Net profit for the year 14,123,939
1,095
2,000 801 Other comprehensive income for the year (126,235)
1,500 681 Profit available for appropriations 85,910,968

867 830
Appropriations –
1,000
637
Un appropriated profit carried forward 85,910,968
500
867 792
578
0
2022 2021 2020 Financial Management
Can NP Urea
Despite rise in commodity prices, increase in interest rates,
decline in value of PKR and other challenges faced, all the
On combined basis all manufacturing sites successfully financial commitments falling due during the year were
achieved 104.6 Safe Million Man-Hours and recorded timely met. Apart from its routine obligations during the
zero Total Recordable Incident Rate. Further, sites have year, the Company keeps on investing in projects for future
also secured multiple awards and recognitions from growth and sustainability. As a testament to its strong
local and international organizations on Health, Safety & financial position, the Company at year end had more than
Environment. In addition, during the year, all sites have PKR 19.6 billion available in unutilized borrowing limits
put in place robust turnaround plan for the year 2023, as from financial institutions. With a highly favourable gearing
a result Multan and Sheikhupura plants will complete this position, the Company is deliberating upon further options
to maintain and enhance its earnings for the benefit of its
stakeholders.

Financial Highlights and items relating to capital expenditure. Fertilizer
manufacturers are continuously approaching relevant
Key consolidated operating and financial data of previous quarters for arrangement of such foreign exchange and
years is annexed with this annual report. looking forward to getting support to ensure the availability
of locally manufactured fertilizers.
Auditors’ Report on the Keeping in view the declining gas pressures, the Company
Financial Statements along with other fertilizer manufacturers and the gas
supplier has undertaken gas pressure enhancement
Our Auditors have reviewed the Company’s consolidated project which involves significant capital spending and
and standalone financial statements which comprise of is vital for sustained fertilizer production to ensure food
the statement of financial position, the statement of profit security in the country. The industry is making significant
or loss, the statement of comprehensive income, the investments in gas-related infrastructure on their own to
statement of changes in equity, the statement of cash flows ensure continuation of affordable availability of fertilizers in
and notes to the financial statements, including a summary the country. Therefore, the availability of foreign exchange
of significant accounting policies and other explanatory is critical for the timely execution of this project of national
information and we are pleased to share that they have importance.
issued an unqualified opinion on the Company’s Financial
Statements for the year ended December 31, 2022. Farmers in Pakistan have evidenced the outstanding
benefits of applying fertilizer with the right quantity and
Contribution to National at the right time through the increase in outputs hence it
is not the matter of increasing ‘farmer awareness’, in fact
Exchequer Pakistan’s agriculture sector is missing on the commercial
frameworks that facilitate and reward a leap to higher
Being a responsible corporate citizen of the country, the productivity and more output per acre. The most powerful
Company continued to contribute significantly towards drivers of yield increase in today’s world can be achieved
the National Exchequer. An amount of PKR 19.45 billion by using better seed and farm mechanization. Agricultural
(2021: PKR 12.98 billion) was contributed during the year activity has resumed after the impacts of destructive
in respect of Custom duties, Sales tax, and Income tax. floods. Owing to better prices of wheat, cotton and other
crops, it is expected that the demand for the fertilizers in
Statement as to the Value of 2023 will improve. We hope necessary fiscal support in the
Investment of Provident Fund shape of farmer-friendly Government policies will continue,

providing further strength to the farmers.
The value of the investment of the provident fund is PKR
The Company will capture all available opportunities to
2.96 billion. The figure is unaudited for the year under
further strengthen its association with farmers who are
review.
enriching their soils and lives using modern agriculture
methods and the application of value-added fertilizers. The
Future Outlook Company will continue to support the farmers in providing
its products as substitution to expensive imported
Business activity in the country is expected to face fertilizers. The government is expected to provide subsidy
challenges in the near term. Some of these continue to be to the farmers to ensure application of required volumes
macro-economic in nature such as currency devaluation, of phosphatic fertilizers to achieve agricultural growth
inflation, high interest rates and the general uncertain ensuring food security in country and to save precious
political & economic outlook of the country. foreign exchange via import substitution.
Like other sectors, Fertilizer Industry is also facing Our continuous costs optimization efforts, improvement
significant impacts of inflation, devaluation of Pak in plants’ efficiency and reliability, process improvement
Rupee and continually increasing interest rates. The initiatives, and enhanced focus on employee development
fertilizer industry is also facing serious challenges due have started giving dividends to the Company. With all
to non availability of foreign exchange for the import of the three plants in operation at Sadiqabad, Multan, and
raw material, packing material, spares, consumables, Sheikhupura, your Company is committed to ensure
CATALYSING
GREEN 37
continuous supply of its products to the farmer community f) There is no material departure from the best practices
through a cumulative annual name plate capacity of 2.57 of corporate governance, as detailed in the Listing
million MT per year. This will also ensure that farmers Regulations; and
continue to benefit from lower domestic prices and will
also result in substitution of high-priced imported fertilizers, g) There are no significant doubts upon the Company’s
hence savings of valuable foreign exchange for the ability to continue as a going concern.
country.
Taking advantage of its strong asset base and financial

Changes in the Board
position, the Company will continue to explore further During the year under review, Ms. Malika Nait Oukhedou
opportunities both inside and outside the fertilizer sector, joined the Board on February 25, 2022 to fill out the casual
for further improvement of value to its associates and vacancy in the office of independent director caused by the
stakeholders. The management and the Board of Directors resignation of Ms. Anja Elisabeth Nielsen.
are committed in ensuring that the Company’s financial
position is further strengthened and that the company The names of members of the Board are as follows:
continues to play its role for economic well-being of the
country. i. Mr. Arif Habib Non Executive Director
ii. Mr. Fawad Ahmed Mukhtar Executive Director

Code of Corporate iii. Mr. Fazal Ahmed Sheikh Executive Director
Governance iv. Mr. Faisal Ahmed Mukhtar Non Executive Director
The Board and Management are committed to ensuring v. Mr. Muhammad Kashif Habib Non Executive Director
that the requirements of the Code of Corporate
vi. Ms. Malika Nait Oukhedou Non Executive /
Governance are fully met. The Company has adopted Independent Director
good Corporate Governance practices with an aim
vii. Mr. Tariq Jamali Non Executive /
to enhance the accuracy, comprehensiveness, and Independent Director
transparency of financial and non-financial information. The
Directors are pleased to report that:
Directors’ Remuneration
a) The financial statements, prepared by the
management of the Company, present its state of In compliance with regulatory requirements, a transparent
affairs fairly, the result of its operations, cash flows, and formal process has been established for ascertaining
and changes in equity; the remuneration of the Directors. All Non-Executive and
Independent Directors of the Company are entitled to
b) Proper books of account of the Company have been remuneration for attending Board and Audit Committee
maintained; meetings along with reimbursement of expenses incurred
in connection with these meetings. Any Director who
c) Appropriate accounting policies have been serves on the Committee or who devotes special attention
consistently applied in the preparation of financial to the business of the Company or who otherwise performs
statements, and accounting estimates are based on services which, in the opinion of the Board, are outside the
reasonable and prudent judgment; scope of the statutory duties of a Director, may be paid
such remuneration by way of salary, allowances, facilities,
d) International Financial Reporting Standards, as perquisites, etc., as the Board may determine. Details
applicable in Pakistan, have been followed in the of the remuneration paid to executive and non-executive
preparation of financial statements; directors during the year are given in note 39 of the
consolidated and standalone financial statements.
e) The system of internal control is sound in design and
has been effectively implemented and monitored;

Audit Committee Board
Audit
HR &
Remuneration
Name of Director Committee
Meetings Committee
Meetings
During the year under review, Ms. Malika Nait Oukhedou Meeting
was appointed as a member of the Board Audit Committee Mr. Arif Habib 7 N/A N/A
in place of Ms. Anja Elisabeth Nielsen. The names of
Mr. Fawad Ahmed
members of the audit committee are as follows: 7 N/A 1
Mukhtar
Mr. Fazal Ahmed Sheikh 6 N/A N/A
Mr. Faisal Ahmed Mukhtar 5 3 N/A
Mr. Muhammad Kashif
6 3 1
3. Mr. Faisal Ahmed Mukhtar Member Habib
4. Ms. Malika Nait Oukhedou Member Ms. Malika Nait

1 2 1
Oukhedou
Human Resource and Mr. Tariq Jamali 7 4 N/A
Remuneration Committee Leave of absence was granted to the members not

attending the Board and Committee meetings.
During the year under review, Ms. Malika Nait Oukhedou
Trading in Shares of the

was appointed as a member/Chairperson of the Human
Resource and Remuneration Committee in place of Ms.
Anja Elisabeth Nielsen. The names of members of the Company by Directors and
Executives
Human Resource and Remuneration Committee are as
follows:
Nature of
1. Ms. Malika Nait Oukhedou Chairperson Name No. of shares
transaction
2. Mr. Muhammad Kashif Habib Member Mr. Arif Habib 72,950,479 Purchase/Gift In
3. Mr. Fawad Ahmed Mukhtar Member Mr. Asad Murad 1,012 Sale
Ms. Malika Nait Oukhedou 1 Purchase
Nomination and Risk Mrs. Fatima Fazal 1,814,000 Gift In
Pattern of Shareholding
The names of members of Nomination and Risk
Management Committee are as follows: The pattern of shareholding and categories of shareholders
as of December 31, 2022, as required under the Pakistan
1. Mr. Fazal Ahmed Sheikh Chairman Stock Exchange Regulations, have been annexed herewith
along with the Proxy Form.
3. Mr. Tariq Jamali Member

Code of Conduct
Board and Committees’ As per the Corporate Governance guidelines, the
Company has prepared a Code of Conduct and
Meetings and Attendance communicated these throughout the Company, as well as
placing it on the Company’s website.
During the year under review, seven meetings of the Board
Credit Ratings
of Directors, four meetings of the Audit Committee, and
one meeting of the HR and Remuneration Committee were
held from January 01, 2022, to December 31, 2022. The
Pakistan Credit Rating Agency (PACRA) has upgraded
attendance of the Board and the Committee members was
the long-term entity rating of the Company to AA+ and
as follows:
maintained the short-term rating at A1+. The ratings reflect
a strong business profile of the Company on the back
CATALYSING
GREEN 39
of a diversified product mix and very low expectation of

credit risk emanating from a very strong capacity for timely
External Auditors
payment of financial commitments. M/s. Yousuf Adil, Chartered Accountants, the retiring
auditors of the Company, being eligible, offered
Related Party Transactions themselves for re-appointment. The Board Audit
Committee and the Board of Directors have recommended
To comply with the requirements of listing regulations, their re-appointment by the shareholders at the 20th Annual
the Company presented all related party transactions General Meeting, as auditors of the Company for the year
before the Audit Committee and Board for their review and ending December 31, 2023, at a fee to be mutually agreed.
approval. These transactions have been approved by the
Audit Committee and Board of Directors in their respective
meetings. The details of related party transactions
Health, Safety, and
have been provided in note 37 of the consolidated and Environment
standalone audited financial statements.
HSE is one of the core values of the Company. As a
result of focused efforts, the Sadiqabad, Multan and
Internal Audit Sheikhupura plants successfully achieved 69.7, 20.3, and
14.6 Safe Million Man-Hours, respectively. The plants also
Internal Audit function is effectively operating within the
demonstrated world-class Total Recordable Incident Rate
framework set out in Code of Corporate Governance and
(TRIR) of zero.
the charter defined by the Audit Committee of the Board
of Directors, to provide an independent and objective
Over the years, Fatima Fertilizer plants have proven to be
evaluation on the effectiveness of governance, risk
a safe workplace for all stakeholders. The Company is
management and control activities. The Internal Audit
highly focused on implementing high standards of Process
function is progressing from a conventional function into a
Safety Management (PSM), based on the OSHA complaint
business partner and advisory role by following a proactive
DuPont system. It provides a structured approach to
approach towards effective corporate governance through
prevent process safety incidents.
risk mitigation, adding value within the business process
and creating synergies at the group level. The Board relies
Corporate HSE function provides strategic guidance
on the inputs and recommendations of the internal audit
to ensure development, effective implementation and
function through its Audit Committee on the adequacy and
compliance of HSE and Process safety policies, standards,
effectiveness of internal controls in the organization and
SOPs and guidelines to proactively manage process
takes appropriate measures.
safety and operational safety accident risks. Assurance
is provided to the leadership under the Operational
The function is effectively utilizing risk control matrices, to
Excellence framework. Process Safety and HSE systems
prioritize and develop its annual plan and to strengthen
auditing and training across the Company are also key
the internal controls through periodic reviews of all the
deliverables.
functions / processes in the organization.
Sadiqabad plant was referred as 1st runner-up in the IFA
Internal Audit also emphasizes the importance of Business
Green Leaf award thus adding further glory to a decorated
Continuity and completeness of Risk Control means to
site in terms of safety performance. Plant also won Merit
have seamless operations at entity level that is currently
in British Safety Council International Safety Awards,
being implemented. Further, Internal Audit also ensures
RoSPA Gold Category Award, the 19th AEEA Award for
the implementation of Enterprise Risk Management (ERM)
Environment Excellence, the 9th International Summit
Framework as per COSO standards, through a dedicated
Awards for Health, Safety and Environment Performance,
ERM section.
and Fire and Safety Award by NFEH and PFPA.

Sadiqabad plant successfully secured AWS International Due to the COVID-19 pandemic, the focus remained on
Water Stewardship Certification (Globally applicable Booster shots and complete vaccination of all employees
framework for sustainable water management). Different (including 3rd Party) to guarantee Business Continuity and
initiatives for environmental improvement were undertaken the well-being of employees. The Company continuously
such as Tree Plantation Drive, Environment week, Earth reviewed its Covid preventive measures along with
Hour, and World Water Day celebrated, and the successful changing global and local scenarios.
3rd Party Audit of Environment Management System by
EMC Pakistan. All fertilizer plants successfully recertified for the Integrated
Management System (IMS) comprising of Occupational
The achievements, research, and learnings were also Health and Safety Management System (ISO-45001:2018),
presented in international forums, the 18th Global Quality Management System (ISO-9001:2015), and
Conference on Process Safety (GCPS) and CCPS Global Environment Management System (ISO-14001:2015).
Summit, the 4th CCPS Middle East Conference, and ANNA
Conference. Safe Million Man Hours (SMMH)
Multan plant achieved distinction in the British Safety
All Three Fertilizer Plants
120
Council International Safety Award, a Certificate of 103.48 104.59
100.98 102.37
excellence by NFEH, and a Perfect Record Award by the 100 92.17 93.11 94.26 95.30
96.36 97.51 98.63 99.81
13.92 14.1
14.33 14.6
13.58 13.78
13.3
National Safety Council. PSM rejuvenation program was 11.95 12.15 12.48 12.75 13.02
20.29
80 19.46 19.89
18.67
implemented to achieve excellence in Process Safety. 15.01 15.38 15.79 16.17 16.60 17.05 17.51 18.08
A comprehensive PSM energizer campaign was run 60

throughout the year to keep the employees engaged and
65.21 65.58 65.99 66.38 66.74 67.16 67.54 67.951 68.39 68.81 69.26 69.7
motivated. Core process safety and HSE training such as 40
LOPA and HAZOP Capability Enhancement, RCA, Incident

20
analysis, First aid, and CPR were organized to enhance
competency level. 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
22 22 22 22 22 22 22 22 22 22 22 22
HSE performance of the Sheikhupura plant was Sadiqabad Plant Multan Plant Sheikhupura Plant
acknowledged by national and international forums. The

plant won the prestigious International Safety Award by
Information Technology
RoSPA (in Gold Category) for the consecutive 3rd time, Information technology (IT) is critical for Fatima Fertilizer’s
AEEA Award for Environment Excellence for the second operations, providing a competitive edge by streamlining
consecutive time, Best Tree Plantation Award by NFEH, processes, improving supply chain management,
the 8th International Summit Awards for Health, Safety and automating manufacturing processes and enhancing
Environment Performance by TPN, Fire and Safety Awards customer experience. Our investment in the latest IT
by NFEH. Furthermore, the site received recognition in trends such as data analytics, cloud computing, machine
Health and Safety performance by Pakistan Safety Council learning and cyber security drives efficiency and enables
(PSC) in the categories of Champion of HSE Award, HSE secure data-driven decision-making. Data protection
initiative award, Excellence CSR award and nine other and proactive measures to mitigate risks of cyber threats
individual/organizational recognitions. continues to be a priority for us. Alongside, we have
upgraded our IT infrastructure to support these latest
Different initiatives for environmental refinement were taken trends, by expanding capacity and adopting modern
at Sheikhupura plant such as, Multiple Tree Plantation hardware and software solutions.
Drives, Evaporation Pond rehabilitation, Underground
Aquifer study, World Environment Day, and Earth Hour Fatima Fertilizer’s focus on digital technologies streamlines
Celebrations. Care towards the environment was processes and improves communication and collaboration
exemplified by planting an unprecedented number of across departments, leading to higher productivity and
7500+ trees/saplings. The Sheikhupura Plant also essayed profitability. Our IT service management methodology is
the Plastic Free month (July) campaign jointly with WWF as
another step towards our vision of a world free of plastic
waste.
CATALYSING
GREEN 41
built on the internationally recognized ITIL framework. This Two key programs, ‘Empower to Lead’ and ‘Lead from
facilitates the adoption of new technologies and supports the Front’ focused on building a succession pipeline,
digital transformation initiatives, enabling the company to while the organization’s career progression framework
innovate and compete in the digital economy. ensured robust career progression and sustained
leadership bench. Further, the Company invested in talent
Sustainability and CSR development through its FG Business Academy, which had
over 150 management employees, and FG Wellness 360,
Initiatives which covered mental, social, physical, and professional
wellness. The Organization Health Survey showed an
We remain firmly committed to the communities we operate Employee Engagement Index of 88%, a 14% increase from
in as we strongly believe our growth depends on the growth the previous year’s survey.
of the communities around us. Sustainability and CSR
goals are embedded in how we operate as a business, they Further, we believe that diversity, equity and inclusion are
are part of our very foundation and reflect our commitment integral pillars of a successful and thriving workplace.
towards the development of the communities we operate in. We are committed to creating an inclusive culture where
We are committed to corporate social responsibility, and its all employees feel valued and respected for their unique
initiatives included community development, environment perspectives and contributions. A dedicated D&E&I
protection, governance and ethical practices, employee committee comprising Director HR, Advisor to CEO,
growth and well-being, customer service, and working Director Marketing along with a cross-functional team has
relationships with shareholders and investors. been formed to further strengthen the D&E&I agenda. A
reflection of our progress and commitment in advancing
Human Resource Management diversity, equity and inclusion is as follows:
and Employees Relations

Diversity
We believe that our employees are our greatest strength.
We are striving to craft a value- based culture that will We recognize the importance of having a diverse workforce
enable our people to achieve even higher milestones. We that represents the communities we serve. Our diversity
continue to embark on cultural programs as we believe efforts include initiatives such as:
that our culture provides the competitive advantage that
fuels innovation, enhances our ability to attract and retain • Implementing inclusive hiring practices that focus on
talent, and strengthens our employer brand. We partner attracting and retaining diverse talent.
strategically with the business to provide proactive people
solutions to future-proof our organization. • Providing training and resources to help employees
recognize and appreciate differences.
Our Human Resource function played a significant role in
driving the organization’s strategic agenda by investing • Establishing employee resource groups that offer
over 28,000 hours in leadership development programs, a safe and supportive space for under represented
including Blue Ocean Strategy, Harvard Mentor Manager, groups to connect and collaborate.
and Stanford Coaching & Mentoring, with a combination
of face-to-face and e-learning programs. The Company • Improving Manager Quality for fostering a culture of
values were the top priority, and over 1,000 values round Diversity, Equity & Inclusion.
tables were held to ensure values sustainment.

Equity Acknowledgments
We believe in treating all employees fairly and equitably, The Board places on record its gratitude for the hard
regardless of their background or identity. Our equity work and dedication of every employee of the Company.
efforts include initiatives such as: The Board also appreciates and acknowledges the
assistance, guidance, and cooperation of all stakeholders
• Conducting pay equity analyses to ensure all including the Government of Pakistan, financial institutions,
employees are paid fairly, as per the position covering commercial banks, business associates, customers, and
scope of the job. all others whose efforts and contributions strengthened the
Company and hope that same spirit will prevail in the future
• Offering flexible work arrangements to accommodate as well.
different needs and responsibilities.
• Providing access to development and advancement For and on behalf of the Board
opportunities for all employees.
Inclusion
We believe in creating a culture of belonging where all
employees feel comfortable bringing their whole selves to
work. Our inclusion efforts include initiatives such as:
Fawad Ahmed Mukhtar Arif Habib
Chief Executive Officer Chairman
• Providing diversity and inclusion training for all
employees.
Lahore
• Encouraging open and honest communication to April 03, 2023
foster a culture of respect and understanding.
• Celebrating diverse perspectives and experiences

through employee recognition programs.
Moreover, we are committed in creating a diverse and

inclusive workplace where every employee has the
opportunity to grow and advance in career. In 2022, 25%
female employees were promoted to the next career level,
while there is 17% representation of female employees
in EXCOM. We are committed to creating a workplace
that values and celebrates diversity, equity and inclusion.
While we are proud of the progress we have made, we
recognize that there is still more work to be done. We
remain committed to advancing these efforts and creating
a workplace where all employees can thrive.
CATALYSING
GREEN 43
CATALYSING
GREEN 45
CATALYSING
GREEN 47
Annexures to the Directors’ Report
KEY PERFORMANCE
INDICATORS
Consolidated
Unit 2022 2021 2020 2019 2018 2017
PROFITABILITY
Gross profit % 34.12 38.30 40.40 37.22 50.03 41.18
EBITDA margin % 25.67 33.64 35.33 31.72 43.27 32.95
Operating profit % 22.39 27.26 30.44 27.95 36.28 28.27
Profit before tax % 20.21 25.06 26.30 22.94 32.72 22.31
Net profit % 9.28 16.42 18.63 16.10 23.22 20.43
Return on equity % 13.21 18.43 15.24 15.47 17.12 14.12
Return on capital employed % 12.55 18.17 14.24 13.71 14.81 11.83
Return on total assets % 6.35 9.99 8.43 7.78 9.29 7.88
LIQUIDITY / ACTIVITY
Current ratio Times 1.28 1.32 1.03 0.88 0.89 0.93
Quick / Acid test Ratio Times 0.69 0.77 0.50 0.50 0.51 0.52
Debt to Assets Times 0.52 0.46 0.45 0.50 0.46 0.44
Cash from Operations to Sales Times 0.06 0.23 0.23 0.09 0.34 0.39
Inventory turnover Times 3.95 4.36 3.39 5.34 4.20 6.34
Stock holding period Days 92.48 83.78 107.63 68.31 86.84 57.55
Fixed assets turnover Times 1.38 1.07 0.68 0.74 0.56 0.52
Total assets turnover Times 0.68 0.61 0.45 0.48 0.40 0.39
CAPITAL STRUCTURE
Debt : Equity Ratio 9:91 7:93 9:91 14:86 19:81 24:76
Interest cover Times 11.50 15.05 6.40 5.57 10.21 4.74
Financial Leverage Times 0.22 0.14 0.24 0.37 0.31 0.35
Debt service coverage Times 8.10 4.85 2.60 2.09 2.48 1.82
Total liabilities to net worth Times 1.08 0.84 0.81 0.99 0.84 0.79
Weighted average cost of debt % 15.61 9.55 11.06 15.02 7.91 7.33
INVESTMENT / MARKET
Market price per share Rs. 33.60 35.99 29.10 26.59 36.47 26.40
Book value per share Rs 50.91 47.74 41.48 37.15 33.14 31.26
Market to book value per share Times 0.66 0.75 0.70 0.72 1.10 0.84
Earnings per share Rs 6.73 8.80 6.32 5.75 5.67 4.41
Price earning Times 5.00 4.09 4.60 4.63 6.43 5.98
Dividend per share Rs 3.50 3.50 2.50 2.00 1.75 2.25
Dividend cover % 192.16 251.35 252.85 287.37 324.18 196.15
Dividend yield % 10.42 9.72 8.59 7.52 4.80 8.52
Dividend payout % 52.04 39.79 39.55 34.80 30.85 50.98

CASH FLOWS SUMMARY
Consolidated
Rs in million 2022 2021 2020 2019 2018 2017
Cash Flows From Operating Activities
Cash Generated from Operations 22,023 31,427 24,988 16,434 22,112 22,472
Net increase / (decrease) in long term deposits 197 65 49 4 1 (3)
Finance costs paid (2,397) (1,963) (3,736) (3,158) (1,777) (2,845)
Taxes paid (10,793) (2,988) (4,664) (6,345) (3,013) (1,951)
Employee retirement benefits paid (131) (242) (79) (55) (44) (76)
Net cash generated from operating activities 8,899 26,299 16,559 6,879 17,280 17,597
Cash Flows From Investing Activities

Fixed capital expenditure (9,467) (5,771) (2,217) (11,379) (8,654) (1,914)
Proceeds from disposal of property, plant & equipment 19 3 45 2 2 5
Long term investments (1,041) (600) - - (2) -
Short term loans (1,500) (3,758) - - (2,000) (50)
Short term investments (2,715) 194 (1,575) 157 (471) -
Profit received on short term loans and saving accounts 973 1,977 289 725 414 366
Net decrease / (increase) in long term loans and deposits (655) (405) (32) 173 (140) 16
Net cash used in investing activities (14,385) (8,359) (3,489) (10,322) (10,851) (1,578)
Cash Flows From Financing Activities

Repayment of long term finances (1,929) (5,857) (4,967) (7,685) (7,396) (5,518)
Proceeds from long term finance 5,623 3,920 1,462 4,000 2,156 -
Oversubscribed sukuk - - - - - (8,093)
Repayment of lease liabilities (270) (731) (354) (291) - -
Dividend paid (9,087) (3,507) (4,349) (3,554) (4,681) (4,200)
Increase / (decrease) in short term finance - net 3,377 (2,584) (2,410) 7,428 890 (6,364)
Net cash used in financing activities (2,288) (8,759) (10,617) (102) (9,030) (24,174)
Net (decrease) / increase in cash and cash equivalents (7,774) 9,181 2,453 (3,545) (2,602) (8,155)
Cash and cash equivalents at beginning of the year 5,643 (3,538) (5,991) (2,447) 156 8311
Cash and cash equivalents at end of the year (2,131) 5,643 (3,538) (5,991) (2,447) 156
Cash Flows from Operating, Investing and Financing Activities

Rupees in Million
25,000
20,000
15,000
10,000
5,000
0
(5,000)
(10,000)
(15,000)
(20,000)
(25,000)
2022 2021 2020 2019 2018 2017
Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities
12,000
10,000
8,000
6,000
4,000
2,000
0
(2,000)
(4,000)
(6,000)
(8,000)
(10,000)
2022 2021 2020 2019 2018 2017
Net Increase / (Decrease) in Cash & Cash Equivalents
CATALYSING
GREEN 49
VERTICAL ANALYSIS
Statement of Financial Position
Consolidated
2022 2021 2020 2019 2018 2017
Rs M % Rs M % Rs M % Rs M % Rs M % Rs M %
Non current assets

Property, plant and equipment 110,257 49.6% 105,422 57.0% 104,938 66.6% 100,721 64.9% 91,719 71.5% 86,705 73.7%
Intangible assets 3,651 1.6% 3,609 2.0% 5,991 3.8% 5,974 3.9% 5,979 4.7% 5,938 5.0%
Investment property 165 0.1% 775 0.4% 756 0.5% 628 0.4% - 0.0% - 0.0%
Long term investments 1,469 0.7% 795 0.4% 202 0.1% 175 0.1% 146 0.1% 86 0.1%
Long term loan to an associated company 2,999 1.3% 1,999 1.1% 2,999 1.9% 2,999 1.9% 1,999 1.6% 2,999 2.5%
Long term deposits 1,174 0.5% 518 0.3% 114 0.1% 82 0.1% 255 0.2% 115 0.1%
Total non current assets 119,715 53.8% 113,120 61.2% 114,999 73.0% 110,577 71.3% 100,097 78.1% 95,843 81.5%

Current assets
Stores and spares 14,722 6.6% 11,566 6.3% 8,274 5.3% 7,713 5.0% 5,834 4.6% 5,565 4.7%
Stock in trade 32,488 14.6% 18,332 9.9% 13,531 8.6% 11,518 7.4% 6,100 4.8% 4,208 3.6%
Trade debts 22,831 10.3% 9,654 5.2% 4,450 2.8% 7,207 4.6% 2,565 2.0% 1,931 1.6%
Short term loans 8,500 3.8% 7,000 3.8% 3,242 2.1% 3,242 2.1% 3,242 2.5% 1,242 1.1%
Advances, deposits, prepayments and other receivables 17,509 7.9% 15,636 8.5% 8,676 5.5% 11,845 7.6% 9,030 7.0% 7,843 6.7%
Short term investment 4,129 1.9% 2,243 1.2% 2,524 1.6% 530 0.3% 623 0.5% 198 0.2%
Advance income tax - 0.0% - 0.0% 1,305 0.8% 1,969 1.3% - 0.0% - 0.0%
Cash and bank balances 2,611 1.2% 7,343 4.0% 556 0.4% 515 0.3% 717 0.6% 832 0.7%
Total current assets 102,790 46.2% 71,774 38.8% 42,558 27.0% 44,539 28.7% 28,111 21.9% 21,818 18.5%
Total assets 222,506 100.0% 184,893 100.0% 157,557 100.0% 155,116 100.0% 128,208 100.0% 117,661 100%

Capital and reserves
Issued, subscribed and paid up capital 21,000 9.4% 21,000 11.4% 21,000 13.3% 21,000 13.5% 21,000 16.4% 21,000 17.8%
Reserves 85,911 38.6% 79,263 42.9% 66,103 42.0% 57,008 36.8% 48,595 37.9% 44,645 37.9%
Total capital and reserves 106,911 48.0% 100,263 54.2% 87,103 55.3% 78,008 50.3% 69,595 54.3% 65,645 55.8%

Non current Liabilities
Long term finance 8,446 3.8% 5,172 2.8% 3,114 2.0% 6,254 4.0% 8,377 6.5% 13,752 11.7%
Lease liabilities 1,153 0.5% 1,437 0.8% 1,901 1.2% 279 0.2% - 0.0% - 0.0%
Deferred liabilities 25,364 11.4% 23,522 12.7% 24,116 15.3% 19,943 12.9% 18,609 14.5% 14,826 12.6%
Deferred government grant - 0.0% - 0.0% 61 0.0% - 0.0% - 0.0% - 0.0%
Long term deposits 373 0.2% 175 0.1% 110 0.1% 61 0.0% 57 0.0% 57 0.0%
Total non current liabilities 35,336 15.9% 30,307 16.4% 29,303 18.6% 26,536 17.1% 27,043 21.1% 28,634 24.3%

Current liabilities
Trade and other payables 55,372 24.9% 38,469 20.8% 22,871 14.5% 26,484 17.1% 18,069 14.1% 13,864 11.8%
Accrued finance cost 715 0.3% 307 0.2% 451 0.3% 837 0.5% 306 0.2% 260 0.2%
Short term finance - secured 12,884 5.8% 6,466 3.5% 11,444 7.3% 16,265 10.5% 5,495 4.3% 2,117 1.8%
Unclaimed dividend 46 0.0% 1,784 1.0% 41 0.0% 190 0.1% 69 0.1% - 0.0%
Current maturity of lease liablities 541 0.2% 375 0.2% 480 0.3% 571 0.4% - 0.0% - 0.0%
Current maturity of long term finances 2,346 1.1% 1,892 1.0% 5,803 3.7% 6,225 4.0% 7,631 6.0% 7,141 6.1%
Loan from directors 18 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0%
Provision for taxation 8,336 3.7% 4,968 2.7% - 0.0% - 0.0% - 0.0% - 0.0%
Current portion of deferred government grant - 0.0% 61 0.0% 62 0.0% - 0.0% - 0.0% - 0.0%
Total current liabilities 80,259 36.1% 54,323 29.4% 41,151 26.1% 50,572 32.6% 31,570 24.6% 23,381 19.9%
Total liabilities and equity 222,506 100.0% 184,893 100.0% 157,557 100.0% 155,116 100.0% 128,208 100.0% 117,661 100.0%

HORIZONTAL ANALYSIS
Statement of Financial Position
Consolidated
2022 22 vs 21 2021 21 vs 20 2020 20 vs 19 2019 19 vs 18 2018 18 vs 17 2017
PKR Change PKR Change PKR Change PKR Change PKR Change PKR
Non current Assets

Property, plant and equipment 110,257 5% 105,422 0.5% 104,938 4.2% 100,721 9.8% 91,719 5.8% 86,705
Intangible assets 3,651 1% 3,609 -39.8% 5,991 0.3% 5,974 -0.1% 5,979 0.7% 5,938
Investment property 165 -79% 775 2.5% 756 20.5% 628 100.0% - 0.0% -
Long term investments 1,469 85% 795 294.4% 202 15.3% 175 19.9% 146 69.6% 86
Long term loan to an associated company 2,999 50% 1,999 -33.3% 2,999 0.0% 2,999 50.0% 1,999 -33.3% 2,999
Long term deposits 1,174 126% 518 356.0% 114 39.0% 82 -67.9% 255 122.1% 115
Total non current assets 119,715 6% 113,120 -1.6% 114,999 4.0% 110,577 10.5% 100,097 4.4% 95,843

Current assets
Stores and spares 14,722 27.3% 11,566 39.8% 8,274 7.3% 7,713 32.2% 5,834 4.8% 5,565
Stock in trade 32,488 77.2% 18,332 35.5% 13,531 17.5% 11,518 88.8% 6,100 45.0% 4,208
Trade debts 22,831 136.5% 9,654 116.9% 4,450 -38.2% 7,207 181.0% 2,565 32.8% 1,931
Short term loans 8,500 21.4% 7,000 115.9% 3,242 0.0% 3,242 0.0% 3,242 161.1% 1,242
Advances, deposits, prepayments and other receivables 17,509 12.0% 15,636 80.2% 8,676 -26.8% 11,845 31.2% 9,030 15.1% 7,843
Short term investment 4,129 84.1% 2,243 -11.1% 2,524 376.1% 530 -14.9% 623 214.6% 198
Advance income tax - 0.0% - 1,305 1,969 0.0% - 0% - 0% -
Cash and bank balances 2,611 -64% 7,343 1221.3% 556 8.0% 515 -28.3% 717 -13.8% 832
Total current assets 102,790 43% 71,774 68.7% 42,558 -4.4% 44,539 58.4% 28,111 28.8% 21,818
Total assets 222,506 20% 184,893 17.4% 157,557 1.6% 155,116 21.0% 128,208 9.0% 117,661

Capital and reserves
Issued, subscribed and paid up capital 21,000 0.0% 21,000 0.0% 21,000 0.0% 21,000 0.0% 21,000 0.0% 21,000
Reserves 85,911 8.4% 79,263 19.9% 66,103 16.0% 57,008 17.3% 48,595 16.0% 44,645
Total capital and reserves 106,911 6.6% 100,263 15.1% 87,103 11.7% 78,008 12.1% 69,595 10.9% 65,645

Non current liabilities
Long term finance 8,446 63.3% 5,172 66.1% 3,114 -50.2% 6,254 -25.3% 8,377 -39.1% 13,752
Lease liabilities 1,153 -19.8% 1,437 -24.4% 1,901 582.4% 279 100.0% - 0.0% -
Deferred liabilities 25,364 7.8% 23,522 -2.5% 24,116 20.9% 19,943 7.2% 18,609 4.1% 14,826
Deferred government grant - 0.0% - -100.0% 61 100.0% - 0.0% - 0% -
Long term deposits 373 112.8% 175 58.7% 110 80.1% 61 7.1% 57 1.0% 57
Total non current liabilities 35,336 16.6% 30,307 3.4% 29,303 10.4% 26,536 -1.9% 27,043 -16.7% 28,634

Current liabilities
Trade and other payables 55,372 43.9% 38,469 68.2% 22,871 -13.6% 26,484 46.6% 18,069 30.3% 13,864
Accrued finance cost 715 132.8% 307 -31.8% 451 -46.2% 837 173.2% 306 17.8% 260
Short term finance - secured 12,884 99.3% 6,466 -43.5% 11,444 -29.6% 16,265 196.0% 5,495 159.6% 2,117
Unclaimed dividend 46 -97.4% 1,784 4266.4% 41 -78.5% 190 176.0% 69 0% -
Current maturity of lease liablities 541 44.3% 375 -21.9% 480 -15.9% 571 100.0% - 0% -
Directors loans 18 100% - 0.0% - 0.0% - 0% - 0% -
Current maturity of long term finances 2,346 24.0% 1,892 -67.4% 5,803 -6.8% 6,225 -18.4% 7,631 6.9% 7,141
Provision for taxation 8,336 67.8% 4,968 100.0% 0.0% 0% - 0% - 0% -
Current portion of deferred government grant - -100.0% 61 -0.1% 62 0% - 0% - 0% -
Total current liabilities 80,259 47.7% 54,323 32.0% 41,151 -18.6% 50,572 60.2% 31,570 35.0% 23,381
Total liabilities and equity 222,506 20% 184,893 17.4% 157,557 1.6% 155,116 21.0% 128,208 9.0% 117,661
CATALYSING
GREEN 51
VERTICAL ANALYSIS
Statement of Profit or Loss
Consolidated
2022 2021 2020 2019 2018 2017
Rs M % Rs M % Rs M % Rs M % Rs M % Rs M %
Sales 152,231 100% 112,488 100.0% 71,267 100.0% 74,964 100.0% 51,310 100.0% 45,371 100.0%
Cost of sales (100,289) -66% (69,404) -61.7% (42,473) -59.6% (47,065) -62.8% (25,639) -50.0% (26,686) -58.8%
Gross profit 51,943 34% 43,084 38.30% 28,795 40.40% 27,899 37.22% 25,671 50.0% 18,686 41.18%
Distribution cost (7,947) -5% (5,049) -4.5% (3,891) -5.5% (3,800) -5.1% (3,685) -7.2% (3,610) -8.0%
Administrative expenses (5,936) -4% (3,900) -3.5% (3,369) -4.7% (2,779) -3.7% (2,317) -4.5% (1,737) -3.8%
38,060 25% 34,136 30.3% 21,535 30.2% 21,320 28.4% 19,669 38.3% 13,338 29.4%
Finance cost (2,930) -2% (2,007) -1.8% (3,469) -4.9% (3,761) -5.0% (1,823) -3.6% (2,707) -6.0%
Other operating expenses (6,337) -4% (4,677) -4.2% (1,678) -2.4% (1,480) -2.0% (1,708) -3.3% (914) -2.0%
28,792 19% 27,452 24.4% 16,389 23.0% 16,079 21.4% 16,138 31.5% 9,717 21.4%
Share of profit from associate (68) 0% (0) 0.0% 27 0.0% 25 0.0% 49 0.1% - 0.0%
Other operating income 2,425 2% 1,210 1.1% 1,810 2.5% 1,090 1.5% 603 1.2% 403 0.9%
(Loss) / gain on re-measurement of GIDC (274) 0% (368) -0.3% 878 1.2% - 0.0% - 0.0% - 0.0%
Loss allowance on subsidy receivable from GoP (110) 0% (110) -0.1% (360) -0.5% - 0.0% - 0.0% - 0.0%
Profit before tax 30,765 20% 28,185 25.1% 18,743 26.3% 17,193 22.9% 16,790 32.7% 10,120 22.3%
Taxation (16,641) -11% (9,711) -8.6% (5,468) -7.7% (5,123) -6.8% (4,877) -9.5% (852) -1.9%
Profit for the year 14,124 9.28% 18,474 16.42% 13,275 18.63% 12,070 16.10% 11,914 23.22% 9,268 20.43%
HORIZONTAL ANALYSIS
Statement of Profit or Loss
Consolidated
2022 22 vs 21 2021 21 vs 20 2020 20 vs 19 2019 19 vs 18 2018 18 vs 17 2017
Rs M Change Rs M Change Rs M Change Rs M Change Rs M Change Rs M
Sales 152,231 35% 112,488 57.84% 71,267 -4.93% 74,964 46.1% 51,310 13.1% 45,371
Cost of sales (100,289) 44% (69,404) 63.41% (42,473) -9.76% (47,065) 83.6% (25,639) -3.9% (26,686)
Gross profit 51,943 21% 43,084 49.63% 28,795 3.21% 27,899 8.7% 25,671 37.4% 18,686
Distribution cost (7,947) 57% (5,049) 29.76% (3,891) 2.39% (3,800) 3.1% (3,685) 2.1% (3,610)
Administrative expenses (5,936) 52% (3,900) 15.77% (3,369) 21.22% (2,779) 19.9% (2,317) 33.4% (1,737)
38,060 11% 34,136 58.51% 21,535 1.01% 21,320 8.4% 19,669 47.5% 13,338
Finance cost (2,930) 46% (2,007) -42.16% (3,469) -7.75% (3,761) 106.3% (1,823) -32.7% (2,707)
Other operating expenses (6,337) 35% (4,677) 178.80% (1,678) 13.31% (1,480) -13.3% (1,708) 86.9% (914)
28,792 5% 27,452 67.51% 16,389 1.93% 16,079 -0.4% 16,138 66.1% 9,717
Share of profit from associate (68) 19557% (0) -101.30% 27 8.54% 25 -49.8% 49 100.0% -
Other operating income 2,425 100% 1,210 -33.14% 1,810 66.10% 1,090 80.7% 603 49.6% 403
(Loss) / gain on re-measurement of GIDC (274) -25% (368) 100.00% 878 100.00% - 0.0% - 0.0% -
Loss allowance on subsidy receivable from GoP (110) 0% (110) 100.00% (360) 100.00% - 0.0% - 0.0% -
Profit before tax 30,765 9% 28,185 50.38% 18,743 9.01% 17,193 2.4% 16,790 65.9% 10,120
Taxation (16,641) 71% (9,711) 77.59% (5,468) 6.73% (5,123) 5.1% (4,877) 472.2% (852)
Profit for the year 14,124 -24% 18,474 39.17% 13,275 9.98% 12,070 1.3% 11,914 28.5% 9,268

GRAPHICAL PRESENTATION
Balance Sheet Analysis (Assets) Balance Sheet Analysis (Equity & Liabilities)
Rupees in Million Rupees in Million
250,000 120,000
100,000
200,000
80,000
150,000
60,000
100,000
40,000
50,000 20,000
0 0
2022 2021 2020 2019 2018 2017 2022 2021 2020 2019 2018 2017
Non Current Assets Current Assets Total Assets Capital & Reserves Non Current Liabilities Current Liabilities
Proﬁt or Loss Book Value, Earnings & Dividend Per Share

Rupees in Million Rupees
160,000 60
140,000
50
120,000
40
100,000
80,000 30
60,000
20
40,000
10
20,000
0 0
Sales Gross Profit EBITDA Profit before Tax Profit after Tax Book Value per Share EPS DPS
2022 2021 2020 2022 2021 2020
Proﬁt and Loss Analysis

Percentage
2022 66 5 4 2 3 11 9
2021 62 4 3 2 4 9 16
2020 60 5 5 5 -1 8 19
2019 63 5 4 5 7 16
2018 50 7 5 4 2 10 23
2017 59 8 4 6 1 2 20
0 20 40 60 80 100
Cost of Sales Distribution Cost Administrative Expenses Finance Cost Other Operating Expenses Taxation Profit for the year
CATALYSING
GREEN 53
WEALTH CREATION
AND DISTRIBUTION

2022 2021 2020
Statement Of Value Addition & Its Distribution

Wealth Generated PKR Million % PKR Million % PKR Million %
Sales Including GST 153,728 290.3% 114,977 233.4% 72,825 217.8%

Other Income 1,973 3.7% 733 1.5% 2,354 7.0%
155,701 294.1% 115,710 234.9% 75,179 224.9%

Materials & Services Bought In 102,754 194.1% 66,447 134.9% 41,745 124.9%
Value Addition 52,947 100% 49,263 100.0% 33,433 100.0%

Wealth Distributed PKR Million % PKR Million % PKR Million %
Remuneration & Benefits to Employees 11,400 21.5% 8,263 16.8% 5,884 17.6%
Contribution to National Exchequer (Income Tax and Sales Tax) 18,138 34.3% 12,200 24.8% 7,025 21.0%
Donations towards health, education and various welfare activities 1,021 1.9% 713 1.4% 812 2.4%
Finance Cost 2,930 5.5% 2,007 4.1% 3,469 10.4%
Dividend on ordinary and preference shares 7,350 13.9% 5,250 10.7% 4,200 12.6%
Retained for future growth
Depreciation 5,334 10.1% 7,607 15.4% 2,968 8.9%

Retained earning 6,774 12.8% 13,224 26.8% 9,075 27.1%
52,947 100% 49,263 100% 33,433 100.0%
2022 Percentage 2021 Percentage

Contribution to National Exchequer
(Income Tax and Sales Tax) – 34%
Contribution to National Exchequer (Income Tax and Sales Tax) –25%
Donations towards health, education

Remuneration & Benefits to Employees – 21% and various welfare activities – 2%
Finance Cost – 4%
Dividend on ordinary and
preference shares – 11%
Depreciation – 15%
Retained earning – 13%
Donations towards health, education

and various welfare activities – 2%
Retained Earning – 27%

Dividend – 14%
Depreciation – 10% Remuneration & Benefits to Employees – 17%
Finance Cost – 6%

SWOT ANALYSIS
S •
•
Strengths
Diversified and distinguished product portfolio

(Urea, NP & CAN / value added products)
Strong financial standings with healthy cash
W
•
•
competition
Weaknesses
Youngest brand facing long established
Limited suppliers for key raw materials

flows • Logistic support still evolving
• Skilled and experienced technical, engineering
and support teams
• Operational excellence in terms of service
factor and safety standards
• Strategically located facilities augmenting
farmer outreach
• High performing farmer technical support
teams for unique farmer and customer
services
• Reputation as a socially responsible company
O •
•
Opportunities
Business diversification - local and

international markets
Agrarian economy having substantial growth
T
•
•
Threats
Uncertain Government policy outlook

particularly regarding the fertilizer sector
Shortage of gas and diminishing gas reserves
potential • Weak economic situation of farmers
• High tech mechanized / precision agriculture – • Volatile Tax Regime and long pending tax
corporate farming refunds
• Fintech and crop insurance • Unstable economic and political environment
• Digitization of business processes • Un precedented inflation and exorbitant
borrowing rates
• Imports restrictions due to decline in Forex
Reserves
• Climate change disrupting fertilizer
consumption
CATALYSING
GREEN 55
CORPORATE GOVERNANCE
Identification of Risks Further, as 2nd line of defense, an Enterprise Risk Management

(ERM) function is operating to oversee all the business risks and
Managing risk effectively has always been a touchstone of most develop appropriate and effective mitigation strategies. In this
successful companies. Like any commercial organization which regard, for efficient monitoring, a detailed Risk profiling matrix and
operates in the market, Fatima is exposed to multiple risks; the complete adherence to Risk Management Dimension/Practices
most significant ones are identified in the following sections. have been implemented at the Company, as per ERM framework
The Company is fully aware of the uncertainties attached with and best practices.
these risks and thus has designed prudent strategies to mitigate
them. In today’s risk filled business environment, the Strategic,
Commercial, Operational and Financial risks can arise from
Issues Raised in
uncertainties not only from our business environment but also the Last AGM
from key business decisions.
Queries of the shareholders were properly addressed on the
Strategic Risk: Strategic risks can emanate from internal Company’s published audited financial statements and other
or external events and scenarios that inhibit or prevent an agenda items during the 19th Annual General Meeting held on April
organization from achieving its strategic objectives. Broadly 29, 2022 and no significant issues were raised.
strategic risks emerge from business strategy decisions. This
form of risks can affect an entity’s performance by giving rise to
challenges that may consequently cause a particular business
Review of Related
strategy to produce unexpected results. Party Transactions
Commercial Risk: Commercial risks are related to the The Code requires the Company to place before the Audit
commercial operations of the entity. These may arise from Committee, and upon recommendation of Audit Committee, place
circumstances that affect the business and/or product viability of before the Board of Directors for their review and approval, its
the entity, thus impairing the shareholders’ value proposition. related party transactions distinguishing between transactions
carried out on terms equivalent to those that prevail in arm’s
Operational Risk: Operational risk is the risk that operations are length transactions and transactions which are not executed
inefficient and ineffective in executing the entity’s business model, at arm’s length price and recording proper justification for
satisfying customers and achieving entity’s quality, cost and time using such alternate pricing mechanism. The Company has
performance objectives. duly ensured compliance of this requirement and has obtained
approval of related party transactions by the Board of Directors
Financial Risk: Financial risk is the risk that cash flows and other upon recommendation of the Audit Committee. The related
monetary risks are not managed cost effectively to (a) maximize party transactions are also presented before the shareholders in
cash availability, (b) reduce uncertainty of currency, interest rate, each annual general meeting of the Company for their approval/
credit and other risks, or (c) move cash funds quickly and without ratification.
loss of value to wherever they are needed most.
Risk Mitigation Strategies: The Company’s Risk Mitigation Policy and Procedure for
Strategy includes reduction of the likelihood that a risk event will
occur and/or reduction of the impact of a risk event if it does
Stakeholders’ Engagement
occur. For this purpose, the Board, through its Audit Committee Fatima believes in a collaborative long term relationship with its
and Risk Committee, reviews the potential risks and the adequacy stakeholders at all levels. The Company treats its shareholders
of internal controls and risk management procedures. as its partners and ensures that all possible means of effective
communication/engagement are adapted to bring them up to date
Also, Structured Policies and Procedures for each department, with disclosures and other valuable information.
as 1st Line of Defense, exhibit an imperative component of the
Company’s risk governance framework and ensure adequate The following table elaborates how Fatima engages its
management of financial, operational and compliance risks. In stakeholders. These stakeholders have been identified based
addition, Senior management assesses these risks and places on, firstly, their influence on the Company, and secondly, their
appropriate controls in order to mitigate and respond thereto dependence on the Company.
through preventive, detective and corrective actions, where
required.

Stakeholders Why do we Engage Nature of Engagement Frequency Value Added
Institutional To further strengthen 1. Investor Meetings 1. As and when required Financing requirements are
Investors / Fatima’s image by 2. Financial reporting 2. Periodic Basis met for expansion projects
Lenders maintaining a professional 3. Head Office / Plant visits 3. As and when required
and transparent 4. Circulation of Minutes 4. Periodic Basis
relationship 5. Circulation of Company 5. Periodic Basis
Reports
Customers 1. Enhance farmer 1. Farmer call center 1. Continuous 1. Valuable feedback helps
knowledge base 2. Farmer education events 2. Occasionally in understanding what
about technological 3. Demonstration plots 3. Continuous farmers want
advancements in Agri 4. Corporate website 4. Continuous 2. Helps in bridging the
sector 5. Effective reward system 5. Occasionally gap between farmers
2. Educate farmer about place for customers and 6. Occasionally and Company
potential benefits of distributors
balanced fertilizer use 6. Office meetings
Media To benefit from the 1. Advertisements through 1. Continuous 1. Helps in building
most effective means print and electronic 2. Continuous Company’s image,
of communication with media campaigns resulting in maximizing
our customers and other 2. Announcements through shareholders wealth
stakeholders Company website and 2. Engagement of all
social media stakeholders
Employees 1. Sale and other events 1. Annually Satisfied and engaged

2. Cultural activities 2. Occasionally employees become
3. Trainings 3. Annually valuable assets for the
4. Workshops 4. As and when required Company resulting in
higher efficiency and
productivity
Shareholders 1. Timely delivery of 1. Annual general meetings 1. Annually 1. Results in the stock price
material and price 2. Annual report 2. Annually trading at intrinsic value
sensitive information in a 3. Quarterly reports 3. Quarterly 2. To encourage equity
transparent manner 4. One-on-One meetings 4. As and when required participation in
2. To address concerns with investors 5. Continuous expansion project
and queries in a timely 5. Investor relations section
manner on website
Regulators 1. Ensure full compliance 1. Filing of statutory returns 1. Periodic basis 1. Full compliance leads
with legal and regulatory 2. Annual / Quarterly 2. As and when required to positive projection
requirements reports submission 3. As and when required of Company’s image,
2. To develop and sustain 3. Written communication 4. As and when required in turn maximizing
transparent means of with respect to queries shareholders’ value
communication with the 4. One-on-one meetings 2. Responsible corporate
regulator with representatives of citizen
regulators
Investor Relations Section on

the Corporate Website
Comprehensive information and a dedicated investor relations Fatima ensures that the information under this section is updated
section is available on our corporate website i.e. www.fatima- on regular basis, by complying with the guidelines provided
group.com/fatimafertilizer for its investors to facilitate existing by SECP. Investors can also use the investor relations desk to
and prospective investor queries and concerns with regards to contact the Company for any grievance using the email; investor.
information related to financial results and highlights, financial relations@fatima-group.com
calendar, and share value. Moreover, the investor relations desk at
CATALYSING
GREEN 57
Corporate Governance cont’d
Annual Report Accessibility The Board assesses the effectiveness of its own collective working
and that of its individual members. Board evaluations are based
around directors rating the board as collective. This represents
Annual and quarterly reports are available on the corporate
a true picture as rating is done on a series of questions related
website at (http://fatima-group.com/ffcl/)
to their responsibilities and functions as a Board. As part of this
exercise, Capabilities and Constraints are identified and the next
Investor Grievance Policy part involves the Board members meeting and discussing the
findings of the data gathered and analysis to reach an agreement
Fatima’s core values stress on ethical business practices with on governance challenges facing the Board and the development
transparency and accountability, devoted investor service and of appropriate action plans designed to address the problems.
frugal productive policies since commencement. As one of The results are then compiled and analyzed, and the report is
the leading fertilizer company, we believe in establishing and delivered to the Chairman. The results also serve as a benchmark
preserving interests of our investors. Therefore, the Investors’ for Fatima for the next time a board evaluation is held. It helps
Grievance Policy has been drafted with the sole purpose to protect the Company to gauge whether improvements which were
the interests of the investors. suggested in the last report were taken forward and changes were
implemented or not.
Process:
1. All investor grievances received are handled by an Investor Role and Responsibilities
Relations Officer at the Corporate Head Office. An email ID
i.e. investor.relations@fatima-group.com has been created
of the Chairman and Chief
for this purpose and is also mentioned on the Company’s Executive
website.
The role of the Chairman and the Chief Executive are segregated
2. Investors can lodge their complaints by sending via soft
and they have distinct responsibilities.
copy on the said email ID and can also send their complaints
/ grievances via hard copy addressed to Corporate Head The Chairman of the Board has responsibilities and powers vested
Office. in him by law and the Articles of Association of the Company,
3. All investor grievances that are received are incorporated in as well as duties assigned to him by the Board. In particular, the
the Register of Grievance and are appropriately considered Chairman coordinates the activities of the Board and presides
and action is initiated immediately. over the meetings of the Board of Directors and shareholders. The
Chairman also controls all meetings procedures and processes,
4. The complainant is informed about the time that the
guiding discussion and decision making along with enhancing
compliance department will take to resolve within a span
relations with members and staff. The Chairman’s role and
of 5-7 working days from the date of receipt of grievance /
responsibilities are briefly described as under:
complaints, as the case may be.
5. The Investor Relation’s Officer ensures that all complaints / I. Leadership and control of Board of Directors;
grievances and recorded in the Register of Grievance and II. Ensuring that the Board as a whole plays an effective role
resolved within the stipulated time period and its record is in the determination of the Company strategy and overall
kept for future reference. business objectives;
Annual Evaluation of
III. Guardian of the Board’s decision making process;
IV. Promoting highest level of morale, integrity, excellence,
Board’s Performance corporate governance and ethics to assure investors that the
money invested by them is put to appropriate and profitable
Fatima constantly finds ways to make its directors become more use;
strategic, make better decisions and be seen to be undertaking
V. Approval of Company policies;
best practice governance. The primary purpose of this exercise
is for our board members to want to be even better at what they VI. Approves risk mitigation plan; and
do. Board performance is assessed by the Pakistan Institute of
VII. Leads and motivates CEO and Management Team.
Corporate Governance (PICG) annually. The annual evaluation
encompasses the following broad areas: The Chief Executive Officer (CEO) is responsible for all day to day
management decisions and ensures that effective internal controls
• Board Composition
and management information systems are in place. The CEO
• Board Committees
also communicates on behalf of the Company to shareholders,
• Board Procedures
employees, Government authorities, other stakeholders and the
• Board Interaction
public. The primary role and responsibilities of the CEO are given
• Strategic Planning
as under:
• Board and CEO Effectiveness
• Board Information I. Effective running of the Company affairs;
• Board and CEO Compensation

II. Development of Company’s strategy and business
objectives; Whistle Blowing Policy
III. Conducting the affairs of the Company with the highest Fatima encourages its associates to raise a matter at any
standards of integrity and Corporate Governance; appropriate time. To give guidance on how to raise concerns,
IV. Policy formulation; a “Whistle Blowing Policy and Procedure” is in place which is
primarily for concerns where, due to malpractice, fraud, abuse
V. Risk assessment and risk management; and or other inappropriate acts / omissions, the interest of Fatima
VI. Sound financial management or its associates is at risk. The objective of having this policy is
to ensure that employees highlight and share any suspicious or
Conflicts of Interests Relating

illegal act being carried out to harm the Company immediately or
in the long run so that damages caused to the Company, if any,
to Members of the Board are minimized. The scope of the Whistle Blowing Policy covers the
concerns for behavior / practice conflicting with the principles set
and How Such Conflicts are out in Fatima’s Code of Conduct.
Managed
Formal Orientation at the
Fatima’s Board of Directors is held to the highest level of conflict
of interest standards, as members have ultimate responsibility induction of New Directors
for all activities of the Company and have the highest public
visibility as representatives. Conflict of Interest Policy for its Board
and Director’s Training
of Directors provides general guidelines on avoiding conflicts of Program from Institutes
interest with the Company. The Board has adopted the following
policies and procedures with respect to any potential or actual approved from SECP
conflict of interest involving directors:
The Company is fully aware of the requirement of the Code of
Policy: A director owes certain fiduciary duties, including the Corporate Governance. Directors having the requisite experience
duties of loyalty, diligence, and confidentiality to Fatima, which and qualifications are exempt from the Directors’ Training
requires a director to act in good faith on behalf of Fatima and to Program. Furthermore, appropriate arrangements are made by
exercise the powers conferred upon his / her by its shareholder’s Fatima for detailed orientation of new Directors to familiarize them
interest and not for him / her own or others’ interest. with their duties and responsibilities. A formal acclimatization
program primarily includes amongst other things giving
Disclosure: A director shall promptly disclose to the Board any briefings relating to the Company’s visions and strategies, the
personal or outside interest, relationship or responsibility (financial, Company’s core competencies, organizational structure, role and
professional or otherwise) held by the director with respect to any responsibility of the director as per the Companies’ Act, including
potential or actual transaction, agreement or other matter which is the Code of Corporate Governance and any other regulatory laws
or may be presented to the Board for consideration, even if such applicable in Pakistan.
interest, relationship or responsibility has otherwise generally been
disclosed to Fatima or the Board.
Share Price Sensitivity
Board Action: For any potential conflict, the Board, with the
abstention of the interested director, may decide whether such
Analysis
director may participate in any reporting, discussion or vote on the Share price of the Company can be influenced by variable internal
issue that gave rise to the potential conflict. and external factors, some of which are discussed in the table
below:
Factor Change Impact on Share Price

Sales Volume Increase Would lead to economies of scales resulting in higher profitability leaving a positive
impact on the share price through higher EPS
Cost of Raw Material Increase Would negatively affect the profitability which in turn would have a negative impact of the
share price
Discount Rate Increase Finance cost of the Company would increase, impacting the shareholder value
negatively. Thus lower EPS would negatively affect share price.
Government Policies Increase in Would lead to consistent policies resulting in higher confidence of buyers and investors.
political stability Share price may move upwards in times of political stability.
CATALYSING
GREEN 59
NOTICE OF THE 20th ANNUAL
GENERAL MEETING
Notice is hereby given that the 20th Annual General Meeting of the shareholders of
FATIMA FERTILIZER COMPANY LIMITED will be held on Friday, April 28, 2023 at 11:00
a.m. at Avari Hotel 87-Shahrah-e-Quaid-e-Azam, Lahore as well as through electronic
means to transact the following business:
Ordinary Business
1. To confirm the minutes of the Extraordinary General Meetings held on December 27, 2022, and December 31, 2022.
2. To receive, consider and adopt the standalone and consolidated audited financial statements of the Company for the
year ended December 31, 2022, together with the Directors’ and Auditors’ Reports thereon and the Chairman’s review
report.
3. To consider and approve the final cash dividend for the year ended December 31, 2022, at PKR 3.50 per share i.e.,
35% as recommended by the Board of Directors.
4. To appoint Auditors for the year ending December 31, 2023, and to fix their remuneration. The Audit Committee and
the Board of Directors have recommended for reappointment of M/s Yousuf Adil Chartered Accountants as external
auditors.

Special Business
5. To consider and approve renewal of running finance Resolved further, that the Chief Executive Officer,
facility limit extended to associated company namely Chief Operating Officer, Chief Financial Officer, and/or
Reliance Commodities (Pvt) Limited for a further Company Secretary of the Company be and are each
period of one year and to pass the following Special hereby authorized singly to take all steps necessary
Resolution(s) with or without modification(s): in this regard, including but not limited to negotiating
and executing any necessary agreements/documents,
“Resolved, that the consent and approval be and is and any ancillary matters thereto.”
hereby accorded under Section 199 of the Companies
Act, 2017 and Companies (Investment in Associated 7. To ratify and approve the transactions carried out by
Companies or Associated Undertakings) Regulations, the Company with related parties for the year ended
2017 for renewal of Running Finance Facility limit December 31, 2022, and to pass the following Special
of up to an aggregate amount of PKR 5,000 million Resolution(s) with or without modification(s):
extended to Reliance Commodities (Pvt) Limited, an
associated company, for a further period of one year “Resolved, that related party transactions carried out
on terms as are noted in the statement of material by the Company with all the related parties during the
facts under Section 134(3) annexed herewith. The year ended December 31, 2022, and as disclosed in
limit in the nature of Running Finance Facility shall be Financial Statements for the year ended December
renewable in the next general meeting(s) for a further 31, 2022, be and are hereby ratified and approved.”
period(s) of one year.
8. To approve transactions with related parties and to
Resolved further, that the Chief Executive Officer, authorize the Board of Directors of the Company to
Chief Operating Officer, Chief Financial Officer, and/or carry out such related party transactions from time to
Company Secretary of the Company be and are each time which require approval of shareholders u/s 207
hereby authorized singly to take all steps necessary and/or 208 of the Companies Act, 2017 and to pass
in this regard, including but not limited to negotiating the following Special Resolution(s) with or without
and executing any necessary agreements/documents, modification(s):
and any ancillary matters thereto.”
“Resolved, that the Company may carry out
6. To consider and approve the renewal of running transactions including but not limited to sale and
finance facility limit extended to associated company purchase of stores and spares, shared expenses,
namely Pakarab Fertilizers Limited for a further toll manufacturing, sale and purchase of products/
period of one year and to pass the following Special mid products/raw material/assets and purchase
Resolution(s) with or without modification(s): of packaging material, payment against sales
collections, lease rentals and license fee, fee for
“Resolved, that the consent and approval be and is services, with related parties from time to time
hereby accorded under Section 199 of the Companies including but not limited to Pakarab Fertilizers Limited,
Act, 2017 and Companies (Investment in Associated Fatimafert Limited, Fatima Cement Limited, Fatima
Companies or Associated Undertakings) Regulations, Packaging Limited, and other such related parties
2017 for renewal of Running Finance Facility limit during the year ending December 31, 2023.
of up to an aggregate amount of PKR 5,000 million
extended to Pakarab Fertilizers Limited, an associated Resolved further, that details of transactions incurred
company, for a further period of one year on terms up to date of the next meeting of shareholders shall
as are noted in the statement of material facts under be presented in the next meeting of shareholders for
Section 134(3) annexed herewith. The limit in the ratification.
nature of Running Finance Facility shall be renewable
Resolved further, that within the parameters
in the next general meeting(s) for a further period(s) of
approved above by the shareholders of the Company,
one year.
the Board of Directors of the Company may approve
specifically related party transactions from time to time
CATALYSING
GREEN 61
in compliance with the Company’s policy pertaining “Resolved, that circulation/dissemination of Annual
to related party transactions and notwithstanding any Audited Financial Statements to the shareholders
interest of the directors of the Company in any related through QR enabled code and weblink as notified by
party transaction(s) which has been noted by the the Securities and Exchange Commission of Pakistan
shareholders and the transactions approved by the vide its S.R.O. 389 (I)/2023 dated March 21, 2023
Board shall be deemed to have been approved by the or any other transmission medium allowed by the
shareholders u/s 207 and/or 208 of the Companies regulators, be and is hereby approved.
Act, 2017.”
Resolved further, that Chief Executive Officer and/
9. To consider and approve the renewal of facility limit or Company Secretary be and are hereby singly
in the nature of Corporate Guarantee(s) extended to authorized to take and do all necessary actions,
Pakarab Fertilizers Limited for a further period of one deeds and things which are or may be necessary,
year and to pass the following Special Resolution(s) incidental and/or consequential to give effect to the
with or without modification(s): aforesaid resolution.”
“Resolved, that the consent and approval be and is

hereby accorded under Section 199 of the Companies
Other Business
Act, 2017 and Companies (Investment in Associated 11. To transact any other business with the permission of
Companies or Associated Undertakings) Regulations, the Chair.
2017 for renewal of Facility limit in the nature of
Corporate Guarantee(s) of up to an aggregate amount The statements under Section 134(3) of the
of PKR 7,000 million extended to Pakarab Fertilizers Companies Act, 2017 setting out the material facts are
Limited, an associated company, for a further period annexed herewith.
of one year, issued/to be issued by Fatima Fertilizer
Company Limited in favor of any bank / financial By order of the Board
institution/company, etc. in connection with financing
or other facilities availed / to be availed by Pakarab
Fertilizers Limited. The limit in the nature of the
Corporate Guarantee(s) Facility shall be renewable in
the next general meeting(s) for a further period(s) of
one year.
Lahore Anil Zia
Resolved further, that the Chief Executive Officer,
April 07, 2023 Deputy Company Secretary
Chief Operating Officer, Chief Financial Officer, and/or
Company Secretary of the Company be and are each
hereby authorized singly to take all steps necessary
in this regard, including but not limited to negotiating
and executing any necessary agreements/documents,
and any ancillary matters thereto.”
10. To consider and approve circulation/dissemination

of Annual Audited Financial Statements through QR
enabled code and weblink and to pass the following
Special Resolution(s) with or without modification(s):

Notes: c) Shareholders will be encouraged to participate in the
AGM to consolidate their attendance and participation
1. The Share Transfer Books of the Company will remain through proxies.
closed from April 20, 2023, to April 28, 2023 (both
5. Withholding Tax on Dividends
days inclusive). Transfers received in order at the
office of our Share Registrar/Transfer Agent CDC Prevailing rates prescribed for deduction of
Share Registrar Services Limited by the close of withholding tax on the amount of dividend paid by the
business on April 19, 2023, will be treated in time for Company is as under:
the aforesaid purpose.
(a) For persons appearing on active taxpayer’s list: 15%
2. A member entitled to attend and vote may appoint
another member as his/her proxy to attend and vote (b) For persons not appearing on active taxpayer’s list:
instead of him/her. 30%
3. An individual beneficial owner of shares from CDC To enable the Company to make tax deduction on the
must bring his/her original CNIC or Passport, Account, amount of cash dividend @ 15% instead of 30%, all
and Participant’s I.D. numbers to prove his/her identity. the shareholders whose names do not appear on the
A representative of corporate members from CDC, Active Tax payers List (ATL) provided on the website of
must bring the Board of Directors’ Resolution and/or FBR, despite the fact that they are filers, are advised
Power of Attorney and the specimen signature of the to make sure that their names are entered into ATL by
nominee. April 19, 2023 otherwise tax on their cash dividend will
be deducted @ 30% instead of 15%.
4. Online participation in the Annual General
Meeting Withholding tax exemption from the dividend income,
shall only be allowed if a copy of the valid tax
a) For online participation in the Annual General Meeting, exemption certificate is made available to Company’s
the shareholders are requested to get themselves Share Registrar by Close of Business day as on April
registered with the Company’s Share Registrar latest 19, 2023.
by April 26, 2023 till 05:00 p.m. on cdcsr@cdcsrsl.
com by providing the following details: The shareholders who have joint shareholdings held
by Filers and Non Filers shall be dealt with separately
Full Name of **
CNIC Folio / CDC ** and in such particular situation, each account holder
Shareholder / Company Mobile Phone
Number A/c No. Email ID
Proxy Holder No. is to be treated as either a Filer or a Non Filer and
Fatima tax will be deducted according to his shareholding.
Fertilizer
Company If the share is not ascertainable then each account
Limited holder will be assumed to hold an equal proportion of
shares and the deduction will be made accordingly.
**Shareholders/proxyholders are requested to provide Therefore, in order to avoid deduction of tax at a
active email addresses and mobile phone number. higher rate, the joint account holders are requested to
provide the below details of their shareholding to the
Login facility will be opened thirty minutes before the Share Registrar of the Company latest by the AGM
meeting time to enable the participants to join the date.
meeting after the identification process. Shareholders
will be able to login and participate in the AGM Folio/CDC Name of
CNIC Shareholding Total Shares
Principal/Joint
Account No. Shareholder Shareholder
proceedings through their devices after completing
all the formalities required for the identification and
verification of the shareholders.
For any further assistance, the members may contact
b) Shareholders may send their comments and the Share Registrar at the following phone numbers,
suggestions relating to the agenda items of the AGM email addresses:
to the Company’s share registrar latest by April 26,
2023 till 05:00 p.m , at above given email address CDC Share Registrar Services Limited, CDC House
or WhatsApp,# 0321-820-0864. Shareholders are 99-B, Block ‘B’ S.M.C.H.S, Main Shahra-e-Faisal
required to mention their full name, CNIC No and Folio Karachi-74400. Telephone: 0800-23275, Email: info@
No. for this purpose. cdcsrsl.com
CATALYSING
GREEN 63
The corporate shareholders having CDC accounts b) The web address, login details, and password,
are required to have their National Tax Numbers will be communicated to members via email. The
(NTNs) updated with their respective participants, security codes will be communicated to members
whereas corporate physical shareholders should send through SMS from the web portal of CDC Share
a copy of their NTN certificate to the Company or its Registrar Services Limited (being the e-voting
Share Registrar i.e. CDC Share Registrar Services service provider).
Limited. The shareholders while sending NTN or
NTN certificates, as the case may be, must quote the c) Identity of the Members intending to cast vote
Company name and their respective folio numbers. through e Voting shall be authenticated through
electronic signature or authentication for login.
6. Payment of Cash Dividend through Electronic
Mode d) Members shall cast vote online at any time
from April 21, 2023, 9:00 a.m. to April 27, 2023.
Under the provisions of Section 242 of the Companies
Voting shall close on April 27, 2023, at 5:00 p.m.
Act, 2017, it is mandatory for a listed Company to
Once the vote on the resolution is cast by a
pay a cash dividend to its shareholders only through
Member, he/she shall not be allowed to change it
electronic mode directly into the bank account
subsequently.
designated by the entitled shareholders. In order to
receive dividends directly into their bank account, Procedure for voting through postal ballot paper
shareholders are requested to provide their IBAN by
i) The members shall ensure that duly filled
filling the Electronic Credit Mandate Form provided in
and signed ballot paper along with copy of
the Annual Report and also available on Company’s
Computerized National Identity Card (CNIC)
website and send it duly signed along with a copy of
should reach the Chairman of the meeting
CNIC to the Registrar of the Company CDC Share
through post on the Company’s address at E
Registrar Services Limited, CDC House 99-B, Block
110 Khayaban e Jinnah Lahore Cantt. or email
‘B’ S.M.C.H.S, Main Shahra-e-Faisal Karachi-74400
corporate.affairs@fatima-group.com one day
in case of physical shares. In case shares are held
before the day of poll, during working hours. The
in CDC then Electronic Credit Mandate Form must
signature on the ballot paper shall match with the
be submitted directly to the shareholder’s broker/
signature on CNIC.
participant/CDC account services.
In accordance with the Regulation 11 of
7. E-Voting / Postal ballot the Regulations, the Board of the Company
Members can exercise their right to poll/postal ballot has appointed M/s Yousuf Adil Chartered
subject to meeting the requirement of Section 143-145 Accountants, (a QCR rated audit firm and external
of the Companies Act, 2017 and applicable clauses auditors of the Company) to act as the Scrutinizer
of Companies (Postal Ballot) Regulations, 2018. For of the Company for the special business to be
convenience of the members, Ballot Paper is annexed transacted in the meeting and to undertake other
to this notice and the same is also available on the responsibilities as defined in Regulation 11A of
Company’s website https://fatima-group.com/ffcl/ the Regulations.
page.php/forms-ffcl to download.
8. Dissemination of Annual Audited Accounts and
Procedure for e-Voting Notice of Annual General Meeting
a) Details of the e-voting facility will be shared The Company shall place the financial statements
through an e-mail with those members of the and reports on the Company’s website: http://fatima-
Company who have their valid CNIC numbers, group.com/ffcl/page.php/financial-results-ffcl at least
cell numbers, and e-mail addresses available in twenty-one (21) days prior to the date of the Annual
the register of members of the Company by the General Meeting.
close of business on April 19, 2023.
Further, this is to inform that in accordance with S.R.O.
389 (I)/2023 dated March 21 2023, the Company
shall circulate the annual audited financial statements

through email in case email address has been 12. Submission of Copy of CNIC
provided by the member to the Company, and will
1. Individual members having physical shareholding
also dispatch the Annual Report of the Company
and who have not yet submitted photocopy of
for the year ended December 31, 2022 to the other
their valid CNIC are requested to send notarized
shareholders through CD whose email address is
copy of their valid CNIC immediately to our Share
not available. However, if a shareholder requests for
Registrar, CDC Share Registrar Services Limited.
a hard copy of Annual Accounts on the standard
request form available on the website of the Company, 2. In case shares are held in CDC then the request
the same shall be provided free of cost within seven to update CNIC must be submitted directly
days of receipt of such request. to broker/participant/CDC Investor Account
Services.
9. Conversion of physical shares into the Book-
Entry Form 13. Proxy
As per Section 72 of the Companies Act, 2017 every 1. The instrument appointing a proxy and the power of
existing listed company shall be required to replace attorney or other authority under which it is signed or a
its physical shares with book entry form in a manner attested copy of power of attorney must be deposited
as may be specified and from the date notified by the at the Registered Office of the Company situated at
Commission, within a period not exceeding four years E 110 Khayaban e Jinnah Lahore Cantt. at least 48
from the commencement of the Act, i.e., May 30, hours before the time of the meeting.
2017.
2. For appointing proxies, the shareholders will further
The Shareholders having physical shareholding are have to follow the under mentioned guidelines:
encouraged to open CDC sub account with any of the
brokers or Investor Account directly with CDC to place a. In case of individuals having physical shareholding or
their physical shares into scrip less form. the account holder or sub account holder and/or the
person whose securities are in group account and
10. Unclaimed dividend / shares their registration details are uploaded as per the CDC
Shareholders who have not collected their dividend Regulations, shall submit the proxy form accordingly.
/ physical shares are advised to contact our shares
b. The proxy form shall be witnessed by two persons
registrar to collect / enquire about their unclaimed
whose names, addresses and CNIC number shall be
dividend or shares, if any.
mentioned on the form.
11. Change of Address
c. Notarized copies of CNIC or the passport of the
1. Members having physical shareholding beneficial owners and the proxy shall be furnished with
are requested to notify changes in address the proxy form.
immediately, if any, in their registered addresses
to our Share Registrar, CDC Share Registrar d. In case of a corporate entity, the Board of Directors’
Services Limited, CDC House 99-B, Block ‘B’ resolution/power of attorney with specimen signature
S.M.C.H.S, Main Shahra-e-Faisal Karachi-74400. shall be submitted (unless it has been provided
earlier) along with proxy form to the Company.
2. In case shares are held in CDC then the
request notifying the change in address must
be submitted directly to broker/participant/CDC
Investor Account Services.
CATALYSING
GREEN 65
INFORMATION
TECHNOLOGY
IT division has thrived with new ideas and accelerated business IT team delivered numerous digitization initiatives which yielded
growth with several high-profile digital initiatives completed this major benefits including but not limited to:
year. With this leap, IT division was able to:
• Online order processing of PKR 76 billion through mobile
• Rely on internal capabilities and deliver significant savings application.
through in-house implementation of multiple advanced digital
• Warehouse handling bills through automatic calculation and
solutions.
generation, invoice booking and payment scheduling.
• Save 25,000 man-hours by bringing efficiencies.
• Automated employee compensation management and
• Exceeded uptime commitments for IT services, and sensitivity analysis.
• Executed two successful live DR drills for critical IT services. • End to end recruitment process digitization spanning
country-wide universities.
Successful delivery of projects requires robust project
• Notable decrease in risk of missing important observations
management capabilities. IT has embedded agile ways for
and providing ability to track and follow-up on critical plant
delivery of projects along with its proven project management
assets.
methodology through its centralized enterprise project
management solution. This has delivered exceptional results by
2022 continued to be a year of excellence for Fatima Fertilizer’s
responding to changes and enhancing customer collaboration.
IT division, one in which the team not only exceeded its
commitments but also excelled in new areas to grow and
While implementing its security road map, IT division partnered
strengthen the Company. We look forward to building upon these
with international security consultants and strengthened its
areas of interest and bringing about shining results in the coming
security posture by conducting external and internal assessments
year as well.
of its environment and applications. Continual recertification in
ISO27001 by a global independent governance body with one of
the largest scopes in fertilizer sector is a testimony to unfaltering
management commitment towards cybersecurity.
IT further strengthened and secured the environment by launching

other critical security initiatives including deep security solutions.
These solutions protect new and existing workloads against
unknown threats by using techniques like machine learning and
combining full range of security capabilities into an integrated
smart agent.
Several organization-wide training programs were delivered,

investing 7000 man-hours to upscale the functional, technical,
security awareness and leadership capabilities of employees.
The entire IT team also achieved certification in the internationally
recognized standard of ITIL (IT Infrastructure Library), which will
help further in the implementation of ITIL framework across the
group.
ServiceNow is a global leader in IT Service Management. It has

helped the IT division to automate tasks and streamline customer
experience by connecting departments, work flows, and systems
to resolve roadblocks, and pro actively resolve issues before they
reach customers.

OPERATIONAL
PERFORMANCE
The cumulative fertilizer production of the manufacturing division 2022 Site Wise Production ‘000’
was recorded at 2.831 Million MT which is 5.6% higher than the
last year and ever highest in the history of Fatima. The pursuit
to enhance plant assets’ reliability, team professional focus,
resilience, and perseverance were key drivers behind this
unprecedented achievement. 857
Sadiqabad Plant: Team’s focus on plant assets’ reliability has SDQ
enabled Ammonia Plant to achieve an ever highest on-stream 1,489 MUL

SHK
factor of 98.8% which is higher than the world-class benchmark of
98% and is also higher than the average of top 25% International
Plants which is 97.3%. The Plant faced various operational and 483
maintenance hiccups throughout the year, however, they were
managed safely with minimum plant downtime. The Ammonia
Plant’s production performance also followed its reliability
performance, achieving the best-ever annual production of 2021 Site Wise Production ‘000’
604,995 MT. Solely by uninterrupted plant operation being a
direct outcome of high on-stream factor, Ammonia Plant’s Energy
Consumption also remained ever best at 7.94 GCal/MT (annual
average of smooth period energy index).
759
Following the Ammonia Plant, Nitric Acid Plant also set the SDQ
performance benchmark even higher by breaking the previous 1,378 MUL
ever-highest annual production record and setting a new record of SHK
563,701 MT.
286
Besides outstanding performance by Intermediate Products
Plants (i.e., Ammonia & Nitric Acid), among the Producing Plants
(i.e. Urea, CAN & NP), the most outstanding performance was
Learning and Development

witnessed by CAN Plant, which surpassed its annual budget
production by 36,367 MT, the sole contributor of total annual
production target surplus of 35,776 MT from Budgeted Target
(1,490,861 MT Actual vs 1,455,085 MT Budget), Alhamdulillah. All the manufacturing sites continued to focus on the several
learning and development activities of which key highlights are as
Multan Plant: The Year 2022 was an unprecedented year. The follows:
uninterrupted Natural Gas supply and reliable plant operation Sadiqabad plant built further on the digital training feedback
led to the ever-highest annual fertilizer production of 857,750 MT & analysis platform, initiated implementation of ISO-29993
which is 12.8% higher than last year. A 4% increase in Nitric Acid framework across all manufacturing sites and started ISO-
Plant’s production capacity due to in-house optimizations led to 17024 accreditation preparations, synergized training calendars
additional NP and CAN productions. Urea Plant also remained of manufacturing sites, hosted common trainings for group
in consistent full-year operation. Mari Gas Compression Facility companies, neighbouring industries, and organized several
remained in smooth operation augmented by exemplary gas university academia visits.
management ensured uninterrupted delivery of gas molecules to
the plant. Multan plant launched digital training feedback on Process Safety
Management application. Apart from providing internships and
The planning for the biggest turnaround was challenging amidst educational visits, several external trainings were held on Project
global logistics and the country’s financial situation but done Management Professional (PMP), Functional Safety, Hazard and
meticulously. 100% Material delivery and 40 Foreign VSMs Operability Analysis (HAZOP) & and Layers of Protection Analysis
confirmation assured. (LOPA).
Sheikhupura plant started its journey towards ISO-29993 external
Sheikhupura Plant: Uninterrupted Natural Gas supply and certification. GTE’s Annual Graduation event was held, and Staff
reliable plant operation enabled the plant to produce record Learning Need Analysis (LNAs) and potential assessment program
fertilizer production of 482,851 MT Urea, 32 kMT higher than the were launched. Revived an old Distributed Control System (DCS)
budgeted target, and 69% higher than 2021. server for hands-on training in the model lab.
Manufacturing Total HSE Technical Soft

Site Skills
Hours
Sadiqabad 45,996 9,079 33,957 2,960
Multan 25,208 2,210 19,680 3,318
Sheikhupura 12,556 1,967 5,452 5,137
CATALYSING
GREEN 67
MARKETING AND SALES
2022 started with Fatima Fertilizer going global by actively This year Sarsabz launched another incentive scheme ‘NP
participating and showcasing Pakistan’s agricultural economy ko Laga Aur Jettata Ja’ on Sarsabz Nitrophos to facilitate
at the Dubai Expo. We participated in Climate Week, farmers to purchase authentic product from our registered
celebrated Pakistan’s Farmers Day but the highlight remained channel network while winning prizes on it as well. NP FIS
a panel discussion of Pakistan’s Female Farmers hosted by program used the methods of SMS and Sarsabz App to gain
Sarsabz at the Pakistan Pavilion Dubai Expo. Our aim was to farmer entries. Campaign was pushed on digital and regional
celebrate our three exceptionally inspiring female farmers from channels creating a lot of excitement in farmers’ community.
Pakistan and their inspirational stories with the world on Rabia
Sultan, Azra Mehmood Sheikh and Naz Dharejo. Their real Sarsabz Kahani is another initiative of Fatima Fertilizer that
life stories painted a new courageous and resilient image of seeks to bring true stories from Pakistan’s rural community to
Pakistani rural women. The event showcased our agronomy, the world in a series of short films. After the successful launch
culture and paid a glowing tribute to farmers of the world over. of 1st episode Nazo in 2021, 2nd episode was launched in 2022
It was attended by visitors and media from around the globe, ‘Khaki Desan’ – a story of entrepreneurship and love for our
all effectively realizing the role of farmers in today’s globalized culture and heritage. Khaki desan showcases the journey of a
food chain and the role Pakistan as a country is playing in female farmer Jugnu Mohsin and her struggles to bring back
becoming the food basket of the world. the lost gem of our cotton crop – Khaki Desan back to life.
The story has resonated with not just rural community but also
For the sixth year running, Fatima Fertilizer continued with urban folks who are realizing how empowered, courageous
its support to the premier Pakistan Super League (PSL) and determined women are in the rural sector of Pakistan.
competition through its sponsorship of the Multan Sultans
franchise which ended up as the runner up of the 2022 edition. On the product development end, we continued to focus on
Marketing activities were carried out across Pakistan. Content our brand promise of giving more than 10% yields against
pieces and Digital Videos were also developed for audience conventional fertilizers. We brought to mass media farmer
engagement. testimonials from regional level and executed focused
campaigns in areas with high potential. By creating such
Throughout the year, Sarsabz Fertilizers made its presence felt influential reference groups within the farmer community
on important days such as Mothers’ Day, Pakistan Day, World we have effectively managed to grow our relationship and
Water Day, World Health Day, World Food Day, Fathers’ Day, eventually sales. By continuing the partnership between
International Day of Forests through digital content and social brands and our on-ground technical advisory team, we
media posts. Keeping up with our tradition of celebrating 14th managed to execute over 20 technical seminars in partnership
August with great zeal, Sarsabz launched a new campaign with Federal and Provincial governments. These events serve
‘Umeed’ on the specific day to associate Sarsabz relationship as a platform to not only disseminate useful crop production
with the soil and Pakistan, the campaign was very well technology but also recognize the achievements of our
received across all our digital mediums. hardworking farmers who are achieving record yields in their
districts, regions and provinces.

This year we also continued reaping rewards of our hallmark at No.1 in Pakistan in parallel creating strong footprint on TV,
loyalty program for our dealers, Sarsabz Royals! A total of 10 Radio, Print & other mediums. We are proud to have effectively
events were held at regional level ensuring participation of created a platform for farmers to not only be recognized but
1500+ dealers. We as a company are committed to pursuing also be at the forefront in influencing policy making and setting
excellence when it comes to servicing our dealers and winning a long term vision for Agriculture in Pakistan.
their trust and loyalty. Sarsabz Royals to-date stands as
the most innovative and unparalleled loyalty program in the Sarsabz Fertilizers marked this year with another big initiative
industry. of launching a female farmers’ loyalty program ‘Sarsabz
Tabeer’! This program aims at empowering, enabling and
The second half of the year started off with unprecedented representing them at different platforms. The program started
floods and rainfall in the country’s history. More than 50 with providing comprehensive trainings to rural women on
days of destructive rains and floods wreaked havoc across farm processing technologies in collaboration with a USAID
the country which in total caused losses of PKR 3.3 trillion. certified trainer.
The entire agriculture value chain was substantially affected,
especially the fertilizer sector. In combination with an already Despite the volatility in second half of year, the Marketing
uncertain political and economic situation, agriculture based Division did not compromise on its objectives or values. It
businesses across the country suffered immensely. Sarsabz made sure that the year ended with a record highest sale
always being at the forefront of aiding farmers did not let go and overachievement of targets. The team also made sure
of this opportunity and stepped forward to help our brothers that despite the pressure on the dealer network, the business
and sisters by providing them flood relief in the areas of Swat, relationship did not suffer and continued to flourish. It has
South Sindh and Gilgit Baltistan benefitting more than 500 resulted in mutual respect and trust which augurs well for the
families. future. The year ended at a high note of bagging PDA Award
for Salam Kissan - Best Social Media Campaign on Snack
Continuing on our legacy of paying tribute to our farmers, Video and Asian Experience Award (Singapore) for Sarsabz
Fatima Fertilizer celebrated 4th Kissan Day in 2022 in the Kahani.
agricultural heartland of Pakistan – Multan with a large
gathering of farmers along with Government officials. The We as a team are committed to positioning Sarsabz as the
event was covered in state, national as well as regional media. most premium fertilizer brand in the market and helping Fatima
On social media, the hashtag #Sarsabz Pakistan was trending Fertilizer lead the pursuit for a ‘Sarsabz Pakistan.
SUSTAINABILITY
OVERVIEW
“We continue to work beyond Corporate Social Responsibility and strive for a higher
level of sustainability for creating value for the shareholders and the communities we
work and live with. We endeavour to bring continuous excellence in our operations,
energy efficiency, reducing environmental footprint and bringing more safety and
better occupational health standards at work.”
Sustainability Strategy
Fatima’s sustainability strategy incorporates the key d) Supporting communities for socio economic and
principles of responsible business initiatives, which focus environmental development, with particular focus on
on the following parameters: health and education, and by supporting projects
through in house resources and volunteer staff;
a) Ensuring Health, Safety and Environmental protection e) By supporting other institutions and NGO’s working
for social sector;
at its productions facilities, for its employees and for
the communities it works and live with; f) By raising awareness on social and environmental
causes within and outside the Company; and
b) Ensuring employee safety and welfare at all levels;
g) Top level involvement of the Board of Directors and
c) Conserve energy, water and reduce carbon emissions;
Key Management in philanthropic initiatives.
Key Sustainability Indicators (GRI 3.1 Specific)

Key performance 2022 2022 2022 2022
GRI Consolidated
Sadiqabad Multan Sheikhupura 2021
indicator Plant Plant Plant
Economic
Total Fertilizer Sales EC1 2,735 (MT in 000) - - - 2,677 (MT in 000)
Net Profit EC1 14,124 (Rs in million) - - - 18,474 (Rs in million)
Revenue EC1 152,231 (Rs in million) - - - 112,488 (Rs in million)
Contribution to national
18,138 (Rs in million) - - - 12,200 (Rs in million)
exchequer
Rural development and responsible sourcing

Farms addressed for capacity
29,043 - - - 25,496
building (numbers)
Water
Total water withdrawal (m³) EN8 23,433,943 8,966,933 8,580,960 5,886,050 18,992,280
Environmental sustainability
Materials
Raw Material used (Natural
EN1 1,612,799 851,944 451,777 309,078 1,349,476
gas, Metric Tons)
Materials for packaging
EN1 8,286 4,302 2,578 1,406 7,124
purposes (Metric Tons)

Key performance 2022 2022 2022 2022
GRI Consolidated
Sadiqabad Multan Sheikhupura 2021
indicator Plant Plant Plant
Energy
Total direct energy
EN3 60,267,072 26,524,728 17,970,770 15,771,574 49,027,481
consumption (gigajoules)
Total direct energy

consumption from renewable EN3 N/A N/A N/A N/A N/A
sources (% total direct)
Energy saved due to

conservation and efficiency EN5 - - - - -
improvement
Biodiversity
Total size of manufacturing
sites located in projected EN11 1,548 1,112 302 134 1,524
areas (Acres)
Trees Planted 25,799 17,799 500 7,500 26,800
Emissions, Effluents and Waste

Direct GHG emissions (Metric
Tons CO2 eq), (i.e. Surplus 884,752 401,492 483,260 0 714,961
CO2 from Ammonia Plant + EN16 + + + + +
CO2 emissions from other 1,245,205 749,474 212,766 282,965 1,250,572
sources)
Indirect GHG emissions

EN16 N/A N/A N/A N/A N/A
(million tons CO2eq)
Environmental Sustainability Governance

Human rights and compliance
Total number of significant
products recalls or incidents PR2 Nil Nil Nil Nil Nil
of non-Compliance
Our People
Total Workforce - Permanent
LA1 2,545 - - - 2,326
(number of employees)
Lost time injuries and illnesses

rate (per million hours
LA7 Nil Nil Nil Nil Nil
worked) (employees, on site
contractors and on site
Total number of fatalities

(employees, on site
LA7 Nil Nil Nil Nil Nil
contractors and on site
members of public)
Man Hours of training per year

LA10 112,647 45,996 12,556 25,208 113,314
(All functions)
Female staff at the head office LA13 62 - - - 56
CATALYSING
GREEN 71
HEALTH, SAFETY AND
ENVIRONMENT STANDARDS,
SYSTEMS AND POLICIES
Health, Safety and
Environment
Fatima is committed to the highest standards of corporate
governance. Our Plants not only comply with the requirements Sadiqabad Plant
of applicable Regulations but also aim towards implementing • 1st Runner in IFA Green Leaf Award
globally recognized standards while benchmarking with industrial
• British Safety Council International Safety Awards
best practices. We take pride in mentioning that our fertilizer Plants
achieved the following certifications and awards in 2022: • RoSPA Gold Category Award
• AEEA Award for Environment Excellence by NFEH
Certifications and awards won by the • International Summit Awards for Environment Management
three fertilizer sites and Health, Safety and Environment Performance.
• International Fertilizer Association (IFA) Protect and Sustain • AWS International Water Stewardship Certification (Globally
Stewardship applicable framework for sustainable water management).
• Quality Management System (QMS) ISO 9001:2015
• Environment Management System (EMS) ISO 14001:2015
Multan Plant
• British Safety Council International Safety Awards
• Occupational Health and Safety Management Systems
(OHSAS) ISO 45001:2018 • “Perfect Record Award & Safety Leadership Award” from
National Safety Council
• WWF Green Office Program
• Excellence Award in “Fire & Safety” from National Forum for
Environment & Health (NFEH).

CATALYSING
GREEN 73
Sheikhupura Plant • Conform to the requirements of all legislation, regulations,
and codes of practice pertaining to quality, health, safety, and
• RoSPA Gold Category Award environment.
• AEEA Award for Environment Excellence by NFEH • Implement environmental protection measures that address
• International Summit Awards for Environment Management pollution prevention in all aspects of our business.
and Health, Safety and Environment Performance. • Prevent injuries, occupational illnesses, safety incidents, and
• Excellence Award in “Fire & Safety” from National Forum for environmental excursions.
Environment & Health (NFEH). • Encourage off the job safety awareness among employees
• 12 individual and organization level awards on HSE and their families.
performance by Pakistan Engineering Council • Ensuring that quality, health, safety, and environment is a
• Health, Safety & Environment Performance Award by TPN major responsibility of appropriately trained, empowered,
and accountable employees and management.
Process Safety Excellence • Encourage and promote a culture where the best quality,
health, safety, and environmental practices and lessons
Fatima is highly focused on implementing Process Safety learned from internal and external incidents are transparently
Management standards based on OSHA complaint Dupont shared with the stakeholders.
System. PSM model is further improved by implementing Risk
Based Approach as per the latest guidelines. The following • Reaffirm its corporate sustainability commitments towards
activities have been performed to improve PSM effectiveness. business excellence and be a responsible global corporate
organization throughout its lifecycle.
• Launch of Risk based Process Safety Management System • Maintain a high standard of quality, health, safety, and
based on Dupont Guidelines. environment in all aspects of its business conduct and
• Launch & Implementation of Risk based KPIs under the continuously improve its performance.
Risk based Process Safety model from CCPS (Center for • Recognize and reward outstanding quality, health, safety, and
Chemical Process Safety) at Sheikhupura Plant. environmental performance
• QRA (Quantitative Risk Assessment) of Ammonia Storage
•
Tank facilities conducted by 3rd party.
DuPont Safety Solutions (DSS) engagement of Process
Global Benchmarking on
Hazard Analysis (PHA). Systems and Standards
• PHA Capability enhancement workshop by Dupont for the
Fatima benchmarks with global industry standards and best
multidisciplinary team from all fertilizer Plants.
practices to achieve the highest levels of excellence in its
• 2nd Party PSM assessments by Corporate HSE. businesses. Fatima has set sight not only to implement Global
standards and guidelines but also to transcend toward being a
true leader in HSE. All three Fertilizer Manufacturing sites have
Policy on Quality, Health, benchmarked their Process Safety Management program with
Safety, and Environment OSHA PSM, fire prevention and control program with National
Fire Protection Association (NFPA), and various other relevant
(QHSE) international standards.
In 2022, Plant sites focused on strengthening the HSE culture,

Fatima considers the Health, Safety, and Environment of its
which is directly evident from decreasing trend of process safety
employees, stakeholders, contractors, and the community equal
incidents and the increasing trend of Safe Million Man hours.
to its production targets. The long term business success of
the organization depends on the ability to continually improve
the quality of the products while protecting people and the
environment. Fatima emphasizes ensuring quality enhancement,
Fatima’s Contribution to the
occupational health, operational and process safety, International Process Safety
Forums
environmental protection, and community well being.
Fatima is committed to Fatima showcased Safety, Plant operations, Reliability, and

• Conduct its business in a manner that protects the health Technological advancements at various international conferences
and safety of employees, contractors, and others involved and forums.
in our operations and the community in which we live and
operate.

Site Event 2022 Paper Presented
Corporate HSE 66th Annual Safety in Ammonia Plants 1. Comparative Analysis of HAZOP
and Related Facilities Symposium, and STPA – Catacarb CO2 Removal
USA System
Corporate Technical Services & Nitrogen + Syngas Conference, 1. Ammonia Plant Reliability Assurance
Sheikhupura Plant Germany by Improving Process Safety and
Engineering Controls
Sadiqabad Plant 18th Global Conference on Process 1. Cultural Transformation –
Safety (GCPS) Enculturation to Acculturation
2. Implementation of latest digital
technology to improve Process
Safety & Operational Excellence via
Effective Engineering Control
Sadiqabad Plant ANNA 2022, USA 1. A Guinness World Record Holder in
Safety & Sustainability
2. NP Prill Tower Debottlenecking via In
House Developments
Sadiqabad Plant 4th CCPS Middle East Conference 1. Effective Emergency Response
2. A Committed and Resilient Culture
Multan Plant 66th Annual Safety in Ammonia Plants 1. “Revival and Sustained Operation of
and Related Facilities Symposium, 50 years Old Ammonia Plant”
USA
Innovative Safety and Training Programs • The Comprehensive Environmental Footprint Report for
Year 2021 was developed.
Fertilizer Plants focused on effective training programs to
sustain process and operational safety standards: • An Aquifer study for monitoring groundwater quality was
carried out at Sheikhupura Plant.
• PHA Capability Enhancement
• Successful 3rd Party Audit of Environment Management
• LOPA & HAZOP Capability Enhancement training. System by EMC Pakistan at Sadiqabad Plant.
• Functional Safety
• RCA and Incident Investigation Other HSE Initiatives
• Risk Based Process Safety Approach • Emergency Response Team restructuring.
• CPR(Cardiopulmonary Resuscitation) • Health Bulletins to communicate Health and Safety

measures to all employees.
• Practical training for Pool Fires
• Multiple HSE days celebrated to raise awareness of
• First aid & CPR training by Red Crescent Society. Health and Safety related matters among employees.
• Stakeholders like neighboring communities and
Environmental Excellence industries, Mutual Aid Programs, and Community
• Fertilizer Plants has also continued its journey toward Awareness on Emergency Response (CAER) devised.
the world’s leading Environmental Management systems
through the implementation of DuPont EMS followed by
a detailed EMS 2nd party gap assessment by Corporate
HSE.
CATALYSING
GREEN 75
TALENT SUSTAINABILITY
The Human Resources function of Fatima Fertilizer played Value-Based Culture

a pivotal role as a strategic partner and key enabler to
the business in delivering and driving the organization’s Our values are our foremost priority and a reflection of our
strategic agenda and providing avenues of growth to commitment to continuous business improvement and
employees through training and development. Over strategic vision. We truly believe that Fatima values are
28,000+ hours were invested in leadership development, the leading principles of our organization and reflect our
with a blend of face to face and e-learning programs brand and culture. We remain deeply committed to the
in collaboration with internationally renowned learning implementation of a governance mechanism that ensures
partners. These programs included Blue Ocean Strategy, “Zero” tolerance for corporate values violations. More than
Harvard Mentor Manager, and Stanford Coaching & 1000 value round tables were conducted to ensure values
Mentoring. In addition to external learning partners, FG sustainment.
ASCEND is an in house mentorship program designed
to enable employees to seek career guidance from
organizational leaders and progress in their careers.

Building Succession Pipeline program ensures employee experience diversification as
well as readiness for critical experiences. These initiatives
Consistent 6th year of our University Graduate program, are built on a scientific process of Development Need
Empower to lead, continues to focus on hiring on Analysis; DNA and are implemented on the Fatima career
boarding and development of high potential Business and growth philosophy.
Engineering graduates from leading local and international
universities. Our Future Leaders Development Program
Lead From the Front, LFF has developed 3 batches LFFI, II
FG Business Academy
& III for targeted moves against critical positions. Building FG Business Academy is powered by the expertise
Future Leaders, BFL our Signature Leadership Program is and knowledge of our in house senior talent and is
our most recent intervention to strengthen our succession driven by the agenda of enhancing the core business
pipeline. capabilities of the mid muscle. Business Academy is a 5
day comprehensive program focused on understanding
Ensuring Robust Career Fatima end to end value chain. So far, more than 150
management employees have attended the academy.
Progression and Sustained
Leadership Bench FG Wellness 360
Our people strategy is an embodiment of people A healthy workforce is a productive workforce. Considering
enablement and ensures robust career progression. The our employee well being first, Fatima has launched
year 2022 marked the implementation of our well rounded Wellness 360 program, covering 4 key aspects: mental,
career progression framework that ensures employee social, physical and professional wellness. Several
performance and potential based career progression. initiatives have been introduced under the ambit of
wellness including the facility of an in house therapist,
Continuing on from last year and further building on the nutritionist and yoga instructor.
leadership bench, in depth Talent Review Meetings were
conducted across Fatima for more than 750 employees
followed by the development of individual career plans.
Organization Health
Structured Leadership development interventions Survey (OHS) 2022
also included the Management Development and
Transformation program, Lead from the Front, Stanford Our 2022 OHS, conducted by Mercer Sirota, shows our
Coaching, Stanford Power of Stories to fuel innovation, Employee Engagement Index (EEI) at 88% which is a 14%
business simulation on building high performance teams increase from our previous OHS EEI 2019 of 74%. As a
and Harvard ManageMentor. result, the organization moved from a favourable to a very
favourable employee index ranking.
Employee Capability
Development Manager Quality
Performance Index (MQPI)
In line with our commitment to developing future capability,
we continue to invest in our talent development and As our teams grow and with a diversified workforce, we
through structured learning interventions at various levels; keep our focus consistent on improving the quality of our
Individuals, Managers and Leaders. A Robust rotation managers. Building on this, an independent survey has
been institutionalized on yearly basis with in depth action
planning.
CATALYSING
GREEN 77
CORPORATE SOCIAL
RESPONSIBILITY
Fatima is committed to the betterment of its employees,
customers, partners, and larger communities by delivering Spring Clinic Spring Clinic /
Institute of Psychiatry
excellence and creating shared value for all our stakeholders.
We are dedicated to the communities we operate in as we firmly
believe our growth depends on the growth of the communities
around us. Spring Clinic is a medium sized medical facility for psychiatric /
psychological patients. Its medical team comprises Psychiatrists,
Our corporate social responsibilities revolve around six key Clinical Psychologists and Speech Therapists. The patient mix
initiatives i.e. Community development, Environment protection, include adults (both genders) and children. Spring is a subsidiary
Governance and Ethical Practices, Employee growth and well of Mukhtar A. Sheikh Hospital. Spring has its own identity and
being, Customer service & Working relationship with Shareholders/ separate infrastructure.
Investors for Community development.
Fatima Fertilizer Welfare Trust

Fatima Flagship Health Project Hospital
– Mukhtar A. Sheikh Hospital The main objective of Fatima Fertilizer Welfare Trust Hospital is
Located in the heart of Southern Punjab, Mukhtar A. Sheikh to eradicate hepatitis in the vicinity of Plant areas and the district
Hospital (MASH) is a multidisciplinary tertiary care hospital that Rahim Yar Khan. A dialysis center was inaugurated to further
aims to provide exceptional healthcare services through its state benefit the communities.
of the art facility. MASH’s goal is to provide unparalleled services
by employing cutting edge technology in its operations.
Our Contributions to the
Mukhtar A. Sheikh Hospital strives to embrace the best
international healthcare practices by aligning with the most notable Education Sector
medical professionals both nationally and internationally. With
compassion and commitment at its heart, Mukhtar A. Sheikh At Fatima, we aim to ensure that quality education is accessible
Hospital opens its door to serve individuals from all walks of life. and affordable to the underprivileged segment the society. The
MASH strives to become a pioneer in the healthcare industry, need to invest in the education sector - primary, secondary and
with a special focus on infection prevention and control and higher - is critical and it is imperative that we divert our resources
a paperless environment. Complying with the International to constantly introduce new technologies and adopt innovative,
standards of quality, MASH aims to bring value based patient creative methodologies so that our youth may flourish and we, as
centered healthcare the Southern Punjab a country, can realize our true potential.
In 2022, we have actively sponsored the following organizations’

For more details please visit our website www.mashospital.org
students, besides operating the schools inside our plant premises.
• Care Foundation
• TCF (The Citizens Foundation)
• Lahore University of Management Sciences (LUMS)
• Progressive Education Network

Empowering Communities Floods 2022
We are deeply committed to playing our part in the social and Fatima Group has always been at the forefront of relief efforts
economic empowerment of our communities. This year we in unfortunate times of national disasters. The year, the flood
collaborated with Deaf Reach to support the primary education of devastated the lives and livelihoods of people in Southern Punjab,
the Deaf Community while continuing our support of Rising Sun Sindh, Balochistan and up North.
Institute.
The Fatima Site team collaborated with local and Army authorities
We further built on our collaborations with Deaf Reach, Pakistan to ensure that relief goods, including food items, medicine, tents
Foundation Fighting Blindness (PFFB) and LABARD. Through their and blankets, reach flood affected areas soon. The Plant Site team
platforms, we on boarded deaf and visually impaired individuals also collaborated with the Marketing Team to provide relief goods
for a three month internship program with us. to the farmers affected by the floods.
CATALYSING
GREEN 79
OUR REPORTING
PARAMETERS
This report contains the Directors’ Report to shareholders
along with the audited financial statements as per the
Report Content
statuary requirements for disclosure for listed companies in The Company identified key issues to be responded on
Pakistan. Additionally, the report also contains the voluntary as corporate strategy by using its materiality matrix. The
reporting on sustainability and is published as part with purpose of the engagement was to prioritize the materiality
the Company Annual Report. In general the sustainability of outcomes for management attention and further actions.
highlights uses the G3.1 reporting framework issued by All the issues which are significant in nature considering
the Global Reporting Initiative (GRI) on volunteer basis and the concerns of the stakeholders and the Company are
is aiming for a B Level report as per this framework. The analysed and covered in detail in the report.
Company also considered the requirements of Association
of Chartered Certified Accountants (ACCA), World
Wide Fund for Nature - Pakistan (WWF-P) and Pakistan Data Measurement
Environment Reporting Awards (PERA) in order to adopt Techniques
best sustainability reporting practices within the Country.
All numeric indicators are reported on actual basis
Report Boundary except for a few environmental KPIs which are reported
on management best estimates in accordance with
This report covers all fertilizer production facilities and the international standards and best practices.
Corporate Head Office in Lahore.
Contact Us
Reporting Period Feedback on the Company’s annual and sustainability
The reporting period is January 01, 2022 to December 31, reporting is encouraged. For comments and feedback,
2022 and the data has mainly been obtained from Finance, please contact the Corporate HSE / Corporate
Operations, Marketing and Sales, Human Resources, Communications Department at:
Corporate Secretariat, Internal Audit, Information sustainability.reporting@fatima-group.com and
Technology, Supply Chain, External Auditors, HSE and communications@fatima-group.com
CSR Functions.

CONSOLIDATED
FINANCIAL
STATEMENTS
Report of the Audit Committee 82
Statement of Compliance 84
Independent Auditor’s Review Report to the Members 86
Independent Auditors’ Report to the Members 87
Consolidated Statement of Financial Position 92
Consolidated Statement of Profit or Loss 94
Consolidated Statement of Comprehensive Income 95
Consolidated Statement of Changes in Equity 96
Consolidated Statement of Cash Flows 97
Notes to the Consolidated Financial Statements 98
REPORT OF THE AUDIT COMMITTEE
on Adherence to the Listed Companies (Code of Corporate
Governance), Regulations, 2019.
The Audit Committee has concluded its annual review of • Accounting estimates are based on reasonable
the conduct and operations of the Company during 2022, and prudent judgment. Proper and adequate
and reports that: accounting records have been maintained by
the Company in accordance with the Companies
• The Company has issued a “Statement of Act, 2017. The financial statements comply with
Compliance with Listed Companies (Code of the requirements of the Fourth Schedule to the
Corporate Governance) Regulations, 2019” which Companies Act, 2017 and the external reporting
has also been reviewed and certified by the External is consistent with Management processes and
Auditors of the Company. adequate for shareholder needs.
• The Company has prepared a “Code of Conduct” • Directors, CEO and executives or their spouses
and has ensured that appropriate steps have been do not hold any interest in the shares of the
taken to disseminate it throughout the Company Company other than that disclosed in the pattern of
along with its supporting policies and procedures. shareholding.
Equitable treatment of shareholders has also been
ensured. • Closed periods were duly determined and
announced by the Company, precluding the
• The Board has developed a Vision / Mission Directors, the Chief Executive and executives of the
statement, overall corporate strategy and significant Company from dealing in Company shares, prior
policies of the Company. A complete record of to each Board meeting involving announcement of
particulars of significant policies along with the interim / final results, distribution to shareholders or
dates on which they were approved or amended any other business decision, which could materially
has been maintained. affect the share market price of Company, along
with maintenance of confidentiality of all business
• The Company has complied with all the corporate information.
and financial reporting requirements. Appropriate
accounting policies have been consistently applied. INTERNAL AUDIT
All core & other applicable International Accounting • The internal control framework has been effectively
Standards were followed in preparation of financial implemented through an independent in-house
statements of the Company on a going concern Internal Audit function established by the Board
basis, for the financial year ended December 31, which is independent of the External Audit function.
2022, which present fairly the state of affairs, results
of operations, profits, cash flows and changes in • The Internal Audit function has carried out its duties
equities of the Company. under the charter defined by the Committee. The
Committee has reviewed material Internal Audit
• The Directors’ Report for this year has been findings, taking appropriate action or bringing the
prepared in compliance with the requirements matters to the Board’s attention where required.
of the Listed Companies (Code of Corporate
Governance), Regulations, 2019 and fully describes • The Company’s system of internal control is
the salient matters required to be disclosed. adequate and effective. The Audit Committee
has ensured the achievement of operational,
• The Chief Executive and the CFO have reviewed compliance, risk management, financial reporting
the financial statements of the Company and the and control objectives, safeguarding of the assets
Directors’ Report. of the Company and the shareholders wealth at all
levels within the Company.
82
• Coordination between the External and Internal • The Auditors have been allowed direct access to the
Auditors was facilitated to ensure efficiency and Committee and the effectiveness, independence
contribution to the Company’s objectives, including and objectivity of the Auditors has thereby been
a reliable financial reporting system and compliance ensured. The Audit Committee had a meeting with
with laws and regulations. the external auditors without the presence of the
CFO and the Head of Internal Audit. The Auditors
EXTERNAL AUDITORS attended the General Meeting of the Company
• The statutory Auditors of the Company, Yousuf during the Year and have confirmed attendance
Adil, Chartered Accountants have completed their of the 20th Annual General Meeting scheduled for
April 28, 2023 and have indicated their willingness
Audit assignment of the “Company’s Financial
to continue as Auditors.
Statements” and the “Statement of Compliance
with the Listed Companies (Code of Corporate
• Being eligible for reappointment as Auditors of
Governance) Regulations, 2019” for the financial
the Company, the Audit Committee recommends
year ended December 31, 2022 and shall retire on
their reappointment for the financial year ending
the conclusion of the 20th Annual General Meeting.
December 31, 2023.
• The Audit Committee has reviewed and discussed

Audit observations and Draft Audit Management • The Firm has no financial or other relationship of
Letter with the External Auditors. Final Management any kind with the Company except that of External
Letter is required to be submitted within 45 days Auditors.
of the date of the Auditors’ Report on financial

statements under the listing regulations and shall
therefore accordingly be discussed in the next Audit
For and on behalf of Audit Committee
Committee Meeting.
Lahore Tariq Jamali

April 03, 2023 Chairman-Audit Committee
83
STATEMENT OF COMPLIANCE
Statement of Compliance with Listed Companies (Code of Corporate
Governance) Regulations, 2019
The Company has complied with the requirements of the by the Board / shareholders as empowered by the
Regulations in the following manner: relevant provisions of the Act and these Regulations;
7. The meetings of the Board were presided over by the

1. The total number of directors are 7 as per the following:
Chairman and, in his absence, by a director elected by
the Board for this purpose. The Board has complied
a. Male: 6 members
with the requirements of Act and the Regulations
b. Female: 1 member
with respect to frequency, recording and circulating
minutes of meeting of the Board;
2. The composition of the Board is as follows:
8. The Board has a formal policy and transparent
procedures for remuneration of directors in
i Independent Mr. Tariq Jamali
accordance with the Act and these Regulations;
directors
(excluding female 9. Two directors of the Company, Mr. Tariq Jamali
director) (Independent/Non Executive Director) and Mr.
ii Other Non- Mr. Arif Habib Muhammad Kashif Habib (Non Executive Director)
executive directors Mr. Faisal Ahmed Mukhtar have already completed the formal Directors Training
Mr. Muhammad Kashif Program (“DTP”). New Board member, Ms. Malika
Habib Nait Oukhedou has also obtained the requisite training
iii Executive directors Mr. Fawad Ahmed Mukhtar during the year 2022 whereas the remaining four
Mr. Fazal Ahmed Sheikh directors fall under the exemption from the mandatory
requirement for acquiring DTP certification.
iv Female directors Ms. Malika Nait Oukhedou
(Independent) 10. The Board has approved appointment of Chief
Financial Officer, Company Secretary and Head of
For a Board comprising of seven members, one-third Internal Audit, including their remuneration and terms
equates to 2.33. Two independent directors have been and conditions of employment and complied with
appointed, however, the fraction of 0.33 in such one-third relevant requirements of the Regulations. There is no
is not rounded up as one since the fraction is below half new appointment of Company Secretary or Head of
(0.5). Furthermore, the two independent directors have the Internal Audit during the year;
requisite skills, knowledge and are capable of protecting 11. Chief Financial Officer and Chief Executive Officer duly
the interests of minority shareholders. endorsed the financial statements before approval of
3. The directors have confirmed that none of them the Board;
is serving as a director on more than seven listed 12. The Board has formed committees comprising of
companies, including this Company; members given below:
4. The Company has prepared a Code of Conduct and a) Audit Committee
has ensured that appropriate steps have been taken
to disseminate it throughout the Company along with
its supporting policies and procedures;
3. Mr. Faisal Ahmed Mukhtar Member
5. The Board has developed a vision / mission statement, 4. Ms. Malika Nait Oukhedou Member
overall corporate strategy and significant policies of
the Company. The Board has ensured that complete b) HR and Remuneration Committee
record of particulars of the significant policies along
1. Ms. Malika Nait Oukhedou Chairperson
with their date of approval or updating is maintained
by the Company;
3. Mr. Fawad Ahmed Mukhtar Member
6. All the powers of the Board have been duly exercised
and decisions on relevant matters have been taken
84
c) Nomination and Risk Management Committee 17. The statutory auditors or the persons associated
1. Mr. Fazal Ahmed Sheikh Chairman with them have not been appointed to provide other
2. Mr. Muhammad Kashif Habib Member services except in accordance with the Act, these
3. Mr. Tariq Jamali Member regulations or any other regulatory requirement and
the auditors have confirmed that they have observed
13. The terms of reference of the aforesaid Committees IFAC guidelines in this regard;
have been formed, documented and advised to the 18. We confirm that all requirements of regulations 3, 6,
committee for compliance; 7, 8, 27, 32, 33 and 36 of the Regulations have been
14. The frequency of meetings (quarterly/half yearly/ complied with.
yearly) of the committee were as per following: 19. Explanation with respect to compliance with non-
a) Audit Committee mandatory requirements of the Listed Companies

(Code of Corporate Governance) Regulations, 2019
Four meetings of the Audit Committee were held
is specified below:
during the year prior to approval of interim and final
S. Requirement Explanation Regulation No.
results of the Company during second, third and No.
fourth quarter of the financial year. 1. The board The board has 29
may constitute constituted a
b) HR and Remuneration Committee a separate joint Nomination
committee, and Risk
The meeting of the HR and Remuneration Committee designed as Management
was held once during the year. the nomination Committee and
committee of the functions
c) Nomination and Risk Management Committee such number and of both these
class of Directors, committees
There was no meeting of the Nomination and Risk as it may deem i.e., Nomination
appropriate in its Committee, and
Management Committee during the year.
circumstances. Risk Management
15. The Board has set up an effective internal audit Committee are
being performed
function who are considered suitably qualified and by the joint
experienced for the purpose and are conversant with “Nomination and
Risk Management
the policies and procedures of the Company; Committee”.
2. The Company may As part of our 35
16. The statutory auditors of the Company have
post on its website ongoing efforts
confirmed that they have been given a satisfactory key elements to improve
rating under the quality control review program of the of its significant our corporate
policies and governance
ICAP and registered with Audit Oversight Board of brief synopsis of and disclosure
Pakistan, that they or any of the partners of the firm, terms of reference practices, we
of the Board’s intend to publish
their spouses and minor children do not hold shares committees. our company's
of the Company and that the firm and all its partners policies and
terms of
are in compliance with International Federation of reference (TORs)
Accountants (IFAC) guidelines on code of ethics as on our website in
the near future.
adopted by the Institute of Chartered Accountants of
Pakistan and that they and the partners of the firm
involved in the audit are not a close relative (spouse,
parent, dependent and non-dependent children) of
the chief executive officer, chief financial officer, head
of internal audit, company secretary or director of the
company;
Place: Lahore Fawad Ahmed Mukhtar Arif Habib
April 03, 2023 CEO Chairman
85
INDEPENDENT AUDITOR’S
REVIEW REPORT TO THE MEMBERS
On The Statement Of Compliance Contained In Listed Companies
(Code Of Corporate Governance) Regulations, 2019
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) prepared by the Board of Directors of Fatima Fertilizer Company Limited (the Company)
for the year ended December 31, 2022, in accordance with the requirements of regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Company’s Board of Directors. Our responsibility is
to review whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of
the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations. A
review is limited primarily to inquiries of the Company’s personnel and review of various documents prepared to comply
with the Regulations.
As a part of our audit of the financial statements, we are required to understand the accounting and internal control
systems sufficient to plan the audit and develop a practical audit approach. We are not required to consider whether the
Board of Directors statement on internal control covers all risks and rules or to form an opinion on the effectiveness of such
internal controls, the Company’s corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit
Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only
required and have ensured compliance with this requirement to the extent of the approval of the related party transactions
by the Board of Directors upon recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflect the Company’s compliance, in all material respects, with the requirements contained in the
Regulations as applicable to the Company for the year ended December 31, 2022.
Chartered Accountants
Engagement Partner: Muhammad Sufyan
Lahore
Date: April 04, 2023
UDIN: CR202210180DLrOpEqth
86
INDEPENDENT AUDITOR’S REPORT
To the members of Fatima Fertilizer Company Limited
Opinion
We have audited the annexed financial statements of Fatima Fertilizer Company Limited and its subsidiaries
(the Group), which comprise of the consolidated statement of financial position as at December 31, 2022,
the consolidated statement of profit or loss, the consolidated statement of comprehensive income, the
consolidated statement of changes in equity, the consolidated statement of cash flows for the year then ended
and notes to the consolidated financial statements, including a summary of significant accounting policies and
other explanatory information.
In our opinion consolidated financial statements give a true and fair view of consolidated financial position
of the Group as at December 31, 2022, and of its consolidated financial performance, and its consolidated
cash flows for the year then ended in accordance with the accounting and reporting standards as applicable
in Pakistan.
Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group
in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants as adopted by the Institute of the Chartered Accountants of Pakistan (the Code), and we have
fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
87
Consolidated Financial Statements
Following are the key matters:

Key audit matter How the matter was addressed in our audit
1 Revenue Recognition
The Group’s revenue comprises sale of fertilizer, mid Our audit procedures to address this Key Audit
products and toll manufacturing which has been Matter included the following:
disclosed in note 28 to the consolidated financial - obtaining an understanding of and assessing
statements. the design and implementation and operating
Revenue from the sale of fertilizer, mid products and effectiveness of key internal controls over
toll manufacturing is recognized, when the Group recognition of revenue;
satisfies the performance obligation under the - assessing the appropriateness of the Group’s
contract by transferring the promised goods to the accounting policies for revenue recognition and
customers. Revenue recognition criteria has been compliance of those policies with applicable
explained in note 4.22 to the consolidated financial accounting standards;
statements. - checking on a sample basis the recorded sales
We identified revenue recognition as key audit matter transactions with underlying sales invoices;
as it is one of the key performance indicators of the - testing timeliness of revenue recognition by
Group and because of the potential risk that revenue comparing individual sales transactions before
transactions may not have been recognized based and after the year end to underlying documents;
on the satisfaction of the performance obligation and
under the contract with the customer in line with the - assessed the adequacy of related disclosures in
accounting policy adopted or may not have been the consolidated financial statements.
recognized in the appropriate period.
2 Valuation of Brand
The Group’s intangible assets contain a brand with Our audit procedures to address this Key Audit
indefinite useful life which has been disclosed in Matter included the following:
note 17 to the consolidated financial statements. The - obtaining an understanding of and assessing
recognition and subsequent measurement policy the design and implementation and operating
has been disclosed in note 4.6 to the consolidated effectiveness of key internal controls over
financial statements. recognition and subsequent measurement of
The Group had initially recorded the brand at Rs brand value;
5,900 million in the consolidated financial statements - reviewed valuation report of the independent valuer
on which an impairment of Rs 2,360 million has been and evaluated appropriateness of assumptions
recognized as at reporting date. and methodologies used by the valuer.
We identified valuation of the brand as a Key Audit - evaluated the competence and independence of
Matter because its amount is material to the financial valuer;
statements. In addition, annual testing of impairment - compared recoverable amount with carrying
of Brand is complex and judgmental process which amount; and
involves assumptions and methods affected by - assessed the adequacy of disclosures related to
future economic and market conditions. valuation of brand in notes to the consolidated
financial statements.
88
Information Other than the Financial Statements and Auditor’s Report Thereon
Management of the Group is responsible for the other information. The other information comprises the
information included in the annual report, but does not include the consolidated financial statements and our
auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Consolidated

Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with accounting and reporting standards as applicable in Pakistan and Companies Act, 2017 and
for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
89
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Group’s management.
• Conclude on the appropriateness of the Group’s management use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our
audit opinion.
90
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Muhammad Sufyan.
Lahore
Dated: April 04, 2023
UDIN: AR202210180S8uwh4A7i
91
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
as at December 31, 2022
2022 2021
Note (Rupees in thousand)
EQUITY AND LIABILITIES

CAPITAL AND RESERVES
Authorized share capital
2,700,010,000 (2021: 2,700,010,000) shares of Rs 10 each 27,000,100 27,000,100

Issued, subscribed and paid up share capital
2,100,000,000 (2021: 2,100,000,000) ordinary shares of Rs 10 each 5 21,000,000 21,000,000
Reserves 6 85,910,968 79,263,264
106,910,968 100,263,264
NON CURRENT LIABILITIES
Long term finances 7 8,446,451 5,172,276
Lease liabilities 8 1,152,880 1,437,025
Deferred taxation 9 22,680,356 20,274,052
Deferred liabilities 10 2,683,448 3,248,245
Long term deposits 372,600 175,104
35,335,735 30,306,702
CURRENT LIABILITIES
Trade and other payables 11 55,371,837 38,469,418
Accrued finance cost 12 715,007 307,184
Income tax payable 8,336,229 4,968,065
Short term finances - secured 13 12,883,518 6,465,772
Unpaid dividend – 1,738,864
Unclaimed dividend 46,429 44,951
Loan from directors 18,000 –
Current portion of:
- Long term finances 7 2,346,431 1,892,328
- Lease liabilities 8 541,363 375,273
- Deferred government grant 14 – 61,440
80,258,814 54,323,295
CONTINGENCIES & COMMITMENTS 15
222,505,517 184,893,261
The annexed explanatory notes from 1 to 47 form an integral part of these consolidated financial statements.
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2022 2021
ASSETS

NON CURRENT ASSETS
Property, plant and equipment 16 110,256,748 105,422,464
Intangible assets 17 3,651,346 3,608,877
Investment property 18 165,419 775,339
114,073,513 109,806,680

Long term investments 19 1,469,179 795,311
Long term loan to an associated company 20 2,999,000 1,999,333
Long term advances and deposits 1,173,807 518,424
5,641,986 3,313,068
119,715,499 113,119,748

CURRENT ASSETS
Stores and spares 21 14,722,495 11,565,833
Stock in trade 22 32,487,798 18,331,781
Trade debts 23 22,831,008 9,654,308
Short term loans 24 8,499,723 6,999,723
Advances, deposits, prepayments and other receivables 25 17,509,137 15,635,757
Short term investments 26 4,129,240 2,242,710
Cash and bank balances 27 2,610,617 7,343,401
102,790,018 71,773,513

222,505,517 184,893,261
Chief Executive Officer Director Chief Financial Officer
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OF PROFIT OR LOSS
for the year ended December 31, 2022
2022 2021
Sales 28 152,231,277 112,488,420

Cost of sales 29 (100,288,585) (69,403,976)
Gross profit 51,942,692 43,084,444

Distribution cost 30 (7,947,081) (5,048,813)
Administrative expenses 31 (5,936,088) (3,899,774)
38,059,523 34,135,857

Finance cost 32 (2,930,449) (2,006,559)
Other operating expenses 33 (6,336,952) (4,676,977)
28,792,122 27,452,321

Other income 34 2,425,100 1,210,189
Share of loss from associates 19.1 (68,408) (348)
Other losses:
- Unwinding of provision for GIDC 10.2 (274,157) (367,524)
- Loss allowance on subsidy receivable from GoP 25.3 (109,724) (109,721)
(383,881) (477,245)
Profit before tax 30,764,933 28,184,917

Taxation 35 (16,640,994) (9,710,827)
Profit for the year 14,123,939 18,474,090

Earnings per share - basic and diluted (Rupees) 36 6.73 8.80


94
OF COMPREHENSIVE INCOME
2022 2021
(Rupees in thousand)

Other comprehensive income:
Items that may not be reclassified subsequently to profit or loss:
Remeasurement of post retirement benefits obligation (191,889) (82,249)
Related tax thereon 72,220 23,852
Share of other comprehensive loss from associates (7,725) (5,982)
Related tax thereon 1,159 897
Other comprehensive income - net of tax (126,235) (63,482)
Total comprehensive income for the year 13,997,704 18,410,608


95
OF CHANGES IN EQUITY
Capital Reserve Revenue Reserve
Post retirement
Ordinary share
Share Unappropriated benefit obligation Total
capital
premium profit reserve
Balance at December 31, 2020 21,000,000 1,790,000 64,374,342 (61,686) 87,102,656
Profit for the year – – 18,474,090 – 18,474,090
Other comprehensive income – – (5,085) (58,397) (63,482)
Total comprehensive income – – 18,469,005 (58,397) 18,410,608
Transaction with owners:
- Final dividend for the year ended

December 31, 2020 @ Rs 2.50 per share – – (5,250,000) – (5,250,000)


96
OF CASH FLOWS
2022 2021
Cash flows from operating activities

Cash generated from operations 40 22,022,834 31,427,289
Net increase in long term deposits 197,496 64,734
Finance cost paid (2,396,873) (1,962,636)
Taxes paid (10,793,147) (2,988,233)
Employee retirement benefits paid (131,073) (242,330)
Net cash generated from operating activities 8,899,237 26,298,824
Cash flows from investing activities
Additions in property, plant and equipment (9,381,708) (5,730,994)
Additions in investment property – (20,056)
Additions in intangible assets (85,109) (19,741)
Proceeds from disposal of property, plant and equipment 18,908 3,430
Short term investments made (3,050,785) (673,802)
Short term loan to an associated company (1,500,000) (3,758,000)
Payment made for acquisition of subsidiary - net of bank balances (290,699) –
Long term investments made (750,001) (600,000)
Proceeds from short term investments 335,925 868,243
Profit received on loans and saving accounts 973,441 1,977,017
Net increase in long term advances and deposits (655,383) (404,745)
Net cash used in investing activities (14,385,411) (8,358,648)
Cash flows from financing activities
Proceeds from long term finances 7.1 5,622,520 3,920,362
Repayment of long term finances 7.1 (1,929,341) (5,857,386)
Repayment of lease liabilities 8 (270,149) (730,690)
Dividend paid (9,087,386) (3,507,038)
Increase / (decrease) in short term finances - net 3,376,751 (2,584,266)
Net cash used in financing activities (2,287,605) (8,759,018)
Net (decrease) / increase in cash and cash equivalents (7,773,779) 9,181,158
Cash and cash equivalents at the beginning of the year 5,642,936 (3,538,222)
Cash and cash equivalents at the end of the year (2,130,843) 5,642,936
Cash and cash equivalents comprises of following:

Running finance 13 (4,741,460) (1,700,465)

97
NOTES TO AND FORMING PART OF THE

CONSOLIDATED FINANCIAL STATEMENTS
1 Legal Status and nature of business
1.1 Fatima Fertilizer Company Limited (“the Holding Company”) was incorporated in Pakistan under the repealed
Companies Ordinance, 1984 (now the Companies Act, 2017) and it is listed on Pakistan Stock Exchange. Fatimafert
Limited, Fatima Cement Limited and Pan-Africa Fertilizers Limited are wholly owned subsidiaries of the Holding
Company. Fatimafert Limited and Fatima Cement Limited are incorporated in Pakistan under the Companies Act,
2017 and Pan-Africa Fertilizers Limited is incorporated in Kenya. Collectively, these would be referred to as ‘the
Group’ in these consolidated financial statements.

The principal activity of the Group is manufacturing, producing, buying, selling, importing and exporting fertilizers,
chemicals and cement. The registered office of the Holding Company, Fatimafert Limited and Fatima Cement
Limited is situated at E-110, Khayaban-e-Jinnah, Lahore Cantt, whereas the registered office of Pan-Africa Fertilizers
Limited is situated at Westlands District, Nairobi, Kenya. The manufacturing facilities of the Holding Company are
located at Mukhtargarh - Sadiqabad, Khanewal Road - Multan and Chichoki Mallian - Sheikhupura, Pakistan.

1.2 The Board of Directors of the Holding Company in their meeting held on April 07, 2022, has approved investment
in Fatima Cement Limited (“FCL”) by way of acquisition of 100% ordinary shares of FCL from all the existing
shareholders at par value, aggregating to Rs 300.03 million, to make it wholly owned subsidiary of the Holding
Company.
At the acquisition date, total liabilities of FCL amounted to Rs 18.32 million and total assets amounted to
Rs 329.90 million inclusive of Rs 9.33 million bank balances.

1.3 The Board of Directors of the Holding Company, in their meeting held on December 05, 2022, has considered
and approved a comprehensive business expansion plan and the Scheme of Compromises, Arrangements and
Reconstruction (“the Scheme”) drafted under the relevant provisions of the Companies Act, 2017, aimed at further
consolidation of the fertilizer business by amalgamating its associated company, Pakarab Fertilizers Limited (“PFL”)
with and into the Holding Company with effect from July 01, 2022. As per the terms of the Scheme, this Amalgamation
would lead to an increased asset base and size of the Holding Company allowing it to benefit from economies of
scale effectively and efficiently in the combined business and assets base of both companies, creating further
business expansion opportunities for the Holding Company. Accordingly, Fatima Packaging Limited, a wholly
owned subsidiary of PFL, will also become a wholly owned subsidiary of the Holding Company. This Scheme has
been duly approved by the shareholders of the Holding Company in the Extra Ordinary General Meeting held on
December 31, 2022, under the supervision of the Honourable Lahore High Court. This transaction would be subject
to the receipt of necessary approvals, sanctions, consents, observations, no objection certificates from the creditors
of the Holding Company, Securities and Exchange Commission of Pakistan (“SECP”), the relevant High Court or
such other competent authority as may be applicable.
1.4 The Board of Directors (“the Board”) of the Holding Company in their meeting held on August 26, 2020, accorded
in principle approval for the transfer of operations related to the Holding Company’s Sheikhupura plant to Fatimafert
Limited. The Scheme of Arrangement (“the Scheme”) drafted under the relevant provisions of the Companies Act,
2017 between the Holding Company and Fatimafert Limited was approved by the Board of both Companies on
July 15, 2021. The Scheme was filed with the Lahore High Court (“the Court”) for formal sanction and approval
of the Court. On December 01, 2022, the Court granted its approval for the Scheme which is effective from
January 01, 2022.
On December 30, 2022, the Board of the Holding Company and Fatimafert Limited have agreed to defer the
effective date of implementation of the Scheme from January 01, 2022 to January 01, 2024 or such suitable date,
earlier or later, as may be decided by the Board of the Holding Company and Fatimafert Limited due to prevailing
economic situation in the country. Subsequent to the year end, the Holding Company has approached the Court for
permission in this regard.

2 Basis of preparation
2.1 Statement of compliance
These consolidated financial statements have been prepared in accordance with the accounting and reporting
standards as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:
98
– International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB);

– Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan
(ICAP) as notified under the Companies Act, 2017; and

– Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs and IFAS, the
provisions of and directives issued under the Companies Act, 2017 have been followed.

2.2 New accounting standards / amendments and IFRSs interpretations that are effective for the year ended
December 31, 2022
The following standards, amendments and interpretations are effective for the year ended December 31, 2022.
These standards, amendments and interpretations are either not relevant to the Group’s operations or are not
expected to have significant impact on the Group’s consolidated financial statements other than certain additional
disclosures:
Effective from accounting period

beginning on or after:
Amendments to IFRS 16 ‘Leases’ - Covid - 19 related rent concessions April 01, 2021
Amendments to IFRS 3 ‘Business Combinations’ - Reference to the conceptual
January 01, 2022
framework
Amendments to IAS 16 ‘Property, Plant and Equipment’ - Proceeds before intended
January 01, 2022
use
Amendments to IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ -
January 01, 2022
Onerous Contracts — cost of fulfilling a contract
Annual Improvements to IFRS Standards 2018 - 2020 Cycle (related to IFRS 9,
January 01, 2022
IFRS 16 and IAS 41)
2.3 New accounting standards, amendments and IFRSs interpretations that are not yet effective
The following standards, amendments and interpretations are only effective for accounting periods, beginning on
or after the date mentioned against each of them. These standards, interpretations and the amendments are either
not relevant to the Group’s operations or are not expected to have significant impact on the Group’s consolidated
financial statements other than certain additional disclosures:

Amendments to IAS 1 ‘Presentation of Financial Statements’ - Disclosure of

January 01, 2023
accounting policies
Amendments to IAS 8 'Accounting Policies, Changes in Accounting Estimates and
January 01, 2023
Errors' - Definition of accounting estimates
Amendments to ‘IAS 12 Income Taxes’ - deferred tax related to assets and liabilities
January 01, 2023
arising from a single transaction.
Amendments to IFRS 16 ‘ Leases’ - Lease Liability in a Sale and Leaseback January 01, 2024
Amendments to IAS 1 ‘Presentation of Financial Statements’ - Classification of
January 01, 2024
liabilities as current or non-current
Amendments to IFRS 10 and 28 - Sale or Contribution of Assets between an
Deferred indefinitely
Investor and its Associate or Joint Venture
99

3 Basis of measurement
3.1 Accounting convention
These consolidated financial statements have been prepared under the historical cost convention except for
revaluation of certain financial instruments at fair value and recognition of certain employee retirement benefits at
present value.

3.2 Critical accounting estimates and judgements
The Group’s significant accounting policies are stated in note 4. Not all of these significant policies require the
management to make difficult, subjective or complex judgements or estimates.

The following is intended to provide an understanding of the policies the management considers critical because
of their complexity, judgement of estimation involved in their application and their impact on these consolidated
financial statements. Estimates and judgements are continually evaluated and are based on historical experience,
including expectations of future events that are believed to be reasonable under the circumstances. These
judgements involve assumptions or estimates in respect of future events and the actual results may differ from
these estimates.
The areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are
significant to the consolidated financial statements are as follows:

a) Employee retirement benefits
The Group uses the valuation performed by an independent actuary as the present value of its retirement benefit
obligations. The valuation is based on assumptions as mentioned in note 4.2 (a).

b) Useful life and residual values of property, plant and equipment and intangible assets
The Group reviews the useful lives of property, plant and equipment and intangible assets on regular basis. Any
change in estimates in future years might affect the carrying amounts of the respective items of property, plant and
equipment and intangible assets with a corresponding effect on the depreciation / amortization charge.

c) Provision for taxation
In making the estimates for income taxes payable by the Group, the management considers the applicable laws
and the decisions of the appellate tax authorities on certain issues in the past.

4 Significant accounting policies
The significant accounting policies adopted in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

4.1 Taxation
Current
Provision of current tax is based on the taxable income for the period determined in accordance with the prevailing
law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to
apply to the profit for the period if enacted. The charge for current tax also includes adjustments, where considered
necessary, to provision for tax made in previous years arising from assessments framed during the period for such
years.
Deferred
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising
from differences between the carrying amount of assets and liabilities in the consolidated financial statements
and the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which the deductible temporary differences, unused tax losses
and tax credits can be utilized.
100
Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based
on tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or
credited to the statement of profit and loss, except in the case of items recognised in other comprehensive income
or directly in equity in which case it is included in other comprehensive income or equity, as the case may be.

4.2 Employee retirement benefits
The main features of the schemes operated by the Group for its employees are as follows:

a) Defined benefit plan - Gratuity
The Group operates non funded gratuity scheme for employees of Sadiqabad plant and funded gratuity scheme
for employees of Multan and Sheikhupura plants, according to the terms of employment, subject to a minimum
qualifying period of service. Annual provision is made on the basis of actuarial valuation to cover obligations under
the scheme for all employees eligible to gratuity benefits.
The latest actuarial valuation for gratuity scheme was carried out as at December 31, 2022. Projected unit credit
method is used for valuation of the scheme.

All actuarial gains and losses are recognised in ‘Other Comprehensive Income’ as they occur.

b) Accumulating compensated absences
Provisions are made annually to cover the obligation for accumulating compensated absences and are charged to
the consolidated statement of profit or loss.

c) Defined contribution plan - Provident Fund
The Group operates provident fund for all its permanent employees. Equal monthly contributions are made both
by the Group and the employees. Retirement benefits are payable to employees on completion of prescribed
qualifying period of service under these schemes.

4.3 Basis of consolidation
These consolidated financial statements include the financial statements of Holding Company and its wholly owned
subsidiaries.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. These
consolidated financial statements include Fatima and all companies in which it directly or indirectly controls,
beneficially owns or holds more than 50% of the voting securities or otherwise has power to elect and appoint more
than 50% of its directors (the Subsidiaries).

Inter company transactions, balances and unrealized gains on transactions between Group companies are
eliminated. Unrealized losses are also eliminated. When necessary, amounts reported by subsidiaries have been
adjusted to conform with the Group’s accounting policies.

4.3.1 Business Combination
The Holding Company owns the 100% equity shares of Fatimafert Limited, Fatima Cement Limited and Pan-Africa
Fertilizers Limited. The control of Fatimafert Limited, Fatima Cement Limited and Pan-Africa Fertilizers Limited was
obtained on January 01, 2021, May 27, 2022 and September 02, 2021 respectively.

The Group uses the acquisition method of accounting to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred
and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or
101

liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities (including
contingent liabilities) assumed in a business combination are measured initially at their fair values at the acquisition
date. On an acquisition by acquisition basis, the Group recognises any non controlling interest in the acquiree either
at fair value or at the non controlling interest’s proportionate share of the acquiree’s identifiable net assets.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is
recognised in accordance with IFRS 9 either in profit or loss or as a change to the consolidated statement of other
comprehensive income. Contingent consideration that is classified as equity is not re measured, and its subsequent
settlement is accounted for within equity.

4.4 Property, plant and equipment
Property, plant and equipment except freehold land are stated at cost less accumulated depreciation and any
identified impairment loss. Freehold land is stated at cost less any identified impairment loss. Cost in relation to own
manufactured assets includes direct cost of materials, labour and applicable manufacturing overheads. Cost also
includes capitalized borrowing costs as referred to in note 4.17.
Depreciation on property, plant and equipment is charged to the consolidated statement of profit or loss on straight
line method so as to write off the depreciable amount of an asset over its estimated useful life at the rates given in
note 16.
Depreciation on additions to property, plant and equipment is charged from the month in which an asset is acquired
or made available for use, while no depreciation is charged for the month in which the asset is disposed off.

The assets’ residual values and useful lives are reviewed, at each financial year end, and adjusted prospectively, if
impact on depreciation is significant.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. All other repair and maintenance costs are charged to consolidated statement
of profit or loss during the period in which they are incurred.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and
the carrying amount of the asset is recognised as an income or expense.

4.5 Capital work in progress
Capital work in progress and stores held for capital expenditure are stated at cost less any recognised impairment loss.
All expenditures connected with specific assets incurred during installation and construction period are carried under
capital work in progress. These are transferred to specific assets as and when these assets are available for use.
4.6 Intangibles assets

An intangible asset is recognised if it is probable that future economic benefits that are attributable to the asset will
flow to the Group and that the cost of such an asset can also be measured reliably. Subsequently asset is measured
as follows:

With indefinite useful life
Intangibles assets with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses. Impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the intangible is compared to the recoverable
amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment / reversal of
impairment is recognised in the consolidated statement of profit or loss immediately.

102
With finite useful life
Expenditure incurred to acquire intangible assets are capitalized and stated at cost less accumulated amortisation
and any identified impairment loss. Computer software is amortised using the straight line method over a period of
four years. Amortization on additions to computer software is charged from the month in which the asset is available
for use while no amortisation is charged for the month in which asset is disposed off.

4.7 Investment property
Investment property, which is property held to earn rentals and / or for capital appreciation, is valued using the cost
method i.e. at cost less any accumulated depreciation and any identified impairment loss. Depreciation on buildings
is charged to income on straight line method at the rate of 4%. Depreciation on additions to investment property
is charged from the month in which a property is acquired or capitalized while no depreciation is charged for the
month in which the property is disposed. The difference between present value of the proceeds from disposal and
the carrying amount is recognised in the consolidated statement of profit or loss.

Rental income from investment property that is leased to a third party under an operating lease is recognised in
the consolidated statement of profit or loss on a straight line basis over the lease term and is included in ‘other
income’.

4.8 Investments in associates - at equity method
The Group’s long term investments are investments in associates, entities over which the Group exercise significant
influence. These investments are initially recognised at cost and subsequently carrying amount is increased or
decreased to recognise the Group’s share of the profit or loss or other comprehensive income or loss of the
associates using the equity method. The Group’s share of the associates profit or loss is recognised in the Group’s
consolidated statement of profit or loss and the Group’s share of other comprehensive income or loss is recognised
in the consolidated statement of other comprehensive income. At each reporting date, the recoverable amounts are
estimated to determine the extent of impairment losses, if any, and carrying amounts of investments are adjusted
accordingly. Impairment losses are recognised as expense in the consolidated statement of profit or loss.

4.9 Government grant
The Group recognises the benefit of a government loan at below market rate of interest as a Government grant.
The benefit of the below market rate of interest is measured as the difference between the initial carrying value of
the loan determined in accordance with IFRS 9 and the proceeds received and is presented as deferred grant. The
recognition of government grants in the consolidated statement of profit or loss is done on a systematic basis over
the period of the loan.
4.10 Leases
As a lessee, the Group recognises right of use asset and lease liability at the lease commencement date.

Right of use asset
The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payment made at or before the commencement date, plus any initial direct cost incurred and an
estimate of cost to dismantle and remove the underlying asset or to restore the underlying asset or the site on which
it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight line method from the commencement date
to the earlier of the end of the useful life of the right of use asset or the end of lease term. The estimated useful
lives of the right of use assets are determined on the same basis as those of the property, plant and equipment.
In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for the certain
remeasurement of the lease liability.

103

Lease liability
The lease liability is initially measured at present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise of the following:

– fixed payments, including in-substance fixed payments;
– variable lease payments that depend on an index, or a rate, initially measured using the index or rate as at
commencement date;
– amount expected to be payable under a residual guarantee; and
– the exercise under purchase option that the Group is reasonably certain to exercise, lease payments in an
optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for
early termination of lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest rate method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes
its assessment of whether it will exercise a purchase or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right of use asset, or is recorded in consolidated statement of profit or loss if the carrying amount of the right of
use asset has been reduced to zero.

4.11 Financial instruments
Financial assets and financial liabilities are recognised in the consolidated statement of financial position when the
Group becomes a party to the contractual provisions of the instrument.

4.11.1 Financial assets
Classification
The Group classifies its financial assets in the following measurement categories:

(i) Amortised cost, where the effective interest rate method will apply;
(ii) Fair value through profit or loss (FVTPL);
(iii) Fair value through other comprehensive income (FVTOCI).

The classification depends on the group’s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in the consolidated statement of profit
or loss or consolidated statement of other comprehensive income. For investments in equity instruments that are
not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial
recognition to account for the equity investment at FVTOCI.
The Group reclassifies debt investments when and only when its business model for managing those assets
changes.

Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date, the date on which the Group
commits to purchase or sell the asset. Further, assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Group has transferred substantially all the risks
and rewards of ownership.
104
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not
at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVTPL are expensed in the consolidated statement of profit or loss.

Debt instruments
a) Debt instruments measured at amortised cost
Debt instruments that meet the following conditions are measured subsequently at amortised cost:
The financial asset is held within a business model whose objective is to hold financial assets in order to collect the
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition
minus the principal repayments, plus the cumulative amortization using the effective interest method of any
difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying
amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. Interest income is calculated by applying the effective interest rate to the
gross carrying amount of a financial asset.

b) Debt instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments whose objective is achieved by both collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding are measured subsequently at fair value through other
comprehensive income (FVTOCI).
When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other operating gains / (losses). Interest income from these financial
assets is included in other operating income using the effective interest rate method. Impairment expenses are
presented as a separate line item in the consolidated statement of profit or loss.

c) Debt instruments designated as at fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. A gain or loss on a debt
investment that is subsequently measured at FVTPL is recognised in consolidated statement of profit or loss and
presented net within other operating gains / (losses) in the period in which it arises.

Equity instruments
On initial recognition, the Group may make an irrevocable election (on an instrument‑by‑instrument basis) to
designate investments in equity instruments as at FVTOCI.

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected
to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to consolidated statement of profit or loss following the derecognition of the investment.
Dividends from such investments continue to be recognised in consolidated statement of profit or loss as other
operating income when the Group’s right to receive payments is established. Changes in the fair value of financial
assets at FVTPL are recognised in other gains / (losses) in the consolidated statement of profit or loss as applicable.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported
separately from other changes in fair value.

105

Impairment of financial assets
The Group assesses on a forward looking basis the expected credit losses (ECL) associated with its debt instruments
carried at amortised cost and FVTOCI. The impairment methodology applied depends on whether there has been
a significant increase in credit risk.

For trade debts, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the trade debts, using the simplified approach. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit
loss experience, adjusted for factors that are specific to the debtors and other direction of conditions at the reporting
date, including time value of money where appropriate.

For all other financial assets general 3 stage approach is used i.e. to measure ECL through loss allowance at an
amount equal to 12 month ECL if credit risk on a financial instrument or a group of financial instruments has not
increased significantly since initial recognition.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the
magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default
and loss given default is based on historical data adjusted by forward looking information as described above.
As for the exposure at default for financial assets, this is represented by the assets’ gross carrying amount at the
reporting date.

The Group recognises an impairment gain or loss in the consolidated statement of profit or loss for all financial
instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except
for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognised in the
consolidated statement of other comprehensive income and accumulated in the investment revaluation reserve,
and does not reduce the carrying amount of the financial asset in the consolidated statement of financial position.

4.11.2 Financial liabilities
Classification, initial recognition and subsequent measurement

The Group classifies its financial liabilities in the following categories:

1- At fair value through profit or loss; and
2- Amortised cost.
The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are
recognised initially at fair value and, in the case of other financial liabilities, also include directly attributable
transaction costs. The subsequent measurement of financial liabilities depends on their classification as follows:

a) Fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as being at fair value through profit or loss.

b) Other financial liabilities
After initial recognition, other financial liabilities which are interest bearing subsequently measured at amortised
cost, using the effective interest rate method. Gain and losses are recognised in the consolidated statement of profit
or loss, when the liabilities are derecognised as well as through effective interest rate amortisation process.
Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.

106
4.12 Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the consolidated financial statements only
when there is a legally enforceable right to set off the recognised amount and the Group intends either to settle on
a net basis or to realize the assets and to settle the liabilities simultaneously.

4.13 Stores and spares
Stores and spares are valued at moving average cost, while items considered obsolete are carried at nil value. Items
in transit are valued at cost comprising invoice value plus other charges paid thereon.

4.14 Stock in trade
All stocks are valued at the lower of cost and net realizable value. Cost in relation to raw and packing materials,
except for those in transit, signifies moving average cost and that relating to mid products and finished goods,
monthly average cost comprising cost of direct materials, labour and appropriate manufacturing overheads based
on normal operating capacity. Materials in transit are stated at cost comprising invoice value plus other charges
incurred thereon. Net realizable value signifies the estimated selling price in the ordinary course of business less
costs necessarily to be incurred in order to make the sale. Provision is made in the consolidated financial statements
for obsolete and slow moving stock in trade based on management estimate.

4.15 Trade debts and other receivables
These are recognised and carried at the original invoice amounts, being the fair value and subsequently measured
at amortised cost using the effective interest rate method, less loss allowance, if any. For measurement of loss
allowance for trade debts, the Group applies IFRS 9 simplified approach to measure the expected credit losses.
4.16 Cash and cash equivalents

Cash and bank balances are carried in the consolidated statement of financial position at amortised cost. For the
purpose of cash flow statement, cash and cash equivalents comprises of cash in hand, bank balances and short
term highly liquid investments that are readily convertible to known amounts of cash.

4.17 Borrowings and their costs
Borrowings are initially recorded at the proceeds received. They are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the profit
and loss account over the period of the borrowings using the 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. All other borrowing costs are
recognised in the consolidated statement of profit or loss in the period in which they are incurred.

4.18 Trade and other payables
Liabilities for creditors and other amounts payable are carried at cost, which is the fair value of the consideration to
be paid in the future for the goods and / or services received, whether or not billed to the Group.

4.19 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect
the current best estimate.

The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Future
operating losses are not provided for in consolidated financial statements.

107

4.20 Derivative financial instruments
These are initially recorded at cost on the date a derivative contract is entered into and are remeasured to fair
value at subsequent reporting dates. The method of recognizing the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group documents at the inception of the transaction the relationship between the hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The
Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in
the consolidated statement of profit or loss. Amounts accumulated in equity are recognised in the consolidated
statement of profit or loss in the periods when the hedged item will affect profit or loss.

4.21 Impairment of non financial assets
Assets that have an indefinite useful life, for example land, are not subject to depreciation / amortization and are
tested annually for impairment. Assets that are subject to depreciation / amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units). Non financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting date.

A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in the consolidated statement of profit or loss.

4.22 Revenue recognition
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when or as
performance obligations are satisfied by transferring control of promised goods or services to a customer and
control either transfers overtime or at a point in time. Revenue is measured at fair value of the consideration received
or receivable, excluding discounts, rebates and government levies. Scrap sales and miscellaneous receipts are
recognised on realized amounts.
Revenue from sale of goods is recognised at the point in time when control of the fertilizers products and chemical
is transferred to the customer, generally on delivery of the goods.

Government subsidy on sale of fertilizer is recognised when the right to receive such subsidy has been established
and the underlying conditions are met.
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Revenue from sale of Certified Emission Reductions (CERs) is recognised on the satisfaction of performance
obligation i.e. generation of the Emission Reductions when a firm commitment for sale of CERs exists with a buyer.
Return on deposits is accrued on a time proportion basis by reference to the principal outstanding and the applicable
rate of return. Interest income is recognised on accrual basis.
4.23 Foreign currency transactions and translation

a) Functional and presentation currency
Items included in the consolidated financial statements of the Group are measured using the currency of the
primary economic environment in which the Group operates (the functional currency). The financial statements are
presented in Pak Rupees, which is the Group’s functional and presentation currency.

b) Transactions and balances
Foreign currency transactions are translated into Pak Rupees using the exchange rates prevailing at the dates of the
transactions. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of
exchange prevailing at the reporting date. Foreign exchange gain and losses on retranslation are recognised in the
consolidated statement of profit or loss. All non monetary items are translated into Pak Rupees at exchange rates
prevailing on the date of transaction or on the date when fair values are determined.

4.24 Dividend
Dividend distribution to the Group’s members is recognised as a liability in the reporting period in which dividends
are declared.
4.25 Earnings per share

The Group presents basic and diluted earnings per share (EPS) for its ordinary shares. Basic EPS is calculated by
dividing the consolidated profit by weighted average number of shares outstanding during the period. Diluted EPS
is determined by adjusting for the effects of all dilutive potential ordinary shares.
5 Issued, subscribed and paid up share capital

2022 2021 2022 2021
(Number of shares) (Rupees in thousand)
2,000,000,000 2,000,000,000 Ordinary shares of Rs 10 each

fully paid in cash 20,000,000 20,000,000
Ordinary shares of Rs 10 each
issued on conversion of fully paid
100,000,000 100,000,000 preference shares @ Rs 20 each 1,000,000 1,000,000

2,100,000,000 2,100,000,000 21,000,000 21,000,000
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5.1 Ordinary shares of the Holding Company held by associates at year end are as follows:
2022 2021
(Number of shares)

Arif Habib Corporation Limited 319,000,206 319,000,206
Arif Habib Equity (Private) Limited 19,409,500 19,409,500
Fatima Holding Limited 28,000,000 66,969,373
Fazal Cloth Mills Limited 69,114,031 69,114,031
Reliance Weaving Mills Limited 2,625,166 2,625,166
Farrukh Trading Company Limited 160,430,261 160,430,261
Fatima Management Company Limited 160,450,633 160,430,261
Fatima Trading Company (Private) Limited 147,706,263 97,462,890
Reliance Commodities (Private) Limited 500,000 500,000
907,236,060 895,941,688

5.2 All ordinary shares rank equally with regard to the Group`s residual assets. Holders of the shares are entitled to
dividends from time to time and are entitled to one vote per share at the general meetings of the Holding Company.
2022 2021
6 Reserves
Capital reserve:
Share premium 6.1 1,790,000 1,790,000
Revenue reserve:
Unappropriated profit 84,360,720 77,593,347
Post retirement benefit obligation reserve 6.2 (239,752) (120,083)
85,910,968 79,263,264

6.1 This reserve can be utilized by the Holding Company only for the purposes specified in section 81 of the
Companies Act, 2017.

6.2 This represents cumulative actuarial adjustments in measurement of employee retirement benefits.
2022 2021
7 Long term finances

Secured loans from banking companies / financial institutions 7.2 10,792,882 7,064,604
Less: Current portion 2,346,431 1,892,328
8,446,451 5,172,276

7.1 Movement of long term finances
Opening balance 7,064,604 8,917,289
Disbursements during the year 5,622,520 3,920,362
Repayments during the year (1,929,341) (5,857,386)
Accreditation of loan under SBP Islamic Refinance Scheme 35,099 87,651
Exchange gain on translation of foreign currency loan – (3,312)
Closing balance 10,792,882 7,064,604

110
2022 2021

7.2 Secured loans from banking companies / financial institutions
These are composed of:
BAHL Term Loan 7.2.1 – 192,714
BOP Term Loan 7.2.2 750,000 1,500,000
ABL Term Loan - II 7.2.3 500,000 750,000
SBP LTF - Faysal Bank Limited 7.2.4 – 344,199
SBP LTF - The Bank of Punjab 7.2.5 – 357,339
ABL Term Loan - III 7.2.6 1,000,000 1,000,000
Meezan Bank Limited - Diminishing Musharakah 7.2.7 2,000,000 2,000,000
SBP Temporary Economic Refinance Facility (TERF) 1 7.2.8 549,181 372,235
Faysal Bank Limited - Diminishing Musharakah 7.2.11 2,000,000 –
Pak Kuwait Investment Company Limited - Term Finance 7.2.12 1,500,000 –
NBP - Demand Finance 7.2.13 1,362,469 –
10,792,882 7,064,604
8,446,451 5,172,276

7.2.1 BAHL Term Loan
This facility was obtained from Bank Al Habib Limited, for an amount of Rs 1,300 million for purchase of Low
Pressure Boosting Compressor.

The facility carried markup at the rate of 6 months KIBOR plus 1.10% per annum. The effective rate of
markup charged during the year was 12.57% (2021: 8.25% to 8.77%) per annum.

The facility was secured by pari passu charge over plant and machinery of the Group amounting to
Rs 1,733.34 million.

The loan was repayable in three years in six semi annual equal installments starting from October 29, 2019.
Last repayment was due and made on April 28, 2022. During the year, the Group has paid installments
aggregating to Rs 192.71 million (2021: Rs 385.43 million).

7.2.2 BOP Term Loan
This facility has been obtained from The Bank of Punjab, for an amount of Rs 3,000 million to finance /
reimburse BMR.

The facility carries markup at the rate of 6 months KIBOR plus 0.70% per annum. The effective rate of markup
charged during the year ranged from 8.29% % to 16.53% (2021: 7.81% to 8.31%) per annum.

The facility is secured by pari passu charge over plant and machinery of the Group amounting to
Rs 4,000 million.
The loan is repayable in four years in eight semi annual equal installments starting from January 31, 2020.
Last repayment is due on July 31, 2023. During the year, the Group has paid installments amounting to
Rs 750 million (2021: Rs 750 million).

111

7.2.3 ABL Term Loan - II
This facility has been obtained from Allied Bank Limited, for an amount of Rs 1,000 million to finance CAPEX
in the Group.

charged during the year ranged from 8.81% to 16.81% (2021: 8.01% to 8.85%) per annum.

Rs 1,334 million.
The loan is repayable in five years with one year grace period in eight semi annual equal installments starting
from March 25, 2021. Last repayment is due on September 25, 2024. During the year, the Group has paid
installments aggregating to Rs 250 million (2021: Rs 250 million).

7.2.4 SBP LTF - Faysal Bank Limited
This facility was obtained from Faysal Bank Limited for an amount of Rs 718.11 million for disbursement of
salaries and wages for the month of April, May and June 2020, in line with SBP Islamic Refinance Scheme.

The facility carried markup at the rate of SBP base rate + 1% per annum. The effective interest rate was
calculated at 8.22% and the loan was recognised at the present value.

The facility was secured by pari passu charge over Plant and Machinery of the Group amounting to
Rs 1,000 million.
The loan was repayable in two and half years including six months grace period in eight quarterly installments.
Last repayment was due and made on December 30, 2022. During the year, the Group paid installments

7.2.5 SBP LTF - The Bank of Punjab
This facility was obtained from The Bank of Punjab for an amount of Rs 744.33 million for disbursement of
salaries and wages for the month of July, August and September 2020, in line with SBP Islamic Refinance
Scheme.
The facility carried markup at the rate of SBP base rate + 0.8% per annum. The effective interest rate was

The facility was secured by pari passu charge over plant and machinery of the Group amounting to
Rs 1,000 million.
Last repayment was due and made on October 31, 2022. During the year, the Group paid installments

7.2.6 ABL Term Loan - III
This facility has been obtained from Allied Bank Limited for an amount of Rs 1,000 million to finance CAPEX
in the Group.

charged during the year at 12.26% to 16.15% per annum (2021: 8.96%).

The facility is secured by pari passu charge over Plant and Machinery of the Group amounting to
Rs 1,334 million.
The loan is repayable in five years including one year grace period in eight half yearly installments. Last
repayment is due on September 30, 2026.
112
7.2.7 Meezan Bank Limited - Diminishing Musharakah
This facility has been obtained from Meezan Bank Limited for an amount of Rs 2,000 million to refinance
CAPEX already incurred by the Group.


Rs 2,667 million.

7.2.8 SBP Temporary Economic Refinance Facility (TERF) 1
This facility has been obtained from Askari Bank Limited for an amount of Rs 549.19 million out of total limit
of Rs 550 million, under SBP TERF Scheme.

The facility carries markup at the rate of 3.00% per annum (SBP base rate plus 2.00%) / 6 month KIBOR plus
2.00% per annum. The effective rate of markup charged during the year ranged from 3.00% to 17.35% per
annum (2021: 3.00% to 13.53%).

Rs 733.33 million.
The loan is repayable in ten years including two years grace period in sixteen semi annual installments. Last
repayment is due on March 31, 2031.

This facility has been obtained from National Bank of Pakistan for an amount of Rs 631.23 million out of total
limit of Rs 1,000 million, under SBP TERF Scheme.

annum (2021: 9.15% to 9.28%).

Rs. 1,333.34 million.
repayment is due on June 21, 2031.

This facility has been obtained from Bank Al Habib Limited for an amount of Rs 500 million out of total limit
of Rs. 500 million, under SBP TERF Scheme.

annum (2021: 11.39% to 11.40%).

Rs 666.67 million.

repayment is due on February 15, 2032.
113

7.2.11 Faysal Bank Limited - Diminishing Musharakah
This facility has been obtained during the year from Faysal Bank Limited for an amount of Rs 2,000 million to
refinance BMR / CAPEX.

charged during the year ranged from 16.39% to 17.76% per annum.

Rs. 2,667 million.


7.2.12 Pak Kuwait Investment Company Limited - Term Finance
This facility has been obtained during the year from Pakistan Kuwait Investment Company (Private) Limited
for an amount of Rs 1,500 million to refinance CAPEX.


Rs 2,000 million.

The loan is repayable in five years including one year grace period in eight semi annual installments. Last
repayment is due on May 19, 2027.

7.2.13 NBP - Demand Finance
This facility has been obtained during the year from National Bank of Pakistan for an amount of
Rs 1,362.47 million to finance import & procurement of plant, machinery & spare parts for BMR / CAPEX.

charged during the year at 12.96% to 16.85% per annum.


7.3 The aggregate unavailed long term financing facilities amounts to nil (2021: Rs 1,129.63 million).
2022 2021

8 Lease liabilities
Interest on lease liabilities 152,094 161,193
Payments made during the year (270,149) (730,690)
Closing balance 1,694,243 1,812,298
Less: Current portion of lease liabilities 541,363 375,273
1,152,880 1,437,025
114
2022 2021
9 Deferred taxation
The balance of deferred tax is in respect of the following:
Taxable temporary differences:
Accelerated tax depreciation 23,022,908 20,174,542
Gas Infrastructure Development Cess (GIDC) 77,825 147,897
Investment in associates 4,648 16,111
23,105,381 20,338,550
Deductible temporary differences:
Remeasurement of defined benefit obligation (136,718) (64,498)
Loss allowance on subsidy receivable from GoP (191,297) –
Unrealised loss on equity investments (97,010) –
(425,025) (64,498)
22,680,356 20,274,052

9.1 Movement in temporary differences for the year is as follows:
Balance as at Recognised Recognised in Balance as at

December 31, in profit other comprehensive December 31,
2021 or loss income 2022

Accelerated tax depreciation 20,174,542 2,848,366 – 23,022,908
Gas Infrastructure Development Cess (GIDC) 147,897 (70,072) – 77,825
Investments in associates 16,111 (10,304) (1,159) 4,648
20,338,550 2,767,990 (1,159) 23,105,381
Remeasurement of defined benefit obligation (64,498) – (72,220) (136,718)
Loss allowance on subsidy receivable from GoP – (191,297) – (191,297)
Unrealised loss on equity investments – (97,010) – (97,010)
(64,498) (288,307) (72,220) (425,025)
20,274,052 2,479,683 (73,379) 22,680,356

2022 2021
10 Deferred liabilities
Employee retirement benefits 10.1 1,583,718 955,419
Provision for Gas Infrastructure Development Cess (GIDC) 10.2 1,099,730 2,292,826
2,683,448 3,248,245

Gratuity 10.1.1 1,462,253 877,217
Accumulating compensated absences 10.1.2 121,465 78,202
1,583,718 955,419
115

2022 2021
10.1.1 Gratuity
a) Amount recognised in the statement of financial position
Present value of defined benefit obligations (f) 1,943,615 1,011,303
Fair value of plan assets (g) (481,362) (134,086)
Net liability at the end of the year 1,462,253 877,217

b) Movement in net liability
Net liability at the beginning of the year 877,217 681,870
Charge for the year (c) 265,146 163,305
Transfer from associated companies 244,166 –
Benefits paid during the year (116,165) (50,207)
Charged to other comprehensive income (e) 191,889 82,249

c) Charge for the year
Current service cost 150,979 99,443
Past service cost 5,937 –
Net interest cost 108,230 63,862
265,146 163,305

d) Charge for the year has been allocated as follows:
Cost of sales 196,150 127,050
Administrative expenses 51,565 36,255
Distribution expenses 17,431 –
265,146 163,305

e) Total remeasurement chargeable to other comprehensive income
Remeasurement of plan obligation:
Actuarial gains from changes in financial assumptions 9,562 3,930
Experience adjustments 161,636 69,715
Remeasurements of fair value of plan assets 20,691 8,604
191,889 82,249

f) Movement in the present value of defined benefit obligations
Defined benefit obligations at beginning of the year 1,011,303 819,879
Interest cost 141,657 76,932
Benefits due but not paid (3,447) (469)
Benefit paid during the year (99,820) (58,128)
Remeasurement of plan obligation 171,198 73,646
Defined benefit obligations at end of the year 1,943,615 1,011,303
116
2022 2021
g) Movement in the fair value of plan assets

Fair value at beginning of the year (134,086) (138,009)
Transferred from associated companies (321,173) –
Contributions (70,860) (12,629)
Interest income on plan assets (33,427) (13,070)
Return on plan assets excluding interest income 20,691 8,604
Benefits due but not paid – 469
Benefits paid 57,493 20,549
Fair value at end of the year (481,362) (134,086)

h) Plan assets comprise of:
Deposit with banks 391,687 46,279
Mutual funds 89,675 70,715
Investment in TDRs – 17,561
Payables – (469)
481,362 134,086
2022 2021

i) The principal assumptions used in the actuarial
valuation are as follows:
Discount rate for interest cost 11.75% 9.75%
Discount rate for year end obligation 14.50% 11.75%
Salary increase used for year end obligation 14.50% 11.75%
Retirement assumption 60 years 60 years

Impact on defined benefit obligation
Change in Increase in Decrease in

assumption assumption assumption
% age (Rupees in thousand)

j) Sensitivity analysis
Discount rate 1% (151,677) 168,249
Salary growth rate 1% 170,640 (156,443)

k) The expected contribution to defined benefit obligation for the year ending December 31, 2023 will be
Rs 419.57 million.
2022 2021
10.1.2 Accumulating compensated absences

Present value of defined benefit obligations (e) 121,465 78,202
Net liability at the end of the year 121,465 78,202
117

2022 2021

Transferred from associated companies 30,346 –
Charge for the year (c) 27,825 (34,635)

Past service cost (3,284) –
Loss / (gain) arising on plan settlements 9,794 (41,764)
Experience adjustment 6,668 (16,537)
27,825 (34,635)

Cost of sales 24,961 (21,574)
Administrative expenses 2,372 (13,061)
Distribution expenses 492 –
27,825 (34,635)

e) Movement in the present value of obligation
Obligation at beginning of the year 78,202 304,960
Gain on plan assets – (41,764)
Actuarial loss from changes in demographic assumptions 82 –
Actuarial loss from changes in financial assumptions 10,885 –
Defined benefit obligations at end of the year 121,465 78,202
2022 2021
f) The principal assumptions used in the actuarial

118


g) Sensitivity analysis
Discount rate 1% (5,992) 8,950
2022 2021

10.2 Provision for Gas Infrastructure
Development Cess (GIDC)
Provision for GIDC 10.2.1 & 10.2.2 5,633,182 5,359,025
Less: Current portion of provision for GIDC 11 4,533,452 3,066,199
1,099,730 2,292,826

10.2.1 Movement of provision for Gas Infrastructure
Unwinding of provision for GIDC 274,157 367,524
5,633,182 5,359,025

10.2.2 The Group has accrued Rs 5,869.01 million (2021: Rs 5,869.01 million) on account of Gas Infrastructure
Development Cess (GIDC). On August 13, 2020 the Supreme Court of Pakistan (SCP) through its order
declared GIDC Act as intra vires to the constitution and directed all the industrial and commercial entities to
pay the Cess that have become due up to July 31, 2020. However, as a concession, the same was allowed
to be recovered in twenty four equal monthly installments starting from August 01, 2020.
Subsequently, SCP also dismissed all review petitions on November 02, 2020, against the gas consumers
including the Holding Company and stated that the Government of Pakistan is agreeable to recover the
arrears in forty eight monthly installments instead of twenty four equal monthly installments.

Although, the Holding Company has filed a suit for declaration and injunction in the High Court of Sindh
and obtained a stay on October 06, 2020 against collection / recovery of GIDC by Mari Petroleum Company
Limited on fuel stock on account of issues of computation of the liability. On a prudent basis, the Group has
continued to recognise the provision against GIDC on fuel stock.

Group’s Sadiqabad Plant, entitled to receive feed stock at fixed price inclusive of all taxes, duties, levies, fees
and charges under Sovereign Commitment from Government of Pakistan pursuant to Fertilizer Policy 2001,
has not booked GIDC on feed stock.

The Holding Company has also filed a suit for declaration and permanent injunction in the High Court of
Sindh on these grounds on September 29, 2020 and obtained a stay on October 06, 2020 against collection
/ recovery of GIDC on feed stock.

The management has applied the requirements of IAS 37 and “Guidance on Accounting of GIDC” issued by
the Institute of Chartered Accountants of Pakistan (ICAP) for recognition, measurement and presentation of
the provision for GIDC and had recognised a temporary gain on remeasurement of such provision amounting
to Rs 877.51 million in 2020. During the period, this temporary gain has been reversed by Rs 274.16 million
accumulating to Rs 641.68 million as at reporting date, in accordance with the requirements of IFRS and the
guidance referred above.
119

2022 2021

11 Trade and other payables
Creditors 26,293,613 12,972,742
Current portion of provision for GIDC 10.2 4,533,452 3,066,199
Contract liabilities 11.1 8,376,123 11,039,853
Accrued liabilities 8,909,852 6,112,717
Withholding tax 122,187 69,199
Workers profit participation fund 11.2 5,450,182 4,260,908
Workers welfare fund 11.3 1,350,752 757,668
Retention money payable 64,862 64,954
Provident fund payable 35,571 19,232
Others 235,243 105,946
55,371,837 38,469,418

11.1 Contract liabilities as at the beginning of the year, aggregating to Rs 11,031.79 million (2021: Rs 6,913.10 million),
have been recognised as revenue upon meeting the performance obligations.

2022 2021
11.2 Workers’ profit participation fund

Balance at January 01 4,260,908 2,991,057
Charge for the year 33 1,650,714 1,518,911
Balance at December 31 5,450,182 4,260,908

11.3 Workers’ welfare fund
Balance at January 01 757,668 391,409
Charge for the year 702,005 739,805
Reversal of provision during the year (108,921) (65,598)
Net charge for the year 33 593,084 674,207
Payments made during the year – (307,948)
Balance at December 31 1,350,752 757,668

12 Accrued finance cost
On long term finances 344,853 160,323
On short term finances 370,154 146,861
715,007 307,184
13 Short term finances

Secured loans from banking companies
Cash finance 13.1 – 850,000
Finance against imported merchandise 13.2 8,142,058 3,915,307
8,142,058 4,765,307
Running finance 13.3 4,741,460 1,700,465
12,883,518 6,465,772

120
13.1 These facilities have been obtained from various banks for working capital requirements, and are secured
by pledge of raw material and finished goods. The facilities carry markup ranging from 13.78% to 17.05%
(2021: 7.90% to 11.09%) per annum.

13.2 These facilities have been obtained from various banks against imported merchandise. These facilities carry
markup ranging from 8.30% to 17.51% (2021: 7.61% to 10.47%) per annum.
13.3 These facilities have been obtained from various banks for working capital requirements, and are secured
by pari passu charge of Rs 22,342.01 million (2021: Rs 19,468.68 million) on present and future current
assets and by personal guarantees of sponsoring directors. These facilities carry markup ranging from
8.87% to 18.31% (2021: 7.55% to 10.52%) per annum.
13.4 The aggregate unavailed short term borrowing facilities amount to Rs 19,608.54 million (2021: Rs 19,472.97
million).
2022 2021
14 Deferred government grant

Opening balance of government grant 61,440 122,966
Amortization of deferred government grant (61,440) (61,526)
– 61,440
Less: Current portion of deferred government grant – 61,440
– –

14.1 This represents deferred government grant in respect of term finance facilities obtained under SBP Salary
Refinance Scheme as disclosed in note 7.2.4 and 7.2.5 to the consolidated financial statements. These
facilities carried markup at subsidised rates, as specified by SBP. These loans had been recognised at their
fair value which was the present value of the loan proceeds received and discounted at the market interest
rates for similar instruments. The differential between the fair value and the present value was recognised
as deferred government grant, which has been amortised over the term of the respective facilities at the
effective interest rate.
15 Contingencies and commitments

15.1 Contingencies

(i) Till final decision in the matter, the Honorable Lahore High Court (the Court) has suspended the operation
of the impugned order of the Commissioner Inland Revenue, Multan, who rejected the Holding Company’s
application under section 65 of the Sales Tax Act, 1990 regarding exemption of sales tax estimating Rs 690
million inadvertently short levied / paid on its fertilizer product, Calcium Ammonium Nitrate for the period from
April 18, 2011 to December 31, 2011.
The court had ordered the Holding Company to file a fresh application under the said section after declaring
the earlier rejection of the Holding Company’s application filed with FBR as unlawful and ultra vires.

(ii) The Holding Company has filed an appeal before the ATIR dated August 05, 2020 against the order passed
by the CIR(A) whereby the order passed under section 11 of the of Sales Tax Act, 1990 (STA) by the assessing
officer amounting to Rs 501 million was set aside. CIR(A), through its order dated June 8, 2020, set aside the
impugned order instead of ‘deleting / annulling’ the same and resultantly the Holding Company assailed the
same before ATIR. The assessing officer had raised the demand by charging sales tax on advances received
from customers.

121

(iii) The Holding Company’s appeal filed with CIR(A) against the order amounting to Rs 7,745 million has been
succeeded and the order has been annulled. CIR(A) through order dated February 19, 2022 decided the
case in the favour of the Holding Company on legal touchstone thereby quashing the selection of case for
audit u/s 25 by placing reliance on the judgment of LHC in case of M/S Hyundai Nishat Motors (Pvt.) Ltd vs
FBR vide WP 25793/2021. The tax department has also filed an appeal before the ATIR dated June 11, 2022
against the order of CIR(A) which is pending for adjudication as of date. Initially, the demand was raised
against the Holding Company by selecting it for the sales tax audit u/s 25 of STA for the tax periods from July
2016 to June 2017.
(iv) The Holding Company has filed an appeal before the CIR (A) dated July 13, 2022 against the order u/s
11 of the STA. The assessing officer raised a demand of Rs 122 Million against the Holding Company
by disallowing the admissibility of sales tax on various items claimed during July 2020 to June 2021 and
invoking the provisions of section 8 of STA.

(v) The Holding Company’s appeal filed with CIR(A) against the impugned order has not been succeeded.
Resultantly, the Holding Company has filed an appeal before the ATIR in October 2022 against the adverse order
of CIR(A) which is pending for adjudication as of date. The assessing officer had raised the impugned demand of
Rs 4,272 million against the Holding Company by disallowing the admissibility of sales tax on various items
claimed during January 2021 to November 2021 and invoking the provisions of section 8 of STA.

(vi) The Holding Company has filed a constitutional petition (CPLA) before Supreme Court of Pakistan dated
January 17, 2023 against the adverse order of LHC, through which, the rectification order of ATIR had been
declared void ab initio on legal infirmity. Resultantly, the original order passed by the assessing officer stood
reinstated wherein, the assessing officer alleged that the Holding Company had short paid sales tax by
suppression of its production during June 2014 to September 2014. Total demand raised was Rs 628 million.

(vii) The Department has filed an appeal in the Appellate Tribunal Inland Revenue (ATIR) in September 2019
against the order passed by the Commissioner Inland Revenue (‘CIR (A)’), whereby the order passed under
section 122(5) of the Income Tax Ordinance, 2001 by the Deputy Commissioner Inland Revenue (DCIR)
Multan amounting to Rs 1,055 million was annulled. The DCIR had declared the Holding Company’s trial run
production / gain as ‘Commercial production’ thereby imposing consequential income tax towards taxable
income for Tax Year 2011.

(viii) The Holding Company has preferred an appeal before the ATIR in June 2021 against the order passed by the
CIR(A), whereby the adverse order passed u/s 122(5A) of the Income Tax Ordinance, 2001 by the assessing officer
amounting to Rs 1,577 million was confirmed. The assessing officer disallowed and added back various admissible
deductions and credits claimed by the Holding Company towards its taxable income for Tax Year 2016.

(ix) The Department has filed an appeal in the ATIR in May 2019 against the order passed by the CIR(A)
whereby the order passed under section 122(5A) of the Income Tax Ordinance passed by the Additional
Commissioner Inland Revenue (‘ACIR’) Multan amounting to Rs 1,592 million was annulled. The ACIR had
disallowed and added back various admissible deductions claimed by the Holding Company towards its
taxable income for Tax Year 2017.

(x) The Holding Company has preferred an appeal before the ATIR dated August 05, 2021 against the order
passed by the CIR(A), whereby the adverse order passed under section 122(5A) of the Income Tax Ordinance,
2001 by the assessing officer amounting to Rs 930 million was confirmed. The assessing officer earlier raised
the alleged demand by disallowing tax credits and adding back various admissible deductions of the Holding
Company towards its taxable income thereby imposing consequential income tax for Tax Year 2018.
(xi) The Holding Company has filed an Intra Court Appeal at the Honorable Lahore High Court (‘LHC’) in April 2022
against dismissal of the petition challenging levy of Alternative Corporate Tax (ACT) dated March 28, 2022. ACT
was imposed at the rate of 17% of ‘accounting profit before tax’ through Finance Act 2014, by inserting Section
113C in the Income Tax Ordinance, 2001. The Holding Company has challenged the levy of ACT for Tax years
2015 and 2014, on the grounds that it deprived the Holding Company of certain rights already accrued to it.
Such appeal regarding challenging the vires of ACT is still pending for adjudication at LHC.
122
However, the assessing officer through orders dated May 17, 2022 and December 27, 2022 passed u/s
122(5A) of the Income Tax Ordinance 2001, raised alleged demands of Rs 2,031 million and Rs 1,580
million on account of ACT matters pertaining to tax years 2015 and 2014 respectively. The Holding
Company contested the issue before CIR(A) in June 2022 against such adverse orders and has also paid
the outstanding tax demands to the extent of ACT involved therein. Moreover, CIR(A) through order dated
February 27, 2023, decided the appeal in the favour of Holding Company for Tax Year 2015.

(xii) The Holding Company has filed appeal with the Customs Appellate Tribunal, Lahore against the following
three cases decided against the Holding Company by the Collector of Customs (Adjudication), Faisalabad.
Earlier these cases were remanded back to Collector of Customs (Adjudication), Faisalabad for rehearing
the case by the Customs Appellate Tribunal, Lahore:
– Alleged irregular claim of exemption under SRO 575 on import of 20 consignments of seamless
pipes. Demand raised Rs 113.96 million.
– Alleged irregular claim of exemptions under SRO 575 on import of 7 consignments of deformed steel
bars. Demand raised Rs 150.60 million.
– Alleged irregular claim of exemptions under SRO 575 on import of 64 consignments of various items
of capital nature. The Holding Company has filed an appeal before the Custom Appellate Tribunal,
Lahore against the order passed by the Collector (Adjudication), Faisalabad in which he again raised
a demand of Rs 495.90 million. Earlier the case had been remanded back to Collector of Customs
(Adjudication), Faisalabad for re hearing by the Custom Appellate Tribunal, Lahore.
(xiii) The Customs department has filed an appeal before the Lahore High Court against of Order passed by the
Custom Appellate Tribunal which had annulled the order passed by the Collector of Customs (Adjudication),
Faisalabad, alleging that the Holding Company applied incorrect exchange rate of Rs 60.85 per USD instead of
Rs 79 per USD on import clearance of 7 consignments of deformed steel bars. Total demand raised was
Rs 17.94 million.
Based on the advice of the Holding Company’s legal counsels and tax advisor, management considers that
reasonable grounds exist that all the above appeals will succeed. Consequently, no provision has been recognised
for the above mentioned amounts.
(xiv) The Holding Company has issued Corporate Guarantee in favour of Pakarab Fertilizers Limited (an associated
undertaking) amounting to Rs 4,845 million (2021: Rs 5,271 million). The Company has secured approval of
the shareholders for the aforementioned Corporate Guarantee amounting to Rs 7,000 million.
2022 2021

15.2 Commitments in respect of:
(i) Contracts for capital expenditure 1,227,199 3,880,314
(ii) Contracts for other than capital expenditure 3,019,144 3,605,830
(iii) The amount of future payments under ijarah

rentals and short term / low value leases:
- Not later than one year 928,973 231,860
- Later than one year but not later than five years 1,269,832 144,174
2,198,805 376,034
16 Property, plant and equipment

Operating fixed assets 16.1 99,846,171 99,741,174
Capital work in progress 16.2 10,410,577 5,681,290
110,256,748 105,422,464
123

16.1 Operating fixed assets
2022

Cost Accumulated Depreciation Book value Depreciation
December Additions / December December Charge / December December rate
Note 31, 2021 (deletions) 31, 2022 31, 2021 (deletions) 31, 2022 31, 2022

(Rupees in thousand) %
Freehold land 16.1.1 2,546,706 2,090,671 4,637,377 – – – 4,637,377 –

Building on freehold land 5,933,032 7,134 5,940,166 1,797,157 237,489 2,034,646 3,905,520 4
Building on leasehold land 30,445 – 30,445 11,163 3,045 14,208 16,237 10
Plant and machinery 107,091,235 2,243,770 109,319,260 18,443,364 4,305,921 22,748,373 86,570,887 4
(15,745) (912)
Aircraft 1,567,285 – 1,567,285 287,336 78,364 365,700 1,201,585 10
Catalysts 3,179,169 57,067 3,236,236 2,869,379 103,824 2,973,203 263,033 10 - 33.33
Furniture and fixtures 125,824 52,328 177,064 80,869 11,545 91,326 85,738 10
(1,088) (1,088)
Office equipment 97,022 40,187 137,209 56,419 8,864 65,283 71,926 10
Electrical installations and appliances 1,448,688 456,087 1,902,363 924,485 117,163 1,039,236 863,127 10
(2,412) (2,412)
Computers 671,940 221,924 871,436 461,887 110,050 549,718 321,718 25
(22,428) (22,219)
Vehicles 643,045 343,626 959,291 360,416 110,454 453,112 506,179 20
(27,380) (17,758)
Right of use assets - plant and machinery 1,156,485 – 866,049 157,829 116,859 202,079 663,970 10 - 12.5
(290,436) (72,609)
Right of use assets - land and building 985,208 167,759 1,152,967 284,606 129,487 414,093 738,874 10 - 33.33
125,476,084 5,680,553 130,797,148 25,734,910 5,333,065 30,950,977 99,846,171

(359,489) (116,998)
2021

31, 2020 (deletions) 31, 2021 31, 2020 (deletions) 31, 2021 31, 2021

Freehold land 2,480,836 65,870 2,546,706 – – – 2,546,706 –

Aircraft 1,567,285 – 1,567,285 208,971 78,365 287,336 1,279,949 10
Catalysts 3,079,712 99,457 3,179,169 2,648,433 220,946 2,869,379 309,790 10 - 33.33
(4,587) (4,587)
(734) (727)
Electrical installations and appliances 1,247,387 203,040 1,448,688 840,817 85,299 924,485 524,203 10
(1,739) (1,631)
Computers 562,908 124,656 671,940 393,659 83,424 461,887 210,053 25
(15,624) (15,196)
Vehicles 425,025 218,020 643,045 303,812 56,604 360,416 282,629 20
Right of use assets - plant and machinery 1,858,971 – 1,156,485 165,381 138,799 157,829 998,656 5 - 12.5
(702,486) (146,351)
Right of use assets - land and building 992,149 – 985,208 158,975 130,321 284,606 700,602 10 - 33.33
(6,941) (4,690)
121,386,937 4,821,258 125,476,084 20,662,372 5,245,720 25,734,910 99,741,174

(732,111) (173,182)

124
16.1.1 Particulars of land in the name of the Group companies are as follows:
Descriptions Location Land Area

Free hold Land Sadiqabad, District Rahim Yar Khan 8,884 kanals
Free hold Land Chichoki Mallian, District Sheikhupura 1,776 kanals
Free hold Land Jahangirabad, District Multan 351 kanals
Free hold Land Dherki, District Ghotki, Sindh 215 kanals
Free hold Land Pie Khail, District Mianwali 5,018 kanals
Free hold Land Umer Khail, District Dera Ismail Khan 3,372 kanals
2022 2021

Civil works 468,533 175,861
Plant and machinery 3,262,113 1,882,284
Capital stores 4,343,459 1,799,228
Advances:
- Freehold land 379,986 756,240
- Plant and machinery 1,956,486 1,067,677
2,336,472 1,823,917
10,410,577 5,681,290

16.2.1 Movement of capital work in progress
Additions during the year 7,861,482 4,751,907
13,556,241 8,965,075
Less: Capitalization during the year 3,103,857 3,270,316
10,452,384 5,694,759
Less: Provision for slow moving capital stores 41,807 13,469
Closing balance 10,410,577 5,681,290

16.3 The depreciation charge for the year has
been allocated as follows:
Cost of sales 5,036,065 4,998,414
Distribution cost 11,729 8,696
5,333,065 5,245,720

125

16.4 Disposal of property, plant and equipment
Cost Accumulated Book Sale Gain / Mode of disposal

depreciation value proceeds (loss)
Items having net book value

above Rs 500,000
Plant and machinery 15,745 912 14,833 – (14,833) Company policy

Vehicles 20,790 11,168 9,622 13,647 4,025 Company policy

below Rs 500,000
Furniture and fixture 1,088 1,088 – 439 439 Company policy
Vehicles 6,590 6,590 – 3,036 3,036 Company policy
Computers 22,428 22,219 209 1,173 964 Company policy
Electrical installations and appliances 2,412 2,412 – 613 613 Company policy
2022 69,053 44,389 24,664 18,908 (5,756)
2021 22,684 22,141 543 3,430 2,887
17 Intangible assets
2022
Cost Accumulated amortization / impairment Book value Amortization
December Additions / December December Charge / Impairment / December December rate
31, 2021 (deletions) 31, 2022 31, 2021 (deletions) (reversal) 31, 2022 31, 2022

Bubber Sher brand 5,900,000 – 5,900,000 2,360,000 – – 2,360,000 3,540,000 –

Computer software 266,670 85,109 351,779 197,793 42,640 – 240,433 111,346 25
6,166,670 85,109 6,251,779 2,557,793 42,640 – 2,600,433 3,651,346

2021

Bubber Sher brand 5,900,000 – 5,900,000 – – 2,360,000 2,360,000 3,540,000 –

6,146,929 19,741 6,166,670 155,910 41,883 2,360,000 2,557,793 3,608,877

17.1 The amortization / impairment charge for the year has been allocated to administrative / other operating
expenses.
18 Investment property
2022
Cost Accumulated depreciation Book value Amortization


Freehold land 18.1 754,577 (609,014) 145,563 – – – 145,563 –
Building 22,650 – 22,650 1,888 906 2,794 19,856 4
777,227 (609,014) 168,213 1,888 906 2,794 165,419
126
2021

Freehold land 734,521 20,056 754,577 – – – 754,577 –

Building 22,650 – 22,650 982 906 1,888 20,762 4
757,171 20,056 777,227 982 906 1,888 775,339
18.1 Freehold land consists of 8,127.78 Kanals situated in District Dera Ismail Khan, Khybar Pakhtunkhwa. The
land is in possession and control of the Group and currently it is in the name of the three Directors of the
Holding Company, Mr. Fawad Ahmed Mukhtar, Mr. Fazal Ahmed Sheikh and Mr. Faisal Ahmed Mukhtar,
which will be transferred in the name of the Holding Company in due course of time.
18.2 Latest valuation of investment property was carried by an independent professional valuator on
December 24, 2022. The fair value of these investment properties is determined to be Rs 394.13 million.
2022 2021

19 Long term investments
In associates - equity method
Fatima Agri Sales & Services (Pvt) Limited 19.2 32,575 110,301
Multan Real Estate Company (Pvt) Limited 19.3 86,581 84,987
Fatima Electric Company Limited 19.4 23 23
Singfert PTE. Limited 19.5 – –
119,179 195,311
At fair value through other comprehensive income (FVTOCI)
Silk Islamic Development REIT 19.6 600,000 600,000
At amortised cost
Bank Al-Habib Limited - Term Finance Certificate 750,000 –
1,469,179 795,311

19.1 Movement in investment in associates
2022
Opening Purchased Share Share of other Closing
during of profit comprehensive
the year / (loss) income
Fatima Agri Sales & Services (Pvt) Limited 110,301 – (70,002) (7,725) 32,575
Multan Real Estate Company (Pvt) Limited 84,987 – 1,594 – 86,581
Fatima Electric Company Limited 23 – – – 23
Singfert PTE. Limited – – – – –
195,311 – (68,408) (7,725) 119,179

2021
Fatima Agri Sales & Services (Pvt) Limited 115,755 – 528 (5,982) 110,301
Multan Real Estate Company (Pvt) Limited 85,851 – (864) – 84,987
Fatima Electric Company Limited 35 – (12) – 23
201,641 – (348) (5,982) 195,311
127

19.2 This represents investment in 196,000 fully paid ordinary shares of Rs 10 each of Fatima Agri Sales &
Services (Pvt) Limited (FASS). The investment represents 49% (2021: 49%) of the total issued, subscribed
and paid up share capital of FASS.
The principal activity of FASS is to carry on business as a sellers, marketers, importers, exporters,
wholesalers, retailers and dealers in all types of agri inputs including fertilizers, micronutrients, pesticides and
insecticides, seeds, vaternity and live stock feeds and feeds supplements, fish feeds and its supplements.
The registered office of FASS is located at E-110, Khayaban-e-Jinnah, Lahore Cantt., Pakistan.
19.3 This represents investment in 858,056 fully paid ordinary shares of Rs 100 each of Multan Real Estate
Company (Pvt) Limited (MREC). The investment represents 28.37% (2021: 39.5%) of the total issued,
subscribed and paid up share capital of MREC. The main business of MREC is establishing and designing
housing and commercial schemes, to carry on business of civil engineers for construction of private and
governmental buildings and infrastructure and provision of labour and building material. The registered
office of MREC is located at 2nd floor, Trust Plaza, L.M.Q Road, Multan.
19.4 This represents investment in 14,000 fully paid ordinary shares of Rs 10 each of Fatima Electric Company
Limited (FECL). The investment represents 40% (2021: 40%) of the total issued, subscribed and paid up
share capital of FECL.
The main business of FECL is transmission, manufacture, supply, generation and distribution of electricity
and all forms of energy and power. The registered office of FECL is located at E-110, Khayaban-e-Jinnah,
Lahore Cantt., Pakistan.
19.5 This represents investment in 1 fully paid ordinary share of SGD 1 each of Singfert PTE. Limited (Singfert), a
company formed and registered in the Republic of Singapore. The investment represents 25% (2021: 25%)
of the total issued, subscribed and paid up share capital of Singfert.
Singfert is a Special Purpose Vehicle (SPV) which will be used to route equity investment in Midwest Fertilizer
Company (MFC), USA. MFC is setting up a nitrogen fertilizer project in the State of Indiana, USA.
19.6 This represents 60,000,000 units of Rs. 10 each held in a privately placed closed - end shariah compliant
apartment development REIT scheme which constitutes 20% of the total 300 million units issued
(the Investment). This REIT Scheme is managed by Arif Habib Dolmen REIT Management Company Limited.
The proportionate fair value of the investment approximates the investment made by the Group in the REIT
units as at December 31, 2022.
The Group has valued this investment on fair value basis using the assumption that as the primary asset
of REIT comprises parcels of land (Land) which have been recently purchased by the REIT, the Land has
been valued by a third party valuer, which approximates the fair value of consideration paid in respect of
purchase of such land as at December 31, 2022. Hence, based on above, the proportionate fair value of the
Investment approximates the Investment made by the Company in the REIT Units as at December 31, 2022.
2022 2021
20 Long term loan to an associated company

Long term loan to an associated company 20.1 2,999,000 2,999,000
Less: Current portion – 999,667
2,999,000 1,999,333

20.1 This represents loan of Rs 3,000 million approved in the Extra Ordinary General Meeting of the Holding
Company held on December 23, 2016 in favour of Pakarab Fertilizers Limited, an associated company. As
per the terms of the agreement, the loan was for 5 years period with two and a half years as grace period.
However in 16th annual general meeting of the Holding Company held on April 30, 2019 it was resolved that
grace and repayment period is extended for further 3 years and has been extended for further three years in
19th annual general meeting of the Holding Company held on April 29, 2022. The loan is receivable in 6 semi
annual equal installments. Interest is to be settled semi annually. The maximum amount of loan outstanding
during the year was Rs 2,999 million.
128
The loan carries mark up rate at 6 months KIBOR plus 2% per annum. Effective rate of markup charged
during the year ranged from 13.26% to 17.83% (2021: 9.47% to 13.62%).
The loan is fully secured against ranking charge on all present and future fixed assets of the associated
company excluding immovable property i.e. land and buildings and complete carbon dioxide recovery /
liquefaction plant (along with storage tank, tools, spares and accessories).
2022 2021

21 Stores and spares
Stores 986,605 495,097
Spares {including in transit: nil (2021: Rs 565.69 million)} 9,548,141 7,498,447
Catalyst and chemicals 4,513,747 3,672,827
15,048,493 11,666,371
Less: Provision for slow moving stores and spares 325,998 100,538
14,722,495 11,565,833

22 Stock in trade
Raw materials {including in transit Rs 3,676.14 million
(2021: Rs 3,871.03 million)} 6,003,367 10,558,828
Packing materials 59,893 28,981
6,063,260 10,587,809
Mid products
Ammonia 161,252 95,189
Nitric acid 19,941 22,425
Others 877 4,950
182,070 122,564
Finished goods
Own manufactured
Urea 58,834 247,278
NP 16,844,077 5,185,720
CAN 13,060 29,333
Certified emission reductions 42,810 51,981
16,958,781 5,514,312
Purchased for resale
9,283,687 2,107,096
32,487,798 18,331,781

2022 2021
23 Trade debts
Secured against bank guarantees 13,208,391 5,574,393
Unsecured - considered good 23.1 9,622,617 4,079,915
22,831,008 9,654,308

23.1 This includes Rs 9,605.80 million (2021: Rs 4,008.44 million) receivable from Pakarab Fertilizers Limited, an
associated company, on account of toll manufacturing in the normal course of business. There is no past due
debt at the reporting date. Maximum amount outstanding at any time during the year was Rs 12,347.93 million.
129

2022 2021

24 Short term loans
Reliance Commodities (Pvt) Limited 24.1 4,999,723 4,999,723
Pakarab Fertilizers Limited 24.2 3,500,000 2,000,000
8,499,723 6,999,723

24.1 This represents loan given to an associated company Reliance Commodities (Pvt) Limited, against an
approved limit of Rs 1,250 million, which was enhanced to Rs 5,000 million at the Annual General Meeting of
the Holding Company dated April 26, 2021. The loan is repayable within 30 business days notice of demand.
The markup rate on the said loan is 6 months KIBOR plus 2% per annum. Effective rate of markup charged
during the year ranged from 10.85% to 17.84% (2021: 9.41% to 10.85%). The loan is fully secured against a
ranking charge over the present and future current assets of the associated company. The maximum amount
of loan outstanding during the year was Rs 4,999.72 million.

24.2 This represents loan against aggregate approved facility of Rs 2,000 million provided to an associated
company Pakarab Fertilizers Limited, which was enhanced to Rs 5,000 million at the Extra Ordinary
General Meeting of the Holding Company dated December 27, 2022, to support functionality and business
requirements. The loan is repayable within 30 business days notice of demand. The loan is fully secured
against a ranking charge over the present and future current assets of the associated company. The markup
rate on the said loan is 6 months KIBOR plus 2% per annum. Effective rate of markup charged during the
year ranged from 10.85% to 17.84% (2021: 9.47% to 10.85%). The maximum amount of loan outstanding
during the year was Rs 3,500 million.
2022 2021

25 Advances, deposits, prepayments and other receivables
Advances - considered good
- to employees 31,818 17,710
- to suppliers 25.1 2,344,973 2,631,781
2,376,791 2,649,491
Advance against investment 25.2 2,225,796 –
Impairment against advance (2,225,796) –
– –
Margin deposits held by banks 534,618 463,595
Prepayments 1,432,901 138,624
Receivable from Government of Pakistan (GoP)
- Advance sales tax 10,482,863 9,283,706
- Subsidy receivable 1,838,075 1,838,075
Loss allowance on subsidy receivable 25.3 (579,689) (469,965)
11,741,249 10,651,816
Advance sales tax on receipts 22,774 25,131
Markup receivable 1,171,845 339,290
Current portion of long term loan to an associated company – 999,667
Others 228,959 368,143
17,509,137 15,635,757

25.1 This includes balance of Rs 295.01 million (2021: Rs 545.78 million) to Pakarab Fertilizers Limited,
Rs 127.84 million (2021: Rs 345.62 million) to Fatima Packaging Limited and Rs 326.78 million
(2021: Rs 283.14 million) to Fatima Agri Sales & Services (Pvt) Limited, which are related parties of the Group
and are in the nature of normal course of business.
130
25.2 This represents advance which the Holding Company has contributed in technology sector through funding
rounds, carrying preferential rights over other investors. Considering the global economic meltdown
and prevailing economic conditions the said contribution carries potential risk of remeasurement. The
management is assessing multiple avenues to mitigate such risk. Entire balance has been provided for by
the management during the year.
25.3 This represents loss allowance on subsidy receivable from GoP in accordance with requirement of IFRS 9.
However, management is confident of recovering the full amount from GoP.
2022 2021
26 Short term investments

Investments - FVTPL 26.1 4,067,140 2,242,710
Term deposit receipts 62,100 –
4,129,240 2,242,710

26.1 These consist of investments made in equity instruments of various listed companies.
2022 2021

27 Cash and bank balances
Cash in hand 4,603 7,415
At banks
- saving accounts 27.1 1,718,850 120,392
- current accounts 595,014 4,515,594
- term deposit receipt 292,150 2,700,000
2,610,617 7,343,401

27.1 The balances in saving accounts carry markup ranging from 8.25% to 15% (2021: 5.50% to 8.50%)
per annum.
2022 2021

28 Sales
Revenue from contracts with customers
Local sales 28.1 151,984,635 112,488,420
Export sales - Certified Emission Reductions 246,642 –
152,231,277 112,488,420

28.1 Local sales
Own manufactured 104,273,728 90,264,959
Toll manufacturing 45,924,050 19,688,180
Mid products 1,371,663 1,186,215
Purchased for resale 3,831,812 5,402,141
155,401,253 116,541,495
Less: Sales tax 1,496,733 2,488,713
Discounts 1,919,885 1,564,362
151,984,635 112,488,420
131

2022 2021
29 Cost of sales
Raw material consumed 72,699,400 33,894,924
Packing material consumed 3,491,244 2,435,781
Salaries, wages and other benefits 29.1 8,112,904 6,035,077
Fuel and power 10,453,028 7,705,650
Chemicals and catalyst consumed 3,321,900 2,177,509
Stores and spares consumed 4,345,289 2,560,802
Depreciation 16.3 5,036,065 4,998,414
Technical assistance 523,118 477,832
Repair and maintenance 6,152,332 1,724,118
Insurance 1,150,277 841,210
Travelling and conveyance 284,154 155,026
Rent, rates and taxes 697,410 386,755
Vehicle running and maintenance 254,402 137,654
Others 277,704 147,582
Subsidy on RLNG released by GoP to SNGPL 29.2 (7,892,654) (1,532,564)
Manufacturing cost 108,906,573 62,145,770
Opening stock of mid products 122,564 311,053
Closing stock of mid products (182,070) (122,564)
Cost of goods manufactured 108,847,067 62,334,259
Opening stock of finished goods 5,514,312 8,373,200
Closing stock of finished goods (16,958,781) (5,514,312)
Cost of sales - own manufactured 97,402,598 65,193,147
Cost of sales - purchased for resale 2,885,987 4,210,829
100,288,585 69,403,976

29.1 This includes charge on account of employees’ retirement benefits namely gratuity, leave encashment and
provident fund contribution amounting to Rs 357.81 million (2021: Rs 194.48 million).
29.2 This represents subsidy related to prior year, released by Government of Pakistan (GoP) to SNGPL, as the
difference between full RLNG price billed to the the Holding Company (Sheikhupura plant) by SNGPL and
the gas price capped by GoP for fertilizer plants operating on RLNG.
2022 2021
30 Distribution cost
Salaries, wages and other benefits 935,695 248,087
Fee for services 30.1 617,105 998,240
Rent, rates and taxes 30.2 470,632 333,020
Advertisement and sales promotion 910,799 481,973
Transportation and freight 4,503,050 2,854,070
Technical services to farmers 137,165 51,556
Insurance 48,686 11,948
Others 202,737 67,363
7,947,081 5,048,813

132
30.1 This amount represents fee for marketing and distribution services charged by an associated company
- Fatima Agri Sales and Services (Pvt.) Limited for the first half of the year. The Group had outsourced
its marketing and distribution function to Fatima Agri Sales and Services (Pvt.) Limited. However, the
arrangement has been cancelled on June 30, 2022 and all the employees have been transferred to the
Holding Company with effect from July 01, 2022.
30.2 This includes rental paid for low value leases amounting to Rs 374.10 million (2021: Rs 332.20 million) and
ijarah lease rentals amounting to Rs 82.08 million (2021: Nil).
2022 2021
31 Administrative expenses
Vehicles’ running and maintenance 110,760 51,588
Insurance 15,439 10,550
Communication and postage 57,658 47,280
Printing and stationery 49,090 25,270
Repair and maintenance 91,275 66,741
Fees and subscription 219,633 119,556
Entertainment 47,735 20,798
Legal and professional 595,233 74,576
Auditors’ remuneration 31.3 11,543 8,112
Utilities 53,510 35,119
Aircraft operating expenses 205,811 275,780
Depreciation on operating fixed assets 16.3 285,271 238,610
Depreciation on investment property 18 906 906
Amortization 17 42,640 41,883
Charity and donation 31.4 1,021,235 712,796
Others 311,008 94,991
5,936,088 3,899,774

31.2 This includes rental paid for short term leases aggregating to Rs 18 million (2021: Rs 20.38 million) and ijarah
lease rentals aggregating to Rs 89.98 million (2021: Rs 42.15 million).
31.3 The breakup of statutory auditors’ remuneration including non adjustable sales tax is as follows:
2022 2021

Annual audit fee 5,233 4,300
Half yearly review fee 606 578
Others 31.3.1 4,667 2,558
Out of pocket expenses 1,037 676
11,543 8,112

31.3.1 Others include special audits fee of Rs 4.17 million (2021: Rs 2.07 million).

31.4 Donations
31.4.1 Donations paid to Mian Mukhtar A. Sheikh Trust (the Trust) exceeds 10% of the Group’s total amount of
donation.
133

31.4.2 Donations include the following in which certain directors are interested:
2022 2021
Name of directors Interest in donee Name of donees (Rupees in thousand)
Mr. Fawad Ahmed Mukhtar Mian Mukhtar

Mr. Faisal Ahmed Mukhtar Trustees A. Sheikh Trust 658,514 528,000
Mr. Fazal Ahmed Sheikh
Member of the Board
of Governors of National Lahore University of
Mr. Fawad Ahmed Mukhtar Management Foundation Management 9,216 10,960
(NMF) the sponsoring Sciences (LUMS)
body of LUMS.

2022 2021
32 Finance cost
Markup on:
- long term finances 1,114,999 712,359
- short term finances 1,006,488 878,625
Bank charges and others 656,868 254,382
2,930,449 2,006,559
33 Other operating expenses

Workers’ Profit Participation Fund 11.2 1,650,714 1,518,911
Workers’ Welfare Fund 11.3 593,084 674,207
Impairment against advance 2,225,796 –
Impairment of brand 17 – 2,360,000
Loss on remeasurement of investments classified as FVTPL 815,721 117,648
Loss on sale of investments classified as FVTPL 12,609 –
Loss on transfer of investment property 79,070 –
Loss on disposal of property, plant and equipment 5,756 –
Exchange loss - net 954,202 6,211
6,336,952 4,676,977

34 Other income
Income from financial assets
Profit on loan to related parties 1,521,220 839,424
Gain on sale of investment classified as FVTPL – 30,937
Profit on short term investments and saving accounts 284,776 96,516
Dividend income 305,900 217,225
2,111,896 1,184,102

Income from non financial assets
Scrap sales 3,540 18,535
Gain on disposal of property, plant and equipment – 2,887
Gain on disposal of stores and spares 289,116 –
Others 20,548 4,665
313,204 26,087
2,425,100 1,210,189
134
2022 2021
35 Taxation
Current tax
- Current year 10,584,497 9,900,868
- Prior year 35.1 3,576,814 (947,181)
14,161,311 8,953,687
Deferred tax 2,479,683 757,140
16,640,994 9,710,827

35.1 This includes an amount of Rs 3,494.88 million pertaining to the super tax for the year 2021.
2022 2021
(%)

35.2 Tax charge reconciliation
Numerical reconciliation between the average
tax rate and the applicable tax rate:
Applicable tax rate 29.00 29.00

Tax effect of :
Income exempt from income tax or taxed at lower rate (0.06) (0.11)
Super tax adjustment 4.00 –
Prior year adjustments 11.72 (3.36)
Deferred tax adjustments 8.79 –
Deductions disallowed 0.26 7.10
Others 0.38 1.82
25.09 5.45
Average effective tax rate charged to statement of profit or loss 54.09 34.45
2022 2021

36 Earnings per share - basic and diluted
Profit attributable to ordinary shareholders (Rupees in thousand) 14,123,939 18,474,090
Weighted average number of shares (Number of shares) 2,100,000,000 2,100,000,000
Basic and diluted earnings per share (Rupees) 6.73 8.80

37 Transactions with related parties
The related parties comprise the associated undertakings, directors and other key management personnel of the
Group. Group in the normal course of business carries out transactions with various related parties. Amounts due
from and to related parties have been disclosed in the relevant notes to the consolidated financial statements.
Details of transactions with related parties during the year, other than those which have been disclosed elsewhere
in these consolidated financial statements are as follows:

135

2022 2021
Relationship with the Group Nature of transaction

Associated companies Purchase of packing material 3,175,506 2,554,662
Purchase of raw material 1,438,446 2,222,372
Purchase of catalysts – 272,373
Purchase of stores and spares 1,104,943 462,560
Sale of mid products 152,774 118,602
Lease rental and license fee 256,278 345,095
Payment against sales collection 58,806,468 33,636,365
Toll manufacturing revenue 45,924,050 19,688,180
Employees retirement benefits transferred 274,536 –
Fee for services 2,253,672 3,059,353
Miscellaneous expenses 51,828 26,740
Short term loan given 1,500,000 3,758,000
Markup income 1,521,220 839,424
Dividend paid 3,793,102 1,618,502
Markup expense – 148,429
Directors and key Remuneration including

management personnel benefits and perquisites 557,424 353,194
Dividend paid 2,709,561 688,791

Retirement benefit plans Retirement benefit expense 464,505 254,055

37.1 Following are the related parties with whom the Group had entered into transactions or have arrangements
/ agreements in place.
Name Basis of Relationship Aggregate % of

shareholding in
the Group
Fatima Agri Sales & Services (Private) Limited Associated company Nil
Pakarab Fertilizers Limited Common directorship Nil
Fatima Packaging Limited Common directorship Nil
Air One (Private) Limited Common directorship Nil
Arif Habib Corporation Limited Common directorship 15.19%
Fatima Holding Limited Common directorship 1.33%
Fazal Cloth Mills Limited Common directorship 3.29%
Reliance Weaving Mills Limited Common directorship 0.13%
Reliance Commodities (Pvt.) Limited Common directorship 0.02%
Fatima Management Company Limited Common directorship 7.64%
Arif Habib Equity (Private) Limited Common directorship 0.92%
Fatima Trading Company (Private) Limited Common directorship 7.03%
Farrukh Trading Company Limited Common directorship 7.64%

37.2 The Group considers its Chief Executive Officer, Executive Director, and Functional Heads as its key
management personnel.
136
2022 2021
Metric ton

38 Capacity and production
Urea
Designed production capacity 1,037,900 1,037,900
Actual production 1,095,084 800,634

CAN
Designed production capacity 870,000 870,000
Actual production 866,620 792,438

NP

39 Remuneration of directors and management personnel
39.1 The aggregate amount charged in the consolidated financial statements for the year for remuneration,
including certain benefits, to full time working Directors and Executives of the Group are as follows:
Chief Executive Executive Director Executives
2022 2021 2022 2021 2022 2021


Short term employee benefits
Managerial remuneration 45,617 20,355 35,603 18,957 1,381,753 875,853
Housing allowance 20,528 9,160 16,021 8,531 579,157 362,148
Utilities allowance – – – – 122,474 80,471
Conveyance and site allowance – – – – 270,173 195,052
Leave fare assistance and bonus 12,414 9,310 12,414 9,310 982,493 441,977
Others 49,751 20,910 5,323 1,189 42,426 33,999
128,310 59,735 69,361 37,987 3,378,476 1,989,500
Retirement benefits
Contribution to provident fund and gratuity – – – – 119,987 207,461
Accumulating compensated absences – – – – 6,600 –
128,310 59,735 69,361 37,987 3,505,063 2,196,961
Number of persons 1 1 1 1 573 289

39.2 Non Executive Directors were paid meeting fee aggregating to Rs 1.70 million (2021: Rs 1.70 million).

39.3 The Group also provides the Chief Executive, Executive Director and some of the Executives with Group
maintained cars.
137

2022 2021
40 Cash generated from operations

Adjustments for:
Depreciation on property, plant and equipment 16.3 5,333,065 5,245,720
Amortization of intangible assets 17 42,640 41,883
Finance cost 32 2,930,449 2,006,559
Provision for staff retirement benefits 10.1 292,971 128,670
Provision for slow moving stores and spares 253,796 74,964
Exchange gain on translation of foreign currency loan 7.1 – (3,312)
Profit on loans to associated companies 34 (1,521,220) (839,424)
Loss on investments classified as FTVPL 33 828,330 86,711
Loss allowance on subsidy receivable from GoP 25 109,724 109,721
Unwinding of provision for GIDC 10.2 274,157 367,524
Share of loss from associates 19.1 68,408 348
Profit on short term investments and saving accounts 34 (284,776) (96,516)
Impairment against advance 33 2,225,796 –
Loss on transfer of investment property 79,070 –
Loss / (gain) on disposal of property, plant and equipment 5,756 (2,887)
10,639,072 9,480,867
Operating cash flows before working capital changes 41,404,005 37,665,784
Effect on cash flow due to working capital changes:
Increase in current assets:
Stores and spares (3,382,120) (3,366,963)
Stock in trade (14,156,017) (4,800,836)
Trade debts (13,176,700) (5,203,832)
Advances, deposits, prepayments and other receivables (4,101,500) (7,111,198)
Net increase in creditors, accrued and other liabilities 15,435,166 14,244,334
(19,381,171) (6,238,495)
22,022,834 31,427,289
41 Provident fund
The following information is based on latest
unaudited financial statements of the fund:
Size of the fund 3,219,512 1,982,661
Cost of investments made 2,870,840 1,760,220
Fair value of investments 2,963,931 1,818,992
Percentage of investments made 89.17% 88.78%

41.1 The breakup of fair value of investments is as follows:
2022 2021
(Rupees in thousand) % age (Rupees in thousand) % age

Mutual funds 1,467,288 50% 1,148,752 63%
Scheduled banks 1,496,644 50% 670,240 37%
2,963,932 100% 1,818,992 100%
138
41.2 The investments out of provident fund have been made in accordance with the provisions of Section 218 of
the Companies Act, 2017 and the rules formulated for this purpose.

41.3 An amount of Rs 187.01 million (2021: Rs 123.72 million) has been contributed during the year to the
provident fund.
42 Financial risk management

42.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, other
price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program
focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the
financial performance.
Risk management is carried out by the Board of Directors (the Board) of the Holding Company. The Board
provides principles for overall risk management, as well as policies covering specific areas such as foreign
exchange risk, interest rate risk, credit risk and investment of excess liquidity. All treasury related transactions
are carried out within the parameters of these policies.

(a) Market risk
(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. Currency risk arises mainly where receivables and payables exist due
to transactions with foreign buyers and suppliers.
The Group is exposed to currency risk arising from various currency exposures, primarily with respect to
the United States Dollar (USD) and Euro (EUR). Currently, the Group’s foreign exchange risk exposure is
restricted to bank balances, the amounts receivable / payable from / to the foreign entities. The Group’s
exposure to currency risk was as follows:
2022 2021
(FCY in thousand)

Cash at banks and in hand – USD 9,692 39
Trade and other payables – USD (1,707) (1,526)
Net exposure – USD 7,985 (1,487)
Trade and other payables – EUR (841) (981)
Net exposure – EUR (841) (981)

The following significant exchange rates were applied during the year:
2022 2021

Rupees per USD
Average rate 202.79 169.74
Reporting date rate 226.90 178.67

Rupees per EUR
139

If the functional currency, at reporting date, had fluctuated by 5% against the USD and EUR with all other
variables held constant, the impact on profit after taxation for the year would have been Rs 80.4 million
(2021: Rs 23.24 million), respectively higher / lower, mainly as a result of exchange losses / gains on
translation of foreign exchange denominated financial instruments. Currency risk sensitivity to foreign
exchange movements has been calculated on a symmetric basis.

(ii) Other price risk
Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer,
or factors affecting all similar financial instruments traded in the market. The Group is also exposed to equity
price risk since there are investments in equity securities. The Group is also not exposed to commodity price
risk since it has a diverse portfolio of commodity suppliers.
Fair value sensitivity analysis - Investments through Profit or Loss

In case of 5% change in KSE 100 index on December 31, 2022, with all other variables held constant, net
profit for the year would increase / decrease by Rs 203.35 million (2021: Rs 112.14 million) as a result of
gains / losses on equity securities classified as at fair value through profit or loss.

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

The Group has no significant long-term interest bearing assets. The Group’s interest rate risk arises from
long term financing. Borrowings obtained at variable rates expose the Group to cash flow interest rate risk.
At the reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:
2022 2021

Fixed rate instruments
Term deposit receipt 354,250 2,700,000
Floating rate instruments
Financial assets
Long term loan to associated company 2,999,000 2,999,000
Cash at bank - saving accounts 1,718,850 120,392
Short term loans 8,499,723 6,999,723
Financial liabilities
Long term finance 10,792,882 7,064,604
Short term finance - secured 12,883,518 6,465,772

Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rate at the reporting date would not affect the consolidated statement of
profit or loss of the Group.

Cash flow sensitivity analysis for variable rate instruments
If the markup rate on net finance at reporting date, had fluctuated by 100 basis points with all other
(2021: Rs 24.45 million) respectively higher / lower.
140
(b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. Credit risk arises from deposits with banks and loans,
advances, deposits, prepayments and other receivables. The carrying amount of financial assets represents
the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:
2022 2021

Long term loan to an associated company 2,999,000 2,999,000
Short term loan to associated companies 8,499,723 6,999,723
Advances, deposits and other receivables 1,935,422 1,171,028
Trade debts 22,831,008 9,654,308
Bank balances 2,606,014 7,335,986
40,044,974 28,678,469

The credit quality of major financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (if available) or to historical information about counterparty default rate:

Rating 2022 2021
Short term Long term Rating Agency (Rupees in thousand)

Allied Bank Limited A-1+ AAA PACRA 610 354
Askari Bank Limited A-1+ AA+ PACRA 292,347 13,724
Bank Alfalah Limited A-1+ AA+ PACRA 76,212 566,787
Bank Al Habib Limited A-1+ AAA PACRA 49,752 747,108
Citibank N.A P-1 Aa3 Moody’s 42 46
Dubai Islamic Bank Limited A-1+ AA VIS 92 6
Faysal Bank Limited A-1+ AA PACRA 56,613 42,866
Habib Bank Limited A-1+ AAA VIS 502,395 524,100
Habib Metropolitan Bank Limited A-1+ AA+ PACRA 521 –
JS Bank Limited A-1+ AA- PACRA 182,215 63,244
MCB Bank Limited A-1+ AAA PACRA 16,551 30,870
Meezan Bank Limited A-1+ AAA VIS – 882,594
National Bank of Pakistan A-1+ AAA VIS 154,853 1,558,375
Soneri Bank Limited A-1+ AA- PACRA – 424
Summit Bank Limited A-3 BBB- VIS 1,170,196 183,587
Standard Chartered Bank (Pakistan) Limited A-1+ AAA PACRA 53,102 2,714,509
The Bank of Punjab A-1+ AA+ PACRA 46,453 503
The Bank of Khyber A+ A1 PACRA 175 –
The Royal Bank of Scotland P-1 Aa3 Moody’s – 2,820
United Bank Limited A-1+ AAA VIS 3,885 4,069

Due to the Group’s long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, management does not expect non performance by these
counterparties on their obligations to the Group. Accordingly, the credit risk is minimal.
(c) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.

141

The Group manages liquidity risk by maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. At December 31, 2022 the Group has Rs 19,608.54 million
(2021: Rs 20,602.60 million) unutilized borrowing limits from financial institutions and Rs 2,610.62 million
(2021: Rs 7,343.20 million) cash and bank balances.
The following are the carrying values of financial liabilities as at December 31, 2022:
Carrying Less than One to five More than

amount one year years five years
Long term finances 10,792,882 2,346,431 7,053,989 1,392,462

Lease liabilities 1,694,243 541,363 1,152,880 –
Short term finance - secured 12,883,518 12,883,518 – –
Trade and other payables 43,879,693 43,879,693 – –
Unclaimed dividend 46,429 46,429 – –
Long term deposits 372,600 – 372,600 –
Accrued finance cost 715,007 715,007 – –
70,384,372 60,412,441 8,579,469 1,392,462


Long term finances 7,064,604 1,892,328 4,607,803 564,473

Unpaid dividend 1,738,864 1,738,864 – –
48,507,451 41,079,848 6,863,130 564,473

42.2 Fair values of financial assets and liabilities
The carrying amounts of all financial assets and liabilities reflected in the consolidated financial statement
approximate their fair values. Fair value is determined on the basis of objective evidence at each reporting
date.
Fair value hierarchy

The Group is required to classify financial instruments using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy has the following levels:

– Level 1: Quoted market prices (unadjusted) in active markets for identical assets or liabilities;

– Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or the
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

– Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
142
Investments of the Group carried at fair value are categorised as follows:
2022
Level 1 Level 2 Level 3 Total
Financial assets at fair value

Investment - FVTPL 4,129,240 – – 4,129,240
Investment - FVTOCI – 600,000 – 600,000
Total financial assets at fair value 4,129,240 600,000 – 4,729,240
2021


42.3 Financial instruments by categories
2022 2021
Amortized Fair value Fair value Amortized Fair value Fair value
Cost Through Through Cost Through Through
P & L OCI P & L OCI
Financial assets as per

statement of financial position
Long term loan to an associated company 2,999,000 – – 2,999,000 – –
Long term investments – – 600,000 – – 600,000
Long term deposits 1,173,807 – – 518,424 – –
Short term loan to related parties 8,499,723 – – 6,999,723 – –
Advances, deposits, prepayments and
other receivables 1,935,422 – – 1,171,028 – –
Trade debts 22,831,008 – – 9,654,308 – –
Short term investment – 4,129,240 – – 2,242,710 –
Cash and bank balances 2,610,617 – – 7,343,201 – –
40,049,577 4,129,240 600,000 28,685,684 2,242,710 600,000
143

Financial liabilities as per consolidated statement of financial position - at amortised cost
2022 2021

Lease liabilities 1,694,243 1,812,298
Trade and other payables 43,879,693 30,315,444
Accrued finance cost 715,007 307,184
70,384,372 47,924,221

42.4 Capital risk management
The Group’s objectives when managing capital are to safeguard Group’s ability to continue as a going
concern in order to provide maximum return to shareholders and benefits for other stakeholders and to
maintain an optimal capital structure as required by the lenders. Consistent with others in the industry and
the requirements of the lenders, the Group monitors the capital structure on the basis of debt to equity ratio.
The Group manages the capital structure in the context of economic conditions and the risk characteristics
of the underlying assets. In order to maintain or adjust the capital structure, the Group may, for example,
issue new ordinary / preference shares, or obtain / repay loans.
2022 2021
Total debt 25,370,643 15,342,674

Cash and cash equivalents (2,610,617) (7,343,201)
Net debt 22,760,026 7,999,473
Total equity 106,910,968 100,263,440
Total capital 129,670,994 108,262,913

Debt to capital ratio 17.55% 7.39%
2022 2021
43 Number of employees
Average number of employees during the year 3,724 2,750
Number of employees at end of the year 4,553 2,895
43.1 With effect from July 01, 2022, employees of Pakarab Fertilizers Limited and Fatima Agri Sales & Services
Limited, associated companies, have been transferred to the Holding Company.
144
2022
Conventional Shariah Compliant Total

44 Shariah compliance disclosure
Finance cost
Long term loans 669,215 445,784 1,114,999
Short term borrowings 779,303 227,185 1,006,488
Lease liabilities 152,094 – 152,094
Liabilities
Long term loans 6,792,882 4,000,000 10,792,882
Short term borrowings 9,322,522 3,560,996 12,883,518
Lease liabilities 1,694,243 – 1,694,243
Accrued markup
Long term loans 243,770 101,083 344,853
Short term borrowings 231,134 139,020 370,154
Finance income
Long term loans 483,115 – 483,115
Short term loans 1,038,105 – 1,038,105
Banks 284,776 – 284,776
Cash at bank 2,361,854 244,160 2,606,014

2021

Finance cost
Long term loans 475,711 236,648 712,359
Liabilities
Long term loans 4,720,405 2,344,199 7,064,604
Short term borrowings 6,039,212 426,560 6,465,772
Accrued markup
Long term loans 113,282 47,041 160,323
Finance income
Long term loans 289,901 – 289,901
Short term loans 549,523 – 549,523
Banks 94,450 – 94,450
Term finance certificates 2,066 – 2,066
Cash at bank 7,154,852 180,934 7,335,786
145

45 Non adjusting events after reporting date
The Board of Directors of the Holding Company in its meeting held on April 03, 2023 proposed a final dividend
of Rs 3.50 (2021: Rs 3.50) per share for the year ended December 31, 2022, aggregating to Rs 7,350 million
(2021: Rs 7,350 million) for approval of the members at the Annual General Meeting to be held on April 28, 2023.
46 Date of authorization of issue

These consolidated financial statements have been authorized for issue on April 03, 2023 by the Board of Directors
of the Holding Company.

47 General
Figures have been rounded off to the nearest thousand of rupees unless stated otherwise.
146
SEPARATE
FINANCIAL
STATEMENTS
Independent Auditor’s Report to the Members 149
Statement of Financial Position 154
Statement of Profit or Loss 156
Statement of Comprehensive Income 157
Statement of Changes in Equity 158
Statement of Cash Flows 159
Notes to the Financial Statements 160
148
INDEPENDENT AUDITOR’S REPORT
To the members of Fatima Fertilizer Company Limited
Report on the Audit of Financial Statements
Opinion
We have audited the annexed financial statements of Fatima Fertilizer Company Limited (the Company), which
comprise of statement of financial position as at December 31, 2022, and the statement of profit or loss, the
statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the
year then ended and notes to the financial statements, including a summary of significant accounting policies
and other explanatory information, and we state that we have obtained all the information and explanations
which, to the best of our knowledge and belief, were necessary for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the statement
of financial position, the statement of profit or loss, the statement of comprehensive income, the statement
of changes in equity and the statement of cash flows together with the notes forming part thereof conform
with the accounting and reporting standards as applicable in Pakistan and give the information required by
the Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of
the state of the Company’s affairs as at December 31, 2022 and of the profit, the comprehensive income, the
changes in equity and its cash flows for the year then ended.
Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Company in accordance with
the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (the
Code) as adopted by the Institute of Chartered Accountants of Pakistan and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to note 1.4 to the financial statements which states that the Scheme of Arrangement between
the Company and Fatimafert (a wholly owned subsidiary) was approved by the Lahore High Court (“the Court”)
on December 01, 2022 with effective date of January 01, 2022. However, Board of Directors of both companies
have agreed to defer the implementation of the Scheme. Accordingly, the financial statements have been
prepared by the management of the Company including the Sheikhupura plant.
Our opinion is not modified in respect of this matter.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
149
Separate Financial Statements
Following are the key audit matters:

Key audit matters How the matter was addressed in our audit
1 Revenue Recognition
The Company’s revenue comprises sale of fertilizer, Our audit procedures to address this Key Audit
mid products and toll manufacturing which has been Matter included the following:
disclosed in note 28 to the financial statements. - obtaining an understanding of and assessing
Revenue from the sale of fertilizer, mid products and the design and implementation and operating
toll manufacturing is recognized, when the Company effectiveness of key internal controls over
satisfies the performance obligation under the recognition of revenue;
contract by transferring the promised goods to the - assessing the appropriateness of the Company’s
customers. Revenue recognition criteria has been accounting policies for revenue recognition and
explained in note 4.22 to the financial statements. compliance of those policies with applicable
We identified revenue recognition as key audit matter accounting standards;
as it is one of the key performance indicators of the - checking on a sample basis the recorded sales
Company and because of the potential risk that transactions with underlying sales invoices;
revenue transactions may not have been recognized - testing timeliness of revenue recognition by
based on the satisfaction of the performance comparing individual sales transactions before
obligation under the contract with the customer in line and after the year end to underlying documents;
with the accounting policy adopted or may not have and
been recognized in the appropriate period. - assessed the adequacy of related disclosures in
the financial statements.
2. Valuation of Brand
The Company’s intangible assets contain a brand with Our audit procedures to address this Key Audit
indefinite useful life which has been disclosed in note Matter included the following:
17 to the financial statements. The recognition and - obtaining an understanding of and assessing
subsequent measurement policy has been disclosed the design and implementation and operating
in note 4.5 to the financial statements. effectiveness of key internal controls over
The Company had initially recorded the brand at recognition and subsequent measurement of
Rs 5,900 million in the financial statements on which an brand value;
impairment of Rs 2,360 million has been recognized as - reviewed valuation report of the independent valuer
at reporting date. and evaluated appropriateness of assumptions
We identified valuation of the brand as a Key Audit and methodologies used by the valuer.
Matter because its amount is material to the financial - evaluated the competence and independence of
statements. In addition, annual testing of impairment valuer;
of Brand is complex and judgmental process which - compared recoverable amount with carrying
involves assumptions and methods affected by future amount; and
economic and market conditions. - assessed the adequacy of disclosures related
to valuation of brand in notes to the financial
statements.
150
Information Other than the Financial Statements and Auditor’s Report Thereon
Management of the Company is responsible for the other information. The other information comprises the
information included in the annual report, but does not include the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial

Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with accounting and reporting standards as applicable in Pakistan and the requirements of Companies
Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate or to cease operations, or has no
realistic alternative but to do so.
Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs as applicable in Pakistan will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
151
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Company’s management.
• Conclude on the appropriateness of the Company’s management use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
152
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of
2017);
b) the statement of financial position, the statement of profit or loss, the statement of comprehensive income,
the statement of changes in equity and the statement of cash flows together with the notes thereon have
been drawn up in conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the
books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of
the Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the
company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Muhammad Sufyan.
Lahore
Dated: April 04, 2023
UDIN: AR202210180PYZQdRso4
153
STATEMENT OF FINANCIAL POSITION

2022 2021
EQUITY AND LIABILITIES

CAPITAL AND RESERVES
Authorized share capital
2,700,010,000 (2021: 2,700,010,000) shares of Rs 10 each 27,000,100 27,000,100

Issued, subscribed and paid up share capital
2,100,000,000 (2021: 2,100,000,000) ordinary shares of Rs 10 each 5 21,000,000 21,000,000
Reserves 6 85,926,356 79,263,440
106,926,356 100,263,440
NON CURRENT LIABILITIES
Long term finances 7 8,446,451 5,172,276
Lease liabilities 8 1,142,549 1,437,025
Deferred taxation 9 22,680,356 20,274,052
Deferred liabilities 10 2,683,448 3,248,245
35,325,404 30,306,702
CURRENT LIABILITIES
Trade and other payables 11 55,371,289 38,469,330
Accrued finance cost 12 715,007 307,184
Income tax payable 8,347,535 4,968,065
Short term finances - secured 13 12,883,518 6,465,772
Current portion of:
- Long term finances 7 2,346,431 1,892,328
- Lease liabilities 8 539,029 375,273
- Deferred government grant 14 – 61,440
80,249,238 54,323,207
CONTINGENCIES & COMMITMENTS 15
222,500,998 184,893,349

The annexed explanatory notes from 1 to 47 form an integral part of these financial statements.
154
2022 2021
ASSETS

NON CURRENT ASSETS
Property, plant and equipment 16 109,066,170 105,422,464
Intangible assets 17 3,651,346 3,608,877
Investment property 18 165,419 775,339
112,882,935 109,806,680

Long term investments 19 1,769,409 795,511
Long term loan to an associated company 20 2,999,000 1,999,333
6,883,357 3,313,268
119,766,292 113,119,948

CURRENT ASSETS
Stores and spares 21 14,722,495 11,565,833
Stock in trade 22 32,487,798 18,331,781
Trade debts 23 22,831,008 9,654,308
Short term loans 24 8,499,723 6,999,723
Advances, deposits, prepayments and other receivables 25 17,517,219 15,635,845
Short term investments 26 4,067,140 2,242,710
102,734,706 71,773,401
222,500,998 184,893,349
155
STATEMENT OF PROFIT OR LOSS

2022 2021
Sales 28 152,231,277 112,488,420

Cost of sales 29 (100,288,585) (69,403,976)
Gross profit 51,942,692 43,084,444

Distribution cost 30 (7,947,081) (5,048,813)
Administrative expenses 31 (5,902,070) (3,899,598)
38,093,541 34,136,033

Finance cost 32 (2,929,107) (2,006,559)
Other operating expenses 33 (6,336,952) (4,676,977)
28,827,482 27,452,497

Other income 34 2,411,196 1,210,189
Share of loss from associates 19.1 (68,408) (348)
Other losses:
- Unwinding of provision for GIDC 10.2 (274,157) (367,524)
- Loss allowance on subsidy receivable from GoP 25.3 (109,724) (109,721)
(383,881) (477,245)

Taxation 35 (16,647,238) (9,710,827)

Earnings per share - basic and diluted (Rupees) 36 6.73 8.80
156
STATEMENT OF COMPREHENSIVE INCOME
2022 2021

Other comprehensive income:
Items that may not be reclassified subsequently to profit or loss:
Remeasurement of post retirement benefits obligation (191,889) (82,249)
Related tax thereon 72,220 23,852
Share of other comprehensive loss from associates (7,725) (5,982)
Related tax thereon 1,159 897
Other comprehensive income - net of tax (126,235) (63,482)
Total comprehensive income for the year 14,012,916 18,410,784
157
STATEMENT OF CHANGES IN EQUITY

Capital Reserve Revenue Reserve

Post retirement
Ordinary share
Share Unappropriated benefit obligation Total
capital
premium profit reserve



158
STATEMENT OF CASH FLOWS
2022 2021
Cash flows from operating activities

Cash generated from operations 40 22,028,554 31,427,289
Net increase in long term deposits 197,496 64,734
Finance cost paid (2,396,485) (1,962,636)
Taxes paid (10,782,952) (2,988,233)
Employee retirement benefits paid (131,073) (242,330)
Net cash generated from operating activities 8,915,540 26,298,824
Cash flows from investing activities
Additions in property, plant and equipment (9,028,085) (5,730,994)
Additions in investment property – (20,056)
Additions in intangible assets (85,109) (19,741)
Proceeds from disposal of property, plant and equipment 18,908 3,430
Short term investments made (2,988,685) (673,802)
Short term loan to an associated company (1,500,000) (3,758,000)
Long term investments made (1,050,031) (600,200)
Proceeds from short term investments 335,925 868,243
Profit received on loans and saving accounts 972,560 1,977,017
Net increase in long term advances and deposits (1,066,580) (404,745)
Net cash used in investing activities (14,391,097) (8,358,848)
Cash flows from financing activities
Proceeds from long term finances 7.1 5,622,520 3,920,362
Repayment of long term finances 7.1 (1,929,341) (5,857,386)
Repayment of lease liabilities 8 (281,860) (730,690)
Dividend paid (9,087,386) (3,507,038)
Increase / (decrease) in short term finances - net 3,376,751 (2,584,266)
Net cash used in financing activities (2,299,316) (8,759,018)
Net (decrease) / increase in cash and cash equivalents (7,774,873) 9,180,958
Cash and cash equivalents at the beginning of the year 5,642,736 (3,538,222)
Cash and cash equivalents comprises of following:

Running finance 13 (4,741,460) (1,700,465)

159

FINANCIAL STATEMENTS
1 Legal Status and nature of business
1.1 Fatima Fertilizer Company Limited (“the Company”), was incorporated in Pakistan on December 24, 2003 as a
public company under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017). The Company
is listed on Pakistan Stock Exchange. The principal activity of the Company is manufacturing, producing, buying,
selling, importing and exporting fertilizers and chemicals.
Registered office of the Company is situated at E-110, Khayaban-e-Jinnah, Lahore Cantt. The manufacturing
facilities of the Company are located at Mukhtargarh - Sadiqabad, Khanewal Road - Multan and Chichoki
Mallian - Sheikhupura, Pakistan.

1.2 The Board of Directors of the Company in their meeting held on April 07, 2022, has approved investment in Fatima
Cement Limited (“FCL”) by way of acquisition of 100% ordinary shares of FCL from all the existing shareholders at
par value, to make it wholly owned subsidiary of the Company.

1.3 The Board of Directors of the Company, in their meeting held on December 05, 2022, has considered and approved
a comprehensive business expansion plan and the Scheme of Compromises, Arrangements and Reconstruction
(“the Scheme”) drafted under the relevant provisions of the Companies Act, 2017, aimed at further consolidation of the
fertilizer business by amalgamating its associated company, Pakarab Fertilizers Limited (“PFL”) with and into Fatima
Fertilizer Company Limited with effect from July 01, 2022. As per the terms of the Scheme, this Amalgamation would
lead to an increased asset base and size of the Company allowing it to benefit from economies of scale effectively
and efficiently in the combined business and assets base of both companies, creating further business expansion
opportunities for the Company. Accordingly, Fatima Packaging Limited, a wholly owned subsidiary of PFL, will also
become a wholly owned subsidiary of the Company. This Scheme has been duly approved by the Shareholders
of the Company in the Extra Ordinary General Meeting held on December 31, 2022, under the supervision of the
Honourable Lahore High Court. This transaction would be subject to the receipt of necessary approvals, sanctions,
consents, observations, no objection certificates from the Creditors of the Company, Securities and Exchange
Commission of Pakistan (“SECP”), the relevant High Court or such other competent authority as may be applicable.
1.4 The Board of Directors (“the Board”) of the Company in their meeting held on August 26, 2020, accorded in
principle approval for the transfer of operations related to the Company’s Sheikhupura plant to Fatimafert Limited.
The Scheme of Arrangement (“the Scheme”) drafted under the relevant provisions of the Companies Act, 2017
between the Company and Fatimafert Limited was approved by the Board of both Companies on July 15, 2021.
The Scheme was filed with the Lahore High Court (“the Court”) for formal sanction and approval of the Court.
On December 01, 2022, the Court granted its approval for the Scheme which is effective from January 01, 2022.

On December 30, 2022, the Board of the Company and Fatimafert Limited have agreed to defer the effective date
of implementation of the Scheme from January 01, 2022 to January 01, 2024 or such suitable date, earlier or later,
as may be decided by the Board of the Company and Fatimafert Limited due to prevailing economic situation in the
country. Subsequent to the year end, the Company has approached the Court for permission in this regard.

1.5 These financial statements are the separate financial statements of the Company in which investment in subsidiary
company is accounted for on the basis of actual cost incurred to acquire subsidiary and investment in associates
are accounted for under equity method. Consolidated financial statements are prepared separately.

2 Basis of preparation
2.1 Statement of compliance
These financial statements have been prepared in accordance with the accounting and reporting standards as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of:

– International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB);

– Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan
(ICAP) as notified under the Companies Act, 2017; and
160
– Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs and IFAS, the
provisions of and directives issued under the Companies Act, 2017 have been followed.

2.2 New accounting standards / amendments and IFRSs interpretations that are effective for the year ended
December 31, 2022
The following standards, amendments and interpretations are effective for the year ended December 31, 2022.
These standards, amendments and interpretations are either not relevant to the Company’s operations or are not
expected to have significant impact on the Company’s financial statements other than certain additional disclosures:

Amendments to IFRS 16 ‘Leases’ - Covid - 19 related rent concessions April 01, 2021
Amendments to IFRS 3 ‘Business Combinations’ - Reference to the conceptual
January 01, 2022
framework
Amendments to IAS 16 ‘Property, Plant and Equipment’ - Proceeds before intended
January 01, 2022
use
Amendments to IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ -
January 01, 2022
Onerous Contracts — cost of fulfilling a contract
Annual Improvements to IFRS Standards 2018 - 2020 Cycle (related to IFRS 9,
January 01, 2022
IFRS 16 and IAS 41)
2.3 New accounting standards, amendments and IFRSs interpretations that are not yet effective
The following standards, amendments and interpretations are only effective for accounting periods, beginning on
or after the date mentioned against each of them. These standards, interpretations and the amendments are either
not relevant to the Company’s operations or are not expected to have significant impact on the Company’s financial
statements other than certain additional disclosures:

Amendments to IAS 1 ‘Presentation of Financial Statements’ - Disclosure of

January 01, 2023
accounting policies
Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and
January 01, 2023
Errors’ - Definition of accounting estimates
Amendments to ‘IAS 12 Income Taxes’ - deferred tax related to assets and liabilities
January 01, 2023
arising from a single transaction.
Amendments to IFRS 16 ‘ Leases’ - Lease Liability in a Sale and Leaseback January 01, 2024
Amendments to IAS 1 ‘Presentation of Financial Statements’ - Classification of
January 01, 2024
liabilities as current or non-current
Amendments to IFRS 10 and 28 - Sale or Contribution of Assets between an
Deferred indefinitely
Investor and its Associate or Joint Venture
3 Basis of measurement
3.1 Accounting convention
These financial statements have been prepared under the historical cost convention except for revaluation of certain
financial instruments at fair value and recognition of certain employee retirement benefits at present value.

161

3.2 Critical accounting estimates and judgements
The Company’s significant accounting policies are stated in note 4. Not all of these significant policies require the
management to make difficult, subjective or complex judgements or estimates.

The following is intended to provide an understanding of the policies the management considers critical because of
their complexity, judgement of estimation involved in their application and their impact on these financial statements.
Estimates and judgements are continually evaluated and are based on historical experience, including expectations
of future events that are believed to be reasonable under the circumstances. These judgements involve assumptions
or estimates in respect of future events and the actual results may differ from these estimates.
The areas involving a higher degree of judgments or complexity or areas where assumptions and estimates are
significant to the financial statements are as follows:

a) Employee retirement benefits
The Company uses the valuation performed by an independent actuary as the present value of its retirement benefit
obligations. The valuation is based on assumptions as mentioned in note 4.2 (a).

b) Useful life and residual values of property, plant and equipment and intangible assets
The Company reviews the useful lives of property, plant and equipment and intangible assets on regular basis. Any
change in estimates in future years might affect the carrying amounts of the respective items of property, plant and
equipment and intangible assets with a corresponding effect on the depreciation / amortization charge.

c) Provision for taxation
In making the estimates for income taxes payable by the Company, the management considers the applicable laws
and the decisions of the appellate tax authorities on certain issues in the past.

4 Significant accounting policies
The significant accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the periods presented, unless otherwise stated.

4.1 Taxation
Current
Provision of current tax is based on the taxable income for the period determined in accordance with the prevailing
law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to
apply to the profit for the period if enacted. The charge for current tax also includes adjustments, where considered
necessary, to provision for tax made in previous years arising from assessments framed during the period for such
years.
Deferred
Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences
arising from differences between the carrying amount of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of the taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which the deductible temporary differences, unused tax losses
and tax credits can be utilized.

Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse, based
on tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or
credited to the statement of profit or loss, except in the case of items recognised in other comprehensive income or
directly in equity in which case it is included in other comprehensive income or equity, as the case may be.
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The main features of the schemes operated by the Company for its employees are as follows:

a) Defined benefit plan - Gratuity
The Company operates non funded gratuity scheme for employees of Sadiqabad plant and funded gratuity scheme
for employees of Multan and Sheikhupura plants, according to the terms of employment, subject to a minimum
qualifying period of service. Annual provision is made on the basis of actuarial valuation to cover obligations under
the scheme for all employees eligible to gratuity benefits.

The latest actuarial valuation for gratuity scheme was carried out as at December 31, 2022. Projected unit credit
method is used for valuation of the scheme.

All actuarial gains and losses are recognised in ‘Other Comprehensive Income’ as they occur.

b) Accumulating compensated absences
Provisions are made annually to cover the obligation for accumulating compensated absences and are charged to
the statement of profit or loss.

c) Defined contribution plan - Provident Fund
The Company operates provident fund for all its permanent employees. Equal monthly contributions are made both
by the Company and the employees. Retirement benefits are payable to employees on completion of prescribed
qualifying period of service under these schemes.

4.3 Property, plant and equipment
Property, plant and equipment except freehold land are stated at cost less accumulated depreciation and any
identified impairment loss. Freehold land is stated at cost less any identified impairment loss. Cost in relation to own
manufactured assets includes direct cost of materials, labour and applicable manufacturing overheads. Cost also
includes capitalized borrowing costs as referred to in note 4.17.

Depreciation on property, plant and equipment is charged to the statement of profit or loss on straight line method
so as to write off the depreciable amount of an asset over its estimated useful life at the rates given in note 16.

Depreciation on additions to property, plant and equipment is charged from the month in which an asset is acquired
or made available for use, while no depreciation is charged for the month in which the asset is disposed off.

The assets’ residual values and useful lives are reviewed, at each financial year end, and adjusted prospectively, if
impact on depreciation is significant.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the cost
of the item can be measured reliably. All other repair and maintenance costs are charged to the statement of profit
or loss during the period in which they are incurred.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and
the carrying amount of the asset is recognised as an income or expense.

Capital work in progress and stores held for capital expenditure are stated at cost less any recognised impairment loss.
All expenditures connected with specific assets incurred during installation and construction period are carried under
capital work in progress. These are transferred to specific assets as and when these assets are available for use.

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4.5 Intangibles assets
An intangible asset is recognised if it is probable that future economic benefits that are attributable to the asset
will flow to the Company and that the cost of such an asset can also be measured reliably. Subsequently asset is
measured as follows:

With indefinite useful life
Intangibles assets with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses. Impairment reviews are undertaken annually or more frequently if events or changes in
circumstances indicate a potential impairment. The carrying value of the intangible is compared to the recoverable
amount, which is the higher of value in use and the fair value less costs of disposal. Any impairment / reversal of
impairment is recognised in the statement of profit or loss immediately.

With finite useful life
Expenditure incurred to acquire intangible assets are capitalized and stated at cost less accumulated amortisation
and any identified impairment loss. Computer software is amortised using the straight line method over a period of
four years. Amortisation on additions to computer software is charged from the month in which the asset is available
for use while no amortisation is charged for the month in which asset is disposed off.

4.6 Investment property
Investment property, which is property held to earn rentals and / or for capital appreciation, is valued using the cost
method i.e. at cost less any accumulated depreciation and any identified impairment loss. Depreciation on buildings
is charged to income on straight line method at the rate of 4%. Depreciation on additions to investment property
is charged from the month in which a property is acquired or capitalized while no depreciation is charged for the
month in which the property is disposed. The difference between present value of the proceeds from disposal and
the carrying amount is recognised in the statement of profit or loss.

Rental income from investment property that is leased to a third party under an operating lease is recognised in the
statement of profit or loss on a straight line basis over the lease term and is included in ‘other income’.

4.7 Investments in associates - at equity method
The Company’s long term investments are investments in associates, entities over which the Company exercise
significant influence. These investments are initially recognised at cost and subsequently carrying amount is
increased or decreased to recognise the Company’s share of the profit or loss or other comprehensive income or
loss of the associates using the equity method. The Company’s share of the associates profit or loss is recognised
in the Company’s statement of profit or loss and the Company`s share of other comprehensive income or loss is
recognised in the Company`s statement of other comprehensive income. At each reporting date, the recoverable
amounts are estimated to determine the extent of impairment losses, if any, and carrying amounts of investments
are adjusted accordingly. Impairment losses are recognised as expense in the statement of profit or loss.
4.8 Investments in subsidiaries - at cost

Investments in subsidiaries are initially valued at cost. At subsequent reporting dates, the Company reviews the
carrying amount of the investment to assess whether there is any indication that such investments have suffered an
impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent
of the impairment loss, if any.
The profits and losses of subsidiaries are carried forward in their financial statements and not dealt within these
financial statements except to the extent of dividend declared by the subsidiaries which are recognised in other
income.
4.9 Government grant

The Company recognises the benefit of a government loan at below market rate of interest as a Government grant.
The benefit of the below market rate of interest is measured as the difference between the initial carrying value of
the loan determined in accordance with IFRS 9 and the proceeds received and is presented as deferred grant. The
recognition of government grants in the statement of profit or loss is done on a systematic basis over the period of
the loan.
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4.10 Leases
As a lessee, the Company recognises right of use asset and lease liability at the lease commencement date.

Right of use asset
The right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payment made at or before the commencement date, plus any initial direct cost incurred and an
estimate of cost to dismantle and remove the underlying asset or to restore the underlying asset or the site on which
it is located, less any lease incentives received.

The right of use asset is subsequently depreciated using the straight line method from the commencement date
to the earlier of the end of the useful life of the right of use asset or the end of lease term. The estimated useful
lives of the right of use assets are determined on the same basis as those of the property, plant and equipment.
In addition, the right of use asset is periodically reduced by impairment losses, if any, and adjusted for the certain
remeasurement of the lease liability.

Lease liability

The lease liability is initially measured at present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
Company’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise of the following:

– fixed payments, including in substance fixed payments;
– variable lease payments that depend on an index, or a rate, initially measured using the index or rate as at
commencement date;
– amount expected to be payable under a residual guarantee; and
– the exercise under purchase option that the Company is reasonably certain to exercise, lease payments in an
optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties
for early termination of lease unless the Company is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest rate method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Company’s estimate of the amount expected to be payable under a residual value guarantee, or if the Company
changes its assessment of whether it will exercise a purchase or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right of use asset, or is recorded in statement of profit or loss if the carrying amount of the right of use asset has
been reduced to zero.

4.11 Financial instruments
Financial assets and financial liabilities are recognised in the Company’s statement of financial position when the
Company becomes a party to the contractual provisions of the instrument.

4.11.1 Financial assets
Classification
The Company classifies its financial assets in the following measurement categories:

(i) Amortised cost, where the effective interest rate method will apply;
(ii) Fair value through profit or loss (FVTPL);
(iii) Fair value through other comprehensive income (FVTOCI).
165

The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in the statement of profit or loss or
statement of other comprehensive income. For investments in equity instruments that are not held for trading, this
will depend on whether the Company has made an irrevocable election at the time of initial recognition to account
for the equity investment at FVTOCI.

The Company reclassifies debt investments when and only when its business model for managing those assets
changes.
Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade date, the date on which the Company
commits to purchase or sell the asset. Further, assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Company has transferred substantially all the
risks and rewards of ownership.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not
at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at FVTPL are expensed in the statement of profit or loss.

Debt instruments
a) Debt instruments measured at amortised cost

Debt instruments that meet the following conditions are measured subsequently at amortised cost:
The financial asset is held within a business model whose objective is to hold financial assets in order to collect the
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition
minus the principal repayments, plus the cumulative amortization using the effective interest method of any
difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying
amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. Interest income is calculated by applying the effective interest rate to the
gross carrying amount of a financial asset.

b) Debt instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments whose objective is achieved by both collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding are measured subsequently at fair value through other
comprehensive income (FVTOCI).

When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other operating gains / (losses). Interest income from these financial
assets is included in other operating income using the effective interest rate method. Impairment expenses are
presented as a separate line item in the statement of profit or loss.

166
c) Debt instruments designated as at fair value through profit or loss (FVTPL)
Assets that do not meet the criteria for amortised cost or FVTOCI are measured at FVTPL. A gain or loss on a debt
investment that is subsequently measured at FVTPL is recognised in statement of profit or loss and presented net
within other operating gains / losses in the period in which it arises.

Equity instruments
On initial recognition, the Company may make an irrevocable election (on an instrument by instrument basis) to
designate investments in equity instruments as at FVTOCI.

The Company subsequently measures all equity investments at fair value. Where the Company’s management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of
fair value gains and losses to the statement of profit or loss following the derecognition of the investment. Dividends
from such investments continue to be recognised in the statement of profit or loss as other operating income when
the Company’s right to receive payments is established. Changes in the fair value of financial assets at FVTPL are
recognised in other gains / losses in the statement of profit or loss as applicable. Impairment losses (and reversal
of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes
in fair value.
Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses (ECL) associated with its debt
instruments carried at amortised cost and FVTOCI. The impairment methodology applied depends on whether there
has been a significant increase in credit risk.

For trade debts, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the trade debts, using the simplified approach. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical
credit loss experience, adjusted for factors that are specific to the debtors and other direction of conditions at the
reporting date, including time value of money where appropriate.

For all other financial assets general 3 stage approach is used i.e. to measure ECL through loss allowance at an
amount equal to 12 month ECL if credit risk on a financial instrument or a Company of financial instruments has not
increased significantly since initial recognition.

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the
magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default
and loss given default is based on historical data adjusted by forward looking information as described above.
As for the exposure at default for financial assets, this is represented by the assets’ gross carrying amount at the
reporting date.

The Company recognises an impairment gain or loss in the statement of profit or loss for all financial instruments
with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments
in debt instruments that are measured at FVTOCI, for which the loss allowance is recognised in the statement of
other comprehensive income and accumulated in the investment revaluation reserve, and does not reduce the
carrying amount of the financial asset in the statement of financial position.

4.11.2 Financial liabilities
Classification, initial recognition and subsequent measurement

The Company classifies its financial liabilities in the following categories:
1- At fair value through profit or loss; and

2- Amortised cost.
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The Company determines the classification of its financial liabilities at initial recognition. All financial liabilities
are recognised initially at fair value and, in the case of other financial liabilities, also include directly attributable
transaction costs. The subsequent measurement of financial liabilities depends on their classification as follows:
a) Fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as being at fair value through profit or loss.

b) Other financial liabilities
After initial recognition, other financial liabilities which are interest bearing subsequently measured at amortised
cost, using the effective interest rate method. Gain and losses are recognised in the statement of profit or loss, when
the liabilities are derecognised as well as through effective interest rate amortisation process.

Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged,
cancelled or they expire.

4.12 Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the financial statements only when there is
a legally enforceable right to set off the recognised amount and the Company intends either to settle on a net basis
or to realize the assets and to settle the liabilities simultaneously.

4.13 Stores and spares
Stores and spares are valued at moving average cost, while items considered obsolete are carried at nil value. Items
in transit are valued at cost comprising invoice value plus other charges paid thereon.

4.14 Stock in trade
All stocks are valued at the lower of cost and net realizable value. Cost in relation to raw and packing materials,
except for those in transit, signifies moving average cost and that relating to mid products and finished goods,
monthly average cost comprising cost of direct materials, labour and appropriate manufacturing overheads based
on normal operating capacity. Materials in transit are stated at cost comprising invoice value plus other charges
incurred thereon. Net realizable value signifies the estimated selling price in the ordinary course of business less
costs necessarily to be incurred in order to make the sale. Provision is made in the financial statements for obsolete
and slow moving stock in trade based on management estimate.

4.15 Trade debts and other receivables
These are recognised and carried at the original invoice amounts, being the fair value and subsequently measured
at amortised cost using the effective interest rate method, less loss allowance, if any. For measurement of loss
allowance for trade debts, the Company applies IFRS 9 simplified approach to measure the expected credit losses.
4.16 Cash and cash equivalents

Cash and bank balances are carried in the statement of financial position at amortised cost. For the purpose of cash
flow statement, cash and cash equivalents comprises of cash in hand, bank balances, short term running finances
and short term highly liquid investments that are readily convertible to known amounts of cash.

4.17 Borrowings and their costs
Borrowings are initially recorded at the proceeds received. They are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the profit
and loss account over the period of the borrowings using the 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. All other borrowing costs are
recognised in the statement of profit or loss in the period in which they are incurred.
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4.18 Trade and other payables
Liabilities for creditors and other amounts payable are carried at cost, which is the fair value of the consideration to
be paid in the future for the goods and / or services received, whether or not billed to the Company.

4.19 Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and
adjusted to reflect the current best estimate.

The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Future
operating losses are not provided for in financial statements.

4.20 Derivative financial instruments
These are initially recorded at cost on the date a derivative contract is entered into and are remeasured to fair
value at subsequent reporting dates. The method of recognizing the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Company documents at the inception of the transaction the relationship between the hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The
Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in cash flow of hedged items.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the statement
of profit or loss. Amounts accumulated in equity are recognised in statement of profit or loss in the periods when the
hedged item will affect profit or loss.

4.21 Impairment of non financial assets
Assets that have an indefinite useful life, for example land, are not subject to depreciation / amortization and are
tested annually for impairment. Assets that are subject to depreciation / amortization are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units). Non financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at each reporting date.
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in the statement of profit or loss.

4.22 Revenue recognition
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when or as
performance obligations are satisfied by transferring control of promised goods or services to a customer and
control either transfers overtime or at a point in time. Revenue is measured at fair value of the consideration received
or receivable, excluding discounts, rebates and government levies. Scrap sales and miscellaneous receipts are
recognised on realized amounts.

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Revenue from sale of goods is recognised at the point in time when control of the fertilizers products and chemical
is transferred to the customer, generally on delivery of the goods.

Government subsidy on sale of fertilizer is recognised when the right to receive such subsidy has been established
and the underlying conditions are met.

Revenue from sale of Certified Emission Reductions (“CERs”) is recognised on the satisfaction of performance
obligation i.e. generation of the Emission Reductions when a firm commitment for sale of CERs exists with a buyer.
Return on deposits is accrued on a time proportion basis by reference to the principal outstanding and the applicable
rate of return. Interest income is recognised on accrual basis.

4.23 Foreign currency transactions and translation
a) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the Company operates (the functional currency). The financial statements are presented in
Pak Rupees, which is the Company’s functional and presentation currency.

b) Transactions and balances
Foreign currency transactions are translated into Pak Rupees using the exchange rates prevailing at the dates of
the transactions. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates
of exchange prevailing at the reporting date. Foreign exchange gain and losses on retranslation are recognised in
the statement of profit or loss. All non monetary items are translated into Pak Rupees at exchange rates prevailing
on the date of transaction or on the date when fair values are determined.

4.24 Dividend
Dividend distribution to the Company’s members is recognised as a liability in the reporting period in which dividends
are declared.

4.25 Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) for its ordinary shares. Basic EPS is calculated
by dividing the profit by weighted average number of shares outstanding during the period. Diluted EPS is determined
by adjusting for the effects of all dilutive potential ordinary shares.
5 Issued, subscribed and paid up share capital

2022 2021 2022 2021
(Number of shares) (Rupees in thousand)
2,000,000,000 2,000,000,000 Ordinary shares of Rs 10 each

fully paid in cash 20,000,000 20,000,000
Ordinary shares of Rs 10 each
issued on conversion of fully paid
100,000,000 100,000,000 preference shares @ Rs 20 each 1,000,000 1,000,000

2,100,000,000 2,100,000,000 21,000,000 21,000,000
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5.1 Ordinary shares of the Company held by associates at year end are as follows:
2022 2021
(Number of shares)

Arif Habib Corporation Limited 319,000,206 319,000,206
Arif Habib Equity (Private) Limited 19,409,500 19,409,500
Fatima Holding Limited 28,000,000 66,969,373
Fazal Cloth Mills Limited 69,114,031 69,114,031
Reliance Weaving Mills Limited 2,625,166 2,625,166
Farrukh Trading Company Limited 160,430,261 160,430,261
Fatima Management Company Limited 160,450,633 160,430,261
Fatima Trading Company (Private) Limited 147,706,263 97,462,890
Reliance Commodities (Private) Limited 500,000 500,000
907,236,060 895,941,688

5.2 All ordinary shares rank equally with regard to the Company`s residual assets. Holders of the shares are entitled
to dividends from time to time and are entitled to one vote per share at the general meetings of the Company.
2022 2021
6 Reserves
Capital reserve:
Share premium 6.1 1,790,000 1,790,000
Revenue reserve:
Unappropriated profit 84,376,108 77,593,523
Post retirement benefit obligation reserve 6.2 (239,752) (120,083)
85,926,356 79,263,440

6.1 This reserve can be utilized by the Company only for the purposes specified in section 81 of the Companies
Act, 2017.

6.2 This represents cumulative actuarial adjustments in measurement of employee retirement benefits.
2022 2021
7 Long term finances

Secured loans from banking companies / financial institutions 7.2 10,792,882 7,064,604
8,446,451 5,172,276

7.1 Movement of long term finances
Disbursements during the year 5,622,520 3,920,362
Repayments during the year (1,929,341) (5,857,386)
Accreditation of loan under SBP Islamic Refinance Scheme 35,099 87,651
Exchange gain on translation of foreign currency loan – (3,312)
Closing balance 10,792,882 7,064,604

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2022 2021

7.2 Secured loans from banking companies / financial institutions
These are composed of:
BAHL Term Loan 7.2.1 – 192,714
BOP Term Loan 7.2.2 750,000 1,500,000
ABL Term Loan - II 7.2.3 500,000 750,000
SBP LTF - Faysal Bank Limited 7.2.4 – 344,199
SBP LTF - The Bank of Punjab 7.2.5 – 357,339
ABL Term Loan - III 7.2.6 1,000,000 1,000,000
Meezan Bank Limited - Diminishing Musharakah 7.2.7 2,000,000 2,000,000
Faysal Bank Limited - Diminishing Musharakah 7.2.11 2,000,000 –
Pak Kuwait Investment Company Limited - Term Finance 7.2.12 1,500,000 –
NBP - Demand Finance 7.2.13 1,362,469 –
10,792,882 7,064,604
8,446,451 5,172,276

7.2.1 BAHL Term Loan
This facility was obtained from Bank Al Habib Limited, for an amount of Rs 1,300 million for purchase of Low
Pressure Boosting Compressor.

The facility carried markup at the rate of 6 months KIBOR plus 1.10% per annum. The effective rate of markup
charged during the year was 12.57% (2021: 8.25% to 8.77%) per annum.

The facility was secured by pari passu charge over plant and machinery of the Company amounting to

The loan was repayable in three years in six semi annual equal installments starting from October 29, 2019.
Last repayment was due and made on April 28, 2022. During the year, the Company has paid installments

7.2.2 BOP Term Loan
This facility has been obtained from The Bank of Punjab, for an amount of Rs 3,000 million to finance /
reimburse BMR.

charged during the year ranged from 8.29% % to 16.53% (2021: 7.81% to 8.31%) per annum.

The facility is secured by pari passu charge over plant and machinery of the Company amounting to
Rs 4,000 million.

The loan is repayable in four years in eight semi annual equal installments starting from January 31, 2020.
Last repayment is due on July 31, 2023. During the year, the Company has paid installments amounting to
Rs 750 million (2021: Rs 750 million).

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7.2.3 ABL Term Loan - II
This facility has been obtained from Allied Bank Limited, for an amount of Rs 1,000 million to finance CAPEX
in the Company.
charged during the year ranged from 8.81% to 16.81% (2021: 8.01% to 8.85%) per annum.

Rs 1,334 million.

The loan is repayable in five years with one year grace period in eight semi annual equal installments starting
from March 25, 2021. Last repayment is due on September 25, 2024. During the year, the Company has paid
installments aggregating to Rs 250 million (2021: Rs 250 million).

7.2.4 SBP LTF - Faysal Bank Limited
This facility was obtained from Faysal Bank Limited for an amount of Rs 718.11 million for disbursement of
salaries and wages for the month of April, May and June 2020, in line with SBP Islamic Refinance Scheme.

The facility carried markup at the rate of SBP base rate + 1% per annum. The effective interest rate was

The facility was secured by pari passu charge over Plant and Machinery of the Company amounting to
Rs 1,000 million.

Last repayment was due and made on December 30, 2022. During the year, the Company paid installments

7.2.5 SBP LTF - The Bank of Punjab
This facility was obtained from The Bank of Punjab for an amount of Rs 744.33 million for disbursement of
salaries and wages for the month of July, August and September 2020, in line with SBP Islamic Refinance
Scheme.
The facility carried markup at the rate of SBP base rate + 0.8% per annum. The effective interest rate was

The facility was secured by pari passu charge over plant and machinery of the Company amounting to
Rs 1,000 million.

Last repayment was due and made on October 31, 2022. During the year, the Company paid installments

7.2.6 ABL Term Loan - III
This facility has been obtained from Allied Bank Limited for an amount of Rs 1,000 million to finance CAPEX
in the Company.


Rs 1,334 million.

173

7.2.7 Meezan Bank Limited - Diminishing Musharakah
This facility has been obtained from Meezan Bank Limited for an amount of Rs 2,000 million to refinance
CAPEX already incurred by the Company.


Rs 2,667 million.


This facility has been obtained from Askari Bank Limited for an amount of Rs 549.19 million out of total limit
of Rs 550 million, under SBP TERF Scheme.

annum (2021: 3.00% to 13.53%).

Rs 733.33 million.

repayment is due on March 31, 2031.

This facility has been obtained from National Bank of Pakistan for an amount of Rs 631.23 million out of total
limit of Rs 1,000 million, under SBP TERF Scheme.

annum (2021: 9.15% to 9.28%).

Rs. 1,333.34 million.


This facility has been obtained from Bank Al Habib Limited for an amount of Rs 500 million out of total limit
of Rs. 500 million, under SBP TERF Scheme.

annum (2021: 11.39% to 11.40%).

Rs 666.67 million.

repayment is due on February 15, 2032.
174
7.2.11 Faysal Bank Limited - Diminishing Musharakah
This facility has been obtained during the year from Faysal Bank Limited for an amount of Rs 2,000 million to
refinance BMR / CAPEX.


Rs. 2,667 million.


7.2.12 Pak Kuwait Investment Company Limited - Term Finance
This facility has been obtained during the year from Pakistan Kuwait Investment Company (Private) Limited
for an amount of Rs 1,500 million to refinance CAPEX.


Rs 2,000 million.

The loan is repayable in five years including one year grace period in eight semi annual installments. Last
repayment is due on May 19, 2027.

7.2.13 NBP - Demand Finance
This facility has been obtained during the year from National Bank of Pakistan for an amount of Rs 1,362.47
million to finance import & procurement of plant, machinery & spare parts for BMR / CAPEX.

charged during the year at 12.96% to 16.85% per annum.



7.3 The aggregate unavailed long term financing facilities amounts to nil (2021: Rs 1,129.63 million).
2022 2021

8 Lease liabilities
Closing balance 1,681,578 1,812,298
Less: Current portion of lease liabilities 539,029 375,273
1,142,549 1,437,025
175

2022 2021
9 Deferred taxation
The balance of deferred tax is in respect of the following:
Accelerated tax depreciation 23,022,908 20,174,542
Gas Infrastructure Development Cess (GIDC) 77,825 147,897
Investment in associates 4,648 16,111
23,105,381 20,338,550
Remeasurement of defined benefit obligation (136,718) (64,498)
Loss allowance on subsidy receivable from GoP (191,297) –
Unrealised loss on equity investments (97,010) –
(425,025) (64,498)
22,680,356 20,274,052

9.1 Movement in temporary differences for the year is as follows:
Balance as at Recognised Recognised in Balance as at

December 31, in profit other comprehensive December 31,
2021 or loss income 2022

Accelerated tax depreciation 20,174,542 2,848,366 – 23,022,908
Gas Infrastructure Development Cess (GIDC) 147,897 (70,072) – 77,825
Investments in associates 16,111 (10,304) (1,159) 4,648
20,338,550 2,767,990 (1,159) 23,105,381
Remeasurement of defined benefit obligation (64,498) – (72,220) (136,718)
Loss allowance on subsidy receivable from GoP – (191,297) – (191,297)
Unrealised loss on equity investments – (97,010) – (97,010)
(64,498) (288,307) (72,220) (425,025)
20,274,052 2,479,683 (73,379) 22,680,356

2022 2021
10 Deferred liabilities
Employee retirement benefits 10.1 1,583,718 955,419
Provision for Gas Infrastructure Development Cess (GIDC) 10.2 1,099,730 2,292,826
2,683,448 3,248,245

Gratuity 10.1.1 1,462,253 877,217
Accumulating compensated absences 10.1.2 121,465 78,202
1,583,718 955,419
176
2022 2021
10.1.1 Gratuity
Present value of defined benefit obligations (f) 1,943,615 1,011,303
Fair value of plan assets (g) (481,362) (134,086)

Charge for the year (c) 265,146 163,305
Transfer from associated Companies 244,166 –
Charged to other comprehensive income (e) 191,889 82,249

Net interest cost 108,229 63,862
265,146 163,305

Cost of sales 196,150 127,050
Distribution expenses 17,431 –
265,146 163,305

e) Total remeasurement chargeable to other comprehensive income
Remeasurement of plan obligation:
Actuarial gains from changes in financial assumptions 9,562 3,930
Experience adjustments 161,636 69,715
Remeasurements of fair value of plan assets 20,691 8,604
191,889 82,249

f) Movement in the present value of defined benefit obligations
Defined benefit obligations at beginning of the year 1,011,303 819,879
Benefits due but not paid (3,447) (469)
Remeasurement of plan obligation 171,198 73,646
Defined benefit obligations at end of the year 1,943,615 1,011,303
177

2022 2021
g) Movement in the fair value of plan assets

Fair value at beginning of the year (134,086) (138,009)
Transferred from associated companies (321,173) –
Contributions (70,860) (12,629)
Interest income on plan assets (33,427) (13,070)
Return on plan assets excluding interest income 20,691 8,604
Benefits due but not paid – 469
Benefits paid 57,493 20,549
Fair value at end of the year (481,362) (134,086)

h) Plan assets comprise of:
Deposit with banks 391,687 46,279
Mutual funds 89,675 70,715
Investment in TDRs – 17,561
Payables – (469)
481,362 134,086
2022 2021

i) The principal assumptions used in the actuarial



j) Sensitivity analysis
Discount rate 1% (151,677) 168,249

k) The expected contribution to defined benefit obligation for the year ending December 31, 2023 will be
Rs 179.83 million.
2022 2021
10.1.2 Accumulating compensated absences

Present value of defined benefit obligations (e) 121,465 78,202
178
2022 2021

Charge for the year (c) 27,825 (34,635)

Loss / (gain) arising on plan settlements 9,794 (41,764)
27,825 (34,635)

Cost of sales 24,961 (21,574)
Administrative expenses 2,372 (13,061)
Distribution expenses 492 –
27,825 (34,635)

e) Movement in the present value of obligation
Obligation at beginning of the year 78,202 304,960
Gain on plan assets – (41,764)
Actuarial loss from changes in demographic assumptions 82 –
Actuarial loss from changes in financial assumptions 10,885 –
Defined benefit obligations at end of the year 121,465 78,202
2022 2021
f) The principal assumptions used in the actuarial


179



g) Sensitivity analysis
Discount rate 1% (5,992) 8,950
2022 2021

10.2 Provision for Gas Infrastructure
Provision for GIDC 10.2.1 & 10.2.2 5,633,182 5,359,025
Less: Current portion of provision for GIDC 11 4,533,452 3,066,199
1,099,730 2,292,826

10.2.1 Movement of provision for Gas Infrastructure
Unwinding of provision for GIDC 274,157 367,524
5,633,182 5,359,025

10.2.2 The Company has accrued Rs 5,869.01 million (2021: Rs 5,869.01 million) on account of Gas Infrastructure
Development Cess (GIDC). On August 13, 2020 the Supreme Court of Pakistan (SCP) through its order
declared GIDC Act as intra vires to the constitution and directed all the industrial and commercial entities to
pay the Cess that have become due up to July 31, 2020. However, as a concession, the same was allowed
to be recovered in twenty four equal monthly installments starting from August 01, 2020.
Subsequently, SCP also dismissed all review petitions on November 02, 2020, against the gas consumers
including the Company and stated that the Government of Pakistan is agreeable to recover the arrears in
forty eight monthly installments instead of twenty four equal monthly installments.

Although, the Company has filed a suit for declaration and injunction in the High Court of Sindh and obtained
a stay on October 06, 2020 against collection / recovery of GIDC by Mari Petroleum Company Limited on fuel
stock on account of issues of computation of the liability. On a prudent basis, the Company has continued
to recognise the provision against GIDC on fuel stock.

Company’s Sadiqabad Plant, entitled to receive feed stock at fixed price inclusive of all taxes, duties, levies,
fees and charges under Sovereign Commitment from Government of Pakistan pursuant to Fertilizer Policy
2001, has not booked GIDC on feed stock.

The Company has also filed a suit for declaration and permanent injunction in the High Court of Sindh
on these grounds on September 29, 2020 and obtained a stay on October 06, 2020 against collection /
recovery of GIDC on feed stock.
The management has applied the requirements of IAS 37 and “Guidance on Accounting of GIDC” issued by
the Institute of Chartered Accountants of Pakistan (ICAP) for recognition, measurement and presentation of
the provision for GIDC and had recognised a temporary gain on remeasurement of such provision amounting
to Rs 877.51 million in 2020. During the period, this temporary gain has been reversed by Rs 274.16 million
accumulating to Rs 641.68 million as at reporting date, in accordance with the requirements of IFRS and the
guidance referred above.
180
2022 2021

11 Trade and other payables
Creditors 26,293,613 12,972,742
Current portion of provision for GIDC 10.2 4,533,452 3,066,199
Contract liabilities 11.1 8,376,123 11,039,853
Accrued liabilities 8,909,304 6,112,629
Withholding tax 122,187 69,199
Workers profit participation fund 11.2 5,450,182 4,260,908
Workers welfare fund 11.3 1,350,752 757,668
Retention money payable 64,862 64,954
Provident fund payable 35,571 19,232
Others 235,243 105,946
55,371,289 38,469,330

11.1 Contract liabilities as at the beginning of the year, aggregating to Rs 11,031.79 million (2021: Rs 6,913.10 million),
have been recognised as revenue upon meeting the performance obligations.

2022 2021
11.2 Workers’ profit participation fund

Balance at January 01 4,260,908 2,991,057
Charge for the year 33 1,650,714 1,518,911
Balance at December 31 5,450,182 4,260,908

11.3 Workers’ welfare fund
Balance at January 01 757,668 391,409
Charge for the year 702,005 739,805
Reversal of provision during the year (108,921) (65,598)
Net charge for the year 33 593,084 674,207
Payments made during the year – (307,948)
Balance at December 31 1,350,752 757,668

12 Accrued finance cost
On long term finances 344,853 160,323
On short term finances 370,154 146,861
715,007 307,184
13 Short term finances

Secured loans from banking companies
Cash finance 13.1 – 850,000
Finance against imported merchandise 13.2 8,142,058 3,915,307
8,142,058 4,765,307
Running finance 13.3 4,741,460 1,700,465
12,883,518 6,465,772
181

13.1 These facilities have been obtained from various banks for working capital requirements, and are secured by
pledge of raw material and finished goods. The facilities carry markup ranging from 13.78% to 17.05% (2021:
7.90% to 11.09%) per annum.
13.2 These facilities have been obtained from various banks against imported merchandise. These facilities carry
markup ranging from 8.30% to 17.51% (2021: 7.61% to 10.47%) per annum.

13.3 These facilities have been obtained from various banks for working capital requirements, and are secured by
pari passu charge of Rs 22,342.01 million (2021: Rs 19,468.68 million) on present and future current assets
and by personal guarantees of sponsoring directors. These facilities carry markup ranging from 8.87% to
18.31% (2021: 7.55% to 10.52%) per annum.

13.4 The aggregate unavailed short term borrowing facilities amount to Rs 19,608.54 million (2021: Rs 19,472.97
million).
2022 2021
14 Deferred government grant

Opening balance of government grant 61,440 122,966
Amortization of deferred government grant (61,440) (61,526)
– 61,440
Less: Current portion of deferred government grant – 61,440
– –

14.1 This represents deferred government grant in respect of term finance facilities obtained under SBP Salary
Refinance Scheme as disclosed in note 7.2.4 and 7.2.5 to the financial statements. These facilities carried
markup at subsidised rates, as specified by SBP. These loans had been recognised at their fair value which
was the present value of the loan proceeds received and discounted at the market interest rates for similar
instruments. The differential between the fair value and the present value was recognised as deferred
government grant, which has been amortised over the term of the respective facilities at the effective interest
rate.
15 Contingencies and commitments

15.1 Contingencies

(i) Till final decision in the matter, the Honorable Lahore High Court (the Court) has suspended the operation of
the impugned order of the Commissioner Inland Revenue, Multan, who rejected the Company’s application
under section 65 of the Sales Tax Act, 1990 regarding exemption of sales tax estimating Rs 690 million
inadvertently short levied / paid on its fertilizer product, Calcium Ammonium Nitrate for the period from
April 18, 2011 to December 31, 2011.
The court had ordered the Company to file a fresh application under the said section after declaring the
earlier rejection of the Company’s application filed with FBR as unlawful and ultra vires.

(ii) The Company has filed an appeal before the ATIR dated August 05, 2020 against the order passed by the
CIR(A) whereby the order passed under section 11 of the of Sales Tax Act, 1990 (STA) by the assessing
officer amounting to Rs 501 million was set aside. CIR(A), through its order dated June 8, 2020, set aside the
impugned order instead of ‘deleting / annulling’ the same and resultantly the Company assailed the same
before ATIR. The assessing officer had raised the demand by charging sales tax on advances received from
customers.

182
(iii) The Company’s appeal filed with CIR(A) against the order amounting to Rs 7,745 million has been succeeded
and the order has been annulled. CIR(A) through order dated February 19, 2022 decided the case in the
favour of the Company on legal touchstone thereby quashing the selection of case for audit u/s 25 by
placing reliance on the judgment of LHC in case of M/S Hyundai Nishat Motors (Pvt.) Ltd vs FBR vide WP
25793/2021. The tax department has also filed an appeal before the ATIR dated June 11, 2022 against the
order of CIR(A) which is pending for adjudication as of date. Initially, the demand was raised against the
Company by selecting it for the sales tax audit u/s 25 of STA for the tax periods from July 2016 to June 2017.
(iv) The Company has filed an appeal before the CIR (A) dated July 13, 2022 against the order u/s 11 of the
STA. The assessing officer raised a demand of Rs 122 Million against the Company by disallowing the
admissibility of sales tax on various items claimed during July 2020 to June 2021 and invoking the provisions
of section 8 of STA.

(v) The Company’s appeal filed with CIR(A) against the impugned order has not been succeeded. Resultantly,
the Company has filed an appeal before the ATIR in October 2022 against the adverse order of CIR(A)
which is pending for adjudication as of date. The assessing officer had raised the impugned demand of
Rs 4,272 million against the Company by disallowing the admissibility of sales tax on various items claimed
during January 2021 to November 2021 and invoking the provisions of section 8 of STA.

(vi) The Company has filed a constitutional petition (CPLA) before Supreme Court of Pakistan dated
January 17, 2023 against the adverse order of LHC, through which, the rectification order of ATIR had been
declared void ab initio on legal infirmity. Resultantly, the original order passed by the assessing officer stood
reinstated wherein, the assessing officer alleged that the Company had short paid sales tax by suppression
of its production during June 2014 to September 2014. Total demand raised was Rs 628 million.

(vii) The Department has filed an appeal in the Appellate Tribunal Inland Revenue (ATIR) in September 2019
against the order passed by the Commissioner Inland Revenue (‘CIR (A)’), whereby the order passed
under section 122(5) of the Income Tax Ordinance, 2001 by the Deputy Commissioner Inland Revenue
(DCIR) Multan amounting to Rs 1,055 million was annulled. The DCIR had declared the Company’s trial run
production / gain as ‘Commercial production’ thereby imposing consequential income tax towards taxable
(viii) The Company has preferred an appeal before the ATIR in June 2021 against the order passed by the CIR(A),
whereby the adverse order passed u/s 122(5A) of the Income Tax Ordinance, 2001 by the assessing officer
amounting to Rs 1,577 million was confirmed. The assessing officer disallowed and added back various
admissible deductions and credits claimed by the Company towards its taxable income for Tax Year 2016.
(ix) The Department has filed an appeal in the ATIR in May 2019 against the order passed by the CIR(A)
whereby the order passed under section 122(5A) of the Income Tax Ordinance passed by the Additional
Commissioner Inland Revenue (‘ACIR’) Multan amounting to Rs 1,592 million was annulled. The ACIR had
disallowed and added back various admissible deductions claimed by the Company towards its taxable

(x) The Company has preferred an appeal before the ATIR dated August 05, 2021 against the order passed by
the CIR(A), whereby the adverse order passed under section 122(5A) of the Income Tax Ordinance, 2001
by the assessing officer amounting to Rs 930 million was confirmed. The assessing officer earlier raised the
alleged demand by disallowing tax credits and adding back various admissible deductions of the Company
towards its taxable income thereby imposing consequential income tax for Tax Year 2018.

(xi) The Company has filed an Intra Court Appeal at the Honorable Lahore High Court (‘LHC’) in April 2022
against dismissal of the petition challenging levy of Alternative Corporate Tax (ACT) dated March 28, 2022.
ACT was imposed at the rate of 17% of ‘accounting profit before tax’ through Finance Act 2014, by inserting
Section 113C in the Income Tax Ordinance, 2001. The Company has challenged the levy of ACT for Tax years
2015 and 2014, on the grounds that it deprived the Company of certain rights already accrued to it. Such
appeal regarding challenging the vires of ACT is still pending for adjudication at LHC.
183

However, the assessing officer through orders dated May 17, 2022 and December 27, 2022 passed u/s
122(5A) of the Income Tax Ordinance 2001, raised alleged demands of Rs 2,031 million and Rs 1,580 million
on account of ACT matters pertaining to tax years 2015 and 2014 respectively. The Company contested
the issue before CIR(A) in June 2022 against such adverse orders and has also paid the outstanding tax
demands to the extent of ACT involved therein. Moreover, CIR(A) through order dated February 27, 2023,
decided the appeal in the favour of company for Tax Year 2015.

(xii) The Company has filed appeal with the Customs Appellate Tribunal, Lahore against the following three
cases decided against the Company by the Collector of Customs (Adjudication), Faisalabad. Earlier these
cases were remanded back to Collector of Customs (Adjudication), Faisalabad for rehearing the case by the
Customs Appellate Tribunal, Lahore:
– Alleged irregular claim of exemption under SRO 575 on import of 20 consignments of seamless
pipes. Demand raised Rs 113.96 million.
– Alleged irregular claim of exemptions under SRO 575 on import of 7 consignments of deformed steel
bars. Demand raised Rs 150.60 million.
– Alleged irregular claim of exemptions under SRO 575 on import of 64 consignments of various items
of capital nature. The Company has filed an appeal before the Custom Appellate Tribunal, Lahore
against the order passed by the Collector (Adjudication), Faisalabad in which he again raised a
demand of Rs 495.90 million. Earlier the case had been remanded back to Collector of Customs
(Adjudication), Faisalabad for re-hearing by the Custom Appellate Tribunal, Lahore.

(xiii) The Customs department has filed an appeal before the Lahore High Court against of Order passed by the
Custom Appellate Tribunal which had annulled the order passed by the Collector of Customs (Adjudication),
Faisalabad, alleging that the Company applied incorrect exchange rate of Rs 60.85 per USD instead of
Rs 79 per USD on import clearance of 7 consignments of deformed steel bars. Total demand raised was
Rs 17.94 million.
Based on the advice of the Company’s legal counsels and tax advisor, management considers that reasonable
grounds exist that all the above appeals will succeed. Consequently, no provision has been recognised for the
above mentioned amounts.

(xiv) The Company has issued Corporate Guarantee in favour of Pakarab Fertilizers Limited (an associated
undertaking) amounting to Rs 4,845 million (2021: Rs 5,271 million). The Company has secured approval of
the shareholders for the aforementioned Corporate Guarantee amounting to Rs 7,000 million.
2022 2021

15.2 Commitments in respect of:
(i) Contracts for capital expenditure 1,227,199 3,880,314
(ii) Contracts for other than capital expenditure 3,019,144 3,605,830
(iii) The amount of future payments under ijarah

rentals and short term / low value leases:
- Not later than one year 928,973 231,860
- Later than one year but not later than five years 1,269,832 144,174
2,198,805 376,034
16 Property, plant and equipment

Operating fixed assets 16.1 98,693,731 99,741,174
Capital work in progress 16.2 10,372,439 5,681,290
109,066,170 105,422,464
184
16.1 Operating fixed assets
2022


Freehold land 16.1.1 2,546,706 951,989 3,498,695 – – – 3,498,695 –

(15,745) (912)
Aircraft 1,567,285 – 1,567,285 287,336 78,364 365,700 1,201,585 10
Catalysts 3,179,169 57,067 3,236,236 2,869,379 103,824 2,973,203 263,033 10 - 33.33
(1,088) (1,088)
–
Electrical installations and appliances 1,448,688 456,087 1,902,363 924,485 117,163 1,039,236 863,127 10
(2,412) (2,412)
Computers 671,940 221,924 871,436 461,887 110,050 549,718 321,718 25
(22,428) (22,219)
Vehicles 643,045 343,626 959,291 360,416 110,454 453,112 506,179 20
(27,380) (17,758)
Right of use assets - plant and machinery 1,156,485 – 866,049 157,829 116,859 202,079 663,970 10 - 12.5
(290,436) (72,609)
Right of use assets - land and building 985,208 152,313 1,137,521 284,606 127,799 412,405 725,116 10 - 33.33
125,476,084 4,526,425 129,643,020 25,734,910 5,331,377 30,949,289 98,693,731

(359,489) (116,998)
2021


Freehold land 2,480,836 65,870 2,546,706 – – – 2,546,706 –

Aircraft 1,567,285 – 1,567,285 208,971 78,365 287,336 1,279,949 10
Catalysts 3,079,712 99,457 3,179,169 2,648,433 220,946 2,869,379 309,790 10 - 33.33
(4,587) (4,587)
(734) (727)
Electrical installations and appliances 1,247,387 203,040 1,448,688 840,817 85,299 924,485 524,203 10
(1,739) (1,631)
Computers 562,908 124,656 671,940 393,659 83,424 461,887 210,053 25
(15,624) (15,196)
Vehicles 425,025 218,020 643,045 303,812 56,604 360,416 282,629 20
Right of use assets - plant and machinery 1,858,971 – 1,156,485 165,381 138,799 157,829 998,656 5 - 12.5
(702,486) (146,351)
Right of use assets - land and building 992,149 – 985,208 158,975 130,321 284,606 700,602 10 - 33.33
(6,941) (4,690)
121,386,937 4,821,258 125,476,084 20,662,372 5,245,720 25,734,910 99,741,174

(732,111) (173,182)
185

16.1.1 Particulars of land in the name of the Company are as follows:
Descriptions Location Land Area

Free hold Land Sadiqabad, District Rahim Yar Khan 8,884 kanals
Free hold Land Chichoki Mallian, District Sheikhupura 1,776 kanals
Free hold Land Jahangirabad, District Multan 351 kanals
Free hold Land Dherki, District Ghotki, Sindh 215 kanals
2022 2021

Civil works 430,395 175,861
Plant and machinery 3,262,113 1,882,284
Capital stores 4,343,459 1,799,228
Advances:
- Freehold land 379,986 756,240
- Plant and machinery 1,956,486 1,067,677
2,336,472 1,823,917
10,372,439 5,681,290

16.2.1 Movement of capital work in progress
Additions during the year 7,823,344 4,751,907
13,518,103 8,965,075
Less: Capitalization during the year 3,103,857 3,270,316
10,414,246 5,694,759
Less: Provision for slow moving capital stores 41,807 13,469
Closing balance 10,372,439 5,681,290

16.3 The depreciation charge for the year has
been allocated as follows:
Cost of sales 5,036,065 4,998,414
Distribution cost 11,730 8,696
5,331,377 5,245,720

186
16.4 Disposal of property, plant and equipment
Cost Accumulated Book Sale Gain / Mode of disposal

depreciation value proceeds (loss)

above Rs 500,000
Plant and machinery 15,745 912 14,833 – (14,833) Company policy

Vehicles 20,790 11,168 9,622 13,647 4,025 Company policy

below Rs 500,000
Furniture and fixture 1,088 1,088 – 439 439 Company policy
Vehicles 6,590 6,590 – 3,036 3,036 Company policy
Computers 22,428 22,219 209 1,173 964 Company policy
Electrical installations and appliances 2,412 2,412 – 613 613 Company policy
2022 69,053 44,389 24,664 18,908 (5,756)
2021 22,684 22,141 543 3,430 2,887
17 Intangible assets
2022

Bubber Sher brand 5,900,000 – 5,900,000 2,360,000 – – 2,360,000 3,540,000 –

6,166,670 85,109 6,251,779 2,557,793 42,640 – 2,600,433 3,651,346

2021

Bubber Sher brand 5,900,000 – 5,900,000 – – 2,360,000 2,360,000 3,540,000 –

6,146,929 19,741 6,166,670 155,910 41,883 2,360,000 2,557,793 3,608,877

17.1 The amortization / impairment charge for the year has been allocated to administrative / other operating
expenses.
18 Investment property
2022


Freehold land 18.1 754,577 (609,014) 145,563 – – – 145,563 –
Building 22,650 – 22,650 1,888 906 2,794 19,856 4
777,227 (609,014) 168,213 1,888 906 2,794 165,419
187

2021

Freehold land 734,521 20,056 754,577 – – – 754,577 –

Building 22,650 – 22,650 982 906 1,888 20,762 4
757,171 20,056 777,227 982 906 1,888 775,339
18.1 Freehold land consists of 8,127.78 Kanals situated in District Dera Ismail Khan, Khybar Pakhtunkhwa. The
land is in possession and control of the Company and currently it is in the name of the three Directors of the
Company, Mr. Fawad Ahmed Mukhtar, Mr. Fazal Ahmed Sheikh and Mr. Faisal Ahmed Mukhtar, which will be
transferred in the name of the Company in due course of time.
18.2 Latest valuation of investment property was carried by an independent professional valuator on December
24, 2022. The fair value of these investment properties is determined to be Rs 394.13 million.
2022 2021

19 Long term investments
In associates - equity method
Fatima Agri Sales & Services (Pvt) Limited 19.2 32,575 110,301
Multan Real Estate Company (Pvt) Limited 19.3 86,581 84,987
Fatima Electric Company Limited 19.4 23 23
Singfert PTE. Limited 19.5 – –
119,179 195,311
In wholly owned subsidiary companies - at cost
Fatima Cement Limited 19.6 300,030 –
Fatimafert Limited 19.7 200 200
Pan-Africa Fertilizers Limited 19.8 – –
300,230 200
At fair value through other comprehensive income (FVTOCI)
Silk Islamic Development REIT 19.9 600,000 600,000
At amortised cost
Bank Al-Habib Limited - Term Finance Certificate 750,000 –
1,769,409 795,511
19.1 Movement in investment in associates

2022
Fatima Agri Sales & Services (Pvt) Limited 110,301 – (70,002) (7,725) 32,575
Multan Real Estate Company (Pvt) Limited 84,987 – 1,594 – 86,581
Fatima Electric Company Limited 23 – – – 23
195,311 – (68,408) (7,725) 119,179
188
2021

Fatima Agri Sales & Services (Pvt) Limited 115,755 – 528 (5,982) 110,301
Multan Real Estate Company (Pvt) Limited 85,851 – (864) – 84,987
Fatima Electric Company Limited 35 – (12) – 23
201,641 – (348) (5,982) 195,311
19.2 This represents investment in 196,000 fully paid ordinary shares of Rs 10 each of Fatima Agri Sales &
Services (Pvt) Limited (FASS). The investment represents 49% (2021: 49%) of the total issued, subscribed
and paid up share capital of FASS.

The principal activity of FASS is to carry on business as a sellers, marketers, importers, exporters, wholesalers,
retailers and dealers in all types of agri inputs including fertilizers, micronutrients, pesticides and insecticides,
seeds, vaternity and live stock feeds and feeds supplements, fish feeds and its supplements. The registered
office of FASS is located at E-110, Khayaban-e-Jinnah, Lahore Cantt., Pakistan.

19.3 This represents investment in 858,056 fully paid ordinary shares of Rs 100 each of Multan Real Estate
Company (Pvt) Limited (MREC). The investment represents 28.37% (2021: 39.5%) of the total issued,
subscribed and paid up share capital of MREC. The main business of MREC is establishing and designing
housing and commercial schemes, to carry on business of civil engineers for construction of private and
governmental buildings and infrastructure and provision of labour and building material. The registered
office of MREC is located at 2nd floor, Trust Plaza, L.M.Q Road, Multan.

19.4 This represents investment in 14,000 fully paid ordinary shares of Rs 10 each of Fatima Electric Company
Limited (FECL). The investment represents 40% (2021: 40%) of the total issued, subscribed and paid up
share capital of FECL.

The main business of FECL is transmission, manufacture, supply, generation and distribution of electricity
and all forms of energy and power. The registered office of FECL is located at E-110, Khayaban-e-Jinnah,
19.5 This represents investment in 1 fully paid ordinary share of SGD 1 each of Singfert PTE. Limited (Singfert), a
company formed and registered in the Republic of Singapore. The investment represents 25% (2021: 25%)
of the total issued, subscribed and paid up share capital of Singfert.
Singfert is a Special Purpose Vehicle (SPV) which will be used to route equity investment in Midwest Fertilizer
Company (MFC), USA. MFC is setting up a nitrogen fertilizer project in the State of Indiana, USA.

19.6 This represents investment in 30,003,000 (2021: nil) fully paid ordinary shares of Rs 10 each of its wholly
owned subsidiary Fatima Cement Limited (FCL), as approved by the Board of Directors of the Company in
their meeting held on April 07, 2022.

The principal activity of FCL is manufacturing, producing, buying, selling, importing and exporting cement.
The registered office of FCL is located at E-110, Khayaban-e-Jinnah, Lahore Cantt., Lahore, Pakistan.

19.7 This represents investment in 20,000 (2021: 20,000) fully paid ordinary shares of Rs 10 each of its wholly
owned subsidiary company Fatimafert Limited (FFT).

189

The principal line of business of FFT is to carry on business of manufacture, produce, treat, refine, reduce
and process all kinds of artificial manures and fertilizers, chemicals and minerals and any products and
by-products which may be prepared therefrom. The registered office of the FFT is located at E-110,
Khayaban-e-Jinnah, Lahore Cantt., Lahore, Pakistan.
19.8 This represents incorporation of a wholly owned subsidiary company in Kenya. The principal business of this
company is trade marketing services including but not limited to manufacturing and / or sales / provision
of fertilizer products or alike or any other business. The registered address of the company is located at
Westlands District, Nairobi, Kenya.

19.9 This represents 60,000,000 units of Rs. 10 each held in a privately placed closed - end shariah compliant
apartment development REIT scheme which constitutes 20% of the total 300 million units issued (the
Investment). This REIT Scheme is managed by Arif Habib Dolmen REIT Management Company Limited. The
proportionate fair value of the investment approximates the investment made by the Company in the REIT
units as at December 31, 2022.
The Company has valued this investment on fair value basis using the assumption that as the primary asset
of REIT comprises parcels of land (Land) which have been recently purchased by the REIT, the Land has
been valued by a third party valuer, which approximates the fair value of consideration paid in respect of
purchase of such land as at December 31, 2022. Hence, based on above, the proportionate fair value of the
Investment approximates the investment made by the Company in the REIT Units as at December 31, 2022.
2022 2021
20 Long term loan to an associated company

Long term loan to an associated company 20.1 2,999,000 2,999,000
Less: Current portion – 999,667
2,999,000 1,999,333

20.1 This represents loan of Rs 3,000 million approved in the Extra Ordinary General Meeting held on
December 23, 2016 in favour of Pakarab Fertilizers Limited, an associated company. As per the terms of
the agreement, the loan was for 5 years period with two and a half years as grace period. However in 16th
annual general meeting held on April 30, 2019 it was resolved that grace and repayment period is extended
for further 3 years and has been extended for further three years in 19th annual general meeting held on
April 29, 2022. The loan is receivable in 6 semi annual equal installments. Interest is to be settled semi
annually. The maximum amount of loan outstanding during the year was Rs 2,999 million.

The loan carries mark up rate at 6 months KIBOR plus 2% per annum. Effective rate of markup charged
during the year ranged from 13.26% to 17.83% (2021: 9.47% to 13.62%).

The loan is fully secured against ranking charge on all present and future fixed assets of the associated
company excluding immovable property i.e. land and buildings and complete carbon dioxide recovery /
liquefaction plant (along with storage tank, tools, spares and accessories).
2022 2021
21 Stores and spares

Stores 986,605 495,097
Spares {including in transit: nil (2021: Rs 565.69 million)} 9,548,141 7,498,447
Catalyst and chemicals 4,513,747 3,672,827
15,048,493 11,666,371
Less: Provision for slow moving stores and spares 325,998 100,538
14,722,495 11,565,833
190
2022 2021
22 Stock in trade
Raw materials {including in transit Rs 3,676.14 million
(2021: Rs 3,871.03 million)} 6,003,367 10,558,828
Packing materials 59,893 28,981
6,063,260 10,587,809
Mid products
Ammonia 161,252 95,189
Nitric acid 19,941 22,425
Others 877 4,950
182,070 122,564
Finished goods
Own manufactured
Urea 58,834 247,278
NP 16,844,077 5,185,720
CAN 13,060 29,333
Certified emission reductions 42,810 51,981
16,958,781 5,514,312
Purchased for resale
9,283,687 2,107,096
32,487,798 18,331,781

23 Trade debts
Secured against bank guarantees 13,208,391 5,574,393
Unsecured - considered good 23.1 9,622,617 4,079,915
22,831,008 9,654,308

23.1 This includes Rs 9,605.80 million (2021: Rs 4,008.44 million) receivable from Pakarab Fertilizers Limited,
an associated company, on account of toll manufacturing in the normal course of business. There is
no past due debt at the reporting date. Maximum amount outstanding at any time during the year was
2022 2021

24 Short term loans
Reliance Commodities (Pvt) Limited 24.1 4,999,723 4,999,723
Pakarab Fertilizers Limited 24.2 3,500,000 2,000,000
8,499,723 6,999,723

24.1 This represents loan given to an associated company Reliance Commodities (Pvt) Limited, against an
approved limit of Rs 1,250 million, which was enhanced to Rs 5,000 million at the Annual General Meeting
dated April 26, 2021. The loan is repayable within 30 business days notice of demand. The markup rate
on the said loan is 6 months KIBOR plus 2% per annum. Effective rate of markup charged during the
year ranged from 10.85% to 17.84% (2021: 9.41% to 10.85%). The loan is fully secured against a ranking
charge over the present and future current assets of the associated company. The maximum amount of loan
outstanding during the year was Rs 4,999.72 million.
191

24.2 This represents loan against aggregate approved facility of Rs 2,000 million provided to an associated
company Pakarab Fertilizers Limited, which was enhanced to Rs 5,000 million at the Extra Ordinary General
Meeting dated December 27, 2022, to support functionality and business requirements. The loan is repayable
within 30 business days notice of demand. The loan is fully secured against a ranking charge over the
present and future current assets of the associated company. The markup rate on the said loan is 6 months
KIBOR plus 2% per annum. Effective rate of markup charged during the year ranged from 10.85% to 17.84%
(2021: 9.47% to 10.85%). The maximum amount of loan outstanding during the year was Rs 3,500 million.
2022 2021
25 Advances, deposits, prepayments and other receivables

Advances - considered good
- to employees 31,818 17,710
- to suppliers 25.1 2,344,973 2,631,781
2,376,791 2,649,491
Advance against investment 25.2 2,225,796 –
Impairment against advance (2,225,796) –
– –
Margin deposits held by banks 534,618 463,595
Prepayments 1,432,001 138,624

Receivable from Government of Pakistan (GoP)
- Advance sales tax 10,482,863 9,283,706
- Subsidy receivable 1,838,075 1,838,075
Loss allowance on subsidy receivable 25.3 (579,689) (469,965)
11,741,249 10,651,816
Advance sales tax on receipts 22,774 25,131
Markup receivable 1,170,376 339,290
Current portion of long term loan to an associated company – 999,667
Others 239,410 368,231
17,517,219 15,635,845

25.1 This includes balance of Rs 295.01 million (2021: Rs 545.78 million) to Pakarab Fertilizers Limited,
Rs 127.84 million (2021: Rs 345.62 million) to Fatima Packaging Limited and Rs 326.78 million
(2021: Rs 283.14 million) to Fatima Agri Sales & Services (Pvt) Limited, which are related parties of the
Company and are in the nature of normal course of business.
25.2 This represents advance which the Company has contributed in technology sector through funding rounds,
carrying preferential rights over other investors. Considering the global economic meltdown and prevailing
economic conditions the said contribution carries potential risk of remeasurement. The management is
assessing multiple avenues to mitigate such risk. Entire balance has been provided for by the management
during the year.

25.3 This represents loss allowance on subsidy receivable from GoP in accordance with requirement of IFRS 9.
However, management is confident of recovering the full amount from GoP.
192
2022 2021
26 Short term investments

Investments - FVTPL 26.1 4,067,140 2,242,710

26.1 These consist of investments made in equity instruments of various listed companies.
2022 2021

27 Cash and bank balances
Cash in hand 4,603 7,415
At banks
- saving accounts 27.1 1,718,850 120,392
- current accounts 593,720 4,515,394
- term deposit receipt 292,150 2,700,000
2,609,323 7,343,201

27.1 The balances in saving accounts carry markup ranging from 8.25% to 15% (2021: 5.50% to 8.50%)
per annum.
2022 2021
28 Sales
Revenue from contracts with customers
Local sales 28.1 151,984,635 112,488,420
Export sales - Certified Emission Reductions 246,642 –
152,231,277 112,488,420

28.1 Local sales
Own manufactured 104,273,728 90,264,959
Toll manufacturing 45,924,050 19,688,180
Mid products 1,371,663 1,186,215
Purchased for resale 3,831,812 5,402,141
155,401,253 116,541,495
Less: Sales tax 1,496,733 2,488,713
Discounts 1,919,885 1,564,362
151,984,635 112,488,420

193

2022 2021
29 Cost of sales
Raw material consumed 72,699,400 33,894,924
Packing material consumed 3,491,244 2,435,781
Fuel and power 10,453,028 7,705,650
Chemicals and catalyst consumed 3,321,900 2,177,509
Stores and spares consumed 4,345,289 2,560,802
Depreciation 16.3 5,036,065 4,998,414
Technical assistance 523,118 477,832
Repair and maintenance 6,152,332 1,724,118
Insurance 1,150,277 841,210
Rent, rates and taxes 697,410 386,755
Vehicle running and maintenance 254,402 137,654
Others 277,704 147,582
Subsidy on RLNG released by GoP to SNGPL 29.2 (7,892,654) (1,532,564)
Manufacturing cost 108,906,573 62,145,770
Opening stock of mid products 122,564 311,053
Closing stock of mid products (182,070) (122,564)
Cost of goods manufactured 108,847,067 62,334,259
Opening stock of finished goods 5,514,312 8,373,200
Closing stock of finished goods (16,958,781) (5,514,312)
Cost of sales - own manufactured 97,402,598 65,193,147
Cost of sales - purchased for resale 2,885,987 4,210,829
100,288,585 69,403,976

29.2 This represents subsidy related to prior year, released by Government of Pakistan (GoP) to SNGPL, as the
difference between full RLNG price billed to the Company (Sheikhupura plant) by SNGPL and the gas price
capped by GoP for fertilizer plants operating on RLNG.
2022 2021
30 Distribution cost
Salaries, wages and other benefits 935,695 248,087
Fee for services 30.1 617,105 998,240
Advertisement and sales promotion 910,799 481,973
Transportation and freight 4,503,050 2,854,070
Technical services to farmers 137,165 51,556
Insurance 48,686 11,948
Others 202,737 67,363
7,947,081 5,048,813

194
30.1 This amount represents fee for marketing and distribution services charged by an associated company -
Fatima Agri Sales and Services (Pvt.) Limited for the first half of the year. The Company had outsourced
its marketing and distribution function to Fatima Agri Sales and Services (Pvt.) Limited. However, the
arrangement has been cancelled on June 30, 2022 and all the employees have been transferred to the
Company with effect from July 01, 2022.
30.2 This includes rental paid for short term leases aggregating to Rs 374.10 million (2021: Rs 332.20 million) and
ijarah lease rentals aggregating to Rs 82.08 million (2021: Nil).
2022 2021
31 Administrative expenses
Vehicles’ running and maintenance 110,760 51,588
Insurance 14,878 10,550
Communication and postage 55,031 47,280
Printing and stationery 49,090 25,270
Repair and maintenance 91,275 66,741
Fees and subscription 195,587 119,556
Entertainment 47,735 20,798
Legal and professional 595,233 74,576
Auditors’ remuneration 31.3 11,098 7,936
Utilities 53,510 35,119
Aircraft operating expenses 205,811 275,780
Depreciation on operating fixed assets 16.3 283,582 238,610
Amortization 17 42,640 41,883
Charity and donation 31.4 1,021,235 712,796
Others 306,358 94,991
5,902,070 3,899,598


31.2 This includes rental paid for low value leases amounting to Rs 18 million (2021: Rs 20.38 million) and ijarah
lease rentals amounting to Rs 89.98 million (2021: Rs 42.15 million).
31.3 The breakup of statutory auditors’ remuneration including non adjustable sales tax is as follows:
2022 2021

Annual audit fee 4,836 4,124
Half yearly review fee 606 578
Others 31.3.1 4,625 2,558
Out of pocket expenses 1,031 676
11,098 7,936

31.3.1 Others include special audits fee of Rs 4.17 million (2021: Rs 2.07 million).
31.4 Donations
31.4.1 Donations paid to Mian Mukhtar A. Sheikh Trust (the Trust) exceeds 10% of the Company’s total amount of
donation.
195

31.4.2 Donations include the following in which certain directors are interested:
2022 2021
Name of directors Interest in donee Name of donees (Rupees in thousand)
Mr. Fawad Ahmed Mukhtar Mian Mukhtar

Mr. Faisal Ahmed Mukhtar Trustees A. Sheikh Trust 658,514 528,000
Mr. Fazal Ahmed Sheikh
Member of the Board
of Governors of National Lahore University of
Mr. Fawad Ahmed Mukhtar Management Foundation Management 9,216 10,960
(NMF) the sponsoring Sciences (LUMS)
body of LUMS.

2022 2021
32 Finance cost
Markup on:
- long term finances 1,114,999 712,359
- short term finances 1,006,488 878,625
Bank charges and others 656,480 254,382
2,929,107 2,006,559

33 Other operating expenses
Workers’ Profit Participation Fund 11.2 1,650,714 1,518,911
Workers’ Welfare Fund 11.3 593,084 674,207
Impairment against advance 25.2 2,225,796 –
Impairment of brand – 2,360,000
Loss on remeasurement of investments classified as FVTPL 815,721 117,648
Loss on sale of investments classified as FVTPL 12,609 –
Loss on disposal of investment property 79,070 –
Loss on disposal of property, plant and equipment 5,756 –
Exchange loss - net 954,202 6,211
6,336,952 4,676,977

34 Other income
Income from financial assets
Profit on loans to related parties 1,521,220 839,424
Gain on sale of investment classified as FVTPL – 30,937
Profit on short term investments and saving accounts 282,426 96,516
Dividend income 305,900 217,225
2,109,546 1,184,102

Income from non financial assets
Scrap sales 3,540 18,535
Gain on disposal of property, plant and equipment – 2,887
Gain on disposal of stores and spares 289,116 –
Others 8,994 4,665
301,650 26,087
2,411,196 1,210,189
196
2022 2021
35 Taxation
Current tax
- Current year 10,590,741 9,900,868
- Prior year 35.1 3,576,814 (947,181)
14,167,555 8,953,687
Deferred tax 2,479,683 757,140
16,647,238 9,710,827

35.1 This includes an amount of Rs 3,494.88 million pertaining to the super tax for the year 2021.
2022 2021
(%)

35.2 Tax charge reconciliation
Numerical reconciliation between the average
tax rate and the applicable tax rate:
Applicable tax rate 29.00 29.00

Tax effect of :
Income exempt from income tax or taxed at lower rate (0.06) (0.11)
Super tax adjustment 4.00 –
Prior year adjustments 11.72 (3.36)
Deferred tax adjustments 8.79 –
Deductions disallowed 0.26 7.10
Others 0.36 1.82
25.07 5.45
Average effective tax rate charged to statement of profit or loss 54.07 34.45
2022 2021

36 Earnings per share - basic and diluted
Profit attributable to ordinary shareholders (Rupees in thousand) 14,139,151 18,474,266
Weighted average number of shares (Number of shares) 2,100,000,000 2,100,000,000
Basic and diluted earnings per share (Rupees) 6.73 8.80

37 Transactions with related parties
The related parties comprise the associated undertakings, directors and other key management personnel of the
Company. Company in the normal course of business carries out transactions with various related parties. Amounts
due from and to related parties have been disclosed in the relevant notes to the financial statements. Details of
transactions with related parties during the year, other than those which have been disclosed elsewhere in these
financial statements are as follows:
197

2022 2021
Relationship with the Company Nature of transaction

Subsidiary companies Acquisition of shares 300,030 –
Disposal of investment property 529,945 –
Payments made on behalf 367,292 –
Miscellaneous expenses 59,177 –

Associated companies Purchase of packing material 3,175,506 2,554,662
Purchase of raw material 1,438,446 2,222,372
Purchase of catalysts – 272,373
Purchase of stores and spares 1,104,943 462,560
Sale of mid products 152,774 118,602
Lease rental and license fee 256,278 345,095
Payment against sales collection 58,806,468 33,636,365
Toll manufacturing revenue 45,924,050 19,688,180
Employees retirement benefits transferred 274,536 –
Fee for services 2,253,672 3,059,353
Miscellaneous expenses 51,828 26,740
Short term loan given 1,500,000 3,758,000
Markup income 1,521,220 839,424
Dividend paid 3,793,102 1,618,502
Markup expense – 148,429

Directors and key Remuneration including
management personnel benefits and perquisites 557,424 353,194
Dividend paid 2,709,561 688,791

Retirement benefit plans Retirement benefit expense 464,505 254,055

37.1 Following are the related parties with whom the Company had entered into transactions or have arrangements
/ agreements in place.
Name Basis of Relationship Aggregate % of

shareholding in
the Company
Fatima Agri Sales & Services (Private) Limited Associated company Nil
Fatimafert Limited Subsidiary company Nil
Fatima Cement Limited Subsidiary company Nil
Pakarab Fertilizers Limited Common directorship Nil
Fatima Packaging Limited Common directorship Nil
Air One (Private) Limited Common directorship Nil
Arif Habib Corporation Limited Common directorship 15.19%
Fatima Holding Limited Common directorship 1.33%
Fazal Cloth Mills Limited Common directorship 3.29%
Reliance Weaving Mills Limited Common directorship 0.13%
Reliance Commodities (Pvt.) Limited Common directorship 0.02%
Fatima Management Company Limited Common directorship 7.64%
Arif Habib Equity (Private) Limited Common directorship 0.92%
Fatima Trading Company (Private) Limited Common directorship 7.03%
Farrukh Trading Company Limited Common directorship 7.64%
198
37.2 The Company considers its Chief Executive Officer, Executive Director, and Functional Heads as its key
management personnel.
2022 2021
Metric ton

38 Capacity and production
Urea
Designed production capacity 1,037,900 1,037,900
Actual production 1,095,084 800,634

CAN

NP
39 Remuneration of directors and management personnel

39.1 The aggregate amount charged in the financial statements for the year for remuneration, including certain
benefits, to full time working Directors and Executives of the Company are as follows:
Chief Executive Executive Director Executives
2022 2021 2022 2021 2022 2021


Short term employee benefits
Managerial remuneration 45,617 20,355 35,603 18,957 1,381,753 875,853
Housing allowance 20,528 9,160 16,021 8,531 579,157 362,148
Utilities allowance – – – – 122,474 80,471
Conveyance and site allowance – – – – 270,173 195,052
Leave fare assistance and bonus 12,414 9,310 12,414 9,310 982,493 441,977
Others 49,751 20,910 5,323 1,189 42,426 33,999
128,310 59,735 69,361 37,987 3,378,476 1,989,500
Retirement benefits
Contribution to provident fund and gratuity – – – – 119,987 207,461
Accumulating compensated absences – – – – 6,600 –
128,310 59,735 69,361 37,987 3,505,063 2,196,961
Number of persons 1 1 1 1 573 289

39.2 Non Executive Directors were paid meeting fee aggregating to Rs 1.70 million (2021: Rs 1.70 million).

39.3 The Company also provides the Chief Executive, Executive Director and some of the Executives with
Company maintained cars.
199

2022 2021
40 Cash generated from operations

Adjustments for:
Depreciation on property, plant and equipment 16.3 5,331,377 5,245,720
Amortization of intangible assets 17 42,640 41,883
Finance cost 32 2,929,107 2,006,559
Provision for staff retirement benefits 10.1 292,971 128,670
Provision for slow moving stores and spares 253,796 74,964
Exchange gain on translation of foreign currency loan 7.1 – (3,312)
Profit on loans to related parties 34 (1,521,220) (839,424)
Loss on investments classified as FTVPL 33 828,330 86,711
Loss allowance on subsidy receivable from GoP 25 109,724 109,721
Unwinding of provision for GIDC 10.2 274,157 367,524
Share of loss from associates 19.1 68,408 348
Profit on short term investments and saving accounts 34 (282,426) (96,516)
Impairment against advance 33 2,225,796 –
Loss on disposal of investment property 79,070 –
Loss / (gain) on disposal of property, plant and equipment 5,756 (2,887)
10,638,392 9,480,867
Operating cash flows before working capital changes 41,424,781 37,665,960
Effect on cash flow due to working capital changes:
Increase in current assets:
Stores and spares (3,382,120) (3,366,963)
Stock in trade (14,156,017) (4,800,836)
Trade debts (13,176,700) (5,203,832)
Advances, deposits, prepayments and other receivables (4,116,096) (7,111,286)
Net increase in creditors, accrued and other liabilities 15,434,706 14,244,246
(19,396,227) (6,238,671)
22,028,554 31,427,289

41 Provident fund
The following information is based on latest
un audited financial statements of the fund:
Size of the fund 3,219,512 1,982,661
Cost of investments made 2,870,840 1,760,220
Fair value of investments 2,963,931 1,818,992
Percentage of investments made 89.17% 88.78%

41.1 The breakup of fair value of investments is as follows:
2022 2021
(Rupees in thousand) % age (Rupees in thousand) % age

Mutual funds 1,467,288 50% 1,148,752 63%
Scheduled banks 1,496,644 50% 670,240 37%
2,963,932 100% 1,818,992 100%
200
41.2 The investments out of provident fund have been made in accordance with the provisions of Section 218 of
the Companies Act, 2017 and the rules formulated for this purpose.
41.3 An amount of Rs 187.01 million (2021: Rs 123.72 million) has been contributed during the year to the
provident fund.
42 Financial risk management

42.1 Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, other
price risk and interest rate risk), credit risk and liquidity risk. The Company’s overall risk management
program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects
on the financial performance.

Risk management is carried out by the Board of Directors (the Board). The Board provides principles for
overall risk management, as well as policies covering specific areas such as foreign exchange risk, interest
rate risk, credit risk and investment of excess liquidity. All treasury related transactions are carried out within
the parameters of these policies.

(a) Market risk
(i) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. Currency risk arises mainly where receivables and payables exist due
to transactions with foreign buyers and suppliers.
The Company is exposed to currency risk arising from various currency exposures, primarily with respect to
the United States Dollar (USD) and Euro (EUR). Currently, the Company’s foreign exchange risk exposure is
restricted to bank balances, the amounts receivable / payable from / to the foreign entities. The Company’s
exposure to currency risk was as follows:
2022 2021
(FCY in thousand)

Cash at banks and in hand – USD 9,692 39
Trade and other payables – USD (1,707) (1,526)
Net exposure – USD 7,985 (1,487)
Trade and other payables – EUR (841) (981)
Net exposure – EUR (841) (981)
The following significant exchange rates were applied during the year:
2022 2021

Rupees per USD
Rupees per EUR


201

If the functional currency, at reporting date, had fluctuated by 5% against the USD and EUR with all other
(2021: Rs 23.24 million), respectively higher / lower, mainly as a result of exchange losses / gains on
translation of foreign exchange denominated financial instruments. Currency risk sensitivity to foreign
exchange movements has been calculated on a symmetric basis.
(ii) Other price risk

Other price risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices (other than those arising from interest rate risk or currency
risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer,
or factors affecting all similar financial instruments traded in the market. The Company is also exposed
to equity price risk since there are investments in equity securities. The Company is also not exposed to
commodity price risk since it has a diverse portfolio of commodity suppliers.

Fair value sensitivity analysis - Investments through Profit or Loss
In case of 5% change in KSE 100 index on December 31, 2022, with all other variables held constant, net
profit for the year would increase / decrease by Rs 203.35 million (2021: Rs 112.14 million) as a result of
gains / losses on equity securities classified as at fair value through profit or loss.

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

The Company has no significant long term interest bearing assets. The Company’s interest rate risk arises
from long term financing. Borrowings obtained at variable rates expose the Company to cash flow interest
rate risk.
At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments was:
2022 2021
Fixed rate instruments

Term deposit receipt 292,150 2,700,000
Floating rate instruments
Financial assets
Long term loan to associated company 2,999,000 2,999,000
Cash at bank - saving accounts 1,718,850 120,392
Short term loans 8,499,723 6,999,723
Financial liabilities
Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rate at the reporting date would not affect the statement of profit or loss
of the Company.

Cash flow sensitivity analysis for variable rate instruments
If the markup rate on net finance at reporting date, had fluctuated by 100 basis points with all other
(2021: Rs 24.45 million) respectively higher / lower.
202
(b) Credit risk
Credit risk represents the risk that one party to a financial instrument will cause a financial loss for the
other party by failing to discharge an obligation. Credit risk arises from deposits with banks and loans,
advances, deposits, prepayments and other receivables. The carrying amount of financial assets represents
the maximum credit exposure. The maximum exposure to credit risk at the reporting date was as follows:
2022 2021

Long term loan to an associated company 2,999,000 2,999,000
Short term loan to associated companies 8,499,723 6,999,723
Advances, deposits and other receivables 1,949,537 1,171,116
Trade debts 22,831,008 9,654,308
Bank balances 2,604,720 7,335,786
40,998,936 28,678,357

The credit quality of major financial assets that are neither past due nor impaired can be assessed by
reference to external credit ratings (if available) or to historical information about counterparty default rate:

Rating 2022 2021
Short term Long term Rating Agency (Rupees in thousand)

Allied Bank Limited A-1+ AAA PACRA 610 354
Askari Bank Limited A-1+ AA+ PACRA 292,164 13,524
Bank Alfalah Limited A-1+ AA+ PACRA 76,212 566,787
Bank Al Habib Limited A-1+ AAA PACRA 49,082 747,108
Citibank N.A P-1 Aa3 Moody’s 42 46
Dubai Islamic Bank Limited A-1+ AA VIS 92 6
Faysal Bank Limited A-1+ AA PACRA 56,613 42,866
Habib Bank Limited A-1+ AAA VIS 502,395 524,100
Habib Metropolitan Bank Limited A-1+ AA+ PACRA 521 –
JS Bank Limited A-1+ AA- PACRA 182,215 63,244
MCB Bank Limited A-1+ AAA PACRA 16,551 30,870
Meezan Bank Limited A-1+ AAA VIS – 882,594
National Bank of Pakistan A-1+ AAA VIS 154,844 1,558,375
Soneri Bank Limited A-1+ AA- PACRA – 424
Summit Bank Limited A-3 BBB- VIS 1,169,764 183,587
Standard Chartered Bank (Pakistan) Limited A-1+ AAA PACRA 53,102 2,714,509
The Bank of Punjab A-1+ AA+ PACRA 46,453 503
The Bank of Khyber A+ A1 PACRA 175 –
The Royal Bank of Scotland P-1 Aa3 Moody’s – 2,820
United Bank Limited A-1+ AAA VIS 3,885 4,069

Due to the Company’s long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, management does not expect non performance by these
counterparties on their obligations to the Company. Accordingly, the credit risk is minimal.

(c) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial
liabilities.
203

The Company manages liquidity risk by maintaining sufficient cash and the availability of funding through
an adequate amount of committed credit facilities. At December 31, 2022 the Company has Rs 19,608.54
million (2021: Rs 20,602.60 million) unutilized borrowing limits from financial institutions and Rs 2,609.32
million (2021: Rs 7,343.20 million) cash and bank balances.


Long term finances 10,792,882 2,346,431 7,053,989 1,392,462

70,371,159 60,409,559 8,569,138 1,392,462


Long term finances 7,064,604 1,892,328 4,607,803 564,473

Unpaid dividend 1,738,864 1,738,864 – –
48,507,363 41,079,760 6,863,130 564,473

42.2 Fair values of financial assets and liabilities
The carrying amounts of all financial assets and liabilities reflected in the financial statement approximate
their fair values. Fair value is determined on the basis of objective evidence at each reporting date.

Fair value hierarchy
The Company is required to classify financial instruments using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair value hierarchy has the following
levels:
– Level 1: Quoted market prices (unadjusted) in active markets for identical assets or liabilities;
– Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or the
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
– Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
204
Investments of the Company carried at fair value are categorised as follows:
2022


2021


42.3 Financial instruments by categories
2022 2021
Amortized Fair value Fair value Amortized Fair value Fair value
Cost Through Through Cost Through Through
P & L OCI P & L OCI
Financial assets as per

statement of financial position
Long term loan to an associated company 2,999,000 – – 2,999,000 – –
Long term investments – – 600,000 – – 600,000
Long term deposits 2,114,948 – – 518,424 – –
Short term loan to related parties 8,499,723 – – 6,999,723 – –
Advances, deposits, prepayments and
other receivables 1,949,537 – – 1,171,116 – –
Trade debts 22,831,008 – – 9,654,308 – –
Short term investment – 4,067,140 – – 2,242,710 –
Cash and bank balances 2,609,323 – – 7,343,201 – –
41,003,539 4,067,140 600,000 28,685,772 2,242,710 600,000

205

Financial liabilities as per statement of financial position - at amortised cost
2022 2021

Lease liabilities 1,681,578 1,812,298
Trade and other payables 43,879,145 30,315,356
Accrued finance cost 715,007 307,184
70,371,159 47,924,133
42.4 Capital risk management

The Company’s objectives when managing capital are to safeguard Company’s ability to continue as a
going concern in order to provide maximum return to shareholders and benefits for other stakeholders and
to maintain an optimal capital structure as required by the lenders. Consistent with others in the industry and
the requirements of the lenders, the Company monitors the capital structure on the basis of debt to equity
ratio.
The Company manages the capital structure in the context of economic conditions and the risk characteristics
of the underlying assets. In order to maintain or adjust the capital structure, the Company may, for example,
issue new ordinary / preference shares, or obtain / repay loans.
2022 2021
Total debt 25,357,978 15,342,674

Cash and cash equivalents (2,609,323) (7,343,201)
Net debt 22,748,655 7,999,473
Total equity 106,926,356 100,263,440
Total capital 129,675,011 108,262,913

Debt to capital ratio 17.54% 7.39%
2022 2021
43 Number of employees
Average number of employees during the year 3,724 2,750
Number of employees at end of the year 4,553 2,895
43.1 With effect from July 01, 2022, employees of Pakarab Fertilizers Limited and Fatima Agri Sales & Services
Limited, associated companies, have been transferred to the Company.
206
2022

44 Shariah compliance disclosure
Finance cost
Long term loans 669,215 445,784 1,114,999
Short term borrowings 779,303 227,185 1,006,488
Liabilities
Long term loans 6,792,882 4,000,000 10,792,882
Short term borrowings 9,322,522 3,560,996 12,883,518
Accrued markup
Long term loans 243,770 101,083 344,853
Finance income
Long term loans 483,115 – 483,115
Short term loans 1,038,105 – 1,038,105
Banks 282,426 – 282,426
Cash at bank 2,360,560 244,160 2,604,720

2021

Finance cost
Long term loans 475,711 236,648 712,359
Liabilities
Long term loans 4,720,405 2,344,199 7,064,604
Short term borrowings 6,039,212 426,560 6,465,772
Accrued markup
Long term loans 113,282 47,041 160,323
Finance income
Long term loan 289,901 – 289,901
Short term loan 549,523 – 549,523
Banks 94,450 – 94,450
Term finance certificates 2,066 – 2,066
Cash at bank 7,154,852 180,934 7,335,786
207

45 Non adjusting events after reporting date
The Board of Directors of the Company in its meeting held on April 03, 2023 proposed a final dividend
of Rs 3.50 (2021: Rs 3.50) per share for the year ended December 31, 2022, aggregating to Rs 7,350 million
(2021: Rs 7,350 million) for approval of the members at the Annual General Meeting to be held on April 28, 2023.
46 Date of authorization of issue

These financial statements have been authorized for issue on April 03, 2023 by the Board of Directors of the
Company.
47 General
Figures have been rounded off to the nearest thousand of rupees unless stated otherwise.
208
STATEMENTS UNDER SECTION
134(3) of the Companies Act, 2017
Item 5 of the Agenda:

As per the disclosure requirement of Para 4(1) of the S.R.O. 1240(I)/2017 dated December 06, 2017, it is informed that the
following directors of the Company are also the directors in the investee company, however, the directors have no direct or
indirect interest except to the extent of shareholding/directorship in the investee company:
Directors
1) Mr. Fawad Ahmed Mukhtar
2) Mr. Fazal Ahmed Sheikh
3) Mr. Faisal Ahmed Mukhtar

The Directors have carried out the required due diligence for the purpose of this loan.
The information required under S.R.O 1240(I)/2017 is provided below:
Sr. No. Description Information Required

(a) Disclosure for all types of Investments
(A) Disclosure regarding associated company
(i) Name of associated company or associated Reliance Commodities (Pvt) Limited (RCL)
undertaking
(ii) Basis of relationship Due to common directorship by the following:

(iii) Earnings per share for the last three years PKR 25.06 for the year 2020
PKR 45.51 for the year 2021
(iv) Break-up value per share, based on latest audited PKR 453.33
financial statements
(v) Financial position, including main items of statement As per the audited Financial Statements for the year ended
of financial position and profit and loss account on the June 30, 2022
basis of its latest financial statements PKR in Million
Authorized Capital 350

Paid-up capital and reserves 3,629
Surplus on revaluation of property,
plant and equipment 595
Non-Current Liabilities 638
Current Liabilities 11,266
Current Assets 14,307
Non-Current Assets 1,226
Revenue 5,281
Gross Profit 1,112
Finance Cost 888
Profit After Tax 687
209

(vi) In case of investment in relation to a project of Not applicable
associated company or associated undertaking that
has not commenced operations, following further
information, namely:
(I) Description of the project and its history since
conceptualization;
(II) starting date and expected date of completion of
work;
(III) time by which such project shall become
commercially operational;
(IV) expected time by which the project shall start
paying return on investment; and
(V) funds invested or to be invested by the promoters,
sponsors, associated company or associated
undertaking distinguishing between cash and
noncash amounts
(B) General Disclosures
(i) Maximum amount of investment to be made Loan Investment in the nature of running finance facility up to
PKR 5,000 Million (Already made).
(ii) Purpose, benefits likely to accrue to the investing To support the functionality and operations of the associated
company and its members from such investment and undertaking and to continue investment of the Company’s
period of investment funds at an attractive rate of mark-up for a further period of
one year.
(iii) Sources of funds to be utilized for investment and where Already given/Own sources of the Company.
the investment is intended to be made using borrowed
funds:
(I) justification for investment through borrowings;
(II) detail of collateral, guarantees provided and assets
pledged for obtaining such funds; and
(III) cost benefit analysis
(iv) Salient features of the agreement(s), if any, with Salient terms of the agreement to be entered as follows:
associated company or associated undertaking with
1. The parties agree to extend the repayment period of the
regards to the proposed investment
Running Finance Facility to be repaid within 30 days of
the notice of demand for a further period of one year.
The limit in the nature of Running Finance Facility shall
be renewable in the next general meeting(s) for a further
2. Markup will be charged on the entire loan at the rate of
6M KIBOR+1.25% but not less than the borrowing cost
of Fatima. Markup is payable on a six monthly basis.
(v) Direct or indirect interest of directors, sponsors, majority The following directors of the Company are also the directors
shareholders and their relatives, if any, in the associated in the investee company, however, the directors have no
company or associated undertaking or the transaction direct or indirect interest except to the extent of shareholding/
under consideration directorship in the investee company:
Directors

210

(vi) In case any investment in associated company or A loan of an aggregate amount of up to PKR 5,000 million in
associated undertaking has already been made, the the nature of a renewable running finance facility has already
performance review of such investment including been granted to RCL. The Company is now seeking renewal
complete information/justification for any impairment or of this running finance facility for a further period of one year
write offs at the mark-up rate of 6M KIBOR + 1.25% but not less than
the borrowing cost of Fatima and to be repaid within 30 days
of the notice of demand. There is no impairment or write-offs
for this loan.
(vii) Any other important details necessary for the members None
to understand the transaction
(b) Additional Disclosures regarding Loan Investment
(i) Category-wise amount of investment Loan Investment in the nature of running finance facility up to
PKR 5,000 Million (Already made).
(ii) Average borrowing cost of the investing company, the The average borrowing cost of investing company is
Karachi Inter Bank Offered Rate (KIBOR) for the relevant 12.891%.
period, rate of return for Shariah compliant products
and rate of return for unfunded facilities, as the case
may be, for the relevant period
(iii) Rate of interest, mark up, profit, fees or commission etc. 6M KIBOR+1.25% per annum but not less than the borrowing
to be charged by investing company cost of Fatima.
(iv) Particulars of collateral or security to be obtained in The security for the loan shall continue in the form of a charge
relation to the proposed investment over the present and future current assets of RCL and the
charge shall be vacated on the repayment of the entirety of
the loan.
(v) If the investment carries conversion feature i.e. it is None
convertible into securities, this fact along with terms and
conditions including conversion formula, circumstances
in which the conversion may take place and the time
when the conversion may be exercisable
(vi) Repayment schedule and terms and conditions of loans The Loan will be repayable within a year within 30 days of
or advances to be given to the associated company or the notice of demand unless renewed by mutual consent of
associated undertaking. the parties, provided shareholders of Fatima approve any
renewal.

following directors of the Company are also the directors in the investee company and the following relative of the director
is also the shareholder of the investee company, however, the directors/relative have no direct or indirect interest except to
the extent of shareholding/directorship in the investee company:
Directors Relative
1) Mr. Arif Habib
2) Mr. Fawad Ahmed Mukhtar 1) Mrs. Ambreen Fawad
5) Mr. Muhammad Kashif Habib
The Directors have carried out the required due diligence for the purpose of this loan.
211
The information required under S.R.O. 1240(I)/2017 is provided below:

(A) Disclosure regarding associated company
(i) Name of associated company or associated undertaking Pakarab Fertilizers Limited (PFL)
(ii) Basis of relationship Due to common directorship by the following:
1) Mr. Arif Habib

(iii) Earnings per share for the last three years PKR (9.17) for the year 2019
PKR 1.21 for the half year ended June 30, 2022
(iv) Break-up value per share, based on latest audited PKR 28.62
financial statements
(v) Financial position, including main items of statement As per the audited Financial Statements for the half year
of financial position and profit and loss account on the ended June 30, 2022
basis of its latest financial statements PKR in Billion
Authorized Capital 10.0

Total Equity (Paid up capital & reserves) 12.877
Non-Current Liabilities 7.776
Current Liabilities 23.794
Current Assets 19.726
Non-Current Assets 24.721
Revenue 29.193
Gross Profit 2.061
Finance Cost 0.846
Profit After Tax 0.543
(vi) In case of investment in relation to a project of Not applicable
associated company or associated undertaking that
has not commenced operations, following further
information, namely:
(I) Description of the project and its history since

conceptualization;
(II) starting date and expected date of completion of
work;
(III) time by which such project shall become
commercially operational;
(IV) expected time by which the project shall start paying
return on investment; and
(V) funds invested or to be invested by the promoters,
sponsors, associated company or associated
undertaking distinguishing between cash and
noncash amounts
212

(i) Maximum amount of investment to be made Loan Investment in the nature of running finance facility up to
PKR 5,000 Million already made.
(ii) Purpose, benefits likely to accrue to the investing To facilitate PFL in meeting its financial obligations towards
company and its members from such investment and the lenders/financial institutions/Government/Corporate
period of investment bodies from July 01, 2022 onwards during the proceedings
in the Court for its approval of the Scheme merger with
Fatima Fertilizer.
(iii) Sources of funds to be utilized for investment and where Already given/Own sources of the Company.
funds:
(iv) Salient features of the agreement(s), if any, with Agreement:
associated company or associated undertaking with 1. The parties agree to extend the repayment period of the
regards to the proposed investment Running Finance Facility to be repaid within 30 days of
the notice of demand for a further period of one year.
The limit in the nature of Running Finance Facility shall
be renewable in the next general meeting(s) for a further
2. Markup will be charged on the Loan at the rate of
6M KIBOR+1.25% per annum but not less than the
borrowing cost of Fatima. Markup is payable on a six
monthly basis.
(v) Direct or indirect interest of directors, sponsors, majority The following directors of the Company are also the directors
shareholders and their relatives, if any, in the associated in the investee company and the following relative of the
company or associated undertaking or the transaction director is also the shareholder of the investee company,
under consideration however, the directors/relative have no direct or indirect
interest except to the extent of shareholding/directorship in
the investee company:
Directors
1) Mr. Arif Habib

Relative
1) Mrs. Ambreen Fawad

(vi) In case any investment in associated company or Long term loan of an aggregate amount of up to PKR 3,000
associated undertaking has already been made, the million and a corporate guarantee facility limit of up to PKR
performance review of such investment including 7,000 million is already given to PFL. There is no impairment
complete information/justification for any impairment or or write-offs for this loan.
write offs
213

(i) Category-wise amount of investment Loan investment in the nature of running finance facility up to
PKR 5,000 million already made.
period, rate of return for Shariah compliant products and
rate of return for unfunded facilities, as the case may be,
for the relevant period
(iii) Rate of interest, mark up, profit, fees or commission etc. 6M KIBOR+1.25% per annum but not less than the
to be charged by investing company borrowing cost of Fatima.
(iv) Particulars of collateral or security to be obtained in None
relation to the proposed investment
(vi) Repayment schedule and terms and conditions of loans Upon sanction of the merger Scheme by the Court.
or advances to be given to the associated company or
associated undertaking.

The transactions carried out with associated companies/related parties have been approved by the Board as recommended
by the Audit Committee on a quarterly basis pursuant to provisions of applicable laws. However, as majority of Company
Directors were interested in certain related party transactions due to their common directorship and holding of shares in the
associated companies/related parties, the Board has recommended for placement of the same before the shareholders
of the Company in general meeting for ratification/approval.
All these related party transactions during the mentioned period were executed at Arm’s Length Price in a fair and transparent
manner and there was no departure from the guidelines mentioned in the Companies (Related Party Transactions and
Maintenance of Related Records) Regulations, 2018 and Code of Corporate Governance for such transactions.
Pursuant to the above, these transactions have to be approved/ratified by the shareholders in the General Meeting.
The directors and their relatives have no direct or indirect interest in the aforesaid except to the extent of their shareholding/
common directorship with associated companies/related parties.

Due to the composition of the Board of Directors of the Company, many Directors may be deemed to be treated as
interested in transactions with certain related parties due to their common directorships and/or shareholding. Therefore
the shareholders are being approached to grant a broad and prior approval for such transactions to be entered into by
the Company, from time to time, at the discretion of the Board and irrespective of its composition and interest of directors
due to their common directorship and holding of shares in the associated companies/related parties, triggering approval
of shareholders under section 207 and/or 208 of the Companies Act, 2017, for the year ending December 31, 2023, which
transactions shall be deemed to be approved by the shareholders. The Company shall ensure that such transactions with
related parties, if needed, continue to be carried out in a fair and transparent manner and at Arm’s Length Basis.
214
Transactions intended to be carried out by the Company include, but are not limited to, sale and purchase of stores
and spares, shared expenses, toll manufacturing, sale and purchase of products/mid-products/raw material/assets, and
purchase of packaging material with the following related parties but are not limited to:
Company Name and Nature of Relationship
1. Pakarab Fertilizers Limited - Associated company

2. Fatimafert Limited – Wholly owned subsidiary
3. Fatima Cement Limited – Wholly owned subsidiary
4. Fatima Packaging Limited - Wholly owned subsidiary of Pakarab Fertilizers Limited (an associated company)
The shareholders should note that it is not possible for the Company or the directors to accurately predict the nature of
related party transaction or the specific related party(ies) with which the transaction(s) shall be carried out. In view of the
same, the Company seeks the broad/ prior approval of the shareholders that the Board may cause the Company to enter
into related party transactions in its discretion and in accordance with the policy of the Company. Such transactions shall
be presented in the next annual general meeting of shareholders for their formal approval/ratification.
The following directors of the Company are also the directors in PFL and the following relative of the director is also
the shareholder of PFL, however, the directors/relative have no direct or indirect interest except to the extent of their
shareholding/directorship in PFL:
Directors Relative
1) Mr. Arif Habib
Further, the following directors of the Company are also the directors in Fatimafert Limited and Fatima Cement Limited,
however, the directors have no direct or indirect interest except to the extent of their shareholding/directorship in Fatimafert
Limited and Fatima Cement Limited. Mr. Asad Murad, CFO of the Company, is also the CFO of Fatimafert Limited:
Directors
1) Mr. Arif Habib
The Directors/Key managerial personnel are interested in the resolution only to the extent of their shareholding and/or
directorships in such related parties.

following directors of the Company are also the directors in the investee company and the following relative of the director
is also the shareholder of the investee company, however, the directors/relative have no direct or indirect interest except to
the extent of shareholding/directorship in the investee company:
Directors Relative
1) Mr. Arif Habib
215
The Directors have carried out the required due diligence for the purpose of issuance of corporate guarantees.
The information required under S.R.O. 1240(I)/2017 is provided below:

(A) Disclosure regarding associated company As given in item no. 6 above
(i) Maximum amount of investment to be made Corporate Guarantee(s) limit of up to an aggregate amount
of PKR 7,000 Million.
(ii) Purpose, benefits likely to accrue to the investing As given in item no. 6 above
company and its members from such investment and
period of investment
(iii) Sources of funds to be utilized for investment and where Not applicable
funds:
(iv) Salient features of the agreement(s), if any, with Renewal of limit for issuance of Corporate Guarantee(s) up
associated company or associated undertaking with to an aggregate amount of up to PKR 7,000 million for a
regards to the proposed investment further period of one year for Corporate Guarantee(s) issued/
to be issued by Fatima Fertilizer Company Limited, as and
when needed, in favor of any bank / financial institution/
Government/Corporate bodies, etc. in connection with
financing or other facilities availed / to be availed by Pakarab
Fertilizers Limited.
(v) Direct or indirect interest of directors, sponsors, majority As given in item no. 6 above
shareholders and their relatives, if any, in the associated
company or associated undertaking or the transaction
under consideration
(vi) In case any investment in associated company or Long-term loan of an aggregate amount of up to PKR 3,000
associated undertaking has already been made, the million and running finance facility of an aggregate amount
performance review of such investment including of PKR 5,000 million is already given to PFL. There is no
complete information/justification for any impairment or impairment or write-offs for this loan.
write offs
216

(i) Category-wise amount of investment Corporate Guarantee(s) limit of up to an aggregate amount
of PKR 7,000 million.
period, rate of return for Shariah compliant products and
rate of return for unfunded facilities, as the case may be,
for the relevant period
(iii) Rate of interest, mark up, profit, fees or commission etc. In line with prevailing commercial rates for similar unfunded
to be charged by investing company facilities.
(iv) Particulars of collateral or security to be obtained in None
relation to the proposed investment
(vi) Repayment schedule and terms and conditions of loans The limit of Corporate Guarantee(s) will be for a period of one
or advances to be given to the associated company or year and shall be renewable in the next general meeting(s)
associated undertaking. for a further period(s) of one year(s).

Circulation/Dissemination of Annual Audited Financial Statements through QR enabled code and weblink.
SECP has notified through S.R.O. 389 (I)/2023 dated March 21, 2023, whereby subject to the approval of shareholders
in the general meeting, the listed companies have been allowed to circulate the annual balance sheet and profit and loss
account, auditor’s report and directors report, etc. (“annual audited financial statements”) to its members through QR
enabled code and weblink and considering technological advancements and old technology becoming obsolete, the
circulation of annual financial statements through CD/DVD/USB may be discontinued. Accordingly, approval is hereby
sought from shareholders to comply with the requirements of the said SRO.
None of the directors have any interest whether directly or indirectly in the proposed business except to the extent of their
respective shareholding/directorship.
217
PATTERN OF SHAREHOLDING
Category - Wise
Categories of Shareholders Shares held Percentage
Directors and their spouse(s) and minor children

Mr. Fawad Ahmed Mukhtar 80,900,389 3.85
Mr. Fazal Ahmed Sheikh 101,016,205 4.81
Mr. Faisal Ahmed Mukhtar 131,932,979 6.28
Mr. Arif Habib 257,474,220 12.26
Mrs. Ambreen Fawad 15,473,526 0.74
Mr. Asad Muhammad Sheikh 24,364,808 1.16
Mr. Mohid Muhammad Ahmed 5,942,301 0.28
Mrs. Farah Faisal 56,250 0.00
Mrs. Fatima Fazal 1,884,311 0.09
Mr. Muhammad Kashif Habib 62,293,675 2.97
Mr. Tariq Jamali 1 0.00
Ms. Malika Nait Oukhedou 1 0.00

Associated Companies, undertakings
and related parties 907,236,060 43.20

Sponsors 288,646,354 13.75

Executives 447,185 0.02

NIT and ICP 596 0.00

Banks Development Financial Institutions,
Non-Banking Financial Institutions 49,899,124 2.38

Insurance Companies 274,652 0.01

Modarabas and Mutual Funds 3,038,389 0.14

General Public

a. Local 44,453,701 2.12
b. Foreign 1,191,508 0.06
Foreign Companies 20,809,420 0.99
Others 102,664,346 4.89
Totals 2,100,000,000 100.00

Share holders holding 10% or more Shares held Percentage

Arif Habib 257,474,219 12.26
Arif Habib Corporation Limited 319,000,206 15.19
218
No. of Shareholders From Having Shares To Shares Held
2358 1 to 100 86,005
3611 101 to 500 1,451,341
1046 501 to 1000 929,368
1312 1001 to 5000 3,480,582
393 5001 to 10000 3,085,686
168 10001 to 15000 2,110,028
88 15001 to 20000 1,612,083
61 20001 to 25000 1,408,864
33 25001 to 30000 922,423
20 30001 to 35000 656,033
19 35001 to 40000 716,471
16 40001 to 45000 679,993
32 45001 to 50000 1,579,208
17 50001 to 55000 888,135
16 55001 to 60000 934,508
11 60001 to 65000 691,347
11 65001 to 70000 759,720
7 70001 to 75000 501,940
1 75001 to 80000 78,750
5 80001 to 85000 413,797
2 85001 to 90000 171,134
3 90001 to 95000 280,441
16 95001 to 100000 1,594,856
2 100001 to 105000 205,187
6 105001 to 110000 645,822
2 110001 to 115000 226,108
1 120001 to 125000 125,000
1 125001 to 130000 130,000
1 135001 to 140000 140,000
2 140001 to 145000 288,008
5 145001 to 150000 746,400
1 150001 to 155000 152,000
3 155001 to 160000 477,000
1 160001 to 165000 165,000
1 170001 to 175000 171,225
1 175001 to 180000 177,459
1 185001 to 190000 185,566
3 195001 to 200000 595,115
1 210001 to 215000 210,419
2 220001 to 225000 445,500
1 225001 to 230000 229,000
1 230001 to 235000 232,000
1 235001 to 240000 235,752
2 240001 to 245000 481,199
4 245001 to 250000 997,940
3 270001 to 275000 825,000
1 290001 to 295000 291,519
2 295001 to 300000 600,000
1 300001 to 305000 305,000
219
PATTERN OF SHAREHOLDING
1 310001 to 315000 310,180

1 320001 to 325000 321,500
1 325001 to 330000 328,038
2 335001 to 340000 672,081
1 340001 to 345000 340,263
1 345001 to 350000 347,000
2 350001 to 355000 706,948
2 360001 to 365000 730,000
1 365001 to 370000 370,000
1 375001 to 380000 379,000
1 415001 to 420000 418,490
1 425001 to 430000 428,865
1 445001 to 450000 450,000
2 475001 to 480000 958,000
1 485001 to 490000 486,000
2 495001 to 500000 1,000,000
1 505001 to 510000 505,241
1 550001 to 555000 550,500
2 585001 to 590000 1,176,361
1 595001 to 600000 597,626
1 605001 to 610000 609,292
1 670001 to 675000 675,000
1 725001 to 730000 725,288
1 745001 to 750000 749,500
1 750001 to 755000 753,687
1 755001 to 760000 758,797
2 780001 to 785000 1,567,950
1 950001 to 955000 955,000
1 975001 to 980000 979,000
3 995001 to 1000000 3,000,000
1 1005001 to 1010000 1,009,500
1 1035001 to 1040000 1,035,812
1 1095001 to 1100000 1,095,270
1 1215001 to 1220000 1,218,923
2 1345001 to 1350000 2,699,050
1 1455001 to 1460000 1,457,000
2 1540001 to 1545000 3,081,895
1 1590001 to 1595000 1,591,500
1 1695001 to 1700000 1,698,357
1 1860001 to 1865000 1,863,218
1 1995001 to 2000000 2,000,000
2 2015001 to 2020000 4,030,430
1 2400001 to 2405000 2,403,669
1 2605001 to 2610000 2,610,000
1 2625001 to 2630000 2,625,166
1 2795001 to 2800000 2,800,000
1 2920001 to 2925000 2,925,000
1 2980001 to 2985000 2,981,177
1 3525001 to 3530000 3,528,055
220
1 3920001 to 3925000 3,924,459

1 5115001 to 5120000 5,116,285
3 5155001 to 5160000 15,474,978
2 5355001 to 5360000 10,718,543
1 5370001 to 5375000 5,373,907
3 5375001 to 5380000 16,125,084
1 5655001 to 5660000 5,658,075
1 7425001 to 7430000 7,429,576
2 7735001 to 7740000 15,474,978
1 8035001 to 8040000 8,038,869
1 8865001 to 8870000 8,866,946
2 10015001 to 10020000 20,039,578
1 10065001 to 10070000 10,066,585
1 11925001 to 11930000 11,927,500
1 12490001 to 12495000 12,492,349
2 16625001 to 16630000 33,254,639
1 17910001 to 17915000 17,913,706
2 18785001 to 18790000 37,579,583
1 19405001 to 19410000 19,409,500
1 19610001 to 19615000 19,613,553
1 26195001 to 26200000 26,200,000
1 27995001 to 28000000 28,000,000
1 31345001 to 31350000 31,350,000
1 39255001 to 39260000 39,258,014
1 39510001 to 39515000 39,512,487
1 41160001 to 41165000 41,163,375
1 46610001 to 46615000 46,610,769
1 53875001 to 53880000 53,878,336
1 59720001 to 59725000 59,721,043
1 62290001 to 62295000 62,293,675
1 64795001 to 64800000 64,800,000
1 69110001 to 69115000 69,114,031
2 75535001 to 75540000 151,076,076
1 82635001 to 82640000 82,638,426
2 84890001 to 84895000 169,784,446
1 91900001 to 91905000 91,900,380
1 147705001 to 147710000 147,706,263
1 254200001 to 254205000 254,200,206
1 257470001 to 257475000 257,474,219
9,407 2,100,000,000
221
222
FORM OF PROXY
20th Annual General Meeting
I/We
of
being a member(s) of Fatima Fertilizer Company Limited hold
Ordinary Shares hereby appoint Mr. / Mrs. / Miss
of or falling him / her
of as my / our proxy in my / our absence to attend and vote for me / us and
on my / our behalf at the 20th Annual General Meeting of the Company to be held on April 28, 2023 and / or any
adjournment thereof.
As witness my/our hand/seal this 2023.
Signed by
in the presence of
Folio No. CDC Account No.

Participant I.D. Account No.
Signature on
Fifty Rupees
Revenue Stamp
The Signature should

agree with the
specimen registered
with the Company
IMPORTANT:
1. This Proxy Form, duly completed and signed, must be received at the office of our Shares Registrar not later than
48 hours before the time of holding the meeting.
2. If a member appoints more than one proxy and more than one instruments of proxies are deposited by a member
with the Company, all such instruments of proxy shall be rendered invalid.
3. For CDC Account Holders / Corporate Entities
In addition to the above the following requirements have to be met.

(i) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be provided with the proxy
form.
(ii) The proxy shall produce his original CNIC or original passport at the time of the meeting.
(iii) In case of a corporate entity, the Board of Directors resolution / power of attorney with specimen signature shall
be submitted (unless it has been provided earlier alongwith proxy form to the Company).
223
AFFIX
CORRECT
POSTAGE
Company Secretary
FATIMA FERTILIZER COMPANY LIMITED
224
225
AFFIX
CORRECT
POSTAGE
Company Secretary
FATIMA FERTILIZER COMPANY LIMITED
226
CDC Share Registrar Services Limited
227
228

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CATALYSING

2,829 2,735 152,231

14,124 6.73 3.50

12.55 19,445 104.6

02 Fatima Fertilizer Company Limited

29,043 2,545 1,021

Teamwork Health, Safety, Environment & CSR

Customer Focus Excellence

04 Fatima Fertilizer Company Limited

Ethics and Business Practices Assets and Proprietary

06 Fatima Fertilizer Company Limited

We aspire to continuously improve by achieving and exceeding

We continue to pursue a global reach by leveraging and maximizing

Significant Changes in Relationship between Entity’s

08 Fatima Fertilizer Company Limited

Calendar of Major Financial Events held in 2022

Board Meeting AGM Board Meeting

April 07, 2022 April 29, 2022 April 22, 2022

Board Meeting Board Meeting Corporate Briefing

Financial Calendar 2023

Board Meeting AGM Board Meeting

Board Meeting Board Meeting

3rd Week of 3rd Week of

10 Fatima Fertilizer Company Limited

2003-2008 2015 2020

2013 2019 2022

Mr. Arif Habib Mr. Salman Ahmad

Mr. Fawad Ahmed Mukhtar Mr. Pervez Fateh

Mr. Fazal Ahmed Sheikh Mr. Faisal Jamal

Mr. Faisal Ahmed Mukhtar

Chief Operating Officer & Mr. Muhammad Kashif Habib

Mr. Fawad Ahmed Mukhtar

Mr. Ahsen-ud-Din Mr. Muhammad Kashif Habib

Mr. Ausaf Ali Qureshi Mr. Tariq Jamali

Mr. Hassan Altaf

Mrs. Rabel Sadozai

12 Fatima Fertilizer Company Limited

Auditors The Bank of Punjab

Registrar and Share Lahore Cantt, Pakistan

CDC Share Registrar Services Limited

Mr. Arif Habib

14 Fatima Fertilizer Company Limited

Mr. Faisal Ahmed Mukhtar Mr. Muhammad Kashif Habib

16 Fatima Fertilizer Company Limited

4. Mr. Muhammad Kashif Habib Member

18 Fatima Fertilizer Company Limited

1. Ms. Malika Nait Oukhedou Chairperson 3. Authorities and Powers

20 Fatima Fertilizer Company Limited

Mr. Mohammad Abad Khan

Mr. Asad Murad

Mrs. Rabel Sadozai

22 Fatima Fertilizer Company Limited

Ms. Sadia Irfan

Mr. Iftikhar Mahmood Baig

Mr. Ausaf Ali Qureshi

Mr. Hassan Altaf

Mr. Faisal Jamal

A chemical engineer by qualification, with 23+ years of international professional experience, he