ENG,RO FIERTILIZERS LlMIITED' CONDENS'ED INTERIM FINANCIAL INFORMATION (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30,2011

lENGRO FERTILIZlERS LIMITED

NINE MONTHS ENnING SEPTEMBER

30, 2011 REVIEW TO THE SHAREHOLDER

On behal f of the Board of Directors 'Of Engro F ertilizers Limited, we are pleased to present the unandi ted accounts for the nine months ended September 30, 2:0I 1. PAKlSTAN FERTILIZER MARKET

The market offtake for Urea during the nine months ended September 30, 2011 was 4.1 million tons, a decline of2% over the same period of last year ..The decline was mainly due to product shortages created by curtailment of gas to domestic fertilizer manufacturers and unavailability of timely Urea imports .. Domestic production stood at 3.7 million tons compared to 3.8 million tons produced in the same period of last year despite additional capacity of l.Jmillion tons per annum of Engro coming on-stream. To offset losses due to gas curtailment on the SNGPL network, the company was forced to increase the price of Urea three times during the year. This, coupled with imposition of 16% GST, resulted in the price of Urea bag increasing from Rs 830lbag at the end of December, 20] 0 to Rs l,378lbag at the end of September 2011. During Q3 20U, however, gas supplies to the SNGPL network based plants improved considerably allowing the network based fertilizer manufacturers to operate relatively consistently through most of this period. The reduction in gas load shedding by SNGPL during this quarter contributed significantly in improving urea availability in the market, resulting in market prices declining from approximately Rs .. ISOO/bag at the beginning of'thequarter to approximately Rs...150O'lbagat the end of the quarter, The international urea prices increased from US$4 n per ton at the beginning of the year to US$ 546 per ton at the end of September 2011 which translates into approximately Rs 2,9751bag as against domestic price of Rs 1,378 per bag in end September. By keeping domestic prices lower than the international prices the fertilizer industry provided a benefit of approximately Rs 66 billion to the farmers in the nine months ending September 30, 20~L

COMPANY'S

OPERATING

PERFORMANCE

Urea sales of954,000 tons were higher by arouncl48.% from 645,'000' tons for the same period last year. as Ell result of production from the new plant. Consequently, Engro's urea market share improved to 23% in the nine month period from 15% in the same period last year ..

The Company's recently commissioned plant operated smoothly following declaration of Commercial Operations on June 24,.2011. Barring two intervals of over 25 days when production of Urea stopped due
to gas outage, the plant operated at its expected September 30, 20 It level of performance, producing 234,000. tons till

The Company has filed a case in the Honorable Sindh High Court against the Ministry of Petroleum and Natural Resources, Ministry of Industries, Government of Pakistan and Sui Northern Gas Pipelines Lines Limited against the suspensions andcurtailment of its gas supply. The Court issued its judgmenton October 18, 2011,. directing SNGPL to supply guaranteed quantity of 100mmscfd gas. to Engro's fertilizer plant strictly in accordance with its contract; the Ministry of Petroleum and Natural Resources, and the Ministry of Industries and Production, Government of Pakistan have also been directed to ensure that the commitment, assurance and guarantee held out for the supply of lOOmmscfd to Engro through SNGPL is honored. Three separate writ petitions have been filed before the Lahore High COUlt against the supply of gas to the new Urea plant from the SNGPL network. No adverse Orders have been passed yet and the next hearing

The increase is attributable to urea shortage and higher phosphate prices.Mar) season. the Company is now ontrack to deleverage its balance sheet. Subhani CEO .4 billion of debt..510 million. has been scheduled for ovember 21. The Company believes that there is little prospect of proving the veracity of the petitions.. I74/bag by the company. NEAR TERM OUTLOOK Continuation of gas curtailment is expected to result in a requirement of around 950 000 tons of Urea imports for the Rabi 2011-12 (Oct .. 2011 for an uncertain period necessitating a further price increase ofRs. Failure to import this quantity in a timely manner will result in an acute shortage of fertilizer and will seriously affect farm output as well. The Company is continuously engaging with various stakeholders in government to find a viable solution to the ongoing shortages faced by the fertilizer manufacturers.000 tons from 72 000 tons in the corresponding period in the previous year. Similarly.000 tons during the same period last year. The expected shortfall of urea and the massive increases in urea prices may translate into constrained food supplies at inflated prices.2011 was Rs. compared to an increase of Rs 750lbag over the last 32 years. which takes care of almost allits project debt obligations for the current calendar year.000 tons from 66. the Zarkhez plant received an above-satisfactory rating in the Dupont Process Safety and Behavioral Systems for OSHA compliance. - Asad Umar Chairman Karachi. With the commissioning of the project. 2011. led primarily by higher production due to increased gas supply to the additional capacity in the 3Q201 L Notably the Company. production of blended fertilizers during the first nine months of this year increased to 90. have resulted in urea shortfall and a consequent spike in prices. Until there is a permanent increase in the country's gas supply through import of LNG or alternative sources. including unscheduled and adhoc gas outages. This translates into a 22% growth over the corresponding period profit ofRs. The net profit for the nine months ended September 30. 3. October 19. through its operating eashflows has retired Rs 8. During the period under review. The supply of gas to the new plant was again disrupted on October 1. 2.879 million. I l J. Severe gas curtailment. Urea prices have increased by over Rs 750lbag in the current year to Rs 1600lbag. 2011 ~~ Kbalid S. The farming community of Pakistan has been badly affected by the urea supply situation.I . fertilizer companies on the network are expected to continue to face gas shortages and forced outages during the foreseeable future. The sale of Company manufactured blended fertilizers (Zarkhez and Engro NP) increased to 83.

TIEID CONDEINSEID' INTEIRI'M BALANCE AS AT SEPTEMBER 30.457 352.ted December 31.319.198. 5 87.452. 2.951 13..428 3.2 ENGRO FEIRTILIIIZERS L.481 1 TOTAL ASSETS . N'ote ASSETS Non-cu:rrent assets Property..844 3.. 695..786 217.01.664 1.T (lINAUDITED) Una.IMI.2 10.0...3.4 1 6 7 8 1.944 3.647 1.770.'665.476 1 I 2.90. Short term investments Cash and bank balances 13 2.221 149.2 84..80.2 10. plant and equipment Intanqlble assets Long term loans and advances .0 -------·-------------'Rupees-------------------. 87.1:.835.221.350.udited September 30".85 1.60.3 140.013.788 13.515 84.392.053.238 111. 755.370..489 96. deposits and prepayments Other receivables Taxes recoverable.422.630.2.974 Current assets Stores.90.7 98.20111 (Amounts in thousand) SHEE.10..638 10.20.50.30.237 Deferred employee compensation expense Derivative financial instruments Loans.556.20111 Audi.70.advances.408 40.79'7 2..2.91!o.7. spares and loose tools Stock-in-trade Trade debts 4.422.

9 form an integral part of this condensed Director .072. ----.'072.7.3 (AID. I 13 17 101 .052 2.413. ~---•••.000.118 1i1.911.2010: ordinary shares of Rs.vative financial instruments Totaillabililities Contingencies and Commitments 115 6.7'69 3.592 Total Equity LiabiUUes Non-current liabilities BOl1rowil"lgs Subordinat'ed loan from Holding Company Derivative financial instruments Deferred liabilities IEmp]oyee housing subsidy Retirement and other service benefits obli:gations 11 1...10 each 10.000) 13...183".000 (December 3.800. EQUITY & I.349 11..778.10 each 1.221 .443.000.664 84.053.639'.300.1AO' 1.500.289.000 Issued. Unaudiited September 30.28..378 .000.000 13.2 13.239.886 54. 98.061.ts In thousand).225 3.000.912 Current HabillUes Trade and other payables Accrued interest I mark-up Current portion of: . __ •••_.707 37..205.800.715.270 32.249' 4..300.444 18. Audited December 31 I.472 1.644 347.144 ' 58..673 {887 .047 433..2 14 13 57.IAEULIriES Theannexedl notes from 1 to 2.801) 7. subscribed and paid-up 1.823 68. 2010: 1.Ol!Illl.904 !interim financial information.594. __ .000 Share premium Employee share option compensation Hed'ginQl reserve Unappropriated profit reserve 8 110 H.other service benefits obligations Short term borrowings Deri.583.000') ordinary shares of RS. I 2.59.559 13..651.580.832 74.304.786 62. 111 116 I .889 -..07'6.911.546 20.000 II 1.481 TOTAl.borrowings .636 970..000 10.082 10.660..---Rupees .620 8.000 888.728.6 673.000 (December 31.335 65. 6.397 (593.118 17.12.72.045.732.LlTIES Equity Share capital Authorised 1.277) 3.208.9.981...1.874 83.000.-- 2011 201'0 EQUITY & LJlABI.144 58.387 1'6..

553.--Ru pees ••••---.691. - - (1.769 22 (107. Note 3 months ended September 30.for the period .331) (419.for prior periods Deferred 21 311.•.204) (525.377. Director .----.393 (6.784 (342. 3.449 18 (4.687) (531.143 (1. 2011 9 months ended September 30.592.979) 5. 2010 --· 2011 ••--.982) 10. 2010 9 months ended September 30.616.68 2.--.964) 240.diluted 23 23 1.104) (99.25 1.886) 2.234) 1.056.789 (1.665 Earn:ings per sha're .335.972) (208. 2011 CONDENSED INTERJM PROFIT FOR THE NINE MONTHS (Amounts in thousand except for earnings per share) 3 months ended September 30.• ····.•• ·····.418.018.951 340.417) (639.780 22.603 702..4 ENGRO FERTILIZERS LIMITED AND LOSS ACCOUNT (UNAUDITED) ENDED SEPTEMBER 30.705 12.25 2.097.193.526) 953.809) (2.047.593.583.534 ..470 (638.81 3.425 (2.326 Profit for the period 1.81 0.819.158 (10.23 0..461') 4.193) (153.463.358 (265.369) 12.823) (811. before taxation Taxation Current .250) 6.953.788.784 (122.955.68 The annexed notes from 1 to 29 form an integral part of this condensed interim financial information.510.423 (311.926 Net sales Cost of sales Gross profit Selling and distribution expenses Administrative expenses 19 20 10.•••••••••••••••••• ---.083.97'4.861) 4.27 3.058) 1.870 866.098' (689.572) 463.basic Earnings per share .966 (575.878.762) 3.037 Other operating income Other operating expenses Finance costs Profit.481 (1.950) 463.373.136.939) (1.704 33.

876..5 ENGRO FERTIL.IZERS LIMITED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE FOR THE NINE MONTHS ENDED SEPTEMBER 30.415) 946.273 293.534 Hedging reserve.170) 127.824 Total 'comprehensive Incomefor Ihe period 3. September 30'.548.358 3. I (2. 2011 2011 2010 --·-···-··---··--··---·Rupees··--····---·--------Profit for Ihe period Other comprehensive income 1.460 I Less: Adjustment for amou nts transferred to initial carrying amount of hedged items (Capital work in progress) 44.02B) tncome tax (Deferred) relating to hedging reserve Other comprehensive incorne/(loss) for the period.313.915 1. net of tax (22.51B) 11'1 I (650.487) 1..476 (236.095 I 1.330 (90.326 9 months .B03.178 167.034.458 (165.595) 12.510.cash flow hedges Losses arising during the period Less: Adjustment forarnou nts transferred & loss account to profit 88. 2010 INCOME (UNAUDITED) 2.502 (lSB.665 866.184. 2011 (Amounts In thousand) 3 months 3 momhs 9 months ended: ended: endedl Septem'ber30.B02 The annexed notes from 1 10 29 form an integral part of this condensed Interim financial information.641.710) 2.946) (1. September 30. Director .335.808 (364.778) ..108 475.H.391) I. I 156.353 451.ended September 30.848 I' 258.344 (34.

Transfer 01 hedging reserve from the Holding Company [J 100.510.-Sha~e premium IJnapproprlated profit I (accumulated lossl Share capital 'Total Salanee as at January 1.000 I 10 ""ul 10. net of tax CJ I 10.------Rupees-------------------------------------------. 2010 Premlor 'the period Other comprehensive' income .144 DDD (609.848) (887.~3<I 1 '-------1::1 (2~36'~10ll.1'44 7.118 Balance as at September 3D. 2010 (audited) Transactlons with owners (276) (276) 10.829.000) 'Balane.739.673 (2.000) CJ c=J c=J 2.877.:37'8 111.000 7.639.378 Bonus shares Issued during the fourth quarter of 2010 in the ratio of 260 shares for every 100 shares held Total comprehenslve Income for the three months ended December 31.000 (7.999.277) 651.748.673 10.728.000 11144 II 58397 II 3'510'~261 293'~761 293.000 2. 2011 (Amounts in thousand) Employees Hedging share opllon P'9-serve com pen satlcn reserve --·-------··-··-····-------·------.6 ENGRO FERTIUZERS LIMITED CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30.878. net of share options lapsed Bonus shares issued during the second quarter of 201 0 in the rallo of 2.719 10.144 I 1 58.673 I 851'~621 1 (40~48ll (40.592 Share options lapsed during the period (note 8.673 2 .748. 2010 (audited) Transactions with owners (544) (544) Transfer of Fertilizer Undertaklog .239.759.cash flow hedges.429) 2. Director .'729.880.443'.cash now hedges net of tax 58.9.052 13.cash now hedges.6390. 2011 Profit for the period Other comprehensive income .880 shares for every 100 shares held Total comprehensive Income for the nine mentns ended September 3D.980. 2010 (unaudIted] Transactions with owners 12.062 3.326 7. 2010 Profit for the period Other comprehensive income .144 (609.l0 eacl1lssued to the Holding Company .710) (846.534 2.476 j593.2) Total comprehensive Income for the nlne months ended SeptemberJO.728. 2011 (unaudltad] The annexed notes from 1 ·10 29 form an integral part of this eencensee Interim financial information. net of tax Balance as at December 31. (236.878.660.990 58.e as s.t September 3D.000 II 11.8011 3.719) 58.993 shares of Rs.129'0425 Other transactions with owners Issue of share options to employees.

779) (7.661.751 . (PP. 2011 INTERIM STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER .(Amounts in thousand) Unaudited 9 months Note ended September 30.306) (599.318.959) 622.941.230 2.981.9 forman int.E Repayment of sub-ordinated loan by associate company Income on deposits I other financial assets Net cash used in investing activities Cash flows from financing.191 ) (6.826.466. activities Proceeds from borrowings Repayments of borrowings Net cash (used in) I generated from financing activities Net increase in cash and cash equivalents 4.564) (912.793.881.688) (27.609) (8.911 36.258) I 11.104 (6.091 709.300) 10.345.123 (169.·••·.744.OS3 Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 25 3.920 1. 2010 -·------·.063) (2...612 (8.••••-.781) 362.-·-·-··-··· 4.074.783) (1.net Net cash generated from operating activities Cash flows from investing activities Purchases of property.957) 3.221) 24.220 (451.944 Unaudited '9 months ended September 30.152.310..110 3. (1.283 The annexed notes from 11 to 2.536. plant and equipment.175.7 ENGRO FERTILIZERS CONDENSED LIMITED OF CASH FLOWS (UNAUDITED) 30.177 (160.004) other servlce benefits paid Finance cost paid 24 112. 2011 Cash flows from operating activities Gash generated from operations Hetirementand Taxes paid Long term loans and advances to executives and other employees .E) Proceeds from sale of PP.000 770. Director .·Rupees--.000 455.697) 1 (4.41:5.217 (577.egral part of this condensed interim fjnancial~ information.963.461.

Capital spares 86.2.203 67.711. 2011.20111. Karachi. Actual results may differ from these estimates. purchasing and marketing 'of fertilizers. Clifton.being submitted to the shareholders in accordance with section 245 of the Companies Ordinance.lying the Company's accounting policies and the key sources of estimation and uncertainty were the same as those that apply to financial statements for the half year ended June 30. 3 SUMMARY OF SIGNIFJ:CANTACCOUNTING POLICIES The accounting policies and the methods of computation adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of audited financial statements of the Company for the half year ended June 30. The Company's registered office is situated at 7th & 8th floors. 4.534 632.577 318. 2011 Audited December 31. PLANT AND EQUIPMENT Unaudited September 30.011i I(Amoul1ts tn thousand) 1 LEGAL STATUS AND OPERATIONS Engro Fertilizers Limited (.029.687 84.1) .'Interim Financial Reporting'.0 16. 5 PROPERTY. Plot Number HC-3. policies. Exchange.340.265 309. I. including expectation of future events that are believed to be reasonable under the circumstances. 30. Block 4. This condensed interim financial information does not include all the information required for complete set of financial statements and therefore should be read in conjunction with the financial statements for the half year ended June 30. 2009 in Pakistan under the Companies Ordinance.42.. 2010 Operating assets at net book value Capital work in progress .. The Company has. 2011.t also requires management to exercise its judgment in the process of applying the Company's accounting. 4 4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDG'EMENTS The preparation of this condensed interim financial information in conformity with the approved accounting standards requires the use of certain critical accounting estimates.518 941. 2 BASIS OF PREPARATION This condensed Interim financial information is unaudited and has been prepared and is . The principal activity of the Company is manufacturing. 1984 asa wholly owned subsidiary of Engro Corporation Limited (the Holding Company).1101 68.221 I I .8 ENGRO FERTILIZERS LIMITED NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UNAUDITED) F'ORTHE NINE MONTHS ENDED SEPTEMBER. the significant judgments made by management in app. 1984 and International Accounting Standard 34 .377.Expansion and other projects (note 5.319. The Harbour Front Building.370. issued Term Finance Ceilificates which are listed at the Karachi Stock. Scheme Number 5.2 During preparation of these condensed interim financial statements.the Company') is a public company incorporated on June 29.783 87. Estimates and judgments are continually evaluated and are based on historical experience and other factors.

555.902. ..l(>.410 217.670. 5.1 The Company declared commencement of commercial productloneffectl. physical contruction) except for the borrowing cost on certain efficiency units which were completed during June .11. Accordingly. fixture and equipment Advances to suppliers Others 353.1).1.243. 1.073 361.067 176..600 10.264.950.2011.. Unsecured 195.2 Unaudited September 30.ggregatlng to Rs.457 7 TRADE DEBTS Considered good Secured (note 7.1.. 71.395.335 to operating assets in the current period which isin addition to IRs.:.530.017 -.605 67. 2.8.462 1.780 pees.237 352.9 (Amounts iin thousand). The capacity of the Enven Plant Is1.73~) Considered doubtful Provision for impairment 217.0 ..11 . 5.350 171.Expansion and other projects Unaudited September 30.274..:-.2t.82. The Company ceased capitalization of borrowingl costs ·of the main Enven plants on Apliili 30.942.577 5.378 8/95.73.519.310 39....438 623. the Company has transferred costs related ther1etoa.073.ve J1une 24.219 52.344 352.045 632. 7.2211 220. adjacent to 'existing Daharkl Plant.944 8...1)73 225.=-=(~8'' :':c0". 2011 of Urea Expansion project "Enven Plant". 2011 Audited December 31.966 8.!.237 8.907 capitalized in previous years bringing the total current cost to RS..718 14.········-·~···-· 576..01i1 --------------!Ru 6 STOCK-IN~TRAD:e Raw materials Packing materials Finished goods 1.:!O.0111 (th.0'7·9 272.1 These d'eblsare secured by way of bank guarantee and inlandlletterof credit..3 million tons 'of urea per annum. 2010 Plant and machinery Building and civil works F:urniture.e date when substantiallyall the activities necessary to prepare the main Enven plants were' completed Le.641 Audited December 31" 2010 46.1 Capital work-in-progress . Otheranclllary cost transferred to operating assets during the current period includes borrowing costs amounting to IRs 13.3.265 44. IBorrowing: costs incurred subsequently have been expensed..341 16..9'44 . 2.711..324 789.L) __ 342. .374 39.827 ..31.

673 Movement iinsl'ilall'eoptions outstandIngl the period is as follows·: Balanceat start of period I year Options issued during the period I year Options lapsed during the period I year Sa'ianceat end of t:he periodll year (note 8.".'949 (276) C 54. .pee. 3 share option eempensatlea IIsseI'Ve 58. 4.~~..8.949 .duly 2 approved by SEep. Se.' 0.at end of the period I year ..9.s----------·· The above mentioned 9 LOANiS.tion e.. 42_-..1 .2).'97.000 4.890.Gas charge (note 9.udiited Unaudit.Options lapsed due to employee resignation Amortisation for the._.. of share options outstanding at the end of the current period equal to f7.. .2~) 1.1! Defslired. 20111 2. all associated company Loanaadvances ' and deposits (note' 9.2 Employee Balance Options Optlons Balance 8•.4'08 2.832 ' 239.. 20111 2010 -----------!Ru.010 _ ••·-. of period I year iissued during the period I year lapsed due to employee l1esignation at end of the period I year 58.considered good 115.Deoember 311.607. However..870 413.rent 8.ed Se.~5~1.OOO 8. ) ~702 at start.. 27 ...1) 4.~t2OL)__ ~~'(~1. at end of ~(~27~.x:pense 3. . Deoember 311.9'20 2.~5..100.422.Cur.327 .839 -=-:-:!(~1.91i4.673 58. .352 "__-=_""".609.869 770.. DEPOS!IITS AND PRE!PAYMIENTS Current portion of long term loans and advances to executives and other employees .423.7'02 (276) ___ . ____ ~(~2~3..8871' 25.11 which makes tihe total number share options do.710~0~')...11) Prepayments _..-!Ru.. A'DVA:NCE.ptember 30.843 • Others Provision for impairment __ 32._ •.'27411 745.employeecompensa.610. not include the effect of bOl'lusshares issued in the fourth quarter of 20110.ptember 30.3.453573. .0.3.S.6_) Balance at start of perIod I year Options issued durillg the period I year .71 1170..000 I Sub-ordinated loan to IEngro Eximp (Private) Limited. -tnsurance 1 .. -•.914. Further consequent to issue of bonus shares.397 58.'6~)------~(2=76~) 58..J I 36.. A.408 1.(""'3..~1~OO~.240 .900 ~(E2~3.pees··········_····· 8 EMPLOYEE SHARiE 'OPTIION SCHEME . in thousand) Unaudited Audiited .937.10 (Amounts.. parlnd I year Balance . the exercise :price was also adjusted to Rs .. 2 per share.. such adjustment has no effect on tihe fair va'lue of share 'options recognised ill the financial statements.) 4..

.~••~·.987 14... (PcPTFC 1 and PPTFC2) on 11. and 2.010: Rs . the' Company listed ifs Pfivately Placed Term Finance Certificates the Karachi Stock Exchange under the symbol TFC 4 and TFC 5 respeotively. made to Sui Northem Gas Pipeline Limited under Take or Pay arrangement in respect of the Elwen Plant The Company is confident that such prepayments will be adjusted a.978.. The TFCs" IFC's faclHty andabove-mentioned bridge loans are seoured by a subordinated floating charge over all present and ful. % over three month KIBOR for Rupee facilities. month KIBOR. on account of: • ForeIgn exchanqeforward contracts • net • Foreign exchange option contracts .67.. Internationa'IF'inance Corporation's (lFC) facility and bridge loans obtained in the year 2010.1 The Company has began repayment of its long term finance facilities obtained for its urea expansion project 11.039) 477.11 (Amounts in thousand) 9.OOO (December 31.270 57. TFC 4 and TFC 5.540) 319.801) 11'0.3 The ma.~12:'-::1:-'-::.00% 'Over six month LlBOR.277) Deferred tax (5:93.2 Unaudited Audited December 31.140 14.583. 11 BORROWINGS· Secured Long term finance utilised under mark-up arrang:ements Certificates 2010 20111 -.000) linterest free loan to Descon Engineering ILimited.739 (231. exduding the. 2.464) _._ ..909. and l' . repayable on demand. are secured by equitable mortgage upon immovable assets located at Daharki and hypothecation charqe on fixed assets of the Company.57% to '6..4. 650. The loan.757) (913.762 (887.a contractor to the Enven Plant.00% to 2..40% over six.11 Hedgingl reserve primarily represents net off recognised gain! losses.686 8.546 '62.2 During the period.1758~) (t.l(.gainst the expected gas ccnsumption lin the coming months.22...•• Rupees ••••••••• •••••••• 10 HEDGING RESERV.:1.'07..1 These include Rs.650.MO ..789 56.660.304. is given aqainst a Corporate Bond/Guarantee and Promissory Note. 9.ur.....Interest rate swaps (19. Unaudited September 30" Audited December 31..651..311. Seiptember 30" 201i1 2010 . Less: Current portion shown under current liabillties Balance at end of the period I year 11.783) (893.546 71.2 ..365.1059 10.. Represents payments.E Hedging reserve.. for USD facllities. the effective portion of changes In fair values of deSignated cash fl'ow hedges.886.889... . 3 These facilities.turity of loanfacillties are upto 7 years and mark-up range from 1.417) (12.-·--·--··Rupees·--·-····-····· 52.e fixed assets excludIng land and buildings..

'698) at various maturity dates..732 13. 2011...1 13.454 (December 31.804 1.055 negative).. . The net fair value of these contracts as at September 30. 2010: Rs.2.1) ....5.14.119 1 10..664 Less: Current portion shown under current assets fliabilities Cash flow hedges: .442 10.000 (December 31.693 1 - 2. As at September 30.5~8.387 ..1. 1. 1.. 13.735. -------367.. the Company had forward exchange contracts to purchase Euros 1.4641 .000 (December 31.2011 Assets Liabilities ----------------------------··. 2011. the Company obtained additional sub-ordinated loan of Rs.1.1.229 (December 31. 234. 1.638 positive).:.Unsecured During the period. 2010: USD 85. The Loan carries mark-up at rates not being lower than the cost of the Holding Company for finances of like maturities plus 1% on a quarterly or semi annual basis. 1.BOROINATED ILOAN FROM HOLOING COMPANY .1 1 Foreign exchange forward contracts The Company entered into various forward exchange contracts to hedge its foreign currency exposure.464 426.000.500.444 888..638 .329 (December 31..: __ .442 - .2010: Rs. The entire loan is payable on or before the end of the term. As at September 30. - I I 1. 2010: Rs.----------------.000) at various maturity dates to hedge its foreign currency loan obligations.249 2.061. 2015.447 997.Foreign exchange option contracts .638 234.. -=-==:-" 2.447 2. 2010 Assets Liabilities --.055 12..2 ..055 12.664 293.638 234. The fair value of these contracts.--------Rupees Conversion option on IFC loan Cash flow hedges . 10. 2...010: Euros 2. forward contracts to hedge its foreign currency exposure. as at September 30..Foreign exchange forward contracts net (note 13.868 673.2SU. 13 DERIVATIVE FINANCIAL INSTRUMENTS Unaudited September 30.638 . 2.500... its Holding Company bringing the total loan amount to Rs 3.664 30..- 10.net . 2011 is negative and amounted to Rs._j11 1.Foreign exchsnqe option contracts .2) Audited December 31. at the option of the Company... 1.Foreign exchange forward contracts .. 2011 is negative and amounted to Rs.12 (Amounts in thousand) 1.321..Interest rate swaps II 30.000)..000 from Engr1) Corporation Limited.Interest rate swaps (note 13. that is September 14. the Company had forward contracts to purchase USD 152.. The Company entered in various USD: PKR.664 433..

OOO). The outstanding notonalamount as at September 30.2. N.289.retirement benefits .631) (10.580.2'. 540. Tile outstanclin91 notional amount as at Sept'ember30..500 (December 31.) (20. .541 4. receivables ~ others .163 negative) .376..166 8'9. Audited IDecember 31.•-·---··--------Rupees---··-·--~Deferred taxation (note 14. Under the swap agreement. 2010: USD 85.273 (December 31. Exchange Loss .inventories. Carried forward minimum tax .Provision for: .158 (324. 2011 is negative and amounted to Rs.466.514) (247. 13.739) (245. Th.995 neg:ati:ve).Accelerated 16.47% which will be' settled semi-annually.104) (4.. 2011 was USD 109. 457.LIBOR from Standard Chartered Bank on notional amount and pay fixed 3.835.Carried forward tax losses substantia'ily pertaining tax depreciation .1) Deferred income (note 14.200. swaps The Company entered into an interest rate swap agreement to hedge Us interest rate exaosure onfioaUng: rate committed borrowing under an Offshore Islamic Finance Facility agreernent. Under the swap agreement.. the Company would recelve USD-UBOR tram Citibank.274 (December 31i.440 2.. .707 2.1 Deferlredtaxation Credit' (Debit) balances arising on account of: depreciation allowance .. Unaudited Se. The fair value of A t'he interest rate swap as at September 30.2 (37.slow moving stores and spares and doubtf. 1166 ---2::-~.Pakistan on notional amount and pay fixed 3. The fair value of the interest rate swap as at September 30.for a notional amount of USD150. Fair value of IFe conversion option .200.2010: USD1'50.413) (311..000).73% which will be settled semi-annually.2::-:0::-':'4::'-' .sal1d) 1i3. 2.2 2010: Rs .e Company entered into another interest rate swap agreement to hedge its interest rate exposure on floating rate committed borrowing from a consortium of Development Finance Institutions for a noucnat amountof USD 85.87. 654.1 Interest rate.2014..13 (Amounts in thou.811:) (477..530 (December 31..000 amortising upto .788.OOO amortising up to: September ..2010: Rs. . ..158) (24.7'62.410) to unabsorbed (11.2 13. the Company would receive USD .488.193) (31:9. .2011 is negative and amounted to: Rs.078) (26...-::'48=:8::-".Fair values ofhedginginstmments .216) 37.158) 4.:644 14.2) 2:1)111 20110 4.Aprfl 2016.ptember30'.ul.191) (4.204 92.:011 was USD 77.718 3.

20'10: Rs.000 (December 31. 96.150.. 3.9.Engro Vopak.14 (Amounts in thousand) 14.0'36 6·.369' 259... fa.315 286..742 110'6.upon funded financing facillti'es ranqes from 13.cil'ities for short term financesavailable from various banks amounts to Rs.Audited 'December 31.1 .873 5.006. 4. 2011 .000) alongl with nnn-fundad facilities of Rs.'626 Creditors Accrued Ilabillfies Advances from customers Payable to: .450.245 29 232.450.201 9. 2010 .9111. stores and spares and other merchandise and on all presentandl future book debts of the Company.0'22 296 151!.Engro Eximp (Private) Limited .256 2.0'22 2.Engro Corporation IUmited .80'0 94. The rates of mark. an associated company.upees~··~~~·-·~-·-1.698 2.. Terminal Limited • SinGh Engro CoalllMining Company Limited Deposits irom dealers refundable on termination of dealership Contractors' deposns and retentions Workers' profits participation fund Workers' welfare fund Sales tax payable Others 999.900.354 115'. for the: Tight to use the Company's infrastructure facilities at Da'harki Plant by the employees of 'Engro Powergen Qadirpur Limited (formerly Engro.0'45.635.338..'627firom Engro Power'gen Qadirpur Limited (formerly Engro Energy Limited).655 1.9.·R.15% and all the tacditiesaresecured by floating charqe upon all present and future stocks includ. The amount is being amortised over such period .15.SHO:RT 1:6.0'0'0'(December 31.0(0) for Bank Guarantees.472 68 11. EnergiY Limited) for 8' period of twenty five years. finished goods. materials.856 9.inQl raw and packaging.--.005. 2·010:Rs..2 IDet:er~edl iiincome The Company in 2009 received an amount of Rs .ANIDOTHER PAYAB!UES Unaudited September 30.096 3.Q15 23 14.-- •• -.190 1.1 TERM BORROWINGS The funded.97% to 15. . 15 TRADE ..034 961. 11.349' 16.

99. and (iii) both the Company and gas field (Oadirpur). Further.. 2011 Commitments 17. All Pakistan Textile Processing Mills Association (APTPMA). with right to first 100 MMCFD gas production from the Qadirpur field.730 (December 31. Karachi against the Ministry of Petroleum and Natural Resouroes. The award for the second arbitration has not been recognised due to inherent uncertainties arising from its challenge in the High Court of Sindh. 36.15 (Amounts in thousand) 17 CO:NTI'NGE'NCIESA'ND COMMI:TM!ENTS Contingencies 17. 5 17. 36.879 . against the Company not acknowledged as debts amounted to Rs. 2010 1.295) have been issued in favor of third parties. 1.payment of for:eignexchange risk cover fee on long term loans and has filed a suit in the High Court of Sindh. 62. Also. and upon payment of valuable license fee. no orders have been passed in these matters.6 Unaudited September 30.imposed by the State Bank of Pakistan (SSP) for alleged late.7 Property. as confirmed by the legaladv. however. Claims. The Company has filed a constitutional petition in the High Court of Sindh. including pending lawsuits. Agritech has additionally alleged discrimination in that it is receiving less gas than the other fertilizer companies on the SNGPL system.2 Bank guarantees of Rs.isor.214. through separate proceedings filed before the Lahore High Court that the supply to the Company's expansion plant is premised on the output of Qadirpur gas field exceeding 500 MMCFD by 100 MMCFD and the Gas Sale and Purchase Agreement (GSA) dated April 11.2010: Rs. The Company is contesting the penalty of Rs. Agritech Limited (Agritech) and 27 others have each contended.745 Audited December 31. 2011 has ordered that SNGPL should supply 80-100 MMCFD to the petitioners new fertilizer plant. 2007 with Sui Northern Gas Pipe Line Limited (SNGPL) be declared void ablnitio because the output of Qadirpur has intact decreased. that is to initially supply the Company. and is of the view that it has a strong case for the reasons that (i) 100 MMCFD gas has been allocated to the Company through a transparent international competitive bidding process held by the Government of Pakistan.3 17. the Company's management. conslder the chances of the petitions 'being allowed to be remote. The honourable High Court of Sind on May 31. are in Sindh. The Holding Company had commenced two separate arbitration proceedings against the Government of Pakistan for non-payment of marketing incidentals relating to the years 1983-84 and 1985-86 respectively. discontinuing or curtailing the aforesaid supply. Ministry of Industries and Preductlonand Sui Northern Gas Pipeline Company Limited for continuous supp'ly of 100 MMCFD gas to the Enven Plant and to prohibit from suspending.9'36 paid and expensed in 1'99'7. The Company has out rightly rejected these contentions.630. 47.2010: Rs. 995. Shan Dying & Printing Industries (Private) Limited. A partial refund of Rs.800 whereas the award for the earlier years is awaited.1 17. recovered in 1'999'from SBP and the recovery of the balance amount is dependent on the Court's decision. However. plant and equipment ----------------Rupees-----------891.018). Aurguments of all sides have been heard and a final decision has been reserved. The sale arbitrator in the second case has awarded the Company Rs.4 11.618 was. neither the gas allocation by Government nor the GSA predicates the gas supply upon Qadirpur field producing 100 MMCFD over and above SOD MMCFD.018 (December 31. (ii) GSA which guarantees uninterrupted supply of gas to the expansion plant. 17.

.~.12 170..733 20.177 36 3.76 8'18.084) 10.455 '6.392 21.52.091 34. 2.204 112.735 147.668 199. stationery and other office expenses Travel D.epreciation Amortisation Purchased services Insurance Other expenses 243.063 14.874 24.691.821 1. rates and taxes Communication.. wages and staff welfare Fuel and power Repairs and maintenance Depreciation Amortisation Consumable stores Staff recruitment.788 1.118 . stationery and other office 'expenses 'Insurance Rent.._) 6.376 20.fety and other expenses Product transportation and handling Royalty Expense Repairs.054 302.501 1:6.267 60:.174 3.2.273 2.574 114.441 2.347 16.369 .083..815.7 10.~~:!~~~~~:~~ I __ --->.542 2.592. Una.056.331 .573.udited 9 months ended September 30. training.IJ:pees·----··-·-·-Raw materials consumed Salaries.22.266 10.571 1.680 9.940 34. rates and taxes Other expenses Cost of goods manufactured Add: Opening stock of finished goods manufactured Less: Closing stock of finished goods manufactured Cost of sales 5..(Amounts in thousand) 18 COST O:FSALES Unaudited' 9 months ended SeptemberJO.•••••R.317.693 245.839.477 (511. wages and staff welfare Staff recrultment. 9'4_2.3 115. training".539.. sa.184 813.453 83.384 96.5.650 11.'9114 1.626 36 1.996 455.132.(7_2_3..113 2.285 11.284 23.250 119 S'ElUING ANID'DIISTIRIBUTIONIEXPENS'I:S Salaries....786 25.3.149 5.739' 673.484 13..644 61.9.31:9' 223.705 30.170 838 10.2.403 41.095 2.220 30.791 33.011 201'10 ---••---. and maintenance Advertising and sales promotion Rent. safety and other expenses Purchased services Travel Communication.

. _ .705 " 9.466 1.. 428. 20110 Saiaries.s 982.304 11.554 is adjust. 450.INCOME On financial essets Income on deposits father fi.000 21.397 8.595 for financial year 2008 from the . .22. 443.10 4 525.328 16.840 16.(.1 Represents commission earned as selling .934 '6.413 44. . . :561..018 137. 201'11 Unaudited 9 months September 3'0.1) Gain on disposal of property. The Holding Company in its tax return for financial years 2006 to 2008 (tax years 2007 to 2009) claimed the benefit of Group Relief under section 59B of the Income Tax Ordinance.887 ___ -.1i 10.159 50.. 443.097 309.9'36 21.926 21. safety and other expenses Repairs and maintenance Rent. feriiliz.er on behalf of Engro Eximp (Privat. 6.736 340.. including adjustment of demand of Rs.ed through a stay order. The Company has filed' an appeal wIth the Commissioner Inland Revenue (Appeals) who restrained the department from laking any coercive action unless the assessed refund of Rs.20111..29 131.103 and IRs.6.agent of imported under an amended agreement effective January 1. stationery and other office expenses 4. rates and taxes Communication.3_4_8_ 419..190 plant and equipment 108.37.847 Travel Depredation Amortisation Purchased Donati:ons Other expenses services 5. filed refund for t:he year and non-adjustment of assessed refund amounting to Rs..188 14511 . amounting to Rs.17 .760 16. of embeoded derivatives 434.007 63.862 (rectifled to IR..Amounts in~l1ousall1d)' 20 ADMINISTRATive IEXPiENSES Unaudited 9 months Seiptember30.. IEngro Foods limited! (EFL).'9'20 25.e) Limited.000 respectively.982 36.744.. Subsequ:entl'y. the demand has been partially adjusted against refunds arising on account of appeal effect orders for income/financial' year 1995 to 2002 (discussed below). 1.687 702.643 Staff recruitment.2 54.2.nancia'i assets Gain on fair value adjustments On non-financial assets Commission income (21.485 17. '.682 210.-10"".554 relating to financial year 2007.. training. and raised a demand of Rs...636 11..754 11. During the period.wages and staff welfare 298. Rs. 22 'TAXATII:ON As a result of demerger.5'611 18. 2001 (the Ordinance) on losses acquired for an equivalent cash conslderation from its wholly owned subsidiary.861 21 OTHIER OPERATING . Others 319... the tax department finalized the audit for the financial year 2009.118 4..958). all pending tax issues of the Fertilizer Underta'king Major issues pending befor-e tile tax authorities are described below: nave been transferred to the Company.

644). Rs. payment demand of Rs.018 1.. The tax department has however.~.51!0. mainly on account of disallowance of Group Relief (in ali three years). including the references filed by the department in high court.against which the management requested the department to apply its refunds granted during the period against these demands..0000 and Rs 600.2.8000 ______ .11:0 . The Company is confident that alii pending issues..ge adjustments for: Assumed conversion of employees' share options Assumed conversion ct USD 9.OClO.0110 ended 2011 Profit fer the period Add: lnterest on IFC loan of USD 9'. However..670. 2007 and 2008 respectively.009) on January 27.000 IFC lean Weighted average number of shares for determination of diluted iEPS 1.1.20005.000.S()O . inter corporate dividend (in 2007 and 2008) and write down of inventories to net realisable value (in 2(08) besides certain other issues.2007 and 2008 respectively. 1 1 ~ 9.0000 (net of tax) Profit used for the determination of Diluted IEPS 3. Uptill last year.845 and Rs.596.800 1.18 (Amounts iin thousand).byadjustin.0072.2008 and stay by the Department for the payment of the balance amount was granted to the Hol'ding Company for financiall year .326 8.072.072.. 400.674 11 ~7~. The information necessary to calculate basic and diluted earnings per share is as follows: 9 months 'ended September 30. Rs..814 for financiall years 2006.expiry of the stay period raised a.784 3. 23 EARNINGS PER SHARE IBasic earnings per shares has been calculated by dividing the profit attributable to equity holders of the Company by weighted average number of ordinary shares lin issue during the period.218 (after adjustment ot Rs561.878.2008 tlll Decem'ber31. appeal effect.g the weighted average number of ordinary shares outstanding for assumed conversion of share options under IEmployees'share option scheme and the convertible equity option on IFC loanof iU'SD9.51 9.479 (rectified to Rs . fiiled reference applicatlon against the ITAT decisions before the SindI'! High Court. orders were received relating to financial/income years 11995 to 2002 which were decided in Company's favourat ITAT level. The Hol'ding Company had filed appeal with the Ccmmissicner Inland Revenue (Appeals I) for financial year . Stay by the High Court of Sindh for payment of balance amount for financiall year 2006 was granted to the Holding Company pending decision of the appeal filed by the Holding Company before the Income Tax Appellate Tribuna' (ITAT). 20011. 170. the Ho:lding Company had paid IRs.0811.534 2. Dilutive earnings per share has been calculated . the tax department upon . 509.3~4~4~.a..000 for financial years .534 _ •• Numbers (lin thousand~--Restated Weighted average numberof ordinary shares Add' : Weighted aver. 9 months September 30. 476. for financial year 2007 the Issue of Group Relief was decided by the Commissioner Inland Revenue (Appeals I) in Company"s favour a. 2001 Q. from filed refund of financial year 2. 910. During: the period..1. Appea'i effects relating to financial years .2006.878. will eventually be decided in its favour. .gainst which the tax department filed an appeal with ITAT.. 2. The tax department had raised demands of IRs.. . 406.811S 1 . which is pending for hearingl.. 20006 and 20007 are pending at the department level. However.

091 1.344.4..322) 46.892 56.8'14 19.283..162 (971.964) • - 25 CASH AND CASHEQ'UIVALENTS Cash and bank balances Short term borlOwingis Short term investments 7:55.192 12..751.141.20 1.178 (31.2.589.047) 3.616 790.941.329') 135.964): 4.162..738) 963.428.134. '123 7'90.175. 2011 September M.'646) 4.034 600 15.576 (445.177 24.283 .047) I:ncrease I (Decrease) in current 'liabilities .931 (309.r30.088 3.007.814 (1..788 (13. plant and equipment Provision for retirementand other service benefits Income on deposits lather financial assets Financial charges Employee share compensation expense Employee Housing Subsidy expense Provislon for surplus and slow moving stores and spares Provision against other receivables Change in the falr value of IFC conversion option Foreign exchange loss Working capital changes (note 24..044) 1. deposits and prepayments ~Other receivables (net) (641.975 84.210) (1.198.350 3.754) 1'66.1.Stores.0'99 (840.1) 5.984.Loans.Trade and other payables . spares and loose tools ~Stock-in-trade ~Trade debts .183.058 (317.634 891' 8.574 8.1i31 ) (1: .783 465 (137.000) 700.7111 (11.330.310.076 947..371 76.188) 170.923 13. 2010 --------------Rupees·-------------Profit before taxation AdjUstment for non-cash charges and other items: Depreciation Amortisation Profit on disposal of property. 2.(Amounts in thousand) 24 CASH GENERATED FROM OPERATIONS Unaudited 9 months ended Unaudited 9 months ended Septembe.123 1 (lncrease) / decrease in current assets .8O'8) 2.845 29'.076 12.893 (317.707 11.568.1:65 .1 Working capita'i changes 479.219 (1. advances.

522 9 .453..455. other than those which ha.891..000 56.382 57.gement viz.ve been discl'osed elsewhere in this ccndensed int.358 13. provided Reimbursements Funds collected against sales made on behalf of an associate P.270 770.818 1.097 300.304 28.OOO Associated .000 884.8 !9'79.20 .(Amounts in thousand) Details of transactions with relat'ed parties cluringthe period. The Company manages seasonallty ln the business through appropriate inv.2CHJ. 1i42.583 10.tlons as a result of two different farming seasons more tiltedl towards Rabi season.071) 364.304 1.203 96.500.(01) 7...503 27.591 6.companies Purchases and services Sale of product ContribuIions to retirement benefiit schemes I fundi'S Services.104 105..739.-up paid on aub-ordinated loan Use of assets Subordinated loan reeejved from HoldinSI Company 95.59S.ayment of mark-Up all TFCs and repayment of principal amount Purchase oI T-Bill Commission an sales coli'ection Purchase of mutual fund units thr:ough associated company Redemption of mutual fund units Donation to Engr'o Foundation Commission expense Markup from associate Use of Assets Receipt oj sub-ordinated loan Land swap arrangement 1.751 99.366 1113.erimfinancia'l information.898 1 .799 1 27 SEASONIALITY The Company's fertilizer business is subject to seasonal fluctua. On an aver..000 19'2. 56.452 7:6.779 13.150 56..2M 108..1130 172.964 1'0.754 11..·------------- ended 9' months Purchases and services Services provided to iHol~diflg Oompany Royalty Reimbursements Shares issued consequent to demerger Mark.'983 340.640 1 81.age fertlllzer saiesare .542 1. September 30.935.318 29.21.'020 29..423 15..144 2.101 Remuneration of key management personnel 76. Rabi (from October to March) and Kharif (ff'om April to September).847 9.850.824. 2011i 2010 ------·---·---!Rupee·s.entory mana.442 3. are as follows: 9 months 1 ended September 30.

ial year.'Interim Financial Reporting'. the effects of which are not material. condensed interim statement of comprehensive income and the condensed interim cash flow statement have been compared With the balances of comparable period of immediate'ly preceding financ. wherever necessary. Director . the condensed interim balance sheet and condensed interim statement of changes in equity have been compared with the balances of annual audited financial statements of preceding financial year. 2011 by the Board of Directors of the Company. whereas. the condensed interim profit and loss account. 29 CO:RRESPONiDl:NGFIGURES In order to comply with the requirements of International Accounting Standard 34. COlTespondingfig:ures have been rearranged and reclassified. of comparison.21 28 DATE OF AUTHORISATION FOR ISSUE This condensed interim financial information authorised for issue on October 19. for the purpose.