ANNEXURE A

BENCHMARKING FINANCIAL & OPERATIONAL PERFORMANCE

PERFORMANCE METRIC HINOON FEROZ BENCHMARK TARGET NOTE

PROFITABILITY

SALES GROWTH RATE 4% 108539358% 108539358% 5%

GROSS PROFIT MARGIN 36% 58% 58% 60%

OPERATING PROFIT MARGIN 8% 32% 32% 35%

NET PROFIT MARGIN 3% 23% 23% 25% A

TOTAL ASSETS TURNOVER 1.31 0.63 1.31 1.50

FIXED ASSETS TURNOVER 2.54 0.96 2.54 2.75

RETURN ON ASSETS 4% 15% 15% 38%

RETURN ON EQUITY 9% 20% 20% 25%

LIQUIDITY

CURRENT RATIO 1.37 2.60 2.60 2.50 B

QUICK RATIO 0.39 1.31 1.31 1.50

LEVERAGE

TOTAL DEBT TO EQUITY 111% 37% 37% -

TOTAL LONG TERM DEBT TO EQUITY 37% 19% 19% 20%

C
TOTAL LONG TERM DEBT TO TOTAL CAPITALIZATIO 17% 14% 14% 17%

OPERATING LEVERAGE 473% 184% 184% 180%

COVERAGE

INTEREST COVERAGE 2.16 197.78 197.78 200

D
CASH FLOW TO DEBT COVERAGE 0.08 0.46 0.46 0.50

CASH FLOW TO SHORT TERM DEBT COVERAGE 0.12 0.94 0.94 1.00

ACTIVITY

RECEIVABLES COLLECTION (DAYS) 27 10 10 10

PAYABLES PAYMENT (DAYS) 32 109 109 70 E

INVENTORY TURNOVER (DAYS) 132 169 132 120

CASH OPERATING CYCLE (DAYS) 127 70 70 60

CASH FLOW

OPERATING CASH FLOW TO SALES 3% 20% 20% 25% F

FREE CASH FLOW TO OPERATING CASH FLOW -99% 55% 55% 60%
BETA EQUITY 0.53 0.29 0.29 0.29

BETA ASSET 0.39 0.25 0.25 0.24 G

WACC 17.87% 15.05% 15.05% 15.00%

ANNEXURE C

RATIO ANALYSIS

FEROZ HINOON
2007 2008 2009 2007 2008

PROFITABILITY
GROSS PROFIT MARGIN 55% 58% 54% 41% 36%
OPERATING PROFIT MARGIN 28% 32% 23% 9% 8%
NET PROFIT MARGIN 22% 23% 17% 5% 3%
TOTAL ASSETS TURNOVER 0.76 0.63 0.69 1.38 1.31
FIXED ASSETS TURNOVER 1.19 0.96 1.03 2.71 2.54
RETURN ON ASSETS 16% 15% 12% 8% 4%
RETURN ON EQUITY 21% 20% 15% 15% 9%

LIQUIDITY
CURRENT RATIO 2.87 2.60 2.54 1.42 1.37
QUICK RATIO 1.77 1.31 0.52 0.45 0.39

LEVERAGE
TOTAL DEBT TO EQUITY 30% 37% 30% 103% 111%
TOTAL LONG TERM DEBT TO EQUITY 13% 19% 13% 33% 37%
TOTAL LONG TERM DEBT TO TOTAL CAPITALIZATION 10% 14% 10% 16% 17%
OPERATING LEVERAGE 195% 184% 234% 458% 473%

COVERAGE
INTEREST COVERAGE 156.43 197.78 67.85 3.86 2.16
CASH FLOW TO DEBT COVERAGE 0.76 0.46 0.17 0.18 0.08
CASH FLOW TO SHORT TERM DEBT COVERAGE 1.38 0.94 0.30 0.26 0.12

ACTIVITY
RECEIVABLES COLLECTION (DAYS) 13 10 17 37 27
PAYABLES PAYMENT (DAYS) 115 109 107 51 32
INVENTORY TURNOVER (DAYS) 118 169 199 139 132
CASH OPERATING CYCLE (DAYS) 15 70 109 126 127

CASH FLOW
OPERATING CASH FLOW TO SALES 23% 20% 6% 6% 3%
FREE CASH FLOW TO OPERATING CASH FLOW 74% 55% -162% 68% -99%

INVESTOR
EARNINGS PER SHARE(EPS) 16.61 15.00 10.53 6.72 3.82
SHARE MARKET PRICE 248.00 309.00 157.00 83.50 39.20
PRICE EARNINGS (P/E) 14.93 20.60 14.91 12.43 10.26
PRICE TO FREE CASH FLOW (P/FCFF) 18.98 44.50 -26.83 15.45 -10.56
PRICE TO SALES (P/S) 3.24 4.80 2.51 0.68 0.34
ANNEXURE F

FREE CASH FLOW TO FIRM (FCFF)

FEROZ
2007 2008 2009
RUPEES'000

NET CASH FLOWS FROM OPERATING ACTIVITIES####

## 212,284 183,898 62,754

INTEREST EXPENSE AFTER TAX 1,081 967 2,389

213,365 184,864 65,144

FIXED CAPITAL EXPENDITURE ###

### 58,087 86,770 173,828
INTANGIBLE ASSETS ACQUIRED ###
### - - -
PROCEEDS FROM DISPOSAL OF FIXED ASSETS ###
### 2,280 2,369 7,112
NET INVESTMENT IN FIXED ASSETS ###
### 55,807 84,401 166,716

FREE CASH FLOW TO FIRM (FCFF) ###

### 157,558 100,464 (101,572)
ANNEXURE E
Charts

60% Profitability
80%
50% 2007 2008 2009
70%
NET PROFIT MARGIN 22% 23% 17% NET PROFIT MARGIN
40%
TOTAL ASSETS TURNOVER 0.76 0.63 0.69
60% TOTAL ASSETS TURNOVER
RETURN ON ASSETS 16% 15% 12% TOTAL ASSETS TURNOVER
RETURN ON EQUITY 21% 20% 15% 2007 50% RETURN ON ASSETS
30%
GROSS PROFIT MARGIN 55% 58% 54% 2008 Polynomial (RETURN ON
OPERATING PROFIT MARGIN 28% 32% 23% 2009 40% ASSETS)

%
RETURN ON EQUITY
20%
30% Polynomial (RETURN ON
EQUITY)

10% 20%

10%
0%
GROSS PROFIT OPERATING PROFIT 0%
MARGIN MARGIN 2007 2008 2009

Market Fundamentals
310.00

260.00

210.00

160.00

110.00

60.00

10.00
2007 2008 2009

EARNINGS PER SHARE(EPS) SHARE MARKET PRICE PRICE EARNINGS (P/E)

 MARKET RETURNS MARKET RETURNS vs STOCK RETURNS
KSE 100

20.00%

STOCK RETURNS
10.00%

0.00%
-20.00% -16.00% -12.00% -8.00% -4.00% 0.00% 4.00% 8.00% 12.00% 16.00% 20.00% 24.00%

-10.00%

-20.00% HINOON
Linear
(HINOON)
FEROZ
-30.00%
Linear
(FEROZ)

-40.00%
ANNEXURE D

BETAS

MONTH KSE-100 HINOON FEROZ MONTHLY RETURNS

Jan-08 13,667 82 230 KSE-100 HINOON FEROZ
Feb-08 13,974 84 234 2.25% 2.44% 1.74%
Mar-08 14,817 89.95 234.8 6.03% 7.08% 0.34%
Apr-08 15,210 81 240.5 2.66% -9.95% 2.43%
May-08 14,957 81 280 -1.67% 0.00% 16.42%
Jun-08 12,281 59.15 270 -17.89% -26.98% -3.57%
Jul-08 12,222 55.88 305.8 -0.49% -5.53% 13.26%
Aug-08 10,171 50 270 -16.77% -10.52% -11.71%
Sep-08 9,210 39.5 285 -9.45% -21.00% 5.56%
Oct-08 9,179 39.2 235 -0.34% -0.76% -17.54%
Nov-08 9,183 39.2 235 0.05% 0.00% 0.00%
Dec-08 9,187 37.24 235 0.04% -5.00% 0.00%
Jan-09 5,753 30 223.25 -37.38% -19.44% -5.00%
Feb-09 5,334 31.98 133.71 -7.29% 6.60% -40.11%
Mar-09 5,681 31.1 148 6.51% -2.75% 10.69%
Apr-09 6,932 32.54 145 22.01% 4.63% -2.03%
May-09 7,062 30.5 163 1.88% -6.27% 12.41%
Jun-09 7,210 30.5 150 2.10% 0.00% -7.98%
Jul-09 7,271 30 158 0.84% -1.64% 5.33%
Aug-09 7,717 30.7 161.9 6.14% 2.33% 2.47%
Sep-09 8,769 31.3 176.5 13.64% 1.95% 9.02%

EQUITY BETA ASSET BETA

KSE-100 HINOON FEROZ HINOON FEROZ

1.00 0.53 0.29 0.39 0.25

* Figures for the KSE-100 index and the share prices for HINOON and FEROZ have been obtained from
www.ksestocks.com and www.kse.com.pk

WEIGHTED AVERAGE COST OF CAPITAL

MARKET RETURN

MONTH KSE-100 MONTHLY

RETURNS
MARKET INFO %
Jan-06 9,672 MEAN MONTHLY RETURN 1.82%
ANNUALIZED MARKET
Feb-06 10,497 8.53% RETURN 24.22%
Mar-06 11,474 9.31% RISK FREE RATE 12.60%
Apr-06 11,574 0.87% MARKET RISK PREMIUIM 11.62%
May-06 11,573 -0.01%
Jun-06 10,184 -12.00%
Jul-06 9,604 -5.70% HINOON FEROZ
Aug-06 10,507 9.41% BETA EQUITY 0.53 0.29
Sep-06 10,171 -3.20% COST OF EQUITY 18.8% 15.9%
Oct-06 10,616 4.38% WEIGHTAGE OF EQUITY 87.87% 87.25%
Nov-06 11,011 3.72% COST OF DEBT
INTEREST RATE ON LONG
Dec-06 10,388 -5.66% 14.58% 13.91%
TERM LOAN OF LONG TERM
WEIGHTAGE
Jan-07 10,067 -3.09% LOAN 6.76% 12.63%
INTEREST RATE ON FINANCE
Feb-07 11,349 12.74% LEASE LIABILITY 20.20% 15.33%
WEIGHTAGE OF FINANCE
Mar-07 11,208 -1.25% LEASE LIABILITY 5.37% 0.12%
Apr-07 11,277 0.62% TAX RATE 35% 35%
May-07 12,434 10.26% AFTER TAX COST OF DEBT 1.35% 1.15%
Jun-07 12,934 4.02% WACC 17.87% 15.05%
Jul-07 13,930 7.70%
Aug-07 13,689 -1.73% 1. KSE-100 index has only been used from Jan 06 to Dec 07 to
12,233 determine market return because the year 2008 is not an
Sep-07 -10.64% appropiate market reperesentaive due to the equity market
Oct-07 13,738 12.30% crisis.
Nov-07 13,932 1.42%
Dec-07 13,926 -0.05% 2. The risk free rate is the yield on 6-month T-Bill auctioned by
SBP on 25th Sept 2009

3. The KIBOR rates have been obtained from SBP website as

on 26th Sept 2009
ANNEXURE B

COMMON SIZE PROFIT & LOSS ACCOUNTS

FEROZ FEROZ FEROZ

2007 2008 2009 2007-2008 2008-2009 2007 2008 2009

RUPEES'000 % CHANGE
Net Sales 922,369 932,298 1,085,394 1% 16% 100.0% 100.0% 100.0%
Cost of Sales 415,507 391,559 501,182 -6% 28% 45.0% 42.0% 46.2%

GROSS PROFIT 506,861 540,739 584,211 7% 8% 55.0% 58.0% 53.8%

Operating Expenses
Administrative and general 51,568 60,719 80,996 18% 33% 5.6% 6.5% 7.5%
Disribution, selling and promotional 214,440 199,425 261,186 -7% 31% 23.2% 21.4% 24.1%
Research & Development - - - 0.0% 0.0% 0.0%
Other operating income (25,664) (20,810) (23,954) -19% 15% -2.8% -2.2% -2.2%
Other operating charges 17,629 21,074 27,964 20% 33% 1.9% 2.3% 2.6%
Share of profit from subsidiary (11,288) (13,819) (11,380) 22% -18% -1.2% -1.5% -1.0%

PROFIT FROM OPERATIONS 260,176 294,149 249,400 13% -15% 28.2% 31.6% 23.0%

Finance Cost 1,663 1,487 3,676 -11% 147% 0.2% 0.2% 0.3%

PROFIT BEFORE TAXATION 258,513 292,662 245,724 13% -16% 28.0% 31.4% 22.6%

Taxation 58,259 75,638 62,966 30% -17% 6.3% 8.1% 5.8%

PROFIT AFTER TAXATION 200,254 217,024 182,757 8% -16% 21.7% 23.3% 16.8%

CASH FLOW STATEMENTS (extract)

FEROZ

2007 2008 2009

RUPEES'000
NET CASH FLOWS FROM OPERATING ACTIVITIES 212,284 183,898 62,754

CASH FLOWS FROM INVESTING ACTIVIITES

Fixed capital expenditure (58,087) (86,770) (173,828)
Intangible assets acquired - - -
Proceeds from disposal property, plant and equipment 2,280 2,369 7,112
Long term investments - (40,000) -
Long term loan disbursed (92,500) (134,500) -
Long term loan recovered - 14,188 14,188
Purchase of short term investments (100,320) (240,975) (67,507)
Proceeds from sale of short term investments - 237,174 221,661
Dividends, capital gains and income from investments 22,922 18,414 23,182
NET CASH FLOWS FROM INVESTING ACTIVITIES (225,705) (230,100) 24,807

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of finance lease liabilities (10,822) (4,444) (2,398)
Proceeds from long term loan 92,500 134,500 -
Repayment of long term loan - (14,188) (56,750)
Short term bank borrowings - net - - -
Dividends paid (38,878) (75,539) (41,938)
NET CASHFLOWS FROM FINANCING ACTIVITIES 42,800 40,329 (101,086)

NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS 29,379 (5,873) (13,524)

CASH & CASH EQUIVALENTS AT BEGINNING OF YEAR 12,302 41,681 35,807

CASH & CASH EQUIVALENTS AT END OF THE YEAR 41,681 35,807 22,283
ANNEXURE A

COMMON SIZE BALANCE SHEETS

FEROZ FEROZ FEROZ

2007 2008 2009 2007-2008 2008-2009 2007 2008 2009

RUPEES'000 % CHANGE
NON-CURRENT ASSETS
Property, plant and equipment 550,589 610,987 735,615 11.0% 20.4% 45.2% 41.2% 46.6%
Intangible assets - - - 0.0% 0.0% 0.0%
Long term investment 149,607 203,426 214,806 36.0% 5.6% 12.3% 13.7% 13.6%
Long term deposits 600 791 969 31.7% 22.6% 0.0% 0.1% 0.1%
Long term loans 75,188 156,063 99,313 107.6% -36.4% 6.2% 10.5% 6.3%
Derivative Asset-Interest Rate Swap - 823 31 -96.2% 0.0% 0.1% 0.0%
775,984 972,089 1,050,734 25.3% 8.1% 63.7% 65.6% 66.5%
CURRENT ASSETS
Stores, spare parts and loose tools 4,281 4,091 3,629 -4.4% -11.3% 0.4% 0.3% 0.2%
Stock in trade 133,816 180,788 272,988 35.1% 51.0% 11.0% 12.2% 17.3%
Trade debts 31,938 24,454 49,546 -23.4% 102.6% 2.6% 1.7% 3.1%
Advances, deposits and prepayments 6,428 10,370 14,662 61.3% 41.4% 0.5% 0.7% 0.9%
Other receivables 12,954 1,530 1,882 -88.2% 23.0% 1.1% 0.1% 0.1%
Short term investments 186,969 194,475 35,069 4.0% -82.0% 15.3% 13.1% 2.2%
Cash and bank balances 41,681 35,807 22,283 -14.1% -37.8% 3.4% 2.4% 1.4%
Current portion of long term loan 17,313 56,750 99,313 227.8% 75.0% 1.4% 3.8% 6.3%
Interest accrued 3,635 1,273 29,804 -65.0% 2240.4% 0.3% 0.1% 1.9%
Income tax-net 3,363 - - -100.0% 0.3% 0.0% 0.0%
442,377 509,539 529,176 15.2% 3.9% 36.3% 34.4% 33.5%

TOTAL ASSETS 1,218,361 1,481,629 1,579,910 21.6% 6.6% 100.0% 100.0% 100.0%

EQUITY AND LIABILITIES

Share Capital 120,561 144,673 173,607 20.0% 20.0% 9.9% 9.8% 11.0%
Capital Reserves 322 322 322 0.0% 0.0% 0.0% 0.0% 0.0%
Revenue Reserves 561,722 681,242 796,200 21.3% 16.9% 46.1% 46.0% 50.4%
Surplus on revaluation of assets 256,984 252,011 247,475 -1.9% -1.8% 21.1% 17.0% 15.7%
939,589 1,078,248 1,217,604 14.8% 12.9% 77.1% 72.8% 77.1%
NON-CURRENT LIABILITIES
Long term loan - secured 75,188 156,063 99,313 107.6% -36.4% 6.2% 10.5% 6.3%
Finance lease liabilities 1,024 1,457 475 42.2% -67.4% 0.1% 0.1% 0.0%
Long term advances - - - 0.0% 0.0% 0.0%
Deferered liabilities 48,302 49,691 53,960 2.9% 8.6% 4.0% 3.4% 3.4%
Deferred gain - - - 0.0% 0.0% 0.0%
124,514 207,211 153,748 66.4% -25.8% 10.2% 14.0% 9.7%
CURRENT LIABILITIES
Trade and other payables 131,024 116,423 146,276 -11.1% 25.6% 10.8% 7.9% 9.3%
Liability for patent and trade mark - - - 0.0% 0.0% 0.0%
Markup payable on secured loans 1,610 5,588 4,188 247.0% -25.1% 0.1% 0.4% 0.3%
Short term bank borrowings-secured - - - 0.0% 0.0% 0.0%
Current portion of finance lease liabilities 4,311 2,400 984 -44.3% -59.0% 0.4% 0.2% 0.1%
Current portion of long term liabilities 17,313 56,750 56,750 227.8% 0.0% 1.4% 3.8% 3.6%
Income tax-net - 15,008 361 -97.6% 0.0% 1.0% 0.0%
154,258 196,170 208,558 27.2% 6.3% 12.7% 13.2% 13.2%

TOTAL EQUITY AND LIABILITIES 1,218,361 1,481,629 1,579,910 21.6% 6.6% 100.0% 100.0% 100.0%