Exhibit 99
 POINT LISAS NITROGEN LIMITED
 Financial Statements for the Years
Ended December 31, 2008, 2007 and 2006
And Report of Independent Registered
Public Accounting Firm




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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POINT LISAS NITROGEN LIMITED
 BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND 2007  (Expressed in thousands of United States dollars)
 Notes
    
    
    2008
    
    
    2007AssetsCURRENT ASSETS:Cash and cash equivalents
    
    
    
    
    
    $
    14,691
    
    
    
    9,805Accounts receivable  affiliates
    
    
    4/14
    
    
    
    8,685
    
    
    
    11,728Accounts receivable  other
    
    
    
    
    
    
    955
    
    
    
    722Inventories
    
    
    5
    
    
    
    14,510
    
    
    
    13,936Other current assets
    
    
    
    
    
    
    1,970
    
    
    
    1,605Total current assets
    
    
    
    
    
    
    40,811
    
    
    
    37,796NON-CURRENT ASSETS:Property, plant and equipment
    
    
    6
    
    
    
    159,033
    
    
    
    176,006Other long-term assets
    
    
    7
    
    
    
    733
    
    
    
    767Total non-current assets
    
    
    
    
    
    
    159,766
    
    
    
    176,773TOTAL
    
    
    
    
    
    
    200,577
    
    
    
    214,569Liabilities and Shareholders EquityCURRENT LIABILITIES:Accounts payable
    
    
    
    
    
    
    8,828
    
    
    
    7,026Taxation payable
    
    
    
    
    
    
    1,495
    
    
    
    3,603Other current liabilities
    
    
    
    
    
    
    5,959
    
    
    
    9,383Total current liabilities
    
    
    
    
    
    
    16,282
    
    
    
    20,012DEFERRED INCOME TAX LIABILITY
    
    
    8
    
    
    
    19,379
    
    
    
    10,910ADVANCES FROM SHAREHOLDERS
    
    
    9/14
    
    
    
    
    
    
    
    22,522Total liabilities
    
    
    
    
    
    
    35,661
    
    
    
    53,444SHAREHOLDERS EQUITY:Capital, of no par value
    
    
    10
    
    
    
    9,854
    
    
    
    9,854Retained earnings
    
    
    
    
    
    
    155,062
    
    
    
    151,271Total shareholders equity
    
    
    
    
    
    
    164,916
    
    
    
    161,125TOTAL
    
    
    
    
    
    $
    200,577
    
    
    
    214,569
  - 3 -




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POINT LISAS NITROGEN LIMITED
 STATEMENTS OF INCOME (1)
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 Notes
    
    
    2008
    
    
    2007
    
    
    2006SALES:To affiliates
    
    
    14
    
    
    $
    359,421
    
    
    
    136,633
    
    
    
    159,275COST AND EXPENSES:Cost of sales
    
    
    12/15
    
    
    
    (170,652
    )
    
    
    (89,277
    )
    
    
    (97,552
    )General and administration
    
    
    
    
    
    
    (3,731
    )
    
    
    (2,638
    )
    
    
    (2,031
    )Total cost and expenses
    
    
    
    
    
    
    (174,383
    )
    
    
    (91,915
    )
    
    
    (99,583
    )Operating income
    
    
    
    
    
    
    185,038
    
    
    
    44,718
    
    
    
    59,692Other income
    
    
    11
    
    
    
    767
    
    
    
    987
    
    
    
    1,266Gain/(loss) on disposal of fixed assets
    
    
    
    
    
    
    3,167
    
    
    
    (2,537
    )
    
    
    Income before income taxes
    
    
    
    
    
    
    188,972
    
    
    
    43,168
    
    
    
    60,958Income taxes  current charge
    
    
    
    
    
    
    (57,711
    )
    
    
    (1,763
    )
    
    
    (4,256
    ) deferred income tax
    
    
    
    
    
    
    (8,470
    )
    
    
    (14,543)
    
    
    
    (11,732
    )Total income taxes
    
    
    8
    
    
    
    (66,181
    )
    
    
    (16,306
    )
    
    
    (15,988
    )NET INCOME
    
    
    
    
    
    $
    122,791
    
    
    
    26,862
    
    
    
    44,970
 
 (1)
    
    Information for the year ended December 31, 2006 is audited. Information for the years ended
December 31, 2008 and 2007 is unaudited.  - 4 -




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POINT LISAS NITROGEN LIMITED
 STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY (1)
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 RetainedNotes
    
    
    Capital
    
    
    Earnings
    
    
    TotalBalance at December 31, 2005
    
    
    
    
    
    $
    9,854
    
    
    
    114,439
    
    
    
    124,293Net income
    
    
    
    
    
    
    
    
    
    
    44,970
    
    
    
    44,970Less: dividends paid
    
    
    13
    
    
    
    
    
    
    
    (35,000
    )
    
    
    (35,000
    )Balance at December 31, 2006
    
    
    
    
    
    
    9,854
    
    
    
    124,409
    
    
    
    134,263Net income
    
    
    
    
    
    
    
    
    
    
    26,862
    
    
    
    26,862Balance at December 31, 2007
    
    
    
    
    
    
    9,854
    
    
    
    151,271
    
    
    
    161,125Net income
    
    
    
    
    
    
    
    
    
    
    122,791
    
    
    
    122,791Less: dividends paid
    
    
    13
    
    
    
    
    
    
    
    (119,000
    )
    
    
    (119,000
    )Balance at December 31, 2008
    
    
    
    
    
    $
    9,854
    
    
    
    155,062
    
    
    
    164,916
 
 (1)
    
    Information for the year ended December 31, 2006 is audited. Information for the years ended
December 31, 2008 and 2007 is unaudited.  - 5 -




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POINT LISAS NITROGEN LIMITED
 STATEMENTS OF CASH FLOWS (1)
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 Notes
    
    
    2008
    
    
    2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    
    
    
    
    $
    122,791
    
    
    
    26,862
    
    
    
    44,970Adjustments to reconcile net income to net cash
provided by operations:Depreciation and amortization
    
    
    
    
    
    
    18,962
    
    
    
    18,231
    
    
    
    17,390(Gain)/loss on disposal of fixed assets
    
    
    
    
    
    
    (3,167
    )
    
    
    2,537
    
    
    
    Amortization of deferred gain from capital spare
parts pooling
    
    
    
    
    
    
    (166
    )
    
    
    (165
    )
    
    
    (165
    )Deferred income taxes
    
    
    8
    
    
    
    8,470
    
    
    
    14,543
    
    
    
    11,732146,890
    
    
    
    62,008
    
    
    
    73,927Changes in current assets and liabilities:Accounts receivable  affiliates
    
    
    
    
    
    
    3,043
    
    
    
    16,445
    
    
    
    (14,188
    )Accounts receivable  other
    
    
    
    
    
    
    (233
    )
    
    
    168
    
    
    
    (256
    )Inventories
    
    
    
    
    
    
    (574
    )
    
    
    (7,909
    )
    
    
    7,898Other current assets
    
    
    
    
    
    
    (365
    )
    
    
    330
    
    
    
    (495
    )Accounts payable
    
    
    
    
    
    
    1,802
    
    
    
    (109
    )
    
    
    (638
    )Taxation payable
    
    
    
    
    
    
    (2,108
    )
    
    
    (927
    )
    
    
    (7,676
    )Other current liabilities
    
    
    
    
    
    
    (3,424
    )
    
    
    2,568
    
    
    
    (2,000
    )Net cash from operating activities
    
    
    
    
    
    
    145,031
    
    
    
    72,574
    
    
    
    56,572CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    
    
    
    
    (2,320
    )
    
    
    (22,831
    )
    
    
    (11,178
    )Proceeds from disposal of fixed assets
    
    
    
    
    
    
    3,697
    
    
    
    
    
    
    
    Net cash from/(used in) investing activities
    
    
    
    
    
    
    1,377
    
    
    
    (22,831
    )
    
    
    (11,178
    )CASH FLOWS FROM FINANCING ACTIVITIES:Repayment of advances from shareholders
    
    
    
    
    
    
    (22,522
    )
    
    
    (53,000
    )
    
    
    (32,500
    )Dividend payments
    
    
    
    
    
    
    (119,000
    )
    
    
    
    
    
    
    (35,000
    )Net cash used in financing activities
    
    
    
    
    
    
    (141,522
    )
    
    
    (53,000
    )
    
    
    (67,500
    )NET INCREASE / (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    
    
    
    
    4,886
    
    
    
    (3,257
    )
    
    
    (22,106
    )CASH AND CASH EQUIVALENTS:Beginning of year
    
    
    
    
    
    
    9,805
    
    
    
    13,062
    
    
    
    35,168End of year
    
    
    
    
    
    $
    14,691
    
    
    
    9,805
    
    
    
    13,062SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:Income taxes paid
    
    
    
    
    
    $
    58,211
    
    
    $
    3,223
    
    
    $
    12,312Interest received
    
    
    
    
    
    $
    345
    
    
    $
    713
    
    
    $
    839
 
 (1)
    
    Information for the year ended December 31, 2006 is audited. Information for the
years ended December 31, 2008 and 2007 is unaudited  - 6 -




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POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 1.
    
    ORGANIZATION AND OPERATIONS
 Point Lisas Nitrogen Limited (the Company) was incorporated in the Republic of Trinidad and
Tobago in 1994 to own and operate an anhydrous ammonia plant in that country. Koch Mineral
Services LLC (Koch) and Terra Industries Inc., corporations incorporated in the United
States of America, are the ultimate parent companies each owning 50% of the Company.Koch Nitrogen International Sárl (as affiliate of Koch) and Terra Industries Inc. are
contractually obligated to purchase 100% of the Companys production for the period of 20
years ending September 2018.As discussed in Note 15 the Companys primary raw material is natural gas, which is
purchased from the National Gas Company of Trinidad and Tobago under a 20-year take or pay
contract dated October 18, 1996. Other principal components of cost of goods sold include
water and power, which are currently available only from state monopolies in the Republic of
Trinidad and Tobago, and certain catalysts which are available from multiple sources, except
one critical catalyst which is available only from one supplier.
 2.
    
    CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYCertain amounts included in or affecting the Companys financial statements and related
disclosure must be estimated, requiring management to make assumptions with respect to values
or conditions which cannot be known with certainty at the time the financial statements are
prepared. A critical accounting estimate is one which is both important to the portrayal
of the Companys financial condition and results and requires managements most difficult,
subjective or complex judgment, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain. Management evaluates such estimates on an
ongoing basis based upon historical results and experience, consultation with experts, trends
and other methods considered reasonable in the particular circumstances, as well as the
forecasts as to how these might change in the future.
 - 7 -




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POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 a.
    
    Impairment- The Company has made significant investments in property, plant and
equipment. These assets are tested, from a plant perspective, for impairment when
circumstances indicate that there may be a potential impairment. Estimating recoverable
amounts of the property, plant and equipment must in part be based on managements
evaluations, including estimates of future performance, revenue generating capacity of
the assets, and assumptions of the future market conditions. Changes in circumstances
and in managements evaluations and assumptions may give rise to impairment losses in
the relevant periods. The Company has assessed no impairment loss for the year (2007:
none; 2006: none).b.
    
    Depreciation and amortization- Depreciation and amortization are based on
managements estimates of the future useful life of long-lived assets. Estimates may
change due to technological developments, competition, changes in market conditions and
other factors and may result in changes in the estimated useful life and in the
amortization or depreciation charges. The Company reviews the future useful life of
property, plant and equipment and intangible assets periodically taking into
consideration the factors mentioned above and all other important factors. In case of
significant changes in the estimated useful lives, depreciation and amortization charges
are adjusted prospectively.c.
    
    Income taxes- The Company is subject to taxes in accordance with the tax laws of
Trinidad & Tobago. The laws do not include a provision specifically for the wear and
tear of ammonia plants, however it allows a 25% wear and tear allowance for the type of
equipment that forms an integral part of an ammonia plant. In this regard the Companys
management, for tax purposes, has taken a 25% allowance for the wear and tear of the
plant. The issue of the rate of wear and tear of the plant has been brought to the
attention of the Board of Inland Revenue, who has agreed that the allowance should be
25%.
 
 - 8 -




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POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 3.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 a.
    
    Reporting currency and basis of presentation- Substantially all costs incurred
to build the Companys operating facilities were incurred in United States (US)
dollars. In addition, all sales are billed and collected in US dollars. On-going
operating costs (except for labor and contract labor which is paid in Trinidad and
Tobago (TT$) dollars) are incurred and paid in US dollars or are linked to the US
dollar, and amounts due to and from shareholders are denominated in US dollars.
Accordingly, the US dollar has been selected as the reporting and functional currency
for the financial statements, which have been prepared in accordance with generally
accepted accounting principles of the United States of America. Substantially all items
of property, plant and equipment and other long-term assets are located in the Republic
of Trinidad and Tobago.b.
    
    Income taxes-Income tax expense is the sum of tax currently payable and
deferred tax. The tax currently payable is based on taxable profit for the year using
the tax rates that have been enacted at the date of the balance sheets. Deferred income
tax assets and liabilities are recorded based on the difference between the financial
statement and income tax basis of assets using enacted rates at the time the differences
are expected to reverse. Deferred tax expense is the change during the year in the
deferred tax assets and liabilities.c.
    
    Property, plant and equipment-Property, plant and equipment are stated at cost
less accumulated depreciation. Depreciation is provided for on the straight-line basis
at varying rates sufficient to write off the cost of the assets over their estimated
useful lives as follows:
 Buildings and leasehold improvements
    
    20 yearsPlant and equipment
    
    3 to 20 yearsOther equipment
    
    3 to 15 years
 Interest costs attributable to major construction projects are capitalized in the
appropriate asset account and amortized over the estimated useful life of the related
asset.Capital work-in-progress is stated at cost. Depreciation charges are deferred on
capital work-in-progress until project completion, at which time such assets are
transferred to the specific property, plant and equipment account.Capital spares that belong to the spare parts pools are stated at cost less accumulated
depreciation. Depreciation is provided for on a straight-line basis to write off the
cost of the assets over their estimated useful lives. The actual transfers into the
pool were done at a fair value using an indexing procedure with reference to an
industry authority. The surplus arising thereon is being deferred and recognized in
the statement of income over the remaining useful life of the spares. The deferred
gain recognized by the Company in 2008 was $166 (2007: $165; 2006: $165).
 - 9 -




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POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 d.
    
    Capital contributions and site lease premium- Capital contribution which is
related to the utility supply is being amortized over twenty years (20), the approximate
life of the plant. The site lease premium is amortized over the term of the thirty year
(30) site lease.e.
    
    Impairment of assets- At each balance sheet date, management reviews the
carrying amount of its manufacturing plant to determine whether there is any indication
that those assets have suffered loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss
(if any). An impairment loss is recognized in the Companys statement of income.f.
    
    Inventories- Inventories are stated at the lower of cost or net realizable
value. Cost is determined using the following basis:
 i.
    
    Items purchased from third parties are valued at cost on the weighted
average basis;ii.
    
    Finished goods using the first-in first-out method are valued at
total production cost which includes all direct overheads.
 g.
    
    Major maintenance costs (turnaround)- Major maintenance costs (turnaround) are
expensed in the year in which the actual expenditure is incurred.h.
    
    Revenue recognition- Sales revenue is recognized when title transfers to the
customer upon completion of loading the shipping vessel as evidenced by the bill of
lading.i.
    
    Cash and cash equivalents- Cash and cash equivalents include cash on hand and in
banks.j.
    
    Translation of foreign currencies- These financial statements are expressed in
United States dollars. Assets and liabilities in currencies other than United States
dollars are converted at the exchange rates prevailing at year end. Income and expense
items are translated at rates of exchange prevailing at the date of the translation.
 4.
    
    ACCOUNTS RECEIVABLE  AFFILIATES
 2008
    
    
    2007Koch Nitrogen International Sarl
    
    $
    
    
    
    
    3,660Terra Industries Inc.
    
    
    8,685
    
    
    
    8,068$
    8,685
    
    
    
    11,728
 - 10 -




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POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 5.
    
    INVENTORIES
 2008
    
    
    2007Ruthenium
    
    $
    2,002
    
    
    
    Finished goods  ammonia
    
    
    5,439
    
    
    
    7,947Chemicals
    
    
    723
    
    
    
    278Spare parts
    
    
    6,346
    
    
    
    5,711$
    14,510
    
    
    
    13,936
 6.
    
    PROPERTY, PLANT AND EQUIPMENT
 2008
    
    
    2007Plant and equipment
    
    $
    303,284
    
    
    
    303,917Capital work in progress
    
    
    1,087
    
    
    
    Other equipment
    
    
    3,927
    
    
    
    3,419Building and leasehold improvements
    
    
    1,841
    
    
    
    1,758310,139
    
    
    
    309,094Less: accumulated depreciation and amortization
    
    
    (152,721
    )
    
    
    (133,996
    )157,418
    
    
    
    175,098Add: interest in capital spare parts pools
    
    
    2,418
    
    
    
    2,614Less: deferred gains on spare parts pools
    
    
    (803
    )
    
    
    (1,706
    )$
    159,033
    
    
    
    176,006
 In April 2004 and January 2005, the Company entered into an arrangement with three other
companies which own substantially similar ammonia plants in the Republic of Trinidad and
Tobago for the pooling of certain capital spares. Under this agreement, the Company acquired
a proportionate interest in spares that these companies owned and transferred a proportionate
interest in its own spares to these other companies.7.
    
    OTHER LONG-TERM ASSETS
 2008
    
    
    2007Capital contribution
    
    $
    598
    
    
    
    598Site lease premium
    
    
    406
    
    
    
    406Lease option
    
    
    174
    
    
    
    164Other
    
    
    34
    
    
    
    341,212
    
    
    
    1,202Less: accumulated amortization
    
    
    (479
    )
    
    
    (435
    )$
    733
    
    
    
    767
 - 11 -




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##### 



POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 8.
    
    INCOME TAXESThe effective tax rates differ from the statutory tax rate of 35% for the following reasons:
 2008
    
    
    2007
    
    
    2006Expected income taxes
    
    $
    66,140
    
    
    
    15,109
    
    
    
    21,335Income exempt from tax
    
    
    
    
    
    
    
    
    
    
    (9,507
    )Utilization of depreciation tax benefit
    
    
    
    
    
    
    
    
    
    
    4,001Other
    
    
    41
    
    
    
    1,197
    
    
    
    159Taxation expense
    
    
    66,181
    
    
    
    16,306
    
    
    
    15,988Tax payable on current year income
    
    
    57,352
    
    
    
    1,615
    
    
    
    4,097Deferred income tax
    
    
    8,470
    
    
    
    14,543
    
    
    
    11,732Green fund levy
    
    
    359
    
    
    
    141
    
    
    
    159Other
    
    
    
    
    
    
    7
    
    
    
    Taxation expense
    
    $
    66,181
    
    
    
    16,306
    
    
    
    15,988
 2008
    
    
    2007Deferred income tax liability:Property, plant and equipment
    
    $
    19,379
    
    
    
    10,910$
    19,379
    
    
    
    10,910
 In accordance with the laws of The Republic of Trinidad and Tobago, the Company was granted
exemptions from taxes on income from anhydrous ammonia and customs duties for the seven years
commencing April 1, 1998. The Company elected not to record tax depreciation during the
exemption period. Legislation passed in July 2005 and January 2006 made it mandatory for
depreciation to be recorded for tax purposes effective January 1, 2005. These accounts
reflect the impact of the legislation on the Companys income tax liability and its deferred
tax asset.
 - 12 -




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##### 



POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 9.
    
    ADVANCES FROM SHAREHOLDERS
 2008
    
    
    2007KNC Trinidad Limited
    
    $
    
    
    
    
    11,261Terra Nitrogen Trinidad Limited
    
    
    
    
    
    
    11,261$
    
    
    
    
    22,522
 Advances from shareholders were unsecured, interest free, and repayable as and when funds are
available. These amounts were repaid in full during the current year.10.
    
    SHAREHOLDERS EQUITY
 2008
    
    
    2007Capital:Authorized:Unlimited shares of no par valueIssued and fully paid:60,000,002 ordinary shares of no par value
    
    $
    9,854
    
    
    
    9,854
 11.
    
    OTHER INCOMEOther income includes interest income received on the commercial bank accounts.12.
    
    PENSION BENEFITSThe Company maintains a defined contribution pension plan for all permanent employees where
the Company contributes 8% of an employees base pay to a deferred annuity naming each
employee as the beneficiary. Contributions for the year which amounted to $204 (2007: $165;
2006: $164) are included in cost of sales.13.
    
    DIVIDENDSDuring the year dividends declared and paid amounted to $119,000 (2007: Nil, 2006: $35,000).
 - 13 -




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##### 



POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 14.
    
    RELATED PARTY BALANCES AND TRANSACTIONSThe Company has entered into contracts for the sale of all of the Companys production of
anhydrous ammonia to Koch Nitrogen International Sárl (an affiliate of Koch Mineral Services
LLC) and Terra Industries Inc. until September 29, 2018. Thereafter, the contract is
automatically renewed for consecutive one year periods unless otherwise terminated by either
party.
 2008
    
    
    2007
    
    
    2006Sales:Terra Industries Inc.
    
    $
    183,042
    
    
    
    75,630
    
    
    
    71,318Koch Nitrogen International Sarl
    
    
    176,379
    
    
    
    61,003
    
    
    
    87,957$
    359,421
    
    
    
    136,633
    
    
    
    159,275Accounts receivable  affiliates
    
    $
    8,685
    
    
    
    11,728
    
    
    
    -Advances from shareholders
    
    $
    -
    
    
    
    22,522
    
    
    
    -
 15.
    
    COMMITMENTS
 a.
    
    Natural gas supplyUnder the terms of a 20-year take or pay contract the Company is required to purchase
a maximum of 80% of the Annual Contract Quantity (ACQ) of gas in a 365 day year. The
gas price is linked to an Ammonia Reference Price which escalates annually by 4%
compounded in each subsequent twelve month period after the sixtieth month. The
shortfall of natural gas below the ACQ must be purchased by the Company at the average
annual price for the contract year. The payment for gas not taken can be recovered
over the following five years by not paying for gas received in excess of 80% of the
ACQ. Minimum commitments under this contract are as follows:
 2009
    
    $
    20,3042010
    
    
    21,1162011
    
    
    21,9612012
    
    
    22,8392013
    
    
    23,7522014-2018
    
    
    126,297$
    236,269
 Expenditure for the year amounted to $128,584 (2007: $45,218; 2006: $48,486).
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##### 



POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 b.
    
    Pipeline equipmentThe Company has entered into an equipment lease agreement with the National Gas Company
of Trinidad and Tobago Limited for the lease of certain pipeline equipment used to
transport ammonia production to a port facility. This lease is for a period of twenty
(20) years commencing July 22, 1998. The annual lease payments are based on a
calculation linked to the price of ammonia, and are only required if the market price
exceeds the average of $170.00 (one hundred and seventy dollars) per metric ton for the
twelve month period commencing each July 22. Annual lease payments are not to exceed
$2,300 per annum. Expenditure for the year amounted to $2,300 (2007: $2,300; 2006:
$2,300).c.
    
    Plant siteThe Company has entered into lease agreements for its plant site and right of way for
the common corridor to a port facility. These leases are for a period of thirty (30)
years which commenced October, 1996 and January, 1997 and carry an option to renew for
a further thirty (30) years.Under the terms of the agreements, annual lease payments are estimated to be as
follows:
 2009
    
    $
    5152010
    
    
    5152011
    
    
    5152012
    
    
    5752013
    
    
    5752014 - 2025
    
    
    8,201$
    10,896
 Expenditure for the year amounted to $462 (2007: $462; 2006: $462).From 2006, the lease commitments may increase or decrease based on the Consumer Price
Index in the United States of America and the Index of Prices in The Republic of
Trinidad and Tobago.
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##### 



POINT LISAS NITROGEN LIMITED
 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED  DECEMBER
31, 2008, 2007 AND 2006  (Expressed in thousands of United States dollars)
 16.
    
    CONTINGENT LIABILITIES
 2008
    
    
    2007Custom bonds
    
    $
    163
    
    
    
    163
 17.
    
    FINANCIAL INSTRUMENTSShort-term financial assets and liabilitiesThe carrying amount of short-term financial assets and liabilities comprising cash and cash
equivalents, accounts receivable and accounts payable approximate their fair market values.18.
    
    RISK MANAGEMENTMarket risk represents the risk of loss that may impact the Companys financial position,
results of operations or cash flows due to adverse changes in commodity market prices.The Companys policy is to avoid unnecessary risk and to limit, to the extent practical,
risks associated with operating activities. The Companys management does not engage in
activities that expose the Company to speculative or non-operating risks.The Companys natural gas requirements are supplied under contract with the National Gas
Company of Trinidad and Tobago Limited. The cost of natural gas to the Company fluctuates
based on changes in the market price of ammonia.
 * * * * * *
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