Growth a Day Is Where It All Begins; Soil, Is Where It All Growth Starts
Total Page:16
File Type:pdf, Size:1020Kb
Annual Report for the year ended December 31, 2011 Inspiring Inspiring Growth A day is where it all begins; soil, is where it all Growth starts. Progress, growth, development…are the questions each coming day. It is here where we write ourselves big or small and yet our days, and our fields resonate with growth. A yellow green baby plant growing steadily by a few centimetres brings golden profits and bliss for everyone. Between the soil and the yield is found FFC’s deepest presence – beautifully balanced and coordinated. For us it’s not just being out there which is important, but growth that is. Growth in the fields inspires the development in our business. Progress in business in turn inspires growth in the fields and brings food for everyone. This is a never-ending story of inspiring growth. It doesn’t come easily. We throw ourselves out there in the soil, in the open, in the day…we innovate, we learn, we grow and we do it everyday…on our soil! This year we are celebrating growth as it prevailed upon us; showing itself in profits with increased numbers, and in fields with better yield. It’s that time of the year when we share the gains. www.vantageprinters.com 93 - Harley Street, Rawalpindi, Pakistan. Tel: 92-51-9272308-15 Concept, Design & Printing by • Yellow (M=15, Y=80) • Blue (C=100, M=90) • Orange (M=60, Y=100) • Black • FFC 2011 AR Report Jacket • Front • 4 Color • Feb 07, 2012 • Front +104% Profit +61% After Tax Dividend Rs. 22,492 M +23% (2010 : Rs. 11,029 M) Sales per Share Revenue Rs. 25.00 Rs. 55,221 M (2010 : Rs. 15.50) (2010 : Rs. 44,874 M) Performance Debt : Equity 10 : 90 (2010 : 20 : 80) +104% 2011 +10 Earnings per Share Rs. 26.52 (2010 : Rs. 13.00) Restated +49% Market Capitalisation +37% Rs. 126,834 M +49% (2010 : Rs. 85,396 M) Return on Equity Shareholders’ Rs. 97.49% (2010 : Rs. 71.40%) Equity Rs. 23,070 M (2010 : Rs. 15,447 M) Contents 01 Vision & Mission Statements 02 Corporate Strategy 04 Policy Statement of Ethics & Business Practices 04 Standard of Conduct for Directors & Employees 05 Core Values 06 Company Information 07 Organogram 08 Profile of the Board 13 Our History 14 Board Committees 17 Management Committees 18 Business Model 19 Corporate Objectives 20 Notice of Meeting 22 Financial Performance 24 Horizontal Analysis Balance Sheet 25 Vertical Analysis Balance Sheet 26 Horizontal & Vertical Analyses Profit and Loss Account 28 Chairman’s Review 30 CEO’s Remarks 32 Financial Review 48 Operational Performance 52 Market Overview 56 Human Capital Growth 60 Corporate Social Responsibility 68 Corporate Governance 72 Future Prospects Financial Statements FFC 74 Report of the Audit Committee 76 Statement of Compliance 78 Review Report to the Members 79 Auditors’ Report to the Members 80 Balance Sheet 82 Profit and Loss Account 83 Statement of Comprehensive Income 84 Cash Flow Statement 85 Statement of Changes in Equity Growth 86 Notes to the Financial Statements Consolidated Financial Statements 123 Auditors’ Report to the Members 124 Consolidated Balance Sheet 126 Consolidated Profit and Loss Account 127 Consolidated Statement of Comprehensive Income 128 Consolidated Cash Flow Statement 129 Consolidated Statement of Changes in Equity 130 Notes to the Consolidated Financial Statements 171 Pattern of Shareholding 176 Financial Calendar 177 Form of Proxy Glossary • GREY • Blue (C=100, M=90) • Orange (M=60, Y=100) • Black • FFC 2011 AR Report Jacket • Front • 4 Color • Feb 07, 2012 • Back Glossary Vision & Mission Statement Collective Bargaining Agent CBA Corporate Social Responsibility CSR Di-Ammonium Phosphate DAP Earnings per share EPS Enterprise Resource Planning ERP Vision Factory Acceptance Test FAT In a nation of increasing population, we believe there is Fauji Fertilizer Bin Qasim Limited FFBL substantial opportunity of growth for FFC in the years to Fauji Fertilizer Company FFC come. FFC Energy Limited FFCEL Freight on Board FOB FFC’s vision is to play a leading role in the industrial Government of Pakistan GOP and agricultural advancement of the Country pursuing Global Reporting Initiative GRI Goods & Services Tax GST new growth opportunities offering the convenience Institute of Chartered Accountants of Pakistan ICAP of multiple products, brands and channels within and Institute of Cost and Management Accountants of Pakistan ICMAP beyond the territorial limits of Pakistan, to the benefit of Integrated Management System IMS our customers and our shareholders, elevating our image Mountain Institute of Educational Development MIED as a socially responsible and ethical company that is Operators Training Simulator OTS watched and emulated as a model of success. Pakistan Maroc Phosphore S.A. PMP Return on Assets ROA Return on Equity ROE South Asian Federation of Accountants SAFA School Improvement Program SIP Mission State Bank of Pakistan SBP FFC is a market-focused, process-centered organization School Development Program SDP delivering successful performance through a strong focus Total Shareholders Return TSR on quality. United Nations Global Compact UNGC Our mission is to stand above the competition and provide our customers with premium quality fertilizer products in a safe, reliable, efficient and environmentally sound manner, deliver exceptional services and unparalleled customer support, produce predictable earnings for our shareholders, and provide a dynamic and challenging environment for our employees. Annual Report for the year ended December 31, 2011 1 2 Fauji Fertilizer Company Limited Corporate Strategy Our flexible and dynamic corporate strategy strives for enhancing customer satisfaction by adding value over the long run. We aim at creating value for the stakeholders by maintaining and improving our competitive position in the market. This is achieved by focusing on our sustainable competitive advantage that is derived by continuously assembling and exploiting an appropriate combination of resources and capabilities in response to the changing market conditions. Our organisational culture is one of our most fundamental competitive advantages. We have built and preserved an innovation-adept culture, a culture that promotes transparency and accountability through honesty, integrity and diligence in our dealing with employees, customers, financial market, Government, regulatory authorities, and all the other stakeholders. Diversification in business line is also being considered. Our unique corporate strategy gets aligned with the resource allocation system and flows down to the operational levels, thus ensuring its implementation at all levels along with the achievement of the intended results. Annual Report for the year ended December 31, 2011 3 4 Fauji Fertilizer Company Limited Policy Statement Standard of Conduct of Ethics & for Directors & Business Practices Employees • It is the policy of FFC to follow the highest business • We shall conduct our employment activities with the ethics and standards of conduct. It is the obligation highest principles of honesty, integrity, truthfulness of every one of us to act responsibly; that is, to be and honor. To this end, we are to avoid not only honest, trustworthy, conscientious and dedicated to impropriety, but also the appearance of impropriety. the highest standards of ethical business practices. • We shall not make, recommend, or cause to be • The Company’s reputation and its actions as a legal taken any action, contract, agreement, investment, entity depend on the conduct of its directors and expenditure or transaction known or believed to be in employees. Each one of us must endeavour to act violation of any law, regulation or corporate policy. according to the highest ethical standards and to be aware of and abide by applicable laws. • We shall not use our respective positions in employment to force, induce, coerce, harass, • We all must ensure that our personal conduct is intimidate, or in any manner influence any person, above reproach and complies with the highest including subordinates, to provide any favor, gift or standards of conduct and business ethics and benefit, whether financial or otherwise, to ourselves have the obligation to ensure that the conduct of or others. those who work around us complies with these standards. The Company’s Code of Business Ethics • In business dealings with suppliers, contractors, and Standards of Conduct will be enforced at all levels consultants, customers and government entities, fairly and without prejudice. we shall not provide or offer to provide, any gratuity, favor or other benefit and all such activities shall be • This code to which the Company is committed in conducted strictly on an arm’s length business basis. maintaining the highest standards of conduct and ethical behavior is obligatory, both morally as well as • While representing the Company in dealings with legally and is equally applicable to all the directors third parties we shall not allow ourselves to be placed and employees of the Company who all have been in a position in which an actual or apparent conflict of provided with a personal copy. interest exists. All such activities shall be conducted strictly on an arm’s length business basis. • All of us shall exercise great care in situations in which a preexisting personal relationship exists between an individual and any third party or Government employee or official of an agency with whom the Company has an existing or potential business relationship. Where there is any doubt as to the propriety of the relationship, the individual shall report the relationship to Management so as to avoid even the appearance of impropriety. • We shall not engage in outside business activities, either directly or indirectly, with a customer, vendor, supplier or agent of the Company, or engage in business activities which are inconsistent with, or contrary to, the business activities of the Company. • We shall not use or disclose the Company’s trade secret, proprietary or confidential information, or any other confidential information gained in the performance of Company duties as a means of making private profit, gain or benefit.