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BSC II Accounting & Finance

Intermediate Accounting Project

Submitted to:
Maam Nadia Ibn E Hassan


Company Profile:

We chose FAUJI FERTILIZER COMPANY Limited as it is the Pakistans largest urea

manufacturing Company, catering the agricultural requirements of the country. The company is a
well reputed firm with strong financial background established over the years. The FFC has
consistently been placed in the Karachi Stock Exchange top 25 companies for over 20 years.

The company was incorporated in 1978 having an annual capacity of 570 thousand
tonnes of Urea production at the time of incorporation which today has increased up to 2 million
tonnes per anum.

The Companys vision is To become a leading national enterprise with global

aspirations, effectively pursuing multiple growth opportunities, maximizing returns to the
stakeholders, remaining socially and ethically responsible.

The Companys mission is To provide our customers with premium quality products in
a safe, reliable, efficient and environmentally sound manner, deliver exceptional services and
customer support, maximizing returns to the shareholders through core business and
diversification, providing a dynamic and challenging environment for our employees.

Companys Share Capital:

Share capital is an integral part of a companys funds raised by issuing shares of a
company in the open market if the company is a public limited company. The Fauji Fertilizer
Companys share capital as of 2015 is reported to be Rs.12, 722 million which is consistent in
line to 2014.

Companys Reserves:
This is a resource created by the accumulated capital surplus (not revenue surplus) of an
organization, such as by an upward revaluation of its assets to reflect their current market value
after appreciation. Allocating such sums to capital reserve means they are permanently invested
and will not be paid as dividends.

The company possesses Rs.14, 589 million of reserves for its use which is more than that of
(Rs.12, 948:FY14).

Shareholders Equity:
Shareholders' equity is listed on a company's balance sheet and measures its net worth. A
company's shareholders' equity is calculated by subtracting a company's total liabilities from its
total assets, which are also listed on a company's balance sheet.
The total amount of investment made in the company by shareholders is RS. 27,311 million in
the year 2015

The Shareholders equity that comprises of share capital and reserves witnessed an increase of
77% over the past 5 years. Share capital was increased in 2011 and 2012 through bonus issues of
25% and 50%. Reserves of the Company were registered at Rs. 14.20 billion in 2011, witnessing
a substantial increase of 64% over the previous year, but thereafter, despite the profitability,
reserves declined to Rs. 12.95 billion owing to bonus shares issue in 2011 and 2012. The
reserves however, increased by 13% in 2015 to Rs. 14.59 billion due to relatively low dividend
distribution during the year.

Pattern of Shareholding.

Share Price:
Market price of the share underwent significant fluctuations between the highest of Rs. 158.87
per share to the lowest of Rs. 109.40 per share, with an average trading price of Rs. 134.46 per
FFCs market capitalization improved by 1% to Rs. 150 billion at year end whereas trading in
the Companys equity increased by 50% to 429 million shares evidencing the blue chip standing
of our scrip.

Earnings per Share

Earnings per share (EPS) is the portion of a company's profit that is allocated to each
outstanding share of common stock, serving as an indicator of the company's profitability

Dividends Paid:
The company is reported to have paid 15,443 million rupees in lieu of
dividend payments in the year 2015 allocating RS 11.86 per share
which is slightly lower to that of 2014 which was 13.65. This decrease
was witnessed due to the fall in the sales of urea keeping in mind the
deteriorating agricultural sector.