Engro Foods Report (FSA)

FFiinnaanncciiaall SSttaatt

Muhammad Waseem (1204136)

RReeppoorrtt OOnn::

tteemmeenntt AAnnaallyyssiiss ((FFrroomm FFYY22001100--2200

Engro Foods Limited

AA nnaa ll yyss ii ss FFOO RR::

SSiirr SShhaaffii AAzzaadd

Federal Urdu University,

Department of Commerce

AAnnaa ll yyss tt ss ::

Abdul Latif (1204101)

Muhammad Waseem (1204136)

Syed Tufail Haider (1204177)

Yusra Ali (1204216)

DD aa ttee dd ::

October 27, 2015

Page | 0

001144))

Submitted By

Abdul Latif

Muhammad Waseem

Syed Tufail Haider

Yusra Ali

((AABBDDUULL HHAAQQ CCAAMMPPUUSS))

Submitted To: Sir Shafi Azad

Class: BS (Commerce) 8

Page | 1

Roll No

1204101

1204136

1204177

1204216

Submitted To: Sir Shafi Azad

Class: BS (Commerce) 8th Semester

Page | 2

ACKNOWLEDGEMENT

“Countless Thanks to He Who Is Lord of Lords”

At first instant, humbly we bow our head with all the feeling of our heart

Almighty Allah, the beneficent, the omniscient who bestowed us with all the mental abilities to

work out this project.

The report being submitted today is a resu

hands behind who have guided us on our way. Writing this report appeared to be a great

experience to us. It added a lot to our knowledge. This report is one of our memorable

experiences in student life. Though words are inadequate in offering thanks to our teacher but

we owe our profound gratitude to

assigning this project to us and for his

completing the project in time. Whatever we have learnt from h

indelible impression on our minds and it is our conviction that this learning experience will

always be a source of help in our practical life and professional career

Finally, yet importantly, we would like to express our heartfelt thanks to our beloved parents,

for cooperation, help, kindness and blessings, our family and friends for their help and wishes

for the successful completion of the work.

CKNOWLEDGEMENT


At first instant, humbly we bow our head with all the feeling of our heart and soul before the


The report being submitted today is a result of collective effort. There are innumerous helping



Though words are inadequate in offering thanks to our teacher but

we owe our profound gratitude to “Sir Shafi Azad” for stimulating our creative abilities by

g this project to us and for his able guidance and useful suggestions, which helped us in

completing the project in time. Whatever we have learnt from him and this


always be a source of help in our practical life and professional career.



for the successful completion of the work.

Page | 3


and soul before the


lt of collective effort. There are innumerous helping



Though words are inadequate in offering thanks to our teacher but

for stimulating our creative abilities by

able guidance and useful suggestions, which helped us in

im and this report has put




TTAABBLL

S.NO

1

2 Introduction & History

3 Vision Mission & Core Value

4 Facts And Figure, Strategic Objective and

5 Income Statement And Balance Sheet

6

7

8

9

10

11

LLEE OOFF CCOONNTTEENNTTSS

Topics

An overview

Introduction & History

Vision Mission & Core Value

Facts And Figure, Strategic Objective and

Brands

Income Statement And Balance Sheet

Ratio Analysis

Industry Average

Trend Analysis

Vertical Analysis

Horizontal Analysis

Overall Analysis

Page | 4

Page No

5

6

7

Facts And Figure, Strategic Objective and 8-9

10-12

13-25

26

27-31

32-33

34-36

37-39

AA

This is the project about financial statement

company which we chosen to be analyzed

in food business for many years. The compan

range of healthy food products.

cream, ice cream, juices, flavored milk and many others.

strategies to come up with in a competitive market. It has targeted all of its customers no

matter they are of what age. How it standing in the market with such price? How it satisfies its

shareholder’s? Why don’t investor’s invest in other companies? The answer to all above

question is clear after going through its financial reports. The profit that the company earns

and the balance it has kept between its assets and liabilities is also easil

going through its financial statements. The company is running its business so

FOODS is the 1st company which is using Bactofuge technology. The company has not been

in this business for as long as NESTLÉ is, but the way

come up with innovative features in its products

liabilities on time and to keep its assets managed. ENGRO FOODS not only provide incentives

to its stockholder’s but also to its e

that they can work in a healthy environment and don’t get tired of their hectic routine. That is

why it has many loyal employees to work with.

AANNOOVVEERRVVIIEEWW

This is the project about financial statements analysis of a company. In this regard the

chosen to be analyzed is ENGRO FOODS LIMITED.The company is

in food business for many years. The companyis well reputed in the market and deal in a wide

food products.Its product line contains products such as milk, tea whitener,

flavored milk and many others. The company has strong marketing



areholder’s? Why don’t investor’s invest in other companies? The answer to all above


and the balance it has kept between its assets and liabilities is also easily understandable after

going through its financial statements. The company is running its business so


in this business for as long as NESTLÉ is, but the way it has grown up is appreciable. It has

come up with innovative features in its products. The company has capability to pay it


to its stockholder’s but also to its employees. It offers its employees much outdoor training so


why it has many loyal employees to work with.

Page | 5

s analysis of a company. In this regard the

The company is dealing

well reputed in the market and deal in a wide

s product line contains products such as milk, tea whitener,

The company has strong marketing



areholder’s? Why don’t investor’s invest in other companies? The answer to all above


y understandable after

going through its financial statements. The company is running its business so well. ENGRO


it has grown up is appreciable. It has

The company has capability to pay it


mployees. It offers its employees much outdoor training so


eenngg

IInnttrroodduucctt iioonn::

Engro Foods Limited was officially launched as a fully owned subsidiary of Engro

2004.Using dairy as a stepping stone to enter into the food business, the Company has

establishedstate-of-the-art processing units in Sukkur and Sahiwal, along with an ice cream

productionfacility in Sahiwal. Top quality brands like

Olpers Cream have beensuccessfully launched under the helm of Company’s dairy products. To

support these brandsand their highest standards of quality, Engro Foods has inv

in milk processing andmilk collection infrastructure. Engro Foods

dairy sector. In thispursuit, grain and fruit markets have been analyzed in great detail.

Engrohas launched its newbrand in fruit juices called as

“EElleevvaattee CCoonnssuummeerrss’’ DDeelliigghhtt WW

portion of its revenuefrom foreign operations.

HHiissttoorryy::

Engro Foods Pvt. Limited (EFL) has beenestablished in

attheEngro Group. The plant located at Sukkur on

capability of more than 300,000

200,000liters perday. The plant has been establi

direct employment to 750people.Engro Foods has entered the Food businessthrough milk

processing and sale with the company’s vision

country fundamentals and own strength. I

itscorporatesocial responsibility initiatives and work closely with rural communities to

promoteintegrated farming and livestock development. This effort is expected to play

role inpoverty alleviation and impr

Engro Foods will work with the Pakistan Poverty Alleviation Fund and its three

partnerorganizations to help implement sustainable business models that increase

profitability and develop a positive social and business climate for growth and expansion

oflivestock and other forms of value added agriculture.

ggrroofoods

officially launched as a fully owned subsidiary of Engro

.Using dairy as a stepping stone to enter into the food business, the Company has

art processing units in Sukkur and Sahiwal, along with an ice cream

onfacility in Sahiwal. Top quality brands like Olpers, Olpers Lite, Tarang

have beensuccessfully launched under the helm of Company’s dairy products. To

support these brandsand their highest standards of quality, Engro Foods has inv

in milk processing andmilk collection infrastructure. Engro Foods has also venture beyond the


Engrohas launched its newbrand in fruit juices called as Y-frooter. EngroFoods’ purpose

WWoorrllddwwiiddee” and the Company aims to generate a significant

portion of its revenuefrom foreign operations.

Limited (EFL) has beenestablished in 2005 as part of a diversification process

attheEngro Group. The plant located at Sukkur on 23acre land, has the raw milk reception

300,000liters per day and UHT milk capacity of

liters perday. The plant has been established at a cost of Rs. 1billion which provides

people.Engro Foods has entered the Food businessthrough milk

sale with the company’s vision to pursue growth opportunitiesbased on

country fundamentals and own strength. It also positions the company to leverage


promoteintegrated farming and livestock development. This effort is expected to play

role inpoverty alleviation and improving livelihoods of the poor in the milk collection areas.


partnerorganizations to help implement sustainable business models that increase

and develop a positive social and business climate for growth and expansion

oflivestock and other forms of value added agriculture.

Page | 6

officially launched as a fully owned subsidiary of EngroCorporationin

.Using dairy as a stepping stone to enter into the food business, the Company has

art processing units in Sukkur and Sahiwal, along with an ice cream

Tarang, Omore and

have beensuccessfully launched under the helm of Company’s dairy products. To

support these brandsand their highest standards of quality, Engro Foods has invested heavily

venture beyond the


Foods’ purposeis to

” and the Company aims to generate a significant

as part of a diversification process

, has the raw milk reception

liters per day and UHT milk capacity of more than

billion which provides

people.Engro Foods has entered the Food businessthrough milk

to pursue growth opportunitiesbased on

t also positions the company to leverage


promoteintegrated farming and livestock development. This effort is expected to play vital

oving livelihoods of the poor in the milk collection areas.


partnerorganizations to help implement sustainable business models that increase farmer’s

and develop a positive social and business climate for growth and expansion

VViiss iioonn::

Engro Foods will continue to make investments aimed at impacting lives and delighting

consumers each

MMiissssiioonn::

To create wealth by building new businesses

Petrochemicals, InformationTechnology, Infrastructure and other Agricultural sectors.

CCoorree VVaalluueess::

Ethics and integrity

Safety, Health and Environment

Innovation& Risk Taking

Our People

Community & Society


consumers each day, every day, in a multitude ways.

To create wealth by building new businesses based on company and country strengths in


Safety, Health and Environment

Page | 7


based on company and country strengths in


FFaaccttss &&FFiigguurreess::

12 Million Consumers nationwide use Engro’s products each day.

More than 1600 milk collection points spread throughout the country.

Ranked2nd in ice-cream business.

Holds more than 50% market share in UHT milk business.

Providing livelihood to 350,000

2 state of the art processing plant and a production farm.

Growing Market Share covers

FT/IFC Transformational Business Award

The first Pakistani company to produce 1 billion te

Engro Foods 2012 Annual Report secured

Award in its category.

SSttrraatteeggiicc OObbjjeecctt iivv

DIVERSIFY: Moving beyond the traditional dairy portfolio and explore new categories to

delight consumers.

DECIPHER : bringing clarity in approach within our dairy portfolio to encompass a

wider consumer segment.

DISTANCE: The brand portfolio to allow further expansion

DEVELOP: Extending physical reach to other geographies for exploring the untapped

possibilities

nationwide use Engro’s products each day.

milk collection points spread throughout the country.

cream business.

market share in UHT milk business.

350,000 farmers across Pakistan.

state of the art processing plant and a production farm.

Growing Market Share covers more than 310 cities in Pakistan.

FT/IFC Transformational Business Award 2014 for achievement in inclusive Business.

he first Pakistani company to produce 1 billion tetra packs in a single year.

Annual Report secured 2nd position for the Best Corporate Report

vveess ((44DDss)) ::

oving beyond the traditional dairy portfolio and explore new categories to

: bringing clarity in approach within our dairy portfolio to encompass a

he brand portfolio to allow further expansion.

xtending physical reach to other geographies for exploring the untapped

Page | 8

in inclusive Business.

tra packs in a single year.

d position for the Best Corporate Report

oving beyond the traditional dairy portfolio and explore new categories to

: bringing clarity in approach within our dairy portfolio to encompass a

xtending physical reach to other geographies for exploring the untapped

BBrraanndd PPoorrtt ffooll iioo::

Enhance the culinary experience

with Olper’s Cream- A rich

celebration of life at its creamy

best.

Get nutrition and the best value for money

with omungdobala

Sheer indulgence in every sip comes

only with the rich creamy thickness of

Olper’s. Give your day

with Olper’s!

Get nutrition and the best value for money

with omungdobala.

Page | 9

Sheer indulgence in every sip comes

only with the rich creamy thickness of

Olper’s. Give your day a fresh start

IINNCCOO

(Rs. In Thousands) 2014

Sales 43,027,377

Cost of sales (34,926,132)

Gross profit 8,101,245

Distribution and marketing expenses (4,692,502)

Administrative expenses (1,282,240)

Other operating expenses (103,770)

Other operating income 304,854

Operating profit 2,327,587

Other expenses (596,328)

Finance costs (1,236,904)

Profit before taxation 494,355

Taxation 394,476

Profit for the year 888,831

OOMMEE SSTTAATTEEMMEENNTT

2014 2013 2012 2011

43,027,377

37,890,688

40,168,919

29,859,226

(34,926,132)

(29,747,587)

(29,848,301)

(23,230,445)

8,101,245

8,143,101

10,320,618

6,628,781

(4,692,502)

(5,063,279)

(4,654,275)

(3,716,489)

(1,282,240)

(1,041,254)

(795,690)

(504,722)

(103,770)

(188,729)

(429,763)

(208,902)

304,854

324,301

382,402

213,133

2,327,587

2,174,140

4,823,292

2,411,801

(596,328)

(881,456)

- -

(1,236,904)

(784,904)

(902,503)

1,049,141

494,355

507,780

3,920,789

1,362,660

394,476

(296,820)

(1,325,616)

(471,687)

888,831

210,960

2,595,173

890,973

Page | 10

2011 2010

29,859,226

20,944,943

(23,230,445)

(16,552,117)

6,628,781

4,392,826

(3,716,489)

(2,913,448)

(504,722)

(473,198)

(208,902)

(131,460)

213,133

54,942

2,411,801

929,662

-

1,049,141

(659,562)

1,362,660

270,100

(471,687)

(94,478)

890,973

175,622

BBAA

Assets

Property, plant and equipment

Long term Investment

Biological assets

Intangible assets

Long term advances and deposits

Compensation expense

Investment in subsidiary

Non Current Assets

Stores, spares and loose tools

Stock-in-trade

Trade debts

Advances, deposits and prepayments

Other receivables

Deferred employee share option compensation expense

Taxes recoverable

Short term investments

AALLAANNCCEE SSHHEEEETT

2014 2013 2012

15,021,519 14,504,771 11,023,246 9,615,426

- - -

858,680 716,465 668,455

112,208 122,838 104,569

Long term advances and deposits 109,174 93,132 81,862

112,581 168,865 -

427,288 -

16,214,162 16,033,359 12,741,150 10,270,045

788,141 739,671 610,640

3,697,787 3,083,583 3,494,605 2,637,816

95,962 153,573 149,074

Advances, deposits and prepayments 113,501 181,080 261,790

2,865,607 2,354,280 1,440,167 1,160,126

Deferred employee share option 90,430 136,153 -

1,637,018 636,588 347,075

- 170,000 2,708,750 1,294,000

Page | 11

2011 2010

9,615,426 7,148,219

- 960,000

496,809 428,293

133,598 142,433

24,212 23,126

- -

-

10,270,045 8,722,071

571,812 441,841

2,637,816 2,089,221

87,121 51,879

266,093 244,209

1,160,126 720,736

-

10,990 9,417

1,294,000 -

Cash and bank balances

Current Assets

Total Assets

Equity & Liabilities

Equity

Share capital

Advance against issue of share capital

Share premium

Employee share option compensation reserve

Hedging reserve

Re-measurement of post employment benefits - Actuarial loss

Inappropriate profit

Non-Current Liabilities

Long term finances

Obligations under finance lease

Deferred taxation

Deferred liabilities- pension scheme

Deferred Income

Current Liabilities

Current portion of long term finances

Trade and other payables

Derivative financial instruments

Accrued interest / mark-up on

* long term finances

*short term finances

Short term finances

Contingencies and Commitments

Total Equity & Liabilities

196,900 557,266 422,008

9,485,346 8,012,194 9,459,896 6,378,686

25,699,508 24,045,553 22,201,046 16,648,731

2014 2013 2012

7,665,961 7,665,961 7,615,776 7,517,889

issue of share capital - - 1,234

865,354 865,354 810,280

Employee share option compensation 399,740 407,133 -

(27,736) (9,581) 16,761 (18,178)

measurement of post employment (35,715)

(34,839)

(22,954) (17,730)

2,710,013

1,821,182

1,610,222 (984,951)

11,577,617 10,715,210 10,031,319 7,219,212

5,476,993 7,126,994 6,023,070 5,610,000

- - -

1,185,717 1,538,583 1,652,520

pension scheme - - -

2,516 9,410 17,390

6,665,226 8,674,987 7,692,980 5,922,549

Current portion of long term finances 1,605,597 1,032,008 1,685,823

3,222,661 3,369,182 2,394,108 2,370,783

41,397 14,517 -

194,025 229,312 302,273

61,092 10,337 6,566

2,331,893 - 85,389

7,456,665 4,655,356 4,476,747 3,506,970


25,699,508 24,045,553 22,201,046 16,648,731

Page | 12

350,728 180,181

6,378,686 3,737,993

16,648,731 12,460,064

2011 2010

7,517,889 7,000,000

- -

722,182 -

- -

(18,178) 331

(17,730)

-

(984,951)

(1,875,924

)

7,219,212 5,124,407

5,610,000 4,625,000

2,589 4,714

308,090 180,964

1,870 3,462

- -

5,922,549 4,814,140

465,000 200,000

2,370,783 2,040,575

27,966 -

368,152 275,077

20,229 2,190

252,250 -

3,506,970 2,521,517

16,648,731 12,460,064

RRAA

PPrrooff iittaabbii ll ii ttyyRRaattiiooss

GGrroossssPPrrooff ii ttRRaatt iioo ::

CCoommmmeenntt ::

A company's cost of salesrepresents the expense related to labor,

manufacturing overhead involved in its production process. This expense is deducted from the

company's net sales/revenue, which results in a company'

is used to analyze how efficiently a company is using its raw m

manufacturing-related fixed assets to generate profits. A higher margin percentage is a

favorable profit indicator.Engro Food’s average gross profit

profit ratio in 2014 is caused by higher distributio

higher

milk

internationally.

YYeeaarr GrossGross

2014

2013

2012

2011

2010

18.83%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2014

AATTIIOOAANNAALLYYSSIISS

ss::

A company's cost of salesrepresents the expense related to labor, raw materials


company's net sales/revenue, which results in a company' gross profit. The gross profit margin

is used to analyze how efficiently a company is using its raw materials, labor and

related fixed assets to generate profits. A higher margin percentage is a

.Engro Food’s average gross profit %age is 21.8%.the decline of gross

is caused by higher distribution cost and administration cost as well as

GrossGrossPro�itPro�itRatioRatio ==GrossGrossPro�itPro�it

NetNetSalesSales∗∗ 100100

18.83%

21.49%

25.69%

22.20%

20.97%

21.49%

25.69%

22.20%20.97%

2013 2012 2011 2010

Gross Profit Ratio

Page | 13

raw materials and


The gross profit margin

aterials, labor and

related fixed assets to generate profits. A higher margin percentage is a

the decline of gross

n cost and administration cost as well as

prices of

100100

Gross Profit Ratio

http://www.investopedia.com/terms/r/rawmaterials.asp

NNeettPPrrooff ii ttRRaatt iioo ::

CCoommmmeenntt ::

A key financial indicator used to

measures how much of each Rupee earned by the company is translated into profits. A low

profit margin indicates a low margin of safety: higher risk that a decline in sales will erase

profits and result in a net loss. It indicates

its costs. The higher the margin is, the more effective the company is in converting revenue

into actual profit. Company’s best year regarding net profit ratio was

to 2.07% the reason is that company is currently investing in lot of new projects which will

yield profits in future

.

YYeeaarr

2014

2013

2012

2011

2010

2.07%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2014

A key financial indicator used to assess the profitability of a company. Net profit margin



It indicates how efficient a company is and how well it controls


Company’s best year regarding net profit ratio was 2012 but

the reason is that company is currently investing in lot of new projects which will

NetNetPro�itPro�itRatioRatio ==NetNetPro�itPro�it

NetNetSalesSales∗∗ 100100

2.07%

0.56%

6.46%

2.98%

0.84%

0.56%

6.46%

2.98%

2013 2012 2011

Net Profit Ratio

Net Profit Ratio

Page | 14

assess the profitability of a company. Net profit margin



how efficient a company is and how well it controls


but it is now decline

the reason is that company is currently investing in lot of new projects which will

0.84%

2010

Net Profit Ratio

RReettuurrnnOOnnAAsssseettss ::

CCoommmmeenntt ::

An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to

how efficient management is at using its

company are comprised of both debt and equity. Both of these types of financing are used to

fund the operations of the company. The ROA figure gives investors an idea of how effectively

the company is converting the money it has to invest int

number, the better, because the company is earning more money on less investment.

ROA is quite low company should work in this field.

RReettuurrnnOOnnEEqquuii ttyy ::

CCoommmmeenntt ::

The (ROE) measures how much the shareholders earned for their investment in the co. The

higher the ratio percentage, the more efficient management is in utilizing its equity base and

the better return is to investors.

stockholders.

YYeeaarr

2014

2013

2012

2011

2010

YYeeaarr ROEROE

2014

2013

2012

2011

2010


how efficient management is at using its assets to generate earnings.



the company is converting the money it has to invest into net income. The higher the ROA

number, the better, because the company is earning more money on less investment.

ROA is quite low company should work in this field.



return is to investors.Currentlycompany has not maintained a good return for the

ROAROA ==Pro�itPro�itAfterAfterTaxTax

AvgAvg.. TotalTotalAssetsAssets∗∗ 100100

3.57%

0.91%

13.37%

6.12%

1.41%

ROEROE ==NetNetPro�itPro�it

AvgAvg.. ShareholdersShareholders�� EquityEquity∗∗ 100100

7.68%

1.97%

25.81%

12.31%

3.43%

Page | 15


to generate earnings.The assets of the



o net income. The higher the ROA

number, the better, because the company is earning more money on less investment. The



good return for the

100100

http://www.investopedia.com/terms/a/asset.asp

LLiiqquuiiddiittyyRRaatt iiooss::

CCuurr rreennttRRaatt iioo::

CCoommmmeenntt ::

According to IAS current ratio 2 is best. The current ratio tells us the short term solvency of

the firm and tells the ability of the firm to repay its short term obligations. As per analysis we

can see that firm is in efficient position to repay its short

ratio is more than 1.

QQuuiicckkRRaatt iioo::

CCoommmmeenntt ::

Quick ratio measures the firm’s ability to pay off

the sale of inventory. The higher the quick ratio, the better the company's liquidity

position.Co.is doing average in this area. We can see that in

YYeeaarr

2014

2013

2012

2011

2010

YYeeaarr

2014

2013

2012

2011

2010



can see that firm is in efficient position to repay its short term obligations because its currents

Quick ratio measures the firm’s ability to pay off its short term obligations without relying on

The higher the quick ratio, the better the company's liquidity

Co.is doing average in this area. We can see that in2012the quick ratio is

CurrentCurrentRatioRatio ==CurrentCurrentAssetsAssets

CurrentCurrentLiabilitiesLiabilities

1.27

1.72

2.14

1.83

1.48

QuickQuickRatioRatio ==QuickQuickAssetsAssets

CurrentCurrentLiabilitiesLiabilities

0.67

0.90

1.25

0.91

0.49

Page | 16



because its currents

term obligations without relying on

The higher the quick ratio, the better the company's liquidity

the quick ratio is 1.25which

means that a company has more liquid assets than its currents liabilities so it can easily pay off

its short term obligations.

GGrraapp

0

0.5

1

1.5

2

2.5

2014 2013

1.27

1.72

0.67

more liquid assets than its currents liabilities so it can easily pay off

pphhiiccaallRReepprreesseennttaatt iioonn

2013 2012 2011 2010

1.72

2.14

1.83

1.48

0.9

1.25

0.91

Liquidity Ratios

Current Ratio Quick Ratio

Page | 17

more liquid assets than its currents liabilities so it can easily pay off

2010

0.49

FFiinnaanncciiaall LLeevveerraagge

DDeebbtt TTooEEqquuii ttyyRRaatt ii

CCoommmmeenntt ::

The debt to equity ratio shows the percentage of company financing that comes from

creditors and investors. A lower debt to equity ratio usually implies a more financially stable

business. Companies with a higher debt to equity ratio are considered more risky to creditors

and investors than companies with a lower ratio

equity but the ratio is not too much high so the co. is also not too much riskier.

DDeebbtt RRaatt iioo::

YYeeaarr

2014

2013

2012

2011

2010

YYeeaarr

2014

2013

2012

2011

2010

eeRRaattiiooss::

oo::


A lower debt to equity ratio usually implies a more financially stable

Companies with a higher debt to equity ratio are considered more risky to creditors

and investors than companies with a lower ratio. The company relies more on debt than


DebtDebtToToEquityEquity ==TotalTotalLiabilitiesLiabilities

TotalTotalEquityEquity

1.22

1.24

1.21

1.30

1.43

DebtDebtRatioRatio ==TotalTotalLiabilitiesLiabilities

TotalTotalAssetsAssets

0.55

0.55

0.55

0.57

0.59

Page | 18


A lower debt to equity ratio usually implies a more financially stable

Companies with a higher debt to equity ratio are considered more risky to creditors

. The company relies more on debt than


CCoommmmeenntt ::

A financial ratio that measures the extent of a company’s or consumer’s

is half as much as the assets of the company, it is a good sign for banks and other financial

institutions as they can have a guarantee that the company will easily payback

EEqquuii ttyy RRaatt iioo::

CCoommmmeenntt ::

Measures the amount of assets that are financed by owners' investments by comparing the

total equity in the company to the total assets. Companies with higher equity ratios show new

investors and creditors that investors believe in the company and are willing to finance it with

their investments.Engro foods is also not too much risky as it relies

its assets.

YYeeaarr

2014

2013

2012

2011

2010

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2014 2013

1.22 1.24

0.550.45

D/E Ratio

A financial ratio that measures the extent of a company’s or consumer’s leverage


institutions as they can have a guarantee that the company will easily payback


to the total assets. Companies with higher equity ratios show new


Engro foods is also not too much risky as it relies 45% on equity to finance

EquityEquityRatioRatio ==TotalTotalEquityEquity


0.45

0.45

0.45

0.43

0.41

2013 2012 2011 2010

1.24 1.211.3

1.43

0.55 0.55 0.570.45 0.45 0.43

Financial Leverage Ratio

D/E Ratio Debt Ratio Equity ratio

Page | 19

leverage. As the debt


institutions as they can have a guarantee that the company will easily payback the debt.


to the total assets. Companies with higher equity ratios show new


on equity to finance

2010

1.43

0.59

0.41

http://www.investopedia.com/terms/l/leverage.asp

EEffff iicciieennccyy RRaattiiooss ::

IInnvveennttoorryy TTuurrnnoovveerr

IInnvveennttoorryy TTuurrnnoovveerr

CCoommmmeenntt ::

Inventory turnover is a ratio showing how many times a company's inventory is sold and

replaced over a period. A low turnover implies poor sales and,

high ratio implies either strong sales or ineffective buying.Engro Foods is doing well in this

area as its inventory sold in approx

YYeeaarr InventoryInventory

2014

2013

2012

2011

2010

YYeeaarr

2014

2013

2012

2011

2010

RRaatt iioo::

IInn DDaayyss ::


replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A


area as its inventory sold in approx38 days.

InventoryInventoryTurnoverTurnover ==CostCostofofsalessales

AvgAvg..InventoryInventory

10.30

9.00

9.70

9.80

10.20

InvInv.. TurnoverTurnoverDaysDays ==NoNo.. ofofdaysdays

InvInv.. TurnoverTurnover

35.44

40.56

37.63

37.24

35.78

Page | 20


therefore, excess inventory. A


sales

InventoryInventory

TurnoverTurnover

RReecceeii vvaabblleeTTuurrnnoovveerr

AAvveerraaggee CCooll ll eecctt iioonn

CCoommmmeenntt ::

It measures how many times a

period. The overall trend suggests that the company is currently controlling its accounts

receivable and transacting mostly on cash which is a good sign of liquidity.

YYeeaarr

2014

2013

2012

2011

2010

YYeeaarr AvgAvg

2014

2013

2012

2011

2010

rr RRaatt ii oo::

n PPeerr iioodd::

It measures how many times a business can turn its accounts receivable into cash during a


receivable and transacting mostly on cash which is a good sign of liquidity.

ReceivReceiv.. TurnoverTurnover ==NetNetCreditCreditSalesSales

AccountsAccountsReceivReceiv

344.90

250.40

340.10

429.60

547.10

AvgAvg.. CollectionCollectionPeriodPeriod ==NoNo.. ofofdaysdays

RevRev.. TurnoverTurnover

1.06

1.46

1.07

0.85

0.67

Page | 21

business can turn its accounts receivable into cash during a


SalesSales

ReceivReceiv..

daysdays

TurnoverTurnover

OOppeerraatt iinngg CCyycc llee ::

CCoommmmeenntt ::

Engro foods’ operating cycle is quite good As the cycle has shortened from last year it shows

the ability of the company to liquefy its current assets in a shorter period of time at times of

cash deficiency.

TToottaa ll AAsssseettss TTuurrnnoov

CCoommmmeenntt ::

It measures a company's ability to generate sales from its

average total assets. In other words, this

assets to generate sales. The company has maintained a good turnover

positive sign to the investors.

YYeeaarr

2014

2013

2012

2011

2010

YYeeaarr

2014

2013

2012

2011

2010


liquefy its current assets in a shorter period of time at times of

vvee rr RRaatt iioo::

It measures a company's ability to generate sales from its assets by comparing net sales with

. In other words, this ratio shows how efficiently a company can use its

The company has maintained a good turnover ratio which shows a

OperOperatingatingcyclecycle ==InventoeyInventoeyTurnoverTurnover

AvgAvg.. CollectionCollectionPeriodPeriod

36.50

42.01

38.70

38.09

36.45

TotalTotalAssetsAssetsTurnoverTurnover ==NetNetSalesSales


1.73

1.64

1.81

1.79

1.68

Page | 22


liquefy its current assets in a shorter period of time at times of

by comparing net sales with

shows how efficiently a company can use its

ratio which shows a

AssetsAssets

SShhaarreehhoollddeerr RRaattiioo

EEaarrnn iinnggssPPeerrSShhaarree ::

CCoommmmeenntt ::

Earnings per share serves as an indicator of a company's profitability.

because it earned less profit while the no. of shareholders are higher the best EPS was in 2012

as co. earned the highest net income in 2012.

YYeeaarr

2014

2013

2012

2011

2010

ooss::

per share serves as an indicator of a company's profitability.Engro foods’ EPS is low


o. earned the highest net income in 2012.

EarningEarningPerPerShareShare ==NetNetIncomeIncome

NoNo.. ofofSharesShares

1.16

0.28

3.41

1.19

0.25

Page | 23

Engro foods’ EPS is low


http://www.investopedia.com/terms/e/earnings.asp

BBooookkVVaalluuee PPeerr SShhaa

CCoommmmeenntt ::

Book value per share indicates the

The Book Value of EFL is quite low company should take some majors to elevate Book value

per share so that shareholder can feel save.

YYeeaarr

2014

2013

2012

2011

2010

aarree ::

indicates the book value (or accounting value) of each


per share so that shareholder can feel save.

BookBookValueValuePerPerShareShare ==TotalTotalEquityEquity

NoNo.. ofofSharesShares

15.10

13.98

13.20

9.63

7.32

Page | 24

) of each share of stock.


PPrr iiccee EEaarrnn iinnggssRRaatt iioo

CCoommmmeenntt ::

The price-earnings ratio indicates the

company in order to receive one

company P/E ratio is now decreased compare it to 2013 it means company is doing quite well

in its business operations.

YYeeaarr

2014

2013

2012

2011

2010

oo::

earnings ratio indicates the Rupee amount an investor can expect to invest in a

company in order to receive one Rupee of that company’s earnings. As we can see that


PricePriceEarningEarning ==MarketMarketPerPerShareShare

EPSEPS

93.57

379.37

28.79

19.07

N/A

Page | 25

amount an investor can expect to invest in a

of that company’s earnings. As we can see that


IInndduussttrryyAAvveerraagg

ggee::

Page | 26

TTRR

BBAA

ASEETS


Biological assets

Intangible assets




Non-Current Assets


Stock-in-trade

Trade debts


Other receivables


Taxes recoverable



Current Assets

Total Assets

RREENNDDAANNAALLYYSSIISS


2014 2013

2012

Property, plant and equipment 15021519 14504771 10958079

15.56% 15.03% 11.35%

858680 716465 668455

112208 122838 104589

91.45% 100.11% 85.24%

Long term advances and deposits 109174 93132 81862

33.19% 28.32% 24.89%

Deferred employee share option compensation expense 112581 168865

427288

16214162 16033359 12675983 10270045

19.54% 19.33% 15.28%

Stores, spares and loose tools 788141 739671 675807

82.00% 76.96% 70.31%

3697787 3083583 3494605

874.99% 729.66% 826.92%

95962 153573 149074

3.82% 6.11% 5.93%

Advances, deposits and prepayments 113501 181080 261790

7.73% 12.33% 17.82%

2865607 2354280 1440167

Deferred employee share option compensation expense 90430 136153

103.61% 156.00% 0.00%

1637018 636588 334714

305.32% 118.73% 62.43%

170000 2706750

37.71% 600.36%

196900 557266 422006

4.98% 14.09% 10.67%

9,485,346 8,012,194 9,459,896 6,378,686

88.88% 75.07% 88.64%

25699508 24145553 22188686 16639184

27.42% 25.77% 23.68%

Page | 27

2011 2010 2009

9615426 7148219 96517512

9.96% 7.41%

496809 428293

133598 142433 122704

108.88% 116.08%

24212 23126 328907

7.36% 7.03%

2787

10270045 8722071 82960587

12.38% 10.51% 100%

571812 441841 961117

59.49% 45.97%

2637816 2089221 422607

624.18% 494.36%

87121 51879 2514425

3.46% 2.06%

266093 244209 1469155

18.11% 16.62%

1160126 720736 275714

87278

0.00% 0.00%

1443 9417 536167

0.27% 1.76%

1294000

450857

287.01% 0.00%

350728 180181 3955347

8.87% 4.56%

6,378,686 3,737,993 10672667

59.77% 35.02% 100%

16639184 12460064 93709438

17.76% 13.30% 100%

Equity &Liabilities

EQUITY

Share capital

Share premium


Hedging reserve

Remeasurement of post employment benefits - Actuarial loss

Unappropriated profit / loss

Total Equity


Long term finances

Deferred liabilities


Deferred taxation

Deferred income

Total Non-Current Liabilities

2014 2013 2012 2011

7,665,961 665,961 7,615,776 7,577,18

9

257.30% 22.35% 255.61% 254.32%

865,354 865,354 810,280 722,182

8.20% 8.20% 7.68% 6.85%

399,740 407,133

138.67% 141.24% 0.00% 0.00%

(27,736) (9,581) 16,761 (18,178)

4.55% 1.57% -2.75% 2.98%

Actuarial (35,715) (34,839)

2,710,013 1,821,182 1,610,222 (984,951)

29.29% 19.69% 17.41% -10.65%

11,577,617

10,715,210

10,064,273

7,236,942

40.08% 37.09% 34.84% 25.05%

5,476,993 7,126,994 6,023,070 5,610,00

0

1,870

1,185,717 1,538,583 1,652,520 308,090

2,516 9,410 17,300

6,665,226 8,674,987 7,692,980 5,921,25

5

416.31% 541.84% 480.51% 369.84%

Page | 28

2011 2010 2009

base year

7,577,18 7,000,000 2,979,426

254.32% 234.94% 100.00%

722,182 10,550,08

1

0.00% 100.00%

288,258

0.00% 100.00%

(18,178) 331 (609,719)

-0.05% 100.00%

(984,951) 1,875,92

4 9,250,972

10.65% 20.28% 100.00%

7,236,94 5,124,407

28,888,238

25.05% 17.74% 100.00%

5,610,00 4,625,000

3,462 988,169

612,842

308,090 180,964

5,921,25 4,814,140 1,601,011

369.84% 300.69% 100.00%

Current Liabilities




long term finances

short term finance

Short term finances

Total Current Liabilities



1,605,597 1,032,008 1,685,823 465,000

198.20% 127.39% 208.10% 57.40%

3,222,661 3,369,182 2,358,703 2,343,506

101.96% 106.59% 74.62% 74.14%

41,397 14,517

27,966

194,025 229,312 302,273 368,152

61,092 10,337 6,585 20,229

31.21% 5.28% 3.36% 10.33%

2,331,893

85,389 252,250

7,456,665 4,655,356 4,441,432 3,480,987

116.59% 72.79% 69.45% 54.43%

25,699,508 24,045,553 22,188,685 16,639,184

27.42% 25.66% 23.68% 17.76%

Page | 29

200,000 810,100

24.69% 100.00%

2,040,575 3,160,852

64.56% 100.00%

740,043

275,077

2,190 195,753

1.12% 100.00%

2,521,517 6,395,489

39.43% 100.00%

12,460,064 93,709,438

13.30% 100.00%

TTRRE

IINNCCOO

2014

Net sales

43,027,377

142.61%

Cost of sales

(34,926,132

150.28%

Gross profit

8,101,245

116.88%

Distribution and marketing expenses

(4,692,502)

241.24%

Administrative expenses

(1,282,240)

270.97%

Other operating expenses

(103,770)

24.47%

Other income

304,854

352.57%

Operating profit

2,327,587

250.37%

Other expenses

(596,328)

Finance costs

(1,236,904)

93.66%

Profit before taxation

494,355

9.48%

Taxation

394,476

-31.36%

Profit for the year

888,831

22.46%

REENNDDAANNAALLYYSSIISS OOMMEE SSTTAATTEEMMEENNTT

2014 2013 2012 2011

43,027,377 37,890,688 40,168,919 29,859,226 20,944,943

142.61% 125.58% 133.14% 98.96%

(34,926,132)

(29,747,587)

(29,848,301)

(23,230,445)

(16,552,117

150.28% 128.00% 128.43% 99.96%

8,101,245 8,143,101 10,320,618 6,628,781 4,392,826

116.88% 117.48% 148.90% 95.63%

(4,692,502) (5,063,279) (4,709,275) (3,716,489) (2,913,448)

241.24% 260.30% 242.10% 191.06% 149.78%

(1,282,240) (1,041,254) (740,690) (504,722) (473,198)

270.97% 220.05% 156.53% 106.66% 100.00%

(103,770) (188,729) (492,763) (208,902) (131,460)

24.47% 44.50% 116.19% 49.26%

304,854 324,301 382,402 213,133

352.57% 375.06% 442.25% 246.49%

2,327,587 2,174,140 4,823,292 4,211,801 929,662

250.37% 233.86% 518.82% 453.05% 100.00%

(596,328) (881,456) - -

- -

(1,236,904) (784,904) (902,503) (1,049,141) (659,562)

93.66% 59.44% 68.34% 79.45%

494,355 507,780 3,920,789 1,362,660 270,100

9.48% 9.74% 75.18% 26.13%

394,476 (296,820) (1,325,616) (471,687) (94,478)

31.36% 23.60% 105.40% 37.50%

888,831 210,960 2,595,173 890,973 175,622

22.46% 5.33% 65.58% 22.51%

Page | 30

2010 2009

base year

20,944,943 30,171,520

69.42% 100.00%

(16,552,117)

(23,240,176)

71.22% 100.00%

4,392,826 6,931,344

63.38% 100.00%

(2,913,448) (1,945,176)

149.78% 100.00%

(473,198) -

100.00% -

(131,460) (424,110)

31.00% 100.00%

54,249 86,467

62.74% 100.00%

929,662 -

100.00% -

- -

- -

(659,562) (1,320,579)

49.94% 100.00%

270,100 5,214,956

5.18% 100.00%

(94,478) (1,257,696)

7.51% 100.00%

175,622 3,957,250

4.44% 100.00%

GGrraapp

0.00%

100.00%

200.00%

300.00%

400.00%

500.00%

600.00%

Non-Current Assets

Current Assets

2014

-100.00%

0.00%

100.00%

200.00%

300.00%

400.00%

500.00%

600.00%

2014

pphhiiccaallRReepprreesseennttaatt iioonn

Current TotalAssets Total Equity Total Non-Current

Liabilities

Current Liabilities

Balance Sheet

2014 2013 2012 2011 2010 2009

Income statement

2014 2013 2012 2011 2010 2009

Page | 31

Current Liabilities


Assets


15,021,51

9

Long term Investment -

Biological assets

858,680

Intangible assets

112,208


109,174


112,581


Non Current Assets

16,214,16

2


788,141

Stock-in-trade

3,697,787

Trade debts

95,962


113,501

Other receivables

2,865,607


90,430

Taxes recoverable

1,637,018

Short term investments -


196,900

Current Assets

9,485,346

Total Assets

25,699,

508

VV

2014 2013 2012 2011

15,021,51

9

58.45%

14,504,77

1

60.32%

11,023,246

49.65%

9,615,426

- - - - - -

858,680

3.34%

716,465

2.98%

668,455

3.01%

496,809

12,208

0.44%

122,838

0.51%

104,569

0.47%

133,598

109,174

0.42%

93,132

0.39%

81,862

0.37%

24,212

112,581

0.44%

168,865

0.70%

- - -

427,288 1.78

% - - -

16,214,16

2

63.09%

16,033,35

9

66.68%

12,741,150

57.39%

10,270,04

5

788,141

3.07%

739,671

3.08%

610,640

2.75%

571,812

3,697,787

14.39%

3,083,583

12.82%

3,494,605

15.74%

2,637,816

95,962

0.37%

153,573

0.64%

149,074

0.67%

87,121

113,501

0.44%

181,080

0.75%

261,790

1.18%

266,093

2,865,607

11.15%

2,354,280

9.79%

1,440,167

6.49%

1,160,126

90,430

0.35%

136,153

0.57%

- - -

1,637,018

6.37%

636,588

2.65%

347,075

1.56%

10,990

-

170,000 0.71

%

2,708,750 12.20%

1,294,000

196,900

0.77%

557,266

2.32%

422,008

1.90%

350,728

9,485,346

36.91%

8,012,194

33.32%

9,459,896

42.61%

6,378,686

25,699,

508

100

%

24,045,

553

100

%

22,201,0

46

100

%

16,648,

731

VVEERRTTIICCAALLAANNAALLYYSSIISS

BBAALLAANNCCEE SSHHEEEETT

Page | 32

2011 2010

9,615,426

57.75%

7,148,219

57.37%

-

960,000 7.70

%

2.98%

428,293

3.44%

0.80%

142,433

1.14%

0.15%

23,126

0.19%

- - -

- -

61.69%

8,722,071

70.00%

3.43%

441,841

3.55%

2,637,816

15.84%

2,089,221

16.77%

0.52%

51,879

0.42%

1.60%

244,209

1.96%

1,160,126

6.97%

720,736

5.78%

- -

0.07%

9,417

0.08%

1,294,000

7.77%

- -

2.11%

180,181

1.45%

6,378,686 38.31%

3,737,993

30.00%

100

%

12,460,

064

100

%

SS

Equity &

Liabilities 2014

Equity

Share capital 7,665,9

61

Advance against issue of share capital

-

Share premium 865,35

4


399,740

Hedging reserve

(27,736)


(35,715)

Inappropriate profit

2,710,013

11,577,617


Long term finances 5,476,9

93

Obligations under finance lease -

Deferred taxation 1,185,7

17

Deferred liabilities- pension scheme

-

Deferred Income 2,516

6,665,226

Current Liabilities Current portion of long term finances

1,605,597

Trade and other payables 3,222,6

61

Derivative financial instruments 41,397


* long term finances 194,02

5

*short term finances 61,092

Short term finances 2,331,8

93

7,456,665


Total Equity &

Liabilities

25,69

9,508

2014 2013 2012 2011

29.83%

7,665,961

31.88%

7,615,776

34.30%

7,517,889

- - - 1,234 0.01

% -

3.37%

865,354

3.60%

810,280

3.65%

722,182

1.56%

407,133

1.69%

- - -

-0.11

% (9,581)

-0.04

% 16,761

0.08%

(18,178)

-0.14

%

(34,839)

-0.14

%

(22,954)

-0.10

%

(17,730)

10.54%

1,821,182

7.57%

1,610,222

7.25%

(984,951)

45.05%

10,715,210

44.56%

10,031,319

45.18%

7,219,212

21.31%

7,126,994

29.64%

6,023,070

27.13%

5,610,000

- - - - - 2,589

4.61%

1,538,583

6.40%

1,652,520

7.44%

308,090

- - - - - 1,870

0.01

% 9,410

0.04%

17,390 0.08

% -

25.94%

8,674,987

36.08%

7,692,980

34.65%

5,922,549

6.25%

1,032,008

4.29%

1,685,823

s 465,00

0

12.54%

3,369,182

14.01%

2,394,108

10.78%

2,370,783

0.16

% 14,517

0.06%

- - 27,966

0.00

% 0.00

%

0.75%

229,312

0.95%

302,273

1.36%

368,152

0.24

% 10,337

0.04%

6,566 0.03

% 20,229

9.07%

- - 85,389 0.38

% 252,25

0

29.01%

4,655,356

19.36%

4,476,747

20.16%

3,506,970

100

%

24,04

5,553

100

%

22,20

1,046

100

%

16,64

8,731

Page | 33

2010

45.16%

7,000,000

56.18%

- - -

4.34%

- -

- - -

-0.11

% 331

0.00%

-0.11

% - -

-5.92

%

(1,875,924)

-15.

06%

43.36%

5,124,407

41.13%

33.70%

4,625,000

37.12%

0.02%

4,714 0.04%

1.85%

180,964

1.45%

0.01%

3,462 0.03%

- - -

35.57%

4,814,140

38.64%

2.79%

200,000

1.61%

14.24%

2,040,575

16.38%

0.17%

- -

0.00%

0.00%

2.21%

275,077

2.21%

0.12%

2,190 0.02%

1.52%

- -

21.06%

2,521,517

20.24%

100

%

12,46

0,064

10

0%

`

Equity

Share capital

Share premium


Hedging reserve


Unappropriated profit / loss


Long term finances

Deferred liabilities


Deferred taxation

Deferred income

Current Liabilities





long term finances

short term finance

Short term finances



HHOORRIIZZ

BBAA

2014 Vs 2013

2013 Vs 2012

2012 Vs 2011

1051.11% -91.26% 0.51%

0.00% 6.80% 12.20%

-1.82% 0.00%

189.49% -157.16% -192.20%

2.51% 0.00%

48.81% 13.10% -263.48%

8.05% 6.47% 39.07%

-23.15% 18.33% 7.36%

-100.00%

-22.93% -6.89% 436.38%

-73.26% -45.61%

-23.17% 12.76% 29.92%

55.58% -38.78% 262.54%

-4.35% 42.84% 0.65%

185.16% 0.00% -100.00%

-15.39% -24.14% -17.89%

491.00% 56.98% -67.45%

-100.00% -66.15%

60.17% 4.82% 27.59%

6.88% 8.37% 33.35%

ZZOONNTTAALL AANNAALLYYSSII


Page | 34

2011 Vs 2010

2010 Vs 2009

8.25% 134.94%

-100.00%

-100.00%

-5591.84% -100.05%

-152.50% -79.72%

41.22% -82.26%

21.30%

-45.98% -99.65%

-100.00%

70.25%

23.00%

132.50% -75.31%

14.85% -35.44%

-100.00%

33.84%

823.70% -98.88%

38.05% -60.57%

33.54% -86.70%

IISS

Assets

Non-Current Assets


Biological assets

Intangible assets




Current Assets


Stock-in-trade

Trade debts


Other receivables


Taxes recoverable



HHOORRIIZZ

BBAA

2014 VS 2013

2013 Vs 2012

2012 Vs 2011

3.56% 32.37% 13.96%

19.85% 7.18% 34.55%

-8.65% 17.45% -21.71%

17.23% 13.77% 238.11%

-33.33%

-100.00%

1.13% 26.49% 23.43%

6.55% 9.45% 18.19%

19.92% -11.76% 32.48%

-37.51% 3.02% 71.11%

Advances, deposits and prepayments -37.32% -30.83% -1.62%

21.72% 63.47% 24.14%

-33.58%

157.16% 90.19% 23095.70

%

-100.00% -93.72% 109.18%

-64.67% 32.05% 20.32%

6.44% 8.82% 33.35%

ZZOONNTTAALLAANNAALLYYSS


Page | 35

2011 Vs 2010

2010 Vs 2009

34.51% -92.59%

16.00%

-6.20% 16.08%

4.70% -92.97%

-100.00%

17.75% -89.49%

29.42% -54.03%

26.26% 394.36%

67.93% -97.94%

8.96% -83.38%

60.96% 161.41%

-100.00%

-84.68% -98.24%

-100.00%

94.65% -95.44%

33.54% -86.70%

SSIISS

Net sales

Cost of sales

Gross profit

Distribution and marketing expenses

Administrative expenses

Other operating expenses

Other income

Operating profit

Other expenses

Finance costs

Profit before taxation

Taxation

Profit for the year

HHOORR

IINN

2014 Vs2013

2013 Vs 2012

2012 Vs 2011

13.56% -5.67% 34.53%

17.41% -0.34% 28.49%

-0.51% -21.10% 55.69%

Distribution and marketing expenses -7.32% 7.52% 26.71%

23.14% 40.58% 46.75%

-45.02% -61.70% 135.88%

-6.00% -15.19% 79.42%

7.06% -54.92% 14.52%

-32.35%

57.59% -13.03% -13.98%

-2.64% -87.05% 187.73%

-232.90% -77.61% 181.04%

321.33% -91.87% 191.27%

RRIIZZOONNTTAALLAANNAALL

NNCCOOMMEE SSTTAATTEEMMEENNT

Page | 36

2011 Vs 2010

2010 Vs 2009

42.56% -30.58%

40.35% -28.78%

50.90% -36.62%

27.56% 49.78%

6.66%

58.91% -69.00%

292.88% -37.26%

353.05%

59.07% -50.06%

404.50% -94.82%

399.26% -92.49%

407.32% -95.56%

LYYSSIISS NTT

OOVVEERR--AALLLL AANNAALLYYSSIISS ::

Engro Foods financial analysis reflects that sufficient financial resources to meet its

obligations. The financial managers of the company are doing a prudent and efficient job. The

Asset management activities, investing

managed.

At Engro the driving force behind their growth has their deep commitment to elevating

consumer while making a meaningful contribution to our country’s economy. To live up to this

commitment their business strategy has been geared towards versatility, innovation and

inclusive growth.

Despite a challenging business environment in

strengths and regained a significant competitive advantage in the market. A c

challenge was to develop strategies to overcome and withstand the impact of rising costs

caused by various factors such as; higher energy costs and increase in the international prices

of milk in the first half of the year

implemented to bolster systems and improve margins. The heart of their success is without

doubt the dedication of their employees. By building on their expertise to drive cost efficiency

heighten consumer satisfaction not only

significant contribution to raising food security and prosperity for Pakistan.

Unexpected bottlenecks in their distribution channel last year (

specific issues that caused their

supply chain system by cost optimization and enhancing operational excellence. By

distribution network had undergone a comprehensive overhaul and throughout the year

supply chain services remained critical to their business vision performance. They continued to

regain a dominant position in the market and achieved highest ever UHT market share of

in November 2014alone as compared to

marketing strategies bore fruit in

number of their brands particularly

diversification strategies to enter the market in other dairy segments,

drive sales volumes for the next 10 years or more.

In 2014, the country as well as the local food industry faced numerous challenges. The energy

crises, security and political situation continues to exert significant pressure on the e

and business operations. Despite these challenges company managed double digit revenue

growth with positive long-term outlook and tested opportunities for business expansion

through diversification into new product lines and brand differentiation. T

reported Rs. 43.3 billion in consolidated revenue v/s Rs.

exhibiting a growth of 14%. Effective investment on brands and efficient product mix

management remained key elements in the achievements of growth in top line of

financial analysis reflects that sufficient financial resources to meet its


Asset management activities, investing activities, Financing activities and cash flows are well



their business strategy has been geared towards versatility, innovation and

Despite a challenging business environment in 2014, they continued to build on their

strengths and regained a significant competitive advantage in the market. A c



of milk in the first half of the year 2014. Layer by layer, a number of initiatives were



heighten consumer satisfaction not only did their business succeed but they also made

significant contribution to raising food security and prosperity for Pakistan.

Unexpected bottlenecks in their distribution channel last year (2013), they focused on tackling

specific issues that caused their slowdown and also strove to bring back efficiency to their

supply chain system by cost optimization and enhancing operational excellence. By


s remained critical to their business vision performance. They continued to

regain a dominant position in the market and achieved highest ever UHT market share of

alone as compared to 48% in December 2013. In addition, their cutting edg

marketing strategies bore fruit in 2014and we saw significant gains in sales volumes for a

number of their brands particularly Tarang and Olper’s. At present they are also developing

diversification strategies to enter the market in other dairy segments, which they expect to

drive sales volumes for the next 10 years or more.

, the country as well as the local food industry faced numerous challenges. The energy

crises, security and political situation continues to exert significant pressure on the e


term outlook and tested opportunities for business expansion

through diversification into new product lines and brand differentiation. T

billion in consolidated revenue v/s Rs. 37.9 billion reported last year (

. Effective investment on brands and efficient product mix

management remained key elements in the achievements of growth in top line of

Page | 37

financial analysis reflects that sufficient financial resources to meet its


activities, Financing activities and cash flows are well



their business strategy has been geared towards versatility, innovation and

, they continued to build on their

strengths and regained a significant competitive advantage in the market. A considerable



a number of initiatives were



did their business succeed but they also made

), they focused on tackling

slowdown and also strove to bring back efficiency to their

supply chain system by cost optimization and enhancing operational excellence. By 2014 their


s remained critical to their business vision performance. They continued to

regain a dominant position in the market and achieved highest ever UHT market share of 56%

. In addition, their cutting edge

and we saw significant gains in sales volumes for a

. At present they are also developing

which they expect to

, the country as well as the local food industry faced numerous challenges. The energy

crises, security and political situation continues to exert significant pressure on the economy


term outlook and tested opportunities for business expansion

through diversification into new product lines and brand differentiation. The company

billion reported last year (2013)

. Effective investment on brands and efficient product mix

management remained key elements in the achievements of growth in top line of 2014.

Gross margin declined from 22%

passed on to the consumers in the competitive market environment. On an overall basis,

company’s profit increased from Rs.

2014 also witnessed revitalization of distribution network of the company and significant

growth in milk collection. Moreover, the successful commissioning of new powder plant

provided a clear advantage in terms of long term sustainability of the margins.

The key highlight of 2014 was Olper’s

investment on brand and introduction of new innovative packaging in

results in 2014.Tarang was under volumetric pressure during first half of

competitive environment. With the support of price promotions and consumer centric

campaigns, Tarang reclaimed its market share and has surpassed historical volumes in

growing 35% in 4thquarter v/s 3rd

During the year two new products were launched,

quarter of 2013 the company commenced the pilot project to assess the viability of

pasteurized milk in Pakistan, whereby, shops under the brand name of “Mabrook” were

opened on a franchise model. The company has carried out comprehensive analysis of pilot

project and concluded that while the results and consumer acceptance rate of the concept

were encouraging, mass acceptance will take some time. We believe improvement in overall

energy situation and regulators involvement to invoke minimum pasteurized law, as followed

in other neighboring countries such as India, can be a key success criterion for pasteurized

milk growth in country. Accordingly, the company has decided to conclude the pilot project

and has recorded all the expenses in

project.

As they prepare to confront the unforeseen challenges of the New Year, company’s

management can put its unreserved confidence in its team’s ability to continue to sustain the

current growth momentum and build on the tremendous gains o

achieves even greater

22% to 19% on account of higher milk process which were not

in the competitive market environment. On an overall basis,

company’s profit increased from Rs. 211 million in 2013 to Rs. 889 million in

also witnessed revitalization of distribution network of the company and significant

k collection. Moreover, the successful commissioning of new powder plant


Olper’s significant volume growth which was led by continuous

on brand and introduction of new innovative packaging in 2013

was under volumetric pressure during first half of 2014


reclaimed its market share and has surpassed historical volumes in rd quarter of this year.

During the year two new products were launched, Olper’sLassiandY-Frooter

pany commenced the pilot project to assess the viability of



hat while the results and consumer acceptance rate of the concept



eighboring countries such as India, can be a key success criterion for pasteurized


and has recorded all the expenses in 2014’s financial statements in relation to th



current growth momentum and build on the tremendous gains of 2014

levels in the future.

Page | 38

on account of higher milk process which were not

in the competitive market environment. On an overall basis,

million in 2014.The year

also witnessed revitalization of distribution network of the company and significant

k collection. Moreover, the successful commissioning of new powder plant


significant volume growth which was led by continuous

2013 which yielded

2014 due to intense


reclaimed its market share and has surpassed historical volumes in 2014

Frooter. During the last

pany commenced the pilot project to assess the viability of



hat while the results and consumer acceptance rate of the concept



eighboring countries such as India, can be a key success criterion for pasteurized


’s financial statements in relation to the closure of



2014 so the company

levels in the future.

Documents

Engro Foods Report (FSA)