Engro Foods Report (FSA)

Report On:
Financial Statement Analysis (From FY2010-2014)

Engro Foods Limited
Analysis FOR:
Sir Shafi Azad

Federal Urdu University,
Department of Commerce
Analysts:
Abdul Latif (1204101)
Muhammad Waseem (1204136)
Syed Tufail Haider (1204177)
Yusra Ali (1204216)
Date d:
October 27, 2015
Page | 0
(ABDUL HAQ CAMPUS)
Submitted To: Sir Shafi Azad

Submitted By
Roll No
Abdul Latif
1204101
Muhammad Waseem
1204136
Syed Tufail Haider
1204177
Yusra Ali
1204216
Class: BS (Commerce) 8th Semester

Page | 1
Page | 2
A CKNOWLEDGEMENT
Countless Thanks to He Who Is Lord of Lords
At first instant, humbly we bow our head with all the feeling of our heart and soul before the
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 result
result of collective effort. There are innumerous helping
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 Sir Shafi Azad for stimulating our creative abilities by
assigningg 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
him and this report has put
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.
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.
Page | 3
TABLE OF CONTENTS
S.NO
Topics
Page No
An overview
Introduction & History
Vision Mission & Core Value
Facts And Figure, Strategic Objective and

Brands
8-9
Income Statement And Balance Sheet
10-12
Ratio Analysis
13-25
Industry Average
26
Trend Analysis
27-31
Vertical Analysis
32-33
10
Horizontal Analysis
34-36
11
Overall Analysis
37-39
Page | 4
ANOVER VIEW
This is the project about financial statements
statements analysis of a company. In this regard the
company which we chosen to be analyzed is ENGRO FOODS LIMITED.The
The company is dealing
in food business for many years. The compan
companyis well reputed in the market and deal in a wide
range of healthy food products.
products.Itss product line contains products such as milk, tea whitener,
cream, ice cream, juices, flavored milk and many others. The company has strong marketing
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
shareholders?
areholders? Why dont investors 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 easily
easily understandable after
going through its financial statements. The company is running its business so well. ENGRO
FOODS is the 1st company which is using Bactofuge technology. The company has not been
in this business for as long as NESTL is, but the way it has grown up is appreciable. It has
come up with innovative features in its products.
products The company has capability to pay it
liabilities on time and to keep its assets managed. ENGRO FOODS not only provide incentives
to its stockholders but also to its eemployees.
mployees. It offers its employees much outdoor training so
that they can work in a healthy environment and dont get tired of their hectic routine. That is
why it has many loyal employees to work with.
Page | 5
e n g r ofoods
Introduct ion:
Engro Foods Limited was officially launched as a fully owned subsidiary of EngroCorporationin
Engro
2004.Using
.Using dairy as a stepping stone to enter into the food business, the Company has
establishedstate-of-the-art
art processing units in Sukkur and Sahiwal, along with an ice cream
productionfacility
onfacility in Sahiwal. Top quality brands like Olpers, Olpers Lite, Tarang,
Tarang Omore and
Olpers Cream have beensuccessfully launched under the helm of Companys dairy products. To
support these brandsand their highest standards of quality, Engro Foods has invested
inv
heavily
in milk processing andmilk collection infrastructure. Engro Foods has also venture beyond the
dairy sector. In thispursuit, grain and fruit markets have been analyzed in great detail.
Engrohas launched its newbrand in fruit juices called as Y-frooter. EngroFoods
Foods purposeis
purpose to
E
Elevate Consumers Delight Worldwide and the Company aims to generate a significant
portion of its revenuefrom foreign operations.
History:
Engro Foods Pvt. 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
capability of more than 300,000
300,000liters
liters per day and UHT milk capacity of more than
200,000liters
liters perday. The plant has been established
establi
at a cost of Rs. 1billion
billion which provides
direct employment to 750people.Engro
people.Engro Foods has entered the Food businessthrough milk
processing and sale with the companys vision to pursue growth opportunitiesbased on
country fundamentals and own strength. IItt also positions the company to leverage
itscorporatesocial responsibility initiatives and work closely with rural communities to
promoteintegrated farming and livestock development. This effort is expected to play vital
role inpoverty alleviation and improving
improving livelihoods of the poor in the milk collection areas.
Engro Foods will work with the Pakistan Poverty Alleviation Fund and its three
partnerorganizations to help implement sustainable business models that increase farmers
profitability and develop a positive social and business climate for growth and expansion
oflivestock and other forms of value added agriculture.
Page | 6
Vis ion:
Engro Foods will continue to make investments aimed at impacting lives and delighting
consumers each day, every day, in a multitude ways.
Mission:
To create wealth by building new businesses based on company and country strengths in
Petrochemicals, InformationTechnology, Infrastructure and other Agricultural sectors.
Core Values:
Ethics and integrity
Safety, Health and Environment
Innovation& Risk Taking
Our People
Community & Society
Page | 7
Facts &Figures:
12 Million Consumers nationwide use Engros products each day.
More than 1600 milk collection points spread throughout the country.
Ranked2nd in ice-cream
cream business.
Holds more than 50% market share in UHT milk business.
Providing livelihood to 350,000 farmers across Pakistan.
2 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.
The
he first Pakistani company to produce 1 billion tetra
tetra packs in a single year.
Engro Foods 2012 Annual Report secured 2nd
d position for the Best Corporate Report
Award in its category.
Strate gi c Obj ectives (4Ds):

DIVERSIFY: Moving
oving beyond the traditional dairy portfolio and explore new categories to
delight consumers.
D EC I P H E R : bringing clarity in approach within our dairy portfolio to encompass a
wider consumer segment.
DISTANCE: The
he brand portfolio to allow further expansion.
expansion
DEVELOP: Extending
xtending physical reach to other geographies for exploring the untapped
possibilities
Page | 8
Brand Portfolio:
Enhance the culinary experience
Sheer indulgence in every sip comes
celebration of life at its creamy
Olpers. Give your day a fresh start
with Olpers Cream- A rich

best.
only with the rich creamy thickness of

with Olpers!
Get nutrition and the best value for money

with omungdobala.
omungdobala
Page | 9
I N CO M E S T ATE M E N T
(Rs. In Thousands)
2014
2013
2012
2011
2010
Sales
43,027,377
37,890,688
40,168,919
29,859,226
20,944,943
Cost of sales
(34,926,132)
(29,747,587)
(29,848,301)
(23,230,445)
(16,552,117)
Gross profit
8,101,245
8,143,101
10,320,618
6,628,781
4,392,826
Distribution and marketing

expenses
(4,692,502)
(5,063,279)
(4,654,275)
(3,716,489)
(2,913,448)
Administrative expenses
(1,282,240)
(1,041,254)
(795,690)
(504,722)
(473,198)
Other operating expenses
(103,770)
(188,729)
(429,763)
(208,902)
(131,460)
Other operating income
304,854
324,301
382,402
213,133
54,942
Operating profit
2,327,587
2,174,140
4,823,292
2,411,801
929,662
Other expenses
(596,328)
(881,456)
Finance costs
(1,236,904)
(784,904)
(902,503)
1,049,141
(659,562)
494,355
507,780
3,920,789
1,362,660
270,100
Taxation
394,476
(296,820)
(1,325,616)
(471,687)
(94,478)
Profit for the year
888,831
210,960
2,595,173
890,973
175,622
Profit before taxation
Page | 10
BAL AN CE SHEE T
Assets
2014
2013
2012
2011
2010
Property, plant and equipment
15,021,519
14,504,771
11,023,246
9,615,426
7,148,219
Long term Investment
960,000
Biological assets
858,680
716,465
668,455
496,809
428,293
Intangible assets
112,208
122,838
104,569
133,598
142,433
Long term advances and deposits
109,174
93,132
81,862
24,212
23,126
Compensation expense
112,581
168,865
427,288
Investment in subsidiary
Non Current Assets
16,214,162
16,033,359
12,741,150
10,270,045
8,722,071
Stores, spares and loose tools
788,141
739,671
610,640
571,812
441,841
Stock-in-trade
3,697,787
3,083,583
3,494,605
2,637,816
2,089,221
Trade debts
95,962
153,573
149,074
87,121
51,879
Advances, deposits and prepayments
113,501
181,080
261,790
266,093
244,209
Other receivables
2,865,607
2,354,280
1,440,167
1,160,126
720,736
Deferred employee share option

compensation expense
90,430
136,153
Taxes recoverable
1,637,018
636,588
347,075
10,990
9,417
Short term investments
170,000
2,708,750
1,294,000
Page | 11
Cash and bank balances
196,900
557,266
422,008
350,728
180,181
Current Assets
9,485,346
8,012,194
9,459,896
6,378,686
3,737,993
Total Assets
25,699,508
24,045,553
22,201,046
16,648,731
12,460,064
2014
2013
2012
2011
2010
Share capital
Advance against issue of share capital
Share premium
Employee share option compensation
reserve
Hedging reserve
Re-measurement
measurement of post employment
benefits - Actuarial loss
7,665,961
7,665,961
7,615,776
7,517,889
7,000,000
1,234
865,354
865,354
810,280
722,182
399,740
407,133
(27,736)
(9,581)
16,761
(18,178)
331
-
(35,715)
(34,839)
(22,954)
(17,730)
Inappropriate profit
2,710,013
1,821,182
1,610,222
(984,951)
(1,875,924
)
11,577,617
10,715,210
10,031,319
7,219,212
5,124,407
5,476,993
7,126,994
6,023,070
5,610,000
4,625,000
2,589
4,714
1,185,717
1,538,583
1,652,520
308,090
180,964
1,870
3,462
2,516
9,410
17,390
6,665,226
8,674,987
7,692,980
5,922,549
4,814,140
1,605,597
1,032,008
1,685,823
465,000
200,000
3,222,661
3,369,182
2,394,108
2,370,783
2,040,575
41,397
14,517
27,966
194,025
229,312
302,273
368,152
275,077
61,092
10,337
6,566
20,229
2,190
2,331,893
85,389
252,250
7,456,665
4,655,356
4,476,747
3,506,970
2,521,517
25,699,508
24,045,553
22,201,046
16,648,731
12,460,064
Equity & Liabilities
Equity
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
Page | 12
R ATIOA NALYSIS
Prof itabil ityRatios:
GrossP rofitRatio:
Y ea r
Gross Pro it Ratio =
Gross Pro it
100
Net Sales
2014
18.83%
2013
21.49%
2012
25.69%
2011
22.20%
2010
20.97%
Comment:
A company's cost of salesrepresents the expense related to labor, raw materials and
manufacturing overhead involved in its production process. This expense is deducted from the
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,
materials, labor and
manufacturing-related
related fixed assets to generate profits. A higher margin percentage is a
favorable profit indicator.Engro
.Engro Foods average gross profit %age is 21.8%.the
the decline of gross
profit ratio in 2014 is caused by higher distribution
distribution cost and administration cost as well as
higher
prices of
30.00%
25.69%
milk
Gross Profit Ratio
25.00%
20.00%
22.20%
21.49%
20.97%
18.83%
15.00%
10.00%
5.00%
0.00%
2014
2013
2012
2011
2010
internationally.
Page | 13
NetP rofitRa tio:

Y ea r
Net Pro it Ratio =
Net Pro it
100
Net Sales
2014
2.07%
2013
0.56%
2012
6.46%
2011
2.98%
2010
0.84%
Comment:
A key financial indicator used to assess the profitability of a company. Net profit margin
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 how efficient a company is and how well it controls
its costs. The higher the margin is, the more effective the company is in converting revenue
into actual profit. Companys best year regarding net profit ratio was 2012 but it is now decline
to 2.07% the reason is that company is currently investing in lot of new projects which will
yield profits in future
.
7.00%
6.46%
6.00%
Net Profit Ratio
5.00%
4.00%
2.98%
3.00%
2.07%
2.00%
1.00%
0.84%
0.56%
0.00%
2014
2013
2012
Net Profit Ratio
2011
2010
Page | 14
Retu rnOnAssets:
Y ea r
ROA =
Pro it After Tax

100
Avg. Total Assets
2014
3.57%
2013
0.91%
2012
13.37%
2011
6.12%
2010
1.41%
Comment:
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 assets to generate earnings.
earnings.The assets of the
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 into
into net income. The higher the ROA
number, the better, because the company is earning more money on less investment. The
ROA is quite low company should work in this field.
Retu rnOnEqui ty:

Y ea r
ROE =
Net Pro it
100
Avg. Shareholders Equity
2014
7.68%
2013
1.97%
2012
25.81%
2011
12.31%
2010
3.43%
Comment:
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.Currentlycompany
investors.
has not maintained a good return for the
stockholders.
Page | 15
Liqu idit yRati os:

CurrentRa tio:
Y ea r
Current Ratio =
Current
Current Assets
Current
Current Liabilities
2014
1.27
2013
1.72
2012
2.14
2011
1.83
2010
1.48
Comment:
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 term obligations because its currents
ratio is more than 1.
QuickRa ti o:
Y ea r
Quick Ratio =
Quick
Quick Assets
Current
Current Liabilities
2014
0.67
2013
0.90
2012
1.25
2011
0.91
2010
0.49
Comment:
Quick ratio measures the firms ability to pay off its short term obligations without relying on
the sale of inventory. The higher the quick ratio, the better the company's liquidity
position.Co.is
Co.is doing average in this area. We can see that in2012the
in
the quick ratio is 1.25which
Page | 16
means that a company has more liquid assets than its currents liabilities so it can easily pay off
its short term obligations.
GraphicalRepresentatio n
Liquidity Ratios
2.5
2.14
2
1.83
1.72
1.48
1.5
1
1.27
1.25
0.91
0.9
0.67
0.49
0.5
0
2014
2013
2012
Current Ratio
2011
2010
Quick Ratio
Page | 17
Financial LeverageRatios:
Debt T oEq uityRatio:
Y ea r
Debt
Debt To
To Equity =
Total Liabilities
Total Equity
2014
1.22
2013
1.24
2012
1.21
2011
1.30
2010
1.43
Comment:
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.
ratio. The company relies more on debt than
equity but the ratio is not too much high so the co. is also not too much riskier.
Debt Ra tio:
Y ea r
Debt Ratio =
Total Liabilities
Total Assets
2014
0.55
2013
0.55
2012
0.55
2011
0.57
2010
0.59
Page | 18
Comment:
A financial ratio that measures the extent of a companys or consumers leverage.
leverage As the debt
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 the debt.
Equity Ra tio:
Y ea r
Equity Ratio =
Total Equity
Total Assets
2014
0.45
2013
0.45
2012
0.45
2011
0.43
2010
0.41
Comment:
Measures the amount of assets that are financed by owners' investments by comparing the
Financial Leverage Ratio

1.6
1.4
1.43
1.22
1.24
1.21
1.3
1.2
1
0.8
0.6
0.55
0.45
0.55
0.45
0.55
0.45
0.57
0.43
0.59
0.41
0.4
0.2
0
2014
2013
D/E Ratio
2012
Debt Ratio
2011
Equity ratio
2010
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
Engro foods is also not too much risky as it relies 45% on equity to finance
its assets.
Page | 19
Efficiency Ratios:
Inve ntory Turnove r Rati o:
Y ea r
Inventory Turnover =
2014
10.30
2013
9.00
2012
9.70
2011
9.80
2010
10.20
Cost of sales
Avg. Inventory
Inventory Turnover In Da ys:

Y ea r
Inv. Turnover Days =
2014
35.44
2013
40.56
2012
37.63
2011
37.24
2010
35.78
No. of days
Inv. Turnover
Comment:
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, therefore, excess inventory. A
high ratio implies either strong sales or ineffective buying.Engro Foods is doing well in this
area as its inventory sold in approx38
approx days.
Page | 20
ReceivableTurno ver Rati o:

Y ea r
Receiv. Turnover =
Net Credit Sales

Accounts Receiv.
2014
344.90
2013
250.40
2012
340.10
2011
429.60
2010
547.10
Average Collection Period:

Y ea r
Avg. Collection Period =
2014
1.06
2013
1.46
2012
1.07
2011
0.85
2010
0.67
No. of days
Rev. Turnover
Comment:
It measures how many times a business can turn its accounts receivable into cash during 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.
Page | 21
Operating Cycle:
Y ea r
Operating
Operating cycle =
Inventoey
Inventoey Turnover
Avg.
Avg. Collection
Collection Period
2014
36.50
2013
42.01
2012
38.70
2011
38.09
2010
36.45
Comment:
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.
Total Asse ts T urnove r Rati o:

Y ea r
Total
Total Assets
Assets Turnover =
2014
1.73
2013
1.64
2012
1.81
2011
1.79
2010
1.68
Net Sales
Total Assets
Comment:
It measures a company's ability to generate sales from its assets by comparing net sales with
average total assets.. In other words, this ratio shows how efficiently a company can use its
assets to generate sales. The company has maintained a good turnover ratio which shows a
positive sign to the investors.
Page | 22
Shareholder Ratios:
EarningsPerSha re:
Y ea r
Earning
Earning Per
Per Share =
2014
1.16
2013
0.28
2012
3.41
2011
1.19
2010
0.25
Net
Net Income
No.
No. of
of Shares
Comment:
Earnings per share serves as an indicator of a company's profitability.Engro
profitability.Engro foods EPS is low
because it earned less profit while the no. of shareholders are higher the best EPS was in 2012
as co.
o. earned the highest net income in 2012.
Page | 23
BookValue Per Share:

Y ea r
Book
Book Value
Value Per
Per Share =
2014
15.10
2013
13.98
2012
13.20
2011
9.63
2010
7.32
Total
Total Equity
No.
No. of
of Shares
Comment:
Book value per share indicates the book value (or accounting value)) of each share of stock.
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.
Page | 24
Price Ea rningsRatio:
Y ea r
Price Earning =
Market Per Share

EPS
2014
93.57
2013
379.37
2012
28.79
2011
19.07
2010
N/A
Comment:
The price-earnings
earnings ratio indicates the Rupee amount an investor can expect to invest in a
company in order to receive one Rupee of that companys earnings. As we can see that
company P/E ratio is now decreased compare it to 2013 it means company is doing quite well
in its business operations.
Page | 25
IndustryAverage :
Page | 26
T RENDA NALYSIS
BALANCE SHEET
ASEETS
Biological assets
Intangible assets
Deferred employee share option compensation expense
2014
Stock-in-trade
Trade debts
Other receivables
Deferred employee share option compensation expense
Taxes recoverable
Current Assets
Total Assets
2011
2010
14504771
10958079
9615426
7148219
15.56%
15.03%
11.35%
9.96%
7.41%
858680
716465
668455
496809
428293
112208
122838
104589
133598
142433
91.45%
100.11%
85.24%
108.88%
116.08%
109174
93132
81862
24212
23126
33.19%
28.32%
24.89%
7.36%
7.03%
112581
168865
2009
96517512
122704
328907
2787
427288
16214162
16033359
12675983
10270045
8722071
82960587
19.54%
19.33%
15.28%
12.38%
10.51%
100%
788141
739671
675807
571812
441841
961117
82.00%
76.96%
70.31%
59.49%
45.97%
3697787
3083583
3494605
2637816
2089221
874.99%
729.66%
826.92%
624.18%
494.36%
95962
153573
149074
87121
51879
3.82%
6.11%
5.93%
3.46%
2.06%
113501
181080
261790
266093
244209
7.73%
12.33%
17.82%
18.11%
16.62%
2865607
2354280
1440167
1160126
720736
90430
136153
103.61%
156.00%
0.00%
0.00%
0.00%
1637018
636588
334714
1443
9417
305.32%
118.73%
62.43%
0.27%
1.76%
170000
2706750
1294000
37.71%
600.36%
287.01%
0.00%
196900
557266
422006
350728
180181
4.98%
14.09%
10.67%
8.87%
4.56%
9,485,346
8,012,194
9,459,896
6,378,686
3,737,993
2012
15021519
Non-Current Assets
2013
422607
2514425
1469155
275714
87278
536167
450857
3955347
10672667
88.88%
75.07%
88.64%
59.77%
35.02%
100%
25699508
24145553
22188686
16639184
12460064
93709438
27.42%
25.77%
23.68%
17.76%
13.30%
100%
Page | 27
2014
Equity &Liabilities
2013
2012
2011
2010
EQUITY
Share capital
Share premium
Employee share option compensation reserve
Hedging reserve
Remeasurement of post employment benefits - Actuarial
loss
Unappropriated profit / loss
Total Equity
2009
base year
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
7.68%
6.85%
7,000,00
0
234.94%
100.00%
10,550,08
1
0.00%
100.00%
2,979,426
8.20%
8.20%
399,740
407,133
138.67%
141.24%
0.00%
0.00%
0.00%
100.00%
(27,736)
(9,581)
16,761
(18,178)
331
(609,719)
-2.75%
2.98%
-0.05%
100.00%
288,258
4.55%
1.57%
(35,715)
(34,839)
2,710,013
1,821,182
1,610,222
(984,951)
1,875,92
4
9,250,972
29.29%
11,577,61
7
19.69%
10,715,21
0
17.41%
10,064,27
3
-10.65%
10.65%
7,236,94
2
20.28%
5,124,40
7
100.00%
28,888,23
8
40.08%
37.09%
34.84%
25.05%
17.74%
100.00%
5,476,993
7,126,994
6,023,070
5,610,00
0
4,625,00
0
1,870
3,462
Long term finances
Deferred liabilities
612,842

Deferred taxation
Deferred income
Total Non-Current Liabilities
988,169
1,185,717
1,538,583
1,652,520
308,090
180,964
2,516
9,410
17,300
6,665,226
8,674,987
7,692,980
5,921,25
5
4,814,14
0
1,601,011
416.31%
541.84%
480.51%
369.84%
300.69%
100.00%
Page | 28
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
200,000
810,100
198.20%
127.39%
208.10%
57.40%
24.69%
100.00%
3,222,661
3,369,182
2,358,703
2,343,506
2,040,575
3,160,852
101.96%
106.59%
74.62%
74.14%
64.56%
100.00%
41,397
14,517
194,025
229,312
61,092
10,337
6,585
20,229
2,190
195,753
31.21%
5.28%
3.36%
10.33%
1.12%
100.00%
85,389
252,250
2,331,893
27,966
302,273
368,152
740,043
275,077
7,456,665
4,655,356
4,441,432
3,480,987
2,521,517
6,395,489
116.59%
72.79%
69.45%
54.43%
39.43%
100.00%
25,699,508
24,045,553
22,188,685
16,639,184
12,460,064
93,709,438
27.42%
25.66%
23.68%
17.76%
13.30%
100.00%
Page | 29
T RREENDA NALYSIS
INCOME STATEMENT
2014
2013
2012
2011
2010
2009
base year
43,027,377
37,890,688
40,168,919
29,859,226
20,944,943
30,171,520
142.61%
125.58%
133.14%
98.96%
69.42%
100.00%
(34,926,132
)
(29,747,587
)
(29,848,301
)
(23,230,445
)
(16,552,117
)
(23,240,176
)
150.28%
128.00%
128.43%
99.96%
71.22%
100.00%
8,101,245
8,143,101
10,320,618
6,628,781
4,392,826
6,931,344
116.88%
117.48%
148.90%
95.63%
63.38%
100.00%
(4,692,502)
(5,063,279)
(4,709,275)
(3,716,489)
(2,913,448)
(1,945,176)
241.24%
260.30%
242.10%
191.06%
149.78%
100.00%
(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)
(424,110)
24.47%
44.50%
116.19%
49.26%
31.00%
100.00%
304,854
324,301
382,402
213,133
54,249
86,467
352.57%
375.06%
442.25%
246.49%
62.74%
100.00%
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)
Net sales
Cost of sales
Gross profit
Distribution and marketing

expenses
Other income
Operating profit
Other expenses
(1,236,904)
(784,904)
(902,503)
(1,049,141)
(659,562)
(1,320,579)
93.66%
59.44%
68.34%
79.45%
49.94%
100.00%
494,355
507,780
3,920,789
1,362,660
270,100
5,214,956
9.48%
9.74%
75.18%
26.13%
5.18%
100.00%
394,476
(296,820)
(1,325,616)
(471,687)
(94,478)
(1,257,696)
-31.36%
31.36%
23.60%
105.40%
37.50%
7.51%
100.00%
888,831
210,960
2,595,173
890,973
175,622
3,957,250
22.46%
5.33%
65.58%
22.51%
4.44%
100.00%
Finance costs
Taxation
Profit for the year
Page | 30
GraphicalRepresentatio n
Income statement
600.00%
500.00%
400.00%
300.00%
200.00%
100.00%
0.00%
-100.00%
2014
2013
2012
2011
2010
2009
Balance Sheet
600.00%
500.00%
400.00%
300.00%
200.00%
100.00%
0.00%
Non-Current
Assets
Current
Assets
2014
TotalAssets
2013
2012
Total Equity
2011
Total NonCurrent
Liabilities
2010
Current
Liabilities
Total Equity
& Liabilities
2009
Page | 31
V E R T I C A L A NALYSIS
BALANCE SHEET
Assets
2014
15,021,51
9
2013
58.4
5%
14,504,77
1
2012
60.3
2%
2011
2010
11,023,246
49.6
5%
9,615,426
57.7
5%
7,148,219
57.3
7%
960,000
7.70
%
Biological assets
858,680
3.34
%
716,465
2.98
%
668,455
3.01
%
496,809
2.98
%
428,293
3.44
%
Intangible assets
112,208
12,208
0.44
%
122,838
0.51
%
104,569
0.47
%
133,598
0.80
%
142,433
1.14
%
109,174
0.42
%
93,132
0.39
%
81,862
0.37
%
24,212
0.15
%
23,126
0.19
%

112,581
0.44
%
168,865
0.70
%
427,288
1.78
%
66.6
8%
12,741,150
57.3
9%
Long term Investment
Non Current Assets
16,214,16
2
63.0
9%
16,033,35
9
10,270,04
5
61.6
9%
8,722,071
70.0
0%
788,141
3.07
%
739,671
3.08
%
610,640
2.75
%
571,812
3.43
%
441,841
3.55
%
3,697,787
14.3
9%
3,083,583
12.8
2%
3,494,605
15.7
4%
2,637,816
15.8
4%
2,089,221
16.7
7%
Trade debts
95,962
0.37
%
153,573
0.64
%
149,074
0.67
%
87,121
0.52
%
51,879
0.42
%
Advances, deposits and

prepayments
113,501
0.44
%
181,080
0.75
%
261,790
1.18
%
266,093
1.60
%
244,209
1.96
%
2,865,607
11.1
5%
2,354,280
9.79
%
1,440,167
6.49
%
1,160,126
6.97
%
720,736
5.78
%
90,430
0.35
%
136,153
0.57
%
1,637,018
6.37
%
636,588
2.65
%
347,075
1.56
%
10,990
0.07
%
170,000
0.71
%
2,708,750
12.2
0%
1,294,000
7.77
%
196,900
0.77
%
557,266
2.32
%
422,008
1.90
%
350,728
9,485,346
36.9
1%
8,012,194
33.3
2%
9,459,896
42.6
1%
6,378,686

Stock-in-trade
Other receivables
Taxes recoverable
Current Assets
Total Assets
25,699,
508
100
%
24,045,
553
100
%
22,201,0
46
100
%
16,648,
731
9,417
0.08
%
2.11
%
180,181
1.45
%
38.3
1%
3,737,993
30.0
0%
100
%
12,460,
064
100
%
Page | 32
Equity &
Liabilities
2014
2013
2012
2011
2010
Equity
Share capital
Advance against issue of share
capital
Share premium
Employee share option
compensation reserve
Hedging reserve
Remeasurement of post
employment benefits Actuarial loss
Inappropriate profit
7,665,9
61
29.8
3%
7,665,9
61
31.8
8%
7,615,7
76
1,234
865,35
4
399,74
0
3.37
%
1.56
%
0.11
%
0.14
%
865,35
4
407,13
3
3.60
%
1.69
%
0.04
%
0.14
%
(27,736
)
(35,715
)
(9,581)
(34,839
)
7,517,8
89
45.1
6%
7,000,0
00
56.
18%
810,28
0
34.3
0%
0.01
%
3.65
%
722,18
2
4.34
%
16,761
0.08
%
(18,178
)
331
0.0
0%
(22,954
)
0.10
%
(17,730
)
0.11
%
0.11
%
5.92
%
(1,875,
924)
15.
06%
41.
13
%
2,710,0
13
10.5
4%
1,821,1
82
7.57
%
1,610,2
22
7.25
%
(984,95
1)
11,577,
617
45.05
%
10,715,
210
44.56
%
10,031,
319
45.18
%
7,219,2
12
43.36
%
5,124,4
07
5,476,9
93
21.3
1%
7,126,9
94
29.6
4%
6,023,0
70
27.1
3%
5,610,0
00
4,625,0
00
2,589
1,185,7
17
4.61
%
1,538,5
83
6.40
%
1,652,5
20
7.44
%
308,09
0
1,870
33.7
0%
0.02
%
1.85
%
0.01
%
2,516
0.01
%
9,410
0.04
%
17,390
0.08
%
6,665,2
26
25.9
4%
8,674,9
87
36.0
8%
7,692,9
80
34.6
5%
5,922,5
49
35.5
7%
4,814,1
40
38.
64
%
1,605,5
97
3,222,6
61
6.25
%
12.5
4%
0.16
%
1,032,0
08
3,369,1
82
4.29
%
14.0
1%
0.06
%
0.00
%
0.95
%
0.04
%
1,685,8
23
2,394,1
08
10.7
8%
465,00
0
2,370,7
83
200,00
0
2,040,5
75
1.6
1%
16.
38%
27,966
275,07
7
0.0
0%
2.2
1%
0.0
2%
252,25
0
2.79
%
14.2
4%
0.17
%
0.00
%
2.21
%
0.12
%
1.52
%
Long term finances
Obligations under finance lease
Deferred taxation
Deferred liabilities- pension
scheme
Deferred Income
Current Liabilities
Current portion of long term
finances
41,397
14,517

* long term finances
*short term finances
Short term finances
194,02
5
0.00
%
1.36
%
0.03
%
0.38
%
3,462
229,31
2
2,331,8
93
85,389
7,456,6
65
29.01
%
4,655,3
56
19.36
%
4,476,7
47
20.16
%
3,506,9
70
21.06
%
2,521,5
17
20.
24
%
25,69
9,508
100
%
24,04
5,553
100
%
22,20
1,046
100
%
16,64
8,731
100
%
12,46
0,064
10
0%
10,337
6,566
368,15
2
180,96
4
0.75
%
0.24
%
9.07
%
61,092
302,27
3
4,714
37.
12%
0.0
4%
1.4
5%
0.0
3%
20,229
2,190
Contingencies and
Commitments
Total Equity &
Liabilities
Page | 33
H O R I ZONTAL A NALYSIS
`
BALANCE SHEET
2014 Vs
2013
2013 Vs
2012
2012 Vs
2011
2011 Vs
2010
2010 Vs
2009
1051.11%
-91.26%
0.51%
8.25%
134.94%
0.00%
6.80%
12.20%
-1.82%
0.00%
Hedging reserve
Remeasurement of post employment
benefits - Actuarial loss
189.49%
-157.16%
2.51%
0.00%
Unappropriated profit / loss
48.81%
Equity
Share capital
Share premium
Employee share option compensation
reserve
-100.00%
-100.00%
-192.20%
-5591.84%
-100.05%
13.10%
-263.48%
-152.50%
-79.72%
8.05%
6.47%
39.07%
41.22%
-82.26%
-23.15%
18.33%
7.36%
21.30%
-100.00%
-45.98%
Long term finances
Deferred liabilities
-99.65%
-100.00%

Deferred taxation
-22.93%
-6.89%
436.38%
70.25%
Deferred income
-73.26%
-45.61%
-23.17%
12.76%
29.92%
23.00%
55.58%
-38.78%
262.54%
132.50%
-75.31%
-4.35%
42.84%
0.65%
14.85%
-35.44%
185.16%
0.00%
-100.00%
long term finances
-15.39%
-24.14%
-17.89%
33.84%
short term finance
491.00%
56.98%
-67.45%
823.70%
-98.88%
-100.00%
-66.15%
60.17%
4.82%
27.59%
38.05%
-60.57%
6.88%
8.37%
33.35%
33.54%
-86.70%
Current Liabilities
-100.00%
Short term finances

Page | 34
H O R I Z O N T A L A NALYSIS
BALANCE SHEET
2014 VS
2013
2013 Vs
2012
2012 Vs
2011
2011 Vs
2010
2010 Vs
2009
3.56%
32.37%
13.96%
34.51%
-92.59%
Biological assets
19.85%
7.18%
34.55%
16.00%
Intangible assets
-8.65%
17.45%
-21.71%
-6.20%
16.08%
17.23%
13.77%
238.11%
4.70%
-92.97%

-33.33%
-100.00%
Assets
Non-Current Assets
-100.00%
1.13%
26.49%
23.43%
17.75%
-89.49%
6.55%
9.45%
18.19%
29.42%
-54.03%
Stock-in-trade
19.92%
-11.76%
32.48%
26.26%
394.36%
Trade debts
-37.51%
3.02%
71.11%
67.93%
-97.94%
-37.32%
-30.83%
-1.62%
8.96%
-83.38%
Other receivables
21.72%
63.47%
24.14%
60.96%
161.41%

-33.58%
Taxes recoverable
157.16%
90.19%
23095.70
%
-100.00%
-93.72%
109.18%
-64.67%
32.05%
20.32%
94.65%
-95.44%
6.44%
8.82%
33.35%
33.54%
-86.70%
Current Assets
-100.00%
-84.68%
-98.24%
-100.00%
Page | 35
H O R I Z O N T A L A NALLYYSIS
T
INCOME STATEMEN
NT
2014
Vs2013
2013 Vs
2012
2012 Vs
2011
2011 Vs
2010
2010 Vs
2009
Net sales
13.56%
-5.67%
34.53%
42.56%
-30.58%
Cost of sales
17.41%
-0.34%
28.49%
40.35%
-28.78%
Gross profit
-0.51%
-21.10%
55.69%
50.90%
-36.62%
Distribution and marketing expenses
-7.32%
7.52%
26.71%
27.56%
49.78%
23.14%
40.58%
46.75%
6.66%
-45.02%
-61.70%
135.88%
58.91%
-69.00%
Other income
-6.00%
-15.19%
79.42%
292.88%
-37.26%
Operating profit
7.06%
-54.92%
14.52%
353.05%
Other expenses
-32.35%
Finance costs
57.59%
-13.03%
-13.98%
59.07%
-50.06%
-2.64%
-87.05%
187.73%
404.50%
-94.82%
Taxation
-232.90%
-77.61%
181.04%
399.26%
-92.49%
Profit for the year
321.33%
-91.87%
191.27%
407.32%
-95.56%
Page | 36
OVER-ALL ANALYSIS:
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 activities, Financing activities and cash flows are well
managed.
At Engro the driving force behind their growth has their deep commitment to elevating
consumer while making a meaningful contribution to our countrys 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 2014,, they continued to build on their
strengths and regained a significant competitive advantage in the market. A cconsiderable
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 2014. Layer by layer, a number of initiatives were
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 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 2014 their
distribution network had undergone a comprehensive overhaul and throughout the year
supply chain servicess 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 November 2014alone
alone as compared to 48% in December 2013.. In addition, their cutting edge
edg
marketing strategies bore fruit in 2014and
and we saw significant gains in sales volumes for a
number of their brands particularly Tarang and Olpers.. 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.
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 economy
e
and business operations. Despite these challenges company managed double digit revenue
growth with positive long-term
term outlook and tested opportunities for business expansion
through diversification into new product lines and brand differentiation. T
The company
reported Rs. 43.3 billion in consolidated revenue v/s Rs. 37.9 billion reported last year (2013)
(
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 2014.
Page | 37
Gross margin declined from 22% to 19% on account of higher milk process which were not
passed on to the consumers in the competitive market environment. On an overall basis,
companys profit increased from Rs. 211 million in 2013 to Rs. 889 million in 2014.The year
2014 also witnessed revitalization of distribution network of the company and significant
growth in milkk 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 Olpers significant volume growth which was led by continuous
investment on brand and introduction of new innovative packaging in 2013 which yielded
results in 2014.Tarang was under volumetric pressure during first half of 2014 due to intense
competitive environment. With the support of price promotions and consumer centric
campaigns, Tarang reclaimed its market share and has surpassed historical volumes in 2014
growing 35% in 4thquarter v/s 3rd quarter of this year.
During the year two new products were launched, OlpersLassiandY-Frooter
Frooter. During the last
quarter of 2013 the company
pany 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
hat 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
eighboring 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 2014s
s financial statements in relation to th
the closure of
project.
As they prepare to confront the unforeseen challenges of the New Year, companys
management can put its unreserved confidence in its teams ability to continue to sustain the
current growth momentum and build on the tremendous gains of
o 2014 so the company
achieves even greater
levels in the future.
Page | 38

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Report On:

Financial Statement Analysis (From FY2010-2014)

Sir Shafi Azad

(ABDUL HAQ CAMPUS)

Submitted To: Sir Shafi Azad

Syed Tufail Haider

Class: BS (Commerce) 8th Semester

Introduction & History

Vision Mission & Core Value

Facts And Figure, Strategic Objective and

Income Statement And Balance Sheet

Strate gi c Obj ectives (4Ds):

Enhance the culinary experience

Sheer indulgence in every sip comes

celebration of life at its creamy

Olpers. Give your day a fresh start

with Olpers Cream- A rich

only with the rich creamy thickness of

Get nutrition and the best value for money

Distribution and marketing

Other operating expenses

Other operating income

Profit for the year

Profit before taxation

Property, plant and equipment

Long term Investment

Long term advances and deposits

Stores, spares and loose tools

Advances, deposits and prepayments

Deferred employee share option

Short term investments

Cash and bank balances

Equity & Liabilities

Total Equity & Liabilities

Gross Pro it Ratio =

NetP rofitRa tio:

Net Pro it Ratio =

Net Profit Ratio

Pro it After Tax

Retu rnOnEqui ty:

Liqu idit yRati os:

Financial Leverage Ratio

Inventory Turnover In Da ys:

Inv. Turnover Days =

ReceivableTurno ver Rati o:

Net Credit Sales

Average Collection Period:

Avg. Collection Period =

Total Asse ts T urnove r Rati o:

BookValue Per Share:

Market Per Share

Long term advances and deposits

Deferred employee share option compensation expense

Stores, spares and loose tools

Advances, deposits and prepayments

Deferred employee share option compensation expense

Short term investments

Cash and bank balances

Employee share option compensation reserve

Long term finances

Derivative financial instruments

Total Non-Current Liabilities

Trade and other payables

Derivative financial instruments