[FORCASTED FINANCIAL REPORT OF ENGRO FERTILIZER LIMITED PAKISTAN 13-14][In this Report I have explained about Engro Fertilizer limited and its next year forecasted financial statements about their Balance sheet, Profit and Loss Account, Ratios and last Summary.]

2014Engro Fertilizer CompanyLimitedPakiatan Assingnemetn of Syed Ali Abbas Shah MBA(HRM)Roll No 144Submitted To Sir Asif Channa Shah Abdul Latif University Khairpur Meer’s Sindh

Engro Fertilizers Limited PakistanHistoryOur story begins with one company’s enterprising decision to strive ahead and invest when another had bowed out. In 1957, Pak Stanvac –an Esso/Mobil joint venture –stumbled upon vast deposits rich in natural gas in Mari while pursuing viable oil exploration in Sind. With Pak Stanvac focused exclusively on oil exploration, the discovery shifted the impetus to Esso which decided to invest on the massive industrial potential of Mari gas field. Esso proposed establishment of a giant urea plant in Daharki, about ten miles from the Mari gas fields, which would use natural gas produced as its primary raw material to turn out urea fertilizer.

Talks with the Government of Pakistan bore fruit in 1964, and an agreement was signed allowing Esso to set up a urea plant with an annual capacity of 173,000 tons. Esso brought in state-of-the-art design; commercially tried facilities; and a highly distinguished pool of technical expertise to ensure a smooth start up. Total investment made was US$ 46M –the single largest foreign investment in Pakistan to date then. The plant started production on 4 December 1968 –a few months late and with less than 10 % over run on the original budget.

To boost sales, a full-fledged marketing organization was established which undertook agronomic programs to educate farmers of Pakistan. As the nation’s first branded fertilizer manufacturer, the Company helped modernize traditional farming practices and boost farm yields, directly impacting the quality of life for farmers and their families, and for the nation at large. Farmer education programs increased consumption of fertilizers Pakistan, paving way for Company’s branded urea called “Engro” –an acronym for “Energy for Growth”.

In 1978, Esso became Exxon as part of an international name change. The Company was therefore renamed Exxon Chemical Pakistan Limited.

In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of Exxon Chemical Pakistan Limited –in partnership with leading international and local financial institutions –bought out Exxon’s 75% equity. This was, and perhaps still is, the most successful employee buy-out in Pakistan’s corporate history. Renamed Engro Chemical Pakistan Limited, the Company went from strength to strength with its consistent financial performance; growth of its core fertilizer business; and diversification into other enterprises.A major plant capacity upgrade at Daharki coincided with the employee led buy-out in 1991. Engro also relocated fertilizer manufacturing plants from the UK and US to its Daharki plant site –an international first. Beginning in 1994, Engro Chemical Pakistan Limited moreover started venturing into other sectors: foods, energy, industrial control and automation, PVC resin manufacturing and marketing, and chemical terminal and storage.

By 2009, Engro was fast growing and had already diversified its business portfolio is as many as seven different industries. The continual expansions and diversifications in Company’s enterprises necessitated a broad restructuring in Engro Chemical operations and management. To facilitate better oversight, Engro Chemical Pakistan was converted into a holding company named Engro Corporation, and its fertilizer business was subsequently demerged to a newly formed Engro subsidiary –Engro Fertilizers Limited.

The demerger acquired the approval of High Court of Sind on December 9, 2009 after obtaining the requisite approvals from creditors and shareholders of the Company. The demerger became effective from January 1, 2010. Subsequently, all fertilizer business assets and liabilities have been transferred to Engro Fertilizers Limited against the issue of shares to the Company.

Future prospects for Engro Fertilizers look bright as the Company recently undertook its biggest urea expansion project to date. Its newly constructed Prill Tower stands tall at 125 meters –dubbed the tallest structure in Pakistan. The total cost of this expansion is approximately US$ 1.05 Billion, with the expanded facility looking set to make Engro the biggest urea manufacturer in Pakistan, besides substantially cutting the cost of urea imports to national exchequer.

CompanyEngro Fertilizers Limited is a wholly owned subsidiary of Engro Corporation and a renowned name in Pakistan’s fertilizer industry. Engro holds a vast, nationwide production and marketing infrastructure and produces leading fertilizer brands optimized for local cultivation needs and demand. Engro is also a leading importer and seller of Phosphate products, which are marketed extensively across Pakistan as phospatic fertilizers.

Our extensive market development activities have ensured a sustained pull for our primary and secondary fertilizer products and sellout productions since launch. Engro Fertilizers Limited enjoys loyal customer base across Pakistan owing to its trusted fertilizer brands and continual farmer assistance in training and education.

Engro Fertilizers Limited was incorporated in June 2009, following a decision to demerge fertilizer concern from its parent company Engro Chemical Pakistan Limited. The continual expansions and diversifications in its enterprises necessitated a broad restructuring in Engro Chemical operations and management. To facilitate better oversight, Engro Chemical Pakistan was converted into a holding company named Engro Corporation, and its fertilizer business was subsequently demerged to a newly formed Engro subsidiary –Engro Fertilizers Limited.

Engro’s fertilizer manufacturing facility at Daharki has been experiencing ongoing expansion. This, coupled with distinct dynamics of highly nuanced fertilizer industry warranted an independent and dedicated business entity and approach. The demerger of fertilizer concern was approved by High Court of Sind on December 9th, 2009, making it effective as of January 1st 2010.

Engro Fertilizers is poised to become the leading urea manufacturer in the country following major upgrading of its manufacturing capabilities. ENVEN 1.3–a tremendous expansion in Engro’s urea manufacturing facility went into production in November 2010 and looks set to end Pakistan’s near-term urea imports, leading to benefits of an expanded local urea base and savings in national exchequer.

Engro is a dynamic company driven by a vision to improve productivity and lifestyle for thousands of farmers across Pakistan. Engro Fertilizers Limited has earned itself a distinguished name by continually striving to uphold its tradition and trust of its loyal consumer base.

Vision

“Promoting growth of communities around Engro’s supply chain and giving people equal access to choices, opportunities and ability to exercise their rights”

Engro Foundation brings realization to the dreams of our people to make a difference in lives of those around us. We believe in the power of Pakistan’s human capital to change the face of communities and economies and make them agents of a wider change.

Mission“Engro Foundation is committed to make positive impact on lives of communities around its supply chain through provision of improved basic services (health, infrastructure, water and sanitation); education and skill development; environment and livelihood training. In addition, it will work with partner organizations to provide financial and technical support in response to natural calamities.”

Through its network of facilities across Pakistan, Engro aims to make a difference in communities where average household income borders or is below the poverty benchmark. Engro Foundation works across rural and suburban Pakistan in partnership with development organizations to create a trickledown effect of resource development, enabling indigenous communities to sustain economies, employ their human resources, and learn critical skills they need to be part of national mainstream.

Core Values

Safety, Health & EnvironmentFor Engro, safety and health of our personnel, neighbors, customers and visitors is the foremost concern in all our operations and processes. We realize and care about our responsibilities towards environment, health and safety within our own confines and beyond –extending safe practices throughout procurement, distribution and waste disposal.

Ethics and IntegrityAt Engro, integrity takes precedence over results. We uphold honest and ethical behavior in all our activities within the Company and in its relations with customers and stakeholders. We stand to commit ourselves to conduct business and provide service with unyielding integrity, valuing our repute as a conscientious and scrupulous corporate entity as our biggest of all assets.

LeadershipWe value leaders and cultivate strongly the ability to lead at all levels within our organization. Engro is the professional home to business leaders with high integrity, energy and enthusiasm who demonstrate exceptional managerial, professional and people skills. Ours are the people who inspire others set high goals and strive hard to achieve them.

Quality & Continuous ImprovementWe believe that quality and a relentless commitment to continuous improvement are essential to our ongoing success. To this end, we define quality as understanding customers’ expectations, agreeing on performance and value, and providing products and services that meet or exceed expectations every time. Our motto is, “Quality in all we do.”

Enthusiastic Pursuit of ProfitWe push ourselves to goals that are ambitious, worth aiming and satisfying. Our success hinges on an enthusiastic attitude towards discharging our responsibilities to our shareholders and enhancing our long-term profitability and growth. This winning attitude comes with a meaningful career security and growth and profound personal development for each of us.

External & Community InvolvementWe believe that society must have industrial organizations that it can trust. Trust and confidence are earned by performance, by open and direct communication, and by active involvement in the communities in which we live and conduct our business. Engro appreciates the importance of cooperation and trust with the communities that we work with, and strives to get them to the road of modernization and improvement.

Candid & Open CommunicationsWe believe that excitement, satisfaction and recognition are essential elements of a creative and high-performing work environment. Our employees enjoy working and putting in their best efforts for Engro, because for them it is an engaging and empowering experience every day of their life.

Enjoyment & FunWe value communications that are courteous, candid and open –those that enable each of us to do our jobs more effectively and that contribute to the quality of our judgments and decision making. To us, effective communication is one that also provides understanding of the company’s overall objectives and plans and of the thinking behind them.

InnovationSuccess requires us to continually bank on breakthrough ideas, improving on our efficiency, work methods and products. We encourage challenges to the status quo and seek organizational environments in which ideas are generated, nurtured and developed.

Individual Growth & DevelopmentWe strongly believe in the dignity and value of our people. We treat each other with respect and strive to create an organizational environment in which individuals are encouraged and empowered to contribute, grow and develop themselves, and help their peers and communities to develop and grow.

Teamwork & PartnershipHigh-performing teams containing the right mix can achieve what individuals alone cannot. Our strength is our purposeful use of the diversity of style; approach and skills to build teams that go beyond the capabilities of its individual members.

Diversity & International FocusWe value differences in gender, race, nationality, culture, personality and style, as diverse solutions, approaches and structures are more likely to meet the needs of customers and achieve our business goals. Engro is fast realizing its ambitions to have worldwide footprints to provide truly global solutions and opportunities to its stakeholders and customers, and is poised in its culture and attitude to take on the global stage.

Blance Sheet Of Engro Fertlizer

Ratio Analysis

Summary of Engro Fertilizer limited

2014 2013 2012 2011

Summary of Balance Sheet (In millions)Share capital 12,228 10,728

10,728 10,728Reserves 12,841 5,070 7,889

2,912Shareholders’ funds / Equity 25,069 15,798

18,616 13,640Long term borrowings 55,896 51,482 59,398

64,160Capital employed 83,889 82,176 88,001 86,452Deferred liabilities 4,655 3,381 4,521

2,581Property, plant & equipment 79,315 82,878 86,332 84,370Long term assets 79,562 83,124 86,540 84,631Current assets 30,366 14,381 14,337

13,423Summary of Profit and LossSales 50,129 30,626 31,353 19,017Gross profit 22,121 9,861

16,733 8,910Operating profit 17,054 6,752 14,521

6,556Profit before tax 8,384 (3,952) 6,877

5,207Profit/(loss) after tax 5,497 (2,935) 4,588

3,730EBITDA 22,010 11,741 17,673

7,365Summary of Cash FlowsNet cash flow from operating activities 24,813 6,371 9,279

4,359Net cash flow from investing activities (560) (1,857) (3,517)(14,654)Net cash flow from financing activities (5,821) (4,920) (4,589) 12,903Changes in cash & cash equivalents 18,432 (406) 1,173 2,609Cash & cash equivalents – Year end 22,516 4,085 4,491 3,318Summary of Actual ProductionUrea 1, 561, 5 75 974, 425 1,279,378 971,913

NPK 92,839 67,755 113,172 100,270