LEARNING OBJECTIVES Introduction Vision & Mission Facts & Figure Ratio Analysis Industry Average Trend Analysis Vertical Analysis Horizontal Analysis Conclusion

Engro Foods Limited was officially launched as a fully owned subsidiary of Engro Corporation in 2004. .

Top quality brands like Olpers, Olpers Lite, Tarang, Omore and Olpers Cream have been successfully launched under the helm of Company’s dairy products.

Engro Foods has invested heavily in milk processing and milk collection infrastructure.

INTRODUCTION

Engro Foods will continue to make investments aimed at impacting lives and delighting consumers each day, every day, in a multitude ways.

To create wealth by building new businesses based on company and country strengths in Petrochemicals, Information Technology, Infrastructure and other Agricultural sectors.

Vision

Mission

Facts & figures

12 Million Consumers nationwide use Engro’s products each day. More than 1600 milk collection points spread throughout the

country. Ranked 2nd in ice-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.

Ratio Analysis 2014 2013 2012 2011 2010Current Ratio 1.27 1.72 2.14 1.83 1.48Quick Ratio 0.67 0.90 1.25 0.91 0.49Debt To Equity 1.22 1.24 1.21 1.30 1.43Debt Ratio 0.55 0.55 0.55 0.57 0.59Equity Ratio 0.45 0.45 0.45 0.43 0.41Inventory Turnover 10.30 9.00 9.70 9.80 10.20Inventory Turnover In Days 35.44 40.56 37.63 37.24 35.78Receivable Turnover 344.90 250.40 340.10 429.60 547.10Average Collection Period 1.06 1.46 1.07 0.85 0.67Operating Cycle In Days 36.50 42.01 38.70 38.09 36.45Total Assets Turnover 1.73 1.64 1.81 1.79 1.68Gross Profit Ratio 18.83 21.49 25.69 22.20 20.97Net Profit Ratio = 2.07 0.56 6.46 2.98 0.84Return on Assets 3.57 0.91 13.37 6.12 1.41Return on Equity 7.68 1.97 25.81 12.31 3.43Earning Per Share 1.16 0.28 3.41 1.19 0.25Book Value Per share 15.10 13.98 13.20 9.63 7.32Price-Earning Ratio 93.57 379.37 28.79 19.07 -

Industry Average

Trend Analysis

2014 2013 2012 2011 2010 20090.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

160.00%

Net sales Cost of sales Gross profit Profit for the year

Income Statement

Trend Analysis

Non-Cu

rrent

Assets

Curre

nt Asse

ts

TotalA

ssets

Total

Equit

y

Total

Non-Curr

ent L

iabilit

ies

Curre

nt Lia

bilitie

s

Total

Equity

& Liabil

ities

0.00%

100.00%

200.00%

300.00%

400.00%

500.00%

600.00%

Balance Sheet

2014 2013 2012 2011 2010 2009

Vertical Analysis  2014 2013 2012 2011 2010Sales

43,027,377 100%

37,890,688 100%

40,168,919 100%

29,859,226

100%

20,944,943

100%

Cost of sales (34,926,132) -81%

(29,747,587) -79% (29,848,301) -74%

(23,230,445) -78% (16,552,117) -79%

Gross profit 8,101,245 19%

8,143,101 21% 10,320,618 26%

6,628,781 22% 4,392,826 21%

Distribution and marketing expenses

(4,692,502) -11%

(5,063,279) -13% (4,654,275) -12%

(3,716,489) -12% (2,913,448) -14%

Administrative expenses (1,282,240) -3%

(1,041,254) -3% (795,690) -2%

(504,722) -2% (473,198) -2%

Other operating expenses (103,770) 0%

(188,729) 0% (429,763) -1%

(208,902) -1% (131,460) -1%

Other oprating income 304,854 1%

324,301 1% 382,402 1%

213,133 1% 54,942 0%

Operating profit 2,327,587 5%

2,174,140 6% 4,823,292 12%

2,411,801 8% 929,662 4%

Other expenses (596,328) -1%

(881,456) -2% - - - - - -

Finance costs (1,236,904) -3%

(784,904) -2% (902,503) -2%

1,049,141 4% (659,562) -3%

Profit before taxation 494,355 1%

507,780 1% 3,920,789 10%

1,362,660 5% 270,100 1%

Taxation 394,476 1%

(296,820) -1% (1,325,616) -3%

(471,687) -2% (94,478) 0%

Profit for the year 888,831 2%

210,960 1% 2,595,173 6%

890,973 3% 175,622 1%

Income Statement

Vertical AnalysisBalance Sheet2014 2013 2012 2011 2010

AssetsProperty, plant and equipment 58.45% 60.32% 49.65% 57.75% 57.37%Long term Investment - - - - 7.70%Biological assets 3.34% 2.98% 3.01% 2.98% 3.44%Intangible assets 0.44% 0.51% 0.47% 0.80% 1.14%Long term advances and deposits 0.42% 0.39% 0.37% 0.15% 0.19%Deferred employee share option compensation expense 0.44% 0.70% - - -Investment in subsidiary 1.78% - - -Non Current Assets 63.09% 66.68% 57.39% 61.69% 70.00%

Stores, spares and loose tools 3.07% 3.08% 2.75% 3.43% 3.55%Stock-in-trade 14.39% 12.82% 15.74% 15.84% 16.77%Trade debts 0.37% 0.64% 0.67% 0.52% 0.42%Advances, deposits and prepayments 0.44% 0.75% 1.18% 1.60% 1.96%Other receivables 11.15% 9.79% 6.49% 6.97% 5.78%Deferred employee share option compensation expense 0.35% 0.57% - - -Taxes recoverable 6.37% 2.65% 1.56% 0.07% 0.08%Short term investments - 0.71% 12.20% 7.77% -Cash and bank balances 0.77% 2.32% 1.90% 2.11% 1.45%Current Assets 36.91% 33.32% 42.61% 38.31% 30.00%

Total Assets 100% 100% 100% 100% 100%

Vertical AnalysisBalance Sheet

2014 2013 2012 2011 2010Share capital 29.83% 31.88% 34.30% 45.16% 56.18%Advance agianst issue of share capital - - 0.01% - -Share premium 3.37% 3.60% 3.65% 4.34% -Employee share option compensation reserve 1.56% 1.69% - - -Hedging reserve -0.11% -0.04% 0.08% -0.11% 0.00%Remeasurement of post employment benefits - Actuarial loss -0.14% -0.14% -0.10% -0.11% -Unappropriated profit 10.54% 7.57% 7.25% -5.92% -15.06%Total Equity 45.05% 44.56% 45.18% 43.36% 41.13%

Long term finances 21.31% 29.64% 27.13% 33.70% 37.12%Obligations under finance lease - - - 0.02% 0.04%Deferred taxation 4.61% 6.40% 7.44% 1.85% 1.45%Deferred liabilites- pension scheme - - - 0.01% 0.03%Deferred Income 0.01% 0.04% 0.08% - -Total Non-Current Liabilities 25.94% 36.08% 34.65% 35.57% 38.64%Current LiabilitiesCurrent portion of long term finances 6.25% 4.29% s 2.79% 1.61%Trade and other payables 12.54% 14.01% 10.78% 14.24% 16.38%Derivative financial instruments 0.16% 0.06% - 0.17% -Accrued interest / mark-up on 0.00% 0.00% 0.00% 0.00%* long term finances 0.75% 0.95% 1.36% 2.21% 2.21%*short term finances 0.24% 0.04% 0.03% 0.12% 0.02%Short term finances 9.07% - 0.38% 1.52% -Total Current Liabilities 29.01% 19.36% 20.16% 21.06% 20.24%Contingencies and CommitmentsTotal Equity & Liabilities 100% 100% 100% 100% 100%

Horizontal Analysis2014 Vs

20132013 Vs

20122012 Vs

20112011 Vs

20102010 Vs

2009Net 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%

Administrative expenses 23.14% 40.58% 46.75% 6.66%

Other operating expenses -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%

Profit before taxation -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%

Income Statement

Horizontal AnalysisBalance Sheet

2014 VS 2013 2013 Vs 2012 2012 Vs

20112011 Vs

20102010 Vs

2009AssetsNon-Current AssetsProperty, plant and equipment 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%Long term advances and deposits 17.23% 13.77% 238.11% 4.70% -92.97%Deferred employee share option compensation expense -33.33% -100.00%Investment in subsidiary -100.00%

1.13% 26.49% 23.43% 17.75% -89.49%Current AssetsStores, spares and loose tools 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%Advances, deposits and prepayments -37.32% -30.83% -1.62% 8.96% -83.38%Other receivables 21.72% 63.47% 24.14% 60.96% 161.41%Deferred employee share option compensation expense -33.58% -100.00%Taxes recoverable 157.16% 90.19% 23095.70% -84.68% -98.24%Short term investments -100.00% -93.72% 109.18% -100.00%Cash and bank balances -64.67% 32.05% 20.32% 94.65% -95.44%Total Assets 6.44% 8.82% 33.35% 33.54% -86.70%

Horizontal AnalysisBalance Sheet2014 Vs 2013

2013 Vs 2012

2012 Vs 2011

2011 Vs 2010

2010 Vs 2009

EquityShare capital 1051.11% -91.26% 0.51% 8.25% 134.94%Share premium 0.00% 6.80% 12.20% -100.00%Employee share option compensation reserve -1.82% 0.00% -100.00%Hedging reserve 189.49% -157.16% -192.20% -5591.84% -100.05%Remeasurement of post employment benefits - Actuarial loss 2.51% 0.00%Unappropriated profit / loss 48.81% 13.10% -263.48% -152.50% -79.72%

8.05% 6.47% 39.07% 41.22% -82.26%Non-Current LiabilitiesLong term finances -23.15% 18.33% 7.36% 21.30%Deferred liabilities -100.00% -45.98% -99.65%Derivative financial instruments -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%Current LiabilitiesCurrent portion of long term finances 55.58% -38.78% 262.54% 132.50% -75.31%Trade and other payables -4.35% 42.84% 0.65% 14.85% -35.44%Derivative financial instruments 185.16% 0.00% -100.00% -100.00%Accrued interest / mark-up on long term finances -15.39% -24.14% -17.89% 33.84%short term finance 491.00% 56.98% -67.45% 823.70% -98.88%Short term finances -100.00% -66.15%

60.17% 4.82% 27.59% 38.05% -60.57%Contingencies and Commitments Total Equity & Liabilities 6.88% 8.37% 33.35% 33.54% -86.70%

Conclusion

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