Group 6
Shafaqat Ali
Sobia Nazeer
Sumaira Waris
Farwa Akhtar
Introduction of engro foods
§
Engro stands for “energy for
growth”.
§
The company was incorporated in
1965
INTRODUCTION TO ENGRO FOODS
LIMITED
• Engro Foods Limited is a subsidiary of Engro
Corporation Limited.
• Its have been mo...
• Sales:
The revenue
has grown at a very rapid pace from 2006
level . This is primarily attributable to product
innovation...
• Distribution of Marketing Expenses:
In order to support continuous
growth trajectory, significant expenditure has
been i...
• Administration & other Expenses:
These expenses have increased
primarily due to larger support functions
required to man...
• Finanance Cost:
Finance costs increased with the
higher amount of long term borrowings due to
lowerings of interest of b...
Balance Sheet
• 1)Equity :
With time to
time capital injections from the parent
company and private placement 2011, The
sh...
• 1)Long Term Finances:
in order
to mention the growth momentum ,the
company continues to finance a portion of its
capital...
• 2) Deferred taxation
Due to taxation losses in earlier years of
operation , the company ‘s deferred tax liability has in...
• Non current Assets
•
• 1)Plant , property and equipment:
property , plant and
equipment has witnessed a very large incre...
• 3)Biological Assets:
This represents value of animals purchased
at the time of establishment of company dairy farm in Na...
• 6)Other Receivables
The increase in
receivables is primarily due to two factors
» Increase in sales tax refunds from the...
Verticle and horizental analysis of engro foods
Verticle and horizental analysis of engro foods
Verticle and horizental analysis of engro foods
Verticle and horizental analysis of engro foods
Verticle and horizental analysis of engro foods
Verticle and horizental analysis of engro foods
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Verticle and horizental analysis of engro foods

  1. 1. Group 6 Shafaqat Ali Sobia Nazeer Sumaira Waris Farwa Akhtar
  2. 2. Introduction of engro foods § Engro stands for “energy for growth”. § The company was incorporated in 1965
  3. 3. INTRODUCTION TO ENGRO FOODS LIMITED • Engro Foods Limited is a subsidiary of Engro Corporation Limited. • Its have been more than 40 years in fertilizer and chemical. • Engro Foods Limited was officially launched as a fully owned subsidiary of Engro in 2004. • Two processing plants at Sukkur and Sahiwal.
  4. 4. • Sales: The revenue has grown at a very rapid pace from 2006 level . This is primarily attributable to product innovation launch of new segment. • Gross Profit: Gross profit ratio has significantly improved from 7.2% in 2007 is 25.7% in 2012.The significant in gross profit is consequence of efficiency in production and economies of scale due to exponential growth in business volume.
  5. 5. • Distribution of Marketing Expenses: In order to support continuous growth trajectory, significant expenditure has been incurred for brand building which led to manifold increase in marketing costs . with many brands now in a very established position , the marketing cost now stand at 12% of revenue in 2012 compared to 26% in 2007.
  6. 6. • Administration & other Expenses: These expenses have increased primarily due to larger support functions required to manage the business growth . the expenses under these heads are mostly fixed in nature and therefore, have witnessed reduction in reiation to revenue.
  7. 7. • Finanance Cost: Finance costs increased with the higher amount of long term borrowings due to lowerings of interest of borrowing. • Provision of taxation: Directly attributable to increase in profitability.
  8. 8. Balance Sheet • 1)Equity : With time to time capital injections from the parent company and private placement 2011, The share capital has reached to 8.4 million in 2012 from Rs. 2.2 billion in 2006 .The company incurred losses in earlier years . However the recent profit has significantly increased company overall equity position.
  9. 9. • 1)Long Term Finances: in order to mention the growth momentum ,the company continues to finance a portion of its capital requirements by raising long term loans .Therefore the long term loans have significantly increased over years . The ratio of long term loans to equity has gone down to 38:62in 2012 compared to 55:45 in 2007.The company has been able to reduce this ratio due to its higher cash generation capacity.
  10. 10. • 2) Deferred taxation Due to taxation losses in earlier years of operation , the company ‘s deferred tax liability has increased significantly. • Current Liabilities • 1)current portion of Long term finances: The increase is consequential to higher borrowing. • 2)Trade Payable: Trade payables quadrupled over the years in line with the rising business volume. • 3)Accrued interest: Increase in borrowings over the years has led to high year end accruals for financing obligations
  11. 11. • Non current Assets • • 1)Plant , property and equipment: property , plant and equipment has witnessed a very large increase over the year . This is due to continuous investment in production facilities and infrastructure to support growing scale of business. • • 2)Long term investment: In 2009 and 2010,the Engro food is invested in rice processing . The subsidiary was later sold to another group company as part of group strategy.
  12. 12. • 3)Biological Assets: This represents value of animals purchased at the time of establishment of company dairy farm in Nara. • • 5)Advance against shares of Engro Foods Natherland: This represents advance paid to Engro corps for the purchase of shares Engro foods Natherland . The company is already managing the al Safa business in America and Canada markets. • 5)Stock in Trade: • The increase in line with the continuous increase in overall business volume . On average, the company maintains at least a months inventory to meet sales demand and production requirements.
  13. 13. • 6)Other Receivables The increase in receivables is primarily due to two factors » Increase in sales tax refunds from the government arising mainly on input tax paid at the time of imports. » Increase in receivable from Tetra under cost sharing arrangements . This is the direct consequence of increase in business volume. • 7)Short term Investment / cash: Cash and short term investments were retained in 2010 & 2011 to finance upcoming commitments.

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