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Statement
Submitted By:
Haseeb Ahmed (58214)
Khizer Bin Saeed (58578)
Muhammad Sohail (58893)
Engro Foods Ltd
Introduction
o Engro Foods Limited was formed as awholly owned
subsidiary of Engro Corporation in 2005.
o It start its operation in 2006 and become major player in Food
industry.
o It launched multipleproducts:
• Ice Cream
• Flavored Milk
• Fruit Juices
• Milk Powders
Engro Foods Ltd
Vision Statement
Aim at transforming the company within the five years into first national food
industry giant, then into regional force and finally into a global player.
Mission Statement
Build branded food business to improve quality of life by offering tasty,
affordable and high nutritional products to our consumers while maximizing
stakeholder’s value.
Core values
• Ethics and integrity
• Health, safety and environment
• Innovation and risk-taking
• Our people
• Community and society
• Consumer Centric
Accounting Policies
Revenue recognition
The revenue can be measured reliably, on the following basis:
- sales are recorded on dispatch of goods to the customers
- return on deposits / bank balances is recognized on accrual basis.
Liquidity Management
Engro Foods Limited finances its operations through a combination of equity,
internal cash generation, and by means of cost effective short-term & long-
term borrowings.
Credit Rating
Engro Foods’ Sukkuk issue has been assigned a medium to long term credit
rating of ‘A+’ (Single A Plus) by JCR-VIS
Cash Flow Statement 2013 2012 2011 2010 2009
Cash Flows from Operating Activities
Cash received from customers 38,069 39,849 29,963 20,984 14,812
Cash paid for goods and services -34,104 -35,249 -27,563 -20,053 -14,324
Finance costs paid -854 -982 -938 -567 -531
Taxes paid -680 -333 -314 -193 -50
Retirement benefits paid -74 -71 -69 -16 -21
Net cash generated from operating activities 2,356 3,214 1,080 156 -113
Net increase in cash and cash equivalents -2,318 1,653 1,212 140 121
Cash & cash equivalents at beginning of the year 3,045 1,392 180 41 -80
Cash & cash equivalents at end of the year 727 3,045 1,392 180 41
Horizontal and Vertical analysis Profit and Loss Account
Sales 37891 -5.7 40169 34.5 29859 42.6 20945 42.8 14665
Cost of Sales 29718 -0.4 29848 28.5 23230 40.3 16552 38.5 11949
Gross profit 8173 -20.8 10321 55.7 6629 50.9 4393 61.7 2716
Distribution and marketing expenses 5017 7.8 4654 25.2 3716 27.6 2913 10.3 2640
Administrative expenses 966 21.4 796 57.6 505 6.8 473 36.3 347
Other Operating expenses 340 -20.9 430 105.7 209 58.3 132 187 46
Other income 324 -15.1 382 79.3 213 287.7 55 -68.8 176
Operating profit/(loss) 2174 -54.9 4823 100 2412 159.4 930 -760.6 -141
Other expenses 881 100
Finance cost 785 -13 903 -14 1049 59 660 28 515
Net profit before taxation 508 -87.1 3921 187.6 1363 404.1 270 -141.2 -656
Provision for taxation -297 -77.6 -1326 180.9 -472 399.6 -94 -142.4 223
Net profit after taxation 211 91.9 2595 191.2 891 406.5 176 -140.6 -433
Liquidity Ratios
Current ratio 1.7 2.1 1.8 1.5 1.3
Quick / Acid test ratio 0.9 1.2 0.9 0.5 0.6
Cash to Current Liabilities 0.1 0.1 0.1 0.1 0.1
Cash flow from Operations to Sales 0.1 0.1 0 0 0
Ratios
Ratios 2013 2012 2011 2010 2009
Activity / Turnover Ratios
No. of Days Inventory 40.4 37.5 37.1 35.9 36.7
No. of Days Receivables 1.5 1.1 0.8 0.7 0.4
No. of Days Payables 44.1 32.9 39.4 44.1 47
Operating cycle -2.2 5.6 -1.4 -7.5 -9.9
Inventory turnover 9 9.7 9.8 10.2 9.9
Debtors turnover 250.4 340.1 429.6 547.1 881.9
Creditors turnover 8.3 11.1 9.3 8.3 7.8
Total Assets turnover ratio / Fixed Assets
turnover ratio 1.6 1.8 1.8 1.7 1.6
6.00%
4.00%
0.00%
2009 2010 2011 2012 2013
-2.00%
-4.00%
Graphs
Current ratio
2.5
1.5
1 Current ratio
0.5
0
2009 2010 2011 2012 2013
Quick ratio
1.4
1.2
1
0.8
0.6 Quick ratio
0.4
0.2
0
2009 2010 2011 2012 2013
Graphs
Inventory turnover
10.5
10
9.5
9 Inventory turnover
8.5
8
2009 2010 2011 2012 2013
50.0%
40.0%
10.0%
0.0%
2009 2010 2011 2012 2013