2014

Engro Fertilizer
CompanyLimitedPa
[FORCASTED
kiatan

FINANCIAL
REPORT
OF
Assingnemetn of Syed Ali Abbas Shah
MBA(HRM)
ENGRO
FERTILIZER
Roll No 144
Submitted To Sir Asif Channa
LIMITED
PAKISTAN
13Shah Abdul Latif University
Khairpur
Meers Sindh
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.]

Engro Fertilizers Limited Pakistan

History
Our story begins with one companys 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 nations 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 Companys 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
Exxons 75% equity. This was, and perhaps still is, the most successful employee buy-out in Pakistans
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 Companys 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.

Company
Engro Fertilizers Limited is a wholly owned subsidiary of Engro Corporation and a renowned name in
Pakistans 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.
Engros 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 1.3a tremendous expansion in Engros urea
manufacturing facility went into production in November 2010 and looks set to end Pakistans 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 Engros 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 Pakistans 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 & Environment
For 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 Integrity

At 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 .

Leadership
We 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 Improvement

We 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 Profit

We 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 longterm profitability and growth. This winning attitude comes with a meaningful career security and growth and
profound personal development for each of us.

External & Community Involvement

We 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 Communications

We believe that excitement, satisfaction and recognition are essential elements of a creative and highperforming 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 & Fun

We 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 companys overall objectives and plans and of
the thinking behind them.

Innovation
Success 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 & Development

We 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 & Partnership

High-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 Focus

We 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
10,728
10,728
Reserves
2,912
Shareholders funds / Equity
18,616
13,640
Long term borrowings
64,160
Capital employed
Deferred liabilities
2,581
Property, plant & equipment
86,332 84,370
Long term assets
Current assets
13,423

12,228
12,841

5,070

25,069
55,896

10,728
7,889

15,798

51,482

59,398

83,889
82,176 88,001 86,452
4,655
3,381
4,521
79,315
79,562
30,366

82,878

83,124 86,540 84,631

14,381
14,337

Summary of Profit and Loss

Sales
Gross profit
16,733
8,910
Operating profit
6,556
Profit before tax
5,207
Profit/(loss) after tax
3,730
EBITDA
7,365

50,129
30,626 31,353 19,017
22,121
9,861
17,054
8,384

6,752

14,521

(3,952)

6,877

5,497
22,010

(2,935) 4,588
11,741

17,673

Summary of Cash Flows

Net cash flow from operating activities
4,359
Net cash flow from investing activities
(14,654)
Net cash flow from financing activities
12,903
Changes in cash & cash equivalents
2,609
Cash & cash equivalents Year end
3,318

Summary of Actual Production

24,813

6,371

(560) (1,857)
(5,821)
18,432 (406)
22,516

4,085

9,279
(3,517)

(4,920) (4,589)
1,173
4,491

Urea
971,913
NPK
100,270

1, 561, 5 75 974, 425 1,279,378

92,839

67,755

113,172