Fianl Project

8/3/2019 Fianl Project

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Final Project of Financial

Management

2011

FINANCIAL MANAGMENT

TOPIC: PROJECT ON

Fauji Fertilizer Company & Engro Corporation limited

Submitted To:

PROF. MUZAFFAR ASAD

Submitted By:


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Syed Nouman Ali L1F10MCOM0145

Rabia Shahid L1F10MCOM0124

Asma Arif L1F10MCOM0123

Section: C

DUE DATE: 13 June, 2011

Contents

Acknowledgement.....................................................................................................2

Meaning of ratio analysis:.........................................................................................3

Types of ratio comparisons.......................................................................................3

Cross-sectional analysis......................................................................................4

Time -series analysis...........................................................................................4

Groups of financial ratios..........................................................................................4

FAUJI FERTILIZER CORPORATION (FFC).........................................................5

History.......................................................................................................................5

Awards of FFC..........................................................................................................5


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Mission Statement.....................................................................................................6

Corporate Vision.......................................................................................................8

RATIO ANALYSIS..................................................................................................9

BALANCE SHEET.................................................................................................23

INCOME STATEMENT........................................................................................25

ENGRO CORPORATION......................................................................................26

RATIO ANALYSIS...................................................................................................29

BALANCE SHEET.................................................................................................42

INCOME STATEMENT........................................................................................44

INCOME STATEMENT


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Acknowledgement

We have the pearl of our eyes to admire blessing of the compassionate and omnipotent because

the words are bound, knowledge is limited and time is short to express His dignity. It is one of

the infinite blessings of almighty ALLAH that He bestowed us with potential and ability to

complete the present training and make a material contribution towards the deep oceans of

knowledge.

First we avail this opportunity to bow our head before ALLAH almighty in humility who given

us the wisdom and perseverance for completing this piece of report.

We invoke peace for Holy Prophet Muhammad (S.A.W.) who is forever torch. We feel highly

privilege to ascribe the most and ever burning flame of my gratitude and deep scene of devotion

to the Prof. Muzaffar Asad who taught us Financial Management project

with heart and also gave a guideline to this report.


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Financial managers are always concerned with taking important decisions about the businesses

of their organization. They have to consider each and every transaction of their business in order

to keep track of changes in the equity. They have to present such a picture of their organization

as would facilitate investors to invest in the company.

Ratio analysis is one of the facilitative tools making the actual state of affairs of the business

more comprehensive and explicable for the investors and potential users of the books of accounts

of the company.

Throughout this semester, I am conducting the ratio analysis of Engro And Fauji Fertilizer. both

are pronounced companies of Pakistan. It is considered as the benchmark in power industry. In

this project, we will be focusing on a brief introduction of the company followed by its ratio

analysis.

In designing this project, the key source of information has been the financial statements of the

company. I have put up all my efforts in bringing out the true picture of both companies and

making this project a true replica of the actual state of affairs of the company.


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MEANING OF RATIO ANALYSIS:

Ratio analysis is the method or process by which the relationship of items or group of

items in the financial statement are computed, determined and presented.

Ratio analysis is an attempt to derive quantitative measure or guides concerning the

financial health and profitability of business enterprises. Ratio analysis can be used both in trend

and static analysis. There are several ratios at the disposal of an analyst but their group of ratio

he would prefer depends on the purpose and the objective of analysis.

While a detailed explanation of ratio analysis is beyond the scope of this section, we will focus

on a technique, which is easy to use. It can provide you with a valuable investment analysis tool.

This technique is called cross-sectional analysis. Cross-sectional analysis compares financial

ratios of several companies from the same industry. Ratio analysis can provide valuable

information about a company's financial health. A financial ratio measures a company's

performance in a specific area. For example, you could use a ratio of a company's debt to its

equity to measure a company's leverage. By comparing the leverage ratios of two companies,

you can determine which company uses greater debt in the conduct of its business. A company

whose leverage ratio is higher than a competitor's has more debt per equity. You can use this

information to make a judgment as to which company is a better investment risk.


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However, you must be careful not to place too much importance on one ratio. You obtain a

better indication of the direction in which a company is moving when several ratios are taken as

a group.

Types of ratio comparisons

There are two major types of ratio comparisons:

Cross-sectional analysis

Time series analysisCross-sectional analysis

Cross-sectional analysis is the comparison of different firms financial ratios at the same point in

time; comparing the firms ratio to those firms in its industry or to industry averages. Frequently,

a firm will compare its ratio values to those of its key competitors of group of competitors that

firm wishes to evaluate.

Time -series analysis

Time series analysis is applied when a financial analyst evaluates performance overtime.

Comparison of current to past performance, using ratio analysis, allows the firm to determine

whether it is progressing as planned. Developing trends can be seen by using multi year

comparison and knowledge of these trends should assist the firm in planning future operations.

Groups of financial ratios

Liquidity ratios

Activity ratios

Debt analysis ratios

Profitability ratios


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Marketability ratio


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FAUJI FERTILIZER CORPORATION (FFC)

AWARDS OF FFC


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Introduction

With a vision to acquire self - sufficiency in fertilizer production in the country, FFC was

incorporated in 1978 as a private limited company. This was a joint venture between Fauji

Foundation (a leading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark.

The initial share capital of the company was 813.9 Million Rupees. The present share capital of

the company stands above Rs. 8.48 Billion. Additionally, FFC has more than Rs. 8.3 Billion as

long term investments which include stakes in the subsidiaries FFBL, FFCEL and associate

FCCL.


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FFC commenced commercial production of urea in 1982 with annual capacity of 570,000 metrictons.

Through De-Bottle Necking (DBN) program, the production capacity of the existing

plant increased to 695,000 metric tons per year.

Production capacity was enhanced by establishing a second plant in 1993 with annual

capacity of 635,000 metric tons of urea.

FFC participated as a major shareholder in a new DAPS/Urea manufacturing complex

with participation of major international/national institutions. The new company Fauji

Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited)

commenced commercial production with effect from January 01, 2000. The facility is

designed with an annual capacity of 551,000 metric tons of urea and 445,500 metrictons of DAP, revamped to 670,000 metric tons of DAP.

In the year 2002, FFC acquired ex Pak Saudi Fertilizers Limited (PSFL) Urea Plant

situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation

(NFC) through privatization process of the Government of Pakistan. It has annual

production capacity of 574,000 metric tons urea which has been revamped to 718,000

metric tons urea in 2009.

This acquisition at Rs. 8,151 million represented the largest industrial sector

transactions in Pakistan at that time.

Mission Statement

FFC is

committed to play its leading role in industrial and agricultural advancement in Pakistan by


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providing quality fertilizers and allied services to its customers and given the passion to excel,take on fresh challenges, set new goals and take initiatives for development of profitable

business ventures.


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Corporate Vision

FFC's vision for the 21st Century remains focused on harmonizing the Company with fresh

challenges and encompasses diversification and embarking on ventures within and beyond the

territorial limits of the Country in collaboration with leading business partners.


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RATIO ANALYSIS

ASSETS TEST RATIO :

NO.OF YEARS 2006 2007 2008 2009 2010

ASSETS TESTRATIO

0.966853

0.157412

0.053526

0.021681

0.033736

1. Quick ratio or acid test ratio

This is a ratio between quick current assets and current liabilities (alternatively quick

liabilities).

It is calculated by dividing quick current assets by current liabilities (quick current

liabilities)

Quick ratio = quick assets where

Current liabilities/(quick liabilities)

Conventionally a quick ratio of 1:1 is considered satisfactory.

Current Ratio:

NO OF YEARS 2006 2007 2008 2009 2010

Direct

Financ

Chief Fia

Office

Mana

Hum

Mana

Supply

Manage

& Plan

Comp

Secre


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CURRENT RATIO 0.893458 0.942059 0.821195 0.835498 0.83699

2. Current ratio

It is calculated by dividing current assets by current liabilities.

Current ratio = current assets

Current liabilities

Conventionally a current ratio of 2:1 is considered satisfactory

Cash to Current Assets:

NO.OF YEARS 2006 2007 2008 2009 2010

CASH TOCURRENTASSETS

0.009775

0.007762

0.014104

0.008729

0.019524


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3. Current assets

Include

Inventories of raw material, finished goods,

Stores and spares,

Sundry debtors/receivables,

Short term loans deposits and advances,

Cash in hand and bank,

Prepaid expenses,

Incomes receivables and

Marketable investments and short term securities.

Cash t o Current Liabilities :

NO.OF YEARS 2006 2007 2008 2009 2010

CASH TOCURRENT

LIABILITIES

0.008715

0.007312

0.011582

0.007293

0.016341


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5. Debtors turnover ratio

This ratio is a test of the liquidity of the debtors of a firm. It shows the relationship between

credit sales and debtors.

Debtors turnover ratio =

Credit sales average debtors and bills receivables

Debt to Equity:

NO.OF YEARS 2006 2007 2008 2009 2010

DEBT TO EQUITY1.120572

1.297024

1.598161

1.946818

1.787553


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6. Debt equity ratio

This ratio indicates the relative proportion of debt and equity in financing the assets of the

firm. It is calculated by dividing long-term debt by shareholders funds.

Debt equity ratio = long-term debts where

Shareholders funds

Generally, financial institutions favor a ratio of 2:1.

However this standard should be applied having regarded to size and type and nature of

business and the degree of risk involved.

L T D TO CAPITALIZATION :

NO.OF YEARS 2006 2007 2008 2009 2010

L T D TOCAPITALIZATION

0.216952

0.283413

0.388653

0.367907

0.312916


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7. Debt to total capital ratio

In this ratio the outside liabilities are related to the total capitalization of the firm. It

indicates what proportion of the permanent capital of the firm is in the form of long-term

debt.

Debt to total capital ratio = long- term debt

Shareholders funds + long- term debt

Conventionally a ratio of 2/3 is considered satisfactory.

Interest Ratio:

NO.OF YEARS 2006 2007 2008 2009 2010

INTERST RATIO14.93

5712.22182

12.92613

14.81794

16.00804


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8. Interest coverage ratio

This ratio measures the debt servicing capacity of a firm in so far as the fixed interest on

long-term loan is concerned. It shows how many times the interest charges are covered by

edit out of which they will be paid.

Interest coverage ratio = edit

Interest

A ratio of 6 to 7 times is considered satisfactory. Higher the ratio greater the ability of the

firm to pay interest out of its profits. But too high a ratio may imply lesser use of debt

and/or very efficient operations

Payable Turnover Ratio:

NO.OF YEARS 2006 2007 2008 2009 2010PAYABLE TURNOVER RATIO

1.394212

1.109039

0.928742

0.805486

0.916602


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9. Creditors turnover ratio

This ratio shows the speed with which payments are made to the suppliers for purchases

made from them. It shows the relationship between credit purchases and average creditors.

Creditors turnover ratio =

Credit purchases average creditors & bills payables

Total Assets Turnover:

NO.OF YEARS 2006 2007 2008 2009 2010

TOTAL ASSETSTURN OVER

1.090103

0.972224

0.958452

0.938046

0.39401

10.Asset turnover ratio

Depending on the different concepts of assets employed, there are

Many variants of this ratio. These ratios measure the efficiency of a firm in managing and

utilizing its assets.

Total asset turnover ratio = sales/cost of goods sold


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Average total assets

Fixed asset turnover ratio = sales/cost of goods sold

Average fixed assets

Capital turnover ratio = sales/cost of goods sold

Average capital employed

Working capital turnover ratio = sales/cost of goods sold

Net working capital

GROSS PROFIT MARGIN :

NO.OF YEARS 2006 2007 2008 2009 2010

GROSS PROFITMARGIN

0.324153

0.355886

0.403955

0.432709

0.435972

11.Gross profit margin

This ratio is calculated by dividing gross profit by sales. It is expressed as a percentage.

Gross profit is the result of relationship between prices, sales volume and costs.


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Gross profit margin = gross profit x 100 net sales

A firm should have a reasonable gross profit margin to ensure coverage of its operating

expenses and ensure adequate return to the owners of the business i.e. the shareholders.

To judge whether the ratio is satisfactory or not, it should be compared with the firms past

ratios or with the ratio of similar firms in the same industry or with the industry average.

NET PROFIT MARGIN :

NO.OF YEARS 2006 2007 2008 2009 2010

NET PROFITMARGIN

0.154792

0.189277

0.156151

0.24398

0.245772

12.Net profit margin

This ratio is calculated by dividing net profit by sales. It is expressed as a percentage.

This ratio is indicative of the firms ability to leave a margin of reasonable compensation to

the owners for providing capital, after meeting the cost of production, operating charges and

the cost of borrowed funds.

Net profit margin =

Net profit after interest and tax x 100

Another variant of net profit margin is operating profit margin which is calculated as:


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Operating profit margin =

Net profit before interest and tax x 100

Higher the ratio, greater is the capacity of the firm to withstand adverse economic

conditions and vice versa

RETURN ON INVESTMENT :

NO.OF YEARS 2006 2007 2008 2009 2010RETURN ONINVESTMENT

0.168739

0.184019

0.149663

0.228865

0.096836

13.Return on assets

This ratio measures the profitability of the total funds of a firm. It measures the relationship

between net profits and total assets. The objective is to find out how efficiently the total

assets have been used by the management.

Return on assets =

Net profit after taxes plus interest x 100

Total assets

Total assets exclude fictitious assets. As the total assets at the beginning of the year and end

of the year may not be the same, average total assets may be used as the denominator.


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RETURN ON EQUITY :

YEARS2006 2007 2008 2009 2010

RETURN ONEQUITY

0.357823

0.422697

0.388482

0.067442

0.713955

14.Return on shareholders equity

This ratio measures the relationship of profits to owners funds. Shareholders fall into two

groups i.e. Preference shareholders and equity shareholders. So the variants of return on

shareholders equity are

Return on total shareholders equity =

Net profits after taxes x 100

Total shareholders equity

Total shareholders equity includes preference share capital plus equity share capital plus

reserves and surplus less accumulated losses and fictitious assets. To have a fair


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representation of the total shareholders funds, average total shareholders funds may be

used as the denominator

BALANCE SHEET

2006 2007 2008 2009 2010

ASSETS

NON-CURRENT ASSETSProperty, plant and

ipment960795

7103904

901273081

31399351

81593358

8

Good will

156923

4

156923

41569234 1569234 1569234

Long term Investment640938

2632512

97744779 7727528

78700727

Long term loans andantages

76647 142782 163102 337541 455328

Long term deposit andpayments

2474 2144 1524 6305 9037

other assets 45000 0 0 0


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17710694

18429779

22209452

23634126

96667914

CURRENT ASSETS

Store spare losses tools220205

3240798

83034268 2996633 2440201

Stock in trade 952905 642836 258094 144087 211720

Trade debts961427

1722602

495929 256886 357956

Loan and advantages 95245 83917 136944 130219 336269

deposit and prepayments 25488 33665 107369 37653 50188

other receivable

145139

0

154276

31233479 734062 617664

short term investment245285

0302766

43511563 6768568

12020581

cash and bank balances162322

9135000

0931865 3849348 1189063

Total Current Assets976458

7108114

359709511

14917456

17223642


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Total Assets 27475281

29241214

31918963

38551582

113891556


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EQUITY ANDLIABILITIES

Issued, subscribed

paid up sharetal

4934742

4934742

4934742 6785271 6785271

Capital Reserves 160000 160000 160000 160000 160000

Revenueerves

7861801

7635303 7190471 6137171 8502276

Total Equity129565

43127300

45122852

131308244

21544754

7

NON-CURRENTLIABILITIES

Long termowing

1193750

2671250

5378214 4578809 3819405

deferred liabilities239600

0236352

6243189

5 3035757 3215821


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INCOME STATEMENT

2006 2007 2008 2009 2010

Sales 299508732842900

530592806 36163174

44874359

Cost of Goods Sold 202421941831152

518234692 20515044

25310406

Gross Profit 97086791011748

012358114 15648130

19563953

Distribution Cost 2746782 2418793 2668571 3174505 3944473

Other Operating

enses735331 845327 895647 1272448 1376000

3482113 3264120 3564218 4446953 5320473

6226566 6853360 8793896 112011771424348

0

Other Operating Income 1259819 1658000 194558 2800987 3153110


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GainSale onestment

Profit Fromerations

7486385 8511360 8988454 140021641739659

0

Finance Cost 501241 696407 695371 944947 1086741

Profit Before Taxation 6985144 7814953 8293083 130572171630984

9

Provision For Taxation 2349000 2434000 3516000 4234111 5281000

Profit After Taxation 4636144 5380953 4777083 88231061102884

9


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ENGRO CORPORATION


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AWARD

INTRODUCTION

Engro is one of Pakistans most progressive, growth oriented organizations, yet we never forget

where we came from. Our history is a part of who we are today. Our diverse range of companies

represents our rich legacy of innovation and growth.

Engro Corporation Limited is one of Pakistans largest conglomerates with businesses rangingfrom fertilizers to power generation.

In the interest of better managing and overseeing businesses of subsidiaries and affiliates that arecurrently part of Engros capital investments, Engro Chemical Pakistan Limited converted into aholding company structure. As part of this process, two major changes occurred with effect fromJanuary 1, 2010; Engro Chemical was renamed as Engro Corporation Limited and it demergedand transferred its fertilizer business into a separate wholly owned subsidiary, Engro FertilizersLimited.

Currently Engro Corporations portfolio consists of seven businesses which include chemical

fertilizers, PVC resin, a bulk liquid chemical terminal, industrial automation, foods, powergeneration and commodity trade.


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Besides providing the long term vision for the company and overseeing performance of thesubsidiaries and affiliates, Engro Corporation Limited is also responsible for allocation ofcapital, management of talent, leadership development, HR guiding policies, leadership role inpublic relations and CSR activities, control structures, legal and IT support.

From its inception as Esso Pakistan Fertilizer Limited in 1965 to Engro Corporation Limited in2010, Engro has come a long way and will continue working towards its vision of becoming apremier Pakistani company with a global reach.

CULTURE

Engro is about the people who are a part of us. Our culture is dynamic and energetic, withemphasis on our core values and loyalty of our employees. Our work environment promotesleadership, integrity, teamwork, diversity and excellence.

The tone for our corporate culture and the importance of employees was set after the Companywas bought out by employees in 1991. As the Company grows, we are determined to keep our

culture open and transparent, and inclusive for all our employees.

DIFFRENCE BUSINESS

Our diversified businesses represent our immense growth potential to generate opportunities forcreating and sustaining value for our stakeholders.

Engro Fertilizers LimitedEngro Foods Limited

Engro Polymer & Chemicals Limited


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Engro Powered LimitedEngro EXIMP Private LimitedEngro Vopak Terminal Limited


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RATIO ANALYSIS

CURRENT RATIO :

NO.OF YEARS 2006 2007 2008 2009 2010

CURRENT RATIO7.468622

0.92006

2.007253

0.73266

0.073614


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15.Current ratio

It is calculated by dividing current assets by current liabilities.

Current ratio = current assets where

Current liabilities

Conventionally a current ratio of 2:1 is considered satisfactory

ASSETS TEST RATIO :

NO.OF YEARS 2006 2007 2008 2009 2010

ASSETSTESTRATIO

0.168678

0.049917

0.332092

0.106089

0.002094

16.Quick ratio or acid test ratio


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This is a ratio between quick current assets and current liabilities (alternatively quick

liabilities).

It is calculated by dividing quick current assets by current liabilities (quick current

liabilities)

Quick ratio = quick assets where

Current liabilities/(quick liabilities)

Conventionally a quick ratio of 1:1 is considered satisfactory.

CASH TO C.A :

NO.OF YEARS 2006 2007 2008 2009 2010

CASH TO C.A0.022585

0.054254

0.157705

0.13668

0.018203

17.Current assets

Include

Inventories of raw material, finished goods,

Stores and spares,


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Sundry debtors/receivables,

Short term loans deposits and advances,

Cash in hand and bank,

Prepaid expenses,

Incomes receivables and

Marketable investments and short term securities.

CASH TO C.L :

NO.OF YEARS 2006 2007 2008 2009 2010

CASH TO C.L0.168678

0.049917

0.316555

0.10014

0.00134

18.Current liabilities

Include

Sundry creditors/bills payable,

Outstanding expenses,

Unclaimed dividend,


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Advances received,

Incomes received in advance,

Provision for taxation,

Proposed dividend,

Installments of loans payable within 12 months,

Bank overdraft and cash credit

Debt to equity

NO.OF YEARS 2006 2007 2008 2009 2010

Debt to equity1.967592

1.305924

1.715199

4.034711

3.802106

19.Debt equity ratio

This ratio indicates the relative proportion of debt and equity in financing the assets of the

firm. It is calculated by dividing long-term debt by shareholders funds.

Debt equity ratio = long-term debts where

Shareholders funds

Generally, financial institutions favor a ratio of 2:1.


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However this standard should be applied having regarded to size and type and nature of

business and the degree of risk involved.

L.T.D.TO CAPITALIZATION :

NO.OF YEARS 2006 2007 2008 2009 2010

L.T.D.TOCAPITALIZATION

0.631344

0.186259

0.588519

0.764511

0.061648

20.Debt to total capital ratio

In this ratio the outside liabilities are related to the total capitalization of the firm. It

indicates what proportion of the permanent capital of the firm is in the form of long-term

debt.

Debt to total capital ratio = long- term debt

Shareholders funds + long- term debt

Conventionally a ratio of 2/3 is considered satisfactory.


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INTREST RATIO :

NO.OF YEARS 2006 2007 2008 2009 2010

INTREST RATIO10.50102

8.916505

4.449141

3.52158

10.49967

21.Interest coverage ratio

This ratio measures the debt servicing capacity of a firm in so far as the fixed interest on

long-term loan is concerned. It shows how many times the interest charges are covered by

edit out of which they will be paid.

Interest coverage ratio = edit

Interest

A ratio of 6 to 7 times is considered satisfactory. Higher the ratio greater the ability of the

firm to pay interest out of its profits. But too high a ratio may imply lesser use of debt

and/or very efficient operations


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PAYABLE TURN OVER RATIO :

NO.OF YEARS 2006 2007 2008 2009 2010

PAYABLE TURN

OVER RATIO

0.701

125

0.845

131

0.474

11

0.309

47

0.181

204

22.Creditors turnover ratio

This ratio shows the speed with which payments are made to the suppliers for purchases

made from them. It shows the relationship between credit purchases and average creditors.

Creditors turnover ratio =

Credit purchases average creditors & bills payables


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ASSETS TURNOVER :

NO.OF YEARS 2006 2007 2008 2009 2010

ASSETSTURNOVER

0.612249

0.60758

0.407895

0.321969

0.262487

23.Asset turnover ratio

Depending on the different concepts of assets employed, there are

Many variants of this ratio. These ratios measure the efficiency of a firm in managing and

utilizing its assets.

Total asset turnover ratio = sales/cost of goods sold

Average total assets

Fixed asset turnover ratio = sales/cost of goods sold

Average fixed assets

Capital turnover ratio = sales/cost of goods sold

Average capital employed

Working capital turnover ratio = sales/cost of goods sold

Net working capital


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GROSS PROFIT :

NO.OF YEARS 2006 2007 2008 2009 2010

GROSS PROFIT0.240727

0.212241

0.265751

0.229731

0.453421

24.Gross profit margin

This ratio is calculated by dividing gross profit by sales. It is expressed as a percentage.

Gross profit is the result of relationship between prices, sales volume and costs.

Gross profit margin = gross profit x 100 net sales

A firm should have a reasonable gross profit margin to ensure coverage of its operatingexpenses and ensure adequate return to the owners of the business i.e. the shareholders.

To judge whether the ratio is satisfactory or not, it should be compared with the firms past

ratios or with the ratio of similar firms in the same industry or with the industry average.


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NET PROFIT :

NO.OF YEARS 2006 2007 2008 2009 2010

NET PROFIT0.144717

0.136072

0.181858

0.068682

0.344249

25.Net profit margin This ratio is calculated by dividing net profit by sales. It is expressed as a percentage.

This ratio is indicative of the firms ability to leave a margin of reasonable compensation to

the owners for providing capital, after meeting the cost of production, operating charges and

the cost of borrowed funds.

Net profit margin =

Net profit after interest and tax x 100

Another variant of net profit margin is operating profit margin which is calculated as:

Operating profit margin =

Net profit before interest and tax x 100

Higher the ratio, greater is the capacity of the firm to withstand adverse economic

conditions and vice versa


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RETURN ON INVESTMENT :

NO.OF YEARS 2006 2007 2008 2009 2010

RETURN ONINVESTMENT

0.088603

0.082675

0.074179

0.022114

0.090361

26.Return on assets

This ratio measures the profitability of the total funds of a firm. It measures the relationshipbetween net profits and total assets. The objective is to find out how efficiently the total

assets have been used by the management.

Return on assets =

Net profit after taxes plus interest x 100

Total assets

Total assets exclude fictitious assets. As the total assets at the beginning of the year and end

of the year may not be the same, average total assets may be used as the denominator.

RETURN ON EQUITY :


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NO.OF YEARS 2006 2007 2008 2009 2010RETURN ONEQUITY 0.262

9380.190641

0.201411

0.111335

0.433922

27.Return on shareholders equity

This ratio measures the relationship of profits to owners funds. Shareholders fall into two

groups i.e. Preference shareholders and equity shareholders. So the variants of return on

shareholders equity are

Return on total shareholders equity =

Net profits after taxes x 100

Total shareholders equity

Total shareholders equity includes preference share capital plus equity share capital plus

reserves and surplus less accumulated losses and fictitious assets. To have a fairrepresentation of the total shareholders funds, average total shareholders funds may be

used as the denominator


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Management

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BALANCE SHEET


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Management

2011

2006 2007 2008 2009 2010

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment6557603

13811683

33552912

69517512

9861781

Intangible Asset 18062 133867 122858 122704 12260

Long term investment3657596

7764482

11091857

12988657

2613670

Deferred employeepensation expenses

0 0 136071 2787 589

Long term loans and advances 63109 49421 218820 328907 162351

10296370

21759453

45122518

82960567

12650652

CURRENT ASSETS

Stores and spares 688568 740873 800091 961117 101579

Stock in trade923448

2690153

4680896

422607 46740

Trade debts 623349

140888

5 261508

251442

5 241345Deferred employee

0 0 93213 87278 7872


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Management

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Management

2011

EQUITY ANDBILITIES

Issued, subscribed andpaid up share capital

2000000 3000000 2128161 2979426 327736

share premium1068369 3963977 7152722 1055061

105500

Hedging reserve 0 1037386 127307 288258 7481

General reserve 4429240 4429240 4429240 4429240 442924

unapporiated profit 2190148 4116622 6911124 9250972 872215Employee share

pensation 0 0 305052 609719 89091

Total Equity 96877571654722

5 21053606 18612676279445

NON-CURRENTBILITIES

Borrowing 15422520 1800000 27756714 58565354 9742Derivate financial

rument 0 0 918050 612842 52148

Deferred liabilities 1127139 1948980 1319432 988169 99719

Employee housing subsidy 0 0 73319 211785 31567Retirement and others

efits 41165 38560 44265 47581 155


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Management

2011

INCOME STATEMENT


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Management

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2006 2007 2008 2009 2010

Sales 17601738 231832222331719

830171520 3522386

Cost of Goods Sold 13364529 182627931712063

523240176 1925263

Gross Profit 4237209 4920429 6196563 6931344 1597123

Distribution Cost 1481730 1641724 1657815 1945176 242521

Administrative Expenses 0 0 0 0 38865

Other Operatingenses

287176 339430 579556 424110 3877

1768906 1981154 2237371 2369286 285263

2468303 2939275 3959192 4562058 1311859

Other Operating Income 1338854 1831260 2754330 88467 43394

Profit Fromerations

3807157 4770535 6713522 4650525 1355254

Finance Cost 362551 535023 1508948 1320579 129075

Profit Beforeation

3444606 4235512 5204574 3329946 1226178

Provision For Taxation 897330 1080929 964144 1257696 13601


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Management

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1 www. engro.com

2 www.fauji fertilizer.com

3 fauji fertilizer site:wikipedia.org

4 engro site:wikipedia.org

Documents

Fianl Project