Introduction

o Engro Corporation Limited (formerly known as .Engro

Chemical Pakistan Limited.) is one of the largest industrial
corporations in Pakistan.
o It operates in various sectors
• Fertilizer
• Food
• Energy
• Chemical
• Business Automation Solutions

Engro Corporation
o It is a public sector company listed on KSE.
o The current share market price of Engro Corporation
Limited, as of June 10, 2011 is PKR 187/- per share.
o It start is operation in 1957 as an Esso/Mobil joint venture.
o It has following business units
• Engro Polymer
• Engro Energy
• Engro Fertilizer
• Engro Foods
• Engro Foods Supply Chain

Engro Foods Ltd

Introduction
o Engro Foods Limited was formed as a wholly owned subsidiary of Engro Corporation in 2005.
o It start its operation in 2006 and become major player in Food industry.

BRIEF INTRODUCTION OF ENGRO FOOD LIMITED:

Engro Foods Limited (EFL) has been established in 2005 as part of a diversification process at
the Engro Group. EFL is a 100% Subsidiary of Engro Chemical Pakistan Limited. The plant
located at Sukkur on 23-acre land, has the raw milk reception capability of 300,000 liters per day

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and UHT milk capacity of 200,000 liters per day. The plant has been established at a cost of Rs.
1 billion, which provides direct employment to 750 people. Engro Foods has entered the Food
business through milk processing and sale with the company’s vision to pursue growth
opportunities based on country fundamentals and own strength. It also positions the company to
leverage its corporate social responsibility initiatives and work closely with rural communities to
promote integrated farming and livestock development. This effort is expected to play a pivotal
role in poverty alleviation and improving livelihoods of the poor in th in the milk collection
areas. Engro Foods will work with the Pakistan Poverty Alleviation Fund and its three partner
organizations to help implement sustainable business models that increase farmer’s profitability
and develop a positive social and business climate for growth and expansion of livestock and
other forms of value added agriculture.
Founded in March 2006, Engro Foods Limited is a producer and marketer of dairy products. The
company’s brands include Olpers Milk, Omore ice cream, and Tarang, Olwell, and Olpers
cream.
To support these brands and their highest standards of quality, Engro Foods has invested heavily
in milk processing and milk collection infrastructure. Headquartered in Karachi, Pakistan, it has
offices in seven cities across the country, as well as processing plants at Sukkur and Sahiwal.
Engro
Foods is a subsidiary of Engro Corporation Limited, one of Pakistan’s most respected enterprises
with more than 40 years of business in the fertilizer and chemicals industry. In the five years
since
its launch, Engro Foods has seen a rapid growth in sales and market share.
ENGRO FOODS LIMITED is the 100% owned subsidiary of ENGRO. The company's milk
production capacity is 700k litters per day. Moreover an investment plan of $ 3.4 billion in Engro
Foods has been approved by the board for: expanding UHT capacity to 900k liter per day,
expanding milk powder capacity to 70 kilo per day, import of 1000 cows and an ice cream plant.
The company is all set for growth as the milk business profitability is increasing due to
increasing consumption of milk and increasing prices of dairy products. Besides selling milk, the
company also sells the related products such as creams and unbranded products such as ghee,
and recently introduced a milk whitener; namely "Tarang". The value of the ENGRO FOODS
LIMITED is Rs.36 in total subsidiaries value of 63.4.

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o It launches multiple products
• Ice Cream
• Flavored Milk
• Fruit Juices
• Milk Powders

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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. ”

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.”

Objectives and goals:

Engro Foods main objectives are to supply everyone their favorite Olper’s Milk
To satisfy the consumer need and wants.
To increase the value for the stakeholders and company value.
Engro food want to be the major player in the food industry.

Market Segmentation:
 Demographic Segmentation
 Psychographic Segmentation

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Board of Directors:
The board of director committee meets at least once every quarter to review the financial
standing of the company, the business polices. The president handle the meeting and
review the stakeholders standing and other business policies and discuss the matters with other
directors.
Engro’s Board of Directors includes eight non-executive directors and five executive directors,
who share the collective responsibility of ensuring that the affairs of the organization are
managed competently and with integrity. The Board has been reconstituted as of April 2009,
supplementing the number of non-executive directors.

Corporate Level Strategy:

Engro Foods is horizontally integrated itself and increase its number of products. At this time
company has a lot number of products in the market.

Business Level Strategy:

Engro Foods wants to achieve more market share than other competitors. In order to achieve the
more competitive advantage company uses the differential strategy by differentiate its products
from other competitors. Engro Foods differentiate itself in the form of taste, quality and
availability of their product in the market.

 Functional Level Strategy:

Marketing Strategy:
Financial Strategy:
 HRM Strategy:

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SWOT Analysis
Strengths: (internal)
 Good relationship with farmers.
 Positive response from customers.
 Strong consumer and product research.
 Third generation plant.
Weaknesses: (internal)
 Engro food is not having it’s own dairy forms. Company gets milk from farmers.
 Engro foods totally depends on the Tetra Packs for the packing of their entire dairy products.
 Engro foods have 34 out of 40 milk collection centers are located in punjab, whereas its only
milk processing facility is situated near sukkhur(Sindh).
 When engro food launshed its first dairy product, Olper’s Milk
on March 20, 2006. But Engro Foods brand portfolio still consists of just 3 products that is
Olper’s Milk, Olwell Milk and Olper’s Cream
Opportunities: (external)
 Increases in funding by government.
 Increased in consumption of PM (processed milk)
 Awarreness.
 Third Largest Milk Producing Country.
Threats: (external)
 Competition
 Perceptions and Price Differential

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DEPARTMENTS OF ENGRO FOODS
Administration
Efficient management of all administrative affairs of Engro Foods Limited is the job of the
administration department. From legal matters to general day to day operations of the office, the
Administration department ensures that all affairs run smoothly.
Finance and Accounts
The finance and accounts departments at Engro Foods are responsible for the total financial
management of the different businesses of the company. From the usual accounting statements
and sheets to risk and portfolio management, the team ensures that every rupee coming into and
out of the companies pocket is properly documented and audited.
Human Resource
The human resource department at Engro Foods limited spearheads their recruitment process to
ensure that the finest human resource is taken on board at Engro Foods. Resumes of candidates
are carefully filed and documented for current or future reference. The department, besides
carrying out succession planning, maintains and implements HR policies pertaining to
employment, retention, superannuation. Assessing training needs of employees and ensuring
adequate training is also carried out by the professional HR team at Engro Foods.
Marketing
Consisting of leading market professionals of the industry, who are graduates of top business
schools of Pakistan, the marketing department ensures that from product need identification to
product development, launching and post launch, all strategic decisions are made based on
authentic information and research. Identifying the target markets, effectively communicating to
them and building the image of the brands as well as the Companies, is the job of the
professionals
running the marketing at Engro Foods.
Procurement
As all of our food products are milk based the entire Milk procurement department plays a
critical
role in defining the quality of the end product that reaches our customers. Ensuring regular
collection of fresh and pure milk right from the farmer to the factory and ascertaining the
freshness

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of milk all across the milk procurement process, is the responsibility of Milk Procurement
department, consisting of food technologists working at the collection centers and veterinary
doctors providing service to the farmers.
Management Information System
The MIS department at Engro Foods ensure that all automation is running error-free at all times.
Regularly modifying and updating the Company’s accounting software is also the MIS teams
responsibility.
Production
Modern technology is part and parcel of Production at Engro Foods. The state of the art plan set
up near Sukkhar has a processing capacity of more than 300,000 liters of milk per day, making it
one of the largest in the country. Professionally qualified human resource efficiently works night
and day to maintain highest hygiene standards.
Quality Assurance
Quality Assurance is strictly followed in Engro Food. Qualified food technologists at this
department ensure that highest quality parameters are adhered to through all steps of production
and that the products reach the consumers as per promise.
Supply and Distribution
This time ensures timely and effective distribution of the products to different shops and stores
spread all across Pakistan. From transportation management to obtaining route permits and
approvals, is done by this department.

Human Resources Management of Engro Foods

The Human Resource department at Engro Foods (Pvt.) Limited spearheads the recruitment
process to ensure that the finest human resource is taken on board at Engro Foods. Resumes of
candidates are carefully filed and documented for current or future reference. The department,
besides carrying out succession planning, maintains and implements HR policies pertaining to
employment, retention and superannuation. Assessing training needs of employees and
ensuring adequate training is also carried out by the professional HR team at Engro Foods.
The company believes that the best way to become integrated into their organization is to start
contributing to it and to become accepted as part of its working community. For this reason the

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company concentrates on:
Placing an employee in an initial job which starts to use strengths and matches stated interests.
Providing an orientation program which helps understand the Company and its Environment.
Introducing an employee early in the career to the people development system and giving him/
her feedback on own performance from the first year.
In cases where traineeships are provided, these are designed to bring employee up to the
standard of skill and knowledge required in the shortest practicable time.
The principle of early job responsibility is followed wherever the company can.

THE RECRUTMENT PROCESS

The recruitment process is taken very seriously. It is vital that Engro select people with qualities
essential for its continued success. Its human resource team is comprised of experience
recruitment professional with diverse backgrounds.
During the recruitment process objective view is taken and best practices are followed. Engro’s
recruitment methodology is based on examining capabilities or competencies. These
capabilities are sets of behavior skills and knowledge that can be determinants of job success
and focus on the role requirements. Thereby insuring consistency and accuracy in assessments
and increasing the reliability of the selection process.
The recruitment is different for two different categories of people. First is the Management
Profession and Technician and the second is Non-Management Profession and Technician.
There are seven different division of Engro. All have separate HR departments which evaluate
the candidates for respective positions in their division
IDENTIFICATION OF NEED:
The first step is to check whether there is a requirement for new selection. If there is a new
position to be developed then COED checks for that. If an already existing position has become
vacant due to any reason, then the department notifies the Human Resource Department to
place advertisement in the newspapers.
ADVERTISEMENT:
After the identification of need, the Human Resource department places the advertisement in
the newspaper to call for resumes. The advertisement specifies the job description and the job
specification.

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JOB DESCRIPTION:
These are the listing of duties as well as desirable qualifications for a particular job e.g. the
advertisement also specifies number of years’ worth of experience to apply for the job.
JOB SPECIFICATIONS:
These are the characteristics and the abilities required from a person to work in that position
such as leadership and teamwork qualities or command over English.
APPLICATION FORM\ SUBMISSION OF RESUME:
Application forms enable the candidates to present a complete picture of their talents, interests
and ambitions. It is the first stage of evaluation and the basic criteria for initial selection. The
candidates must present a resume which makes the person stand out.
EVALUATION OF RESUME:
After the resumes of hopeful candidates have been received, the HR department checks all the
resumes of the people who have applied. In its evaluation the HR department checks the
experience and the qualities of the individual and matches them to the requirement of the job.
SHORT LISTING:
After the evaluation of the resumes the HR shortlists the candidates who have fulfilled the
minimum requirement of the job description and specification.
TEST:
The test is conducted by the HR department. In the test the managers check the IQ level,
English Composition and Logic. The duration of the test is exactly one hour. The test is checked
manually and is done by the HR department.
INTERVIEW:
The candidates who have successfully cleared the tests and have scored above than relevant
mark are then called for interview. The interview is conducted by four people, on executive and
three managers. All the four interviewers should preferably be from within the department but
often that is not the case.
The purpose of the interviews is to check the person’s subjective skills which are difficult to
measure such as attitude, communication skills, abilities and personality. During the interview
all four person mark the candidate individually and then put forward a cumulative mark. These
are the marks against which different candidates are differentiated.

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RECOMMENDATION TO HUMAN RESOURCE DEPARTMENT:
Following the interview the employee of the particular department goes to the HR and gives
recommendation to the HR manager regarding the interview of the candidate. The HR then
conducts an interview with the candidate where they decide the Grade scale of the candidate,
the different benefits and the pay scale.
MEDICAL:
After the terms of contract is agreed upon, the candidate is asked to have a medical test.
HIRING:
After the medical test, the candidate is referred back to the relevant department with the
contract. If the department agrees upon it, then the candidate is hired.
TRAINING AND DEVELOPMENT MODEL:
The HR department, besides carrying out Succession planning maintains and implements HR
policies pertaining to employees training, retention and superannuation. Assessing training
needs of employees and ensuring adequate training is also carried out by the professional HR
team at Engro Foods. In year 2005, the Ministry of Industries and Production also established
Olpers (Dairy Pakistan Company) on the lines and the main objectives of the company is to
promote training and skills development of human resources associated with the dairy sector.
On-the-Job Development at Olpers:
The Engro foods company believes strongly that people grow and learn most effectively
through experience. Therefore, every opportunity is sought to try to develop an employee
through work related experience. Such development implies an expansion or stretching of
abilities or aptitudes. It has to be based on the knowledge, skills, and aspirations within oneself.
This form of development needs to be understood and actively supported by the employee and
the supervisor. Candid discussion in all employee interactions is encouraged and serves as an
effective communication tool. Relative to other dairy companies, Engro places a lot of emphasis
on development of its technical resources also. This has resulted in Engro being able to
efficiently develop and implement large technological projects successfully.
Training and Education at Olpers:
The Engro Foods Company has a range of training programs, both core management and
technical, which are used on a regular basis to develop skill and knowledge. In addition ENGRO
FOODS COMPANY do need assessment of training programs and leads to inputs into the

11
overall training plans of the company to help them work towards realizing their full potential and
then after that they do formularize evaluation of those programs and also uses different Training
methods for their employees which are as follows:
Ø Continuous learning.
Ø Cross training
Ø Distance learning
Ø Multimedia training
Ø Near transfer training
Ø On-the-job training (OJT)
Ø Team leader training, etc
Alternatively, individuals may attend externally run programs and there may be cases where
learning by planned job experience is the best answer according to different circumstances
within the company. Employees contribution to assessing own training needs are welcomed as
are the suggestions for suitable programs. To address future manpower needs of the company,
employee career, training and succession planning activities are undertaken on an annual basis.
Training and Resource Centre at Olpers:
Training and Resource Centre is the only teachers training facility in Ghotki district. Since its
inception in 1999, more than 2500 teachers of Ghotki district have been trained at the centre. A
team of 4 full time PDTs carryout general and subject specific training sessions.
Sahara Welfare Society:
The reach of vocational training program was increased with co-funding of USAID
and(International Youth Foundation’s) program – (Education and Employment Alliance). Sahara
Welfare Society, a non-profit voluntary organization managed by company employees at
Daharki, runs a primary school, vocational training school and a free clinic.
HR MODEL
Engro Foods Company uses this HR Organizational model which basically describes the
difference between main HR actors in their company to makes sure, on the one hand, that the
company acts in the interests of employees by giving them opportunities to advance their
careers; and on the other hand, that employees bring as much value-added as possible during
their stay in the company. There are two different roles within the HR department of Engro
Foods Company: the organizational ones and the operational ones. The organizational roles of

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hr department of Engro Foods Company includes: Human Resources management, including HR
support to business and HR design & delivery and Legal obligations including employee
relations and well-being programs. The operational roles of hr department of Engro Foods
Company includes: People management, including company manager and Personnel
management, including industrial relations managers (HR local specialists) who maintain
relationships with other dairy’s HR specialist in order to remain competitive in this global world
and to sustain long-term growth for the company. Both roles are in fact involved in the HR
process as far as they are responsible for the day-to-day HR management in the Engro Foods
Company.
COMPENSATION AND BENEFITS/ PERFORMANCE APPRAISALS:
The Company's Total Remuneration package is competitively aligned to the best in the industry
and is appropriately balanced between providing cash compensation and benefits, including,
medical and retirement benefits. The annual salary rewards are linked to employee
performance. An Employee Share Option Scheme operated by the Employees Trust offers new
employees the opportunity to acquire ownership in the Company. Highest Salaries:
The salary packages Engro foods offer its employees the highest remuneration package that’s
far above the industry average. And that's a major part of its compensation philosophy – to
always keep employees above their profile's market value. So be you an experienced
professional or a fresher, at Engro foods, you'll get the highest salaries ever.
Gain Sharing:
On top of their highest salaries and outstanding benefits are their performance based bonuses.
And its performance gauge is very different. They don't base employee’s performance on
defined targets - they base it on a certain percentage of the top performers among you. So
every quarter, the top 50% performers qualify for bonuses.
Benefits:
At Engro Foods, they value quality human resource. Their employees lend the creativity and
passion to meet business challenges with bold new ideas. It offers unparalleled employee
benefits, ranging from medical, to financial and recreational. They want to keep their most
important asset - their people - healthy and happy.
Travelling and Subsistence Expenses:
All employees will be reimbursed for any travel and subsistence expenses incurred in the course

13
of their duties.
Holiday:
Each employee is entitled to a basic 23 days holiday per year. However, for some people this
amount is either too much or not enough. For this reason, all their employees have the
flexibility to trade salary and holiday. Employees can choose between 15 days and 30 days
holiday per year, with the maximum rising to 40 days per year after two years' service.
Car Allowance:
For consulting positions a car allowance is included in the package.
Pension and Life Assurance:
After three months' service, every employee has the option to join the company's group
personal pension scheme, or to take a cash alternative. All employees are covered under Life
Assurance from their first day with Engro foods. The company contributes to the scheme and
reviews its contributions on a periodic basis, to ensure that these remain suitable, attractive
and fair. Permanent Health Insurance:
Engro Foods provides Permanent Health Insurance to all employees from their first day.
Health Scheme:
After six months' service, an employee can elect to join the company's VIP
Private health
To ensure employee participation and commitment to the system, the format draws heavily on
the employees own assessment of his job performance, training and developmental needs,
career aspirations and any other employee related item that needs to be addressed. Candid
discussion in all employee interactions is encouraged and serves as an effective communication
tool. The system also focuses on the employee's training needs and leads to inputs into the
overall training plans of the company to help them work towards realizing their full potential.
Relative to other chemical companies, Engro places a lot of emphasis on development of its
technical resources. This has resulted in Engro being able to efficiently develop and implement
Large technological projects successfully. To address future manpower needs of the company,
employee career and succession planning activities are undertaken on an annual basis. Engro
values people with passion, creativity, leadership, strong communication skills and the drive to
deliver and compensates them according to their relative performances. Engro Foods Limited
carried out certain compensation and performance

14
APPRAISAL PROJECTS:
REWARD MANAGEMENT:
The reward management however is strictly performance driven and every opportunity is used
to reinforce the culture of reward for performance. To promote and strengthen a keenly
competitive environment within the organization for enhanced quality and productivity, en
elaborate performance assessment and employee development system has been
institutionalized which by design forces objectivity in employee appraisal against given
dimensions of performance evaluation.
PROJECT HOPE TELEMEDICINE INITIATIVE:
The Project Hope Telemedicine initiative by Engro makes available doctors in no less than
fifteen medical specialties ranging from neonatology to cardiology on a daily basis - and free of
cost, to the communities. The project has provided online consultation by specialist doctors to
about 1400 patients to date

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Margins % of Sales 2007-12 2008-12 2009-12 2010-12 2011-12 2012-12 2013-12 2014-12 2015-12 2016-12 TTM
Revenue — — — 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
COGS — — — 79.03 77.80 74.31 78.52 81.98 76.86 77.36 82.71
Gross Margin — — — 20.97 22.20 25.69 21.48 18.02 23.14 22.64 17.29
SG&A — — — 16.17 14.14 13.57 16.13 13.03 12.72 13.51 14.48
R&D — — — — — — — — — — —
Other — — — 0.63 0.70 1.07 0.50 -0.47 0.23 0.58 0.04
Operating Margin — — — 4.44 8.08 12.01 5.72 5.46 10.34 8.72 3.19
Net Int Inc & Other — — — -3.15 -3.51 -2.25 -2.62 -4.30 -1.72 -0.78 -0.91
EBT Margin — — — 1.29 4.56 9.76 3.10 1.16 8.62 7.93 2.28

2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016-
Profitability TTM
12 12 12 12 12 12 12 12 12 12
Tax Rate % — — — 34.98 34.62 33.81 25.87 — 26.35 32.1531.83
Net Margin % — — — 0.84 2.98 6.46 2.29 2.00 6.35 5.38 1.56
Asset Turnover
— — — 1.68 2.05 2.07 1.63 1.74 1.92 1.74 1.45
(Average)
Return on Assets % — — — 1.41 6.12 13.37 3.74 3.47 12.17 9.36 2.25
Financial Leverage
— — — 2.43 2.30 2.21 2.26 2.22 1.76 1.44 2.71
(Average)
Return on Equity % — — — 3.43 14.42 30.02 8.36 7.77 23.88 14.89 4.64
Return on Invested
— — — 1.76 7.57 16.52 4.71 4.33 15.16 13.49 4.36
Capital %
Interest Coverage — — — — — — — — — 12.00 3.73

Efficiency 2010-12 2011-12 2012-12 2013-12 2014-12 2015-12 2016-12

Days Sales Outstanding 0.90 0.85 1.07 1.90 1.44 0.78 0.77
Days Inventory 55.81 45.10 45.12 49.74 43.55 39.79 45.05
Payables Period 45.00 34.44 28.75 35.36 34.26 32.83 39.00
Cash Conversion Cycle 11.72 11.51 17.45 16.29 10.73 7.74 6.83
Receivables Turnover 403.73 429.63 340.13 192.12 254.13 466.76 473.73
Inventory Turnover 6.54 8.09 8.09 7.34 8.38 9.17 8.10
Fixed Assets Turnover 2.93 3.56 3.90 2.98 2.94 3.45 3.29
Asset Turnover 1.68 2.05 2.07 1.63 1.74 1.92 1.74

16
17
 Ghias Khan
Abdul Samad Dawood is the Chief Executive Officer Abdul Sam
Chairman
Director
Ruhail Mohammed
Asad Said Jafar was appointed as the Chairman &
Chief Executive Officer
CEO of Philips Pakistan Limited in January 2009
Asad Said Jafar
Company Limited and Pakhtunkhwa Energy
Director
Development Organization.

Asim Murtaza Khan

Director
Javed Akbar
Ms Sadia Khan
Director
Sadia Khan
Mr. Asim Murtaza Khan is working as CEO (Hon)
Director
with

functional committees The Board has established the following two committees:
These committees act at the operational level in an Board Compensation Committee
advisory capacity to the The committee meets multiple times through the year
Chief Executive, providing recommendations to review and recommend all elements of the
relating to businesses and Compensation, Organization and Employee
employee matters. Development policies relating to the senior executives'
MANCOM remuneration and to approve all matters related to the
MANCOM is headed by the President & CEO, remuneration of the executives of the company and
and includes the functional heads of all members of the management committee.
departments. The committee meets to discuss The Chief Executive Officer attends Board
Company’s performance and works in an advisory Compensation Committee meetings by invitation. The
capacity to the President & CEO. committee met three times during 2016.
Members Members
Ruhail Mohammed – Chairman Khalid Siraj Subhani – Chairman*
Ahmad Shakoor Abdul Samad Dawood – Member
Asim Butt Javed Akbar – Member
Atif Kaludi The Secretary of the Committee is Syed Shahzad Nabi,
M. Asif Sultan Tajik VP HR & Administration.
Mudassar Y. Rathore The Board Audit Committee
Mohsin A. Mangi The committee meets atleast once every quarter and
Syed Shahzad Nabi assists the Board in fulfilling its oversight
The Secretary of MANCOM is Sameer Amin. responsibilities, primarily in reviewing and reporting
Committee for Organizational financial and non-financial information to shareholders,
and Employee Development (COED) systems of internal control and risk management and
The COED is responsible for the review of the audit process. It has the power to call for
Compensation, Organization, Training and information from management and to consult directly
Development matters of all employees. The with the external auditors or their advisors as

18
members
of COED at Engro Fertilizers are as follows:
Members
Ruhail Mohammed – Chairman
Ahmad Shakoor
Asim Butt
M. Asif Sultan Tajik
Muddassar Y. Rathore
Mohsin Ali Mangi
The Secretary of the COED is Syed Shahzad Nabi.
Corporate HSE Committee
This committee is responsible for bringing in
excellence
in the sectors of Health, Safety and Environment.
Members considered appropriate.
Ruhail Mohammed – Chairman The Chief Financial Officer regularly attends the Board
Ahmad Shakoor Audit Committee meetings by invitation to present the
Asim Butt accounts. After each meeting, the Chairman of the
Atif Kaludi Committee reports to the Board. The Committee met
M. Asif Sultan Tajik four times during 2016.
Mudassar Y. Rathore Members
Mohsin A. Mangi Javed Akbar – Chairman
Syed Shahzad Nabi Asad Said Jafar – Member
The Secretary of the Corporate HSE Committee is Sadia Khan – Member
Khawaja Bilal Mustafa. The Secretary of the Committee is Syed Mohammed Ali,
Six Sigma Corporate Council Head of Audit.
This council oversees the implementation of Six
Sigma.
Members
Ruhail Mohammed – Chairman
M. Asif Sultan Tajik
Asim Butt
Ahmad Shakoor
Mudassar Y. Rathore
Mohsin A. Mangi
Rehan Sajjad Mughal
Syed Shahzad Nabi
The Secretary of the Six Sigma Corporate Council
is
Usman Aziz Khan.

19
Profitability Ratios
Gross Profit ratio % 24.6* 34.8* 36.8 44.1 32.2
Net Profit to Sales % 13.0* 17.7* 13.4 11.0 (9.6)
EBITDA Margin to Sales % 31.0* 35.9* 37.9 46.3 38.3
Return on Equity % 21.5 39.7 27.6 26.9 (17.1)
Return on Capital Employed % 21.4 32.8 22.8 22.0 9.1
Liquidity Ratios
Current ratio Times 1.1 0.9 1.0 1.3 0.5
Quick / Acid test ratio Times 0.6 0.5 0.9 1.1 0.3
Cash to Current Liabilities % 0.12 2.7 12.0 19.7 9.3
Cash flow from Operations to Sales % 1.1* 5.5* 31.0 49.5 20.8
Activity / Turnover Ratios
No. of Days Inventory Days 47.9 26.5 12.0 20.0 31.0
Inventory turnover Times 7.6 13.8 31.3 18.3 11.8
Total Assets turnover ratio % 66.9* 78.3* 55.1 46.0 31.0
Fixed Assets turnover ratio % 99.1* 117.7* 81.9 63.0 37.0
Investment /Market Ratios
Earnings per Share (Restated) Rs./ share 6.8 11.3 6.3 4.7 (2.6)
Breakup value per share Rs./ share 31.0 32.0 26.2 19.3 14.7

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Capital Structure Ratios
Debt to Total Capital Employed ratio % 44.8 46.6 56.0 70.0 81.0
Interest Cover ratio Times 5.3 5.6 2.8 1.8 0.6

Financial assets
2.7.1 Classifcation
The Company classifes its fnancial assets in the following categories: at fair value through proft
or loss, held to maturity, loans and receivables, and available-for-sale. The classifcation depends
on the purpose for which the fnancial assets were acquired. Management determines the
classifcation of its fnancial assets at initial recognition.
a) At fair value through proft or loss Financial assets at fair value through proft or loss are
fnancial assets held for trading. A financial asset is classifed in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are also categorized as held
for trading unless they are designated as hedges. Assets in this category are classifed as current
assets.
b) Loans and receivables
Loans and receivables are non-derivative fnancial assets with fxed or determinable payments that
are not quoted in an active market. They are included in current assets, except for maturities
greater than 12 months after the end of the reporting period; which are classifed as non-current
assets.
c) Held to maturity
Held to maturity fnancial assets are non-derivative fnancial assets with fxed or determinable
payments and fxed maturity with a positive intention and ability to hold to maturity.
d) Available-for-sale
Available-for-sale fnancial assets are non-derivatives that are either designated in this category
or not classifed in any of the other categories. They are included in non-current assets unless the
investment matures or management intends to dispose it off within 12 months of the end of the
reporting date.
Stores, spares and loose tools
These are valued at weighted average cost except for items in transit which are stated at invoice
value plus other charges paid thereon till the balance sheet date. For items which are slow
moving and / or

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identifed as surplus to the Company’s requirements, adequate provision is made for any excess
book value over estimated realisable value. The Company reviews the carrying amount of stores
and spares on a regular basis and provision is made for obsolescence.
2.12 Stock-in-trade
These are valued at the lower of cost and net realisable value. Cost is determined using weighted
average method except for raw materials in transit which are stated at cost (invoice value) plus
other charges incurred thereon till the balance sheet date. Cost in relation to fnished goods
includes applicable purchase cost and manufacturing expenses. The cost of work in process
includes material and proportionate conversion costs.
Net realisable value signifes the estimated selling price in the ordinary course of business less all
estimated costs of completion and costs necessary to be incurred in order to make the sales.
2.13 Trade debts and other receivables
These are recognisedinitially at fair value plus directly attributable transaction costs, if any and
subsequently measured at amortised cost using effective interest rate method less provision for
impairment, if any. A provision for impairment is established if there is objective evidence that
the Company will not be able to collect all amounts due according to the original terms of
receivables. The amount of provision is charged to proft and loss account. Trade debts and other
receivables considered irrecoverable are written-off.
2.14 Cash and cash equivalents
Cash and cash equivalents in the statement of cash flows includes cash in hand, balance with
banks, other short-term highly liquid investments with original maturities of three months or less,
and bank overdrafts / short term borrowings. Bank overdrafts are shown within short term
borrowings in current liabilities on the balance sheet.
2.15 Share capital
Ordinary shares are classifed as equity and recognised at their face value. Incremental costs
directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
2.16 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings
are subsequently carried at amortised cost; any difference between the proceeds (net of
transaction costs)

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and the redemption value is recognised in the proft and loss account over the period of the
borrowings using the effective interest method.
Borrowings are classifed as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least 12 months after the balance sheet date.
2.17 Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method.
These are classifed as current liabilities if payment is due within 12 months or less (or in the
normal operating cycle of the business if longer). If not, they are presented as non-current
liabilities.
2.18 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the proft
and loss account, except to the extent that it relates to items recognised in the statement of
comprehensive income or directly in equity. In this case the tax is also recognised in the
statement of comprehensive income or directly in equity, respectively.
Current
The current income tax charge is based on the taxable income for the year calculated on the basis
of the tax laws enacted or substantively enacted at the balance sheet date, and any adjustment to
tax payable in respect of previous years.
Deferred
Deferred tax is recognised using the balance sheet method, providing for all temporary
differences between the carrying amounts of assets and liabilities for fnancial reporting purposes
and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting date.
A deferred tax asset is recognised to the extent that is probable that future taxable profts will be
available against which temporary difference can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax
beneft will be realised.

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Financials

2010-122011-122012-122013-122014-122015-122016-12
Revenue PKR Mil 20,945 29,859 40,169 37,929 42,602 49,834 44,346
Gross Margin % 21.0 22.2 25.7 21.5 18.0 23.1 22.6
Operating Income PKR Mil 930 2,412 4,823 2,168 2,328 5,150 3,866
Operating Margin % 4.4 8.1 12.0 5.7 5.5 10.3 8.7
Net Income PKR Mil 176 891 2,595 870 889 3,162 2,387
Earnings Per Share PKR 0.31 1.22 3.40 1.14 1.16 4.13 3.11
Dividends PKR — — — — — — —
Payout Ratio % * — — — — — — —
Shares Mil 564 731 763 766 767 767 767
Book Value Per Share * PKR — 6.82 13.20 15.09 14.31 18.88 22.66
Operating Cash Flow PKR Mil 156 1,080 3,214 2,356 715 4,517 5,122
Cap Spending PKR Mil -2,165 -3,415 -2,590 -5,214 -2,530 -923 -1,386
Free Cash Flow PKR Mil -2,008 -2,336 624 -2,858 -1,815 3,594 3,736
Free Cash Flow Per Share * PKR — -3.56 0.82 0.81 -5.43 3.22 5.50
Working Capital PKR Mil 1,216 2,888 5,071 3,344 2,029 3,695 5,010

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