NAMES: Laiba Malik 9191089

Maimoona Hayat 9191083

Nawab Ali Zafar 9191152

Faraz Ahmed 9191102

Mian Shakir Ali 9191086

SUBJECT

: Financial Accounting I

CLASS

: BBA-II-C

TOPIC

: Final Project (Engro Fertilizers)

SUBMITTED TO

: Mr. Waris Ali

Company
Engro Fertilizers
Introduction
Engro Fertilizers Limited (listed on all 3 stock exchanges of Pakistan), is an 86%
owned subsidiary of Engro Corporation (ENGRO), which is involved in the
business of manufacturing and marketing of urea and NPK (compound) fertilizers.
EFERT is Pakistan’s largest urea player in terms of capacity, with Engro Urea as
Pakistan’s oldest domestic urea brand. Over the years, production capacity of its
base plant has been enhanced from 173 kt/year to 975 kt/year through various
projects including relocation from USA.
In 2010, it completed construction of the EnVen project which at that time was the
world’s largest single train urea plant, adding 1.3mn tpa of urea production
capacity, making Daharki world’s 5th largest urea production site As per Fertilizer
Policy 2001, EnVen (COD: 2011) was contracted to receive feedstock gas from the
SNGPL network at US$0.70/mmbtu for 10yrs (vs. normal pricing of
US$4.2/mmbtu). After a gap of 04 years, with delays due to GOP back tracking,
EFERT has received confirmation of concessionary gas pricing in Mar’15.
EFERT has entered into an agreement with GENCO II (endorsed by ECC) to
install compressors for Guddu Power Plant at its cost. In lieu of this it is
understood that 60MMSCFD of Guddu gas will continue to flow to EFERT till
December 2015.
During 2015 , Engro Eximp’s trading arm is being sold to EFERT (subject to
shareholders approval), after which the Company will also be engaged in import
and marketing of phosphate based fertilizers (DAP & MAP) and micronutirents.
Part 1: Find depreciation method used in all years.
Depreciation method used by Engro Fertilizers in all these respective years is
straight line method. It is charged to the profit and loss account except for catalyst
whose depreciation is charged on the basis of number of production days.

Straight Line Method= cost – residual value/estimated life span

Depreciation on addition is charged from the month following the month in which
the asset is available for use and on disposals up to the preceding month of
disposal.

Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Company will obtain ownership by the
end of the lease term. Computer software and license cost treated as intangible
assets are amortized from the date the software is put to use on a straight-line basis
over a period of 4 years.
Part 2: Find percentage of financial assets.
Financial assets 2015 2016 2017 2018 2019
Trade debts 2,261,747 7,585,312 3,484,501 2,374,797 10,009,934
Derivative financial 29,207 - - - -
instruments
Loans, advances, 588,247 678,351 701,392 702,171 1,735,337
deposits
Other receivables 1,329,998 6,986,069 8,506,327 8,299,348 8,639,451
Short term 10,984,555 142,729 7,083,347 6,334,613 5,501,944
investments
Cash and bank 865,302 28,473 1,655,406 642,060 3,409,674
balances
Subordinated loan to 900,000 - 2,000,000 - -
subsidiary
Working capital loan - - - 13,677,700 16,245,774
to subsidiary
Investment in 560,316 560,416 560,416 100
subsidiary 4,383,000
Long term loans and 162,852
advances 159,778 120,637 134,535 140,784

Total financial assets 21,501,834 16,101,887 24,125,924 32,731,889 45,705,066

Percentage of FA 20.40373323 15.7202628 22.689065 28.67497 35.4006663

Percentage of financial assets in 2015 = Financial assets / Total assets * 100

= 21,501,834 /105,381,862 * 100
= 20%
Percentage of financial assets in 2016 = Financial assets / Total assets * 100
= 16,101,887 /102,427,594* 100
= 16%
Percentage of financial assets in 2017 = Financial assets / Total assets * 100
= 24125924 / 106,332,826 * 100
= 23%
Percentage of financial assets in 2018 = Financial assets / Total assets * 100
 = 32731889/ 114,147,944 * 100
= 29%
Percentage of financial assets in 2019 = Financial assets / Total assets * 100
= 45,705,066 / 129,107,926* 100
= 35%
Years 2015 2016 2017 2018 2019
No. of shares 12590.6 - 4367 - -
Capital share 125,906 - 43,670 - -
Premium 871,397 - 252,723 - -
Total 997,303 - 296,393 - -
Capital share 13,309,323 13,309,323 13,352,993 13,352,993 13,352,993
balance at the
end of year
Premium share 3,132,181 3,132,181 3, 384,904 3, 384,904 3, 384,904
balance at end
Part 3: How many share company shared in each year.

No of shares
14000

12000

10000

8000 No of shares

6000

4000

2000

0
Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

In 2015
Company shared 12590.6 shares at par value 10 (at 125,906)

Premium value 69 (at 871,397)

Balance as at December 31, 2015

Capital share 13,309,323

Premium 3,132,181

In 2016

Financial statements show no transactions for share issuance.

Balance as at December 31, 2016

Capital share 13,309,323

Premium 3,132,181

In 2017

Company shared 4367 shares at par value 10 (at 43670)

Premium value 68 (at 252,723)

Balance as at December 31, 2017

Share capital 13,352,993

Premium 3, 384,904

In 2018 and 2019

Financial statements show no transactions for share issuance.

Share capital 18 and 19 is 13,352,993 and

Premium 3, 384,904

Part 4: Cash trend over 5 years.

2015

Net (decrease) / increase in cash and cash equivalents Rupees 5,918,282

Cash and cash equivalents at beginning of the year 5,537,978

Cash and cash equivalents at end of the year 11,456,260

In 2014 there is an increase in the cash as compared to previous year.

2016

Net (decrease) / increase in cash and cash equivalents (12,394,901)

Cash and cash equivalents at beginning of the year 11,456,260

Cash and cash equivalents at end of the year (938,641)

In 2016 there is a decrease in net cash as compared to previous year.

2017

Net (decrease) / increase in cash and cash equivalents 8,005,662

Cash and cash equivalents at beginning of the year (938,641)

Cash and cash equivalents at end of the year 7,067,021

In 2017 there is a increase in net cash as compared to previous year.

2018

Net (decrease) / increase in cash and cash equivalents (1,925,492)

Cash and cash equivalents at beginning of the year 2,020,674

Cash and cash equivalents at end of the year 95,182

In 2018 there is a decrease in net cash as compared to previous year.

2019

Net (decrease) / increase in cash and cash equivalents 4,370,201

Cash and cash equivalents at beginning of the year 95,182

Cash and cash equivalents at end of the year 4,465,383

In 2019 there is a increase in net cash as compared to previous year.

Years Increase / Decrease in Cash

2015 5,918,282

2016 -12,394,901

2017 8,005,662

2018 -1,925,492

2019 4,370,201
Part 5: 2019 Cash flow statement in detail.