Second Quarter Accounts 2019

second quarter accounts 2019
engro corp
Engro’s investments in agriculture, foods, energy and petrochemicals
are designed to take advantage of Pakistan’s economic needs. Engro Polymer & Chemicals Limited acquired FSRU vessel on lease from a US-based company -
Excelerate Energy. Engro Elengy Terminal Limited, a wholly
Engro Polymer & Chemicals Limited-a 56% owned subsidiary owned subsidiary of ETPL, set up a state of the art LNG
About Us In 1991, following a decision by Exxon to divest its fertilizer
of Engro – is the only fully integrated chlor-vinyl chemical terminal, at Port Qasim. The terminal – which is also one of
business on a global basis, the employees of Exxon Chemical
Engro Corporation Limited is one of Pakistan's largest complex in Pakistan and produces poly-vinyl chloride, caustic the most cost efficient terminals in the region – has the
Pakistan Limited decided to buy out Exxon's share. This was,
conglomerates with the company's business portfolio spanning soda, sodium hypochlorite, hydrochloric acid and other capacity for regasification of up to 600 mmcfd.
and perhaps still is, the most successful employee buy-out in
across sectors including chemical fertilizers, PVC resin, a bulk chlorine by-products. The business was setup as a
the corporate history of Pakistan. Renamed Engro Chemical
liquid chemical terminal, foods, power generation and state-of-the-art plant in 1997, as a 50:50 joint venture, with Engro Vopak Terminal Limited
Pakistan Limited, the company continued to go from strength
commodity trade. At Engro, our ambition is to become the Mitsubishi and Asahi Glass with Asahi subsequently divesting
to strength, reflected in its consistent financial performance,
premier Pakistani enterprise with a global reach. its shareholding in 2006. Engro Vopak is a joint venture with Royal Vopak of the
growth and diversification.
Netherlands – the world’s largest bulk liquid chemical
The management team at Engro is responsible for In 2009 a decision was made to demerge the fertilizer Engro Energy Limited handling company. The business is engaged in handling,
conceptualizing and articulating goals that bring our people business into an independent operating company to ensure storage and regasification of liquid & gaseous chemicals,
Engro Energy Limited is a wholly owned subsidiary of Engro Liquefied Petroleum Gas (LPG), petrochemicals and
together in pursuit of our objectives. It leads the company with undivided focus on the business's expansion and growth. In
Corporation and it owns and operates Engro Powergen bio-fuels. Engro Vopak’s terminal is Pakistan’s first cryogenic
a firm commitment to the values and spirit of Engro. In our the best interests of a multi category business, expansion
Qadirpur Limited, a 224 megawatt power plant and the facility that handles 70% of all liquid chemical imports into
journey to become a profitable, growth-oriented and sustainable strategy and growth vision, the management decided that the
group’s first initiative in the power sector of Pakistan. Engro Pakistan including Paraxylene (PX), Acetic Acid (AA), Vinyl
company, our management structure has evolved to create a various businesses would be better served if the company
Powergen Qadirpur Limited was listed on the Karachi Stock Chloride Monomer (VCM), Ethylene Dichloride (EDC), Mono
more transparent and accessible organization. was converted to a holding company; Engro Corporation
Exchange in October 2014 where 25% of the shares were Ethylene Glycol (MEG), Ethylene along with Phosphoric Acid
Limited.
Our growth is driven by our people. Our culture is dynamic and offered to the public. As of now Engro Powergen Qadirpur (PA) imports, which are pumped directly to customer’s
energetic, with emphasis on our core values and loyalty of our From its inception as Esso Pakistan Fertilizer Company Limited is 69% owned by Engro Energy Limited. facilities.
employees. Our work environment promotes leadership, Limited in 1965 to Engro Corporation Limited in 2010, Engro
Engro Energy Limited is also involved in the Thar Coal project. Engro Foods Limited
integrity, teamwork, diversity and excellence. has come a long way and will continue working towards its
The project operates a coal mine under Sindh Engro Coal
vision of becoming a premier Pakistani company with a global
Our History Mining Company (SECMC) and development of Engro Foods Limited is an 40% owned associated company
reach.
t wo 330 MW mine mouth power plants under Engro engaged in the manufacturing, processing and marketing of
Today, Engro is one of Pakistan's most progressive, growth Powergen Thar Limited (EPTL) in the first phase. SECMC is a dairy products, frozen desserts and fruit drinks. The business
Engro Corporation Limited
oriented organizations, managed under a holding structure joint venture company formed in 2009 between the owns two milk processing plants in Sukkur and Sahiwal and
that works towards better managing and oversight of Engro Corporation Limited is a holding company, created Government of Sindh (GoS) and Engro Energy Limited & operates a dairy farm in Nara, Sindh. In its continued efforts
subsidiaries and affiliates that are part of Engro's capital following the conversion of Engro Chemical Pakistan Limited Affiliates. SECMC’s shareholders include Government of to ‘elevate consumer delight worldwide’, the business has
investments in Pakistan. on January 1,2010. Engro Corp is one of Pakistan’s largest Sindh, Engro Energy Limited, Thal Limited, Habib Bank Ltd, established several brands that have already become
conglomerates with the company’s business portfolio spanning CMEC Thar Mining Investment Limited, Huolinhe Open Pit household names in Pakistan such as Olper’s (UHT milk,
The company is also defined by its history, which reflects a across sectors including chemical fertilizers, PVC resin, bulk Coal Investment Company Limited and Hub Power Company low-fat milk, cream, desi ghee, lassi and flavored drinks),
rich legacy of innovation and growth. The seeds for the liquid terminal, LNG terminal, foods processing and power Limited (HUBCO). The Sindh Coal Authority has awarded a Omoré (frozen desserts), Tarang (tea whitener) and Dairy
company were sown following the discovery of the Mari gas generation. 95.5 square kilometer area of the coalfield, known as Block II, Omung (UHT dairy liquid and dessert cream).
field by Esso / Mobil in 1957. Esso proposed the establishment to SECMC for exploration and development of coal deposits.
of a urea plant, and the Esso Pakistan Fertilizer Company Engro Fertilizers Limited Within this block, there is an estimated amount of exploitable Engro Eximp Agri Products (Private) Limited
Limited was established in 1965 and began production in 1968. lignite coal reserves of 1.57 billion tons. In 2010, SECMC
At US $43 million with an annual production capacity of 173,000 Engro Fertilizers Limited-a 56% owned subsidiary of Engro completed the Bankable Feasibility Study (BFS) for Thar Block Engro Eximp Agriproducts is a wholly owned subsidiary of
tons, this was the single largest foreign investment by a Corporation – is a premier fertilizer manufacturing and marketing II Coal Mining Project by engaging internationally renowned the holding company and it manages the procurement,
multinational corporation in Pakistan at the time. As the nation's company having a portfolio of fertilizer products with significant Consultants such as RWE-Germany, Sinocoal-China, processing and marketing of rice. The company owns and
first fertilizer brand, the company also pioneered the education focus on balanced crop nutrition and increased yield. As one SRK-UK and HBP Pakistan, meeting all national / international operates a state-of-the-art paddy processing plant near
of farmers in Pakistan, helping to modernize traditional farming of the 50 largest fertilizer manufacturers of the world we have standards. The first phase of the Project has started. Muridke and has an installed capacity of 144KT.
practices to boost farm yields, directly impacting the quality of close to 5 decades of operations as a world class facility with
life for farmers and the nation. a wide range of fertilizer brands, besides urea, which include Elengy Terminal Pakistan Limited
some of the most trusted brand names by Pakistani farmers.
In 1978, Esso was renamed Exxon globally, and the company These include brands like Engro Zarkhez, Zingro and Engro Elengy Terminal Pakistan Limited (ETPL) is a 56% owned
became Exxon Chemical Pakistan Limited. The business DAP amongst others. subsidiary of Engro Corporation. The company won the
continued to prosper as it relentlessly pursued productivity contract to handle liquefied natural gas (LNG) and thereafter
gains and strived to attain professional excellence.
Engro Corp. | Second Quarter Report 2019 03

directors’ report
The Directors of Engro Corporation Limited are pleased to submit their A brief review of significant business segments is as follows: Near-Term Outlook the energy shortage faced by the country. Chemical industry is expected
report along with the condensed interim un-audited financial statements to remain stable and the terminal looks forward to retaining its market
of the Company for the half-year ended June 30, 2019. Fertilizer Engro Corporation continues to seek investment opportunities which will share, along with availing expansion opportunities.
create opportunities for both substituting imports and enhancing export
Financial Performance Fertilizer business revenues grew by 23%. However, on account of potential. The Company is committed to working towards delivering on Our leadership potential
increase in gas prices coupled with other inflationary pressures, costs projects, to focus on future investments and to maintain the strength of
On a consolidated basis, the revenue for 1H 2019 witnessed a growth have also increased. The business booked a one-off deferred tax its balance sheet, while maintaining optimal debt levels. Engro is committed to making lives of Pakistanis better by using the
of 20% over similar period last year closing at PKR 85,989 million, charge arising out of the Finance Act 2019, whereby corporate tax country’s resources. This passion for Pakistan is embodied first and
driven by fertilizers and petrochemicals performance. The consolidated rate has been fixed at 29% as compared to phased reduction from Fertilizer foremost by our greatest asset: our people – the leaders of tomorrow.
Profit-After-Tax (PAT) for 1H 2019 was PKR 11,482 million, while PAT 30% to 25% announced through Finance Act 2018. Resultantly, PAT
attributable to the shareholders increased by 13% to PKR 6,876 million for the current period stood at PKR 7,184 million as compared to PKR Going forward, local urea demand is expected to remain stable, while We firmly believe that the leadership community of Engro will help
from PKR 6,091 million during comparative period last year. On a 7,149 million for 1H2018. the demand for phosphates and other imported fertilizers is expected navigate the company through challenges which our businesses face,
standalone basis, the Company posted a PAT of PKR 5,163 million to remain restricted owing to higher prices caused by devaluation and and take advantage of the opportunities our country has to offer. We
against PKR 3,772 million for the similar period last year, translating Petrochemicals recent budgetary measures. The fertilizer business continues to face understand that the challenges for our businesses in the future will be
into an EPS of PKR 8.96 per share. Higher PAT is mainly on account challenges in the recovery of long outstanding subsidy and is of the different from those in the past and we must invest in developing the
of interest income and dividend. The Board is pleased to announce The business recorded revenue growth of 9% over the similar period view that with the anticipated clarity on GIDC way forward, the matter necessary leadership capabilities to meet these challenges. To equip
2nd interim cash dividend of PKR 8.00 per share for FY 2019. last year. However, PAT for the half year was PKR 1,544 million against of recovery of subsidy would be settled in the near term. ourselves to cater to the dynamic, ever-changing and competitive
PKR 2,784 million for the comparative period. Profitability was impacted business environment, we have channeled our efforts into developing
Strategic Direction on account of inflation, higher energy costs and higher interest rates Petrochemicals a workforce that exhibits strong commercial acumen and is agile.
coupled with PKR devaluation.
Investing today for a better tomorrow for Pakistan is at the cornerstone International PVC and ethylene prices shall remain dependent on global Our revamped leadership competency model and robust people
of every Engro business. Keeping value creation for stakeholders at Energy economic sentiments and regional demand supply dynamics. Domestic systems/ processes promote collaboration, innovation and resilience
the forefront, Engro will continue to focus its energies and establish market is currently under flux and will take firmer direction once local in the workforce. The launch of the Engro Leadership Academy -
businesses to help solve some of the pressing issues of our time and Qadirpur Power Plant: The Plant dispatched a Net Electrical Output economic policies, macroeconomic indicators and other key variables Pakistan's first of its kind leadership academy to hone and develop
improve the lives of the people of Pakistan. Taking this vision forward, of 661 GwH to the national grid with a load factor of 71% compared settle. Therefore, the business is of the view that PVC and Caustic Engro’s leadership community – is testament to Engro’s commitment
our business portfolio comprises of efforts in the following 4 verticals: to 87% during similar period last year. Decline in load factor was Soda market will remain under stress in the next quarter. The business to develop a pipeline of leaders that can take Engro and Pakistan
primarily due to gas supplier’s compressor issues which resulted in is well underway with the execution of the expansion projects and is forward. By developing our people, we aim to create and sustain a
- Food & Agriculture – to enhance the agricultural productivity of the supply disruptions and gas curtailment due to depletion of Qadirpur hopeful that the completion of those projects will be achieved within performance-oriented culture of learning and leadership. We aim to
country and enhance food security gas field. The business posted a PAT of PKR 1,867 million in 1H 2019 the stated timelines. Continuing to build on Engro’s experience in the attract and retain the best talent from the market and develop them
as compared to PKR 1,590 million in 1H2018. Petrochemicals sector, the Board of Directors has approved the into leaders of the future who are eager to step into unchartered
- Petrochemicals – to grow the industry through projects while enabling commencement of a feasibility study of a polypropylene facility based territories, bring sustainable solutions to the forefront, and establish
import substitution and export potential Thar Coal Mining & Power Generation Projects: Development of the on a propane dehydrogenation plant. Engro as the leading provider of products and services in the energy,
3.8 Mt per annum mine at Thar culminated with the completion of ‘Test agricultural, chemicals, and telecommunication spheres.
- Energy & Related Infrastructure – providing effective energy on Completion’ on 3 June 2019. Thereafter, COD was declared on 10 Energy
infrastructure to help reduce the energy shortage July 2019. The power plant has been running smoothly since COD. Acknowledgement
Engro remains on the forefront to help alleviate the energy shortage
- Telecommunication Infrastructure – developing infrastructure to Terminal Operations in the country. In partnership with the government and other The Directors would like to express their deep appreciation to our
provide data and information access to the population at large stakeholders, our Energy business segment continues to explore shareholders who have always shown their confidence in the Company.
Profitability of both LNG and chemicals terminals remained healthy for opportunities in the renewable energy sector. We would also like to place on record our sincere appreciation for the
With regard to the energy vertical, 10 July 2019 was a historic day for the half year. Since the commencement of our LNG project, the terminal commitment, dedication and innovative thinking put in by each member
Engro, as both Sindh Engro Coal Mining Company Limited (SECMC) has handled over 15 million tons of LNG and currently fulfills more than Terminal Operations of the Engro family and are confident that they will continue to do so
and Engro Powergen Thar (Private) Limited, declared Commercial 13% of the country’s gas requirements. The country has saved nearly in the future.
Operations Date (COD) of the Thar Coal Project. With this USD 2 billion to date, replacing the import of more expensive furnace The LNG terminal is positively playing its role in addressing some of
accomplishment, Engro is using indigenous resources to help alleviate oil and diesel with LNG and not accounting for efficiency in terms of
the energy shortage that Pakistan faces and has, once again, proved fuel. The project has also revived the fertilizer and CNG sectors, and
its ability to deliver on mega projects that enable development for the 500+ industrial units by ensuring consistent supply of gas via LNG
people of Pakistan. import.
On the Telecommunication Infrastructure front, an investment of up to We are pleased to continue our long-standing relationship of over
Rs 7.5 billion has been committed for potential business opportunities twenty years with industry leader Royal Vopak, which continues to
in this area. pave the way for Engro and Vopak to collaborate in further ventures Hussain Dawood Ghias Khan
at home and abroad using their combined resources and expertise. Chairman President and Chief Executive

independent auditor’s review report
to the members of engro corporation limited
report on review of unconsolidated interim financial statements
Introduction aware of all significant matters that might be identified in an

audit. Accordingly, we do not express an audit opinion.
We have reviewed the accompanying unconsolidated
condensed interim statement of financial position of Engro Conclusion
Corporation Limited as at June 30, 2019 and the related
Based on our review, nothing has come to our attention that
unconsolidated condensed interim statement of profit or loss
causes us to believe that the accompanying interim financial
and other comprehensive income, unconsolidated condensed
statements are not prepared, in all material respects, in
interim statement of changes in equity, and unconsolidated
accordance with accounting and reporting standards as
condensed interim statement of cash flows, and notes to the
applicable in Pakistan for interim financial reporting.
unconsolidated condensed interim financial statements for
the half year then ended (here-in-after referred to as the The engagement partner on the review resulting in this
“interim financial statements”). Management is responsible independent auditor’s review report is Salman Hussain.
engro corp
for the preparation and presentation of these interim financial
statements in accordance with accounting and reporting
standards as applicable in Pakistan for interim financial
reporting. Our responsibility is to express a conclusion on
Chartered Accountants
these interim financial statements based on our review.
The figures of the unconsolidated condensed interim

Karachi
Date: 29th August 2019
unconsolidated condensed
statement of profit or loss and other comprehensive income interim financial information.
for the quarters ended June 30, 2019 and 2018 have not
been reviewed, as we are required to review only the
cumulative figures for the half year ended June 30, 2019.
Scope of Review
We conducted our review in accordance with International

Standard on Review Engagements 2410, “Review of Interim
Financial Information Performed by the Independent Auditor
of the Entity”. A review of interim financial statements consists
of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in
scope than an audit conducted in accordance with
International Standards on Auditing and consequently does
not enable us to obtain assurance that we would become

unconsolidated condensed interim statement of unconsolidated condensed interim statement of
financial position (unaudited) profit or loss and other comprehensive income (unaudited)
as at june 30, 2019 for the half year ended june 30, 2019
[Amounts in thousand except for earnings per share]
(Amounts in thousand) Note (Unaudited) (Audited) Quarter ended Half year ended
June 30, December 31,
2019 2018 Note June 30, June 30, June 30, June 30,
--------------(Rupees)------------- 2019 2018 2019 2018
ASSETS (Rupees)
Non-current assets
Property, plant and equipment 4 565,718 514,837
Right-of-use assets 3.2.3 1,071,198 - Dividend income 270,000 392,254 3,647,413 3,169,615
Intangible assets 47,990 58,248
Long term investments 5 24,836,889 24,652,289
Long term loans and advances 6 392,501 49,796
Deferred taxation 4,666 - Royalty income 262,048 218,347 509,289 436,638
26,918,962 25,275,170 532,048 610,601 4,156,702 3,606,253
Current assets
Loans, advances and prepayments 7 3,088,758 350,121 Administrative expenses (485,371) (180,916) (941,622) (363,127)
Receivables 8 1,059,281 499,462
Short term investments 9 60,971,953 64,842,059 46,677 429,685 3,215,080 3,243,126
Cash and bank balances 2,191,458 1,609,160 Other income 1,871,857 1,265,499 3,502,471 2,272,604
67,311,450 67,300,802
TOTAL ASSETS 94,230,412 92,575,972 Other operating expenses (117,912) (130,780) (251,536) (152,533)
Operating profit 1,800,622 1,564,404 6,466,015 5,363,197

EQUITY & LIABILITIES
Equity Finance cost (93,455) (34,031) (127,612) (69,011)
Share capital 10 5,761,633 5,237,848
Share premium 13,068,232 13,068,232 Profit before taxation 1,707,167 1,530,373 6,338,403 5,294,186
General reserve 4,429,240 4,429,240
Taxation 13 (376,583) (904,414) (1,175,714) (1,521,861)
Remeasurement of post employment benefits - Actuarial loss (12,721) (12,721)
Unappropriated profit 61,938,756 62,380,565 Profit for the period 1,330,584 625,959 5,162,689 3,772,325
Total equity 85,185,140 85,103,164
Other comprehensive income for the period - - - -
Liabilities
Total comprehensive income for the period 1,330,584 625,959 5,162,689 3,772,325
Non-current liabilities
Retirement and other service benefit obligations 51,400 50,366 (Restated) (Restated)
Lease liabilities 3.2.3 887,340 -
Deferred taxation - 249 Earnings per share - basic and diluted 14 2.31 1.09 8.96 6.55
938,740 50,615
Current liabilities
Trade and other payables 1,836,251 1,386,693 The annexed notes from 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Provision 3,243,130 3,243,130
Taxes payable 1,660,270 1,431,589
Borrowings 11 1,000,000 998,164
Accrued interest / mark-up 63,247 64,357
Unclaimed dividends 303,634 298,260
8,106,532 7,422,193
Total liabilities 9,045,272 7,472,808
Contingencies and Commitments 12

TOTAL EQUITY & LIABILITIES 94,230,412 92,575,972
The annexed notes from 1 to 21 form an integral part of these unconsolidated condensed interim financial statements.
Abdul Samad Dawood Hasnain Moochhala Ghias Khan Abdul Samad Dawood Hasnain Moochhala Ghias Khan
Vice Chairman Chief Financial Officer President and Chief Executive Vice Chairman Chief Financial Officer President and Chief Executive
Engro Corp. | Second Quarter Report 2019 Engro Corp. | Second Quarter Report 2019 09
unconsolidated condensed interim statement of unconsolidated condensed interim statement of
changes in equity (unaudited) cash flows (unaudited)
for the half year ended june 30, 2019 for the half year ended june 30, 2019
(Amounts in thousand) (Amounts in thousand)
Half year ended
Capital Reserve Revenue Reserves
June 30, June 30,
Share Share General Remeasurement Unappropriated Total
capital premium reserve of post profit Note 2019 2018
employment --------------(Rupees)-------------
benefits - CASH FLOWS FROM OPERATING ACTIVITIES
Actuarial loss
--------------------------------------------(Rupees) --------------------------------------------
Cash utilized in operations 15 (1,136,215) (1,308,029)
Balance as at January 01, 2018 (Audited) 5,237,848 13,068,232 4,429,240 (12,656) 60,660,171 83,382,835 Royalty received 618,614 406,426
Taxes paid (951,948) (643,359)
Total comprehensive income for the half year
Retirement and other service benefits paid (75,425) (28,133)
ended June 30, 2018 - - - - 3,772,325 3,772,325
Long term loans and advances - net (8,029) (14,375)
Transactions with owners
Net cash utilized in operating activities (1,553,003) (1,587,470)
Final cash dividend for the year ended
December 31, 2017 @ Rs. 2.00 per share - - - - (1,047,570) (1,047,570)
CASH FLOWS FROM INVESTING ACTIVITIES
First Interim cash dividend for the year ended
Dividends received 3,377,413 3,529,555
- - - - (3,666,494) (3,666,494)
Income on deposits / other financial assets including income
Balance as at June 30, 2018 (Unaudited) 5,237,848 13,068,232 4,429,240 (12,656) 60,766,002 83,488,666 earned on subordinated loan to subsidiaries 3,281,885 2,142,831
Investment in shares of subsidiary company (184,600) (532,400)
Total comprehensive income for the half year Loan disbursed to subsidiary companies (3,034,676) -
ended December 31, 2018 - - - (65) 8,947,553 8,947,488
Repayment of loan by subsidiary companies - 896,542
Transactions with owners Purchase of Pakistan Investment Bonds (PIBs),
and units of mutual funds (17,272,810) (796,337)
Interim cash dividends for the year ended
December 31, 2018: Proceeds from sale of PIBs and units of mutual funds 20,348,868 24,881,497
- Second interim @ Rs. 7.00 per share - - - - (3,666,495) (3,666,495) Purchases of property, plant and equipment (PPE) (92,175) (60,579)
- Third interim @ Rs. 7.00 per share - - - - (3,666,495) (3,666,495) Sale proceeds on disposal of PPE 98 80
- - - - (7,332,990) (7,332,990)
Net cash generated from investing activities 6,424,003 30,061,189
Balance as at December 31, 2018 (Audited) 5,237,848 13,068,232 4,429,240 (12,721) 62,380,565 85,103,164
Total comprehensive income for the half year CASH FLOWS FROM FINANCING ACTIVITIES
ended June 30, 2019 - - - - 5,162,689 5,162,689
Transactions with owners Payment of financial charges (60,706) (68,516)

Lease rentals paid (167,289) -
Final cash dividend for the year ended Dividends paid (5,075,339) (3,636,912)
Bonus shares issued during the period in the ratio of Net cash utilized in financing activities (5,303,334) (3,705,428)
1 shares for every 10 shares held 523,785 - - - (523,785) -
Net (decrease) / increase in cash and cash equivalents (432,334) 24,768,291
First Interim cash dividend for the year ending
523,785 - - - (5,604,498) (5,080,713) Cash and cash equivalents at beginning of the period 54,539,531 35,986,713
Balance as at June 30, 2019 (Unaudited) 5,761,633 13,068,232 4,429,240 (12,721) 61,938,756 85,185,140 Cash and cash equivalents at end of the period 16 54,107,197 60,755,004
notes to the unconsolidated condensed interim
financial statements (unaudited)
for the half year ended june 30, 2019
During the preparation of these unconsolidated condensed interim financial statements, the significant judgements made by the
1. LEGAL STATUS AND OPERATIONS
management in applying the Company's accounting policies and the key sources of estimation and uncertainty are the same
as those that were applied to audited annual financial statements of the Company for the year ended December 31, 2018.
1.1 Engro Corporation Limited (the Company), is a public listed company incorporated in Pakistan. Its shares are quoted on Pakistan
Stock Exchange Limited. The Company is a subsidiary of Dawood Hercules Corporation Limited (the Parent Company). The 3. ACCOUNTING POLICIES
principal activity of the Company, is to manage investments in subsidiary companies, associated companies and joint venture,
3.1 The accounting policies and the methods of computation adopted in the preparation of these unconsolidated condensed interim
engaged in fertilizers, PVC resin manufacturing and marketing, food, energy, LNG and chemical terminal and storage businesses.
financial statements are consistent with those applied in the preparation of the audited annual financial statements of the Company
The Company's registered office is situated at 7th & 8th floors, The Harbour Front Building, HC # 3, Block 4, Marine Drive, Clifton, for the year ended December 31, 2018 except as detailed in note 3.2.
Karachi.
3.2 The Company has applied the following standards for the first time for its annual reporting period commencing January 1, 2019:
1.2 SUMMARY OF SIGNIFICANT EVENTS AND TRANSACTIONS
3.2.1 IFRS 9 ‘Financial instruments’ (effective for annual periods beginning on or after January 1, 2019)
Significant events and transactions affecting the Company's financial position and performance during the period are disclosed IFRS 9 - 'Financial Instruments' addresses the classification, measurement and recognition of financial assets and financial
in the notes 5, 6 and 7. liabilities and replaces the related guidance in IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes
three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (OCI)
and fair value through profit and loss (FVTPL). The basis of classification depends on the entity’s business model and the
2. BASIS OF PREPARATION contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair
value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI, without recycling of
2.1 These unconsolidated condensed interim financial statements have been prepared in accordance with the accounting and fair value changes to profit or loss.
reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as
There is now a new expected credit losses model that replaces the incurred loss impairment model of IAS 39. For financial
applicable in Pakistan for interim financial reporting comprises of:
liabilities there are no changes to classification and measurement except for the recognition of changes in own credit risk in OCI,
for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing
- International Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), issued by the International Accounting Standards the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument
Board (IASB) as notified under the Companies Act, 2017; and and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes.
The following is the summary of the Company's assessment of impacts on unconsolidated condensed interim financial statements
- Provisions of and directives issued under the Companies Act, 2017.
as at January 1, 2019 due to application of IFRS 9:
Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provisions Particulars As at January 1, 2019
of and directives issued under the Companies Act, 2017 have been followed. Classfication & Measurement category Carrying amount
Original (Under IAS 39) New (Under IFRS 9) Original New (Under Difference
(Under IAS 39) IFRS 9)
2.2 These unconsolidated condensed interim financial statements represents the condensed interim financial statements of the
Company on a standalone basis. The consolidated condensed interim financial statements of the Company and its subsidiary Non - Current financial assets
companies is presented separately. The cumulative figures for the half year ended June 30, 2019 presented in these Long term loans and advances Loans and Receivables Amortized Cost 49,796 49,796 -
unconsolidated condensed interim financial statements have been subjected to limited scope review by the auditors of the
Current financial assets
Company, as required under section 237 of the Companies Act, 2017. These unconsolidated condensed interim financial
Loans and advances Loans and Receivables Amortized Cost 43,792 43,792 -
statements do not include all the information required for annual financial statements and therefore should be read in conjunction Receivables Loans and Receivables Amortized Cost 499,462 499,462 -
with the audited annual financial statements of the Company for the year ended December 31, 2018. Short term investments:
- Treasury bills Fair value through profit or loss Fair value through profit or loss 52,896,953 52,896,953 -
- Pakistan Investment Bonds Fair value through profit or loss Fair value through profit or loss 7,699,778 7,699,778 -
2.3 The preparation of these unconsolidated condensed interim financial statements in conformity with the accounting and reporting
- Fixed income placement Held to maturity Amortised cost 33,418 33,418 -
standards as applicable in Pakistan requires the use of certain critical accounting estimates. It also requires management to - Term Finance Certificates Available for sale Amortised cost 4,211,910 4,211,910 -
exercise its judgement in the process of applying the Company's accounting policies. Estimates and judgments are continually Cash and bank balances Loans and Receivables Amortized Cost 1,609,160 1,609,160 -
evaluated and are based on historical experience and other factors, including expectation of future events that are believed to
be reasonable under the circumstances. Actual results may differ from these estimates. Current financial liabilities
Trade and other payables Amortized Cost Amortized Cost 1,386,693 1,386,693 -
Borrowings Amortized Cost Amortized Cost 998,164 998,164 -
Accrued interest / mark-up Amortized Cost Amortized Cost 64,357 64,357 -
In light of the above requirements, certain changes have been made to the accounting policies of the Company. However, based Lease payments include fixed payments, variable lease payments that are based on an index or a rate, amounts expected to
on aforementioned assessment, there is no material current financial impact of these changes on the Company other than be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably
classification changes as disclosed above. certain to exercise that option, payments of penalties for terminating the lease, if the lease term reflects the lessee exercising
that option, less any lease incentives receivable. The extension and termination options are incorporated in determination of
3.2.2 IFRS 15 'Revenue from contracts with customers’ (effective from accounting period beginning on or after July 1, 2018) lease term only when the Company is reasonably certain to exercise these options.
The lease liabilities are subsequently measured at amortised cost using the effective interest rate method. They are remeasured
IFRS 15 - 'Revenue from Contracts with Customers', supersedes IAS 11 'Construction Contracts', IAS 18 'Revenue' and related
when there is a change in future lease payments arising from a change in fixed lease payments or an index or rate, change in
interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of
the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes
other standards. The new standard establishes a five-step model to account for revenue arising from contracts with customers.
its assessment of whether it will exercise a purchase, extension or termination option. The corresponding adjustment is made
Under IFRS 15, the company is required to assess performance obligations in the contract. Revenue is recognized at an amount
to the carrying amount of the respective right-of-use asset, or is recorded in profit or loss if the carrying amount of that right-of-use
that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a
asset has been reduced to zero.
customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances
when applying each step of the model to contracts with their customers. The standard does not have any impact on the Company's Right-of-use assets are initially measured based on the initial amount of the lease liabilities adjusted for any lease payments
unconsolidated condensed interim financial statements. made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.
3.2.3 IFRS 16 'Leases' (effective for accounting periods beginning on or after January 1, 2019) The right-of-use assets are depreciated on a straight line method over the lease term as this method most closely reflects the
expected pattern of consumption of future economic benefits. The carrying amount of the right-of-use asset is reduced by
Effective January 1, 2019, the Company has adopted IFRS 16, "Leases" which replaces existing guidance on accounting for impairment losses, if any, and adjusted for certain remeasurements of the corresponding lease liability.
leases, including IAS 17 "Leases", IFRIC 4 "Determining whether an Arrangement contains a Lease", SIC-15 "Operating Leases
- Incentive" and SIC-27 "Evaluating the substance of transactions involving the legal form of a Lease". IFRS 16 introduces a single, The Company has adopted IFRS 16 retrospectively from January 1, 2019, but has not restated comparatives for the 2018
on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right-of-use of reporting period, as permitted under the specific transitional provisions in the standard.
the underlying asset and a lease liability representing its obligations to make lease payments. Lessor accounting remains similar
to the current standard i.e. lessors continue to classify leases as finance or operating leases. The accounting polices relating to On adoption of IFRS 16, the Company recognised lease liabilities which had previously been classified as ‘operating leases’
Company's right-of-use assets and lease liabilities are as follows: under the principles of IAS 17 "Leases". These liabilities were measured at the present value of the remaining lease payments,
discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The lessee’s incremental borrowing rate applied
Lease liabilities and right-of-use assets to the lease liabilities on January 1, 2019 was 11.8%.
The right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of prepaid lease
At the inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract
payments recognised in the unconsolidated condensed interim statement of financial position immediately before the date of
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease terms are
initial application, accordingly, there is no impact on the opening balances of unappropriated profit as on January 1, 2019. The
negotiated on an individual basis and contain a wide range of different terms and conditions.
recognised right-of-use assets relates to the office space acquired on rental basis.
From January 1, 2019, leases are recognised as right-of-use assets and corresponding liabilities at the date at which the leased
Impact on Statement of Financial Position
assets are available for use by the Company. June 30, January 1,
2019 2019
The lease liabilities are initially measured at the present value of the remaining lease payments at the commencement date, --------------(Rupees)-------------
discounted using the interest rate implicit in the lease, or if that rate cannot be readily determined, the Company's incremental
borrowing rate. Right of Use assets - increased by 1,071,198 1,222,538
Lease liabilities - increased by 1,121,428 1,222,538

Current portion of lease liability (234,088) (208,847)
Long term portion of lease liability 887,340 1,013,691
Impact on Statement of Profit or Loss account and other comprehensive income 4.1 Additions to operating assets during the period / year amounted to Rs. 31,521 (December 31, 2018: Rs. 224,490). Operating
Half year
assets costing Rs. 138 (December 31, 2018: Rs. 874) having a net book value of Rs. 72 (December 31, 2018: Rs. 310), were
ended
disposed off during the period / year for Rs. 98 (December 31, 2018: Rs. 484).
June 30, 2019
-----(Rupees-----
4.2 This mainly represents advance paid to suppliers for purchase of operating assets and internally generated intangible assets.
Increase in finance cost (66,180)

(Increase) / decrease in admimistrative expenses: 5. LONG TERM INVESTMENTS
- Depreciation on right-of-use (151,340)
- Rent expense 167,289 During the period:
Decrease in profit before tax (50,231)
Decrease in tax 14,567 - the Company has made investment in Engro Infiniti (Private) Limited, a wholly owned subsidiary, through subscription of
Decrease in profit after tax (35,664) 18,460,000 ordinary shares of Rs. 10 each at par; and
- the shareholders of the Company in its Extraordinary General Meeting held on May 28, 2019, authorised the Company
Earnings per share for the six months ended June 30, 2019 are Rs. 0.06 per share lower as a result of the adoption of IFRS 16.
to acquire 100% of the issued and paid-up share capital of Engro Eximp FZE (UAE) from Engro Fertilizers Limited, a
subsidiary Company, against an amount of Rs. 1,757,280 (subject to adjustments at the date of closing of the transaction).
Practical expedients applied
Subsequent to the reporting date, the Company acquired Engro Eximp FZE for a consideration of Rs. 1,972,505.
In applying IFRS 16 for the first time, the Company has used the following practical expedients permitted by the standard:
6. LONG TERM LOANS AND ADVANCES
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
Includes an amount of Rs. 334,676 (December 31, 2018: Rs. nil) in respect of subordinated loan agreement entered by the
- the exclusion of operating leases with a remaining lease term of less than 12 months as at 1 January 2019; Company with Engro Energy Limited, a wholly-owned subsidiary company. The total facility under this agreement amounts to
USD 21,400 (PKR equivalent). The loan carries mark-up at the rate of 6 months KIBOR plus 2.00% per annum, payable
- the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application; and
quarterly.
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
7. LOANS, ADVANCES AND PREPAYMENTS
There are number of other standards, amendments and interpretations to the published standards that are not yet effective and are also not
relevant to the Company and therefore, have not been presented in these unconsolidated condensed interim financial statements.
Includes an amount of Rs. 2,700,000 (December 31, 2018: Rs. nil) in respect of subordinated loan agreement entered by the
Company with Engro Infiniti (Private) Limited, a wholly-owned subsidiary company. The total facility under this agreement amounts
3.2.4 Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss of the to Rs 3,500,000. The loan carries mark-up at the rate of 6 months KIBOR plus 2.00% per annum, payable monthly.
Company.
(Unaudited) (Audited) 8. RECEIVABLES
2019 2018 These include an amount of Rs. 270,000 (December 31, 2018: nil) on account of dividend receivable from Engro Vopak Terminal
--------------(Rupees)-------------
Limited (a joint venture company).
4. PROPERTY, PLANT AND EQUIPMENT
Operating assets (note 4.1) 327,828 337,501

Capital work in progress (note 4.2) 237,890 177,336
565,718 514,837

(Unaudited) (Audited)
June 30, December 31, 12.1 Contingencies
2019 2018
--------------(Rupees)------------- During the period:
9. SHORT TERM INVESTMENTS
- pledged shares of Engro Fertilizers Limited and Engro Foods Limited against the Standby Letter of Credit (SBLC) provided
Fair value through profit or loss by Engro Energy Limited, a wholly owned subsidiary, have been replaced by Treasury Bills amounting to Rs 7,250,000; and
- Treasury bills (note 12.1) 51,875,326 52,896,953
- Pakistan Investment Bonds 504,607 7,699,778 - the amount of Equity SBLC provided in connection with Engro Powergen Thar (Private) Limited has been reduced to USD
- Mutual fund units 4,158,859 - 138 (December 31, 2018: USD 17,827) (in PKR equivalent).
Amortised cost June 30, December 31,
- Fixed income placement 40,413 33,418 2019 2018
- Term Finance Certificates (note 9.1) 4,392,749 4,211,910 --------------(Rupees)-------------
60,971,954 64,842,059 12.2 Commitments
9.1 The Company subscribed to privately placed, unsecured and non-convertible zero-coupon Term Finance Certificates (TFCs) Commitments in respect of capital expenditure 380,894 230,687
issued by Engro Energy Limited, a wholly owned subsidiary company. These TFCs were issued at a discounted value of Rs.
3,560,000 and have a tenure of one year, extendable annually upon mutual consent upto a maximum of 48 months. Under the Quarter ended Half year ended
terms of TFCs, the Company is entitled to redeem these TFC's at any time during the term at a price to be computed using an June 30, June 30, June 30, June 30,
effective interest rate of 8.77% per annum. 2019 2018 2019 2018
(Rupees)
10. SHARE CAPITAL 13. TAXATION
During the period, the Company: Current

- for the period 381,077 389,736 1,180,629 1,009,185
- increased its authorised share capital from Rs. 5,500,000 to Rs 7,000,000; and - for prior years - 512,857 - 512,857
381,077 902,593 1,180,629 1,522,042
- issued bonus shares in the ratio of 1 shares for every 10 shares held, totaling the number of issued, subscribed and paid-up Deferred (4,494) 1,821 (4,915) (181)
shares to 576,163,230 (December 31, 2018: 523,784,754). 376,583 904,414 1,175,714 1,521,861
14. EARNINGS PER SHARE
11. BORROWINGS
There is no dilutive effect on
The outstanding balance as at period end represents amount raised from general public against the issuance of Engro Islamic the basic earnings per share
Rupiya Certificates - II having a tenure of 60 months with a profit rate of 13.5% per annum payable semi-annually maturing on on the Company, which is
July 10, 2019. Subsequent to the reporting date, the entire outstanding balance along with markup thereon was repaid to the based on the following:
certificate holders.
Profit for the period 1,330,584 625,959 5,162,689 3,772,325
12. CONTINGENCIES AND COMMITMENTS
(Number of shares)
Significant changes in the status of contingencies and commitments reported in the audited annual financial statements for the (Restated) (Restated)
year ended December 31, 2018 are as follows: Weighted average number
of ordinary shares
(in thousand) 576,163 576,163 576,163 576,163

Half year ended
June 30, June 30, 17. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
2019 2018
17.1 Financial risk factors
--------------(Rupees)-------------
15. CASH UTILIZED IN OPERATIONS
The Company's activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit
risk and liquidity risk.
Profit before taxation 6,338,403 5,294,186
There have been no changes in the risk management policies of the Company during the period, consequently these
Adjustment for non-cash charges and other items: unconsolidated condensed interim financial statements do not include all the financial risk management information and
disclosures required in the annual financial statements.
Depreciation 180,747 26,665
Amortization 10,258 3,502 17.2 Fair value estimation
(Gain) / loss on disposal of property, plant and equipment (26) 13
Provision for retirement and other service benefits 76,459 28,379 The carrying value of all financial assets and liabilities reflected in these unconsolidated condensed interim financial statements
approximate their fair values.
Income on deposits / other financial assets (3,502,471) (2,068,375)
Reversal of provision of Workers Welfare Fund - (204,229)
The table below analyses financial instruments carried at fair value by valuation method. The different level have been defined
Dividend income (3,647,413) (3,169,615)
as follows:
Royalty income (509,289) (436,638)
Financial charges 127,612 69,011 - Quoted prices (unadjusted) in active markets for identical assets or liabilities (level1);
Working capital changes (note 15.1) (210,495) (850,928)
(1,136,215) (1,308,029) - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices) (level 2); and
15.1 Working capital changes
- Inputs for the asset or liability that are not based on observable market data (level 3).
(Increase) / Decrease in current assets
Level 1 Level 2 Level 3 Total
Rupees
- Loans, advances, deposits and prepayments (26,821) 39,670
Assets
- Other receivables (net) (399,144) (190,818)
Financial assets at fair value
(425,965) (151,148)
through profit or loss
Increase / (Decrease) in current liabilities
- Treasury Bills - 51,875,326 - 51,875,326
- Trade and other payables including other
service benefits (net) 215,470 (699,780) - Pakistan Investment Bonds - 504,607 - 504,607
(210,495) (850,928)
- Units of mutual funds 4,158,859 - - 4,158,859
16. CASH AND CASH EQUIVALENTS
Level 2 fair valued instruments have been valued using discounted cash flow model.
Short term investments 51,915,739 58,057,907

There were no transfers amongst the levels during the period. Further, there were no changes in the valuation techniques
Cash and bank balances 2,191,458 2,697,097
during the period.
54,107,197 60,755,004

18. TRANSACTIONS WITH RELATED PARTIES 19. NON-ADJUSTING EVENTS AFTER THE BALANCE SHEET DATE
Related parties comprise subsidiaries, joint venture companies, associated companies, retirement benefit funds, directors and
19.1 The Board of Directors of Engro Fertilizers Limited in its meeting held on August 08, 2019 has declared an interim cash dividend
key management personnel. Details of transactions with related parties during the period, other than those which have been
of Rs. 5.00 per share for the year ending December 31, 2019. These unconsolidated condensed interim financial statements
disclosed elsewhere in these unconsolidated condensed interim financial statements, are as follows:
Half year ended do not reflect the effect of dividend receivable by the Company amounting to Rs. 3,756,560.
June 30, June 30,
2019 2018 19.2 The Board of Directors of Engro Vopak Terminal Limited, a joint venture company, in its meeting held on July 30, 2019 has
--------------(Rupees)------------- declared dividend of Rs 6.00 per share for the year ending December 31, 2019. These unconsolidated condensed interim
Parent Company financial statements do not reflect the effect of dividend receivable by the Company amounting to Rs. 270,000.
Dividend paid 1,891,234 1,160,087
Reimbursements of expenses 130,629 7,646
19.3 The Board of Directors of the Company in its meeting held on August 20, 2019 has approved an interim cash dividend of Rs.
Subsidiary companies 8.00 per share for the year ending December 31, 2019. These unconsolidated condensed interim financial statements do not
Purchases and services 709,867 516,168 reflect the effect of dividend payable.
Mark-up from subsidiaries 67,345 17,334
of loan to subsidiary 3,034,676 - 20. CORRESPONDING FIGURES
Repayment of loan by subsidiaries - 896,542
Unwinding of discount onTFCs 180,839 -
20.1 Corresponding figures have been rearranged and reclassified for better presentation, wherever considered necessary, the effect
Dividend received 3,107,413 2,552,184
of which is not material.
Royalty income 509,289 436,638
Reimbursements 158,228 321,017
Investment made in subsidiary 184,600 532,400 20.2 In order to comply with the requirements of International Accounting Standards 34 - 'Interim Financial Reporting', the condensed
interim statement of financial position has been compared with the balances of annual audited financial statements of the
Associated companies preceding financial year, whereas the condensed interim statement of profit or loss and other comprehensive income, condensed
Purchases and services 162,021 153,547 interim statement of changes in equity and condensed interim statement of cash flows has been compared with the balances
Dividend received - 122,430
of comparable period of immediately preceding financial year.
Contribution for Corporate Social Responsibility 15,000 12,000
Dividend paid 349,744 215,399 21. DATE OF AUTHORIZATION FOR ISSUE
Others 11 19
These unconsolidated condensed interim financial statements were authorized for issue on August 20, 2019 by the Board of
Joint venture Directors of the Company.
Services rendered 24,746 21,138
Dividend received 540,000 495,000
Others
Remuneration of key management personnel 250,544 158,476
Reimbursements to key management personnel 35,507 296
Profit on Engro Islamic Rupiya Certificates 9,804 9,784
Contribution to staff retirement benefit funds 46,016 39,934
Dividend paid 87,663 36,245
Directors' Fee 69,274 26,444 Abdul Samad Dawood Hasnain Moochhala Ghias Khan
Vice Chairman Chief Financial Officer President and Chief Executive

engro corp
consolidated condensed
interim financial information.
25
consolidated condensed interim statement of consolidated condensed interim statement of
financial position (unaudited) financial position (unaudited)
as at june 30, 2019 as at june 30, 2019
(Amounts in thousand) Note (Unaudited) (Audited) (Amounts in thousand) Note (Unaudited) (Audited)
June 30, December 31, June 30, December 31,
2019 2018
2019 2018
--------------(Rupees)-------------
--------------(Rupees)------------- EQUITY & LIABILITIES
ASSETS
Equity
Share capital 8 5,761,632 5,237,848
Non-current assets Share premium 13,068,232 13,068,232
Revaluation reserve on business combination 17,981 23,082
Property, plant and equipment 5 245,351,982 204,408,878 Maintenance reserve 156,301 156,301
Right-of-use asset 3.5.3 3,732,371 - Exchange revaluation reserve 647,246 395,605
Hedging reserve 115,582 (24,969)
Intangible assets 357,800 317,539
General reserve 4,429,240 4,429,240
Long term investments 6 32,124,597 31,590,380 Unappropriated profit 113,085,353 113,100,747
Remeasurement of post-employment benefits (71,092) (71,092)
Deferred taxation 189,960 384,612
131,448,843 131,077,146
Long term loans, advances and other receivables 3,820,309 4,092,566 137,210,475 136,314,994
285,577,019 240,793,975 Non-Controlling Interest 9 55,565,443 49,272,245
Current assets Total Equity 192,775,918 185,587,239

Stores, spares and loose tools 7,619,995 7,687,869 Liabilities
Stock-in-trade 12,177,803 17,228,278
Non-Current liabilities
Trade debts 20,977,981 18,449,563 Borrowings 10 133,572,565 121,110,471
Loans, advances, deposits and prepayments 2,148,965 3,170,670 Deferred taxation 8,684,257 8,428,363
Deferred liabilities 249,005 259,786
Other receivables 11,307,656 11,447,568 Lease liabilities 3.5.3 5,791,317 -
Accrued income 188,089 171,306 148,297,144 129,798,620
Current Liabilities
Contract Asset 81,740 179,905 Trade and other payables 69,156,155 50,371,278
Derivative financial asset 7 379,388 - Accrued interest / mark-up 2,983,984 2,242,686
Current portion of:
Short term investments 83,084,751 82,144,823 - borrowings 16,784,485 10,315,924
Cash and bank balances 22,493,543 11,880,811 - lease liabilities 3.5.3 1,195,795 -
- deferred liabilities 99,665 113,852
160,459,911 152,360,793
Taxes payable 6,817,522 7,642,916
TOTAL ASSETS 446,036,930 393,154,768 Short term borrowings 6,957,288 6,641,207
Dividend payable 550,235 25,683
Unclaimed dividends 418,739 415,363
104,963,868 77,768,909
Total Liabilities 253,261,012 207,567,529
Contingencies and Commitments 11
TOTAL EQUITY AND LIABILITIES 446,036,930 393,154,768
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements.
consolidated condensed interim statement of consolidated condensed interim statement of
profit or loss (unaudited) comprehensive income (unaudited)
(Amounts in thousand except for earnings per share) (Amounts in thousand)
Quarter ended Half year ended Quarter ended Half year ended
Note June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30,
2019 2018 2019 2018 2019 2018 2019 2018
(Rupees) (Rupees)
Profit for the period 4,917,512 4,217,559 11,482,439 11,054,921

Net revenue 45,341,758 38,208,202 85,989,116 71,733,077
Other comprehensive income:
Cost of revenue (32,365,003) (28,164,563) (61,010,150) (50,385,012)
Items that may be reclassified subsequently
Gross profit 12,976,755 10,043,639 24,978,966 21,348,065
to profit or loss
Hedging reserve - cash flow hedges
Selling and distribution expenses (1,356,814) (1,500,290) (3,097,262) (3,236,519)
Profit arising during the period 353,050 46,379 353,050 64,679
Administrative expenses (1,059,301) (767,723) (2,403,469) (1,780,847)
Reclassification adjustments for profit
10,560,640 7,775,626 19,478,235 16,330,699 included in profit or loss (218) (839) (433) (432)
352,832 45,540 352,617 64,247
Other income 4,068,179 2,331,908 6,416,011 4,971,619 Revaluation reserve on business combination (5,251) (5,251) (10,501) (10,501)
Other operating expenses (2,040,974) (1,792,357) (2,742,870) (2,110,442) Exchange differences on translation of
Finance cost (3,128,813) (1,221,027) (4,643,921) (2,444,152) foreign operations 341,620 94,625 372,241 176,958
Share of income / (loss) from joint ventures 689,201 134,914 714,357 230,704
and associates 280,455 (917,656) 690,187 (501,605) Income tax relating to:
- Hedging reserve - cash flow hedges (102,385) - (102,385) -
Profit for the period before taxation 9,739,487 6,176,494 19,197,642 16,246,119 - Revaluation reserve on business combination 1,680 1,680 3,360 3,360
(100,705) 1,680 (99,025) 3,360
Taxation (4,821,975) (1,958,935) (7,715,203) (5,191,198) Items that will not be reclassified to
profit or loss
Profit for the period 4,917,512 4,217,559 11,482,439 11,054,921
Deferred tax charge relating to revaluation of
equity related items - share issuance cost - (1,651) - (1,651)
Profit for the period attributable to:
- Owners of the Holding Company 2,865,609 1,897,765 6,875,591 6,091,417
Other comprehensive income
- Non-controlling interest 2,051,903 2,319,794 4,606,848 4,963,504
for the period, net of tax 588,496 134,943 615,332 232,413
4,917,512 4,217,559 11,482,439 11,054,921
Total comprehensive income for the period 5,506,008 4,352,502 12,097,771 11,287,334
(Restated) (Restated)
Earnings per share - basic and diluted 12 4.97 3.29 11.93 10.57 Total comprehensive income attributable to:
- Owners of the Holding Company 3,234,248 1,990,772 7,262,682 6,250,639
The annexed notes 1 to 21 form an integral part of these consolidated condensed interim financial statements. - Non-controlling interest 2,271,760 2,361,730 4,835,089 5,036,695
5,506,008 4,352,502 12,097,771 11,287,334
consolidated condensed interim consolidated condensed interim
statement of changes in equity (unaudited) statement of cash flows (unaudited)
----------------------------------------------------------------- Attributable to owners of the Holding Company------------------------------------------------------------
Capital reserves Revenue reserves Half year ended
Share Share
Revaluation
reserve on Maintenance Exchange Hedging General Un-
Remeasurement of
post employment Sub total Non-
Note June 30, June 30,
capital premium business
combination
reserve revaluation
reserve
reserve reserve appropriated
profit
benefits -
Actuarial (loss)
controlling
interest
Total
2019 2018
------------------------------------------------------------------------------------------------------- Rupees------------------------------------------------------------------------------------------------------------
---------------(Rupees)---------------
Balance as at January 1, 2018 (audited)
Total comprehensive income / (loss) for the
5,237,848 13,068,232 33,284 156,301 82,112 (68,921) 4,429,240 108,586,694 (69,056) 131,455,734 39,618,743 171,074,477
Cash flows from operating activities
half year ended June 30, 2018 (unaudited)
Profit for the period - - - - - - - 6,091,417 - 6,091,417 4,963,504 11,054,921

Other comprehensive (loss) / income - - (5,101) - 120,993 44,257 - (927) - 159,222 73,191 232,413 Cash generated from operations 13 46,767,525 26,476,982
- - (5,101) - 120,993 44,257 - 6,090,490 - 6,250,639 5,036,695 11,287,334
Transactions with owners Retirement and other service benefits paid (166,536) (112,480)
Dividend by subsidiaries allocable to
Non-Controlling interest - - - - - - - - - - (2,135,612) (2,135,612) Finance cost paid (6,513,819) (3,598,289)
Reclassification of actuarial gain on withdrawal / Taxes paid (7,517,182) (2,640,115)
curtailment of gratuity scheme - - - - - - - 4,557 (4,557) - - -
Share issuance cost - - - - - - - (5,586) - (5,586) (14,869) (20,455)

Long term loans and advances - net (428,248) (107,989)
December 31, 2017 @ Rs. 2.00 per share - - - - - - - (1,047,570) - (1,047,570) - (1,047,570)
Net cash generated from operating activities 32,141,740 20,018,109
First Interim cash dividend for the year ended
December 31, 2018 @ Rs.5.00 per share - - - - - - - (2,618,924) - (2,618,924) - (2,618,924)
- - - - - - - (3,667,523) (4,557) (3,672,080) (2,150,481) (5,822,561)
Cash flows from investing activities
Balance as at June 30, 2018 (Unaudited) 5,237,848 13,068,232 28,183 156,301 203,105 (24,664) 4,429,240 111,009,661 (73,613) 134,034,293 42,504,957 176,539,250
Purchase of property, plant and equipment and intangibles (30,044,142) (18,476,495)
Total comprehensive income / (loss) for the
half year ended December 31, 2018 Proceeds from disposal of:
Profit for the period
Other comprehensive income / (loss)
-
-
-
-
-
(5,101)
-
-
-
192,500
-
(305)
-
-
6,616,109
(1)
-
2,521
6,616,109
189,614
5,960,703
84,273
12,576,812
273,887
- property, plant and equipment 46,665 20,336
- - (5,101) - 192,500 (305) - 6,616,108 2,521 6,805,723 6,044,976 12,850,699 - short term investments - net (321,035) 24,688,661
Issuance of right shares of subsidiary company - - - - - - - - - - 2,331,153 2,331,153 Income on deposits / other financial assets 4,558,264 2,638,801
Share issuance cost - - - - - - - (7,588) - (7,588) 14,869 7,281
Investments made during the period (568,630) (462,170)
Advance against issue of share capital - - - - - - - - - - 1,997,646 1,997,646
Dividends received 270,000 617,430
Disposal of subsidiary company - - - - - - - 2,815,554 - 2,815,554 1,520,229 4,335,783
Dividend by subsidiaries allocable to Non-Controlling interest - - - - - - - - - - (5,141,585) (5,141,585)

Net cash (utilized in) / generated from investing activities (26,058,878) 9,026,563
2nd Interim cash dividends @ Rs.7.00 per share
for the year ended December 31, 2018 - - - - - - - (3,666,494) - (3,666,494) - (3,666,494)
3rd Interim cash dividends @ Rs.7.00 per share Cash flows from financing activities
for the year ended December 31, 2018 - - - - - - - (3,666,494) - (3,666,494) - (3,666,494)
- - - - - - - (4,525,022) - (4,525,022) 722,312 (3,802,710)
Balance as at December 31, 2018 (Audited) 5,237,848 13,068,232 23,082 156,301 395,605 (24,969) 4,429,240 113,100,747 (71,092) 136,314,994 49,272,245 185,587,239
Proceeds from borrowings - net 6,603,819 10,605,397
Effect of change in accounting policies - - - - - - - 1,271,051) - (1,271,051) (923,921) (2,194,972)
Adjusted balance as at January 1, 2019 5,237,848 13,068,232 23,082 156,301 395,605 (24,969) 4,429,240 111,829,696 (71,092) 135,043,943 48,348,324 183,392,267
Proceeds from issuance of shares - net 3,793,809 -
Total comprehensive income / (loss) for the Advance against issuance of shares 1,216,030 -
half year ended June 30, 2019 (Unaudited)
Profit for the period - - - - - - - 6,875,591 - 6,875,591 4,606,848 11,482,439 Share issuance costs (36,794) (20,455)
Other comprehensive income / (loss) - - (5,101) - 251,641 140,551 - - - 387,091 228,241 615,332
- - (5,101) - 251,641 140,551 - 6,875,591 - 7,262,682 4,835,089 12,097,771 Lease rentals paid (677,609) -
Dividends paid (6,974,147) (6,423,780)
Dividend by subsidiaries allocable to
Non-Controlling interest - - - - - - - - - - (2,421,654) (2,421,654)
Shares issued during the period - net of

transaction cost - - - - - - - (15,437) - (15,437) 2,542,495 2,527,058
Net cash generated from financing activities 3,925,108 4,161,162
Preference shares issued during the period - net
of transaction cost - - - - - - - - - - 1,229,759 1,229,759
Net increase in cash and cash equivalents 10,007,970 33,205,834
Advance against issue of share capital - - - - - - - - - - 1,031,430 1,031,430
Bonus shares issued during the period in the

ratio of 1 shares for every 10 shares held 523,784 - - - - - - (523,784) - - - -
Cash and cash equivalents at beginning of the period 71,639,638 43,876,320
December 31, 2018 @ Rs. 2.00 per share - - - - - - - 1,047,570) - (1,047,570) - (1,047,570)
First Interim cash dividend for the year ending Cash and cash equivalents at end of the period 14 81,647,608 77,082,154
December 31, 2019 @ Rs. 7.00 per share - - - - - - - (4,033,143) - (4,033,143) - (4,033,143)
523,784 - - - - - - (5,619,934) - (5,096,150) 2,382,030 (2,714,120)
Balance as at June 30, 2019 (Unaudited) 5,761,632 13,068,232 17,981 156,301 647,246 115,582 4,429,240 113,085,353 (71,092) 137,210,475 55,565,443 192,775,918
notes to the consolidated condensed interim
financial statements (unaudited)
for the half year ended june 30, 2019
1. LEGAL STATUS AND OPERATIONS 2. SUMMARY OF SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING THE GROUP'S
FINANCIAL POSITION AND PERFORMANCE DURING THE PERIOD
Engro Corporation Limited (the Holding Company), is a public listed company incorporated in Pakistan and its shares are quoted
on Pakistan Stock Exchange Limited. The Holding Company is a subsidiary of Dawood Hercules Corporation Limited (the Parent Following is the summary of significant transactions and events affecting the Group’s financial position and performance during
Company). The principal activity of the Holding Company, is to manage investments in subsidiary companies, associated the period:
companies and joint venture, engaged in fertilizers, PVC resin manufacturing and marketing, food, energy, LNG and chemical
terminal and storage businesses. The Holding Company's registered office is situated at 7th & 8th floors, The Harbour Front 2.1 Through Finance Act 2019, the corporate tax rate for companies have been fixed at 29% for TY 2019 and onwards, thereby
Building, HC # 3, Block 4, Marine Drive, Clifton, Karachi. deleting the previous 1% successive reduction in corporate tax rate up till TY 2023 enacted through Finance Act 2018. The
consequent increase in deferred tax liability has been recognised in these consolidated condensed interim financial statements.
1.1 The "Group" consists of:
2.2 In 2017, Engro Polymer and Chemicals Limited (EPCL), a subsidiary company, had announced Caustic Flake production plan
as a part of its expansion plan. During the period, the commercial production of the product has been commenced.
Holding Company - Engro Corporation Limited
2.3 EPCL has approved the incorporation of two wholly owned subsidiaries by name Engro Peroxide (Private) Limited and Engro
Associated Companies: Associated companies are entities over which the Group has significant influence but not control.
Plasticizer (Private) Limited for manufacturing Hydrogen Per-oxide and Chlorinated Paraffin Wax, respectively.
Subsidiary Companies: Companies in which the Holding Company owns over 50% of voting rights, or companies directly controlled 3. BASIS FOR PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
by the Holding Company:
%age of direct share holding 3.1 These consolidated condensed interim financial statements are unaudited and have been prepared in accordance with the
June 30, December 31, accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting
2019 2018 standards as applicable in Pakistan for interim financial reporting comprises of:
- Engro Energy Limited 100 100 - International Accounting Standards (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards
- Engro Eximp Agriproducts (Private) Limited 100 100 Board (IASB) as notified under the Companies Act, 2017: and
- Engro Infiniti (Private) Limited (note 1.1.1) 100 100
- Engro Fertilizers Limited 56.27 56.27 - Provisions of and directives issued under the Companies Act, 2017.
- Engro Polymer and Chemicals Limited 56.19 56.19
- Elengy Terminal Pakistan Limited 56 56 Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provisions
of and directives issued under the Companies Act, 2017 have been followed.
Joint Venture Company: 3.2 The preparation of these consolidated condensed interim financial statements in conformity with the approved accounting
standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the
- Engro Vopak Terminal Limited 50 50 process of applying the Group's accounting policies. Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectation of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. During the preparation of these consolidated condensed interim
financial statements, the significant judgements made by management in applying the Group's accounting policies and the key
Associated Company:
sources of estimation and uncertainty were the same as those that apply to the consolidated financial statements of the Group
for the year ended December 31, 2018.
- Engro Foods Limited 39.9 39.9
3.3 These consolidated condensed interim financial statements do not include all the information required for consolidated annual
1.1.1 During the period, the Holding Company has made investment in Engro Infiniti (Private) Limited, a wholly owned subsidiary, through
financial statements and therefore should be read in conjuction with the audited consolidated annual financial statements of the
subscription of 18,460,000 ordinary shares of Rs. 10 each at par.
Group for the year ended December 31, 2018.
1.1.2 During the period, the shareholders of the Holding Company in its Extraordinary General Meeting held on May 28, 2019, authorised 3.4 The accounting policies and the methods of computation adopted in the preparation of these consolidated condensed interim
the Holding Company to acquire 100% of the issued and paid-up share capital of Engro Eximp FZE (UAE) from Engro Fertilizers Limited financial statements are the same as those applied in the preparation of audited annual consolidated financial statements of the
(EFert), a subsidiary Company, against an amount of Rs. 1,757,280 (subject to adjustments at the date of closing of the transaction). Group for the year ended December 31, 2018 except for changes specified in note 3.5.
Subsequent to the reporting date, the Holding Company acquired Engro Eximp FZE for a consideration of Rs. 1,972,505.
3.5 New accounting standards, interpretations and amendments to approved accounting standards In light of the above, certain changes have been made in the accounting policies of the Group. However, based on Group's
assessment, there is no material impact of these changes on these consolidated condensed interim financial statements.
a) Standards, interpretations and amendments to approved accounting standards that are effective for the period and are
relevant to the Group. 3.5.3 Effective January 1, 2019, the Group has adopted IFRS 16, "Leases" which replaces existing guidance on accounting for leases,
including IAS 17 "Leases", IFRIC 4 "Determining whether an Arrangement contains a Lease", SIC-15 ""Operating Leases -
There are certain new standards, interpretations and amendments to approved accounting standards which are applicable for Incentive"" and SIC-27 "Evaluating the substance of transactions involving the legal form of a Lease". IFRS 16 introduces a single,
the first time on the Group's accounting periods beginning on or after January 1, 2019 but are considered not to be relevant or on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right-of-use of
have any significant effect on the Group's financial reporting, except as follows: the underlying asset and a lease liability representing its obligations to make lease payments. The only exceptions are short term
and low value leases. Lessor accounting remains similar to the current standard i.e. lessors continue to classify leases as finance
3.5.1 - IFRS 15 - 'Revenue from Contracts with Customers' supersedes IAS 11 'Construction Contracts', IAS 18 'Revenue' and related or operating leases.
interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of
other standards. The accounting polices relating to Group's right-of-use assets and lease liabilities are as follows:
The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, Lease liabilities and right-of-use assets
revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for
transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all At the inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether the contract
of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The Group conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions.
has assessed that significant performance obligation in contracts with customers are discharged at a single point of time and
therefore there is no significant financial impact of IFRS 15 on the Group. However, certain transporation and handling expenses
From January 1, 2019, leases are recognised as right-of-use assets and corresponding liabilities at the date at which the leased
previously included in selling and distribution expenses have now been reclassified to cost of revenue.
assets are available for use by the Group.
3.5.2 - IFRS 9 - 'Financial Instruments' addresses the classification, measurement and recognition of financial assets and financial
The lease liabilities are initially measured at the present value of the remaining lease payments at the commencement date,
liabilities and replaces the related guidance in IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes
discounted using the interest rate implicit in the lease, or if that rate cannot be readily determined, the incremental borrowing
three primary measurement categories for financial assets: amortized cost, fair value through other comprehensive income (OCI)
rate.
and fair value through profit and loss (FVTPL). The basis of classification depends on the entity’s business model and the
contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair
Lease payments include fixed payments, variable lease payments that are based on an index or a rate, amounts expected to
value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI, without recycling of
be payable by the lessee under residual value guarantees, the exercise price of a purchase option if the lessee is reasonably
fair value changes to profit or loss.
certain to exercise that option, payments of penalties for terminating the lease, if the lease term reflects the lessee exercising
that option, less any lease incentives receivable. The extension and termination options are incorporated in determination of
There is now a new expected credit losses model that replaces the incurred loss impairment model of IAS 39. For financial
lease term only when the Group is reasonably certain to exercise these options.
liabilities there are no changes to classification and measurement except for the recognition of changes in own credit risk in OCI,
for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing The lease liabilities are subsequently measured at amortised cost using the effective interest rate method. They are remeasured
the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument when there is a change in future lease payments arising from a change in fixed lease payments or an index or rate, change in
and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. the Group's estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option. The corresponding adjustment is made to
The adoption of IFRS 9 from January 1, 2019 by the Group has resulted in change in accounting policies. The Group has applied the carrying amount of the respective right-of-use asset, or is recorded in profit or loss if the carrying amount of that right-of-use
IFRS 9 retrospectively in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". However, asset has been reduced to zero.
it has elected not to restate comparative information as permitted under the transitional provisions of the standard considering
there being no material impact of the same. Right-of-use assets are initially measured based on the initial amount of the lease liabilies adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
Loans, deposits, and other receivables, accrued interest and cash and cash equivalents, which were previously classified as the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received. The
loans and receivables under IAS 39, will now be classified as amortised cost under IFRS 9. Further, short-term investments right-of-use assets are depreciated on a straight line method over the lease term as this method most closely reflects the expected
which were previously classified as held-for-trading under IAS 39 will now be classified as fair value through profit or loss. There pattern of consumption of future economic benefits. The carrying amount of the right-of-use asset is reduced by impairment
have been no changes to the classification of financial liabilities. Furthermore, there were no changes to the carrying values of losses, if any, and adjusted for certain remeasurements of the corresponding lease liability.
the Group's financial assets and liabilities for current and prior year balances from adopting the new classification model under
IFRS 9.
The Group has adopted IFRS 16 retrospectively from January 1, 2019, but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in the standard. The impact of adoption of this standard is, therefore, - the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
recognised in the opening consolidated statement of financial position on January 1, 2019.
b) Standards, interpretations and amendments to approved accounting standards that are not yet effective
On adoption of IFRS 16, the Group recognised lease liabilities which had previously been classified as ‘operating leases’ under the
principles of IAS 17 "Leases". These liabilities were measured at the present value of the remaining lease payments, discounted There are certain new standards, interpretations and amendments to approved accounting standards that will be mandatory
using the lessee’s incremental borrowing rate as of January 1, 2019. for the Group's annual accounting periods beginning on or after July 1, 2019 and may have an impact on the consolidated
condensed interim financial statements of the Group. At present, the impact of application of these standards, amendments
The right-of use assets of Group were measured at the amount equal to the lease liability, adjusted by the amount of prepaid lease
and interpretations on the Group's future financial statements is being assessed.
payments recognised in the unconsolidated condensed interim statement of financial position immediately before the date of initial
application, accordingly, there is no impact on the opening balances of unappropriated profit as on January 1, 2019. The recognised
3.6 Earlier, the Securities and Exchange Commission of Pakistan (SECP) vide its circular dated June 22, 2009 deferred the
right-of-use assets relates to the office space and land for infrastructure towers acquired on rental basis. In case of Ethylene storage
implementation of IFRIC 4 to all companies to facilitate corporate sector as the application would involve complex calculations
tanks, the right-of use assets were measured on a retrospective basis at its carrying amounts as if IFRS 16 had been applied since
and materially affect the status of the assets, available profits and distribution of dividends to the shareholders which would in
the commencement date of the respective leases, but discounted using the lessee’s incremental borrowing rate at the date of initial
application. turn effect the overall financing of the companies. Engro Powergen Qadirpur Limited (EPQL), a subsidiary of Engro Energy
Limited and Engro Elengy Terminal (Private) Limited (EETPL) , a subsidiary of Elengy Terminal Pakistan Limited, have applied to
(Unaudited) (Unaudited)
the SECP for exemption from the application of IFRS 16 citing the afore-mentioned issues and prepared their respective
June 30, January 1,
condensed interim financial statements without accounting for IFRS 16. The management of EPQL and EETPL is confident that
2019 2019
an exemption shall be granted by the SECP in this regard. These consolidated condensed interim financial statements have
--------------(Rupees)-------------
been prepared accordingly.
The recognised right-of-use assets relate to the
following types of assets:
3.7 Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit
or loss.
Buildings and infrastructure 1,145,271 1,289,242
Storage tanks - Ethylene 2,587,100 2,778,739
Total right-of-use assets 3,732,371 4,067,981
4. BASIS OF CONSOLIDATION
The change in accounting policy affected the following items in the statement of financial position on January 1, 2019: 4.1 The condensed interim financial statements of the subsidiary companies have been consolidated on a line by line basis. The
carrying value of investments held by the Holding Company is eliminated against the subsidiaries' share capital and pre-acquisition
---Rupees--- reserves.
Right of Use assets - increased by 4,067,981
Unappropriated profits - decreased by 1,898,034 4.2 Non-controlling interest has been presented as a separate item in these consolidated condensed interim financial statements.
Deferred tax asset- increased by 743,047 All material intercompany balances and transactions have been eliminated.
Lease liabilities - increased by 6,709,062
4.3 The Group's interest in jointly controlled and associated entities i.e. Engro Vopak Terminal Limited, Engro Foods Limited, Sindh
Practical expedients applied Engro Coal Mining Company Limited, GEL Utility Limited and Siddiqsons Energy Limited has been accounted for using the equity
method.
In applying IFRS 16 for the first time, they have used the following practical expedients permitted by the standard:
4.4 These consolidated condensed interim financial statements are presented in Pakistan Rupees, which is the Holding Company's
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics, functional currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
- the accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term
the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized
leases,
in the statement of comprehensive income, except where such gains and losses are directly attributable to the acquisition,
- the exclusion of initial direct costs for the measurement of the right-of-use assets at the date of initial application, and construction or production of a qualifying asset, in which case, such gains and losses are capitalized as part of the cost of that
asset.
6.1 This represents investment made during the period by Engro Energy Limited (EEL), a wholly owned subsidiary, in Sindh Engro
2019 2018
--------------(Rupees)------------- Coal Mining Company Limited and Siddiqsons Energy Limited.
5. PROPERTY, PLANT AND EQUIPMENT
7. DERIVATIVE FINANCIAL ASSET
Operating assets, at net book value (notes 5.1 and 5.2) 102,860,085 105,138,798
Capital work in progress - Expansion and other projects (note 5.3) 140,169,101 98,326,481
Capital spares and standby equipments 2,322,796 943,599 During the period, Engro Polymer & Chemicals Limited, a subsidiary company, has entered into Forward Exchange agreement
245,351,982 204,408,878 on Import Letter of Credit to manage exchange rate exposure on foreign currency payments amounting to CNY 152,000 due
5.1 Following additions including transfers from CWIP to operating on account of purchase of machinery for expansion projects.
assets during the period / year:
8. SHARE CAPITAL
Land 261,528 26,938
Plant and machinery 1,711,014 6,284,288
Building and civil works including pipelines 48,682 153,748 During the period, the Holding Company:
Furniture, fixture and equipment 309,293 620,112
Catalyst - 213,900
- increased its authorised share capital from Rs. 5,500,000 to Rs 7,000,000; and
Vehicles 139,301 251,104
Jetty - 6,133
Dredging - 116,758 - issued bonus shares in the ratio of 1 shares for every 10 shares held, totaling the number of issued, subscribed and paid-up
2,469,818 7,672,981 shares to 576,163,230 (December 31, 2018: 523,784,754).
5.2 During the period, assets costing Rs. 70,074 (December 31, 2018: Rs. 102,833), having net book value of Rs. 30,240 (December 31,
9. NON CONTROLLING INTEREST
2018: Rs. 18,183) were disposed / written-off for Rs. 46,635 (December 31, 2018: 40,830).
June 30, December 31, During the period, Engro Powergen Thar (Private) Limited (EPTL), subsidiary of EEL, has issued 123,593,943 fully paid preference
2019 2018 shares of Rs. 10 each as fully paid right shares. These preference shares are cumulative, non-redeemable, non-convertible,
--------------(Rupees)-------------
non-participatory, non-voting and carry dividend at the rate of 11% US Dollars Internal Rate of Return (IRR). These preference
5.3 Capital work in progress - Expansion and other projects
shares have been classified in equity as per the requirements of the Companies Act, 2017.
Balance at beginning of the period / year 98,326,481 52,994,469
Additions during the period / year 44,316,538 53,072,911 Under the Articles of Association of EPTL, the dividend in respect of preference shares shall be paid, only if in any half financial year;
Transferred to:
- operating assets (2,447,344) (7,603,696)
- intangible assets (26,574) (134,505) - ETPL has made a profit after tax;
- capital spares - (2,698)
Balance at end of the period / year 140,169,101 98,326,481 - any and all losses incurred by ETPL have been fully recouped; and
- the Board of Directors has made a good faith determination setting aside out of the available profits for distribution, a sum
2019 2018 for EPTL’s investment and other cash needs over the next two financial half-years.
--------------(Rupees)-------------
6. LONG TERM INVESTMENTS In addition, there would be no payment of dividend before the commencement of commercial operations. As per the arrangement
with the preference shareholder, coupon rate will be determined after Commercial Operation Date such that the preference
Balance at beginning of the period / year 31,590,380 32,195,681
Add: shareholder gets 11% IRR in US Dollar terms over the term of investment. If no adjustment is made in preference shares coupon
- Investment in associates (note 6.1) 384,030 713,042 and 11% annual return is assumed on preference shares from the date of investment, the cumulative dividend on preference
- Share of profit for the period / year 690,187 1,484,326 shares as on June 30, 2019 amounts to Rs. 3,658,751 (December 31, 2018: Rs. 2,484,685) which has not been recognized in
Less:
this consolidated condensed interim financial statements.
- Dividend received during the period / year (540,000) (1,292,430)
- Provision against tax contingency - (1,355,679)
- Provision for impairment - (154,560)
Balance at end of the period / year 32,124,597 31,590,380
10. BORROWINGS 11.1 Contingencies
10.1 Engro Corporation Limited 11.1.1 During the period:
The outstanding balance of Rs. 1,000,000 as at period end represents amount raised from general public against the issuance - the Holding Company pledged shares of Engro Fertilizers Limited and Engro Foods Limited against the Standby Letter of
of Engro Islamic Rupiya Certificates - II having a tenure of 60 months with a profit rate of 13.5% per annum payable semi-annually Credit (SBLC) provided by Engro Energy Limited, a wholly owned subsidiary, have been replaced by Treasury Bills amounting
maturing on July 10, 2019. Subsequent to the reporting date, the entire outstanding balance along with markup thereon was to Rs 7,250,000; and
repaid to the certificate holders.
- the amount of Equity SBLC provided in connection with Engro Powergen Thar (Private) Limited has been reduced to USD
10.2 Engro Polymer and Chemicals Limited (EPCL) 138 (December 31, 2018: USD 17,827) (in PKR equivalent).
During the period, EPCL, a subsidiary company: 11.1.2 In the year 2017, the High Court of Islamabad in its order dated June 8, 2017 declared that the income derived by M/s
Snamprogetti Engineering (the Contractor) from its contract with EFert, is subject to tax as per Clause 4 of Article 5 of Double
- has reprofiled its debt structure through issuance of sukuk bonds of Rs. 8,750,000. These bonds carry a quarterly rental Taxation Treaty between Pakistan and the Netherlands. As per the terms of the contract, EFert is liable to reimburse the Contractor
rate of 3 months KIBOR + 0.9% and are repayable over a period of 7.5 years with the first repayment commencing in June for any taxes applied to the income of the Contractor under the contract by the taxation authorities. In respect thereof, the
2024. Contractor preferred an appeal in the Supreme Court of Pakistan (SCP). During the period, the SCP decided the case on
ex-parte basis against the Contractor. A review application for case restoration has been filed with SCP. The management of
- made an early repayment of the long term loans amounting to Rs. 7,500,000 outstanding as at December 31, 2018. EFert based on the opinion of its legal counsel feels that the chances of restoration application being allowed by SCP are good.
Hence, no provision has been made in this respect.
10.3 Engro Powergen Thar (Private) Limited (EPTL)
11.1.3 During the period, EEL furnished 10 bank guarantees amounting to USD 50 each, to Baluchistan Power Development Board to
- As at June 30, 2019, under the USD Facility Agreement with foreign banks, EPTL has made draw down of USD 545,462 acquire Letter of Intents / development rights for 50MW x 10 project sites located in Chagai corridor (area of Baluchistan). These
(December 31, 2018: USD 504,731), while the undrawn amount is USD 75,538 (December 31, 2018: USD 116,269). gurantees shall expire in February 2021.
- As at June 30, 2019, EPTL has made the total draw down in respect of its local currency long term financing facilities of Rs. 11.1.4 On June 27, 2019, EEL furnished a bank guarantee amounting to Rs. 100,000 expiring on October 4, 2019, to Frontier Works
22,476,597 (December 31, 2018: Rs. 18,846,597) while the undrawn amounts are equal to Rs. 1,673,403 (December 31, Organization (FWO) along with a proposal for participation as equity partner for the white oil pipeline project being developed by
2018: Rs. 5,303,403). FWO.
10.4 Engro Fertilizers Limited (EFert) 11.2 Commitments
During the period, principal repayments of long term loan from various banks and subordinated sukuk aggregating to Rs. 2,432,042 11.2.1 Commitments in respect of capital expenditure contracted but not incurred amount to Rs. 18,144,814 (2018: Rs. 23,026,122).
were made by EFert.
11. CONTINGENCIES AND COMMITMENTS
Significant changes in the status of contingencies and commitments reported in the audited annual consolidated financial
statements for the year ended December 31, 2018 are as follows :
12. EARNINGS PER SHARE - BASIC AND DILUTED 14. CASH AND CASH EQUIVALENTS
(Unaudited) --------------(Unaudited)-------------
Quarter ended Half year ended June 30, June 30,
2019 2018
June 30, June 30, June 30, June 30,
--------------(Rupees)-------------
2019 2018 2019 2018
(Rupees) Cash and bank balances 22,493,543 11,797,811
There is no dilutive effect on the basic earnings per share Short term investments 66,446,029 71,456,889
on the Holding Company, which is based on the following: Short term borrowings (7,291,964) (6,172,546)
81,647,608 77,082,154
Profit for the period, attributable to the
owners of the Holding Company: 2,865,609 1,897,765 6,875,591 6,091,417 15. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
Number of shares 15.1 Financial risk factors
Weighted average number of ordinary (Restated) (Restated)
shares (in thousand) 576,163 576,163 576,163 576,163 The Group's activities expose it to a variety of financial risks including market risk (currency risk, interest rate risk and other price
risk), credit risk and liquidity risk.
--------------(Unaudited)-------------
Half year ended There have been no changes in the risk management policies during the period, consequently these consolidated condensed
interim financial statements does not include all the financial risk management information and disclosures required in the annual
June 30, June 30,
financial statements.
2019 2018
--------------(Rupees)-------------
15.2 Fair value estimation
13. CASH GENERATED FROM OPERATIONS
The table below analyzes financial instruments carried at fair value by valuation method. The different levels have been defined
Profit for the period before taxation 19,197,642 16,246,119 as follows:
Adjustment for non-cash charges and other items: - Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
Depreciation and amortization 4,499,907 3,905,700 - Inputs other than quoted prices included within level 1 that are observable for the asset or
Gain on disposal of property, plant and equipment (16,370) (13,503) liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2)
Provision for retirement and other service benefits 152,115 84,152
Income on deposits / other financial assets 4,670,197) (2,317,418) - Inputs for the asset or liability that are not based on observable market data (Level 3)
Reversal of provision for Workers Welfare Fund - (509,766)
Share of loss / (income) from joint venture and associates (690,187) 501,605 Level 1 Level 2 Level 3
Finance cost 3,350,399 1,830,554 -----------------------(Rupees)-----------------------
Loss on foreign currency translations 1,711,275 564,877 Assets
Working capital changes (note 13.1) 23,232,941 6,184,662 Financial assets at fair value
through profit and loss
46,767,525 26,476,982
13.1 Working capital changes
- Short term investments 10,893,352 64,249,127 -
(Increase) / Decrease in current assets - Derivative financial asset 379,388 - -

- Stores, spares and loose tools 57,097 (172,091)
- Stock-in-trade 5,020,383 (552,728) - There were no transfers between Levels during the period. Further, there were no changes in valuation techniques during
- Trade debts (2,520,559) (593,450) the period.
- Loans, advances, deposits and prepayments 618,105 (368,698)
- Other receivables - net 442,986 1,170,659 Level 2 fair valued instruments comprise of fixed income placements and treasury bills which have been valued using discounted
cash flow model.
3,618,012 (516,308)
Increase / (Decrease) in current liabilities 15.3 Fair value of financial assets and liabilities
- Trade and other payables, including other service benefits - net 19,614,929 6,700,970
23,232,941 6,184,662 The carrying value of all financial assets and liabilities reflected in these consolidated condensed interim financial statements
approximate their fair value.
16. TRANSACTIONS WITH RELATED PARTIES 17. SEGMENT REPORTING
17.1 A business segment is a group of assets and operations engaged in providing products that are subject to risk and returns that
Related parties comprise of parent company, joint venture companies, associates, retirement benefit funds, directors and key are different from those of other business segments.
management personnel. Details of transactions with related parties during the period, other than those which have been disclosed
elsewhere in these consolidated condensed interim financial statements, are as follows: Type of segments Nature of business
--------------(Unaudited)-------------
Half year ended Fertilizer Manufacture, purchase and market fertilizers.
June 30, June 30,

Polymer Manufacture, market and sell Poly Vinyl Chloride (PVC), PVC compounds,
2019 2018 Caustic Soda and related chemicals.
--------------(Rupees)-------------
Food Manufacture, process and trade all kinds of raw and processed agricultural products.
Parent Company
Dividend paid 1,891,234 1,160,087 Power and mining Includes Independent Power Projects (IPP).
Reimbursements to Parent Company 130,629 7,646

Other operations Includes chemical terminal and storage services.
Associated companies and joint ventures 17.2 Liabilities are reported segment-wise to the Board of Directors on an annual basis. Hence, segment-wise details of liabilities
Purchases and services 3,429,151 2,503,163 have not been presented in these consolidated condensed interim financial statements.
Dividends received 540,000 617,430
Dividends paid 352,822 888,813 17.3 Information regarding the Group's operating segments is as follows:
(Unaudited)
Contribution for Corporate Social Responsibility 20,500 62,000
Quarter ended Half year ended
Payment against EPC contract 11,710,404 12,535,052
June 30, June 30, June 30, June 30,
Reimbursements from 168,299 102,124 2019 2018 2019 2018
Reimbursements to 143,132 109,619 (Rupees)
Loan received 263,039 393,187 Revenue
Loan paid - 165,915
Fertilizer 26,990,496 22,897,535 50,642,948 41,116,414
Mark-up on borrowings 111,398 98,680
Polymer 9,256,687 8,414,411 18,600,321 17,101,613
Finance cost paid - 62,633
Food 987,033 691,096 1,747,069 1,649,019
Share capital issued 4,560,529 1,982,350 Power and mining 4,043,380 3,206,786 7,421,837 6,063,364
Others 11 19 Other operations 4,606,534 3,628,400 11,784,889 9,461,284
Elimination - net (542,372) (630,026) (4,207,948) (3,658,617)
Key Management Personnel Consolidated 45,341,758 38,208,202 85,989,116 71,733,077
Remuneration paid to key management personnel / Directors 612,580 522,296
Profit / (Loss) for the period
Reimbursement of expenses 35,904 559
Directors fees 73,990 29,094 Fertilizer 3,177,360 3,259,781 7,184,175 7,149,376
Dividend paid 87,663 36,245 Polymer 450,236 1,335,562 1,544,394 2,783,671
Profit on Engro Islamic Rupiya Certificates 9,804 9,784 Food (123,951) 100,543 (84,484) 226,891
Power and mining 40,695 888,998 579,967 1,315,171
Other operations 1,372,710 702,691 6,026,605 4,369,335
Contribution for retirement benefits 372,401 324,496
Elimination - net 462 (2,070,016) (3,768,218) (4,789,523)
Consolidated 4,917,512 4,217,559 11,482,439 11,054,921
(Amounts in thousand) (Unaudited) (Audited)
2019 2018
--------------(Rupees)-------------
Assets
Fertilizer 118,294,992 117,721,049
Polymer 43,547,544 36,023,287
Food 31,611,970 31,554,174
Power and mining 177,175,763 133,172,457
Other operations 113,547,725 108,912,608
Elimination - net (38,141,064) (34,228,807)
446,036,930 393,154,768
18. NON-ADJUSTING EVENT AFTER BALANCE SHEET DATE
18.1 The Board of Directors of the Holding Company in its meeting held on August 20, 2019 has approved an interim cash dividend
of Rs. 8.00 per share for the year ending December 31, 2019. These consolidated condensed interim financial statements does
not include the effect of the said interim dividend.
18.2 The Board of Directors of Engro Vopak Terminal Limited, a joint venture company, in its meeting held on July 30, 2019 has
declared an interim cash dividend of Rs. 6.00 per share for the year ending December 31, 2019. These consolidated condensed
interim financial statements does not include the effect of the said interim dividend.
19. SEASONALITY
19.1 The Group's fertilizer business is subject to seasonal fluctuations as a result of two different farming seasons viz, Rabi (from
October to March) and Kharif (from April to September). On an average fertilizer sales are more tilted towards Rabi season. The
Group manages seasonality in the business through appropriate inventory management.
19.2 "The Group's agri business is subject to seasonal fluctuation as majority of paddy / unprocessed rice is procured during the last
quarter of the year which is the harvesting period for all rice varieties grown in Pakistan. However, rice is sold evenly throughout
the year. The Group manages seasonality in the business through appropriate inventory management.
20. CORRESPONDING FIGURES
20.1 In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting', the consolidated
condensed interim statement of financial position has been compared with the balances of annual audited financial statements
of preceding financial year, whereas, the consolidated condensed interim statement of profit or loss, the consolidated condensed
interim statement of comprehensive income, the consolidated condensed interim statement of changes in equity and the
consolidated condensed interim statement of cash flows have been compared with the balances of comparable period of
immediately preceding financial year.
20.2 Corresponding figures have been rearranged and reclassified, wherever considered necessary, for the purpose of comparison,
the effects of which are not material.
21. DATE OF AUTHORIZATION
These consolidated condensed interim financial statements were authorized for issue on August 20, 2019 by the Board of
Directors of the Holding Company.
Abdul Samad Dawood Hasnain Moochhala Ghias Khan

Vice Chairman Chief Financial Officer President and Chief Executive
Engro Corp. | Second Quarter Report 2019

Second Quarter Accounts 2019

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second quarter accounts 2019

Engro Corp. | Second Quarter Report 2019 03

Engro Corp. | Second Quarter Report 2019 05

Introduction aware of all significant matters that might be identified in an

The figures of the unconsolidated condensed interim

We conducted our review in accordance with International

Engro Corp. | Second Quarter Report 2019 07

Operating profit 1,800,622 1,564,404 6,466,015 5,363,197

Contingencies and Commitments 12

Transactions with owners Payment of financial charges (60,706) (68,516)

Lease liabilities - increased by 1,121,428 1,222,538

Long term portion of lease liability 887,340 1,013,691

Increase in finance cost (66,180)

Operating assets (note 4.1) 327,828 337,501

Engro Corp. | Second Quarter Report 2019 17

During the period, the Company: Current

Engro Corp. | Second Quarter Report 2019 19

Short term investments 51,915,739 58,057,907

Engro Corp. | Second Quarter Report 2019 21

Engro Corp. | Second Quarter Report 2019 23

Current assets Total Equity 192,775,918 185,587,239

TOTAL EQUITY AND LIABILITIES 446,036,930 393,154,768

Profit for the period 4,917,512 4,217,559 11,482,439 11,054,921

Profit for the period - - - - - - - 6,091,417 - 6,091,417 4,963,504 11,054,921

Share issuance cost - - - - - - - (5,586) - (5,586) (14,869) (20,455)

Dividend by subsidiaries allocable to Non-Controlling interest - - - - - - - - - - (5,141,585) (5,141,585)

Shares issued during the period - net of

Bonus shares issued during the period in the

10. BORROWINGS 11.1 Contingencies

10.1 Engro Corporation Limited 11.1.1 During the period:

10.4 Engro Fertilizers Limited (EFert) 11.2 Commitments

11. CONTINGENCIES AND COMMITMENTS

(Increase) / Decrease in current assets - Derivative financial asset 379,388 - -

16. TRANSACTIONS WITH RELATED PARTIES 17. SEGMENT REPORTING

June 30, June 30,

Reimbursements to Parent Company 130,629 7,646

18. NON-ADJUSTING EVENT AFTER BALANCE SHEET DATE

20. CORRESPONDING FIGURES

21. DATE OF AUTHORIZATION

Abdul Samad Dawood Hasnain Moochhala Ghias Khan

Engro Corp. | Second Quarter Report 2019

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