National University of Modern Languages

Department of Management Science

Sector H-9 ISLAMABAD
SUBMI!D B"# Adeel A$%er
&oll No' ()9*+


1
2
NATIONAL UNIVERSITY OF MODEREN
LANGUAGE
It is hereby certified that the report has been thoroughly and
carefully read and recommended to the Faculty of Management
Sciences for acceptance of Final Project Report by Adeel Azher
Roll !o" 1#$%2 Session &'an 2#1# to 'une 2#1() Morning in
partial fulfillment of the re*uirements for the degree of Master of
+usiness Administration of !ational ,ni-ersity of Modern
.anguages Islamabad"
/ated0
Super-isor0 111111111111111111111111111111
2bser-er0 111111111111111111111111111111
3ead of /epartment0 111111111111111111111111111111
TABLE OF CONTENTS
CHAPTER # 1
(

INTRODUCTION
Introduction of sugar industry
CHAPTER # 2

HISTORY 1DW SUGAR MILL LTD
4ision
Mission Statement
Strategy
Introduction of the 5ompany
Products
CHAPTER # 3
ORGANIZATIONAL ANALYSIS
S627 Analysis
P8S7 Analysis
+alance Sheet
Profit And .oss Account
3orizontal And 4ertical Analysis
Ration Analysis
CHAPTER # 4
INTERNSHIP EXPERINCE
5oncerned /epartment Information
/uties 9 Responsibilities
:
Accomplishment ; Achie-ements
S<ill Ac*uired
3o= 8>perience Impact My 5areer
Pros 9 5ons
Possible Problems
CHAPTER # 5
Suggestions and recommendation
5onclusion
Reference
?
CHAPTER 1
INTRODUCTION OF SUGAR INDUSTRY IN
PAKISTAN
An Introduction to Pakistan`s Sugar Industry
Pa<istan is the ?
th
largest country in the =orld in terms of area
under sugar cane culti-ation 11
th
by production and @#
th
inA yield"
Sugarcane is the primary ra= material for the production of sugar"
Since independence the area under culti-ation has increased more
rapidly than any other major crop" It is one of the major crops in
Pa<istan culti-ated o-er an area of around one million hectares"
7he sugar industry in Pa<istan is the 2
nd
largest agro based industry
comprising B1 sugar mills =ith annual crushing capacity of o-er
@"1 million tones" Sugarcane farming and sugar manufacturing
contribute significantly to the national e>che*uer in the form of
-arious ta>es and le-ies" Sugar manufacturing and its byCproducts
ha-e contributed significantly to=ards the foreign e>change
resources through import substitution"
Key Facts
!o" of Mills B1 &%1C
2perational 2C,nder 5onstruction :C5ompleted)
5rushing 5apacity @"1 Milluion
tones
@
5ontribution to 8conomy ("# D :"#
Million 7onnes
C Share in E/P 1"$F
C 8mployment 1"? million
&directly 9 indirectly)
C 7otal In-estment PGR 1##
+illion &Appro>)
A-erage Hield Per 3ector :@"B 7onnes
7otal 5ane Production :?"# D ??"#
Million 7onnes
5ane A-ailable (#C:( Million
7onnes
A-erage reco-ery of sugar $"1 &-s" =orld
a-g" 1#"@F)
Per 5apita 5onsumption 2?"B <gs" Per
capita
5ontribution to e>che*uer Rs" 12"1@
+illion
Cane Sugar Yield of World
5ountry 5ane Hield
&7;ha)
Sugar Reco-ery
&F)
Sugar Hield
&t;ha)
Australia
8gypt
+razil
,SA
5olombia
Me>ico
India
Pa<istan
6orld A-g"
1##":
11#"B
@B":
B#"2
B#"?
%$"?
@@"$
:$"#
@:":
1("B
11"?
1:"?
11"%
11"?
11"@
$"$
$"2
1#"@
1("B?
12"%:
$"$1
$"(B
$"2@
$"22
@"@:
("?:
@"B2
%
Pakistan Sugarcane Area and Yield
Year
Area (000
Ha)
Produced
000 Tonnes
Yield per
Hectare
Utilization
by Sugar
Mills
2000-01 $@#"# :(@2# :?": @%":%
2001-02 $$$"% :B#:1 :B"1 %@"((
2002-03 1#$$"% ?2#:$ :%"( B#"2B
2003-04 1#%:"B ?(B## ?#"1 B1"1?
2004-05 $@@": :(?(( :?"# %("%:
2005-06 $#%"# ::2$2 :B"B @%"$:
Sugarcane Production and Recovery
Year
Cane Crushed
Tonnes
Sugar Made
Tonnes
Recovery
2000-01 2$:#BB%$ 2:@@%BB B"($F
2001-02 (@%#B@(B (1$%%:? B"%1F
2002-03 :1%B@@B$ (@?2%:? B"%:F
2003-04 :(@@1(%B ($$%#1# $"1?F
2004-05 (21#1%($ 2$2212@ $"1#F
2005-06 (##$#@(2 2?BB1%@ B"?$F
Sugar Production by type of raw Material &In 7onnes)
Year Sugarcane Beet Raw Total
2000-01 2:@@%BB 1%2%@ ?(1$(# 3,015,994
2001-02 (1$%%:? 2$1%2 22111 3,249,028
2002-03 (@?2%:? 22#@@ 1$:? 3,676,759
2003-04 ($$%#1@ 2(%$@ C 4,020,806
B
2004-05 2$2212? 11(%( 1B2(#( 3,115,801
2005-06 2?BB1%@ B$(: :#1($@ 2,998,506
8 0 8stimated !"A" 0 !ot A-ailable
Industry Scenario
Sugar industry is mostly located in the rural areas of Punjab and
Sindh" A small percentage of total production is produced in the
!6FP" Pre-iously Punjab =as partly dependent on supply of
sugar from Sindh but lately the establishment of some large scale
units in Punjab has made the Pro-ince selfCsufficient in the
commodity"
Sugar production is seasonal acti-ity" 7he mills at an a-erage
operate for 1?# days and supplies are made throughout the year"
As the industry no= has large daily crushing capacity there are
efforts to e-en further reduce"
Province wise sugar production &In 7onnes)
Provinc
e
2005-06 2004-05 2003-04 2002-03 2001-02
Punjab
1B(222
B
21B2((
#
2?$$:$
#
2(?11#
2
21?21%
?
Sindh
1#(B12
2
B#1#@(
12212@
B
11?B@%
:
$:#$?$
!6FP 12B1?% 1(2:#% 1%@2?2 1@@$B( 1#:@11
TOTAL
2,998,50
7
3,115,80
1
3,997,01
0
3,676,75
9
3,197,74
5
$
EXPORT OF SUGAR, MOLASSES AND ETHYL
ALCOHOL
Year Quantity (Tonnes) Value (In 000 Rs.)
S
u
g
a
r
2###
C#1
C C
2##1
C#2
C C
2##2
C#(
:?@@$ @2%$:$
2##(
C#:
11@1%? 1?B$21#
2##:
C#?
?:%%1 1#2B%1#
M
o
l
a
s
s
e
s
2###
C#1
11$##12 2:?@?%(
2##1
C#2
1@#%(B# (B$BB##
2##2
C#(
12%2@(# 2@?2$%?
2##(
C#:
1:?%2B( 2@$B$@:
2##:
C#?
11?1:(1 :2$%@1%
E
t
h
y
l

A
l
c
o
h
o
l
Year Quantity (Liters) Value (In 000 Rs.)
2###
C#1
1##@1### 2#B#B2
2##1
C#2
1:?$:### (:1:(B
2##2
C#(
1@(:1?%? (:2@?B
2##(
C#:
(?$21#@? @$2B:#
2##:
C#?
(@@@$@BB 1#@%::?
It can be seen from the abo-e that there e>ists tremendous
potential for e>port of sugar molasses and ethyl alcohol" In
1#
particular molasses needs to be mentioned here as it has sho=n
regular e>ports o-er the last fe= years"
7he major buyers are !etherlands ,G Eermany Spain Italy and
Gorea" !etherlands is the biggest buyer =ith o-er :#F share in
o-erall e>ports"
Import of Refined Sugar
Year
Quantity
(Tonnes)
Value
(In 000 Rs.)
2000-01 930,142 14,488,243
2001-02 85,037 1,472,326
2002-03 8,315 152,746
2003-04 11,398 188,509
2004-05 266,707 5,288,976
2005-06 1,527,322 37,365,929
Investment Opportunities
Impro-ement in sugar crop yield through R9/ and
planning
Impro-ement in procurement and storage to reduce
=astages
8>port potential of sugar;molasses
/e-elopment of Industries for proper utilization of byC
products by adding e*uipment &distillery chipboard etc") =hich
can earn ; enhance re-enues"
+lending of fuel ethanol =ith petrol"
11
Po=er coCgeneration by the sugar industry using bagass
12
CHAPTER 2
HISTORY OF 1DW SUGAR MILL
1(
VISION STATEMENT
~To become a market leader in the Industry setting
out high quality standards for the Company and
others to follow
1:
Mission
To be the market leader and a world-class
organization
by meeting and proactively anticipating customer
needs.
To maximize the wealth of stakeholders by
optimizing
the long term returns and growth of the business.
To be amongst the most efficient and lowest cost
producers in the industry.
To ensure a safe, harmonious and challenging
working
Environment for the employees.
1?
Strategy
To grow our base business
In sugar and build those
Related activities where there
Is opportunity to smooth the
Impact of sugar price cycles.
To produce sugar which
is of highest international
Standards"
To make investment in
sugarcane crop to ensure
regular supply of cane and
profitability of growers.
To offer equal and fair
growth opportunities to all
employees.
To undertake and support
community development and
1@
welfare projects in order to
fulfill social commitments.
INTRODUCTION OF THE COMPANY:
'/6 Sugar Mills limited =as incorporated as pri-ate limited
company on May (1 1$$# under the company ordinance 1$B:"
7he company =as later con-erted into public limited company on
August 2: 1$$1 and shares =ere floated on the Garachi and
.ahore Stoc< 8>changes during August 1$$2"
'/6 starts its operations firstly in 1$$2 =ith one plant and its
factory area is almost 1## acres" !o= it has t=o plants the
capacity of first plant is B### tones crushing per day and second
plant is 12### tones crushing per day" First Plant costs B# crores
in 1$$2 and Second plant costs 12( crores in 2##:"
7he main objecti-e of the company is to manufacture and sale of
=hite crystalline sugar and other related objects as set out in the
Memorandum of Association of the company
PLANT:
Initially the plant =as set up =ith a capacity of :### 75/ ha-ing
1## acres area =hich =as e>tended to @### 75/ and
subse*uently the plant capacity has been enhanced to B### 75/"
A !e= 7andem is also installed of the capacity 1#### 75/" !o=
the total crushing of cane is 1B### 7ons 5rush per /ay"
1%
RAW MATERIAL
In Pa<istan t=o =ays of Sugar preparation
!oC 1 =ith Sugar 5ane
!oC 2 =ith +eet
Rahim Har Ghan is -ery fertile for sugar cane" 7he a-erage yield is
about 1### Maunds;Acres &Appro>)" /ue to this the priority Sugar
5ane is most beneficial source for this industry" 7he effort of
'/6 staff to de-elop the gro=er for getting more share of the
mar<et and seller satisfaction '/6 introduce the loaning policies
for gro=er on the basis of no interest" 7he cane department is -ery
acti-e for getting the ma>imum share of ra= material for the
factory" 7his department is adopting -alue chain process for
getting more result for the factory and fastest communication for
the gro=er and production staff"
Products:
'/6 Sugar Mills products include 7able Sugar Molasses +agasse
and Press Mud
Table Sugar:
Sugar term applied loosely to any of a number of chemical
compounds in the carbohydrate group that are readily soluble in
=aterA are colorless odorless and usually crystallizableA and are
more or less s=eet in taste" Sugar is also <no=n as Sucrose" 7able
sugar is one of the common food items =hich ha-e a -ery huge
demand"

Molasses:
1B
Molasses or +lac<strap molasses is the residual li*uid food
obtained in the manufacturing of ra= sugar" 7he cane juice or
mother li*uor after ha-ing been purified is concentrated into a
thic< mass" As the sugar crystallizes this mass is passed through a
centrifuge =hich allo=s the mother li*uor to pass through but
retains the crystallized sugar" 7he resulting molasses is -ery dar<
and has a robust some=hat bitterCtart fla-or"
Bagasse:
+agasse is the fibrous matter that remains after sugarcane or
sorghum stal<s are crushed to e>tract their juice" It is currently
used as a biofuel and as a rene=able resource in the manufacture of
pulp and paper products and building materials" Ea-e +agasse is a
similar material =hich consists of the tissue of the blue aga-es
after e>traction of the sap"
Press Mud:
Press Mud is a =aste produced by the mills" For e-ery tone of
Sugar 5ane appro>imately (# to :# <g Press Mud is produced"
Press Mud is used as manure in the sugarcane fields" /istillery
effluent &-ines) is also mi>ed =ith Press Mud and made into
compost"
1$
CHAPTER 3
ORGANIZATIONAL ANALYSIS
SWOT Analysis
Strengths:
'/6 is a mar<et leader"
2#
'/6 Sugar Mills are in secure areas that is the state of
'/6 o=ners"
7here is no labor union in this organization"
3a-e a =ide setup farms and the land of lin<ed areas is
fruitful for cane production"
3a-e a =ide set up of farms
,sing manpo=er on large scale"
Is in maturity stage in organization life cycle"
'/6 has much e>perienced *ualified and competent
employees in each department"

Weaknesses:
'/6 is using manpo=er on large scale so e>penses are
high"
.ac< of departmental coordination
Opportunity:
6e can use beet as an input in future
After the implementation of car financing scheme transport
matters =ill be sol-e"
In these days there is no situation of drought and reco-ery
of per acer of cane =ill be increase
6e can attract gro=ers from district Ehoti<i as =ell as
Rajan pur
Threats:
May be competition =ill increase
7hey can shift from maturity stage to decline stage
21
7he ad-ertising campaign may be need in future
It is possible that in future =e =ill face s=itching cost"
PEST Analysis
Political Instability:
7he political situation of Pa<istan is not satisfactory" /ue to the
rapid change in the Eo-ernment e-ery go-ernment sets its o=n
ne= trade policies"
Eo-t" should apply sustainable policies for the beneficial of the
e>porters as =ell as the in-estors"
Economic situation:
7he economic condition of Pa<istan can also affect the foreign
in-estors increasing inflation rate ma<e the cost of production high
and thus reduce the profit margin of the in-estor"
Social situation:
7he change in the lifestyle of the people affects the gro=ing
demand of the sugar" 7he change in the lifestyle and needs in
different demographics also affect the demand of the customers"
/ue to all these changes '/6 is performing e>cellent for the
e>cellence organization as =ell as for the customer"
Technological factor:
7echnological ad-ancement in all the sectors of the country has
changed the entire socioCeconomic en-ironment" 8specially in the
Sugar sector there is a lot of technological de-elopment"
'/6 8>cellent computerized machines and de-ices are installed in
the '/6 Sugar mills ha-e made e>tension in its present setup by
installation of =ell ad-anced technology imported from 'apan
5hina and France"
22
Balance Sheet
2010 2009 2008 2007 2006
SHARE CAPITAL & RESERVES
Share capital :B$BB$:%# ::2B:#?%# 381,254,260 (1?(@1$## 2@#(#1?B#
reser-e 2$21#?1%:? 1:1:@#%##$ 1,180,814,247 B$(2B?:22 $1?:2?:B1
3,410,941,515 1,857,447,579 1,562,068,50
7
1,208,647,3
22
1,175,727,06
1
NON CURRENT LIABILITY
.oan from /irectorCunsecured C 260,900,000 260,900,000
260,900,00
0
150,000,000
.ong term financing 2?%1BBBB$# 2,077,777,778 2,200,000,000
2,086,287,8
80
2,169,166,66
6
Payable to ,SM ltd shareholders
245,000,000
.iabilities against assets subject to
finance lease
?2B@@?1$B 329,960,452 353,881,872
328,038,52
0
163,482,459
/eferred ta>ation C 175,286,234
79,710,556 43,959,892
/eferred liabilities 12$?@@2%$% 718,563,062 7,890,204
/eferred income C 3,945,104
12,132,409
4,396,216,885 3,391,146,396 2,997,958,31
0
2,767,069,3
65
2,771,609,01
7
CURRENT LIABILITIES
Short term borro=ingsCsecured 22B?2$#$%1 3,671,524,912 1,970,380,636
2,316,752,8
03
358,023,441
5urrent portion of non current
liabilities
1#1(:B2:@: 591,564,179 154,934,612
447,164,95
2
458,993,001
7rade and other payables @@?($#$@% 667,632,408 1,161,679,843
348,515,31
3
296,580,473
Interest and Mar<up accrued 1(@12$:%$ 172,466,649 95,254,218
155,287,17
1
96,568,476
Pro-ision for ta>ation 2?%$@?2:@ 58,879,777
21,281,831
Total 4,358,259,127 5,162,067,925 3,382,249,30
9
3,267,720,2
39
1,231,447,22
2
12,165,417,527 10,410,661,90
0
7,942,276,12
6
7,243,436,9
26
5,178,783,30
0
ASSETS
NON CURRENT ASSETS
Property plant and e*uipment
3,191,942,9
00
3,094,551,18
7
Operating fixed assets 6,893,409,143 4,726,936,432 3,237,354,576
Capital work in progress 46,062,570 11,579,549 769,240
6,939,471,713 4,738,515,981 3,238,123,81
6
Inest!ent propert" 419,348,133 350,753,636
In-estments 797,572,569 1,313,567,500 1,868,079,683
1,583,808,4
92
986,308,492
Eood=ill 608,310,693 568,545,391
.ong term deposits 84,408,648 48,445,899 36,991,979
33,809,769 19,242,454
1,909,640,043 5,143,195,47
8
4,809,561,1
61
4,100,102,13
3
CURRENT ASSETS
Stores spare parts and tools
391,144,991
283,562,979 159,419,324
149,622,24
6
169,524,190
Stoc< in tradeCfinish goods
206,682,011
1,436,296,905 598,629,031
358,188,76
0
7rade debtsCunsecCconsidered goods 142,956 36,588,056 43,285,232
131,034,56
2
2(
PROFIT AND LOSS ACCOUNT
P AND L ACCOUNT
2010 2009 2008 2007 2006
Sales D net
20,392,207,793 7,572,724,395 6,166,723,4
10
4,237,940,735 4,226,409,88
6
5ost of Sales
(16,744,461,278) #5,670,105,049
$
#4,940,988,6
66$
(3,536,948,16
5)
(3,268,822,87
9)
Eross profit
3,647,746,515 1,902,619,346 1,225,734,7
44
700,992,570 957,587,007
Administrati-e e>p
(344,195,411) #177,689,911$ #116,922,71
9$
(98,730,161) (102,235,214)
/istribution and
mar<eting e>p
(11,956,057) #14,781,631$ #75,020,261$
(5,758,919) (5,381,466)
2ther operating e>pCnet
(212,051,150) #103,133,734$ #60,765,600$
(4,272,078) (15,380,323)
other operating income
47,729,198 23,289,816 39,309,691
80,402,078 3,872,560
6or<ers profit
participation fund
(5,713,756) (22,455,044)
6or<ers =elfare fund (2,171,227) (2,133,229)
(520,473,420) #272,315,460$ #213,398,88
9$
(36,244,063) (143,712,716)
2perating profit
3,127,273,095 1,630,303,886 1,012,335,8
55
664,748,507 813,874,291
Finance cost
(1,168,439,503) #870,430,469$ #560,645,47
9$
(558,358,372) (389,361,680)
Share of loss of associated
companies
(6,957,792)
Profit before ta>ation
1,951,875,800 759,873,417 451,690,376
106,390,135 424,512,611
Taxation
(711,473,399) #257,820,317$ #100,939,17
7$
(35,750,664) (58,303,185)
Profit after ta>ation
1,240,402,401 502,053,100 350,751,199
70,639,471 366,209,426
+asic earning per share
28.20 11%34 9%20
2.24 11.72
/iluted earning per share
28.20 11%34 9%20
2.22 C
2:
Vertical Analysis:
Vertical Analysis of Balance Sheet
Balance Sheet
2010 2009 2008 2007 2006
SHARE CAPITAL
& RESERVES
Share capital
1## $#": %%"B2 @:"(% ?("1(
reser-e
1## :B":( :#":2 (#"?$ (1"(:

NON
CURRENT
LIABILITY
.oan from
/irectorC
unsecured
C 1## 1## 1## ?%":$
.ong term
financing
1## B#"%$ B?"?: B1"112 B:"(:
Payable to ,SM
ltd shareholders
C C C C
.iabilities against
assets subject to
finance lease
1## @2":1 @@"$: @2"#? (#"$2
/eferred ta>ation
C C 1## :?":% 2?"#B
/eferred
liabilities
1## ??":@ "@1 C C
/eferred income
C 1## C (#%"?( C
CURRENT
LIABILITIES
Short term
borro=ingsC
secured
1## 1@#"@@ B@"22 1#1"(B 1?"@%
5urrent portion
of non current
liabilities
1## ?B"(% 1?"2$ ::"122 :?"2$
7rade and other
payables
1## 1##"(: 1%:"?$ ?2"(B ::"?%
Interest and
1## 12@"@$ @$"$% 11:"#%( %#"$:
2?
Mar<up accrued
Pro-ision for
ta>ation
1## 22"B2 C C B"2?
Total
ASSETS
NON
CURRENT
ASSETS
Property plant
and e*uipment
C C C 1## $@"$?
Operating fixed
assets
1## @B"?%1 :@"$@ C C
Capital work in
progress
1## 2?"1($ 1"@% C C
Inest!ent
propert"
1## B("@: C C C
In-estments
1## 1@:"@$ 2(:"22 1$B"?B 12("@@
Eood=ill
1## $(":@ C C C
.ong term
deposits
1## ?%"($ :("B2 :#"#? 22"B1
CURRENT
ASSETS
Stores spare
parts and tools
1## %2"?1 :#"%@ (B"2? :("(:
Stoc< in tradeC
finish goods
1## @$:"$( 2B$"@: 1%("(#: C
7rade debtsC
unsecured
considered goods
1## 2??$: (#2%$ $1@@1 C
Ad-ances
deposits
prepayments and
other recei-ables
1## @#"1B %2"1$1 @?":$ (("(B
&ax ref'nds
fro!
(oern!ent
C 1## C C C
)dan*e
in*o!e tax
C C 1## C C
5ash and ban<
balances
1## (2"(2 2"1$ 2#1"2% :B"$@
100 100 100 100 100
2@
Horizontal Analysis:
Horizontal Analysis of Balance Sheet
Balance
Sheet
2010 2009 2008 2007 2006
SHARE
CAPITAL &
RESERVES
Share capital
:"2%F :"2?F :"BF :"(?:F ?"#2@F
reser-e
2:"#11 1("?$ 1:"B@% 12"((2 1%"@%@

NON
CURRENT
LIABILITY
.oan from
/irectorC
unsecured
C 2"?1 ("2B? ("@#2 2"B$@
.ong term
financing
21":1 1$"$?B 2%"% 2B"B#2 :1"BB@
Payable to ,SM
ltd shareholders
.iabilities
against assets
subject to
finance lease
:"(:@ ("1@$ :":?@ :"?2$ ("1?%
/eferred
ta>ation
C C 2"2#% 1"1##: "B:$
/eferred
liabilities
1#"@? @"$#2 "#$$
/eferred
income
"#(%$ "1@%
CURRENT
LIABILITIES
Short term
borro=ingsC
secured
1B"%B? (?"2@% 2:"B#$ (1"$B: @"$1(
5urrent portion
of non current
liabilities
B"((1 ?"@B2 1"$?1 @"1%( B"B@(
7rade and other
payables
?":% @":1( 1:"@2% :"B11? ?"%2%
Interest and
1"11$ 1"@?% 1"2# 2"1:: 1"B@?
2%
Mar<up accrued
Pro-ision for
ta>ation
2"2#: "?@@ ":11
Total
ASSETS
NON
CURRENT
ASSETS
Property plant
and e*uipment
:":#@ ?$"%?:
Operating
fixed assets
?@"@@: :?":#? :#"%@
Capital work in
progress
"(%$ "111 "##$%
Inest!ent
propert"
("::% ("(@$
In-estments
@"??@ 12"@1% 2("?21 21"B@? 1$"#:?
Eood=ill
?"##( ?":@1
.ong term
deposits
"@$: ":@? ":@@ ":@% "(%1
CURRENT
ASSETS
Stores spare
parts and tools
("21? 2"%2: 2"##% 2"#@@ ("2%(
Stoc< in tradeC
finish goods
1"% 1("%$% %"?(% :"$:?
7rade debtsC
unsecured
considered
goods
"##12 "(?1 "?:? 1"B#$
Ad-ances
deposits
prepayments
and other
recei-ables
22"2?? 1?"@? 2:"@#$ 2:":%% 1%":?2
&ax ref'nds
fro!
(oern!ent
"#1(%
)dan*e
in*o!e tax
"?1:
5ash and ban<
balances
"#B$$ "#(: "##( "#(#: "#1#:
2B

HORIZONTAL PROFIT AND LOSS ACCOUNT
P AND L ACCOUNT 2010 2009 2008 2007 2006
Sales D net 1## 1## 1## 1## 1##
5ost of Sales &B2"112
)
&%:"B%) &B#"12() &B(":?$) &%%":()
Eross profit 1%"BBB 2?"12? 1$"B%% 1@"?:1 22"@?%
Administrati-e e>p &1"@BB) &2"(:@) &1"B$@) &2"(() &2":1$)
/istribution and mar<eting e>p &"#?$) &"1$?) &1"21@) &"1(@) &"12%)
2ther operating e>pCnet &1"#:) &1"(@2) &"$B?) &"1#1) &"(@:)
other operating income "2(: "(#% "@(% 1"B$% "#$1@
6or<ers profit participation fund &"1(?) &"?(1)
6or<ers =elfare fund &"#?1) &"#?#?)
2perating profit 1?"((@ 21"?2$ 1@":1@ 1?"@B 1$"2?%
Finance cost &?"%() &11":$:) &1(":??) &1("1%?) &$"21()
Share of loss of associated companies
&"#(:1)
Profit before ta>ation $"?%2 1#"#(: %"(2? 2"?1 1#"#::
Taxation &(":B$) &(":#?) &1"@(%) &B":(() &1"(%$)
Profit after ta>ation @"#B2 @"@( ?"@BB 1"@% B"@@?
+asic earning per share 2B"2# 11"(: $"2# 2"2: 11"%2
/iluted earning per share 2B"2# 11"(: $"2# 2"22 C
2$
VERTICLE PROFIT AND LOSS
P AND L ACCOUNT 2010 2009 2008 2007 2006
Sales D net 1## (%"1( (#"2: 2#"%B 2#"%2
5ost of Sales &1##) &(("B@) &2$"?1) &21"12) &1$"?2)
Eross profit 1## ?2"1@ (("@# 1$"22 2@"2?
Administrati-e e>p &1##) &?1"@2) &(:) &2B"@B) &2$"%)
/istribution and mar<eting e>p &1##) &12("@() &@2%"?) &:B"1%) &:?"#1)
2ther operating e>pCnet &1##) &:B"@:) &2B"@@) &2"#1?) &%"2?)
other operating income 1## :B"B1 B2"(@ 1@B":? B"11
6or<ers profit participation fund C C C 1## ($(
6or<ers =elfare fund C C C 1## $B"2?
2perating profit 1## ?2"1( (2"(% 21"2@ 2@"#2
Finance cost &1##) &%:"?) &:%"$B) &:B) &(("(2)
Share of loss of associated companies
&1##)
Profit before ta>ation 1## (B"$( 2("1: ?":? 21"%?
Taxation &1##) &(@"2:) &1:"1B%) &?"#2?) &B"1$)
Profit after ta>ation 1## :#":% 2B"2B ?"@$ 2$"?2
+asic earning per share 2B"2# 11"(: $"2# 2"2: 11"%2
/iluted earning per share 2B"2# 11"(: $"2# 2"22 C
RATIO ANALYSIS
Current Ratio
(#
7he current ratio is obtained by di-iding the current assets by
current liabilities" 5urrent assets normally includes0 cash
mar<etable securities account recei-able and in-entories"
Formula
7he formula of current ratio is0
Current ratio Current assets / Current liabilities
Computation
Hear 5urrent Assets 5urrent
.iabilities
Ratio
2##@ 1#%B@B11@% 12(1::%222 "B@
2##% 2:((B%?%@? (2@%%2#2($ "%:?
2##B 2%$$#B#@:B ((B22:$(#$ "B(
2##$ (($#B((:$( ?1@2#@%$2? "@@
2#1# ((1@(#?%%1 :(?B2?$12% "%@1
Conclusion:
7he bench mar< for the ratio is 201" 3o=e-er it is acceptable at
1"%?01" the current position of the company for the last fi-e years is
not good it sho=s that company is hea-ily relying on short term
financing" 7he company may face li*uidity problem if it does not
impro-e its current ratio"
Net Profit Margin
!et profit margin is calculated by di-ided 8A7 by sales" it is the
percentage of sales =hich is the profit" It should be high as it
means that the cost of incurring production is lo="
Formula
7he formula of ratio is0
Net profit margin net profit after taxes / net sales
Computation
(1
Hear !et profit After
7a>
Sales Ratio
2##@ (@@2#$:2@ :22@:#$BB@ "#B%
2##% %#@($:%1 :2(%$:#%(? "1@%
2##B (?#%?11$$ @1@@%2(:1# "#?%
2##$ ?#2#?(1## %?%2%2:($? "#@@
2#1# 12:#:#2:#1 2#($22#%%$( "#@B
Conclusion:
It sho=s the o-erall profitability of the company after all the
e>penses is being paid it also sho=s ho= much profit is left for
shareholders" 7he companys net profit is @"BF for the last year and
it is ma<ing an a-erage profit of B"$F =hich is good for the
company"
Gross Profit Margin
7he gross profit margin is calculated by di-iding gross profit by
sales" 7his the percentage of sales =hich is the gross profit as
percentage of sales" 7he difference of this percentage from 1##F
gi-es the percentage of cost of goods sold"
Formula
7he formula of ratio is0
Gross profit margin Gross profit / net sales
Computation
Hear Eross Profit Sales Ratio
2##@ $?%?B%##% :22@:#$BB@ "22%
2##% %##$$2?%# :2(%$:#%(? "1@?
2##B 122?%(:%:: @1@@%2(:1# "1$$
2##$ 1$#2@1$(:@ %?%2%2:($? "2?1
2#1# (@:%%:@?1? 2#($22#%%$( "1%$
Conclusion:
(2
7he gross profit is the result of relationship bet=een prices sales
-olume and costs" A high ratio to gross profit to sales is a sign of
good management as it implies that the cost of production of the
business is relati-ely lo="
A relati-ely lo= gross margin ration is definitely a danger signal"
Re*uiring a careful and detailed analysis of the factors responsible
for it"
7he current margin of the company is good as it is ma<ing an
a-erage margin of 2#F"
Operating Profit Margin
The operating profit margin is calculated by dividing
operating profit by sales. This the percentage of sales which
is the operating profit as percentage of sales. The difference
of this percentage from 100% gives the percentage of cost of
goods sold and operating expenses incurred.
Formula
The formula of ratio is:
Operating profit margin = Operating profit / net sales
Computation
Hear 2perating
Profit
Sales Ratio
2##@ B1(B%:2$1 :22@:#$BB@ "1$(
2##% @@:%:B?#% :2(%$:#%(? "1?%
2##B 1#12((?B?? @1@@%2(:1# "1@:
2##$ 1@(#(#(BB@ %?%2%2:($? "21?
2#1# (12%2%(#$? 2#($22#%%$( "1?((
Conclusion:
((
7his ratio measures the relationship bet=een operating profit and
sales of a business"
It also sho=s ho= much operating e>pense are being incurred in
the business" A high operating ration indicates that management is
efficient in controlling the e>penses =hile a lo= operating ration
reflects management inCefficiency to=ards e>penses" 7he current
position sho=s an a-erage operating profit margin of 1%"@F =hich
is a good sign for the manufacturing company"
Return on total assets:
7he ratio of net income to total assets measures the return on total
assets" 7his sho=s that ho= much of the profit is due to assets or
ho= much is the profit on assets" It should be high in
manufacturing oriented firm"
Formula:
7he formula of ratio is0
Return on asset net profit after taxes / Total assets
Computation
Hear !et Profit After
7a>
7otal Assets Ratio
2##@ (@@2#$:2@ ?1%B%B((## "#%#%
2##% %#@($:%1 %2:(:(@$2@ "##$%
2##B (?#%?11$$ %$:22%@12@ "#::2
2##$ ?#2#?(1## 1#:1#@@1$## "#:B2
2#1# 12:#:#2:#1 121@?:1%?2% "1#12
5onclusion0
It sho=s ho= much net profit is being generated on e-ery Rs" 1
asset in-ested in the business" It also sho=s ho= efficiently the
assets are being utilized" 7he a-erage return on assets ratio is "
#??01 =hich is good for the such industry"
(:
Basic earning power:
7he basic earning po=er ratio is calculated by di-iding earning
before interest and ta>es this ratio sho=s the ra= earning po=er of
the firm assets before the influence of ta>es and le-erages"
Formula
7he formula of ratio is0
Basic earning Power EBIT / Total assets
Computation
Hear 8+I7 7otal Assets Ratio
2##@ B1(B%:2$1 ?1%B%B((## "1?%
2##% @@:%:B?#% %2:(:(@$2@ "#$2
2##B 1#12((?B?? %$:22%@12@ "12B
2##$ 1@(#(#(BB@ 1#:1#@@1$## "1?@
2#1# (12%2%(#$? 121@?:1%?2% "2?%
Conclusion:
It sho=s ho= much 8arning before inters and ta> is being
generated on e-ery Rs" 1 asset in-ested in the business" It also
sho=s ho= efficiently the assets are being utilized" It sho=s an
a-erage ratio of #"1?B01 =hich is good for the company"
RETURN ON EQUITY
7his ration is calculated by di-iding the profit after ta> to e*uity
shareholders fund"
Formula:
Return on e*uity I PA7 ; e*uity shareholders fund
(?
Computation
Hear Profit After 7a> Share 5apital Ratio
2##@ (@@2#$:2@ 2@#(#1?B# 1":1
2##% %#@($:%1 (1?(@1$## "22%
2##B (?#%?11$$ (B12?:2@# "%$2
2##$ ?#2#?(1## ::2:B#?%# 1"1((
2#1# 12:#:#2:#1 :B$BB$:%# 2"?(2
Conclusion:
7his ratio measures the profitability of the company in relation to
the funds supplied by the shareholders" 7he higher the ration the
more efficient shareholders funds pro-ided"
7he current position of the company reflects a higher increase in
shareholders e*uity as compare to last years"
DEBT RATIO
It is calculated by di-iding total liabilities to total assets
Formula :
/ebt Ratio I 7otal liabilities ; total assets
Computation
Hear 7otal
.iabilities
7otal Assets Ratio
2##@ :##(#?@2($ ?1%B%B((## %%"(
2##% @#(:%B$@#: %2:(:(@$2@ B("(1(
2##B @(B#2#%@1$ %$:22%@12@ B#"((2
2##$ B??(21:(21 1#:1#@@1$## B2"1@
2#1# B%?::%@#12 121@?:1%?2% %1"$@2
Conclusion:
(@
It sho=s ho= much assets are a-ailable in order to meet the total
liabilities of the company"
Average collection period
It is also called a-erage collection period it is calculated by
di-iding the number of days in year by recei-able turno-er" 7his
ratio sho=s after sales ho= many days after =hich the account
recei-able are recei-ed"
Formula
7he formula of recei-able turno-er is0
Receivable collection period Receivables / sales ` 365
Computation
Hear Sales Recei-ableJ(@? Ratio&day)
2##@ C C
2##% :2(%$:#%(? 1(1#(:?@2 11
2##B @1@@%2(:1# :(2B?2(2 (
2##$ %?%2%2:($? (@?BB#?@ 2
2#1# 2#($22#%%$( 1:2$?@ #
Conclusion:
7his ratio measures the a-erage period ta<en by recei-able to pay
the amount due to the company" 3igh recei-able payment period
sho=s too much in-estment in the =or<ing capital"
7he current position of the company in respect of collecting
payments from customers is -ery good" In 2#1# almost all the sales
=ere on cash" 3o=e-er the a-erage for last fi-e years is ( days"
(%
Payables payment period:
7he payable turno-er in days means after credit purchases ho=
many days after =hich the credit are paid" this sho=s the firm
ability to manage and release debts" It should be greater then the
recei-able turno-er in days"
Formula
7he formula of ratio is0
Payable payment Payables / Cost of Sales ` 365
Computation
Hear 5ost of Sale Payables J(@? Ratio
2##@ (2@BB22B%$ 2$@?B#:%( ((
2##% (?(@$:B1@? (:B?1?(1( (@
2##B :$:#$BB@@@ 11@1@%$B:( B@
2##$ ?@%#1#?#:$ @@%@(2:#B :(
2#1# 1@%:::@12%B @@?($#$@% 1?
Conclusion:
7his ratio measures the a-erage period ta<en by the company to
pay the amount due to the payables" If the payables payment period
is lo= that sho=s o-er capitalization of the company since the
company is ta<ing less credit from creditors" 7he current position
of the company sho=s that company is meeting its short term
financing needs by utilizing payables money"
(B
CHAPTER 4
Internship Experience
($
Concerned Department Information:
Admin Department:
I =or<ed in Account 2ffice under the Admin department in E.
2ffice"
Follo=ing departments =or<ed under the Admin Manager
a) Personal 2ffice
b) MIS 2ffice
c) 7ime 2ffice
d) Firefighting Section
e) 5anteen
f) Security
g) Account office
Admin department loo< after almost all the departments at mill" At
accounts office there is a head along =ith ( assistants to deals all
the financial especially the gro=ers accounts and loans matters of
gro=ers"
Duties and Responsibilities:
Growers Accounts
In gro=ers accounts I ma<e -oucher of sugar cane gro=er on the
-oucher =eight of the sugar cane amount and the amount and the
ban< name =here they =ant to transfer there amounts =ere =ritten"
:#
Firstly I made -ouchers of gro=ers and than ma<e there entry in
the soft=are in there accounts"
Salary Accounts
In salary accounts I transfer the salary of the permanent =or<ers to
there accounts and ma<e -oucher of daily =ages =or<ers and
adjust bonuses to all employees accounts and deduct the amount of
the loan an employee ta<en in ad-ance from the company"
Loan Accounts
In loan account I deal =ith gro=ers loan account the loan they ta<e
from company for fertilizers and =ater and machinery and ma<e
there accounts and adjust there balance"
Maintenance budget Accounts
In this account I deal =ith the budget =e got for refreshment and
for stationary"
Accomplishment / Achievement:
It =as a tremendous e>perience that I ha-e a-ailed =ith de-otion
and commitment" I ha-e an interest in sugar industry thatKs because
that industry has a largest scope and a huge =eight in the economy
of the country after te>tile" +ut one thing I =ant to share its not
easy that loo<s it has a great toughness and complications in its
process but the o-erall it =as nice and great" 3ere I am sharing
some of my learning regarding my internship in different
departments"
First I met Mr" Safder the admin manager of '/6 Sugar
Mills =ho introduced me in the organization" I discussed about the
admin and financing practices going on in the sugars mills" 3ere I
<no= ho= to target your customer after <no=ing needs =ith
product solution of the customer need"
:1
LI learnt that e-ery problem is sol-ed =ith a systematic
process li<e from the root of the problem"
LI also performed some tas< in the admin department and
there I familiar the dealing =ith the labor"
LI learnt about the mar<eting procedure and re*uired of the
documents and dealing =ith customers"
L/uring my internship I learnt about the -alue that customer
is the only =ho come first" 7he fulfillment of the demand of
customer is our basic moti-e"
7he *uality control as =ell inception in the sugar industry
should be parallel"
LI learnt about the gro=ers account and issuing loan
conditions" I learnt ho= to ma<e the budget and salaries"
Skilled Acquired:
Internship =as the first e>perience for me to =or< in any
organization and during this tenure I learned many things =hich
=ill be -ery beneficial for my professional life being the first
e>perience it pro-ed for me -ery educati-e and courageous" !e=
things =hich I e>perience are as follo=s0
First hand knowledge:
/uring my internship I got the first hand <no=ledge about
documentation =or<ing en-ironment and management" /uring this
session I learned ho= to maintain documents and ho= =e gather
information from customer in tactful =ays"
Managing the environment:
I learned ho= officer of any organization can manage the duties of
staff and ho= he can moti-ate their employees for getting desire
output from them" I got the understanding for ma<ing the polices
regarding the employee management and pro-ision for incenti-es
:2
to its =or<er li<e bonuses fle>ible =or<ing en-ironment and
=or<ing hours etc"
Business knowledge acquired:
I learned pure business <no=ledge and its re*uirements =hile in
boo<s =e are only able to ma<e the theoretical -ie= of rules and
regulation of any business but by e>periencing them personally I
understand that ho= =e can ma<e our business successful and ho=
=e can capture the mar<et shares of our competitors"
Problem Encounter:
!o doubt I learnt a lot of <no=ledge and it =as a good e>perience
for me but during this session I ha-e to face some problems li<e0
In the beginning days it =as someho= difficult for me to
mi> up =ith ne= en-ironment and people but after some period I
became use to =ith it and become a part of mill li<e other
employees and felt -ery comfortable"
Mostly people of my area are agriculturist and are not
educated so some times I ha-e to face problem to con-ince them
about the rules and regulations of males operations li<e in gro=ers
account opening etc
7here is no separate common room for ladies =here they
can rest during brea<
How experience impact on my career:
Internship impacts my career as0
:(
My internship e>perience has gi-en me a practical pre-ie=
of my field of education and after this e>perience I am feeling that
I am going to be prepared for in the professional life"
8-ery acti-ity =hich I performed and learned in each
department of Mill =as ha-ing a ne= e>perience in its self" After
learning the tas< of each department I realized that I ha-e a
potential to enter in professional life and it also taught me ho= I
can ma<e things possible and complete assigned tas<s"
I realized that earning of money is not an easy tas< =e ha-e
to do =or< =ith full concentration and hard =or<" I realized that
=e not only ha-e to gi-e full de-otion but =e all manage our =or<
=ith in estimated time"
As my internship is in a one of the top leading
organizations and '/6 has a good name in mar<et so in future it
=ill be beneficial for me to see< a good job"
2ur all e>perience of my internship =as -ery good and I ha-e
learned the sense of responsibility and ho= I can say that I am
getting prepare to deal =ith different type of costumer and ho= I
can interact =ith them to con-ince for some specific topic =ith
patience" In nut shell this internship ga-e me the e>perience =hich
=ill enhance my capacities and =ill boost up my confidence to
=or< In future"
Pros & Cons:
Advantages:
'/6 is mar<et leader
'/6 sugar mills are in secure areas that is the state of '/6
o=ners"
7here is no labor union in this organization"
::
6e ha-e =ide setup farms and the land of lin<ed areas is
fruitful for cane production"
6e ha-e =ide set up of farms
6e are using manpo=er on large scale"
6e are in maturity stage in organization life cycle"
'/6 has much e>perienced *ualified and competent
employees in each department"
Disadvantages:
6e are using manpo=er on large scale so e>penses are
high"
.ac< of departmental coordination"
7he mill does not hire the highly professional and
e>pertise"
Financial performance of the mill in last one year is not
satisfactory"
7he mill is not focusing on the mar<et function" At present
there us huge competition in the sugar industry especially in
Pa<istan" 7herefore there is need to focus on the mar<eting
function to get the mar<et share" 7he mar<eting efforts of the mill
are not satisfactory"
In '/6 Sugar Mills the distribution of =or< load is not fair
and e*ual" 7he employees has a huge burden of =or<load =here as
the other has a -ery lo= burden of =or<
Identification of problems:
/uring my internship in '/6 sugar mills I identified some
problem that should be remo-ing"
7hese problems =ere0
:?
Possible problems:
Administration does not ha-e a control on Mstationary
e>pendituresN I ha-e seen people got print out for their personal
use"
Procedure for gro=ers account opening is *uite comple>
and re*uires lot of formalities"
Procedure for applying loan facility =as *uite comple>"
7here is trend of Mreference based hiringN of =or<ers" 7he
customers =ho is a -aluable account holder of '/6 he can plays a
person as an employee of the '/6 =ith his strong reference"
Customer`s Problems:
7here is no importance gi-en by the '/6 to the lo=er gro=er
account holder customer and mill management doesnKt gi-e the
proper importance of that customers"
Employee`s Problems:
8mployees of '/6 sugar mills are also ha-ing the follo=ing
problem0
Working Hours:
'/6 mills pro-ide customerKs ser-ice in better =ay but there is lot
of =or< to do in a routine =or<ing to employee due to =hich they
=or< for long time and ha-e a short time to be rela>ed"
Bus Service:
8mployees should pro-ide bus ser-ice to reach on time"
Bonuses:
:@
/istribution of bonuses and other incenti-es are not distributed
e*ually"
Medical facility:
Medical facility is pro-ided only in mills but the other
management could not a-ail it"
Training:
7here is no training offered by the employees to familiar the ne=
technologies and for polishing their s<ills and <no=ledge"
:%
CHAPTER 5
Suggestions and Recommendation:
Some of the recommendations that I =ould recommended to some
of the problems discussed in the abo-e section that might increase
the efficiency of both the operations and employees of '/6 Sugar
Mills are as follo=s0
Recommendations:
:B
At present facility of bonus is gi-en only to production staff
but such incenti-es should also be gi-en to 3ead office Staff"
Special incenti-es should also be gi-en to 3ead on 8id and
on other special days should be gi-en to the =or<ers"
Medical facilities are gi-en in mill but such facilities
should also be gi-en to management"
/ifferent training courses should be arranged for the up
lifting and impro-ing the *uality of =or< for employees
7hey pro-ide transportation facility to only female
employees I thin< male should also be pro-ided =ith con-eyance
con-enience" 7his =ill create the easiness for =or<ers and reduce
the =astage of time"
7here is also a problem of =or< o-erload for the employees
and it should be control properly so that the employees are
moti-ated"
8mployees should be paid e>tra for the =or< =hich they
done after =or<ing hours"
Impro-ement in sugar crop yield through R9/ and
planning
Impro-ement in procurement and storage to reduce
=astages
8>port potential of sugar;molasses
/e-elopment of Industries for proper utilization of byC
products by adding e*uipment &distillery chipboard etc") 7his can
earn ; enhance re-enues"
+lending of fuel ethanol =ith petrol"
Po=er coCgeneration by the sugar industry using +agasse
:$
Conclusions:
'/6 Sugar Mills is one of the leading groups in Pa<istan" 7he
system the management style the policies 9 decentralized
decision ma<ing en-ironment is really remar<able" 7his report is
basically an attempt to identify the areas =hich need to be
impro-ed"
In this era of technology the MInformationN is the <ey to success in
the business" 7his means that the successful businessman =ill be
=ho =ill ha-e the right information at the right time" 7his
comment leads to the conclusion that the Information Sharing
Process should really be impro-ed"
7he o-erall analysis is indicating that the companyKs progress has
mainly attained through dedication of employees" 7he
effecti-eness of its management their =illingness to ta<e
ad-antage of opportunities and face challenges of changing
economic picture this all contributes to the -ery much impro-ed
and sound position of company" 7his is really appreciable for the
de-otion and hard =or< of all the employees of the company"
References:
http0;;==="jd=Cgroup"com;Reports;'/6
F2#A552,!7S12##B"pdf
http0;;==="jd=Cgroup"com;Reports;'/61AR12##$"pdf
http0;;==="jd=Cgroup"com;Reports;'/6F2#accounts12#1#"pdf
http0;;==="jd=Cgroup"com;2urReports"html
http0;;=== =i<ipedia"com;crystalline sugar
http0;;==="subcribe"com
Mr" Azher Per-aiz 7echnical Manager
?#