My report will remain incomplete if I do not mention the efforts of those people who helped me in completing this work.

First of all I will thank my ALLAH ALMIGHTY Who enables me to make this project. Second, I will thank to college authorities which make the internship compulsory in any corporate body in order to make us able to get know-how about the practical work. Third, I will thank to the teacher who provides me the guidelines about the format of internship report. In the last, I will thank to my all the teachers who teach me throughout the session, explore and enhance my abilities, and make me able to work efficiently throughout internship period with experienced persons.

I will also thank to the Chief Financial Officer (CFO) of ALMOIZ INDUSTRIES LIMITED which organized all internship program in such a way so that I could learn the practical work. In addition, I will also thank to the Mr. Amjad Ali – AGM Finance of ALMOIZ INDUSTRIES LIMITED – who was my instructor and guide me throughout the internship period while performing assigned duties. I am really thankful for his co-operation during the internship.

At last, I would like to thank all those other persons who helped me in completing this report.


I am also thankful to following persons:

Mr. Shamim Khan

Chief Executive

Mr. Nauman Ahmed Khan

Managing Director

Mr. Wasif Mahmood

Chief Financial Officer

Mr. Amjad Ali

AGM Finance

Mr. Muhammad Nazir

Dy. Manager (Finance)

Mr. Shahid Nazir

Dy. Manager (Accounts)

Mr. Mehmood Zubair

Asst. Manager (System Development)

Mr. Ahmed Hassan


Mr. Ahsan Aziz


Mr. Basit Hafeez


Furthermore all the other executives and staff members of Almoiz Industries Limited, Head Office and Site deserve my thankfulness for their co-operation and guidance during the course my internship at Almoiz Industries Limited. Finally I would like acknowledging the contributions by many other sources of information used in preparation of this report.





Executive Summary History Introduction Overview of Organization Detail of Sugar Mills in Pakistan History of Organization Company Information Mission Statement Organization Structure Activities Performed Ration Analysis Liquidity Ratio Debt Ratio Time Interest Earned Ratio Gross Profit Margin Operating Profit Margin Net Profit Margin Earning Per Share Return on Asset Return on Equity Inventory Turnover Avg. Collection Period Asset Turnover Avg. Payment Period Interpretation & Analysis SWOT Analysis Strengths Weaknesses Opportunities Threats Conclusion Recommendation Skills Acquired Bibliography Encl. Detail

4 5 6 9 11 14 15 17 17 18 20 20 21 22 23 24 25 26 27 28 29 30 31 32 33 40 40 42 44 46 53 53 54 55 55


Executive Summary
This report is based on the activities performed during the internship at ALMOIZ INDUSTREIS LIMITED. Internship duration was 6 weeks and it provided practical knowledge of working in professional environment. This learning experience is described in detail n the various sections of this report. In the first section, there is some detail about the company. The history and present status of the company is explained. The organization structure and the details of its management along with its location are also discussed. The second section provides information about the activities that I performed during the internship. I worked as an internee mainly in Finance/Accounts department. The third section included the Ratio Analysis of 2 years and the interpretation of the Ratio. There is also the SWOT analysis of the sugar industry and of the company. The fourth and last section includes Conclusion and the recommendations.



Pakistan is the 15th largest producer of sugar in the world, 5th largest in terms of area under sugar cultivation and 60th in yield. The sugar industry is the 2 nd largest agro based industry which comprises of 81 sugar mills. With this scenario, Pakistan has to import sugar which exposes it to the effects of shortage and rising prices in the world. The present sugar crisis has opened up new avenues for researcher to analyze the performance and efficiency of the firms in this sector. Total factor productivity plays a significant role in measuring the performance of a firm which ultimately affects the shareholder’s value. This paper analyzes the performance of sugar firms in Pakistan and estimate/calculate the Malmquist total factor productivity growth indices using non-parametric approach. TFP growth is further decomposed into technical, scale and managerial efficiency change using balanced panel data of 20 sugar firms listed on Karachi Stock Exchange for the period 1998 to 2007. The results reflect a tormenting picture for the sugar industry. Overall sugar industry improved technological progress by 0.8% while managerial efficiency change put a negative effect on the productivity by a same percentage; as a result the overall total factor productivity during 1998-2007 remained almost static with a decline of 0.1%. If we see the TFP and its components in individual year for overall sugar industry, it presents divergent trend. The research suggests that sugar industry is facing serious productivity growth problems where no increase is recorded in total factor productivity during 1998 to 2007. The sugar industry is lacking in terms of managerial efficiency which could be explained by a general reduction in the quality of managerial decision making among the best practice firms, Regardless of the reason for this decline, it has potentially serious implications for the longer-term financial viability of these sugar firms. The pattern of TFP growth tends to be driven more by technical change (or technical progress) rather than improvements in technical efficiency.


The most comprehensive measure of aggregate or sectoral productivity is Total Factor Productivity (TFP). However. The Development and adoption of new production technologies can improve productive efficiency. this industry can improve the efficiency of its operations using currently available technology. Therefore. But at present it is difficult due to limited income and credit to the out growers. its growth and sources for the sugar industry of Pakistan play a significant role for policy development. scale effects. given the paucity of good data. Technical change means progress in technology not only physically in the form of improved machinery but also innovations in the knowledge base. At present. 2004). and high costs of production. it relate to economies in production. the sugar industry is second largest agro-based industry in Pakistan. Measures of productivity. There are some studies on manufacturing sector of Pakistan which include Raheman et. Regarding scale effects. Production efficiency has become an important determinant for the future of this industry in Pakistan due to declining competitiveness of the domestic sugar industry because of increasing imports. If there exist increasing economies of scale it indicates that the production of additional outputs will require a less than proportional increase in inputs.Introduction Sugarcane is among the most valuable crops of Pakistan. and changes in the degree of technical efficiency (Coelli et al 2005). 6 . Productivity growth can be decomposed into three components: technical change. It is a source of raw material for entire sugar industry. this area of research has remained quite limited in Pakistan (Ali. Improvements in the degree of technical efficiency arise from situations where resources can be used more efficiently by applying practices from the present stock of knowledge. The results of the study highlighted the role of efficiency change in the TFP growth while deficiencies in terms of technological progress. (2008). where total factor productivity and its components are estimated using Malmquist Productivity growth index for major manufacturing industries of Pakistan using aggregate firm level financial data but sugar industry is not among the industries analyzed. al.

In this paper we employ DEA to estimate Malmquist TFP indices from panel data set. 1995. whereas a majority of industries had gained in terms of technical efficiency and some industries were also weaker in terms of their efficiency level. therefore. There are no reported productivity efficiency studies for the sugar industry in Pakistan This study attempts to fill this gap by estimating firm level efficiency and total factor productivity growth and its components for a sample of twenty sugar firms in the sugar industry and to assess the variations in TFP growth between firms and over Time. would provide a fresh perspective on the growth of TFP in sugar sector for use in developing appropriate policy responses towards this sector of Pakistan’s economy. The TFP growth is estimated for the period 1998 to 2007 using improved ideas of output and inputs measures. This study. The most widely used example of a nonparametric technique is DEA (Coelli. The results of this study showed that there was some improvement in the efficiency of the large scale manufacturing sector. Parametric techniques encompass stochastic frontier techniques and Bayesian methods (Kalirajan and Shand 1999). There are several techniques available. (2007) using the stochastic production frontier approach for periods 1995-96 and 2000-01. different economic models were applicable and predictable to the data of large scale manufacturing sector of Pakistan and macroeconomic policies might help in improving productivity of large scale manufacturing sector. although the magnitude was small. Gross National Product and per capita income. The reason for the choice of DEA as the method of 7 . Burki and Khan (2005) analyzed the implications of allocative efficiency on resource allocation and energy substitutability for large scale manufacturing. Overall results showed that productivity was affected by many factors like labor. Afzal (2006) also estimated total factor productivity for the large scale manufacturing sector from 1975 to 2001 using three different approaches.The efficiency of the large scale manufacturing sector of Pakistan was examined by Mahmood et. to estimate total factor productivity. . al. 1996). capital. The results were mixed at the disaggregated level. parametric and non-parametric. Further. Seiford.

The structure of this article is as follows. therefore. In the following section. while in the present study our focus is on the annual estimates because we wish to examine how productivity changes through time at the firm level. For example. the production frontier can be shifted upward through investment in research and development (R&D). an overview of sugar industry of Pakistan is presented followed by the third section which describes the data used in the analysis and methodology opted for analysis including discussion of input and 8 . This decomposition enables policymakers to trace lagging productivity to particular factors. production scales should be adjusted toward optimum values.estimation is that the methodology has been employed widely to conduct benchmarking analysis (for example. if there will be benefits from SE. which was not previously done. The objective is also to decompose TFP growth into technical change. if slow productivity growth is traced primarily to deteriorating technical efficiency (TE). if slowing technical progress causes declining TFP growth. This data allows examination of the TFP performance of individual firms. see Jaforullah and Whiteman 1999). The basic objective of this paper is to use the data envelopment analysis as a tool for the measurement of total factor productivity growth for sugar industry and sugar firms. Hence contribution in each country’s productivity has different proportion of sectors. results of those studies are average of the overall economy which comprises of different sectors. technical efficiency change and scale efficiency change for understanding the source of productivity for Pakistani sugar firms listed at Karachi Stock Exchange. Studies on Productivity growth at the country level are usually based on the overall or aggregate data. The specific objective of the study is to consider implications for policy and strategies for improving sugar firm’s production efficiency. learning-by-doing processes and managerial practices can be targeted for this purpose. Policymakers can recommend policies that improve the productivity of firms only if they understand the sources of variation in productivity growth. This study uses financial data of sugar firms extracted from annual reports obtained from different sources. Most of the existing studies that employs panel data for estimation of efficiency and productivity change reports estimates for the entire data period.

an increase of 12% over previous year due to increase in area under cultivation and yield. Sugarcane is grown on over a million hectares and provides the raw material for Pakistan’s 84 sugar mills which comprise the country’s second largest agro-industry after textiles. It indicates that in Pakistan. According to 9 . Brazil has the highest percentage and again Pakistan is at the lowest. Egypt is the highest in terms of sugarcane yield per hector which is 110.54 tons per hector.5Million Metric Ton (MMT). During the year 2007/08 production of sugar was estimated at 61. because of higher prices and an economic slowdown that resulted in lower demand from industries such as drink producers.6 to 4. improvements can be made in terms of sugarcane yield.output variables. As far as the sugar recovery is concerned. In the final section we discuss the results presented and provide conclusions.2% of manufacturing. but industry's officials say it has gone down since October. In size. The country's annual sugar consumption fluctuates between 3. Sugar industry has an indirect socio-economic impact in overall terms which is significantly larger than its direct contribution to GDP because of it’s backward (sugarcane growers) and forward linkages (food processors) in the economy.2 million tons in the last year.8 tons per hector while the Pakistan is the lowest in terms of this yield. Pakistan's 2009-10 sugar production is expected around 3 millions tons as against 3. While during 2008/09 sugar production is estimated at 5MMT a decline of 10% over the previous year. Australia has the highest sugar yield in these countries and again Pakistan is at the lowest with 3.2 million tons. Overview of Sugar Industry of Pakistan Sugarcane is an important industrial and cash crop in Pakistan. The sugar sector constitutes 4. 60th in yield and 15th in sugar production. sugar recovery and sugar yield. According to press reports. Then the results of our Malmquist TFP estimates are presented. If we analyze the sugar yield from sugarcane. Pakistan is an important sugarcane producing country and is ranked fifth in terms of area under sugar cultivation. the sugar sector atches the cement sector.

According to a rough estimate. Sugar consumption has been showing an increasing trend for the last 15 association. The demand of sugar will increase in the coming years at the rate of about 2.5 million hectares of area under cultivation which is at present about 1 hector. the country will need approximately 5. One of the many reasons behind this increase is rise in the total population of the country. It has increased from 2.95 million tons in 2005-06. For 2008-09.5 million tons of sugar to meet the local demand by year 2020. which is less than the target production.89 million tons in 1995-96 to 3. The per capita sugar consumption is around 25kg per year which is highest in the developing countries. sugar made and recovery percentage is presented in the table 3 for period 199798 to 2006-07.3% because of growth in the population which is about 2.3%. The sugarcane production in terms of sugarcane crushed. but they are expecting better yield because of the better varieties of seeds. which has reached 170 million. the overall sugar consumption is forecast at over 4 million tons. 10 . Pakistan has to import sugar which exposes it to the effects of shortage and rising prices in the world. the area under sugarcane cultivation has gone down slightly. It will require about 1. With this scenario.

DETAIL OF SUGAR MILLS IN PAKISTAN PUNJAB                          Adam Chishtian Bahawalnagar Ashraf Ashrafabad Bahawalpur Baba Farid Okara Okara Brothers Pattoki Kasur Chanar Tandlianwala Faisalabad Choudary Pensara Road Gojra Chistia Sillianwali Sargodha Crescent Nishatabad Faisalabad Fatima Kot Addu Muzaffarghar Fauji Sheikhupura Sheikhupura Fecto Darya Khan Bhakkar Gojra Sam Gogra Faisalabad Haseeb Waqas Mirajabad Nankana Sahib Husein Jaranwala Faisalabad Hyesons Jetha Bhutta Rahimyar Khan Ittefaq Sahiwal Sahiwal JDW Mouza Sharin Rahim Yar Khan Kamalia Kamalia Tobatek singh Kohinoor Jauharabad Khushab Layyah Sugar Mills National Sargodha Sargodha Noon Bhalwal Sargodha Pasrur Pasrur Sialkot Pattoki Pattoki Ka Phalia Karmanwala Gujrat 11 .

            Punjab Man Channu Khanewal Pahirianwali Lalian Jhang Ramzan Chiniot Sargodha Shahtaj Mandi Bahauddin Gujrat Shakarganj Jhang Jhang Sheikhoo Kot Addu Muzafargarh Tandlianwala Kanjwani Faisalabad United Sadiqabad Rahimyar Khan Indus Kot Bahadur Rajan Pur Madina Chattah Khankah Hafizabad Qand Ghar Shahkot Faisalabad Yousaf Shahpur Sargodha SINDH              Al-Abbas Mirwah Gorchani Mirpurkhas Al-Asif Garho Thatta Al-Noor Moro Naushero Feroz Army Welfare Badin Badin Bawany Talhar Badin Dadu Piarogoth Dadu Dewan Budho Talpur Thatta Faran Sheikh Bhirkio Hyderabad Fauji-Kho Khoski Badin Fauji TMK Tando M. Khan Hyderabad Habib Nawabshah Nawabshah Kiran Rohri Sukkur Khairpur Khairpur Khairpur 12 .

I. Khan Frontier Takht-I-Bhai Mardan Khazana Peshawar Peshawar Premier Mardan Mardan Saleem Charsadda Charsadda AZAD KASHMIR  Mian Mohammad Mirpur Azad Kashmir 13 . Khan Hyderabad Mirpurkhas Mirpurkhas Mirpurkhas Mirza Kadhan Badin Pangrio Deh Rajauri-2 Badin Sakrand Sakrand Nawabshah Sanghar Sindhri Sanghar Shahmurad Jhok Sharif Thatta Sindabadgar Deenpur Hyderabad Thatta Deh Bijoro Thatta Consolidated Ranipur Khairpur Larkana Naudero Larkana N.F.P       Bannu Sarai Naurang Bannu Chshma D.I.W. Khan D.             Larr Sajawal Thatta Matiari Matiari Hyderabad Mehran Tando M.

BY PRODUCT: The by products are following 1…………… BAGGASSES 2…………… MALLASSES 3…………… PRESS MUD 4…………… PULP 5………….000.000. I) Cane/ Agriculture II) Mechanical III) Chemical IV) Electrical v) Finance/ Accounts VI) Administration 14 .000 Shares of Rs. The Company has incorporated on 5th of May.Introduction/Historical Overview The name of the company is “ALMOIZ INDUSTRIES LIMITED” having its registered office in the province of Punjab at 12-D-1 Gulberg III Lahore Pakistan. SHARE CAPITAL & RESERVES Authorized capital 20. ELECTRICITY DEPARTMENTS OF the ORGANIZATION There are six main departments in Indus Sugar Mills. 200. 2005 under company ordinance 1984 as a public unlisted limited by shares.000 Main product: The main product of the Almoiz Industries Limited is white crystalline sugar. 10 each Rs.. The company is engaged in production and sale of ultra refined sugar and electricity.

Qaiser Shamim Khan (Member) Mr. Samreen khan Mr.Rahman Sarfaraz Rahim Iqbal Rafiq Chartered Accountants 15 . Farrah Khan Mrs. Muhammad Khan (Member) CHIEF FINANCIAL OFFICER & COMPANY SECRETARY: Mr.Adnan Ahmed Khan (Chairman) Mrs.Company’s Information: BOARD OF DIRECTORS: CHAIRMAN/CEO: MANAGING DIRECTOR: DIRECTORS: Mrs.CA AUDITORS: M/s. Qaiser Shamim Khan Mr. Muhammad shamim Khan Mr. Adnan Ahmed khan Mrs. Wasif Mehmood. Nauman Ahmed Khan AUDIT COMMITTEE: Mr. Muhammad Imran Khan Mr.

Dera Ismail Khan Pakistan Ph: 92-454-720063 to 66 Fax: 92-454-720880 16 . Ph: 92-423-5771066.BANKERS: Habib Bank limited. Lahore 54660 Pakistan.71 Fax: 92-423-5756687 Mills Site: Almoiz Industries Head Office: 2D-1. Allied Bank Limited United Bank Limited Kasb Bank Limted Bank Al-Habib Limited Bank Alfalah Limited JS Bank Limited Email: info@almoiz. MCB Bank Limited National Bank Of Pakistan. 26-KM Chashma Road. Gulberg III.

G. G.M. (Cane) (Tech. G. (Managing Director) │ │ │ Board of Directors │ │ │ │ G.M.M.) Production Administration │ │ │ ┌-------------┘ │ │ Technical Commercial Plant Production Manager Manager Manager Manager │ │ │ Chief Engineer │ │ ┌--------------┴--------------┐ │ │ Shift Engineer Senior Engineer Electrical Manager 17 . │ │ ┌-------------┬----------┼-----------------┐ ││││ ││││ G. ORGANIZATIONAL STRUCTURE CHAIRMAN │ │ │ M. In doing so we aim to meet or exceed the expectations of all our stake holders.Mission Statement We shall build on our core competencies and achieve in performance to become a leading Procedure of best sugar quality.D.M.M.

o o o o o o o o o o Established practices of record keeping to ensure proper documentation and storage of information. Maintained the Sales tax Invoices of Sugar Maintained the Sales tax Invoices of Pulp Maintained the Sales tax Invoices of Molasses Maintained the Sales tax Invoices of Mud Maintained the Sales tax Invoices of Scrap Maintained the Sales tax Invoices of Electricity Correspondence with Sugar & Molasses Debtors Correspondence with banks regarding Sales Payments 18 . Maintaining files of Bank Payment Vouchers Maintaining files of Cash payment Voucher Maintaining files of Bank Receipt Vouchers Maintaining files of Cash Receipt Vouchers Maintaining files of Journal Vouchers Maintaining files of Income tax Challan Maintaining files of Sales tax challan Maintaining files of Correspondence with Mills site Maintaining files of other misc. During my internship I worked in the head office of this company and I learned many things in this department. All the staff of this company is very cooperative and helped me out in my every problem during my internship. During my internship program learnt the following things:  Record Keeping. o o o o o o o o o Maintained the sales record of company and liaison with Marketing Department for reconciliation. documents  Sales.ACTIVITIES PERFORMED I joined ALMOIZ INDUSTRIES LIMITED as an internee on 05 July 2011 in Finance/ Accounts Department. By the grace of Allah Almighty I completed it on 19 August 2011.

Filing Monthly Return Learned how to calculate the Employees Salary Tax  Finance. o o o Liaoning with Banks for confirmation of amounts due from debtors and preparation of reconciliations. o o o Weekly updating of advance tax deducted on payments in online portal of Federal Board of Revenue. Posting all kinds of Vouchers 19 . Preparing Bank Reconciliations Statements at the end of the Month of more than 5 Banks. Tax.

60 0. Generally. the larger the margin of safety that the company possesses to cover short-term debts.04 0.Ratio Analysis Liquidity Ratio What Does Liquidity Ratios Mean? A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. the higher the value of the ratio.20 2010 2009 Current Quick 20 .46 Liquidity Ratio 1.20 1.40 0. Liquidity Ratio Ratio Current Quick 2010 1.80 0.00 0.08 0.58 2009 1.

meanwhile.5 81 80.5 82 81. Ratio Debt Ratio Debt Ratio 2010 80 2009 82 Debt Ratio 82.Debt Ratio What Does Debt Ratio Mean? A ratio that indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.5 79 2010 2009 Debt Ratio 21 . a debt ratio of less than 1 indicates that a company has more assets than debt. the debt ratio can help investors determine a company's level of risk. Used in conjunction with other measures of financial health.5 80 79. A debt ratio of greater than 1 indicates that a company has more debt than assets.

Times Interest Earned Ratio Analysis Times interest earned ratio measures a company’s ability to continue to service its debt.00 2. However.50 1.82 2009 2. A high ratio means that a company is able to meet its interest obligations because earnings are significantly greater than annual interest obligations. a high ratio can also mean that a company has an undesirably low level of leverage or pays down too much debt with earnings that could be used for other Investment opportunities to get higher rate of return. Failing to meet these obligations could force a company into bankruptcy.50 2. Debt Ratio Ratio Time Interest Earned Ratio 2010 1.65 Time Interest Earned Ratio 3.00 0.50 2010 2009 Time Interest Earned Ratio 22 . It is an indicator to tell if a company is running into financial trouble. A lower times interest earned ratio means fewer earnings are available to meet interest payments.00 1. It is used by both lenders and borrowers in determining a company’s debt capacity.

This means that for every dollar that ABC earns on widgets. earned $20 million in revenue from producing widgets and incurred $10 million in COGS-related expense.50 at the end of the day. suppose that ABC Corp. ABC's gross profit margin would be 50%. Profitability Ratio Ratio 2010 Gross Profit Margin 10. For example. Gross profit margin serves as the source for paying additional expenses and future savings.Profitability Ratio What Does Gross Profit Margin Mean? A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold.51 2009 17.34 Gross Profit Margin (In %) 20 18 16 14 12 10 8 6 4 2 0 2010 2009 Gross Profit Margin 23 . it really has only $0.

the better.1 2009 13. it is earning more per dollar of sales. Profitability Ratio Ratio 2010 Operating Profit Margin 8. perating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages. raw materials. The higher the margin.65 Operating Profit Margin (In %) 16 14 12 10 8 6 4 2 0 2010 2009 Operating Profit Margin 24 . it is best to look at the change in operating margin over time and to compare the company's yearly or quarterly figures to those of its competitors. etc. Also known as "operating profit margin" or "net profit margin".What Does Operating Margin Mean? A ratio used to measure a company's pricing strategy and operating efficiency. Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales. such as interest on debt. A healthy operating margin is required for a company to be able to pay for its fixed costs. If a company's margin is increasing. When looking at operating margin to determine the quality of a company.

What Does Profit Margin Mean? A ratio of profitability calculated as net income divided by revenues. This is an indication that costs need to be under better control. but an increase does not mean that the profit margin of a company is improving. Increased earnings are good. Profitability Ratio Ratio 2010 Net Profit Margin 3.59 2009 8. it leads to a lower profit margin. or net profits divided by sales.07 Net Profit Margin (In %) 9 8 7 6 5 4 3 2 1 0 2010 2009 Net Profit Margin 25 . It measures how much out of every dollar of sales a company actually keeps in earnings. For instance. Looking at the earnings of a company often doesn't tell the entire story. if a company has costs that have increased at a greater rate than sales.

What Does Earnings Per Share .EPS Mean? The portion of a company's profit allocated to each outstanding share of common stock.93 2009 13. Profitability Ratio Ratio 2010 Earning Per Share 7. When calculating. Earnings per share serves as an indicator of a company's profitability.04 Earning Per Share 14 12 10 8 6 4 2 0 2010 2009 Earning Per Share 26 . data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. it is more accurate to use a weighted average number of shares outstanding over the reporting term. It is also a major component used to calculate the price-to-earnings valuation ratio. because the number of shares outstanding can change over time. Earnings per share is generally considered to be the single most important variable in determining a share's price. However.

but if its assets totaled $20 million. If a company has $20 million in net income and $100 million in total assets.What Does After-Tax Return On Assets Mean? A profitability measure that indicates how well a company uses its capital resources to generate income. The resulting figure. To calculate after-tax return on assets. will be a percentage. its aftertax return on assets would be 20%. Profitability Ratio Ratio 2010 Return on Asset 3. it would have a superior after-tax return on assets of 25%. divide the company's total after-tax income by the value of its total assets. the more efficiently the company uses its assets. regardless of how big the company is.96 2009 6. The after-tax return on assets ratio can be helpful in comparing the profitability of different-sized companies because it allows investors to see how efficiently a company works with what it has. multiplied by 100. the higher the percentage. A smaller company might only bring in $5 million after taxes.59 Return on Asset (In %) 7 6 5 4 3 2 1 0 2010 2009 Return on Asset 27 .

60 Return on Common Equity (In %) 40 35 30 25 20 15 10 5 0 2010 2009 Return on Common Equity 28 . The ROE is useful for comparing the profitability of a company to that of other firms in the same industry.53 2009 37. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.What Does Return On Equity . Profitability Ratio Ratio 2010 Return on Common Equity 19.ROE Mean? The amount of net income returned as a percentage of shareholders equity.

73 2009 4.52 Inventory Turnover 12 10 8 6 4 2 0 2010 2009 Inventory Turnover 29 . average inventory may be used instead of the ending inventory level to minimize seasonal factors. Although the first calculation is more frequently used.Activity Ratio What Does Inventory Turnover Mean? A ratio showing how many times a company's inventory is sold and replaced over a period. Also. COGS (cost of goods sold) may be substituted because sales are recorded at market value. Activity Ratio Ratio 2010 Inventory Turnover 9. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or "inventory turnover days". while inventories are usually recorded at cost.

8 10.2 10 9.8 9. Therefore.6 9. Collection Period 30 . Collection Period 11 2009 10 Avg. but one of the problems with extending credit is not knowing when the customer will make cash payments. most businesses allow customers to purchase goods or services via credit.4 2010 2009 Avg. Activity Ratio Ratio 2010 Avg.2 11 10. Ultimately. every business needs cash to pay off its own expenses (such as operating and administrative expenses).4 10. Collection Period (In Days) 11.What Does Average Collection Period Mean? The approximate amount of time that it takes for a business to receive payments owed. in terms of receivables.6 10. possessing a lower average collection period is seen as optimal. Due to the size of transactions. because this means that it does not take a company very long to turn its receivables into cash. from its customers and clients.

When companies make these large purchases. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues.5 0 2010 2009 Asset Turnover 31 . his ratio is often used as a measure in manufacturing industries. prudent investors watch this ratio in following years to see how effective the investment in the fixed assets was. plant and equipment (PP&E) . where major purchases are made for PP&E to help increase output. Activity Ratio Ratio 2010 Asset Turnover 2.28 Asset Turnover 2.5 1 0. The fixed-asset turnover ratio measures a company's ability to generate net sales from fixed-asset investments .17 2009 of depreciation.What Does Fixed-Asset Turnover Ratio Mean? A financial ratio of net sales to fixed assets.5 2 1.specifically property.

Activity Ratio Ratio 2010 Avg. in terms of receivables. Payment Period 13 2009 11 Avg. possessing a lower average collection period is seen as optimal. from its customers and clients.5 11 10. Therefore.5 12 11. but one of the problems with extending credit is not knowing when the customer will make cash payments. because this means that it does not take a company very long to turn its receivables into cash.What Does Average Payment Period Mean? The approximate amount of time that it takes for a business to receive payments owed. Ultimately. most businesses allow customers to purchase goods or services via credit. Payment Period 32 . Due to the size of transactions. every business needs cash to pay off its own expenses (such as operating and administrative expenses). Payment Period 13.5 13 12.5 10 2010 2009 Avg.

and iv.Interpretation of Financial Ratios PERFORMANCE OF THE COMPANY Despite the fact that sugarcane crop was around 25% short as compared to last year.967 M. 195. FINANCIAL HIGHLIGHTS The pretax profit during the fourth quarter was recorded at Rs. Stock of work in process iii. 13. I.154. 1. 234. During the financial year under review the company earned pretax profit of Rs. This increase in the profit was mainly attributed to increase in the sugar price in local market & as well as in international market.829 M.142. Tons white sugar at an average recovery of 9.601 M.669 M. produced 105.874. Tons sugarcane.191 million as compared to last year pretax profit of Rs. 33 . Stock of raw material and components. Statement of stock in trade: The statement of quantity and cost of each item included in stock at the year end distinguishing between. 119.071 million and after tax profit of Rs. 130.24%. Stock of finished products. Tons white refined sugar at an average recovery of 8.596 million. Other stocks. 307. Tons sugarcane and produced 99.556% as compared to last year’s sugarcane crushing of 1.591 million and after tax profit of Rs. ii. Statement of capacity utilization of the plant: The installed capacity.882 million as compared to the third quarter pretax profit of Rs. its actual utilization and reasons of variance between the two 2. your company was able to crush 1.

ii. 4) Raw materials: a. brief comments as to the reasons for shortfall. Consumption of major raw material per unit of production compared with the standard requirement. b. 2) Cost accounting system: Brief comments on the cost accounting system and its adequacy or otherwise to determine correctly the cost of products under reference 3) Production: I. of raw material is significant.3. Licensed installed and utilized capacities of the factory for the products under reference. If the company is engaged in other activities besides the manufacture of the product under reference. give a brief note on the nature of such other activities. Production in quantities of each type of product under reference. If there is any shortfall in production as compared to capacity. specify the same separately. Where the cost of transport etc. The cost of major raw material consumed in terms of both quantity and value. b. If there is any addition to the production capacity during the year under review or in the immediately preceding two years this may also be mentioned. PARTICULARS TO BE INCLUDED IN THE REPORT: 1) Capacity: a. Percentage of production of the product under reference in relation to installed capacity. if any. iii. 34 .

if any.  Bonus to workers and employees. if any. if any. 5) Wages and salaries: a. Salaries and perquisites of directors and Chief Executive.c. Brief explanations for variance in item (e) above. f. issues and balances of all material directly used in production. d. Comments on method of accounting followed for recording the quantities and values of the Receipts. and with standard requirement.  Indirect employees’ cost on production. Total man-days of direct labor available and actually worked for the year. if any (including taxes and levies). Total wages and salaries paid for all categories of employees. Direct labor cost per ton of output of product (give information in respect of each). and  Total employees’ cost {total of items (i) to (iv) above} b. Explanation for variances.  Other employees’ cost. as compared to g. c. 35 . d.  Employees’ cost on administration.  Employees’ cost on selling and distribution. separately in respect of each of the following namely:  Direct labor cost on production. Average number of workers employed for the year. e. in the consumption of major raw material per unit of production as compared to the preceding two years. the previous two years.

included in the overheads as compared with previous two years. b. e. b. which have not moved for over twenty four months. if any. of the products under reference to be shown separately with details to the extent possible. The basis of allocation of overheads to cost centers and absorption to products with brief comments. c. major breakdown in the plant. c. iv. Selling and distribution overheads. The basis of allocation of depreciation on common assets to the different departments. strikes. iii. The basis of charging depreciation to the cost of products. if any. ii. with particular reference to its contributions towards increasing productivity and its effect of cost of production. c. straight line or diminishing balance. b. d.. 7) Depreciation: a. etc. both in quantities and values. substantial power cuts.h. Reasons for any significant variances in the expenditure incurred against the item. the proportion of closing inventory of stores representing items. The method of depreciation adopted by the company. serious 36 . The total amount of the following overheads and a break-up of items (i). Comments on incentives schemes. If there were any abnormal features affecting production during the year. etc. 6) Stores and spare parts: a. The expenditure per unit of output on stores. Comments on the system of stores accounting for recording receipts. lockouts. 8) Overheads: a. Cost of packing. Factory overheads.g. Administration overheads. 9) Royalty / technical aid payments: The total amount of royalty / technical aid fees payable for the year and the amount chargeable per unit of the product. e. on the basis of allocation adopted by the company.g. Financial Charges. 10) Abnormal non-recurring features: a. If practicable. if any. (ii) and (iii) below: i. issues and balances.

c. Cases where the company funds have been used in a negligent or inefficient manner.accidents. If product under reference is exported. 14) Cost auditors’ observations and conclusions: a. varieties or quantities of product under reference showing the average sales realization per unit. quantity exported. b. comments on the comparative profits of different categories of the products per unit as well as in term of per machine hour etc. variety or quantity of the products. or qualities of each of the products under reference with comparative figures for the previous year and comments on the reasons of difference. wherever practicable. 37 . b. 12) Sales: a. 13) Profitability: The profit per unit earned on each category. The sales in quantities and net sales realization of the different categories. and comments on the adequacy or otherwise of product for maximization of profit. 11) Cost of production: The cost per unit of different categories. be briefly mentioned indicating their impact on the cost of production. Factors which could have been controlled but have not been done resulting in increase in the cost of production. b. Matters which appear to him to be clearly wrong in principal or apparently unjustifiable. indicating the profit or loss incurred in export. If there are special expenses which have been directly allocated to products under reference. the total amount as also incidence per unit of product shall be shown. net realization per unit. they shall. countries to which exported.

specify the same separately.PRODUCTION Scope:  Production in quantities of each type of product under reference.  Plant. iv. If there is any shortfall in production as compared to installed capacity. whether modern or obsolete. 38 . State of technology. whether new or second hand when installed.  Fuller utilization of installed capacity. ii. or Energy conservancy.  Percentage of production of the product under reference in relation to installed capacity. Increased productivity. if any. Improved inventory policies. Where the cost of the transport. of raw material is significant.  iv.  If there is any addition to the production capacity during the year under review or in the immediately preceding two years this may also be mentioned. v. brief comments as to the reasons for shortfall. Key limiting factors causing production bottle-necks. Cost reduction. Suggestion for improvements in performance by:  Rectification of general imbalance in production facilities.  Consumption of major raw material per unit of production compared with the standard requirements. iii. etc..  Comments on areas offering scope for: i. RAW MATERIAL Scope:  The cost of major raw material consumed in terms of both quantity and value.

(give information in respect of each) Brief explanations for variance in items (e) above. 39 . if any. in the consumption of major raw material per unit of production as compared to the preceding two years. Explanations for variances. Employees’ cost on selling and distribution.  Comments on the method of accounting followed for recording the quantities and values of the receipts. separately in respect of each of the following namely:              Direct labour cost on production. Total man-days of direct labour available and actually worked for the year. Comments on the incentive schemes. Average number of workers employed for the year. SALARIES AND WAGES Scope:  Total wages and salaries paid for all categories of employees. Indirect employees’ cost on production. issues and balances of all material directly used in production. with particular reference to its contributions towards increasing productivity and its effect on cost of production. if any (including taxes and levies). Employees’ cost on administration. and Total employees cost [total of items (i) to (iv) above]. as compared to the previous two years. if any. Direct labour cost per unit of output of the product. if any. Bonus to workers and employees. Salaries and perquisites of directors and Chief Executive. Other employees cost. if any. and with standard requirement.

al.8% while managerial efficiency change put a negative effect on the productivity by a same percentage. This decomposition helped us to identify improvement in efficiency and contribution of technological progress and innovation to productivity growth in sugar industry. efficiency change and technical change at each firm level and for each year during 1998 to 2007 which shows that these estimates varies widely at firm level during the data period. as a result the overall total factor productivity during 19982007 remained almost static with a decline of 0. technical efficiency change and technological progress in Pakistan’s sugar industry using panel data for twenty sugar firms from 1998 to 2007. it presents divergent trend. From a policy point of view. The Malmquist TFP results reflect a tormenting picture for the sugar industry. Following Fare et. If we see the TFP and its components in individual year for overall sugar industry. Malmquist productivity index was used to measure the productivity growth. (1994). The empirical estimates on the performance of sugar industry yielded several striking results.SWOT ANALYSIS STRENGTHS Research on productivity growth is very important because economic growth cannot be sustainable without improvement in the Total Factor Productivity.1%. Most of the studies of productivity growth efficiency which are based on panel data discuss the estimates of overall sample or sector. This paper applied DEA approach to estimate the total factor productivity growth. this paper decomposed the Malmquist productivity index into technical efficiency and technical change component. we have presented the estimated TFP growth. The results from individual industries show that static TFP growth is mainly contributed by technical efficiency which declined for nine sugar firms and 40 . the assessment of TFP growth is important as it serves as a guide for resource allocation and invest not decisions. However. Overall sugar industry improved technological progress by 0.

This firm has also performed better in terms of stability over the period 1998 to 2007. technical efficiency and technical change.remained equal to one for nine sugar firms during period 1998 to 2007. this industry must increase total 41 . Similarly. Sind Abadgar sugar mill and Habib sugar mill are also relatively better performer where the technical change is the main source while Sanghar sugar mill is also among the top ranking firms where the main sources is managerial efficiency. all sugar firms have a mix trend over 1998-2007 which affects the productivity and ranking of firms. The research suggests that the Pakistani sugar industry is facing serious productivity growth problems where no increase is recorded in total factor productivity during 1998 to 2007. Regardless of the reason for this decline. Shakarganj Mills Limited is at the top in ranking in terms of TFP due to highest technical change and also due to better performance in terms of managerial efficiency change. Mirpurkhas sugar mill comes next in ranking where again the major source is technical change. The pattern of TFP growth tends to be driven more by technical change (or technical progress) rather than improvements in technical efficiency. Therefore. it has potentially serious implications for the longer-term financial viability of these sugar firms. while the technical change is positive for eleven out of twenty sugar firms. The Thal Industries is also one of the laggard firms in terms of total factor productivity where the major source is non adoption of new technologies although top in ranking in terms of efficiency change. year wise analysis highlights that there is divergence in all sugar firms over 1998-2007 in terms of total factor productivity. where the total factor productivity increased for seven out of nine years. The Frontier sugar mill is among the worst performers in terms of productivity over 1998 to 2007 where the problem lies in managerial efficiency and also non adoption of new technologies. Further. It suggests that sugar industry is lacking in terms of managerial efficiency which could be explained by a general reduction in the quality of managerial decision-making among the best practice firms. Except few firms which are relatively stable include Shakarganj mills limited and Al Abass sugar mills limited.

These strategies will improve the technical change as well which also relies on managing technology and adoption capability of firms. therefore. It occupies about 4 per cent of the cropped area and contributes about 14 per cent to the value added by the crop sector in the gross domestic product. Therefore firms in the sugar industry need greater investment in (R & D) activities and adoption of new technologies. It is. during the decade ending 1989-90. The management aspect is also very important in terms of capital. Sugarcane production has. 42 .factor productivity in most of the firms under study and efforts must be made to provide a stable pattern to the productivity growth. This is a matter which merits concern for the policy makers to review options in the matter. on an average. Improvement in technical efficiency requires improvement in quality of input like capital and labor. there is a need to improve both technical efficiency and technological progress. In sugar industry. The research and development (R & D) activities can play a vital role to bring technological progress. against the population growth of 3 per cent per annum. Increase in skilled worker through human resource development reduces skills shortage which hampers technological adoption. efforts could be made to increase the research and development (R & D) activities in this industry. quite evident that the per capita production of sugarcane has been going down by about 2 per cent a year during this period. WEAKNESSES Sugarcane is an important crop of Pakistan. However. This crop is the main supplier of sweeteners to the country's population and is one of the major cash crop for the farmers. Although there is very little increase in the technical change but for further considerable increase in the productivity. since after independence been increasing at a rate which favourably matched with the growth rate of the population. Except the southern zone. its production has slowed down to about one per cent a year. the other parts of the country are not ideally suited to the cultivation of sugarcane but it suits well in the crop rotations.

or by the farmers for making gur. should it be realised through accent on expansion in area or yield per acre? If the answer lies in the area. Upto August 1985. The rest of the production is crushed either by the sugar mills for manufacturing of white sugar. about 10-15 per cent is used for seed. it is estimated that of the total sugarcane production. chewing and fodder. which are also important in their own rights. The number of mills has gone up from 31 in 1979-80 to 45 in 1989-90. Meanwhile the demand for white sugar has increased which has lead the fast expansion of the sugar industry.Should the domestic sugarcane production be increased or greater reliance be placed on the import of sugar? If local production is the option. an attempt is made to discuss and raise some of the issues that need careful attention of the policy makers in the national interest. their keeping quality. Consequently more and more sugarcane has been going to the mills for white sugar manufacturing thus leaving lesser quantities for the production of other sweeteners. shakkar or khandsari. sugar was rationed. Notwithstanding the yearly fluctuations. all this would be possible? In this article. and the local demand. the country would need to import sweeteners at an increasing rate every year provided the domestic sugarcane production does not keep pace with the population growth. Therefore. With the production of sugarcane increasing at a much lower rate than the population growth. distribution system. The import of gur. shakkar or khandsari is not practical because of their availability abraod.8 million tonnes from about 600 thousand tonnes during the same period. are not adversely effected? If only the yield per acre is to be raised. So if the consumption of the sweeteners is to be kept at the present level. 43 . with the result that the production of sugar has increased to over 1. what measures are necessary to achieve this objective without allowing the mis-allocation of area to take place if at. to what extent the area should be allowed to increase so that the areas under competing crops like cotton. the per capital availability of domestically produced sweeteners has decreased. rice and even wheat and oilseeds. the country has to resort to the import of white sugar to meet the local needs.

there were only two sugar factories in Pakistan. about 210 thousand tonnes in 1987-88. Keeping in view the importance of sugar industry. the imports would be over 50 thousand tonnes. the annual average availability of these three sweeteners has halved to about 10 kgs. the country imported 258 thousand tonnes in 1985-86. Domestic sugar production being inadequate to meet the demand. "shakkar" and khandsari has been decreasing. In this way the first sugar mill was established at Tando Muhammad Khan in Sindh province in the year 1961. According to an estimate. According to one study. After the rationing system was abolished in August 1985. The country started to import sugar from other countries and huge foreign exchange was spent on this item. With the fast expansion of the refined sugar industry. when sugarcane production was increasing only nominally. It is the second largest industry after textiles. the per capita annual consumption of sugar which was about 14 kgs. an estimated for 1988-89. has reached the level of 20 kgs a year. Need was felt to increase the production of sugar. It is anticipated that during 1989-90. the Government setup a commission in 1957 to frame a scheme for the development of sugar industry. 44 . and only about 25 thousand tonnes. At the time of independence in 1947. in 1984-85. At present there are 76 sugar mills operating in Pakistan. the demand of white sugar increased rapidly. the Government had to import to meet the national requirements. the exact quantity to be imported would depend on the quantities domesitically produced during the current crushing season and the volume of stocks to be maintained. 750 thousand tonnes in 1986-87. The output of these factories was not sufficient for meeting the domestic requirements. per head as compared with about OPPORTUNITIES The sugar industry plays an important role in the economy of the country.the demand remained restricted and adjusted to the availability of sugar (domestic production plus imports). For example. the availability of sugarcane for converting it to sugar.

This research article analyses the position of sugar industry during the period 1990/91-1999/2000. financial experts. semiskilled and unskilled workers. including management experts. The output of these mills was not sufficient for meeting the domestic requirements. During this period the cultivated area under cane increased at average rate of 10. Looking at Table 3.7 percent. technologists. 45 . It contributes around 4 billion rupees only under the head of excise duty and other levies to the Government are also paramount significance.7 percent. output of cane production rose at average rate of 24 percent and the yield per hectare went up at the average rate 11. fifthly projection of sugar demand with the increasing of population and lastly conclusion. production and per hectare yield of sugar cane. engineers. fourthly crushing capacity of sugar mills. This can be increased by introducing new varieties of cane as well as starting the closure units. thirdly examines per hectare yield with other countries. This research article firstly describes introduction.The Sugar industry employs over 75000 people. The cane commission was setup in 1957 to form plan for increasing the output of cane and establishing sugar mill in the country. secondly cultivated area. Pakistan got two sugar mills as its share. Huge amount of foreign exchange was being spent on the import of sugar. skilled. The crushing capacity of cane and production of sugar increased up to 1998-99 and again decreased which created shortage of sugar. At the time of independence in 1947. But the per hectare yield was lower in the country as compared to other cane growing countries. output and recovery percent of sugar. it was pointed out that the existing number of operating mills reached to 71 in the year 1998-99 but again declined to 67 due to closure of certain units.

THREATS The sugar industry in Pakistan has continued to expand heavily in spite of negative fundamentals and continuous advice of Pakistan Sugar Mills Association to the contrary for the last six years. All these new mills have been established in prime sugarcane growing areas where the operating mills had spent resources to educate farmers in ahieving better yields and had arranged soft-term credits for the farmers for the procurement of seed. fertilizer and agricultural implements. in such an unplanned manner. has been blamed by many on the government and the financial institutions who have provided long-term loans and wasted limited resources. The political angle Initially the sugar mills in the country were established by the business community but during the last 8 to 10 years establishment of sugar mills has become a prerogative of people indulging in politics directly or indirectly. They were not only able to get the permissions to establish sugar mills but to acquire huge credits from the financial institutions as well. 46 . During the last season. Besides. industry sources said. one of the politicians ownng sugar mills was instrumental in closure of a sugar mill as it was paying higher prices to the growers. the mills already in operation have enhanced their sugarcane crushing and sugar refining capacities through BMR. New units have been established and the number increased from 52 mills in 1991-92 to 74 in the current season which has commenced last month. The cost of projects established after the mid-eighties was not only very high but credits were disbursed at 80:20 resulting in very high financial cost. the growers were forced to sell their produce to these mills. The increase in the number of sugar mills. With the establishment of mills by people enjoying political clout and power.

the mills are forced to pay price for sugarcane much higher than those fixed by the government. the growers have also started demanding prices higher than those fixed by the government. The average recovery is 9. in the Indian Punjabthe yield is over 63 tonnes per acre. the growers either completely stop the supplies or curtail them to a large extent. Production could be increased either by increasing the area under sugarcane cultivation or more importantly by improving the yield per acre substantially. Factors affecting sugarcane supply Over the years many factors have been responsible for shortfall in sugarcane supply.39% in Indian Punjab as compared to an average recovery of 8. the financial cost incurred on carrying for over six months squeezes profit margins or increases accumulated losses of the mills. 47 . The situation further aggravates the mills' position as they are not in a position to recover even the season's variable cost which affects repayment of loan installments and interest charges to the financial institutions. coupled with regular enhancement in its support price fixed by the government. While in Pakistani Punjab farmers are able to get a yield of only 43 tonnes per acre. Not only the government has been increasing sugarcane support price. Knowing the limited availability of sugarcane.Cost of production The shortfall in sugarcane availability resulting in under-utilization of capacity. Succumbing to pressure from the growers. They include increased consumption by the mills and failure of the growers to increase sugarcane production.44% attained in the Pakistani Punjab. A comparative analysis of sugarcane yield and recovery between India and Pakistan prepared by the Pakistan Sugar Mills Association indicates that Pakistan is far behind India. Since the nature of production is seasonal and consumption continues throughout the year. have been factors responsible for the increase in cost of production of sugar.

If the prices of cotton are better. But the consumption of sugarcane by mills is NWFP was reduced to only 17% in 1995-96. The recovery at the beginning and at the tail-end of the season is low. They give two reasons for this: expansion is much cheaper as compared to establishing new mills of equivalent size and they also want to achieve better recovery by curtailing the number of crushing days. The area as well as production of sugarcane shrank by 5 and 4 percent respectively in 1995-96 as compared to last year. originally growing cotton. In the past. Contrary to this. But with the improvement in cotton prices and availability of virus resistant varieties. the provincial governments used to ban production of 'gur ' during sugarcane crushing season but lately its production has increased manifold. When the CLV attacks on cotton were common.85% in 1992-93 and came down to 75.87% in the same year but came down to 63. the average yield and recovery in Indian Gujrat is 89. The average utilization of sugarcane on countrywide basis touched the highest . the sugarcane cultivation directly competes with cotton.3 tonnes per acre and 9% recovery in Sindh. Sindh and Punjab. Myth behind massive expansion Over the last few years most of the existing mills have enhanced their crushing capacities 2.22% during 1995-96. switched over to sugarcane cultivation. The maximum consumption touched 93. or vice versa.76.Similarly. 'gur' making has progressed without paying any taxes and has therefore been consuming more sugarcane to the detriment of the sugar industry.93% in 1993-94 but has gone down during the last two years. Therefore it was considered to restrict the crushing period to about 150 days to achieve a better rate of recovery and reduce the variable cost of the season.28% in 1995-96. In both the provinces. a large number of farmers. the farmers switch over to it. In the Punjab the maximum utilisation was 3-fold. Sindh has the highest sugarcane consumption record. The percentage of sugarcane consumed by the sugar mills in Sindh is still the highest as compared to the other two provinces.34% respectively ascompared to 57. 48 . the farmers have gone back to cotton cultivation.6 tonnes per acre and 11.

export tax and rawangi mahsool. provincial and local levels. Liquidity crunch The commercial banks were directed by the State Bank of Pakistan to adjust by August 20. The action was based on information that the mills were hoarding the stocks. federal. bad in law and without authority.and paid Rs. Besides. Existing problems Sugar mills in Sindh pay quality premium regularly . Mills in Sindh are thinking about beginning the crushing in November rather than in October. the mills would never like to hoard the stocks and their priority was to empty their godowns as quickly as possible as carrying a huge inventory meant huge financial cost. Delay in commencement of crushing in Sindh has been instrumental in achieving a higher recovery rate. Industry sources. persistently keep hanking for more revenue. surcharge on sugarcane cess.while the mills located in the other two province do not pay such premium . its lifting and stocks. 1996. Oblivious of the difficult situation faced by the sugar industry. the balances of credit made available to the sugar industry against sugar stocks. 49 . yet the district councils recover this tax by a novel procedure. however say that they prepare fortnightly reports pertaining to sugar production. Although the Sindh High Court declared collection of rawangi mahsool unconstitutional. imposition of market committee fee. and the Supreme Court also dismissed the appeal.Incidentally. the hypothesis got some proof last year. Some of the revenue measures imposed in Sindh lately are. road cess. 733 million to the farmers in 1995-96 alone resulting in additional cost of production. varying rates of octroi.

the collectorate has been given discretion to extend the period. The custom & central excise division of the CBR during June 1996 directed the sugar industry to manage clearance of sugar on the basis of 'first-in-first-out'.New deterrents The central excise division of the Central Board of Revenue vide SRO 329(I)96 dated May 30. Imported sugar also enters Pakistan via Karachi.liberated Central Asian states. 50 . Sindh has always had surplus production and fed Balochistan. Every year a substantial quantity is smuggled to Iran and Afghanistan and even goes as far as the newly. However. Since the price of sugar is more or less uniform throughout the country. Structure of sugar industry in the country While sugar production is primarily confined to two provinces. However. lower Punjab and at times supplies were made to the NWFP. Traditionally. to six months from the date of production. the product is consumed in all the four provinces and Azad Jammun and Kashmir. higher cost of freight incurred on dispatches to far-flung areas squeezes the profit margins of mills located in Sindh. Sindh and Punjab. It looks as if the person who has issued the directive has never visited a sugar mill and does not understand its operation. the prices remain subdued in the province. stacking of sugar bags and clearance strictly on the prescribed lines is not manageable and practical. and a small quantity in the NWFP. Sindh and since most of the quantity is sold in the wholesale markets in Karachi. 1996 curtailed the period of sugar storage. The instructions seem to have been issued by error of judgment and common sense. According to the Association sources. upper Punjab and Azad Kashmir. over the years Punjab has attained self-sufficiency. without payment of duty.

By crushing 983. The yield per acre and recovery are also low. waqas. Shakarganj. It is mainly because the climatic conditions are not conducive for cultivation of sugarcane in the province. Shahmurad and Sindh Aabadgar. Waqas crushed the highest quaintly of sugarcane and also produced the highest quantity of sugar.000 tonnes. In the half-yearly report the directors' review expressed on the increase of sugarcane prices which touched new heights as most of the mills entered into an open warfare for procurement of sugarcane.000 tonnes of sugar in 199596 included the names of Brothers.489 tonnes sugarcane during the period with an average recovery of 10. Dewan Sugar Mills started sugarcane crushing on October 18 and ended April 14 during the last season. Dewan has been declaring modest cash dividend in the past in spite of persistent increase in the procurement prices of 51 . Sugarcane needs high temperature and humid atmosphere. Tandlianwal and Shahtaj.15% it produced 100. Faran.Although a number of new mills with large capacities have been established in the Punjab the fact remains that cultivation of sugarcane and production of sugar in the province involves higher costs. In Sindh. Key players The sugar mills in Punjab which produced over 60. The other mills which produced over 50. The industry experts and agriculturists are strongly of the view that shift of sugar production from Sindh to Punjab is one of the major reasons for increase in its cost of production in the country. Habib. The climate in Punjab is dry and the average temperature is high which reduces the moisture content in the standing crop.008 tonnes of sugar. The conditions prevailing in the lower Sindh are most conducive and therefore the yield per acre and average sugar recovery percentage is the highest in the province. Dewan crushed the highest quantity of sugarcane and also produced the largest quantity of sugar exceeding 100.000 tonnes were Bawany.

The unit is located in Punjab and also suffered from shortage of sugarcane and increase in sugarcane support price. The mills located in prime sugarcane growing area of Sindh was established in 1987.600 tonnes of sugar from last year production and earned over half a million dollars. Noon Sugar Mills produced lesser quantity of sugar mainly due to limited availability of sugarcane and disruption of supplies for two weeks. It also produces industrial alcohol. During 143 days of crushing during 1995-96 season it produced over 60. The modifications in the distillery has helped to streamline its operating efficiency.sugarcane. In spite of import of sugar. The industry experts have a valid point that increase in support price and quality premium have failed in increasing yield per acre and recovery percentage but the 52 . Import of sugar Import of sugar is a short-term measure to ensure availability and stabilize its price in the domestic market. Mirpurkhas Sugar Mills also suffered from the shortage of sugarcane and the number of days it worked was reduced to 157 as against 178 days during the last season. The company supplied 59. According to directors' report the company could have crushed larger quantity had there been no shortage of sugarcane. Habib Sugar Mills established in Nawabshah in 1963 has not only tripled its crushing capacity using in-house expertise but is among the few sugar mills which have been declaring handsome dividends in the past. Shahtaj Sugar Mills worked for 157 days during the last season and achieved the highest level of crushing and sugar production since the unit was established.000 bags of 50 kg each to the government for sale through utility stores during the last season. the recent experiment proved a futile effort. The company exported 14.2%.000 tonnes of sugar with an average recovery of 9. the government failed in arresting the upward trend of sugar prices. However.

 A regular training program should be a permanent policy of the management so as to provide not only the required skill to employees but also to help them keeping their skills up to date. It is continuing to make efforts to refine its products and operations to make them more compatible.  There should be family quarters for all married workers. 53 . ALMOIZ INDUSTREIS LIMITED continues to develop the new products like it has been doing in past.  There should be a high school and a college as well for boys and girls in the factory area.  There should be transport facility for workers within the district.  Wages of workers should not be less than Rs3000 per month. the farmers should improve yield per acre or the industry would not be able to sustain further losses. Therefore. Conclusion At present there is no such organization in the world that is free from problem and challenges.  Balance should be at a distance of 5 kilo-meters from the cutters  There should be card system for every employee from helper to manager for punctuality. Recommendations  There should be a safety department in the company to assure the safety of the workers. Every concern has to strive and struggle a lot to be more profitable and to get more competitive edge. The management of ALMOIZ INDUSTRIES LIMITED is taking strategic steps to enable the mill to become strong and progressive institution.cost of sugarcane per tonne has been increasing over the years pushing up the cost of production of sugar. As the business and economic conditions remain uncertain.

presentations. building teams. In this way employees can add to the organization. Message Construction        Can construct effective informative presentations (in various media) Can construct effective persuasive messages (in various media) Able to use a variety of message forms Can construct policy making cases and arguments Effective oral communication skills Effective written communication skills Strong abilities in layout and visual presentation of messages Strong research skills for developing supporting materials for reports. a lot. etc. By working with the professionals I learned how to communicate to the officials. Interpersonal / Organizational Skills        Effective group communication and teamwork skills Knowledgeable in group decision-making techniques Knowledgeable of conflict management techniques Skilled/experienced in managing conflict. etc. e.g. All the employees especially those associated with production should be encouraged. I leaned about the practical life. a new cost effective production technique can result in comparatively huge profits SKILLS AQUIERED During my internship program I learned many things. I have also learned the following skills. Strong interpersonal skills Experienced in working in teams Reasoning logically and critically 54 . and should be involved in decision making and empowered to make innovative decisions.

etc. goal people-oriented.)  Ability to use other (than computer/software) technology Performance Ability   Effective oral communication skills Effective written communication skills Personal  organized. email survey research. video clips on web pages.investopedia. self-motivated.asp#axzz1VS8QYT7Q Business Finance by Gitman Encl:     Copy of Balance Sheet Copy of Income statement Copy of Statement of Cash Flows Copy of Statement of Changes in Owner’s Equity 55 . energetic BIBLIOGRAPHY     Accounts Department Finance Department http://www.Technology   Ability to use various types of software Ability to use specific features of software in interesting ways (e. mail merge.g.

56 .

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