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Chapter 7 Findings and

Recommendations
PREFACE
Assignments are short approach towards practical work. In our course of MBA assignments are
essential part of our subject completion. To full fill the requirement we got assignment in our
subject INV!TMNT ANA"#!I! on $Anal%sis of securit% in&estment'.
To complete the task I selected (akistan Tobacco )ompan% *(T)+ common stock shares. As I was
internee there so its eas% to me do work on it because I ha&e a lot of information about (T).
It,s of all I &isit In&est )ap brokerage house to get information about how to open an account with
them. I stud% Annual report of (T) and get rele&ant data from that. Internet online data also helps
me in m% assignment.
I tried m% best to complete the task .In end I thanks to Almight% -od who gi&e me confidence to
do m% job efficientl% and effecti&el%. and I also grateful to Miss/ !aroosh A0i0 who guide us in
difficult problems. Thanks

P A K I S T A N T O B A C C O
C O M P A N Y
12
Chapter 7 Findings and
Recommendations
PAKISTAN TOBACCO
COMPANY
An Analysis & Evaluation
Of
Companys Op!ations
INSTIT"TE OF MANA#EMENT ST"$IES
"NI%ERSITY OF PES&A'AR
Sssion( )***+,--,
P A K I S T A N T O B A C C O
C O M P A N Y
13
Chapter 7 Findings and
Recommendations
PAKISTAN TOBACCO
COMPANY
An Analysis & Evaluation
Of
Companys Op!ations
Int!ns.ip !po!t su/mitt0 to t. Institut of Mana1mnt
Stu0is
In pa!tial fulfillmnt of t. !2ui!mnts fo! t.
Ba3.lo!s $1! of Businss A0minist!ation
4"NE ,--5
P A K I S T A N T O B A C C O
C O M P A N Y
14
Chapter 7 Findings and
Recommendations
INSTIT"TE OF MANA#EMENT ST"$IES
Internship Report On
PAKISTAN TOBACCO COMPANY
Snio! Sup!viso!(
Si1natu!
Nam
$si1nation
O!1ani6ation
$at
4unio! Sup!viso!(
Si1natu!
Nam
$si1nation
O!1ani6ation
$at
7IST OF ACRONYMS
A56 Akkora 5hattak 6actor%
A78 Account 8ecei&able
A7( Account (a%able
P A K I S T A N T O B A C C O
C O M P A N Y
11
Chapter 7 Findings and
Recommendations
BM! Bailing Material !tore
BAT British American tobacco
B!9 Business !upport 9fficer
)M: )igarette Manufacturing :epartment
)B) )arbonated Board )ontainer
)) )arbon )op%
)BA )ollecti&e Bargaining Agents
)(M; Man )igarette (er ;our
)!A )entral !tock A&erage
:A) :ark Air )ured
:("V :eferred (urchase "eaf Vouchers
)B <ecuti&e )ommittee Board
6)V flue crude Virginia
-(M -ross (rofit Margin
-.8 sheet -oods recei&ed !heet
-"T -reen "eaf Thrashing
-(M -ra&it% 6eeding (ipe
;"(! ;igh "id (okers
IT6 In&entor% Turno&er in :a%s
=(-" =ohn (la%er -old "eaf
"88 "eaf 8eception 8oom
"T) "ackson Tobacco )ompan%
M8( Material 8ecourses (lanning
M9M member of management
MM: Material Management :epartment
9" 9ptimum "abor stablishment
(T) (akistan Tobacco )ompan%
(TB (akistan Tobacco Board
(!: (article !i0e :istribution
89I 8eturn 9n In&estment
89 8eturn 9n quit%
8T: 8ecei&able Turno&er in :a%s
!M: !econdar% Manufacturing :epartment
!M! !hipping Material !tore
>!( >napprised Tobacco !orter
?( ?hite (atta
?M! ?rapping Material !tore
P A K I S T A N T O B A C C O
C O M P A N Y
1@
Chapter 7 Findings and
Recommendations
)hapter A B
Introduction
Chapter objectives
To un0!stan0 t. /a381!oun09 pu!pos an0 t. s3op of t. !po!t
To stu0y t. mt.o0olo1i3al tools us0 in t. !po!t
B.B Background of the stud%
Developing countries and economies in transition face
numerous challenges in their industrial development and
modernization. Industry needs a supportive climate for
growth. Managers must make an industry more competitive
to sell more of what they make. The industrial base must
be expanded to generate increasingly more productive
jobsand all this in an era of global volatility and constant
change.
!akistan Tobacco "ompany is the biggest manufacturing
company in !akistan.
It was established in #$%& as Imperial tobacco closed
business in !akistan. !akistan Tobacco "ompany is the
subsidiary of '(T. It is engaged in the manufacturing and
selling of high )uality of cigarettes.
*ver the years the company has maintained its position in
the age of competition and has tried to increase the
demand for their products. They seek innovation and
improvement in every part of their business through a
system of ideas+ suggestions+ feedback and appreciation.
P A K I S T A N T O B A C C O
C O M P A N Y
@C
Chapter 7 Findings and
Recommendations
!akistan Tobacco "ompany is determined to furnish its
customers with high )uality products and excellent
services.
1.2 Purpose of the study
The study is intended to analyze !akistan Tobacco
"ompany in terms of its strong and weak points and other
factors affecting the organization either positively or
negatively. ,pecial emphasis is placed on financial
position and given projects+ which was the main focus of
work during the internship period.
The purpose of the study and report is to fulfill the
re)uirements of 'achelors in 'usiness (dministration at
Institute of Management ,tudies -niversity of !eshawar.
1.3 Scope of the study
The study is applicable only to !akistan Tobacco
"ompany+ (kkora .hattak factory.
It encompasses the operations of different departments+
projects carried out during the study+ analysis and
recommendations.
1.3.1 Limitations of the study
The span of the operation of !akistan Tobacco "ompany is
too large to be covered completely in two months. Time
Constraints+ thus+ constitutes a major constraint for this
report.
1.3.2 Delimitation of the study
This report is useful for the students of management in
general and for those interested in finance particular.
P A K I S T A N T O B A C C O
C O M P A N Y
@B
Chapter 7 Findings and
Recommendations
!akistan Tobacco "ompany and other interested parties
concerned in financial decisionmaking can use it as
guideline.
1.4 Methodology of the study
The study utilizes primary and secondary data.
1.4.1 Primary Data
The firsthand data+ .i.e. the data collected for the first time
is called primary data. !rimary data for this report was
collected through unstructured interview and participative
and semi participative observation.
1.4.2 Secondary Data
,econdary data is the one collected from other sources
and already processed through mathematical and statistic
techni)ues. ,econdary sources for the study are official
!akistan Tobacco "ompany and '(T journals and
websites.
1. Scheme of the !eport
The report consists of following sections.
1..1 Section "
,ection I is aimed at providing a perceptual framework for
the report. It includes background of the study+ purpose+
P A K I S T A N T O B A C C O
C O M P A N Y
@D
Chapter 7 Findings and
Recommendations
scope+ limitation+ delimitations+ methodology and scheme
of the study.
1..2 Section ""
,ection II gives an overall review of !akistan Tobacco
"ompany and '(T. This section also covers the objectives+
functions and processes of departments.
1..3 Section """
,ection three is based on analysis of !akistan Tobacco
"ompany (kkora in general /,0*T1 and financial analysis
project carried out during internship in particular.
1..4 Section "#
,ection I2 comprises of findings based on the analysis+ its
recommendations and implementation plan.
)hapter A D
P A K I S T A N T O B A C C O
C O M P A N Y
@E
Chapter 7 Findings and
Recommendations
3istorical background
)hapter objecti&es
Ov!vi: of t. BAT .isto!y;
<ui38 1lan3 of BAT p!o0u3ts;
To stu0y PTC .isto!y9 mission an0 o/=3tivs;
,;) B!itis. Am!i3an To/a33o &isto!y
The business was originally formed in #$45+ when to end
an intense trade war 6 the Imperial Tobacco "ompany of
the -nited .ingdom and The (merican Tobacco "ompany
of the -nited ,tates agreed to form a joint venture+ the
'ritish(merican Tobacco "ompany 7td. The parent
companies agreed not to trade in each other8s domestic
territory+ to assign brand territory+ to assign brand rights to
each other for use in their respective home markets+ and to
assign trademark+ export business and overseas
subsidiaries to the joint venture. The (merican Tobacco
"ompany controlled twothird of the share and Imperial the
remainder.
The 'ritish (merican Tobacco began business life in
countries as divers a "anada+ "hina+ 9apan+ Denmark+
:ermany+ ;ew <ealand+ ,outh (frica and (ustralia 6but not
the -. and -,(. 'y #$#4+ its operations had extended to
the 0est Indies+ India+ "eylon /,ri 7anka1+ =ast (frica+ and
9ava+ Malaysia and ;igeria.
P A K I S T A N T O B A C C O
C O M P A N Y
@F
Chapter 7 Findings and
Recommendations
In #$##+ the (merican Tobacco "ompany was adjudged in
the -,( to be a monopoly+ and the complex group was
obliged to breakup including divesting its shares in the
'ritish(merican joint venture.
B!itis. Am!i3an To/a33o 1ot list0 on t. 7on0on Sto38 E>3.an1 in )*), an0 B!itis.
invsto!s a32ui!0 most of its Am!i3an pa!nts s.a!s; T. 3ompany :as no: f! to
3on0u3t its /usinss in0pn0ntly t.!ou1.out t. :o!l09 >3pt fo! t. "K? :.! t.!
:! still t!!ito!ial a1!mnts :it. Imp!ial; Imp!ial !tain0 its on+t.i!0 int!st9
alt.ou1. t.s tis :! vntually 3ut 0u!in1 t. svntis9 in )*)@; B!itis. Am!i3an
To/a33o a32ui!0 t. B!a6ilian to/a33o 3ompany Sou6a C!u69 :.i3. to0ay is B!a6ils
la0in1 to/a33o manufa3tu!!; B!itis. Am!i3an To/a33o mov0 into t. "S ma!8t in )*,A9
/y pu!3.asin1 B!o:n & 'illiamson9 t.n a small 3ompany in No!t. Ca!olina an0 no:
"SAs t.i!0 la!1st to/a33o 3ompany;
Fo! B!itis. Am!i3an To/a33o9 t. t.i!tis :! a p!io0 of 1!o:t.; In0pn0nt
0ist!i/ution nt:o!8s :! 0vlop0 an0 /3am fully+fl010 su/si0ia!is; 7o3al laf
1!o:in1 an0 manufa3tu!in1 op!ations :! sta/lis.0 in In0ia9 In0o+C.ina9 A!1ntina9
M>i3o an0 Ni1!ia; T. 3ompany a3.iv0 a ma!8t s.a! of ov! B- p! 3nt in C.ina9
alt.ou1. t.s op!ations :! nationali60 /t:n )*@* an0 )*B,;
T. t.! 03a0s f!om t. si>tis :! a p!io0 of 0iv!sifi3ation :it. a 1!a0ual >pansion
into pap! an0 pulp9 in3lu0in1 'i11ins Tap an0 Applton Pap!s? Cosmti3s9 :.!
B!itis. Am!i3an Cosmti3s /3am a "K in0ust!y la0!? !tailin19 :.! a32uisitions in
t. svntis in3lu00 A!1os in t. "K an0 Sa8s Fift. Avnu in t. "SA? an0 lat! finan3ial
s!vi3s9 :.! in t. i1.tis t. #!oup o:n0 Ea1l Sta!9 Alli0 $un/a! an0 Fa!m!s
#!oup;
By )**-9 BAT in0ust!is9 t. .ol0in1 3ompany fo!m0 in )*AC9 .a0 03i00 to fo3us on
to/a33o an0 finan3ial s!vi3s an0 0ispos0 off almost v!yt.in1 ls;
&o:v!9 t. nintis sa: a !a0i3al 3.an1 an0 oppo!tunitis fo! /ot. to/a33o an0 finan3ial
s!vi3s; Si1nifi3ant n: t!a0in1 potntial fo! to/a33o m!10 D as fo! ot.! 3onsum!
1oo0s D :it. in3!asin1 3onomi3 li/!ali6ation an0 t. /!a8+up of stat monopolis9
sp3ially in Cnt!al an0 East!n Eu!op an0 t. Fa! East;
In )**E9 t. finan3ial s!vi3s /usinsss :! m!10 an0 B!itis. Am!i3an To/a33o
/3am a spa!atly 2uot0 3ompany on t. 7on0on Sto38 E>3.an1.
#$$$ saw the merger with >othmans International+ the
world8s fourth largest tobacco company+ and+ in ?ebruary
P A K I S T A N T O B A C C O
C O M P A N Y
@2
Chapter 7 Findings and
Recommendations
5444+ Imperial Tobacco "ompany of "anada became a
subsidiary+ following the restructuring of Imasco 7imited.
In ,--)9 t. #!oup announ30 ma=o! invstmnts in Sout. Ko!a9 Tu!8y9 %itnam9 Ni1!ia
an0 E1ypt; t.y :ill / invstin1 "SF B-- million in t.s ma!8ts ov! t. n>t f: ya!s;
In ,--,9 :it. a 3ntu!ys >p!in3 in int!national to/a33o ma!8ts an0 >p!tis in all
asp3ts of t. /usinss9 B!itis. Am!i3an To/a33o is fa3in1 t. futu! :it. 3onfi0n3;
5.5 '(T at :lance
T. /at is t. :o!l0 most int!national to/a33o 1!oup; It .as /usinss in )E- 3ount!is :it.
a ma!8t s.a! of )B;) p!3nt; It .as ov! 5-- /!an0s in its po!tfolio an0 ma8s 3i1a!tt
3.osn /y on in svn of :o!l0 on /illion a0ult smo8!s; It .ol0s st!on1 position in a3. of
its !1ion an0 .as la0!s.ip in mo! t.an CB ma!8ts; T. 1!oup .as ov! E- fa3to!is in C@
3ount!is9 p!o3ssin1 som CC- million 8ilos of laf an0 p!o0u3in1 ov! E-- /illion 3i1a!tt a
ya!; T. 3ompany in3lu00 asso3iat0 3ompanis mployin1 ov! E-9--- popl :o!l0:i0;
D.E Major Brands
'(T has particular emphasis on its four international drive
brands.
D.E.B "uck% !trike
It is t. /st sllin1 int!national /!an0 an0 t. p!mi! 1lo/al /!an0 fo! t. 8y AS" 5-
3at1o!y; Its volum in ,--) in3!as0 /y a !3o!0 @G s.o:in1 1!o:t. in 8y int!national
ma!8ts su3. as F!an39 #!many an0 Spain;
D.E.D 5ent
.ent is the premier freestanding lights brand and its role is
to strengthen the portfolio in the critical premium+ lights
and (,- @4 segments. The original % markets that
relaunched .ent in #$$$. />ussia+ "hile+ >omania and
3ong .ong1 has show impressive volume growth up over
A4B in 544#.
D.E.E :unhill/
In ,--) full0 /y its outstan0in1 p!fo!man3 in Sout. Ko!a9 Malaysia an0 Tai:an9
$un.ill a3.iv0 t. .i1.st v! volum in t. .isto!y of t. /!an0 :it. )@G 1!o:t. ov!
,---;
P A K I S T A N T O B A C C O
C O M P A N Y
@3
Chapter 7 Findings and
Recommendations
D.E.F (all Mall
It is t. la0in1 mi0 p!i3 /!an0 of BAT; In ,--) Pall Mall >p!in30 si1nifi3ant 1!o:t.
:it. volums up ,)G; It s.o:0 st!on1 p!fo!man3 in #!many9 Russia9 &un1a!y9 Italy9
"8!ain an0 Romania;
P A K I S T A N T O B A C C O
C O M P A N Y
@4
Chapter 7 Findings and
Recommendations
D.F (akistan Tobacco )ompan%
Pa8istan To/a33o Company :as sta/lis.0 in )*@A; It too8 ov! t. /usinss of t. Imp!ial
To/a33o Company HIn0iaI9 op!ational sin3 )*,* in t. t!!ito!y t.at fo!m0 Pa8istan9
Pa8istan To/a33o Company :as t. fi!st multinational to st+up /usinss in Pa8istan; T.
3ompany is a mm/! of t. B!itis. Am!i3an To/a33o :.i3. mploys ov! )--9--- popl
op!atin1 f!om C- 3ount!is;
Manufa3tu!in1 op!ations 3ommn30 f!om a small pilot p!o0u3tion plant st up in a
:a!.ous in Ka!a3.i Po!t :it. mont.ly p!o0u3tion of 5- million 3i1a!tts a1ainst sals of
)C-+t. 1ap /in1 ma0 up /y impo!ts; Fi!st full+fl010 fa3to!y :as sta/lis.0 in )*BB at
4.lum; T. sam ya! Pa8istan To/a33o Company /3am a pu/li3 limit0 3ompany;
At t. tim of /i!t. Pa8istan in )*@A9 all to/a33o :as impo!t0 into t. 3ount!y; In )*B,9 a
0vlopmnt p!o=3t fo! to/a33o laf :as initial0 in t. No!t. 'st F!onti! P!ovin3
HN;';F;P;I9 :.i3. p!o1!ss0 !api0ly; A !0!yin1 plant :as st up at A88o!a K.atta8 an0
3ultivation of %i!1inia To/a33o Commn30; Aft! t. /i!t. of Ban1la0s. an0 3ons2untly9
:it.0!a:al of $a33a & C.itta1on1 fa3to!is9 a n: 3i1a!tt fa3to!y :as st up at A8o!a
K.atta8 HN;';F;P;I in )*AB to mt t. in3!asin1 0man09 Pa8istan To/a33o Companys
=ou!ny on t. !oa0 p!o1!ss an0 p!osp!ity 3ontinus :it. som ma=o! n:
0vlopmntJinvstmnt p!o=3ts ov! t. last f: ya!s;
!rojects commenced areC
P A K I S T A N T O B A C C O
C O M P A N Y
@1
N o . 1
F i r s t C h o i c e
F o r E v e r y O n e
T r a n s f o r m P T C t o p e r f o r m w i t h t h e
S p e e d , f e x i i ! i t y a n d e n t e r p r i s i n " s p r i t e o f
a n i n n o v a t i v e , c o n s . # f o c $ s e d c o m p a n y
% e " a i n v o ! $ m e & v a ! $ e ! e a d e r s h i p y p o s i t i o n i n "
v i a ! e r a n d s i n a ! ! c o n s $ m e r # r e ! e v a n t s e " m e n t s
' r i v e w ( c s t a n d a r d s i n p r o d $ c t s , p r o c e s s e s & s e r v i c e s
t h r o $ " h p a s s i o n a t e , s ) i ! ! e d a n d c o n * d e n t p e o p ! e
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Chapter 7 Findings and
Recommendations
Mo0!ni6ation of #7T H!0!yin1I plant;
"p1!a0in1 of P!ima!y an0 S3on0a!y manufa3tu!in1 fa3ilitis at A8o!a K.atta8 an0
4.lum fa3to!is;
T. a32uisition of mo0!n .i1.+sp0 7O#AJMAK 3i1a!tt ma8in1 ma3.ins;
Pa8istan To/a33o Company9 /y spa!.a0in1 t. 3ampai1n0 fo! mo0!n a1!i3ultu!al an0
in0ust!ial p!a3ti3s9 .as play0 an >t!mly si1nifi3ant !ol in t. p!o1!ss an0
0vlopmnt of t. 3ount!y; Pa8istan To/a33o Company is t. fi!st fo!i1n invstmnt in
Pa8istan to pion! t. manufa3tu! of 3i1a!tt an0 3ultivation of %i!1inia to/a33o in t.
3ount!y; T.!ou1. t.i! a0van30 t3.ni2us an0 fa!min1 p!a3ti3s9 Pa8istan no: !an8s
t.i!0 in Asia in t!ms of to/a33o yil0s K1sJ&a;
Pa8istan To/a33o Company is st!on1ly 3ommitt0 to /in1 a 1oo0 3o!po!at 3iti6n; Ov!
many ya!s : .av /n(
$onatin1 to a num/! of 0s!vin1 3auss;
E0u3atin1 1!o:!s in t. latst t3.ni2us & p!omotin1 mo0!n t3.nolo1y in
a1!i3ultu!9 :.i3. .as /nfit0 not only to/a33o 1!o:!s /ut also all a1!i3ultu!ists in
t. !1ion;
Plantin1 t!s t.!ou1. ou! A fo!station p!o1!am;
Sponso!in1 an0 p!omotin1 spo!ts a3tivitis;
Runnin1 f! mo/il 0ispnsa!is;
Playin1 a si1nifi3ant !ol in t. !a0i3ation of poppy 3ultivation /y p!ovi0in1 alt!nat
in3om sou!3s to t. in.a/itants of an3st!al poppy 3ultivation a!as;
2. Production Capacity of $%%ora &hatta% 'actory
(kkora .hattak ?actory produces cigarettes according to
the re)uirement of the !T" and markets. !roduction of
(.? is increasing year after year. Dear wise production
schedule is as under
D=(> 0I,= "I:(>=TT=, !>*D-"TI*; *? (.? /Table 5.#1
Dear !roduction /million1
#$E$#$$4 &+$5@+#A%
#$$4#$$# &+@%&+4%F
#$$##$$5 &+AE&+@5#
#$$5#$$@ E+5%#+#E#
P A K I S T A N T O B A C C O
C O M P A N Y
@@
Chapter 7 Findings and
Recommendations
#$$@#$$% E+%55+%FF
#$$%#$$A E+@#F+55A
#$$A#$$F $+&A4+%&$
#$$F#$$& E+&A&+%$E
#$$&#$$E $+&A4+%&$
#$$E#$$$ ##+##%+%&E
#$$$5444 $+&5$+A$A
5444544# #@+5F#+444
HSou!3( Finan3 0o3umnts of AKFI
P A K I S T A N T O B A C C O
C O M P A N Y
BCC
Chapter 7 Findings and
Recommendations
(A5I!TAN T9BA))9 )9M(AN# G A56
(!)$*()!$M
? a c t o r y M a n a g e r
3 * D ( c c o u n t i n g
3 * D ! r o d u c t i o n
3 * D = n g i n e e r i n g
3 * D M a t e r i a l M a n a g e m e n t
3 * D 3 u m a n > e s o u r c e
3 * D , e c u r i t y
HSou!3( $ata/as &R $pa!tmntI Fi1u! ,;)
P A K I S T A N T O B A C C O
C O M P A N Y
BCB
Chapter 7 Findings and
Recommendations
HSou!3( $ata/as &R$I Fi1u! ,;,
P A K I S T A N T O B A C C O
C O M P A N Y
BCD
P R O C E S S F L O W C H A R T O F P T C A K F
G r o w e r s
L e a f D e p a r t m e n t
C - 5 G o d o w n s
C M D
P M D
S M D
F ! t e r R o d
P a " # n $
P a r " e ! M a # n $
S % p p n $ G o d o w n
S a ! e s D e p a r t m e n t
C o n s & m e r
G L T
C o n d t o n n $
C & t t n $
D r ' n $
Chapter 7 Findings and
Recommendations
Chapter + 3
Departmentation
)hapter objecti&es/
To stu0y t. PTC 0pa!tmnts 3on3pts;
To un0!stan0 t. 0pa!tmnts;
Ov!vi: t. st!u3tu!9 fun3tions9 an0 p!o3ss of a3. 0pa!tmnt;
5;) #!n 7af T.!s.in1
7af A!a an0 #7T /ot. p!fo!m som sp3ifi3 fun3tions9 :.i3. a! 3losly9 3onn3t0 :it.
t. /asi3 !a: mat!ial t. To/a33o; On p!fo!ms t. /uyin1 an0 ot.! t. lmnta!y
p!o3ss; As 3la! f!om its nam9 7af A!a :.i3. a! 3omp!is0 of 0pots all ov! t.
to/a33o 1!o:in1 !1ions of N'FP an0 som a!as of Pun=a/; T.s 0pots p!fo!m many
fun3tions fo! t. #7T; T.y fi!st su!vy t. to/a33o 1!o:n in t.at !1ion an0 assi1n t.
2uality 1!a0s to a3. fa!m9 :.i3. is 0on t.!ou1. 3.38in1 t. to/a33o; T. laf tams visit
almost all of t. fa!ms to 8no: t.at :.i3. 1!o:! is 1!o:in1 2uality to/a33o; T.is su!vy
:ill .lp t.m in /uyin1? t. !ason is t.at t.y :ill 8no: t.at :.i3. fa!m! .as t. /st
p!o0u3t; '.n t. /uyin1 sason sta!ts t.y :ill sta!t /uyin1 t. to/a33o in li1.t of t.
su!vy an0 t. 3ompany ta!1ts p!ovi00 to t.m; T.y :ill t!y to /uy t. /st to/a33o f!om
a3. 1!o:!; T. limit of /uyin1 f!om on fa!m! o! 1!o:! is ,,-- K1s; T.is limit 3an alt!
a /it 1ivin1 3onsi0!ation to t. 2uality of t. lot; T. 2uality insp3tion is 0on /y t. laf
a!a mana1! :.o assi1ns t. lot its 0u p!i3; T. limit to / assi1n0 to a3. %i!1inia
to/a33o t.s ya!s is 1oin1 in /t:n @- to @5 RupsJK1s; & 3annot assi1n lo:! o!
.i1.! p!i3 t.an t.at; T. 1!o:! :.o :ill /!in1 .is to/a33o fo! sal :ill .av to 1t a
3ont!a3t /3aus if t.y 0o not .av any 3ont!a3t t.y 3annot sll it to t. PTC; T. mony
:ill / pai0 to t. laf a!as 0pots :.o :ill t.an 0ist!i/ut t. mony 3o!!3tly to all t.
1!o:!s;
P A K I S T A N T O B A C C O
C O M P A N Y
BCE
Chapter 7 Findings and
Recommendations
(!)$*()!$M (' )LT
7 e a f D i r e c t o r
: 7 T M a n a g e r 7 e a f / t e c h 1 M a n a g e r 7 e a f M a n a g e r
> M
, w a t
> M
D a r 3 u s s a i n
> M
M a n s e h r a
> M
: u j r a t
> M
, h e r : a r t h
, p e c i a l ! r o j e c t
M a n a g e r
7 o g i s t i c M a n a g e r ! r o c e s s i n g M a n a g e r
7 o g i s t i c s
0 . , h o p
5 G . ( H ( d m i n
; . M a i n t
' o t h ! l a n t s
, h i f t M a n a g e r , h i f t M a n a g e r
' o t h ! l a n t s
HSou!3( $ata/as #!n 7af $pa!tmntI Fi1u! 5;)
T. 0iff!nt to/a33o pu!3.as0 /y t. laf a!a is 0ivi00 into mainly fiv HBI 8in0s an0
mo! o! lss as many 1!a0s; T. 8in0s a! as follo:9
P A K I S T A N T O B A C C O
C O M P A N Y
BCF
Chapter 7 Findings and
Recommendations
); FC% HFlu Cu!0 %i!1iniaI Main
,; $AC H$a!8 Ai! Cu!0I
5; 'P H'.it PattaI
@; B"R7EY
The kind of tobacco !T" buys the most is the 2irginia+
which is used in all of the brands of "igarettes
manufactures in !T". It is graded in almost seven
categories+ which are from !(.# to !(.&. These grades
depend on the moisture+ moldiness and the amount of cure
given to the tobacco. If it is too cooked or its uncooked it
will be graded lower and the prime and correctly cured
2irginia will be graded the highest and will fetch higher
price to the tobacco grower. These steps ensure the
)uality+ which !T" claims and this encourage+ the growers
to produce the best )uality.
(fter the buying is over the depots will send the purchased
tobacco for processing to !T". 0hen the tobacco enters
the gates of !T" the function of :7T starts. (s the truck
enters the gate of !T" which is known as the marshalling
area of the :7T the clerk will prepare the 7DAF which is the
first document which contains the complete description of
every thing. (fter that the :7T )uality team checks the
)uality of tobacco and than >e grade and >e weight the
tobacco. It is than stored in the -n prized tobacco godown.
The -n prized tobacco is that tobacco which is in raw form
and still to be processed.
0hen :7T starts processing+ it means that the very first
process of making cigarette starts. In this step the :7T
orders tobacco from the -T, /-n prized Tobacco ,tore1.
P A K I S T A N T O B A C C O
C O M P A N Y
BC2
Chapter 7 Findings and
Recommendations
This is done against the leaf document no F# or 7DF#+
which is the computer copy of 7DA&. The 7DA& is that
document which is procured after the final weight and
grading of the tobacco. The tobacco comes with the two
copies of 7DF#. The tobacco thence arrives is checked and
unwanted grades or worn out tobacco thence arrives is
checked and unwanted grades or worn out tobacco is
rejected. ?rom that on the process of :7T starts.
The basic purpose of :7T is to separate lamina /leaf1 from
the stem /midrib1 and that what8s the final product of :7T.
This is considered to be the first step towards making of
)uality cigarettes. Its basic purpose is already mentioned it
also maintains the re)uired amount of moisture in the
tobacco+ which is the most important factor in the whole
usage or the life cycle of tobacco. This is kept accordingly.
The lamina is the most important out come of the :7T
process. The higher the yield of lamina the happier the :7T
is. If it8s only one B higher than expected that means
surplus of almost #A million rupees.
There are two plants in :7T and each one has different
capacity to perform. 0ith installation of new plant the
capacity of :7T has increased dramatically. This year it will
be used for the first time.
The whole process is mechanized in :7T+ which are made
up of different machines the details go like this.
3.2 'eeding Point
P A K I S T A N T O B A C C O
C O M P A N Y
BC3
Chapter 7 Findings and
Recommendations
This is the very first part of the :7T operations. It consists
of conveyers. The main plant is supplied through these
different conveyers for different operations. There are
dusts units installed in the feeding area+ which are mainly
removed manually.
3.2.1 'irst Conditioning Cylinder
To maintain the re)uired amount of moisture in the tobacco
that is #FB and provide heat to the tobacco for further
processes this cylinder is used. In this cylinder there are
spikes and baffles+ which make the tobacco leaf open for
further processes and without damaging the structure of
the leaf.
3.2.1 Sand !eel
It contains different meshes and reels+ which are there for
the remove any scrape+ or unwanted material from the
tobacco. It8s the tiny wholes in the reel allows the scrape to
be removed out.
3.2.1 Con,eyer
The main purpose of this conveyer is to convey the
tobacco to the conditioning cylinders.
3.2.2 Second Conditioning Cylinder
To condition the tobacco to the re)uired limit it is done
trough this cylinder. Mainly it keeps the moisture /which is
a very important factor in the whole life chain of tobacco1
to the re)uired limit+ which is normally #EB. There are
sensory panels fitted in this cylinder+ which determine the
amount of moisture in the whole lot.
P A K I S T A N T O B A C C O
C O M P A N Y
BC4
Chapter 7 Findings and
Recommendations
3.2.3 $uto 'eed
The (uto ?eed is used to provide even number of tobacco
to the threshers so that the volume of supply remains
constant.
3.2.4 Threshers
It is the most important of all the :7T processes. It8s the
place where the lamina is separated from the stem. In :7T
the whole threshing process is divided into five major
stages after these stages the tobacco is assume to be
separated completely into two parts.
These stages are as followingC
#. ?irst ,tage C A4B
5. ,econd ,tage C 54B
@. Third ,tage C #4B
%. ?ourth ,tage C #4B
A. ?ifth ,tage C #4B
3.2. Multi Separator or Classifier
It blows hot air into the lamina from below and only lamina
parts are able to flat in air where they are sucked up by an
air pump+ which is located on top of the "lassifier.
3.2.. Sha%er
It selects the stem parts only
3.2.. Suc%er
It sucks only lamina parts
3.2.. Dryer
The drier has been divided into three main zones+ which
areC
P A K I S T A N T O B A C C O
C O M P A N Y
BC1
Chapter 7 Findings and
Recommendations
#. Dryer <one
5. "ooler <one
@. >eorder <one
In first zone blowing hot air into it dries the lamina. It has E
sections.
In second zone blowing chill air into it reduces the
temperature.
To remove all of moisture from the tobacco this zone is
used because if it8s packed with out it the tobacco will rot
in space of days.
3.2.- Press
(t this point the end product /tobacco bales1 is pressed
into form of bales in large "%E cases. 'y introduction of
the new ?ish burn !ress the )uality and the )uantity of the
:7T end product in the current year will increase
dramatically. It will enable :7T to press the tobacco
according to international standards.
P A K I S T A N T O B A C C O
C O M P A N Y
BC@
Chapter 7 Findings and
Recommendations
P!(C.SS 'L(/ (' )LT
P A K I S T A N T O B A C C O
C O M P A N Y
BBC
Chapter 7 Findings and
Recommendations
(Source: Database GLT) Figure 3.2
P A K I S T A N T O B A C C O
C O M P A N Y
BBB
Chapter 7 Findings and
Recommendations
3.3 Qualit Co!trol i! GLT
Hualit% means production according to the preIdetermined standards. The qualit% control :epartment of -"T 6actor%
maintains the qualit% of the pri0ed "eaf. 6or this purpose. it takes tobacco from different points in the -"T factor%. This
tobacco is tested and the TestIresults are compared against the standard.
The following tests are conducted in the Hualit% )ontrol section of the -"T 6actor%/
(article !i0e :istribution Test *(!:+/ To determine the ratios of different "amina si0es after threshing in -"T. at
different stages.
Moistu! Tst( To tst t. moistu! of t. To/a33o at 0iff!nt sta1s;
San0 $t!mination Tst( To 0t!min t. p!3nta1 of san0 in #!n 7af an0 final
p!o0u3t;
Fo!i1n Matt! Tst( Ev!y t.in1 in t. to/a33o ot.! t.an To/a33o itslf an0 san0 is
3all0 Fo!i1n Matt!; Fo!i1n Matt! Tst is 3on0u3t0 to 0t!min t. num/! of
pi3s of Fo!i1n Matt! in t. to/a33o;
Stm Si6in1 Tst( T. no!mal si6 of Stm !an1s f!om );BL to ,L; T.is tst is 3on0u3t0
to 0t!min t.at t. stm .as /n 3ut in t. !i1.t si6;
7amina on Stm( To 0t!min t. si6 of lamina on t. Stm;
P A K I S T A N T O B A C C O
C O M P A N Y
BBD
Chapter 7 Findings and
Recommendations
P!"M$!0 M$*1'$CT1!"*) D.P$!TM.*T
(!)$*()!$M
! r i m a r y M a n a g e r
T e a m 7 e a d e r 9 i n n a h / " o n d i t i o n i n g 1
* f f i c e " l e r k a n d ! e o n
" A : o d o w n
M a s t e r T e c h n i c i a n
" o n d i t i o n i n g T e a m
T e a m 7 e a d e r ; i s h t e r / " u t t i n g H D r y i n g 1
> i p p i n g , e c t i o n
M a s t e r T e c h n i c i a n
" u t t i n g H D r y i n g T e a m
T e a m 7 e a d e r / M a i n t e n a n c e 1
M a i n t e n a n c e , u p e r v i s o r
M a i n t e n a n c e T e a m
HSou!3( $ata/as &R$I Fi1u! 5;5
P A K I S T A N T O B A C C O
C O M P A N Y
BBE
Chapter 7 Findings and
Recommendations
E.F (rimar% Manufacturing :epartment
The process of manufacturing cigarettes starts from !MD.
In !MD there is a 7eaf >eception >oom /7>>1 where
tobacco comes from excise bounded godown"8A.
In 7RR9 t. to/a33o !3iv0 f!om CB is !+:i1.0 so t.at any 3.an1 in t. :i1.t of
to/a33o t.at mi1.t .av /n 3aus0 0u to a/so!ption of moistu! 0u!in1 its stay in 1o0o:n
may / a0=ust0; T. >3is 0uty is t.n pai0 on t.at amount of to/a33o; CB 0liv!s
to/a33o to 7RR a33o!0in1 to t. !2uisition !3iv0;
Aft! p.ysi3al insp3tion in t. 7RR9 t. lamina an0 stm a! issu0 to MJC a33o!0in1 to its
!2ui!mnts; In MJC t.y a! p!o3ss0 on t:o spa!at plants;
E.F.B "amina
The bales are loaded on a conveyer and taken for cutting to
bale slicer. =ach bale /is cut into three pieces. Then casing
is used for moisture retention and addition of sugars
=ach brand has its own formula for the preparation of
casing. These chemicals include :ralantor+ .ookie+ and
Durlock etcI
(fter casing+ the lamina is kept for 5 hour in the blending
bin+ and then it is passed through a conveyer to the airlift
where the re)uired form of tobacco is flown upwards and
then taken through the sieve conveyer to >c% cutter.
(fter cutting the lamina is passed through a dryer. (fter
drying it is transferred to ?! ,ilos in the "ut Tobacco store.
3.4.2 Stem
The stem received from 7>> is transferred though sieve
conveyer to ,tem airlifts where the ?oreign Matter is
separated. Then it is taken to :?! /:ravity ?eeding !ipe1
for conditioning. Then it is kept in the blending bin for @
hours. ?rom blinding bin stem goes in to .T cutter. 0here
P A K I S T A N T O B A C C O
C O M P A N Y
BBF
Chapter 7 Findings and
Recommendations
stem is cut at #F4cut per inch+ then the cut stem goes to
high velocity steam tube which expand stem then it goes to
gas roaster where it8s dried to#F.AB moisture and then it is
stored in "!, ,ilos from where it added back to lamina as
per re)uirement.
P A K I S T A N T O B A C C O
C O M P A N Y
BB2
Chapter 7 Findings and
Recommendations
(!)$*()!$M (' SMD 2S.C(*D$!0 M$*1'$CT1!"*)
D.P$!TM.*T3
? a c t o r y M a n a g e r
! ! , M
! r o d u c t i o n
M a n a g e r '
! r o d u c t i o n
M a n a g e r "
! r o d u c t i o n
M a n a g e r (
! r o d u c t i o n
M a n a g e r D
G ( M
I J " M a k i n g I J " ! a c k i n g
/,ourceC Database 3>D1 ?igure @.%
P A K I S T A N T O B A C C O
C O M P A N Y
BB3
Chapter 7 Findings and
Recommendations
3. Secondary Manufacturing Department
,MD is the department in which the actual manufacturing
of the cigarette takes place. Two types of materials are
used in the manufacturing process.
Tobacco
0rapping Material
Tobacco is issued to the ,MD through "T,. Tobacco is
sucked through suction pipes to the ,MD. The tobacco for
each blend of cigarette is different and stored in "T,+
which are colorcoded. =ach color represents different
blends of tobacco. The different brands of cigarettes
manufactured in ,MD are :old ?lake /,K1 "apstan /(D1+
0ills /;T1+ =mbassy .ings /"31+ =mbassy ?ilter /"71+ wills
.ings /'!1+ ;o. F.
The wrapping material are issued to ,MD from the material
issued from MMD include.
3..1 'ilter !od Manufacturing
#. (cetate Tow
5. Till box
@. :um or (dhesive
%. !lug >ap
3..2 Pac%ing Material
#. ,hell ,lides
5. ?lats
@. Inner "ollor 'oard
%. (luminum ?oil
A. (dhesive
P A K I S T A N T O B A C C O
C O M P A N Y
BB4
Chapter 7 Findings and
Recommendations
F. !oly prop
&. Tear off ribbon
E. !arcel !aper
$. "'" "arbonate board center
#4. =nd 7abels
##. 3ang lets
#5. Tipping !aper
3.- Team Setup in SMD
In order to achieve the functional objective and make the
working more efficient+ ,MD has been divided into different
formation of teams. =ach team has a team leader who acts
like a bridge between workers and management. There are
certain targets for each team on the achievement of which
they are appreciated and motivated in the shape of bourses
and other incentives. 'ut incase of not achieving its target+
is a matter. If regret and shame for the whole team+ thus
increasing the efficiency and productivity of the teams.
There are a total of & teams in the ,MD department. Tipu
Team works for the manufacturing of the filter rod while the
other six teams manufacturing the cigarettes. These teams
are :hazi+ .arwan+ ;eelab+ .hyber+ (baseen and In)ualab.
There are tow kinds of "ig makers used in the ,MD+ the old
ones and the new ones. The old makers are M(>.E+ which
are )uite old machines and are capable of making 5444
sticksJminute. There are total four machines of this kind
running in the ,MD. The new machine+ which has recently
P A K I S T A N T O B A C C O
C O M P A N Y
BB1
Chapter 7 Findings and
Recommendations
started working+ is the 7*:(+ which is capable of making
F444 sticksJminute. The company has already bought a
new version of M(>.E+ which is M(>.$I but that is not
installed yet it has the capability of making %444
sticksJminute. The company has a valiant plan of phasing
out the old MarkE and to introduce all new Mark$ in its
place. This is a great step in reduction of variable cost.
The filter rod department prepares the filter rod. The
material department supplies the raw materials+ which are
mainly acetate Tow+ plug warp+ till box+ hot melt and
adhesives. The filter rod is manufactured in two size
regulations+ one is a A%mm and other is FFmm. The filter
rod thence produced is sent to the ,MD through filter rod
treys. There is an addition to the makers+ which then adds
the filter rod with cigarettes.
0hen cigarettes are made they are sent to packers+ which
packs them in the packets and send them for further
processes. These are also two sizes of packets and two
kinds of packer machines. 37!s /3igh 7id !ackers1+ which
are+ total seven in numbers and each packs 5A4
packetsJminute. The 37!s comes with different models and
different work capacity. The likes of #54+ #E4 and 5A4 are
there. There are separate machines for the packing of the
shell slides packs+ which are D-!7=Ks. These are total
seven in number and they pack 5%4 packs per minute.
(fter the cigarettes are packed in packets they are than
send to the percales that packs them in shape of outers.
P A K I S T A N T O B A C C O
C O M P A N Y
BB@
Chapter 7 Findings and
Recommendations
The outers thence prepared are packed into "'"s. They
are then taped and air tightened and sent to the shipping
godown.
P A K I S T A N T O B A C C O
C O M P A N Y
BDC
Chapter 7 Findings and
Recommendations
3.4 /astages
0astages are an integral part of the manufacturing
process. It is rather impossible to even risk of a perfect
manufacturing process free of wastages. 'ut what is
possible is to make sure that the amount of wastages shall
be reduced to the minimum possible )uantity.
In the manufacturing process the wastages can occur in
two forms.
0astages of tobacco
0astages of wrapping material
In tobacco is wasted in the form of dust or the blended
mixture of stem and lamina. The dust is disposed off or
sold and where as the stem and lamina is again put into the
!MD process. The wastages of the wrapping material are
the most common and fre)uent form of wastage occurring
in the ,MD. ,ince these wastages cannot be put into
process again therefore+ it is necessary to identify them in
time and reduce the volume of these wastages.
3.4.1 "dentification of 5astages
In order to explain this topic fully it is important to
understand some technical terms.
3.4.2 Perfect re6uired
It is that )uantity of material used+ which is derived or
calculated not heretically. ,uppose we say that I tear off
noon is used to make # pack of #4 cigarettes. ,o how may
tear off ribbon will be re)uired to make #444 cigarettes.
3.4.3 Standard 6uality
P A K I S T A N T O B A C C O
C O M P A N Y
BDB
Chapter 7 Findings and
Recommendations
In ,tandard )uality we take into consideration the normal
amount of wastages+ which are bound to take place as a
matter of normal routine. ,uch wastages are subtracted
from the perfect )uantity in order to get the standard
)uantity.
3.4.4 $ctual used
It is the actual amount of wastage that has occurred in the
production.
3.4. Calculation of 5astages
In order to calculate wastages the following procedure is
used in the ,MD.
*pening 'alance
(dd C >eceipts
7ess C
The difference between this net usage and standard
)uantity gives us the wastages. If the amount of wastage is
less than the standard )uantity it shows that the process is
working efficiently. 'ut if the amount of wastages is greater
than the standard )uantity it means that there is some
problem in the manufacturing process.
3.7 8(M Statement
P A K I S T A N T O B A C C O
C O M P A N Y
BDD
Chapter 7 Findings and
Recommendations
'*M stands from 'ill of Material. It is a statement+ which
shows the perfect re)uirement+ the standard )uantity and
the percentage of wastages of each item used in the
manufacturing process other than tobacco.
The '*M statement has three items
#. The Description
5. The -nit
@. The Guality
The description shows the name of material+ the unit
shows that which unit is used for the item+ where as the
)uality shows the amount of materials. ( specimen of the
'*M statement is shown belowC
Ta9le 3.1
Description -nit ,td ,crap B !erfect
=mboss ?ilter Million #444 4 #444
=mbassy ,hells Million #4#.##5 #.#4 #44.444
=mbassy slides Million #45.@45 5.5A #44.44
=nd 7abels Million E.@@@ % E.444
!!! "7 >ed @4A x #5A4 >ed #.5%4 %.A4 #.#E%
/,ourceC Guality "ontrol ,ection1
The '*M accuracy is calculated by the following formula.
'*M (ccuracy B L
3." Qualit #ssura!ce Depart$e!t
T. 1oal of v!y /usinss is to a!n ma>imum p!ofit t.!ou1. t. satisfa3tion of t.
3onsum!s; <uality of t. p!o0u3t is t. fo!most 3onsi0!ation fo! t. 3onsum!
satisfa3tion; <uality as 0fin0 in ISO D E@-,9 is Mt. totality of 3.a!a3t!isti3s of an ntity
t.at /a!s its a/ility to satisfy stat0 an0 impli0 n0s;L
P A K I S T A N T O B A C C O
C O M P A N Y
BDE
Chapter 7 Findings and
Recommendations
<uality Cont!ol involvs masu!mnt an0 >amination of t. n0 p!o0u3ts to fin0 out its
2uality an0 imp!ov it /fo! it !a3.s to t. 3ustom!;
<uality Assu!an3 $pa!tmnt of PTC not only assu!s t. /st 2uality of 3i1a!tts /ut it
3!ats a /as fo! t. implmntation of Total <uality Mana1mnt HT<MI at all lvls;
E.BC Hualit% (olic% 9f (akistan Tobacco )ompan%
T. p!im mp.asis of 2uality poli3y of PTC is to ma8 2uality a :ay of lif in all a!as of
op!ations fo! full 3ustom! satisfa3tion9 /!an0 loyalty an0 implmntation of Total <uality
Mana1mnt HT<MI 3i!3ls; T. poli3y .as /n fo!mulat0 :it. .i1.ly p!ofssional
3omptn3 :.il 8pin1 all asp3ts of o!1ani6ation an0 mo0!n t!n0s in min0; T.
2uality of nvi!onmnt an0 ISO D *--- is /in1 t. fo3us of t. <uality Poli3y;
3.%&.% '(L)C*
<uality >3l-ln3 is t. foun0ation fo! t. mana1mnt of ou! /usinss an0
a keystone of our goal of customer satisfaction. It is
therefore our !olicy toC
Consistntly p!ovi0 p!o0u3ts an0 s!vi3s t.at mt t. 2uality E>p3tation of ou!
3ustom!s;
A3tivly pu!su v!Dimp!ovin1 2uality t.!ou1. p!o1!ams t.at na/ls a3. mploy
to 0o .is o! .! =o/ Ri1.t t. fi!st tim;
3.10.2 Total Quality M a n a g e m e n t
BEST ,--- D a Total <uality Mana1mnt P!o1!amm is t. most Am/itious C.an1
Mana1mnt P!o1!amm v! initiat0 /y ou! 3ompany; Total <uality is mo! t.an =ust
P!o0u3t <uality? it is 2uality of v!yt.in1 : 0o in ou! Businss; It mans un0!stan0in1
ou! Consum!s9 Custom!s9 Sta8.ol0!s an0 Suppli!s9 a1!in1 :it. t.m :.at t.y :ant
an0 mpo:!in1 ou! mploys to o!1ani6 t.i! o:n :o!8 to 0liv! t. R2ui!0 P!o0u3ts
an0 S!vi3s to t. a1!0 p!fo!man3 lvls;
BEST ,--)
HBuil0in1 E>3lln3 an0 Su33ss To1t.!I
Bst ,--- is s!vin1 as t. fun0amntal /uil0in1 /lo38 in 0i!3tin1 3ompany En!1is to
a3.iv ou! Mission Statmnt
MTo1t.! : :ill / t. /st in v!yt.in1 : 0o;L
!ince its launch in B@@4. B!T is helping us impro&e compan% team building. is pro&iding
means to continuousl% impro&e and break the &icious )%cles. which inhibit impro&ement
acti&ities and is assisting emplo%ees to (articipate in dri&ing the compan% forward.
P A K I S T A N T O B A C C O
C O M P A N Y
BDF
Chapter 7 Findings and
Recommendations
M$T.!"$L M$*$).M.*T D.P$!TM.*T
(!)$*()!$M
? a c t o r y M a t e r i a l
M a n a g e r
" o m m e r c i a l * f f i c e r
* f f i c e , u p e r v i s o r
, e n i o r * f f i c e
( s s i s t a n t
( s s i s t a n t
" o m m e r c i a l * f f i c e r
" o m m e r c i a l
* f f i c e r
9 u n i o r * f f i c e
( s s i s t a n t
, e n i o r * f f i c e
( s s i s t a n t
3 e a d , u p e r v i s o r
/,ourceC Database MMD1 ?igure @.A
P A K I S T A N T O B A C C O
C O M P A N Y
BD2
Chapter 7 Findings and
Recommendations
3.11 Material Management Department
The Material management department deals with all the
incoming and outgoing material. The materials of to all the
departments are issued through MMD. It purchases both
the local and imported materials on behalf of the head
office. It controls the inventory of manufacturing and
marketing in terms of specification as well as )uality. This
department uses the ?I?* /first in first out1 method for
inventory disposition. The MMD has been divided into
three stores.
#. 'oiling Material ,tore /'M,1
5. 0rapping Material ,tore /0M,1
@. ,hipping Material ,tore /,M,1
3.11.1 8oiling Material Store
This store mainly deals with the raw materials. The leaf and
stem produced in the forms has to be packed in order to
send in to :7T and from :7T to !MD. This packing material
is issued by 'M, called "'"8s. These packing containers
are imported from 'razil and the 'M, store ensure that
cash "'" is sued % to A times in order to overcome its cost
after which they are auctioned. It is also responsible for the
auctioning of scrap material.
3.11.2 /rapping Material Store
The department arranges all kinds of wrapping material
used in the manufacturing process. The wrapping
materials include both imported and local items+ which areC

P A K I S T A N T O B A C C O
C O M P A N Y
BD3
Chapter 7 Findings and
Recommendations
3.11.2 "mported "tems
"igarette !aper
Tipping !aper
Tear off >ibbon
:um or (dhesive
!lug >ap
(cetate Tow
3.11.2 Local "tems
,hells
?lats
(luminum foil
,lides
>eels
There are two types of godown with this store is the
custom boarded godown and the other is noncustom
boarded godown. The arrivals in this department are dually
:> sheeted which means that the correct amount of
inventory in stores is on record.
3.11.3 Shipping Material Store:
(ll the finished goods are brought to this store from here
the goods are dispatched to the market on demand it pays
duties and other government levies on #% day deferred
payment scheme. This store is also called excise bonded
warehouse.
P A K I S T A N T O B A C C O
C O M P A N Y
BD4
Chapter 7 Findings and
Recommendations
5;), En1in!in1 $pa!tmnt
=ngineering Department is concerned with all the
=ngineering items used in the factory.
T. En1in!in1 0pa!tmnt is .a00 /y FPSM HFa3to!y P!o0u3tion & S!vi3s Mana1!I;
It p!ovi0s En1in!in1 s!vi3s in t. follo:in1 a!as(
)+ Boil! &ous;
,+ El3t!i3al si0;
5+ Ai! 3on0itionin1;
@+ %.i3ls;
B+ En1in!in1 sto!;
C+ 'at! pumps;
A+ Tlp.ons;
E+ #n!ato!s;
*+ Comp!sso!s
,ome of the above itemsJservices are provided by the
company8s own employees while others through the
contractors registered with the company. The purchase of
the =ngineering itemsJservices is the responsibility of the
=ngineering Department. ( purchase up to >s.5A444 is
recorded in the !etty 9ob 'ook.
Fo! a =o/ !an1in1 f!om Rs;,B9 --- to Rs;B-9 --- a !3ipt #n+B- is p!pa!0; An0 fo! a/ov
B-9--- 1n+BC an0 a1!mnt on a stamp pap! is p!pa!0; A !3ipt+ #n+E) must /
atta3.0 :it. a3. =o/; Fo! a =o/ up to Rs;,B9 --- only #n+E) is p!pa!0; T. Ma3.in
spa!s a! !3iv0 it.! f!om SPM 7a.o!9 4.lum Fa3to!y o! suppli!s; Fi>0 Assts a!
suppli0 only t.!ou1. SPM9 7a.o! a33o!0in1 to t. in0nt R3iv0 f!om t. 3on3!n0
$pa!tmnt;
The following documents are prepared when an item is
being purchasedC ,"= /,anction for "apital =xpenditure1C
0hen some "apital item is involved. ,>= /,anction for
>evenue =xpenditure1C 0hen >evenue items are involved.
@.#@ =ngineering ,tore
En1in!in1 sto! 0als only in n1in!in1 itms; In t.is sto!9 t.! a! )A9--- itms an0
a3. itm .as a sp3ifi0 lo3ation :.! it 3an / asily availa/l;
P A K I S T A N T O B A C C O
C O M P A N Y
BD1
Chapter 7 Findings and
Recommendations
En1in!in1 itmsJspa! pa!ts .av /n 0ivi00 into t.! 3at1o!is(
)+ 7o3al itms;
,+ Fo!i1nJimpo!t0 itms;
5+ P!opitiato!y itms;
Spa! pa!ts a! su/+3at1o!i60 on t. /asis of t.i! 3onsumption(
iI Fast;
ii1 >egular.
iiiI M0ium;
ivI Slo:
vI $a0;
viI N:;
T. En1in!in1 sto! !mains opn f!om A(-- a;m; to @(-- p;m; A !0 sal is put at t. 0oo!
at t. tim of 3losin1; If a 0pa!tmnt in t. fa3to!y9 aft! sto! .ou!s n0 som itm9 t.
la0! of t. tam n0in1 su3. itm 3oms alon1 :it. a s3u!ity 1ua!0 an0 a :o!8! o!
som sup!viso!9 opns t. sto! an0 ma8s nt!y in t. Ni1.t Opnin1 R1ist!; '.il
lavin1 t. sto!9 . s.oul0 put t. :.it sal9 so t.at t. in3.a!1 of t. En1in!in1 Sto!
may 8no: t.at su3. an0 su3. p!son of su3. an0 su3. 0pa!tmnt .a0 opn0 t. sto! an0
.as ta8n su3. an0 su3. itm;
E.BE.B 9il !tore
It is a pa!t of t. En1in!in1 Sto!; In t.is sto!9 t. oil us0 /y t. 3ompany v.i3ls is
sto!0; T. oil fo! us is issu0 on 0aily /asis Hf!om *(-- a;m; to )-(-- a;m;I; Aft! o! /fo!
t.is tim9 it 3an / issu0 only in >3ptional 3ass;
E.BE.D 8eceipt of Items
'.n f!s. n1in!in1 itms a! suppli0 to t. fa3to!y9 a B;S;O9 in t. En1in!in1 sto!
!3ivs t.m; A #oo0s R3iv0 S.t H#;R;S.tI fo! su3. itms is p!pa!0; On 3opy of
t. #;R; S.t is .an00 ov! to t. p!son :.o passs t. /ill an0 on 3opy to t. B;S;O;
fo! sto! !3o!0;
E.BF Issuance of items
T. p!op! 3omput! !3o!0 of t. itms in t. sto! is maintain0; '.n !2uisition fo!
som itms is !3iv0; Fi!st off all9 t. B;S;O; 3.38s t. !3o!0 of t.at itm :it. t. .lp of
3omput!; If t. !2ui!0 itms a! availa/l at sto389 t.n . issus t. !2ui!0 itms an0
t.n fils t. 3opy of t. !2uisition an0 t. 3omput! 1n!at0 p!intout;
E.B2 !tock checking
The account office+ from time to time+ sends a list of items
to the =ngineering ,tore. The items specified in the list are
counted by a ',* of the =ngineering ,tore with the help of
P A K I S T A N T O B A C C O
C O M P A N Y
BD@
Chapter 7 Findings and
Recommendations
a specified team8s member of the ,MD. If any difference is
found is reported to the ?inance office along with a
description.
E.B3 !tock Adjustment
Somtims t.! may / a mista8 /y t. sto! .an0 :.il issuin1 an itm; Fo! >ampl9
!3iv0 a !2uisition fo! itm K9 at t. tim of issu t. sto! .an0 /!in1s on itm N insta0
of itm K an0 .an0s ov! it to t. !2uisition .ol0!; In t.is 3as9 as p! 3omput! !3o!09
on num/! of itms K is issu0 :.il a3tually itm N :as issu0; So9 /3aus of on mista8
t:o 0is3!pan3is o33u!!0; T.at is9 itm K is su!plus /y ) :.il itm N s.o!t /y ); In su3.
3ass9 a sto38 a0=ustmnt P!fo!ma is snt to Finan3 $pa!tmnt t.at s.o:s t. a3tual
positions of t. sto38 of t.is itm an0 t.us9 t. sto38 is a0=ust0;
E.B4 Binning
All t. #;R; S.t0 itms a! pla30 at t.i! p!op! positions H/insI sp3ifi0 fo! a3. itm;
T. p!o3ss of 8pin1 itms in t.i! sp3ifi0 /ins is 3all0 /innin1; T.! a! )A--- /ins in
t. n1in!in1 sto!; T. pla3mnt of itms in t.i! p!op! /ins is a 0iffi3ult >!3is;
T.!fo!9 t. p!son !sponsi/l fo! /innin1 must / an >p!in30 p!son;
E.B1 8unning "og
>unning 7og of >eceipts and Transfers is printed at the
end of the day or early in the morning on the following day
which shows the "" .noI !T noI >eceipt )uantity and 'in
number of the items. >unning logs of current and one
previous year are kept for record purpose.
P A K I S T A N T O B A C C O
C O M P A N Y
BEC
Chapter 7 Findings and
Recommendations
;1M$* !.S(1!C. (!)$*()!$M
P A K I S T A N T O B A C C O
C O M P A N Y
BEB
Chapter 7 Findings and
Recommendations
3 > M a n a g e r
( s s i s t a n t 3 >
M a n a g e r
( s s i s t a n t 3 >
M a n a g e r
( s s i s t a n t 3 >
M a n a g e r 7 e a f H : 7 T
3 > 7 e g a l ( f f i a r s
3 > 0 e l f a r e
* f f i c e r
3 > ( d m i n * f f i c e r
- n i o n s e d
= m p l o y e e s
- n i o n s e d
= m p l o y e e
- n i o n s e d
= m p l o y e e
*!ource/ :atabase ;8:+ 6igure E.3
P A K I S T A N T O B A C C O
C O M P A N Y
BED
Chapter 7 Findings and
Recommendations
5;)* &uman Rsou!3 $pa!tmnt
;uman resource department is mainl% concerned with the management of ;uman resource in
the organi0ation. The main functions of ;8: are to resol&e the workers grie&ances and care
of disciplinar% procedures. misconduct. faults and omissions. Industrial and )ommercial
stablishment standing order G B@31 and Industrial 8elations 9rdinance B@3@.
At Akkora 5hattak 6actor% ;uman 8esource Manager Mr. Arif Bilal heads the ;8
:epartment. ;e has two Assistants ManagersI one for "egal matters and one for
Administrati&e.
3.2< /hy ;!M "s *eeded=
The philosoph% behind the concept of ;8M is to utili0e the abilities of workers to their
ma<imum beneficial le&el so that efficienc% of working is increased without additional
workers to share the e<penses. More efficienc% with less manpower is the goal of ;8M.
@.5# (reas "overed 'y 3uman >esource Department
/(.?1
;8: co&ers the following areas in terms of functional responsibilities.
Maintainin1 In0ust!ial Rlations;
Kpin1 t. s!vi3 !3o!0 of :o!8!s;
A0minist!ation of t. :o!8!s sala!is;
O!1ani6ation of t. :o!8!s fa3ilitis ;1;9 T!anspo!t Cantn an0 E9 & & S fa3ilitis
t3;
P!omotional an0 ot.! 0vlopmntal a3tivitis fo! :o!8!s;
Manpo:! Plannin1;
R3!uitmnt of n: :o!8!s9 :.n !2ui!0;
Implmntation of 7a/o! la:s;
$alin1 :it. CBA;
Maintainin1 t. !3o!0 of /u01ta!y >pnss;
All t. manpo:! of t. 3ompany H>3pt mana1mntI 3oms un0! &R$;
3.22 Classification of /or%ers
The workers emplo%ed in (T) Akkora 5hattak 6actor% and "eaf areas are classified into two categories/
P!mannt o! non+ sasonal :o!8!s;
Tmpo!a!y o! sasonal :o!8!s;
3.22.1 Permanent /or%ers
P A K I S T A N T O B A C C O
C O M P A N Y
BEE
Chapter 7 Findings and
Recommendations
(ermanent workers are hired b% ;8:. The factor% on permanent basis directl% emplo%s them. Therefore. the% are required
to meet all the requirements that the compan% has established for a worker.
N: :o!8!s :.n .i!0 a! p!op!ly t!ain0 an0 3losly :at3.0 at :o!8 0u!in1 t. a!ly
p!io0 of t.i! =o/;
5;,,;, Tmpo!a!y 'o!8!s
T. tmpo!a!y :o!8!s a! .i!0 /y &R$ as sasonal :o!8!s; T.y a! on t. =o/ fo! si>
mont.s in a ya! i;; f!om 4uly to $3m/!; At 0pots t.y a! .i!0 fo! /uyin1 to/a33o an0
0oin1 ot.! =o/s in t. 7af a!as; At fa3to!y t.y a! .i!0 no!mally fo! #7T s!vi3s;
If a temporary worker works for the whole season+ he gets
the benefit of special bonus. If he remains absent for #4
consecutive days+ another worker for the rest of the
season replaces him. If a seasonal worker remains absent
for three consecutive seasons+ his license is cancelled.
The wage level and terms and conditions for the temporary
workers are nearly the same as that of permanent workers.
5;,5 Rol of 7a/ou! "nion in t. Fa3to!y
T.! a! t.! 7a/o! f0!ations at AKF; T.s a!(
Muta.i00a Ma60oo! "nion;
Pa8To/a3 Ma60oo! "nion;
Pa8 7a/o! "nion;
El3tions of "nions a! .l0 aft! t:o ya!s to 0t!min t. aut.o!ity of a union to .ol0
tal8s :it. t. Mana1mnt; T. l3t0 ma=o!ity >tn0s a Coll3tiv Ba!1ainin1 A1nt
HCBAI as a !p!sntativ to &R $pa!tmnt; If t. CBA is snsi/l9 it 3an p!ov v!y usful
in maintainin1 a 1oo0 nvi!onmnt in t. fa3to!y; Fo! 7af a!a a spa!at CBA is l3t0
f!om t. :o!8!s union an0 Ka!8un union;
3.23.1 Biennial greement
T&E CBA an0 Mana1mnt si1n a1!mnt !1a!0in1 t. :o!8in1 3on0itions9 :a1s an0
ot.! affai!s of t. :o!8!s; T. a1!mnt !mains vali0 fo! ,B mont.s; Aft! ,B mont.s a
n: a1!mnt is si1n0;
E.DF (olicies of ;8: I (akistan Tobacco )ompan% *A56+
P A K I S T A N T O B A C C O
C O M P A N Y
BEF
Chapter 7 Findings and
Recommendations
3.24.1 ;iring Policy
In (T) Akkora 5hattak 6actor%. there are E3 grades. 9ut of these E3 grades. grade B to BC includes general workers to
senior super&isors and clerks. 6rom EC to EE includes B!9,s *Business !upport 9fficers+ and from EF to E3. M9M,s
*Members 9f Management+.
T. &R $pa!tmnt of AKF is 3on3!n0 :it. t. .i!in1 of only t.os mploys :.o fall
into t. 3at1o!y of 1!a0 ) to )-; T. minimum 2ualifi3ation t.at is !2ui!0 fo! a
p!mannt mploy is Mt!i3 plus P.ysi3al suita/ility;
3.24.2 Promotion Policy
The employees having a good performance can be
promoted to the next higher post. There are two bases for
promotion in !T" the suitability and ,eniority. ,uitability
means the suitability of the person in terms of his
performance on the job and seniority means the time he
has passed in !T".
T.! a! 3!tain =o/s to :.i3. li1i/l p!sons a! 0i!3tly p!omot0 an0 0o not !2ui!
any fu!t.! t!ainin1; But 3!tain =o/s !2ui! sp3ial t!ainin1 fo! a pa!ti3ula! p!io0; So9
:.n a p!son is to / p!omot0 to t.s =o/s t.y a! p!ovi00 :it. sp3ifi0 t!ainin1;
@.5%.@ >etirement !olicy
There is a limit on the indi&idual,s life for doing job. No indi&idual can work throughout his life. Therefore. e&er%
organisation has kept an age limit for the
In0ivi0uals =o/; '.n . !a3.s t.at limit . must / !ti!0; In PTC9 t. a1 of
3ompulso!y Rti!mnt is BE ya!s fo! :o!8!s an0 mana1!s; Fi!st >tnsion is 1ivn at t.
a1 of BB ya!s9 s3on0 at BC9 t. t.i!0 at BA D su/=3t to .is p!fo!man3 an0 m0i3al
fitnss;
@.5%.% >etirement on Medical :rounds
If a p!son /3oms 0isa/l to p!fo!m .is =o/9 . !2usts t. 3ompany to !f! .im to t.
M0i3al Boa!0; T. M0i3al Boa!0 >amins t. :o!8! t.o!ou1.ly an0 sn0s .is m0i3al
!po!t to PTC; If t. !po!t !vals t.at . is !ally una/l to p!fo!m .is =o/9 t.n . is
1ivn !ti!mnt on M0i3al #!oun0s an0 is p!ovi00 all t. /nfits as in 3as of o!0ina!y
!ti!mnt;
3.2!." #oluntary $eparation $cheme
(T) has a scheme of &oluntar% separation. >nder this scheme. the permanent emplo%ees are pro&ided the opportunit% to
get earl% retirement. The person getting earl% retirement is paid some percentage of his salar% plus pro&ident fund. The
percentage of salar% to be paid to them depends upon the %ears remaining to his retirement. The percentage applicable is
gi&en bellow/
P A K I S T A N T O B A C C O
C O M P A N Y
BE2
Chapter 7 Findings and
Recommendations
>p to 2 %ears 42 J
3 to 1 %ears FC J
@ to BC %ears E3 J
BB to B2 %ears D2 J
B3 to DC %ears B1 J
DB to D2 %ears B2 J
D3 to EC %ears BE J
P A K I S T A N T O B A C C O
C O M P A N Y
BE3
Chapter 7 Findings and
Recommendations
Finan3 $pa!tmnt+++AKF
*!ource/ :atabase 6inance :epartment+ 6igure E.4
P A K I S T A N T O B A C C O
C O M P A N Y
BE4
?actory ?inancial ,ervices
Manager
Cost
#ccou!ta
!t
Payroll, Cash,
Variable Cost,
Cost
#ccou!ta
!t
Book Keeping,
Production
Lea+
#ccou!t
8S(
Crop Cost
BSO
Payroll
8S(
Variable
Cost,
Excise
8S(
Bank
Payment
Scheme
8S(
Ledger & ixed
!ssets
8S(
Production
Expenses
Chapter 7 Findings and
Recommendations
3.2" F%&&C' (')RTM'&T
5;,C 7af S3tion
The function of the finance department is to provide financial services to all
the departments of the factory. ,ection in the ?inance
department dealing with the financial matters of the 7eaf
department is the 7eaf ,ection.
T. laf s3tion p!ovi0s t.! main s!vi3s to t. 7af 0pa!tmnt(
)+ T!asu!y fun3tions;
,+ 7af Bu01tin1;
5+ C!op Costin1;
3.2,.2 The Lea+ -ui!g 'a$e!t
Sste$
7eaf constitutes the basic ingredient in the "igarette
manufacturing. It is an agricultural product and can be
bought once a year. Therefore+ great care must be taken to
purchase the right type of tobacco and at the right price.
3.2-.3 8uying Procedure
The 7eaf is bought from growers at the 7eaf depots. The
growers are issued contracts at the start of the year+ which
specify the )uantity of each grade of 7eaf to be purchased
from the contracting grower and the dates at which he has
to bring this 7eaf. (t the date specified+ the grower brings
his 7eaf bales and presents his contract. ;ow which price
is to be assigned to it. The minimum rate to be paid is
given by the
!T' /!akistan Tobacco 'oard1 while the maximum by the
7eaf Department of (.?. 7eaf 'uying Manager of the Depot
determines the exact rate on the spot through physical
P A K I S T A N T O B A C C O
C O M P A N Y
BE1
Chapter 7 Findings and
Recommendations
inspection according to the grade and )uantity of the 7eaf.
(fter the price has been assessed+ the specifications and
price of each bale is written on a 7D&@ form+ through
which the total amount payable is calculated. The form is
prepared in triplicate. The distribution of 7D&@ is as underC
(ccounts /yellow copy1
!T' /:reen copy1
:rower /pink copy1
2oucher book /white copy1
The payment is made usually after & to @4 days of sale on
presenting the pink copy at the nearest bank branch.
3.24 The Payment System
The government of !akistan has deputed a special type of
?inance facility to the !T"+ which is called D!72 /Deferred
!urchase 7eaf 2oucher1. (ccording to this system+ the total
amount of financing available is negotiated with the ,tate
'ank on yearly basis depending upon the projected sales
and hence the 7eaf purchases. This facility is then
distributed to three banks. The current distribution is as
followsC
3abib 'ank 7imited 544 million
;ational 'ank of !akistan #A4 million
Muslim "ommercial 'ank #A4 million
(ccording to D!72 system+ the banks make payments to
the growers although the company does not already have
any amount in that 'ank (ccount. This facility to the
company is available from start of the season till @4
th
of
P A K I S T A N T O B A C C O
C O M P A N Y
BE@
Chapter 7 Findings and
Recommendations
,eptember. The payment on this facility is due on @4
th
of
March. (ny payment on 7eaf purchases after @4
th
,eptember is to be made through a credit account /'
account1.
The ?inance Department also keeps the record of the 7eaf
!urchases and !ayments. Two ?orms are used concerning
the payment of 7eaf !urchase.
3.24.1 The Payment Procedure
0hen the purchase is complete+ the )uantity and amount
from the 0hite ?orms are entered into the computer. The
computer generates three copies of ?orm(+ which
contains the grower8s identity+ amount and the date of
payment. The ?inance Department retains one copy and
two copies are sent to the Depot+ which+ after signing+
sends one copy to the 'ank.
The grower presents his pink copy of the 7D&@ ?orm to
the bank. The 'ank after tallying the information on the
?orm( and 7D&@ makes payment to the grower.
5;,E 7af Bu01tin1
In the 7eaf ,ection+ budgets are prepared for the followingC
3.27.1 Leaf 8uying 8udget
The buying forecast depends upon the projected sales
given by the Marketing department+ which is then broken
up brand wise and hence+ the )uantity of each variety of
P A K I S T A N T O B A C C O
C O M P A N Y
BFC
Chapter 7 Findings and
Recommendations
tobacco re)uired is determined. The average prices of
different brands of tobacco are determined by taking into
account the previous year8s prices plus the Inflation rate+
which is advised by the 3ead *ffice. The details of )uantity
and grades of tobacco to be purchased are communicated
to the depots. The job of the depot is to ac)uire the
assigned )uantity of the 7eaf at or bellow the average
price.
3.27.2 8uying and )LT .>penses
The 'uying and :7T =xpense budget includes the 'udgets
for the 7eaf Depots. 7eaf Depots expenses forms a major
component of the buying expenses. The basis of these
budgets are usually the last year8s expense adjusted for
inflation according to the figure being advised by the 3*
and varies with the head of expense to which it is applied.
The =xpense budget is first discussed with the 7eaf
Manager and the ?,M7 /?inancial ,ervices Manager 7eaf1
for preliminary approval and then to the 'udget committee
for final approval. (fter this approval+ it is consolidated
with other departments to be presented to the ="'
/=xecutive "ommittee 'oard1. (fter approval from ="'+ it
becomes valid for use.
3.2? 8uying $nd )LT /age 8udget
This budget is based upon two major factorsC
# *7= /*ptimum 7abor =stablishment1.
5 "'( agreement of settlement.
P A K I S T A N T O B A C C O
C O M P A N Y
BFB
Chapter 7 Findings and
Recommendations
The 3uman >esource Department calculates the *7= by
taking into view the desired capacity at which the plant is
to be operated. It also takes into consideration the various
parameters on the basis of which the overall factory
performance will be evaluated. These includesC
# "!M3 /"igarette !er Man 3our1.
5 Million cigarettes per man.
(nother major factor affecting the wage budget is the
settlement agreement between the management and the
"'(. In this agreement+ the nature of division of labor and
the benefits of workforce reduction are decided.
(nother factor that affects the wage budget is the level of
fringe benefits to the workers. This has an effect on the
wage budget and the bottom line of the company.
3.3< Crop Costing
The crop cost has the following major componentsC
# 'uying and :7T =xpenses.
5 'uying and :7T 0ages.
@ 7eaf !urchaseJDield.
% 7eaf !acking Material.
The crop costing procedure starts with budgeting of the
7eaf !urchases based on he marketing projection. The
projections are generally for the next five years.
3.3<.1Crop Costing Procedure
The crop cost procedure starts with the Dield figures given
by the :7T. These figures are an estimate of the :7T !lant
as well as the type of 7eaf being processed. The figure
P A K I S T A N T O B A C C O
C O M P A N Y
BFD

Chapter 7 Findings and
Recommendations
varies from leaf to leaf and within a process as well. The
figure taken for calculation is usually F$ B/ approximately1+
which means that F$B by weight of Tobacco processed is
converted into 7amina. (ll the costs are added together.
The value of stem and byproduct are subtracted from the
abovementioned total. The answer is then divided by the
total 7amina obtained to obtain the total cost per kg of the
leaf purchased. These costs are entered into the computer
and the printout of the details of these costs is sent to the
3*. The 3* enters it into "entral ,tock (verages /",(1 to
update the average cost per kg of different variety of
tobacco available with the company. The tobacco when
issued to the !MD is transferred at the ",( to be used in
the final product costing.
3.31 Leaf De9its to ;ead (ffice
The amount of prized leaf is charged to the 3* through
monthly debit notes. The 3* is debited at the actual
estimated value of the "rop "ost mentioned in the form 7
5&. The 3* is credited at the time it is weighed in !MD. It is
worthwhile to note that the debit was at the estimated value
while the credit at the actual and hence there will be a
difference in books. 'y the end of the year+ a final
adjustment debit note is prepared to update the "entral
,tock (verages.
3.31.1 Custom Duty
P A K I S T A N T O B A C C O
C O M P A N Y
BFE
Chapter 7 Findings and
Recommendations
The "ustom Duty is paid only on the imported materials.
The following are the imported cigarette materials and their
rates of exciseC
*ame of "tem !ate of .>cise Duty
# "igarette !aper @A B
5 Tipping !aper @A B
@ ,wift (dhesivesJ :um #A B
% (luminum ?oil @A B
A !olypropylene @A B
F 2iscose Tear Tape @A B
The imported materials are received at the seaport and are
brought to the bonded godown in the factory with a bill of
entry. 0e call this bond the @"n9ound 8ill of .ntryA.
0hen the materials are issued for use+ the Inbound 'ill of
=ntry is replaced by the M.>B8ound 8ill of .ntryA.
(t receipt of material+ the Inbound 'ill of =ntry is sent to
the ?inance Department. The actual amount of material on
the bill is in form of !ound ,terling. The amount is then
converted into >upees. # B Insurance and # B landing cost
on the materials is calculated and is added to its cost. ;ow+
this is the assessable cost of material. @A B =xcise Duty
and #A B ,ales Tax is calculated on the assessable value
of material.
3.32 Trial 8alance System
The (.?8s ?inance Department prepares a Trial 'alance
every month. The data for Trial balance comes from the
following sourcesC
P A K I S T A N T O B A C C O
C O M P A N Y
BFF
Chapter 7 Findings and
Recommendations
# The (.! ,ystem /(ccounts !ayable1
5 "ashiers data
@ ,tandard entry sheets
% 9ournal entries
A (ccounts "urrent 7edger
F ( 6 (ccount ,wat+ Mansehra+ 'uner+ :ujrat.
9ut of the abo&e si< sources. B K D are punched into the computer dail% while the rest are entered
into the s%stem at the fourth date of each month. The Trial balance data is transferred to the ;9 at
the closing of F
th
date so that at the morning of 2
th
. it ma% be a&ailable in the ;9
)hapter A F
Trend and 8atio Anal%sis
)hapter objecti&es
To stu0y t. finan3ial position of 3ompany
I0ntify t. 3!iti3al a!as
@;) Finan3ial Analysis
6inancial statements are the instrument panel of a business enterprise. The%
constitute a report on managerial performance. attesting to managerial success or
failure and flashing warning signals of impending difficulties. To read these
financial statements. e&er% Ione can easil% understand the position of business
enterprise. It shows financial structure and operating function results. The
financial affairs of a business ma% be interest to a number of stakeholders such as
Management. )reditors. In&estors. (oliticians. >nion 9fficials and -o&t.
agencies. ach of the group has somewhat different needs and accordingl% each
tends to concentrate on particular aspects of a )ompan% financial picture.
P A K I S T A N T O B A C C O
C O M P A N Y
BF2
Chapter 7 Findings and
Recommendations
There are &arious ratios. which pro&ide results to all abo&e parties. A ratio is a
simple mathematical e<pression of the relationship of one item to another. &er%
percentage ma% be &iewed as a ratio that is one number e<pressed as percentage
of another.
6or the calculation of financial anal%sis. data should be collected from reliable
sources.
This section of the report includes anal%sis based on trend of last fi&eI%ear data.


Pa8istan To/a33o Company 7imit0 Ta/l @;)
Balance !heet 8egular *8s. In CCCs+
)ommon !i0e *J+
DCCB DCCC B@@@ B@@1 DCCB DCCC B@@@ B@@1
Current
asset
s
Cas. & E2uivalnt C*-C5 *BBAB C),5@ 55*CB );-, );C* );)C -;AB
T!a0 0/ts @EA)- ))A)A *)-B5 ),,)- -;A, -;,) );A, -;,A
7oans & A0van3s 5,A,B 5B-5* )C-C- ,)*CC -;@E -;C, -;5- -;@E
P!paymnts &
ot.! !3iva/ls
)@@5C5 5@@,), ,BB,*, 5-@B,E ,;)@ C;-* @;E5 C;C*
Sto38 55,,AB5 ,B*)A5) ,EAB,-A ,B-EA@E @*;)A @B;E5 B@;5* BB;))
Sto!s & spa!s )@-E)5 )@-*-* )A,BE5 )EE*C) ,;-E ,;@* 5;,C @;)B
Total
Curr
ent
$sse
ts
E421FD4 E.DB@.B1E EF4BFD@ EC4CE41 22.3B 23.@D 32.34 34.F2
'i>ed
$sse
ts
Plant & 2uipmnt ,E)B-CE ,@,)-EC )E-B,5C )@CE,-5 @);CC @,;E) 5@;)5 5,;,B
7on1 t!m
invstmnt
B--- B--- B--- B--- -;-A -;-* -;-* -;))
7on1 t!m 0posits
& p!paymnts
,)),E 5)CE CAC, CBCA -;5) -;-C -;)5 -;)@
7on1 T!m loans *5)- C*E@ ),A5 ,)@) -;)@ -;), -;-, -;-B
Ot.! lon1 t!m )@*-AA + + + ,;,) + + +
P A K I S T A N T O B A C C O
C O M P A N Y
BF3
Chapter 7 Findings and
Recommendations
Assts
Total 'i>ed
$sse
ts
D@@@21E DFE3DE1 B1B1D4B BF1B@BB FF.E@ FE.C1 EF.E4 ED.22
Total Assets 3421CBC 2322FDB 2D1@4CC F22DD1@ BCC.CC BCC.CC BCC.CC BCC.CC
Current
Lia9il
ity
C!0ito! A33!u0 &
Ot.! 7ia/ility
,----- @@B--- )@)C-5C *)BAC, ,;*C C;BE ,-;*B )5;BB
Cu!!nt po!tion of
lon1 t!m 0/ts
)A@A))B )-B-B@5 @----- @5CAE, ,B;EB )E;BE A;BC *;B*
S.o!t t!m finan3
& loans
)EC*5-- )A,**EA ,)@*EA- )AEB,B, ,A;CC 5-;B* @-;C@ 5*;,,
Total
curre
nt
lia9ili
ty
E1B3FB2 EDD22EC E@32@C3 EBE44@3 23.F4 24.CE 4F.@4 31.@E
Long term
lia9ili
ty
7on1 t!m loans 5A---- ,),--- @BA--- @),--- B;@A 5;AB E;C@ *;-B
Total
Lia9il
ity
FB13FB2 EFE42EC FFDD@C3 E2F@4@3 3B.@2 3C.41 1E.3B 44.@1
Share
capit
al
Issu09 su/s3!i/0
& pai0 up 3apital
,BB@*5E ,BB@*5E 5)*5CA 5)*5CA 5A;E) @B;)E C;-@ A;-,
Rvnu !s!vs + + B@A@,A CE5),C + + )-;5B )B;-)
"n app!op!iat0
p!ofit & loss
)CCBA H55A-@AI + + -;,B HB;*CI + +
Total
(5n
er
.6uit
y
D24B2@2 DDB41@B 1334@F BCCDF@E E1.C2 E@.DD B3.E@ DD.CC
"iabilit% L 9wner
quit%
3421CBC 2322FDB 2D1@4CC F22DD1@ BCC.CC BCC.CC BCC.CC BCC.CC
HSou!3s( finan3ial statmntI
P A K I S T A N T O B A C C O
C O M P A N Y
BF4
Chapter 7 Findings and
Recommendations
Pa8istan To/a33o Company 7imit0 Ta/l @;,
Balance !heet 8egular *8s. In CCCs+ In0>0
DCCB DCCC B@@@ B@@1 DCCB DCCC B@@@ B@@1
)urrent assets
Cas. &
E2uivalnt
C*-C5 *BBAB C),5@ 55*CB ,-5;@ ,E);@ )E-;5 )--
T!a0 0/ts @EA)- ))A)A *)-B5 ),,)- 5*E;* *B;* A@B;A )--
7oans &
A0van3s
5,A,B 5B-5* )C-C- ,)*CC )@E;* )B*;B A5;) )--
P!paymnts &
ot.! !3iva/ls
)@@5C5 5@@,), ,BB,*, 5-@B,E @A;B ))5 E5;* )--
Sto38 55,,AB5 ,B*)A5) ,EAB,-A ,B-EA@E )5,;B )-5;5 ))@;C- )--
Sto!s & spa!s )@-E)5 )@-*-* )A,BE5 )EE*C) A@;B A@;B *);@ )--
Total )urrent
Assets
E421FD4 E.DB@.B1E EF4BFD@ EC4CE41 BDD.F BCF.@ BBE.EC BCC
6i<ed Assets
Plant &
2uipmnt
,E)B-CE ,@,)-EC )E-B,5C )@CE,-5 )*, )C@ ),5;-* )--
7on1 t!m
invstmnt
B--- B--- B--- B--- )-- )-- )-- )--
7on1 t!m
0posits &
p!paymnts
,)),E 5)CE CAC, CBCA 5,, @E;, )-5 )--
7on1 T!m loans *5)- C*E@ ),A5 ,)@) @5B 5,C;, B*;@* )--
Ot.! lon1 t!m
Assts
)@*-AA + + +
Total 6i<ed Assets D@@@21E DFE3DE1 B1B1D4B BF1B@BB DCD.F B3F.F BDD.4 BCC
Total Assets 3421CBC 2322FDB 2D1@4CC F22DD1@ BF1.2 BDF.D BB3.D BCC
)urrent "iabilit%
C!0ito! A33!u0
& Ot.! 7ia/ility
,----- @@B--- )@)C-5C *)BAC, )*-;E ))B;A )B@;A )--
Cu!!nt po!tion
of lon1 t!m
0/ts
)A@A))B )-B-B@5 @----- @5CAE, @B;E )-);* *);C )--
S.o!t t!m
finan3 & loans
)EC*5-- )A,**EA ,)@*EA- )AEB,B, )-@;E *A ),-;B )--
Total current
liabilit%
E1B3FB2 EDD22EC E@32@C3 EBE44@3 BDB.4 BCD.1 BD3.F BCC
"ong term liabilit% BCC
7on1 t!m loans 5A---- ,),--- @BA--- @),--- E*;* B);B ))) )--
Total "iabilit% FB13FB2 EFE42EC FFDD@C3 E2F@4@3 BB4.@ @3.@ BDF.3 BCC
!hare capital BCC
Issu09
su/s3!i/0 &
pai0 up 3apital
,BB@*5E ,BB@*5E 5)*5CA 5)*5CA E-- )-- )--
Rvnu !s!vs + + B@A@,A CE5),C E-;)5 )--
"n app!op!iat0
p!ofit & loss
)CCBA H55A-@AI + +
Total 9wner
quit%
D24B2@2 DDB41@B 1334@F BCCDF@E D23.2 DDB.DE 13.2 BCC
"iabilit% L 9wner
quit%
3421CBC 2322FDB 2D1@4CC F22DD1@ BF1.2 BDF.DC BB3.D BCC
HSou!3s( finan3ial statmntI
P A K I S T A N T O B A C C O
C O M P A N Y
BF1
Chapter 7 Findings and
Recommendations
PROFIT AN$ 7OSS ACCO"NT Ta/l @;5
IN$EK
DCCB DCCC B@@@ B@@1 DCCB DCCC B@@@ B@@1
Tu!n ov! )*EA*A*B )B*-A-,E )@*5AE@B )@,@*C@@ )5*;B )));C5 )-@;E )--
7ss 3ost of
sal
)AE*C5CC )@@5)*E- )5C@EBC, )5@)@,,, )55;@ )-A;C )-);A )--
-ross (rofit B@1EFD1 BF42CF1 BD1@D1E 1E2FDD DE4.2 B43.3 B2F.E BCC
7ss(
Ma!8tin1
E>p
*E5A@A EA,B,, CE,C@5 B@A@*5 )A*;A )B*;@ ),@;) )--
A0minist!atio
n E>p
5BC5C, ,ECAB, ,C@)*, )*BC,- )E,;, )@C;C )5B;) )--
9perating
(rofit
3FEEDC EB244F EFDFF1 @DEC@ 3@3.@ EFD.B E4C.@ BCC
A00( Ot.!
in3om
CC5, )))B* ))@B* A*5E E5;C @-;C )@@;@ )--
7ss( Ot.!
>pnss
BCC)@ AA)@CA B5C), ),5@, @BE;A C,B-;A @5@;@ )--
7ss(
Finan3ial
3.a!1s
,@))B) @-*5B@ @)--,E 5C*,@* CB;5 ))-;* )));-@ )--
P!ofit 7oss
Bfo!
Ta>ation
5B,)EA HEB5EEEI H)-*A55I H,E)5@@I H),B;AI 5-5;B 5*;-- )--
Ta>ation
Cu!!nt fo!
t. ya!
H)B)AI 5-BEC ,A*CC ,A-)A HB;C)I ))5;, )-5;B )--
(rofit7"oss
After Ta<ation
E2E4CF *11FF4F+ *BE43@@+ *EC1E3B+ *BBF.4+ D13.1E FF.4 BCC
A33umulat0
HlossI /!ou1.t
fo!:a!0
H55A-@AI ++ ++ ++ )-- ++ ++ ++
T!ansf! f!om
!vnu
!s!v
++ B@A@,A )5AC** 5-E5C) ++ )AA;B @@;A )--
"napp!op!iat
0 P!ofitJ 7oss
)CCBA H55A-@AI - - H@;*BI )-- ++ ++
Ca!!i0
Fo!:a!0
++ ++ ++ ++ ++ ++ ++ ++
Ea!nin1sJ7oss
p! s.a!
);5E H)A;@*I H@;,BI H*;CCI H)@;,EI )E);-B @5;** H)--I
HSou!3s( finan3ial statmntI
P A K I S T A N T O B A C C O
C O M P A N Y
BF@
Chapter 7 Findings and
Recommendations
6inancial 8atios Table F.F
"IH>I:IT#
DCCB DCCC B@@@ B@@1 B@@4
Cu!!nt Ratios -;*E );-@ -;EE -;*E );)B
A3i0 Tst H<ui38I -;-5 -;-C -;-@ -;-5 -;-C
Capitali6ation Ratio -;)5 -;-* -;5B -;,* -;,)
"V8A-
$/t to E2uity );C5 );BB B;)- 5;B@ +
$/t to Total Assts -;C, -;C) -;E@ -;AE -;CE
)9V8A-
Int!st Cov!a1 Ratio );@A H,;)CI H-;5@I H-;E@I +
R3iva/l Tu!nov! )5A;A) @C;,) BE;B) @C;A* +
R3iva/l Tu!nov! in 0ays ,;CB A;*- C;,@ A;E- +
Paya/l Tu!nov! 55;)) ,*;, + + +
Paya/l Tu!nov! in 0ays ));C ),;,B + + +
Invnto!y Tu!nov! B;)A B;,E @;@E @;*A B;A
Invnto!y Tu!nov! in 0ays A-;C@ C*;)) E);B) A5;@- C@;--
Total Assts Tu!nov! ,;*@ ,;E) @;5- @;CB ,;*E
Op!atin1 Cy3l A5;5 AA;-) EA;AB E);, +
Cas. Cy3l C,;,@ C@;AB + + +
(896ITABI"IT#
#!oss P!ofit Ma!1in -;-* -;-* -;-E -;-B -;-B
Nt P!ofit Ma!1in -;-, H-;-CI H-;-)I H-;-,I H-;-,I
Op!atin1 P!ofit Ma!1in -;-, -;-, -;-, -;-) -;--)
Rtu!n on Invstmnt -;-B H-;)CI H-;-5I H-;-AI H-;-CI
Rtu!n on E2uity -;)@ H-;@-I H-;)CI H-;5)I -;,-
P A K I S T A N T O B A C C O
C O M P A N Y
B2C
Chapter 7 Findings and
Recommendations
@;, T!n0 Ratio Analysis
@;,;) P!ofita/ility Ratios
(rofitabilit% 8atios allow us to measure the abilit% of a firm to earn an adequate
return on sales. total assets. and in&ested capital it is also helpful for the
controlling of cost in an organi0ation with the help of these ratios. problems
related to profitabilit% can be e<plained. in whole or in parts. b% the firm,s abilit%
to effecti&el% emplo% its resources. (rofitabilit% ratios are important for all parties
that are concerned with that compan% if it is good. compan% will be earning
goodwill and reputation.
#ears DCCB DCCC B@@@ B@@1 B@@4
Gross pro+it
$argi!
*;*AG *;C-G E;C5G B;ECG B;B5G
Operating
profit
margin
,;,5G );*EG ,;5)G -;CBG -;-AG
&et pro*it margin );AEG H,;))IG H-;*)IG H,;)CIG H,;,)IG
8eturn on in&estment B;)G H);*5IG H-;*)IG HC;AAIG C;BEIG
8eturn on equit% )5;ABG H),;A@IG H)B;CCIG H5-;ACIG H,-;@BIG
@;,;) #!oss P!ofit Ma!1in
-ross profit margin reflects the in&entor% managementM cost of goods sold and
pricing strateg% of the firm. (T) impro&ed its -ross (rofit Margin significantl%
P A K I S T A N T O B A C C O
C O M P A N Y
B2B
<.<<C
.<<C
1<.<<C
2<<1 2<<< 1??? 1??7 1??4
)ross Prof it Margin
)ross Prof it Margin
Chapter 7 Findings and
Recommendations
from 2.EEJ to @.@4J in DCCB. which show the better pricing strateg% *:ecrease in
price of -old 6lake and )apstan from 8s. B@ to 8s. @.12+
@;,;) Op!atin1 P!ofit Ma!1in
9perating profit margin indicates the efficienc% of marketing and administrati&e
acti&ities. Though there was a significant increase in the ratio for the last %ear. but
fluctuation since %ear B@@4 I DCCC was not health% for the organi0ation.
Management took some concrete measures. which resulted in present impro&ed
scenario. The measure taken was. down si0ing which brought a significant
impro&ement in terms of operating profit.
@;,;) Nt P!ofit Ma!1in
The net profit margin reflects management efforts at controlling assets. the
markets acceptance of the firm products. the effecti&eness of its marketing and
sales efforts and the firms o&erall reputation. Net profit margin pla%s a &er%
important role in the goodwill and reputation of an% compan%. (T),s Net profit
margin was negati&e from B@@4 to DCCC. But in DCCB management was able to
con&ert losses into net profit due to appropriate pricing policies. issuance of right
shares. correcti&e administrati&e measures and decrease in financial charges.
P A K I S T A N T O B A C C O
C O M P A N Y
B2D
<.<<C 2.<<C 4.<<C
2<<1
2<<<
1???
1??7
1??4
(perating Profit Margin
(perating Profit
Margin
Chapter 7 Findings and
Recommendations
P A K I S T A N T O B A C C O
C O M P A N Y
B2E
Chapter 7 Findings and
Recommendations
@;,;) Rtu!n on Invstmnt
An important test of management abilities is to earn return on in&estment. ?e can
determine the position of the firm assets efficienc% from return on in&estment
ratio. But o&erall position of this ratio is not satisfactor% e<cept %ear DCCB.
@;,;) Rtu!n on E2uity
This ratio reflects the manager efficienc% to utili0e equit% of shareholders
effecti&el%. 89 of (T) suffered from B@@4 to DCCC. &en in B@@1 it touched the
lowest ebb of *EC.43+ J and shareholders loose their confidence. To support (T).
(arent )ompan% purchased ECJ share of the compan% and management
introduced some financial reforms and administrati&e measures. which resulted
positi&e 89 in DCCB.
P A K I S T A N T O B A C C O
C O M P A N Y
B2F
B1<.<<C
B.<<C
<.<<C
.<<C
1<.<<C
2<<12<<<1???1??71??4
!
e
t
u
r
n

o
n
"
n
,
e
s
t
m
e
n
t
!eturn on "n,estment
!eturn on
"n,estment
B2.<C
B2.<<C
B1.<C
B1.<<C
B<.<C
<.<<C
<.<C
1.<<C
1.<C
2.<<C
2<<1 2<<< 1??? 1??7 1??4
*et Profit Margin
*et Profit Margin
Chapter 7 Findings and
Recommendations
@;,;, 7i2ui0ity Ratio
The arrange creditors. although generall% concerned with the firm,s o&erall
financial strength. is speciall% interested in knowing if the firm will be able to
meet its short term financial obligations. The two frequentl% used liquidit% ratios
are the current and quick ratio.
0ear 2<<1 2<<< 1??? 1??7 1??
4
"urrent >atio 4.$E #.4% 4.EE 4.$E #.#
A
Guick >atio 4.4@ 4.4F 4.4% 4.4@ 4.4
F
@;,;, Cu!!nt an0 A3i0 Tst <ui38 Ratio
)urrent ratio shows the firm,s abilit% to pa% current liabilit% and acid test quick
ratio shows abilit% to meet emergenc% pa%ments. Trends of both ratios are not
P A K I S T A N T O B A C C O
C O M P A N Y
B22
B3.<<C
B3<.<<C
B2.<<C
B2<.<<C
B1.<<C
B1<.<<C
B.<<C
<.<<C
.<<C
1<.<<C
1.<<C
2<<12<<<1???1??71??4
!eturn on .6uity
!eturn on .6uity
<
<.2
<.4
<.-
<.7
1
1.2
2<<1 2<<< 1??? 1??7 1??4
Current !atio
Current !atio
Current !atio
Chapter 7 Findings and
Recommendations
satisfactor% which can be due to mal management of A78. A7( and in&entor%
control.
@;,;5 7v!a1 Ratio
"e&erage ratios accomplish two things. first the% are a measure of the e<tent to
which firm is financed through debt. secondl%. the% are indicators of the financial
risk of the firm. this group includes the debt to total assets ratio and debt to equit%
ratio.
0ear 2<<1 2<<< 1??? 1??7 1??4
Debt to
=)uity
#.F@ #.AA A.#4 @.A%
Debt to
(ssets
4.F5 4.F# 4.4% 4.&E 4.FE
@;,;5 $/t to E2uity
;igh debt to equit% ratio shows the confidence of creditors on organi0ation. But
on the other hand high debt also leads high financed le&erage. )ompan%
P A K I S T A N T O B A C C O
C O M P A N Y
B23
<
<.<2
<.<4
<.<-
2<<1 2<<< 1??? 1??7 1??4
Duic% !atio
Duic% !atio
Duic% !atio
<
2
4
-
2<<1 2<<< 1??? 1??7
De9t to .6uity
Chapter 7 Findings and
Recommendations
performance in this ratio is not satisfactor%. because the compan% can enjo% more
debts with financial le&erage due to low interest rate e<it in the econom%.
@;,;5 $/t to Assts
This ratio shows the proportion of assets financed b% the debts. In B@@1 I B@@@.
this ratio was quite health% but it declined in last two %ear. In B@@@ 1FJ of assets
were financed b% debt but now onl% 3DJ in DCCB.?hich also causes less financial
charges appearing in profit loss statement.
@;,;@ Cov!a1 Ratio
0ear 2<<1 2<<< 1??? 1??7 1??4
Interest "overage
>atio
#.%& /5.#F1 /4.@%
1
/4.E%
1

This ratio ser&es as one measure of firm,s abilit% to meet its interest pa%ments.
-enerall%. high ratio means compan% could co&er its interest pa%ments without
difficult%. In DCCB compan% is able to get a positi&e figure. which is health%. a
sign but from B@@4 to DCCC it was negati&e due to losses incurred b% the compan%.
@;,;B A3tivity Ratio
P A K I S T A N T O B A C C O
C O M P A N Y
B24
De9t to $ssets
2<<1
2<<<
1???
1??7
B2.
B2
B1.
B1
B<.
<
<.
1
1.
2<<1 2<<< 1??? 1??7
"nterest Co,erage !atio
"nterest Co,erage !atio
Chapter 7 Findings and
Recommendations
0ear 2<<1 2<<< 1??? 1??7 1??4
!ecei,a9le turno,er #@&.&# %F.5
#
AE.A# %F.&$
!ecei,a9le turno,er in
days
5.FA &.$4 F.5% &.E4
Paya9le turno,er @@.## 5$.5
Paya9le turno,er in days ##.4F #5.5
A

"n,entory turno,er A.#& A.5E %.%E %.$& A.&
"n,entory turno,er in days &4.F% F$.#
#
E#.A# &@.%4 F%
$ssets turno,er 5.$% 5.E# %.@4 %.FA 5.$E
@;,;B; R3iva/l Tu!nov!
The 8T. pro&ides insight into the qualit% of the firm,s recei&able and how
successful the firm is in its collection. The ratio also tells us the number of times
recei&able has been turno&er into cash during the %ear. )ompan% performance in
this area is quite appreciable. In B@@1 A78 was turning into cash just F4 times but
in DCCB it runs to BE1 that is a huge achie&ement of management.
P A K I S T A N T O B A C C O
C O M P A N Y
B21
<
<
1<<
1<
2<<12<<<1???1??7
!ecei,a9le
Turno,er
!ecei,a9le Turno,er
!ecei,a9le
Turno,er
Chapter 7 Findings and
Recommendations
@;,;B R3iva/l tu!nov! in 0ays
8T: shows a&erage collection period. which also show impro&ement from 1
collection da%s to D collection da%s.
@;,;B Paya/l Tu!nov! & Paya/l Tu!nov! in $ays
(a%able turno&er refers to promptness of pa%ments and pa%able turno&er in da%s
shows the number of da% in which pa%ment is made. Anal%sis shows that there is
nothing wrong with these ratios but huge difference between A78 reco&erable
turno&er in da%s and pa%able turno&er in da%s can indicates &er% tight polic%
which can result negati&e result on sale.

P A K I S T A N T O B A C C O
C O M P A N Y
B2@
<

1<
2<<1 2<<< 1??? 1??7
!ecei,a9le
Turno,er in days
!ecei,a9le Turno,er in days
!ecei,a9le Turno,er in
days
2- 27 3< 32 34
2<<1
2<<<
Paya9le Turno,er
Paya9le Turno,er
Chapter 7 Findings and
Recommendations
@;,;B Invnto!y tu!nov! an0 invnto!y tu!nov! in 0ays
In&entor% turno&er determine how effecti&el% the firm is managing in&entor%. its
IT: shows that how man% da%s in a&erage before in&entor% is turned into account
recei&able through sale. Inconsistent. fluctuating and decrease in in&entor%
turno&er and increase in IT: shows insignificant le&el of in&entor%.

P A K I S T A N T O B A C C O
C O M P A N Y
B3C
<
1
2
3
4

-
2<<1 2<<< 1??? 1??7 1??4
"n,entory Turno,er
"n,entory Turno,er
1<
1<.
11
11.
12
12.
2<<1 2<<<
Paya9le Turno,er in days
Paya9le Turno,er
in days
Chapter 7 Findings and
Recommendations
@;,;B Assts tu!nov!
The total assets turno&er is a measure of the firm o&erall effecti&eness in
generating sale. (roportional change in assets is greater than proportional change
in sales. which shows the decrease in assets efficienc% in last few %ears. Assets are
not full% utili0ed that is 2CJ decrease in the ratio in just two %ears. which is
alarming for management.
P A K I S T A N T O B A C C O
C O M P A N Y
B3B
<
1
2
3
4

2<<1 2<<< 1??? 1??7 1??4


$ssets Turno,er
<
1<
2<
3<
4<
<
-<
4<
7<
?<
2<<1 2<<< 1??? 1??7 1??4
"n,entory Turno,er in days
"n,entory Turno,er in days
Chapter 7 Findings and
Recommendations
@;,;C Op!atin1 Cy3l & Cas. Cy3l
0ear 2<<1 2<<< 1??? 1??7 1??4
*perating cycle &@.@ &&.4
#
E&.&A E#.5
"ash cycle F5.5% F%.A
9perating c%cle is the length of time from the commitment of cash for purchase
until the collection of recei&able resulting from sale. 6igure in operating and cash
c%cle here also pro&e the mismanagement in in&entor% A78 and A7(.

.
C;$PT.!+
S/(T $nalysis and $chie,ements in 2<<1
(9Eecti,e
P A K I S T A N T O B A C C O
C O M P A N Y
B3D
-1
-1.
-2
-2.
-3
-3.
-4
-4.
2<<1 2<<<
Cash Cycle
Cash Cycle
-<
4<
7<
?<
2<<1 2<<< 1??? 1??7
(perating Cycle
Chapter 7 Findings and
Recommendations
To analy6 t. st!n1t.9 :a8nss9 oppo!tunity an0 t.!ats of PTC;
To 1lan3 at t. p!fo!man3 of PTC in ,--);
.1 Strengths:
:oodwill
0orking environment
=conomies of scale
(pplication of most modern computer software /CS3F
)$L$G01
3igh remuneration
"ertified by M>!5
Training and development programs
?avorable relationship with union
"S( ?<<<B?<<1 certified
,ubsidiary of '(T+ having $%.FB of its shares.
(mple financial resources provided by '(T for
sustained growth of the business.
'etter technological skills than its competitors.
Market leader.
.2 /ea%ness:
(dvertising polices
Downsizing and retrenchment
3igh conversion cost
Inconsistent profitability
P A K I S T A N T O B A C C O
C O M P A N Y
B3E
Chapter 7 Findings and
Recommendations
7osses from #$$A to 5444.
7ack of government support.
3igh wastage level than other '(T members.
.3 (pportunities:
3igh demand.
(utomation in :7T
=xport of premium brands
;ew Markets /(fghanistan and Iran1
;o fierce competition.
.4 Threats:
"ontroversial product
3igh tax rate
-nfavorable politicaleconomic factor
"ompetition
:ovt. polices
Dependency on nature /tobacco1
:overnment policy to discourage smoking.
0orld health organization.
(nti smoking campaigns.
(s a result of high taxes+ prices are increased as a
result profit decreases.
P A K I S T A N T O B A C C O
C O M P A N Y
B3F
Chapter 7 Findings and
Recommendations
B;B A3.ivmnts ,--)
O/=3tiv( In3!as volum /y B /illion sti38s
Actual/ !ales of D4.B billion sticks. an increase of 2.4 billion sticks. This was
achie&ed despite price increases for the first time in D %ears.
As a result. (T) became the No. B in percentage &olume increase and No. D in
absolute &olume increase in the worldwide group of British American Tobacco
*BAT+.
O/=3tiv( B3om t. C
t.
la!1st BAT 3ompany /as0 on volum;
Actual/ Achie&ed.
O/=3tiv( #n!at a P!ofit aft! Ta> fo! t. fi!st tim in A ya!s;
Actual/ A profit after ta< of 8s. E2F million *N2.@ million+ compared to a loss of
8s. 11F million in DCCC.
O/=3tiv( A3.iv an up:a!0ly !vis0 T!a0in1 P!ofit of FE;- million;
Actual/ A trading profit of 8s. 3FE million I and increase of BCEJ and the
equi&alent of N BC.4 million I which is the highest trading profit in (T),s histor%.
DCCB was the %ear that ga&e the compan% e&er% opportunit% to demonstrate their
guiding principles of 9penImindedness. nterprising !pirit. and !trength from
:i&ersit% and 6reedom through 8esponsibilit%. Throughout the BAT world. (T)
was often mentioned and recogni0ed as a leading compan% for its man% successful
initiati&es.
There are few e<amples. which were the outcomes of (T),s O(assion for
e<cellenceO and a O:are to be differentO attitude throughout the )ompan%.
Based on sound management judgment rather than e<hausti&e research. 4 new
line e<tensions were successfull% introduced during the past B1 months. The%
contributed 4.4 billion sticks or D1.3J of (T),s significantl% enlarged sales in
P A K I S T A N T O B A C C O
C O M P A N Y
B32
Chapter 7 Findings and
Recommendations
DCCB and are testimon% to the fantastic +'nterprising $pirit, and +Freedom
through Responsi-ility, at (T).
?hilst enhancing compan% dominant position in the premium. highIprice
segments *=(-"+. that also grew &olume K &alue share in the midIprice and lowI
price segments. It has been e<tremel% gratif%ing to see that )apstan not onl%
regained &alue leadership but also &olume leadership in the &er% important midI
segment *for the first time in man% %ears+.
In B@@@. -old 6lake and )apstan combined were at B.@ billion sticks and
declining. In DCCB. )apstan achie&ed E.E billion sticks *a growth of BCFJ &ersus
DCCC+ and -old 6lake achie&ed BC.3 billions sticks *a growth of 2@J &ersus
DCCC+. Both brands together achie&ed BE.@ billion sticks.
9ut of the Top 2 brands in (akistan. (T) now has F of the topIselling brands
*compared to pre&iousl% ha&ing onl% D+.
All F (T) brands ha&e been growing in &olume K &alue in DCCB &ersus DCCC. As
a result. (T),s &olume share grew b% 2.F share points to FEJ and &alue share
grew b% 2.3 share points to 2C.2J.
)ompan% o&erall product qualit% across all brands impro&ed significantl%. The
product qualit% for =(-" K )apstan II at a Manufacturing Hualit% Inde< of 1CL II
reached international qualit% standards and the brands are now comparable to
similar products in the world.
The -o&ernment of (akistan G compan%,s major stakeholder II became the
biggest beneficiar% of joint success. (T),s pa%ments in e<cise K sales ta< alone
increased from 8s @.@ billion in DCCC to 8s BD.E billion in DCCB. Increase of 8s
D.F billion or DFJ. will further aid the -o&ernment to implement or sustain
needed social de&elopment K po&ert% reduction programs.
BAT -roup !ecurit% rated (T) a Obenchmark compan%O regarding safet% K
securit% as well as caring for II and communicating with II all stakeholders *i.e.
Valued Business (artners+. :espite &er% different political. religious and tribal
&iews throughout the )ompan%. all (T) colleagues trul% pulled together II all
P A K I S T A N T O B A C C O
C O M P A N Y
B33
Chapter 7 Findings and
Recommendations
le&els and in all locations II and pro&ed that the% ha&e Othe right stuffO. This
speaks &er% well for P9penImindedness, and P!trength from :i&ersit%,.
The financial reward for compan% efforts came in the shape of profits after ta< for
the first time in 4 %ears. This is not an ordinar% achie&ement. The compan% claims
that. together. we ha&e transformed a lossImaking corporation into a profitable
Model )ompan%.
)hapter A 3
!rojects
)hapter objecti&es/
To 3a!!y out t. p!a3ti3al p!o=3t;
To i0ntify t. p!o/lm a!a;
To p!ovi0 .i1. impa3t !3ommn0ations an0 a3tion plan;
P!(H.CT $
-.1 Pro9lem Statement
Manning of piece rate workers in MMD.
C;, P!o=3t O/=3tiv
T. o/=3tiv of t. !po!t is to !0u3 t. num/! of pi3 !at :o!8!s 0oin1 a pa!ti3ula!
=o/ an0 to ma8 su! t.at t. ffi3in3y is also maintain0;
C;5 P!o/lm A!a
A!a un0! 3onsi0!ation is t. 3ont!a3tual mploy :o!8in1 in MM$;
P A K I S T A N T O B A C C O
C O M P A N Y
B34
Chapter 7 Findings and
Recommendations
,.. 'roject #!alsis
It is &er% important that we must put the facts on the ground obser&ed b% us and pro&ided to
us b% the concerned people before reaching to an% conclusion. The comparison between these
facts will not onl% be fa&orable in our anal%sis but shall also determine the irregularities in the
s%stem $if an%'. It is important to mention here that this data has been collected in a &er%
limited time of se&en da%s. Thus an% misleading information must be reconfirmed.
The data collected b% us through obser&ations. the budgeted. and the actual data are shown
below/
Ta9le -.1
BM !T98
Actual Budgeted 9bser&ed
So!tin1 of 'M;
'ast
, So!tin1 of 'M 'ast ) 'M :ast B
Clanin1 of sto! , Clanin1 of s.oo8
s.a0 a!a
) Clanin1 )
Cl!i3al =o/ 5 Cl!8 in s.oo8 s.a0
a!a
, S.oo8 s.a0 a!a ,
Pon O 3lanin1 ) 7oa0in1Junloa0in1 of
t!u38
A Cl!8s 5
BM Sto! , BM Sto! ,
Total
E )5 )5
HSou!3s( Finan3 an0 MM$ $pa!tmntI
P A K I S T A N T O B A C C O
C O M P A N Y
B31
Chapter 7 Findings and
Recommendations
';M STORE
Table 3.D
Actual
Budgeted
9bser&ed
Cl!8 ) S.iftin1 of ' M to 3i1
fa3to!y
)5 Rfillin1 3an /an E
F7 $!iv!s , Cl!8s ) 7oa0in1Junloa0in1
of t!u38s
@
Pon ) Fol8 lift op!ato!s , TCM 0!iv!s ,
On p!ss :ast , "nloa0in1 of t!u38s C Cl!8 )
B :o!8!s fo! issus
p! s.ift
)- "nloa0in1 3l!8 )
7oa0in1Junloa0in1
of t!u38s;
)- 'o!8! :it. 2uality
insp3to!
)
'o!8!s :it. ot.!
3ont!a3to!
,
T.T/
,C ,, )*
HSou!3s( Finan3 an0 MM$ 0pa!tmntI
P A K I S T A N T O B A C C O
C O M P A N Y
B3@
Chapter 7 Findings and
Recommendations
!;I(MNT!/
Table 3.E
Actual Budgeted 9bser&ed
Cl!8 on !3ipt
B
'o!8!s on t!u38s
3
7oa0in1 of t!u38s
BC
Clanin1 of
#o0o:n
B
Clanin1 ) Clanin1 )
F;7 0!iv!s
D
Cl!8 ) Cl!8 )
'o!8! fo! Fo!8
lift!
) Fo! t!ansf! of CBCs )- Pon )
'o!8! fo! loa0in1
of Tu!8s
)- R3ivin1 CBCs
f!om SM$
5
'o!8! fo!
stampin1 an0
!3ipt;
)-
!tamping
Arranging )B)
6" dri&ers
)
,
,
TOTA7
,B )E )A
HSou!3s( Finan3 an0 MM$ 0pa!tmntI
B% looking at the abo&e figures the situation on hand is looking on little bit confusing. It is noted
that e<cept the traffic section there are differences in the actual data. the budgeted statement of the
finance dept and the data which we ha&e collected though our own obser&ations. Thus in order to
reach some solid conclusion we are emphasi0ing on the job process rather than the gi&en data.
P A K I S T A N T O B A C C O
C O M P A N Y
B4C
Chapter 7 Findings and
Recommendations
3.2 Action (lan
The action plan that we have suggested is based totally on
the process of job and we are emphasizing on comparing it
with our observed data. ?or example if there is a job and
the number of workers on that job are six+ so what we want
to do in this project is that what can be the ideal number of
workers that can perform that job+ thus also giving due
importance to efficiency. In this regard we have
recommended three suggestions the details of which are
described below.
C;B;) S.ipmnt
3.2.B 9bser&ation/
In t. s.ipmnt 0pa!tmnt t.! a! t.! :o!8!s !3ivin1 CBCPs f!om SM$ an0 fillin1
t.m on to t. t!ollys; T:o p!sons a! 3a!!yin1 t. t!ollys to t.i! !sp3tiv pla3s;
T.! a! t:o fol8 lift 0!iv!s an0 tn :o!8!s fo! loa0in1 of t. t!u38s9 on 3l!89 on pon9
on p!son fo! t. stampin1 of CBCPs an0 on fo! 3lanin1 pu!poss; T.us t. total num/!s
of :o!8!s in t. 0pa!tmnt a! t:nty+on;
0.".1 lternati1e 1
Ou! fi!st su11stion is !1a!0in1 t. t!ansfo!mation of t. sam :o!8!s; T. num/! of
:o!8!s !3ivin1 finis.0 1oo0s 3an / !0u30 to on /3aus t. inflo: of 1oo0s in t.
s.ipmnt sto! is v!y slo:; T:o :o!8!s 3an mana1 t. t!ollys in t. sto! fo! movin1 t.
CBCPs into t. invnto!y !a38s; T:o fol8 lift 0!iv!s fo! t:o fol8 lift!s9 t.! s.all / on
3l!8 :.o :ill also 0o t. stampin1 on t. CBCPs an0 tn :o!8!s fo! loa0in1 of t. t!u38s9
fiv on a3. t!u389 an0 t.y s.all also / 0oin1 t. =o/ of 3lanin1; T.! is no n0 fo! a
pon in t.is 0pa!tmnt; T.us t. num/! of :o!8!s :ill 3om 0o:n to si>tn;
0.".1 lternati1e 2
In t. s3on0 option : plan to /!in1 mino! 3.an1s in t. p!o3ss to !0u3 t. :o!8!s;
' su11st t.at if t. CBCPs 3omin1 f!om SM$ a! pa380 fu!t.! in la!1 pa38s of
polyt.n t.y 3an asily lift09 pla30 an0 loa00 :it. t. .lp of fol8 lift!s :.i3. :ill .lp
in t. !0u3tion of t. :o!8!s us0 in t. loa0in1s p!o3ss; By a0optin1 t.is p!o30u! t.
num/! of :o!8!s in t. s.ipmnt 0pa!tmnt :ill / as follo:s;
P A K I S T A N T O B A C C O
C O M P A N Y
B4B
Chapter 7 Findings and
Recommendations
T.! p!sons fo! t. pa38in1 of CBCPs9 fou! fol8 lift 0!iv!s fo! fou! fol8 lift!s9 t:o
:o!8!s fo! a!!an1in1 CBCPs in t. t!u38s9 on 3l!8 also 0oin1 t. stampin1 an0 on
p!son fo! 3lanin1; T.us t. total num/! of :o!8!s :ill 3om 0o:n to lvn;
C;B;, BM Sto!
3.2.D 9bser&ation/
In t. BM sto! t.! a! t:o :o!8!s in t. main BM sto!9 fiv :o!8!s in t. 'M :ast
a!a :.o a! also us0 fo! t. loa0in1 of t!u38s; T.! a! t:o :o!8!s in t. s.oo8 s.a0
a!a9 t.! 3l!8s an0 on p!son fo! 3lanin1; T.! 3l!8s a! also t.! in t. BM sto!; In
total t.! a! t.i!tn :o!8!s;
0.".2 lternati1e
Ou! su11stion in t.is !1a!0 is t.at t.! s.oul0 / fou! :o!8!s fo! t. so!tin1 of 'M
:asts an0 t.y s.all also / us0 fo! t. loa0in1 an0 unloa0in1 of t. t!u38s; T.! s.all /
t:o :o!8!s in t. s.oo8 s.a0 a!a an0 t:o fo! 3lanin1 pu!poss; T.! s.all / only t:o
3l!8s on in BM sto! an0 on fo! /ot. t. s.oo8 s.a0 a!a an0 'M :ast a!a; T.us t.
total num/! of :o!8!s :ill 3om 0o:n to tn;
P!(H.CT 8
-.- Pro9lem Statement
$(rocess Mapping of 6inance :epartment.'
P A K I S T A N T O B A C C O
C O M P A N Y
B4D
Chapter 7 Findings and
Recommendations
C;A P!o=3t O/=3tiv
T. o/=3tiv of t.is P!o=3t is to Map Flo: C.a!t of a3. s3tion in Finan3 $pa!tmnt;
C;E P!o/lm A!a
A!a un0! 3onsi0!ation is all s3tion of Finan3 $pa!tmnt;
P A K I S T A N T O B A C C O
C O M P A N Y
B4E
Chapter 7 Findings and
Recommendations
)A!; !)TI9N 6igure 3.B
P A K I S T A N T O B A C C O
C O M P A N Y
B4F
CAS& FROM SA7ES
RE%EN"E(
BA&A'A7P"R
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PES&A'ER
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,=77I;:C
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"(,3 ?>*M
(-"TI*;C
';M 'ASTE
SPARES
OT&ERS
C$S;
(A#MNT T;89>-;
BAN5
PETTY CASH
PAYMENT TO
7EAF #RO'ERS
ISS"ANCE OF
TRANSFER
INSTR"CTION
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B42
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TRIA7 BA7ANCE Fi1u! C;A
C&APTER R A
FIN$IN#S AN$ RECOMMEN$ATIONS
Chapter (9Eecti,es
To criticall% anal%0e the findings during the internship period.
To recommend remedies for the flaws.
4.1 'indings
!akistan Tobacco "ompany limited is a multinational
organization operating in !akistan since #$%&. !T" is a
member of 'ritish (merican Tobacco :roup incorporated
in #$45 at 7ondon. '(T is financially wellestablished
company and '(T does any thing to motivate its members
of its group. =xcept for the last two years i.e. 544# and
5445 !T" suffered losses in the last six years. This is the
evidence of the fact that some thing was really wrong with
system. >egardless of the fact that it is a subsidiary of one
of the giants of the international market '(T+ it still
suffered losses for an amazingly long period. (lthough for
the last couple of years !T" was able to transform losses
into profits still methods need to be taken for long term
profits. ?or this purpose the company needs s to eliminate
P A K I S T A N T O B A C C O
C O M P A N Y
B1C
CAS& SECTION
CROP COSTIN#
%ARIAB7E COST
PAYRO77
PRO$"CTION EKPENSE
ISS"ANCE OF $EBT NOTES
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Chapter 7 Findings and
Recommendations
certain drawbacks from its system. ( few flaws that I could
observe during my brief stay at the company are stated
below
i. The feeding s%stem in -"T department is not automatic and is fed manuall%. which cause
loss of tobacco during transfer.
ii. In -"T department :ust is other problem. which is faced b% workers.
iii. ?ithin (M: workers who ha&e primar% responsibilit% o&er production are e<posed to
health ha0ards.
i&. The )I2 -odown is adjacent to the "88. but the tobacco is not brought in a mechani0ed
fashion but it is loaded and unloaded manuall% which wastes material and is time
consuming.
&. ?hen the machiner% poses ph%sical danger to workers. the accompan%ing warning signs
are not clearl% &isible.
&i. The tobacco is reweighed in the "88. which also cause loss of tobacco.
&ii. ?ithin the !M: the main impediment to production are the machines that are o&er DC
%ears old. These machines ha&e lesser efficienc% and emit greater le&els of sound.
&iii. The temperature le&el in one section of !M: is &er% high. that are not conducti&e to
effecti&e work.
i<. &en after the completion of !M: production it is obser&ed that the machines run idle.
<. 6ans and lights are kept on when there is no bod% inside during lunchtime and =uma
pra%er.
<i. ?orkers waste time at common room.
<ii. Team concept is used at !M:. which is not effecti&e because la0% worker is also gi&en
incenti&es in team and this thing disappoints other members of team.
<iii. "eaf department is ineffecti&e in a sense that it can,t pro&ide seeds to all growers at
different places li&ing.
<i&. The growers should be gi&en some incenti&es for qualit% impro&ement.
<&. The stores are not in good condition.
<&i. ngineering store purchases spare parts through !(M "ahore. which require too much
time.
<&ii. ngineering department does not store spares of important high technolog% machiner%.
which also cause the loss of time and effect production.
<&iii. In ;8: it is obser&ed that relation between Management and workers are not &er% good.
?orkers feels neglected and which cause bitter situation.
<i<. The performance appraisal s%stem of (T) is not satisfactor% as appraisal is done b%
super&isor and that is not discussed with appraise for an% thing that is misunderstood.
<<. The recruitment at (T) for management le&els is done from IBA and ">M! usuall%.
P A K I S T A N T O B A C C O
C O M P A N Y
B1B
Chapter 7 Findings and
Recommendations
<<i. The securit% personnel at the main gate are arrogant and treat &isitors with contempt.
<<ii. !ecurit% personnel with in the organi0ation are unarmed and not equipped to handle
contingencies.
<<iii. ?orkers often tr% to hide an% qualit% fault from qualit% assurance personnel when the%
are not around and the% do production.
<<i&. 6inancial position of (T) was not satisfactor% from last few %ears but this %ear (T)
turned it to profitable organi0ation.
<<&. !ales 9peration (lanning *!9(+ should be made effecti&e so that specific and attainable
targets should be set in !9(.
<<&i. ;ealth and safet% polic% is strictl% narrated to follow in books and posters onl%. not onl%
the workers but the official too in routine work does e&en not adopt the polic%.
<<&ii. )ommunication gap should be o&ercome. for e&er% change in factor% e&er%one should be
informed.
<<&iii. It is obser&ed that leaf is wasted from bu%ing point to factor% -odown due to loose
packing.
<<i<. Training of the emplo%ees is a positi&e step towards making them efficient and.
competent but training should be gi&en to those who ha&e the capacit% of impro&ement
not those who are at the end.
<<<. Most of the workers are illiterate and the% are not able to read sign boards or an%
document.
P A K I S T A N T O B A C C O
C O M P A N Y
B1D
Chapter 7 Findings and
Recommendations
A;, RECOMMEN$ATIONS
i. The feeding s%stem in -"T should be automatic and instead of manuall% feeding so loss
of tobacco can be minimi0ed.
ii. 6or better working en&ironment and condition in -"T area it should be tried to protect
emplo%ees from dust which ma% cause lungs and e%es problems through proper training
and in guidance of n&ironment. ;ealth and safet% polic% b% pro&iding dust masks etc to
e&er% emplo%ee there working.
iii. The workers of (M: should recei&e work safet% training at the hands of management.
Management will guide workers about different precautionar% measures during working.
i&. A con&e%er needs to be built between the )I2 -odown and (M:. This mechanism will
sa&e time. mone% and loss of tobacco during manual transfers.
&. The ele&ation of warning signs need to be reduced to become more &isible and the sign
should be printed also in local languages to become easil% understood b% personnel.
&i. !ome arrangement should be done so that reweighing is not done again and again as this
causes loss of tobacco and when once it,s weighed in )I2 then it should not be weighed
again and again and -odown data should be used again.
&ii. ?ithin !M: old machines should be replaced as the% are lesser efficient in production
and emits greater le&el of sound.
&iii. In !M: as one portion is &er% good in temperature and that portion is &er% cool so it
should be tried to airIcondition the other portion of !M:. this thing will impro&e the
efficienc% and producti&it% of personnel.
i<. Machines should be stopped after completion of production so that it will minimi0e
electricit% e<pense and an% other e<pense associated with break down of machiner% as
machines runs idle an% break down ma% occur which ma% be stopped.
<. ?orkers should be told that the% should turn off lights and machiner% when the% are out
for lunch or =uma pra%ers etc like e&ent.
<i. Management should check out that workers are not wasting time at common room.
<ii. Team concept should not be used at !M: or some method should be used to check
indi&iduals also and point out the la0% workers.
<iii. "eaf department should pro&ide seeds to all growers li&ing at different places b% sending
mobile seeds shops or b% opening offices at far places. !o that e&er% one get benefit from
it.
<i&. -rowers should be pro&ided qualit% seeds at fewer prices. This will encourage grower.
<&. The stores should be co&ered with sheds and the% should be protected from rain and bad
weather. as the% are not in good condition and it affects the materials at different
-odowns.
<&i. Authorit% should be gi&en to engineering store to purchase emergenc% spare parts. which
will minimi0e stoppages of production. and also this will sa&e time.
P A K I S T A N T O B A C C O
C O M P A N Y
B1E
Chapter 7 Findings and
Recommendations
<&ii. ngineering store should keep some important high technolog% items of machiner% as
spare in time of emergenc% it will be used which will minimi0e loss of time and
production.
<&iii. Management must do their best to maintain cordial relationship with )B8 and workers to
a&oid a suspicionIfueled en&ironment.
<i<. (T) should make its appraisal s%stem more subjecti&e. so that an% finger should not be
raised on that.
<<. 9ther uni&ersities students should also be checked ma% be an% competent person get
neglected due to onl% short listing IBA and ">M! students.
<<i. The gate personnel should be trained to be courteous and do their jobs without making
&isitors uncomfortable.
<<ii. The securit% personnel with in organi0ation should be equipped with arms or emergenc%
equipments to handle emergenc% situations.
<<iii. ?orkers should be encouraged to not hide faults in production and the% should point it
out if there is an% fault in production of cigarettes.
<<i&. (T) should tr% to reduce cost and increase sales as much as possible. !o that it,s
financial position will impro&e more and more.
<<&. In !9( the end month operation are noticed that the marketing and the production
programs contradicts and not compatible with each other.
<<&i. !trictl% health and safet% polic% should be followed b% all emplo%ees of (akistan Tobacco
)ompan% regardless of rank or position as that polic% is so benefit of emplo%ees.
<<&ii. As (T) published )2 T.BCC. maga0ine after a quarter for information of
emplo%ees but there should be a big notice board in e&er% department or in central
administration block where emplo%ees can see and &iew different information pro&ided
b% compan% to its emplo%ees.
<<&iii. At bu%ing point of tobacco it should be properl% packed so that tobacco is not wasted due
to loose packing.
<<i<. :uring maintenance time the workers are not utili0ing the time properl% to do the
maintenance to a&oid major breakdown. so an efficient use of time allocated for the
maintenance ma% be insured.
<<<. In pro&ident fund withdrawal the workers makes two or man% round of ;.8.:. which is
total unnecessar%. It must be totall% done b% the wages section for the con&enience of the
workers.
<<<i. 6or pro&ident fund withdrawal three da%s and fi<ed in a week. but particularl% this
restriction of three da%s is not obser&ed.
<<<ii. The finance department must ha&e its own finance mission statement.
<<<iii. The mission statement should be written in nglish. >rdu and (ashto. so as the
emplo%ees at all le&els understand the mission.
P A K I S T A N T O B A C C O
C O M P A N Y
B1F
Chapter 7 Findings and
Recommendations
<<<i&. The compan% mission statement and 6inance mission should be displa%ed on boards and
charts etc and all other departments missions at there department.
<<<&. The lower emplo%ees should be gi&en opportunities to mo&e a head in accordance with
potential as to impro&e the workers spirit towards THM.
<<<&i. As the new business in&ol&e computers and software programs change quickl%. so the
finance as well as other department,s personnel working on computer should be gi&en
proper training.
<<<&ii. The qualit% of cigarettes should be impro&ed further and the de&iation in qualit% of
cigarettes b% minimi0ed to achie&e optimum le&els.
<<<&iii. The field force in the leaf area should be trained in public relations so as to impro&e their
influence in the leaf area with farmers and communit% leaders.
<<<i<. -i&e a sense of respect and honor to %our retired emplo%ees. as to further impro&e the
compan% good will image.
<l. Maintain such in&entor% le&els as required for production for a limited time. so as not to
in&est an% resources for unnecessar% cash locking.
<li. 9rgani0e some group acti&ities for emplo%ees in order to impro&e their spirit of coI
ordination and team working. and also to impro&e the efficienc% lacking area.
<lii. The internal audit should further be impro&ed and in case auditor finds some lapses
action must be taken.
<liii. 6or implementation of THM. the )ompan% should gi&e proper attention to piece rate
workers and contractors.
<li&. The most important is its working en&ironment. which I found good. but outstanding. and
e&er% changing.
<l&. The human resource departments should make the en&ironment. which I found good. but
not outstanding. and e&er% changing.
<l&i. The human resource departments should make the en&ironment more creati&e. open.
create feeling of trust. humbleness. i.e. their mental. spiritual. ph%sical and emotional
sides of personals.
<l&ii. 6or better human career de&elopment. promotions should not be solel% on talent
e&aluated b% boss. but it will be better that BAT should conduct standard tests for gi&ing
promotions to emplo%ees. as fa&oritism and nepotism should full% be eradicated and the
tests should be conducted b% BAT personnel,s along with local competent manager
ha&ing integrit% and impartialit%.
P A K I S T A N T O B A C C O
C O M P A N Y
B12
Chapter 7 Findings and Recommendations
C&APTERRE
IMP7EMENTATION P7AN
E;) Aim of Implmntation Plan
The aim of implementation plan is to put into action and practice the recommendations in the light of
aspect like. cost. time. procedure polic% etc.
E;, Implmntation Plan fo! R3!uitmnt an0 Sl3tion
The implementation plan for recruitment and selection I ha&e suggested is based on certain rules.
8eferences should not be used.
!hould be based on merit
(reference should be gi&en to the candidates with rele&ant e<perience and qualification.
The (akistan Tobacco )ompan% has a prestige reputation of ha&ing the Nation best Tobacco
producing unit. These roles should be followed in order to maintain its reputation and prestige.
The implementations plan for the selection and recruitment is as under/
B. ?hen e&er the management feels the need of filling a &acanc% at the (T) should firstl% check the
internal or on job emplo%ees. if an% one is eligible for the &acanc%. But if the decision is to
recruit 7 select e<ternall% then the% shall simpl% go for a &acanc% ad&ertisement in the leading
news papers of the countr% i.e. $The News'. The Nations. =ung. :awn. NawaIII?aqt. 6rontier
(ost etc.
The ad&ertisement shall clearl% state the followingM
=ob description
8esponsibilities
ligibilit% i.e. qualification. e<perience. age limit. gender etc.
?orking hours.
Time limit for recei&ing application
D. "ater when the applications are recei&ed the% should be screened. out and the best candidates shall
be selected for the test or inter&iew. The left o&er candidates applications should be kept in the
record for the purpose. the% ma% require in the near future.
E. Inter&iew letters shall be sent to the short listed candidates or if possible the% shall make a brief
phone.
F. Inter&iew panels are set up. as per polic%. At least three people shall conduct the inter&iew and
there shall be at least two inter&iews b% different persons for an% professional post. ach
P A K I S T A N T O B A C C O
C O M P A N Y
B13
Chapter 7 Findings and Recommendations
inter&iewer shall record his 7 her impressions on an assessment sheet. which shall be attached with
the application and shall be transferred to his7her personnel file in case he7she is selected.
2. In case of second inter&iew. three candidates shall be short listed through the first inter&iew
process if possible. This will ensure that a choice is a&ailable.
3. The inter&iew process can be modified according to the needs of the post and the hiring unit,s
requirements. )andidates ma% be required to gi&en presentations and undergo practical and
theoretical test. The% ma% be in&ited to participate in a meeting etc.
4. 5eeping one thing in mind the panel shall not put the candidate into aspects that are gender
sensiti&e. There shall be no se<ual harassment. threatening etc. The% ma% be put into ambiguous
situations in order to find out his7her mental caliber and patience. as per the demand of the job.
1. (anel will discuss and decide on the best candidates to be put up for a subsequent inter&iew. The
;8 department shall thank the candidates for taking interest and shall send them a letter to those
who are not selected.
@. The ;8 manager shall check the references of short listed candidate in a sensiti&e manner.
BC. The ;8 manager in consultation with the general manager shall make an offer to the candidate
who is finall% selected.
BB. )andidate shall be called for a medical check up.
BD. 9n joining. the candidate shall be sent a cop% of
a. 8ules. regulations and culture of the (T).
b. =ob description
c. &aluations s%stem
d. )ontract information
e. 9ther benefits *if offered+
f. If there is a need for training.
BE. The emplo%ee shall be trained. in order to polish his7her abilities and skills. Training period should
not be more than two weeks. Training will keep both the organi0ations and the emplo%ee. The
(T) shall confirm the% ha&e chosen the right one. The% will judge the emplo%ee practicall% and
will ha&e a closer look towards his aptitude and skills. ;e should be rotated in e&er% department
for at least D da%s so that he full% become aware of the nature of job of all departments. as all the
departments of (T) are inter connected and linked together
In the mean time if the management found an% deficienc% in the candidate like mental and
ph%sical. The management should not waste time and go for the runner up.
The training polic% will keep in candidate in such a manner that he will full% be come aware of the
nature and en&ironment of the factor% or head office. As he will be rotated in all the departments
he will ha&e an idea of all the functions of the tobacco chain. And hence will be able to work as
required.
P A K I S T A N T O B A C C O
C O M P A N Y
B14
Chapter 7 Findings and Recommendations
BF. "ater the candidate shall be allotted his post.
B2. )ontract shall be signed with in the period of one month after his going.
B3. )opies of the contract shall be sent to all the rele&ant department heads.
Total cost to be incurred on the process.
A0v!tismnts in t. N:spap!s; Ta/l E;)
Newspaper :a% "ocation !i0e )ost
The News !unda% )enter page H. page 8s. BC.CCC7I
=ang !unda% )enter page H. page 8s. BC.CCC7I
NawaIeI?aqt !unda% )enter page H. page 8s. BC.CCC7I
:awn !unda% )enter page H. page 8s. BC.CCC7I
The Nation !unda% )enter page H. page 8s. @.2CC7I
The 6rontier (ost !unda% )enter page H. page 8s. @.2CC7I
Ad&ertisement )ost Total 8s.2@. CCC7I
)ost to be incurred on Mails and Telephone calls is appro<imatel% calculated as 8s. ECCC7I
Total )ost to be incurred on the process R 8s. 3D.CCC7I
Tim F!am Ta/l E;,
4 da%s Time for recei&ing applications
F da%s Time for screening and selecting best candidates for test and inter&iew
B da% 6or preparing in&itations to the candidates for inter&iew7test.
BC da%s !hall be required more till the inter&iew date. This includes sending and
recei&ing of the in&itation b% (T) and candidates respecti&el%.
Total Time Taken b% the process R DF da%s
P A K I S T A N T O B A C C O
C O M P A N Y
B11
Chapter 7 Findings and Recommendations

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BC. (akistan Tobacco )ompan% "imited. *DCCC+. nnual Report. Islamabad.
BB. (akistan Tobacco )ompan% "imited. *DCCB+. nnual Report. Islamabad.
BD. HuaidIeIA0am )ollege of )ommerce. *DCCC+. %nternship Report on )a4istan To-acco Company
/imited3 4ora 2hatta4. >ni&ersit% of (eshawar.
BE. Institute of Management !tudies. *B@@@+. %nternship Report on )a4istan To-acco Company limited
4ora 2hatta4 Factory. >ni&ersit% of (eshawar.
BF. Institute of Management !ciences. *DCCB+. %nternship Report on )a4istan To-acco Company limited
4ora 2hatta4 *actory3 (eshawar >ni&ersit%.
B2. (akistan Tobacco )ompan% "imited. *B@@1+. 'n1ironment 5ealth 6 $a*ety policy. Islamabad.
B3. 5istory o* British merican To-acco. *onIline+ A&ailable *DCCD+. http/77www.bat.com
B4. (i**erent Regions o* British merican To-acco. *onIline+ A&ailable *DCCD+. http/77www.bat.com
B1. The )TC analysis *onIline+ A&ailable *DCCD+. http/77profiles.wisi.com
P A K I S T A N T O B A C C O
C O M P A N Y
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Chapter 7 Findings and Recommendations
P A K I S T A N T O B A C C O
C O M P A N Y
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