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ANALYSIS OF FOOD SECTOR IN PAKISTAN

Submitted To:

Mam Humaira Shahid

Submitted By:

Aiman Ismail Sameen Hussain Hamna Ejaz Iqra Shaqat Zoobia Arshad

M08BBA037 M08BBA061 M08BBA067 M08BBA060 M07BBA015

ACKNOWLEDGMENT
First of all we offer our humblest sincerest thanks to Almighty Allah, the Gracious, Compassionate, Beneficent and the Merciful Who bestowed us the ability to perceive and pursue higher ideas of life. It is one of infinite blessing of God that bestowed us with the potential and ability to complete the present project in time. We humble pay our respect and praise the Holy Prophet (P B U H) who is the originator, source of knowledge and greatest social reformer and put lesson for all humanity, those spiritual, ethical and moral guidelines enlightened our soul. It is a matter of great honor and pleasure for us to express our ineffable gratitude and profound indebtedness to our honorable teacher Mam Humaira Shahid for her kind supervision, valuable suggestions, humble guidance, and untiring help and in exhaustive energy to steer forth us.

TABLE OF CONTENTS

Rafhanmaize Co Limited National Foods Limited Murree Brewery Company Limited Shezan International Limited Mitchell’s Fruits Farm Limited
STATUS OF FOOD INDUSTRY IN PAKISTAN

1-13 14-24 25-33 34-43 44-51
52

Sameen Hussain M08BBA061

RAFHAN MAIZE
Rafhan Maize is the pioneer in producing diversified type of sweeteners for multiple applications in more than 50 types of industries. The Company processes thousands of tons of corn every year to produce high quality food ingredients and industrial products.

VISION
To be the premier provider of refined agriculturally based products and ingredients in the region.

MISSION STATEMENT
To grow business consistently through positive relationship with customers to attain full customer satisfaction and to bring continual improvement by adopting only those business practices which add value to our customers, employees and shareholders.

CORE VALUES

Safety

Quality

Integrity

Rrespect

Excellence

Over the years.43 Net sales Income tax after tax Earnings per share Rs.99 2009 11428 1297 140. Company retained its strong position as the supplier of choice by focusing on good management practices. A major key to success has been continuous development of innovative ingredients to meet customers’ requirements while reducing their cost. the plant capacity has gradually been increased and company now operates from two locations with sufficient manufacturing capacity to meet market demand. Management is determined to optimize its manufacturing capabilities and to maintain company’s position as one of the leading ingredient supplier.(million) Rupees Company has made a steady progress in its financial performance and managed to improve it net sales by 22% as compared to last year. The profit after tax improved to Rs. 1838 million against Rs. Company is well cognizant of market needs and changing business dynamics to continuously enhance its competencies to meet customers’ needs with higher product standards.(million) Rs.OPERATING RESULTS 2010 13913 1838 198. BUSINESS REVIEW Company has engaged in long journey during the last several years to achieve excellence and consistent growth in its business. HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT . commitments to quality and better marketing mix. 1297 million of last year. Product portfolio spans three major categories Industrial Food & animal nutrition Health ingredients INVESTMENT Company has always followed its policy to invest into new technologies and product innovation which is the core strength of its business.

41 12.30 38.85 ↓35.2010 % Sales – Net Cost of sales Gross profit Distribution cost Administrative expenses Operating profit Other operating income Finance cost Other operating expenses Profit before taxation Taxation Profit after taxation Earnings per share 21.70 COMMENTS SALES –NET The sales have increased 21.02 39.73 12.59 41.74% due to continuous development of innovative ingredients.56 38.66 4.17 34.74 18.69 Rs 41. .04 35.

ADMINISTRATIVE EXPENSES Administrative expenses also increased like distribution cost because the Co has increased production so more labor has been employed and their benefits is increased every year. wages and other benefits of employees increased. Co is spending more money in market research & development which will enable the Co to earn higher profit in future. This positive rate of change in sales indicates Co’s effectiveness in managing unit sales and market share. . That’s why gross profit has shown an upward trend.73% which is mainly due to increase advertisement and sale promotion. Co has lowered its rent. An increase in sales is also due to lower trade commission. rates. There is proportionate change in the ratio of sales to cost of sales. Co is continuously focus on product quality and brand loyalty. Co is investing considerable time and money on human resource development in the fields of technology and business administration. GROSS PROFIT Gross profit showed an increase of 35.41% which is mainly due to higher sales. taxes. Co has shown upward trend in production and sales that’s why salaries.Both domestic and internationally demand of Co’s products have increased as compared to previous year. COST OF SALES There is 18. that’s why cost has increased due to purchase of superior raw material. More raw materials are used to bring sales at higher level.04% increase in cost of sales as compared to previous year mainly due to increase in sales. DISTRIBUTION COST Distribution cost showed an increase of 12. repair & maintenance cost.

To cater the market. OTHER OPERATING EXPENSES Other operating expenses has increased % due to  Workers’ profit participation fund  Workers’ welfare fund PROFIT BEFORE TAX There is an increasing trend in profit before tax because of an increase in operating profit. networking & data communication.70% in profit after tax due to higher profit before tax as compared to tax.30% due to less mark up on short term running finance. .59% mainly due to  Higher purchase of raw material  Increased sale volume PROFIT AFTER TAX There is higher increase of 41. Lower finance cost also contributes in achieving higher profit after tax. co is spending more money in IT.Increase in administrative expenses is also due to higher electricity charges. FINANCE COST Finance cost has decreased 35. OTHER OPERATING INCOME There is an upward trend in other operating income mainly due to  Markup on staff loans and profit on bank deposits  Profit on sale of scrap  Profit on sale of pesticides and seeds This shows better utilization of funds. Cost has decreased is also due to lower bank charges. TAXATION Tax has increased 34.

51 9. It’s a good sign because market value of share is increased.70 168. promotion.Profit increased due to targeted advertising.04 19.99 ↓94. innovation & effective supply chain strategies. EARNINGS PER SHARE EPS has increased from previous year.09 CURRENT LIABILITIES . plant and equipment Intangible assets Capital work in progress 23.82 90.55 14.44 CURRENT ASSETS Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Cash and bank balances 11. HORIZONTAL ANALYSIS OF BALANCE SHEET 2010 % NON CURRENT ASSETS Property.15 ↓1.

PLANT & EQUIPMENT Property.12 Share Capital And Reserves Share capital Reserves 0 24.Trade and other payables Markup accrued on shortterm running finance Short term running finance – secured Provision for taxation 50.52 ↓13. Co did not have intangible assets. . INTANGIBLE ASSETS In 2009.16 COMMENTS PROPERTY. plant & equipment showed an increase of % due to Co’s more investment for bright future. Co’s volume of production has increased due to high demand of quality products.61 NONCURRENT LIABILITIES Deferred taxation 35.98 ↓3.

TRADE DEBTS Trade debts have increased 19. It shows Co’s trust in their customers.04% growth in stock in trade as compared to last year. software represents financial accounting software which has been acquired during the year. STOCK IN TRADE There is 168. The increase is mainly due to increase in  Raw material – corn & cobs  Work in process  Finished goods This positive change is mainly due to increase in raw material.51% due to increase unsecured – considered goods to customers. LOANS AND ADVANCES Advances increased in 2010 due to increase advances to employees and suppliers of goods & services.SAP.82% in year 2010 mainly due to increase in security deposits and L/C margin. STORES AND SPARES Stores and spares showed a growth of 11. Stores and spares enable the Co’s production on continuous basis. TRADE DEPOSITS & SHORT TERM PREPAYMENTS There is an increasing trend of 14. No advances were given to executives and directors of the Co during the year.70% due to increase plant & machinery. It will save the Co against future price fluctuations in corn & cobs. Increasing trend in current year is also due to loans to employees. RECEIVABLES Receivables have increased 90.99% due to increase in  Receivables – considered goods .

09% due to decrease in               Cash at bank On current A/C On PLS A/C Cash in hand Trade and other payables There is an increase of 50.09 times DEBT RATIO PROFITABILITY RATIOS Operating profit margin 21.98% due to increase in Advances from customers Creditors Security deposits from dealers & contractors Worker’s welfare fund Employee’s provident fund Sales tax payable Special excise duty payable Unclaimed dividend RATIO ANALYSIS LIQUIDITY RATIOS Current ratio Quick ratio 2.30 times ACTIVITY RATIOS Inventory turnover ratio 3.23% . Receivables – from related parties CASH AND BANK BALANCES Cash and bank balance decreased 94.05 times 0.

e.32% CURRENT RATIO Co’s current ratio for the year 2010 is 2. . if banks give loan to that Co it will receive 0. OPERATING PROFIT MARGIN There is an increase in this ratio mainly due to  Increase in gross profit  Higher sales  Increase in operating profit NET PROFIT MARGIN An increase in this ration is due to  Increase in pretax profit  Higher sales  Higher net profit  Earnings per share  Return on assets EARNINGS PER SHARE EPS has increased from previous year which in Rs198. INVENTORY TURNOVER RATIO Co’s inventory turnover ratio is 3 for current year that shows Co’s improved efficiency.21% Rs 198..30:1. it means Co’s current assets are 0. i.30.05:1.99 now.99 25.Net profit margin Earnings per share Return on assets 13.30 current assets in return of its loan. It means Co has improved its liquidity. QUICK RATIO Co’s quick ratio is 0.

utilities and other overhead will continue.It’s a good sign because market value of share is increased. optimizing manufacturing capabilities. . It seems that Co’s journey on the track of progress will continue and Co will continue to create value for all stake holders. Some of the major challenges are Low growth High inflation Rising unemployment Continued fiscal indiscipline Surging food and energy prices Expensive credit to private sector Low foreign investment In view of the prevalent market circumstances. BUSINESS RISKS. striving for continued differentiation of Co’s products and services and continuing our operational excellence and prudent use of resources. however. it may be difficult to include the total impact of cost increases in the price of Co’s products. CHALANGES AND FUTURE PROSPECTS The economic outlook for 2011 remains problematic. The management of the company is fully aware of the challenges y adopting market driven strategies. the performance of consuming segments may remain depressed which may impact overall demand for Co’s products especially pressure on the cost of maize.

AIMAN ISMAIL M08BBA037 .

and are Pakistan’s leading multi-category Food Company today with over 250 different products in 12 categories. 50 billion food company by the year 2020 in the convenience food segment by launching products and services in the domestic and international markets that enhance lifestyle and create value for our customers through management excellence at all levels. and HACCP certifications along with SAP business technology to drive the company’s strong commitment to quality and management excellence. NFL is dedicated to improving the well-being of society through continuous development of innovative food products and through a wide-ranging corporate social responsibility program. ISO 22000. VISION & MISSION STATEMENT “Our vision is to be a Rs.NATIONAL FOODS LIMITED National foods limited (NFL). founded in 1970. NFL is an international brand sold in over 35 countries and it aims to be a Rs. NFL holds ISO 9001.” CORE VALUES Passion Teamwork Ethics Customer focus Leadership . 50 billion company under its Vision 20/20 plan.

competitive team with good fusion of fresh talent and its own people. Company believes that its customers are its asset and therefore it continues to invest and develop this talent. “Sales & Operational Planning” enables the company to plan and make goods more efficiently so that it is able to timely service its customers’ needs. which will help it to serve its customers & consumers better in future. It has launched several new brands in these markets to meet consumer needs and is up to date with its customer requirements. It has paid the company attractive dividends and considerable savings in these high inflationary times. adding new positions to the mix. Marketing. JCR-VIS has rated National Foods’ credit quality unchanged for the fifth year in arrow. The newly cost trackers enable the employees in managing costs efficiently.96%. Supply Chain and Finance under one platform has helped the company in deriving synergies. is a testimony that its consolidation phase has borne fruitful results and it has emerged as clear winners in market place. Company’s “Cost Control & Cost management program” has been a great success. giving it a leading edge in the market place. The speed at which the company takes decisions and monitors its performance has increased manifold. and they maintained its short term rating as “A2” and long term rating as “A+”. It has turned around its exports business and believes that there is great potential for NFL to tap in international markets. it has reorganized and modernized the organizational structure. with a handsome market share gain.0VER VIEW OF COMPANY’S PERFORMANCE National foods limited have scaled new heights of success and our strong top line growth of 22. Company has focused significantly in modernizing its business and building world class processes. Duo to changing needs. Company has a strong. During the year many cost saving projects were identified and successfully implemented. It has exciting plans for next year to improve its servicing capabilities. . The integration of key functions of Sales. The management is very focused in driving out unnecessary costs.

While some of these issues are short term. Elevated consumer and customer value expectations will be a catalyst for the industry to become more efficient in its operations. with leading brands. accelerate growth further. but it will continue to consolidate its portfolio and with careful management of the value equation and appropriate cost reductions measures. It has well-positioned for future long term growth. unparallel manufacturing and distribution systems and an outstanding team of employees.BRANDS It has following brands in market:          National Tomato Ketchup National Iodized Salt National Pickles National Basmati Rice National Jams National Fruitily Instant Drink Mix National Jellies National Desserts National Spices BUSINESS RISKS FUTURE OUTLOOK The effect of global recession and the tough domestic economy has put considerable pressure on all walks of life. 2012 will continue to be a challenging year. but company believes that its business is uniquely positioned to deliver as per plan. which will present challenges and opportunities to the foods industry. With these assets and its commitment to build a stronger company. the lingering effects on consumers and customers represent a fundamental shift in value expectations. It has an enviable position of being market leaders. . The economic environment and volatile security situation present challenges.

76 88.64) 9.56 .HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT 2011 % Sales Cost of sales Gross profit Distribution cost Administrative expenses Operating profit Other operating income Finance cost Other operating expenses Profit before taxation Taxation Profit after taxation Earnings per share 22.83 27.79 18.12 125.53 47.5.63 79.96 24.27 94.45 164.37 Rs.61 (2.

 There is proportionate change in the ratio of sales to cost of sales.  Co is continuously focus on product quality and brand loyalty. ADMINISTRATIVE EXPENSES  Administrative expenses increased because the Co has increased production so more labor has been employed and their benefits are increased every year.79% increase in cost of sales as compared to previous year mainly due to increase in sales.  This increase is also due to an increase in provision for doubtful advances and other.96% due to continuous development of innovative ingredients.64% which is mainly due to decrease in salaries.  More raw materials are used to bring sales at higher level. that’s why cost has increased due to purchase of superior raw material.61% which is mainly due to higher sales. GROSS PROFIT  Gross profit showed an increase of 18. .  Both domestic and internationally demand of Co’s products have increased as compared to previous year.  This positive rate of change in sales indicates Co’s effectiveness in managing unit sales and market share. DISTRIBUTION COST  Distribution cost showed a decrease of 2. COST OF SALES  There is 24. That’s why gross profit has shown an upward trend.COMMENTS SALES  The sales have increased 22. wages and other benefits provided to marketing staff.  Increase in administrative expenses is also due to higher printing and stationery charges.

45 % mainly due to  Higher purchase of raw material  Increased sale volume PROFIT AFTER TAX  There is higher increase of 164.  Decrease in return on late payments by trade debtors  100% decrease in insurance claim liabilities.OTHER OPERATING INCOME  There is an downward trend in other operating income mainly due to  Decrease in exchange gain-net. FINANCE COST  Finance cost has increased 27. .  Profit increased due to targeted advertising.  Lower distribution cost also contributes in achieving higher profit after tax. promotion. EARNINGS PER SHARE  Increased which is a good sign because market value of share is increased. TAXATION  Tax has increased 79. innovation & effective supply chain strategies.12% due to  Workers’ profit participation fund  Workers’ welfare fund PROFIT BEFORE TAX  There is an increasing trend in profit before tax because of an increase in operating profit.27% due to  More mark up on long term running finance  More mark up on export re-finance  More mark up on short term loan OTHER OPERATING EXPENSES  Other operating expenses has increased 94.37% in profit after tax due to higher profit before tax as compared to tax.

70) 29. spares and loose tools Stock in trade Trade debts Advances Trade deposits and prepayments Other receivables Cash and bank balances SHARE CAPITAL AND RESERVES Issued.22 (2.74) 15.56) (65. plant and equipment Intangible assets Long term deposits CURRENT ASSETS Stores.75 0 55.6 (96.32 13. subscribed and paid up capital Unappropraited profit NON-CURRENT LIABILITIES Long term financing 748.86) .70 (68.1) (2.87 (2.9) 0.HORIZONTAL ANALYSIS OF BALANCE SHEET 2011 % NON CURRENT ASSETS Property.

50) COMMENTS PROPERTY. .18) (25.37) (77. INTANGIBLE ASSETS  Co’s intangible assets decreased due to decline in opening net book value of computer software.56% due to decrease in capital work in progress.9 (9. It means Co. plant & equipment showed a decrease of 2.Liabilities against assets subject to finance lease Deferred tax Retirement benefits obligations CURRENT LIABILITIES Trade and other payables Accrued interest/ mark up Short term borrowings Current maturity of: Long term financing Liabilities against assets subject to finance lease Taxation-provision less payments Due to government (100) 9 (56. is finishing its work in progress and moving towards finished goods which are a good sign for bright future.7) 53.11) 289 (14. PLANT & EQUIPMENT  Property.

TRADE DEBTS  Trade debts have increased 13.9% due to decrease in  Receivables – in workers’ participation fund  Receivables – from related parties .LONG TERM DEPOSITS  They have shown a decreasing trend and it can be for the reason that Co is withdrawing its deposits STORES AND SPARES  Stores and spares showed a fall of 2.70% due to increase in debts – considered goods to foreign parties.  The increase is mainly due to increase in  Work in process  Finished goods  This positive change is mainly due to increase in provision for obsolescence.32% growth in stock in trade as compared to last year.6% in year 2011  Due to increase in deposits that are considered good  Due to increase in prepayments OTHER RECEIVABLES  Receivables have decreased 96. ADVANCES  Advances decreased in 2011 mainly due to decrease in advances to employees against salary and expenses.74% due to decrease in capital work in progress STOCK IN TRADE  There is 15. TRADE DEPOSITS & SHORT TERM PREPAYMENTS  There is an increasing trend of 29.  It shows Co’s trust in their customers.

SHORT TERM BORROWINGS  They have shown a decreasing trend due to decrease  In Murabaha loan  In Running finance DUE TO GOVERNMENT  It has decreased by 14.18% due to decrease in mark up both on short term and long term borrowings. TRADE AND OTHER PAYABLES  They have increased due to increase  In Creditors  In Workers’ participation fund  In Workers’ welfare fund  In Advances from customers ACCRUED INTEREST/MARK UP  It has decreased by 9. from different banks against mortgage of property of company.CASH AND BANK BALANCES  Cash and bank balance increased 0.87% due to increase in  Cash at bank in foreign currency account LONG TERM FINANCING  This has increased due to advances taken up by the Co. DEFERRED TAX  It showed an increasing trend because of accelerated tax depreciation/amortization.50% due to decrease in sales tax .

83% 4.56 13.56 days 149.44 times .RATIO ANALYSIS 2011 LIQUIDITY RATIOS Current ratio Quick ratio ACTIVITY RATIOS Operating cycle No. of days in inventory Receivables turnover Payable turnover Inventory turnover ratio DEBT RATIO Debt to equity ratio PROFITABILITY RATIOS Gross profit margin Operating profit margin Net profit margin Return on assets Return on equity INVESTMENT/ MARKET RATIOS Earnings per share Price earning ratio Dividend payout ratio Rs.20 times 138.93% 28.39% 1.70% 18.63 times 2.08% 27.48 times 44.51% 8.80% 8. 5.42 times 12.57times 20.23 times 0.

23:1.20:1. QUICK RATIO  Co’s quick ratio is 0.COMMENTS CURRENT RATIO  Co’s current ratio for the year 2011 is 1.  It means Co has improved its liquidity. it means Co’s current assets are 0.  It’s a good sign because market value of share is increased. OPERATING PROFIT MARGIN  There is an increase in this ratio mainly due to  Increase in gross profit  Higher sales  Increase in operating profit NET PROFIT MARGIN  An increase in this ratio is due to  Increase in pre-tax profit  Higher sales  Higher net profit  Earnings per share  Return on assets EARNINGS PER SHARE  EPS has increased from previous year which in Rs5. INVENTORY TURNOVER RATIO  Co’s inventory turnover ratio is 2.. .e. if banks give loan to that Co it will receive 0. i.56 now. GROSS PROFIT MARGIN  Has increased because sales have increased in proportion to cost of sales.20 current assets in return of its loan.44 for current year that shows Co’s improved efficiency.20.

MURREE BREWERY HAMNA EJAZ M08BBA067 .

Alignment of our mission & goals. VISION Our office is in market MISSION STATEMENT We the people of Murree Brewery co. Educate one another. Lite Export Pils. Silver Top Gin. Continuous improvement. It is composed of three divisions known as liquor. Our Premium products include Murree's Millennium Beer. by performing the correct task on time. Responsibility and respect of our jobs and each other. Vintage with a blend of a Scotch Grain Whisky. It manufactures and sells alcoholic and non-alcoholic products in Pakistan and internationally. Bolskaya Vodka and Doctor's Brandy. Murree's Classic Beer. PRODUCTS OF MURREE BREWERY  Alcoholic products  Non-alcoholic products  Tetra pack juices  Glass production . glass and tops division amongst which liquor is the most profit making division.MURREE BREWERY INTRODUCTION OF THE COMPANY Murree Brewery Company Limited was established in 1860 and is based in Rawalpindi. The Murree Brewery produces a wide variety of Beer's. Liquor's and non alcoholic products. Eight and Twelve years old Single Malt Whiskies. make personal commitments to first understand our customer’s requirement then to meet & exceed their expectations.

11 11.37 46.242.088 2.24 11.854 PROVISION FOR TAXATION 125.92 43.907 800.197 26.329 21.649 3.466 PROFIT BEFORE TAXATION 340.770 629.136.64 -43.20 16.330 159.86 53.14 52.661 527.MURREE BREWERY COMPANY LIMITED Profit & loss (2009-2010) Horizontal analysis Name TURNOVER DUTIES AND TAXES NET TURNOVER COST OF SALES GROSS PROFIT Distribution cost 2010 2009 % 14.45 .10 306.989 Other operating income Other expenses EBIT FINANCE COST 15.763 177.533 1.220.385 1.83 3.71 27.714.320 4.021.591.832 16.581 209.85 Administrative expenses 112.311 345.877 61.252 315.363 2.507 524.976 119.839 37.777.934 1.578.715 2.90 67.10 32.30 6.022 NET PROFIT EPS 215.56 11.896 1.

registering a 27% increase.242 million in FY09 to Rs 3.45 per share in FY09 to Rs 21.  However.  This was reflected in 33% increase in EPS.85 per share in FY10.  The company did not perform significantly well in FY10 showing deficiencies in distribution system as well as impact of overall economic downturn.COMMENTS ON THE ANALYSIS OF PROFIT & LOSS ACCOUNT  The company showed a 16% increase in net turnover. leading to an overall 46% increase in net profit from Rs 215 million in FY09 to Rs 315 million in FY10.  The cost of sales increased by 11% from Rs 1.  Distribution cost and administrative expenses increased by 11% and 6% respectively. from Rs 16.591 million in FY09 to Rs 1. indicating strong COGS management.  However.  Other income increased 307% causing EBIT to increase by 53% from Rs 345 million in FY09 to Rs 527 million in FY10. . the sales trend shows that 16% sales increase over FY09-10 was less than 30% increase over previous years.  Finance cost decreased by 44% due to retirement of short term running finance and consequent mark-up savings. taxation increased by 67% due to increase in current taxation.714 million in FY10.  The gross profit consequently increased from Rs 629 million in FY09 to Rs 800 million in FY10.777 million in FY10. from Rs 3.

9 29.15 25.2 145 28.474 503415 88697 15035 4295 -29.405 1.396 38885 18936 5545 102.2 -56.715 23.10 .626 78207 631 2704 % 1.183 96.384 595.6 72.TREND ANALYSIS OF MURREE BWERRY BALANCE SHEET (2009-2010) ASSET SIDE OF BALANCE SHEET Names Assets Plant & machinery Investment in property Long term advances Long term deposits Current assets Stores spare parts Stock in trade Trade debt Advances Short terms pre payment 2010 2997.36 18.546 3481 2009 2946.

0 1633 1072 52.4 -5.1 2386 LAIBILITY SIDE OF BALANCE SHEET Names SHARES CAPITAL & RESERVES Capital reserves Unappropiated profit Surplus on revaluation of property plant & equipment NONCURRENT LIABILITIES Liabilities against finance lease Deferred staff Deferred taxation CURRENT LIABILITIES Current proportion of liabilities of assets finance lease Trade and other payments 2010 2009 % 144.3 23713 150156 15769 137529 50 91 1050 2222 52 464485 367596 116 .75 8.Interest accrued Other receivable Investments Advance income tax Cash and balances 2087 3787 74704 552986 50 2749 69083 25744 22240 4074 37.334 916729 2346692 131213 668588 2358832 9.9 2.

 Liabilities have increased because company is paying lease for the assets it has acquired to increase its business  Deferred staff liabilities have increased because company employees are contributing towards the fund of retirement.  There is an increase in advances held for trading because company has increased some funds to invest in market.  Other receivables have increased due to the increase in pension fund of the company.  There is increase in the investment because the company is making investment  Long term investment has increased due to the high interest of 11%and are repayable in the period of three years  Long term deposits have increased it is +ve sign for the company  There is downfall in the spare tools because company have disposed off the spare parts of the old machinery  The stock in trade has decreased because company has acquired more raw materials to increase its volume of production by selling its finished goods.09 COMMENTS ON THE ANALYSIS OF BALANCE SHEET OF THE MURREE BWERRY  There is an increase in the plant and machinery by in 2010 by 1% because company has acquired new assets that are increasing the company volume of production. .  Trade in debt is decreased because the money is not being recovered and the company has to create a provision for doubtful goods.  In 2010 the company has made provision for the taxation.Tax provision Net profit after taxation 35544 315329 215837 46. Company has made a provision for it too. Shareholder have confidence in the company  Unappropiated profit have increase because the depreciation is value is added to it That’s why there is a decrease is the surplus of revaluation of asset.  Trade and other payable have increased due to the increase in accrued liabilities and advances from customers.  Cash and bank balances have increased it is positive impact on the company due to large rate of interest on the accounts maintained in the foreign currency with the bank.  There is an increase in the reserves it is a +ve sign for the company because the shares are being traded actively.  NPAT have increased because the company has earned profit on the sales it is a+ ve for the company.

Liabilities have majorly increased because of the increase in trade in other payables and this year provision for tax is also created.34% 12.23days 11. The company is generating profit and have a sound position in market.05% in FY10 indicating the efficient management of cost of goods sold.18% 0. It is positive sign for the company.4% 8.10% 2.34% in FY09 to 31.760days Reasons for the Ration Analysis  The gross profit margin increased from 28.23% over the same period.43 Days 2009 28.5% 6. volume of production in all three division have also increased.12 8.79 in FY09 to 2.72 in FY10.RATIO ANALYSIS OF MURREE BREWERY OF 2010 AND 2009 Name of ratio Gross Profit Margin Operating Profit Margin Pretax Profit To Sales After Tax Profit To Sales Return On Equity Current Ratio Debit Equity Ratio Asset Turnover Ratio Days Of Inventory Maintained Days A/C Receivable 2010 31.  The profitability ratio shows that company is in profit and have increased volume of sale.79% 0. Due to the increase in liabilities of the company as compared to the previous years. shareholders have interest in the equity of the company because it share are maintain its value in the market.58 120.6% 6.05% 9. . it is also positive sign for the company.33% 2.72% to 12. Major increase in liquor production.  Return on equity has increased due to the increase in NPAT.23% 10.  Operating profit margin increased from 9.  The increase in pre tax profit shows that there is increase in the other operating income.72% 0.  The current ratio fell slightly from 2.57 Days 5.55 114.72% 14.  After tax profit has also increased due to the increase in massive increase in the sales.15 % 0.

57 days in FY10. o Company has also declared a cash dividend of @50% and 20% bonus shares on the existing capital which shows that company is performing very well. The solvency position is good. o In the end it can be said that company has consistently improving and have a better outlook in future. It is the positive sign and the company is having the faith of its creditors.  The company has to control his costs  Has to bulid new promotion a strategy for the juice because of its competitors. given in the investment in total assets and the shareholders' equity put into the company. These ratios show that the company is generating sufficient sales.43 days in FY10.  This indicates that FY10 was an inefficient year with respect to inventory management.  Inefficient trade policy. RISKS TO THE COMPANY  The company being a liquor producing co.  The ups and down in the political sector  Export barriers  The ups and downs in the economy  High inflation trend prevailing in the country.23 days in FY09 to 120. The liquidity position of company remains strong. o The market value of share of the company has improved it can be seen that the company is earning profit.76 days in FY09 to 5.  Inventory turnover increased from 114. in Pakistan has to bear some fundamentalist view of the Muslims. CONCLUSION ON MURREE BREWERY o Though there is decrease in the liquidity ratio of the company but they have faith of their shareholder.  The day sales outstanding decreased from 11. signifying stronger receivables management in FY10. o They have also maintained their exports and earned profit.  Assets turnover ratio increase shows increase it is + ve for the company. .  Debit equity ratio have also increased because slightly because the company have taken long term loans for the creation of asset.

ZUBIA ARSHAD M07BBA015 .

Shezan International Limited was conceived as a joint venture by the Shahnawaz Group.A. employees and stakeholders. In 1980-81 a separate unit was installed in Karachi. providing more than expected for our customers. In its a c t i v i t i e s t h e c o m p a n y w i l l p u r s u e g o a l s a i m e d a t t h e achievement of profitable business . growth through innovation.” MISSION STATEMENT Our mission is to provide the highest quality fruit and vegetables related juices and products to retail and food service customers.SHEZAN INTERNATIONAL LIMITED The Shezan International Limited was incorporated on May 30. We want to be the recognized industry leader in quality and service.these results will be d e r i v e d f r o m t h e d e d i c a t e d e f f o r t s o f e a c h e m p l o y e e i n conjunction with supportive participation from management at all levels of the company. Pakistan and Alliance Industrial Development Corporation. In 1971. Shezan International's Head Office is Located in Lahore VISION “To be known as leader of quality products in the region. Shahnawaz group purchased all the shares of Alliance Industrial Development Corporation with the permission of the Government of Pakistan. 1964 as a Private Limited Company. . integrity in the management of our business. Dedication to quality is a way of life at our company.S. U. in 1964. Shezan is the largest food processing unit having developed and installed the capacity to meet the country's local as well as export needs. and commitment to Team Management and Quality Improvement Process. We will accomplish this by maintaining a tradition of pride in our products.

HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT Sales Cost of sales Gross profit Distribution cost Administrative expenses Operating profit Other operating income Finance cost Other operating expenses Profit before taxation Taxation Profit after taxation Earnings per share 2011 % 16.51 26.46) 55.02 27 (32.40 17.20 14.55 16.00 Rs 24 .01 21.11 7.81 13.40 24.

. OTHER OPERATING INCOME There is an downward trend in other operating income (32.20% increase in cost of sales which is mainly due to increase in sales. GROSS PROFIT Gross profit showed an increase of 14. There is proportionate change in the ratio of sales to cost of sales.46) mainly due to  Decrease in exchange gain-net. ADMINISTRATIVE EXPENSES Administrative expenses increased 13% because the Co has increased production so more labor has been employed and their benefits are increased every year.11% which is mainly due to higher sales. This positive rate of change in sales indicates Co’s effectiveness in managing unit sales and market share.  Decrease in return on late payments by trade debtors  100% decrease in insurance claim liabilities.COMMENTS SALES The sales have increased 16. More raw materials are used to bring sales at higher level. wages and other benefits provided to marketing staff. Co is continuously focusing on product quality and brand loyalty. This increase is also due to an increase in provision for doubtful advances and other.81% which is mainly due to increase in salaries.40% due to continuous development of innovative ingredients. That’s why gross profit has shown an upward trend. COST OF SALES There is 17. Increase in administrative expenses is also due to higher printing and stationery charges. DISTRIBUTION COST Distribution cost showed an increase in value to 7. Increase in sales shows the increased demand of Co’s products Both domestic and internationally compared to previous year. that’s why cost has increased due to purchase of superior raw material.

11% because of an increase in operating profit.40 % mainly due to  Higher purchase of raw material  Increased sale volume PROFIT AFTER TAX There is higher increase of 24% in profit after tax due to higher profit before tax as compared to tax. innovation & effective supply chain strategies. . Profit increased due to targeted advertising. It’s a good sign because market value of share is increased. TAXATION Tax has increased 16.01% due to  Workers’ profit participation fund  Workers’ welfare fund PROFIT BEFORE TAX There is an increasing trend in profit before tax 21.FINANCE COST Finance cost has increased 55.51% due to  More mark up on long term running finance  More mark up on export re-finance  More mark up on short term loan OTHER OPERATING EXPENSES Other operating expenses has increased 26. promotion. EARNINGS PER SHARE EPS has increased from previous year. Lower distribution cost also contributes in achieving higher profit after tax.

20) 40. spares and loose tools Stock in trade Trade debts Advances Trade deposits and prepayments Accrued financial payments Income tax recoverable Cash and bank balances Total current Assets SHARE CAPITAL AND RESERVES Issued.83) (20.HORIZONTAL ANALYSIS OF BALANCE SHEET 2011 % NON CURRENT ASSETS Property.83) (36.80) .30 18.53) 27. subscribed and paid up capital Reserves Unappropraited profit NON-CURRENT LIABILITIES Liabilities against assets subject to finance lease (175) 9.42) 21.4 (0.31 13.73) (3.11 1.62 (23.7 20. plant and equipment Investment in associates Investment available for sale Long term deposits CURRENT ASSETS Stores.32 0 (115.50 (11.

88 7.98 55. LONG TERM DEPOSITS They have shown a decreasing trend and it can be for the reason that Co is withdrawing its deposits STORES AND SPARES Stores and spares showed a fall of 15% due to decrease in capital work in progress STOCK IN TRADE There is 27.45 12. .8 18. plant & equipment showed an increase of 1.23 22.21 55.40% due to increase in capital work in progress. INTANGIBLE ASSETS Co’s intangible assets decreased due to decline in opening net book value of computer software.31% growth in stock in trade as compared to last year.Deferred tax CURRENT LIABILITIES Trade and other payables Accrued interest/ mark up Short term borrowings Current position of liabilities against Assets subject to lease Taxation-provision less payments Total Liabilities 6.22 COMMENTS PROPERTY. PLANT & EQUIPMENT Property.

8% in year 2011  Due to decrease in deposits that are considered good  Due to decrease in prepayments ACCRUED FINANCIAL INCOME Accrued financial income have decreased 36. It shows Co’s trust in their customers. ADVANCES Advances increased in 2011 mainly due to increase in advances to employees against salary and expenses.7% due to ………… INCOME TAX RECOVERABLE Income tax recoverable has decreased to 3. TRADE DEPOSITS & SHORT TERM PREPAYMENTS There is an decreasing trend of 23.4% due to decrease in  Cash at bank in foreign currency account TRADE AND OTHER PAYABLES They have increased 18.The increase is mainly due to increase in  Work in process  Finished goods This positive change is mainly due to increase in provision for obsolescence. TRADE DEBTS Trade debts have increased 18% due to increase in debts – considered goods to foreign parties.8% in 2011. CASH AND BANK BALANCES Cash and bank balance decreased 20.9% due to increase  In Creditors  In Workers’ participation fund  In Workers’ welfare fund  In Advances from customers .

9% 3.64 0.36 .43 72.03 0.2% due to decrease in mark up both on short term and long term borrowings.33% Rs 23.51 1.2% 0.ACCRUED INTEREST/MARK UP It has decreased by 55.2% RATIO ANALYSIS LIQUIDITY RATIOS Current ratio Quick ratio ACTIVITY RATIOS Inventory turnover ratio Days Account Receivables DEBT RATIO PROFITABILITY RATIOS Operating profit margin Net profit margin Earnings per share Return on assets 5. SHORT TERM BORROWINGS They have shown a increasing trend due to increase  In Murabaha loan  In Running finance PROVISION FOR TAXATION It has shown an increasing trend up to 7.

43 now.36 current assets in return of its loan..64:1. INVENTORY TURNOVER RATIO Co’s inventory turnover ratio is …….e.CURRENT RATIO Co’s current ratio for the year 2011 is 1.9% in this ratio mainly due to  Increase in gross profit  Higher sales  Increase in operating profit NET PROFIT MARGIN An increase of 3. for current year that shows Co’s improved efficiency. . i. it means Co’s current assets are 0. if banks give loan to that Co it will receive 0. It’s a good sign because market value of share is increased.36. QUICK RATIO Co’s quick ratio is 0.36:1.33% in this ratio is due to  Increase in pre-tax profit  Higher sales  Higher net profit  Earnings per share  Return on assets EARNINGS PER SHARE EPS has increased from previous year which in Rs23. It means Co has improved its liquidity. OPERATING PROFIT MARGIN There is an increase of 5.

striving for continued differentiation of Co’s products and services and continuing our operational excellence and prudent use of resources. however.BUSINESS RISKS. CHALANGES AND FUTURE PROSPECTS The economic outlook for 2011 remains problematic. optimizing manufacturing capabilities. the performance of consuming segments may remain depressed which may impact overall demand for Co’s products especially pressure on the cost of maize. it may be difficult to include the total impact of cost increases in the price of Co’s products. Some of the major challenges are Low growth High inflation Rising unemployment Continued fiscal indiscipline Surging food and energy prices Expensive credit to private sector Low foreign investment In view of the prevalent market circumstances. It seems that Co’s journey on the track of progress will continue and Co will continue to create value for all stake holders. utilities and other overhead will continue. The management of the company is fully aware of the challenges y adopting market driven strategies. .

IQRA SHOUKAT M08BBA060 .

To be a Leader in the markets we serve by providing quality products and efficient services to our consumers while learning from their feedback to set even higher standards for our products. There is an increase in operating profit margin. promotes individual growth. market leader and trend setter. Highly qualified executives. Modern high-volume industries equipment. thus becoming more competitive on the international stage also. As a result the manufacturing operations with frequent electricity and gas outages admit low economic growth together with high inflation remained an ending challenge. After the country gained independence in 1947. . the company's name was changed to "MITCHELL’S Fruit Farms Ltd. To be a Company that attracts and retains outstanding people by creating a culture that fosters openness and innovation. As a matter of economic and social problems." with the brand name of "MITCHELL’S". professional management and a trained workforce all combine to ensure that Mitchell’s continues its dominance as the innovator. VISION & MISSION STATEMENT “To be competitive in the growing market as the quality managed company”. OVERVIEW OF COMPANY’S CURRENT POSITION: Modern trade results in boost u of exports by 8%. financial and accounting functions from the Head Office in Lahore. After tax profit for the year is increased. There is less increase in financial charges due to sound management and improve supply chain. It was established in 1933 by Francis J. and rewards initiative and performance. the transactions between the related parties are made at arm’s length prices. company is facing a countries poor economic condition. To be a Company that continuously enhances its superior technological competence to provide innovative solutions and superior products as per requirement of the market place. After discounting some growth of the non-performing products of the company’s sales growth for the year end is almost 30%. handle marketing. Mitchell under the name of Indian Mildura Fruit Farms Ltd. when Mitchell’s became the first food company in Pakistan to achieve ISO 9001 accreditation. Mitchell’s is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location. . using modern management tools. commercial. Countrywide sales are managed by fully computerized and inter-linked regional sales offices ensuring a smooth distribution system with nationwide coverage. In this regard a major step was taken in 1998.MITCHELL’S FRUITS FARM LIMITED Mitchell’s is the oldest food company in Pakistan.

People have confidence over the company.9 9.3 30.HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT 2011 % 30.01 58.02 sales Cost of sales Gross profit Administration expenses Distribution expenses Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year Earnings per share COMMENTS SALES:     Sales have increase for 2011 due to increase in selling price. As sales volume increase. GROSS PROFIT:  As the size of sales increased the gross profit for the company also rises.66 45.68 58. Brand loyalty is present Exports of the company’s product for the year have increase.26 52.42 29.17 37.98 56.4 34.15 1. cost of production also increased. . COST OF SALES:    Due to inflation rises of raw material has increased. Superior products demand.8 18.

There is an increased in bank and other charges of the company. Others sources of company’s also shows an upward trend. There is proportionate change in the ratio of sales to cost of sales. Company should take measure in order to cover these expenses. Worker’s welfare fund has also increased. FINANCE COST:     There is an increase of almost 2%. While the donation by the company decreases for current year. OTHER OERATING INCOMES:    Exchange gain has increase in 2011. Majorly the current portion of the company increased by many times. That’s why gross rofit has shown an upward trend. There is an increase in worker’s participation fund. As the sales volume and prices of raw material increases due to which the amount of tax also increased. . ADMINISTRATIVE EXPENSES:   Administration expenses increased because the Co has increased production so more labor has been employed and their benefits are increased every year. TAXATION:    Taxation of the company has increased by 52%. DISTRIBUTION EXPENSES:  As the sales of every single product has increased due to inflation. Markup on short term finance reduces. Employee’s wages also increased due to inflation. There is an increase in scrap sales of the company. The marketing expenses of the company raise so much. OTHER OPERATING EXPENSES:    Worker’s profit participation funds have increased.

09) 62. spares and loose tools Stock in trade Trade debts Advances.2) 35.  Lower distribution cost also contributes in achieving higher profit after tax.14 55.3) 18. accrued and other liabilities Accrued finance cost on short term running finances Contingencies and commitments Total equity and liabilities 6. plant and equipment Intangible assets Long term loans and deposits Biological assets CURRENT ASSETS Stores.1 (7. deposits.45 .PROFIT BEFORE TAX  There is an increasing trend in profit before tax because of an increase in operating profit. It’s a good sign because market value of share is increased HORIZONTAL ANALYSIS OF BALANCE SHEET 2011 % NON CURRENT ASSET Property.74 (25.22 (35.3 (33.6 5. EARNINGS PER SHARE   EPS has increased from previous year.30 51.08 ------21.5 -----3. repayments and other receivables Cash and bank balances Capital and reserves Reserves Un appropriated profit NON CURRENT LIABILITIES Deferred liabilities CURRENT LIABILITIES Short term running finances-secured Credits.53 16.58) 67.

It’s a good sign. DEFERRED LIABILITIES:   Deferred taxation for the 2011 has been decrease. Worker’s welfare funds also increases. Operating fixed assets have also been increase. PROPERTY.COMMENTS UN APPROPRIATED PROFIT:   There is an increase of 21. Its good sign that company is paying off its current liabilities. Retirement and other benefits for the employees have been increased. as company is efficient in recovering its long term assets. . INTANGIBLE ASSETS:   There is an increase in intangible assets due to increase in administration expenses. There is an increase in advances from customers.6%. SHORT TERM RUNNING FINANCES-SECURED:   There is a decrease in short term liabilities of the company. LONG TERM LOANS AND DEPOSITS:   There is no long term loans and deposits of the company in 2011. Worker’s profit participation fund also increased. CREDIT’S ACCURRED AND OTHER LIBILITIES: There is an increase in credit liability because of o o o o Increase in trade creditors. PLANT AND EQUIPMENT:   There is an increase in capital work in progress. Its only because of increase in fund for the employees by the company. Net book value of the assets has been increased.

TRADE DEBTS:   There is an increase in trade debts. As considerable doubtful has been increased. o There is also an increase in finished goods. STORES. There is an increase of balances in current account in 2011. ADVANCES. Large provision of obsolete items is deducted. SPARES AND LOOSE TOOLS:   There is a decrease in the value of stores. STOCK IN TRADE:  There is an increase in stock in trade due to o Increase in raw material amount. o Increase in packing material. DEPOSITS AND PRE PAYMENTS:   There is a decrease in advances of the company. As lives stocks and no of trees have been increased. Opening charges have also been reduced. CASH AND BANK BALANCES:   There is an increase in cash and bank balance of the company. . spares and loose tools.BIOLOGICAL ASSETS:   There is an increase in biological assets of the company.

RATIO ANALYSIS: 2011 % Profitability ratio Operating margin profit Net profit margin Earning per share Return on asset Liquidity ratio Current ratio Quick ratio Debt equity ratio Activity ratio Asset turnover ratio Days inventory maintained Days a/c receivable 8.57 9.07 1.8 2010 % 7.09 times 2. NET PROFIT MARGIN:   Taxation amount increase due to increase in sales.6 1. As the profit of the company increases for the year.37 9.09 14.16 4.75 3. EARNING PER SHARE:   There is an increase in earnings per share.91 2.33 times 0.50 10. The profit margin also increases by 58%.34 times 6.79 12.8 COMMENTS: OPERATING PROFIT MARGIN:    There is an increase in operating profit margin.22 7. There is a proper management and low administration expenses as compare to other companies.36 times 24. The gross profit margin plus income from other sources also been increased. the earning per share of the company rises by 58% .27 times 0.6 2.34 times 24.

RETURN ON ASSETS:   For the year 2011 the return on assets increased from 7 to 9. Small decrease in quick ratio. Company’s credit risk for last year has been decrease. The company interest rate risk arises from short term borrowing. credit risk and liquidity risk. Earnings for the common share holder increased greater as compare to the increase in fixed assets. QUICK RATIO:    There is a decrease in quick ratio of the company. due to decrease in the value of inventories. Decrease in the value of inventories is a good sign for the company. FINANCIAL RISK MANAGEMENT: The company’s activities expose it to a variety of financial risk. The company has no significant long term interest bearing assets. Currently the company foreign exchange risk expose is restricted to the amounts receivable/ payable from/ to the foreign entities. DEBT EQUITY RATIO:   There is a decrease in debt equity ratio. . CURRENT RATIO:   There is an increase in current ratio of the company.6%. The company manages liquidity risk by managing sufficient cash and the availability of finding through adequate amount of committed credit facilities.31%. There is an increase in current assets as compare to the current liabilities. RETURN ON EQUITY:   A very positive increase in the ratio of return on equity. It will gain the confidence of investors. It’s a good point for the company. The company’s overall risk management programmed focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance. as its long term debts reduces by 0. market risk. Borrowings obtained at variable rates expose the company to cash flow interest rate risk.

STATUS OF FOOD INDUSTRY IN PAKISTAN According to the Census of Manufacturing Industries there were 822 units engaged in the manufacture of Food and Beverages. fruit preserves. Rapid export growth has characterized fish preparation. It was 32.66 per cent in 20092010. The share of food in the manufacturing industry is declining. specially to Europe and the Gulf region. some beverages and sugar. and honey preparation. According to the UNIDO (United Nations Industrial Development Organization) it is the largest manufacturing industries of the country. sugar. biscuits and confectioneries. . dry fruits. The growth rate in the food industry has been estimated at 7.46 per cent per annum.170 billion. Value of production stood at Rs. Food products (except rice) do not however. The most rapidly growing items are dairy products fish processed. make up a significant proportion of Pakistani exports and there is a considerable potential for expanding such exports.46. Food processing is a relatively capital intensive industry. bakery items. fruit juices and other soft beverages.