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ACKNOWLEDGEMENT
All if thanks are due only to almighty ALLAH, the most gracious, and the most
merciful who enabled me to complete this job. I would like to express my
sincere gratitude to my Mr. Abdullah Ghole (I/c Funds Sec.), Mr. Hafiz Ali
Akhtar of Funds Section & Mr.Shahid Imran Ch. Of Sales Tax section for her
constant encouragement, sincere advice, suggestion and important
discussion to valuable accomplish of my training program. Without their
guidance, I would never be able to gain the confidence and precision in my
work. I also wish to thank to all other people without whose responses this
success would not have been possible. And, of course, I am most indebted to
my parents without their support, encouragement and dua this work would
have never been possible.
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Preface
Hailey College of Commerce, University of the Punjab has been an institution
of honor and discipline. It has always created a lot of potential in the students
for studying and improving their skills for dealing in the practical life.
The Bachelor of Commerce program here at the Hailey College of Commerce
is equipped with 6 weak practical training as internship. This Internship and its
viva-voce, awarded by 100 marks is a complementary part of any company,
business organization and business related enterprises or registered firms
working anywhere in Pakistan. No concern with the business of the business,
internee has to prepare an internship report about organization and the work
done by the student thereto, at the end of his/her internship.
Here I KHAWAR AHMED being the student of B.Com (Hons.) in Punjab
University as its study center Hailey College of Commerce College Roll # 763,
during Session 2004-2008, completed my Internship at PACKAGES LIMITED.
At the end of my practical training. I have prepared an internship report
elaborating the details about the company and its work done thereto.
At the end of this remarkable session I would like to thanks all of them who
encouraged me a lot during my study course.
Khawar Ahmed
B.Com (Hons.)
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Executive Summary
PACKAGES LIMITED was established in 1957 and is the oldest composite
Packaging unit of Pakistan packaging consumer products. Backed by the
organizational expertise of Syed Babar Ali leading Industrial and commercial
company in Pakistan now surging ahead of its competitors in the field of
Packaging.
This report is split into various portions, 1st section consists of Introductions
and History, second consists of Packages Management System, third for field
of activates, four of work done by student... I analyzed this project in the light
of Financial Analysis.
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PACKAGES LIMITED
INTRODUCTION
HISTORY
Packages Limited was born out dream to set in Pakistan an industry of
excellence based on local raw material and talent. In July 1954 while on a visit
to Sweden, Syed Babar Ali the first Managing Director and now Advisor to
Packages Limited negotiated with the setting up of a packaging plant in
Lahore with the collaboration of AB Akerlund and Pausing (Sweden). This
project was established with paid up capital of Rs. 4.49 Millions.
With foreign requirement and expertise and Pakistani capital and labor,
Packages Limited was in business by May 1957. Around each of the 22
Swedish experts set-to run the plant and train Pakistani personnel a group of
young educated trainees was set up (6 ,-learn the new technologies and
working methods.
Over the years, the Company continued to enhance these facilities to meet
the growing demands of packaging products. It was spread over 105 acres.
Additional capital was raised from sponsors International Finance Corporation
and from the public in making the total paid up capital to Rs. 31 millions in
1965.
Packages Limited in the beginning helped consumer industry by providing
packing solutions in the form of cartons for cigarette, tea, confectionery,
pharmaceutical and soap industry. However paper and board supplied by
local mills did not meet the quality requirements of their customers. In 1965 it
was decided that backward integration was necessary for Packages Limited
to sustain continuous production of quality packaging and commissioned its
own paper mill in 1968 for self-sufficiency and quality product development
with an installed capacity of 24000 tons of paper and paperboard. Waste
paper and agricultural raw materials such as wheat straw, and river grasses
are used together with imported wood pulp in the paper mill.
Continuous expansion in response to growing demand had increased the
installed capacity to 50000 tons of paper and paper board by 1994. With
growing demand the
Capacity was increased periodically and in January 2007 was nearly 100,000
tons per year.
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Starting from 1970 Packages Limited also extended the expertise acquired to
other Third World countries Management and technology were exported to
Indonesia, Tanzania, Kuwait, Saudi Arabia, Zambia, Somalia and Nigeria
where packaging concerns were helped to successfully run their operation.
Today, packages Limited is considered among the leading fully integrated
packaging complexes in Indonesia.
MISSION STATEMENT
To be a market leader by providing quality products and superior service to
our customers, while
learning from their feedback to set even higher
standards for our products.
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ENVIRONMENTAL POLICY
Packages is committed to the environment. We realize that we live in a world
where resources are finite and the eco-system has a limited capacity to
absorb the load mankind is placing on it. That is why we make every effort to
make sustainable development a reality. The numerous projects and plants
implemented in and around our site bear ample testimony to our dedication.
Some of our objectives are to increase recycling rates, improve effluent and
waste management, and reduce water loss. These and other environmental
concerns are exemplified in our environmental policy, which every employee
is expected to uphold and implement.
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GLOBAL PARTNERS
One of the best ways for a business to leverage its products and increase
growth is through association. Our business alliances help us manage our
business more effectively, as well as helping us and our partners develop and
diversify our interests. Customers also benefit from the increased knowledge
base, as we transform our market awareness and shared technology into
innovative and cost effective solutions for customers.
The Packages Group is proud of its long standing network of friends and
family, with key business partners as diverse as Print Care, Coca-Cola, Tetra
Pak and Mitsubishi Corporation.
Milkpak was established in 1981. It collected milk from the rural areas,
processes it by the UHT method, and sells it in Tetra Pak containers. In 1988,
Nestle of Switzerland bought into Milkpak and expanded its scope and
activities - Nestle now owns 59% of the enlarged company. NML sales in year
2006 were Rs.28.2 Billion with 2,345 employees. Public Limited Company.
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DIC Ltd.
Packages Lanka (Pvt) Limited is based near Colombo, Sri Lanka. It is a joint
venture between Packages Limited and Print care (Ceylon) Limited of Sri
Lanka. This project was set up in 1998 for the manufacture of flexible
packaging material. Packages Limited owns 79% of this company. Packages
Lanka (Private) Limited has an annual capacity of producing 54 million meters
flexible packaging. Packages Lanka Private Limited had sales of Sri Lankan
Rs. 815 million in the year 2007. The number of employees of the company is
132. Private Limited Company.
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The Insurance Company of the Group, IGIIL, was established in 1953. It had
a gross premium of Rs.1, 040 million in the year 2007. IGIIL holds a very
important position in the Group having investments in all Group Companies.
Net worth at realizable value is over Rs.15.5 billion Numbers of employees
are 114. IGIIL acquired the
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Major Divisions
Packages Limited has three major divisions.
Today Packages Ltd. has about 3000 employees and is the market leader of
its products. It has one of the largest paper and board mill in Pakistan. It is
operating in both the industrial and consumer markets.
The main industries covered by Packages Ltd. are:
Tobacco Industry
Food Industry
Soap Industry
Shoe Industry
Normally company accepts big orders as the fixed overheads are more but
there is no restriction of quantity. Along with its industrial products it has many
consumers products:
Toilet Rolls
Paper Cups
Paper Plates
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Wet Tissues
FEMINEX
Lately, Packages Ltd. added a number of consumer products like wet tissues,
and shoe cleaner to its consumer products line. It is the market leader in both
the industrial and consumer products. It has almost the monopoly in the tissue
market and has about 30% share in the packaging industry. Its major
competitors are:
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Smart Governance
Our People
Customer Satisfaction
Work Environment
Conservation
Ethical Behavior
Smart Governance
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responsibility to the best of our ability. We expect excellence from all
processes, whether they relate to policy formation and accounting procedures
or product development and customer service.
Work Environment
Our policies and core values are aimed towards creating an informal yet
stimulating team-oriented work environment with a culture of sharing and
open communication. We cherish the diversity of viewpoint of every individual;
we realize this encourages innovation and develops character.
All employees have the right to a stress- and injury-free work environment.
We ensure our employee safety and health by providing various in-house
facilities such as a gym and making sure that all staff understand and uphold
our safety policy. All our employees are permitted and encouraged to afford
time and attention to personal concerns.
Our People
Conservation
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Customer Satisfaction
Ethical behavior
We make it clear that being a sincere, honest and decent human being takes
precedence over everything else. In the Packages family, there is an all-round
respect for elders, tolerance for equals and affection for youngsters.
Managers are expected to lead from the front, train junior colleagues through
delegation, resolve conflicts speedily, be visible at all times and act as role
models for others.
We make sure that all our processes and methods conform to the highest
ideals of professional behavior. Our organizational structure is straight-forward
and need-based; accountability is transparent, consistent and both horizontal
and vertical.
We make sure that all our processes and methods conform to the highest
ideals of professional behavior. Our organizational structure is straight-forward
and need-based; accountability is transparent, consistent and both horizontal
and vertical.
OUR PEOPLE
Our people are our greatest asset. We seek and retain people who feel there
is no compromising on excellence, and a corporate culture in which our family
can grow and thrive. Heading our multi-talented team is our leadership of
experienced senior management. Together, we know how to combine our
skills and knowledge to deliver state-of-the-art solutions to our customers.
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Company profile
BOARD OF DIRECTORS
Asadullah Khawaja(Chairman)
Mujeeb Rashid
Kamal Afsar
Khalid Yacob
Kirsten Rausing
ADVISOR
COMPANY SECRETARY
Adi J. Cawasji
EXECUTIVE COMMITTEE
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Syed Hyder Ali - Chairman
Mujeeb Rashid - Member
Khalid Yacob - Member
AUDIT COMMITTEE
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Suleman Javed Member
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The organization structure of Packages LTD is flat and not fully centralized
although lop management is responsible for all-important decision but the
mutual sharing of employees is also considered too much extend.
CORPORATE CULTURE
Our management style can best be described as egalitarian, with everyone
having an equal opportunity for development and growth. People are recruited
into the company based purely on merit and with total disregard to
considerations of gender, race, color or creed. Merit alone is the criterion of all
subsequent professional growth. Performance evaluations are conducted on
the basis of achievement of individual objectives that are in conformance with
the departmental and overall corporate objectives of the company. Promotions
are similarly guided by merit and the suitability of an employee to the position
for
which
he
or
she
is
being
considered.
Our working environment is so relaxed as to be almost casual; there is no
bossing around or subordination, no name tags on offices, and no
appointments required for calling on seniors. People are encouraged to
communicate informally at all levels and interpersonal relationships are
greatly valued. Written communication is simple and to the point, with even
personal
names
abbreviated
to
initials
to
save
time.
Our leadership follows the principle of 'management by walking around',
where managers are expected to make daily rounds of all areas of
responsibility, and have first-hand information of all significant happenings.
This informal style of management may seem arbitrary, but is serious without
being intimidating and has stood the company in good stead over the years.
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Today, our corporate culture is so attractive that most people join us straight
from an educational institute and leave only after serving their full tenure.
POLICY FORMULATION
The main objective is to maintain its position of leadership in providing quality
packaging for all purposes to Pakistan market. To accomplish this Top
management setup I some policies in the best interest of the organization. No
doubt top management makes the policies but it also takes into consideration
the suggestion of middle management and the first line management
The policy formulation process is neither complex nor too long. Some policies
are made for short period and some are for long period. The nature of policies
depends upon the profitability of the organization Meeting are conducted
randomly by top management in which all the shareholders and the head of
each department are invited.
FUNCTIONAL DEPARTMENTALIZATION
There is a functional departmentalization in the packages. All the departments
are responsible for their operations so that there is a better utilization of the
resources and revaluation of their outputs.
PRIMARY ACTIVITIES
Primary activities contribute to the physical creation of the product, its sale
and transfer to the buyers and after sales service.
INBOUND LOGISTICS
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Raw material for the production of paper and board is obtained locally through
regular purchasing from the agricultural sector and to maintain the quality the
Ingredients are mixed with imported wood pulp. About 9000 tons of wood pulp
and 1500 tons of chemicals (Sulphur and raisin) are imported annually.
OPERATIONS
Continuous flow is followed in the paper and board mill and assembly in the
packaging division as paper board is cut in appropriate sizes, printed and then
Modified to be folded. / Into the desired shape.
OUTBOUND LOGISTICS
Tie packaging division uses all the paper produced by the paper and board
mill, which re stored from time to time to accumulate in the warehouse and
prevent from stock outs. Final products are transported from the production
department and the warehouse via trucks.
SERVICES
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There does not exist any dealer network and they do not operate in the
consumer market for the production of paper and board except of providing
tissue papers and toilet paper and sanitary napkins.
SUPPORT ACTIVITIES
Support activities assist the primary activity and each other.
TECHNOLOGICAL DEVELOPMENT
Packages pledges to provide the market with the best quality products at
competitive prices through a system of customer driven, service oriented and
dynamic Management team. To meet this obligation, the company
continuously updates of employee skills by training, acquisition of new
technology, and regular reevaluation of its quality control and assurance
systems.
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over the company uses "computer integrated manufacturing''1 for production
and manufacturing process.
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MANAGEMENT
It is a public limited company and like wise other limited company it is
controlled and managed by its board of directors through a team of highly
professional managers. The relationship of management with the staff,
especially with the workers, remained cordial and the directors are pleased to
record their appreciation for the hard work and dedication shown by them.
HUMAN RESOURCES
A package limited is of view that the strength of any organization lies in its
people that work for it. At the heart of their success lies in their commitment to
equal opportunity, to a performance culture and demonstrated performance.
They continuously invest in their people through training and development
activities. Generally university graduates are inducted by Packages Limited
and given intensive in-house training. The process of grooming and training is
essential for comprehensive understanding of the function of the various
departments.
CUSTOMERS
Packages believe in customer satisfaction, which is the only way to progress
in the new millennium, continuous investment in technology, system, people,
and services
will help them to meet the changing market place and to serve the needs of
the customers in a better way.
WASTE MANAGEMENT
The waste management at the Packages limited is done through:
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Sedimentation and sludge handling process.
Chemical recovery plant.
RECRUITMENT
Packages has been very particular about recruitment of its employees, their
basic selection criteria is based upon professional education as well as
academics background.
Packages Limited has designed a sound but easy method of recruitment.
When any department needs an employee, it sends its requirement to the
Human Resource Department, which in turn advertises the vacancy in the
leading newspapers and asks for the qualified people. In case of the posts
requiring some years of experience, only interview method is used to select
the best candidate.
RECRUITMENT PROGRAM
Packages has separate human resource department that is held responsible
for the recruitment of jobs, subsequent departments on their request are
provided by suitable candidates through HRD, a test is conducted which is
based upon IQ test, aptitude test, and of academics, successful candidates
are then screened through 3 interviews, one by HRD, other by the head of
concerned department, and final interview is the panel interview conducted by
board of selected people of various departments. Personnel department
known as industrial relation department in packages limited, are held
responsible for managing recruitment, record keeping of employees and all
related industrial affairs of the employees.
RECRUITMENT OF WORKERS
Minimum qualification for the post of the workers is Matriculation 2nd Division
with science subjects. The workers should not be more than 21 years old and
must be medically fit. These are employed as "Apprentice Trainee". If the
performance of the worker is satisfactory during the probation period, he is
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hired. Normally workers get promotion after two years on the recommendation
of their supervisors. This post is not advertised.
RECRUITMENT OF EXECUTIVES:
In finance division, they normally require C.A, ACCA, ACMA, MBA, MCOM,
for respective jobs according to their skills. As packages has developed one of
the most
Expensive internal control systems, therefore in order to fill full requirements,
highly qualified people are required.
PROCESS:
The recruiting and hiring process starts from the applications submitted by the
degree holders. They provide their CVs along with the applications. These
applications and CVs are screened out on the basis of:
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Merit
Institute
Experience etc.
After this, approximately 50% of the applicants are selected for the further
process. Then the H.R Department lists out the salient features of the CVs
(only the accepted CVs).
Then the H.R. Manager takes a test. This test is based on:
English comprehension
Basic mathematics
Data sufficiency
IQ
Some questions about the particular job, for which the applicants have
applied.
After taking the test, the top 10, 20 or 30 applicants (according to the job
requirement) are chosen for the first interview. At this stage the selection of
applicants also depends on the H.R. Manager and the departmental head.
Normally 30% of the applicants, who have given the test, are selected for
interview.
Through telephone calls or letters, the selected applicants are informed about
the date and time of the interview. Normally two interviews are taken
H.R. Manager and the departmental head take first interview. In this interview
they observe,
Alertness
Confidence
Leadership skills
Relevant knowledge
Social acceptance
Interests
Communication skills
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First impression
Maturity
LUMS
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PIM
Intek Solution
Recently Packages has jointly entered into a diploma program with LUMS.
It is 18 weeks program called Diploma in Business Administration. Two
sessions of this program has passed out till now.
Performance Plan:
In this section, some standards and targets along with time frame are given.
The target given in Packages Limited is known as "SMART".
S= Specific
M= Measure able
A= Attainable
R= Realistic
T= Time frame
Performance Evaluation:
In this section, the net results of the standards & targets given in section # 1 is
evaluated or checked. Whether the person can achieve the targets in the
required time frame or not.
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Competency Dimension:
In this section, different behavioral indicators, in accordance with the
performance are checked. These indicators are as follows:
Communication Skills
Work Organization
Result Orientation
Team Player
Customer Consciousness
Self-Confidence
Leadership Qualities
Development Orientation
Strategic Visioning
Business Knowledge
Critical Reasoning
Section # 2 score
(%)
Part B
Section # 3 score
(%)
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COMMENTS:
The employee/ subordinate and the manager give their comments. Employee
comments may be how ha found the work place? Who supported him? And
the
Manager gives the comments according to his observation. In the last they put
their signatures with date.
CONTRACT OF SERVICE
APPOINTMENT
Each selected candidate is given a Letter of Appointment (in duplicate)
specifying his terms and conditions of service.
An offer of appointment shall become effective only when the candidate
confirms his intention to accept the position by endorsing the duplicate copy of
Letter of Appointment to the Industrial Relations Department.
The candidate has to pass the medical examination conducted by the
company's Doctor before he is confirmed.
INDUCTION
The appointee shall submit his joining report, in writing, to his Head of
Department, on the date he joins his duty
The time office shall issue an Identity Card which shall indicate the
Department, Designation and the Employee Number of the new appointee.
PROBATION
New employee is initially kept on probation for a period of three months
unless otherwise specified in the Letter of Appointment.
On successful completion of the probationary period, the company shall
inform the employee, in writing, about his confirmation.
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In case, the employee fails to come up to the desired standard, his probation
may be extended, at the discretion of the company, in order to give him a
chance to improve his performance or he may be terminated.
On confirmation, the new employee shall be given a permanent Identity Card
which he/she must carry on his/her person while inside the factory perimeter
and produce the same on demand.
SEPARATION TERMINATION
During the probationary period, an employee's service may be terminated at
any time without assigning any reason for the same
A confirmed employee may be terminated by the company by giving notice of
termination as per the Letter of Appointment or salary in lieu thereof.
Notice of termination shall be in writing. It shall become effective as specified
therein.
RETIREMENT
An employee shall retire from the service of the company on attaining super
annuation i.e. 58 years of age, or early, if found, medically unfit by the
company's appointed Doctor.
DISMISSAL
An employee shall be dismissed from service if found guilty of misconduct as
Specified under the law. Such employee shall not be entitled to any notice or
Pay in lieu thereof.
REGISTRATION
A probationer may resign from the service of the company by giving 24 hours
notice in writing.
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A permanent employee may resign from the service of the company either by
giving notice, in writing, as per the terms of his appointment or depositing
salary in lieu thereof.
REMUNERATION
BASIC PAY
Basic salary is an amount which is paid to an employee in accordance with
the grade in which he/she is placed.
CONVEYANCE ALLOWANCES
Cycle Allowance
All the employees are entitled to a Cycle Allowance in case they not maintain
any transport of their own as per rules
Motorcycle/Scooter Allowance
All the employees who maintain Motorcycle/Scooter are entitled to
Motorcycle/Scooter Allowance provided the vehicle is registered in their name
and they bring the same for at least 15 days in a month to the factory.
Car Allowance
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All the employees in Executive Grade-111 and above are entitled to Car
Allowance provided the vehicle is registered in their name and they bring the
same for at least 10 days in a month to the factory.
All the employees are entitled to House Rent Allowance @ 60% of the
salary with a minimum limit specified for different grades from time to
UTILITY ALLOWANCE
All the employees in V-Grade and above shall be paid a Utility Allowance
according to their respective grades.
SPECIAL ALLOWANCE
All the employees in Executive Grade-11 and above are entitled to Special
Allowance as per their respective grade.
BENEFITS
SUPERVISORY ALLOWANCE
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All the employees having supervisory nature of job and are in Grade IV, V &
J.E. are entitled to Supervisory Allowance as stipulated in the grades till such
they continue to perform such dutie7s.
RECREATION ALLOWANCE
All the employees' up to Junior Executive Grade are allowed Transport Fair
Assistance for recreational trip every year.
SHOE ALLOWANCE
Production employee up to Junior Executive Grade and Office employees up
to Grade-V are allowed Shoe Allowance which is paid in the month of July
every year.
Workers of the Technical Division are provided safety shoes where the nature
of duties so demanded.
DISBURSEMENT OF PAY
Remuneration including overtime is paid to the monthly staff of the last
working day of every month.
The hourly staff is paid on monthly basis.
INCREASE IN REMUNERATION
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Annual increase in remuneration of an employee is made on the 1st of April
every year. This increase is subject, however, to the performance of the
individual during the preceding period.
In case an employee improves his qualification in line with his duties, he is
allowed an increment in his regular grade.
Promotion in the company is subject always to merit and suitability of an
employee to the position for which he is being considered.
EMPLOYMENT BENEFITS
BONUS
The bonus is paid to all the confirmed employees subject to the profitability of
the company at the end of its financial year i.e. 31st of December.
To become entitled to bonus, an employee must be on the rolls of the
company on the 1st of January immediately preceding financial year.
The bonus is paid, on pro-rata basis, on the basic wages/salary, which is
calculated on the basis of average wages/salary earned by an employee
during the financial year. This payment is, however, always subject to the
conditions stipulated in the Office Order announcing the payments of Bonus.
PROVIDENT FUND
On confirmation, the permanent employees become the member of the
Packages Employee Contribution Provident Fund and contribute 10% of the
basic wages/salary plus Cost of Living Allowance earned by him in a
respective month and an equal amount is accredited to the name of the
employee by the Company.
An employee is entitled to take loans on refundable and non-refundable basis
from his Provident Fund.
An employee cab draw a maximum amount equal to six months basic salary
plus COLA as refundable loan in case of marriage, illness etc. which is
repayable along with the interest in a maximum of 24 monthly installments.
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An employee can draw a maximum amount equal to 36 months basic plus
COLA salary from his Provident Fund on non-refundable basis for the
purchase of if residential plot or the construction of his house.
On separation, an employee is paid the total amount i.e. both the company's
and self contribution along with the interest accrued thereon.
GROUP INSURANCE
All the confirmed employees are insured under the Group Term Insurance
Policy by the company. Under this Group Insurance Policy, an employee is
entitled to
Compensation from the State Life Insurance Company in case of death and
disablement as stipulated under the policy.
GRATUITY
Gratuity is paid to the employees/heirs in case of retirement, termination,
resignation or death.
Gratuity is paid to an employee provided he has completed 10 years
continuous service with the company as specified in the annexure.
No gratuity is paid to an employee who is dismissed from service.
The Gratuity is paid on the last drawn basic wage/salary.
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After retirement or death of a member, pension is given to him or his heirs as
the case may be.
In case of death, 50% of the pension is given to the widow. Children under 21
years of age get 20% (each) to a maximum total of 40%.
EX-GRATIA
Ex-Gratia is the amount which is paid, as per the following schedule, at the
time of retirement or death of an employee.
One month
months
3 months
Incase of death
3 months
Nil
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after attaining the age of 58. The company contributes 5% of an employee's
wages/salary towards this scheme.
TELEPHONE FACILITY
In order to ensure that key executives are available in case of emergency, the
company encourages them to have telephone at their residences for which
they are allowed part reimbursement of their telephone bills.
CYCLE FACILITY
All permanent employees up to Grade-V can get cycle on easy installments.
The company arranges for the loan from the Bank which is re-paid in monthly
installments along with the interest thereon.
PRODUCTION INCENTIVE
The Management has set up a Production Incentive Scheme for various
machines or jobs ' the case may be. To motivate employees for higher
production a certain base rate i.e. minimum requires production, for a
machine/job, for a specified period, has been fixed. When an employee or a
group of employees exceeds that minimum required production, they are paid
an extra amount which is in proportion to the regular production and maximum
required time fixed for its production.
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CASUAL LEAVE
Casual leave becomes due from the date of appointment and can only
be allowed after confirmation.
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MEDICAL LEAVE
All the employees are allowed 8 days medical leave with full pay or 16 days
medical leave with half pay in a calendar year.
Medical leave becomes due from the date of appointment and is allowed with
pay after confirmation. For more than one day's medical leave, a medial
certificate issued by a Registered Medical Practitioner is mandatory.
At the end of a calendar year, un-availed medical leave in encased to hourly
rated and monthly paid staff up to Grade-V.
Employees in Junior Executive Grade and above can accumulate up to 40
days medical leave.
HAJJ LEAVE
One month's leave with pay is allowed all permanent employees for
performing Hajj.
COMPENSATORY LEAVE
In case, and Executive Grade-in, to Grade-1 workers for full 8 hours on his
weekly day off or on a Gazetted Holiday, he is entitled to one day
Compensatory Leave.
Compensatory leave is to be available within the same calendar year in which
it falls due.
MEDICAL COVER
Most of the employees are covered under Social Security Scheme initiated by
the Government of Pakistan and those who are not covered there under are
provided medical cover by the Company.
SOCIAL SECURITY
All the employees drawing wages/salary unto Rs.5, 000/= are covered under
the Social Security Scheme. Company pays 7% of their monthly wages/salary
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as contribution to the Social Security Institution which provides medical
coverage to the employees and their direct dependents and compensation in
case of total/partial, temporary/permanent disabled or death arising out of and
in the course of employment.
MEDICAL ALLOWANCE
The company who does not want to avail medical facility from Gulberg
Dispensary can apply for Medical Allowance. Once he opts for the allowance
he can only change it after expiry of one year.
WORK SCHEDULE
WORKING HOURS
(a) Working hours for process and Departments thereto are as follows:-
Shift
Packaging Division
1st
p.m.
2nd
3rd
From 11.20 p.m. to 6.35 a.m.
6.30 a.m. General From 7.30 a.m. to 4.00 p.m.
to 4.00 p.m.
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Process workers of Paper and Board Division, being involved in continuous
Process are not allowed at lunch break. In most of the departments they are
served food their place of work.
1. Employees working in Packaging Division are given half and hour's break
during the shift. Employees working in general shift in both the Division are
allowed half hour's break.
(b) Office employees of the various Divisions observe the following working hours.
At Lahore, Islamabad and Multan Office.
During summer:
From Monday to Saturday.
On Friday:
During winter:
From Monday to Saturday:
On Friday:
At Karachi Office:
From Monday to Saturday:
On Friday:
ATTENDANCE SYSTEM
Company recognizes the need for developing and maintaining accurate
system of recording days and hours of work of all employees. For this
Purpose at most locations of the factory, card swipe machines are installed
and employees are required to enter their arrival and departure whether it is
normal working days or a holiday. At the time of appointment all employees
are issued a swipe card which bear Name, Employee Number, Designation
and Department. At the end of the month, the time office makes out the
earning of the employees on the basis of attendance and sends the same to
Accounts Department for payment.
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OVERTIME
All the employees, upto Junior Executive Grade, are paid at double the rate of
their basic salary/wages plus cost of living allowance, for hours of work put in,
in excess of their daily working hours.
WELFARE AMENITIES
CANTEEN
In order to ensure wholesome and quality food, the management is operating
canteen round the clock. Not only lunch/dinner but also light snacks for the
third shift are served. The food is served at highly subsidized rates and the
employee has to pay a very nominal price. The canteen has four different
messes named as Worker, Supervisor I, Supervisor II and Executives. The
main meals are served on credit basis whereas breakfast, milk and afternoon
tea is served against coupons. The charges, which are received subject to
attendance on duty, are:
Workers
Supervisor I
Supervisor H
In senior mess, the members have to pay at a flat rate of Rs. l 32.00 per
month, in case of annual leave/outstation duty or change in shifts, the
member concerned is allowed Proportionate reduction in bill.
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EXCURSION
Employees up to Junior Executive Grade are given a reasonable allowance to
assist them in undertaking a recreational trip.
SPORTS
The management strongly believes in the maxim "A healthy body has a
healthy mind." We have facilities for practically all the sports and the
tournaments are held every year and the winners as well as the losers are
given handsome prizes. In the same spirit, the management arranges a Mela
for title families of the employees where gymkhana events for the ladies are
arranges. The prizes for the annual sports are distributed in a gala function
which is arranged this very reason.
EDUCATIONAL SCHOLARSHIP
In order to assist the employees to meet the educational expenses of their
children, the management is given scholarship for various classes and
disciplines as follows:
F.A/F.Sc
years
B.A/B.Sc.
years
Scholarships
Rs.500.00
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Graduate engineering
years
Post graduation
years
Special children
metric
HAJJ FACILITY
Every year four employees from Non-management Staff and one employee
from Management Staff are chosen by drawing of the lot to perform Hajj on
company's expenses.
SERVICE AWARD
On the completion of 20 years, 25 years and 30 years service, company gives
gifts as a token of its appreciation for continued association with the
employee.
COMMUNICATION
It is cardinal principle of Management that in order to be efficacious its
communication with its employees should be very effective. In Packages, the
following mediums are used to communicate with the employees.
OFFICE ORDERS/CIRCULARS
Office Orders/Circulars are issued to convey information, instructions and
directives. These Office Orders/Circulars are displayed on the Notice Boards
of the Departments. The copies of such Office Orders/Circulars are sent to the
Departmental/Sectional Heads.
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PACKAGES AKHBAR
Packages Akhbar is published every second month. It contains not only
information 'lit employees and the important events in the Organization but
also educative and instructional articles. Employees are encouraged to
contribute their own articles as well.
SUGGESTION SYSTEM
In order to have two-way communication and to elicit worker's view point, the
management encourages them to make suggestions pertaining to all aspects
of organizational activities and they are given handsome prizes in case their
suggestions .id to their productivity improvement or savings in cost. For this
purpose Suggestion Boxes are kept at the strategic places.
FINANCIAL POLICIES
Packages have well established rules for the financial transaction. One of the
most important strategies in this regard can be that of investment. Before
making investment future is seen rather than the present i.e. investment is
made only in need of the project. This will increase the sales in the future. An
interesting policy in this regard is that the company makes the investment
equal to the depreciation every year. So this implies how careful the company
is in making judgment and formulating policies.
MEETINGS
Packages arranges different meetings in the organization to be keep in touch
with each other
ANNUAL MEETINGS
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Packages arranges the annual meetings in which discuss the previous year
activities and forecast the next year transaction
QUARTERLY MEETING
Packages arrange the quarterly meetings to keep the strict control over the
working of the company.
MONTHLY MEETINGS
All departments held the monthly meetings to monitor the activities of the
department.
DAILY MEETINGS
There is daily meeting in the department to keep an eye on the working of the
employees.
G-l
Grade-2
G-2
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Grade-3
G-3
Grade-4
G-4
Grade-5
G-5
Grade G-5 is for supervisors and G-l is lowest grade in the organization.
Packages Limited has four different executives grades. These are:
Executive-1
E-l
Executive-2
E-2
Executive-3
E-3
E-l is the most senior in executive group and J.E is the most junior in this
group. There are three Managers grade in Packages. These are:
Manager-1
M-l
Manager-2
M-2
Manager-3
M-3
In this group M-3 is most senior and M-l is joiner. The retirement age is 58
years and extension is not granted. If the employee is needed he or she is
hired on contract basis.
Departments of Packages
Commercial Department
Finance Department
Marketing Department
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Production Department
Planning Department
Coating Department
Lamination Department
Dispatch Department
Technical Department
Tetra pack
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FIELD OF ACTIVITIES
Packages Limited is mainly divided into six divisions
1. PAPER AND BOARD DIVISION.
2. PACKAGING DIVISION.
3. Carton Line
4. Flexible Line
5. Corrugated container line
6. CONSUMER PRODUCTS DIVISION
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Board is basically used in the manufacture of cartons where creasing is also
required. It provides necessary strength to the cartons, which are most
commonly used in packaging of cigarettes, toiletries and detergents, tea
pharmaceutical products, food and other consumer items.
Adamjee Paper & Board Mills, Nowshera, and Sethi Straw Board Mills.
Rahwali went into production in about 1955 when government went ahead
and placed restrictions on the import of Packaging material. This on the one
hand not only saved foreign exchange and on the other encouraged the
development of Packaging industry. The first unit went into production in 1957,
followed by a number of additional units, bringing the total over a dozen in
West Pakistan. Since 1967, four additional Paper and board mills have gone
into production at Charsadda, Lahore and Gharo. In the early days, packaging
was an industry in which Pakistan had no previous experience or trained
people.
In view of the growing demand for paper and board the small size projects,
economically viable were set up in almost all the big cities. In order to further
develop the production of this sector and with a view to reduce the import
liability, few more projects were set up in 1972-77. Although the industry has
been passing through a crisis, interest has been shown lately by several new
investors to set up paper and board units. Plans have also been made to set
up a newsprint mill in the country.
Per Capita Consumption of Paper & Board in Pakistan:
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Per capita consumption of paper and board is regarded as one of the
yardsticks to measure a nations prosperity. Compared to the USA, Sweden
and Canada where an individual on an average consumes 200 to 250
kilograms of paper & board per year, the per capita consumption in Pakistan
is hardly three kilograms.
The apparent consumption of paper and board has shown a steady increase
over the past years and is expected to grow at a faster pace over the coming
years because of the increased Industrial and commercial activity in the
country.
The basic need of packaging industry is the paper and board. If an industry is
producing its own paper and board, it is very convenient for it. One of main
features of Packages Limited is that it has its own Paper & Board Mill. At first,
the Packages Limited used to buy paper and board from market. Then in
1968 it set up its own Paper & Board Mill with the capacity of 24000 tones per
year to manufacture various kind of board, flutings, Kraft liners and Poster
Papers conversion into different kinds of cartons and wrappers for the
Packaging Division. The aim of Paper & Board Mill is to produce enough
paper and board for the needs of Packages Limited.
Different types of paper produced by Paper & Board Mill are:
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Today Packages Limited has four Paper Machines with installed capacity of
70,000 tones per annum. Used capacity of these machines is 66,000 tones
per annum. The average production of one day is 180-190 tones. It also has
the straw pulp and liquid packaging board facility, which established in 1992.
With this, they have continued supply and better control on the inputs, which
has improved the quality and customer service from the company.
There are 600 employees in Paper & Board Mill. In Packages Limited 94-95%
of the total pulp used, is produced in its own Paper & Board Mill. Remaining 56% pulp of total requirements is imported.
Paper & Board Mill work under the Planning Department. Marketing
Department projects it prospective sales for the coming year. These
projections are then sent to Planning Department, which plans the production
schedule for the Mill. In the Paper & Board Mill, this whole year plan is broken
into monthly plans. The Mill staff then,
Finds out financial needs and these needs are passed to the Finance
Department. Following are the three sections of Paper & Board Mill:
Pulp Section
Paper Section
Utilities Section
INTRODUCTION TO PACKAGING
Definition of Packaging:
Packaging is the use of containers and components with the addition of
labeling to protect, identify, merchandise and facilitate the use of products.
Protection and identification of product is being the overwhelming factors in
this process. This obviously facilitates the use of a product of a particular
brand.
Packaging History:
At first, packaging was any readily available natural such as skins, bark,
leaves and woven twigs. They worked marginally well because drying,
smoking, salting or fermentation generally preserved food. Non-foods were
mostly sturdy in construction.
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However, obvious deficiencies in these materials led very quickly to
development of textile, wood and ceramic containers. These materials were
an improvement, but still did not effectively protect food from insects, rodents
and diseases that plague mankind, nor did they guard some nonfood products
from the two main ravages of moisture and air rot and rust.
The next step in packaging, one of the most important advances ever made
by man, did not occur until early in the nineteenth century. It was the heat
sterilization of perishable foods in metal and glass containers. It took another
hundred years before frozen foods were developed, making the nutrition,
taste and convenience of fresh foods in economical paperboard packages
available yearround to a significantly large population.
A world conflict forty five years ago spurred the creation of still newer
packaging and distribution techniques capable of preserving foods,
medicines, clothing and military machines and parts in climatic extremes
ranging from steamy jungle heat to searing alpine cold. Thin metal foils and
plastic films, sheets and coatings were the key innovations that made these
developments possible.
Since the mid 1970s, increasing cost of distribution initiated by a steep
rise in fuel prices created an ongoing revolution in packaging structure
aimed at reducing the volume and weight of both unit-of-use and shipping
containers.
In short, the industrial countries of the world have made more progress in the
packaging, storage and distribution of goods in the last 100 years than in all of
the previous time since man first walked the earth. The progress also appears
to be accelerating.
This development of sophisticated packaging that protects products from both
physical and environmental changes has enabled advanced societies to
locate food-growing and product-manufacturing facilities where they are most
practical from the standpoints of climate, raw material availability, labor supply
and power.
The Need for Packaging:
Efficient packaging is a necessity for almost every type of product, whether it
is mined, grown, hunted, extracted or manufactured. It is an essential link
between the product maker and his customers, and unless performed
correctly the reputation of the product will suffer and the good will of the
producer will be lost. All the skill, quality and reliability built into the product
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during development and production will be wasted unless care is taken to see
that it reaches the ultimate user in the correct condition. Properly designed
packaging is the main way of ensuring safe delivery to the final user in good
condition at an economic cost.
Thus, the packaging functions require specialized knowledge and skills, in
addition to the specific machinery and facilities, to produce a package which
will provide most, if not all, of a number of basic requirements:
Containment, protection and preservation, communication, suitability
for the packaging line (i.e. machine ability), convenience in shape, size
and weight for handling and storage, adaptation for the use of the
product it contains, and environmentally friendly in respect of
manufacture, use and disposal.
More over, these basics must be provided at one or all the levels of packaging
usually employed, viz. the primary packaging, the secondary packaging or
shipping containers and the tertiary packaging or the unit load.
Now I would like to discuss the basic needs of the packaging in a little more
detail.
Containment:
Obviously, the packaging must hold all the contents and keep them secure
during the period between the end of the packaging line and the time when
the last of the contents have been finally utilized.
Communication:
All retail packaging must obviously communicate, for not only do they have to
identify the contents and meet the legal requirements, but also often they
must assist in selling them. The unit load and/or the shipping container must
inform the carrier about the destination, provide any instructions about the
handling and storage of the goods and perhaps inform the user as to the
method of opening the package and assembling the contents as well.
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Machine ability:
The great majority of modern retail packages and many transport packages
are today erected, filled, closed and collated on machinery operating at speed
of 1,000 units or more per minute. They must therefore perform without too
many stoppages or the process will be wasteful of material and uneconomic.
Even when the numbers concerned are small and the items are specialized,
the need for a good performance in filling and closing operations is still
important.
TYPES OF PACKAGING:
There are three main categories in which Packaging can be divided;
SHIPPING CONTAINERS:
Shipping containers in packaging trade signify cartons made from corrugated
board.
FLEXIBLE PACKAGING:
This includes packs made from flexible material like Plastic films, Aluminum
foil and Paper or combination of these.
FOLDING PACKS:
This includes Duplex board and Box board packs to carry individual or set of
products like, Cigarettes, Match boxes, Tea, Detergents etc.
CARTON LINE
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This is the largest printing section of Packages Limited. This department has
the largest share in the total Packages Limited sales, which is about 55%.
There are 12 printing machines in this section, which are used for printing on
duplex board. There are two Varnishing machines and one laminator machine.
This printing facility is available from two to six colors. These machines use
oil-based ink. Normally they print Cigarettes cartons, Biscuits, Shoes boxes,
tissue cartons and Tea boxes.
PRINTING MODE:
Ink
Plate
Blanket
Sheet
PROCESS FLOW:
Sheet Feeding
Offset Printing
Cutting &
Creasing
Separation
Bundling
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Bundling
Flats/Unit
cartons
Dispatching
FLEXIBLE LINE
In the Flexible Line there are two departments:
Poly & Paper Converting Department
Flexible Packaging Department
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2) FLEXIBLE PACKAGING DEPARTMENT (FP):
As the demand for sophisticated packaging grew, Packages Limited
established Flexible Packaging Department in 1986 that is fully equipped to
manufacture high quality packaging. Molded from synthetic materials, rubber
plates are used in Flexographic. It uses the Rotogravure printing technique.
This Rotogravure printing is best for food items, for this type of packaging
98% material is imported; as a result it is the most expensive printing
technique.
This printing is more expensive than stereotype printing. Metallic Cylinder is
used in order to get fine printing. This cylinder picks the six color solvent
based ink. The materials surface should be 100% glossy and smoother. It
processes films whether they are paper, poly or aluminum foil based, are
laminated by containing two or more layers so as to give the required barrier
properties against moisture, gases and odors. It produces packaging for soap
and confectionery industry. The printing is done in very attractive colors and
designs.
1) POLYETHYLENE SECTION:
Packages Limited manufactures and prints high density Polyethylene from 12
grams to 60 grams. And in case of low density Polyethylene it is 20 to 150
grams. In the Poly Section Polythene is made.
Process Flow:
Polygrains
Extruders
Melting
Cutting
Oxidizing
Air
pressure
Poly
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2) FLEXIBLE PRINTING DEPARTMENT:
Flexible Line is the department, which handles the printing of flexible
materials. The department has latest machinery to perform day-to-day
operations
CORRUGATED LINE
For large-scale packaging, Packages Limited has been manufacturing
Corrugated Cartons since 1971. These cartons are produced in different
sizes and are used for transporting consumer products from manufacturer to
retail outlets. The share of Corrugated Department in Packages Limited total
sales is almost 20%, which is second after the Carton Line. Corrugated
cartons are of great value for the export of fresh fruits, garments and shoes. A
wide variety of gums tapes for sealing corrugated cartons are also
manufactured
The production process was completed in two halls. Paper needed for this
purpose was also prepared within the factory premises at the Paper & Board
Mill. Then this paper was first processed through the corrugated machine,
which transforms the paper into single wall and double wall as required and
mentioned earlier. Afterwards, the corrugated are processed through the
Flexo machine where they are shaped according to the requirement of the
customer, for example, into a rectangular or square shape.
Flute Plant
B Flute
C Flute
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Double
Baker
Heating &
Gluing
Cutting &
Creasing
Corowall
Sheets
Bundling
Dispatching
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FUND SECTION
At first, I was sent to fund section of account department. I spend more then
three weeks in this section. This dept. deals with all kinds of funds e.g.
provident, pension, gratuity, welfare, wppf.
Details are given below
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1 - PROVIDENT FUND
Packages Limited Employees Provident Fund is recognized under Income Tax
Rules. Provident Fund Contribution is deducted from the wages and salaries
of confirmed employees at the rate of 10% of basic salary + cost of living
allowance. The company also contributes an equal amount.
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Dr
Respective salary/wages
***
Cr
Company's contribution
***
Employee's contribution
***
LOANS TO EMPLOYEES
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The confirmed employees can either draw a refundable or non-refundable
loan.
Refundable loans.
Refundable loan is granted on the basis of 6 basic pay + cola, for the purpose
of house repair, marriage, medical treatment, funeral expenses and other
reasons as provided in the income tax rules for recognized Provident Funds. It
can be sanctioned at any time.
The refundable loan is repaid in 24/48 equal monthly installments.
The applicant has to apply for the above loan as par prescribed loan
application form duly recommended by the head of the applicants department.
Refundable loan payment voucher are prepared / processed through the main
account system by entering following data:
E/No.
Date of loan
Amount of loan
No of loan installment
The loan application after processing by the fund section is sent to the head of
applicant's department for verification of the signatures.
After such verification cashier makes payment in cash.
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The applicant has to apply for the above loan as per prescribed loan
application form duly recommended by the head of the applicants department.
The following conditions are to be fulfilled by the applicant for getting nonrefundable loan.
The loan application & voucher after processing by the fund section is sent to
head applicant's department for the verification of the signatures.
After such verification a cross cheque is handed over to the applicant.
The loan so granted to the employees is debited to his account through main
account system.
RECEIPTS
A receipt is issued against the refund of loans.
The receipt indicates:
Receipt No
Date
The receipt so issued to the employee is credited to his account through the
main account system.
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REFUND OF MARKUP
Markup is refunded to an employee upon repayment of the refundable loan
before the tenure of loan. For this purpose the employee has to apply for the
refund of markup on the prescribed form. Markup is refunded in cash.
FINAL SETTLEMENT
Upon the resignation, termination, dismissal or retirement of an employee the
final settlement voucher is made. Before preparation of final settlement
voucher information is received by fund from the I.R.deptt, mentioning the
reason and date of exit of an employee from the company's service.
Final settlement vouchers are prepared through main account system.
A cross cheque prepared for the payment of final settlement, is checked by
Incharge provident fund, and Deputy Controller of accounts, and is signed by
the trustee of the fund.
The final settlement voucher after processing by the funds section is sent to
the head of the applicant's department for the verification of the signatures.
After such verification a cross cheque is handed over to the employee
individual.
INVESTMENT
The amount of provident fund is invested in post office saving certificate and
other government securities
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Net balance
Yearly member's trial balance of managers is maintained with the I / C pay roll
section.
2 - PENSION FUND
Packages Limited Management Staff Pension Fund is approved under
Income Tax Rules. Management Staff Pension Fund Contribution is deducted
from salary of he confirmed employee @ 4.5% of basic pay +COLA and 20%
of basic pay contributed by the company.
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Cash book of pension fund is manually maintained on daily basis i.e. receipt,
cheques.
Journal of pension fund is manually maintained for posting of adjusting entries
and monthly collection.
Ledger of pension fund is manually maintained; monthly entries are posted
from cash book and journal.
COLLECTION OF FUND
Monthly collection voucher is prepared from the statement of accounts
maintained by packages Limited, in respect of pension fund contribution
deducted from the salaries. The amount is deposited into bank account of the
fund. Money in excess of the current requirement is invested in the securities
as per rule 20 of Trust Act.
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FINAL SETTLEMENT
Procedure adopted is same as in provident fund.
Investment
Investment voucher are prepared manually for the excess amount invested
after payment of pension and final settlement in the securities investment
securities are kept in safe custody with the bank of the fund the bank provides
a safe custody receipt to the trustees
3-GRATUITY FUND
Gratuity fund is approved under the Income Tax Rules. This fund is
maintained to provide gratuity to all permanent employees having completed
at least 10 years service before retirement. The retirement age is 58 years. All
the permanent employees are entitled to become members of the gratuity
funds.
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Cashbook of gratuity funds is manually maintained on daily bases that is
receipt cheques.
Journal of gratuity fund is manually maintained for posting of adjusting entries
and monthly collection.
Ledger of gratuity fund is manually maintained; monthly entries are posted
from cash book and journal.
Dr
Respective salary
***
Company's contribution
Cr
***
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COLLECTION OF FUNDS
Monthly collection voucher is prepared from the ledger account maintained by
packages Limited in respect of gratuity fund contribution @ 8.33% of basic
salary contributed by the company.
FINAL SETTLEMENT
Final settlement vouchers are prepared for those employees who resign /
retire or expire having completed at least 10 years service in the company.
I-5 Years
per year
6-15 Years
year
11-25 year
4 - WELFARE FUND
Employees Contributory Welfare Fund is established to provide financial
assistance to the employees and their families.
This fund is maintained to assist members under following circumstances.
SICKNESS
A member suffering from a prolonged illness has left with no league of any
kind at his or her account and he is allowed by the competent authority leave
without pay on account of sickness.
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TOTAL DISABLENESS
A member who become totally disable physically / mentally to perform her
duties and who is not entitled to any other benefit from any other source.
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Cash book of welfare fund is manually maintained on daily bases that is
receipt and cheques.
Journal of welfare fund is manually maintained for posting of adjusting entries
and monthly collection.
Ledger of welfare of fund is manually maintained; monthly entries are posted
from cash book and journal.
Description
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Dr
Cr
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Respective salary/wages
***
Company's contribution
***
Employee's contribution
***
CONTRIBUTION OF FUND
Member will make contribution to the fund at the following rates
Rs.
Rs. 10.00
6.00
Rs15.00 p.m
An employee can attain grant subject to minimum of Rs. 1000 and maximum
of Rs.
10000.
COLLECTION OF FUNDS
Monthly collection voucher is prepared from the ledger account maintained by
the packages limited in respect of welfare fund contribution deducted from the
wages and salaries and equal amount contributed by the company amount
deposited into bank account of the fund.
NEW SUGGESTION
There is another suggestion under consideration that if an employee's family
need kidney transplantation then grant from worker welfare fund will be
provided.
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Under workers profit participation fund act 1968 workers are made share
holders in the profit of the companies on the finalization of annual account of
the company the
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Sales tax is imposed on sales, all related jobs are merely performed in sales
accounts , on invoices 15% sales tax are added to make final price, in case of
unregistered assesses 3%more sale tax is payable.
In sales department, supply register is maintained as per sales tax act, it
could be monitored on daily basis or at the end of month if it is maintained
through computers, all information are reconciled by general ledger, it
contains
Tax no.
Invoice no.
Description of goods.
Quantity.
Rate.
Some supplies are exempt from sales tax to 6 schedule of sales tax act,
previously packaging material for medicine was exempt, but now it is also
charged by tax. Some supplies are Zero-rate, under section 4, all exports
goods as well as packing material for PIA for international flights are zero rate.
All related information about purchase made by packages are recorded in
purchase register, from bills cut-off of all purchases is segregated into local
suppliers, imports and spares,2 things are taken into consideration while
calculating input sales tax that it relates to taxable goods and secondly use for
manufacturing or not, it contains
Tax no.
Invoice no.
Description of goods
Quantity
Rate
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After calculating inputs 7 outputs taxes, total tax liability is calculated (outputinput),if it is positive figure then it is payable otherwise if it is negative then
refund is carry forward, it is carry forward till one year refund is claimed. Tax
return are adjustable against invoices of same period, if there is time part
between invoice adjustment & return, then refund is claimed to collector, he
may after satisfaction may allow adjusting.
Sales tax refund in case credit note are issued, sales tax accounts will be
debited by the amount charged to sales tax, however, refund of sales tax is
subject of time period passed after invoicing. The major time spans are
divided as
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OBJECTIVES
FINANCIAL ANALYSIS
Balance Sheet
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Horizontal Analysis
Vertical Analysis
Ratio analysis
Horizontal analysis
Through this analysis we can highlight the changes occurred in the current
year in balance sheet and profit and loss account. The Last year becomes
base for next year and changes can be easily analyzed.
Formula:
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VERTICAL ANALYSIS
RATIO ANALYSIS
Ratios are invaluable aids to management and others who are
interested in the analysis and interpretation of financial statements. Absolute
figures may be misleading unless compared, one with other. Ratios provide a
means of showing the relationship between figures. Though there is no
special magic in ratio analyses, many prefer to base conclusions on ratios as
they find them highly useful for making judgments more easily.
Liquidity Ratios
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Profitability Ratios
SIGNIFICANCE OF TOOLS
The horizontal can be used to compare the current years figures with the last
one. It will help to find the actual position at which the company is standing as
compared to the last year. The formula for horizontal analysis is given above.
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company is managing its assets. Debt management ratios measure the extent
to which the company is financed with debt; and the companys ability to meet
its interest and other fixed obligations. Profitability ratios show the combined
effects of liquidity, asset management and debt management on operating
results.
Liquidity Ratios
Interpretation:
The firm net working capital is calculated by subtracting total current liabilities
from the total assets. These figures are not useful for comparing the
performance of different firms. But it is quite useful for internal control.
b. Current Ratio.
Current Assets
Current Liabilities
2006:
3,414,222,000
2,312,224,000
= 1.47
2007:
4,837,402,000
1,965,381,000
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= 2.46
Interpretation:
The current ratio is one of the most commonly sited financial ratios, measures
the firms ability to meet its short-term obligations. A current ratio of 2.0 is
occasionally cited as acceptable, but acceptability of the value depends on
the industry in which a firm operates.
Current Liabilities
2006:
3,414,222,000 1647173000
2,312,224,000
=.764
2007:
4,837,402,000 2206191000
1,965,381,000
=1.34
Interpretation:
The quick ratio is similar to the current ratio except that it excludes
inventory. It tells that how much the liquid assets can finance the current
liabilities. A quick ratio of 1.0 or greater is occasionally recommended, but as
in case with the current ratio, an acceptable value depends largely on the
industry.
Training Program
Activity Ratios.
a. Inventory Turnover.
Cost of Goods Sold
Inventory
2006:
6551995000
1647173000
= 3.98
2007:
7829362000
2206191000
= 3.55
Interpretation:
Inventory turnover of the company is reduced slightly over the last financial
years and this fact is mainly due to higher production figures with increase of
Cost of Goods sold.
2006:
821160000
9027907000/180
=16.37 days
Training Program
2007:
1288928000
10539995000/180
=22 days
Interpretation:
Although average collection period of the company has risen by six day, this is mainly
because of higher volume of sales in year 2007.
c. Total Assets Turnover.
Sales
Total Assets
2006:
9027907000
22673476000
= .399
2007:
10539995000
33438443000
= .315
Interpretation:
Although total assets turnover ratio has declined over the last financial years,
it is mainly so because sales have risen but not to the extent to meet the
assets acquired by the company in year 2006 to finance Bulleh-Shah Paper
Mill Project.
Training Program
Debt Ratios.
a. Debt Ratio.
Total Liabilities
Total Assets
2006:
9000679000
22673476000
= 0.396
2007:
15267671000
33438443000
= 0.456
Interpretation:
Debt Ratio has increased over last years. This is mainly so because the Bulleh-Shah
Paper Mill Project is financed by the company through loans.
Training Program
Interest
757613000
2006:
78909000
= 9.60
587598000
2007:
367378000
= 1.60
Interpretation:
Although times interest earned ratio has fallen in last years mainly because of
reduction of operational profits, it has declined in 2007 because of cost of
loans to finance Bulleh-Shah Paper Mill Project.
Profitability Ratios.
1294604000
X 100
9027907000
= 14.34
2007:
1199273000
X 100
10539995000
Training Program
= 11.37
Interpretation:
Although GP margin has fallen significantly over last years, sales of the
company have also risen in the same period. However cost of goods sold rise
significantly in year 2007 which causes the reduction in GP-Margin.
Operating Profit
X 100
Sales
2006:
757613000
X 100
9027907000
=8.39
2007:
587598000
X 100
10539995000
= 5.57
Interpretation:
Although OP margin has fallen in last years, it declined in year 2007 mainly
because of higher selling and administrative expenses which were necessary
to gain higher sales in the same period.
6100780000
Training Program
X 100
9027907000
=67.57
2007:
4325948000
X 100
10539995000
=41.04
Interpretation:
We can see clearly that Net Profit margin has declined in last years but this
is mainly so because of increase in cost of sales and debts taken by the
company in year 2007.
2006:
6100780000
698795000
= 8.73
2007:
4325948000
733735000
= 5.90
Interpretation:
It can be observed that earning per share has fallen in last years because of
decline in profits. EPS declined in 2007 mainly because of issuance of shares
to finance Bulleh-Shah paper Mill Project.
Training Program
d. Return On Assets.
2006:
X 100
22673476000
= 26.91
4325948000
2007:
X 100
33438443000
= 12.94
Interpretation:
It can be observed that Return on Assets has fallen over last year and this is
mainly because of the fact that total assets of the company also increased
mainly to support the rise in production and to support the company earn
profit through increased sales.
e. Return On Equity.
2006:
6100780000
X100
7571131000
= 80.58
Training Program
2007:
4325948000
X100
13843975000
= 31.24
Interpretation:
Training Program
PACKAGES LIMITED
VERTICAL ANALYSIS OF BALANCE SHEETS
Packages Limited
Vertical Analysis Of Balance Sheet
2007
%
2006
%
2.19
39.21
12.94
3.08
30.31
26.91
NON-CURRENT LIABILITIES
Long-term finances - Secured
Deferred liabilities
36.92
2.86
26.46
3.04
0.004
1.20
4.68
5.65
4.546
100
100
CURRENT LIABILITIES
Current portion of liabilities against assets subject to
finance lease
Finances under mark up arrangement - secured
Trade and Other Payables
TOTAL
Training Program
2007
%
2006
%
ASSETS
NON CURRENT ASSETS
Property, plant and equipment
30.99
13.54
Intangible assets
0.001
0.01
Investment property
0.08
0.06
0.008
23.33
44.73
Investment
30.14
25.47
0.73
0.86
Retirement benefits
0.26
0.31
2.14
2.14
Stock-in-trade
6.60
7.26
3.85
Trade debts
Loans, advances, deposits, prepayments and other
1.58
receivables
0.30
Cash and bank balances
3.62
100
100
CURRENT ASSETS
TOTAL
1.56
0.47
Training Program
Evaluation
In the vertical analysis oh the balance sheet, total assets are taken, as base
and percentages of other balance sheet items to the total assets is
determined. On the liabilities and capital side of the balance sheet reserves
contribute as a major portion to this side. In the non-current liabilities section
long-term finances are the major contributor. This means that company is not
paying to its creditors on regular basis.
On the asset side, property, plant and equipment make a larger portion and
their percentage has been increase as compare to the year 2006. It shows
that company has interested in its fixed assets in the year 2007. Company is
interesting in expanding its business. Capital work in progress and investment
are also the major contribution towards fix assets.
PACKAGES LIMITED
Hailey College of Commerce
Training Program
2007
Net Sales.
2006
2007
2006
Evaluation
9028635 7846599
100%
100%
Better
7829362 6551995
86.72
83.50
Worse
Gross Profit
1199273 1294604
13.28
16.50
Worse
Administration
expenses.
348064
349934
3.86
4.46
Better
Distribution and
marketing expenses.
240357
225587
2.66
2.87
Better
Other operating
expenses
145439
213475
1.61
2.72
Better
Other operating
income
122185
252005
1.35
3.21
Worse
Profit from
Operations
587598
757613
6.51
9.66
Worse
Finance cost.
-367378
-78909
-4.07
-1.01
Worse
Investment income.
4412728 5669136
48.87
72.25
Worse
Other charges.
------
4632948 6347840
51.31
80.90
Worse
Taxation.
-307000
-247060
-3.40
-3.15
Worse
4325948 6100780
47.91
77.75
Worse
EVALUATION
Hailey College of Commerce
Training Program
In the vertical analysis of income statement, sales are taken as base figure
and the percentage of other Income Statement items are determined to the
sales. As cost of goods is the major contributor but it has increase to 3.22 %
as compare to the last year. The cost of goods sold in 2006 was 83.50 % of
the sales and increase in 2007 to 86.72 %. This is not a satisfactory sign for
the company.
This increase in cost of goods has produces an overall decreasing trend in the
remaining items like adm. Expenses, manufacturing cost etc. But financial
charges have increase. Net Profit is 47.91 % of the total sales and it has
decreased as compare to the last year 77.75 %, which is not good for
packages.
PACKAGES LIMITED
HORIZONTAL ANALYSIS OF BALANCE SHEETS
Hailey College of Commerce
Training Program
Equity and Liabilities
(Rupees in thousands)
Share Capital and Reserves
Authorized Capital
150,000,000 shares of Rs.10 each
(2007:150,000,000 shares)
Issued, subscribed and paid up capital
73,373,482 shares of Rs.10 each
(2006:69,879,507)
Reserves
Unappropriated Profit
Non-participatory redeemable capital
(unsecured)
Non-Current Liabilities
Long-term Finances
Deferred Liabilities
Call option obligation
Net Fixed Liabilities
Current Liabilities
Current portion of long-term liabilities
Finances under mark-up arrangementssecured
Other payables- secured
Derivative foreign currency forward
options
Creditors, accrued and other liabilities
Provision for taxation
Dividends
Net Current Liabilities
Contingencies and Commitments
Total Equity and Liabilities
2006
(000)
2007
(000)
2006
%
2007
%
%Age
Change
1,000,000
1,500,000
100
150
50
698,795
733,735
100
105
5.0
6,872,336
6,101,666
13,672,797
------
13,110,240
4,326,797
18,170,772
------
100
100
100
190.77
70.912
132.9
90.8
-29.1
32.9
6,000,000
688,455
-----6,688,455
12,346,500
955,790
----13,302,290
100
100
205.78
138.83
105.8
38.8
100
198.88
98.9
851
1,280,857
---401,019
100
100
0
31.309
-100
-68.7
-----------
1,564,362
------
100
1,030,516
-----------2,312,224
-----22,673,476
---------------------1,965,381
100
-100
100
85
-15.0
33,438,443
100
147.48
47.5
2006
(%)
2007
(%)
%Age
Change
100
100
337.38 237.38
14.34 -85.66
Assets
(Rupees in thousands)
Non-current Assets
Property, plant and equipment
2006
(000)
2007
(000)
3,071,115
10,361,253
Intangible Assets
2,532
363
Training Program
Investment property
Assets subject to financial lease
Capital work-in-progress
Investments
Long-term loans and deposits
Retirement and other benefits
Net Fixed Assets
Current Assets
Stores and spares
Stock-in-trade
Trade Debts
Investments
Loans, advances, deposits,
prepayments and other receivables.
14,423
1,901
10,143,195
5,775,665
180,618
69,805
19,259,254
26,055
----7,800,683
10,080,259
244,166
88,262
28,601,041
100
100
100
100
100
100
100
180.65 80.65
485,665
1,647,173
821,160
------353,521
715,840
2,206,191
1,288,928
-----525,421
100
100
100
147.39 47.39
133.94 33.94
156.96 56.96
106,703
3,414,222
22,673,476
101,821
4,837,402
33,438,443
100
100
100
100
148.63
95.42
141.68
147.48
76.91
174.53
135.18
126.44
148.51
-23.09
74.53
35.18
26.44
48.51
48.63
-4.58
41.68
47.48
Evaluation
In the horizontal analysis the companys performance is not satisfactory
though its sales increase by 15% but also Its CGS increase by 19% which is
no a positive result for the company and reduces its Gross Profit. The
company reduces its administrative expenses but increases distribution
expenses. So, the company shows poor management of expenses which
ultimately cause to reduce profit with almost 30% as compared to the previous
year.
PACKAGES LIMITED
HORIZONTAL ANALYSIS OF PROFIT AND LOSS ACCOUNT
Description
Net Sales.
2006
2007
2006
2007
(000)
(000)
%Age
Change
7846599
9028635
100%
115.06
15.06
Training Program
Cost of Goods
Sold.
6551995
7829362
100%
119.50
19.50
Gross Profit
1294604
1199273
100%
92.64
-7.36
Administration
expenses.
349934
348064
100%
99.47
-0.53
Distribution and
marketing
expenses.
225587
240357
100%
106.55
6.55
Other operating
expenses
213475
145439
100%
68.13
-31.87
Other operating
income
252005
122185
100%
48.49
-51.51
Profit from
Operations
757613
587598
100%
77.56
-22.44
Finance cost.
-78909
-367378
100%
465.57
365.57
Investment
income.
5669136
4412728
100%
77.84
-22.16
Other charges.
------
Profit before
Tax
6347840
4632948
100%
72.98
-27.02
Taxation.
-247060
-307000
100%
124.26
24.26
6100780
4325948
100%
70.91
-29.09
Dilemmas
Today the biggest and primary problem to packages is the arm race,
environment decay and education system. Peoples thinking is
dominated by the short-term events. So instead of investing in long run
projects the company must help the market in reducing the tension
being prevailed by the fixation of events.
Training Program
The growing mushroom industry, which attracts the price (not quality)
conscious customers, is a threat for Packages Limited.
Packages Limited has backward linkages. It has its own Paper & Board
Mill, which is producing all types of paper & board for packaging.
Training Program
It is having the best positive brand image & reputation for quality
packaging products in Pakistan.
Due to mass production the cost is reduced and the company enjoys
economies of scales.
DRAW BACKS
Training Program
When the sales team goes out on customer's visits, there is no one in
the department, who in his absence, may deal with his allotted
customers.
CONCLUSION
Training Program
The company is performing very well for the financial point of view.
They make tissue for the consumption in Pakistan thicker or with more
gram mage (15174) due to the people demand according to its uses in
the extreme weathers of Pakistan.
Packages Limited mostly deals in industrial goods for which they never
advertise.
Training Program
All the products of Packages are doing fine in the market, so for the
only product failed was "Cling Wrap". It failed due to limited demand in
the market and high cost of production due to smaller production lots.
The imported cling wrap was cheaper.
The prices of the products of Packages are higher than the competitors
due to the fine quality, it provides.
It can also be concluded that Packages should reduce the prices of its
tissues.
Since the people are getting easy going day by day so the future of
Packages Limited is very bright as it makes disposable products.
References
History
Annual Reports
Training Program
Culture
Internal Audit
Mr.Azhar
Personal Observation
www.packages.com.pk
Balance Sheet for the two financial years 2006 and 2007 ending on
Dec 31st
(Figures in Thousands of Rupees)
Training Program
2006
2007
1,500,000
733,735
13,110,240
6,101,666
13,672,797
4,326,797
18,170,772
------
------
6,000,000
688,455
-----6,688,455
12,346,500
955,790
----13,302,290
851
----
1,280,857
401,019
-----------
1,564,362
------
1,030,516
--------
-----------2,312,224
------
--------------1,965,381
22,673,476
33,438,443
Non-Current Liabilities
Long-term Finances
Deferred Liabilities
Call option obligation
Current Liabilities
Current portion of longterm liabilities
Finances under mark-up
arrangements-secured
Other payables- secured
Derivative foreign currency
forward options
Creditors, accrued and other
liabilities
Provision for taxation
Dividends
Contingencies and
Commitments
Balance Sheet for the two financial years 2006 and 2007 ending on
Dec 31st
(Figures in Thousands of Rupees)
Training Program
Assets
(Rupees in thousands)
2006
2007
3,071,115
10,361,253
Intangible Assets
2,532
363
Investment property
Assets subject to financial lease
Capital work-in-progress
14,423
1,901
10,143,195
5,775,665
180,618
69,805
19,259,254
26,055
----7,800,683
10,080,259
244,166
88,262
28,601,041
485,665
1,647,173
821,160
-------
715,840
2,206,191
1,288,928
------
353,521
525,421
106,703
3,414,222
101,821
4,837,402
Total Assets
22,673,476
33,438,443
Non-current Assets
Property, plant and equipment
Investments
Long-term loans and deposits
Retirement and other benefits
Current Assets
Profit and Loss Accounts for the two financial year 2006 and 2007
ending on Dec 31st
Training Program
2006
2007
Local Sales
8869087
10365224
Export Sales
158820
9027907
1172430
174771
10539995
1501230
8878
1187308
7846599
(6551995)
1294604
(349934)
10130
1511360
9028635
(7829362)
1199273
(348064)
(225587)
(240357)
(213475)
(145439)
252005
122185
Profit from
Operations
757613
587598
Finance cost.
Investment income.
Other charges.
(78909)
5669136
6347840
(247060)
6100780
(367378)
4412728
-----4632948
(307000)
4325948
Gross Profit
Administration
expenses.
Distribution and
marketing expenses.
Other operating
expenses
Other operating
income
Taxation.
Concluding remarks
Training Program
Gross sales to total sales of the company were increased in 2007. Finance
reached 7.99% in 2007. Gross profit of the company was 16.50% in 2006 but
now it has reduced to 13.28% in 2007. Other operating income was 9.96% in
2006 but now it is decreased to 6.51% in 2007. . Its profit before tax was
80.90% in 2006 and decreased to 51.31% in the year 2007. Net income to
total sales was 77.75% and in 2006 it is decreased to 47.91% which indicates
the decline of the company.
The overall performance of the company is not satisfactory.