INTERNSHIP REPORT ON PTC

8/11/2019 INTERNSHIP REPORT ON PTC

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Chapter 7 Findings and

Recommendations

PREFACE

Assignments are short approach towards practical work. In our course of MBA assignments are

essential part of our subject completion. To full fill the requirement we got assignment in our

subject INV!TMNT ANA"#!I! on $Anal%sis of securit% in&estment'.

To complete the task I selected (akistan Tobacco )ompan% *(T)+ common stock shares. As I was

internee there so its eas% to me do work on it because I ha&e a lot of information about (T).

It,s of all I &isit In&est )ap brokerage house to get information about how to open an account with

them. I stud% Annual report of (T) and get rele&ant data from that. Internet online data also helps

me in m% assignment.

I tried m% best to complete the task .In end I thanks to Almight% -od who gi&e me confidence to

do m% job efficientl% and effecti&el% and I also grateful to Miss/ !aroosh A0i0 who guide us in

difficult problems. Thanks

P A K I S T A N T O B A C C O

C O M P A N Y

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Recommendations

PAKISTAN TOBACCO

COMPANY

An Analysis & Evaluation

Of

Companys Op!ations

INSTIT"TE OF MANA#EMENT ST"$IES

"NI%ERSITY OF PESA'AR

Sssion( )***+,--,


C O M P A N Y

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Recommendations

PAKISTAN TOBACCO

COMPANY

An Analysis & Evaluation

Of

Companys Op!ations

Int!ns.ip !po!t su/mitt0 to t. Institut of Mana1mnt

Stu0is

In pa!tial fulfillmnt of t. !2ui!mnts fo! t.

Ba3.lo!s $1! of Businss A0minist!ation

4"NE ,--5


C O M P A N Y

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Recommendations

INSTIT"TE OF MANA#EMENT ST"$IES

Internship Report OnPAKISTAN TOBACCO COMPANY

Snio! Sup!viso!(

Si1natu!

Nam

$si1nation

O!1ani6ation

$at

4unio! Sup!viso!(

Si1natu!

Nam

$si1nation

O!1ani6ation

$at

7IST OF ACRONYMS

A56 Akkora 5hattak 6actor%

A78 Account 8ecei&able

A7( Account (a%able


C O M P A N Y

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Recommendations

BM! Bailing Material !tore

BAT British American tobacco

B!9 Business !upport 9fficer

)M: )igarette Manufacturing :epartment)B) )arbonated Board )ontainer

)) )arbon )op%

)BA )ollecti&e Bargaining Agents

)(M; Man )igarette (er ;our

)!A )entral !tock A&erage

:A) :ark Air )ured

:("V :eferred (urchase "eaf Vouchers

)B !( >napprised Tobacco !orter

?( ?hite (atta

?M! ?rapping Material !tore


C O M P A N Y

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Recommendations

!akistan Tobacco "ompany is determined to furnish its

customers with high )uality products and excellent

services.1.2 Purpose of the study

The study is intended to analyze !akistan Tobacco

"ompany in terms of its strong and weak points and other

factors affecting the organization either positively or

negatively. ,pecial emphasis is placed on financial

position and given projects+ which was the main focus of

work during the internship period.

The purpose of the study and report is to fulfill the

re)uirements of 'achelors in 'usiness (dministration at

Institute of Management ,tudies -niversity of !eshawar.

1.3 Scope of the study

The study is applicable only to !akistan Tobacco

"ompany+ (kkora hattak factory.

It encompasses the operations of different departments+

projects carried out during the study+ analysis and

recommendations.

1.3.1 Limitations of the study

The span of the operation of !akistan Tobacco "ompany is

too large to be covered completely in two months. TimeConstraints+ thus+ constitutes a major constraint for this

report.

1.3.2 Delimitation of the study

This report is useful for the students of management in

general and for those interested in finance particular.


C O M P A N Y

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Recommendations

!akistan Tobacco "ompany and other interested parties

concerned in financial decisionmaking can use it as

guideline.1.4 Methodology of the study

The study utilizes primary and secondary data.

1.4.1 Primary Data

The firsthand data+ .i.e. the data collected for the first time

is called primary data. !rimary data for this report was

collected through unstructured interview and participative

and semi participative observation.

1.4.2 Secondary Data

,econdary data is the one collected from other sources

and already processed through mathematical and statistic

techni)ues. ,econdary sources for the study are official

!akistan Tobacco "ompany and '(T journals and

websites.

1. Scheme of the !eportThe report consists of following sections.

1..1 Section "

,ection I is aimed at providing a perceptual framework for

the report. It includes background of the study+ purpose+


C O M P A N Y

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Recommendations

scope+ limitation+ delimitations+ methodology and scheme

of the study.

1..2 Section "",ection II gives an overall review of !akistan Tobacco

"ompany and '(T. This section also covers the objectives+

functions and processes of departments.

1..3 Section """

,ection three is based on analysis of !akistan Tobacco

"ompany (kkora in general /,0*T1 and financial analysis

project carried out during internship in particular.

1..4 Section "#

,ection I2 comprises of findings based on the analysis+ its

recommendations and implementation plan.

)hapter D


C O M P A N Y

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Recommendations

5444+ Imperial Tobacco "ompany of "anada became a

subsidiary+ following the restructuring of Imasco 7imited.

In ,--)9 t. #!oup announ30 ma=o! invstmnts in Sout. Ko!a9 Tu!8y9 %itnam9 Ni1!ia

an0 E1ypt; t.y :ill / invstin1 "S -- million in t.s ma!8ts ov! t. n>t f: ya!s;

In ,--,9 :it. a 3ntu!ys >p!in3 in int!national to/a33o ma!8ts an0 >p!tis in all

asp3ts of t. /usinss9 B!itis. Am!i3an To/a33o is fa3in1 t. futu! :it. 3onfi0n3;

5.5 '(T at :lance

T. /at is t. :o!l0 most int!national to/a33o 1!oup; It .as /usinss in )- 3ount!is :it.

a ma!8t s.a! of );) p!3nt; It .as ov! 5-- /!an0s in its po!tfolio an0 ma8s 3i1a!tt

3.osn /y on in svn of :o!l0 on /illion a0ult smo8!s; It .ol0s st!on1 position in a3. of

its !1ion an0 .as la0!s.ip in mo! t.an ma!8ts; T. 1!oup .as ov! - fa3to!is in @

3ount!is9 p!o3ssin1 som - million 8ilos of laf an0 p!o0u3in1 ov! -- /illion 3i1a!tt a

ya!; T. 3ompany in3lu00 asso3iat0 3ompanis mployin1 ov! -9--- popl :o!l0:i0;

D.E Major Brands

'(T has particular emphasis on its four international drive

brands.

D.E. "uck% !trike

It is t. /st sllin1 int!national /!an0 an0 t. p!mi! 1lo/al /!an0 fo! t. 8y AS" 5-

3at1o!y; Its volum in ,--) in3!as0 /y a !3o!0 @G s.o:in1 1!o:t. in 8y int!national

ma!8ts su3. as F!an39 #!many an0 Spain;

D.E.D 5ent

ent is the premier freestanding lights brand and its role is

to strengthen the portfolio in the critical premium+ lights

and (,- @4 segments. The original % markets that

relaunched ent in #$$$. />ussia+ "hile+ >omania and

3ong ong1 has show impressive volume growth up over

A4B in 544#.

D.E.E :unhill/

In ,--) full0 /y its outstan0in1 p!fo!man3 in Sout. Ko!a9 Malaysia an0 Tai:an9

$un.ill a3.iv0 t. .i1.st v! volum in t. .isto!y of t. /!an0 :it. )@G 1!o:t. ov!

,---;


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Recommendations

D.F (akistan Tobacco )ompan%

Pa8istan To/a33o Company :as sta/lis.0 in )*@; It too8 ov! t. /usinss of t. Imp!ial

To/a33o Company HIn0ia9 op!ational sin3 )*,* in t. t!!ito!y t.at fo!m0 Pa8istan9

Pa8istan To/a33o Company :as t. fi!st multinational to st+up /usinss in Pa8istan; T.

3ompany is a mm/! of t. B!itis. Am!i3an To/a33o :.i3. mploys ov! )--9--- popl

op!atin1 f!om - 3ount!is;

Manufa3tu!in1 op!ations 3ommn30 f!om a small pilot p!o0u3tion plant st up in a

:a!.ous in Ka!a3.i Po!t :it. mont.ly p!o0u3tion of 5- million 3i1a!tts a1ainst sals of

)-+t. 1ap /in1 ma0 up /y impo!ts; Fi!st full+fl010 fa3to!y :as sta/lis.0 in )* at

4.lum; T. sam ya! Pa8istan To/a33o Company /3am a pu/li3 limit0 3ompany;

At t. tim of /i!t. Pa8istan in )*@9 all to/a33o :as impo!t0 into t. 3ount!y; In )*,9 a0vlopmnt p!o=3t fo! to/a33o laf :as initial0 in t. No!t. 'st F!onti! P!ovin3

HN;';F;P;9 :.i3. p!o1!ss0 !api0ly; A !0!yin1 plant :as st up at A88o!a K.atta8 an0

3ultivation of %i!1inia To/a33o Commn30; Aft! t. /i!t. of Ban1la0s. an0 3ons2untly9

:it.0!a:al of $a33a & C.itta1on1 fa3to!is9 a n: 3i1a!tt fa3to!y :as st up at A8o!a

K.atta8 HN;';F;P; in )* to mt t. in3!asin1 0man09 Pa8istan To/a33o Companys

=ou!ny on t. !oa0 p!o1!ss an0 p!osp!ity 3ontinus :it. som ma=o! n:

0vlopmntJinvstmnt p!o=3ts ov! t. last f: ya!s;

!rojects commenced areC


C O M P A N Y

@1

N o . 1

F i r s t C h o i c e

F o r E v e r y O n e

T r a n s f o r m P T C t o p e r fo r m w i t h t h e

S p e e d , e x i i ! i ty a n d e n t e r p r i s i n " s p r i te o f

a n i n n o v a t iv e , c o n s . # f o c $ s e d c o m p a n y

% e " a i n v o ! $ m e & v a ! $ e ! e a d e r s h i p y p o s i t i o n i n "

v i a ! e r a n d s i n a ! ! c o n s $ m e r # r e ! e v a n t s e " m e n t s

' r i v e w ( c s t a n d a r d s i n p r o d $ c t s , p r o c e s s e s & s e r v i c e st h r o $ " h p a s s i o n a t e , s ) i ! ! e d a n d c o n * d e n t p e o p ! e

+i s

ion

,is

sio

n

)e

y

O

-ecti

ve

s

To

tal

$lig

nm

en

t


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Recommendations

Mo0!ni6ation of #7T H!0!yin1 plant;

"p1!a0in1 of P!ima!y an0 S3on0a!y manufa3tu!in1 fa3ilitis at A8o!a K.atta8 an0

4.lum fa3to!is;

T. a32uisition of mo0!n .i1.+sp0 7O#AJMA 3i1a!tt ma8in1 ma3.ins;

Pa8istan To/a33o Company9 /y spa!.a0in1 t. 3ampai1n0 fo! mo0!n a1!i3ultu!al an0

in0ust!ial p!a3ti3s9 .as play0 an >t!mly si1nifi3ant !ol in t. p!o1!ss an0

0vlopmnt of t. 3ount!y; Pa8istan To/a33o Company is t. fi!st fo!i1n invstmnt in

Pa8istan to pion! t. manufa3tu! of 3i1a!tt an0 3ultivation of %i!1inia to/a33o in t.

3ount!y; T.!ou1. t.i! a0van30 t3.ni2us an0 fa!min1 p!a3ti3s9 Pa8istan no: !an8s

t.i!0 in Asia in t!ms of to/a33o yil0s K1sJa;

Pa8istan To/a33o Company is st!on1ly 3ommitt0 to /in1 a 1oo0 3o!po!at 3iti6n; Ov!

many ya!s : .av /n(

$onatin1 to a num/! of 0s!vin1 3auss;

E0u3atin1 1!o:!s in t. latst t3.ni2us & p!omotin1 mo0!n t3.nolo1y in

a1!i3ultu!9 :.i3. .as /nfit0 not only to/a33o 1!o:!s /ut also all a1!i3ultu!ists in

t. !1ion;

Plantin1 t!s t.!ou1. ou! A fo!station p!o1!am;

Sponso!in1 an0 p!omotin1 spo!ts a3tivitis;

Runnin1 f! mo/il 0ispnsa!is;

Playin1 a si1nifi3ant !ol in t. !a0i3ation of poppy 3ultivation /y p!ovi0in1 alt!nat

in3om sou!3s to t. in.a/itants of an3st!al poppy 3ultivation a!as;

2. Production Capacity of $%%ora &hatta% 'actory

(kkora hattak ?actory produces cigarettes according to

the re)uirement of the !T" and markets. !roduction of

(? is increasing year after year. ear wise production

schedule is as under

=(> 0I,= "I:(>=TT=, !>*D-"TI*; *? (? /Table 5.#1

ear !roduction /million1

#$E$#$$4 &+$5@+#A%

#$$4#$$# &+@%&+4%F

#$$##$$5 &+AE&+@5#

#$$5#$$@ E+5%#+#E#


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Recommendations

#$$@#$$% E+%55+%FF

#$$%#$$A E+@#F+55A

#$$A#$$F $+&A4+%&$

#$$F#$$& E+&A&+%$E#$$$$E $+&A4+%&$

#$$E#$$$ ##+##%+%&E

#$$$5444 $+&5$+A$A

5444544# #@+5F#+444

HSou!3( Finan3 0o3umnts of AKF


C O M P A N Y

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Recommendations

Chapter + 3Departmentation

)hapter objecti&es/

To stu0y t. PTC 0pa!tmnts 3on3pts;

To un0!stan0 t. 0pa!tmnts;

Ov!vi: t. st!u3tu!9 fun3tions9 an0 p!o3ss of a3. 0pa!tmnt;

5;) #!n 7af T.!s.in1

7af A!a an0 #7T /ot. p!fo!m som sp3ifi3 fun3tions9 :.i3. a! 3losly9 3onn3t0 :it.

t. /asi3 !a: mat!ial t. To/a33o; On p!fo!ms t. /uyin1 an0 ot.! t. lmnta!y

p!o3ss; As 3la! f!om its nam9 7af A!a :.i3. a! 3omp!is0 of 0pots all ov! t.

to/a33o 1!o:in1 !1ions of N'FP an0 som a!as of Pun=a/; T.s 0pots p!fo!m many

fun3tions fo! t. #7T; T.y fi!st su!vy t. to/a33o 1!o:n in t.at !1ion an0 assi1n t.

2uality 1!a0s to a3. fa!m9 :.i3. is 0on t.!ou1. 3.38in1 t. to/a33o; T. laf tams visit

almost all of t. fa!ms to 8no: t.at :.i3. 1!o:! is 1!o:in1 2uality to/a33o; T.is su!vy

:ill .lp t.m in /uyin1? t. !ason is t.at t.y :ill 8no: t.at :.i3. fa!m! .as t. /stp!o0u3t; '.n t. /uyin1 sason sta!ts t.y :ill sta!t /uyin1 t. to/a33o in li1.t of t.

su!vy an0 t. 3ompany ta!1ts p!ovi00 to t.m; T.y :ill t!y to /uy t. /st to/a33o f!om

a3. 1!o:!; T. limit of /uyin1 f!om on fa!m! o! 1!o:! is ,,-- K1s; T.is limit 3an alt!

a /it 1ivin1 3onsi0!ation to t. 2uality of t. lot; T. 2uality insp3tion is 0on /y t. laf

a!a mana1! :.o assi1ns t. lot its 0u p!i3; T. limit to / assi1n0 to a3. %i!1inia

to/a33o t.s ya!s is 1oin1 in /t:n @- to @5 RupsJK1s; 3annot assi1n lo:! o!

.i1.! p!i3 t.an t.at; T. 1!o:! :.o :ill /!in1 .is to/a33o fo! sal :ill .av to 1t a

3ont!a3t /3aus if t.y 0o not .av any 3ont!a3t t.y 3annot sll it to t. PTC; T. mony

:ill / pai0 to t. laf a!as 0pots :.o :ill t.an 0ist!i/ut t. mony 3o!!3tly to all t.

1!o:!s;


C O M P A N Y

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Recommendations

); FC% HFlu Cu!0 %i!1inia Main

,; $AC H$a!8 Ai! Cu!0

5; 'P H'.it Patta

@; B"R7EY

The kind of tobacco !T" buys the most is the 2irginia+

which is used in all of the brands of "igarettes

manufactures in !T". It is graded in almost seven

categories+ which are from !(# to !(&. These grades

depend on the moisture+ moldiness and the amount of cure

given to the tobacco. If it is too cooked or its uncooked it

will be graded lower and the prime and correctly cured

2irginia will be graded the highest and will fetch higher

price to the tobacco grower. These steps ensure the

)uality+ which !T" claims and this encourage+ the growers

to produce the best )uality.

(fter the buying is over the depots will send the purchased

tobacco for processing to !T". 0hen the tobacco enters

the gates of !T" the function of :7T starts. (s the truck

enters the gate of !T" which is known as the marshalling

area of the :7T the clerk will prepare the 7DAF which is the

first document which contains the complete description of

every thing. (fter that the :7T )uality team checks the

)uality of tobacco and than >e grade and >e weight the

tobacco. It is than stored in the -n prized tobacco godown.

The -n prized tobacco is that tobacco which is in raw form

and still to be processed.

0hen :7T starts processing+ it means that the very first

process of making cigarette starts. In this step the :7T

orders tobacco from the -T, /-n prized Tobacco ,tore1.


C O M P A N Y

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Recommendations

This is the very first part of the :7T operations. It consists

of conveyers. The main plant is supplied through these

different conveyers for different operations. There aredusts units installed in the feeding area+ which are mainly

removed manually.

3.2.1 'irst Conditioning Cylinder

To maintain the re)uired amount of moisture in the tobacco

that is #FB and provide heat to the tobacco for further

processes this cylinder is used. In this cylinder there are

spikes and baffles+ which make the tobacco leaf open for

further processes and without damaging the structure of

the leaf.

3.2.1 Sand !eel

It contains different meshes and reels+ which are there for

the remove any scrape+ or unwanted material from the

tobacco. It8s the tiny wholes in the reel allows the scrape to

be removed out.

3.2.1 Con,eyer

The main purpose of this conveyer is to convey the

tobacco to the conditioning cylinders.

3.2.2 Second Conditioning Cylinder

To condition the tobacco to the re)uired limit it is donetrough this cylinder. Mainly it keeps the moisture /which is

a very important factor in the whole life chain of tobacco1

to the re)uired limit+ which is normally #EB. There are

sensory panels fitted in this cylinder+ which determine the

amount of moisture in the whole lot.


C O M P A N Y

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Recommendations

3.2.3 $uto 'eed

The (uto ?eed is used to provide even number of tobacco

to the threshers so that the volume of supply remainsconstant.

3.2.4 Threshers

It is the most important of all the :7T processes. It8s the

place where the lamina is separated from the stem. In :7T

the whole threshing process is divided into five major

stages after these stages the tobacco is assume to be

separated completely into two parts.

These stages are as followingC

#. ?irst ,tage C A4B

5. ,econd ,tage C 54B

@. Third ,tage C #4B

%. ?ourth ,tage C #4B

A. ?ifth ,tage C #4B

3.2. Multi Separator or Classifier

It blows hot air into the lamina from below and only lamina

parts are able to flat in air where they are sucked up by an

air pump+ which is located on top of the "lassifier.

3.2.. Sha%er

It selects the stem parts only3.2.. Suc%er

It sucks only lamina parts

3.2.. Dryer

The drier has been divided into three main zones+ which

areC


C O M P A N Y

C1


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Recommendations

#. Dryer


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Recommendations

P!(CSS 'L(/ (' )LT


C O M P A N Y

C


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Recommendations

(Source: Database GLT) Figure 3.2


C O M P A N Y


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Recommendations

3.3 Qualit Co!trol i! GLT

Hualit% means production according to the predetermined standards. The qualit% control :epartment of -"T 6actor%

maintains the qualit% of the pri0ed "eaf. 6or this purpose it takes tobacco from different points in the -"T factor%. This

tobacco is tested and the Testresults are compared against the standard.

The following tests are conducted in the Hualit% )ontrol section of the -"T 6actor%/

(article !i0e :istribution Test *(!:+/ To determine the ratios of different "amina si0es after threshing in -"T at

different stages.

Moistu! Tst( To tst t. moistu! of t. To/a33o at 0iff!nt sta1s;

San0 $t!mination Tst( To 0t!min t. p!3nta1 of san0 in #!n 7af an0 final

p!o0u3t;

Fo!i1n Matt! Tst( Ev!y t.in1 in t. to/a33o ot.! t.an To/a33o itslf an0 san0 is

3all0 Fo!i1n Matt!; Fo!i1n Matt! Tst is 3on0u3t0 to 0t!min t. num/! of

pi3s of Fo!i1n Matt! in t. to/a33o;

Stm Si6in1 Tst( T. no!mal si6 of Stm !an1s f!om );L to ,L; T.is tst is 3on0u3t0

to 0t!min t.at t. stm .as /n 3ut in t. !i1.t si6;

7amina on Stm( To 0t!min t. si6 of lamina on t. Stm;


C O M P A N Y

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Recommendations

P!"M$!0 M$*'$CT!"*) DP$!TM*T

(!)$*()!$M

! r i m a r y M a n a g e r

T e a m 7 e a d e r 9 i n n a h / " o n d i t i o n i n g 1

* f f i c e " l e r k a n d ! e o n

" A : o d o w n

M a s t e r T e c h n i c i a n

" o n d i t i o n i n g T e a m

T e a m 7 e a d e r ; i s h t e r / " u t t i n g H D r y i n g 1

> i p p i n g , e c t i o n

M a s t e r T e c h n i c i a n

" u t t i n g H D r y i n g T e a m

T e a m 7 e a d e r / M a i n t e n a n c e 1

M a i n t e n a n c e , u p e r v i s o r

M a i n t e n a n c e T e a m

HSou!3( $ata/as R$ Fi1u! 5;5


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Recommendations

E.F (rimar% Manufacturing :epartment

The process of manufacturing cigarettes starts from !MD.

In !MD there is a 7eaf >eception >oom /7>>1 wheretobacco comes from excise bounded godown"8A.

In 7RR9 t. to/a33o !3iv0 f!om C is !+:i1.0 so t.at any 3.an1 in t. :i1.t of

to/a33o t.at mi1.t .av /n 3aus0 0u to a/so!ption of moistu! 0u!in1 its stay in 1o0o:n

may / a0=ust0; T. >3is 0uty is t.n pai0 on t.at amount of to/a33o; C 0liv!s

to/a33o to 7RR a33o!0in1 to t. !2uisition !3iv0;

Aft! p.ysi3al insp3tion in t. 7RR9 t. lamina an0 stm a! issu0 to MJC a33o!0in1 to its

!2ui!mnts; In MJC t.y a! p!o3ss0 on t:o spa!at plants;

E.F. "amina

The bales are loaded on a conveyer and taken for cutting to

bale slicer. =ach bale /is cut into three pieces. Then casing

is used for moisture retention and addition of sugars

=ach brand has its own formula for the preparation of

casing. These chemicals include :ralantor+ ookie+ and

Durlock etc

(fter casing+ the lamina is kept for 5 hour in the blending

bin+ and then it is passed through a conveyer to the airlift

where the re)uired form of tobacco is flown upwards and

then taken through the sieve conveyer to >c% cutter.

(fter cutting the lamina is passed through a dryer. (fter

drying it is transferred to ?! ,ilos in the "ut Tobacco store.

3.4.2 StemThe stem received from 7>> is transferred though sieve

conveyer to ,tem airlifts where the ?oreign Matter is

separated. Then it is taken to :?! /:ravity ?eeding !ipe1

for conditioning. Then it is kept in the blending bin for @

hours. ?rom blinding bin stem goes in to T cutter. 0here


C O M P A N Y

F


31/106


32/106


Recommendations

(!)$*()!$M (' SMD SC(*D$!0 M$*'$CT!"*)

DP$!TM*T

? a c t o r y M a n a g e r

! ! , M

! r o d u c t i o nM a n a g e r '

! r o d u c t i o nM a n a g e r "

! r o d u c t i o nM a n a g e r (

! r o d u c t i o nM a n a g e r D

G ( M

I J " M a k i n g I J " ! a c k i n g

/,ourceC Database 3>D1 ?igure @.%


C O M P A N Y

3


33/106


Recommendations

3. Secondary Manufacturing Department

,MD is the department in which the actual manufacturing

of the cigarette takes place. Two types of materials areused in the manufacturing process.

Tobacco

0rapping Material

Tobacco is issued to the ,MD through "T,. Tobacco is

sucked through suction pipes to the ,MD. The tobacco for

each blend of cigarette is different and stored in "T,+

which are colorcoded. =ach color represents different

blends of tobacco. The different brands of cigarettes

manufactured in ,MD are :old ?lake /,K1 "apstan /(1+

0ills /;T1+ =mbassy ings /"31+ =mbassy ?ilter /"71+ wills

ings /'!1+ ;o. F.

The wrapping material are issued to ,MD from the material

issued from MMD include.

3..1 'ilter !od Manufacturing

#. (cetate Tow

5. Till box

@. :um or (dhesive

%. !lug >ap

3..2 Pac%ing Material

#. ,hell ,lides

5. ?lats

@. Inner "ollor 'oard

%. (luminum ?oil

A. (dhesive


C O M P A N Y

4


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35/106


Recommendations

started working+ is the 7*:(+ which is capable of making

F444 sticksJminute. The company has already bought a

new version of M(>E+ which is M(>$ but that is notinstalled yet it has the capability of making %444

sticksJminute. The company has a valiant plan of phasing

out the old MarkE and to introduce all new Mark$ in its

place. This is a great step in reduction of variable cost.

The filter rod department prepares the filter rod. The

material department supplies the raw materials+ which are

mainly acetate Tow+ plug warp+ till box+ hot melt and

adhesives. The filter rod is manufactured in two size

regulations+ one is a A%mm and other is FFmm. The filter

rod thence produced is sent to the ,MD through filter rod

treys. There is an addition to the makers+ which then adds

the filter rod with cigarettes.

0hen cigarettes are made they are sent to packers+ which

packs them in the packets and send them for further

processes. These are also two sizes of packets and two

kinds of packer machines. 37!s /3igh 7id !ackers1+ which

are+ total seven in numbers and each packs 5A4

packetsJminute. The 37!s comes with different models and

different work capacity. The likes of #54+ #E4 and 5A4 arethere. There are separate machines for the packing of the

shell slides packs+ which are D-!7=Ks. These are total

seven in number and they pack 5%4 packs per minute.

(fter the cigarettes are packed in packets they are than

send to the percales that packs them in shape of outers.


C O M P A N Y

@


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Recommendations

The outers thence prepared are packed into "'"s. They

are then taped and air tightened and sent to the shipping

godown.


C O M P A N Y

DC


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38/106


Recommendations

In ,tandard )uality we take into consideration the normal

amount of wastages+ which are bound to take place as a

matter of normal routine. ,uch wastages are subtractedfrom the perfect )uantity in order to get the standard

)uantity.

3..4 $ctual used

It is the actual amount of wastage that has occurred in the

production.

3.. Calculation of 5astages

In order to calculate wastages the following procedure is

used in the ,MD.

*pening 'alance

(dd C >eceipts

7ess C

The difference between this net usage and standard

)uantity gives us the wastages. If the amount of wastage is

less than the standard )uantity it shows that the process isworking efficiently. 'ut if the amount of wastages is greater

than the standard )uantity it means that there is some

problem in the manufacturing process.

3.7 8(M Statement


C O M P A N Y

DD


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Recommendations

'*M stands from 'ill of Material. It is a statement+ which

shows the perfect re)uirement+ the standard )uantity and

the percentage of wastages of each item used in themanufacturing process other than tobacco.

The '*M statement has three items

#. The Description

5. The -nit

@. The Guality

The description shows the name of material+ the unit

shows that which unit is used for the item+ where as the

)uality shows the amount of materials. ( specimen of the

'*M statement is shown belowC

Ta9le 3.1

Description -nit ,td ,crap B !erfect

=mboss ?ilter Million #444 4 #444

=mbassy ,hells Million #4#.##5 #.#4 #44.444

=mbassy slides Million #45.@45 5.5A #44.44=nd 7abels Million E.@@@ % E.444

!!! "7 >ed @4A x #5A4 >ed #.5%4 %.A4 #.#E%

/,ourceC Guality "ontrol ,ection1

The '*M accuracy is calculated by the following formula.

'*M (ccuracy B L

3." Qualit #ssura!ce Depart$e!t

T. 1oal of v!y /usinss is to a!n ma>imum p!ofit t.!ou1. t. satisfa3tion of t.

3onsum!s;


40/106


Recommendations

amination of t. n0 p!o0u3ts to fin0 out its

2uality an0 imp!ov it /fo! it !a3.s to t. 3ustom!;


41/106


Recommendations

M$T!"$L M$*$)M*T DP$!TM*T

(!)$*()!$M

? a c t o r y M a t e r i a lM a n a g e r

" o m m e r c i a l * f f i c e r * f f i c e , u p e r v i s o r

, e n i o r * f f i c e( s s i s t a n t

( s s i s t a n t" o m m e r c i a l * f f i c e r

" o m m e r c i a l* f f i c e r

9 u n i o r * f f i c e( s s i s t a n t

, e n i o r * f f i c e( s s i s t a n t

3 e a d , u p e r v i s o r

/,ourceC Database MMD1 ?igure @.A


C O M P A N Y

D2


42/106


43/106


Recommendations

3.11.2 "mported "tems

"igarette !aper

Tipping !aper

Tear off >ibbon

:um or (dhesive

!lug >ap

(cetate Tow

3.11.2 Local "tems

,hells

?lats

(luminum foil

,lides

>eels

There are two types of godown with this store is the

custom boarded godown and the other is noncustom

boarded godown. The arrivals in this department are dually

:> sheeted which means that the correct amount of

inventory in stores is on record.

3.11.3 Shipping Material Store:

(ll the finished goods are brought to this store from here

the goods are dispatched to the market on demand it paysduties and other government levies on #% day deferred

payment scheme. This store is also called excise bonded

warehouse.


C O M P A N Y

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Recommendations

5;), En1in!in1 $pa!tmnt

=ngineering Department is concerned with all the

=ngineering items used in the factory.T. En1in!in1 0pa!tmnt is .a00 /y FPSM HFa3to!y P!o0u3tion & S!vi3s Mana1!;

It p!ovi0s En1in!in1 s!vi3s in t. follo:in1a!as(

)+ Boil! ous;

,+ El3t!i3al si0;

5+ Ai! 3on0itionin1;

@+ %.i3ls;

+ En1in!in1 sto!;

+ 'at! pumps;

+ Tlp.ons;

+ #n!ato!s;

*+ Comp!sso!s

,ome of the above itemsJservices are provided by the

company8s own employees while others through the

contractors registered with the company. The purchase of

the =ngineering itemsJservices is the responsibility of the

=ngineering Department. ( purchase up to >s.5A444 is

recorded in the !etty 9ob 'ook.

Fo! a =o/ !an1in1 f!om Rs;,9 --- to Rs;-9 --- a !3ipt #n+- is p!pa!0; An0 fo! a/ov

-9--- 1n+ an0 a1!mnt on a stamp pap! is p!pa!0; A !3ipt+ #n+) must /

atta3.0 :it. a3. =o/; Fo! a =o/ up to Rs;,9 --- only #n+) is p!pa!0; T. Ma3.in

spa!s a! !3iv0 it.! f!om SPM 7a.o!9 4.lum Fa3to!y o! suppli!s; Fi>0 Assts a!

suppli0 only t.!ou1. SPM9 7a.o! a33o!0in1 to t. in0nt R3iv0 f!om t. 3on3!n0

$pa!tmnt;

The following documents are prepared when an item isbeing purchasedC ,"= /,anction for "apital =xpenditure1C

0hen some "apital item is involved. ,>= /,anction for

>evenue =xpenditure1C 0hen >evenue items are involved.

@.#@ =ngineering ,tore

En1in!in1 sto! 0als only in n1in!in1 itms; In t.is sto!9 t.! a! )9--- itms an0

a3. itm .as a sp3ifi0 lo3ation :.! it 3an / asily availa/l;


C O M P A N Y

D1


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Recommendations

En1in!in1 itmsJspa! pa!ts .av /n 0ivi00 into t.! 3at1o!is(

)+ 7o3al itms;

,+ Fo!i1nJimpo!t0 itms;

5+ P!opitiato!y itms;Spa! pa!ts a! su/+3at1o!i60 on t. /asis of t.i! 3onsumption(

i Fast;

ii1 >egular.

iii M0ium;

iv Slo:

v $a0;

vi N:;

T. En1in!in1 sto! !mains opn f!om (-- a;m; to @(-- p;m; A !0 sal is put at t. 0oo!

at t. tim of 3losin1; If a 0pa!tmnt in t. fa3to!y9 aft! sto! .ou!s n0 som itm9 t.

la0! of t. tam n0in1 su3. itm 3oms alon1 :it. a s3u!ity 1ua!0 an0 a :o!8! o!

som sup!viso!9 opns t. sto! an0 ma8s nt!y in t. Ni1.t Opnin1 R1ist!; '.il

lavin1 t. sto!9 . s.oul0 put t. :.it sal9 so t.at t. in3.a!1 of t. En1in!in1 Sto!

may 8no: t.at su3. an0 su3. p!son of su3. an0 su3. 0pa!tmnt .a0 opn0 t. sto! an0

.as ta8n su3. an0 su3. itm;

E.E. 9il !tore

It is a pa!t of t. En1in!in1 Sto!; In t.is sto!9 t. oil us0 /y t. 3ompany v.i3ls is

sto!0; T. oil fo! us is issu0 on 0aily /asis Hf!om *(-- a;m; to )-(-- a;m;; Aft! o! /fo!

t.is tim9 it 3an / issu0 only in >3ptional 3ass;

E.E.D 8eceipt of Items

'.n f!s. n1in!in1 itms a! suppli0 to t. fa3to!y9 a B;S;O9 in t. En1in!in1 sto!

!3ivs t.m; A #oo0s R3iv0 S.t H#;R;S.t fo! su3. itms is p!pa!0; On 3opy of

t. #;R; S.t is .an00 ov! to t. p!son :.o passs t. /ill an0 on 3opy to t. B;S;O;

fo! sto! !3o!0;

E.F Issuance of items

T. p!op! 3omput! !3o!0 of t. itms in t. sto! is maintain0; '.n !2uisition fo!

som itms is !3iv0; Fi!st off all9 t. B;S;O; 3.38s t. !3o!0 of t.at itm :it. t. .lp of

3omput!; If t. !2ui!0 itms a! availa/l at sto389 t.n . issus t. !2ui!0 itms an0

t.n fils t. 3opy of t. !2uisition an0 t. 3omput! 1n!at0 p!intout;

E.2 !tock checking

The account office+ from time to time+ sends a list of items

to the =ngineering ,tore. The items specified in the list are

counted by a ',* of the =ngineering ,tore with the help of


C O M P A N Y

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Recommendations

a specified team8s member of the ,MD. If any difference is

found is reported to the ?inance office along with a

description.E.3 !tock Adjustment

Somtims t.! may / a mista8 /y t. sto! .an0 :.il issuin1 an itm; Fo! >ampl9

!3iv0 a !2uisition fo! itm 9 at t. tim of issu t. sto! .an0 /!in1s on itm insta0

of itm an0 .an0s ov! it to t. !2uisition .ol0!; In t.is 3as9 as p! 3omput! !3o!09

on num/! of itms is issu0 :.il a3tually itm :as issu0; So9 /3aus of on mista8

t:o 0is3!pan3is o33u!!0; T.at is9 itm is su!plus /y ) :.il itm s.o!t /y ); In su3.

3ass9 a sto38 a0=ustmnt P!fo!ma is snt to Finan3 $pa!tmnt t.at s.o:s t. a3tual

positions of t. sto38 of t.is itm an0 t.us9 t. sto38 is a0=ust0;

E.4 Binning

All t. #;R; S.t0 itms a! pla30 at t.i! p!op! positions H/ins sp3ifi0 fo! a3. itm;

T. p!o3ss of 8pin1 itms in t.i! sp3ifi0 /ins is 3all0 /innin1; T.! a! )--- /ins in

t. n1in!in1 sto!; T. pla3mnt of itms in t.i! p!op! /ins is a 0iffi3ult >!3is;

T.!fo!9 t. p!son !sponsi/l fo! /innin1 must / an >p!in30 p!son;

E.1 8unning "og

>unning 7og of >eceipts and Transfers is printed at the

end of the day or early in the morning on the following day

which shows the "" .no !T no >eceipt )uantity and 'in

number of the items. >unning logs of current and one

previous year are kept for record purpose.


C O M P A N Y

EC


47/106


Recommendations

;M$* !S(!C (!)$*()!$M


C O M P A N Y

E


48/106


Recommendations

3 > M a n a g e r

( s s i s t a n t 3 >M a n a g e r

( s s i s t a n t 3 >M a n a g e r

( s s i s t a n t 3 >M a n a g e r 7 e a f H : 7 T

3 > 7 e g a l ( f f i a r s3 > 0 e l f a r e* f f i c e r

3 > ( d m i n * f f i c e r

- n i o n s e d= m p l o y e e s

- n i o n s e d= m p l o y e e

- n i o n s e d= m p l o y e e

*!ource/ :atabase ;8:+ 6igure E.3


C O M P A N Y

ED


49/106


Recommendations

5;)* uman Rsou!3 $pa!tmnt

;uman resource department is mainl% concerned with the management of ;uman resource in

the organi0ation. The main functions of ;8: are to resol&e the workers grie&ances and care

of disciplinar% procedures misconduct faults and omissions Industrial and )ommercial

stablishment standing order G @31 and Industrial 8elations 9rdinance @3@.

At Akkora 5hattak 6actor% ;uman 8esource Manager Mr. Arif Bilal heads the ;8

:epartment. ;e has two Assistants Managers one for "egal matters and one for

Administrati&e.

3.2< /hy ;!M "s *eeded=The philosoph% behind the concept of ;8M is to utili0e the abilities of workers to their

ma


50/106


Recommendations

(ermanent workers are hired b% ;8:. The factor% on permanent basis directl% emplo%s them. Therefore the% are required

to meet all the requirements that the compan% has established for a worker.

N: :o!8!s :.n .i!0 a! p!op!ly t!ain0 an0 3losly :at3.0 at :o!8 0u!in1 t. a!ly

p!io0 of t.i! =o/;

5;,,;, Tmpo!a!y 'o!8!s

T. tmpo!a!y :o!8!s a! .i!0 /y R$ as sasonal :o!8!s; T.y a! on t. =o/ fo! si>

mont.s in a ya! i;; f!om 4uly to $3m/!; At 0pots t.y a! .i!0 fo! /uyin1 to/a33o an0

0oin1 ot.! =o/s in t. 7af a!as; At fa3to!y t.y a! .i!0 no!mally fo! #7T s!vi3s;

If a temporary worker works for the whole season+ he gets

the benefit of special bonus. If he remains absent for #4

consecutive days+ another worker for the rest of theseason replaces him. If a seasonal worker remains absent

for three consecutive seasons+ his license is cancelled.

The wage level and terms and conditions for the temporary

workers are nearly the same as that of permanent workers.

5;,5 Rol of 7a/ou! "nion in t. Fa3to!y

T.! a! t.! 7a/o! f0!ations at AKF; T.s a!( Muta.i00a Ma60oo! "nion;

Pa8To/a3 Ma60oo! "nion;

Pa8 7a/o! "nion;

El3tions of "nions a! .l0 aft! t:o ya!s to 0t!min t. aut.o!ity of a union to .ol0

tal8s :it. t. Mana1mnt; T. l3t0 ma=o!ity >tn0s a Coll3tiv Ba!1ainin1 A1nt

HCBA as a !p!sntativ to R $pa!tmnt; If t. CBA is snsi/l9 it 3an p!ov v!y usful

in maintainin1 a 1oo0 nvi!onmnt in t. fa3to!y; Fo! 7af a!a a spa!at CBA is l3t0

f!om t. :o!8!s union an0 Ka!8un union;

3.23.1 Biennial greement

TE CBA an0 Mana1mnt si1n a1!mnt !1a!0in1 t. :o!8in1 3on0itions9 :a1s an0

ot.! affai!s of t. :o!8!s; T. a1!mnt !mains vali0 fo! , mont.s; Aft! , mont.s a

n: a1!mnt is si1n0;

E.DF (olicies of ;8: (akistan Tobacco )ompan% *A56+


C O M P A N Y

EF


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Recommendations

3.24.1 ;iring Policy

In (T) Akkora 5hattak 6actor% there are E3 grades. 9ut of these E3 grades grade to C includes general workers to

senior super&isors and clerks. 6rom EC to EE includes B!9,s *Business !upport 9fficers+ and from EF to E3 M9M,s

*Members 9f Management+.

T. R $pa!tmnt of AKF is 3on3!n0 :it. t. .i!in1 of only t.os mploys :.o fall

into t. 3at1o!y of 1!a0 ) to )-; T. minimum 2ualifi3ation t.at is !2ui!0 fo! a

p!mannt mploy is Mt!i3 plus P.ysi3al suita/ility;

3.24.2 Promotion Policy

The employees having a good performance can be

promoted to the next higher post. There are two bases for

promotion in !T" the suitability and ,eniority. ,uitability

means the suitability of the person in terms of his

performance on the job and seniority means the time he

has passed in !T".

T.! a! 3!tain =o/s to :.i3. li1i/l p!sons a! 0i!3tly p!omot0 an0 0o not !2ui!

any fu!t.! t!ainin1; But 3!tain =o/s !2ui! sp3ial t!ainin1 fo! a pa!ti3ula! p!io0; So9

:.n a p!son is to / p!omot0 to t.s =o/s t.y a! p!ovi00 :it. sp3ifi0 t!ainin1;

@.5%.@ >etirement !olicy

There is a limit on the indi&idual,s life for doing job. No indi&idual can work throughout his life. Therefore e&er%

organisation has kept an age limit for the

In0ivi0uals =o/; '.n . !a3.s t.at limit . must / !ti!0; In PTC9 t. a1 of

3ompulso!y Rti!mnt is ya!s fo! :o!8!s an0 mana1!s; Fi!st >tnsion is 1ivn at t.

a1 of ya!s9 s3on0 at 9 t. t.i!0 at D su/=3t to .is p!fo!man3 an0 m0i3al

fitnss;

@.5%.% >etirement on Medical :rounds

If a p!son /3oms 0isa/l to p!fo!m .is =o/9 . !2usts t. 3ompany to !f! .im to t.

M0i3al Boa!0; T. M0i3al Boa!0 >amins t. :o!8! t.o!ou1.ly an0 sn0s .is m0i3al

!po!t to PTC; If t. !po!t !vals t.at . is !ally una/l to p!fo!m .is =o/9 t.n . is

1ivn !ti!mnt on M0i3al #!oun0s an0 is p!ovi00 all t. /nfits as in 3as of o!0ina!y

!ti!mnt;

3.2!." #oluntary $eparation $cheme

(T) has a scheme of &oluntar% separation. >nder this scheme the permanent emplo%ees are pro&ided the opportunit% to

get earl% retirement. The person getting earl% retirement is paid some percentage of his salar% plus pro&ident fund. The

percentage of salar% to be paid to them depends upon the %ears remaining to his retirement. The percentage applicable is

gi&en bellow/


C O M P A N Y

E2


52/106


Recommendations

>p to 2 %ears 42 J

3 to 1 %ears FC J

@ to C %ears E3 J

to 2 %ears D2 J

3 to DC %ears 1 J

D to D2 %ears 2 J

D3 to EC %ears E J


C O M P A N Y

E3


53/106


Recommendations

Finan3 $pa!tmnt+++AKF

*!ource/ :atabase 6inance :epartment+ 6igure E.4


C O M P A N Y

E4

?actory ?inancial ,ervices

Manager

Cost

#ccou!ta

!tPayroll, Cash,

Cost

#ccou!ta

!tBook Keeping,

Lea+

#ccou!t

8S(Crop Cost

BSOPayroll

8S(Variable

Cost,Excise

8S(Bank

Payment

8S(Ledger & ixed

8S(Production


54/106


55/106


Recommendations

inspection according to the grade and )uantity of the 7eaf.

(fter the price has been assessed+ the specifications and

price of each bale is written on a 7D&@ form+ throughwhich the total amount payable is calculated. The form is

prepared in triplicate. The distribution of 7D&@ is as underC

(ccounts /yellow copy1

!T' /:reen copy1

:rower /pink copy1

2oucher book /white copy1The payment is made usually after & to @4 days of sale on

presenting the pink copy at the nearest bank branch.

3.2 The Payment System

The government of !akistan has deputed a special type of

?inance facility to the !T"+ which is called D!72 /Deferred

!urchase 7eaf 2oucher1. (ccording to this system+ the total

amount of financing available is negotiated with the ,tate

'ank on yearly basis depending upon the projected sales

and hence the 7eaf purchases. This facility is then

distributed to three banks. The current distribution is as

followsC

3abib 'ank 7imited 544 million

;ational 'ank of !akistan #A4 million

Muslim "ommercial 'ank #A4 million

(ccording to D!72 system+ the banks make payments to

the growers although the company does not already have

any amount in that 'ank (ccount. This facility to the

company is available from start of the season till @4thof


C O M P A N Y

E@


56/106


57/106


Recommendations

tobacco re)uired is determined. The average prices of

different brands of tobacco are determined by taking into

account the previous year8s prices plus the Inflation rate+which is advised by the 3ead *ffice. The details of )uantity

and grades of tobacco to be purchased are communicated

to the depots. The job of the depot is to ac)uire the

assigned )uantity of the 7eaf at or bellow the average

price.

3.27.2 8uying and )LT >penses

The 'uying and :7T =xpense budget includes the 'udgets

for the 7eaf Depots. 7eaf Depots expenses forms a major

component of the buying expenses. The basis of these

budgets are usually the last year8s expense adjusted for

inflation according to the figure being advised by the 3*

and varies with the head of expense to which it is applied.

The =xpense budget is first discussed with the 7eaf

Manager and the ?,M7 /?inancial ,ervices Manager 7eaf1

for preliminary approval and then to the 'udget committee

for final approval. (fter this approval+ it is consolidated

with other departments to be presented to the ="'

/=xecutive "ommittee 'oard1. (fter approval from ="'+ it

becomes valid for use.3.2? 8uying $nd )LT /age 8udget

This budget is based upon two major factorsC

# *7= /*ptimum 7abor =stablishment1.

5 "'( agreement of settlement.


C O M P A N Y

F


58/106


Recommendations

The 3uman >esource Department calculates the *7= by

taking into view the desired capacity at which the plant is

to be operated. It also takes into consideration the variousparameters on the basis of which the overall factory

performance will be evaluated. These includesC

# "!M3 /"igarette !er Man 3our1.

5 Million cigarettes per man.

(nother major factor affecting the wage budget is the

settlement agreement between the management and the

"'(. In this agreement+ the nature of division of labor and

the benefits of workforce reduction are decided.

(nother factor that affects the wage budget is the level of

fringe benefits to the workers. This has an effect on the

wage budget and the bottom line of the company.

3.3< Crop Costing

The crop cost has the following major componentsC

# 'uying and :7T =xpenses.

5 'uying and :7T 0ages.

@ 7eaf !urchaseJield.

% 7eaf !acking Material.

The crop costing procedure starts with budgeting of the

7eaf !urchases based on he marketing projection. Theprojections are generally for the next five years.

3.3


59/106


Recommendations

varies from leaf to leaf and within a process as well. The

figure taken for calculation is usually F$ B/ approximately1+

which means that F$B by weight of Tobacco processed isconverted into 7amina. (ll the costs are added together.

The value of stem and byproduct are subtracted from the

abovementioned total. The answer is then divided by the

total 7amina obtained to obtain the total cost per kg of the

leaf purchased. These costs are entered into the computer

and the printout of the details of these costs is sent to the

3*. The 3* enters it into "entral ,tock (verages /",(1 to

update the average cost per kg of different variety of

tobacco available with the company. The tobacco when

issued to the !MD is transferred at the ",( to be used in

the final product costing.

3.31 Leaf De9its to ;ead (ffice

The amount of prized leaf is charged to the 3* through

monthly debit notes. The 3* is debited at the actual

estimated value of the "rop "ost mentioned in the form 7

5&. The 3* is credited at the time it is weighed in !MD. It is

worthwhile to note that the debit was at the estimated value

while the credit at the actual and hence there will be a

difference in books. 'y the end of the year+ a finaladjustment debit note is prepared to update the "entral

,tock (verages.

3.31.1 Custom Duty


C O M P A N Y

FE


60/106


Recommendations

The "ustom Duty is paid only on the imported materials.

The following are the imported cigarette materials and their

rates of exciseC*ame of "tem !ate of >cise Duty

# "igarette !aper @A B

5 Tipping !aper @A B

@ ,wift (dhesivesJ :um #A B

% (luminum ?oil @A B

A !olypropylene @A B

F 2iscose Tear Tape @A B

The imported materials are received at the seaport and are

brought to the bonded godown in the factory with a bill of

entry. 0e call this bond the @"n9ound 8ill of ntryA.

0hen the materials are issued for use+ the Inbound 'ill of

=ntry is replaced by the >B8ound 8ill of ntryA.

(t receipt of material+ the Inbound 'ill of =ntry is sent to

the ?inance Department. The actual amount of material on

the bill is in form of !ound ,terling. The amount is then

converted into >upees. # B Insurance and # B landing cost

on the materials is calculated and is added to its cost. ;ow+

this is the assessable cost of material. @A B =xcise Duty

and #A B ,ales Tax is calculated on the assessable valueof material.

3.32 Trial 8alance System

The (?8s ?inance Department prepares a Trial 'alance

every month. The data for Trial balance comes from the

following sourcesC


C O M P A N Y

FF


61/106


Recommendations

# The (.! ,ystem /(ccounts !ayable1

5 "ashiers data

@ ,tandard entry sheets% 9ournal entries

A (ccounts "urrent 7edger

F ( 6 (ccount ,wat+ Mansehra+ 'uner+ :ujrat.

9ut of the abo&e si< sources K D are punched into the computer dail% while the rest are entered

into the s%stem at the fourth date of each month. The Trial balance data is transferred to the ;9 at

the closing of Fthdate so that at the morning of 2th it ma% be a&ailable in the ;9

)hapter F

Trend and 8atio Anal%sis

)hapter objecti&es

To stu0y t. finan3ial position of 3ompany

I0ntify t. 3!iti3al a!as

@;) Finan3ial Analysis

6inancial statements are the instrument panel of a business enterprise. The%

constitute a report on managerial performance attesting to managerial success or

failure and flashing warning signals of impending difficulties. To read these

financial statements e&er% one can easil% understand the position of business

enterprise. It shows financial structure and operating function results. The

financial affairs of a business ma% be interest to a number of stakeholders such as

Management )reditors In&estors (oliticians >nion 9fficials and -o&t.

agencies. ach of the group has somewhat different needs and accordingl% each

tends to concentrate on particular aspects of a )ompan% financial picture.


C O M P A N Y

F2


62/106


Recommendations

There are &arious ratios which pro&ide results to all abo&e parties. A ratio is a

simple mathematical e


63/106


Recommendations

Assts

Total 'i>ed$sse

ts

D@@@21E DFE3DE1 11D4 F1@ FF.E@ FE.C1 EF.E4 ED.22

Total Assets 3421CC 2322FD 2D1@4CC F22DD1@ CC.CC CC.CC CC.CC CC.CC

CurrentLia9il

ityC!0ito! A33!u0 &

Ot.! 7ia/ility

,----- @@--- )@)-5 *), ,;* ; ,-;* )5;

Cu!!nt po!tion of

lon1 t!m 0/ts

)@)) )--@5 @----- @5, ,; ); ; *;*

S.o!t t!m finan3

& loans

)*5-- ),** ,)@*- ),, ,; 5-;* @-;@ 5*;,,

Total

current

lia9ility

E13F2 EDD22EC E@32@C3 EE44@3 23.F4 24.CE 4F.@4 31.@E

Long termlia9ili

ty7on1 t!m loans 5---- ,),--- @--- @),--- ;@ 5; ;@ *;-

TotalLia9il

ity

F13F2 EFE42EC FFDD@C3 E2F@4@3 3.@2 3C.41 1E.3 44.@1

Sharecapit

alIssu09 su/s3!i/0

& pai0 up 3apital

,@*5 ,@*5 5)*5 5)*5 5;) @;) ;-@ ;-,

Rvnu !s!vs + + @@, 5), + + )-;5 );-)

"n app!op!iat0

p!ofit & loss

) H55-@ + + -;, H;* + +

Total(5n

er6uit

y

D242@2 DD41@ 1334@F CCDF@E E1.C2 [email protected] 3.E@ DD.CC

"iabilit% L 9wnerquit%

3421CC 2322FD 2D1@4CC F22DD1@ CC.CC CC.CC CC.CC CC.CC

HSou!3s( finan3ial statmnt


C O M P A N Y

F4


64/106


Recommendations

Pa8istan To/a33o Company 7imit0 Ta/l @;,

Balance !heet 8egular *8s. In CCCs+ In0>0

DCC DCCC @@@ @@1 DCC DCCC @@@ @@1)urrent assets

Cas. &

E2uivalnt

*-5 * ),5@ 55* ,-5;@ ,);@ )-;5 )--

T!a0 0/ts @)- ))) *)-5 ),,)- 5*;* *;* @; )--

7oans &

A0van3s

5,, 5-5* )-- ,)* )@;* )*; 5;) )--

P!paymnts &

ot.! !3iva/ls

)@@55 5@@,), ,,*, 5-@, @; ))5 5;* )--

Sto38 55,,5 ,*)5) ,,- ,-@ )5,; )-5;5 ))@;- )--

Sto!s & spa!s )@-)5 )@-*-* ),5 )*) @; @; *);@ )--

Total )urrentAssets

E421FD4 ED@1E EF4FD@ EC4CE41 DD.F CF.@ E.EC CC

6i


65/106


Recommendations

PROFIT AN$ 7OSS ACCO"NT Ta/l @;5IN$E

DCC DCCC @@@ @@1 DCC DCCC @@@ @@1

Tu!n ov! )*** )*--, )@*5@ )@,@*@@ )5*; )));5 )-@; )--

7ss 3ost ofsal

)*5 )@@5)*- )5@, )5@)@,,, )55;@ )-; )-); )--

-ross (rofit @1EFD1 F42CF1 D1@D1E 1E2FDD DE4.2 43.3 2F.E CC

7ss(

Ma!8tin1

E>p

*5@ ,,, ,@5 @@*5 )*; )*;@ ),@;) )--

A0minist!atio

n E>p55, ,, ,@)*, )*,- ),;, )@; )5;) )--

9perating(rofit

3FEEDC E244F EFDFF1 @DEC@ 3@3.@ EFD. E4C.@ CC

A00( Ot.!

in3om5, )))* ))@* *5 5; @-; )@@;@ )--

7ss( Ot.!

>pnss)@ )@ 5), ),5@, @; ,-; @5@;@ )--

7ss(

Finan3ial3.a!1s

,@))) @-*5@ @)--, 5*,@* ;5 ))-;* )));-@ )--

P!ofit 7oss

Bfo!

Ta>ation

5,) H5 H)-*55 H,)5@@ H),; 5-5; 5*;-- )--

Ta>ation

Cu!!nt fo!

t. ya!

H)) 5- ,* ,-) H;) ))5;, )-5; )--

(rofit7"ossAfter Ta


66/106


Recommendations

6inancial 8atios Table F.F

"IH>I:IT#

DCC DCCC @@@ @@1 @@4

Cu!!nt Ratios -;* );-@ -; -;* );)

A3i0 Tst H


67/106


Recommendations

@;, T!n0 Ratio Analysis

@;,;) P!ofita/ility Ratios

(rofitabilit% 8atios allow us to measure the abilit% of a firm to earn an adequate

return on sales total assets and in&ested capital it is also helpful for the

controlling of cost in an organi0ation with the help of these ratios problems

related to profitabilit% can be e


68/106


Recommendations

from 2.EEJ to @.@4J in DCC which show the better pricing strateg% *:ecrease in

price of -old 6lake and )apstan from 8s. @ to 8s. @.12+

@;,;) Op!atin1 P!ofit Ma!1in

9perating profit margin indicates the efficienc% of marketing and administrati&e

acti&ities. Though there was a significant increase in the ratio for the last %ear but

fluctuation since %ear @@4 DCCC was not health% for the organi0ation.

Management took some concrete measures which resulted in present impro&ed

scenario. The measure taken was down si0ing which brought a significant

impro&ement in terms of operating profit.

@;,;) Nt P!ofit Ma!1in

The net profit margin reflects management efforts at controlling assets the

markets acceptance of the firm products the effecti&eness of its marketing and

sales efforts and the firms o&erall reputation. Net profit margin pla%s a &er%

important role in the goodwill and reputation of an% compan%. (T),s Net profit

margin was negati&e from @@4 to DCCC. But in DCC management was able to

con&ert losses into net profit due to appropriate pricing policies issuance of right

shares correcti&e administrati&e measures and decrease in financial charges.


C O M P A N Y

2D


69/106


Recommendations


C O M P A N Y

2E


70/106


Recommendations

@;,;) Rtu!n on Invstmnt

An important test of management abilities is to earn return on in&estment. ?e can

determine the position of the firm assets efficienc% from return on in&estment

ratio. But o&erall position of this ratio is not satisfactor% e


71/106


Recommendations

@;,;, 7i2ui0ity Ratio

The arrange creditors although generall% concerned with the firm,s o&erall

financial strength is speciall% interested in knowing if the firm will be able to

meet its short term financial obligations. The two frequentl% used liquidit% ratios

are the current and quick ratio.

0ear 2


72/106


Recommendations

satisfactor% which can be due to mal management of A78 A7( and in&entor%

control.

@;,;5 7v!a1 Ratio

"e&erage ratios accomplish two things first the% are a measure of the e


73/106


Recommendations

performance in this ratio is not satisfactor% because the compan% can enjo% more

debts with financial le&erage due to low interest rate e


74/106


Recommendations

0ear 2


75/106


Recommendations

@;,; R3iva/l tu!nov! in 0ays

8T: shows a&erage collection period which also show impro&ement from 1

collection da%s to D collection da%s.

@;,; Paya/l Tu!nov! & Paya/l Tu!nov! in $ays

(a%able turno&er refers to promptness of pa%ments and pa%able turno&er in da%s

shows the number of da% in which pa%ment is made. Anal%sis shows that there is

nothing wrong with these ratios but huge difference between A78 reco&erable

turno&er in da%s and pa%able turno&er in da%s can indicates &er% tight polic%

which can result negati&e result on sale.


C O M P A N Y

2@

tn;

.".1 lternatie 2

In t. s3on0 option : plan to /!in1 mino! 3.an1s in t. p!o3ss to !0u3 t. :o!8!s;

' su11st t.at if t. CBCs 3omin1 f!om SM$ a! pa380 fu!t.! in la!1 pa38s of

polyt.n t.y 3an asily lift09 pla30 an0 loa00 :it. t. .lp of fol8 lift!s :.i3. :ill .lp

in t. !0u3tion of t. :o!8!s us0 in t. loa0in1s p!o3ss; By a0optin1 t.is p!o30u! t.

num/! of :o!8!s in t. s.ipmnt 0pa!tmnt :ill / as follo:s;


C O M P A N Y

4


88/106


Recommendations

T.! p!sons fo! t. pa38in1 of CBCs9 fou! fol8 lift 0!iv!s fo! fou! fol8 lift!s9 t:o

:o!8!s fo! a!!an1in1 CBCs in t. t!u38s9 on 3l!8 also 0oin1 t. stampin1 an0 on

p!son fo! 3lanin1; T.us t. total num/! of :o!8!s :ill 3om 0o:n to lvn;

;;, BM Sto!

3.2.D 9bser&ation/

In t. BM sto! t.! a! t:o :o!8!s in t. main BM sto!9 fiv :o!8!s in t. 'M :ast

a!a :.o a! also us0 fo! t. loa0in1 of t!u38s; T.! a! t:o :o!8!s in t. s.oo8 s.a0

a!a9 t.! 3l!8s an0 on p!son fo! 3lanin1; T.! 3l!8s a! also t.! in t. BM sto!; In

total t.! a! t.i!tn :o!8!s;

.".2 lternatie

Ou! su11stion in t.is !1a!0 is t.at t.! s.oul0 / fou! :o!8!s fo! t. so!tin1 of 'M

:asts an0 t.y s.all also / us0 fo! t. loa0in1 an0 unloa0in1 of t. t!u38s; T.! s.all /

t:o :o!8!s in t. s.oo8 s.a0 a!a an0 t:o fo! 3lanin1 pu!poss; T.! s.all / only t:o

3l!8s on in BM sto! an0 on fo! /ot. t. s.oo8 s.a0 a!a an0 'M :ast a!a; T.us t.

total num/! of :o!8!s :ill 3om 0o:n to tn;

P!(HCT 8

-.- Pro9lem Statement

$(rocess Mapping of 6inance :epartment.'


C O M P A N Y

4D


89/106


Recommendations

; P!o=3t O/=3tiv

T. o/=3tiv of t.is P!o=3t is to Map Flo: C.a!t of a3. s3tion in Finan3 $pa!tmnt;

; P!o/lm A!a

A!a un0! 3onsi0!ation is all s3tion of Finan3 $pa!tmnt;


C O M P A N Y

4E


90/106


Recommendations

)A!; !)TI9N 6igure 3.


C O M P A N Y

4F

CAS FROM SA7ES

RE%EN"E(

BAA'A7P"R FAISA7ABA$

PESA'ER

"(,3 ?>*M,=77I;:C

$"ST OTERS

"(,3 ?>*M(-"TI*;C

';M 'ASTE SPARES

OTERS

C$S;(A#MNT T;89>-;BAN5

PETTYCASH

PAYMENT TO

7EAF #RO'ERS

ISS"ANCE OF

TRANSFER

INSTR"CTION

STATEMENT BY

7EAF $EPOT H,

COPIES

COPY TOBANK

COPY TO CASSECTION

PAYMENT TO

#RO'ERS

BSOs

MONT7Y

SA7ARIES

REIMB"RSEMENT

OF EPENSE

CAR#ES

%O"CERS 'IT

BI77S FROM TE

C7AIMERS

CAS PAYMENT

ON

PRESENTATION OF

CE


91/106


Recommendations

"A6 (>8);A! AN: (A#MNT 6igure 3.D


C O M P A N Y

42

"SS$*C (' 8(!*

$)!M*T

P!"C #$L$T"(*

P;0S"C$L "*SPCT"(*

"SS$*C (' S"G 8$LC$!DS

'(!M $

"SS$*C ('C(MPT!"ID

#(C;!S 2 C(P"S

DPT 8$*& $&'

"SS$*C ('T(&*/"T;'(!M 8

DP(T

$&'

!HCTD 80 T; C(MP$*0

!HCTD 80 T;)!(/!S

)!(/!S

PT8


92/106


93/106


Recommendations

VA8IAB" )9!T 6igure 3.F


C O M P A N Y

44

*; IM!*>T=DIT=M, />(0M(T=>I(71

ON ARRI%A7 OF

TOBACCO IN

7;R;R IN PM$

*; -,=DT*'(""*

ON SIPMENT

OF FINISE$

#OO$S TO TE

SA7ES

#O$O'N

CST(M DT0 T9BA))9

Q)I! :>T#

T(8$CC(CSS

,(7=, T(K N"I:. =K"I,=

D-T

%ARIAB7E

COST


94/106


Recommendations

$ISPOSA7 OF ASSETS Fi1u! ;


C O M P A N Y

41

$ISPOSA7 OF ASSETS2 T0PS

?( # >(I,=D ' T3="*;"=>;=D D=!(>TM=;T

?-77 D=!>="I(T=D(,,=T,

!>=M(T->= D(M(:=D(,,=T,

MMD?I;(;"=D=!(>TM=;T

7ESS %A7"AB7E ASSETS

,=;D T* MMD ?*>(-"TI*;

(!!>*2=D ' D*?("*MMITT==

!>=!(>(TI*; *? D*?(,T(T=M=;T (T T3= =;D

*? M*;T3

"(,3I=>

I# %A7"AB7E ASSETS

,=;D T* (>("3I(-"TI*; M(>T

I,7(M('(D

FINANCE $EPARTMENT

$EBIT NOTE

FROM ;O


95/106


Recommendations

A)H>I!ITI9N 96 A!!T! 6igure 3.3


C O M P A N Y

4@

,"= !>=!(>=D '*>D=>I;: D=!(>TM=;T

>(T= 2=>I?I"(TI*; 'MMDJ =;:J IT

(!D!"*) $SST

!>=!(>(TI*; *??(#H:> ,3==T *;

>="=I!T *? :**D,/@ "*!I=,1

(!!>*2=D '?I;(;"=

D=!(>TM=;T (?-!T* 54 MI77I*;

(!!>*2(7 *? !(M=;TT* ,-!!7I=>

"3=" H ?I77 T3=>=M(I;I;: =;T>I=, *;

?(#

*>D=>I;: D=!(>TM=;T?I;(;"= D=!(>TM=;T

(,,=T, *?2(7-= ('*2=

54 MI77I*;(!!>*2=D '

="'


96/106


Recommendations

TRIA7 BA7ANCE Fi1u! ;

CAPTER

FIN$IN#S AN$ RECOMMEN$ATIONS

Chapter (9Eecti,es

To criticall% anal%0e the findings during the internship period.

To recommend remedies for the flaws.

.1 'indings

!akistan Tobacco "ompany limited is a multinational

organization operating in !akistan since #$%&. !T" is a

member of 'ritish (merican Tobacco :roup incorporated

in #$45 at 7ondon. '(T is financially wellestablished

company and '(T does any thing to motivate its members

of its group. =xcept for the last two years i.e. 544# and

5445 !T" suffered losses in the last six years. This is the

evidence of the fact that some thing was really wrong with

system. >egardless of the fact that it is a subsidiary of oneof the giants of the international market '(T+ it still

suffered losses for an amazingly long period. (lthough for

the last couple of years !T" was able to transform losses

into profits still methods need to be taken for long term

profits. ?or this purpose the company needs s to eliminate


C O M P A N Y

1C

CAS SECTION

CROP COSTIN#

%ARIAB7E COST

PAYRO77

PRO$"CTION EPENSE

ISS"ANCE OF $EBT NOTES

#ENERA7 4O"RNA7

STAN$AR$ ENTRY 7E$#ER

SEET

A+AJC

*T!0 "*T( CSB3 M$*$L *T!0

T!"$L 8$L$*C


97/106


Recommendations

certain drawbacks from its system. ( few flaws that I could

observe during my brief stay at the company are stated

belowi. The feeding s%stem in -"T department is not automatic and is fed manuall% which cause

loss of tobacco during transfer.

ii. In -"T department :ust is other problem which is faced b% workers.

iii. ?ithin (M: workers who ha&e primar% responsibilit% o&er production are e


98/106


Recommendations


99/106


Recommendations

;, RECOMMEN$ATIONS

i. The feeding s%stem in -"T should be automatic and instead of manuall% feeding so loss

of tobacco can be minimi0ed.

ii. 6or better working en&ironment and condition in -"T area it should be tried to protect

emplo%ees from dust which ma% cause lungs and e%es problems through proper training

and in guidance of n&ironment ;ealth and safet% polic% b% pro&iding dust masks etc to

e&er% emplo%ee there working.

iii. The workers of (M: should recei&e work safet% training at the hands of management.

Management will guide workers about different precautionar% measures during working.

i&. A con&e%er needs to be built between the )2 -odown and (M:. This mechanism will

sa&e time mone% and loss of tobacco during manual transfers.

&. The ele&ation of warning signs need to be reduced to become more &isible and the sign

should be printed also in local languages to become easil% understood b% personnel.

&i. !ome arrangement should be done so that reweighing is not done again and again as this

causes loss of tobacco and when once it,s weighed in )2 then it should not be weighed

again and again and -odown data should be used again.

&ii. ?ithin !M: old machines should be replaced as the% are lesser efficient in production

and emits greater le&el of sound.

&iii. In !M: as one portion is &er% good in temperature and that portion is &er% cool so it

should be tried to aircondition the other portion of !M: this thing will impro&e the

efficienc% and producti&it% of personnel.i


100/106


Recommendations


101/106


Recommendations


102/106

Chapter 7 Findings and Recommendations

CAPTER

IMP7EMENTATION P7AN

;) Aim of Implmntation Plan

The aim of implementation plan is to put into action and practice the recommendations in the light of

aspect like cost time procedure polic% etc.

;, Implmntation Plan fo! R3!uitmnt an0 Sl3tion

The implementation plan for recruitment and selection I ha&e suggested is based on certain rules.

8eferences should not be used.

!hould be based on merit

(reference should be gi&en to the candidates with rele&ant e


103/106


inter&iewer shall record his 7 her impressions on an assessment sheet which shall be attached with

the application and shall be transferred to his7her personnel file in case he7she is selected.

2. In case of second inter&iew three candidates shall be short listed through the first inter&iew

process if possible. This will ensure that a choice is a&ailable.

3. The inter&iew process can be modified according to the needs of the post and the hiring unit,s

requirements. )andidates ma% be required to gi&en presentations and undergo practical and

theoretical test. The% ma% be in&ited to participate in a meeting etc.

4. 5eeping one thing in mind the panel shall not put the candidate into aspects that are gender

sensiti&e. There shall be no se


104/106


F. "ater the candidate shall be allotted his post.

2. )ontract shall be signed with in the period of one month after his going.

3. )opies of the contract shall be sent to all the rele&ant department heads.

Total cost to be incurred on the process.

A0v!tismnts in t. N:spap!s; Ta/l ;)

Newspaper :a% "ocation !i0e )ost

The News !unda% )enter page H. page 8s. CCCC7

=ang !unda% )enter page H. page 8s. CCCC7

Nawae?aqt !unda% )enter page H. page 8s. CCCC7

:awn !unda% )enter page H. page 8s. CCCC7

The Nation !unda% )enter page H. page 8s. @2CC7

The 6rontier (ost !unda% )enter page H. page 8s. @2CC7

Ad&ertisement )ost Total 8s.2@ CCC7

)ost to be incurred on Mails and Telephone calls is appro


105/106


BIB7IO#RAPY

. 8ao 8amesh 5. *@1@+.Fundamentals o* *inancial Management %nternational 'dition. !ingapore/

Ma!A/ Ir&in Inc.

F. Van ;orne =ames ). *@@1+.Fundamentals o* Financial Management Tenth 'dition. New =erse%/

(rentice;all.

2. Brigham ugene 6. *@@3+.Financial Management Theory and )ractice 'ighth 'dition. 6lorida/

The :r%den (ress !eries.3. !imons ;arr%. *@3F+.%ntermediate ccounting Fourth 'dition. >!A/ !outh?estern (ublishing

)ompan%.

4. Meigs 8obert 6. And ?illiams =an 8. K ;aka !usan 6. K Bettner Mark !. *@@@+. ccounting

'leenth 'dition. >!A/ Ir&in Inc.

1. (akistan Tobacco )ompan% "imited. *@@1+. nnual Report. Islamabad.

@. (akistan Tobacco )ompan% "imited. *@@@+. nnual Report. Islamabad.

C. (akistan Tobacco )ompan% "imited. *DCCC+. nnual Report. Islamabad.

. (akistan Tobacco )ompan% "imited. *DCC+. nnual Report. Islamabad.

D. HuaideA0am )ollege of )ommerce *DCCC+. %nternship Report on )a4istan To-acco Company

/imited 4ora hatta4. >ni&ersit% of (eshawar.

E. Institute of Management !tudies *@@@+. %nternship Report on )a4istan To-acco Company limited

4ora hatta4 Factory. >ni&ersit% of (eshawar.

F. Institute of Management !ciences *DCC+.%nternship Report on )a4istan To-acco Company limited

4ora hatta4 *actory(eshawar >ni&ersit%.

2. (akistan Tobacco )ompan% "imited *@@1+. 'nironment 5ealth 6 $a*ety policy. Islamabad.

3. 5istory o* British merican To-acco. *online+ A&ailable *DCCD+. http/77www.bat.com

4. (i**erent Regions o* British merican To-acco. *online+ A&ailable *DCCD+.http/77www.bat.com

1. The )TC analysis*online+ A&ailable *DCCD+. http/77profiles.wisi.com


C O M P A N Y

1@
http://www.bat.com/http://www.bat.com/http://www.bat.com/http://profiles.wisi.com/http://www.bat.com/http://www.bat.com/http://profiles.wisi.com/


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Documents

INTERNSHIP REPORT ON PTC