jdw

TABLE OF CONTENTS

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PAGE vi

National University of Modern LanguagesDepartment of Management Science

Sector H-9 ISLAMABAD

SUBMITTED BY:

Adeel Azher

Roll No.

10972

NATIONAL UNIVERSITY OF MODEREN LANGUAGEIt is hereby certified that the report has been thoroughly and carefully read and recommended to the Faculty of Management Sciences for acceptance of Final Project Report by Adeel Azher, Roll No. 10972, Session (Jan 2010 to June 2013) Morning, in partial fulfillment of the requirements for the degree of Master of Business Administration of National University of Modern Languages Islamabad.

Dated:

Supervisor: ______________________________

Observer: ______________________________

Head of Department: ______________________________Table of contentschapter # 1

INTRODUCTION Introduction of sugar industryCHAPTER # 2

history JDW SUGAR MILL LTD

Vision Mission Statement Strategy

Introduction of the Company ProductsCHAPTER # 3

ORGANIZATIONAL ANALYSIS SWOT Analysis PEST Analysis Balance Sheet Profit And Loss Account Horizontal And Vertical Analysis Ration AnalysisChapter # 4

INTERNSHIP EXPERINCE Concerned Department Information Duties & Responsibilities Accomplishment / Achievements Skill Acquired How Experience Impact My Career Pros & Cons Possible ProblemsChapter # 5

Suggestions and recommendation Conclusion ReferenceCHAPTER 1INTRODUCTION OF SUGAR INDUSTRY IN PAKISTAN

An Introduction to Pakistans Sugar Industry

Pakistan is the 5th largest country in the world in terms of area under sugar cane cultivation, 11th by production and 60th in; yield. Sugarcane is the primary raw material for the production of sugar. Since independence, the area under cultivation has increased more rapidly than any other major crop. It is one of the major crops in Pakistan cultivated over an area of around one million hectares.

The sugar industry in Pakistan is the 2nd largest agro based industry comprising 81 sugar mills with annual crushing capacity of over 6.1 million tones. Sugarcane farming and sugar manufacturing contribute significantly to the national exchequer in the form of various taxes and levies. Sugar manufacturing and its by-products have contributed significantly towards the foreign exchange resources through import substitution.

Key Facts

No. of Mills81 (71-Operational, 2-Under Construction, 4-Completed)

Crushing Capacity6.1 Milluion tones

Contribution to Economy3.0 4.0 Million Tonnes

-Share in GDP1.9%

-Employment1.5 million (directly & indirectly)

-Total InvestmentPKR 100 Billion (Approx)

Average Yield Per Hector46.8 Tonnes

Total Cane Production45.0 55.0 Million Tonnes

Cane Available30-43 Million Tonnes

Average recovery of sugar9.1 (vs. world avg. 10.6%)

Per Capita Consumption25.8 kgs. Per capita

Contribution to exchequerRs. 12.16 Billion

Cane Sugar Yield of World

CountryCane Yield (T/ha)Sugar Recovery (%)Sugar Yield (t/ha)

Australia

Egypt

Brazil

USA

Colombia

Mexico

India

Pakistan

World Avg.100.4

110.8

68.4

80.2

80.5

79.5

66.9

49.0

64.413.8

11.5

14.5

11.7

11.5

11.6

9.9

9.2

10.613.85

12.74

9.91

9.38

9.26

9.22

6.64

3.54

6.82

Pakistan Sugarcane Area and Yield

YearArea (000 Ha)Produced 000 TonnesYield per HectareUtilization % by Sugar Mills

2000-01960.043,62045.467.47

2001-02999.748,04148.176.33

2002-031,099.752,04947.380.28

2003-041,074.853,80050.181.15

2004-05966.443,53345.073.74

2005-06907.044,29248.867.94

Sugarcane Production and Recovery

YearCane Crushed

TonnesSugar Made

TonnesRecovery

2000-0129,408,8792,466,7888.39%

2001-0236,708,6383,197,7458.71%

2002-0341,786,6893,652,7458.74%

2003-0443,661,3783,997,0109.15%

2004-0532,101,7392,922,1269.10%

2005-0630,090,6322,588,1768.59%

Sugar Production by type of raw Material (In Tonnes)YearSugarcaneBeetRawTotal

2000-012,466,78817,276531,9303,015,994

2001-023,197,74529,17222,1113,249,028

2002-033,652,74522,0661,9453,676,759

2003-043,997,01623,796-4,020,806

2004-052,922,12511,373182,3033,115,801

2005-062,588,1768,934401,3962,998,506

E : Estimated

N.A. : Not Available

Industry Scenario

Sugar industry is mostly located in the rural areas of Punjab and Sindh. A small percentage of total production is produced in the NWFP. Previously, Punjab was partly dependent on supply of sugar from Sindh, but lately the establishment of some large scale units in Punjab has made the Province self-sufficient in the commodity.

Sugar production is seasonal activity. The mills, at an average operate for 150 days, and supplies are made throughout the year. As the industry now has large daily crushing capacity there are efforts to even further reduce.

Province wise sugar production (In Tonnes)Province2005-062004-052003-042002-032001-02

Punjab1,832,2282,182,3302,599,4902,351,1022,152,175

Sindh1,038,122801,0631,221,2681,158,674940,959

NWFP128,157132,407176,252166,983104,611

TOTAL2,998,5073,115,8013,997,0103,676,7593,197,745

EXPORT OF SUGAR, MOLASSES AND ETHYL ALCOHOL

YearQuantity (Tonnes)Value (In 000 Rs.)

Sugar2000-01--

2001-02--

2002-0345,669627,949

2003-04116,1751,589,210

2004-0554,7711,028,710

Molasses2000-011,190,0122,456,573

2001-021,607,3803,898,800

2002-031,272,6302,652,975

2003-041,457,2832,698,964

2004-051,151,4314,297,617

Ethyl AlcoholYearQuantity (Liters)Value (In 000 Rs.)

2000-0110,061,000208,082

2001-0214,594,000341,438

2002-0316,341,575342,658

2003-0435,921,065692,840

2004-0536,669,6881,067,445

It can be seen from the above, that there exists tremendous potential for export of sugar, molasses and ethyl alcohol. In particular molasses needs to be mentioned here as it has shown regular exports over the last few years.

The major buyers are Netherlands, UK, Germany, Spain, Italy and Korea. Netherlands is the biggest buyer with over 40% share in overall exports.

Import of Refined Sugar

YearQuantity

(Tonnes)Value

(In 000 Rs.)

2000-01930,14214,488,243

2001-0285,0371,472,326

2002-038,315152,746

2003-0411,398188,509

2004-05266,7075,288,976

2005-061,527,32237,365,929

Investment Opportunities

Improvement in sugar crop yield through R&D and planning

Improvement in procurement and storage to reduce wastages

Export potential of sugar/molasses

Development of Industries for proper utilization of by-products by adding equipment (distillery, chipboard etc.) which can earn / enhance revenues.

Blending of fuel ethanol with petrol.

Power co-generation by the sugar industry using bagass

CHAPTER 2

HISTORY OF JDW SUGAR MILL

VISION STATEMENT

To become a market leader in the Industry setting out high quality standards for the Company and others to followMission To be the market leader and a world-class organization

by meeting and proactively anticipating customer

needs.

To maximize the wealth of stakeholders by optimizing

the long term returns and growth of the business.

To be amongst the most efficient and lowest cost

producers in the industry.

To ensure a safe, harmonious and challenging working

Environment for the employees.

Strategy To grow our base business

In sugar and build those

Related activities where there

Is opportunity to smooth the

Impact of sugar price cycles.

To produce sugar which

is of highest international

Standards.

To make investment in

sugarcane crop to ensure

regular supply of cane and

profitability of growers.

To offer equal and fair

growth opportunities to all

employees.

To undertake and support

community development and

welfare projects in order to

fulfill social commitments.INTRODUCTION OF THE COMPANY:JDW Sugar Mills limited was incorporated as private limited company on May 31, 1990 under the company ordinance 1984. The company was later converted into public limited company on August 24, 1991 and shares were floated on the Karachi and Lahore Stock Exchanges during August, 1992.

JDW starts its operations firstly in 1992 with one plant and its factory area is almost 100 acres. Now it has two plants, the capacity of first plant is 8,000 tones crushing per day and second plant is 12,000 tones crushing per day. First Plant costs 80 crores in 1992, and Second plant costs 123 crores in 2004.

The main objective of the company is to manufacture and sale of white crystalline sugar and other related objects as set out in the Memorandum of Association of the companyPLANT:Initially, the plant was set up with a capacity of 4000 TCD having 100 acres area which was extended to 6000 TCD and subsequently, the plant capacity has been enhanced to 8000 TCD. A New Tandem is also installed of the capacity 10000 TCD. Now the total crushing of cane is 18000 Tons Crush per Day.

RAW MATERIAL

In Pakistan two ways of Sugar preparation

No- 1

with Sugar Cane

No- 2

with Beet

Rahim Yar Khan is very fertile for sugar cane. The average yield is about 1000 Maunds/Acres (Approx). Due to this the priority Sugar Cane is most beneficial source for this industry. The effort of JDW staff to develop the grower for getting more share of the market and seller satisfaction, JDW introduce the loaning policies for grower on the basis of no interest. The cane department is very active for getting the maximum share of raw material for the factory. This department is adopting value chain process for getting more result for the factory and fastest communication for the grower and production staff.

Products:

JDW Sugar Mills products include Table Sugar, Molasses, Bagasse and Press MudTable Sugar:

Sugar, term applied loosely to any of a number of chemical compounds in the carbohydrate group that are readily soluble in water; are colorless, odorless, and usually crystallizable; and are more or less sweet in taste. Sugar is also known as Sucrose. Table sugar is one of the common food items which have a very huge demand.

Molasses:

Molasses or Blackstrap molasses is the residual liquid food obtained in the manufacturing of raw sugar. The cane juice, or mother liquor, after having been purified, is concentrated into a thick mass. As the sugar crystallizes, this mass is passed through a centrifuge which allows the mother liquor to pass through but retains the crystallized sugar. The resulting molasses is very dark and has a robust somewhat bitter-tart flavor.

Bagasse:Bagasse is the fibrous matter that remains after sugarcane or sorghum stalks are crushed to extract their juice. It is currently used as a biofuel and as a renewable resource in the manufacture of pulp and paper products and building materials. Gave Bagasse is a similar material which consists of the tissue of the blue agaves after extraction of the sap.Press Mud:

Press Mud is a waste produced by the mills. For every tone of Sugar Cane approximately 30 to 40 kg Press Mud is produced. Press Mud is used as manure in the sugarcane fields. Distillery effluent (vines) is also mixed with Press Mud and made into compost.

CHAPTER 3ORGANIZATIONAL ANALYSISSWOT AnalysisStrengths: JDW is a market leader. JDW Sugar Mills are in secure areas that is the state of JDW owners.

There is no labor union in this organization.

Have a wide setup farms and the land of linked areas is fruitful for cane production.

Have a wide set up of farms

Using manpower on large scale.

Is in maturity stage in organization life cycle.

JDW has much experienced, qualified and competent employees in each department.

Weaknesses:

JDW is using manpower on large scale so expenses are high.

Lack of departmental coordination

Opportunity:

We can use beet as an input in future

After the implementation of car financing scheme transport matters will be solve.

In these days there is no situation of drought and recovery of per acer of cane will be increase

We can attract growers from district Ghotiki as well as Rajan pur

Threats: May be competition will increase

They can shift from maturity stage to decline stage

The advertising campaign may be need in future

It is possible that in future we will face switching cost.

PEST Analysis

Political Instability:

The political situation of Pakistan is not satisfactory. Due to the rapid change in the Government every government sets its own new trade policies.Govt. should apply sustainable policies for the beneficial of the exporters as well as the investors.

Economic situation:

The economic condition of Pakistan can also affect the foreign investors increasing inflation rate make the cost of production high and thus reduce the profit margin of the investor.Social situation:

The change in the lifestyle of the people affects the growing demand of the sugar. The change in the lifestyle and needs in different demographics also affect the demand of the customers.

Due to all these changes JDW is performing excellent for the excellence organization as well as for the customer.

Technological factor:

Technological advancement in all the sectors of the country has changed the entire socio-economic environment. Especially in the Sugar sector there is a lot of technological development.

JDW Excellent computerized machines and devices are installed in the JDW Sugar mills have made extension in its present setup by installation of well advanced technology imported from Japan China and France.

Balance Sheet20102009200820072006

SHARE CAPITAL & RESERVES

Share capital 489,889,470442,840,570381,254,260315361900260301580

reserve 2,921,051,7451,414,607,0091,180,814,247893285422915425481

3,410,941,5151,857,447,5791,562,068,5071,208,647,3221,175,727,061

NON CURRENT LIABILITY

Loan from Director-unsecured-260,900,000260,900,000260,900,000150,000,000

Long term financing25718888902,077,777,7782,200,000,0002,086,287,8802,169,166,666

Payable to USM ltd shareholders245,000,000

Liabilities against assets subject to finance lease528665198329,960,452353,881,872328,038,520163,482,459

Deferred taxation-175,286,23479,710,55643,959,892

Deferred liabilities1295662797718,563,0627,890,204

Deferred income-3,945,10412,132,409

4,396,216,8853,391,146,3962,997,958,3102,767,069,3652,771,609,017

CURRENT LIABILITIES

Short term borrowings-secured22852909713,671,524,9121,970,380,6362,316,752,803358,023,441

Current portion of non current liabilities1013482464591,564,179154,934,612447,164,952458,993,001

Trade and other payables665390967667,632,4081,161,679,843348,515,313296,580,473

Interest and Markup accrued136129479172,466,64995,254,218155,287,17196,568,476

Provision for taxation25796524658,879,77721,281,831

Total 4,358,259,1275,162,067,9253,382,249,3093,267,720,2391,231,447,222

12,165,417,52710,410,661,9007,942,276,1267,243,436,9265,178,783,300

ASSETS

NON CURRENT ASSETS

Property, plant and equipment3,191,942,9003,094,551,187

Operating fixed assets6,893,409,1434,726,936,4323,237,354,576

Capital work in progress46,062,57011,579,549769,240

6,939,471,7134,738,515,9813,238,123,816

Investment property419,348,133350,753,636

Investments 797,572,5691,313,567,5001,868,079,6831,583,808,492986,308,492

Goodwill 608,310,693568,545,391

Long term deposits84,408,64848,445,89936,991,97933,809,76919,242,454

1,909,640,0435,143,195,4784,809,561,1614,100,102,133

CURRENT ASSETS

Stores, spare parts and tools 391,144,991283,562,979159,419,324149,622,246169,524,190

Stock in trade-finish goods 206,682,0111,436,296,905598,629,031358,188,760

Trade debts-unsec-considered goods142,95636,588,05643,285,232131,034,562

Advances, prepayments & receivables 2,707,394,0091,629,416,9091,954,506,6571,773,008,013903,799,694

Tax refunds from Government1,431,700

Advance income tax40,839,672

Cash and bank balances 10,941,8043,536,9442,400,7322,022,1845,357,283

3,316,305,7713,390,833,4932,799,080,6482,433,875,7651,078,681,167

12,165,417,52710,410,661,9007,942,276,1267,243,436,9265,178,783,300

PROFIT AND LOSS ACCOUNT

P AND L ACCOUNT20102009200820072006

Sales net20,392,207,7937,572,724,3956,166,723,4104,237,940,7354,226,409,886

Cost of Sales (16,744,461,278)(5,670,105,049)(4,940,988,666)(3,536,948,165)(3,268,822,879)

Gross profit 3,647,746,5151,902,619,3461,225,734,744700,992,570957,587,007

Administrative exp(344,195,411)(177,689,911)(116,922,719)(98,730,161)(102,235,214)

Distribution and marketing exp (11,956,057)(14,781,631)(75,020,261)(5,758,919)(5,381,466)

Other operating exp-net(212,051,150)(103,133,734)(60,765,600)(4,272,078)(15,380,323)

other operating income47,729,19823,289,81639,309,69180,402,0783,872,560

Workers profit participation fund(5,713,756)(22,455,044)

Workers welfare fund(2,171,227)(2,133,229)

(520,473,420)(272,315,460)(213,398,889)(36,244,063)(143,712,716)

Operating profit3,127,273,0951,630,303,8861,012,335,855664,748,507813,874,291

Finance cost(1,168,439,503)(870,430,469)(560,645,479)(558,358,372)(389,361,680)

Share of loss of associated companies(6,957,792)

Profit before taxation1,951,875,800759,873,417451,690,376106,390,135424,512,611

Taxation(711,473,399)(257,820,317)(100,939,177)(35,750,664)(58,303,185)

Profit after taxation1,240,402,401502,053,100350,751,19970,639,471366,209,426

Basic earning per share28.2011.349.202.2411.72

Diluted earning per share28.2011.349.202.22-

Vertical Analysis:

Vertical Analysis of Balance SheetBalance Sheet20102009200820072006


Share capital 10090.477.8264.3753.13

reserve 10048.4340.4230.5931.34


Loan from Director-unsecured-10010010057.49

Long term financing10080.7985.5481.11284.34

Payable to USM ltd shareholders----

Liabilities against assets subject to finance lease10062.4166.9462.0530.92

Deferred taxation--10045.4725.08

Deferred liabilities10055.46.61--

Deferred income-100-307.53-

CURRENT LIABILITIES

Short term borrowings-secured100160.6686.22101.3815.67

Current portion of non current liabilities10058.3715.2944.12245.29

Trade and other payables100100.34174.5952.3844.57

Interest and Markup accrued100126.6969.97114.07370.94

Provision for taxation10022.82--8.25

Total

ASSETS

NON CURRENT ASSETS

Property, plant and equipment---10096.95

Operating fixed assets10068.57146.96--

Capital work in progress10025.1391.67--

Investment property10083.64---

Investments 100164.69234.22198.58123.66

Goodwill 10093.46---

Long term deposits10057.3943.8240.0522.81

CURRENT ASSETS

Stores, spare parts and tools 10072.5140.7638.2543.34

Stock in trade-finish goods100694.93289.64173.304-

Trade debts-unsecured considered goods10025,59430,27991,661-

Advances, deposits, prepayments and other receivables 10060.1872.19165.4933.38

Tax refunds from Government-100---

Advance income tax--100--

Cash and bank balances 10032.322.19201.2748.96

100100100100100

Horizontal Analysis:

Horizontal Analysis of Balance SheetBalance Sheet20102009200820072006


Share capital 4.27%4.25%4.8%4.354%5.026%

reserve 24.01113.5914.86712.33217.676


Loan from Director-unsecured-2.513.2853.6022.896

Long term financing21.4119.95827.728.80241.886

Payable to USM ltd shareholders

Liabilities against assets subject to finance lease4.3463.1694.4564.5293.157

Deferred taxation--2.2071.1004.849

Deferred liabilities10.656.902.099

Deferred income.0379.167

CURRENT LIABILITIES

Short term borrowings-secured18.78535.26724.80931.9846.913

Current portion of non current liabilities8.3315.6821.9516.1738.863

Trade and other payables5.476.41314.6274.81155.727

Interest and Markup accrued1.1191.6571.202.1441.865

Provision for taxation2.204.566.411

Total

ASSETS

NON CURRENT ASSETS

Property, plant and equipment4.40659.754

Operating fixed assets56.66445.40540.76

Capital work in progress.379.111.0097

Investment property3.4473.369

Investments 6.55612.61723.52121.86519.045

Goodwill 5.0035.461

Long term deposits.694.465.466.467.371

CURRENT ASSETS

Stores, spare parts and tools 3.2152.7242.0072.0663.273

Stock in trade-finish goods1.713.7977.5374.945

Trade debts-unsecured considered goods.0012.351.5451.809

Advances, deposits, prepayments and other receivables 22.25515.6524.60924.47717.452

Tax refunds from Government.0137

Advance income tax.514

Cash and bank balances .0899.034.003.0304.0104

HORIZONTAL PROFIT AND LOSS ACCOUNT

P AND L ACCOUNT20102009200820072006

Sales net100100100100100

Cost of Sales (82.112)(74.87)(80.123)(83.459)(77.43)

Gross profit 17.88825.12519.87716.54122.657

Administrative exp(1.688)(2.346)(1.896)(2.33)(2.419)

Distribution and marketing exp (.059)(.195)(1.216)(.136)(.127)

Other operating exp-net(1.04)(1.362)(.985)(.101)(.364)

other operating income.234.307.6371.897.0916

Workers profit participation fund(.135)(.531)

Workers welfare fund(.051)(.0505)

Operating profit15.33621.52916.41615.6819.257

Finance cost(5.73)(11.494)(13.455)(13.175)(9.213)

Share of loss of associated companies(.0341)

Profit before taxation9.57210.0347.3252.5110.044

Taxation(3.489)(3.405)(1.637)(8.433)(1.379)

Profit after taxation6.0826.635.6881.678.665



VERTICLE PROFIT AND LOSS

P AND L ACCOUNT20102009200820072006

Sales net10037.1330.2420.7820.72

Cost of Sales (100)(33.86)(29.51)(21.12)(19.52)

Gross profit 10052.1633.6019.2226.25

Administrative exp(100)(51.62)(34)(28.68)(29.7)

Distribution and marketing exp (100)(123.63)(627.5)(48.17)(45.01)

Other operating exp-net(100)(48.64)(28.66)(2.015)(7.25)

other operating income10048.8182.36168.458.11

Workers profit participation fund---100393

Workers welfare fund---10098.25

Operating profit10052.1332.3721.2626.02

Finance cost(100)(74.5)(47.98)(48)(33.32)

Share of loss of associated companies(100)

Profit before taxation10038.9323.145.4521.75

Taxation(100)(36.24)(14.187)(5.025)(8.19)

Profit after taxation10040.4728.285.6929.52



RATIO ANALYSIS

Current Ratio

The current ratio is obtained by dividing the current assets by current liabilities. Current assets normally includes: cash, marketable securities, account receivable and inventories.Formula

The formula of current ratio is:

Current ratio = Current assets / Current liabilities

Computation

Year Current AssetsCurrent LiabilitiesRatio

200610786811671231447222.86

200724338757653267720239.745

200827990806483382249309.83

200933908334935162067925.66

201033163057714358259127.761

Conclusion:

The bench mark for the ratio is 2:1. However it is acceptable at 1.75:1. the current position of the company for the last five years is not good it shows that company is heavily relying on short term financing. The company may face liquidity problem if it does not improve its current ratio.

Net Profit Margin

Net profit margin is calculated by divided EAT by sales. it is the percentage of sales which is the profit. It should be high as it means that the cost of incurring production is low.

Formula

The formula of ratio is:

Net profit margin = net profit after taxes / net sales

Computation

Year Net profit After TaxSales Ratio

20063662094264226409886.087

2007706394714237940735.167

20083507511996166723410.057

20095020531007572724395.066

2010124040240120392207793.068

Conclusion:

It shows the overall profitability of the company after all the expenses is being paid it also shows how much profit is left for shareholders. The companys net profit is 6.8% for the last year and it is making an average profit of 8.9% which is good for the company.

Gross Profit Margin

The gross profit margin is calculated by dividing gross profit by sales. This the percentage of sales which is the gross profit as percentage of sales. The difference of this percentage from 100% gives the percentage of cost of goods sold.

Formula


Gross profit margin = Gross profit / net sales

Computation

Year Gross ProfitSales Ratio

20069575870074226409886.227

20077009925704237940735.165

200812257347446166723410.199

200919026193467572724395.251

2010364774651520392207793.179

Conclusion:

The gross profit is the result of relationship between prices, sales volume and costs. A high ratio to gross profit to sales is a sign of good management as it implies that the cost of production of the business is relatively low.

A relatively low gross margin ration is definitely a danger signal. Requiring a careful and detailed analysis of the factors responsible for it.

The current margin of the company is good as it is making an average margin of 20%.

Operating Profit MarginThe operating profit margin is calculated by dividing operating profit by sales. This the percentage of sales which is the operating profit as percentage of sales. The difference of this percentage from 100% gives the percentage of cost of goods sold and operating expenses incurred.

Formula


Operating profit margin = Operating profit / net sales

ComputationYear Operating Profit Sales Ratio

20068138742914226409886.193

20076647485074237940735.157

200810123358556166723410.164

200916303038867572724395.215

2010312727309520392207793.1533

Conclusion:

This ratio measures the relationship between operating profit and sales of a business.

It also shows how much operating expense are being incurred in the business. A high operating ration indicates that management is efficient in controlling the expenses while a low operating ration reflects management in-efficiency towards expenses. The current position shows an average operating profit margin of 17.6% which is a good sign for the manufacturing company.

Return on total assets:

The ratio of net income to total assets measures the return on total assets. This shows that how much of the profit is due to assets or how much is the profit on assets. It should be high in manufacturing oriented firm.

Formula:The formula of ratio is:

Return on asset = net profit after taxes / Total assets

Computation

Year Net Profit After TaxTotal AssetsRatio

20063662094265178783300.0707

2007706394717243436926.0097

20083507511997942276126.0442

200950205310010410661900.0482

2010124040240112165417527.1012

Conclusion:

It shows how much net profit is being generated on every Rs. 1 asset invested in the business. It also shows how efficiently the assets are being utilized. The average return on assets ratio is .055:1 which is good for the such industry.

Basic earning power:The basic earning power ratio is calculated by dividing earning before interest and taxes this ratio shows the raw earning power of the firm assets before the influence of taxes and leverages.

Formula


Basic earning Power = EBIT / Total assets

Computation

Year EBITTotal AssetsRatio

20068138742915178783300.157

20076647485077243436926.092

200810123358557942276126.128

2009163030388610410661900.156

2010312727309512165417527.257

Conclusion:

It shows how much Earning before inters and tax is being generated on every Rs. 1 asset invested in the business. It also shows how efficiently the assets are being utilized. It shows an average ratio of 0.158:1 which is good for the company.

RETURN ON EQUITY

This ration is calculated by dividing the profit after tax to equity shareholders fund.

Formula:

Return on equity = PAT / equity shareholders fund

Computation Year Profit After TaxShare CapitalRatio

20063662094262603015801.41

200770639471315361900.227

2008350751199381254260.792

20095020531004424805701.133

201012404024014898894702.532

Conclusion:

This ratio measures the profitability of the company in relation to the funds supplied by the shareholders. The higher the ration, the more efficient shareholders funds provided.

The current position of the company reflects a higher increase in shareholders equity as compare to last years.

DEBT RATIO

It is calculated by dividing total liabilities to total assets

Formula :

Debt Ratio = Total liabilities / total assets

ComputationYear Total LiabilitiesTotal AssetsRatio

20064003056239517878330077.3

20076034789604724343692683.313

20086380207619794227612680.332

200985532143211041066190082.16

201087544760121216541752771.962

Conclusion:

It shows how much assets are available in order to meet the total liabilities of the company.

Average collection period

It is also called average collection period it is calculated by dividing the number of days in year by receivable turnover. This ratio shows after sales how many days after which the account receivable are received.

Formula

The formula of receivable turnover is:

Receivable collection period = Receivables / sales * 365ComputationYear Sales Receivable*365 Ratio(day)

2006--

2007423794073513103456211

20086166723410432852323

20097572724395365880562

2010203922077931429560

Conclusion:

This ratio measures the average period taken by receivable to pay the amount due to the company. High receivable payment period shows too much investment in the working capital.

The current position of the company in respect of collecting payments from customers is very good. In 2010 almost all the sales were on cash. However the average for last five years is 3 days.

Payables payment period:The payable turnover in days means after credit purchases how many days after which the credit are paid. this shows the firm ability to manage and release debts. It should be greater then the receivable turnover in days.

Formula


Payable payment = Payables / Cost of Sales * 365ComputationYear Cost of SalePayables *365Ratio

2006326882287929658047333

2007353694816534851531336

20084940988666116167984386

2009567010504966763240843

20101674446127866539096715

Conclusion:

This ratio measures the average period taken by the company to pay the amount due to the payables. If the payables payment period is low, that shows over capitalization of the company since the company is taking less credit from creditors. The current position of the company shows that company is meeting its short term financing needs by utilizing payables money.

CHAPTER 4

Internship Experience

Concerned Department Information:

Admin Department:

I worked in Account Office under the Admin department in GL Office.Following departments worked under the Admin Manager

a) Personal Office

b) MIS Office

c) Time Office

d) Firefighting Section

e) Canteen

f) Security

g) Account officeAdmin department look after almost all the departments at mill. At accounts office there is a head along with 3 assistants to deals all the financial especially the growers accounts and loans matters of growers.

Duties and Responsibilities:

Growers AccountsIn growers accounts I make voucher of sugar cane grower on the voucher weight of the sugar cane amount and the amount and the bank name where they want to transfer there amounts were written. Firstly I made vouchers of growers and than make there entry in the software in there accounts. Salary AccountsIn salary accounts I transfer the salary of the permanent workers to there accounts and make voucher of daily wages workers and adjust bonuses to all employees accounts and deduct the amount of the loan an employee taken in advance from the company.

Loan AccountsIn loan account I deal with growers loan account the loan they take from company for fertilizers and water and machinery and make there accounts and adjust there balance.

Maintenance budget AccountsIn this account I deal with the budget we got for refreshment and for stationary.

Accomplishment / Achievement:

It was a tremendous experience that I have availed with devotion and commitment. I have an interest in sugar industry thats because that industry has a largest scope and a huge weight in the economy of the country after textile. But one thing I want to share its not easy that looks it has a great toughness and complications in its process but the overall it was nice and great. Here I am sharing some of my learning regarding my internship in different departments.

First I met Mr. Safder the admin manager of JDW Sugar Mills who introduced me in the organization. I discussed about the admin and financing practices going on in the sugars mills. Here I know how to target your customer after knowing needs with product solution of the customer need.

I learnt that every problem is solved with a systematic process like from the root of the problem.

I also performed some task in the admin department and there I familiar the dealing with the labor.

I learnt about the marketing procedure and required of the documents and dealing with customers.

During my internship I learnt about the value that customer is the only who come first. The fulfillment of the demand of customer is our basic motive.

The quality control as well inception in the sugar industry should be parallel.

I learnt about the growers account and issuing loan conditions. I learnt how to make the budget and salaries.

Skilled Acquired:

Internship was the first experience for me to work in any organization and during this tenure I learned many things which will be very beneficial for my professional life being the first experience it proved for me very educative and courageous. New things which I experience are as follows:

First hand knowledge:

During my internship I got the first hand knowledge about documentation working environment and management. During this session I learned how to maintain documents and how we gather information from customer in tactful ways.

Managing the environment:

I learned how officer of any organization can manage the duties of staff and how he can motivate their employees for getting desire output from them. I got the understanding for making the polices regarding the employee management and provision for incentives to its worker like bonuses, flexible working environment and working hours etc.

Business knowledge acquired:

I learned pure business knowledge and its requirements while in books we are only able to make the theoretical view of rules and regulation of any business but by experiencing them personally I understand that how we can make our business successful and how we can capture the market shares of our competitors.

Problem Encounter:

No doubt I learnt a lot of knowledge and it was a good experience for me but during this session I have to face some problems like:

In the beginning days it was somehow difficult for me to mix up with new environment and people but after some period I became use to with it and become a part of mill like other employees and felt very comfortable.

Mostly people of my area are agriculturist and are not educated so some times I have to face problem to convince them about the rules and regulations of males operations like in growers account opening etc

There is no separate common room for ladies where they can rest during break

How experience impact on my career:

Internship impacts my career as:

My internship experience has given me a practical preview of my field of education and after this experience I am feeling that I am going to be prepared for in the professional life.

Every activity which I performed and learned in each department of Mill was having a new experience in its self. After learning the task of each department I realized that I have a potential to enter in professional life and it also taught me how I can make things possible and complete assigned tasks.

I realized that earning of money is not an easy task we have to do work with full concentration and hard work. I realized that we not only have to give full devotion but we all manage our work with in estimated time.

As my internship is in a one of the top leading organizations and JDW has a good name in market so in future it will be beneficial for me to seek a good job.

Our all experience of my internship was very good and I have learned the sense of responsibility and how I can say that I am getting prepare to deal with different type of costumer and how I can interact with them to convince for some specific topic with patience. In nut shell this internship gave me the experience which will enhance my capacities and will boost up my confidence to work In future.

Pros & Cons:

Advantages:

JDW is market leader

JDW sugar mills are in secure areas that is the state of JDW owners.

There is no labor union in this organization.

We have wide setup farms and the land of linked areas is fruitful for cane production.

We have wide set up of farms

We are using manpower on large scale.

We are in maturity stage in organization life cycle.

JDW has much experienced, qualified and competent employees in each department.

Disadvantages:

We are using manpower on large scale so expenses are high.

Lack of departmental coordination.

The mill does not hire the highly professional and expertise.

Financial performance of the mill in last one year is not satisfactory.

The mill is not focusing on the market function. At present there us huge competition in the sugar industry especially in Pakistan. Therefore there is need to focus on the marketing function to get the market share. The marketing efforts of the mill are not satisfactory.

In JDW Sugar Mills the distribution of work load is not fair and equal. The employees has a huge burden of workload where as the other has a very low burden of workIdentification of problems:

During my internship in JDW sugar mills I identified some problem that should be removing.

These problems were:

Possible problems:

Administration does not have a control on stationary expenditures I have seen people got print out for their personal use.

Procedure for growers account opening is quite complex and requires lot of formalities.

Procedure for applying loan facility was quite complex.

There is trend of reference based hiring of workers. The customers who is a valuable account holder of JDW he can plays a person as an employee of the JDW with his strong reference.

Customers Problems:

There is no importance given by the JDW to the lower grower account holder customer and mill management doesnt give the proper importance of that customers.

Employees Problems:

Employees of JDW sugar mills are also having the following problem:

Working Hours:

JDW mills provide customers service in better way but there is lot of work to do in a routine working to employee due to which they work for long time and have a short time to be relaxed.

Bus Service:

Employees should provide bus service to reach on time.

Bonuses:

Distribution of bonuses and other incentives are not distributed equally.

Medical facility:

Medical facility is provided only in mills but the other management could not avail it.

Training:

There is no training offered by the employees to familiar the new technologies and for polishing their skills and knowledge.

CHAPTER 5Suggestions and Recommendation:

Some of the recommendations that I would recommended to some of the problems discussed in the above section, that might increase the efficiency of both the operations and employees of JDW Sugar Mills are as follows: Recommendations: At present facility of bonus is given only to production staff but such incentives should also be given to Head office Staff.

Special incentives should also be given to Head on Eid and on other special days should be given to the workers.

Medical facilities are given in mill but such facilities should also be given to management.

Different training courses should be arranged for the up lifting and improving the quality of work for employees

They provide transportation facility to only female employees I think male should also be provided with conveyance convenience. This will create the easiness for workers and reduce the wastage of time.

There is also a problem of work overload for the employees and it should be control properly so that the employees are motivated.

Employees should be paid extra for the work which they done after working hours.

Improvement in sugar crop yield through R&D and planning

Improvement in procurement and storage to reduce wastages

Export potential of sugar/molasses

Development of Industries for proper utilization of by-products by adding equipment (distillery, chipboard etc.) This can earn / enhance revenues.

Blending of fuel ethanol with petrol.

Power co-generation by the sugar industry using BagasseConclusions:

JDW Sugar Mills is one of the leading groups in Pakistan. The system, the management style, the policies & decentralized decision making environment is really remarkable. This report is basically an attempt to identify the areas which need to be improved.

In this era of technology, the Information is the key to success in the business. This means that the successful businessman will be who will have the right information at the right time. This comment leads to the conclusion that the Information Sharing Process should really be improved.

The overall analysis is indicating that the companys progress has mainly attained through dedication of employees. The effectiveness of its management, their willingness to take advantage of opportunities and face challenges of changing economic picture, this all contributes to the very much improved and sound position of company. This is really appreciable for the devotion and hard work of all the employees of the company.References:

http://www.jdw-group.com/Reports/JDW%20ACCOUNTS_2008.pdfhttp://www.jdw-group.com/Reports/JDW_AR_2009.pdfhttp://www.jdw-group.com/Reports/JDW%20accounts_2010.pdfhttp://www.jdw-group.com/OurReports.htmlhttp://www wikipedia.com/crystalline sugarhttp://www.subcribe.comMr. Azher Pervaiz Technical Manager

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jdw

Documents

sugar mills

production of sugar

sugar manufacturing

sugar cane cultivation

history jdw sugar

pakistan sugarcane area

yield yeararea

approx average yield