super asia mds (athar)

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PRE FACE This internship report is being filed as a partial requirement in fulfillment for the Degree of Bechlor of business administration. The internship report is based on Super Asia MDS LTD. The report includes all of the important aspects regarding the organization, its history, its structure, functions of its department, and the holistic financial analysis of the company. The internship was carried out at the Accounts department of the company in order to acquire deep understanding of the functioning of the organization and also to fulfill the requirement of the degree. The benefits that I believe I have (or will) gain from this internship includes the following:

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Page 1: Super Asia MDS (Athar)

PREFACE

This internship report is being filed as a partial requirement in fulfillment for

the Degree of Bechlor of business administration. The internship report is based on

Super Asia MDS LTD. The report includes all of the important aspects regarding the

organization, its history, its structure, functions of its department, and the holistic

financial analysis of the company.

The internship was carried out at the Accounts department of the company in

order to acquire deep understanding of the functioning of the organization and also to

fulfill the requirement of the degree.

The benefits that I believe I have (or will) gain from this internship includes the

following:

Gain Valuable Work Experience

Have an Edge in the Job Market

Transition into a Job

Decide if this is the Right Career for Me

Networking Opportunities

Apply Classroom Knowledge

Gain Confident

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ACKNOWLEDGMENT

 All praises and thanks to Almighty Allah. The Lord and Creator of this universe by

whose power and glory all good things are accomplished. He is also the most

merciful, who bestowed on me the potential, ability and an opportunity to work

on this project.

I am grateful to my respected teacher Mr. Hafiz Imran Akram who has

guided me in each and every step of this project. Indeed, without his

kind guidance I may not be able to even start this project. May ALLAH give him

the reward which he deserves. I am also grateful to all those members who are related

to Super Asia MDS Ltd.

Despite of the most hectic schedule, Sir Muhammad Iqbal Cheema (CFO)

helped me so much. I'm really grateful to him for clarifying my concepts

and making me learn from his experience. Whatever I learnt from him will

definitely help me in my upcoming study and the professional life ahead.

Thank him so much for being so co-operative and so helpful every time. I hope

Sir I have been up to your expectations.

In the end, I am thankful to all my teachers and have a lot of prayers for them who

give me the knowledge and make me able to complete my Bachelor’s

degree. Here I have special thanks for Mr. Hafiz Imran Akram whose supervision

guided me to complete my final project.

Muhammad Athar Ali

Muhammad Athar Ali 2 Punjab University Gujranwala Campus

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DEDICATION

“I dedicate my report to my PARENTS and respected TEACHERS who taught me and

guided me on every step of my life.

Muhammad Athar Ali 3 Punjab University Gujranwala Campus

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INTERNSHIP LETTR

Muhammad Athar Ali 4 Punjab University Gujranwala Campus

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Table of Contents

1.0 Executive summary 7

2.0 Industry Introduction 9

3.0 Overview of the Organization 13

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3.1 Brief History 13

3.2 Nature of the Organization 14

3.2.1 Vision Statement 14

3.2.2 Mission Statement 14

3.2.3 Main Features 15

3.2.4 Competitors 19

4.0 Organizational Structure 20

4.1 Number of Employees 21

4.2 Main Offices 21

4.3 Introduction to all department 22

4.4 Comments on Organizational Structure 37

5.0 Work Done by Internee 39

6.0 Financial Statement 42

6.1 Balance Sheet 42

6.2 Profit & Loss A/c 43

7.0 Financial Analysis 44

7.1 Liquidity Analysis 44

7.2 Activity Analysis 47

7.3 Solvency analysis 50

7.4 Profitability Analysis 53

7.5 Return Analysis 55

8.0 SWOT Analysis 56

9.0 Conclusion 62

10.0 Recommendations 68

11.0 Limitations 72

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12.0 Bibliography 73

13.0 Glossary 74

14.0 Annexure 75

1.0 EXECUTIVE SUMMARY

Super Asia is rightly rated as largest growing industry of Gujranwala. It is a

true example of progress made by leaps and bounds.

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Super Asia is divided into units based on the products e.g. there is different

unit for fan and a different unit for motorcycle production. There are four departments

which serve all production units namely: marketing, HR, sales, and accounting

departments. Almost every department except HR department, which consists of a

single HR manager, has a supervising manager and assisting staff working under him.

Marketing department use a wide range of tactics to enhance sales ranging from TV

advertisements to lucky draws. HR department is not performing all the functions in

the manner in which it should perform. Sales department works parallel to and in

collaboration with marketing department and has a sales force as assisting team to

sales manager.

Related Department of Internship

The main focus of the project is the evaluation of accounting system and cost

efficiency. The accounting department is headed by a chief accountant who is also

General Manager of the company. Accounting department serves all production units.

Manager Accounts deals with routine and operational matters of Accounting

Department. This department also performs the functions of Costing, Cost

Accounting, and Finance. In its accounting function, department performs recording,

summarizing, classification, and reporting as well. Company uses an integrated

system of accounts with perpetual inventory system. A customized accounting

software (Finance Manager), not very different from other available in market, is used

in the company. Costing function is not up to the mark as expected in such a large a

fast-growing industry. Standard and process costing is used. There is not consistent

policy for costing material issues. No separate material wastage reports are prepared.

Labor costing is done by using payrolls and time records. Manual time records are

used. Factory overheads are absorbed using production as a base. Monthly Budgets

are regularly prepared. Entry for sales is booked when GDN is communicated to

Accounting department by Godown, and entry for purchases is booked when invoice

is received from supplier. There is no defined policy for settling payables and

receivables, and settlement is mostly done on the directions of directors. The detailed

production process is explained in annexed chart.

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Starting & Ending Dates of Internship

July 4, 2013 to August 15, 2013

There were no major flaws found in accounting system of Super Asia with the

exception of some small discrepancies. Costing System was not up to the mark as it

should have been for such a large organization with such huge growing trends. Also,

the typical conservative mentality of owners can be seen in the inadequate and

insufficient safety measures for the working labor on dangerous machines. Less focus

on HR functions is also another example. Company should understand its growing

needs and should come out of the conservative frame of mind of operating business.

Their business is growing and they must modernize their culture and systems to cope

for the growing needs.

As a concluding note, it is observed that small businesses, with conservative

and with owners having wither no or traditional education, recent to the

modernization of culture and ways of doing business. When these small businesses

grow into large organizations, their typical mentality is automatically inherited. This

is the case with Super Asia. May be, they are doing a fine business at the present

stage, but they have to accept the fact that a revolutionary change in their

organizational culture and structure is required to cope for the prospective needs of

their immensely growing business.

2.0 INDUSTRY INTRODUCTION:

History of Washing Machine Industry:

Ancient peoples cleaned their clothes by pounding them on rocks or rubbing

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them with abrasive sands; and washing the dirt away in local streams. Evidence of

ancient washing soap was found at Sapo Hill in Rome, where the ashes containing the

fat of sacrificial animals was used as soap. The earliest washing "machine" was the

scrub board invented in 1797. American, James King patented the first washing

machine to use a drum in 1851, the drum made King’s machine resemble a modern

machine, however it was still hand powered. In 1858, Hamilton Smith patented the

rotary washing machine.

In 1874, William Blackstone of Indiana built a birthday present for his wife. It

was a machine which removed and washed away dirt from clothes. The first washing

machines designed for convenient use in the home.

History of Fans Industry:

Fan history stretches back thousands of years. Since antiquity, fans have

possessed a dual function a status symbol and a useful ornament. In the course of their

Development, fans have been made of a variety of materials and have included

Artwork. The simplest fans are leaves or flat objects, waved to produce a

cooler atmosphere. These rigid or folding hand-held implements have been used for

cooling, for air circulation, as a ceremonial device, and as a sartorial accessory

throughout the world from ancient times. They are still widely used.

The earliest known fans are called 'screen fans' or ‘fixed leaf fans'. These were

Manipulated by hand to cool the body, to produce a breeze, and towards off insects.

Early fans usually took the form of palm leaves. Some of the earliest known fans have

come from Egyptian tombs. Early Assyria and Egypt employed slaves and servants to

manipulate the fan. In Egyptian reliefs, fans were of the rigid type. Tutankhamen's

tomb Possessed gold fans with ostrich feathers, matching depictions on tomb walls.

Long-Handled, disk-shaped fans were carried by attendants in ancient times and were

associated with regal and religious ceremonies. They had handles or sticks attached to

a rigid leaf or to feathers. Plumage of birds was used in fans, such as those of the

Egyptians and Native American Indians, which had both practical and ceremonial

uses.

History of Air Conditioner Industry:

The idea of air conditioning started before a machine was Created to produce

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the cooling effect desired. The first attempt at building an air conditioner was made by

Dr.John Gorrie (1803-1855), an American Physician, in Apalachicola, Florida.

During his practice there in the 1830s, Dr. Gorrie Creating an ice- making

machine that essentially blew air over a bucket of ice for cooling hospital rooms of

patients suffering from malaria and yellow fever. A close ancestor to the modern air

conditioner units was first made in 1902 by an American engineer by the name of

Willis Carrier. The machine at that time was called "Apparatus for Treating Air” and

was built for the Sackett-Wilhelms Lithographing and Publishing Co. in Brooklyn,

New York. Chilled coils were used in the machine to cool air and lower humidity to

55%, although the apparatus was made with enough precision that the humidity

level desired was adjustable. After the invention by Carrier, air conditioners began to

bloom.

They first hit the industrial buildings such as printing plants, textile mills,

pharmaceutical manufacturers, and a few hospitals. The first air-conditioned home was

that of Charles Gates, son of gambler John "Bet a Million" Gates, in Minneapolis in

1914. However, during the first wave of their installation, Carrier's air

conditioner units were large, expensive, and dangerous due to the toxic ammonia

that was used as coolant. In 1922, Carrier had two breakthroughs - he replaced the

ammonia with the benign coolant dyeline and added a central compressor to reduce the

size of the unit.

Today, air conditioners have been said to be a partial cause for the changes in

the South, and for most of us who have experienced its cooling benefits in times of

searing heat waves, it is an invention that is hard to live without.

History of Geyser Industry:

In the 1870s, Englishmen, Maugham invented the first instant water

Heater. Little is known about Maugham’s invention; however, his invention influenced

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the Designs of Edwin Rued. Edwin Rued, a Norwegian mechanical engineer was the

inventor of the automatic storage water heater in 1889. Rued immigrated to Pittsburgh

where he pioneered the early development of both residential and commercial water

heaters.

History of Water Dispenser and Water Coolers Industry:

The water fountain as we know it was first invented in the early 1906 and is

credited to two men - Halsey Willard Taylor and Luther Haws. Haws patented the first

drinking faucet in 1911. From those humble beginnings, when water coolers used

large blocks of ice to chill the water, to the self-contained electric water cooler in 1938,

there are now a plethora of models and types to fit every need. Although first "barrier-

free" electric water cooler was invented in 1972 by the Haws Corporation, it wasn't

until the passage of the Americans with Disabilities Act in 1990 that these accessible

water coolers came into their own.

Bottled water dispensers have been around since before the middle of the 20th

Century. These units depend on gravity to provide the water in a free standing unit.

Cooling units were added later. Today, many water coolers or dispensers include A

heating element to provide hot water along with chilled water. Some are even offered

in Designer colors and shapes to fit into any décor.

History of Microwave Oven Industry:

The microwave oven did not come about as a result of someone trying to

find a better, faster way to cook. During World War II, two scientists invented the

magnetron, a tube that produces microwaves. Installing magnetrons in Britain’s radar

system, the microwaves were able to spot Nazi warplanes on their way to bomb the

British Isles. By accident, several years later, it was discovered that microwaves also

cook food. Called the Radar Range, the first microwave oven to go on the market was

roughly as large and heavy as a refrigerator.

The idea of using microwave energy to cook food was accidentally discovered

by Percy LeBaron Spencer of the Raytheon Company when he found that radar waves

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had melted a candy bar in his pocket. The first Raytheon commercial microwave oven

was the 1161 Rearrange, which was marketed in 1954. In 1967, Amana, a division of

Raytheon, introduced its domestic Rearrange microwave oven, marking the beginning

of the use of microwave ovens in home kitchens. Although sales were slow during the

first few years, partially due to the oven’s relatively expensive price tag, the concept of

quick microwave cooking had arrived. In succeeding years, Litton and a number of

other companies joined the countertop microwave oven market. By the end of 1971,

the price of countertop units began to decrease and their capabilities were expanded.

3.0 OVERVIEW OF THE ORGANIZATION:

3.1 Brief History:

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Super Asia is family owned business. It was founded approximately 32 years ago

as a privately held factory of washing machines. The founder of factory was Mr. Hajji

Muhammad Din (Late). The main campus of factory with its five departments is

situated near Chun Da Qila GT Road Gujranwala.

The mission of Super Asia focused on becoming a leader in home appliances

manufacturer in Pakistan. The factory carefully managed its production to ensure

growth in both national and international market. Super Asia’s products are very

famous both in Pakistan and worldwide. During the 1980-90, Super Asia devoted its

resources and develops a huge factory and other businesses to make its place in the

competitive environment of Pakistan

Super Asia has acquired a reputation as a home appliances manufacturer holds a

leading position in the field of home applainces, they have also atarted other

businesses like polythene sheets and CNG stations.They are trying to develop their

organisational culture just like multi national companies.

There are many outlets of Super Asia all over the Pakistan which sold their

products direct to final users. The best-known are household products, sold worldwide

under their brand name in many countries of the world.The company's Corporate

Functions (departments) control, coordinate and monitor the activities of the Group,

and provide advice and support to Group Companies.

With many sales locations in Pakistan and huge exports, Super Asia is present on all

of the world's major markets. The company employs approx. 700 people.

3.2 Nature of the Organization:

Every successful company and organization defines its visions and mission and

makes the strategies and rules to achieve these missions and visions. To achieve these

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visions and missions the organizations and companies have to fulfill the objectives so

that the long term visions and missions can be achieved. Same like that Super Asia

also have defined its vision and mission which are quoted here.

3.2.1 VISION:

“To be the market leader in every of our products, nationally and regionally”

Our foremost aim is to think big, be the pace setter and modernizer. Since 1972, being

the market leader in washing machines, we have concrete plans to replicate our best

Practices in every of our offerings, across the region. It is the VISION that every

employee of the organization is clear about.

3.2.2 MISSION:

“To win the utmost satisfaction, trust and loyalty

Of our valued customers”

3.2.3 Main Features:

PRODUCT LINES:

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☼ Air Conditioners ☼ Fans

☼ Washing Machines ☼ Room Coolers

☼ Water Dispensers ☼ Geysers

☼ Microwave Ovens

☼ Motor Bikes

Microwave Oven

Defrost Setting.

Painted Steel Cavity.

Push Button Door.

Painted steel cavity.

Air Conditioner

New Wall Mounted Series.

Built to the highest international standards.

Ensuring maximum efficiency, performance and reliability.

Fans

Quiet operation.

Specially designed blades.

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Even air throw & Revolving grill.

Room Air Coolers

Ultra cool air and quite performance.

For the first time in Pakistan introduce water proof pump.

An efficient and energy saver cooling system.

Water Dispensers

New & easiest way to get hot & cold drinking water with water guard.

New striking design.

Low energy consumption.

Easy to install

Attractive low price.

Electric Water Coolers

Complete plastic front.

Continue supply of cold water.

Seasonal effects and rust proof.

Completely tested.

BUSINESS VOLUME:

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The company has a strong market share as its Washing Machines, Room Air

Coolers, Gas & Electric Water Heaters and Fans are ranked amongst the top

manufactures of the country. The company’s business volume accounts for

approximately 40% of the market.

CUSTOMER SATISFACTION:

The company focuses on high end customer value and satisfaction which is

obtained through continuous customer services. As noticed by the internee, the

following are some of these services.

Follwoing services are provided by Super Asia Company:

To provide customer prompt, quality and reliable services at their doorstep

Super Asia has a largest after sales service network throughout the country.

To take care of customer appliances all service centers have latest tools,

equipments and machineries.

After sales service team consist of Engineers and highly qualified staff with

great professional approach due to this reason customer feels confident, once their

appliance are being maintained.

Super Asia after sale service also provides the facility to customer of lifting

their units from residence to service center and delivering within 48 hours.

Take care of our customers by remaining in contact with them so that they

should not face any type of problem.

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MORAL VALUES OF EMPLOYEES:

According to what the internee has observed, the employees at Super

Asia are committed to what they. Moral values of employees include:

Integrity

Continuous Commitment

Positive Attitude

Focus on Quality Maintenance

Dignity

INNOVATION:

Super Asia is a dynamic organization which focuses on continuous

improvement and product extension. Clear evidence of this fact is that the company

manufactures state of the art machinery. The product line has been extended from a

few products to various other ones as discussed above.

3.2.4 Competitors:

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Products Competitors(S)

Fans Pak Fan, Royal Fan, Yonus Fan, Parvaz Fan

Washing Machine Pel, Dawlance, Stylo, Orient

Split AC Haier, Dawlance, Pel, LG, Orient, Mitsubishi

Motorbikes Honda, Suzuki, Yamaha,

Geyser NasGas,

Microwave Oven Dawlance, Pel, Kenwood, Orient

Water Dispenser Pel,

4.0 ORGANIZATIONAL STRUCTURE:

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4.1 Organizational Hierarchy Chart:

4.1 Number of Employees:

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The Company contains around 700 employees including management

and workers. The permanent management consists of around 275 employees in

various businesses of the organization.

4.2 Main Offices:

Head Office:

Super Asia Muhammad Din Sons G.T. Road Gujranwala Pakistan

Voice: +92-55-4272801-5

Fax: +92-55-4271238

Website: www.superasia.biz

Email: [email protected]

Site Offices:

Super Asia sales and service 89 temple roads Lahore.

Mob: 0300-8406116

Super Asia sales and service 405 jinnah colonies Faisalabad.

041-647943

Super Asia sales & service Gulf Plaza Chandni chowk near Gondal CNG 1 st

floor flat no 1 Rawalpindi.

051-4843187, 0321-6181000

Super Asia sales & service Ahmad park colony oppisite Jamia-Saqlain road

near Khanewal road Multan.

061-770225

4.3Introduction of All Department:

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Super Asia has four major departments which are given below:

Marketing Department

HR Department

Sales Department

Accounts Department

[The Details of individual departments is provided from the next page]

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Marketing Department:

In Super Asia Company Private Limited there is a separate marketing

department which performs all the essential marketing functions that are suitable for

the company. In the marketing department there are 25-30 employees are working.

The promotional tools which are used by the company for the marketing are:

Advertisement including print, electronic and internet etc

Broachers

Bill Boards etc

There is a fixed budget for the marketing activities in the company. From the

total budget the marketing department consumes the 2.5% to 3.5% of the budget. The

important features of marketing campaigns are:

City Comparison:

It means that the company implements its marketing tools from city to city.

They mainly target the large cities like Lahore, Karachi, Islamabad,

Faisalabad; Gujranwala etc. In these cities, the marketing campaigns are very

intensive.

Sales Schemes:

Company gives schemes on their products in many cities of Pakistan.

Incentives:

Company gives incentives to its dealers in every city of the country.

Lucky Draws:

In order to attract the customers and dealers, the company introduces the

lucky-draws for both the customers and dealers. The main example is Dealer’s

convention that is held in the company for once a year. These lucky draws are

launched in the large cities as well as small cities of Pakistan.

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According to the marketing department of the company, the main purpose of

their product is to provide quality and durability to its customers. They are also

concerned with the appearance and packaging of their products. According to their

view, their product should not only work accurately but it must look beautiful when

placed in the house or in the shop. The company targets the middle class families in

all over the country but these criteria are changed from city to city and products to

products depending upon the per capita income of the people of that city. Mostly the

customers of the company are the middle class families.

There are many outlets in approximately every city of Pakistan. In every outlet

the customer can purchase all the products of the company. The new models, which

are newly launched, first come to the large cities and then to the small cities, but they

are easily available everywhere in Pakistan. As described in the above methods of

advertisements for the company’s product, the main channel of advertisement is

electronic then print and then other miscellaneous methods.

In the long run, the products of the company, saves the money, and cost of the

company. However the company’s products are little bit costly but they provide

quality in their products like fans, washing machines, air conditioners etc. People who

purchase their products feel ease of using their products in the long run. For example

the washing machines of the company will last for 20-25 years working efficiently in

the houses. The major benefit of the products is that they reduce the bills of the

electricity.

The things which make their product really different, new better and unique as

compared to their competitors are:

Basic quality of their products

Repeating customers

More publicity

New designs

Innovation etc.

The company won many awards like:

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Brand awards,

Export trophy in their washing machines,

Yearly brand wards,

Quality standard awards etc

To handle the complaints about the product in any city, there are complaint

centers in Karachi, Lahore, Rawalpindi, Faisalabad and Multan. So the customers can

satisfied by their nearby complaint service centers. If there is complaint of serious

nature then the concerned manager is sent from the head office to resolve the

complaint.

It is necessary for the company, to spend on advertisement for remain in the

market relative to their competitors. The biggest selling points of the company are

Lahore, Karachi, Rawalpindi, Faisalabad, Peshawar etc, but this also depends upon

the per capita income of the people living in that city. The company conveys their

goodwill, past experiences and quality with their products to their customers. There is

no fixed time to run the advertisement both on print and electronic media. It mostly

depends upon the season. If there is the season of the product then the advertisement

runs but after the season they will drag the advertisement and launch the new one for

their next seasonal product.

According to the marketing department of the company, it is strongly

important that a beautiful model displays their product in the advertisement because

the people get very satisfaction when they see that a popular model uses their

products. So, it is an encouraging tool for promoting their sales. The company also

performs the international marketing by giving their advertisements in the

international channels like HBO, Star World, Filmax etc and the internationally

watched Pakistani channels like ARY Digital network, GEO TV network etc.

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Human Resource Department:

An HR manager is there to perform the functions of HR department. They

believe that such neglected size of HR department is sufficient in such a large ad fast-

growing organization to fulfill the needs of HR. The company wants that their

employees are professional, competent and have discipline in their work and manners.

Company provides the training and develops their employees where necessary.

The management is sent for doing courses like quality standard courses and other

management and computer courses. The employee performance is measured through

their performance evaluation forms that are provided to HR manager. These forms are

confidential and just remain in the hands of the Board of Directors and HR managers

of the company.

The work environment in Super Asia is reasonably good for the employees. It

was told that employees feel good while working in the premises of the company. The

mission and policies are documented and are pasted in many locations inside the

company’s premises. The employee records are maintained through company’s

software. That software is specially designed for performing that task.

The attendances of the employees are maintained through time card machine

and through punching system. If the employee of any department wants to get leave

he will meet to the concerned manager in that department. He will provide a leave

certificate for an evidence of the leave. If an employee comes late frequently then he

will be fined by deducting the amount for being late from his salary. But, this policy

was not found as implemented properly.

There is no special dress code in the company. The employee and

management personal can wear both Shalwar Qameez and Pent Shirt while working

in the company. There is no equal employment opportunity provided to the

employees. As described about the workplace is sufficient for the employees to work.

The HR Manager designs all the jobs and assigns the responsibilities to every

employee and management personnel. The job redesigning is not practiced in the

company like job rotation, job enlargement, and job enrichment. The work timings are

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fixed. Mostly the work is done through shifts and every shift has fixed hours. There is

no concept of team work in the company. Only when the new product is launched, a

meeting is held in which the director of the concerned department briefs the

employees and management the specifications of the products and receives their

feedback.

There is no customer service division in the factory. The attitude of the

employees towards work is serious. They are bound to work in their concerning

department. No employee shall be allowed to waste time during working hours

otherwise he will face penalty. The company evaluate the job of any employee by the

reports made by his concerning supervisors and output generated by the employee.

There are approximately 1300 employees working in the factory including top

management. From 1300 employees, 1000 are on contract basis and 300 are on salary

basis. The salaries are given to the management through banking channel and the

wages of the workers are given in cash. The wages are paid 2 times in a month i.e.

after 15 days. The salary is paid to the management at 21st of every month. There are

certain bonuses in the factory but it is in limited amount i.e. Aftari in Ramzan, Eid

bonuses and 15 days bonus salary. If the management personnel do not want to work

in the company, he will put his resignation before the Human resource manager and

quit his job.

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Sales Department :

In Super Asia Company Private Limited, there is a separate sales department.

The supervision of that department is in the hands of sales-promotion manager.

Sometimes he reports to the directors, probably more often to general

manager. Sales management performs function mainly of directing and controlling the

details of their sales activities. Sales promotion is chiefly concerned with devising

plans for stimulating sales and methods for putting these plans into operation.

Because of the stress of competition, it has become increasingly necessary to

equip salesmen with more assistance by the way of improved equipments, portfolios,

kits, sales manuals, bulletins, house organs and advertising booklets, and to provide

the stimulus of special sales campaigns and contests. Following are the key functions

of the sales department of Super Asia Private Company Limited:

Recruiting salesmen and also setting up their compensation

It also assigns the sales region to the salesman.

Training the sales person in knowledge of the goods and in methods of selling

them.

Supervising and directing the sales activities.

Supervising and checking the expense accounts, route lists, detailed reports

and daily letters from the customers or dealers

Determining sales quotas, providing bonuses and prizes, conducting sales

contests and special sales campaigns.

Preparing, or directing the preparation of, sales manuals, or salesmen's

handbooks, giving detailed information about the company, the products, and

the sales principles and methods involved in selling.

Cooperate with the marketing department and sell the company's products

relative to the advertisements.

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Obtaining reports from different sales region concerning the reaction to the

company's advertising and that of competitors.

Cooperate with the production department in the matter of qualities, quantities,

containers, packages, sizes and seasonal goods, and reporting their reaction on

dealers and consumers.

Making investigations of the products or offering to discover new uses and

new appeals to dealer or consumer.

Conducting, or arranging for, special market surveys and analyses of sales

region with a view to discovering new markets for the goods or new methods

of developing old markets.

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Accounts Department:

The accounting department of Super Asia is practicing the integrated system of

accounting. The general manager of the company acts as the chief accountant. No

other chief accountant is there for this matter. General Manager reports to the

company head. And sub heads i.e. directors. The costing methods used in company

are:

Standard Costing

Process costing

The accounting department can be further divided into three parts on the basis

of functions performed by it namely:

Accounting

Costing

Finance

Accounting

This function is concerned with the:

Recording of transactions in the proper books at the proper time

Booking Receivables and Payables

Maintenance of accounting records

Recovering Receivables and paying payables according to directors’ directions

or company policy whichever is applicable

Preparing periodical mandatory and ad-hoc reports

Preparing Financial Reports

Dealing with Taxation Authorities

Preparing Payrolls

Working on Customized Accounting Software

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Customized Software

Company uses customized software (Finance Manager) to fulfill its

accounting needs. This software is not very different from many other

software used in the market but is slightly altered to fulfill the special needs of

the industry and especially the company. This software is capable of dealing

with perpetual inventory system and integrated books of accounts. This

software also provides many reports automatically like variance report.

Costing

Under this heading, the accounting department in Super Asia is performing the

following functions:

Annual Budget Preparation

Costing of Products

Preparation of Variance reports

Ensuring flexibility in standard costing system

Estimating overheads and deciding the basis of their absorption

Classification of costs

Ensuring Cost efficiency

Collection, evaluation and analysis of cost records

THE COSTING CAN BE DIVIDED INTO THREE MAJOR AREAS:

Material Costing:

The company issued the raw material mostly on the basis of First in first out

(FIFO) and Average cost method but it also issues the material on the basis of

Last in first out (LIFO) in special circumstances. In process costing, the losses

and wastage of material is also calculated at the time of the loss or wastage

and it is added in the operational cost of the product. No separate cost reports

are made for the losses and wastages. Store ledger cards are maintained

electronically.

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Labor Costing:

Labor handling varies from process to process. Standard Costing is used and a

variance report is generated at the end of each desired period.

Work center is defined for the labor.

Labor is bound to work in their work hours at their work places.

There is two kinds of labor: the permanent and on contract

The contractual labor is under control of contractors

There is 60% labor that work on piece rate and remaining 40% work on the

salary.

Overtime payments are made for extra work done to salary workers only but at

normal time rates.

Payroll of labor:

As there is an integrated system of accounting, Payroll sheets are prepared by

the accounts department. It includes the following data:

Date of payment

Total hours worked

Daily attendance

Production units

Name of the concerned department in which the person is working.

Factory Overheads (FOH)

Factory overheads includes following expenses:

Depreciation

Cleaning and lubrication of machinery

Tools and equipments

Electricity

Gas

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Oil etc.

Overheads are absorbed on the basis of production.

Budget:

Like every company, Super Asia also makes the budget for the production

requirements. The budget may be of three types:

Monthly budgets

Half yearly budgets

Annual budgets

Seasonal budgets

Monthly budgets are made more frequently by the company. Remaining four is

rarely made. These budgets cover the production estimates on the basis of estimated

sales. Material and labor requirements are also set on the basis of decided production.

Payables and Receivables

Recording and settling of payables and receivables is an important decision in

any company. It puts a great impact on the current financial position and

liquidity position of a company.

Accounts receivable

Sales Department receives sales order from customer and communicate it to

Accounting Department and Godown. From Godown, goods are delivered to

customer and a GDN is communicated to Accounting department. On the

basis of GDN, Accounting department generates an invoice and books the

entry.

Accounts payables

Factory, when required, communicates, informally, a requisition for material

to store room. Store room communicates this requisition to purchase

department. Purchase department places an order with supplier for the

required items. Supplier delivers goods along with a GDN from supplier.

Goods are received and inspected at gate and sent to store room. A GRN is

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communicated to Accounting department. Supplier also sends an invoice to

accounting department after receiving the signed GDN returned by Gate.

Accounting Department books entry on its basis.

Payments

There is no defined payment policy of the company. Payments are made by

Accounts department but on the directions of the directors. Mostly, directors

decide the terms of payments and no defined policy is followed in this regard.

Receipts

There is no defined receipt policy. This function is also performed by

accounting department. It is done on the directions of the directors and not by

following some defined policy

4.4Comments on the Organizational Structure:

The organization is owned by a family setup and therefore all the decision making is

carried out centrally at the Head Office and all the site offices carry out their targets

accordingly.

The present hierarchy of the company shoes an authoritative form of decision

making whereas the orders are passed from the owners to the management. Looking

at the structure, it is suggested that the ownership management needs to involve the

working management in its strategic decision making process as well at all levels.

This will not only improve the performance of the employees but will also generate

increased revenues for the company as the decisions would be joint and targets would

be met collectively.

DETAILED DESCRIPTION OF DEPARTMENT’S OPERATIONS:

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The related department in which the internship was carried out was the

Accounts Department. The accounting department of Super Asia is practicing the

integrated system of accounting. The general manager of the company acts as the

chief accountant. No other chief accountant is there for this matter. General Manager

reports to the company head. And sub heads i.e. directors. The costing methods used

in company are:

Standard Costing

Process costing

The accounting department can be further divided into three parts on the basis of

functions performed by it namely:

Accounting

Costing

Finance

5.0 WORK DONE BY INTERNEE:

DETAIL OF TASKS CARRIED OUT BY ME:

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1 st Week

Reconciliation of different branches: financial data from different branches

of Super Asia was gathered and analyzed. The data record was reconciled to

match the financial data at the head office. In reconciliation I analyzed the

bank and supplier reconciliation statements and extract the reasons of why

there is difference between the statement of the company and the bank etc.

Voucher of Payments to different parties: accounts payable to different

clients of Super Asia were cleared and payments were made to them. Other

issues dealt with included accounts receivable by Super Asia from business

clients. The quick processing of these payments and receipts was carried out to

ensure seamless financial performance.

2 nd Week

Branches expense verification: this activity included verification of the

different expenses carried out by the branches of Super Asia. The proposed

expenditures at different sites were checked against the actual expenditures

incurred. This process was highly important in ensuring that the expenditures

being incurred and reported were authentic and approved.

Verify bank Statements: the bank statements received from different

commercial banks related to the accounts of Super Asia were verified against

the financial transactions carried out by the company itself. The records of the

company accounts and the bank statement must equate and therefore, the

transactions were updated regularly.

3 rd Week

Check daily wages books: this activity involved verification of the payments

made to the workers at Super Asia Head Office. The payments made and the

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wages payable record was updated daily to maintain complete record of wage

books. This record was forwarded to the accounts department for further

processing.

Opening of the new accounts: this works involves that the accounts of the

clients and customers of super Asia opened in the company’s software

(finance manager). Opening of the accounts according to the date and numbers

of the clients and customers.

4 th week

Application of tax: the tax rate is added in the software whenever the invoice

is made by that software the tax is imposed automatically according to the

total amount of the invoice. When the govt changes the tax rate then tax rate is

changed on all the accounts of the clients with the permission of the chief

accountant and CFO.

Sale department: in the sale department all selling done through the phone

because normally all parties places their orders through the phone, I also

worked there as selling agent by receiving the calls of the clients and taking

the orders.

5 th week

Cost of goods sold: cost of goods sold is maintained by getting the data about

purchases of raw material, production and FOH from the accountants of the

related work. I have also prepared the CGS statement on 31 July by getting the

related required data.

Making of the Invoices: issuing of the invoices are according to the sale of the

products. I halve also issued the invoices according the sale of the products

and price of that particular product. Invoice included the customer name,

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account number in books of accounts, sale tax, total amount with and without

sale tax and terms and conditions of the company.

6 th week

Purchase order: while working in production department the material which

is insufficient for production and required more in quantity, a purchase order

is made to the purchase department the purchase department further refers to

the accounts department for authorization of the purchase order.

Filing of the documents: the purchase bills and the invoices are properly

managed and filed in a sequence according to the date and the company name.

The bank receipts are also managed according to the date and the company

wise. While there are two major businesses one is the super Asia mds and the

other one is the super Asia trading.

Super Asia Muhammad Din Sons Limited

Balance Sheet

As At 30th June, 2012

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CAPITAL & LIABILITIES

2012(RS) 2011(RS) PROPERTY & ASSETS

2012(RS) 2011(RS)

AUTHOROIZED CAPITAL

FIXED ASEET-W.D.V 148,795,947 128,918,982

1,000,000 ordinary shares of Rs.100/-each

100,000,000 100,000,000

Issued, subscribed, & paid-up capital

684,572 ordinary shares of Rs.100/- each

68,457,200 68,457,200

Unappropriated profit 48,886,798 37,498,953

117,344,178 105,956,153

Non-Current Liabilities

Securities from dealers 13,285,045 14,599,418

Finance lease liability 9,276,852 --

Loan from Director 39,740,000 41,050,000

Current Liabilities Current Assets

Trade & other Payables 361,639,192 264,457,009 Stock in Trade 218,168,812 182,744,129

Short term Financing 18,881,709 Trade debts 108.752,826 58,898,059

Current Portion of lease liabilities

7,292,998 2,762,482 Advances, deposits and prepayments

82,277,424 38,932,156

387,813,899 267,219,491 Cash & Bank balances 7,464,965 19,331,735

Contingencies and commitments

-- -- 418,664,027 299,906,079

567,459,974 428,825,062 567,459,974 428,825,062

Super Asia Muhammad din Sons Limited

Profit & Loss Account

For The Year Ended 30th June, 2012

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2012 (RS) 2011 (RS)

Sales-net 759,570,306 739,073,297

-Cost of goods sold (CGS) 595,165,095 577,161,181

Gross Profit 164,405,211 161,912,116

-Operating Expenses

Distribution Cost 90,495,516 94,818,006

Administrative expenses 50,363,535 36,024,159

140,859,051 130,842,165

23,546,160 31,069,951

+Other income 114,058 1,788,144

Operating Profit 23,660,218 32,858,095

-Finance Cost 3,247,607 2,657,197

Profit before taxation 20,412,611 30,200,898

- Workers participation and Welfare Fund 1,428,883 2,114,063

Profit for the year before taxation 18,983,728 28,086,835

-Provision for taxation 7,595,703 7,634,205

Profit after taxation 11,338,025 20,452,630

7.0 Financial Analysis:

7.1 Liquidity Analysis:

Liquidity Ratio

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A class of financial matrices used to help determine a company’s short term debt obligations.

Items involved;

Current Assets Current liabilities Liquid Assets Absolute Liquid Assets

Stores, spares &

tools. Stock in

Trade, trade debts,

loans and advances,

trade deposits and

short term

prepayments, other

receivables, tax

refund due from

government,

taxation net, cash

and bank balances.

Trade and other

payables,

Mark-up accrued,

Short term

borrowings,

Current portion of

long term

liabilities.

trade debts, loans

and advances, trade

deposits,

Other receivables,

tax refund due from

government,

taxation net, cash

and bank balances.

loans and

advances, trade

deposits,

Cash and bank

balances.

Concerned years;

Current year 2012

Base year 2011

Calculation of Ratios;

Name of Ratio 2012 2011 results Reasons for change

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Current Ratio 1.08 1.12 Unfavorable Decrease in Cash and bank balance

61.38%

Increase in trade & other payables by

36.74%

Liquid Ratio .92 1.009 Unfavorable Decrease in trade deposits by 65.53 %

Increase in trade & other payables by

36.74 %

Absolute Liquid

Ratio

.019 .72 Unfavorable Decrease in trade deposits by 65.53%

Increase in trade & other payables by

36.74%

Working Capital 30850128 32686588 Unfavorable Decrease in Cash and bank balance

61.38%

Increase in trade & other payables by

36.74%

Critical Analysis;

The comparative analysis of “SUPER ASIA MDS LTD.” company’s abilities to pay

its short term liabilities to indicate that it is not good in year 2012 as compared to

2011. Further, the external liquidity of the company has not improved from the base

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year, which means that company is not able to pay its external liabilities but is able to

pay its internal expenses.

The decrease in liquidity is associated with major decrease in cash and cash at

bank. Similarly this is also favorably shows because of increase in A/P & income tax

liabilities. The highest decrease among all the indicators is in current ratio because of

the decrease in trade deposits, decrease in taxation and increase in trade & other

payables.

The increase in accounts receivable along with increase in sales indicate that the

company’s credit policy is not much tight and the company is not recovering its

accounts receivables from its debtors and company has excess cash from the last year.

The unfavorable working capital shows that the business is not managing its working

capital requirement in a way that even expansion in the process of operation will not

be met by the company internally.

In a nut shell, it is observed that the liquidity of the company is not improving than

the base year, yet there is space to improve it.

7.2 Activity Analysis;

The effectiveness of management towards utilization of resources

i. To generate sales

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ii. To manage receivable

iii. To manage operating cycle

iv. To manage cash conversion cycle

Items Involved;

Total Assets Liabilities Others

Property, plant & Equipment

Operating fixed assets

Capital work in Progress

Long term Investments

Long term Deposits

Stock in trade

Trade debts

Loans and advances

Trade deposits and short term

payments

Other receivables

Tax refunds due from

government

Taxation net

Cash and bank balances

Trade & other payables

Accrued markup

Short term borrowings

Current portion of long term

liabilities

Sales

Cost of sales

Purchases

Concerned years;

Current year 2012

Base year 2011

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Calculations;

Name of Ratio 2012 2011 Results Reasons for change

Total Asset turn

over

1.34 1.72 Unfavorable Total assets increased by

32.32%

Working capital turn

over

24.62 22.61 Favorable Decrease in Cash and bank

balance 61.38%

Increase in trade & other

payables by 36.74%

Working capital decreased by

5.61%

Receivable T.O 6.98 12.55 Unfavorable A/R increased by 84.64%

Inventory turn over 2.73 3.16 Unfavorable inventory increased by 19.38%

Inventory turn over

in days

133.6

days

115.50

days

Unfavorable inventory increased by 19.38%

Collection Period 52.29

days

29.08

days

Unfavorable A/R increased by 84.64%

Payment Period 243.34

days

202.77

days

Favorable Trade Creditors increased by

54.32%

Operating Cycle 185.99 144.58 Unfavorable inventory increased by

19.38%.A/R increased by

84.64%

Critical Analysis;

The effectiveness of management towards utilization of resources is Unfavorable in

current year as compared to the base year, as majority of the indicators have shown

Unfavorable results.

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The negative activity of the Super Asia MDS ltd. Is majorly because of the increase

in Total assets increased by 32.32%, Decrease in Cash and bank balance 61.38%,

Increase in trade & other payables by 36.74%, Working capital decreased by 5.61%.

Turn over analysis;

the turnover analysis of the company is unfavorable which means the utilization of

assets are not optimal , although the assets have increased , yet the management is not

able to potentionally use its assets.

Collection System;

The comparison of collection system in comparative years indicates that the company

is not managing its collection earlier than the payments. The increase in the gap

between two collection system calculations is even wider negatively which is depicted

by that there is no marketable securities.

Operating cycle;

One of the activity indicators is operational cycle of the company which shows that it

is even decreasing in current year. The slower collection and slower sale both are

contributing towards the slower operating cycle. The increase in collection period

may cause the more bad debts where as the slower sale of inventory may cause higher

carrying cost and more chances of obsoleteness.

In a nutshell the company is not performing well, the management of the company is

not efficiently utilizes its assets. So there is lack of management, the management

should improve it.

7.3 Solvency Analysis;

Solvency ratios are one of the various ratios used to measure the ability of a company

to meet its long term debts.

Items Involved;

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Total Assets Liabilities Others

Property, plant & Equipment

Operating fixed assets

Capital work in Progress

Intangible Assets

Investment Property

Long term Investments

Long term Deposits

Stores, spares and loose

tools

Stock in trade

Trade debts

Loans and advances

Trade deposits and short

term payments

Other receivables

Taxation net

Cash and bank balances

Long term financing

Long term diminishing

mushasraka

Long term murabaha

Deferred liabilities

Trade & other payables

Accrued markup

Short term borrowings

Current portion of long term

liabilities

Lease payments

Interest

Equity

Operating profit (EBIT)

Concerned Years;

Current Year; 2012

Base Year; 2011

Calculations;

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Name of Ratio 2012 2011 Results Reasons for change

Time interest earned

11.14 19.88 Unfavorable Operating profit decreased by 27.99%

Interest increased by 22.21%

Debt ratio 0.79 0.75 Unfavorable Total Debt increased by 39.41%

Total Assets increased by 32.32%

Equity ratio 0.21 0.25 Unfavorable Equity increased by 10.75%

Total Assets increased by 32.32%

Debt to equity ratio 0.53 0.52 Unfavorable Equity increased by 10.75%

Long term debt increased by 11.95%

Critical Analysis;

The strength of a business to pay its long term debts can be observed by conducting

the solvency analysis of the business. The solvency analysis of year 2012 in

comparison of year 2011 shows that the company is not able to meet its long term

debts as most of the indicators shows the negative results. The company’s unfavorable

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condition is caused by increasing total debt by 39.41%, Equity increased by 10.75%,

Total Assets increased by 32.32%, Operating profit decreased by 27.99% and Interest

increased by 22.21%.

In current year the company is not only suffering to pay its long term debts but its

periodic payment paying ability is also not up to the mark as compared the year 2011.

Interest paid by the company is a big financial risk for the company.

The capital structure of the company shows that this company is mostly debt oriented

because total debt is increased by 39.41% in current year as compare to the base year.

It means the company is already utilizing more debts in comparison of year 2011.

In a nutshell by conducting this solvency analysis we come to know that the company

is not able to take the long term loan because the company has increased its long term

debt in current year in comparison of base year.

7.4 Profitability Analysis;

The ability of company to generate profits/returns for the owner.

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Items included;

Total Assets Others

Property, plant & Equipment

Operating fixed assets

Capital work in Progress

Intangible Assets

Investment Property

Long term Investments

Long term Deposits

Stores, spares and loose tools

Stock in trade

Trade debts

Loans and advances

Trade deposits and short term payments

Other receivables

Taxation net

Cash and bank balances

Sales

Gross profit

Operating profit

Net profit

Total equity

Concerned years;

Current year 2012

Base year 2011

Calculations;

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Name of ratio 2012 2011 Results Reasons for change

Gross profit ratio

21.6% 22% Unfavorable Sale increased by 2.78%

Cost increased by 3.11%

Operating profit ratio

3.1% 4.20% Unfavorable Sale increased by 2.78%

Net profit ratio 1.50% 2.76% Unfavorable Sale increased by 2.78%

Critical analysis of profitability;

The analysis of ability of business to generate revenues for the owner indicates that it

is unfavorable in current year in comparison of base year, as all the indicators

calculated relating to the owner are decreasing which are unfavorable for the owner.

The major reason of this decrease in the profitability is not only because of the

increase in sales but also due to the increase in the cost which are 2.78 and 3.11%

respectively from the base year. The company is also getting the benefit efficiently

from the use of the operating fixed cost which also increased a little from the last year

which is 15.41%.

The general profitability analysis the business is not able generate the effective returns

for the owner in comparison of the last year. The result shows that the company’s

gross profit shows favorable which is the result of the efficient management of the

sales department.

7.5 Return Analysis;

The ability of company to generate profits/returns for the owner.

Calculations;

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Name of ratio

2012 2011 Results Reasons for change

R o a 2% 4.77% Unfavorable Net profit increased by 8.31%

R o e 9.70% 19.30% Unfavorable Sale increased by 19.31%

Critical analysis of Return;

The results of return analysis indicate that all indicators are contributing towards no

generation of the return for the owner. The financial statements indicates that

although the resources are decreasing yet and the business has not managed it in a

way that the business is still cannot generating the returns more than the base year,

this is because of the decrease in owner’s share in the total assets and current assets.

ROI cannot be calculated because there is no investment outside the business.

COMPANY ANALYSIS

I have done the analysis of Super Asia. Here I did the SWOT analysis in

which I examined the strengths, weakness, opportunities and threats faced

by Super Asia..

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8.0 SWOT ANALYSIS

SWOT ANALYSIS:

SWOT stands for strengths, weaknesses, opportunities and th r ea t s . Th i s i s t he

ana l y s i s r e l a t e d t o t he s t r eng th s w h ich S upe r A s i a p roud ly ha ve ,

weakness of Super Asia, opportunities which Super Asia can avail to prevent from the

threats faced to the company and the weaknesses of the company. The reason to do

this analysis is to find out that, what are the strengths of the company which can

overcome the weaknesses of the company and to determine the opportunities which

can company avail to prevent the threats to the company. I will individually examine

the strengths, weaknesses, opportunities and the threats faced by Super Asia here.

Strengths:

Merit trophy

The company has won the merit trophy 2004-2005 of federation of Pakistan

chamber of commerce & industry presented by general pervaiz Musharraf to

the chief executive of the super Asia.

Brand name

Brand name of super Asia is known to almost every person in the country,

outside the country and is very famous in the home appliances industry.

Goodwill & market Share

The company has build up good will in the market of Pakistan and some

international countries from a very long time through their best services and

best quality products. It has largest market share through the country in

washing machines.

Sales and Marketing

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The sales department of the company is very strong, and the company

conducted very strong advertisement for promoting its products.

Manufacturer and Leader

Super Asia is the manufacturer of the raw materials and is a market leader in

the washing machine in the region.

Reliability

Highest quality products in the market as determined by the customer and

distributor feedback, Products are reliable and according to the customer

needs.

Weaknesses:

Prices

Prices of the products are high other than the competitors price.

Poor Sale

Some sales segments of the company are weak like in Baluchistan and some

areas of Khyber Pakhtoonkhwa Province due to terrorism in those areas.

Demand and supply of labor

The labor demands relutent time and more wages but there is strict timing and

low wages due to which labor left the company and in case the supply of labor

going to down.

Need more sales people

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Super Asia needs more sales people to enhance its sales and increase market

share through sales agents.

Delivery and other operational staff need training

The delivery persons, labor, and other departmental members of the company

are not properly trained which is also a weakness of the company.

Customer service staff needs training

The customer service officers are not properly trained due to which company

loses its customers.

Oppurtunities:

Goverment Policy

Due to goverment policy of low export duty, Super Asia has oppertunities to

increase their exports.

Latest Technology

Due to the strong financial position of the company, the management can use

the latest technology in their products And can advantage.

Brand Name

Super Asia MDS can use its brand name in the international market to increase

their sales of Fans like sale of their Washing Machines.

Sales Promotion

As the company is financially very strong, so it can use Electronic and print

media to increase its sales by sales promotions campaigns like advertisements

etc.

Investment opportunity

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They should invest in the SBUs like Air Conditioner and Microwave Oven

which have low market share and very low growth rate in the national market.

International Exhibition

Super Asia should participate in the international industries exhibition. It is a

big opportunity for the company to create the awareness of its bran in the

international markets, and by this their sale can be increased.

New Products

The competitors of the super Asia have low and poor quality products, so

that’s why super Asia can create new products and can increase its product

line. By this it can higher profit margins.

Others

Super Asia could extend its sales to other major countries of the world. Can

hire new specialist of the relevant field. Launch more schemes for the products

in order to attract customers. Could seek better supplier deals. Search other

suppliers who supplied raw material at low costs.

Threats:

China

Chinese Technology is the very big threat to Super Asia.

Competitors

Other competitors of super Asia are offering the same products at the

relatively low prices and giving best services to the customers. The new

companies are also creating competition in the market.

Stylo

Stylo washing machine is invested a heavy budget in the promotion of their

products by raising the slogan “Purani do nai lo”

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Power Crises

Current power and electricity crises are very big hurdle for the manufacturing

unit of the company. Due to the shortage of electricity the company may be

unable to meet their orders.

Complaints

The complaints in some particular SBU’s like Motorcycles is a big threat to

the brand name of the company.

Government Environmental Factors

Any government legislation could affect the business and Environmental

effects would favor larger competitors and can be harmful for the compnay’s

Own production.

Seasonal Demand

The demand of the products of the super Asia is seasonal based. Like in winter

season the sale of geysers and in summer season the sale of fans and room

coolers are there.

9.0 CONCLUSION

This report is significant in understanding the real life industry situations and

the corresponding market conditions of operating in a highly competitive industry.

This report completely analyses all important departments of the Super Asia

Company and is very useful in determining what the market is like in such electronic

based industries.

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From the research carried out, it can be inferred that the electronics industry is

highly competitive here in Pakistan as the country is on the road to industrialization.

This competitive environment has enabled various local companies to jump in and

provide something different to the consumers.

The development of such industries like Super Asia (Pvt) Ltd has enabled the

merger of quality and low cost manufacturing. It is encouraging to see that Super Asia

in expanding its scope of operation almost every year and is engaging in different

sorts of businesses; for example, fast food (Hardees).

The research has shown that Super Asia is doing quite well if its financial

position is taken into account. The financial analysis based on different financial

ratios proves that the company is well able to meet its costs and maintain profit

margins.

If the companies SWOT analysis is taken into account, we can see that that

company possess a very strong marketing channel that enables its products to be sold

in the market. The company is by far the market leader in many of the electronics

section especially the washing machine section which gives it a reliable edge over its

competitors. Therefore, the company is able to maintain its operations (and even grow

them) if necessary.

However, coming over to its weaknesses, it can be concluded that the

company needs to focus on the high prices of its products in the market that could

become a problem if the company does not consider its increasing manufacturing and

labor costs. Therefore, Super Asia needs to control its costs.

Apart from the above, Super Asia also needs to consider the fact that it is

mostly present in the Sindh and the Punjab provinces of Pakistan, whereas it would be

very significant if the company maintains at least a nationwide presence through

opening its factories, distribution channels and customer services operations in majors

cities of Baluchistan and Khyber Pukhtoonkhwa. This will surely enable the company

to present itself to these major areas of Pakistan as well where its products would be

met with a reliable demand.

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Other than these internal strengths and weaknesses of the company, Super

Asia should also consider external opportunities and threats if it has to grow and

survive in the competition.

Looking at the opportunities available to the company, it can be concluded

that Super Asia has to exploit the major advantages of quality that it possess. It is

important to note that other local manufacturers of electronic products do not deliver

such high standards of quality and service as compared to Super Asia. Hence, the

company should strictly market this element to the people it serves in order to develop

a competitive advantage over its competition.

On the other hand, Super Asia should also focus on the threats that might

emerge in the electronics market as a result of increased government control or

legislation affecting the profits of the company. It is vital to stay in touch with all the

stakeholders of the industry in order to jointly negotiate with the government.

Apart from this, the company should consider the environmental costs of

running the business as negligence on this part can favor the competitors and can

prove disastrous for the future of the company.

Nevertheless, Super Asia despite all the challenges and hurdles facing the

industries in the country is performing quite well and therefore is on the path to

growth. With sound future planning and forecasting, there is no doubt that the

organization will not only do good to its customers, but will also make good profits in

the long run.

10.0 RECOMMENDATIONS:

Key Problems and Solutions:

There is no uniformity in costing the materials issues. FIFO as well as LIFO

and even weighted average method are also used at time. According to management,

these methods are used for profit-smoothing.

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Suggestion: This is a clear violation of IAS-2, which prohibits LIFO as a method of

costing material issues. This practice also violates Framework and IAS 8, which

require the policies to be consistent unless change is compelled by reasonable

circumstances. This practice should be abolished as no material benefits are gained

from it.

Production facility is not in ideal format. The layout is not designed

intelligently. For eg. Fan body first has to go for threading and then for drilling. But in

production layout, drilling section comes before the threading section. Painting and

production departments are distant. This reduces the efficiency and wastes precious

time and energies.

Suggestion: Layout should be designed intelligently. Though not much needed, but if

company feels, a specialist can be hired temporarily to design the layout. It will

certainly save a lot of cost by improving efficiency.

There is no special arrangement to keep an eye on the labor. Many

departments are distant from each other and some supervisors are not enough to keep

an efficient wath on such scattered production facility.

Suggestion: Cameras should be placed in production facility to keep an eye on the

labor. By this, efficiency of labor definitely increases. It also ensures that labor is

using safe work practices.

Time in and out is marked and recorded manually. This is not an efficient

practice. It also requires manual work and records.

Suggestion: Card punching system should be used instead. Separate software, parallel

to but connected with the accounting software, should be used. It will also remove or

at least reduce many problems of costing labor and generating payrolls.

Safety measures are not up to the mark in production processes. Labor force is

not equipped with proper safety equipments and dresses. This increases the chances of

accident, causing increase in cost. Also, it is a severe violation of labor laws and law

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of morality. Providing labor with such equipments creates a sense of satisfaction in

their mind that their company cares for them; consequently, they are motivated and

work with better efficiency.

Suggestion: Labor should be provided safe environment and equipments. A separate

team can be made to ensure safety measures.

Company can be regarded as a company with all powers concentrated in few

hands. Yes! Decision making is highly centralized. This centralization even causes a

disregard with company policy when directors’ orders confront with it. Mostly,

directors’ orders are preferred to company policy. Managers become loyal to directors

and not with company.

Suggestion: Powers should be delegated to lower ranks to ensure faster decision

making and innovation. Owners should fight the fear in their minds that empowering

employees will cause their powers to die. This approach is not good universally.

Costs of Production reports are not regularly prepared. This is not merely a

documentary deficiency. It cannot be decided that which material is being wasted and

which one is being used efficiently. Also efficient or otherwise purchasing is not

pointed out.

Suggestion: A proper cost of production report should be maintained at least

monthly. This will ensure strict watch on the wastages and would definitely provide

benchmarks for improvement. Continuous cost efficiency is not possible without such

practice.

In Super Asia Company, there is no separate head of department for Accounts,

Marketing and Purchase departments. Only lower managers are handling these

departments. They report to the directors of the company directly, most of the times.

The lack of proper chain of command coupled with absence of proper qualified

person on the head seat of each specialized function causes problems in chain of

command and improvement methodologies.

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Suggestion: There is a need of separate Head of Department for every department

which would not only run the operations of the department but will also report to the

director of the company. That will increase the efficiency of the operations of the

department and also make a proper chain of command in that organization. This will

also increase the chances of improvement and advancement of functional areas.

The allocation of the budget to marketing department is insufficient. The

company allocates 2.5% to 3.5% of their total budget to their marketing department.

This budget is very low for running their marketing and promotion campaigns. This

causes a potential decrease in sales causing per unit fixed cost to rise.

Suggestion: Increasing marketing budget will boost up the sales. The increased

amount of sold units will cause a reduction in per unit fixed cost resulting in better

price competitiveness.

There is no separate Human Resource Department in the company. Only a

Human Resource Manager is there who handles all the responsibility of that

department. The HR functions are not performed properly causing inadequate hiring

and performance evaluation. This results in unskilled people to take their place in

company without passing a proper channel. Also de-motivation is also a fruit of such

practices.

Suggestion: HR functions should be performed in a better manner. Hiring should be

done through a proper and merit based channel to ensure right people are present at

the seats.

Fixed Asset handling in not adequate. No fixed asset register is maintained.

Depreciation methods are not properly defined.

Suggestion: There should be a separate Fixed Asset officer to take care of and keep

records of the precious Fixed Assets of the company to ensure better handling

documentation along with avoidance of maintenance and theft losses.

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11.0 LIMITATIONS

Time Constraints:

The report was prepared in the assigned time limit of about 2 months during

which ample research was carried out through the internet (as secondary

source) and via primary research (interviews and extracts conducted).

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Therefore the research was bound by the allotted time frame.

Sources of Information:

The major source of information was the experience gathered from the 6

weeks internship carried out at Super Asia Head Office Gujranwala under the

direct supervision of Mr. Muhammad Iqbal (Accounts Manager).

During the internship at Super Asia, various other departments were visited

and different personnel from these departments were interviewed regarding

different aspects of the report.

Apart from this primary source of data, other sources of collecting information

included the internet and the published written material. These included

various articles and official Super Asia web portal publishing.

Cost Constraint:

This report is prepared without any contribution from a any academic or

publishing institution. All the data present was collected by research

(secondary & primary) and therefore, the report incurred no major costs apart

from general expenses (transport, internet, printing & binding). This

expenditure was necessary to produce the report and is considered enough to

produce the required piece of information.

12.0 BIBLIOGRAPHY

Branch Office Infromation of Super Asia. Retrieved, from

http://www.superasia.biz/services.html

Customer care information of Super Asia retrieved from

http://www.superasia.biz/services.html

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Introduction of super Asia MDS pvt ltd retrieved from

http://www.superasia.biz/aboutus.html

Interview with Director (Mr. Faisal Afzal) at Super Asia Head Office.

Interview with Accounts Manager (Mr. Muhammad Iqbal) at Super Asia Head

Office

Interview with Human Resource Manager (Major Muhammad Zubair) at

Super Asia Head Office

Interview with Marketing Manager (Mr. Hafiz Shabbir) at Super Asia Head

Office

Interview with Finance Manager (Mr. Shahid) at Super Asia Head Office

Products of Super Asia Home Appliances at Super Asia Website. Retrieved, from

http://www.superasia.biz/products.html

Super Asia Web Portal. Retrieved from

http://www.superasiagroup.com/groupcompanies.html

13.0 GLOSSARY

Brochure - a booklet of printed informational matter, like a pamphlet, often

for promotional purposes (Page 24)

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Compensation - something given or received as an equivalent for services,

debt, loss, injury, suffering, lack, etc.; indemnity: The insurance company paid

him $2000 as compensation for the loss of his car. (Page 31)

Standard Costing - is usually associated with a manufacturing company's

costs of direct material, direct labor, and manufacturing overhead. (Page 33)

Process Costing - is an accounting methodology that traces and accumulates

direct costs, and allocates indirect costs of a manufacturing process. (Page 33)

Ad-hoc Reports - generally signifies a solution designed for a specific

problem or task, non-generalizable, and which cannot be adapted to other

purposes. (Page 33)

FIFO - stands for first-in, first-out, meaning that the oldest inventory items are

recorded as sold first. (Page 34)

LIFO - stands for last-in, first-out, meaning that the most recently purchased

items are recorded as sold first. (Page 34)

14.0 Annexure:

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Prepared by:

Muhammad Athar Ali

03216484207

Muhammad Athar Ali 71 Punjab University Gujranwala Campus