super asia mds (athar)
TRANSCRIPT
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
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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.
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INTERNSHIP LETTR
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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