COMSATS

Institute Of Information Technology Wah Cantt

Internship Report
On
Askari Cement Nizampur

Group No 01
Submitted To:

Mr Faheem A Khan

Submitted By:

FARYAL ARIF AWAN

Reg No: SP06-MBA-016
MBA 4 A (Finance)

Table of Contents

S.No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.

Description
Dedication
Acknowledgement
Executive Summary
History
Objectives
Overview of Firm
Organizational Structure
Finance Department Structure
Operations Of Finance Department
Functions Of Finance Department
Financial Ratios
Liquidity Ratios
Leverage Ratios
Activity Ratios
Profitability Ratios
Graphical Representation
SWOT Analysis
Internship Experience
Shortfalls of Finance Department
Conclusion and Recommendations
Reference And Source
Annexes

Page
No
3
4
5
6
7
8
10
13
14
15
21
21
24
26
30
33
38
41
44
45
46
46

DEDICATION
I dedicated this work to my parents who are most valuable for us
in this world. Teachers and all those friends who help me to
accomplish this task.

ACKNOWLEDGEMENT

All praises for Allah, Most Beneficent, Gracious and ever

Merciful. Who gave us the power to do the sight to
observe and mind to think and judge. I wish to express
my sincere obligation and appreciation to my teachers
whose skillful guidance, sincere encouragement and
devotion remain with me.

Executive Summary
The internship report has been prepared on the Finance
department of Army Welfare Trust Nizampur Cement Plant in
order to comply with the necessary requirement of COMSATS
for obtaining the MBA Degree.

In this report a detailed introduction to the organization has been

given.

Specific

consideration

is

given

to

the

Finance

Department. Section wise functions of the department have

been discussed in detail.

Financial analysis has been performed using financial analysis

technique financial ratios and graphical representations of these
ratios are included. Finally short-falls/weaknesses have been
given and recommendations and conclusions have also been
given for improvement.

History

The plant

has been installed by Army Welfare Trust.

Construction of the Plant was started in 1993. Its first line of the
capacity of 2000 tonnes per day was complete and it started

production in 1996. Erection/installation of second line also of

the capacity 2000 tonnes per day was started in 1997 and was
completed in second quarter of 2003. It started commercial
reduction with effect from 1st jul 2003. The plant was designed
by M/s Tianjin Cement Design & Research institute, China and
was supplied by M/s China Building Material Industrial
Corporation (CBMC) and local Mechanical Complex (HMC)
Taxila, Pakistan. Total Capacity of both lines is 4000 tonnes per
day.

OBJECTIVES OF STUDYING THE AWTNCP

As per MBA programmed of COMSATS it was the requirement

of the University to complete the internship in any organization
for a period of at least 4 weeks. The objective of doing internship
was to acquire practical knowledge of working / functioning of
Finance Department in the real world. It also helps the student of
MBA to have understanding about applying theoretical aspects
of MBA study.

Overview of AWT Nizampur Cement Plant

Askari Cement Nizampur commissioned on June 30, 1996 is
one of the industry set-up by the Army Welfare Trust. AWT was
founded on October 29, 1971 under "Societies Registration Act".
The purpose of having an organisation of this nature was to
equip it with willing workers, to generate funds to meet the
obligation of welfare and rehabilitation and help the orphans and
widows of Shaheeds, disabled and retired persons of Pakistan
Army as well as their dependants.

Objectives of the Organization

The objectives of the Army Welfare Trust are:
To generate funds for welfare of retired servicemen and
families of shaheeds of Pakistan Army.
To

provide

employment

opportunities

for

retired

servicemen of Pakistan Army.

Nature of the Organization

AWT Nizampur Cement Plant is owned by Army Welfare Trust
and falls under the category of cement industry. It produces
Ordinary Portland Cement known as Grey Cement. They market
their Cement with brand name of Askari Cement.

Business Volume
Revenues generated from the sale of cement are as detailed below,
Year

Revenues

Net Sales (Rs)

2005

426,952,442

2,608,190,052

2006

306,815,143

3,666,840,794

Profile of Employees
The total number of employees in AWTNCP is as detailed below,
Officers / Executives

99

Workers

305

Total:

404

Employees grades are distributed in following categories of grades,

Management Grades

Executive Grades

Officers Grade

Workers Grades

Product Lines
The sole production item of the factory is Ordinary Portland / Grey Cement.

10

Organizational Structure AWTNCP

11

Organization structure is highly formalized. All decision powers

lies at Directors level and distributed among them on the basis
of financial ceilings such as MD financial power is limited to Rs:
5 Lac, DI upto Rs:2 Lac and DPC upto Rs: 1 Lac. Management
style is more autocratic and little bit participative in nature.
Information flows downward and little participation of low-level.

Main Head Office

Main / Head office is located
inof Directors
the AWT Plaza, The Mall,
Board
AWT

Rawalpindi Cantt. Following departments are in the head office,

Director

Project

(Cement)
Technical
Managing Director

&

Audit

AWT

Secretariat

Department

Marketing Department

Administration

(HO)

Director (Industries)
AWT

Department.

Finance Department

AWT Internal Audit Dept.

Internal Audit Department

AWT Finance Dept

Human

Resource

Director Project
(Cement)
Department
AWTNCP

To facilitate the customers of Lahore andSenior

Peshawar
Districts,
Managers
General Manager (Works)

Head Office Depts

branch offices are located in these citiesAllunder
the supervision

of Marketing Department.

Managers
Factory Site Dept.

Managers

Asst. Managers

Asst. Managers

Junior Officers

Junior Officers

12

Assistants / Jr. Assistants

Assistants / Jr. Assistants

Factory Site
Factory management has been categorized in the following
departments,
General

Manager

(Works)

Crusher
Production

Administration

Kiln

Finance & Accounts

Packing plant

Mechanical

Dispatch

Electrical

Factory Location
Nizampur Cement Plant is located in Village Kahi / Nizampur,
Dist. Nowshera about 22km South-West of Khairabad on right
bank of the River Indus.

Marketing Operations
AWTNCP is selling its production under the brand name of
Askari Cement.

AWT also owns another cement plant of

capacity 3000 Tons Per Day, previously known as Associated

13

Cement, Wah. Production from both these plants is being

marketed by the combine marketing department headed by
Director (Marketing).

Structure of the Finance Department

The Finance Department of AWTNCP is headed by General
Manager (Finance). The Organization Structure of Finance
department is,

14

General Manager (Finance)

Deputy Manager (Fin)

Head Office

Manager (Finance)
Factory Site

Assistant Managers
Sectional Head

Assistant Manager

Cost & Budget Section

Junior Officers

Payments Section

Assistants / Cashier

Sales Accounting Section

Ledgers Section

Cashier

Computer Section

Banking & Insurance Sec

15

Human Resources of Finance Department

The total number of employees working in Finance Department
of AWTNCP is 23. Out of which 18 are in Head Office and 5 at
plant site.

Finance & Accounting Operations

Finance Department performs the following operations for the
organization,
Provide coordination to higher management in long-term
business

planning

and

formulation

of

financial

management strategies in consultation with the AWT

Financial Managers.
Funds Management.
Promoting cost consciousness within the organization
using variance analysis of budgeted versus actual
expenses.
Maintenance of accounting books and preparation of
financial statements in accordance with the companys
ordinance requirements.
Preparation of various financial reports to the higher
management

highlighting

performance

of

the

manufacturing unit and financial position.

16

 Coordinate with Internal & External Auditors.

Functions of Finance Department

Accounting System of the Organization
The accounting system of the Organization consists of the
followings: Accounting at Head Office.
Accounting at Plant Site.

Accounting in Head Office

There are different sections in Head Office. Each section is
headed by the Assistant Manager. Section wise responsibilities
are as hereunder:General Ledger Section:
Preparation, processing and posting of journal voucher
and bank payment vouchers of each transaction.
Maintenance of record for all the JVs and bank
payment vouchers.
Maintenance of computerized ledgers.
Settlement of accounts with the site office.
Preparation of final accounts.

17

Cost & Budgeting Section

Preparation of Annual Revenue & Capital budget on the
basis of historical data cost of production reports and
markets demand and price forecasts.
Preparation of variance analysis reports.
Allocation of budget provisions on the procurement /
work order cases.
MIS reporting
Monthly cost of production report.
Sales Accounting Section
Keep record of orders received, dispatches and
payments record.
Interaction with the marketing department for customer
support.
Reports preparation pertaining to Sale of Cement.
Bank & Insurance Section
Transfer of funds
Reconciliation of all bank statements
Dealing with banks
Dealing with the insurance matters.
Payment / Payable Section

18

 Maintenance of record pertaining to the contractors /

suppliers.
Scrutiny of purchase and work order cases to check
financial viability.
Payments to the suppliers and contractors.

Computer Section (Finance Department)

Software development and maintenance of ledger
accounting system, sales accounting system, cost
accounting system and payroll system.
Taking back-up of data.
Cashier
Maintenance of Cash book
Cash handling
Salary / allowances disbursement.

Accounting at Plant Site

Plant

site

finance

department

comprised

of

following

departments,
Payment Section
Making payments to the site contractors and
suppliers.
Cash handling

19

Store Accounting Section

Maintenance of Store Inventory record
Reporting Inventory Positions
Maintenance of record for
Purchase orders
Material receipts
Inspection reports.
Factory Accounting Section
Maintenance of factory ledgers.
Departmental cost determination
Unit cost determination.
Material wise consumption / production reports.
Payroll Section
Preparation of salary sheets of officers, workers
and daily wages employees after collecting
information from the administration department
regarding attendance, leaves etc.

Finance System of the Organization

Board of directors approves the annual budget, which is
considered as approval in principle for all the items included in
the budget. It determines the yearly finance requirement of the
company. The company meets it requirement through the

20

revenue received from the sale of cement and funds received

from AWT Head Office.

Use of Electronic Data in Decision Making:

Majority of employees of finance department are provided with
computer. There is a dedicated computer programmer for
Finance Department, who develops and maintains following
accounting systems to facilitate the staff and improve the
efficiency of the department manifold.
Ledger Accounting System
Sales Accounting System.
Cost Accounting System.
Payroll Accounting System.
All these computerized accounting systems give the quick and
timely information to the management. Thus use of electronic
data plays a very effective role in decision making.

Mobilization of Funds
Customers deposit payments against the cement booking orders
through out Pakistan in the nominated bank branches of
Askari Commercial Bank Ltd.
Muslim Commercial Bank Ltd.
Allied Bank Ltd.

21

All branches have the standing instructions of transferring of

daily receipts to the respective main account of AWTNCP
keeping Rs: 1000/- as balance with them. Payments received
through cross cheque are directly deposited to the main account
of AWTNCP. Its the responsibility of bank section to ensure
timely bank transfers. Similarly disbursement accounts have
been opened in these banks from which company does
spending / make payments.

Sources of Funds
One source of funds is the sale of cement produced by the
company. AWT head office (sponsors) also provides financial
assistance to meet the companys short and long-term
obligations.

Allocation of Funds
Annual budget is prepared in the light of marketing department
forecasts about the demand of cement in the market and
forecasted price of cement in the market. Then department wise
budget was prepared in the light of available forecasts and
history data. BOD approves the budget. This forms the basis for

22

allocation of funds to all departments. There are two kinds of

budgets,
Capital Budget is prepared for allocation of funds for
capital spares for cement plant, furniture and fixture and
vehicles.
Revenue Budget is prepared for allocation of funds for the
raw materials and spares consumed in the production
process.

FINANCIAL RATIOS
Ratio Analysis is an excellent method for determining the overall
financial condition of company. It puts the information from a
financial statement into perspective, helping to spot financial
patterns that may threaten the health of the company. Ratios are
also very useful for making comparisons between companies
relevant to the same industry. The analysis of financial
statements can provide reasonable insight into a firm's state of
affairs. But the statements have inherent limitations, which
require care and prudence in their uses.

23

LIQUIDITY RATIOS
Current Ratio
Current ration measures the extent of which a firm can meet its
short-term obligations.

Year

Current Assets
Current Liabilities

Current Ratio

2005

1007472323
953140550

1.05

2006

1478502838

1.45

1018808100

Analysis
The current ratio is a measure of liquidity. It helps us to answer
the question: If a business had to pay off all its current liabilities
tomorrow, would it have enough current assets to make the
payments and avoid insolvency? if the current ratio is less than
1, it is in danger of failure. If the ratio is high, perhaps above 2,
the business has more than enough current assets. And these
surplus funds can be used to improve efficiency. Ideal current
ratio for any business entity is 2:1 just enough to be getting on
with. AWTNCP is improving its current ratio as compared to
previous year and aimed to cross the ideal limit of 2:1. Reason is

24

clearing of timely due payments, which reduces current

liabilities.
Quick Ratio

Year

Current Assets Inventories

Current Liabilities

Quick Ratio

2005

1007472323701763862
953140550

0.32

2006

1478502838118367890
1018808100

1.33

Analysis
Quick ratio measures the extent to which a firm can meet its
short-term obligations without relying upon the sale of its
inventories. The optimal quick ratio is 1 or higher. AWTNCP
quick ratio is improving year by year, again for the reason that
company is clearing its current liabilities as much as possible.
And its current assets also increased.

Net Working Capital

25

Year

Working Capital
Current Assets Current Liabilities

2005

1478502838 1018808100

459,694,738

2006

1007472323 953140550

54,331,773

Analysis
Company faced difficult times in past year in terms of working
capital availability. Year 2006 more working capital gives the
company a good signal towards having good times in future.

LEVERAGE RATIOS
Debt to Equity Ratio
It shows the ratio of funds provided by creditors versus by
owners. A high debt to equity ratio could indicate that the
company may be over-leveraged, and should look for ways to
reduce its debt.
Debt to Equity Ratio = Total Debts / Total Equity

26

Year

Total Debts / Total

Total Debts / Total Equity

Equity

2005

1288611069 / 1789929171

0.71

2006

936799414 / 2191486153

0.42

Analysis
Company is facing heavy net losses in past years due to
financial expenses, low cement sales and high input costs. In
order to give cover to these losses debts are taken to keep the
company operational and to avoid insolvency. Time Company is
clearing its debt and debt to equity ratio is decreasing year to
year.
Debt to Total Assets Ratio
It shows the ratio of total funds that are provided by creditors.

Debt to Total Assets Ratio = Total Debts / Total Assets

Year

Total Debts / Total Assets

Total Debts / Total

Assets Ratio

2005

1,288,611,069 / 10,722,697,173

0.120

27

0.084

2006
936,799,414 / 11,027,731,763

Analysis
In Year 2005 debt are 12% of total assets now in 2006 debt to
asset ratio is 8.4% which shows the decreased of 3.6% as
compared to previous year ratio due to yearly payment of debt to
borrower.

ACTIVITY RATIOS
Total Assets Turnover Ratio

Year

2005

Sales
Total Assets

2,608,190,052
10,722,697,173

Total Assets
Turnover Ratio

0.24

28

2006

3,666,840,794
11,027,731,763

0.33

Analysis
This ratio tells us whether a firm is generating a sufficient volume
of business for the size of its asset investment. The higher the
ratio, the more efficiently the Company is utilizing its assets to
generate sales. Companys asset turnover ratio shows increased
as compared to previous year 2005 ratio because sales are
increased due to increasing demand in the market. And company
used efficiently its asset to generate sales.

Receivables Turnover Ratio

Year

Net Sales
Accounts Receivables

2005

Receivable Turnover
Ratio
96.41

2608190052

29

27052056

2006

3666840794
25148010

145.81

Analysis
This number indicates how quickly customers are paying your
business. The greater the number of times receivables turn over
during the year, the shorter the time between sales and cash
collection. This high ratio is because of cement is mostly sold
against Cash / Advance payment.

Net Fixed Asset Turnover Ratio

Year

2005

Sales
Net Fixed Assets

Net Fixed Asset

2608190052
9715224850

0.26

2006

Turnover Ratio

0.38
3666840794

30

9549228925

Analysis
The net fixed turnover ratio reflects the firms utilization of fixed
assets. In 2005 net fixed asset turnover ratio is 26% now in
current year it is 38%. 12% increase in net fixed asset turnover
indicates that company utilizes its fixed asset well as compared
to previous year.

Equity Turnover Ratio

31

Sales
Total Equity

Equity Turnover

2005

2,608,190,052
1,789,929,171

1.45

2006

3,666,840,794
2,191,486,153

1.67

Year

Ratio

Analysis
It is useful to examine the turnover for alternative capital
components. The difference between this ratio and total asset
turnover is that it excludes current liabilities and long term debt.
Equity turnover ratio also increased because sales of current
period increased which directly affect the equity turnover ratio.

PROFITABILITY RATIOS
Net Profit Margin
It measures Aftertax profits per Rupee of sales
Net Profit Margin = Earning After Interest & Taxes / Net Sale

32

EAIT
Net Sales
Year

Net Profit Margin

2005

426952442
2608190052

0.16

2006

306815143
3666840794

0.08

Analysis:Although current year sales is higher than previous year but net
profit margin after tax is low as compared to 2005. Reason of

33

this decreased is taxation, high administrative, selling and

distribution expenses.

Gross Profit Margin Ratio

It measures profitability without concern for taxes and interest.
The gross profit margin measures the total margin available to
cover operating expenses and yield a profit.
Gross Profit Margin = Earning before Interest & Taxes / Net
Sales

Year

GP
Net Sales

2005

776821137
2608190052

2006

1622646450
3666840794

Gross Profit Margin

0.30

0.44

34

Analysis
Gross profit ratio is increased to .44 because sales of current
year are higher due to the growth of market and this indicates
that marketing department is working good to capture the
potential of market.

Operating Profit Margin Ratio

Operating Profit margin= Operating Profit / Net sales

Operating Profit
Net Sales

Operating Profit

2005

728340649
2608190052

0.28

2006

678965956
3666840794

0.19

Year

margin

Analysis

35

The variability of Operating profit margin over a time is a prime

indicator of the business risk for a firm. Operating profit margin
ratio is low as compared to previous year although sales are
higher but with this operating expense are increased as result
these expenses decreased the operating profit so this ratio is
declined.

36

Graphical Representation of Financial Ratios

Current Ratio:-

Quick Ratio:-

37

Debt to Equity Ratio:-

Debt to Total Asset Ratio:-

38

Total Asset Turnover Ratio:-

Net Fixed Asset Turnover Ratio:-

39

Equity Turnover Ratio:-

Net profit Margin Ratio:-

40

Gross Profit Margin Ratio:-

41

Operating Profit Margin Ratio:-

SWOT Analysis

INTRODUCTION
During the internship in Askari Cement I, have found out
some problems and weaknesses in the firm, which can be
solved with little efforts which will improve the efficiency of the
firm and will enable it to achieve its targets.

42

SWOT consists of four words which are stands for

1. Strengths.
2. Weaknesses.
3. Opportunities.
4. Threats.
Through the SWOT analysis technique one can analyze the
present condition and performance of a given organization and
can prepares plans for the future. In the SWOT analysis of
AWTNCP the following points can be discussed.

Strengths
Strong Brand Name.
Adoption of new technological plan.
Experienced Upper level management.
Good distribution Channel.

43

 Quality Product.

Weaknesses
Lack of Job satisfaction.
Lack of Human Resource department functions.
Lack of skilled labor.
Management Issues
Absence of pure computerized work

Opportunities
Increasing demand of cement in market.
Coal as substitute of furnace oil.

44

 Export growth in cement industry.

Good geographical position.
Upward trend of prices.
.

Threats
Entrance of potential competitors.
Low price substitute in market.
Low profit due to higher CGS
Increase in furnace oil prices

Internship Experience
How I got Internship?

45

For internship I applied in different organization when I apply in

Askari Cement Head Office in Rawalpindi I have a reference of
my uncle, who is marketing manager in Askari Cement. So with
his reference I got internship in Askari Cement Nizampur .

Learning:During my internship I learned a lot how to work practically in

real world and as a result my practical knowledge about working
and functioning of finance department is increased and it helps
me to understand theoretical aspects of study . Every one in
finance department helps me a lot and provides guidance at
every step.

Working in Finance Department:I work in following sections of finance department.

General Ledger Section
Cost and Budgeting Section
Sales Accounting Section
Bank And Insurance Section
Payment and Payable Section
Cashier

General Ledger Section:-

46

In general ledger section I have posted journal vouchers (JVs) of

different account of the company e.g sundry debtor, Sundry
creditor, different suppliers A/C, Bank A/c etc both manually and
in computer, settle accounts with site office. And also maintain
the trial balance.

Cost & Budgeting Section:In this section I learn how to make budget and how to allocate
budget provision on work order cases. At the end of month make
cost of production report.

Sales Accounting Section

In this section I spent four days and learn how to prepare record
of orders receive, dispatches and payments record.

Bank & Insurance Section

In this section I learn how to deal with banks and how to
reconcile bank statements.

Payment / Payable Section

In this section I learn how to prepare records of suppliers and
contractor. And procedure through which payment made to
suppliers and contractor.

Cashier
Here I learn how to maintain cash book. And made cheque for
salary and allowances

47

Timing:Timing during internship period

9 am start of work
10.30 Tea Time
1 pm to 2 pm Launch & Prayer break
4 pm End of work
Friday Timing
9am to 12 pm

Outcomes of Internship
I understand how to manage practical life.
Gain ability to make decisions.
How to manage himself with organization culture
Increase knowledge and skills.
How to deal with peoples in working environment.
Every one provides me guidance.
Its make me punctual and hard worker.

48

Short-Falls / Weaknesses of the Finance Department

Debt and subsequent funds were borrowed at high interest
rates i.e. 18 22% per annum.
Low exports due to high production cost as compare to other
cement producing countries.
Workload is not properly distributed among the staff members
of Finance Department. It causes frequent late sittings.
Inspite of the fact that all the departments of the organization
are equipped with computers, plenty of paper work flows
throughout the organization.
Pace of work remains slow due to certain procedural hurdles.
Job satisfaction and job security does not exist, due to
stressful working environment and continuous threat of losing
job from the higher management.
Fluctuation in AWT management lowers the interest / trust of
AWTNCP employees to cope with the financial problems.

49

Recommendations and Conclusion for Improvement

Efforts should be made to replace the loans borrowed on high
interest rates with the loans now available on the low markup.
Conversion of fuel system from furnace oil to coal firing
system should be done on top most priority basis to save the
funds being spent on the purchase of costly furnace oil.
Government should be vigorously pursued for grant of certain
tax exemptions in order to fetch export orders, which in turn
not only give boost to the sick cement industry but also earn
foreign exchange revenues.
In order to distribute workload properly among the staff
members, suitable scientific research method should be
applied, so that efficiency of the department may increase.
Computers should be utilized at there best to minimize the
paper work formalities and to speed-up the work.
Policies regarding promotion and continuity of job should be
matched with the cement sector in order to offer job
satisfaction and sense of security among the employees.

50

 Autonomy in policy making and long-term planning should be

given to AWTNCP management to avoid the impact of
change / fluctuation in top management of AWT.

References and Sources Used

In the preparation of this Internship Report help has been
obtained from the followings:.

Annual Financial statements of AWTNCP.

Web site of Army Welfare Trust

Supervision of different instructors

Annexes
The following Annexes have been enclosed with the report:Annexure #

Description

51

i.

Copy

of

Internship

Certificate

from

GM

(Finance), NCP.

52