1

Introduction:-

Shezan International Limited is a Private Limited Company, with the

main objective to set up an industrial undertaking for manufacturing of
juices, squashes, sherbets, jams, pickles and preserves from fruits and
vegetables. Shezan International Limited was conceived as a joint
venture by the Shahnawaz Group of Pakistan and Alliance Industrial
Development Corporation of U.S.A. The agricultural background of the
Pakistani sponsors induced them to establish this agro-based industry.
Taking advantage of abundance of fruits available in Pakistan and the
advanced technology provided by the American partners, Shezan
became a pioneer in the field of converting fruits into pulps,
concentrates and juices. Today Shezan is the largest food processing
unit having developed and installed the capacity to meet the country's
local as well as export needs.

Brief History:-

The company was incorporated on May 30, 1964 as a Private Limited

Company, for manufacturing of juices, squashes, sherbets, jams,
pickles and preserves from fruits and vegetables. Shezan International
Limited was a joint venture by the Shahnawaz Group of Pakistan and
Alliance Industrial Development Corporation of U.S.A. in 1964.
In 1971, Shahnawaz group purchased all the shares of Alliance
Industrial Development Corporation with the permission of the
Government of Pakistan. The company has since shown sustained
growth in both domestic and export fields. The company has been
steadily expanding its production capacity over the years. In 1980-
1981 a separate unit was installed in Karachi which now caters for
Karachi, Sindh and export demand. A new bottle filling plant was set in
1983 in the Lahore unit, increasing the capacity five fold. An
independent Tetra plant was commissioned in 1987 making us the unit
leading manufacturers with the comprehensive range of production in
the fruit processing field in Pakistan.
In the year 1990 it was decided to install a juice factory at the Hattar
industrial estate in North West Frontier Province of Pakistan. In order
to take advantage of the government incentive the company had to
make a separate company and for this purpose a new wholly owned
subsidiary of Shezan International Limited was incorporated as Hattar
Fruit Products Limited. Complete bottling plants locally manufactured
along with four lines of Tetra Pak were installed, three are filling 250
ml juices and one line is for 1000 ml packs. In all respects the
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subsidiary is now a complete unit and is manufacturing the complete

range of Shezan products except for pickles and canned products. The
company maintained its growth momentum by strong financial and
operational performance in fiscal year 2005-06. At the close of this
year the turnover has raise to Rs. 1.79 billion from Rs. 1.36 billion in
previous years.

Vision:

Shezan International is committed to be known as leader of quality of

food products in the region. Dedication to quality is a way of life at
Shezan International. They are dedicated to play their role in the
economic development of the country and to enhanced quality of life of
its people.

Mission Statement:-
Shezan International mission is to provide the highest quality fruit and
vegetable related juices and products to retail and food service
customers. We want to be the recognized industry leader in quality
and services, providing more than expected for our customers,
employees and stake holders. We will accomplish this by maintaining a
tradition of pride
in our products, growth through innovation, integrity in the
management of our business
and commitment to team management and the quality improvement
process.

Objectives / Functions:-

The objective of Shezan International is to produce and provide

products and services of the highest quality. In its activities the
company pursues goals aimed at the achievement of quality excellence
and succeeds as a profitable business. These results are derived from
the dedicated efforts of each employee in conjunctions with supportive
participation from management at all levels of the company.
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Products and Services

Shezan International Business Portfolio:-

Shezan International is the largest producer of different verities of

food products. With 47% market share they offer following portfolio to
the market which includes,

 Squashes /Cordial,
 Sherbets,
 Vinegar (Brown/White),
 Ketchup,
 Chutney,
 Sauce,
 Pickles( In Oil),
 Pickles (In vinegar) ,
 Jams/ Jellies/ Marmalades (Jar, Can, Buckets)
 Diet Jams/Marmalades (Jar)
 Quench
 Salt,
 Ispaghol
 Vegetables (Can)
 Fruits (Can).

ACTIVITIES, PRODUCTS AND SALIENT

FEATURES
PRODUCT ACTUAL

PRODUCTION

Groceries (In Dozens) 2003 2002

Squashes, Syrups and Vinegar 942520 827670

Tomato Ketchup 825 gms 99113 83438
Tomato Ketchup 300 gms 909788 88974
Jams, Jellies and Pickles 845417 771567
Cans 1050 gms 15388 13375
Cans Vegetables 850 gms 18201 13815
Cans Vegetables 14944 12302
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Confectionery (in tons)

Chocolate Confectionery 1649 1334

Sugar Confectionery 1865 1707

The capacity of the plant is not determinable as it is a multi

product plant capable of producing several interchangeable products.

INVESTMENT TRENDS
AND SCOPE FOR INVESTMENTS
The success of Hilal products, and the taste that has been
winning consumers hearts for generations, is the result of the
company's ongoing investments in, and emphasis on, its quality
control reinforced by Research and Development. Both sections
closely coordinate with the Marketing and Exports Office in
Lahore where product concepts are initiated and passed on to
R&D Section for formulation. The Marketing Division, once R&D
section has prepared sample of new products, product evaluation
is carefully carried out by marketing division. R&D, quality control
section ensures that all our products live upto the consumer's
high expectations. From selection of the finest fruits, to
processing and packaging, quality control plays a key role
keeping a vigilant and unrelenting eye on every step of the
process. The Quality Control staff, with a main up-to-date
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laboratory, two line-control labs for the Groceries and sugar

confectionery divisions, and an incubation lab, makes sure that
there is no deficiency in quality standards during production.

FUTURE OUTLOOK

(Future outlook of the organization in terms of domestic

and international competitive pressures, industry
life cycle, impact of technological changes)

QUALITY CONTROL, RESEARCH & DEVELOPMENT AND

TRAINING

The success of Hilal products, and the taste that has been winning
consumers hearts for generations, is the result of the company's
ongoing investments in, and emphasis on, its quality control reinforced
by Research and Development. Both sections closely coordinate with
the Marketing and Exports Office in Lahore where product concepts are
initiated and passed on to R&D Section for formulation. The Marketing
Division, once R&D section has prepared sample of new products,
product evaluation is carefully carried out by marketing division. R&D,
quality control section ensures that all our products live upto the
consumer's high expectations. From selection of the finest fruits, to
processing and packaging, quality control plays a key role keeping a
vigilant and unrelenting eye on every step of the process. The Quality
Control staff, with a main up-to-date laboratory, two line-control labs
for the Groceries and sugar confectionery divisions, and an incubation
lab, makes sure that there is no deficiency in quality standards during
production.
As the company considers its employees the most important
assets, management skills are being constantly update by sending
executives on courses and study tours, both at home and abroad.

CERTIFICATE OF ISO 9001 AN OTHER

SIGN OF SUPREME QUALITY

Hilal a name of Synonymous with quality, taste and trust for over 65
years has now gained another distention: ISO 9001 certification. And
at no better time than the successful completion of 65 years. It is a
matter of immense pride and honor for the company in Pakistan to
achieve this prestigious distinction. What makes it more significant is
the fact that ISO 9001 is the supreme level of certification among ISO
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series, as it involves all steps in manufacturing chain; starting from

designing and development of products to production right up to
distribution. Thus the company guided by reaches the consumers table
just as promised, farm fresh and maintaining the highest level of
quality.

Living up to its reputation of being the innovator, markets leader

and trendsetter. Hilal has once again set standard for other food
companies to follow. This will give tremendous support to the industry,
making it more competitive as well as more credible on the
international forum. Having established a comprehensive training
program for its personnel. Hilal is ensuring that the corporate mission
of quality per excellence goes from strength to strength and dedication
that drives the company to success remains its guiding force in future.

FUTURE PLANS:

As the high quality of Hilal products continues to win consumers'

confidence, the company hopes to successfully compete with reputed
foreign brand names.

Already Hilal is a name of reckon with in the markets of South West

Asia. Future plans include the expansion of the range of sugar-free
products which, while offering all the goodness and great taste
associated with the Hilal name, would meet the needs of an
increasingly health conscious segment of the market.
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Financial Statements
BALANCE SHEET:
2003 2002 2001

(Rs in thousands)
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES

Authorized capital
10,000,000 ordinary shares of
Rs. 10/- each 100,000
100,000 100,000
Issued, subscribed and paid up capital 80,094
80,094 70,000
General Reserves 1,111,500 974,500
650,500
Inappropriate profit 624 166
150
Surplus on revaluation of investment 19,089
1,211,307 1,054,760
720,650

NON-CURRENT LIABILITIES

Accumulating compensated absences 17,980 15,851

13,000
Deferred taxation 2,500 4,300
2000

CURRENT LIABILITIES

Short - term running finances - secured 563,008 563,008

270,500
Creditors, accrued and other liabilities 694,329 740,011
550,000
Proposed dividend 128,150 104,122
80,000
1,385,487 1,235,334
915,500
CONTINGENCIES AND COMMITMENTS
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2,617,274
2,310,245 165,1150

ASSETS
NON-CURRENT ASSETS

Tangible fixed assets

Operating fixed assets 237,008 237,645
350,000
Capital work - in - progress 8,585 16,064
515,000
245,593
253,709 865,000
Long - term investments 135,756
114,338 60,000
Long - term loans 4,220 3,621
2500

CURRENT ASSETS

Stores and spares 23,240

23,649 72,575
Stock - in - trade 810,400 907,448
157,575
Trade debts 150,016 90,242
35,000
Loans, advances, deposits, prepayments
And other receivables 450,546 505,186
300,000
Taxation - net 170,039
148,064 25000
Cash and bank balances 627,464
263,938 200,000
2,231,705
1,938,537 737,500
2,617,274
2,310,245 165,1150
PROFIT & LOSS ACCOUNT:

2003 2002 2001

SALES 5,260,788 5,115,599

4,500,256
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COST OF GOODS SOLD 4,608,382 4,582,165

3,568,698

GROSS PROFIT 652,406 533,434

931,558

Selling, administration and

General expenses 194,937 174,912
150,658

OPERATING PROFIT 457,469 358,522

780,900

Other income 29,913 13,106

10,500
487,382 371,628
791,400
Financial charges 34,149 64,957
50,000
Other charges 58,482 23,187
15,000
92,631 88,144
726,400
Dividend income from
Associated companies 15,335 14,487
12,929

PROFIT BEFORE TAXATION 410,086 297,971

739,329

Taxation 144,478 110,174

258,975

PROFIT AFTER TAXATION 265,608 187,797

480,354

Inappropriate profit brought forward 166 491

205
Profit available for appropriations 265,774 188,288
480,559
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APPROPRIATIONS

Transfer to general reserves 137,000 84,000

60,500
Proposed dividend @
Rs 16.00 per share
128,150 104,122 112,000
265,150 188,122 172,500
Inappropriate profit carried forward 624 166 150
Basic earnings per share - Rupees 33.16 23.45
24.00

Company Info from the financial statements

2003 2002 2001

• Annual Sales/ revenue 5,260,788 5,115,599
4,500,256

• Operating Income 457,469 358,522

780,900

• Net Income 265,774 188,288 480,559

• Interest Expense 34,149 64,957 50,000

• Total assets 2,617,274 2,310,245 1,651,150

• Total Liabilities 2,537,180 2,230,151 1,581,150

• Current Liabilities 1,385,487 1,235,334 915,500

• Long-Term Liabilities 1,151,693 994,801

665,650

• Total Equity 80,094 80,094

70,000

• EPS 33.16 23.45

24.00

• Retained Earnings 137,624 841,66

368,559
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• Dividend per Share @ 16 @ 16

@ 16

• Stock price 10 10 10

• Average price earning ratio 30% 42% 41%

• Dividend yield 1.6 1.6 1.6

Sales:

5400000
5200000
5000000
4800000 Sales
4600000
4400000
4200000
4000000
2003 2002 2001

Net Income:
500000

400000

300000 Incom e

200000

100000

0
2003 2002 2001

Operating Income:

800000
700000
600000 Operating
500000 Incom e
400000
300000
200000
100000
0
2003 2002 2001
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Total Assets:

3000000
2500000
2000000
Assets
1500000
1000000
500000
0
2003 2002 2001

Total Liabilities:

3000000
2500000
2000000
Liabilities
1500000
1000000
500000
0
2003 2002 2001

EPS:

35
30
25
20 3-D Colum n 1
15 EPS
10
5
0
2003 2002 2001

82000
80000
78000
76000
74000 3-D Column 1
72000 Equity
70000
68000
66000
64000
2003 2002 2001
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Total Equity:

Retained Earnings:

400000
350000
300000
250000 3-D Colum n 1
200000
Earnings
150000
100000
50000
0
2003 2002 2001

Price earning Ratio %

50

40

30 3-D Colum n 1

20 Earnings

10

0
2003 2002 2001
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FINANCIAL ANALYSIS
Payable Turnover in Days

Formula: Accounts payable x Days in the year

Annual credit purchases
= 8094*365
5328807
= 0.5544

Liquidity Ratios
Current Ratio: Current Assets
Current liabilities

2003 2002 2001

2231705 1938537 737500

1385487 1235334 915500
=1.61 =1.56 =.80
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Quick Ratio: Current assets-inventories

Current liabilities

2003 2002 2001

2231705- 1938537- 737500-
1385487 1235334 915500

=2.40 =1.88 =2.38

Financial Leverage Ratios:

Debt to Equity Ratio: Total debt

Shareholder’s equity

2001 2002 2003

727371 773286 679891

2174560 1930071 2158740

=0.33 =0.40 =0.31

Debt to Total Assets Ratio: Total Debt
Total assets
2003 2004 2005

727371 773286 679891

2901931 2703357 2838631

=0.25 =0.29 =0.24

Coverage Ratios
Interest Coverage Ratio: EBIT
Interest expense
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2003 2004 2005

401760 297971 410086

134268 110174 144478

=2.99 =2.70 =2.84

Activity Ratios:
Receivable Turnover: Annual net credit sales
Receivables
Receivable Turnover in Days= Days in the year
Receivable Turnover
2003 2004 2005

5134798 5115599 5260788

627464 263938 367467

=8.18 =19.38 =14.32

365 365 365

8.18 19.38 14.32

45 Days 19 Days 25
Days

Inventory Turnover: Cost of goods sold

Inventory
Inventory Turnover in Days= Days in the year
Inventory Turnover
2003 2004 2005

4495167 4582165 4608382

833640 931127 902943
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=5.39 =4.92 =5.10

365 365 365

5.39 4.92 5.10

68 Days 74 Days 72
Days
Total Asset Turnover: Net sales
Total assets
2003 2004 2005

5134798 5115599 5260788

2901931 2703357 2838631

1.77 1.89 1.85

Profitability Ratios:
Gross Profit Margin Ratio: Net sales – cost of goods sold
Net sales

2003 2004 2005

639631 533434 652406

5134798 5115599 5260788

0.12 % 0.10 % 0.12 %

Net Profit Margin Ratio: Net profit after taxes

Net sales

2003 2004 2005

267492 187797 265608

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5134798 5115599 5260788

0.05 % 0.04 % 0.05 %

Return on Investment: Net profit after taxes

Total assets
2003 2004 2005

267492 187797 265608

2901931 2703357 2838631

0.09 % 0.07 % 0.09 %

Return on Equity: Net profit after taxes

Shareholder’s equity
2003 2004 2005

267492 187797 265608

2174560 1930071 2158740

0.12 % 0.10 % 0.12 %

Trend Analysis:
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2003 2004 2005

Industry

Average
Liquidity
Current Ratio 3.57 3.11
3.74 3.10
Quick Ratio 2.40 1.88
2.38 1.79
Leverage
Debt-to-Equity Ratio 0.33 0.40
0.31 0.30
Total-debt-to-total-assets Ratio 0.25 0.29
0.24 0.23
Coverage
Interest coverage ratio 2.99 2.70
2.84 2.65
Activity
Average collection period 45 days 19 days 25
days 50 days
Inventory turnover in days 68 days 74 days
72 days 65 days
Total asset turnover 1.77 1.89
1.85 1.95
Profitability
Gross profit margin 0.12 % 0.10 %
0.12 % 0.8 %
Net profit margin 0.05 % 0.04 %
0.05 % 0.03 %
Return on investment 0.09 % 0.07 %
0.09 % 0.12 %
Return on equity 0.12 % 0.10 %
0.12 % 0.25 %

Financial Health
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The financial health of the firm is very strong with reference

to the other firms in the industry. It has attraction for the
investors to invest and the creditors to finance the firm.

Weakness
The weakness of the company is its less efficient in the
inventory turnover which is not stable and total assets
turnover is decreasing.
Suggestions
The solution to this problem is;
 The firm should decrease the days of inventory
turnover.
 The firm should give attention to its production
departments. To produce in less time and sale early to
decrease the inventory turnover days.

Conclusion
Overall the firm is going very well. The firm can get short
term and long-term loan very easily. But the firm got loan
early on the high interest; the inventory turnover is very
high.