Internship FL

LYALLPUR CHEMICALS & FERTILIZERS (PVT) LIMITED
Internship Report
Submitted By Shahzad Javed
Roll No. M06MBA033
Submission Date 22/09/2008
Hailey College of Banking & Finance

University of the Punjab, Lahore.
INTERNSHIP REPORT 1
INTERNSHIP REPORT 2
Executive Summery
Allahdin is a rapidly growing Group of Companies. It started its business in 1994. The
main focus of activities encompasses areas of agrochemicals, seeds & fertilizers. The
group is one of the biggest agrochemical products manufacturer and seller in the country.
Lyallpur Chemicals & Fertilizers (Private) Limited was incorporated on June 04, 1958 as
a public limited company under the companies act, 1913. Since incorporation the
company was a subsidiary of National Fertilizer Corporation of Pakistan (Private)
Limited.
In February 2007 it has been taken over by Al-hamd Chemicals (Private) Limited through
privatization commission.
The company is principally engaged in the business of manufacturing Single Super

Phosphate (SSP), Zink Sulphate and Sulphuric Acid.
The manufacturing unit is situated at Lahore Road, Jaranwala and registered office of the
company is situated at Suit number 18, 3rd Floor, Shane Arcade, New Garden Town,
Lahore.
The status of the company has been changed from non listed “Public Limited” to “Private
Limited” in this financial year 2007-08.
The turnover for the year ending 30th June 2008 is Rs. 845 million (including Subsidy of
RS. 325 M) and equity Rs. 503.130 million including revaluation surplus.
INTERNSHIP REPORT 3
Production Capacity
Products Rated Plant Capacity
Sulphuric Acid 46,000 M. Tons per annum

Single Super Phosphate (P & G)) - 18% P2O5 85,000 M. Tons per annum
Zinc Sulphate (21% Zinc) 1,500 M. Tons per annum
Major Suppliers
Rock Phosphate---Imported from Egypt and Jordon (El-Waha For Trade Co).
Sulphur--- Purchased from Pak Arb Refinery (PARKO) and Oil & Gas Development Co
Limited.
Zink Ash---Purchased from International Industries Limited.
Marketing Objectives
• Experience an increase in new customers who are turned into long-term

customers.
• Maintain positive, steady growth each month in market development.
• Generate brand equity at the Farmer's Market as well as within the commercial
traders market.
Target Market
Their target market is the farmer, who has harvesting area in province Punjab.
Sales Target
2007.8 2008-09
Sales 72,439 Tons 90,000 Tons

Advance Booking 68,705 Tons 108,000 Tons
INTERNSHIP REPORT 4
CONTENTS
Particulars Page No.
Group Introduction ………………………………………………… 01
Management Philosophy …………………………………… … 03
Mission Statement ………………………………………………04

Vision Statement …………………………………………….. 04
Group and its Associates ……… …………………………..05
Warble Chemicals (Pvt) Limited ……………………………………05
Welcon Chemicals (Pvt) Limited ……………………………….06
Weal-Ag. Corporation …………………………………………….07
Agri Village International …………………………………………08
Nasco (Pvt) Limited ………………………………………………08
Al-Hamd Chemicals (Pvt) Limited …………………………………..09
Lyallpur Chemicals & Fertilizers (Pvt) Limited …………………..09
Hi-Warble Pharmaceuticals (Pvt) Limited ………………………10
Welcon International ……………………………………10
Nasco Industries ………………………………………………11
Farm Fertilizers (Pvt) Limited ……………………………………..11
Lyallpur Chemicals & Fertilizers (Private) Limited …….12

Introduction ……………………………………………………12
Management Philosophy …………………………………14
Core Values …………………………………………………14
Mission Statement …………………………………………..15
INTERNSHIP REPORT 5
Vision Statement ……………………………………………. 15

Company Information …………………………………..16
Hierarchical Structure ……………………………………….19
List of Share Holders …………………………………………20
Capital Holdings ……………………………………….20
Manufacturing and Trading Products of Company …...…21
Manufacturing Products ……………………………………21
Input Ratios of Manufacturing Products ……………………………………21
Production Capacity ………………………….22
Percentage of each manufacturing product in the total production ………..22
Major Suppliers ……………………………………………..22
Trading Products ………………………………………23

Productions Process ………………………….24
Process Block Diagram Of Sulphuric Acid (H2so4) Plant ……….24
Process Block Diagram Of Single Super Phosphate (SSP) Plant .25
Process Block Diagram Of Zinc Sulphate Plant …………….26
Rock Acid Reaction For Manufacturing of SSP …………27
Human Resource Department . . . . . . . .…………………28
Introduction …………………………………28
The Purpose of HRM …………………………….28
Structure of the Human Resource Department ………….29
Objectives of Human Resource Department …………….30
Organizational Objective ……………………………30
Personal objective …………………………………30
Recruitment and Selection …………………………….31
INTERNSHIP REPORT 6
Selection Procedure ……………………………….31

Role of HRD in Recruitment Process ……………………………31
Procedure of Joining the Company ………………………….31
Recruitment Process …………………………………….32
Internal Job Posting ……………………………….32
Self Nomination ………………………………32
Nomination by Employees Supervisor …………33
External Job Posting …………………………….33
Advertising ………………………………………….33
Employment Agencies …………………………………33
Casual Applications ……………………………….34
Leasing ……………………………………………….34
The Hiring Procedure …………………………………….34

Call for application ………………………………………..34
Preliminary interview ………………………………….35
Applications blank …………………………………………35
Check of References ……………………………………….36
Psychological test …………………………………….36
Intelligence test …………………………………………….36
Mechanical Aptitude test …………………………………….37
Clerical Aptitude Test ……………………………………….37
Interest Test ……………………………………………37
Employment interview ………………………………….37
Approval by the supervisor ………………………….38
Physical examinations ………………………………..38
INTERNSHIP REPORT 7
Training Needs Assessments …………………… 41

Organization analysis …………………………41
Operation analysis ……………………………41
Individual Analysis ……………………….41
Operative Training ………………………………….41

On the Job Training ...……………………41
Off the Job Training ……..42
Workers Training Program …………………..42
Special Courses …………………………..42
Selling and Technical skills training program ……….43
Evaluating Training Programs …….43

Reaction ………………………………43
Learning ……………………………….43
Behavior ……………………………………………….44
Results ……………………………………………………44
Management and Career Development ………………44

Evaluation of HRD Performance ………………….45
Salary Administration ……………………………..45

Promotions ……………………………………….46
Demotions ……………………………………..47
Commission and Salaries ………………………..47
System of Communication …………………………48
Negotiating With Union …………………………..48
INTERNSHIP REPORT 8
WOT Analysis of HR Department ………………………..49

Conclusion …………………………….50
Suggestions ……………………………………….50
Sales and Marketing …………………………….51
Products ……………………………………..51
Situational Analysis …………………………..52
Market Summary ………………………………….52
Seasonal Variation …………………………………..52
Market Potential …………………………………….53
Marketing Strategy …………………………………….54
Marketing Objectives ……………………………….54
Financial Objectives ………………………………..54
Target Market …………………………………..54

Positioning ………………………………………….54
Marketing Mix ………………………………………54
Product …………………………………………54
Place …………………………….55
Promotion ……………………………….55
Price …………………………………………55
Sales Forecast ………………………………………….56
Sale During 2007-08 ………………………………….57
Sale During 2008-09 …………………………………57
Sales Target ……………………………………..57

Sales Incentive …………………………….59
INTERNSHIP REPORT 9
Controls …………………………60
SWOT Analysis …………………………………61
Financial Statement Analysis ……………..62
Classification of Accounting Ratios ……………….62
Financial Statements ……………………………..66
Analysis of Accounting Ratios ………………..68
Review Report With respect to Investors and Creditors …86
INTERNSHIP REPORT
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Purpose of Study
The basic purpose of this report writing is:
• To analyze Lyallpur Chemicals & Fertilizers (Pvt) Limited from financial

prospective.
• To know how different operations are carried out in Lyallpur Chemicals &
Fertilizers (Pvt) Limited.
• To bridge the gap between theory and practice.
Scope of Study
In a limited time and limited available data I was not able to cover every aspect of the
organization. However this report covers inception of Lyallpur Chemicals & Fertilizers
(Pvt) Limited, vision and mission statement, different products offered by the company,
SWOT analysis of Lyallpur Chemicals & Fertilizers (Pvt) Limited, Problems,
Recommendations and in the end conclusion.
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Methodology of Study
For completion of this report the fountain head of information and knowledge was
Primary Data
The primary data is collected through following means:
• Discussions with staff

• Through personal observation
Secondary Data
Secondary data is collected through following means:
• Through consulting documents

• Annual reports.
• Internet
• Books
• Journals
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Acknowledgment
I have no words to express my deepest sense of gratitude and thanks to Almighty Allah
(The Compassionate & the Merciful) who enabled me to complete this report. I
appreciate deep appreciation and gratitude to Lyallpur Chemicals & Fertilizers (Pvt)
Limited staff Specially Mr. Ahmad Jamal and other staff for their valuable suggestions
and kind cooperation.
I am grateful to the Hailey College of banking and finance & my respected teachers who
gave me an opportunity to enhance my capabilities. This was very much helpful for me
because, I have learnt a lot by applying theoretical knowledge in practical field.
I am also grateful to all the employees of Lyallpur Chemicals & Fertilizers (Pvt) Limited
who guide me. The behavior of all the department supervisors was very good and they
gave a lot of time to guide me. At the end, I would like to thank to my parents who
always guided, supported & directed me to the right ways that enabled me to reach this
stage.
Thanks to all!
Shahzad Javed
M06MBA033
INTERNSHIP REPORT
13
Allahdin Group of Companies
Allahdin is a rapidly growing Group of Companies. It started its business in 1994. The
main focus of activities encompasses areas of agrochemicals, seeds & fertilizers. The
group is one of the biggest agrochemical products manufacturer and seller in the country.
They say, “We have played vital role in breaking the monopoly of the multinational
giants and have brought down the prices of agrochemicals in the country through
indigenous production and competitive selling”.
Allah Din Group of Companies has developed an integrated network of marketing

facilities and a team of agricultural graduates across the country, who are expert in the
field of latest techniques of agricultural production and provide services to the growers in
increasing their yield of various crops. The Group has developed the labs equipped with
the latest/modern equipments. The Group has maintained its land farms for practical
experience of agricultural production research & development. The results of experience
are disseminated to the farmers.
Allah Din Group has now entered into fertilizer manufacturing industry after purchasing
Lyallpur Chemicals and Fertilizers (pvt) Limited, from privatization Commission of
Pakistan.
Presently with the high level of commitment, hard working and better business strategies
Allahdin Group of Companies is the largest importer of pesticides in Pakistan. Allahdin
Group of Companies is not only distributing pesticides and fertilizers through their own
distribution network but is also supplying a complete range of pesticides and SSP (Single
Super Phosphate) fertilizers to the farmer and dealers. Allahdin Group Of Companies as
group with strong presence in all pesticide segments seized the opportunity to maintain
position as a leader of agricultural business. The prime objective of Allahdin group is to
INTERNSHIP REPORT
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optimize the technical assistance in a bid to provide the high quality product, prepared at
the most modern manufacturing facility.
Allahdin group says, “Our employees pay explicit attention to values, they believe values
are not hard like structure rather they are well passionate on compromising and proud to
be part of a dynamic team. We grow with people and it draws from life, to redraw life, to
meet the challenge of a changing world it challenges everyone to go beyond what they
think that they are capable of doing to constantly redefine. The people who work with us
don’t just accept future they are helping it to create it. They believe that sow is act and
you reaping a habit. People on operational level are not just to implement the strategic
plans but they feel and are regarded as a team thus our employees work like a team”.
The agro chemical division of Allahdin group of companies handles the imports,
manufacturing and sale of about 1/4th share of total business of the country which is
around Rs.2 – 3 billion and this volume is compatible with their competitor M/S Ali
Akber Group of Companies. It means that 50% market share is covered by both the
biggest groups. The rest 50% is covered by multinational and other companies of the
sector.
During next year group plans to expand the business of agro chemicals by 25- 35% both
in imports & manufacturing.
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Management Philosophy
“We are committed to ensuring the safe and plentiful harvest of tomorrow. A global
population grows and society became so industrialize, it demands more food from less
land, plants, to meet these changing needs, ALLAHDIN GROUP is dedicated
discovering and developing innovative solutions for sustainable agriculture, applying
advanced potential through effective crop protection. As we believe in protecting and
improving the quality of human life, we are strongly committed to develop and
manufacture cost-effective pesticide products.”
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Mission Statement
“Our mission is to improve our Group’s self-image & sense of community together with
its perception and standing in the community at large with that believe that Agri Village
is as different and distinct from competitors and other companies”.
Vision Statement
“Our vision is to achieve a sustained increase in corporate sector with the interests of our
stockholders, Business Partners, Customers, Employees and the whole pesticide sector”.
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The Group and its Associates
i)- Warble Chemicals (Pvt) Limited
Warble Chemicals (Pvt) Limited is one of the main pesticide company of Allahdin Group
which came into existence in 1997 with the high level of commitment, hard working and
better business strategies. Warble Chemicals (Pvt) Ltd is now one of the largest importers
of pesticides in Pakistan. Warble is not only distributing pesticides through his own
distribution network but is also supplying a complete range of pesticides to a number of
local companies.
The objectives behind the establishment were to feed small distribution houses in the
local market. Through this business, unit objective is to give products to small companies
and small multinationals, like ICI, Niche Men etc.
Warble is the first in the pesticide sector to start the formulation facility at Multan (Heart
of Cotton Belt) comprises of high tech formulation plant, filling lines and packaging
facilities with annual capacity 4 million litters.
Warble is equipped with all pre-requisites for meeting the future challenges successfully.
Warble (Pvt) Limited has Agri-Graduates and a high number of professionally qualified
persons in Sales, marketing, Production, finance & administration.
Warble Chemical is fully committed to provide effective & economical solutions to

Pakistani farmers. They are offering a complete product range of insecticides, fungicides
and herbicides to their distributors and farmers for each crop.
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The import of Rs. 849 million & turnover for the year ending 30th June 2008 is Rs.
1021.176 million and equity Rs. 239.473 million.
Haji Atta-ur-Rehman Chief Exec.

Mrs. Ghazala Asmat Director
Mr. M. Saeed Qureshi Director
Ch. Iftikhar Nazir Director
ii)- Welcon Chemicals (Pvt) Limited
Welcon Chemicals (Pvt) Limited is one of the largest pesticide company in Pakistan. This
is incorporated in December 1994 and has 95 qualified staff and experience filed staff.
They said we are one of the most leading Agri Business house in Pakistan. In other word
you can say that we are one of the biggest importer and leading distributors, having own
formulation plant, high tech quality control lab with complete product range.
The objective of the company is to provide quality and competitive priced products from
imports to the technical advisory services for its end users and small distribution houses.
Welcon Chemicals (Pvt) Limited with strong presence in all pesticide segments are
seizing the opportunity to maintain our position as one of the leaders in Agro-Business.
Its team is consisting of highly professional and skilled. Welcon is operating countrywide
and providing services to the end users, through eight regional and sixty zonal and area
offices.
The imports of Rs. 600 million and turnover for the year ending 30th June 2008 is Rs.
787.093 million and with the equity Rs. 108.250 million.
Ch. Iftikhar Nazir Chief Exec.

Ch. Zia-ur-Rehman Director
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iii)- Weal-Ag. Corporation
Weal-Ag is the Pakistan's leading generic manufacturer and distributor of crop protection
products. The group ranks amongst the Pakistan's largest manufacturers of crop
protection chemicals, with a wide range of advanced, environmentally friendly products.
Weal-Ag Corporation is mainly in business of developing, manufacturing and

distributing pesticides. In conformity with the demands of current market, it is equipped
with sophisticated instruments. It has become a sole producer. Since its establishment it
has developed into an integrated group. The introduction of Weal-Ag, highly profitable
and highly marketable products has brought to its attention. Meanwhile, it has
emphasized the importance to collaboration with the research institutions.
The entity is dealing with the import and marketing of agrochemicals besides, seeds and
fertilizers, also marketed through a chain of retail outlets in the area. The entity enjoys
good credibility for sales of quality products on reasonable rates.
The turnover for the year ending 30th June 2008 is Rs. 73.146 million and equity Rs.
8.423 million.
Ch. Iftikhar Nazir Partner

Haji Atta-ur-Rehman Partner
Mrs. Ghazala Asmat Partner
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iv)- Agri Village International
It is dealing with multifarious activities of various grower’s friendly supplies & services
pertaining to pesticides, seeds & fertilizers. The turnover for the year ending 30th June
2008 is Rs. 5.456 million and equity Rs. 47.103 million.
Ch. Zia-ur-Rehman Partner

Mrs. Abida Atta Partner
Mr. Waqas Siddique Partner
v)- Nasco (Pvt) Limited
NASCO (Pvt) Limited is a conglomerate having diversified business interests in the area
of Pet Bottling in Allahdin Group of Companies. NASCO (Pvt) Limited is the leading
player in the Pet Bottling Production creating value for Allahdin group requirements at
all levels.
NASCO (Pvt) Limited pet bottling plant has great value in pesticide sector. Nasco Pet
bottle plant started its work in March 2004 and its main emphasize is to fulfill the
requirements of bottles of pesticide market. Nasco team is consisting of highly
professional and skilled .With the help of competent employees group is able to produce
the different type and different size of pesticide pet bottles according to the demands of
the customer/consumer.
Nasco said, “We are the one who are manufacturing the different kinds of bottles for our
different companies like Welcon Chemicals, Warble Chemicals, Weal-Ag Corporation
and other pesticides companies according to their limits. we are also producing the
different types of Caps, Stoppers and Mearing Cup that are going to be produced from the
Moulding Machine and they really provides the boosting support to enhance the financial
profit of the Allahdin group.
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The turnover for the year ending 30th June 2008 is Rs. 11.544 million and equity Rs.
6.456 million.
Ch. Zia-ur-Rehman Chief Exec.
Haji Atta-ur-Rehman Director
Ch. Iftikhar Nazir Director
vi)- Al-Hamd Chemicals (Pvt) Limited
It deals in marketing of Fertilizer in the country. It started its business in February 2008
with paid up capital of Rs. 150.000 million. It is expected that the turn over for next year
would be around Rs. 800.000 millions.

vii)-Lyallpur Chemicals & Fertilizers (Pvt) Limited
The unit Lyallpur Chemicals and Fertilizers (Pvt) Limited is situated at Jaranwala Distt.
Faisalabad, has been purchased from National Fertilizers Corporation of Pakistan Limited
(NFC) through Privatization Commission of Pakistan. The entity is dealing in production
of single super phosphate, sulphuric acid and zink sulphate. The turnover for the year
ending 30th June 2008 is Rs. 845 million (including Subsidy of RS. 325 M) and equity Rs.
503.130 million including revaluation surplus.

Hafiz Khalil-ur-Rehman Director
Mrs. Ghazala Asmat Director
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Allah Din Group of Companies have purchased the unit through open bidding from PC /
NFC. M/S Al-Hamd Chemicals (Pvt) Limited was the highest bidder, however the PC
advised to match the reserve price and finally the bid was approved by the Federal
Government.
PRICE OF LC&FL PAID TO PC

Rs. Millions
Bid price 280.200
50 % Shares of GHS/VSS 7.136
Total 287.336
For LC&FL the imports of raw materials for next year may be around Rs.330 Million.
viii)- Hi-Warble Pharmaceuticals (Pvt) Limited
The Company has started its business of pharmaceutical products and trying to introduce
the medicines in the country (which is presently being imported and sold by others at
higher prices) that would provide relief to the common man through reduced pricing of
medicines. The turnover for the year ending 30th June 2008 is Rs. 27.758 million and
equity is minus Rs. 20.540 million.

Haji Atta-ur-Rehman Director
Mr. M. Siddique Director
Mr. Waqas Siddique Director
ix)- Welcon International
This is altogether different activity of the group. By this, the group has launched into the
export services, initially of carpets. The export of other items is being envisaged. The
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exports for the year ending 30th June 2008 is Rs. 92.069 million and equity Rs. 52.862
million. The export for next year may be around Rs. 300 million.
Ch. Iftikhar Nazir Sole Proprietor
x)- Nasco Industries
This is a cotton ginning unit , initially the ginning activity is being carried out, however
the further process of oil expelling has been envisaged and planned during coming cotton
season. The turnover for the year ending 30th June 2008 is Rs. 8.525 million and equity
Rs. 27.424 million.
Haji Atta-ur-Rehman Partner

Ch. Zia-ur-Rehman Partner
Ch. Khalil-ur-Rehman Partner
xi)- Farm Fertilizers (Pvt) Limited
Newly constituted company for expansion in sale of Fertilizer products. This company is
also qualified bidder for purchase of Hazara Phosphate Fertilizers Ltd. Haripur, NWFP
from NFC through Privatization Commission. Its paid up capital is initially Rs. 0.500
million only. No business operation carried out upto March 2007. However on response
from PC the raising of funds for purchase of HPFL shall be arranged through equity viz-
a-viz from banks/DFIs.
Haji Nazir Ahmed Chief Exec.

Miss Zara Iftikhar Director
Mrs. Abida Atta Director
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Lyallpur Chemicals & Fertilizers (Private) Limited
Introduction
Lyallpur Chemicals & Fertilizers (Private) Limited was incorporated on June 04, 1958 as
a public limited company under the companies act, 1913. Since incorporation the
company was a subsidiary of National Fertilizer Corporation of Pakistan (Private)
Limited.
Lyallpur Chemicals & Fertilizers Limited was initially established with 50 Tons/day
capacity of Sulphuric Acid manufacturing and Single Super Phosphate (Powder)
manufacturing plant having rated capacity of 36000 Metric Tons per year.
Subsequently, another Sulphuric Acid unit of 50 Tons/day capacity was installed in

August, 1975 and rated capacity of Single Super Phosphate (Powder) unit increased to
72,000 Metric Tons per annum.
The plants of Lyallpur Chemicals & Fertilizers Limited were closed down in July, 1996
due to uneconomical operation when subsidy on import of raw material (Rock Phosphate)
was withdrawn by the Government of Pakistan. Later, the plants were rehabilitated at a
cost of Rs. 21.981 million and restarted in May, 1999. A Zinc Sulphate Plant of 5 Metric
Tons/day capacity was also started in Lyallpur Chemicals & Fertilizers Limited
Jaranwala site and put into operation in March, 2001.
However in February 2007 it has been taken over by Al-hamd Chemicals (Private)
Limited through privatization commission. The company is principally engaged in the
business of manufacturing Single Super Phosphate (SSP), Zink Sulphate and Sulphuric
Acid. The manufacturing unit is situated at Lahore Road, Jaranwala and registered office
of the company is situated at Suit number 18, 3rd Floor, Shane Arcade, New Garden
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Town, Lahore. The status of the company has been changed from non listed “Public
Limited” to “Private Limited” in this financial year 2007-08.
Total area including factory area & housing colony is 67 Acres.
Price of Lyallpur Chemicals & Fertilizers (Private) Limited Paid to Privatization

Commission
Rs. Millions
Bid price 280.200
50 % Shares of GHS/VSS 7.136
Total 287.336
The turnover for the year ending 30th June 2008 is Rs. 845 million (including Subsidy of
RS. 325 M) and equity Rs. 503.130 million including revaluation surplus.
For LC&FL the imports of raw materials for next year may be around Rs.500 Million.
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MANAGEMENT PHILOSOPHY
“We are committed to ensuring the safe and plentiful harvest of tomorrow. A global
population grows and society became so industrialize, it demands more food from less
land, plants, to meet these changing needs, Lyallpur Chemicals & Fertilizers (Private)
Limited is dedicated discovering and developing innovative solutions for sustainable
agriculture, applying advanced potential through effective crop protection. As we believe
in protecting and improving the quality of human life, we are strongly committed to
develop and manufacture cost-effective fertilizers products.”
CORE VALUES
“At Lyallpur Chemicals & Fertilizers (Pvt) Limited we comprehend our core values to be
the most significant factor leading to the existence and growth of this prestigious
organization.
How we accomplish our mission is as vital as the mission itself. Thus these values are not
only on paper and pen but lounge deep in the heart of each individual working or
associated with Lyallpur Chemicals & Fertilizers (Pvt) Limited.”
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MISSION STATEMENT
“Our mission is to improve the quality of life by manufacturing the fertilizer products.
We will achieve it by reducing the cost of fertilizer products while striving hard to
maintain high quality”.
VISION STATEMENT
“Our vision is to be the National wide leader in providing fertilizer products and
combined solutions for pesticide sector”.
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COMPANY INFORMATION
Board of Directors
Chairman Ch. Iftakhar Nazir
Chief Executive Ch. Iftakhar Nazir
Directors Ch. Zia-ur-Rehman

Hafiz Khalil-ur-Rehman
Mrs. Ghazala Asmat
Company Secretary Muhammad Ashraf Zia
Chief Financial Officer Mr. Faisal Khalid
Audit Committee
Chairman Mr. Ahmad Jamal
Members Haji Bashir Ahmad

Mrs. Naziran Begum
Head of Internal Audit and Secretary Mr. Muhammad Tariq
Auditors M/S Anjum Asim Shahid Rehman

Chartered Accountants
Legal Advisor Mr. Sahibzada Muhammad Arif
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Bankers
Emirates Global Islamic Bank
(Y-Block, DHA, Lahore)
The Bank of Punjab

(New Garden Town, Lahore)
Askari Commercial Bank Limited

(Main Boulevard, Gulburg III, Lahore)
Faysal Bank Limited

(MM Aalim Road, Gulberg III, Lahore)
Habib Bank Limited

(Jaranwala Branch, Jaranwala)
Muslim Commercial Bank Limited

Saudi Pak Commercial Bank Limited

(Gulburg III, Lahore)
Saudi Pak Industrial and Agricultral

Iinvestment Co. (Pvt) Limited
(Gulburg III, Lahore)
Standard Chartered
National Bank of Pakistan

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United Bank Limited

Registered Office Suit #18, 3rd Floor, Shan Arcade,

New Garden Town,
Lahore, Pakistan.
Factory Mauza Chak No. 128/GB,

Lahore Road, Jaranwala, Dist.
Faisalabad.
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Hierarical Structure of Lyallpur Chemicals &

Fertilizers (Pvt) Limited
Ch. Iftakhar Nazir

(Chairman)
Hafiz Khalil-ur-Rehman Mrs. Ghazala Asmat

Ch. Zia-ur-Rehman (Director) (Director)
(Director)
M. Afzal Choudhry Zafar Iqbal M. Ashraf Zia

(MD Production) (Business Manager) (GM. Finance & Accounts)
M. Javed Opal Talib Hussain M. Idrees

(Sr.Manager Maintenace) Mukhtar Ahmed (Manager Finance) (Manager Accounts)
(Sr.Manager Production)
M. Faisal Bajwa
(Manager Accounts)
Rao Amir Sharif Abdul Salam
(Manger Marketting) (HR Manager)
Tanveer Abid
(Admin Officer)
Irfan Javed Imran Saeed
(Marketting Officer) (Marketting Officer)
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List of Share Holders
Name S/O , W/O Address Occupat NTN CNIC Shares

ion Held
1 Al-Hamd Chemicals NA Suit No.3 Limited 25816 Reg. No. 999,996
(Pvt) Ltd. 3rd Floor, Shan Co 70 0053057
Arcade New
Garden Town
Lahore
2 Ch. Iftikhar Nazir Haji Nazir 154-L Model Industria 09885 35202- 1
Ahmed Town Lahore list 96-0 9177226-9
3 Ch. Zia-ur-Rehman Haji Nazir H#18, St# 1 Industria 13232 36101- 1
Ahmed Block # 3 list 62-2 5222868-3
Jehanian Distt.
Khanewal
4 Hafiz Khalil-ur- Haji Nazir H#18, St# 1 Industria 22464 36101- 1
Rehman Ahmed Block # 3 list 52-2 1270197-7
Jehanian Distt.
Khanewal
5 Mrs. Ghazala Asmat Ch. 154-L Model House 10079 35202- 1
Iftikhar Town Lahore wife 68-8 1441328-8
Nazir
1,000,000
Capital Holdings
Associates (Al-hamd) 99.9996%
Directors 0.0004 %
Financial Institutions %
General Public %
Others %
Total 100 %
Manufacturing and Trading Products of Company
Manufacturing Products
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1. Single Super Phosphate (SSP) Fertilizer

• Manufactured in the form of Powder and Granular
• Use in preparation of land before cultivation
• Cheaper than other fertilizers
• Alternate of DAP Fertilizers
• More beneficial than DAP fertilizers
2. Sulphuric Acid
• Known as king of chemicals
• Mostly in-house use
• Use in production of SSP and Zink Sulphate
3. Zink Sulphate
Input Ratios of Manufacturing Products
1. Single Super Phosphate
1 Metric Ton SSP = 68 % Rock Phosphate + 36 % Sulphuric Acid

( Extra amount is wastage )
2. Sulphuric Acid
1 Metric Ton Sulphuric Acid = 35 % Sulpher + Water
3. Zink Sulphate
1 Metric Ton Zink Sulphate = 35 % Zink Ash + Sulphuric Acid
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Production Capacity
Products Rated Plant Capacity
Sulphuric Acid 46,000 M. Tons per annum

Single Super Phosphate (P & G)) - 18% P2O5 85,000 M. Tons per annum
Zinc Sulphate (21% Zinc) 1,500 M. Tons per annum
The Management is making efforts to enhance the production capacity of fertilizer from
85,000 Metric Tons to 240,000 Metric Tons.
Percentage of each manufacturing product in the total production
Single Super Phosphate 90%

Sulphuric Acid 07 %
Zink Sulphate 03 %
Major Suppliers
1. Rock Phosphate---Imported from Egypt and Jordon (El-Waha For Trade Co).
2. Sulphur--- Purchased from Pak Arb Refinery (PARKO) and Oil & Gas Development
Co Limited.
3. Zink Ash---Purchased from International Industries Limited.
Trading Products
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There is not any trading product of Lyallpur Chemicals & Fertilizers (Pvt) Limited. In
fact Lyallpur Chemicals & Fertilizers (Pvt) Limited is a manufacturing concern and its
holding company Al-Hamd Chemicals (Pvt) Limited is trading concern.
750~ 4 6 0o C
S U L P H U R1 3 4oC 8 5 0o C
SU L P H U R M EL TI N G FUR NA C E B O IL E R HO T GA S
ST O R E F IL T E R
PI T S
1 7 0o C
S t a ck
A C ID 5 5o C A C ID 7 5o CA B S O R P T I 3O0N0o C 4 3 0o C
PR E SO 3
ST O R A G E C IR C U L A T IO N
TO W ER H EA T ER C ON V ER T O R
TA N K S PU M P
AI R
ACI D D R Y IN G A IR
E XPO R T TO W ER B LO W ER
PU M P
Fi ll l in g T o S S P & Z4 n S O
PRODUCTIONS
P o in t
P la n t s PROCESS
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36
Process Block Diagram Of Sulphuric Acid (H2so4) Plant
RO CK BU CK ET G R IN D IN G F IN E R O C K P IO D O
SH EDS E LE VAT O R M IL L HOPPER M ETER
C U R IN G M A IN B E L T M E T A L L IC
DEN M IX E R
SHED CO N VEYO R CO N VEYO R
F O R BAG G I N G &
L O AD I N G
A C ID D IL U T E D IL U T E
W AT E R D IL U T IO N A C ID A C ID
U N IT TANK PUM P
SU L PH U R I C ACI D
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Process Block Diagram Of Single Super Phosphate (SSP) Plant
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Process Block Diagram Of Zinc Sulphate Plant
Z IN C A SH
SU L PH U R I C ACI D
W AT E R
4 5oC o o M O TH E R
BUCK ET S E T T L IN3 G5 C F I L T E R 3 0C
REACTORS L IQ U O R
E LE V A T O R TAN KS PRESS P IT
MUD MUD
P A C K IN G & C R Y S T A L5 I0oC
B U LK C E N T R IF U G E
S E A L IN G Z A T IO N EVA PO R ATO R
M A C H IN E
STO RE M A C H IN E
P IT STEAM
ST ACK I N G & D E SPAT CH
Rock Acid Reaction For Manufacturing of SSP
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Phosphoric Acid (Free

Acid)
Calcium Mono
Rock + Acid Phosphate
Calcium Di Phosphate
Calcium Sulphate
Tri Calcium Phosphate

(Rock)
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HUMAN RESOURCE DEPARTMENT
Introduction
In Lyallpur Chemicals & Fertilizers (Pvt) Limited Human Resource department is

helping people and organization to reach their goals. Along the way, the department is
facing many challenges arising from the demands of the employees, the organization, and
society. The domestic and international environments are particularly turbulent because
of the growing diversity of the workforce and the globalization of businesses. Challenges
also result from ever-changing laws, especially laws that address the need for equal
employment opportunity. Within these constraints, the human resource department is
contributing in the organization's "bottom line" in ways that are both ethical and socially
responsible.
The Purpose of HRM
The purpose of human resource management in Lyallpur is to improve the productive

contribution of people to the organization in ways that are strategically, ethically, and
socially responsible.
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Structure of the Human Resource Department
Manager Human Resource

& Administration
Deputy Manager Deputy Manager

HR Admin
Assistant Administration
Manager HR Officer
Computer
Secratery
Operator
Objectives of Human Resource Department

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Managers and HR departments achieve their purpose by meeting objectives. Objectives

are benchmarks against which actions are evaluated. Sometimes they are carefully
thought out and expressed in writing. More often objectives are not formally though out
and expressed in writing.
The main objectives of Human Resource Management are not only to reflect the intention
of senior management, they also must balance challenges from the organization, the HR
function, society, and the people who are affected. Failure to do so can harm the firm's
performance, profits, and even survival. These challenges spotlight some objectives that
are:
Organizational Objective
To recognize that HR management exists to contribute to organizational effectiveness.

Even when a formal HR department is created to help managers, the managers remain
responsible for employee performance. The HR department exists to help managers
achieve the objectives of the organization. HR management is not an end in itself; it is
only a means of assisting managers with their human resource issues.
Personal objective
To assist employees in achieving their personal goals, at least insofar as those goals
enhance the individual's contribution to the organization. The personal objectives of
employees must be met if workers are to be maintained, retained, and motivated.
Otherwise, employee performance and satisfaction may decline and employees may leave
the organization
Not every HR decision can meet these organizational, functional, societal, and personal
objectives every time. Trade-offs do occur. But some serve objectives are a check on
decisions. The more these objectives are met by the department's actions, the larger its
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contribution will be to the organization's bottom line and the employee's needs.
Moreover, by keeping these objectives in mind, HR specialists can see the reasons behind
many of the department's activities.
Recruitment and Selection
Selection Procedure
Recruitment is the process of searching for prospective employees and stimulating them
to apply for jobs in the organization.
Role of HRD in Recruitment Process
Human resource department of Lyallpur is responsible for designing the selection system
and managing its everyday operation. In Lyallpur Chemicals & Fertilizers (Pvt) Limited
human resource mangers in cooperation with other managers largely set the overall
strategy, they are likely to be influential in deciding, e.g., whether the department should
focus on choosing people who are best qualified for current vacancies of for those who
have the greatest long term potential. The personnel managers also decide how the
guidelines for equal employment opportunities met and whether the company needs
outside legal assistance in formulating its affirmative action plan.
Procedure of Joining the Company
On joining the Company the following formalities must be completed:
The documents listed below shall be forwarded immediately to Human Resource

Department for completion of their record.
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i) Duplicate copy of appointment letter duly signed by the employee in acceptance

of the terms and conditions embodied therein.
ii) Four copies of recent passport size photograph.
iii) Photocopies of all academic certificate especially metric certificate.
iv) Photocopies of testimonials from previous employers.
v) Fitness certificate.
vi) Photocopy of CNIC
vii) Clearance letter from previous employer.
Recruitment Process
In general the sources of recruitment can be classified into two types:
i). Internal Job Posting
Filling a job opening from within the firm has the advantages of stimulating preparation
for possible transfer, or promotion and increasing the general level of morale.
Self Nomination
Human Resource office publishes a monthly newsletter that list the Lyallpur's job posting
program to different routes to nomination for a job, self nomination and nomination by an
employee supervisor.
Positions available the announcements carry information about the nature of the position
and the qualification needed, and any employee whose interested bid on the job that is
enter the competition for it.
Nomination by Employees Supervisor
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Informal communications among managers lead to discourage that best candidates for a
job is already working in a different section of the firm.
Despite some minor problems, most employees were pleased that an internal job posting
program was established. Most successful nominees were happy with their new
assignments and unsuccessful nominees identified needed skills and gained a more
realistic idea of additional training or experience required for careers alternatives.
ii). External Job Posting
Lyallpur Chemicals & Fertilisers (Pvt) Limited also go to external sources for positions
whose specification can not beam by present personnel. Lyallpur uses following outside
sources:
1). Advertising
Advertisements are placed in various newspapers. More information about the company
and jobs specifications are included in the ad to present some self-screening.
2). Employment Agencies
Additional screening is affected through the utilization of private employment agencies.

The agency has specialized in various types of workers and job e.g. sales office,
execution or engineer.
3). Casual Applications
Unsolicited applications both at the gate and through the email constitute a much used
source of personnel.
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4). Leasing
To adjust short term function in personnel needs. The possibility of leasing by the hour or
day is considered. Lyallpur is not only obtains well trained and selective personnel but
avoids any obligation in pension, and other fringe benefits.
.
The Hiring Procedure
In the hiring procedure, Lyallpur is considering the following steps to discover significant
information about an applicant:
1. Call for application

2. Preliminary interview
3. Applications blank
4. Check of References
5. Psychological test
6. Employment interview
7. Approval by the supervisor
8. Physical examinations
9. Introduction or orientation
1). Call for Application
First of all, an ad is given in the newspaper for the vacancy.
2). Preliminary Interview
In this step, the more obvious facts and impressions are of the type generally obtained in
an initial interview. Appearance and facility in appear are quickly evaluated. Applicants
are often asked why they are applying for a job with Lyallpur. An idea of education and
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experience is obtained by asking for the last grade finished in school and the names of
jobs previously performed.
3). Application Blank
The application form is a sheet or small, booklet with blanks to be filled in by the
applicants. Its purpose is to supply organization with basic information about the
candidate's back ground: education work experience, previous salary, and so forth.
In Lyallpur factual information is to be obtained by means of an application blank.

Weighted application form is established and used with caution. It is used for two prime
objectives:
i). Lyallpur has established the selection of more stable employees to decrease labor
turnover. They have discovered and utilized the particular data that devote stability facts
relating to home ownership, marital status, age, sex etc.
ii). Lyallpur has also established job proficiency as the major objective and have
correlated biographical items with production records.
The application blank is continuously updated. The entire blank is restudied and
reweighted every 1 year at the minimum.
4). Check of References
The purposes of the reference check are to obtain information about past behavior of
applicants and to verify the accuracy of information given not he application blank.
Lyallpur uses combination of letters and telephone calls, as a method of checking.
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Reference includes only:
1) Dates of employment
2) Job title
3) Absentee record
4) Promotions and demotions
5) Compensation
6) Stated reason for termination.
5). Psychological Test
In Lyallpur, clericals jobs are subjected to the greatest amount of testing, applicants for
unskilled hourly jobs are tested least. The factors measured are usually of the
psychological type, such as ability to reason, capacity for learning, temperament and
specific aptitude.
Types of Psychological Tests:
Following types of tests are being used in Lyallpur to identify talents.
i). Intelligence test
These tests concentrate on a person's abilities with worlds numbers logical reasoning and
spatial relationships. This type of test is used for managerial posts.
ii). Mechanical Aptitude test
Lyallpur uses mechanical aptitude tests. Inventions are asked which fall into the general
area of understanding area of under standing mechanical relationships. Some questions
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relate to knowledge of tools and equipment. This type of test is suitable for technical
posts.
iii). Clerical Aptitude Test
This test deal with questions concerning office vocabulary, automatic, spelling and detail
checking. This type of test is used for clerical posts, such as computer operator.
iv). Interest Test
Lyallpur realizes that a person who is interested in a job or task will do much better than
one who is uninterested. The applicant is asked whether he likes, dislikes or is indifferent
to many examples of school subjects, occupations, amusement, and peculiarities of
people and particular of activities.
6). Employment Interview
Interviewing is probably the most widely used single method of selection. Lyallpur
shapes interviewer behavior is to establish a specific system for conducting the
employment interview.
Lyallpur considers following things to set up such a system:
1). To know what to look for in applicant focus only those knowledge, skills, abilities and
other characteristics (KSAOs) necessary for the job.
2). Develop interview questions that are strictly based on the job analysis results, use
"open-ended" questions and use questions relevant to the individual's ability to perform,
motivation to do a good job.
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3). Conduct the interview in a relaxed physical setting. Begin by putting the applicant at
ease with simple questions and general information about the organization and the
position being filled.
4). To evaluate applicants, develop a form containing a list of KSAOs weighted for
overall importance to the job.
7). Approval by the Supervisor
After the employment interview the immediate supervisor approves the candidates. The
candidate's recruitment is confirmed after probationary period.
8). Physical Examination
The physical examination step found in most business. Physical examination includes
matching of an applicant's physical capabilities to job requirements to a simple check of
general physical appearance and well being.
In having the physical examination procedure Lyallpur has at least three basic objectives
that are:
1). In first, it serves to ascertain the applicant physical capabilities e.g. can the applicant
work standing up.
2). The second objective of examination is to protect the company against unwarranted
claims under worker's compensation laws or against lawsuits for damages. If a record of a
new employee’s physical condition at the time of entry does not exit, a claim could
possibly be filed for injuries greater than were incurred after starting to work.
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3). Third objective of physical examination is to prevent communicable diseases from

entering the organization.
Training and Development
Orienting and Training Employees
In Lyallpur both human resource directors and other managers play critical role in the
development of orientation programs. Human resource managers have assumed
leadership in developing such programs.
Orientation of New Employees
After the selection of successful employees the first step in their introduction to company
policies, practices and benefits is an orientation program.
In 2007 an orientation programme was conducted by the management after taking over
NFC. The main objective of that programme was to get familiarize with the organization
culture of both old and new employees.
The Orientation program in Lyallpur is completed in three phases:
The first phase is usually conducted by the staff personnel unit. Subjects covered include
products of the company, employee benefits, salary schedules, safety, probationary
period, timed recording and absence, holidays equal employment opportunity programs,
packing and the grievance procedure.
The second phase of most organized induction program is performed by the immediate
supervisor. The inductee is introduced to fellow employees, given a tour of the
department, and informed about such details as locker and rest rooms, supply procedures,
hours of work overtime, call in procedures, rest and lunch periods, and lunching facilities.
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The complete in action program will provide for phase three follow up some week later.
The interview, conducted by either the supervisor or a personnel specialist is concerned
with:
1). Employee satisfaction with the job and organization.
2). Supervisor satisfaction with the employees.
Dissatisfactions may be cleared up by explanations or actual transfers to a different job.

In any event, the interest in the employee evidenced by the more act of having a follow-
up interview will help to increase the level of employee satisfaction.
After the employee has been received, selected and inducted, he or she must next be
developed to better fit the job and the organization. No one is a perfect fit at the time of
hiring, and some training and education must take place.
Lyallpur is a cultural organization in which importance has been given to training. The
management consider the training as an "Investment in their Asset". They believed that
planed development programs will returns values to the organization interims of
increased productivity, high reined morale, reduced costs and greater organizational
stability and flexibility to adapt to changing external requirements.
Lyallpur management is initially interested in training and educational programs in order

to promote employment and utilize the talents of its citizens.
Training Needs Assessments
In Lyallpur there are three level of analysis for determining the needs of training:
1). Organization analysis
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Focus on identifying where within the organization training is needed.
2). Operation analysis
Attempt to identify the content of training, what an employee must do to perform

competently.
3). Individual Analysis
Determines how well each employee is performing the task that make up his or her job.
At this level, training needs may be defined in terms of a simple equation.
Desired performance - Actual Performance = Training need
Operative Training
The development of operative calls for specific, increased in skills and knowledge to
perform a particular job. In Lyallpur there are primarily two basic methods in use:
1). On the Job Training
Since most jobs in Lyallpur can be learned in a relatively short period of time, this
method is most widely used. It has the advantage of strongly motivating the trainee to
learn since it is not located in the artificial situation of a classroom. The fact that the
success of the system depends almost entirely upon the immediate supervisor, the trainer,
means that the personnel unit has a major responsibility for making a good, effective
reaches out of every supervisor.
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Major types of on the job training implemented in Lyallpur is Apprenticeship

programme which include both class room instructions as well as on the job training.
This type of training is given to the new inductees and usually two years long.
2). Off the Job Training
There are three methods used in Lyallpur for Off the Job training:
i). Workers Training Program
During the first quarter of 2008, a worker's training program was organized by fertilizer
division of Allahdin Group. This was a part of on the job training. This program was
inaugurated by Manager Human Resource of Lyallpur. The main agenda of the program
was to explore the hidden talent of their worker and to make them cognizant of their own
potentials. Manager HR, the divisional head, and his team conducted the program in a
very interesting and entertaining manner with the help of IQ testing riddles and different
games. High degree of enthusiasm was observed among the participating workers.
ii). Special Courses
The second system of operating training classified some educational courses rather than
training.
iii). Selling and Technical skills training program
This is another strange experience for all participants after the budget and strategy
session. This program was hold day and night from 25-04-2008 to 27-04-2008 at BZU,
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Multan. The objective of the program was to convert their sales staff into technical sales
staff.
Evaluating Training Programs
Training must be evaluated by systematically documenting the outcome of the training in

terms of how trainees actually behave back on their job and the relevance of the trainees
behavior to the objectives of the organization.
To assess the utility or value of training, in Lyallpur management seek ensures to four
questions.
1. Did change occur?

2. Is the change due to training?
3. Is the change positively related to the achievement of organizational goals?
4. Will similar change occur with new participants in the same training programs?
In evaluating training programs, measures of change fall into four categories:
Reaction
How do participants feel about the training program?
Learning
To what extent have trainees learned what was taught?
Behavior
What on the job changes in behavior occur because of attendance at the training
program?
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Results
In what extent have cost related behaviour outcomes or quality improvement, turn over or
accident reduction (productivity) resulted from the training?
Management and Career Development
Management and employee development programmes are "those organization sponsored

programmes aimed at educating supervisory and supervisory employees above and
beyond the technical requirements of their job". Human relations, "decision making" and
the executive’s role" are examples of courses included in management development.
The HRD of Lyallpur is mainly responsible for providing information about what
seminars are available outside and also develop budgets and plans for sending managers
to outside seminars but the final decision of attending the seminar is to be made by
immediate supervision of the managers involved.
The commonly used training methods in ICI are:
1. Lecture / Discussion
2. Films / Videotapes
3. Case Study
4. Management Games
5. Behavior Modeling.
Evaluation of HRD Performance
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HRD of Lyallpur is working very well. Such as planning, managing people, resulting
people, its objectives and its mission, guiding principle are very good and helping in
overall organization.
Managers of HRD are expected to organize and to be accountable for the work of other
people. In this process, managers act as employers as such they create and sustain the
employment relationships of their organizations.
Salary Administration
Salaries of Sales Force
1). Fixed Salary
Fixed salary is given to helpers and apprentice salesmen/managers during their first six
months of training period.
2). Fixed Salary and Commission
All the salesman who have passed the test and the managers who have completed six
months training are paid according to this plan.
Employees Services
Bonus
After the completion of two years of service, salesmen and helpers are entitled to bonus
(if any) to be paid at the end of each year.
Provident Fund
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After completion of one year's service, a Manager will be entitled to become the member
of Provident Fund.
a). The Manager will deposit every month 6% of his actual pay to his PF.
b). After five years of continuous contribution by the manager, he will be entitled for
100% of company's contribution.
Annual Leaves
An employee after completion of one year of service will be entitled to the following
leaves:
a). Casual Leaves 10 days with pay
b). Sick Leaves 14 days with pay
c). Privilege Leaves 10 days with pay
Promotions
The manager on transfer from one station to another will be entitled to the following
allowances:
a). Actual transport fare for him and his family.
b). One day daily allowance for himself.
c). Average salary for the period in between handing over and taking over of the
charge.
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Demotions
An employee may be demoted on showing bad performance. Not only the low level
employees but the managers are also demoted if the required targets are not achieved in
repeated year.
Commission and Salaries
The administration department deals with the salaries, commissions and other fixed
benefits of the employees. In this way, Lyallpur has its own system of evaluating the
salary and commission for individual employees in the organization. The basic salaries of
the employees of Lyallpur is very low, however, a good package of salaries come into
existence after adding the house allowance, conveyance allowance and commission.
Schedule of salaries and commission is as under:
Personnel of grade "1" gets 2000/- Rs.(B.P)
The above employees get more in form of a percentage share in net profit. Salaries of
managers are also varies work wise ranging from 430/- Rs. to 3150/- Rs. They enjoy, too,
the commission ranging from .09% to 3% of the net profit.
System of Communication
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Formally defined a Company structure is the system of communication and authority that
links people and groups together to accomplish tasks that serve the organizational
purpose.
Structure can be described in the form of an organization chart. Lyallpur 's organizational
chart shows that it has functional structure.
Negotiating With Union
Labor Union do alter the work environment. The personnel department is deeply
involved with decisions that effect compensation, work hours and other terms and
conditions of employment to ensure uniformity of treatment. In Lyallpur one labor union
member is granted the status of collecting bargaining agent (CBA). Management wants
effective work performance through good relationship with CBA. The union is only for
rank and file workers.
Union management meetings are held every month. At the end of the year, Annual
meeting is held with the employees.
A reasonable agreement is reached which is workable for both the management and the
work force. Management always wants to provide a conducive and congenial work
environment for the work force.
SWOT Analysis of HR Department
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Strengths
• Qualified management
• Recruitment procedure
• Training methods
• Computer literacy programs
• Compensation and benefits packages
• Handsome salary package for professionals
Weakness
• Time consuming recruitment procedure

• Inter-department relations
• Union disputes
• Communication system
Opportunities
• Availability of professionals
• Agricultural specialists
Threats
• Labor disputes
• Political references
• Price competition
• Strong competitors
Conclusion
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Training process in Lyallpur leads to improved profitability, enhances job knowledge and
skills, helps employees to identify and understand organizational goals, improves labor
management relations and increases information by reducing communication gap at all
levels of the organization. Thus training in Lyallpur develops certain skills among the
employees, such as effective problem solving, handling stress, frustration and conflict,
improved communication skills and sense of growth and learning. These skills are
required because ICI has a diverse product range.
Suggestions
In the light of my research following recommendations are suggested.
• Lyallpur should have to launch employee awareness training programme through

off the job training. These programmes must clearly define company goals and
bring about awareness of corporate culture of Lyallpur amongst the less educated
employees.
• They should have to train their employees according to the macro-environment of

the country.
• It is also suggested that Lyallpur should have to hire professional trainers to

distinct their employees from their rivals.
Sales and Marketing

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Al-Hamd Chemicals (Pvt) Limited
Al-Hamd Chemicals (Pvt) Limited is subsidy of Allahdin Group of Companies and it is

holding and trading company of Lyallpur Chemicals & Fertilizers (Pvt) Limited. Its core
undertaking is to benefit the farmer‘s worth through prosperity & fruitful land. HFC
founded in late 2006. HFC is a leading manufacture & distributor of Single Super
Phosphate (SSP) and have a solid vision to get more share in SSP market as well as in
fertilizers sector of Pakistan.
Products
Super Kisan Single Super Phosphate (Powder & Granular) is the major product for
marketing. It contains;
• P2O5 18%
• Gypsum 46%
• K2O, Magnesium & Zinc
Agronomic Aspects of SSP
Why SSP is better than DAP for Pakistani Soil?
• Nutrients Contents & Low PH

• SSP Being Highly Acidic in Nature (PH-2)
• Due to Availability of Gypsum (46 %)
• Combination of SSP & Urea, SSP & CAN
• SSP for the Reclamation of Saline, Alkali Soils
• It Softens the Soil
• SSP Changes the Orchard Soil Alkalinity
SSP is more beneficial for all crops, especially for root crops like:
• Potato
• Sugar beet
• Sweet Potato
• Carrot
• Turnips
• Radish
• Onion & Garlic
Situational Analysis
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Market Summary
Fertilizer is one of the key inputs to agricultural production. Balanced usage of fertilizer
helps in increasing crop yield from 30 to 60 percent in different regions of the country.
Almost the entire available soil in the country is nutrient deficient. To overcome the
problem of nutrient deficiency, use of fertilizer has become vital for achieving the
agricultural production. However, the main impediment in exploring the full potential of
the soil has remained below par due to imbalances in fertilizer usage specially, in terms
of over application of nitrogenous fertilizer compared to phosphatic fertilizer.
Realizing the importance of balanced nutrition, the prices of 50 Kg bag of these fertilizers
were reduced by Rs 250 for encouraging a more balanced use of key fertilizers
(nitrogenious, phosphatic, potassic fertilizers) in 2006. Following the steep increases in
international prices of phosphatic and potassic fertilizers, the Government in July 2007,
further increased the relief in price from Rs 400 to Rs 470 per bag.
The domestic production of fertilizers during the year 2007-08 remains near to 6.24
million Metric Tons. Provisional figures shows that total nutrients off take during fiscal
year 2007-08 was 3,577 thousands tons depicting a decrease of 2.6 % over year 2006-07.
Nitrogen offtake increased by 10.4 %, whereas phosphate and potash decreased by 36.0
& 38.10 per cent respectively. The high prices of phosphatic and potassic fertilizers
altered the ratio in favor of nitrogen which negatively effective our crop productivity.
Increased international prices of phosphatic and potash fertilizers overshadowed the
subsidy effect and eventually off take could not increase and remained at almost last
year’s level.
Seasonal Variation
Rabi: October-November
Kharif: April-May
There are two seasons of crops in Pakistan Rabi & Kharif. Rabi refers to the crops for
which seeds are sown in October-November and harvested in April-May, whereas, kharif
seeds are sown in April-May and harvested in October-November. Urea is needed in the
middle of these crops, therefore, in the months that fall between sowing and harvesting
urea off take increases. Phosphate fertilizers are mainly used at the time of sowing the
seeds.
As for as the production of fertilizer in kharif & Rabi is concerned it is more or less
independent. However, in terms of consumption Rabi needs a lot of fertilizer as major
crops of Pakistan (Wheat and Sugarcane) grow in Rabi season and weather conditions are
more suitable to use fertilizer due to minimum rainfall. In the Kharif season only cotton is
grown and that does not require much fertilizer as compared to other crops.
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65
Market Potential
World demand for phosphate fertilizers in 2007 grew by 3.8%, pressuring the industry to
operate at high rates during the whole year. Production of raw materials, intermediates
and processed phosphate fertilizers rose to near record levels, while input costs continued
to expand, notably in the case of sulphur and ammonia.
World production of phosphate rock rose by 2.7% to 172.1 Metric Tons, of which China
contributed one-third. Global trade of phosphate rock increased by 6% over 2006, after
registering two years of decline; strong deliveries were reported into Europe, North
America and Latin America.
World phosphoric acid capacity in 2007 decreased to 43.2 Mt, but would rebound to 45
Metric Tons P2O5 in 2008 with new projects in China and Morocco.
In 2008, growth in demand would match that in supply, keeping the current balance tight.
World production of processed phosphates (MAP, DAP, SSP and TSP) grew by 5% over
2006, to 25.2 Mt P2O5. The global trade of MAP and DAP in 2007 rose moderately to 8.4
Mt P2O5. A decrease in DAP volumes was more than offset by an increase in MAP
exports.
In Pakistan, off take of phosphatic fertilizers decreased by 36.0% in 2007-08. Provisional

figures indicate that total nutrient off take during year 2007-08 was 3,577 thousands tons
showing a decrease 2.6 per cent. Nitrogen off take was 2,923 thousands tons against
2,649 tons of year 2006-07 with increase of 10.40 %. Contrary to this phosphate and
potash off take decreased by 36.0% & 38.10% respectively as compared to previous year.
In product terms, urea off take increased by 19.30% while of DAP decreased by 34.10%.
The decrease in overall nutrient off take was mainly due to decrease in phosphate &
potash off take.
(‘000 Tons)
Nutrient
Total
Season Nitrogen Phosphate Potash Nutrient
2006-07 2,649 979 43 3,671

2007-08 2,923 627 27 3,577
Marketing Strategy
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66
Al-Hamd Chemicals (Pvt) Limited, objective is to provide the quality fertilizer. We exist
to attract and maintain customers. When we adhere to this maximum, everything else will
fall into place. Our services will exceed the expectations of our customers.
Marketing Objectives
• Experience an increase in new customers who are turned into long-term

customers.
• Maintain positive, steady growth each month in market development.
• Generate brand equity at the Farmer's Market as well as within the
commercial traders market.
Financial Objectives
• Reduce the distribution cost by selling the product within 150 Km radius.
• To create GOODWILL of the Company.
Target Market
Their target market is the farmer, who has harvesting area in province Punjab. This thing
does not matter that how much he/she has.
Positioning
Al-Hamd Chemicals (Pvt) Ltd., will position itself as:
• Reliable Business Partners

• Quality Manufacturer
• True Professionals
Marketing Mix
HFC’s marketing mix is comprised of the following approaches to product, place,
promotion, and price:
Product
Super Kisan Single Super Phosphate (Powder & Granular), is packed in 50 Kg bag which
has printed in two colors.
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Place
Consumers are able to purchase Super Kissan Single Super Phosphate from available
company’s authorized fertilizer dealers. If customer wants to buy product direct from the
company than its essential to purchase minimum two hundred bags in one transaction.
Promotion
The main objective of the promotion is to flow of information to farmer. The challenge
here is to communicate how our product adds value to farmer’s expected yield. Word of
mouth has a critical position in this target market. A mixture of print media advertisement
and outdoors will be used to increase the visibility of our product.
Price
Price of SSP (P&G) is linked with international market because major raw material is
imported from off shore. Pricing of SSP (P&G) is charged for 50 Kg bag on delivered
basis. Costumer may purchase two hundred or more than two hundred bags in one
transaction. Trade discounts would be available for dealers or retailers with reference to
market situation.
Sales Forecast
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Sale During 2007-08
Sale of SSP (P&G) during last financial year 2007-08 was 1,448,772 bags or 72,439
Tons. They got an advance booking of 68705 Tons during last financial year. In 2007-08
they have supplied 3734 Tons pending product of 2006 and at the end of this year they
have clutched forward 5,000 Tons to 2008-09.
Month wise Sale During 2007-08
250000
Product Quantity (Bags)
200000
150000
100000
50000
0
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08
Months
District Wise Sale

Product Quantity (Bags)
300000
250000
200000
150000
100000
50000
0
Ka g
M an
ha a n
Jh r
ri
fiz la
an r
Ha ad
La re
Na na
hi k P ra
Sh g o l
kh a
La b
Na ltan
us l
d i Lo d h
Ve h
S ra
T. ot
uj ad
wa
w ar
is u r
rK n
Kh wa
M in
Sa an
Kh su
Sa iwa
an
ha
a
ei dh
ha
ng
rip
Ha wa
ho
Ra Pa k a
Ya ta
T. ialk
d
u
ab
d
Ba hr
F a al P
ha ag
a
yy
G l ab
h
ro
ar
ud
up
e
nk
u
m at
Si
O
n
Ba l N
a
ra
r
a
w
ha
Ba
an
M
District
Sale During 2008-09
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69
During financial year 2008-09 company have to receive 90,000 Tons SSP from
production side, Out of this 90000 we have to make supplies of 5000 Tons from previous
year pending orders and remaining 85000 Tons will be available to market this year.
Company should have to generate 108,000 Tons booking through out the year. After
supplies we should have pending of 23,000 Tons. By the end of the year 2008-09 we plan
to develop our market in upper Punjab. In this regard we have hired 5 Marketing
Officers. To manage the the activities of MOs company have divided the sales areas into
5 territories. Detail of new sales territories is given bellow:
Territory 1 Territory 4
Faisalabad T.T.Singh Hafizabad Gujranwala

Jaranwala Gojra Jala Pur Bhtyan Gujrat
Sammundri Pir Mahal Sukheki Sialkot
Momo Kanjan Kamaliya Khanka Dogra Narowal
Khurdyanwala Mandi Bhu Din
Territory 2
Territory 5
Sahiwal Pak Pattan
Chichawatni Arifwala Lahore Sheikhupura
Harrapa Malka Hanss Raiwand Dhamke
Okara Kasur Nanka Sb. Muridke
Renala Khurd Pattoki Sangla Hill
Depalpur Chunia Shah Kot
Hujra Shah Khudian
Muqeem Khass
Territory 3
Sargodha Jhang
Sahiwal Chinoot
Bhalwal Shorkot
Khushab
Sales Target
2007.9 2008-09
Sales 72,439 Tons 90,000 Tons

Advance Booking 68,705 Tons 108,000 Tons
Thousand Tons (000)

Territories Last Year Sales Projected Sales Per Month
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70
Open 22.0 6.0 500.0

Faisalabad 15.0 24.0 2000.0
Okara 18.0 26.0 2166.7
Sargodha 5.0 16.0 1333.3
Gujranwala 8.0 22.0 1833.3
Lahore 5.0 14.0 1166.7
Sales During 2007-08
7%
11%
29% Open
7% Faisalabad
Okara
Sargodha
Gujranwala
Lahore
25% 21%
Projected Sales During 2008-09
13% 6%
22% Open
20% Faisalabad
Okara
Sargodha
Gujranwala
Lahore
15% 24%
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Last Year VS Projected Sales
30.0
25.0
Tons (000)
20.0
Last Year
15.0
Current Year
10.0
5.0
0.0
Open Faisalabad Okara Sargodha Gujranwala Lahore
Territories
Sales Incentive
For the motivation purpose of sales & marketing team, a special prize of Rs. 100,000/-
(One Hundred Thousand Only) is allocated for the winner at the end of the financial year.
That winner will be selected by the committee on following grounds:
• Continuous Target Achievement (Consecutive 8 Months) 55%

• Liaison with Head Office 10%
• Expense Management (Vehicle, Entertainment, Fright/Bag etc.) 15%
• Personal Management (Personality & Vehicle) 10%
• Market Penetration (Dealers Network, Active Dealers, Market 10%
Vision, Competitor Activity Reports)
Sales & Marketing Budget
Total sales & marketing cost of 2007-08 was Rs. 29.74 million. Now it should be
increased by 35% because transportation cost has increased as compare to last year & it is
major proportion of our sales cost. This year company will try to sell product within
defined territory radius. Proposed budget to meet the sales & marketing expenses is Rs.
40.00 million minimum.
2007.8 2008-09
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72
Distribution 21.50 M 28.80 M

Marketing & Others 8.20 M 11.20 M
Total 29.70 M 40.00 M
Controls
The purpose of Single Super Phosphate’s marketing plan is to serve as a guide for the
organization. The following areas will be monitored to gauge performance:
• Customer Satisfaction
• Revenues
• Product Performance
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73
SWOT Analysis
Opportunities
• Market Penetration (Capture more market share in terms of number of

Customers)
• Supply chain management (Low cast distribution)
• Customer support system
• Dealers Technical Trainings to market our product
Threats
• Less number of dealers / high number of investors

• High price
• Carriage contractor
• Product quality
• Competitor brand image
• Political factor
Strengths
• Goodwill of parent group

• Financial background of group
• Repute of manufacturer (LC&FL)
• Technocrats
• Flexibility in meeting market needs
Weaknesses
• Marketing & Sales Budget

• Marketing & Sales team
• Distribution Channels
• Product line
• Training & Development of Employees
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Financial Statement Analysis (Accounting Ratios)
Financial statements are prepared primarily for decision making. Financial Statements
play a dominant role in setting the frame work of managerial decisions but information
provided in the financial statements is not analysis and in it self as no meaning full
conclusions can be drawn from these statements alone. However, the information
provided in the financial statements is of the immense use in making decisions through
analysis and interpretation of financial statements. Financial statement analysis is the
process of identifying of financial strength and the weakness of the firm by properly
establishing a relation ship between the items of the balance sheet and the profit and
loss account. There are various methods used in analyzing financial statements such as
comparative statements, schedules of changes in working capital, common size
percentages, funds analysis and the ratio analysis. The ratio analysis is the most powerful
tool of financial analysis.
Meaning and Nature of Accounting Ratios:
Ratio simply means one number expressed in terms of another. A ratio is the statistical
yard stick by means of which relationship between two or various figures can be
compared and measured. The term “Accounting Ratio” is used to describe significant
relationship between figures shown on a balance sheet and profit and loss account of a
company. Thus accounting ratios show the relationship between accounting data. It may
be expressed in the form of percentage, coefficient, proportion and rate.
Who is Interested in Financial Analysis of Company?
Ratio analysis of a firm’s financial statements is of interest to share holders, creditors and
the firm’s own management. Both current and prospective share holders are interested in
the firm’s current and future level of risk and return, which directly affect the share price.
The firm’s creditors are interested in the short term liquidity of the company and its
ability to make interest and principal payments. A secondary concern of creditors is the
firm’s profitability: they want assurance that the business is healthy. Management like
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75
stake holders is concerned with all aspects of the firm’s financial situation, and its
attempts to produce financial ratios that will be considered favorable by both owners and
creditors. In addition management uses ratios to monitor the firm’s performance from
period to period.
Advantages of Ratio Analysis
Ratio analysis is very important and age old technique of financial analysis. The
followings are some of the advantages of ratio analysis:
Simplifies Financial Statements
It simplifies the comprehension of financial statements. Ratio tells the whole story of
changes in the financial condition of the business.
Facilitates Inter Firm Comparison
It provides data for inter firm comparison. Ratio highlights the factors associated with the
successful and unsuccessful firm. They also reveal strong firms and weak firms,
overvalued and under valued firms.
Helps in Planning
It helps in planning and forecasting. Ratios assist management in its basic function of
forecasting, learning, coordination, control and communication.
Helps in Investment Decisions
It helps in investment decisions in the case of investors and the landing decisions in the
case bankers and other financial institution.
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Types of ratio Comparison
Ratio analysis is not merely the calculation of a given ratio. More important is the
interpretation of the ratio value. Two types of ratio comparison can be made.
1. Time Series Analysis
2. Cross Sectional Analysis
1. Time Series Analysis
This analysis is concerned with the evaluation of the firm’s financial performance over
time using financial ratio analysis. Comparison of current to past performance, using
ratios, enables analyst to asses the firm’s progress.
2. Cross Sectional Analysis
Cross sectional analysis involves the comparison of the firm’s financial ratios at the same
point in time and involves comparing the firm’s ratios to those of other firms in its
industry or to industry averages. Analysts are often interested in how well a firm has
performed in relation to other firms in its industry. Frequently a firm will compare its
ratios values to those of key competitor or group of competitors that it wishes to emulate.
This type of cross sectional analysis called bench marking has become popular.
Classification of Accounting Ratios:
Followings are the main ratios which are commonly used by the financial analysts,
management of the company, investors, lenders, creditors and other stake holders. There
detail definitions and explanations are given in next pages:
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1. Liquidity Ratios
• Current Ratio
• Acid Test Ratio
2. Profitability Ratios
• Gross Profit Ratio
• Net Profit Ratio With Respect to Sales
• Operating Profit Ratio
• Cost of Sales to Sales Ratio
• Return on Equity Capital

• Return on Share Holder’s Fund
• Return on Capital Employed
• Earring Yield Ratio With Respect to Investment
• Dividend Yield Ratio
• Price Earning Ratio
• Dividend Cover Ratio
3. Activity Ratios
• Stock Turn over Ratio
• Debtors Turn Over Ratio
• Creditors Turn Over Ratio
4. Long Term solvency in Leverage Ratios

• Debt to Equity Ratio
• Debt Service / Interest Coverage Ratio
• Capital Gearing Ratio
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Financial Statements
Lyallpur Chemicals & Fertilizers (Pvt) Limited

BALANCE SHEET
For The Year Ended On 30 June, 2008
PARTICULARS June,2008 June,2007

Rupees Rupees
Paid-up Share Capital 10,000,000 10,000,000
Reserves 155,447,497 38,525,609
Surplus On Revaluation Of Property Plant & 337,672,834 343,655,202
Equipment
Current Liabilities
Creditors, Accrued And Other Liabilities 547,522,761 8,7549,325
Short Term Finance-Secured 134,012,772 118,294,058
Taxation 2,612,217 1,279,492
Total Equity & Liabilities 1,187,268,081 599,303,686
Non Current Assets
Property, Plant & Equipment 352,223,188 351,734,414
Capital Work In Progress 4,659,465 7,086,267
Long Term Loans & Deposits 1,051,905 691,405
Current Assets
Stores, Spares & Loose Tools 16,630,640 11,434,852
Stock In Trade 277,277,657 65,993,265
Trade Debtors 6,967,299 2,119,946
Loans & Advances 9,872,607 39,600,888
Trade Deposits & Prepayments 354,905,368 6,845,855
Other Receivables 162,421,973 108,701,145
Cash And Bank Balances 1,257,979 5,095,649
Total Assets 1,187,333,523 599,303,686
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79
Lyallpur Chemicals & Fertilizers (Pvt) Limited

PROFIT AND LOSS ACCOUNT
For The Year Ended On 30 June, 2008
PARTICULARS June, 2008 June, 2007

(Rupees) (Rupees)
Sales 520,606,760 275,228,803
Add: Subsidy From Government 324,819,020 165,362,900
Net Sales 845,425,780 440,591,703
Less: Cost of Sales (651,025,539) (370,149,436)
Gross Profit 194,400,241 70,442,267
Administration And General Expenses (56,062,456) (41,012,142)
Other Operating Income 2,790,639 4,355,512
Operating Profit 141,128,424 33,785,637
Financial And Other Charges (27,576,687) (16,053,692)
Profit For The Year Before Taxation 113,551,737 17,731,945
Taxation (2,612,217) (3,814,026)
Profit For The Year After Taxation 110,939,520 13,917,919
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ANALYSIS OF ACCOUNTING RATIOS
Now I will analyze some important factors like liquidity, profitability, long term solvency
and activities of firm with the help of ratios which are usually brought under observation
by the creditors, investors, management and other stake holders.
Ratio Analysis
Ratios 2008 2007

Liquidity Ratios
Current Ratio ( In : ) 1.16 1.21

Acid Test Ratio ( In : ) 0.65 0.79
Profitability Ratios
Gross Profit Ratio ( In % ) 15.99 22.99
Net Profit Ratio ( In % ) 3.16 13.12
Operating Profit Ratio ( In % ) 7.67 16.69
Cost of goods sold to sale Ratio ( In % ) 84.01 77.01
Return on Equity Capital ( In % ) 138.18 1109.40
Return on Share Holder’s Fund ( In % ) 28.68 67.05
Return on Capital Employed ( In % ) 69.62 85.30
Earning per Share ( In Rupees Per Share ) 13.91 110.93
Activity Ratios
Stock Turnover Ratio ( In Times ) 2.16 3.79
Stock Turnover Ratio ( In Days ) 169 96
Solvency Ratios
Debt-Equity Ratio ( In Ratio ) 4.27 4.13

Debt Service or Interest Coverage Ratio ( In Times ) 1.20 4.14
Analysis for Liquidity
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This analysis is also called analysis for short term solvency of short term financial
position. Liquidity simply means how quickly a company can convert its current
assets into cash to pay off its current obligations in time or when they will become
due. The short term creditors of a company like supplier of goods on credit and
commercial banks providing short term loans are primarily interested in knowing the
company’s ability to meet its current or short term obligations as and when these become
due. The short term obligations of a firm can be met only when there are sufficient liquid
assets. Therefore, a firm must insure that it does not suffer from lake of liquidity on the
capacity to pay its current obligations. If a firm fails to meet such current obligations due
to lack of good liquidity position its good will in the market is likely to be affected
beyond the repair. It will result in a loss of creditors’ confidence in the firm. Even a very
high liquidity is not good for a firm because such a situation represents unnecessarily
excessive funds of the firm being tied up in current assets.
Liquidity Ratios
These are the most important ratios from the lender’s point of view. These are the ratios
which measure the short term solvency or financial position of firm. These ratios are
calculated to comment upon the short-term paying capacity of a concern or a firm’s
ability to meet its current obligations.
The various liquidity ratios are current ratio, liquid ratio and absolute liquid ratio. Their
calculations and analysis is given below:
Current Ratio
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Current ratio measures general liquidity and is widely used to make the analysis for a
short term financial position or liquidity of a firm. Current ratio is basically a relationship
between current assets and current liabilities. This ratio is also known as working capital
ratio.
Significance
Current ratio is a general and quick measure of liquidity of a firm. It represents the
margin of safety to creditors. It is an index of the firm’s financial stability. It is also an
index of technical solvency and an index of the strength of working capital.
A relatively high current ratio is an indication that the firm is liquid and has the ability to
pay its current obligations in time as and when they become due. On the other hand, a
relatively low current ratio represents that the liquidity of the company is not good and
firm shall not be able to pay its current liabilities. Generally current ratio = 1:1 is
considered reliable by the banks which means 1 rupee asset 1 rupee liability.
Current Assets
Current Ratio = Current Liabilitie s
June 30th 2007 June 30th 2008

=239,791,000 / 207,122,875 =829,333,523 / 684,147,750
= 1.16 : 1 = 1.21 : 1
Interpretation
The current ratio of Lyallpur Chemicals & Fertilizers up to 30th June 2007 shows that it
has the ability to meet all its obligations in respect of financial debts. But the ratio up to
30th June 2008 is the indication that the company has been in good liquid position since
last twelve months as compared to previous financial year. It is an attractive sign for the
creditors to keep full confidence in the operations and policies of the Lyallpur. The
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83
company can easily avail short term borrowing facility from banks and other financial
institutions with more reliably than the previous year as its current position is better than
the previous year.
Liquid Ratio (Acid Test Ratio)
This ratio shows better liquidity than the current ratio as it is a relationship between
liquid assets and current liabilities. Liquid assets include all current assets except
prepayments and stock because prepayments usually are not converted into cash and
stock takes much time to be converted into cash.
Significance
The quick ratio is very useful in measuring the liquidity of the firm. It measures the
firm’s capacity to pay off current obligations immediately and is a more rigorous test of
liquidity then the current ratio. Usually a high liquid ratio is an indication that the firm is
liquid and has ability to meet its current liabilities in time and on other hand a low
liquidity ratio represents that the firm’s liquidity position is not good. Generally liquid
ratio = 0.75:1 is considered reliable by the banks that means Rs. 0.75 liquid asset for Rs.
1 current liability.
Liquid Assets
Acid Test Ratio = Current Liabilitie s
Liquid Assets = Current Assets - (Stock + Prepayments)
June 30th 2007
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84
Liquid Assets = 239,791,600 – (65,993,265 + 39,600,888)

= 134,197,447
Acid Test Ratio = 134,197,447 / 207,122,875
= 0.65 : 1
June 30th 2008

Liquid Assets = 829,333,523 – (277,277,657 + 9,872,607)
= 542,183,259
Acid Test Ratio = 542,183,259 / 684,147,750
= 0.79 : 1
Interpretation
The liquid ratio of Lyallpur Chemicals & Fertilizers is showing its weak liquidity
position and its liquid ratio is lower than the requirement in financial year 2007 that is
usually observed by the banks and other financial institutions but it is showing little
positive trend in financial year 2008. The stake holders especially creditors cannot
strongly rely on the company because Lyallpur Chemicals & Fertilizers has lesser liquid
assets to pay the short term liabilities in time or when they will become due. The liquidity
of the enterprise has been increased from the last year which is indication of the better
business operations and policies.
Analysis of Profitability: (profitability Ratios)
Profit earning is considered essential for the survival of the business and it is primary
motive of any business. A business needs profit not only for its existence but also for
expansion and diversification. The investors want adequate return on their investments,
creditors want higher security for their interest and loan and so on. A business can
discharge its obligations to the various segments of the society only thorough earning
profits. Profit is a useful measure of overall efficiency of a business. Profitability ratios
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85
are measured by the investors and share holders to asses the management in order to
assess how efficiently the business operations are being carried out. Profitability is the
main base for liquidity as well solvency. Creditors, bankers and financial institutions are
interested in profitability ratios since they indicate liquidity of the business to meet
interest obligations and regular improved profits to enhance the long term solvency of the
business. Owners are interested in profitability to indicate the growth and also the rate of
return on their investments. Generally profitability ratios are calculated with respect to
sales and with respect to investments.
Following ratios are calculated with respect to sales:
Gross Profit Ratio (Gross Profit Margin)
Gross Profit ratio is a ratio of Gross Profit to Net Sales expressed as percentage. It
expresses the relation ship directly between gross profit and sales and indirectly between
cost of goods sold and sales.
Significance
Gross profit ratio may indicate to what extend the selling prices of goods per unit may be
reduced with incurring losses on operation. It reflects the efficiency with which a firm
produces its products. As the gross profit is form by deducting cost of goods sold from
net sales, higher the gross profit ratio better it is. There is no standard GP ratio for
evaluation. It may vary from business to business. However the gross profit earned
should be sufficient to recover all operating expenses and to build up reserves after
paying all fixed interest charges and dividends.
Gross Pr ofit
G.P Ratio= Net Sales ×100
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86
= (70,442,267 / 440,591,703)*100 = (194,440,241 / 845,425,780)*100

= 15.99% = 22.99%
Interpretation
The gross profit percentage of Lyallpur Chemicals & Fertilizers (Pvt) Limited has been
increased from 15.99% to 22.99%. The major reason of this increase are, increase in sales
and subsidy from government. This is a positive sign for the company and this indicates
Lyallpur is expending its business. There is less proportionally increase in cost of sale as
compare to sale. This indicates organization is adopting better purchase and other
policies.
Net Profit Ratio
This is the ratio of net profit (before tax) to net sales expresses as percentage:
Significance
This used to measure the overall profitability and hence it is very useful to proprietors.
This ratio is very useful as if the net profit is not sufficient the firm should not be able to
achieve a satisfactory return on its investment. This ratio also indicates the firm’s
capacity to face adverse economic conditions such as price competition low demand etc.
obviously, higher the ratio the better is the profitability.
Net Pr ofit aftere Taxation

Net Profit Ratio = ×100
Net Sales

= (13,917,919 / 440,591,703)*100 = (110,939,520 / 845,425,780)*100
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= 3.16% = 13.12%
Interpretation
Net profit ratio of the company is increasing from 3.16% to 13.12%. One reason of this
increase in NP ratio is the expenses like deprecation, repairs and maintenance and
administrative expenses are not proportionately increasing as sale. There is not any
pressure on the profit margin of the company, so the company is growing rapidly.
Operating Profit Ratio
Operating profit ratio is a relationship between operating profit and net sales. It measures
the cost of operations per rupee of sales.
Significance
This ratio shows the operational efficiency of the business. Some of the revenues and
expenses of a business is result from activities other then the company’s basic business
operations. This ratio shows a relationship between revenue earned from customers and
expenses incurred in producing this revenue. In effect operating profit ratio measures the
profitability of a company’s basic or core business operations and leaves out other types
of revenues and expenses are excluded.
EBIT
Operating Profit Ratio = Net Sales ×100

=(33,785,637 / 440,591,703)*100 =(141,128,424 / 845,425,780)*100
= 7.67% = 16.69%
Interpretation
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It has been observed that profit margins of Lyallpur Chemicals & Fertilizers (Pvt)
Limited are increasing as we compare them with the previous years. An operating profit
ratio equal to 7.67% to 16.69% is considered very good and this indicates company is
raising its profitability to maintain the confidence of the stake holders through better
business operations and policies. The core reasons of this increase are increase in sale but
less proportionate increase in distribution and administrative expenses.
Cost of goods sold to sales
This ratio can be defined as a relationship between cost of sales and sales. It is measured
in percentage.
Significance
The profits of any company can be increased only through deduction in cost or with
increase in sales or a mix of above two. This ratio is important to analyze the cost of sales
with respect to sales. It measures the percentage of cost to sales. Higher the ratio is an
indication of an increase in cost of the enterprise’s production and direct cost and vice
versa. It can be helpful for the management to make better purchasing, production and
other direct cost decisions as it related directly sales to the cost of sales.
Cost of Good Sold

Cost of Goods sold to sales = ×100
Sales

=(370,149,436 / 440,591,703)*100 =(651,025,539 / 845,425,780)*100
= 84.01% = 77.01%
Interpretation
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89
The cost of sales of Lyallpur Chemicals & Fertilizers (Pvt) Limited in 2008 has been
decreased which increased the GP margin of the company. This shows Lyallpur is cost
efficient and this attracts the investors. As the company is running already at low cost so
the major reason of this decrease in cost is increase the sales of its products and
proportionally less increase in costs.
Profitability Ratios with respect to Investment
Following ratios are important to find out the profitability of a company with respect to
investment. As investors demand adequate returns to their investments so with the help of
these ratios they can realize and analyze about the security and returns of their
investments.
Return on Equity Capital
In real sense ordinary shareholder are the real owners of the company and they assume
highest risk in the company. Preference share holders have a preference over ordinary
shareholders in the payment of dividend as well as capital. Preference share holders get a
fixed rate of dividend irrespective of the quantum of the company. The rate of dividend
varies with the availability of profits in case of ordinary shares only. The ordinary share
holders are more interested in the profitability of a company and its performance should
be judged on the bases of return of equity capital of the company.
Significance
This ratio is more meaning full to equity share holders who are interested to know profits
earned by the company and those profits which can be ,made available to pay dividend to
them. This ratio directly relates the net profit available for appropriations to the capital
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90
invested by the share holders. Higher the ratio is higher the return on capital invested in
company.
Net Pr ofit After Tax −Pr eference Dividend
Return on Equity= ×100
Equilty Share Capital

=(13,917,919 – Nil / 10,000,000)*100 =(110,939,520 – Nil / 10,000,000)*100
= 138.18% = 1109.40%
Interpretation
The return on equity capital ratio of Lyallpur Chemicals & Fertilizers (Pvt) Limited is a
clear cut indication for the investors that the company is managing its capital in a very
efficient way and is earring Rs 1109 for each Rs 100 of its capital and company is in
position to give better returns to the share holders. The major reason of this huge increase
in return on equity is increase in net profit after tax while the equity share capital is same
in both the financial year. This is also analysis indication that the operations of the
business are carried on in analysis appropriate manners.
Return on Share Holder’s Fund
It is a relationship between net profit (After interest and Tax) and shareholder fund
expressed in percentage.
Significance
This is one of the most important ratios used to measure the overall efficiency of the firm.
As the primary objective of business is to maximize its earning. This ratio indicated the
extent to which this primary objective of business is being achieved. It is calculated for
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91
net profit after interest and tax because share holders are interested in the profit which is
available for them in respect of dividends. This is better measure then the return on equity
capital because it includes not only capital but also the reserves which are maintained for
several financial purposes. Inter firm caparison of this ratio determines whether the
investment in the firm is attractive or not as investors would like to invest only where the
return is higher.
Net Pr ofit After Tax

Returns on share holder fund = Share Holder Fund ×100
Share Holder Fund = Capital +Reserves

=(13,917,919 / 48,525,609)*100 =(110,939,520 / 165,447,497)*100
= 28.68% = 67.05%
Interpretation
There is increase in the return from the last year and it is an indication that the operations
of business are good and management efficiently employs the share holder’s fund in
generating the revenues. The major reason of this increase in return on share holder fund
is more proportionate increase in net profit after tax as compare to sale. It is also a better
sign for the stock holders that there investments are being utilized to give them better
returns.
Return on Capital Employed
It is relationship between operating profit and capital employed of the company. There
are various methods to calculate the capital employed.
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92
Significance
The return on capital employed is the most important ratio because it answers how well
the management has utilized the share holder’s fund and the borrowings which were
taken from the creditors. Higher the ratio shows that the management utilized these funds
efficiently to earn operating profit. This ratio is calculated with EBIT because investors
are interested to know that how the management has utilized the funds and long term
borrowings because a business borrows to conduct its operations and to enhance
profitability.
EBIT
Return on capital Employed = Capital ×100
Employed
Capital Employed = long term liabilities + share Holder’s Fund

=(33,785,637 / 48,525,609)*100 =(141,128,424 / 165,447,497)*100
= 69.62% = 85.30%
Interpretation
As there is remarkable increase in the ratio which is an indication that the management is
using efficiently funds provided by the creditors and shareholders and the reserves of
previous profits kept for the financial purposes. There is a suitable return to the capital
employed that is 85.30 % which means funds of Rs. 100 are generating profit of Rs.
85.30. This is good sign for the stake holders especially for the investors which are
interested in the return of the capital employed.
Earning per Share
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93
Earning per share is a small variation of return on equity capital and it is calculated by net
profit after tax and preference dividend dived by the total number of equity shares. It
determines the per share earning in rupees.
Significance
High earning per share usually reflects the rate of profitability, performance and
dividends and when compare with EPS of similar other companies, it gives a view of
comparative earnings or earning power of firm. However high EPS is not an authentic
and scientific tool to assume high performance but high EPS is considered high rate of
dividends.
Earning After Tax − Pr eference Share Dividend
Earning Per Share = No .Of Ordinary Shares
In the Lyallpur Chemicals & Fertilizers (Pvt) Limited there is no prefers share holder so
the formula will be
Earning After Tax
= No .Of Ordinary Shares

=13,917,919 / 1,000,000 =110,939,520
= Rs. 13.91/Share = Rs. 110.93/Share
Interpretation
Earning per share of Lyallpur Chemicals & Fertilizers (Pvt) Limited. is relative increased
from the previous years and is satisfactory for the share holders with respect to their
INTERNSHIP REPORT
94
return on the shares purchased by them. As this ratio describes the rate of dividend so it
can be assumed company is distributing high dividends.
Analysis of Current Assets Movement (Activity Ratios)
Activity ratios measure the efficiency or effectiveness with which a firm manages its
resources or assets. These ratios are also called turnover ratios because they indicate the
speed with which assets are converted or turned over into sales.
Stock Turnover Ratio
Every firm has to maintain a certain level of inventory of finished goods so as to be able
to meet the requirements of the business. But the level of inventory should neither be too
high nor too low. A too high inventory means higher carrying costs and higher risk of
stocks becoming obsolete whereas too low inventory may mean the loss of business
opportunities. Thus, it is very essential to keep sufficient stocks in business.
Inventory turnover ratio, also known as stock turnover, is the relationship between the
cost of goods sold during a particular period of time and the cost of average inventory
during that period. It is expressed in number of times.
Significance
Inventory turnover ratio measures the velocity of conversion of stock into sales. Usually,
a high inventory turnover/stock velocity indicates efficient management is required to
finance the inventory. A low inventory turnover ratio indicates an inefficient management
of inventory. A low inventory turnover implies over-investment in inventories, dull
business, poor quality of goods, stock accumulations, accumulation of obsolete and slow
moving goods and low profits as compared to total investments.
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95
Cost Of Goods Sold

Stock Turn over Ratio = Avg . Clo sin g Stock

=370,149,436 / 171,635,461 =651,025,539 / 171,635,461
= 2.16 times = 3.79 times
Avg Clo sin g Stock

No. of Days (Rotation period) = Cost of Goods Sold ×365

=(171,635,461 / 370,149,436)*365 =(171,635,461 / 651,025,539)*365
= 169 days = 96 days
Interpretation
The results of the stock turn over ratio show that there is a good management of the
inventory because rotation period has been decreased from 169 to 96 days and stock turn
over ratio of Lyallpur Chemicals & Fertilizers (Pvt) Limited has been shifted from 2.16
to 3.79 times which means last year stock of the company converted 2.16 times into sale
in period of 169 days and in year 2008 it could be converted 3.79 times into sales and the
whole process was completed in 96 days. This is very good sign for the company and this
shows now company has maintained lower working capital as compared to previous
financial year.
Analysis of Solvency (Long Term Financial Position)
The long term debtors of a firm include debenture holders, financial institutions
providing medium and long term loan. Short term creditors of a firm are primarily
interested in knowing the firm’s ability to meet its short term obligations, the debenture
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96
holders and another long term creditors are primarily interested in knowing the firm’s
ability to pay regular interest on long term borrowings, repayment of the principal
amount at the maturity and the security of the loan. Accordingly long term solvency
ratios indicate the firm’s ability to meet the fixed interest and cost and repayment
schedules associated with its long term borrowings. These ratios also used to analyze the
capital structure of the company. They indicate the pattern of financing, whether long
term requirements have been met out of long term funds or not.
Following ratios are generally calculated to test the long term solvency.
Debt-Equity Ratio
Debt-to-equality ratio indicates the relationship between the external equities or outsiders
funds and the internal equities or shareholders funds. It is also known as “External –
internal equity ratio”. It is determined to ascertain soundness of the long term financial
policies of the company.
Significance
The ratio indicates the proportionate claims of owners and the outside against the firm’s
assets. The purpose is to get an idea of the cushion available to outsider on the liquidation
of the firm. However, the interpretation of the ratio depends upon the financial and
business policy of the company. The owners want to do the business with the maximum
of outsider’s funds in order to take lesser risk of their investments and to increase their
earnings (per share) by paying a lower fixed rate of interest to outside. The outsiders
(creditors) on the other hand, want that shareholders (owners) should invest and risk their
share of proportionate investments.
Debt Equity Ratio = Total Debts / Share Holder Fund
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97

=207,122,875 / 48,525,609 =684,147,750 / 165,447,497
= 1:4.27 = 1:4.13
Interpretation
Debt equity ratio of the company is being decreased from the previous year from 1:4.27
to 1:4.13 which is indication that now the company has lesser funds to pay out the long
term funds. Debt equity ratio = 1:1 (for Rs.1 of long term debts share holders have Rs.1)
is considered satisfactory but the debt equity ratio of the Lyallpur Chemicals & Fertilizers
(Pvt) Limited is much above the standard which is sign for the financial institutions that
the company is in position to pay back the loans acquired with in time or when they will
become due.
Debt Service or Interest Coverage Ratio
This ratio relates the fixed interest charges to the income earned by the business. It is also
known as interest Coverage Ratio. It indicates whether the business has earned sufficient
profits to pay periodically the interest charges.
Significance
The interest Coverage Ratio is very important from the lender’s point of view. It indicates
the number of times interest is covered by the profits available to pay interest charges. It
is an index of the financial strength of an enterprise. A high ratio assures the lender a
regular and periodical interest income. But the weakness of the ratio may create some
problems to the financial manager in raising funds from debts sources.
Net Pr ofit Before Interest & Tax

Interest Coverage Ratio = Fixed Interest Ch arg e
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98

=17,731,945 / 14,747,127 =113,551,737 / 19,209,717
= 1.20 times = 4.14 times
Interpretation
The results of the interest coverage ratio of Lyallpur Chemicals & Fertilizers (Pvt)
Limited for both periods are clear indication of the company’s ability to pay the periodic
interest on long term borrowings and especially in year 2008 the company’s profit before
tax is 4 times greater than its financial costs. Through the analysis of this solvency ratio
the confidence of the bankers and other financial institutions with respect to the
credibility will definitely increase and they will feel the repayment of their loaned
principal together with interest very safe.
Review Report With respect to Investors and Creditors
Performance of financial analysis is of key importance for many stake holders especially
for management of the company which needs to analyze the overall operations of the
enterprise, investors because they are interested in adequate return of their investment
and creditors who are interested in on time repayments of loan and interest.
As we go through the ratio analysis of Lyallpur Chemicals & Fertilizers (Pvt) Limited
with investor’s point of view so it is found that the company has potential to pay back the
relatively better and attractive returns to the investors. Although the company has profit
pressures from the last year because the cost of sales has been substantially increased this
is mainly subject to rising of fuel prices in year 2008. Secondly company revaluated the
useful life of the assets which has substantially increased the depreciation charge. But
still the company is paying relatively better returns to the investors. The major reason of
increase in return is more than 100% increase in sales. This shows the company is
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99
expending its business. The analysis of profitability ratios is the depiction that share
holders are getting adequate returns. The company’s performance in many aspects paying
attractive returns and has better liquidity and solvency position to pay back the loans and
the profits to the share holder.
If we analyze the liquidity and solvency ratios then it will be clear that the creditors are
being paid promptly and company has sufficient funds to pay it liabilities on time or
when they will become due.
Before sanctioning the loan, the financial institutions analyze the potential of the
company to repay the amount of interest together with principal. Lyallpur Chemicals &
Fertilizers (Pvt) Limited has potential to meet its all to meet its long term and short term
liabilities and obligations.
I conclude that the Lyallpur Chemicals & Fertilizers (Pvt) Limited has potential and
attraction for both the parties i.e. it can pay its liabilities in time and it can also give the
adequate returns to the investors. Investment of the investors and financing by the
creditors both are secured.
INTERNSHIP REPORT
100

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LYALLPUR CHEMICALS & FERTILIZERS (PVT) LIMITED

Submitted By Shahzad Javed

Roll No. M06MBA033

Submission Date 22/09/2008

Hailey College of Banking & Finance

The company is principally engaged in the business of manufacturing Single Super

Products Rated Plant Capacity

Sulphuric Acid 46,000 M. Tons per annum

• Experience an increase in new customers who are turned into long-term

Sales 72,439 Tons 90,000 Tons

Particulars Page No.

Group Introduction ………………………………………………… 01

Management Philosophy …………………………………… … 03

Mission Statement ………………………………………………04

Welcon Chemicals (Pvt) Limited ……………………………….06

Weal-Ag. Corporation …………………………………………….07

Agri Village International …………………………………………08

Nasco (Pvt) Limited ………………………………………………08

Al-Hamd Chemicals (Pvt) Limited …………………………………..09

Lyallpur Chemicals & Fertilizers (Pvt) Limited …………………..09

Hi-Warble Pharmaceuticals (Pvt) Limited ………………………10

Welcon International ……………………………………10

Nasco Industries ………………………………………………11

Farm Fertilizers (Pvt) Limited ……………………………………..11

Lyallpur Chemicals & Fertilizers (Private) Limited …….12

Particulars Page No.

Vision Statement ……………………………………………. 15

Input Ratios of Manufacturing Products ……………………………………21

Production Capacity ………………………….22

Percentage of each manufacturing product in the total production ………..22

Major Suppliers ……………………………………………..22

Trading Products ………………………………………23

Personal objective …………………………………30

Recruitment and Selection …………………………….31

Particulars Page No.

Selection Procedure ……………………………….31

Employment Agencies …………………………………33

Casual Applications ……………………………….34

The Hiring Procedure …………………………………….34

Preliminary interview ………………………………….35

Applications blank …………………………………………35

Check of References ……………………………………….36

Psychological test …………………………………….36

Intelligence test …………………………………………….36

Mechanical Aptitude test …………………………………….37

Clerical Aptitude Test ……………………………………….37

Interest Test ……………………………………………37

Employment interview ………………………………….37

Approval by the supervisor ………………………….38

Physical examinations ………………………………..38

Particulars Page No.

Training Needs Assessments …………………… 41

Operation analysis ……………………………41

Individual Analysis ……………………….41

Operative Training ………………………………….41

Off the Job Training ……..42

Workers Training Program …………………..42

Special Courses …………………………..42

Selling and Technical skills training program ……….43

Evaluating Training Programs …….43

Management and Career Development ………………44

Salary Administration ……………………………..45

System of Communication …………………………48