INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Noon Sugar Mills Limited

Bhalwal, Sargodha.

Phone: +92 (48) 6642411 12

Fax: +92 (48) 6642784

E-mail: sugarmill@noonsugar.net

Website: www.noonsugar.net

INTERNSHIP REPORT

Zain-ul-abideen
Roll : 40 R
M.Com
(FINANCE)
2009 2011

1
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

DEPARTMENT OF COMMERCE
UNVERSITY OF SARGODHA

Preface

IN THE NAME OF ALLAH THE MOST BENEFINCIENT AND MERCIFUL

2
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

ACKNOWLEDGEMENT

First of all I am thankful to Almighty Allah who enables me to perform my duties in a

very successful way. I am also great full to Respected Sir Malik Mohammad Hayat for

providing me offer letter of internship directed towards Noon Sugar Mills Limited,

Bhalwal. I have a very special thank to Resident Director Mr. Ahmed Ali, Finance

Manager Mr. Majeed, Deputy Finance Manager Mr. Nazar Hussain and all other

employees of Accounts department of Noon Sugar Mills LTD. for providing me complete

guidance, cooperation and learning environment during the whole internship

programme.

3
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

TABLE OF COTENTS

SR. NO. TOPICS PAGE #

......................................

1 Executive summary ..........5

2 Introduction .6
.

....

3 History .12

4 Mission Statement ...13

5 Group Profile ....13

6 Products .......16

7 Organizational Chart ...18

..

8 Department Chart ...18

9 Work done as

4
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Internee 19

10 SWOT Analysis ..19

...

Five year Review at

11 Glance ...21
..

12 Ratio Analysis ..22

Five year Review at

13 Glance .....23
....

14 Trend Analysis ..24

...

15 Recommendations ...25

16 Contacts .....26

END

Executive summary

I am very thankful to the staff for cooperation which helped me to prepare

this report. The report is basically consisted the introduction of Pakistan

sugar industry as well as Noon Sugar Mills LTD. Bhalwal to whom I am

5
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

concern. I discuss all the departments of Noon sugar Mills LTD. Including

Finance and Accounts, Sugar, Disterlly, Cane and store.

To demonstrate the clear picture of the process I placed the flow chart

of the manufacturing process. I mention the SWOT analysis of Pakistan

sugar industry which can be helpful for the mill to improve its efficiency

and effectiveness as well as and financial performance. For this purpose I

did the trend analysis for the five years and to show the financial position

regarding liquidity and profitability and also the growth rate by mean of

total assets.

After the detail work I give the recommendations according to my

observation for the further improvements of Noon Sugar Mills.

INTODUCTION
An Introduction to Pakistans Sugar Industry

Pakistan is the 5th largest country in the world in terms of area under sugar
cane cultivation, 11th by production and 60 th in; yield. Sugarcane is the primary
raw material for the production of sugar. Since independence, the area under

6
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

cultivation has increased more rapidly than any other major crop. It is one of the
major crops in Pakistan cultivated over an area of around one million hectares.

The sugar industry in Pakistan is the 2 nd largest agro based industry

comprising 81 sugar mills with annual crushing capacity of over 6.1 million tones.
Sugarcane farming and sugar manufacturing contribute significantly to the
national exchequer in the form of various taxes and levies. Sugar manufacturing
and its by-products have contributed significantly towards the foreign exchange
resources through import substitution.

Key Facts

No. of Mills 81 (71-Operational, 2-Under

Construction, 4-Completed)

Crushing Capacity 6.1 Million tones

Contribution to Economy 3.0 4.0 Million Tones

- Share in GDP 1.9%

- Employment 1.5 million (directly & indirectly)

- Total Investment PKR 100 Billion (Approx)

Average Yield Per Hector 46.8 Tones

Total Cane Production 45.0 55.0 Million Tones

Cane Available 30-43 Million Tones

Average recovery of sugar 9.1 (vs. world avg. 10.6%)

Per Capita Consumption 25.8 kgs. Per capita

Contribution to exchequer Rs. 12.16 Billion

7
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Cane Sugar Yield of World

Country Cane Yield (T/ha) Sugar Recovery (%) Sugar Yield (t/ha)
Australia 100.4 13.8 13.85
Egypt 110.8 11.5 12.74
Brazil 68.4 14.5 9.91
USA 80.2 11.7 9.38
Colombia 80.5 11.5 9.26
Mexico 79.5 11.6 9.22
Pakistan 66.9 9.9 6.64
Pakistan 49.0 9.2 3.54
World Avg. 64.4 10.6 6.82

Pakistan Sugarcane Area and Yield

Utilization
Area (000 Produced Yield per % by
Year
Ha) 000 Tonnes Hectare Sugar
Mills
2000-01 960.0 43,620 45.4 67.47
2001-02 999.7 48,041 48.1 76.33
2002-03 1,099.7 52,049 47.3 80.28
2003-04 1,074.8 53,800 50.1 81.15
2004-05 966.4 43,533 45.0 73.74
2005-06 907.0 44,292 48.8 67.94

Sugar Production by type of raw Material (In Tonnes)

8
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Cane Crushed Sugar Made
Year Recovery
Tonnes Tonnes
2000-01 29,408,879 2,466,788 8.39%

2001-02 36,708,638 3,197,745 8.71%

2002-03 41,786,689 3,652,745 8.74%

2003-04 43,661,378 3,997,010 9.15%

2004-05 32,101,739 2,922,126 9.10%

2005-06 30,090,632 2,588,176 8.59%

Industry Scenario

Sugar industry is mostly located in the rural areas of Punjab and Sindh. A
small percentage of total production is produced in the NWFP. Previously, Punjab
was partly dependent on supply of sugar from Sindh, but lately the establishment
of some large scale units in Punjab has made the Province self-sufficient in the
commodity.

Sugar production is seasonal activity. The mills, at an average operate for

150 days, and supplies are made throughout the year. As the industry now has
large daily crushing capacity there are efforts to even further reduce.

Province wise sugar production (In Tonnes)

Province 2005-06 2004-05 2003-04 2002-03 2001-02

Punjab 1,832,228 2,182,330 2,599,490 2,351,102 2,152,175

9
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Sindh 1,038,122 801,063 1,221,268 1,158,674 940,959

NWFP 128,157 132,407 176,252 166,983 104,611

TOTAL 2,998,507 3,115,801 3,997,010 3,676,759 3,197,745

EXPORT OF SUGAR, MOLASSES AND ETHYL ALCOHOL

Year Quantity (Tonnes) Value (In 000 Rs.)

2000-01 - -
2001-02 - -
Sugar

2002-03 45,669 627,949

2003-04 116,175 1,589,210
2004-05 54,771 1,028,710
2000-01 1,190,012 2,456,573
Molasses

2001-02 1,607,380 3,898,800

2002-03 1,272,630 2,652,975
2003-04 1,457,283 2,698,964
2004-05 1,151,431 4,297,617
Year Quantity (Liters) Value (In 000 Rs.)
Ethyl Alcohol

2000-01 10,061,000 208,082

2001-02 14,594,000 341,438
2002-03 16,341,575 342,658
2003-04 35,921,065 692,840
2004-05 36,669,688 1,067,445

It can be seen from the above, that there exists tremendous potential for
export of sugar, molasses and ethyl alcohol. In particular molasses needs
to be mentioned here as it has shown regular exports over the last few
years.
10
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

The major buyers are Netherlands, UK, Germany, Spain, Italy and Korea.
Netherlands is the biggest buyer with over 40% share in overall exports.

Import of Refined Sugar

Quantity Value
Year
(Tonnes) (In 000 Rs.)
2000-01 930,142 14,488,243

2001-02 85,037 1,472,326

2002-03 8,315 152,746

2003-04 11,398 188,509

2004-05 266,707 5,288,976

2005-06 1,527,322 37,365,929

Investment Opportunities

Improvement in sugar crop yield through R&D and planning

Improvement in procurement and storage to reduce wastages
Export potential of sugar/molasses

11
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Development of Industries for proper utilization of by-products by adding
equipment (distillery, chipboard etc.) which can earn / enhance revenues.
Blending of fuel ethanol with petrol.
Power co-generation by the sugar industry using bagass

HISTORY

12
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

NOON SUGAR MILLS LTD.

The Company was incorporated in 1964 as a public company listed on all the
Stock Exchanges of Pakistan for setting up of a plant for manufacture of white sugar, in
the province of Punjab. The plant went into production in 1996 with a daily crushing
capacity of 1,500 MT of sugar cane, which has since been raised to 4,000 MT per day in
2002. Further extension to 9,000 TCD is underway which has become operative in
2006-2007 crushing season, Al-Hamdulillah.

An Alcohol Distillery of French origin was added during 1986 with a production
capacity of 50,000 liters/day in 2002. Another facility with an option to provide either
30,000 LPD Industrial of fuel Grade Ethanol was added in 2002. A new Fuel Ethanol
plant of 100,000 LPD, based on Molecular Sieve technology has been added in 2005.

The Distillery is ISO 9001 certified since 1998. This upgraded to ISO-9001-2000.

An Effluent Treatment Plant employing the Canadian technology of ABV Bio-Gas

reactors has been installed since 1997, to use its bio-degradable waste water as a
renewable source of energy to replace 70% of fuel oil / natural gas, for generation of
process steam. This has also enabled the Company to fulfill its obligation towards
reducing the environmental pollution.

The present equity of the Company is Rs.992 Million, with total investment of
around Rs.1877 Million. The Market Capitalization is over Rs.455 Million, and sales
revenue amounts to over Rs.1.0 Billion, including exports of Rs.213 Million. The average
number of employees is 691.

The Company has a gratifying record of 40% average annual Dividend out to the
share holders in the last 10 years.

MISSION STATEMENT

13
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Noon Sugar Mills Limited is committed to continue its sustained efforts towards
optimizing its resources though updated technology, staff motivation and good
corporate governance so as to Insha Allah maintain its tradition of high yield and
handsome returns to its shareholders on their investment in the Company.

Group profile

Noon Group employs about 2000 personnel and its offices are located at the following
locations in Pakistan.

1) 6th Floor, EFU House, Gulberg Road, Lahore.

2) 7th Floor, Lakson Square, Karachi
3) 1st Floor, Alfalah Building, Shahrah-e-Quaid-e-Azam, Lahore
4) 92-B, C-2, Gulberg III, Lahore

Manufacturing facilities are located at Bhalwal, District Sargodha and Chenki,

District Khushab. The Group is managed by Noon family duly assisted by qualified and
experienced technical and business professionals as working Directors and Senior
Executives.

MANUFACTURING SECTOR

A. NOON SUGAR MILLS LTD.

B. NOON PAKISTAN LTD.

The Company was incorporated in 1966, with a paid up capital of Rs 5 Million

and a total investment of Rs 18 Million. In the private sector, Noon Pakistan Ltd., was
the first company in Pakistan to operate a Spray Dryer for milk powder manufacturing.

The installed capacity of the plant is 72,000 litres/2 shifts. The plant commenced
its operation in June 1972 and its products namely, milk powder, butter and cheese are
marketed throughout Pakistan under the brand name of "Nurpur". Annual sales revenue
amounts to Rs.270 Million. The total number of employees is 350. Long life milk (UHT)
in the form of one litre and quarter litre brick packs has recently been added to the
range of products under the popular brand name of Nurpur.

14
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

C. PIONEER CEMENT LTD.

The Company was incorporated in 1985. it has a paid up capital of Rs.954 Million
with a total investment of Rs. 3,660 Million for a cement plant having a production
capacity of 2000 TPD clinker or 630,000 tons cement per annum.

The plant is situated at Chenki in District Khushab, Punjab and started

commercial production from 1st November 1994. The annual turnover of the company is
about Rs. 2 Billion.

The project was financed by a consortium of foreign lenders led by Asian

Development Bank with Asian Finance & Investment Corporation and Nissho Iwai
Corporation as co-financers.

TRADING SECTOR

A. NOON INTERNATIONAL (PVT) LIMITED

Noon International (Pvt) Ltd., is a trading company of the group established in

1972. The company employs 41 people including 13 professional sales engineers.

Noon International represents various international companies of repute in Pakistan

and market their equipment in the fields of textile, power generation, sugar, fertilizer,
chemical, steel, cement, food and milling.

The company has a diversified and large customer base of over 400.

The average annual sales order turn-over is USD 18 Million.

15
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

B. TEXTILE SERVICES

Textile Services was established in 1994 to provide services to over 200 customers of
Sulzer Textile Projectile Weaving Machines. The company employs 32 people with 7
professional sales engineers and 7 service engineers. The average annual sales order
turnover is Rs. 60 Million.

The company provides a complete Customer Support Service in Pakistan and

offers training, technical service and spare parts. This setup is the only one of its
kind in the textile sector in Pakistan.

C. INTERNATIONAL SALES AND SERVICES

International Sales and Services is also a trading company of the Group. The Company
employs 15 people including 6 professional sales engineers

16
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Products

Ethyl Alcohol
Industrial Grade (Hydrous)

Guaranteed Product Specifications

for Export of Industrial Grade Alcohol
(BSS. 507 / 1966-ISO-R 1388/1970)

1. Alcohol Contents Minimum 95% by volume at 15o C

2. Aspect Clear, colorless, free from suspended matter
3. Adour Not foreign
4. Dry Matter Maximum 10gr/hl (100ppm)
5. Acidity Maximum 7gr/hl (70ppm) as acetic acid
6. Esters Maximum 25gr/hl (250ppm) as ethyl acetate
7. Aldehydes Maximum 20gr/hl (200ppm) as acetaldehyde
8. Higher Alcohols Maximum 25gr/hl (250ppm)
9. Furfural Not detectable.
10. Methanol Maximum 10gr/hl (100ppm)

Fuel Grade (Anhydrous)

Ethyl Alcohol, non-denatured, fermented from cane or cane molasses with alcohol
strength min. 99.7% by volume at 15 Degrees Centigrade in bulk, with following
specifications:

1. Aspect Clear and Colorless, liquid free

from suspended matter

2. Ethanol plus higher 99.7% min

17
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

saturated alcohols

3. Water Contents 0.3% max.

4. Acidity as Acetic Acid 7 grg 10 gr/hl
5. Higher Alcohols 25 gr/hl
6. Chloride Content <2 mg/l
7. Density at 20 Deg. C 0.789 kg/l

Sugar White Refined

8. Grain Medium/Bold
9. Polarization 99.8% Min
10. Moisture 0.07% Max
11. Ash 0.05% Max
12. Colour 100 ICUMSA Max

18
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

ORGANIZATIONAL CHART

Chart of Hierarchy

Board of Director

Chairm an & CEO

Managing Director

Finance Mangers
Resident Director

Chief Financial Officer Deputy Finance Mgr.

Accounts Officer

DEPARTMENTS

Finance & Account Disterlly Sugar

Work done as aCane

internee
Account
19

Store Account
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

File the documents of daily transactions

Recording of daily sugar sale
To maintain the daily position of godown
Recording of Sale invoices
To maintain the record of provident fund
To record the scrap and mud transactions and also their reconciliation
Bank reconciliation statements
o United bank limited
o Allied Bank limited
o Muslim Commercial Bank limited
o Bank Allfalh
o Habib Bank limited
To maintain the debtors and creditors accounts

SWOT Analysis of the Sugar Mills

Strengths

Pakistan sugar Mills is the third largest producer of sugar in the world
after Brazil. The
sector has a potential to make the country to be self reliant in this highly
sensitive
Essential commodity of mass consumption.
The sugar Mills paid well over Rs. 122.69 billion to the sugarcane growers
in the
Financial year 2006.
Annual tax contribution to exchequer Rs. 17 billion annually.
Provides direct employment including ancillary activities to near about
0.5 million workers
It also supports the down stream industries by providing the raw
material.
Sugarcane farming is more profitable then any other cash crop in
Pakistan.

20
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

This sector have been the focal point of socioeconomic development of
the rural Pakistan
Strong government policies as it comes under essential commodity of
mass consumption

Weaknesses

For the sugar cane supplied by the farmers.

Most of the sugar factories are more then 30 years old and still using the
old technology
Low installed production capacity leads to the decrease in production
and losses.
Lack of professionalism

Opportunities

High value of by-products for down stream industries.

Huge potential to increase the productivity of cane and sugar recovery
rate.
Technology up gradation, new advanced technology available for the
byproduct utilization.
Overview

Threats

Sugar sector is vulnerable to political interest.

Ground water availability for irrigation.
Quality of soil deteriorates due to overuse of fertilizer and pesticides to
increase
Sugarcane yield.
Unhealthy competition between members of the society.

21
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Five year Review at Glance

Year ended 30
Sep: 2008 2007 2006 2004 2003
Operating Results
Sale (000'sRs) 894339 1079378 1082796 943633 1037175
Cost of Sale (000'sRs) 821266 845900 863278 757471 804469
Gross Profit (000'sRs) 73073 233478 219518 186162 232706
Pre tax Profit (000'sRs) 80885 161527 125157 107064 132549
Profit after Tax (000'sRs) 76785 139400 113755 86427 109624

Share holder's equity

Paid up Capital (000'sRs) 113757 113757 51708 51708 51708

Reserve & Surplus (000'sRs) 878719 835592 556437 442682 387280
Share holder's equity (000'sRs) 992476 949349 608145 494390 438988

Financial Position
Current Assets (000'sRs) 502771 455502 365264 310791 256256
Fix Capital Exp. (000'sRs) 1284521 751282 467002 465227 456110
Total Assets (000'sRs) 1877018 1286487 853790 777922 714400
Current Liabilties (000'sRs) 384764 181821 96482 124060 128062
Longterm Liabilties (000'sRs) 431053 13307 17367 19312 4738
Total Liabilties (000'sRs) 884542 337138 245645 283562 275412

Contribution to Govt.
Sale
tax (000'sRs) 114098 129673 136746 150135 155155
Income tax (000'sRs) 23213 32820 23022 24991 24258
Total Taxes (000'sRs) 137311 162493 159768 175126 179413

22
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Ratio Anaylsis
2006 2005 2004 2003 2002
Gross profit to net
sale (%) 8.17 21.63 20.27 19.73 22.44
Net profit to net sale (%) 8.59 12.91 10.51 9.16 10.57
Break-up per share
value (Rupees) 87.25 83.45 117.61 95.61 84.9

Earning per share (Rupees) 6.75 20.52 20 16.71 21.2

Return on equity (%) 7.74 14.68 18.71 17.48 24.97
Current Ratio 1.31 2.51 3.79 2.51 2
Debt Equity ratio 30.28 1.38 2.78 3.76 1.07
Total taxes to net sale (%) 15.4 15.1 14.8 18.6 17.3

Five
year
Review
at
glance.

Year ended 30 Sep: 2008 2007 2006 2005 2003

Operating Results
(000'sRs
Sale ) 894339 1079378 1082796 943633 1037175
(000'sRs
Cost of Sale ) 821266 845900 863278 757471 804469
Gross Profit (000'sRs 73073 233478 219518 186162 23270
23
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

) 6
(000'sRs
Pre tax Profit ) 80885 161527 125157 107064 132549
Profit after (000'sRs
Tax ) 76785 139400 113755 86427 109624

Share holder's equity

Paid up (000'sRs
Capital ) 113757 113757 51708 51708 51708
Reserve & (000'sRs
Surplus ) 878719 835592 556437 442682 387280
Share holder's (000'sRs
equity ) 992476 949349 608145 494390 438988

Financial Position
(000'sRs
Current Assets ) 502771 455502 365264 310791 256256
Fix Capital (000'sRs
Exp. ) 1284521 751282 467002 465227 456110
(000'sRs
Total Assets ) 1877018 1286487 853790 777922 714400
Current (000'sRs
Liabilties ) 384764 181821 96482 124060 128062
Longterm (000'sRs
Liabilties ) 431053 13307 17367 19312 4738
(000'sRs
Total Liabilties ) 884542 337138 245645 283562 275412

Contribution to Govt.
Sale (000'sRs
tax ) 114098 129673 136746 150135 155155
(000'sRs
Income tax ) 23213 32820 23022 24991 24258
(000'sRs
Total Taxes ) 137311 162493 159768 175126 179413

Trend
Anaylsis

24
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Year ended 30 Sep: 2006 2005 2004 2003 2002
Operating Results
82.8568 99.6843 90.9810
Sale (%) 9 4 114.7476 8 100
97.0878 97.9869 94.1578
Cost of Sale (%) 4 8 113.9685 9 100
106.359
Gross Profit (%) 31.2976 4 117.9177 79.9988 100
50.0752 129.059 80.7731
Pre tax Profit (%) 2 5 116.8992 5 100
Profit after 78.8394
Tax (%) 55.0825 122.5441 131.6197 9 100

Share holder's equity

Paid up 219.998
Capital (%) 100 8 100 100 100
Reserve & 150.168
Surplus (%) 105.1613 3 125.6968 114.3054 100
Share holder's 104.542 112.620
equity (%) 8 156.1057 123.0092 4 100

Financial Position
124.704
Current Assets (%) 110.3773 9 117.5272 121.2815 100
Fix Capital 160.873 101.998
Exp. (%) 170.9772 4 100.3815 9 100
145.902 150.679 108.891
Total Assets (%) 6 6 109.7526 7 100
Current 188.450 96.8749
Liabilties (%) 211.6169 7 77.77043 5 100
Longterm 3239.29 76.6223 407.598
Liabilties (%) 5 3 89.92854 1 100
262.367 102.959
Total Liabilties (%) 9 137.246 86.62832 2 100

Contribution to Govt.
Sale 87.9890 94.8276 96.7645
tax (%) 2 4 91.08203 3 100
25
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

70.7282 142.559
Income tax (%) 1 3 92.12116 103.0217 100
84.5027 97.6105
Total Taxes (%) 2 101.7056 91.23031 4 100

Recommendations

26
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Contact

Noon Sugar Mills Ltd.

Head Office

Address
2nd Floor, Mustafa Center
45-F, Main Market Gulberg
Lahore 54660
Pakistan
Phone Number
+92-42-35788461
+92-42-35788462
+92-42-35788463
+92-42-35788464
+92-42-35788465
+92-42-35788466
+92-42-35788467
+92-42-35788472
+92-42-35788473
Fax Number
+92-42-35788468
E-Mail
ho@noonsugar.net
info@noonsugar.net

27
 INTERSHIP REPORT OF NOON

SUGAR MILLS LTD.

Mills & Distillery

Address
Bhalwal,
District Sargodha
Pakistan
Phone Number
+92-48-6642411
+92-48-6642412

Fax Number
+92-48-6642784
E-Mail
sugarmill@noonsugar.net
distillery@noonsugar.net

Registered Office

Address
Ist Floor, Alfalah Building,
Shahrah-e-Quaid-e-Azam
Lahore
Pakistan
E-Mail
nsuger@brain.net.pk

28