Aftab Anwar

MC100205161
MBA
Finance

Internship Report
Kohat Cement
Factory

Brief Introduction of the

Organization
Brief history
Incorporated in 1980, Kohat Cement Company Limited (KCCL) is
one of the leading cement manufacturing companies of Pakistan. It
is an ISO 9001-2008 certified company, with an annual capacity of
2.8 Million tons of Grey Cement and 150 thousand tons of White
cement. The Registered office and the Factory are located at Kohat,
whereas the Head Office is located in Lahore.

 Business volume

Stock in trade was Rs. 500,326,860 in 2012, Rs

737,325,759 in 2013 and Rs. 469,501,350 in the year
2014 according to the Annual Report 2014 and
Annual report 2013.

Shareholders equity was Rs. 8,587,467 in 2014

and Rs. 6,041,048 in 2013.

Authorized share capital was Rs. 5 3,000,000,000

in 2014 and Rs. 1,500,000,000 in 2013.

 Competitors
There are total 29 plants of cement in Pakistan
competing with each other for domestic as will as
foreign market.
Some big players which holds the majority share
of the market are;
Lucky cement

20 %

DG Khan cement
Best way cement
Maple leaf cement

15 %
11 %
10 %

Kohat Cement Factory is competing with all these

firms to capture the maximum share of the
market.

Training Program
I performed different tasks in my 7 weeks internship program.
Here is a snapshot of the tasks I performed;
I have prepared following vouchers and reports
General Ledger
General Ledger- Abstract
Bank Transfer scroll
Posting NBP Advance Salary
Daily Statement
Miscellaneous Book
End of Day register
Monthly return register
Check Book Issue Register
Demand Notices

Some other tasks I performed in the finance

department are;
Proper checking and posting of GRN and
Invoices
Payments to the drivers through Payment
Note
I have performed data entry of Daily Petty
Expense Vouchers of all departments
Salary Sheet preparation for specific period
Employee wise detail loan/advances
preparation

Learning Experiences
Knowledge Gained

I learned how to make and post a voucher

I learned a significant knowledge of networking

I learned how to communicate properly in a business

environment

I learned how to make cheque and how to collect cash

from the bank

I learned about production management

 Skills Learned

I learned how to install and use the advance accounting software

Micro Soft GP which will help me throughout my career.

I learned the skill of making reports to the senior management

I learned the skill of business communication important for any

career

I learned the scanning and printing of documents which is the

necessary part of any office

I learned how to be a team player. It was really a pleasing

experience working in a team for common objective and I
enjoyed a lot

I learned how to read financial reports

My project management skill was also improved during the

internship program

Attitudes Observed/Values Gained

Handwork: I come to know that hard work is the only key to success.
Employers prefer those employees who are hardworking , efficient
and save time in performing task by working efficiently

Punctuality: I learned from the internship that being punctual is the

way to make a good reputation in the organization. I was available
on time throughout my internship period

Trust: Accounts and finance department is the only department

where trustworthiness, honesty and integrity matters a lot and I
understood this in my internship.

Dependability: I understood the value of responsibility and

dependability.

Positive attitude: My supervisor Sir Liaqat Ali thoroughly trained me

on keeping attitude positive in any situation. He was himself with a
very calm and positive attitude and I copied him will. This is the
quality which can put me on the path of success

Loyalty: The ladder to reach to the higher positions in an

organization is to be loyal and have an image of a loyal employee
towards organization. Employers like this quality very much

Most Challenging Task Performed

The most challenging part of my internship
was the learning of Advance accounting
software Microsoft GP used in Kohat
Cement Company.
I spent 15 hours in learning this. After
learning, my supervisor was happy with my
performance.

Ratio Analysis
1. Kohat Cement Company Limited (2011).Annual Report for the year
ended June 30, 2011. [ONLINE] Available at:
http://www.kohatcement.com/pdf_files/reports/634950825441718
750_annual_report_30thJune2011.pdf. [Last Accessed Jan 2015].
2. Kohat Cement Company Limited (2013).Annual Report for the year
ended June 30, 2013. [ONLINE] Available at:
http://www.kohatcement.com/pdf_files/reports/635169811031234
126_30_June_2013.pdf. [Last Accessed Jan 2015].
3. Kohat Cement Company Limited (2014).Annual Report for the year
ended June 30, 2014. [ONLINE] Available at:
http://kohatcement.com/pdf_files/reports/635466791376713611_
Kohat_Cement_Annual_Report_2014.pdf. [Last Accessed Jan
2015].

For presentation of this portion please

Ratio
Analysi
s

Kohat Cement Company

Current ratio = Current Asset / Current liabilities
Year 2012

Current =2,318,381,69
Ratio
3/2,899,295,71
3
=0.80 Times

Year 2013

Year 2014

=4,126,165,581/ =6,989,749,555/3,6
2,294,226,957 = 95,536,547= 1.89
1.80 Times
Times
Current Ratio

Ratio
Analys
is

Quick
ratio

Kohat Cement Company

Quick Ratio = Current Assets Inventories /
Current liabilities
Year 2012

2,318,381,693
-500,326,860)/
2,899,295,713
= 0.63 Times

Year 2013

Year 2014

(4,126,165,581 - =(6,989,749,555
737,325,759) /
- 469,501,350)
2,294,226,957
/ 3,695,536,547
= 1.48 Times
Quick Ratio
= 1.76 Times

Ratio
Analy
sis

Kohat Cement Company

Times Interest Earned = Earnings before
Interest and Tax / Interest Expense
Year 2012

Year 2013

Year 2014

Times 2,662,044,784 =4,018,513,14 =4,531,274,925

Interes /626,060,398
0/248,972,932
/ 154,675,816
t
=4.25 Times
=16.14 Times = 29.30 Times
Earne
Times Interest Earned
d

Ratio
Analy
sis

Debt
ratio

Kohat Cement Company

Debt ratio = Total Liabilities / Total Assets
Year 2012

=5456422052
/9,212,877,40
8
=0.59 or 59 %

Year 2013

Year 2014

=4753542143/ =5563990144/1
10,794,590,13 4,151,457,441
8
= 0.39 or 39 %
= 0.44 or 44 %
Debt ratio

Ratio
Analy
sis

Debt
to
Equity
Ratio

Kohat Cement Company

Debt / Equity Ratio = Total liabilities /
Shareholders Equity
Year 2012

Year 2013

Year 2014

=5456422052 =4753542143/ =5563990144/8

/3,756,455,35 6,041,047,995
,587,467297
6
=0.79
= 0.65
= 1.45
Debt / Equity Ratio

Ratio
Analy
sis

Net
Profit
Margi
n

Kohat Cement Company

Net Profit Margin = Net income / Sales
revenue
Year 2012

Year 2013

Year 2014

=1,660,511,3 =2,632,632,55 =3,154,826,513

77 /
5/11,297,213,0 /12,765,670,05
9,316,380,873
12
9
= 0.18 or
= 0.23 or
=0.25 or 24.71
17.82 %
23.30 %
%
Net Profit Margin

Ratio
Analy
sis

Gross
Profit
Margi
n

Kohat Cement Company

Gross Profit Margin = (Revenue Cost of
Goods Sold) / Revenue
Year 2012

=(9,316,380,8
736,463,977,256
)/
6,463,977,256
=0.44 or
44.13 %

Year 2013

Year 2014

=
=(12,765,670,0
(11,297,213,01
5927,958,970,205)
6,936,346,069)
/
/
12,765,670,059
11,297,213,01
=0.38 or 37.65
Gross Profit Margin
2
%
= 0.39 or
38.60 %

Ratio
Analy
sis

Return
on
Assets
(ROA)

Kohat Cement Company

Return on Assets (ROA) = Net Income /
Total Average Assets
Year 2012

=1,660,511,3
77/916863912
4.5
=0.18 or
18.11 %

Year 2013

Year 2014

=2,632,632,55 =3,154,826,513
5/1000373377 /12473023789.
3
5
=0.26 or 26.32 =0.25 or 25.29
%
%
Return on Assets (ROA)

Ratio
Analy
sis

Operat
ing
incom
e
margin

Kohat Cement Company

Operating income margin = Operating
Profit / Sales Revenue
Year 2012

=2,662,044,7
84/9,316,380,
873
=0. 29 or 28.
57 %

Year 2013

Year 2014

=4,018,513,14 =4,531,274,925
0/11,297,213,0 /12,765,670,05
12
9
=0. 36 or 35. =0.35 or 35. 50
Operating
57 %Income Margin %

Ratio
Analy
sis

Kohat Cement Company

Return on Equity = Net income /
Shareholders Equity
Year 2012

Return =1,660,511,3
on
77/3,756,455,
Equity 356
= 0.44 or
44.20 %

Year 2013

Year 2014

=2,632,632,55 =3,154,826,513
5/6,041,047,99 /8,587,467,297
5
= 0.37 or 36.74
= 0.435 or
%
Return on Equity
43.56 %

Ratio
Analy
sis

Kohat Cement Company

Assets Turnover Ratio= Sales Revenue /
Total Assets
Year 2012

Assets
Turnov
er
Ratio

Year 2013

Year 2014

=9,316,380,8 =11,297,213,0 =12,765,670,05

73/9,212,877, 12/10,794,590, 9/14,151,457,4
408
138
41
Turnover
= 1.01 Times Asset
= 1.05
TimesRatio= 0.90 Times

Ratio
Analy
sis

Operat
ing
Cash
Flow
Ratio

Kohat Cement Company

Operating Cash Flow Ratio = Operating
Cash Flow / Current Liabilities
Year 2012

Year 2013

=2,488,940,2
80/2,899,295,
713
=0.86 Times
or 85.85 %

Year 2013

=3,633,928,12 =4,836,154,298
4/2,294,226,95 /3,695,536,547
7
=1.31 Times or
=1.58 Times
130.86 %
or 158.39 %

Operating Cash Flow Ratio

Kohat Cement Company

Ratio
Analy
sis

Dividend per Share = Dividends / Number

of Shares

Divide
nd per
Share

=386271723/ =772543450/1 =309017380/15

128,757,241
54,508,690
4,508,690
= Rs 3 or 30% = Rs 5 or 50%
= Rs2 or 20%

Year 2012

Year 2013

Dividend per Share

Year 2013

Ratio
Analy
sis

Kohat Cement Company

Earning per Share= Net Income Preferred
Dividends / Weighted average number of
ordinary shares in issue during the year
Year 2012

Earnin
g per
Share

Year 2013

Year 2013

=1,660,511,3 =2,632,632,55 =3,154,826,513

77/128,757,24 5/154,508,690
/154,508,690
1
= Rs 17.04
= Rs 20.42
Earning per Share
= Rs 12.90

Conclusion
During my 7 Weeks internship program real life experience and analysis of financial
statements and auditors report on financial statements, I came to know that the management
of Kohat cement company is fully aware of the Companys responsibilities and obligations for
compliance with the Code of Corporate Governance and there has been no significant
deviation from the best practice of corporate governance.
The quick ratio of Kohat Cement Company is highest in FY14 as compared to FY12 and FY13.
Account receivable policy has also been improved in the past 3 years which led to the
improvements of quick ratio.
The Current Ratio for the year 2012 was 0.80 Times which was improved to 1.89 Times in
FY14
In the year 2013 and 2014, the company was in good position of paying its short term
liabilities with Rs1.8 and Rs 1.89 of current assets available for paying Rupee 1 of current
liabilities.
Credit policy of the company was changes in FY12 and the company took a bold step of
aggressively de-leverage its Statement of Financial Position with the repayment of PKR 1.9
Billion and the effect of these low liquidity ratios was by-and-large decreased .
The Earning Per Share (EPS) was also satisfactory in the FY2014 which is PKR 20.42 which
will attract more investors in the future.

Conclusion on the bases of my internship experience:

During my internship period at Kohat Cement Factory, I found some critical
areas of the company while working with them.
During my scheduled visits to the production area of Kohat Cement Factory, I
found out that the factory workers are provided with safety tools. However
after critical analysis, I concluded that such tools provided to the workers are
similar irrespective of the kind of work that each of these workers was
dealing with. I concluded that this may not be helpful for the workers because
therere different stages involved in the production process of cement, each
requires different type of works which involves different type of risks. So
following a set of standard facilities to workers may not be very helpful.
Kohat Cement is spending a lot on marketing activities. There is also an
attractive budget to carry out these activities. But while judging from an
external point of view, I conclude that the company should put more energy in
reaching out to the perspective customers and informing them about their
business. Before joining Kohat Cement as an intern, I did not know many
things that I know now.
The working environment of Kohat Cement Factory is very supportive;
however I observed that there was an absence of recognition programs for
the employees. The recognition of the efforts of an employee and appreciation
of his work is very important for motivation. It helps in improving the
relationship between an employer and an employee and also helps an
employee to understand the pace of his work compared to that of his coworkers. It will also increase job satisfaction and ultimately, it will increase

Recommendations
The company has already improved its debt to equity
ratio by lowering it to 0.65 in FY14 but it can be further
improved by Using cash reserves to pay its debt and
increasing assets without taking debt. Increase of equity
into the business by selling off unneeded assets like
plant, property or equipment or by disposing of
unprofitable operations and increasing profits that are
retained in the business.
Addition of more profitable products and finding
efficiencies in production can leads to further
improvements in the profits.

Recommendations on the bases of my internship experience:

I have discussed this issue with concerned authorities and I came to
know that the concerned authorities are already working out to provide
different kind of medical, health and security facilitations to their
employees depending on the nature of their work. e.g. the person
responsible for lab testing doesnt require a medical/health benefit like
that similar to a worker involved in grinding the cement in the factory.
For fast implementation, I recommend that the company should focus on
new ways of marketing like Google adwords, Face book and twitter
advertisement etc. Kohat Cement should publicize more about their
activities on its twitter, face book and Linked in accounts and pages.
They should publish news about their export activities in these
platforms. The company should also inform their customers about the
CSR activities that they are doing so actively for the last couple of years
The HR department is situated in the head office Lahore and there is a
lack or delay of communication. I recommend the HR Head to introduce
some recognition programs for their employees that would highlight
their efforts and hence they will be rewarded for their performance. Itll
help to motivate the employees to work harder which would result in an
increase in productivity and support/further the mission, goals and
values of the company. Such programs should be introduced both in the
Head Office of the company and the Factory. Employees may be
rewarded for their work through a pay raise for "doing as ordered", nontask performance or performance that contributes to organizational
maintenance or meeting a target. Small crests or certificates could be
given to rank the best employee/factory worker of the month etc.

Thank You