ACKNOWLEDGEMENT

Packages Limited is a learning organization where every person whom I interacted during my
internship contributes to making this internship report. I would like to acknowledge the efforts of
the following persons.
First of all, I would like to mention the generosity and kind behavior of Head of costing
department, Mr. Amir Rana, who gave me a chance to work in his department under his kind
control. In making this report, I can never forget the contribution of each person of the costing
department, which let me, learn the internal working of departments with an ease and freedom.
I would like to thank Mr. Tariq Azam, Acconts & Tax Manager and my immediate Supervisor,
who always been kind enough to lend me a helping hand in gathering information from whole
department.
A special thanks to Mr. Hafiz Yaseen, who let me understand and analyze the costing process of
the company.
 EXECUTIVE SUMMARY

I, Farooq Sajjad Alam student of MBA from NUCES(FAST) Lahore undertook the internship
with Packages Limited which stands unrivalled in the business of packaging products. The
ultimate motive behind choosing a manufacturing business sector was a large number Financial
activities involved in the day to day business of the organization. Therefore, I proudly felt
satisfaction while working with Packages Limited. The sheer interest and concern of higher
management, excellent working conditions and feasible atmosphere with tremendous
cooperation of the staff of all departments made the learning process so much easy and
productive in all respects.
As for learning purpose, I started internship at packages in costing department. Here I have been
working with Tariq Azam, who primarily manages the accounts and taxation of Sayed Babar Ali
Foundation. I have been also working with Hafiz Yaseen, who primarily deals with costing
process and responsible for producing cost of production report. The whole period of my
internship at packages was full of learning experiences.
 INTRODUCTION

Packages Limited was established in 1957 as a joint venture between the Ali Group of Pakistan
and Akerlund & Rausing of Sweden, to convert paper and paperboard into packaging for
consumer industry.
Over the years, the Company continued to enhance its facilities to meet the growing demand of
packaging products. Additional capital was raised from sponsors, International Finance
Corporation and from the public in 1965.
Packages commissioned its own paper mill in 1968 having production capacity of 24,000 tones
of paper and paperboard based on waste paper and agricultural by-products i.e. wheat straw and
river grass. With growing demand the capacity was increased periodically and in January 2003
was nearly 100,000 tones per year.

PRODUCT LINE
Production units of Packages Limited have been divided into five:
1. Paper & Board
2. Carton Business Unit
3. Corruwal Business unit
4. Flexible Business Unit
5. Consumer products

1) Paper
The company is producing high quality paper and board since 1965 using environment friendly
manufacturing processes. The company specialize in making a variety of duplex boards and
paper. The ducts are tested for high performance in terms of strength, stiffness and gloss.
  Company produces:
 High Gloss Writing Paper
 Machine glazed / special poster paper
 Fluting paper
 Liner for shipping cartons
 Corrugating medium paper
 Wood-free writing/printing paper
Paper quality and weight is determined by the client's specific requirements and Packages
ensures this is carried out to the exact specifications provided.

Board
The company manufactures several types of board. Food Board, a basic raw material in liquid
food packaging, is being manufactured since 1979 for Tetra Pak Pakistan Limited. This material
is used in making aseptic packaging for milk, cream, oil, fruit juices and other perishable food
items.

Some of company’s board products are:

 Liquid packaging board
 Food grade board
 Duplex board / chipboard
 Bleached board
 Tobacco board and cardboard
 Liner board

Technical Expertise: Company’s production capacities exceed 100,000 tonnes per annum, from
four main paper machines of different capabilities. These paper machines are supported by two
pulp mills and a chemical recovery and effluent treatment plant along with allied support
services.
Packages Limited is among the first companies in the world to manufacture paper & paper board
using a pulp mixture of wheat straw, kahi grass, cotton linter, recycled pulp and wood pulp.
These environment-friendly processes use fewer chemicals, resulting in improved strength
properties and increased stacking strength of containers.

2) Carton Business Unit

The carton business unit is an integral part of the manufacturing facilities at Packages.
Constant improvements in technology help the customers exert exact control over each stage of
the manufacturing process. Company’s customized packaging and consistent quality gives all
cartons superior shelf visibility.
The total board consumption of the carton line is around 18 - 20 thousand tonnes per
annum. The strong backward integration within the Packages value chain has given the carton
line a competitive edge in terms of backend material availability. Prompt material availability
reduces turn around time and ensures timely delivery. The main customers of this unit are the
companies such as:
 Food and Beverages
 Soap / Detergent
 Pharmaceuticals
 Match
 Electronics
 Shoe
 Tobacco
 Paper Cup

3) Corruwal Business Unit

Packages have been manufacturing corrugated cartons since 1974. Produced in a variety of sizes,
these cartons are of great value for in-country goods distribution and export. Capacity increase
and product development continue to be of high priority.
Corrugated cartons are of great value to company’s diverse portfolio of customers for secure
transportation of their products to local and international markets. With the commissioning of
corrugated plant in Karachi, company has the capability of producing seven million corrugated
cartons to cater to the ever-increasing demand of high quality shipping cartons. The companies
main customers in this sector are companies like:
 Textile
 Food
 Tobacco
 Soap
 Detergent
Technical Expertise: The corrugated finishing division can print in up to three colours.
Customers have the flexibility to choose from regular slotted containers (RSC), glued, RSC
stitched or die cut cartons.
Product Development: After customer feedback and extensive research, Packages has
developed special liner and fluting that gives extra strength to containers, in particular increasing
their stacking strength and their resistance to bursting.

4) Flexible Business Unit

With improved barrier properties and lower cost compared to rigid packaging, flexible packaging
is steadily gaining importance in the packaging industry. Flexible line makes high quality
packaging films and laminates, and offers other specialized services such as rotogravure printing
and sleeve-making.
Flexible packaging combines different plastic films, aluminium foil and paper to produce
laminates of two or more layers for providing layered protection against moisture, gases and
odors. Used where colorful package design and preserving product quality are important, such as
in the food and pharmaceutical industries, flexographic printing offers economy with quality.
The main customers of this unit are the companies such as:
 Soap
 Tobacco
 Te a
 Food
 Diary Ice-Cream
 Milk powder
  Confectionery
 Shampoo
 Pesticide
 Pharmaceutical

5) Consumer Products
A range of products for those annoying problems in life: company’s consumer products feature
great ideas for making everyday living easier and more comfortable, both Indoors and out.
1.Tissue Products
2. Personal Hygiene
3. Paper Products

DIVISION
In the company, there are various productions, service, support Divisions and their respective
sub-departments, which are as follows:

1) Paper & Board Division: Straw and Linter Preparation, Cooking House, Bleaching
House, Chemical House, CRP, CMTP, ETP, Waste Paper Plant, Beater House, Machine
House, Quality Control, Finishing House, maintenance and Instrument.
2) Business Unit- Carton: Offset, Cutting & Creasing including Die making, Lemanic,
Folding & Gluing, Planning Cell Offset Department.
3) Business Unit- Prepress and Logistics: Art & Camera, Reproduction, Paper Stores,
Coating, Dispatch Section, Planning Cell- Prepress Departments
4) Business Unit- Flexible: Flexible Packaging, Paper Conversion Departments and
Planning (FC/FP)
5) Corrugated Division: Planning, Conversion Section & Sheeting Section
6) CPD Production: PM-IV, Tissue Conversion
7) Technical- Power: Electrical Department, Air Conditioning Department, Steam Power
Plant and Diesel Power Plant
 8) Technical-Mechanical: Mechanical Workshops & Design Department, Civil &
Carpentry
9) Marketing Division: Sales Office Lahore, Karachi, Islamabad
10) Consumer Products: Sales Office Lahore, Karachi, Islamabad & Multan
11) Finance: Financial Accounts, Cost and Tax, Internal Audit, Accounts and Shares
Department Karachi
12) Commercial: Local Purchase Section, Imports Section and Commercial Office, Karachi
13) Stores & Inventory: Central Stores Packaging and Paper Board, Waste Disposal and
Transport
14) Industrial Relations: Industrial Relations, Labor Welfare, Time Office/Establishment
and Legal Section

FINANCE DEPARTMENT
Finance department has very important role in for any business firm now a days. So Packages
Limited has established its own Finance Department on professional basis. Packages Limited has
different financial managers who are responsible for the financial aspects of the Packages
Limited. This department plays a key role in organization’s performance. Finance department is
responsible to maintains accounts of all departments within the organization. For solving the
complex and difficult problems, Finance Department is segregated into four divisions. These
divisions are as follows:
1. Account Division
2. Internal Audit Division
3. Cost & Tax Division
4. Share’s Division

Major Functions of Finance Department

Finance department performs different functions in the organization to run the finance of the
organization more effectively. Finance Manager is responsible for the company’s financial
management. The major functions which by this department are as follows:
  Calculate different expenses of the organization.
 Calculation of all incomes, receiving from sales & other resources.
 Financial planning of the organization
 Distribution of profit to the share holders.
 Getting loans from banks and other financial institutions.
 Costing the production.
 To make the efficient use of money of the company.
 Maintains all the accounts about inventory & imports of material.
 Maintains all the records about purchases made by organization.

Since I have been working in costing division of finance department, so the details of this
department is as follows.

COST & TAX DIVISION

Packages Limited is engaged in producing two types of products:

♦ Paper & Board
♦ Packaging Containers and Corrugated Cartons
Both products are costed differently, so these are two separate units for Paper & Board Mill
Division.

Costing of Paper & Board Division:

Paper & Board Mill Costing Division deals with process of costing. Paper & Board Mill
produces one product with different quality and grammage and the production of Paper & Board
is even, the manufacturing costs are calculated with help of process costing system. This method
is particularly very helpful where unit’s produces are unidentifiable and one department’s
finished goods becomes the raw material of another department. Cost per ton is determined at
each process and it is figured out by dividing the total cost by the number of tons for a particular
period.
To determine the exact cost, the manufacturing costs are calculated with sum of direct material,
direct labor and factory overhead costs, also to see that for how long the machine worked and for
how long it remained idle? So they prepare an hourly summary on which the total hours of work
along with the idle time are mentioned. On the basis of this report, the actual cost of production
is calculated. Costing Division also prepare the cost summary. The variable and fixed cost is
shown separately in this cost summary.
This division also prepares a summary report of profit month wise. This report shows profit &
loss of the organization for this month.

Functions of Paper & Board Costing Unit:

Paper & Board Costing Unit performs the following functions:
 Provides information to management about the inefficiencies and wastage of
Production.
 Provides necessary information to top management for decision making.
 Calculation of the cost of each product produced in the Packages Limited.
 Deals with Income Tax Department and prepare the tax reports.
 Estimates the operational costs of each department of the Packages Limited.
 Prepare short term and long term financial plans for production
 CORE COMPETENCIES
 Packages has its own Paper & Board Mill.
 They are producing all types of paper and board packaging.
 They are having the best positive image & reputation for quality packaging products in
Pakistan.
 They are having the most advanced sophisticated & up to date machinery in Pakistan and
even in Asia.
Packages have their own Research, Development & Control department.
They have ISO 9001 quality assurance certificate.
 They are having their own Power Generation Plant.
Well established in Pakistan.

AREA’S TO LOOK UPON

 High prices
 Lack of motivation & intrinsic reward orientation among the management
 Market for Packaging Industry is growing day by day.
 Quality awareness & consciousness among the customers are increasing.
 Mushroom industry is increasing.
 Products of mushroom industry are cheap