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Paint “A chemical oriented liquid used to protect & decorate different kind of surfaces”

Paint industry in Pakistan can be classified in to two major segments

· Original sector
· Mushroom sector

The main ambiguity is that how we can differentiate between these two sectors against which we can categorized our firm as in original sector or in mushroom sector.
Some of these factors are given as 
1- companies listed in stock exchange/registered firms or unregistered firms.
2- Involved in planned promotion /no planned promotion .
3- High price or low price which is the major factor in determining the position of a company.
4- Under capacity tax /fixed tax.
5- Having brands in more than one city or city base brands.
On the basis of these factors we define the organized sector as the area of companies having their registration in the stock exchange having their planned type of promotion and other marketing activities.
On the other hand if we see the mushroom sector there is no any organized and registered firms having no proper promotion and marketing activities. These are the price conscious companies having the aim to capture the low market by low pricing and under fix tax system.
The major companies listed in stock exchange of Pakistan are 
The major competitors of BUXLY are the ICI & BERGER.
The question is why not others, the answer is that the both competitive companies have the same variety and product range of paints as the BUXLY.If we see the decorative paints the company have a wide range of oil base , water base and epoxy base paints for the vary purpose .
Though the company have a same product line and brands as the other two have but the major factor is that the revenue for both the companies are greater than that of the Buxly.
In the end of the report we will find the weaknesses and threats which make the profitable company on the edge of disaster .


HAN RAHIM BUX KHAN, the founder of BUXLY PAINTS LIMITED first started his paint manufacturing activities back in 1933 in undivided India in the state of Hyderabad-Deccan which was perhaps the first paint factory in that area at the time started by any local person. The company was a proprietary concern and after partition of India in 1947, the family migrated to Pakistan where in 1948 he set up the first paint factory in Karachi under the name and style BUXLY Paints Works. Incidentally the word BUXLY often leads people to believe that this is a British Company. The word BUXLY actually comes from the middle name of the founder late Rahim Bux Khan. The early years in the new state of Pakistan presented many a hurdle like in other fields but nevertheless, the determination of the founder of this company enabled him not only to survive the initial difficulties but also to become, at that time the largest Pakistani Paint Manufacturer in the country. Although he started his activities in Karachi but soon he setup a factory in Chittagong and then setup his second paint factory in Karachi in 1956. In the next few years, he was the largest manufacturer of Paints in Pakistan until the influx of the Multinationals. The pride that BUXLY takes is not only that it is the first Pakistani paint company and one of the oldest companies in the country but that it has survived competition from the multinationals, imported paints and a variety of other hurdles. 
The personal contribution of Late Rahim Bux Khan was the development of specifications for paints in the early years. He was also the founder chairman of Pakistan Paint Manufacturers’ Association for many years and as a philanthropist that he was, he constructed and donated a large laboratory hall to the association for its research program, which is named after him, Khan Rahim Bux Khan Paint Research Laboratory at Karachi.
The company was the first to start the export of paints to the Far East and to the Middle East naturally others followed suit. In 1963, a paint factory was established in Beirut on a joint venture basis with a local entrepreneur with Buxly Paints’ know how and brand name which was the order of the day. Buxly continued exporting its paints to several countries of South East Asia and even to Africa. The year 1973 saw the establishment of factory in Kuwait with BUXLY’s know how.
Although subsequent events lead to the loss of factories In Chittagong due to Dhaka Fall and loss of factory in Beirut due to civil war there and loss of Kuwait factory due to Iraqi invasion, nevertheless BUXLY in Pakistan is still the largest Pakistani national paint manufacturing company and its products still enjoy great respect in the decorative market as well as in the sophisticated coatings such as Epoxies, Polyurethane, Chlorinated rubber and a host of other paints too many to enumerate here. Buxly is recipient of several international quality awards like Asian quality award and European quality award. 
In 1996, BUXLY started production of a new factory in UAE under the name and style BUXLY SENSAIRE COMPANY LTD which recently started operations. In May 1985, the status of the company was change from private limited to public limited.
The history of Buxly is full of extraordinary achievements and paramount. It was the first paint company in Pakistan which has the credit of pioneering paint technology, the first to begin a nucleus research facility which has expanded with time and is now drawn upon by private and government sector alike, The first to be awarded the international Awards for quality in Spain & Singapore, the first to export the paint and paint technology to bring in foreign exchange and the first company of Pakistan which has been producing the aircraft paint of international standards.

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The drastic change occurred in the history came in the last year when an age old company is going to be victimized by the factor of globalization and mismanagement of the factory and being acquired by the Berger Paints Pakistan Limited .
The company did not mention the internal affairs of the acquisition and now a days it is just fulfilling the legislation period after takeover of Berger.
Berger has made very drastic changes in the factory, which includes the problems of union and down sizing by reducing the useless employees and bringing the skilled, and knowledge able workers in the factory. Due to these steps the factory is again on the way of excel and taking its place in the competitive market due to its quality products 

CHAIRMAN: Nasim Alam Khan
DIRECTORS: Mrs. Kaiser Sultana Khan
Mrs. Amtul Rauf Khan
Abdul Qadir H. Moochala
Salim M. Khan
Shahid Ghaffar
DIRECTOR (ADMN): Mushir Alam Khan
AUDITORS: Ford, Rhodes, Robson, Morrow
Chartered Accountants.
BANKERS: The Muslim Commercial Bank Ltd.
Habib Bank Ltd.
United Bank Ltd.
National Bank Of Pakistan.
Bank Al-Habib Ltd.
Bolan Bank Ltd.
Polytechnic Road, Karachi-75700
Manghopir Road, Karachi-75700(Works 1) E/20, S.I.T.E.
Polytechnic Road, Karachi-75700 (Works 2)

Buxly Paints Limited has a very well established head office which is situated on Polytechnic Road of Sindh Industrial & Trading Estate, Karachi. It is in the same building in which the production department exist. All the activities and related paper work from purchase to production and then to sales, billing and credits is done here.
Buxly Paints Limited has three factories to produce quality paints. All these factories are situated in S.I.T.E. area of Karachi. These factories are titled as Works I, Works II (Unit-I & Unit-II). But due to the new management which realize the problem of extra prime cost and conversion cost due to enlarge production capacities and due to very low turnover, the production is restricted only in works-I and production and offices are closed
And transferred in the W-I.
Buxly paints limited has divided its paint market into two regions, Southern region and Northern region. The sales and market of Southern region is handled by General Sales Department which is in the Head Office premises while the Northern region is controlled by two Sales Offices which are situated in Rawalpindi and Lahore. 

Personnel Department 


n the world of today’s industrial life, the importance of personnel department cannot be denied. The function of any personnel department is to manage the people who are at work. In BUXLY Paints Ltd. , personnel department is newly established on January 1, 1997, previously there was an establishment department which was practicing some preliminary practice of personnel management. After realizing the needs of the organization, a restructuring process took place on the behalf of Managing Director.
After the takeover of Berger the factory has no proper personnel working department the person who is taking care of all the functions of personnel department has both the responsibilities of personal and factory admin manager and he is the wonderful person taking care of all the affairs of the both spheres. He has only one coordinator the age old and devoted employee Mr.Mehboob Ali who assist him in all the affairs of the factory policies regarding the HR. 
There is also workers union in the company which was established in 1958.the union produced many great problems of legislation and shut down of the factory due to the acquisition of new management and factory has faced a lot of crucial stages due to union and now after a year the union problems are going to be settled by the entire effort of new admin manager and legislation activities. 

Functions Of Personnel Department:
The personnel department is engaged in exercising the following types of jobs:
Ü Maintenance of the attendance and daily work joining & leaving records.
Ü Developing and updating the Bio-Data of all the employees.
Ü Issuing office orders especially for selection & recruitment, leaves, retirement, promotions, increments and allowances etc.
Ü Creating, keeping and updating the policy files according to the direction of top management. 
Ü Guiding management to take decisions according to the policies especially in situations like increment, promotion & upgrading considerations, disciplinary violations and termination’s. 
Ü Assisting the management in the coarse of dealing and encountering with union affairs especially at the time of revision of biennial union-management contract.
Policy Issues In Relation To Human Resources

Following are the major areas of human resources in which the company has some specified policies and these issues are kept in the form of files in personnel department. There is no order of papers in these files. Being policy files, these should have only the final decisions on policy matters but these are having a pile of papers including letters, irrelevant office notices and a lot of other irrelevant material. Moreover the documents in the files are not ordered chronologically. Mr.Mehboob Ali is now responsible for the arrangement of the policy files and documents after the downsizing of the employees without any designation and additional benefits. The solution is that the department should be run in systematic manner by having a complete and separate office setup and proper coding of all these related things.
The policies as I notes are as follows:
Employees Classifications & Pay Scales:
The employees in Buxly Paints Limited are broadly classified into following categories.

Staff Productive Workers Non Productive
Woks-I 25 22 10

The above classification is a general kind of division showing the overall strength of the employees however this categorization is further classified into staff and workers in accordance with pay scales, this is shown below : 

Pay Scales Senior Staff Junior Staff
Grade I 2770-200-3770-250-5520 550-60-1150-80-1550-100-2050
Grade II 3880-260-5700-300-7200 700-80-1500-100-2000-120-2600
Grade III 5040-320-7280-370-9130 1000-100-2000-120-2720-140-3280
Grade IV 7500-375-9375-410-12245-450- 1300-120-2500-131-3175-145-3875

The division of workers in various categories in accordance with their pay scales is shown below: 

Class ‘B’ Class ‘A’
UN Skilled 400-40-800-50-1050-55-1325 450-50-950-55-1225-60-1525
Semi Skilled 500-55-1055-60-1355-65-1680 550-60-1150-65-1475-70-1825
Skilled 600-60-1250-70-160-75-1975 650-70-1350-75-1750-80-2135
Leading Hand 700-80-1500-85-1925-90-2325 *****

These pay standards of the staff & workers are revised periodically at the direction of Directors.
Recruitment & Selection:
There is no concrete policy for the selection & recruitment in Buxly Paints Limited. Most of the new jobs are filled by the sons of old employees working there which is the single criteria for most of the jobs. e.g. the son of technical manager is assistant programmer in computer section. The son of chief accountant is sales person and acting upon the policy of ‘looking busy, doing nothing’., the son of Ex-Senior general manager operations is chemist in BUXLY PAINTS LIMITED. From all these, except the son of senior general manager operations, any body is not doing up to the mark. Besides this what is written in the policy file is that the directors are directly involved in these matters with discretionary authority, however while recruiting a person in certain Department , the Head of that Department is asked for the initial screening of the applicants and the final interview is taken by the Executive Director or sometimes by the Managing Director.
The newly recruited employees are asked to fill a Surety or Indemnity Bond which is a kind of legal service agreement between the employer and the employee. The probationary period of all categories of employees is of three months but the Managing Director have the full authority to increase or decrease (very rare) the duration of this period by judging the performance of new employees.
The criteria of promotion in the company is mainly based on the seniority and a minimal kind of importance is being given to performance . while promoting the employees from one pay scale to another it is strictly cared that total strength of scale 2 should not exceed 40% of those in scale 1, the total strength of scale 3 should not exceed 50% of incumbents of scale 2 and those in scale 4 should be a maximum of 40% of scale 3 while the total strength of the employees in scale 1 is determined by considering the changing of the organization.
In Buxly Paints Limited, following types of allowances are being given to employees:
House Rent Allowance: According to the lastly decided biannual contract which will be valid up to 30-06-98, it is the policy that the staff members who are drawing their basic wage upto RS. 1000 per month will be paid a sum of RS. 840 per month as house rent allowance.
The staff members whom basic wage exceed RS. 1000 per month will be paid house rent allowance at the rate of 51% of their basic salary plus RS. 320 per month.
Conveyance Allowance: The policy about conveyance allowance as was lastly decided in biannual contract mentioned above are as follows:
All workers are paid RS. 360 as conveyance allowance
All staff members drawing basic wage up to RS. 1000 per month are paid a sum of RS. 410 as conveyance allowance
All Staff members drawing basic wage exceeding RS. 1000 are paid conveyance allowance @ 17% of their basic wage plus RS. 234 per month as conveyance allowance.
Attendance Allowance: As mentioned in the biannual contract, the attendance allowance is given to the employees on the following basis:
· On full attendance during the month, RS. 125 per month per head
· On one day leave in a month, a sum of RS. 100 payable to each of such worker in that month.
· On two days leave a sum of RS. 80 per month payable to such worker/staff member. 
· The workers/staff members availing leaves or being absent for more than two days in a month are not entitles to attendance allowance.
· This monthly attendance allowance is in addition to annual attendance award.
Recreation / Vacation Allowance: Buxly Paints Limited also pays special recreation & vacation allowance to its employees @ RS. 2250 per annum on the occasion of annual vacations.

Bonuses And Awards:
Buxly Paints Limited announces and pays bonuses to all the employees in every financial year. The company also gives a “17-Year Service watch” plus prize bonds on completion of 17 years of any employee with the organization. Company also gives ‘hard work, loyalty and devotion award’ on any good performance to its employees so as to present a tribute to hardworking, loyal and devoted employees. On the time of retirement, a retirement award is given to the employees. Moreover, annual gifts of paints are also being given to employees to increase their morale and motivation level. But here is it is important to note that from last four years there was no promotion and bounces for the employees due to the long years in the factory economic conditions. During my stay at Buxly the new management announces the increments and bounces for the employees. 

Leave Entitlements:
In Buxly Paints Limited, an earned leave of 25 days per annum is allowed to all the employees. In case of less absences the employees can enact these leaves upto an accumulation of three years. For Medical and casual leaves , employees are given a maximum period of 15 days with pay. All the employees are given 15 minutes time relaxation so as to join the office and even then if a person come late for five days his one annual leave is deducted by the management.
Training Courses & Apprenticeship:
Buxly Paints Limited rarely sends its employees to professional institutes for training purposes but it is the policy of the management that whenever an employee will be sent to any institute then all the expenses of that training will be beard by the company and the person will be paid his regular salary throughout the training period.
The company also appoints different people as trainee employees especially in the section of Research and Control Laboratories, which are mostly the trainee chemists. The time period of this type of training is usually one year. These appointments do not carry any pay scales but these are paid agreed salaries. Any sort of allowances, bonuses, leaves entitlements or gratuity and provident fund is not a matter of legitimacy to these appointments.
Along with this Buxly also provide the internship to the local and country wide business schools and institutes for their graduates for the learning of the business activities and have a proper and planned schedule for that purpose and provide them with all the facilities regarding their needs and fully accommodate the internees by the stipend and lunch facilities. 
Graduity & Provident Fund:
The policy prevailing in Buxly Paints Limited depicts that the statutory graduity is not applied to those employees who have their Provident Fund Accounts in the company. The rate of provident fund is 8.33% of the basic pay. At the end of service, retirement or death, it is paid to employees with interest. Otherwise employees are paid graduity on the basis of number of employment years, on number of years, the pay of some days per year is given as graduity. Schedule of graduity is as follows:
· 1-5 years 25 days
· 5-10 years 27 days
· 10-12 years 30 days
· 12-15 years 32 days
· 15-20 years 40 days
· 20-25 years 45 days
· 25 and greater 50 days

Union-Management Affairs:
All the workers and the junior staff in Buxly Paints Limited are unionized. This union was established in 1958, since then it is working for the rights and welfare of employees. The biennial Union-Management contract is one of the efforts of union and of management also to satisfy the workers and to smoothly run the organization.. This is the agreement which takes place after every two years, in this contract the wage standard of workers are revised, increase in allowances and bonuses are mutually agreed upon. Due to the mismanagement and work shirking practice of the previous management the company suffer a lot of union problems and has to face the crucial situation of shut down of production and legalities. But now by the takeover of the new management the things are coming on their normal flow and a successful down sizing takes place and company cover the losing market by reducuing its factory overheads and prime cost and producing the same sales with one –fourth of previous strength. In order to deal with the union affairs management appointed the factory manager Mr.Niazi to solve the matter with peace and mutual agreement and now the new union is organized and all the legalities are being fulfilled.

Lunch Subsidy & Mess System:
There is one canteen in Buxly Paints Limited, at Head Office. This canteen is basically providing the lunch and tea facility to staff members. The workers are not served with lunch but are paid the same amount as lunch subsidy. The amount is as follows:
· For and on behalf of each staff member, a sum of RS. 10 per attended day plus a fixed amount of RS. 75 per head per month are paid to officer’s mess 
· All the workers are paid a sum of RS. 10 per attended day plus a fixed amount of RS. 75 per head per month as lunch subsidy. 
· No deductions are made from RS. 75 fixed amount except on availing more than 25 days annual leave in a month.

Social Security & Old Age Benefits:
These are the institutions, which demand a fixed percentage of the pay of all the employees from the employer so that the benefits should be given at the time of retirement, death or any mishap during work. Under the policy of social security Buxly Paints Limited deposits 7% of the wages of each worker to Social Security Department and in case of any serious accident of any of the employees all the medical expenses are beard by the Government. 
The age of retirement in Buxly Paints Limited is 60 years and during their service the company pays 5% of each employee wage to the government under the system of Employees Old Age Benefit and 7% to the social security so the these employees can get pension after their retirement.

Shares Department 


hares department was established in 1984, when the company was incorporated as public limited company and 5,00,000 shares of RS. 10 par value were floated in the market. Before the restructuring of establishment department, shares department was the part of it, but after the restructuring now it has its own identity.
But the actual share department did not exist in Buxly now a days after the acquisition of the Berger and the shares department is being under the Chief Accountant and on my inquiry the cashier of the C.A give me the details of the shares holding of the company after two days.
The department was in existence to perform the following functions


Ü Arrangement of Annual General Meeting
Ü Distribution of dividend amount to share holders whenever they are declared.
Ü Maintaining and updating the record of share holders.
Ü Issuing the share certificate to share holders and fulfilling the requirements of transfer deed in case of change in ownership of the shares.
There are two staff members in this department and their hierarchy is shown below. 

The pattern of share holdings as at 31-05-2001 is shown as 

Serial No Categories of Shareholders No of share holders Shares held Percentages 
1 Individuals 630 2233,353 16.205
2 Investment companies 2 3,680 .256
3 Insurance companies 1 10,000 .694
4 Joint stock companies 4 356,900 24.785
5 Financial institutions 1 355,709 24.702
6 Modarba 2 1,200 .083
7 Foreign investors
(M/S Overseas group corporation)
1 460,250 31.962
8 Co-operative societies 1 11,400 .792
9 Charitable trusts


Directors 7

From all of the above holdings the new management of Berger Paints Pakistan Ltd.has acquired 262,320 shares and now running the company successfully.
Finance Department 
The most dominant and big department in BUXLY is accounts department. The department is headed by a chief accountant and under him a cashier is shown in the hierarchy that coordinate the overall activities of the chief accountant and along with him the new management appointed its own accountant to have a check and balance over the financial records and business activities. The chief accountant is the person who is enjoying the 
authority in the organization after MD. Most of the decisions that he makes by his conservative approach to do the things are not in the benefit of the organization. The department processes all the formal accounting practices in order to give information to the management, to the share holders and to the government in the form of different financial statements etc. One thing, which I noted in this department, is that work design in this department as is in the whole organization is not clear. The proof for my opinion is the saying of one key post holder in this department “ The work which anybody cannot do, I have to do it.”
The person in this department are very much exhausted by the personality of their ultimate boss who is the chief accountant, and it is not only their saying but I do observe all the activities of that cool and rigid personality, at the moment he is giving order for some document or statement on the same time he is going to snub the person that why are you doing the work and leave this work and do this new work. This factor basically demotivates the employee in the department and they do not show loyalty for the organization.
All the accounts department is computerized and all the process of general voucher entry to the formation of reports are done with help of computers and MIS department. The different persons having their designation of senior accounts officer and junior officers are working on their terminal and directly report to higher management and the chief accountant. The chief accountant has no knowledge of computers and he always find shouting on his sub ordinates and going on the policy “ do nothing and looks busy”.
Mr. Mohammed Anayat is an accounts officer responsible to handle the record and transactions of creditors i.e. purchases. He records each and every purchase .In it, he deals with all the purchase of raw materials, containers etc. from local market and as well as from purchases. He also deals with the payments of the creditors and the promise dates to the customers for receiving their cheques. 
Most of the creditors are very much annoyed from Buxly by not paying them on the promise date. This is destroying the credibility of the organization in the market as well in the customers.
. In the same manner, one accounts officer is to so the same nature of job but for debtors. The person concerned is Mr. Azmatt. He deals with sales. The documents under his concern are invoices, sales register, party ledger and a monthly trial balance that he makes from these documents.
He is the very competent person and is appointed from the Berger side as a senior accounts officer. He also deals with the banks loans and the personnel 
Department and the payroll on the computerized software.
General Control
Another accounts officer is for general control there is no any proper officer who take care of the other financial affairs because due to computers all the reports can be generated by the software, but there is a need of a person who takes care of other activities including the general entry vouchers and similar works because it will reduce the job burden from the other workers and they will be able to perform their duties with full interest and heartedly. 
Cash Handling:
Mr. cashier in BUXLY PAINTS LIMITED. He is responsible to maintain a specific amount of cash to give to the employees as their salaries, daily allowance and for other petty expenses. He pays the amount after seeing the passed voucher signed by a competent authority. He is a competent person but the company is not using its qualities and efforts and always be busy in the cash affairs and banks instead of being in the office. After the acquisition he is also taking care of the shares department along with his original job and for this neither he nor any person doing extra from his job is paid for the jobs they are doing in spite of their original work.
Junior Accountant

The junior accountants are for the purpose of making sales invoices and for the production orders. They keep all the records and accounts details for the finished goods used in the whole regions and making the sales invoices and the challans for the production and sales orders.
The whole finance department is under the crisis because the people here are just demotivated due to sudden acquisition of the Berger and drastic downsizing has made the worker’s loyalty against the organization and secondly the behavior of their ultimate boss make them just to pass the time only to the minimum level and not to put extra efforts in the organization.

Cost & Tender Handling
As an important and necessary part of a production concern, costing is done prior to production in order to have a better idea about all type of costs incurred on the manufacture of a good and to see how much profit we are to get. In BUXLY PAINTS LIMITED Mr. Amin Sherwani is cost accountant to do all this work. . He has his own ways and methods of costing which are far away from all the theoretical and bookish concepts which we read before. But the methods used by him are quite logical and he is having full expertise in doing his work. His responsibilities are to cost a job for non-routine nature. All the expected costs and their approximate figures are on his fingertips. When a tender comes, he is the person to calculate the cost from the formula given by technical staff. And on the basis of this costing, BUXLY gives price for the specific contract. He is an expert person and having an experience of many years now he can tell without doing calculations an approximate cost which will incur on a specific formulas because he knows the prices of raw materials and their variation and also about all the other factors involved in it.
Costing Procedure:
The costing procedure is mainly based on ratio of cost of raw material to the total cost of product. Normally it Is assumed that the cost of raw material is 60-63% of the price adding 10% excise duty it becomes 70-73%. If 10% discount is given, it becomes 80%. It means that remaining 20% is our conversion cost and margin. There is no tradition of braking up of conversion cost in different sub heads and calculating amount of all these. A simply monthly commutation of Labor and MOH is divided by all jobs to calculate conversion cost per job. 
The prices of raw material are assumed to be 60-63% as is discussed earlier in case of normal production but in case of contract or tender business, in order to win the low cost competition it is assumed that cost of raw material is 70-75% of the total price. It decreases our price of the goods by decreasing margin because all the other ingredients of price are usually fixed.
The alone person in the costing g also handle the cases of tender opening and bids because there is no any other person capable of doing such type of skill to handle with the parties and providing them the quality paints at low price bids. So also performing the role of commercial manager who prepare the tenders and give to the sales people for the tenders in the open markets. I do work with him and learn a lot that hoe the raw material is purchased and how the stock is take over and the monthly and year end reports of stocks are prepared.
I was assigned a task by him to maintain the stock register of the raw material by him and I try myself to complete it with whole heartedly.

Production and Dispatch 


ccording to the persons in BUXLY PAINTS LIMITED, paint can be defined as ‘ It is nothing but a complex chemistry packed in a tin”. Paint can be brushed it can be dipped in all to give protection and beauty simultaneously. A paint manufacture of today has a vividly challenging task to face; he has not only to make “paint acceptable for all but has to be very sensitive to the environmental changes especially in the fields of technology, creativity, economy and competition.
Buxly Paints Limited, which has 64 years experience of paint manufacturing and have passed through different eras of paint technology, has now reduce its production from three factories to one production unit due to its management crisis and new acquisition. The factories were named as Works I, Works II (Unit-I & Unit-II)
WORKS-I: As it is previously mentioned that works-I is situated at S.I.T.E. Karachi, in the past few years it was specified only to one type of production but now it is producing all of kind of paints and all the offices are shifted to the premises of this production area. Now it fulfill the need s of customized products as well as the regular products of the factory. 
Due to acquisition the factory operations are combined as single unit producing the water base and oil base paints together.
There is no general manager or a particular manager for handling the operations of the factory because after the take over of Berger the executive director is handling the all affairs of the operations along with its own responsibilities, he assist the two production mangers to do the work as per the specifications. There are two production managers 
1- Production manager (Water Base)
2- Production manager (Oil Base)
The both production managers look after the quality of the products as well as the process handling by assisting the chemists how to process the chemicals on different stages. Both production managers are responsible for all the production and are held answerable to executive director and managing director.

The products of Buxly are of high quality and it is the first consideration of the organization. Quality is the key to success for BUXLY, this thing is kept in mind during all the production process. I have observed that it is tried that the product, which is under manufacturing process, should be complete in all aspects when it will reach in customer’s hands. For this reason checking and testing is done at all levels. 
First raw material is tested. If it is OK, then it is put into the process and during process all the things like viscosity, weight per litter, thickness, glossiness, and other specifications are checked to match with old retained samples. If any discrepancies are found, technically chemists and research laboritries resolve these.
Documentation Procedures:
The production process in Buxly Paints limited is initiates whenever the production department receives an order from Sales Department or Commercial Department. If the required raw material for the production of specific paint is available in the factory store then a production start & the production manager in which the name & specifications of products manufactured, type & quantity of raw material used prepares job card sheet. Dates of starting & completion, packing standards, weight per liter of paint and loss percentage is described. 
If the raw material is not available in the store then the production manager make an indent note and send to Accounts department for the procurement of raw material. Here the problem occurs because of the fact that the procurement of raw material takes time and during that time all the labor sits idle and it results in wastage of time and resources. As no formal forecasting of sales is done and the procurement of raw material is based on personal judgment so these types of problems are the matter of routine. The situation gets worst when the shortage of imported raw material occurs. If raw material is present in bonded warehouse or bank go down, the production manager fills in ‘raw material requisition’ form and sends it to accounts department, which arranges for the clearance of material and then is issued to the production. In order to keep the record of incoming raw material, a material movement Challan is prepared in which the entry of raw material is made in terms of name of raw material, packing, and quantity.
After the completion of paint production and its packaging a daily packaging report is always prepared by the production managers. Production department is semi-computerized and get the information and reports by computer and also the store people prepare reports by their own. These reports are:
· Monthly Raw material report
· Monthly finished Goods Report
· Semi Annually, Annually, Quarterly and monthly shade wise sales report
· Daily stock register maintenance.
The production managers are not involved in any kind of planning even related to production they are only responsible to produce paint as per the direction of the higher management and the orders received from sales department & commercial department.

Paint Manufacturing Process:
According to Buxly people, in Pakistan there are only five companies in Pakistan which are paint manufacturers and the others are just blenders. They blend the ingredients together and make paint but do not know what is happening inside it. Here it is not the aim to discuss the technicalities of paint but to have a look on steps in the process of paint manufacturing. The General manufacturing & operation process of paint can be divided into following categories of functions.
Ø Mixing
Ø Stirring
Ø Gumping
Ø Thinning
Ø Quality Assurance
Ø Packing
Ø Dispatch & Delivery
Major Raw Material For Paint Manufacturing:
For manufacturing quality paints, hundreds of raw material or chemicals are available and can be substitute of other but there are certain types of raw material, which are an essential part of a paint. In case of Buxly Paints, certain varieties of paints’ raw material are purchase from the local market and other are imported. Broadly the raw materials can be divided in five main categories.
1- Pigment 
2- Additives
3- Thinner
4- Extender
5- Color Solutions
The raw material of paint factory has a wide range of above mentioned products. There are about 190 items of raw material. Some important raw material used in BUXLY PAINTS LIMITED is as follows
· Titanium Dioxide
· Yellow oxide
· Chrome Pigment
· Chalk
· Soap Stone
· Mica
Because the main aim and objective of any production concern is to handover the product to the ultimate consumers and in this era of normalization, this is done through proper distribution channels. For this purpose, first and foremost thing is to dispatch the product to outside the factory gate. In this regard some formal rules and regulations are to be followed regarding the payment of sales tax and excise duty.

Excise & Taxation Department 
Excise officer is responsible for this. As there is single locations, so one excise officer is appointed. Different type of forms, challans and registers are used in this procedure, the process is somewhat as follows.
Rate of excise duty is 10% . All the registers above are filled in properly as requirements of the govt and after gate pass is prepared, loading is done. 
So far payment of sales tax is concerned, it is movable tax and rate is 12. 5%. Company pays sales tax on raw material and after sales, it receives from purchaser. 
In the current production Mr. Qamar-ud-Din is excise officer. He is an able and experienced person and all the steps are on his fingertips. He is really an asset of the company in his field and working according to the policies of the organization. 
So far I noted in this department, it is the organizational policy to pay full sales tax and excise duty even on the product which is given to the employees or ,management on discount basis. There is no practice of tax theft in BUXLY. There are totral three persons in the taxation department and all are very competent in their work. There is no computer work in the taxation department and all the activities are on manual basis.
There is a need of computer in the department for time consuming work of long entries of reports.
The excise & taxation department prepare the following reports:
Ø Eb4
Ø Daily production report
Ø Daily clearance memo
Ø AR(application for removal)
Ø RG-1 (register for production clearance)
Ø RI-1 (it is the record in which the production of whole month is noted along with the removal and clearance).
Ø RI3-quarterly (raw material& container)
Ø Sales tax return reports.(for registered firms 15% & for unregistered firms 18%).

Laboratories, R&D and Quality Control


s BUXLY believes on providing quality products to their customers, much more stress is on quality assurance. For this purpose two laboratories are set in the current production plant. The Chemical Lab and The Physical Lab. The staff of both the labs is more or less common. The following staff is working for both the Labs.
Mr. Sohail Akhtar Tech. Manager
Mr. Umer Itrat Senior Chemist &Quality lab incharge
Mr. Jamal-ud-Din Senior Chemist
Mr. Ahmad Ali Trainee Chemist
Mr. Umer Itrat Senior chemist and lab incharge is heading all the technicalities in testing and R&D and two attendants are to assist the laboratory staff. All the procedures of physical lab are more or less the same as of actual production. Sample testing is done here. Usually the following tests are done.
Ü Weight per litter
Ü Viscosity
Ü Hefman reading 
Panels are used for color matching with kept samples. Samples of all the shades and of the specific orders are kept so that the next production will have the same shade as of previous.
Research and development lab is much more developed than physical one. In it, the following tasks and instruments are the part and parcel of this lab.
Ü Testing Of Raw Material
Ü Scratch test
Ü Gloss test
Ü Thickness test.
Ü New innovations
Ü Improvements
The following instruments are used for different type of testing.

Humidity Condensation cabinet. It is a cabinet to test the state of a painted surface in pessimistic humidity level and highest temperature i.e. 42 C. Panels to be tested are kept in this cabinet for at least 15 days and are observed afterward. If panels are rusted, it means sample is not acceptable and needs improvements otherwise it is OK. 
Centrifuge machine. This machine is used to separate different particles from a suspension or paint. It is often used to test different paints for their ingredients. Paint is pored into a test tube and the tube is placed in the machine and then is rotated for the whole day. After this process, the ingredients can be seen separately and are measured.
Electric Balance: As paint is defined as “nothing but a complex chemistry inside a tin” so delicate measures are required to have high quality and for this purpose electric balance is used. It can measure from .001 to 160 grams.
Impact: this is used to see the durability of paints against denting. A panel is put inside the impact and is tightened. Due to the shape of the machine, a mole appears on the panel and afterward it is observed either the paint on mole is OK or not.
Scratch Resistance Test: As paint now a days is much more use for surface coating than a decorative, so it is necessary to ensure that it will cover whole the surface so that not a single microscopic scratch can be seen. It is an electric test. As the panel is on a metal plate. It is tested for passing electricity. As paint is a bad and metal is a good conductor of electricity. If a scratch is there, circuit will be complete and the meter will show reading in voltage.
Hardness and Adhesion test: in this test, it is checked that up to how much extent a paint is hard. The machine consists of a knob which, during operation revolves on panel both clock wise and anti clock wise. There is provision to add weight on this knob. Then it is observed on how much weight and after how much time what happens to the panel and is compared to the standards.
PH test: It is to test the paint for its acidity or basisity
Pencil Hardness Test: It is to test up to what level painted surface can avoid scratches etc.
Labs in factory is just like the physical lab just mentioned above. All type of routine tests are done here like weight per litter, viscosity and shade matching etc. All the samples of routine products and of specific shades are kept for future matching. 
As last words on this topic, Quality control is the most active and aggressive department of the BUXLY. It is the hard work, knowledge, experience and willingness to do something in all the staff of this department which has made BUXLY a quality leader in paint manufacturing market and same is the cause for recognition of BUXLY’s paints by PIA ,Navy, NLC, CAA ,commercial organizations and other armed forces and governmental institutes.
The most important thing of the Buxly is that it has the fellow ship of United Kingdome paint research association and has the ISO-9000 certification, which show the factory consideration about the quality.

Management Information Sciences 
The management information system (MIS) is the most important and the best working department of the Buxly Paints, which is the more organized and systematic department.
As being the person of the MIS I have a great interest in this department and I work with all the persons of the department and learn a lot with all the people. The department basically adjacent with the accounts department and help the higher management in generating different reports and documents. 
The configuration of the MIS department is given as:
There are three servers in the MIS department,
1- Print server
2- Branch System
3- Factory System
There are six persons in the MIS department. All are very much experienced and knowledgeable regarding their work. The four persons are from the Berger side and other two are from the Buxly side. The detail of software and hardware is shown as
The software in the Buxly are very competent and properly made and are provided by the Berger side. The whole database is made-up of latest version of “Oracle” and along with this the office people take a lot of help from the software’s of office automation i.e. M/S Office, Exel etc. 
The operating system of the machines is LINEX on the server and the terminals are supported with other operating system as well and the software is run by the help of TERMLITE (a software by which we can use linex base software in Windows environment).
The number of terminals and hardware are shown as
Ø Terminals (8)
Ø U.P.S (1)
Ø Printers (3)
Ø Storage Devices (cartridge tapes)
The division of terminal is as follows 
1- PA of MD
2- Senior Accounts Officer (receivables & personal)
3- Raw material & inventory Officer(data base administrator)
4- Accounts Officer (creditors)
5- Senior Accounts Officer (general entry & voucher)
6- Junior accounts Officer (receivables & sales invoices)
7&8 are for the servers and are restricted to the data base administrator.
The activities performed by MIS department are as follows
Ø Entry of journal voucher.
Ø Checking the balance of payment to creditors.
Ø Maintaining the accounts receivable
Ø Payroll & personnel information 
Ø Preparing the sales invoices
Ø Raw material records
Ø Issuing of job cards
For all these purposes and other termed reports Buxly has very competent data base administrator and working persons having the skill of doing thing in a computerized environment. 
The whole department of MIS work is very perfect and up to the mark. The performance of the MIS is comparatively better than other department but there are some flaws which effect the productivity of the department which are discussed in detail at the end of the report.
The major problem with the MIS is that it is much influenced by the Chief Accountant, he just try to govern the department as per his own wishes and all the people are being disturbed by his activities. The main problem is that he didn’t know any thing about the computers and just want to place orders. The MIS require a great concentration and peace of mind but the atmosphere is very tense and people are performing both the activities of accounts and the record of the data regarding the finance , sales , invoices , raw material etc. the jobs of people are so much enlarged and enriched but the reward is very low as compared to the industry standards , so it just de motivate the people of the organization.

Raw Material & Store Department 
The one of the major department of any manufacturing unit is its store department and it evaluates the performance of the company in terms of resource utilization and productivity. In Buxly the condition of the department was very much worsened when I joined the organization.
The whole store show like the random placements of the chemicals and colors and nothing is placed in order , in case of any requirement the chemists and the supervisors were in search of the products without label and proper place.
I was being assigned by the higher authorities of the Buxly to organize the store of the raw material and finished goods. I have done a lot in managing g the store of the factory. 
The store has no person to be as in charge, the assistant of the production managers was voluntarily doing the duty of store in charge. He has a multiple duties to perform , at the same time he was issuing job cards and at the other moment he found instructing the supervisors to the different processes of the manufacturing. 
I with my internee fellow first organize the whole department by placing the labels on each item by identifying it with the help of the lab technicians and tests. It is a very tedious job because there are about 180 items in the store and all have different names and properties. The task we performed is
Ø Identify the items
Ø Labeling
Ø Weight of each item
Ø Proper place
Ø Division of store (According to type of materials)
The ex-store in charge of the factory didn’t fulfill his duties and the whole stock marinating of register has irregular entries of the consumption and arrival of the raw materials. I has firstly completed the previous register and than regulate it on daily basis.
Now the process is computerized and the MIS department maintains the consumption & arrival of raw material as well. The raw material officer issue job card for the production and than re-enter it after the production report is given , similarly the goods receive note (GRN) also entered by the same person as well as by the store in charge.
The raw martial is purchased by the purchasing manager Mr. Naseem, he search out the market and purchase as per the feasibility and capacity of the factory.
During my stay at Buxly, the factory hire a new person as store in charge and I give him proper training as per the requirement of the job.
There are a lot of problems I have to face in the store because the store persons were very rigid to maintain it , in previous the factory was in great losses by this department and bearing high prime cost. Now after the computerization and new employee the losses are expected to be low. Because the management is exerting a high check & balance in case of raw material and their uses. 

Sales & Marketing
The key department for any organization is its sales &marketing department and it serves as the ears and eyes of the organization. They perform the key role to the growth of company market share. 
I have spend a couple of weeks in general sales and marketing department. It is the first time that Buxly has acquired a Marketing person for the promotion of its product ranges.
First of all I would like to state that there are three types of paints in which factory deals and they are given as
1- Enamel
2- Distemper
3- Epoxy
These three types of paints are classified into two major categories
Ø Decorative Paints
Ø Industrial Paints.
The whole sales and marketing department is demotivated due to hectic and undefined work loads. The sales department has very poor facilities of transport and communication. They have to perform a lot of irrelevant jobs along with the sales. The repute of Buxly is going to be destroyed due to not fulfilling the small orders. These customers are than transferring to other brands due to less effective production people. The sales people has to ran after the production managers and along with the taking of orders.
The hierarchy is shown as 


The all sales representative are given daily assignment as per the direction by the general manager to the regional manager and than they decide their daily visits to customers.
The performance of the sales employees is daily evaluated by the regional sales manager and is being reported to the general manager. Senior sales manger has divided the all four sales officers in to different areas of consideration as industry, commercial, government bids and tenders, decorative etc. the sales officers of Buxly are very kind to tell the process and procedure and they guide me about the process of order taking to the collection of the money. 
Their procedure starts from the order copies , usually there are four copies of order taking,
Ø One copy to the customer 
Ø Second to the production
Ø Third to sales officer
Ø Billing copy
The commercial order lead time is 2-3 weeks and for the industrial one there are 4- weeks.
The sales force of Buxly goes through the market as per their specified areas. Buxly has very small marketing and promotional activities to permote its wide range of products. The orders are taken on the basis of personal relations and on the behalf of very sound good will in the market of old customers and specially in the field of government and defense departments.
Up till now the sales force has dual nature of job that is to sale and market the product as well. 
Burt by the hiring of an experienced marketing person the administration is planning to go for the marketing activities. 
The major loss which is going to be occur is the continuous reduction in the commercial as well as the industrial customers due to very slow and less effective production & promotion processes.
Although factory have still potential industrial as well as commercial buyers, but the thing is that firm is loosing the customers not on the basis of quality but mismanagement of the key resources of the organization and by this they are loosing their valuable customers. 


Buxly has distributed the whole country in to three regions and each region has its own regional manger and sales force. 

The regions are

1- South 
2- North
3- Central
The regions send their report and have their own targets in a specific time periods and also they monitor the activities of sales force and demand of the customers for the paints.
The paint market for Buxly is very wide but due to lack and deficiencies it is lagging behind to the other companies. The customer are satisfied by the product it self but the problem exist in the organization itself. The main and key factor in the sales is that our employee should be motivated and trained for the work they are performing. But in case of Buxly except three employees all are having very less knowledge of the paints and even sometimes they blank in telling the price of the products.
The sales people have no technical or any task force which can give different schemes of colors to the customers. Even there was very short number of color cards for shade matching and to give some material to customers.


Market of paints has been a challenging job in one country because people consider that paint is a decorative item, Even today it is considered as a luxury and not valued as a protective element. The greater portion of our population lives in villages, where people are illiterate and consequently lacking the knowledge of paints. Even in cities people rely upon painters and painters have their own technology and preferences. In spite of all these draw backs in the market many companies in the field of paints striving, with the help of their marketing activities, to gain high business. They have realized that the market is growing with substantial potential as a consequence of increasing literacy rate, standard of living, infrastructure development, industrial growth and more and more emphasis on Defense Strength.
The above-mentioned phenomenon enforced Buxly to divide its market of paint consumers into four categories.
· Govt. & SEMI-Govt. CUSTOMERS.
General Consumers:
This is the most important category of consumer because it constitute the major portion of BUXLY’s sales. This category use decorative items for the use in decorating their houses, shops etc.
Construction Consumers:
These categories of consumers include contractors, Civil Engineers, Associates, Construction Companies, Builders etc. These type of consumers buy paint mainly for the decoration of Plazas, Apartments and flats which are build for commercial or residential purposes. Price Considerations and Discounts systems of more importance under this category. Under this type of customers Buxly is selling to A. Karim & Sons, Hussain Constructors, Rabia Project Construction, Imperial Constructors, Chapal Builders and may other small contracts.

Competitors Of Buxly Paints Limited:
Buxly Paints Limited is encountering these types of compassion that very in their degree of intensity. These categories of competition are described below.
· Foreign Competitors
· Inter-Industry Competition
· Intra-Industry Competition
Buxly Paint Limited is facing severe kind of competition with the Multinational Giants like ICI, Berger and the every day emerging mushrooms in the Industry. The 80% of volume of paints sold in the country is from these mushrooms while the rest of 20% is sold by the so-called organized sector that also includes Buxly. The multinationals with their unlimited resources & diversified strategies making the survival of Buxly more difficult. On the other hand the substantial increase of small manufacturers of paints is also affecting the prosperity of the company because of the following facts: 
The mushrooms are doing business under the fixed tax structure but their level of operating activities is very high as a result they have to bear low cost of production and consequently their prices are very low.
Peculiar Brands Of Buxly:
Following are the same of special most commonly & Renowned and Purchased brands of Buxly.
· 413 Synthetic Enamel
· Weather Fighter
· Plastic Bound Distemper (PBD)
· 413 Silk Enamel (Mat Finish)
· 413 Acrylic Emulsion
· Buxtone Plastic Emulsion
As it is mentioned that there is no marketing and promotion activities which can be mentioned in the report. But now the company has hired a new and experienced person as a marketing manager. The GM marketing Mr.A.R.Moosa has guide me properly and he is planning for the promotion activities in the coming fiscal year.

Financial Analysis 
The financial analysis of the factory presents us the true picture of the factory and its performance regarding the utilization of resources, worth and its profitability.
We will first analyze the ratios of balance sheet and income statement items of the factory financial records.
Ratio Analysis

The ratio analysis of the last two years of the factory financial resources ids follows as 

Name of ratio 1999 2000
Current ratio 1.275382 1.064952
Quick ratio 0.860441 0.692923
Average collection period 94.36674 79.2276
Account receivable turnover 3.814903 4.543871
Inventory turnover 5.024244 4.820792
Fixed asset turnover 7.44675 5.990286
Total asset turnover 1.548095 1.454376
Debt ratio 0.983371 1
Long term debt to capitalization 0.03537 0.035176
Debt to equity 2.161311 3.068889
Time interest earned -0.31392 -1.78428
Gross profit margin 0.017665 0.13595
Operating profit margin -0.0112 -0.06808
Net profit margin -0.03052 -0.09576
ROI -0.04725 -0.13928
Return on equity -0.15191 -0.5667
Earning per common share -3.94666 -9.39748

Short-term liquidity analysis is especially important to creditors, suppliers, management, and other concerned with the ability of a firm to meet near term demands for cash. The evaluation of Buxly Paints we observe that the current and the quick ratios have shown a downward trend as we can see from the ratios calculated on the page annexed. It seems that the financial condition of the company is getting worse day by day. We observe that the liquidity of the firm is also decreasing with the passage of time. When we compare its performance with the previous year we observe that the short-term liquidity has shown a considerable decline. But along with it we observe the improvement in the collection period of the firm, which has decreased from 95 days to 79 days, which is a considerable improvement with respect to the collection procedures of the firm. So with this we observe that the account receivable turnover is also improving which is a healthy sign for the company. Well we observe that the inventory turnover has decreased with the passage of time, which is also not good for the company. If the situation is such and company is in production we see that the company is piling its inventory. This has also a harmful effect on the current ratios of the company too. As the current ratio will consist of a major portion of the inventory which is also not a very good cash equivalent. As it requires some time to convert into cash. 
We observe that the debt ratios are also not showing a favorable picture as we see that the debt to equity ratio has shown an increase in it. This increase is also considerable. This shows that the risk of the organization is increasing day by day. We need to know the reason of this increase in the debt. We need to observe that is it that the firm is covering the fixed charges efficiently. Long-term debt to capitalization ratio is not showing a marked increase. The bad thing is that the times interest earned are going in negative with the passage of time. So we see its really in hot water. What the company is doing generating short-term debts with the help of its liquidity. So we do not see a considerable change in the long-term ratio. Well a negative value of the interest coverage ratio is showing a big question mark to its future. 
Although we see that the gross profit has increased with the passage of time but the operating profit has decreased. Which shows that that company expenses has increased. That gross profit margin is also not improved too much. So what we observe in this case is that company is going through a critical time. Well all the other profitability ratios, which I have calculated is growing in the negative direction showing a poor performance of the company. Well one more thing is that company has not paid dividend so dividend ratios could not be calculated. The return on investment and equity both are negative showing it not a good venture to invest in. 
Well observing the financial conditions of the firm it seems that the only source through which it could generate finances is short-term finances and that too is a difficult job. Well the investor would not be interested in a company who is showing negative returns and at the same time not paying any dividends. The long-term borrowing also seems impossible. So the suggestion for the company is to merger with another company or another company could acquire this company. 
Over view of company financial position
This 47 years old company of SITE, Karachi, has witnessed changes at the highest level of its hierarchy and reduction of "quite sizeable staff". The idea that lean organisation will improve profit ability has been popular management concept in the country. 
During the year under review, the company's sales at Rs 141.31 million gross profit at Rs 19.21 million has registered decline by 24%, and 42% respectively compared to the preceding year's. The company turned operating loss at Rs 9.62 million (1998-99: Operating loss at Rs 2.08 million) and loss after taxation at Rs 13.53 million 1998-99: Less at Rs 5.68 million). The accumulated loss has wiped out its capital. But there is negligible amount of long term debt and current ratio reflects easy liquidity position. The share place has gone below par after remaining much above par value during the last half of last year. The directors lamented, "The company has tried its utmost to persuade the government to finish off double taxation but has failed so far.
There has been across the board changes at the highest echelon of the hierarchy of Buxly Paints Limited. Wasim Alam Khan resigned from the post of the Chief Executive and in his place Yousuf Babar Khan was appointed as new Chief Executive. Nasim Alam Khan Chairman and founder director resigned and Wasim Alam Khan was appointed as Chairman. Sheikh Ejaz Majid was appointed director in place of Nasim Alam Khan. Abdul Qadir H. Moochhala, resigned and Muhammad Saeed was appointed as director. 
The company is the manufacturer and marketer of paints, pigments, protective surface coatings varnishes and other related products. 
Buxly Paints Limited was incorporated 47 years ago in the province of Sindh. Its manufacturing facilities were set up at the prime location of the oldest industrial zone of the country at SITE, Karachi. Therefore the factories of the company are located on the prime and valuable real estate. Its fixed assets were re-valued twice once in 1976 and the other time in 1989 by professional and reputable values. The amount of Rs 24.34 million has been booked in the account of Surplus on Revaluation of Fixed Assets. 
The shares in the company are quoted on all stock exchanges of the country. At present, its 10-rupee share is quoted at Rs 8.25 at 17.5% discount to its par value.
The price has dipped below par value with the arrival of the new millennium as during the last half of the preceding year 2000, the price band had remained between the high/low of Rs 13 and Rs 11 per share. The stock quotation appears to be barometer of the financial position of its balance sheet. 
During the year under review the company has turned higher loss at Rs 13.53 million compared to the preceding year's. Compared to the paid up capital of Rs 14.40 million its accumulated losses swelled to Rs 14.86 million leaving an impaired equity base of in negative figure of Rs 0.46 million. 
The total asset base suffered contraction to Rs 97.16 million from previous year's figure of Rs 118.27 million. 
OVERVIEW (January , 2000) 

This 47 years old company of SITE, Karachi, has witnessed changes at the highest level of its hierarchy and reduction of "quite sizeable staff". The idea that lean organization will improve profit ability has been popular management concept in the country. 
During the year under review, the company's sales at Rs 141.31 million gross profit at Rs 19.21 million has registered decline by 24%, and 42% respectively compared to the preceding year's. The company turned operating loss at Rs 9.62 million (1998-99: Operating loss at Rs 2.08 million) and loss after taxation at Rs 13.53 million 1998-99: Less at Rs 5.68 million). The accumulated loss has wiped out its capital. But there is negligible amount of long term debt and current ratio reflects easy liquidity position. The share place has gone below par after remaining much above par value during the last half of last year. The directors lamented, "The company has tried its utmost to persuade the government to finish off double taxation but has failed so far."
There has been across the board changes at the highest echelon of the hierarchy of Buxly Paints Limited. Wasim Alam Khan resigned from the post of the Chief Executive and in his place Yousuf Babar Khan was appointed as new Chief Executive. Nasim Alam Khan Chairman and founder director resigned and Wasim Alam Khan was appointed as Chairman. Sheikh Ejaz Majid was appointed director in place of Nasim Alam Khan. Abdul Qadir H. Moochhala, resigned and Muhammad Saeed was appointed as director. 
The company is the manufacturer and marketer of paints, pigments, protective surface coatings varnishes and other related products. 
Buxly Paints Limited was incorporated 47 years ago in the province of Sindh. Its manufacturing facilities were set up at the prime location of the oldest industrial zone of the country at SITE, Karachi. Therefore the factories of the company are located on the prime and valuable real estate. Its fixed assets were re-valued twice once in 1976 and the other time in 1989 by professional and reputable valuers. The amount of Rs 24.34 million has been booked in the account of Surplus on Revaluation of Fixed Assets. 
The shares in the company is quoted on all stock exchanges of the country. At present, its 10-rupee share is quoted at Rs 8.25 at 17.5% discount to its par value. 
The price has dipped below par value with the arrival of the new millennium as during the last half of the preceding year 2000, the price band had remained between the high/low of Rs 13 and Rs 11 per share. The stock quotation appears to be barometer of the financial position of its balance sheet. 
During the year under review the company has turned higher loss at Rs 13.53 million compared to the preceding year's. Compared to the paid up capital of Rs 14.40 million its accumulated losses swelled to Rs 14.86 million leaving an impaired equity base of in negative figure of Rs 0.46 million. 
The total asset base suffered contraction to Rs 97.16 million from previous year's figure of Rs 118.27 million. 
But there are redeeming factors also as there are negligible figures in the account of long term debts in both the years under comparison. 
Moreover the current ratios in the years under comparison were at 1.47%/1.25 which are much above the benchmark ratio of "one". 
Production declined by 24% to Rs 1.449 million litres from the previous year's figure of Rs 1.909 million litres.
The accelerated slide in the profitability requires planned recovery strategies. Some glimpses of remedial measures are apparent in the Directors' Report, such as efforts to reduce expenses including separation of "quite sizeable staff".


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