MA Rafhan

The leading corn refiner of Pakistan, Rafhan Maize Products Co Ltd is the premier provider of
agricultural-based products and ingredients in Pakistan. The company has a market cap of over
Rs 71 billion and is on the KSE100 list. Rafhan Maize has approximately above 2000 employees
Rafhan Maize is included in top 25 companies of Pakistan.
To be the premier provider of refined agriculturally based products and ingredients in the region.
Mission Statement
To grow business consistently through positive relationship with customers to attain full
customer’s satisfaction and to bring continual improvement by adopting only those business
practices which add value to our customers, employees and shareholders.
Shareholding Pattern
The pattern of shareholding indicates that majority share (over 70 percent) belongs to a single
entity the corn-refining multinational and Rafhan's parent concern Ingredion Incorporated USA.
Ingredion incorporated has strong global presence with commercial and manufacturing
operations in more than 60 countries.
Offices & Plants
Rafhan Maize has three manufacturing locations and one regional office:
Rakh Canal Plant:
Cornwala Plant:
Mehran Plant:
Regional Office:
East canal road Faisalabad (corporate headquarters& plant)
Jaranwala-Khurrianwala road Jaranwala (plant)
K.B Feeder road Kotri, Jamshoro (plant)
Finlay House I.I Chundrigar Road Karachi)
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The company processes thousands of tons of corn every year to produce high quality food
ingredients and industrial products. Rafhan maize is the pioneer in producing diversified type of
starches and sweeteners for multiple applications in more than 50 types of industries.
Current capacity of plant is 1700 tons of corn per day.
KPMG Taseer Hadi & Co. Chartered Accountants
Legal Advisor
M. Ali Seena c/o Surridge & Beecheno,
Shares Registrar
FAMCO Associates (Pvt.) Ltd
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Board of Directors
Pierre Perez y Landazuri
Chief Executive & Managing Director
Usman Qayyum
Members of Board
James D. Gray
Jorgen Kokke
Christine M. Castellano
Marcel Hergett
Zulfikar Mannoo
Mian M. Adil Mannoo
Wisal A. Mannoo
Muhammad Asdaf
Anis Ahmad Khan
Independent &Non-Executive
Chief Financial Officer
Muhammad Asdaf
Audit Committee
Zulfikar Mannoo
James D. Gray
Christine M. Castellano
Anis Ahmad Khan
M. Yasin Anwar
Human Resource & Remuneration Committee
Jorgen Kokke
Pierre Perez y Landazuri
Usman Qayyum
Zulfikar Mannoo
Shares Transfer Committee
Usman Qayyum
Muhammad Asdaf
Anis Ahmad Khan
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Products of Rafhan Maize
Rafhan Maize produces corn based high quality products and works as mother feeder to many
major manufacturing firms of the country.
Food Business
Food business consists of a unique range of Jelly, Custard powder, Ice-cream powder, Corn flour
and Corn oil.
Animal Nutrition and Health Business
The animal nutrition and health business offers a wide variety of feed ingredients including
Prairie Gold® Maize Gluten Meal, Buffalo® Maize Bran, Rafhan® Maize Gluten Feed,
Rafhan® Maize Oil Cake, Enzose® Hydrol and Rafhan® Crude Corn Oil.
Industrial Products
Industrial business consists of a unique range of unmodified and modified starches, dextrins and
blends which are marketed under the renowned trade names of Penetrose®, Amisol®, Tex-oFilm® and Coratex®.
Rafhan Maize (corn) Starches
Coragum Maize (corn) Starches
Snowflake Maize (corn) Starches
Globe Maize (corn) Starches
Penetrose Maize (corn) Starches
Amisol Maize (corn) Starches
Q-Tac Maize (corn) Starches
Tex-o-Film Maize (corn) Starches
Coratex –w Specialty Starch
Coratex –p Specialty Starch
Glugel Powder Glues
Rafhan Dextins
Coragum Dextrins
Coragum powder / Liquid Adhesives
Cerelose Dextrose Monohydrate
Rafhan Liquid Glucose
Rafhan Golden Syrup
Rafhan Liquid Caramel
Buffalo Maize Bran
Oil Cake
Mazoferm maize Steeping Liquor
Consuming industries
Textile (sizing & Finishing )
Paper (beater additive, surface sizing)
Paper , Textile ,Chemical
Paper Making &Paper Conversion
Modern Weaving
Textile Quality Finishing
Spiral Tube Winding , Paper cones and Reed
Ink etc.
Prepared adhesives
Food , Energy drinks , Pharmaceuticals, Breads
and Snacks
Syrups & Squashes and Tobacco
Food , Baking and Beverages
Cattle Feeds
Poultry feeds, Cattle feeds , Fish feeds
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Managerial and Financial Accounting in Rafhan Maize
Company is using SAP as its financial and cost accounting tool. The entire book keeping job is
done with the help of SAP.
Rafhan Maize follows following regulations while maintaining the accounting system.
Financial Accounting
 IFRS; International Financial
Reporting Standards
Managerial Accounting
 ICAP Institute of Chartered Accountants of
 GAAP; Generally Accepted
Accounting Principles
 Corporate Company Directions
 ICAP; Institute of Chartered
Accountants of Pakistan
Hierarchy of Accounting Departments
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Books, Records and Controls
The Company maintains books, records and accounts in reasonable detail which accurately and
fairly reflect all its transactions and activities.
Policy on Books, Records and Controls
It is the policy of the Company that transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting principles and to
maintain accountability for assets:
1) All funds, assets and transactions must be recorded on the books and properly accounted
2) No transaction is to be authorized or entered into:
a)With the intent to document or record it in a deceptive manner
b)To create false or artificial documentation, or
c)That creates erroneous book entries for any transaction;
3) Internal accounting controls must be sufficient to provide reasonable assurance that
transactions are executed in accordance with appropriate management authorization;
4) Access to assets is permitted only in accordance with proper management authorization;
5) The recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Importance of Managerial Accounting for Rafhan Maize
Planning department is responsible for production planning this department will predict
that how much quantity of raw material and other chemicals are required so Planning
department will consistently coordinate with other departments specially with costaccounting, procurement and production department. Following are some important
responsibilities of managerial accounting in Rafhan Maize.
1) Record of Costs: Managerial accounting is playing its role to record and control the
costs of production. Managerial accounting department notes internal costs of the
company from several points of views.
2) Help in Decision Making & Effective Management: The purpose of management
accounting in the organization is to support decision making by collecting, processing,
and communicating information that helps management plan, control, and evaluate
business processes and company strategy. Planning department gives directions to the
procurement and production department mostly relying on the information provided by
managerial accounting department.
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Major Responsibilities of Procurement Department
To purchase the right quantity of raw materials or other goods required.
To ensure the quality of purchased items are as per standard of company.
To ensure that items are purchased at the price range specified by top management.
To co-ordinate with all departments especially with production and sales departments.
To record all economic events in written form.
To provide required and relevant information to other departments e.g. economic events
information to accounts department.
Hierarchy of Procurement Department
How Rafhan Maize Maintains Inventory Stock?
Purchasing is made in accordance with required level of production. Rafhan Maize has storage
houses where corn is stored after highly quality insured process of procurement.
Inventory Management
Most of the ingredients are produced mainly from corn, hence ensuring a reliable and sustainable
sourcing of corn is essential. This involves developing long-term, mutually beneficial
relationships with growers, farmers and other commercial partners to secure sustainable supply.
Rafhan Maize maintains exemplary relationships with their suppliers and work with them to
meet the customers' requirements for traceability, quality and ethical standards throughout the
supply chain. Company sees itself on a critical place in the food security value chain.
Company is endeavoring to establish best farming practices and assist the farmers in
implementing the latest technology for increase in corn yields. Company is serving the farmers
community at grass root level and motivating and guiding them on adopting modern agricultural
techniques. Rafhan Maize has a specifically trained team on seed technologies as well as good farm
management practices. Rafhan Maize aims to pay fair price to the farmers.
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Purchasing Methods
Company uses following two methods to buy the corn.
Purchasing from market without any interaction with formers.
Purchasing directly from formers.
Purchasing Seasons
Most important raw material inventory for Rafhan Maize is corn. Corn is not available all the
time in the year so company purchases corn in two purchasing seasons.
From June till August
From October to November
Purchasing Process of Corn
to complete understand the procurement process can be divided into 6 steps.
1) Market Search
3) Bidding
5) Final Quality assurance inspection
2) Preliminary Inspection
4) Transportation to storage houses
6) Payment to Supplier
1) Market Search
At this step commission agents visit the place where grey corn is available after detailed
market search. Commission agents are appointed after checking all of their bio data and this
bio data is incorporated in the system. A supply code is issued to the appointed agents.
2) Preliminary Inspection
At this stage corn is checked to make sure that it is up to the standards of company.
3) Bidding
At this stage corn is bought in open bidding but specific approved prices and quality
according to the company standards.
4) Transportation To Storage Houses
After successful bidding the purchased quantity of corn is packed in bags and loaded into
vehicles to be transported to storage houses of the Rafhan Maize. At this stage supplier is
given access ERP (Enterprise resource planning). ERP have full details of purchased corn.
A tracking number will be issued to vehicle to keep the supplier updated. A token number is
issued when a vehicle reaches at the storage house. After gate entry the quality and weight is
measured. If quality is up to the required level then token is issued for specific godown.
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5) Final Quality Assurance Inspection
At that specific godown once again the quality and weight of corn is measured if quality is
found up to the required level then vehicle is allowed to unload the corn (if there is an issue
in quality of corn then it would be returned to the supplier).
After due documentation and accounting procedures goods receipt sheet (GR) is generated.
Cashier will made freight payment against the GR sheet. Finally the vehicle will be departed
from storage house.
6) Payment to Supplier
Before making payment several formalities are fulfilled. First of all an invoice having full
details is generated with the same tracking number which was issued to supplier in the
beginning and sent to maize procurement department. After approval by maize procurement
officer and manger maize procurement this invoice is posted in system and entry is made.
Invoice is sent to accounts department after completing all procedures then accounts
department will complete the required procedure. Then payment summary in system is
generated and finally online payment to supplier is made in accordance with credit terms,
withholding tax is payed as well in National Bank of Pakistan.
Following are few most important inventories for Other inventories which are used in
company and can be termed as direct material.
production process on minor scale and can be
termed as indirect material are following,
Certain other chemicals
Operating supplies
Stores & Spares
Packaging material
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Risks if Company Has No Raw Material Inventory in Hand
Rafhan Maize understands that if it has no raw material in hand then production process will be
stopped which will force company to incur many drastic losses which may have long lasting
Fixed costs: Production process will be stopped but company has to bear fixed costs, for
example salaries of employees, good for nothing.
Failure to Fulfill the Orders: Company will not be able to fulfill the orders of
customers in time leading to;
Revenues of the firm will be reduced which will reduce the profitability.
Earn negative word of mouth
losing confidence of customers
Inventory Management Techniques
Rafhan Maize don’t want to run out of stock of raw material inventory and at the same time
company makes sure that optimal level of raw material is purchased. For this purpose Rafhan
Maize uses both Computerized and manual techniques for inventory management
Following items inventory level is managed with
the help of SAP.
Inventory level of following items is
controlled manually.
ROH & other chemicals
Certain Operating supplies
Stores & Spares
Packaging material
SAP is developed by SAP SE which is German-based European multinational software
corporation that makes enterprise software to manage business operations and customer
relations. SAP stands for Systems Applications and Products in Data Processing. SAP by
definition is also Enterprise Resource Planning (ERP) software.
Management has set a specific target level for each inventory as soon the inventory level is
decreased then that level SAP intimates and generates the purchase requisition (PR). This is a
highly sophisticated and advanced inventory management method which is used worldwide by
many top organizations. Hence company never face the problems like inventory shortage or
excess inventory in hand which may add additional storage or administrative costs.
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Rafhan Maize uses SAP software for following purposes
Financial Accounting
Cost Accounting
Production Planning
Plant Maintenance
Sales & Distribution
Manual Control Techniques
Rafhan Maize use two-bin method to control other inventories which are used in production
process on minor scale
Two-Bin inventory control method is mainly used for small or low-value items. When the first
bin is used up, an order is made out for replenishment. The second bin contains enough quantity
of the item to last until the ordered quantity arrives.
Inventory Management Costs
Company incurs following costs in inventory management.
i) SAP maintenance cost.
ii) Salaries of employees.
iii) Inventory storage costs including utilities and warehouse maintenance and depreciation.
All of these costs and any other associated cost(s) are properly recorded in accounting
department. There is a proper check & balance system exist to control and minimize these costs
but quality assurance and fair wages rules are not neglected while trying to minimize these costs.
Major Suppliers of Chemicals
Sitara Chemical Industries Limited
Ittehad Chemicals
Olympia Chemicals Limited
Pakistan Oxygen Limited (formerly
Linde Pakistan Limited)
Major Customers
Unilever Pakistan
Bulleh Shah Packaging Pvt Ltd Lahore
Nestlé Pakistan
Mitchell's Fruit Farms Limited
Cadbury Pakistan Ltd
Best Foods Company
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Distribution Network
Rafhan uses following distribution networks to deliver the finished products to final consumer.
Direct Distribution Network; in this case goods are shipped to consumer (firms) directly
without any Distribution network but this is only for few and consumers with high demand level.
Indirect Distribution Network; in this case products are shipped to end user through
distributors or third parties.
In these case goods are shipped to consumers through distributors.
In this case goods are shipped to consumers abroad.
Inland Letter of Credit
In few cases final products are shipped to consumer through Inland letter of credit
Inland letter of credit is an obligation of the bank that opens the letter of credit (the issuing
bank) to pay the agreed amount to the seller on behalf of the buyer, upon receipt of the
documents specified in the letter of credit under domestic business transaction.
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Financial Statements
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Analysis of financial statements
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In analysis of the Rafhan Maize we observed that the top management is running the
organization by applying latest techniques and modern management style which is one of the key
reasons that the organization is becoming more profitable as EPS growth in each quarter is
visible. Organization has successfully earned the major market share. Company has a
sophisticated computerized inventory management system to make sure the protection against
inventory stock out. Rafhan has won the hearts of customers by providing them the promised
quality products. At the same time organization is taking all necessary steps to ensure the job
satisfaction of employees. Rafhan Maize is also socially responsible organization and actively
participates in charity and donation activities. Company has very positive image in the eyes of
suppliers and customers.
Suggestions for Rafhan Maize
After the analysis of the firm our group has following suggestions for Rafhan Maize,
1) To meet overall demands of customers both (domestic and foreign), company should install
power plant.
2) To meet export demand more efficiently they should expedite and expand production work on
plant in Jamshoro Sindh to reduce the transportation costs.
3) Rafhan should further improve packing of its products, to some extent it is a weak point.
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