Ahmad Fine Textile Mills ltd

Ahmed Fine Textile Mills Ltd.

PAKISTAN’S TEXTILE INDUSTRY

Everyone in the world knows Pakistan as an agricultural

country. Among all others, cotton is the major crop. This

cotton, after processing takes various forms including yarn,

fabric and other textile related products. The industry that

is engaged in this area is very diversified in nature. It may

not be wrong to say that textile quota regime has been a

blessing in disguise for the country. Keeping in view the

existing status of textile industry, it is feared that the

country may not be able to retain its share in global trade

of textiles and clothing in the free trade era, unless a very

comprehensive revamping program is undertaken on top

priority..

It may be true that the performance of local textile industry

in last five decades has been a little disappointing; the

industry still has the highest potential to play a vital role in

overcoming the key issues facing the country. To a large

extent, the Gap policies are responsible for the pathetic

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performance of textile industry, but the players are equally

responsible for the imbalance growth, production of coarse

counts and grey fabrics and low unit price realization. The

result is, despite being the fourth largest cotton producing

country, Pakistan's share in global textiles and clothing

trade is less than 3%.

In the spinning sector, at present there are about 9

million spindles and over 150,000 rotors installed.

However, the average capacity utilization has always been

around 75 per cent. The low capacity is mainly due to

intermittent closure of mills because of inadequate cash

flow rather than scarcity of cotton. The spinning capacity

has increased mainly due to area and industry specific

incentives. This proliferation has resulted in inefficiency

and uneven playing field. Most of the units, established

since early nineties are economically unviable and have

survived only due to the incentives. The bulk of the

percentage of yarn produced by these mills fall in the

coarse counts category.

Weaving at mills level has experienced constant decline.

At present less than 3 per cent of total fabrics are produced

at mills and remaining quantity is produced on power

looms. The fabric produced on powerlooms is much inferior

in quality compared to the cloth produced on shuttle less

and air jet looms. This handicap does not allow the made-

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up manufacturers to produce superior quality garments.

Therefore, despite enjoying the highest ceilings in certain

categories, export proceeds have remained low. In case of

Pakistan, the average unit price realization is below the

world average. Like weaving, knitting is also mostly

confined to smaller units operating in the unorganized

units. This has been due to high duty applicable on shuttle

less/air jet looms — although these looms are not

manufactured in the country.

PROBLEMS & PROSPECTS

Textile industry has always been the pillar of Pakistan

economy contributing substantially to Government Revenue.

It also has a dual linkage and significance. As a major

consumer of domestic cotton it provides a market for a

leading cash crop and it thus has a critical influence on

growth and productivity in the agriculture sector. In the

value added manufacturing sector, the industry has a

paramount position. Textile industry constitutes the

foremost sector of manufacturing in Pakistan as it

employees nearly 40% of the industrial forces and generates

the 64% of the total foreign exchange earning. And

contributes almost 20% to the total value added in a large

scale manufacturing it represent 14.2% of the total export

of the raw cotton Pakistan ranks fifth in the world in the

production of the cotton yarn and occupies 1st position in

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the export of the cotton yarn. While the industry occupies

6th position in the production of the cotton cloth and 5th

position in the export of cloth. The performance of the

textile industry therefore has a vital impact on the over all

growth and the development of the economy.

GROWTH OF THE TEXTILE INDUSTRY IN PAKISTAN:

Cotton textile industry has made a spectacular progress

over the past 51 years. At the time of independence o the

country only two textile mils were in existence, one Sutlej

Cotton Mills Ltd. in Okara, Punjab, the other Lyallpuor

Cotton Mills at Lyallpuor, now Faisalabad. Both the mills

were owned by the renowned industrialist of the undivided

India. These units were self contained having all the

departments, such aspiring weaving, dyeing, finishing as

well as procession & printing, although the printing, of

textiles was not as much developed as it is now. After the

independence the process of development of the industry

started picking up. In the year 1948, one more textile

mill which was set up by Valika"s was inaugurated by the

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Quaid-e-Azam. In 1949 the country had only 78000

installed spindles and 3000 looms. The organized

development of cotton textiles was started in late fifties with

the 1st five-year plan.

At present there are 503 mills installed in the country

with an installed capacity of 8.7 million spindles and 14000

looms. Out of 503 mills installed in the country, 418 units

are engaged in spinning and 32 units in waste spinning.

Both cotton yarn and cotton cloth may be considered

as the export oriented industries, since the export shares.

As far as the yarn is concerned, this represents an

important structural weakness of the textile industry as we

are unable to utilize domestically a larger share of our yarn

for production of higher value added textile products and

thus loose out to our competitors at the higher end of the

world textile market. Pakistan's share of world cotton

production has increased from 8.57% in 1986-87 to 9.2 % in

1996-1997.

Pakistan is the world's fifth leading cotton production

nation after China, USSR, USA and India. In terms of yield

per hectare. Pakistan has almost caught up with American

but ranks 15th in the world with it are per hectare

production of 6.2 Kgs. Domestic consumption of raw cotton

has been rising annually almost 75% of the production is

locally consumed and raw cotton exports have fluctuated

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widely. This year only 0.7 million tons of raw cotton are

planned to be exported.

COMPONENTS OF TEXTILE INDUSTRY:

Textile Industry adopts different procedure, which has

different phrases. When the cotton, is purchased from the

farmers. This process starts and when cloth is made and

ready to sale, It ends. Between these ends, there is a long

panorama and different features of this panorama are

described below:

PROCESS OF GINNING THE COTTON

It is the first steps, in which the seeds are separated

from the cotton. The separated cotton is classified

according to its quality and standers. Finally it is tied up in

to bales to bring them for next phase. The machines that

separate seeds can be used to prepare oil, feeds etc.

SPINNING PROCESS:

When the cotton bales reached the spinning mill, these

bales are opened and cotton is torn in to small pieces. This

cotton is finally prepared as thread cones of different

quality.

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The different departments play an important role in the

progress of conversion such as blow room, carding section,

simplex section, and ring section and auto cone section. A

detail report of these sections will be provided in the later

discussion.

WEAVING PROCESS

It is the process in which cloth is prepared from

thread. The machinery, which performs key functions in

specified process, is called loom. These looms are used to

prepare the cloth.

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COUNTRY RANKING ACCORDING TO THE

PRODUCTION OF COTTON

RANK 2000-2001 2001-2002 2002-2003 2003-2004 2004-20052005-2006 2006-2007

1 CHINA CHINA CHINA CHINA CHINAUSA USA

2 USA USA USA USA USACHINA CHINA

3 INDIA INDIA INDIA INDIA INDIAINDIA INDIA

4 PAKISTAN PAKISTAN PAKISTAN PAKISTAN PAKISTANPAKISTAN PAKISTAN

5UZIBEKISTA

N

UZIBEKISTA

N

UZIBEKISTA

N

UZIBEKISTA

N

UZIBEKISTA

N

UZIBEKISTA

N

UZIBEKISTA

N

Source: APTMA website

COUNTRY RANKING ACCORDING TO

THE PRODUCTION OF YARN

RANK 2000-2001 2001-2002 2002-2003 2003-2004 2004-20052005-2006 2006-2007

RANK

1 CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA

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2 USA INDIA INDIA INDIA INDIA INDIA INDIA INDIA

3 INDIA USA USA USA USA USA USA USA

4 PAKISTANPAKISTA

N

PAKISTA

N

PAKISTA

N

PAKISTA

N

PAKISTA

N

PAKISTA

N

PAKISTA

N

5 INDONESI

ABRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL

PRODUCTION OF YARN: PROVINCE WISE

In ‘000’Kgs

Period PUNJAB SIND NWFP Balouch-

istan

TOTAL G %

1988-89 419,803 305816 26777 15038 767434 12.03

1989-90 532,989 342522 27877 21994 925382 20.58

1990-91 626,978 376794 26405 25051 1055228 14.03

1991-92 734927 398344 28478 26521 1188270 12.61

1992-93 823961 354643 27418 28517 1234539 3.89

1993-94 1070422 347375 47363 33788 1498948 21.42

1994-95 1020640 315258 44969 32781 1413648 -5.69

1995-96 1100914 324152 47931 32247 1505244 6.48

1996-97 1095740 332547 65879 36689 1530855 1.70

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1997-98 1100061 336965 68021 37648 1542695 0.77

AHMED FINE TEXTILE MILLS LIMITED

STATUS

The Company is limited by shares incorporated in Pakistan

on December 13, 1989 under the Companies Ordinance,

1984 with an Authorized Capital of 10000000 Ordinary

Shares of Rs. 10/- each i.e., Rs. 100000000/-. The Issued,

Subscribed and Paid up Capital of the Company is 3800000

Ordinary Shares of Rs. 10/- each full paid in cash i.e., Rs.

38000000/-

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NATURE OF BUSINESS

The Principal Business of the Company is Manufacture and

Sale of Yarn and Cloth.

OFFICES

Head Office of the Company is located at Ist Floor,

International Plaza, Bohra Street, Multan Cantt.

Export office of the company is basically in Karachi but

some little work is also done here in head office.

Sub offices:

Located at 35-km, Multan- Bahawalpur road, near

Adda Basira, District Multan (weaving unit)

Located in Rahim yar khan (Spinning unit)

Located in Qadirpurrawn (weaving unit) under

construction.

AUDITORS

M/S M. Yousuf Adil Saleem & Company, Chartered

Accountants, a member of HLB International, a world wide

organization of accounting firms and business advisers.



2nd Floor, 6-Commercial Plaza Opposite Civil Hospital Abdali

Road, Multan.

MANUFACTURING UNITS

The Company has three manufacturing units, one is

spinning unit and two are Weaving units.

Spinning Unit:

Spinning unit of Ahmed fine textile mills is in Rahim yar

khan.

Installed capacity 17280

Spindles

Count range Ne 8/1- Ne

60/1, TC,

CVC Yarns, Mélange

yarns.

Brand name DOUBLE

DELIGHT

# Of Shifts per day 03

# Of Working days 365

Installed Capacity after conversion

Into 20/s count kgs 5632450

Actual production of yarn after

Conversion into 20/s count kgs 7626423



MACHINE MAKE MODEL # OF

MACHINE

BLOW ROOM TRUETZSCHLER 2

Lines

Germany

4 Scutchers

CARD CROSOL MK-4

20

England MK-5

04

DRAWING TOYODA Japan DYH-500-C

09

TOYODA Japan DT-110

03

RIETER Switzerland RSB D 30

07

LAP FORMER TOYODA Japan SK-4 A

01

COMBER TOYODA Japan CM 10

06

SIMPLEX TOYODA Japan FL-16

06

RING FRAMES

14400 SPINDLES TOYODA Japan RY-5

30



2880 SPINDLES TOYODA Japan EJM-128

06

AUTO CONERS MURATA Japan 7-II

06

7-V

02

AIR CONDITIONING S.T.L Pakistan

05

GENERATORS

GAS WAUKESHA USA VHP-7110G

03

LABORATORY

USTER TESTER USTER Switzerland UT4-SX 01

RAW COTTON CHINA Y-101

01

Weaving Unit:

Ahmed fine textile mills has two weaving units.

Weaving unit of Ahmed fine textile mills is in District

Multan.

Installed capacity 116 AIR JET LOOMS

Fabric range Twills, Satins/

Stripped Satins,

Percales Sheeting,

Poplin, Canvas,



Stretch Twill/ Poplin,

Double Pick

Fabrics, Ottomans,

Bull Denim.

WARPING

MACHINE

Make Benninger

Swiss

Creel Size 1080

Head Stock 2400 mm

Speed ( m/min ) 600 to 1200

Year of Manufacture 2000

Yarn Type CT, PC, CVC,

etc.

SIZING MACHINE

Make Benninger-Zell

Creel Size 32

Head Stock 4000 mm

Computerized Sizing

Yarn Count 6 to 100

Yarn of Manufacture 2000

Size Boxes 2( with

prewetting system)

Cylinders 14

AIR JET LOOMS TOYODA

JAPAN



Make JAT-610 JAT-610

JAT-710

Looms 72 24

12

Width 190 cm 340 cm

340 cm

Speed 800 500

550

No. of frames 07 07

10

Salvage leno or

truck-in

Fabric Construction light &

medium weight

AIR COMPRESSOR ZR 355 MAX PRESSURE 10

BAR

Air Dryer MD 1000

Make Atlas Copco

Belgium

AIR CONDITIONING

Make Luwa

Switzerland

No. of units 03

INSPECTION FRAMES



No. of frames 80’’

134’’

12 04

ROLLING MACHINE

Machine

Max. roll size 400 kg. or 1

meter diameter

(Jumbo

rolls)

GENERATORS

Diesel CATERPILLAR

USA.

L-7052G

Another weaving unit of Ahmed fine textile mills is located

at Qadirpurrawan, District Multan. This weaving unit is

under construction & will be start at the end of this year.

FINANCIAL YEAR

Financial Year of Company starts on Ist October and lasts

till 30th September.

BANKERS

Muslim Commercial Bank Limited.

Habib Bank Limited.



Askari Commercial Bank Limited.

Bank Al-Habib

Mezan Banks

United Bank Ltd.

Standard Chartered Bank

Bank Al-Falah

PRODUCTS

Major Products of the Ahmed fine textile mills are:

Spinning division

Cotton Carded/ Combed Yarn

Supima/ Giza Cotton Yarn

Plied Yarn Two for one Twisted

CVC, T/C Yarn

Core Spun Yarn with Lycra

100% Polyester Yarn

100% Rayon Yarn

100% Acryllic Yarn

Polyester Rayon Blended Yarn

Polyester Acryllic Blended Tarn

Melange Yarn

Model/ Tencel Yarn

Slub Yarn

Weaving division

Twills

Satin/ Stripped Satins



Percals

Sheeting

Poplin

Canvas

Stretch Twill/ Poplin

Ottomans (Double Pick)

RAW MATERIALS

Raw materials of productions are:

Ginned Cotton

Polyester

Yarn.

WORK FORCE

Company includes a lot of skilled and unskilled workers.

Almost there are 800 skilled and unskilled employees.

PORTION OF EXPORTS

The company exports much of the production:

90 % export

10 % local



MISSION STATEMENT


MISSION STATEMENI


According to customer demands, produce superior

quality yarn in order to face the competition in the

international market. But at the same time taking

care of their employees, suppliers, shareholders and

society as well.

PURCHASE DEPARTMENT

The purchase department is divided into two categories,

cotton purchase department and store purchase

department.



COTTON PURCHASE DEPARTMENT

Cotton purchase department is most important department

in textile industry. Quality of yarn depends upon cotton that

has been purchased. It becomes most important when there

is business of export. There is no question of compromise on

quality. Because your minor mistake may result in huge

losses. Moreover you will loss your credibility. From

director to cotton selectors all are involved in cotton

purchase process.

PURCHASE PROCESS:

The following steps are involved in the purchase of raw

material i.e. cotton.


PURCHASE DEPARTMENT

COTTON PURCHASE DEPARTMENT

Demand of purchase from mill

Purchase Requisition

STORE PURCHASE


VISIT OF COTTON SELECTORS

The cotton selectors of AFT visit the cotton ginning

factories. Cotton selectors may visit the factories on their

own behalf and some times the cotton factories call them.

Their visits are very important because purchase process

starts from here.


Sample from different suppliers and

quotations

Sample TestingDecision-making

Agreement with the Party

Receiving

Writing delivery order for factory

InGate pass + D.O + Purchase Invoice +

Purchase Requisitions are supplied to accounts

department


SELECTING THE SAMPLE

Samples are selected from huge amounts of cotton. Samples

are taken from different suppliers. These samples are then

tested. The most suitable sample at lowest price is selected

for Purchase of cotton.

As there is centralized management system so the Director

himself takes the decision of selection and purchase of

cotton. In other words Director is final authority in making

decision.

STORE PURCHASE DEPARTMENT

Stores Incharge heads the store purchase department. The

setup of purchase department is as under:

Director

Purchase Officer

Assistant Purchase Officer

Purchase Clerk

The store purchase department is responsible for the

purchase of items like

Spare parts of machinery, store and Packing material

spares, electric items, oil and lubricants, Stationery items,

Building Material, and General Store,



DOCUMENTS

Demand Requisition.

Invoice of Purchase

Delivery Order

In Gate Pass

PROCEDURE

The following is the procedure for local purchase

department.

The purchase department receives the demand

requisition from store in charge at store at mills this is

in fact an intention or requirement of commodities at

mill

The purchase demand requisition contains a full detail

of quality and quantity of commodities required. It also

contains price detail of goods purchased previously

The purchase department on the basis of indent does

an inquiry for rate from at least two suppliers from

approved suppliers list.

After inquiry Purchase Manager discusses with

Director for approval of rate and other necessary

requirement.

After the approval the Purchase Department purchases

the items from suppliers and sent them to the mill with

three copies of delivery orders



In case of no rejection of items store in charge send

one copy of delivery order back to the purchase

department along with one copy of In Gate Pass. Store

in charge also keeps a copy of delivery order and in

Gate Pass for his own record.

In case of rejection of items store in charge sends all

copies of Delivery Orders with items back to the

purchase department at Multan Office of AFT.



ADMINISTRATION DEPARTMENT

This is very important department of any organization. This

department has to administer all the operations of the

organization. The head of this department is Administration

manager. There are some sections of this department.

Labor office

Security Guard office

Gate office

Time office

The functions of each department are:

LABOR OFFICE

This office has been setup to deal with all the matters that

are related with labor. The head of the department is

responsible to resolve all the disputes, conflicts,

misunderstanding and any other kind of matter, which arise

from time to time with the labor and the immediate

supervisor or with any regulations of the labor department.

Usually this department is required by the Govt. of Pakistan.

Duties of labor officer are:



Inform about the legal requirement concerning the

labor and company affairs.

To satisfy himself regarding payment of bonus,

gratuity, and other benefits to labor and to keep their

morale and motivational level high.

He should keep his knowledge up to date regarding the

rules and regulations of the labor department.

SECURITY GUARD OFFICE

The main objective of this department is safe handling of

the goods from/to the mill premises. There are some more

responsibilities of the security guard officer.

Any outsider can’t come in the mill premises without

the permission of security guard.

Whenever some one want to enter in the mill that

guard contact with authority to grant permission to

enter into the mill.

He can check each and every person before coming in

or going out of mill gate for security purpose.

Security guard officer is guardian of the every thing the Mill

premises.

GATE OFFICE

This office has been made to keep the record of each and

every thing coming into and going out of the mill gate.

For this purpose, gate office clerk maintains two types of

registers called:

Out ward going pass register



Inward going pass register

When thing come in to the mill i.e. raw material, stores

supplies etc. a document named as I.G.P is made in which

information like date of supplies, description, quantity of the

material and any other remarks are written.

In the case of out going a document is used for this purpose

is known as O.G.P. O.G.P is prepared for out going thing.

TIME OFFICE

Some key activities of time office are:

This office keeps and maintains the time record of all

the workers on time card and pay register for the final

costing of the workers salaries.

It keeps the record of the attendance which is used to

calculate the salary of the employee paid to him/her on

monthly basis.

It keeps also the record of overtime, leaves. (# of days

worked of all the workers and then calculates their

overtime on the basis of the basic salary of each

worker.)

It keeps the record of Gratuity, Bonus.



IMPORT DEPARTMENT

AFT has also an import department. The import department

is responsible to import those items, which are not available

in Pakistan. The structure of this department is as under:

PROCEDURE

Senior Manager is responsible for import of machinery,

equipment, spare parts, raw material, etc.


Chief Executive

Director

Senior Manager Import

Assistant


An indent for import of item after the approval of Chief

Executive is sent to import department.

The Senior Manager Import selects a subcontractor from

approved suppliers list.

In reply, a quotation from the subcontractor is

received .A copy of quotation is sent to concerned

department for evaluation and checking of specification.

The received items are sending to the mills where these

are opened. The items are checked against quotations. In

case of any damage, the import department is informed

immediately. Import department do the necessary

arrangements for survey of goods from insurance

agencies

IMPORT DOCUMENTS

There are different documents are used when we are going

to purchase or import we required.

Performa invoice

Open bond manufacturing certificate (OBM)

Form I

Importer’s certificate

Bill of entry

Invoice

Air way bill

PERFORMANCE INVOICE



This invoice is made by the indenture the goods and their

particulars, the organization is demanding. It tells the

importer about the price, payment term and conditions.

Performa invoice consist of:

Exporter’s name & address

Importer’s name & address

Description of items

Quantity

Unit price

Amount

Terms & conditions

Country of origin

Deliver date

Mode of payment

OPEN BOND MANUFACTURING CERTIFICATE (OBM)

Govt. gives some incentives to the importers. It is only for

the goods, which are not manufactured in the local market

and must be imported.

According to this incentive, when importer import the

goods, then the Govt. does not receive import duty on these

goods,

FORM I

Form I is an application for permission under the foreign

exchange regulations act 1947 to purchase foreign



exchange for payment of imports. In this form, the importer

declares:

That mentioned payment is due and that he has not

already obtained exchange for payment for imports nor

he has made any other application for this purpose.

That amount of foreign exchange mentioned

represents the correct prevailing market price for the

goods on the date of contract in the exporting country.

That he is either connected with the exporter abroad

directly nor indirectly nor does he has financial or

other interest in the exporters.

IMPORTER’S CERTIFICATE

The importer’s certificate, a valid import license registered

with the State Bank of Pakistan covers the imports.

A part of this form I is completed by the authorized dealer

who certificate that the statements made by the applicants

in the form are to the best of its knowledge correct and it

has seen documentary evidence in support thereof.

The dealer also certifies that the remittance has been made

in accordance with method of payment as per existing

exchange control regulations.



BILL OF ENTRY

This bill of entry is just like shipping bill. This is used for the

clarification purpose. With the help of this document, import

department got the goods cleared from the customs. It

carries all the information about:

The importer

Letter of credit (LC)

Freight

Goods(their price, units, weight, package)

Shipment detail

Sales tax, income tax, custom & excise duty.

INVOICE

When exporter negotiate the documents, he sends invoice to

import department that specifies

Goods imported

Air freight & forwarding charges

Port of destination

Payments (in importing currency)

Type of packing



AIR WAY BILL

When goods are sent by ship, bill of lading is made. When

the goods are sent by air, air way bill is made:

Air port of destination

Flight/ date

Amount of insurance

Handling information

# of pieces of goods

gross weight & net weight

rate/charge

nature & quantity of goods

MARKETING MIX Marketing mix is the set of marketing tools that the firm uses to get

its marketing objective in the target market.

PRODUCT

AFT is dealing in the textile area, the products, which the

AFT is manufacturing, is the yarn and the grey fabric. AFT

is producing the best quality yarn there and the different

types. The construction of the grey fabric differ due to the

differ in the quality of the yarn. There are counts.



AFT produces the yarn of different counts. From 1 count to

20 count yarn& above, according to the specification of the

customers.

AFT exports about 95% of its produce to the foreign

markets. It exports to the Europe, Asia& the other

neighboring countries. Due to the spinning unit, AFT has an

advantage in the weaving; that they use their own yarn in

the manufacturing of the grey fabric also has the different

quality constructions. The combed & the carded yarn. The

combed is the yarn, which is more refined on compared to

the carded.

The products are produced according to the specification of

the customers.

AFT also sells & purchases the products from the local

market to fulfill its orders.

These products are building the image the progress

and developments of the organization.

PRICE

PRICING OBJECTIVES

The obvious pricing objectives, of AFT.

Maximization of profit

To achieve the target return and targeted sales.

Maintain the market share.



PRICING METHOD

The pricing method AFT is adopting is profit based. The AFT

policy about pricing is that the profit should be reasonable.

And also they keep in mind the competitors because they

are also providing the products at the competitive rates.

Fixed cost

Variable cost

The total cost is calculated. While all the expenditure

related to the products production are added. The total

expenditures are divided by the production. Their per unit is

obtained, also a margin is added.

FIXED COST

Fixed cost in value, the cost related to the machinery.

Building cost.

Electricity change.

Salaries & wages

Insurance expenses

Plant cost.

VARIABLE COST

Part time workers.

Transportation charges

Miscellaneous.



Fixed Cost + Variable Cost +Desired Profit

The profit margin depends upon the quality of the yarn and

the grey fabric. As the high quality yarn is used in the

construction of the grey cloth, then the price would be high.

The price will be different to attract the customer and in

local market.

PRICE METHOD FOR THE EXPORT

Pricing method for the export products is differing from the

local pricing method. In the export, all the expenditure

related to the export such as the custom clearance charges,

port clearance charges,

Shipping line freight and other foreign agent commission is

added. Also the charges related to the transportation and

bank handling expenditure is considered while calculating

the price of the export items.

PRICE METHOD FOR LOCAL

Pricing method for the local sale is different because all the

cost involved in the export procedures is not included. So

the price would be lower in this.



PLACE / DISTRIBUTION

AFT exports about 95% of its produce.

Therefore the distribution channel of the AFT is as follows.

AFT TO CUSTOMER

AFT is also dealing directly with the customers. As in the

local market and the foreign, the buyers direct contact with

the AFT. So the export department fulfills their orders by

the transformers. The transporter help in delivering the

products. The transporters are helping a lot in progressing

the textile industry. The comely delivery to the buyer is the

greatest service to the customer, timely delivery is

important for the success and development of the

organization.

AFT has a direct contact with the shopping his and the port

and customer clearance agents. They clear the containers

from the port.

INDIRECT CHANNEL

AFT to agent & to customer. In the export of textile

products, the agents are the backbone of textile industry.

They receive the order on behalf of the buyer, give to the

seller. They receive their commission from the buyer and

the seller.



The agents also purchase the products; sell them

directly to other buyers. So in this trading they earn

enough profit.

In Lahore & Karachi, there have been a large number

of agents, which are working for their organizations, in

foreign countries as well as in this country.

Mostly the export business is through these agents.

The agents have been successful due to the credibility

and honesty of their work.

AFT mostly receive orders through agents, located in

the Lahore and Karachi.

AFT pays commission to them.

Mainly the responsibilities lie on the agents in case of

delayed shipments, payment problems and the quality

problems.

Mainly the products are exported through the different

shopping lines.

PROMOTION

AFT promotes its products, but to a limited extent.

AFT provides the company broachers to the buyers.

AFT provides the samples of the grey fabric. The yarn

to the customers.

AFT has a direct contact with the local and the foreign

agents, so they also promote the company products.



Visits to the customers.

AFT marketing manager also visits its customers.

Their high quality of the products on the fine count the

Grey cloth is also promoting the company and

establishing image and goodwill.

AFT provides the timely information to customers

which help in promoting.



ACCOUNTS DEPARTMENT

Accounting is the art or science of interpreting, measuring,

and communicating the results of economic activities

whether you are paying your phone bill, balancing your

checkbook, preparing your income tax return or managing

an international corporation, you are working with

accounting. Accounts Manager makes the important

financial decisions with consultation of Director and Chief

executive of company.

Record of all departments like import department, Export

department, Purchase and sale department, are maintained

here. So this department feels a burden of work. Accountant

is very much busy person who gives instructions to six

members of finance department and checks their work time-

to-time .His ten-year experience has made the work easier

for him. All types of tax rates, recent changes in tax policies,

different codes, companies’ names are on his fingertips.

The accounts department is responsible for the entire

accounting process of the organization regarding the

recording of transactions, designing the accounting policies

and accounting system, preparing financial statements and



computer application. If we consider a company a cell then

we can say that accounts department has role of nucleus.

Without accounts department there is no possibility of doing business even sight

weakness’ on the part of accounts department can badly effect the performance of whole

organization.

FUNCTIONS OF THE DEPARTMENT

Very first and an important function of accounting

department is recording the business transactions on

vouchers. This is also called process of vouching. This is

made for internal record keeping. Auditors specifically audit

vouchers. Wrong vouching will lead to error in the system

and ultimately create problems.

From vouchers information is recorded in daybook and

cashbook. As each voucher along with its invoice, DO and

other necessary documents are kept in the record room so

daybook is one that can give information about parties DR

and name of account CR along with amount.

In order to see accounts in condense form ledger is used.

From daybook all the entries are posted in ledger. Ledger

represents DR or CR balance of each party. So from ledger

we can see amount that is to be paid to a party or the

amount that is to be received and the balance at the end of

the month.

After this all the DR balances and CR balances of all the

parties are posted in trial balance. The trial balance must be



equal at both sides. Otherwise there is any error in

recording the transactions.

Now trial balance becomes the source of profit and loss and

balance sheet.

This department also designs the accounting policies. All

the work in this department is being take place on accrual

basis.

The department prepares trial balance at the end of every

three months and Profit and loss accounts and balance

sheet are prepared at the end of year. The financial year

ends on september30 of each year. The financial statements

are presented to shareholders

THE SETUP OF DEPARTMENT


Chief AccountantChief Accountant

AccountantAccountant

Asst AccountantAsst Accountant

CashierCashier

Computer Operator

Computer Operator

Record KeeperRecord Keeper


The accounting department is mainly divided in to following

three sections:

1. Stores section

2. Salaries and Wages Section

3. General Accounting

STORE SECTION

Store section is mainly concerned with store accounting.

This section deals with many accounts heads that are

concerned with stores. Such as stores &spare A/C, oil and

Lubricant, Packing material A/C, General Store A/C,

Building Material A/C and many others. The major

responsibilities of this department are

To record the store purchases

To record all store issues

To prepare various reports relating to store i.e.

material consumption report, party wise purchase

report

To keep a check on all stores by surprisingly checking their

record and physical existence of items stored. Because of

the above mentioned duties. This section has a key position



in the company. No payment is made to any body unless it is

checked and verified by this section.

SALARIES AND WAGES SECTION

This section is responsible of making payments to the

employees. This section plays an important role in

safeguarding the interest of the company as well as

employees. This section also insures all the labor laws;

certain laws relating to company are as under:

Leave Procedure

There are three types of leaves.

Sick Leaves

Sick Leaves are eight in year

Casual Leaves

Casual Leaves are ten in each year

Annual or Earned Leaves

There are twelve earned leaves. Company’s rule doesn’t

allow any employee to do four-day leave without

application. In case any employee does so then he can’t

avail annual leaves.



Attendance Allowance

Leave encashment is given to those employees who save

their holidays and don’t avail them. This is given according

to their per day salary multiply with number of days of

holidays not availed.

Salaries and Wages

Minimum salary is not less than Rs6000. The breakup of

salary is as under

Basic Salary ________

Badli allowance 50

Cost of living Allowance 18% of basic salary

House Rent Allowance 10%of basic salary

Utility Allowance 10% of basic salary

Special Allowance 300

Income Tax

Income tax is deducted from salary of all those employees

whose annual salary is greater than Rs.150000.An entry is

passed on voucher while deducting income tax and this is

paid to tax department

Advances and Loans



Advances and loans are given to the Employees on their

application and are adjusted against their salaries every

month. It is the sole discretion of the management whether

they approve advances and loans are not

Gratuity

Amount of gratuity is deducted from salary of employee

with passage of time and he gets a lump sum amount at

retiring time



ACCOUNTING SYSTEM

Accounting System at here is centralized and on accrual

basis. All accounts are maintained in Multan head office.

The process of accounting system starts from the

preparation of voucher. The following are different types of

vouchers prepared at AFT Mills:

Journal Voucher

Bank Voucher

Payment Voucher

Credit Voucher

JOURNAL VOUCHER (JV)

As accounting system is on accrual basis, so accounting

entries are passed on journal voucher at first step. This is

also known adjustment voucher. This is prepared for

adjusting entry. Vouchers are prepared after every

transaction. Accounts Manager and Director verify the

voucher respectively. If they have any question they can ask

relevant person if there is no enquiry then they will put

their signatures on voucher. Now it is time to record these

vouchers in books of accounts.

BANK VOUCHER (BV)

Bank voucher is used when any transaction is made with

bank . Amount may be drawn from bank and can be



deposited in bank. You can receive DR advice or CR advice

from bank

DR ADVICE

When issued by bank, it means bank has deducted some

amount from your account or when has been made through

your account

CR ADVICE

When issued by bank to you, it means some amount has

been added in your account. It normally takes place when

some foreign remittances have been received by bank in

your account. This is usually sent by your customer in

foreign country to which exports has been made.

PAYMENT VOUCHER

This voucher is prepared at the time of making payments to

any party. Party name is debited with the amount to which

payment has been made. Payment vouchers are used for the

payment up to Rs.5000. Payments more than this are made

through bank

CREDIT VOUCHER

As name of voucher represents, this voucher is prepared

when some amount is received from any party. In this case



party name is credited by the amount that has been

received

IMPORTANT BOOKS

Cash Book

Bank Book

Bought Day Book

Sale Day Book

CASH BOOK

In this book cash payment and cash receipt vouchers are

recorded on daily basis. The vouchers are numbered serial

wise and cash-closing balance is calculated on daily basis.

BANK BOOK

This book is maintained for all the bank accounts of the

company. When any amount is withdrawn or deposited in

the bank that amount is also recorded in the bankbook. At

the end of month bank account is reconciled with the

statements of the banks

BOUGHT DAY BOOK

The bought daybook is maintained for recording the

purchases made by the company. The balances from the



bought daybook are entered in the relevant supplier

ledgers. At the end of the month the balances from the

bought day book is posted in the main ledger for control

purposes

SALE DAY BOOK

In this book sale bills are entered and then posted in the

customer ledger. At the end of month balances are posted in

the main ledger for control purposes.

When the transaction is properly recorded in the books of

accounts then these balances are posted in the ledgers.

The following are the types of ledgers maintained in this

organization.

Main ledger

Profit &Loss Ledger

Customer Ledger

Supplier Ledger

Staff Ledger

MAIN LEDGER

It is a control ledger, which maintain all heads of accounts

from which balance sheet is prepared. All assets and

liabilities accounted, profit & loss, customer, supplier and

personal Ledger are maintained in it. Posting of sub ledger

is made in main ledger on closing of month. From basic

books like cashbook, bank book, bought daybook and sale



daybook. At the end of month trial balance is prepared to

check the accuracy of accounts maintained during the

month by observing the debit and credit balance as they are

equal or not.

PROFIT AND LOSS LEDGER

In profit and loss ledger all accounts of income and

expenses are maintained .The following are the heads of

accounts maintained in the profit and loss ledger:

Sales Account

Local Sales

Export Sales

Commission on sales

Excise duty on yarn

Export development Charges

Manufacturing Expenses

Administration Expenses

Selling Expenses

Financial Charges

Miscellaneous Charges

MANUFACTURING EXPENSES

They are like purchase of cotton, wages and salaries, fuel

and power, insurance, repair and maintenance of plant,

packing material and depreciation.



ADMINISTRATION EXPENSES

These are traveling expenses, salaries, communication

expenses like fax, phone and telex, rent, electricity,

entertainment, advertising, vehicleup charges, depreciation,

printing and stationary expenses

SELLING EXPENSES

These include export expenses, corporate freight, ocean

freight, trailer freight and local selling expenses

FINANCIAL CHARGES

They are like interest on long term loan, markup on short

term finances, exchange risk coverage fee, commission on

bank guarantees, letter of credit commission, excise duty on

long term and short term finances.

MISCELLANEOUS CHARGES

Miscellaneous charges include auditors fee, legal and

professional charges, donations, fines and penalties.

CUSTOMER LEDGER

It is maintained by company in which all accounts are

opened to whom the company sells yarn. Posting in

customer ledger is made from cashbook, bankbook and

daybook. The balances of customers are worked out daily



and the report of receivables is prepared daily and

submitted to the management.

SUPPLIER LEDGER

In supplier ledger the goods supplied by the parties is

recorded. Party’s account is credited and goods purchased

are debited.

PERSONAL LEDGER

To record all transactions relating to the personal accounts

of employees of the company, this ledger is used. Advances

and loans made to the employees, and the monthly

deductions from their accounts of loans are recorded.

INTERNAL AUDIT DEPARTMENT



Internal audit is essential for companies. It is a review of

operations and record under taken within a business by

special assigned staff. The management can appoint staff to

go through the business activities. Auditor gives many

suggestions for the benefit of business.

For performing internal audit, company has a separate

department. Head of this department is auditor officer

(internal).

Functions of department:

Audit department develop audit programs before

conducting an audit. This department works on continuous

basis. The internal auditor of the company visits the mill on

weekly basis and conducts the audit according to the

checklist framed by the internal audit department. The

department is responsible to keep its eyes on the

implementation of management policies. This department is

also responsible to inform the top management regarding

the accuracy of all accounting information and their

analysis.

Except all these there are some main functions of this

department.

Some main functions of internal audit department.

The main functions, which this department performs, are:

System revision

Management of policies check



Maintenance of books of accounts

System check.

System revision

Discrepancies always come in any organization. So this is

duty of internal audit department to revise the system if

there arises any type of discrepancy.

Management policies check

The top management makes policies. And it is duty of the

people to follow all the policies. Internal audit department

also examines that policies are followed or not.

Maintenance of books of accounts

This internal audit department also examines that whether

books are properly maintained as required by the

Accounting Standards and Organizational Policies.

System Check

The internal audit department checks whether the revised

system is being followed or not, if there is any type of

deviation that is reported to the top management.



MAIN FUNCTIONS OF INTERNAL AUDIT DEPARTMENT AT THE HEAD OFFICE MULTAN

Checking of posting from clock cards to wages

sheets

Price Checking

Recovery of advances

Checking of rebates and discounts

Continuous checking of assets of the company

Checking of Bank vouchers, Journal vouchers,

Payment vouchers, Credit vouchers

Checking of trial balance statement after every

three months.

Checking of bank reconciliation statements every

month.

An internal auditor can check any document at any

time or can ask the accountant to provide the

necessary documents.



EXPORT DEPARTMENT

Export department plays a vital role in any organization.

The export manager heads AFT export department. The

export manager supervises all the marketing & export

activities. Export manager is also responsible for the

exploration of local and foreign markets. He is also making

efforts for the development and the progress of the

company.

OBJECTIVES

To increase the Export of the Grey Fabric and yarn.

To maximize the company profit by increasing exports.

Exploration of the new markets.

Market research making the better information system

Adopting the new technological a developmental changes

in the field of textile.

To build the image a credibility of the organization.



To earn foreign exchange for the progress of the

economy of the country.

FUNCTIONS

Following are the main functions of the export department.

Export department is responsible for the production

planning and the production follow up with the mill.

Customer correspondence as well

Export department also follow-up the local sale and

purchase of the yarn and the Grey fabric.

The important function of the export department is to

make shipment schedule and the planning.

Visiting to the existing and new customer.

Providing timely information about the production of the

products to the customers, which is also providing a

service to its customers and promoting the company

image.

Improving the quality of the products with collaboration

with the buyer and the production department.

Bank documents preparation and the follow-up.

Preparing the custom documents

Dealing with the agents and providing timely information

to the parties.

B/L follow-up with the shipping lines.

Export system updating is also the responsibility of

department.



Preparing the quality analysis report and sending them to

higher authorities.

Maintaining the complete sale and purchase records

Export department is helping in improving the quality

and betterment of the products and the company.

Providing timely information to the clients is the main

service provided by the AFT export department.

EXPORT DOCUMENTATION

Export procedure is a very lengthy process. It involves a

number of documents required by the importer from the

exporter. AFT export department carefully handle all the

steps involve in it. Because a little bit of mistake can cause

a great loss to the exporter and the importer.

Indent

Sales contract

Letter of Credit

Custom documents

Packing list

Bill of lading

Bill of exchange

Certificate of origin

Inspection certificate

Form E

Form M

Shipping bill



INDENT

Indent is the first export document, which is, send by the

agents to export department. After the careful analysis of all

the terms and conditions such as the quality description the

selvedge, shipment date, piece length, price per unit, the

packing and payments terms. It also contains the buyer

name and the reference number of buyer or agent.

SALES CONTRACT

The export department after the careful analysis of indent

issues the sales contract. As they have the products and in

the sales contract they confirm the terms and conditions of

the indent, such as the quality, packing, payment terms,

commission, shipment date and the price of the product.

Issuing sales contract is the confirming the sale of the

products to the buyer on the specified price. If there is

changing made by the buyer or agent, so the later revised

sales contract is issued by the export department? In which

they can revised any thing, the shipment schedule, the price

& the product specification. Export department handle

carefully the steps of that procedure. Also the contract

copies are sent to the agent, the buyer, the accounts and

the audit department of the AFT for their record purpose.



LETTER OF CREDIT

Letter of credit is very important documents in the whole

export procedure. Because without this the process could

not be complete.

L/C is a written instruction issued by buyer’s bank,

authorizing the exports to draw in accordance with the

terms and stimulate legal forms that bill will be honored.

In the L/C all the term and the conditions are given by the

buyer. What documents he needs. In the L/c there are

important things mentioned there.

The Buyer name is there in the L/C

The bank of the importer is also mentioned.

The importer name and address is also given.

L/C number is mentioned on the top or the L/C

Issuing date of the L/c, the expiry date of the L/C,

the amount of L/C, the quantity of the products.

The complete description of the products and the

rate.

The terms, either CNF or CFR,

The shipment date is also mentioned.

The port is given there in L/C.

The shipping line is given, so the exporter only sent

the goods on that specific shipping line.

L/C terms are given, either it is 120 days, 90 days

or sight from B/L date



On the L/C the rate per unit and the shipment

schedule is give on what date the products would

be shipped in what quantity.

Trans shipment or the partial shipment allowed or

not is also there in the L/C

All the documents such as the invoices, the packing list, the

certificate of origin and other inspection certificate are also

mentioned as required by the importer.

TYPES OF L/C

Irrevocable or revocable

Documentary or clean

Un-confirmed or confirmed

Sight

The exporter has to fulfill the terms mentioned in the L/C. Both the importer the

exporter are bound to fulfill their obligation mentioned his L/C

TRANSPORT DOCUMENTS

The transport documents are very important because it

provide the evidence that goods have been transported and

it enables the importer to receive the goods from the

custom authorities. As the order placed by the importer is

ready on the due date, the export department issues the

dispatch order to the mill. That the following quality should

be dispatched on the containers specified on this L/C. The

goods are loaded on the specified containers and they are

sent to the Karachi port on the specified shipping line.



AFT mostly does its shipment through the shipping

companies. The shipping lines charge their freight and

other charges are paid the agents as well as for clearance of

the goods from the port. The agents handover the

documents which involve packing list and invoices to the

shipping lines.

As the trailer number, the container number E form

number, quality and the quantity is completely mentioned

on this invoices.

Mode Document Carrier

By sea Bill of lading Shipping lines

By Rail Receipt Railway service

By Road Road way bill Transporters

By Air Air way bill Air lines

NEGOTIABLE DOCUMENTS

In the negotiable documents the title of the good is transferred form one

person to another when the existing holder produces the documents.



NON NEGOTIABLE

In the non-negotiable the title of the goods is non-

transferable. In the exporting of good the number of the

parties one involved.

1) The firm or the company engaged in business of

transporting products, such as the track company,

shipping company a airline.

2) The exporter, who is exporting the goods to the buyer.

3) The importer who is importing the goods from the seller.

BILL OF LADING

Bill of lading is one of the most important documents in the

whole export documents. Because without this the importer

cannot receive their goods from the destination port.

AFT first of all draft the bill of lading and that is sent to the

shipping line. Bill of lading also contains the specifications

related to the importer and the exporter. The name of the

exporter, place, the importer, the bank, the quantity is

mentioned, the quality with all the specifications required

by that, the total value of the goods which are exported.

The date of the bill of lading is mentioned. The shipping line

and vessel name is given on B/L.

B/L is a comprehensive document that is issued by the

shipping line. The date of shipment is also mentioned on

that. Without this the importer can’t clear the goods from

the destination.



AFT export department also very quick in follow up of the

B/L because they have to transfer the information to the

parties.

CERTIFICATE OF ORIGIN

Certificate of origin shows that the good which are being

exported are originate from a country form which importer

is allowed. These are required by the authorities in the

importing countries. In order to satisfy and support a claim

for the import duty.

This certificate of origin may also be made by the

consultants of the importing country in the form of consoler

invoice or legalize the exporter’s commercial invoice. When

explorer called for L/C, of is with the other documents by

reference to the invoice number, L/C number and by

quoting shipping marks and numbers in order to identify the

goods.

PACKING LIST

Packing list is a document, which involves all the complete

list of the goods packed in the particular shipment. It is very

important. Documents. It provides a convenience to the

shipping and the clearance authorities.

FEATURES OF PACKING LIST

1) It usually shows the marks a number mentioned on the

packages.



2) It shows the weight also.

3) Each package is marked by a number.

4) It shows the contents of each package, what is nature,

quality and quantity of the package.

5) It provides a linkage with the other documents to

reference to the invoice number, date, letter of credit

number, date and vessel name.

FORM-E

Form E is a document issued by the exporter bank. Through

Form-E the SBP controls the overall exports of the country.

The form-E declares that the export information given on

the form-E are correct and will submit the duplicate and

triplicate copy of this form to authorized bank.

Form-E contains the following important information’s.

1) Description of the goods, the quality of the goods

exported.

2) The quantity of the goods.

3) The Terms of the L/C.

4) Destination of the goods.

5) The consignee bank. The importer bank name through

countries the payment would be released.

6) The Invoice value of the goods in the exported.

7) The port form where the good are shipped.

8) The place from where good are cleared.

9) Date of the form E is also on this form.



CERTIFICATE OF INSPECTION

Certificate of inspection is also a important document, it is

in those consignments where the importer wants to assure

himself, about the shipment of the correct goods, in terms

of the quality, description quantity and size. The documents

should specifically identify to the goods by having a

reference to the marks and numbers of the package and

linkage to the other documents by reference to invoice

number, the letter of credit number, the vessel name and

the shipping line.

BILL OF EXCHANGE

It is unconditional order in writing, addressed by a person

to another, signed by person giving it, requiring the person

to when it is addressed to pay on demand or at a fixed

determinable future date. When the L/C is opened the B/E

must be strictly drawn according to the terms and

conditions of the creditor may be drown on the request of

the applicant or on the bank request through which the

credit is opened. B/E is also a important document of

export.

SHIPPING BILL

The customer clearing agents issue the shipping bill. It

contains the complete information about the export bank



the importer name, the exporter name, the weight of the

goods, (Net and gross weight),

number of packages, amount in US$, quality of the goods,

the container number, the exchange rate and rupee amount.

FORM-M

It is also an important. It is used to pay the commission to

the agents. AFT receives this from the agents. On this the

amount of the commission is mentioned against invoices.

PRODUCTION DEPARTMENT

Ahmed fine textile limited has a spinning unit, which is

situated at District Rahim yar khan. This unit is equipped

with highly modern and automated machinery. Ahmed fine

textile limited has also two units of weaving. One is situated

at Multan-Bahawalpur road, district Multlan and second is

under construction at Qadirpurrawn, District Multan.

The properties of cotton fibers (a natural fiber) vary for all

different growth areas for different climate conditions and

form year to year. When cotton crop is collected from fields,

team of professionals survey the best cotton growth areas



( called station ). So, after selecting the best station, the

next step is considering the ginning factories where cotton

lint and seeds are separated. Seeds are used as the raw

material for oil industry and cotton lint in the spinning of

yarn. Raw cotton is tested at various parameters e.g. its

staple length, micronaire, floating fibers %, trash %, color,

yellowness and moisture content etc.

Considering above parameters cotton is purchased for the

whole year consumption. Ginners send the cotton in lots

(each contain 100 bales) to spinning mills in the form of

pressed bales having weight 165 – 170 Kgs each bale.

Yarn is produced of two types combed yarn (the excellent

quality) and carded yarn (good quality). To produce each

type spinning process is somewhat different as show below:

Spinning Process:



First of all spinning process for combed yarn is:



For combed yarn

Blow Room

Carding

Pre comber drawing

Unilap

Combers

Drawings

Simplex

Ring

Autocone

Conditioning

For carded yarn

Blow room

Carding

Drawing

Simplex

Ring

Autocone

Conditioning



Actually spinning process starts from hare:

Blow Room

Following three jobs are done here.

1. Mixing

2. Opening

3. Cleaning

Cotton from various cotton areas ( stations) is so blended

together that these stations should be preferably within one

hundred range. They make a blend of 7-8 stations. Each

station representing 20-25 bales. Thus 120 bales are issued

to the blow room. Micronaire value is maintained.

About 80-100 people are deputed here for bales opening

and contamination sorting. Contamination may be coloured

yarn pieces, small cloth pieces, jute, feathers, hair pieces

and polypropylenes pieces etc. Thus blending and mixing

takes place once again as the small tufts are mixed

together. This minimizes the variation from bale to bale and

from station to station and even blend is obtained. Now

cotton remain here for twenty four hours to reduce moisture

contents 7-8 %.

Aftermath cotton is subjected to various machines having

spikes and beaters, which open the cotton to further small

tuffs. While opening with the aid of certain mechanism leaf,

sand and motes etc are extracted from cotton with the



passage of time, as cotton is transferred from one to other

machine, cotton becomes cleaner and finer. Dropping

(waste) is separated through here through a pipeline.

Carding

Cotton from blow room machines is transferred via air to

the next department called carding. This is a machine which

has big cylinders with very sharp wires. These cylinders are

so placed in the machines that at various points of the

machines, cotton experiences and extensive opening and

cleaning. Here small entanglements of cotton are also

extracted along with finer trash particulars e.g. small leaf

and seed particulars. Fibers having length less than 0.5 inch

are extracted.

The dust extracted here is of two types:

Card Fly

Lickerine

Up to here 12 % waste has been extracted. The products of

carding machines is called SLIVER. It is an assembly of

fibers almost parallel to each other and condensed in the

form of a rope. About 5000 yard of sliver are laid in ‘Cans’

(large hollow vessels of 24” dia and 48” length)

Pre-Comber Drawing



The cans obtained from the carding department are set

behind machines called Pre-combing draw frames. Six cans

are placed and sliver form each can is passed through

rollers. These rollers have speed difference such that six

slivers are stretched six times and a single end is obtained.

In this way slivers are blended and mixed together to

minimize variation. The obtained silver is again laid down in

cans.

Unilap

Slivers received from pre-comber draw frames are once

again stretched here. Twenty six slivers cans are sent on a

machines called unilap. Thus slivers from twenty six cans

are mixed and blended together to minimize variation.

It results in the shape of Lap. It is a sheet wound on al

plastic tube (spool).

Combers

Laps are fed to the next process called combing. Here 15-18

% short fibers are extracted which are called comber noil (a

by product used for surgical dressing ). The result of this

process is also a Sliver of very fine, Clean and lustrous

bearing the fibers of maximum length.

Drawing



The sliver obtained from combers are again fed to another

draw frame passage called post combing process.

Sometimes this sliver is passed once through draw frames

and sometimes twice. In the framer case it is called single

passage and the later is called double passage.

Simplex

Here the objectives are

Drafting

Twisting

Winding (Roving)

The drawn cans are subjected to a next process called

simplex. One hundred and twenty cans are placed at the

back of each simplex machine. Each can against

experiences a stretch of six to seven times and assumes a

shape of finer than sliver. This fine rope is twisted and

wound on to a plastic bobbin. This rope is called roving.

Up to here process is called back process.

Ring

It is in fact yarn production department as yarn count is

controlled here. Each roving bobbin contains about 2000 to

3000 yards of roving. This roving is once again subjected to



a stretching process. As the roving is unwounded from the

roving bobbin, it is passed through three pairs of rollers,

Their speed are so adjusted that the speed of no.3 in about

22 times more than that no.1. In this way if one yard of

roving is subjected to three rollers; it will be lengthened to

twenty two yards(particularly to produce NE 20/1 yarn

count).Thus at the time of having third pair of roller, the

roving has been converted into yarn from of very fragile

one.

A 20/1 combed yarn is given about 16 to 16.20 turns per

inch (especially to produce yarn for knitting) these turns are

given by the dint of a traveler whose life is about seven days

only. This small metallic part not only imparts twist to the

yarn but also winds it on the ring bobbin. The ring is

mounted on the spindle which revolves about 16000 to

17000 per minutes. RPM (revolution per minute) as

controlled through a meter on the machine and is set as per

requirement. Each ring bobbin contains 55 to 60 grams of

yarn.

Auto Cone

Three jobs are done here

Faults removal:

This yarn has some faults e.g. some thin and thick places in

yarn. Such faults are cut and joined again automatically.



During winding process waxing is done only with the

hosiery yarn to reduce its friction with the needles of the

knitting machine.

Winding yarn on paper cone

Here now we have been equipped with a latest technology

called PERLA and SIRO, which controls hairiness and

contamination respectively.

Conditioning

After a paper decided length is wound on a paper cone, a

certain weight e. g. 4.166 lbs is obtained. After the

weighment of every cone it is inspected through Ultra Violet

device. Then they are stacked in packing department for

conditioning. In this way strength of yarn is improved. Also

the loss due to extraction of waste in blow room, carding

and comber is compensated in the form of moisture. The

cones are left here for about twenty-four hours and then

packed in corrugated cartons. Marks are printed on cartons

as per customer’s requirements and now they are ready for

dispatch.

Count

Lea

(1.5 meter) X (80 round) = 120 yard

Hank

(120yards) X (7) = 840



On the scale put on one side on pound and on the other side

put the hanks. Then count the hanks that will be our count.

Suppose that there are 30 hank equal to one pound our cont

will be NE 30/1.

The final mark that is “Made in Pakistan” is placed.

TYPES OF PRODUCTION REPORTS

Different types of reports are prepared when yarn is

received from the spinning section an all records are

maintained completely. These are as under:

Yarn Report

Waste Report

Daily Cotton Consumption Report

Efficiency Report (Spindles Worked)

Daily Production Report

Weaving process



The production process starts when the negotiation

between the buyer and seller completed. The order is then

faxed to the mill and the production at the mill starts.



During the production process first of all the reed per dent

is calculated.

a. REED

Reed means of order. It’s a design frame in which the

required weave is adjusted to produce a design.

Example.

In case of 3/1 weave there are four ends/dent in a

reed.

On the basis of this calculation the required weave is

produced.

YARN REQUIREMENTS

After the adjustment of the reed

the yarn requirements is calculated. The requirements of

yarn are based on per day production of that quality and

also depend on the weight of the yarn.

One bag of yarn contains =100 lbs

One truck contains =130 bags (Avg.)



Common types of yarn: 7/1, 8/1, 10/1, 12/1, 16/1, and

20/1& 24/1

Unless the mill got an advice from the head of they does not

manufacture of the fabric.

Calculation for yarn requirement of Warp count:

End per inch x cloth width x 1.0936

840 x warp count

Same formula will be for calculating the yarn requirement

of weft also.

WARPING.

Warping is the process of withdrawal of yarn

from Cones and transfers it to big beams. In this process

the yarn from little is transferred to required numbers of

beams. The required number of ends/inch is calculated and

feeded in the machine from which it is converted into

required number of beams.

SIZING.

There are two main objectives of sizing of yarn.



1- is to strengthen the fibers. In this process the warped

beams are passed through a chemical process so that

yarn could bear the intensity of the weaving process

and they do not break .

2- is to achieve the required number of ends on one

single beam.

KNOTTING

In this process if the quality of one beam

remains the same and the quality of one beam ends then the

other beam of the same quality is joint with the threads of

first beam, this is known as knotting process. However this

process is not applicable if of the weave is changed.

DRAWING IN

In this process if the quality applied on one beam is to be

changed then the process employed for the changing of one

quality in to another is known as drawing in. it is also

known as changing of article.

COMPRESSOR.

In mills there are big compressors of air,

which extract fresh air. These compressors store this fresh

air and after going some process, passed this air to the air

jet looms.



WEAVING

When the yarn has gone through all the above

processes, now it is ready to pass through the weaving

process. In this process the yarn is converted in to fabric.

All the above mentioned process are subsidiary of the

weaving process,

INSPECTION

When the required fabric is produced it is

ready for grading, mending and inspection. First of all the

produced fabric is passed through grading and mending

machines in which if there is any fault in the produced

fabric it is removed on the spot. After going through the

grading and mending process the fabric is re-inspected

again so that there is no chance of error.

PACKING

There are three main ways in which the fabric is

packed.

1: - rolls

2: - bales

3: - pallets



The only difference between above three packing

is the total length in which the fabric is packed, if the

quality is same it will be packed in rolls and bales and if the

quality is in thousands it will be packed in pallets.

When the required fabric has been packed it is loaded in 20

or 40-ft containers, and from there they went to Karachi for

shipment.

PRODUCTION CALCULATION OR LOOM EFFICIENCY

PRODUCTION

The revolution per minute of Sulzer machine varies from

280-305

In Diamond fabric the Sulzer machines can produce width

up-till 153 inch; however practically above machine can

produced width-up till 140 inch.

This 153-inch can be divided into 3 widths maximum and

one width minimum.



The PRM for 3 width machine = 280



The efficiency of machine varies from 85 to 95 percent. It

can never be 100%.

There is always a margin for rejection also which is

assumed as 5%.

PRODUCTION CALCULATION.

[PRMx 60(R.P.H) x 24 (# of hours in a day) x # of width]

x

Efficiency

No. Of picks per inch x 36

If we want the above calculation in meters we will divide

the above answer by 1.0936

In case of Air jet looms the revolutions per minutes varies

from 400 to 775.



BATCHERS

They are used when we want to warp more of piece length

into yards/meters i.e. 2000 OR above. Whereas in normal

looms the piece of length varies from 200 to 300 meters.

LABORATORY

In laboratory the following tests of fabric are done.

1- Tensile: to check the strength and density of fabric.

2- Tearing: it also checks the tearing capacity of fabric

3- Count determination: in this process the type of count

is determined.

4- Magnifier glass: this glass checks the type and quality

of fabric closely.

QUALITY CONTROL MANAGEMENT

Quality Control refers to setting certain standards for

production and matching production with those standards.

Management of every company is specially committed to

the good quality both in production and end results. The

Management of AFT has been successful in creating and

maintaining the quality culture in the organization. Daily

quality report is sent to headquarter and it is checked



here. Sine 90 to 95 percent of production is exported;

therefore, it is highly intensified. Following are the

characteristics of the Yarn that are checked for the

equality assurance:

Weight of Fiber

Length and Strength

Dia

Weight and Final Yarn

Evenness of Yarn

Relative Humidity

Temperature

SWOT ANALYSIS

STRENGTHS



Cheap labor is available to AFT which is reducing the

per unit cost.

The products are at compatible prices.

Cotton is also available at cheaper rates.

It has its own spinning unit and the weaving unit also.

Which is reducing the cost of production?

AFT has well qualified staff.

AFT has a good financial resources. So they can invest

in other textile related products.

AFT has its better market information system.

AFT has food relations with local foreign buyers.

Good know how about the textile business. Which is

improving the progress of the company?

WEAKNESSES

Lack of HR resources development.

Lack of promotional activities. AFT should do the

more effort in promotion.



Delivery time is more due to this the shipment are

delayed

There is more decentralization in AFT.

Less competitive in the fine count.

Our cotton fiber is Short .Which is decreasing our

productivity in fiber.

Per unit cost is not decreasing .So we are less

competitive in count Fiber.

AFT is not exporting value added products.

Non-professional attitude. Which is decreasing

efficiency.

OPPORTUNITIES

AFT has opportunity to export to the U.S.A and

the Europe markets.

There is more scope of exporting to these

markets.

AFT has opportunity to explore new

international and growth oriented markets for

the exports of Fabric.

AFT can play the role of agent. So they can

save the commission, which is paid to the

agents.

AFT can better the marketing techniques.



The company should import the latest

technology to decrease the per unit cost of the

production.

The company should go in dying process also.

The company should make efforts to improve

the technical skills of the labour and employees

which will improve the overall efficiency and

productivity of the organization

Govt. is also providing lot of incentives to the

exporters.

The AFT can move in horizontal and the

forward integration.

The decreasing interest rates on the loans.

THREATS

WTO regime will be a great threat.

Political instability is also a major threat

Govt. strict policies about the textile sector.

The unreliable agriculture sector.

Quotas are lifting AFT will face the major threat.

AFT has a threat from the domestic and the

international competitors.

China, Thailand and Indonesia are the emerging giants

in textile.



The AFT will face tough competition in domestic and

international markets.
