Internship Report on Ahmad Fine Textile Mills

AHMAD FINE TEXTILE MILLS LTD

EVOLUTION OF TEXTILENo one knows exactly about the cotton textile. When it is started? Where it is started and how it

is started. To understand it I divide it in two three: Classical Era New Classical Era Modern Era

Classical EraHazrat Adam and Eve felt the desire of hiding shame on Earth. History of cotton Textile is also

to some extent history of civilization. Perhaps cotton was used as fiber in Egypt near about 3500

B.C. in Mohanjodaro some evidence is found to use cotton cloths about 2700 B.C.

New Classical EraIn the beginning of weaving the thread or weaving raw material was rough and coavse and cloth

produce from this material was also rough. Almost 4000 years age China used skills to produce

cloth.

Modern EraBy the end of 18th century it was established as an Industry. First spinning process and mill was

introduced in 1870. German and America started development on this process.

Improvement on this sector takes place very quickly. Now man made fiber take place of Natural

fiber. Now machines are changed. New method of technology is discovered.

In this development Japan, Pakistan, U.K., India and other countries are playing major role.

Everybody knows that three basic needs of human being are food, shelter and cloth.

Cloth has its own importance in the life of human being.

The desire of hiding shame was felt by the Adam and Eve when they were pushed to the

earth from the Heaven. The history of cotton textile is also, to some extent, the history

of civilization. Any body can not give the exact date of beginning of cotton as a textile

fiber but certainly it was used in Egypt in ancient time. They dyed the fabrics with the

indigo. These information were recorded from Egyptian tombs have been dated as far

back as 3500 BC.

INTERNSHIP REPORT 1


The fragments of cotton cloth and strings were discovered during the excavation of

Mohenjodaro in Sindh Pakistan. These fragments give evidence of usage of cotton cloth

in eastern countries as long ago as 2700 BC.

In the beginning of civilization the threads used for weaving were coarse and rough

consequently the production of cloth from this thread was crude and coarse. Afterward

the Chinese used silk-warm to extrude filament which was used to make the finest of

fabrics. Therefore under the rule of emperor Huang Ti became the economically

important in China over 4000 years ago. Probably it is believed that the loom was

invented by his empress.

The improvement in the process of evolution of cotton industry was culminated

gradually. By the end of the 18 century it was established as an industry. Different

people have their share in establishing this industry. The most important name Samuel

Gromption who worked to improve the spinning process and produced the mill in 1970.

The first

factory was Arkwright’s , which was capable of producing 80/1 count and even 100/1

count cotton yarn.

Germany and America became the competent to each other in this industry in the late

19th century. This competition became into extent after the first world war.

After the second decade of present century and till the present days the gradually

improvement in this industry was very fast. Although the actual process and technology

was not completely changed, but the machines are changed to some extent. After the

second worked was a completely different structure of the textile technology was came

into existence.

Now a days man-made fibers are taking place of natural fibers. Man-made fibers are

giving a main support to this industry. In this development Japan, Pakistan, U.K. India

and other countries are playing a major role.

INTERNSHIP REPORT 2


FLOURISING TEXTILE INDUSTRY OF PAKISTAN

At the time of independence of Pakistan, there was not developed industry of Textile in this

Independent part. Basic raw material " cotton" of this industry is related to agriculture. Pakistan

is an agricultural country. Its forms grow golden crops. Pakistani Govt. and farmers try their best

and joined together to flourish this industry.

Now by the grace of god and by the hardworking of farmers and good policies of Pakistan

Government, today Textile industry is the backbone of Pakistan economy. Now were not only

self-sufficient in Textile Industry but also exporting surplus textile products. Today, we have

over 8.358 million installed spindles 20000 shuttle loams and 20000 power looms, 15000

woolen looms and 7620 canvas looms.

total textile industries in Pakistan which are registered with All Pakistan Textile Mills

Association(APTMA) are 442. In which, 345 are spinning units ,53 composite units and 44

weaving units. Textile industry always was a pillar of economy. It not only causes to increase

Government revenue, but also support and vital impact on t he overall growth and development

of economy. Its share in GDP is 8.5 %; investment in Textile industry is 31% of total investment.

The interest that bankers and other financial institutions earn is about Rs 4 billion rupees. It

provides a 40 % of total industry job. Salary and wages that textile sector provide is Rs 40 billion

per annum. It contributes to Research & Development is Rs 116 million. Per Annum.

INTERNSHIP REPORT 3


HINDRANCES OF TEXTILE INDUS TKYTextile industry of Pakistan is still on developing stage. This industry has to face a lot of

difficulties for flourishing in Pakistan. We are discussing only its burning problems, which this

industry has to face.1. Raw material2. Lack of Govt. Subsidies.3. Import/ Export of raw material.4. Lack of Research & Development.5. Lack of Investment.6. International Competition.7. Export of Grey Fabric.8. Import of Machinery.

Raw material

"Cotton is the most precious commodity from Pakistan's economic point of view. It is the

backbone of our economy. Pakistan is ranked as third largest cotton exporting country in the

world in 1991 when its production reached to its Climax i.e. 12.82 million bales. We simply

understand " one million bales of cotton means to Pakistan, plus or minus one percent Gross

domestic product". Quality of Pakistan cotton is not good due to following reasons: > There is

contamination in cotton. There is no proper Grading of cotton. > Fiber length is small which is

about 28.2 mm.

Import or Export of Raw Material

Due to poor quality of cotton its cotton export value is not increasing. Export value of

our raw cotton which was $ 1.03 /kg. In 1951-1952, it is still moving around $ 1.47 / kg.In 200-2001 Pakistan exported about 2200 metric ton and imported 140000 metric tons of cotton.

Import of Machinery

As we know Pakistan is an agricultural country. Industrial revolution takes place in Pakistan in

the decade of 1960. Our textile Industry imported Textile machinery from abroad like Germany

and Japan.

Lack of Investment

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To set up a textile unit there is a need of lot of capital, because they installed all the imported

machinery for good production.

Govt. Subsidies

For textile industry "• Cotton" is as important as blood. Mostly cotton is imported from abroad.

Govt. should provide subsidies in the import of machinery and cotton.

Lack of Research & Development

At the beginning In Pakistan there were no concentrate for Research and Development for textile

sector. When the R & D sector established, Govt. take it non-seriously. We failed in developing

even a single variety of long staple cotton despite the lavish spending on Research and

Development which runs into billion of rupees every year. The major chunk of funds allocated

for this purpose go into the salary bill of the white elephant hired by the different Governments

on political considerations in the past.

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TEXTILE INDUSTRY’S ECONOMIC CONTRIBUTION

Description ContributionsExports 64% of total exports (US$ 4.9 Billion)Manufacturing 46% of total manufacturingEmployment 38% of total employmentInvestment 31% of total investmentMarket Capitalization 7% of total market capitalizationInterest Rs. 4 Billion per annumSalaries and Wages Rs. 40 Billion per annumContribution to Research and Development Rs. 116 million per annumGross Domestic Product (GDP) 8.5% of total GDP

This sounds a triumph like situation at a glance. There is how ever much more than it

meets the eyes when you go into details, which carry some failures also to weep on. This

industry has not performed as well as it should have. It is struggling for its survival for

the past 7 years.

The textile industry at present is passing through a transition phase. It is sailing smoothly

under the protected cover of the quota system, however it has to face the rough waters of

the open sea when globalization of trade is implemented under WTO agreement in 2004.

Three years have already gone unnoticed. The fast approaching deadline sounding a note

of warning for re-structuring of all the segments of the cotton and textile industries on

war footings to enable it to face the future challenges of fierce competition amongst the

low cost Asian manufacturers to capture share of their higher cost European counter-

parts when the gates of the global economies are open.

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Cotton Based

Cotton, the most precious commodity from Pakistan’s economic point of view, has

become a bone of contention between textile industry and the growers, ginners and

exporters of raw cotton. Pakistan, being the fourth largest cotton producing country

provides a strong base for development substance of textile industry in spite of

tremendous growth in all the area of textile industry, including:

Cotton

Ginning

Spinning

Processing

Because Egypt has been able to develop good quality staple as against the poor quality

cotton, despite the lavish spending on Research and Development, which turns into

billion of rupees every year. However, in Pakistan the major chunk of the funds allocated

for research and development go into salary bills of white elephant hired by the

governments on political considerations in the past. We failed in developing even a

single variety of long staple cotton, which is the major handicap of the textile industry in

producing yarn of the fine quality.

Number of units and classificationIn the organized section there are232 listed textile companies of which 153 are spinning

units, 28 weaving and 51 composite units while the total no of textile units both listed

and non-listed however are 443.

Import of Machinery

The industry imported textile machinery from abroad the detail of which for last few

years is as below, it represents a decline in import of machinery in yearly:

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Year Value ( million)1996-97 789.21997-98 352.71998-2000 305.22000-2001 282.052002-2003 250.05

Contribution in Employment

Textile unit constitute 40% of employment generated by the manufacturing sector while

textile being largest industry has got other forward and back ward relation where it must

had played its role in generating employment in related industries for example shipping

industry will definitely by mainly depended upon textile industry.

Share in Value additionAs the table indicates the status of textile industry among other production units, it

constitutes for almost 26% of total value added by the manufacturing sector this value

addition for textile sector was Rs.8596 million in 1985-86. It has increased to Rs.29251

million in 2001.

Contribution in Forex

Textile exports constitute about 60-65% of the total exports of Pakistan, but textile industry also has to import the raw material the data for which is given below:

IMPORTANCE OF COTTON IN THE ECONOMY OF PAKISTAN

Cotton “the silver fiber” of Pakistan is the backbone of Pakistan’s economy. A simple

notion “one million bales of cotton means to Pakistan, plus or minus one percent gross

domestic products (GDP)” narrates the vital importance of cotton in Pakistan’s economy.

Pakistan was ranked as third largest cotton exporting country in the world in 1991 when

its production of cotton reached its climax (12.82 million bales). The anticlimax began

INTERNSHIP REPORT 8


thereafter and in the very next year cotton production decreased to 9.05 million bales and

further to 8.86 million bales in 1993. The major biotic factor responsible for the downfall

was the leaf curl disease of cotton that pervades through out the Cotton Belt.

The production of cotton during 1998-99 was 1,372,000 metric tons (7.22 million bales),

which is 13.6% less as compared to the previous year. Pakistan exported 2,000 metric

tons and imported 142,000 metric tons of cotton during that year. The quality of

Pakistani cotton is not very good. There is contamination in the cotton and there is not

proper grading of cotton in Pakistan. The average ginning out turn (%), fiber length

(mm), fineness and strength (000’ppsi) is 36.8, 28.2, 4.4, and 94.2 respectively.

It will be interesting to note that the export value of our raw cotton which was $1.03/kg

some 45 years ago in 1951-52, while it is still moving around $1.47kg. The value of

Egyptian cotton is more than double of Pakistan cotton in the international market simply

because they have been able to develop good quality staple as against the poor quality

cotton produced in the country despite the lavish spending on R&D which runs into

billions of rupee every year. The major chunk of the funds allocated

For R&D GO INTO SALARY BILL OF THE WHITE ELEPHANT HIRED BY THE

different governments on political consideration in the past.

We failed in developing even a single variety of long staple cotton, which is the major

handicap of textile industry in producing of yarn of fine quality. The textile industry at

present is passing through a transition phase. It is sailing smoothly under the protected

cover of the quota system. However it has to face the rough water to the open sea when

globalization of trade is implemented under WTO Agreement in 2004. Three-year have

already gone unnoticed. The fast approaching dead line sounding a note of warning for

restructuring of all the segments of the cotton & textile industries on war footings to

enable it to face the future challenges of fierce competitions amongst the low cost Asian

manufacturers to capture share of their higher

INTERNSHIP REPORT 9


COMPANY INFORMATIONAHMED FINE TEXTLIE MILLS LIMITED is a unit of Fazal Group of Industries.

Fazal Group has been operating in manufacturing and trading business in Pakistan since 1936. In the textile section the Group owns and operates four Ring spinning plants comprising 9140 spindles. One weaving plant comprising 96 Air Jet looms and two captive Gas Power plants with a capacity of 4.5 Mega Watts. All the plants are equipped with state of the art equipment.

A variety of products are produced with emphasis on value added products like plied yarn, combed yarn, stretch yarn, slub fabrics and Fine count sheeting etc. Bulk of the group sales is generated from export.Customer satisfaction from order replacement to after sale service is given priority over every other aspects as a policy. Investment in human resources development is also an integral part of the group's business plan. All the plants are ISO 9002 certified.

INTERNSHIP REPORT 10


BOARD OF DIRECTORS:

SH. REHMAN NASEEM AHMADChief Executive

Mr. ASHAR FAZALDirector

SH. SHAUKAT MASUDDirector

SH. AMIR NASEEMDirector

MR. FAZAL AHMAD SHEIKH Director

MRS. FARRUKH MUKHTARDirector

COMPANY SECRETARY:

MR. IFTIKHAR AHMAD

AUDITORS:

M/S YOUSAF & SONSCHARTERED ACCOUNTANT

BANKERS:

HABIB BANK LIMITEDNATIONAL BANK OF PAKISTAN LTD.ASKARI COMMERCIAL BANKSONERI COMMERCIAL BANK



PLATINAM COMMERCIAL BANKBANK AL- FALAH LIMITEDEMIRATES BANK LIMITEDBANK AL-FAISAL

MILLS:

35-KM BAHAWAL PUR ROAD, MULTAN (WEAVING UNIT) SHAHBAZ PUR ROAD RAHIM YAR KHAN (SPINNING UNIT)

REGISTERED OFFICE:

1ST FLOOR,INTERNATIONAL PLAZA,BOHRA STREET, MULTAN CANTT.MULATN

HEAD OFFICE1ST FLOOR INTERNATIONAL PLAZA, BOHRA STREET, MULTAN CANTT.MULATN



COMPANY PROFILECOMPANY NAME:

AHMAD FINE TEXTLIE MILLS LIMITED:

VANUEMILLS: 35-KM BAHAWAL PUR ROAD, MULTAN (WEAVING UNIT) SHAHBAZ PUR ROAD, RAHIM YAR KHAN (SPINNING UNIT)

HEAD OFFICE: 1ST FLOOR, INTERNATIONAL PLAZA, BOHRA STREET, MULTAN CANTT. MULTAN

The company was incorporated in 1991 as a public limited company under the company’s ordinance, 1984.

The mills are situated at a piece of land measuring 240 kanals in Rahim yar khan & 300 kanals at Multan. The company does not enjoy tax Holidays for some period from the date of its company production.

The company has imported most modern spinning unit from different advanced countries, which is the best combination. Letter of credit for import of machinery was established by the Muslim commercial bank ltd.



GROUP PROFILE

There are certain other organizations, which are managed by the same group. A list is as follow: -

1. AHMAD FINE TEXTILE MILLS LTD. RAHIM YAR KHAN

2. AHMAD FINE TEXTILE MILLS LTD. ADDA BASIRA, MULTAN

3. FATAMA SUGAR MILLS LTD.

4. RELIANCE TEXTILE MILLS LTD.

5. RELIANCE WEAVING MILLS LTD.

6. FAZAL COLTH MILLS # 1

7. FAZAL COLTH MILLS # 2

8. FAZAL CLOTH MILLS # 3



ORGANIZATION STRUCTURE

The organization gram shows the structure of the company. It sows that head office and Production, Maintenance; Quality Control handles the Purchase and Sales Department and the Mills controls Administration.

The responsibilities and authorities can be summarized as follows: -

CHIEF EXECUTIVE

He is responsible for overall operation of the company and finally responsible for the quality of the products of the company.

GENERAL MANAGER/MANAGEMENT RPRESENTATIVE

He is responsible for quality maintenance, planning and upgrading of the project and also responsible for all activities at the Mills. General Manager as Management Representative.

QUALITY CONTROL DEPARTMENT/MILLSMANAGER

This department is responsible for all testing and inspection activities to predetermine the information obtained are issued to make decisions for raw material purchases, process control and corrective actions.

TECHNICAL MANAGER

He is responsible for the production and maintenance department.



MAINTENANCE DEPARTMENT

This department is responsible for the proper function of all the machinery. This department has prepared a preventive maintenance schedule and maintained the plant according to it.

PRODUCTION DEPARTMENT

This department is responsible for the activities about quality production and its affecting aspects. Te technical Manager is responsible for production and he shall repot to the General manager. He is also responsible for the training of the production staff.

ADMINISTRARION DEPARTMENT

This department is responsible to receive the ginned cotton, its storage and waste handling, it is also responsible for the issue of raw material according to the laboratory instructions, for the Blow Room prior to the production. It also handles the packing and dispatch of finished yarn, saleable wastes, receipt/issue of general goods stores. It also arranges the Internal Audits.

SO - 9002 COORDINATOR

He is responsible for the documentation and documents control, training records and also maintain the minutes of the meetings.

PURCHASE DEPARTMENT

Responsible for purchasing the Raw Material (Cotton, Yarn, Spare Parts, Equipments and Packing Material).

SALES DEPARTMENT



Sales Department is responsible for optimum sales, smooth flow of shipment and provide the after sales services to the customers.

RESOURCES

The Mills executive management commits to provide all resources required for the effective implementation and maintenance of the quality system. The management review activity acts as a forum to address all resources requirement and approvals.

MANAGMETN REVIEW:

In order to control the quality system and to ensure its continuing effectiveness, a system of management review meeting has been instituted.

The management review Meeting is held every month in order to discuss all quality related issued. The agenda will always include: -

* Corrective Actions arising from previous meeting.* Customer Complaints.* Result of Corrective Actions.* Resources Requirements.* Other quality related matters.* Achievement of Quality Objectives.

Complete records are maintained and kept by the Management Representative through ISO-9002 Coordinator.



OBJECTIVESOF THE COMPANY

The objective for which the company is established is all or any of the following; (and in constructing the following sub-clauses the scope of no one of the sub clauses shall be deemed to limit or affect the scope of any other sub clause): -

1) To erect, maintain, alter, extend and purchase plant and machinery for the purpose of increasing productions, or otherwise purchase of land leased or otherwise acquired for the company or for any of the purpose of the company’s business.

2) To insure with any company against losses, damages, risks and liabilities of any kind, which may affect the company either wholly or partially.

3) To open current or deposit accounts with any bank or bankers and to pay into and draw money from which accounts and to close such account.

4) To borrow or raise or secure the payments of money for the purpose of the company’s business from scheduled banks and other financial institutions.

5) To manufacture and process all sort of yarn and generally to carry out the business of spinning, manufacture of cotton yarn and of selling yarn and preparing process that may be necessary to purchase and vend raw materials and manufactured articles.

To resell, exchange and repurchase let out for higher, or otherwise deal with lands and building, machinery, plants and materials and other things necessary for the purpose if the company and also to



purchase, sell or contract for the purchase or sale for immediate or future delivery of cotton yarn and other material and all sorts of chemicals and preparing and spinning and other articles and other things for the use of any license or invention or for the exercise of any method or process useful for the company.

Labour Welfare Labour Colony Labour Welfare School.

ADMINISTRATIONDEPARTMENT

ADMINISTRATIONMANAGER

LABOUR SECURITY GATE TIMEOFFICER OFFICER KEEPER OFFICER



ADMINSTRATION DEPARTMENT

This is very important department of the organization. As the name shows this department is to administer all the operations of the organization.

This is headed by the R.D. (Resident Director) of the company. It deals with all the matters that are related with personnel Section of this department are divided into officer as under: -

A) Labor OfficeB) Security Guard OfficeC) Gate OfficeD) Time Office

A) LABOUR OFFICE

As required by the Labor Department of the Government of Pakistan this office has been set up to deal with all the matters that are related with labor.

It is the duty of Labor Office to inform the management regarding update information of legal requirements concerning the labor and company affairs. It is his duty to satisfy himself regarding payment of bonus, gratuity and other benefits to labor.

B) SECURITY GUARD OFFICE:



The main objective of the Security Office is to safe handling of the good form / to the mail premises. For the achievement of such objectives a team of security guards has been employ by the company.

C) GATE OFFICE:

This office has been made to keep the record of each and every thing coming into and going out of the organization. For this purpose Gate Office Clerk maintains two types of registers called: -

1) Outward Going Pass (Register)

2) Inward Going Pass (Register)

C) TIME OFFICE:

This office keeps the record of all the workers on Time Cards and Pay Register for the final costing of the workers` salaries..

1. It is also helpful in keeping the record of workers at attendance register, which is then used to prepare salaries, bonus on the monthly basis for all workers.

2. It also keep the record of the leaves, number of days worked of all the workers.

3. It also keeps the record of Social Security. EOBI, Education Cass etc. of each worker/employee payable to the Government treasury.



FINANCE DEPARTMENT

FINANCE CONTROLLER/FINANCE MANAGER

i) Deputy F. Accountant ii) Deputy F. Accountant

Accounts Accounts Accounts Accounts Assistant Assistant Assistant Assistant



The Finance Department is situated at head office MULTAN. The Finance & Commercial Manager Mr. Naveed Amir who is a highly qualified and experienced person heads it. It also deals with both the units of spinning & weaving units. The staff of the finance department is also very competent and hard working.

JOB FUNCTION OF ACCOUNTS MANAGER

The Accounts Managers are responsible for the following function: -* To look after and control the work of the department * To sign:

(a) Cheques(b) Cash/Bank payments, vouchers, journal voucher etc.

* To check monthly/quarterly/annual accounts, funds movement sheets, stock statement for banks, reconciliation of accounts statements.

* To deal with banks and cotton & yarn suppliers in respect of payment and audits etc.* To prepare projected profile and loss statements, balance sheet and cash flow

statements.* To prepare projected profile and loss statements, balance sheet and cash flow

statements.



ACCOUNTING DEPARTMENT

The accounts departments of the company are responsible for the entire accounting process of the organization and for an efficient handling of the accounts the Accounts Department mainly performs the following functions: -

1.MAINTENANCE OF PURCHASE ACCOUNT:

The Assistant Accountant is responsible for entire accounting process to record the purchase made. The process to purchase and afterwards records the purchase is as follows: _

i) The requisition department sends Demand Note to main store.

ii) If the goods are not available, than store sends that Demand Note to the purchase department who decides either to purchase locally or import the goods.

iii) After approval for Director the purchase department prepares a purchase order and the purchase is made.

iv) The goods are received at head office. Purchase department prepare four copies of delivery order and the goods are sent to the mills with three copies.

v) When goods are received on gate, an Inward Gate pass is made. After physical checking of purchase in the store, they prepare store receipt Voucher in triplicate. The goods with two copies of SRV are sent to the relevant department for quality checking.

vi) When department approves goods then one copy of SRV is sent to purchase section and one to the accounts department. Purchase department attaches Inward Gate Pass and original bill of the supplier along with that approved SRV and sent to the accounts department.

vii) Accounts department entcom pares the copy of SRV with the copy of same SRV sent to them from the mills and prepares a voucher and enter the transaction in the relevant books.



2.MAINTENANCE OF SALES ACCOUNT:

The company sale is of two types: -

1. Finished Product Sale.2. Waste Sale.

1.FINISHED PRODUCT SALE:

(a) The company’s finished product is yarn at Rahim Yar Khan & Fabric at Multan. First of all a contract is made between the company and the customers. Then the goods are forwarded or supplied to the customer.

b) A detail of goods sold is entered on the bill with reference to its description, quantity, are per unit and the total amount of the goods sold.

(c) When goods are reached on gate an outward Gate Pass is prepared and both the document are sent to the accounts office. The accounts office records the transaction in the sales book, customer ledger and ultimately in general ledger.

2.WASTE SALES:Waste sale is of the following types: -

i) Soft Waste Sale:When cotton is blowed in blowing room, some quantity of cotton is wasted during its process. Sometimes a defected or sub standard bale of cotton is also sold as soft waste.

ii) Hard Waste Sale

Sometimes the yarn produced by the company is not up to the standard. The company sells its substandard product as hard waste.

3.CASH AND BANKING TRANSACTION:



The cash and bank sections of the accounts department make payment to the suppliers and receive payment from the customer. This section also maintains a cashbook in which all receipts and payment are recorded.

PAYMENT TO SUPPLIERS

On receipt of the proper purchases documents, the cash, bank payment, voucher of the party is prepared and the payment is made mill site for mill employees. Salaries are fixed and are prepared by earning the attendance record of the employees. Addition of different allowances deductions of different liabilities and funds contribution are made there from. Pay slips of all employees are prepared and distributed to their relative account number by sending a bank advice. In this way salaries are paid to the employees. When payment made 3 ½% tax deduct of NTN not allowed then 5% deduction made

WAGES

All sorts of wages are prepared at the mill site. For this purpose, record of data and hours worked for each worker is maintained. Therefore the wages are calculated accordingly and payment is made to the workers.

5. INVENTORY CONTROLLING

Inventory controlling plays an important role in any manufacturing concern. There are two types of store in Ahmad Fine Textile Mills Ltd., which are: -

1) The main Store

2) Raw Material Store

1) The main store contains:i. Spare parts.

ii. Electric goods.

iii. packing material.

iv Stationary

v. Workshop

ii) While the raw material store contains:



a) Cotton

b) Polyester.

c) Acrylic

d) Viscose.

The functions of store controlling can be further sub divided into two parts:-

1) Purchase for stores.

2) Stores Issued

PROCEDURE OF STORE PURCHASES

In Ahmad Fine Textile Mills Ltd, the company purchase come material on regular basis such as stationary, packing material etc. and maintains the average quantity of theses goods every time, these are considered as stores. Other store goods such as spare parts, electric goods etc. are purchased on requirements.

When a department needs any goods, it prepares a Demand Note for these particular goods and sends it to the shift in charge, which signs it. Then this demands sent to general manager for approval. After it is delivered to the main store. Store department examine the demand and then enters it in demand register. This demand is then sent to etc purchase department.

On receipt of demand note from the mills, the purchase department decides either the goods are available form the local market or it should be purchased from the foreign market. If the required goods are note available in local market, the demand is transferred to import department to purchase the goods from foreign markets.

Otherwise quotations are called oft the required goods and then purchases Assistant prepare the comparative statement of the prices of the goods. The comparison statement is first examined by the purchase Manager and then it is sent to the resident directors for approval. After approval the goods are purchased from the specified supplier.

The goods are received ate the head office. The purchase department sends all the goods to the mill with three-purchase department advice.



The goods are received at mill and the details of the goods are entered in the Inward Register and Inward Pass is prepared. The goods then reach the stories. A store receipt Voucher is prepared. The goods then reach the store and store receipt voucher number is written on the Inward Gate Pass. The concerned foreman/in charge is called to inspect the goods and the sub standard goods are rejected which are returned to the supplier. The goods then are recorded on the store receipt register. After that they are posted to Bin Card.

PROCEDURE OF STORE ISSUE

In Ahmad Fine Textile Mills Ltd., store department has issued an issue book to every department. The requisitioning department fills the store issue note and signs it from departmental heal and mills manager. The storekeeper issues the goods to the specified department and makes an entry in the issue file. Three copies of the store issue note are prepared. One copy is kept in the relevant department, the second copy is sent to the accounts department and the third copy is kept in the store record.

BOOK KEEPING

The following books are maintained at the Ahmad Fine Textile Mills Ltd. Ltd…-

1. General Journal

2. Ledger

3. Purchase Book

4. Sales Book

5. Supplier Book

6. Customer Ledger

7. Cash Book

8. Bank Book

PREPARATION OF FINANACIAL STATEMENT

Different financial statement such as balance sheets and income statement are prepared to show the working of the business. The accounts department prepares the Trial Balance of a Company every month. And then Accounts Manager prepares the other financial statements.



PURCHASEDEPARTMENT

PURCHASE DEPARTMENT

PURCHASE MANAGER

Purchase Officer



Purchase Purchase Assistant Assistant

PURCHASE DEPARTMENT

The efficiency of purchase department directly effects the production and efficiency of the company. The purchase department of Ahmad Fine Textile Mills Ltd. is in the head office, under the control of purchase manager Mr. Naeem Zia ,who is highly qualified and experienced person. The staff of the department is also very experienced.

JOB FUNCTION OF PURCHASE MANAGER

Purchase Manager is responsible of the following functions: -

i. To fulfill the demand of purchase of the department.ii. To maintain stocks and store of goods level within the

approved budget.iii. To control on purchase price of stores.iv. To exercise general checking of store.

TYPES OF PURCHASE:

The purchase in the textile industry is of two types as given below: -

1. Purchase of goods.2. Purchase of raw material.



PURCHASE PROCEDURE OF STORE GOODS:

The stores are used to buffer the emergency conditions; therefore no limit is fixed to purchase these types of goods. These goods are consisting of spare parts, electrical goods and other general items.

When a department needs any goods, it prepares a Demand Note of these particular goods and sends to the Shift Incharge, which signs it. Then this demand is sent to the General Manager for approval, and then it is delivered to the main store. Store department examine the demand and then enters it in Demand Register. This demand is sent to the purchase department. Purchase department decides either to purchase the goods locally or form foreign markets.

FLOW OF PURCHASE RAW MATERAIL:

The directions make the raw material purchase. The directions negotiate with the supplier. The supplier sends the cotton to the specified unit where cotton is received at gate and Gate Inward Pass is prepared. The cotton is unloaded in go down after measuring the weight. A weigh statement is prepared when the cotton is weighed.

ARRANGEMENT OF ITEMS IN MAIN STORE

The main store is categorized in different sections. The main sections are as: -

1. BLOW ROOM 2. CARD 3. COMER4. DRAWING 5. SAMPLE 6. RING7. AUTO CONE 8. ELECTRICAL 9. WORKING10. AUTO CONE (AC)

With every stand of an item Bin Cards are placed. On these bin cards the Issue or Receipt of different amounts of the items is recorded. Theses cards also help to locate the items.

PROCEDURE TO ISSUE ITEMS FROM STORE



In Ahmad Fine Textile Mills Ltd., store department has issued an “Issue Book” to every department. The requisitioning department fills the store issue note and gets approval form the General Manager mills. The store issues the required goods to the specified department. The storekeeper at that time makes required entries in the Issuance Register at mill. Three copies are prepared, one copy is kept in department, second copy is sent to accounts and the third copy is kept in the record at store.

PRODUCTIONDEPARTMENT




GENERAL MANAGER

Administraion Manager


Technical Manager

Mills Manager

Electric Manager

Supervisor

Labor Officer

Time Record Officer

Gate Officer

Security Officer

Assistant Manager

Foreman

Spinning Manager

Assistant Spinning Manager

Foreman



Weaving ProcessThe flow of process of the production of Grey Fabrics is in the following:

Wrapping Sizing Drawing Inn

Loom sheds

Inspection Department

Folding Department

Packing Department

Warping Section

It is the first section of weaving production unit. Yarn is spun on paper cones in spinning mills, which is rolled on beams in wrapping machines, considering the total number of ends in a specific contruction of the fabric.

WRAPPING DEPARTMENT



It is the first section of weaving production unit. Yarn is spun on paper cones in spinning mills, which is rolled on beams in wrapping machines, considering the total number of ends in a specific construction of the fabric.

SIZING DEPARTMENT

Unsaved beams received Warping are processed in this section. In this section, sizingChemicals, which include Maize starch, PVA, Beveled, Sized CB, Wax etc are cooked in Water in a specific ratio and is applied on yarn ends in sets, and ends are dried thought Steam, which comes from Boiler

DRAWING INN DEPRTMENTIt is the backbone of the Weaving unit manufacture the Fabric. Sized beams are set on a looms to provide the Warp Ends. Among Warp ends, weft picks are inserted through air pressure, which finally produce the Fabric.

INSPECTION DEPARTMENT

The Fabric after loom shed came in the inspection Department, where the Fabric checked by Quality checker and the defective Fabric separately packed in the forms of Bales and rolls.

FOLDING DEPARTMENT

This is the last department of weaving unit, where the Fabric received from Inspection department packed in the forms of Rolls or Bales according to the Customer requirements.

Shed 01 48 looms

Shed 02 50 looms

Folding SectionThis i s a l so ca l led qua l i ty control sec t ion i . e . qua l i ty of the Grey c lo th i s checked.

Cutter Section

Then this cloth is sent to the cutter section & according to the demand if

the customer that the wants 120 up, 110 up, 80 up, 40-79 cut, 55 cut & so



MARKETING DEPARTMENT

MARKETING MANAGER

Import Officer Export Officer Marketing officer



MARKETING DEPARTMENT

The market department of Ahmad Fine Textile Mills Ltd consists of three section: -

Local Sale Export Section Import Section

Local Sale

The local sale is made from the head office at Muzffargarh. Yarn is supplied mainly to the weavers and partially to the knitters. Volume of local sale is very much high.

YARN PRICES

As the yarn size decreases the prices of yarn increase. It means that higher the count number the more will be the price. It is because as the count numbers increase the size of yarn decrease but price increase.



It is due to the reasons that think yarn gives more production in pounds while the thin yarn gives less production in pounds. Thus as the production decrease the cost will increase and so the price will automatically increase due to the more cost. That is why the higher counts have prices.

PRICE STRATEGY:

The prices of the yarn fluctuate in the market on day-to-day basis. The price of every textile mills is different for the some count.

The Marketing Manager of Ahmad Fine Textile Mills Ltd has introduced the fixed price strategy of their yarn in the market. Their prices do not change with the market. This is because they produce very high quality tarn on the latest machinery. Although they face some problems to this fixed price but overall they receive good response from the parties, which rely on quality.

EXPORT SECTION:

The whole yarn is sold in the local market except a little portion, which is exported. This little portion is exported to Middle East and Japan, U.S.A. and other worlds advanced countries. About six months ago, export was very good due to high rates. But in ordinary conditions, we shall see it in detail in export chapter.

IMPORT SECTION:

The import section of the Ahmad Fine Textile Mills Ltd is headed by the import discharge that is highly qualified and dedicated person. The Import Officer assists him.



EXPORTDEPARTMENT

EXPORT MANAGER

Assistant Export Manager Assistant Export Manager



The export department consists of export manager who is a qualified and experienced person. His subordination is also not less than him in efficiency and experience. During the current year, the company exported a lot of cotton yarn. The directions are hopeful that approximately 70% of the total production will be exported in the near future.



EXPORT PROCESSThis process starts form a bargain. A buyer contacts the company and tells them about their demand. This contact may be direct or through an agent. In response to this contact, the director often settles the price and terms and conditions thorough visit, fax, telex, telephone etc. when the contract is matured three copies of the contract are issued to the buyer. They sent back one copy to Ahmad Fine Textile Mills Ltd., which is in full arrangements and conditions. If any agent is involved, three copies are sent to the agent.

After agreement of both the parties on terms and conditions, the buyer opens letter of credit in his bank. That foreign bank sends that letter of credit to the bank in Pakistan and that bank gives the original letter of credit to Ahmad Fine Textile Mills Ltd.. The company after fulfilling the requirements of the letter of credit dispatches the material to be exported.

To get letter of credit, company has to fill the following documents: -

1) INVOICE

2) PACKING LIST

3) CERTIFICATE OF ORIGIN

4) FORM E

5) BILL OF EXCHANGE

QUOTA RECTRICTIONS

After discussing export process the main thing is to discuss export process in those countries on which quota is levied. Mostly European countries use quota restrictions. These countries inform exporting that how much they can export. Then through associations like Textile mills Association the companies are informed about the quota. The association distribution the quota on the basis of option and past performance. If a company, due to certain reasons, cannot expert then they sell the quota in the open market.



ROLE OF GOVERNMENT IN EXPORT:

To boost up exports, Government has given rebate facility to the exports. The Ahmad Fine Textile Mills Ltd. is also availing this facility. They are getting rebate on packing material and the chemicals used in the polythene bags.



DATAPROCESSING

DEPARTMENT

DATA PROCESSING DEPARTMENT

E.D.P. MANAGER

Programmer Computer Co-ordinator

Assistant programmer

Operator Operator Operator



Operator

DATA PROCESSING DEPARTMENT

A successful businessman always has a curiosity and keenness to know about the requirements of the age and tries to adopt the new technology to services in the competing world. In the mid of 19th century a same invention attracted all the progressive and foresighted people. It was the introduction of the computer. The computer makes able a businessman or industrialist to expand his business. Keeping the manual records up to date is becoming more and more time consuming. Therefore a computer allows you speeding up the processing of transaction and makes enable to expand the business without the need of additional staff.

APPLICATION

The areas, which have computerized, are as under: -

i. General ledger

ii. Inventory control

iii. Payroll accounting

iv. Purchase accounting

v. Administration block

vi. Sales and receivable

vii. Imports

viii. Exports

There systems help the company in various aspects i.e. time decision, accuracy of work etc. and keeping is ahead in competition.



FUNCTIONS OF DATA PROCESSING DEPARTMENT

I. TrainingII. ServicesIII. Development

M. I. STEAM

FINANCE CONTORLLER

Deputy Finance Manager

Assistant Finance Manager Assistant Finance Manager



INTRODUCTION TO M. I. S. TEAM

The management information teams of the Ahmad Fine Textile Mills Ltd. include very competitive and qualified persons. They produce report of different nature. Theses reports are presented to the Finance Controller and the company Directions. Theses reports help the company in timely decision.

These report include: -

Production Report Daily

Bank position Report Daily

Consolidation Production and Sales Repot Monthly

Master Payment Plan Monthly

Fund and Non Fund liabilities Monthly

Yield and Waste Report Monthly

Inventory Report Monthly

Consolidated Production and Sales Report Monthly

Consolidated Balance Sheet & Profit & Loss Account Monthly

Ratio Analysis Report Monthly

Stock Valuation Report As and when required

Yarn Costing Report “ “ “ “

Those all reports generated in minutes and hours on requirement very accurately and stored on auxiliary media for the future use. Thus M. I. S team is considered as an essential part of the company because of its performance.



ISO 9000

I. S. O. 9000

The ISO 9000 is major consideration for the very type of organization and especially for the industry. No firm can export its production products in future without



ISO 9000 certificate. Realizing the situation organization is analyzing the situation for necessary action. This discussion includes the following topics:-

ISO 9000:ISO 9000 quality system standard are currently one of the highest criteria of

quality in the world trade. Up to now more than 65 countries in the world have officially adopted this standard.

The European Community (EC) is the most active region in promoting them. Presently companies that produce regulated products, such as medical devices, must be registered. The European Community encourages all producers to register their products.

QUALITY OF MANAGEMENT IN PAKISTAN

The industrial culture undergoes changes from traditional information management to modern formal management.

With the wide spread establishment of management schools, increasing collaboration with international companies, and deregulatio9n policies of the Government, the management crises in industries is minimizing.

The industries are expanding and people are looking more and more into new avenues for exports. Due to this phenomenon, the competition in both local and export market is increasing.

QUALITY COST IN PAKISTAN

In a survey of more than one hundred companies in Pakistan, through in plant training programs and counseling it was found that the rate of rejection produced in the average Pakistani industries is about 10%. In monetary terms, this ranged from Rs.20 to 150 million per company per year.



It is estimated that annual collective loss to Pakistani industries due to Nonconformance in quality is more than Rs.100 billion.

Total cost of quality is even higher. It is an incredible loss about which few are aware of. This national problem needs immediate attention jointly by the Government and the industries.

WHAT IS ISO 9000?

The ISO (International Organization for Standardization) is a world wide federation of national standard bodies who prepare and issue standards.

The ISO 9000 series was issued for the first time in 1994 and had a great impact on the manufacturing industries. They establish requirements for Quality Assurance and Quality Management Systems of manufacturing, services and other organizations.

They do not refer to any specific technical specification of products. The elements that are described in then cover organizational structure, personal responsibilities, authorities, training procedures, documentation and records, process control and resources allocation for production and all related departments that directly affect the product quality.

These standard are generic and apply to all types and size of companies. However, they are written in general terms. While applying these standards to a company, they must be interpreted professionally to suit the applicability. Clear concepts, professionalism and involvement of all employees (from top to bottom) are required.

The basic aim of ISO 9000 is to provide a management framework to prevent “Non-Confirming” in every stage, from design through to after sales servicing. It is a basis for contracts between purchaser and suppliers.

ISO 9000 registration is given only after assessment by an approved registration body.



There are a number of bodies operating worldwide. A company seeking registration in free to chose any approved registration body.

After a company applies to way registration body, its quality auditors, who are specialist in two areas, formally visit the plant, interview personal, evaluate the plant and if it complies with the standards, issue a certificate to the company.

ABOUT THE COMPANY

The ISO 9002 was awarded to the Ahmad Fine Textile Mills Ltd. four years before. Now the products of the company are made are maintained the quality. Mr. Anwar is the Coordinator for ISO 9002 program in the company. All the related persons, authorities are doing their efforts to continue the production of cotton yarn up to international standard. A full time ISO 9002 Coordinators is appointed. The organization is enjoying healthy uplift export after maintaining this standard.

Observations & Suggestions As the Textile Industry is in crisis but Ahmad Fine Textile Mills Limited is

performing very well in such difficult economic conditions. The avenues are always open

for further improvement. I hope that the suggestions given by me will not only benefit to



the management for getting business but the workers will also efficient in performing

their duties.

I would like to recommend that the management should develop

some policies for the promotion of efficient workers. As there is

no any policy for the promotion of workers so it is creating unrest

among the workers. The management should make sound policies

for the promotion of efficient workers. This will not only increase

the productivity of workers but the management can low the

turnover rate of employees.

The culture of the organization should be made according to the well

established organization.

The control of the Top Management should be strict over the employees

so that employees will take responsibility for their assigned job.

There is need for refresher courses for the managerial level employees. If

the owners would make arrangement to provide training to the employees

then they would work efficiently. By doing this the productivity of the

employees will increase.

Proper training should be given to new employees as well as to existing

employees for improving their efficiency and productivity.

There is centralization of authority. All the decisions are taken by the Chief Executive and Working Directors. The authority should be decentralized, because delegation of authority creates responsibility. If the management will delegate some authority to the employees then employees will feel themselves responsible and they



would work with zeal, by doing this the top management can save important time which will be utilize in other matters which will benefit the organization. Because the delegation of authority creates the confidence among the employees and they will perform their work efficiently.

There is flat rate of increment for all the employees. This flat rate is also

minimal. This is breeding discontent among the employees. This flat rate

should be abolished and increment should be given on the basis of

performance and efficiency.

There is no any procedure for evaluating the employees and hence there are no

extra benefits to the efficient employees. The Owners should start some

criteria for the evaluation of employees and there should be some reward

for efficient workers. This reward may be non monetary such as

“Employees of the Day”, “Employees of the Month”, “Employees of the

Year”. This will not increase any monetary burden but will increase the

efficiency and productivity of the worker. Similarly, some monetary

benefits should also be given to the employees on better performance of

the work.

There is lack of staff members in the office, so new employees should be appointed for the proper working and removing burden on other employees to achieve efficiency and better results.



RATIO ANALYSIS

PROFITABLITY ANALYSIS

Current Ratio

Current Assets = Rs 279798025Current Liabilites = Rs 310155770

0.92:1

Net Profit Ratio

Net Profit = Rs Rs 93037713Sales = Rs 715149632

0.13:1

Absolute Liquid Ratio

Absolute Liquid Ratio = Rs Rs 3236492Current Liabilites = Rs 310155770

0:0.1Standard Ratio 5:1

Which is below than standard, which shows company is not financially sound.

AUDITORS' REPORT TO THE MEMBERS

We have audited the annexed balance sheet of AHMED FINE TEXTILE MILLS L[?.ilTcD, ss a: ^ep^-^er 30, 2002 ond the related profi* and loss account, statement of changes in equity and cash now statement together with tho notes forming part thereof, for the year then ended and we



state that we have obtained all the information and explanations which to the best of our knowledge and belief, were necessary for the purposes of our audit1( is the responsibility of the company's management jo establish and maintain a system of iniemai control, gnd prepare and present the above statements in conformity with theapproved accounting standards and the requirements of Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.'A's conducted our audit in accordance- with the auditing standards as applicable in Pakistan. These standards require that we pian and perform the audit to obtain reasonable assurance about whether the above said staiements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as weli as, evaluating the overall presentation of the above said statements. Ws believe that our audit provides a reasonable basis for our opinion and, after dua verification, we report that;a) in our opinion, proper books of account have been kept by the Company as required by iheCompanies Ordinance, 1984 ;b) in our opinion ;(i) the balance sheet and profit and loss account together with the notes thereon have been

drawn up in conformity with the Companies Ordinance, i98d, and are in agreement wiih the books of account and are further in accordance with the accounting policies consistently -,^!i£d;

(ii) .-.5 expenditure incurred during the ysar was for the.pi-'pose of the Company's busin&s^ .and(iii) the business conducted, investments made- and the' expenditure incurred during the yearwere in accordance with the objects of the Company .c) . in our opinion and to the best of our information and according to the explanations given to us , the . balance sheet, profit and loss account, statement of changes in equity and cash flow statement ^"^'•''iGr with the notes forming part thereof conform with approved accounting standards as "i^'^-'-.bie in Pakistan, and give the information required, by the Companies Ordinance,1984, in the manner so required and respectively give a true and fair view of the state of the company's affairs as -•' f—'sr-^c- 30, 2002 and of the profit, changes in equity .and its cash flows for the year thei,,„...,,..,,. -'-•-« anri ushr Ordinance, 1930 (Xvii




Documents

Internship Report on Ahmad Fine Textile Mills