Submitted to

Sir Faisal Iqbal

Department MBA (Finance)

INTRODUCTION OF REPORT

TEXTILE:

A textile is a flexible material comprised of a network of natural or artificial fibers often referred to as thread or yarn. Textile are formed by weaving, knitting, crocheting, knotting or pressing fiber together.

The production of textiles is an ancient craft, whose speed and scale of production as been altered almost beyond recognition by industrialization and the introduction of modern manufacturing techniques. Many textiles have been in use for millennia, while others are recent inventions. The range of materials has increased in the last century with the introduction of artificial fibers in the 1920s and 1930s.

Textiles can be made from many materials. These materials come from four main sources: animal, plant, mineral, and synthetic. In the past, all textiles were made from natural fibers, including plant, animal, and mineral sources. In the 20th century these were supplemented by artificial fibers made from petroleum.

When Pakistan came into being there were only 16 textile mills out of which only 12 were in operation. It grew to 70 in 1957 as industrial development take place. Now days there are 596 textile mills out of which 442 are in operation. The export revenue of textile industry contributes a large share to the GDP of Pakistan.

Nishat Mills Ltd. Is Pakistan s largest textile processing capacity having 176500 and 458 weaving machines. NML produces ring-spun cotton and blended yarn of coarse, medium and fine quality counts and commands a premium in local as well as overseas market.

HISTORY OF THE ORGANIZATION

(NISHAT GROUP)

THE FOUNDER:

A man of vision, courage and integrity, Moan Muhammad Yahya was born in 1918 in Chiniot. In 1947when he was running a leather business in Calcutta, he witnessed the momentous that swept the Indo-Pak Sub-Continent and resulted in the emergence of Pakistan like many of his contemporaries, he also migrated to the new country to help establish its industrial base. His is a story of success through sheer hard work and an undaunted spirit of enterprise. Beginning with a cotton export house, he soon branched out into ginning, cotton and jute textiles, chemicals and insurance, he was elected chairman of All Pakistan Textiles Mills Association (APTM), the prime textile body in the country. He died in 1969, at the age of 51 having achieved so much success in so short period.

NISHAT MILLS LIMITED (NML) commenced business in 1951 as a partnership concern, which was converted into private limited company in 1959. In 1961, the company went public and was listed on the Karachi stock exchange, the only stock exchange in the country at that time.

NISHAT MILLS LIMITED started out as a weaving unit with 500 semi-automatic looms; later10000 spindles were added, laying the foundation on nations biggest textiles composite project. Composite project at Nishat Mills Limited Faisalabad covering 98 acre of land is providing all production process under one roof i.e. spinning, weaving, processing, stitching and power generation.

NISHAT GROUP HAS FIVE-CORE BUSINESS NAMELY:

1. TEXTILES.

2. POWER GENERATION.

3. BANKING.

4. CEMENT.

5. INSURANCE.

The textile business is further subdivided into two textile divisions: NISHAT FAISALABAD and NISHAT CHUNIAN. The textile capacity of the group is the largest in the country. An addition of 20000 new spindles, 100 new air jets looms and new dyeing plant has increased the existing capacity of 242000, spindles, 740 looms and dyeing and finishing capacity of 5 million meters. The group is the largest exporter of textile products from Pakistan for more than a decade.

NISHAT GROUP has also been a pioneer in power generation in the private sector of the country. Nishat setup the first power generation unit in the private sector in 1995.

In 1992, Nishat Group acquired D.G Khan Cement Company Limited. From the Government of Pakistan. DGKCC is the second largest project of the group and is ideally located in the heart of the country, with easy access to transportation all over Pakistan. DGKCC Unit NO. 1 has a capacity of 2400 tons per day. A new unit having the capacity of 3600 tons was setup in 1998; International Finance Corporation and Common Wealth Development Corporation have Financed this unit. With the addition of unit no.2 DGKCC has become the largest manufacturer of cement in Pakistan.

In 1991, NISHAT GROUP ventured into the financial sector through the acquisition of Muslim Commercial Bank (MCB). MCB has grown ever since and is now the largest bank in the private sector. MCB has a network of over 1200 branches employing over 12500 people.

It is our conviction that every successful organization is a reflection on the commitment, dedication, and team spirit of its employees, and Nishat is no exception. Our people are all imbued with the spirit, a fact manifested in our rapid growth and low turnover.

Nishat continue to strive to be a better group today than what they were yesterday, for their customers, for their shareholders, for their investors, for the environment, for the community and for their employees, for it is with them that Nishat has achieved so much success in last 15 years.

PROFILE OF COMPANY

NISHAT MILLS LIMITED:

Nishat Mills Limited (NML), commenced business in 1951 as a partnership concern, which was converted into a private limited

Company in 1959. In 1961, the company went public and was listed on the Karachi Stock Exchange, the only stock exchange, in the country at

that time.

Nishat Mills Limited started out as a weaving unit with 500semis automatic looms. Later on 10000 spindles were added, laying the foundation of nations biggest textile composite project. Nishat Mills Limited today, has 165800 spindles, 338 sulzer shuttles-less looms and 180 TSUDAKOMA air jet looms.

Nishat Mills Limited is the single largest textile composite unit in Pakistan, with an installed capacity of 183416 spindles and 590 looms, including 482 high-speed Air jet looms. The company is a leading exporter of textile products having extensive spinning, weaving, dyeing, printing, finishing and stitching facilities. Nishat Mills Limited is the flagship company of the NISHAT GROUP OF COMPANIES one of the largest conglomerates with interests in the textiles, cement and financial sector. NMLs product range is composed of various varieties of yarn, gray fabric, processed fabrics and made-ups.

The company is making strategic investment worth a total of PKR 440 million in paper sack and garment factory namely Nishat shuaiba paper products limited. Returns on these investments will be in the form of dividends.

In 1996 two associated companies, namely Nishat Fabric Limited and Umer Fabric, were merged with NISHAT MILLS LIMITED FSD, increasing the latter weaving capacity by 144 Suzler Shtter less weaving machines and add power generation capacity of 36MW.

MISSION STATEMENT

To provide quality products to customers and explore new markets to promote/expand sales of the company through good governance and foster a sound and dynamic team, so as to achieve optimum prices of products of the company for sustainable and equitable growth and prosperity of the company.

VISION STATEMENT

To transform the company into a modern and dynamic yarn, cloth and processed cloth and finished product manufacturing company with highly professionals and fully equipped to play a meaningful role on sustainable basis in the economy of Pakistan.

GUIDING VALUES OF NISHAT MILLS LIMITED

CORPORATE VALUES:

Team work

Integrity

Control pollution and provide safe environment.

Commitment to buyers.

Maintenance of consistence standards.

Friendly environment for workers.

GOALS AND OBJECTIVES

THE OBJECTIVES OF NISHAT MILLS LIMITED AS UNDER:

The marketing goal was to achieve greater market share in the America, Spanish, French, UK, Japan, and others countries of the world.

The production objective is to provide product to their client as per agreement.

The most important objective is to implement an effective quality management system and to continually strive for its improvement.

The main objective is to achieve maximum profit.

It is also very important objective that give minimum markup and commission to the broker and bank.

BUSINNESS PRINCIPLE NML

Many companies have their own code of business principle. So Nishat has also code of businesses principle. In the code of business principle this is written that:

The company encourages representation of independent non-executive directors and directors minority interests on its board of directors. At present the board includes independent non-executive directors.

The directors have confirmed that none of them is serving as director in more than ten listed companies, including this company.

All the resident directors of the company are registered as taxpayers and non of them has defaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange.

No casual vacancy occurred in the board of director.

The company has prepared a statement of ethics and business practices which all board of directors and employees of the company have signed.

The board has developed a mission statement, overall corporate4 strategy and significant policies of the companys complete record of particulars of significant policies along with the dates on which they were approved or amended has been approved.

All the powers of the board have been duly exercised and the board has taken decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors.

No new orientation course has been arranged during the period.

The appointments of CFO, company secretary and head of internal audit, including their remuneration and terms and conditions of employment have been duly approved by the board.

PRODUCTS OF NISHAT MILLS LIMITED:

Nishat mills limited basically a textile mill. This is providing products in which:

YARN.

GRAY FABRICS.

PROCESSED CLOTH.

GARMENTS.

BED SHEETS.

CUSHIONS.

FLAT SHEET.

PILLOW CASES.

FITTED SHEET.

VALANCES.

COUTAINS.

BABY SETS.

TABLE LINEN.

EMBROIDERY.

WORKING ENVIRONMENT OF NML.

With the world fast becoming a Global Village and the Internet Information Technology Revolution, the issues of HUMAN RIGHTS and working condition are becoming significant important with each passing day.

Nishat can pride itself in having one of the most congenial and professional working environments of any company operating in Pakistan. Nishat is an equal opportunity employer and there is no discrimination on the basis of sex, caste or creed. All hiring and promotion decisions are taken on merit. All local laws are adhered to regarding different matters.

INDUSTRY BUSINESS PROCESS

Textile production is comprised of cotton ginning, cotton yarn, cotton fabric, fabric processing (gray-dyed-printed), home textiles, towels, hosiery and knitwear and readymade garments. These components are being produced both in the large-scale organized sector as well as in unorganized cottage small and medium units. The performance of these various ancillary textile industries is evaluated below:

COTTON GINNING SECTORE:

There are 1221 Ginning factories in Pakistan of which 1075 are in the Punjab and the remaining 146 are in sindh. The total capacity is approximately 20 million bales per year (assuming a 100 day ginning season). Against capacity, the total production of ginned cotton is 10.0 million bales suggesting an excess capacity of ginning in the country. Ginning is the sector, which is first in the process of value addition leading to readymade garments or other textile products. Unfortunately, the ginning sector is out dated and needs modernization.

COTTON SPINNING SECTOR:

The spinning sector is the most important segment in the hierarchy of textile production. At present, it is comprised of 453 textile units (50 composite units and 403 spinning units) with 9.2 Million spindles and 147 thousand rotors in cooperation with capacity utilizations of 83 percent and 17 percent respectively, during July-March 2005-06. The production of cotton yarn has increased to 1456.50 thousand tones in July-March 2005-06 against 1429.10 thousand tones last year thus, registering a growth of 1.9 percent.

WEAVING AND MADE-UP SECTOR:

The patterns in the weaving and made-up sector which is comprised of hosiery, garments, towels, canvas, and bed wear are different from those of the spinning sector. The weaving and made-up sector has three different sub sectors.

Integrated textile units.

Independent weaving units.

Power loom units.

Problem facing power looms encompass poor technology, scarcity of quality yarn and the lack of institutional financing for their development from an unorganized to an organized sector. The government under the Textile Vision

2005 has focused more on providing credit and other facilitative support to diversify the products. Especially to cater to the needs of the high value added sector like the garment industry.

COTTON CLOTH SECTOR:

The production of cotton cloth in the mill sector has increased at a tremendous pace by 15.6 percent during July-March 2003-2004 while sector has registered a modest growth of 5.9 percent in the same period. The export of cotton cloth witnessed an increase of 17.5 percent during July-June 2003-2004 in value terms and 2.45 percent in quantitative terms. The unit value of cotton clothe increased by 13.89 percent. This sector served as the main engine for downstream industries like bed wear, made-ups and garments.

TEXTILE DOWN STREAM INDUSTR:

The down-stream industry spearheaded the activities in the textile sector. Major products are hosiery, towels, canvas and bed wear, tents, cotton bags, readymade garments and fashion apparels. The government has already declared down-stream industry as a priority sector in the Textile Vision 2005.

The performance of the down stream sectors in analyzed below and it include following.

A) KNITWEAR INDUSTRY:

There are about 24000 knitting machines working in the country with approximately 60 percent capacity utilization. The sector is not only catering to domestic demand, but also has export potential. There is a greater reliance on the development of this industry because of the high value addition content of knitwear. Exports from this sector have witnessed a tremendous increase of 35 percent in value terms and 41 percent in quantity terms and added $1136 million to foreign exchange earnings during July-June 2003-2004 compared to $ 841 million during the same period last year.

B) READYMADE GARMENTS:

The garment industry is providing the highest value addition in the textile sector and is distributed into small, medium land large-scale units, most of them, having 50 machines or less. This sector is attracting considerable investment and many new units are coming up in the organized sector every year. This sub-sector is facing multi-dimensional problems like high value addition in competing countries and its inelasticity in shifting the burden of increased prices of yarn, cotton cloth or other inputs to the end user.

C) TOWEL INDUSTRY:

The industry is comprised of about 6500 towel looms in the country in the both the organized and unorganized sectors and is export based. It has a low demand within the country but export increased by 3.3 percent in quantity terms and by 10.1 percent in value terms, during July-June 2003-2004.

D) TARPAULIN AND CANVAS:

The production capacity of this highest raw cotton consuming is 100 million sq.meters. It is a low value added sub-sector and recorded a 2.9 percent decrease in the value of export and a 3.0 percent decline in quantity terms. This sector is mainly export based with 90 percent of its production exported and thats very important for NISHAT MILLS LIMITED.

FILAMENT YARN MANUFACTURING INDUSTRY:

There are 25 units engaged in the manufacturing of three kinds of filament yarn, namely, acetate rayon yarn (one unit with a capacity to manufacture 3 thousand tons) nylon filament yarn (3 units with an installed capacity of 2 thousand tones) and polestar filament yarn (21 units with an installed capacity of 95 thousand tons). The total installed capacity of all these units is 100 thousand tones, against which it produced approximately 78 percent thousand tons per annum. Recently, the hosier sector has started consuming synthetic Yarn for the export of knitted garments, which are contributing to a high value addition, as well as, diversification in exportable products.

ART SILK AND SYNTHETIC WEAVING INDUSTR:

The art silk and synthetic weaving industry is mostly concentrated in the informal sector and generally is operated in the form of family owned power looms units comprising 8 to 10 loom. There are approximately 90000 power looms in operation that prepare synthetic yarn in the country and about 30000 looms are engaged in the production of blended yarn while 60000 produce filament yarn. The export of synthetic textiles decreased by 11.4 percent in terms of quantity and 7.5 percent in terms of value during July-April 2003-2004 compared to last year. The importance accorded to SME by the government would go a long way in promoting this industry.

COMPANY BUSINESS PROCESS

FIELDS OF ACTIVITIES:

The companys production facilities comprise of spinning weaving, process, stitching and power generation.

SPINNING:

Nishat Mills Limited initially started business with 10000 spindles, which later on with gradual increase reached 165800 the entire machinery is from world-renowned manufacturers from Japan, China and Europe.

For reaching high quality standards, research and development is imperative for which Nishat Mills has state-of-the-art Yarn and Cotton laboratories with world class scaling standards. Cotton is procured at the start of the season to avoid any variation, which, can occur in the crop from time to time enabling NML to produce a consistent quality all the year round. For this purpose a fully equipped cotton laboratory with HVI-900/Iand AFIS-N is working day and night during the cotton season to select the best quality crop to be purchased.

NML spinning is operationally organized into seven spinning units, each with a distinctive product range and capacity to keep a check on the quality standards. Every cone undergoes inspection before packing to ensure that NML buyer gets only the best out of the lot.

NML spinning is thus renowned for being one of the most trusted brand names in the market enjoying the trust and confidence of the consumers world over.

The major production from NML spinning is exported to Japan, Far East, South America, Europe and the USA. In addition, the spinning also provides the same high quality yarn to NML weaving mills going into fabric production.

WEAVING:

Nishat Mills Limited weaving enjoys the reputation for being the market leader in the loom state fabric business in Pakistan. NML fabrics are not only rated as the top quality in the country but also enjoy a premium for their superior quality all over the world. Supported by NML own in house spinning units. The weaving sector of Nishat Mills Limited produces fabric range from light to heavy percales to satins and traditional to twill dobby items.

NML fabric is well established all over the world with NML exports going to the America, the Far East, Africa, Australia, Europe and Japan. Besides export we are also supplying gray fabric to NML dyeing and printing units.

NISHAT MILLS FAISALABAD:

This unit has been producing top quality fabrics for export as well as for the consumption of NML own processing unit. Recently awarded The ISO-9002 certification, the facility is highly regarded for the production standards and quality controls. This unit comprises of 188 Sulzer-RUTI P7100 Looms and State of the art, back-up process, with an equally efficient quality control and packing department.

NISHAT MILLS SHEIKHUPURA:

Established initially by the name of Nishat Fabric Limited 1992, subsequently merged into Nishat Mills Limited, NML Sheikhupura is one of the most advanced units in the country equipped with the state of art machinery and back processes.

The highly sophisticated laboratory also ensures total quality control in yarn purchase and fabric productions. Another 64 Tsudakoma Air Jet Looms have been added recently along with the back process. Future programs for the unit include the purchase of some new air jet loom, which will give a boost to the production capacities and the product range of the unit, will also expand subsequently.

PROCESSING:

Nishat Mills processing plant with a monthly capacity of 3 million meters is one of the largest processing facilities of Pakistan. With an array of most modern machines it is geared to meet the ever-increasing demands of NML clients. The processing division has been divided into different sections to facilitate un-interrupted process flow and to ensure quality control at all stages. Almost 75% of chemical and dyestuff being used is of European origin. An independent quality control department with a strong backing of fully equipped laboratory ensures strict quality standards at all levels. The processing plant has recently been awarded ISO-9001 certification, yet another feather in NML cap.

PRE-TREATMENT SECTION:

Fabric preparation is crucially important, as the successful outcome of all subsequent operation is dependant on it. At Nishat, to reduce the natural impurities of cotton and to impart good hydrophilic properties, the section employs two singeing machines and two modern open width bleaching plant.

To give more luster and strength one chain-less mercerizing machine is also in operation. Besides preparing fabrics for dyeing and printing, this section also bleaches bacteria-killer fabrics of Japanese hospital linen and fire retardant Low Pill Fabrics for contract textiles.

DESIGN STUDIO:

NML state-of-art design studio, known for producing transparencies of the highest quality, accommodates a STORK STK image 3000, a CST Ramsete III Silicon Graphic O2 and STORK Drum Scanner plotter.

ENGRAVING:

Technology advancement in the field of rotary printing necessitates upgrading the preprint line-up. NML is reputed for the most efficient use of the STORK engraving systems for manual exposing. We are known for halftone work in single step designing.

Living up to this reputation, we have recently added to NML line of production the ROTARY WAX JET system of CST, with exposing resolution at 1019 dpi and a screen circumference of 640, 820 and 914mm. Engraving at this high resolution with digital technology enhances the print quality to a great extent and reduces the existing human error margins to the minimum.

ROTARY SCREEN PRINTING SECTION:

In another step to up grade the existing machine mix, a new 3.2m (126) Reggiani printing machine, with a facility to print 16 colours has been installed. This machine with UNICA system successfully combines production and quality performance at the highest possible level in rotary screen-printing.

Nishat Mills Limited has as well-trained work force to print extremely intricate and complex tone-on-tone designs. Monthly printing capacity of the section is about 2.3 million meters. Besides conventional printing in pigment and reactive dyes, printing in puff effects, resist and discharge dyestuff is also done.

FINISHING SECTION:

By offering optimum final fabric quality and handle, very recently this section has been equipped with a new generation/Babco-Starter. This machine combines tried and tested drying technology with innovative electronic control system, ensuring absolute reproducibility of fabric qualities and full documentation on the quality control checks.

Besides offering normal finished, this section also fulfils the demands for scotch guard protection for soil release and resist finish, peach skin effect finish (emerizing), fire retardant finish, water proofing, anti crease and easy care finish.

DYEING SECTION:

Nishat provides quality piece dyed fabrics in heavy twills to some of the world leading brand names like GAP, Old Navy, and banana republic, DKNY, Tommy Hilfiger, Chaps and Sears. This has been made possible by using high quality griege from the mills own weaving units and b using expensive dyestuffs. Highly trained Chinese technicians keep a close check on all stages of production. Depending upon specification, dyeing in existing dyeing capacity of 1000000 meters per month, a Designated Apparel Fabric Dyeing Unit is being set up near Lahore.

The machinery and land has been purchased for this project, which is planned to be operational by end of the year 2000. This unit will have a monthly capacity of 2.5 million meters and this has been designed to give the optimal results due to the custom built machinery purchased after careful and length consideration of the technical and marketing teams. This would certainly give us an edge over NISHAT MILLS LIMITED competitors and would be a welcome addition in the ever-changing apparel fabric market.

MANAGEMENT OF THE ORGANIZATION

NISHAT MILLS LIMITED employees are highly qualified professionals and have a young, energetic and dedicated team of professionals who have a lot of knowledge to their credit.

Managers are responsible for the task assigned to them in their departments and also have to match whether their respective department is achieving the desired efficiency level or not.

In Nishat Mills Limited of management can be explained by the philosophy defined in its culture. Firmly believing in Growth through professional management. Nishat corporate culture is based on decentralization, delegation of authority, encouraging the acceptance of responsibility and in calculating quality consciousness. It is conviction that every successful organization is a reflection on the commitment, dedication and team spirit of its employees and Nishat is no exception. Its people are all loaded with this spirit a fact manifested in its raped growth.

There are at least three basic requirements for a successful company and the managers of Nishat Mills Limited are made to think on these lines:

1. It must provide a product (good or service) that suits best to the companys capabilities and for which there is a sufficient market.

2. It must provide the product with consistent quality at a level that appeals to intended customers and satisfy their needs.

3. It must provide a product at a cost that always an adequate profit and a +reasonable sale price.

STANDAARD OF ORGANIZATION ISO 9001

NISHAT MILLS LIMITED has achieved ISO 9001 AND ISO 9002certificate in 1997. In order to achieve this certificate following requirements should be fulfilled:

(1) MANAGEMENT RESPONSIBILITIES:

Management responsibilities includes the following,

i. QUALITY POLICY:

According to the ISO 9001 and ISO 9002, it is utmost responsibility of management to devise policies that provide quality products to customers. Nishat is working hard to ensure that they produce quality products.

ii. CUSTOMER EXPECTATION:

It is essential that customer expectation should be fulfilled. It is the responsibility of management to do so. Since Nishat is an export-oriented organization so utmost attention is paid to meet customers need and requirements.

iii. RESOURCE MANAGEMENT:

Utilization of resources play crucial role in the success or failure of organization. If resources are effectively utilized, they become cause of success for organization. Nishat is effectively using its resources and thus has achieved ISO 9001 and ISO 9002. In the financial year of 1990-00, it declared dividend of 26%, which is highest so far. This performance shows that Nishat Mills Limited have sky-high goals. Human resource management also exists. They have ensured that, right man is placed at right job and also at the right time. Various training programs are offered for upgrading the skills of staff.

iv. RESPONSIBILITY AND AUTHORITY:

Nishat is fairly decentralized organization. Middle level management makes most of decisions and matters are decided in a friendly environment. Nishat cares a lot for its staff. Orders are not dictated but they are made with effective participation from staff.

v. MANAGEMENT REPRESENTATIVES:

Nishat governing body is highly talented. Board of directors include professional of great repute. The are committed toward achieving a good name for Nishat Mills limited.

(2) QUALITY SYSTEM:

I. SYSTEM PROCEDURE:

ISO 9001 requires that there should be proper system for each work. Standardization of work is necessary for achieving effective certification.

II. STANDARD OPERATIONS:

Nishat Mills Limited has established a quality control lab, which ensures quality products to their customers. Objective at Nishat is to provide only quality products to their customers. Thats why they achieved quality certification like ISO 9001.

III. QUALITY PLANNING:

Effective planning is required for the success of organization. If plans are well planned, they bring success to firms. For this production and planning department has been established.

IV. WORK INSTRUCTRIONS:

Instruction should be provided for better handling of job, and it is exactly in its true spirit followed at Nishat Mills Limited.

(3) CONTRACT REVIEW:

a. REVIEWS:

Sometimes contracts are reviewed, that reviewing must be in proper manner. Contract should be given keeping in view of interest of the company.

b. AMENDMENTS:

If the amendments are made in the contract, they should be made with authorized person. And management should be fully informed with that.

c. QUALITY RECORD:

For the storage of record, there should be proper arrangements. Each item in accounts should be properly coded and placed. Cheques should pay cash.

4) DESIGN CONTROL:

1) DESIGN AND DEVELOPMENT PLANNING:

For designing of products. There should be specific arrangements. Department of design should be establish, if the enterprise want to achieve quality certificate like ISO 9001 and ISO 9002.

2) DESIGN REVIEW:

Design should be reviewed once made by the firms. This design should have some characteristics that should be in accordance with the business practices.

3) VERIF VALIDITY OF DESIGN:

Once design is complete, the competent authority should verify it.

5) CUSTOMER DATA CONTROL:

It is the perquisite for ISO 9001 that proper customer data should be there. This is to provide customer list if required by the top management.

6) CONTROL OF CUSTOMER SUPPLY PRODUCT:

There should be proper control over customers products.

7) INSPECTION:

There should be proper inspection of stores so that every thing functions according to manners prescribed by certificates.

8) CORRECTIVE AND PREVENTING MEASURES:

There should be check and balances. If the mistakes are made, there should be proper systems so that they are identified and corrected. Preventing methods should be there.

9) INTERNAL AUDIT:

There should be strong internal audit. So all discrepancies should be disclosed. In order to get ISO 9001 there should be separate internal audit department.

10) TRAINING PROGRAMS:

Training programs should be there to upgrade the skills of employees. On the job training programs should be provided so that workers get knowledge about work.

11) STATISTICAL TECHNIQUES:

Various statistical tools are required to better controls the affairs of organization. They should be available to achieve quality awards. Uses of information technology automation of factory, Internet and computer technology are prominent features n achieving ISO 9001 and ISO 9002.

MAJOR MANAGEMMENT OFFICIAL AT NML HEAD OFFICE

Mrs.Naz Mansha

C.E.O

Hassan Mansha

C.O.O

Khalid Mehmood

Company Secretary

Aftab Ahmad Khan

Director Finance

Highest designation of management at NML head office. One of the directors Hassan Mansha oversees the management at head office. Director finance Aftab Ahmed Khan coordinate administration department along with him.

EMPLOYEES AT NISHAT MILLS LIMITED

The total number of employees working in Nishat Mills Limited is 14277 in 2006, whereas the total number of employees at the head office where the internship training was undertaken is 150.

The detail of employees in various departments at NISHAT MILLS HEAD OFFICE 7-Main Gulberg can be given as follow:

Department

Number of Employees

Finance

95

Accounts

40

Marketing

35

Information Technology

25

Planning and Coordination

10

MY LEARNING DURING INTERNSHIP PERIOD

This section is based on my learning and observation during my internship at the NISHAT MILLS LIMITED HEAD OFFICE LAHORE. My internship duration was for eight weeks. I was stay in different sections of Accounting and Finance departments for different periods of time. I also visited the Dyeing and weaving unit (NDF Unit # 35,36,37) of Nishat Mills Limited, which are situated at 22-km Ferozepur Road, Lahore-Pakistan.

ACCOUNTS DEPARTMENT

There are following activities in Accounts Department as under:

Accounting Cycle

Bank Debit Advises

Bank Credit Advises

Bank Reconciliation Statement

Loan Amortization Schedule

Vouchers

General Ledger

Tax Treatment

Preparation of checks

In Accounts Department, I learn to understand the flow of Accounting cycle in which flow of transaction, preparation of vouchers, ledger posting , Bank Reconciliation Statement, Loan Amortization and tax treatment.

HOW TO PREPARE VOUCHER?

In Account Department under the supervision of Mr. Junaid Accounts Officer, I came to know different type of vouchers being prepared and their process of preparation. Vouchers are written evidence of any business transaction. These vouchers are evidencing by bank Dr. and Cr. Advises. The different type of vouchers being prepared by the account department of NISHAT MILLS LTD. Is as under:

Cash Payment vouchers

Cash Receipts vouchers

Bank Payment vouchers

Bank Receipt vouchers

Adjustment vouchers

Petty cash vouchers

BANK DEBIT ADVISES

When bank debit the Nishat account that is called bank debit advise. Bank

Advises states complete detail of debit of each and every transaction done by NML through a bank.

Finance department confirm advises against their invoices and deliver them to accounts departments to make entries in a system. Accounts department reconcile the bank statements and make vouchers.

BANK CREDIT ADVISES

When bank credit the Nishat account that is called bank credit advise. Advises states complete detail of debit of each and every and transaction done by NML trough a bank.

LOAN AMORTIZATION SCHEDULE:

Nishat Mills Limited amortizes the amount of loan with the passage of time with mark up rate.

TAX TREATMENT:

Nishat mills limited record the every product by firm whether it is local or imported. Tax treatment is so important for every organization to maintain the record for government purpose. Accounts department maintains complete computerized record.

SALES TAX INVOICE:

Invoice is prepared which shows the amount of sales tax deducted etc. this invoice usually contain the following column.

Sr.No QuantityParticulars Amount Rate of S.Tax Total

PREPARTATION OF CHEQUES:

After receiving the invoices and checking their accuracy finally account payable department prepares cheques. Chief controller of Nishat Mills Limited signs these. Nishat Mills Limited has totally computerized system so items are identified and coded. Every party is allotted certain codes and entry is made in them as and coded. Every party is allotted certain codes and entry is made in them as and when the take place.

FUNCTIONS:

The main function of account department is to keep proper record transaction sand maintain the accounts

FINANCIAL MANAGEMENT PRACTICES AT NISHAT MILLS LIMITED:

ORGANIZATIONAL STRUCTURE OF FINANCE DEPARTMENT AT NISHAT MILLS LIMITED

Director Finance

G.M Finance

Deputy ASST.SeniorJunior

ManagerManagerOfficersOfficers

Finance

FINANCE DEPARTMENT:

After planning and coordination department I went to Finance Department where I have learnt a lot of work, which is, related my specialization.

MEANING OF FINANCE:

The main purpose of the department is ensuring the availability of the funds for operation and also better allocation of these funds.

The most important function of finance department is to arrange different sub department that is as under:

Import Documentation

Export Documentation

Export Refinance Scheme

Bank Department

HOW TO PREPARE IMPORT DOCUMENT?

PROFORMA INVOICE/ INDENT/ CONTRACT:

Indicates applicants name, to be shipped from Export country to import country, payment mode by L/C e.g. Irrevocable and unrestricted L/C at sight, shipment time e.g. within 2 months after receipt of letter of credit, place of delivery e.g. CFR Karachi by vessel e.g. validity until August 01,2007, items, description, quantity, unit price, amount.

COVERING LETTER:

This indicates the detail and price of the imported items.

APPLICATION FOR OPENING OF LETTER OF CREDIT:

In which request is made from bank to open letter of credit for the attached Performa invoices.

IMPORT FORM (FORM-I):

Application for permission under the Foreign Exchange Regulation Act, 1947 to purchase foreign exchange for payment of imports. It indicates NIT No, place of issue, date of issue, authorized bank, currency, beneficiarys name and address, indenters name and registration No, description of goods, port of shipment, carrying Co.s name and applications name and address.

CONCLUDING REMARKS OF ANALYSIS:

The overall ratio analysis is indicating that the companys progress has mainly attained through dedication of employees. The effectiveness of its management, their willingness to take advantage of opportunities and face challenges of changing economic picture, this all contributes to the very much improved and sound position of company. This is really appreciable for the devotion and hard work of all the employees of the company.

The cordial relations with the staff and is known for maintaining a peaceful and healthy corporate environment which are very crucial for the ultimate success. Nishat enjoys high employee motivation and excellent working standards, by encouraging informal and frequent communication at all management levels and that is the reason behind the splendid and sensational achievement in Textile Industry.

We have also compare of ratios analysis with overall industry average and time serious and cross sectional analysis, which shows overall performance of the Nishat Mills Limited.

PROBLEMS IDENTIFICATIONS AND THEIR SOLUTIONS:

EMPLOYEES TURNOVER:

I have seen is that not many people work for long in Nishat Mills Limited. Many trainee officers come and go. The reason could be that they only come here to get some experience and as the pay sale is not satisfactory therefore they leave the organization for better jobs offering higher pay scale. I think they should try to increase the pay scale for their employees in order to retain the experienced workers.

NEED OF A CAFETERIA:

There is lack of proper facilities for food. There is no proper canteen or cafeteria or messing facilities. If there will be messing or cafeteria facility in the premises there will be saving of time and increase in the efficiency of the workers and it will be easy for the people to return on work after lunch on well in time.

EMPLOYEES TRAINING:

Although there are educated and talented staff working in NISHAT MILLS LIMITED but it is the need of the hour that the staff should be given the time-to-time refresher courses for the up to date knowledge for meeting knowledge for meeting knew and dynamic challenges in the growing business concern of NISHAT MILLS LIMITED.

NEW TRAINING COURSES WILL HELP IN UPLIFTING THE QUALITY OF THE WORK OF EMPLOYEES.

MEDICAL FACILITIES:

Medical facilities are providing in the mill where production work is carried out but such facility should also be provided to the employees who are working in the HEAD OFFICE 7-MAIN GULBERG LAHORE.

Company should take great and early care of this important matter because employees working need this very badly.

EXHIBITIONS:

Company should arrange some constructive exhibitions with the help of government institutions like EPB to enhance its exports. The company should also look for untraditional markets.

EXTRA FILES:

The files, which have been outdated or do not have any importance in the normal working of office, all these types of files should be properly disposed off. This will not mix up obsolete files with the relevant files of office and will avoid any confusion.

TRAINING OF INTERNEES:

There is not any proper internship program for the internees in the NISHAT MILLS LIMITED.

There should be a proper set up for the training of internees that will help them to apply their knowledge, they have learned to different practical situations. The internees should be properly trained during their internship about the working of different departments so; in future they can prove themselves.

AGGRESSIVE MARKETING:

Company should follow marketing techniques and explore new markets for its product.

SWOT ANALYSIS OF NISHAT MILLS LIMITED:

S = STRENGTHS

W= WEAKNESSES

O= OPPORTUNITIES

T= THREATS

STRENGTHS:

Export-oriented organizations

Highly skilled labor

Talented management

Qualified finance staff

Professionalism in the employees

Corporate culture

Sound policies

Strong group

Successful history

Computer information system

Paperless organization

Availability of raw material at cheaper rate

Products are technologically competitive

Innovative products

Customer orientation

Efficient production system

WEAKNESSES:

Lack of proper human resource development department

Rely on foreign customers more instead of locals

One of the major weaknesses is fragmented industry of Pakistan

OPPORTUNITIES:

Increase demand of Pakistan cotton-made products

Advertising growth

To use information technology

New trends enhancing the variety of clothes

R&D and product development is a big opportunity for future success

International joint ventures can lead NML onto an avenue of increasing profits

One more opportunity is to offering new related products to its customers

THREATS:

Massive competition in the market is a foremost threat for the company

Cost competitiveness can lead to a great threat for the organization if it is not maintained by organization

Increasing inflation leading to increase in prices of imported raw material is also a threat for NISHAT MILLS LIMITED

Increase in energy fuel prices is a major threat to NML as his leads to an increase in the cost of production of goods

Child labor propaganda by various NGOs

Political instability in Pakistan

Mostly operating in overseas market

RECOMMENDATIONS FOR IMPROVEMENT

Although the employees at NISHAT MILLS LIMITED are more or less satisfied with the work environment the problem is in their financial incentives. Along with the increment in basic pay each year for good performance there should also be some incentives so that employees feel more attracted towards their job. We suggest the incentive wage system for the marketing people so that they hit targets more regularly then they are doing now.

Nishat linen outlets should have products for every segment of customers e.g. economical products as well as high rated expensive products.

Nishat mills provided as much as possible facilities to his employees according to their requirements. Higher management checks their performance and pay all their rights according the management system.

There should be clear identification of promotion criteria, which should be communicated well to employees so that they would know what to achieve in order to gain promotional status.

The major problem in Nishat mills that is a lack of human resource department, which is very important FOR THE RIGHT JOB FOR THE RIGHT MAN.

NISHAT MILLS LIMITED should over come the weaknesses and face the threats with strong mind. Promotional activities should be done to promote the product of Nishat Mills Limited such as Nishat linen in the local market. The outlets should be more strategically placed.

Nishat is also taking up the social accountability issues very seriously, which are so dear to the American consumers. Lot of big brand US companies have visited the NML and are discussing the possibilities of a joint venture.

CONCLUSION OF THE REPORT

Professional education can only be best taught and understand if there is a considerable emphasis on practical aspect of education. Likewise other professional disciplines, MBA Semester program requires the students to undergo practical training to enable the students to get first hand knowledge.

I completed my training at NISHAT MILLS LIMITED for eight weeks and gained much knowledge, which would be difficult to obtain while sitting in the classroom. While preparing this internship report, I tried to present whole of experience obtained at Nishat Mills Limited 7-Main Gulberg Lahore that would be beneficial for MBA students not only from examination point of view but also from practical point of view.

During this training the lot of person guide me with best way and proper manner of doing work.

Nishat Mills Limited provided its staff with better working environment and facilities, which enhanced efficiency and out put.

Nishat Mills Limited has increasing its profitability by working efficiently, procuring better raw material and most importantly kept a very close association with its customers. It visits its business partners frequently .

REFERENCES

WWW.NISHATTEXTILLS.COM

WWW.NISHATGROUPS.COM.PK