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INTERNSHIP REPORT
ON
NAJMA SUGAR MILLS (Pvt.) LIMITED
Submitted To:
MR. JAVEED IQBAL INTERNSHIP COORDINATOR
Submitted By:
HASEEB AKHLAQUE KHANRoll No. MT-01-28MBA (IT) FINAL(Session 2001-2003)
INSTITUTE OF MANAGEMENT SCIENCES BAHAUDINE ZAKARIA
UNIVERSITY
KARACHI.
IN THE NAME OF ALLAH WHO IS MOST BENEFICENT AND MERCIFUL
DEDICATIONS TO:
This Holy Prophet (SAW) who taught us “Seek Knowledge from cradle to the
Grave”.
My parents whose encouragement, guidance and presence are assets of my life
My teachers who illumined the dark corners of my mind and heart.
TABLE OF CONTENTS
Sr. No. Description Page No.
1. Preface 1
2. Acknowledgment 2
3. Structure of Management 3
4. Growth of Sugar Industry in Pakistan 4
5. Group Profile 5
6. Board of Directors 6
7. Mission of NSML 7
8. Objectives 8
9. Introduction 9
10. Working Force 11
11. Products of the Company 12
12. Production 13
13. Departments at Site 16
14. Departments at Head Office 33
15. Banking Section 47
16. Data Administration 51
17. Organizational Incentives 55
18. Quality Management 57
19. Problems of Sugar Industry 59
20. Comments & Suggestions 60
PREFACE
This report describes the effort made by me for the learning by first hand practical
experience about a business organization. Today is the era of experience as is said
by quotation “Experience makes a man perfect.” No body can deny the importance
of practical training and experience.
Through internship students get the first touch of professional exposure of the
roles; they have to play during their professional careers. The students not only
acclimatize themselves to the corporate environment but also learn to assume
responsibility, co-operation and teamwork the hallmarks of modern management.
Having experience of sugar industry is really a good experience for me. I am
submitting all my experiences. No doubt, omissions and errors are expected but it
is requested to ignore the nominal errors.
I was lucky enough to have a chance of doing internship in HEAD OFFICE OF
NAJMA Sugar Mills Limited KARACHI. I learnt a lot about the practical business
and above all, the mental discipline and awareness, which are the most useful tools
for an executive to raise the organizational structure.
HASEEB AKHLAQUE
KHAN
ACKNOWLEDGEMENT
First of all, I want to express all and thanks to ALMIGHTY ALLAH whose
blessings are above each and every thing which make me able to present my tiny
effort. All prays to HAZRAT MUHAMMAD (PBUH) who is the reason for
creation of the universe and whose kindness came to my part.
Secondly on the successful completion of my internship program, I whish to
express my gratitude and heart worthy acknowledgement to my professors for full
co-operation and helped me in completing this report. I feel utmost pride in
acknowledging with sincere gratitude for the valuable guidance I have received
from Mr. Hassan buchas and Mr.zubair.
They have been a constant source of enthusiastic encouragement through out the
internship program. Due to their guidance I have become able to complete
internship as well as this report. Their advice, criticism and remarks were of the
most value to me.
I am also thankful to following persons:
Mr. Jahanzaib Sikandar Chief Executive Officer
Mr. Raisuddine Shaikh Managing Director
Mr. Ghulam Hassan shigri General Manager (f)
Mr. Mohammad Fiaz Manager ( I . T)
Mr. Akhlaque Ahmed Khan Manager (H.R.D.&P)
Mr. Mohammad Azhar Chief Accountant
Mr. Basharat Biabani Accountant (purchase& inventory)
Furthermore all the other executives and staff members of NAJMA Sugar Mills
Limited, Head Office and Site deserve my thankfulness for their co-operation and
guidance during the course my internship at NAJMA Sugar Mills Limited. Finally
I would like acknowledging the contributions by many other sources of information
used in preparation of this report.
HASEEB AKHLAQUE KHAN
GROWTH OF SUGAR INDUSTRY IN
PAKISTAN
Sugar is the important sector of the Pakistan’s economy. Sugar industry plays a
vital role for development of any country’s economy. In Pakistan this industry play
a significant role for economic development.
Its share in the large scale industry is 18% and in GDP is 1.9%.sugar industry
contribution to the government exchequer in Federal excise duty is 11.2%.
HISTORY
The sugar industry, which is endowed with a strong base of sugarcane, had started
its journey from almost non-existence in 1947. The industry has gone through a
long way and now possesses 77 sugar mills in all over the country. The Sugar
industry not only fulfills the entire local requirement but also sharing out the total
foreign exchange earning.
At present Pakistan’s sugar industry is facing lot of problems like lesser demand of
sugar in the country due to recession in the economy, declining prices into the
domestic as well as international markets & huge unsold stock of sugar.
Government role in R & D for developing the sugarcane varieties is not very
significance; only few private institutions are doing some research in R & D in
developing various varieties with higher yield.
Pakistan sugar industries still have 34% un-utilized capacity. Which can be utilized
by further developing the 13224 hectares area along the main feeder canal from
Indus river in Sindh. By which we can increase our export to 50000 ton. ( this
export to Arab World can be exchange of half million barrels of crude oil for
Pakistan.
In Pakistan present sugar cane varieties are not yielding reasonable production and
led to the prevailing sugar crisis. As described by the table.
Countries 1989-92 1993-97 1998-2002
USA 77.44 76.80 75.19
Mauritius 70.33 72.83 71.39
India 66.06 64.14 70.30
Brazil 62.02 61074 67.42
Pakistan 41.55 43.38 43.54
Cuba 59.98 57.04 34.83
Source: down EBR July 12-18,2002
GROUP PROFILE
The company has been sponsored by SIKANDER GROUP OF INDUSTRIES in
ISLAM ABAD. The sponsors comprise of a family of good repute and their
friends. They have vast experience of running project as well as manpower
administration, monitoring of projects and finance and accounts.
Sr. # Company Name & Location
1 NAJMA SUGAR MILLS LIMITED
Site:
JUDHO,
Distt. MIRPUR KHAS, SINDH, PAKISTAN.
HEAD OFFICE:
CLIFFTON KARACHI
2 TASAQ INTERNATIONAL (PVT) LTD.
HEAD OFFICE:
ISLAM ABAD
MANAGEMENT PROFILE
Chairman (RET) GEN. SIKANDER HAYAT
KHAN
Chief Executive MR. JAHANZAIB SIKANDER
Managing Director Mr. RAISUDDINE SHAIKH
Director finance Mr. Bashir Ahmed
Director (HRD&P) Mr. Noor Ahmed Zaib
General Manager (f) Mr. Ghulam Hassan shigri
General Manager (plant) Mr. Mohabbat Ali Khan
Auditors:
Mr. Nouman Mehmood, FCA
Avais Hyder Zaman Rizwani
Legal Advisors:
Mr. Muneeb Akhter Advocate
A.K.Brohi & co.
Banks Muslim Commercial Bank Limited
National Bank of Pakistan
Habib Bank of Pakistan
MISSION OF NAJMA SUGAR MILLS
LIMITED
To produce superior quality White Refined sugar.
To face competition in the Local & International Market.
Total Quality Management.
OBJECTIVES
Following are the objectives of company.
1. Total quality focus to meet customer’s requirements.
2. The highest standard of business ethics.
3. To care on the business ethics.
4. To carry on the business at best possible level.
5. To guarantee performance of contracts by members or
persons having dealing with the company.
BRIEF INTRODUCTION
INCORPORATION
NAJMA Sugar Mills Limited was incorporated on May 26, 1991 as a public
limited company. The authorized capital of the share of the company was
Rs.350, 000,000/-. The certificate of commencement of business was obtained
in Feb., 9,1992. The previous sponsor of the company (the family of chief
minister of Sindh, JAM SADIQ ALI (late) could not manage to setup the
project and finally on intervention of the BEL shares.
The management of the project was transferred to the new sponsors in 1998.
The name of the company was changed to NAJMA SUGR MILLS Ltd. On
November 15,2000.
NATURE OF BUSINESS
Crushing of Sugarcane & Raw Sugar in to White Refined Sugar.
FIRST CRUSHING SEASON (TRIAL)
NAJMA Sugar Mills Limited starts its first crushing season (trial) in 2002-
2003.
LOCATION
NAJMA Sugar Mills Limited is located at Judho, MirPur Khas Sindh.
HEAD OFFICE
Head Office of NAJMA Sugar Mills Limited is located at Sikander Munzil
Park lane 5 Cliffton Karachi.
FINANCIAL YEAR
The financial year of the company is from 1st October to 30th September.
RAW MATERIAL
The main raw material for the mill is sugarcane, which is abundantly available
in Pakistan.
The second raw material is Baggas. Some of which is obtained by the own
crushing the other will be purchased by the Beggas Venders/Suppliers.
MAIN COMPETITORS
Mutyari sugar mills Sangher.
Thatta Sugar Mills Limited, thatta.
Therparker Sugar Mills Limited, Therparker.
WORKING FORCE
Detail of total working force at site and at head office is as under:
AT SITE
Permanent Employees 157
Temporary Employees 30
Seasonal Employees 400 (app.)
Daily Wages Employees 10
Total 597
AT HEAD OFFICE
Permanent employees 25
Temporary Employees 5
Total 30
PRODUCTS OF THE COMPANY
SUGAR INDUSTRY IS AN AGRO-BASED INDUSTRY, WHICH PROVIDES
EMPLOYMENT TO THE LANDLESS RURAL POPULATION AND HASE A GREATE
IMPECT ON THE ECONOMY OF A COUNTRY.
The main product of the company is White Refined Sugar.
The three principle bye-products of a sugar industry are
1. Bagasses
2. Molasses
3. PRESS CAKES (WHICH R ABOUT 40% OF THE WEIGHT OF TOTAL CANE CRUSHED.)
4. MUD
WHITE REFINED SUGAR
Major business of the company is to produce white refined cane sugar of
intermission standard and from the erased cane and three different components are
achieved that are fibber, Pith and Moisture.
MOLASSES:
THIS IS A BY-PRODUCT AND IT IS SOLD TO MOLASSES CONTRACTORS. ONE OF
THE ALLIED CONCERN, RELIANCE COMMODITIES (PVT.) LIMITED IS THE MAIN
BUYER OF THE MOLASSES OF NAJMA SUGAR MILLS LIMITED AND ALSO THE
MAIN BUYER OF MOLASSES FROM WHOLE THE COUNTRY.RELIANCE
COMMODITIES (PVT) LIMITED IS THE MAIN EXPORTER OF MOLASSES IN
PAKISTAN. Molasses may be used for the production of power alcohol acid
portable spirits.
BAGGAS:
This is also a by-product of the company. Begass is used as source of energy fuel
for sugar industry for juice heating. and also used for making medium density fiber
board (MDFB). baggasse is sold to the baggasse contractors.
MUD:
Mud is also the by-product of the company. It is sold to the Mud Contractors.
This is used in making chocolates and other products.
PRESS CAKE:
Press cake of sulphitation factories are used as manure and that of carbonation
factories are usually burnt.
Plant performance during the season 2002-2003
(trial season)
Season start Date & Time 05-01-2003 At 6:25 P.M
Season Ending Date & Time 05-01-2003 At 6:25 P.M
Duration of season (days) 80
Cane Crushed (M.Tons) 52095.53
Cane Crushed (MND) 1302388.25
Sugar Production (M.Tons) 1518.5
Sugar Production (Bags) 30370
raw Sugar Production (M.Tons) 1039.282
Sugar cane recovery (%) 4.989
Molasses Production (M.Ton) 4358.750
Molasses Recovery (%) 8.391
MAIN DEPARTMENTS
Following are the main departments at Site and at Head Office.
AT SITE
1. MECHANICAL
2. ELECTRICAL
3. CHEMICAL
4. CANE
5. ACCOUNTS
6. COMPUTER
7. ADMINISTRATION
AT HEAD OFFICE
1. FINANCE
2. ACCOUNTS
3. ADMINISTRATION
4. PURCHASE
5. SALE
MECHANICAL DEPARTMENT
Mechanical department is the main department of any sugar mill. This department
plays very effective role for crushing of sugarcane.
FUNCTIONS:
The main function of this department is to control the whole plant & machinery.
The main goal of this department is that the whole process is going through
effectively and efficiently without any hurdle.
Mechanical department has qualified engineers who are very professional about
their work. All the work is done under supervision of Chief Mechanical Engineer.
ELECTRICAL DEPARTMENT
Electrical department is also very important department of any sugar mill. This
department plays very effective role for keeping the plant in running conditions.
FUNCTIONS
The main function of this department is to assist the mechanical department, with
the help of this department; mechanical department has a better control on whole
plant & machinery. The main goal of this department is to supply electricity to
whole plant & machinery.
Electrical department has also qualified engineers who are very professional about
their work. All the work is done under supervision of Chief Electrical Engineer.
CHEMICAL DEPARTMENT
Chemical department is another main department of any sugar mill. This
department plays very important role for crushing of sugarcane.
FUNCTIONS
The main function of this department is to test the quality of sugar, with the help of
this department sugarcane is crushed in to white refined sugar. The main goal of
this department is to maintain a quality standard.
This department plays his role during whole the process because different types of
chemicals are mixed in sugarcane juice for making the juice in to liquid shape.
This department checks the quality during the whole crushing process.
Chemical department is working under very experienced person who has vast
knowledge about chemical. All the chemists are very experienced and professional.
CANE DEPARTMENT
Cane department is the major department of any sugar mill. This department is
purchasing sugarcane from growers.
FUNCTIONS
Cane department is working under General Manager Cane, who is a very
experienced person and has a much more knowledge about sugarcane quality.
The main function of this department is the purchasing of sugarcane. The main
goal of this department is to supply high quality sugarcane.
Main input of NAJMA Sugar Mills Limited is the raw fresh sugarcane. To control
the different activities of purchase of sugarcane, cane department play very
important role.
This department has purchased sugarcane from different villages of the country.
Cane field officers are surveying regularly and motivate growers. This department
opens depots in different villages for purchasing of sugarcane. In Sindh a number
of small grower’s exit and yield different varieties of sugarcane that profitable to
the growers. Cane department also play very important role for granting a loan to
the growers in the shape of seed, fertilizer and machinery, which has to be returned
in the shape of supply of sugarcane to the respective mill.
Before start of crushing season, Cane department of NAJMA Sugar Mills Limited
arranges a survey of the growers of surrounding area of the mill for the availability
of sugarcane. They collect data about varieties, quality and quantity that would be
available during the season.
CANE ACCOUNTING
After receiving sugarcane from the grower, process of payment starts. Cane
accounts generate the payment that is sent to the banks for disbursement.
Cane accounts generate the following output from cane accounting package.
Grower Ledger
Cane Payment
Contractor Register
Loan Register
Daily Cane Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All the
printed data sent to Head Office on biweekly basis. Payment to grower is made
through bank after getting approval from Head Office, in case of emergency
sometimes payment is to be made at Head Office, but during routine, payment to
growers is done at site through bank.
ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business
transactions into books of accounts. With the help of this department, we should
know the actual position of the company about profit or loss. Accounts department
is working under Chief Accountant, who is a very experienced person.
FUNCTIONS
The main function of this department is recording & classifying all transactions
into books of accounts, keeping whole record of the company about payments,
receipts, profits & losses. The main goal of this department is to work effectively
& efficiently within the accounting standards all the time. Main Accounts
Department also supervises the Cane and Store Accounts.
Normally Accounts Department performs following activities:
Maintaining Records
Keeping Accounts Record of All Departments
Payment of Wages & Salary
Store Accounts
Cane Accounts
Dealing With Banks
Tax related matters
Stock Position
Stock Taking
CANE ACCOUNTING
Main Accounts Department also supervises the Cane Accounts. This department
deals with following matters:
Keeping Sugarcane Purchase Record
Keeping Record for Growers
Arranging payment for growers
Recovery of Advances from Growers
STORE
Main Accounts Department also supervises the Inventory / Store Department.
Inventory means stocks of things and items, which are used with in the company
for producing goods, and finished goods offering for sales. Inventory can be
divided into following four groups:
1. Raw Material
2. Work in Process Inventory
3. Finished Goods Inventory
4. Spare Parts Inventory
For effective control over the company’s inventory, it is necessary that overall
work should be done under Accounts department.
It is very important for store that it has to maintain sufficient stock of all the
related parts / goods to make the factory continue its production and functions
of other departments without any hurdle. This department receives the demand
from various departments and then arranges the required goods / items.
When demand of items / goods received, then following process starts.
1. Purchase Requisition received at store, through relative department’s
head, which contains item’s name & quantity.
2. Store Incharge checks the required material/items and issue to relative
department according to demand, if required material/items currently not
available in store, then Purchase Incharge makes the purchase indent for
required material/items.
3. Purchase indent sent to the Purchase Department at Head Office after
getting approval from General Manager at Site.
4. purchase Department examine the quotation if it is less then 50,000 , the
purchase manager can purchase within this amount but if it exceed from
50,000 to 150,000 it will be approved by the Manager (HRD&P). and
more than this will be approved by the MD.
5. Purchase Department collects quotations from different listed sellers.
6. Purchase Manager compare all quotations and send summery of
favorable rates to Chief Executive for approval.
7. After getting approval from the Chief Executive, Purchase Department
issue Purchase Order for required material / items, which contains Mode
of Payment, Mode of Delivery, Item Name, Quantity etc.
8. Delivery of required items at Site through supplier’s own vehicle or
through rented vehicle on company’s expenses according to the contract.
9. Gate Inward sent to store, which contains complete report about Quantity
of Material/Goods, Bilty No., Vehicle No., Supplier name.
10.Store Incharge checks the material/items, if any item is not according to
demand then this item sends back to supplier, if material/items are
according to demand then store incharge issue Inspection Report.
11.After issuance of Store Inspection Report then Store Incharge issue
Goods Receiving Report which clearly shows the complete detail about
material/items.
12.When any item or material has to go out from store for any purpose then
gate pass is used, which contains quantity of item/material, purpose for
going and name of the person taking it.
All the above-mentioned documents have three copies. First copy hold down at
Store, Second copy is hand over to the seller and third copy sent to accounts
department.
Store’s issue material/items to various departments according to their demands and
then posted all transactions into accounts. At the end of each month store
consumption is sent to head office.
Normally accounts department sends all record to head office on weekly basis, but
they are maintaining some record at mills, which is necessary for routine work and
for reconciliation purpose.
COMPUTER DEPARTMENT
Now a day’s computer plays very effective role in all fields of life. At present all
sugar mills in Pakistan are using various software’s. Computer department of
NAJMA Sugar Mills Limited is working under Manager Information Technology,
who is a very efficient person and have a vast experience about different software’s
and hardware.
There are two departments in which computer is being used in NAJMA Sugar
Mills Limited (site), which are as follows:
1. Cane Department
2. Accounts Department
3. Inventory and Store Department.
Main input of the NAJMA Sugar Mills Limited is the raw sugarcane. To control
the different activities of purchase of sugarcane, computer is very much helpful.
Growth of sugar industry has brought about certain changes that demand
application of modern computer application in operations of growing sugar mills.
CANE DEPARTMENT
CANE APPLICATION
In cane application, computer is playing its role in a very superlative manner. It is
good sign for the company keeping the record of each grower and give
recommendations on the basis of given parameters.
CANE LOADING & PROCUREMENT
Before starts of the crushing season, cane department of NAJMA Sugar Mills
Limited arranges a survey of the growers of surrounding area of the mill for the
availability of sugarcane. They collect the data about varieties and quantity that
would be available during the season.
This data is posted in to the computer to accommodate each and every grower
during the season for the supply of sugarcane to the mill.
Following reports are generated from cane application software.
Survey
Agreed Cane
Schedule Summery
Village wise Procurement Summery
Circle wise Procurement Summery
Point of Purchase Summery
Indent Printing
Work Order Printing
CANE YARD MANAGEMENT
Sugarcane comes to the mills in different ways, which are as follows:
1. Grower brings the sugarcane on his own vehicle
2. Grower brings the sugarcane on rented vehicle
3. Sugarcane comes through the purchasing centers on rented vehicles.
When sugarcane reaches the factory gate then cane yard management starts. Cane
yard management produces the following information:
Weighting of sugarcane
Recording the Weight
Recording the Vehicle Number
Recording the Date
Printing of CPR’s
Daily Crushing Summery
Contractor wise summery
When sugarcane enters in the mill, first of all its weight is checked at weighbridge,
then this weight is posted into computer and gives a CPR to the grower.
CANE ACCOUNTING
The most important and the typical part of accounting is the cane accounting.
Which is supervised by the chief accountant cane.
After receiving sugarcane from the grower’s process of payment starts. Cane
Accounting Package generates the payment that is sent to the banks for
disbursement.
Following are the main reports generated from Cane Accounting Software.
Grower Ledger
Cane Payment
Contractor Register
Loan Register
Daily Cane Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All the
printed data sent to Head Office on biweekly basis. Payment to grower is made
through bank after getting approval from Head Office, in case of emergency
sometimes payment is to be made at Head Office, but during routine, payment
made to growers at site through bank.
ACCOUNTS DEPARTMENT
Accounts dept. at NAJMA SUGAR MILLS Ltd. Is working under the supervision
of Chief Accountant, who is a well-known and experienced person. He has full
command on his job either it is manually or it is computerized. He has a vast
experience in this field.
Accounting software is also used in Accounts Department. All the transactions are
posted into computer. The accounts System has capability of making different sorts
of reports/vouchers. It also helps in Auditing of the balance. This is working under
the supervision of MIT. The accounts system is capable of making following
reports.
Account Journal Vouchers
Fund Utilization Reports.
All types of Financial Reports.
Taxation Reports
M.Rs
Fund Allocation Reports
ADMIN DEPARTMENT
Admin department is the department, which is dealing matters about
administration. This department plays very important role for maintaining
discipline in the mills. Admin department is working under Admin Officer, who
has much more experience about administration matters.
FUNCTIONS
The main function of this department is to handle all the administrative matters and
maintaining discipline. The main goal of this department is to provide easy
working environment. This is very important department of the organization as the
name shows; this department has to administrate all the operations of the
organization. Sections of this department are divided into offices as under:
Gate Office
Time Office
Security Guard Office
Labor Office
GATE OFFICE
This office has been made to keep the record of each and every thing coming into
and going out of the mills gate.
For this purpose gate office clerk maintains two types of registers called;
1. Outward going pass register
2. Inward going pass register.
When every thing including raw material, stores supplies, or any other thing comes
into the mills premises a document named as I.G.P is made in which information
like date of supplier, description, quantity of the material and any other remarks are
written. In the same way, O.G.P is prepared for out going things etc.
TIME OFFICE
This office keeps and maintains the time record of all the workers on
time cards and pay register for the final costing of the workers salaries.
It keeps the attendance records, which is than used to calculate the salary
to be paid to the workers on monthly basis.
It keeps the records of the over time, leaves, number of days worked of
all the workers and than calculate their over time on the basis of the
basic salary of each worker.
It keeps the records of Social Security, EOBI, Education Cases etc. of
each employee / worker payable to government treasury.
It keeps the records of Gratuity, Bonus, Pensions and other benefits including CPL
(Cash Paid Leave) to each employee / worker of the organization.
SECURITY GUARD OFFICE
The main objectives of the security office is to safe handling of the goods from / to
the mill premises. For the achievement of such objective a team of security guards
has been employed by the company. All the keys relating to the mills office, labor
colony, (quarters) are lying into the responsibility of the security officer.
No out side visitor can come into the mills premises without the permission
of the security guards.
Whenever any visitor wants to enter into the mill, security guards firstly
contact with the authority in the mill to grant the permission to enter into
the mill premises.
Security guards can check each and every person before coming in or going
out of the company gate for the security purposes.
They see and check the outward going pass of the certain things when these
ought to bring out of the mill premises.
They are in uniforms of dark green color.
They are the guardians of the every thing of the company.
The organization also has purchased a human scanning security system, through which the record of each employee and visitor is maintained. This system has reduced the fair of any type of theft.
HUMAN RESOURCE DEPARTMENT.
As required by the labor laws of the Government of Pakistan, this office
has been setup to deal with all the matters that are related with labor and other
human resources. The Manager (HRD&P) is the head of the H.R.DEPT.
He is responsible to resolve all the disputes, conflicts, misunderstandings
and any other hind of matter, which may arise from time to time between the
labor and the immediate supervisor, or with any other person in the
organization.
It is the duty of the Manager (HRD&P) to inform the legal requirements
concerning the labor and company affairs.
It is also the duty of the Manager (HRD&P) to satisfy himself regarding
payment of bonus, gratuity, and other benefits to labor and to keep their
morale and motivational level high.
It is also a requirement to be a successful Manager (HRD&P) that he should
keep his knowledge up to date regarding the rules and regulations of the
labor department.
Manager (HRD&P) is responsible for the implementation of the strategies
and rules made by the higher authorities.
Manager (HRD&P) also helps the higher authorities in strategic decision-
making.
FINANCE DEPARTMENT
Finance department is the department, which provides funds to the company. This
department plays very important for fulfilling the need of fund. Finance department
is working under General Manager Finance, who is a Fellow Member of Institute
of Chartered Accountants of Pakistan and has vast experience about financial
matters.
FUNCTIONS
The main function of this department is to get Cash Finance and Running Finance,
according working capital requirements, from different Financial Institutions
against pledge of sugar stocks. This department also performs following activities:
Financial Planning.
Fund Raising.
Managing Cash & Credit Activities.
Capital Expenditure Decisions.
Analyze the Financial Information.
Evaluation.
Short Term & Long Term Financing.
Finance department analyzes the financial information and then presents them into
proper form, so that financial position of the company can be properly viewed.
Finance Department evaluating and determining about required additional finance.
All the functions are based upon Balance Sheet, Income Statement and other
Financial Statements.
ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business
transactions into books of accounts. With the help of this department, we should
know the actual position of the company about profit or loss. Accounts department
is working under Manager Accounts, who is a Chartered Accountant of Pakistan.
FUNCTIONS
The main function of this department is recording & classifying all transactions
into books of accounts, keeping whole record of site and head office. The main
goal of this department is to work effectively & efficiently within the accounting
standards all the time.
Main duties of Accounts Department are as follows:
Maintaining Records
Keeping Accounts Record of All Departments
Payment of Wages & Salary
Dealing With Banks
Control of Funds
Cash management
Payment of Bills and Charges
Receipt of Cash
Tax Matters
Cash Flow
Arrangement of Heavy Funds
Preparation of Final Accounts
Analysis of Reports
Provides Reports for Assistance in analysis to top management decisions.
We can say that this department acts as a nervous system. Every matter is first
brought in the knowledge of the head of this department, then he take appropriate
action according to the situation. The members of this department are every
experienced.
INCOME TAX MATTERS
As required by the tax authorities of the Govt. of Pakistan, whenever the company
makes purchases from the supplier, gets services on contract or on commission
basis, the amount paid to the party is tax deducted. When the company will make
the payment to the party (supplier, contractor or commission agent) it will deducted
the tax from the amount to be paid to them.
Tax deducted are payable to the Income Tax authorities. When the company makes
the payment of this tax, a Tax Challan is filled and prepared by the section and
after payment it is filed into the tax Challan file after debiting the tax payable. The
sellers, contractors and agents from this section then receive these challans for their
official uses.
SALES TAX MATTERS
Sales Tax is deducted from sellers at the time of sale. The company also pays the
sales tax to the suppliers, but this sales tax has claimed as refund and it is to be
adjusted from total amount of Sales Tax payable, then remaining payable amount is
to pay to the Sales Tax Department.
PURCHASE DEPARTMENT
Purchase department is the department, which conducts all the purchase for head
office and site. This department plays very important role for maintaining
discipline in the mills. Purchase department is working under Manager Purchase,
who is B.Com + C.A-Articles.
FUNCTIONS
The main function of this department is to purchase Spare parts, Store Material,
Chemicals, P.P Bags etc. The main goal of this department is to purchase required
items at convenient rates.
This department conducts all the purchases. There is also a Purchase Assistant in
this department to keep the records. Whenever any particular department requires
any part of material/goods, its head makes a demand of items to be required. This
demands contains the information like, items description, quality, quantity and
others. The departmental head signs the demand and sent to the purchase
department, then purchase department sent it to Chief Executive for final approval.
The Manager Purchase has the list of preferable suppliers of the certain items.
When any item is required, first he get rates from market though purchasers, then
he compare market rates, and making a purchase order of the supplier which
provide the material/items at convenient rate after obtaining verbal or written
approval from the Chief Executive.
Purchased material sent to the mills premises through rented vehicle or the supplier
is sending material/items according to the contract.
In Purchase Department work is done according to the following process:
1. Purchase Requisition received from store of site or head office, which
contains items code, items description and balance in the store.
2. Purchase Department sends this requisition to Chief Executive for
approval.
3. Purchase Department collects quotations from different sellers after
approval from Chief Executive.
4. Quotations are compared and summery sent to Chief Executive.
5. Purchase Order is prepared for required material / items after getting
approval from the Chief Executive.
6. Delivery of required items to Site Store / Head Office Store.
The Data Flow Diagram of the purchase system is on the next page.
Request for item
Search for item
Yes No
Daily if
Special
If Req< 50000 Req >50000
Request for requisitions
Provide Requisitions
Compare the requisitions
Not accepted
Accepted Order for items
User at site Store at site
Purchase sec. At site
Purchase sec. At H/O
Req.
Manager H.R.D.&P.. At H/O
Suppliers
IF
1
1
Supply the items
Original GRR Duplicate GRR
Duplicate GRR
Requested item is issued
This is the purchase system for Najma Sugar Mills. The main things are
PR……………………… purchase requisitionGRR……………………………..Goods Receiving Receipts
After this the bills are sent to the accounts branch of both site & H/OWho is responsible for the payment of the bills All the bills received by the
Accounts sec. is matched by the GRRs. And then paid to the supplier.The store is responsible for the checking of received items for any cracking.If any piece is found damaged at the time of receiving it is not received and
Also not entered in the GRR.
SALE DEPARTMENT
Stores at site
Purchase sec (S)
Purchase sec (H/O)
User
Sales department is the department, which deals the sale of sugar and other by-
products. Sales department is working under Sales Officer.
FUNCTIONS
The main function of this department is the sale of sugar, molasses, baggasse &
mud. The main goal of this department is to sell the stock at best available market
price. To keep the record of sale of sugar and other by-products Computer
Software is used. All transactions of sale are posted daily in computer.
Following record are maintain by Sale Department:
1. Sales Register.
2. Stock Reports.
3. Delivery Orders.
4. Invoices.
5. Sales Tax Detail.
6. Parties Position.
In NAJMA Sugar Mills Limited normally all the sale is done through agents. There
are three main parties of sale; all sales are done through these parties. Delivery
Orders are sent to site according to contract. Without delivery order go down
incharge cannot dispatch the sugar bags.
BANKING SECTION
The Company kept Current Accounts almost in every bank, but most business is
routed through these banks, which are as follows.
Allied Bank of Pakistan Limited
National Bank of Pakistan Limited
Muslim Commercial Bank Limited
Habib Bank Limited
United Bank Limited
Bank Al-Falah Limited
Emirates Bank International
The company has also kept Loan Accounts in all above-mentioned banks. The
company has routed its most of the import business from Muslim Commercial
Bank Limited, most of the L/C’s are opened in Muslim Commercial Bank Limited.
The company is also availing Cash Finance Facility from the above-mentioned
banks against pledge of sugar bags. Normally at the beginning of the crushing
season sugar bags are not sold in market, because these bags are used against Cash
Finance Facility from banks. Cash Finance is the main source of the company
when there is a shortage of funds.
The company has also availed Short Term & Long Term Finances from following
banks.
Investment Corporation of Pakistan
National Bank of Pakistan Limited
Muslim Commercial Bank Limited
Habib Bank Limited
United Bank Limited
This section is the very important part of the Accounts Department. All the
functions that are related to the banks are done in this section. Key functions of the
section are as under:
1. Preparation of Bank reconciliation statement.
2. Treatment of the bank’s debit and credit advices.
3. Preparation of Demand Drafts, Telephonic Transfers, Pay Orders,
Cheques with reference to payments to the parties.
BANK RECONCILIATION STATEMENT
Some banks of the company sends the statements of the accounts to the company
on daily basis and some sends at the end of every month or on the demand of the
company from time to time. This statement has all the records of transactions
between the company and the bank during that specific period.
Accounts department reconciles the bank statements with accounts, some time due
to some reasons; transactions do not equally matched with the company’s records.
Reasons are as follows:
1. Cheques issued by the company to any party but not still presented to the
bank for payment.
2. Cheques deposited but not cashed or canceled due to some reason.
3. Any amount debited or credited by the bank but not treated in the
company’s accounts.
All these missing items are required to be settled in the company’s accounts.
DEBIT & CREDIT ADVICES
Banks sends debit and credit advices to the company according to the transactions.
These advices are the reflection of the transactions between the company and the
bank.
When any amount is deducted from the company account due to any reason like:
Deduction of Bank Cheques.
Payment of any amount to any party on the behalf of the company.
The adjustment of loan.
For these amounts, the bank made the Debit Advice, means that certain amount
has been deducted from the company’s account, and sends it to the company.
Moreover, when the bank adds any amount in the company’s account due to some
reason like:
1. Re-imbursement of loan / refinance.
2. Depositing of any amount in the bank by the company.
3. Depositing of any amount in the bank from any party in the company’s
deposits.
4. Mark-up on the company’s deposits.
For these, the bank sends the Credit Advice to the company, means that the certain
amount has been added to the company’s account and sends advice to the
company. The company add this amount to the banks ledger. Accounts department
debit these amounts to the banks ledger through B.D.N Voucher (Bank Debit,
Credit Note), this voucher is firstly signed by Accountant, secondly by the Chief
Accountant, thirdly by the Financial Controller, fourthly by General Manager,
fifthly by Internal Auditor and at the end this voucher sends to Chief Executive for
final signature.
DATA ADMINISTRATION
Business environments are becoming more and more complex with the passage of
time. The cope with changing environment and modern technology, a lot of energy
& knowledge is needed. Media and information technology are of utmost important
and discoveries in the computer technology have been made in the past few
decades.
SOFTWARE SPECIFICATION:
NSML got their system development in FoxPro Language from ICS (Pvt.) Ltd.
They have following systems computerized.
Accounts system
Sales System
Purchase System
Store System
HARDWARE SPECIFICATION:
AT SITE:
ACCOUNTS DEPARTMENT:
1. Main Server Pentium- III
2. Four Clients Pentium- III
3. Printer LQ-2170
SALE DEPARTMENT:
Main Server Pentium- III
Client Pentium- III
Printer LQ-2170
PURCHASE DEPARTMENT:
1. Main Server Pentium-III
2. Clients Pentium- III
4. Printer LQ-2180
AT HEAD OFFICE:
In NSML, they are using network computer system. Their terminals are network
through networking. They have nine terminals on the whole.
All the terminals are the intelligent terminals and the main server is installed in the
office of manager MIS dept.
PRESENTATION OF REPORTS
No one system can said computer until it generals certain reports. So the system of
NSML is also generating a broad no. of reports. Following are some important
reports produced by this system;
Listing of all master files
Listing of all ledgers files
Sub ledgers
Edit lists
Due balances
Day Book
Purchase day book
Sale day book
Trail Balance
Cash Book
Monthly Balances
Outstanding Cheques
Trail Balance
Monthly Profit & Loss Account.
DATA SECURITY:
The issue of data security is crucial in the era of centralized database. We use the
term “data security” to mean protection of the data in the database against the
unauthorized or accidental disclosures, alteration or destruction. Realizing that
perfect security is unattainable, the objective of data security is to minimize the risk
and probability of loss and disclosure to the lowest affordable level.
There, in NSML, they are securing their data in following ways;
Backup
Protecting from unauthorized access
Watchman
UPS (Un-interruptible Power Supply)
Stabilizer
We have already described that NSML is being running their computer network
under the environment of VM.s / CMs Operating Systems. Their Operating
Systems provides them he facility to set different level passwords. Each level may
be allocated different rights that are pre-specified. They are using four levels of
data securing and only the authorized person can access the system up to the extent
they have authority. These levels are as follows;
SYSTEM LEVEL SECURITY:
This is highest level of security. It has all the possible rights. It has access to
change the different operating system protocols. It can change the different
passwords. It can modify the level of rights given to different users. In NSML, M.
FIAZ, the head of MIS Dept, carries it.
FIELD LEVEL SECURITY:
This level of somewhat different, with reference to other levels. The manufacturer
of operating system uses this level. Whenever, there is any problem in system,
manufacturing personnel are called. The personnel of manufacturing firm come
there and input their password and work there to save the problem without
disturbing the personnel of MIS Dept.
MANAGER LEVEL SECURITY:
This is the top most level in operational work. Manager MIS Dept also holds this
level. Under this level, the manager can perform any kind of activity regarding the
management of the data.
USER’S LEVEL SECURITY:
This is also called the K.P.O level. At this level user of the system have the
minimum rights. Their main work is to input the data and to generate different
reports. They have also rights to enter in their own files. But others files are
inaccessible.
ORGANIZATIONAL INCENTIVES
NSML has a well-formed human resource department (HRD), due to which a lot
had been done and is being done to make the moral of the workers of the
Organization high & high.
WPPF (WORKERS PROFIT PARTICIPATION FUND)
This is the name of the fund given to workers when company earns profit. It is 5%
of the total profits earned during an accounting year. Every workers / Employee
whose not pay is up to Rs. 3000/= is eligible for getting this fund.
BONUS POLICY:
The company maintains a bonus policy for its workers to initiate the motive to
work whole-heartedly for increasing workers and organizational efficiency.
According to this policy, company shall give sum equivalent 60% basic salaries of
worker at the end of the every accounting year in case of report earning.
SOCIAL SECURITY FACILITY:
The company deducts a nominal amount in the account of social security from the
salaries of the workers on monthly basis. This deducted amount is submitted to the
social security and they allot a social security number with an identification card,
which shows that the worker had got the facility of social security. Major
advantage provided through social security number is the free health care including
medical and surgery facilities from the specified social security hospitals.
E.O.B.I (EMPLOYEES OLD AGE BENEFITS INSTITUTION)
This is an important deduction from the salaries of the workers for the regular
income in the old age / post retirement age so that workers have a thought of relief
that there would be no financial problem after the expiry of his employment. EOBI
is an institution where this deducted amount is accumulated for the future use when
these people will not be able for employment.
HOUSING FACILITIES:
The workers have provided with the residential facilities and small quarters are
provided to the workers. These quarters are often visited by the resident director for
the checking of cleanliness and other important matters if raised by any situation
from the workers side.
COMPANY CANTEEN:
Company has given the provision of a canteen / café-teria for its workers and
employees. The quality of the food available in the factory canteen is under the
supervision of the labor officer.
LUNCH & TEA:
According to the scheme, company gives lunch to all its workers / employees once
in every month.
It also gives two times tea and lunch free to the executive level.
PROBLEMS OF SUGAR INDUSTRY
Quality of sugarcane is not very good, because of lack of research in this
sector.
Role of Government in developing varieties of sugarcane is not very
significant; only some private institutions are doing some research in
developing various varieties for higher yield.
Government’s wrong policy for import of raw sugar.
Heavy duties on export of sugar.
Instability of exchange rate also creates problems for exports and imports.
Increase in cost, due to Government policy of increasing prices of sugarcane,
furnace oil & electricity.
Low sale price of sugar in the market.
Higher rate of mark-up on Finance Facilities.
Lack of institutional finance for modernization efforts.
SWOT ANALYSIS
STRENGTH:
Another strength is the high motivation of employees to their work because
they know that what so ever they do, it will be in their own benefit. They
know that the profit, which they will earn, will be distributed among all the
employees. So they work with high motivation and concentration.
Salaries are very reasonable, so the employees are not financially disturbed
and they devote their selves fully to their work.
Having a professional management.
Friendly and cooperative working environment.
Better financial resources.
Good & new machinery provides competitive advantage.
LAN Networking helps the higher authority in good management and provides timely information.
Camera screening is a plus point for better management.
WEAKNESSES
Lack of research and development.
Lack of market survey
The residence of the employees is not so good at sight.
The no of workers is less as compared to the requirement of the job.
The area of the sight is reasonably at low height from the surroundings so the rainy season can create difficulty during the season.
The water of the sight is not good and there is no proper arrangement for
this. Tranportation to the site is not available easily.
Telephone service is not efficient.
Opportunities:
Entering into new markets
New government and industrial projects
Opportunities for the online business are available here.
Minimization of cost by properly utilizing the by-products.
Awareness in the growers about the quality of seed should be increased. so
that the good sugar cane can be achieved.
THREATS:
De-zoning policy has created great competition between the organizations.
Due to great competitions the availability of the raw material is the problem.
Invisible trade barriers.
Strict Govt. policies
Low sale price of sugar in market
High raw material price.
Higher rate of mark up
Higher export taxes rates.
WTO is an other threat due to higher cost of raw material
COMMENTS IN BRIEF & SUGGESTIONS
After a short careful analysis, I come to know that the financial position of
the company is very strong than the other sugar mills in sugar industry.
In NAJMA Sugar Mills Limited there is no formal marketing department to
promote and introduce its output in local & international market. There is a
crucial need for having a disciplined & coordinated program of marketing to
boost up sales.
There is a need of searching the new customers in local market.
Sugarcane seeds should be provided to the growers.
NAJMA Sugar Mills Limited should advise its field supervisors to be more
active in field, coordinate with growers and try to understand problems of
the growers.
NAJMA Sugar Mills Limited should appoint skilled persons in every
department.
Local worker should be preferred.
NAJMA Sugar Mills Limited should introduce the new brands of sugar
packets, such as 5 Kgs, 10 Kgs, and 25 Kgs.
Branch of Sales Department should be setup in mills to provide the selling
facilities to the local agents & dealers.
NAJMA Sugar Mills Limited should conduct market surveys and research to
know the customer’s views and suggestions.
Sale Department should be engaged only in sales activities and perform only
following activities.
1. Sale of White Refined Sugar.
2. Sale & purchase of Molasses.
3. Sale & purchase of Baggasse.
4. Sale of Mud.
5. Maintaining a Sale Register.
Remaining work should be done by Accounts Department, which are as
follows:
1. Keeping whole record of Sugar Parties, agents and Customers.
2. Posting of Sale Voucher.
3. Posting of Cash Received from Customers Voucher.
Internal Audit Department should check each voucher.
Internal Audit Department should conduct monthly audit of accounts and
submit its report to Chief Executive, General Manager, General Manager
Finance and Manager Accounts.
No room is available for external auditors in whole group, at least two
rooms should be arranged permanently for external auditors.
Computer department should also establish at site Office.
Accounting Software should also be improved because this software cannot
generate some important reports.
At least one I.T Engineer should be appointed at site Office.
Job rotation principle should be implemented.
The H/O should be connected through Internet with the site. Due to which
cost of telephone and transformation of data can be reduced.
TABLE OF CONTENTS
Sr. # Topic Page #
01 Growth of Sugar Industry in Pakistan 04
02 Introduction 08
03 Main Departments at Site 14
04 Mechanical Department 15
05 Electrical Department 16
06 Chemical Department 17
07 Cane Department 18
08 Accounting Department 20
09 Admin Department 29
10 Main Departments at Head Office (Finance) 33
11 Accounts Department 35
12 Export & Import Department 40
13 Purchase Department 44
14 Sales Department 46
15 Banking Section 47
16 Organizational Incentives 61
17 Quality Management 65
18 Ratio Analysis 69
19 Statement of Cash Flow 74
20 Interpretation 76
21 Problems of Sugar Industry 79
22 SWOT Analysis 80
23 Comments in Brief and Suggestions 81
