Internship Najma Sugar Mill

8/8/2019 Internship Najma Sugar Mill

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INTERNSHIP REPORT ON

NAJMA SUGAR MILLS (Pvt.) LIMITED

Submitted To: MR. JAVEED IQBAL INTERNSHIP COORDINATOR Submitted By:HASEEB AKHLAQUE KHAN Roll No. MT-01-28 MBA (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. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Description

Preface Acknowledgment Structure of Management Growth ofSugar Industry in

Pakistan Group Profile Board of Directors Mission of NSML Objectives IntroductionWorking Force Products of the Company Production Departments at Site Departments at

Head Office Banking Section Data Administration Organizational Incentives Quality

Management Problems ofSugar Industry Comments & Suggestions 2 3 4 5 6 7 8 9 11 1213 16 33 47 51 55 57 59 60 Page No. 1

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 byquotation 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 learnto assume responsibility, co-operation and teamwork the hallmarks of modern

management. Having experience ofsugar industry is really a good experience for me. Iam submitting all my experiences. No doubt, omissions and errors are expected but it isrequested 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 arethe most useful tools for an executive to raise the organizational structure.

HASEEB AKHLAQUE KHAN


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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 toHAZRAT 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 myoperation and helped me in completing this report. professors for full coI 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 enthusiasticencouragement 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 Mr. Raisuddine Shaikh Mr. Ghulam Hassan shigri Mr.Mohammad Fiaz Mr. Akhlaque Ahmed Khan Mr. Mohammad Azhar Mr. Basharat

Biabani Chief Executive Officer Managing Director General Manager (f) Manager ( I . T)Manager (H.R.D.&P)

Chief Accountant 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 likeacknowledging 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 Pakistans economy. Sugar industry plays a vital

role for development of any countrys 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%.

HISTORYThe sugar industry, which is endowed with a strong base of sugarcane, had started itsjourney 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 exchangeearning. At present Pakistans sugar industry is facing lot of problems like lesser demand

ofsugar in the country due to recession in the economy, declining prices into the

domestic as well as international markets & huge unsold stock ofsugar. Government role


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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 riverin 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

USA Mauritius India Brazil Pakistan CubaSource: down EBR July 12-18,2002

1989-92 77.44 70.33 66.06 62.02 41.55 59.98

1993-97 76.80 72.83 64.14 61074 43.38 57.04

1998-2002 75.19 71.39 70.30 67.42 43.54 34.83

GROUP PROFILE

The company has been sponsored by SIKANDER GROUP OF INDUSTRIES in ISLAMABAD. 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

TASAQ INTERNATIONAL (PVT) LTD.

HEAD OFFICE:

ISLAM ABAD

MANAGEMENT PROFILEChairman KHAN Chief Executive MR. JAHANZAIB SIKANDER (RET) GEN.

SIKANDER HAYAT

Managing Director Director finance Director (HRD&P) General Manager (f)

General Manager (plant)


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Mr. RAISUDDINE SHAIKH Mr. Bashir Ahmed Mr. Noor Ahmed Zaib Mr. Ghulam

Hassan shigri 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

& Total Quality Management. International Market.

OBJECTIVES

Following are the objectives of company. 1. Total quality focus to meet customers

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 ofcontracts 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/-. Thecertificate 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.


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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 owncrushing 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 Temporary Employees Seasonal Employees Daily Wages

Employees Total 157 30 400 (app.) 10 597

AT HEAD OFFICE

Permanent employees Temporary Employees Total 25 5 30

PRODUCTS OF THE COMPANY

SUGARINDUSTRY IS AN AGRO-BASED INDUSTRY, WHICH PROVIDES

EMPLOYMENT TO THE LANDLESS RURAL POPULATION AND HASE AGREATE 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 intermissionstandard 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 SUGARMILLS LIMITED AND


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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 productionof 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 isused 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 Season Ending Date & Time Date & Time 05-01-2003 At 6:25 P.M 05-01-

2003 At 6:25 P.M 80 52095.53 1302388.25 1518.5 30370 1039.282 4.989 4358.750

8.391

Duration of season (days) Cane Crushed (M.Tons) Cane Crushed (MND) SugarProduction (M.Tons) Sugar Production (Bags) raw Sugar Production (M.Tons) Sugar

cane recovery (%) Molasses Production (M.Ton) Molasses Recovery (%)

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

Mechanicaldepartment 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


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efficiently without any hurdle. Mechanicaldepartment 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. Thisdepartment plays very effective role for keeping the plant in running conditions.

FUNCTIONS

The main function of this department is to assist the mechanicaldepartment, with the

help of this department; mechanicaldepartment 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 professionalabout 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 departmentplays very important role for crushing of sugarcane.

FUNCTIONS

The main function of this department is to test the quality ofsugar, 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 whohas vast knowledge about chemical. All the chemists are very experienced and

professional.

CANE DEPARTMENT

Cane department is the majordepartment of any sugar mill. This department is

purchasing sugarcane from growers.

FUNCTIONS

Cane department is working under General Manager Cane, who is a very experiencedperson 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, canedepartment 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 growers 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 bereturned in the shape of supply of sugarcane to the respective mill.


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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 availableduring the season.

CANE ACCOUNTINGAfter receiving sugarcane from the grower, process of payment starts. Cane accounts

generate the payment that is sent to the banks for disbursement. Cane accounts generatethe 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 theprinted 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 paymentis 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 underChief Accountant, who is a very experienced person.

FUNCTIONSThe 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 followingactivities:

Maintaining Records Keeping Accounts Record of All Departments Payment of Wages& Salary Store Accounts Cane Accounts Dealing With Banks Tax related matters Stock

Position


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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 GoodsInventory 4. Spare Parts Inventory

For effective control over the companys 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 itsproduction and functions of other departments without any hurdle. This departmentreceives the demand from various departments and then arranges the required goods /

items. When demand of items / goods received, then following process starts. 1. PurchaseRequisition received at store, through relative departments head, which contains items

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 requiredmaterial/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


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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 requireditems at Site through suppliers own vehicle or through rented vehicle on companys

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.StoreIncharge 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 Inchargeissue 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 andname of the person taking it. All the above-mentioned documents have three copies. Firstcopy hold down at Store, Second copy is hand over to the seller and third copy sent to

accounts department.

Stores issue material/items to various departments according to their demands and thenposted 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 DEPARTMENTNow a days computer plays very effective role in all fields of life. At present all sugarmills in Pakistan are using various softwares. Computerdepartment of NAJMA Sugar

Mills Limited is working under Manager Information Technology, who is a very efficientperson and have a vast experience about different softwares 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 moderncomputer 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 growerand give recommendations on the basis of given parameters. CANE LOADING &

PROCUREMENT Before starts of the crushing season, cane department of NAJMA


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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 accommodateeach 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 thesugarcane 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 Recordingthe Date Printing of CPRs Daily Crushing Summery Contractor wise summery


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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 growersprocess 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 paymentis to be made at Head Office, but during routine, payment made to growers at site through

bank.

ACCOUNTS DEPARTMENT

Accounts dept. at NAJMA SUGARMILLS 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 thesupervision of MIT. The accounts system is Fund Account Journal Vouchers capableof making following reports. M.RsTaxation Reports All types of Financial Reports.Utilization Reports. Fund Allocation Reports

ADMIN DEPARTMENT


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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 aboutadministration matters.

FUNCTIONSThe 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 workingenvironment. 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 Gate Office Time Office Security Guard Office

Labor offices as under: 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 anyother 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 andpay register for the final costing of the It keeps the attendance records, which is than

used to workers salaries. It keeps the calculate the salary to be paid to the workers

on monthly basis. records of the over time, leaves, number of days worked of all theworkers 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, Pensionsand 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 No out side visitor can come into the

mills premises without security officer. Whenever any visitor wants to enter thepermission of the security guards. into the mill, security guards firstly contact with the

authority in the mill to Security guards can grant the permission to enter into the millpremises. check each and every person before coming in or going out of the companygate for the security purposes.


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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 employeeand 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. TheManager (HRD&P) is the head of the H.R.DEPT.

He is responsible to resolve all the disputes, conflicts, misunderstandings and anyother hind of matter, which may arise from time to time between the labor and theimmediate supervisor, or with any other person in the It is the duty of the Manager

(HRD organization. &P) to inform the legal It is also the duty of requirementsconcerning the labor and company affairs. 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 It is also a requirement to be a successful Manager (HRD high.&P) that he should keep his knowledge up to date regarding the rules and regulations of

the labordepartment . Manager (HRD&P) is responsible for the implementation ofthe strategies and Manager (HRD rules made by the higher authorities. &P) also helpsthe higher authorities in strategic decisionmaking.

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 ofsugar stocks. This department also performs Managing Cash Fund Raising.

Financial Planning. following activities: & Analyze the Capital ExpenditureDecisions. Credit Activities. Short TermEvaluation. Financial Information. &Long Term Financing. Finance department analyzes the financial information and thenpresents 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 otherFinancial Statements.


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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 actualposition 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 intobooks 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 Departmentare as follows: Payment ofKeepingAccounts Record of All Departments Maintaining Records Wages & Cashmanagement Control of Funds Dealing With Banks Salary Cash Flow TaxMatters Receipt of Cash Payment of Bills and Charges

Analysis of Preparation of Final Accounts Arrangement of Heavy Funds ProvidesReports for Assistance in analysis to top managementReports decisions. We can saythat 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 tothe 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, theamount 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 themills. Purchase department is working under Manager Purchase, who is B.Com + C.A-

Articles.


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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 itemsat convenient rates. This department conducts all the purchases. There is also a Purchase

Assistant in this department to keep the records. Whenever any particulardepartmentrequires 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 andothers. 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 isrequired, 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 orhead 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.

User at site

Request for item at site Store Search for item Yes No

Daily

if Special

Purchase sec. At site

Purchase sec. At H/O

Req< 50000 R eq.

If

Req >50000

Request for requisitions Provide Requisitions


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Manager H.R.D.&P . . At H/O Compare the requisitions

Supplier s

Not accepted IF

1 1

Order for items

Accepted

Supply the items Original GRR

Stores at site

Duplicate GRR

Duplicate GRR Purchase sec (S) Purchase sec (H/O)

Requested item is issued

User

This is the purchase system for Najma Sugar Mills.

The main things are PR purchase requisition

GRR..Goods Receiving Receipts After this the bills are sent

to the accounts branch of both site & H/O Who is responsible for the payment of the billsAll 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 notentered in the GRR.

SALE DEPARTMENT

Sales department is the department, which deals the sale ofsugar and other

byproducts. Sales department is working under Sales Officer.

FUNCTIONS

The main function of this department is the sale ofsugar, 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 ofsugar and other by-products Computer Software is used. Alltransactions 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 isdone through agents. There are three main parties of sale; all sales are done through these


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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 companyhas routed its most of the import business from Muslim Commercial Bank Limited, most

of the L/Cs are opened in Muslim Commercial Bank Limited. The company is alsoavailing Cash Finance Facility from the above-mentioned banks against pledge ofsugar

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


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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 asunder: 1. Preparation of Bank reconciliation statement. 2. Treatment of the banks 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 bankstatements with accounts, some time due to some reasons; transactions do not equally

matched with the companys 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 orcredited by the bank but not treated in the companys accounts.

All these missing items are required to be settled in the companys 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 companys account, and sends it to the company. Moreover, when thebank adds any amount in the companys 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 companys

deposits. 4. Mark-up on the companys deposits. For these, the bank sends the CreditAdvice to the company, means that the certain

amount has been added to the companys account and sends advice to the company. The

company add this amount to the banks ledger. Accounts department debit these amountsto the banks ledger through B.D.N Voucher (Bank Debit, Credit Note), this voucher isfirstly 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.


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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. Theyhave following systems computerized. Accounts system Sales System Purchase

System Store System

HARDWARE SPECIFICATION: AT SITE:

ACCOUNTS DEPARTMENT: 1. Main Server 2. Four Clients 3. Printer Pentium-

III Pentium- III LQ-2170

SALE DEPARTMENT:

Main Server Client Printer Pentium- III Pentium- III LQ-2170

PURCHASE DEPARTMENT:1. Main Server 2. Clients 4. Printer Pentium-III Pentium- III LQ-2180

AT HEAD OFFICE:

In NSML, they are using network computer system. Their terminals are network throughnetworking. 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; Edit Sub ledgers Listing of all ledgers files Listing ofall master files Trail Sale day book Purchase day book Day Book Duebalances lists Cash Book Balance

Monthly Profit Trail Balance Outstanding Cheques Monthly Balances &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 lossand disclosure to the lowest affordable level. There, in NSML, they are securing Protecting from unauthorized access Backup their data in following ways;Stabilizer UPS (Un-interruptible Power Supply) Watchman

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


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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 thedifferent 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.

USERS 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 theevery accounting year in case of report earning.


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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 socialsecurity 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 facilitiesfrom 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 wherethis 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 / caf-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 Role of Government indeveloping varieties ofresearch in this sector. sugarcane is not very significant; onlysome private institutions are doing some Governments wrongresearch in developingvarious varieties for higher yield. policy for import of raw sugar Heavy duties on.export ofsugar. Instability of exchange rate also creates problems for exports andimports. Increase in cost, due to Government policy of increasing prices of sugarcane,

furnace oil & Low sale price ofelectricity. sugarin the market. Lack of institutionalfinanceHigher rate of mark-up on Finance Facilities. for modernization efforts.

SWOT ANALYSIS

STRENGTH:

Another strength is the high motivation of employees to their work because they knowthat 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


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Salaries are very reasonable, so the employees motivation and concentration. are notfinancially disturbed and they devote their selves fully to their work. Friendly and

cooperative working Having a professional management. Good Better financialresources. environment. & new machinery provides LAN Networking helps thehigher authority in good competitive advantage. Camera screening is a pluspoint management and provides timely information. for better management.

WEAKNESSES

Lack of market Lack of research and development. The no of The residence ofthe employees is not so good at sight. survey The area of the workers is less ascompared to the requirement of the job. sight is reasonably at low height from the

surroundings so the rainy season can The water of the sight is not good and createdifficulty during the season. there is no proper arrangement for this.

Telephone service Tranportation to the site is not available easily. is notefficient.

Opportunities:

New government and Entering into new markets industrial projectsOpportunities for the online business are available here. Awareness in the Minimization of cost by properly utilizing the by-products.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 Due to great competitionsthe availability of the raw the organizations. Strict Govt. policies Invisible tradebarriers. material is the problem. Low sale price ofsugar Higher export Higherrate of mark up High raw material price. in market WTO is an other threat due tohigher cost of raw material taxes rates.

COMMENTS IN BRIEF & SUGGESTIONS

After a short careful analysis, I come to know that the financial position of thecompany is very strong than the othersugar mills in sugar In NAJMAindustry. SugarMills 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 There is a need of searching the newcustomers in local market. sales. NAJMASugarcane seeds should be provided to thegrowers. Sugar Mills Limited should advise its field supervisors to be more active in

field, coordinate with growers NAJMAand try to understand problems of the growers.Sugar Mills Limited should appoint skilled persons in every department Local worker.NAJMAshould be preferred. Sugar Mills Limited should introduce the new brands ofsugar packets, such as 5 Branch of SalesKgs, 10 Kgs, and 25 Kgs. Department


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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

Saleknow the customers views and suggestions. Department should be engaged onlyin 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 ofSugar Parties, agents and Customers.

2. Posting of Sale Voucher. 3. Posting of Cash Received from Internal AuditCustomersVoucher. Department should check each Internal Auditvoucher. Department shouldconduct monthly audit of accounts and submit its report to Chief Executive, General No

room is availableManager, General Manager Finance and Manager Accounts. forexternal auditors in whole group, at least two rooms should be arranged

Computerpermanently for external auditors. department should also AccountingSoftware should also be improved becauseestablish at site Office. this software cannot

At least one I.T Engineer should begenerate some important reports. The Jobrotation principle should be implemented. appointed at site Office. H/O should beconnected through Internet with the site. Due to which cost of telephone and

transformation of data can be reduced.

TABLE OF CONTENTS

Sr. # 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 IntroductionMain Departments at Site MechanicalDepartment Electrical Department Chemical

Department Cane Department Accounting Department Admin Department Main

Departments at Head Office (Finance) Accounts Department Export & Import

Department Purchase Department Sales Department Banking Section Organizational

Incentives Quality Management Ratio Analysis Statement of Cash Flow Interpretation

Problems ofSugar Industry SWOT Analysis Comments in Brief and Suggestions TopicGrowth ofSugar Industry in Pakistan Page # 04 08 14 15 16 17 18 20 29 33 35 40 44 46

47 61 65 69 74 76 79 80 81

Internship Najma Sugar Mill

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