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Najma Sugar Mills Ltd

Najma Sugar Mills Ltd

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03/17/2014

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 of Sugar Industry in Pakistan Group Profile Board of Directors Mission of NSML Objectives Introduction Working Force Products of the Company Production Departments at Site Departments at Head Office Banking Section Data Administration Organizational Incentives Quality Management Problems of Sugar Industry Comments & Suggestions 2 3 4 5 6 7 8 9 11 12 13 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 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 operation 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 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 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 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
USA Mauritius India Brazil Pakistan Cuba
Source: 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 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 KHAN Chief Executive MR. JAHANZAIB SIKANDER (RET) GEN. SIKANDER HAYAT

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

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 & 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 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
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 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) Sugar Production (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
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 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 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.

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

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 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
Sales department is the department, which deals the sale of sugar and other byproducts. 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 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 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. # 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Introduction Main Departments at Site Mechanical Department 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 of Sugar Industry SWOT Analysis Comments in Brief and Suggestions Topic Growth of Sugar 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

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