Ahmad Fine Textile Mills Ltd.

AHMAD FINE TEXTILE MILLS LIMITED
STATUS
The Company is limited by shares incorporated in Pakistan on December 13, 1989 under the Companies Ordinance, 1984 with an Authorized Capital of 10000000 Ordinary Shares of Rs. 10/- each i.e., Rs. 100000000/-. The Issued, Subscribed and Paid up Capital of the Company is 3800000 Ordinary Shares of Rs. 10/- each full paid in cash i.e., Rs. 38000000/-

NATURE OF BUSINESS
The Principal Business of the Company is Manufacture and Sale of Yarn and Cloth.

MANUFACTURING UNITS
The Company has two manufacturing units, one is spinning unit and the other is Weaving unit. The Spinning Unit is located at District Rahim Yar Khan and the Weaving Unit is located at District Multan in the Province of Punjab.

OFFICES
Head Office of the Company is located at Ist Floor, International Plaza, Bohra Street, Multan Cantt. Sub Office is located at 35-KM, MultanBahawalpur Road, Near Adda Basira, Multan. Another sub office is located in the Spinning Unit at Rahim Yar Khan.

INTERNSHIP REPORT

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Ahmad Fine Textile Mills Ltd.

AUDITORS
M/S M. Yousuf Adil Saleem & Company, Chartered Accountants, a member of HLB International, a world wide organization of accounting firms and business advisers. 2nd Floor, 6-Commercial Plaza Opposite Civil Hospital Abdali Road, Multan.

FINANCIAL YEAR
Financial Year of Company starts on Ist October and lasts till September. 30th

BANKERS
Muslim Commercial Bank Limited. Habib Bank Limited. Askari Commercial Bank Limited.

PRODUCTS
Major Products of the company are Blended Yarn Grey Fabric

RAW MATERIALS
Raw materials of productions are Ginned Cotton, Polyester and Yarn.

WORK FORCE
The Company has a total work force of 743 including skilled and unskilled.
INTERNSHIP REPORT 2

Ahmad Fine Textile Mills Ltd.

CAPACITY
Number of Spindles installed Number of Spindles worked Number of Shifts per day Number of working days Installed Capacity after conversion Into 20/s count kgs Actual production of yarn after conversion into 20/s count kgs 7626423 5632450 03 365 17280 17280

PORTION OF EXPORTS
The Company exports more than 90% of the produce.

INTERNSHIP REPORT

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Ahmad Fine Textile Mills Ltd.

MISSION STATEMENT
To produce superior quality of Yarn by focusing on customer demand in order to face the competition in international market and at the same time taking care of its employees, suppliers, shareholders and society.

INTERNSHIP REPORT

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Ahmad Fine Textile Mills Ltd.

PURCHASE DEPARTMENT
The purchase department is divided into to two sections, cotton purchase department and store purchase department.

PURCHASE DEPARTMENT

COTTON PURCHASE

STORE PURCHASE

COTTON PURCHASE DEPARTMENT
Cotton purchase department is most important department in textile industry. Quality of yarn depends upon cotton that has been purchased. It becomes most important when there is business of export. There is no question of compromise on quality. Because your minor mistake may result in huge losses. Moreover you will loss your credibility. From director to cotton selectors all are involved in cotton purchase process.

INTERNSHIP REPORT

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cotton.e. Demand of purchase from mill Purchase Requisition Sample from different suppliers and quotations Sample Testing Decision-making Agreement with the Party Receiving Writing delivery order for factory InGate pass + D. PURCHASE PROCESS The following steps are involved in the purchase of raw material i.O + Purchase Invoice + Purchase Requisitions are supplied to accounts department INTERNSHIP REPORT 6 .Ahmad Fine Textile Mills Ltd.

and General Store. STORE PURCHASE DEPARTMENT The store purchase department is headed by Stores Incharge. These samples are then tested. SELECTION OF SAMPLE Samples are selected from huge amounts of cotton. INTERNSHIP REPORT 7 . As there is centralized management system so the Director himself takes the decision of selection and purchase of cotton. The most suitable sample at lowest price is selected for Purchase of cotton. The setup of purchase department is as under:  Director  Purchase Officer  Assistant Purchase Officer  Purchase Clerk The store purchase department is responsible for the purchase of items like Spare parts of machinery. Their visits are very important because purchase process starts from here. Stationery items. oil and lubricants. store and Packing material spares. In other words Director is final authority in making decision.Ahmad Fine Textile Mills Ltd. Cotton selectors may visit the factories on their own behalf and some times the cotton factories call them. electric items. Samples are taken from different suppliers. Building Material. VISIT OF COTTON SELECTORS The cotton selectors of AFT visit the cotton ginning factories.

 The purchase department receives the demand requisition from store in charge at store at mills this is in fact an intention or requirement of commodities at mill  The purchase demand requisition contains a full detail of quality and quantity of commodities required.Ahmad Fine Textile Mills Ltd.  After inquiry Purchase Manager discusses with Director for approval of rate and other necessary requirement. Store in charge also keeps a copy of delivery order and in Gate Pass for his own record. • Invoice of Purchase • Delivery Order • In Gate Pass PROCEDURE The following is the procedure for local purchase department. INTERNSHIP REPORT 8 .  In case of rejection of items store in charge sends all copies of Delivery Orders with items back to the purchase department at Multan Office of AFT. It also contains price detail of goods purchased previously  The purchase department on the basis of indent does an inquiry for rate from at least two suppliers from approved suppliers list. DOCUMENTS • Demand Requisition.  After the approval the Purchase Department purchases the items from suppliers and sent them to the mill with three copies of delivery orders  In case of no rejection of items store in charge send one copy of delivery order back to the purchase department along with one copy of In Gate Pass.

Ahmad Fine Textile Mills Ltd. INTERNSHIP REPORT 9 .

• In reply. • The received items are sending to the mills where these are opened. spare parts. The import department is responsible to import those items.A copy of quotation is sent to concerned department for evaluation and checking of specification. a quotation from the subcontractor is received . equipment. The items are checked against quotations. raw material. • The Senior Manager Import selects a subcontractor from approved suppliers list. In case of any damage. The structure of this department is as under: Chief Executive Director Senior Manager Import Assistant PROCEDURE Senior Manager is responsible for import of machinery. etc. • An indent for import of item after the approval of Chief Executive is sent to import department. which are not available in Pakistan. the import department is informed immediately. Import department do the necessary arrangements for survey of goods from insurance agencies INTERNSHIP REPORT 10 . IMPORT DEPARTMENT AFT has also an import department.Ahmad Fine Textile Mills Ltd.

recent changes in tax policies.His ten-year experience has made the work easier for him. ACCOUNTS DEPARTMENT Accounting is the art or science of interpreting. you are working with accounting. are maintained here. designing the accounting policies and accounting system. Accountant is very much busy person who gives instructions to six members of finance department and checks their work time-to-time . Purchase and sale department. preparing your income tax return or managing an international corporation. So this department feels a burden of work. balancing your checkbook. companies’ names are on his fingertips. preparing financial statements and computer application. INTERNSHIP REPORT 11 . Without accounts department there is no possibility of doing business even sight weakness’ on the part of accounts department can badly effect the performance of whole organization. different codes. Accounts Manager makes the important financial decisions with consultation of Director and Chief executive of company. If we consider a company a cell then we can say that accounts department has role of nucleus. Export department. and communicating the results of economic activities whether you are paying your phone bill. Record of all departments like import department.Ahmad Fine Textile Mills Ltd. All types of tax rates. measuring. The accounts department is responsible for the entire accounting process of the organization regarding the recording of transactions.

This is also called process of vouching. After this all the DR balances and CR balances of all the parties are posted in trial balance. Now trial balance becomes the source of profit and loss and balance sheet. This department also designs the accounting policies. Otherwise there is any error in recording the transactions. All the work in this department is being take place on accrual basis. This is made for internal record keeping. The department prepares trial balance at the end of every three months and Profit and loss accounts and balance sheet are prepared at the end of year. DO and other necessary documents are kept in the record room so daybook is one that can give information about parties DR and name of account CR along with amount. From vouchers information is recorded in daybook and cashbook. Ledger represents DR or CR balance of each party. Wrong vouching will lead to error in the system and ultimately create problems. The financial year ends on september30 of each year. From daybook all the entries are posted in ledger. In order to see accounts in condense form ledger is used. As each voucher along with its invoice. Auditors specifically audit vouchers. So from ledger we can see amount that is to be paid to a party or the amount that is to be received and the balance at the end of the month. The trial balance must be equal at both sides. FUNCTIONS OF THE DEPARTMENT Very first and an important function of accounting department is recording the business transactions on vouchers.Ahmad Fine Textile Mills Ltd. The financial statements are presented to shareholders INTERNSHIP REPORT 12 .

oil and Lubricant. Salaries and Wages Section 3. Packing material A/C. The major responsibilities of this department are INTERNSHIP REPORT 13 . General Accounting STORE SECTION Store section is mainly concerned with store accounting. This section deals with many accounts heads that are concerned with stores. Building Material A/C and many others.Ahmad Fine Textile Mills Ltd. Such as stores &spare A/C. Stores section 2. General Store A/C. THE SETUP OF DEPARTMENT Chief Accountant Accountant Accountant Asst Accountant Computer Computer Operator Operator Cashier Cashier Record Keeper Record Keeper The accounting department is mainly divided in to following three sections: 1.

This section plays an important role in safeguarding the interest of the company as well as employees.e. Sick Leaves Sick Leaves are eight in year Casual Leaves Casual Leaves are ten in each year Annual or Earned Leaves There are twelve earned leaves. This section also insures all the labor laws. SALARIES AND WAGES SECTION This section is responsible of making payments to the employees. party wise purchase report To keep a check on all stores by surprisingly checking their record and physical existence of items stored. Company’s rule doesn’t allow any employee to do four-day leave without application. No payment is made to any body unless it is checked and verified by this section. In case any employee does so then he can’t avail annual leaves INTERNSHIP REPORT 14 .Ahmad Fine Textile Mills Ltd. • To record the store purchases • To record all store issues • To prepare various reports relating to store i. certain laws relating to company are as under: Leave Procedure There are three types of leaves. Because of the above mentioned duties. This section has a key position in the company. material consumption report.

Salaries and Wages Minimum salary is not less than Rs1950.An entry is passed on voucher while deducting income tax and this is paid to tax department Advances and Loans Advances and loans are given to the Employees on their application and are adjusted against their salaries every month.40000. This is given according to their per day salary multiply with number of days of holidays not availed. Attendance Allowance Leave encashment is given to those employees who save their holidays and don’t avail them. The breakup of salary is as under Basic Salary Badli allowance Cost of living Allowance House Rent Allowance Utility Allowance Special Allowance Income Tax Income tax is deducted from salary of all those employees whose annual salary is greater than Rs. It is the sole discretion of the management whether they approve advances and loans are not Gratuity Amount of gratuity is deducted from salary of employee with passage of time and he gets a lump sum amount at retiring time ________ 50 18% of basic salary 10%of basic salary 10% of basic salary 300 INTERNSHIP REPORT 15 .Ahmad Fine Textile Mills Ltd.

ACCOUNTING SYSTEM Accounting System at here is centralized and on accrual basis. Accounts Manager and Director verify the voucher respectively. The process of accounting system starts from the preparation of voucher. You can receive DR advice or CR advice from bank INTERNSHIP REPORT 16 . Vouchers are prepared after every transaction. The following are different types of vouchers prepared at AFT Mills: • Journal Voucher • Bank Voucher • Payment Voucher • Credit Voucher JOURNAL VOUCHER (JV) As accounting system is on accrual basis. This is also known adjustment voucher. This is prepared for adjusting entry. BANK VOUCHER (BV) Bank voucher is used when any transaction is made with bank . If they have any question they can ask relevant person if there is no enquiry then they will put their signatures on voucher. so accounting entries are passed on journal voucher at first step. Now it is time to record these vouchers in books of accounts.Ahmad Fine Textile Mills Ltd. Amount may be drawn from bank and can be deposited in bank. All accounts are maintained in Multan head office.

5000. Payments more than this are made through bank CREDIT VOUCHER As name of voucher represents. it means bank has deducted some amount from your account or when has been made through your account CR ADVICE When issued by bank to you. PAYMENT VOUCHER This voucher is prepared at the time of making payments to any party. In this case party name is credited by the amount that has been received IMPORTANT BOOKS • Cash Book • Bank Book • Bought Day Book • Sale Day Book INTERNSHIP REPORT 17 . this voucher is prepared when some amount is received from any party.Ahmad Fine Textile Mills Ltd.It normally takes place when some foreign remittances has been received by bank in your account. DR ADVICE When issued by bank. Party name is debited with the amount to which payment has been made. Payment vouchers are used for the payment up to Rs. it means some amount has been added in your account . This is usually sent by your customer in foreign country to which exports has been made.

CASH BOOK In this book cash payment and cash receipt vouchers are recorded on daily basis. The following are the types of ledgers maintained in this organization. At the end of month balances are posted in the main ledger for control purposes. Main ledger Profit &Loss Ledger INTERNSHIP REPORT 18 . The vouchers are numbered serial wise and cash-closing balance is calculated on daily basis. When any amount is withdrawn or deposited in the bank that amount is also recorded in the bankbook. At the end of month bank account is reconciled with the statements of the banks BOUGHT DAY BOOK The bought daybook is maintained for recording the purchases made by the company. The balances from the bought daybook are entered in the relevant supplier ledgers. At the end of the month the balances from the bought day book is posted in the main ledger for control purposes SALE DAY BOOK In this book sale bills are entered and then posted in the customer ledger. BANK BOOK This book is maintained for all the bank accounts of the company.Ahmad Fine Textile Mills Ltd. When the transaction is properly recorded in the books of accounts then these balances are posted in the ledgers.

bought daybook and sale daybook. which maintain all heads of accounts from which balance sheet is prepared. profit&loss. Posting of sub ledger is made in main ledger on closing of month. customer. bank book. PROFIT AND LOSS LEDGER In profit and loss ledger all accounts of income and expenses are maintained . From basic books like cashbook. All assets and liabilities accounted.Ahmad Fine Textile Mills Ltd. supplier and personal Ledger are maintained in it.The following are the heads of accounts maintained in the profit and loss ledger: • Sales Account  Local Sales  Export Sales • Commission on sales • Excise duty on yarn • Export development Charges • Manufacturing Expenses • Administration Expenses INTERNSHIP REPORT 19 . Customer Ledger Supplier Ledger Staff Ledger MAIN LEDGER It is a control ledger. At the end of month trial balance is prepared to check the accuracy of accounts maintained during the month by observing the debit and credit balance as they are equal or not.

printing and stationary expenses SELLING EXPENSES These include export expenses. wages and salaries. fines and penalties. corporate freight. rent. INTERNSHIP REPORT 20 . • Selling Expenses • Financial Charges • Miscellaneous Charges MANUFACTURING EXPENSES They are like purchase of cotton. insurance. legal and professional charges. advertising. letter of credit commission. vehicleup charges. MISCELLANEOUS CHARGES Miscellaneous charges include auditors fee. depreciation. donations. commission on bank guarantees. exchange risk coverage fee. entertainment. fuel and power. phone and telex. excise duty on long term and short term finances. electricity. markup on short term finances. trailer freight and local selling expenses FINANCIAL CHARGES They are like interest on long term loan. communication expenses like fax. ADMINISTRATION EXPENSES These are traveling expenses. packing material and depreciation. salaries. ocean freight.Ahmad Fine Textile Mills Ltd. repair and maintenance of plant.

PERSONAL LEDGER To record all transactions relating to the personal accounts of employees of the company. Party’s account is credited and goods purchased are debited. SUPPLIER LEDGER In supplier ledger the goods supplied by the parties is recorded. bankbook and daybook. INTERNSHIP REPORT 21 .Ahmad Fine Textile Mills Ltd. and the monthly deductions from their accounts of loans are recorded. Advances and loans made to the employees. CUSTOMER LEDGER It is maintained by company in which all accounts are opened to whom the company sells yarn. Posting in customer ledger is made from cashbook. The balances of customers are worked out daily and the report of receivables is prepared daily and submitted to the management. this ledger is used.

An auditor is appointed to go through the accounting and other records. The management can appoint staff to go through the business activities. INTERNAL AUDIT DEPARTMENT Audit means checking the accounts prepared by others with a view to express an opinion. The internal auditor heads this department. The internal auditor of the company visits the mill on weekly basis and conducts the audit according to the checklist framed by the internal audit department.Ahmad Fine Textile Mills Ltd. It is a review of operations and records under taken within a business by specially assigned staff. The department is responsible to keeps its eyes on the implementation of management policies. this department works on continual basis. This department is also responsible to inform the top management regarding the accuracy of all accounting information and their analysis MAIN FUNCTIONS OF THE INTERNAL AUDIT DEPARTMENT Following are the main functions of internal audit department: REVISION OF THE SYSTEM The internal audit department revises the system if there arises any discrepancy. This organization has also a separate department for performing the internal audit. The audit department develops audit program before conducting an audit. Internal audit is essential for large-scale companies. INTERNSHIP REPORT 22 . The suggestions given by auditors can be applied for the business benefit.

Ahmad Fine Textile Mills Ltd. Credit vouchers • Checking of trial balance statement after every three months. Payment vouchers. Assets Safeguarding This department also safeguards the company’s assets. • An internal auditor can check any document at any time or can ask the accountant to provide the necessary documents. if there arises any deviation that is reported to the management. INTERNSHIP REPORT 23 . CHECK ON THE SYSTEM The internal audit department checks whether the revised system is being followed or not. CHECK ON THE MANAGEMENT POLICIES This department also examines whether management policies are being followed or not PROPER MAINTENANCE OF BOOKS OF ACCOUNTS The internal audit department also examines that whether books are being properly maintained as required by the Companies Ordinance 1984. • Checking of bank reconciliation statements every month. MAIN FUNCTIONS OF INTERNAL AUDIT DEPARTMENT AT THE HEAD OFFICE MULTAN. Journal vouchers. • Checking of posting from clock cards to wages sheets • Price Checking • Recovery of advances • Checking of rebates and discounts • Continuous checking of assets of the company • Checking of Bank vouchers.

which is directed towards a task in which the opened cotton from plucker room is placed in open form before feeding in the Blow Room. The cotton in these bales is in the pressed form. Along with opening. For blending the bales contain the specifications as given below: • Lot Number • Station • Kind of Cotton/Quality of Cotton • Weight CONDITIONING Conditioning is a term. Following sections are there in their Production Department or Spinning Unit.Ahmad Fine Textile Mills Ltd. The function of this plant is the breaking and opening of the bales of cotton. It cannot be used for further processing until and unless it is opened and made in the loose form. In this way the cotton absorbs the air and automatically comes into INTERNSHIP REPORT 24 . the blending of different lots is done in this plant. This unit is equipped with highly modern and automated machinery. Further more it took a lot of time. a lot is consisted of 100 bales of cotton. so much cotton was wasted and instead of remaining clean it became dirtier. Firstly the cotton bales were opened manually but in that way. PRODUCTION DEPARTMENT Ahmed Fine Textile Limited Company has a Spinning Unit which is situated at District Rahim Yar Khan. PLUCKER ROOM Now a days most of the Spinning Mills are using the Auto Plucker Plants.

These perform the function of breaking cotton into the loose form then cotton is passed artificially the lighted path so that any impurity such as stones. The Bale Breaker machine contains the beaters in them these beaters move the cotton into different ways and open it the spikes installed on the edges help in splitting the cotton. which is helpful in the smooth functioning of Blow Rom machines. For the purpose of conditioning the cotton poles are allowed to lie for 12 to 16 hours. the cotton was put into scutchers manually therefore lot of cotton was wasted but now the help of distributors the cotton is not wasted. DISTRIBUTORS These are the pipes through which the cotton is sent to Scutchers where the raw cotton takes the shape of final product of Blow Room. the raw cotton is first time processed.Ahmad Fine Textile Mills Ltd. In Blow Room. Firstly. BLOW ROOM The main function of the Blow Room is cleaning and purifying the cotton. SCUTCHERS These are the machines where output of Blow Room Lap is shaped. Input of this room is the raw cotton while the output is the lap. INTERNSHIP REPORT 25 . the Bale Breaker machines are installed. clots can be removed. In Blow Room. loose form.

The production speed of the carding machines is 122m/m. Drafting in the process in which the length of the cotton fiber is increased through automatic machine process. Here the laps are opened. KRISCHNER BEATER These are the beaters installed in scutchers. CARDING SECTION The completed lap. which perform these functions. include the followings: • Feed Roller Taker in • Cylinder Doffer • Stripping Roller INTERNSHIP REPORT 26 . which is the output of the Blow Room.Ahmad Fine Textile Mills Ltd. The lap. They contain wooden laps and spikes which are installed on the edge of these . is placed and feeded to these machines. These ensure the uniform supply of cotton to scutchers. these machines perform different functions to covert this lap into Sliver. They perform the function of opening and cleaning. is the input of the Carding section. So. The rollers and cylinders in these machines. drafted and short fiber is extracted from the Card Sliver. the out product is the Card Sliver. cleaned. which is raped on the lap rod. Sliver is fiber of cotton in the shape of thick rope. HOPPER FEEDERS Hopper Feeders are used to regulate the flow of cotton to Scutchers.

and parallelization and straightening are done. the hooks of the fibers are removed. drafting. STRAIGHTENING Here the fibers are made the straight. PRE COMBER Here the pre combing machines are used the main objectives of which are the followings: • Parallelization • Removed of short fiber INTERNSHIP REPORT 27 . DRAFTING In drafting the length of the fiber is increased 50% that it can be converted into yarn/ PARALLELIZATION In parallelization process the fibers of the sliver rope are make in the parallel form to each other this is done along with drafting the sort fiber is extracted. FINISHER DRAWING Here the input is breaker drawing sliver. and all the zigzagging is eliminated to reduce the waste. DRAWING SECTION Here the functions including doubling. This section is divided into the two sections including the Passage 1 and Passage 2. the cross canning is done also in this section as was in previous section so as to bet evenness sliver.Ahmad Fine Textile Mills Ltd. Doubling refers to the doubling the length of cotton fiber.

In product here is breaker sliver while the out product is the comber yarn. INTERNSHIP REPORT 28 . and drafting in twisting the machine twists the thread so as to make it cohesive. • Doubling • Straightening • Drafting LAP FORMER Lap former is the machine. breaker sliver. In this way the string gets the strength and cannot break easily so ensuring the smooth functioning of the machines. The lap is rapped on the plastic bobbins. Yellow bobbins are used for the combed yarn while the Pink and green are used for the carded yarn. Here the in product is finishercombed sliver and out product is the Roving. 452 cones are used for making one lap. Weight of roving package is 1. The relative humidity needed is 55% to 60%. the functions involved are twisting. Its main purpose is lap formation by doubling.52 kg.Ahmad Fine Textile Mills Ltd. which are reserved for the formation of lap of drawn. COMBER Comber machines perform two basic functions: • Parallelization • Extraction of short fiber SIMPLEX SECTION Here roving machines are installed.

floor. • Thinness of Yarn • Thick places adjustment • Short thick places Here if the thread breaks it is automatically rejoined and the waste is removed ultimately. Here the input is roving package and the output is the Yarn. for two machines there are one overhead cleaner. overhead cleaners are also installed there. The waste material is extracted from the sucking pump in the plant these plants are installed on the AUTO CONE SECTION Here the yarn formed by the ring section is wrapped on cones. Following features of Yarn are adjusted. An important aspect about the cone formation is that different types of thread are wrapped on cones of different colors. There are overhead cleaners in this section they are moving overhead cleaner and ensure the cleaning in this section they by providing the air pressure. INTERNSHIP REPORT 29 . RING SECTION The main function of this section is drafting and twisting.Ahmad Fine Textile Mills Ltd. The machinery in this section is the most expensive of all. 32 ring frame has been installed in this unit. Main functions of the spindles are to wrap the thread bobbins and the speed difference between speed of the spindles and of the rings is the cause of the winding but both travels in the same direction.

PACKING ROOM It is also yarn condition room the relative humidity is 90% and is provided to the combed yarn in this way the cotton regains the 8.Ahmad Fine Textile Mills Ltd.5% moisture and it is the natural. TYPES OF PRODUCTION REPORTS Different types of reports are prepared when yarn is received from the spinning section an all records are maintained completely. The cones are then packed and different types of packaging is used for example for export purpose first it is packed into the polythene and then into the cartons and the cartons contain all details about the yarn including • Count • Brand • Gross Weight • Net Weight The final mark that is “Made in Pakistan” is placed. CHEESE WINDING SECTION Some companies demand doubling Yarn production so for that purpose thread from two cones are twisted combines into one and wrapped into one cone this is the fine output. These are as under: • Yarn Report • Waste Report • Daily Cotton Consumption Report INTERNSHIP REPORT 30 .

Ahmad Fine Textile Mills Ltd. • Efficiency Report (Spindles Worked) • Daily Production Report INTERNSHIP REPORT 31 .

Management of every company is specially committed to the good quality both in production and end results.Ahmad Fine Textile Mills Ltd. The Management of AFT has been successful in creating and maintaining the quality culture in the organization. QUALITY CONTROL MANAGEMENT Quality Control refers to setting certain standards for production and matching production with those standards. it is highly intensified. Sine 90 to 95 percent of production is exported. Following are the characteristics of the Yarn that are checked for the equality assurance: • Weight of Fiber • Length and Strength • Dia • Weight and Final Yarn • Evenness of Yarn • Relative Humidity • Temperature INTERNSHIP REPORT 32 . therefore. Daily quality report is sent to headquarter and it is checked here.

AFT produces the yarn of different counts. • AFT also sells & purchase the products from the local market to fulfill its orders. From 1 count to 20 count yarn& above. INTERNSHIP REPORT 33 . It exports to the Europe. AFT exports about 95% of its produce to the foreign markets. that they use their own yarn in the manufacturing of the grey fabric also has the different quality constructions. AFT has an advantage in the weaving. The products are produced according to the specification of the customers. Due to the spinning unit. PRODUCT AFT is dealing in the textile area. The construction of the grey fabric differ due to the differ in the quality of the yarn. The combed & the carded yarn. • These products are building the image the progress and developments of the organization. There are counts. according to the specification of the customers. Asia& the other neighboring countries. The combed is the yarn which is more refined on compared to the carded.Ahmad Fine Textile Mills Ltd. AFT is producing the best quality yarn there and the different types. the products which the AFT is manufacturing is the yarn and the grey fabric. MARKETING MIX Marketing mix is the set of marketing tool that the firm uses to get its marketing objective in the target market.

• • Fixed cost Variable cost The total cost is calculated. of AFT. also a margin is added. • Transportation charges INTERNSHIP REPORT 34 . PRICING METHOD The pricing method AFT is adopting is profit based. FIXED COST • Fixed cost in value. PRICE PRICING OBJECTIVES The obvious pricing objectives. • Building cost. the cost related to the machinery. • • • Maximization of profit To achieve the target return and targeted sales. There the per unit is obtained. • Electricity change. while all the expenditure related to the products production are added. VARIABLE COST • Part time workers. Maintain the market share. • Salaries & wages • Insurance expenses • Plant cost. The AFT policy about pricing is that the profit should be reasonable.Ahmad Fine Textile Mills Ltd. The total expenditure are divided by the production. And also they keep in mind the competitors because they are also providing the products at the competitive rates.

shipping line freight and other foreign agent commission is added. then the price would be high. Also the charges related to the transportation and bank handling expenditure are considered while calculating the price of the export items. As the high quality yarn is used in the construction of the grey cloth. • Miscellaneous. port clearance charges. INTERNSHIP REPORT 35 . Fixed Cost + Variable Cost +Desired Profit The profit margin depends upon the quality of the yarn and the grey fabric. In the export.Ahmad Fine Textile Mills Ltd. PRICE METHOD FOR LOCAL Pricing method for the local sale is different because all the cost involved in the export procedures is not included. all the expenditure related to the export such as the custom clearance charges. PRICE METHOD FOR THE EXPORT Pricing method for the export products is differ from the local pricing method. The price will be different to attract the customer and in local market. So the price would be lower in this.

The agents have been successful due to the credibility and honesty of their work. INDIRECT CHANNEL AFT to agent & to customer. • The agents also purchase the products. • Mostly the export business is through these agents. the buyers direct contact with the AFT. located in the Lahore and Karachi. As in the local market and the foreign. AFT TO CUSTOMER AFT is also dealing directly with the customers. sell them directly to other buyers. the agents are the back bone of textile industry. They receive the order on behalf of the buyer. timely delivery is important for the success and development of the organization. So in this trading they earn enough profit. give to the seller. there has been a large number of agents which are working for their organizations. • In Lahore & Karachi. They receive their commission form the buyer and the seller.Ahmad Fine Textile Mills Ltd. They clear the containers from the port. in foreign countries as well as in this country. So the export department fulfill their orders by the transformers. The comely delivery to the buyer is the greatest service to the customer. PLACE/DISTRIBUTION AFT exports about 95% of its produce. AFT has a direct contact with the shopping his and the port and customer clearance agents. INTERNSHIP REPORT 36 . • AFT mostly receive orders through agents. Therefore the distribution channel of the AFT is as follows. The transporter help in delivering the products. The transporter are helping a lot in progressing the textile industry. In the export of textile products.

• AFT provides the timely information to customers which helps in promoting. • AFT pays commission to them.Ahmad Fine Textile Mills Ltd. • AFT marketing manager also visits its customers. INTERNSHIP REPORT 37 . The yarn to the customers. • Their high quality of the products on the fine count the Grey cloth is also promoting the company and establishing image and goodwill. PROMOTION AFT promotes its products. • Mainly the products are exported through the different shopping lines. payment problems and the quality problems. • AFT provides the samples of the grey fabric. • Visits to the customers. • Mainly the responsibilities lies on the agents in case of delayed shipments. so they also promote the company products. but to a limited extent. • AFT provides the company brouchers to the buyers. • AFT has a direct contact with the local and the foreign agents.

INTERNSHIP REPORT 38 . 2) To maximize the company profit by increasing exports. The export manager supervises all the marketing & export activities. OBJECTIVES 1) To increase the Export of the Grey Fabric and yarn. • Customer correspondence as well • Export department also follow-up the local sale and purchase of the yarn and the Grey fabric. FUNCTIONS Following are the main functions of the export department. He is also making efforts for the development and the progress of the company. • Export department is responsible for the production planning and the production follow up with the mill. 7) To earn foreign exchange for the progress of the economy of the country. Export manager is also responsible for the exploration of local and foreign markets. 6) To build the image a credibility of the organization. 3) Exploration of the new markets. 4) Market research making the better information system 5) Adopting the new technological a developmental changes in the field of textile. AFT export department is headed by the export manager.Ahmad Fine Textile Mills Ltd. EXPORT DEPARTMENT Export department plays a vital role in any organization. • The important function of the export department is to make shipment schedule and the planning.

• Providing timely information about the production of the products to the customers which is also providing a service to its customers and promoting the company image. • Visiting to the existing and new customer. • Providing timely information to the clients is the main service provided by the AFT export department.Ahmad Fine Textile Mills Ltd. • Export system updation is also the responsibility of department. • B/L follow-up with the shipping lines. • Preparing the custom documents • Dealing with the agents and providing timely information to the parties. • Bank documents preparation and the follow-up. • Preparing the quality analysis report and sending them to higher authorities. • Improving the quality of the products with a collaboration with the buyer and the production department. • Maintaining the complete sale and purchase records • Export department is helping in improving the quality and betterment of the products and the company. INTERNSHIP REPORT 39 .

Certificate of origin INDENT Indent is the first export document which is send by the agents to export department. xi. xii. After the careful analysis of all the terms and conditions such as the quality description the selvedge. It involves a number of documents required by the importer from the exporter. vi. x. shipment date. It also contains the buyer name and the reference number of buyer or agent. ix. price per unit. iv. ii. v. AFT export department carefully handle all the steps involve in it.Ahmad Fine Textile Mills Ltd. vii. Indent Sales contract Letter of Credit Custom documents Packing list Bill of lading Bill of exchange Inspection certificate Form E Form M Shipping bill viii. i. iii. EXPORT DOCUMENTATION Export procedure is a very lengthy process. the packing and payments terms. Because a little bit of mistake can cause a great loss to the exporter and the importer. INTERNSHIP REPORT 40 . piece length.

As they have the products and in the sales contract they confirm the terms and conditions of the indent. Export department handle carefully the steps of that procedure. The importer name and address is also given. Also the contract copies are sent to the agent. the accounts and the audit department of the AFT for their record purpose. authorizing the exports to draw in accordance with the terms and stimulate legal forms that bill will be honored. L/C is a written instruction issued by buyer’s bank. If there is changing made by the buyer or agent. Issuing sales contract is the confirming the sale of the products to the buyer on the specified price. The Buyer name is there in the L/C 2. the price & the product specification. 3. LETTER OF CREDIT Letter of credit is very important documents in the whole export procedure. packing. the buyer. What documents he needs.Ahmad Fine Textile Mills Ltd. In which they can revised any thing. the shipment schedule. SALES CONTRACT The export department after the careful analysis of indent issues the sales contract. In the L/C all the term and the conditions are given by the buyer. payment terms. L/C number is mentioned on the top or the L/C INTERNSHIP REPORT 41 . In the L/c there are important things mentioned there. such as the quality. 4. so the later revised sales contract is issued by the export department. 1. commission. shipment date and the price of the product. The bank of the importer is also mentioned. Because without this the process could not be complete.

11. 9. The shipment date is also mentioned. 6. so the exporter only sent the goods on that specific shipping line.Ahmad Fine Textile Mills Ltd. 8. the amount of L/C. 13. either CNF or CFR. Issuing date of the L/c. 10. 90 days or sight from B/L date 12. The complete description of the products and the rate. the certificate of origin and other inspection certificate are also mentioned as required by the importer. The port is given there in L/C. The terms.The shipping line is given. TYPES OF L/C • Irrevocable or revocable • Documentary or clean • Un-confirmed or confirmed • Sight The exporter has to fulfill the terms mentioned in the L/C.Trans shipment or the partial shipment allowed or not is also there in the L/C 14.L/C terms are given. Both the importer the exporter are bound to fulfill their obligation mentioned his L/C INTERNSHIP REPORT 42 . 5. All the documents such as the invoices. the packing list. either it is 120 days. the quantity of the products.On the L/C the rate per unit and the shipment schedule is give on what date the products would be shipped in what quantity. the expiry date of the L/C. 7.

AFT mostly does its shipment through the shipping companies. That the following quality should be dispatched on the containers specified on this L/C. The goods are loaded on the specified containers and they are sent to the Karachi port on the specified shipping line. As the order placed by the importer is ready on the due date. NON NEGOTIABLE In the non-negotiable the title of the goods is non-transferable. the container number E form number. quality and the quantity is completely mentioned on this invoices. As the trailer number.Ahmad Fine Textile Mills Ltd. the export department issues the dispatch order to the mill. The agents handover the documents which involve packing list and invoices to the shipping lines. The shipping lines charge their freight and other charges are paid the agents as well as for clearance of the goods from the port. TRANSPORT DOCUMENTS The transport documents are very important because it provide the evidence that goods have been transported and it enables the importer to receive the goods from the custom authorities. In the exporting of good the number of the parties one involved. Mode By sea By Rail By Road By Air Document Bill of lading Receipt Road way bill Air way bill Carrier Shipping lines Railway service Transporters Air lines NEGOTIABLE DOCUMENTS In the negotiable documents the title of the good is transferred form one person to another when the existing holder produces the documents. INTERNSHIP REPORT 43 .

B/L is a comprehensive documents that is issued by the shipping line. CERTIFICATE OF ORIGIN Certificate of origin shows that the good which are being exported are originate from a country form which importer is allowed. who is exporting the goods to the buyer. AFT first of all draft the bill of lading and that is sent to the shipping line. The date of shipment is also mentioned on that. The name of the exporter. such as the track company. The shipping line and vessel name is given on B/L. 1) The firm or the company engaged in business of transporting products. Without this the importer can’t clear the goods from the destination. the quantity is mentioned. These are required INTERNSHIP REPORT 44 . place. AFT export department also very quick in follow up of the B/L because they have to transfer the information to the parties. Because without this the importer cannot receive their goods from the destination port. 2) The exporter. the total value of the goods which are exported. The date of the bill of lading is mentioned. Bill of lading also contains the specifications related to the importer and the exporter. the importer. BILL OF LADING Bill of lading is one of the most important documents in the whole export documents.Ahmad Fine Textile Mills Ltd. shipping company a airline. the bank. 3) The importer who is importing the goods from the seller. the quality with all the specifications required by that.

When explorer called for L/C. It is very important. what is nature. In order to satisfy and support a claim for the import duty. INTERNSHIP REPORT 45 . PACKING LIST Packing list is a document which involves all the complete list of the goods packed in the particular shipment. date. L/C number and by quoting shipping marks and numbers in order to identify the goods. letter of credit number.Ahmad Fine Textile Mills Ltd. 5) It provides a linkage with the other documents to reference to the invoice number. It provides a convenience to the shipping and the clearance authorities. Documents. 4) It shows the contents of each package. 3) Each package is marked by a number. by the authorities in the importing countries. 2) It shows the weight also. quality and quantity of the package. FEATURES OF PACKING LIST 1) It usually shows the marks a number mentioned on the packages. of is with the other documents by reference to the invoice number. This certificate of origin may also be made by the consultants of the importing country in the form of consoler invoice or legalize the exporter’s commercial invoice. date and vessel name.

INTERNSHIP REPORT 46 . 1) Description of the goods. it is in those consignments where the importer wants to assure himself. The documents should specifically identify to the goods by having a reference to the marks and numbers of the package and linkage to the other documents by reference to invoice number. 8) The place from where good are cleared. 5) The consignee bank. the quality of the goods exported. FORM-E Form E is a document issued by the exporter bank. description quantity and size. the vessel name and the shipping line. 6) The Invoice value of the goods in the exported.Ahmad Fine Textile Mills Ltd. about the shipment of the correct goods. 4) Destination of the goods. 2) The quantity of the goods. Through Form-E the SBP controls the overall exports of the country. CERTIFICATE OF INSPECTION Certificate of inspection is also a important document. Form-E contains the following important information’s. in terms of the quality. 3) The Terms of the L/C. 7) The port form where the good are shipped. The form-E declares that the export information given on the form-E are correct and will submit the duplicate and triplicate copy of this form to authorized bank. the letter of credit number. The importer bank name through countries the payment would be released. 9) Date of the form E is also on this form.

INTERNSHIP REPORT 47 . It is used to pay the commission to the agents. signed by person giving it. It contains the complete information about the export bank the importer name. addressed by a person to another. the weight of the goods. the exchange rate and rupee amount.Ahmad Fine Textile Mills Ltd. SHIPPING BILL The customer clearing agents issue the shipping bill. B/E is also a important document of export. amount in US$. (Net and gross weight). When the L/C is opened the B/E must be strictly drawn according to the terms and conditions of the creditor may be drown on the request of the applicant or on the bank request through which the credit is opened. the container number. BILL OF EXCHANGE It is unconditional order in writing. AFT receive this from the agents. the exporter name. number of packages. On this the amount of the commission is mentioned against invoices. FORM-M It is also an important. requiring the person to when it is addressed to pay on demand or at a fixed determinable future date. quality of the goods.

ECONOMIC  Growth rate of the country is also important for the progressive textile industry. rules & the regulation about the textile sectors they also influence on the small and the large textile industries.Ahmad Fine Textile Mills Ltd. It is reducing so the interest rate is also decreasing.  Duty drew back is also an other.  The fiscal balance also have impact.  The export surcharges also have the impact on the competitiveness of the organization.  Export policies and the quota policies play a vital role in developing the future of the textile Mill. such as the Grey Fabric the Yarn.  Govt. The high rate of inflation level leading towards the lower profit margin.  The discontinuity in the policies have the negative impact on AFT. which is important. PEST ANALYSIS POLITICAL  The government taxes and the procedures about the taxes collection also have impact on the textile sector.  Govt.  Custom rules regulation are major factors in importing the machinery and exporting the products.  Foreign investment is also boosting the economy. rules & regulations also have influence in the textile industry.  Inflation rate shows the level of prices. INTERNSHIP REPORT 48 .  Macro economy will also keep in improving the industry growth.

TECHNOLOGICAL  Technological developments in the machinery and parts have a great impact.  The rupee increasing so we are getting more foreign exchange.  Balance of payment is also improving it is a positive indicator for the development of textile sector. It is a great facility to the exporters. It has reduced the time cost as well. e-banking and information technology are improving the efficiency and productivity. SOCIAL  Social unrest and disorder is also influencing.Ahmad Fine Textile Mills Ltd.  The new technological developments such as e-commerce.  Work force attitude is positive which is improving the growth and development of AFT.  The culture and the social norms. It is improving the efficiency & the time is reducing. incentives to the export of textile products also play vital role. INTERNSHIP REPORT 49 .  Customers quick access to the information due to the fast communication channels.  Govt.  Computer aided designs are also improve the overall productivity and the efficiency.  Internet access is other.

Which is reducing the cost of production. AFT should do the more effort in promotion.  Our cotton fiber is Short .  Cotton is also available at cheaper rates.  AFT has good relations with local and foreign buyers.  AFT has well qualified staff.  The products are at compatible prices.  Lack of HR resources development.  AFT has a good financial resources. Which is improving the progress of the company.  AFT has its better market information system.Which is decreasing our productivity in fiber.  Cheap labour is available to AFT which is reducing the per unit cost.  Lack of promotional activities.Ahmad Fine Textile Mills Ltd.  There is more decentralization in AFT.  Less competitive in the fine count. So they can invest in other textile related products. INTERNSHIP REPORT 50 . WEAKNESS  Delivery time is more due to this the shipment are delayed.  It has its own spinning unit and the weaving unit also. SWOT ANALYSIS STRENGTHS  Good know how about the textile business.

A and the Europe markets.S.  AFT is not exporting value added products. So they can save the commission which is paid to the agents. INTERNSHIP REPORT 51 .  AFT has opportunity to explore new international and growth oriented markets for the exports of Fabric.Ahmad Fine Textile Mills Ltd. Which is decreasing efficiency.  The AFT can move in horizontal and the forward integration.  The company should go in dying process also.  The company should make efforts to improve the technical skills of the labour and employees which will improve the overall efficiency and productivity of the organization.  Non-professional attitude. OPPORTUNITIES  AFT has opportunity to export to the U.  Govt.  The decreasing interest rates on the loans.So we are less competitive in count Fiber.  There is more scope of exporting to these markets.  AFT can play the role of agent. is also providing lot of incentives to the exporters.  The company should import the latest technology to decrease the per unit cost of the production.  AFT can better the marketing techniques.  Per unit cost is not decreasing .

The AFT will face tough competition in domestic and Political instability is also a major threat. Govt. Thailand and Indonesia are the emerging giants WTO regime will be a great threat.    INTERNSHIP REPORT 52 . strict policies about the textile sector.   international markets. THREATS   Quotas are lifting AFT will face the major threat. competitors. The unreliable agriculture sector.Ahmad Fine Textile Mills Ltd.  in textile. AFT has a threat from the domestic and the international China.

NAUMAN ABBASI SUBMITTED BY: MUHAMMAD NASIR RIAZ MBA-I MB-00-30 INSTITUTE OF MANAGEMENT SCIENCES. INTERNSHIP REPORT ON AHMAD FINE TEXTILE MILLS LIMITED SUBMITTED TO: MR. BAHAUDDIN ZAKARIYA UNIVERSITY.Ahmad Fine Textile Mills Ltd. MULTAN INTERNSHIP REPORT 53 .

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