ahmad fine textile mills ltd
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Ahmed Fine Textile Mills Ltd.
PAKISTAN’S TEXTILE INDUSTRY
Everyone in the world knows Pakistan as an agricultural
country. Among all others, cotton is the major crop. This
cotton, after processing takes various forms including yarn,
fabric and other textile related products. The industry that
is engaged in this area is very diversified in nature. It may
not be wrong to say that textile quota regime has been a
blessing in disguise for the country. Keeping in view the
existing status of textile industry, it is feared that the
country may not be able to retain its share in global trade
of textiles and clothing in the free trade era, unless a very
comprehensive revamping program is undertaken on top
priority..
It may be true that the performance of local textile industry
in last five decades has been a little disappointing; the
industry still has the highest potential to play a vital role in
overcoming the key issues facing the country. To a large
extent, the Gap policies are responsible for the pathetic
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Ahmed Fine Textile Mills Ltd.
performance of textile industry, but the players are equally
responsible for the imbalance growth, production of coarse
counts and grey fabrics and low unit price realization. The
result is, despite being the fourth largest cotton producing
country, Pakistan's share in global textiles and clothing
trade is less than 3%.
In the spinning sector, at present there are about 9
million spindles and over 150,000 rotors installed.
However, the average capacity utilization has always been
around 75 per cent. The low capacity is mainly due to
intermittent closure of mills because of inadequate cash
flow rather than scarcity of cotton. The spinning capacity
has increased mainly due to area and industry specific
incentives. This proliferation has resulted in inefficiency
and uneven playing field. Most of the units, established
since early nineties are economically unviable and have
survived only due to the incentives. The bulk of the
percentage of yarn produced by these mills fall in the
coarse counts category.
Weaving at mills level has experienced constant decline.
At present less than 3 per cent of total fabrics are produced
at mills and remaining quantity is produced on power
looms. The fabric produced on powerlooms is much inferior
in quality compared to the cloth produced on shuttle less
and air jet looms. This handicap does not allow the made-
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Ahmed Fine Textile Mills Ltd.
up manufacturers to produce superior quality garments.
Therefore, despite enjoying the highest ceilings in certain
categories, export proceeds have remained low. In case of
Pakistan, the average unit price realization is below the
world average. Like weaving, knitting is also mostly
confined to smaller units operating in the unorganized
units. This has been due to high duty applicable on shuttle
less/air jet looms — although these looms are not
manufactured in the country.
PROBLEMS & PROSPECTS
Textile industry has always been the pillar of Pakistan
economy contributing substantially to Government Revenue.
It also has a dual linkage and significance. As a major
consumer of domestic cotton it provides a market for a
leading cash crop and it thus has a critical influence on
growth and productivity in the agriculture sector. In the
value added manufacturing sector, the industry has a
paramount position. Textile industry constitutes the
foremost sector of manufacturing in Pakistan as it
employees nearly 40% of the industrial forces and generates
the 64% of the total foreign exchange earning. And
contributes almost 20% to the total value added in a large
scale manufacturing it represent 14.2% of the total export
of the raw cotton Pakistan ranks fifth in the world in the
production of the cotton yarn and occupies 1st position in
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Ahmed Fine Textile Mills Ltd.
the export of the cotton yarn. While the industry occupies
6th position in the production of the cotton cloth and 5th
position in the export of cloth. The performance of the
textile industry therefore has a vital impact on the over all
growth and the development of the economy.
GROWTH OF THE TEXTILE INDUSTRY IN PAKISTAN:
Cotton textile industry has made a spectacular progress
over the past 51 years. At the time of independence o the
country only two textile mils were in existence, one Sutlej
Cotton Mills Ltd. in Okara, Punjab, the other Lyallpuor
Cotton Mills at Lyallpuor, now Faisalabad. Both the mills
were owned by the renowned industrialist of the undivided
India. These units were self contained having all the
departments, such aspiring weaving, dyeing, finishing as
well as procession & printing, although the printing, of
textiles was not as much developed as it is now. After the
independence the process of development of the industry
started picking up. In the year 1948, one more textile
mill which was set up by Valika"s was inaugurated by the
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Ahmed Fine Textile Mills Ltd.
Quaid-e-Azam. In 1949 the country had only 78000
installed spindles and 3000 looms. The organized
development of cotton textiles was started in late fifties with
the 1st five-year plan.
At present there are 503 mills installed in the country
with an installed capacity of 8.7 million spindles and 14000
looms. Out of 503 mills installed in the country, 418 units
are engaged in spinning and 32 units in waste spinning.
Both cotton yarn and cotton cloth may be considered
as the export oriented industries, since the export shares.
As far as the yarn is concerned, this represents an
important structural weakness of the textile industry as we
are unable to utilize domestically a larger share of our yarn
for production of higher value added textile products and
thus loose out to our competitors at the higher end of the
world textile market. Pakistan's share of world cotton
production has increased from 8.57% in 1986-87 to 9.2 % in
1996-1997.
Pakistan is the world's fifth leading cotton production
nation after China, USSR, USA and India. In terms of yield
per hectare. Pakistan has almost caught up with American
but ranks 15th in the world with it are per hectare
production of 6.2 Kgs. Domestic consumption of raw cotton
has been rising annually almost 75% of the production is
locally consumed and raw cotton exports have fluctuated
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widely. This year only 0.7 million tons of raw cotton are
planned to be exported.
COMPONENTS OF TEXTILE INDUSTRY:
Textile Industry adopts different procedure, which has
different phrases. When the cotton, is purchased from the
farmers. This process starts and when cloth is made and
ready to sale, It ends. Between these ends, there is a long
panorama and different features of this panorama are
described below:
PROCESS OF GINNING THE COTTON
It is the first steps, in which the seeds are separated
from the cotton. The separated cotton is classified
according to its quality and standers. Finally it is tied up in
to bales to bring them for next phase. The machines that
separate seeds can be used to prepare oil, feeds etc.
SPINNING PROCESS:
When the cotton bales reached the spinning mill, these
bales are opened and cotton is torn in to small pieces. This
cotton is finally prepared as thread cones of different
quality.
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The different departments play an important role in the
progress of conversion such as blow room, carding section,
simplex section, and ring section and auto cone section. A
detail report of these sections will be provided in the later
discussion.
WEAVING PROCESS
It is the process in which cloth is prepared from
thread. The machinery, which performs key functions in
specified process, is called loom. These looms are used to
prepare the cloth.
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COUNTRY RANKING ACCORDING TO THE
PRODUCTION OF COTTON
RANK 2000-2001 2001-2002 2002-2003 2003-2004 2004-20052005-2006 2006-2007
1 CHINA CHINA CHINA CHINA CHINAUSA USA
2 USA USA USA USA USACHINA CHINA
3 INDIA INDIA INDIA INDIA INDIAINDIA INDIA
4 PAKISTAN PAKISTAN PAKISTAN PAKISTAN PAKISTANPAKISTAN PAKISTAN
5UZIBEKISTA
N
UZIBEKISTA
N
UZIBEKISTA
N
UZIBEKISTA
N
UZIBEKISTA
N
UZIBEKISTA
N
UZIBEKISTA
N
Source: APTMA website
COUNTRY RANKING ACCORDING TO
THE PRODUCTION OF YARN
RANK 2000-2001 2001-2002 2002-2003 2003-2004 2004-20052005-2006 2006-2007
RANK
1 CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA
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Ahmed Fine Textile Mills Ltd.
2 USA INDIA INDIA INDIA INDIA INDIA INDIA INDIA
3 INDIA USA USA USA USA USA USA USA
4 PAKISTANPAKISTA
N
PAKISTA
N
PAKISTA
N
PAKISTA
N
PAKISTA
N
PAKISTA
N
PAKISTA
N
5 INDONESI
ABRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL
PRODUCTION OF YARN: PROVINCE WISE
In ‘000’Kgs
Period PUNJAB SIND NWFP Balouch-
istan
TOTAL G %
1988-89 419,803 305816 26777 15038 767434 12.03
1989-90 532,989 342522 27877 21994 925382 20.58
1990-91 626,978 376794 26405 25051 1055228 14.03
1991-92 734927 398344 28478 26521 1188270 12.61
1992-93 823961 354643 27418 28517 1234539 3.89
1993-94 1070422 347375 47363 33788 1498948 21.42
1994-95 1020640 315258 44969 32781 1413648 -5.69
1995-96 1100914 324152 47931 32247 1505244 6.48
1996-97 1095740 332547 65879 36689 1530855 1.70
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1997-98 1100061 336965 68021 37648 1542695 0.77
AHMED 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/-
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Ahmed Fine Textile Mills Ltd.
NATURE OF BUSINESS
The Principal Business of the Company is Manufacture and
Sale of Yarn and Cloth.
OFFICES
Head Office of the Company is located at Ist Floor,
International Plaza, Bohra Street, Multan Cantt.
Export office of the company is basically in Karachi but
some little work is also done here in head office.
Sub offices:
Located at 35-km, Multan- Bahawalpur road, near
Adda Basira, District Multan (weaving unit)
Located in Rahim yar khan (Spinning unit)
Located in Qadirpurrawn (weaving unit) under
construction.
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.
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Ahmed Fine Textile Mills Ltd.
2nd Floor, 6-Commercial Plaza Opposite Civil Hospital Abdali
Road, Multan.
MANUFACTURING UNITS
The Company has three manufacturing units, one is
spinning unit and two are Weaving units.
Spinning Unit:
Spinning unit of Ahmed fine textile mills is in Rahim yar
khan.
Installed capacity 17280
Spindles
Count range Ne 8/1- Ne
60/1, TC,
CVC Yarns, Mélange
yarns.
Brand name DOUBLE
DELIGHT
# Of Shifts per day 03
# Of Working days 365
Installed Capacity after conversion
Into 20/s count kgs 5632450
Actual production of yarn after
Conversion into 20/s count kgs 7626423
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MACHINE MAKE MODEL # OF
MACHINE
BLOW ROOM TRUETZSCHLER 2
Lines
Germany
4 Scutchers
CARD CROSOL MK-4
20
England MK-5
04
DRAWING TOYODA Japan DYH-500-C
09
TOYODA Japan DT-110
03
RIETER Switzerland RSB D 30
07
LAP FORMER TOYODA Japan SK-4 A
01
COMBER TOYODA Japan CM 10
06
SIMPLEX TOYODA Japan FL-16
06
RING FRAMES
14400 SPINDLES TOYODA Japan RY-5
30
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Ahmed Fine Textile Mills Ltd.
2880 SPINDLES TOYODA Japan EJM-128
06
AUTO CONERS MURATA Japan 7-II
06
7-V
02
AIR CONDITIONING S.T.L Pakistan
05
GENERATORS
GAS WAUKESHA USA VHP-7110G
03
LABORATORY
USTER TESTER USTER Switzerland UT4-SX 01
RAW COTTON CHINA Y-101
01
Weaving Unit:
Ahmed fine textile mills has two weaving units.
Weaving unit of Ahmed fine textile mills is in District
Multan.
Installed capacity 116 AIR JET LOOMS
Fabric range Twills, Satins/
Stripped Satins,
Percales Sheeting,
Poplin, Canvas,
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Stretch Twill/ Poplin,
Double Pick
Fabrics, Ottomans,
Bull Denim.
WARPING
MACHINE
Make Benninger
Swiss
Creel Size 1080
Head Stock 2400 mm
Speed ( m/min ) 600 to 1200
Year of Manufacture 2000
Yarn Type CT, PC, CVC,
etc.
SIZING MACHINE
Make Benninger-Zell
Creel Size 32
Head Stock 4000 mm
Computerized Sizing
Yarn Count 6 to 100
Yarn of Manufacture 2000
Size Boxes 2( with
prewetting system)
Cylinders 14
AIR JET LOOMS TOYODA
JAPAN
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Make JAT-610 JAT-610
JAT-710
Looms 72 24
12
Width 190 cm 340 cm
340 cm
Speed 800 500
550
No. of frames 07 07
10
Salvage leno or
truck-in
Fabric Construction light &
medium weight
AIR COMPRESSOR ZR 355 MAX PRESSURE 10
BAR
Air Dryer MD 1000
Make Atlas Copco
Belgium
AIR CONDITIONING
Make Luwa
Switzerland
No. of units 03
INSPECTION FRAMES
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No. of frames 80’’
134’’
12 04
ROLLING MACHINE
Machine
Max. roll size 400 kg. or 1
meter diameter
(Jumbo
rolls)
GENERATORS
Diesel CATERPILLAR
USA.
L-7052G
Another weaving unit of Ahmed fine textile mills is located
at Qadirpurrawan, District Multan. This weaving unit is
under construction & will be start at the end of this year.
FINANCIAL YEAR
Financial Year of Company starts on Ist October and lasts
till 30th September.
BANKERS
Muslim Commercial Bank Limited.
Habib Bank Limited.
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Ahmed Fine Textile Mills Ltd.
Askari Commercial Bank Limited.
Bank Al-Habib
Mezan Banks
United Bank Ltd.
Standard Chartered Bank
Bank Al-Falah
PRODUCTS
Major Products of the Ahmed fine textile mills are:
Spinning division
Cotton Carded/ Combed Yarn
Supima/ Giza Cotton Yarn
Plied Yarn Two for one Twisted
CVC, T/C Yarn
Core Spun Yarn with Lycra
100% Polyester Yarn
100% Rayon Yarn
100% Acryllic Yarn
Polyester Rayon Blended Yarn
Polyester Acryllic Blended Tarn
Melange Yarn
Model/ Tencel Yarn
Slub Yarn
Weaving division
Twills
Satin/ Stripped Satins
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Percals
Sheeting
Poplin
Canvas
Stretch Twill/ Poplin
Ottomans (Double Pick)
RAW MATERIALS
Raw materials of productions are:
Ginned Cotton
Polyester
Yarn.
WORK FORCE
Company includes a lot of skilled and unskilled workers.
Almost there are 800 skilled and unskilled employees.
PORTION OF EXPORTS
The company exports much of the production:
90 % export
10 % local
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Ahmed Fine Textile Mills Ltd.
MISSION STATEMENT
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MISSION STATEMENI
Ahmed Fine Textile Mills Ltd.
According to customer demands, produce superior
quality yarn in order to face the competition in the
international market. But at the same time taking
care of their employees, suppliers, shareholders and
society as well.
PURCHASE DEPARTMENT
The purchase department is divided into two categories,
cotton purchase department and store purchase
department.
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Ahmed Fine Textile Mills Ltd.
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.
PURCHASE PROCESS:
The following steps are involved in the purchase of raw
material i.e. cotton.
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PURCHASE DEPARTMENT
COTTON PURCHASE DEPARTMENT
Demand of purchase from mill
Purchase Requisition
STORE PURCHASE
Ahmed Fine Textile Mills Ltd.
VISIT OF COTTON SELECTORS
The cotton selectors of AFT visit the cotton ginning
factories. Cotton selectors may visit the factories on their
own behalf and some times the cotton factories call them.
Their visits are very important because purchase process
starts from here.
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Sample from different suppliers and
quotations
Sample TestingDecision-making
Agreement with the Party
Receiving
Writing delivery order for factory
InGate pass + D.O + Purchase Invoice +
Purchase Requisitions are supplied to accounts
department
Ahmed Fine Textile Mills Ltd.
SELECTING THE SAMPLE
Samples are selected from huge amounts of cotton. Samples
are taken from different suppliers. These samples are then
tested. The most suitable sample at lowest price is selected
for Purchase of cotton.
As there is centralized management system so the Director
himself takes the decision of selection and purchase of
cotton. In other words Director is final authority in making
decision.
STORE PURCHASE DEPARTMENT
Stores Incharge heads the store purchase department. 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, store and Packing material
spares, electric items, oil and lubricants, Stationery items,
Building Material, and General Store,
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DOCUMENTS
Demand Requisition.
Invoice of Purchase
Delivery Order
In Gate Pass
PROCEDURE
The following is the procedure for local purchase
department.
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. 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.
After inquiry Purchase Manager discusses with
Director for approval of rate and other necessary
requirement.
After the approval the Purchase Department purchases
the items from suppliers and sent them to the mill with
three copies of delivery orders
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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. Store
in charge also keeps a copy of delivery order and in
Gate Pass for his own record.
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.
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ADMINISTRATION DEPARTMENT
This is very important department of any organization. This
department has to administer all the operations of the
organization. The head of this department is Administration
manager. There are some sections of this department.
Labor office
Security Guard office
Gate office
Time office
The functions of each department are:
LABOR OFFICE
This office has been setup to deal with all the matters that
are related with labor. The head of the department is
responsible to resolve all the disputes, conflicts,
misunderstanding and any other kind of matter, which arise
from time to time with the labor and the immediate
supervisor or with any regulations of the labor department.
Usually this department is required by the Govt. of Pakistan.
Duties of labor officer are:
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Ahmed Fine Textile Mills Ltd.
Inform about the legal requirement concerning the
labor and company affairs.
To satisfy himself regarding payment of bonus,
gratuity, and other benefits to labor and to keep their
morale and motivational level high.
He should keep his knowledge up to date regarding the
rules and regulations of the labor department.
SECURITY GUARD OFFICE
The main objective of this department is safe handling of
the goods from/to the mill premises. There are some more
responsibilities of the security guard officer.
Any outsider can’t come in the mill premises without
the permission of security guard.
Whenever some one want to enter in the mill that
guard contact with authority to grant permission to
enter into the mill.
He can check each and every person before coming in
or going out of mill gate for security purpose.
Security guard officer is guardian of the every thing the Mill
premises.
GATE OFFICE
This office has been made to keep the record of each and
every thing coming into and going out of the mill gate.
For this purpose, gate office clerk maintains two types of
registers called:
Out ward going pass register
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Inward going pass register
When thing come in to the mill i.e. raw material, stores
supplies etc. a document named as I.G.P is made in which
information like date of supplies, description, quantity of the
material and any other remarks are written.
In the case of out going a document is used for this purpose
is known as O.G.P. O.G.P is prepared for out going thing.
TIME OFFICE
Some key activities of time office are:
This office keeps and maintains the time record of all
the workers on time card and pay register for the final
costing of the workers salaries.
It keeps the record of the attendance which is used to
calculate the salary of the employee paid to him/her on
monthly basis.
It keeps also the record of overtime, leaves. (# of days
worked of all the workers and then calculates their
overtime on the basis of the basic salary of each
worker.)
It keeps the record of Gratuity, Bonus.
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IMPORT DEPARTMENT
AFT has also an import department. The import department
is responsible to import those items, which are not available
in Pakistan. The structure of this department is as under:
PROCEDURE
Senior Manager is responsible for import of machinery,
equipment, spare parts, raw material, etc.
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Chief Executive
Director
Senior Manager Import
Assistant
Ahmed Fine Textile Mills Ltd.
An indent for import of item after the approval of Chief
Executive is sent to import department.
The Senior Manager Import selects a subcontractor from
approved suppliers list.
In reply, a quotation from the subcontractor is
received .A copy of quotation is sent to concerned
department for evaluation and checking of specification.
The received items are sending to the mills where these
are opened. The items are checked against quotations. In
case of any damage, the import department is informed
immediately. Import department do the necessary
arrangements for survey of goods from insurance
agencies
IMPORT DOCUMENTS
There are different documents are used when we are going
to purchase or import we required.
Performa invoice
Open bond manufacturing certificate (OBM)
Form I
Importer’s certificate
Bill of entry
Invoice
Air way bill
PERFORMANCE INVOICE
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This invoice is made by the indenture the goods and their
particulars, the organization is demanding. It tells the
importer about the price, payment term and conditions.
Performa invoice consist of:
Exporter’s name & address
Importer’s name & address
Description of items
Quantity
Unit price
Amount
Terms & conditions
Country of origin
Deliver date
Mode of payment
OPEN BOND MANUFACTURING CERTIFICATE (OBM)
Govt. gives some incentives to the importers. It is only for
the goods, which are not manufactured in the local market
and must be imported.
According to this incentive, when importer import the
goods, then the Govt. does not receive import duty on these
goods,
FORM I
Form I is an application for permission under the foreign
exchange regulations act 1947 to purchase foreign
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Ahmed Fine Textile Mills Ltd.
exchange for payment of imports. In this form, the importer
declares:
That mentioned payment is due and that he has not
already obtained exchange for payment for imports nor
he has made any other application for this purpose.
That amount of foreign exchange mentioned
represents the correct prevailing market price for the
goods on the date of contract in the exporting country.
That he is either connected with the exporter abroad
directly nor indirectly nor does he has financial or
other interest in the exporters.
IMPORTER’S CERTIFICATE
The importer’s certificate, a valid import license registered
with the State Bank of Pakistan covers the imports.
A part of this form I is completed by the authorized dealer
who certificate that the statements made by the applicants
in the form are to the best of its knowledge correct and it
has seen documentary evidence in support thereof.
The dealer also certifies that the remittance has been made
in accordance with method of payment as per existing
exchange control regulations.
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BILL OF ENTRY
This bill of entry is just like shipping bill. This is used for the
clarification purpose. With the help of this document, import
department got the goods cleared from the customs. It
carries all the information about:
The importer
Letter of credit (LC)
Freight
Goods(their price, units, weight, package)
Shipment detail
Sales tax, income tax, custom & excise duty.
INVOICE
When exporter negotiate the documents, he sends invoice to
import department that specifies
Goods imported
Air freight & forwarding charges
Port of destination
Payments (in importing currency)
Type of packing
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AIR WAY BILL
When goods are sent by ship, bill of lading is made. When
the goods are sent by air, air way bill is made:
Air port of destination
Flight/ date
Amount of insurance
Handling information
# of pieces of goods
gross weight & net weight
rate/charge
nature & quantity of goods
MARKETING MIX Marketing mix is the set of marketing tools that the firm uses to get
its marketing objective in the target market.
PRODUCT
AFT is dealing in the textile area, the products, which the
AFT is manufacturing, is the yarn and the grey fabric. AFT
is producing the best quality yarn there and the different
types. The construction of the grey fabric differ due to the
differ in the quality of the yarn. There are counts.
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Ahmed Fine Textile Mills Ltd.
AFT produces the yarn of different counts. From 1 count to
20 count yarn& above, according to the specification of the
customers.
AFT exports about 95% of its produce to the foreign
markets. It exports to the Europe, Asia& the other
neighboring countries. Due to the spinning unit, AFT has an
advantage in the weaving; that they use their own yarn in
the manufacturing of the grey fabric also has the different
quality constructions. The combed & the carded yarn. The
combed is the yarn, which is more refined on compared to
the carded.
The products are produced according to the specification of
the customers.
AFT also sells & purchases the products from the local
market to fulfill its orders.
These products are building the image the progress
and developments of the organization.
PRICE
PRICING OBJECTIVES
The obvious pricing objectives, of AFT.
Maximization of profit
To achieve the target return and targeted sales.
Maintain the market share.
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PRICING METHOD
The pricing method AFT is adopting is profit based. The AFT
policy about pricing is that the profit should be reasonable.
And also they keep in mind the competitors because they
are also providing the products at the competitive rates.
Fixed cost
Variable cost
The total cost is calculated. While all the expenditure
related to the products production are added. The total
expenditures are divided by the production. Their per unit is
obtained, also a margin is added.
FIXED COST
Fixed cost in value, the cost related to the machinery.
Building cost.
Electricity change.
Salaries & wages
Insurance expenses
Plant cost.
VARIABLE COST
Part time workers.
Transportation charges
Miscellaneous.
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Fixed Cost + Variable Cost +Desired Profit
The profit margin depends upon the quality of the yarn and
the grey fabric. As the high quality yarn is used in the
construction of the grey cloth, then the price would be high.
The price will be different to attract the customer and in
local market.
PRICE METHOD FOR THE EXPORT
Pricing method for the export products is differing from the
local pricing method. In the export, all the expenditure
related to the export such as the custom clearance charges,
port clearance charges,
Shipping line freight and other foreign agent commission is
added. Also the charges related to the transportation and
bank handling expenditure is considered while calculating
the price of the export items.
PRICE METHOD FOR LOCAL
Pricing method for the local sale is different because all the
cost involved in the export procedures is not included. So
the price would be lower in this.
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PLACE / DISTRIBUTION
AFT exports about 95% of its produce.
Therefore the distribution channel of the AFT is as follows.
AFT TO CUSTOMER
AFT is also dealing directly with the customers. As in the
local market and the foreign, the buyers direct contact with
the AFT. So the export department fulfills their orders by
the transformers. The transporter help in delivering the
products. The transporters are helping a lot in progressing
the textile industry. The comely delivery to the buyer is the
greatest service to the customer, timely delivery is
important for the success and development of the
organization.
AFT has a direct contact with the shopping his and the port
and customer clearance agents. They clear the containers
from the port.
INDIRECT CHANNEL
AFT to agent & to customer. In the export of textile
products, the agents are the backbone of textile industry.
They receive the order on behalf of the buyer, give to the
seller. They receive their commission from the buyer and
the seller.
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The agents also purchase the products; sell them
directly to other buyers. So in this trading they earn
enough profit.
In Lahore & Karachi, there have been a large number
of agents, which are working for their organizations, in
foreign countries as well as in this country.
Mostly the export business is through these agents.
The agents have been successful due to the credibility
and honesty of their work.
AFT mostly receive orders through agents, located in
the Lahore and Karachi.
AFT pays commission to them.
Mainly the responsibilities lie on the agents in case of
delayed shipments, payment problems and the quality
problems.
Mainly the products are exported through the different
shopping lines.
PROMOTION
AFT promotes its products, but to a limited extent.
AFT provides the company broachers to the buyers.
AFT provides the samples of the grey fabric. The yarn
to the customers.
AFT has a direct contact with the local and the foreign
agents, so they also promote the company products.
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Visits to the customers.
AFT marketing manager also visits its customers.
Their high quality of the products on the fine count the
Grey cloth is also promoting the company and
establishing image and goodwill.
AFT provides the timely information to customers
which help in promoting.
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ACCOUNTS DEPARTMENT
Accounting is the art or science of interpreting, measuring,
and communicating the results of economic activities
whether you are paying your phone bill, balancing your
checkbook, preparing your income tax return or managing
an international corporation, you are working with
accounting. Accounts Manager makes the important
financial decisions with consultation of Director and Chief
executive of company.
Record of all departments like import department, Export
department, Purchase and sale department, are maintained
here. So this department feels a burden of work. Accountant
is very much busy person who gives instructions to six
members of finance department and checks their work time-
to-time .His ten-year experience has made the work easier
for him. All types of tax rates, recent changes in tax policies,
different codes, companies’ names are on his fingertips.
The accounts department is responsible for the entire
accounting process of the organization regarding the
recording of transactions, designing the accounting policies
and accounting system, preparing financial statements and
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computer application. If we consider a company a cell then
we can say that accounts department has role of nucleus.
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.
FUNCTIONS OF THE DEPARTMENT
Very first and an important function of accounting
department is recording the business transactions on
vouchers. This is also called process of vouching. This is
made for internal record keeping. Auditors specifically audit
vouchers. Wrong vouching will lead to error in the system
and ultimately create problems.
From vouchers information is recorded in daybook and
cashbook. As each voucher along with its invoice, 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.
In order to see accounts in condense form ledger is used.
From daybook all the entries are posted in ledger. Ledger
represents DR or CR balance of each party. 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.
After this all the DR balances and CR balances of all the
parties are posted in trial balance. The trial balance must be
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equal at both sides. Otherwise there is any error in
recording the transactions.
Now trial balance becomes the source of profit and loss and
balance sheet.
This department also designs the accounting policies. All
the work in this department is being take place on accrual
basis.
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. The financial year
ends on september30 of each year. The financial statements
are presented to shareholders
THE SETUP OF DEPARTMENT
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Chief AccountantChief Accountant
AccountantAccountant
Asst AccountantAsst Accountant
CashierCashier
Computer Operator
Computer Operator
Record KeeperRecord Keeper
Ahmed Fine Textile Mills Ltd.
The accounting department is mainly divided in to following
three sections:
1. Stores section
2. Salaries and Wages Section
3. General Accounting
STORE SECTION
Store section is mainly concerned with store accounting.
This section deals with many accounts heads that are
concerned with stores. Such as stores &spare A/C, oil and
Lubricant, Packing material A/C, General Store A/C,
Building Material A/C and many others. The major
responsibilities of this department are
To record the store purchases
To record all store issues
To prepare various reports relating to store i.e.
material consumption report, party wise purchase
report
To keep a check on all stores by surprisingly checking their
record and physical existence of items stored. Because of
the above mentioned duties. This section has a key position
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in the company. No payment is made to any body unless it is
checked and verified by this section.
SALARIES AND WAGES SECTION
This section is responsible of making payments to the
employees. This section plays an important role in
safeguarding the interest of the company as well as
employees. This section also insures all the labor laws;
certain laws relating to company are as under:
Leave Procedure
There are three types of leaves.
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. Company’s rule doesn’t
allow any employee to do four-day leave without
application. In case any employee does so then he can’t
avail annual leaves.
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Attendance Allowance
Leave encashment is given to those employees who save
their holidays and don’t avail them. This is given according
to their per day salary multiply with number of days of
holidays not availed.
Salaries and Wages
Minimum salary is not less than Rs6000. The breakup of
salary is as under
Basic Salary ________
Badli allowance 50
Cost of living Allowance 18% of basic salary
House Rent Allowance 10%of basic salary
Utility Allowance 10% of basic salary
Special Allowance 300
Income Tax
Income tax is deducted from salary of all those employees
whose annual salary is greater than Rs.150000.An entry is
passed on voucher while deducting income tax and this is
paid to tax department
Advances and Loans
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Advances and loans are given to the Employees on their
application and are adjusted against their salaries every
month. 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
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ACCOUNTING SYSTEM
Accounting System at here is centralized and on accrual
basis. All accounts are maintained in Multan head office.
The process of accounting system starts from the
preparation of voucher. 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, so accounting
entries are passed on journal voucher at first step. This is
also known adjustment voucher. This is prepared for
adjusting entry. Vouchers are prepared after every
transaction. Accounts Manager and Director verify the
voucher respectively. If they have any question they can ask
relevant person if there is no enquiry then they will put
their signatures on voucher. Now it is time to record these
vouchers in books of accounts.
BANK VOUCHER (BV)
Bank voucher is used when any transaction is made with
bank . Amount may be drawn from bank and can be
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deposited in bank. You can receive DR advice or CR advice
from bank
DR ADVICE
When issued by bank, 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, it means some amount has
been added in your account. It normally takes place when
some foreign remittances have been received by bank in
your account. This is usually sent by your customer in
foreign country to which exports has been made.
PAYMENT VOUCHER
This voucher is prepared at the time of making payments to
any party. Party name is debited with the amount to which
payment has been made. Payment vouchers are used for the
payment up to Rs.5000. Payments more than this are made
through bank
CREDIT VOUCHER
As name of voucher represents, this voucher is prepared
when some amount is received from any party. In this case
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party name is credited by the amount that has been
received
IMPORTANT BOOKS
Cash Book
Bank Book
Bought Day Book
Sale Day Book
CASH BOOK
In this book cash payment and cash receipt vouchers are
recorded on daily basis. The vouchers are numbered serial
wise and cash-closing balance is calculated on daily basis.
BANK BOOK
This book is maintained for all the bank accounts of the
company. 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
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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. At the end of month balances are posted in
the main ledger for control purposes.
When the transaction is properly recorded in the books of
accounts then these balances are posted in the ledgers.
The following are the types of ledgers maintained in this
organization.
Main ledger
Profit &Loss Ledger
Customer Ledger
Supplier Ledger
Staff Ledger
MAIN LEDGER
It is a control ledger, which maintain all heads of accounts
from which balance sheet is prepared. All assets and
liabilities accounted, profit & loss, customer, supplier and
personal Ledger are maintained in it. Posting of sub ledger
is made in main ledger on closing of month. From basic
books like cashbook, bank book, bought daybook and sale
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daybook. 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.
PROFIT AND LOSS LEDGER
In profit and loss ledger all accounts of income and
expenses are maintained .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
Selling Expenses
Financial Charges
Miscellaneous Charges
MANUFACTURING EXPENSES
They are like purchase of cotton, wages and salaries, fuel
and power, insurance, repair and maintenance of plant,
packing material and depreciation.
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ADMINISTRATION EXPENSES
These are traveling expenses, salaries, communication
expenses like fax, phone and telex, rent, electricity,
entertainment, advertising, vehicleup charges, depreciation,
printing and stationary expenses
SELLING EXPENSES
These include export expenses, corporate freight, ocean
freight, trailer freight and local selling expenses
FINANCIAL CHARGES
They are like interest on long term loan, markup on short
term finances, exchange risk coverage fee, commission on
bank guarantees, letter of credit commission, excise duty on
long term and short term finances.
MISCELLANEOUS CHARGES
Miscellaneous charges include auditors fee, legal and
professional charges, donations, fines and penalties.
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, bankbook and
daybook. The balances of customers are worked out daily
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and the report of receivables is prepared daily and
submitted to the management.
SUPPLIER LEDGER
In supplier ledger the goods supplied by the parties is
recorded. Party’s account is credited and goods purchased
are debited.
PERSONAL LEDGER
To record all transactions relating to the personal accounts
of employees of the company, this ledger is used. Advances
and loans made to the employees, and the monthly
deductions from their accounts of loans are recorded.
INTERNAL AUDIT DEPARTMENT
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Internal audit is essential for companies. It is a review of
operations and record under taken within a business by
special assigned staff. The management can appoint staff to
go through the business activities. Auditor gives many
suggestions for the benefit of business.
For performing internal audit, company has a separate
department. Head of this department is auditor officer
(internal).
Functions of department:
Audit department develop audit programs before
conducting an audit. This department works on continuous
basis. 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. The
department is responsible to keep its eyes on the
implementation of management policies. This department is
also responsible to inform the top management regarding
the accuracy of all accounting information and their
analysis.
Except all these there are some main functions of this
department.
Some main functions of internal audit department.
The main functions, which this department performs, are:
System revision
Management of policies check
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Maintenance of books of accounts
System check.
System revision
Discrepancies always come in any organization. So this is
duty of internal audit department to revise the system if
there arises any type of discrepancy.
Management policies check
The top management makes policies. And it is duty of the
people to follow all the policies. Internal audit department
also examines that policies are followed or not.
Maintenance of books of accounts
This internal audit department also examines that whether
books are properly maintained as required by the
Accounting Standards and Organizational Policies.
System Check
The internal audit department checks whether the revised
system is being followed or not, if there is any type of
deviation that is reported to the top management.
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MAIN FUNCTIONS OF INTERNAL AUDIT DEPARTMENT AT THE HEAD OFFICE MULTAN
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, Journal vouchers,
Payment vouchers, Credit vouchers
Checking of trial balance statement after every
three months.
Checking of bank reconciliation statements every
month.
An internal auditor can check any document at any
time or can ask the accountant to provide the
necessary documents.
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EXPORT DEPARTMENT
Export department plays a vital role in any organization.
The export manager heads AFT export department. The
export manager supervises all the marketing & export
activities. Export manager is also responsible for the
exploration of local and foreign markets. He is also making
efforts for the development and the progress of the
company.
OBJECTIVES
To increase the Export of the Grey Fabric and yarn.
To maximize the company profit by increasing exports.
Exploration of the new markets.
Market research making the better information system
Adopting the new technological a developmental changes
in the field of textile.
To build the image a credibility of the organization.
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To earn foreign exchange for the progress of the
economy of the country.
FUNCTIONS
Following are the main functions of the export department.
Export department is responsible for the production
planning and the production follow up with the mill.
Customer correspondence as well
Export department also follow-up the local sale and
purchase of the yarn and the Grey fabric.
The important function of the export department is to
make shipment schedule and the planning.
Visiting to the existing and new customer.
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.
Improving the quality of the products with collaboration
with the buyer and the production department.
Bank documents preparation and the follow-up.
Preparing the custom documents
Dealing with the agents and providing timely information
to the parties.
B/L follow-up with the shipping lines.
Export system updating is also the responsibility of
department.
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Preparing the quality analysis report and sending them to
higher authorities.
Maintaining the complete sale and purchase records
Export department is helping in improving the quality
and betterment of the products and the company.
Providing timely information to the clients is the main
service provided by the AFT export department.
EXPORT DOCUMENTATION
Export procedure is a very lengthy process. It involves a
number of documents required by the importer from the
exporter. AFT export department carefully handle all the
steps involve in it. Because a little bit of mistake can cause
a great loss to the exporter and the importer.
Indent
Sales contract
Letter of Credit
Custom documents
Packing list
Bill of lading
Bill of exchange
Certificate of origin
Inspection certificate
Form E
Form M
Shipping bill
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INDENT
Indent is the first export document, which is, send by the
agents to export department. After the careful analysis of all
the terms and conditions such as the quality description the
selvedge, shipment date, piece length, price per unit, the
packing and payments terms. It also contains the buyer
name and the reference number of buyer or agent.
SALES CONTRACT
The export department after the careful analysis of indent
issues the sales contract. As they have the products and in
the sales contract they confirm the terms and conditions of
the indent, such as the quality, packing, payment terms,
commission, shipment date and the price of the product.
Issuing sales contract is the confirming the sale of the
products to the buyer on the specified price. If there is
changing made by the buyer or agent, so the later revised
sales contract is issued by the export department? In which
they can revised any thing, the shipment schedule, the price
& the product specification. Export department handle
carefully the steps of that procedure. Also the contract
copies are sent to the agent, the buyer, the accounts and
the audit department of the AFT for their record purpose.
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LETTER OF CREDIT
Letter of credit is very important documents in the whole
export procedure. Because without this the process could
not be complete.
L/C is a written instruction issued by buyer’s bank,
authorizing the exports to draw in accordance with the
terms and stimulate legal forms that bill will be honored.
In the L/C all the term and the conditions are given by the
buyer. What documents he needs. In the L/c there are
important things mentioned there.
The Buyer name is there in the L/C
The bank of the importer is also mentioned.
The importer name and address is also given.
L/C number is mentioned on the top or the L/C
Issuing date of the L/c, the expiry date of the L/C,
the amount of L/C, the quantity of the products.
The complete description of the products and the
rate.
The terms, either CNF or CFR,
The shipment date is also mentioned.
The port is given there in L/C.
The shipping line is given, so the exporter only sent
the goods on that specific shipping line.
L/C terms are given, either it is 120 days, 90 days
or sight from B/L date
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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.
Trans shipment or the partial shipment allowed or
not is also there in the L/C
All the documents such as the invoices, the packing list, the
certificate of origin and other inspection certificate are also
mentioned as required by the importer.
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. Both the importer the
exporter are bound to fulfill their obligation mentioned his L/C
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. As the order placed by the importer is
ready on the due date, the export department issues the
dispatch order to the mill. 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.
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AFT mostly does its shipment through the shipping
companies. The shipping lines charge their freight and
other charges are paid the agents as well as for clearance of
the goods from the port. The agents handover the
documents which involve packing list and invoices to the
shipping lines.
As the trailer number, the container number E form
number, quality and the quantity is completely mentioned
on this invoices.
Mode Document Carrier
By sea Bill of lading Shipping lines
By Rail Receipt Railway service
By Road Road way bill Transporters
By Air Air way bill 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.
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NON NEGOTIABLE
In the non-negotiable the title of the goods is non-
transferable. In the exporting of good the number of the
parties one involved.
1) The firm or the company engaged in business of
transporting products, such as the track company,
shipping company a airline.
2) The exporter, who is exporting the goods to the buyer.
3) The importer who is importing the goods from the seller.
BILL OF LADING
Bill of lading is one of the most important documents in the
whole export documents. Because without this the importer
cannot receive their goods from the destination port.
AFT first of all draft the bill of lading and that is sent to the
shipping line. Bill of lading also contains the specifications
related to the importer and the exporter. The name of the
exporter, place, the importer, the bank, the quantity is
mentioned, the quality with all the specifications required
by that, the total value of the goods which are exported.
The date of the bill of lading is mentioned. The shipping line
and vessel name is given on B/L.
B/L is a comprehensive document that is issued by the
shipping line. The date of shipment is also mentioned on
that. Without this the importer can’t clear the goods from
the destination.
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AFT export department also very quick in follow up of the
B/L because they have to transfer the information to the
parties.
CERTIFICATE OF ORIGIN
Certificate of origin shows that the good which are being
exported are originate from a country form which importer
is allowed. These are required by the authorities in the
importing countries. In order to satisfy and support a claim
for the import duty.
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. When
explorer called for L/C, of is with the other documents by
reference to the invoice number, L/C number and by
quoting shipping marks and numbers in order to identify the
goods.
PACKING LIST
Packing list is a document, which involves all the complete
list of the goods packed in the particular shipment. It is very
important. Documents. It provides a convenience to the
shipping and the clearance authorities.
FEATURES OF PACKING LIST
1) It usually shows the marks a number mentioned on the
packages.
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2) It shows the weight also.
3) Each package is marked by a number.
4) It shows the contents of each package, what is nature,
quality and quantity of the package.
5) It provides a linkage with the other documents to
reference to the invoice number, date, letter of credit
number, date and vessel name.
FORM-E
Form E is a document issued by the exporter bank. Through
Form-E the SBP controls the overall exports of the country.
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.
Form-E contains the following important information’s.
1) Description of the goods, the quality of the goods
exported.
2) The quantity of the goods.
3) The Terms of the L/C.
4) Destination of the goods.
5) The consignee bank. The importer bank name through
countries the payment would be released.
6) The Invoice value of the goods in the exported.
7) The port form where the good are shipped.
8) The place from where good are cleared.
9) Date of the form E is also on this form.
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CERTIFICATE OF INSPECTION
Certificate of inspection is also a important document, it is
in those consignments where the importer wants to assure
himself, about the shipment of the correct goods, in terms
of the quality, description quantity and size. 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, the letter of credit number, the vessel name and
the shipping line.
BILL OF EXCHANGE
It is unconditional order in writing, addressed by a person
to another, signed by person giving it, requiring the person
to when it is addressed to pay on demand or at a fixed
determinable future date. 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. B/E is also a important document of
export.
SHIPPING BILL
The customer clearing agents issue the shipping bill. It
contains the complete information about the export bank
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the importer name, the exporter name, the weight of the
goods, (Net and gross weight),
number of packages, amount in US$, quality of the goods,
the container number, the exchange rate and rupee amount.
FORM-M
It is also an important. It is used to pay the commission to
the agents. AFT receives this from the agents. On this the
amount of the commission is mentioned against invoices.
PRODUCTION DEPARTMENT
Ahmed fine textile limited has a spinning unit, which is
situated at District Rahim yar khan. This unit is equipped
with highly modern and automated machinery. Ahmed fine
textile limited has also two units of weaving. One is situated
at Multan-Bahawalpur road, district Multlan and second is
under construction at Qadirpurrawn, District Multan.
The properties of cotton fibers (a natural fiber) vary for all
different growth areas for different climate conditions and
form year to year. When cotton crop is collected from fields,
team of professionals survey the best cotton growth areas
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( called station ). So, after selecting the best station, the
next step is considering the ginning factories where cotton
lint and seeds are separated. Seeds are used as the raw
material for oil industry and cotton lint in the spinning of
yarn. Raw cotton is tested at various parameters e.g. its
staple length, micronaire, floating fibers %, trash %, color,
yellowness and moisture content etc.
Considering above parameters cotton is purchased for the
whole year consumption. Ginners send the cotton in lots
(each contain 100 bales) to spinning mills in the form of
pressed bales having weight 165 – 170 Kgs each bale.
Yarn is produced of two types combed yarn (the excellent
quality) and carded yarn (good quality). To produce each
type spinning process is somewhat different as show below:
Spinning Process:
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First of all spinning process for combed yarn is:
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For combed yarn
Blow Room
Carding
Pre comber drawing
Unilap
Combers
Drawings
Simplex
Ring
Autocone
Conditioning
For carded yarn
Blow room
Carding
Drawing
Simplex
Ring
Autocone
Conditioning
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Actually spinning process starts from hare:
Blow Room
Following three jobs are done here.
1. Mixing
2. Opening
3. Cleaning
Cotton from various cotton areas ( stations) is so blended
together that these stations should be preferably within one
hundred range. They make a blend of 7-8 stations. Each
station representing 20-25 bales. Thus 120 bales are issued
to the blow room. Micronaire value is maintained.
About 80-100 people are deputed here for bales opening
and contamination sorting. Contamination may be coloured
yarn pieces, small cloth pieces, jute, feathers, hair pieces
and polypropylenes pieces etc. Thus blending and mixing
takes place once again as the small tufts are mixed
together. This minimizes the variation from bale to bale and
from station to station and even blend is obtained. Now
cotton remain here for twenty four hours to reduce moisture
contents 7-8 %.
Aftermath cotton is subjected to various machines having
spikes and beaters, which open the cotton to further small
tuffs. While opening with the aid of certain mechanism leaf,
sand and motes etc are extracted from cotton with the
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passage of time, as cotton is transferred from one to other
machine, cotton becomes cleaner and finer. Dropping
(waste) is separated through here through a pipeline.
Carding
Cotton from blow room machines is transferred via air to
the next department called carding. This is a machine which
has big cylinders with very sharp wires. These cylinders are
so placed in the machines that at various points of the
machines, cotton experiences and extensive opening and
cleaning. Here small entanglements of cotton are also
extracted along with finer trash particulars e.g. small leaf
and seed particulars. Fibers having length less than 0.5 inch
are extracted.
The dust extracted here is of two types:
Card Fly
Lickerine
Up to here 12 % waste has been extracted. The products of
carding machines is called SLIVER. It is an assembly of
fibers almost parallel to each other and condensed in the
form of a rope. About 5000 yard of sliver are laid in ‘Cans’
(large hollow vessels of 24” dia and 48” length)
Pre-Comber Drawing
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The cans obtained from the carding department are set
behind machines called Pre-combing draw frames. Six cans
are placed and sliver form each can is passed through
rollers. These rollers have speed difference such that six
slivers are stretched six times and a single end is obtained.
In this way slivers are blended and mixed together to
minimize variation. The obtained silver is again laid down in
cans.
Unilap
Slivers received from pre-comber draw frames are once
again stretched here. Twenty six slivers cans are sent on a
machines called unilap. Thus slivers from twenty six cans
are mixed and blended together to minimize variation.
It results in the shape of Lap. It is a sheet wound on al
plastic tube (spool).
Combers
Laps are fed to the next process called combing. Here 15-18
% short fibers are extracted which are called comber noil (a
by product used for surgical dressing ). The result of this
process is also a Sliver of very fine, Clean and lustrous
bearing the fibers of maximum length.
Drawing
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The sliver obtained from combers are again fed to another
draw frame passage called post combing process.
Sometimes this sliver is passed once through draw frames
and sometimes twice. In the framer case it is called single
passage and the later is called double passage.
Simplex
Here the objectives are
Drafting
Twisting
Winding (Roving)
The drawn cans are subjected to a next process called
simplex. One hundred and twenty cans are placed at the
back of each simplex machine. Each can against
experiences a stretch of six to seven times and assumes a
shape of finer than sliver. This fine rope is twisted and
wound on to a plastic bobbin. This rope is called roving.
Up to here process is called back process.
Ring
It is in fact yarn production department as yarn count is
controlled here. Each roving bobbin contains about 2000 to
3000 yards of roving. This roving is once again subjected to
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a stretching process. As the roving is unwounded from the
roving bobbin, it is passed through three pairs of rollers,
Their speed are so adjusted that the speed of no.3 in about
22 times more than that no.1. In this way if one yard of
roving is subjected to three rollers; it will be lengthened to
twenty two yards(particularly to produce NE 20/1 yarn
count).Thus at the time of having third pair of roller, the
roving has been converted into yarn from of very fragile
one.
A 20/1 combed yarn is given about 16 to 16.20 turns per
inch (especially to produce yarn for knitting) these turns are
given by the dint of a traveler whose life is about seven days
only. This small metallic part not only imparts twist to the
yarn but also winds it on the ring bobbin. The ring is
mounted on the spindle which revolves about 16000 to
17000 per minutes. RPM (revolution per minute) as
controlled through a meter on the machine and is set as per
requirement. Each ring bobbin contains 55 to 60 grams of
yarn.
Auto Cone
Three jobs are done here
Faults removal:
This yarn has some faults e.g. some thin and thick places in
yarn. Such faults are cut and joined again automatically.
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During winding process waxing is done only with the
hosiery yarn to reduce its friction with the needles of the
knitting machine.
Winding yarn on paper cone
Here now we have been equipped with a latest technology
called PERLA and SIRO, which controls hairiness and
contamination respectively.
Conditioning
After a paper decided length is wound on a paper cone, a
certain weight e. g. 4.166 lbs is obtained. After the
weighment of every cone it is inspected through Ultra Violet
device. Then they are stacked in packing department for
conditioning. In this way strength of yarn is improved. Also
the loss due to extraction of waste in blow room, carding
and comber is compensated in the form of moisture. The
cones are left here for about twenty-four hours and then
packed in corrugated cartons. Marks are printed on cartons
as per customer’s requirements and now they are ready for
dispatch.
Count
Lea
(1.5 meter) X (80 round) = 120 yard
Hank
(120yards) X (7) = 840
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On the scale put on one side on pound and on the other side
put the hanks. Then count the hanks that will be our count.
Suppose that there are 30 hank equal to one pound our cont
will be NE 30/1.
The final mark that is “Made in Pakistan” is placed.
TYPES OF PRODUCTION REPORTS
Different types of reports are prepared when yarn is
received from the spinning section an all records are
maintained completely. These are as under:
Yarn Report
Waste Report
Daily Cotton Consumption Report
Efficiency Report (Spindles Worked)
Daily Production Report
Weaving process
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The production process starts when the negotiation
between the buyer and seller completed. The order is then
faxed to the mill and the production at the mill starts.
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During the production process first of all the reed per dent
is calculated.
a. REED
Reed means of order. It’s a design frame in which the
required weave is adjusted to produce a design.
Example.
In case of 3/1 weave there are four ends/dent in a
reed.
On the basis of this calculation the required weave is
produced.
YARN REQUIREMENTS
After the adjustment of the reed
the yarn requirements is calculated. The requirements of
yarn are based on per day production of that quality and
also depend on the weight of the yarn.
One bag of yarn contains =100 lbs
One truck contains =130 bags (Avg.)
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Common types of yarn: 7/1, 8/1, 10/1, 12/1, 16/1, and
20/1& 24/1
Unless the mill got an advice from the head of they does not
manufacture of the fabric.
Calculation for yarn requirement of Warp count:
End per inch x cloth width x 1.0936
840 x warp count
Same formula will be for calculating the yarn requirement
of weft also.
WARPING.
Warping is the process of withdrawal of yarn
from Cones and transfers it to big beams. In this process
the yarn from little is transferred to required numbers of
beams. The required number of ends/inch is calculated and
feeded in the machine from which it is converted into
required number of beams.
SIZING.
There are two main objectives of sizing of yarn.
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1- is to strengthen the fibers. In this process the warped
beams are passed through a chemical process so that
yarn could bear the intensity of the weaving process
and they do not break .
2- is to achieve the required number of ends on one
single beam.
KNOTTING
In this process if the quality of one beam
remains the same and the quality of one beam ends then the
other beam of the same quality is joint with the threads of
first beam, this is known as knotting process. However this
process is not applicable if of the weave is changed.
DRAWING IN
In this process if the quality applied on one beam is to be
changed then the process employed for the changing of one
quality in to another is known as drawing in. it is also
known as changing of article.
COMPRESSOR.
In mills there are big compressors of air,
which extract fresh air. These compressors store this fresh
air and after going some process, passed this air to the air
jet looms.
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WEAVING
When the yarn has gone through all the above
processes, now it is ready to pass through the weaving
process. In this process the yarn is converted in to fabric.
All the above mentioned process are subsidiary of the
weaving process,
INSPECTION
When the required fabric is produced it is
ready for grading, mending and inspection. First of all the
produced fabric is passed through grading and mending
machines in which if there is any fault in the produced
fabric it is removed on the spot. After going through the
grading and mending process the fabric is re-inspected
again so that there is no chance of error.
PACKING
There are three main ways in which the fabric is
packed.
1: - rolls
2: - bales
3: - pallets
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The only difference between above three packing
is the total length in which the fabric is packed, if the
quality is same it will be packed in rolls and bales and if the
quality is in thousands it will be packed in pallets.
When the required fabric has been packed it is loaded in 20
or 40-ft containers, and from there they went to Karachi for
shipment.
PRODUCTION CALCULATION OR LOOM EFFICIENCY
PRODUCTION
The revolution per minute of Sulzer machine varies from
280-305
In Diamond fabric the Sulzer machines can produce width
up-till 153 inch; however practically above machine can
produced width-up till 140 inch.
This 153-inch can be divided into 3 widths maximum and
one width minimum.
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The PRM for 3 width machine = 280
The PRM for 2 width machine = 305
The PRM for 1 width machine = 305
The efficiency of machine varies from 85 to 95 percent. It
can never be 100%.
There is always a margin for rejection also which is
assumed as 5%.
PRODUCTION CALCULATION.
[PRMx 60(R.P.H) x 24 (# of hours in a day) x # of width]
x
Efficiency
No. Of picks per inch x 36
If we want the above calculation in meters we will divide
the above answer by 1.0936
In case of Air jet looms the revolutions per minutes varies
from 400 to 775.
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BATCHERS
They are used when we want to warp more of piece length
into yards/meters i.e. 2000 OR above. Whereas in normal
looms the piece of length varies from 200 to 300 meters.
LABORATORY
In laboratory the following tests of fabric are done.
1- Tensile: to check the strength and density of fabric.
2- Tearing: it also checks the tearing capacity of fabric
3- Count determination: in this process the type of count
is determined.
4- Magnifier glass: this glass checks the type and quality
of fabric closely.
QUALITY CONTROL MANAGEMENT
Quality Control refers to setting certain standards for
production and matching production with those standards.
Management of every company is specially committed to
the good quality both in production and end results. The
Management of AFT has been successful in creating and
maintaining the quality culture in the organization. Daily
quality report is sent to headquarter and it is checked
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here. Sine 90 to 95 percent of production is exported;
therefore, it is highly intensified. 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
SWOT ANALYSIS
STRENGTHS
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Cheap labor is available to AFT which is reducing the
per unit cost.
The products are at compatible prices.
Cotton is also available at cheaper rates.
It has its own spinning unit and the weaving unit also.
Which is reducing the cost of production?
AFT has well qualified staff.
AFT has a good financial resources. So they can invest
in other textile related products.
AFT has its better market information system.
AFT has food relations with local foreign buyers.
Good know how about the textile business. Which is
improving the progress of the company?
WEAKNESSES
Lack of HR resources development.
Lack of promotional activities. AFT should do the
more effort in promotion.
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Delivery time is more due to this the shipment are
delayed
There is more decentralization in AFT.
Less competitive in the fine count.
Our cotton fiber is Short .Which is decreasing our
productivity in fiber.
Per unit cost is not decreasing .So we are less
competitive in count Fiber.
AFT is not exporting value added products.
Non-professional attitude. Which is decreasing
efficiency.
OPPORTUNITIES
AFT has opportunity to export to the U.S.A and
the Europe markets.
There is more scope of exporting to these
markets.
AFT has opportunity to explore new
international and growth oriented markets for
the exports of Fabric.
AFT can play the role of agent. So they can
save the commission, which is paid to the
agents.
AFT can better the marketing techniques.
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The company should import the latest
technology to decrease the per unit cost of the
production.
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
Govt. is also providing lot of incentives to the
exporters.
The AFT can move in horizontal and the
forward integration.
The decreasing interest rates on the loans.
THREATS
WTO regime will be a great threat.
Political instability is also a major threat
Govt. strict policies about the textile sector.
The unreliable agriculture sector.
Quotas are lifting AFT will face the major threat.
AFT has a threat from the domestic and the
international competitors.
China, Thailand and Indonesia are the emerging giants
in textile.
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The AFT will face tough competition in domestic and
international markets.
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