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INTERNSHIP REPORT ON
NAJMA SUGAR MILLS (Pvt.) LIMITED
Submitted To: MR. JAVEED IQBAL INTERNSHIP COORDINATOR Submitted By:HASEEB AKHLAQUE KHAN Roll No. MT-01-28 MBA (IT) FINAL (Session 2001-
2003)
INSTITUTE OF MANAGEMENT SCIENCES BAHAUDINE ZAKARIA
UNIVERSITY KARACHI.
IN THE NAME OF ALLAH WHO IS MOST BENEFICENT AND MERCIFUL
DEDICATIONS TO:
This Holy Prophet (SAW) who taught us Seek Knowledge from cradle to the
Grave.
My parents whose encouragement, guidance and presence are assets of my life
My teachers who illumined the dark corners of my mind and heart.
TABLE OF CONTENTS
Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Description
Preface Acknowledgment Structure of Management Growth ofSugar Industry in
Pakistan Group Profile Board of Directors Mission of NSML Objectives IntroductionWorking Force Products of the Company Production Departments at Site Departments at
Head Office Banking Section Data Administration Organizational Incentives Quality
Management Problems ofSugar Industry Comments & Suggestions 2 3 4 5 6 7 8 9 11 1213 16 33 47 51 55 57 59 60 Page No. 1
PREFACE
This report describes the effort made by me for the learning by first hand practical
experience about a business organization. Today is the era of experience as is said byquotation Experience makes a man perfect. No body can deny the importance of
practical training and experience. Through internship students get the first touch of
professional exposure of the roles; they have to play during their professional careers.
The students not only acclimatize themselves to the corporate environment but also learnto assume responsibility, co-operation and teamwork the hallmarks of modern
management. Having experience ofsugar industry is really a good experience for me. Iam submitting all my experiences. No doubt, omissions and errors are expected but it isrequested to ignore the nominal errors. I was lucky enough to have a chance of doing
internship in HEAD OFFICE OF NAJMA Sugar Mills Limited KARACHI. I learnt a lot
about the practical business and above all, the mental discipline and awareness, which arethe most useful tools for an executive to raise the organizational structure.
HASEEB AKHLAQUE KHAN
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ACKNOWLEDGEMENT
First of all, I want to express all and thanks to ALMIGHTY ALLAH whose blessings are
above each and every thing which make me able to present my tiny effort. All prays toHAZRAT MUHAMMAD (PBUH) who is the reason for creation of the universe and
whose kindness came to my part. Secondly on the successful completion of my internship
program, I whish to express my gratitude and heart worthy acknowledgement to myoperation and helped me in completing this report. professors for full coI feel utmost
pride in
acknowledging with sincere gratitude for the valuable guidance I have received from Mr.
Hassan buchas and Mr.zubair. They have been a constant source of enthusiasticencouragement through out the internship program. Due to their guidance I have become
able to complete internship as well as this report. Their advice, criticism and remarks
were of the most value to me.
I am also thankful to following persons:
Mr. Jahanzaib Sikandar Mr. Raisuddine Shaikh Mr. Ghulam Hassan shigri Mr.Mohammad Fiaz Mr. Akhlaque Ahmed Khan Mr. Mohammad Azhar Mr. Basharat
Biabani Chief Executive Officer Managing Director General Manager (f) Manager ( I . T)Manager (H.R.D.&P)
Chief Accountant Accountant (purchase& inventory)
Furthermore all the other executives and staff members of NAJMA Sugar Mills Limited,
Head Office and Site deserve my thankfulness for their co-operation and guidance during
the course my internship at NAJMA Sugar Mills Limited. Finally I would likeacknowledging the contributions by many other sources of information used in
preparation of this report.
HASEEB AKHLAQUE KHAN
GROWTH OF SUGAR INDUSTRY IN PAKISTAN
Sugar is the important sector of the Pakistans economy. Sugar industry plays a vital
role for development of any countrys economy. In Pakistan this industry play a
significant role for economic development. Its share in the large scale industry is 18%and in GDP is 1.9%.sugar industry contribution to the government exchequer in Federal
excise duty is 11.2%.
HISTORYThe sugar industry, which is endowed with a strong base of sugarcane, had started itsjourney from almost non-existence in 1947. The industry has gone through a long way
and now possesses 77 sugar mills in all over the country. The Sugar industry not only
fulfills the entire local requirement but also sharing out the total foreign exchangeearning. At present Pakistans sugar industry is facing lot of problems like lesser demand
ofsugar in the country due to recession in the economy, declining prices into the
domestic as well as international markets & huge unsold stock ofsugar. Government role
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in R & D for developing the sugarcane varieties is not very significance; only few private
institutions are doing some research in R & D in developing various varieties with higher
yield.
Pakistan sugar industries still have 34% un-utilized capacity. Which can be utilized by
further developing the 13224 hectares area along the main feeder canal from Indus riverin Sindh. By which we can increase our export to 50000 ton. ( this export to Arab World
can be exchange of half million barrels of crude oil for Pakistan. In Pakistan present
sugar cane varieties are not yielding reasonable production and led to the prevailing
sugar crisis. As described by the table. Countries
USA Mauritius India Brazil Pakistan CubaSource: down EBR July 12-18,2002
1989-92 77.44 70.33 66.06 62.02 41.55 59.98
1993-97 76.80 72.83 64.14 61074 43.38 57.04
1998-2002 75.19 71.39 70.30 67.42 43.54 34.83
GROUP PROFILE
The company has been sponsored by SIKANDER GROUP OF INDUSTRIES in ISLAMABAD. The sponsors comprise of a family of good repute and their friends. They have
vast experience of running project as well as manpower administration, monitoring of
projects and finance and accounts.
Sr. #Company Name & Location
1 NAJMA SUGAR MILLS LIMITED
Site:
JUDHO, Distt. MIRPUR KHAS, SINDH, PAKISTAN.
HEAD OFFICE:
CLIFFTON KARACHI
TASAQ INTERNATIONAL (PVT) LTD.
HEAD OFFICE:
ISLAM ABAD
MANAGEMENT PROFILEChairman KHAN Chief Executive MR. JAHANZAIB SIKANDER (RET) GEN.
SIKANDER HAYAT
Managing Director Director finance Director (HRD&P) General Manager (f)
General Manager (plant)
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Mr. RAISUDDINE SHAIKH Mr. Bashir Ahmed Mr. Noor Ahmed Zaib Mr. Ghulam
Hassan shigri Mr. Mohabbat Ali Khan
Auditors:
Mr. Nouman Mehmood, FCA Avais Hyder Zaman Rizwani
Legal Advisors:
Mr. Muneeb Akhter Advocate A.K.Brohi & co.
Banks
Muslim Commercial Bank Limited National Bank of Pakistan Habib Bank of
Pakistan
MISSION OF NAJMA SUGAR MILLS LIMITED
To produce superior quality White Refined sugar To face competition . in the Local
& Total Quality Management. International Market.
OBJECTIVES
Following are the objectives of company. 1. Total quality focus to meet customers
requirements. 2. The highest standard of business ethics. 3. To care on the business
ethics. 4. To carry on the business at best possible level. 5. To guarantee performance ofcontracts by members or persons having dealing with the company.
BRIEF INTRODUCTION
INCORPORATION
NAJMA Sugar Mills Limited was incorporated on May 26, 1991 as a public limited
company. The authorized capital of the share of the company was Rs.350, 000,000/-. Thecertificate of commencement of business was obtained in Feb., 9,1992. The previous
sponsor of the company (the family of chief minister of Sindh, JAM SADIQ ALI (late)could not manage to setup the project and finally on intervention of the BEL shares. The
management of the project was transferred to the new sponsors in 1998. The name of the
company was changed to NAJMA SUGR MILLS Ltd. On November 15,2000.
NATURE OF BUSINESS
Crushing of Sugarcane & Raw Sugar in to White Refined Sugar.
FIRST CRUSHING SEASON (TRIAL)
NAJMA Sugar Mills Limited starts its first crushing season (trial) in 2002-2003.
LOCATION
NAJMA Sugar Mills Limited is located at Judho, MirPur Khas Sindh.
HEAD OFFICE
Head Office of NAJMA Sugar Mills Limited is located at Sikander Munzil Park
lane 5 Cliffton Karachi.
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FINANCIAL YEAR
The financial year of the company is from 1st October to 30th September.
RAW MATERIAL
The main raw material for the mill is sugarcane, which is abundantly available in
Pakistan. The second raw material is Baggas. Some of which is obtained by the owncrushing the other will be purchased by the Beggas Venders/Suppliers.
MAIN COMPETITORS
Mutyari sugar mills Sangher. Thatta Sugar Mills Limited, thatta. Therparker Sugar
Mills Limited, Therparker.
WORKING FORCE
Detail of total working force at site and at head office is as under:
AT SITE
Permanent Employees Temporary Employees Seasonal Employees Daily Wages
Employees Total 157 30 400 (app.) 10 597
AT HEAD OFFICE
Permanent employees Temporary Employees Total 25 5 30
PRODUCTS OF THE COMPANY
SUGARINDUSTRY IS AN AGRO-BASED INDUSTRY, WHICH PROVIDES
EMPLOYMENT TO THE LANDLESS RURAL POPULATION AND HASE AGREATE IMPECT ON THE ECONOMY OF A COUNTRY.
The main product of the company is White Refined Sugar. The three principle bye-
products of a sugar industry are 1. Bagasses 2. Molasses 3. PRESS CAKES (WHICH R
ABOUT 40% OF THE WEIGHT OF TOTAL CANE CRUSHED.) 4. MUD
WHITE REFINED SUGAR
Major business of the company is to produce white refined cane sugar of intermissionstandard and from the erased cane and three different components are achieved that are
fibber, Pith and Moisture.
MOLASSES:
THIS IS A BY-PRODUCT AND IT IS SOLD TO MOLASSES CONTRACTORS. ONE
OF THE ALLIED CONCERN, RELIANCE COMMODITIES (PVT.) LIMITED IS THE
MAIN BUYER OF THE MOLASSES OF NAJMA SUGARMILLS LIMITED AND
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ALSO THE MAIN BUYER OF MOLASSES FROM WHOLE THE
COUNTRY.RELIANCE COMMODITIES (PVT) LIMITED IS THE MAIN
EXPORTER OF MOLASSES IN PAKISTAN. Molasses may be used for the productionof power alcohol acid portable
spirits.
BAGGAS:
This is also a by-product of the company. Begass is used as source of energy fuel for
sugar industry for juice heating. and also used for making medium density fiber board
(MDFB). baggasse is sold to the baggasse contractors.
MUD:
Mud is also the by-product of the company. It is sold to the Mud Contractors. This isused in making chocolates and other products.
PRESS CAKE:Press cake of sulphitation factories are used as manure and that of carbonation factories
are usually burnt.
Plant performance during the season 2002-2003 (trial season)
Season start Season Ending Date & Time Date & Time 05-01-2003 At 6:25 P.M 05-01-
2003 At 6:25 P.M 80 52095.53 1302388.25 1518.5 30370 1039.282 4.989 4358.750
8.391
Duration of season (days) Cane Crushed (M.Tons) Cane Crushed (MND) SugarProduction (M.Tons) Sugar Production (Bags) raw Sugar Production (M.Tons) Sugar
cane recovery (%) Molasses Production (M.Ton) Molasses Recovery (%)
MAIN DEPARTMENTS
Following are the main departments at Site and at Head Office.
AT SITE
1. MECHANICAL 2. ELECTRICAL 3. CHEMICAL 4. CANE 5. ACCOUNTS 6.
COMPUTER 7. ADMINISTRATION
AT HEAD OFFICE
1. FINANCE 2. ACCOUNTS 3. ADMINISTRATION 4. PURCHASE 5. SALE
MECHANICAL DEPARTMENT
Mechanicaldepartment is the main department of any sugar mill. This department
plays very effective role for crushing of sugarcane.
FUNCTIONS:
The main function of this department is to control the whole plant & machinery. The
main goal of this department is that the whole process is going through effectively and
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efficiently without any hurdle. Mechanicaldepartment has qualified engineers who are
very professional about their work. All the work is done under supervision of Chief
Mechanical Engineer.
ELECTRICAL DEPARTMENT
Electrical department is also very important department of any sugar mill. Thisdepartment plays very effective role for keeping the plant in running conditions.
FUNCTIONS
The main function of this department is to assist the mechanicaldepartment, with the
help of this department; mechanicaldepartment has a better control on whole plant &
machinery. The main goal of this department is to supply electricity to whole plant &
machinery. Electrical department has also qualified engineers who are very professionalabout their work. All the work is done under supervision of Chief Electrical Engineer.
CHEMICAL DEPARTMENT
Chemical department is another main department of any sugar mill. This departmentplays very important role for crushing of sugarcane.
FUNCTIONS
The main function of this department is to test the quality ofsugar, with the help of this
department sugarcane is crushed in to white refined sugar. The main goal of this
department is to maintain a quality standard. This department plays his role during
whole the process because different types of chemicals are mixed in sugarcane juice for
making the juice in to liquid shape. This department checks the quality during the whole
crushing process. Chemical department is working under very experienced person whohas vast knowledge about chemical. All the chemists are very experienced and
professional.
CANE DEPARTMENT
Cane department is the majordepartment of any sugar mill. This department is
purchasing sugarcane from growers.
FUNCTIONS
Cane department is working under General Manager Cane, who is a very experiencedperson and has a much more knowledge about sugarcane quality. The main function of
this department is the purchasing of sugarcane. The main goal of this department is to
supply high quality sugarcane. Main input of NAJMA Sugar Mills Limited is the raw
fresh sugarcane. To control the different activities of purchase of sugarcane, canedepartment play very important role. This department has purchased sugarcane from
different villages of the country. Cane field officers are surveying regularly and motivate
growers. This department opens depots in different villages for purchasing of sugarcane.In Sindh a number of small growers exit and yield different varieties of sugarcane that
profitable to the growers. Cane department also play very important role for granting a
loan to the growers in the shape of seed, fertilizer and machinery, which has to bereturned in the shape of supply of sugarcane to the respective mill.
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Before start of crushing season, Cane department of NAJMA Sugar Mills Limited
arranges a survey of the growers of surrounding area of the mill for the availability of
sugarcane. They collect data about varieties, quality and quantity that would be availableduring the season.
CANE ACCOUNTINGAfter receiving sugarcane from the grower, process of payment starts. Cane accounts
generate the payment that is sent to the banks for disbursement. Cane accounts generatethe following output from cane accounting package.
Grower Ledger Cane Payment Contractor Register Loan Register Daily Cane
Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All theprinted data sent to Head Office on biweekly basis. Payment to grower is made through
bank after getting approval from Head Office, in case of emergency sometimes paymentis to be made at Head Office, but during routine, payment to growers is done at site
through bank.
ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business transactions
into books of accounts. With the help of this department, we should know the actual
position of the company about profit or loss. Accounts department is working underChief Accountant, who is a very experienced person.
FUNCTIONSThe main function of this department is recording & classifying all transactions into
books of accounts, keeping whole record of the company about payments, receipts,profits & losses. The main goal of this department is to work effectively & efficiently
within the accounting standards all the time. Main Accounts Department also supervises
the Cane and Store Accounts. Normally Accounts Department performs followingactivities:
Maintaining Records Keeping Accounts Record of All Departments Payment of Wages& Salary Store Accounts Cane Accounts Dealing With Banks Tax related matters Stock
Position
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Stock Taking
CANE ACCOUNTING
Main Accounts Department also supervises the Cane Accounts. This department deals
with following matters:
Keeping Sugarcane Purchase Record Keeping Record for Growers Arranging payment
for growers Recovery of Advances from Growers
STORE
Main Accounts Department also supervises the Inventory / Store Department.Inventory means stocks of things and items, which are used with in the company for
producing goods, and finished goods offering for sales. Inventory can be divided into
following four groups: 1. Raw Material 2. Work in Process Inventory 3. Finished GoodsInventory 4. Spare Parts Inventory
For effective control over the companys inventory, it is necessary that overall work
should be done under Accounts department. It is very important for store that it has to
maintain sufficient stock of all the related parts / goods to make the factory continue itsproduction and functions of other departments without any hurdle. This departmentreceives the demand from various departments and then arranges the required goods /
items. When demand of items / goods received, then following process starts. 1. PurchaseRequisition received at store, through relative departments head, which contains items
name & quantity. 2. Store Incharge checks the required material/items and issue to
relative department according to demand, if required material/items currently not
available in store, then Purchase Incharge makes the purchase indent for requiredmaterial/items. 3. Purchase indent sent to the Purchase Department at Head Office after
getting approval from General Manager at Site. 4. purchase Department examine the
quotation if it is less then 50,000 , the purchase manager can purchase within this amount
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but if it exceed from 50,000 to 150,000 it will be approved by the Manager (HRD&P).
and more than this will be approved by the MD. 5. Purchase Department collects
quotations from different listed sellers.
6. Purchase Manager compare all quotations and send summery of favorable rates to
Chief Executive for approval. 7. After getting approval from the Chief Executive,Purchase Department issue Purchase Order for required material / items, which contains
Mode of Payment, Mode of Delivery, Item Name, Quantity etc. 8. Delivery of requireditems at Site through suppliers own vehicle or through rented vehicle on companys
expenses according to the contract. 9. Gate Inward sent to store, which contains complete
report about Quantity of Material/Goods, Bilty No., Vehicle No., Supplier name. 10.StoreIncharge checks the material/items, if any item is not according to demand then this item
sends back to supplier, if material/items are according to demand then store incharge
issue Inspection Report. 11.After issuance of Store Inspection Report then Store Inchargeissue Goods Receiving Report which clearly shows the complete detail about
material/items. 12.When any item or material has to go out from store for any purpose
then gate pass is used, which contains quantity of item/material, purpose for going andname of the person taking it. All the above-mentioned documents have three copies. Firstcopy hold down at Store, Second copy is hand over to the seller and third copy sent to
accounts department.
Stores issue material/items to various departments according to their demands and thenposted all transactions into accounts. At the end of each month store consumption is sent
to head office. Normally accounts department sends all record to head office on weekly
basis, but they are maintaining some record at mills, which is necessary for routine work
and for reconciliation purpose.
COMPUTER DEPARTMENTNow a days computer plays very effective role in all fields of life. At present all sugarmills in Pakistan are using various softwares. Computerdepartment of NAJMA Sugar
Mills Limited is working under Manager Information Technology, who is a very efficientperson and have a vast experience about different softwares and hardware. There are two
departments in which computer is being used in NAJMA Sugar Mills Limited (site),
which are as follows:
1. Cane Department 2. Accounts Department 3. Inventory and Store Department.
Main input of the NAJMA Sugar Mills Limited is the raw sugarcane. To control the
different activities of purchase of sugarcane, computer is very much helpful. Growth of
sugar industry has brought about certain changes that demand application of moderncomputer application in operations of growing sugar mills.
CANE DEPARTMENT
CANE APPLICATION In cane application, computer is playing its role in a very
superlative manner. It is good sign for the company keeping the record of each growerand give recommendations on the basis of given parameters. CANE LOADING &
PROCUREMENT Before starts of the crushing season, cane department of NAJMA
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Sugar Mills Limited arranges a survey of the growers of surrounding area of the mill for
the availability of sugarcane. They collect the data about varieties and quantity that would
be available during the season. This data is posted in to the computer to accommodateeach and every grower during the season for the supply of sugarcane to the mill.
Following reports are generated from cane application software.
Survey Agreed Cane Schedule Summery Village wise Procurement Summery Circle wise
Procurement Summery Point of Purchase Summery Indent Printing
Work Order Printing
CANE YARD MANAGEMENT Sugarcane comes to the mills in different ways, which
are as follows: 1. Grower brings the sugarcane on his own vehicle 2. Grower brings thesugarcane on rented vehicle 3. Sugarcane comes through the purchasing centers on rented
vehicles. When sugarcane reaches the factory gate then cane yard management starts.
Cane yard management produces the following information:
Weighting of sugarcane Recording the Weight Recording the Vehicle Number Recordingthe Date Printing of CPRs Daily Crushing Summery Contractor wise summery
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When sugarcane enters in the mill, first of all its weight is checked at weighbridge, then
this weight is posted into computer and gives a CPR to the grower.
CANE ACCOUNTING
The most important and the typical part of accounting is the cane accounting. Which is
supervised by the chief accountant cane. After receiving sugarcane from the growersprocess of payment starts. Cane Accounting Package generates the payment that is sent to
the banks for disbursement. Following are the main reports generated from Cane
Accounting Software.
Grower Ledger Cane Payment Contractor Register Loan Register Daily Cane
Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All the
printed data sent to Head Office on biweekly basis. Payment to grower is made through
bank after getting approval from Head Office, in case of emergency sometimes paymentis to be made at Head Office, but during routine, payment made to growers at site through
bank.
ACCOUNTS DEPARTMENT
Accounts dept. at NAJMA SUGARMILLS Ltd. Is working under the supervision of
Chief Accountant, who is a well-known and experienced person. He has full command on
his job either it is manually or it is computerized. He has a vast experience in this field.Accounting software is also used in Accounts Department. All the transactions are
posted into computer. The accounts System has capability of making different sorts of
reports/vouchers. It also helps in Auditing of the balance. This is working under thesupervision of MIT. The accounts system is Fund Account Journal Vouchers capableof making following reports. M.RsTaxation Reports All types of Financial Reports.Utilization Reports. Fund Allocation Reports
ADMIN DEPARTMENT
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Admin department is the department, which is dealing matters about administration.
This department plays very important role for maintaining discipline in the mills. Admin
department is working under Admin Officer, who has much more experience aboutadministration matters.
FUNCTIONSThe main function of this department is to handle all the administrative matters and
maintaining discipline. The main goal of this department is to provide easy workingenvironment. This is very important department of the organization as the name shows;
this department has to administrate all the operations of the organization. Sections of
this department are divided into Gate Office Time Office Security Guard Office
Labor offices as under: Office
GATE OFFICE
This office has been made to keep the record of each and every thing coming into and
going out of the mills gate. For this purpose gate office clerk maintains two types of
registers called; 1. Outward going pass register
2. Inward going pass register. When every thing including raw material, stores supplies,
or any other thing comes into the mills premises a document named as I.G.P is made in
which information like date of supplier, description, quantity of the material and anyother remarks are written. In the same way, O.G.P is prepared for out going things etc.
TIME OFFICE
This office keeps and maintains the time record of all the workers on time cards andpay register for the final costing of the It keeps the attendance records, which is than
used to workers salaries. It keeps the calculate the salary to be paid to the workers
on monthly basis. records of the over time, leaves, number of days worked of all theworkers and than calculate their over time on the basis of the basic salary of each worker.
It keeps the records of Social Security, EOBI, Education Cases etc. of each employee /worker payable to government treasury. It keeps the records of Gratuity, Bonus, Pensionsand other benefits including CPL (Cash Paid Leave) to each employee / worker of the
organization.
SECURITY GUARD OFFICE
The main objectives of the security office is to safe handling of the goods from / to
the mill premises. For the achievement of such objective a team of security guards has
been employed by the company. All the keys relating to the mills office, labor colony,(quarters) are lying into the responsibility of the No out side visitor can come into the
mills premises without security officer. Whenever any visitor wants to enter thepermission of the security guards. into the mill, security guards firstly contact with the
authority in the mill to Security guards can grant the permission to enter into the millpremises. check each and every person before coming in or going out of the companygate for the security purposes.
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They see and check the outward going pass of the certain things when these ought to
bring out of the mill premises.
They are in uniforms of dark green color.
They are the guardians of the every thing of the company. The organization also has
purchased a human scanning security system, through which the record of each employeeand visitor is maintained. This system has reduced the fair of any type of theft.
HUMAN RESOURCE DEPARTMENT.
As required by the labor laws of the Government of Pakistan, this office has been setup to
deal with all the matters that are related with labor and other human resources. TheManager (HRD&P) is the head of the H.R.DEPT.
He is responsible to resolve all the disputes, conflicts, misunderstandings and anyother hind of matter, which may arise from time to time between the labor and theimmediate supervisor, or with any other person in the It is the duty of the Manager
(HRD organization. &P) to inform the legal It is also the duty of requirementsconcerning the labor and company affairs. the Manager (HRD&P) to satisfy himself
regarding payment of bonus, gratuity, and other benefits to labor and to keep their morale
and motivational level It is also a requirement to be a successful Manager (HRD high.&P) that he should keep his knowledge up to date regarding the rules and regulations of
the labordepartment . Manager (HRD&P) is responsible for the implementation ofthe strategies and Manager (HRD rules made by the higher authorities. &P) also helpsthe higher authorities in strategic decisionmaking.
FINANCE DEPARTMENT
Finance department is the department, which provides funds to the company. This
department plays very important for fulfilling the need of fund. Finance department is
working under General Manager Finance, who is a Fellow Member of Institute of
Chartered Accountants of Pakistan and has vast experience about financial matters.
FUNCTIONS
The main function of this department is to get Cash Finance and Running Finance,
according working capital requirements, from different Financial Institutions against
pledge ofsugar stocks. This department also performs Managing Cash Fund Raising.
Financial Planning. following activities: & Analyze the Capital ExpenditureDecisions. Credit Activities. Short TermEvaluation. Financial Information. &Long Term Financing. Finance department analyzes the financial information and thenpresents them into proper form, so that financial position of the company can be properly
viewed. Finance Department evaluating and determining about required additional
finance. All the functions are based upon Balance Sheet, Income Statement and otherFinancial Statements.
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ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business transactions
into books of accounts. With the help of this department, we should know the actualposition of the company about profit or loss. Accounts department is working under
Manager Accounts, who is a Chartered Accountant of Pakistan.
FUNCTIONS
The main function of this department is recording & classifying all transactions intobooks of accounts, keeping whole record of site and head office. The main goal of this
department is to work effectively & efficiently within the accounting standards all the
time. Main duties of Accounts Departmentare as follows: Payment ofKeepingAccounts Record of All Departments Maintaining Records Wages & Cashmanagement Control of Funds Dealing With Banks Salary Cash Flow TaxMatters Receipt of Cash Payment of Bills and Charges
Analysis of Preparation of Final Accounts Arrangement of Heavy Funds ProvidesReports for Assistance in analysis to top managementReports decisions. We can saythat this department acts as a nervous system. Every matter is first brought in the
knowledge of the head of this department, then he take appropriate action according tothe situation. The members of this department are every experienced.
INCOME TAX MATTERS
As required by the tax authorities of the Govt. of Pakistan, whenever the company makes
purchases from the supplier, gets services on contract or on commission basis, theamount paid to the party is tax deducted. When the company will make the payment to
the party (supplier, contractor or commission agent) it will deducted the tax from the
amount to be paid to them. Tax deducted are payable to the Income Tax authorities.When the company makes the payment of this tax, a Tax Challan is filled and prepared
by the section and after payment it is filed into the tax Challan file after debiting the tax
payable. The sellers, contractors and agents from this section then receive these challans
for their official uses.
SALES TAX MATTERS
Sales Tax is deducted from sellers at the time of sale. The company also pays the sales
tax to the suppliers, but this sales tax has claimed as refund and it is to be adjusted from
total amount of Sales Tax payable, then remaining payable amount is to pay to the Sales
Tax Department.
PURCHASE DEPARTMENT
Purchase department is the department, which conducts all the purchase for head office
and site. This department plays very important role for maintaining discipline in themills. Purchase department is working under Manager Purchase, who is B.Com + C.A-
Articles.
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FUNCTIONS
The main function of this department is to purchase Spare parts, Store Material,
Chemicals, P.P Bags etc. The main goal of this department is to purchase required itemsat convenient rates. This department conducts all the purchases. There is also a Purchase
Assistant in this department to keep the records. Whenever any particulardepartmentrequires any part of material/goods, its head makes a demand of items to be required.
This demands contains the information like, items description, quality, quantity andothers. The departmental head signs the demand and sent to the purchase department,
then purchase department sent it to Chief Executive for final approval. The Manager
Purchase has the list of preferable suppliers of the certain items. When any item isrequired, first he get rates from market though purchasers, then he compare market rates,
and making a purchase order of the supplier which provide the material/items at
convenient rate after obtaining verbal or written approval from the Chief Executive.Purchased material sent to the mills premises through rented vehicle or the supplier is
sending material/items according to the contract. In Purchase Department work is done
according to the following process: 1. Purchase Requisition received from store of site orhead office, which contains items code, items description and balance in the store. 2.Purchase Department sends this requisition to Chief Executive for approval.
3. Purchase Department collects quotations from different sellers after approval from
Chief Executive. 4. Quotations are compared and summery sent to Chief Executive. 5.Purchase Order is prepared for required material / items after getting approval from the
Chief Executive. 6. Delivery of required items to Site Store / Head Office Store.
The Data Flow Diagram of the purchase system is on the next page.
User at site
Request for item at site Store Search for item Yes No
Daily
if Special
Purchase sec. At site
Purchase sec. At H/O
Req< 50000 R eq.
If
Req >50000
Request for requisitions Provide Requisitions
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Manager H.R.D.&P . . At H/O Compare the requisitions
Supplier s
Not accepted IF
1 1
Order for items
Accepted
Supply the items Original GRR
Stores at site
Duplicate GRR
Duplicate GRR Purchase sec (S) Purchase sec (H/O)
Requested item is issued
User
This is the purchase system for Najma Sugar Mills.
The main things are PR purchase requisition
GRR..Goods Receiving Receipts After this the bills are sent
to the accounts branch of both site & H/O Who is responsible for the payment of the billsAll the bills received by the Accounts sec. is matched by the GRRs. And then paid to the
supplier. The store is responsible for the checking of received items for any cracking. If
any piece is found damaged at the time of receiving it is not received and Also notentered in the GRR.
SALE DEPARTMENT
Sales department is the department, which deals the sale ofsugar and other
byproducts. Sales department is working under Sales Officer.
FUNCTIONS
The main function of this department is the sale ofsugar, molasses, baggasse & mud.The main goal of this department is to sell the stock at best available market price. To
keep the record of sale ofsugar and other by-products Computer Software is used. Alltransactions of sale are posted daily in computer. Following record are maintain by Sale
Department: 1. Sales Register. 2. Stock Reports. 3. Delivery Orders. 4. Invoices. 5. Sales
Tax Detail. 6. Parties Position. In NAJMA Sugar Mills Limited normally all the sale isdone through agents. There are three main parties of sale; all sales are done through these
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parties. Delivery Orders are sent to site according to contract. Without delivery order go
down incharge cannot dispatch the sugar bags.
BANKING SECTION
The Company kept Current Accounts almost in every bank, but most business is routed
through these banks, which are as follows.
Allied Bank of Pakistan Limited National Bank of Pakistan Limited
Muslim Commercial Bank Limited Habib Bank Limited United Bank Limited Bank Al-Falah Limited Emirates Bank International
The company has also kept Loan Accounts in all above-mentioned banks. The companyhas routed its most of the import business from Muslim Commercial Bank Limited, most
of the L/Cs are opened in Muslim Commercial Bank Limited. The company is alsoavailing Cash Finance Facility from the above-mentioned banks against pledge ofsugar
bags. Normally at the beginning of the crushing season sugar bags are not sold in market,because these bags are used against Cash Finance Facility from banks. Cash Finance is
the main source of the company when there is a shortage of funds. The company has also
availed Short Term & Long Term Finances from following banks.
Investment Corporation of Pakistan National Bank of Pakistan Limited Muslim
Commercial Bank Limited Habib Bank Limited United Bank Limited
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This section is the very important part of the Accounts Department. All the
functions
that are related to the banks are done in this section. Key functions of the section are asunder: 1. Preparation of Bank reconciliation statement. 2. Treatment of the banks debit
and credit advices. 3. Preparation of Demand Drafts, Telephonic Transfers, Pay Orders,Cheques with reference to payments to the parties.
BANK RECONCILIATION STATEMENT
Some banks of the company sends the statements of the accounts to the company on daily
basis and some sends at the end of every month or on the demand of the company from
time to time. This statement has all the records of transactions between the company and
the bank during that specific period. Accounts department reconciles the bankstatements with accounts, some time due to some reasons; transactions do not equally
matched with the companys records. Reasons are as follows: 1. Cheques issued by the
company to any party but not still presented to the bank for payment. 2. Cheques
deposited but not cashed or canceled due to some reason. 3. Any amount debited orcredited by the bank but not treated in the companys accounts.
All these missing items are required to be settled in the companys accounts.
DEBIT & CREDIT ADVICES
Banks sends debit and credit advices to the company according to the transactions. These
advices are the reflection of the transactions between the company and the bank.
When any amount is deducted from the company account due to any reason like:
Deduction of Bank Cheques. Payment of any amount to any party on the behalf
of the company. The adjustment of loan.
For these amounts, the bank made the Debit Advice, means that certain amount has been
deducted from the companys account, and sends it to the company. Moreover, when thebank adds any amount in the companys account due to some reason like: 1. Re-
imbursement of loan / refinance. 2. Depositing of any amount in the bank by the
company. 3. Depositing of any amount in the bank from any party in the companys
deposits. 4. Mark-up on the companys deposits. For these, the bank sends the CreditAdvice to the company, means that the certain
amount has been added to the companys account and sends advice to the company. The
company add this amount to the banks ledger. Accounts department debit these amountsto the banks ledger through B.D.N Voucher (Bank Debit, Credit Note), this voucher isfirstly signed by Accountant, secondly by the Chief Accountant, thirdly by the Financial
Controller, fourthly by General Manager, fifthly by Internal Auditor and at the end this
voucher sends to Chief Executive for final signature.
DATA ADMINISTRATION
Business environments are becoming more and more complex with the passage of time.
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The cope with changing environment and modern technology, a lot of energy &
knowledge is needed. Media and information technology are of utmost important and
discoveries in the computer technology have been made in the past few decades.
SOFTWARE SPECIFICATION:
NSML got their system development in FoxPro Language from ICS (Pvt.) Ltd. Theyhave following systems computerized. Accounts system Sales System Purchase
System Store System
HARDWARE SPECIFICATION: AT SITE:
ACCOUNTS DEPARTMENT: 1. Main Server 2. Four Clients 3. Printer Pentium-
III Pentium- III LQ-2170
SALE DEPARTMENT:
Main Server Client Printer Pentium- III Pentium- III LQ-2170
PURCHASE DEPARTMENT:1. Main Server 2. Clients 4. Printer Pentium-III Pentium- III LQ-2180
AT HEAD OFFICE:
In NSML, they are using network computer system. Their terminals are network throughnetworking. They have nine terminals on the whole. All the terminals are the intelligent
terminals and the main server is installed in the office of manager MIS dept.
PRESENTATION OF REPORTS
No one system can said computer until it generals certain reports. So the system of
NSML is also generating a broad no. of reports. Following are some important reports
produced by this system; Edit Sub ledgers Listing of all ledgers files Listing ofall master files Trail Sale day book Purchase day book Day Book Duebalances lists Cash Book Balance
Monthly Profit Trail Balance Outstanding Cheques Monthly Balances &Loss Account.
DATA SECURITY:
The issue of data security is crucial in the era of centralized database. We use the term
data security to mean protection of the data in the database against the unauthorized or
accidental disclosures, alteration or destruction. Realizing that perfect security is
unattainable, the objective of data security is to minimize the risk and probability of lossand disclosure to the lowest affordable level. There, in NSML, they are securing Protecting from unauthorized access Backup their data in following ways;Stabilizer UPS (Un-interruptible Power Supply) Watchman
We have already described that NSML is being running their computer network under the
environment of VM.s / CMs Operating Systems. Their Operating Systems provides them
he facility to set different level passwords. Each level may be
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allocated different rights that are pre-specified. They are using four levels of data
securing and only the authorized person can access the system up to the extent they have
authority. These levels are as follows;
SYSTEM LEVEL SECURITY:
This is highest level of security. It has all the possible rights. It has access to change thedifferent operating system protocols. It can change the different passwords. It can modify
the level of rights given to different users. In NSML, M. FIAZ, the head of MIS Dept,carries it.
FIELD LEVEL SECURITY:
This level of somewhat different, with reference to other levels. The manufacturer of
operating system uses this level. Whenever, there is any problem in system,manufacturing personnel are called. The personnel of manufacturing firm come there and
input their password and work there to save the problem without disturbing the personnel
of MIS Dept.
MANAGER LEVEL SECURITY:
This is the top most level in operational work. Manager MIS Dept also holds this
level. Under this level, the manager can perform any kind of activity regarding the
management of the data.
USERS LEVEL SECURITY:
This is also called the K.P.O level. At this level user of the system have the minimum
rights. Their main work is to input the data and to generate different reports. They have
also rights to enter in their own files. But others files are inaccessible.
ORGANIZATIONAL INCENTIVES
NSML has a well-formed human resource department (HRD), due to which a lot had
been done and is being done to make the moral of the workers of the
Organization high & high.
WPPF (WORKERS PROFIT PARTICIPATION FUND)
This is the name of the fund given to workers when company earns profit. It is 5% of the
total profits earned during an accounting year. Every workers / Employee whose not pay
is up to Rs. 3000/= is eligible for getting this fund.
BONUS POLICY:
The company maintains a bonus policy for its workers to initiate the motive to work
whole-heartedly for increasing workers and organizational efficiency. According to this
policy, company shall give sum equivalent 60% basic salaries of worker at the end of theevery accounting year in case of report earning.
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SOCIAL SECURITY FACILITY:
The company deducts a nominal amount in the account of social security from the
salaries of the workers on monthly basis. This deducted amount is submitted to the socialsecurity and they allot a social security number with an identification card, which shows
that the worker had got the facility of social security. Major advantage provided through
social security number is the free health care including medical and surgery facilitiesfrom the specified social security hospitals.
E.O.B.I (EMPLOYEES OLD AGE BENEFITS INSTITUTION)
This is an important deduction from the salaries of the workers for the regular income in
the old age / post retirement age so that workers have a thought of relief that there would
be no financial problem after the expiry of his employment. EOBI is an institution wherethis deducted amount is accumulated for the future use when these people will not be able
for employment.
HOUSING FACILITIES:The workers have provided with the residential facilities and small quarters are provided
to the workers. These quarters are often visited by the resident director for the checking
of cleanliness and other important matters if raised by any situation from the workers
side.
COMPANY CANTEEN:
Company has given the provision of a canteen / caf-teria for its workers and employees.
The quality of the food available in the factory canteen is under the supervision of the
labor officer.
LUNCH & TEA:According to the scheme, company gives lunch to all its workers / employees once in
every month. It also gives two times tea and lunch free to the executive level.
PROBLEMS OF SUGAR INDUSTRY
Quality of sugarcane is not very good, because of lack of Role of Government indeveloping varieties ofresearch in this sector. sugarcane is not very significant; onlysome private institutions are doing some Governments wrongresearch in developingvarious varieties for higher yield. policy for import of raw sugar Heavy duties on.export ofsugar. Instability of exchange rate also creates problems for exports andimports. Increase in cost, due to Government policy of increasing prices of sugarcane,
furnace oil & Low sale price ofelectricity. sugarin the market. Lack of institutionalfinanceHigher rate of mark-up on Finance Facilities. for modernization efforts.
SWOT ANALYSIS
STRENGTH:
Another strength is the high motivation of employees to their work because they knowthat what so ever they do, it will be in their own benefit. They know that the profit, which
they will earn, will be distributed among all the employees. So they work with high
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Salaries are very reasonable, so the employees motivation and concentration. are notfinancially disturbed and they devote their selves fully to their work. Friendly and
cooperative working Having a professional management. Good Better financialresources. environment. & new machinery provides LAN Networking helps thehigher authority in good competitive advantage. Camera screening is a pluspoint management and provides timely information. for better management.
WEAKNESSES
Lack of market Lack of research and development. The no of The residence ofthe employees is not so good at sight. survey The area of the workers is less ascompared to the requirement of the job. sight is reasonably at low height from the
surroundings so the rainy season can The water of the sight is not good and createdifficulty during the season. there is no proper arrangement for this.
Telephone service Tranportation to the site is not available easily. is notefficient.
Opportunities:
New government and Entering into new markets industrial projectsOpportunities for the online business are available here. Awareness in the Minimization of cost by properly utilizing the by-products.growers about the quality of seed should be increased. so that the good sugar cane can be
achieved.
THREATS:
De-zoning policy has created great competition between Due to great competitionsthe availability of the raw the organizations. Strict Govt. policies Invisible tradebarriers. material is the problem. Low sale price ofsugar Higher export Higherrate of mark up High raw material price. in market WTO is an other threat due tohigher cost of raw material taxes rates.
COMMENTS IN BRIEF & SUGGESTIONS
After a short careful analysis, I come to know that the financial position of thecompany is very strong than the othersugar mills in sugar In NAJMAindustry. SugarMills Limited there is no formal marketing department to promote and introduce its
output in local & international market. There is a crucial need for having a disciplined &
coordinated program of marketing to boost up There is a need of searching the newcustomers in local market. sales. NAJMASugarcane seeds should be provided to thegrowers. Sugar Mills Limited should advise its field supervisors to be more active in
field, coordinate with growers NAJMAand try to understand problems of the growers.Sugar Mills Limited should appoint skilled persons in every department Local worker.NAJMAshould be preferred. Sugar Mills Limited should introduce the new brands ofsugar packets, such as 5 Branch of SalesKgs, 10 Kgs, and 25 Kgs. Department
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should be setup in mills to provide the selling facilities to the local agents & dealers.NAJMA Sugar Mills Limited should conduct market surveys and research to
Saleknow the customers views and suggestions. Department should be engaged onlyin sales activities and perform only following activities. 1. Sale of White Refined Sugar.
2. Sale & purchase of Molasses. 3. Sale & purchase of Baggasse. 4. Sale of Mud. 5.Maintaining a Sale Register. Remaining work should be done by Accounts Department,
which are as follows: 1. Keeping whole record ofSugar Parties, agents and Customers.
2. Posting of Sale Voucher. 3. Posting of Cash Received from Internal AuditCustomersVoucher. Department should check each Internal Auditvoucher. Department shouldconduct monthly audit of accounts and submit its report to Chief Executive, General No
room is availableManager, General Manager Finance and Manager Accounts. forexternal auditors in whole group, at least two rooms should be arranged
Computerpermanently for external auditors. department should also AccountingSoftware should also be improved becauseestablish at site Office. this software cannot
At least one I.T Engineer should begenerate some important reports. The Jobrotation principle should be implemented. appointed at site Office. H/O should beconnected through Internet with the site. Due to which cost of telephone and
transformation of data can be reduced.
TABLE OF CONTENTS
Sr. # 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 IntroductionMain Departments at Site MechanicalDepartment Electrical Department Chemical
Department Cane Department Accounting Department Admin Department Main
Departments at Head Office (Finance) Accounts Department Export & Import
Department Purchase Department Sales Department Banking Section Organizational
Incentives Quality Management Ratio Analysis Statement of Cash Flow Interpretation
Problems ofSugar Industry SWOT Analysis Comments in Brief and Suggestions TopicGrowth ofSugar Industry in Pakistan Page # 04 08 14 15 16 17 18 20 29 33 35 40 44 46
47 61 65 69 74 76 79 80 81