internship report

PROSPERITY WEAVING MILLS LTD.

INTRODUCTION OF TEXTILE INDUSTRY

Textile is a vital part of the world economy with many nations heavily dependent on the

sector for foreign exchange earnings and employment generation. Today textiles and

clothing trade accounts for nearly 6% of total world exports. Many of the least developed

and small developing countries have built a huge dependency on the sector which often

accounts for more than 90% of industrial exports and more than 50% of total

employment. With increased global competition, many sectors within the textile industry

are increasing production efficiency. Research, innovations and development in technical

textiles, yarn quality, clothing products, process performance, fabric finishing, coloration

technology and marketing can bring significant advancements in the textile sector and

market supremacy.

Fabric processing is the most critical stage of value addition in the entire value chain.

Woven or knit fabric can either be dyed or printed depending upon the requirement of the

customer who is the garment or made-ups manufacturer. The use of colored cotton being

unique and attractive has the potential to become a part of cotton fabric and apparel

market.

Pakistan textile sector is by far the most important sector of the economy contributing

67% to export earnings and engaging 35% of labour force. The entire value chain

represents production of cotton, ginning, spinning, weaving, dyeing, printing and finally

garments manufacturing. Pakistan has emerged as one of the major cotton textile product

suppliers in the world with a market share of about 8% in world cotton cloth trade.

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PROSPERITY WEAVING MILLS LTD. Pakistan’s textile sector has made considerable advances in production capacity and

capability in the last five years. Over the last five years this sector has invested about 6.0

billion $ in modernization and higher value addition. As the current trend is for the

establishment of air-jet looms units, open-width processing units, and in printing major

strength is of ‘rotary’ screen printing machines, further investment are being made for the

import of latest machinery for bleaching, dyeing, printing and finishing. Import of textile

printing and finishing machines increased from Rs1.51 billion in 2001-02 to Rs 5.58

billion in 2005-06, thus showing an average increase of 54% per annum.

The new idea of free trade under World Trade Organization (WTO) is reshaping,

restructuring and redefining the volume of foreign trade and its direction in almost all

economies of the world. In pre-WTO period the West was supplying garments and textile

products to the East with complete dominance on textile trade. Now, the scenario is

changing fast. The USA and European countries can not afford high cost of labour wages

in textile mills and can not compete with the low cost of production in textile and

garment sectors. As such, spinning, weaving and finishing capacity of US and European

countries is reducing drastically and is increasing fast in some of the Asian countries like

China, India, Pakistan, Bangladesh, Sri Lanka and Vietnam due to cheap labor.

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NAGINA GROUP HISTORY

Nagina Group was founded on May 16th 1967 with the incorporation of Nagina Cotton

Mills Limited. Since then Nagina Group has expanded its operations in textile

manufacturing and has diversified into other sectors. Currently, Nagina Group’s textile

manufacturing capacity is 100,956 spindles and 324 air jet looms.

A steady and well thought out growth strategy coupled with a solid commitment to

quality has earned Nagina Group a family of satisfied customers, hardworking

employees, appreciative shareholders and the confidence of the banking community.

Textile power generation and trading activities are the core business allowing to the

group to enjoy annual turnover of US$ 80 million. Expansion of group capacity will

enhance the turnover to US$ 100 million. The core businesses of Nagina Group generate

an annual turnover in excess of 100 Million US dollars.

Export of products is part of the group philosophy and account for over 65 percent of

group turnover. Due to decades of dealing with Pakistani, North American, European and

Far Eastern customers Nagina Group has created a skilled and knowledgeable

management fully capable of understanding and responding to customer needs in record

time.

Nagina Group consists of three publicly listed companies on the Karachi Stock

Exchange (Nagina Cotton Mills Limited, Prosperity Weaving Mills Limited, Prosperity

Weaving Mills Limited), five private companies (Monell (Pvt.) Limited, Icaro (Pvt.)

Limited, Haroon Omer (Pvt.) Limited, Ellahi International (Pvt.) Limited), ARH (Pvt.)

Limited), and employs over 3,500 employees. Nagina Group was selected in 2003 by

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PROSPERITY WEAVING MILLS LTD. Forbes Magazine as one of the best 200 international companies with an annual

turnover of under a billion US dollars.

Ellcot spinning mills limited

Established in 1991, Ellcot Spinning Mills Limited operates state of the art spinning

machinery comprising of 54,528 Spindles with related process machines. The company

produces high quality yarns of 100% cotton, synthetic, and polyester / cotton blends.

Both carded and combed Yarns for weaving and knitting application are produced in

many blends. Ellcot Spinning Mills Limited high quality yarns are used to produce

apparel fabrics, sheeting, toweling, canvas, and Knitted products.

Nagina Cotton Mills

Established in 1967, Nagina Cotton Mills Limited (Winner of Forbes Global Award

"Best under a Billion-200") is the mother company of Nagina Group. The company

operates state of the art spinning machinery comprising of 46,428 Spindles with related

process machines. Latest equipment from Japan, Europe and China allow production of

high quality spun yarns in carded and combed versions for use in high speed looms and

knitting machines.

The directors are pleased to report that the prestigious International business magazine

FORBES included Nagina Cotton Mills Limited in their list of "Best under a billion -

200". According to FORBES “Our list of 200 successful companies outside the U.S. is

drawn from among 19,000 publicly traded concerns with annual sales below $1 billion.

We screened out most corporations that did not have operating margins of at least 5%

in the latest year and average returns on equity of at least 5% over the past five, aiming

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for businesses that were profitable and that rewarded shareholders.

A handful of companies that failed these tests were considered if they had outstanding

results otherwise. The remaining 4,000-odd concerns were graded against one another

using various dollar-based performance measures, and the top 500 reviewed for

inclusion on this list.

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History of PROSPERITY WEAVING MILLS LIMITED

Prosperity Weaving Mills Limited (An ISO 9001:2000 Certified Company) started

production of high quality apparel and home furnishing greige fabrics in June, 1993.

The plant is equipped with Benninger Zell Warping and sizing, Toyota high speed Air

Jet Weaving looms, LUWA humidification/chilling and state of art advanced

computerized process and quality control machines. The mill comprises a total of 324

looms of various widths. Fabric production is over 55,000,000 (Fifty five million)

linear meters annually and caters to the quality conscious buyers of Europe, North

America, and the Far East. All kinds of sheeting, flannel, canvas, duck, drills, twills,

satins, down proof, rip stop, stretch and dobby fabrics are produced in 100% cotton and

synthetic blends.

The fabric is mainly produced for dyeing quality and extra care is taken to produce

fault free minimum contamination fabrics of long piece length

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Vision Statement

To be the market leader by being the best and providing the best .

Mission Statement

To be the leading producer of cotton and blended yarn for knitting and

weaving for local and international customers manufacturing well-known

textile brands.

To strive for excellence and sustain position as a preferred supplier for yarn

with a customer focused strategy.

Continuous enhancement in the quality objectives for customer satisfaction

and operational efficiencies.

To achieve the comparative advantage by employing latest technologies for

enhancing the efficiency and productivity.

To build enduring relationship with our suppliers by giving them fair return

on their products and services.

To provide a professional, open and participative environment to our

dedicated employees for developing their potential and team performance.

To give consistent financial returns to the shareholders on their investments.

To be responsible to the society, employees and communities in which we

operate by initiating health care, education and social welfare activities.

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PROFILE OF THE COMPANY

Board of Directors

Shaikh Enam Ellahi

Mr. S.M. Yusuf

Mr. Shaukat Ellahi Shaikh

Mr. Shahid Aziz

Mr. Shahzada Ellahi Shaikh

Mr. Shafqat Ellahi Shaikh

Mr. Syed Mohsin Gilani

Chairman Group

Mr. Shaikh Enam Ellahi

Managing Director (Chief Executive)

Mr. Shafqat Ellahi Shaikh

Audit Committee

Mr. Shaikh Enam Ellahi Chairman

Mr. Shahzada Ellahi Shaikh Member

Mr. Shaukat Ellahi Shaikh Member

Mr. Syed Mohsin Gilani Secretary

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Chief Financial Officer (CFO)

Mr. Muhammad tariq sheikh

Corporate Secretary

Mr. Syed Mohsin Gilani

Auditors

Messrs Rahman Sarfraz Rahim Iqbal Rafiq & Co.

Chartered Accountants,

Apartment No. 4, Block-B

90 - Canal Park, Gulberg-II

Lahore.

Registered Office

Nagina House,

91-B-1, M.M. Alam Road,

Gulberg-III, Lahore-54660.

Mills

Mouza Rossa,

Manga Mandi Raiwind Road,

Tehsil & District Kasur.

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PRODUCTS PORTFOLIO

All kinds of sheeting, flannel, canvas, duck, drills, twills, satins, down proof, rip

stop, stretch and dobby fabrics are produced in 100% cotton and synthetic blends.

We produce up to 800 thread count (T-800).

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MACHINERY

Warping

o Benninger Zell Germany 4 Sets

Sizing

o Benninger Zell Germany 4 Sets

Total Looms

o 240 Looms of 75” Width + 84 Looms of 134” = 324 Looms

Looms Description

o 132 Looms of JAT-600 (Toyoda-Japan), Width = 75”


o 48 Looms of JAT-710 (Toyoda-Japan) Width = 75”


Air-Compressor

o Atlas Copco Germany

Humidification/Chilling

o Luwa Swiss

CULTURAL VALUES

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PROSPERITY WEAVING MILLS LTD. Prosperity Weaving Mills Limited emphasizes the basic values to fulfill the customer’s

requirements

Through:

Commitment

Fairness

Integrity

Team Work

Prosperity Weaving Mills Limited is also full aware with needs of modern machinery and

competitive environment in textile sectors. Prosperity is strongly competed with other

spinning mills through quality, infra structure, flexible policies and more innovative

product.

PROSPERITY WEAVING MILLS SYSTEMS

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PROSPERITY WEAVING MILLS LTD. Every organization has its own systems on which all the working activities conducted.

Limited has two separate yarn systems, one is Yarn package which provides information

about daily production summary, yarn clearance summary, stock summary and other is

accounting package which maintains their day to day activities like Sale recording,

delivery orders, contracts etc.

Features of Yarn Production Management and Yarn Sales Management

These are much modernize computer system

All the days activities are maintained with these systems

Most of the employee of Ellcot operates these systems

If any information is required so these systems provides all necessary information

Internet facility is also provide to all employees so they are keeping in touch with

latest development happening in textile sectors

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MAJOR COMPETITORS

Major Competitors in Blended Yarns

AMTEX Faisalabad

Sargoda Group

J.K Group

Gazi Group

Crescent Textile Mills

Island Textile Mills Karachi

Nishat Textile Mills

Mahmood Textile Mills

Major Competitors in Cotton Yarns

Suraj Textile Mills

Saif Textile Mills

Banairo Textile Mills

Dewan Textile Mills

Gadoon Textile Mills

Nishat Textile Mills

Superior Textile Mills

Nisar Textile Mills

Tanweer Textile Mills

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SWOT ANALYSIS

The overall evaluation of company’s

Strength

Weaknesses

Opportunity

Threats

Strengths

Professional Ownership

Professional Management

Effective Cost of Production

Large Production Capacity

State of the art of the machinery setup

Large economy of the scale.

Highly Skilled Technician

Self Power Generation

Strong Financial Liquidity

Dedicated Employees

Healthy Working Environment

ISO 9001:2000 Certified company

Advanced technologies

Internal communication and information system is very fast and strong.

Diversification of Quality

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PROSPERITY WEAVING MILLS LTD. Specialized fashion products

Weaknesses

Quality issue due to old Machineries

Bureaucratic Culture

No training system is present in the company

Centralized Structure

Low salary

No specific H.R Department to understand the growing needs of employees.

Traveling shortage of marketing managers.

Communication Gap

Unbalanced division of work load.

Opportunities

Their must be increase in traveling of marketing managers to expand the business

more effectively.

Produce fine fabric to capture more export market

Introduces yarn dyed fabric for apparel and bed wear to expand the business in

dying nit.

Threats/ Challenges

Quality issues due to old unit of yarn manufacturing

Market will loose if quality does not maintain

Uncertain Economic Conditions

Increase in competition

Political instability

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ORGANIZATIONAL STRUCTURE

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Manger Accounts for

Finance

Manger Accounts for

Cash

Marketing Manager

Staff

Managing Director

G.M Finance

G.M Group Accounts

G.M Marketing

Export

G.M Audit G.M Commercial

G.M Admin

Finance Manager

Chief Financial Officer

Manager Accounts Raw

Material Purchase

G.MMarketing

Local

Assistant Marketing Manager

Audit OfficerCommercial

Manager

Import Manager

Admin Officer

StaffAssistant Manager Finance

Manger Accounts Store

Purchase

MangerAccounts for

Banks

MangerAccounts for

Sale

Chairman

Assistant Purchase Manager

G.M Export

Export Manager

Assistant Export

Manager

Purchase ManagerStaff

Staff


DEPARTMENTS DESCRIPTION

Accounts Department

Accounts Department plays a major role. In Prosperity Weaving Mills Limited burden of

accounts department is largely reduced because of computerization. The use of

computerize system increases pace and efficiency of accounting work. This department is

responsible for preparing books of accounts of prosperity weaving mills.

According to functions accounts department are divide into six major sections through

which accounts are prepared.

Raw Material Purchase Section

Functions of Raw Material Purchase Section

Yarn purchase contracts

The marketing department after making contracts with the suppliers sends the

information to the accounts department and then Yarn purchase contract is prepared

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Accounts Department

Cash Section

Raw Material Purchase Section

Sale tax section

Bank Section

Sale Section

Accounts Section

PROSPERITY WEAVING MILLS LTD. which contains date, supplier name, count, type, brand name, quantity, purchase value,

agents involved in purchase.

Yarn receipt advice summary

A yarn receipt advice summary is prepared which contains the detail of every purchase

done by the marketing department.

Yarn receivable and payable report

Yarn receivable and payable report is prepared to record the receipt and payments

received from debtor and creditors. The receipt ad payments are recorded on daily basis

and the amount is adjusted. This report contains party name, outstanding balance of party,

payment, receipt and credit balance.

Preparation of yarn outstanding summary

This report is prepared on daily basis which tells the amount of yarn which is

outstanding. This report contains YPN number, date, count type, ratios, brand, supplier

names, quantity received, and quantity outstanding.

Yarn activity report

This report is used to see the total outstanding bags which are to be received from the

suppliers. This report contains the opening outstanding bags than the receipt for the day

are less, and new purchase is added and contract which are cancelled are less from it.

Salary reconciliation

A salary reconciliation sheet is prepared to reconcile the salaries of mills and the record

maintain in the head office. This report contains gross wages, cash payment of wages,

payment through cheques and deductions of income tax, insurance and EOBI.

Checking of site vouchers

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PROSPERITY WEAVING MILLS LTD. Vouchers which are prepared by the site officers or cashiers are checked by the accounts

officer.

Monthly stock taking at the mills

Monthly stock taking is done at the mills. A group of employees is send to the mills for

stock taking.

Bank Section

Function of Bank Section

1. To monitor banking transaction related to finance as well as export/ import.

2. To record above transaction in books of accounts.

3. To mange banking transaction

4. To reconcile banks on monthly basis

Sale Section

Functions of Sale Section

1. To verify sale contract local as well as export

2. To record sale transaction on daily basis and verify the same from mill record

3. To record receipt from parties and deposit the same into bank on daily basis

4. Reconcile the parties related to sale on weekly basis.

5. To record commission which is paid to the agents foreign/local.

6. Preparation of sales tax invoice.

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Sale tax section

Functions of sale tax section

Verification of Income tax

Thje feeding which is done by purchase section in FBR site for purchase tax is verified

from the ledgers and the feeding of purchase tax in FBR site is also verified. Than the

cash section make the payment of tax.

Recording of Sales tax

Input tax is deducted from the purchases made during a month. Output tax is deducted

from the sales during the month. Fabric sale is zero rated some waste sales are zero rated

and some are taxable. Yarn is also zero rated and baby cones are also zero rated.raw

material is also zero rated.

Post bank receipt vouchers

The receipt which come from banks for commission and bank charges are posted in the

accounting package.

Discounting of export bills

The export bills are discounted by the banks . these discounting is done on invoice value

and the discounting value will be the current value of exchange which is prevailing in the

market.

To Post of bank payment vouchers

Preparation of local commission

First the commission bill is given by the agent company or agent then the recording of

commission is done on excel which include invoice name, buyers name, rate and amount.

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PROSPERITY WEAVING MILLS LTD. The commission written on the bill and the commission register is verified. Now the

terms of sale contract are verified with the sale package which is used to prepare the

contract and invoice. The terms of the sale contract are written on the commission sheet.

After that the amount of commission is verified with the ledger of agent if there is a debt

balance the amount will cut from commission and paid to the agent.

Preparation of local commission on export sale

Filling Sales tax Challans

The sales tax challan are filled which are downloaded from the FBR site. This challan

contains name of the company, sales tax registration number, NTN number, total amount

of sales tax payable, sales tax on services and CNIC number of depositor.

Accounts Section

Functions of Finance Section

Cash Section

Functions of Cash Section

1. To make arrangements of patty cash for expenses.

2. To receive and make payments to the parties.

3. To maintain cash book

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Export Department

Export means to send goods to foreign countries. The purpose of export department is to

manage all the activities in exporting fabric to foreign countries. Export department deals

with banks for handling L/ Cs operations. This department is responsible for feeding all

the relevant data about export and local sale into system.

Functions of Export/ Documentation Department

Mange all the processing related to L/ C’s, preparation of L/ C documents

preparation of custom clearance documents

Scrutinizing and verifying the L/ C documents

Logistic Arrangement for shipment of export and local dispatches (Trucking).

Payment of freight

Payment of Local trucking

Negotiations with truckers and shipping line

Make Arrangements for the payment of local and foreign Commission

Correspondence of payment and negotiation.

Feeding of Sales Contracts, Delivery Order (DO’s) and reporting related to Export

Clearance etc.

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Audit Department

The purpose of audit department is to check and verify that Prosperity Weaving mill is

working according to the policies and procedure stated in article of association. Main

responsibility of audit department is to examination of books of accounts and voucher of

business. Audit department verify that balance sheets are properly prepared and showing

true and fair view of business. Audit department also physically examines the processing

of fabric manufacturing at mill.

Functions of Audit Department

To verify that books of accounts shows true and fair view or not.

To verify the processes of cotton sales and cotton purchases,

To verify party contracts, invoices and bank reconciliation statements

To verify mills weight report

To verify lab test report of fabric

To verify salary and wages of staff

Waste calculation is measured

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Admin Department

Admin department of Prosperity Weaving Mills Limited is responsible for all the

management affairs of the company. There is no alone department of personal

management so this department also performs function of personal management. This

department manages all the processes involved in managing people in the organization.

Functions of Admin Department

Following are the functions of admin department of Ellcot Spinning Mills

To recruit and select, train and develop, manage the salaries and incentives and

fire the employees and perform other functions of personal management.

To handle the security in head office of Ellcot Spinning Mills

To manage the mess in the head office

The responsibility of admin department is to deal with government offices.

Handle Building and Ground Maintenance

Dealing with labor courts

Making arrangement of different hotels in Lahore and other cities.

Commercial Department

Under the commercial department of Prosperity Weaving Mills is responsible for

purchase of machineries and raw material so this department classified into two heads

according to functions. One is machinery purchase department and other is raw material

purchase department

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Functions of Machinery Purchase Department

Import machineries and parts from foreign countries.

L/ C opening from the bank.

Performs maintenance of the weaving units.

Making purchase contracts of machineries and parts from local as well as foreign

countries.

Functions of Raw Material Purchase Department

Select the yarn according to rates, quality and informs to the M.D

Purchase yarn from local markets and foreign markets.

Making contracts for purchase of yarn.

Transport arrangement

Laboratory test of fabric.

L/ C opening from the bank

Checking purchase invoices

Finance Department

Finance department is back bone of Prosperity Weaving Mills Limited. This department

deals with top banks and makes arrangement of finances from them. This department

analyzes the financial requirements of the company and makes decisions with consent of

managing director. Finance department identify the financial needs of business and deals

with banks and other financial institutions and short term and long term financing is

accomplished in this way.

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Planning for short term loans

Need analysis

First of all in planning section the need analysis is done. The finance manager first

analyze whether we need long term or short term funds for the project. After need

analysis the manager negotiates with the bank.

Negotiation

The finance manager negotiates with the banks for facilities.

Request letter

A request letter is sent to the bank for facilities according to the needs.

Letter of intend

When the request is accepted by the bank bank give letter of intend to company. It

contains all the terms and conditions but it is not an approval. This letter contains their

facilities, rates and requirements. Banks want security against each loan which they

provide.

Hypothecation

Now banks want intangible stocks instead of actual pledge. Intangible ownership like

banks has ownership in paper not physical. Now the companies take loans after pledging

the stocks in hypothecation. Letter of intend contain stocks and prices.

NOC (No objection certificate)

NOC is a non objection certificate which is issued by the banks which are already our

charge holder. This is the regulation of SECP that when a company is going to add a bank

in the charge they should submit the NOC from the other banks. NOC is deposited to

SECP when all banks give there NOC to SECP than SECP give name to that charge.

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PROSPERITY WEAVING MILLS LTD. Ist pari pasu charge:

When the company want to take facilities from the any bank than the company have to

give charge to the bank on the stocks this charge is called first pari pasu charge. When

letter of intend is fulfill companies requirement then company give acceptance to that

letter.

Sanction letter

After accepting letter of intend than company request them to issue there formal sanction

letter. It is similar to letter of intend. It contains limits, securities and facilities which

bank provides us. State bank has rules that if you are giving facilities to a company you

should have some documents of the company.

Documents

BBFS (Borrower basic fact sheet)

Shareholder phone numbers, addresses and all the details of shareholders is given in

borrower basic fact sheet. BBFS is used in any case.

Foreign document form 29

It contains director’s information. Form 29 is the SECP form. This form of SECP is for

detail of directors. State bank has its regulations to have a bank to which it is giving

facility it should have form 29.

Form A

These forms are similar to form 29. This form 29 and form A has to submit to SECP.

After attestation to SECP than they give it to banks.

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PROSPERITY WEAVING MILLS LTD. Legal documents

Master agreement for financing

Demand promissory note

Personal guarantee of directors

Master agreement for financing

It contains all terms and conditions in detail and legal details. In case of any dispute

between bank and customer than court rely on this document. This document is on stamp

paper.

Demand promissory note

It is also printed on stamp paper. It contains an undertaking that we are using this facility.

And we are liable for any default. We legalize our liability. When the company is

liquidated then the first obligators are the first pari pasu charge holder.

Personal guarantee of directors

The personal property of the directors can be used for this.

When company and bank has an issue then master agreement tell the term and

condition of default and procedures.

Court than declare the company as insolvent than the document of demand

promissory note is used and then the amount is paid. If amount is less the bank

say that the 3rd document of directors is used.

]

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PROSPERITY WEAVING MILLS LTD. Security implementation

After all the legal documents are send to the bank Than the security is implement.

Long term planning

Long term facilities don’t require renewal because it has only expiry date and then it

expires no renewal is required. Long term finance is for one tenure.

For long term requirement we have two things.

Expansion( machine or project) (for growth)

Long term financing reason ( balance sheet support)

Group debt equity ratio prosperity debt equity ratio

65% 35% 68% 32%

Debt equity debt equity

Long term financing reason (balance sheet support)

An makes risk analysis on the basis of ratios. If the standard set by SBP and SECP for

current ratios are not according to that standard and our current ratio is less it means that

our liabilities are more and our assets are less than we take long term loan and pay the

short term liabilities in this way the current ratio is balanced.

Expansion (machinery or project)

It completely depends upon director’s decision to expand the business.

Market scenario

In this we see that if our competitor buys that machine we should also buy it. Sometimes

our customer demands that I need it so we fulfill his requirement.

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PROSPERITY WEAVING MILLS LTD. Feasibility and projection/forecasting are provided to the bank when the new project is

started.

Controlling

In controlling section the finance manger controls all the process of taking facilities,

renewal of facilities and the allocation process of finance

Short term facilities renewal

For renewal of facilities the company don’t need a letter of intend because the company

already have all the facilities. With the request of renewal company give these documents

to bank like BBFS, annual accounts, stock reports. If annual accounts are outdated the

company will give the latest accounts pulse latest detail of facility with other bank long

term or short term. Renewal involves enhancement of facilities and limit.

Also the company can plan to switch the guarantee limit which is now idle so company

can switch it to the working capital.

Request of renewal also includes the request to reduce the amount of services charges or

other charges that bank deduct. Now bank allow the sanction letter the company return

the sanction letter by signing. Now company give them legal documents.

Feasibility and forecasting

Feasibility sheet for production cost

Cost

Custom duty/importing expense

Erection charges

Running cost

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PROSPERITY WEAVING MILLS LTD. Financing cost /markup

Insurance

Insurance of project

Pay back time

This is feasibility sheet now we get the project’s total cost.

Forecasting/ projection

Now we make 5 years and 7 years accounts projected accounts of the project cost.

Project cost feasibility

Financing structure

On the basis of these two things we make projection. We look at these things like

improvement in sales, trends in profit ratio trends.

Periodical analysis

After feasibility and forecasting the finance manger have to analyze that whether they are

working according to the feasibility and forecasting which they prepared for 5 to 6 year.

This is periodical analysis this is on annual basis. Some banks required projections for

short term loans also.

Investment

Simple if a company have surplus funds now they have to decied to place them

Investment for profit purpose

To place surplus funds

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PROSPERITY WEAVING MILLS LTD. Portfolio of nagina group is 400 million.

Marketing Department

A well organized marketing department is necessary for every modern organization

because a business can compete only if its marketing performance is adequate. As

marketing is the process of managing the resources of the business firm to meet the needs

of the market. Therefore the marketing department of understands the need of their

customers in terms of quality, quantity and price. This department handles the issues

regarding quality and some time less weight complaints.

Marketing department of prosperity weaving mills has an important role in the success of

a business. The major reason of high exports and local sales of cotton or blended yarns is

due to the marketing department. Prosperity Weaving Mills Limited having a well

organized marketing department, while this department is controlled by its General

Manager Marketing Export and General Manager Marketing Local.

Functions of Marketing Department

Marketing department of Prosperity Weaving Mills Limited performs following main

functions:

To dispose off the products at predetermined prices.

To convey information about market demand to its top management.

To send information about sales and inventory to the top management and the

accounting department.

To convey information about latest prices and competition to the top

management.

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PROSPERITY WEAVING MILLS LTD. To raise the sales through visits to the markets as well as to bring suggestions

about changes in product to the top management.

To create demands for different count of yarns in the foreign as well as local

markets

To sell the yarns of different counts to local and foreign customers

To forecast about the sale

To attract new customers

To survey the markets on regular basis

To set prices of different count of yarns

Count planning is also responsibility of marketing department

Marketing department controls the production of different counts

To check and analyze the daily production reports, stock reports, and yarn

clearance report

Dispatch Order (DO’s) planning is done by Marketing Department

Sales contracts are prepared by Marketing department

To Plan the Sales Covering for every week

To visit mill on monthly basis and discuss the production of counts with the mill

managers

To handle the issues regarding delivery, contracts, paying commission, recovery

of bad debts

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Work Flow of Marketing Department

Sales Cycle for Export

Marketing department of Prosperity Weaving Mills Limited attracts the foreign buyers

and to increase the demands of blended yarn as well as cotton yarn in international

market. On the other hand when a foreign party is interested in the product of Prosperity

Weaving Mills Limited, they approach the marketing department at Lahore head office.

After a satisfactory discussion and correspondence a contract is made reflecting the

different aspects of sales when the foreign buyers are agreed upon the quantity, quality

selling price and delivery schedule he is asked to establish a letter of credit.

Steps in Exports Sale

Sale is initiated by conversation on telephone or fax or e-mail with customer.

Quotation

Quotation of yarn is given to customer. It includes all the terms and conditions

regarding quality, packing, price of yarn

Bid price

Marketing department ask for bid price

Dispatch Samples

After the buyer satisfied with quality, packing and price, samples of yarn are sent

to the buyer

Contract

A contract is made between seller and buyer. After a satisfactory discussion and

correspondence a contract is made reflecting the different aspects of sales when

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PROSPERITY WEAVING MILLS LTD. the foreign buyers are agreed upon the quantity, quality, selling price and delivery

schedule he will accept the contract and asked to establish a letter of credit.

Letter of Credit

It is a formal acknowledgment and type of advance payment by the buyer to the

supplier. The supplier can not receive the money until and unless delivery has

been made to the buyer. Under this arrangement the importers made an advance

payment to his bank to the importers bank, in Pakistan. In broad speaking letter of

credit (L/C) is a discussion between two banks on export and import of goods.

The established L/C includes the line of delivery goods and other requirements of

importers. The general manager marketing informs the mills at plant location to

produce such type of yarns which are specified in L/C. They ship the written

goods with in the stipulated period of L/C to the foreign buyer. The necessary

documents are delivered to the bank and L/ C is discounted from bank and

received amount by converting foreign currency into Pakistani rupees according

to the foreign exchange rules. Prosperity Weaving Mills Limited always opens an

irrevocable L.C.

Local Sales Cycle

Similar to export, sale is initiated by the customer or marketing department

through email , fax, telephones and personal visits

Quotations are given to the customer, Customer check the quality and packing.

Marketing Manger ask the customer for bid price

After satisfied with terms and condition a contract is made

Specific yarn is produced after making the contract

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PROSPERITY WEAVING MILLS LTD. Than yarn bags are deliver to buyer on daily basis according to production

capacity of specific yarn.

Preparation of Sales Contract

A contract is made between the seller and the buyer. The sale is drawn up by the seller

and sent to the buyer. Then it is up to the buyer weather they want to accept, amend or

reject the contract. If the buyer is satisfied with the terms and conditions stated in the

contact, and then he will usually accept.

Contract is made through Yarn Sale Management Software. Sales Contract include the

following items

Count:

Count describe coarsens or fineness of the product, the higher the count the finer the

product. Technically count means no of hanks per pounds.

Quality

Quality refers to type of yarn. Knitting or weaving

Rate

The rate is calculated per 10 pound (lb’s) plus added G.S.T (General Sales Tax)

Quantity

The no of amount required in bags. One bag include 100 pounds (lbs)

Delivery

The date at which seller has to deliver the product to the customer.

Commission

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PROSPERITY WEAVING MILLS LTD. If the sale was done indirectly through an agent so commission will pay to the agent.

Delivery terms

The place from where yarn bags are delivered

Payment terms

The no credit days are given to the party

Packing

Yarn is packed locally or export

Recoding of Sales

Note the sale on sales intimation slips

Send the sales intimation slips to the documentation department

Documentation department feed data into software (Yarn Sales Management )

After feeding the data documentation department electronically transferred to

marketing department

Marketing Department verify and further forward to Managing Director

Managing Director approve the sale if satisfied with all the conditions

Delivery / Dispatch Orders planning and Preparation

Delivery planning is done with analyzing the daily stock report and production

report

After analyzing the stock position and production, plan out how many bags of yarn

of different count will be given to party

Than written planning of DO’s are sent to the documentation department

Documentation department feed the data into Yarn Sale Management Software

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PROSPERITY WEAVING MILLS LTD. Print five copies of DO’s by the documentation department and transferred back to

marketing department

Five copies of DO’s are signed by the General Manager Marketing and DO’s are

further forward to accounts department.

Accounts department verify the DO’s by checking the balance of party. If party

balance didn’t exceed the credit limit so DO’s are signed the G. M Accounts

Out of five copies of DO’s , one copy remain in accounts department, one copy is

sent to the communication department for sending fax at Mill , one copy is sent to

the marketing department and 2 copies are sent to documentation department.

Sales Covering

Sale covering is a report which is weekly prepared to predict that how much days is

required for production to cover the sale of different counts of yarn. Through this report

count planning is also done. Ring frames are set according to stock. If frames are greater

than the no of days will be less. This report is prepared on Microsoft excel program. Sales

covering is calculated by sale minus stock and divided by production per day.

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Chapter 2

Internship Activities

INTERNSHIP ACTIVITIES

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Chapter 3

Internship Summary

RECOMMENDATIONS FOR PROSPERITY WEAVING

MILLS

Export Market Share

The Market share of Prosperity Weaving Mills is reduced in past year. Intensive

survey should be conducted to increase the share in the export market.

Co-ordination among the Upper and Lower Management Staff

Management should try to win the willing cooperation of the non-executives

because during my internship at Prosperity Weaving Mills, I felt a little

dissatisfaction among the workers.

Making the Complain Process Easier

The procedure of settlement of claims is lengthy. The defect or damages claims

from the customer should be settled in easier way.

Market surveys

There must be increase in regular market surveys for knowing the market

situation and positions of competitors. Market surveys also helps in knowing the

strategies and the problems of competitive international markets. So in this way

prosperity will easily compete the price in local as well as foreign markets.

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R&D should be established

There should be a R&D (research & development) Department to study the

customer needs and marketing requirements and new developments in the market.

Distribution of Work

In prosperity weaving Mills, there is misdistribution of work; some people are

over burdened with work. So I suggest that there should be fair distributed of work, in

this way operations can run smoothly.

Formalizations of Work

In prosperity I keenly observed that there are much complicated and formal

procedures of doing work especially in DO’s formation. I suggest that

marketing department prepare DO’s without interruption of documentation

department. In this way errors in making DO’s will minimize easily.

Employees Trainee

Prosperity should concentrate on training of the employees and arrange different

training programs to updating their employees with changing needs of textile

sectors.

Staff Benefits

Prosperity should increase the salary package, they should be provided with more

facilities so that they perform their task more efficiently and more devotedly.

Traveling of Marketing Managers

Marketing Managers should travel more in local markets as well as foreign

markets because there is need to visit customers, in this way business will expand.

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RECOMMENDATIONS FOR DEPARTMRNT OF

BUSINESS EDUCATION

Department should organize monthly seminars on contemporary issues related to

subjects.

Department should arrange tours to reputable and multinational organization

according to the requirement of subject.

Department should developed job placement cell so it will help in placement of

jobs and internships.

Department should create liaison with different organization

More case studies method should use in the department.

Paid teacher assistants should be established to decrease the work load of the

teachers

Department should establish the directory of their students. It will help to identify

their past graduates in this way networking increases with them.

More simulation and activity based learning method should use by the teachers.

Department should promote and organize sports activities.

Department should introduce some more area of specializations

Department should establishes independent computer lab for the students

Department should arrange prize distribution ceremony after every semester for

the purpose of students appreciation.

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SUGGESTIONS FOR NEXT INTERNEE

I have worked in prosperity weaving Mills, Nagina Group and have notice some of the

things which are much required to complete the internship successful.

Internee should take interest in understanding the technical information regarding

fabric and different type of terminologies use in textile sector otherwise it is very

difficult to survive.

Most of the staff is not cooperative with internees but you can handle them

tactfully.

I should prefer the internee to work in marketing department because the

marketing staff is more professional and cooperative and if any one wants to learn

so this is the best option.

One thing also kept in mind that internee should take initiative in learning the

things otherwise no one can teach you.

Internee should obey all the orders of the concern manager whether he sent to

bank for deposits etc.

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OVERALL SUMMARY

During the time, I have spend at Prosperity Weaving Mills Limited, I observed their

working conditions and environment, their customer dealing coordination with

colleagues, After observing the performance I have drawn the following conclusions.

Prosperity weaving Mills Ltd. has become one of the leading weaving mills in

Pakistan due to its high quality yarns which are used to produce apparel

fabrics, sheeting, toweling, canvas, and Knitted products.

It is ranked in top ten weaving mills of Pakistan.

Prosperity has highly devoted and professional staff.

Prosperity has good repute in making payments to the customers

Prosperity has strong liquidity position among their competitors

Due to highly diversified product portfolio it has created good will in market.

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Appendices

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