Fatima Sugar Mills

IN THE NAME OF ALLAH WHO IS MOST BENEFICENT AND MERCIFUL

dedicatIONS tO:

Man Mo

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. Description Page No.

1. Preface 1
2. Acknowledgment 2
3. Structure of Management 3
4. Growth of Sugar Industry in Pakistan 4
5. Group Profile 5
6. Board of Directors 6
7. Mission of FSML 7
8. Objectives 8
9. Introduction 9
9. Working Force 11
10. Products of the Company 12
11. Production 13
12. Main Departments 15
13. Departments at Site 16
14. Departments at Head Office 33
15. Banking Section 47
16. Data Administration 51
17. Organizational Incentives 55
18. Quality Management 57
19. Problems of Sugar Industry 59
20. Comments & Suggestions 60
PREFACE
This report describes the effort made by me for the learning by first hand practical experience about a business organization. Today is the era of experience as is said by quotation “Experience makes a man perfect.” No body can deny the importance of practical training and experience.
Through internship students get the first touch of professional exposure of the roles; they have to play during their professional careers. The students not only acclimatize themselves to the corporate environment but also learn to assume responsibility, co-operation and teamwork the hallmarks of modern management.
Having experience of sugar industry is really a good experience for me. I am submitting all my experiences. No doubt, omissions and errors are expected but it is requested to ignore the nominal errors.
I was lucky enough to have a chance of doing internship in Fatima Sugar Mills Limited, Fazal Garh, Sanawan, Kot Addu. I learnt a lot about the practical business and above all, the mental discipline and awareness, which are the most useful tools for an executive to raise the organizational structure.
M. Nasir

ACKNOWLEDGEMENT
First of all, I want to express all and thanks to ALMIGHTY ALLAH whose blessings are above each and every thing which make me able to present my tiny effort. All prays to Hazrat Muhammad (pbuh) who is the reason for creation of the universe and whose kindness came to my part.
Secondly on the successful completion of my internship program, I whish to express my gratitude and heart worthy acknowledgement to my teachers for full co-operation and helped me in completing this report. I feel utmost pride in acknowledging with sincere gratitude for the valuable guidance I have received from my respected teacher Mr. Rizwan.
He has been a constant source of enthusiastic encouragement through out the internship program. Due to his guidance I have become able to complete internship as well as this report. His advice, criticism and remarks were of the most value to me.
I am also thankful to following persons:
Mian Fawad Ahmed Sheikh Chief Executive
Mohammad Younus Executive Director
Major ® Qaiser Bajwa General Manager
Amer Haroon Financial Controller
Khalid Riaz Bhatti Manager Accounts
Abdul Majeed Chief Accountant
Furthermore all the other executives and staff members of Fatima Sugar Mills Limited, Head Office and Site deserve my thankfulness for their co-operation and guidance during the course my internship at Fatima Sugar Mills Limited. Finally I would like acknowledging the contributions by many other sources of information used in preparation of this report.

M. Nasir

GROWTH OF SUGAR INDUSTRY IN PAKISTAN
Sugar is the important sector of the Pakistan’s economy. Sugar industry plays a vital role for development of any country’s economy. In Pakistan this industry play a significant role for economic development.

HISTORY
The sugar industry, which is endowed with a strong base of sugarcane, had started its journey from almost non-existence in 1947. The industry has gone through a long way and now possesses 77 sugar mills in all over the country. The Sugar industry not only fulfills the entire local requirement but also sharing out the total foreign exchange earning.
At present Pakistan’s sugar industry is facing lot of problems like lesser demand of sugar in the country due to recession in the economy, declining prices into the domestic as well as international markets & huge unsold stock of sugar. Government role in R & D for developing the sugarcane varieties is not very significance; only few private institutions are doing some research in R & D in developing various varieties with higher yield.

GROUP PROFILE
The company has been sponsored by FATIMA GROUP OF INDUSTRIES in MULTAN. The sponsors are already engaged in the field of textile. Their company, Reliance Weaving Mills Limited has been awarded Best Performance Trophies in the field of export. The group engages the following companies and firms.
Sr. # Company Name
FATIMA SUGAR MILLS LIMITED
FATIMA FIBRES LIMITED
FATIMA TRADING COMPANY LIMITED
FAZAL CLOTH MILLS LIMITED
FAZAL WEAVING MILLS LIMITED
RELIANCE WEAVING MILLS LIMITED
RELIANCE EXPORTS LIMITED
RELIANCE FIBRICS LIMITED
RELIANCE COMMODITIES (PVT) LIMITED
RELIANCE COTTON (PVT) LIMITED
FARRUKH TRADING COMPANY (PVT) LIMITED
MUKHTAR TRADING COMPANY (PVT) LIMITED
RELIANCE COTTON (PVT) LIMITED
GADOON PACKING (PVT) LIMITED

BOARD OF DIRECTORS
Chief Executive Mian Fawad Ahmed Mukhtar
Directors Mian Fazal Ahmed Sheikh
Mian Faisal Mukhtar
Mrs. Ambreen Fawad
Mrs. Fatima Fazal
Mrs. Fadia Kashif
Mrs. Mehnaz Aamir
Secretary Amanullah Khan
Auditors M/s Hameed Chaudhri & Company
Banks Muslim Commercial Bank Limited
National Bank of Pakistan
Habib Bank of Pakistan
Head Office 2nd Floor, Trust Plaza, L.M.Q Road
Multan, Pakistan.
Phone No. Head Office (061) 4551203-2
Mills 066-2550512-13
Fax No. Head Office 061-4511677
Mills 066-2250514
Email: fatmagrp@mul.paknet.com.pk

MISSION OF FATIMA SUGAR MILLS LIMITED
To produce superior quality White Refined sugar.
To face competition in the Local & International Market.
Total Quality Management.

OBJECTIVES
Following are the objectives of company.
Total quality focus to meet customer’s requirements.
The highest standard of business ethics.
To care on the business ethics.
To carry on the business at best possible level.
To guarantee performance of contracts by members or persons having dealing with the company.

INTRODUCTION
INCORPORATION
Fatima Sugar Mills Limited was incorporated in 1988.
NATURE OF BUSINESS
Crushing of Sugarcane & Raw Sugar in to White Refined Sugar.
FIRST CRUSHING SEASON
Fatima Sugar Mills Limited starts its first crushing season in 1993-1994.
LOCATION
Fatima Sugar Mills Limited is located at Fazal Garh, Sanawan, Kot Addu.

HEAD OFFICE
Head Office of Fatima Sugar Mills Limited is located at 2nd Floor, Trust Plaza, L.M.Q Road Multan.

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.

MAIN COMPETITORS
Sheikho Sugar Mills Limited, Anwar Abad, Kot Addu.
Layyah Sugar Mills Limited, Layyah.
Ashraf Sugar Mills Limited, Bahawalpur.
Indus Sugar Mills Limited, Rajanpur.

WORKING FORCE
Detail of total working force at site and at head office is as under:

AT SITE
Permanent Employees 307
Temporary Employees 45
Seasonal Employees 437
Daily Wages Employees 20
Total 809

AT HEAD OFFICE
Permanent employees 32
Temporary Employees 16
Total 48

PRODUCTS OF THE COMPANY
The main product of the company is White Refined Sugar and also other sugar by products, which are as follows.
Molasses
Baggasse
Mud

White Refined Sugar
Major business of the company is to produce white refined cane sugar of intermission standard and from the erased cane and three different components are achieved that are fibber, Pith and Moisture.
In the last crushing season 2005-2006 the company also import raw sugar from India and other different countries of the world.

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 Fatima Sugar Mills Limited and also the main buyer of Molasses from whole the country.
Reliance Commodities (Pvt) Limited is the main exporter of Molasses in Pakistan.

BAGASSE
This is also a by-product of the company. It is also used in boiler but the entire Baggasse is sold to the Baggasse Contractors.

Mud
Mud is also the by-product of the company. It is sold to the Mud Contractors.

PRODUCTION
(50 kg)

PERIOD SUGAR BAGS
1996-97 810,000
1997-98 923,250
1998-99 970,435
1999-2000 871,450
2000-2001 2,696,740
2003-2004 2,890,000
2004-2005 28200000
2005-2006 3245300

MAIN DEPARTMENTS
Following are the main departments at Site and at Head Office.
AT SITE
MECHANICAL
ELECTRICAL
CHEMICAL
CANE
ACCOUNTS
COMPUTER
ADMINISTRATION

AT HEAD OFFICE
FINANCE
ACCOUNTS
EXPORT/IMPORT
ADMINISTRATION
PURCHASE
SALE
MECHANICAL DEPARTMENT
Mechanical department is the main department of any sugar mill. This department plays very effective role for crushing of sugarcane.

FUNCTIONS
The main function of this department is to control the whole plant & machinery. The main goal of this department is that the whole process is going through effectively and efficiently without any hurdle.
Mechanical department has qualified engineers who are very professional about their work. All the work is done under supervision of Chief Mechanical Engineer.

ELECTRICAL DEPARTMENT
Electrical department is also very important department of any sugar mill. This department plays very effective role for keeping the plant in running conditions.

FUNCTIONS
The main function of this department is to assist the mechanical department, with the help of this department; mechanical department has a better control on whole plant & machinery. The main goal of this department is to supply electricity to whole plant & machinery.
Electrical department has also qualified engineers who are very professional about their work. All the work is done under supervision of Chief Electrical Engineer.

CHEMICAL DEPARTMENT
Chemical department is another main department of any sugar mill. This department plays very important role for crushing of sugarcane.

FUNCTIONS
The main function of this department is to test the quality of sugar, with the help of this department sugarcane is crushed in to white refined sugar. The main goal of this department is to maintain a quality standard.
This department plays his role during whole the process because different types of chemicals are mixed in sugarcane juice for making the juice in to liquid shape. This department checks the quality during the whole crushing process.
Chemical department is working under very experienced person who has vast knowledge about chemical. All the chemists are very experienced and professional.

CANE DEPARTMENT
Cane department is the major department of any sugar mill. This department is purchasing sugarcane from growers.

FUNCTIONS
Cane department is working under General Manager Cane, who is a very experienced person and has a much more knowledge about sugarcane quality.
The main function of this department is the purchasing of sugarcane. The main goal of this department is to supply high quality sugarcane.
Main input of Fatima Sugar Mills Limited is the raw fresh sugarcane. To control the different activities of purchase of sugarcane, cane department play very important role.
This department has purchased sugarcane from different villages of the country. Cane field officers are surveying regularly and motivate growers. This department opens depots in different villages for purchasing of sugarcane. In Punjab a number of small grower’s exit and yield different varieties of sugarcane that profitable to the growers. Cane department also play very important role for granting a loan to the growers in the shape of seed, fertilizer and machinery, which has to be returned in the shape of supply of sugarcane to the respective mill.
Before start of crushing season, cane department of Fatima Sugar Mills Limited arranges a survey of the growers of surrounding area of the mill for the availability of sugarcane. They collect data about varieties, quality and quantity that would be available during the season.

CANE ACCOUNTING
After receiving sugarcane from the grower, process of payment starts. Cane accounts generate the payment that is sent to the banks for disbursement.
Cane accounts generate the following output from cane accounting package.
Grower Ledger
Cane Payment
Contractor Register
Loan Register
Daily Cane Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All the printed data sent to Head Office on daily basis. Payment to grower is made through bank after getting approval from Head Office, in case of emergency sometimes payment is to be made at Head Office, but during routine, payment to growers is done at site through bank.
ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business transactions into books of accounts. With the help of this department, we should know the actual position of the company about profit or loss. Accounts department is working under Chief Accountant, who is a very experienced person.

FUNCTIONS
The main function of this department is recording & classifying all transactions into books of accounts, keeping whole record of the company about payments, receipts, profits & losses. The main goal of this department is to work effectively & efficiently within the accounting standards all the time. Main Accounts Department also supervises the Cane and Store Accounts.
Normally Accounts Department performs following activities:
Maintaining Records
Keeping Accounts Record of All Departments
Payment of Wages & Salary
Store Accounts
Cane Accounts
Dealing With Banks
Tax related matters
Stock Position
Stock Taking

CANE ACCOUNTING
Main Accounts Department also supervises the Cane Accounts. This department deals with following matters:
Keeping Sugarcane Purchase Record
Keeping Record for Growers
Arranging payment for growers
Recovery of Advances from Growers

STORE
Main Accounts Department also supervises the Inventory / Store Department. Inventory means stocks of things and items, which are used with in the company for producing goods, and finished goods offering for sales. Inventory can be divided into following four groups:
Raw Material
Work in Process Inventory
Finished Goods Inventory
Spare Parts Inventory
For effective control over the company’s inventory, it is necessary that overall work should be done under Accounts department.
It is very important for store that it has to maintain sufficient stock of all the related parts / goods to make the factory continue its production and functions of other departments without any hurdle. This department receives the demand from various departments and then arranges the required goods / items.
When demand of items / goods received, then following process starts.
Purchase Requisition received at store, through relative department’s head, which contains item’s name & quantity.
Store Incharge checks the required material/items and issue to relative department according to demand, if required material/items currently not available in store, then Purchase Incharge makes the purchase indent for required material/items.
Purchase indent sent to the Purchase Department at Head Office after getting approval from General Manager at Site.
Purchase Department collects quotations from different listed sellers.
Purchase Manager compare all quotations and send summery of favorable rates to Chief Executive for approval.
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.
Delivery of required items at Site through supplier’s own vehicle or through rented vehicle on company’s expenses according to the contract.
Gate Inward sent to store, which contains complete report about Quantity of Material/Goods, Bilty No., Vehicle No., Supplier name.
Store Incharge checks the material/items, if any item is not according to demand then this item sends back to supplier, if material/items are according to demand then store incharge issue Inspection Report.
After issuance of Store Inspection Report then Store Incharge issue Goods Receiving Report which clearly shows the complete detail about material/items.
When any item or material has to go out from store for any purpose then gate pass is used, which contains quantity of item/material, purpose for going and name of the person taking it.
All the above-mentioned documents have three copies. First copy hold down at Store, Second copy is hand over to the seller and third copy sent to accounts department.
Store’s issue material/items to various departments according to their demands and then posted all transactions into accounts. At the end of each month store consumption is sent to head office.
Normally accounts department sends all record to head office on daily basis, but they are maintaining some record at mills, which is necessary for routine work and for reconciliation purpose.
COMPUTER DEPARTMENT
Now a day’s computer plays very effective role in all fields of life. At present all sugar mills in Pakistan are using various software’s. Computer department of Fatima Sugar Mills Limited is working under Incharge Computer operator, who is a very efficient person and have a vast experience about different software’s.
There are two departments in which computer is being used in Fatima Sugar Mills Limited (site), which are as follows:
Cane Department
Accounts Department
Main input of the Fatima Sugar Mills Limited is the raw sugarcane. To control the different activities of purchase of sugarcane, computer is very much helpful. Growth of sugar industry has brought about certain changes that demand application of modern computer application in operations of growing sugar mills.

CANE DEPARTMENT
CANE APPLICATION
In cane application, computer is playing its role in a very superlative manner. It is good sign for the company keeping the record of each grower and give recommendations on the basis of given parameters.
CANE LOADING & PROCUREMENT
Before starts of the crushing season, cane department of Fatima Sugar Mills Limited arranges a survey of the growers of surrounding area of the mill for the availability of sugarcane. They collect the data about varieties and quantity that would be available during the season.
This data is posted in to the computer to accommodate each and every grower during the season for the supply of sugarcane to the mill.
Following reports are generated from cane application software.
Survey
Agreed Cane
Schedule Summery
Village wise Procurement Summery
Circle wise Procurement Summery
Point of Purchase Summery
Indent Printing
Work Order Printing
CANE YARD MANAGEMENT
Sugarcane comes to the mills in different ways, which are as follows:
Grower brings the sugarcane on his own vehicle
Grower brings the sugarcane on rented vehicle
Sugarcane comes through the purchasing centers on rented vehicles.
When sugarcane reaches the factory gate then cane yard management starts. Cane yard management produces the following information:
Weighting of sugarcane
Recording the Weight
Recording the Vehicle Number
Recording the Date
Printing of CPR’s
Daily Crushing Summery
Contractor wise summery
When sugarcane enters in the mill, first of all its weight is checked at weighbridge, then this weight is posted into computer and gives a CPR to the grower.

CANE ACCOUNTING
After receiving sugarcane from the grower’s process of payment starts. Cane Accounting Package generates the payment that is sent to the banks for disbursement.
Following are the main reports generated from Cane Accounting Software.
Grower Ledger
Cane Payment
Contractor Register
Loan Register
Daily Cane Purchase & Receipt Summery
Cane Accounts Department is working under Main Accounts Department. All the printed data sent to Head Office on daily basis. Payment to grower is made through bank after getting approval from Head Office, in case of emergency sometimes payment is to be made at Head Office, but during routine, payment made to growers at site through bank.
ACCOUNTS DEPARTMENT
Accounting software is also used in Accounts Department. All the transactions are posted into computer. When any voucher/report required, that can print out very easily.
ADMIN DEPARTMENT
Admin department is the department, which is dealing matters about administration. This department plays very important role for maintaining discipline in the mills. Admin department is working under Admin Officer, who is a Retired Captain of Pakistan Army and has much more experience about administration matters.

FUNCTIONS
The main function of this department is to handle all the administrative matters and maintaining discipline in the mills. The main goal of this department is to provide easy working environment in mills. This is very important department of the organization as the name shows; this department has to administer all the operations of the organization. Sections of this department are divided into offices as under:
Gate Office
Time Office
Security Guard Office
Labor Office
Gate Office
This office has been made to keep the record of each and every thing coming into and going out of the mills gate.
For this purpose gate office clerk maintains two type of registers called;
Outward going pass register
Inward going pass register.
When every thing including raw material, stores supplies, or any other thing comes into the mills premises a document named as I.G.P is made in which information like date of supplier, description, quantity of the material and any other remarks are written. In the same way, O.G.P is prepared for out going things etc.

Time Office
This office keeps and maintains the time record of all the workers on time cards and pay register for the final costing of the workers salaries.
It keeps the attendance records, which is than used to calculate the salary to be paid to the workers on monthly basis.
It keeps the records of the over time, leaves, number of days worked of all the workers and than calculate their over time on the basis of the basic salary of each worker.
It keeps the records of Social Security, EOBI, Education Cess etc. of each employee / worker payable to government treasury.
It keeps the records of Gratuity, Bonus, Pensions and other benefits including CPL (Cash Paid Leave) to each employee / worker of the organization.

Security Guard Office
The main objectives of the security office is to safe handling of the goods from / to the mill premises. For the achievement of such objective a team of security guards has been employed by the company. All the keys relating to the mills office, labor colony, (quarters) are lying into the responsibility of the security officer.
No out side visitor can come into the mills premises without the permission of the security guards.
Whenever any visitor wants to enter into the mill, security guards firstly contact with the authority in the mill to grant the permission to enter into the mill premises.
Security guards can check each and every person before coming in or going out of the company gate for the security purposes.
They see and check the outward going pass of the certain things when these ought to bring out of the mill premises.
They are in uniforms of dark green color.
They are the guardians of the every thing of the company.

Labor Office
As required by the labor department of the Government of Pakistan, that this office has been setup to deal with all the matters that are related with labor. The labor officer is the head of the Labor Office. He is responsible to resolve all the disputes, conflicts, misunderstandings and any other hind of matter, which may arise from time to time between the labor and the immediate supervisor, or with any other person in the organization.
It is the duty of the labor officer to inform the legal requirements concerning the labor and company affairs.
It is also the duty of the labor office to satisfy himself regarding payment of bonus, gratuity, and other benefits to labor and to keep their morale and motivational level high. It is also a requirement to be a successful labor office that he should keep his knowledge up to date regarding the rules and regulations of the labor department.

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 Financial Controller, who is a Fellow Member of Institute of Chartered Accountants of Pakistan and has vast experience about financial matters.

FUNCTIONS
The main function of this department is to get Cash Finance and Running Finance, according working capital requirements, from different Financial Institutions against pledge of sugar stocks. This department also performs following activities:
Financial Planning.
Fund Raising.
Managing Cash & Credit Activities.
Capital Expenditure Decisions.
Analyze the Financial Information.
Evaluation.
Short Term & Long Term Financing.
Finance department analyzes the financial information and then presents them into proper form, so that financial position of the company can be properly viewed. Finance Department evaluating and determining about required additional finance. All the functions are based upon Balance Sheet, Income Statement and other Financial Statements.

ACCOUNTS DEPARTMENT
Accounts department is the department, which is recording all the business transactions into books of accounts. With the help of this department, we should know the actual position of the company about profit or loss. Accounts department is working under Manager Accounts, who is a Chartered Accountant of Pakistan.

FUNCTIONS
The main function of this department is recording & classifying all transactions into books of accounts, keeping whole record of site and head office. The main goal of this department is to work effectively & efficiently within the accounting standards all the time.
Main duties of Accounts Department are as follows:
Maintaining Records
Keeping Accounts Record of All Departments
Payment of Wages & Salary
Dealing With Banks
Control of Funds
Cash management
Payment of Bills and Charges
Receipt of Cash
Tax Matters
Cash Flow
Arrangement of Heavy Funds
Preparation of Final Accounts
Analysis of Reports
Provides Reports for Assistance in analysis to top management decisions.
We can say that this department acts as a nervous system. Every matter is first brought in the knowledge of the head of this department, then he take appropriate action according to the situation. The members of this department are every experienced.

INCOME TAX MATTERS
As required by the tax authorities of the Govt. of Pakistan, whenever the company makes purchases from the supplier, gets services on contract or on commission basis, the amount paid to the party is tax deducted. When the company will make the payment to the party (supplier, contractor or commission agent) it will deducted the tax from the amount to be paid to them.
Tax deducted are payable to the Income Tax authorities. When the company makes the payment of this tax, a Tax Challan is filled and prepared by the section and after payment it is filed into the tax Challan file after debiting the tax payable. The sellers, contractors and agents from this section then receive these challans for their official uses.
SALES TAX MATTERS
Sales Tax is deducted from sellers at the time of sale. The company also pays the sales tax to the suppliers, but this sales tax has claimed as refund and it is to be adjusted from total amount of Sales Tax payable, then remaining payable amount is to pay to the Sales Tax Department.

SALES TAX REFUND PROCEDURE AT FSML
When the company makes the purchases of the raw material and other items with the value of the goods, it also pays the sales tax; this tax is called the out put tax.
When the company sells the sugar or other by-products it receives the amount from the buyer including the sales tax this tax is called input tax.
As stated earlier when the company’s out put tax is greater than the input tax it has the tax receivable amount in positive side and it has the facility to get the tax refund from the sales tax authorities.
The sales tax return Challan is filled in which the in which the information are written relevant to the tax payable and receivable. The sales tax refund claim can only be made for the period one month before the 20th of the next month so the sales tax section to work in accordance with this requirement.
Following documents are also prepared and presented to the sales tax authorities if and when required:
Bills of the entry / tax invoices indicating the purchases.
Bills if exports indicating the exports, their receipts, dated and evidence from the custom authorities of the goods exported.
Sales tax returns photocopies of the last three months.
Photo copies of the sales tax registration / application.
5. Photo copies of the purchases, supply (I.G.P & O.G.P).
EXPORT/IMPORT DEPARTMENT
Export/import department is the department, which is dealing matters about import or export. With the help of this department, required material can be imported or exported. This department is working under Export Officer.

FUNCTIONS
The main function of this department is to open L/C’s in different banks according to requirement of purchase department. The main goal of this department is to work effectively & efficiently all the time.
Normally this Department performs following activities:
Opening of L/C’s.
Clearance of items/material.
Keeping Record of import/export documents.
Dealing With Banks about export/import matters.
EXPORT ORDER EXECUTION
PROCEDURE
INQUIRY
Customer inquires are received via Telex, Fax and Letters. These are directly sent to Chief Executive for review. After Chief Executive’s review, these are sent to department Incharge. After careful analysis, these inquires are replied after Chief Executive approval.
COSTING
Costing sheet prepares for Chief Executive’s approval. In absence of Chief Executive’s department Incharge approves price.
COSTING APPROVAL
Chief Executive’s gives approval or may suggest any other price to be offered.
CONTRACT REVIEW & ISSUE
Section Incharge takes following steps before issuing a contract:
Prepare contract review check sheet.
The requirements are adequately defined and involvements of production areas are specified.

In-house / Out-house, have the capacity to meet the order requirements.
PRICE QUOTATION
In getting approval of costing and review of customer’s requirements, prices are quoted to customers for confirmation.
CONFIRMATION OF SALE CONTRACT
If customer confirms the price offered, sale contract is issued to the customer with complete details of price, quality, delivery, payments terms etc.
LETTER OF CREDIT (L/C)
Customer establish / opens L/C well before shipment time. In case of delivery in receipt of L/C, concerned section Incharge reminds customer. After receipt of L/C, these are checked with regard to ordered goods, prices, shipment details, marketing, shipment negotiation elates etc. Discrepancies in L/C are noted and informed to customer for ratification.
DISPATCH OF GOODS
Molasses is dispatched to the customers. If the shipment is to be custom cleared from Karachi, goods are sent to Karachi on trucks with all necessary records. Dispatched goods are detail noted in relevant registers.
IMPORT OF GOODS/SPARE-PARTS
PROCEDURE
Procedure mentioned above reversibly used for import.
PURCHASE DEPARTMENT
Purchase department is the department, which conducts all the purchase for head office and site. This department plays very important role for maintaining discipline in the mills. Purchase department is working under Manager Purchase, who is B.Com + C.A-Articles.

FUNCTIONS
The main function of this department is to purchase Spareparts, Store Material, Chemicals, P.P Bags etc. The main goal of this department is to purchase required items at convenient rates.
This department conducts all the purchases. There is also a Purchase Assistant in this department to keep the records. Whenever any particular department requires any part of material/goods, its head makes a demand of items to be required. This demands contains the information like, items description, quality, quantity and others. The departmental head signs the demand and sent to the purchase department, then purchase department sent it to Chief Executive for final approval.
The Manager Purchase has the list of preferable suppliers of the certain items. When any item is required, first he get rates from market though purchasers, then he compare market rates, and making a purchase order of the supplier which provide the material/items at convenient rate after obtaining verbal or written approval from the Chief Executive.
Purchased material sent to the mills premises through rented vehicle or the supplier is sending material/items according to the contract.
In Purchase Department work is done according to the following process:
1. Purchase Requisition received from store of site or head office, which contains items code, items description and balance in the store.
2. Purchase Department sends this requisition to Chief Executive for approval.
3. Purchase Department collects quotations from different sellers after approval from Chief Executive.
4. Quotations are compared and summery sent to Chief Executive.
5. Purchase Order is prepared for required material / items after getting approval from the Chief Executive.
6. Delivery of required items to Site Store / Head Office Store.

SALE DEPARTMENT
Sales department is the department, which deals the sale of sugar and other by-products. Sales department is working under Sales Officer.

FUNCTIONS
The main function of this department is the sale of sugar, molasses, baggasse & mud. The main goal of this department is to sell the stock at best available market price. To keep the record of sale of sugar and other by-products Computer Software is used. All transactions of sale are posted daily in computer.
Following record are maintain by Sale Department:
Sales Register.
Stock Reports.
Delivery Orders.
Invoices.
Sales Tax Detail.
Parties Position.
In Fatima Sugar Mills Limited normally all the sale is done through agents. There are three main parties of sale; all sales are done through these parties. Delivery Orders are sent to site according to contract. Without delivery order godown incharge cannot dispatch the sugar bags.
BANKING SECTION
The Company kept Current Accounts almost in every bank, but most business is routed through these banks, which are as follows.
Allied Bank of Pakistan Limited
National Bank of Pakistan Limited
Muslim Commercial Bank Limited
Habib Bank Limited
United Bank Limited
Bank Al-Falah Limited
Emirates Bank International
The company has also kept Loan Accounts in all above-mentioned banks. The company has routed its most of the import business from Allied Bank of Pakistan Limited, most of the L/C’s are opened in Allied Bank of Pakistan Limited.
The company is also availing Cash Finance Facility from the above mentioned banks against pledge of sugar bags. Normally at the beginning of the crushing season sugar bags are not sold in market, because these bags are used against Cash Finance Facility from banks. Cash Finance is the main source of the company when there is a shortage of funds.
The company has also availed Short Term & Long Term Finances from following banks.
Investment Corporation of Pakistan
Allied Bank of Pakistan Limited
National Bank of Pakistan Limited
Muslim Commercial Bank Limited
Habib Bank Limited
United Bank Limited
This section is the very important part of the Accounts Department. All the functions that are related to the banks are done in this section. Key functions of the section are as under:
Preparation of Bank reconciliation statement.
Treatment of the bank’s debit and credit advices.
Preparation of Demand Drafts, Telephonic Transfers, Pay Orders, Cheques with reference to payments to the parties.

BANK RECONCILIATION STATEMENT
Some banks of the company sends the statements of the accounts to the company on daily basis and some sends at the end of every month or on the demand of the company from time to time. This statement has all the records of transactions between the company and the bank during that specific period.
Accounts department reconciles the bank statements with accounts, some time due to some reasons, transactions do not equally matched with the company’s records. Reasons are as follows:
Cheques issued by the company to any party but not still presented to the bank for payment.
Cheques deposited but not cashed or canceled due to some reason.
Any amount debited or credited by the bank but not treated in the company’s accounts.
All these missing items are required to be settled in the company’s accounts.

DEBIT & CREDIT ADVICES
Banks sends debit and credit advices to the company according to the transactions. These advices are the reflection of the transactions between the company and the bank.

When any amount is deducted from the company account due to any reason like:
Deduction of Bank Cheques.
Payment of any amount to any party on the behalf of the company.
The adjustment of loan.
For these amounts, the bank made the Debit Advice, means that certain amount has been deducted from the company’s account, and sends it to the company. Ultimately the company considered these as the expenses and deducts this amount from the banks ledger. Accounts department credits these amounts to the banks ledger through the B.D.N Voucher (Bank Debit, Credit Note), this voucher is firstly signed by Accountant, secondly by the Chief Accountant, thirdly by the Financial Controller, fourthly by General Manager, fifthly by Internal Auditor and at the end this voucher sends to Chief Executive for final signature.
Moreover, when the bank adds any amount in the company’s account due to some reason like:
Re-imbursement of loan / refinance.
Depositing of any amount in the bank by the company.
Depositing of any amount in the bank from any party in the company’s deposits.
Mark-up on the company’s deposits.
For these, the bank sends the Credit Advice to the company, means that the certain amount has been added to the company’s account and sends advice to the company. The company add this amount to the banks ledger. Accounts department debit these amounts to the banks ledger through B.D.N Voucher (Bank Debit, Credit Note), this voucher is firstly signed by Accountant, secondly by the Chief Accountant, thirdly by the Financial Controller, fourthly by General Manager, fifthly by Internal Auditor and at the end this voucher sends to Chief Executive for final signature.

LETTER OF CREDIT
One of the most important functions of the commercial banks in the world is to finance the imports and exports trade. There are several ways of financing international trade, of all the methods available at present, the documentary letters of credit are most important because they undertake the beneficiaries to obtain money either immediately or within a set period; provided the beneficiary fulfills the conditions lay down in the letter of credit.
Article – 2 of the uniform custom and practice for documentary credit (brochure 500) of the international chamber of commerce (ICC) defines the documentary credit as under.:
“Any arrangement, however, named or described, whereby a bank (the issuing bank), acting at the request and on the instructions of a customer (the applicant) or its own behalf is to make payment to or to the order of a third party (the beneficiary), or is to accept and pay bills of exchange (draft/drafts) drawn by the beneficiaries, or authorizes an other bank to effect such payment, or to accept and pay such bills of exchange (draft/drafts), or authorizes an other bank to negotiate, against stipulated documents, provided that terms and conditions of the credit are compiled with.”
From the above definition it means that a documentary letter is a bank’s written undertaking given to the exporter for payment of a certain amount of money on behalf of the importer provided the exporter tenders to the bank or its overseas agent, the specified document within a specified period in accordance with the terms of understanding.
DATA ADMINISTRATION
Business environments are becoming more and more complex with the passage of time. The cope with changing environment and modern technology, a lot of energy & knowledge is needed. Media and information technology are of utmost important and discoveries in the computer technology have been made in the past few decades.

SOFTWARE SPECIFICATION
FSML got their system development in FoxPro Language. FoxPro is a very powerful language. They have following systems computerized.
Accounts system
Sales System
Purchase System
Store System

HARDWARE SPECIFICATION
AT SITE
ACCOUNTS DEPARTMENT
Main Server Pentium-III
Four Clients Pentium-I
Printer LQ-2170

SALE DEPARTMENT
Main Server Pentium-III
Client 486
Printer LQ-2170

PURCHASE DEPARTMENT
1. Main Server Pentium-III
2. Clients Pentium-I
Printer LQ-2180

AT HEAD OFFICE
In FSML, they are using network computer system. Their terminals are network through networking. They have nine terminals on the whole.
All the terminals are dumb terminal and the centralized processing machine in installed in the office of manager MIS dept.
They are also using two personal computers for documentation that is not related with their computer system.

Presentation of Reports
No one system can said computer until it generals certain reports. So the system of FSML is also generating a broad no. of reports. Following are some important reports produced by this system;
Listing of all master files
Listing of all ledgers files
Sub ledgers
Edit lists
Due balances
Day Book
Purchase day book
Sale day book
Trail Balance
Cash Book
Monthly Balances
Outstanding Cheques
Trail Balance
Monthly Profit & Loss Account.

Data Flow
In FSML, they are using Online System. In accounts dept. they are using four vouchers. These vouchers are as follows;
Journal Voucher
Bank Voucher
Debit Voucher
Credit Vouch
Following are the files that are being maintained there;
Char of Account
Employees
Buyers
Suppliers
Banks
Letter of Credits ( for Sale & Purchase )
The data about any voucher flow in a way that first of all, it comes to Keypunch Operator. He recognizes the type of voucher i.e. JV/BV/DV/CV. After recognizing the type, he assigns a specific code to the voucher depending upon that with which entity this voucher is related. After the Keypunch Operator has assigned the code to the voucher then the accountant checks that whether the voucher is assigned the right code or not. In no, than it is sent check to the K.P.O to correctly assign their code to the voucher. If yes, then it is again sent to the K.P.O to key input that voucher. Then edit list is displayed on the accountant’s screen and he checks the voucher entry. If the finds any error in the entry he asks backs the K.P.O to make the entry correct. If there is no error in inputting the voucher then it is sent to be stored in the hard disk.

Data Security
The issue of data security is crucial in the era of centralized database. We use the term “data security” to mean protection of the data in the database against the unauthorized or accidental disclosures, alteration or destruction. Realizing that perfect security is unattainable, the objective of data security is to minimize the risk and probability of loss and disclosure to the lowest affordable level.
There, in FSML, they are securing their data in following ways;
Backup
Protecting from unauthorized access
Watchman
UPS (Un-interruptible Power Supply)
Stabilizer
We have already described that FSML is being running their computer network under the environment of VM.s / CMs Operating Systems. Their Operating Systems provides them he facility to set different level passwords. Each level may be allocated different rights that are pre-specified. They are using five levels of data securing and only the authorized person can access the system up to the extent they have authority. These levels are as follows;

System Level Security
This is highest level of security. It has all the possible rights. It has access to change the different operating system protocols. It can change the different passwords. It can modify the level of rights given to different users. In FSML, M. Tahir, 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.

Programmer Level Security
The next lower to the manager level is the programmer level. In this regard the programmer of the organization can make any modification in the source program of the system. The manager of MIS Dept. FSML also holds this level.

User’s Level Security
This is also called the K.P.O level. At this level user of the system have the minimum rights. Their main work is to input the data and to generate different reports.

ORGANIZATIONAL INCENTIVES
Although the FSML has no formal human resource department (HRD), 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 a sum equivalent 60% basic salaries of worker at the end of the every accounting year in case of report earning.

SOCIAL SECURITY FACILITY
The company deducts a nominal amount in the account of social security from the salaries of the workers on monthly basis. This deducted amount is submitted to the social security and they allot a social security number with an identification card, which shows that the worker had got the facility of social security. Major advantage provided through social security number is the free health care including medical and surgery facilities from the specified social security hospitals.

E.O.B.I(EMPLOYEES OLD AGE BENEFITS INSTITUTION)
This is an important deduction from the salaries of the workers for the regular income in the old age / post retirement age so that workers have a thought of relief that there would be no financial problem after the expiry of his employment. EOBI is an institution where this deducted amount is accumulated for the future use when these people will not be able for employment.

HOUSING FACILITIES
The workers have provided with the residential facilities and small quarters are provided to the workers. These quarters are often visited by the resident director for the checking of cleanliness and other important matters if raised by any situation from the workers side.

TRANSPORTATION FACILITIES
As the Mills is located at 10 KM on Khanewal Road, which is far from Multan city. So the company provides transportation facilities for its workers and employees at limited level.

FOR SCHOOL CHILDREN
School Children of the housing area of the factory are provided with a KIA Van for transportation on both sides from factory to their schools.

COMPANY CANTEEN
Company has given the provision of a canteen / café-teria for its workers and employees. I provided food and refreshment items to the workers on very cheap rates. The quality of the food available in the factory canteen is under the supervision of the labor officer.

BIG LUNCH
According to this scheme, company gives lunch to all its workers / employees at Mills, once in every month.

LOAN TAKING FACILITY
The company has provision for loan to its workers / employees. The workers / employees refund this loan in installments. These installments are deducted from their respective salaries.
QUALITY MANAGEMENT
The ISO 9000 is major consideration for the every type of organization and especially for the textile industry. No firm can export its products in future without ISO 9000 certification. Realizing the situation organization is analyzing the situation for necessary actions. This discussion includes following topics:

ISO 9000
ISO 9000 Quality System standards are currently, one of the highest criteria of quality in the world trade. Up to now more than 60 countries in the world have officially adopted this standard. The European Community (EC) is the most active region in prompting them. Presently companies that produce regulated products, such as medical devices, must be registered. The EC encourages all products to register their products.

QUALITY MANAGEMENT IN PAKISTAN
The industrial culture in Pakistan is undergoing changes from traditional information management to modern formal management. With the wide spread establishment of management schools, increasing collaboration with international companies and deregulation policies of government, the management crises in industries is minimizing. The industries are expanding an people are looking more and more into new avenues for exports. Due to this phenomenon, the competition in both local and export market is increasing.

WHAT IS ISO 9000
The ISO 9000 (International Organization for Standardization), is a worldwide federation national standards bodies that prepares and issued standards. The ISO 9000 series was issued for the first time in 1987 and has had a great impact on the manufacturing industries. They establish requirements for Quality Assurance and Quality Management System of manufacturing, services and other organizations. They do not refer to any specific technical specification of products. The elements that are described in them cove: organizational structure, personal responsibilities, authorities, training organizational channels, procedures, documentation and records process control and resources allocation for production and all related departments that directly affect product quality.
These standards are generic and apply to all types and sizes of companies. However, they are written in general terms. While applying these standards to a company, they must be interpreted professionally to suit the applicability. Clear concepts, professionalism, and involvement of all employees (from top to the very bottom) are required.
The basic aim of ISO 9000 is to provide a management framework to prevent “Non-Confirming” in every stage. From design through to after sale servicing. A minimum framework is provided for a quality management system to ensure a basis for contracts between purchaser and suppliers.
ISO 9000 registration is given only after assessment by an approved registration body. There are a number of bodies operating worldwide. A company seeking registration is free to choose any accredited registration body.
After a company applies to a registration body, its Quality Auditors, whom are specialist in this area, formally visit the plant, interview personnel, evaluate the plant, and if it complies with the standards, issue a certificate to the company.

PRACTICES FOR ISO 9000
Being an export oriented organization as more than 80% of total of the company are of export nature. So company’s most dealings are in international market. Main buyers are Japan, Korea, Taiwan & U.A.E.
International purchases are very much conscious about the quality and they prefer the supplier who have either implemented the quality control or trying to do so.
So ISO 9000 certificate is very much important to compete in international market, to increase exports of the company as well as the country to have sound foreign exchange reserves, which are very critical factor for an economy.
In FSML, they share still not recognized the need for ISO 900 certificate. The reason behind this is, that the quality certificate ISO 9000 is the requirement of EC i.e. EC EURPOIAN country, while the company’s main buyers are Japan, Korea, Taiwan. But it is necessary for the company to run a comprehensive program of quality achieving and maintaining.

RATIO ANALYSIS
LIQUIDITY ANALYSIS
NETWORKING CAPITAL RATIO
Year 2004 2005
Current Asset 224290711 503118870
Current liabilities 249930033 619463159
NWC 25639322 116344289

CURRENT RATIO
Year 2004 2005
Current Asset 224290711 619463159
Current liabilities 249930033 619463159
Ratio 0.89:1 0.812:1

QUICK RATIO
Year 2004 2005
(CA-INV) 176241782 150200878
Current liabilities 249930033 619463159
Ratio 0.7:1 0.24:1

CASH RATIO
Year 2004 2005
Ratio 0.09:1 0.009:1

ACTIVITY RATIO
INVENTORY TURNOVER RATIO
Year 2004 2005
CGS 604089035 2387843626
Inventory 48048929 352918000
Ratio 12.57 6.76

AVERAGE AGE OF INVENTORY
Year 2004 2005
AAI 360/12.57 360/6.76
Ratio 28.6 53.25

AVERAGE COLLECTION PERIOD
Year 2004 2005
ACP 3133739/2256826 20644760/6920908
Ratio 1.38 2.89

ACCOUNT RECEIVABLE TURN OVER
Year 2004 2005
A/RTO 360/1.38 360/2.98
Ratio 260 120
OPERATING CYCLE
Year 2004 2005
Operating cycle 1.38+28.6 2.98+53.25
Ratio 29.98 56.23
CASH CONVERSION CYCLE
Year 2004 2005
CCC 29.98-5.91 56.23-1.09
CCC 24.04 55.14

AVERAGE PAYMENT PERIOD
Year 2004 2005
APP 8675929/1466468 7390871/6736804
Ratio 5.91 1.09

ACCOUNT PAYABLE TURN OVER
Year 2004 2005
A/PTO 360/5.91 360/1.09
A/PTO 60.91 330

FIXED ASSET TURN OVER
Year 2004 2005
FATO 812457543/644644379 2491526879/602625379
Ratio 1.26 4.13

TOTAL ASSET TURN OVER
Year 2004 2005
TATO 812457543/880682087 24915267879/1117663503
Ratio 0.92 2.229
DEBT ANALYSIS
DEBT RATIO
Year 2004 2005
Debt Ratio 619990432/880682087 928967379/1117663503
Ratio 0.7 0.83

DEBT EQUITY RATIO
Year 2004 2005
DER 370060399/260691655 309504220/188696124
Ratio 1.4 1.6

TIME INTEREST EARNED RATIO
Year 2004 2005
T.I.E.R 191923537/65960804 53316779/121874095
Ratio 2.90 times 0.43 times

PROFITABILITY ANALYSIS
GROSS PROFIT RATIO
Year 2004 2005
GPR 208368508/182457543*100 103683253/2491526879*100
Ratio 25.6% 4.16%

OPERATING PROFIT RATIO
Year 2004 2005
O.P.R 191923537/812457543*100 53316779/2491526879*100
Ratio 23.6% 2.13%

Cash from operating activity Rs. Rs. Rs.
Earning before interest and tax 52622125
Less taxes 6189
Earning after interest and tax 52615936
NON CASH EXPENSE
+ Accumulated depreciation 45466558
Total 98082494
CHANGE IN ALL CURRENT LIABILITIES
+ Current portion of redeemable capital (5198226)
+ Short term finances 295703363
+ Creditors 79027989
Total Cash Provided By 369533126
Change in current assets other than cash and market securities
+ Stores (8370733)
+ Stock (304869071)
+ Debtor (17511021)
+ Advances 33365214
Total (297385611)
72147515
Cash providing by operating activity 170230009
INVESTMENT ACTIVITY
+ Change in gross fixed assets (34475589)
+ Change in long term liabilities 267043
+ Change in long term deposit (439300)
Cash used by investing activity (3619815)
FINANCING ACTIVITY
+ Change in stock holders equity 0
+ Change in redeemable capital (61911973)
+ Change in deferred liability 1355799
+ Interest payment 124611467
+ Dividend 0
Cash used by financing activity (185167646)
+Opening balance of cash & M/S 24709462
Ending balance of cash & M/S 6152010

INTERPRETATION
LIQUIDITY ANALYSIS
Liquidity ratio refers to the ability of an organization to meet its current obligations as and when they come due.
Net working capital is positive in 2006, which is Rs.116344289. The net working capital indicates that current assets are being financed through long-term debts. Current assets are less productive and long-tem debts are costly source of finance. So by using costly source of finance in less productive asset will lead to low profitability and on the other hand positive net working capital suggests that company is able to meet it short terms obligations on time and there is no fear for its technical insolvency. So the risk of insolvency is low and profitability is low.
Current ratio shows that the company has less then Rs1.current assets against the current liability. The situation is very poor and not satisfactory. Quick ratio is good but cash ratio is very poor. Over all the situation of the company with respect to liquidity analysis is very poor.

ACTIVITY ANALYSIS
ACTIVITY RATIO
Activity analysis is used to measure the speed at which current account can be converted into sales, efficiency, or effectiveness with which a firm manages its resources.

INVENTORY TURN OVER
Inventory turn over ratio has not improved in 2006 as compared to 2005. It shows that the company is able to convert its inventory in to sales quickly.

AVERAGE AGE OF INVENTORY
Average age of inventory has improved in 2006 which is the negative sigh and will result in reduce profitability as it involves storage and opportunity cost.
AVERAGE COLLECTION PERIOD
Average collection period has improved in 2006 as compared to 2005. Operating cycle of the company has increased. So more cash is required to finance the operating cycle.
AVERAGE PAYMENT PERIOD
It has reduced in 2006 which is favor able so the cash conversion cycle of the company has also increased. So company will take the longer time period to convert its account receivable into cash.

ACCOUNT PAYABLE TURN OVER
It also improved in 2006 as compared to 2005.

ACCOUNT RECEIVABLE TURN OVER
It has decreased in 2006 as compared to 2005.

FIXED ASSET TURN OVER & TOTAL ASSET TURN OVER
Both have increased in 2006 as compared to 2005, which is very good sign.

PROFITABILITY ANALYSIS
Gross profit ratio has decreased in 2006 as compared to 2005, and also operating profit ratio. It shows the worst condition of the company. The company has loss in 2006.
PROBLEMS OF SUGAR INDUSTRY
Quality of sugarcane is not very good, because of lack of research in this sector.
Role of Government in developing varieties of sugarcane is not very significant; only some private institutions are doing some research in developing various varieties for higher yield.
Government’s wrong policy for import of raw sugar.
Heavy duties on export of sugar.
Instability of exchange rate also creates problems for exports and imports.
Increase in cost, due to Government policy of increasing prices of sugarcane, furnace oil & electricity.
Low sale price of sugar in the market.
Higher rate of mark-up on Finance Facilities.
Lack of institutional finance for modernization efforts.
SWOT ANALYSIS
STRENGTH
Having a professional management.
Friendly and cooperative working environment.
Technical know how and well qualified staff.
Better financial resources.

Weaknesses
Lack of research and development.
Lack of market survey

Opportunities
Entering into new markets
New government and industrial projects

Threats
Invisible trade barriers.
Strict Govt. policies
Instability of exchange rate
Low sale price of sugar in market
Higher rate of mark up
COMMENTS IN BRIEF & SUGGESTIONS
After a short careful analysis, I come to know that the financial position of the company is very strong than the other sugar mills in sugar industry.
As the financial analysis shows that the company is high geared. So it is depending on outsider’s funds i.e. borrowed capital. In the result of this, it has to bear the large amount for interest and bank charges. This is also a major burden on its financial position. Company should get from its bankers, some relaxation in long-term loans & its cost.
In Fatima Sugar Mills Limited there is no formal marketing department to promote and introduce its output in local & international market. There is a crucial need for having a disciplined & coordinated program of marketing to boost up sales.
There is a need of searching the new customers in local market.
Sugarcane seeds should be provided to the growers.
Fatima Sugar Mills Limited should advise its field supervisors to be more active in field, coordinate with growers and try to understand problems of the growers.
Fatima Sugar Mills Limited should appoint skilled persons in every department.
Local worker should be preferred.
Fatima Sugar Mills Limited should introduce the new brands of sugar packets, such as 5 Kgs, 10 Kgs, and 25 Kgs.
Branch of Sales Department should be setup in mills to provide the selling facilities to the local agents & dealers.
Fatima Sugar Mills Limited should conduct market surveys and research to know the customer’s views and suggestions.
Sale Department should be engaged only in sales activities and perform only following activities.
1. Sale of White Refined Sugar.
2. Sale & purchase of Molasses.
3. Sale & purchase of Baggasse.
4. Sale of Mud.
5. Maintaining a Sale Register.
Remaining work should be done by Accounts Department, which are as follows:
Keeping whole record of Sugar Parties, agents and Customers.
Posting of Sale Voucher.
Posting of Cash Received from Customers Voucher.
Internal Audit Department should check each voucher.
Internal Audit Department should conduct monthly audit of accounts and submit its report to Chief Executive, General Manager, Financial Controller and Manager Accounts.
Only one room is available for external auditors in whole group, at least two rooms should be arranged permanently for external auditors.
Computer department should also establish at Head Office.
Computers, which are currently using at Head Office, should be replaced because of low speed.
Accounting Software should also be replaced because this software cannot generate various important reports.
At least one I.T Engineer should be appointed at Head Office.
Job rotation principle should be implemented.
Tax department should be established, which deals only tax matters.

FATIMA SUGAR MILLS LTD.
ORGANIZATIONAL STRUCTURE

TABLE OF CONTENTS

Sr. # Topic Page #
01 Growth of Sugar Industry in Pakistan 04
02 Introduction 08
03 Main Departments at Site 14
04 Mechanical Department 15
05 Electrical Department 16
06 Chemical Department 17
07 Cane Department 18
08 Accounting Department 20
09 Admin Department 29
10 Main Departments at Head Office (Finance) 33
11 Accounts Department 35
12 Export & Import Department 40
13 Purchase Department 44
14 Sales Department 46
15 Banking Section 47
16 Organizational Incentives 61
17 Quality Management 65
18 Ratio Analysis 69
19 Statement of Cash Flow 74
20 Interpretation 76
21 Problems of Sugar Industry 79
22 SWOT Analysis 80
23 Comments in Brief and Suggestions 81

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