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CHAPTER 1:
INTRODUCTION TO THE REPORT
1.1 BACK GROUND OF THE STUDY:
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Internship Report on Rahman Cotton Mills Limited
During internship the most important task was to collect more quality
information about the organization. For this purpose a number of
techniques were adopted to collect the require material and conduct
the report.
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Internship Report on Rahman Cotton Mills Limited
Section 4.
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Internship Report on Rahman Cotton Mills Limited
CHAPTER_2
INTRODUCTION TO THE ORGANIZATION
2.1 INTRODUCTIO TO RAHMAN COTTON MILLS:
In 1950’s late Khan Abdul Rahman Khan established a spinning
unit at Takht-I-Bhai (Mardan). The name of this unit was Yousaf Zai
industry. Late Khan had no experience to run a textile mill, so as a
result it became bankrupt. In late sixties this sick unit was
purchased by one of the well-known industrialist of North West
Frontier Province late. Lt. Gen (Retd) Habibullah Khan Khattak.
Later on the name of this mill was changed and it has been known
as Rahman Cotton Mills. From 1973 to 1975 this unit was run by a
team of experts from Faisalabad. Later on some of the members of
this team resigned. In result mill’s profitability tend to decrease year
by year.
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Internship Report on Rahman Cotton Mills Limited
1
( On-line) Available http://www.bibooje.com
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
CHAPTER :3
ORGANIZATIONAL SETUP
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Internship Report on Rahman Cotton Mills Limited
Chief executive
2
Rahman Cotton Mills Limited, (2004), Annual Report. Mardan
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Internship Report on Rahman Cotton Mills Limited
Administrative Department
Production Department
Finance Department
Accounting Department
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
Chart: 3.2
Rahman Cotton Mills Limited
Takht-Bhai (Mardan)
Hierarchy of Administration Department3
Chairman
Chief Executive
Manager (Admin)
33
Rahman Cotton Mills Ltd. (2005), Annual Report, Mardan.
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
• CARDING:
The laps from blow room are fed in to the carding machines to get
uniform slivers, which are in the form of loss continuous stands of
cotton staple. Another purpose of carding is to further clean the
impurities that are left during the blow room operations. Some short
fibers and any other foreign matters are also removed in the
process. The slivers are kept in especially made lightweight drums.
Slivers from carding section can go either to finisher drawing
through breakers drawing or through uni-lap / comber to finisher
drawing.
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Internship Report on Rahman Cotton Mills Limited
DRAWING:
COMBING:
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Internship Report on Rahman Cotton Mills Limited
the uni-lap to get smaller lap of cotton. These laps are then fed to
combers to get sliver, which has 14 % to 18 % of shorter staples
removed from it.
• ROVING:
Slivers from the drawing stage are passed to the roving frame. The
purpose is to further reduce the size of the sliver and to impart a
little twist to enable it to withstand the tension in the ring spinning
frame. The product from this operation is also called roving and is
spun around big sized bobbins.
• RING SPINNING:
Ring spinning is the stage from which yarn is obtained in its proper
count and twist. Four actions take place in this stage.
CONE WINDING:
Yarn from ring frames is the input for cone winding machine. Here
yarn is wound on cones, which is the final product to be sold in the
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Internship Report on Rahman Cotton Mills Limited
market. If 2-Ply yarn is a needed cone from this section are taken to
double winding machine with twist two single yarn standards to give
2- Ply yarn on cones.
• CONDITIONING:
Production
Technical
• PACKING:
After the cones are made, then they are transferred to the last
department called "PACKING".
In this department first of all, all of the cones of the different counts
are segregated on the basis of their different colors. Then cones
are weighted and then they are transferred for packing. Then the
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Internship Report on Rahman Cotton Mills Limited
cones are packed into plastic bags or into the polythene bags. More
labor is required and work there as compare to any step of the
packing.
In the next step these packed cones are placed into big corrugated
boxes or simply called carton boxes. Then they again packed into
another big "polypro line" bags. These are the big hard plastic bags
like we have seen in market where flour is packed in those bags.
This step-by-step packing, weighting and care are made in order to
ensure the safety of the yarn and the protection of the yarn, from
the weather, transportation, and from other conditions which harm
the quality of the yarn.
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Internship Report on Rahman Cotton Mills Limited
Chart: 3.3
Rahman Cotton Mills Limited
Takht-Bhai (Mardan)
Hierarchy of Production Department
Chairman
Chief executive
Mills Manager
Manager (T & Q) Purchase Officer Store Officer
Spinning Master
Asstt. Purchase Officer
For men Asstt. Store Officer
Deputy Spinning Master A,S,M ( quality )
Purchase Asstts.
Asstt. Spinning Master Asstt. For rmen Store assett
Lab. Incharge
Electric Engineer
Shift Incharge Head Fitter
Quality checker
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
Chief Executive
Finance/Account Sr. Accountant Store Dy. Chief Accountant Sr. Cost Accountant
Executive
Sr. Accountant Wages
Sr. Account Godown Clerk Computer Section
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Internship Report on Rahman Cotton Mills Limited
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Internship Report on Rahman Cotton Mills Limited
Assistant Accountant:
Senior Accountant:
Chief Accountant:
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Internship Report on Rahman Cotton Mills Limited
Store Accountant:
store ledger
No machine can work without the help of human .It is the human
who made these machines and performance of the machines
directly depends upon motivation of the labor; this discussion
shows the importance of the selection of good and motivated
employees and their effect on the performance of the organization.
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Internship Report on Rahman Cotton Mills Limited
Employee evaluation
Recruitment of employees
Daily attendance
Educational allowances
Marriage grants
EOBI
ESSI
Eid incentives
Ramzan incentives
Muharram incentives
loan sanctioning
Educational allowances
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Internship Report on Rahman Cotton Mills Limited
Marriage grants
Employee old age benefit institution fund financially helps the old
employees after attaining the age of 60. It provide the kind of
pension to them .So a person who have worked for seven years in
any of the mill/factory, he is eligible for the pension.
Loan sanctioning
Employees of RCM are eligible to take loans equal to one pay after
the employee pass the minimum one year in the mill.
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Internship Report on Rahman Cotton Mills Limited
First of all, when the candidate comes to fill the vacant position, he
is introduced to HRM department, after the initial interview he is
then referred to the mill manager and to the spinning master .After
the recommendation from both of the above, that candidate is again
send to the HRM department, the signature of the M.M and S.M are
must on the application of the new candidate.
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Internship Report on Rahman Cotton Mills Limited
Payroll section
Main store
costing
Salary
Over Time
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Internship Report on Rahman Cotton Mills Limited
Leave Salary
Bonuses
Final Bills
In case of the workers, although they are paid fix per month salary,
depends upon the number of days they have worked. In case of the
absentee of the workers, they are punished to the amount of the Rs
250. It prevents workers from unnecessary absentee. In case of the
salary of the staff no such punishment is made to them. All type of
allowances is included to their salary.
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Internship Report on Rahman Cotton Mills Limited
Leave salary
All of the employees have their own casual and other leaves on
their disposal. Any how, if the employee did not used them in the
prescribed period, then at the end they are given their leave salary,
the leave salary depends upon number of leaves (unutilized).
Bonuses
Without the condition of the mill, weather the mill is going in the
profit or loss, all of the employees are given bonuses. Bonuses are
given on the basic as well as on the full pay of the employees,
Depends upon the decision of the Board of directors.
Cash Payments
Banking Transactions
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Internship Report on Rahman Cotton Mills Limited
In order to perform the above two functions, there are three main
types of vouchers are maintained
o Cash vouchers
o Bank vouchers
o General vouchers
Cash vouchers:
Bank vouchers:
General vouchers:
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Internship Report on Rahman Cotton Mills Limited
Recurring items
STORE INSPECTION
At the arrival of each item store officer conduct its proper inspection
as per the prevailing practice within three days positively before
entering the same into bin cards .Store department makes it sure
that all the requisitions are authorized by head of department.
Except the new issuance, store department lakes replacement or
evidence of previous consumption like empty packing etc.
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Internship Report on Rahman Cotton Mills Limited
o Purchase
o Storage
o Costing
o Sale
• PURCHASE:
First, the entire raw material is purchased from the market; most of
the cotton is purchased from the local market within Pakistan.
Rahman Cotton Mill has a number of offices in different cities within
the country, they facilitate both purchase of the raw materials and
sale of the yarn .How polyester is imported from the European
countries. Some time cotton and viscose are also imported from the
foreign countries.
After cotton etc are purchased from market and received from the
suppliers they are then inspected by the concerned professional
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Internship Report on Rahman Cotton Mills Limited
• STORAGE
• COSTING:
Direct labor
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Internship Report on Rahman Cotton Mills Limited
Direct materials
• SALES:
All types of sales taxes are made there. Sales taxes are deducted
from the customer and submitted to the government treasury.
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CHAPTER -4
Rahman cotton mills purchases their raw material from the local as
will as foreign markets which require a great amount of money. If
the mill is unable to purchase all the raw material then they are
finance by certain banks. National Bank of Pakistan and Habib
Bank Limited are the main financiers of Rahman Cotton Mills
Limited. Firms also get the facility of loan from the Industrial
Development Bank of Pakistan and Bank Al-Falah Limited. The raw
materials are purchased through these banks and these banks
receive the amount of sale through Telegraph Transfer. The above
mentioned banks deduct their amount from the telegraph transfer
and remaining amount is adjusted in the account of Rahman Cotton
Mills Limited. These banks give different types of finances to
Rahman Cotton Mills Limited, which are as follows:
• Cash finance
• Running finance
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Rahman Cotton Mills Limited, (2005), Annual Report, Mardan.
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Internship Report on Rahman Cotton Mills Limited
The facility carries markup @ 0.4384 per thousand per day (i.e.
16% per annum) and expired on the end of every financial year of
the company (i.e. September 30) and renewed on the opening of
every financial year (i.e. October 1)
The facility carries markup @ 0.4384 per thousand per day (i.e.
16% per annum) and expired on the end of every financial year of
the company (i.e. September 30) and renewed on the opening of
every financial year (i.e. October 1)
The facility carries markup @ 0.4658 per thousand per day and
expired on the end of every financial year (i.e. September 30) and
renewed on the opening of every financial year (i.e. October 1)
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6
6 Rahman Cotton Mills Limited, (2005) ,Annual Report , Mardan
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Internship Report on Rahman Cotton Mills Limited
Other factors that can have negative impact on the financial results
of the Company are the markup rates and inflation, which if not
controlled, may erode large part of the profit. Due to increasing
trends in KIBOR rates, cost of financing of the long term loans and
working capital have also increase from 4% during last year to 11%
in July 2005 and this increased amounts to 175%. This
phenomenon will also adversely affect the profitability of the
spinning industry due to huge bank borrowings by the spinning
sector for the installation of new plants and expansion for the
Present capacities. The cotton crop for the coming season is
expected to be around 15 million bales, which is quite encouraging
and will be sufficient for local consumption. The prices of American
ELS cotton has also increased by more than 45% as compared to
the prices prevailing during November/December 2004 whereas the
yarn prices are stagnant at their lowest ebb.
4.7 DIVIDEND
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Internship Report on Rahman Cotton Mills Limited
The new spinning units has been installed and put into commercial
production in the month of June 2005. Breakup of the project cost is
as under:
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Rahman Cotton Mills Limited, (2005) ,Annual Report , Mardan
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Internship Report on Rahman Cotton Mills Limited
Rupees Rupees8:
PARTICULARS in 000 in 000
New Unit:
Construction of main production 58861 _
Plant and machinery, Humidification Plant,
Laboratory equipment, Electric installations
and Water softening plant / Roads 527161 _
586022
Extension in existing Mills:
Construction of main production Hall 29475
Plant and machinery, Humidification plant,
Electric installations and Water softening
plant /Sui Gas Transmission Line 116597
146072
Investment made during the year 732,094
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CHAPTER 5:
SWOT ANALYSIS
9
Luthens Fred, (1985), “Organizational Behavior”, McGraw Hill publishing Co.
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5.2 ANALYSIS:
5.2.1 STRENGTHS:
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Internship Report on Rahman Cotton Mills Limited
5.2.2 WEAKNESSES:
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Internship Report on Rahman Cotton Mills Limited
5.2.3 OPPORTUNITIES:
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Internship Report on Rahman Cotton Mills Limited
5.2.4 THREATS:
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Internship Report on Rahman Cotton Mills Limited
CHAPTER: 6
FINDING AND RECOMMENDATIONS
6.1 FINDINGS:
There are only few suppliers of raw materials and other accessories
to Rahman Cotton Mills Limited. So the bargaining power of the
suppliers increases which results in the price of the product will also
increase.
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Internship Report on Rahman Cotton Mills Limited
The absence of skilled labor in the local area resulted in hiring labor
from the other areas of Pakistan. These labors are charged higher
wages and accommodation facilities resulting relatively higher
production cost. These labors and office staff are more sensitive
and asked for more careful dealing.
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Internship Report on Rahman Cotton Mills Limited
CHAPTER: 7
RECOMMENDATIONS:
As our labor is unskilled there for RCM hires skilled labor from other
parts of the country which is very costly, so RCM should provide
training to the local labor, so it will decrease their cost and also
improve their image in the locality.
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Internship Report on Rahman Cotton Mills Limited
The mill must control its cost of sale and selling and admin
expenses, it is very important and a challenge for the management
from the last few years.
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Internship Report on Rahman Cotton Mills Limited
BIBLOGRAPHY:
1 Luthens, Fred, (1985), “Organizational Behavior” New Edition. McGraw Hill
Publishing Inc.
3 Meigs B Walter And Meigs F Robert,” Accounting The Basis For Business
Decisions” 9th Edition, McGraw Hill Book Co.
ANNEXURE 1a
ASSOCIATED CPMPANIES OF RAHMAN COTTON MILLS
LIMITED 10
a. Babri Cotton Mills Limited
b. Bannue woolen mills Limited
c. Bibojee services (Pvt) Ltd
d. Bibojee investments (Pvt) Ltd
e. Bibojee poultry combine (Pvt) Ltd
f. Consultant and advisors Ltd
g. Century Pharmaceutical Company Ltd
h. General tyre and rubber Co. of Pakistan Ltd
i. Ghandhara industries (Pvt) Ltd
j. Ghandhara Nissan (Pvt) Ltd
k. Ghandhara International Ltd
l. Janana De Malucho Ltd
m. National Motors Ltd
n. Rahman Cotton Mills Ltd
o. Sarmast Technical Services (Pvt) Ltd
p. St.john’s Pharmaceutical (Pvt) Ltd
q. The Universal Insurance Company Ltd.
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Rahman Cotton Mills Limited, (2005) ,Annual Report ,Mardan.
Internship Report on Rahman Cotton Mills Limited
ANNEXURE 1b
COPMAPNY’S PROFILE 11
BOARD OF DIRECTORS MR. RAZA KULI KHAN KHATTAK
Chairman
MR. AHMAD KULI KHAN KHATTAK
Chief executive
LT. GEN. ( RET ) ALI KULI KHAN KHATTAK
MR. MUSHATAQ AHMAD KHAN, FCA
MRS. SHANAZ SAJJAD AHAMD
MRS. ZEB GOHAR AYUB
DR. SHAHEEN KULI KHAN
AUDIT COMMITTEE MR. RAZA KULI KHAN KHATTAK
Chairman
LT. GEN. ( RET ) ALI KULI KHAN KHATTAK
Member
MR. MUSHTAQ AHMAD KHAN , FCA
Member
COMPANY SECRETARY MR, AMIN-U-RASHEED
Senior Manager Corporate Affairs
CHIEF FINANCIAL OFFICER MR. SHOAIB KHAN
Senior Manager ( Finance & Commercial )
INTERMAL AUDITOR MR, MUHAMMAD ISMAIL
AUDITORS M/S MUNIFF ZIAUDDIN & CO.
Chartered accountants
BANKERS HABIB BANK LIMITED
NATIONAL BANK OF PAKISTAN
PICIC COMMERCIAL BANK LIMITED
REGISTERD OFFICE & MILLS TAKHT-I-BKAI ( MARDAN ) N.W.F.P
Phone : (0937) 552654 , 552716
Fax : (0937) 551568
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Rahman Cotton Mills Limited ,(2005) ,Annual Report,Mardan
Internship Report on Rahman Cotton Mills Limited
ANNEXURE 1c
Share capital12:
The capital of the Company is Rs. 50.000 million divided into 5.000
million ordinary shares
Number of
of Rs. 10.00 each with powers Total
Share Holding
to increase
Share
S.orHolders
decrease Held
the said capital and to sub-divide the share capital into
From To
different classes consisting of ordinary shares only.
16 501 1,000 10,000
PATTERN OF SHARE HOLDING
3 1,001 AS ON JUNE 30, 2005 5,000 13,337
43 Total 2,750,000