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

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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. Pakistans 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 Groups 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. 3

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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 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 4

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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 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.

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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. 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

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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

Chief Financial Officer (CFO)

Mr. Muhammad tariq sheikh

Corporate Secretary
Mr. Syed Mohsin Gilani

Auditors
Messrs Rahman Sarfraz Rahim Iqbal Rafiq & Co.

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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.

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 o o o

132 Looms of JAT-600 (Toyoda-Japan), Width = 75 60 Looms of JAT-610 (Toyoda-Japan), Width = 75 48 Looms of JAT-710 (Toyoda-Japan) Width = 75 84 Looms of JAT-710 (Toyoda-Japan), Width = 134

Air-Compressor
o

Atlas Copco Germany

Humidification/Chilling
o

Luwa Swiss

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CULTURAL VALUES
Prosperity Weaving Mills Limited emphasizes the basic values to fulfill the customers 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.

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PROSPERITY WEAVING MILLS SYSTEMS

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

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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

SWOT ANALYSIS
The overall evaluation of companys Strength Weaknesses Opportunity Threats

Strengths
Professional Ownership Professional Management Effective Cost of Production 16

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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 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.

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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.
Chairman Produce fine fabric to capture more export market

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

dying nit.
G.M Finance

Threats/ Challenges
G.M Group Accounts

Finance Manager

Quality issues due to old unit of yarn manufacturing

Chief G.M Manager Market will loose if quality does not maintain Financial Marketing Officer Local Assistant Export Manager Staff Import Manager Staff Export Audit Officer Commercial Manager Admin Officer

G.M Marketing Export

G.M Export

G.M Audit

G.M Commercial

G.M Admin

Uncertain Economic Conditions

Assistant Manager Finance Manager IncreaseAccounts Raw in competition Marketing Material Purchase Manager

Staff

Political instability
Manger Accounts Store Purchase Assistant Marketing Manager

Staff

Purchase Manager

Assistant Purchase Manager

ORGANIZATIONAL STRUCTURE
Manger Accounts for Sale

Manger Accounts for Banks

Manger Accounts for Finance

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Manger Accounts for Cash

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DEPARTMENTS DESCRIPTION
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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

Accounts Department

Raw Material Purchase Section

Sale tax section

Bank Section

Sale Section

Accounts Section

Cash Section

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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 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. 21

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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 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

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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.

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

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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. 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 24

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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

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/ Cs, 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). 25

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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 (DOs) and reporting related to Export Clearance etc.

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.

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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

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. 27

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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

Functions of Machinery Purchase Department

Import machineries and parts from foreign countries. L/ C opening from the bank. 28

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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.

Planning for short term loans

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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. 30

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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 directors 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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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. 32

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

Long term planning

Long term facilities dont 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) prosperity debt equity ratio 68% debt 32% equity

Group debt equity ratio 65% Debt 35% 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 directors decision to expand the business. 33

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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. 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 dont 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 34

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Cost Custom duty/importing expense Erection charges Running cost Financing cost /markup Insurance Insurance of project Pay back time

This is feasibility sheet now we get the projects 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

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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

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

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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.

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 37

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Marketing department controls the production of different counts To check and analyze the daily production reports, stock reports, and clearance report yarn

Dispatch Order (DOs) 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

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 38

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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 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

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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 Than yarn bags are deliver to buyer on daily basis according to production capacity of specific yarn.

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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 (lbs) 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 If the sale was done indirectly through an agent so commission will pay to the agent. Delivery terms 41

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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 DOs are sent to the documentation department Documentation department feed the data into Yarn Sale Management Software

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Print five copies of DOs by the documentation department and transferred back to marketing department

Five copies of DOs are signed by the General Manager Marketing and DOs are further forward to accounts department.

Accounts department verify the DOs by checking the balance of party. If party balance didnt exceed the credit limit so DOs are signed the G. M Accounts

Out of five copies of DOs , 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. 45

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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.

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 DOs formation. I suggest that marketing department prepare DOs without interruption of documentation department. In this way errors in making DOs 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. 46

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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.

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 47

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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.

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

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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.

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.

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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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