The author is thankful to his teachers (Prof.&Dir.) Dr. Ihsan malik , Prof.Mushtaq-ur-Rahim and Prof. Mrs. Sajida Nisar (Incharge Training Programme) for their kind guidance, encouragement and keen interest during internship and completion of this report.

I must acknowledge my gratitude to Mr. ------------------------ (Manager Marketing) and Mr. ------------------- (Finance Manager), Marketing, Finance and Personnel Department Kohinoor Industries Limited for their tiring efforts and meticulous supervision during my internship.

I also thank all employees of Kohinoor Industries Limited who cooperated with me during my internship at K.I.L.

Being a student of IBA, University of the Punjab, I am very pleased to disclose the report on my industrial training at Khinoor Industries Limited Faisalabad dated from 01-05-01 to 30-06-01. 

In bid to becoming a successful business administrator, theory and practice of managerial elements are indispensable. Industrial training fills the gap of theory what we learn in the college and the practice what we scrutinize in the company. Hence, industrial training is the only way out for the students of management to learn all these aspects of the ideal thoughts of management and its application in the industry or business. 

The contents of the report include production, financial, personnel and marketing details of the company. 

Muhammad Qaiser

Roll# 2000-85

University of the Punjab,

Lahore

Kohinoor Industries Limited - Faisalbad, the largest in the country, was established in 1950 with only 25,000 spindles. Throuhg a rapid process of consolidation and expansicn, colossus of 147,000 spindles. The mills have the bwest-equipped laboratory in the country for complete testing of raw materials, other inputs and yarn. It runs a sophisticated system of quality control for its products covering in-process surveillance and riagid finished product testing. It has technical collaboration with world renowned Japanese Taxtile Group KANEBO.

Since the very beginning, Kohinoor has been a trendsetter, setting the pace and direction for Pakistan’s textile industry. It has always been a leader in yarn products and its “Telephone” brand yarn is always leading the yarn market.

Kohinoor Industries Limited – Faisalbad is not only a gaint of an industrial unit, it is an institution in itself recognized as an ideal in the textile industry. Its management systems, technical and professional training systems, employees welfare set-up, shopping and schooling centers, make it a complete the Industry. The Sponsors of the company belong to a renowned Group called “SAIGOL GROUP”. They have grown with the country. They have grown to fill the vacuum that existed setting up one Industry after another.

Saigols started business activities in Pakistan in 1948 by setting up the country’s first textile mill- Kohinoor Industries Limited in Lyallpur. With the passage of time and continuing efforts of Saigols, Naseem Saigol Group becomes one of the major industrial groups in Pakistan comprising the following:

This is 1948, Pakistan, just a few months old, has yet to see a cultivator of its parched industrial scene. Saigols having inherited the business trtadition from their forefathers an erstwhile family of trades in Calcutta, have chosen Lyallpur (Later named Faisalabad) as their base. Taking the initiative, they are setting up under the umbrella of Kohinoor Industries Limited, the country’ first major textile mill – Kohinoor Textile Mills in Lyallpur.

Let’s come to 1950, KTM, with a unique edge of location in the heart of cotton growing area of Paistan, has started its production with a humble capacity of 25,000 spindles. But through a rapid process of consolidation and expansion extending over a few years it grew into a prestigious gaint of 147,000 spindles and 2,300 Auto power Looms, with Latest facility for bleaching, mercerizing, continuous dyeing, and rooler printing, finishine including Evaset and a large make up department to handle its production.

It was a very strong group and enjoyed leadership uptill 1965 and after it began to become financially weak. In 1971 nationalization started by Bhuto and this industry took a lot of

loan from the government and ran only on loans, this was the reason government did not nationalization it.

In 1984, the top management decided to produce only yarn in order to meet expenses. However during 80s it was given many loans and once again it becomes profitable for owners, but in 90s owners took no interests.

Due to shift of resources from textile sector to electronics, processing and weaving units were closed in 1987, and 1982 respectively.

From the very beginning, Kohinoor has been a trendsetter, setting the pace and direction for Pakistan’s textile Industry; it has always been a leader in yarn and some of their brands like TREVIRA, FABRON, BOSKI, have been fully recognized in the country.

They have also been first to introduce blended fabrics in Pakistan.

At present Kohinoor industries limited is running with 93,000 spindles. Now at this time Kohinoor Industries Ltd. (KIL) is producing only yarn. It has three units now out of which Units No.3,are completely on expert and other produce yarn for local market. The mill have best equipped laboratory in the country for complete testing of raw materials and finished products.

Kohinoor Power Company is a captive power-generating unit of KIL and is a subsidiary of KIL.

The Kohinoor power company limited, formed in 1991 is the first captive unit to commission in Pakistan. KPC started its production with two nigatta engine was added in 1993. Now successfully operating 15 MW power plants at 80% capacity, the plant is meeting entire power requirements of Kohinoor Industries limited.

Mr. M. Naseem Saigol, Chairman.

Mr. M. Azam Saigol, Chief Executive.

Mrs. Sehyr Saigol.

Mrs. Razia Begum.

Mr. Shahid Sethi.

Mr. Imran Iqbal.

Mr. Shahid Nasim.

Askari Commercial Bank Limited.

Emirites Bank International Limited.

Faisal Bank of Pakistan.

Habib Bank Limited.

National Bank of Pakistan.

Union Bank Limited.

Standered Chartered Bank.

United Bank Limited.

Tel.6306133

Cotton

100% Karded Cotton Ring Spun      3/1 - 24/1
100% Karded Cotton Open End        5/1 - 34/1
100% Karded Cotton slub Ring Spun     5/1 - 10/1
100% Karded Cotton slub Open End      6/1 - 30/1  

Polyester / Cotton Blends

40% Polyester/ 60% Karded Cotton                          12/ - 26/1
50% Polyester / 50% Karded Cotton Open End     14/1 - 26/1
50% Dacron 40A / 50% Karded Cotton MJS         14/1 - 40/1
50% Polyester / 50% Karded Cotton MJS        14/1 - 40/1
65% Polyester / 35% Karded Cotton MJS          14/1 - 40/1

Acrylic / Cotton Blends

50% Acrilan / 50% Karded Cotton Open End        5.5/1 - 14/1

Heathers
99% Karded Cotton / 1% Black Poly Open End       6/1 - 30/1
95% Karded Cotton / 5% Black Poly Open End       6/1 - 30/1
90% Karded Cotton / 10% Black Poly Open End     6/1 - 30/1
85% Karded Cotton / 15% Black Poly Open End     6/1 - 30/1
80% Karded Cotton / 20% Black Poly Open End     6/1 - 30/1

AT Present KIL is engaged in producing variety of yarn (combed, carded)

20/1 CMD

72/1 CMD

52/1 CMD

80/1 CMD

20/1 CD

32/1 CD

24PC CD

30PC CD

40PC CD

KIL, s yarn is exported to Japan, USA & EEC countries.

KIL, s yarn is sent to its agents in Faisalabad, Karachi, Multan and Qassur.

By aggressive marketing efforts they can cover the markets of Germany, Vietnam, and rest of the Europe.

In local market every yarn producer is the competitive of the Kohinoor Industries Ltd.

Kohinoor Industries Limited reported sales of 1.94 billion Pakistan Rupees (US$33.04 million) for the fiscal year ending September of 2001. This represents a very small increase of 1.1% versus 2000, when the company's sales were 1.92 billion Pakistan Rupees. Despite this increase, sales are still well below the level achieved in 1999, when Kohinoor Industries Limited reported sales of 2.38 billion Pakistan Rupees.

Sales of Kohinoor Industries Limited

(Figures in Billions of Pakistan Rupees)

Although sales at this company increased, they increased at a slower rate than the three comparable companies in 2001. The sales increase of 1.1% was less than those at Dewan Textile Mills Limited (up 14.3%), Bhanero Textile Mills Limited (10.0%), and Apollo Textile Mills Limited (13.3%).

Sales Comparisons (Fiscal Year ending 2001)

In recent years, this stock has performed terribly. In fiscal year 1996, the stock traded as high as 15.75 Pakistan Rupees, versus 1.80 Pakistan Rupees on 11/15/02. (In 1996, the stock retreated significantly from its high, and by the end of the year was at 3.75 Pakistan Rupees).

The current (11/15/02) price of this stock is 1.80 Pakistan Rupees. During the past 13 weeks, the stock has fallen 9.1%.

During the 12 months ending 12/31/01, the company has experienced losses totalling 3.84 Pakistan Rupees per share. These 12-month earnings are lower than the earnings per share achieved during the last fiscal year of the company, which ended in September of 2001, when the company reported earnings of -3.20 per share. Note that the earnings number Includes 1.93 pre-tax charge in fiscal year 2001.

This company is currently trading at 0.03 times sales. This is at a lower ratio than all three comparable companies, which are trading between 0.04 and 0.20 times their annual sales. This company has negative book value (and thus a price to book value would not make any sense).

Summary of company valuations

The market capitalization of this company is 57.72 million Pakistan Rupees (US$984.69 thousand).

This company has paid no dividends during the last 12 months. The company also reported losses during the previous 12 months. Kohinoor Industries Limited last paid a dividend during fiscal year 2000, when it paid dividends of 0.60 per share.

In 2001, earnings before extraordinary items at Kohinoor Industries Limited were -92.27 million Pakistan Rupees, or -4.8% of sales. This profit margin is lower than the level the company achieved in 2000, when the profit margin was 10.6% of sales.

The company's return on equity in 2001 was -5.5%. This was significantly worse than the 13.6% return the company achieved in 2000. (Extraordinary items have been excluded).

At the end of 2001, Kohinoor Industries Limited had negative working capital, as current liabilities were 2.36 billion Pakistan Rupees while total current assets were only 874.65 million Pakistan Rupees. The fact that the company has negative working capital could indicate that the company will have problems in expanding. However, negative working capital in and of itself is not necessarily bad, and could indicate that the company is very efficient at turning over inventory, or that the company has large financial subsidiaries.

At the end of 2001, the company had negative common shareholder's equity of -705.66 million Pakistan Rupees. This means that at the present time, the common shareholders have essentially no equity in the company. Although the common equity is negative, Kohinoor Industries Limited does have a net positive equity position (as its preferred stock, minority interest, etc. are positive).

As of September 2001, the company's long term debt was 381.54 million Pakistan Rupees and total liabilities (i.e., all monies owed) were 2.81 billion Pakistan Rupees. The long-term debt to equity ratio of the company is 0.25.

As of September 2001, the accounts receivable for the company were 359.72 million Pakistan Rupees, which is equivalent to 68 days of sales. This is an improvement over the end of 2000, when Kohinoor Industries Limited had 108 days of sales in accounts receivable.

Financial Positions

The mill is located at a distance of 2.5 km South of the Faisalabad Railway Station on Jaranwalla Road, Kohinoor Nagar, Faisalabad. Due to its location along the road it has no transportation problem as well as it is near a big commercial area. Availability of labour is easy.

It has an area of about 120 acres and has residence for employees and other facilities for them within the mills.

Main objective of any business firm or company is to earn profit. While the memorandum of association of Kohinoor Textile Mills is composed of 31 objectives. However, the most important objectives are given as under:

Kohinoor Industries has always adhered to high ethical standards and strived to be the industry’s preeminent manufacturer. The company’s Mission Statement encompasses four parts: Vision, Mission, Values, and Principles.

To be achieved through our Mission, Kohinoor Industries’ Vision is "to be a world-class company as defined by the customers we serve."

"We will exceed our customers’ expectations in quality, service, and value; continually increase shareholder value; and provide growth opportunities for our people."

The Mission is supported by our Values and Principles

The company’s success, as well as the success of individual employees, can be traced to embracing and practicing these values. Flowing from the values of honesty, integrity, and hard work are a set of principles that we believe in and use to govern our behavior as Kohinoor Industries employees.

"People, relationships, customer, citizenship, innovation, and results."

People

Kohinoor’s philosophy is to attract, develop, and retain the best people. We focus on growing and developing these people through continued education, training, and work experience. The safety and well-being of our employees are primary corporate objectives.

Relationships

We strive to establish and maintain honest relationships with all stakeholders in the company. This is to include employees, shareholders, customers, suppliers, and the communities in which we live. These relationships are to be founded on mutual trust, mutual respect, and mutual benefit.

Customer - We recognize that our customers and our ability to exceed their expectations are critical to our total success. We will listen to and seek to understand our customers’ needs. We will interactively respond to those needs for the mutual benefit of the relationship.

Citizenship

In the communities in which we live and the industry in which we work, we will actively strive to contribute to a better environment for everyone.

In an ever-changing marketplace, new products, services, and technologies are the lifeblood of our business. We recognize our responsibility to be a leader in product, technology, and in the marketplace. We will provide a culture that encourages, nurtures, and recognizes innovation.

Results

We value the trust our shareholders have placed in us, and we recognize our responsibility to maximize the return on their investment. We will be every customer’s supplier of choice for all markets in which we operate

The organizational structure of Kohinoor Industries Ltd. is flat and the flow of authority has a proper channel as shown in the organizational chart. The chart is divided into a systematic manner into different boxes while each box denotes a department or section headed by an incharge who supervises plans and controls the operations and affairs of the company.

This organizational chart shows the flow of authority and responsibility from top management to lower management. But according to any observations and personal judgment, there is a diagonal and formal relationship between management while the flow of authority in the chart as formal, which encourages bureaucratic trends.

Management

Representative

Mgr. Quality

Chief Executive

Chief Operating Offr

H.R & Admin

Group Mgr

Procurement

G.M. Tech

G.M. Mkt

Ch. Eng.Civil

Mgr. Cotton

G.M. F&Acct

Sr. MM

U # 3b

MM

U # 3A

MM

U # 4

Dy. GM

U # 5

Mgr. KPC

Dy. Mgr

Export

Dy. Mgr

Local

Assistan Mgr.

H.R

Assistan Mgr.

Admin

Mgr. Finance

Dy. Mgr System

Dy.Mgr.Bkg & Shp

Dy. Mgr & SSI

Asst. Mgr.Admn

LEVELS OF MANAGEMENT

We can subdivide the mill's management into the following three main levels.

Consisting of Chairman, HR & Admin Manager, Senior Manager Finance & Accounts, Senior Marketing Manager and General Manager. The Top management formulates policies and makes decisions about the company activities for achieving the objectives. General Manager implements these policies and decisions in the mills. While General Manager's authority consisting of the following.

* Makes decisions within the scope of his own authority.

* Assigns tasks to subordinates in their areas.

* Expects and requires satisfactory performance form subordinates.

This level of management consisting of Assistant Manager, Spinning Master, Labour Officer, Security Officer and Time Officer. This type of management receives orders from General Manager and implements them through the co-operation of lower management.

While the main responsibility of middle management is to control and direct the operations with the consent of General Manager to get work done. It involves in standardized production, supplies, good working conditions, and definition of standard performance and reporting of flow of work.

This department is headed by Assistant Manager who is also the incharge of accounts section. Assistant Manager controls all the activities of the mills according to the rules and regulations receive from General Manager. While he performs the following main function:

* To maintain good relations with outside public.

a. Good relations between Govt. and mills.

b. Good relations with general public.

* Administration of the resident area of the mills.

* Administration of the employees who are working outside the production department in the mills.

* Dispatching of goods according to the orders of the Head Office and pay excise duty on those goods.

* Receiving of raw materials for production department and pay custom duty on the material.

* Receiving orders from Head Office and implement those orders under the supervision of General Manager.

* Giving information daily about the production and other activities to the Head Office.

When a person is recruited, a letter is sent by the HR & Admin Manager to labour officer to convey the terms and conditions of the appointment. While the clerk fills up a personal detailed file which contains the following information.

1. A serial number is assigned to each employee, which is called file number.

2. Name of employee, his father's name, full address of the employee and the department in which he works.

3. The grade, which has been granted to the employee.

4. Date of birth given because employee is retired when he attains the prescribed age limit.

5. Designation of the employee is also given in his personal file.

6. The file also contains different allowances rate i.e. house rent, medical allowance and traveling allowance etc.

This is being regarded as the most important card, which is maintained for each employee. Every employee has a card on which total days of month are recorded. Time keeper attendances these cards for every shift, while at the end of the month these cards are sent to the Labour Officer who, on the basis of these cards and other time office record makes the pay sheet. Attendance card is very complicated in it's structure containing multiple columns on both sides. The front side of the card contains name of employee, his father's name, designation, department and then number allotted. First column of the front side is the date column starting from 1st to 31st. After this date column, many columns specified to record incoming and outgoing time of the work, signature of incharge, leaves, privilege leaves etc. are recorded in their respective columns. Ordinary hours and overtime hours are recorded in hour’s column, which is also verified by the supervisors. While total of each column is computed in the bottom.

The backside of the card contains name on the employee, father's name, designation and the month at the top. Summary section contains the summary of ordinary hours (8 hours). On this side, amount of wages, allowances, bonuses and increments are computed and called gross wages. Then fines, canteen charges, insurance expenses and loans installments (if granted to any worker) are deducted from this gross wages and net wages are given to the employees.

Secret ballot to determine the collective bargaining agent is held after every two years, under supervision of the Registrar Trade Union Faisalabad Region. Last referendum was held on 31.8.2001 and the Pakistan workers Union was declared the collective bargaining agent for two years. Mr. Irshad is General Secretary and Mr. Jabbar is President of the union. Every year the union presents a memo of demands to the management and agreement is arrived at amicably. Office bearers of the union are very sensible and work hard both for better production and labour welfare. They are not affiliated with any political party.

Kohinoor Industry has a very bitter experience of strained labour management relations. In 1971, registered union in the mills was reported to have been sponsored politically. It became awkward and aggressive. There was no discipline and production kept on declining till 1984. More then 55000 employees were on roll. On the investigation of the union their performance was very poor. The management remained helpless and could not enforce discipline. Strike and go-slow were regular features. As a result, company incurred huge losses. The workers also suffered. No bonus or profit paid to them. Political stability in the government emerged in 1984. The mills management found a favorable working environment. Re-organization of the management took place. Superfluous strength was reduced. Awkward Trade Union leaders were thrown out and discipline restored.

Today relations between the labour and the management are very cardinal. Sense of mutual understanding and harmony prevails. Consistent with it's socio-economic objective, the company is very responsive to welfare of the employees. Union is also playing fair positive role. Consequently, profitability and growth rate is commendable, which is benefiting both the parties.

Business Intelligence Unit functions as the market research and intelligence cell of KIL. Though its principal responsibility is to collect and analyze the data about yarn Industry, its key players including its users, namely yarn producers, it also carries out specialized market studies in other fields namely, textiles and financial analyses.

Kohinoor Industries Development Centre was established in June 1997. It was formally inaugurated on July 28, 1997 by Mr. M. Naseem Saigol and was followed by a seminar on the Seven Habits of Highly Effective People, based on Steven Covey's bestseller.

The group is determined to establish a platform where it can provide the knowledge and skills to its employees so that they will be the torchbearers of the organization tomorrow. KEDC is an in-house management development organization for excellence in training. It has been established with the explicit purpose of ensuring organizational growth and development and to serve the need for wisdom in corporate decision-making, thus playing an important role in the long-term success of Kohinoor Industries Limited.

Training and Development

KIL training and development programme is an in-house programme that is designed to change the way we work and think. Our faculty is a blend of individuals from diverse backgrounds comprising of scholars and educationists of the corporate world

KIL are committed to surpass competition by unleashing the constructive creative abilities and energies of our group's employees.

Job Title : Manager Cotton

Report to : Chief Operating Officer

Responsibilities :

Responsible for procurement of Pakistani cotton for Kohinoor Industries Limited.

Negotiate with the cotton brokers / suppliers in connection with rate and quality.

Follow up of pending contracts till maturity.

Negotiate with General Manager Finance and Accounts in connection with release of payment to the cotton suppliers.

Job Title : Assistant System Officer

Report to : Manager Cotton

Responsibilities:

1- In the absence of Manager Cotton all responsibilities of Cotton is performed by Assistant System Officer.

2- Any other duty signed by Chief Operating Officer.

Job Title : Assistant Accountant

Report to : Manager Cotton

Responsibilities :

To prepare cotton payment voucher and to follow up cotton parties payment.

Responsible for opening of local L/Cs (cotton) with co-ordination of Finance Deptt.

To responsible for preparation of L/Cs Cotton limits Position reports.

To prepare the debit note of short weight / trash / moisture, deduction of Cotton Suppliers and timely sent to the brokers.

To follow up cotton parties regarding getting of Sales Tax invoices from the Ginners.

Responsible for preparation and deposit of Income Tax liability relating to cotton parties.

Supervision of cotton Samples required to be tested from Lab. Department.

Any duty signed by the Manager cotton.

Job Title : Cotton Selector

Report to : Manager Cotton

Responsibilities:

1- Responsible for the loading and dispatch of cotton from the Ginning Factory.

2- To check and ensure the quality of cotton i.e. Moisture/Trash and weight shortage if any before dispatch.

3- Responsible for timely submission of all related documents i.e. Sales Tax invoices and bill along with weight notes from Ginning Factory to Mill.

Job Title : Cotton Clerk

Report to : Manager Cotton

Responsibilities:

1- To maintain the proper record of cotton arrived i.e. parties’ bill, Gate passes, weight notes and lab results etc.

2- Responsible for timely dispatch of cotton demand drafts and letters to the concerned parties.

3- To Fax contracts and other reports to Multan & Lahore office.

Any other assigned by the cotton Manager.

Job Title : Peon

Report To : Manager Cotton

Responsibilities:

1- Distribution of documents to other departments.

2- To serve the guests.

3- Any other job assigned by the Manager Cotton

Following duties were assigned to the employees of shipping and banking cell by the order of Mr. Muhammad Shafique Asstt.Manager Shipping and Banking.

Name: Amir Nazir

Designation: Accounts Executive

Name: Tahir Mahmood

Designation: Export Officer

Name: Muhammad Nadeem

Designation: Asstt. Export Officer

Name: Javed Iqbal Ch.

Designation: Accounts Asstt.

The grave economic recession in Pakistan during the last five years has taken its toll to the textile industry as well. Like much of Pakistan industrials sector. Kohinoor Industries too has fallen victim to the circumstances facing the entire nation on the economic front. In addition to above KIL also have some other inherent problems in old units, which rendered it unviable. The following are the main inherent problems:

As a result KIL suffered huge losses in the last five years which eventually raised its debt financing to a level of two billion plus which became unsustainable by its operations.

In 1998, Kohinoor Industries total sale was Rs.3060 million, whereas its total debt (long term & short term) as at April 30, 1999 was Rs.3037 million. The company’s sale revenues are not enough to service the financial burden of the huge unsustainable debt.

The company was set up in 1948 in the vicinity of Lyallpur (later named Faisalabad). Fifty years later, with the urbanization of rural areas and civic developments KIL has become the center point of the Faisalabad City. It has been surrounded by some of the most populated and lucrative commercialized areas like peoples colony and madina town.

Keeping in view the availability of basic commercial amenities the value of Kills land has increased manifold. The sponsors of KIL have decided to reduce its debt burden through transfer/ sale of land owned by KIL valuing two billion approximately.

Some time back in 1998, Saigols approached institutions and gave them a proposal to take over the land and requested to adjust it against principal liability of unsustainable debt of the company. After some discussions, bank/ financial institutions showed their inability to take over the land against settlements of their debts. Then the sponsors suggested that they might be given an option to sell the land on behalf of the creditors subject to the following:

Their proposal also includes scrapping of outdated spindles (116,000 approximately), which are not viable due to the reason stated above. While inquiring the status of remaining two units No.4 & 5, they gave complete financial projections of these two units along with cash flow. From these projections, it transpires that remaining two units would be viable if reasonable relief in mark up rates be allowed.

The company has three types of creditors/ lenders/ financial institutions having different types of charges on company’s assets, which are as follow:

Kohinoor Industries also requested that KPC liability payable to different financial institutions of Rs. 335 million be considered as KIL liability. KIL has an unsecured liability of Rs. 290 million payable to Kohinoor Power against electricity supplied in last five years. Due to this huge receivable, KPC could not service its debt in the past. Reduction in KIL s operations will affect KPC profitability and in future KPC will not be in a position to repay its debt from its operations. The creditors of KPC are conveying their intentions to liquidate the project. If it is happened, it will close down the operations of KIL because KIL does not have any other source of power to run the mills. Keeping in view the above factors, it is imperative to address the creditors of KPC. KPC liability of Rs. 250 million should be included in the total liability payable by KIL to financial institutions and its repayment should be made as of other NFCH creditors. Another option is to allocate a reasonable amount out of land sale towards KPC liability and pay that amount to its creditors to reschedule its loans.

As against Kills proposal for repayment of unsustainable debt through sale of land, Banks/Financial Institutions have another option and that is liquidation of the company through court. This option is usually adopted where borrowers willingness to pay the debt is doubtful. In this particular case, borrower is not only willing to pay but also has insisted the financial institutions to accept the land sale proposal (definite source of repayment of debt) with certain parameters stated above. Further liquidation process involves huge cost, unlimited time frame and many other legal complications, which may not benefit the financial institutions. Legal proceedings would also damage the smooth business relationship with the client, especially when all other group companies are in operation ad working reasonably good in the present economic crises and servicing debt obligations towards financial institutions with reasonable level of satisfaction.

The management of the company also approached SBP coordination committee for the revival of KIL and implementation of their land sale proposal. In the beginning of 1999, they gave land sale presentation to the major lenders and SBP committee at Habib Bank Plaza, Karachi. The committee recommended their case for revival to the Presidents committee. The Presidents committee discussed KILs land sale proposal in their meeting held on June 05, 1999 at HBL Plaza and in principal they agreed to accept and implement land sale proposal cum revival plan of proposal in detail and come up with recommendations and specific implementation plan in the next meeting.

Since any arrangement of disposal of land and reduction of debt has to be done by and large to the satisfaction of all the creditors especially 1st charge holders. National Bank convened 1st charge holders meeting at NBPs board room on July 1st to discuss and formulate the strategy for the implementation of the KIL s land sale proposal. The participants discussed the proposal in detail and of the view that. This proposal should be accepted as KIL does not have the capabilities to repay its debts from operations. Land is the only definite source of generating debt repayment. While discussing the proposal one controversial point arose and that was the formulation of the division of sale proceeds among the creditors. It was argued either the first charge holder be paid first as per their exposure or it would be distributed proportionately among all the creditors. As it was feared that to deprive the non first charge holder from the sale proceeds or a plan devised to pay them at a later stage would provoke them to initiate legal proceedings against the company that would jeopardize the whole payback plan.

Another significant point was discussed that KIL should put all efforts to initiate, promote and complete land sale process within two years time. The reason being that longer the completion period be allowed, would benefit KIL and adversely effect the financial institutions due to freezing of levy of mark up during that period.

A periodic comprehensive plan of repayment of loans is being attached from which it transpires that major portion all the creditors exposure will be satisfied from land sale valuing 1.92 billion.

After addressing above issues and other minor issues, NBP proposes the following recommendations for the implementation of Kohinoor Industries revival proposal:

These are the broad parameters and if the committee agrees, then pros and cons of the proposal would be analyzed and discussed with all the creditors. An inter creditors/ borrowers agreement would be drawn between the creditors and KIL.

Pace of life has gone to dangerously accelerated level, rate of obsolescence is very high, values and social preferences are altering and new trends are emerging. Those who do not anticipate such change stand against these odds and do not plan or formulate just in time policies, are thrown out of the system. Today, organizations are endeavoring for continuous improvement in their production and service system. Policy is a board framework which tells us what to do, when to do, and who to do it. It also points out the facts that where we are and where we want to be. It bridges the gap between present and future. Business policies are blend of past, present and future and are formulated keeping in view past performance, having a vigilant eye upon present and upon the activities of futures. Each organization has its own managerial policies, which depend upon its nature. In the absence of these policies, there will be a great amount of uncertainty, suspicion and sense of grievances in the environment of an organization. So it is not wrong to say that effective managerial policies are very necessary for the survival and success of an organization because these are the steps taken by the managers for effectively operating the system of an organization.

In first stage all critical areas to business are determined and then long term policies, plans and strategies are developed. For any manufacturing concern, there are certain guidelines, which provide a base for setting up its managerial policies. KIL made the following guidelines for policies after screening the company internal and external environment.

These are the broad guidelines upon which KIL made as base for managerial policies, in order t survive in this competing environment and to make profit.

I found following managerial policies developed and followed by Kohinoor Textile Limited.

Administration department consists of the following main sections;

Assistant Manager is the head of this section while all types of payments are made by this office i.e. wages, salaries, store expenses, gratuity and allowances, freight charges, excise and custom, traveling expenses allowances.

Records of all payments are kept in this office in daily cash-book. If there is shortage of cash-in-hand, then the cashier brings the required cash from the "Bank" through cheques. all collections and payments take place by means of cheques.

Labour Officer is the incharge of this office who deals with labor affairs such as maintaining labor records, recruitment and selection of employees, records of the attendance of employees and records of benefits and services provided to the employees etc.

Deputy Superintendent of excise and custom is the incharge of this office who is employee of excise and custom department of government. He checks the quantity and quality of the raw-materials and then this custom duty is being deposited in the bank. After paying his custom duty, raw-materials can be used in the process of production.

Now when finished-goods are produced and are being despatched to the sales agents, then excise duty is being paid on the despatched goods. After paying of this excise duty, deputy superintendent of excise and custom signs "Excise Pass" which is the evidence that excise duty has been paid.

Incharge of this office is named as Security Officer who is responsible to protect the organization from outside danger. While the staff consisting of the head watchman and eighty watchmen. Twenty five watchmen are always present in every shift in the mills. The duties of watchmen are as under:

a. To maintain peace in the mills.

b. To check the employees while coming in and going out from the mills.

c. To check the employees at night in the production department as to whether they are working or sleeping.

Head time keeper is the incharge of this office while the duty of the time office is to prepare attendance report daily and then give to the labour welfare officer. As already mentioned that there are three shifts working in the production department, thus every shift having a separate time keeper. While it is the duty of this office to see that what is the total strength of workers in the production department. How many workers are absent and how many are present. How many are on weekly rest, leave and on overtime.

This office prepares daily attendance report and at the end of the month attendance of every worker is recorded on the pay-sheet. This office also provides coloured cards to their workers on which attendance, weekly rest and leave of each worker is given and this is due to satisfy the workers and also maintaining records of the workers.

The function of Store Office is to receive and issue the items needed by various departments. Store Office maintain two registers called "daily register" and "Daily Receipt Register". In this regard, various departments give their demands of various items through requisition slip on which the signature of the head of the department is necessary. On the basis of this requisition slip, store keeper issues the items after recording it in the daily issue register. In this register, Indent No., Name of Article, Quality, Amount and the department is given.

* GENERAL STORES

* RAW MATERIALS STORES

* FINISHED GOODS STORES

In Kohinoor Industries Ltd. the store administration is controlled by Assistant Manager. The function of store is to receive and issue the items needed by various departments. So, we can subdivide these stores into following three main categories.

In this regard, production department sends demands of various items to General Manager and he the, checks the demands that whether it is required by the production department or not. After this he signs on these demands. Then these demands are written on a duplicate book. One copy of these demands is being kept in his record and one copy is being sent to the store incharge. If demanded items are present in the store, then the store keeper issues the same.

If the demanded items are not held in the store, then the store Incharge writes required items on a slip called "Indent Slip" and then this slip is presented to the General Manager, who signs the slip and send to the head office. Specimen of this indent card is given as under.

No. ---------- Kohinoor Industries Ltd. Date:-------

Kohinoor Nagar FSD.

S.No. Description of Department Quality Demand

Goods

Then head office purchases samples of demanded items and sends to the mills. At the mills, store incharge informs the production department that the required or samples of demanded items have come from head office. The section who requires these items checks these samples as to whether these are according to their requirements or not. Then, the order is given by the General Manager.

The head office sends these demanded items along with their bills and then these items are recorded by store incharge on Store Receipts Note. It is also recorded on store received ledger. From store received ledger these items are also recorded on the Bin-Card, while these Bin-Cards are attached with every type of item. Due to this Bin-Card it is very easy to check each item. The specimen is given as under:

A.C. Units

The demanded items which are available in the local market are purchased by the Assistant Manager. While Store Incharge checks all these items and then records on Store Receipt Register.

There is a book of requisition slip in every section of the production department which contains requisition slip in triplicate. If any section of production department requires anything, they have to fill requisition slip on which the signature of the head of the department is essential. Then the store keeper issues the items required after recording it in Daily Issue Register.

The following two reports are prepared by the Store Incharge.

This report is maintained daily and kept in a file. In this report issuance of demanded items to every department and balance of items are given. This report is presented daily to Assistant Manager and General Manager.

This report is prepared monthly. In this report the value of all items in the store is recorded at the end of every month. After preparation, report is presented to Assistant Manager who checks it and then sends to the head office.

Raw materials stores can be classified into following two main stores.

a. Bounded Warehouse Store:

A large portion of the raw material used in production department in Kohinoor Industries Limited is imported from the foreign countries, mostly form Japan. Thus when goods are imported from outside the country, then a custom duty is being paid to the government with seven days in the appropriate account. If the mills is not in a position to pay custom duty within seven days then the mills pledges it's bond to the government which is a security to the government. While this bond having greater value than the amount of this custom duty. This bon d is the promise by the mills to government that it will pay it's custom duty on the goods imported. In case of not payment of custom duty within appropriate period then this raw material is placed in bonded warehouse, which is under the control of government.

When duty has been paid to the government then the materials of bonded warehouse comes in duty pay store which means that custom duty has been paid on this material to the government.

For financing purposes, mills management sometimes pledges raw materials to the bank while bank gives loan in which raw materials are being pledged and in this case, the value of inventory is greater than the amount received as loan from the bank. Usually bank gives loan @ 75% of value of inventory which is called pledging of raw materials for financing purposes. When the management pays principal amount of loan along with interest, then mills can use this raw material in the process of production.

All exciseable goods placed in these stores are of two types:

a. E.B.-4 Stores:

Finished products are placed in this store while this store is under the control of excise office. After paying excise duty on finished goods, they can be brought outside the mills. Thus, when finished goods are despatched to the sales agents, mills pay excise duty on these finished goods. Deputy Superintendent of excise and custom signs on the excise challan which is an evidence that excise duty on the goods despatched is paid. In this challan, all description of goods, their types, quantities and amount of excise paid to the government are recorded. While this excise duty is deposited in National Bank of Pakistan in excise duty account. In this regard, three copies of challan are prepared, one copy is given to each driver, other is sent to the head office of the mills and the third copy is kept in the office of the mills.

b. R.G.I. Store:

All finished goods which are pledged to the bank are placed in this store.

When market conditions are not suitable for mills and mills are in need of capital, then mills pledges it's inventory as security to the bank and takes loan. While terms and conditions of the loan set between head office and the bank which is usually 75% of the inventory value.

* Finance Department

* Accounts Department

* Accounts Office of K.I.L.

* Books of Accounts

* Accounting Policies

It is very important for the smooth and steady operation of the business, whether it is small scale or large scale. It is so because in t he present days large amount of capital is needed and one can't provide a huge amount. So, financial management refers to those activities which are essential for searching out the large among of capital needed for the smooth operation of business.

Finance is being considered as the life blood of modern business and plays a key role in business organizations because without finance, there is nothing to plan and organize, direct, activate and control.

"Financial management is a set of activities which are concerned with the acquisition of funds and finding out the best uses for these funds."

Thus, finance is a study of revenues and expenditures of an individual or organization. This means that finance deals with raising of funds for current requirements. So, we can say that all the departments, sections and even a single task can't be completed effectively without finance. Therefore, all the departments depend upon finance department.

Kohinoor has it's own Finance Department in its premises. While this department is headed by Finance Manager of the mills. While Finance Manager is involved in the financial planning, future forecasting of financial needs and raising funds.

following are the main functions of the finance department.

a) Financial Planning

b) Procurement of funds

c) Finding out different sources for obtaining funds

d) Future of forecasting of financial needs

e) Carrying upon negotiations with creditors

f) Effective utilization of funds

The financial information of a business organization are communicated through this section of finance department.

"Accounting is an art of keeping records of transactions and financial affairs" Financial information are maintained in the form of statements by accounting section. This section is headed by assistant accounts manager under the management of senior finance manager. This department keeps records of all accounting transactions, prepares budgets and financial statements for the mills. While the account office of the mills is directly concerned with this department.

In this regard, account office of the mills sends cash-book, petty cash-book, vouchers, record book and this department keeps these books in it's record and then prepares annual financial statements on the basis of these books. Double entry system is followed and the financial year start from First October and ends on 30th September. While these financial statements are prepared mostly for two parties i.e. inside party and outside party.

Management is being considered as the inside party which takes necessary steps for planning and controlling the future activities on the basis of these statements. While the outside parties include owners, stockholders, bankers and creditors. Thus, we can say that accounting information provides a base for decision making and for a future operation.

1. To keep record of cash receipts and payments of the company.

2. To keep ledger accounts and the preparation of Trial balance and annual reports for these ledgers.

3. To maintain records of fixed assets and their depreciation.

4. To keep records of wages and salaries of employees.

5. To prepare various budgets such as production budgets, sales budgets, labour budgets, stores budgets and inventory budgets etc.

Accounts office is headed by an Accountant while staff of accounts office consists of an accountant, cashier and clerks. This office keeps records of all accounting transactions of the mills, such as daily production, receiving raw materials, despatching of goods, excise and custom, store expenses, maintenance & repairs and labour salaries and wages etc.

1. To maintain the records of all cash payments and cash received from the head office.

2. To prepare Journal, Ledger, Voucher Book and Cash Book.

3. To send these books to the head office of the company.

4. To pay wages and salaries, store expenses, excise and custom duties, freight charges and repair and maintenance.

Following are the main books which are used by the accounts office of K.I.L.

a) Journal:

This is the book of original entry prepared by the accounts office, while this book is used for recording, opening, closing and adjusting entries.

b) Ledger:

Ledger is the book which classify the accounts which brought from ledger. This ledger is divided vertically into two equal parts. The left hand half is known as Debit (Dr.) while the right hand half is known as credit (Cr.).

c) Cash-Book:

This is the book of original entry in which all those transactions are recorded which are related to cash receipts and payments. All cash receipts are recorded on debit side while all cash payments are recorded on credit side.

d) Petty Cash-Book:

This is also prepared by account office for recording all small sum of money with cashier to meet all expenses such as postage, telegrams, stationery and office sundries.

e) Voucher Record Book:

This is a register prepared by the accounts office for the purpose of recording vouchers.

The policies adopted by the company, which are consistent with those of the previous year (except those stated otherwise) are as follows:

1. ACCOUNTING CONVENTION:

These accounts have been prepared on the basis of historical cost convention except land building and machinery which are stated at revalued amount.

2. STAFF RETIREMENT BENEFITS:

The company operates a contributory provident fund for all its permanent employees and contributions, based on salaries and wages, are made monthly to cover the obligations. Gratuity is accounted for as and when paid.

3. TAXATION:

The charge is based on taxable income, if any, as adjusted for tax purposes and after taking into account all tax credits, rebates and available tax losses. Tax deducted from export sales u/s 80-CC is considered final discharge. No provision has been made for deferred taxation as the major timing differences are not expected to reverse for a considerable period. CURR

4. FOREIGN ENCY TRANSLATION:

Foreign liabilities (except those for which foreign exchange rates have been booked, and are translated at the fixed rates) are converted into local currency at the rate prevailing at the balance sheet date.

5. CONTINGENCIES AND COMMITMENTS:

These are accounted for as and when these become due.

6. FIXED ASSETS AND DEPRECIATION:

All fixed assets are shown at their purchase cost, except land, building and machinery which are stated at revalued amount, together with any incidental expenses of acquisition, including foreign exchange rate variance and interest accrued upto the date when the assets commence commercial production.

Depreciation is calculated so as to write off the cost of fixed assets, except freehold land, on a reducing balance basis using the normal rates currently applicable for tax purpose. However, this year the useful life of the machinery has been reviewed and depreciation is charged @ 5% instead of 10% in earlier years. A full year's depreciation is charged in the year of acquisition except major additions to machinery which are depreciated on prorate basis for the working period. No depreciation is charged in the year of disposal. Maintenance and normal repairs are charged to income as and when incurred while major renewals and improvements are capitalized.

7. ASSETS SUBJECT TO FINANCE LEASE:

These are stated at lower of present value of minimum lease payments under the lease agreements or the fair value of such assets. The aggregate amount of obligations relating to these assets are accounted for at net present value of liabilities. Depreciation on these assets is charged in line with normal depreciation policy adopted for assets owned by the company.

8. INVESTMENTS:

Investments are stated at cost and no provision is made for diminution in its value.

9. STORES, SPARES AND STOCKS:

Stores and spares - at average cost except stores in transit which valued at actual cost.

- Mill made - at moving average production cost.

Local purchases - at average purchase price.

10. REVENUE RECOGNITION

Sales are recorded on dispatch of goods to customers.

* OBJECTIVES OF PERSONNEL ADMINISTRATION

* FUNCTION OF PERSONAL ADMINISTRATION

* PERSONAL DETAILED FILES

* ATTENDANCE CARD

* LABOUR MANAGEMENT RELATIONS

The incharge of the personnel administration department is the labour and welfare officer, while this department deals with the labour affairs, such as maintenance of labour record, recruitment and selection of employees, wages and salaries of employees and promotion and discharge of employees.

Following are given the main objectives of personnel administration:

1. To help other Managers in solving their personnel problems.

2. To select right man for the right job.

3. To motivate the workforce.

4. To pay fair wages to the employees.

5. To provide better working conditions to employees.

6. To keep the record of employees.

7. To receive orders and policies from the head office and act upon them.

Following are given the main functions which are performed by the personnel administration in the organization.

1. Recruitment and selection

2. Promotion and Lay off

3. Wages and salary administration

4. Discipline and discharge

5. Training and development

6. Benefits and services

Following are the main policies, which are performed by the personnel administration in the organization.

1. Recruitment and selection

2. Promotion and Lay off

3. Wages and salary administration

4. Discipline and discharge

5. Training and development

6. Benefits and services

Recruitment of employees is made from time to time when it is considered necessary to promote the efficiency of the mills. Now, if any department of the mills requires an employee, then it is it's responsibility to determine the contents of the job to be performed and necessary qualifications for performing this particular job satisfactory. While this recruits and selects the best one employee with the consultation of HR & Admin Manager.

This personnel administration department follows a rigid employees selection system, which involves, interviews, selection test, medical examination and reference checks, while applications are given by the applicant on printed form, which is supplied by the mills management. Then labour officer screens out the applications and applicants are then called for an interview. Here it is important to note that the final authority of selection of employees is the employers of the mills.

Promotion is being considered necessary to motivate employees to the work, while in this mill; promotions are not based upon seniority or on merits. Since this is not a seasonal mill, thus there is no lay-off of the workers.

The decision to adopt a particular pay structure with pay grades is the responsibility of the top management. While the main responsibility of personnel administration is to pay fair wages to the employees according to their pay grades. There are following pay grades of the employees.

HR & Admin Manager, senior Manager Accounts and General Manager falls in special grade of top management

i) Grade A Spinning master, Deputy spinning master

ii) Grade B Junior officers, Accountant, Assistant Manager and labour officer.

iii) Grade C Supervisory staff, Assistant accountant, store incharge, security incharge, and cashier.

iv) Grade D Senior clerical staff, Accounts assistant, Dispenser and Typist.

v) Grade E Junior clerical staff, purchaser, Time keeper, Wrapping clerk and Cotton clerk etc.

vi) Grade F Driver, Watchman, Stock collies etc.

i) Grade I Foremen in all departments

ii) Grade II Senior Officer, Assistant Spinning master Production incharge.

iii) Grade III Supervisory staff, Mixing supervisor, Shift superintendent.

iv) Grade IV Head Fitter, Head electricians.

v) Grade V Fitters, electricians, Motor winders, welders and Blacksmith etc.

vi) Grade VI Ringer and other lower staff.

Workers are treated according to the rules and regulations of the organization under the factories Act 1934. If some one violates the orders then he is given full opportunity to explain and justify himself. Then if the performance or conduct of the employee is founded unsatisfactory or he remains absent from the work for 10 days, then he is discharged from his job by the manager HR & Admin.

There is no separate training institution for the employees. while employees are trained by the method of the on-the-job training. In this case, senior workers perform this duty of training.

Kohinoor Industries Ltd. provides following benefits and services to it's employees:

Profit Bonus is paid to all employees every year depending on profitability of the company.

Recreation allowance equal to one month basic pay is allowed to an employee who has completed yearly service without having absence or leave without pay to his credit during the year.

All employees whose basic wages + coat living allowance do no exceeds Rs.1000/-P.M are paid Rs.40?- P.M. as Attendance Allowance if they have no absence or leave without pay during the month.

All employees who are not entitled accommodation by the company are paid house rent allowance at the rate of 10% of the basic pay per month.

All employees of the mills are insured under State Life insurance. In case of any accident or death of employees, the insurance company pays insurance money to nominee.

Three types of leaves are given to the employees:

1. Privilege Leave (Annual Leaves)

2. Medical Leaves

3. Casual Leaves

i) For staff, 8 casual, 10 medical and 15 annual

ii) For officers 10 casual, 10 medical 15 annual.

Gratuity is granted by the mills on resignation from services or termination from services for any reason other than misconduct. While 20 years of services prescribed for the payment of gratuity by the company. The rate of payment of gratuity is 20 days wage for every completion year of services. The company follows the following formula for the payment of gratuity.

Salary x 20 days

Formula for Gratuity: --------------------------

30 days

Company also provides credit facilities to its workers without any interest. While this scheme is known as advance payment scheme and small amount is deducted from the employee’s wages to recover the credit granted by the company.

Like government employees this mills also pays dearness allowance to its workers.

Traveling allowances are paid to those workers who travel for the mills work.

The company issues uniforms to foremen, peons, watchmen and security staff at free of cost.

Accommodation is provided to about 80% of the employees. Electric, gas, water supply and flush system facilities are made available by the company.

High school for boys and girls, and primary school for both are functioning in the mills colony. The company provided beautiful buildings for schools. Till 1971, the Company was running these schools at it's own cost. After that the same were nationalized.

In the Welfare centre workers club building is provided. Shopping complex to provide essential goods also exists.

Company is running the mills canteen round the clock for workers welfare. Meals and tea are sold at subsidized rates. Company is contributing monthly subsidy Rs.24,000/- P.M. on this account.

In addition to the Social Security Hospital the company has it's own Medical Centre for those employees and their families who are not covered under the Social Security Scheme. Medical Officer and Para-medical staff is employed in the centre.

For the convenience of its employees the company has provided a very beautiful and commodious Mosque in the mills premises. The company bears all expenses of the Mosque including pay of the staff employed therein.

The MD is responsible for the overall operation of the company except some aspects of the Financial Management, which are looked by the MD (D.GI). The MD is the final responsibility for all aspects of the quality system.

The MR works on the behalf of the MD to ensure that SIL, quality management system operates as described in this document and is responsible for operating or program of quality audits and to present its results to the management review meeting.

(The MR is the works manager of the SIL, factory).

Works manager is responsible for all activities carried out the factory and reports to MD. He assisted by in charges and supervisors of various departments in his work. Production function is headed by the production supervisors who looks after the whole process and repots to works manager.

The maintenance function is managed by the maintenance in charge who reports to works manager.

The SPM is responsible for all the functions pertaining to local and offshore procurements. He also contacts suppliers for ultimate approval and evaluation of suppliers/ venders.

GM sales is responsible for all marketing activities carried out by the company and reports to the MD. He is responsible for the sale of company’s products in the local as well as the export market and for monitoring market trends and forecasting future demands. He also monitors the quality of the company’s products and recommends improvements whenever required. He is also responsible for the handling of customer complaints.

He is responsible for carrying out marketing research, handling export inquires, advertising and promotional activities.

Production Supervisor

Production department is managed by production supervisor who reports the works manager.

The Q.C. incharge reports the works manager. He is responsible for maintaining standards of products. He is responsible for the inspection of the incoming material that affects quality. He ensures that final inspection is carried out as per documented procedures. He is responsible for the maintaining of the documented records of inspected products.

Kohinoor Industries Ltd. is basically a manufacturing concern which produces industrial goods (thread) that is used as a raw material in textile mills and is sold through it's sales agent in the markets. Production department is being considered as the origin of all activities in a manufacturing concern. The head of this department is called spinning master who looks after the quantity and quality of the production, while he is also responsible for the maintenance of machines. If there is any sort of technical fault, then he directs mechanical foreman and fitters.

AT Present KIL is engaged in producing variety of yarn (combed, carded)

20/1 CMD

72/1 CMD

52/1 CMD

80/1 CMD

20/1 CD

32/1 CD

24PC CD

30PC CD

40PC CD

The main function of production department are given as under:

1. To manufacture thread of different counts.

2. To utilize the available plant capacity in proper way

3. To control the finished products, work in process and material inventories.

4. To pack thread cones into the bags.

5. To provide information about production to the account office daily and accounts office then sends them to head office.

Main sections of production department are given as under:

The functions of blow room are as under:

a) Opening raw materials

b) Mixing of raw materials

In this section, polyester, viscose and cotton are used as raw materials. First of all raw materials comes in the form of bales and is opened by workers. After this, material is put into a bale breaker which automatically weights this material and mixes it in the ratio of 65% polyester and 35% viscose. In this section, 30 bale breakers are installed, 15 for polyester and 15 for viscose. Cotton is opened by hands.

In this section, material is regularly mixed and silver is made from this material. There are 10 big pipes installed which bring the sliver from blow room to carding section.

When sliver comes from carding section, it is not straight while this becomes straight to some extent in this section. In this section 35 drawing machines are working and production is measured in pounds. While every machine produces 200 pounds per hour.

40 simplex machines are working in this section while every simplex having 116 spindles. In this section, silver is converted into roving which is slightly twisted. While silver is brought from drawing section. After this, roving is brought to the ring section.

Roving from simplex is converted into thread in this section. In this section 78 ring machines are installed while each machine having "600" spindles, thus total number of 46800 spindles are working in this section. The production per spindle is 4.5 ounces per shift, while the total production of this section is 13163 pounds per shift. In this section three types of threads can be produced which are called 20 thread, 34 thread and 44 thread.

From ring section, thread is brought to cone winding section. In this section, thread is wound on paper cones and is then packed in the bags. In each bag 40 cones of thread are packed having a weight of 100 pounds.

Quality control laboratory is being regarded as the essential section in which the best quality of product is observed. While this laboratory having modern equipments which analysis the production of the mills. While these analyses are presented to General Manager who also having specialization in textile fields.

General Manager checks these analyses which is in the form of a report and then removes the defects of production for achieving the best quality of thread. The staff of laboratory consists of laboratory incharge, laboratory assistant, wrapping clerks and wrapping boys.

The management of Kohinoor Industries Ltd. defines the quality as:

A) Consistently provide the products that meet the quality expectations of our customers.

B) Actively pursue in ever improving the quality by focusing on our processes and procedures.

ISO 9002 certificate is given to only those industries which do not design but only produce products.

This certificate has been awarded to KIL in recognition of the organization's quality system which complies with ISO 9002: 1994.

Certificate is awarded by united register of systems ltd for the manufacturing of yarn

Certificate No: 1674

Date of Issue: 12 October 1998

Expiry Date October 2003

A well organized marketing department is necessary for every modern organization because a business can compete only if it's marketing performance is adequate. While we can define marketing as under:

"Marketing is the process of adjusting the resources of the business firm to meet the needs of the market".

While these resources of the business firm are as under which are also called the "Marketing Mix".

- Product

- Promotion

- Channel of Distribution

- Price

These above four variables are those which a business firm can change or control and to keep their customers satisfied. We can say that marketing department in any organization plays an important role in the success of a business. Kohinoor having a well organized marketing department, while this department is controlled by it's marketing manager. There are two assistant managers one for local and other for export marketing.

Marketing department of Kohinoor Industries Ltd. performs following main functions:

1. To dispose off the products at predetermined prices.

2. To convey information about market demand to it's top management.

3. To send information about sales and inventory to the top management and the accounting department.

4. To convey information about latest prices and competition to the top management.

5. To raise the sales through visits to the markets as well as to bring suggestions about changes

Kohinoor Industries Limited reported sales of 1.94 billion Pakistan Rupees (US$33.04 million) for the fiscal year ending September of 2001. This represents a very small increase of 1.1% versus 2000, when the company's sales were 1.92 billion Pakistan Rupees. Despite this increase, sales are still well below the level achieved in 1999, when Kohinoor Industries Limited reported sales of 2.38 billion Pakistan Rupees.