1. RICE
Assignment
Of
AUDIT AND ASSURANCE
Topic
(Company intro, structure, departments detail with
hierarchy and internal control)
Submitted to: Sir.Khurram shahzad
Submitted by:Group name
Friend finder (B.B.A’7’B)
Group member’s names
Arslanakram 11480
Ammadqadir 11482
Usmanzahoor 11461
Haseeb
11409
Junaidwaqas 11478
Irfanshabir
11442
1

2. RICE
Contents
Acknowledgement ..................................................................................... 3
INTRODUCTION ..................................................................................... 4
Mission ...................................................................................................... 5
Vision......................................................................................................... 5
Core value .................................................................................................. 6
COMPANY STRUCTURE OF BASMA RICE ....................................... 7
SYSTEMS
OF
ACCOUNTS,
AUDIT
AND
FINANCE
DEPARTMENT ........................................................................................ 8
Finance.................................................................................................... 8
Accounts ............................................................................................... 10
Auditor ..................................................................................................... 13
Hierarchy of finance department ............................................................. 14
Hierarchy of accounts and audit department........................................... 15
Internal control system ............................................................................ 16
Reference ................................................................................................. 18
2

3. RICE
Acknowledgement
In the name of Allah, the most beneficent & the Merciful.
Firstly, we all likely to thank mighty Allah who provides us knowledge,
energy & skills to get opportunities & to increase our knowledge &
experience by completing this project.
Secondly,
we
especially
thank
to
our
course
instructor
Sir.khurramshahzadWho guides us at every step & every aspect of this
assignment, so that’s competed successfully
3

4. RICE
INTRODUCTION
BASMA Rice Mills (Pvt) Ltd – (BRM) www.basmarice.com is one of the group companies,
while the flagship company is Standpharm Pakistan (Pvt) Ltd – (SPL) www.standpharm.com
The parent company of the group SPL was incorporated in 1969 and from a humble beginning
today is among the top 30 Pharmaceuticals concerns out of more than 700 manufacturers
including about 45 multinational companies operating in Pakistan. With a turnover in excess of
PKR 700 million for 2009 and a projected turnover of over PKR 1,000 million for 2010, SPL is
envisioning improving its ranking.
BRM managed a turnover in excess of PKR 760 million in the year 2009 and has projected a
turnover in excess of PKR 1,200 million for 2010. The growth in turnover has been consistent
though with some wavering in line with the global trends. A summary of local sales and export
sales over the last 8 years is attached. The realizable value, as going concern, of fixed assets
only, of BRM is in excess of PKR 500 million. The yield on average funds employed has
consistently remained above 25% over the years.
Key products marketed by BRM include local bulk trade of rice, export of Basmati Brown rice,
export of white rice, export of parboiled rice, export of BRM branded rice and facilitating
branding for customers. Branding for customers include concept development, printing and
packaging.
Markets catered to by BRM include the globe, with satisfied customers in Australia, UK,
Holland, Portugal, Ireland, Germany, USA, Canada, UAE, Saudi Arabia, Oman, Mauritius and
Seychelles.
We specialise in the export of different qualities of Basmati rice from brown, de-husked, sorted
and graded Basmati rice to par-boiled and raw-milled 100% sorted and graded qualities. Basmati
rice exported by Basma Rice Mills has a unique aroma and special taste compared to other
specialised brands worldwide.
This is primarily attributed to the extremely fertile soil and climatic conditions in the region of
Punjab suitable for rice production, thus ensuring that this quality of Basmati rice cannot be
grown under any kind of artificially created or simulated conditions.
4

5. RICE
Mission
To maintain the age-old traditional quality and taste of Basmati Rice By innovative
approach and advanced technology, processes and products.To become a global
supplier, delivering quality products and services resulting in customers delight.
Vision
We see ourselves as a name of best taste and quality that offers varieties of rice to
customers worldwide through focusing on customer satisfaction with our
traditional flavor and goodness. We envision setting set up ready-to-eat facility for
which 56000 mts land already been acquired to cater to authentic Pakistani food
lovers across the world. Our vision is to be a pioneer in providing healthy and
high-quality ready-to-eat rice varieties for all age0groups and sections of society.
5

6. RICE
Core value
Quality Control
Quality is strategic to our strength. We have a strong commitment towards providing
homogeneous quality to our buyers, which is why quality management in the company starts at
the grassroots level and continues till the product finally reaches the consumer. Quality control
processes are religiously adhered to in order to ensure uniformity, which we achieve in three
ways:
Quality Control through Procurements
We select the best farmers in the rice growing area of Punjab. Our field staff constantly monitors
paddy fields from sowing to harvesting. They advise the farmers on the correct application of
fertilizers and pesticides to produce healthy grains of rice without chemical residue. After
harvesting and husking, hundreds of samples are drawn from the fields and examined in our labs
for final selection. After procurement, the selected stock is stored for aging till the rice attains
maturity. All stocks are numbered and a record is maintained even after processing and export.
Quality Control System
Samples are drawn during different stages of processing and milling at regular hourly intervals
and tested in the lab to constantly monitor the uniformity in whiteness degree, moisture content,
average grain length (AGL), broken percentage and colour. These hourly lab results are entered
into the computer and are available to buyers on request.
Quality Control through Grading &Colour Sorting
The grading system consists of five graders installed in three different stages of milling and
processing. This enables them to ensure uniformity in grain length and also control the broken
percentage according to the specific requirements of our buyers. In order to obtain uniformity in
grain colour, we have installed a color sorter – a computerized, state-of-the-art machine
considered throughout the world to be the top-of-the-line colour sorter.
Custom Branding and Packaging
Our expertise is restricted not only to providing excellent quality Basmati rice but also providing
our valued international customers with their desired brands and customized packaging. After all,
the company’s products have to compete all over the world and packaging forms an important
part of the product image in the consumer’s mind. Special care is therefore taken to make the
packaging distinctive, attractive and hygienic, ensuring complete safety against moisture, pests,
insects and dust.
It is the collective effort of our professional team which changes Basmati rice from a commodity
to a high grade product of international standard. We pack our product under the brand name of
our buyer’s choice in environment-friendly, bio-degradable cotton, paper and cardboard in 1, 2,
5, 10 & 20kg sizes.
6

7. RICE
COMPANY STRUCTURE OF BASMA RICE
BASMA has a dedicated team of professionals who have years of experience under their arm
which is ably supported by layers of an operating team consisting of nearly 100 members, in the
chain of procurement, production and marketing process. A profile of the key Management /
Professional team members is as under.
Mr. farooq a. alvi – chief executive of basma rice mills (pvt.) ltd. and chief executive of
standpharmPakistan (pvt.) ltd.
Mr. Alvi joined the group operations in 1986 as Chief Executive of Standpharm. Mr. Alvi is a
Professional Accountant with experience spanning over a period of 15 years. As a professional
accountant, he was associated with Auditors of international standing and was exposed to the
operations of various national and multinational mega companies. Mr. Alvi is responsible for the
group’s export business, mainly of rice.
M.zafarullah – director of basma rice mills (pvt.) ltd.
Mr. Zafarullah is a post graduate in Economics. He has served the companying industry for over
a period of 30 years with two decades in the Middle East. He has last worked as the unit head of
the Islamic companying group with the Saudi British Company, a subsidiary of HSBC.
Col.
(R)
Zafar
H.
Gill
–
General
Manager
Procurement
Mr Gill graduated in Agriculture from the University of Agriculture, Faisalabad in the year 1963.
After completing education, he had worked as Agriculture Farm Manager for 5 years before
getting commission in the Pakistan Army. While working as Farm Manager, he had looked after
about 1000 Acres cultivation of Rice, Wheat & Jute. He had served the Army until 1992 and
retired as a Lieutenant Colonel. Thereafter, he joined Army Welfare Trust Rice Mills as Manager
till 1998. In 1998 he joined Basma Rice Mills and looked after construction of the Mills building
& installation/erection of machinery. He also worked as the Head of Production while his current
responsibilities include purchasing of paddy/rice.
Asifrana- General Manager, Finance & Corporate Services and Company Secretary
Asifrana is responsible for the delivery of financial and corporate services, including finance and
accounting, IT and business systems, governance risk and compliance, facilities and office
services, and management of the Export Efficiency Powers.
Naveedakram- Finance & Corporate Services Coordinator
Naveedakramis PA to the General Manager for Finance & Corporate Services and Company
Secretary and also provides administrative support to the whole team.
7

8. RICE
Hammadaltaf - Finance Manager
Hammadaltaf is responsible for all aspects of financial accounting and the management of the
accounts receivable, accounts payable and companying functions. In addition the role is
responsible for payroll, privacy issues and the preparation of the basma statutory accounts.
Muhammad Ali - Management Accountant
Muhammad Ali is responsible for the development, monitoring and reporting of R&D and
marketing programs. This includes monthly, quarterly and annual reporting of actual
performance against budgets and forecasts.
Kashifsattar - Assistant Accountant
Kashifsattar is responsible for accounts receivable including invoicing.
Saadjaveed khan - Corporate Accountant
Saadjaveed khan is responsible for payroll processing, reconciliations and companying. In
addition, Joseph acts as assistant to the Finance Manager.
Faiza Khan - Internal Audit Manager
Faiza khans check the account and make auditor report.
Majidsaleem - Office Services Manager and Export Licensing Officer
Majidsaleem is responsible for basma facilities management, purchasing and reception services.
He also manages the administration of the Export Efficiency Powers, including issuing licenses,
reviewing compliance and assisting in the review of these powers
SYSTEMS OF ACCOUNTS, AUDIT AND FINANCE DEPARTMENT
Finance
Daily Bank Position
 Arrange cash in our bank accounts according to issued Cheques
 Call to all banks on 09:30 am and confirm the available balances, after that call to all
head cashiers to deposit the cash in the banks where we need it.
 Coordinate with store head cashiers and reconcile the cash on daily basis.
Working on Accounts Payable Module:





Check and approve all kind of accounts payable vouchers in Oracle Financials.
Booking of monthly expenses of all locations and head office in Oracle Financials.
Open and close the accounting periods in oracle financials.
Validation of payables in Oracle Financials.
Create accounting and processing payables work to general ledger module.
8

9. RICE
 Fetching of all credit and cash invoices from Navision to integration and then from
integration to oracle financials.
 Maintaining the supplier’s ledgers.
Working on General Ledger Module:
 Check and approve all kind of journal vouchers.
 Booking of expenses in Oracle Financials.
 Posting of all entries to their respective heads.
Working on Accounts Receivable Module:
 Booking of receivables from our all parties in Receivable module.
Working on Trial Balance
 After completion of all processes from payables and general ledger module update the
trial balance on monthly basis.
 Export trial balance from oracle for making the monthly profit and loss account.
 Summarize the trial balance data head wise for monthly and annual accounts.
Working On fixed Assets Module:
 Addition and deletion of company fixed assets.
 Booking of fixed assets in Oracle Financials
Working On Microsoft Navision:
 Open new vendor account in Navision on request of buyers and then update in oracle.
 Update the daily sales report on daily basis.
 Analyze and summarize different kind of reports from Navision.
Conduct Stock Takes For All locations:










Stock takes of all locations on random basis.
On stock take night before starting post all un-posted documents in Navision.
Freeze data for the required divisions.
Update the database before punching data in laptops.
After completion of stock counting item wise scanning and punching of stock in laptops.
As the data punching completes then collect data from both laptops and compile in a
master file.
Execute query after completion of all data and save in excel
Make a report with respect of divisions and difference in value.
These reports are hand over to store manager for verification of data and then update the
report after all kind of verifications.
Filter the data from verified report and send to it for upload in Navision.
9

10. RICE
 As the data upload then after verification of correct validation post in Navision to update
the inventory.
Working on salaries and over time
Checking and Booking:
 Provide deductions from employees issued against provident fund and against salary to
HR department on Monthly basis.
 Checking and booking of Salaries Department wise in Oracle.
 Checking and booking of Social Security Department wise in Oracle.
 Checking and booking of Employee’s Old Age Benefit Department wise in Oracle.
 Checking and booking of Over Time Department wise in Oracle.
 Booking of recovery from employees in form of mess, phone, salary and update the
ledgers by booking of entries in Oracle.
Payment of Salaries from Banks:
Transfer salaries to employee’s bank accounts through bank transfer letter printed on Company
letter head which have the following detail,




Title of Account
Bank Account Number
Payable amount
Signed by two signing authorities
Payment to SNS and Consignment Parties:




Monthly Payments of Vendors.
Monthly Payments of Consignment Vendors.
Cost of goods sold against above vendors
Rental income from above parties
Assist to Manager Finance:
 Reporting on daily basis
 Making on monthly accounts
 At the time of annual audit
Accounts
Sales Posting
 At early morning confirm the sales amount from store cashiers.
 Match the sales amount shown in Navision with actual cash figure at all stores.
 After confirmation of sales post it in Navision.
10

11. RICE
Sales Cash deposits and direct payments to vendors:
 Reconcile the sales cash according to vendor payments and used for store.
 After reconciling cash on excel post all transactions to Oracle Financial
 All the transactions consist of following natures,
 Actual Sales amount post in oracle.
 Sales cash deposit in bank post in oracle.
 Credit sales transfer to alfalah bank post in oracle.
 All petty expenses at store posted in oracle.
 Post all payments to vendors in oracle.
Verification of Sales Cash used at stores:







Before posting all transactions in oracle, verify the following things,
Casting of all petty expenses.
All store expenses should be signed by store manager and store cashier.
The signed expenses should be approved by Regional retail manager
Cash Reconciliations:
After booking of all store receipts and payments reconcile the cash in oracle financial.
The closing balance of oracle financial should be equal to the amount issued to store
for petty expenses and for till cash.
 If is there any difference the store cashier will explain the reason of tendency.
Checking of Reconciliation from Finance Manager:
 The cash reconciliation statement should be checked and signed by finance manager.
Filling of company Expenses and Z-Reports:
 All the store expense vouchers should be filed with respect of their month and
voucher number assigned from oracle financial.
 Z-Reports received from store should attach with the statement printed from Navision
and then punched in the file with respect of store and month.
Accounting/Bookkeeping





Cash – consecutive record of cash receipts and payments
General Journal
General Ledger
Subsidiary ledgers shall be reconciled with the general ledger at least monthly.
There will be adequate and appropriate supervision of employees with sufficient
employee backup to ensure that accounts and ledgers are adequately maintained.
 The Accounts & Finance Manager to sight and review all receipt reversals, journals,
credit notes, and other transactions
Cash Received
 Cash received shall be recorded by an entry for each individual transaction.
 The invoices record shall indicate the mode of payment, Cheques, cash,
11

12. RICE
 Receipts shall be issued in numerical sequence
Banking
 Cash received by an officer or employee of BASMA must be paid into a BASMA
bank account.
 Cash received by or on behalf of BASMA must be banked as soon as possible on or after
the day of receipt.
 Banking shall be reconciled with receipts.
 In the intervening periods between banking, Cash received will be deposited in the safe.
Bank Accounts
 Bank accounts will be operated exclusively for the purpose of conducting BASMA
business. Those presently approved:
 Chief Executive Officer
 Financial Manager At least two authorized bank signatories are required to disbursements
of cash from bank accounts.
 All accounts will be in the name of BASMA Corporation (Pvt) Limited accounts can only
be opened with the approval of the Chief Executive Officer and Director
 Bank reconciliation for each bank account operated by BASMA shall be prepared
monthly.
Accounts for Payment and Disbursements









All accounts for payment shall be certified by an Authorized Officer as to:
The receipt of the goods and services being in accordance with the
Relevant Purchase order
The prices charged being fair and reasonable
The calculations and additions being correct
The allocation of the payment to the correct ledger account
Payments/disbursements is to be made by the crossed Cheques
Cheques shall be on BASMA stationery, pre-numbered and issued in numerical sequence
Unused Cheques shall be in the custody of the Accounts Payable Officer who shall
maintain a register
Purchasing







Procurement will be undertaken by BASMA in a way which:
Encourages purchases being made from a registered Suppliers or from Open Markets
All the purchases must be made according to the demand
Proper documentation must be made by the purchase managers
All the purchase Orders Must be signed by the departmental purchaser
All the Purchases Orders must be matched by the Good received Notes
Salaries and Wages Payroll
Records will be maintained in respect all employees of Q-Mart showing Gross salary
or wages
12

13. RICE




Tax and details of all other payments and deductions
Sick, annual, long service and other leave available and taken
Allocation of time worked on jobs
Salaries and wages will be paid on the basis of attendance recorded on an approved
timesheet, except for employees on “no fixed hours” Contracts
 Time sheets will be mailed by the store Manager to the H.R manager
 All claims for payment of overtime must be authorized by the relevant manager
before being paid.
Auditor
Purpose internal auditing department
 To provide independent objectives assurance and consulting services designed to add
value and improve the organizations operations.
 To help the organization accomplish its objectives by bringing a systematic, disciplined
approach to evaluate and improve the effectives of risk management, control and
governance processes.
Present auditor
The present auditor faiza khan retire and being eligible, officer for reappointment. The auditor
has recommended their reappoint as auditors of the company.
Audit committee
The audit committee was established to assist the director in discharging their responsibilities
towards company. Audit committee’s responsibilitiesincludes, reviewing reports of the
company’s financial results, monitoring internal audit functions and compliance with relevant
statutory requirements, to assist the board in discharging its responsibilities for safeguarding of
company’s assets,development and implementation of effective internal control system
The committee consists of three members, including the chairman of the committee who are nonexecutive directors.
The audit committee meets at least four time in a year and additional meetings can be convened
by the chairman of the committee whenever necessary.
13

14. RICE
Hierarchy of finance department
General Manager, Finance &
Corporate Services and Company
Secretary
Finance &
Corporate
Services
Coordinator
Finance
Manager
General Manager, Finance & Corporate Services and Company Secretary
Asifrana is responsible for the delivery of financial and corporate services, including finance and
accounting, IT and business systems, governance risk and compliance, facilities and office
services, and management of the Export Efficiency Powers.
Finance & Corporate Services Coordinator
Naveedakram is PA to the General Manager for Finance & Corporate Services and Company
Secretary and also provides administrative support to the whole team.
Finance Manager
Hammadaltaf is responsible for all aspects of financial accounting and the management of the
accounts receivable, accounts payable and companying functions. In addition the role is
responsible for payroll, privacy issues and the preparation of the basma statutory accounts.
14

15. RICE
Hierarchy of accounts and audit department
Management Accountant
Office Services Manager and
Export Licensing Officer
Assistant Accountant
Corporate Accountant
Internal Audit Manager
Muhammad Ali - Management Accountant
Muhammad Ali is responsible for the development, monitoring and reporting of R&D and
marketing programs. This includes monthly, quarterly and annual reporting of actual
performance against budgets and forecasts.
Kashifsattar - Assistant Accountant
Kashifsattar is responsible for accounts receivable including invoicing.
Saadjaveed khan - Corporate Accountant
Saadjaveed khan is responsible for payroll processing, reconciliations and companying. In
addition, Joseph acts as assistant to the Finance Manager.
Faiza Khan - Internal Audit Manager
Faiza khans check the account and make auditor report.
Majidsaleem - Office Services Manager and Export Licensing Officer
Majidsaleem is responsible for basma facilities management, purchasing and reception services.
He also manages the administration of the Export Efficiency Powers, including issuing licenses,
reviewing compliance and assisting in the review of these powers
15

16. RICE
Internal control system
Internal control
The company management is responsible to establish and maintain an adequate and effective
system of internal controls and procedures. The management is also responsible for evaluating
the effectiveness of the company internal control system that covers material matters by
identifying control objective and reviewing significant policies and procedures.
The scope of Audit and Risk Review Group (A & RRG), independent from line management,
inter-alia includes, review and assessment of the adequacy and effectiveness of the control
activities across the Company as well as to ensure implementation of and compliance with all the
prescribed policies and procedures. All significant and material findings of the internal audit
reviews are reported to the Audit Committee of the Board of Directors. The Audit Committee
actively monitors implementations to ensure that identified risks are mitigated to safeguard the
interest of the Company.
Operations Group is entrusted with the responsibility of expediting rectification of irregularities
and control lapses in company’ operations and various controlling offices pointed out through
audit reviews. Vigorous efforts are made by Operations Group to improve the Control
Environment at grass root level by continuous review & streamlining of procedures to prevent &
rectify control lapses as well as imparting training at various levels. The Compliance Group,
through its regional offices, ensures adherence to the regulatory requirements and Company’s
internal policies and procedures, with specific emphasis on KYC/AML.
The Company’s internal control system has been designed to provide reasonable assurance to the
Company’s management and Board of Directors. All Internal Control Systems, no matter how
well designed, have inherent limitations that they may not entirely eliminate misstatements. Also
projections of evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions or that the degree of compliance with
the policies or procedures may deteriorate. However, control activities are ongoing process that
includes identification, evaluation and management of significant risks faced by the Company.
Recognizing it to be an ongoing process, the Management of BASMACompany has adopted an
internationally accepted Internal Control COSO Framework, in accordance with guidelines on
Internal Controls from the State Company of Pakistan. BASMA Company has completed the
first four stages of the internal control program as per these guidelines, which include mapping
and documentation of AS-IS processes and controls in the form of detailed process flow charts,
identification of gaps and requisite recommendations, development of remediation plans and
16

17. RICE
management testing plans. In addition, the management testing framework and entity selection
criteria have also been developed for ensuring an ongoing operating effectiveness of the key
controls. Currently the Company is in the phase of implementing the management testing plans
and project initiatives, as planned. This will be followed by quality assurance and validation of
the initiatives completed.
The Board of Directors being ultimately responsible for the internal control system endorses the
management evaluation and efforts to adopt above mentioned internationally accepted standards
in improving controls and processes to ensure better risk mitigation.
17

18. RICE
Reference
http://basmarice.com/
Or
Personally visit of BASMA
18