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Executive Summary: The Pakistan Textile Industry
Executive Summary: The Pakistan Textile Industry
EXECUTIVE SUMMARY
K.M.L has grown from a cotton export house into the premier business group
of Pakistan with 5 listed companies, concentrating on 3 core businesses; Textiles,
Cement and Power Generation. Today, K.M.L is considered to be at par with
multinationals operating locally in terms of its quality products and management
skills.
ESTABLISHED CAPACITY
The textile industry of Pakistan has a total established spinning capacity of
1550 million kgs of yarn, weaving capacity of 4368 million square meters of fabric
and finishing capacity of 4000 million square meters. The industry has a production
capacity of 670 million units of garments, 400 million units of knitwear and 53
million kgs of towels. The industry has a total of 1221 units engaged in ginning and
442 units engaged in spinning. There are around 124 large units that undertake
weaving and 425 small units. There are around 20600 power looms in operation in the
industry. The industry also houses around 10 large finishing units and 625 small units.
Pakistan’s textile industry has about 50 large and 2500 small garment
manufacturing units. Moreover, it also houses around 600 knitwear-producing units
and 400 towel-producing units.
CONTRIBUTION TO EXPORTS
According to recent figures, the Pakistan textile industry contributes more than
60% to the country’s total exports, which amounts to around 5.2 billion US dollars.
The industry contributes around 46% to the total output produced in the country. In
Asia, Pakistan is the 8th largest exporter of textile products.
EXHIBITIONS
Most of these small workshops are shy or afraid of getting registered or
displaying their products, mainly from the fear of the revenue collection, labor
controlling and other government regulating agencies. This fear keeps them away
from the mainstream Industry. This also leads to the lack of interaction among the
small scale, medium scale and higher level industry for a purposeful vendor
development.
National Exhibitions held annually can be very helpful in bringing out the
skills, the range of products and opportunities of group collaboration. It will help the
planners and large scale engineering industry in defining the way for developing skills
in order to make this sector strong and viable.
The interaction between the foreign textile manufacturing industries could also
be enhanced by facilitating the indigenous Textile Engineering Industry to participate
in the specialized Exhibitions and fairs being held in those countries.
INTRODUCTION OF ORGANIZATION
The Kohinoor Maple Leaf Group was born from the trifurcation of the Saigol
group of companies and is a reputable and leading manufacturer of textiles and
cement. KTMG comprises of Kohinoor Textile Mills limited (KTML) and Maple
Leaf Cement factory limited (MLCF). Both companies are incorporated in Pakistan
and are listed on three stock exchanges of the country.
CEMENT
Maple Leaf Cement is the third largest cement factory in Pakistan. It was set
up in 1956 as a joint collaboration between the West Pakistan Industrial Development
Corporation and the government of Canada. It is strategically located at Daudkhel
(District Mianwali) in Northern Pakistan, which is an area rich in raw materials
required for the production of cement. Kohinoor acquired the ownership and
management of Maple Leaf Cement under the privatization policy of the government
of Pakistan in 1992. Presently Kohinoor Mills Ltd is the holding company for Maple
Leaf cement...
TEXTILES
KML was incorporated in 1987 at Mangamandi and is one of the oldest
companies of Pakistan with over 50 years experience in textile manufacturing. It was
initially set up as a weaving project with 256 looms. However, after decades of
aggressive expansion and modernization KML has emerged into a fully vertically
integrated home textiles company with state of the art capabilities for Weaving,
Dyeing, Hosiery, Genertek, and Hometex. The company has a diverse customer base
with sales in both the local and export markets. The main international markets
include Asia, Europe, USA and Australia.
COMPANY INFORMATION
BOARD OF DIRECROTS
Mr. Aamir Fayyaz Sheikh Chief Executive/ Chairman
Mr. Asad Fayyaz Sheikh
Mr. Ali Fayyaz Sheikh
Mr. Rashid Ahmad
Mr. Aamir Ameen NIT Nominee
Mr. Salman Akram Raja
Mr. Syed Mohsin Raza Naqvi
AUDIT COMMITTEE
Mr. Rashid Ahmad Chairman
Mr. Aamir Fayyaz Sheikh Member
Mr. Ali Fayyaz Sheikh Member
CHIEF FINANCIAL OFFICERS:-
Mr. Syed Mohsin Raza Naqvi
HEAD OF INTERNAL AUDIT
Mr. Zeeshan Khurram
COMPANY SECRETARY
Mr. Muhammad Rizwan Khan
AUDITORS
M/S Riaz Ahmad & Company
Chartered Accountant
BANKERS
AL BARAKA ISLAMIC BANK B.S.C (E.C)
ALLIED BANK LIMITED
ASKARI BANK LIMITED
BANK AL-FALAH LIMITED
M.D
G.M G.M
Marketing Operations
Vision
To transform the company into a modern and dynamic yarn, cloth and processed cloth
and finished product manufacturing company with highly professionals and fully
equipped to play a meaningful role on sustain able basis in the economy of Pakistan.
To transform the company into a modern and dynamic power generating company
with highly professionals and fully equipped to play a meaningful role on sustainable
basis in the economy of Pakistan.
Mission
To provide quality products to customers and explore new markets to promote/expand
sales of the company through good governance and foster a sound and dynamic team,
so as to achieve optimum prices of products of the company for sustainable and
equitable growth and prosperity of the company.
DIVISIONS OF K.M.L
Kohinoor Hosiery Page 8
Kohinoor Textile Mills Internship Report
Europe
Next Mango
Zara Brushka
C&A British Home Store
Hema Carrefour
Rose By French Connection
Farah UK Tema
Amadues Jeans
Australia
Yakka King Gee
Charles Parsons Farah
South Africa:
Wools Worth
VARIOUS DEPARTMENTS
Marketing Department
Finance Department
H. R Department
P.P.C Department
VEHICLE DOCUMENTATION
After my manual completion I have been given the chance to use their system
and they assigned me a task to enter the record of employees who are using vehicles
of K.M.L.
And it was oracle based program in which the software was already installed
of H.R related activities. This was H.R.I.S, it included
• Appraisals
• Transportation
• Wages
• Bonuses
Etc…..
And I enter the data of transportation of almost 400 employees in a day. This
data included
• Employee I.D
• Route
• Stop
• Vehicle Number
5th DAY
On 10th of June I did some more data entry of transportation along with some
handling of documents in files and arrange the files in drawer. This work is all about
the activities which we have read in our semester but there is a difference in the
practical work and bookish knowledge.
SUMMARY OF TRANSPORTATION
After entering data related to transportation, I had to sort out the members of
other functions like weaving, dyeing, apparel(Home Tax), Genertek, Q- Mart, Pool,
because we are dealing with hosiery function so we got to make data related to the
concerned function.
6TH DAY
REIGNED EMPLOYEE’S FINAL SETTLEMENT
That day was the big day for me because I was given the chance to do the
main work of Hosiery’s H.R. There were 59 people who resigned from their job and
they had their final settlements. There were following major things that we had to
look…….
REARRANGE
First I had to rearrange the files according to their department in Hosiery like
linking, boarding, boarding hall#1, 2, 3, engineering, knitting team A, B, Quality
Assurance, W.I.P.C.
EMPLOYEE’S DETAIL
The employee’s details was based on
• Employee I.D
• Employee Name
• Father Name
• Date of Joining
• Date of Leaving
• Presents
PRESENTS
Then I had to enter the presents in the month of April, May and June in the
system and calculate in the system.
BREAK UP OF SALARIES
The break up of salaries was based on the basic and the allowances, there were
categories of 6,000, 8000, 8100, 21000, 28000 and the basic was 55% of the gross pay
and I had to calculate the settlement according to the days presents of the employees
in the month.
G.P.FUND
The G.P.Fund also had to pay back to the resigned employees and that’s been
added by 10% of the basic in the sum of G.P.Fund and it added doubled each month.
For example if the amount of G.P.Fund is 500 for the month, then it will be added
500+500. And 500 once deducted from the basic salary.
DEDUCTIONS
The deductions included
• Advance salary
• Zakat (applied on 16,228 or above of G.P.Fund)
• Advance G.P.Fund
• Interest on G.P.Fund
• Canteen Expense
MANUAL CALCULATION
If the data is not available in the system then we had to calculate the
settlement by manually.
SYSTEM CALCULATION
If the data is available in the system according to the employee I.D. Then we
simply had to give the print option and got the settlement slips.
8th DAY
ACCOMMODATION FACILITY FOR EMPLOYEES
Employees are also facilitated with accommodation facility
EXECUTIVE ACCOMMODATION
Executives are been given hostel facility with respect to the flats which
included.
• Luxurious Bed Rooms
• Attached Bath
• T.V
• A.C
• Canteen
• Mosque
• Guest Room
FAMILY ACCOMMODATION
Families of employees are also been facilitated in hostel.
WORKERS ACCOMMODATION FACILITY
Workers in the mill are also facilitated with residence facility with some
necessary needs of lower level employees.
Entry of Employees in Colony.
There are following three Blocks in the colony and each has held a lot space. And
I have entered their data according to their Block and Room Number in the
oracle……
• Block -A (90 Rooms)
• Block –B (53 Rooms)
• Supervisory-Block (49 Rooms)
HEALTH & SAFETY MEASURES
Each company has its own health and safety measures according to the
compliances regulated by the regulatory bodies. So, K.M.L also has the safety
measures so they have to inspect their safety measures morning and evening and it
inspects in different areas like…
• Boarding
• Yarn Godown
• Linking
• Dyeing
• Knitting
Etc…..
And the things to inspect are
1. PASSAGE 2. FIRE EXITS
3. HOUSE KEEPING 4. SMOKE DETECTORS
5. FIRST AID BOX 6. FIRE HYDRANTS
7. CONTROL PANEL 8. FIRE EXTINGUISHER
9th DAY
AUDIT
The external audit team came today in the Hosiery function and they checked
the whole scenario regarding to the activities been doing in K.M.L documentation in
other departments as well as our department H.R. they have asked for the following
matters to be disclose for their report, these are………………
• Health & Safety
• List of All Employees
• Salary Slips (Randomly selected I.D’s from a list of employees)
• Employees Personal Files (Randomly Selected from a List of Employees)
10th DAY
OVER TIME DATA
The time that the employees have worked extra hours in the mill.
This need to be entered in the system for the month of May & June regarding
to their………
2) Sick leave
3) Earned leave
4) Leave without pay
5) Maternity leave
1. CAUSAL LEAVE
Every employee will be eligible for ten days causal leave in each calendar
year.
1) Causal leave can be granted on pro-rata basis, proportionate to the length of
service.
2) Un-availed causal leaves shall lapse automatically at the end of every calendar
year.
3) Causal leave cannot be combined with any other type of leaves except sick
leave.
4) Causal leave can be availed for a maximum period of 3 days at one time.
2. SICK LEAVE
Every employee will be eligible for eight days sick leave in each calendar
year.
1. Sick leave will be granted on pro-rata basis, proportionate to the length of
service.
2. Sick leave exceeding 2 days must be supported by a medical certificate from a
registered medical practitioner.
3. Sick leave may be Accumulated up to a maximum of 16 days
3. EARNED LEAVES
Every employee will be eligible for earned leave as follows
Workers-14 days
Staff-15 days
1. Earned leave will be due only after completion of one year’s continuous
service with the company from the date of joining.
2. Earned leave shell be credited to the employee account at the end of each year
of service
3. It is incumbent for management staff in grade M-12 and above to avail a
minimum of 15 days earned leave in a calendar year.
4. Earned leave lying to the credit of an employee will be encashed at the time of
separation for the company for employee up to Grade-12.
4. LEAVE WITHOUT PAY
There is no provision of leave without pay in Law. How ever extra-ordinary
leave without pay may be granted at the discretion of the competent authority in
special circumstances involving absence from duty.
5. MATERNITY LEAVE
1) Female married employees who have been employed for more than one year
will be granted maternity leave.
2) Maternity leave of 12 weeks, 6 weeks each before and after the delivery will
be granted on production of medical certificate from a registered medical
practitioner.
TRANSPORT POLICY
Company Maintained Car will be provided to the following categories of
employees, as indicated against each.
Grade Designation Type of Vehicle
M-19 Director 1600 C.C (Honda VTI) or equivalent
M-18 General Manager 1500 C.C (Honda Civic EXI) or equivalent
M-17 Sr. Manager 1300 C.C (Corolla XE-Honda City EX) or
Equivalent
M-16 & Manager & Deputy 1000 C.C
M-15 Manager
ALLOTMENT
The Human Resource Department will issue allotment letter to the eligible
official at the time of handing over the car.
INSURANCE/TAXES
The cost of token, comprehensive insurance policy, registration charges, radio
charges, radio license fee etc, will be borne by the company.
PETROL/DIESEL
The limit of petrol/Diesel is as follows:-
Grade Monthly Yearly
M-19 300 Litres 3600 Litres
M-18 250 Litres 3000 Litres
M-17 175 Litres 2100 Litres
M-16 150 Litres 1800 Litters
• Surgical charges
• Miscellaneous hospital expenses
• Day care surgery charges
• Local ambulance cover
• Emergency accidental outpatient cover
• Emergency accidental dental treatment
EFU LIFE INSURANCE
All employees are covered under EFU life insurance. Under this policy all
employees are eligible for benefit of life insurance. Sum assured under this policy is
equal to minimum Rs.500, 000 and 36 gross salaries of employee.
RESIGNATIONS
The resignation is the major problem of most of the organizations, this
turnover increases day by day as the policies and conditions been changed with time.
So, the employees who have left the organization due to their own problems,
terminations, S.O.S need to settle their final dues that company has to pay. There are
following rules that need to be followed by the company in order to settle the
accounts of resigned employees.
NOTICE PERIOD
It is the period to which the employees have to inform the organization about
his resignation. There are two ways to intimate the organization.
• One Month Notice Period
• 24-Hour Notice Period
• Termination
• P-Fund
transferred from permanent to piece rate has the facility of social security. There is no
system of provident fund in piece rate.
OTHER DEPARTMENTS
MARKETING
In every organization marketing department plays a vital role for prevailing
the organization in the marketing. In Kohinoor the marketing department is also
performing his responsibility for the best of the organization. It is engaged in getting
orders from customer and fulfills the order according to the requirements of the
customer by the follow up of the entire departments.
SEND SAMPLES
Marketing department send the samples to the customer after getting his
requirements by three ways.
• Specification
• Actual sample
• And by weight
Then the customer sends back the sample by some changing required in that
sample, the marketing department again generates the sample and send to the
customer.
If the customer accepts the second sample then he sends the order for
production. The order includes, rate per dozen and the number of dozen to be
purchased by him, with the final specification, which includes the following things:
SETTING OF PRICE
When the sample is accepted by the customer then marketing department set
the price with customer after discussing with general manager. The profit in price is
generally set in the range of 30-40k.
MANUFACTURING OF ORDER
Then the order is send to the planning department for running in the
production department and the packing requirement is also send by marketing
department which is followed by the packing department.
SHIPMENT OF GOODS
When the production is ready for the shipment, the marketing sends the
request to the shipping department which makes the shipment of that order.
SAMPLING DEPARTMENT
It works under marketing department and engages in the production of the
sampling of marketing department.
It gets the requirements from the marketing department and makes the
production according to the specification of the customer and sends it to the Q.A
department after passing from the related manager of sampling.
QUALITY ASSURANCE
WORKING OF Q.A
Q.A precedes the samples by knitting, linking, dyeing and boards it according
to the requirement given to them and checks it step by step at each place and at the
end it reached to the marketing department which sends it to the customer.
They have to plan all these activities about how much yarn is required,
packing accessories management, and the planning about the fulfillment of the
customer requirement.
COMMERCIAL DEPARTMENT
The commercial department is the bone of every manufacturing concern. It
plays a vital role in the manufacturing of the products such as purchase of the raw
material and sold of the scrap in the market at the best prices.
The commercial department sends the order for purchasing the yarn from the
market. At the best price and the quantity required for the production as well as the
quality of the yarn required. The yarn is purchase on the request of the planning
department for the specific job and style.
RECEIVING OF THE YARN
Then the godown office receives the yarn as per the quantity ordered and
stores it in the yarn store. According to the IGP number and the supplier. Only that
yarn is received whose IGP is generated at the gate and which is order by the
commercial department.
ISSUING OF THE YARN
Then the yarn is issued as per the demand of the production department. The
yarn issued is recorded in the computer. As the record purpose and to find out the
balance of the yarn.
RETURNING OF YARN
The excess or the rejected yarn is received back by the commercial
department. And recorded it in the record to increase the stock.
SENDING OF THE REJECTED YARN
The rejected yarn is send to the supplier to get the new yarn. And the record is
made for the yarn return to the supplier.
The godown office generate the different reports required for the different
purpose
These reports are.
• Daily issuing report of yarn
• Scrape received report from the WIPC department.
• Report of the sold of scrape
• Report of the balances of the yarn and the scrape
• IGP report
• Yarn indent report
• Bleach report
• Report of the received of the yarn
• Lab test report
• And the at the end of month the all related reports
GENERATION OF THE OUT WARD GATE PASS
The generation of the out ward gate pass is also responsibility of the
commercial department; it is generated when the scrape is sold or the rejected yarn
send back to the supplier.
PUBLIC DEALING
The commercial department is also engage in the public dealing in the market
for the purpose of making the different contract about the purchase of yarn and sold of
the scrape.
SENDING REPORTS TO THE FINANCE DEPARTMENT
It is also responsibility of the commercial department to send the report of the
daily consumption and the wastage of the production to the finance department for the
purpose of generates different reports for the finance department.
SENDING DETAIL OF THE PAYMENT TO THE SUPPLIER OF YARN
It is the responsibility of the commercial department to send the detail of the
payments made to the supplier of the yarn to the factory and then the finance
department made the payment on the specify date.
LOCATION OF THE STORE
The material is located in the store IGP vise and then issued it according to the
requirement of the job, from the WIPC department.
FINANCE DEPARTMENT
The finance department is the main department which deal all the transaction
related to the finance such as the current transaction of cash, future forecasting of
cash, and preparing of the books of account for the daily purpose as well as for the
audit purpose. So we can say that for audit purpose it is the main department.
NONCURRENT ASSETS
Comprise those assets which have the future benefit more than one year. There
are two types of Non Current Assets:-
Tangible Assets E.g. equipment, building.
Non Tangible Assets E.g. good will, patient, trade mark etc…..
CURRENT ASSETS
comprise those assets which have the future benefit of one year. E.g. prepaid
expense, account receivable, etc ……
TYPES OF LIABILITIES
CURRENT LIABILITIES
Which have to pay within one year. It includes trade creditors, interest notes
payable accounts payable current portion of long term liabilities.
NONCURRENT LIABILITIES
Which have to pay more than one year .it includes long term financing long
term deposits security deferred taxation.
PROCESS OF PURCHASES STOCK
Indent Store
Purchaser Purchase order
Supplier Inward Gate
passes
Store User
EXPLORING THE STORE ADMINISTRATION WORK
STORE ADMINISTRATION
• GENERAL STORES
• RAW MATERIALS STORES
FINDINGS
In Kohinoor Mills Limited store operations controlled by Store Manager. The
function of store is to issue and receive items needed by different departments. So we
can subdivided these functions into following categories.
1. GENERAL STORE
his record and one copy is being sent to the store in charge. 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 in charge 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. Then head office
purchases samples of demanded items and sends to the mills. At the mills, store in
charge informs the production department that the required or samples of demanded
items have come from head office. The section that 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 in charge 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 demanded items which are available in the local market are purchased by
the Assistant Manager. While Store In charge checks all these items and then records
on Store Receipt Register.
PROCEDURE FOR ISSUE OF GOODS
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.
REPORTS OF GENERAL STORES
The following two reports are prepared by the Store In charge.
Purchase Report
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.
PRODUCTION DEPARTMENT
Production department is concern with the production of the products. Here in
the Kohinoor the product is only socks, so it is engaged in the production of the socks
of all the styles.
There are two types of machines in Kohinoor with 84, 108,132 needless and
with three types sinker on the machines. These are small tyre medium tyre and large
tyre. There are four feeders on every machine which supply the yarn according to the
requirement.
It includes the following different department, such as
1. Knitting department
2. Linking department
3. Bleaching department
4. Boarding department
5. Packing department
KNITTING DEPARTMENT
The knitting department is the main department of the production which is
used to knit the socks according to the requirement and send to the WIPC department.
ACTIVITIES OF THE KNITTING DEPARTMENT
The knitting department is engaged in the following activities
The yarn running on the machines for every style is specific, so the people
in the knitting department check the specification of the yarn.
MAKING PRODUCTION
The production department gets the yarn and makes the production
according to the requirement and specification given by the planning department.
CHECKING OF THE QUALITY
The production operator checks the quality of the socks one by one and
makes the difference in the form of A and B pair’s according to the quality.
MAINTENANCE OF THE MACHINES
If a machine is stopped or giving the bad quality production then the
operator check the machine and set them accordingly.
USAGE OF PARTS OF MACHINES
If an operator under the foremen is using more quantity of spare parts as
compared to the standard, then he is answerable for that material.
CHECKING THE EFFICIENCY
The efficiency of each foreman is checked by the knitting manager from the
Performa giving by each foreman at the end of the day.
TURNING PROCEDURE
The socks are turned by two ways. First one is by machines and second one by
the manually, those which can not be turned by machines are due quality to quality
problems.
TRANSFER PRODUCTION TO WIPC
After the socks are linked those are send to WIPC for further processing.
REPORTS OF LINKING DEPARTMENT
Following reports are generating by the linking department. These are
• Daily linking department
• Turning report
• Efficiency report
• Needles report
• Monthly reports
• Yarn consumption report
PACKING DEPARTMENT
There are two method of packing, first one is on line packing and second one
is off line packing. The off line packing is made by the girls hire by the company and
on line packing is made in the boarding department when the socks are pressed.
SHIPPING DEPARTMENT
This department is basically deals with the shipment of goods to the
customers.
DOCUMENTS USED BY SHIPPING DEPARTMENT FOR EXPORTS
PACKING LIST
Packing list is detail of goods packed according to complete specification of
product.
COMMERCIAL INVOICE
Issued by the exporter for the full realizable amount of goods as per trade
term.
CERTIFICATE OF ORIGIN
It is required to certify on the invoice that the goods are of a particular origin
or manufactured/ packed at a particular place and in accordance with specific
contract.
PACKING LIST
It shows the details of goods contained in each parcel / shipment.
CERTIFICATE OF INSPECTION
This document describes the condition of goods and confirming that their
quality & quantity is according to order.
BILL OF LADING
Bill of Lading is of different types but Kohinoor mills mainly using two types
of transportation sources i-e Sea and air cargo.
SHIPPING DOCUMENTS
When company sends through sea then use shipping documents.
AIRWAY BILL
When company use air cargo then airway bill of consignment.
E-FORM
E-form issued by bank. It is the requirement of state bank of Pakistan to fill E-
form and submit to state bank for record and any subsidy.
BILL OF EXCHANGE
An unconditional order issued by Kohinoor Mills which directs the recipient
to pay a fixed sum of money of their consignment to their bank at future date. The
future date may be either fixed or negotiable.
CERTIFICATE OF SHIPMENT
It signifies that a certain lot of goods have been shipped.
SHIPPING ORDER
Issued by the Shipping (Conference) Line which intimates the exporter about
the reservation of space of shipment of cargo through the specific vessel from a
specified port and on a specified date.
CART/ LORRY TICKET
It is prepared for admittance of the cargo through the port gate and includes
the shipper's name, cart/ lorry No., marks on packages, quantity, etc.This content can
be found on the following page:
HTTP://WWW.INVESTORWORDS.COM/477/BILL_OF_EXCHANGE.HTML
SHUT OUT ADVICE
It is a statement of packages which are shut out by a ship and is prepared by
the concerned shed and is sent to the exporter.
FINANCIAL ANALYSIS
FINANCIAL ANALYSIS
VERTICAL ANALYSIS
INCOME STATEMENT
2006 2007 2008
sales 100 100 100
Cost of sales 87.56 85.22 86.92
Gross profit 12.44 14.77 13.07
Distribution cost 4.63 4.38 5.65
Administrative expenses .18 1.92 3.27
Other operating expenses .15 .42 1.67
Other operating income .63 .61 1.27
Profit from operation 6.49 8.66 3.75
Finance cost 6.39 6.39 8.15
Profit(loss)before taxation .09 2.27 (4.40)
Provision for taxation .93 .77 .79
Profit(loss)after taxation (.83) 1.50 (5.18)
BALANCE SHEET
2006 2007 2008
Assets
Non current assets
Fixed assts 52.46 47.15 44.73
Long term
.15 .02 2.72
investment
Long term security .039 .04 .02
Current assets
Stores, spares and
3.33 3.56 .42
tools
Stock in trade 17.30 13.76 17.60
Trade debts 13.28 11.57 8.53
Loans and advances 2.94 3.10 6.21
Trade deposits .03 .08 .02
Other receivable 2.47 2.78 2.12
Sales tax recoverable 2.30 1.55 1.26
Short term
3.37 14.14 11.95
investment
Cash and bank
2.32 1.54 .59
balance
Non current
liabilities
Redeemable capital 1.53 .46 -
Long term financing 16.85 10.31 9.94
Deferred tax 18.39 2.97 2.76
Current liabilities
Trade and other 10.54 7.20 9.66
payables
Accrued mark up 1.34 1.27 1.25
Short term borrowing 39.55 40.01 45.44
Current portion of 7.03 7.66 5.83
long term liabilities
Provision for taxation 1.37 .85 .45
Total equity and 100 100 100
liabilities
HORIZONTAL ANALYSIS
INCOME STATEMENT
2006 2007 2008
Sales 100 119.09 94.99
Cost of good sold 100 115.91 94.31
Gross profit 100 141.43 99.80
Distribution cost 100 112.57 115.79
Administrative 100 127.55 173.31
expenses
Other operating 100 289.34 1045.57
expenses
Other operating 100 116.31 192.39
income
Profit from 100 159.98 54.92
operations
Finance cost 100 120.00 121.09
Profit before taxation 100 2860.66 (4415.37)
Provision for taxation 100 98.97 80.54
Profit after taxation 100 (215.24) 592.07
Balance sheet
2006 2007 2008
Assets
Fixed assets 100 98.09 98.97
Long term 100 12 2070.59
investment
Long term security 100 100.99 58.34
Store, spare and tools 100 116.81 147.25
Stock in trade 100 86.78 118.07
Trade debts 100 95.12 74.60
Loans and advances 100 114.90 245.35
Trade deposits 100 264.15 95.82
Other receivables 100 122.64 99.70
Sales tax recoverable 100 73.73 63.94
Shore term 100 458.02 411.68
investment
Cash and bank 100 72.67 29.53
balance
Total assets 100 109.16 116.09
Equities and
liabilities
Authorized share 100 100 100
capital
Issued, subscribed 100 109.99 153.99
RATIO ANALYSIS
Ratio analysis involves methods of calculating and interpreting financial ratios
to analyze and monitor the firm’s performance.
CATEGORIES OF FINANCIAL RATIOS
Financial ratios can be divided for convenience into five basic categories
• Liquidity
• Activity
• Debt
• Profitability
• Market
LIQUIDITY RATIOS
A firm’s ability to satisfy its short-term obligations as they come due is called
liquidity. Liquidity refers to the solvency of the firm’s overall financial position the
ease with which it can pay its bill. These ratios are viewed as a good indicator of cash
flow problems. The two basic measures of liquidity are:
CURRENT RATIO
A measure of liquidity calculated by dividing the firm’s current assets by its
current liabilities. It measures the firm’s ability to meet its short term obligations. It
is expressed as follow:
` Current assets
Current ratio =
Current liabilities
INTERPRETATION
As our current ratio is less than 1 so it is not the favorable situation for the
company.
DEBT RATIO
It measures the proportion of total assets financed by the firm’s creditors. The
higher this ratio, the greater the amount of other people’s money being used to
generate profits. It is calculated as follows:
Total liabilities
Debt ratio = Total assets
TIME INTEREST EARNED RATIO
It is also called interest coverage ratio, measures the firm’s ability to make
contractual interest payments it is calculated as follows.
Earning before interest and taxes
Time interest earned ratio =
Interest
PROFITABILITY RATIO
margin
INTERPRETATION
Operating profit margin represents pure profits earned on each rupee. Higher
operating profit margin is preferred in 2007 it is higher so company earned more
profits in 2007.
NET PROFIT MARGIN
It measures the percentage of each sales dollar remaining after all costs,
expenses, including interest and taxes have been deducted.
It is calculating as follow…
Net profit
Net profit margin =
Sales
Years 2006 2007 2008
Net profit margin (.83) 1.50 (5.19)
INTERPRETATION
Higher net profit margin is preferred which is greater in 2007.
EARNINGS PER SHARE
EPS represents the number of dollars earned during the period on behalf of
each outstanding share of common stock. It is calculating as follow:
Earning available for common stockholders
EPS =
No. of shares common stock outstanding
Years 2006 2007 2008
Earning per share (1.29) 2.78 (6.34)
INTERPRETATION
It represents the rupees amount earned on behalf of each share. Company
earned much more rupees in 2007 rather than 2006 and 2008.
RETURN ON TOTAL ASSETS
It is also called the return on investment measures the overall effectiveness of
management in generating profit with its available assets. The higher the firms return
on total assets the better the firm is.
Earning available for common stockholders
ROA =
Total assets
Years 2006 2007 2008
INTERPRETATION
Return on assets indicates that how much firm earned on each rupee of asset
investment.
INTERPRETATION
It indicates that investors are currently paying for each rupee.
Industrial Analysis
SWOT ANALYSIS
STRENGTHS
KML having own electricity power plant which is producing not only for the
KWML but also providing electricity to other companies and to govt. at subsidy rate.
ERP SOFTWARE
ERP (Enterprise Resource Planning) has been installed in KML that’s why
company is saving all records in systems and having huge database.
POWER LOOMS
KML has purchased latest power looms Toyota Air Jet Power Looms. That’s
why they have reduced the production cost and have increased the quality and
efficiency of their textile products.
In KML there are near about 4500 employees who are from different
environments and having different cultures but fortunately there is no cross cultural
communication.
MARKET REPUTATION
KML is one of the major Mills in Pakistan that’s why they have little bit
reputation in local market and having trust from investors.
WEAKNESSES
The one weakness of KML is that their employees are not motivated that’s
why they are getting off and putting their resigns in front of managers and executives.
This is the responsibility of HR department to find out at to see at the time of hiring
them that what the thing is that their employees can be motivated.
during the running contract that’s why production department has to wait for the raw
material.
ADMINISTRATIVE EXPENSES
There are high overhead charges through out the year particularly
administrative expenditures. Management whether it is lower management or upper
management, the expenditures are same but company is getting equally profit from
them that’s why expenditures are increasing.
RELIABILITY ON FOREIGN CUSTOMERS
Always organization has to rely on foreign customers and it would become
risk especially in financial matters and possibility of fraud would be there. KWML is
too much depending upon their foreign customers. They have limited number of
foreign customers but these are also losing by lacking of quality and little bit high
cost.
COMMERCIAL DEPARTMENT
Commercial department of KML is showing its little bit bad performance.
Means always the yarn is purchased late and on credit and payments are done by the
department always very late. There is no proper or pre-plan for the month or for
couple of weeks so that amount should be received to pay the suppliers. Each time
purchasing of yarn is done belatedly so that looms not run and hence per day cost
increased and depreciation also.
GODOWN POSITION
There is no proper placing for final products to place them safely and at the
time of their dispatch there is possibility of mistake.
ERP SOFTWARE
It’s good that KML has ERP software in their systems. But there are number
of errors that are occurred much time. For example, during the dispatch of product,
you have to click all the rolls manually. There is no option to select them all and other
problem is to calculate the weight of packed rolls. You have to do all these things
manually.
COMMUNICATION GAP
There are a little bit gaps in communication between the departments. May be
these confirm each and every thing from each other but still they make mistakes and
blame each others to safe them.
TEAM BUILDING
A major problem is team building. There is almost no concept of team. Each
person is doing individually and performing his/her activities.
CASUAL ATTITUDE
The attitude among the employees is very casual. No one following the rules
and regulations of the company. Some implementation is done among the executives
but not at managerial level.
HR DEPARTMENT
HR Department is almost useless and only performing two activities. These
activities are making salaries and attendance of the employees and workers. They are
not working to train the employees and making appraisals to evaluate them.
KML has no proper planning for the Marketing. They advertise about their
selves only from newspapers. That’s why limited number of people knows about
them.
THREATS
POLITICAL INSTABILITY
As we all know that the political situations of Pakistan are one of the worst
situations of the whole world. Each new government establishes its new rules and
regulations which impact the industries badly. Now a day there are many major issues
which are affecting the textile industry as well as other countries just like Musharaf’s
impeachment, PM Shaukat Aziz Fraud, New elections for Provisional and national
assemblies and the major issue was the murder of BB Benazir Bhutto. Now the new
government of Pakistan has implemented some new rules for the textile industry
which are almost of them are not in fever of the industrialists. These are
• 31% increment in the prices of Gas
• Near about 10 rupees per liter increment in price of petroleum
• Bann to export the raw cotton
• No subsidy for the research and developments in the textile industry
Against these rules and implications, All Faisalabad Textile Mills boycott in
July 2008 by shutting down their Mills and factories. Now the government has
provided them some subsidy in gas field.
HIGH CONSUMPTION OF PETROLEUM
The high consumption of the petroleum is also the major issues because in
international market, their prices are going up and touching sky, due to which the
freight costs are increasing day by day and hence the cost of production, is also
increasing rapidly which is becoming the reason of losing foreign customers of
Pakistan.
SHORTAGE OF ELECTRICITY
The government of Pakistan still unable to provide the required quantity of
electricity, the usage of electricity has been increased. The companies who have their
own electricity plants are save but those who don’t have are facing a major problem
of shortage of electricity.
EMPLOYEES
Kohinoor Mills limited is facing a major problem of their employees because
they getting off from KML. They think that they are not getting reasonable and
valuable salaries and incentives from the company. The major reason is also that
company is losing its value and reputation in the local market as well as in
international market, that’s why they are getting off from the company to secure their
future and present as well.
POOR RESEARCH & DEVELOPMENTS
KML has not been working for better Research and Development Department
for some years. They are not focusing to improve their technology and expand their
market share. They just keep focus on their current systems which are producing not
too much good quality products that’s why some of foreign customers are dissatisfied
from them and shifted towards other suppliers.
INCREMENT IN FREIGHT CHARGES
The prices of petroleum have been increased and still increasing rapidly.
That’s why the freight charges have been increased and the cost of productions has
also been increased by the huge amount. Due to these increments, the sale price has
also been increased but customers are not ready to pay more for a good quality instead
of better quality. And transport companies are demanding more increments to use
their transportation services.
INTERNATIONAL AND LOCAL COMPETITORS
One of the major threats at international level which KML and textile industry
of Pakistan has to face, is international competition which is growing up and
competitors are capturing the market share rapidly that’s why Pakistan’s market share
in foreign market is cutting down gradually due to high cost but poor quality of their
textile products.
In local market, there are many companies in Pakistan who are improving
their quality of textile products by acquiring new technologies. The big giants of
Pakistan textile industry are
NISHAT TEXTILE SAPHIRE TEXTILE
KTM TEXTILE COLONY TEXTILE
YUNIS TEXTILE AMTEX
CHENAB TEXTILE AL-KARAM TEXTILE
GULISTAN TEXTILE FAZAL TEXTILE
OPPORTUNITIES
NEW TECHNOLOGY
The technology has been improved for the textile industry and these
technologies are being acquired by the international competitors as well as by local
competitors so they are producing good quality textile products and increasing the
efficiency as well as decreasing the cost of production. KWML has the opportunity to
invest for the new technology. By acquiring the latest technology, they can increase
the production quality, efficiency and can decrease the cost of production.
• KML can publish its own local business magazine to promote themselves
PEST ANALYSIS
POLITICAL FACTOR
The main political factors which are attracting the industries and as well as for
the whole world are
• Musharaf’s Seat
• Arrested Judiciary
• Benazir Bhutto murdered
The murder of Benazir Bhutto was infuriated matter. Number of people came out
with a great anger and numbers of textile companies were burnt by them, just like in
Karachi happened. The other issue was neat & clean elections of 2008. No doubt
those elections were being held neat and clean but the opposition did not accept the
results and new government is still try to control the factors which are creating
disturbance. As it is mentioned above that the govt. of Pakistan increased the prices of
Gasoline and petroleum, which are the basic needs for the textile industries. In July
2008, the textile companies in Faisalabad shutdown their companies against the 31%
increments in prices of Gasoline, also increased the prices petroleum by 10 rupees.
Still no satisfied procedure has not been implemented by the Govt. of Pakistan.
Tight monetary policy also creates a lot of hurdles for textile sector and
exporters, and rapidly growing interest rates of the banks is causing the shut down the
power looms, and it also crushing down the textile industry and exporters, added
sources. The industrialists rejected the imposition of 10 percent withholding tax on
electricity bills, small and medium industries, and power looms, while they demanded
withdrawals of 10 percent withholding tax immediately for the survival of the
industrial sector of Pakistan. Then again, the government is failed to decrease the
every day increasing trade deficit. Textile sector of Pakistan contributes huge amount
in the economy of the country serious measures are needed for its revival.
ECONOMICAL FACTOR
Economical factors are also disturbing the all industries of Pakistan as well as
the textile industry. From 1999 to 2008 the inflation rate has been increased by 100%.
The last and current Government has been failed to control the economy. As the
prices have been increased, the suppliers try to get and save more profit from their
investments. That’s why prices are decided and put with a high return in terms of
profit.
Before 2008, textile industry was getting number of incentives from the
government just like R&D (Research & Developments) and subsidies on the utilities.
But some companies misused these opportunities and unfortunately Govt. pulled back
these types of incentives.
The main problem with the textile industry is shortage of electricity, gasoline
and petroleum, due to which Textile industry is bearing too much cost that why they
have to increase their prices to earn profit or for break-even. There are some
companies which have their own electricity plants but they have to spend a lot of
money to run them.
Other problems which are facing by the textile industry of Pakistan are
These are the factors which are disturbing the textile industry strongly
economically.
SOCIOLOGICAL FACTORS
• Polluting the air by pushing out ruins of chemicals. Different gases in air react
with these ruins which become dangerous for human beings.
• No proper system to throw out the useless materials and chemicals.
• Most of the useless materials and acids are thrown into the fields which are
react or disturb the agricultural products seriously.
• Since the cost of the production and labor cost are increasing day by day.
That’s why the final product cost is also increasing that’s why people are
buying low quality products and not spending too much to purchase.
• Textile companies are firing the labors and employees as well because of high
production cost and salaries that’s why the unemployment rate is increasing
day by day which is not good for the industry as well as for the country.
TECHNOLOGICAL FACTOR
The technology has been improved and updated in the textile industry of
Pakistan and some of the companies in textile industry are acquiring these
technologies. By using new technology not only they improve their quality and
efficiency but also improve their production as well as reducing the cost of
production.
RECRUITMENT
Two ways been performed
INTERNAL RECRUITMENT
In this employees who are working for quite a while and the workers been
judged on the basis of their performance been given the chance to fill the vacancy
higher than their post and they could also give references to their relatives.
EXTERNAL RECRUITMENT
Ads been placed by the H.R Department in the news paper (Jung) with the job
description and job specification and attractive salaries are also mentioned.
SELECTION
For the selection process different steps are been conducted
ORIENTATION
• After the process of selection the selected employees been given the
orientation About organization culture and values; rules and regulations;
salary details.
• Lay offs and terminations and resignations are also been done during this
period.
• All other incentives are also been noticed to employees like social security,
E.O.B.I, transportation and residence.
TRAINING
Training is also being a part of job. So, K.M.L also does the training in the
following ways….
• Training is also been given on spot where the actual work is being done.
I have learned the things which I could never been able to learn at university
level that I have learnt in the first step of professional life……
1. PUNCTUALITY
In the professional life, you got to be punctual at any step whether you are in
the house or in office, because it is the demand of the working line where you must
obey time, as I learned to be punctual in office but was a bit slippery in university. My
sleep time, my wake up time and my task accomplishment time was all about to be
punctual.
It’s been the responsibility of an employee to always obey your boss every
time whether you are in angry mood or in jolly mood and same as to your boss.
The major success in life is to always be happy with each individual even
though he is in low status, because if you are kind to every one they will remember
you till death, as my behavior was so pleasant to every one, now I have had their
admirance and in their good books and have a chance to get job after completion of
M.B.A.
4. HARD WORK
The main thing that I have learned from K.M.L that every individual is so hard
working and committed to their work that it forced me to do the same thing. So, I
tried my best to have hard work and I got good remarks from my supervisors.
2. KWML can publish its own local business magazine to promote their selves
4. By holding the seminars on textile industry and offer to attend the seminars to
their customers
6. Make a documentary as a business story about KWML and offer it to show out
through such channels which can accept this offer for example National
Geographic Channel which shows such programs on different companies in
the world.
9. The H.R Department should be advanced with every respect not only in
making salary slips but also for the other related issues to be occupied to make
efficiency.
ANNEXURE
www.aptma.org.pk/
www.saleemtex.com/
www.dallasnews.com/.../dws/bus/columnists/jlanders/stories
www.ptea.org/
www.alibaba.com/countrysearch/PK-suppliers/Textile_Fabric.html
www.dyedfabrics.com/
www.fibre2fashion.com/news/textile-news/pakistan/
www.just-style.com/article.aspx?ID=101227
www.wikipedia,com
www.pide.org.pk/Research/Report180.
www.bilaterals.org/article.php3?id_article=9230
www.bharattextile.com/newsitems/2003963
www.gia.com.pk/
www.epb.gov.pk/
www.spyfu.com/Term.aspx?t=553759
www.bizeurope.com/businessdirectory/0000000463.htm
www.iptu.co.uk
www.Fiber2fashion.com/industry
Detail From the Concerned Departments
Mr. Zubair Masud (H.R Manager) 03334998852
Mr. Waseem (H.R Officer) 0301-7564161
Mr. Mian Asif (Assistant) 0300-8048832
Miss. Gulnaz (Assistant Manager) 0334-4762102