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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
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
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.
width from Switzerland with modern ancillary machinery to produce high quality
fabric for export markets. Further expansions saw the installation of an additional 96
Tsudakoma air jet looms from Japan in 1990 and a third shed comprising 60 state of
the art Picanol Omni 340 cm wide looms was installed in July 1998, twelve with
batching motions. Another twelve Picanol Omni 340 cm wide looms were installed in
1999.
In 2000-2001 old 48 Sulzer Ruti looms were replaced by 48 lated Picanol
Omni Plus 380cm looms. In addition to that latest Picanol Omni plus Jacquard Looms
were also added as well as a yarn conditioning machine from Zorella was also
installed.
The entire manufacturing process from warping to fabric inspection is
monitored through an on-line process control system from Barco. The marketing
strategy is to explore new markets both in quota and non-quota countries.
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
DIVISIONS OF K.M.L
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
KOHINOOR HOSIERY
MILLS LIMITED Production
Quality Assurance
P.P.C Department
• 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)
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………
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
M-15 125 Litres 1500 Litres
1) The bills with detail of the expenditure incurred on the repairs of the car will be
submitted to HR department.
2) Vehicle maintenance card shall be maintained for each vehicle by H.R
department.
3) The bill will be forward to finance department for re-reimbursement after making
necessary entry in the maintenance card.
4) In case of any damage/accident the allottee will forward “Vehicle Accident
Report” to finance department who will arrange repairs/maintenance through
comprehensive insurance policy.
5) For other employees company provide the facility of air conditioner buses and
vans.
6) The vehicle may be sold to the allottee, after the expiry of the stipulated
replacement period on market rates.
TIME OFFICE
Time office does the following activities
• Keep the daily attendance of employees.
• Make the settlement of the resigned employees to be further proceeded to the H.R
Department.
• Gives the half leaves or temporary leave for about 1 to 2 hours.
TRAINING ROOM
Training room does the following activities…..
• It makes the training arrangements of the newly employed persons and the related
department supervisor delivers the training.
• It also prepares employee’s personal file and allot the employee number.
• It makes the employee card with scanned picture.
• It also finds the people who are involved in unhealthy activities in the
organization.
ATTENDANCE ALLOWANCE
Completion of monthly standard working hours is a must to become eligible for
full monthly salary, and attendance allowance. Only piece rate employee get attendance
allowance.
Kohinoor mills limited set criteria for attendance allowance.
3000 rupees company pay as attendance allowance.
• One absence =3000-500=2500
• Two absence=3000-1000=2000
• Three absence=3000-2000=1000
• Four absence=3000-3000=0
EO.B.I CONTRIBUTION
Employee old age benefit institution is as follows for employees who will be
given this amount when they will reach to age of 60 for male and 55 for females.
• Paid by company = 5% of minimum Wage i.e. Rs. 300
• Paid by Employee = 1% of minimum wage i.e. Rs. 60
Total Contribution = 6% of minimum wage i.e. Rs. 360
SOCIAL SECURITY
Employees who have salary limit up to Rs. 10,000 are covered under Punjab
Employees Social Security Institution.
• Rs 360 i.e. 6% of minimum wage paid by company every month.
• Employees and their dependants are covered under this institution.
• Employees are eligible for benefits (medical facility) under this fund.
• HR department generate reports every month and after verification send to
finance department.
• Finance department prepare Cheques for social security.
• Prepare this report under the HR Officer.
HEALTH INSURANCE
Employees having salary more than Rs: 10000 are covered under Adam jee
Health Insurance.
Same as social security employees who have salary limit up to Rs. 10,000 are covered
under Punjab Employees Social Security Institution.
ADAM JEE POLICY
Insured person’s stay in hospital for a minimum period of 24 hours for either
necessary medical treatment of any disease, sickness or accidental bodily injury or
treatment admissible in terms of this policy.
Following benefits are covered under Adam jee...
• Daily room and board charges
• Intensive care unit (ICU) charges
• Physician’s visit charges
• 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
In one month notice period the employee must inform the company one month
before his resignation, for this he has to give the notice to the company that he will leave
the organization one month after the intimation is given.
The basic pay which is almost 56% of the net pay will not be deducted from
employee’s account.
2-24-HOUR NOTICE PERIOD
In 24-hour intimation from employee, will loose the basic pay of 56% of the net
pay. And this could happen in an emergency decision from employee, when he has an
emergency or he has settled the things with another organization.
3-TERMINATION
In the termination process the employee has been terminated due to his unhealthy
activities in the organization or lack of interest in working. In termination the employee
has been given the basic pay and its not been deducted in notice period deduction.
4-P-FUND
Provident fund also been given in the final settlement of employee and it was
been deducted each month by 10% of the basic pay. Zakat is been deducted 2.5% of the
net P-fund and its been applied on Rs: 16,228.
SALARY BREAK-UPS
Employee’s salary break-ups has the following steps
BASIC PAY
The basic pay is the 55% of the grand/net pay.
ALLOWANCES
Following are the allowances that are been added in the basic.
• Utility
• House Rent
• Medical
• Other Benefits
• COLAS
to start their piece rate job for this they got to give their final settlements and make their
new files, because the piece rate registration form is different from their permanent
employment.
RATE
The rate for per dozen pieces is Rs: 1.75/- for linking employees.
BOARDING
In the boarding the socks need to be flexible with the help of the sizes been
attached on machines. And 128 employees have been converted to the piece rate system.
So their process of mode is same as linking.
RATE
The rate for per dozen pieces is Rs: 2.50/- for boarding employees. Their pay will
not be as fixed as of the permanent employees and the new employees don’t have the
facility of social security for the 1st 3 months but the employees who has been 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 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.
P.P.C is the main and the most involving department because it manages the other
department’s activities, as the order been placed and been approved by the customer
through the marketing department so, it has to mange the order with in the time as it
manages the Knitting, Linking, Bleaching (Dyeing), Drying, Boarding, Packing to the
end 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.
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
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.
LINKING DEPARTMENT
After the production is send to the WIPC it received by the linking department
and start its working according to the specification of the planning department.
ACTIVITIES OF THE LINKING DEPARTMENT
The linking department performs the following activities. These are
The quality of the socks is check after the press if there is any quality problem
then the socks are rejected by the quality people.
The problem includes.
• The length of sock
• Any whole in sock
• Pressing problem
• Any knitting problem not explore first.
• Packing problem(related packing material)
• Setting of pairs.
GENERATION OF REPORTS
The boarding department generates different reports. These are
QUANTITY PACKED
The reports related to the packing and the units board is generated for record
purpose and for the daily efficiency of the worker.
COMPENSATION REPORT
The compensation report is also generating by the boarding department. It is
needed if the worker made work more then the standard. Then the fixed amount of
compensation related to per dozen, is given to the related worker. It is good way to
motivate the employee.
GETTING THE PACKING MATERIAL
The boarding department gets the packing material from the sub-store called
Packing store, when the socks are in the process of boarding. Only that person gets the
material which is specified by the in charge.
RETURNING OF REJECTED PRODUCTION
The socks which are rejected by the quality people are sending to WIPC
department.
The quality problems which can be set by the setting of the machines are set by
the shift in charge of the boarding department.
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.
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
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
Kohinoor Hosiery Page 47
Kohinoor Textile Mills Internship Report
Equities and
liabilities
Authorized share 100 100 100
capital
Issued, subscribed 100 109.99 153.99
and paid up share
capital
Reserves 100 155.32 125.88
Non current 100
liabilities
Redeemable capital 100 33.33 -
Long term financing 100 66.76 68.45
Trade and other 100 74.62 106.42
payables
Accrued mark up 100 105.88 111.06
Short term borrowing 100 110.41 133.36
Current portion of 100 118.77 96.16
long term liability
Provision for taxation 100 68.14 56.41
Total equities and 100 109.16 116.09
liabilities
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
Inventory turnover is meaning full when it is compared with other firm in the
same industry.
TOTAL ASSETS TURNOVER
It indicates the efficiency with which the firm uses its assets to generate sales. It
is calculated as follows:
Sales
Total assets turnover =
Total assets
Years 2006 2007 2008
Assets turnover .82 .89 .67
INTERPRETATION
Higher a firms total assets turnover more efficiently its assets has been used.
Company uses its assets more efficiently in year 2006 and 2007 rather than 2008.
DEBT RATIO
The debt position of a firm indicates the amount of others people’s money being
used to generate profits. The more debts a firm use in relation to its total assets, the
greater its financial leverage.
FINANCIAL LEVERAGE
The magnification of risk and return introduced through the use of fixed cost
financing, such as that debt and preferred stock.
There are two types of measuring debt ratio of a firm.
Degree of indebtedness (debt ratio)
Ability to service debts (time interest earned ratio)
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
There are many measures of profitability. As a group, these measures enable the
analyst to evaluate the firm’s profit s with respect to a given level of sales, a certain level
of assets, or the owners’ investment.
It includes the following ratios
• Gross profit margin
• Operating profit margin
• Net profit margin
• Earning per share
• Return on total assets (ROA)
• Return on equity (ROE)
GROSS PROFIT MARGIN
It measures the percentage of sales dollar remaining after the firm has paid for its
goods. It is calculating as follow:
Sale – CGS
Gross profit margin =
Sale
Gross profit
C.G.S =
Sales
Years 2006 2007 2008
Gross profit margin 12.44 14.78 13.07
INTERPRETATION
The higher the gross profit margin the lower the cost of merchandize sold. Its
mean in 2007 gross profit margin is greater in 2007 rather than in 2006 and 2008.
OPERATING PROFIT MARGIN
It measures the percentage of each sales dollar remaining after all costs and
expenses other than interest, taxes, and preferred stock dividend is deducted.
It is also called pure profit earned on each sales dollar. It is calculating as follow:
Operating profits
Operating profit margin =
Sales
Years 2006 2007 2008
Operating profit 0.09 2.27 (4.40)
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
INTERPRETATION
Return on assets indicates that how much firm earned on each rupee of asset
investment.
INTERPRETATION
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.
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 Hosiery Page 61
Kohinoor Textile Mills Internship Report
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
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.
MOTIVATING THE EMPLOYEES
HR department can prove and show them they are here for employees by
motivating the employees performing their best. They can find the motivation level of
their employees and give them incentives to motivate them.
KML has the opportunity to advertise about their selves to promote their textile
products.
• KML can publish its own local business magazine to promote themselves
• The material which you put on your fair price shop can be sold out at online shop
PEST ANALYSIS
POLITICAL FACTOR
Uneven political conditions, deteriorating law and order situation and instability
in gas and electricity prices are adversely affecting the textile sector, while government
has hardly taken any step to give some relief or incentives to the mill owners. Textile mill
owners and exporter have strongly denounced the recent 31 percent increase in the
gasoline prices and demanded from the government to withdraw the recent increase and
take serious steps to help textile industry survive through difficult times According to the
sources, if prices continue to increase at current rate, the textile industry would find it
difficult to survive as the recent increase has already proven deadly and many mills have
started to shutdown in the wake huge price increase. It was also witnessed that due to
prices increase in gas has not only adversely affected the productivity of the textile
industry but has also caused sudden increase in the production cost and has badly affected
the economy of the country. On the other hand, textile and the other exporters also facing
a lot of challenges due to increase in the production cost of the specific export goods,
while such hurdles badly affected the Pakistani exporters to meet the challenges and
compete in the local and international markets. Exporters are demanding that government
should give them facilities to cope with the existing challenges and not get involved in
favoritism.
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
Textile industry affecting the society and environment in number of ways, some
of them are mentioned below.
• 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.
These are the activities been performed in the organization that we have studied in
our course. So, basically I was doing internship in H.R Department so following
activities been done in the organization in H.R Department according to the topics been
studied in the class….
RECRUITMENT
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
ORIENTATION
• After the process of selection the selected employees been given the orientation
About organization culture and values; rules and regulations; salary details.
• They have also been asked about their probation period
• 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 given in the training room where different presentations been presented
to the new employees.
• 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.
7. Monthly Budget, by making monthly budgets for each department especially for
the commercial department, the late shipments and late purchasing of yarn can be
vanished.
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.
If I were been the manager of H.R Department I would prefer to have some of the
innovations that could really be needed by the company such as……….
1. JOB SECURITY
Job security is been the major push up in the growth of any organization, as it
could lead towards the satisfaction of security in employment. If an employee has the
security that he would never loose his/her job he would prefer to work harder to have
good position in the company. But due to the insecurity of job the employees are been
afraid to loose their jobs at any time, because the management have not had so much
interest in retaining the employees and ultimately the employees have not had interest in
working hard. So my first preference is to give job security to the employees.
2. MOTIVATION
Motivation is the key success in the long run of the organization. So I would like
to motivate the employees by giving them bonuses, promotions and increments according
to their brilliant performance. This element is also been lacking in K.M.L.
3. CUTTING DOWN TOP MANAGEMENT’S EXPENSES
The main problem is the extra expenses that’s been done by the top management
is to reduced at a high level, because the H.R Department is responsible to show their
interest in having the expenses in their limit.
4. HIRING THE LABOR FROM NEAREST TOWN
The hiring process needs to be done from the nearest towns, as it cuts the
transport expense that the company is bearing for the employees who belong from the far
towns.
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