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GROUP MEMBERS:
SAFA MASOOD CHEEMA
NAFEESA SHAHID
ROLL NO
M-14339
M-14307
SUBJECT : FINANCIAL MANGMENT

FINAL PROJECT:)
SUBMITTED TO: SIR ABID GHAURI










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Table of Contents



TOPICS PAGE NO
Project objectives 3-4
Reason for choosing textile industry 5-7
Reason for choosing company 7-8 7-8
Masood textile mills over view 9-11
Overview of competitors 12-20
Economic conditions effecting company 21-24
Ratio Analysis 25-26
SWOT Analysis 27
Potter five forces 28-29
Competitors analysis 30
Interest rate information 30
Conclusion and recommendations 31
References 32
Bibliography 33



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PROJECT OBJECTIVES
Analysis and Uses of Financial Statements is designed for interested parties who must
understand how to read, interpret, and analyze financial statements
This project can enhance your chance for success in business and investing; by
enabling
you to profit from the knowledge, insights, and perceptions of professionals who use
financial
statement analysis tools and techniques on a day-to-day basis. That is the major
objective of this project.
This project explains the objectives of financial statements in a meaningful manner.
After a thorough
overview of financial statements, major tools and techniques as explained, including
Ratio analysis
Liquidity and activity ratios
Profitability ratios
Capital structure and solvency ratios

The significance of interim financial statements and segment reporting is explored, as
are analysis of annual reports and management discussion and analysis (MDA).
To understand and value a company, investor have to look at its financial position.
Fortunately, this is not as difficult as it sounds.
If you borrow money from a bank, you have to list the value of all your significant assets
as well as all your significant liabilities. Your bank uses this information to assess the
strength of your financial position and gave you loan.
Evaluating the financial position of a company is quite similar, except investors need to
take another step and consider financial position in relation to market value.

FOCUS OF FINANCIAL STATEMENT ANALYSIS
This project is placed on the needs of investors, especially shareholders and
bondholders. Financial statement analysis is a process which examines past and
current financial data for the purpose of evaluating performance and estimating future
risks and potential. Financial statement analysis is used by investors, creditors, security
analysts, bank lending officers, managers, taxing authorities, regulatory agencies, labor
unions, customers, and many other parties who rely on financial data for making
economic decisions about a company Financial statements are merely summaries of
detailed financial information.

ASSESSMENT OF PAST PERFORMANCE AND CURRENT POSITION
Past performance is often a good indicator of future performance. Therefore, an investor
or creditor looks at the trend of past sales, expenses, net income, cash flow, and return
on investment not only as a means for judging managements past performance but
also as a possible indicator of future performance. In addition, an analysis of current
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position will tell, for example, what assets the business owns and what liabilities must
be paid.

ASSESSMENT OF FUTURE POTENTIAL AND RELATED RISK
Information about the past and present is useful only to the extent that it bears on
decisions about the future. An investor judges the potential earning ability of a company
because that ability will affect the market price of the companys stock and the amount
of dividends the company will pay. A creditor judges the potential debt-paying ability of
the company. The riskiness of an investment or loan depends on how easy it is to
predict future profitability or liquidity.

INVESTORS NEEDS
Investors and potential investors are primarily interested in evaluating the investment
characteristics of a company. Investment characteristics of an investment include such
factors as risk, return, dividend or interest yield, safety, liquidity, growth, and others.
The relationship of the current value of a stock or bond to expectations of its future
value is basically involved in the evaluation of investment opportunities.

OBJECTIVES OF FINANCIAL REPORTING
Financial reporting provides information that is useful in making business and economic
decisions.
SFAC (Statement of Financial Accounting Concepts) No. 1 describes the objectives of
financial reporting. The financial reporting has the following major objectives:

1. Financial reporting should provide information that is useful to present and potential
investors and creditors and other users in making rational investment, credit, and
similar decisions.
2. Financial reporting should provide information to help present and potential investors
and creditors and other users in assessing the amounts, timing, and uncertainty of
prospective cash receipts from dividends or interest and the proceeds from the sales,
redemption, or maturity of securities or loans.
3. Financial reporting should provide information about the economic resources of an
enterprise, the claims to those resources (obligations of the enterprise to transfer
resources to other entities and owners equity), and the effects of transactions, events,
and circumstances that change its resources and claims to those resources.
Management through financial reporting can provide significant financial information to
users by identifying events and circumstances and explaining their financial effects on
the enterprise.








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REASON FOR CHOOSING TEXTILE INDUSTRY

The textile industry is one of the most important sectors of Pakistan. It contributes
significantly to the countrys 8.5% GDP in fiscal year 2008-09. It is in fact the backbone
of the Pakistani economy
For the industry selection we must focus on the following points which help to select the
industry
Industry classification.
External factor review.
Supply Analysis
Demand Analysis.
Profitability Analysis.
International competition and market review.
The first factor to consider is the correct industry classification. Industries can be
classified by industrial life cycle and business cycle reaction so we must analysis textile
industry and know industry are at pioneer stage or growth stage or at mature stage or
at decline stage Textile industry is one of the oldest and the first one to be nurtured by
human being. Initially the textile products were manufactured at domestic levels
example at homes.


EXTRANAL FACTOR

TECHNOLOGY

However, with the globalization and the advent of modern technology, things have
changed a lot. Now, the textile industry has huge number of high-tech equipments and
machineries which have helped people in making more dynamic products. These
machineries have also been able to reduce dependency on other people as the work
which was earlier done by many people, can be completed by one machine at rapid
speed.

SOCIAL CHANGE

Initially, most of the products that Textile Manufacturers used to produce were made of
wool, cotton and flax. However the raw material was changed later on with the
advancement of science and technology, and thus it became easier to produce variety
of cloths.
Textiles are usually defined as any type of item that is made using yarn or thread to
create some kind of cloth or fabric. There are many different kinds of textile companies
that make up the worldwide textile industry, many of them specializing in one or
two specific textile product lines. In some cases, the focus of the company is on a
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residential clientele, while others prefer to target commercial customers as their core
client base.

CUSTOMER

Textile manufacturers are now producing different type of products with a huge
variation, thereby offering variety of options to customers to choose from. Initially,
people used to make textile products for personal use in their homes, however with the
growing demand of the cloth, and other textile products production too increased to a
large scale.

FORIEGN INFLUENCE

Due to the foreign influence industry introduce new technology to improve the quality.
These textile products are used in turn not only for serving personal purpose but also to
generate income as well. And, this is how textile manufacturers came in to the existence
and surface the world of trading. The magnitude at which, these products were
produced was up to such a high extent that the products were exported to different
countries during the medieval time.


DEMAND AND SUPPLY ANALYSIS


Supply Analysis

The production of textile have become easier with the high-end technology, but with this
the competition too have become high. The manufacturers have to ensure that they
place special emphasis on the sales and marketing team. In recent time, the
manufacturer has adopted different options to deal with the marketing thing. Nowadays
special stress is placed on the internet sale which remains predominant. In order to
promote and become successful, the manufacturers can promote the same with web
portal and trade directory. The manufacturers can target special age group, this helps in
increasing the sale output.

Demand Analysis

Fashion textile companies tend to devote themselves to the design, manufacture, and
marketing of clothing apparel. This can include the production of solid lots of material
like cotton sheeting that is sold to a customer who uses the fabric to create specific
items of clothing. Synthetic blends may also be created and sold that are ideal for use in
producing winter coats, suits, dresses, swimsuits, or any other type of apparel worn by
men, women, or children
The manufacturers in todays times are now looking for option with natural raw
materials. The natural raw materials are environment friendly and are even promoted by
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government agencies. This is one of the factors which proactively promote the brand of
the company.

International competition and market review


The Textile Manufacturers have become one of the most important parts of the gross
domestic products of many countries. The export of many companies has crossed many
folds with the advance of international trade and the affect of this factor can be easily
seen in todays world. We should also note that work of any company towards
innovation also add up the sales score of the company.




REASON FOR CHOOSING COMPAY

We choose Masood Textile Mills Limited because we want to know the financial position
and actual worth of the company and also find future investment in this company is
profitable or not.
It has its core objectives to manufacture the quality product and design the product
according to customer choice and minimize its cot and maximize the customer
satisfaction level. The products are easily available in the market. The company has an
integrated business plan in the context of which it aims to improve, modernize and
develop all its operations in order to maintain and enhance its competitive position on
both the Pakistan and international markets.

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MASOOD TEXTILE MILL


Introduction of Company

Ch. Nazir Ahmed who was the founder established Masood Textile mills limited in 1984 and now Ch.
Shahid nazir is the chief executive. The Masood textile mill is established under the company
ordinance 1984.The company has latest equipment and machinery to serve globally. The company
has modern computerized networking system. All the Accounting and finance relating work is carried
out through computer. The company has capability in fabric, ginning spinning, knitting laundry and
apparel manufacturing. The companys apparel division, which is producing high quality garments, is
situated at Sargodha road, near singed cinema, Faisalabad. But its registered office has shifted to
canal road Faisalabad. The company implements the quality system and had awarded ISO
9002certificate. The company maintains quality standard at all levels to establish consistency and
efficiency. The company is exporting its products to U.S.A,U.K. and Germany

BACK TRACK SYSTEM
Masood Textile Mills is the only textile mill in Pakistan with latest computerized Barcode
System that assures quality in every operation of production from spinning to packing.
Products of each department carry bar coded stickers, which bear all the details and
history of the operations of that product. Hence if any problem is reported, one can trace
back the root of the problem and enable to prevent occurrence of the same in future.
VERTICALLY INTEGRATED OPERATIONS
Besides, MTM is one of the few fully vertical textile mills in Pakistan having in-house
Yarn, Knitting, Fabric dyeing, Processing, Laundry and Apparel Manufacturing facilities.
The vertically integrated operations help us in achieving shorter lead times and greater
flexibility to cater to the customers demand
CUSTOMER PROFILE
MTM is proud to work with the worlds best labels. This exposure to the brand labels
has been a continuous learning experience for the entire team. Currently, 85% of
production is exported to the U.S. while rest 15% to Europe.
STITCHING DIVERSITY
With over 1,749 stitching machines, MTM is producing about 120,000 dozen per month
of fashion garments like Polo, Rugby and Henley shirts along with basic garments like
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Crew Neck Tee, Sweat shirt, Boxer shorts and Bikinis. MTM has in-house Embroidery
facility equipped with Tajima machines.
EXPERIENCED PROFESSIONAL MANAGEMENT
The MTM Team comprises a balanced blend of experienced professionals including
over 200 MBAs, Textile Engineers and Industrial Engineers. Continuous training and
development keeps them abreast with modern technical and management tools. MTM
is WRAP certified and ISO 9002 certified as well.
AGGRESSIVE R&D FACILITY
A very aggressive and creative R&D department is always busy in exploring innovative
product development enabling MTM to be ahead of many in the field. Our keen,
extensive and aggressive Merchandising team comprising experienced and trained
MBAs functions with the core objective of rendering ultimate customer satisfaction
through product development and smooth execution of orders. They are capable and
keen to meet an average 3~4 days lead time for proto samples.
SOCIAL & ENVIRONMENTAL RESPONSIBILITIES
MTM, as a corporate citizen, recognizes and believes in fulfilling its responsibility
towards the society and the environment. An effluent treatment plant is in the phase of
completion. The compliance standards of international community are fully implemented
and ensured at all times.

PRODUCTS
Yarn
Knitted Fabric
Garments

DAVISION
Masood is a truly Vertically Integrated Textile Unit. It has In-house Yarn, Knitting, Fabric
Dyeing, processing, Apparel Manufacturing and Laundry facilities. The Company has
five SBU's and a highly qualified experienced Mills Manager heads each unit. All Mills
Managers in turn report to the General Manager. The objective to operate in this
manner is that there is a close co-ordination and link between all the divisions. Every
unit operates in the most efficient manner in-order to achieve competitive prices, timely
delivery and quality products.

SPINNING
Masood Spinning is a well reputed and quality oriented spinning unit operating in
Pakistan. Systems and spinning techniques in operation provides useful learning to
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textile industry specialists. We have a well maintained machinery setup starting from
blow room to packing, producing count range 10Ne - 40Ne. At Masood, currently we
have capacity of 14400 spindles. Spinning process involves flow of raw material through
mixing, blow room, carding, drawing, combing, simplex, ring and auto cone.

KNITTING
The knitting Division of Masood has latest knitting machines from Mayer & Cie, Terrot
,Orezio, Matsuya , Scommar , Fukuhara & Vanguard. These machines are capable of
making Jersey, Pique, Fleece, Interlock and Rib in addition to the mini Jacquard
designs of Single Knit Jersey. The gauges range from 20 to 28 for Single jersey Knit, 20
to 24 for Interlock and 14 to 18 for Rib machines. Most of the machines are equipped
with lycra attachment. Moreover, it has 13 flat back machines for welt collars and cuffs.
100% production is inspected and only 'A' grade fabric is transferred to the subsequent
operations.

FABRIC PROCESSING
The Fabric Processing Division of Masood Textiles has a capacity of dyeing 1,16,295
kgs per day. It is equipped with Thies, T.S.I, SCHOLL, Gaston dyeing machines. It is
capable of dyeing both 100% cotton and blended fabric. The machine size selection
gives the flexibility in dyeing a lot size ranging from 100 kgs to 1,000 kgs.

APPAREL
Apparel division was established in 1995 to enter into value addition field. The company
started producing underwear briefs for Jockey U.K. Now it consists of 17 independent
stitching units. An M.B.A Manager is responsible for each unit from receiving of cut
parts to packed garments. After the cutting of fabric, it is sent for 100% cut parts
inspection.

VISION STATMENT
A leading producer of textile products by providing the highest quality of products
and services to its customers.
To strive for excellence through commitment, integrity, honesty and teamwork.
Healthy ethical company and respected corporate citizen to continue playing due
role in the social and environmental sectors of the company.
To develop an extremely motivated and professional trained worker force, which
would drive growth through innovation.
Sustained growth in earning in real term.


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MISSION STATMENT
Our mission is to be a dynamic, profitable and growth oriented company by providing
good return on investment to its shareholders and investors, qualities products to its
customers, a secured and friendly environment place of work to its employees and to
project Pakistan's image in the international market.

OVERVIEW OF THREE COMPITITORS OF MASOOD TEXTILE MILLS

1. Fazal textile mills
2. Sajjad textiles mills
3. Shams textile mills

1.. FAZAL TEXTIL MILLS LIMITED
.
Fazal Textile Mills Ltd. (FTML) is located in the city Karachi and was taken over by the
Yunus Brothers group in March 1987. Yunus Brothers took over FTML when it was a
closed down unit since 1984 due to heavy losses. The new Management of FTML took
prompt and comprehensive actions to revitalize the unit by discarding the old machinery
and imported and installed the latest machinery within a year time. Only in 4 years time
FTML got positive results, and in the year 1991 the new management cleared the deficit
of previous years and got a net profit. At present total installed Spindles in FTML is
60,000.
FTML is mainly producing 100% Grey Cotton Ring Spun Yarn in both Carded and
Combed for end use of Knitting as well as Air Jet Weaving. Fazal Textile Mills Ltd is
also producing wide range of Blended and Heather (Melange) Yarns. Detailed list of
products is mentioned in our Product List.
Fazal Textile Mills Ltd today is equipped with the state of art machinery from world's
renowned Textile machinery manufacturers like Loptex Italy, Rieter Switzerland,
Schlafhorst Germany, Truetzschler Germany, Crossrol England, Skf Germany, Toyoda
Japan, Murata Japan, CTMTC China, Loepfe Switzerland etc.
FTML is certified with ISO-9002 and Oeko-Tex_100 Standards.
FTML towards Value Addition
In 1994 the Company (FTML) entered into value added segment through installation of
4 circular machines for manufacturing of knitted fabrics. But now FTML has 16
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Fukuhara brand knitting machines which produce fabrics like Single Jersey, Single &
Double Pique, R I B, 2end Fleece, 3end Fleece, Interlock etc. These fabrics are
produced on following Diameters and Gauges:

D I A G U A G E
24 20, 24, 28
26 24, 28
30 18, 20, 24, 28
40 20, 24, 26, 28
46 24, 28
Machines are also equipped with Lycra attachment facility as per recent market
demand. FTML Knits business annual turnover is US $ 10 million.
Seven (07) tones of Knitted Fabric is produced every day by the Knitting Department of
FTML which is exported as grey, dyed and printed fabric. The major market at present
for this fabric export is USA & South America, however, FTML also exports grey fabric
to some countries of Europe mainly Italy. Due to the in-house facility, FTML
manufactures the best quality that is up to the mark & satisfaction of the customer and
thats why it enjoys good reputation in the market.
FTML also produces about 3000-bed sets daily for retail business and 6000 pieces of
fitted sheets with and without spandex in all sizes for the institutional market. FTML's
major market share for knitted sheet is in the U.S. where it is supplying products to
valuable store chains.
In addition, the company also outsources a number of contracts and utilizes the
dyeing/printing facilities of other companies for manufacturing of Knitted Fabrics and
Full Cover Bed Sets. Now FTML is going to put up its own HOSIERY DYEING HOUSE,
which would have the Dyeing capacity of 12 tons per day. It will also have finishing
facility for Knitted Fabrics for Open Width & Tubular Width. FTML's Knitted Fabric
complete range of products is mentioned in Product List.
Fazal Textile Mills Ltds annual sales turnover is approximately USD 40 million. Export
sales are mainly to Far Eastern, European, US, South American, North African and
Middle Eastern markets.


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PRODUCT LINE
Yarn
100% COTTON RING SPUN CARDED YARN FOR KNITTING AND WEAVING.
Count range from NE 6/1 to NE 32/1
100% COTTON RING SPUN COMBED YARN FOR KNITTING AND WEAVING
count range from NE 16/1 to NE 40/1
HEATHER ( MELANGE ) YARN WITH DYED PORTION OF POLYESTER
Count range from NE 10/1 to NE 40/1
POLY/COTTON YARN IN CARDED AND COMBED FOR KNITTING AND
WEAVING
Count range from NE 16/1 to NE 60/1
CVC YARNS IN CARDED & COMBED FOR KNITTING & WEAVING.
Count range from NE 16/1 to NE 60/1
100% COTTON COMPACT SPUN COMBED YARNS FOR HIGH QUALITY
KNITTING AND WEAVING.
Count range from NE 20/1 to NE 140/1.
Knitted Fabrics
FTML can offer the following Grey & Dyed Fabric, with Lycra & without Lycra:
1. Single Jersey Fabric
2. Pique Fabric
3. Interlock Fabric
4. RIB
5. Fleece
6. Thermal
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Finished Goods
FTML can also offer the following with & without Spandex:
1. Fitted Sheets, for both, retail & Institutional
2. Jersey Bed Sets
3. Pillow Covers
4. Comforters
5. Shells
6. Shams
7. Infant Bed Sets
8. Crib Sheets


VISION
To be the textile manufacturer of first choice for customers at home and abroad,
doggedly pursuing for sustained leadership in markets where it completes, and making
its valuable contribution in boosting the countrys exports.
MISSION
Our mission is to manage a textile business entity aimed at producing quality yarns
through innovative technology and effective resource management, maintaining high
ethical and professional standards and coming up to the expectations of all our
customers.
We persevere to achieve the highest possible operating efficiencies and lowest cost and
expand the business through selective expansion so that we are able to deliver
maximum value to stakeholders.

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2...SHAMS TEXTILE LIMITED

Shams Textile Mills set up its first mill at Chniot in 1968 and has since then expanded to the
strength of three state of the art units. By adopting progressive strategies and utilizing the latest
technology, this public limited company has earned the reputation of being one of the prominent
textile groups of Pakistan. With per annum sales of above $40m and a global clientele, Shams
Textile has grown to set the standard for quality in the textile industry.
The company successfully built enough reserves over time inducing the management to
think about the expansion of its existing facilities. The Management therefore decided to
increase its spindle age capacity to46,320 by installing another spinning unit at
Sheikhupura Road near Shahkot. The facility started its commercial production in
August 01, 1994 and ever since has contributed positively to the results of the company.
Our 21,360 spindle-spinning unit located at Shahkot has the capacity of producing
425,000 Kg (approx.) of the finest Knitting and weaving yarns monthly. Our strength is
our commitment to customer satisfaction. Every product passes stringent quality control
tests conducted on highly sophisticated machinery before it is dispatched to a customer.
The Company has grown steadily and has distinction of being associated with several
prestigious local and foreign firms. The modern yet conservative policies of the
company helped in attracting investment in the form of equity participation and loans.
The weaving, dyeing and finishing facilities have been shut down with the passage of
time due to lower profitability and the management's decision to primarily focus on the
spinning business which has always been the company's strength.

The specialized yarn based new spinning unit of 12,096 spindles has been added to
existing facilities of the Company at Shahkot to cater the demand of coarse count Slub,
Multi and Lycra yarns. The plant started its commercial production in January 2006.
Shams Textile Mills Limited is managed by people who have had vast experiences in
the textile sector. The management is constantly looking to avail opportunities in the
field of textiles and to grow on its strengths. It has a low cost and growth driven
approach to its businesses and is looking to grow further on the same policies.




MISSION / VISION STATEMENT

Our Business
We are a manufacturing organization operating integrated spinning and weaving
facilities in textile industry and our end products are sold to international and national
customers.

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Vision of Future Business
We are committed to becoming the premier manufacturing organization in the textile
industry maintaining market leadership in the present business and diversifying into
value added projects with the object of maximizing returns for all the stakeholders.


Our Strengths
We have made pioneering efforts in development of new products, which has enabled
us to emerge as a market leader. This together with an innovative and professional
management style has helped us to build a strong and financially sound base.


Our Strategy
We are determined to convert our vision into reality by using innovation to create a
market niche for our products and by investing in facilities, people, systems and new
technology, diversification into value addition and improvements in productivity and
service to customers. We shall aggressively exploit new markets by drawing strength
from our corporate image and by promoting a culture that encourages initiatives at all
levels of decision-making.


Our Values
We take pride in adhering to ethical business practices and in being a good
corporate citizen.
We respect our people and endeavor to provide them opportunities to realize
their full potential.
We recognize our responsibility to our stakeholders and society.










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3...SAJJAD TEXTILE MILLS

Sajjad Textile Mills Limited, a rapidly growing public Limited organization with ISO 9001-
2000 certification, is a reputed spinning company. Born on 12 June 1988 under the
Companies Ordinance of 1984, the organization is listed on Karachi and Lahore Stock
Exchanges of Pakistan and engaged in producing high quality combed and carded
yarn.The registered office of the company is situated at 19-B, off Zafar Ali Road,
Gulberg V Lahore.

OPERATING FACILITY
The company has its operating facilities at 64-KM Multan road, Jumber Kalan, Tehsil
Chunian,District Kasur.The company has successfully reached the capacity of 22,18
spindles from the initial number of 17280 spindles producing yarn counts ranging from
Ne 10/1-Ne 40/1 and Ne 4o/2 high end combed and carded yarn.
We believe in manufacturing the best quality products by using the newest methods of
TQM and modern mechinery.You will find a well trained work force to manage the entire
range of yarn assuring highly maintained quality, timely shipped consignments and
promptly entrained inquires.
your trust and faith in sajjad textile has enabled it to enjoyed repute of value,
commitment, and excellence both nationally and internationally. By the grace of
almighty, your relationship with us as customer or as a supplier is considered as that of
an investor therefore, we are committed to cherish and strengthens such affiliations.
MISSION STATMENT
We aim at reaching the heights never touched, horizons never discovered & our targets
are to:
Acquire high-tech machinery and obtain futuristic technology to achieve
maximum expansion in a
competitive quality environment
Improve quality of our products & services by developing a team of
proficiently skilled technicians and professionally strong manager
Strive hard to discover new local and international markets
Increase customer satisfaction level by strictly adhering to quality standards
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Develop effective communication with our customers
Customize our products to suit the customers needs
Provide logistic facilities to our valued customers
Make comprehensive arrangements for the training and development of our
human resource
Promote team work, sense of transparency, and creativity in our human
capital
VISION STATMENT

Sajjad Textile Mills is committed to emerge as a leading spinning unit by
Producing premium quality A+ grade yarn
Improving its effectiveness for total customer satisfaction
Complying with the requirements of Quality Management Systems
Keeping a significant existence in national and international markets
Struggling to be the best, striving to get better than the best

PRODUCTS
1.Yarn counts
We produce A+ grade combed and carded 100% Cotton yarn of counts ranging from Ne
10/1-Ne 40/1 and Ne 10/2-Ne 40/2
2.Single /Double
We produce both single and double ply yarn.
3.Carded / Combed
We produce both carded and combed yarn.
4. Waxed / Un-Waxed
We produce both waxed and un-waxed yarn.
5. Knitting Twist/ Weaving application
We manufacture yarn with respective twists, suitable for both knitting and weaving
applications.
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STATEMENT OF ETHICS AND BUSINESS PRACTICES
Everyone at Sajjad Textile Mills, directors or staff member, is the torch bearer of the
following code of ethics developed for the sake of protecting the organizations integrity
and repute:
Conflict of Interest
The management and employees are expected not to engage in any activity which may
cause any conflict between their personal interests and those of the company, such as:
Each transaction should be in the interest of the organization and not in the favor
of any director or staff member.
Staff members are not supposed to carry out personal business in companys
premises or use the companys facilities for any such purpose.
If a staff member has a direct or indirect relation with an outside organization
dealing with Sajjad Textile Mills, he/she must bring the same to the notice of the
management
Confidently
All staff members are required not to disclose any secrets, business secrets, or other
crucial information of the company to any outsider even after leaving the service of the
company unless it is required by a court of law.
Kickbacks
All staff members are strictly forbidden to accept any favor, gifts or kick backs from any
organization dealing with the company. In case a favor is considered, in the interest of
the company, the same should be disclosed clearly to the management.
Proper book keeping
All funds, receipts and disbursements should be properly recorded in the books of
accounts. No false or fictitious entries or misleading statements, that might harm the
operations of the company, should be made. All agreements with agents, dealers and
consultants should be made in writing, supported with required evidence.

Health and Safety.
Every staff member is required to take care not only of his/her health and safety but also
of those working with him/her. The management is responsible for keeping its staff
members insured as per government rules and regulations.
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Environment
To preserve and protect the environment, the management as well all staff members
are responsible to utilize the companys facilities and go through practices with a
healthy environment vision. This healthy vision is both for their benefit and for adjoining
communities

Economic conditions affecting company and its activities

The textile industry had played an important role in the economic development of
Pakistan and was the largest industrial sector in terms of investment, employment of
labour and exports. It accounted for 64 per cent of Pakistans export,46 per cent of
employed industrial manpower, and 8.5 percent of GNP. The period between 1980 and
2001 had witnessed vast growth in the industry. Despite its impressive contribution to
Pakistans national economy, the textile industrys share in world export of textile and
clothing (especially in clothing) was insignicant due to its low competitiveness.
Marketers need to consider the state of a trading economy in the short term and long
term. This is especially true when planning for international marketing you need to focus
on
Interest rate
The level of inflation Employee level per capita income
Long- term prospects for the economy Gross Domestic Product(GDP) per
Capita, and so on

Power Crisis
The textile lobby loves complaining about the power crisis and high interest rates, but
executives and shareholders of major textile firms agree that the sector can do far more
on its own to increase its productivity and global competitiveness.
Indeed some firms are already investing in efficiency audits, such as MASOOD Textile
MILLS, a Fasilabad-based exporter of its products.
''It is difficult for anyone to find their own shortcomings and then to rectify them, said
the companys CEO. So we give much importance to the services of experts who could
tell us how we can improve our efficiency levels.
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The textile lobby, however, remained firm in its denial that the industry had a
competitiveness problem, claiming that every calamity befalling the textile industry was
the fault of the government and that the firms themselves were entirely blameless.
Mohsin Aziz, the head of the All Pakistan Textile Mills Association (APTMA), the largest
textile lobby in the country, said: Based on the recent surveys of foreign consultants,
we believe that the overall Pakistans textile mills are quite efficient. The real problems
of industry are power shortages and high interest rates in Pakistan that are hindering
the growth of industries in the country.
But while most textile executives acknowledged that the power crisis was a problem,
they also say that it is not an insurmountable one. It is true that Pakistan has been
affected by the continued power shortages, Sohail Tabba, CEO of Gadoon Textile Mills
and Fazal Textile Mills told The Express Tribune, But unless we work on efficient power
systems, we cannot control power shortages.
Improvement in efficiency levels is the key to success without which one cannot tackle
present problems of textile industry like power shortages and rising non-performing
loans, he added.
Most analysts agree that the problems of textile industry are not just because of power
shortages and security problems in the country and can be attributed to a highly
inefficient business model.
The textile industry of Pakistan is one of the least efficient industries of country, said
Muzammil Aslam, managing director at Emerging Economics Research. With
continuous government support of last five decades, most of our textile
industries have become lethargic and have totally ignored the basics of
efficiency.
Many companies have only spinning or weaving facilities, which exposes them to wild
fluctuations in global cotton prices. Pakistans textile exports declined by 10.3% in fiscal
2012, largely due to falling cotton prices, after having soared in the previous year due to
skyrocketing international prices of cotton. The most efficient and successful textile
companies around the world are composite companies that can start with raw cotton
and end with a finished garment, Aslam said.




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Reduction in interest rate and Inflation
Textile industry demanded reduction in interest rate by 250 bps to 7.5 percent in the
monetary policy, likely to be announced shortly, as growth of Large Scale Manufacturing
(LSM) sector is stalemate due to short of investment. They said the industry off-take has
reduced by Rs 100 billion since September 2010 to September 2012 that has arrested
growth in the Non-Performing Loans (NPLs) of the industry.

However, they added, it has a dire impact on the investment front, as all investment
plans have been withheld by the investors due to high interest rate, which has yet to
witness the regime of single digit to compete with regional competitors. It may be noted
that the State Bank of Pakistan has already reduced interest rate by 400bps during last
two years that has played vital role in stopping nosedive decline in industrial growth.
However, still the industry is badly looking for substantial reduction in interest rate, in
line with the regional competitors, to make new investments and avail the upcoming
trade opportunities from the EU, including recently trade concession on 75 items and
upcoming GSP Plus.

Meanwhile, inflation has also come down to 6.5 percent that has asserted the industry
viewpoint agitating the point that the country is facing cost-push factor and not a
demand-pull. The textile industry is the worst hit of the high interest rate, losing strength
fast amidst unprecedented energy shortage, both electricity and gas. A good number of
textile mills have closed down operations from November 2007 when energy shortage
hit the country. Many of the mills are still unable to meet financial obligations due to shift
losses with rise in energy shortage. However, the government as well as the SBP
responded poorly to the emergency like situation.

The role of Gohar Ejaz, Group Leader APTMA, cannot be ignored in this regard. He
contested industry case by tooth and nail and convinced the government functionaries
to bring 180 degree shift in its approach towards monetary policy. Today, the
government has reduced interest rate from 14 percent to 10 percent and much credit
goes to unstinting efforts of Gohar Ejaz. But the industry is apprehending losing more
against India if the government failed to respond industry call for reduction in interest
rate by another 250bps to enable the industry in investing more to create jobs and earn
foreign exchange for the country. It becomes further important in a situation when Indian
textile industry has planned to create 20 million jobs by 2015, added the industry
sources.

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Some positives change in the Economy
On the back of a slowly but surely evolving middle class, there exists a visible
consumption boom in the economy where companies are going through a period when
domestic sales have never been higher. An exceptionally high percentage of young
employable youth is unearthing new dynamics, as these fresh minds strive to create
their own opportunities, thereby unleashing a wave of innovative entrepreneurial
benefits. For example, the quality and speed at which the Pak urban consumer and
service sectors (fashion wear, eateries, home decor, healthcare centres, private
education, beauty salons, leisure and entertainment etc) are growing has but a few
parallels in the world.

The inflow of foreign exchange remittances by Non-Resident Pakistanis (NRP) has
never been stronger and provided its current rate of growth does not stall, the
government envisages that the final figure is well on course to touch the $18 billion per
annum level. Add to this, the fact that our exports registered $25 billion in 2011 and the
possibility that if we can somehow supplement these inflows from NRP remittances and
national exports, by re-attracting the presently dried up Direct Foreign Investment, there
actually exists a strong case for successfully balancing our current account status -
Pakistan as we know (even with the oil prices are high) is an economy that traditionally
imports between $35 and $38 billion per annum.
Further, according to the latest data released by the FBR, the revenue collection this
year is on target and is likely to cross the Rs2,000 billion mark for the first time in history
our tax to GDP ratio can start looking quite respectable.
Automobile Sectors sales are about 30 percent above from the fiscal year 2004-05
(regarded by auto pundits to be their best year). Companies and banks in general have
announced healthier profits with especially the consumer goods companies leading the
pack by churning out some unprecedented results. This coupled with the new policy
announcement on investment in the shares markets has given a boost to the stock
markets with the KSE (Karachi Stock Exchange) Index climbing to near 14,000 points. If
the returns can continue to be interesting, such an opportunity is bound to even lure
back foreign investment into the Pakistani markets.


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RATIO ANALYSIS
1. LIQUIDITY RATIO
CURRENT RATIO
In 2013 the current ratio of the company is 1.52 which indicate company easily payoff
its current liabilities with current assets but financial management of the company is
poor company need to increase the sale because inflation rate little bit decrease(explain
in economic condition previous mention) according to the economic condition and
government also introduce favourable policy regarding textile sector company need to
introduce more credit policy due to this sales increase and company should also invest
the money some profitable project and increase his profit.
Quick ratio
In 2013 the quick ratio of the company is 0.85 which mean company easily payoff its
current liabilities with current asset but the company financial management poor need
to focus on management policies.
The stock movement of company good which means company improve his sale .we
less stock in current assets because we remove the uncertainty and find more accurate
answer that we pay current liabilities with current asset excluding stock .
Cash ratio
cash ratio of the company in 2013 is 0.13 which mean company payoff its current
liabilities with cash(cash in hand ,cash at bank and short term investment).Cash ratio
gave the more reliable answer about liquidity position of company bust it's not properly
used.
2. SOLVENCY RATIO

Debt to Equity ratio
In 2013 the company debt to equity ratio 0.75 which indicate company easily payoff its
long term debts with equity it is a good position of the company cannot declare
insolvent.

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Total Debt to Equity ratio
In 2013 the Masood textile company TDE ratio is 1.48 which indicate company easily
payoff its total debts with equity it is suitable position for the company.

PROFITABILITY RATIO

Gross profit margin ratio
In 2013 the gross profit margin ratio is 19% the cost of production increase but the sale
of the company is also increase because company sale the goods at credit base which
effect the overall gross profit of the company cost of production increase because the
expense related production increase as compare to previous year.

Operating profit margin ratio
In 2013 the operating profit margin is 12% because the fuel cost and other operating
expenses like wages , salaries and other benefits is increase which effect the Operating
profit margin but company is at good position.

Net profit margin
In 2013 the net profit margin is 4.8% which indicate company is at good position and
generate sound amount of profit and company cannot suffer at any loss the tax rate of
the company is same but the interest rate is decrease as compare to previous year so
due to this company Net income improve.








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SWOT ANALYSIS

Some notable strengths and weakness opportunities and Threats of Masood textile that
we analyse given below.
STRNGTH WEAKNESSES
Flexibility in related products
production

Lack of benefits and reward for
employee
TQM Implementation High cost of production
Aggressive R &D department Small international market share
Product innovation ability Unstable political situation
Supply chain management Law and order situation of the
country
Strong security system Shortage of electricity
Latest mechanized machinery Less promotional activities
Customer are loyal, cheap labour Sharply increase in raw material
price
Fastest growing textile in Pakistan High administrative cost
High qualified and skilled
management
Technological obsolescence

OPPORTUNITIES THREATS
Masood textilr can expand product
line
New entry of competitors
Masood textle can capture new
market segment around the world
The requirement of the buyer
change according to the
environment
Firm can hire more well educated
and experience people
Change of government policies with
the passage of time
Re-angering product system Political instability
Potential of improving confidence in
buyer by working directly and
closely
Rising cotton price, price pressure
Introduce home textile Change market trend
Crop damage during rainy seasons
Terrorism in the country
Competitive pressure

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Porters five force analysis

APPLICATION OF PORTERS FIVE-FORCES MODEL ON THE MASOOD TETILE
INDUSTRY

1. Rivalry among existing firms
Rivalry among existing firms in Textile industry in Pakistan is high or intense. This is due
to the following reasons:
The textile industry had a rapid and inclining market growth in the past five years. This
causes the firms to fight for market share, thus increasing the rivalry.
There is tremendous growth noted from the last five years in textile industry because
the exports of textile products increased very much, this gave firm chance to earn high
profit and grow in the business.
There are many manufacturers in textile industry thats why competition is high.Product
differentiation is low in textile industry thats why the majority of consumers are buying
low-cost products whichever brand it might be. This causes higher levels of rivalry
among the firms, but there is also a significant amount of brand recognition in the top
small portion of the industry.
2. Threat of new entrants

In the textile industry there are several barriers that make difficult for firms to enter into
the market. Some of these are listed below:
The existing companies like Gul Ahmed Textile, Al Karam Textiles, and Nishat Textiles
and Masood Textile are investing high capital in research & development and
technology in order to create new innovative products. So, the new entrants have to
face high capital investment.
Most of the companies approach then customers directly by opening their outlets in
shopping areas. It helps them to build brand recognition among the customers. So, the
new entrants need time to establish their brand image in the market.
In order to reduce costs, manufacturers have to be up-to-date with the latest
technology. Currently, the top textile mills like Gul Ahmed, Nishat Textiles and Yunus
Textile mills (YTM) and Masood Textile are equipped with good machinery to
29 | P a g e

manufacture the product. These machines help keep the costs low, which helps them in
competing against low-cost overseas manufacturing and new entrants.
Consumers are interested towards low-cost products. This shows that the majority of
the consumers are willing to pay no or very low switching costs for a higher value
product. This creates another barrier for new entrants.
In the current political and economic conditions of Pakistan it is not easy for a new
entrant to establish the business.
3. Bargaining power of buyers
The textile industry has high bargaining power of buyers because the number of low-
cost manufacturers is more than the number of buyers. The reasons for high bargaining
power of buyers are:
Stores like IDEAI'S and Habbit are going for backward integration as they are
manufacturing their own products by cutting the middlemen. It helps them to create their
own brand name. So these brands get an opportunity to sell their products at low price.
Any retailer/buyer can always switch to a lower cost supplier for the same product this
shows that the switching cost is low in industry.There are many manufactures who
offers the same products in same quality but in different price. Now it depends on the
buyer whether it is price sensitive or brand conscious.
4. Bargaining power of suppliers
The bargaining power of the suppliers is low or weak for the Textile industry due to the
following reasons:
The number of manufacturers is high and the demand in the market is also high thats
why switching cost is low for the suppliers because the products are almost
standardized.
Textile mills like Masood Textile mill, Gul Ahmed and AL-Karam Textiles Feroz Textile
are going for forward integration as they sell their products in their own outlets or stores.
5. Threat of substitutes
Threat of substitute products in the textile sector is very low because, There are no
alternatives available for the textile products. There are no potential substitutes for
weaving products.


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COMPETITOR ANALYSIS

Pakistan textile industry has competition with the local and international market.
In the local market, competition is between these firms:
Masood textile
Fazal textile
Shams textile
Nishat textile
Al-karam textile
sajjad textile
Saphire textile
Yunus textile
Yusuf textile
Chenab textile
Gulistan textile
Gul-Ahmad

In international Market:
China
India
Indonesia
Bangladesh
Uzbekistan
US
Others
INFORMATION REGARDING MASOOD TEXTILE
Annually sale volume us$50 million-us$100 million
Interest rates
Interest rate for 2010 is 12.77
Interest rate for 2011 is 14.13
Interest rate for 2012 is 12.30
Interest rate for 2013 is 9.73

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CONCLUSION...
The lack of research and development (R&D) in Masood the textile has resulted in low
quality of cotton in comparison to rest of Asia. Because of the subsequent low
profitability in cotton crops, farmers are shifting to other cash crops, such as sugar cane.
It is the lack of proper R&D that has led to such state.
Moreover, critics argue that the Pakistan textile industry has obsolete equipment and
machinery. The inability to timely modernize the equipment and machinery has led to
the decline of Pakistan textile competitiveness. Due to obsolete technology the cost of
production is high in Pakistan as compare to other countries like India, Bangladesh &
China. So due to the lack of technology Masood textile industry also suufer with many
problems
Masood textile mills is facing high cost of production due to several factors like the hike
in electricity tariff, the increase in interest rate, energy crises, devaluation of Pakistan
rupee, increasing cost of inputs, political instability, removal of subsidy & internal
dispute.
Determinants of price in the textile industry include the government policies, tariffs and
duties, rate of inflation, behavior of the competitors, and the type of material used. As
the inflation rate is going, the price of textile products increases gradually.


Recommendation
More textile mills should emerge in Pakistan this will further increase our exports
that will benefit our economy and reduce our trade deficit. More employment
opportunities will arise when industries come in the market.
But the uncertainty in the country will always remain a major threat and this need
to be tackled along smartly and effectively. The best advantage, the Pakistan
textile industry will strive to maximum level to be the textile pioneer of the world
textile.




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References
1. http://www.investopedia.com
2. http://www.scribd.com
3. http://www.masoodtextile.com
4. http://fazaltextile.com/
5. http://www.sajjadtextile.com/
6. http://www.shams.com.pk/
7. http://tribune.com.pk/
8. http://www.studymode.com
9. http://www.docstoc.com
10. www.apexcpe.com
11. http://www.sbp.org.pk
and also refer some books regarding this Assignment
Analysis of financial statement
marketing management
theory of economics
Fundamental of management











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