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TEXTILE INDUSTRY OF
PAKISTAN
In 1947, at the time of independence Pakistan Textile Industry was like a feeble
child with only three cotton mills, a small woolen spinning, whereas weaving,
hosiery and knitwear were features of cottage industry. Now when we have
entered into new millennium, Pakistan’s Textile Industry has become a stalwart
fellow, which has grown in all sections. Now we are not only self-sufficient but
are also exporting surplus products. Today we have over 8.358 million installed
spindles, 166,000 installed rotors 20,000 shuttle less looms, 200,000 power looms,
8,000 terry towel looms, 7620 canvas looms, 157,000 woolen/worsted installed
spindles, 15,000 woolen looms, 12,000 knitting machines, over 600 processing
units and over 2500 garments units.
We all know, journey of textiles starts from seed and culminates at ready-to-
wear garments and in present competitive world scenario, it is combination of high
production efficiencies, most appropriate technologies and work methods, together
with trained work force, management and marketing skills which can give any
industry a successful status.
Textile industry today is the backbone of economy of Pakistan and provides the
largest number i.e. about 40% of total industrial jobs and very vast industrial
service opportunities. It has always been the pillar of Pakistan’s economy
contributing substantially to Govt. revenues. It also has a dual linkage. As a major
consumer of domestic cotton, it provides a market for a leading cash crop and thus
has a critical influence on the growth and productivity in agrarian sector. Hence
the performance of the textile industry has a vital impact on the over all growth
and development of the economy. The industry also tops, as an earner of ever-so-
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scarce foreign exchange and exported goods worth US $4.9billion last year and
this amount is about 60% of the total national exports. Its share in total GDP is
8.5%. The investment in Textile Industry is 31% of total investment. The interest
that banks and other financial institutions earn from Textile sector is RS. 4 billion
per annum. The salaries and wages that Textile sector provides to workers is Rs.
40 billion per annum. Its contribution to R & D is RS.116 million per annum. This
very remarkable achievement did not come easily and is due to the combined and
tireless efforts of the Govt. Planners, industrialists, technical support staff and our
hard working and inexpensive labor. On the top of these, Pakistan has been
blessed with suitable climate and perennial supply of good quality water to grow
about 1.7 million tons per annum of the lint cotton, “the silver fiber” that forms a
natural and sound base for a viable textile industry. Pakistan textile industry
consumed 1441 million Kg raw cotton and 406 million Kg fiber during 1998-
1999.
Value-added product exports of Pakistan Textile industry are very less. The
percentage of yarn exports in total textile exports is 20% and percentage of cloth is
24% while 56% of total textile exports includes others textile manufactures. We
should produce more value – added products because if we see the value addition
chain the prices of cotton, yarn, cloth, garments, towels, bed wear are US$ 1.33,
US$ 2.33, US$ 5.41, US$ 6.71, US$ 4.05, US$ 5.51 per Kg respectively. Thus we
can earn additional foreign exchange by exporting value – added products.
S P I N N I N G I N D U S T RY O F PAK I S TA N
Areas comprising West and East Pakistan were big producers of good
quality cotton and jute fibrous raw materials but the value-added conversion
industries were mainly located around the Indian cities of Bombay and Calcutta in
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the respective order. At the time of independence Pakistan was producing about
one million bales of cotton, which were exported and from the receipts, cloth and
yarn for the handlooms were imported. The Govt. took notice of this situation
immediately and encouraged setting up mills in both the wings of the country and
in 1960 installed two million spindles and 30,000 looms. In those days Govt.
sanctioned only composite mills with 25,000 spindles, 500 looms and a wet
processing unit to finish the cloth produced in mills. The balanced quantity of yarn
was required to be sold often through an official channel to the weavers of
handlooms and later to the power looms. The mill owners made huge profits but
their efforts for further investment were hindered due to paucity of foreign
exchange. This situation, however eased when the machinery manufacturers
started offering their plants under “ the suppliers credit or pay as you earn” plans.
This facility brought in its wake escalation of prices of the textile machines and
this started a new development of installing only the spinning units of 12,500
spindles. Many of the spinning units were then sanctioned on political
considerations but went into the hands of genuine entrepreneurs is no time. At the
time Govt. tried to disperse the industry away from the existing industrialized
cities and new textile centers emerged in small towns like Kotri , Sheikhupora etc.,
although these were quite close to the existing centers in the big cities. By 1971,
Pakistan had a substantial textile industry with about 3.5 million spindles and
38,000 looms in the mills sectors and exported textile goods worth US$400
million.
After the separation of East wing, Pakistan was left with about 2.5 million
working spindles but growth was continuous and rapid and by 1985, the figure
reached 3 million. At that time the Govt. took a decision to convert all the home
grown cotton into yarn and for the first time, decided to waive the requirement of
getting official sanction for setting up a spinning mill. This decision opened the
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floodgate and in just five years, the capacity increased to 5 million spindles. The
present working capacity is about 8.358 million spindles and 166,000 rotors. It
may be mentioned that about 1.724 million spindles are lying idle in 143
financially sick mills which being of old technology have become redundant.
In 1998-99, the spinning industry produced 1542 million kg of yarn out of
which about 26% was blended yarn, 47% was coarse count yarn, 24% was
medium count yarn, 2% fine and 1% super fine yarn.
Development in the spinning sector is not in numbers alone but there is also
an improvement in average productivity. On the basis of 20/1 count productivity
has gone up from 190 gms in 1986-87 to 235 gms per shift per spindle in 1996-97.
Pakistan exported 508 tons that is about 33% of total cotton yarn produced in
1996-97 and this makes her the largest exporter in the world with a share of about
28%. This is not to be very proud of because of yarn is a primary and not a value-
added commodity. Incidentally it has been estimated that about 70% of the total
cotton yarn is exported directly or after conversion into the value-added products.
During 1998-1999 textile industry produced 1,542 million kg of yarn, out
of which 54.94 million kg (3.56%) was consumed in mill while 417.78 million kg
(27.10 %) was exported and 1,069.2 million kg (69.34%) was available for local
market.
The price of yarn (20/1) during 1998-1999 was 472.61 rupees per bundle of 10
LBS.
Pakistan exports yarn to the following major countries: Hong Kong
(25.38% of total yarn export), Japan (19.72%), South Korea (8.90%), Asian
countries (8.31%), E.C.M-“under quota restraint” (7.41%), Dubai (3.72%), China
(7.77%), USA- “under quota restraint” (4.81%).
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KTML is a Public Limited Company incorporated in the year 1991 under the
Companies Ordinance 1984 and engaged in the production of Cotton Yarn for
knitting and weaving industry both for local and export markets. The plant and
machinery is a combination of Chinese, Japanese and European Origin and
comprises of 31,680 spindles. We have already made additions of Reiter Draw
frame and Combers / Unclip Machinery which has greatly improved the quality of
the Yarn. The company is manufacturing yarn under the brand name of "WHITE
DOLPHIN" which has achieved a very secure and favorable share in the
international market due to our quality. The Federation of Pakistan Chambers of
Commerce & Industry (FPCCI) awarded the Export Trophies our company for the
year 1999, 2000 & 2001 while company has also been nominated as the winner of
Export Trophy for the year 2002. The group is well renowned in textile sectors of
the country. The sponsors of the company are professionally equipped and fully
competent to run a corporate entity. They enjoy good market reputation and are
well experienced in their line of trade. The company has a team of qualified
engineers and technicians to look after the upgrading and maintenance of the plant
and machinery. The annual production of the company is 7000 Metric Tones.
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Mission Statement
Objectives
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MANAGEMNET PROFILES
KUNJAH TEXTILES MILLS LTD
NO OF EMPLOYES 890
MANAGEMNT
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BUSINESS PROFILE
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FINANCIAL YEAR
The financial year of the company starts from October 1, and ends on
September 31, of the next year.
RAW-MATERIAL
Ginned cotton is used as raw material in KUNJAH TEXTILE MILLS
LTD
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ADMINISTRATION
DEPARTMENT
Labor Office
Gate Office
Time Office
LABOUR OFFICE
As required by the labor department of the government of Pakistan, this
office has been set up to deal with all the matters that are related with labor. The
dept. is headed by the labor officer. He is responsible to resolve all the disputes,
conflicts, misunderstandings and any other kind of matter which may arise from
time to time b/w the labor and the immediate supervisor or with any other person
in the organization.
It is the duty of the labor officer to inform the legal requirements
concerning the labor and company affairs.
It is also the duty of the labor officer to satisfy himself regarding payment
of bonus, gratuity, and other benefits to labor and to keep their morale and
motivational level high.
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* No out side visitor can come into the Mills premises without the
permission of the security guards.
* Whenever any visitor wants to enter into the mills, security guard firstly
contact with the authority in the Mills to grant the permission to enter into
the Mills premises.
* Security guards can check each and every person before coming in or
going out of the Company gate for the security purposes.
* They see and check the OUT WARD GOING PASS of the certain things
when these ought to bring out of the Mills premises.
* They have certain uniform of blue shirt and light brown pent.
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GATE OFFICE
This office has been made to keep the record of each and every thing
coming into and going out of the Mills gate.
For this purpose gate office clerk maintains two type of registers called:
1- outward-going pass register
2- Inward-going pass register.
When every thing including raw material, stores supplies, or any other thing
comes into the Mills premises a document named as I.G.P is made in which
information like date of supplies, description, quantity of the material and any
other remarks are written. In the same way, O.G.P is prepared for out going things
etc.
TIME OFFICE:
* This office keeps and maintains the time record of all the workers on time
cards and pay register for the final costing of the workers salaries.
* It keeps the attendance records, which is than used to calculate the salary
to be paid to the workers on monthly basis.
* It keeps the records of the overtime, leaves, number of days worked of all
the workers and than calculate their overtime on the basis of the basic
salary of each worker.
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PRODUCTION &OPERATION
Kunjah Textile Mills, has 31,721spindles installed, which have the capacity to
produce 7000 Tons/Year of combed and carded yarn.
Type Counts Production
Combed 16/1 to 80/1 82%
Carded 30/1 18%
At present Kunjah occupies an export of 78%, this share is increasing along with the
companies reputation in the world market.
Major Export Markets: Hong Kong,South Korea, South America, Vietnam, USA
and Canada.
COTTON YARN
Cotton thread is prepared which is twisted in the form of yarn.
To produce this type of yarn 100% cotton is used.
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DOUBLE YARN
When two fibers or threads of a same count yarn are twisted together to
make a single, it is called double yarn. In it, for a same count, the weight and the
thickness of the yarn becomes doubled.
SINGLE YARN
Simple yarn not joined together of a certain count is called single yarn.
TYPES OF COUNTS BEING RODUCED
KUNJAH TEXTILES MILLS LTD is producing the following different
kinds of counts:
COTTON YARN (100%)
COMBED 20/1, 30/1, 40/1,50/1, 60/1,80/1
CARDED 30/1
SPINNING
KUNJAH TEXTILES MILLS LTD has 30720 installed spindles and
Different types of yarn are produced in the spinning function. Spinning process
includes the following steps:
Material Handling
Opening & Packing
Carding
Drawing
Simplex or Roving
Ring
Auto Cone
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Packing
BLOW ROOM
Following are the objectives of blow room:
Mixing
Opening
Cleaning
Lap-formation
Mixing
This function is performed in blow room. In the mixing room different
bales of cotton from different lots are mixed for humidity control purposes. In the
mixing room, from 100 lots of cotton approximately 85 bales are opened for
mixing according to the capacity of the room.
1 Lot = 100 Bales
Mixing time is approximately 24 hours, because it affects on the production
quality.
There are two ways of mixing:
1- Manual
2- Auto mixing
IN MANUAL MIXING, different grades of cotton are mixed, so that there is best
quality variation. This function is performed through human hands.
IN AUTO MIXING, a machine, name Auto Pluckier is used. Cotton bales of
different grades are spread in a circle. This machine cuts and picks the surface of
cotton heap automatically and mixes up to great uniformity in raw material.
MATERIAL OPENING
Mixed cotton material is opened in this step. Joined fibers of mixed cotton
are separated to facilitate the cleaning process.
CLEANING
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Waste material (trash) is separated from raw cotton through this process.
A machine, named Beater is used for this purpose.
LAP-FORMATION
Lap-sheet is prepared in last step (End-Product) of Blow-Room. The
purpose of this process is balancing and controlling the uniformity in the quality of
production.
CARDING
Carding is also called the “Heart of Spinning” the fault created and
maintained in this step cannot be controlled in any other step.
A sliver is prepared from Lap-Sheet. This sliver (role) is called Carded
Sliver. Carding Automatic Fiber Straightening Machine performs this function.
Banded fiber is straightened and nips and Slums are controlled. The fault created
at this stage, seriously disturbs the quality of yarn. So it is called the “Heart of
Spinning”
DRAWING
The main objectives are;
Fiber straightening
Creation of uniformity
Variation control
Drafting
DRAFTING
In this section, six or eight carded slivers are joined and mixed to get a
single sliver (rope). This sliver is called Drawing sliver.
SIMPLEX OR ROVING OR FLY FRAME SECTION
In this process, drawing sliver is further converted into Roving by
drafting. Roving is a very thick cotton rope. This thick cotton rope is folded
around a cylinder shape called Bobbin. This bobbin is called simplex bobbin.
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RING SPINNING
Objectives:
Further drafting
Twisting
Winding
The twisted cotton thread is winded around a bobbin by spindles speed. This
bobbin is called Ring Bobbin.
AUTO CONE
In this section, cotton thread cones of specified weight, are prepared. A
machine called Usters in fixed with each ring bobbin. This machine control the
thread. This machine is Automatic and cuts the thread at Slums & Nips etc. and
join the both ends after sucking into it, waste material.
PACKING
Cones prepared in Auto Cone section are transferred to finished good
Store Room. These Cones are packed in polythin bags and shipped according to
customer’s specifications.
Normal Packing 1 Bag = 40 Cones = 100Lbs
100 Lbs. is the net weight of cotton yarn packed in a bag.
To control the quality of yarn is not easy job. There are different variables
for the measurement of quality of yarn. It is even affected with the weather
conditions KTML Quality Control Department is headed by General Manager.
There is technical manager and laboratory in charge who are responsible for the
quality of yarn. Quality is checked at each and every step of production process.
KTML has fully equipped quality control laboratory where quality is measured
using different statistical techniques. Quality is maintained from the purchase of
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cotton bales to the final manufacturing of yarn. The different variables for
measuring quality of cotton and yarn are following
INVENTORY SYSTEM
MAIN INVENTORY
The main inventory of the mill is the cotton which thy buy in the month of Oct.
Nov. Dec. Jan. Feb.
OTHER INVENTORY
The inventory include the consumable store and spares
SCHEDULING
The yarn is produced on receiving orders but if there is no order regular
counts are usually produced on receiving the order a schedule is prepared which
specifies how many frames are to be assigned to a particular count. This schedule
is given to the mill manager who assigns the production to the jobbers who are
responsible for the level of production in their departments.
FACILITY LOCATION
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MARKETING DEPARTMENT
Is the key department of the organization and half of the success of the business
depends upon the activities of this department because this department has direct
contract with the customer
G.M MARKETING
EXPORT SECTION
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KTML has local market as well as export market; therefore the major job of all the
marketing managers is defined. The major steps, which are involved in this
process, are as follows.
A) DIRECT CUSTOMERS
Direct customers are those who directly import the yarn from ATM. This
type of customers enjoys the low prices because of the fact that there is no
commission involved in that case. In this type of correspondence there is no
intermediary.
B) AGENT(COMMISSION AGENT)
In this aspect there are three possibilities
1) Pakistani agent is involved
2) foreigner agent is involved
3) Pakistani as well as foreigner agent is involved.
First possibility occurs when a foreign agent has some direct customer in
the foreign country and that agent contact with KTML. The commission paid to
agent is added to the cost. The commission ranges from 2% to 3%.
Second possibility occurs when a foreign agent has some customer in his
country and that person contact with KTML. The commission in that case also
added to the cost. The limit of that commission ranges 2% to 3% according to the
amount of invoice. The %age depends upon the profit margin, which is given by
the customer
Third possibility occurs when a foreign agent has some customer and that
agent contact with Pakistani agent and then Pakistani agent contact with ATM. In
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this case the maximum commission for both the agent is 4% which they distribute
by mutual understanding.
SCOPE:
This procedure is applicable for all sort of yarn being produced.
PURPOSE:
To maintain & increase the export with better quality goods and services.
To ensure that services fulfill the needs of customers.
RESPONSIBILITIES ACTIVITIES
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PROCEDURE
INQUIRY
First of all customer send enquiry. He tells about his requirements that
how many quantity of yarn is required in what count and specification. In response
the supplier send quotation to the customer and tells about the detail of his order.
Suppliers sees whether he can meet his requirement or not. The negotiation is
started between seller and customer in which prices is settled, delivery date is
decided and other terms and conditions are discussed
At the end a sales contract is signed from parties, seller and customer. In his sales
contract following things are mentioned.
COSTING
Costing sheet is prepared for C.O.O approval. In absence of C.O.O
department in charge approves price.
COSTING APPROVAL
CEO gives approval or may suggest any other price to be offered.
PRICE QUOTATION
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2- Form of L/C
3- Revocable or irrevocable
4- Date of issue
5- Buyers name
6- Suppliers name
7- Currency code e.g. US $ or
8- Amount
9- Payment terms
10-Shipments
11-Loading
12-Transportation
Performa Invoice
After the negotiation on prices took place and both the parties agreed.
Then the Performa invoice is formed in which all the conditions of L/C and total
quantity of order and the total price of that order is mentioned. The invoice is
faxed to the buyer and after the confirmation and opening of L/C production is
started of that order.
Description
Count 20/1 carded 100% cotton
Quantity 660 cartons
Packing sea worthy standard
Shipment July 3,2000
Price US $ xxx per kg
Amount US $ xxx
Payment payment by confirmed irrevocable L/C
Commission 2% to foreign agent 1% to local agent.
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PRODUCTION MEMO
Production memo is a statement in which all types of instruction about the
production of the given order are written.
SHIPMENT
If the goods are to be custom cleared at Multan dry Port, these are sent to
dry port for clearance. Documents are sent to clearing agent same day or next day
and followed up to ensure that these goods are custom cleared without any
unnecessary delay. In case of dry port, original bill of loading and 4th copy of
shipping bills are collected from office agent and dispatched to Karachi office for
preparation of post shipment documents. Concerned staff follows up dispatch of
goods with Karachi office port to ensure on time shipment.
Post shipment documents are received from Karachi office and after
proper recording, handed over to Finance dept. for negotiation. Shipping details
are noted in relevant registers. If there is any delay in receiving payments, relevant
person sends telex/ fax to customer for timely payment. Order registers are up-
dated periodically.
MIS REPORTS
Balance order instructions /status reports are updated periodically.
Balance order list up dated fortnightly for their information. Sale comparison
reports are updated in computer network on monthly basis, it comprises one
month’s status of shipment, invoice values, complaints and claims. (if any)
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• Kind of packing
• Gross weight
• Volume
• Means of transportation
After invoice is O.K an L/C is opened by importer in the favor of exporter of the
specified amount. Then imports are made according to the rules and regulations
PRODUCT MIX
PRODUCT
KTML produces high quality yarn. It produces carded, combed, weaving,
knitting, pure cotton and polyester cotton yarn. KTML exports as well as sells in
the local market. All products are produced according to the requirements of
customer orders.
PRICE
Pricing is an important factor in the marketing process for any company.
The price policy of company should be in such a way it should produce a
reasonable profit, for the company and should satisfy the customer. Following two
factors are very important.
FIXED COST
Fixed cost is the costs which remain always same in total whether produce
large quantity or small quantity. Fixed cost per unit rises as the quantity produced
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decreases and vice versa. Some companies always try to use their full capacity of
production because with increase in production the fixed cost decrease.
Following are some important factors of fixed cost.
♦ Salaries
♦ Rent
♦ Local Taxes
VARIABLE COST
Variable cost changes with the change in quantity produced. It increases
with increase in production and vice versa. Per unit variable cost remain same
whether produced large quantity or small quantity. Some examples are:-
♦ Material cost
♦ Labor
♦ Factory overhead.
PRICING STRATEGIES
There is no fix pricing strategy. It depends upon the market situation.
Competitors price also affect the prices. For developing new markers the prices are
relatively low. There are certain elements, which we consider before deciding the
price of our yarn. These are following
Price in case of middleman
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RICE DIFFERENTIATION
The price of KTML is slightly less with respect to their competitors. They
provide maximum services to their customers and in time deliveries.
PLACE: (DISTRIBUTION PROCEDURE)
Distribution Channel
KTML is using two types of distribution channels
1) Direct
2) Indirect
Direct channel
KTML ======== Customer
Indirect Channel
KTML ===== Middle man (agent) ===== Customer
As most of the product of KTML are sold locally. So they use different
modes of transportation to transfer the product from KTML to customer’s country.
Mostly KTML exports its products through ships. There are other modes of
transportation also being used:
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Trucking Cos.
Shipping Cos.
PROMOTION
Because the yarn is an industrial product, middle man (commission agent)
play the major role in selling the yarn. But ATM also directly contacts the
customers and sells yarn personally. So personal selling is a major promotional
tool for selling the yarn.
Local sale section deals with the sale of yarn in local market. So manager local
sales deals with the parties for yarn selling.
EXECUTION OF SALES PROCESS
For the sale in local market first they check industry rates and then they began
bargaining with the customers .the manager sets the rates with parties and term
and condition also by both the parties so in this way a contract is signed
Buyer name
Seller name
Product specifications
Price
Delivery time
Place etc
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Commission is also set by the company with agent if the agent is involved here.
Then order is given to the production unite confining x-mill date destination etc
So in this way local sale is done
G.M FINANCE
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MANAGER ACCOUNTS
So the activity start in such a way that all the voucher and invoices of all the
transaction first come the concerned mill to this department and then they enter it
in order to maintain their records
FUNCTIONS OF ACCOUNTING DEPARTMENT
Keeping Records.
Cash Management
Cash Receipts.
Stocktaking.
Stock Procurement
Analysis Of Reports.
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BANKING SECTION
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This section is the very important part of the Accounts Department. This
section handles all the functions that are related to the banks. Key functions of the
section are as under:
1- Preparation of Bank reconciliation statement.
2- Treatment of the bank’s debit and credit pieces of advice.
3- Preparation of the duty drawbacks statement and presenting to the authorities.
4- Preparation of D.D., T.T. Payment Orders. (PO) with reference to
payments to the parties.
5- All the works related to the letter of credit. L/C.
6- Re-imbursement and adjustment of the export finance.
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PURCHASE SECTION
Purchasing department deals with purchase of any thing that is demanded by
included machines, parts, raw material, packing material, critical accessories, and
lubricants etc
This department headed by a purchase Manager conducts all the
purchases. . Whenever any particular department requires any part of material, its
head makes demands of items to be required. This demands contains the
information like, items description, quality, quantity and others. The demand is
signed by the departmental head and the recommended by the C..O.O
Hierarchy structure of the purchase department is as follows
MANAGER PURCHASE
PURCHASE OFFICER
The purchase Manager has the list of preferable suppliers of the certain
items. It selects the supplier from the list. Then he visits personally to the market
and given the purchase order. The purchase officer has been provided a van, he
himself or through some other sources makes the arrangement to bring the
purchased material in the Mills premises.
For the store different heads has been created in the store ledger. these are
* Spare Parts
* Packing Material
* Electrical Goods
* Building Material
* Capital Goods
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=====
Ending Stores xxx
=====
The value of the ending stores is then taken to the Current Assets portion
if Balance Sheet and the value of the S.I.V. is treated as the expenses of the
company for the preparation of the Profit & Loss Account of the particular period.
TAX DEDUCTION:
As required by the Tax Authorities of the Government of Pakistan,
whenever the Company makes purchases from the supplier, gets services on
contract or on commission basis, the paid to the party is tax deducted. When the
Company will make the payment to the party (supplier, contractor or commission
agent) it will deduct the tax from the amount to be paid to them.
PURCHASE OF COTTON
The cotton selectors take samples of different grades from ginners then
tells the ginners that as soon as the company decides the quality and rates it would
call you immediately for deal.
CHECKING OF SAMPLE
These samples of different grades are checked by the chief executive. He
takes into consideration of the lab results too.
FINAL ACCEPTANCE
The final acceptance is made by the mutual agreement of CEO, cotton
selector quality control manager of the mill
PURCHASE SYSTEM
The cotton purchase of KTML is mostly done through different
commission agents then commission vary from company to company . The agent
takes the responsibility of all the function from delivery to payment.
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KUNJAH TEXTILE MILLS LTD
BANK
No spinning mill can purchase cotton with its own financial resources
alone. KTML also does the same. It gets helps of bank in cotton purchase.
Bank Al- Habib and Habib Bank finance KTML
PAYMENT
Mostly KTML purchase cotton on credit basis. The payment is made
through demand draft (DD) directly to the seller or to the agent. The payment is
made well in time to the seller.
LAB TEST
ATM also conducts the lab test inside the mill before doing a final contract
with the ginners in order to check the quality of cotton.
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KUNJAH TEXTILE MILLS LTD
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KUNJAH TEXTILE MILLS LTD
motivated at workers and management level but more incentives are given at
management level.
Different benefits and incentives are given which are as follows.
BONUS POLICY.
The Company maintains a bonus policy for its workers to initiate the
motive to work whole-heartedly for increasing workers and organizational
efficiency. According to this policy, Company shall give a sum equivalent 60%
basic salaries of worker at the end of the every accounting year in case of report
earning.
E.O.B.I. (Employees Old age Benefits Institution)
This is an important deduction from the salaries of the workers for the
regular income in the old age /post retirement age so that workers have a thought
of relief that there would be no financial problem after the expiry of their
employment. EOBI is an institution where this deducted amount is accumulated
for the future use when these people will not be able for employment.
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HOUSING FACILITIES
The workers have provided with the residential facilities and small
quarters are provided to the workers. These quarters are often visited by the
admin. Manager for the checking of cleanliness and other important matters if
raised by any situation from the workers side.
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KUNJAH TEXTILE MILLS LTD
MIS SECTION
This is the era of information technology and very one wants to get as much
benefits that’s why many companies want to have a strong in information system
.MIS section in Kunjah Textile Mills Ltd is performing well s the requirement of
the time
Technology is the most impotent weapon to compete with changing environment
KTML is using such sort of technology
Computer Technology
KTML is increasing their business value by using computer application in the
work. Their finance and accounts department are totally computerized. But all
other department are also using computer to facilitate their work and its used for
electronic data processing and for
Record keeping
Accounts practices
Export marketing
Pay roll adjusting
Purchase department
Financial summaries
Computer soft ware such as fox pro excel word etc are using carrying of activities
Function and responsibilities
Maintenance of hardware &software configuration.
Problem for data communication and net working
Assist the workers to increase their productivity
Do all the programme required by the workers
So all these responsibility are performed by MIS section
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KUNJAH TEXTILE MILLS LTD
FINANCIAL ANALYSIS
Financial statements are prepared primarily for decision-making. They
play a dominant role in setting the framework of managerial decisions. But the
information provided in the financial statements is not an end in itself as no
meaningful conclusions can be drawn from these statements alone. However, the
information provided in the financial statements is of immense use in making
decisions through analysis and interpretation of financial statements
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KUNJAH TEXTILE MILLS LTD
CURRENT RATIO
Company ratio has improved in fiscal year 2002 and assets are .25 times greater
then current liability so performance is well
.
QUICK RATIO:
This ratio is also termed as “acid test ratio” or Quick ratio. It is the ratio
of liquid assets to current liabilities. The true ‘liquidity’ refers to the ability of a
firm to pay its short-term obligations as and when they become due.
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KUNJAH TEXTILE MILLS LTD
COMMENTS: Inventory turn over of the Company is constant. The stock turn
over of the Company is slow. There is high investment in the stock.
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KUNJAH TEXTILE MILLS LTD
This ratio is similar to Debtor collection period. This ratio gives the
average credit period enjoyed from the creditors.
The average payment period ratio represents the number of days taken by the firm
to pay its creditors. A higher creditors turn over ratio or a lower credit period ratio
signifies that the creditors being paid promptly, thus enhancing the
creditworthiness of the Company.
L O N G T E R M S O LV E N C Y A N A LY S I S
Liquidity Ratios, which indicate the short-term financial position of the
business, have been already explained. Now the long-term solvency ratios are
dealt with. The term solvency refers to the ability of concern to meet its long-term
obligations.
DEBT EQUITY RATIO:
Debt Equity Ration indicates the relationship between the external
equities or outsiders funds and the internal equities or shareholders funds. It is
determined to ascertain soundness of the long-term financial policies of the
company.
DEBT EQUITY RATIO = LONG TERM DEBTS / SHAREHOLDERS
EQUITY
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This ratio shows the %age of total assets financed by the borrowed money.
COMMENTS:
This ratio shows the outsiders financing in the total assets of the company
is more than 50% . The higher this ratio, the more financial leverage a firm has.
This ratio serves a similar purpose to equity ratio.
PROFITIBILTY RATIOES
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KUNJAH TEXTILE MILLS LTD
Profitability ratios allow the analyst to evaluate the firms earning with respect to
the given level of sales. With out profit a firm can not attract the outside capital
Following profitability ratios are calculated to analyze the
profitability of company
1.7% 0 .98 %
SWOT ANALYSIS
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Environment is the most important elements that effects the operation of the
organization that’s why manager are always aware of the environment for instance
they want to know that, what the competitor are doing? How the government can
affect the organization .for the analysis of environment managers are use the
techniques of SWOT analysis that tells about the strength weakness opportunity
and threats created by external and internal environment
STRENGTHS
1-Positive image of the company.
2-Situated in an area where cheap labor is available
3-Imported Machinery.
4-Strong Market Image.
5-High Financial Resources
7-Team of highly competent professional
WEAKNESSES
2- De motivated employees
3- No Promotional Activities
4- not enjoying the Economies of large scale
5- Centralized control
6- Centralized decision making.
7- Obsolete plant and Machinery.
9- High labor cost and power &fuel cost
10- WTO post 2004 regime
OPPORTUNITIES
1- Potential in market
2- untapped market of China.
3- throughout local market in Pakistan.
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THREATS
1- New Entrants
2- Economic Instability
3- Tough Competition
4- Increasing cost of production
5-Growing intense competition
6- Price fluctuations.
7- Political Situation of the country.
8- Day by day changing Govt. policies
9- antidumping duties from the foreign buyers countries.
10-ISO 9000 implications
11-Fluctuating cotton crop in the country.
FINDINGS
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SUGGESTED STRATEGY
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KUNJAH TEXTILE MILLS LTD
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