analysis

REPORT

SUBMITEED TO: -

COLONY TEXTILE MILL

MULTAN SIR RAO AKMAL ALI
GROUP no3

M B A 2 nd NUML

IFRE YAQOOB

IQRA AMJAD

ANUM RAEES
 ACKNOWLEDGEMENT:

I express my whole hearted thanks to Almighty

ALLAH…

I feel utmost pride in acknowledging with sincere

gratitude for the valuable guidance I have received

from my respected teacher Sir. Rao Akmal Ali who

has been a constant source of enthusiastic

encouragement throughout my study. Due to his

guidance I would be able to complete this report. His

advice, criticism and remarks are of most value to

me.

2
 DEDICATED TO

Our Parents and

Our respected Teacher

Sir Rao Akmal Ali

3
CONTENTS:

Company information 5-7

Vision 8

Mission Statement 8

Nature of the company 9

Human Resource Department 10

Composition of company equity 11-12

Debt Structure and the source of external financing 13

Summaries the company financial operations 14-15

Total Asset and Labilités ratios 16

Ratio analysis 17-19

Conclusion 20

Questionnaire 21

Formula Sheet 22

Formulas Used 23-24

Visit details 25

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COMPANY INFORMATION:

Board of directors: Mr.Fareed M.Sheikh

Mr.M.Akram Qureshi

Mr.M.Azam Barki

Mr.Malik Sohail Ahmed

Mr.Bilal Ahmed Khan Niazi

Mr.M Farooq

Mr.Syed Arif Hussain

Company Secretary:

Mr.M Abid

Board Committees:

Audit Committees: Mr.M Akram Qureshi (Chairman)

Mr.Malik Suhail Ahmed (Member)

Mr.Syed Arif Hussain (Member)

Executive Committee:

Mr.Fareed M.Sheikh (Chairman)

Mr.M.Azam Barki (Member)

Mr.Bilal Ahmed Khan (Member)

Ch. Financial Officer:

Mr.Mahboob Ahmed

Head of Internal Audit:

Mr. Najeeb ullah Khan

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 Other Management Committee

Technical Committee:

Mr.Fareed M. Sheikh (Chairman)

Mr.Gulzar Ahmed (Technical Director Unit 2&5)

Mr.Salman Saif (G.M Unit 1)

Mr.M.Amin Shahid (G.M Unit 3)

Mr.Rashid Akhtar Malik (G.M Unit 4)

Mr.M. Tariq Sheikh (G.M Unit 6)

Finance committee:

Mr.Fareed M sheikh (Chairman)

Mr. Mahboob Ahmed (Chief Financial Officer)

Mr.Atta Mohyuddin Khan (Manager Accounts)

Mr.M.Faisal Naseem (Manager Finance)

H.R Committee:

Mr Fareed M.Sheikh (Chairman)

Mr.M Atta Ullah khan Niazi (Director H.R)

Mr.Abdul Hakeem Khan (Manager H.R)

Bankers:

Faisal Bank ltd

Habib Bank ltd

KASB Bank ltd

Meezan Bank ltd

National Bank Of Pakistan

Soneri Bank ltd

Standard Chartered Bank

Silk Bank ltd

The Bank of Punjab

United Bank ltd

Arif Habib Bank ltd

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 Auditors:

Naveed Zafar Hussain Jaffery & co.

Chartered Accountants

Legal Advisors:

Imran Anjum Alvi (Advocate)

Imtiaz Saddique & Associates

Advocates & Solicitors

Corporate and Head office:

M Ismail Aiwan-i-Science Building

Shahrah-i-Jalaluddin-Roomi

(Ferozepur Road) Lahore-54600

Phone: 042-35758970-2

Fax: 042-35763247

Production Facility:

(Unit # 1-7, 186,576 Spindles & 2880 Rotors)

Ismailabad (Multan)

Phone: 061-6539021-3

Fax: 061-6539509

UAN: 111-265-669

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 Vision statement

To be the largest Pakistani yarn supplier, fully equipped to cater

to all needs of ever evolving global markets. To explore and

create growth opportunities to maximize return to all stake

holders.

Mission statement

To take the company to a new height where it is rated as the

best in all spheres of business and everyone concerned feels

proud of being its integral part.

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 Nature of the Organization:

The Colony Textile Mill is related to corporate sector and its core business is to
produce and supply of spun yarn to local and international customers’ with best
quantity standards and efficient services. Their employment and HR polices
developed individuals without race, religion, gender or any discrimination
factor. They provide equal opportunities to all the employees under a team
based working environment.
They believe in community development. They contribute their resources, both
financial and ethical in supporting all the deserving individuals of the society.
Their rash management policies are geared to enhance shareholders worth,
improve credit worthiness and minimize credit risk while diversifying income,
along with suppliers and customer base.
They are as a responsible corporate citizen strongly adheres to the corporate
governance principles and comply with the regulatory obligations enforced by
regulatory agencies foot improving corporate performance. There are
marketing polices are customer focused. They believe in One Window Solution
and customer satisfaction. Their marketing policy is only based on these two
parameters and to achieve this. They ensure best quality and efficient
response to the customers.

Main Departments:
The departments which are efficiently used in the colony textile mill are as
follows:
 Human resource department
 Marketing department
 Finance department
 Accounts department
 Admin department
 Production department

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 Human Resource Department
Alongside the development of its physical facilities, CTML is deeply conscious of the pivotal role
that human resources play in the success of an organization. As a matter of fact, human resource
development has been identified as an area of key importance. While strengthening the ranks of its
work force with quality professionals at various levels of management, the company also undertakes
several initiatives for improving productivity and efficiency at all levels of services. Through
computer training, various courses, sponsorships of staff for studies at professional institutions and
seminars, the company is providing its employees on going opportunities for continuous self-
improvement and learning.

Recruitment:-
Their recruitment process is to collect CVs firstly than chose specific number of CVs. Next step is to
conduct preliminary interview of the applicants than written test. After this there is background
investigation of the applicants.

Selection:-
Their selection criteria are different according to different job specifications.

Training:-
There are special training programs those are indoor and outdoor both. Those training enhance the
skills n knowledge of the employees.

Compensation:-
They are fully compensating their employees and give them rewards in different shapes. They provide
services of accommodation and 1400 houses are adjacent to the mill.

There is also education facility for the children of employees. The school building is also in the
boundary of the mill. There are also medical services working for the betterment of the employees so
that they can give maximum productivity.

Career management:-
In the colony textile mills there are high growth opportunities for the employees. The CTML gives
importance to their employees as much as they are focusing on customers. Because they know that if
employees are satisfied they give their maximum output. The promotion of employees is based on
their performance.

10
Composition of company equity

11
12
Debt Structure and the source of
external financing

13
 Summaries the company financial
operations

COLONY MILLSLTD.
Balance Sheet
TOTAL ASSETS
Current assets
Cash & Bank Balance
Short TermInvestment
Trade Debts
Other Receivable
Stores & Spares
Tax Refunds due fromGovernment
Stock in Trade
Raw Material
Working in progress
Finish Goods
Assets held for disposal 14

Real etate property held for tradin

NON CURRENT LIABILITIES
Loan from related parities
Liabilities against asset
Long term financing
other

COLONY M ILLS LTD.

STOCK HOLDER EQUITY
Income Statement
sales
Issued Capital
CostCapital
of Goods sold
Reserve
unappreciated
Gross profit profit
Distributin costs
Surplus
admin on Fix Asset 15
Total assets and liabilities

CurrentAssets
1%
Cash & Bank Balance
0%
11% 11%
2% 6% 8% Short Term Investment

Trade Debts
18%
Other Receivable
37%
Stores& Spares
3%
3%

CurrentLiabilities
0%
1%
Creditor
8%
27%
Bills Payable
31%
0% Advance payments
2%
29% Other
2%

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 Ratio analysis

Colony MillsLimited
Profitability Ratios
Gp Margin
C olony Mills
Operating Limited
profit margin
Liquidity
Np margin Ratios
Colony MillsLimited
Current
ROCE ratio
Activity ratio
Quick ratioasset turover
Operating
Receivable turnover (times)
Asset turnover
Receivable days
Colony Mills Lim(days)
ited
Inventory turnover (times)
Solvency ratios
C olony Mills
Inventory Lim
days ited
(days)
Total debt to equity
Investor
Operating ratios
cycle (days)
Interest coverage
Basic EPSturnover (times)
Payable
Mrket
Payable Price
daysper share
(days)
Price/Earning Ratio 17
 Profitabilityratios
16.00%
14.00%
12.00%
10.00%
8.00% Gp Margin
6.00% Operatingprofit margin
gn
taP
e
rc

4.00%
Np margin
2.00%
0.00%
2008 2007 2006

Years

LiquidityRatios
1.40
1.20
1.00
0.80
im

0.60 Current ratio

e
sT

0.40 Quick ratio

0.20
0.00
2008 2007 2006

Years

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 ActivityRatios
Receivableturnover
300 .00 (times)
250 .00 Receivabledays(days)
200 .00
150 .00 Inventoryturnover
im

(times)
e D
a
y
s

100 .00
/t

Inventorydays (days)
50.00
0.00 Operatingcycle(days)
2008 2007 2006

Years Payableturnover (times)

SolvencyRatios
3.50
3.00
2.50
2.00
im
eT

Total debt toequity

s

1.50
1.00 Interestcoverage
0.50
-
2008 2007 2006

Years

Investor'sRatios
18.00
16.00
14.00
12.00
10.00 Basic EPS
8.00
im
e R
s
/t

6.00 MrketPriceper share

4.00 Price/EarningRatio
2.00
-
2008 2007 2006

Years

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CONCLUSION

From the above analysis it is conclude that the company’s gross profit
margin in 2007 is 12.76% and in 2008 it is 14.16%. It’s clearly shows that
there is increasing trend in company profits. As well as the profit increase
the new investment is also increases that’s why the net profit margin is
almost same or decreasing. Their payables also decrease from previous
year. The overall view is the colony textile mill is going on profit
satisfying its shareholders. Its solvency ratio is on decreasing from 2007.

QUESTIONNAIRE
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I shall be thankful if you provide me a brief introduction of the company.

The Colony Group is one of Pakistan's oldest and the most revered business groups. The Group has grown phenomenally
and has become a leading player in all the sectors in which it operates. Colony Mills Limited is a Colony Group’s
company. The Company is principally engaged in the manufacturing of yarn.

What is the strategic goal of the company?

To excel in delivering highest standards quality yarn to customers in the local and international markets as per their
customized needs. And to provide quality yarn to customers and expand sales through good governance, explore new
markets, quality control by developing a team for sustainable and equitable growth with a concept of”one window
solution”

What is the importance of manufacturing sector in Pakistan?

Manufacturing Industry sector has a good impact economy of Pakistan. This is most growing industry of Pakistan. This
sector contributes a major portion to our export and also the total Gross Domestic Product (GDP). This sector gives great
employment to our population.

What are the future ventures of the company?

A state-of-the-art Open-End Spinning production facility is under construction. It will be the first of its kind facility in the
country, with 2,880 rotors capable of producing 15,000 Metric Tons of yarn annually, including slub yarns.

What has been the profitability of the company in comparison to its competitor?

By taking a glance of the profitability of one of the competitor it can be seen that the profitability of Colony Mills is much
better than its competitor. The gross profits of the Colony are high due to effective utilization of plant and labor force by
the management of the company.

What has been the liquidity position of the company in comparison to its competitor?

Colony Textile mills ltd’s current ratio is decreasing from 2005 to 2008. It shows that co has poor short term debt paying
ability. From the analysis of the liquidity position of the competitor of the Colony Mills it can be seen that the liquidity
position of the Company is much stronger than its competitor.

What has been the long term solvency position of the company in comparison to its competitor?

The lower the debt equity ratio that is preferable. This ratio decreases from year 2005 to 2007 but it improves/increases in
2008. By taking a glance of the solvency position of the competitor of Colony mills it can be seen that Colony mills is
more levered than its competitor which increases the risks of company but the return of Colony is also higher than its
competitor.

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FORMULA SHEET:

Colony M ills Lim ited

P ro fitab ility Ratio s
G p M argin
O p eratin g p ro fit m argin
N p m argin
RO CE
O p eratin g asset tu ro ver
A sset tu rn o ver

Colony M ills Lim ited

Liq u id ity Ratio s 22

Cu rren t ratio
F ORMULAS USED:

1. Growth Trend

2. Gross Profit Margin

3. Return on Capital Employed

4. Net Profit

5. Return on Equity

6. Receivable Turnover Period

7. Inventory Turnover Period

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8. Asset Turnover

9. Current Ratio

10. Quick Ratio

11. Interest Cover

12. Earnings Per Share

13. Price to Earnings Ratio

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VISIT DETAILS

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