Internship Reports: R.M Fabrics Internship Report

ACKNOWLEDGEMENT

Up and above anything else, all praise to Almighty Allah alone, the Omnipresent and the most Merciful and compassionate. The words are bound, knowledge is limited and time is short to express His dignity. It is one of infinite blessings of Allah that he bestowed me with the potential and ability to contribution towards the deep oceans of knowledge already existing.

I pay hum-age to greatest personality of the universe; HOLY PROPHET HAZARAT MUHAMMAD (PBUH) who is forever source and spring of guidance in every sphere of life.

At the very outset, I would like to express my hearties and sincerest sense of gratitude to all my worthy teachers of CIIT Lahore for their inspiring guidance and constructive criticism.

I am highly thankful for the cooperation of Mr. Bilal Niazi, Mr. Wasim Omer, Mr. Rizwan Malik, Mr. Tahir Mehmood, Mr. Nouman Chatha and Mr. Kashif Niazi of R.M Fabrics Industries (Pvt.) Ltd. I might not be able to complete my internship without their cooperation and kind behavior. I am also gratified to all my sincere fellows who I had ever remembered for their continued encouragement moral support and invaluable succor as well as substantial cooperation during my critical moments.

Executive Summary 5

Textile Industry in Pakistan 6

Introduction & History 8

Vision Statement 10

Mission Statement 10

Group Management Profile 10

Production Accounting & Management System 12

Inspection System 13

Organizational Structure 15

SWOT Analysis 18

Detail of SWOT Analysis 20

PEST Analysis 25

Marketing Strategy 26

Competitive Strategy 30

Purchase Accounting System 31

Process of Yarn Production 34

Work done during Internship 36

Learning as an Internee 41

Recommendations 43

Annexure 44

Glossary 50

Bibliography 52

Executive Summary

This report is based on the activities performed during the internship at R.M Fabrics Mills. Internship duration was 6 weeks and it provided practical knowledge of working in professional environment. This learning experience is described in detail n the various sections of this report.

In the first section, there is some detail about the company. The history and present status of the company is explained. The organization structure and the details of its management along with its location are also discussed. I have also discussed the yarn manufacturing procedure and the important departments of the company. I have discussed some business operations and some strategies as well.

The second section provides information about the activities that I performed during the internship. I worked as an internee mainly in Accounts and Managemet department. However, I also spent some time in Purchase Department to gather some information about their working.

The third and last section includes the recommendations.

Textile Industry in Pakistan　

The subcontinent is the inheritor of one of the richest and oldest textile traditions in the world. Excavations at Mohenjo Daro and Harappa 2500-1500 BC revealed that the inhabitants of the Indus Valley cultivated cotton. Sir John Marshall, the archaeologist has stated that a few minute scraps of cotton were found adhering to the side of a silver vase. Clay and faience spindles whorls indicate that cotton and woolen fibers were spun. A well-equipped dyers’ workshop was excavated at Mohenjo Daro and the fragment of cloth indicates that woven cotton cloth was dyed with madder root.

Independence from the and the division of the Indian subcontinent into Pakistan and India started a new era for textiles production. Pakistan consisted of two entities, east and West Pakistan. The West was the cotton producing area and the East was responsible for jute production. At the time of partition, Pakistan had no industrial base and inherited only one textile mill, the Lyallpur Cotton Mill in Lyallpur [now called Faisalabad]. This mill produced yarn and gray cloth and no printed fabrics.

Within a decade the new country of Pakistan was self-sufficient in cotton and began exporting gray cloth and later cotton yarn. Pakistan started exporting printed fabrics in the late 1970’s to Africa and by mid 80’s was sending printed material to Europe. Pakistan’s location was ideal, as it lay halfway between the western world and the Far East. Pakistan has a 28 percent share in world export of cotton yarn and a 6 percent share in world export of cotton cloth.

It was in the 60s that the power loom took over and by the 70s gray cloth was being exported at throwaway prices. There are about 200,000 power looms operating in Pakistan some of which are backyard operations. Handloom, which formed the backbone of textile goods in the last century, is now almost non-existent, its sales confined to a fast diminishing rural market and a very small niche market.

Although Pakistan is the world’s fourth largest cotton growing nation in the world, after the United States, China, and India, its total turnover for export is only $ 5 billion. Textile goods form 60 % of the total exports of the country. The commodities exported are yarn, cloth, tents, and canvas, bags, towels, bed linen, garments, synthetic textiles and other made ups.

With a large and expanding textile industry, textile education and training became imperative. The Textile University of Pakistan was established in Karachi to train technical and management professionals. The Textile University awards degrees in Textile Sciences and Textile Management. The National College of Arts in Lahore and the Indus Valley School of Art and Architecture in Karachi are the only two institutions in Pakistan, which award a degree in the discipline of Textile Design. Designers are being absorbed into the industry, bringing about change and vibrancy, with innovations in Print design and weaving.

Today there are 450 Spinning mills and 35 composite textile mills. Textile goods form 60 % of the total exports of Pakistan.

Introduction & History

　M/s R.M Fabrics was formed on the year 2003 as a Sole Proprietorship. to conduct business of manufacturing of textile fabric and weaving. Since then it is making a continued growth. Organization has ever increasing list of well known customers to deal with, in its profile. M/s R.M Fabrics, is one of the leading textile unit in

Pakistan

. Over the season, the company has proved that laborious efforts and effective business approach are the roads to the success. A steady growth with a solid commitment to services and quality has earned the company a family of satisfied customers in the local and the international market as well. We are determined to create on enterprising character and are engaged in keeping our products at the highest competitive level by means of the latest technology and the exclusive strategies.

The R.M Fabrics is equipped with the world’s renowned brands of machinery capable for every sort of textile weaving. This machinery is state of art to process excellent quality of Grey Fabric with a huge demand in local as well as international market. We earned client loyalty nationally and internationally with our quality work.

Our quality control laboratory is the best equipped with the latest machines or testing. A highly qualified team of enthusiastic professionals is making its endeavor to make the company unprecedented in the years to come. We are a proud privately held company believing in good value of commodities and services. We respect where we have been, enjoying where we are and know where we want to go in the future. R.M Fabrics is associated with manufacturing of Textile Fabric since 2003, usual methods adopted for manufacturing of textile fabric are simply given under:

§ Sizing

§ Weaving

Vision Statement

· Attain highest standards of quality in its all business activities.

· Sustained growth in real terms.

· Have professionally trained high quality motivated workforce, working as a team in all environments.

· Attain past glorious position and be recognized locally as well as internationally as a dynamic, quality conscious and progressive company and industry leader.

Mission Statement

To manufacture quality products for customer satisfaction through
Honoring the commitment.
Continuous endeavor for improvement through adoption of most modern technology in production.
Strict adherence to quality control.
Developing a sense of high reliability through fair dealing.
Becoming a part of country’s development and economic prosperity.

Group Management Profile

A brief profile of the main directors of the company which hold majority of the shareholding is given below:

. Chief Executive:

Mrs. Ghazala Sohail

Name of Executive:

Mr. Mian Sohail Ahmed

Mr. Haji Muhammad Akram

MR. Razzaq is the Account Manager of R.M Fabrics Textile Mill.

MR. NAVEED M. SHEIKH

Mr. Naveed M. Sheikh is Tax and director of R.M Fabrics Textile Mills (Pvt.) Limited.

Production Accounting & Management System

R.M FABRICS production accounting and management system not only ensures consistency in the operations but also helps to manage orders on a micro level. In-house developed software provides great tools to R.M FABRICS production team for monitoring production processes, production planning, and conducting periodic audits to reduce possible delays and coordination snags along with achieving a greater degree of reliable inter-departmental information exchange.

Production Capacity & Capability

With the installed capacity of 120 looms, the plant can produce more than 1,500,000 Linear Meters per month, with a wide variety of fabrics; from percales to satins, from twills to drills, from rip stops to high thread count fabrics, stretch fabric and much more.

All looms have a high speed connectivity R.M Fabrics it through Local Area Network along with being Web-enabled. R.M FABRICS customers will be able to monitor looms allocated to their contracts, and also view what articles are being run on what looms and at what efficiency, whereby correlating the delivery snags, if any, on one hand and quality related issues on the other. For this organization customer confidence is the key to success, and providing this transparency to their customers can R.M Fabrics itate the business on the commercial side as well as providing R.M FABRICS production team to strive for either improving their performance or marinating the quality which is for the satisfaction of the clients.

Inspection System

R.M Fabrics Industries (Pvt.) Limited is the pioneer in the entire Indo-Pak region in deploying the Uster FabriScan in its R.M Fabrics ity. The FabriScan replaces the traditional manual inspection by a far more consistent and objective data collection. This system is capable of inspecting Fabric production of a 198 looms R.M Fabrics ity. Deploying this machine in this R.M Fabrics it was a well thought-out decision as this system is not subject to fatigue, downtimes, or outside influences. It provides consistent checking the entire quantity of fabric fed through it. There is no negligence factor, no favors to be made, no rules to be compromised besides providing a big pool of information that is humanly not possible. All faults are “UV” tagged so that mending operation can be performed (if necessary) at the exact location of the fault.

The machine can be programmed to inspect as per the requirements of the customer and those criterion saved for future reference and use. The inspection reports can be made available to client on the web so that pre-screening of their consignment can be done timely, effectively and in-synchronization with their production plan. In order to cater for our direct Dye-House customers, we have the “CUT OPTIMIZATION” option available. As soon as the inspection is complete, the system performs the optimization process and suggests the best possible way to cut the fabric to get the highest number of pieces of the Optimal Quality.

Power Generation & Heat Recovery System

R.M Fabrics Weaving Mills is fully-contained and self-sufficient R.M Fabrics it with its in-house continuous and reliable power generation R.M Fabrics ity with 100% backup power arrangement. The Power Generation department with its Heat Recover System is designed to generate enough hot water to fire the chilling system for the entire R.M Fabrics ity, along with producing more than 50% of the steam required for the sizing operation.

Memberships

APTMA (All PAKISTAN TEXTILE MILLS ASSOCIATION).

Products

Yarn

The company is producing 100% cotton yarn, 100% Polyester yarn, 100% Viscose yarn and mixed yarn of various counts ranging from coarser Number English 20 count to finer Number English 80 count.

Fabric

R.M FABRICS is producing Grey Fabric with following fiber types, for abbreviation’s detail see Glossary:

Organizational Structure

The concept of an organization chart shows what positions exist, how they are grouped and who reports to whom.

The organizational structure should be designed to provide both vertical and horizontal information flow as necessary to accomplish the organizational overall goals. If the structure doesn’t fit the information requirements of the organization, people will have either too little information or will spent time on processing information that is not vital to their tasks, thus reducing effectiveness.

R.M Fabrics Group’s structure is a hybrid of divisional and functional structures; divisions are based on two products Yarn (Spinning R.M Fabrics it) and Grey Fabric (Weaving R.M Fabric it).

　Group Profile

§ Name of Business: R.M Fabrics

§ Principal Place of Business: 18-KM, Khanewal Road, Multan.

§ Telephone : +92 41 2624364

§ Fax: +92 41 2649710

§ E-mail: rsassociates1@live.com

§ Contact Person: Mr. Haji Muhammad Akram

§ N.T.N: 0105349-3

§ G.S.T: 04-07-5208-726-82

Nature of Business: Manufacturing of textile fabric

R.M Fabrics Industries (Pvt.) Limited

R.M FABRICS consists of two divisions Weaving & Spinning; following is the top positions in R.M FABRICS .

See Annexure 1.2

Accounts Department

Accounts Department keeps track of all transactions. Each and every sales confirmation note and purchase confirmation notes come to Accounts Department for making timely payments and recovery of money from buyers.

Internal auditing is also another responsibility of Accounts Department for smooth and clear handling of operations.

PEST Analysis

Political Instability

The political situation of Pakistan is not satisfactory. Due to the rapid change in the Government every government sets its own new trade policies.

Govt. should apply sustainable policies for the beneficial of the exporters as well as the investors.

Economic situation:

The economic condition of Pakistan can also affect the foreign investors increasing inflation rate make the cost of production high and thus reduce the profit margin of the investor.

Social situation:

The change in the lifestyle of the people affects the growing demand of the R.M Fabrics products. The change in the lifestyle and needs in different demographics also affect the demand of the customers.

Technological factor:

Technological advancement in all the sectors of the country has changed the entire socio-economic environment. Especially in the textile sector there is a lot of technological development.

R.M Fabricss excellent computerized machines and devices have made extension in its present setup of well advanced technology imported from Japan, Germany and France.

MARKETING STRATEGY

R.M FAbricsis a group starting from 1950’s which means that it is an old and pioneers of Textile industry in Pakistan. On its purchase side as I have worked for a whole week in Yarn Procurement department of the Group, which is a small branch of Marketing department. I found their business to be such a vast that they ordered their raw material on telephones, they made contracts with the new companies and those companies having already contracts had no need to made. The main which were daily paid were mainly to the ICI for polyester and then to companies like Nishat, Sitara Textiles and many more companies and groups like that. Their fiber is very famous not only nationally but internationally as well.

Secondly on Europe sector this group is very well known as they purchase machinery from them and then they supply Methane to them, which is used in mixing with petrol. Though it is a by-product of sugar sector yet it is branch of the same company. This is helpful for the Textile division too.

The past year has been tough for the textile industry as competition is increasing steadily and margin of profit is becoming smaller day-by-day. Our competitors from Asia have come up in a big way with lower prices resulting from lower overhead, cheaper and better raw materials and machinery.

Countries like China, Indonesia, India and Bangladesh played an active role in the fabric market. Improvement in quality and production capability was the main area of concentration.

Market for Yarns and Grey fabrics was diversified to increase the customer base and reduce dependency on the Far East. In this effort business with Malaysia, Korea, Taiwan, UK and South America was initiated in case of Yarns.

In case of Grey Fabric market business was initiated in South Africa, North America, Japan, Italy, France, and Sri Lanka etc. Product range was also increased to cater to the differing needs of the buyers. Fancy and special items like Dobby Designs, Bedford Cords, and Caviar Twills and stretch fabrics were developed which are being sold at premium prices.

R.M FAbrics has constantly updated our machinery, replacing old machines with new ones upgrading the existing set-up, leading to better efficiencies and quality products.

Leaving behind the traditional way of doing business and in our journey towards excellent it has consistently expanded its buyer base and explored the different markets around the world.

Keeping in view demand of the World market, R.M Fabrics pursued its strategy of value addition and reducing the dependency on Grey Fabrics and Grey Yarn.

Having the foresight to assess that in coming year’s value addition will be the thing of the future, R.M Fabrics worked towards the achievement of its goal of future increasing its capability in value addition.

The export of processed fabric and made-Ups has shown market improvement as compared to last year.

It has placed us successfully in the middle to upper end of the market. Our strength in Europe is the curtain division.

This included yarn dyed dobbies, engineered confections, different finishes and embellished products. The plan is to continue with this winning strategy and at the same time we are trying to find new clients in the high end.

We are also exploring business opportunities in countries like Spain and France where R.M Fabrics has very little business at the moment.

North America is the star market for R.M Fabrics; it’s a new market for it after breaking up the exclusive arrangement with our previous sale set-up. The quota is coming down in 2005 and we have started to prepare for it internally as well as for the external environment. Bedding is the bulk of the home textile business.

R.M Fabrics is in the process of updating its machinery to cater the needs of the wider width fabric requirement for USA bedding business. is also taking p the social accountability issues very seriously, which are so dear to the American consumers. A lot of big brand US companies have visited us and are discussing the possibilities of a joint venture. R.M Fabrics

The opportunities are limitless, we have to review and analyze them very thoroughly to associate with the right people in the long run. In shorter term we are building a small amount of quota, which will give us recognition as a bedding supplier.

R.M Fabrics is very strong in non-quota categories like curtain and table linen. These categories are best served with new product development (NPD). R.M Fabrics will coordinate the effort for NPD by all markets to optimize results. R.M Fabrics has achieved the highest sales in 1999-2002 for North America market.

On top R.M Fabrics has developed more direct and closer relationship with its end customers. Oceanic has been our most lucrative and mature marker. In business terms it is our “cash cow” market.

Primarily due to being a non-quota market it had no real limitations in this market. Despite economic problems in that region, it has maintained our sales figures in the year under review. This market is a good design source for other markets, which is helping us to maintain our print volumes.

Middle East market is composed of South Africa and the new emerging markets like the UAE, Egypt, Saudi Arabia, and Jordan etc. R.M Fabrics has dedicated new staff with fresh energy for the emerging market.

They have successfully broken the ground and we have very strong faith that these markets will give us good volumes in the near future. We are also targeting printed apparel business for the first time. The latest addition is the most ambitious Apparel Dyeing plant setup in Raiwind Mill, which has started its production.

The effectiveness and productivity of this plant will be further enhanced, as R.M Fabrics moves towards becoming a more vertically integrated organization.

R.M Fabrics has increasing its profitability by working efficiently, procuring better raw material and most importantly kept a very close association with its customers.

It visits its business partners frequently and provides them with the best service possible. All of the above mentioned points led to strengthened relationship with its business partners making it very difficult for its competition to penetrate into its market share.

R.M Fabrics has provided its staff with better working environment and R.M Fabrics ities, which enhances its efficiency and output.

At R.M Fabrics, it is prospering due to its professional commitment towards excellence and giving the best results at all times and against all odds. Its marketing and production team co-ordinates all the time and its focus remains on maintaining its position as the market leader in the textile sector of Pakistan.

Competitive Strategy

As for as R.M Fabrics Group is concerned its own name is its competitive advantage. Being an old group it has its own name in the field of Textile as well as sugar. As I have told in the above segment that it has business of Methane gas in Europe it is its competitive advantage. As dealing in one different side gives you edge over competitors in other field.

Furthermore, its financial assets are also an edge for the group. As being late in paying any party makes future problems which result in delivery of any product to be late and resulting in bad image of the company.

R.M Fabrics group buys raw material from all the groups like Nishat, Sitara Textiles, Kohinoor Textiles and many more companies like that I cannot name all of them as it is a huge number. Which automatically makes links better and which tells its mostly products are exported. And for sure they are of finest quality.

It’s one competitor is the Rupali group.

PURCHASE ACCOUNTING SYSTEM

Purchase Procedure for Mill

When a Floor Shop in-charge (Foreman on the maintenance and Head Jobber on the Production side) needs to purchase one or more items to faR.M Fabrics itate his sphere of work, he will fill out a PDN. A copy of PDN used in our company appears in Appendix 999. The PDN has three leafs. First copy is for the Purchase Department, second for the Store at Mill, and third for the Department originating the demand. A good quality Carbon Paper should be used so that even the last copy is legible.

At the initial stage there are six columns that are filled by the authorized staff of the concerned Department/Section. Those six columns being Department, Sr. #, Item Code, Description, UOM, and Quantity Demanded.

The company is divided in to five Consumption Departments. This division is done in order to simplify identification of consumption patterns, allocation and analysis of wages & salaries, and convenience in Budgeting. The Departments namely are:

Sr. # Departments Code

1) Head Office 01-00

2) Administration 02-00

3) Spinning 03-00

4) Services 04-00

5) Residential R.M Fabrics 05-00

The Department/Section code format adopted by our company is 99-99.

99-99

Department Section

Main Departments always have “00” in place of section designator. For example, 02-02 signifies that the Department is Administration and the Section is Time Office. However, when we want to refer to the Administration Department the code used will be “02-00”, meaning that the code relates to a Main Department.

A Store Item Code List (SICL) sorted on Item Code as well as Description also containing the Unit of Measure (UOM) of each item in front of the Description is supplied to the Store In-charge, Manager (P&A), Electric Engineer, Mills Manager at the Mill, and Purchase Officer at the HOL. New Items added to Store Inventory (SI) from time to time will be added manually to the list by those who have been issued the SICL. At the beginning of every Quarter a new SICL be issued to all concerned.

PDN No.: This is a sequentially controlled five digit distinct number allocated to each PDN document.

Starting with 00001 to the first PDN of the financial year up to 99999 during that financial year.PDN numbers is controlled by the Store In charge in the PDN Number Control Register. If HOL issues a PDN, the Purchase Officer will ask the Store In charge to allocate his demand a PDN Number. Next number in sequence will be allocated which will be written on the PDN by the Purchase Officer. The Store In charge will make a note of this that the PDN was made by the HOL staff.

Department: The Section that makes the PDN fills-in its complete code. If Ring Maintenance is filling the form, it will enter the code 03-10 signifying that Sub-Section “Ring Maintenance” of Spinning Department is demanding what is endorsed in the PDN. The Sub-Section’s description will be written in front of the blank space provided for description. The Main Department’s name will not be mentioned in this space.

Sr. No.: The first column to be filled in a PDN will be Serial Number that appears in an abbreviated form (Sr. No.). Under this head, a whole-number in a sequential order will be filled-in for keeping a count of item demanded in a particular PDN. It will always start from 1 and go up to a maximum of 9, as there is a provision of only 9 rows in a PDN for entry of items.

Item Code: For various reasons including statistical analysis and MIS the Item Code has been broken into three numeric parts, each part separated by a dash “-”.

The Item Code adopted in our organization is in the format 99-99-999. Store Code combines with the Item Code to form the ITEM CODE.

99-99-999

Store Section Item Number

Store Sub-Section

PROCESS OF YARN PRODUCTON

Production manager services the daily production schedules and try to work according to the demand to schedule. There are many steps involved in production of the yarn.

BLOW ROOM

The first step is that the raw cotton is sent to Blow room for the quality of the cotton. Then it is sent to the Lab for quality check. Here basic quality and other contents are checked in proper form. If one kg cotton is put into this room only 600 grams cotton goes into further production process and rest goes in wastes. Here following are wastes excluded,

B/R Gutter

Dropping

CARDING

In this step the cotton is carded. The production manager checks the cotton and it comes in the drums type containers. These drums rotate and cotton comes out in specific form called as “pones”. Here about 5% cotton goes in the shape of waste. Waste extracts from this process are called by;

Card fly

COMBING

In this step the cotton goes for combing. Combing is a process to comb and wax the cotton for softness purpose. Following wastes are excluded from cotton in this process;

Short Fiber

Comber Noel

SIMPLEX

After the attaining of Cotton from Card and Comb processes, which is also weak this is further passed back to blow room process called Roving and then cotton is sent to Ring process.

RING

In this step small pones are developed for further process and wastes are made out named;

Phnemaphil

AUTOCONING

In this step the manager in specific intervals checks the quality of carded pones from which yarn is produced in shape of cones by passing through machines for this purpose. Here also some wastes are extract called;

Oily hard waste

Hard waste

PACKING

Cones manufactured in proceeding step are now kept in moisturize room for absorbing required moisture. Cones are packed into bags or cartoon according to customer requirements.

PURCHASE DEPARTMENT

The purchase department makes all purchases. Every demand from different departments for different items is forwarded to store and from here it is forwarded to purchase department if needed to purchase. It has a main store in factory.

WORK DONE DURING INTERNSHIP

During my internship, I worked in the following departments.

•Accounts

•Marketing

Account department

In account department, I managed to understand the flow of transaction, preparation of vouchers and ledger posting.

Preparation of vouchers

In account department under the supervision of concerned officers, I came to know different type of vouchers being prepared and their process of preparation. Vouchers are written evidence of any business transaction. The different type of vouchers being prepared by the account department of R.M Fabrics is as under,

•Cash payment vouchers

•Cash receipts vouchers

•Journal voucher or adjustment vouchers

Now I will discuss these vouchers one by one:

Cash Payment Vouchers

Being a public limited company cash payment vouchers are used for recording the expense of less than five thousand. These types of vouchers are prepared when cash payments are made against small expenses i.e. repair, entertainment etc. in order to record the expenses following entry is passed:

Account code name of expense (debit) Amount

Cash account (credit) Amount

Evidence of expense is attached with the cash payment vouchers.

Cash Receipt Vouchers

These types of vouchers are prepared when the cashier on behalf of the R.M FABRICS is receiving cash. However, these types of vouchers are small in quantity because majority of transactions are done by bank. On receipt of cash, cashier prepared the cash received slip. Account officer prepares voucher on the basis of cash receipt prepared by the cashier. In order to book the transaction the following entry is passed in the books.

Account code cash account (debit) Amount

Income A/C or receivable A/C (credit) Amount

Account code Bank A/C (debit) Amount

Cheques clearing A/C (credit) Amount

ADJUSTMENT VOUCHER OR JOURNAL VOUCHERS

These types of vouchers are generally prepared in the following circumstances;
Purchase on credit
Writing off assets i.e. depreciation store consumption etc.
Rectification of mistakes or omissions
Now I discuss them one by one
Purchase on credit
Generally raw material, stores and spares are purchased on credit. In order to account them for the journal voucher are prepared by the concerned account officer
Account code Purchase A/C (debit) Amount
Account payable A/C (credit) Amount
Copy of the invoices is attached with vouchers;

　Writing off Assets

These journal vouchers are prepared in order to change the assets to expense for the preparation of monthly accounts.
To account for depreciation of fixed assets:
Account code Depreciation A/C (debit) Amount
Accumulated depreciation A/C (credit) Amount
To account for the raw material consumption:
Account code raw material concerned A/C (debit) amount
Raw material store A/C (credit) amount
To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (credit) amount
To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (cedit) amount
To account for accrued expenses:
Account code expense A/C (debit) amount
Account payable A/C (credit) amount
In additional to above referred kinds journal voucher is also passed to rectify the mistakes made in voucher preparation or posting.

Marketing department

The main purpose of this department is to locate buyers through agents. So marketing starts from locating the buyers, making contract, opening of LC, shipment and in last payment is received.

Duties

As I have told above that I had prepared vouchers of different types. Then I used to take vouchers of Mr. Tahir, Miss Shazia and Mr. Ramzan to audit and brought back audited vouchers from the Audit. Copied cheques whose payments were to be made on that day. Then I brought a few times Invoices for sales tax from marketing department. Maintained record of filing with Mr. Farooqui. Then in Yarn Procurement I made worksheets for the parties who do not have tax exemption certificate and their tax has to be deducted. Next in purchase department, I had only worked for filing their GRN’s and maintaining them in a serial manner. I have attended calls for a person not seat or else.

Accomplishments

As an Internee I have done all the works diligently which I have mentioned above. Instead I had done other works as well which a person on the job never performs, like someone asks me to take vouchers from Audit like I am his/her Assistant I had done that and never said no. As I have seen those employees which went to Audit and the other asked to bring my vouchers as well and the person says no I have my own work you should better go yourself. That is the thing which I wanted to share in this regard.

New Knowledge Acquired

One thing regarding new knowledge is what I have shared in Accomplishments. Next one important thing regarding knowledge acquired is that what you are studying is not related to the job duties you are doing are in future you have to do honestly. You have to understand that work from start, in case of an employee leaving a company and joining other he also will have to understand the work in new company. I have got a lot of sense regarding working in an organization where everyone is working out for cutting your roots. How to work in a conservative environment! How to behave in any situation! How to negotiate with any person on job!

Problems Encountered

Well I don’t have to face as many problems as I will have to face when I will go on job. First few days were hard but I cannot say there was any problem. Employees there were very cooperative and they asked me to ask as many times about a thing till you are not cleared about that. They guided me on every issue and asked me as/like a big brother to learn as much as you can. I am really thankful to all of them.

Impact of Experience on my Career

This experience definitely effects my career positively. As I would not have been come to know about the atmosphere of any organization, this experience has told me a lot about environment of organization and behavior of different type of people. All of this edge goes to my Institute’s good understanding about students future.

Chapter 2

Management Hierarchy in R.M FABRICS

Departmental Hierarchy in R.M Fabrics apparel division

R.M Fabrics is consisting of the following departments:-

· Merchandising

· Production Planning & Control (PPC)

· Industrial engineering

· production

· Cutting

· Stitching

· Finishing

· Clipping

· Packing

· Shipment

· Quality assurance

· Quality control

· Human Resource

· Information Technology

· Procurement

· Finance

· Forwarding

· Stores

· Marketing

· Transportation

· Compliance

· Washing

CHAPTER NO3:

PRODUCT’S OFFERED BY R.M FABRICS

3.1:Yarn

R.M Fabrics Spinning is capable of producing more than 35,000 lbs of Combed & Carded ring spun yarn from 6/s to 40/s count. Spinning is equipped with state of the art machines from Japan, UK and Switzerland.
R.M Fabrics yarn is famous for its consistent quality because of stringent QC system and most modern lab equipments.

3.2:Fabric

One of the largest Fabric facility in Pakistan having the capability to produce all kinds of knitted fabrics in 100% cotton & blends.

¨ Single knit

· Single Jersey

· Pique

· Fleece

¨ Flat knit

· Collar & Cuffs

· Flat Knit Panels

¨ Strippers

· Feed Striper

· Auto Striper

· Engineered Striper

¨ Double knit

· 1x1 Rib

· Variegated Rib

· Interlock

¨ Textures

· Herring Bones

· Pique Jersey

· Waffle

· Mini Jacquard

· Thermals

3.3: Garments.

R.M Fabrics is a leading apparel company in Pakistan having expertise & machinery capable of transforming customer ideas into superior quality garments, which are taken as the most famous brands in the world.

· Loungewear

· Active wear

· Sleepwear

· Sportswear

· Underwear

· Athlete

Chapter No.4

My Job duties and my Own work

First Week I go to directly in finance department. In the first week in this department I learn about the different document related to payment through voucher likely, entertainment, freight, cargo service bill, etc and learn about making voucher of amount less then10,000 , all these payments are made through cash payment vouchers this voucher includes different heads which are given below:-

Name of the employee

Date

Voucher no

Code of the employee

Department

Designation

Amount of Payment in words and figures

This voucher is being signed by the Assistant Manager, DM, Senior Manager after the verification of voucher.

Second week In second week I site under the instructions of Muhammad Hammad (Assistant accountant) of finance department he deals all types of salary and wages payments his responsibilities are verify the salary, wages, semi contractual payments, incentive payments, overtime payments, commission payments, compliance audit, maintaining FOH details, Record keeping.

The first head which I learn about it is salary first of all it includes normal salary then salary arrears vouchers these vouchers are maintain when the salary of a person in arrears. After it missing salary vouchers it maintain due to payment of the salary of that person who was not get permanent code and he is in the trial period and holds temprary code. After missing salary vouchers another voucher is missing attendance voucher these payments due to the missing attendance of a person then the payment of these missing atandance through the missing attendance voucher. Salary comparison is next part it include the comparison of basic salary of previous month and current month.

The second head is wages there are two types of the wages 1^st is piece rate payment in piece rate payment the payment made on work done by the worker or payment on the basis of per piece made by the worker the payment is made after 15 days in this type the 2^nd type is daily payment in daily payment the payment made on daily basis the point to be noted that in above two moods of payment does not include any other benefit like gratuity or benevolent fund.

The third head is semi contractual payments it includes half salary and half contract like piece rate or daily basis it also does not includes any other benefit.

The fourth head is incentive payments it includes Sunday incentives which are made on the basis of worked on Sunday. Leave encashment payments this payment is made on less then 7 leaves in a year. Allowances are also paid to the employees on basis of performance and on the basis of level of job like AM, DM, GM, DGM and mangers. These allowance includes Fuel and mantinance allowance, entertainment allowance, daily allowance, trevelling allowance, mobile bill allowance, and misc allowances.

The fifth head is overtime payments these payments are made on the base of doing overtime it is only for workers, drivers, security guards and blue color employees.

In this week I also learn about oracle and OPD which includes Employees tracing details, personal information, benefits, allowances and promotions etc.

Third week: In Third week I site under the instructions of Mr Adnan (Accountant) his responsibilities are:-

Verify all utility bills and general bills and send to head office

Monitor and signed all gate passes

Verify employee fuel and telephone bills

Verify companies vehicles, blue sky, petroleum bills

Verify company courier bills

Verify accessories and general purchase bills

In This week I learn about the AMS,The AMS use in finance department because all type of purchasing related to organization purchase by AMS , There are two main head of this system like GERNAL & Accessories. The first head is gernal and manage the all gernal things such as furniture, stationary, and some other things.

Fourth week:I go to the second table, who deals the accessories, In this head accountant check the accessories , if accessories more needs then finance department prepare the purchase order and forward the procurement department . such as button, packing box & bag , and other things or called accessories.

In this week I also site under the instructions of Mrfarooq (Accountant) his responsibilities are check and verify bills of procurement accessories, dyeing, courier and reconcillation with outside partners.

In this week I learn that how to check and verify all the bills and what is the procedure of send these bills to the head office.

Fifth weekIn fifth week I site under the instruction of Mrhammadnazir he deals purchase order and shipment related procedures in this week I also lean about AMS which includes all the record of all invoices of shipment items and the purchase orders of the buyer company. After it I also learn about the record keeping in general journal and posting the balance in ledgers and trail balance also its effect on balance sheet this record keeping maintain through AMS.

Sixth week: In the final week I site under the instructions of different persons and I learn from senior officers about provisional P & L account, and sales. In this last week I also collect the information about the products of the company, customers and contacts of the company and conduct SWOT analysis, trend analysis, critical analysis, horizontal analysis, vertical analysis and ratio analysis. After it I conduct conclusion and give suggestions for the benefit of the company.

Chapter 5

SWOT Analysis

Strengths:

ISO 9001-2000:
Strong Security System
High quality product
Latest mechanized machinery.
Tremendous market positioning
Highly qualified and skilled management
Highly Motivated Workforce
Adequate financial resources
Competitive advantage
Own power generation plant

　Weaknesses:

High cost of production
Centralized decision making
Less promotional activities

　Opportunity:

Organization Can expand product lines
Organization Can capture new market segments around the world
Organization Can reduce the cost by proper utilization of resources
Organization Can hire more well-educated and experienced person

Threats:

New Entry of competitors
Buyer needs demands changes
Political instability
Change of government policies
Globally Economic instability

Detail of SWOT Analysis

Strengths

ISO 9001-2000:

R.M FABRICS is certified under ISO 9001-2000 and so it meets the requirement of international standard and has a value in the mind of concern people.

Strong Security System

R.M FABRICS has a greater security system. There are different hidden security cameras which capture all the moments.

High quality product

R.M FABRICS is using advance technology like they have modern machinery by which the quality of product produced is very high.

Latest mechanized machinery.

They are using modern looms which they have purchased from Japan, Germany and France. And by using that latest machinery the productivity of the employees are very high.

Tremendous market positioning

R.M FABRICS is one of the Pioneer Textile Group in the Pakistan so it has got the position in the mind of its customer. And being an old textile company people are loyal with it. R.M FABRICS has a better position in the mind of its customers.

Highly qualified and skilled management

The management of R.M FABRICS is skilled they have hired the foreign graduate people in their management and also experienced people from all over the country.

Highly Motivated Workforce

They are providing better pay to their employees and also bonus to them which motivate the workforce and they are doing well at work setting. Apart from that they are giving their employees faR.M Fabrics ities of Convenience like personal car along with fuel provided by the company too, which is a big deal for motivating the employees.

Adequate financial resources

The owners of R.M FABRICS are one of the richest persons of the Pakistan and they have more plant and investment in other industries like Sugar Mills, and Share Market. They have adequate financial resources to meet their requirements.

Competitive advantage

Because it is an old textile originating from 1950’s and it has still kept its position in the textile market on all competitors nationwide, which is its competitive advantage.

Own Power Generation Plant

They have own power generation plant and R.M FABRICS is the pioneer in the private organization who start the power generation.

Weaknesses:

High cost of production

The production cost is high because of un-proper utilization of resources.

Centralized decision making

The decisions are made by the upper management which is weakness of the R.M FABRICS because they have not any proper idea about the prevailing situation and their decision can be un-fruitful for the company.

Less promotional activities

The advertising and promotional cost of the R.M FABRICS is very low it can take advantage for more turn outs.

Opportunity:

Organization can expand Product Lines

Currently the R.M FABRICS is not dealing in knitwear they can expand their product line by producing knitwear. They have plants and the extra cost for the production will be low for R.M FABRICS. They also have better market repute.

Organization can reduce the cost by proper utilization of resources

If the cost of different matters which are not been utilized properly, is controlled by the R.M FABRICS management they can produce more at less costs. It has to develop a further systematic process for controlling and managing resources.

Organization can hire more well-educated and experienced person

They can take advantages by hiring more skilled people and they should hire young, fresh and energetic staff for their betterment. Because being human, you always have the room for betterment in any aspect.

Threats:

Buyer needs demands changes

Because of the research & development the design and the product of R.M Fabrics is just satisfactory as compared to competitors in the global environment and they are not fulfilling the demand of customers.

Political instability

Political instability effects the R.M Fabrics because of the quota system, Government can restrict the Company to export.

Changed of government policies

Government policies are changing day by day so it is always a threat for not only R.M Fabrics but for any company to survive in such a environment.

Globally Economic instability

Because of the economic instability the R.M Fabrics and the “Dumping system” which is rising on daily basis in the world can create many problems for the company and any uncertainty in the world like 9/11 may also affect its overall exports.

CHAPTER NO 6.

Financial Analysis

The financial analysis of the company presents us the true picture of the company and its performance regarding the utilization of resources, worth and its profitability. Following are the types of analysis:

6.1: Profit & loss A/C

For the year ended June 30,

Description	2012 Rupees in thousands	2011 Rupees in thousands	2010 Rupees in thousands
Net Sales Cost of sales	18,524,930 (15,552,188)	14,720,830 (12,985,511)	10,946,180 8,851,416
Gross Profits Distribution Cost Administrative Expenses Other operating Expenses Total Operating expenses	2,972,741 (828,796) (283,558) (53,016) 1,165,370	2,635,319 (836,458) (219,050) (94,351) 1,149,859	2,094,764 605,061 160,057 71,077 836,195
Operating Profit	1,807,372	1,485,460	1,258,569
Other operating profit Profit from operations Finance cost Profit before taxation Provision for taxation	60,649 1,868,021 (923,074) 944,947 (214,978)	14,242 1,499,702 (595,274) 904,428 (143,533)	11,397 1,269,966 719,855 550,111 98,405
Profit after taxation	729,969	760,895	451,706

BALANCE SHEET

As at June 30:

ASSETS	2012 Rupees in thousands	2011 Rupees in Thousands	2010 Rupees in thousands
Non Current Assets Property plant &equipment Long term advances Long term security deposits	4,669,160 3,738 1,7481	3,942,511 3,188 8,842	3,149,557 4,816 12,242
Total	4,690,379	3,954,541	3,166,615
Current Assets Store spare parts and loose tool Stock in trade Trade debts Loan and advance Shorts term deposits and payments Other receivable Cash & bank balance	631,081 4,895,990 2,964,896 185,345 291,671 609,07 701,416	484,809 2,789,329 3,538,815 205,052 248,099 594,396 482,074	432,437 1,727,771 3,197,857 146,124 180,689 449,220 321,026
Total	10,279,413	8,342,574	6,455,124
Total Assets	14,969,792	12,297,115	9,621,739
LIABLITIES: NON CURRENT LIABLITIES: Long term financing Liabilities against assets Deferred liability	1,254,840 110,683 223,885	1,463,491 118,152 185,886	1,672,877 128,071 148,770
Total	1,589,408	1,767,529	1,949,718
CURRENT LIBILTY: Trade & other payable Accrued Mark-up Short term borrowings Current portion of non-current liability Provision for taxation	2,012,273 183,842 6,096,208 705,285 214,978	1,822,699 137,069 4,320,052 432,086 143,533	1,201,683 196,958 3,285,109 369,485 98,405
Total	9,212,586	6,855,439	5,151,640
Equity &share capital Issued, subscribed &paid up share capital Reserves	1,075,000 2,713,378	1,141,667 2,152,708	900,000 1,238,446
Total equity Surplus on revaluation of operating assets Deferred income on sales	3,788,378 379,420 ------------	3,294,375 379,420 352	2,138,446 379,420 2,515
Total liabilities+ Equity & share capital	14,969,792	12,297,115	9,621,739

Ratio analysis

Ratio analysis is a shortcut method of expressing relationships among various items on the financial statements. However, ratios are not substitutes for looking deeper into the financial position of company. In the analysis of R.M Fabrics Textile Mills we found the following ratios:

· Net profit ratio

· Current ratio

· Earnings per share Ratio

· Loan on assets ratio

· Account receivable turnover ratio

· Return on equity capital

· Operating ratio

· Operating profit ratio

· Total assets turnover ratio

· Debt ratio

· Debt on asset ratio

· Operating expenses ratio

· Return on total assets

1.Profitability ratio:

Net profit ratio

Net profit after tax / Net sales x 100

Description	2012	2011	2010
Net profit after tax	729,969	760,895	451,706
Net sales	18,524,930	14,720,830	10,946,180
Net profit ratio	3.94%	1.09%	4.13%

Explanation

In 2010 profit observed is 4.13%. In 2011 profit decreasing trend is observed and the profit goes down to 1.09%. In 2012 increasing trend is observed and the profit rose to 3.94%.

2.Liquidity ratio:

Current Ratio: Current Assets / Current Liabilities.

Description	2012	2011	2010
Current Assets	10,279,413	8,342,574	6,455,124
Current Liabilities	9,212,586	6,855,439	5,151,640
Current ratio	1.11	1.22	1.25

Explanation

Current ratio show the size of the current assets as compare to current liabilities. It measures the ability of the company to pay the short term financial obligation of the company. I t is best if it is 1.5:1. It means it the assets are 1.5 as compare to liabilities

In 2010 current ratio is 1.25 which more than 1. This is not very good relation ship between the assets and liabilities. It should be 1.5:1 minimum. In 2011 current ratio is 1.22 which is more than one. This is an alarming situation for the company because it can not increasing. In 2012 decreasing trend is observed and the current ratio decrease to 1.11. it also the more alarming situation for the company because it could be decrease continuously.

3.Earnings per share Ratio:

Total current Assets / No of equity shares

Description	2012	2011	2010
Total current Assets	729,969,000	760,895,000	451,706,000
No of equity shares	125,000,000	125,000,000	125,000,000
Earning per share	5.84	6.09	3.61

Explanation.

In 2010, 3.61 rupees is earned by one share. The company remains in profit if one share is purchased for one rupee. In 2011 slight increasing trend is observed once share can earn 6.09 rupees. In 2012 decreasing trend is observed and one share can earn 5.84 rupees.

4.Loan on assets ratio

Total loans / Total assets.

Description	2012	2011	2010
Total loans	2,012,273	1,822,699	1,201,683
Total assets	14,969,792	12,297,115	9,621,739
Loan on assets ratio	0.13	0.15	0.12

Explanation

Loans to Assets Ratio / Debt Ratio indicate how much percentage of the assets is financed by the creditors. In case of insolvency of the company how much the creditors are secured, It also indicates firm’s ability to pay long term debts. If this ratio is low it is in the favor of the company.

In 2010 loan on assets ratio observed that it is 0.12. In 2011 increasing trend observed and the ratio is rose on 0.15. But in 2012decreasing trend observed and the ratio goes down to 0.13.

5.Account receivable turnover ratio

Operating cost/ operating revenue x 1oo

Description	2012	2011	2010
Total sales	18,524,930	14,720,830	10,946,180
Account reciveable turnover	609,077	594,396	449,220
Account reciveable turnover	30.41	24.77	24.37

Explanation

A/R turnover means how many times our account receivables are converted into cash in one year.In 2010 24.37 times our accounts receivables are converted into cash. In 2011 increasing trend sis observed due to the increase in accounts receivables 24.77 times our accounts receivables are converted in cash. In 2012 slight increasing trend is observed 30.41 times our accounts receivables are converted into cash.

6.Return on equity capital Ratio

Net profit after tax / equity capital x 100

Description	2012	2011	2010
Net profit after tax	729,969	760,895	451,706
Equity capital	3,788,378	3,294,375	2,138,446
Return on equity capital	19.27%	23.10%	21.12%

Explanation

In2010 return on equity capital ratio is 21.12% in 2011increasing trend observed and the ratio rose up to 23.10% But in 2012 decreasing tren is observed and ratio falls to 19.27%

7.Operating ratio

Operating costs / operating revenue x 100

Description	2012	2011	2010
Operating costs	1,165,370	1,149,859	836,195
Operating revenue	1,807,372	1,485, 460	1,258,569
Operating ratio	64.48%	77.41%	66.44%

Explanation

Operating ratio is the determination between the operating expense and operating income of the year.In 2010 Operating ratio observed is 66.44%. In 2011 profit increasing trend is observed and the Operating ratio rose up to 77.41%. In 2012 Operating ratio decreasing trend is observed and the Operating ratio falls on 64.48%.

8.Operating profit ratio

Operating profit / Net sale x 100

Description	2012	2011	2010
Operating profit	1,807,372	1,485, 460	1,258,569
Net sales	18,524,930	14,720,830	10,946,180
Operating profit ratio	9.76%	10.09%	11.50%

Explanation

Operating profit ratio is that ratio in which we find the total operating profit of the following years In 2010 Operating profit ratio observed is 11.50%. In 2011 profit decreasing trend is observed and the Operating profit ratio falls to 10.09%. In 2012 alarming stage for the company that the Operating profit decreasing and the ratio observed 9.76%.

9.Activity ratio

Sales / total assets

Description	2012	2011	2010
Net sales	18,524,930	14,720,830	10,946,180
Total assets	14,969,792	12,297,115	9,621,739
Total assets turnover	1.24%	1.20%	1.14%

Explanation

Activity ratio includes the total assets turnover ratio. In this ratio we find the turnover of total assets for the number of the years. In 2010 the assets turnover ratio is 1.14%. in 2011 increasing trend observed and the ratio rose up to 1.20% in 2012 it also the in creasing trend and ratio more rose up to 1.24%.

10.Debt equity ratio

Long term liabilities /Total assets x100

Description	2012	2011	2010
Long term liabilities	1,589,408	1,767,529	1,949,718
Total assets	14,969,792	12,297,115	9,621,739
Debt ratio	10.62%	14.37%	20.26%

Explanation

Debt ratio also called the debt equity ratio in this ratio we calculate the percentage changes of total assets and long term liabilities

In 2010 the debt ratio is 20.26%. In 2011 decreasing trend observed and the ratio goes down to 14.37% in 2021 it also the decreasing trend and ratio more goes down to 10.62%.

11.Debt to assets ratio

Total liabilities / total assets x 100

Description	2012	2011	2010
Total liabilities	10801994	8622968	7101358
Total assets	14,969,792	12,297,115	9,621,739
Debt to assets ratio	72.16%	70.12%	73.81%

Explanation

Debt to asset ratio also called the debt asset ratio in this ratio we calculate the percentage changes of total assets and total liabilities of the following years.

In 2009 the debt to asset ratio is 73.81%. In 2010 decreasing trend observed and the ratio goes down to 70.12% in 2011 increasing trend observed and ratio rose up to 72.16%.

12.Operating expenses ratio

Operating expenses / Net sale x 100

Description	2012	2011	2010
Operating expenses	1165370	1149859	836195
Net sales	18,524,930	14,720,830	10,946,180
Operating expenses ratio	6.29%	7.81%	7.64%

Explanation

Operating expense ratio is that ratio in which we find the total operating expenses of the following number of yearsIn 2010 Operating profit ratio observed is 7.64%. In 2011 profit increasing trend is observed and the Operating expense ratio rose up to 7.81%. In 2012 the Operating expense ratio decreasing and the ratio observed is 6.29%.

13.Return on total assets

Net profit after tax / Total assets x100

Description	2012	2011	2010
Net profit after tax	729,969	760,895	451,706
Total assets	14,969,792	12,297,115	9,621,739
Operating ratio	4.88%	6.19%	4.69%

Explanation

Return on total asset means that we find the relation of net profit and total assets of the years.

In 2010 the return on asset ratio is 4.69%. In 2011 increasing trend observed and the ratio rose up to the 6.19% in 2012 decreasing trend observed and ratio goes down to 4.88%.

Horizontal Analysis:

Formula. Individual year/Base year x 100

Horizontal analysis of the profit and loss Account:

Description	2012	2011	2010
Sales	169%	134.48%	100%
cost of sales	176%	136.54%	100%
gross profit	142%	126%	100%
distribution cost	137%	138.24%	100%
administrative expenses	177.16%	136.86%	100%
other operating expenses	75%	132.74%	100%
	139%	137.51%	100%
	144%	118.03%	100%
other operating income	532%	124.96%	100%
profit from operations	150.01%	118.09%	100%
finance cost	128.23%	82.60%	100%
profit before taxation	171.77%	164.41%	100%
provision for taxation	218.46%	150.45%	100%
profit after taxation	741.80%	773.23%	100%

Explanation

In horizontal analysis we compare base years items like sales, cost of sales etc to the following index year and calculate the relative changes.

In the given profit and loss account 2010 is our base year and 2011 and 2012 is our index yearss

In 2011 sales increased to 34.48%. In 2012 increasing trend is observed and sales rose up to 69%

In 2011 cost of sales increased to 36.64%. In 2012 increasing trend is observed and cost of sales rose up to 76%

In 2011 gross profit increased to 26%. In 2012 increasing trend is observed and gross profit rose up to 42%

In 2011 operating income increased to 18.03%. In 2012 increasing trend is observed and operating income rose up to 50%

In 2011 finance cost decreased to 18%. In 2012 increasing trend is observed and finance cost rose up to 28.23%

In 2011 profit before taxation increased to 64.41%. In 2012 increasing trend is observed and profit before taxation rose up to 71.77%

In 2011 provision for taxation increased to 50%. In 2012 increasing trend is observed and provision for taxation rose up to 118%

In 2011 profit after taxation (Net profit) increased to 673.23%. In 2012 decreasing trend is observed and profit after taxation goes down to 641.80%

HORIZANTAL ANALYSIS:

BALANCE SHEET:

ASSETS	2012	2011	2010
Non Current Assets Property plant &equipment Long term advances Long term security deposits	148% 78% 143%	125% 66% 72%	100% 100% 100%
Total	148%	125%	100%
Currents Assets Store spare parts and loose tool Stock in trade Trade debts Loan and advance Shorts term deposits and payments Other receivable Cash & bank balance	146% 283% 93% 127% 161% 14% 218%	112% 161% 111% 140% 137% 132% 150%	100% 100% 100% 100% 100% 100% 100%
Total	159%	129%	100
LIABLITIES:
Non Current Liabilities: Long term financing Liabilities against assets Deferred liability	75% 86% 150%	87% 92% 125%	100% 100% 100%
Total	82%	91%	100%
Current Liabilities: Trade & other payable Accrued Mark-up Short term borrowings Current portion of non-current liability Provision for taxation	167% 93% 186% 191% 218%	152% 70% 132% 117% 146%	100% 100% 100% 100% 100%
Total	179%	133%	100%
Equity& share capital Issued, subscribed &paid up share capital Reserves	119% 219%	127% 174%	100% 100%
Total equity Surplus on revaluation of operating assets Deferred income on sales	177% 100% 0%	154% 100% 14%	100% 100% 100%
Total liabilities+ Equity & share capital	156%	128%	100%

VERTICAL ANALYSIS: Formula =Individual Item/ base x 100

For the year ended June 30,

Profit & Loss Account:

Description	2012	2011	2010
Sale	100%	100%	100%
Cost of sale	83.95%	82.10%	80.86%
Gross profit	16%	18%	19%
Distribution cost	4.47%	5.68%	5.53%
Administrative cost	1.53%	1.49%	1.46%
Other operating Expense	0.29%	0.64%	0.65%
	6.29%	7.81%	7.64%
	10%	10%	12%
Other operating Income	0.33%	0.10%	0.03%
Profit from operation	10%	10%	12%
Finance cost	4.98%	4.04%	6.58%
Profit Before Taxation	5%	6%	5%
Provision for taxation	1.16%	0.98%	0.90%
Profit after Taxation	4%	5%	4%

BALANCE SHEET :

As at June 30:

ASSETS	2012 Rupees in thousands	2011 Rupees in thousands	2010 Rupees in thousands
Non Current Assets Property plant &equipment Long term advances Long term security deposits	31.19% 0.024% 0.12%	32% 0.025% 0.0007%	33% 0.05% 0.13%
Total	31.3%	32.7%	33.1%
Current Assets Store spare parts and loose tool Stock in trade Trade debts Loan and advance Shorts term deposits and payments Other receivable Cash & bank balance	4.2% 33% 20% 1.2% 2% 0.4% 5%	4% 23% 29% 2% 0.02% 5% 4%	4.49% 18% 33.2% 2% 2% 55 3.3%
Total	69%	67.3%	67.9%
Total Assets	100%	100%	100%
LIABLITIES: NON CURRENT LIABLITIES: Long term financing Liabilities against assets Deferred liability	8.3% 0.7% 1.4%	12% 1% 2%	17.3% 1.3% 2%
Total	10.4%	14.3%	20.6%
CURRENT LIBILTY: Trade & other payable Accrued Mark-up Short term borrowings Current portion of non-current liability Provision for taxation	13.4% 1.2% 41% 5% 1.4%	15% 1.1% 35% 4% 1.1%	12.4% 0.02% 34% 3.8% 4%
Total	62%	56%	55%
Equity &share capital Issued, subscribed &paid up share capital Reserves	7.1% 18%	9.2% 18%	9.3% 13%
Total equity Surplus on revaluation of operating assets Deferred income on sales	25.3% 3% 0%	27% 3% 0.002%	22.22% 3% 0.02%
Total liabilities+ Equity & share capital	100%	100%	100%

Explanation

In the vertical analysis of Profit & Loss we take the sale as base.

In 2010 cost of sale was 80.86% of the sale. In 2011, 2012 increasing trend is observed and cost rose to 82.10% and 85.95% of sale.

In 2010 G.P is 19% of sale. In 2011, 2012 decreasing trend is observed and G.P fall to 18% and 16% of the sale.

In 2010 operating expenses are 7.64% of the sale. In 2011, increasing trend is observed and the operating expenses rose up to 7.81% of sale. In 2012 decreasing trend is observed and the operating expense falls to 6.29% of sale.

In 2010 operating profit was 12% of the sale. In 2011 decreasing trend is observed and the operating profit fall to 10%. In 2012 slight increase in profit and the operating profit is 10%.

In 2010 profit before taxation is 5% of the sale. In 2011operating profit rose up to 6% of sale. In 2012 decreasing trend is observed and the profit before taxation falls to 5% of sale.

Chapter 7

Conclusion:

From the marketing point of view and looking at the demand of the cloth project can be very safely said to be viable.

RECOMMENDATIONS

R.M Fabrics Textile Mill:

The first and most recommendation is to eliminate one man show prevailing in the company
There must be a proper system for training of employees and supervisors.
Importance should be given to employees’ turnover.
Different training courses should be arranged for the up lifting and improving the quality of work for employees.
There is also a problem of work overload for the employees and it should be control properly so that the employees are motivated. As I have seen employees working till 8 PM. And I have come to know that sometimes they work till 1 AM late night without any incentive.
Employees should be paid extra for the work which they do after working hours.

ACKNOWLEDGEMENT

I pay hum-age to greatest personality of the universe; HOLY PROPHET HAZARAT MUHAMMAD (PBUH) who is forever source and spring of guidance in every sphere of life.

At the very outset, I would like to express my hearties and sincerest sense of gratitude to all my worthy teachers of CIIT Lahore for their inspiring guidance and constructive criticism.

Executive Summary 5

Textile Industry in Pakistan 6

Introduction & History 8

Vision Statement 10

Mission Statement 10

Group Management Profile 10

Production Accounting & Management System 12

Inspection System 13

Organizational Structure 15

SWOT Analysis 18

Detail of SWOT Analysis 20

PEST Analysis 25

Marketing Strategy 26

Competitive Strategy 30

Purchase Accounting System 31

Process of Yarn Production 34

Work done during Internship 36

Learning as an Internee 41

Recommendations 43

Annexure 44

Glossary 50

Bibliography 52

Executive Summary

The third and last section includes the recommendations.

Textile Industry in Pakistan　

Today there are 450 Spinning mills and 35 composite textile mills. Textile goods form 60 % of the total exports of Pakistan.

Introduction & History

Pakistan

§ Sizing

§ Weaving

Vision Statement

· Attain highest standards of quality in its all business activities.

· Sustained growth in real terms.

· Have professionally trained high quality motivated workforce, working as a team in all environments.

· Attain past glorious position and be recognized locally as well as internationally as a dynamic, quality conscious and progressive company and industry leader.

Mission Statement

To manufacture quality products for customer satisfaction through
Honoring the commitment.
Continuous endeavor for improvement through adoption of most modern technology in production.
Strict adherence to quality control.
Developing a sense of high reliability through fair dealing.
Becoming a part of country’s development and economic prosperity.