COLONY TEXTILE

7/30/2019 COLONY TEXTILE

1/34

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

existing.

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

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

I am highly thankful for the cooperation ofMr. Bilal Niazi, Mr. Wasim

Omer, Mr. Rizwan Malik, Mr. Tahir Mehmood, Mr. Nouman Chathaand Mr. Kashif Niazi of Colony Industries (Pvt.) Ltd. I might not beable to complete my internship without their cooperation and kindbehavior. I am also gratified to all my sincere fellows who I had everremembered for their continued encouragement moral support andinvaluable succor as well as substantial cooperation during my criticalmoments.

Hassan Bakhtiar Roy

Contents

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


2/34

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 atCOLONY Textile Mills Limited. Internship duration was 6 weeks and itprovided practical knowledge of working in professional environment.


3/34

This learning experience is described in detail n the various sections ofthis report.

In the first section, there is some detail about the company. The historyand present status of the company is explained. The organization structure

and the details of its management along with its location are alsodiscussed. I have also discussed the yarn manufacturing procedure and theimportant departments of the company. I have discussed some businessoperations and some strategies as well.

The second section provides information about the activities that Iperformed during the internship. I worked as an internee mainly inAccounts and Marketing department. However, I also spent some time inPurchase 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 textiletraditions in the world. Excavations at Mohenjo Daro and Harappa 2500-1500 BC revealed that the inhabitants of the Indus Valley cultivatedcotton. Sir John Marshall, the archaeologist has stated that a few minutescraps of cotton were found adhering to the side of a silver vase. Clay andfaience spindles whorls indicate that cotton and woolen fibers were spun.A well-equipped dyers workshop was excavated at Mohenjo Daro and thefragment of cloth indicates that woven cotton cloth was dyed with madder

root.

Independence from the British in 1947 and the division of the Indiansubcontinent into Pakistan and India started a new era for textilesproduction. Pakistan consisted of two entities, east and West Pakistan. TheWest was the cotton producing area and the East was responsible for juteproduction. At the time of partition, Pakistan had no industrial base andinherited only one textile mill, the Lyallpur Cotton Mill in Lyallpur [now


4/34

called Faisalabad]. This mill produced yarn and gray cloth and no printedfabrics.

Under the Open General Licensing [OGL] scheme, the businesscommunity imported plants and machinery with cash dollars. In 1950,

Adamjee Mills was set up in Karachi, Kohinoor in Faisalabad, ColonyTextile Mills in Multan, Nishat and Crescent Textile in Faisalabad. Thesewere followed by Gul Ahmed Textile Mills, Al-Karam, Valika, Star andRashid textile mills.

Within a decade the new country of Pakistan was self-sufficient in cottonand began exporting gray cloth and later cotton yarn. Pakistan startedexporting printed fabrics in the late 1970s to Africa and by mid 80s was

sending printed material to Europe. Pakistans location was ideal, as it layhalfway between the western world and the Far East. Pakistan has a 28percent 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 clothwas being exported at throwaway prices. There are about 200,000 powerlooms 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 ruralmarket and a very small niche market.

Although Pakistan is the worlds 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 ofthe 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 trainingbecame imperative. The Textile University of Pakistan was established inKarachi to train technical and management professionals. The TextileUniversity awards degrees in Textile Sciences and Textile Management.The National College of Arts in Lahore and the Indus Valley School ofArt and Architecture in Karachi are the only two institutions in Pakistan,which award a degree in the discipline of Textile Design. Designers arebeing 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. Textilegoods form 60 % of the total exports of Pakistan.


5/34

Introduction &

History

Colony group has been the pioneer of textile industry by setting up Colony

Textile Mills Limited (CTML) after partition of the sub continent in 1950,thus CTML became one of the first textile mills to be registered as publiclimited company and quoted in Karachi Stock Exchange (KSE).

Foundation of the group was kept over a small flour milling operation,which rapidly grew into cotton ginning that evolved into the core businessof the group, constituting 21 cotton ginners spread throughout the cottongrown belt in the province of Punjab - Pakistan. The logical verticalprocess-integration paved its path for the group to invest in to TextileSpinning. The ground breaking of the Spinning facility was the beginningof huge investments that followed which gave the group a leading position

in the Textile Industry of the Country.

Colony Textile soon became one of the largest vertically integrated textilefacilities in the country. The group further diversified in to PowerGeneration and Distribution network, Banking, Insurance, and Cementsectors. The success of the group continued until the government regimeshift brought about a shift in policy from private sector pushedindustrialization to a strong wave of nationalization. The Ginning, FlourMilling, Power, Banking, Insurance and Cement along with various othersectors were completely taken over by the government.

Having major assets nationalized, the Group was faced with severefinancial difficulties for almost one and a half decades.

Presently, the Colony Group consists of several Textile Spinning facilitieswith an installed capacity in excess of 220,000 spindles out of which morethan 200,000 spindles are 4 years old or less.

Colony group is managing the following companies:

Company Name Line of Business Status

Colony Textile Mills Limited Textile (Spinning) Public Limited Company

Colony Industries (Pvt.) Limited Textile (Spinning & Weaving) Private Limited Company

Colony Textile Mills Limited (CTML)


6/34

Colony Textile Mills Limited, one of the group companies of the ColonyGroup, is a Textile Manufacturing unit established as on 24th August, 1946 andengaged in manufacturing of yarns of various Ne Counts. The company has authorized capital of Rs.

411,000,000 as on September 30th 2008.

During year 2000 to 2001 the annual production capacity of the company was 34.813 million Kgs converted

into 20 Ne Count based on 111,136 spindles. Currently the number of spindles installed has been increased to

over 175,000 spindles.

A summary of the companys production record for spinning section for the past three years is given in Annex

1.5

Year ended 30th September 2006 2007 2008

o. o s p n es nsta e , , ,

verage no. o spn es wor e

,

,

,

Capacity at 20 count(Kgs.) 17,778,000 22,841,002 48,669,115

No. of shifts worked 1,092 1,040 1,095

Actual production converted at 20 count 14,652,680 18,703,378 47,394,446

Capacity Utilization 82.00% 82.00% 97.38%

The company sales are comprised of local sales which is almost 100% against advance cash payment. The total

turnover of the company during last year was Rs. 3.226 Billion which is expected to cross 5.00 Billion mark

during the current year.

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.


7/34

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 countrys 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:

MR. MUGHIS A. SHEIKH

Mr. Mughis A. Sheikh is the Chairman of Colony Textile Mills Limited.

MR. FAREED M. SHEIKH

Mr. Fareed M. Sheikh is the Chief Executive of Colony Textile Mills Limited.

MR. NAVEED M. SHEIKH

Mr. Naveed M. Sheikh is CEO and director of Colony Weaving Mills (Pvt.) Limited.

Production Accounting & Management System


8/34

CIL 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 CIL 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 facility through Local Area Network along with being Web-enabled.

CIL 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 facilitate the business on the commercial side as well as

providing CIL production team to strive for either improving their performance or marinating the quality which

is for the satisfaction of the clients.

Inspection System

Colony Industries (Pvt.) Limited is the pioneer in the entire Indo-Pak region in deploying the Uster FabriScan in

its facility. 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 240 loom facility. Deploying this

machine in this facility 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

Colony Weaving Mills is fully-contained and self-sufficient facility with its in-house continuous and reliable

power generation facility 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 facility,

along with producing more than 50% of the steam required for the sizing operation.


9/34

Memberships

Lahore Chamber of Commerce Industries

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

CIL is producing Grey Fabric with following fiber types, for abbreviations 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 doesnt 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.

Colony Groups structure is a hybrid of divisional and functional structures; divisions are based on two products

Yarn (Spinning Facility) and Grey Fabric (Weaving Facili ty).

Top positions are as follows:

See Annexure 1.1

Group Profile


10/34

Board of Directors

Mr. Mughis A. Sheikh (Chairman)

Mr. Fareed M. Sheikh (Chief Executive Officer)

Mr. Zarrar Ibn-e-Zahoor

Mr. M. Akram Qureshi

Mr. Najeeb Ahmed

Mr. Muhammad Shakeel

Mr. Tahir Mahmood

Registered Office

M. Ismail Aiwan-e-Science

Shahrah-i-Jalaluddin Roomi,

Ferozepur Road Lahore54600

Phone: (042) 57589702

Fax: (042) 5763247

Colony Industries (Pvt.) Limited

CIL consists of two divisions Weaving & Spinning; following is the top positions in CIL.

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.


11/34

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

operations.

See Annex 1.3

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

Weaknesses:

High cost of production

Centralized decision making

Less promotional activities


12/34

wn power generat on p ant

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


13/34

Detail of SWOT Analysis

Strengths:

ISO 9001-2000:

CTML 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

CTML has a greater security system. There are different hidden security cameras which capture all the

moments.

High quality product

CTML 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


14/34

CTML 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. CTML has a better position in the mind of its

customers.

Highly qualified and skilled management

The management of CTML 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 facilities 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 CTML 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 1950s 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 CTML 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 CTML because they have not any

proper idea about the prevailing situation and their decision can be un-fruitful for the company.

Less promotional activities


15/34

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

Opportunity:

Organization can expand Product Lines

Currently the CTML 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 CTML. 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 CTML 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 CTML 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 CTML 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 CTML but for any company

to survive in such a environment.

Globally Economic instability

Because of the economic instability the CTML 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.

PEST Analysis


16/34

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 CTML 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.

CTMLs excellent computerized machines and devices have made extension in its present setup of well

advanced technology imported from Japan, Germany and France.

MARKETING STRATEGY

CTML is a group starting from 1950s 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 isbranch 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.


17/34

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.

CTML 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, CTML pursued its strategy of value addition and reducing the

dependency on Grey Fabrics and Grey Yarn.

Having the foresight to assess that in coming years value addition will be the thing of the future, CTML

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 CTML has very little

business at the moment.

North America is the star market for CTML; its 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.

CTML is in the process of updating its machinery to cater the needs of the wider width fabric requirement for

USA bedding business. CTML is also taking up 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.


18/34

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.

CTML is very strong in non-quota categories like curtain and table linen. These categories are best served with

new product development (NPD). CTML will coordinate the effort for NPD by all markets to optimize results.

CTML has achieved the highest sales in 1999-2002 for North America market.

On top CTML 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. CTML has dedicated new staff with fresh energy for the emerging market.

They have successfully broken the ground and we have very strong fai th 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 CTML moves towards becoming a

more vertically integrated organization.

CTML 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.

CTML has provided its staff with better working environment and facilities, which enhances its efficiency and

output.

At CTML, 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


19/34

As for as COLONY 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.

COLONY 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.

Its one competitor is the Rupali group.

PURCHASE ACCOUNTING SYSTEM

For abbreviations see Glossary:

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 facilitate his sphere of work, he will fill out a PDN. A copy of PDN used in ourcompany 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


20/34

3) Spinning 03-00

4) Services 04-00

5) Residential Colony 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 i ts complete code. IfRing 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-Sections description will be written in front of the blank

space provided for description. The Main Departments 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.


21/34

99-99-999

Store Section Item Number

Store Sub-Section

PROCESS OF YARN PRODUCTON

See figure in Annexure 1.3

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


22/34

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.


23/34

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 CTML 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 CTML 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


24/34

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


25/34

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.

Learning as an Internee


26/34

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 GRNs and maintaining them in a serial manner. I have at tended

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 dont 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


27/34

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 Institutes good understanding about students

future.

RECOMMENDATIONS

Colony Textile Mills Limited:

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 i t 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.

Annexure


28/34

COLONY CEOs

Figure 1.1

COLONY Division wise

Figure 1.2

CEO

(CIL)

Technical Director

(Weaving)

Chief Technical Officer

(Spinning)


29/34

Marketing Manager

Production Manager

Accounts Manager

Sales Manager

Production Manager

Accounts Manager

Finance Manager

Commercial Director

MIS Manager

Manager Personnel & Administration

Accounts Department

Figure 1.3


30/34

Procedure of Yarn manufacturing

Figure 1.4

Annex 1.5


31/34


32/34

PV PolyesterViscose

Mixed Different materials in Warp & Weft

Purchase Accounting System

PDN Purchase Demand Note

GRN Goods Receipt Note

SIN Store Issue Note


33/34

SRN Store Return Note

UOM Unit Of Measure

HOD Head Of Department

HOL Head Office Lahore

G/L General Ledger

Item Code

Distinct

Code

Allocated

to an

Inventory

Item

Departmen

t Code

Distinct

Code

Allocated

to a

Departmen

t

Section Code Distinct Code Allocated to Section of a Department

Store Item Code List SICL

MIS Management Information Systems


34/34

Bibliography

Sources from where I have collected data:

Miss Parveen Abida, 2004,Production Accounting & Management System, Inspection System,

Introduction,Internship Report on Colony Textile Mills Ltd. Lahore

Miss Javed Iffat, 2006, SWOT Analysis, PEST Analysis,Internship Report on Masood Textile Mills Ltd.

Faisalabad. Faisalabad

Mr. Bhatti Jamil Muhammad, 2006, Marketing Strategies,Internship Report on Nishat Textile Mills Ltd.

Lahore

Date post:	04-Apr-2018
Category:	Documents
Upload:	waseemzahoor
View:	218 times
Download:	0 times

COLONY TEXTILE

Documents