Internship Report On

INTERNSHIP REPORT ON

MONNOO GROUP OF INDUSTRIES

1

Prepared by:

Name: Farhan Ali

Class: M. Com.

Roll No.: 1276

Session: 2012-2014

Registration No.: 2012-GCUF-08275

COLLEGE OF COMMERCEGOVERNMENT COLLEGE UNIVERSITY, FAISALABAD

SCANNED COPY OF INTERNSHIP CERTIFICATE

INTERNSHIP REPORT COMPLETION CERTIFICATE

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It is certified that the Internship Report has been successful completed by

the students under my supervision. It is also certified that the Report meets all

criteria and standards laid down for Completion of Degree.

The Details are as Follows:

Organization Name: Monno Group of Industries

Student Name: Farhan Ali

Class: M. Com.

Roll No.: 1276

Session: 2012-2014

Registration No.: 2012-GCUF-08275

Signature:

Name of Internal Supervisor

Date:

Dedication

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No words can adequately express my overriding debt of gratitude to my parents

whose support helps me in all the way.

The true value of a teacher is determined not by what he knows, nor by his ability to

impact what he knows, but by his ability to stimulate in others a desire to know. So I want to

say thanks to my TEACHERS….

Above all I shall thank my Teachers friends who constantly encouraged and blessed me so

enable me to do this work successfully.

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ACKNOWLDGMENT

Innumerable thanks to the Great Almighty ALLAH, The Merciful and The Beneficent for His

countless blessings and giving me strength to accomplish this work successfully.

The credit goes to my Parents especially my mother who prays to Allah Pak till at night for

my splendid success, what I am today is really because of her prayers.

My respected supervisor MR.FAHAD is really deserves recognition due to his consistent

help, valuable suggestions and guidance to carry out this work in the best way as possible.

If I recall my whole span of internship, I feel highly indebted to the following persons for

their extreme cooperation:

MR. MUJAHID HUSSAIN SHAH OPERATION MANAGER

MR. NABEEL NAWEED CHIEF CONTROLLER ACCOUNTS

MR. RIZWAN KHALID FINANCE MANAGER

MR. SHAHID FAROOQ PRODUCTION MANAGER

MR. YOUSAF IKRAM MARKETING MANAGER

TABLE OF CONTENTSCH# DESCRIPTION Page#

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1 INTRODUCTION & BACKGROUND

1.1 Business Sector Introduction

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1.2 Overview of the Organization

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1.3 Projects of Monnoo Group of Industries

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1.4 Company Profile

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1.5 Business Volume

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1.6 Competitors

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2ORGANIZATIONAL

STRUCTURE/HIERARCHY

2.1 Mission Statement 18

2.2 Organizational Hierarchy Chart 19

2.3 Introduction t All Departments 20

3 PRODUCTS(s) INTRODUCTION

3.1 Major Products 23

3.2 Details of Products 23

4 JOB DESCRIPTION 25

5 SWOT ANALYSIS 26

6 FINANCIAL STATEMENT ANALYSIS

6.1 Ratios Analysis 28

6.2 Vertical Analysis 40

6.3 Horizental Analysis 44

7 CONCLUSION 48

8 SUGGESTIONS & RECOMMENDATION

CHAPTER NO.1

ORGANIZATION INTRODUCTION

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Organization Name Monnoo Group of Industries

Year of Foundation 1957

Authorized Capital Rs. 4,000,000 shares @ 10 each

National Tax Number 0657805-5

General Sales Tax Number 03-01-5202-002-73

Business Nature Individual

Organization/Company Type Company Limited by Shares

Principal Activity Manufacturing

Major Product(s)/Service(s) Yarn

Bi Product(s)/Service(s) Yarn

Mailing Address Monnoo House, 3-Montgomery Road, Lahore.

Phone No. +9242 6364412

Fax +9242 6364431

Website http://www.monnoo.com

E-Mail [email protected]

Facebook NO

BUSSINESS SECTOR INTRODUCTION

Textile is a term that comes from “texere” which is a Latin word, that means “to weave”.• A

cloth, especially one manufactured by weaving or knitting; a fabric. About Textile

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The textile industry is often considered the back bone of the Islamic Republic of Pakistan’s

economy.• Pakistan’s textile Industry is the fourth Largest Cotton Producer.• 6th largest

importer of raw cotton• The Third largest Consumer.

INTRODUCTION• the textile industry contributes approximately 46 percent to the total

output or 8.5 percent of the country GDP. • In Asia, Pakistan is the 8th largest exporter of

textile products providing employment to 38 percent of the work force in the country.

VALUE CHAIN OF TEXTILE INDUSTRY RAW MATERIAL TEXTILE

PLANTS SPINING, STORES, CUSTOMERS.

OVERVIEW•

Pakistan’s textile industry ranks amongst the top in the world. Cotton based

textiles contribute over 60% to the total exports, accounts for 46% of the total manufacturing

and provide employment to 38% manufacturing labor force. The availability of cheap labor

and basic raw cotton as raw material for textile industry has played the principal role in the

growth of the Cotton Textile Industry in Pakistan.

HISTORY OF TEXTILE INDUSTRY

It came into being which had the main objective of

industrializing the country in major fields. The modern development of the sector started in

1953 with the inauguration of the Valika textile Mill at Karachi. Pakistan’s industrialization

began in the 1950s with the textile industry at its center 1950’s. New private investment

began with a highly protected home market Newly established mills were based upon

imported technology but there was a lack of technical staff and shortages of capital by mid

sixties there were about 180 units of textiles bleaching, printing and processing units, mostly

situated in Karachi and Punjab.1960’s

World demand for good quality, wide width fabrics grew and replacement and a

modernization process started. Machinery for producing garments and made-ups was also

freed from import duty. As a result, a huge expansion in the spinning sector took place in the

first five years of the 1990s.The number of units rose to 440 in 1996-97,1990’s

Textile exports managed to increase at a very decent growth of 16% in 2006.Textile exports

share in total export of Pakistan has declined from 67% in 1997to 55% in 2008, as exports of

other textile sectors grew Textile exports in 1999 were $5.2billion and rose to become

$10.5billion by 2007.1999 to2008

Textile industry is being hit hard due to ongoing energy crisis, depriving the gas supply to the

textile units for three days a week. Pakistan’s cotton cultivation has declined due to several

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factors ranging from cultivation of traditional varieties and via traditional methods, poor

marketing, and failure in making timely payments to cotton producers. The textile industry

employs almost 40percent (2008-09) of the industrial workforce 2009

Significant changes to the general sales tax (GST) on industrial sector including textiles

(APTMA) had prepared a based report for the federal government in which it has been

projected that the textile industry exports would cross over $16 billion compared to its

present level of around $8 billion.2010. Energy crisis leaves Pakistan textiles in tatters

Textile exports stood at $12.5 billion from July 2010 to May 20112011. 10 percent of the

spinning mills and fabric printing units have shut down, and half of the remaining plants are

struggling to survive thousands of textile workers poured out onto the streets of the city,

burned tires, and shouted slogans against the government. Pakistan’s $13.8 billion textile

industry is struggling to survive a critical shortage of energy to run its plants.2012

TEXTILE SECTOR’S CONTRIBUTION TO THE ECONOMY OF PAKISTAN

According

to the economic survey of Pakistan2008-09 the Pakistan textile industry contributes more

than 60% to the country total exports, which amounts to around 5.2billion US dollars.•

According to the 2012 Economic Survey of Pakistan, issued by the finance ministry, the

textile industry itself constituted about 4% of the total size of the economy

TOP BUYERS OF PAKISTANI TEXTILE GOODS

USA

EU

Gulf region

UK

Hong Kong

Japan

Korea

Saudi Arabia

Italy

Turkey

Germany

Norway

France

Canada

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Sweden

Australia

IMPORTANCE OF TEXTILE SECTOR

In Asia Pakistan is the 8 largest exporter of textile

exporter Cotton is the basic Cash crop of Pakistan. • Textile products are one of the essential

and basic human requirements next to food. • Pakistan is the 3rd largest exporter of raw

cotton; cheap labor and raw cotton are available. • It provides employment to 38% of the

work force in the country which amounts to a figure of 15million. However, the proportion of

skilled labor is very less as compared to that of unskilled labor• 2nd Largest supplier of

cotton yarn with 26%share of the international market.

SECTORS OF TEXTILE INDUSTRY

Spinning

Weaving

Processing

Printing

Garment manufacturing

yarn manufacturing

FACTORS OF PRODUCTION

Cotton is an economic asset of Pakistan, it is a natural fiber used

primarily as a raw material in textile industry. • The World cotton production is estimated at

118.8 million bales in 2007-2008.

Leading producers of cotton include USA, China, India, Pakistan, Uzbekistan and Turkey. •

Both Punjab and Sindh are the major cotton growing provinces, where as N.W.F.P is not

known for growing cotton production. Cotton was primarily used as a raw material in yarn

manufacturing but the growing demand for blended yarn and fabrics has shifted the raw

material source towards the man made or synthetic fiber in Pakistan.• Pakistan usage is

currently at 74% cotton and26% manmade fiber, whereas the world fiber mix is 45% cotton

and 55% non-made fiber.

SPINNING

Spinning is the process of converting fibers into yarn. • The fibers maybe natural

fibers such as cotton or manmade fibers such as polyester. • Sometimes, the terms spinning is

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also used for production of manmade yarn (that is not made for fibers). • What so ever is the

case the final product of spinning is yarn

SPINNING SECTOR

Blowing and mixing

Carding

Combining

Drawing

Simplex

Ring Spinning

Cone Winding

Weaving

Wrapping

Sizing

Weaving

Textile Value Chain Process

Cotton value chain starts from Ginning that adds value to it by

separating cotton from seed and impurities. But Spinning can rightly be called as the first

process of the chain that adds value to cotton by converting in to a new product i.e.

conversion from ginned cotton in to cotton yarn. • Since spinning is in the beginning of value

chain, so all the later value added processes of weaving, knitting, processing, garments and

made-ups manufacturing are dependent upon it.

PROBLEMS FACED BY TEXTILE INDUSTRY

Lack of Research and Development in Cotton

Sector Lack of Modernize equipment• Finance bill to burden industry further• Increasing cost

of production• Internal issues Pose a Larger Threat for Pakistan’s Textile Industry. Effect of

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inflation , Energy crisis Electricity crisis, Gas shortage, tight monitory policy, Removal of

subsidy on textile sector lack of new investment, raw material prices and export performance

of textile sector.

SPECIAL ORGANIZATION

All Pakistan Textile Mills Association (APTMA) is the chief

organization that determines the rules and regulations in the Pakistan textile industry APTMA

is the premier national trade association of the textile spinning, weaving and composite

emails. APTMA represents 391 textile mills out of which 309 are spinning, 45 weaving and

37 composite units.

1.1 OVERVIEW OF THE ORGANIZATION

The Monnoo Family is a traditional name in Pakistan that has been the story of success for

the industrial growth of the country. A name that unique stands out as the pioneer industrial

family that has played a significant role in the growth of the economy.

The growth of the Group down through the decades has played a positive role in dominating

the local industry and providing a secure future for its employees. The transformations

brought about in the local industries by the Monnoo Group have made them pioneers in the

technological and customer oriented business conglomerates.

The Group now owns 12 Textile units, a Sugar Mill, Agricultural Farms and extensive

research units catering to various agricultural products. As innovators in their fields, the

Group has kept pace with the latest state of the art technologies, through which the Group

now produces superior international quality products for clients worldwide. The Monnoo

Group has developed with remarkable speed from a traditional, family owned textile

company into a modern high-tech industrial and agricultural conglomerate. The core business

of Monnoo Group is international product recognition in Textiles (Yarns, Ecru yarn,

Fancy/Novelty yarns, Melange Yarns and sewing threads) and in Agriculture products

(Sugar, Tissue Culture, Orchards and Farms).With outstanding growth and development in

yarns and bringing about innovations in fancy yarns, they have one of the most sophisticated

and modern mills in Pakistan.

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After Partition, their acquisition of a rubber factory was traded for an old textile mill,

installed with a total of 2400 spindles. By the year 1965 the group had a total number of 5

textile mills. During the troubled time of partition of the sub-continent, the Monnoo family

shifted to East Pakistan and later on set up five Spinning mill operations, 3 in West Pakistan

and 2- in East Pakistan.

A number of companies associated with the group are serving the country since its inception

and are indeed amongst the pioneers of the spinning industry in Pakistan. Beginning with one

spinning mill to 12 spinning mills consisting of more than 200,000 spindles with over 8000

employees. Most of the companies associated with the group are leaders in the areas of their

activity, and have been ISO Certified.

1.2 PROJECTS

The Lahore Textile & General Mills Ltd-I

The Lahore Textile & General Mills Ltd-II

Tribal Textile Mills Ltd.

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http://www.monnoo.com/





Rawal Textiles Mills Ltd.

Qureshi Textile Mills Ltd.

Olympia Blended Fiber Mills Ltd.I

Olympia Blended Fiber Mills Ltd.II

Monnoowal Textile Mills Ltd.

Monnoo Industries Ltd.

Marghalla Textile Mills Ltd.I

Marghalla Textile Mills Ltd.II

Jamhoor Textile Mills Ltd

1.3 COMPANY PROFILE

Mr., Kaiser Alam Monnoo Founder

Mr., Shahzada Alam Monnoo President

Mr., Jehangir Alam Monnoo Chairman

Mr., Danish k Monnoo Managing Director

Mr., Shahbaz A Monnoo Board of Director

Mr., Shahraz J Monnoo Board of Director

1.4 HEAD OFFICE

Monnoo Group of Industry,

Monnoo House,

3-Montgomery Road,

Lahore-Pakistan.

Website: http://www.monnoo.com

Telephone: +92 42 6364412

FAX: +9242 6364431

E-mail: [email protected]

1.5 BUSINESS VOLUME

The Lahore Textile & general Mills Ltd has Authorized capital of 4,000,000 shares @ 10

each. And the total number of issued shares is 30,000,000 @ 10 each.

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Type of Organization: Private Limited

Directors 6

Employees: 744

Company’s Website: Website: http://www.monnoo.com

Head Office: Monnoo House (Lahore)

Revenue (Operating) 94.90 Million

Revenue Net: Rs. 22,537,042

1.6 COMPETITORS

KOHINOR TEXTILE MILLS LTD

NISHAT TEXTILE MILLS

PAK KUWAIT TEXTILES LTD

PROSPERITY WEAVING MILLS LTD

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MAHMOOD TEXTILE MILLS LTD

MASCO SPINNING MILLS (PVT) LTD

MASTER TEXTILE MILLS LIMITED

MIMA COTTOM MILLS LTD

DAWOOD SPINNING MILLS (PVT) LTD

DEWAN FAROOQUE SPINNING MILLS LTD

DIN TEXTILE MILLS LTD

ICC TEXTILES LIMITED

A.A. COTTON MILLS LTD

AFZAL SPINNING MILLS (PVT) LTD

TANVEER COTTON MILLS (PVT) LTD

TAXILA COTTON MILLS LTD

CHAPTER NO.2

ORGANIZATIONAL STRUCTURE/HIERARCHY

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2.1 MISSION STATEMENT OF COMPANY

To be the business house of first choice for customers.

To be a change leader.

To produce innovative, relevant and cost effective products.

Setting and maintains high standards.

To earn profits by achieving optimum level of production by using state of the art

technologies.

To provide ideal working conditions to employees and to take care in their career

planning and reward them according to their skill and responsibility.

To meet social and cultural obligation towards the society being a patriotic and

conscientious corporate citizen.

2.1 ORGANIZATIONAL HIERARCHY STRUCTURE

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MANAGINGDIRECTOR

Mr, Danish K Monnoo

Board of Director

Mr,Shahbaz A. Monnoo

Board of Director

Mr,Shahraz J. Monnoo

2.3 INTRODUCTION OF DEPARTMENTS

Monnoo Group of Industry has a well & organized structure of department. They are linked

with each other and work together to achieve organizational goals. For the continuity of

Operations the relative information flows from one department to other in the following

sequence.

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DirectorFinance

Mr. Kamal Pasha

Director Taxation

Mr. Muhammad Taj

Director Admin

Mr. Malik Nawaz

Director Marketing

Mr. Zafar Iqbal

Manager Operation Manager Tax Admin Manager Marketing Manager

Accountant

Asst. Accountant

Tax Officer Admin Assistant

Marketing Officer Marketing Officer Marketing Officer

Asst. Marketing

Manager

C.C.Accounts

Mr.Ali Raza Java

Deputy Controller

Accounts

Deputy Controller

Accounts

Accounts Officer Accounts Officer Accounts Officer Accounts Officer

Sales &Marketing Department

S&M department of the company is very important department for the company. It consists

of Department working together to generate Accurate and Update information for the other

departments.

Marketing activities and advertisement are handled by this department. Allocation of

advertisement and marketing budgets is also maintained in the S&M department.

All sales force of the company is directly linked to this department. Assigning targets to the

sales force is decide by this department. Generation of salaries for the sales department is also

done in this department.

Throughout distribution of the firm is being handled by this department.

One other major task is the generation of Sales Forecast Report through marketing

information. All this information is generated on 15 days or Monthly basis.

Production Department

Production department is responsible for the entire production activities of the companies.

Packing, department works under the supervision of the Production Department.

After receiving the Sales Forecast report from S&M department Production department then

start working. This department generates material requirement report depending on sales

forecast. Which is sent to operation Department and a copy is sent to Director Production.

This department also generates the daily basic reports like BOM (Bill of Materials),

Production Plans, Production Reports, Production Transfer Notes (PTNs) and Work in

Process Repots.

Store Department

Store Department consists of Finished Goods and Raw & Packing Material Stores. It is

supervised by Store Manager, Store Keeper and 8-10 Helpers.

Store Department (SD) after receiving Material Requirements Report generates the report of

Balances in hand reports and material demand reports according to the need of production

department, which is then sent to Purchase department.

Beside all SD daily receives the Production plan along with BOMs. It makes demand, on the

basis of this BOM, which is also sent to Purchase Department. SD Issues raw material and

packing material on the basis of Material Requisition notes. This issue is then instantly

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entered in the company’s computer software. Reports like daily issuance are provided to the

Director Purchase and Store.

SD has adopted perpetual inventory system. And inventory audit is conducted once or twice

in the SD.

Operation Department

Operation department receive all the raw material reports from production department and

arrange raw material and forecast for estimated raw material used for production within

month and arrange it , operation department make monthly budgets and deal with banks for

managing the funds or revenues of the company ,in operation departments all payments are

issued to the suppliers and receive from customers and manage funds for all activities ,audit

department thoroughly check all the activities of operation department, and report to the

board of directors in operation department monthly tax returns and annual returns are

submitted to FBR,

Purchase Department

Material requirements reports along with the stock in hand report is received by the purchase

department. This report is then updated with rates and prices and an estimated budget is

maintained.

Other Documents like Generation of Purchase Orders (PO). Purchase department also

negotiate with suppliers to ensure the availability of Material.

Accounts & Finance Department

Accounts department typically handle a variety of important tasks. Such tasks include

invoicing customers, accounts receivable monitoring and collections, account reconciliations,

payables processing, consolidation of multiple entities under common ownership, budgeting,

periodic management reporting as well as financial analysis

Accounts and Finance receives the budgets from purchase department and represent it to the

director finance and get approval for it.

All the basic transaction is recorded on daily basis in this department in the company’s

software “Oracle data base”.

This department is also responsible for the management and bookkeeping of company funds.

These funds may include accounts payable and receivable.

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Finance department is responsible for whole financing activities of the company. This

department is responsible for keeping track of all sales and capital spending at a business.

This department also provides management with a profit-and-loss statement that will show

the overall strengths or weaknesses of a business. It is also responsible for the preparation and

compilation of budget estimates and all matters related to banks and banking institutions.

Matters related to creation of posts, fixation of pay and grants. This department also works as

an advisory on all matters relating to pay and Allowances, Pension and General Financial

Administration. Tax and non-tax revenues are also handled by the finance department.

Beside all these primary departments some other departments like Quality Control, R & D

department are also working in the company.

I.T Department:

IT department is also working in the firm. Its main objectives are to enable the firm’s

information available at a very low cost. Oracle Data Base is being used by the firm. A

considerable amount is spent to enhance the information technology level in the firm. Goals

oriented reports are being generated by the firm.

Comments on Organizational Structure

In my opinion the structure adopted by the firm is very effective. All departments are linked

with each other and they are working to the strategic goals of the firm. However the firm is

highly centralized. However some departments like operation department is very important in

nature. The environment of the company is free from any politic and intrusion. Whole of the

management is professional and supportive.

CHAPTER NO.3

PRODUCT(S) INTRODUCTION

3.1 MAJOR PRODUCTS

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The Lahore textile & general mills ltd-I is dealing in multiple yarn Products due to which it

has number of competitors for its product.

Product lines of LTGM are:

i. 24/1 PV 95%,5%

ii. 34/1 PV 95%,5%

iii. 44/1 PV 95%,5%

iv. 30/1 PC 65%,35%

v. 60/1 PV 90%,10%

vi. 10/1 PV/PC WASTE

vii. 27/1 PC 65%,35%

viii. VISCOSE 100 %

ix. 24/1 100% POLY

x. 30/1 100 % COTTON

3.2 DETAIL OF PRODUCT

3.2.1 24/1 pv 95 %, 5 %

4 single pv yarn is the blend of polyester & viscose fiber in this

count 95 % polyester and 5% viscose are used to make the fine quality yarn.

3.2.2 34/1 pv 95 %, 5 %

34 single pv yarn is the blend of polyester & viscode in this yarn 95,5 % blend is

used but 34 single count is thinner then 24 single pv.

3.2.3 44 single pv 95 %, 5 %

44 single pv yarn is the blend of polyester & viscode in this yarn 95,5 %

blend is used but 44 single count is thinner then 34 single pv.

3.2.4 30 single pc 65 %, 35 %

30 single pc yarn is the blend of polyester & cotton in this yarn 65,%

polyester and 35 % viscose is used but 30 single count is thicker then 34 single pv .

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3.2.5 60/1 PV 90%,10%

60 single pv yarn is the blend of polyester & viscose in this yarn 90 %

polyester and 10 % viscose used. 60 single count is thinner then 44 single pv and fine than 44

single.

3.2.6 10/1 PV/PC WASTE

10 single pv or pc waste yarn is blend of polyester and viscose or

polyester and cotton, useable waste of cotton,polyester & viscose is used for this count , 10

single waste is thickest than all the counts and 10 single waste yarn is used to make curtain

clothes,bed sheets and jeans.

3.2.7 Viscose 100 %

In this count of yarn we use only viscose 100 % for the fine quality of

yarn, this count is used for silk clothes & ladies fabric.

3.2.8 24/1 100% POLY

In this count of yarn we use only polyester 100 % for the fine quality of yarn,

this count is also used for silk clothes & ladies fabric.

3.2.9 30/1 100 % COTTON

In this count of yarn we use only cotton 100 % for the fine quality of

cotton clothes for both gents & ladies fabric.

CHAPTER NO.4

JOB DESCRIPTION

I did my job at “MONNOO HOUSE” (HO) situated at 3 Montgomery road Lahore, in the

department of Operation and Finance for The Lahore Textile & general mills Ltd-1. This

plant is engaged in the production of yarn. Security level is better and special quality

measures are adopted here. About 600-700 hundred labor is employed here. Dispatches to

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different countries are made from here. Salaries and other documentation are also kept in this

branch. The working is very hard here and the employees are all very honest to the industry.

Following heads are deal in my working field like,

Dealing with bank

Bank reports

Documentation of pledge & release

Documentation of L/C’s

Making purchase orders & sale orders

Suppliers & customer ledger

Salary

Reconciliation

Raw material buying coordination

Submission of monthly and annual tax return

Monthly budgets of operation

Payments of suppliers

Coordination & costing of spin plan.

CHAPTER NO.5

SWOT ANALYSIS

STRENGTH:

availability of raw material in bulk

cheap labor is easily available

many manufacturing facilities are available

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Growing economy and domestic market

Own resident are

DETAIL OF STRENGTH

Our company (Monnoo group of industries) use synthetic fiber which is easily

available in Pakistan in bulks because it’s produced in Pakistan different groups is

produced synthetic fiber like ICI PAKISTAN LTD, IBRAHIM FIBER LTD etc.

Units are located in near the big cities of Pakistan and cheap labour is easily available

Our company has its own power generation plant which is run on gas and Furnas oil

and all the parts of machines are easily available in market in Lahore.

Our company mostly sale yarn in Faisalabad, Lahore Karachi market expand its

business in globally, our company has its own resident colony for labour and

employees.

WEAKNESSES;

Lack of research & development department

Lack of modern technology

Lack of APTMA interest in innovation of textile product

Political instability and terrorism

DETAIL OF WEAKNESS

Our company does not work on research & development of textile products because

in our group R & D department has not located. Therefore our company has not

adopted new modern technology and APTMA (All Pakistan Textile Mills

Association) does not work on the research & development of textile industries, now a

day in our country political instability and terrorism effect the textile industries.

OPPORTUNITIES;

Benefit in cost reduction

Own dying mill facility

New technology

DETAIL OF OPPERTUNITIES

Our company has an opportunity to adopt the new modern technology to reduce the

cost of production and make better quality yarn; our group has its own yarn and fiber dying

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mills and its big opportunity to expand the color scheme of fiber and clothing in the market to

earn a huge market share.

THREAT

Threat of uncertain rising in tax percentage

Power & Gas shortage

New entrant

DETAIL OF THREAT

Textile industries has a major threat of power and gas shortage and other power

generation factor are so expensive, tax are rising day by day which are effect the profit of

company and mill owners are transfer his investment to other countries like U.A.E,

BANGLADAISH etc.

New entries in the industries of textile reduce the market share because producer are in large

number but the market is not expand therefore textile industry has threat in future.

6.1 RATIO ANAYSIS

1. Current Ratio

Step 1: formula

Current Assets

Current Liabilities

Step 2: Calculation

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Year 2011 Year 2012 Year 2013

721,504,557

868,879,280

679,638,429

918,863,452

571,779,071

771,283,513

0.083 times 0.739 times 0.741 times

Step 3: Working

Balance sheets show current assets and current liabilities.

Step 4: Interpretation

i. The above ratio calculation indicates that the current ratio of the company is

improving as it has moved from lower to higher i.e. 0.083 times to 0.741 times.

ii. It was lower in 2011 and moving up to 0.741 times in 2013.

iii. The overall performance of the company has improved as there is increase in

current assets as compared to liabilities.

2. Acid test Ratio

Step 1: formula

Current Assets– Prepaid Expenses

Current Liabilities

Step 2: Calculation

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721,504,557 – 450,465,986

868,879,280

679,638429 – 456,322,606

918,863,452

571779071 -385,734,214

771,283,513

271,038,571

868,879,280

223,315,823

918,863,452

186,044,857

771,283,513

0.312 or 31 % 0.243 or 24 % 0.241 or 24 %

Step 3: Working

Balance sheets show current assets, current liabilities and prepaid expenses (Advances,

deposits and prepayments)

Step 4 Interpretation

i. The calculation shows that ability of a company to pay short term liabilities

without considering their inventory is decreasing

ii. Without considering their inventory is decreasing.

3. Working Capital

Step 1: formula

Current Assets – Current Liabilities

Step 2 Calculation


721504557-868879280 679638429 - 918863452 572,779,071 – 771,283,513

-147,374,723 Rs -239,225,023 Rs -198,504,442 Rs

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Step 3 Working

Balance sheets show current assets and current liabilities.

Step 4 Interpretation

i. The calculation shows that the working capital of the firm is increasing this is also

good indicator.

ii. Working capital is positive and there is gradual increase in it.

Company’s performance is better as compare to previous years which mean that

company is able to pay off its short-term liabilities.

4. Time Interest Earned

Step 1: formula

EBIT

Interest Paid

Step 2: Calculation


57658682

153,310,715

-98,277,791

108,803,391

18,891,556

93,738,557

0.376 times (0.903)times 0.202 times

Step 3: Working

Profit & loss statements show the EBIT (operating profit/ (loss)) and interest paid

(financial charges).

Interpretation

i. Time interest ratio of the company is in 2011 i.e. 0.376 and decrease i.e. (0.903) in

2012 but in 2013 it is again increasing i.e. 0.202.

29

ii. Company’s performance decrease while entering into 2012 but with the arrival of

2013 it increases.

5. Debt Ratio

Step 1: formula

iii. Total Debt

iv. Total Assets

Step2: Calculation


739765937

1605300152

698830061

1689370450

664295293

1561398533

0.46 0.42 0.43

46% 42% 43%

Year 2011

= current portion of long term loan +Short term loan+ liabilities against finance lease

120743149+570681399+48341389=739765937

Year 2012

= current portion of long term loan +Short term loan+ liabilities against finance lease

154059194+542832636+1938231= 698830061

Year 2013

== Current portion of long term loan +short term loan+ liabilities against finance lease

145274158+517702692+1318443=664295293

In company balance sheets show

Total assets

Year 2011 =1605300152

Year 2012 =1689370450

30

Year 2013 =1561398533

Step 4: Interpretation:

i. The calculation shows that debt ratio decreases gradually from 46 % to 43 %.

ii. The debt ratio was 46 % in 2011, 42 % in 2012 and 43 % in 2013.

iii. The overall company’s performance is becoming better as compare to previous

years.

6: Net Profit Margin

Step 1: formula

Net Profit X 100

Net Sales

Step 2: Calculation:


57,658,682 X 100

2,326,654,598

(98,277,791) X 100

2,086,280,148

18,891,556 X 100

2,087,577,403

2.48 % - 4.71 % 1.11 %

Step 3: Working:

PROFIT AND LOSS STATEMENT 2013 2012 2011

FOR THE PERIOD ENDED JUNE 30, Note RUPEES RUPEES RUPEES

RUPEES

Net Sales 2,087,577,403 2,086,280,148 2,326,654,598

Cost of sales 24 1,930,731,530 2,055,328,235 2,119,934,575

79.32

31

Gross profit 156,845,873 30,951,913 206,720,023

Less: Operating expenses:

5.18 6.96

Administrative 61,942,765 40,819,926 32,186,661

Selling 14

5.69 5.86

Operating profit/(loss) 94,903,108 (9,868,013) 174,533,362

Financial charges 15 93,738,557 108,803,391 153,310,715

Other income 19,461,162 20,393,613 40,709,342

4.45

Profit/(loss) before tax( NET

PROFIT) 18,891,556 -98,277,791 58,835,390


i. The above calculation shows that profit margin was 2.48 % in 2011 which is high

as compared to year 2012 and 2013.

ii. It depicts that the firm profit margin is not constant in last three years but was low

in 2012.

iii. Overall performance is average

Gross Profit Margin:

Step 1: formula

Gross Profit

Net Sales


32


206,720,023

2,326,654,598

30,951,913

2,086,280,148

156,845,873

2,087,577,403

0.089 or 8.89 % 0.015 or 1.5 % 0.075 or 7.51 %

Step 3: Working:


FOR THE PERIOD ENDED JUNE

30, Note RUPEES RUPEES RUPEES

RUPEES

Net Sales

2,087,577,40

3

2,086,280,14

8

2,326,654,59

8

Cost of sales

1,930,731,53

0

2,055,328,23

5

2,119,934,57

5

79.32

Gross profit 156,845,873 30,951,913 206,720,023


i. The above calculation shows that gross profit margin is 8.89 % in 2011 and

decrease in 2012but in 2013 gross profit margin is increase...

ii. However ratio is growing as compared to 2012 therefore performance is better.

8. Return on Assets (ROA)

Step 1: formula

Net Profit

Total Assets

33



57,658,,682

1,065,300,152

(98,277,791)

1,689,370,450

18,891,556

1,561,398,533

0.054 or 5.4 % -0.058 or (5.8) % 0.012 or 1.2 %

Step 3: Working:


Total assets

Year 2011 =1,065,300,152

Year 2012 =1,689,370,450

Year 2013 =1,561,398,533

Net profit( Profit/(loss) before tax)

Year 2010 =57,658,682

Year 2011 = (98,277,791)

Year 2012 =18,891,556

Step 4: Interpretation:

i. The above calculation shows that firm ROA was 5.4 % in 2011, decreased in 2012

and again increased in 2013

ii. In 2011, company was earning more money on less investment as ROA became

increased and performance was going better but again became decreased in 2012.

9. Operating Income Margin

Step 1: formula

Operating Profit X 100

Net Sales

34



174,533,362 X 100

2,326,654,598

(9,868,013) X 100

2,086,280,148

94,903,108 X 100

2,087,577,403

0.075 (0.047) 0.045

7.5 % (4.7) % 4.5 %

Step 3: Working:


FOR THE PERIOD ENDED JUNE 30, Note RUPEES RUPEES RUPEES

RUPEES

Net Sales

2,087,577,40

3 2,086,280,148 2,326,654,598

Cost of sales 24

1,930,731,53

0 2,055,328,235 2,119,934,575

79.32

Gross profit 156,845,873 30,951,913 206,720,023

Less: Operating expenses:

5.18 6.96

Administrative 61,942,765 40,819,926 32,186,661

Selling 14

5.69 5.86

Operating profit/(loss) 94,903,108 (9,868,013) 174,533,362


35

i. The calculation shows that Operating income margin of the company decreased in

2012 as 4.7 % which is very unhealthy as compare to the year 2011 and increase in

2013.

ii. It is a good indicator for company

10. Assets Turnover Ratio

Step 1: formula

Sales

Total Assets



2,326,654,598

1,605,300,152

2,086,280,148

1,689,370,450

2,087,577,403

1,561,398,533

1.15 or 115 % 1.23 or 123 % 1.34 or 134 %

Step 4: Working:

In company profit & loss statements show

Net sales

Year 2011 = 2,326,654,598

Year 2012 = 2,086,280,148

Year 2013 = 2,087,577,403


Total assets

Year 2011 =1,605,300,152

Year 2012 =1,689,370,450

Year 2013 =1,561,398,533

Step 5: Interpretations:

i. The calculation shows that ratio is 1.15 in 2011 and has increased to 1.34 in 2013.

36

ii. It depict that the capability of company in utilizing its assets to produce revenue is

increased in 2013

iii. Overall performance became better

11. Operating Cash Flow Ratio:

Step 1: formula

Operating Cash Flow Ratio = Operating Cash Flow / Current Liabilities

13. Dividend per Share

Monnoo Group of Industry does not have Shares to issue in market. So I couldn’t perform

calculation.

14. Earnings per Share

Monnoo Group of Industry does not have Shares to issue in market. So I couldn’t perform

calculation.

RESULTS OF RATIO ANALYSIS

37

http://www.investinganswers.com/financial-dictionary/businesses-corporations/current-liability-5247

SR # RATIO YEAR 2011 YEAR 2012 YEAR 2013

1 Current Ratio 0.083 0.739 0.741

2 Acid Test Ratio 0.312 or 31% 0.243 or 24% 0.241 or 24 %

3 Working Capital (147374723) (239225023) (198504442)

4Time Interest

Earned0.376 (0.903)

0.202

5 Debt Ratio 0.46 or 46% 0.42 or 42% 0.43 or 43 %

6 Net Profit Margin 2.48 % (4.71) % 1.11 %

7Gross Profit

Margin0.089 or 8.89 % 0.015 or 1.5 % 0.075 or 75 %

8 Return On Assets 0.054 or 5.4 % (0.058) or 5.8 % 0.012 or 1.2 %

9Operating Income

Margin0.075 or 7.5 0.047 or 4.7 % 0.045 or 4.5 %

10Assets Turnover

Ratio1.15 or 115 % 1.23 or 123 % 1.34 or 134 %

6.2 VERTICAL ANALYSIS

38

BALANCE SHEET

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Authorized

4,000,000 ordinary shares of Rs. 10/- each. -- -- --

Issued subscribed and paid up 1.86% 1.77% 1.92%

Revenue Reserve (9.27%) (15.37%) (14.77%)

(7.40%) (13.59%) (12.84%)

Surplus on revaluation of fixed assets 26.47% 34.66% 37.08%

NON CURRENT LIABILITIES

Due to directors 14.25% 13.54% 14.65%

Long term loans 7.52% 9.11% 9.30%

Liabilities against assets subject to finance lease 3.01% 0.11% --

Long term deposits 0.082% 0.038% 0.084%

Staff retirement benefits – gratuity 1.93% 1.72% 2.32%

28.80% 24.54% 26.36%

CURRENT LIABILITIES

Short term loans and bank borrowing 35.54% 32.13% 33.15%

Current maturity and over dues Installments of

long term liabilities1.00% 1.71% 0.28%

Creditors, Accrued & other liabilities 12.35% 14.35% 9.00%

Taxation 5.21% 6.18% 6.95%

54.12% 54.39% 49.39%

CONTIGENCIES AND COMMITMENTS

100% 100% 100%

39

VERTICAL ANALYSIS BALANCE SHEET

ASSETS

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

NON- CURRENT ASSETS

Property plant and equipment 62.40% 59.68% 54.94%

Capital work in progress -- -- --

Long term deposits 0.083% 0.088% 0.11%

62.48% 59.76% 55.05%

Deferred Tax Assets 0.89% -- --

CURRENT ASSETS

Stores and spares 0.99% 1.18% 1.15%

Stock in trade 6.49% 8.35% 10.65%

Trade debtors 1.35% 1.09% 3.23%

Advances deposits and prepaid 24.70% 27.08% 28.06%

Cash and bank balances 3.06% 2.59% 1.83%

36.61% 40.23% 44.94%

100% 100% 100%

40

VERTICAL ANALYSISPROFIT AND LOSS ACCOUNT

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

Sales 100% 100% 100%

Cost of sales 91.11% 98.51% 92.48%

Gross profit 8.88% 1.48% 7.51%

Administrative expensive 1.38% 1.95% 2.96%

Operating profit 7.50% (0.47%) 4.54%

Finance cost 6.58% 5.21% 4.49%

Other income 1.74% 0.97% 0.93%

2.66% (4.71%) 0.98%

Workers profit participation fund 0.13% -- 0.049%

2.52% (4.71%) 0.93%

Workers welfare fund 0.05% -- 0.033%

Profit / (Loss) before taxation 2.47% (4.71%) 0.90%

Provision for taxation (1.05%) (0.99%) 0.17%

Profit / (Loss) after taxation 1.41% (5.70%) 1.07%

Loss per share – basic diluted 0.000000472% (0.000001902%)

41

VERTICAL ANALYSISSTATEMENT OF COMPREHENSIVE INCOME

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

Profit / (Loss) after taxation 96.84% (93.55%) 141.26%

Other comprehensive income

Incremental depreciation revaluated assets for 3.15% (6.44%) (41.26%)

Total comprehensive income for the year. 100% 100% 100%

42

6.3 HORIZENTAL ANALYSIS

Formula 1:Dollar Change= Amount of the item in comparison year-Amount of the item in base yearFormula 1: Dollar Change/ Amount of the item in base year*100Note = We take 2011 as base year for whole computation,

BALANCE SHEET EQUITY AND LIABILITIES 2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

SHARE CAPITAL AND RESERVES

Authorized

4,000,000 ordinary shares of Rs. 10/- each. 100% 100% 100%

Issued subscribed and paid up 100% 100% 100%

Revenue Reserve 100% 74.48% 54.91%

Surplus on revaluation of fixed assets 100% 37.78% 36.23%

93.27% 68.77%

NON CURRENT LIABILITIES

Due to directors 100% 100% 100%

Long term loans 100% 27.5% 20.3%

Liabilities against assets subject to finance lease 100% (95.9%) --

Long term deposits 100% (50.2%) 0.078%

Staff retirement benefits – gratuity 100% (6.0%) 16.9%

CURRENT LIABILITIES

Short term loans and bank borrowing 100% (4.8%) (9.2%)

Current maturity and over dues Installments of

long term liabilities 100% 79.78% (72.91%)

Creditors, Accrued & other liabilities 100% 22.26% (29.14%)

Taxation 100% 29.69% 24.84%

100% 5.75% (11.23%)

43

CONTIGENCIES AND COMMITMENTS 100% 5.23% (2.73%)

HORIZENTAL ANALYSISBALANCE SHEET

ASSETS 2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

NON- CURRENT ASSETS

Property plant and equipment 100% 14.31% 10.47%

Capital work in progress -- -- --

Long term deposits 100% (18.14%) (29.13%)

100% 14.24% 10.39%

Deferred Tax Assets -- -- --

CURRENT ASSETS

Stores and spares 100% 8.27% (16.38%)

Stock in trade 100% (17.53%) (40.17%)

Trade debtors 100% (64.56%) (59.21%)

Advances deposits and prepaid 100% 1.30% (14.36%)

Cash and bank balances 100% 48.57% 62.72%

100% (5.80%) (20.75%)

100% 5.23% (2.73%)

44

HORIZENTAL ANALYSISPROFIT AND LOSS ACCOUNT

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

Sales 100% (10.33%) (10.27%)

Cost of sales 100% (3.04%) (8.92%)

Gross profit 100% (85.02%) (24.12%)

Administrative expensive 100% 26.82% 92.44%

Operating profit 100% (105.65%) (45.62%)

Finance cost 100% (29.03%) (38.85%)

Other income 100% (49.90%) (52.19%)

100% (258.68%) (66.69%)

Workers profit participation fund 100% -- (66.69%)

100% 267.03 (66.69%)

Workers welfare fund 100% -- (40.26%)

Profit / (Loss) before taxation 100% (270.44%) (67.23%)

Provision for taxation 100% (15.65%) (85.21%)

Profit / (Loss) after taxation 100% (460.83%) (31.70%)

Loss per share – basic diluted -- -- --

45

HORIZENTAL ANALYSISSTATEMENT OF COMPREHENSIVE INCOME

2011

Increase or

(Decrease)

2012

Increase or

(Decrease)

2013

Increase or

(Decrease)

Profit / (Loss) after taxation 100% (247.99%) (71.99%)

Other comprehensive income

Incremental depreciation revaluated assets for 100% (412.60%) 150.94%

Total comprehensive income for the year. 100% (253.19%) (80.79%)

46

CHAPTER NO.7

7.1 Recommendations and Conclusion

The Monnoo is losing its benefits in lower raw material prices, while energy cost and credit cost have increased considerably. There is a need to check the trend of further increases both by policy, support by the Government and it self. The major challenges are to enhance the competitiveness of the mill, which have been created on account of internal weaknesses to improve quality productivity and production efficiency to be desired levels.

The Suggestions That Particularly Relate To the Monnoo Are As Followings; Allocating a specific budget should enhance the promotional activities of Monnoo.

The company should control the financial charges especially commission to the agents should be controlled.

The cost of production of company should be controlled. The utilizing the plant capacity in full can reduce fixed cost.

The sale of company should increase by searching new markets. New product lines in fashion design and style should be launched. Political stability consistent government policy and government that remains for its

tenure. Lowering of energy costs to allow the industry to become more competitive.

7.1 Use of Promotional Tools

During the internship I observed that MONNOO GROUP OF INDUTRIES management is not used the promotional tools for the advertising. If MONNOO GROUP OF INDUTRIES used promotional tools like advertising, Personal selling, Publicity etc then they set more orders. This increased the profit of organization.

Reduced the Fixed Cost

During my internship I observed that management not utilized all the resources according to their capacity. If they used these resources properly then they get more production by using these resources.

Search New Market

47

Organization can enhance profit by finding new market in the country. Marketing department is responsible for finding new market in the world. MONNOO GROUP OF INDUTRIES has opportunity to find new market due to their quality product.

48

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