1

INTERNSHIP REPORT ON
MONNOO GROUP OF INDUSTRIES

Prepared by:
Name:

Farhan Ali

Class:

M. Com.

Roll No.:

1276

Session:

2012-2014

Registration No.:

2012-GCUF-08275

COLLEGE OF COMMERCE
GOVERNMENT COLLEGE UNIVERSITY, FAISALABAD

SCANNED COPY OF INTERNSHIP CERTIFICATE

INTERNSHIP REPORT COMPLETION CERTIFICATE
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
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.

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 CONTENTS
5

CH#

DESCRIPTION

Page#

1
1.1

INTRODUCTION & BACKGROUND

Business Sector Introduction

1.2

Overview of the Organization

13

1.3

Projects of Monnoo Group of Industries

14

1.4

Company Profile

14

1.5

Business Volume

16

1.6

Competitors
ORGANIZATIONAL

17

2
2.1

STRUCTURE/HIERARCHY
Mission Statement

18

2.2

Organizational Hierarchy Chart

19

2.3
3

Introduction t All Departments

20

PRODUCTS(s) INTRODUCTION
Major Products

23

3.1
3.2
4
5
6

Details of Products

23
25
26

6.1

JOB DESCRIPTION
SWOT ANALYSIS
FINANCIAL STATEMENT ANALYSIS
Ratios Analysis

6.2

Vertical Analysis

40

6.3

Horizental Analysis

44

7
8

CONCLUSION
SUGGESTIONS & RECOMMENDATION

28

48

CHAPTER NO.1
ORGANIZATION INTRODUCTION
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

7

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

Info@monnoo.com

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
The textile industry is often considered the back bone of the Islamic Republic of Pakistans
economy. Pakistans 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
Pakistans 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. Pakistans industrialization
began in the 1950s with the textile industry at its center 1950s. 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.1960s
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 1996-97,1990s
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. Pakistans cotton cultivation has declined due to several
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. Pakistans $13.8 billion textile industry is
struggling to survive a critical shortage of energy to run its plants.2012
TEXTILE SECTORS 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
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

10

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
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

11

 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 Pakistans Textile Industry. Effect of
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.

12

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.
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

13

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.
Rawal Textiles Mills Ltd.

14

 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: Info@monnoo.com

15

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.

Private Limited

Directors

Employees:

Companys Website:

Type of Organization:

744

Website: http://www.monnoo.com

Head Office:

Monnoo House (Lahore)

Revenue (Operating)

94.90 Million

Rs. 22,537,042

Revenue Net:

16

1.6

COMPETITORS
KOHINOR TEXTILE MILLS LTD
NISHAT TEXTILE MILLS
PAK KUWAIT TEXTILES LTD
PROSPERITY WEAVING MILLS LTD
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

17

CHAPTER NO.2

ORGANIZATIONAL STRUCTURE/HIERARCHY

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.

18

 To meet social and cultural obligation towards the society being a patriotic and
conscientious corporate citizen.

2.1

ORGANIZATIONAL HIERARCHY STRUCTURE

MANAGING
DIRECTOR
Mr, Danish K Monnoo
Board of Director

Board of Director

Mr,Shahbaz A. Monnoo

Mr,Shahraz J. Monnoo

DirectorFinance

Director Taxation

Director Admin

Director Marketing

C.C.Accounts

Mr. Kamal Pasha

Mr. Muhammad Taj

Mr. Malik Nawaz

Mr. Zafar Iqbal

Mr.Ali Raza Java

Manager Operation

Manager Tax

Admin Manager

19

Marketing Manager

Accountant

Tax Officer

Admin Assistant

Asst. Marketing
Manager

Asst. Accountant

Marketing Officer

Accounts Officer

2.3

Marketing Officer

Marketing Officer

Deputy Controller

Deputy Controller

Accounts

Accounts

Accounts Officer

Accounts Officer

Accounts Officer

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.

20

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

21

entered in the companys 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.

22

All the basic transaction is recorded on daily basis in this department in the companys
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.
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 firms
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
23

PRODUCT(S) INTRODUCTION
3.1

MAJOR PRODUCTS

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
3.2.1

DETAIL OF PRODUCT
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 %

24

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 .

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.

25

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
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/Cs
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.

26

CHAPTER NO.5
SWOT ANALYSIS
STRENGTH:

availability of raw material in bulk

cheap labor is easily available
many manufacturing facilities are available
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 its 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)

27

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
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.

28

6.1

RATIO ANAYSIS

1. Current Ratio
Step 1: formula
Current Assets
Current Liabilities
Step 2: Calculation
Year 2011

Year 2012

Year 2013

721,504,557

679,638,429

571,779,071

868,879,280

918,863,452

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.
iii.

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

The overall performance of the company has improved as there is increase in
current assets as compared to liabilities.

29

2. Acid test Ratio

Step 1: formula
Current Assets Prepaid Expenses
Current Liabilities
Step 2: Calculation

Year 2011

Year 2012

Year 2013

721,504,557 450,465,986

679,638429 456,322,606

571779071 -385,734,214

868,879,280

918,863,452

771,283,513

271,038,571

223,315,823

186,044,857

868,879,280

918,863,452

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

30

Current Assets Current Liabilities

Step 2 Calculation
Year 2011

Year 2012

Year 2013

721504557-868879280

679638429 - 918863452

572,779,071 771,283,513

-147,374,723 Rs

-239,225,023 Rs

-198,504,442 Rs

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.

Companys 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
Year 2011

Year 2012

31

Year 2013

57658682

-98,277,791

18,891,556

153,310,715

108,803,391

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.

ii.

Companys performance decrease while entering into 2012 but with the arrival of
2013 it increases.

5. Debt Ratio
Step 1: formula
iii.
iv.

Total Debt
Total Assets

Step2: Calculation

Year 2011

Year 2012

Year 2013

739765937

698830061

664295293

1605300152

1689370450

1561398533

0.46

0.42

0.43

46%

42%

43%

Year 2011

32

= 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
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 companys 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:
Year 2011

Year 2012

Year 2013

57,658,682 X 100

(98,277,791) X 100

18,891,556 X 100

2,326,654,598

2,086,280,148

2,087,577,403

33

2.48 %

- 4.71 %

1.11 %

Step 3: Working:
PROFIT AND LOSS STATEMENT
FOR THE PERIOD ENDED JUNE 30,

Note

Net Sales

2013

2012

2011

RUPEES
RUPEES
2,087,577,40

RUPEES

RUPEES

2,086,280,14

2,326,654,59

3
1,930,731,53

Cost of sales

24

Gross profit

0
156,845,873

2,055,328,23
5 2,119,934,575
79.32
30,951,913 206,720,023

Less: Operating expenses:

Administrative
Selling

6.96
32,186,661

5.69

5.86

94,903,108

(9,868,013)

174,533,362

93,738,557

108,803,391

153,310,715

19,461,162

20,393,613

40,709,342

61,942,765
14

Operating profit/(loss)
Financial charges

5.18
40,819,926

15

Other income

4.45
Profit/(loss) before tax( NET
PROFIT)

18,891,556

Step 4: Interpretation

34

-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

Step 2: Calculation:
Year 2011

Year 2012

Year 2013

206,720,023

30,951,913

156,845,873

2,326,654,598

2,086,280,148

2,087,577,403

0.089 or 8.89 %

0.015 or 1.5 %

0.075 or 7.51 %

Step 3: Working:
PROFIT AND LOSS STATEMENT
FOR THE PERIOD ENDED JUNE
30,

2013

2012

2011

RUPEES

RUPEES

RUPEES

RUPEES
2,087,577,40

2,086,280,14

2,326,654,59

1,930,731,53

2,055,328,23

2,119,934,57

Note

Net Sales

Cost of sales

79.32
Gross profit

156,845,873

35

30,951,913

206,720,023

Step 4: Interpretation
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
Step 2: Calculation:
Year 2011

Year 2012

Year 2013

57,658,,682

(98,277,791)

18,891,556

1,065,300,152

1,689,370,450

1,561,398,533

0.054 or 5.4 %

-0.058 or (5.8) %

0.012 or 1.2 %

Step 3: Working:
In company balance sheets show
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

36

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
Step 2: Calculation:

Year 2011

174,533,362 X 100
2,326,654,598

Year 2012

Year 2013

(9,868,013) X 100

94,903,108 X 100
2,087,577,403

2,086,280,148

0.075

(0.047)

0.045

7.5 %

(4.7) %

4.5 %

Step 3: Working:
PROFIT AND LOSS STATEMENT
FOR THE PERIOD ENDED JUNE 30,

Note

Net Sales

2013

2012

2011

RUPEES
RUPEES
2,087,577,40

RUPEES

RUPEES

2,086,280,14

2,326,654,59

3
1,930,731,53

Cost of sales

24

Gross profit

0
156,845,873

37

2,055,328,23
5 2,119,934,575
79.32
30,951,913 206,720,023

Less: Operating expenses:

Administrative

61,942,765

Selling

5.18
40,819,926

6.96
32,186,661

5.69

5.86

(9,868,013)

174,533,362

14

Operating profit/(loss)

94,903,108

Step 4: Interpretation
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
Step 2: Calculation:
Year 2010

Year 2011

Year 2012

2,326,654,598

2,086,280,148

2,087,577,403

1,605,300,152

1,689,370,450

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

38

Year 2013 = 2,087,577,403

In company balance sheets show
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.

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 couldnt perform
calculation.
14. Earnings per Share
Monnoo Group of Industry does not have Shares to issue in market. So I couldnt perform
calculation.

39

RESULTS OF RATIO ANALYSIS

SR #

RATIO

YEAR 2011

YEAR 2012

YEAR 2013

Current Ratio

0.083

0.739

0.741

Acid Test Ratio

0.312 or 31%

0.243 or 24%

0.241 or 24 %

Working Capital

(147374723)

(239225023)

(198504442)

0.376

(0.903)

Time Interest
Earned

0.202

Debt Ratio

0.46 or 46%

0.42 or 42%

0.43 or 43 %

Net Profit Margin

2.48 %

(4.71) %

1.11 %

0.089 or 8.89 %

0.015 or 1.5 %

0.075 or 75 %

0.054 or 5.4 %

(0.058) or 5.8 %

0.012 or 1.2 %

0.075 or 7.5

0.047 or 4.7 %

0.045 or 4.5 %

1.15 or 115 %

1.23 or 123 %

1.34 or 134 %

10

Gross Profit
Margin
Return On Assets
Operating Income
Margin
Assets Turnover
Ratio

40

6.2

VERTICAL ANALYSIS
BALANCE SHEET
2011

2012

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

--

--

--

1.86%
(9.27%)
(7.40%)
26.47%

1.77%
(15.37%)
(13.59%)
34.66%

1.92%
(14.77%)
(12.84%)
37.08%

14.25%
7.52%

13.54%
9.11%

14.65%
9.30%

3.01%

0.11%

--

0.082%
1.93%
28.80%

0.038%
1.72%
24.54%

0.084%
2.32%
26.36%

35.54%

32.13%

33.15%

1.00%

1.71%

0.28%

12.35%
5.21%
54.12%

14.35%
6.18%
54.39%

9.00%
6.95%
49.39%

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Authorized
4,000,000 ordinary shares of Rs. 10/each.
Issued subscribed and paid up
Revenue Reserve
Surplus on revaluation of fixed assets
NON CURRENT LIABILITIES
Due to directors
Long term loans
Liabilities against assets subject to
finance lease
Long term deposits
Staff retirement benefits gratuity
CURRENT LIABILITIES
Short term loans and bank borrowing
Current maturity and over dues
Installments of long term liabilities
Creditors, Accrued & other liabilities
Taxation
CONTIGENCIES AND COMMITMENTS

41

100%

100%

100%

VERTICAL ANALYSIS
BALANCE SHEET
2011

2012

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

Property plant and equipment

62.40%

59.68%

54.94%

Capital work in progress

Long term deposits

-0.083%
62.48%

-0.088%
59.76%

-0.11%
55.05%

Deferred Tax Assets

0.89%

--

--

0.99%
6.49%
1.35%
24.70%
3.06%
36.61%

1.18%
8.35%
1.09%
27.08%
2.59%
40.23%

1.15%
10.65%
3.23%
28.06%
1.83%
44.94%

100%

100%

100%

2012

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

ASSETS
NON- CURRENT ASSETS

CURRENT ASSETS
Stores and spares
Stock in trade
Trade debtors
Advances deposits and prepaid
Cash and bank balances

VERTICAL ANALYSIS
PROFIT AND LOSS ACCOUNT
2011

42

Sales

100%

100%

100%

91.11%

98.51%

92.48%

Gross profit

8.88%

1.48%

7.51%

Administrative expensive
Operating profit

1.38%
7.50%

1.95%
(0.47%)

2.96%
4.54%

Finance cost

6.58%

5.21%

4.49%

1.74%
2.66%
0.13%
2.52%
0.05%
2.47%
(1.05%)
1.41%

0.97%
(4.71%)
-(4.71%)
-(4.71%)
(0.99%)
(5.70%)

0.93%
0.98%
0.049%
0.93%
0.033%
0.90%
0.17%
1.07%

0.00000047

(0.00000190

2%

2%)

Cost of sales

Other income
Workers profit participation fund
Workers welfare fund
Profit / (Loss) before taxation
Provision for taxation
Profit / (Loss) after taxation
Loss per share basic diluted

VERTICAL ANALYSIS
STATEMENT OF COMPREHENSIVE INCOME
2011
2012

Profit / (Loss) after taxation

Other comprehensive income

43

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

96.84%

(93.55%)

141.26%

Incremental depreciation revaluated

assets for
Total comprehensive income for the
year.

6.3

3.15%

(6.44%)

(41.26%)

100%

100%

100%

HORIZENTAL ANALYSIS

Formula 1:
Dollar Change=
Amount of the item in comparison year-Amount of the
item in base year
Formula 1:
Dollar Change/ Amount of the item in base
year*100
Note = We take 2011 as base year for whole computation,
BALANCE SHEET
EQUITY AND LIABILITIES
2011
2012
2013
Increase or

44

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

100%

100%

100%

Issued subscribed and paid up

Revenue Reserve

100%
100%

100%
74.48%

100%
54.91%

Surplus on revaluation of fixed assets

100%

37.78%
93.27%

36.23%
68.77%

100%
100%

100%
27.5%

100%
20.3%

100%

(95.9%)

--

100%
100%

(50.2%)
(6.0%)

0.078%
16.9%

100%

(4.8%)

(9.2%)

100%

79.78%

(72.91%)

100%
100%
100%
100%

22.26%
29.69%
5.75%
5.23%

(29.14%)
24.84%
(11.23%)
(2.73%)

2012

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

100%

14.31%

10.47%

-100%
100%

-(18.14%)
14.24%

-(29.13%)
10.39%

SHARE CAPITAL AND RESERVES

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

NON CURRENT LIABILITIES

Due to directors
Long term loans
Liabilities against assets subject to
finance lease
Long term deposits
Staff retirement benefits gratuity
CURRENT LIABILITIES
Short term loans and bank borrowing
Current maturity and over dues
Installments of long term liabilities
Creditors, Accrued & other liabilities
Taxation
CONTIGENCIES AND COMMITMENTS

ASSETS

HORIZENTAL ANALYSIS
BALANCE SHEET
2011

NON- CURRENT ASSETS

Property plant and equipment
Capital work in progress
Long term deposits

45

Deferred Tax Assets

CURRENT ASSETS
Stores and spares
Stock in trade
Trade debtors
Advances deposits and prepaid
Cash and bank balances

--

--

--

100%
100%
100%
100%
100%
100%

8.27%
(17.53%)
(64.56%)
1.30%
48.57%
(5.80%)

(16.38%)
(40.17%)
(59.21%)
(14.36%)
62.72%
(20.75%)

100%

5.23%

(2.73%)

2012

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

100%

(10.33%)

(10.27%)

(3.04%)

(8.92%)

(85.02%)

(24.12%)

HORIZENTAL ANALYSIS
PROFIT AND LOSS ACCOUNT
2011

Sales

100%

Cost of sales

100%

Gross profit
Administrative expensive
Operating profit

100%
100%

26.82%
(105.65%)

92.44%
(45.62%)

Finance cost

100%

(29.03%)

(38.85%)

Other income

100%

(49.90%)

(52.19%)

46

Workers profit participation fund

Workers welfare fund
Profit / (Loss) before taxation
Provision for taxation
Profit / (Loss) after taxation
Loss per share basic diluted

100%
100%
100%
100%
100%
100%
100%

(258.68%)
-267.03
-(270.44%)
(15.65%)
(460.83%)

(66.69%)
(66.69%)
(66.69%)
(40.26%)
(67.23%)
(85.21%)
(31.70%)

--

--

--

HORIZENTAL ANALYSIS
STATEMENT OF COMPREHENSIVE INCOME
2011
2012

Profit / (Loss) after taxation

2013

Increase or

Increase or

Increase or

(Decrease)

(Decrease)

(Decrease)

100%

(247.99%)

(71.99%)

100%

(412.60%)

150.94%

100%

(253.19%)

(80.79%)

Other comprehensive income

Incremental depreciation revaluated
assets for
Total comprehensive income for the
year.

47

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.

48

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

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.

49