Reliance Weaving Mills Ltd.

Khanewal Road, Multan
Submitted by: MUHAMMAD ADNAN MBA (Finance) Registration #: 22 Session 2009-11


Internship Report 1

Reliance Weaving Mills Ltd.

Internship Report


Reliance Weaving Mills Ltd.

It is with great respect that this work is dedicated to

whose blessings serve as inspiration to me without whom nothing would be possible.

Internship Report


Khalid Aziz. Mr. In the end. In addition.Reliance Weaving Mills Ltd. Muhammad (PBUH) Who blessed me with the potential and ability to complete this study. particularly deserve my deep and sincere gratitude for their cooperation. Adnan Nazir Internship Report 4 . my class-fellows. innocent smiles and love. I can do no more than reaffirm my devotions to all members of my family. and assistance during this research. ACKNOWLEDGEMENT Praise to Almighty Allah and His Prophet. at different stages during my stay in the Department. I find no words to express my feelings of gratitude and profound admiration to my affectionate father and mother for their invocations and benedictions. my brother for his moral support to carry myself through noble ideas of life. Malik Mubashir from whom I have learned a great deal of knowledge. I am also indebted to the eminent academicians  my teachers. and my sisters for their devotions. Mr. M.

My suggestions were highly appreciated by the management of RWML. but inside friendly environment helps a lot to cover these tasks without fatiguenes and boredom. Centralized decision-making is one of the weaknesses of the RWML. 1990 as a public limited company and obtained certificate for commencement of business on May 14. Raw materials purchase Employees work in three shifts. All machinery installed in the mill is American. So for as Account department is concerned though there is a little bit workload on the employees. The mills units is supported by different facilities as canteen. Fatima Group established RWML on April 7. whereas these are both permanent and on daily wages.Reliance Weaving Mills Ltd. RELIANCE WEAVING MILLS LTD is located in Multan. Internship Report 5 . but good management covers this weakness in an appreciable manner. Reliance weaving Mills Ltd. godown. Export sales cover major portion of total sales due to good quality. Good quality with reasonable price is the major strength of RWML. (RWML) is part of the Fatima Group. The production process is divided into two sections: In this report I have done SWOT analysis of RWML. Plans and strategies are made in the head Office. Finaly I have given some recommendations to cover these threats. laboratory. I visited RELIANCE WEAVING MILLS LTD three times for my report and was always warmly welcomed by their management and employees. decision is also made in the Head Office. store room. and many others. They contain very low portion of local market. 1990.

INTRODUCTION TO TEXTILE SECTOR Internship Report 6 .Reliance Weaving Mills Ltd.

RELIANCE WEAVING MILLS LTD does not deal in this function. Yarn produced in various qualities. RELIANCE WEAVING MILLS LTD. like Bed Sheets and Garments etc. Raw material of this stage is Cotton Seed. so all the business from Cotton Ginning to Cloth and Apparel manufacturing comes under the Textiles. which are as under: There are different functions of Textiles. this is the main raw material of RELIANCE WEAVING MILLS LTD. Processing and Dying Cloth is further processed and it could be used for a lot of purposes. which is purchase from local market. Weaving In weaving unit yarn is converted into cloth through power looms or through hand driven machines. Internship Report 7 .Reliance Weaving Mills Ltd. Ginning This is the first stage where cotton is separated from the seeds. engaged in this function. Textile includes all the business related with yarn and cloths. Spinning Raw material of this stage is Ginned Cotton. This cotton is spun to make yarn.

History of the Textile Industry Whilst farmers were developing new and better methods of agriculture.Reliance Weaving Mills Ltd. most of the population still lived in Internship Report 8 . Cutting and Stitching This is a final use of cloth in which Cloth is cut and stitching made by the exporter than it commercializes to various importers of the garments through wide world marketing department. Early in the 18th century. life in other areas of work had changed little for hundreds of years.

After this. Work within the Cottage Industry was usually divided up between the members of one family. carding the wool and spinning it. This type of production has become known by the general term of the Domestic (or Cottage) Industry. dye and wove the raw material into cloth. The term spinster still exists in English to mean an unmarried lady. The process of weaving was physically hard work and. Generally. as we now know them.Reliance Weaving Mills Ltd. In a weaver's cottage. As soon as the new wool arrived. traditionally. the loom was often to be found on an Internship Report 9 . combed. it was dyed with color and carded. a cloth merchant visited each handloom weaver’s cottage. combed. They cleaned. They did this work in their own houses. the carded wool was taken by the spinner and. The spun yarn was then taken to the loom to be woven. it was the men who were responsible for it. This was the process of combing the wool between two parallel pads of nails. it was washed to clean out all the dirt and natural oil. until all the fibers were laying the same way. He would bring the raw material and take away the finished cloth to sell at the cloth hall. The unmarried daughters of the household who were called spinsters often performed this part of the process. They cleaned. The women and girls were responsible for cleaning the sheep fleeces. Many people worked as producers of woolen and cotton cloth. spun. Next. spun. rural settlements. using a spinning wheel. at regular intervals. dyed and many people worked as producers of woolen cloth. the thread was wound onto a bobbin. small. Few people lived in towns.

Internship Report 10 . It is playing the important t role in economy of Pakistan and fulfilling the 65% export target. TEXTILE INDUSTRY IN PAKISTAN Textile is the important sector of Pakistan’s economy. The loom was worked by both hand and foot movements. upper floor.Reliance Weaving Mills Ltd. which is why it was traditionally the work of the men of the household. Working the loom was quite strenuous work. There were large windows in the room to let in plenty of daylight.

Pakistan being the fifth largest cotton producing country provides a strong base for development sustenance of the textile industry. The textile industry at present is passing through a transition phase. CAPACITY OPERATIVE PERIOD. It is sailing smoothly under the protected cover of quota systems. In spite of tremendous growth in all the peripheral areas of the textile industry includes cotton. The industry has gone through a long way and now possesses 220 units. ginning spinning. processing and made up sector. 1999-00 2000-01 2001-02 2002-03 UNITS 55 59 91 105 LOOMS 6600 7080 10920 13125 INSTALLED LOOMS 5500 6100 9128 11125 11 Internship Report . PERFORMANCE The textile industry which is endowed with a strong base of weaving had started its journey from almost non existence in 1947 with a meager size of 3000 shuttle looms that is too in the unorganized sector with only 10 textile units. 45000 looms in which include more or less 30000 shuttles looms. The textile industry is not only catering to the entire local requirement but sharing out 65% of the total foreign exchange earning.Reliance Weaving Mills Ltd. How ever it has to face the rough water to open the sea when globalization of trade is implemented under` WTO agreement in 2004. This industry which is the main pillar of the economy has not attained its optimum potential so far.

2003-04 2004-05 2005-06 2006-07 115 153 166 157 14375 19125 20750 19480 12950 19556 19840 17850 PRODUCTION PERIOD 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 GREY CLOTH IN METERS (000) 602250 667950 999516 1218187 1428025 2141382 2172400 CURRENT POSITION OF TEXTILE INDUSTRY With the exception of the period from 1958-59 to 1974-75. 29 weaving units and 54 composite units. the textile industry could not maintain. and registered its growing rate at the nominal level in the country. a sustainable growth. While the total Internship Report 12 . In the organized sector there are 452 textile companies of which 212 are not listed and 240 textile units are listed on KSE/LSE comprising of 157 spinning units.Reliance Weaving Mills Ltd.

Reliance Weaving Mills Ltd.00 88. CAPACITY UTILIZATION (%) PERIOD 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 LOOMS 79.00 82.90 85. which have no match with quantum jump the industry ahs taken in this spinning sector.50 81.1 million spindles in 1996-97 instead of going to more value added textile products like dying bleaching units in the country. The weaving capacity of the textile industry in our country is static at 9000 shuttle looms for past many years.10 86. number of textile units both listed and unlisted is however is around 452 approximately. The capacity of conventional looms is also around 19840.20 87. Instead of going for value added products the frenzy for setting up spinning projects dictated the mind of the textile industry over the years which took the 4.00 Internship Report 13 .00 90.

01. (E.f 1. tent and canvas 55 million $. threat of imposition of anti dumping duties on our gray cloths by the European Union countries.U. The industry has to achieve these targets in the face of difficult t6rading conditions especially the disturb economies of Asian countries. all together posting an Internship Report 14 .Reliance Weaving Mills Ltd.5 billions $ of major textile products include cotton yarn with the target of 1800 million $. grey cloths 1680 million $.e. EXPORTS The textile exports projection in the trade policy 1999-00 worth 6. has withdraw and anti dumping duty w. ready made garments 1050 million $. knit wear 950 million $ and made-ups 965 million $.2002) cotton yarn of 20/s in Japan and constant decrease in imports from South Korea.

PROBLEMS OF THE TEXTILE SECTOR The textile industry has been crisis ridden for some time because of shortage of raw material due to three successive cotton crop failures. needed to be changed to cost efficient capital intensive. Duty drawback (rebate) is reducing from time to time and changing in sales tax refund to export oriented units. 1) The production of lint cotton ahs remained below the target. 4) Docile labor-intensive technology.Reliance Weaving Mills Ltd. which is very poor sigh for the exporter of the value added items. 2) The shortage and non-availability of the lint cotton in the domestic market has led to the price-hike in domestic market. The main problems it is facing are as under. Internship Report 15 . 3) Competitor’s installation of over capacity in some production lines or closure of spinning capacity due to higher prices and short supply. uphill task of achieving the export targets for the textile industry during the financial year.

Reliance Weaving Mills Ltd. Internship Report 16 . 5) Lack of institutional finance for modernization efforts.

RELIANCE WEAVING MILLS LIMITED MULTAN GROUP PROFILE The company has been sponsored by FATIMA GROURP in Multan. RELIANCE FIBRES LTD. 5. Following are the companies included in the group: Sr. LTD. AHMED FINE TEXTILE MILLS LTD Internship Report 17 . LTD. RELIANCE COMMODITIES PVT. 8. 9. The sponsors have also taken up the managing control of a band new spinning unit at Rawat Distt. Cotton lint yarn. RELIANCE WEAVING MILLS LTD. 7. RELIANCE COTTON PVT. The sponsors are already engaged in the field of manufacturing Sugar. FAZAL CLOTH MILLS LTD. RELIANCE EXPORT LTD. Grey cloths. # 1. Rawalpindi form UBL through bidding. Company Name FATIMA SUGAR MILLS LTD. 6. 3.Reliance Weaving Mills Ltd. 4. LTD has been awarded Best Performance Trophies for the years 1997-98 to 99-00 in the field of export of Molasses declared the top 5 company of the Pakistan. FATIMA FERTILIZER COMPANY LTD. Their company. RELIANCE COMMODITY PVT. 2.

These TFC’s are listed at Karachi Stock Exchange and has also been declared as eligible security in C. The we4aving units are situated at Multan and the Spinning unit at Rawalpindi. Fatima Group established RWML on April 17. 1990. (RWML) is part of the Fatima Group. Weaving and Spinning. COMPANY PROFILE Reliance weaving Mills Ltd. RWML production capacity consists of two main segments.C). Today Reliance weaving Mills Limited is the 3 rd largest weaving mill in Pakistan with modern and technologically advanced greige weaving plant. The principal business of the Company is manufacture and sale of cotton yarn and grey woven fabric. The details are as under: Internship Report 18 . both are ISO-9002 Certified for its quality. Authorized capital of RWML at the time of incorporation was Rs.700million which has gradually increased and at present subscribed share capital of company stands at Rs. million in February 2002. The company has issued 1 st tranche of Term Finance Certificate (TFC’s) of Rs.Reliance Weaving Mills Ltd.D.C. which has been fully subscribed.250 million and presently RWML has authorized and paid up capital of Rs. listed at Karachi and Lahore Stock Exchanges and also inducted into Central Depository Company (C.D. 1990 as a public limited company and obtained certificate for commencement of business on May 14. 308109370 .

a captive power plant consisting of 2. Further more. comprising 108 Tsudakoma air jet weaving machines from Japan along with modern auxiliary machinery to produce high quality cloth for export markets. During the last financial year. 2001.70 million meters per annum. Further and additional 20 Tsudakoma air jet weaving machines form Japan were installed in 1999 coupled with yarn doubling and twisting machines to produce value added fabrics. The installed production capacity of the unit is approximately 21. The project started its commercial production from October 01.500 million. the company has implemented and expansion project for its weaving unit at a cost of a about Rs. Multan commenced its commercial production on May 01.085 million meters per annum.Reliance Weaving Mills Ltd. Weaving units: Weaving unit is situated at Fazalpur.5 MW Capacities are also installed in the weaving unit-1 by which the company is saving power cost and production losses. The installed production capacity of the unit is approximately 16. Internship Report 19 . 1993 with 96 Tsudakoma air jet weaving machines imported from Japan along with modern auxiliary machinery to produce high quality cloth for export markets. Khanewal Road.

It produces high quality yarn for in-house consumption and for export markets.00 million meters per annum. 1999 with 14400 spindles with a very good combination of European and Japanese machinery with allied accessories. Another 48 air jet looms expansion plan in existing weaving unit # 2 is at advance stage. Rawat. Internship Report 20 .6 million meters of grey cloth annually. The installed capacity after conversion into 20/s count is approximately 4. which will result in increase in production approximately by 9. Spinning Unit: The spinning unit of the RWML is located at Mukhtarabad.520 spindles with an installed capacity of 12. and District Rawalpindi in the province of Punjab. The spinning unit has 35. Cotton yarn produced is used in weaving units for manufacturing of fabric being sold in local and export market.30 million kgs of yarn converted at 20/s count. The unit commenced its commercial production on October 01.Reliance Weaving Mills Ltd.849 million kgs. Now weaving unit comprise of 295 Tsudakoma with production capacity of 57.


Internship Report 22 .Reliance Weaving Mills Ltd.

MISSION STATEMENT The mission of the company is to operate state of the are textile plants capable of producing yarn and fabrics.Reliance Weaving Mills Ltd. Exploring the global market with special emphasis on Europe and USA. The company would keep its emp0hasis on product and market diversification. values addition and cost effectiveness. which can explore local and international market of high value products. VISION STATEMENT The company is interested to install complete textile finishing plant including bleaching. folding. printing plant in the existing weaving units at Multan to make it a complete composite unit. The company will conduct its operations prudently assuring customer satisfaction and will provide profits and growth to its shareholders through: • • Manufacturing of yarn and fabrics as per the customer’s requirements and market demand. mercerizing. We want to fully equip the company to play a meaningful role on the sustainable basis in the economic development of the country. Internship Report 23 . calendaring. dyeing.

attractive benefit program and opportunity for growth.Reliance Weaving Mills Ltd. performance based compensation. as a good COMPANY’S QUALITY POLICY COMMITMENT TO EXCELLENCE • • All of our priorities action and products must be recognized as an expression of unique quality. modernization and replacement (BMR) of plant and machinery. • Protecting the environment and contributing towards the economic strength of the country and function corporate citizen. organize the training and necessary feedback on our performance. • Keeping pace with the rapidly changing technology by continuously • • balancing. Enhancing the profitability by improved efficiency and cost controls. personnel developing. We are dedicated to produce fabrics and yarn of the best export quality to meet the requirement and expectations of our customers. • We strive for continuous improvement in day-to-day quality work. Internship Report 24 . having motivating ability and and retaining dedication the by exceptional providing them good working conditions. Recruiting.

Germany.Reliance Weaving Mills Ltd. The imported plant and machinery includes: • • • • • • 120 Shuttless Looms from Tsudakomna. 25 Plant & Chilly Equipment from Luwa Internship Report . In addition to further 20 looms was a installed in 1997 along with doubling machine and self power generation plant of 2. Humidification Switzerland.5 MW was installed in 1999.50 million Mtrs. 1993. THE PROJECT The project of setting up 96 looms was successfully completed and the company commenced commercial production on May 01. Grey Cloth per year. Knotting machine from Tomen Corp. PLANT AND MACHINERY IMPORTED The imported plant and machinery for the project are purchased from world renowned manufacturers of textile industry machinery. The capacity of the project is 15. Air Compressor & Dryer from Atlas Capco Belgium. Overhead Travelling Cleaner from Luwa Switzerland. The production facilities are supported bay a very modern quality control department equipped with laboratory and testing equipment based on latest technology. Sizing machine from Sucker & Mullar Germany.

Both the imported and local machinery was brand new at the time of purchase. Electric material from semins. which is as under: • • • • • • • • Bailing Press Motor Lifter 2 Nos. Equipment for workshops. LOCAL The plant and machinery locally purchased up to 20% of the total machinery. Vaccum Cleaning plant from Germany. 3 sets power Generator (Gas) from Caterpillar Switzerland. Fire fighting equipment. Beams 100 Nos. Internship Report 26 . Folding Machines 3 Nos.Reliance Weaving Mills Ltd. • • • • Warping Machine from Benninger Switzerland. The above plant and machinery was imported with the foreign currency financial assistance of Muslim Commercial Bank Limited. Power Generator from UK. Electric appliances.

50 25. COST OF PROJECT AND MEANS OF FINANCE ESTIMATED COST Pak.40 5. In (Million) • • • • • Imported machinery Import incidentals Local machinery Land.80 294. Internship Report 27 .60 47.20 13.00 22. building.Reliance Weaving Mills Ltd.50 44.00 The company has successfully completed the project within the projected cost by saving at least 11. Others Total Estimated cost 210. Rs.00 ACTUAL COST • • • • • Imported machinery Imported incidentals Local machinery Land.00 (m) from the imported machinery due to forward booking of US $ on L/Cs through speculation with the bank. others Total actual cost 199. Building.00 284.

Rs.45 13.Reliance Weaving Mills Ltd.60 4.80 6. Pak.BR. In (M) • • • • • • • Share holder’s equity Redeemable capital FC loan I. FINANCING The project has been financed through.00 146.D Line world bank Local Bank Loan Directors Loan Local suppliers Actual project cost 109.60 284.55 3.00 Internship Report 28 .

there is cheap labor available. BUILDING AND CIVIL WORKS • • • • • Main factory building Godowns 4 Nos. being the oldest and largest industry in the country. COMMERCIAL PRODUCTION The company has commenced commercial production from May 1. FINANCIAL YEAR The financial year of the company is from October 1 st to September 30th.Reliance Weaving Mills Ltd. which is easily available in Pakistan. LABOUR AND TEACHNICAL KNOW-HOW The textile industry. Office buildings admin and ISO Labor and staff quarters Power house Internship Report 29 . which is engaged in the running of existing manufacturing facilities. 1993. The company has hired experienced team. RAW MATERIAL The basic raw material for the company is cotton yarn. both skilled as well as unskilled.

FEUL Fuel requirement of the powerhouse is Sui Gas which is special installed by company on self finance scheme by cost of Rs.10. meters).5MW consisting of 3 power Generators imported from caterpillar to provide smooth power to the Mills. Feet (13. The total covered area is approximately 120. WATER The total requirement of water for the project is met out of regular supply form the Tube.120sq. UTILITIES SELF POWER GENERATION The project has a self-powerhouse of 2.Reliance Weaving Mills Ltd.well. Internship Report 30 .055 (M) and also have a diesel generator in case of any electric failure.345sq.

00 96. PRODUCTION Year/Month Ended 30 September. 30 September. Internship Report 31 . It also varies according to the production pattern adopted in a particular year. 30 September.20 It is difficult to describe precisely the production capacity in weaving mills since it fluctuates widely depending on various factors such as count of yarn spun looms speed. 30 September.00 96.00 85.00 85. 30 September. 30 September.00 84. 30 September.) 12104 13255 13065 13530 13680 13193 14339 15539 15980 16587 Capacity Attained % 78. 30 September. width and construction of cloth. 30 September.Reliance Weaving Mills Ltd.00 89.00 97. 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Production (000 Mtrs.00 88.00 87. 30 September.

34 93. (million) 54260 295639 395895 614060 660883 714587 755064 1228367 1115277 % sales of Export 1999 2000 2001 2002 2003 2004 2005 2006 2007 123415 402426 448905 667242 727163 723822 800382 1306888 1252560 To Total sales 43. COMPANY DIVIDEND POLICY Internship Report 32 .72 94. (million) Export sales Rs.96 73. SALES (Cloth) Year Total sales Rs.46 88.03 90.19 92.89 98.34 Exports are increasing due to increase in demand in various markets because of with drawl of quota.99 85.Reliance Weaving Mills Ltd.

50% cash dividend 52.Reliance Weaving Mills Ltd. • Due to regular payment of dividend in each year to the shareholders the market value of the company’s share has increased to its face value to Rs. • • The company is declaring regular dividend to its shareholders since previous 5 years. Internship Report 33 . The shareholders of the company are fully satisfied by the company management decisions regarding dividends as well as operational matters.50% cash dividend 12.23 per share. PROCESS OF WEAVING UNIT RWML UNIT-2 is engaged in the following functions. Following dividends paid by the co. 2004 2005 2006 2007 10% cash dividend 23.50% cash dividend SHAREHOLERS’S RIGHTS None of the holders of the issued shares of the co. has any special or other interest in the property of profits of the company other than of as holder of ordinary shares in the capital of the company.

Reliance Weaving Mills Ltd. • • • • • • Yarn receiving and issuing Doubling/twisting Loading on sizing Sizing Loom shed Cutting/Folding and Packing Yarn Receiving and Issuing Following is the process of yarn receiving and issuing: • • • • Yarn receive Yearn tested through lab Yarn record maintained in computer Yarn requisition/issuing Yarn Receive First of all in weaving unit yarn received by yarn clerk from the spinning unit. Yarn clerk check and count the bags and arrange its stacking in very arrange manner. Internship Report 34 . Weaving process includes the following steps. WEAVING Different types of the cloths are produced in the Weaving department. Yarn Tested In Lab After receiving the yarn at least 2 cones are send to the lab to check the weight/quality count and length.

Reliance Weaving Mills Ltd. • YARN DOUBLING/TWISTING The company has own doubler and twister machine in which yarn is doubled and twisted before issuing to warping section. it is recorded in stock register maintained in computer. • WRAPING After receiving the yarn it is loaded on creel frame for the purpose of warping. Yarn Requisition/Issuing Yarn is issued to warping department after receiving the requisition from the General Manager/Production Manager. which is commonly consisting of 55000 to 60000. It is called one set ready. Yarn Record After receiving the correct result of the yarn from lab. Following are the chemicals used in the sizing machine: Internship Report 35 . But it must be noted that this process can only be operated due to demand of the certain construction to the cloth. There is one set in one time comprising of 12 Beams in which yarn warped for sizing. • SIZING In this department one set consisting of 12 beams loaded on the sizing machine where all the chemicals are mixed and thread passed way from this mixture and prepare one full beam at the required length.

Starch from Rafhan Maize FSD.A Imported from Japan Textile wax from B.S. there are 116 looms installed by the company.F. • • • P. The above chemicals are mixed from the sizing machine through revolving machine.A. Beam received from the sizing department is loaded on the loom and vacant beam replace with the beam gater. These looms are adjustable. • WARP/WEFT Internship Report 36 . After sizing the beams these are transferred to the stock of the sizing department and issued to production department as and when required otherwise these are held in this department with marking of its specification on that beam so that it can easily be located out of various beam’s stock. which is the main process where yarn converted in grey cloth.V. • LOOMS SHED In this process. Pakistan Ltd. Its width can be or decreased with the requirement of construction of cloth. New beam knotted with the remaining thread of old beam with help of a modern knotting machine.Reliance Weaving Mills Ltd.

Hong Kong. Machinery operation In the looms shed there are more or less 40 workers are appointed on the looms. Each person is responsible for his three looms regarding breakage of thread.Reliance Weaving Mills Ltd. Normal packing 1 Bale = 500 Meters and 600 Yards 1 Roll = 350 Yards Piece length Internship Report 37 . Warping is called the running of sized beam in state away and weft is called running of yarn cones in side away. While roll packing are exported to USA and European countries. quality of cloth and efficiency of the loom production. • PACKING There are two kinds of cloth packing one is bales shape band and other is in roll. All these packing are made with polythene bags which received from the store room bales are exported to Japan. China and Taiwan. There are two concepts of warp and weft in the looms shed. This department has all the technical as well as maintenance staff in the loom shed so that any discrepancies may timely be removed and production may not suffer.

1to 10 mtrs use in cut piece sale 11 to 20 mtrs use in local normal sale 21 to 50 mtrs use for export The packing may be changed in accordance with the demand of customers as well as the nature of consignment. PRODUCTION REPORTS Different reports are prepared when yarn is received from sizing section to completion of cloth. All records are maintained completely.Reliance Weaving Mills Ltd. • • • Yarn receipt report in weft Sized beam receipt report Waste report Leno (cuttari) Rags (cloth) Cut pieces • • • Daily used report Efficiency report Daily production report Internship Report 38 .

Reliance Weaving Mills Ltd. Internship Report 39 .

. 4 P’S 1. PROMOTION 1. They sell to the well known local buyer like Al-Abid Silk Mills ltd. PRODUCT RWML produces high quality cloth only. MARKETING MIX Marketing mix is the marketing tasks that the company is to acquire its objectives in the target market. department. TYPES OF CLOTH BEING PRODUCED 100% Cotton Grey Cloth of the following main types is being produced. Chenab Ltd. RWML take the advantage of second exporter from the govt.Reliance Weaving Mills Ltd. PRODUCT 2. They produce all kinds of construction as demanded by to customers. PLACE 4. Fateh Textile Ltd. PRICE 3. which are the top leading companies of the Pakistan subsequently they export the cloth after processing. Its exports are more than 90% of its produce and remaining they sell in the local market. Internship Report 40 .

Following tow factors are very important. • • • Salaries Rent Local taxes Internship Report 41 .5” 10*10/80*54=55” 30*30/100*60=72” 2. • • Fixed cost Variable cost FIXED COST Fixed cost is the costs which remain always same in total whether produce large quantity or small quantity. Fixed cost per unit rises as the quantity produced decreases and vice versa. and should satisfy the customer. Some of the important factors of fixed cost are. should be in such a way that it should produce a reasonable profit for the co. PRICE Pricing is an important element in the marketing process for any company. 20*20/108*56=63” 20*16/128*60=61.Reliance Weaving Mills Ltd. The price policy of co.

Reliance Weaving Mills Ltd. • • • Material cost Labor cost FOH RWML’S PRICING STRATEGIES RWML adopts following pricing strategies: • • Direct selling Through agent selling. Direct selling If co. Some examples are. Fixed cost+variable cost+Desired profit Through agent selling Through agent selling pricing components are: Fixed cost+variable cost+Desired profit + Middleman’s commission Internship Report 42 . sells directly then price components will be as follows. It increases in total as quantity increases but remains same on per unit basis. VARIABLE COST Variable cost changes in total with the change in quantity produced.

Pricing Procedure in Local Market RWML sells only extra quality left from the foreign order in the local market.Reliance Weaving Mills Ltd. • Direct channel. They are also using other modes of transportation as well: • • • Trucking Shipping Air line 43 Internship Report . Some important factors are inland freight. They are using RWML exports more than 90% of two types of distribution channels in export. They sell to those person whose tender price will be high. sea freight clearing charges etc. PLACE ( Distribution Channels) its product. Pricing Procedure for Export Pricing procedure for export is different from the local procedure they charging the price in foreign factors before charging the mind certain factors before charging the price in foreign market. RWML====Customer • Indirect Channel. They call tenders when they want to sell the production in the local market. When any customers want to purchase the products after negotiation they fix the price. RWML==Middleman=====Customer Mostly RWML exports its products through ship. 3.

EXORT ORDER EXECUTION Scope: this procedure is applicable for all sorts of cloths being produced. Purpose: To maintain and increase the exports with better quality goods and services. Korea 3. Major export countries are as under. Mainly Japanese and Hong Kong clients import the cloth form RWML. USA SALES PROMOTION RWML has no any promotion media to promote its products. Internship Report 44 . Hong Kong 4.Reliance Weaving Mills Ltd. because Japanese machines Tsudakoma are producing only cloth. 1. Japan 2.

’s approval. gives approval or may suggest any other price to be offered. PROCEDURE Inquiry Customer inquiries are received via telex. prepare contract review check sheet.E. Internship Report 45 .E for review.E’s review these are sent to export dept. The requirements are adequately defined and involvements of production areas are specified. dept. In house/ out house have the capacity to meet the order requirements? Prince quotation In getting approval of costing and review of customer’s requirements. In absence of C.E. 1. After C. After careful analysis.Reliance Weaving Mills Ltd. in charge. incharge approves price. prices are quoted to customers for confirmation. Costing Costing sheet prepares for C. these inquires are replied after C.E. Fax and letters and E-mail.’s approval. 2. Contract review and issue Section in charge takes following steps before issuing a contract. Costing approval C. These are directly sent to C.E.

these goods are custom cleared at Multan dry port. Letter of credit (L/C) Customers establish/ open L/C well before shipment time. quality. terms etc. If the shipment is to be custom cleared from Multan dry port. delivery. marketing. Shipment RWML is having all well-known shipping companies namely. shipment details. Confirmation of sale contract If customer confirms the price offered. discrepancies in L/C are noted and informed to customer for rectification. Samin Enterprises Pre-shipment documents are sent to Samin enterprises next day by dept. In case of delivery in receipt of L/C. sale contract is issued to the customer with complete details of price. these are checked with regard to ordered goods. Dispatched goods are detail noted in relevant registers. After receipt of L/C. prices. payments. concerned section in charge reminds customer. Documents are sent to clearing agent same day or next6 day and followed up to Internship Report 46 . goods are sent to Karachi on trucks with all necessary records. shipment negotiation etc. Dispatch of goods/cloth Packed cloth is dispatched to the customers.Reliance Weaving Mills Ltd.

Reliance Weaving Mills Ltd. In case of dry port. complaints and claims. Balance order list up dated fortnightly for their information. USA 2) UNITED MARINE AGENCIES 3) UNIQUE MARITIME AGENCIES 4) RIAZEDS PVT. Sale comparison reports are updated in computer network on monthly basis. If the consignment is cleared from Multan dry port than there is no need of follow up the consignment. party wise and country wise invoice values. 1) APL CO. LTD. it comprises one month’s status of shipment. ensure that these goods are custom cleared without any unnecessary delay. which are used for sea shipment. 5) CHUGTAI BAOS. Following are the companies. KARACHI RATE OF SEA FREIGHT HONGKONG JAPAN MANILA USA CHINA 350$ 450$ 375$ 950$ 350$ MIS Reports Balance order instructions are updated periodically. original bill of loading and 4 th copy of shipping bills are collected from office agent for obtaining the rebate timely. Internship Report 47 .

Customer Complaints After receiving goods.Reliance Weaving Mills Ltd. he complains the same. Internship Report 48 . if customer find and defect / fault in the quality of cloth. Case is taken to remove the defects and to further restrain the faults. Complaints are processed quality and efficiently. Than credit the customer account by couching the accounting entry and subsequent paid to customer in shape of FDD or FTT subject to realization the amount of concerned consignment. after getting reply. it is informed to the customer. Complaints are entered in complaint received register after taking complaint it is raised on corrective action and issued to responsible person/ dept. After that claim is valued in US $ and Pak Rs.

It is the duty of the labor officer to satisfy itself regarding payment bonus. Sections of this department are divided into offices as under. has to administer all the operations of the organization.Reliance Weaving Mills Ltd. gratuity. • • • • Labor office Security guard office Gate office Time office LABOR OFFICE As required by labor dept of the govt. misunderstandings and any other kind of matter. SECURITY GUARD OFFICE The main objective of the security office is to safe handling of the goods from /to the mill premises. For the achievement of such objective a team of security guards has been employed by the Internship Report 49 . which may arise from time to time with the labor and the immediate supervisor or with any other person in the organization. and other benefits to labor and to keep their morale and motivational level high. conflicts. The dept. ADMINISTRATION DEPARTMENT This is very important department of the organization as named shows. this dept. It is the duty of the labor officer to inform the legal requirements concerning the labor and company affairs as well as any changes in rather labor laws. is under the labor officer. of Pakistan. He is responsible to resolve all the disputes. this office has been setup to deal with all the matters that are related with labor.

b) They are the guardians of the every thing of the co.G. description.Reliance Weaving Mills Ltd. stores supplies.P is made in which information like date of supplier. security guard firstly contact with the authority in the mill top grant the permission to enter into the mill’s premises.G. In the same way O. a) Whenever any visitor wants to enter into the mill. Internship Report 50 . and they made a summary on daily basis and fax to head office. For this purpose gate office clerk maintains two type of registers called. 1) Outward going pass register 2) Inward coming pass register When every thing including raw material. labor colony.P is prepared for out going things etc. quantity of the material and any other remarks are written. GATE OFFICE This office has been made to keep the record of each and every thing coming in and going out of the Mills gate. company. or any other things comes into the mills premises a document named as I. (quarters) are lying into the responsibility of the security officer No out side visitor can enter in the mills premises without the permission of the Admin Manager. d) They sere and check the outward going pass of certain things when these going to out of the mills premises. c) They are in uniform of dark army color. All the keys relating to the mills office.

5. Education Cess etc. It keeps the attendance records. leaves. It keeps the records of Social Security. This office keeps and maintain the time record of all the workers. DOBI. It keeps the records of gratuity. which is than used to calculate the salary to be paid to the workers on monthly basis. pensions and other benefits including CPL (cash paid leave) to each employee. of all employees. bonus. number of days worked of all the workers and than calculate their over time on the basis of the gross salary of each workers. 3. Internship Report 51 . It keeps the records of the over time single as well as double.Reliance Weaving Mills Ltd. TIME OFFICE 1. 4. 2.

Reliance Weaving Mills Ltd.

Following accounts are prepared in the Accounts Department of “RELIANCE WEAVING MILLS LTD.” 1. 2. 3. 4. 5. 6. 7. 8. 9. Store Creditor/Purchases Export Debtor/Realization Store Consumption Fuel and Power Salary and Wages Site Expansions Inter Unit Administration Expenses Selling Expenses

10. M/up on T.F.C. 11. Social security/E.O.B.I 12. Banks • • • • • HBL FBL FBL (LOAN) ABL SPCB

Cash is given to Mr. Afzaal Hussain the site cashier for meeting the different site expenses and these are; • • Yarn freight Store freight 52

Internship Report

Reliance Weaving Mills Ltd. • • Building capitalized/repair and maintenance Labor welfare charges

The balance is maintained up to Rs. 100000 minimum every time.

First of all purchase requisition is issued to the different suppliers. Then the quotations are received from the different supplier and evaluated by the purchase manager Mr. Subhan sb. (C.A) then a purchase order is made. Three copies are maintained for the purchase order; • • • One to the supplier One to the accounts department One is remained with the purchase department

Purchase includes; • • • • • • Raw material (Local) Starch Beveloid Softner-52 (Local) (Local) (Local)

Chemical PVA imported (Duepont USA) Yarn (Australia)

Internship Report


Reliance Weaving Mills Ltd.

Major market of RWML is differentiated on the basis of sale; Export sale (85%) Export sale is made to; • • Local sale • • • • Europe Hong Kong

(15%) Nishat Chenab Bismillah Nishat (Chunian)

Local sale is made to;

Inter audit is done by Mr. Sabir Bhatti Sb. is the ‘Internal Audit Manager’ with his four Assistants; on daily basis of all the vouchers.

A daily purchase report of Store and Spares is received at the Head Office from the site and then it is booked in a bill payable voucher/Store Purchase Voucher by the accounts officer Mr. Muhammad Sulaiman Sb.

Internship Report


Site stock inspection is also done at the end of each month by 3 or 4 accountants. Internship Report 55 .Reliance Weaving Mills Ltd.

whereby a bank (the issuing bank). named or described.” Form the above definition it means that a documentary letter is a bank’s written undertaking given to the exporter of the payment of a certain amount of money on behalf of the importer provided the exporter tenders to the bank or its overseas agent. however. the documentary letters of credit are most important because they undertake the beneficiaries to obtain money either immediately or within a mutual agreed period. acting at the request and on the instructions of a customer (the applicant) or its own behalf is to make payment to or to the order of a third party (the beneficiary) . provided the beneficiary fulfills the conditions lay down in the letter of credit. “Any arrangement. There are several ways of financing international trade. provided that terms and conditions of credit are compiled with.Reliance Weaving Mills Ltd. of all the methods available at present. the specified document within a specified period in accordance with the terms of understanding. or is to accept and pay bills of exchange (draft/drafts) drawn by the beneficiaries. against stipulated documents. or authorizes an other bank to negotiate. Internship Report 56 . OPENING OF LETTER OF CREDIT One of the most important functions of the commercial banks in the world is to finance the imports and exports trade. Ariticle-2 of the uniform custom and practice for documentary credit of the international chamber of commerce (ICC) defines the documentary credit as under.

90. If the L/C is of deferred (30. L/C TREATMENT IN RWML The company has to import following items for the continuation of its operation. Cr. L/C # XYZ Margin Bank Dr. An entry is made. When the imported items come into the counter. By depositing the amount of the L/C is of sight nature. All the work related to the L/C is prescribed in the purchase order and send it to bank duly signed by import department.Reliance Weaving Mills Ltd. Amount deposited to the bank is then debited to the L/C account by debiting the bank is then debited to the L/C account by debiting the bank or payable. Machinery 2. Dr. 1. 120 days) nature then the rate of the currency or the mark up required to deposit by the company in addition to L/C value is decided between the bank and the company provide some guarantee to the bank or the bank decides on the credit worthiness of the company. by debiting the margin and charges recovered by the bank. Spare parts and Chemicals The company has to request to open L/C for these imports. bank inform to get release the documents. This amount is debited to the L/C account created for that particular L/C # . An entry is made: Internship Report 57 . 60. For opening of L/C amount of margin 10% of the total invoice cost and L/C opening charges are deducted by L/C opening bank.

Bank/Import bill payable After releasing the documents these are sent to the agent sitting in Karachi who then release the shipment from the port by paying all the expenses authorities. carriers. L/C # XYZ Dr. the entry is: L/C # XYZ Agent Dr. The company after checking all the documents sends the remaining amount if any to the agent. sales tax. to cargo. Cr. L/C # XYZ Dr. The company sends time to time the amounts to the agent for the particular L/C #. income tax Clearing agent after releasing the consignment dispatched it to the company and along with all documents (bill of entry and receipts of the expenses stated above). When all the amounts are paid to the agent for that certain L/C then the entry is made to close the account of the agent for that particular L/C. Cr. Internship Report 58 . Import bill payable Cr. By making the same treatment in the company’s account.Reliance Weaving Mills Ltd. customs. If there is no payment is made to the bank then bank create the PAD is favor of the company and recovered form the RWML otherwise make the loan duly a mutual consideration.

Reliance Weaving Mills Ltd. Internship Report 59 . As described earlier the L/C may be of different kinds from sight to 90& 120 days. EXPORT BILLS NEGOTIATION This term is specified to the exports. the buyer opens an L/C in favor of the company. When the company makes export sales.

Reliance Weaving Mills Ltd. Internship Report 60 .

Potential in market 3. Throughout local market in Pakistan Internship Report 61 . Centralized control 7. High financial resources 5. Strong industrial group WEAKNESSES 2. Centralized decision making OPPORTUNITIES 2. No other incentive except salary and bonus 6. No promotional activities 5. SWOT ANALYSIS STRENGTHS 1. Costly management staff 3. Imported machinery 2.Reliance Weaving Mills Ltd. Committed and competent staff 6.U. due to withdraw of quota 4. De motivated staff 4. Strong market image 3. Market in USA & E. Awareness of product 4.

Increasing cost of production 5. Price fluctuations 7. Economic instability 3. THREATS 1. New entrance 2. Political instability Internship Report 62 . War 6. Tough competition 4.Reliance Weaving Mills Ltd.

Reliance Weaving Mills Ltd. Internship Report 63 .

Push up the processing team to help in making timely shipment. how we have to proceed further in order to fulfillment of desired requirement. 3. How the working is being done. The important matter is to understand the perception from customer and his expectation because it differs from customer to customer and to order. How to respond to the assignments given by the CEO. Purchase of yarn and its recording in the books of accounts 11. Payment of petty cash expenses and their recording.Reliance Weaving Mills Ltd. 7. Internship Report 64 . How we have to respond and quote prices upon difference inquires from the customer. 2. How correspondence has to against different orders and different customers. 5. 10. Issuance of selling contract to customers 4. MY LEARNING ARE AS FOLLOWS 1. 8. Preparation of different sorts of reports 9. After looking on contract. 6.

Internship Report 65 .Reliance Weaving Mills Ltd.

Reliance Weaving Mills Ltd.

Purpose of Financial Analysis

The purpose of financial statement analysis is to make a quick assessment about a firm’s financial situation .It is also used to identify the major strengths and weaknesses of a business enterprise.

Tools of Financial Statement Analysis (1) Financial Ratio Analysis (2) Common Size Income Statements

Financial Ratios Financial ratios are a ratio of 2 numbers, at least one of which comes from the firm’s financial statements. A financial ratio has very little meaning unless it is compared to some other ratio. Two types of comparisons are cross-sectional analysis and time-series analysis.

Cross-Sectional Analysis Time-Series Analysis

Compare ratio for firm A at time t to industry average Compare ratio for firm A at time t to ratio for firm A at time t-1, etc.

Internship Report


Reliance Weaving Mills Ltd. Financial ratio analysis is a fascinating topic because it can tell us so much about accounts and businesses. When we use ratio analysis we can work out how profitable a business is, we can tell if it has enough money to pay its bills and we can even tell whether its shareholders should be happy!

Ratio analysis can also help us to check whether a business is doing better this year than it was last year; and it can tell us if a business is doing better or worse than other businesses doing and selling the same things. What do we want ratio analysis to tell us? We have to start working on ratio analysis with the following question in our heads: What are we trying to find out? We can use ratio analysis to try to tell us whether the business • • • • • • • is profitable has enough money to pay its bills could be paying its employees higher wages is paying its share of tax is using its assets efficiently has a gearing problem is a candidate for being bought by another company or investor

And more, once we have decided what we want to know then we can decide which ratios we need to use to answer the question or solve the problem facing us. Internship Report 67

Reliance Weaving Mills Ltd.

Users of Analysis Information Now we know the kinds of questions we need to ask and we know the ratios available to us, we need to know who might ask all of these questions! This is an important issue because the person asking the question will normally need to know something particular. Of course, anyone can read and ask questions about the accounts of a business; but in the same way that we can put the ratios into groups, we should put readers and users of accounts into convenient groups. The list of categories of readers and users of accounts includes the following people and groups of people: • • • • • • • • • • • Investors Lenders Managers of the organization Employees Suppliers and other trade creditors Customers Governments and their agencies Public Financial analysts Environmental groups Researchers: both academic and professional

The users of accounts that we have listed will want to know the sorts of things we can see in the table below: this is not necessarily everything they will ever need to know, but it is a starting point for us to think about the different needs and questions of different users.

Internship Report


To regulate the activities of business. especially when they have a long term involvement with. Governments and The allocation of resources and. Employees Information about the stability and profitability of their employers to assess the ability of the business to provide remuneration. determine taxation policies and as the basis for national income and similar statistics Local community Financial statements may assist the public by providing information about the trends and recent developments in the prosperity of the business Internship Report 69 .Reliance Weaving Mills Ltd. Suppliers other creditors and Businesses supplying goods and materials to other trade businesses will read their accounts to see that they don't have problems: after all. the their agencies activities of business. Investors To help them determine whether they should buy shares in the business. They also want to assess the ability of the business to pay dividends. Managers Might need segmental and total information to see how they fit into the overall picture. the business. retirement benefits and employment opportunities. Lenders To determine whether their loans and interest will be paid when due. or are dependent on. therefore. hold on to the shares they already own or sell the shares they already own. any supplier wants to know if his customers are going to pay their bills! Customers The continuance of a business.

the accounting concepts employed for inventories. Environmental groups Many organizations now publish reports specifically aimed at informing us about how they are working to keep their environment clean. and the range of its activities as they affect their area. depreciation. Researchers Researchers' demands cover a very wide range of lines of enquiry ranging from detailed statistical analysis of the income statement and balance sheet data extending over many years to the qualitative statements. bad debts and so on.Reliance Weaving Mills Ltd. analysis of the wording of the Which ratios will each of these groups be interested in? Internship Report 70 . for example. Financial analysts They need to know.

Reliance Weaving Mills Ltd. Interest Group Investors Ratios to watch Return on Capital Employed Lenders Gearing ratios / Leverage Ratio Managers Employees Profitability ratios Return on Capital Employed Suppliers and other trade Liquidity creditors Customers Governments agencies Local Community Financial analysts Environmental groups Researchers This could be a long and interesting list Possibly all ratios Expenditure on anti-pollution measures Depends on the nature of their study and Profitability their Profitability Internship Report 71 .

Reliance Weaving Mills Ltd. Horizontal Analysis BALANCE SHEET COMMON SIZE HORIZONTAL ANALYSIS ASSETS: 2010 (Rupees ) 2009 in % Internship Report 72 .

103 (4.801 229.999.Reliance Weaving Mills Ltd.644 157.381) 125.421.232.32 31.062 32.033.963.493 187.340 (56.222.572.122.753.397.588.754.267 -80.422 523.188.791 92.088.906.586.462 49.229. spares 7.707.387) 9.675 41.546 7.999.98 3.593 and 69.598 -8.794.45 -31.593 ----------------------2.289.985 1.338 772.194.261 .993 (4.503) 1.401 746.238 -----------6.67 23993 ------414.937 25.667.987 Property.804.855.677.490 ----------69.843 (71.952.50 28.560.421.586 2.640.340 1.19 1.088.682. Plant equipment Intangible assets Long-term investment Long-term deposits Current assets and tools Stock-in-trade Trade debts Loan Advances Trade deposits and payments Short Mark-up accrued Other Internship Report 73 term Investment and 45.309 142.261 1.033.88 100 --------- Stores. Non-current assets 1.050.992 5.615.193 10.816) 44.584 loose 8.041 125.31 10.612.643.601.359 103.793.586 2.

913.910 837.501.96 3.274 2.250 195.309.000.344.852.274 1.798.009.99 ------35.070.668 74 30.988.81 --- 868.Reliance Weaving Mills Ltd.430.712. subs and Internship Report .500 395.067 30.621.870 -------------70.546 In % Share capital and reserves Authorized Capital 30.000.000 308.157.027 24.487.687 Issued.081. receivables Tax due refunds from government Cash and bank balances Total Current assets TOTAL ASSETS EQUITY AND LIABILITIES: 1.914.660 ------------61.75 3.000 ordinary shares 10 each paid-up capital Reserves 711.109.918.250 of Rs 165.780 3.184 10.506 2010 (Rupees) 2009 85.370 395.000.296.090 140.081.000 246.449.157 31.202.

603 43.877.041.646.658.274 Current liabilities Trade and other payables Interest Finance markup arrangement Current of liabilities portion non-current and under mark-up accrued 21.546 Total Liabilities Internship Report 75 .589.76 783.805 3.453.000 16.111) (258.209 Finance & other 3.009 123.218 36.780 3.174.86 -47 124.59 30.753 1.824.777.760.875.661) -28 71.000 (7.77 106.143.58 13.465.375.822.265.791.877.488.877.430.500.238.419.908 4.Reliance Weaving Mills Ltd.814 term 255.344.23 2.550) 26.164 1.506 85.228.884 Non-current 128. Unappropriate profit 63.904.55 -24.216 988.301 131.877 161.545 (276.157.813 1.336.588.649.327 1.875 13.478 liabilities Long Capital Subordinated loans Deferred liabilities 56.134.852.009.876 1.351 311.026.000 8.259.

and Equity Profit and Loss Account Common size Horizontal analysis 2010 2009 (Rupees) in % Internship Report 76 .Reliance Weaving Mills Ltd.

073) (39.985.181) Profit for the year 31.127 (49.92 13.433.027 Earnings per share 1.877) (20.478 (2.447.625 17.891 (3.860.208 143.529.01 (91.058) 47.04 4.88 3 354.744.260) (6.40 -67.191 (4.041 ) -74.645) (76.535.406.160.369) (9.853) 278.381.959 ) 21.54 8.584.572 (48.503.597.639.Reliance Weaving Mills Ltd.593.414.690 -24. Sales Cost of sales Gross profit Other operating income Administrative expenses Distribution costs Other operating expenses Finance costs Profit / (loss) before taxation Provision for taxation (15.583.84 2 -18 120 3.666 39.928 10.031.611.421.699.335) 422.555 1.001) BALANCE SHEET COMMON SIZE HORIZONTAL ANALYSIS Internship Report 77 .840.400.10 3.404.671.054.84 27.989) (232.344.872) 32.249 (96.164 ) 123.365.998.861) (199.565.25 36.282.918.695) 3.89 16.974.16 and 346.122.048.962.361 (3.848.21 selling (50.

490 2.804.523.523.340 (72.340 2.132 32.830 2.683 706.854) 1.927 3.047) --------------3.57 1.177 (10.401 746.309 150.965.64 49. ASSETS: 2009 (Rupees) 2008 In % Noncurrent assets Property.537 2.036.801 229.63 1.62 5.916.865) (1.804.092.421.612.021.901 25.30 -47.863.177.65 12.59 -------3.421.062 and 1.515.193 70.422 60.737.08 -17.167 Current assets Stores.245 12.726.542.047) .021 3.229.793.434.572.926 -----------8.733) 70.707.513.722.Reliance Weaving Mills Ltd.852 (136.540.911.856 15.166.312.132 31.247 80.65 100 37.900 204.877 (72.963.718 39.643.72 -46.038.893.409.626.650.103 5.855.863. Plant and equipment Long-term deposits 92.457 286. spares loose tools Stock-intrade Trade debts Loan Trade deposits and payments Internship Report 78 and Advances 49.

406 25. Tax refunds due Other receivables Short Cash bank balances term and Investment from government Total Current assets 1.345.398 EQUITY AND Internship Report 79 .590 1.339.420 3.423.184 1.249.283 2009 2008 (47.88 TOTAL ASSETS 3.354.863) 1.379.439.Reliance Weaving Mills Ltd.688.392.763.

041.763.441 ----------102.392.193.259.54 23.238.660 (132.511 30.46 shares of Rs 837.000.339.140 1.08 -2.844.500 395.745.345.621.218 16.43 -11.176.035 8.081.966) -11.880.112.420 3.482 35.070.558.000 246.27 -1.190.500 395.020.400.553 (15.15 liabilities 43.517 term 1.880. and capital Reserves profit subs paid-up 1.666.811 18.545 123.487.025.396.147.423.361.501.824.000.219 ----------------------98.813 Noncurrent Long Finance Deferred 1.75 -11.364.700 1.000. LIABILITIES: In % Share capital and reserves Authorized Capital 30.369 109.702.478.081.876 other Capital 3.441 98.373) (134.062.Reliance Weaving Mills Ltd.327 1.44 Unappropriate1.338) -11.865.360) 14.283 (47.910 30.59 13.109.000 246.215 & 139.466.658.863) 80 Internship Report .469 738.162.000 ordinary 10 each Issued.756.904.327) (19.250 96.174.34 126.593) (2.314 (31.463.621.250 195.562 1.009 124.158.487.

liabilities 1.Reliance Weaving Mills Ltd.398 Current liabilities Current portion of long term liabilities Finance under markup arrangement Trade Interest mark-up accrued and and other payables Total Liabilities and Equity Profit and Loss Account Common size Horizontal analysis 2009 2008 Internship Report 81 in % .

092.369) (9.68 63. 78 53) 82 82) 496 51.8 (1.565.529. (27.67 29.061.742.316) (7.84 -12.51 123.644.05 Profit for the year 143.196.89 5.Reliance Weaving Mills Ltd.803.789.45 49.031.200 20.053 2.01 0 27.848.976.119 106.1 91 3.336.729.86 1.060.742) (93.765.7 896.71 (15.421.14 (2.248.287) (38.414.305.023) Earnings per share (20.249 95.41 2 28.357.406.671.122.962.645 ) 111.22 114.079 ) 20.651.716 4.0 71 164.572 (48.533 taxation Provision for taxation 257.248.465.915.584.840.433.691.4 2.625 17.073) (39.699.157.681 Internship Report 82 .973) 5 (2.861) before (199.035 28.76 32.650.552. (Rupees in) Sales Cost of sales Gross profit Other operating income Administrative expenses Distribution costs Other operating expenses Finance costs Profit / (loss) and selling 422.9 1.81 3.786 674.058) 32.42 74.756.

Vertical Analysis Internship Report 83 .Reliance Weaving Mills Ltd.

BALANCE SHEET COMMON SIZE VERTICAL ANALYSIS ASSETS: 2010 2009 Internship Report 84 .Reliance Weaving Mills Ltd.

97 % 55.241 % 3.98 % 7.Reliance Weaving Mills Ltd.07 % 58.03 % 2.78 % 22. Non-current assets Property.00% 2009 2008 8.00 % 22.032 % 0.46 % 0.33 % 1.00% 100. Plant and equipment Intangible assets Long-term investment Long-term deposits Current assets Stores.59 % 0.21 % 0.49 % 0.66 % 1.17 % 0.21 % 0.04 % 0.000.000 ordinary shares of Rs 10 each Issued.016 % 1.27 % 39.26 % 0.37 % 85 .69 % -------2.14% TOTAL ASSETS EQUITY AND LIABILITIES: Share capital and reserves Authorized Capital 30.6 % 5.07 % Total Current assets 42.04 % 0. subscribed and paid-up capital Internship Report 100.52 % 4.048 % 0. spares and loose tools Stock-in-trade Trade debts Loan and Advances Trade deposits and short-term payments Mark-up accrued Other receivables Short term Investment Tax refund due from government Cash and bank balances 3.87 % 4.22 % 2.32 % 6.

48 % Current liabilities Trade and other payables Interest and mark-up accrued Finance under markup arrangements Current portion of non-current liabilities 3.82 % Total Liabilities and Equity 100 % 100 % Profit and Loss Account Common size vertical analysis 2010 2009 Internship Report 86 .76 % 29.52 % 4.12 % 3.7 % 51.45 % 3.subordinated loans1.65 % 38.97 % 7.03% Non-current liabilities Long term Finance and other payables Deferred liabilities 20.29 % 35.81 % 43.102 % 0.Reliance Weaving Mills Ltd.81 % 5.25 % 1. Reserves Unappropriate profit 11.75 % 1.85 % 0.56 % Loan from related parties.83 % 25.84 % 25.33 % 11.71 % 1.

48 %) (1.47 %) 13.81 %) 10.25 %) (0.Reliance Weaving Mills Ltd.31 %) (6.96 % BALANCE SHEET COMMON SIZE VERTICAL ANALYSIS ASSETS: 2009 2008 Internship Report 87 .45 %) 4.65 %) 0.46 %) (0.94 % 3. Sales Cost of sales Gross profit Other operating income Administrative expenses Distribution and selling costs Other operating expenses Finance costs Profit / (loss) before taxation Provision for Taxation 11.83 %) 10.53% Profit for the year 1.57 % (1.39 %) 100 % (89.61 % (0.39 % (0.55 %) (1.178 %) (6.57 % (1.19% 100 % (86.

45 % 0.49 % 0.00% 2009 2008 7. Non-current assets Property.27 % 88 .17 % 1. spares and loose tools Stock-in-trade Trade debts Loan and Advances Trade deposits and short-term payments Tax refund due from government Other receivables Short term Investment Cash and bank balances 2.32 % 6.Reliance Weaving Mills Ltd.000 Ordinary shares of Rs 10 each Issued.78 % 0.76% Current assets Stores.11 % 1.25 % 60.49 % 0.69 % 0.72 % 58.78 % 22. Plant and equipment Long-term deposits 58.000.07 % 60.92% TOTAL ASSETS EQUITY AND LIABILITIES: Share capital and reserves Authorized Capital 30.048 % 2.00% 100.09 % -------0.37 % 20.83 % 6.03 % 8.37 % 7. subscribed and paid-up capital Internship Report 100.108 % 0.87 % 4.24 % 39.97 % 2.84% Total Current assets 41.01% 0.

53% .11 % 3.29 % 43.81 % 5.73 % 1.64 % 2.49 % 0.54 % Current liabilities Current portion of long term liabilities Finance under markup arrangements s Trade and other payable Interest and mark-up accrued 3.Reliance Weaving Mills Ltd.83 % 4. Reserves Unappropriate profit 11.02 % 11.11 % 35.24 % 1.85 % 21.47 %) 13.13 % 0.57 % Total Liabilities and Equity 100 % 100 % Profit and Loss Account Common size vertical analysis 2009 Sales Cost of sales Gross profit Internship Report 2008 100 % (87.51% 89 100 % (86.036 % 43.696 % 35.66 % 34.84 % 25.19 % 3.49 %) 12.76 % Non-current liabilities Long term Finance and other payables Deferred liabilities 30.

34 %) (1.61 % (0.31 %) (6.77 %) 3.25 %) (0. Due to this factor Gross Profit increased by Internship Report 90 .96 % 4.21% that show rising prices of raw material.39 %) 10.52 %) Profit for the year 4.42 % (0.66 % INTERPRETATION  Horizontal Analysis Horizontal analysis of 2007 and 2006 at RWML shows that sales increased by 8.35 %) (4.92 but CGS increased by 13.98 % (1.Reliance Weaving Mills Ltd.55 %) (1.57 % (1.86 %) (0.65 %) 5. Other operating income Administrative expenses Distribution and selling costs Other operating expenses Finance costs Profit / (loss) before taxation Provision for Taxation 10.

financial charges. Investment in stock in trade decreased by 19. Cash balance increased by 28.71%. Size of gross profit in proportion to sales has increased and that is the case with operating profit as well. taxes and to increase other income by considerable amount. financial charges.45% but CGS increased by 49.96% and 4. Horizontal analysis of 2006 and 2005 at RWML shows that sales increased by 51. CGS size has decreased from previous year that is good sign. This helped to fill gap created by CGS and as result NPAT increased by 28.18%.  Vertical analysis In Vertical analysis.66% in Internship Report 91 . fixed assets decreased by 2. While looking to balance sheet.4% but long term investments increased by 30%. Firm account receivable increased that means firm was not good to collect receivable.Reliance Weaving Mills Ltd. but firm was able to reduce its operating expenses. But in the short-term liabilities increased to 49%. This helped to fill gap created by CGS and as result NPAT increased by 74. fixed assets decreased by 2. While looking to balance sheet.25%. But important thing to note is that NPAT has increased by 0. But taxes and other charges size has decreased in proportion to sales. 3.88% but long term investments increased by 30%. but firm was able to reduce its operating expenses.84%.39%. 18%. Non-current liabilities decreased by 13% that shows efficiency. taxes and to increase other income by considerable amount.68% that show rising prices of raw material.94%. Due to this factor Gross Profit increased by 63.

138% in 2005 to 30.Reliance Weaving Mills Ltd.56% in 2005. Long-term investments and long term loans and advances are decreasing slightly in comparison with previous year. Firm has more inventory than previous year. Investment in fixed assets look to increased slightly but this factor is due to appreciation mainly and investment in fixed assets has increased but element of depreciation has reduced its value.57% in 2005 that mean owner’s contribution is equal to that of creditor.66% in 2006 and 29.82% in 2006 and 43. This is because of increase in sales. 2006 and 2005 respectively proportion to sales. 2007. Internship Report 92 . Trade debts have lesser weight in total assets than in 2007 a compare to 2006 and 2005. Longterm liabilities are decreasing from 34. SHE has increased from 51% in 2007 to 43. Now interesting thing to note is that value of total current assets in total assets has increased by 2% and 4% in proportion to total assets.

Ratios Analysis Ratio Analysis We have to analyze firm from five point of view. • • • • Liquidity Analysis Activity Analysis Debt Analysis Profitability Analysis 93 Internship Report .Reliance Weaving Mills Ltd.

Average Age of Inventory = No.Reliance Weaving Mills Ltd. Inventory turn Over = Cost of goods sold Inventory ii. Current Ratio = Current Asset Current Liabilities ii.Inventory Current Liabilities ACTIVITY ANALYSIS FORMULAS i. Acid test ratio or quick ratio = Current Asset. of working days Inventory turn over Internship Report 94 . • Marketability Analysis LIQUIDITY ANALYSIS FORMULAS i.

Account receivable turn over = No. of working days Average Payment Period vi.P C. of working days Average Collection period v.P Net Sale ii) Gross profit ratio on cost = G.S Internship Report 95 x 100 x 100 .Reliance Weaving Mills Ltd. Account Payable turn over = No. iii. Fixed asset turn over = Net sale Net fixed Asset PROFITABILITY RATIOS FORMULAS i) Gross Profit Ratio on Sale = G. Average collection period = Account Receivable Average Sale per day iv.G.

.A. iii) Operating Profit ratio = operating Profit Sale x100 iv) Net Profit ratio = Net Profit after taxes Net sale x100 v) Return on asset (ROA) = Net Profit after taxes Total asset x100 MARKET ABILITY RATIOS FORMULAS i) Earning Per Share (EPS) = N.T. share Out Standing Stock ii) Dividend Pay out ratio Internship Report = Dividend P.S x100 96 .Divto P.P.Reliance Weaving Mills Ltd.

EPS Internship Report 97 .Reliance Weaving Mills Ltd.

84times 2010 1: 0.98times The ratios show that the company’s current liabilities and current assets are almost equal.74times 2009 1: 0. QUICK OR ACID TEST RATIO 2008 1: 0.Reliance Weaving Mills Ltd. So the co. CURRENT RATIO 2008 1: 0. CALCULATION OF RATIOS LIQUIDITY ANALYSIS It shows the firm’ ability to pay its short-term obligation on time. So the company is liquid position is very strong.48times The company’s quick ratio has increased.59times 2008 1: 0. Internship Report 98 .75times 2009 1: 0. is in a position to meet its current liabilities on time.

Reliance Weaving Mills Ltd.2times 2009 4. So the company’s debtor collection period mostly depends upon the opening of letter of credit. It means that the sale of the co.2times in 2008. INVENTORY TURNOVER RATIO 2008 3.0times The co. ACTIVITY ANALYSIS Activity analysis shows the speed through which various current accounts are converted into cash and measures the efficiency of management that how productively it is utilizing assets to generate desire results.0times in 2010 into cash against the conversion of 4. DEBTOR COLLECTION PERIOD 2008 92 days 2009 87days 2010 44days Company’s credit collection performance is depended upon L/C by the buyer. has been increased. is converting the inventory 6. CREDITOR’S TURNOVER RATIO Internship Report 99 .8times 2010 6.8times of 2009 and 3.

3 times 2009 11. 2008 10. is making payment to the creditors within reasonable time period.Reliance Weaving Mills Ltd. FIXED ASSETS TURNOVER RATIO 2008 0.24 times 2010 2.50times 2010 12.02 times PROFITABILITY ANALYSIS Internship Report 100 .93times 2009 1.20times This ratio shows that the co.

Reliance Weaving Mills Ltd.57% 2010 2. is very ideal. GROSS PROFIT RATIO 2008 16.57% Internship Report 2009 10.40% 2009 1. The efficiency of the firm can be analyzed through its profits.59% 2010 15.32% 2009 15. OPERATING PROFIT RATIO 2008 10. NET PROFIT RATIO 2008 1.P.7% The company’ profit is increasing with the passage of time. It is because of its 90% exports.30% Cost of goods sold has remain more or less constant while conversion rate of $ is being higher therefore G.70% 2010 10.85% 101 .

It is because of hiring of new employees which increases the salaries of the co.49% Return on assets ratio has increased because of increase in profits.48% 2010 7.Reliance Weaving Mills Ltd. MARKETABILITY ANALYSIS EARNING PER SHARE 2008 Internship Report 2009 2010 102 . There is little increase in profit of the co. RETURN ON ASSETS 2008 2.69% 2009 3.

Rs. DIVIDEND DECLARATION 2008 6.50% LEVERAGE ANALYSIS Leverage analysis is used to measure the degree of indebt ness (up to what extent the firm is in debtness).Reliance Weaving Mills Ltd.67 Rs.2.50% 2010 7.82 The shareholders are earning Rs.48 Rs. DEBT RATIO Internship Report 103 .2.2.7% 2009 7.82 against one share in 2010. which is more than in 2009 & 2008.2.

i-e. • • Interest payment Lease payment t Internship Report 104 . 2008 57% 2009 68. COVERAGE RATIO ANALYSIS Coverage ratio is used to see the ability of a firm to pay its fixed financial cost.Reliance Weaving Mills Ltd.78% 2010 76% DEBT-EQUITY RATIO 2008 186% 2009 322% 2010 220% RWML is heavily depending on the outsider’s financing.

• Dividend to preferred stockholders TIME INTEREST EARNED RATIO 2008 1.27times 2009 1.36times 2010 1.56times RWML is paying interest 1.Reliance Weaving Mills Ltd.56times in a year. which is greater than previous years. DECISIONS ON THE BASIS OF RATIO ANALYSIS SHORT-TERM CREDITOR Internship Report 105 .

having a good market price of its stock. 72.54% and 68. Internship Report 106 . 2009 and 2010 respectively. LONG-TERM EQUITY INVESTOR As the co. LONG-TERM INVESTOR As the firm’s debt ratio is good in both the years’ I-e 76%. on the basis of this it is wise to invest in RWML as long-term supplier of funds. Moreover the co. is declaring dividend every share and has a strong image in the market. On the basis of analysis it is wise to invest as a short-term supplier of funds in RWML because firm’s current ratio and quick ratio are in positive..Reliance Weaving Mills Ltd.78% in 2008. Moreover the firm’s working capital is positive in both the years. operating and net profit ratios are increasing in both the years and earning per share ratio is also increasing. So RWML is quiet suitable for the investor to invest in it. So.

USA. is much better than the other weaving units in textile industry.  There is a need of searching the new customers in international market. Internship Report 107 . They are becoming quality conscious.  RWML is saving a huge cost in the field of marketing because its Chief Executive is extra vigilant.  RWML has no marketing department to promote and introduce its products in international market. RWML has vast markets of Japan. In this respect co.K therefore co. H. is saving more of less. There is a crucial need for having disciplined and coordinated program of marketing to boost up the exports. I come to know that the financial position of the co.  There is tough competition in textile exports. is going to the installation of 200 looms with complete back up process as well. So that they can enhance their sale volume because of going to its expansion as double capacity. Buyers are demanding quality and economy in their purchase contracts.Reliance Weaving Mills Ltd. COMMENTS AND SUGGESTIONS  After a short careful analysis. Taiwan.

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