Nishat Millls ltd.-1

University of the Punjab
INTERNSHIP REPORT
ON
NISHAT MILLS LIMITED
Submitted To:
Prof. Dr. Muhammad Aamir

Assistant Professor
Hailey College of Commerce
Submitted By:
Name : Salman Naveed
Roll No. : BC18-613
Program : B.com Hons
Session : 2018-2022
Hailey College of COMMERCE, LAHORE
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In the name of Allah the beneficent, the merciful
If you are grateful, I will Give you MORE
Surah Ibrahim (v.7)
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LETTER OF TRANSMITTAL
To,
Prof. Dr. Muhammad Aamir,
Hailey College of Commerce,
University of the Punjab,
Lahore.
Subject: Submission of Internship Report.
Respected Sir,
This is a great pleasure for me to submit this internship report on Nishat Mills
Limited which is compulsory part for completion of Bachelor of Commerce
(Marketing Program) in University of the Punjab. This report has been prepared
during my internship program at Nishat Mills Limited. In this report I tried to
illustrate the system practiced by this organization.
I tried to present whatever I found and observed in Nishat Mills Limited during my
internship program. I hope the report will provide a complete overview of Nishat
Mills Limited, to the readers. You are kindly requested to accept the report for my
viva voce.
Yours Obediently,
Salman Naveed
Roll No BC18-613
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PREFACE
This internship report contain on depth finding of Nishat Mills Limited. The
purpose of internship and writing the report thereon to understand that what is
happening in the organization in reality and is to observe practically the
relationship between theoretical knowledge and its practical application.
The duration of my internship was eight weeks. During my internship I was
rotated to several departments to learn how the company works. In different
departments the managers and responsible people helped me a lot to create my
report as well as to understand how each department operates. The main
department in which I worked during my stay was Finance And Marketing
departments.
The report states the textile history and especially about Nishat Mills from
beginning till today. I pay my gratitude to my instructor, who provided me the
opportunity to perform different tasks which helped me a lot to grow in my
thinking and enhance my learning capacity.
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ACKNOWLEDGEMENT
Starting with the name of ALLAH, The Most Merciful and The Most Gracious.
Thanks to ALLAH Almighty, I have completed this report just with the help of My
ALLAH countless blessing be upon Holy Prophet MUHAMMAD (S.A.W.W) .It
was a nice experience for me to complete my dissertation at NISHAT Mills
Limited.
I would like to express my thanks and appreciation to my parents and to my
Brothers. The stimulation and encourage from them has always been remarkable
for me. I am also thankful to all the staff in Nishat Mills Limited, who helped me
to complete this report by answering my question and by helping me to
understand how I would can use my theoretical study in my practical life. I am so
thankful for the Nishat Mills Limited that they gave me a chance to work there.
I am also thankful for my supervisor for his persistent support. He guided me with
his knowledge, experiences, skills and positive suggestions and also gave
instructions which will be of great help to me in my future life.
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I dedicate this report to my parents and brothers as they always gave me

courage and strength to more for my rights and goals. I also dedicate this
report to my teachers who gave me knowledge and they became source
of wisdom for me.
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Contents
1. EXECUTIVE SUMMARY..................................................................................10
2. HISTORY OF NISHAT MILLS LIMITED...........................................................11
3. Textiles Exports from Pakistan.........................................................................11
4. THE FOUNDER................................................................................................12
5. THE CHAIRMAN.............................................................................................. 13
6.Growing Sustainably..........................................................................................13
7. VISION MISSION STATEMENTS....................................................................14
7.1 DEFINITION................................................................................................... 14
7.2 NISHAT’S VISION..........................................................................................14
7.3.1 DEFINITION................................................................................................ 14
7.4 NISHAT’S MISSION......................................................................................14
8. CORE VALUES OF THE ORGANIZATION......................................................15
9. NISHAT GROUP.............................................................................................. 16
10.2 CORPORATE DEPARTMENT..................................................................17
10.3 AUDIT COMMITTE..................................................................................18
10.3.1 AUDITOR...............................................................................................18
10.4 HUMAN RESOURCE & REMUNERATION (HR & R) COMMITTEE........18
10.5 LEGAL ADVISOR.................................................................................... 18
11. Director’s Profile............................................................................................. 19
12. BANKERS TO THE COMPANY:...................................................................22
13. MILLS............................................................................................................. 23
14. REGISTERED OFFICE & SHARES DEPARTMENT.................................23
15. DEPATMENTALIZATION OF NISHAT MILLS LIMITED................................26
16. THE COMPANY AND ITS OPERATIONS.................................................26
17. DIFFERENT SECTORS OF NISHAT MILLS LIMITED...............................................29
18. PRODUCTION UNITS OF NISHAT MILLS LIMITED.....................................30
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19. INFORMATION TECHNOLOGY FOR NISHAT MILLS LIMITED...................37
20. COMPANY ENVIRONMENT.........................................................................37
21. HUMAN RESOURCE MANAGEMENT OF THE COMPANY........................37
22. BUSINESS ANAYLSIS OF NISHAT MILLS...................................................38
23. CORPORATE STRATEGIES........................................................................39
23.1 Marketing Strategies....................................................................................39
23.2 Diversification Strategy................................................................................39
23.3 Market Development...................................................................................39
23.4 Contacting Old Customers...........................................................................40
23.5 New And Innovative Product Development.................................................40
23.6 More Quality Conscious...............................................................................40
24. RATIO ANALSIS & H,V Analysis...................................................................41
24.1 Horizontal Analysis......................................................................................48
24.2 Vertical Analysis.......................................................................................... 49
25. SWOT ANALYSIS OF NISHAT MILLS LIMITED...........................................50
25.1.1 ISO 9001-2000......................................................................................51
25.1.2 Strong Security System.........................................................................51
25.1.3 OKTEX 100...........................................................................................51
25.1.4 High quality product..............................................................................51
25.1.5 Latest mechanized machinery...............................................................51
25.1.6 Tremendous market positioning............................................................51
25.1.7 Highly qualified and skilled management..............................................51
25.2.1 High cost of production.........................................................................52
25.2.2 Centralized decision making.................................................................52
25.2.3 Weak image in the international market................................................52
25.2.4 Small international market share............................................................52
25.2.5 Less promotional activities....................................................................52
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25.3.1 Organization can expand product lines.................................................52
25.3.2 Organization can reduce the cost by proper utilization of resources.....53
25.3.3 Organization can hire more well-educated and experienced person....53
25.4.1 Buyer needs demands changes............................................................53
25.4.2 Political instability..................................................................................53
25.4.3 Change of government policies.............................................................53
25.4.4 Global Economic instability...................................................................53
26. I WORKED AS AN INTERNEE IN THESE DEPARTMENTS........................54
27. MY LEARNING DURING INTERNSHIP PERIOD......................................54
27.1 Yarn Marketing Department........................................................................55
27.2 EXPORT DOCUMENTATION DEPARTMENT........................................55
27.3 IMPORT DOCUMENTATION DEPARTMENT.........................................56
27.3.6 FINANCE DEPARTMENT.....................................................................57
28. WORK DONE BY ME................................................................................ 57
29. CONCLUSION AND RECOMMENDATIONS............................................60
30.Financial Statements.......................................................................................62
30.1 Balance Sheet.............................................................................................. 63
30.2 Profit and Loss Account................................................................................66
30.3 Income Statement.........................................................................................67
30.4 Cash Flow Statement................................................................................... 68
Cash Flows From..................................................................................................... 68
30.5 Statement of Changes in Equity...................................................................70
31. Bibliography.................................................................................................72
32. Special Thanks............................................................................................... 72
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1. EXECUTIVE SUMMARY
Nishat has grown from a cotton export house into the premier business group of
Pakistan with 5 listed companies concentrating on 4 core businesses Textile,

Cement, Banking and Power generation. Today Nishat is considered to be at
par with multinationals operating locally in terms of its quality products and
management skills.
I recently have done my internship at Nishat Mills Limited, in textile unit which is
famous for the production of home furnishing products all over the world. During
this internship, I got opportunity to obtain training in all of its departments. The
internship basically revolved around the product knowledge, training and mainly
on the processing and how do the departments manage such a big setup. The
system, the style of working & the commitment of the employees in Nishat Mills
Limited is really exemplary.
The difference between the success & the failure is doing things right and doing
things nearly right, Nishat Mills Limited has always tried for success & that is why
it is known as one of the leading organizations in Pakistan. Irrespective of all
these positive points of Nishat Mills Limited, I have noticed a few areas where
the improvement can really increase the efficiency of Nishat Mills Limited.
I have also given a brief history of this big company, that how does it come into
being and what is the leadership spirit that has put this organization at such a
nice spot to have a better view of the future. I have also discussed in brief the
basic things that are necessary to know for textile business like the overview of
the whole production process, mainly used threads and their properties and end
users.
2. HISTORY OF NISHAT MILLS LIMITED
Nishat Mills Limited, (NML), commenced business in 1951 as Partnership
concern, which was converted into a private limited company in 1959. In 1969,
the company went public and was listed on the Karachi Stock Exchanges, the
only stock exchange in the country at that time.
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Nishat Mills Limited started out as a weaving unit with 500 semiautomatics. Later
on 10,000 spindles were added, laying the foundations of nation’s biggest textile
composite project. Nishat Mills Limited has 165,800 spindles, 338 Sulzer shuttle-
less looms and 180 TSUDAKOMA air jet looms. Nishat Mills Limited also has the
country’s largest textile processing unit, a stitching unit and Power Generating
plant with the capacity of 9 MW is in progress.
Nishat Mills Limited earned a pretax profit of Rs. 4,389,925 thousands in 2020.
Due to the application of prudent management policies, consolidation of
operations a strong balance sheet and an effective marketing strategy, this trend
is accepted to continue in the years to come.
The company’s production facilities comprise of spinning, weaving, processing,
stitching and power generation.
3. Textiles Exports from Pakistan
Textiles constitute a major exporting sector for Pakistan, which accounts for
about 60% of the country’s total foreign exchange earnings the major export
items are yarn, gray cloth, finished cloth, towels and bed sheets and their major
customers are the USA, EU, Japan and Hong Kong. Many textile exports take
place under quota arrangements With the EU and the United States. Gray cloth
constitutes roughly 16-18% of total cloth Exports from Pakistan.
Nishat gray cloth exports account for roughly 20 % of Pakistani gray cloth
exports. The Firm has been exporting to the USA for many years, and has only
recently started to export to EU countries.
In Pakistan, the cotton crop season runs approximately from August to March.
Prices are generally high at the start of the season in August/September, and fall
later on as supply increases. Following income tax law, the fiscal year runs from
October to September for textiles sector. Nishat mills limited commenced
business in 1951 as a partnership concern, which was converted into private
limited company in 1959. In 1961, the company went public and was listed on the
Karachi stock exchange, the only stock exchange in the country at that time.
Nishat mills limited started out as a weaving unit with 500 semi-automatic looms;
later 10000 spindles were added, laying the foundation on nation’s biggest
textiles composite project. Composite project at Nishat mills limited Faisalabad
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covering 98 acre of land is providing all production process under one roof i.e.
spinning, weaving, processing, stitching and power generation.
4. THE FOUNDER
A man of vision, courage and integrity, Mian Mohammad Yahya was born in
1918 in Chiniot. In 1947 when he was running a leather business in Calcutta, he
witnessed the momentous changes that swept the indo pak sub-continent and
resulted in the emergence of Pakistan. Like many of his contemporaries, he also
migrated to the new country to help establish its industrial base. His is a story of
success through sheer hard work and an undaunted spirit of enterprise.
Beginning with a cotton export house, he soon branched out into ginning, cotton
and jute textiles, chemicals and insurance. He was elected Chairman of All
Pakistan textile Mills Association (APTMA), the prime textile body in the country.
He died in 1969, at the age of 51 having achieved so much success in so short
a time.
5. THE CHAIRMAN
Mian Muhammad Mansha is the chairman of the Nishat mills limited. His sons have
aspired by him as well and they continues the spirit of entrepreneurship and has led
the group to become a multi dimensional corporation, with wide ranging interests.
the country with 5 listed companies, concentrating on 4 core business, Textiles,
Cement, Banking, and Power Generation. Today, Nishat is considered to be at
management skills.
Nishat continue to strive to be a better group today than what they were
yesterday, for their customers, for their shareholders, for their investors, for the
environment, for the community and for their employees, for it is with them that
Nishat has achieved so much success in last fifty years.
6.Growing Sustainably
Nestled deeply in the roots of a sprouting tree, lay the foundations of its very
existence. As part of the tree’s evolving growth, these footings become an
element of its core structure – rising freely, albeit slowly towards a greater height.
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With time, the tree is able to push boundaries and branch out towards
unexplored realms, casting its shade on everything that falls beneath its towering
presence.
Nishat continue to strive to be a better group today than what they were
yesterday, for their customers, for their shareholders, for their investors, for the
environment, for the community and for their employees, for it is with them that
Nishat has achieved so much success in last fifty years.
the country with 5 listed companies, concentrating on 4 core business, Textiles,
Cement, Banking, and Power Generation. Today, Nishat is considered to be at
management skills.
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7. VISION MISSION STATEMENTS
7.1 DEFINITION
Vision statements answer the question:
7.1 .1 What do we want to become?
A clear vision provides the foundation for developing a comprehensive

mission statement.
7.2 NISHAT’S VISION

The vision of the company is to transform the Company into a modern and
dynamic yarn, cloth and processed cloth and finished product
manufacturing Company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan. To transform the Company
into a modern and dynamic power generating Company that is fully
equipped to play a meaningful role on sustainable basis in the economy of
Pakistan.
7.3 MISSION STATEMENT
7.3.1 DEFINITION
Mission statements answer the question:
7.3.2 What is our business?
It should include the priorities and values of the organization.
7.4 NISHAT’S MISSION

The mission of the company is to provide quality products to customers
and explore new markets to promote/expand sales of the Company
through good governance and foster a sound and dynamic team, so as to
achieve optimum prices of products of the Company for sustainable.
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The objectives of the firm are to keep sustain ability, reliability, durability of
product and simultaneously having profit from the products.
8. CORE VALUES OF THE ORGANIZATION
 To enhance the profitability of the Company.
 To increase the overall efficiency and productivity of the Company.
 To become the market leader by outshining the competitors and be

an innovative Company by introducing new ideas.
 To expand sales to the global marketplace by anticipating customer

needs and develop and maintain strong customer base.
 To monitor and improve internal processes to achieve efficiencies,

improve organizational structure and ensure the best use of
available resources.
 To follow the latest technology trends and their implementation in

the Company to enhance the Overall productivity.
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9. NISHAT GROUP
Chairman Name
Mian Muhammad Mansha
Nishat Group
Nishat Adam Gee Nishat
Pakistan DG Khan Nishat
MCB Mills Insurance
Aviator Cement Power linen
Limited Company
Nishat Units
Yarn Fabric Dying Home Textile Nishat Apperal
10. CORPORATE’S INFORMATION
10.1 BOARD OF DIRECTORS:
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 Mian Umer Mansha
 (Chief Executive Officer)
 Mian Hassan Mansha
 (Chairman)
 Mr. Syed Zahid Hussain
 Mr. Khalid Qadeer Qureshi
 Mr. Maqsood Ahmed
 Miss Nabiha Shahnawaz Cheema
 Mr. Saeed Ahmad Alvi
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
 Mr. Badar-ul-Hasan
10.2 CORPORATE DEPARTMENT
 Mr. Khalid Mahmood Chohan
(Company Secretary)
10.3 AUDIT COMMITTE
(Chairman / Member)
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 Syed Zahid Hussain
(Member)
 Miss Nabiha Shahnawaz Cheema
10.3.1 AUDITOR
 Riaz Ahmad & Company
(Chartered Accountant)
10.4 HUMAN RESOURCE & REMUNERATION (HR & R) COMMITTEE
 Mian Hassan Mansha
Chairman / Member
Member
Member
 Ms. Nabiha Shahnawaz Cheema
Member
 Mr. Badar Ul Hassan .
Chief Financial Officer
10.5 LEGAL ADVISOR
 Mr. M. Aurangzeb Khan, Advocate,
Chamber No.6, District Court,
Faisalabad
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11. Director’s Profile
Mian Umar Mian Hassan Mr. Syed Mr. Khalid

Mansha Mnasha Zahid Hussain Qadeer
(Chief (Chairman) (Non Qureshi (Non
Executive Executive Executive
Officer) Director) Director)
Ms. Nabiha Mr. Maqsood Mr. Saeed Ahmad

Shahnawaz Cheema akhtar Alvi
(Non EXecutive ( Executive Director
) (Non- Executive
Director) Director)
11.1 Mian Umer Mansha holds a Bachelors degree in Business

Administration from USA. He has been serving on the Board of Directors
of various listed companies for more than 18 years. He also serves on the
Board of Adamjee Insurance Company Limited, MCB Bank Limited,
Adamjee Life Assurance Company Limited, Nishat Dairy (Private) Limited,
Nishat Hotels and Properties Limited, Nishat (Aziz Avenue) Hotels and
Properties Limited, Nishat (Raiwind) Hotels and Properties Limited, Nishat
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(Gulberg) Hotels and Properties Limited, Nishat Developers (Private)

Limited, Nishat Agriculture Farming (Private) Limited and Nishat Farms
Supplies (Private) Limited.
11.2 Mian Hassan Mansha has been serving on the Board of

various listed companies for several years. He also serves on the Board
of Nishat Power Limited, Security General Insurance Company Limited,
Lalpir Power Limited, Pakgen Power Limited, Nishat Hotels and
Properties Limited, Nishat (Aziz Avenue) Hotels and Properties Limited,
Nishat (Raiwind) Hotels and Properties Limited, Nishat (Gulberg) Hotels
and Properties Limited, Nishat Hospitality (Private) Limited, Nishat Dairy
(Private) Limited, Pakistan Aviators and Aviation (Private) Limited, Nishat
Automobiles (Private) Limited, Nishat Real Estate Development Company
(Private) Limited, Nishat Agriculture Farming (Private) Limited and Nishat
Farms Supplies (Private) Limited.
11.3 Mr. Khalid Qadeer Qureshi is a fellow member of the Institute

of
Chartered Accountants of Pakistan. He has over 43 years of rich

professional experience. He also serves on the Board of D.G. Khan
Cement Company Limited, Nishat Power Limited, Lalpir Power Limited,
Pakgen Power Limited, Nishat Paper Products Company Limited and
Nishat Commodities (Private) Limited.
11.4 Syed Zahid Hussain is a seasoned professional in Pakistan’s
corporate world. He possesses multi-faceted talents and has attained
exemplary accomplishments. He has in-depth knowledge of a wide range
of subjects and has extensively diversified experience and exposure in
senior positions. He has earned B.Sc, LLB and MA in International
Relations. He has a vast experience of working as Chairman/Chief
Executive/Director of various state owned enterprises and listed
companies.
He has also served as the High Commissioner/Ambassador of Pakistan
based in Kenya, with accredited assignments of Ambassadorship in
Tanzania, Uganda, Rwanda, Krundse, Ethiopia and Eritrea. He is a fellow
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member of the Institute of Management, England, International

Biographical Center, the USA and the Institute of Marketing Management,
Karachi.
11.5 Ms. Nabiha Shahnawaz Cheema is a fellow member of the
Institute of Chartered Accountants of Pakistan and she is a Certified
Director by completing the Director’s Training Program from ICAP. She
has more than 15 years of professional experience. She also serves on
the Board of Security General Insurance Company Limited, D.G. Khan
Cement Company Limited and Nishat Hospitality (Private) Limited.
11.6 Mr. Maqsood Ahmad holds a Masters degree and a rich
professional experience of over 23 years in the textile industry, especially
in the spinning business. He is a Certified Director by completing the
Director’s Training Program from ICAP. He is actively involved in the
strategic decisions relating to the operations of the Company.
11.7 Mr. Saeed Ahmad Alvi has served over 36 years in Pakistan
Administrative Service (Ex-District Management Group) and retired as a
Federal Secretary. He brings with him a vast experience of policy and

program implementation, working at the executive tiers at the
SubDivisional, District, Divisional, Provincial and Federal levels. He has
also served as ex-officio Director on some of the Boards of public sector
companies and special institutions. He obtained a Masters degree in
Development Studies from UK in addition to Masters Degrees in History
and Pakistan Studies from Pakistan and also a Bachelors degree in Law.
Mr. Alvi is a Certified Director by completing the Director’s Training Program
from ICMAP.
He also serves on the Boards of Nishat Power Limited, Lalpir Power
Limited, Nishat Hotels and Properties Limited, Nishat (Gulberg) Hotels
and Properties Limited, Nishat (Raiwind) Hotels and Properties Limited,
Nishat (Aziz Avenue) Hotels and Properties Limited and Nishat Real
Estate development Company (Private) Limited.
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12. BANKERS TO THE COMPANY:

 Albaraka Bank Limited
 Allied Bank limited
 Askari Bank Limited
 Bank Alfalah Limited
 Bank Islami Pakistan Limited
 Burj Bank Limited
 Citibank N.A
 Deustsche Bank AG
 Dubai Islami Pakistan Bank Limited
 Faysal Bank Limited
 Habib Metropolitan Bank Limited
 JS Bank Limited
 Meezan Bank Limited
 National Bank of Pakistan
 Summit Bank Limited

 Silk Bank Limited
 Standard Chartered Bank (Pakistan) Limited
 The Bank of Punjab
 United Bank Limited
 Industrial and Commercial Bank Of China Limited
 NIB Bank Limited
 Pak Burnei Investment Company Limited
 Pakistan Kuwait Investment Company (Private) Limited
 Samba Bank Limited
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13. MILLS
 Spinning Units, Yarn Dyeing & Power Plant o
Niashatabad, Faisalabad
 Spinning Units & Power Plant o 20 K.M.
Sheikhupura Faisalabad Road, Feroze
Watwan.
 Weaving Units & Power Plant o 12 K.M.
Faisalabad Road, Sheikhupura.
 Weaving Units, Dyeing & Finishing unit,
Processing unit, stitching unit
& Power Plants o 5 K.M. Nishat Avenue Off 22 K.M. Ferozepur

Road, Lahore.
 Stitching Unit o 21 K.M. Ferozepur Road,
Lahore.
 Apparel Units o 7 K.M. Nishat Avenue Off 22
K.M. Ferozepur Road, Lahore.
o 2 K.M. Nishat Avenue Off 22 K.M. Ferozepur Road, Lahore.
14. REGISTERED OFFICE & SHARES DEPARTMENT

Nishat House,
53- A, Lawrence Road, Lahore.
Tel: 042-363630154, 042-111 113 333
Fax: 042-36367414
LIAISON OFFICE:
1st Floor, Karachi Chamber Hasrat Mohani Road, Karachi. 0
Tel: 021-32414721-23
Fax: 021-32412936
HEAD OFFICE:
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7, Main Gulberg, Lahore.
Tel: 042-35716351-59,
042-111 332 200
Fax: 042-35716349-50
E-mail: nishat@nishatmills.com
Website: www.nishatmillsltd.com
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BOARD OF DIRECTOR
ORGANIZATION BOARD
COMMITTEES
CHART
AUDIT
COMMITTEES
CHIEF EXECUTIVE OFFICER

HR COMMITTEES
SPINNING HR
DIVISION MANAGEMENT
WEAVING INTERNAL AUDIT

DIVISION
APPAREL FINANCE & MIS

DIVISION
POWER DIVISION SUPPLY CHAIN

MANAGEMENT
PROCESSING
CORPORATE
DIVISION
SECRETARIAT
PRODUCTION
DYING &
FINISHING
MARKETING
PROCESSING
& STITCHING
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15. DEPATMENTALIZATION OF NISHAT MILLS

LIMITED
Marketing
Department
Production and
Accounts
Operation
Department
Department
Export
Finance
Documentation
Department
Department
Import
Documentation
Department
16. THE COMPANY AND ITS OPERATIONS
Nishat Mills Limited is a public limited Company incorporated in Pakistan

under the Companies Act, 1913 (Now Companies Ordinance, 1984) and
listed on all Stock Exchanges in Pakistan. Its registered office is situated
at 53-A, Lawrence Road, Lahore. The Company is engaged in the
business of textile manufacturing and of spinning, combing, weaving,
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bleaching, dyeing, printing, stitching, apparel, buying, selling and

otherwise dealing in yarn, linen, cloth and other goods and fabrics made
from raw cotton, synthetic fiber and cloth and to generate, accumulate,
distribute, supply and sell electricity.
The Board of Directors of the Company in their meeting held on 24
February 2015 approved the Scheme of Compromises, Arrangements
and Reconstruction under sections 284 to 288 of the Companies
Ordinance,
1984 between Nishat Spinning (Private) Limited and its members and
Nishat Linen (Private) Limited and its members and Nishat Mills Limited
and its members. The scheme was approved by shareholders of the
aforesaid companies in their respective Extra Ordinary General Meetings
(EOGMs) held on 21 April 2015 and respective EOGMs with
CoChairpersons appointed by Honorable Lahore High Court, Lahore held
on 27 June 2015. The Honorable Lahore High Court, Lahore, has
approved the scheme by way of order dated 6 October 2015 with effect
from 31 December 2014. The main objects of the scheme are: to effect
merger of Nishat Spinning (Private) Limited (NSPL) with and into Nishat
Linen (Private) Limited (NLPL) and the Company; and to separate the
Sewing Undertaking (comprising of building, plant and machinery, related
assets and inventory of Sewing Unit of the Company) from the Company
and transfer and vest the same with and into NLPL.
As per the aforesaid scheme, the issued, subscribed and paid-up share
capital appearing in the books of account of NSPL has been set off against
the respective investment appearing in the books of account of the Company.
16.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these

financial statements are set out below.
These policies have been consistently applied to all years presented, unless
otherwise stated.
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a) Statement of Compliance
These financial statements have been prepared in accordance with

approved accounting standards as applicable in Pakistan. Approved
accounting standards comprise of such International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board
as are notified under the Companies Ordinance, 1984, provisions of and
directives issued under the Companies Ordinance, 1984. In case
requirements differ, the provisions or directives of the Companies
Ordinance, 1984 shall prevail.
b) Accounting Convention
These financial statements have been prepared under the historical cost
convention except for the certain financial instruments carried at fair value.
c) Critical Accounting Estimates and Judgments
The preparation of financial statements in conformity with the approved

accounting standards requires the use of certain critical accounting
estimates. It also requires the management.
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17. DIFFERENT SECTORS OF NISHAT MILLS LIMITED
Nishat Group is one of the leading and most diversified business

conglomerates in South East Asia with fixed/ current assets of over
Rs.300 billion (US$ 5 billion), it ranks amongst the top five business
houses of Pakistan. The group has strong presence in three most
important business sectors of the region namely Textiles, Cement and
Financial Services. In addition, the Group also has reasonable market
share in Insurance (Adamjee and Security General), Power Generation,
Paper products (Nishat Shoaiba Paper Mills) and Aviation (Phonix
Aviation). It also has the distinction of being one of the largest players in
each sector. The Group has a remarkable position in the market as good
as any multinationals operating locally in terms of its quality of products,
services and management skills. The tradition of quality, in products and
business practice, runs unbroken through the history of Nishat group since
its inception in 1950.
17.1 Textiles Sector
Nishat Mills Limited, the flagship company of the group was established in
1951. NML with the production facility of 227,640 spindles, 789 looms and
dyeing & printing capacity of more than 7 million meters (7.65 million
yards) makes Nishat the largest composite textile set up in Pakistan.
17.2 Cement Sector
D.G. Khan Cement Company Limited (DGKCC), a unit of Nishat group, is

the largest cement-manufacturing unit in Pakistan with a production
capacity of more than 5,500 tons clinker per day. It has a countrywide
distribution network and its products are preferred on projects of national
repute both locally and internationally due to the unparallel and consistent
quality. It is listed on all the Stock Exchanges of Pakistan.
Furthermore, the Group has also set up a new cement production line of
6,700 TPD clinker near Kalar Kahar district Chakwal, the single largest
production line in the country.
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18. PRODUCTION UNITS OF NISHAT MILLS LIMITED

The Company’s production facilities comprises of:
 Spinning
 Weaving
 Processing
 Design studio
 Engraving
 Rotary screen printing section
 Finishing section
 Dyeing section
 Inspection and rolling section
 Quality control section
 Stitching units
 Power generation
18.1 SPINNING
Nishat Mills Limited initially started business with 10,000 spindles, which
later on with the gradual increase reached 165,800. The entire machinery
is from world-renowned manufacturers from Japan. A China and Europe
for reaching high quality standards, research and development is
imperative for which Nishat Mills has state of the art yarn and cotton
laboratories with world class scaling standards. Cotton is procured at the
start of the season to avoid any variation, which, can occur in the crop
from time to time enabling the mills to produce a consistent quality all the
year round. For this purpose a fully equipped cotton laboratory with
HVI900/I and ASIF-N is working day and night during the cotton season to
select the best quality crop to be purchased.
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NML spinning is operationally organized into seven spinning units, each

with a distinctive product range and capacity to keep a check on the
quality standards, every cone undergoes inspection before packing to
ensure that the buyer gets only the best out of the lot.
NML spinning is thus renowned for being one of the most trusted brand
names in the market enjoying the trust and confidence of the consumer’s
world over.
18.2 WEAVING
NML weaving enjoys the reputation for being the market leader in the loom
state fabric business in Pakistan. Their fabrics are not only rated as the
top quality in the country but also enjoy a premium for their superior
quality all over the world. Supported by their own in house spinning units,
the weaving sector of Nishat mills limited produces fabric range from light
to heavy percales to satin and traditional to twill dobby items.
Their fabric is well established all over the world with their exports going to
the America the Far East, Africa, Australia Europe and Japan. Besides
export they are also supplying grey fabric to their dyeing and printing units.
18.3 PROCESSING
Nishat processing plant with a monthly capacity of 3 million meters is one
of the largest processing facilities of Pakistan. With an array of month
modern machines, it is the geared to meet the ever increasing the demand
of their client. The processing division has been divided in two different
sections to facilitate uninterrupted process flow and to insured quality
control at all stages almost 75% chemical and dyestuff being used is of
European origin. An independent quality control department with a strong
backing of fully equipped laboratory insured quality standard at all level.
The processing plant has recently been awarded ISO –9001 Certification,
yet another achievement in this regard by Nishat mills limited.
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18.4 DESIGN STUDIO

The state-of-art design studio, known for producing transparencies of the
highest quality, accommodates a STORK STK image 3000,a CST Ramste
lll silicon graphic O2 and STORK Drum scanner plotter, along with these a
team of conventional manual color separation artist is also maintained.
18.5 ENGRAVING
Technology advancement in the field of rotary printing necessitates
upgrading the pre-print line-up. NML is reputed for the most efficient use
of the STORK engraving systems for manual exposing. They are known
for halftone work in single step designing.
Living up to this reputation, they have recently added to their line lf
production the “ROTARY WAX JET’ With exposing resolution at 1019dpi
and a screen circumference of 640,820 and 914mm. Engraving at this
high resolution with digital technology enhances the print quality to a great
extent and reduces the existing human error margins to the minimum.
18.6 ROTARY SCREEN PRINTING SECTION
In another step to upgrade the existing machine mix, a new 3.2m (126”)
Reggiani printing machine, with a facility to print 16 colors has been
installed. This machine with UNICA system successfully combines
production and quality performance at the highest possible level in rotary
screen-printing.
NML has a well-trained work force to print extremely intricate and complex
toe-on –tone designs. Monthly printing capacity of the section is about 2.3
million meters. Besides conventional printing in pigment and reactive
dyes, printing in puff effects, resist and discharge dyestuff is also done.
18.7 FINISHING SECTION
Offering optimal final fabric quality and handle very recently this section
has been equipped with a new generation/ Babco-starter. This machine
combines tried and tested drying technology with innovative electronic
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control system, ensuring absolute reproducibility of fabric qualities and full

documentation on the quality control checks.
Besides offering normal finished, this section also full fills the demands for
scotch guard protection for soil release and resist finish, peach skin affect
finish (emerizing), Fire Retardant finish, water proofing, anti crease and
easy care finish.
18.8 DYEING SECTION
Nishat provides quality piece died fabrics in heavy twills to some of the
world leading brand names like Gap, Old Navy, Banana Republic, DKNY,
Tommy Hilfiger, CHAPS, and sears, this has been made possible by using
high quality grieve from the mills own weaving units and by using
expensive dyestuffs, Highly trained Chinese technicians keep a close
check on all stages of production. Depending upon specifications, dyeing
in reactive, disperse, pigment Vat and sulphur is possible.
To further enhance their existing dyeing capacity of 1,000,000 meters per
month, a designated Apparel Fabric Dyeing Unit is being set up near
Lahore.
The machinery and land have been purchased for this project, which is
planned to be operational by the end of year 2000. This unit, which will
have a monthly capacity of 2.5 million mergers, has been designed to give
the optimal results due to the custom built machinery purchased after
careful and lengthy consideration of the technical and marketing teams.
This would certainly give them an edge over their competitors and would
be welcome addition in the ever-changing apparel fabric market. It will
help Nishat mills limited to improve its market access and consequently
profitability.
18.9 INSPECTION AND ROLLING SECTION

To roll and pack 100,000 meters per day, this section has 8 rolling
Machines; all equipped with photo censors and inspection frames. Apart
from rolling and folding, the primary responsibility of rolling section is to
prevent faulty fabric reaching the customer; the fabric undergoes a 100%
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inspection system. To assist in shade checking a data color computer

system is also used.
18.10 QUALITY CONTROL SECTION
And independent on line quality control section monitors all production
operation to the required levels. The quality control lab is fully equipped to
conduct all relevant tests. The staff not only keeps control of the bulk
production, but is also actively involved in standardization of process
routes and operating procedures
18.11 STITCHING UNITS
Apart of Nishat plan to have a totally integrated textile sector the stitching
unit was set up in 1989.the unit has a string work force of 400 skilled and
semi-skilled workers mainly in cutting, stitching, quality control, folding and
packing department. With an array of 250 modern new generation
machines, the stitching, department has an average capacity to process
up to 10,000 bed sets and 2000 curtain pair per day, approximately 40000
meters of fabric, the assembly line consists of combination of manual and
automated operation designed to provide the required flexibility in its
system to allow processing of a wide product range and versions of its
existing product line the units current product line includes bed sheet, quilt
covers, fitted sheet ,cushion cover, valances, datable linen, baby sets,
quilted throw over and curtains in various specifications and model
customized to the requirements of individual market. In addition, a range
of embellished products with piping, bias binding, bulk over lock,
decorative trimming and bourdon stitching is also being offered to
customers, facility to handle small volumes of decorative embroidery is
also on line.
18.12 POWER GENERATION
The power generation unit formerly known as Nishat Tek Limited, was the
first ever power generation company in the private sector in Pakistan.
Commercial production started in 1992 with three KRUPP-Macungie’s with
generating capacity of 5.5 Mw each, Capacity at Faisalabad has since era
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increased to 27MW, Supplying power exclusively to NML. Nishat Tek also

establishes a power-generating unit of 6 MW at Shiekhupura to supply
power to Sulzer Unit - lll and Tsudakoma unit III. It started commercial
operation in September 1995.
18.13 GARMENTS
Financial year 2014-15 was difficult for Garments Segments too.

Consistent increase in wages and strengthened Rupee has put a dent on
their profitability. The demand for garments remained weak throughout the
year. European businesses also struggled due to a weak Euro. To counter
industry challenges and achieves production efficiency; Garments
Segment has taken drastic steps in order to be a lean manufacturing unit.
The brand new RFID technology which they installed for sewing lines is
the latest and most advanced method of calculating efficiencies and
wages.
This will help in reducing precious down time and increase productivity
and lower wastage. The latest technology will facilitate shop floor
management with real time important data to streamline processes and
manage issues on a fast track.
The installation has completed and the system is in operation. Their aim
for future is to remain competitive by bringing costs down through
increased efficiencies and focusing on large brands and retailers.
Garments Segment has the privilege of working with some of the best
brands of the world and innovative product developments are the key to
their success.
Their energy bills are much higher compared to the previous years.
However, with strong commitment, effective management planning and
better business strategies towards facing these challenges we have been
successful in achieving excellent results. Nishat Apparel produces close to
half a million garments every month making it one of the largest export
oriented apparel units of the country under one roof. Professionalism,
systematic approach, clear cut future strategies and investments in human
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resource are our hallmarks. This labor intensive project provides a great
employment opportunity to a large number of households in the area.
Nishat mills future strategies include investments in building and
machineries, thus increasing the capacities to well over 600,000 units per
month. For this purpose they have already ordered world’s best laundry
machines and are in process of acquiring modernized equipment to add
two new production lines.
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19. INFORMATION TECHNOLOGY FOR NISHAT MILLS LIMITED

Information Technology is the backbone of their business operations and
precursor to the growth of their Company. A robust and integrated IT
system has enabled us to operate their manufacturing facilities and offices
on nine different locations in Pakistan. Their IT Segment not only
managed existing IT infrastructure but also carried out many hardware
and software projects during the year.
They have successfully implemented a very advanced Radio Frequency
Identification (RFID) System in Garments Segment which will help to
increase productivity and efficiency of the Segment. Besides installation of
physical hardware, in-house developed software programs have been
implemented in the newly completed projects of Spinning and Weaving
Segments.
20. COMPANY ENVIRONMENT

With more than 15000 employees, NML is one of the largest employers in
the private sector the cordial relation with the staff and is known for
maintaining a peaceful and healthy corporate environment.
The government-run social security dispensary on the mill’s premises
provides the medical facilities for the workers and the serious patients are
treated at the hospital in Faisalabad.
The officers of the company have been provided indoor games facilities at
the club where recreational events are arranged on regular basis.
21. HUMAN RESOURCE MANAGEMENT OF THE COMPANY

Every successful organization is a reflection on the commitment dedication
and spirit of its employees, and Nishat is no exception.
Employing over 15000 people, including more than 170 professional,
Nishat enjoys high employee motivation and excellent working standards,
by encouraging informal and frequent communication at all management
levels.
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People are accepted to take full responsibility for a job and get it done. As
a commitment to its employees apprenticeship and other training schemes
are in operation at all Nishat Group Company providing hand-on training
and development opportunities for individuals. It is a matter of pride for
Nishat that it enjoys one of the lowest employee turnovers in the country.
22. BUSINESS ANAYLSIS OF NISHAT MILLS

22.1 General Market Review and Future Prospects
Worldwide businesses were adversely affected by onset of global
economic recession in financial yearn2008-2009. There has been some
recovery of economies from the recession in financial year 2009-2010;
however, its effect is still far from over. Global recession is not the only
cause of our concern. Serious internal issues also affected their textile
industry quite badly. The high cost of production resulting from higher
cotton prices, rising energy costs, increasing prices of imported inputs due
to depreciation of Pakistani rupee, double digit inflation and prolonged
power cuts are posing serious threats to textile sector. On these fronts the
situation is expected to remain volatile in the future.
Their company did extremely well during the current financial year and
achieved 32.11% growth in total net revenue from the corresponding
previous year. Despite all the challenges faced by their textile sector,
Nishat achieved this success through full utilization of its production
capacity, timely investments, effective business planning aggressive
marketing strategy, strong customer base and diversified product range.
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Their textile industry has been going through one of the toughest periods
in decades. It has been facing tough challenges but the worse can be
expected in the next year when the loss of cotton crop resulting from
unprecedented rains and floods in the Country will adversely affect the
textile sector. Currently, the impact of this huge natural calamity cannot be
assessed.
All the sectors of their economy in general and the agriculture dependant
business such as textile sector in particular will have to face extremely
tough challenges including but not limited to raw material shortages
causing prices of supplies to increase, higher cost of imported raw
material, expected devaluation of Rupee and higher inflation. In this need
of hour, the Government is required to introduce very effective.
23. CORPORATE STRATEGIES

23.1 Marketing Strategies
Textiles industry faced many challenges during the year 1998-99
throughout the world. Inflation and decline in purchasing power resulted in
decline in demand, which increased the competition to a greater extent. In
spite of the above facts Nishat mills ltd, had been successful in maintaining
its market position and growth.
23.2 Diversification Strategy

Market yarn is diversified to increase the customer base. Under this,
diversification program, business with Malaysia, Korea, Taiwan and UK
have been initiated. Product range is also increased to cater for the
different needs of increased number of buyers production volume is also
increased by concentrating on coarse counts with a result of increase in
volume from 90-95 containers per month to around 115 containers month.
23.3 Market Development

In order to reduce their dependence on a few markets especially FAR
EAST, new markets were developed for tray cloth. This diversification not
only reduced their dependence on Hong Kong but also gave those better
profit margins at times when Hong Kong market was very depressed.
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Under this market diversification, they started business with SOUTH

AFRICA, AUSTRALAS, TAIWAN, and SRILANKA, ITALY etc.
23.4 Contacting Old Customers

The business with some of the old buyers in Europe was also revived
during this period after intensive efforts. This revival gave both good
volumes and better profit margins.
23.5 New And Innovative Product Development

They have developed fancy and special items like Cavalry Twills, Bedford
Cords and dobby items, which are being sold at premium prices. They
keep on modernizing their equipment in order to maintain the high quality
of their products.
23.6 More Quality Conscious

With the increase of competition, they have become more quality
conscious. In order to achieve their quality standards, they are maintaining
better quality by getting yarn from pre-approved sources, tighter fabrics
inspection in folding and providing service to their customers.
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24. RATIO ANALSIS & H,V Analysis
Ratio Analysis is a
form of Financial Statement Analysis that is used to
obtain a quick indication of a firm’s financial performance.
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RATIO ANALYSIS OF NISHAT MILLS LIMITED
 CURRENT RATIO
Current Ratio
2020 2019 2018

(In Rupees) (In Rupees) (In Rupees)
Current Assets Current Assets Current Assets
25,850,830 24,190,444 28,774,992
Current Liabilities Current Liabilities Current Liabilities
19,553,041 19,167,495 21,553,219
1.32208 1.26 1.34
cur r ent r ati o

current ratio
1.36
1.34
1.32
1.3
1.28
1.26
1.24
1.22
Interpretation:
Current ratio has marginally decreased from previous year, which indicate that
the firm’s currents assets are sufficient pay its current liabilities.
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 QUICK RATIO
Quick Ratio
2020 2019 2018

Current Assets Current Assets Current Assets
25,850,830 24,190,444 14,706,018
Current Liabilities Current Liabilities Current Liabilities

19,553,041 19,167,495 21,553,219
0.81 0.65 0.68
Quick R ati o
Quick Ratio
1
0.8
0.6
0.4
0.2
0
Interpretation:
Quick ratio is slighty decreased from the previous year from 0.68 to 0.65. It
means nishat has less short term assets as compared to the previous year to
cover its immediate short termLiabilities. Generally a ratio of 1:1 is considered
acceptable.
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 RETURN ON EQUITY
Return on Equity
2020 2019 2018
Net Income Net Income Net Income
4,923,038 3,911,925 5,512,552
Shareholders Equity Shareholders Equity Shareholders Equity

82,155,155 76,142,823 68,589176
0.06% 5.41% 8.03%
R etur n on Equity
Return on Equity
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Interpretation:
The return on equity measures the return against the investment of the owners in
the firm. The return on equity has decreased in 2015 which means the company
is not using its investment effectively.
 GROSS PROFIT RATIO
Gross Profit Ratio
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2020 2019 2018

Gross Profit Gross Profit Gross Profit
6,264,308 6,024,138 7,863,744
Sale Sale Sale
47,999,179 51,177,577 54,444,091
0.13% 11.77% 14.44%
Gr os s Pr ofi t R ati o
Gross Profit Ratio
16
14
12
10
8
6
4
2
0
Interpretation:
Gross profit means how much profit is earned on the product without considering
indirect cost. The gross profit of the Nishat is reduced from the previous year from
14.44% to 11.77%. Small changes in gross profit can significantly affect the
profitability.
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 AFTER TAX PROFIT RATIO
After Tax Profit Ratio
2020 2019 2018

Profit After Tax Profit After Tax Profit After Tax
4,923,038 3,911,925 5,512,552
Sale Sale Sale

47,999,179 51,177,577 54,444,091
0.102% 7.64% 10.13%

12
10
8
6
4
2
0
Interpretation:
Decrease in the after tax profit ratio indicates that company is not generating
enough sales or it is not keeping its administrative expenses under control to
leave an acceptable profit. This ratio actually measures the firm’s success with
respect of earning sales.
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 TOTAL ASSETS TURNOVER RATIO
Total Assets Turnover Ratio
TOTAL ASSETS TURNOVER RATIO
2020 2019 2018

Sale Sale Sale
47,999,179 52,777,577 54,444,091
Total Assets Total Assets Total Assets

106,599,219 101,140,000 97,048,577
0.45 Times 0.51 Times 0.56 Times
Total A s s et Tur nover R ati o

Total Asset Turnover Ratio
0.6
0.5
0.4
0.3
0.2
0.1
0
Interpretation:
The Asset Turnover Ratio is an efficiency ratio that measures a company’s ability
to generate sales from its total assets by comparing sales with the total assets.
This ratio shows how efficiently a company can use its assets to generate sales.
The Asset Turnover is slightly decreased from the previous year which shows the
less efficiency as compared to previous year.
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24.1 Horizontal Analysis

2020 2019 2018
Balance Sheet
Total Equity 232% 215% 194%
145% 173% 205%
Non-current liabilities
Current liabilities 128% 125% 141%
Total liabilities 131% 134% 152%
Total Equity and Liabilities 197% 187% 179%
Assets
Non-current assets 227% 216% 192%
Current assets 140% 131% 156%
Total Assets 197% 187% 179%
Profit and Loss Account

Sales 99% 105% 112%
Cost of sales 102% 111% 114%
Gross profit 80% 77% 100%
Distribution cost 98% 111% 117%
Administrative expenses 170% 168% 157%
Other operating expenses 73% 85% 80%
109% 119% 120%
59% 47% 86%
Other operating income 167% 163% 149%
Profit from operations 97% 87% 108%
Finance cost 65% 109% 101%
Profit before taxation 106% 81% 110%
Provision for taxation 141% 84% 82%
Profit after taxation 102% 81% 114%
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24.2 Vertical Analysis

2020 2019 2018
Balance Sheet
Total Equity 77.07% 75.28% 70.68%
4.59% 5.76% 7.12%
Non-current liabilities
Current liabilities 18.34% 18.95% 22.21%
Total liabilities 22.93% 24.72% 29.32%
Total equity And Liabilities 100.00% 100.00% 100.00%
Assets
Non-current assets 75.75% 76.08% 70.35%
Current assets 24.25% 23.92% 29.65%
Total Assets 100.00% 100.00% 100.00%
Profit And Loss Account

Sales 100.00% 100.00% 100.00%
Cost of sales 86.95% 88.19% 85.56%
Gross profit 13.05% 11.81% 14.44%
Distribution cost 4.45% 4.74% 4.69%
Administrative expenses 2.33% 2.15% 1.90%
Other operating expenses 0.66% 0.72% 0.63%
7.44% 7.61% 7.22%
5.61% 4.20% 7.22%
Other operating income 8.50% 7.78% 6.71%
Profit from operations 14.11% 11.99% 13.93%
Finance cost 2.18% 3.41% 2.96%
Profit before taxation 11.93% 8.57% 10.98%
Provision for taxation 1.67% 0.93% 0.85%
Profit after taxation 10.26% 7.64% 10.13%
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25. SWOT ANALYSIS OF NISHAT MILLS LIMITED
A SWOT analysis is a useful Technique for understanding the firm’s

strengths weaknesses and for identifying both the opportunities and
threats.
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25.1 STRENGTHS
25.1.1 ISO 9001-2000

Nishat textile is certified under ISO 9001-2000, so it meets the requirement
of international standard and has a value in the minds of concerned
people.
25.1.2 Strong Security System

Nishat textile limited has a greater security system. There are different
hidden security cameras which can capture all the moments.
25.1.3 OKTEX 100

Nishat is also Oktex 100 certified. It means that Nishat is satisfied by not
using hazard chemical.
25.1.4 High quality product

Nishat textile limited using advance technology like they have modern
machinery by which the quality of product produced is very high.
25.1.5 Latest mechanized machinery

The company is using modern looms which it has purchased from Japan
and France. And by using that latest machinery the productivity of the
employees are very high.
25.1.6 Tremendous market positioning

Nishat textile is one of the pioneer textiles in the Pakistan so it got the
position in the mind of its customer. And being an old textile company
people are loyal with it. Nishat has a better position in the minds of its
customers.
25.1.7 Highly qualified and skilled management

The management of Nishat is skilled. It has hired the foreign graduates in
its management and also experienced people from all over the country.
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25.2 WEAKNESSES
25.2.1 High cost of production

The production cost is high because of not properly utilizing of its
resources.
25.2.2 Centralized decision making

The decisions are made by the top management which is weakness of the
Nishat because it has no proper idea about the situation and its decision
cannot be fruitful for the company.
25.2.3 Weak image in the international market

Because of the other textile specialized countries like China, Bangladesh
etc the international image in the textile sector is very weak. These
countries are providing cheap product to the market than Pakistan’s textile
industries.
25.2.4 Small international market share

Although Nishat is very strong in the national circuit but it has small market
share in the global textile industry due to the sound competitors like china,
and Bangladesh etc
25.2.5 Less promotional activities

The advertising and promotional cost of the Nishat textile is very low it can
take advantage for more turnouts through strong marketing campaign.
is decreased.
25.3 OPPORTUNITIES
25.3.1 Organization can expand product lines

Currently the Nishat is not dealing in knitwear. It can expand its products
line by producing knitwear. It has plants and the extra cost for the
production will be low for Nishat. It has better market repute.
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25.3.2 Organization can reduce the cost by proper utilization of

resources
If the cost of different assets which are not utilizing properly is controlled by
the Nishat management it can produce more in a low costs. It has to
develop a systematic process for controlling and managing resources.
25.3.3 Organization can hire more well-educated and experienced

person
It can take advantages by hiring more skilled people. The company should
hire young, fresh and energetic staff to enhance productivity.
25.4 THREATS
25.4.1 Buyer needs demands changes

Because of the research and development the design and the product of
Nishat is just satisfactory as compared to its competitors in the global
market and it is not fulfilling the demand of its customers.
25.4.2 Political instability

Political instability affects the Nishat. Because of the quota system the
company can be restricted by the government to export.
25.4.3 Change of government policies

Government policies are changing day by day so it is a threat for the Nishat
to survive in such a challenging situation.
25.4.4 Global Economic instability

Because of the economic instability the Nishat affected a lot. Dumping
system which is rising on daily basis in the world can create many
problems for the company and any uncertainty in the world like 9/11 may
also affect the overall export.
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26. I WORKED AS AN INTERNEE IN THESE DEPARTMENTS
Export
Finance
Import
27. MY LEARNING DURING INTERNSHIP PERIOD

This section is based on my learning and observation during my internship
at the NISHAT MILLS LIMITED HEAD OFFICE LAHORE. My internship
duration was for eight weeks. I worked in Nisthat Yarn Marketing
Department and different sections of the Finance department for a few
days.
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27.1 Yarn Marketing Department

Yarn Export Marketing Department usually export yarn in
USA,Africa,China,Japan etc.
They are Responsible for all yarn Marketing dealings with the Foreigners.
27.2 EXPORT DOCUMENTATION DEPARTMENT
In Nishat Export Documentation department is responsible to prepare the

documents related to export. The Export Documentation Department
works in Oracle System, Excel, Total sourcing.
The most commonly documents which export department has to prepare.
 Packing List
 Certificate of Origin
 Letter of Credit
 Forwarder Cargo Receipt
 Bill of exchange (if required by the applicant)
 Bill of Lading
 Form (E)
I worked under Miss Shazia (senior officer) here. I was asked to observe
her daily activities. I performed the following duties:  Data entry related
to export documents in oracle system,  Retrieving first drafts and also
checked.
 Appropriate corrections are made in the system and then final prints of
a list of required documents are taken and thus a file of one order gets
completed.
 This process is explained by order processing cycle.
 This department is responsible for the export of made-ups and

garments.
 This department has to fulfill all the legal requirements and prepare
important documents involved in the export of made-ups and
garments.
 This department also prepares internal documents for concerned
departments (for finance department, Accounts department).
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27.3 IMPORT DOCUMENTATION DEPARTMENT
In Import Documentation Department I worked under Mr. Ghulam Rasool

(Assistant Manager). Here Nishat import who imports required goods, and
machines etc.
HOW TO PREPARE IMPORT DOCUMENTS?
27.3.1 PERFORMA INVOICE
It Indicates applicant’s name, to be shipped from Export country to import

country, payment mode by L/C e.g. Irrevocable and unrestricted L/C at
sight, shipment time e.g. within 2 months after receipt of letter of credit,
place of delivery e.g. CFR Karachi by vessel e.g. validity until August 01,
2016, items, description, quantity, unit price, amount.
27.3.2 APPLICATION FOR OPENING OF LETTER OF CREDIT
In which request is made to bank to open letter of credit for the attached
Performa invoices.
27.3.3 IMPORT FORM (FORM-I)
It indicates NIT No, place of issue, date of issue, authorized bank,

currency, beneficiary’s name and address, indenter’s name and
registration No, description of goods, port of shipment, carrying Co.’s
name and application’s name and address.
27.3.4 REQUIREMENT OF L/C OPENING
• APPLICATION
• PERFORMA INVOICE
• INSURANCE COVER NOTE
• FORM-I
27.3.5 TYPES OF IMPORT DOCUMENTS
There are three types of Import Documents in the Import Department.
• Advance Payments
56 | P a g e
• Contract
• Letter Of Credit
1) ADVANCE PAYMENT FOR IMPORT
Under this mode the payment is made to the seller in advance as soon as the deal is
made due to the very well association with the supplier. The seller sends the
documents to Nishat Mills Limited after the goods are dispatched. There is no bank-
to-bank exchange of any documents or other legal formalities.
2) CONTRACT BASED IMPORT
Contract based import is process through a contract in which the letter of

credit is not opened. Transaction is completed on the basis of contract.
Contract base import is base on your personal and your market goodwill.
If your market goodwill is good then your business will grow.
3) LETTER OF CREDIT BASED IMPORT
Letter of credit is very important in current business field; as such money

is required for business. Letter of Credit makes the payment secure.
27.3.6 FINANCE DEPARTMENT
One major activity of Finance Department is to arrange the finance for
import and export purpose. I worked under Mr. Ashraf Ali Raza (Senior
Deputy Manger of Finance).
a. EXPORT REFINANCE SCHEME
Refinance scheme is established to promote the exports. In finance

department the Export Refinance is a sub department, which works to
manage all the processes of export finance scheme of state bank of
Pakistan.
28. WORK DONE BY ME
There is a list of work that is performed by me during my internship in

Nishat Mills Limited:
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WORK DONE DURING FIRST WEEK:
28.1 Yarn Marketing Department
In my first week I have spent my time in really friendly environment,I

learned a lot from Nishat yarn marketing department.It gave me a
excellence skills to communicate with buyers or Customers, some few
remarkable things mention below which I have learned
 How to make effective communications with the

foreigners(Cusomers)
 Nishat Yarn Marketing Strategies
 4 p’s Of Yarn Marketing
WORK DONE DURING SECOND WEEK:
28.2 Counter Checking Of Packing List
I checked in packing list the quantity of cartons, gross weights and Net
weights as per packing list.
WORK DONE DURING THIRD WEEK:
28.3 E.DOCs (Attachment of Documents in Total Sourcing)
E.DOCs means attachment of different documents in total sourcing. In

Nishat different applicants have different sourcing. Total sourcing is an
online system. I was E.DOCs in total sourcing.
WORK DONE DURING FOURTH WEEK:
28.4 Data Entry in Excel
The data which I did was related to Commercial Invoices.
28.5 Copy of Documents
The documents that were copied related to:
 Import Documentation
Export documentation
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28.6 Data Entry in Oracle System
Oracle system was used in Nishat. Most of the work is performed in

Oracle system. I was entered only the Description of Goods.
WORK DONE DURING FIFTH WEEK:
28.7 Counter checking of Import Letter of Credit
Import letter of credit was prepared by Mr. Ghulam Rasool. After

completion of his work he gave me the letter of credit for counter checking.
The basic purpose of counter checking was to find out the errors to save
the Nishat from any kind of discrepancies which was given by the Shipper
of the Nishat or the Shipper’s bank.
WORK DONE DURING SIXTH WEEK:
28.8 Stamping
I stamped the following documents
 Certificate of Origin
 Commercial invoice
WORK DONE DURING SEVENTH WEEK:
28.9 Data Entry of Pending Documents
The documents that were not yet sent to bank are called pending
documents. I was asked to enter those documents in finance department.
WORK DONE DURING EIGHTH WEEK:
In my eighth week I was just scanned and stamped the documents in

finance department.
59 | P a g e
29. CONCLUSION AND RECOMMENDATIONS
29.1 CONCLUSION
It really has been a life time opportunity to do internship in a leading

corporate conglomerate. A place where excellence is a norm and being
vigilant is a routine. The labor, employees and executives like work
alcoholic and the pinnacle being enjoyed by Nishat group is none but the
fruition of their human resources’ consistent commitment and zeal to
outstrip their competitors. And I observed this spirit in every department.
Everybody at Nishat keeps his work up to date, the production department
never sleeps, it works in 3 shifts, 24 hours a day for 52 weeks annually.
The marketing department is exceedingly proactive in exploring new
markets, developing new products, keeping its product line flexible and
trendy.
And the Finance department keeps the cost of doing business to insanely
low, keeping every speck of cash invested and grinded. I observed them
fighting with treasuries and banks to save and earn each denomination
possible for Nishat Mills. Utilizing the export finance scheme to its
optimum level to trim down its financing cost in a time, when KIBOR has
been constantly on a rise sending red flags to the business sector.
The cornerstone of Nishat Mills’ success as a flagship company of Nishat
group has been the executives’ style of managing by wandering, strong
coordination and communication at all levels of horizontal and vertical
hierarchy across the whole organization.
Specifically, I want to mention that I observed the GM marketing and GM

finance numerous times sharing their concerns as well as lighter
moments. Also ego-less behavior in all aspects is part of their culture at
Nishat Mills.
It helps keeping the morale of the subordinates and the team members
high and keeps the conflict on a check on top of organizational politics and
back stabbing to the lower side. This is what really inspired me at Nishat
60 | P a g e
Mills and encouraged me to learn a lot more than I expected, heard from
and observed other interns.
One of the shortcomings I witnessed in Nishat Mills is that they do not
compensate handsomely to the new talent and hiring over there is mostly
by reference. Also I found a very few employees having MBAs or other
Masters, while most of the seats being occupied by commerce graduate.
29.2 RECOMMENDATIONS
Having said that, no person is perfect in all aspects. During my stay at

Nishat Mills I observed some shortcomings which I like to share with
solution:
 One of the shortcomings I witnessed at Nishat Mills is that they do not
compensate handsomely to the new talent and hiring over there is
mostly by reference.
 Also I found a very few employees having MBAs or other Masters,
while most of the seats being occupied by commerce graduate. This
should better be checked especially for middle management positions.
 At Nishat Mills, over the years the focus has been the international
market, though the local market is addressed as well, but to me more
marketing efforts should be made in the local arena. (I understand that
the quality fabric Nishat is making is mostly out of budget for local
customers).
61 | P a g e
30.Financial Statements
BALANCE SHEET
CHANGE IN PROFIT AND LOSS

EQUITY ACCOUNTS
FINANCIAL
STATEMENTS
INCOME
CASHFLOW
STSTEMNT STATEMENT
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30.1 Balance Sheet

As at June 30, 2020
2020 2019 2018
(Rupees in thousands)
EQUITY AND LIABILITIES
SHARE CAPITAL AND

RESERVES
Authorized share capital
1,100,000,000 (2014:
1,100,000,000) ordinary shares of 11,000,000
Rupees 10 each 11,000,000 11000,000
Issued, subscribed and paid-up 3,515,999 3,515,999 3,515,999

share capital 78.639,16 72,626,824 65,073,177
Reserves
Total equity 82,155,155 76,142,823 68,589,176
LIABILITIES
NON-CURRENT LIABILITIES
Long term financing

4,629,456 5,582,220 6,431,304
Deferred income tax liability
261,567 247,462 474,878
CURRENT LIABILITIES
4,891,023 5,829,682 6,906,182
Trade and other payables 5,737,896 4,858,315 4,428,996
Accrued mark-up 113,320 221,394 295,054

10,475,657
Short term borrowings 11,524,143 14,468,124
1,980,768
Current portion of noncurrent liabilities 1,245,400 1,783,250 1,595,652
780,393 765,393
Provision for taxation
63 | P a g e
19,553,041 19,167,495 21,553,219

TOTAL LIABILITIES 24,444,064 24,997,177 28,459,401
CONTINGENCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES 106,599,219 101,140,000 97,048,577
2020 2019 2018
(Rupees in thousands)
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 24,715,095 24,357,269 22,964,388
Investment properties 472,765 479,242 386,748
Long term investments 55,399,080 51,960,454 44,771,715
Long term loans 97,762 94,284 102,726
Long term deposits 63,687 58,307 48,008
Total Non-Current Assets 80,748,389 76,949,556 68,273,585
64 | P a g e
2CURRENT ASSETS
Stores, spare parts and loose tools 1,269,509 1,335,763 1,316,479
Stock in trade 9,933,736 10,350,193 12,752,495

2,253,369
Trade debts 3,014,466 2,929,054
6,111,644
Loans and advances 5,575,273 4,184,485
65,433
Short term deposits and prepayments 2,023,092 44,849 44,849
Other receivables 13,662 1,625,281 1,504,538

2,065,217 2,540 15,172
Accrued interest
2,115,168
Short term investments 2,189,860 3,227,560
52,219 2,802,316
Cash and bank balances
Total Current Assets 25,850,830 24,190,444 28,774,992
TOTAL ASSETS 106,599,219 101,140,000 97,048,577
65 | P a g e
30.2 Profit and Loss Account

For the year ended June 30, 2020
2020 2019 2018
(Rupees In Thousands)
SALES 47,999,179 51,177,577 54,444,091
COST OF SALES (41,734,871) (45,153,439) (46,580,317)
Gross Profit 6,264,308 6,024,138 7,863,774
DISTRIBUTION COST (2,137,894)

(2,426,295) (2,554,627)
ADMINISTRATIVE EXPENSES,Other expense
(1,101,658) (1,032,238) (344,516)
(1,117,323), (316,886)
(366,142)
(3,572,103)
(3,894,095) (3,931,381)
2,692,205 2,130,043 3,932,393
OTHER INCOME 4,079,054 4,004,655 3,653,041

PROFIT FROM OPERATIONS 6,771,259 6,134,698 7,585,434
FINANCE COST (1,046,221) (1,744,773) (1,609,882)

PROFIT BEFORE TAXATION 5,725,038 4,389,925 5,975,552 (463,000)
TAXATION (802,000) (478,000)
PROFIT AFTER TAXATION 4,923,038 3,911,925 5,512,552

EARNINGS PER SHARE - BASIC AND DILUTED 14.00 11.13 15.68
(RUPEES)
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30.3 Income Statement

2020 2019 2018

(Rupees in Thousands)
PROFIT AFTER TAXATION 4,923,038 3,911,925 5,512,552

OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss - -

Items that may be reclassified subsequently to profit
or loss:
Surplus arising on re-measurement of available
for sale investments to fair value
4,824,619 5,633,447
Reclassification adjustment for gains included 2,685,598
in profit or loss - (3,914) (91,996)
Deferred income tax relating to surplus on

available for sale investments
227,416 24,537
Other comprehensive income 5,048,12 5,5 (14,106)
for the year - net of tax 1 65,

2,671,493 988
TOTAL COMPREHENSIVE 8,960,04 11,0
INCOME FOR THE YEAR 6 78,5
7,594,531 40
67 | P a g e
30.4 Cash Flow Statement

For the year ended June 30,2020
2020 2019 2018
Cash Flows From

Operating Activities
Cash generated from 6,795,658 7,712,266 7,272,699
Operations
Finance Cost Paid (1,154,295) (1,818,433) (839,227)
Income Tax Paid
Exchange Gain on (917,685) (771,332) ( 839,227)
Forward exchange (8,550) 166,690 102,161
Contracts received (5,266) 8,382 (26,414)
Net Decrease /
(Increase) in long term loans (5380) 578 (6,260)
Net cash generated from operating activities 4,704,482 5,298,151 4,887,376
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditure on property, plant and equipment (2,595,237) (3,915,523) (9,135,413)

104,339 94,408 232,737
Proceeds from sale of property, plant and equipment
-
Proceeds from sale of investments 221,406 1,177,704
(632,389)
Investments made (15,509,708) (1,400,603) (1,531,636)
Loans and advances to subsidiary companies 15,556,374 (13,143,489) (9,056,126)

112,374
Repayment of loans from subsidiary companies 11,929,192 7,288,328
Interest received 225,271 167,530

3,700,227
2,947,006 2,947,848
Dividends received
68 | P a g e
Net cash used in investing activities 735,980 (3,042,332) (7,909,028)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term financing 1,209,108 1,769,541 5,839,202
Repayment of long term financing (1,964,354) (2,364,65 (2,202,523

9) )
Repayment of liabilities against assets subject to -
finance lease (66,368) (70,224)
(1,048,486)
Short term borrowings – net (2,943,98 2,529,096
(1,573,781)
1) (1,400,445
Dividend paid
(1,400,449 )
Net cash (used in) / from financing activities (3,377,513) (5,005,916)

4,695,106
Net (decrease) / increase in cash and cash equivalent 2,062,949 (2,750,097) 1,673,454
Cash and cash equivalents at the beginning of the year

52,219 2,802,316 1,128,862
Cash and cash equivalents at the end of the year 2,115,168 52,219 2,802,316
69 | P a g e
30.5 Statement of Changes in Equity

(Rupees In Thousands)
Reserves
Share Total
Capital Capital Reserves Revenue Reserves
Equity
Premium Fair value Sub Total General Un-appropriated Sub Total Total
on issue of reserve reserve profit
right
shares
Balance as at 30 June 2018
3,515,999 5,499,530 27,808,608 33,308,138 26,248,028 5,517,011 31,765,039 65,073,177 68,589,176
Transaction with owners - Final dividend for the year ended 30 June 2014 @ Rupees 4.00 per
share
- - - - - (1,406,399) (1,406,399) (1,406,399) (1,406,399)
Transferred to general reserve
- - - - 4,106,000 (4,106,000) - - -
Profit for the year
- - - - - 3,911,925 3,911,925 3,911,925 3,911,925
Other comprehensive income for the year
- - 5,048,121 5,048,121 - - - 5,048,121 5,048,121
Total comprehensive income for the year
70 | P a g e
- - 5,048,121 5,048,121 - 3,911,925 3,911,925 8,960,046 8,960,046
3,515,999 5,499,530 32,856,729 38,356,259 30,354,028 3,916,537 34,270,565 72,626,824 76,142,823
41,027,752 37,611,404 78,639,156

38,356,259
5,499,53 35,528,222 32,683,028 4,928,376 82,155,155
3,515,999 0
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31. Bibliography
 Internet (www.nishatmills.com.pk)
 First Quarter Reports of Nishat Mills,
 Second Quarter Reports of Nishat Mills
 Third Quarter Reports of Nishat Mills
 Annual Reports of Nishat Mills for the year 2014,2015 and

2016
 Brochures and journals of Nishat Mills
 Managerial Staff of Nishat Mills
 In charge of Sections and Executive Heads
 Internship Advisor, Mr. Tasnim Haider (Manager Finance)
32. Special Thanks

 Mr. Yasir Usmani(Yarn Marketing Manager)
 Mr. Shahzad Malik( General Manager Finance)
 Mr. Ashraf Ali Raza (Senior Deputy Manager Of

ReFinance)
 Mr. Gulam Rasool (Assistant Manager Of Import)
 Mr. Asim (Assistant Manager Of Custom Department)
 Mr. Ibrahim (Assistant Manager Custom Department)
 Mr. Inam (Deputy Manager Of Finance)
 Miss Shazia Noor Khan (Senior Export Officer)
 Mr. Abadullah
 Mr. Tasnim Haider (Manager Finance)
72 | P a g e
73 | P a g e

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University of the Punjab

NISHAT MILLS LIMITED

Prof. Dr. Muhammad Aamir

Hailey College of COMMERCE, LAHORE

In the name of Allah the beneficent, the merciful

If you are grateful, I will Give you MORE

Surah Ibrahim (v.7)

Hailey College of Commerce,

University of the Punjab,

Subject: Submission of Internship Report.

I dedicate this report to my parents and brothers as they always gave me

2. HISTORY OF NISHAT MILLS LIMITED...........................................................11

3. Textiles Exports from Pakistan.........................................................................11

7. VISION MISSION STATEMENTS....................................................................14

7.2 NISHAT’S VISION..........................................................................................14

7.4 NISHAT’S MISSION......................................................................................14

8. CORE VALUES OF THE ORGANIZATION......................................................15

10.2 CORPORATE DEPARTMENT..................................................................17

10.3 AUDIT COMMITTE..................................................................................18

10.4 HUMAN RESOURCE & REMUNERATION (HR & R) COMMITTEE........18

10.5 LEGAL ADVISOR.................................................................................... 18

11. Director’s Profile............................................................................................. 19

12. BANKERS TO THE COMPANY:...................................................................22

14. REGISTERED OFFICE & SHARES DEPARTMENT.................................23

15. DEPATMENTALIZATION OF NISHAT MILLS LIMITED................................26

16. THE COMPANY AND ITS OPERATIONS.................................................26

17. DIFFERENT SECTORS OF NISHAT MILLS LIMITED...............................................29

18. PRODUCTION UNITS OF NISHAT MILLS LIMITED.....................................30

19. INFORMATION TECHNOLOGY FOR NISHAT MILLS LIMITED...................37

20. COMPANY ENVIRONMENT.........................................................................37

21. HUMAN RESOURCE MANAGEMENT OF THE COMPANY........................37

22. BUSINESS ANAYLSIS OF NISHAT MILLS...................................................38

23. CORPORATE STRATEGIES........................................................................39

23.1 Marketing Strategies....................................................................................39

23.2 Diversification Strategy................................................................................39

23.3 Market Development...................................................................................39

23.4 Contacting Old Customers...........................................................................40

23.5 New And Innovative Product Development.................................................40

23.6 More Quality Conscious...............................................................................40

24. RATIO ANALSIS & H,V Analysis...................................................................41

24.1 Horizontal Analysis......................................................................................48

24.2 Vertical Analysis.......................................................................................... 49

25. SWOT ANALYSIS OF NISHAT MILLS LIMITED...........................................50

25.1.1 ISO 9001-2000......................................................................................51

25.1.2 Strong Security System.........................................................................51

25.1.3 OKTEX 100...........................................................................................51

25.1.4 High quality product..............................................................................51

25.1.5 Latest mechanized machinery...............................................................51

25.1.6 Tremendous market positioning............................................................51

25.1.7 Highly qualified and skilled management..............................................51

25.2.1 High cost of production.........................................................................52

25.2.2 Centralized decision making.................................................................52

25.2.3 Weak image in the international market................................................52

25.2.4 Small international market share............................................................52

25.2.5 Less promotional activities....................................................................52

25.3.1 Organization can expand product lines.................................................52

25.3.2 Organization can reduce the cost by proper utilization of resources.....53

25.3.3 Organization can hire more well-educated and experienced person....53

25.4.1 Buyer needs demands changes............................................................53

25.4.2 Political instability..................................................................................53

25.4.3 Change of government policies.............................................................53

25.4.4 Global Economic instability...................................................................53

26. I WORKED AS AN INTERNEE IN THESE DEPARTMENTS........................54

27. MY LEARNING DURING INTERNSHIP PERIOD......................................54