Internship Report on Colony Textile Mills Limited
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Internship Report on Colony Textile Mills LimitedCOMSATS
INSTITUTE OF INFORMATION & TECHNOLOGY
Submitted To:
Sir Waqar Ahmed
Submitted By:
Hassan Bakhtiar RoyFA08-MBA-039/LHR
ACKNOWLEDGEMENT
Up and above anything else, all praise to Almighty Allah alone,
the Omnipresent and the most Merciful and compassionate. The words
are bound, knowledge is limited and time is short to express His
dignity. It is one of infinite blessings of Allah that he bestowed
me with the potential and ability to contribution towards the deep
oceans of knowledge already existing.
I pay hum-age to greatest personality of the universe; HOLY
PROPHET HAZARAT MUHAMMAD (PBUH) who is forever source and spring of
guidance in every sphere of life.
At the very outset, I would like to express my hearties and
sincerest sense of gratitude to all my worthy teachers of CIIT
Lahore for their inspiring guidance and constructive criticism.
I am highly thankful for the cooperation of Mr. Bilal Niazi, Mr.
Wasim Omer, Mr. Rizwan Malik, Mr. Tahir Mehmood, Mr. Nouman Chatha
and Mr. Kashif Niazi of Colony Industries (Pvt.) Ltd. I might not
be able to complete my internship without their cooperation and
kind behavior. I am also gratified to all my sincere fellows who I
had ever remembered for their continued encouragement moral support
and invaluable succor as well as substantial cooperation during my
critical moments.
Hassan Bakhtiar RoyContentsExecutive Summary 5
Textile Industry in Pakistan 6
Introduction & History 8
Vision Statement 10
Mission Statement 10
Group Management Profile 10
Production Accounting & Management System 12
Inspection System 13
Organizational Structure 15
SWOT Analysis 18
Detail of SWOT Analysis 20
PEST Analysis 25
Marketing Strategy 26
Competitive Strategy 30
Purchase Accounting System 31
Process of Yarn Production 34
Work done during Internship 36
Learning as an Internee 41
Recommendations 43
Annexure 44
Glossary 50
Bibliography 52
Executive Summary
This report is based on the activities performed during the
internship at COLONY Textile Mills Limited. Internship duration was
6 weeks and it provided practical knowledge of working in
professional environment. This learning experience is described in
detail n the various sections of this report.
In the first section, there is some detail about the company.
The history and present status of the company is explained. The
organization structure and the details of its management along with
its location are also discussed. I have also discussed the yarn
manufacturing procedure and the important departments of the
company. I have discussed some business operations and some
strategies as well.
The second section provides information about the activities
that I performed during the internship. I worked as an internee
mainly in Accounts and Marketing department. However, I also spent
some time in Purchase Department to gather some information about
their working.
The third and last section includes the recommendations.
Textile Industry in Pakistan
The subcontinent is the inheritor of one of the richest and
oldest textile traditions in the world. Excavations at Mohenjo Daro
and Harappa 2500-1500 BC revealed that the inhabitants of the Indus
Valley cultivated cotton. Sir John Marshall, the archaeologist has
stated that a few minute scraps of cotton were found adhering to
the side of a silver vase. Clay and faience spindles whorls
indicate that cotton and woolen fibers were spun. A well-equipped
dyers workshop was excavated at Mohenjo Daro and the fragment of
cloth indicates that woven cotton cloth was dyed with madder
root.
Independence from the British in 1947 and the division of the
Indian subcontinent into Pakistan and India started a new era for
textiles production. Pakistan consisted of two entities, east and
West Pakistan. The West was the cotton producing area and the East
was responsible for jute production. At the time of partition,
Pakistan had no industrial base and inherited only one textile
mill, the Lyallpur Cotton Mill in Lyallpur [now called Faisalabad].
This mill produced yarn and gray cloth and no printed fabrics.
Under the Open General Licensing [OGL] scheme, the business
community imported plants and machinery with cash dollars. In 1950,
Adamjee Mills was set up in Karachi, Kohinoor in Faisalabad, Colony
Textile Mills in Multan, Nishat and Crescent Textile in Faisalabad.
These were followed by Gul Ahmed Textile Mills, Al-Karam, Valika,
Star and Rashid textile mills.
Within a decade the new country of Pakistan was self-sufficient
in cotton and began exporting gray cloth and later cotton yarn.
Pakistan started exporting printed fabrics in the late 1970s to
Africa and by mid 80s was sending printed material to Europe.
Pakistans location was ideal, as it lay halfway between the western
world and the Far East. Pakistan has a 28 percent share in world
export of cotton yarn and a 6 percent share in world export of
cotton cloth.
It was in the 60s that the power loom took over and by the 70s
gray cloth was being exported at throwaway prices. There are about
200,000 power looms operating in Pakistan some of which are
backyard operations. Handloom, which formed the backbone of textile
goods in the last century, is now almost non-existent, its sales
confined to a fast diminishing rural market and a very small niche
market.
Although Pakistan is the worlds fourth largest cotton growing
nation in the world, after the United States, China, and India, its
total turnover for export is only $ 5 billion. Textile goods form
60 % of the total exports of the country. The commodities exported
are yarn, cloth, tents, and canvas, bags, towels, bed linen,
garments, synthetic textiles and other made ups.
With a large and expanding textile industry, textile education
and training became imperative. The Textile University of Pakistan
was established in Karachi to train technical and management
professionals. The Textile University awards degrees in Textile
Sciences and Textile Management. The National College of Arts in
Lahore and the Indus Valley School of Art and Architecture in
Karachi are the only two institutions in Pakistan, which award a
degree in the discipline of Textile Design. Designers are being
absorbed into the industry, bringing about change and vibrancy,
with innovations in Print design and weaving.
Today there are 450 Spinning mills and 35 composite textile
mills. Textile goods form 60 % of the total exports of
Pakistan.
Introduction & History
Colony group has been the pioneer of textile industry by setting
up Colony Textile Mills Limited (CTML) after partition of the sub
continent in 1950, thus CTML became one of the first textile mills
to be registered as public limited company and quoted in Karachi
Stock Exchange (KSE).
Foundation of the group was kept over a small flour milling
operation, which rapidly grew into cotton ginning that evolved into
the core business of the group, constituting 21 cotton ginners
spread throughout the cotton grown belt in the province of Punjab -
Pakistan. The logical vertical process-integration paved its path
for the group to invest in to Textile Spinning. The ground breaking
of the Spinning facility was the beginning of huge investments that
followed which gave the group a leading position in the Textile
Industry of the Country.
Colony Textile soon became one of the largest vertically
integrated textile facilities in the country. The group further
diversified in to Power Generation and Distribution network,
Banking, Insurance, and Cement sectors. The success of the group
continued until the government regime shift brought about a shift
in policy from private sector pushed industrialization to a strong
wave of nationalization. The Ginning, Flour Milling, Power,
Banking, Insurance and Cement along with various other sectors were
completely taken over by the government.
Having major assets nationalized, the Group was faced with
severe financial difficulties for almost one and a half
decades.
Presently, the Colony Group consists of several Textile Spinning
facilities with an installed capacity in excess of 220,000 spindles
out of which more than 200,000 spindles are 4 years old or
less.
Colony group is managing the following companies:
Company NameLine of BusinessStatus
Colony Textile Mills LimitedTextile (Spinning)Public Limited
Company
Colony Industries (Pvt.) LimitedTextile (Spinning &
Weaving)Private Limited Company
Colony Textile Mills Limited (CTML)
Colony Textile Mills Limited, one of the group companies of the
Colony Group, is a Textile Manufacturing unit established as on
24th August, 1946 and engaged in manufacturing of yarns of various
Ne Counts. The company has authorized capital of Rs. 411,000,000 as
on September 30th 2008.During year 2000 to 2001 the annual
production capacity of the company was 34.813 million Kgs converted
into 20 Ne Count based on 111,136 spindles. Currently the number of
spindles installed has been increased to over 175,000 spindles.
A summary of the companys production record for spinning section
for the past three years is given in Annex 1.5Year ended 30th
September200620072008
No. of spindles installed59,20079,864177,448
Average no. of spindles worked47,08564,195155,330
Capacity at 20 count(Kgs.)17,778,00022,841,00248,669,115
No. of shifts worked1,0921,0401,095
Actual production converted at 20
count14,652,68018,703,37847,394,446
Capacity Utilization82.00%82.00%97.38%
The company sales are comprised of local sales which is almost
100% against advance cash payment. The total turnover of the
company during last year was Rs. 3.226 Billion which is expected to
cross 5.00 Billion mark during the current year.
Vision Statement
(Attain highest standards of quality in its all business
activities.
(Sustained growth in real terms.
(Have professionally trained high quality motivated workforce,
working as a team in all environments.
(Attain past glorious position and be recognized locally as well
as internationally as a dynamic, quality conscious and progressive
company and industry leader.
Mission Statement
To manufacture quality products for customer satisfaction
through
(Honoring the commitment.
(Continuous endeavor for improvement through adoption of most
modern technology in production.
(Strict adherence to quality control.
(Developing a sense of high reliability through fair
dealing.
(Becoming a part of countrys development and economic
prosperity.
Group Management Profile
A brief profile of the main directors of the company which hold
majority of the shareholding is given below:
MR. MUGHIS A. SHEIKH
Mr. Mughis A. Sheikh is the Chairman of Colony Textile Mills
Limited.
MR. FAREED M. SHEIKH
Mr. Fareed M. Sheikh is the Chief Executive of Colony Textile
Mills Limited.
MR. NAVEED M. SHEIKH
Mr. Naveed M. Sheikh is CEO and director of Colony Weaving Mills
(Pvt.) Limited.
Production Accounting & Management System
CIL production accounting and management system not only ensures
consistency in the operations but also helps to manage orders on a
micro level. In-house developed software provides great tools to
CIL production team for monitoring production processes, production
planning, and conducting periodic audits to reduce possible delays
and coordination snags along with achieving a greater degree of
reliable inter-departmental information exchange.
Production Capacity & Capability
With the installed capacity of 120 looms, the plant can produce
more than 1,500,000 Linear Meters per month, with a wide variety of
fabrics; from percales to satins, from twills to drills, from rip
stops to high thread count fabrics, stretch fabric and much
more.
All looms have a high speed connectivity facility through Local
Area Network along with being Web-enabled. CIL customers will be
able to monitor looms allocated to their contracts, and also view
what articles are being run on what looms and at what efficiency,
whereby correlating the delivery snags, if any, on one hand and
quality related issues on the other. For this organization customer
confidence is the key to success, and providing this transparency
to their customers can facilitate the business on the commercial
side as well as providing CIL production team to strive for either
improving their performance or marinating the quality which is for
the satisfaction of the clients.
Inspection System
Colony Industries (Pvt.) Limited is the pioneer in the entire
Indo-Pak region in deploying the Uster FabriScan in its facility.
The FabriScan replaces the traditional manual inspection by a far
more consistent and objective data collection. This system is
capable of inspecting Fabric production of a 240 loom facility.
Deploying this machine in this facility was a well thought-out
decision as this system is not subject to fatigue, downtimes, or
outside influences. It provides consistent checking the entire
quantity of fabric fed through it. There is no negligence factor,
no favors to be made, no rules to be compromised besides providing
a big pool of information that is humanly not possible. All faults
are UV tagged so that mending operation can be performed (if
necessary) at the exact location of the fault.
The machine can be programmed to inspect as per the requirements
of the customer and those criterion saved for future reference and
use. The inspection reports can be made available to client on the
web so that pre-screening of their consignment can be done timely,
effectively and in-synchronization with their production plan. In
order to cater for our direct Dye-House customers, we have the CUT
OPTIMIZATION option available. As soon as the inspection is
complete, the system performs the optimization process and suggests
the best possible way to cut the fabric to get the highest number
of pieces of the Optimal Quality.
Power Generation & Heat Recovery System
Colony Weaving Mills is fully-contained and self-sufficient
facility with its in-house continuous and reliable power generation
facility with 100% backup power arrangement. The Power Generation
department with its Heat Recover System is designed to generate
enough hot water to fire the chilling system for the entire
facility, along with producing more than 50% of the steam required
for the sizing operation.
Memberships
(Lahore Chamber of Commerce Industries
(APTMA (All PAKISTAN TEXTILE MILLS ASSOCIATION).
Products
Yarn
The company is producing 100% cotton yarn, 100% Polyester yarn,
100% Viscose yarn and mixed yarn of various counts ranging from
coarser Number English 20 count to finer Number English 80
count.
Fabric
CIL is producing Grey Fabric with following fiber types, for
abbreviations detail see Glossary:
Organizational Structure
The concept of an organization chart shows what positions exist,
how they are grouped and who reports to whom.
The organizational structure should be designed to provide both
vertical and horizontal information flow as necessary to accomplish
the organizational overall goals. If the structure doesnt fit the
information requirements of the organization, people will have
either too little information or will spent time on processing
information that is not vital to their tasks, thus reducing
effectiveness.
Colony Groups structure is a hybrid of divisional and functional
structures; divisions are based on two products Yarn (Spinning
Facility) and Grey Fabric (Weaving Facility).
Top positions are as follows:
See Annexure 1.1
Group Profile
Board of Directors
Mr. Mughis A. Sheikh (Chairman)
Mr. Fareed M. Sheikh (Chief Executive Officer)
Mr. Zarrar Ibn-e-Zahoor
Mr. M. Akram Qureshi
Mr. Najeeb Ahmed
Mr. Muhammad Shakeel
Mr. Tahir Mahmood
Registered Office
M. Ismail Aiwan-e-Science
Shahrah-i-Jalaluddin Roomi,
Ferozepur Road Lahore 54600
Phone: (042) 5758970 2
Fax: (042) 5763247
Colony Industries (Pvt.) Limited
CIL consists of two divisions Weaving & Spinning; following
is the top positions in CIL.
See Annexure 1.2
Accounts Department
Accounts Department keeps track of all transactions. Each and
every sales confirmation note and purchase confirmation notes come
to Accounts Department for making timely payments and recovery of
money from buyers.
Internal auditing is also another responsibility of Accounts
Department for smooth and clear handling of operations.
See Annex 1.3
SWOT Analysis
Strengths:((ISO 9001-2000:
((Strong Security System
((High quality product
((Latest mechanized machinery.
((Tremendous market positioning
((Highly qualified and skilled management
((Highly Motivated Workforce
((Adequate financial resources
((Competitive advantage
((Own power generation plant
Weaknesses:((High cost of production
((Centralized decision making
((Less promotional activities
Opportunity:((Organization Can expand product lines
((Organization Can capture new market segments around the
world
((Organization Can reduce the cost by proper utilization of
resources
((Organization Can hire more well-educated and experienced
person
Threats:((New Entry of competitors
((Buyer needs demands changes
((Political instability
((Change of government policies
((Globally Economic instability
Detail of SWOT AnalysisStrengths:
((ISO 9001-2000:CTML is certified under ISO 9001-2000 and so it
meets the requirement of international standard and has a value in
the mind of concern people.
((Strong Security SystemCTML has a greater security system.
There are different hidden security cameras which capture all the
moments.
((High quality productCTML is using advance technology like they
have modern machinery by which the quality of product produced is
very high.
((Latest mechanized machinery.They are using modern looms which
they have purchased from Japan, Germany and France. And by using
that latest machinery the productivity of the employees are very
high.
((Tremendous market positioning CTML is one of the Pioneer
Textile Group in the Pakistan so it has got the position in the
mind of its customer. And being an old textile company people are
loyal with it. CTML has a better position in the mind of its
customers.
((Highly qualified and skilled managementThe management of CTML
is skilled they have hired the foreign graduate people in their
management and also experienced people from all over the
country.
((Highly Motivated WorkforceThey are providing better pay to
their employees and also bonus to them which motivate the workforce
and they are doing well at work setting. Apart from that they are
giving their employees facilities of Convenience like personal car
along with fuel provided by the company too, which is a big deal
for motivating the employees.
((Adequate financial resources The owners of CTML are one of the
richest persons of the Pakistan and they have more plant and
investment in other industries like Sugar Mills, and Share Market.
They have adequate financial resources to meet their
requirements.
((Competitive advantageBecause it is an old textile originating
from 1950s and it has still kept its position in the textile market
on all competitors nationwide, which is its competitive
advantage.
((Own Power Generation PlantThey have own power generation plant
and CTML is the pioneer in the private organization who start the
power generation.
Weaknesses:
((High cost of productionThe production cost is high because of
un-proper utilization of resources.
((Centralized decision makingThe decisions are made by the upper
management which is weakness of the CTML because they have not any
proper idea about the prevailing situation and their decision can
be un-fruitful for the company.
((Less promotional activitiesThe advertising and promotional
cost of the CTML is very low it can take advantage for more turn
outs.
Opportunity:
((Organization can expand Product LinesCurrently the CTML is not
dealing in knitwear they can expand their product line by producing
knitwear. They have plants and the extra cost for the production
will be low for CTML. They also have better market repute.
((Organization can reduce the cost by proper utilization of
resourcesIf the cost of different matters which are not been
utilized properly, is controlled by the CTML management they can
produce more at less costs. It has to develop a further systematic
process for controlling and managing resources.
((Organization can hire more well-educated and experienced
personThey can take advantages by hiring more skilled people and
they should hire young, fresh and energetic staff for their
betterment. Because being human, you always have the room for
betterment in any aspect.
Threats:
((Buyer needs demands changesBecause of the research &
development the design and the product of CTML is just satisfactory
as compared to competitors in the global environment and they are
not fulfilling the demand of customers.
((Political instabilityPolitical instability effects the CTML
because of the quota system, Government can restrict the Company to
export.
((Changed of government policiesGovernment policies are changing
day by day so it is always a threat for not only CTML but for any
company to survive in such a environment.
((Globally Economic instability Because of the economic
instability the CTML and the Dumping system which is rising on
daily basis in the world can create many problems for the company
and any uncertainty in the world like 9/11 may also affect its
overall exports.
PEST Analysis
Political Instability
The political situation of Pakistan is not satisfactory. Due to
the rapid change in the Government every government sets its own
new trade policies.
Govt. should apply sustainable policies for the beneficial of
the exporters as well as the investors.
Economic situation:
The economic condition of Pakistan can also affect the foreign
investors increasing inflation rate make the cost of production
high and thus reduce the profit margin of the investor.
Social situation:
The change in the lifestyle of the people affects the growing
demand of the CTML products. The change in the lifestyle and needs
in different demographics also affect the demand of the
customers.
Technological factor:
Technological advancement in all the sectors of the country has
changed the entire socio-economic environment. Especially in the
textile sector there is a lot of technological development.
CTMLs excellent computerized machines and devices have made
extension in its present setup of well advanced technology imported
from Japan, Germany and France.
MARKETING STRATEGY
CTML is a group starting from 1950s which means that it is an
old and pioneers of Textile industry in Pakistan. On its purchase
side as I have worked for a whole week in Yarn Procurement
department of the Group, which is a small branch of Marketing
department. I found their business to be such a vast that they
ordered their raw material on telephones, they made contracts with
the new companies and those companies having already contracts had
no need to made. The main which were daily paid were mainly to the
ICI for polyester and then to companies like Nishat, Sitara
Textiles and many more companies and groups like that. Their fiber
is very famous not only nationally but internationally as well.
Secondly on Europe sector this group is very well known as they
purchase machinery from them and then they supply Methane to them,
which is used in mixing with petrol. Though it is a by-product of
sugar sector yet it is branch of the same company. This is helpful
for the Textile division too.
The past year has been tough for the textile industry as
competition is increasing steadily and margin of profit is becoming
smaller day-by-day. Our competitors from Asia have come up in a big
way with lower prices resulting from lower overhead, cheaper and
better raw materials and machinery.
Countries like China, Indonesia, India and Bangladesh played an
active role in the fabric market. Improvement in quality and
production capability was the main area of concentration.
Market for Yarns and Grey fabrics was diversified to increase
the customer base and reduce dependency on the Far East. In this
effort business with Malaysia, Korea, Taiwan, UK and South America
was initiated in case of Yarns.
In case of Grey Fabric market business was initiated in South
Africa, North America, Japan, Italy, France, and Sri Lanka etc.
Product range was also increased to cater to the differing needs of
the buyers. Fancy and special items like Dobby Designs, Bedford
Cords, and Caviar Twills and stretch fabrics were developed which
are being sold at premium prices.
CTML has constantly updated our machinery, replacing old
machines with new ones upgrading the existing set-up, leading to
better efficiencies and quality products.
Leaving behind the traditional way of doing business and in our
journey towards excellent it has consistently expanded its buyer
base and explored the different markets around the world.
Keeping in view demand of the World market, CTML pursued its
strategy of value addition and reducing the dependency on Grey
Fabrics and Grey Yarn.
Having the foresight to assess that in coming years value
addition will be the thing of the future, CTML worked towards the
achievement of its goal of future increasing its capability in
value addition.
The export of processed fabric and made-Ups has shown market
improvement as compared to last year.
It has placed us successfully in the middle to upper end of the
market. Our strength in Europe is the curtain division.
This included yarn dyed dobbies, engineered confections,
different finishes and embellished products. The plan is to
continue with this winning strategy and at the same time we are
trying to find new clients in the high end.
We are also exploring business opportunities in countries like
Spain and France where CTML has very little business at the
moment.
North America is the star market for CTML; its a new market for
it after breaking up the exclusive arrangement with our previous
sale set-up. The quota is coming down in 2005 and we have started
to prepare for it internally as well as for the external
environment. Bedding is the bulk of the home textile business.
CTML is in the process of updating its machinery to cater the
needs of the wider width fabric requirement for USA bedding
business. CTML is also taking up the social accountability issues
very seriously, which are so dear to the American consumers. A lot
of big brand US companies have visited us and are discussing the
possibilities of a joint venture.
The opportunities are limitless, we have to review and analyze
them very thoroughly to associate with the right people in the long
run. In shorter term we are building a small amount of quota, which
will give us recognition as a bedding supplier.
CTML is very strong in non-quota categories like curtain and
table linen. These categories are best served with new product
development (NPD). CTML will coordinate the effort for NPD by all
markets to optimize results. CTML has achieved the highest sales in
1999-2002 for North America market.
On top CTML has developed more direct and closer relationship
with its end customers. Oceanic has been our most lucrative and
mature marker. In business terms it is our cash cow market.
Primarily due to being a non-quota market it had no real
limitations in this market. Despite economic problems in that
region, it has maintained our sales figures in the year under
review. This market is a good design source for other markets,
which is helping us to maintain our print volumes.
Middle East market is composed of South Africa and the new
emerging markets like the UAE, Egypt, Saudi Arabia, and Jordan etc.
CTML has dedicated new staff with fresh energy for the emerging
market.
They have successfully broken the ground and we have very strong
faith that these markets will give us good volumes in the near
future. We are also targeting printed apparel business for the
first time. The latest addition is the most ambitious Apparel
Dyeing plant setup in Raiwind Mill, which has started its
production.
The effectiveness and productivity of this plant will be further
enhanced, as CTML moves towards becoming a more vertically
integrated organization.
CTML has increasing its profitability by working efficiently,
procuring better raw material and most importantly kept a very
close association with its customers.
It visits its business partners frequently and provides them
with the best service possible. All of the above mentioned points
led to strengthened relationship with its business partners making
it very difficult for its competition to penetrate into its market
share.
CTML has provided its staff with better working environment and
facilities, which enhances its efficiency and output.
At CTML, it is prospering due to its professional commitment
towards excellence and giving the best results at all times and
against all odds. Its marketing and production team co-ordinates
all the time and its focus remains on maintaining its position as
the market leader in the textile sector of Pakistan.
Competitive Strategy
As for as COLONY Group is concerned its own name is its
competitive advantage. Being an old group it has its own name in
the field of Textile as well as sugar. As I have told in the above
segment that it has business of Methane gas in Europe it is its
competitive advantage. As dealing in one different side gives you
edge over competitors in other field.
Furthermore, its financial assets are also an edge for the
group. As being late in paying any party makes future problems
which result in delivery of any product to be late and resulting in
bad image of the company.
COLONY group buys raw material from all the groups like Nishat,
Sitara Textiles, Kohinoor Textiles and many more companies like
that I cannot name all of them as it is a huge number. Which
automatically makes links better and which tells its mostly
products are exported. And for sure they are of finest quality.
Its one competitor is the Rupali group.
PURCHASE ACCOUNTING SYSTEM
For abbreviations see Glossary:
Purchase Procedure for Mill
When a Floor Shop in-charge (Foreman on the maintenance and Head
Jobber on the Production side) needs to purchase one or more items
to facilitate his sphere of work, he will fill out a PDN. A copy of
PDN used in our company appears in Appendix 999. The PDN has three
leafs. First copy is for the Purchase Department, second for the
Store at Mill, and third for the Department originating the demand.
A good quality Carbon Paper should be used so that even the last
copy is legible.
At the initial stage there are six columns that are filled by
the authorized staff of the concerned Department/Section. Those six
columns being Department, Sr. #, Item Code, Description, UOM, and
Quantity Demanded.
The company is divided in to five Consumption Departments. This
division is done in order to simplify identification of consumption
patterns, allocation and analysis of wages & salaries, and
convenience in Budgeting. The Departments namely are:
Sr. # Departments Code
1) Head Office 01-00
2) Administration 02-00
3) Spinning 03-00
4) Services 04-00
5) Residential Colony 05-00
The Department/Section code format adopted by our company is
99-99.
99-99
Department Section
Main Departments always have 00 in place of section designator.
For example, 02-02 signifies that the Department is Administration
and the Section is Time Office. However, when we want to refer to
the Administration Department the code used will be 02-00, meaning
that the code relates to a Main Department.
A Store Item Code List (SICL) sorted on Item Code as well as
Description also containing the Unit of Measure (UOM) of each item
in front of the Description is supplied to the Store In-charge,
Manager (P&A), Electric Engineer, Mills Manager at the Mill,
and Purchase Officer at the HOL. New Items added to Store Inventory
(SI) from time to time will be added manually to the list by those
who have been issued the SICL. At the beginning of every Quarter a
new SICL be issued to all concerned.
PDN No.: This is a sequentially controlled five digit distinct
number allocated to each PDN document.
Starting with 00001 to the first PDN of the financial year up to
99999 during that financial year.PDN numbers is controlled by the
Store In charge in the PDN Number Control Register. If HOL issues a
PDN, the Purchase Officer will ask the Store In charge to allocate
his demand a PDN Number. Next number in sequence will be allocated
which will be written on the PDN by the Purchase Officer. The Store
In charge will make a note of this that the PDN was made by the HOL
staff.
Department: The Section that makes the PDN fills-in its complete
code. If Ring Maintenance is filling the form, it will enter the
code 03-10 signifying that Sub-Section Ring Maintenance of Spinning
Department is demanding what is endorsed in the PDN. The
Sub-Sections description will be written in front of the blank
space provided for description. The Main Departments name will not
be mentioned in this space.
Sr. No.: The first column to be filled in a PDN will be Serial
Number that appears in an abbreviated form (Sr. No.). Under this
head, a whole-number in a sequential order will be filled-in for
keeping a count of item demanded in a particular PDN. It will
always start from 1 and go up to a maximum of 9, as there is a
provision of only 9 rows in a PDN for entry of items.
Item Code: For various reasons including statistical analysis
and MIS the Item Code has been broken into three numeric parts,
each part separated by a dash -.
The Item Code adopted in our organization is in the format
99-99-999. Store Code combines with the Item Code to form the ITEM
CODE.
99-99-999
Store Section Item Number
Store Sub-Section
PROCESS OF YARN PRODUCTON
See figure in Annexure 1.3
Production manager services the daily production schedules and
try to work according to the demand to schedule. There are many
steps involved in production of the yarn.
BLOW ROOM
The first step is that the raw cotton is sent to Blow room for
the quality of the cotton. Then it is sent to the Lab for quality
check. Here basic quality and other contents are checked in proper
form. If one kg cotton is put into this room only 600 grams cotton
goes into further production process and rest goes in wastes. Here
following are wastes excluded,
B/R Gutter
Dropping
CARDING
In this step the cotton is carded. The production manager checks
the cotton and it comes in the drums type containers. These drums
rotate and cotton comes out in specific form called as pones. Here
about 5% cotton goes in the shape of waste. Waste extracts from
this process are called by;
Card fly
COMBING
In this step the cotton goes for combing. Combing is a process
to comb and wax the cotton for softness purpose. Following wastes
are excluded from cotton in this process;
Short Fiber
Comber Noel
SIMPLEX
After the attaining of Cotton from Card and Comb processes,
which is also weak this is further passed back to blow room process
called Roving and then cotton is sent to Ring process.
RING
In this step small pones are developed for further process and
wastes are made out named;
Phnemaphil
AUTOCONING
In this step the manager in specific intervals checks the
quality of carded pones from which yarn is produced in shape of
cones by passing through machines for this purpose. Here also some
wastes are extract called;
Oily hard waste
Hard waste
PACKING
Cones manufactured in proceeding step are now kept in moisturize
room for absorbing required moisture. Cones are packed into bags or
cartoon according to customer requirements.
PURCHASE DEPARTMENT
The purchase department makes all purchases. Every demand from
different departments for different items is forwarded to store and
from here it is forwarded to purchase department if needed to
purchase. It has a main store in factory.
WORK DONE DURING INTERNSHIP
During my internship, I worked in the following departments.
(Accounts(Marketing(Account departmentIn account department, I
managed to understand the flow of transaction, preparation of
vouchers and ledger posting.
Preparation of vouchers
In account department under the supervision of concerned
officers, I came to know different type of vouchers being prepared
and their process of preparation. Vouchers are written evidence of
any business transaction. The different type of vouchers being
prepared by the account department of CTML is as under,
(Cash payment vouchers
(Cash receipts vouchers
(Journal voucher or adjustment vouchers
Now I will discuss these vouchers one by one:
Cash Payment Vouchers
Being a public limited company cash payment vouchers are used
for recording the expense of less than five thousand. These types
of vouchers are prepared when cash payments are made against small
expenses i.e. repair, entertainment etc. in order to record the
expenses following entry is passed:
Account code name of expense (debit) Amount
Cash account (credit) Amount
Evidence of expense is attached with the cash payment
vouchers.
Cash Receipt Vouchers
These types of vouchers are prepared when the cashier on behalf
of the CTML is receiving cash. However, these types of vouchers are
small in quantity because majority of transactions are done by
bank. On receipt of cash, cashier prepared the cash received slip.
Account officer prepares voucher on the basis of cash receipt
prepared by the cashier. In order to book the transaction the
following entry is passed in the books.
Account code cash account (debit) Amount
Income A/C or receivable A/C (credit) Amount
Account code Bank A/C (debit) Amount
Cheques clearing A/C (credit) Amount
ADJUSTMENT VOUCHER OR JOURNAL VOUCHERS
These types of vouchers are generally prepared in the following
circumstances;
(Purchase on credit
(Writing off assets i.e. depreciation store consumption etc.
(Rectification of mistakes or omissions
Now I discuss them one by one
Purchase on credit
Generally raw material, stores and spares are purchased on
credit. In order to account them for the journal voucher are
prepared by the concerned account officer
Account code Purchase A/C (debit) Amount
Account payable A/C (credit) Amount
Copy of the invoices is attached with vouchers;
Writing off Assets
These journal vouchers are prepared in order to change the
assets to expense for the preparation of monthly accounts.
(To account for depreciation of fixed assets:
Account code Depreciation A/C (debit) Amount
Accumulated depreciation A/C (credit) Amount
(To account for the raw material consumption:
Account code raw material concerned A/C (debit) amount
Raw material store A/C (credit) amount
(To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (credit) amount
(To account for store consumption:
Account code store concerned A/C (debit) amount
Store and spares A/C (cedit) amount
(To account for accrued expenses:
Account code expense A/C (debit) amount
Account payable A/C (credit) amount
In additional to above referred kinds journal voucher is also
passed to rectify the mistakes made in voucher preparation or
posting.
Marketing department
The main purpose of this department is to locate buyers through
agents. So marketing starts from locating the buyers, making
contract, opening of LC, shipment and in last payment is
received.
Learning as an Internee
Duties
As I have told above that I had prepared vouchers of different
types. Then I used to take vouchers of Mr. Tahir, Miss Shazia and
Mr. Ramzan to audit and brought back audited vouchers from the
Audit. Copied cheques whose payments were to be made on that day.
Then I brought a few times Invoices for sales tax from marketing
department. Maintained record of filing with Mr. Farooqui. Then in
Yarn Procurement I made worksheets for the parties who do not have
tax exemption certificate and their tax has to be deducted. Next in
purchase department, I had only worked for filing their GRNs and
maintaining them in a serial manner. I have attended calls for a
person not seat or else.
Accomplishments
As an Internee I have done all the works diligently which I have
mentioned above. Instead I had done other works as well which a
person on the job never performs, like someone asks me to take
vouchers from Audit like I am his/her Assistant I had done that and
never said no. As I have seen those employees which went to Audit
and the other asked to bring my vouchers as well and the person
says no I have my own work you should better go yourself. That is
the thing which I wanted to share in this regard.
New Knowledge Acquired
One thing regarding new knowledge is what I have shared in
Accomplishments. Next one important thing regarding knowledge
acquired is that what you are studying is not related to the job
duties you are doing are in future you have to do honestly. You
have to understand that work from start, in case of an employee
leaving a company and joining other he also will have to understand
the work in new company. I have got a lot of sense regarding
working in an organization where everyone is working out for
cutting your roots. How to work in a conservative environment! How
to behave in any situation! How to negotiate with any person on
job!
Problems Encountered
Well I dont have to face as many problems as I will have to face
when I will go on job. First few days were hard but I cannot say
there was any problem. Employees there were very cooperative and
they asked me to ask as many times about a thing till you are not
cleared about that. They guided me on every issue and asked me
as/like a big brother to learn as much as you can. I am really
thankful to all of them.
Impact of Experience on my Career
This experience definitely effects my career positively. As I
would not have been come to know about the atmosphere of any
organization, this experience has told me a lot about environment
of organization and behavior of different type of people. All of
this edge goes to my Institutes good understanding about students
future.
RECOMMENDATIONS
Colony Textile Mills Limited:
(The first and most recommendation is to eliminate one man show
prevailing in the company
(There must be a proper system for training of employees and
supervisors.
(Importance should be given to employees turnover.
(Different training courses should be arranged for the up
lifting and improving the quality of work for employees.
(There is also a problem of work overload for the employees and
it should be control properly so that the employees are motivated.
As I have seen employees working till 8 PM. And I have come to know
that sometimes they work till 1 AM late night without any
incentive.
(Employees should be paid extra for the work which they do after
working hours.
Annexure
COLONY CEOs
Figure 1.1
COLONY Division wise
Figure 1.2
CEO
(CIL)
Technical Director
(Weaving)
Chief Technical Officer
(Spinning)
Marketing Manager
Production Manager
Accounts Manager
Sales Manager
Production Manager
Accounts Manager
Finance Manager
Commercial Director
MIS Manager
Manager Personnel & Administration
Accounts Department
Figure 1.3
Procedure of Yarn manufacturing
Figure 1.4
Annex 1.5
Year ended 30th September200620072008
No. of spindles installed59,20079,864177,448
Average no. of spindles worked47,08564,195155,330
Capacity at 20 count(Kgs.)17,778,00022,841,00248,669,115
No. of shifts worked1,0921,0401,095
Actual production converted at 20
count14,652,68018,703,37847,394,446
Capacity Utilization82.00%82.00%97.38%
Glossary
(COT 100% Cotton
(PP 100% Polyester
(PC Blend of Polyester & Cotton
(CVC Chief value cotton
(PV Polyester Viscose
(Mixed Different materials in Warp & Weft
Purchase Accounting System
PDN Purchase Demand Note
GRN Goods Receipt Note
SIN Store Issue Note
SRN Store Return Note
UOM Unit Of Measure
HOD Head Of Department
HOL Head Office Lahore
G/L General Ledger
Item Code Distinct Code Allocated to an Inventory Item
Department Code Distinct Code Allocated to a Department
Section Code Distinct Code Allocated to Section of a
Department
Store Item Code List SICL
MIS Management Information Systems
Bibliography
Sources from where I have collected data:
Miss Parveen Abida, 2004, Production Accounting & Management
System, Inspection System, Introduction, Internship Report on
Colony Textile Mills Ltd. Lahore
Miss Javed Iffat, 2006, SWOT Analysis, PEST Analysis, Internship
Report on Masood Textile Mills Ltd. Faisalabad. Faisalabad
Mr. Bhatti Jamil Muhammad, 2006, Marketing Strategies,
Internship Report on Nishat Textile Mills Ltd. Lahore
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