Relience Weaving Mills Ltd01
-
Upload
kamilbisma -
Category
Documents
-
view
310 -
download
18
Transcript of Relience Weaving Mills Ltd01
-
7/30/2019 Relience Weaving Mills Ltd01
1/107
Reliance Weaving Mills Ltd.
INTERNSHIP REPORT
RELIANCE WEAVING MILLS LTD
Khanewal Road, Multan
Submitted by:
MUHAMMAD ADNANMBA (Finance)
Registration #: 22Session 2009-11
DEPARTMENT OF BUSINESS ADMINISTRATION
THE UNIVERSITY OF LAHORE
Internship Report 1
-
7/30/2019 Relience Weaving Mills Ltd01
2/107
Reliance Weaving Mills Ltd.
Internship Report 2
-
7/30/2019 Relience Weaving Mills Ltd01
3/107
Reliance Weaving Mills Ltd.
It is with great respect that this work
is dedicated to
MY PARENTS
whose blessings serve as
inspiration to me
without whom nothing would be
possible.
Internship Report 3
-
7/30/2019 Relience Weaving Mills Ltd01
4/107
Reliance Weaving Mills Ltd.
ACKNOWLEDGEMENT
Praise to Almighty Allah and His Prophet, Muhammad (PBUH) Who
blessed me with the potential and ability to complete this study.
I am also indebted to the eminent academicians my teachers,
Mr. Khalid Aziz, Mr. Malik Mubashir from whom I have learned a great
deal of knowledge, at different stages during my stay in the
Department. In addition, my class-fellows, particularly deserve my
deep and sincere gratitude for their cooperation, and assistance during
this research.
In the end, I find no words to express my feelings of gratitude
and profound admiration to my affectionate father and mother for their
invocations and benedictions, my brother for his moral support to
carry myself through noble ideas of life, and my sisters for their
devotions, innocent smiles and love. I can do no more than reaffirm
my devotions to all members of my family.
M. Adnan Nazir
Internship Report 4
-
7/30/2019 Relience Weaving Mills Ltd01
5/107
Reliance Weaving Mills Ltd.
RELIANCE WEAVING MILLS LTD is located in Multan. Relianceweaving Mills Ltd. (RWML) is part of the Fatima Group. Fatima Group
established RWML on April 7, 1990 as a public limited company and
obtained certificate for commencement of business on May 14, 1990.
I visited RELIANCE WEAVING MILLS LTD three times for my
report and was always warmly welcomed by their management and
employees. All machinery installed in the mill is American. Plans andstrategies are made in the head Office. Raw materials purchase
decision is also made in the Head Office. Employees work in three
shifts, whereas these are both permanent and on daily wages.
The mills units is supported by different facilities as canteen, store
room, laboratory, godown, and many others. The production process
is divided into two sections:
In this report I have done SWOT analysis of RWML. Good quality
with reasonable price is the major strength of RWML. Export sales
cover major portion of total sales due to good quality. They contain
very low portion of local market. Centralized decision-making is one of
the weaknesses of the RWML, but good management covers this
weakness in an appreciable manner. So for as Account department is
concerned though there is a little bit workload on the employees, but
inside friendly environment helps a lot to cover these tasks without
fatiguenes and boredom.
Finaly I have given some recommendations to cover these threats. My
suggestions were highly appreciated by the management of RWML.
Internship Report 5
-
7/30/2019 Relience Weaving Mills Ltd01
6/107
Reliance Weaving Mills Ltd.
INTRODUCTION TO TEXTILE SECTORInternship Report 6
-
7/30/2019 Relience Weaving Mills Ltd01
7/107
Reliance Weaving Mills Ltd.
Textile includes all the business related with yarn and cloths, so all the
business from Cotton Ginning to Cloth and Apparel manufacturing
comes under the Textiles. There are different functions of Textiles,
which are as under:
Ginning
This is the first stage where cotton is separated from the seeds. Raw
material of this stage is Cotton Seed. RELIANCE WEAVING MILLS LTD
does not deal in this function.
Spinning
Raw material of this stage is Ginned Cotton. This cotton is spun to
make yarn. Yarn produced in various qualities, this is the main raw
material of RELIANCE WEAVING MILLS LTD, which is purchase from
local market.
Weaving
In weaving unit yarn is converted into cloth through power looms orthrough hand driven machines. RELIANCE WEAVING MILLS LTD,
engaged in this function.
Processing and Dying
Cloth is further processed and it could be used for a lot of purposes,
like Bed Sheets and Garments etc.
Internship Report 7
-
7/30/2019 Relience Weaving Mills Ltd01
8/107
Reliance Weaving Mills Ltd.
Cutting and Stitching
This is a final use of cloth in which Cloth is cut and stitching made by
the exporter than it commercializes to various importers of the
garments through wide world marketing department.
History of the Textile Industry
Whilst farmers were developing new and better methods of
agriculture, life in other areas of work had changed little for hundreds
of years. Early in the 18th century, most of the population still lived in
Internship Report 8
-
7/30/2019 Relience Weaving Mills Ltd01
9/107
Reliance Weaving Mills Ltd.
small, rural settlements. Few people lived in towns, as we now know
them.
Many people worked as producers of woolen and cotton cloth. They
cleaned, combed, spun, dyed and many people worked as producers of
woolen cloth. They cleaned, combed, spun, dye and wove the raw
material into cloth. They did this work in their own houses. This type of
production has become known by the general term of the Domestic (or
Cottage) Industry.
Work within the Cottage Industry was usually divided up between the
members of one family. The women and girls were responsible for
cleaning the sheep fleeces, carding the wool and spinning it. The
process of weaving was physically hard work and, traditionally, it was
the men who were responsible for it.
Generally, at regular intervals, a cloth merchant visited each handloom
weavers cottage. He would bring the raw material and take away the
finished cloth to sell at the cloth hall.
As soon as the new wool arrived, it was washed to clean out all the dirt
and natural oil. After this, it was dyed with color and carded. This was
the process of combing the wool between two parallel pads of nails,
until all the fibers were laying the same way.
Next, the carded wool was taken by the spinner and, using a spinning
wheel, the thread was wound onto a bobbin. The unmarried daughtersof the household who were called spinsters often performed this part
of the process. The term spinster still exists in English to mean an
unmarried lady. The spun yarn was then taken to the loom to be
woven. In a weaver's cottage, the loom was often to be found on an
Internship Report 9
-
7/30/2019 Relience Weaving Mills Ltd01
10/107
Reliance Weaving Mills Ltd.
upper floor. There were large windows in the room to let in plenty of
daylight. The loom was worked by both hand and foot movements.
Working the loom was quite strenuous work, which is why it was
traditionally the work of the men of the household.
TEXTILE INDUSTRY IN PAKISTANTextile is the important sector of Pakistans economy. It is playing the
important t role in economy of Pakistan and fulfilling the 65% export
target.
Internship Report 10
-
7/30/2019 Relience Weaving Mills Ltd01
11/107
Reliance Weaving Mills Ltd.
PERFORMANCE
The textile industry which is endowed with a strong base of
weaving had started its journey from almost non existence in 1947
with a meager size of 3000 shuttle looms that is too in the
unorganized sector with only 10 textile units. The industry has gone
through a long way and now possesses 220 units, 45000 looms in
which include more or less 30000 shuttles looms. The textile industry
is not only catering to the entire local requirement but sharing out
65% of the total foreign exchange earning.
Pakistan being the fifth largest cotton producing country
provides a strong base for development sustenance of the textile
industry. In spite of tremendous growth in all the peripheral areas of
the textile industry includes cotton, ginning spinning, processing and
made up sector. This industry which is the main pillar of the economy
has not attained its optimum potential so far.
The textile industry at present is passing through a transition
phase. It is sailing smoothly under the protected cover of quota
systems. How ever it has to face the rough water to open the sea
when globalization of trade is implemented under` WTO agreement in
2004.
CAPACITY INSTALLED
OPERATIVE
PERIOD. UNITS LOOMS LOOMS
1999-00 55 6600 55002000-01 59 7080 61002001-02 91 10920 91282002-03 105 13125 11125
Internship Report 11
-
7/30/2019 Relience Weaving Mills Ltd01
12/107
Reliance Weaving Mills Ltd.
2003-04 115 14375 129502004-05 153 19125 195562005-06 166 20750 198402006-07 157 19480 17850
PRODUCTION
PERIOD GREY CLOTH
IN METERS (000)
2000-01 6022502001-02 6679502002-03 9995162003-04 12181872004-05 1428025
2005-06 21413822006-07 2172400
CURRENT POSITION OF TEXTILE
INDUSTRY
With the exception of the period from 1958-59 to 1974-75; the textile
industry could not maintain, a sustainable growth, and registered its
growing rate at the nominal level in the country. In the organized
sector there are 452 textile companies of which 212 are not listed and
240 textile units are listed on KSE/LSE comprising of 157 spinning
units, 29 weaving units and 54 composite units. While the total
Internship Report 12
-
7/30/2019 Relience Weaving Mills Ltd01
13/107
Reliance Weaving Mills Ltd.
number of textile units both listed and unlisted is however is around
452 approximately.
The weaving capacity of the textile industry in our country is static at
9000 shuttle looms for past many years. The capacity of conventional
looms is also around 19840, which have no match with quantum jump
the industry ahs taken in this spinning sector. Instead of going for
value added products the frenzy for setting up spinning projects
dictated the mind of the textile industry over the years which took the
4.1 million spindles in 1996-97 instead of going to more value added
textile products like dying bleaching units in the country.
CAPACITY UTILIZATION (%)
PERIOD LOOMS1999-00 79.502000-01 81.002001-02 82.90
2002-03 85.102003-04 86.202004-05 87.002005-06 88.002006-07 90.00
Internship Report 13
-
7/30/2019 Relience Weaving Mills Ltd01
14/107
Reliance Weaving Mills Ltd.
EXPORTS
The textile exports projection in the trade policy 1999-00 worth
6.5 billions $ of major textile products include cotton yarn with the
target of 1800 million $, grey cloths 1680 million $, ready made
garments 1050 million $, tent and canvas 55 million $, knit wear 950
million $ and made-ups 965 million $.
The industry has to achieve these targets in the face of difficult
t6rading conditions especially the disturb economies of Asian
countries, threat of imposition of anti dumping duties on our gray
cloths by the European Union countries, (E.U. has withdraw and anti
dumping duty w.e.f 1.01.2002) cotton yarn of 20/s in Japan and
constant decrease in imports from South Korea, all together posting an
Internship Report 14
-
7/30/2019 Relience Weaving Mills Ltd01
15/107
Reliance Weaving Mills Ltd.
uphill task of achieving the export targets for the textile industry
during the financial year. Duty drawback (rebate) is reducing from
time to time and changing in sales tax refund to export oriented units,
which is very poor sigh for the exporter of the value added items.
PROBLEMS OF THE TEXTILE SECTOR
The textile industry has been crisis ridden for some time because of
shortage of raw material due to three successive cotton crop failures.
The main problems it is facing are as under;
1) The production of lint cotton ahs remained below the target.
2) The shortage and non-availability of the lint cotton in the
domestic market has led to the price-hike in domestic market.
3) Competitors installation of over capacity in some production
lines or closure of spinning capacity due to higher prices and
short supply.
4) Docile labor-intensive technology, needed to be changed to cost
efficient capital intensive.
Internship Report 15
-
7/30/2019 Relience Weaving Mills Ltd01
16/107
Reliance Weaving Mills Ltd.
5) Lack of institutional finance for modernization efforts.
Internship Report 16
-
7/30/2019 Relience Weaving Mills Ltd01
17/107
Reliance Weaving Mills Ltd.
RELIANCE WEAVING MILLS LIMITED
MULTAN
GROUP PROFILE
The company has been sponsored by FATIMA GROURP in Multan.
The sponsors are already engaged in the field of manufacturing Sugar,
Cotton lint yarn, Grey cloths. Their company, RELIANCE COMMODITY
PVT. LTD has been awarded Best Performance Trophies for the years
1997-98 to 99-00 in the field of export of Molasses declared the top 5
company of the Pakistan. The sponsors have also taken up the
managing control of a band new spinning unit at Rawat Distt.
Rawalpindi form UBL through bidding.
Following are the companies included in the group:
Sr. # Company Name1. FATIMA SUGAR MILLS LTD.
2. RELIANCE WEAVING MILLS LTD.
3. RELIANCE COTTON PVT. LTD.
4. RELIANCE COMMODITIES PVT. LTD.
5. RELIANCE EXPORT LTD.
6. RELIANCE FIBRES LTD.
7. FATIMA FERTILIZER COMPANY LTD.8. FAZAL CLOTH MILLS LTD.
9. AHMED FINE TEXTILE MILLS LTD
Internship Report 17
-
7/30/2019 Relience Weaving Mills Ltd01
18/107
Reliance Weaving Mills Ltd.
COMPANY PROFILE
Reliance weaving Mills Ltd. (RWML) is part of the Fatima Group. Fatima
Group established RWML on April 17, 1990 as a public limited company
and obtained certificate for commencement of business on May 14,
1990.
Authorized capital of RWML at the time of incorporation was Rs.250
million and presently RWML has authorized and paid up capital of
Rs.700million which has gradually increased and at present
subscribed share capital of company stands at Rs. 308109370 , listed
at Karachi and Lahore Stock Exchanges and also inducted into Central
Depository Company (C.D.C). The company has issued 1st tranche of
Term Finance Certificate (TFCs) of Rs. million in February 2002,
which has been fully subscribed. These TFCs are listed at Karachi
Stock Exchange and has also been declared as eligible security in
C.D.C.
The principal business of the Company is manufacture and sale of
cotton yarn and grey woven fabric. RWML production capacity consists
of two main segments, Weaving and Spinning, both are ISO-9002
Certified for its quality. Today Reliance weaving Mills Limited is the 3 rd
largest weaving mill in Pakistan with modern and technologically
advanced greige weaving plant. The we4aving units are situated at
Multan and the Spinning unit at Rawalpindi. The details are as under:
Internship Report 18
-
7/30/2019 Relience Weaving Mills Ltd01
19/107
Reliance Weaving Mills Ltd.
Weaving units:
Weaving unit is situated at Fazalpur; Khanewal Road, Multan
commenced its commercial production on May 01, 1993 with 96
Tsudakoma air jet weaving machines imported from Japan along with
modern auxiliary machinery to produce high quality cloth for export
markets. Further and additional 20 Tsudakoma air jet weaving
machines form Japan were installed in 1999 coupled with yarn
doubling and twisting machines to produce value added fabrics. The
installed production capacity of the unit is approximately 16.085
million meters per annum. Further more, a captive power plant
consisting of 2.5 MW
Capacities are also installed in the weaving unit-1 by which the
company is saving power cost and production losses.
During the last financial year, the company has implemented and
expansion project for its weaving unit at a cost of a about Rs.500
million, comprising 108 Tsudakoma air jet weaving machines from
Japan along with modern auxiliary machinery to produce high quality
cloth for export markets. The project started its commercial production
from October 01, 2001. The installed production capacity of the unit is
approximately 21.70 million meters per annum.
Internship Report 19
-
7/30/2019 Relience Weaving Mills Ltd01
20/107
Reliance Weaving Mills Ltd.
Another 48 air jet looms expansion plan in existing weaving unit # 2 is
at advance stage, which will result in increase in production
approximately by 9.00 million meters per annum. Now weaving unit
comprise of 295 Tsudakoma with production capacity of 57.6 million
meters of grey cloth annually.
Spinning Unit:
The spinning unit of the RWML is located at Mukhtarabad, Rawat, and
District Rawalpindi in the province of Punjab. The unit commenced its
commercial production on October 01, 1999 with 14400 spindles with
a very good combination of European and Japanese machinery with
allied accessories. It produces high quality yarn for in-house
consumption and for export markets. The installed capacity after
conversion into 20/s count is approximately 4.849 million kgs.
The spinning unit has 35,520 spindles with an installed capacity of
12.30 million kgs of yarn converted at 20/s count. Cotton yarn
produced is used in weaving units for manufacturing of fabric being
sold in local and export market.
Internship Report 20
-
7/30/2019 Relience Weaving Mills Ltd01
21/107
Reliance Weaving Mills Ltd.
ORGANIZATIONS (RWML)
HIERARCHY
Internship Report
CHIEF EXECTIVE
21
FINANCE
MANAGER
MKTING
MANAGER
PURCHASE
MANAGER
ACCOUNTS
MANAGER
INTERNAL
AUDITOR
C.F.O.
DCA ASSISTANT
ACCOUNTANT
CHAIRMAN
CHIEF
ACCOUNTANT
-
7/30/2019 Relience Weaving Mills Ltd01
22/107
Reliance Weaving Mills Ltd.
Internship Report 22
-
7/30/2019 Relience Weaving Mills Ltd01
23/107
Reliance Weaving Mills Ltd.
VISION STATEMENT
The company is interested to install complete textile finishing plant
including bleaching, dyeing, mercerizing, calendaring, folding, printing
plant in the existing weaving units at Multan to make it a complete
composite unit, which can explore local and international market of
high value products. The company would keep its emp0hasis on
product and market diversification, values addition and cost
effectiveness. We want to fully equip the company to play a
meaningful role on the sustainable basis in the economic development
of the country.
MISSION STATEMENT
The mission of the company is to operate state of the are textile plants
capable of producing yarn and fabrics.
The company will conduct its operations prudently assuring customer
satisfaction and will provide profits and growth to its shareholders
through:
Manufacturing of yarn and fabrics as per the customers
requirements and market demand. Exploring the global market with special emphasis on Europe
and USA.
Internship Report 23
-
7/30/2019 Relience Weaving Mills Ltd01
24/107
Reliance Weaving Mills Ltd.
Keeping pace with the rapidly changing technology by
continuously balancing, modernization and replacement
(BMR) of plant and machinery.
Enhancing the profitability by improved efficiency and costcontrols.
Recruiting, developing, motivating and retaining the
personnel having exceptional ability and dedication by
providing them good working conditions, performance based
compensation, attractive benefit program and opportunity for
growth.
Protecting the environment and contributing towards theeconomic strength of the country and function as a good
corporate citizen.
COMPANYS QUALITY POLICY
COMMITMENT TO EXCELLENCE
All of our priorities action and products must be recognized
as an expression of unique quality.
We are dedicated to produce fabrics and yarn of the best
export quality to meet the requirement and expectations of
our customers.
We strive for continuous improvement in day-to-day
quality work; organize the training and necessary feedback
on our performance.
Internship Report 24
-
7/30/2019 Relience Weaving Mills Ltd01
25/107
Reliance Weaving Mills Ltd.
THE PROJECT
The project of setting up 96 looms was successfully completed and the
company commenced commercial production on May 01, 1993. The
capacity of the project is 15.50 million Mtrs. Grey Cloth per year. In
addition to further 20 looms was a installed in 1997 along with
doubling machine and self power generation plant of 2.5 MW was
installed in 1999.
PLANT AND MACHINERY
IMPORTED
The imported plant and machinery for the project are purchased from
world renowned manufacturers of textile industry machinery. The
production facilities are supported bay a very modern quality control
department equipped with laboratory and testing equipment based on
latest technology.
The imported plant and machinery includes:
120 Shuttless Looms from Tsudakomna.
Humidification Plant & Chilly Equipment from Luwa
Switzerland.
Overhead Travelling Cleaner from Luwa Switzerland.
Sizing machine from Sucker & Mullar Germany.
Knotting machine from Tomen Corp. Germany.
Air Compressor & Dryer from Atlas Capco Belgium.
Internship Report 25
-
7/30/2019 Relience Weaving Mills Ltd01
26/107
Reliance Weaving Mills Ltd.
Warping Machine from Benninger Switzerland.
Vaccum Cleaning plant from Germany.
Power Generator from UK.
3 sets power Generator (Gas) from Caterpillar Switzerland.
The above plant and machinery was imported with the foreign
currency financial assistance of Muslim Commercial Bank Limited.
LOCAL
The plant and machinery locally purchased up to 20% of the total
machinery, which is as under:
Bailing Press
Motor Lifter 2 Nos.
Beams 100 Nos.
Electric material from semins.
Folding Machines 3 Nos.
Equipment for workshops.
Electric appliances.
Fire fighting equipment.
Both the imported and local machinery was brand new at the time of
purchase.
Internship Report 26
-
7/30/2019 Relience Weaving Mills Ltd01
27/107
Reliance Weaving Mills Ltd.
COST OF PROJECT AND MEANS OF FINANCE
ESTIMATED COST
Pak. Rs. In (Million)
Imported machinery 210.50
Import incidentals 25.20
Local machinery 13.50 Land, Building, Others 44.80
Total Estimated cost 294.00
ACTUAL COST
Imported machinery 199.00
Imported incidentals 22.40
Local machinery 5.60
Land, building, others 47.00
Total actual cost 284.00
The company has successfully completed the project within the
projected cost by saving at least 11.00 (m) from the imported
machinery due to forward booking of US $ on L/Cs through speculation
with the bank.
Internship Report 27
-
7/30/2019 Relience Weaving Mills Ltd01
28/107
Reliance Weaving Mills Ltd.
FINANCING
The project has been financed through;
Pak.Rs. In (M)
Share holders equity 109.55
Redeemable capital 3.00
FC loan I.BR.D Line world bank 146.45
Local Bank Loan 13.60
Directors Loan 4.80
Local suppliers 6.60 Actual project cost 284.00
Internship Report 28
-
7/30/2019 Relience Weaving Mills Ltd01
29/107
Reliance Weaving Mills Ltd.
COMMERCIAL PRODUCTION
The company has commenced commercial production from May 1,
1993.
FINANCIAL YEAR
The financial year of the company is from October 1st to September
30th.
RAW MATERIAL
The basic raw material for the company is cotton yarn, which is easily
available in Pakistan.
LABOUR AND TEACHNICAL KNOW-HOW
The textile industry, being the oldest and largest industry in the
country, there is cheap labor available, both skilled as well as
unskilled. The company has hired experienced team, which is
engaged in the running of existing manufacturing facilities.
BUILDING AND CIVIL WORKS
Main factory building
Godowns 4 Nos.
Office buildings admin and ISO
Labor and staff quarters
Power house
Internship Report 29
-
7/30/2019 Relience Weaving Mills Ltd01
30/107
Reliance Weaving Mills Ltd.
The total covered area is approximately 120,120sq. Feet (13,345sq.
meters).
UTILITIES
SELF POWER GENERATION
The project has a self-powerhouse of 2.5MW consisting of 3 power
Generators imported from caterpillar to provide smooth power to the
Mills.
FEUL
Fuel requirement of the powerhouse is Sui Gas which is special
installed by company on self finance scheme by cost of Rs.10.055 (M)
and also have a diesel generator in case of any electric failure.
WATERThe total requirement of water for the project is met out of regular
supply form the Tube- well.
Internship Report 30
-
7/30/2019 Relience Weaving Mills Ltd01
31/107
Reliance Weaving Mills Ltd.
PRODUCTIONYear/Month
Ended
Production
(000 Mtrs.)
Capacity
Attained %30 September, 1998 12104 78.0030 September, 1999 13255 85.0030 September, 2000 13065 84.0030 September, 2001 13530 87.0030 September, 2002 13680 88.0030 September, 2003 13193 85.00
30 September, 2004 14339 89.0030 September, 2005 15539 96.0030 September, 2006 15980 96.0030 September, 2007 16587 97.20
It is difficult to describe precisely the production capacity in weaving
mills since it fluctuates widely depending on various factors such as
count of yarn spun looms speed, width and construction of cloth. It
also varies according to the production pattern adopted in a particular
year.
Internship Report 31
-
7/30/2019 Relience Weaving Mills Ltd01
32/107
Reliance Weaving Mills Ltd.
SALES (Cloth)
Year Total sales
Rs. (million)
Export sales
Rs. (million)
% of Export
sales
To Total sales1999 123415 54260 43.962000 402426 295639 73.462001 448905 395895 88.192002 667242 614060 92.032003 727163 660883 90.89
2004 723822 714587 98.722005 800382 755064 94.342006 1306888 1228367 93.992007 1252560 1115277 85.34
Exports are increasing due to increase in demand in various markets
because of with drawl of quota.
COMPANY DIVIDEND POLICY
Internship Report 32
-
7/30/2019 Relience Weaving Mills Ltd01
33/107
Reliance Weaving Mills Ltd.
The company is declaring regular dividend to its shareholders
since previous 5 years.
The shareholders of the company are fully satisfied by the
company management decisions regarding dividends as wellas operational matters.
Due to regular payment of dividend in each year to the
shareholders the market value of the companys share has
increased to its face value to Rs.23 per share.
Following dividends paid by the co.
2004 10% cash dividend
2005 23.50% cash dividend
2006 12.50% cash dividend
2007 52.50% cash dividend
SHAREHOLERSS RIGHTS
None of the holders of the issued shares of the co. has any special or
other interest in the property of profits of the company other than of
as holder of ordinary shares in the capital of the company.
PROCESS OF WEAVING UNIT
RWML UNIT-2 is engaged in the following functions.
Internship Report 33
-
7/30/2019 Relience Weaving Mills Ltd01
34/107
Reliance Weaving Mills Ltd.
WEAVING
Different types of the cloths are produced in the Weaving department.
Weaving process includes the following steps.
Yarn receiving and issuing
Doubling/twisting
Loading on sizing
Sizing
Loom shed
Cutting/Folding and Packing
Yarn Receiving and Issuing
Following is the process of yarn receiving and issuing:
Yarn receive
Yearn tested through lab
Yarn record maintained in computer
Yarn requisition/issuing
Yarn Receive
First of all in weaving unit yarn received by yarn clerk from the
spinning unit. Yarn clerk check and count the bags and arrange its
stacking in very arrange manner.
Yarn Tested In LabAfter receiving the yarn at least 2 cones are send to the lab to check
the weight/quality count and length.
Internship Report 34
-
7/30/2019 Relience Weaving Mills Ltd01
35/107
Reliance Weaving Mills Ltd.
Yarn Record
After receiving the correct result of the yarn from lab, it is recorded in
stock register maintained in computer.
Yarn Requisition/Issuing
Yarn is issued to warping department after receiving the requisition
from the General Manager/Production Manager.
YARN DOUBLING/TWISTINGThe company has own doubler and twister machine in which yarn is
doubled and twisted before issuing to warping section. But it must be
noted that this process can only be operated due to demand of the
certain construction to the cloth.
WRAPING
After receiving the yarn it is loaded on creel frame for the purpose of
warping. There is one set in one time comprising of 12 Beams in which
yarn warped for sizing. It is called one set ready.
SIZING
In this department one set consisting of 12 beams loaded on the sizing
machine where all the chemicals are mixed and thread passed way
from this mixture and prepare one full beam at the required length,
which is commonly consisting of 55000 to 60000.
Following are the chemicals used in the sizing machine:
Internship Report 35
-
7/30/2019 Relience Weaving Mills Ltd01
36/107
-
7/30/2019 Relience Weaving Mills Ltd01
37/107
Reliance Weaving Mills Ltd.
There are two concepts of warp and weft in the looms shed.
Warping is called the running of sized beam in state away and
weft is called running of yarn cones in side away.
Machinery operation
In the looms shed there are more or less 40 workers are
appointed on the looms. Each person is responsible for his three
looms regarding breakage of thread, quality of cloth and
efficiency of the loom production.
This department has all the technical as well as maintenance
staff in the loom shed so that any discrepancies may timely be
removed and production may not suffer.
PACKING
There are two kinds of cloth packing one is bales shape band and
other is in roll. All these packing are made with polythene bags
which received from the store room bales are exported to Japan,
Hong Kong, China and Taiwan. While roll packing are exported to
USA and European countries.
Normal packing
1 Bale = 500 Meters and 600 Yards
1 Roll = 350 Yards
Piece length
Internship Report 37
-
7/30/2019 Relience Weaving Mills Ltd01
38/107
Reliance Weaving Mills Ltd.
1to 10 mtrs use in cut piece sale
11 to 20 mtrs use in local normal sale
21 to 50 mtrs use for export
The packing may be changed in accordance with the demand of
customers as well as the nature of consignment.
PRODUCTION REPORTS
Different reports are prepared when yarn is received from sizing
section to completion of cloth. All records are maintained
completely.
Yarn receipt report in weft
Sized beam receipt report
Waste report
Leno (cuttari)Rags (cloth)
Cut pieces
Daily used report
Efficiency report
Daily production report
Internship Report 38
-
7/30/2019 Relience Weaving Mills Ltd01
39/107
Reliance Weaving Mills Ltd.
Internship Report 39
-
7/30/2019 Relience Weaving Mills Ltd01
40/107
Reliance Weaving Mills Ltd.
MARKETING MIX
Marketing mix is the marketing tasks that the company is to acquire
its objectives in the target market.
4 PS
1. PRODUCT
2. PRICE
3. PLACE
4. PROMOTION
1. PRODUCT
RWML produces high quality cloth only. They produce all kinds of
construction as demanded by to customers. Its exports are more
than 90% of its produce and remaining they sell in the local
market. They sell to the well known local buyer like Al-Abid Silk
Mills ltd. Fateh Textile Ltd. Chenab Ltd., which are the top
leading companies of the Pakistan subsequently they export the
cloth after processing. RWML take the advantage of second
exporter from the govt. department.
TYPES OF CLOTH BEING PRODUCED
100% Cotton Grey Cloth of the following main types is being
produced.
Internship Report 40
-
7/30/2019 Relience Weaving Mills Ltd01
41/107
Reliance Weaving Mills Ltd.
20*20/108*56=63
20*16/128*60=61.5
10*10/80*54=55
30*30/100*60=72
2. PRICE
Pricing is an important element in the marketing process for any
company. The price policy of co. should be in such a way that it
should produce a reasonable profit for the co. and should satisfy
the customer. Following tow factors are very important.
Fixed cost
Variable cost
FIXED COST
Fixed cost is the costs which remain always same in total
whether produce large quantity or small quantity. Fixed cost per
unit rises as the quantity produced decreases and vice versa.
Some of the important factors of fixed cost are;
Salaries
Rent
Local taxes
Internship Report 41
-
7/30/2019 Relience Weaving Mills Ltd01
42/107
Reliance Weaving Mills Ltd.
VARIABLE COST
Variable cost changes in total with the change in quantity
produced. It increases in total as quantity increases but remains
same on per unit basis. Some examples are;
Material cost
Labor cost
FOH
RWMLS PRICING STRATEGIES
RWML adopts following pricing strategies:
Direct selling
Through agent selling.
Direct selling
If co. sells directly then price components will be as follows;
Fixed cost+variable cost+Desired profit
Through agent selling
Through agent selling pricing components are:
Fixed cost+variable cost+Desired profit + Middlemans
commission
Internship Report 42
-
7/30/2019 Relience Weaving Mills Ltd01
43/107
Reliance Weaving Mills Ltd.
Pricing Procedure in Local Market
RWML sells only extra quality left from the foreign order in the
local market. They call tenders when they want to sell the
production in the local market. They sell to those person whose
tender price will be high.
Pricing Procedure for Export
Pricing procedure for export is different from the local procedure
they charging the price in foreign factors before charging the
mind certain factors before charging the price in foreign market.
When any customers want to purchase the products after
negotiation they fix the price. Some important factors are inland
freight, sea freight clearing charges etc.
3. PLACE ( Distribution Channels)
RWML exports more than 90% of its product. They are using
two types of distribution channels in export. Direct channel.
RWML====Customer
Indirect Channel.
RWML==Middleman=====Customer
Mostly RWML exports its products through ship. They are also
using other modes of transportation as well:
Trucking
Shipping
Air line
Internship Report 43
-
7/30/2019 Relience Weaving Mills Ltd01
44/107
-
7/30/2019 Relience Weaving Mills Ltd01
45/107
Reliance Weaving Mills Ltd.
PROCEDURE
Inquiry
Customer inquiries are received via telex, Fax and letters and E-mail.
These are directly sent to C.E for review. After C.Es review these are
sent to export dept. in charge. After careful analysis, these inquires
are replied after C.E.s approval.
Costing
Costing sheet prepares for C.E.s approval. In absence of C.E. dept. in-
charge approves price.
Costing approval
C.E. gives approval or may suggest any other price to be offered.
Contract review and issue
Section in charge takes following steps before issuing a contract;
prepare contract review check sheet.
1. The requirements are adequately defined and involvements of
production areas are specified.
2. In house/ out house have the capacity to meet the order
requirements?
Prince quotation
In getting approval of costing and review of customers requirements,
prices are quoted to customers for confirmation.
Internship Report 45
-
7/30/2019 Relience Weaving Mills Ltd01
46/107
Reliance Weaving Mills Ltd.
Confirmation of sale contract
If customer confirms the price offered, sale contract is issued to the
customer with complete details of price, quality, delivery, payments,
terms etc.
Letter of credit (L/C)
Customers establish/ open L/C well before shipment time. In case of
delivery in receipt of L/C, concerned section in charge reminds
customer. After receipt of L/C, these are checked with regard to
ordered goods, prices, shipment details, marketing, shipment
negotiation etc. discrepancies in L/C are noted and informed to
customer for rectification.
Dispatch of goods/cloth
Packed cloth is dispatched to the customers. If the shipment is to be
custom cleared from Multan dry port, goods are sent to Karachi on
trucks with all necessary records. Dispatched goods are detail noted in
relevant registers.
Shipment
RWML is having all well-known shipping companies namely;
Samin Enterprises
Pre-shipment documents are sent to Samin enterprises next day by
dept. these goods are custom cleared at Multan dry port. Documents
are sent to clearing agent same day or next6 day and followed up to
Internship Report 46
-
7/30/2019 Relience Weaving Mills Ltd01
47/107
Reliance Weaving Mills Ltd.
ensure that these goods are custom cleared without any unnecessary
delay. In case of dry port, original bill of loading and 4 th copy of
shipping bills are collected from office agent for obtaining the rebate
timely. If the consignment is cleared from Multan dry port than there
is no need of follow up the consignment.
Following are the companies, which are used for sea shipment.
1) APL CO. USA
2) UNITED MARINE AGENCIES
3) UNIQUE MARITIME AGENCIES
4) RIAZEDS PVT. LTD.
5) CHUGTAI BAOS. KARACHI
RATE OF SEA FREIGHT
HONGKONG 350$
JAPAN 450$
MANILA 375$
USA 950$
CHINA 350$
MIS Reports
Balance order instructions are updated periodically. Balance order list
up dated fortnightly for their information. Sale comparison reports are
updated in computer network on monthly basis, it comprises one
months status of shipment, party wise and country wise invoice
values, complaints and claims.
Internship Report 47
-
7/30/2019 Relience Weaving Mills Ltd01
48/107
Reliance Weaving Mills Ltd.
Customer Complaints
After receiving goods, if customer find and defect / fault in the quality
of cloth, he complains the same. Complaints are entered in complaint
received register after taking complaint it is raised on corrective action
and issued to responsible person/ dept. after getting reply, it is
informed to the customer. Case is taken to remove the defects and to
further restrain the faults. Complaints are processed quality and
efficiently. After that claim is valued in US $ and Pak Rs. Than credit
the customer account by couching the accounting entry and
subsequent paid to customer in shape of FDD or FTT subject to
realization the amount of concerned consignment.
Internship Report 48
-
7/30/2019 Relience Weaving Mills Ltd01
49/107
-
7/30/2019 Relience Weaving Mills Ltd01
50/107
Reliance Weaving Mills Ltd.
company. All the keys relating to the mills office, labor colony,
(quarters) are lying into the responsibility of the security officer
No out side visitor can enter in the mills premises without the
permission of the Admin Manager.
a) Whenever any visitor wants to enter into the mill, security
guard firstly contact with the authority in the mill top grant
the permission to enter into the mills premises.
b) They are the guardians of the every thing of the co.
c) They are in uniform of dark army color.
d) They sere and check the outward going pass of certain
things when these going to out of the mills premises.
GATE OFFICE
This office has been made to keep the record of each and every thing
coming in and going out of the Mills gate.
For this purpose gate office clerk maintains two type of registers
called;
1) Outward going pass register
2) Inward coming pass register
When every thing including raw material, stores supplies, or any other
things comes into the mills premises a document named as I.G.P is
made in which information like date of supplier, description, quantity
of the material and any other remarks are written. In the same way
O.G.P is prepared for out going things etc. and they made a summary
on daily basis and fax to head office.
Internship Report 50
-
7/30/2019 Relience Weaving Mills Ltd01
51/107
-
7/30/2019 Relience Weaving Mills Ltd01
52/107
Reliance Weaving Mills Ltd.
PREPARATION OF ACCOUNTS
Following accounts are prepared in the Accounts Department of
RELIANCE WEAVING MILLS LTD.
1. Store Creditor/Purchases
2. Export Debtor/Realization
3. Store Consumption
4. Fuel and Power
5. Salary and Wages
6. Site Expansions
7. Inter Unit
8. Administration Expenses
9. Selling Expenses
10. M/up on T.F.C.
11. Social security/E.O.B.I
12. Banks
HBL
FBL
FBL (LOAN)
ABL
SPCB
PETTY CASH FUND
Cash is given to Mr. Afzaal Hussain the site cashier for meeting the
different site expenses and these are;
Yarn freight
Store freight
Internship Report 52
-
7/30/2019 Relience Weaving Mills Ltd01
53/107
Reliance Weaving Mills Ltd.
Building capitalized/repair and maintenance
Labor welfare charges
The balance is maintained up to Rs. 100000 minimum every time.
PURCHASE PROCESS
First of all purchase requisition is issued to the different suppliers.
Then the quotations are received from the different supplier and
evaluated by the purchase manager Mr. Subhan sb. (C.A) then a
purchase order is made. Three copies are maintained for the purchase
order;
One to the supplier
One to the accounts department
One is remained with the purchase department
Purchase includes;
Raw material (Local)
Starch (Local)
Beveloid (Local)
Softner-52 (Local)
Chemical PVA imported (Duepont USA)
Yarn (Australia)
Internship Report 53
-
7/30/2019 Relience Weaving Mills Ltd01
54/107
Reliance Weaving Mills Ltd.
MAJOR MARKET OF RWML
Major market of RWML is differentiated on the basis of sale;
Export sale (85%)
Export sale is made to;
Europe
Hong Kong
Local sale (15%)
Local sale is made to;
Nishat
Chenab
Bismillah
Nishat (Chunian)
INTERNAL AUDIT
Inter audit is done by Mr. Sabir Bhatti Sb. is the Internal Audit
Manager with his four Assistants; on daily basis of all the vouchers.
STORE INVENTORY SYSTEM
A daily purchase report of Store and Spares is received at the Head
Office from the site and then it is booked in a bill payable
voucher/Store Purchase Voucher by the accounts officer Mr.
Muhammad Sulaiman Sb.
Internship Report 54
-
7/30/2019 Relience Weaving Mills Ltd01
55/107
Reliance Weaving Mills Ltd.
Site stock inspection is also done at the end of each month by 3 or 4
accountants.
Internship Report 55
-
7/30/2019 Relience Weaving Mills Ltd01
56/107
-
7/30/2019 Relience Weaving Mills Ltd01
57/107
Reliance Weaving Mills Ltd.
L/C TREATMENT IN RWML
The company has to import following items for the continuation of its
operation.
1. Machinery
2. Spare parts and Chemicals
The company has to request to open L/C for these imports. All the
work related to the L/C is prescribed in the purchase order and send it
to bank duly signed by import department.
For opening of L/C amount of margin 10% of the total invoice cost and
L/C opening charges are deducted by L/C opening bank. This amount
is debited to the L/C account created for that particular L/C # , by
debiting the margin and charges recovered by the bank.
An entry is made.
L/C # XYZ Dr.
Margin Dr.
Bank Cr.
When the imported items come into the counter, bank inform to get
release the documents. By depositing the amount of the L/C is of sight
nature. If the L/C is of deferred (30, 60, 90, 120 days) nature then
the rate of the currency or the mark up required to deposit by the
company in addition to L/C value is decided between the bank and the
company provide some guarantee to the bank or the bank decides on
the credit worthiness of the company.
Amount deposited to the bank is then debited to the L/C account by
debiting the bank is then debited to the L/C account by debiting the
bank or payable. An entry is made:
Internship Report 57
-
7/30/2019 Relience Weaving Mills Ltd01
58/107
Reliance Weaving Mills Ltd.
L/C # XYZ Dr.
Bank/Import bill payable Cr.
After releasing the documents these are sent to the agent sitting in
Karachi who then release the shipment from the port by paying all the
expenses to cargo, carriers, customs, sales tax, income tax
authorities.
The company sends time to time the amounts to the agent for the
particular L/C #. If there is no payment is made to the bank then bank
create the PAD is favor of the company and recovered form the RWML
otherwise make the loan duly a mutual consideration.
L/C # XYZ Dr.
Import bill payable Cr.
Clearing agent after releasing the consignment dispatched it to the
company and along with all documents (bill of entry and receipts ofthe expenses stated above). The company after checking all the
documents sends the remaining amount if any to the agent. By
making the same treatment in the companys account.
When all the amounts are paid to the agent for that certain L/C then
the entry is made to close the account of the agent for that particular
L/C. the entry is:
L/C # XYZ Dr.
Agent Cr.
Internship Report 58
-
7/30/2019 Relience Weaving Mills Ltd01
59/107
-
7/30/2019 Relience Weaving Mills Ltd01
60/107
Reliance Weaving Mills Ltd.
Internship Report 60
-
7/30/2019 Relience Weaving Mills Ltd01
61/107
-
7/30/2019 Relience Weaving Mills Ltd01
62/107
-
7/30/2019 Relience Weaving Mills Ltd01
63/107
Reliance Weaving Mills Ltd.
Internship Report 63
-
7/30/2019 Relience Weaving Mills Ltd01
64/107
Reliance Weaving Mills Ltd.
MY LEARNING ARE AS FOLLOWS
1. How we have to respond and quote prices upon difference
inquires from the customer.
2. How the working is being done.
3. Issuance of selling contract to customers
4. After looking on contract, how we have to proceed further in
order to fulfillment of desired requirement.
5. How correspondence has to against different orders and
different customers.
6. The important matter is to understand the perception from
customer and his expectation because it differs from customer
to customer and to order.
7. Push up the processing team to help in making timely shipment.
8. Preparation of different sorts of reports
9. How to respond to the assignments given by the CEO.
10. Purchase of yarn and its recording in the books of
accounts
11. Payment of petty cash expenses and their recording.
Internship Report 64
-
7/30/2019 Relience Weaving Mills Ltd01
65/107
Reliance Weaving Mills Ltd.
Internship Report 65
-
7/30/2019 Relience Weaving Mills Ltd01
66/107
Reliance Weaving Mills Ltd.
Purpose of Financial Analysis
The purpose of financial statement analysis is to make a quick
assessment about a firms financial situation .It is also used to identify
the major strengths and weaknesses of a business enterprise.
Tools of Financial Statement Analysis
(1) Financial Ratio Analysis
(2) Common Size Income Statements
Financial Ratios
Financial ratios are a ratio of 2 numbers, at least one of which
comes from the firms financial statements. A financial ratio has
very little meaning unless it is compared to some other ratio. Two
types of comparisons are cross-sectional analysis and time-series
analysis.
Cross-Sectional
Analysis
Compare ratio for firm A at time t to industry
averageTime-Series Analysis
Compare ratio for firm A at time t to
ratio for firm A at time t-1, etc.
Internship Report 66
-
7/30/2019 Relience Weaving Mills Ltd01
67/107
Reliance Weaving Mills Ltd.
Financial ratio analysis is a fascinating topic because it can tell us so
much about accounts and businesses. When we use ratio analysis we
can work out how profitable a business is, we can tell if it has enough
money to pay its bills and we can even tell whether its shareholders
should be happy!
Ratio analysis can also help us to check whether a business is doing
better this year than it was last year; and it can tell us if a business is
doing better or worse than other businesses doing and selling the
same things.
What do we want ratio analysis to tell us?
We have to start working on ratio analysis with the following question
in our heads:
What are we trying to find out?
We can use ratio analysis to try to tell us whether the business
is profitable
has enough money to pay its bills
could be paying its employees higher wages
is paying its share of tax
is using its assets efficiently
has a gearing problem
is a candidate for being bought by another company or investor
And more, once we have decided what we want to know then we can
decide which ratios we need to use to answer the question or solve the
problem facing us.
Internship Report 67
-
7/30/2019 Relience Weaving Mills Ltd01
68/107
Reliance Weaving Mills Ltd.
Users of Analysis Information
Now we know the kinds of questions we need to ask and we know the
ratios available to us, we need to know who might ask all of these
questions! This is an important issue because the person asking the
question will normally need to know something particular.
Of course, anyone can read and ask questions about the accounts of a
business; but in the same way that we can put the ratios into groups,
we should put readers and users of accounts into convenient groups.
The list of categories of readers and users of accounts includes the
following people and groups of people:
Investors
Lenders
Managers of the organization
Employees
Suppliers and other trade creditors
Customers
Governments and their agencies
Public
Financial analysts
Environmental groups
Researchers: both academic and professional
The users of accounts that we have listed will want to know the sorts
of things we can see in the table below: this is not necessarily
everything they will ever need to know, but it is a starting point for us
to think about the different needs and questions of different users.
Internship Report 68
-
7/30/2019 Relience Weaving Mills Ltd01
69/107
Reliance Weaving Mills Ltd.
Investors To help them determine whether they should buy
shares in the business, hold on to the shares they
already own or sell the shares they already own.
They also want to assess the ability of thebusiness to pay dividends.
Lenders To determine whether their loans and interest will
be paid when due.
Managers Might need segmental and total information to see
how they fit into the overall picture.
Employees Information about the stability and profitability of
their employers to assess the ability of the
business to provide remuneration, retirement
benefits and employment opportunities.
Suppliers and
other trade
creditors
Businesses supplying goods and materials to other
businesses will read their accounts to see that
they don't have problems: after all, any supplier
wants to know if his customers are going to pay
their bills!
Customers The continuance of a business, especially when
they have a long term involvement with, or are
dependent on, the business.
Governments and
their agencies
The allocation of resources and, therefore, the
activities of business. To regulate the activities of
business, determine taxation policies and as the
basis for national income and similar statistics
Local community Financial statements may assist the public by
providing information about the trends and recent
developments in the prosperity of the business
Internship Report 69
-
7/30/2019 Relience Weaving Mills Ltd01
70/107
Reliance Weaving Mills Ltd.
and the range of its activities as they affect their
area.
Financial analysts They need to know, for example, the accounting
concepts employed for inventories, depreciation,
bad debts and so on.
Environmental
groups
Many organizations now publish reports
specifically aimed at informing us about how they
are working to keep their environment clean.
Researchers Researchers' demands cover a very wide range of
lines of enquiry ranging from detailed statistical
analysis of the income statement and balance
sheet data extending over many years to the
qualitative analysis of the wording of the
statements.
Which ratios will each of these groups be interested in?
Internship Report 70
-
7/30/2019 Relience Weaving Mills Ltd01
71/107
Reliance Weaving Mills Ltd.
Interest Group Ratios to watch
Investors
Return on Capital Employed
Lenders
Gearing ratios / Leverage Ratio
Managers Profitability ratios
Employees
Return on Capital Employed
Suppliers and other trade
creditors
Liquidity
Customers Profitability
Governments and their
agencies
Profitability
Local Community This could be a long and interesting list
Financial analysts Possibly all ratios
Environmental groups Expenditure on anti-pollution measures
Researchers Depends on the nature of their study
Internship Report 71
-
7/30/2019 Relience Weaving Mills Ltd01
72/107
-
7/30/2019 Relience Weaving Mills Ltd01
73/107
Reliance Weaving Mills Ltd.
Non-current
assets
Property,
Plant and
equipment
Intangible
assets
Long-term
investmentLong-term
deposits
Current
assets
Stores, spares
and loose
toolsStock-in-trade
Trade debts
Loan and
Advances
Trade deposits
and payments
Short termInvestment
Mark-up
accrued
Other
1,906,640,987
1,033,593
69,999,586
2,421,340
103,050,338
772,397,644157,754,493
187,188,985
1,122,041
125,667,584
7,088,261
8,289,791
45,560,675
41,794,462
1,963,229,490
-----------
69,999,586
2,421,340
92,855,401
746,643,801229,707,309
142,601,992
5,804,422
523,546
7,088,261
1,612,193
49,793,062
32,572,103
(56,588,503)
1,033,593
-----------
------------
10,194,93725,753,843
(71,952,816)
44,586,993
(4,682,381)
125,615,238
------------
6,677,598
(4,232,387)
9,222,359
-2.88
100
-----
-----
10.98
3.45-31.32
31.26
-80.67
23993
-------
414.1
-8.50
28.31
Internship Report 73
-
7/30/2019 Relience Weaving Mills Ltd01
74/107
-
7/30/2019 Relience Weaving Mills Ltd01
75/107
-
7/30/2019 Relience Weaving Mills Ltd01
76/107
Reliance Weaving Mills Ltd.
and Equity
Profit and Loss AccountCommon size Horizontal analysis
2010 2009
(Rupees) in %
Internship Report 76
-
7/30/2019 Relience Weaving Mills Ltd01
77/107
Reliance Weaving Mills Ltd.
Sales
Cost of sales
Gross profit
Other operating income
Administrative expenses
Distribution and selling
costs
Other operating expenses
Finance costs
Profit / (loss) beforetaxation
Provision for taxation
Profit for the year
Earnings per share
3,400,998,361
(3,054,593,695)
346,404,666
39,344,127
(50,282,001)
(49,671,260)
(6,048,989)
(232,381,335)
47,365,208
(15,447,181)
31,918,027
1.04
3,122,414,478
(2,699,848,853)
422,565,625
17,840,572
(48,421,073)
(39,031,369)
(9,584,861)
(199,406,645)
143,962,249
(20,433,058)
123,529,191
4.01
278,583,88
3
354,744,84
2
(76,160,959
)
21,503,555
1,860,928
10,639,891
(3,535,872)
32,974,690
(96,597,041
)
(4,985,877)
(91,611,164
)
8.92
13.21
-18
120
3.84
27.25
36.89
16.54
-67.10
-24.40
-74.16
BALANCE SHEET
COMMON SIZE HORIZONTAL ANALYSIS
Internship Report 77
-
7/30/2019 Relience Weaving Mills Ltd01
78/107
-
7/30/2019 Relience Weaving Mills Ltd01
79/107
Reliance Weaving Mills Ltd.
Tax refunds
due from
government
Other
receivables
Short term
Investment
Cash and
bank
balances
Total
Current
assets
1,379,688,590 1,354,249,406 25,439,184 1.88
TOTAL
ASSETS
EQUITY AND
3,345,339,420
3,392,763,283
2009 2008
(47,423,863) -
1.398
Internship Report 79
-
7/30/2019 Relience Weaving Mills Ltd01
80/107
Reliance Weaving Mills Ltd.
LIABILITIES:
Sharecapital
and
reserves
Authorized
Capital
30,000,000
ordinary
shares of Rs
10 each
Issued, subs
and paid-up
capital
Reserves
Unappropriate
profit
Non-
current
liabilitiesLong term
Finance &
other Capital
Deferred
30,000,000
246,487,500
395,081,250
195,501,910
837,070,660
1,025,666,218
16,238,327
1,041,904,545
123,658,813
1,174,824,009
124,621,517
43,259,8761,466,364,215
3,345,339,420
30,000,000
246,487,500
395,081,250
96,621,469
738,190,219
1,158,062,811
18,400,700
1,176,463,511
139,361,140
1,193,844,369
109,756,482
35,147,562
1,478,109,553
3,392,763,283
------------
------------
98,880,44198,880,441
(132,396,593)
(2,162,373)
(134,558,966)
(15,702,327)
(19,020,360)
14,865,035
8,112,314
(31,745,338)
(47,423,863)
In %
------
------102.34
126.46
-11.43-11.75
-11.44
-11.27
-1.59
13.54
23.08
-2.15
Internship Report 80
-
7/30/2019 Relience Weaving Mills Ltd01
81/107
-
7/30/2019 Relience Weaving Mills Ltd01
82/107
Reliance Weaving Mills Ltd.
(Rupees in)
Sales
Cost of sales
Gross profit
Other operating income
Administrative expenses
Distribution and selling
costs
Other operating expenses
Finance costs
Profit / (loss) before
taxation
Provision for taxation
Profit for the year
Earnings per share
3,122,414,4
78
(2,699,848,8
53)
422,565,625
17,840,572
(48,421,073)
(39,031,369)(9,584,861)
(199,406,645
)
143,962,249
(20,433,058)
123,529,1
91
5.01
2,061,671,9
82
(1,803,756,7
82)
257,915,200
20,305,651,
(27,691,287)
(38,357,316)(7,248,742)
(93,157,973)
111,765,533
(15,789,023)
95,976,51
0
3.89
1,060,742,
496
896,092,0
71
164,650,42
5
(2,465,079
)
20,729,786
674,053
2,336,119
106,248,67
2
32,196,716
4,644,035
27,552,681
51.45
49.68
63.84
-12.14
74.86
1.76
32.22
114.05
28.81
29.41
28.71
Internship Report 82
-
7/30/2019 Relience Weaving Mills Ltd01
83/107
Reliance Weaving Mills Ltd.
Vertical Analysis
Internship Report 83
-
7/30/2019 Relience Weaving Mills Ltd01
84/107
-
7/30/2019 Relience Weaving Mills Ltd01
85/107
Reliance Weaving Mills Ltd.
Non-current assets
Property, Plant and equipment
Intangible assets
Long-term investment
Long-term deposits
Current assets
Stores, spares and loose tools
Stock-in-trade
Trade debts
Loan and AdvancesTrade deposits and short-term payments
Mark-up accrued
Other receivables
Short term Investment
Tax refund due from government
Cash and bank balances
55.59 %
0.03 %
2.04 %0.07 %
3.00 %
22.52 %
4.6 %
5.46 %0.032 %
0.21 %
0.241 %
3.66 %
1.33 %
1.22 %
58.69 %
--------
2.04 %0.07 %
2.78 %
22.32 %
6.87 %
4.26 %0.17 %
0.21 %
0.048 %
0.016 %
1.49 %
0.97 %
Total Current assets 42.27 % 39.14%
TOTAL ASSETS
EQUITY AND LIABILITIES:
100.00%
2009
100.00%
2008
Share capital and reserves
Authorized Capital 30,000,000
ordinary shares of Rs 10 each
Issued, subscribed and paid-up capital 8.98 % 7.37 %
Internship Report 85
-
7/30/2019 Relience Weaving Mills Ltd01
86/107
-
7/30/2019 Relience Weaving Mills Ltd01
87/107
Reliance Weaving Mills Ltd.
Sales
Cost of sales
Gross profit
Other operating income
Administrative expenses
Distribution and selling costs
Other operating expenses
Finance costs
Profit / (loss) before taxation
Provision for Taxation
Profit for the year
100 %
(89.81 %)
10.19%
11.57 %
(1.48 %)
(1.46 %)
(0.178 %)
(6.83 %)
1.39 %
(0.45 %)
0.94 %
100 %
(86.47 %)
13.53%
10.57 %
(1.55 %)
(1.25 %)
(0.31 %)
(6.39 %)
4.61 %
(0.65 %)
3.96 %
BALANCE SHEETCOMMON SIZE VERTICAL ANALYSIS
ASSETS: 2009 2008
Internship Report 87
-
7/30/2019 Relience Weaving Mills Ltd01
88/107
Reliance Weaving Mills Ltd.
Non-current assets
Property, Plant and equipment
Long-term deposits
Current assets
Stores, spares and loose tools
Stock-in-trade
Trade debts
Loan and AdvancesTrade deposits and short-term payments
Tax refund due from government
Other receivables
Short term Investment
Cash and bank balances
58.69 %
0.72 %58.76%
2.78 %
22.32 %
6.87 %
4.49 %
0.17 %
1.49 %
0.048 %
2.108 %
0.97 %
60.01%
0.07 %60.84%
2.37 %
20.83 %
6.03 %
8.45 %0.11 %
1.78 %
0.09 %
--------
0.25 %
Total Current assets 41.24 % 39.92%
TOTAL ASSETS
EQUITY AND LIABILITIES:
100.00%
2009
100.00%
2008
Share capital and reserves
Authorized Capital 30,000,000
Ordinary shares of Rs 10 each
Issued, subscribed and paid-up capital 7.37 % 7.27 %
Internship Report 88
-
7/30/2019 Relience Weaving Mills Ltd01
89/107
Reliance Weaving Mills Ltd.
Reserves
Unappropriate profit
Non-current liabilities
Long term Finance and other payables
Deferred liabilities
Current liabilities
Current portion of long term liabilities
Finance under markup arrangements s
Trade and other payable
Interest and mark-up accrued
Total Liabilities and Equity
11.81 %
5.84 %
25.02 %
30.66 %
0.49 %
3.696 %
35.11 %
3.73 %
1.29 %
43.83 %
100 %
11.64 %
2.85 %
21.76 %
34.13 %
0.54 %
4.11 %
35.19 %
3.24 %
1.036 %
43.57 %
100 %
Profit and Loss Account
Common size vertical analysis
2009 2008
Sales
Cost of sales
Gross profit
100 %
(86.47 %)
13.53%
100 %
(87.49 %)
12.51%
Internship Report 89
-
7/30/2019 Relience Weaving Mills Ltd01
90/107
Reliance Weaving Mills Ltd.
Other operating income
Administrative expenses
Distribution and selling costs
Other operating expenses
Finance costs
Profit / (loss) before taxation
Provision for Taxation
Profit for the year
10.57 %
(1.55 %)
(1.25 %)
(0.31 %)
(6.39 %)
4.61 %
(0.65 %)
3.96 %
10.98 %
(1.34 %)
(1.86 %)
(0.35 %)
(4.52 %)
5.42 %
(0.77 %)
4.66 %
INTERPRETATION
Horizontal Analysis
Horizontal analysis of 2007 and 2006 at RWML shows that sales
increased by 8.92 but CGS increased by 13.21% that show rising
prices of raw material. Due to this factor Gross Profit increased by
Internship Report 90
-
7/30/2019 Relience Weaving Mills Ltd01
91/107
Reliance Weaving Mills Ltd.
18%, but firm was able to reduce its operating expenses, financial
charges, taxes and to increase other income by considerable amount.
This helped to fill gap created by CGS and as result NPAT increased by
74.25%. While looking to balance sheet, fixed assets decreased by
2.88% but long term investments increased by 30%. Investment in
stock in trade decreased by 19.18%. Firm account receivable
increased that means firm was not good to collect receivable. Cash
balance increased by 28.39%. Non-current liabilities decreased by
13% that shows efficiency. But in the short-term liabilities increased to
49%.
Horizontal analysis of 2006 and 2005 at RWML shows that sales
increased by 51.45% but CGS increased by 49.68% that show rising
prices of raw material. Due to this factor Gross Profit increased by
63.84%, but firm was able to reduce its operating expenses, financial
charges, taxes and to increase other income by considerable amount.
This helped to fill gap created by CGS and as result NPAT increased by
28.71%. While looking to balance sheet, fixed assets decreased by2.4% but long term investments increased by 30%.
Vertical analysis
In Vertical analysis, CGS size has decreased from previous year that isgood sign. Size of gross profit in proportion to sales has increased and
that is the case with operating profit as well. But taxes and other
charges size has decreased in proportion to sales. But important thing
to note is that NPAT has increased by 0.94%, 3.96% and 4.66% in
Internship Report 91
-
7/30/2019 Relience Weaving Mills Ltd01
92/107
Reliance Weaving Mills Ltd.
2007, 2006 and 2005 respectively proportion to sales. Investment in
fixed assets look to increased slightly but this factor is due to
appreciation mainly and investment in fixed assets has increased but
element of depreciation has reduced its value. Long-term investments
and long term loans and advances are decreasing slightly in
comparison with previous year. Firm has more inventory than previous
year. This is because of increase in sales. Trade debts have lesser
weight in total assets than in 2007 a compare to 2006 and 2005. Now
interesting thing to note is that value of total current assets in total
assets has increased by 2% and 4% in proportion to total assets. SHE
has increased from 51% in 2007 to 43.82% in 2006 and 43.57% in
2005 that mean owners contribution is equal to that of creditor. Long-
term liabilities are decreasing from 34.138% in 2005 to 30.66% in
2006 and 29.56% in 2005.
Internship Report 92
-
7/30/2019 Relience Weaving Mills Ltd01
93/107
-
7/30/2019 Relience Weaving Mills Ltd01
94/107
Reliance Weaving Mills Ltd.
Marketability Analysis
LIQUIDITY ANALYSIS
FORMULAS
i. Current Ratio = Current Asset
Current Liabilities
ii. Acid test ratio or quick ratio = Current Asset- Inventory
Current Liabilities
ACTIVITY ANALYSIS
FORMULAS
i. Inventory turn Over = Cost of goods soldInventory
ii. Average Age of Inventory = No. of working days
Inventory turn over
Internship Report 94
-
7/30/2019 Relience Weaving Mills Ltd01
95/107
Reliance Weaving Mills Ltd.
iii. Average collection period = Account Receivable
Average Sale per day
iv. Account receivable turn over = No. of working days
Average Collection period
v. Account Payable turn over = No, of working days
Average Payment Period
vi. Fixed asset turn over = Net sale
Net fixed Asset
PROFITABILITY RATIOS
FORMULAS
i) Gross Profit Ratio on Sale = G.P x 100
Net Sale
ii) Gross profit ratio on cost = G.P x 100
C.G.S
Internship Report 95
-
7/30/2019 Relience Weaving Mills Ltd01
96/107
-
7/30/2019 Relience Weaving Mills Ltd01
97/107
Reliance Weaving Mills Ltd.
EPS
Internship Report 97
-
7/30/2019 Relience Weaving Mills Ltd01
98/107
Reliance Weaving Mills Ltd.
CALCULATION OF RATIOS
LIQUIDITY ANALYSIS
It shows the firm ability to pay its short-term obligation on time.
CURRENT RATIO
2008 2009 2010
1: 0.74times 1: 0.84times 1: 0.98times
The ratios show that the companys current liabilities and current
assets are almost equal. So the co. is in a position to meet its current
liabilities on time.
QUICK OR ACID TEST RATIO
2008 2009 2008
1: 0.75times 1: 0.59times 1: 0.48times
The companys quick ratio has increased. So the company is liquid
position is very strong.
Internship Report 98
-
7/30/2019 Relience Weaving Mills Ltd01
99/107
-
7/30/2019 Relience Weaving Mills Ltd01
100/107
Reliance Weaving Mills Ltd.
2008 2009 2010
10.3 times 11.50times 12.20times
This ratio shows that the co. is making payment to the creditors within
reasonable time period.
FIXED ASSETS TURNOVER RATIO
2008 2009 2010
0.93times 1.24 times 2.02 times
PROFITABILITY ANALYSIS
Internship Report 100
-
7/30/2019 Relience Weaving Mills Ltd01
101/107
-
7/30/2019 Relience Weaving Mills Ltd01
102/107
Reliance Weaving Mills Ltd.
There is little increase in profit of the co. It is because of hiring of new
employees which increases the salaries of the co.
RETURN ON ASSETS
2008 2009 2010
2.69% 3.48% 7.49%
Return on assets ratio has increased because of increase in
profits.
MARKETABILITY ANALYSIS
EARNING PER SHARE
2008 2009 2010
Internship Report 102
-
7/30/2019 Relience Weaving Mills Ltd01
103/107
Reliance Weaving Mills Ltd.
Rs.2.48 Rs.2.67 Rs.2.82
The shareholders are earning Rs.2.82 against one share in 2010,
which is more than in 2009 & 2008.
DIVIDEND DECLARATION
2008 2009 2010
6.7% 7.50% 7.50%
LEVERAGE ANALYSIS
Leverage analysis is used to measure the degree of indebt ness
(up to what extent the firm is in debtness).
DEBT RATIO
Internship Report 103
-
7/30/2019 Relience Weaving Mills Ltd01
104/107
Reliance Weaving Mills Ltd.
2008 2009 2010
57% 68.78% 76%
DEBT-EQUITY RATIO
2008 2009 2010
186% 322% 220%
RWML is heavily depending on the outsiders financing.
COVERAGE RATIO ANALYSIS
Coverage ratio is used to see the ability of a firm to pay its fixed
financial cost.i-e.
Interest payment
Lease payment t
Internship Report 104
-
7/30/2019 Relience Weaving Mills Ltd01
105/107
Reliance Weaving Mills Ltd.
Dividend to preferred stockholders
TIME INTEREST EARNED RATIO2008 2009 2010
1.27times 1.36times 1.56times
RWML is paying interest 1.56times in a year, which is greater
than previous years.
DECISIONS ON THE BASIS OF RATIO
ANALYSIS
SHORT-TERM CREDITOR
Internship Report 105
-
7/30/2019 Relience Weaving Mills Ltd01
106/107
Reliance Weaving Mills Ltd.
On the basis of analysis it is wise to invest as a short-term
supplier of funds in RWML because firms current ratio and quick
ratio are in positive. Moreover the firms working capital is
positive in both the years.
LONG-TERM INVESTOR
As the firms debt ratio is good in both the years I-e 76%,
72.54% and 68.78% in 2008, 2009 and 2010 respectively.. So,
on the basis of this it is wise to invest in RWML as long-term
supplier of funds.
LONG-TERM EQUITY INVESTOR
As the co. operating and net profit ratios are increasing in both
the years and earning per share ratio is also increasing. Moreover the
co. is declaring dividend every share and has a strong image in the
market, having a good market price of its stock. So RWML is quiet
suitable for the investor to invest in it.
Internship Report 106
-
7/30/2019 Relience Weaving Mills Ltd01
107/107
Reliance Weaving Mills Ltd.
COMMENTS AND SUGGESTIONS
After a short careful analysis, I come to know that the
financial position of the co. is much better than the other
weaving units in textile industry.
There is tough competition in textile exports. Buyers are
demanding quality and economy in their purchase
contracts. They are becoming quality conscious. RWML has
vast markets of Japan, USA, Taiwan, H.K therefore co. is
going to the installation of 200 looms with complete back
up process as well.
RWML is saving a huge cost in the field of marketing
because its Chief Executive is extra vigilant. In this respect
co. is saving more of less.
RWML has no marketing department to promote and
introduce its products in international market. There is a
crucial need for having disciplined and coordinated