ALLAWASAYA

CONTENTS

PREFACE

04ACKNOWLEDGEMENT

05TEXTILE INDUSTORY IN PAKISTAN

06HISTORY OF ALLAWASAYA

08EXECUTIVE SUMMERY

09VISION & MISSION STATEMENT

10COMPANY INFORMATION

11ASSOCIATED COMPANIES

13ORGANIZATION STRUCTURE

14COMPANY PROFILE

15CODE OF CONDUCT

18PRODUCTS

22PRODUCTS RANGE

23DEPARTMENTS

25PRODUCTION CAPACITY

25PRODUCTION PROCESS

26MIXING ROOM

27BLOW ROOM

27CARDING SECTION

29DRAWING FRAME

29SIMPLEX ROOM

29RING SECTION

30AUTO CONE SECTION

30MOISTURIZING SECTION

30PACKING and LABELLING

31MACHINERY DETAILS

32MAJOR COMPITITORES

34PROBLEM STATEMENTS

35QUALITY AND ENVIRONMENTAL POLICY

36ISO CERTIFICATION

38SIX YEARS KEY OPERATING AND FINANCIAL DATA

39BALANCE SHEET AS AT JUNE 30, 2013

40PROFIT AND LOSS ACCOUNT

41CASH FLOW STATEMENT

42STATEMENT OF CHANGES IN EQUITY

44PATTERN OF SHAREHOLDING

45RATIO AND VALUE ANALYSIS

46SWOT ANALYSIS

47CONCLUSION

51PREFACE

The internship is an essential part of M.Com degree program because through this training students come to know the real difference between theory and practice and they are also introduced to the outside business world. An important requirement of this training program is to compile a report about the activities of that organization in which the student has done the internship.

I have done internship in Allawasaya Texile Mills Ltd Multan. The internship provided me great opportunity to equip myself with knowledge, techniques, application and tools used in an organization.

The report covers various features of knowledge. It starts with the brief history of Bank, covers current status, performance, products and services. Another major portion of this report explains the management of Bank Alfalah.

Division of departments and their activities highlights the working of Bank Alfalah and my learning experience elaborates how much this internship was useful for me. Financial analysis represents the true picture of the performance of Bank. Concluding the report there are certain recommendations and suggestions for the bank in order to have improvements ACKNOWLEDGEMENT

All praises are for Allah almighty that has bestowed upon human being the crown of creation and has endowed him with knowledge and wisdom. After Allah, is the last prophet Mohammed (SAW) who brought for us revelation and unlimited knowledge and civilized the barbarian human being.

Although this report base only my name but numerous people were very important to the development of this report without the support of them I could never successfully completed the internship as well as the report.

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 Allawasaya Textile & Finishing mills ltdHISTORY

Allawasaya Textile & Finishing mills ltd. is situated at the city of saints MULTAN in the province of Punjab (Pakistan). The company was incorporated in Pakistan as a private company in 1958 with the name of M. AllaWasaya and company (Pvt) LTD, Multan and the name was later changed to Allawasaya Textile & Finishing Mills LTD. The company was incorporated in Pakistan under the company ordinance, 1984. It was converted into public limited company in 1965. The register head office and the mill is located at Vehari Road, Multan. This area is also known as Mumtazabad Industrial area. Its shares are quoted on all stock Exchanges of Pakistan. It is principally engaged in the manufacturing and sale of yarn. It was Weaving and Finishing unit but in 1978 finishing plant was closed due to obsolete machinery.

EXECUTIVE SUMMERYAllawasaya Textile & Finishing Mills Limited Multan is a well-known public limited textile spinning unit, incorporated in 31st March 1958. We wish to introduce ourselves as the manufacturers of super A grade Gumbad brand P.C yarn. Allawasaya Textile & Finishing Mills Limited has been at the forefront in high quality yarn manufacturing for more than 55 years. Our accounting practices and finance policies are guided by prevailing corporate regulations, companies ordinance.

ISO 9001:2008

ISO 14001:2004

VISION STATEMENT

The vision of Allawasaya Textile and Finishing Mills Limited is to contribute positively to the Socio- Economic growth of Pakistan through business and industrial pursuits endeavoring to achieve excellence in all spheres of such activity with effective and efficient management.

MISSION STATEMENT

Allawasaya Textile and Finishing Mills Limited becomes a truly professional organization, achieve higher quality standards, utilize maximum capacity, capture expansion opportunities and become a least cost operator amongst its competitors. We will strive to continue as a successful Company, make profit and thus create value for our shareholders, customers, suppliers and employees.

Company Information

Chairman

Mian Muhammad Jamil

Mobile Number

+92-300-8633624

Regd. Office Address

Allawasaya Square, Mumtazabad Industrial Area, Vehari Road, Multan, Pakistan

City

Multan

Phone

0092-61-4233624-26

Fax

0092-61-6525202

Email Address

[email protected]

Url (Web Address)

www.allawasaya.com

Registration Number

121-LR OF 1957- 1958

CUIN Number

0001087

National Tax Number

0101071-9

Symbol of Company

AWTX

Production Capacity

51,000 Lbs / Day , 510 Bags / Day

Machinery Installed

30,592 Spindles

Products

Blended Polyester Cotton Yarn (52:48) & CVC Count Range Ne 10 To 40

Hs Code

5506.1200, 5509.5900

Brand

"Gumbad"

No of Employees

900

Certification

ISO 9001-2008, ISO 14001-2004

Membership

Ministry of Textile Industry All Pakistan Textile Mills AssociationMultan Chamber of Commerce & Industry

Self Generation Plant

4.24 MW

Associated Companies

Allawasaya Spinning Mills (Pvt.) Limited

Maqbool Textile Mills Limited www.maqboolgroup.comMehmooda Maqbool Mills Limited

Shah Shamas Cotton Industries (Pvt.) Limited

Maqbool Tanvir (Pvt.) Limited

Hilal Fabrics (Pvt.) Limited

Halil Fashion Garments (Pvt.) Limite

Sarfraz Gardens (Pvt.) Limited

Craft International (Pvt.) Limited

COMPANY PROFILE

BOARD OF DIRECTORS

1. Mian Muhammad Jamil

Chairman

2. Mian Tanvir Ahmad Sheikh

Chief Executive / M.D.

3. Mrs. Nusrat Jamil

Director

4. Mian Anis Ahmad Sheikh

Director

5. Mian Sarfraz Ahmad Sheikh

Director

6. Mian Tauqir Ahmad Sheikh

Director

7. Mian Muhammad Bilal Ahmad Sheikh

Director

8. Mian Muhammad Alamgir Jamil Khan

Director

AUDIT COMMITTEE

Mrs. Nusrat Jamil

Chairwoman

Mian Tanvir Ahmad Sheikh

Member

Mian Muhammad Alamgir Jamil Khan

Member

HUMAN RESOURCE & REMUNERATION COMMITTEE (HR&R)

Mian Muhammad Jamil

Chairman

Mian Anis Ahmad Sheikh

Member

Mrs. Nusrat Jamil

Member

CHIEF FINANCIAL OFFICER

Sohail Nadeem

COMPANY SECRETARY

Muhammad Ismail

HEAD OF INTERNAL AUDIT

Ch. Javed Akhtar

AUDITORS

M. Yousuf Adil Saleem & Company,

Chartered Accountants, Multan.

LEGAL ADVISOR

Sheikh Muhammad Farooq - Advocate

5-Nusrat Road, Multan Cantt.

BANKERS

M/s Habib Bank Limited

M/s Bank Al Habib Limited

M/s Habib Metropolitan Bank Limited

M/s United Bank Limited

REGISTERED OFFICE

Allawasaya Square,

Mumtazabad Industrial Area,

Vehari Road, Multan.

SHARES REGISTRAR

M/s Hameed Majeed Associates (Pvt.) Limited

H.M. House, 7-Bank Square, Lahore.Code Of Conduct

INTRODUCTION:

Allawasaya Textile & Finishing Mills Limited is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations of the country. The Company believes that a good corporate governance structure would not only encourage value creation but also provide accountability and control systems commensurate with the risks involved.

APPLICABILITY:

The Code applies to the members of Board of Directors and members of Senior Management. The term Senior Management shall mean personnel of the Company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive/ whole-time directors.

COMPLIANCE:

The Board of Directors / Senior Management shall ensure due compliance with all applicable laws, rules and regulations of the country and all applicable policies and procedures adopted by the Company, for every activity undertaken under their supervision and authority. Therefore, the Board of Directors / Senior Management should possess / acquire appropriate knowledge of the legal requirements relating to their roles and duties to enable them to be in compliance thereof and to recognize potential risks.

AVOIDANCE OF CONFLICT OF INTEREST:

All Directors, Senior Management and employees must avoid situations in which their personal interest could conflict with the interest of the Company. This is an area in which it is impossible to provide comprehensive guidance but the guiding principle is that conflict, if any, or potential conflict must be disclosed to the Management for guidance and action as appropriate.

PROTECTION OF ASSETS:

Protecting the Company's assets is a key responsibility of Board of Directors and every member of Senior Management. Care should be taken to ensure that assets are not misused, misappropriated, or sold or donated, without appropriate authorization.

PRIVACY & CONFIDENTIALITY:

All Directors of the Company along with the persons of Senior Management shall maintain privacy and confidentiality of information entrusted by the Company or acquired during performance of their duties and shall not use it for personal gain or advantage.

CORPORATE OPPORTUNITIES:

Except as may be approved by the Board of Directors or a Board Committee thereof, Directors / Senior Management are prohibited from:

Taking for themselves personally, opportunities that belong to either the Company or are discovered through the use of Companys property, information or position;

Using the Companys property, information, or position for personal gain;

Competing with the Company

INSIDER TRADING:

An employee of Allawasaya Textile & Finishing Mills Limited and his immediate family shall not derive any benefit or counsel, or assist others to derive any benefit, from access to and possession of information about the Company or its clients or suppliers that is not in public domain and, thus, constitutes unpublished, price-sensitive insider information. An employee of Allawasaya Textile & Finishing Mills Limited shall not use or proliferate information that is not available to the investing public, and which therefore constitutes insider information, for making or giving advice on investment decisions about the securities of the Company, client or supplier on which such insider information has been obtained.

FAIR DEALING EQUAL OPPORTUNITIES:

Any Director or a member of the Senior Management shall not take a discriminatory stance towards or give unfair advantage to the Company's employees, customers, suppliers, competitors through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, another unfair - dealing practice. No discrimination shall be done on the basis of caste, religion, sex, nationality or disability of any kind towards any employees, customers, suppliers or any business partner.

WAIVERS:

Any waiver of any provision of this Code of Conduct for a director or senior management employee must be placed for approval before the Companys Board of Directors who shall approve the same in writing if appropriate.

Product

M/S Allawasaya Textile & Finishing Mills Limited is capable of producing Yarn count range Ne 10 to 40 in both PC & CVC. These qualities of Yarn are produced by using Pakistani Cotton and Polyester in accordance with customer satisfaction. Our Spinning unit is equipped to produce regular Ring Spun Yarn. The Spinning capacity in 20s count based on 3 shifts per day is 12 Million kgs per year. Our Brand Name is GUMBAD.

Product Range

COUNTBLEND

10/1 PCPOLYESTER 52% COTTON 48%





30/1 PCCOTTON 60% POLYESTER 40%

30/1 PCHPOLYESTER 52% COTTON 48%

31/1 PCCOTTON 60% POLYESTER 40%



24/1 CVCPOLYESTER 52% COTTON 48%

30/1 CVCPOLYESTER 52% COTTON 48%

40/1 CVCCOTTON 60% POLYESTER 40%

DEPARTMENTS IN ATM

Service departments

Accounts department Electric department Labor department Security departmentTechnical departments

Spinning quality department Maintenance department Production departmentThere was an export department also by which 20% of the yarn was exported to HONG KONG & KOREA but with the shut down of weaving and finishing unit and old spindles now the export of yarn is stopped because of international quality standards. PRODUCTION CAPACITY

No. of spindles installed

28,192No. of shift worked

3Capacity of yarn at 20s count

-Kgs11,919675Production of yarn at 20s count

-Kgs10,165,183Capacity utilization

85 %PRODUCTION PROCESS

PLANT LAYOUT

The plant lay out of ATM is as under:

Mixing Room

Blow Room

Carding section

Drawing section

Simplex Room

Ring section

Auto cone winding

Packaging section

MIXING ROOM

In the mixing room different bales of the cotton from different lots are mixed for humidity control purposes. In the mixing room, from 100 lots of cotton approximately 85 bales are opened for mixing according to the capacity of the mixing room

1 lot = 100 bales

1 bale = 170 kgs.

Mixing time is approximately 24 hours, because it effect on the production quality.

BLOW ROOMIn the Blow Room cotton is blended and cleaned in the machines. The arrangement of machines in the blow room is as follows:

Bale Mixer

Bale mixer is used for blending the cotton and major wastage separation. It reduces the labor cost and giving fine cotton for better yarn quality. M. Z. Beater

It is used for beating of cotton and resulting fine cotton. Axi-Flow Beater

In Axi-Flow Beater there are two pegged rollers and two separates grid bars under each beater. Cotton is being beaten by the pegs of first roller and fland upward at the junction of second beater i.e. due to the rotational direction of second beater cotton is beaded by second beater and cleaning and fining process takes place. Step cleaner

It is also called ultra calenderer special cleaner. It consists of six beating steps acted in a sequence resulting fine quality of fibber from cotton. Procuping Beater

It is used successfully in high quality production. It is consist of steel shafts having plates mounted on it. Each plate is provided a striker which are bent a different angles to treat the cotton uniformly. The result is the better quality of fiber.

Krishnier Beater

This is used in the modern high production Blow Room.

Lap Farmer

The out put of the blow room is called a lap. This lap is cylindrical cotton roll. This machine is automatic i.e. the weight of the lap is fixed and it is approximately 26 kgs. And length of the layers of the cotton is about 15 yards.

CARDING SECTION

Lap of cotton Process Silver Cane

The lap from the Blow Room is transferred in the carding section. In this section, the carding machine made soft ropes of cotton called Silver. These silvers are stored or folded in a Cane to facilitate for further process in the next section.

DRAWING FRAME

Silver Cane Process 2 Silver Canes

In one drawing frame 16 Silver Canes are used as input and after twisting process in the frame resulting output in two canes. This process is applied to mix up and equalize the fiber.

SIMPLEX ROOM

Silver cane Process Roving Bobbin

The Silver Cans from the drawing frame section is transferred to the simplex frame section. These silvers are twisted and enlarged through the process and rounded on the big bobbins. These bobbins are than used in the ring section for the production of the yarn. The capacity of each frame is 120 bobbins.

RING SECTIONRoving Bobbins process Yarn BobbinsRing section is very important section of any spinning unit i.e. in the ring section the yarn of different counts is produced on the different colors of small bobbins. Every frame of the ring section is produced 480 small bobbins called spindles.AUTO CONE SECTIONSmall bobbins Process Yarn on ConesIn Auto Cone Section, the yarn is produced on the Machconer (uster) which is completely computerized system. In Machconer the ropes are removed and other finishing of yarn takes place through the computerized method, so yarn produced on cones is called Auto cones.MOISTURIZING SECTIONAfter the cones are ready from the Auto Cone section, these are sent to the Moisturizing section where particular moisture environment is creed. The moisture is necessary for the yarn because it keep it in a good condition every time. The weight of a cone is normally 2.5 lb to 4.17 lb.

PACKING AND LABELLINGThe cones from the Moisturizing section are transferred to the packing and labeling room where the workers pack the cones in polythene bags and then put it in the polyperline bags in a systematic way.

After this packing the bags are sent to store room or godowns from where they are sent to there respective destination.

Machinery Detail

Allawasaya Textile and Finishing Mills Limited is one of the fine Quality Ployester Cotton Yard Producing Mills in Multan.We produce Usterized Electronically Cleaned Ployester Cotton Yarn.Our product quality is good for shuttless Looms.The Total number of spindles are 30,592

Brand NameGumbadPRODUCT RANGE

POLYESTER COTTON YARN COUNT 10's to 40's

The Detail of Machinery set-up is given below:BLOW ROOM

TRUTZSCHLER GERMANY & CHINA

CARD

CROSSROLL ENGLAND

CARD

TOYODA JAPAN

DRAWING AND SIMPLEX

TOYODA JAPAN

31 FRAMES RING

TOYODA JAPAN

8 FRAMES RING

FA 502 CHINA

7 FRAMES RING

EJM 168 CHINA

21 FRAMES RING

F1520 CHINA

DRAFTING SYSTEM

SKF-PK-255-2055

14 AUTOCORNERS

MURATA MACHCONER - 7 II JAPAN

MAJOR COMPETITORS HUSSAIN TEXTILE MILLS

MEHAR DASTGIR TEXTILE MILLS

AM TEXTILE

GREEN HOUSE TEXTILE

AMJAD TEXTILE

BLUE STAR TEXTILE MILL

PROBLEM STATEMENTS Moisture content

The percent moisture content of cotton bales is usually higher than the standard value of 7.834% (Moisture Regain 8.5%). This high moisture (which is due to the non-availability of modern equipment to control moisture) create problem of quality during blowing and carding stages. Maintenance of machinery

Machinery and equipment installed at ATM is too old, approximately 60 % of the installed spindles are at least 25 years old, and so they have to spend lot of money for their maintenance.

Labor problem

ATM has to face labor problems in term of labor union

Quality and Enviornmental Policy

Our aim is to achieve the leadership of Textile and Spinning Industry through quality products according to the customer satisfaction.We thrive to achieve the above through the following measures:

Acquisition of Quality Raw Material.

Manufacturing of High Quality Yarn as per Customer Satisfaction.

Continuous Training and Guidance to Employees regarding Quality and Enviornment.

Continuous Improvement, Close Watch and Control in Production Process and Environment.

Follow up of the system, regarding International Quality and Enviornmental Laws.

Control of Pollution Discharge from Industrial Process.

Quality Assurance

Allawasaya Textile & Finishing Mills Limited produces good quality "Gumbad" Brand (Yarn 10 Count to 40 Count) which conforms to the high standards and quality. Our product is backed up with more than fifty four years of yarn manufacturing experience and continuous process of BMR.

Quality Assurance

Allawasaya Textile & Finishing Mills Limited produces good quality Gumbad Brand (Yarn 10 Count to 40 Count) which conforms to the high standards and quality. Our product is backed up with more than fifty four years of yarn manufacturing experience and continuous process of BMR.

Quality and Enviornmental Policy

Our aim is to achieve the leadership of Textile and Spinning Industry through quality products according to the customer satisfaction.We thrive to achieve the above through the following measures:

Acquisition of Quality Raw Material.

Manufacturing of High Quality Yarn as per Customer Satisfaction.

Continuous Training and Guidance to Employees regarding Quality and Enviornment.

Continuous Improvement, Close Watch and Control in Production Process and Environment.

Follow up of the system, regarding International Quality and Enviornmental Laws.

Control of Pollution Discharge from Industrial Process.

ISO Certifications

The Company is quite successfully maintaining its ISO 9001:2008 Certification for Quality Management System (QMS) and the ISO 14001:2004 Certification for Environmental Management System (EMS).

ISO 9001:2008The buzzword of today, is not merely writing a few manuals, it is about developing and sustaining a comprehensive and cohesive Quality Management System. We have made ISO 9001 a part and parcel of our system to the extent that it has become second nature of our employees. We believe that ISO 9001 is not just a piece of paper, it is a whole set of systems which serves as stepping stone to the wide world of Quality.

ISO 14001:2004This system aims to ensure that our products have the least harmful impact on the environment during production, disposal and depletion of natural resources. The legal compliance regarding environment is strictly followed in our premises.

RATIO AND VALUE ANALYSISAvg EPSRs 25.10Average of past year end EPS's

Sector AverageRs 6.31Sector average of the above

Avg EPS FVRs 186.77Fair Value (DCF) based on average of past year-end EPS's

EPSRs 106.40Last four quarters EPS


EPS FVRs 791.67Fair Value (DCF) based on last four quarters EPS

Current PriceRs 266.50Last closing stock price

DivRs 20.25Total dividend paid during last four quarters


Div FVRs 150.67Fair value (DD) based on total dividend paid during last four quarters

Avg DivRs 5.60Average of yearly dividends paid (including currently paid ones)


Avg Div FVRs 41.67Fair value (DD) based on Average of yearly dividends paid (including current)

AvgRs 292.69Fair value (averaged of other fair values)

Upside9.83%Upside potential (in percentage) based on the above Average.

Div Yield7.60%Dividend yield


Outstand Shares800,000Number of Outstanding Shares

FCF/S Avg0.77 Sector Average FCF/S

P/FCFPrice over free cash flow

P/FCF Sector Avg-11.40 Sector Average P/FCF

P/E2.50 Price over earnings ratio

P/E Sector Avg6.33 Sector Average P/E

P/BPrice over book value ratio

P/B Sector Avg1.18 Sector Average P/B

PR19.03 Payout Ratio (in %)

PR Sector Avg13.73 Sector average Payout Ratio (in %)

D/E RatioDebt / Equity ratio (%)

Sector D/E Ratio162.22 Sector Debt / Equity ratio (%)

Last Trade PriceRs 266.50

3 Months AvgRs 153.67


9 Months AvgRs 0.00


SWOT ANALYSIS OF TEXTILE INDUSTRY PAKISTAN: Strengths:

1. 4th largest Cotton producer2. 64% of countrys export volume3. 1.4m people employed with 50% in apparel4. Availability of cheaper labor at US$ 0.39 per hour5. Raw Material Base6. Rich Heritage7. Demand Driven Industry (more than 4000 units for textiles alone)8. Strong presence in local market9. Geographically situated at ideal location (near end users)10.Most setups are self employed and have simpler managementstructure

Weaknesses:

11.Low Price Image12.Lower marketing initiatives13.Limited use of modern technology14.Confusion in political / religious scenario15.Low levels of managerial capabilities16.More dependence on cotton17.Poor infrastructure18.Obsolete technology machinery and equipment used for manufacturing19.Availability of raw material and inconsistent raw material prices20.Unskilled labor (only 1% workers have certificate / diploma fromtechnical training institutions)21.Absence of research and development culture22.Lack of synergies between Govt. support institutions and practicalmarket.23.Lack of standardization and quality control24.Non-sophisticated marketing sense. (branding & grading)25.Unorganized vendor base26.Limited access to information (availability of finance, technologicalknow how & Govt. regulations)27.Energy costs28. 20% Interest On Bank Loans29.Tariff hikes of Gas30.Tariff hikes of Electricity31.Frequent Interruption in supply of electricity and Gas32.High Freight Cost

Opportunities:

33.Better laid down factories on best practices34.Potential of improving confidence in buyer by working directly &closely35.Home Furnishing from Pakistan have made a big name worldwide36.Womens wear has a huge potential37.Pakistan Textile City38.Marketing39.Collaboration with foreign countries40.Re-engineering of Product system41.Producing high value products

Threats:

42.Rising Cotton Prices43.China and India being considered as countries for high value addedgarments44.Price Pressure

CONCLUSION:*After making brief careful analysis of the Company, It is clear that the long term solvency position of the Company is satisfactory. * It is also clear that short term financial position of the Company is very bad. The Company is meeting its current liabilities out of the short term borrowing. * The short term borrowing of the Company are 74% of the total current liabilities and 70% of the total liabilities. Such borrowing results in huge amount of financial charges. These financial charges are burden on the Companys profit. * Most of the products of the Company are being sold in the local market. According to an estimate Companys exports are 24% of its total sales. The quantum of export decreased during the year 1998 due to the crises in the Far Eastern Markets. * The Company is not producing better quality yarn. This is the reason why the Company cannot not compete in the international market. Therefore, it is suggested that the Company should improve it quality by using modern technology. And at the same time the Company should find new markets to sell its product. * The plant of the Company is being utilized always above 100% capacity. This is possible because of tireless efforts of the workers and production managers. * The Company should control its production cost effectively. The main reason of unprofitable operation of the Company is its high production cost. According to an estimate cost of goods manufactured is always above 90% of its total sales value. * The worker of the Company should be motivated to increase production using effective incentives scheme. More over proper training should be given to workers so that the production can be increased and wastage can be reduced. * Plant and machinery of the Company is obsolete as a result large amount is being spent to maintain them in proper working condition. To produce the quality yarn the plant of the Company must be replaced with new one. * The Company must have a fully computerized accounting system so that the efficiency of the accounts department can be increased.

Documents

ALLAWASAYA