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COLONY TEXTILE MILL

MULTAN

G R O U P n o 3

M B A 2 nd N U M L

I F R E Y A Q O O B

I Q R A A M J A D

A N U M R A E E S

SUBMITEED TO: -

SIR RAO AKMAL ALI

analysis REPORT



ACKNOWLEDGEMENT:

I express my whole hearted thanks to Almighty

ALLAH…

I feel utmost pride in acknowledging with sincere

gratitude for the valuable guidance I have received

from my respected teacher Sir. Rao Akmal Ali who

has been a constant source of enthusiastic

encouragement throughout my study. Due to his

guidance I would be able to complete this report. His

advice, criticism and remarks are of most value to

me.

2





CONTENTS:

Company information 5-7

Vision 8

Mission Statement 8

Nature of the company 9

Human Resource Department 10

Composition of company equity 11-12

Debt Structure and the source of external financing 13

Summaries the company financial operations 14-15

Total Asset and Labilités ratios 16

Ratio analysis 17-19

Conclusion 20

Questionnaire 21

Formula Sheet 22

Formulas Used 23-24

Visit details 25

4



COMPANY INFORMATION:

Board of directors: Mr.Fareed M.Sheikh

Mr.M.Akram Qureshi

Mr.M.Azam Barki

Mr.Malik Sohail Ahmed

Mr.Bilal Ahmed Khan Niazi

Mr.M Farooq

Mr.Syed Arif Hussain

Company Secretary:

Mr.M Abid

Board Committees:

Audit Committees: Mr.M Akram Qureshi (Chairman)

Mr.Malik Suhail Ahmed (Member)

Mr.Syed Arif Hussain (Member)

Executive Committee:

Mr.Fareed M.Sheikh (Chairman)

Mr.M.Azam Barki (Member)

Mr.Bilal Ahmed Khan (Member)

Ch. Financial Officer:

Mr.Mahboob Ahmed

Head of Internal Audit:

Mr. Najeeb ullah Khan

5



Other Management Committee

Technical Committee:

Mr.Fareed M. Sheikh (Chairman)

Mr.Gulzar Ahmed (Technical Director Unit 2&5)

Mr.Salman Saif (G.M Unit 1)

Mr.M.Amin Shahid (G.M Unit 3)

Mr.Rashid Akhtar Malik (G.M Unit 4)

Mr.M. Tariq Sheikh (G.M Unit 6)

Finance committee:

Mr.Fareed M sheikh (Chairman)

Mr. Mahboob Ahmed (Chief Financial Officer)

Mr.Atta Mohyuddin Khan (Manager Accounts)

Mr.M.Faisal Naseem (Manager Finance)

H.R Committee:

Mr Fareed M.Sheikh (Chairman)

Mr.M Atta Ullah khan Niazi (Director H.R)

Mr.Abdul Hakeem Khan (Manager H.R)

Bankers:

Faisal Bank ltd

Habib Bank ltd

KASB Bank ltd

Meezan Bank ltd

National Bank Of Pakistan

Soneri Bank ltd

Standard Chartered Bank

Silk Bank ltd

The Bank of Punjab

United Bank ltd

Arif Habib Bank ltd

6



Auditors:

Naveed Zafar Hussain Jaffery & co.

Chartered Accountants

Legal Advisors:

Imran Anjum Alvi (Advocate)

Imtiaz Saddique & Associates

Advocates & Solicitors

Corporate and Head office:

M Ismail Aiwan-i-Science Building

Shahrah-i-Jalaluddin-Roomi

(Ferozepur Road) Lahore-54600

Phone: 042-35758970-2

Fax: 042-35763247

Production Facility:

(Unit # 1-7, 186,576 Spindles & 2880 Rotors)

Ismailabad (Multan)

Phone: 061-6539021-3

Fax: 061-6539509

UAN: 111-265-669

7



Vision statement

To be the largest Pakistani yarn supplier, fully equipped to cater

to all needs of ever evolving global markets. To explore and

create growth opportunities to maximize return to all stake

holders.

Mission statement

To take the company to a new height where it is rated as the

best in all spheres of business and everyone concerned feels

proud of being its integral part.

8



Nature of the Organization:

The Colony Textile Mill is related to corporate sector and its core business is toproduce and supply of spun yarn to local and international customers’ with bestquantity standards and efficient services. Their employment and HR policesdeveloped individuals without race, religion, gender or any discriminationfactor. They provide equal opportunities to all the employees under a teambased working environment.

They believe in community development. They contribute their resources, bothfinancial and ethical in supporting all the deserving individuals of the society.Their rash management policies are geared to enhance shareholders worth,improve credit worthiness and minimize credit risk while diversifying income,along with suppliers and customer base.

They are as a responsible corporate citizen strongly adheres to the corporategovernance principles and comply with the regulatory obligations enforced byregulatory agencies foot improving corporate performance. There aremarketing polices are customer focused. They believe in One Window Solutionand customer satisfaction. Their marketing policy is only based on these twoparameters and to achieve this. They ensure best quality and efficient

response to the customers.

Main Departments:

The departments which are efficiently used in the colony textile mill are asfollows:

Human resource department

Marketing department

Finance department

Accounts department

Admin department

Production department

9



Human Resource Department

Alongside the development of its physical facilities, CTML is deeply conscious of the pivotal role

that human resources play in the success of an organization. As a matter of fact, human resource

development has been identified as an area of key importance. While strengthening the ranks of itswork force with quality professionals at various levels of management, the company also undertakes

several initiatives for improving productivity and efficiency at all levels of services. Through

computer training, various courses, sponsorships of staff for studies at professional institutions and

seminars, the company is providing its employees on going opportunities for continuous self-

improvement and learning.

Recruitment:-

Their recruitment process is to collect CVs firstly than chose specific number of CVs. Next step is to

conduct preliminary interview of the applicants than written test. After this there is background

investigation of the applicants.

Selection:-

Their selection criteria are different according to different job specifications.

Training:-

There are special training programs those are indoor and outdoor both. Those training enhance the

skills n knowledge of the employees.

Compensation:-

They are fully compensating their employees and give them rewards in different shapes. They provide

services of accommodation and 1400 houses are adjacent to the mill.

There is also education facility for the children of employees. The school building is also in the

boundary of the mill. There are also medical services working for the betterment of the employees so

that they can give maximum productivity.

Career management:-

In the colony textile mills there are high growth opportunities for the employees. The CTML gives

importance to their employees as much as they are focusing on customers. Because they know that if

employees are satisfied they give their maximum output. The promotion of employees is based on

their performance.

10



Composition of company equity

11



12



Debt Structure and the source of

external financing

13





NON CURRENT LIABILITIES

Loan from related paritiLiabilities against asset

Long term financing

other

STOCK HOLDER EQUITY

Issued Capital

Capital Reserveunappreciated profit

Surplus on Fix Asset

COLONY M ILLS LTD.

Income Statement

sales

Cost of Goods soldGross profit

admin15



Total assets and liabilities

1%

11%

8%

18%

3%3%

37%

2% 6%

0%11%

Current Assets

Cash & Bank Balance

Short Term Investment

Trade Debts

Other Receivable

Stores & Spares

27%

0%2%

29%

2%

31%

1%

8%

0%

Current Liabilities

Creditor

Bills Payable

Advance payments

Other

16



Ratio analysis

Colony Mills Limited

Profitability Ratios

Operating profit margin

Np margin

ROCE

Operating asset turoverAsset turnover


Current ratio

Quick ratio


Activity ratio

Receivable turnover (times)

Receivable days (days)

Inventory turnover (times)

Inventory days (days)Operating cycle (days)

Payable turnover (times)

Payable days (days)


Total debt to equity

Interest coverage


Basic EPS

Mrket Price per sharePrice/Earning Ratio 17



0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%14.00%

16.00%

2008 2007 2006

P e r c e n t a g e

Years

Profitability ratios

Gp Margin

Operating profit margin

Np margin

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2008 2007 2006

T i m e s

Years

Liquidity Ratios

Current ratio

Quick ratio

18



0.00

50.00

100.00

150.00

200.00

250.00

300.00

2008 2007 2006

D a y s / t i m e s

Years

Activity RatiosReceivable turnover(times)

Receivable days (days)

Inventory turnover(times)

Inventory days (days)

Operatingcycle (days)

Payable turnover (times)

-

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2008 2007 2006

T i m e s

Years

Solvency Ratios

Total debt to equity

Interest coverage

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

2008 2007 2006

R s / t i m e s

Years

Investor's Ratios

Basic EPS

Mrket Price per share

Price/Earning Ratio

19



CONCLUSION

From the above analysis it is conclude that the company’s gross profit

margin in 2007 is 12.76% and in 2008 it is 14.16%. It’s clearly shows that

there is increasing trend in company profits. As well as the profit increase

the new investment is also increases that’s why the net profit margin is

almost same or decreasing. Their payables also decrease from previous

year. The overall view is the colony textile mill is going on profit

satisfying its shareholders. Its solvency ratio is on decreasing from 2007.

QUESTIONNAIRE

20



I shall be thankful if you provide me a brief introduction of the company.

The Colony Group is one of Pakistan's oldest and the most revered business groups. The Group has grown phenomenally

and has become a leading player in all the sectors in which it operates. Colony Mills Limited is a Colony Group’s

company. The Company is principally engaged in the manufacturing of yarn.

What is the strategic goal of the company?

To excel in delivering highest standards quality yarn to customers in the local and international markets as per their

customized needs. And to provide quality yarn to customers and expand sales through good governance, explore new

markets, quality control by developing a team for sustainable and equitable growth with a concept of”one window

solution”

What is the importance of manufacturing sector in Pakistan?

Manufacturing Industry sector has a good impact economy of Pakistan. This is most growing industry of Pakistan. This

sector contributes a major portion to our export and also the total Gross Domestic Product (GDP). This sector gives great

employment to our population.

What are the future ventures of the company?

A state-of-the-art Open-End Spinning production facility is under construction. It will be the first of its kind facility in the

country, with 2,880 rotors capable of producing 15,000 Metric Tons of yarn annually, including slub yarns.

What has been the profitability of the company in comparison to its competitor?

By taking a glance of the profitability of one of the competitor it can be seen that the profitability of Colony Mills is much

better than its competitor. The gross profits of the Colony are high due to effective utilization of plant and labor force by

the management of the company.

What has been the liquidity position of the company in comparison to its competitor?

Colony Textile mills ltd’s current ratio is decreasing from 2005 to 2008. It shows that co has poor short term debt paying

ability. From the analysis of the liquidity position of the competitor of the Colony Mills it can be seen that the liquidity

position of the Company is much stronger than its competitor.

What has been the long term solvency position of the company in comparison to its competitor?

The lower the debt equity ratio that is preferable. This ratio decreases from year 2005 to 2007 but it improves/increases in

2008. By taking a glance of the solvency position of the competitor of Colony mills it can be seen that Colony mills is

more levered than its competitor which increases the risks of company but the return of Colony is also higher than its

competitor.

21



FORMULA SHEET:

Colony M ills Lim ited

P ro f itab ility Rat io s

G p M arginO peratin g pro f it m argin

N p m argin

ROCE

O peratin g asset turo ver

A sset turn o ver

Colony M ills Lim ited

Cu rren t rat io

22



FORMULAS USED:

1. Growth Trend

2. Gross Profit Margin

3. Return on Capital Employed

4. Net Profit

5. Return on Equity

6. Receivable Turnover Period

7. Inventory Turnover Period

23



8. Asset Turnover

9. Current Ratio

10. Quick Ratio

11. Interest Cover

12. Earnings Per Share

13. Price to Earnings Ratio

24



VISIT DETAILS

25

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appentix-ctml 2003