INTERNSHIP REPORT

ON

ABUBAKAR ANEES TEXTILES

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SUBMITTED TO:
Mr. Muhammad Adnan Afzal

SUBMITTED BY:
HAMID AMEEN
ROLL NO.15152

INTERNSHIP REPORT ON

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Prepared by:
Name: HAMID AMEEN
Class: B. Com.
Roll No.: 15152
Session: 2014-2016
Registration No.: GCUF-2014-02652

COLLEGE OF COMMERCE
GOVERNMENT COLLEGE UNIVERSITY, FAISALABAD

INTERNSHIP REPORT COMPLETION CERTIFICATE

Students under our supervision. It is also certified that the Report meets all criteria and standards

laid down for Completion of Degree.

The Details are as Follows:

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Organization Name: Abubakar Anees Textiles

Student Name: HAMID AMEEN

Class: B.COM

Roll No: 15152

Session: 2014-2016

Registration No: GCUF-2014-02652

Signture:____________________

Name of Internal Supervisor

Date:

Dedication

To my beloved parents and respected teachers whose utmost love,

Care and struggle against all odds, brought me to this height of

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 by the benevolence of ALLAH ALMIGHTY.

Acknowledgment
First of all I am thankful to ALLAH ALMIGHTY, the Beneficent, the Merciful, for giving me so
much strength and strength to work on this internship report and complete it successfully. I

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would like to express my great fullness to all my teachers especially for giving me kind guidance
and providing me a chance to work on this project right through from the start my courses. I am
also thankful to all ABUBAKAR ANESS TEXTILES Staff and training staff for his valuable
suggestions, gentle supervision and encouragement throughout my internship.
Along with all this I am very awful to the Human Resource/Admin Department of
ABUBAKAR ANESS TEXTILES and their cooperation during my stay in the organization.
Especially I am thankful to these people of HRM / Admin Department who help in completing
my Internship in their organization.

Sr. Contents Page #

ORGANIZATION INTRODUCTION
1. 8

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 NATURE OF BUSINESS
2 9
INTERNAL DETAILS
3. 10
MISSION STATEMENT
4. 11
IMPORT DEPARTMENT
5. 15
IMPORTANT BOOKS
6. 20
INTERNAL AUDIT DEPARTMENT
7. 25
QUALITY CONTROL MANAGEMENT
8. 30
PRICE
9. 31
LETTER OF CREDIT
10. 33
PEST ANALYSIS
11. 35

12. SWOT ANALYSIS 37

13. CONCLUSION 39
FINANCIAL STATEMENTS
14. 40
RATIO ANALYSIS
15. 45

ORGANIZATION INTRODUCTION

ABUBAKER ANESS TEXTILES

Organization Name
December 13, 1989
Year of Foundation

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 Rs. 10000000
Authorized Capital
0688529-2
National Tax Number

General Sales Tax Number

Textiles
Business Nature
Company Limited by Shares
Organization/Company Type
Manufacturing/Trading/Dying and Printing
Principal Activity
Grey Fabric, Print fabric
Major Product(s)/Service(s)

Bi Product(s)/Service(s)
www.Abubakaraneestextiles@gmail.com
Mailing Address
+92412424236-37
Phone No.
+92412424238
Fax
www.Abubakaraneestextiles.com.pk
Website
www.Abubakaraneestextiles.com.pk
E-Mail

Facebook

NATURE OF BUSINESS

ABUBAKAR ANEES TEXTILES:

The Principal Business of the Company is Manufacture and Sale of Grey Cloth and Print Cloth.

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STATUS:
The Company is limited by shares incorporated in Pakistan on December 13, 1989 under the
Companies Ordinance, 1984 with an Authorized Capital of 10000000 Ordinary Shares of Rs.
10/- each i.e., Rs. 100000000/-. The Issued, Subscribed and Paid up Capital of the Company is
3800000 Ordinary Shares of Rs. 10/- each full paid in cash i.e., Rs. 38000000/-

MANUFACTURING UNIT:
The Company has two manufacturing units, Printing and Dying
The Units is located at 3Km Jaranwala Road Khurrianwala, Faisalabad Pakistan.

PRODUCTS:
Major Products of the company are
Print Fabric
Grey Fabric

INTERNAL DETAILS

HEAD OFFICE:
Head Office of the Company is located,3Km Jaranwala Road Khurrianwala Faisalabad Pakistan.

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FINANCIAL YEAR:
Financial Year of Company starts on Ist October and lasts till 30th September.

BANKERS:
Habib Bank Pvt Limited.
Mezan Bank Pvt Limited.

RAW MATERIALS:
Raw materials of productions are Cotton.

WORK FORCE:
The Company has a total work force of 743 including skilled and unskilled.

CAPACITY:
Number of Spindles worked 17280
Number of Shifts per day 03
Number of working days 365
Installed Capacity after conversion
Into 20/s count kgs 564500

MISSION STATEMENT

To produce superior quality of grey by focusing on customer demand in order to face the
competition in international market and at the same time taking care of its employees, suppliers,
shareholders and society.

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Purchase Department:
The purchase department is divided into to two sections, cotton purchase department and store
purchase department.

PURCHASE
DEPARTMENT

STORE
COTTON PURCHASE
PURCHASE

COTTON PURCHASE DEPARTMENT:

Cotton purchase department is most important department in textile industry. Quality of yarn
depends upon cotton that has been purchased. It becomes most important when there is business
of export. There is no question of compromise on quality. Because your minor mistake may
result in huge losses. Moreover you will loss your credibility. From director to cotton selectors
all are involved in cotton purchase process.

PURCHASE PROCESS:
The following steps are involved in the purchase of raw material i.e. cotton.

Demand of purchase
from mill
Purchase Requisition

Sample from different

suppliers and
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quotations
 Sample Testing
Decision-making

Agreement with the

Party
Receiving

Writing delivery order

for factory

InGate pass + D.O +

Purchase Invoice +
Purchase Requisitions
are supplied to accounts
department

VISIT OF COTTON SELECTORS:

The cotton selectors of ABUBAKAR ANEES TEXTILES visit the cotton ginning factories.
Cotton selectors may visit the factories on their own behalf and some times the cotton factories
call them. Their visits are very important because purchase process starts from here.
SELECTION OF SAMPLE:
Samples are selected from huge amounts of cotton. Samples are taken from different suppliers.
These samples are then tested. The most suitable sample at lowest price is selected for Purchase
of cotton.
As there is centralized management system so the Director himself takes the decision of
selection and purchase of cotton. In other words Director is final authority in making decision.

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STORE PURCHASE DEPARTMENT:
The store purchase department is headed by Stores Incharge. The setup of purchase department is
as under:
 Director
 Purchase Officer
 Assistant Purchase Officer
 Purchase Clerk
The store purchase department is responsible for the purchase of items like
Spare parts of machinery, store and Packing material spares, electric items, oil and lubricants,
Stationery items, Building Material, and General Store,

DOCUMENTS:
 Demand Requisition.
 Invoice of Purchase
 Delivery Order
 In Gate Pass
PROCEDURE:
The following is the procedure for local purchase department.
 The purchase department receives the demand requisition from store in charge at store at
mills this is in fact an intention or requirement of commodities at mill
 The purchase demand requisition contains a full detail of quality and quantity of
commodities required. It also contains price detail of goods purchased previously
 The purchase department on the basis of indent does an inquiry for rate from at least two
suppliers from approved suppliers list.
 After inquiry Purchase Manager discusses with Director for approval of rate and other
necessary requirement.
 After the approval the Purchase Department purchases the items from suppliers and sent
them to the mill with three copies of delivery orders

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  In case of no rejection of items store in charge send one copy of delivery order back to
the purchase department along with one copy of In Gate Pass. Store in charge also keeps
a copy of delivery order and in Gate Pass for his own record.
 In case of rejection of items store in charge sends all copies of Delivery Orders with
items back to the purchase department.

IMPORT DEPARTMENT
Chief Executive

ABUBAKAR ANEES TEXTILES has also an import department. The import department is
Director
responsible to import those items, which are not available in Pakistan. The structure of this
department is as under:

Senior Manager
Import
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Assistant
PROCEDURE:
Senior Manager is responsible for import of machinery, equipment, spare parts, raw material, etc.
 An indent for import of item after the approval of Chief Executive is sent to import
department.
 The Senior Manager Import selects a subcontractor from approved suppliers list.
 In reply, a quotation from the subcontractor is received .A copy of quotation is sent to
concerned department for evaluation and checking of specification.
 The received items are sending to the mills where these are opened. The items are
checked against quotations. In case of any damage, the import department is informed.
Import department do the necessary arrangements for survey of goods from insurance
agencies

IMPORT ACCOUNTS DEPARTMENT:

Accounting is the art or science of interpreting, measuring, and communicating the results of
economic activities whether you are paying your phone bill, balancing your checkbook,
preparing your income tax return or managing an international corporation, you are working with
accounting. Accounts Manager makes the important financial decisions with consultation of
Director and Chief executive of company.
Record of all departments like import department, Purchase and sale department, are maintained
here. So this department feels a burden of work. Accountant is very much busy person who gives
instructions to six members of finance department and checks their work time-to-time .His ten-

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year experience has made the work easier for him. All types of tax rates, recent changes in tax
policies, different codes, companies’ names are on his fingertips.
The accounts department is responsible for the entire accounting process of the organization
regarding the recording of transactions, designing the accounting policies and accounting system,
preparing financial statements and computer application. If we consider a company a cell then
we can say that accounts department has role of nucleus.
Without accounts department there is no possibility of doing business even sight weakness’ on
the part of accounts department can badly effect the performance of whole organization.

FUNCTIONS OF THE DEPARTMENT:

Very first and an important function of accounting department is recording the business
transactions on vouchers. This is also called process of vouching. This is made for internal record
keeping. Auditors specifically audit vouchers. Wrong vouching will lead to error in the system
and ultimately create problems.
From vouchers information is recorded in daybook and cashbook. As each voucher along with its
invoice, Do and other necessary documents are kept in the record room so daybook is one that
can give information about parties DR and name of account CR along with amount.
In order to see accounts in condense form ledger is used. From daybook all the entries are posted
in ledger. Ledger represents DR or CR balance of each party. So from ledger we can see amount
that is to be paid to a party or the amount that is to be received and the balance at the end of the
month.
After this all the DR balances and CR balances of all the parties are posted in trial balance. The
trial balance must be equal at both sides. Otherwise there is any error in recording the
transactions.
Now trial balance becomes the source of profit and loss and balance sheet.
This department also designs the accounting policies. All the work in this department is being
take place on accrual basis.
The department prepares trial balance at the end of every three months and Profit and loss
accounts and balance sheet are prepared at the end of year. The financial year ends on
september30 of each year. The financial statements are presented to shareholders

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THE SETUP OF DEPARTMENT:

Chief Accountant

Accountant
Accountant

Asst Accountant

Computer
Computer
Operator
Operator

Cashier
Cashier

Record
Record Keeper
Keeper

The accounting department is mainly divided in to following three sections:

1. Stores section
2. Salaries and Wages Section
3. General Accounting

STORE SECTION:
Store section is mainly concerned with store accounting. This section deals with many accounts
heads that are concerned with stores. Such as stores &spare A/C, oil and Lubricant, Packing
material A/C, General Store A/C, Building Material A/C and many others. The major
responsibilities of this department are

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  To record the store purchases
 To record all store issues
 To prepare various reports relating to store i.e. material consumption report, party wise
purchase report
To keep a check on all stores by surprisingly checking their record and physical existence of
items stored. Because of the above mentioned duties.

SALARIES AND WAGES SECTION:

This section is responsible of making payments to the employees. This section plays an
important role in safeguarding the interest of the company as well as employees. This section
also insures all the labor laws; certain laws relating to company are as under:
Leave Procedure:
There are three types of leaves.
Sick Leaves:
Sick Leaves are eight in year
Casual Leaves:
Casual Leaves are ten in each year
Annual or Earned Leaves
There are twelve earned leaves. Company’s rule doesn’t allow any employee to do four-day
leave without application.
Attendance Allowance:
Leave encashment is given to those employees who save their holidays and don’t avail them.
This is given according to their per day salary multiply with number of days of holidays not
availed.

Salaries and Wages:

Minimum salary is not less than Rs1950. The breakup of salary is as under
Basic Salary ________
Badly allowance 50
Cost of living Allowance 18% of basic salary

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House Rent Allowance 10%of basic salary
Utility Allowance 10% of basic salary
Special Allowance 300

Income Tax:
Income tax is deducted from salary of all those employees whose annual salary is greater than
Rs.40000.An entry is passed on voucher while deducting income tax and this is paid to tax
department

Advances and Loans:

Advances and loans are given to the Employees on their application and are adjusted against
their salaries every month. It is the sole discretion of the management whether they approve
advances and loans are not

Gratuity:
Amount of gratuity is deducted from salary of employee with passage of time and he gets a lump
sum amount at retiring time.

IMPORTANT BOOKS

 Cash Book
 Bank Book

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  Bought Day Book
 Sale Day Book

CASH BOOK:
In this book cash payment and cash receipt vouchers are recorded on daily basis. The vouchers
are numbered serial wise and cash-closing balance is calculated on daily basis.

BANK BOOK:
This book is maintained for all the bank accounts of the company. When any amount is
withdrawn or deposited in the bank that amount is also recorded inthe bankbook. At the end of
month bank account is reconciled with the statements of the banks

BOUGHT DAY BOOK:

The bought daybook is maintained for recording the purchases made by the company. The
balances from the bought daybook are entered in the relevant supplier ledgers. At the end of the
month the balances from the bought day book is posted in the main ledger for control purposes.

SALE DAY BOOK:

In this book sale bills are entered and then posted in the customer ledger. At the end of month
balances are posted in the main ledger for control purposes.
When the transaction is properly recorded in the books of accounts then these balances are
posted in the ledgers.

The following are the types of ledgers maintained in this organization.

Main ledger
Profit &Loss Ledger
Customer Ledger

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Supplier Ledger
Staff Ledger

MAIN LEDGER:
It is a control edger, which maintain all heads of accounts from which balance sheet is prepared.
All assets and liabilities accounted, profit loss, customer, supplier and personal Ledger are
maintained in it. Posting of sub ledger is made in main ledger on closing of month. From basic
books like cashbook, bank book, bought daybook and sale daybook. At the end of month trial
balance is prepared to check the accuracy of accounts maintained during the month by observing
the debit and credit balance as they are equal or not.

PROFIT AND LOSS LEDGER:

In profit and loss ledger all accounts of income and expenses are maintained .The following are
the heads of accounts maintained in the profit and loss ledger:
 Sales Account
 Local Sales
 Commission on sales
 Excise duty on Fabric
 Manufacturing Expenses
 Administration Expenses
 Selling Expenses
 Financial Charges
 Miscellaneous Charges

MANUFACTURING EXPENSES:
They are like purchase of cotton, wages and salaries, fuel and power, insurance, repair and
maintenance of plant, packing material and depreciation.

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ADMINISTRATION EXPENSES:
These are traveling expenses, salaries, communication expenses like fax, phone and telex, rent,
electricity, entertainment, advertising, vehicle up charges, depreciation, printing and stationary
expenses

SELLING EXPENSES:
These include export expenses, corporate freight, ocean freight, trailer freight and local selling
expenses.

FINANCIAL CHARGES:
They are like interest on long term loan, markup on short term finances, exchange risk coverage
fee, commission on bank guarantees, letter of credit commission, excise duty on long term and
short term finances.

MISCELLANEOUS CHARGES:
Miscellaneous charges include auditors fee, legal and professional charges, donations, fines and
penalties.

CUSTOMER LEDGER:
It is maintained by company in which all accounts are opened to whom the company sells yarn.
Posting in customer ledger is made from cashbook, bankbook and daybook. The balances of
customers are worked out daily and the report of receivables is prepared daily and submitted to
the management.

SUPPLIER LEDGER:
In supplier ledger the goods supplied by the parties is recorded. Party’s account is credited and
goods purchased are debited.

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PERSONAL LEDGER:
To record all transactions relating to the personal accounts of employees of the company, this
ledger is used. Advances and loans made to the employees, and the monthly deductions from
their accounts of loans are recorded.

ACCOUNTING SYSTEM:
Accounting System at here is centralized and on accrual basis. All accounts are maintained in
Faisalabad head office. The process of accounting system starts from the preparation of voucher.
The following are different types of vouchers prepared at ABUBAKAR ANEES TEXTILES.
 Journal Voucher
 Bank Voucher
 Payment Voucher
 Credit Voucher

JOURNAL VOUCHER (JV):

As accounting system is on accrual basis, so accounting entries are passed on journal voucher at
first step. This is also known adjustment voucher. This is prepared for adjusting entry. Vouchers
are prepared after every transaction. Accounts Manager and Director verify the voucher
respectively. If they have any question they can ask relevant person if there is no enquiry then
they will put their signatures on voucher. Now it is time to record these vouchers in books of
accounts.

BANK VOUCHER (BV):

Bank voucher is used when any transaction is made with bank . Amount may be drawn from
bank and can be deposited in bank. You can receive DR advice or CR advice from bank.
DR ADVICE:
When issued by bank, it means bank has deducted some amount from your account or when has
been made through your account

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CR ADVICE:
When issued by bank to you, it means some amount has been added in your account .It normally
takes place when some foreign remittances has been received by bank in your account. This is
usually sent by your customer in foreign country to which exports has been made.

PAYMENT VOUCHER:
This voucher is prepared at the time of making payments to any party. Party name is debited with
the amount to which payment has been made. Payment vouchers are used for the payment up to
Rs.5000. Payments more than this are made through bank

CREDIT VOUCHER:
As name of voucher represents, this voucher is prepared when some amount is received from any
party. In this case party name is credited by the amount that has been received

INTERNAL AUDIT DEPARTMENT

Audit means checking the accounts prepared by others with a view to express an opinion. An
auditor is appointed to go through the accounting and other records.

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Internal audit is essential for large-scale companies. It is a review of operations and records
under taken within a business by specially assigned staff. The management can appoint staff to
go through the business activities. The suggestions given by auditors can be applied for the
business benefit.
This organization has also a separate department for performing the internal audit. The internal
auditor heads this department. The audit department develops audit program before conducting
an audit. this department works on continual basis. The internal auditor of the company visits the
mill on weekly basis and conducts the audit according to the checklist framed by the internal
audit department. The department is responsible to keeps its eyes on the implementation of
management policies. This department is also responsible to inform the top management
regarding the accuracy of all accounting information and their analysis

MAIN FUNCTIONS OF THE INTERNAL AUDIT DEPARTMENT:

Following are the main functions of internal audit department:

REVISION OF THE SYSTEM:

The internal audit department revises the system if there arises any discrepancy.

CHECK ON THE SYSTEM:

The internal audit department checks whether the revised system is being followed or not, if
there arises any deviation that is reported to the management.

CHECK ON THE MANAGEMENT POLICIES:

This department also examines whether management policies are being followed or not

PROPER MAINTENANCE OF BOOKS OF ACCOUNTS:

The internal audit department also examines that whether books are being properly maintained as
required by the Companies Ordinance 1984.
Assets Safeguarding

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This department also safeguards the company’s assets.

MAIN FUNCTIONS OF INTERNAL AUDIT DEPARTMENT AT THE

HEAD OFFICE:
 Checking of posting from clock cards to wages sheets
 Price Checking
 Recovery of advances
 Checking of rebates and discounts
 Continuous checking of assets of the company
 Checking of Bank vouchers, Journal vouchers, Payment vouchers, Credit vouchers
 Checking of trial balance statement after every three months.
 Checking of bank reconciliation statements every month.
 An internal auditor can check any document at any time or can ask the accountant to
provide the necessary documents.

PRODUCTION DEPARTMENT:
ABUBAKAR ANEES TEXTILES Company has a Printing and Dying Unit which is situated at
Khurrianwala This unit is equipped with highly modern and automated machinery. Following
sections are there in their Production Department or Printing Unit.

PLUCKER ROOM:
Now a days most of the ABUBAKAR ANEES TEXTILES are using the Auto Plucker Plants.
The function of this plant is the breaking and opening of the bales of cotton. The cotton in
these bales is in the pressed form. It cannot be used for further processing until and unless it is
opened and made in the loose form. Firstly the cotton bales were opened manually.
Further more it took a lot of time. Along with opening, the blending of different lots is done in
this plant, a lot is consisted of 100 bales of cotton. For blending the bales contain the
specifications as given below:
 Lot Number
 Kind of Cotton/Quality of Cotton
CONDITIONING:
Conditioning is a term, which is directed towards a task in which the opened cotton from plucker
room is placed in open form before feeding in the Blow Room. In this way the cotton absorbs
the air and automatically comes into loose form, which is helpful in the smooth functioning of

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Blow Rom machines. For the purpose of conditioning the cotton poles are allowed to lie for 12
to 16 hours.

BLOW ROOM:
The main function of the Blow Room is cleaning and purifying the cotton. In Blow Room, the
raw cotton is first time processed. Input of this room is the raw cotton while the output is the lap.
In Blow Room, the Bale Breaker machines are installed. These perform the function of breaking
cotton into the loose form then cotton is passed artificially the lighted path so that any impurity
such as stones, clots can be removed. The Bale Breaker machine contains the beaters in them
these beaters move the cotton into different ways and open it the spikes installed on the edges
help in splitting the cotton.

DISTRIBUTORS:
These are the pipes through which the cotton is sent to Sturcthers where the raw cotton takes the
shape of final product of Blow Room. Firstly, the cotton was put into sturctchers manually
therefore lot of cotton was wasted but now the help of distributors the cotton is not wasted.

STURCTURE:
These are the machines where output of Blow Room Lap is shaped.
 Testing
 Checking grey
 Stiching Unit
 Dying Unit
 Printing Unit
 Finishing
 Packing

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TESTING:
When a LOT enter in unit first of all they going in laboratory and check the quality of the grey
fabric.

CHECKING GREY:
When a LOT enter in Unit the checker check the quality of grey fabric if they Pasout and the
LOT in process.

STICHTING:
After checking they going to stitching Unit and sticth the all fabric.

DYING UNIT:
After stiching they goes on dying unit and colour the realted LOT.

PRINTING UNIT:
After dying and other side the same LOT designed complete on printing unit.

FINISHING:
After printing and dying product going to finish goods.

PACKING:
End the last step after finishing goods packed and the Shirts,Shaal and Trouser checked and
Packed.
The final mark that is “Made in Pakistan” is placed.

TYPES OF PRODUCTION REPORTS

Different types of reports are prepared when yarn is received from the spinning section an all
records are maintained completely. These are as under:

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  Grey Report
 Waste Report
 Daily Cotton Consumption Report
 Efficiency Report
 Daily Production Report

QUALITY CONTROL MANAGEMENT

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Quality Control refers to setting certain standards for production and matching production with
those standards. Management of every company is specially committed to the good quality both
in production and end results. The Management of ABUBAKAR ANESS TEXTILES has been
successful in creating and maintaining the quality culture in the organization. Daily quality
report is sent to headquarter and it is checked here. therefore, it is highly intensified. Following
are the characteristics of the Yarn that are checked for the equality assurance:
 Length and Strength
 Weight and Final Of Grey
 Evenness of Fabric

MARKETING MIX:
Marketing mix is the set of marketing tool that the firm uses to get its marketing objective in the
target market.

PRODUCT:
ABUBAKAR ANEES TEXTILES is dealing in the textile area, the products which the
ABUBAKAR ANEES TEXTILES is manufacturing is the grey fabric.
ABUBAKAR ANEES TEXTILES is producing the best quality grey there and the different
types. The construction of the grey fabric.
There are counts.
ABUBAKAR ANESS TEXTILES produces the Grey of different counts. From 1 count to 20
count Grey& above, according to the specification of the customers.
 ABUBAKAR ANEES TEXTIL also sells & purchase the products from the local market
to fulfill its orders.
 These products are building the image the progress and developments of the organization.
PRICE

PRICING OBJECTIVES:
The obvious pricing objectives, of ABUBAKAR ANEES TEXTILES.
 Maximization of profit

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  To achieve the target return and targeted sales.
 Maintain the market share.

PRICING METHOD:
The pricing method ABUBAKAR ANEES TEXTILES is adopting is profit based. The
ABUBAKAR ANEES TEXTILES policy about pricing is that the profit should be reasonable.
And also they keep in mind the competitors because they are also providing the products at the
competitive rates.
 Fixed cost
 Variable cost
The total cost is calculated. while all the expenditure related to the products production are
added. The total expenditure are divided by the production. There the per unit is obtained, also a
margin is added.

FIXED COST:
Fixed cost in value, the cost related to the machinery.
Building cost.
Electricity change.
Salaries & wages
Insurance expenses.
VARIABLE COST:
Part time workers.
Transportation charges
Miscellaneous.
Fixed Cost + Variable Cost +Desired Profit:
The profit margin depends upon the quality of the yarn and the grey fabric. As the high quality
yarn is used in the construction of the grey cloth, then the price would be high. The price will be
different to attract the customer and in local market.

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PRICE METHOD FOR LOCAL:
Pricing method for the local sale is different because all the cost involved in the export
procedures is not included. So the price would be lower in this.

PLACE/DISTRIBUTION:
Therefore the distribution channel of the ABUBAKAR ANEES TEXTILES is as follows.

ABUBAKAR ANEES TEXTILES TO CUSTOMER:

ABUBAKAR ANEES TEXTILES is also dealing directly with the customers. As in the local
market and the foreign, the buyers direct contact with the ABUBAKAR ANEES TEXTILES. So
The transporter help in delivering the products. The transporter are helping a lot in progressing
the textile industry. The comely delivery to the buyer is the greatest service to the customer,
timely delivery is important for the success and development of the organization. .

LETTER OF CREDIT

ABUBAKAR ANEES TEXTILES to agent & to customer. They receive the order on behalf of
the buyer, give to the seller. They receive their commission form the buyer and the seller.
The agents also purchase the products, sell them directly to other buyers. So in this trading
they earn enough profit. .

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 ABUBAKAR ANEES TEXTILES mostly receive orders through agents, located in the
Lahore.
ABUBAKAR ANEES TEXTILES A pays commission to them.
Mainly the responsibilities lies on the agents in case of delayed shipments, payment problems
and the quality problems.
PROMOTION:
ABUBAKAR ANEES TEXTILES provides the company brouchers to the buyers.
ABUBAKAR ANEES TEXTILES provides the samples of the grey fabric.
ABUBAKAR ANEES TEXTILES has a direct contact with the local agents, so they also
promote the company products.
Visits to the customers.
ABUBAKAR ANEES TEXTILES marketing manager also visits its customers.
Their high quality of the products on the fine count the Grey cloth is also promoting the
company and establishing image and goodwill.
ABUBAKAR ANEES TEXTILES provides the timely information to customers which helps
in promoting.

FORM-E:
Form E is a document issued by the exporter bank. Through Form-E the SBP controls the overall
exports of the country. The form-E declares that the export information given on the form-E are
correct and will submit the duplicate and triplicate copy of this form to authorized bank.
Form-E contains the following important information’s.
1) Description of the goods, the quality of the goods exported.
2) The quantity of the goods.
3) The Terms of the L/C.
4) Destination of the goods.
5) The consignee bank. The importer bank name through countries the payment would be
released.
6) The Invoice value of the goods in the exported.
7) The port form where the good are shipped.
8) The place from where good are cleared.

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 Date of the form E is also on this form.

CERTIFICATE OF INSPECTION:
Certificate of inspection is also a important document, it is in those consignments where the
importer wants to assure himself, about the shipment of the correct goods, in terms of the quality,
description quantity and size. The documents should specifically identify to the goods by having
a reference to the marks and numbers of the package.
.
BILL OF EXCHANGE:
It is unconditional order in writing, addressed by a person to another, signed by person giving it,
requiring the person to when it is addressed to pay on demand or at a fixed determinable future
date. When the L/C is opened the B/E must be strictly drawn according to the terms and
conditions of the creditor may be drown on the request of the applicant or on the bank request
through which the credit is opened. B/E is also a important document of Importer.

FORM-M:
It is also an important. It is used to pay the commission to the agents.
receive this from the agents. On this the amount of the commission is mentioned against
invoices.

PEST ANALYSIS

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POLITICAL:
 The government taxes and the procedures about the taxes collection also have impact on
the textile sector.
 Govt. rules & the regulation about the textile sectors they also influence on the small
and the large textile industries.
 Duty drew back is also an other, which is important.
 Custom rules regulation are major factors in importing the machinery the products, such
as the Grey Fabric.
 The discontinuity in the policies have the negative impact on ABUBAKAR ANESS
TEXTILES.
.
ECONOMIC:
 Growth rate of the country is also important for the progressive textile industry.
 Inflation rate shows the level of prices. The high rate of inflation level leading towards
the lower profit margin.
 Macro economy will also keep in improving the industry growth.
 Govt. rules & regulations also have influence in the textile industry.
 The fiscal balance also have impact. It is reducing so the interest rate is also decreasing.
 Balance of payment is also improving it is a positive indicator for the development of
textile sector.
 Govt. incentives to the textile products also play vital role.

SOCIAL:
 Social unrest and disorder is also influencing.
 Work force attitude is positive which is improving the growth and development of
ABUBAKAR ANEES TEXTILES.
 The culture and the social norms.
TECHNOLOGICAL:
 Technological developments in the machinery and parts have a great impact.

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  Internet access is other. It is improving the efficiency & the time is reducing. It is a great
facility to the exporters.
 Computer aided designs are also improve the overall productivity and the efficiency. It
has reduced the time cost as well.
 Customers quick access to the information due to the fast communication channels.
 The new technological developments such as e-commerce, e-banking and information
technology are improving the efficiency and productivity.

SWOT ANALYSIS

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STRENGTHS:
 Good know how about the textile business. Which is improving the progress of
the company.
 Cheap labour is available to ABUBAKAR ANESS TEXTILES which is reducing
the per unit cost.
 The products are at compatible prices.
 Cotton is also available at cheaper rates.
 It has its own spinning unit and the weaving unit also. Which is reducing the cost
of production.
 ABUBAKAR ANESS TEXTILES has well qualified staff.
 ABUBAKAR ANESS TEXTILES has a good financial resources. So they can
invest in other textile related products.
 ABUBAKAR ANESS TEXTILES has its better market information system.
 ABUBAKAR ANESS TEXTILES has good relations with local and foreign
buyers.

WEAKNESS
 Delivery time is more due to this the shipment are delayed.
 Lack of HR resources development.
 ABUBAKAR ANESS TEXTILES Lack of promotional activities.
 There is more decentralization in ABUBAKAR ANESS TEXTILES.
 Less competitive in the fine count.
 Our cotton fiber is Short .Which is decreasing our productivity in fiber.
 Non-professional attitude. Which is decreasing efficiency.
 ABUBAKAR ANESS TEXTILES Per unit cost is not decreasing .So we are less
competitive in count Fiber.
 ABUBAKAR ANESS TEXTILES is value added products.

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 OPPORTUNITIES:
 The ABUBAKAR ANESS TEXTILES can move in horizontal and the forward
integration.
 The decreasing interest rates on the loans.
 ABUBAKAR ANESS TEXTILES has opportunity to explore new international
and growth oriented markets for the Fabric.
 ABUBAKAR ANESS TEXTILES can play the role of agent. So they can save the
commission which is paid to the agents.
 ABUBAKAR ANESS TEXTILES can better the marketing techniques.
 The company should import the latest technology to decrease the per unit cost of
the production.
 The company should go in dying process also.
 The company should make efforts to improve the technical skills of the labour and
employees which will improve the overall efficiency and productivity of the
organization.

THREATS:
 Quotas are lifting ABUBAKAR ANESS TEXTILES will face the major threat.
 ABUBAKAR ANESS TEXTILES has a threat from the domestic and the
international competitors
 WTO regime will be a great threat.
 The ABUBAKAR ANESS TEXTILES will face tough competition in domestic
and international markets.
 Political instability is also a major threat.
 Govt. strict policies about the textile sector.
 The unreliable agriculture sector.

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 CONCLUSIONS

It’s a period of Organization or institute who ignore the element of globalization automatically
kick out from the market. Only those can be survive who compete this global market perfectly.
There is a “Survival of the fittest”.
So the ABUBAKAR ANESS TEXTILES has the opportunity to survive the Local market
because it has the better good will and positive earning per share it can capture all the All
Pakistan market.
ABUBAKAR ANESS TEXTILES is also faces a tenor in which there is both opportunities and
threats for it to be able and survive and growth. But many of the challenges that shall occur will
be outside of the control of the Mills.
However, this does not absolve the government of Pakistan and the local Textile industry from its
responsibility to best deal with the climate both locally and internationally and prepare itself for
even greater challenges.
Now there is need that the Govt. and industry realize that a sincere and positive approach has to
be made to meet the challenges of the present day competition environment. In this regard
adequate finance for capital investment, working capital and development of comprehensive
long term strategies and the stable government.

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 FINANCIAL STATEMENTS OF ABUBAKAR ANESS TEXTILES

As At 30, September 2015/2016/2017

Rupees in Thousand
Equity And Liabilities: 2015 2016 2017

Authorized share capital

30,000,000 ordinary shares of rupees 10 each 300,000 200,000 200,000

Issued, subscribed and paid up capital

20,000,000 ordinary share of Rs.10 each fully paid in cash 200,000 200,000 160,000
Revenue reserve-General 14,500 19,500 19,500
Accumulated profit/(loss) 4332 -85988 -178,867
218,832 133,512 633

Surplus on revaluation of operating Fixed assets 304,231 304,262 307,952

Deferred income on sale & lease back of operating f. assets 1,049 1,312 0
Non current Liabilities:
Sponsor's loan interest free 0 0 30,000
Redeemable capital 105,332 131,903 158,500
Long term loan/funds 240,750 240,750 240,750
Liabilities against assets subject to finance lease 67,529 15,728 3,541
Deferred liability for gratuity 22,266 15,813 12,530
435,877 404,194 445,321

CURRENT LIABILITIES:
Individual Expenses 59,789 34,089 42,828
Short term finances 511,449 422,773 446,081
Creditors, accrued and other liabilities 259,025 256,149 153,906
Worker's participation fund 5,616 5,975 4,529

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 Provision for taxation 32,172 34,237 18,565
Proposed dividend to minority shareholders 4,692 4,692 0
Unclaimed dividend 459 315 315
873,202 758,230 666,224

Total Current Liabilities 1,833,191 1,601,510 1,420,130

ABUBAKAR ANESS TEXTILES.

BALANCE SHEET

As At 30, September 2015, 2016,2017

Rupees in Thousand
ASSETS: 2015 2016 2017
Non Current Assets: 704,027 760,808 702,679
Operating Fixed Assets 95,840 22,018 4,0310
Tangible fixed assets 18,906 2,3870 20,327

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Liquid Assets 818,773 785,213 727,037
Capital work-in-progress 77,709 76,312 66,772

Net Fixed Assets 1715255 1614122 1557035

CURRENT ASSETS:

Stores and spare parts 87,080 62,820 54,534

Stock-in-trade 306,578 141,405 100,434

Average Inventory 228,575 290,881 285,823

Advances, deposits, prepayments Debtors and
receivables 293,751 229,884 168,810
Cash & bank balance 20,725 14,995 16,720
936,709 739,985 626,321

Total Current Assets 1,833,191 1,601,510 1,420,130

ABBAKAR ANEES TEXTILES

PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2015, 2016, 2017

Rupees in Thousand
2015 2016 2017

SALES 1,642,469 1,737,435 1,248,409

Cost of goods sold 1,237,458 1,344,435 973,520

Gross Profit 405,011 392,463 274,889

Operating/Admin Expenses 212,639 199,955 135,191

Operating Profit 192,372 192,508 139,698

Other Income 1,820 2,724 2,429

EBIT 194,192 195,232 142,127

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Financial Charges 82,064 76,014 51,555
Worker's Participation Fund 5,616 5,975 4,529
87,680 81,989 56,084
Profit Before Taxation 106,512 113,243 86,043
Provision for Taxation 16,500 15,672 16,564
Net Profit After Taxation 90,012 97,571 69,479
Previous Years' Loss Brought Forward -85,988 -178,867 -248,346
Profit(Loss) available for appropriation 4,024 -81,296 -178,867

Appropriations:
Transferred from Revenue-General 5,000 0 0
Proposed Dividend to Minority
Shareholders -4,332 -4,692 0

308 -4,692 0
Accumulated Profit/(loss) carried to balance
sheet 4,332 -85,988 -178,867
Earning Per Share 4.5 4.88 4.34

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 RATIO ANALYSIS

Current Ratio = Current Assets/Current Liabilities

2015 1833191/1833191 = 0.1

2016 1601510/1601510 = 0.1
2017 1420130/1420130 = 0.1

Quick Ratio = Liquid(quick)Assets/Current Liabilities

2015 818,773/1833191 = 0.45

2016 785,213/1601510 = 0.42
2017 727,037/1420130 = 0.39

Inventory Turnover = Net Sales/Average Inventory Cost

2015 1,642,469/228575 = 7.187

2016 1,737,435/290881 = 5.973
2017 1,248,409/285823 = 4.367

Net Profit Ratio = Net Sales/Net profit After Tax

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2015 1,642,469/90012 = 18.2
2016 1,737,435/97571 = 17.8
2017 1,248,409/69479 = 17.9

Profitability Ratio =Gross Profit/Net Sales*100

2015 405011/1642469*100 = 24.6

2016 392463/1737435*100 = 22.5
2017 274889/1248409*100 = 22.0

Operating Profit Ratio =Total Operating Expenses/Net Sales*100

2015 212639/1642469*100 = 12.9

2016 199955/1737435*100 = 11.5
2017 135191/1248409*100 = 10.8

Expenses Ratio =Individual Expenses/Net Sales*100

2015 59789/1642469*100 = 3.6

2016 34089/1737435*100 = 1.96
2017 42828/1248409*100 = 3.43

Fixed Assets Turnover Ratio =Cost of Goods Sold/Operating Fixed Assets

2015 1,237,458/95,840 = 1.29

2016 1,344,435/22,018 = 6.10

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2017 973,520/40,031 = 22.1

Fixed Assets Ratio =Net fixed Assets/Long Term Funds

2015 1715255/240750 = 7.12

2016 1614122/240750 = 6.70
2017 1557035/240750 = 6.46

Earning Per Share =Net Profit after Tax/No of Share

2015 90012/300000 = 0.03

2016 97571/200000 = 0.4
2017 69479/200000 = 0.3

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