PROJECT REPORT ON

NISHAT MILLS LIMITED

Prepared by:
Name: ZOHAIB HAIDER
Class: M.COM
Roll No.: 10617
Session: 2015-2017
Registration No.: 2015-GCUF-10617

COLLEGE OF COMMERCE
 DEDICATION

When the person does something, there must be an inspiration behind for doing work.
Especially I dedicate my work to my Mother from whom I have received a Great inspiration
and boost for doing this important work. In addition, I dedicate this work to my siblings and
my Teachers, they guide me and show their confidence on me and realizes me that I am very
capable of doing this work. I dedicate my work to all my friends and colleagues who really
help me to perform this work. May ALLAH bless all of them.
 ACKNOWLEDGMENT

Countless thanks to ALLAH Almighty, the lord of the whole universe and the greatest force
behind my success in my life. I also pay my heartily to Hazrat Muhammad (S.A.W) whose
whole life is marvel and model of any person belonging to any walk of life.
I feel great pleasure and honor to express my Hearties gratitude and deep sense of obligation
to my teacher Sir Gohar Mehmood for his keen interest, skillful guidance, enlightened
views, unfailing patience, and mastery advice, inspire attitude and valuable suggestions for
the accomplishment of present study.
I am also very thankful to Management of Toyota Motors, especially Senior Manager
Finance whose professional attitude towards work inspired me very much at the outset of my
professional career.
In fact it was not possible to bring this work to fruitful conclusion without his persuasive and
sincere efforts.

Zohaib Haider
 Chapter no 1
Introduction
1.1 Nishat Group
The history of Nishat Group dates back to 1951, when Mian Muhammad Yahya founded
Nishat Mills Limited. This man of vision, courage and integrity, Mian Mohammad Yahya
was born in 1918 in Chiniot. In 1947 when he was running leather business in Calcutta, he
witnessed by the momentous changes that swept the Indo-Pak subcontinent. This is story of
success through sheer hard work and an undaunted spirit of enterprise. Beginning with a
cotton export house, he soon branched out in to ginning, cotton and jute textiles, chemicals
and insurance. He was elected Chairman of all Pakistan Textile Mills Association. He died in
1969, at the age of 51 having achieved so much in so short time. After almost half a century
of undaunted success, Nishat group is among the leading business houses of the country and
ranks among the top 5 groups in terms of assets and sales revenue. The group has its roots
firmly planted into four core business namely
a) Textiles
b) Power Generation
c) Banking
d) Cement

1.1.1 Textiles
The textile capacity of the group is the largest in the country. An addition of 20,000 new
spindles, 100 new air jet looms and new dyeing plants has increased the existing capacity of
242,000 spindles, 740 looms and dyeing and finishing capacity of 5 million meters. The
largest exporters of textile products from Pakistan, for more then decade!

1.1.2 Power Generation

Nishat group has also been a pioneer in power generation in the private sector of the country.
Nishat setup the first power generation unit in the private sector in 1995.

1.1.3 Banking
In 1991, Nishat Group ventured into the financial sector through the acquisition of Muslim
commercial Bank. MCB has grown ever since and is now the largest bank in the private
sector. MCB has a network of over 1200 branches employing over 12,000 people.
1.1.4 Cement
In 1992, Nishat Group acquired D.G Khan Cement Company Limited (DGKCC) from the
second largest project of the group and is ideally located in the heart of the country, with easy
access to transportation all over Pakistan. DGKCC unit No. 1 has a capacity of 2,200 tons per
day. A new unit heaving the capacity of 3,300 tons was setup in 1997.
International Finance Corporation and common Wealth Development Corporation have
financed this unit. With the addition of unit No.2, DGKCC has become the largest
manufacturer of cement in Pakistan.

1.2 The Company

Nishat Mills Limited (“the Company”) is the most modern and largest vertically integrated
textile Company in Pakistan. The Company commenced its business as a partnership firm in
1951 and was incorporated as a private limited Company in 1959. Later it was listed on the
Karachi, Lahore and Islamabad Stock Exchanges on 27 November 1961, 11 March 1989 and
10 August 1992 respectively. The Company’s production facilities comprise of spinning,
weaving, printing, dyeing, home textile and garment stitching and power generation. Overall,
the Company has 32 manufacturing units each specializing in a specific product range located
in Faisalabad, Sheikhupura, Ferozewatwan and Lahore. A major portion of the Company’s
earnings is export based.
Over the the years, the Company has achieved significant geographical diversification in its
export sales mix. The Company has a very broad base of customers for its products outside
Pakistan. It has a long working relationship with the top brands of the world such as J.K.N.
International, Levis, Next, Pincroft Dyeing, Ocean Garments, Gap, Carreman, Tommy
Hilfiger, Tommy Bahamas, Crate & Barrel, Laura Ashley, American Living, Chaps, Hugo
Boss, Revman and John Lewis. Nishat Mills Limited is also called the flagship company of
the Nishat Group. Nishat Group (“the Group”) is a leading business entity in South Asia. Its
net worth makes it the largest business house of Pakistan. The Group has grown from a
cotton export house into the premier business group of the country. Highly diversified, the
Group has a presence in all the major sectors including Textiles, Cement, Banking, Insurance,
Power Generation, Hotel Business, Agriculture, Dairy, Real Estate, Aviation and Paper
Products. Showcasing its varied expertise and acumen in every facet of its operations, the
group companies hold the distinction of being among the leading players in each sector.
1.3 Company Profile
Nishat Mills Limited ("Nishat") is a public company incorporated in Pakistan and listed on all
three Pakistani stock exchanges. Nishat is engaged in textile manufacturing. Which involves
spinning, combing, weaving, bleaching, dyeing, and printing, stitching, buying, and selling of
textiles? They deal with yarn, linen, cloth and other goods including fabrics made from raw
cotton, synthetic fiber and cloth. The Company is engaged in the business of textile
manufacturing and of spinning, combing, weaving, bleaching, dyeing printing, stitching,
buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made
from raw cotton, synthetic fiber and cloth, and to generate, accumulate, distribute and supply
electricity.
Company is providing quality products to its customers within the Pakistan and outside the
Pakistan. Presently company is exporting its all kinds if apparel products.

1.4 Company Vision

To transform the company into a modern and dynamic yarn, cloth and processed cloth and
finished product manufacturing company with highly professionals and fully equipped to
play a meaningful role on sustain able basis in the economy of Pakistan.
To transform the company into a modern and dynamic power generating company with
highly professionals and fully equipped to play a meaningful role on sustainable basis in the
economy of Pakistan.

1.5 Company Mission

To provide quality products to customers and explore new markets to promote/expand sales
of the company through good governance and foster a sound and dynamic team, so as to
achieve optimum prices of products of the company for sustainable and equitable growth and
prosperity of the company.

1.6 Quality policy

We work together as a team for implementation and continual improvement of total quality
system in order to achieve satisfaction of our internal and external customers.
1.7 Major competitors
Nishat competitors are
 Crescent
 Chenab
 Arzoo
 Alkarms
 Sitara
 Kohinoor
 Amtex
But main competitors of Nishat Mill are
 “Crescent Textile Mills”
 “Chenab Textile”
 Chapter no 2
Organizational Hierarchy
2.1 Organizational Chart

Board of
Directors

Board Committees

Audit Committee

HRM Committee

CEO

Spinning Division HRM Management

Weaving Division Internal Audit

Apparel Division Finance & MIS

Power Division Supply Chain

Management

Processing and Corporate

Home textile secretariat
division

Processing Dying and Production

and stitching Finishing

Marketing
2.2 Chief Executive Officer
Mian Umer Mansha holds a bachelor’s degree in Business Administration from USA. He has
been serving on the Board of Directors of various listed companies for more than 18 years.
He also serves on the Board of Adamjee Insurance Company Limited, MCB Bank Limited,
Adamjee Life Assurance Company Limited, Nishat Dairy (Private) Limited, Nishat Hotels
and Properties Limited, Nishat (Aziz Avenue) Hotels and Properties Limited, Nishat
(Raiwind) Hotels and Properties Limited, Nishat (Gulberg) Hotels and Properties Limited,
Nishat Developers (Private) Limited, Nishat Agriculture Farming (Private) Limited and
Nishat Farms Supplies (Private) Limited.

2.3 BOARD OF DIRECTORS:

1 Mian Umer Mansha Chief Executive Officer
2 Mian Hassan Mansha Chairman
3 Mr. Khalid Qadeer Qureshi Director
4 Mr. Ghazanfar Hussain Mirza Director
5 Syed Zahid Hussain Director (Nominee NIT)
6 Ms. Nabiha Shahnawaz Cheema Director
7 Mr. Maqsood Ahmad Director

2.3.1 Independent Non-Executive Director:

Syed Zahid Hussain is a seasoned professional in Pakistan’s corporate world. He possesses
multi-faceted talents and has attained exemplary accomplishments. He has in-depth
knowledge of a wide range of subjects and has extensively diversified experience and
exposure in senior positions. He has earned B.Sc, LLB and MA in International Relations. He
has a vast experience of working as Chairman/Chief Executive/Director of various state
owned enterprises and listed companies. He has also served as the High Commissioner/
Ambassador of Pakistan based in Kenya, with accredited assignments of Ambassadorship in
Tanzania, Uganda, Rwanda, Krundse, Ethiopia and Eritrea. He is a fellow member of the
Institute of Management, England, International Biographical Center, the USA and the
Institute of Marketing Management, Karachi.
2.3.2 Non-Executive Director
Mr. Khalid Qadeer Qureshi is a fellow member of the Institute of Chartered Accountants of
Pakistan. He has over 43 years of rich professional experience. He also serves on the Board
of D.G. Khan Cement Company Limited, Nishat Power Limited, Lalpir Power Limited,
Pakgen Power Limited, Nishat Paper Products Company Limited and Nishat Commodities
(Private) Limited.
Ms. Nabiha Shahnawaz Cheema is a fellow member of the Institute of Chartered Accountants
of Pakistan and she is a Certified Director by completing the Director’s Training Program
from ICAP. She has more than 15 years of professional experience. She also serves on the
Board of Security General Insurance Company Limited, D.G. Khan Cement Company
Limited and Nishat Hospitality (Private) Limited.

2.3.3 Executive Director

Mr. Maqsood Ahmad holds a Masters degree and a rich professional experience of over 23
years in the textile industry, especially in the spinning business. He is a Certified Director by
completing the Director’s Training Program from ICAP. He is actively involved in the
strategic decisions relating to the operations of the Company.
Mr. Ghazanfar Hussain Mirza has a Bachelor degree in Mechanical Engineering from NED
University of Engineering & Technology. Mr. Mirza has 35 years of experience in business
development and business & corporate management in engineering, technical and
multinational environment.
He has served as Managing Director of Group Companies of Wartsila Corporation (Finland)
in Pakistan and Saudi Arabia. He also serves on the Board of Nishat Power Limited and holds
the office of Chief Executive Officer of Pakgen Power Limited.

2.4 Audit Committee

1 Mr. Khalid Qadeer Qureshi Chairman/Member
2 Syed Zahid Hussain Member
3 Ms. Nabiha Shahnawaz Cheema Member
2.5 HR & R Committee
1 Mian Hassan Mansha Chairman/Member
2 Mian Umer Mansha Member
3 Mr. Khalid Qadeer Qureshi Member
4 Ms. Nabeeha Shahnawaz Cheema Member

2.6 The Department of Finance

Toyota Motors has many departments in it. The importance of any department cannot be
ignored and it would not be justified to see any department in isolation. The Finance
department which coordinates all the departments is backbone of the organization. All the
financial records are kept in it and the department has two basic functions, the treasury and
record keeping. The treasury section deals with the decision making area and the record
keeping section deals with the day to day book keeping measures, making salaries, recording
expenses etc. While doing internship, I was initially asked to understand the working of
record keeping section. Afterwards several sessions were given regarding the treasury section
of the department.

2.6.1 General Manager Finance

The General Manager Finance directly deals with the Indus Motors Company through a third
party, Standard Chartered Bank. He is the head of the department and directly coordinates
with the CEO. He is supposed to lead by example.

2.6.2 Senior Manage Finance.

Under the General Manager Finance, the sole authority is Senior Manager. He is responsible
for dealing with the monthly financial statements, preparing the budget for all departments,
coordinating with them and assigning tasks to the subordinates.
2.6.3 Assistant Manager Finance.

He is the team leader for the book keeping se General Manager and also acts as a liaison for
the treasury part. The Assistant manager finance executes the responsibilities given by the
Senior Manager and coordinates with the Accountants and Recovery Officer

2.6.4 Accountant Sales

The Accountant Sales is responsible for making and maintaining the sales accounts. He feeds
the data into the computer system and provides sales related figures to the Assistant Manager.

2.6.5 Accountant Operations

An accountant operation is responsible for maintaining the salary accounts of the employees,
recording the day to day operational expenses. He receives the bill from vendors and prepares
the Journal Vouchers. He is responsible for providing all the figures related to his domain to
the Assistant Manager.

2.6.6 Recovery Officer

The officer provides information to the contractual collection officers and remains in contact
with the insurance companies for recoveries

2.7 Operations department

Toyota Motors has many departments in it. The importance of any department cannot be
ignored and it would not be justified to see any department in isolation. Another major
department is Operations department. The primary functions of an operations department
include the design and management of products, services and processes. In addition, the
operations department evaluates and allocates resources to effectively deliver products and
services.
2.7.1 Manager Operations

The General Manager operations directly deal with the Toyota Motors employes through
personal meeting he give targets to sales Manager and also deals all of the working
managements. He is the head of the department and directly coordinates with the CEO.

2.7.2 General Manager Sales

The HOD of sales department is general manager sales he is a leading personality of Sales
department and he coordinate with the sales executive and he handle all of the sales
procedure. The major duty of general manager Sales is to fulfill the sale targets with the help
of sales executives. He performs a key role in the Toyota Motors.

2.7.3 Sales Executive

Sales executive is the staff of sales department. These are key employees for the company
these persons sold the products of the company and these are those persons who provide the
benefits to the investors and they achieve targets of the company. All of company sales are
made y these persons and they satisfy the customer after providing the basic information’s
about the products of the company and give answers of those customers’ quires

2.8 Services Department

It involves problem solving, an ability to think on your feet, being organized and having a bit
of charm on the way through. It's all about being the go-between for the workshop and the
customer and taking it all in your stride.

In Toyota Motors services department offer the customer 1st free service after 1000 km
driving of a new cars. This is a facility of Toyota Motors that they provide to their customers
and provide them a great environment to them.
In Toyota Motors services department offer the customer 1st free service after 1000 km
driving of a new cars. This is a facility of Toyota Motors that they provide to their customers
and provide them a great environment to them.

2.8.1 Manager Services

Manager Service department is that person who handles the all problems and the staff
working under that manager. All the staff is trained and they repair the customer’s cars and
all the damaged pieces and services of cars after a time period. It is the responsibly of the
manager to provide good dealings to Toyota Motors Customers

2.8.2 Customer Relations

At Toyota Motors Customer Relations is focused on providing complete support to customers
by connecting with them, owning their problems & seeing them through to resolution in an
efficient & effective manner. We believe in our customers and keep them at the forefront by
engaging them through different channels. Customer satisfaction is the ultimate objective and
a strong coordination between all customer touch-points is a key ingredient. Our Customer
Assistance Centre works tirelessly to provide complete support with the ultimate objective of
gaining the approval and endorsement of our patrons.

2.8.3 Human Resources

Another department is Human Resource Department. Over 50 new jobs were created during
the year to ensure our operations remain streamlined to deliver products in a timely manner to
meet the rising demand of customers in the market place. At the heart of our human
development initiative remains Kaizen, an incessant commitment to excellence and
improvement that warranted every new team member joining the team is trained in the
Toyota Way before being assigned to their permanent job in the manufacturing operations.
 Chapter no 3
Products and Services
3.1 Business Operations
3.1.1 Spinning Department:
Nishat Textile Limited has seven spinning units situated in Faisalabad. These units are
equipped with the latest machines in all of their departments. In the spinning units the fiber is
converted into yarn, and as this the quality of yarn is very important in the textile sector so
spinning units have a lot of importance.
Spinning
Weaving
Grey Room
Processing
Singeing
Desizing
Scouring
Bleaching
Printing
Dyeing
Finishing
Folding
Generally the spinning mills mechanism is very similar. It starts from the mixing department
where the bales of cotton are mixed and at that section the most visible impurities are taken
out. This mixed cotton is then taken to the blow room by a machine. After going through a
process it is taken to the card room for the next process.
After the card room the route is taken by keeping in view that whether carded yarn is the end
product or the combed yarn. The combed yarn is of better quality and its process is a bit
bigger than the other one.
For the carded portion the drawing breakers & drawing finishers are used to prepare the fiber
to a certain level so that the process on the simplex machine can be carried out. On the other
hand, in the combed portion, after the drawing breaker the cotton goes through the lab
former, & after that it goes through the combing machine, where the comer noil and comber
sliver are separated. The comber sliver, after passing through the PC drawing & Drawing
finisher goes to the simplex machine. The product that comes from the simplex machine is
then taken to the Ring section where the yarn is to be made. Finally after passing through the
auto cone the yarn comes in the packing department. In NML the process of Ultra Violet
Checking is also practiced to ensure the quality of the yarn.
3.1.2 Weaving Department
Very similar to the spinning units, the weaving units of NML are really very well equipped
with the latest machinery to make the best possible product for the customer to gain the
customer satisfaction. Most of the machines in the weaving unit of NML are of new
technology & NML has a very good check on the quality of fabric produced by its Quality
Control department.
The end product of the spinning unit is the starting point of the weaving unit. When the cones
of the yarn are brought to weaving unit, it is then taken to the warping zone in which the
beams are prepared. These beams are then taken to the sizing section where the different
chemicals are applied to the yarn so that the weaving of the fabric can be done with the
minimum breakage of yarn. After sizing the process of drawing inn is applied so that the yarn
could be converted into fabric.
After the drawing inn the beams of the yarn is then taken to the Sulzer Looms so that the yarn
is converted into the weaved product. When the greige is made, then it is taken to the
inspection department, where a lot of quality check is done. At the first step the fabric is
classified into two types, i.e. A grade & D grade.
The D grade fabric is either used in the B grade sale or in gathering of the fresh pieces. While
the process of A grade fabric is a bit longer.
The A grade fabric after mending, goes to the checking machines, from where it is taken to
the rechecking machines. After rechecking either the greige is rolled or folded & packed
according to requirements of the buyer.

3.1.3 Quality Control Department

First of all the people of NML checks the quality of yarn before taking it into the process.
Following are the yarn characteristics that are checked before taking it into the process:
• Count Testing
• Strength Testing
• TPI
• Hairiness Testing
• Thick & Thin bases
At the warping section the following characteristic is checked:
• Breakage Report
When the sizing process is applied, the following two tests are applied:
• Abrasion Test
• Strength Test
After completion of the greige the g/sm test is applied so that to have the best customized
product. Finally in the folding section checks are applied at every step of the folding process.
The weaving units of NML are known to be the best producers of greige product in Pakistan.

3.2 Processing Department

Processing Unit of every textile mill has a paramount importance because it actually provide
the finish fabric product which is either sent to customer either as a piece good or as made up
after converting the fabric into the required stitched product. The processing unit of NML
comprises of the following department:
 Bleaching Department
 Finishing Department
 Printing Department
 Dyeing Department
 Folding Department
 Quality Control Lab
 Digital Design Studio & Engraving Department
 Sample Room
 Production & Planning Department
The operations of Production & Planning Department are to work as a bridge between the
marketing team and the processing people, so this department has the prime importance.
All of the communication which is held between the processing & the export people is done
through this department. The finishing department is also very important because it is the
center of operations held in the processing unit.
A brief overview on the Processing capacity of NML has been discussed as follow:
3.2.1 Bleaching Department
The bleaching department of NML is equipped with the latest machinery to compete with the
market. Bleaching department has the following machines:
  Singeing & De-sizing:
 L-Box:
 Mercerizing:
 Emerizing:
 Jiger:
 Water Mangle:
The above are the machines & a very brief overview of the machines. The bleaching
department is like a back bone of the processing unit. After weaving mill, the fabric is
brought to the bleaching department where it is prepared on the above machines so as to be
prepared for the Printing or Dyeing.
The Quality Control people ensure the Quality of work in the Bleaching to fulfill the
collective goal.
3.2.2 Printing Department
The Printing department of Nishat Mills Limited comprises of three rotaries, i.e. Reggianni,
Zimmer & Stork. Along with theses three rotaries, the printing department has three sampling
tables to fulfill the sample need of the customers of NML.There is a mini sampling machine
for the sampling section to facilitate their work. The specification & general points about
these rotaries are as under:

Reggianni Machine:
Zimmer Machine:
Stork Machine:

The Printing department of NML is working at its best & producing really good stuff. After
the printing from the rotaries, the route of the fabric depends on the dye class. If the reactive
dyes have been used, then the fabric will be taken to first of all Ager Machine & then Goller
Soaper Washing, then to Stenter finish & finally to the calendar.
On the other hand the fabric treated with pigment dye is taken to the curing machine & from
there it is taken to the calendar after the required stenter finish. Now in the following line,
we'll see the specifications of the Curing & Ager Machines:

Curing Machine:
Ager & Curing Machine:
3.2.3 Dyeing Department

The dyeing department is a major department of NML processing. This includes three
machines. These machines have been identified & discussed as below:

Pad Thermosol:
Pad Steam:
Goller Soaper Washing:
So above is a bird's eye view on the dyeing department of NML.
3.2.4 Finishing Department

Finishing department of any textile mill has a very significant importance because it acts like
a hub in the Processing. Almost every fabric which goes through processing unit, it has to be
passed through the finishing department.

The finishing department of NML Processing unit is famous for its quality work. It comprises
of many latest machines which includes Stenters, Cylinders, Raising Machines & Sanforizing
Machine.

3.3 Process:

3.3.1. Coating Stage:

The first step which is taken in the formation of the screens is to coat the screen with SCR
100. This coating is done for the purpose of blocking the meshes of the screen so that the
required king of design can be made through the screen. The coating of the screen takes
almost 8-9 minutes.

3.3.2. Heating Stage:

These screens are then heated in the ovens so that to carry out the process in the best possible
manner. When the screens are heated in the proper way then they are taken to the exposing
machines. The heat is provided to the screens so that to fix the SCR 100 so that the exposing
stage should be started.
3.3.3. Exposing Stage:
Nishat Textile Mills Limited has two exposing machines, one of them is manual and the other
is fully automatic. The automatic machine is the "wax jet". The process of exposing stage is
different for both the machines.
In the process of Manual Machine, it is quite a time taking process. In this machine, the
presence of machine operator is very important; otherwise the time for each screen will be
higher than the original one.
Earlier most of the work was done through this machine but now the major load has been
shifted to "was jet". Irrespective of these facts the importance of this machine is still there.
All sizes and widths of the screens can be prepared through this machine. Basically the
manual machine is used for the word of design studio.
The "Wax Jet" machine is fully automatic. The work done through the digital design studio is
done through this automatic machine. The speed of exposing through this machine is
relatively higher than the manual machine because there is not such need of operator at every
stage of the exposing.
The process at this machine does not effect because of the presence of the operator. The
exposing is being done through the wax on this machine that is why it has such a name.
The mechanism of this machine is that the machine is linked with the digital design studio, so
the operator can access any of the prepared design in the studio. Then the wax is applied on
the screen in such a way that the wax is applied on that place from where the operator want to
open the meshes. Then the lighting process is done i.e. the screen goes through high power
light.
The result of this process is that the place where only coating is there and there is no wax, at
these places the coating got fixed in such a way that the meshes are blocked in a better way.
After this Exposing stage the screen is taken to the next stage.
NML has ordered for "ink jet" machine which will enhance the production capability of the
engraving department.

3.3.4. Washing Stage:

The screens are then taken from the exposing machines to the washing area. This is the area
where the screens are washed so that the black portion can be washed from the screens. This
is also called the Developing Stage. The screens are then kept on the light stand to see that
whether the results are satisfactory or not. When the staff feels that the design is satisfactory
then they send this screen to the heating machine for curing.

3.3.5. Curing Stage:

The curing is being done through an oven. The screens are kept about 20-25 minutes in the
oven. This heat fixes the design on the screen so that after the final touch the screen can be
sent to the next department.

3.3.6. Ending Stage:

During this stage the ring type iron is fixed on both the sides of the screens so that the screens
could be taken to the printing department for printing.

3.3.7. Touching Stage

During the touching stage the final work is done. In this stage if there is any extra patch on
the screen, then they are blocked with SCR52 so that the correct effect can be drawn on the
fabric. This is the final stage of Engraving Department. After this step, the screens are then
taken to printing department.

3.4 Commercial Department

Along with the cutting section, there is another important depart named as commercial
department. The working of commercial department starts from receiving the stitching
programs. First of all, they see whether it is a new order or a repeat order. Then they issue a
demand order through their Purchase Department. It is the duty of the commercial department
to arrange all the equipment needed in the stitching unit for every bulk order. The products
which are the responsibility of the commercial department includes label, fusing, polyester
rope, stiffener, insert card, poly bag, stickers, size stickers, identification sticker, barcodes,
security codes etc.
A freezing plan is made every month so as to maintain & systemize the production process.
The stitching units of NML have latest and number of machines to fulfill the customer need
& requirements. Total number of helpers in on daily wages in the whole stitching unit is 724.
There are 400 machines in the GSC (general stitching company).
Quality is most important consideration while production in NML. This is why the quality
checks in stitching department are of very good level. In Nishat Sewing Lahore, Acceptance
Quality Level 2.5 & AQL 4.0 is under practice. The Nishat Sewing Lahore is a certified for
quality level from many organizations. This shows that the Quality checks in Nishat Sewing
Units are of international standards. As the stitching department is the last department before
the dispatch of goods so a lot of responsibility comes on its shoulders. There are sample
rooms in the stitching units so as to fulfill the sample stitching requirement for different
markets to ensure customer satisfaction. So the above is the brief overview of some of the
NML operations. Now we'll discuss the chances of further improvement in NML.
3.5 Export Marketing Department
The export department of Nishat Mills Limited is known to be the best marketing department
in the whole textile industry because of the commitment and dedication of employees, the
determination of work & the best management system. NML Marketing has a very strong
liaison with their customers around the world. That's why NML has different segments on the
basis of different regions like North America, Australia and Europe. Every region has a
different Export Manager and its whole staff. The marketing responsibility is not only to just
sales and marketing it has also to find out new horizons and new ways. That's why Managers
visit to new Markets around the world.

3.6 HAM TEX FAIR

Hamtex is a fair of textile held in Germany on every January of the year in which all over the
world well established organizations make their display centers to attract new customers.
This department is responsible for the export of yarn, grey cloth and processed fiber. This
department has to fulfill all the legal requirements and prepare important documents involved
in the export of yarn, grey cloth and processed fiber. This department starts working from
getting purchase order to deliver the shipment to the buyer.

3.7 Bank Voucher

This Voucher is prepared when any amount is deposited or withdrawn from the bank.

3.7.1 Payment Voucher

This Voucher is prepared at the time of making payments to any party.

3.7.2 Credit Voucher

This voucher is prepared while receiving any amount from any party.

3.7.3 General Voucher

This is also known as adjustment voucher. This voucher is prepared for adjusting any entry.

Vouchers are prepared after every transaction. These vouchers are sent to the Chief
Accountant with all supporting documents. The chief Accountant verifies these vouchers and
sent them to the Director Finance. If he has any inquiry about a thing, he asks the relevant
person. If there is not any point for inquiry then he puts his signature on the vouchers. Now it
is a time to record these vouchers in the books of accounts

These transactions are recorded in the number of books like:

1 Cash Book

2 Bank Book

3 Bought Day Book

4 Sale Day Book

After recording the transactions in the books of accounts these are posted in the ledgers. The
internal auditor then verifies whether the transactions are properly recorded in the books of
accounts or not. Now it is a time to prepare trial balance from the ledgers and finally profit
and loss account and balance sheet is prepared. A brief description of the books and ledgers
are given below:
3.7.4 Cash Book

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

3.7.5 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 in the bankbook. At the end
of month bank account is reconciled with bank statements.

3.7.6 Bought Day Book

The bought day book is maintained for recording the purchases made by the company. The
balances form the bought day book is 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.

3.7.7 Sales Day Book

In this book sale bills are entered and then posted in the customer ledgers. At the end of the
month the 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 at Ajwa Textile Ltd.

1. Main Ledger

2. Profit and Loss Ledger

3. Customer Ledger
 4. Supplier Ledger

5. Staff Ledger

1- Main Ledger

It is a control ledger, which maintains all heads of accounts from which balance sheet is
prepared. All assets and liabilities accounted, profit and loss, customers, suppliers and
personal ledger are maintained in it. Posting of sub-ledger is made in main ledger on closing
of the month from basic books like cash book, bank book, bought day book and sale day
book. At the end of the month, Trail balance is prepared to check the accuracy of accounts
maintained during the month by seeing the debit

and credit of trial balance as they are equal or not.

2- 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 & loss ledger:

1 Sales Account

I. Local

ii. Export

2 Commission on Sales

3 Excise duty on Yarn

 4 Export Development Surcharge

There are some expenses heads maintained in the profit & loss ledger. These are as under:

1 Manufacturing Expenses

2 Admin Expenses

3 Selling Expenses

4 Financial Charges

5 Misc. Charges

Manufacturing Expenses

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

Admin Expenses

These are Directors traveling expenses, salaries, and communication expenses like fax telex
etc. rent, electricity, entertainment, and advertising, and vehicle, subscription, printing and
stationary.
Selling Expenses

These include export expense, corporate freight, and local selling expense.

Financial Charges

They are like interest on long-term loan, mark-up on short-term finances, long-term finances,
exchange risk coverage fee, commission on bank guarantees, L.C commission, excise duty on
long term and short term finances.

Misc. Charges

They include auditor‘s fee, legal and professional charges (other than auditors), donations,
fines and penalties.

3- Customer Ledger

It is maintained by company in which all accounts are opened to whom the company sells
yarn. Posting in a 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 management.

4- Suppliers Ledger

In supplier ledger the goods supplied by the parties are recorded.

5- Personal Ledger

To record all transactions relating to the personal accounts of employees of company, this
ledger is used. Trail Balance of all these ledgers is prepared at the end of the month, which is
then checked through main ledger
 Chapter no 4

SWOT Analysis

Strengths:

ISO 9001-2000: Weaknesses:

Strong Security System
High quality product
Latest mechanized machinery.
Tremendous market positioning
Highly qualified and skilled management
Highly Motivated Workforce
Adequate financial resources
Competitive advantage
Equipped with MIS System
Own power generation plant
High cost of production
Centralized decision making
Weak image in the international
market
Small international market share
Less promotional activities
Lack of benefits and rewards for the
employees

Opportunity:

Organization Can expand product lines

Organization Can capture new market segments
around the world
Organization Can reduce the cost by proper
utilization of resources
Organization Can hire more well-educated and
experienced person
Threats:
New Entry of competitors
Buyer needs demands changes
Political instability
Changed of government policies
Globally Economic instability
4.1 Detail of SWOT Analysis
4.1.1 Strengths
•ISO 9001-2000:
Nishat textile is certified under ISO 9001-2000 and so it meets the requirement of
international standard and has a value in the mind of concern people.
•Strong Security System
Nishat textile limited has a greater security system. There are different hidden security
cameras which capture the all moments.
•OKTEX 100:
Nishat is also Oktex 100 certified its mean that Nishat is satisfied to not using hazard
chemical using.
•High quality product
Nishat textile limited using advance technology like they have modern machinery by which
the quality of product produced is very high.
•Latest mechanized machinery.
They are using modern looms which they have purchased from Japan and France. And by
using that latest machinery the productivity of the employees are very high.
•Tremendous market positioning
Nishat textile is one of the pioneer textiles in the Pakistan so it got the position in the mind of
its customer. And being an old textile company people are loyal with it. Nishat has a better
position in the mind of its customers.
•Highly qualified and skilled management
The management of Nishat is skilled they have hired the foreign graduate people in their
management and also experienced people from all over the country.
•Highly Motivated Workforce
They are providing better pay to their employees and also bonus to them which motivate the
workforce and they are doing well at work setting.
•Adequate financial resources
The owner of the Nishat is one of the richest persons of the Pakistan and they have more
plant and investment in other industries like cement, Bank, They have adequate financial
resources to meet their requirements

.
•Competitive advantage
Because it is an old textile and it has still keep its position in the textile market on all others
competitors in the nation wide which is its competitive advantage.
•Equipped with MIS System
They have a management information system by which the departments and employees are
connect with each other and they have a data ware house by which they can share their
resources easily.
•Own power generation plant
They have own power generation plant and Nishat is the pioneer in the private organization
who start the power generation. And also selling to the WAPDA its produced power.

4.1.2 Weaknesses
•High cost of production
The production cost is high because of not properly utilization of its resources.
•Centralized decision making
The decisions are made by the upper management which is weakness of the Nishat because
they have no proper idea about the situation and their decision can be not fruitful for the
company.
•Weak image in the international market
Because of the other textile specialized countries like China, Bangladesh etc the international
image in the textile sector is very weak. Those countries providing cheap product to the
market then Pakistan's textile industries.
•Small international market share
Although Nishat has very strong in the national wide but it has small market share in the
global textile industry due to the sound competitors like china, and Bangladesh etc
•Less promotional activities
The advertising and promotional cost of the Nishat textile is very low it can take advantage
for more turnouts.
•Lack of benefits and rewards for the employees
Some facilities that other providing to their employees like Transport and medical fee etc
Nishat not providing to their employees because of which the productivity of the employees
decrease.
4.1.3 Opportunity
•Organization Can expand product lines
Currently the Nishat not dealing in knitwear they can expand their product line by producing
knitwear. They have plants and the extra cost for the production will be low for Nishat. And
they also have better market repute.
•Organization Can reduce the cost by proper utilization of resources
If the cost of different matters which is not utilizing properly is controlled by the Nishat
management they can produce more in a few costs. It has to develop a further systematic
process for controlling and managing resources.
•Organization Can hire more well-educated and experienced person
They can take advantages by hiring more skilled people and they should hire young, fresh
and energetic staff for their betterment.

4.1.4 Threats
•Buyer needs demands changes
Because of the research and development the design and the product of Nishat is just
satisfactory as compare to competitors in the globally and they are not fulfilling the demand
of customer.
•Political instability
Political instability effects the Nishat because of the quota system the company can be restrict
by the government to export.
•Changed of government policies
Government policies are changing day to day so it is a threat for the Nishat to survive in such
a changeable situation.
•Globally Economic instability
Because of the economic instability the Nishat affected a lot. Dumping system which is rising
on daily basis in the world can create many problems for the company and any uncertainty in
the world like 9/11 may affect also the overall export.
 Chapter no 5
Financial statements
2015 2014 2013
(Rupees in
thousand)
Summarized Balance Sheet
Non-Current Assets
Property, plant and equipment 24,357,269 22,964,388 15,530,320
Long term investments 51,960,454 44,771,715 37,378,224
Other Non-Current Assets 631,833 537,482 521,490
Current Assets
Stores, spares and loose tools 1,335,763 1,316,479 1,285,371
Stock in trade 10,350,193 12,752,495 10,945,439
Short term investments 2,189,860 3,227,560 4,362,880
Other current assets 10,314,628 11,478,458 10,610,870
Total Assets 101,140,000 97,048,577 80,634,594
Shareholders’ Equity 76,142,823 68,589,176 58,917,035
Non-Current liabilities
Long term financing 5,582,220 6,431,304 3,149,732
Deferred tax liability 247,462 474,878 499,415
Current Liabilities
Short term borrowings 11,524,143 14,468,124 11,939,028
Current portion of non-current 1,783,250 1,595,652 1,310,769
liabilities
Other current liabilities 5,860,102 5,489,443 4,818,615
Total Equity and Liabilities 101,140,000 97,048,577 80,634,594
Profit & Loss
Sales 51,177,577 54,444,091 52,426,030
Gross profit 6,024,138 7,863,774 9,044,485
EBITDA 8,260,046 9,125,677 9,334,690
Other income 4,004,655 3,653,041 2,739,102
Profit before tax 4,389,925 5,975,552 6,356,853
Profit after tax 3,911,925 5,512,552 5,846,853
Cash Flows
Cash Flow from Operating Activities 5,298,151 4,887,376 491,795
Cash Flow from Investing Activities (3,042,332) (7,909,028) (2,695,026)
Cash Flow from Financing Activities (5,005,916) 4,695,106 973,537
Changes in Cash & Cash Equivalents (2,750,097) 1,673,454 (1,229,694)
Cash and Cash Equivalents-year end 52,219 2,802,316 1,128,862
 5.1 Horizontal Analysis

2015 2014 2013

Balance Sheet
Total Equity 243% 219% 188%
Non-Current Liabilities 138% 163% 86%
Current Liabilities 181% 204% 171%
Total Liabilities 169% 192% 147%
Total Equity And Liabilities 219% 210% 175%
Assets
Non-Current Assets 223% 198% 155%
Current Assets 206% 245% 232%
Total Assets 219% 210% 175%
Profit and Loss Account
Sales 162% 173% 166%
Cost of Sales 177% 182% 170%
Gross Profit 101% 131% 151%
Distribution Cost 142% 149% 148%
Administrative Expenses 202% 189% 160%
Other Expenses 127% 119% 142%
Other Income 408% 372% 279%
Profit from Operations 139% 172% 181%
Finance Cost 155% 143% 144%
Profit before Taxation 134% 182% 193%
Taxation 129% 125% 138%
Profit after Taxation 134% 189% 201%
 5.2 Vertical Analysis
2015 2014 2013

Balance Sheet
Total equity 75.28% 70.68% 73.07%

Non-current liabilities 5.76% 7.12% 4.53%

Current liabilities 18.95% 22.21% 22.41%

Total Liabilities 24.72% 29.32% 26.93%

Total Equity And Liabilities 100.00% 100.00% 100.00%

Assets

Non-current assets 76.08% 70.35% 66.26%

Current assets 23.92% 29.65% 33.74%

Total Assets 100.00% 100.00% 100.00%

Profit and Loss

Sales 100.00% 100.00% 100.00%

Cost of Sales 88.23% 85.56% 82.75%

Gross Profit 11.77% 14.44% 17.25%

Distribution Cost 4.74% 4.69% 4.82%

Administrative Expenses 2.15% 1.90% 1.66%

Other Expenses 0.72% 0.63% 0.78%

Other Income 7.83% 6.71% 5.22%

Profit from Operations 11.99% 13.93% 15.21%

Finance Cost 3.41% 2.96% 3.09%

Profit before Taxation 8.58% 10.98% 12.13%

Taxation 0.93% 0.85% 0.97%

Profit after Taxation 7.64% 10.13% 11.15%

 5.3 Ratios

5.1 FINANCIAL RATIOS

5.1.1 Current Ratio

Current ratio indicates the liquidity position of the business that whether business can fulfill
its obligation or not. It is the ratio of current assets to current liabilities as,

Current Ratio = Current Assets/ Current Liabilities

2015 2014 2013
1.26 : 1 1.34 : 1 1.51 : 1

In year 2015 the current ratio of Nishat Mills is 1.26 but this is less than in 2014’s 1.34 and is
2013 the ratio is 1.51. It means the liquidity position of the company is down but this value is
also satisfactory value for Nishat Mills.

2.8.4 Quick Ratio

Quick Ratio
2015 2014 2013
0.65 : 1 0.68 : 1 0.83 : 1

2.8.5 Total Assets Turnover

This ratio measures that how much turnover is generated by the total assets of the
organization. This is calculated by the given formula,

Total Assets Turnover = Annual Sales or Total Income/Average Total Assets

2015 2014 2013
0.51 0.56 0.65
Assets turnover of the company ranges between 0.50- 0.70 times per year. It shows the
generation of huge sales from the worth of assets of the company and in the case of Nishat
Mills, it shows the firm's efficiency at using its assets in generating sales or revenue - the
higher the number the better.

2.8.6 Fixed Assets Turnover

This ratio measures the efficiency of using fixed assets in generating income or sales. It is the
ratio of annual sales to total fixed assets as given by the formula,

Fixed Assets Turnover = Annual Sales or Total Income/Total Fixed Assets

2015 2014 2013
2.1 2.37 3.38

Fixed Assets turnover of the company ranges between 2 – 3.38 times in three year. It shows
the generation of huge sales from the worth of fixed assets of the company and in the case of
Nishat Mills, it shows the firm's efficiency at using its assets in generating sales or revenue -
the higher the number the better.

2.8.7 Dividend Payout Ratio

This ratio tells about the relationship between earnings and dividend that whether earnings
are supporting dividend payments or not. It is calculated by dividing dividend per share to
earnings per share (EPS) as shown by the given formula,

Dividend Payout Ratio = Dividend per share/EPS

2015 2014 2013
40.43% 25.51% 24.05%

Usually higher dividend payout ratio is favorable and it is high for Nishat mills in 2015 which
is favorable.
2.8.8 Debt Equity Ratio
This ratio tells about the financial leverage of the organization that what proportion of debt
and what proportion of equity is being used by the organization for financing its available
assets. It is calculated by dividing long term debt to total capitalization as shown by the given
formula,
Debt Equity Ratio = Long Term Debt/ Total Capitalization
2015 2014 2013
7.33 9.38 5.35

A higher value of debt equity ratio is much favorable for the business as its high value tells
about the efficiency of the business to using its available debt for financing. Nishat Mill’s
debt equity ratio is showing an increasing trend over the past three years which is favorable
for us.

Profitability Ratios
These ratios tells about the profitability of the business and is consists of the following ratios
from which we can assess the profitability of the business.

2.8.9 Net Profit Margin

This ratio is mostly used for the internal comparison. This ratio shows the percentage of net
profit after tax to the total income/revenue. A higher profit margin ratio indicates a higher
margin safety and lower risk for the organization and vice versa. It is calculated by the
formula,

2015 2014 2013

7.64% 10.13% 11.15

During the year 2015 -2013 the net profit margin of Nishat Mills is between 7.64% - 11.15%.
This is very beneficial for the company and profits upward in year to year.
2.8.10 Operating Profit Margin
This ratio tells us about the percentage of operating profit to total income. It is calculated by
the following formula

2015 2014 2013

8.58% 10.98% 12.13%

During the year 2015 -2013 the operating profit margin of Nishat Mills is between 8.58% -
12.13%. This is very beneficial for the company and profits upward in year to year.

2.8.11 Return on Total Assets

This ratio tells about the percentage of net profit/earnings which business is attaining by
using its total available assets. It is calculated by dividing net profit to total assets as shown
by the given formula,

Return on Total Assets = Net Profit/Total Assets

2015 2014 2013
7.79% 10.99% 15.33%

Higher return on total assets is favorable for the business which shows better use of assets by
the business for generating profits. Nishat Mills return on total assets is showing a increasing
trend over past five years and it is very good for Nishat mills.

2.8.12 Return on Equity

This ratio shows a relationship between net income after taxes and shareholder’s equity, and
measures the efficiency of the organization of generating profits by using shareholder’s
equity. It is calculated by dividing net income after taxes to shareholder’s equity as shown by
the given formula,
 2015 2014 2013
5.41% 8.65% 12.10%

It should be high for favorable results. This ratio of Nishat Mills is showing a increasing
trend from 2013 to 2015.

2.8.13 Gross profit Ratio

These ratios tell about the profit before the expenses of the company use of Gross profit and
net Sales of the business which is calculated by the following ratios.
Gross profit
𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 𝑅𝑎𝑡𝑖𝑜 =
Net Sales

2015 2014 2013

11.77% 14.44% 17.25%

The gross profit margin of Nishat Mills lies between 11.77%-17.25% in previous three years.
It measures the percentage of each dollars of sales that results in net income. A higher profit
margin indicates a more profitable company that has better control over its costs compared to
its competitors.

2.8.14 Investment to Total Assets Ratio

This ratio tells about the percentage of investment to assets calculated by dividing investment
to assets as shown by the following formula,
Investment to Total Assets Ratio = Investment/Assets
2015 2014 2013
45% 40% 40%
Nishat Mills is showing a mixed trend of increasing and decreasing over the past five years.
In 2015 it is high at 45% as compare to 2014 at 40% which is favorable. But Nishat should
try to keep it high by making better policies.

2.8.15 Equity to Assets Ratio

This is the ratio of total shareholder’s equity to total assets and is calculated by the following
formula,
Equity to Assets Ratio =Total Shareholder’s Equity/Total Assets
2015 2014 2013
19.88 24.70 21.77

It is showing a decreasing trend except in 2014 increased trend but overall it is decreasing
which is unfavorable for the business.

2.8.16 Earnings per Share

This ratio shows the value of the share in market and it is calculated with this formula:
EPS = (net income – dividends on preferred stock) / outstanding common shares

2015 2014 2013

11.13 15.68 16.63

Earnings per share are a measure of net income earned on each share of common stock.
Nishat Mills earning per share of last three years lies among 42.7 – 115.9. The EPS formula
does not include preferred dividends for categories outside of continued operations and net
income. Earnings per share serve as an indicator of a company's profitability.
 Chapter 6
Conclusion

Nishat Mills Limited is one of the leading groups in Pakistan. The system, the management
style, the policies & decentralized decision making environment is really remarkable. This
report is basically an attempt to identify the areas which need to be improved.
In this era of technology, the "Information" is the key to success in the business. This means
that the successful businessman will be who will have the right information at the right time.
This comment leads to the conclusion that the Information Sharing Process should really be
improved.
The overall analysis is indicating that the company's progress has mainly attained through
dedication of employees. The effectiveness of its management, their willingness to take
advantage of opportunities and face challenges of changing economic picture, this all
contributes to the very much improved and sound position of company. This is really
appreciable for the devotion and hard work of all the employees of the company
 Chapter no 7
Suggestions and Recommendations
7.1 Recommendations for Improvements are:

 At present facility of bonus is given only to production staff but such incentives
should also be given to Head office Staff.
 Special incentives should also be given to Head on Eid and on other special days
should be given to the workers.
 Medical facilities are given in mill but such facilities should also be given to
management.
 Different training courses should be arranged for the up lifting and improving the
quality of work for employees
 They provide transportation facility to only female employees I think male should
also be provided with conveyance convenience. This will create the easiness for
workers and reduce the wastage of time.
 There is also a problem of work overload for the employees and it should be control
properly so that the employees are motivated.
 Employees should be paid extra for the work which they done after working hours.