AHMED MUSTAFA INTERNSHIP REPORT ON ZEENAT (TEXTILE PVT) LTD GUJRANWALAL

INTERNSHIP REPORT

INTRODUCTION

Zeenat Textile Industries Pvt. Limited Gujranwala has the privilege to be the first member of the esteemed Zeenat Group. Founded in 1972 by the most illustrious brothers, Haji Abdul Ghafoor (late) and Haji Bashir Ahmad, is now led by the Hafiz Abdul Waheed , a dynamic second generation leader of Pakistan textile industry.

Zeenat Textile is one of the largest manufacturer and registered leading exporter of textile goods in Pakistan. It is exporting high quality products. Its products of brand name such as “Rabia Lawn” and “Classic Lawn” are amongst leader in the market. Zeenat Textile has designing, and printing departments. The bedding and fabric collection of Zeenat Textile are exported to South America,Paris,Yaman and much more European countries.

Zeenat Group by now is in textile cloth finishing and processing, textile spinning, color alkali industries and power plant. Hafiz Abdul Waheed and Muhammad Ahmed Madni the present Chairman of the Group, the two creative and courageous men, latter joined by second generation, making a blend of experience and modern business knowledge, managed the business growth and development with assistance of highly qualified team of professionals. Faith in Almighty Allah and in their own abilities & commitment to the cause, untiring efforts and leadership qualities of the family, established the group, which now stands amongst Leading Industrial Groups of the Country, under the Chairmanship of Hafiz Abdul Waheed.

Introduction of Finance Department

Finance Department is the backbone of every organization.The finance department is such a department where the financial matters are prepared. The main function of the finance department is to maintain the net cash inflows and net cash outflows. Here the financial objectives are described for at least three years in the future. The main financial objectives of the finance department is to increasing the gross sales, decreasing the cost of goods sold, increasing the gross margin, increasing the net income, return on investment and return on income.

Zeenat Textile Pvt Ltd. Page 1

INTERNSHIP REPORT

Account Department

The Account Department is responsible for the entire accounting process of the organization regarding the recording of transactions, designing the accounting system, preparation of financial statements and computer application to the accounting process.

Functions of the Account Department

A. The main function of the accounting department is to record the business transactions.

B. This department also designs the accounting policies.C. The department is responsible to maintain the books of

accounts.D. This department also prepares the financial statements

and offer these to the shareholdersThus by studying the above functions it is clear that the finance department is restricted up to the recording and maintaining the account data. The directors control all the financial matters. Chief Financial Officer Mr. Zulfiqar heads this department.

The set up of this department is as under:

Chief Financial Officer

Manager Accounts

Cash Manager

Accountant

Data Entry Operator

The Account Department is mainly divided into the following three sections:

1. Stores section2. Salaries and Wages Section3. General Accounting Section

My Activity in Account Department


INTERNSHIP REPORT

My activity in account department are to record the business transactions and also maintain the books of accounts.andn posting in computer software and also prepares the financial statements and reconcile the bank statement and the end of the each month.

CRITICAL ANALYSIS

During internship, I was done critical analysis of Zeenat Textile industries .In my point of view following factors is disturbed the functionality of any organization.

POLITICAL FACTORS

Laws, Govt. agencies, and pressure groups that influence and limit various organizations and individuals in a given society are included in political factors. Recent political changes will hopefully have a favorable effect on the economy during the next financial year. The sanctions, which were made by the Americans after the nuclear tests, have been removed. Now the exports of the country increased and expand to more foreign countries. In this way foreign exchange earnings increased. Govt. should have sound policies, which helpful in marketing the textile sector.

The Govt. must take care of textile sector and make good policies for the textile sector for exports and imports. The Govt. has favorable policies to encourage the exports of the country especially in textile sector.

ECONOMICAL FACTORS

The zeenat products are at the maturity stage and have positive image in local and international market. A present and future capacity of the products of Zeenat textile is forecasted to be good because of the designs which are made, up to the standards of new generation. The economic environment consists of factors that effect consumer purchasing power and spending pattern. In most of the international market the consumption of zeenat products are considered best in quality. Changes in major economic variables such as income, cost of living, interest rates and savings and borrowing patterns have a large


INTERNSHIP REPORT

impact on the market place. So before entering to the international market, the Zeenat textile must considered these things.

SOCIAL FACTORS

The cultural and social environment is made up of institutions and other forces that affect a society’s basic values, perceptions and preferences and behaviors. People grow up in a particular society that shapes their basic beliefs and values.

This is the policy of Zeenat textile that the products for exports are designed according to the beliefs and values of the international consumers. The products are made according to the changing lifestyles and liking and disliking of the customers.

TECHNOLOGICAL FACTORS

STIL has good financial resources and they are in a position to install the latest machinery and introduce latest technology in their production department. They have a ability to designs new products after the introduction of new technologies in designing and production department. Introduction of new technologies creates new markets and opportunities for Zeenat textiles. Companies that do not keep up with technological changes soon will find their products out dated and they will miss new product and market opportunities. Because of good financial resources Zeenat textile introduce new technology in all its departments.

SWOT ANALYSIS

Managers of ZTM always review the mission and goals and then they scan the internal and external environment to identify elements that influence the organization performance. To determine such elements SWOT analysis is conducted. SWOT is a method that helps managers identify the organizational strengths (S) Weakness (W) Opportunities (O) Threats (T)

STRENGTHS

1. Adequate financial resources2. Specialized in printing


INTERNSHIP REPORT

3. Have a diversified group of industries4. Good market image5. Competent management and workers6. Have a ability to compete with competitors7. In home facility of production8. Loyal customer

WEAKNESSES

1. Less chances of promotion2. Centralized decision making3. Salary package is not attractive4. Less motivation5. Not enjoy the economy of scale

OPPORTUNITIES

1. New market coverage2. New quality introduction3. Extension of stitching department4. Latest machinery installation5. Market trend analysis

THREATS

1. GST is a biggest threats2. Prices increases due to currency devaluation3. New entrance of quality conscious competitors4. Low price offered by the competitors5. Strong promotional activities to convince buyers

by competitors.

(1) Ratio Analysis

1.Liquidity Ratios


INTERNSHIP REPORT

(a)Current Ratio:

The current ratio denotes that how the current assets are related to current liabilities.it assures the liquidity of a company and shows the true and fair position of a company for the short period of time.

Current Ratio =Current Assets/Current Liabilitie

Company

C.R for year 2007

C.R for year 2008

C.R for year 2009

Zeenat Textile Mills

259668235 / 16542

=1.56:1 Ans

290045557/180934336

1.59: 1 Ans

3084 39100 / 221529574

=1.39:1 Ans

Comment: it is very important for a Zeenat Textile Mills to have a reasonable amount of current assets.Because they can be turned into cash in a now time.The current ratio of Zeenat Textile decreased in year 2009 due to rapid increase in liabilities as compared to liquid assets This is not a good sign for a Zeenat Textile Mills to face reduction in its current assets proportion due to increase in debts.

b. Acid Test ratio :

The acid test ratio is used to observe the liquidity of an organization in more appropriate way.It excludes the the inventory and all prepaid expenses from the current to create a fair picture for the investors and the shareholder’s to judge their predictions about the related organization.

Acid Test Ratio = Current Assets – Inventory – Prepaid Expenses / Curr. Liabilities


INTERNSHIP REPORT

Company

A.T.R for year 2007

A.T.R for year 2008

A.T.R for year 2009


259668235 – 0 - 5226469 / 165425481

=1.53 : 1 Ans

288158455 – 0 – 7628764 / 180933436

= 1.55 : 1 Ans

308439100 – 0 – 5605855 / 221529574

=1.36 : 1 Ans

Comment: The Acid test ratio for the Zeenat Textile was best in year 2008 due to healthy contribution in the current assets.The ratio moved down in year 2009 due to decrease in current assets which is a threat to to the liquidity of the Zeenat Textile.

(c)Working Capital:

Working capital is the resultant amount which we get By subtracting current liabilities for the current assets. It shows how the company has spare amount of surplus other than its routine consuming.The Working capital should always being positive

Working Capital =Current Assets – Current Liabilities

Company

W.C for year 2007

W.C for year 2008

W.C for year 2009


259668235 –165425481

= =94242754 Ans

288158455 – 180934336

=107224119

308439100 - 221529574

=86909526 Ans Comment:-

The presence of extra current assets provide the flexibility to the Company to run its operations smoothly and a sign of relief for The working capital of Zeenat Textile was highest in 2008 due to Presence of sound current assets.It decreased in year 2009 due to decrease in investments in its current assets.

(d) Sales to working capital ratio:

The sales to working capital ratio or the working capital turnover Ratio measures the efficiency of the company to utilize its working Capital


INTERNSHIP REPORT

in their sales.The high working capital ratio is not good because It reduces the liquidity of the company which is not worth for a Company.

Sales to working capital Ratio= Net Sales /Working Capital

Company

for year 2007 for year 2008 for year 2009


21201422/94242754

=0.224 times

30570540/107224119

=0.285 times

41121503/86909526

=0.473 times Ans

Comment:

The working capital turnover ratio for the Zeenat Textile was satisfactory In 2007 due to increase in Mark up earnings.In latter years the markup earnings improved rapidly due to which the ratio also moved around and sales exceeds the entire proportion.

(2)Leverage Ratios

(a)Time interest Earned Ratio:

The Time interest earned ratio describes how effectively the company Meets to its debt payments.It is calculated by dividing total earnings Before interest and the tax by the Interest payments.It should be high For a company.

Time Interest Earned Ratio = EBIT/Interes

Company



12313669/6360593

=1.93 Ans

15006838/8885898

=1.68 Ans

20160239/9624119

=2.15 Ans

Comment:


INTERNSHIP REPORT

The ratio was good in year 2007 due to control over interest charges Incurred due to the borrowings.The interest charges increased in Year 2008 but in 2009 the earnings tends to boost and the ratio wa highest.

(b)Debt Ratio:

The debt ratio make a look between the total liabilities to be paid for a Company against the total assets contained by the company in its hold The debt ratio should be as low as possible because it reduces the Leverage of the company.

Debt Ratio = Total Liabilities /Total assets

Company



300231481/320109723

=0.937:1 Ans

3443244578/366680198

=0.939:1Ans

388414353/418374331

=0.928:1 Ans

Comment:

The debt ratio of Zeenat Textile was average in year 2007 due to the presence of adequate assets which were exceeding the liabilities payables.In 2009 the investments and advances of Zeenat Textile increased due to which ratio moved low. (c) Debt to equity Ratio:

The debt to equity ratio describes the relationship between the total Liabilities and the shareholder’s equity in a company.it indicates the Soundness of the company long run policies.The 1: 1 ratio between debt And the equity proportion is considered normal or satisfactory but when It raises from 1 it is not good to obtain.

Debt to Equity Ratio =Total liabilities/shareholder’s equity

Company



INTERNSHIP REPORT


300231481/18408391

=1.630:1 Ans =1.630:1 Ans

344324578/20805117

=1.654 :1Ans

388414353/25891278

=1.5001 :1 Ans

Comment:

The debt to equity ratio for the Zeenat Textile was highest in 2008 due to less investments in shares than the ultimate liabilities paid by Zeenat Textile Mills.The investments increased in 2009 and ratio decreased but not to optimal level to be satisfactor

Equity Ratio = Total Equity/Total assets

Company



18408391/320109723

=0.0575*100

=5.75% Ans

20805117/366680192

=0.05678*100

=5.67% Ans

25891278/418397331

=0.0618*100

=6.18%Ans

Comment:

The total equity ratio for the Zeenat Textile is good in year 2007 due to significant amount of equity.It came a little down in year 2008 due to some slow increase in investments.In year 2009 it was best due to rise in shares investments

(3)Profitability Ratios:

Net Profit Margin:

The net profit Margin is the percentage return on the sales in respect To the net income for the Particular period.It should be higher and higher.


INTERNSHIP REPORT

Net Profit Margin=Net Income /Net Sales*100

Company



4076058/21201422*100

=0.19*100

=19%Ans

4156686/30570540*100

=0.13*100

=13%Ans

7122167/41121503

=0.17*100

=17%Ans

Comment;

The net profit margin for the Zeenat Textile was best in year 2007 due to optimal Net income on the mark up earnings.It came down in 2008 due to increased expenses but in year 2009 it rise again due to getting control on expenses.

Total Assets Turnover Ratio:

The assets turnover ratio is the percentage of return on total assets Against the Net sales for that particular year. It should be worthy.

Operating Income Margin:

The operating income margin describes the amount of the margin afte written off The direct expenses and the total factory cost. it should be efficient.

Operating income Margin=Operating Income /Net Sales*100

Company



INTERNSHIP REPORT


46349828/21201422*100

=0.214*100

=2.14%Ans

563633/30570540

=0.18*100

=1.8% Ans

10811077/41121503

=0.262*100

=2.62% Ans

Comment:

The operating margin for Zeenat Textile was very good in year 2007 due increased operating earnings.It came little down in year 2008 due to losing control on operating expenses and become best in 2009 due to making heavy earnings and reducing expens

Return on total Equity:

The return on the total equity describes the total income derived from the Total equity of a company.it should be high to generate heavy income.

Return on Total Equity=Net Income /Avg Total Equity

Company



4076058/18408391

=.22*100

=22% Ans

4156686/20805117

=0.199*100

=19.97%Ans

7122167/25871278

=0.2752*100

=27.52%Ans Comment:

The return on equity for the Zeenat Textile was good in year 2007 du to obtaining heavy income from the total equity of the shareholders it came down in 2008 due to increase in expenses but become best in year 2009 due to increase in shareholder’s equity and decreased expenses.

Gross Profit Margin:

The gross profit margin indicates the pricing strategy adopted by Company very well.but it could not explain the financial soundness Of the company.


INTERNSHIP REPORT

Gross Profit Margin=Gross Profit/Net Sales *100

Company



5953076/21201422*100

=0.28*100

=28%An

6120940/30570540*100

=0.20*100

=20%Ans

10571622/41121503*100

=0.25*100

=25%Ans

Comment:

The gross profit Margin for the year 2007 was the best due to efficient gross earnings and increased mark up income.It came down in year 2008 due to increase in expense barriers but rise again in 2009 due to obtaining good income from sales.

(4) Market Ratios

Earning Per Share:

Earning Per Share= Net Income/No. of shares outstanding

Company



4076158/646364325

=0.0063 Ans

4156686/646364325

=0.0064 Ans

7122167/711000758

=0.010 Ans

comment:

Earning per share for the Zeenat Textile is not good due to less investment in shares. It was discouraging in all of the years from year 2007 to 2009.


INTERNSHIP REPORT

Application of Class room learning in organization:

I have seen many of my classrooms learning to be applied in Zeenat Textile. Of course Zeenat Textile is a typical commercial organization having business administration disciplines i.e. marketing, finance, human resource management, information system, administration, management etc. As I got rotated in all the 3 major departments of Zeenat Textile, I came to see my concepts to be applied practically there.

Marketing Department:

I observed aggressive market capturing techniques practiced by the travel agents there, who are at the same time competing among themselves for gaining even a single customer.Similarly I saw the marketing officers there dealing with the ethical and unethical both kinds of tactics adopted my travel agents in their business with Zeenat Textile.There are number of possible distribution channels used by Zeenat Textile direct & indirect (travel agents).And for retaining the loyalty of their frequent buyers. FINANCE DEPARTMENT:In finance all the procedures were same as I have read and exercised in accounting & fiancé. Zeenat Textile’s annual report is updated on quarterly basis by Account officemanager. There is monthly bank reconciliation of Zeenat Textile on its accounts

HUMAN RESOURCE DEPARTMENT:HR department of Zeenat Textile completely coincides with the literature of HRM.Zeenat Textile is carrying out class-room, on the job, job rotation and simulative training However there is sometimes recruiting carried out on merit basis HR evaluation system is very good.Each and every transaction in Zeenat Textile is recorded both manually and electronically through their specially developed software systems

Learning:


INTERNSHIP REPORT

Throughout Six weeks training in Zeenat textile, we learnt so many practical things about the main function of the accounting department that how is to record the business transactions also designs the accounting policies to maintain the books of accounts and computer application to the accounting process and also prepares the financial statements and offer these to the shareholders Thus by studying the above functions it is clear that the finance department is restricted up to the recording and maintaining the account data.we also learnt about the pretreatment process.We study function and importance of pretreatment department and its procedure to do the production. We perceived about this organization that, it has a strong departmental structure and this is playing a vital role in the organization success. The pretreatment department can add up its efforts in the betterment of organization by reducing errors on consistent basis, as improvement is not a one day process it’s a slow day by day process.

Suggestion:

Following are the suggestions to further enhance and update the quality of the Zeenat printing &dyeing mills pvt ltd.

1.The immediate need is to modify or develop the new system as per demand of the time so that further requirements are met accordingly.

2.Made the system easy and end user friendly.

3.Improve the user interface and user training program in order to enhance end user productivity

4.Find out the new color and design in printing to compete in the market.

5.Recruit new and trained employees to decrease the work load on current employees.

6.Proper maintenance of the system.

7.Use the high speed technology which is basic need of a good information system.


INTERNSHIP REPORT

8.The staff must be properly trained and skilled. Secondly, the right person should be put to the right job so that the customer may be satisfied with the conduct and performance of the staff.

9.Appointment on key post should not be made on political basis because people appointed in this way are not only capricious minded but they also cast bad reflection upon the reputation of the organization.

10.Fair appraisal system must be introduced. Equality appeals to everyone while injustice discourages every qualified, hardworking and conscientious employee.

11.Every eligible employee should be rewarded according to his merit. All the above suggestions will earn a good reputation and goodwill for the organization.


Education

AHMED MUSTAFA INTERNSHIP REPORT ON ZEENAT (TEXTILE PVT) LTD GUJRANWALAL