1

|INTERNSHIP REPORT ON
NIAGARA MILLS (PVT) LTD.
Prepared by:
Name:

Muhammad Shafique

Class:

M.Com

Roll No.:

14292

Session:

2013-2015

Registration No.:

2013-GCUF-05926

COLLEGE OF COMMERCE
GOVERNMENT COLLEGE UNIVERSITY, FAISALABAD

4-Dedications:

I dedicate this to my Beloved Parents, Teachers (instructor), Finance and Accounts Managers
with their love, attention & efforts made it possible to make my internship report up to this point.
I also would like to dedicate my internship report to all other officials of the Niagara Mills (Pvt)
Ltd who gave me the all assistance to prepare and complete such an important report. I especially
dedicate this report to the Mills Manager and Manager HR (Head Office) of this organization and
authenticated individuals who allowed me to do this job in the organization. I spent my eight
weeks with this Organization to get the necessary information about the flow of work, evaluation
of financial statements and the nature of business which will be helpful in my future professional
career and life. I am very thankful to all and especially to my instructor for this cooperation who
will be the honorable to me forever.

5-Acknowledgement:
These are the numerous blessings of almighty Allah which is only the admirable in his
unimaginable existence and qualities in the world and magnificent guidance of Holy Prophet
Muhammad (S.A.W. M.) who is only the proficient to be followed to the success for both in this
world and after the death.
I am happy to honor my sincere appreciation to my teachers (instructor) and all those
Niagara officials who guided me by their enthusiastic, sympathetic and progressive attitude and
supervision. I feel a huge debt of passionate guidance for their cooperation and valuable
instructions during my internship period in Niagara.
I would like to thank all Officials and Head of Departments of Mill like Mills Manager,
Deputy Manager Accounts and Admin, Deputy Manager Audit, Manager Store and Inventory.
I would also like to thank all Officials and Mangers at Head Office guided me very well
in all aspects to complete my internship at Niagara.
At last I would like to again thank to my parents and instructor by their prayers, attention
and precious instructions I am able to complete my internship.

6-Executive summary:
Pakistans textile industry products are famous in the whole world due to the quality and
variety products. Niagara Mill (Pvt) Ltd is one of the famous export and competing units in
Pakistan and especially in Faisalabad. Niagara Mill exports dyed, printed cloth in rolls form and
has also its own stitching unit near Head Office from where it also exports made ups like kitchen
accessories, table cloth, sofa cloth, Parda cloth, bed sheets, fitted sheets, napkins, bed spreads
and other miscellaneous made ups as per buyers demand. I also try to collect complete list of
companys product line in this report.
I gained knowledge of processing technology (process and procedures of production), process
costing and financial analysis at Niagara Mills (Pvt) Ltd. I also collected the financial statements
of Niagara for last three years and compared the companys performance over these three years
by using ratio analysis like vertical analysis, horizontal analysis, industry and trend analysis etc.
I collected scanned financial statements of these three years and attached with this report and
also compared it with its one competitor through industry analysis and also attached a scanned
copy of that company for reference.
I concluded that although the Niagara mills have the handsome profit trend but it is less lucrative
to its competitor such as in the year of 2014 the profit of this organization was 3.43% of its sales
but the profit of its competitor is in 2014 5.71% of its sales.
SWOT analysis of this organization also done in this report, the list of the future plans of
this company also mentioned after the SWOT analysis. I also gave some of the conclusion and
recommendation to improve the company profitability and the financial strength of the company.
References and source of data used in completing the internship report also given, in annex
section I also provide the scanned copies of all statement and report which were helpful to
complete this job.

7-Table of Contents:
1. Title Page 01
2. Letter of Undertaking.. 02
3. Scanned internship certificate . 03
4. Dedications.. 03
5. Acknowledgement... 04
6. Executive summary.. 05
7. Table of Contents. 06
8. Brief introduction of the organizations business sector.. 08
9. Overview of the organization... 09
a) Brief history. 09
b) Nature of the organization... 10
c) Business Volume 11
d) Product lines of the organization. 12
e) Competitors. 14
10. Organizational structure.. 16
a) Organizational Hierarchy chart 16
b) Number of employees...... 17
c) Main office....... 18
d) Introduction of all the departments.. 19
11. Plan of your internship program. 37
a) A brief introduction of the branch where you did your internship 37
b) Starting and ending dates of your internship. 37
c) Names of the departments for training duration training.. 37
12. Training program 38
13. Structure of the Finance Department.. 42
a) Departmental hierarchy 42
b) Number of Employees Finance Department 43
c) Finance & accounting operations. 44

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14. Functions of the Finance Department. 44
a) Accounting system of the organization 44
b) Finance system of the organization.. 45
c) Use of electronic data in decision making 45
d) Sources of funds 46
e) Allocation of funds 46
15. SWOT analysis of organization in the business sector.. 47
16. Conclusions.... 49
17. Recommendation... 50
18. References & sources used. 50
19. Critical analysis... 51
a) Financial analysis.. 51
1) Ratio Analysis 51
2) Horizontal Analysis... 59
3) Vertical Analysis... 62
4) Industry Analysis.. 65
5) Trend Analysis.. 69
b). Future prospects of the organization. 73

8. Brief introduction of the

organizations business sector.
Pakistan is an agricultural country and Cotton Raw and Cotton Made ups are the major
exports of Pakistan. Textile Sector is playing an important role in the growth and development of
Pakistans Economy. Niagara Mills (Pvt) Ltd is one the leading textile industries who are playing
a vital role in countrys GDP and Employment.
There were 16 Textile Units at the time of independence of Pakistan and only 12 were
running at that time. In 1957 these Units were increased up to 70 by industrial development.
Now more than 600 Textile Units exist, out which more than 500 Units are in operation. Textiles
Export Revenue contributes a large share to Pakistans GDP. Cotton Textile Process contains
various processes including Cotton Ginning, Spinning, Weaving, Processing and Finishing,
Stitching for made ups etc.
Niagara has not its Spinning Unit, it purchases yarn from the market and make the grey
fabric at its Weaving Unit located at Khurrianwala, Faisalabad. Some times it has also to
purchase Grey Fabric from the Market or Weaving Units. Then it sends the grey fabric to its
Processing Unit for processing i.e. Bleaching, Dyeing / Printing and Finishing. Then Some
Finished Fabric is Packed in Bales shipped/exported directly to the Foreign Countries and Some
Finished Fresh Fabric is sent to its Stitching Unit located at Kashmir Road, near Head Office,
Nishatabad Faisalabad for conversion in Made Ups for Shipments or Export as per Buyers
requirements.

9. Overview of the organization

a)

Brief history:
Niagara Processing Unit was come into being in 1986 by the name of Minaco Fabrics

owned by the old owner and some foreign investors. The head office of this organization was
situated at Block No.6, Shahdin Building, Shahrah-e-Quaid-e-Azam Lahore Pakistan whereas
the factory is situated at 03 km Jhumra Road, Khurrianwala, Faisalabad.
This Minaco Fabrics was auctioned by Habib Bank in 1999 being insolvent of the owners
of the organization and then it was purchased by Mr. Sheikh Imran the current C.E.O. of the
Niagara Mills (Pvt) Ltd. He changed its name as Niagara Mills (Pvt) Ltd. Mr. Sheikh Imran is
very hard working and brilliant man because Niagara Mills (Pvt) Ltd is running and growing
very successfully since 1999 by his great efforts, guidance and control.

Now the head of this

organization is located at Kashmir Road, Nishatabad, Faisalabad, Pakistan.

The aim of Niagara is to serve its customers/importers by the top class quality products. It
is the reason that Niagara has achieved an honorable name among most of the leading textile
units in Pakistan. Niagaras strong sense to adopt latest technical innovations is also a key factor
of its vertical growth.
Niagara also has earned a valuable name in the international market due to its dealings, services
and customers satisfaction. Niagara is an integrated structure of state of arts, set up of
machineries and highly skilled & experienced manpower.
They produce complete range of textiles from top quality fabrics to high profile made ups
& textiles and export to Europe, USA, South & North America and Russia etc. They express the
blend of their most sophisticated tools, skilled & dedicated work force of over 1500 employees
to all Niagara groups of industry and quality assurance system results in finest quality fabrics &
textile products.

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b) Nature of the organization

The nature of the Niagara Mills (Pvt) Ltd is that it is a Private Limited Company. The
liability of the partners of this organization is limited up to the capital invested by them. Mr.
Mian Imran Ahmad is the Chief Executive Officer of this organization. He has had his share of
luck on many occasions in life and has been awarded the best exporter award at the Faisalabad
region in 2012 by the Government of Pakistan in past near. Other Board of Directors is Mr. Mian
Qais, Mr. Dr. Afzaal Ahmad.
Niagara is a textile unit having the Weaving, Bleaching, Dyeing, Printing and Stitching
Units facilities. They acquire the raw cloth as grey sometime from grey supplier or sometime
from its own weaving unit Niagara Weaving (Pvt) Ltd which is also situated at Khurrianwala
Faisalabad, and then Process for bleach, dye, print and stitch the fabric as per the customers
requirements. Customer is the party for whom the fabric is needed to be dye, bleach, print and
stitch.
Finished Fresh Fabric is exported or shipped in the form of Rolls from Processing Mill
directly and some fabric is sent to Stitching Unit Faisalabad where the fresh fabric is converted
in Made Ups as per Customers requirements and Made Ups are exported or shipped from
Niagara Stitching Unit.

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c) Business Volume
Niagara Mills is not only respected in the textile sector Pakistan but it is well known at
international level because of its strong commitment to Total Quality Management and customer
satisfaction. Niagara Mills is a medium size organization but its average earning is more than 60
millions per year. Authorized share capital of this organization is Rs.300 millions divided into 30
million shares of Rs.10 each. Capital proposed to be raised equity capital Rs.100 millions and
has the 10 billion shares of Rs.10 each.
The growth of this organization is constantly increasing every year and The Niagara Mills
got the maximum orders for processing from abroad as well as from the local market in Pakistan.
In the year of 2012 Niagara had made the total sale which was two billion, four hundred ninety
one million, one hundred eleven thousand and four hundred seventeen rupees as (2,491,111,417
rupees). It is the highest and record production in the history of Niagara Mills. Besides, this year
every industry in the world has to face a lot of crises and challenges due to some economical
problems in different countries. Thats why the usage and the demand for every thing has been
decreased. However the Niagara was succeeded in getting the maximum orders as compared to
other competitors industry in the year of 2013.

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d) Product lines of the organization:

Niagara Mills producing a complete rang of high quality of products for its customers in
Pakistan as well as in the other countries such as America, Canada, and England etc. Niagaras
products are very popular in these states due to the total quality management and continuous
improvement to achieve the strategic, operational and tactical goals. Product line of Niagara
Mills consists of the following:

1) BEDDING CATEGORY:
Sheet sets (Sing/Double Bed Sheets, Fitted Sheets etc)
Quilt cover sets
Bed spreads
Comforters
Bed skirts
Oxford pillow cases
Blanket covers
Mattress Covers
Sleeping bags

2) CURTAINS & ACCESSORIES:

Embroidered curtains
Pencil pleat tape curtains
Pinch pleat lined & unlined curtains
Tab top & rod pocket curtains
Assorted pelmets and window dressings
Oxford cushion covers
Frilled and piped cushion covers

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Frilled, piped and pleated tie backs

3) TABLE, FURNITURE & KITCHEN ACCESSORIES:

Sofa Covers
Coushons
Tea cozy
Table mats
Table cloth and napkins
Aprons
Kitchen gloves
Pot holders
Chair pads with circle tacks
Couch cove

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e) Competitors
Whether we are aware of it or not, we are surrounded by tough competition. Competition
is every where, wherever you go, you have to facing huge and tough competition. In every field
or profession we have to face many competitors such in Education, administration, Government
Sector, in business leadership, in human service providers, health care professionals, finding
better jobs and in all kinds of businesses, industries and Govt. Sector. Just like to above the
Niagara Mills also facing the strong competition in Pakistan as well as in abroad.
Producing goods is not enough, it does not mean that you are the successful one if you
have produced well, you must also have to keep it in your mind how it will be sold and how the
actual cost can be recovered and how to compete with its competitors and how the organization
can earn profit and can maintain profit at increasing level. Due to the strong competition
everyone has to think about producing before producing effective products. Any how, there are
so many processing units in Pakistan but here we undertake some of the following competitors
close to Niagara Mills:
Some Very Close Competitors to Niagara:
Al-Veera Textile Mills (Pvt) Ltd Sheikhupura
Bismillah Fabrics (Pvt) Ltd Faisalabad
Haroon Textile Mills Ltd Faisalabad
Abdul Rehman Corporation Ltd Faisalabad
Kamal Textile (Pvt) Ltd Khurrianwala Faisalabad.
Five Star Textile (Pvt) Ltd Faisalabad
Zafar Textile (Pvt) Ltd Faisalabad
Noor Fatima Textile (Pvt) Ltd Faisalabad
Gohar Textile (Pvt) Ltd Faisalabad
Sadaqat Textile (Pvt) Ltd Faisalabad
Al-Rehmat Textile (Pvt) Ltd Faisalabad
MSC Textile (Pvt) Ltd Faisalabad etc.
Kamran Textile (Pvt) Ltd Khurrianwala Faisalabad.

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Chenab Textile (Pvt) Ltd Faisalabad.
Nishat Textile Ltd Faisalabad.
Faisal Fabrics Khurrianwala Faisalabad.
Amtex (Pvt) Ltd Faisalabad.

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10. Organizational structure:

a. Organizational Hierarchy chart
Chief Executive Office
Managing Director

Mills
Manager

GMP

Internal
Audit

PPC

M. Admin

Printing
GMO

D. Studio

Dyeing

Engraving

Bleaching

M. Workshop

Finishing

Boiler

Laboratory
Q. Control

Purchase

Grey

M. Store

Folding

IT

Inspection

Accounts

S. Room

Electrical
Sub. Stores

T. Office

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b. Number of employees
Niagara Mills is medium size entity and has the maximum sanctioned strength of
employees is 450 employees. These are the permanent employees of this organization whereas
150 employees are working under different contractors such as Loading & unloading, grey
stitching, checking and folding and rolling and bailing etc. I got the data about the number of
employees as well as their earned salary from January 2013 to December 2013 for every month
in regard to total employees of this organization for the mills not for head office.

Sr. No.

Month

No. of Emp.

Salary Amount

January 2013

421

3,389,487

February 2013

434

3,417,220

March 2013

442

3,593,293

April 2013

444

3,305,763

May 2013

445

3,474,045

Jun 2013

436

3,073,522

July 2013

393

2,932,220

August 2013

400

3,578,891

September 2013

378

3,372,332

10

October 2013

376

3,298,513

11

November 2013

343

3,126,465

12

December 2013

355

3,151,072

Avg. Per Month

406

3,309,402

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c. Main office
The main office of the Niagara Mills is situated at Kashmir Road, Nishatabad Tehsil &
District Faisalabad. The respected CEO of this organization attends the main office at daily basis.
Since it is an exporter firm therefore all kind of dealing in abroad taking place at main office,
Most of the raw material such as grey, dyes & chemical, stationary and others purchase taking
placed at main office. Following departments are working at head office:
Admin & HR Department
Procurement Department
Purchase Department
Marketing Department
PPC Department
Accounts Department
Banking & Payment Department
Audit Department
IT Department
Export Department
Legal Account Department
Sampling Department

Front View of the Main Office

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d. Introduction of all the departments

Niagara Mills is one of the largest processing facilities of Pakistan with monthly capacity
of 3 million meters with an array of modern machines, it is the geared to meet the ever increasing
the demand of their client. Niagara processing unit has been divided in to different section to
facilitate uninterrupted process flow and to insured quality control at all stages almost 75%
chemical and dyestuff being used is of European origin. An independent quality control
department with a strong backing of fully equipped laboratory insured quality standard at all
level. The processing plant has also been awarded ISO 9001 Certification which is another
achievement in this regard by Niagara Mills (Pvt) Ltd.

1) Administration Department:
Administration is a key department of every organization. Administration department in
Niagara mills make arrange for the all new appointments through advertisement, conduct
interview and select the right people for right jobs according to the company and concerned field
requirement. Sometime they hire some people who may less skilled or less trained, the
administration department are fully responsible to arrange some training programs to give a right
idea how to perform and how to combat with challenges. They deal in all kind of human
activities i.e. health & safety, compensations & benefits as well as accommodation to them. They
perform as company representative to all external issues and all civil or government departments
such as civil defense, Employees old age benefits institution, Punjab social security institution,
drainage etc. They also deal in all kind of sues filed in the name of the company.

2) Security Department:
Security department play a very important roll in the Niagara Mills. They are responsible
to keep an eye on all security matter in this organization. The security guards are
appointed at different check posts to view the every misconduct in the organization.
Beside this at least five number of security guards including security incharge and
security supervisors are fully alert at the main gate of this organization for 24 hours. They
keep the records for every person coming to mills and for every person going out from
the mills. They also maintain the record of all purchased items and others arrivals at mills
such grey as raw material and all kind of shipment sent to dry port to export other
countries. I found there that the security and intelligence system is very efficient in their

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job. They are well educated and maintain their record very well. They maintained
different type of books and reports such as Inward Gate Pass, Outward Gate Pass etc.

3) Time Office Department:

Time office department is another key department of this organization. In simple words
we can say that without the existence of time office no organization control the salary & wages
system effectively. Employees complete record is maintained at this department such as
employees personals file raised at the appointment stage having complete data about the name,
fathers name, qualification, previous work history, date of joining, date of confirmation as well
salary package etc.
They have the swab attendance card system at time office, an identity card issued to
every permanent employee of this organization. Every employee makes swab his card at this
machine system when he come on duty and also swab out his card when he leave from his duty.
So all these data about wages hour and overtime hour are maintained at time office in software
which is named as PMS stand for Payroll Management system. Payroll management system is
an oracle based system. All kind of information about salary and overtime as well as the other
information are posted in this software at continuously basis.
At the end of month a salary sheet raised from the time office department and then
forward to accounts department and then audit department. Audit department check the salary
sheet according to audit point of view and after complete checking and satisfaction forward the
salary sheet to account department to make the salary payment. The same procedure is done for
the monthly overtime payment. Following are the main reports conducted from payroll
management system:
Designation Wise Strength
New Appointment
Employees Information
Employees Addition & Deletion
Employees Leave Details
Absent Report
Leave Availed Summary
Leave Availed Balance

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Leave Details (Leave Wise)
CPL Detail
Gratuity Report
Bonus Report
Gift Detail Report
Increment Wise Detail
Hajj Detail Report
Monthly Salary Sheet
Bank Salary Sheet
Employees History
Attendance Report
Leave Encashment
Monthly Overtime Report
EOBI Detail Report
Social Security Contribution Report
Full & Final Settlement Report etc.
This is the main view of the Payroll Management System software of Niagara Mills (Pvt)
Ltd.

4) Sample Room:
The Sample Room department also exists in Niagara mills. The sample of all design
fabrics produced in Niagara mills are kept at sample room department. Fabrics sample are in
hanger shape and five pieces of sample are dispatched along with every design shipment. In
sample all design sample are racked according to their design and quality specifications. Every
sample piece has a chit on it having the Printing order no, quality, width and meter piece etc.
They are directed by higher management, sometime by Production Planning and Control and by
marketing department to send a particular sample, when they need to show a sample to buyers.
The sample room officer looks out the concern sample and dispatch accordingly. Sampling is a
key important job to attract the buyers attention, if your sampling would not good enough then
how could you become the market leader in your particular field.

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The front view of the sampling software is given below:
The sample room department is responsible to prepare the sample in hanged shape as
well as in five or two meters piece of all design which are running in the mills at daily basis and
kept these sample for the connivance in future. The sample room maintains all these data in
software named as SSS stand for Sample Stock System. All sample stock received at daily
basis is posted in sample receiving form and issue stock posted in issuance form. SSS software is
also oracle based system, it conduct different report which are as under:
Design Wise Receiving Report
Rack Wise Report
Party Wise Receiving Report
Printing Order Wise Report
Date Wise Issuance Report
Design Wise Issuance Report
Party Wise Issuance Report
Date Wise Issuance Report
Quality Wise Stock Report
Design Wise Stock Report
Dyed Stock Report
Bleach Stock Report
Print Stock Report

5) Main Store Department:

Main store department is another key department of the Niagara mills. Main store is used
to store the all kind of mills purchase and issue them to appropriate department in time
afterward. Mills purchases are received at mills gate, the security incharge check these items
along with the challan sent by purchase department and then sent to the main store department.
The main store received these purchase and store there, and then they call the concern
department by whom its demand raised. They come to main store and after checking these items
they make reject or accept remarks, if the remarks as accept then it would issue to them
otherwise in case of rejection, the main store dispatched back these purchases to the supplier.

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At the end of every monthly audit is done by the head office audit team which may
comprise of 15 to 20 internal auditors. They get check all items physically according to the stock
reports and then make report to Chief Executive Officer of the Niagara Mills at head office
Faisalabad about their audit activities at mills.
The main store of Niagara mills has very strong computerized system of inventory. They
perform very well and there is no any lose handling of stock. They control their inventory by
using inventory software named as Purchase Inventory System PIS.
The main view of Purchase Inventory system is given below:
Purchase Inventory System is very efficient system and conducts so many reports. Following are
the main reports subjected in this software:
Store Indent / Demand Report
Purchase Order Report
Inward Gate Pass
Inspection Note
Goods Receipt Note
Issue Note
Material Return Note
Rejection Note
Material Return Note Details Report
Free of Cost Items Report
Transaction Tracking Report
Purchase Order Tracking Report
Item Ledger Report
Slow Moving Items Report
Item Issue Report
Item Purchased Report
Comparison Report
Date Wise Item Consumption Report
Stock Report etc.

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Purchase Inventory System of Niagara is an oracle based system and is in working very well
according to the requirement of the company.

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6) Grey Department:
Grey department is the basic department of this organization. All raw cloth to be dyed, bleach
or printing are stored at this department. Grey staff is responsible to receive these raw fabrics at
first arrival and store them at grey department according to quality wise separately and maintain
the stock accordingly. They issue these raw fabrics upon the approval by the Production Planning
and Control department lot wise. Niagara Production Control (NPC) is an oracle based system
which is used to control the gray management system. All kind of fabrics which are received at
daily basis are posted to this system and then all issuance are also posted to this system, so this is
how they maintain the stock of grey cloth at Niagara mills. These posting comprise of many
things such PO no, quality, width, quantity etc. Depending upon these data feeding the NPC
conduct the following report:

PO Wise Grey Ledger

PO Wise Grey Ledger (All)

Date Wise Grey Receiving

Date Wise Grey Issuance

PO Wise Grey Receiving

PO wise Grey Issuance

Lot Issue Report

Grey Stock etc.

7) Accounts Department:
Accounts department is a very important department every organization. Accounts
department of Niagara mills is responsible to maintain the higher level of accountancy. All
kind of accounts ledgers are maintain at this department. All kind of cash receipts and cash
payments or other cash activities are done at this department. They also maintain the daily
cash book of Niagara mills which is duly signed by Managing Director of this organization.
They prepare the processing bills for all fabrics production according to the agreed rate.
The main work of accounts department of this organization is to make ready payment for all
kind of mills purchases. For this procedure they collect all relevant documents from different

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department such as IGP from Main gate, GRN and Inspection Note from Main Store, Lab
Report from Laboratory in case of dyes & chemical, to complete the store purchase voucher
in which they credit the supplier account by the amount of supply made. Salary and overtime
also checked by accounts department at monthly basis.
All kind of petty voucher or payment are also prepared and checked by account
department. All kind of documents prepared by accounts department are forwarded to audit
department for final checking. All documents are considered final only after complete
checking of audit department. Accounts department also using the oracle based computerized
system Financial Accounting System (FAS). All kind of transactions are made through
FAS. FAS conduct many reports which are as under:
Day Book
Daily Voucher Status
General Vouch Type
Store Purchase Voucher
Account Ledger
Cash Receipt Voucher
Cash Payment Voucher
Cash Book etc.
The main view of the Financial Accounting System is given below:

8) Audit Department:
The audit department is an independent department of this organization; they are working
only under control of CEO and Managing Director of Niagara mills. They have strong check on
all financial activities as well as the other activities at mills. They have the view option of all
computerized management system at their computers. All kind of payments are done after
complete checking and verification by audit department.
At daily basis the audit department checks the activities of different department at
different point of view. For example the audit person checks the all activities at main gate of the
mills such as all kind of receiving, all kind of dispatches etc. Audit person also check the all
purchase physically at main store and get inspected their rate verification. All kind of activities at
Time Office also checked and verify by audit department. All kind of loadings are done in the

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presence of audit department. Audit is a supreme authority after or in the absence of the directors
of Niagara mills.
At the end of every month they audited the all departments of this organization such as
main gate, main store, sub store, grey godwon, sample room, accounts, engraving, time office
and production department etc. They also conduct audit at quarterly, semi annual and annual
basis. After their audit activities they prepare the audit report of all activities in case of any
negligence found during audit and forward to CEO of the Niagara mills

9) Bleaching Department:
Sometime cloth is bleached according to customer requirements. Bleaching helps to
remove impurity from the cloth. For this purpose singeing machines are used and cloth is
bleached in the following steps.
1. Desizing
Sometimes cloth is desized according to production requirements. It is used to remove the
grey fabric stiffness of the cloth that helps in bleaching for easy washing.
2. Scovring
It is done in bleaching machine, it helps to remove artificial spot like oil, grease etc.
3. Brushing
It helps to remove thread.
4. Singeing
It removes pills by temperature.
5. Chemicals tanks
It is used to remove oily and stain spots on cloth.
Fabric preparation is crucially important, as the successful out come of all subsequently
operations is dependent on it. Niagara Mills always try to reduce the natural impurity of cotton
and to impart good hydrophilic properties, this section has two singing machines and two
modern open with width bleaching plants, to give more luster and strength, one chain less
mercerizing machine is also in operation. Bleaching section is preparing input fabrics for dyeing
and printing section. This section also bleaches bacteria killer fabric for Japanese hospital linen
and fire retardant low pill fabric for contract textiles. At the end cloth is raped on a batch, and
then bags are used to prevent air penetration. Before the cloth forwarding to next department
batch number, quantity, meters of cloth are written on a card and stocked with batcher.

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Machinery Detail of the Bleaching Section:
Singeing Machine No.1
L-Box Plant No.1
Drying Machine
Singeing Machine No.2
L-Box Plant No.2

10) DYEING Department:

Niagara Mills provides quality piece died fabrics in heavy twills to some of the world
leading brand names like Gap, Old Navy, Banana Republic and sears, this has been made
possible by using high quality fabrics from the mills own weaving units and by using expensive
dyestuffs, Highly trained technicians keep a close check on all stages of production depending
upon specifications, dyeing in reactive, disperse, pigment. Vat and sulphur is possible.
To further enhance their existing dyeing capacity of 1,000,000 meters per month,
Niagara mills are intending to install the further dyeing machines to their dyeing department
which is another proficient step to their success. This would certainly give them an edge over
their competitors and would be welcome addition in the ever-changing apparel fabric market. It
will help Niagara mills limited to improve its market access and consequently profitability.
Following files are maintained in dyeing section,
Training files
Dyeing files
Washing file
Lab to bulk file
Sample received file
Singeing file
OK for curing
Sample status
Sample letter
Shortfall file
Daily stock file
After curing file

29
Folding return file
Daily attendance register
Water fall card
Machinery Detail of the Dyeing Department:
Drying Machines 115
Open Jigger Machines 110
Pressure Jigger Machines 112
Jumbo Jigger Machines 114

11) Design Studio Department:

The state of the art design studio, known for producing transparencies of the highest
quality, accommodates a STORK STK image 3000,a CST Ramset silicon graphic and STORK
Drum scanner plotter, along with a team of convention manual color separation artist is also
maintained.
Design studio is a sub department of processing. Here cloth design is made which would
be then directed to Engraving department for exposing the design over printing screens. Tracers
are there to trace out different pattern and design of cloth. For each type of color different films
are made. Different trace papers that are used at Niagara Mills are of Kodak and AGFA. For each
color separation, there are positive and negative films. Positive film is sent for processing. Ink is
used to fill scratches and unwanted graphics.
Tracing table is used to examine designs and it helping tracing of design. Germany
waterproof ink is sued to avoid the ink expansion. Digital design studio is also complementary
department of design studio where designs are made on computer program using advanced
information technology.

12) Engraving Department:

Technology advancement in the field of rotary printing necessitates upgrading the preprint line-up. Niagara Mills is reputed for the most efficient use of the STORK engraving
systems for manual exposing as well computerized exposing. They are well known for halftone
work in single step designing.
Living up to this reputation, they have recently added to their line lf production the
ROTARY WAX JET With exposing resolution at 1019dpi and a screen boundary of 640,820

30
and 914mm. Engraving at this high resolution with digital technology enhances the print quality
to a great extent and reduces the existing human error margins to the minimum level.
Engraving department not only responsible for exposing the printing design but they are
also perform stripping of the exposed screens. Sometime most of the designs kept in engraving
store do not expected to repeat for production in future, therefore they are instructed to strip
these screens instead to raise the demand for new purchased screens. Stripping is the process of
washing screens using different kind of chemicals. After stripping process, the stripped screens
are again ready to be exposed a new designed on these stripped screens. After exposing the
appropriate design according to the Printing Order, exposed screens shifted to printing
department. Printing department put these screens on the Rotary Machine and start printing.
After completing the printing order quantity, screens are washed by printing department and send
back to engraving department to keep it store up to the next order for that design.
Engraving department also responsible to maintain the screens store and their record,
there are five screens store under the Engraving department. According to recent physical
counting there are the total 13185 no screens at engraving screens store. It includes the different
size of screen such as 1850/640/40, 1850/640/125, 3050/640/80 and 3050/640/125. The fist
figure in these sizes shows the screen length of the screen, second figure shows the repeat or
boundary of the screen and the last figure shows the meshs specification.

13) Printing Department:

Printing department is a very important section in Niagara Mills. It is another step to
upgrade the existing machine mix. Anew 3.2m (126) Regina printing machine, with a facility to
print 16 colors has been installed. This machine with UNICA system successfully combines
production and quality performance at the highest possible level in rotary screen-printing.
Niagara Mills has a well-trained work force to print extremely intricate and complex
halftone designs. Monthly printing capacity of this section is about 203 million meters. Besides
conventional printing in pigment and reactive dyes, printing in puff effects, resist and discharge
dyestuff is also done in Niagara Mills.
Machinery Detail of the Printing Department:
Printing Wider Rotary Machine (color)
Printing Wider Rotary Machine (operation)
Printing Narrow Rotary Machine (color)

31
Printing Narrow Rotary Machine (operation)
Ager Machine (Backing)
Printing Sampling Machine
Following files are maintained in printing department of Niagara Mills,
Process sheet
Job description specification
Audit report
Assessment file
Purchase order
Work instruction
Staff document
Worker document
Reactive color document

14) Finishing Department:

Offering optimal final fabric quality and handle all complexities which effect the quality
of the printed fabrics. Recently this section has been equipped with a new generation / Babcostarters. This machine combines tried and tested drying technology with innovative electronic
control system ensuring absolute reproducibility of fabric qualities and full documentation on the
quality control checks.
Besides offering normal finished, this section also full fills the demands for scotch guard
protection for soil release and resist finish, peach skin affect finish, Fire Retardant finish, water
proofing, anti crease and easy care finish,
Machinery Details of Finishing Department:
Stenter Babcock 130
Stenter Monforts 110
Stenter Monforts 95
Stenter Monforts 73
Stenter Krantz 95
Stenter Krantz 73
Sanforizing M/c monforts 73

32
Raising for Flannel sucker &muller118
Emerizing M/c sucker & muller 71
Calenders Ramish 110

15) Quality Control Department:

Quality control is an independent section which monitors all production operations to the
required levels of the local as well as international market. Quality control department is fully
responsible for achievement of the quality in all Niagara product line. All production made at this
organization are inspected by quality inspectors in quality department. They are highly skilled
and trained in their field and point out all defects in fabrics and communicate to the production
experts so that these defects not repeat again. These defects are occurring due to so many reasons
which are pointed out at inspection stage. There are huge numbers of defects which may occurs
but following are the some defects are as under:
Hanging Thread
Dead Cotton
Hard Singeing
Poor Pilling
Small Pin Hole
Poor PH
Poor Tagwa
Unequal Salvage
Fluff
Side Cut
Stanter Head Up
Stanter Unequal Dye
Tenting
LCR
Chamber Friction
Color Spots
Blanket Lascar

33
Color Lascar
Design Flushing
Design Out
Booing
Squeing
Fabrics Heat Up
Mandi Stain
Unequal Weight
Calander Salvet

Quality Control Policy:

Niagara mills limited are fully committed to move things in direction of Total Quality
Management. Their prime Objective is to producing products to the entire satisfaction of buyers.
For this they plan thing ahead, fresh ideas are developed, make more effective use of time, put
the right man in the right place, and keep on updating the skills of the employee by training.
In the factory, in order to motivate employee and workers toward quality management,
many billboards are hanged containing the various statements like,
Quality has no finish line
Quality is degree of excellence
According to Juran Quality is fitness for use
Quality ensures our future

Procedure of Conducting Quality Control:

Quality control procedures are carried out at every stage during production. From
purchasing of material to cutting and stitching right till folding and packing of the final product,
each aspect is scrutinized and controlled to the international quality standards.

16) Niagara Laboratory:

Niagara Mills has their own lab which is fully equipped with advanced technology to
conduct all relevant tests. The staff not only keeps control of the bulk production, but also
involved in standardization of process routes and operating procedure.
Niagara mills limited has not only build an international standard quality control to meet
customers satisfaction but also to improve their own product quality. Various type of test is

34
conducted at this quality control lab to improve the quality of products and to meet customer
requirements. All dyes and chemicals are first tested at this laboratory and then the lab
professionals prepared the lab report for each and every dyes and chemical and demonstrate their
results along with accepted or rejected remarks. After complete analysis, these dyes and
chemicals are allowed to use in process. Beside all other fabrics test are conducted at this lab.
Following are the main tests that are conducted in lab,
1) Counter tests
To count warp and weft
2) Count Glass
To count ends and picks
3) Weight
To measure weight of cloth
4) Cock meter test
It examines dry rub and wet rub
5) Pilling test
It is used to test pilling of cloth
7) Durra test
It is used to examine fastness of cloth
8) Auto Wash
It is used to examine change in shade
9) Vasctor
It is used to examine shrinking of cloth
10) Tumble dryer
This test is used to examine dryness of cloth
11) Padder
It is used to examine matching and finishing of cloth.
12) Curing
It is used to examine shade of cloth
13) Light box test
It is used to examine fastness of light on cloth.
14) Presser

35
It is used to determine pressing of cloth.
15) Visco meter
It is used to measure thickness of printing past.
16) Inspection table
Here warp and weft and other type of fault are examined.
17) Chemical analysis
It is used to examine acidity.
18) Spectro photo meter
It is used to examine shading.
29) Perma meter test
It is used to measure passage of air from the cloth.
These types of tests are conducted keeping in view market requirements and customer
demands.

17) Folding Department:

Folding department is the final and ultimate department of this organization. All fabrics
produced at Niagara Mills are checked and packed at this department. Fabrics folding and
packing is done in different shapes such as pallet packing, than packing, roll packing, bale
packing and card board than packing. At folding department all produced fabrics are categorized
as fresh cloth, fresh sample, and B grade, cut piece and miss print. All fresh cloth and samples
are exported to abroad while the B grade, cut piece and miss print are sold at local market of the
Pakistan. Fabrics folding are done according to the order specification which is mentioned in
printing order sent by the Marketing department to Production planning and control department.
Then all kind of packing are done under observation of the production and planning department
as well as shipment of the consignments.
All record and details of processed fabrics posted into the Niagara Production Control
System (NPC). NPC is software in which all information or detail about fabrics status has been
posted at every stage such at grey issue stage, at dye or bleach status, printing and finishing
status as well as folding stage. Based on all these data feeding the NPC offer huge number of
output reports on different departments, following are the main report of folding reports
conducted by NPC:
Daily Folding Report

36
Daily Dispatch Report
Folding Stock Report
PO Wise Packing Dispatch Report
Date Wise Packing Summary Report
Order Complete Packing Report
In folding department there are many number of big table on which cloth checked and they found
the fabrics faults to categorize the fabrics according to their finding. In folding following
machine are installed:

18) Production Planning & Control Department:

Production planning and Control department is responsible o control all production
priorities and to load machine on day-to-day basis, a full fledge production planning cell is in
operation. This production planning system is designed to be fine tuned with the clients needs
and thereby ensures responsive handling of all accounts by fore-casting demands from each
client in terms of greige quality, space on print/ dye machines and space on stitching machines.
Coupled with forecast from their buyers, it makes their system work efficiently. The production
planning and control department examines the all production activities to keep and maintain the
quality standard committed in Niagara Mills. The main advantages of this system include shorter
lead times, on time deliveries, less wastage and less quality hassles.
It is an intermediary between marketing department and processing department. It issues
daily production program to each processing unit. Daily production reports are received in this
department. New product development letter is also received in this department. Then work is
planned accordingly. Niagara group is pioneer for making production and planning for their
betterment. Instructions are first given to production and planning department and then
distributed to other processing units. Here various type of analysis are conducted like,
Bleaching production analysis
Printing production analysis
Dyeing production analysis
Finishing
Folding
Damage trend analysis

37
Monthly maintenance breaks down analysis

19) MARKETING & SALES DEPARTMENT:

Marketing & Sales department is situated at Niagara head office Faisalabad. I also visit to
Niagara head office with the approval of Respected Mills Manager of this organization. I spent
my five days at Niagara head office. In marketing department I learned how the orders are
executed from the old buyers and how the new markets and buyers are discovered and executed.
Normally what happen is that the buyers contacts the marketing department and ask for the
sample, if buyer accepts he gives order, Marketing department than issue a sales contract to the
buyer.
Marketing Strategies of Niagara Mills:
Effective production is not only a good job, actually selling is big job. Marketing is very
important for any organization. Niagara mills are fully committed to follow up the established
marketing strategies which include the following:
Meeting with buyers
Company profile
Buyer visits
Free sample
Contact with agents
R& D for marketing
o Through Internet
o Yellow pages
o APTMA buyer dictionary etc

e.

Comments on the Organizational Structure:

Departments of Niagara mills are structured based on the set of related responsibilities.

The set of responsibilities being discharge set the tone and structure of that department. The
complexity and diversity of these responsibilities also affect how departments are set in an
organization. Existence of Functional departments in every organization varies with the nature of
industry and the nature.
Niagara mill is a hierarchical structured organization in which every entity in the
organization, except one, is subordinates to a single other entity. This is the dominant mode of

38
organization among large organizations; most corporations and governments are hierarchical
organizations. Following are the main characteristics of hierarchal structure
Low number of subordinates per supervisor
Long chain of command
Greater number of levels
Since the structure of the Niagara mills is hierarchical therefore it has greater number of levels
and long chain of command which make the structure very complex. The board of directors of
Niagara mills if directly involved in every decision at all level. Sometime they make inefficient
decisions due to the lake of information and over self confidence. Whereas this could be lead to
some financial and psychological loss, but employees involvement may prove as more
productive as compare solely decision made by the higher management.

11. Plan of your internship program

a. A brief introduction of the branch where you did your internship:
I did my internship program at Niagara Mills (Pvt) Ltd situated at 03 km Jhumra Road,
Khurrianwala, Faisalabad. Niagara mill is a processing unit of dyeing, bleaching, finishing and
printing. It has 450 maximum numbers of employees working with this organization and this is
the sanctioned strength of employees. I found this organization very efficient and successful in
its aim and strategic objective. It produce printing cloth collection which are totally for export to
abroad and playing the important roll in the economy of the Pakistan.
b. Starting and ending dates of your internship Program:
I planned to attend this organization dated from June, 2015 to Jul, 2015. This was my 2
month approximately training period with this organization. It would be my rich experience in
my professional career.
c. Names of the departments in which you got training and the duration of your training:
During my internship period I spent time in all departments to learn and gain maximum
data about them but my focus was on following four key departments.
Time Office or HR Department

1 weeks

Main Store Department

2 weeks

Accounts Department

2 weeks

39
Audit Department

3 weeks

I have been attending this organization timing from 09:00 am to 17:00 pm but I spent my two
hour daily in other department to know about them. First of all I spent my one weak

40

12. Training program

a. Detailed description of the operations/activities performed by the
department(s) you worked in.
1. HR or time office department:
I spent my time during my internship period in different departments
to get information about the work or activities they perform but my detail
working was in the four key departments such as Accounts department,
Audit departments, Main store and Time office of this organization. First of all
I spent my one weak in time office which is the HR department of this
company. All the new appointments are made at this department; they
interview all the new employees to this organization. They evaluate all the
new comers and ensure that the selected candidates are fit to their concern
jobs. The advertisement for all vacancies available at this company is done
by the HR department, they arrange for receive of the job application and
make the call to most appropriate or suitable people for the concerned jobs.
After the selection of called candidate the HR department issues the
appointment letters to the selected professionals. They treat the workers
under probation period for first three months but after the probation period
they recommend them as permanent employees to the higher management.
The HR department also responsible to arrange training program held
within

the

company and

motivate

the employees

to

be

inventive.

Furthermore they are responsible to prepare and maintain the record of

employees attendance and overtime. At the end of the month, they prepare
the salary and overtime detail sheet and then forward to accounts
department for duly checking and forward to audit department for the final
checking and verification. After final checking and verification by audit
department, it goes to cash officer who is the solely responsible to disburse
the salary and overtime to all of the workers of this organization.
To record this huge sized data the HR department using
computerized software which is named as PMS stand for Payroll Management system.

41
Payroll management system is an oracle based system. All kind of information about salary and
overtime as well as the other information are posted in this software at continuously basis.
At the end of month a salary sheet raised from the time office department and then
forward to accounts department and then audit department. Audit department check the salary
sheet according to audit point of view and after complete checking and satisfaction forward the
salary sheet to account department to make the salary payment. The same procedure is done for
the monthly overtime payment. The payroll management payroll management conducts different
report to provide the brief and snap shot to its users such as Designation Wise Strength, New
Appointment, Employees Information, Employees Addition & Deletion, Employees Leave
Details, Absent Report, Leave Availed Summary etc. So finally we can say that the HR
department is a key department whose contributions are very important to become successful.
2. Main Store Department:
Min store department is also a very important area of this organization.
I spent my next two weeks in this department; all the purchases inventory
arrived at mills are received and keep stored in this department. They keep
the inventories in a secure and convenient way and issue them to on the
demand of others department. At the arrival of the inventory they raise a
document Goods Receipt Note which involves the item specification, rate of
the item, and the total amount payable to creditors as well as the IGP date
and number. They main store using the FIFO method to control the inventory
system as they use it first in first out, after preparing the goods receipt note
they raise a document named as inspection note which has to be signed by
the concern goods inspector of concern department. Then afterward they
forward these all document to the accounts or finance department to prepare
the payment voucher for the concerned parties or creditors. The main store
using the computerized software to control the inventory system named as
Purchase Inventory System. It is an oracle based system and has the great
space to store the huge number of data in it and can be used to generate
any kind of inventory reports such as Store Indent / Demand Report, Purchase Order
Report, Inward Gate Pass, etc. So the main store department is very crucial to keep store and
issuance of the inventory of any organization.

42
3. Accounts Department:
The existence of an accounts department is vital to every business,
whether whatever kind of it. I spent my next two weeks in the accounts
department of this organization and learn a lot form this department. The
accounts department of this organization performs very important functions;
they are responsible to deal all kind of payment to creditors and to receive
from the debtors. The main function of this department at mills is to make
the payments ready for all the creditors for the purchase of mills. Normally
they have the 30 days credit period after the date of purchasing. Within this
period the accounts department is responsible to dispatch the payment to
the parties. They gather the all supporting documents of the store purchase
voucher and then forward to audit department to final checking and
verification. They also deal to locally purchases at mills and make the
payments to the suppliers. They are also responsible to disburse the salary
and over time payment to the workers as well as the other payment of bonus
to employees.
They are also having computerized software to record the financial
data of this organization named as Financial Account System. All the
transactions are posted in this system at daily basis and so this can be used
or viewed at any time by the higher management. They are also responsible
to maintain the daily cash book which is duly signed by the worth managing
director of this organization at daily basis. All the payment which are made
by the accounts department are prepared by the accounts department which
needs to be checked and verified by the audit department but the accounts
department get the final approval from the worth managing directors be the
payment is to made.
Audit Department:
I spent my next three weeks in the audit department of this company,
which is the maximum time period in my internship; I opt to spent
maximum in this department because all the work done by different key
departments forwarded to audit department to make sure the accuracy of

43
the work and the audit department is responsible to check and verify the
work done by other department. So I feel that to work in this department
will be more beneficial for me. Audit department is the supreme authority
in this company and has a lot of power and control over the each and
every area of this organization. The audit department has strong check on
the other department activities. The audit department has great
importance in the eye of the board of directors of the company and they
trust on the audit department.
b. Detailed description of the tasks assigned to you.
I spend time during the internship period in the different departments of this organization,
and in these departments I have been performing the different tasks. The detail of these tasks
according to the key department is given below where I was engaged to work.

HR Department:
In HR department the job to maintain the manual attendance register as well as the
posting to the payroll management system.
Systematically feeding of the daily employees leaves form accordingly.
To prepare the daily absent report as the late coming employees detail.
To prepare the in out report of the employees etc.

Main Store Department:

To receive the daily inventory as per the daily purchase detail sent by the head office.
To get keep the all inventory arrivals at the mills to proper place.
To issue the stock at time of department requisition.
To keep the manual as well as computerized record of all inventory at mills etc.

Accounts Department:
To gather the all document relevant to prepare the store purchase vouchers.
To prepare the store purchase voucher for the payment to the suppliers.
To maintain the supplier ledgers accordingly.
To dispatched the payment advice to the companys suppliers that the payment is ready at
head office etc.

44

Audit Department:
Checking and verification of the daily gate movement report.
Checking and verification of daily cloth dispatch report, cloth arrival report, and stock
purchased for the mills.
To checking and verification of the store purchase the vouchers.
To Checking and verification of different ledgers maintain at mills.
Checking and verification of the all payment dispatched to parties etc.

45

13. Structure of the Finance Department:

a. Departmental hierarchy
The structure of the finance department of the Niagara Mills (Pvt) Ltd is very wide and strong.
They establish the maximum positions in finance department to cover their all financial
transactions efficiently and effectively

Director of Finance
Dy. Director of Finance

Manager Accounts

Dy. Manager
Accounts H/O

Dy. Manager
Mills

Account Officer

Account Officer

Asst. Account
Officer

Asst. Account
Officer

Cashier

Cashier

Manager Audit

Dy. Manager
Audit H/O

Audit Officer

Dy. Manager
Audit Mills

Audit Officer

Asst. Audit
Officer

Asst. Audit
Officer

Auditor

Auditor

46

b. Number of Employees Finance Department

The detail about the number of employees is given below:
No. of
Employees

Sr. No.

Position Name

Director of Finance

Deputy Director Finance

Manager Accounts

Manager Audit

Deputy Manager Accounts H/O

Account Officers H/O

Assistant Account Officers H/O

Cashier H/O

Deputy Manager Accounts Mills

10

Account Officers Mills

11

Assistant Account Officers Mills

12

Cashier Mills

13

Deputy Manager Audit H/O

14

Audit Officer H/O

15

Asst. Audit Officer H/O

16

Auditors H/O

17

Deputy Manager Audit Mills

18

Audit Officer Mills

19

Asst. Audit Officer Mills

20

Auditors Mills

Total Number Employees

46

47

c. Finance & accounting operations

Finance & accounting operations of this organization is very excellent and have good
system to maintain the all finance and accounting transaction in a very wise way. There is no
chance to happen any ambiguity in the finance system of Niagara mills. They are all about the
professionalism in the finance and accounting operation.

14. Functions of the Finance Department

The finance department of the Niagara Mills (Pvt) Ltd performs the following function within
the company established policies.

Maintenance of books of accounts and preparation of financial statements of the

company in accordance with the IAS.

Coordination and facilitation for Business planning and budgeting function in the
Company and periodic reporting to the management and to the Board.

Preparation of budget, appropriation of accounts, re-appropriations, surrender and

savings.

Conduct internal Audit.

Treasury administration.

Administration of Taxes i.e. Sales Tax, Entertainment Tax, Luxury Tax and Entry
Tax etc.

Resource mobilization through loans, Institutional Finance, Credit and

Investment.

Compilation of Codes, Rules and procedures concerning financial transactions.

Safety and investment of funds from consolidated funds and contingency fund.

Contract, recovery and refund of revenue etc.

a. Accounting system of the organization

Accounting system of the organization based on accrual basis which is required by law as
the companies ordinance 1984 to meet the criteria of the International Accounting System.
Company follows the double entry system and record the all transaction on daily basis in the
accounting software of the company. The Niagara Mills (Pvt) Ltds has its own software to deal

48
the all accounting data which is named as FAS Financial Accounting System. Financial
accounting system is an oracle based system and have the capacity of hundred of gaga bytes. It
generates different accounting reports and accounts ledgers. Accounting professionals and the
higher management of the company to makes the important decision of the company.

b. Finance system of the organization

Finance system of the Niagara Mills (Pvt) Ltd is very strong and intelligent. They hired
the highly skilled professionals who have the potential to drive the finance of the organization in
a better way. They are able to forecast and budgeting the various expenditures and plan them
accordingly. They have full control the financial data and financial resources. They increase their
earning through better utilization of the available resources of the company by forecasting
planning. They analyze the whole situation and then prepare different budget and policies of the
company. They have close eye on the available financial resources of the organization, where it
should be utilized and how can they generate the more and more fund to meet the long term and
short expenditure of the firm. They assist the board of directors to take the important financial
decisions based on the past and current financial performance of the organization. They maintain
the sufficient liquidity to meet the accidental expenses of the organization.

c. Use of electronic data in decision making

As mentioned above that the Niagara Mills (Pvt) Ltd have their own computerized accounting
software to record and maintain the financial transaction. Financial Accounting System of the
Niagara Mills (Pvt) Ltd has the abilities to record and manipulate the huge number of data. The
financial professional and the board of director of this organization rely heavily on that system.
They can see their expenses on different heads on periodically or daily basis or whenever they
want to see they can, through the Financial Accounting System of this organization. They can
determine the cash in hand or cash at bank by using the cash ledgers and if they want to know
how much they owe they can easily check their liabilities as well their account receivables. So
the Niagara Mills (Pvt) Ltd uses the electronic data in decision making within the organization.

49

d. Sources of funds
Niagara Mills (Pvt) Ltd is a private limited company and they mostly rely on their private source
of funds. The annual turnover of the Niagara Mills (Pvt) Ltds encompasses billions of dollars.
All the fabrics produce at Niagara Mills (Pvt) Ltd fully exported to European countries and bring
the maximum amount of dollars in Pakistan and contribute in the development of the economy of
the Pakistan. They also use the long term debt from financial institution situated in Pakistan.
Following are the main sources of this organization:
Companys own capital
Debt equity
Long and short term debt
Personal borrowing
Sales revenue
Internal borrowing
External borrowing
The Niagara Mills (Pvt) Ltd has very strong financial structure and they are managing very well
their financial needs in time. Now they are planning to set up weaving as well stitching units in
future, its mean they have the sufficient funds or capital to run not only their current business but
also to build up some other business premises.

e. Allocation of funds
The Niagara Mills (Pvt) Ltd allocates the available funds effectively and efficiently. They
do not allocate the higher fund to that project which have the lower risk and have the low cash or
benefit inflow. They have the very much skilled capital budgeting planners to deal with the
allocation of companys funds. They allocate the funds according to the revenue generate by the
projects and according to the demand of the market. They allocate more funds to highly
demanded area and allocate less fund to low demanded area. For example they are printed fabrics
exporter; they deal in fabrics dyeing and printing processes; Now a day they have the huge
number of fabrics printing order form the European countries as compare to dyeing fabrics. As
the they have the more printing order and the printing fabrics is very much profitable as
compared to dyeing fabrics, therefore they are on the planning to installed the new printing plant

50
which will add the value and increase the total annual turnover and profit of this organization.
The strategic planners of this organization allocate and maintain the exact level of funds to
achieve the maximum output from the companys resources. They do not let the projects to be
over funded and do not remain the projects less financed but they have very efficient level of
financing.

15. SWOT analysis of organization in the business sector.

SWOT analysis is the analysis of Strengths, Weaknesses, Opportunities and Threats of the
organization. Strength and Weakness relate to the internal environment whereas the opportunity
and threat comes from the external environment of the organization. It is the snapshot of the
organization, how much the organization is internally strong and how they actively respond to its
external environment. Following are the key points in each of the four components:

STRENGTHS:
Strengths are those attributes of the organization that are helpful to the achievement of the
organizational objective. Following are the strengths of the Niagara Mills (Pvt) Ltds.
Strong Financial System
Sufficient Availability of the funds
Well defined financial structure
Hierarchical organizational structure
Highly skilled professionals
Good management control
Aggressive marketing strategies
Strong budgeting and planning
Access to international market
Computerized processing plant
Employees training & development strategies
Attractive Brand Image

WEAKNESSES:
Weaknesses are those attributes of the organization that are harmful to the achievement of the
objective. Following are the some of the weaknesses of the Niagara Mills (Pvt) Ltd.

51
Autocratic Management Style
Tradition Organizational Structure
Stressful Company Environment
Rigid Organizational Culture
Unpleasant Behavior with Employees
Employees goals are not aligned to the organizational goals and long term objectives.
No Employees motivational programs
Less respondent to technological changes
Limited source of funds as it is a private limited company

OPPORTUNITIES:
Opportunities are external conditions that are helpful to the achievement of the organizational
objectives. Following are the opportunities for the Niagara Mills (Pvt) Ltds.
Availability of National and International market
Technological support
Stable economic environment
Availability of the funds to the large extent through fluent banking system
Low interest rates
Low inflation rates
High purchase power of the people
Pleasant political situation
Business friendly environment
Customer loyalty

THREATS:
Threats are external conditions that are harmful to the achievement of the objectives of the
company. The threats of the Niagara Mills (Pvt) Ltd are:
Highly competitive pressure
Substitute of the product in the market
No barrier to new firm for entering in the market

52
Arrival the new and advanced technological instruments
High tax rate imposed to the company
High inflation rate
Economic instabilities
Pricing range of the competing product
Demand variability

16. Conclusions:
From the above all discussions, examination and analysis we can say that Niagara mills
has strong financial strength and well structured. We did the different analysis to examine the
organization and also compare its one of the competitors. We conclude the following results from
the above financial data:
The Niagara has strong and enough liquid ratio to meet its current obligation but
decreasing with the time passing.
It has the debt ratio which was 0.58, 0.46 and 0.40 which means the company attempting
to reduce its debts to minimum limit with the passage of time
Interest coverage ratio of this also improving as from 2.77 to 2.94 and impressively 4.76
in the last year 2014, which means there is, continues addition in the companys earning.
We also conclude that the companys net profit margin was 2.24% in 2012 but little
decrease happened in 2013 which was 2.19% but they improve their profit to a maximum
extend such as 3.43% in the last year.
Return on assets and return on equity are also decrease in second but increase sufficiently
in the third year.
We also conclude that there is continues addition in the earning per share of the company.
In industry analysis we compare this organization to similar level and field of
organization named as Arshad Corporation for the year of 2014. We conclude that the
Niagaras net profit was 3.43% which is a good mark but when we compare it with the
net profit of its competitor Arshad corporation, it was less than the profit of the Arshad
corporation which is 5.71%. So the net profit of Niagara mills less by 2.28% as compare
to Arshad Corporation.

53
In trend analysis we look at each item at profit and loss account and the balance sheet, we
conclude that in some accounts there is upward trend, in some of account there is down
trend but we observe the overall trend in the net profit of the organization which was
fluctuating trend such as it was 2.24% in 2012, decrease in the second year to 2.19% but
increase impressively in the last year 3.43%.
In SWOT analysis we conclude that the Niagara has strong financial strength but
autocratic style in their internal control.
There are highly skilled worker but they have a traditional organizational structure and
stressful environment in the organization etc.

17. Recommendations:
The company has to do more in many area of working to be a standard firm to others, I
observe so many points which should be improve; following are some of the recommendations
from my side to the company:
First of all I observe that the cost of goods sold during three examined years continuously
increasing which cause a swear reduction in the gross as well as net profit of the company. So the
company must to control their expenses to maximum limit which can lead the company profit
increased.
I observe the Niagara has a stressful and traditional environment and the workers did not
feel freedom to perform well, which must be changed.
Labor resource is the most powerful weapon of any company but this is not efficiently
used in Niagara, so they have to create a democratic management style by encouraging
the employees through participation.
I observe that the employees of this organization do not satisfied from their jobs as they
less compensated as compare to labor market, they do not have others facilities or
perquisites from the company which others company offered, therefore there is high
employees turnover, which may prove very danger for the company. I recommend that
the company must do more and more to satisfied their employees to achieve the high
quality products and services.

54
I also observe that the Niagaras net profit is good but less impressive to its competitor so
the company should have to minimize their expenses and try to increase their income and
revenue to keep its profit equal or increase its competitor industries.
There are many other areas which must be improved but I recommend some of important
points.

18. Reference & Sources used

Following are the References and Sources used to prepare this internship report.
Interview with the different head of departments individually.
Companys manual book.
www.niagaramills.com.pk
Proper attending the mills for about two month period.
Other key management personnels.
Meetings with supervisors in the different production departments etc.

19. Critical analysis

a. Financial analysis

Financial analysis includes the Ratio Analysis, Horizontal Analysis,

Vertical Analysis, Industry Analysis and the Trend Analysis. We will go through
each of them and analyze the financial data of the company.

1. Ratio Analysis:
1. Short Term Solvency Ratios:
These ratios provide information about a firms ability to meet its short-term
financial obligations. They are of particular interest to those extending shortterm credit to the firm.

a. Current Ratio:
= Current Assets / Current Liabilities
Particulars
Current Assets
Current Liabilities
Current Ratio

2012
1,179,689,38
1
1,092,177,76
8
1.0
8 Times

2013
1,356,391,2
34
1,179,199,0
66
1.1
5 Times

2014
1,538,903,9
25
1,355,789,9
19
1.1
4 Times

55

We can see that the current ratio in 2012, 2013 and 2014 is 1.08, 1.15 and 1.14 respectively. The
ratios difference shows that the said firm has sufficient current or liquid assets to meet its current
obligation but Liquidity increased by 2012 to 2013 but there is a little bit reduction in the current
ratio in 2014.

b. Quick or Acid Test Ratio:

= (Current Assets Inventory or illiquid assets) / Current Liabilities
Particulars
Current Assets
Stock in trade

2012
1,179,689,38
1
249,316,69
6

2013
1,356,391,2
34
214,465,12
9

9,235,388

7,804,292

921,137,297

1,134,121,813

Stores
Net Current Assets

2014
1,538,903,9
25
377,284,64
7
8,836,79
1
1,152,782,487

1,092,177,76
1,179,199,0
1,355,789,9
8
66
19
Quick Ratio
0.84 Times
0.96 Times
0.85 Times
Here we can see the quick and liquid ratio is less than 1, so it may be little bit dangerous in case
Current Liabilities

of urgently liquidation. Besides this there is a signal that the quick ratio increased from .84 to .96
in the year of 2013 but decrease in the year of 2014 from .96 to .85, so it is not a good sign.

c. Working Capital:
= Current Assets Current Liabilities
Particulars
2012
1,179,689,38
Current Assets
1
1,092,177,76
Current Liabilities
8
Rs.
Working Capital
87,511,613

2013
1,356,391,2
34
1,179,199,0
66
Rs.
177,192,168

2014
1,538,903,9
25
1,355,789,9
19
Rs.
183,114,006

56

Working Capital shows the value of net liquid assets to meet the day to day obligations of the
company. So company has very good working capital increasing by every year from 2012 to
2014.

2. Leverage or Long Term Solvency Ratio:

Financial leverage ratios provide an indication of the long-term solvency of
the firm. Financial leverage ratios measure the extent to which the firm is
using long term debt and measures the degree of protection of Suppliers of
Long Term Funds.

a. Times Interest Earned: (Interest Coverage Ratio)

= Earnings before income tax (EBIT) /Interest Expense
OR
= Profit before tax + interest expense/Interest Expense
Particulars
Earnings before income
tax
Interest expense
Times Interest Earned

2012
108,118,592
28,359,838
4.8
1 Times

2013
103,699,24
4
33,443,406
4.1
0 Times

2014
100,457,58
8
6,390,052
16.7
2 Times

Times Interest Earned Ratio shows the ability of company to pay interest on
debt which has been financed by the company as comparing to its profit
earned before income tax. So the times interest earned ratio shows that in
2012 4.81times operating profit is more over its interest payable on debt but
decreased little bit in 2013 but increased so much in 2014 which is very good
sign for the company to meet its interest payments on debt financing.
OR
The interest coverage ratio indicates that how well company earning covers the interest
payments, so interest coverage ratio has increased very much in 2014 as compared to its interest
charges.

b. Debt Ratio
= Total Debt / Total Assets
Particulars

2012

2013

2014

57

Long term loans

Short term borrowings
Total Debt
Non-Current Assets
Current Assets
Total Assets
Debt Ratio

400,000,00
0
359,875,91
5
759,875,91
5
716,918,72
1
1,179,689,38
1
1,896,608,10
2
0.4
0%

400,000,00
0
102,724,21
5
502,724,21
5
707,128,91
5
1,356,391,2
34

400,000,00
0
200,077,96
4
600,077,964

2,063,520,149
0.2
4%

2,316,046,031
0.2
6%

777,142,10
6
1,538,903,9
25

Debt Ratio shows the percentage of debt involved in acquiring total assets. So the debt ratio is
decreasing with the passage of time which means they company attempting to reduce their debt
with the minimum limit as so much decreased in 2013 from 40% to only 24% and then little bit
increased in 2014 by 2%. After all Companys Assets worth is much more over its debts.

c. Debt-to-Equity Ratio
= Total Debt / Total Equity
Particulars
Long term loans
Short term borrowings
Total Debt
Total Equity
Debt-to-equity Ratio

2012
400,000,00
0
359,875,91
5
759,875,91
5
100,000,00
0
7.6
0%

2013
400,000,00
0
102,724,21
5
502,724,21
5
100,000,000
5.0
3%

2014
400,000,00
0
200,077,96
4
600,077,964
100,000,00
0
6.0
0%

This Ratio indicates the proportion of debt and equity that company is using for its Assets
Financing. The debt to equity ratio is reducing in the second year but increased a little bit more in
the third year which may not be a good signal for the company because the outside debt
financing increasing over share holders equity.

d. Debt to Tangible Net worth Ratio:

58
= Total Debt / Tangible Net Worth
Where as Tangible Net Worth:
= Total Assets Intangible Assets Total Liabilities
Particulars
Total Debt
Total Assets
Intangible Assets
Non Current Liabilities
Current Liabilities
Total Liabilities
Debt to Tangible Net
Worth Ratio

2012
759,875,91
5
1,896,608,10
2
0

2013
502,724,21
5

2014
600,077,964

2,063,520,149
0

2,316,046,031
0

408,793,796

411,629,208

1,092,177,768
1,500,971,564

1,179,199,066
1,590,828,274

1,355,789,919
1,769,892,641

1.26 %

1.30 %

1.31 %

414,102,722

This Ratio indicates the physical net worth of the company. It also indicates the degree of
protection for creditors. Lower ratio is better for the company that indicates lower debt
obligations over actual assets worth. So company has 1.26, 1.30 and 1.31 percent excess debt
over its actual assets value. The percentage is not bad because it is not so much or so excess but
it should be decreased with the passage of time but here the ratio is little bit increasing by every
year which is not good.

3. Profitability Ratio:
Profitability Ratios Profitability ratios offer several different measures of the
success of the firm at generating profits. It shows that how much profitable
the business is.

a. Gross Profit Margin

= (Gross Profit / Sales) x 100
Particulars
Gross Profit
Sales
Gross Profit Margin

2012
226,559,988
2,070,161,185
10.94%

2013
213,977,075
2,320,040,833
9.22%

2014
214,927,117
2,491,111,417
8.63%

From the above table we can conclude the companys gross profit margin decreasing which
means the cost of goods sales are increasing with the passage of time which must be controlled.

59

b. Net Profit Margin

= (Net Profit / Sale) x 100
Particulars
Net Profit
Sales
Net Profit Margin

2012
46,388,23
6
2,070,161,18
5
2.24%

2013
50,739,18
8
2,320,040,83
3
2.19%

2014
85,409,67
6
2,491,111,417
3.43%

Net profit margin decreased little bit in the year of 2012 but increased from 2.19 to 3.43% in the
next year which is a good sign.

c. Return on Assets
= (Net Income / Total Assets) x 100
Particulars
Net Income
Total Assets
Return on Assets

2012
46,388,23
6
1,233,701,46
7
3.76%

2013
50,739,18
8
1,436,335,46
2
3.53%

2014
85,409,67
6
1,896,608,10
2
4.50%

Return on assets decrease in the second year from 3.76 to 3.53% but increased in the year of
2012 from 3.53 to 4.50% as a good indication.

d. Return on Equity
= Net Income / Equity
Particulars
Net Income
Total Equity
Return on Equity

2012
46,388,23
6
100,000,00
0
46.39%

2013
50,739,18
8
100,000,00
0
50.74%

2014
85,409,67
6
100,000,00
0
85.41%

The return on equity continually improving as 46.39 to 50.74 and then to 85.41% which is very
impressive.

60

4. Assets Turnover Ratio

Asset turnover ratios indicate that how efficiently the firm utilizes its assets.
They sometimes are referred to as efficiency ratios or asset management
ratios.

A). Receivable Turnover = Annual Credit Sales / Accounts Receivable

Particulars
Annual Sales
Account Receivable
Receivable Turnover

2012
2,491,111,41
7
526,082,42
5

2013
2,821,317,53
0
700,206,25
9

2014
2,622,458,05
0
585,091,75
5

4.74

4.03

4.48

Here is the reduction in the Receivable turnover over ratio from 2012 to 2013 but little bit
increase in 2014. Where as Sales increased from 2012 to 2013 and R/a Turnover decreased, it is
good sign but R/a Turnover increased from 2013 to 2014 and Sales Volume decreased, so it is not
good sign.

a. Average Collection Period

= Day in a Years / Receivable Turnover
Particulars
Days in a Year
Receivable Turnover
Avg. Collection Period

2012
365.00
4.74
77.00

2013
365.00
4.03
90.57

2014
365.00
4.48
81.47

61

There is the continuous increase in the Average collection period with the passage of time.

b. Inventory Turnover
= Cost of Goods Sold / Inventory
Particulars
Cost of Goods of Sold
Inventory (Store)
Inventory Turnover

2012
1,843,601,19
7
13,519,24
1
136.3
7

2013
2,106,063,75
8
11,481,37
5
183.4
3

2014
2,276,184,30
0
9,235,38
8
246.4
6

The inventory turnover of the Niagara Mills continuously increasing during the examined years
passing.

c. Inventory Period
= Day in a Years / Inventory Turnover
Particulars
Days in a Year
Inventory Turnover
Inventory Period

2012

2013
365.0
0
136.3
7
2.6
8

2014
365.0
0
183.4
3
1.9
9

365.0
0
246.4
6
1.4
8

The inventory period for this company reducing with the time passing through the years.

5. Market Ratio:
Market ratios tell about the market position of the company as it indicates how much the
company earns against each share etc.

a. Earning Per Share

= Net Income / No of ordinary Shares

62
Particulars
Net Income
No. of Ordinary Shares
Earning Per Share

2012
46,388,236
10,000,000
4.64

2013
50,739,188
10,000,000
5.07

2014
85,409,676
10,000,000
8.54

Earning per share is also increasing through the passing of year which shows the company earns
a handsome profit in the return of invested capital and efforts.

b. Price Earning Ratio

= Price per share / Earning per share
Particulars
2012
Price Per Share
12.00
Earning Per Share
4.64
Price Earning Ratio
2.59

2013

2014
13.00
5.07
2.56

15.00
8.54
1.76

Price earning ratio is also reducing with the passage of time.

c. Market to Book Value

= Market Value per Share / Book Value per Share
Particulars
Market Value
Book value
Market to Book Value

2012

2013
12.00
10.00
1.20

2014
13.00
10.00
1.30

15.00
10.00
1.50

Market to book value increasing with the passing of years which shows that the price of the
companys shares increasing which is good sign to the stake holder of the company.

1. Horizontal Analysis:
Horizontal analysis is also known as base year analysis in which we the first year as base year
and considered it equal to 100% percent and conclude the percentages of the each line in the
different year as the percentage of the base year accordingly.

63

64

NIAGARA MILLS (PVT) LTD

PROFIT AND LOSS ACOUNT
FOR THE YEARS 2012, 2013 AND 2014.
PERTICULARS
Sales
Cost of goods sold
Gross Profit
Other operating
income
Net Gross Profit
Distribution Cost
Administrative
expenses
Other operating
expenses
Finance Cost
Total Cost
Profit before taxation
Provision for taxation
Profit for the year

2012
Rupees
2,070,161,18
5
1,843,601,19
7
226,559,98
8

2013
Rupees
2,320,040,83
3
2,106,063,75
8
213,977,07
5

226,559,98
8
86,604,03
2
20,128,37
9
9,681,38
1
37,520,09
3
153,933,88
5
72,626,10
3
26,237,86
7
46,388,23
6

213,977,07
5
80,283,93
0
24,671,99
5
6,046,36
7
26,021,37
4
137,023,66
6
76,953,40
9
26,214,22
1
50,739,18
8

2014
2012
2013
Rupees
Rupees Rupees
2,491,111,41
7
100% 112.07%
2,276,184,30
0
100% 114.24%
214,927,11
7
100%
94.45%
50,482,03
0
100%
0.00%
265,409,14
7
100% 94.45%
94,450,90
3
100%
92.70%
28,741,85
7
100% 122.57%
5,737,95
7
100%
62.45%
28,359,83
8
100%
69.35%
157,290,55
5
100% 89.01%
108,118,59
2
100% 105.96%
22,708,91
6
100%
99.91%
85,409,67
6
100% 109.38%

2014
Rupees
120.33%
123.46%
94.87%
0.00%
117.15%
109.06%
142.79%
59.27%
75.59%
102.18%
148.87%
86.55%
184.12%

As we can observe the following results from the above profit and loss account over three years:
The sale of the company increasing through passing of year as from 100% to 112.07
%and then to 120.33% in the year of 2014.
The gross profit decreased to some extend but increased in the year of 2014 as up to
117.15%.
The net profit the company also increasing through the selected period but there is a big
increase in the profit of the company from 109.39% to 184.12% in the year of 2014.

65

Horizontal Analysis/Base Year Analysis:

NIAGARA MILLS (PVT) LTD
BALANCE SHEET
FOR THE YEARS 2012, 2013 AND 2014.
PARTICULARS

2012
Rupees

2013
Rupees

2014
Rupees

2012
2013
2014
Rupees Rupees Rupees

Non-Current Assets
530,958,9
56
2,117,7
00
533,076,65
6

603,666,3
20
2,117,7
00
605,784,02
0

714,770,8
11
2,147,9
10
716,918,72
1

13,519,2
41
180,621,8
67
144,652,7
88
230,547,5
84
2,439,2
42
97,778,5
69

11,481,3
75
157,250,1
55
299,163,9
80
252,469,2
74
2,093,9
59
95,449,7
17

Total Current Assets

31,065,5
20
700,624,81
1

12,642,9
82
830,551,44
2

9,235,3
88
249,316,6
96
526,082,4
25
264,276,2
41
3,513,4
37
85,340,8
25
22,982,3
81
18,941,9
88

Total Assets Side

1,233,701,467

1,436,335,462

Property, Plant & Equipment

Long term deposit
Total Operating Assets

100.00%

113.69%

134.62%

100.00%

100.00%

101.43%

100.00%

113.64%

134.49%

100.00%

84.93%

68.31%

100.00%

87.06%

138.03%

100.00%

206.82%

363.69%

100.00%

109.51%

114.63%

100.00%

85.84%

144.04%

100.00%

97.62%

87.28%

100.00%

0.00%

0.00%

100.00%

40.70%

60.97%

1,179,689,381

100.00%

118.54%

168.38%

1,896,608,102

100.00%

116.42%

153.73%

Current Assets
Store & Spares
Stock in trade
Trade debts
Loan and advances
Deposits and prepayments
Others receivables
Tax refunds due from Govt.
Cash and bank balances

Current Liabilities
Trade and other payables

Interest / mark up payable

317,288,4
76
225,686,0
17
26,237,8
67
569,212,36
0

256,451,9
15
436,516,3
67
26,214,2
21
719,182,50
3

400,000,0
00

400,000,0
00

Short term borrowings

Creditors, accrued Liabilities
Provision for taxation
Total Current Liabilities

704,814,0
75
4,778,8
62
359,875,9
15

100.00%

80.83%

113.42%

22,708,9
16

100.00%

193.42%

0.00%

100.00%

99.91%

86.55%

1,092,177,768

100.00%

126.35%

191.88%

400,000,0
00

100.00%

100.00%

100.00%

Non-Current Liabilities
Long term loans

66
5,001,4
33
405,001,43
3

6,926,0
97
406,926,09
7

8,793,7
96
408,793,79
6

Total Capital

100,000,0
00
159,487,6
74
259,487,67
4

100,000,0
00
210,226,8
62
310,226,86
2

100,000,0
00
295,636,5
38
395,636,53
8

Total Liabilities Side

1,233,701,467

1,436,335,462

1,896,608,102

Staff retirement gratuity

Total Non-Current
Liabilities
Share Capital and
Reserves
Issued Capital
Inappropriate profit

100.00%

138.48%

175.83%

100.00%

100.48%

100.94%

100.00%

100.00%

100.00%

100.00%

131.81%

185.37%

100.00%

119.55%

152.47%

100.00%

116.42%

153.73%

We can compare each and every item or category of account of the company through the
number of years but here we will just see that what extend the companys total assets grow with
the passing of years, so can easily observe that the companys total assets continuously
increasing from 116.42% in 2013 and 153.73% in the year of 2014 which is a very impressive
supplement of the companys assets.

2. Vertical Analysis:
In vertical analysis we just place percentage of each line or category with regard to sales in
the profit and loss account and place the percentage of each line item with regard to total assets
in the balance sheet. In profit and loss account we take the sales as 100% percent and calculate
the each item as the percentage of sale and then compare with each other, but in balance sheet we
take the total assets of the company as 100% and calculate the each line item as the percentage of
the total assets and then compare over different year or with other organization. So following are
the comparative profit and loss account and the comparative balance sheet over three years.

67

NIAGARA MILLS (PVT) LTD

PROFIT AND LOSS ACOUNT
FOR THE YEARS ENDED 2012, 2013 AND 2012.

PERTICULARS
Sales
Cost of goods sold
Gross Profit
Other operating
income
Net Gross Profit
Distribution Cost
Administrative
expenses
Other operating
expenses
Finance Cost
Total Cost
Profit before taxation
Provision for taxation
Profit for the year

2012
Rupees
2,070,161,18
5
1,843,601,19
7
226,559,98
8

2013
Rupees
2,320,040,83
3
2,106,063,75
8
213,977,07
5

226,559,98
8
86,604,03
2
20,128,37
9
9,681,38
1
37,520,09
3
153,933,88
5
72,626,10
3
26,237,86
7
46,388,23
6

213,977,07
5
80,283,93
0
24,671,99
5
6,046,36
7
26,021,37
4
137,023,66
6
76,953,40
9
26,214,22
1
50,739,18
8

2014
2012
2013
Rupees
Rupees Rupees
2,491,111,41
7
100%
100%
2,276,184,30
0 89.06% 90.78%
214,927,11
7 10.94% 9.22%
50,482,03
0
0.00% 0.00%
265,409,14
7 10.94% 9.22%
94,450,90
3
4.18% 3.46%
28,741,85
7
0.97% 1.06%
5,737,95
7
0.47% 0.26%
28,359,83
8
1.81% 1.12%
157,290,55
5
7.44% 5.91%
108,118,59
2
3.51% 3.32%
22,708,91
6
1.27% 1.13%
85,409,67
6
2.24% 2.19%

Briefly we can see and observe that the company net profit in the year 2012 was 2.24% but there
is a little bit reduction in the profit as from 2.24% to 2.19 and increased as up to 3.43% in 2014.

2014
Rupees
100%
91.37%
8.63%
2.03%
10.65%
3.79%
1.15%
0.23%
1.14%
6.31%
4.34%
0.91%
3.43%

68

NIAGARA MILLS (PVT) LTD

BALANCE SHEET
FOR THE YEARS ENDED 2012, 2013 AND 2014.

PERTICULARS

2012
Rupees

2013
Rupees

2014
Rupees

2012
2013
2014
Rupees Rupees Rupees

Non-Current Assets
530,958,9
56
2,117,7
00
533,076,65
6

603,666,3
20
2,117,7
00
605,784,02
0

714,770,8
11
2,147,9
10
716,918,72
1

13,519,2
41
180,621,8
67
144,652,7
88
230,547,5
84
2,439,2
42
97,778,5
69

11,481,3
75
157,250,1
55
299,163,9
80
252,469,2
74
2,093,9
59
95,449,7
17

31,065,5
20
700,624,81
1

12,642,9
82
830,551,44
2

9,235,3
88
249,316,6
96
526,082,4
25
264,276,2
41
3,513,4
37
85,340,8
25
22,982,3
81
18,941,9
88
1,179,689,38
1

1,233,701,46
7

1,436,335,46
2

1,896,608,10
2

Total Current Liabilities

317,288,4
76
225,686,0
17
26,237,8
67
569,212,36
0

256,451,9
15
436,516,3
67
26,214,2
21
719,182,50
3

Non-Current Liabilities
Long term loans

400,000,0

400,000,0

Property, Plant & Equipment

Long term deposit
Total Operating Assets

43.04%

42.03%

37.69%

0.17%

0.15%

0.11%

43.21%

42.18%

37.80%

1.10%

0.80%

0.49%

14.64%

10.95%

13.15%

11.73%

20.83%

27.74%

18.69%

17.58%

13.93%

0.20%

0.15%

0.19%

7.93%

6.65%

4.50%

0.00%

0.00%

1.21%

2.52%

0.88%

1.00%

56.79%

57.82%

62.20%

100%

100%

100%

25.72%

17.85%

18.97%

22,708,9
16
1,092,177,76
8

18.29%

30.39%

0.00%

2.13%

1.83%

1.20%

46.14%

50.07%

57.59%

400,000,0

32.42%

27.85%

21.09%

Current Assets
Store & Spares
Stock in trade
Trade debts
Loan and advances
Deposits and prepayments
Others receivables
Tax refunds due from Govt.
Cash and bank balances
Total Current Assets

Total Assets Side

Current Liabilities
Trade and other payables
Interest / mark up payable
Short term borrowings
Creditors, accrued Liabilities
Provision for taxation

704,814,0
75
4,778,8
62
359,875,9
15

69

Staff retirement gratuity

Total Non-Current
Liabilities

00
5,001,4
33
405,001,43
3

00
6,926,0
97
406,926,09
7

00
8,793,7
96
408,793,79
6

100,000,0
00
159,487,6
74
259,487,67
4
1,233,701,46
7

100,000,0
00
210,226,8
62
310,226,86
2
1,436,335,46
2

100,000,0
00
295,636,5
38
395,636,53
8
1,896,608,10
2

0.41%

0.48%

0.46%

32.83%

28.33%

21.55%

8.11%

38.99%

27.79%

12.93%

81.98%

82.15%

21.03%

120.97%

109.94%

100.00%

100.00%

100.00%

Share Capital and Reserves

Issued Capital
Inappropriate profit
Total Capital
Total Liabilities Side

From the above comparative balance sheet we can observed that the companys total
operating assets decreasing through the 2012, 2013 and 2014 as 43.21%, 42.18% and 37.80%
respectively. Non current liabilities are also decreasing as well continuously as 32.83% to
28.33% and 21.55% respectively, which the company tries to their best to increase their assets
and reducing their liabilities, this is a good signal or attempt from the company.

3. Industry Analysis

(comparison with its competitor)

In industry analysis we compare the Niagara mills with its competitor in
the same field and have the same financial strength. We make the
comparative profit and loss account and comparative balance sheet with an
organization named as Arshad Corporation (Pvt) Ltd Faislabad. Arshard
Corporation is also a processing firm which is situated at Kudrianwala road
faislabad. Following are the comparative financial statement data for the
year of 2014.

70

Niagara Mills VS Arshad Corporation

Profit and Loss Account
For Year Ended June, 2014
PERTICULARS

Sales
Cost of goods sold
Gross Profit
Other operating
income
Net Gross Profit
Distribution Cost
Administrative
expenses
Other operating
expenses
Finance Cost
Total Cost
Profit before taxation
Provision for taxation
Profit for the year

Niagara Mills
2014
Rupees
%
2,491,111,41
7 100.00%
2,276,184,30
0
91.37%
214,927,11
7
8.63%
50,482,03
0
2.03%
265,409,14
7 10.65%
94,450,90
3
3.79%
28,741,85
7
1.15%
5,737,95
7
0.23%
28,359,83
8
1.14%
157,290,55
5
6.31%
108,118,59
2
4.34%
22,708,91
6
0.91%
85,409,67
6
3.43%

Arshad Corporation
2014
Rupees
%

Difference
in %

1,252,956,472 100.00%

0.00%

1,037,009,262

82.76%

8.61%

215,947,210

17.24%

-8.61%

7,855,235

0.63%

1.40%

223,802,445

17.86%

-7.21%

52,017,054

4.15%

-0.36%

16,667,358

1.33%

-0.18%

4,969,658

0.40%

-0.17%

65,054,434

5.19%

-4.05%

138,708,504

11.07%

-4.76%

85,093,941

6.79%

-2.45%

13,534,255

1.08%

-0.17%

71,559,686

5.71%

-2.28%

We got these data from the financial statement of the both

organization and use the vertical analysis technique to interpret the
performance. First we calculate the percentage of each item with regards to
its total sales and then we make the difference column by the percentage of
Niagara mills minus percentage of Arshad Corporation. We can see that the
cost of goods sold of Niagara mills is increased by 8.61% which caused
7.21% decrease in the gross profit of the Niagara mills as compare to Arshad

71
Corporation. Briefly we can see that the net profit of the Niagara mills is
3.43% and the net profit of the Arshad Corporation is 5.71% so there is the
reduction of 2.28% in the profit of this organization as compare to competitor
firm. From the above discussion we can say that the Arshad Corporation is
more efficient than Niagara mills.

72

Niagara Mills VS Arshad Corporation

Balance Sheet
For Year Ended June, 2014
PERTICULARS

Niagara Mills
2014
Rupees
%

Arshad Corporation
2014
Rupees
%

Difference
in %

Non-Current Assets
Property, Plant & Equipment
Long term deposit or loans
Total Operating Assets

714,770,8
11
2,147,9
10
716,918,721

0.11%

493,470,2
44
1,226,3
80

37.80%

494,696,624

37.69%

41.05%

-3.36%

0.10%

0.01%

41.15%

-3.35%

1.21%

-0.72%

40.03%

-26.89%

14.68%

13.06%

0.36%

13.57%

0.02%

0.17%

0.25%

4.25%

1.16%

0.05%

1.13%

-0.13%

58.85%

3.35%

100.00%

0.00%

4.51%

32.65%

Current Assets

Total Current Assets

1,179,689,381

62.20%

14,546,5
94
481,263,6
64
176,479,9
24
4,374,0
66
232,2
17
3,026,4
68
13,936,9
22
13,550,9
20
707,410,7
75

Total Assets Side

1,896,608,102

100%

1,202,107,399

Store & Spares

Stock in trade
Trade debts
Loan and advances
Deposits and prepayments
Others receivables
Tax refunds due from Govt.
Cash and bank balances

9,235,3
88
249,316,6
96
526,082,42
5
264,276,2
41
3,513,4
37
85,340,8
25
22,982,3
81
18,941,9
88

0.49%
13.15%
27.74%
13.93%
0.19%
4.50%
1.21%
1.00%

Current Liabilities
Trade and other payables
Interest / mark up payable
Short term borrowings
Creditors, accrued Liabilities
Provision for taxation
Total Current Liabilities

704,814,0
75
4,778,8
62
359,875,9
15

1.41%

-1.15%

18.97%

54,231,7
20
16,906,8
13
532,213,9
67

44.27%

-25.30%

22,708,9
16

0.00%

0.00%

0.00%

1.20%

0.00%

1.20%

1,092,177,768

57.59%

603,352,5
00

50.19%

7.39%

400,000,0
00

21.09%

80,000,0
00

6.65%

14.44%

37.16%
0.25%

Non-Current Liabilities
Long term loans

73

Staff retirement gratuity

Total Non-Current
Liabilities

8,793,7
96

0.46%

408,793,796

21.55%

100,000,0
00

27.79%

13,846,2
25
93,846,2
25

1.15%

-0.69%

7.81%

13.75%

8.56%

19.23%

10.81%

-10.81%

22.63%

59.52%

42.00%
100.00%

67.93%
0.00%

Share Capital and Reserves

Issued Capital
General Reserves
Un-appropriated profit

295,636,5
38

0.00%
82.15%

Total Capital
Total Liabilities Side

395,636,538
1,896,608,102

109.94%
100.00%

102,920,0
00
130,000,0
00
271,988,6
74
504,908,6
74
1,202,107,399

Here we use the vertical analysis technique to compare the financial

strength of both organizations so briefly we can see that the Niagaras
current assets are 62.20% of its total assets while the Arshad Corporation
has 58.85% of its current assets of the total assets, which means that the
Niagara has more liquidity as compare to Arshad Corporation. Whereas the
Niagara has 37.80% fixed or operating assets and the Arshad Corporation
has the 41.15% as fixed assets of its total assets, which means the Arshad
Corporation investing more in operating assets as compared to Niagara mills.
We can also observe that the Niagara mills have 19.23% increased
issued or paid up capital as compare to Arshad Corporation. But Niagara has
also 7.39% greater current liabilities and 13.79% excess long term liabilities
as compare to Arshad Corporation as well.

4. Trend Analysis
In trend analysis we look at the trend of the organization of a number of
years, In other words we can say we examine the efficiency or deficiency in
the company profitabilitys or strength of a company. In the following trend
analysis we just take the percentage of the each item in the profit and loss
account and the balance sheet and monitor, what about the trend of the
company. Here also we use the vertical technique to analyze the company
trend. Now we interpret the profit and loss account over three years.

74

NIAGARA MILLS (PVT) LTD

Trend Analysis through Profit and Loss Account
For the years ended 2012, 2013 and 2014
2012
%

2013
%

2014
%

100%

100%

100%

Cost of goods sold

89.06%

90.78%

91.37%

Gross Profit
Other operating
income

10.94%

9.22%

8.63%

0.00%

0.00%

2.03%

Net Gross Profit

10.94%

9.22%

10.65%

Distribution Cost
Administrative
expenses
Other operating
expenses

4.18%

3.46%

3.79%

0.97%

1.06%

1.15%

0.47%

0.26%

0.23%

Finance Cost

1.81%

1.12%

1.14%

Total Cost

7.44%

5.91%

6.31%

Profit before taxation

3.51%

3.32%

4.34%

Provision for taxation

1.27%

1.13%

0.91%

Profit for the year

2.24%

2.19%

3.43%

PERTICULARS
Sales

Following trends are observed in different item of the profit and loss account:
If we look at trend in cost of goods sold, there is continues upward
trend in 2012, 2013 and 2014 as 89.06%, 80.78% and 90.37%
respectively.
If we see the net gross profit during three years then we can say that
there is the fluctuating trend in the net gross profit in 2012, 2013 and
2014 as 10.94%, 9.22% and 10.65% respectively.

75
If we examine the total cost of this company we would note that there
is also the fluctuating trend as it was 7.44% in 2012, which decreased
up to 5.91% but then increase up to 6.31% in 2014.
But when we try to see what about overall trend of this company, we
should see the overall net profit of the company. We can see that the
company has the fluctuating trend as it has the net profit 2.24% in
2012, then decrease up to 2.19% and again increased up to 3.43% in
2014.

76

NIAGARA MILLS (PVT) LTD

Trend Analysis Balance Sheet
For the years ended 2012, 2013 and 2014
PERTICULARS

2012
Rupees

2013
Rupees

2014
Rupees

Non-Current Assets
Property, Plant & Equipment

43.04%

42.03%

37.69%

0.17%

0.15%

0.11%

43.21%

42.18%

37.80%

Store & Spares

1.10%

0.80%

0.49%

Stock in trade

14.64%

10.95%

13.15%

Trade debts

11.73%

20.83%

27.74%

Loan and advances

18.69%

17.58%

13.93%

Deposits and prepayments

0.20%

0.15%

0.19%

Others receivables

7.93%

6.65%

4.50%

Tax refunds due from Govt.

0.00%

0.00%

1.21%

Cash and bank balances

2.52%

0.88%

1.00%

56.79%

57.82%

62.20%

100%

100%

100%

Trade and other payables

0.00%

0.00%

37.16%

Interest / mark up payable

0.00%

0.00%

0.25%

Short term borrowings

25.72%

17.85%

18.97%

Creditors, accrued Liabilities

18.29%

30.39%

0.00%

2.13%

1.83%

1.20%

46.14%

50.07%

57.59%

32.42%

27.85%

21.09%

0.41%

0.48%

0.46%

32.83%

28.33%

21.55%

8.11%

38.99%

27.79%

Un-appropriated profit

12.93%

81.98%

82.15%

Total Capital
Total Liabilities Side

21.03%
100.00%

120.97%
100.00%

109.94%
100.00%

Long term deposit

Total Operating Assets
Current Assets

Total Current Assets

Total Assets Side
Current Liabilities

Provision for taxation

Total Current Liabilities
Non-Current Liabilities
Long term loans
Staff retirement gratuity
Total
Non-Current
Liabilities
Share Capital and Reserves
Issued Capital

77
From the above comparative balance sheet we can conclude that there
is the downward trend in the total operating assets of the company as it was
42.21% in 2012 then down to 42.18% and again down to 37.80 in 2014. But
the total current assets have the upward trend as it was 56.79% in 2012 then
increase to 57.82% again increase to 62.20. It means that the company is
interested to be more liquid by employing more capital in liquid assets as
compare to fixed or operating assets.
We can also observe that there is the upward trend in the total current
liabilities as from 46.14%, 50.07% and 57.59% but there is the downward
trend in the total non current liabilities as from 32.83%, 28.33% and 21.55%
etc.

5. Future prospects of the organization.

The Niagara Mills (Pvt) Ltd is a leading textile in the list of exporter of processing
fabrics. They are earning much of the market share in the national as well as in the International
market. They bought raw fabrics from the different weaving industries and then process it and
produce in the dyed and printed form. They have their stitching unit at Kashmir Road Faisalabad
where some of the produced fabrics stitched in the form of bed sheet, pillow cover, quilt covers,
fitted sheet, cushion cover, valances, datable linen, baby sets etc but most of the produced or
printed fabrics exported to abroad as it is in the shape of than, pallet, role etc.

Niagara Weaving Mills Faisalabad.

Now the Niagara Mills (Pvt) Ltd facing some problems in the procurement the raw
fabrics due to shortage of yarn to spinning industries which result in they have to buy raw fabrics
at very high prices which lead to high cost and low profit. So to overcome such problem in
future, the Niagara Mills (Pvt) Ltd has a plan to establish its own weaving mills in the name of
Niagara Weaving Mills which is situated at Jhumrah Road Faisalabad. They have bought and
installed 200 airs jet looms in which 160 looms are in running condition and the remaining 40
looms are under installation and maintenance. Now 70 percent of the raw fabrics for the Niagara
Mills (Pvt) Ltds provided by the Niagara Weaving and still they have to buy 30 percent from
other weaving units but after the proper running of remaining 40 looms it would also cover these
gap.

78

Niagara Five Star Club Faisalabad.

Since the Niagara Mills (Pvt) Ltd is an exporter and they are exporting their all fresh
fabrics to abroad. Often many foreign customers have to visit at factory premises as well as
stitching centre. The foreign visitors have to stay in Pakistan for many days; sometime they stay
until the completion of their orders. So the Niagara Mills (Pvt) Ltd have to spent much for the
resident of those visitors in top class hotels. Now they are constructing a five star club which is
named as Niagara Five Star Club at Kashmir Road Faisalabad for the luxuries residence of the
foreigners. The land has been purchased and the builders are on continuously constructing
building. The Niagara Club would reduce the high spending of the organization on the hosting
and the residence of the foreigners.
The Niagara Mills (Pvt) Ltd also interesting to increase their business volume to the great
extends by make the efficient and effective use of the available resources.

OTHERS FUTURE PLANS OF THIS ORGANIZATION:

The some of the others new high tech vertically integrated units of this group of industries are
under construction & will be operational hopefully within next few months:
Automatic Textile Quality Control System as per ISO 8499
200 wider width sulzer looms
Heavy duty fabric manufacturing capabilities
Continuous dying plant with Thermosol dying of 125
Rajani Rotary of 26 colors , 125 finish width
Wider width Mercerizing
Reactive Printing
State of the art back and forward process
Certification of ISO-2000 and ISO-14000
Environment friendly unit with water treatment plant
Mercerizing & Bleaching plants from Max Goller, Germany
Stenter 6 Chambers 126 width from Monforts, Germany
Calender from Ramisch, Germany, 5 Bowl, 126 width
Suker & Muller Double Action machine from Germany

79
Curing and Steam Ager from STORK, Holland Width 120
Steam washing and Photo Engraving equipment
Color Kitchen from STORK, Holland
Selvedge Printing machine
Pallet Packing
ISO Certified Laboratories