•

A
SUMMER INTERNSHIP PROJECT REPORT
ON
A STUDY ON ORGANIZATIONAL STRUCTURE
WITH SPECIAL REFERENCE TO
RAJAPALAYAM MILLS PRIVATE LIMITED
Institute code – 9526
S.VEERASAMY CHETTIYAR COLLEGE OF
ENGINEERING AND TECHNOLOGY
Under the guidance of
ASST.PROF. MANJU
Prepared by:
S.VIJAYALAKSHMI
(Enrollment No-952621631057)

1
 •

Preface

This project report is attempt to bring under hard work and

dedication put in by me in the completion of the project work on
perception of investors to invest in mutual fund at time of internship.
Practical training is an important part of the field of management. It
gives the students to explore the valuable treasure of experience and
an exposure to real work culture followed by the sector and helping
to bridge gap between the theories and practical implementations.
Research Project is plays an important role in future building of an
individual so that she can understand the real world in which I have
to work in future. I have completed the Research project on
“A STUDY ON ORGANIZATIONAL STRUCTURE ”. I have tried to cover
each aspect
related to the topic with best of my capability.

S.VIJAYALAKSHMI

2
 •

Acknowledgement

The project report concept in M.B.A. curriculum is of immense utility to

the students, project helps to assess the student’s ability to individually
conceive, conceptualize, execute and present a life-like project by making
use of the skills acquired during the course of study. My Project could not
have been fruitful without the able guidance of ASST.PROF.MANJU.
I extend my deepest gratitude to all the persons who gave me full support
during the project. Despite serious constraints of time and recourse, the
study was executed with sincerity and commitment. The report is
characterized by its straight forward, to the point approach, with bare
minimal reproduction of the theory of finance research. A deliberate effort
has been made to introduce novelty in the report.

With Thanks
S.Vijayalakshmi

3
 •

Table of content
Ch, No PARTICULAR

1. 1.1) Introduction of textile Industry

1.2) Introduction of Arvind Textile Limited

2. Literature Review

3 Introduction of study

4 Research Methodology

5 Data Analysis and Interpretation

6 Finding and Suggestion

7 Conclusion

8 Bibliography

4
 •

CHAPTER-1
1.1) INTRODUCTION OF
TEXTILE INDUSTRY

5
 •

• INTRODUCTION OF TEXTILE INDUSTRY

India`s textiles industry is one of the oldest industry in Indian economy
since from several centuries. Present data also refers that, textiles sectors is one
of the largest contributors to India’s exports with approximately 13 percent of
total exports. The textiles industry is also labor intensive and is one of the
largest employers. The textile industry has two broad segments. First, the
unorganized sectors consist of handicrafts handlooms, and sericulture, which
are operated on a small scale through traditional tools and methods. The second
is the organized sectors consisting of spinning, garment and apparel segment
which apply the upgraded and modern machinery and techniques such as
economies of scale.

The Indian textile industry is extremely varied, with the hand-woven and hand
spun textile industry at one end of the spectrum, while the capital-intensive
sophisticated mills sectors at the other end of the spectrum. The decentralized
power looms/hosiery and kitting sectors from the largest component of the
textile sectors. The close linkage of the textiles industry to agriculture (for raw
material such as cotton, etc.) and the ancient culture and traditions of the
country in terms of textile makes the Indian textiles sectors unique in
comparison to the industries of other countries. The Indian textile industry has
the capacity to produce a wide variety of products suitable to different market
segment, both within India and across the world.

The Indian textile industry employs about 105 million people directly and
indirectly.
India`s overall textile exports during FY 2017-18 stood at US$ 37.74 billion.
The Indian textile industry, estimated at around US$ 150 billion, is expected to
reach US$ 230 billion by 2020. The Indian textiles industry contributes
approximately 2 percent to India’s Gross Domestic Product (GDP). 14 percent

6
 •

to overall index of industrial productions (IIP) and 10 percent of manufacturing

productions.

HISTORY OF TEXTILE INDUSTRY

India has been well known for its textile products since very ancient times.
The traditional textiles industry of the India was virtually decayed during the colonial
regime. However, the modern textiles industry took birth in India in the early nineteenth
century when the first textile mill in the country was established at fort gloster near Calcutta
in 1818. The cotton textile industry, however, made its real beginning in Bombay (Mumbai),
in 1850s. The India`s first cotton textile mill of Bombay was established in 1854 by a Parsi
cotton merchant then engaged in overseas and internal trade. Indeed, the vast majority of the
early mills were the handiwork of Parsi merchants engaged in yarn and cloth trade at home
and Chinese and African markets.

The first cotton mill in Ahmedabad, which was eventually to emerge as a rival center to
Bombay, was established in 1861. The spread of the textile industry to Ahmedabad apart
from Bombay was largely due to the Rajapalayami trading class.

The cotton textile industry made rapid progress in the second half of the nineteenth century
and by the end of the century there were 178 cotton textile mills; but during the year 1900 the
Indian cotton textile industry was in bad state due to be closed down for a long period.

7
 •

RAJAPALAYAM TEXTILE INDUSTRY

Rajapalayam is one the main modern states in India and material industry in
India specifically had contributed in huge way to the industrialization of the state. Truth be
told, improvement of the numerous ventures like dyestuff, synthetic compounds
Engineering/foundry and cotton cultivating is exclusively subject to these areas. The state is
notable for advancement of mixture cotton, ginning, power looms, composites plants, turning
units and autonomous handling houses.

In Rajapalayam, material producers use cotton-based textures in plant area,

significant explanation being the accessibility of the essential unrefined components in the
state, i.e., cotton. Essentially, many turning units creating more moderate yarns were set up in
the state. The state turned out to be more moderate with cotton material items mostly in the
coordinated area, weaving and manufactured material in decentralized area. Surat
workmanship silk makers are just exemption also, autonomous handling units process
manufactured mixed and cotton textures. Bunches of handling units are situated in Surat,
Ahmedabad and Jaipur, however these creation units have great limit of handling wide scope
of texture.

Readymade piece of clothing assembling and hosiery knitwear unit likewise

exists in SSI classes. In mid 1990's Rajapalayam saw emotional change in its material
industry situation where many material factories began fabricating denim. The Arvind
factories, Ashima Textiles, Soma Textiles, Modern Denim, and Arvee denim began
fabricating denim.

8
 •

MAJOR PLAYERS OF TEXTILE INDUSTRY

Here is the list of top 10 textile companies in India.

• Arvind Ltd

Arvind Ltd was started in the year 1931. The company is headquartered in Ahmedabad,
India. It is offering a range of products including Denim, Knits, and Woven etc. It is one of
the top denim manufacturers in India. The company is also running its retail and clothing
chain.

• Bombay Dyeing and Manufacturing Company Ltd

Bombay Dyeing and Manufacturing Company is one of the top textile companies in India. It
was founded in the year 1879. It is Flagship Company of Wadia Group. It is offering wide
range of products including Bed Linen, Furnishings, and Towels.

• Bombay Rayon Fashions Ltd

Bombay Rayon Fashions Ltd is one of the leading textile companies in India. It is offering
wide-range of products including Lycra, Wool, Tencel, and Polyester. It has very good fabric
manufacturing capacity. It is rapidly growing textile companies in India.

• FabIndia Overseas Pvt. Ltd

FabIndia was founded in the year 1960 by John Bissell. Headquarter is located in New Delhi,
India. Today, it has opened stores all across the country. The company is also promoting
rural employment by sourcing products from Indian Villages. It has also started the
successful retail business in India.

9
 •

• Grasim Industries Ltd

Grasim Industries Ltd was founded in the year 1948 in Mumbai. Headquarter is located
in Mumbai, Maharashtra. It is the subsidiary of Aditya Birla Group. Grasim Industries is
one of the world’s largest producer of Viscose Staple Fiber. Aditya Birla Group is the
parent company of Grasim Industries Ltd. It is exporting its products to various
countries.

• JCT Ltd

JCT Ltd is one of the leading textile companies in India.

• Karnataka Silk Industries Corporation Ltd

Mysore is known for its rich cultural heritage. It produces a very good quality silk. KSIC
especially formed to promote the cultural heritage that is silk. Since last many years it is
producing good quality silk that is distributed all across India. It is manufacturing quality
silk admired all over India. Its product range includes Silk Dhoti, Men’s Tie, Salwar
Kameez, Silk Sarees, and Kurta etc.

• Raymond Ltd

Raymond Ltd was founded in the year 1925. It is headquartered in Mumbai, India. It is
producing wide range of products including fabrics, garment, designer wear, denim etc. It
is among the most trusted fabric brands in India. Raymond opened retail shops all across
India and overseas as well.

• The Lakshmi Mills Company Ltd

Lakshmi Mills Company was founded in the year 1910 by G. Kuppuswami Naidu.
Headquarter is located in Coimbatore, Tamil Nadu. It is offering a huge range of products
including textile yarn, textile garments, weaving, and spinning. Its parent company is
Lakshmi Machine Works

10
 • CHALLENGES FACED BY TEXTILE INDUSTRY

The Indian textiles and apparel industry plays a crucial role in contributing to
employment generation, industrial output and export earnings. However, in its race
towards becoming the second largest producers of textiles and apparel in the world, it has
faced several challenges and continues to battle them to not only retain its position in the
global map but also to improve it.

LABOUR
ILLICIT
REALTED
MARKETS
CONCERNS EXCISE DUTY
POWER ON MAN
SHORTAGE MANDE
FIBRES

THREATS TO RAW
HANDLOOM MATERIAL
SECTORS SHORTAGE

challenges
OBSOLATE faced by
MACHINERY IMAPCT ON
AND indian ENVIRONMENT
TECHNOLOGY textile
industry

• The Indian textile industry faces acute shortage of raw materials in the form of cotton
and raw silk. Fluctuating prices and uncertainties in the availability of raw materials
leads to low productions and sickness of mills.
• Labor related issues such as threat to safety and health of worker, poor working
environment, and exploitation of children, strict labor laws and skill gap pose a major
challenge to the industry.
• The manufacturing activities of the textiles and apparel industry greatly impact the
environment in the form of air and water emission. Alternative process solution that
are eco-growing and cost effective are therefore necessary, to meet increasing
demands of the ever-growing and competitive market, in a sustainable manner.

11
1.2) INTRODUCTION OF
COMPANY

12
 Rajapalayam Mills, a Ramco group company, was established in 1938, founded by PAC Ramasmy Raja
with 6800 spindles imported from England. Rajapalayam Mills today produces 11 million kg of yarn per
year, employs more than 1000 workers and has a turnover of over Rs1818 million. It is acknowledged as
the most efficient spinning mills in the industry.
Rajapalayam Mills has set the industry standard for quality and price in cotton yarn manufactured with a
production increase of about 40% purely through modernization. Present capacity : 1,21,856 Spindles
(including 56,080 compact spinning spindles, 11568 Eli–Twist spindles and 2400 Slub Yarn Spindles). The
company is also having 2000 Rotors in Rajapalaiyam and around 2000 Rotors in Andhra Pradesh.
Textile business is the first business venture of Ramco Group with setting up of Rajapalayam Mills Ltd  in
1938.
A technologically advanced unit right from its inception, the mill?óÔé¼Ôäós state–of–the–art equipment
ensures optimum spinning efficiency and profitability. The mill traditionally makes quality counts from 6?
óÔé¼Ôäós to 220?óÔé¼Ôäós, added capacity to produce value added yarns like Compact, Elitwist, Slub,
Gazzed yarn in singles and doubles. It export 80% of its spinning capacity to the highly quality–conscious
markets like Japan and also to other countries like Korea, China, Hong Kong, Malaysia, Indonesia,
Thailand, Pakistan, Dubai, Bahrain, Italy and Spain etc.
The mill has had stable harmonious industrial relations for over 40 years. The management has evolved a
number of welfare schemes to motivate its workforce and meet the various needs of them such as cheap
credit, housing loans, interest–free marriage loans, educational subsides medical aid to the public at
reduced rate. It also runs many Educational Instutions to impart quality education at affordable rate to the
students in and around Rajapalayam. An educational trust has been established in the name of the
founder Shri PAC Ramasamy Raja, which offers many social services to uplife the living standards of
people in Rajapalayam.
The instaled capacity of the mill is 96,224 spindles and 1,344 rotors. It produces over nine million Kgs of
yarn per annum, employing more than 1000 workers with a turnover of over Rs. 147 crores  Rajapalayam
Spintext  and Rajapalayam Textiles are the two divisions of company.
It is one of the most advanced textile mill in the country and is setting the industry standard for quality and
price for many years. Rajapalayam Mills is the first in the country to acquire an Open End Spinning
machine in early eighties.
Product range of the company includes:
Rajapalayam Mills Ltd is engaged in manufacture and sale of yarns
 Ring Yarn (Ne) – 30/1 to 120/1
 Compact Yarn (Ne) – 30/1 to 140/1
 Elitwist Compact Yarn (Ne) – 40/2 to 200/2
 TFO Doubled Yarn (Ne) – 40/2 to 160/2
 Gassed Yarn (Ne) – 40/2 to 220/2
 Slub & Multicount Yarn (Ne) – 16s to 94s
 Model / Tencel Yarn (Ne) – 20s to 40s
 OE Yarn (Ne) – 4s to 20s
 Organic Cotton Yarn – 30s to 60s
Awards/ Achievements
 Rajapalayam Mill Ltd is the first company to be awarded in South India for ?óÔé¼?ôUsterized?óÔé¼?Ø
certificate from Switzerland.
 It also bagged the coveted ?óÔé¼?ôOeko–tex standard 100?óÔé¼?Ø certificate which assures that
there are no dangerous metals present in its yarns.

13
 The mill also has obtained the accredition to use ?óÔé¼?ôSupima Cotton?óÔé¼?Ø logo for excellence
in quality.

(Sacratee S. J., Sankar M. and Ayyanar A., 2011) Stated the structure of Indian
textile industry. This industry can be broadly divided into the cotton and the non-
cotton industry. The cotton textile industry can be divided into organized and
unorganized sector. Organized sector consists of spinning mills and composite mills.
The unorganized sector consists of handloom, power loom, khadi and knitting sector.
Textile industry contributes about 14 percent to industrial production, 4 percent to the
GDP and 17 percent to the country`s export earnings. Such industry has largest
employment provider. It is one the mainstays of national economy.

(Phukan Raju, 2012) Stated that handloom sector provides direct employment to
over 65 lac people in India in the year 2009-10 among them 60.40 percent are
women. Poor marketing and insufficient market linkage outside the state distress the
industry from growing and earning more revenue.

(Kavin, S., 1989) Conducted a study on textile industry in Kerala with a comparative
reference to Tamil Nadu. According to him Kerla textile industry has revealed a
plethora to weaknesses. Low profitability, inter-mill variation in profitability low
ownership contribution, high debt financing, excessive reliance in short-term finance,
scare internal resources generation, poor debt-service capacity, negative working
capital, insufficient liquidity, over investment of raw material and store and spares.
The study presents the picture of an industry which is hardly profitable and almost
insolvent.

(Kumar, 2006) Did study of various sectors of Indian and Chinese textiles. This
paper concludes and highlights the various areas where Indian has efficiency over
China and how India should more capitalize on it. Also, it gives equally weight age to
14
Chinese advantages and how India can win over its weaker areas to be more
competitive in long run.

(Chugan, 2006) Discussed opportunities available for various sector of Indian textiles
industry in the post quota era. Study also examined the weaker link, competitions
from China and the schemes run by government to support India textile industry.

(Joshi, R.N., Singh, S.P., 2008) examined the trends in the India’s textile and
clothing export in the post-MFA regime. The study found that the growth of India’s
clothing and textile export turns out to be greater than that of the China’s.
(Chaudhary, 2007) Technical textiles an evolving stage in India articled define the
consumption and import situation for TTI concern. He also referred to government
initiatives to discontinue the deficiency of the technical textiles industry in India.
Further, he referred that India can create solid economic environment for TTI
because of the abundance of raw material and cheap labor but here is a need for
attentiveness of both private and government sectors for the systematic circulatory
economy development.
(Neetesh Bhargava, 2015) Impart the information about Indian textile industry.
This industry as the second largest industry provided not only one of the basic need
of people clothing also severed industrial need in technical aspects in field of agro,
biotech, aerospace and automobile, etc. Precise research and reports form 2001 to
current date focus on the growth of technical textiles. The research shows nation
growth of TTI segment-wise, specific segment growth of TTI at a localized level is
a gap know the actual situation of growth to minimize the challenges of the
industry. (Keenan, 2004) Researchers who have explored the textiles and apparel
sectors of European nations have opined that frequent shutdown of plants and loss
of employment in the last decade were resulted to upset their market expansion. It
was stated that quota elimination in 2005, value-chain, building competitiveness on
new technology, innovation and design possess challenging task to the Europe
textile and apparel industry.
(Londhe, 2017) Determinants of competitiveness in Indian textile and apparel
industry and world studies signify the sustainable competitiveness of Indian silk and
handloom sector is Charaj model of silk and handloom competitiveness index
15
 CHAPTER-3
INTRODUCTION TO STUDY

• WORKING CAPITAL MANAGEMENT

• INTRODUCTION

Working capital is required to ensure that a firm is able to continue its

routine operations and that it has sufficient funds to satisfy both maturing short-term
debt and upcoming expenses. The administration of working capital includes
overseeing inventories, cash and records receivable and payable.

16
• DEFINITION

The working capital is an accounting concept which represents the

excess of current assets over current liabilities. In which current assets includes items
such as cash and bank balance, debtors, stock etc. and current liabilities includes
items such as creditors, bills payables, etc.

If current assets are less than current liabilities, an entity has a working
capital deficiency, also called a working capital deficit.

Working capital = total current assets – total current liabilities

Current assets and current liability include three main account which are as follows:

Account Receivables

• Current Assets
Inventory

• Current liability Account Payables

• TYPES OF WORKING CAPITAL

Working capital is divided into various types/categories based on
balance sheet view and operating cycle view. Balance sheet view divides into two
type gross working capital and net working capital. The operating cycle view
divides into permanent and temporary working capital. Permanent working capital

17
 is further divided into seasonal and special working capital whereas temporary
working capital into regular and reserve working capital.

Working Capital

Balance Sheet Operating Cycle

View View

Gross Working Variable/Temporar

Fixed/Permanent
Capital y

Net Working Seasonal

Capital Working Capital

Special Working
Capital

https://efinancemanagement.com/working-capital-financing/types-of-working-capital

• Balance Sheet View

According to this concept, working capital is calculated on the basis of the
balance sheet prepared at a specific date. It is further classified it two forms- gross and
net working capital.

18
 1. Gross Working Capital
The gross working capital refers to the firm’s investment in current assets. The
sum of current assets is a quantitative aspect of working capital which emphasizes more
on quantity than its qualities.

2. Net Working Capital

Net working capital is the difference between the current assets and the
current liabilities or the excess of total current assets over total current liabilities. Net
working capital may also be defined as, that part of a firm’s current assets which is
financed with long term funds. The net working capital may either be positive or
negative. When current assets exceed current liabilities, working capital is positive and
negative when current liabilities exceed current assets.

• Operating Cycle View

Working capital is the amount required in different forms at successive
stages of operation during the net operating cycle period of an enterprise. The
duration or time required to complete the sequence of events right from purchase of
raw materials/goods for cash to the realization of sales in cash is called the operating
cycle or working capital cycle. On the basis of time working capital may be classified
as (i) Fixed/Permanent capital; and (ii) Variable or temporary capital.

1. Fixed/Permanent capital

It represents the irreducible minimum amount that is permanently blocked

in the business and cannot be converted into cash in the normal course of business. It has
following characteristics:

A) It keeps on changing its form from one current asset to another

B) The size of working capital grows with the growth of the business
C) As long as the firm is a going concern, this part of working capital cannot
substantially be reduced.

19
 2. Variable or temporary capital

Any amount over and above the permanent working capital is variable or
temporary working capital. It fluctuates as per the change in the production and sale
activities. It can further be classified in following two forms:

A) Seasonal working capital – The capital required to meet the seasonal demands of
the enterprise is called seasonal working capital. It is of short-term nature and thus
has to be financed from short-term sources like bank loan etc.
B) Special Working Capital – Special working capital is that part of the working
capital which is required to meet unforeseen contingencies like slump, strike,
flood, war etc.

• IMPORTANCE OF WORKING CAPITAL

The importance of adequate working capital in any business concern
can never be over emphasized. A concern requires sufficient working capital to carry
on its routine operations smoothly and efficiently. Lack of adequate working capital

20
not only impairs firm`s profitability but also results in stoppage in production and
deficit payment of its current obligations.

Increase in Advantages
Smooth
Liquidity of Cash
run/Flow of
and Solvency
Production Discount
Position

Regular meet smooth

Payment of unforseen Completion
current Contingencie operating
obligation s cycle

https://efinancemanagement.com/working-capital-financing/importance-of-working-capitalmanagementhttps://
efinancemanagement.com/working-capital-financing/importance-of-working-capitalmanagement

21
 CHAPTER-4
RESEARCH
METHODOLOGY

REASEARCH METHODOLOGY

Working capital management is a very crucial component of corporate

finance because it directly affects the liquidity and the profitability of any company. A
firm always required to maintain the balance between liquidity and profitability while
conducting company`s day to day operations. Liquidity is a precondition to ensure that a
company is able to meet its short-term obligations and its continued flow can be
guaranteed from a profitable venture.

5.1) NEED OF THE STUDY:

Scarcity of working capital is a deadlock for any organization. So, to

ensure proper functioning of any company minimum level of working capital needs must
be satisfied. Basically Arvind Mills Working capital Aspects are covered in this research
part, which may be a potential borrower company and then once after studying financial
data and analyzing probable amount of working capital gap if any, We will match the

22
requirement of Arvin mill with the prospective investors. So, it becomes very significant
to undertake a comprehensive study of Arvind Mills as a part of our research project.

5.2) PROBLEM IDENTIFICATION:

The basic research problem is to determine financial constraint and financial

deficiency. The working capital inefficiency is the main problem as the cost is increasing
and profit is decreasing which may cause the working capital shortage in the Arvind
mills.

5.3) SCOPE OF THE STUDY

The scope of the study is mainly working capital assessment, financial analysis,
impact of cost and revenue on the profit, profit & loss account analysis. This all analysis
are done for identifying the working capital need and gap.

5.4) RESEARCH OBJECTIVE:

The main research objective is “a comprehensive study on working capital

management of Arvind mills ltd.” The aim of this study is to identify the working capital
Gap and allocation of capital in the business to increase in efficiency in operation.
Various tools and techniques are used to identify the appropriate requirement and gap of
working capital.

5.5) RESEARCH DESIGN:

Two types of research is being used in this research study to identify and explore
some problems and get some solutions for that problems:

23
 1. Descriptive Research
The descriptive research is also being used in this research study to
describe explored problem in detail. It help us to describe the various
features of the problem and also help for deep understanding to resolve the
problem statement of any company.

5.6) DATA SOURCES

Secondary data is used in this research

• Internet
• Annual report of Arvind mills year 2020-21
• Annual report of Arvind mills year 2019-20
• Annual report of Arvind mills year 2018-19
• Annual report of Arvind mills year 2017-18
• Annual report of Arvind mills year 2016-17

5.7) TOOLS & TECHNIQUES

The tools & technique used are as follows:

▪ Ratio Analysis
▪ Cash Flow Analysis
▪ Trend Analysis
▪ MS Excel

24
 CHAPTER-5
ANALYSIS AND
INTERPRETATION

25
 • PROFIT AND LOSS ACCOUNT
------------------- in Rs. Cr. -------------------
INCOME March `21 March`20 March`19 March`18 March` 17
Revenue From Operations
[Gross] 4348.79 6434.91 6242.92 6040.98 5669.54
Less: Excise/Service Tax/Other
Levies 0 0 0 2.92 0
Revenue From Operations [Net] 4348.79 6434.91 6242.92 6038.06 5669.54
Other Operating Revenues 179.75 270.4 193.04 382.36 311.42
Total Operating Revenues 4528.54 6705.31 6435.96 6420.42 5980.96
Other Income 64.62 80.16 103.85 74.96 103.10
Total Revenue 4593.16 6785.47 6539.81 6495.38 6084.06

EXPENSES
Cost Of Materials Consumed 1952.93 3158.37 2822.50 2600.60 2394.65
Purchase Of Stock-In Trade 107.44 214.71 154.70 325.61 248.11
Operating And Direct Expenses 23.97 27.69 4.44 9.22 12.87
Changes In Inventories Of
FG,WIP And Stock-In Trade 131.16 64.27 3.27 73.61 -98.63
Employee Benefit Expenses 586.88 776.12 779.19 784.54 777.25
Finance Costs 209.65 224.10 213.38 177.68 221.87
Depreciation And Amortization
Expenses 236.43 240.54 209.75 208.85 184.91
Other Expenses 1261.73 1770.74 2038.73 2000.86 1928.22
Total Expenses 4510.19 6476.54 6225.96 6181.97 5669.25

26
Profit/Loss Before Exceptional,
Extraordinary Items And Tax 82.97 308.93 313.85 314.33 414.81
Exceptional Items -26.93 -58.82 -70.85 -22.72 -280.17
Profit/Loss Before Tax 56.04 250.11 243 291.61 134.64
Tax Expenses-Continued
Operations
Current Tax 3.40 48.71 53.56 60.93 49.54
Less: MAT Credit Entitlement 0 0 0 0 0
Deferred Tax -35.20 18.07 -56 -20.62 65.92
Tax For Earlier Years -4.83 11.95 31.97 1.26 0.62
Total Tax Expenses -36.63 78.73 29.53 41.57 116.08
Profit/Loss After Tax And
Before Extraordinary Items 92.67 171.38 213.47 250.04 18.56
Profit/Loss From Continuing
Operations 92.67 171.38 213.47 250.04 18.56
Profit/Loss From Discontinuing
Operations 0 0 -20.70 0 0
Total Tax Expenses
Discontinuing Operations 0 0 6.67 0 0
Net Profit/(Loss) From
Discontinuing Operations 0 0 -14.03 0 0
Profit/Loss For The Period 92.67 171.38 199.44 250.04 18.56

OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 3.58 6.62 7.71 9.67 0.72
Diluted EPS (Rs.) 3.57 6.62 7.71 9.65 0.72
VALUE OF IMPORTED AND
INDIGENIOUS RAW
MATERIALS
Imported Raw Materials 0 0 0 0 0
Indigenous Raw Materials 0 0 0 0 0
STORES, SPARES AND
LOOSE TOOLS
Imported Stores And Spares 0 0 0 0 0
Indigenous Stores And Spares 0 0 0 0 0
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 0 51.75 62.07 62.04 61.98
27
Tax On Dividend 0 10.07 12.34 11.61 12.62
Equity Dividend Rate (%) 0 0 20 24 24

• BALANCE SHEET
------------------- in Rs. Cr. -------------------
March `21 March`20 March`19 March`18 March`17
Sources Of Funds
Total Share Capital 258.92 258.77 258.62 258.62 258.36
Equity Share Capital 258.92 258.77 258.62 258.62 258.36
Share Application Money 0.00 0.00 0.00 0.00 2.17
Reserves 2682.08 2594.92 2557.5 2899.61 2751.25
Net worth (A) 2941.00 2853.69 2816.12 3158.23 3011.78
Secured Loans 1700.93 2065.04 2505.49 2437.41 2323.81
Unsecured Loans 71.65 118.00 0.00 0.00 0.00
Total Debt (B) 1772.58 2183.04 2505.49 2437.41 2323.81
Total Liabilities (A+B) 4713.58 5036.73 5321.61 5595.64 5335.59

Application Of Funds
Gross Block 4239.55 4271.15 3819.99 3624.30 3409.25
Less: Accum. Depreciation 981.79 810.38 647.68 476.40 309.56
Net Block (A) 3257.76 3460.77 3172.31 3147.90 3099.69
Capital Work in Progress (B) 74.48 70.58 189.58 59.65 76.65
Investments (C) 531.97 525.47 516.53 883.25 522.96
Inventories 998.7 1038.46 1364.93 1307.72 1299.24
Sundry Debtors 933.68 898.32 714.38 736.61 470.96
Cash and Bank Balance 19.25 30.12 31.19 14.36 13.41
Total Current Assets 1951.63 1966.9 2110.5 2058.69 1783.61
Loans and Advances 792.89 790.83 1024.96 894.58 975.02
Total CA, Loans & Advances 2744.52 2757.73 3135.46 2953.27 2758.63
Current Liabilities 1861.92 1722.60 1637.55 1403.26 1088.78
Provisions 33.23 55.22 54.72 45.17 33.56
Total CL & Provisions 1895.15 1777.82 1692.27 1448.43 1122.34

28
Net Current Assets (D) 849.37 979.91 1443.19 1504.84 1636.29
Total Assets (A+B+C+D) 4713.58 5036.73 5321.61 5595.64 5335.59

Contingent Liabilities 264.39 278.72 970.61 148.95 0.00

Book Value (Rs) 113.59 110.28 108.89 122.12 116.49

• CASH FLOW STATEMENT

------------------- in Rs. Cr. -------------------
March March` March` March` March`
21 20 19 18 17
Net Profit/Loss Before Tax 92.67 171.38 199.44 250.04 18.56
Net Cash Flow From Operating
Activities 768.23 982.91 725.16 553.84 535.91
Net Cash Used In Investing Activities -137.60 -336.54 -509.82 -441.03 461.05
Net Cash Used From Financing
Activities -641.34 -650 -199.76 -108.10 -1012.14
Net Inc/Dec In Cash And Cash
Equivalents -10.71 -3.63 15.58 4.71 -15.18
Cash And Cash Equivalents Beginning
of Year 19.21 22.84 7.26 2.55 17.73
Cash And Cash Equivalents End Of Year
8.50 19.21 22.84 7.26 2.55

29
 • WORKING CAPITAL MANAGEMENT
COMPUTATION OF WORKING CAPITAL
Particulars 2021 2020 2019 2018 2017
------------------- in Rs. Cr. -------------------
CURRENT ASSETS
Inventories 998.7 1038.46 1364.93 1307.72 1299.24
Sundry Debtors 933.68 898.32 714.38 736.61 470.96
Cash and Bank Balance 19.25 30.12 31.19 14.36 13.41
TOTAL CURRENT ASSETS (A) 1951.63 1966.9 2110.5 2058.69 1783.61

CURRENT LIABILITIES
Trade payable 1322.4 1118.31 1194.45 948.94 616.73
Other Current Liabilities 539.52 604.29 443.1 454.32 472.05

TOTAL CURRENT
LIABILITIES (B) 1861.92 1722.6 1637.55 1403.55 1088.78

WORKING CAPITAL (A-B) 89.71 244.3 472.95 655.43 694.83

30
GRAPHICAL PRESENTATION
1000

900

800

700
WORKING CAPITAL

600

500

400

300

200

100

0
2020 - 21 2019 - 20 2018 - 19 2017 - 18 2016 - 17
YEAR OF PRODUCTION

INTERPRETATION: -
From the above graph, it was found that there is a huge fluctuation between working
capital from year by year. There is a sudden decrease in working capital in FY 2020-21.
The main reason behind this sudden increase in working capital is Increase in total
current liability and decrease in the total current assets of the company. And which is not
good for the company.

• RAW MATEIAL HOLDING PERIODS

TABULAR PRESENTATION
year Formula calculation inventory period
2020-21 322.87 * 12 2 Month
1952.93

average stock of raw material

2019-20 cost of raw material consumed 227.95 * 12 0.86 Month
3158.37

2018-19 453.75 * 12 1.9 Month

2822.50

31
2017-18 375.31 * 12 1.73 Month
2600.60

2016-17 300.25 * 12 1.5 month

2394.65

GRAPHICAL PRESENTATION
Raw Material Conversation

2.5
2 1.9
2 1.73
1.5
1.5
Period

1 0.86

0.5

0
2020-21 2019-20 2018-19 2017-18 2016-17
Year Of Production

INTERPRETATION:

From the above graph, it was found that company has inventory holding period which is
more than ideal period (1 month). The pattern of graph also reveals that in first three
financial years and in FY 2020-21 there is a continuous increase in inventory holding
period which might be because of increase in stock and purchase of raw material.

• WORK-IN-PROGRESS HOLDING PERIOD

TABULAR PRESENTATION

work in progress

32
 year Formula calculation inventory period
2020-21 297.78 * 12 1.8 Month
1992.69
2019-20 378.63 * 12 1.3 Month
average stock of WIP 3484.84
2018-19 cost of goods sold 446.8 * 12 1.9 Month
2765.29
2017-18 443.21 * 12 2.1 Month
2592.12
2016-17 460.77 * 12 2.5 month
2232.61

GARPHICAL PRESENTATION
WIP HOLDING PERIOD

3
2.5
2.5
2.1
1.8 1.9
2
1.5 1.3

1
0.5
0
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION

From the above graph, it was found that work-in-progress holding period is decreasing.
The reason behind this change is might be decrease in stock of work-in-progress. The
COGS of the company is also fluctuating which will also cause Less holding period.

• FINISHED GOOD HOLDING PERIOD

TABULAR PRESENTATION

finished goods

33
year Formula calculation inventory period
2020-21 249.3 * 12 1.5 Month
1992.69
2019-20 * 12 1.1 Month

average stock of finished goods

2018-19 cost of goods sold 338 * 12 1.5 Month
2765.29
2017-18 307.29 * 12 1.4 Month
2592.12
2016-17 368.76 * 12 2 Month
2232.61

GRAPHICAL PRESENTATION

2.5
2.0
FG HOLDING PERIOD

1.5

1.0

0.5

0.0
2020-21 2019-20 2018-19 2017-18 2016-17

YEAR OF PRODUCTION

34
INTERPRETATION

From the above graph, it was found that as compare to the ideal ratio the actual ratio is
too high which is not good for the company. This is because of the changes in the stock
of finished goods and also fluctuation in cost of goods sold.

• DEBTORS COLLECTION PERIOD

TABULAR PRESENTATION

debtors collection period

Year Formula Calculation Debtors Collection
Period

2020-21 933.68 * 12 2.58 Month

4348.79
2019-20 898.32 * 12 1.68 Month
average debtors 6434.91
2018-19 credit sales 714.38 * 1.37 Month
12 6242.92
2017-18 736.61 * 12 1.46 Month
6040.98
2016-17 470.96 * 12 0.94 Month
5980.96

GRAPHICAL PRESENTATION

3
DEBTORS COLLECTION

2.5
2.58
2
PERIOD

1.5 1.68
1.37 1.46
1
0.94
0.5

0
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

35
INTERPRETATION:
From the above graph, it was found that in FY 2020-21 it had increased so much
compared to past years. which is not good for the company this is because Company is
allowing its Customers more than required time for Payment and because of which
company has less liquidity.

• ACCOUNT PAYABLE PERIOD

TABULAR PRESENTATION

Year Formula Calculation Payable Period

2020-21 1322.4 * 12 8.13 month
1952.93
2019-20 1118.31 * 12 4.25 month
3158.37
2018-19 creditors 1194.45 * 12 5.08 month
credit purchase 2822.5
2017-18 948.94 * 12 4.38 month
2600.60
2016-17 616.73 * 12 3.1 month
2394.65
GRAPHICAL PRESENTATION
ACCOUNT PAYABLE PERIOD

9
8
8.13
7
6
5
5.08
4 4.38
4.25
3
3.1
2
1
0
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

36
 INTERPRETATION:

From the above graph, it was found that the account payable period is fluctuating. But in
FY 2020-21 there is sudden increase in account payable period because company is
delaying payment to its creditors. As compare to ideal ratio, the actual ratio is very high
which is not good for the company. This is because of the increase in the credit sales of
the company.

• WORKING CAPITAL RATIOS

FORMULA

Sr.No. Ratio Formula

1. Inventory holding cash (cost of raw material consumed/12)*RMCP

2. WIP holding cash (cost of production/12)*WIPCP

37
3. Finished goods holding cash (Cost of goods sold/12)*FGCP

4. Debtors holding cash (credit sale/12)*DCP

5. Account payable cash (credit purchase/12)*CDP

6. Wages (total wages/12)*WCD

• INVENTORY HOLDING CASH

TABULAR PRESENTATION

Raw Material Cost

Year Formula Calculation Investment
2020-21 325.49
* 2

2019-20 226.35
Cost of Raw Material Consumed *RMCP * 0.86
12
2018-19 446.90
* 1.9

2017-18 374.92
* 1.73

38
2016-17 2394.65 * 1.5 12 299.33

GRAPHICAL PRESENTATION

450.00

400.00
INVENTORY HOLDING CASH

350.00

300.00

250.00

200.00

150.00

100.00

50.00

0.00
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION

From the above graph, it was found that there is an upward trend in raw material
consumption and investment in raw material from FY 2016-17 to 2018-19, As raw
material is increasing it shows that production and sales is also increasing which is good
for the company. And if consumption is increased the investment of material also
increased. But From FY 2019-20 onwards investment in raw material is decreasing,
which shows that production and sales is also decreasing which is not good for the
company

• WORK-IN-PROGRESS HOLDING CASH

39
TABULAR PRESENTATION

WIP holding cash

year Formula Calculation Investment
2020-21 2270.2 * 1.8 340.53
12
2019-20 3467.90 * 1.3 375.60
Cost Of Production *WIPCP 12
2018-19 12 3028.66 * 1.9 479.54
12
2017-18 494.73
* 2.1
2016-17 530.25
* 2.5

GRAPHICAL PRESENTATION

600
WIP HOLDING CASH

500

400

300

200

100

0
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION
From the above graph, it was found that there is a continuous decrease in the work-
inprogress consumption and investment. The decrease in WIP holding cash is because of
the cost of production is also decreasing which require less investment.

40
 • FINISHED GOODS HOLDING CASH

TABULAR PRESENTATION

Finished Goods Holding Cash

Year Formula Calculation Investment
2020-21 1992.69 * 1.5 249.09
12
2019-20 3484.8 319.44
4* 1.1
Cost Of Goods Sold *FGCP
12
2018-19 345.66
* 1.5
2017-18 302.41
* 1.4
2016-17 372.10
* 2

GRAPHICAL PRESENTATION
FG HOLDING CASH

400.00

300.00

200.00

100.00

0.00
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION
From the above graph, it was found that the investment in finished stock is decreasing
which might be because of changes in the cost of goods sold. As the stock of finished
goods is decreasing it directly reflect (negatively) in production capacity and sales of the
company
41
 • DEBTORS HOLDING CASH

TABULAR PRESENTATION

Debtors Holding Cash

year Formula Calculation Investment
2020-21 4348.79 * 2.58 934.99
12
2019-20 6434.91 * 1.68 900.89
Credit sales *DCP 12
12
2018-19 6242.92 * 1.37 712.73
12
2017-18 6040.98 * 1.46 734.99
12
2016-17 5980.96 * 0.94 470.96
12
GRAPHICAL PRESENATAION

1000.00
900.00
DEBTORS FOLDING CASH

800.00
700.00
600.00
500.00 934.99 900.89
400.00 712.73 734.99
300.00 470.96
200.00
100.00
0.00
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION
From the above graph, it was found that the debtors holding cash is increased, because of
the increase in credit sales of the company. The company has increased its credit sales
which will directly affect the receivables of the company and result into more cash
holding.
42
 • ACCOUNT PAYABLE CASH

TABULAR PRESENATION

Year Formula Calculation Investment

2020-21 1952.93 * 8.13 1323.11
12
2019-20 3158.37 * 4.25 1118.59
12
2018-19 Credit purchase *CDP 2822.5 * 5.08 1194.86
12 12
2017-18 2600.6 * 4.38 949.22
12
2016-17 2394.65 * 3.1 618.62
12

GRAPHICAL PRESENTATION

1400.00

1200.00
ACCOUNT PAYABLE CASH

1000.00

800.00

600.00

400.00

200.00

0.00
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

43
INTERPRETATION
Form the above graph, it was found that form FY 2016-17 to FY 2019-20 the company is
trying to balance their account payables. The credit payable holding cash is increased due
to increase in the credit purchase of the company. But in FY 2020-21 though credit
purchase had decreased but as company’s account payable period is more, company is
able to maintain its credit payable holding cash.

• WAGES
TABULAR PRESENTATION

wages
year Formula calculation investment
2020-21 498.32 * 1 41.53
12
2019-20 679.37 * 1 56.61
Total Wages *WCP 12
2018-19 12 677.26 * 1 56.44
12
2017-18 55.28
*1
2016-17 54.06
* 1

GRAPHICAL PRESENTATION

44
 60.00
WAGES
40.00

20.00

0.00
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION
From the above graph, it was found that there is a continuous increase in cost of wages
and salaries of the company from FY 2016-17 to FY 2019-20. Which clearly defines that
the company is in growth stage as they requiring more and more employees to work. The
wages are increased as the company is paying more attention in payment of wages,
increment, and other benefits. But suddenly in FY 2020-21 wages had decreased by the
reason that company had removed its employees.

• CURRENT RATIO

TABULAR PRESENTATION
CURRENT RATIO
year formula Calculation Ratio
2020-21 1951.63 1.05

2019-20 1.14
Current Assets
Current Liability
2018-19 1.29

2017-18 2058.69 1.47

1403.26
2016-17 1783.61 1.64
1088.78

45
GRAPHICAL PRESENTATION

1.8
1.6
1.4
CURRENT RATIO

1.2
1
0.8
0.6
0.4
0.2
0
2020-21 2019-20 2018-19 2017-18 2016-17
YEAR OF PRODUCTION

INTERPRETATION

From the above graph, it was found that in Form F Y 2016-17 to 2020-21, the Current
ratio is decreasing and in FY 2020-21 the current ratio is decreased due to increase in the
total current liability as well as decrease in the total current assets of the company. The
company is not performing good as it is decreasing the current assets.

CHAPTER-6
46
 FINDING AND
SUGGESTION

• FINDINGS
Based on the ratio related to working capital it was found that –

• There is a huge fluctuation in the working capital requirement and management

due to the sudden decrease in the total current liability of the company. As per
the analysis it was found that the total current assets of the company is also
increased.

• From the aspect of inventory holding including raw material, work-in-progress,

finished goods, it was found that it contains too much holding periods due to
increase in the stock of the inventories and the increase in the purchase of the
material for production.

47
 • The debtor’s collection period of the Arvind Mills is good as compare to ideal
ratio which is around 1 month. This shows that company follows the moderate
credit collection policy to get as soon as possible the receivable amount from
debtors.

The company is working well in its debtor’s collection. The moderated

credit policy will Help Company in two aspects- one is it will help to complete the
cash conversation cycle at time and free up the capital of the company. Second
one is help to maintain relationship with debtors as they are not too strict and also
liberal with the debtors.

• From the analysis of wages, it was found that the cost of wages is increasing due
to more employees hired which clearly intense that company is growing.
Company is paying attention to increment in wages which will also cause

increase in wages.

• SUGGESTION
From the analysis and finding following are the suggestion for the Arvind Mills:

• Arvind mills needs to control their cost of material as their cost is increasing it
will reduce the profit. They can reduce their cost by reducing carrying cost,
ordering cost and also by using various methods and techniques for inventory
management respect to contract.

• Arvind mills needs to keep balance of working capital. The working capital
management of Arvind mills is not enough to manage all the routine expense so,
they need to improve the working capital management by analyzing the proper
need, allocation and utilization of the capital.

48
• As Arvind mills is doing only credit sales, they have balance the ratio between the
credit sales and the cash sales of the company. This will help the company to
maintain some level of liquidity in hand. Company has to decide an ideal ratio for
the credit and cash sales so that they can also manage the cash conversation cycle.

CHAPTER-7
CONCLUSION

49
 CONCLUSION
This study helps us to know the company`s liquidity and financial position.
After analyzing the components of working capital management, it is found that the
company has a sound and effective policy to improve its performance and has managed
its profitability. Company is doing well at domestic and in a vision to start overseas
operations. They are working with problem of working capital management especially for
short-term financing.

The company is well performing and it is at a growth stage. It has

contributed well in nation growth and development. In conclusion, we can say that the
management of Arvind mills is good; and know well how to finance the need of capital.
The company has improved its performance effectively since from establishment. It has
maintained its position in the market quite well.

So, the overall performance of the company is good but, still they have
to improve the working capital management of the company.

50
 CHAPTER-8
BIBLIOGRAPHY

Bibliography
Chaudhary. (2007). Technical Textiles-an evolving stage in India. IJJRT, 1-15.

Chugan. (2006). Micro and macro dynamics to be globally competitive in quota free regime: A
case of Indian textiles and clothing industry. A Quarterly Journal of FORE School of
Management, 24, 2.

Joshi, R.N., Singh, S.P. (2008). Export trends of Indian textile and clothing: MFA Phase-out and
Post Period. Journal of the Textile Association, 157-162.

Kavin, S. (1989). Textile Industry in Kerala. a comparative reference to Tamilnadu.

Keenan, M. S. (2004). ‘A dying industry – or not? The future of the European textiles and clothing
industry’, Foresight, 6, 313-322.

Kumar. (2006). Export quotas and policy constraints in the textile and clothing market. Policy
Research Working Paper,The World Bank, 1, 24.

Londhe, C. a. (2017). A Charaj model of silk and handloom competitiveness index to measure
sustainable competitiveness of silk and handloom textile segment of India. International
Journal of Competitiveness, 157-172.

51
Neetesh Bhargava. (2015). Technical Textiles – Growth Potential and Prospects in India.
International Journal on Textile Engineering and Processes,, 16-19.

Phukan Raju. (2012). Handloom Weaving in Assam: Problems and Prospects. Global Journal of
Human Social science, 17-22.

Sacratee S. J., Sankar M. and Ayyanar A. (2011). Indian Textile Industry. A Study. Southern
Economist , 52-54.

BOOKS:

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Author- I.M.Pandey

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