Working Capital Report-Arvind Mills 2009-2010

LOVELY PROFESSIONAL UNIVERSITY 2
PROJECT REPORT
ON
Submitted as partial fulfillment towards the

degree of
Master of Business
Administration
SUBMITTED BY:
JATIN KHURANA
PROJECT GUIDE:
Mr. HIREN RAO
SUBMITTED TO:
ARVIND LIMITED

CERTIFICATE
THE ARVIND LIMITED

Naroda Road, Ahmedabad-380 025 India.
Phone :( 079) 22203030
A MEMBER OF LALBHAI GROUP
TO WHOMSOEVER IT MAY CONCERN
This is to certify that JATIN KHURANA, student of LOVELY

PROFESSIONAL UNIVERSITY, have successfully completed their training at the
Finance & Accounting Department of THE ARVIND limited, under the guidance of
MR.HIREN RAO.
The project duration was from 21st JUNE to 5th AUGUST 2010.
We wish him all the most the best future career pursuits.
For THE ARVIND limited.
Mr. Shobit Tyagi

Head – Corporate Human Resources

PREFACE
For a long time, there is a wind of recession blowing all over the
business world and wealth liberalization policy in the Indian Economy.
So, now a day’s market is becoming more and more competitive scenario,
company demands more and more professional and accomplished
employees.
Students have to get practical training along with the theoretical

knowledge of the business condition. There are many advantage of
making these kinds of reports, the student can become aware of the
particular knowledge about marketing of capital goods. Reading gives
only the theoretical knowledge that visits gives practical knowledge.
It is true that technical studies can not be perfect without practical

training and perfection is basic necessity of management student.

Acknowledgement
With the successful completion of my Summer Internship Program, I
would like to express my deep gratitude towards all of those who have
helped me during my learning program.
Firstly I would like to thank Mr. Shobhit Tyagi, Head- Human Resource,
Arvind limited for providing me with this opportunity to be a part of this
organization.
I would also like to thank my LPU guide, Mrs.Sweta Singh for guiding me
throughout this project. Her dedicated and constant efforts and sincere
advices helped me a lot in gaining knowledge and putting forward my full
potential. He gave me ample of time to complete this report.
Though language is a poor substitute for sentiments but still I want to

express my Special thanks to my company guide Mr. Hiren Rao, Head –
finance Department for his wise advises and critical analysis towards my
project. Without his support this project would never have been a success.
With his each and every contribution there has been a value addition in my
learning.
I would also like to show my heartfelt thanks to Ms. Milli Das who helped
me a lot in completing my project. Her timely and sincere suggestions
added value to my project.
Besides this, my sincere thanks to all the members of Arvind Limited who
have always guided for improvements during these 6 weeks. I would also
thank my family for their constant support in completing this project.
JATIN KHURANA
LOVELY PROFESSIONAL UNIVERSITY

DECLARATION
We do hereby declare that the project report title:
“STUDY OF WORKING CAPITAL IN FINANCE

MANAGEMENT”
At ARVIND limited, Ahmadabad has been submitted as a part of the

curriculum for the degree of Master of Business Administration, LOVELY
PROFESSIONAL UNIVERSITY, JALANDHAR
JATIN KHURANA
MBA-II

INDEX
NAME OF THE CONTENT PG.NO
(A) INTRODUCTION TO TEXTILE INDUSTRY 10
CONTRIBUTION OF TEXTILES TO ECONOMY 11
EVOLUTION OF TEXTILE INDUSTRY 11
SEGMENTS IN TEXTILE INDUSTRY 12
INDIAN TEXTILE INDUSTRY 13
GUJRAT TEXTILE INDUSTRY 13
TEXTILE INDUSRTY KEY FACTS 14
MAJOR PLAYERS IN TEXTILE INDUSTRY 15
(B) INTRODUCTION TO ARVIND MILLS 17
COMPANY PROFILE 18
FABRIC PRODUCTION 19
ORGANIZATIONAL STRUCTURE 20
SUBSIDIARIES 20
BOARD OF DIRECTORS 21
GROUP OVERVIEW 22
COMPANY'S VISION 23
COMPANY'S MISSION 23
COMPANY'S PHILOSOPHY 24
FUNCTIONING OF THE ORGANIZATION 24
(C ) DENIM MANUFACTURING PRROCESS 27
BRIEF ABOUT OPERATIONS 28
SPINNING 30
DYEING AND SIZING 33
WEAVING 37
FINIISHING 39
QUALITY ASSURANCE 41
DEVELOPMENT AND NEW TECH. GROUP 43
INSPECTION 45
ISO AND EMS 47
INTERNATIONAL MARKETING 51
PORTFOLIO OF ARVIND 57
(D) FINANCIAL SCENARIO 60
SHAREHOLDING PATTERN OF ARVIND LTD. 61

FROM OLD TO NEW ARVIND 62
(E) WORKING CAPITAL MANAGEMENT 64
CONCEPT OF WORKING CAPITAL 65
FORMS OF WORKING CAPITAL 66
COMPONENTS OF WORKING CAPITAL 68
SOURCES OF WORKING CAPITAL 69
OBJECTIVES OF WORKING CAPITAL 72
DETERMINANTS OF WORKING CAPITAL 72
SIGNIFICANCE OF ADEQUATE WORKING CAPITAL 74
EFFECTS OF EXCESSIVE WORKING CAPITAL 74
BALANCE SHEET OF ARVIND 76
PROFIT AND LOSS A/C OF ARVIND 77
WORKING CAPITAL OF ARVIND(ACTUAL) 78
TANDON COMMITTEE NORMS 85
WORKING CAPITAL OF ARVIND(TANDON
COMMITTEE) 86
WORKING CAPITAL GAP 87
SUMMARY OF OPERATING CYCLE 88
ARVIND LTD. LAG PERIOD 89
(F) INTERPRETATION 90
(G) WORKING CAPITAL POLICY 91
(H) PROBLEMS WITH EXCESSIVE WORKING CAPITAL 92
(J) S.W.O.T ANALYSIS 94
(K) CONCLUSION 97
(L) BIBLIOGRAPHY 98

INTRODUCTION

The Indian textile industry has a significant presence in the economy as well as in the
international textile economy. Its contribution to the Indian economy is manifested in
terms of its contribution to the industrial production, employment generation and
foreign exchange earnings. It contributes 28 % of industrial production, 13 % of excise
collections, 25 % of employment in the industrial sector, nearly 28 % to the country’s
total export earning and 6 % to the GDP.
Industrial Production 28%
Excise Collections 13 %
Employment in the Industrial Sector 25 %
Country’s total Export Earning 28 %
GDP 6%
CONTRIBUTIONS OF TEXTILE INDUSTRY IN ECONOMY

In human history, past and present can never ignore the importance of textile in a
civilization decisively affecting its destinies, effectively changing its social scenario.
EVOLUTION AND EVALUATION OF TEXTILE INDUSTRY
The ‘RAG TRADE’, as it is referred to in the UK and Australia is the manufacture,

trade and distribution of textiles.
There were various stages – from a historical perspective – where the textile industry
evolved from being a domestic small-scale industry, to the status of supremacy it
currently holds.
The ‘cottage stage’ was the first stage in its history where textiles were produced on a
domestic basis. During this period cloth was made from materials including wool, flax
and cotton. The material depended on the area where the cloth was being produced,
and the time they were being made.
In the later half of the medieval period in the northern parts of Europe, cotton came to
be regarded as an imported fiber. During the later phases of the 16th century cotton
was grown in the warmer climates of America and Asia.

A number of new innovations led to the industrialization of the textile industry. In the
initial phases, textile mills were located in and around the rivers since they were
powered by water wheels. After the steam engine was invented, the dependence on the
rivers ceased to a great extent. In the later phases of the 20th century, shuttles that were
used in the textile industry were developed and became faster and thus more efficient.
Today, modern techniques, electronics and innovation have led to a competitive, low-
priced textile industry offering almost any type of cloth or design a person could
desire. With its low cost labor base, China has come to dominate the global textile
industry.
SEGMENTS IN TEXTILE INDUSTRY
Our textile industry constitutes the following segments

• Readymade Garments- denims, made-ups, shirts, etc.
• Cotton Textiles including Handlooms (Mill made / Power loom/ Handloom)
• Man-made Textiles
• Silk Textiles
• Woolen Textiles
• Handicrafts including Carpets
• Coir
• Jute

INDIAN TEXTILE INDUSTRY
The Indian textile is one of the largest segments of the Indian economy accounting for
over one-fifth of the total industry production. The industry has a complex structure
marked by presence of large scale production units as well as small-scale units. The
industry is manufacture driven with spinning having large-scale operation retailing as
weakest link.
India’s textile is second largest in the world, next to china, with annual shipments of
USD 20 billions and a work force of 20 million people. It generates 7% of India’s
GDP, 20 % of its industrial output and 38 % of its export earnings. The competitive
position of Indian textile largely reflects its vast domestic fiber base, low cost and
skilled work force, established allied industries, significant yarn and fabrics capacity
and manufacturing flexibility. India also produces a fabulous range of men-made
fibers, polyester cotton and polyester-viscose blended fabrics. India offers an alluring
range of made up item like scarves and stoles in exotic, intricate patterns and magical
finishes.
The Indian industry is pre-dominantly cotton based with 70 percent of the raw
Materials consumed being cotton. It is composed of the three major sectors, namely-
the mill, also called the organized sector; the handloom and power loom sectors both
being classified as decentralized sectors and; the garments sector.
GUJRAT TEXTILE INDUSTRY
Gujarat is one the leading industrial states in India and textile industry in India in
particular had contributed in big way to the industrialization of the state. In fact,
development of the many industries like dyestuff, chemicals Engineering/foundry and
cotton farming is solely dependent on these sectors. The state is well known for
development of hybrid cotton, ginning, power looms, composites mills, spinning units
and independent processing houses.
In Gujarat, textile manufacturers use cotton based fabrics in mill sector, major reason
being the availability of the basic raw materials in the state, i.e. cotton. Similarly many
spinning units producing more conservative yarns were established in the state. The

state happened to be more conservative with cotton textile products mainly in the
organized sector, weaving and synthetic textile in decentralized sector. Surat art silk
manufacturers are only exception. Similarly, independent processing units process
synthetic blended and cotton fabrics. Clusters of processing units are located in Surat,
Ahmedabad and Jaipur, though these production units have good capacity of
processing wide range of fabric.
Ready-made Garment manufacturing and hosiery knitwear unit also exists in SSI
categories. In early 1990’s Gujarat saw dramatic change in its textile industry scenario
where quite a few textile mills started manufacturing Denim. The Arvind mills,
Ashima Textiles, Soma Textiles, Modern Denim, and Arvee denim started
manufacturing denim. So many mills at a time fetched a new name for Ahmedabad
“Denim city of India” whereas city of Surat became “Silk city of India”.
TEXTILE INDUSTRY KEY FACTS
 The Indian textile industry is second largest industry in terms of providing vast
employment opportunities and employs around 35 million people in country
after agriculture sector and contributes 14% to industrial production of the
country.
 Textile Industry contributes around 6% of GDP, 13% of excise collections, 25%
of employment in industrial sector, and has 28% share in country’s export.
 Industry has direct and strong linkage with rural and agriculture sector,
therefore it is estimated that, one of every six households in country is directly
or indirectly dependent on this industry
Industry contributes
 12% of world production of textile fibers and yarn
 25% share in the world trade of cotton yarn
 23% of the world’s spindle capacity
 6% of global rotor capacity
 61% in world loom age
 Including textiles and garments, 30% of India's export comes from this sector.
 Large and potential domestic & international market, large pool of skilled and
cheap labor, well-established industry, promising export potential etc. are few
strengths of Indian Textile Industry.

 Highly Fragmented, High dependence on cotton sector, Lower productivity,
and Unfavorable Labor Laws are few drawbacks of the industry which it has to
overcome.
 After the elimination of quota restrictions and implementation of National
Textile Policy 2000, it is estimated that the industry will grow with rapid rate
and help to strengthen the Indian economy.
MAJOR PLAYERS IN THE TEXTILE INDUSTRY IN INDIA
 ARVIND LIMITED
Arvind Mills is one of the major and fully vertically integrated composite mills
players in India. It has large production in denim, shirting and knitted garments.
It is now adding value by manufacturing denim apparel. Its sales are around
US$ 300 million.
 RAYMOND’S: Raymond’s has the large, diversified integrated business
model, which is spread across the value chain from yarn to retail. It is
specialized in Diversified woolen textiles. It already supplies to some US
retailers.
 RELIANCE TEXTILES: Reliance Textiles is one of the major textile
Company that is in business of fully integrated man-made fiber. It has capacity
of more than 6 million tones per year. It has joint venture partners like, DuPont,
Stone & Webster, Since (Italy) etc.
 VARDHMAN SPINNING: vardhman deals in spinning, weaving and

processing segment of the industry. It is planning to double its fabric processing
capacity to 50 million meters. It is an approved supplier to global retailers like Gap,
Target and Tommy Hilfiger. Its sales are little over US$ 120 millions
 WELSPUN INDIA : (Manufactures terry towels)

 CENTURY TEXTILES: (Composite mill, cotton & Man-made)
 MORARJEE MILLS: (Fully integrated Composite Mill)
 INDO RAMA: (Cotton and Man-made)
 GTN TEXTILES: (Cotton Yarn and Knit Fabrics)
 GINNI FILAMENTS LIMITED:. (Yarn and Fabric)

 LNJ BHILWARA GROUP :(Diversified and vertically integrated denim
producer with spinning and weaving capacity)
 MAFATLAL TEXTILES: (Fully integrated Composite Mill)
 MODERN GROUP :(Diversified, producer of denim, syntax and thread)
 ASHIMA SYNTAX: (Man-made Fiber)
 KG DENIM: (Fabrics)
 SANGHI POLYESTER LIMITED:. (Manmade Fiber)
 NOVA PETROCHEMICALS: (Man-made Fiber)
 S.KUMAR SYNFABS LIMITED:. (Home furnishing and Suit Fabrics)
 BOMBAY DYEING LIMITED: (Composite and fully integrated)
 RAJASTHAN PETRO SYNTHETICS: (Diversified)
 BSL LIMITED: (Textiles)
 GARWARE POLYESTER :(Diversified)
 BANSWARA SYNTEX: (Composite)
 NATIONAL RAYON CORP.: (Man-made fiber)
 GSL INDIA LIMITED: (Threads)
 INDIAN RAYON :(Man-Made Fiber)
 ALOK TEXTILES: (Cotton and Man-made Fiber Textiles)
 SHARDA TEXTILES MILLS: (Man-made Fiber)
 BIRLA GROUP DORMEUIL BIRLA VXL LIMITED: (Fully integrated
woolen textiles)
 GOKULDAS IMAGES: (Diversified)
 HANIL ERA TEXTILES: (Yarn, Cotton & Man-made Fiber)
 OSWAL KNIT INDIA: (Woolen Wear)
 NIRVAT SAM APPARELS; (Apparel)

COMPANY PROFILE

The aim was to indigenously produce fine and superfine cotton fabric as well as
traditional material for vast potential
Indian market.
At this juncture, Arvind Mills was set

up with the pioneering effort of three
brothers, Kasturbhai, Narrotambhai
and Chimanbhai Lalbhai becoming
World’s largest exporter and Asia’s
largest producer of denims. During 1980s several mills in Ahmedabad closed down as
a result of competition from cheaper cloth produced by small power loom enterprises.
Militancy spurred by textile labour unions prevented the shutdown of several loss-
making mills, and in the mid 1980s Ahmedabad was a city of industrial strives.
ARVIND MILLS has risen like a phoenix from the ashes of Ahmedabad textile mills.
In just eight years it has successfully implemented a turnaround strategy. Established
in 1930, Arvind Limited is the flagship company of $ 498 million. Lalbhai Group has
now focused its attention on few selected core product groups. Arvind today is a one-
stop shop for all cotton fabric requirements, where product range spans the entire
gamut of cotton fabric. It is also a rapidly expanding manufacturer of garments such as
jeans and shirts. With the best technology and business acumen Arvind Mills became
the true multinational producing the finest fabric available in the country that rivaled
imported fabric. Since then, there has been no looking back. Having established itself
as India’s largest denim manufacturer, Arvind Mills is confident that in the near future
it will become the fifth largest denim producer in the world.
FABRIC PRODUCTION

In the 1980s the growing threat from small power
loom operators forced Ahmedabad’s composite
mills to shift their focus to product areas in which
they could compete. In order to better address
newer and wider business opportunities, the
company shifted perspective from domestic to
international markets. At a time when the local
textile industry was declining, Arvind’s
management devised a turnaround strategy called
“Reno vision”. It represented an open-minded
approach that would seek out new opportunities.
In 1987 Arvind Mills made a conscious strategic

decision to change its production emphasis from
a portfolio of traditional domestic textiles to high
quality cotton fabrics. This required a level of
technological expertise, which small power loom
operators could not compete with. Arvind
identified denim as a key fabric. International
consultants McKinsey & Co. helped to frame
company’s business strategy, formulate its organizational restructuring and
establishing international alliances.
Today the company is engaged primarily in the manufacturing of indigo-dyed denim

fabrics, fine and superfine cotton shirting and bottom weights, and conventional
domestic fabrics such as sarees and voiles. In 1995 Arvind Mills held an 80% share of
India's domestic market for denim.
ORGANIZATIONAL STRUCTURE

Arvind defines its operations in terms of Strategic Business Units (SBUs). Each
product line – such as denim, shirting, knits, voiles, etc – is designated as an SBU.
Each unit is headed by a president who is able to make independent decisions on
finance and marketing. The president is assisted by vice-presidents who look after
functional divisions.
The concept of SBUs, which was implemented in spring 1995, was adopted on the
advice of McKinsey; mainly to facilitate the company’s expansion plans but also to
provide an accurate picture of the performance of individual product lines.
Each SBU, which is similar to a product division

within a corporation, operates as a profit center.
While long-term planning is carried out by the
corporate group in consultation with the management
of each SBU, medium and short-term planning is in
the hands of the unit.
Arvind has been successful in attracting high caliber

professionals from the best multinationals and blue chip companies.
SUBSIDIARIES
Arvind Mills has 11 subsidiaries, of which seven are in textile and related
businesses. They are:
 Arvind Clothing limited.

 Arvind Fashion limited.
 Arvind Worldwide Inc, USA
Arvind Clothing limited (ACL), situated in Bangalore, began commercial production

in April 1994. ACL is the exclusive licensee in India of CluettPeabody & Co of the
USA, which owns the Arrow brand name. It has the capacity for making 1 million
shirts per annum, and has received ISO 9002 certification.
Arvind Fashion limited (AFL) is a licensed user of the brand names belonging to the
US Company VF Corporation, which owns the well-known international trade mark
“Lee”. The company has a letter of intent from the Indian government (pending the
issue of a license) permitting it to manufacture up to 960,000 garments per annum,
provided it exports 50% of the garments produced.

AFL has invested Rs.160 million in establishing a jeans manufacturing unit at
Bangalore. The state-of-the-art factory, which has a production capacity, of 500,000
pairs of jeans per annum, is equipped with machines made in the USA, Japan and
Europe.
Spring 1995 saw a launch of a wide range of products-including jeans, jackets, denim
shirts, twill shirts, T-shirts and accessories such as belts and bags –under the “Lee”
trade mark. These are sold through exclusive showrooms located in major cities
throughout India.
Although its current turnover is small, AFL is in good position to capture a significant
share of the growing domestic market.
BOARD OF DIRECTORS
The top management of the company consists of following members:
Name Designation
Mr. Sanjay S. Lalbhai Executive Chairman & Managing Director (Promoter)

S/O Mr. Shrenik bhai Lalbhai
Mr. Jayesh k. Shah Executive Director & Chief Financial Officer
S/O Mr. Kantilal Shah
Mr. G.M. Yadwadkar Non-Executive, Independent – Nominee Director IDBI
S/O Mr. M.A Yadwadkar Bank limited.
Mr. S.R. Rao Non-Executive, Independent – Nominee Director
S/O Raghunatha Rao EXIM Bank of India
Mr. K.M. Jayarao Non-Executive, Independent – Nominee Director
ICICI Bank limited.
Mr. Sudhir Mehta Non-Executive, Independent – Director
S/O Uttamlal Nathalal Mehta
Mr. Tarun Sheth Non-Executive, Independent – Director
S/O Natwarlal Gordhandas Sheth
Mr. Munesh Khanna Non-Executive, Independent – Director
S/O Narindra Khanna
GROUP OVERVIEW
The Lalbhai group, founded by the 3 Lalbhai brothers in 1908, has grown to
become one of India's most diversified business houses, with a significant presence in

the textiles, ready-to-wear, chemicals, air-conditioners and telecom industries in
India.
Each company in the group, in its own way, pursues a single mission - to be the
benchmark in the industry. To achieve this, they have tied-up with a variety of
companies, all world leaders in their respective fields.
LALBHAI GROUP COMPANIES

TEXTILES/ YARNS
o Arvind limited.
o Arvind Products limited.
o Arvind Fashion limited.
o Arvind Brands limited.
o Arvind Intex
o Arvind Cot spin
o Garment Export Division, Bangalore
o Arvind Overseas limited., Mauritius
CHEMICALS
o Anil Starch Products limited.
o Atul limited.
TELECOM
o Arvind Telecom
OTHERS
o Anup Engineering limited.
o Anagram Stock Broking
o Lalbhai realty limited.
o Amtrex Appliancesm limited.
COMPANY’S VISION

"To achieve global dominance over various businesses built around our core
competencies, through continuous product and technical innovation, customer
orientation and a focus on cost effectiveness".
All along Lalbhai Group has maintained a responsive yet levelheaded attitude towards
the society and its training individuals to create a corporate culture that fosters
excellence. Working in this direction the company has created a learning environment
that nurtures individual talent and intellect. It provides a platform that challenges the
individual capabilities urging them to constantly strive forward towards greater heights
using development as the fundamental tool.
It infuses in individuals a spirit of entrepreneurship which gives courage and
conviction to pursue set goals towards logical achievement and a global mindset that
transcends geographical and cultural boundaries evolving as a world leader. All this is
manifest in an environment fostering innovation and leadership.
Drawing from the Team based structure to encourage individuals to mesh up into
cross-cultural teams in all operational processes. This process provides opportunities
for individuals to match their capabilities with organizational expectations creating a
mechanism for updating the system. A strong sense of ownership and commitment
towards the organization and the business as a whole is the basic premise of all the
company actions.
COMPANY’S MISSION
Arvind limited. has laid down certain aims and objectives to be achieved while
pursuing its corporate activities. These are:
 To provide a favorable work environment to the employees to direct their working
towards achievement of corporate goals.
 To provide opportunities creating a mechanism for updating the system
 To manage the institution as a trust, as empowered leaders and do all that needs to be
done ethically for the purpose of the institution.
 To create a vibrant institution for the future of this nation and the world at large
 To be a world leader in an environment fostering innovation and leadership.
 To reinforce connections, and catalyze the chemistry that allows connections to be
translated into action which is beneficial for both the organization and the individual.

COMPANY’S PHILOSOPHY
"It is my responsibility as a leader to create an environment where excellent

people would like to come and give their best, to create a vision, to give freedom
for excellence."
- Sanjay Lalbhai (Managing Dir.)
“We believe in potential of every human being. Our Human Resource Development
policy reflects this belief.
We recruit the best talent wherever we do business, offer competitive compensation,
provide a dynamic work environment, make people accountable for results, and chart
their growth through systematic career planning. Our structures are well defined which
allows us to be more flexible and respond to the customers promptly.
We encourage innovation and entrepreneurship and motivate our people to take on
leadership roles through job re-assignments. This helps us create a learning
organization with a workforce that has multi-dimensional experiences and skills.
Our campus recruitment program and on-going involvement with educational
institution ensures access to highly trained managers, engineers and workers to support
our aggressive global plans. And our training centers – FOUNTAINHEAD (the hub of
all training activities at Arvind), INDRADHANUSH (for operatives), ORCHID (for
behavioral training), and CALCULUS (for computer training) – ensures they continue
to learn and grow.
FUNCTIONING OF THE ORGANIZATION
Each ‘Strategic Business Unit’ is headed by a Business Head. There are also small
garment units at Asoka and Retail outlets at Naroda. The organization has adopted a
Hybrid Structure to be more responsive to the changing markets in which the
Functional and the Divisional structures are combined together. As the organization
grew larger with several products and markets, it typically organized into self-
contained divisions. Functions like marketing, which is important to each product or
market are decentralized to the self-contained units. However, some functions like
Finance, MIS, Legal and Secretarial, Taxation and Services that are stable and require

economies of scale and in-depth specialization are centralized at Naroda Corporate
headquarters. Each of these departments provides services for the entire organization.
The main product divisions are Denim, Shirting, Knits and Central Utility that are
created to serve a different market. Individually, they all require a different strategy
and management style. Each product Line Head is in charge of all functions of that
product such as marketing, planning, supply and distribution, and manufacturing.
There is no Matrix reporting, which means that they follow one-to-one reporting. The
Supervisors will report to the Functional Heads or Managers and the managers in turn
will report to the Managing Director who is the apex of the organization.
 EMPLOYEES
The company in all is operating on strength of nearly 3000 managerial cadder
employees and approximately 15000 first line managers. Employees are all qualified
and technically efficient to serve its clients. Employees are given training of all the
products and services so that they can serve its clients better. Company has a healthy
incentive structure for its employees.
 TURNOVER
The approximate turnover of the company was Rs. 2344.99 crores (as per current
financial year 2008-2009).
 GEOGRAPHICAL SPREAD
Arvind’s worldwide network facilitates Global account management for the leading
brands and local customers. With offices in New York, London, Bangladesh, Delhi,
Ahmedabad, Mumbai, and Bangalore, Arvind has made itself ready to attend to its
customers anywhere on the Globe. Besides their global offices, they have independent
and devoted sales force for all locations and dedicated resources for key accounts.
COUNTRYWISE EXPORT FOR DENIM (CONTRIBUTION IN

%)

DENIM
MANUFACTURING
PROCESS
BRIEF ABOUT OPERATIONS

 Arvind Limited has carved out an aggressive strategy to verticalize its current
operations by setting up world-scale garmenting facilities and offerings a one-stop
shop service, by offering garment packages to its international and domestic
customers such as Lee, Wrangler, Arrow and Tommy Hilfiger and its own
domestic brands such as Flying Machine, Newport, Excalibur and Ready to Stitch
(RTS) previously was Ruff & Tuff. It has now become the largest producers and
Exporters of Denim Fabric in the World.
 Talking about the Operations Our Arvind Limited follows is that they purely
focus on Customer Centric Approach i.e. Customer gives a Samples of Fabric to
Marketing Department according to their Requirements and then after working of
departments such as DNTG, Spinning, Dyeing and Sizing, Weaving, Quality
Assurance, Inspection, ISO starts.
 The Management Staff and Workers are well trained to handle each process
and the Machines for operations are workers friendly i.e. Workers know their part,
which machines indicate.
 The worthwhile thing here is Company’s total dedication on Quality

Management by having departments such as Quality Assurance and Development
and New Technology Group. Not only this but also they take samples after each
processes which will be explained in detail hereafter.
 As we come to know that Arvind Limited produces different Fabric such as

Denim, Cotton Shirting, Trousers, Bottom weights and Knits. We have visited the
Procedures for manufacturing Denim Fabric and this starts from Spinning,
Weaving, Dyeing, Finishing, Quality Assurance, DNTG, Inspection, ISO + EMS,
Marketing and HR.
 To start with, generally our idea was just that ARVIND LTD. produces Denim
Fabric and we are unaware about the Processes they use from Procurement of
Cotton fibers until the End Product that is Finish Fabric (a saleable Product).
PROCESSES

Before producing a Final Fabric of Denim i.e. wearable Fabric, it passes through
different routes and as discuss earlier that we have visited different process
departments on the basis of time-table given below.
INDUSTRIAL PROJECT INDUCTION TIME TABLE
DATE TIME DEPARTMENT NAME
3-07-2010 10:00 hrs to 15:00 hrs. Spinning Devesh Shah
05-07-2010 10:00 hrs to 15:00 hrs Weaving Dipak Pandya
06-07-2010 10:00 hrs to 15:00 hrs Dyeing Hitesh Shah
07-07-2010 10:00 hrs to 15:00 hrs Finishing KB Shah
08-07-2010 10:00 hrs to 15:00 hrs QA Pranab Karmakar
09-07-2010 10:00 hrs to 15:00 hrs DNTG Rahul Roy
10-07-2010 10:00 hrs to 15:00 hrs Inspection RT Shah
12-07-2010 10:00 hrs to 15:00 hrs ISO+EMS Ajay Dwivedi
13-07-2010 10:00 hrs to 15:00 hrs Marketing Smita Deshpande
SPINNING
First, it is worth to note that Production is evergreen line, without production no single
manufacturing company survives in this competition market.

Procurement of cotton is done based on the Cotton Testing Laboratories by checking
Cotton’s Length, Strength and Uniformity. Then they Co-ordinates with Spinning
Department to start with producing yarns, but this were just for procurement of cotton
for Spinning Department.
COTTON SPINNING HAS 4 TYPES OF PROCESS:-

 Ring Spinning
 Rotor Spinning or OE Spinning
 Adjudge Spinning
 Trap-Frictions Spinning
To manufacture a Denim Fabric Arvind Ltd. uses Rotor Spinning or Open-End

Spinning Processes and Ring Spinning is used at our another Business Divisions that is
Ashoka Spintex.
Spinning Department produces 60 tones of Yarn with potential of 24 Rotor Spinning
Machines by having different counts and that is Thicker (Coarser) which is used for
Denim and within counts of 5.3 to 20 and the thinner yarn is used to manufacture
Shirting and Trousers within counts of 30 to 160.
 They are having Open End Spinning Process for making Yarns and in this Cotton
are passed through four different routes to produce a Yarn:-
 Blowing: - In this blower machine Cotton passes through various kinds of blowing
machines to remove impurities such as Fibers, seeds etc.
 Carding: - In this again cotton passes through a machine to open its individual
fibers and again impurities is removed if found. After this process, cotton takes a
form of Slivers in which cotton base is mentioned and directly goes into cards.
There three Liners and each liner are having 12 Cards so there are 36 Cards in
total.
 Draw- Frame (Drawing):- After Cards have been prepared, it is considered as a

Frames and it goes for Breakers and Finishers. Breakers draw this Card into double
productions and Finisher is Single Automated machine to do the same work as
Breaker. There are total eight Breakers and eight Finishers.
 Then after the above three process, it goes into the Final yarn making machine
which is known as AutoCoro. It continuously keep a watch on production of yarn
and any deviations found it gives Red indication on Machine so that operators try
to resolve that.
Now if we compare between Rotor Spinning and Ring Spinning Process then Rotor
Spinning (Open-Ended) is economically viable for the Production of Denim yarn
because it deals with the less number of processes then Ring Spinning.

Rotor Spinning Ring Spinning
Blowing Blowing
Carding Carding
Draw-Frame Drawing-Frame
Yarn Roving Frame
Final Packaging Ring Frame- Yarn
Winding
Final Packaging
DYEING AND SIZING

After Spinning department producing yarns and then after converts it into warp beams
it is then transferred to the Dyeing and Sizing Department for the further processes.
Mainly they used natural indigo dyeing in producing Denim Fabric and as per the
requirements of customers, they also used multi-colored dyes such as Black, Blue,
Navy Blue, Green with the help of Sulphuric Colors.

Dyeing and Sizing department uses two Approaches for dyeing the warp beams and
Sizing of it.
I. Sucker Muller ( Warp Dyeing)
II. Rope Dyeing
 SUCKER MULLER:- Generally there are 320 to 400 number of ends in a warp
beams, in addition, this machine can handle upto 12 Beams in one go. In this
machine, it follows some process such as-
a) The machine starts with the warp feeding motor which pick yarns and rotates it
in a clockwise direction in which left roller rotates the yarns into upwards
direction and right roller rotates a yarn into downside direction.
b) Then comes the stage of Preventive motor which works for pouring of yarn and
it clean yarns by removing impurities if any.
c)In the third stage, washing of yarns is done at 50 .C and shades can be decided.
This is also called Pre-dye wash.
d) Then after there is a Dyeing zone and there are six such zones are there. First of
all Indigo dye is applied i.e. coated on yarns and such process is continued for
this six zones with Coating and Oxidization of yarns to remove unnecessary
indigo from yarns so that it maintains its width of weaving ability.
e) Now this machine takes dyes from all tanks and absorb to the surface of yarns
and the remaining dye taken care by absorber tank to reuse such dyes and
reduce wastages. After six zones of dyes, it washes 10 times to remove the
indigo from the surface. This is also called post-dye wash to decide the shades
for the fabric.
f) Then a stage of dryness comes into account to maintain yarns strength.

Maximum 7% moisture is used to make a dye yarn dry. Thereafter 10
separations are there to make yarn to go for beams with the help of combing
metals i.e. separation of number of ends takes place and directly sizing part is
done. However, the point here is to note that after fulfilling each beam
requirement the cutting part is done without stopping he machine and output
with the help of compensators. The compensator compensates the yarn until the
next beam is ready to take it for sizing.
Each Sucker Muller machine involves four workers to handle it. The dyeing can also
be done as Sulphur Bottoming and Indigo topping (SBIT), Indigo Bottoming and
Sulphur Topping (IBST), Yellow Bottoming Indigo Topping (YBIT), Indigo
Bottoming Green Topping (IBGT). This method of Dyeing is also known as Warp
Dyeing.

 ROPE DYEING:- In this method a warp beams first converts into rope beamersand
then transfer to the 50 Rope Dyeing machine for the further process.
Rope Dyeing has verifies certain process for dyeing yarns.
a) Creel Section:- In this section 50 balls are setup at creels with generally 400 to 430
ends. Creels setup is as follows
b)The first section is known as setup section but after that it comes the machine
layout portion i.e. there are 19 Boxes through which Rope passes for various parts
as follows:-
Box No:- Process Name Activity Temperature
70.C
1. Scoring Process If found Impurities of Yarns removed.
) ( Washing)
2,3,4.) Pre-Dye washing Before Dyeing washing of Ropes. 50.C

Process
5,6.) Shading Process Shading taken care as per requirement. N.A
7 to 14.) Indigo Tank do dyeing process for

Dyeing Process about 8 times i.e. Ropes enters and exit N.A
8 times from this tank.
15 to 18.) After Dyeing process this boxes gives Effluent

Post-Dyeing Process a wash to Ropes to remove Treatment
unnecessary dyes from surface of Plants*
Ropes with the help of detergent.
19.) Softener Process At this stage dryness of Ropes taken

care with the help of softeners. N.A
Opening of Ropes is done after
Process.
* Effluent Treatment Plants is helpful in making a solid form of Indigo waste and
make (pH) level
neutralize
a) Dry cans and Coilers: - In this drying process is carried out through Cylinders and
Coilers are used to make Quality arrangements and to make 400 to 430 ends separate
from individual Ropes.

The Impact of this Process is that Dyeing Process is done with the possible nearest
accuracy and efficiency but it involves more cost than Sucker Muller in respect of
Machinery, Workers Skills and Working Environment. It gives 5 times more
Production than Sucker Muller. Here Quality is more focused in terms of Purity
issues of Indigo. It gives better penetration of Indigo on Ropes (Yarns) as Dyeing is
done 8 times. It has a capacity of setting 40,000 meters at a time.
Indigo extracts from plants that are naturals and there are synthetic dyes. We must
know that Indigo is Insoluble element and to make it applied on the Ropes (Yarns)
Caustic is added to the Indigo to make it soluble. Still this is not enough this just a
formation of Soluble but to apply on surface of Ropes it requires a pathway, which is
given by Hydro, and it makes the (pH) in its acidic media so that Indigo is directly
applied to the Ropes (Yarns).
The basic difference between Warp Dyeing and Rope Dyeing is that in Warp Dyeing-
Dyeing and Sizing Process goes together whereas in Rope Dyeing the focus is mostly
on Dyeing Process and then after the Ropes is filled into cans and then Ropes are
opened as a Warp and thereafter Sizing part is done.
This department consists of 36 staff in three shifts and apportion of such workers are as
follows:-
Balls Loading = 2 Workers

Patrolling and Platform Visit (Continuous) = 2 Workers
Coilers Handling = 2 Workers
Operators Office = 3 Staff (1 Operator, 2 Asst.Operator)
Filling Indigo Tank = 3 Workers
The above details are for one shift and there are three such shifts are there.
Therefore this activity is also known as Labor- Oriented activity because the likings of
Damages are more in this Dyeing Process as if any individual Rope breaks then it
creates a problem of lapping on Rollers and due to such Machine has to be stopped
because of such Breakages, and stopping of Machine creates Machine Idle Problems.
Therefore, for this two workers keep a continuous watch on Rope Dyeing on
Platforms.
WEAVING

After passing through different processes such as Spinning, Warping, Dyeing and
Sizing this is a stage where Raw Fabric is processed and then finally it goes to
Finishing Department. Now this stage is processed through Zax a loom set which is
basically a model of Machines. These Machines works with a speed of 700 to 750
Rotations per Minute (RPM). There are 203 Machines out of which 159 are Zax
Machines and 44 (209i) Machines. There are 135 meters per Roll as per customer’s
requirements and after making a Raw Fabric, it generally goes for detecting the
defects. Generally, yarn is produce from cotton, filaments, lykra, Polylykra.
Warp Beamers first installed to the Air jet loom set, which is Technology from Japan
(Tsudakoma) and then after a weft is entered into nozzles through air pressure.

Warp is seen vertically on these machines and weft is horizontal to it. Weft enters
through censors and passes the full lobby of warp and the dents of warp are set before
starting the machine. Dents are defined as gap between two ends. The larger the dents
the lesser will be the gap between two ends.
Generally, one machine produces 500 meters of Raw Fabric daily depends on picks. In
addition, to produce in such a hassle environment you need to have 75 to 80 % of
humidity required in every textile mills and due to this 10% contraction of fabric takes
place in weaving department. There is inflow of cool atmospheric air from above floor
and outflow of air ventilation is given at underground level. There is air blower
attached on the above of such machines to remove unwanted fibers on machines,
which is continuously rotating for cleaning purpose.
After one beam is over there is a need for knotting to have a continuous production for
Raw Fabric and for that, this department is having a Knotting machine to join the next
beam. There are indicators on each machine for the Terminologies such as
T- Total Breakages
W- Warp Damages
F- Weft Breakages
L- Leno and other Breakages.
This indicators help operators in make out damages that occurs due to Dyeing and
Sizing and sometimes due to weft also. Weft is procured from outside suppliers, so if
there are more damages or breakages of weft then suppliers are to be aware and they
will have to give more focus on these breakages.
Due to hassle, working environment workers are given Earplugs and Masks due to
humidity level. There are 100 workers in a shift and total there are 3 shifts and
approximately 300 workers work in this department. Recycles wastewater and converts
denim waste to denim paper, in keeping with their eco friendly production process.
FINISHING

This department tries to maintain Quality, Production level, and Transparency like
other departments and keep liaison with other departments. This department has three
processes and any process can be by-pass as per customer’s requirement. They are as
follows:
SINGEING
DESIZING
c) MERCERIZING

a) SINGEING: - In this process cotton fabric, hairiness, improper slubs are removed
with the help of three burners at 900.C. The burning takes place in one goes i.e.
Fabric passes through these 3 burners at a one go.
In this process route of fabric is decided automatically and each customer’s fabric has
its own identity or code number.
b) DESIZING: - This is generally a process called over-dyeing process. Sizing has

already done in the sizing department after dyeing process but in this process over-
dyeing is done to get a good idea of finished fabric. A machine called harrish helps
in process of making wrinkle-free denim fabrics with the help of certain chemicals.
It has ability of making permanent stability characteristics on fabrics. Desizing part
is done with the help of Dhall Machine.
c) MERCIRIZING : - In this process lustrous, shrinkage and dimension stability of

fabric is taken care with the help of same Dhall Machine. Caustic and Alkali is
used in wash tank to know the maximum shrinkages in fabric takes place. After a
fabric passes through this process, it directly goes to a Acid-Wash Tank in which
the unnecessary alkali is removed from a fabric.
The above machines costing around 4 to 5 crores and has ability of making process
on 40,000 meters per day. While there are other high speed machine which gives
heavy production (Approx. 75,000 meters per day). This High Speed Machine is
known as Benninger Impacta-Extracta. In this, all the above 3 process is done on a
single machine. As compared to previous process, this is having high potential to
maintain Quality as it can handle a large production. There are other two machines
are there namely Ordinary Drying Range (ODR) and Ordinary Drying Range + Wet
finishing which focus on all process as per customers requirement.
There are 18-19 Machines in this department and to handle this there are 90 workers
working in three shifts i.e. 30 workers are required per shift.
QUALITY
ASSURANCE
Every time we talk about Quality and its Management, but this is not talk in the air, we
have certain Quality Parameters of Testing it and maintain it. This department process
comes into center part of process but their working starts at the initial stages from
procurement until final fabric. Firstly, a customer gives a sample as per their
requirements and then it directly goes to DNTG department to check its ability to
produce such kind of fabric. After this process, DNTG group advises to procure cotton
for making yarns for such production. However, Quality Assurance department to
know the strength of the cotton checks cotton’s length, uniformity and frequency.
This Department also checks coarseness of fibers. They take care about trash, and
evaporations in process of cotton. Without Verification (Standardization) of this
department, no single gram of Raw materials enters into machine.

The working cycle for Quality Assurance Department is as follows: -
Cotton
Laboratory
Small Garmenting Chemical

Division Laboratory
Sample
check cell
Certification
Clearance and
Complaint
Process
control

Development and
New Technology
Group

The objective of this department is to develop samples as per customer’s requirement.
They develop new yarns and fibers and some of their developed categories are Lenin
Denim, Polyester Cotton Denim and Shades of fabric dyes. As mentioned above, they
receive samples from marketing for development. Fabric construction and analysis part
are also work out here. One authorized member from DNTG keeps liaison with dyeing
department, and make plans for dyeing and sizing, weaving, finishing. They also offer
fabrics to inspection department for inspecting damages and rate category of fabrics.
They do their research in their chemical laboratory for developing the shades for
dyeing.
The flow chart for their process after developing a new product is as follows: -
Trial in the Machine (Developed Product)
Checking Width of the Fabric
Checking the Shades of the Fabric
Commercialization of such Product

INSPECTION
Irrespective of damages are there or not, the work of inspection department is to

inspect 100% production. There are four point grading system which is worldwide
accepted.
Inches Point Defects

0.3 1
3.6 2
6.9 3
> 9-1mtr 4
They also categorized fabric into a Quality Table starting from nine to one, in which 9
shows the best Quality and 1 shows appropriate Quality for certain customers.
Damages can occur from Core Production departments such as Spinning, Dyeing
Sizing, Weaving, and Finishing.
Due to Spinning the defects such as slub yarn variations, coarseness of weft, etc. may
occur. Due to Dyeing Sizing defects such as slackage in ends, tightened problems,
Shade variations due to machines, size-patch damages, etc. may occur. Due to weaving
defects such as stop-marks, Pick findings, snarls and floats, etc. may occur. Due to
finishing defects such as skewness, shrinkages, width and weight of fabric, etc. may
occur.

Inspection department uses Kitamura Machine to find such defects in fabrics. There
are two inspectors to keep continuous watch on fabric for finding the defects. The 4-
point grading system indicates that as per customer requirement defects are allowable
upto their levels. We have observed that in VF brand the 4-point allowable are only
4that is total 16 defects per 135-meter roll.
ISO and EMS
Arvind Limited integrates both QMS and EMS, which comes under the head of ISO.

Since establishment of ISO Arvind Limited were by certified the ISO.
Different Quality parameters have to be focus upon and each machine is checked and
approved by centralized laboratory. List of all the process, activities, procedures,
record of workers, machines, and work allotted to whom, list of instructions for all the
workers and everything is recorded by the HR department and if any change is to be
made, first it should be informed and permitted by Marketing representative.
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION
ISO 9000 is a family of standards for quality management systems. ISO 9000 is
maintained by ISO, the International Organization for Standardization and is
administered by accreditation and certification bodies. The rules are updated, as the
requirements motivate changes over time. There are 176 member countries.
ISO 9001 : 2008 is the fourth revision of ISO 9000. All requirements of ISO
9001:2008 are generic and are intended to be applicable to all organizations, regardless
of type, size and product provided.
Before certification the agents of ISO takes Assessment audit and Certification audit: -
i. ASSESMENT AUDIT: Here the assessment is done on the

systems and process of the company before certifying.
ii. CERTIFICATION AUDIT: An ISO committee selects their

agents and based on the finding they recommend the company for certification.
Some of the requirements in ISO 9001:2008 (which is one of the standards in the ISO
9000 family) include:
- A set of procedures that cover all key processes in the business;
- Monitoring processes to ensure they are effective;
- Keeping adequate records;
- Checking output for defects, with appropriate and corrective action where
necessary;
- Regularly reviewing individual processes and the quality system itself for
effectiveness; and
- Facilitating continual improvement
ISO is all about: ' Say what you do, and do what you say.’
QUALITY MANAGEMENT SYSTEM
The Company documents, implements, and maintains a quality management system

and continually improves its effectiveness in accordance with the requirements of the
ISO 9001:2008 International Standard. It is managing quality in a systematic way.
The industry has to follow PDCA cycle to get continual improvement:

It is a cycle, which focuses on how one should approach in his all the activities.
First of all planning is required, than according to the plan one should work upon and
after that it should be checked that whether the work is proper or not and lastly if the
work is proper and correct it should be done again and if not than should plan for
another work or project.
ACTIONS:-
The actions are of two types according to ISO 9000:
CORRECTIVE ACTIONS
PREVENTIVE ACTIONS
i. CORRECTIVE: Any action taken after the occurrence of the problem is corrective
action. It prevents the reoccurrence of problem.
ii. PREVENTIVE: Any action to prevent the occurrence of the

problem is preventive action. Company with most Preventive actions is the Best
Company. The employees working in that company will be proactive. However, it
is very difficult to implement in real life situations.
AUDITING:
Two types of auditing are required to become registered to the standard:
a. Auditing by an external certification body (external audit) and
b. Audits by internal staff trained for this process (internal audits).
Audit should be always Cross Functional and it is meant to improve systems.

Non-conformities are not confirming to the requirements and are tool for
improvements.
ISO 9000 is a system certificate not a product certificate. It is beneficial for both
customer and the company itself.

It is not mandatory but depends on the company itself whether it wants or not.
The process is Audited every six months.
ADVANTAGE TO CUSTOMER:
- It gives confidence to the customer that he will get consistency and
Improvement in the quality and the service provided by the company.
- He will not feel hesitate to use that product which is ISO certified.
ADVANTAGE TO SUPPLIER:
- Repeated customers
- Improvement in process
- Addition to the customer base
- Wastage in the process will be less
- Inventory carrying cost will be reduced.
- Gets more liquidity as money doesn’t get block
- Can cater more products to the customer
The validity of the certificate certified by ISO is for 3 years and on the completion of
this validity, recertification is done and in Recertification, Assessment audit is not
done.
Every six months the agents come for Surveillance, they pick up any department and
any worker randomly and than check, whether the procedure is as said earlier or not. In
the cycle of three years, it should be noticed that each department is audit at least once.
ENVIRONMENTAL MANAGEMENT SYSTEM
ISO 14001 was first published in 1996 and specifies the actual requirements for an
environmental management system. It applies to those environmental aspects which
the organization has control and over which it can be expected to have an influence.
Environment under this system means the surrounding around the organization not
within the organization.
There are four types of pollution:

1) Air pollution
2) Water pollution
3) Noise pollution
4) Land pollution
 Air pollution is done by the Gases, which comes out of the chimneys, and the
chemicals, etc. Gases like CFC gases, carbon dioxide, etc are such gases, which
effect and destroy the air adversely.
 Land pollution is done by the dye chemicals, which mix with the water and
make it harmful to use and because of this, the land is polluted.
 Noise pollution is due to the excess noise of the machines, which is harmful for
human beings.
 Water pollution is due to the wastage of chemicals, dyes, indigo, which comes
out of the machines while coloring, dying washing, etc...
Significant actions should be taken to control these pollutions and its harmful effects

and for this EMS, 14001:2004 is made.
Arvind Limited uses EMP i.e. Environmental Management Process, which makes the
waste and polluted water useable by removing the sludge from it to neutral the Water.
The particle, which comes out of the polluted water, is to be thrown away in a place as
ordered by the government. Those particles are very dangerous and harmful and it
should be transported very carefully and even care should be taken that the particles do
not fell down while transporting. This process makes the water neutral and useable
after processing through Effluent Treatment Plants.
 For Air Emission i.e. Stack Emission should be minimized. The pollution
should be within the permissible limits granted by the government.
 For Energy, there are programs to see that the energy consumption goes down.
There are objectives which they make to minimize the energy usage ant also target
are set up that under a certain limit the energy has to be consumed not more than
that.
 For natural resources, the company is seeing that the water consumption should be
adequate and wastage should be minimum. Cotton, which is also natural resources,
its consumption should be maximum and wastage should be minimum. in addition,
should be reduced in every stage
INTERNATIONAL
MARKETING
Country-Wise Exports for Denim (Contribution in %)
U.S.A
U.S.A
30%
30%
Europe
Europe
55%
55%
Middle-East
Middle-East
(Bangladesh,
(Bangladesh, Turkey,
Turkey,
Sri
Sri Lanka)
Lanka)
15%
15%

Arvind Limited is India's largest integrated textile company and operates across the
entire value chain from designing of fabric to brands. Arvind Limited was the first
company in India to bring international brands when they brought Arrow to India.
Arvind has licensing relationships with many international brands like Arrow, GANT
US Polo & Cherokee. They also have JV’s with VF Corporation with brand portfolio
of Lee, Wrangler, Nautica, Jansport, Kipling, Hero by Wrangler & Lee Riders, Tommy
Hilfiger and most recently a JV with Diesel.
The Marketing Strategies are different as per Geographical Indicators.

For Example: - Particularly for Europe countries, Fabric have category named as
Euro-line. The Europeans wants depth of color (Darkness in Fabric).
The Company believes in Secured Payment, therefore, it gives no credit to any of its
customer but can give terms and conditions of L/C. The Pricing Quotations are
different as per customer’s convenience i.e. F.O.B or C.I.F. They follow the ethics on
Fabric such as Width, Weight and Ounces. These are carefully observing and try that
none of these have been tampered.
Lee & Arrow for the super premium segment
Flying Machine & Excalibur for the premium segment

Newport for the economy and
Innovative ‘Ruf & Tuf’ for the mass market
The company has recently made a foray into children segment by introducing Lee
Youth, Ruggers Kids & Newport Kids. Similarly in tie-up with Cluett Peabody, USA,
to manufacture and market their world famous Arrow shirts, it launched what is
today’s India’s most inspirational brand of dress shirts.
In a world without boundaries, Arvind FABRICS are equally universal in their appeal.
Arvind aims to enrich lifestyles globally, inspiring diverse customers with the beauty
of their fabric.
Arvind was already making shirting for the Indian market. In 1990, it decided to focus
on high value shirting, so as to expand their markets beyond India's borders. As a part
of their commitment to being a value-adding partner to each of the customers, Arvind
Shirting’s have invested US $ 100 million in Santej. This plant has an annual capacity
of 34 million meters of 100% cotton woven. Arvind's philosophy in manufacturing is
'Excellence in Quality and Flexibility in Production'. In the entire process of
operations, eco-friendliness is critically monitored and ensured. The plant is also
configured to handle small order sizes as well as very long order lengths with
consistent quality.
Arvind has recently set up a dedicated bottom weights plant as part of Arvind Polycot
Limited. This new addition to the Arvind Textile Complex brings the total investment
in the complex up to Rs.12000 million. The plant is an integrated facility that sources
yarn from Arvind at Ahmedabad. It has both weaving and processing infrastructure,
captive power supply, steam generation and a wastewater treatment plant. The latter
makes it a zero discharge complex i.e. one that recycles all its wastewater.
In 1986, we looked for textiles that had global demand, high margins, and high entry
level barriers (either of technology, expertise or set-up costs), and very importantly,
low "fashion volatility". We wanted to focus on fabric that would never go out of style.
Our analysis of potential products threw up denim as the answer. With a production

capacity of 120 million meter per annum, Arvind is currently India’s largest and
world’s third largest denim manufacturer.
It sells under the brand names “ARVIND DENIM” and “BIG MILL DENIM” (in
Europe). In India Arvind commands a market share of approximately 64% which is
five times that of the next largest player. Our denim is used to make India’s leading
jeans brands – Flying Machine, Killer, Levi’s, Numero Uno, Pepe, Texas jeans, UFO
and Wrangler. All the leading local denim manufacturers use “Made from original
Arvind denim” as an indicator of high quality and consistency.
Arvind also exports denim to over sixty-six countries worldwide. Denim exports
constitute of approximately 50% of the turnover.
Today Arvind is making yet another foray in the manufacture of the finest quality
Cotton Knits in the world. This new venture features a technical collaboration with
Alamac Knits Inc, USA to manufacture high value and high-fashion knits. With an
investment of US $50 million, the plant will produce fabric in both tubular and open
widths. The product range aims to offer widest choice in both tubular and open widths
in single (Jersey, Pique, Textures, Pointless, Fleece, French Terry, Jacquards in solids,
feeds and automatics) and double (Interlocks, Needle-outs, ottomans, Pointless,
Textures, Reversible, jacquards, Ribs in solids, feeds and automatics, Collars: Plains
and Jacquards) knits. It will manufacture a knits range from casuals to formal, active
wear to sleepwear, for diverse use in men's, women's and children's clothing. Arvind’s
large color and fabric library, stocking samples and a well equipped fabric resource
centre facilitates customers to access fabric that will enhance their lifestyles.

• Arvind

PORTFOLIO OF ARVIND LIMITED
Portfolio Percentage%
Denim 26%
Shirting 11%
Garment 16%
Brand/Retail 21%
Others 26%

MILESTONES ACHIEVED
1930 Arvind Limited was set up by Lalbhai Brothers.
1934 With sales reaching Rs. 45.76 lakhs and a profit of almost Rs. 3 lakhs, Arvind
establishes itself amongst the foremost textile units in the country.
1985 First Meter of Denim churned out.

1986 An uninterrupted record of not missing out on paying dividend to its
shareholders.
An established leader in fine & superfine cotton fabrics for Indian market.
Renovation: First company to bring globally accepted fabrics Denim, yarn dyed
shirting fabrics & wrinkle free gabardines to India.
1987 The largest zero discharge green effluent treatment plant in India.
Commitment to greener world.
First company to bring International shirt brand “Arrow” to India
First company to start dedicated “retail” outlets for Arrow brand
Awarded various awards for Highest exports and ISO.
1989 Largest denim & shirting in South Asia.

3rd Largest denim capacity in the world.
1990 Introduction of Premium Shirting’s Division.
1993 Office set up in New York, London & Hong Kong.
1994 Arvind ventures into Brands—Flying Machine acquired…..

BEGINNING OF AN ERA
1995 LEE commenced production. Introduction of Ruf & Tuf, ready to stitch denim.
1997 Commission of State-of-the-art manufacturing unit at Santej (Ahmadabad).

First Indian company to detribalize the cotton textile business from cotton fields
to apparel retailing.

1997- First company to introduce ERP SAP business solutions.
1998
2002 Arvind` does a unique financial restructuring.
2004 Relocation of Mauritius Plant at the end of quota regime.
2008 Company launches 'Mega mart', now India's largest value apparel-retail chain
Largest portfolio of International brands: Lee, Wrangler, Nautical, Jan sport,
Kipling, Tommy, Arrow, US Polo, Izard, Pierre Cardin, Palm Beach, Cherokee,
hart Schaffer Marx.
FINANCIAL SCENARIO
Arvind limited is acclaimed in the Indian corporate field for its financial skills. Being
the phase of rapid growth or downturn the company has demonstrated swift, sharp and
robust financial acumen to navigate the company through different phases of economic
cycles. Arvind Mills was the first Textile Company from India to issue GDRS in the
year 1992-93. Highly complex financial restructuring exercise involving more than 80
domestic and international tenders, who the company implemented following the
major downturn in the business cycle during year 2000-2002, is considered to be the
benchmark for the Indian corporate. Arvind limited has been making judicious choice
of fund leasing avenues in the domestic as well as international markets so as to utilis
very efficient capital structure, which is in the tune with operating risks and enhances
the shareholder’s value.
The company has laid down the risk management policy to manage the financial risks
emerging out of currency and interest rate. It runs an active treasury desk so as to make
use of modern hedging tools available to manage financial risks.

Arvind Mills was the first Textile Company in India to implement ERP, SAP as back
as in the year 1997-98. The company follows best accounting practices to prepare its
financial statements as envisaged in the Indian and international accounting standards
SHAREHOLDING PATTERN OF ARVIND LIMITED
Particulars
NO.OF SHARES % OF TOTAL
Promoters 76908767 35.24%
Institution 42340700 19.40%
General public 98980382 45.36%
Grand total 218229849 100%
GRAPHICAL PRESENTATION OF NUMBERS OF

SHAREHOLDERS

FROM OLD TO NEW
Arvind limited is the flagship company of the Lalbhai Group and one of India’s largest
integrated textile manufacturers and branded apparel retailers. The re-branding
exercise comes in the wake of Arvind limited transforming itself from a pure fabric
company to a diversified business group focusing on branded apparel and retail.
Initially, when the company was set up as Arvind Mills limited, it was
simply about fabric. But gradually, it has spread its tentacles into retail and branded
apparel, which today contributes the maximum to the company’s growth. Seven years
ago, with everything else constant, the logo was changed. In all, since Arvind Mills
was set up in 1931, this is the first extensive re-branding exercise it has taken up.
Sharp, but well rounded, the forms of the logotype represent

an organization that is integrated and works across the value
Arvind Mills - old logo chain from stylish fabrics to iconic brands. With an element
of classicism, the logo symbolizes an organization that has a
rich heritage, while remaining contemporary through
Arvindlimited - new logo changing times. The burgundy red denotes maturity, its rich
tones carrying a sense of depth and more than a hint of passion.
No particular font has been used for the logo – it is hand drawn and, therefore, an

exclusively crafted logo.
Highlighting the significance of the change in identity, Sanjay Lal bhai, chairman and
managing director, Arvind limited, says, “Over eight decades, we have changed the
face of fashion by evolving constantly. As we get ready to address wider opportunities
to create wealth for our stakeholders, we have evolved new ways of thinking and a new
direction. The new identity reflects the shift in the corporate identity from a large
integrated textile player to a lifestyle solutions company and the name of the company
reflects the same trust but new opportunities.”
Arvind limited has licensing relationships with international brands
such as Arrow, Gant, Cherokee, USPA, Hart Schaffner Marx, Sansa belt, Pierre Cardin
and a joint venture with VF Corporation, which covers Lee, Wrangler, Jansport,
Nautica, Kipling and Tommy Hilfiger. In addition, Arvind owns a number of
successful Indian brands such as Flying Machine, Newport, Excalibur and Ruf and
Tuf. It also owns the retail chain, Mega mart, which has 83 outlets in 30 towns.
Recently, Arvind limited opened a 40,000 square foot Mega mart outlet in Chennai.
ARVIND MILLS CHANGES NAME, FOCUS AND STRATEGY
Textile major Arvind Mills which has been recently going through a bad patch owing
to rising rupee, reducing exports and falling margins is undertaking a business
transformation in a bid to become a billion dollar company.
The company has firstly changed its name from ‘Arvind Mills limited’ to ‘Arvind
limited’ with a new logo and identity to reflect a company which is diversified with
focus on branded apparel and retail. The promoters will increase their stake from 34%
to 47% and infuse Rs.188 crore capital into the company.
Also, half of the Rs.1400 crore debts which Arvind limited has would be repaid by
selling off land at Ahmedabad and Bangalore thus positively affecting the company’s
profitability.
Arvind is now giving more focus to brands and retail which until now contributes 19%
of total revenue. It will also move to become an integrated textile player by producing
fabric as well as retailing it. With a combination of its own as well as licensed brands,
Arvind aims to become the largest apparel brand in India with focus on Tier II and III
cities.

Major emphasis would be on the value store format ‘Megamart’ which is targeted to
achieve Rs.1000 crore sales in 3 years. Other than that Arvind plans to setup 250 small
format and 30 large format stores by 2012.The strategy may work out to be rewarding
for the company as it has a good portfolio of domestic and international, and has been
an established national player. The move would also help it to ward off any risk it
faces from the recession in export markets.

CONCEPT OF WORKING CAPITAL
A company invests its funds for long term purposes and short term operations. That
portion of a company’s capital, which is required for minimum stock of raw material to
maintain continuity in production, minimum stock of finished goods to fulfill future

demand, payment of wages and salaries of labourers and employees is called Working
Capital. In other words, working capital is that part of the firm’s capital which is
required for financing short term or current assets such as debtors, inventories,
marketable securities and cash.
The word working capital comprises of two words ‘working’ and ‘capital’. In trade and
industry, the word ‘working’ with reference to capital means circulation of capital
from one form to another during day-to-day operations of the business whereas the
word ‘capital’ refers to the monetary values of all the assets (tangible and intangible)
of the business.
There are numerous concepts of working capital as given by various accountants,
financial experts, entrepreneurs and economists. Important among them are –
• Balance Sheet or Traditional Concept
• Operating Cycle Concept
FORMS OF WORKING CAPITAL
Working capital is the amount of funds required to cover the cost of operating the
enterprise. In other words, working capital may be defined as excess of current assets

over current liabilities. It may be classified in two ways i.e. (i) on the basis of balance
sheet concept and (ii) on the basis of time. These are illustrated by the following chart.
• ON THE BASIS OF B/S CONCEPT
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.

o 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.
o 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.
• ON THE BASIS OF TIME
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)
Permanent or regular working capital; and (ii) Variable or temporary working capital.
o PERMANENT OR REGUALR WORKING 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.
o VARIABLE OR TEMPORARY WORKING 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. Specific working capital – Specific working capital is that part of the working
capital which is required to meet unforeseen contingencies like slump, strike, flood,
war etc.
COMPONENTS OF WORKING CAPITAL
Working capital refers to the metric valuation of the current assets and the current
liabilities. These two are the basic components of working capital.
• CURRENT ASSETS ARE:
(1) Inventories
(2) Sundry Debtors
(3) Bills Receivables
(4) Cash & Bank Balances
(5) Short term investment
(6) Advances such as advances for purchase of raw materials,

component and consumable stores, prepaid expenses etc.
• CURRENT LIABILITIES ARE:
(1) Sundry Creditors
(2) Bills Payable
(3) Creditors for outstanding expenses
(4) Provision for tax
(5) Other provision against the liabilities payable within a period of 12 months
SOURCES OF WORKING CAPITAL

Funds available for a period of one year or less are called short-term finance. In India
short-term funds are used to finance working capital. Two most significant forms of
working capital are: trade credit, bank borrowing.
The use of trade credit has been increasing over the years in India. Trade credit as a
ratio of current assets is about 40 percent. It is indicated by the Reserve Bank of India
that trade credit has grown faster than the growth in sales.
Bank borrowing is the next important source of working capital finance. Before
seventies, bank credit was liberally available to firms. It became a resource after
eighties because of the change in the government policy.
Another form of short-term working capital finance which has recently developed in
India is Commercial Paper.
• TRADE CREDIT
Trade credit refers to the credit that a customer gets from supplier of goods in the
normal course of business. In practice, the buying firms do not have to pay cash
immediately for the purchase made. It is a major source of financing for firms. In
India, it contributes to about one-third of the short-term financing.
Trade credit is mostly an informal arrangement, and is granted on an open account

basis. Once the trade links have been established between the buyer and seller, they
have each other’s mutual confidence and trade credit becomes a routine activity. Open
account trade credit appears as sundry creditors on the buyer’s balance sheet. Trade
credit may also take the form of bills payable. A bill is formal acknowledgement of an
obligation to repay the outstanding amount.
It also involves some credit terms. These credit terms refer t the conditions under
which the supplier sells on credit to the buyer, and the buyer is required to repay the
credit. These conditions include the due date and the cash discount (if any) given for
prompt payment.
• BANK FINANCE

Banks are the main institutional sources of working capital finance in India. A bank
considers a firm’s sales and production plans and the desirable levels of current assets
in determining its working capital requirements. The amount approved by the bank for
the firm’s working capital is called credit limit. Credit limit is the maximum funds
which a firm can obtain from the banking system. In the case of firms with seasonal
businesses, banks may fix separate limits for the peak level credit requirement and
normal non-peak level credit requirement indicating the periods during which the
separate limits will be utilized by the borrower.
A firm can draw funds from its bank within the maximum credit limit sanctioned. It
can draw funds in the following forms: (a) overdraft, (b) cash credit, (c) bills
discounting, and (d) working capital loan.
a) OVERDRAFT
Under the overdraft facility the borrower is allowed to withdraw funds in excess of the
balance in his current account upto a certain specified limit during a stipulated period.
Interest is charged on daily balances on the amount actually withdrawn subject to some
minimum charges.
b) CASH CREDIT
Under the cash credit facility, a borrower is allowed to withdraw funds from the bank
upto the sanctioned credit limit against the security of current assets. He is not required
to borrow the entire sanctioned credit at once, rather, he can draw periodically to the
extent of his requirements and repay by depositing surplus funds in his cash credit
account. Interest is payable on the amount actually utilized. It is more flexible from
borrower’s point of view.
c) BILLS DISCOUNTING
Under the purchase or discounting of bills, a borrower can obtain credit from the bank
against its bills. The bank purchases or discounts the bill and provides the amount
within the overdraft limit. Before purchasing or discounting, bank satisfies itself as to
the creditworthiness of the borrower. When a bill is discounted, the borrower is paid
the discounted amount of bill viz. full amount of bill minus discount charged by the
bank. The bank collects the full amount on maturity.
d) LETTER OF CREDIT

Suppliers, particularly foreign suppliers, insist that the buyer should ensure that his
bank will make the payment if he fails to meet its obligation. This is ensured through a
letter of credit (L/C) arrangement. A bank opens an L/C in favour of a customer to
facilitate his purchase of goods. This arrangement passes the risk of the supplier to the
bank. Bank will make payment to the supplier on behalf of the customer only when he
fails to meet the obligation.
e) WORKING CAPITAL LOAN
A borrower may sometimes require ad hoc or temporary accommodation in excess of
sanctioned credit limit to meet unforeseen contingencies. Banks provide such
accommodation through a demand loan account or a separate non-operable cash credit
account. The borrower is required to pay a higher rate of interest on such additional
credit.
• COMMERCIAL PAPER
Commercial paper (CP) is an important money market instrument in advanced
countries like USA to raise short-term funds. In India, the Reserve Bank of India (RBI)
introduced the commercial paper scheme in the Indian money market in 1989.
Commercial paper is a form of unsecured promissory note issued by firms to raise
short-term funds. The buyers of commercial paper include banks, insurance
companies, unit trusts and firms with surplus funds to invest or a short period with
minimum of risk. Given this investment objective of the investors in the commercial
paper market, there would exist demand for commercial papers of highly creditworthy
companies.
In India, the issue of commercial paper is being regulated by RBI. Those companies
are allowed to issue commercial papers which have a net worth of Rs.10 crore,
maximum permissible bank finance of not less than Rs.25 crore, and are listed on the
stock exchange. A company can issue CPs amounting to 75percent of the permitted
bank credit.In addition to the above mentioned sources, accrued expenses and deferred
income are other spontaneous sources of short-term financing. Accrued Expenses
represent a liability that a firm has to pay for the services which it has already received.
Deferred Income represents funds received by the firm for goods and services which it
has agreed to supply in future.
OBJECTIVES OF WORKING CAPITAL MANAGEMENT

a. To minimize the amount of capital employed in financing the current assets. This will
also lead to improvement in the “Return on Capital Employed”.
b. To manage the current assets in such a way that the marginal return on investment in
these assets is not less then the cost of capital acquired to finance them. This will
ensures the maximization of the value of the business units.
c. To maintain the proper balance between the amount current assets and liabilities in
such a way that the firm is always able to meet its financial obligation whenever due.
d. To ensure the smooth working of the units without any production held-ups due to
paucity of funds.
e. To ensure easy and cheapest availability of resources at the time of growth and
expansion activities
.
DETERMINANTS OF WORKING CAPITAL
The following factors should be considered carefully while determining the amount of
working capital required:
1. NATURE OF BUSINESS – The amount of working capital is basically related to
the nature and the volume of the business. Firms engaged in public utility services
require moderate amount of working capital whereas firms producing luxury goods
require large amount of working capital.
2. SIZE OF BUSINESS – Size is also a determining factor in estimating working
capital requirements. The size may be measured either in terms of scale of
operations or in terms of assets or sales.
3. CHANGES IN TECHNOLOGY – Changes in technology may lead to
improvement in processing of raw material, saving in wastage, higher productivity
and more speedy production. All these improvements enable the firm to reduce the
working capital requirements.
4. LENGTH OF OPERATING CYCLE – The amount of working capital depends
upon the length or duration of operating cycle. The speed with which the operating
cycle is completed, determines the amount of working capital. The larger is the
period, the more is the investment in inventories and wage bills.

5. TERMS OF PURCHASE AND SALE – A firm buying raw materials and other
services on credit and selling on cash basis will require less investment in current
assets as compared to a firm which purchases on cash basis and sells on credit.
The period of credit and the efficiency in collection of debts also influence the
amount of working capital required. The terms and conditions of purchase and sale
are generally governed by the prevailing trade practices and by changing
economic condition.
6. INVENTORY - Some concerns are force to hold large inventories in terms of raw
materials or finished goods due to the reason of seasonal nature of availability, long
distances, scarcity etc, in such case the working capital requires is more.
7. BUSINESS CYCLE – Business cycle refers to the alternate expansion and
contraction in general business activities. In a period of boom when the business is
prosperous, there is need for larger amount of working capital due to increase in
sales and rise in prices of raw materials. The contrary happens in the period of
depression.
8. PROFIT MARGIN – A high rate of profit margin due to quality products or good
marketing management or monopoly power in the market, reduces the working
capital requirements of the firm, as profit earned in cash is a source of working
capital. On the contrary, firms earning low margin of profits due to competition or
mismanagement need larger amount of working capital.
9. CREDIT POLICY – A firm following liberal credit policy and thus granting
credit facilities to all customers without evaluating the credit worthiness will
require more working capital to carry book debts. On the contrary, a firm that
adopts strict credit policy and grants facilities to customers with high credit
standing will require less amount of working capital as funds tied-up in receivables
will be released promptly for further uses.

SIGNIFICANCE OF ADEQUATE WORKING CAPITAL
Adequate working capital is a source of energy to any business organization. It

provides the following advantages to a business enterprise:
1. Adequate working capital enables a firm to make prompt payments to the suppliers
and thus it can also avail the advantage of cash discount by paying cash for the
purchase of raw material.
2. If a firm has adequate working capital, it can declare and distribute enough
dividends when there are sufficient profits. This creates satisfaction among the
shareholders.
3. In business, promptness to third parties creates goodwill and increases the debt
capacity of the concerned firm. This in turn ensures uninterrupted flow of
production.
4. A firm having adequate working capital and liquid assets can arrange loans from
the banks on easy and favourable terms, as it provides a good security for the
unsecured loans.
5. Adequate working capital has psychological effect on the directors and executives
of the firm as it motivates them to work vigorously. It creates an environment of
security, confidence, high morale and increases overall efficiency in the business.
6. Adequate working capital increases the productivity or efficiency of fixed assets in
the business.
EFFECTS OF EXCESSIVE WORKING CAPITAL
Excess or redundant working capital refers to the idle funds which do not earn any
profits for the firm. “Inadequate working capital is disastrous; whereas redundant
working capital is a criminal waste”. A firm may suffer following disadvantages
from excess working capital:
1. It may lead to unnecessary purchasing and accumulation of inventories causing
more chances of mishandling of inventories, theft, waste, losses, etc.
2. Excessive working capital implies excessive debtors and defective credit policies
causing higher incidence of bad debts that ultimately affects profits of the firm.
3. It indicates inefficient management of the firm. It shows that the management is not
interested in effectively utilizing the resources and encouraging economy.

4. Excessive working capital remains idle and earns no profits for the firm, even
though interest has to be paid on it. This reduces the amount of profits.
5. It is an indicator of inefficient management. Hence, shareholders believe that they
are not getting proper return on their investments. This results in lowering the value
of shares causing discontentment among shareholders.
6. It promotes profits of speculative nature by stock-piling. It results in liberal
dividend policy, but the management has to face difficulties in future when there are
no speculative profits.

(Rs in crore)
Particulars As at As at As at As at
31.03.09 31.03.08 31.03.07 31.03.06
SOURCES OF FUND
Share holder fund
Share capital 260.10 273.30 255.58 265.48
Reserves & surplus 940.47 1197.05 1113.45 1266.47
Total 1200.57 1470.35 1369.03 1531.95
Secured Loans 1920.90 1774.94 1772.74 1688.38
Unsecured Loans 103.04 97.52 161.57 152.99
Deferred Tax Liability 12.82 12.82 12.82 12.82
TOTAL 3237.33 3355.63 3334.16 3386.14
APPLICATION OF FUND
Fixed Assets
Gross Block 3056.80 2942.99 2817.21 2192.24
Less- Depreciation (1014.51) (906.78) (772.32) (882.64)
Net Block 2042.29 2036.21 2044.89 1309.60
Capital Work in Progress 81.58 116.14 71.45 79.59
Investment 100.06 104.99 48.05 348.10
FOREIGN CURRENCY MONETARY ITEM 6.77 0.00 0.00
TRANSLATION 0.00
DIFFERENCE ACCOUNT
Current assets, Loan & Advance
Inventories 581.47 575.34 645.01 479.26
Sundry Debtors 350.84 261.77 204.85 368.28
Cash & Bank Balance 26.83 16.32 22.31 9.59
Other Current Assets 54.90 73.26 54.95 38.68
Loan & Advance 578.47 544.45 663.79 1041.44
Total 1592.51 1471.14 1590.91 1937.25
Less-Current Liability & Provision
Liabilities 463.29 360.54 408.99 243.31
Provisions 132.66 21.81 12.15 45.09
Total 595.95 382.35 421.14 288.40
Net Working Capital 996.56 1088.80 1169.77 1648.85
Miscellaneous Expenditure (to the 10.07 9.50 0.0 0.00

extent not written off)
TOTAL 3237.33 3355.63 3334.16 3386.14

Particular 2008-09 2007-08 2006-07 2005-06 2004-05
INCOME
Sales & Operating Income 2344.99 2290.33 1847.99 1592.00 1654.91
Other Income 51.91 15.91 13.17 22.52 4.99
Total 2396.90 2306.24 1861.16 1614.52 1659.90
EXPENSES
Raw Materials Consumed 695.83 611.26 571.93 500.24 612.24
Purchase of Finished Goods 257.90 305.54 36.97 4.45 7.63
Employee Emoluments 244.80 230.39 204.33 135.74 123.09
Others 924.47 861.04 780.24 534.14 542.92
Interest & finance cost 222.13 131.40 150.26 138.64 108.92
Depreciation 122.05 136.64 143.36 155.10 149.07
Exceptional items (net) 11.53 9.31 0.00 0.00 0.00
Decrease/(Increase) in Stocks (34.86) (9.49) (53.64) 9.82 (12.76)
Total 2443.86 2276.09 1833.45 1478.14 1530.60
Profit before tax for the year (46.96) 30.15 27.71 136.38 129.30
Less- Current tax 0.00 3.10 0.00 11.40 1.95
Less-Deferred Tax 0.00 0.00 0.00 8.27 0.00
Less –Fringe benefit tax 1.86 2.25 11.62 0.95 0.00
Add: MAT Credit Entitlement 0.00 (3.10) (11.61) (11.40) 0.00
Profit For the year (48.82) 27.90 0.00 127.16 127.35

Less- Prior Period Income/(Expense) 0.95 (0.54) 0.00 0.00 0.00
Profit before (47.87) 27.36 25.27 0.00 0.00
Extra ordinary items (net) 0.00 0.00 94.29 0.00 0.00
Profit after Extra ordinary items (47.87) 27.36 119.56 0.00 0.00
Balance as per last year’s balance sheet 434.92 425.00 321.17 232.74 127.77
Interim Dividend on Preference Shares (1.68) (2.48) (3.14) (3.80) (4.09)
Tax on Interim Dividend (0.29) (0.42) (0.44) (0.53) (0.53)
Proposed dividend on Equity Shares 0.00 0.00 0.00 (20.94) (19.54)
Tax proposed dividend 0.00 0.00 0.00 (2.94) (2.74)
Additional dividend on equity share 0.00 0.00 0.00 (1.40) 0.00
Tax on additional dividend (80.10) 0.00 0.00 (0.20) 0.00
Provision for leave encashment (9.58) (1.34) 0.00 0.00 0.00
Transferred to capital redemption reserves (13.20) (13.20) (9.90) (9.92) (3.48)
Transferred to debenture redemption 0.15 0.00 (2.25) 1.00 8.00
reserve
Balance Carried to Balance Sheet 282.34 434.92 425.00 321.17 232.74
( Rs. in Crore ) (Actual working capital)

WORKING CAPITAL 2008-09 2007-08 2006-07 2005-06
CURRENT ASSETS
Raw Materials 93.17 139.77 264.27 257.12
Work in process
202.19 146.58 140.12 112.56
Finished goods
255.39 243.23 198.64 71.54
Debtors
350.84 261.77 204.85 368.28
TOTAL - (A) 928.42 807.67 830.19 819.1
CURRENT LIABILITIES
Creditors
344.46 204.67 278.00 170.85
Wages 17.72 17.26 14.54 14.15
Overheads 65.4 60.55 60.57 58.99
TOTAL - (B) 427.58 282.48 353.11 243.99
NET WORKING CAPITAL (A - B) 500.84 525.19 477.08 569.11
COMPUTATION OF WORKING CAPITAL
1. INVENTORY PERIOD:-
Avg. Stock of raw material

Inventory period = ---------------------------------------- * 12 months
Cost of raw material consumed
YEAR FORMULA CALCULATION ANSWER

2008- Avg. Stock of raw material 93.17 1.6 months
09 ----------------------------------------*1 ---------*12
2months Cost of months
raw material 695.83
consumed

08 ----------------------------------------*1 ---------*12
raw material 611.26
consumed

07 ----------------------------------------*1 ---------*12
raw material 571.93
consumed

06 ----------------------------------------*1 ---------*12
raw material 500.25
consumed
GRAPHICAL PRESENTATION OF INVENTORY PERIOD
2. WIP HOLDING PERIOD:-

Stock of WIP
WIP holding period = ------------------------------------- * 12 months
Cost goods manufacturing

Avg. Stock of WIP
---------------------------- * 12 months
2008-09 202.19 1.51month
---------*12
months
1606.35
Avg. Stock of WIP
---------------------------- * 12 months
2007-08 146.58 1.15month
---------*12
months
1528.4
Avg. Stock of WIP
140.12
---------------------------- * 12 months
2006-07 ---------*12 1.21month
Cost goods manufacturing months
1387.48
Avg. Stock of WIP
112.56
---------------------------- * 12 months
2005-06 ---------*12 1.16month
Cost goods manufacturing months
1164.71
WORK IN PROGRESS GRAPHICAL TREND

3. FINISHED GOODS :-
Stock of finished goods

Finished goods = ------------------------------------ * 12 months
Cost of goods sold

2008- Avg. Stock of finished goods 255.39 2.40month
09 ------------------------------* 12 months ---------*12 months
Cost of goods sold 1279.5

08 ------------------------------* 12 months ---------*12 months

07 ------------------------------* 12 months ---------*12 months

06 ------------------------------* 12 months ---------*12 months
FINISHED GOODS CONVERSION GRAPHICAL TREND

4. DEBTOR COLLECTION PERIOD:-
Debtors
Debtors collection period = ------------------------- * 12 months
Credit sale
Here no specification for cash or credit sales. So, all the sales are taken as credit
sales.
2008-09 Debtors 350.84 1.84month

-------------* 12 months ---------*12 months
Credit sale 2295.19
2007-08 Debtors 261.77 1.45month

-------------* 12 months ---------*12 months
Credit sale 2169.08
2006-07 Debtors 204.85 0.76month

-------------* 12 months ---------*12 months
Credit sale 1811.62
2005-06 Debtors 368.28 2.78months

-------------* 12 months ---------*12 months
Credit sale 1592.00
DEBTOR COLLECTION PERIOD GRAPHICAL TREND

5. Accounts payable period:-
Creditors
Accounts payable period = ------------------------ * 12 months
Credit Purchases

2008-09 Creditors 344.46 3.74months
-----------------* 12 months ---------*12 months
1105.23
Credit Purchases
-----------------* 12 months ---------*12 months
1000.51
Credit Purchases
2006-07 Creditors 278 3.83months
-----------------* 12 months ---------*12 months
Credit Purchases 873.59

-----------------* 12 months ---------*12 months
Credit Purchases 650.86
CREDITOR PAYABLE PERIOD GRAPHICAL TREND

FORMULAS
1 Inventory holding cash ( Cost of raw material consumed/360)*RMCP
2 WIP holding cash (Cost of production/360)*WIPCP
3 Finished goods hold. cash ( Cost of goods sold/360)*FGCP
4 Debtors holding cash (Credit sale/360)*DCP
5 Accounts payable cash ( Credit purchase/360)*CDP
6 Wages (Total wages/360)*WCP
7 Overheads (Total overhead/360)*OCP
TANDON COMITEE NORMS

Tandon committee, A study group set up by the reserve bank of India(RBI) in 1974,to
examine the then prevailing system of WORKING CAPITAL financing by banks and
to make suitable recommendations on the same.
The contribution of the committee, headed by Prakash Tandon, that stands out relates
to:
 The framing of norms for INVENTORY and receivables for 15 major industries.
 Determining the amount of permissible bank finance.
The committee suggested norms, i.e. ceilings for inventory and receivables, which
could be considered for bank finance. The 15 industries included cotton and synthetic
textiles, paper, cement, pharmaceuticals and engineering. Thus, for instance, the norms
proposed for the textile industry were:
Time period of working capital
Raw Materials = 100%

Work in process = 1 month
Finish goods =1 month
Debtors = 1 month
Creditors = 1 month
Wages = 1 month
Overheads = 1 month

(Rs. in Crore) (As per tondon committe working capital)
2008- 2007- 2006-

WORKING CAPITAL 2005-06
09 08 07
CURRENT ASSETS
Raw Materials 93.17 139.77 264.27 257.12
Work in process 133.86 127.36 115.62 97.05
Finished goods 106.62 123.6 105.03 99.72
Debtors 191.26 180.75 150.96 132.6
TOTAL - (A) 551.74 587.8 658.19 596.08
CURRENT LIABILITIES
Creditors 92.1 83.37 72.79 54.24
Wages 17.72 17.26 14.54 14.15
Overheads 65.4 60.55 60.57 58.99
175.22 161.18 147.9 127.38
TOTAL - (B)
NET WORKING CAPITAL (A
376.52 426.62 362.39 468.7
- B)
WORKING CAPITAL GAP

W.C. OF ARVIND 500.84 525.19 477.08 569.11
W.C. AS PER
376.52 426.62 362.39 468.7
TANDON COMITE
282.39 319.965 271.793 351.525
M.P.B.F
218.45 205.225 205.288 217.585
W.C GAP
MPBF=0.75(Current asset – Current liabilities)
WORKING CAPITAL GAP

SUMMARY OF OPERATING CYCLE CALCULATIONS
SUMMARY OF OPERATING CYCLE CALCULATIONS
GROSS OPERATING CYCLE 2009 2008 2007 2006

1 INVENTORY CONVERSION PERIOD
(i) RAW MATERIAL 48 83 166 186
(ii) WORK IN PROGRESS 45 35 36 35
(iii
) FINISHED GOODS CONVERSION PERIOD 72 59 57 22
TOTAL (A) 166 176 260 243
2 DEBTOR CONVERSION PERIOD (B) 55 43 23 83

GROSS OPERATING CYCLE (A+B) 221 220 282 326
3 CREDITORS DEFERAL PERIOD 112 74 115 95

NET OPERATING CYCLE 108 146 167 231
NO. OF OPERATING CYCLES PER YEAR 3.32 2.47 2.15 1.56

ARVIND LTD (LAG PERIOD)
Time-lag of
Particulars
Time-lag of Arvind Limited Tondon
(Time-lag)
Committee
2008-09 2008-07 2006-07 2005-06

Raw materials 1.61 2.76 5.55 6.21
period 1.5 month
months months months Months
Work-in- 1.51 1.15 1.21 1.16
process period 1month
Finished goods 2.40 1.97 1.89 0.72
period 1month
Debtors
collection 1.84 1.45 0.76 2.78
1month
period months months months Months
Accounts
payable to 3.74 2.46 3.83 3.16
1month
creditors months months months Months
period
1month
Wages 1month 1month 1month 1month
1month
Overheads 1month 1month 1month 1month

INTERPRETATION
RAW MATERIAL:
 Raw material consumption of Arvind varies according to market requirement but

still it has maintained 100% consumption, which is in accordance of TANDON
committee.
 From the year 2005-06 to 2008-09 the time lag continuously decreased from 6.21
months to 1.61 months. So it was good try that they tried to maintain the raw
material time-lag as per the Tondon committee norms.
WORK-IN-PROCESS:
 As per the Tondon committee the time-lag for work-in-process is 1 month.

Whereas the time-lag of Arvind Limited was varies each year.
 In the year 2005-06 they almost maintained the time-lag as per the Tondon
committee norms i.e. 1 month. But there was slowly increased in the time-lag from
1.16month to 1.51 month from the year 2005-06 to 2008-09.
FINISHED GOODS:
 As per the Tondon committee for the textiles industry the time lag for finished
goods is given i.e. 1 month. In the Arvind limited in year 2005-06 the time-lag was
under the period of 1 month. In this year finished goods sold out 0.72 month
duration.
 From year 2006-07 to 2008-09 there was decrease in sales turnover. So the
finished goods can’t sell within 1 month duration. So the time duration of finished
goods increased from 1.89 month to 2.40 month respectively in the year 2006-07
to 2008-09 year.
DEBTORS COLLECTION PERIOD:
 As per the Tondon committee norms the duration for the debtors collection period 1
month for the textile industry but Arvind limited has high debtors’ collection period.
 In the year 2005-06 the debtors’ collection period was very high that was 2.78
month, but as per the market condition and requirement of cash in the Arvind limited
they tried to reduce the debtors’ collection period.

 But in year 2006-07 it almost reduced to 3 times as compared to 2005-06. After
that it showed a steady growth which rose to 1.84 in 2008-09.
ACCOUNT PAYABLE TO CREDITORS:
 As per the Tondon committee norms the period of payment to creditors is also 1
month. But the Arvind limited got very liberal credit policy for payment. So that
there were no any creditors which collect the money within a month.
 In the year2006-07 there was highest credit period that was 3.82 months among
four years and lowest credit period was in the year 2007-08 which was 2.46 months
only.
 Credit period of Arvind is almost constant in these 4 consecutive year which is near
about 3.months on average basis.
WAGES AND OVERHEAD:
 And last the Wages and Overhead which has same lag period i.e. 1 month. So it
does not create any difference.
WORKING CAPITAL POLICY

The basic objective of working capital management is that there should be an
optimum investment in working capital. There should not be either excessive working
capital or shortage of working capital. In order to decide the optimum investment
working capital, there is a need to consider different policies of working capital. The
different policies are discussed.

(A) RATIO OF CURRENT TO SALES
The current assets change as a result of changes in the sales. A firm has to decide
about the proportion of current assets to be maintained in relation to sales. There can
be aggressive, moderate or conservative current assets policies.
•AN AGGRESSIVE CURRENT assets policy is followed, a firms will
maintain a very low level of current assets in relation to sales.
•A CONSERVATIVE POLICY implies carrying of a very high level of current
assets in relation to sales.
•A MODERATE POLICY is a via media between the two extreme policies
mentioned above and results into a moderate proportion of current assets to
sales.
A MODERATE CURRENT assets policy tries to balances risk and profitability by

keeping moderate level of current assets in relation to sales
Conservative
Moderate
Current Aggressive
Assets
0 Sales
(B) FINANCING OF CURRENT ASSETS:-

In conservative current asset financing policy, a firm relies more on long term
financing such as shares, debentures, preference shares, long term debt and retained
earnings. In this method, as the emphasis is on long term financing, the firm has less
risk of facing problems of shortage of funds.

An aggressive policy is said to be followed by a firm, when it relies heavily on
short-term bank financing and other short-term sources. Even some part of fixed assets
is financed by short-term funds. The policy exposes the firms to a higher degree of but
reduces the average cost of financing.
PROBLEMS WITH EXCESSIVE WORKING CAPITAL
• It’s Results in unnecessary accumulation of inventories. Thus, chances of

inventory mishandling, waste, theft and losses increase.
• It’s an indication of defective credit policy and slack collection period.
Consequently, higher incidence of bad debts results, which adversely affects
profits.
• Excessive working capital makes management complacent which degenerates
into managerial inefficiency.
• Tendencies of accumulating inventories tend to make speculative profit
grows. This may tend to dividend policy liberal and difficult to cope with in
future when the firms are unable to make speculative profits.
Inadequate Working Capital is bad and has the following Problems:
• Its Stagnates growth. It becomes Difficult for the firms to undertaken
profitable for non-availability of working capital funds.
• It becomes difficult to implement operating plans and achieve the firm’s
profit target. Operating inefficiencies creep in when it becomes difficult even to
meet day –to-day commitments.
• Fixed assets are not efficiently utilized for the lack o f working capital funds.
Thus then firms’ profitability would deteriorate.
• Paucity of working capital funds renders the firms unable to avail attractive
credit opportunities etc.
• The firms, loses its reputation when it is not in a position to cover its short-
term obligations. As a result, the firm faces tight credit terms.

S.W.O.T ANALYSIS
STRENGHT: WEAKNESS:
 A company from prestigious Lalbhai group  Situated very far from city
 One of the oldest played in Indian fabric  Low advertisement budget

market
 Unable to handle small orders
 Can supply both fabric as well as garment
 Higher cost of production due to
 Production capacity of 7million tons heavy investment
monthly wise
 Provide quality with consistence

OPPORTUNITIES: THREATS:
 Able to handle more franchisee of  Competition from various domestic
international brands players, especially from Raymond’s
and LNJ.
 Retails are going to be a major sector in
India. Therefore demand for fabric is also  Fluctuation in price of yarn.
increasing.
 Regularly innovation in technology
 Having potential to increase their capacity,
so that they can satisfy more and more  Existing players coming up with more
customer needs. variety and innovation esp. catering
small order.
 By providing “consistency in quality” they
can attract more customers.  Change in government policy
RESEARCH METHODOLOGY
My research project has a specified framework for collecting the data in an effective
manner. Such framework is called “Research Design”. The research process which was
followed by me consisted of following steps:
Defining the problem & Research Objectives:- The definition of problem
includes the study of financial system in ITC Ltd.
Developing The Research Plan:- It is very important to research anything we
must know about the its main sources where we get the main information regarding the
research plan the development of research plan has following steps:-
Data Sources:- There are two types of data were taken into consideration i.e.
Secondary data and primary data. The secondary data has been used to make the
analysis because we have no much sufficient time and resources to collect the primary
data.
Secondary data:- secondary data is that data which is collected for other purpose.
This is indirect collection of data from sources containing past or recent past
information like annual report, balance sheet, books, newspapers and magazines etc.

Collecting the information:-For this research methodology, we were collecting
information with the help annual reports, balance sheet and other companies
publications.
Analyze the information :- In this research methodology the next step is to
extract the pertinent finding from the collected data. We tabulated this collected data
and develop the means of analyzing the data. There are so many tools for financial
analysis but we mainly concentrate on the RATIO analysis and supportive information
taken from the other means i.e. comparative financial statement with its major
components viz. common size statement, comparative financial statement.
FUTURE REQUIRMENT OF WORKING CAPITAL“ARVIND

LTD”.
♦Profit of the Arvind Limited was increased during last three year, shows that their
requirements of working capital will also increasing in future.
♦As the sales grow, the working capital needs also grow up. Actually it is very
difficult to find out an exact proportion of increase in current assets, as a result of
increase in sales. Advance planning of working capital becomes essential because
current assets will have to be employed even before growth in sales takes place.
Ones sales start increasing, they must be sustained. For this Arvind Limited will
have to expand its production facilities which will require more investments in
fixed assets. This will in turn result in more requirements of turn results of current
assets which will increase working capital needs.
♦The working capital needs of the Arvind Limited increase as it grows in terms of
sales or fixed assets. A growing Arvind Limited may need to invest funds in fixed
assets in order to sustain its growth in production and sales. This will lead to
increase investment in current assets which will result in increase in working
capital needs.

♦The operating efficiency of the Arvind Limited relates to the Optimum utilization of
resources at minimum cost. Arvind Limited will contribute to its working capital,
if it is efficient in operating costs. The working capital is better utilized and cash
cycle is reduced which reduces working capital needs.
♦The working capital requirement of a firm depends to a great extend on the credit
policy followed by a firm for its debtors. A liberal credit policy followed by a firm
will result in huge funds blocked in debtors which will enhance the need for
working capital.
The need for working capital is also affected by the credit policy allowed by the
Arvind Limited’s creditors. If the creditors are ready to supply material and
goods on liberal credit, working capital requirement are substantially reduced. If
purchases are mainly for cash, working capital needs go up. While planning the
working capital due attention should be given toward the credit policies followed
by the firm and its creditors.
RECOMMENDATION
Having done a detailed study of the financial performance and financial standing
of Arvind Limited, under this project work I would like to make the following
suggestion for the improvement in the financial management of the company, with
special reference to its Working Capital Management.
 Arvind Limited is facing increased competition in the market so it will have to adopt
more aggressive working capital management policy in order to increase its
share and sales turnover.
 It is observed that the credit period for Debtors is ranging for 30 days to 120
days. I would like to suggest that the maximum credit period should not exceed
90 days.

 Many debtors had not made the payment even after one year period. Due to this
there is reduction in the collection from the debtors year to year.
 Company has to maintain sales turnover for that purpose company has to
maintain and increase their working capital.
 Gross profit has increasing but net profit has decreasing so that purpose
effectively utilizes and maintain working capital.
CONCLUSION
Working capital is simply current assets minus current liabilities. It's the best
way to judge how much a company has in liquid assets to build its business, fund its
growth, and produce shareholder value.
• As Arvind is a cloth manufacturing company the procedure of goods to be ready

for sale takes too much time. Thus, working capital is blocked in high amount.
But with the comparison to other mills Arvind is leader of the Cloth
manufacturing. And its Working Capital is blocked for lesser time then another
mills as its inventory ‘Cotton’ plays a major role and it’s available cheaply in the
season. Also Arvind buys it in higher volumes, so it takes more time to stuff up
and the complete readymade stock takes appx 1.25 month for wholesaling.

Ac
t
• Arvind makes payment to his creditors within a month and collect from debtors
takes appx 1.25 month. So, its overall short-term liquidity position is very good.
• The mean percentage of current assets to total assets for the last four years is 40%
which shows decrease in investment of current assets.
• Overheads have increased as compare to the last two years thereby reducing the
profit.
If a company has ample positive working capital, it's is in good shape, with plenty of
cash on hand to pay for everything it might need to buy. But negative working capital
means that the company's current liabilities exceed its current assets, removing its
ability to spend as aggressively as a working-capital-positive peer. All other things
being equal, a company with positive working capital will always outperform a
company without it.
BIBLIOGRAPHY
1. Financial Management - I. M. PANDEY
2. Financial Management - PRASANNA CHANDRA
3. Financial Management - KHAN & JAIN
4. Annual Report of Arvind Limited

WEB-LINKS:
 www.arvindmil
ls.com
 www.google.co
m
 www.wikipedia
.org
OTHER BOOKS:
 Agrawal M.R,
Financial Mnagement, Garima Publications
 Pandey I.M,
Financial Management, Mc-Graw Hill Publications
Annual reports of the company for the year 2007-08, 20

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LOVELY PROFESSIONAL UNIVERSITY 2

Submitted as partial fulfillment towards the

LOVELY PROFESSIONAL UNIVERSITY 3

THE ARVIND LIMITED

TO WHOMSOEVER IT MAY CONCERN

This is to certify that JATIN KHURANA, student of LOVELY

For THE ARVIND limited.

Mr. Shobit Tyagi

LOVELY PROFESSIONAL UNIVERSITY 4

Students have to get practical training along with the theoretical

It is true that technical studies can not be perfect without practical

LOVELY PROFESSIONAL UNIVERSITY 5

Though language is a poor substitute for sentiments but still I want to

LOVELY PROFESSIONAL UNIVERSITY 6

“STUDY OF WORKING CAPITAL IN FINANCE

At ARVIND limited, Ahmadabad has been submitted as a part of the

LOVELY PROFESSIONAL UNIVERSITY 7

LOVELY PROFESSIONAL UNIVERSITY 8

LOVELY PROFESSIONAL UNIVERSITY 9

LOVELY PROFESSIONAL UNIVERSITY 10

Industrial Production 28%

Employment in the Industrial Sector 25 %

Country’s total Export Earning 28 %

CONTRIBUTIONS OF TEXTILE INDUSTRY IN ECONOMY

LOVELY PROFESSIONAL UNIVERSITY 11

EVOLUTION AND EVALUATION OF TEXTILE INDUSTRY

The ‘RAG TRADE’, as it is referred to in the UK and Australia is the manufacture,

LOVELY PROFESSIONAL UNIVERSITY 12

SEGMENTS IN TEXTILE INDUSTRY

Our textile industry constitutes the following segments

LOVELY PROFESSIONAL UNIVERSITY 13

GUJRAT TEXTILE INDUSTRY

LOVELY PROFESSIONAL UNIVERSITY 14

TEXTILE INDUSTRY KEY FACTS

LOVELY PROFESSIONAL UNIVERSITY 15

MAJOR PLAYERS IN THE TEXTILE INDUSTRY IN INDIA

 VARDHMAN SPINNING: vardhman deals in spinning, weaving and

 WELSPUN INDIA : (Manufactures terry towels)

LOVELY PROFESSIONAL UNIVERSITY 16

LOVELY PROFESSIONAL UNIVERSITY 17

LOVELY PROFESSIONAL UNIVERSITY 18

At this juncture, Arvind Mills was set

LOVELY PROFESSIONAL UNIVERSITY 19

In 1987 Arvind Mills made a conscious strategic

Today the company is engaged primarily in the manufacturing of indigo-dyed denim

LOVELY PROFESSIONAL UNIVERSITY 20

Each SBU, which is similar to a product division

Arvind has been successful in attracting high caliber

 Arvind Clothing limited.

Arvind Clothing limited (ACL), situated in Bangalore, began commercial production

LOVELY PROFESSIONAL UNIVERSITY 21

Mr. Sanjay S. Lalbhai Executive Chairman & Managing Director (Promoter)

LOVELY PROFESSIONAL UNIVERSITY 22

LALBHAI GROUP COMPANIES

LOVELY PROFESSIONAL UNIVERSITY 23

LOVELY PROFESSIONAL UNIVERSITY 24

"It is my responsibility as a leader to create an environment where excellent

FUNCTIONING OF THE ORGANIZATION

LOVELY PROFESSIONAL UNIVERSITY 25