Professional Documents
Culture Documents
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EXECUTIVE SUMMARY
Companies strive from day to day to make their business publicly strong, financially strong,
and appeasing and profitable for its shareholders. Shareholders as well as the company's
management use several tools to determine a company's health and direction. These tools
are better known as ratio analysis. Ratios are among the more widely used tools of financial
analysis because they provide clues to and symptoms of underlying conditions. Ratios help
measure a company's liquidity, activity, profitability and leverage. These four measured
sections show how ratio analysis is used in decision-making, how a firm can measure its
financial situation and financial performance, and the strengths and weaknesses of the
company. Although ratios report mostly on past performances, they can be predictive too, and
provide lead indications of potential problem areas.
Research aims to evaluation of ratio analysis in investment decision making, and to know the
financial position of the company. The report aims to provide appropriate information about
the industries and financial position with its ratios analyses technique. In literature review
part where the extract materials from various books, magazines, news papers and internet
resources. Research also consist the research methodology and data analyses and
interpretation.
Figures were obtained from comparative balance sheets and profit and loss statements from
the relevant years as well as additional information that were forwarded by the board. This
information enabled the development of percentage and ratio analysis which was then used to
create the report. The investigation revealed that the company had not improved its position
compared to previous years. The profitability of the company was significantly not better
whilst the liquidity had remained reasonably steady. The solvency of the company had
declined however, which affected the long-term obligations of the business. Overall, the
company is in a not much sounder position.
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CHAPTER-1
AN INTRODUCTION TO THE THAPAR GROUP
Where growth is not only an obsession
So long as we have confidence in the value of the goal and excitement at the
prospect of setting forth into unfamiliar territory and the will to do new
things, I have no doubt that the future of India and the future of Indian
enterprise are both safe and glorious.
Lala Karam Chand Thapar (1900 1962)
Founder of the Thapar Group
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A visionary who wanted to lay the foundation of an enterprise that would help India through
her formative years, founded the Thapar Group in the early 1920s. As pioneers they are the
fourth largest industrial conglomerate in the country, with over 54 different companies and 80
manufacturing plants. Assets have accumulated over Rs. 24000 million with an annual
turnover of about $2 billion. The group grows annually at the rate of over 19%. The group
has diversified industrial interests that include paper, Chemicals, Textiles, Manmade Fibers,
Glass, Electronics, Heavy Engineering, Diesel Engines, Power Equipment, Motor and Pump
sets, Gensets, transmission and Distribution Equipments etc. Beyond this, the Thapar Group
manufactures equipment for industries related to Aviation, Mining, Marine, Metallurgy, Oil
exploration, Shipping, and Mechanical handling. Industrial products like Electronic Process
Instrumentation Boilers and Furnaces, Steam and Energy Control Equipment are also the part
of Thapar Groups activities. Software Growth is another area that Thapar Group has
explored.
Flagship that represents the Thapar Group:
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The group owes its success to a well known attitude of doing business globally and
nationally, an attitude that involves lighting changes, both in terms of technology,
infrastructure, and ability to adopt the changing scenario at home and abroad, and a warm
management philosophy that always puts people first.
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constant growth in the man-made fiber with a wide variety of nylon and polyester filament
yarn.
LOCATION OF JCT
The mill is situated in Phagwara town on G.T. Road, the national highway number -1. It is 40
Kilometers from Ludhiana towards Amritsar. The location of the mill is of great advantage as
transportation of goods is cheaper, easier and quick.
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J.C.T. FACTUALS
Established in
: 1946
Operation of production
: 1951
Spindle
Looms
: 17856
: 390
Spindles
: 63244
: 1488
Looms
: 450 Conventional
171 Sulzer
28 Air-Jet
: Workers 4500(app.)
(Engagement)
Staff 550 (app.)
Regd.Office
: Village Chohal
District. Hoshiarpur
46001 (Punjab)
Corporate Office
: Thapar House
124, Janpath
New Delhi-110001
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BOARD OF DIRECTORS
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To consolidate and develop core business areas mainly: synthetic and textiles.
To attain the position amongst the leading composite textiles mills in India and to
retain its position among the top companies in the synthetic fiber industry.
To expand and diversify into allied product areas and simultaneously increase global
presence & develop international together with domestic market to achieve rapid
growth.
CORPORATE PHILOSOPHY
JCT believes that there exists a psychological contract between the organization
and the employees and growth of both is interlinked.
JCT strive to attract, develop and retain the best talent available.
JCT doesnt believe in any discrimination on the basis of caste, creed, religion,
gender.
JCT encourages teamwork and believes that this enhances problem solving
capabilities.
JCT actively promotes sports and other cultural activities for cohesiveness and
harmony.
JCT knows that is the part of the changing environment and that it has to be proactive to such
changes. JCT continuously strives to be a better corporate citizen.
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Year Events 1946 The Company was incorporated on 28th October in Kapurthala.
The main object of the company is to manufacture cotton textile goods. The products
manufactured are sheetings, shirting, cambric, dhotis, sarees, coating, mazril, mulls, etc.
Counts ranging from 12s to 60s are spun and the cloth width varies from 27 inches to 66
inches.
1950 430 preference & 30,910 Number of equity shares allotted. 1815 prefence &
36135 shares forfeited.
1962 The Company acquired Benares Cotton and Silk Mills.- 4,16,364 number of
rights of equity shares issued (prem. Rs 5, prop. of 1:1)
1963 Preference shares entitled to gross dividend of 6.5% P.A
1967 4,16,275 No. of equity shares issued in prop. 1:2
1973 The Company entered in to a collaboration agreement with Thonburi Textile Mills, ltd.,
Bangkok whereby the Company was to render technical Knowhow for modernizing the
existing weaving and processing facility besides its expansion by 21,600 spindles. This
agreement was slightly revised during 1978-79.
1975 25,000 11% pref. shares issued.
1978 Shree Sadul textile, ltd. was merged with the Company on 28th October and the
merger was effected from 1st February 1977.
-Taplon Synthetics Ltd. was amalgamated with the company with effect from 1st
Feb. 1979. As per the scheme of amalgamation, 2, 02,535.Number of Equity
Shares of the company were allotted to the members of Taplon synthetics Ltd. after
Cancelling 28,200 No. of equity shares held by the company as investment in Taplon
Synthetics Ltd.
-2,38,108 No. of Equity Shares and 24,839 pref. shares allotted to members of
Shree Sadul Textiles Ltd. upon its merger with the company.
1979 With effect from 1st February, Taplon synthetics Ltd was merged with the
Company
-7, 64,117 bonus Equity shares issued in proportion of 1:2 2,760 bonus equity
shares
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1980- 2277026 rights equity shares issued at par in prop. 1:1, 319 bonus shares
allotted to non residents (244) bonus shares remain to be allotted. 202535 No. of Equity
Shares issued to members of Taplon Synthetics upon its merger.
1981 - The Company received a letter of intent from the Punjab State Industrial Development
Corporation to participate in a 15,000 tonnes per annum, polyester staple fibre project to be
set up at Hoshiarpur in the Company's nylon plant premises.
-A technical collaboration agreement was entered into with E.I. Dupont, De Nemours of
USA. A new Company under the name and style of Punjab Polyfibres, Ltd. was incorporated
to implement this project.
-A letter of intent was received to increase the capacity from 15,000 tonnes to 30,000 tonnes
per annum.
-The Company entered into a management & Technical Know-how Assistance Agreement
with Chempaka Negri Lakshmi Textile SND, BHD at Malaysia
1983- 100000 13.5% pref. shares were issued. Rate of dividend on these pref. shares was
increases to15% from 16th may 1984.These pref. shares are redeemable during 30th
April1996-99
1986 - To improve the profitability of the Hoshiarpur unit, the Company took steps to convert
a substantial part of its production capacity for the manufacture of polyester filament yarn.
-A letter of intent was received for the manufacture of 15,000 TPA of polyester filament yarn.
-At Sriganganagar unit operations were adversely affected due to workers strike for 3 months
during October to December.
1987 - The Company offered 7,58,334-12.5% partly convertible secured redeemable
debentures (E-Series) of Rs.120 each for cash at par on rights basis in the ratio of 1
debentures were allotted to retain over-subscription.
1988 - The Company took up implementations of the PFY project in stages. It was planned
to add one spinning line to produce specialty yarn, in the first stage.
- A dyeing plant was installed at Hoshiarpur, to increase the production of dyed yarn. In
addition, a waste recycling plant was installed to increase the recovery of caprolactum from
waste. In April, the name of the Company was changed from `Jagatjit Cotton Textile Mills,
Ltd.' to JCT, Ltd.
1990 - With effect from 1st April the undertakings of Kidarnath Kishanchand Pvt. Ltd.,
(KKPL) and Sterling Steels & Wires, Ltd. (SSWL) were amalgamated with the Company.
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As per the scheme of amalgamation the following shares were allotted without payment in
cash.
1991 - The profitability was adversely affected by various factors such as increase in interest
rates, devaluation, and partial convertibility of Rupee etc.
-The performance of the nylon and polyester filament yarn division was affected due to steep
increase in excise duty, poor off take of textile material, increase in the cost of the basic raw
material viz., caprolactum and import curbs.
-Also the textile division was affected by the general recession in the textile market and
unprecedented rise in cotton prices.
1992- The Company offered 9723759 No. of equity shares of Rs. 10 each at a premium of
Rs.40 per Shares.
-During October-November the Company offered 36637091. No. of equity shares of Rs.10
each for cash at premium of Rs.40 per shares on rights basis in the prop. 1:1 (all were taken
up).
1993 - With a view to consolidating its position in the synthetic fiber industry, the Company
undertook to set up a grass-root polyester simplex with facilities to manufacture polyester
staple fiber, textile grade chips, PET resins up to 11,000 TPA all in the first phase.
-With the rise in prices of cotton, it was proposed to shift production towards polyester
blended fabrics. New varieties of cloth with high value addition were introduced.
-The Textile division embarked upon a plan of modernization wherein older equipments were
to be replaced with modern and efficient equipment.
-Both 20000-5% and 24869-5% (income tax free) cumulative preference shares were
redeemed.
1994 - The steel division entered into a tie up with a Korean Company for manufacture of
wire ropes.
-JCT Fibers Ltd., was merged with the Company. It was proposed to increase the polymer
capacity to 65,000 TPA from 33,000 TPA. The said additional polymer was to be processed
partly on polyester filament yarn and partly on polyester staple fibers.
-The Company also undertook to invest in downstream equipment to manufacture additional
polyester filament yarn and additional polyester staple fiber.
-Under a modernization/replacement programmer, the Company proposed to install 48 high
speed sophisticated looms and open end spinning machines at Phagwara.
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2001 - The Company has decided hive-of its synthetic fiber division in Punjab and has also
proposed to restructure its equity capital by reducing the face value of its shares from Rs 10
to Rs.2.50
-MM Thapar group flagship JCT has decided to induct three new professionals on the board.
The new inductees are Raj Mohan Singh, head of the company's Phagwara unit, finance head;
T N Subramanian and; S P Narang, secretary, The Institute of Company Secretaries of India .
2003 -JCT Members approve delisting from 3 exchanges (Ludhiana, Delhi and Kolkata)
2004- JCT buys Senegal mill. JCT Limited, a pioneer in textiles in north India, is all set to
spread its operations overseas. Through its subsidiary, CNLT Malaysia, JCT has acquired a
composite textile mill in Senegal on a long-term lease
2005- JCT gets UN nod for carbon trading. Textile major JCT's rice husk-based power project
at its plant in Phagwara, Punjab, has been registered with the UN panel for clean
development mechanism (CDM) projects. CDM projects are those that qualify to trade
carbon credits.
2007- JCT signs MOU with Dakshidin Corporation to produce water pumping & power
generation Wind Mills, Dakshidin Signs MOU With Indian Conglomerate, JCT Limited,
Enters Multi-Billion Dollar Indian Market.
JCT Limited, the flagship company of the Thapar Group, has been a fore-runner in the field
of Textiles ever since its inception in 1951. The Group has combined turnover of US $2
Billion in the year 2004-05. The groups constant endeavor has been to upgrade
manufacturing processes and capacity to world standards, which has resulted in
collaborations with some of biggest multinational corporations like TEIJIN SEKIE from
Japan, NOY-VALLESINA, Zimmer AG, Hitachi Ltd., Corning, Mitsubishi Corporation,
General Electrical, Westing house and David Brown.
JCT Limited, under the leadership of Mr. M Thapar (Chairman) and Mr. Samir Thapar (Vice
Chairman) is premier Indian Cotton Textiles and Nylon Filament Yarn manufacturer having
manufacturing facilities in Northern India. JCT Limited is well renowned brand name in
Cotton Textiles and Synthetic yarn communities in India and abroad. For their regular and
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consistent exports Govt. of India has awarded Export house status to the company for past
10years on regular basis.
JCT belongs to THAPAR GROUP, one of the most reputed business groups in India. The
Thapar group of companies was founded in early 1920s by Late Lala Karam Chand Thapar,
which grew in size and scale to become the fourth largest conglomerate in the country during
early 1990s with over 40 companies and 75 manufacturing plants. JCT Limited is an Indiabased company. The Company operates in two business segments: Textiles and Filament.
JCT is a leading name in the domestic and overseas textile markets
with operations in two distinct business viz. cotton/blended textiles and nylon filament yarn.
It ploughs on proudly as a multi-market company that is driven and fueled by culture and
values that demand a high standard of performance and work ethics to establish itself as
makers of finest products in the country. JCT Limited follows a balanced model for growth
corporate responsibility and contribution towards social causes such as literacy and
environment, sports and sportspersons development areas important as innovations in
production techniques.
Domestic Market: The Company is a leader in Domestic segment and derives premium
on its products. We are the first one to introduce Micro Denier Products in collaboration with
Val Lesina- Italy. The group owes its success to a well known attitude of doing business,
globally and nationally. An attitude that involves effecting lightning changes, both in terms of
technologies and infrastructure and the ability to adapt to changing scenarios at home and
abroad. Company has strong hold and efficient distribution across India and abroad.
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International Market: The courage to look beyond national fences has today made
filament division as leading exporter of value added product Nylon Filament Yarns from
India. Today JCT has many Global Customers, satisfied with their product and service, few of
their regular international markets are:
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Strengths
Cheap labour.
Weaknesses
Outdated machinery.
Till the last year JCT did not have any customers service department.
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Opportu
nities
The market is open for export and JCT should focus on it.
The company should make an attempt to improve the distributors chain, increase
number of dealers and retail shops in urban areas.
Techniques being used in the modern firm for better utilizations of present resource.
Threats
Competition with volume markets like China, Indonesia, and Bangladesh etc.
Growth of discount and range market case for price competitiveness and volumes.
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PRODUCT OVERVIEW
JCT ltd has product range of material including 100% cotton, 100% polyester, 100% nylon as
well as various blends like cotton/polyester, cotton/nylon and polyester/viscose, single and
piled yarns (both with counts and ranging from 6s to 100s) as well as cotton lycra and P/C
lycra stretch material (which is dupont USA approved). Depending upon the requirement,
even bamboo and linen fibers are used to create special effects.
The company pioneered the manufacture of organic cotton, a special eco-friendly type of
fabric that is available in up to 160cm of sheet width. This organic cotton is grown on land
free of any harmful chemicals, insecticides etc.and is regularly exported to USA. JCT ltd is
certified with ISO 9001, Oeko-tex 100 class 2 and GOTS/skal certificates for fabrics of this
nature, namely wide width sheeting, dyed bottom-weight twills, dyed shirting twills, natural
twills, canvas and flannels.
The companys strength lies is in the bottom weights and piece dyed shirting for both fashion
and work wear in all age groups. They use a variety of weaves like twills, plains, dobbies,
ripstops, cords, satins, oxfords, ducks, drills, tussores, ottomans etc. End product includes
fashion wear, sportswear, outerwear, active wear for defence purposes and school uniform.
The organic cotton fabric meanwhile is used for everything from infants wear to technical
segments like medical wear.
Material: 100% Cotton, 100% Polyester, 100% Nylon Various blends of Cotton/Polyester
and Cotton/NylonBlends of Polyester/ Viscose, Cotton with Lycra, Poly Cotton with Lycra.
100% Bamboo, Bamboo Cotton blends, Cotton Linen blends.
Yarns: Count ranging from 6s to 100s, in single as well as plied yarns, Core Spun Lycra and
slub yarns
Weaves: Variety of weaves like Twills, Plains, Dobbies, Ripstops, Cords, Satins, Oxfords,
Ducks, Drills, Tussores, Ottomans etc.
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Weight:
Cotton
and
Polycotton
Polyester and Nylon: 60 GSM to 250 GSM
90
GSM
to
450GSM
Finishes And Coating: Micro sanding, soft finish, peach finish, Calendaring.
Water
and
oil
repellant,
Teflon,
Nano,
Wrinkle
free/
easy
care
Fire
retardant,
Inspect
repellant,
UV
resistant,
Anti
microbial.
Stiff finish, Highly breathable, Moisture Management, Rot proof, etc.
PU coating, acrylic coating, Water repellent, fire retardant, breathable coating, Silver and
Gold coating, PVC Coating & various other effects.
Prints And Yarn Dyes: Variety of designer prints for body fabrics and linings
(Camouflages,floral,
blotches,
etc.)
Designer yarn Dyes for Bottom weights and shirting.
Organic Cotton: JCT is pioneer in manufacturing organic cotton fabrics in India - specially
designed eco-friendly fabrics.
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RESOURCES
Plant Overview
JCT Limited commenced its textile operations in 1946. The Phagwara unit of JCT Limited is
a composite textile unit having Spinning, Weaving Processing facilities. Today JCT Limited
is an ISO 9001:2000 certified company and has secured GOTS Certificate for Organic
Processing. It is also one of the few globally recognized OEKO TEX-100 certified companies
of Class-II category.
The company produces fine and superfine cotton fabrics. The synthetic fabric range includes
plain superfine suiting, shirting and dress materials in myriad designs and weaves. In
addition, JCT also markets a delightfully warm range of up-market shirting and uniforms
material
in
various
textures,
hues
and
designs.
The fashion climate in the world is changing constantly. A company in the business of
manufacturing fashion fabric needs to react with lightening speed to effect process changes.
JCT Limiteds flamboyant innovativeness in styling and design satisfies the hunger of the
fashion conscious. The company has a dedicated R&D setup that keeps looking for
significant improvements in spinning, weaving and processing techniques - an exercise
crucial to design breakthroughs. Elaborate computerized testing facilities are in place to
monitor quality right from the fibre stage; HVI fibre testing along with various other
equipment monitor physical and chemical characteristics of textiles. Uster classimat,
Evenness Tester from `Uster of Switzerland and Computerized Colour Matching Machines
further ensure 100% quality assurance to buyers around the World.
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Weaving section has 283 looms in mix of Sulzer Projectile, Airjet , rapier looms. It has
capability to produce 100% cotton, and poly cotton blended fabrics in large variety of
weights, weaves and counts. These machines are Sulzer and Picanol and well supported with
preparatory machines from Benninger, Switzerland.
The unit is having 3 spinning sections - Open End Spinning, Cotton Ring Spinning and
Blended Ring Spinning. All machines equipped with new technology from the companies,
like Zinser, Trutzschler, Trumac, LMW, Erfangi, Crossrol & Vouk. Company has about 54000
Ring Spindles and 1488 Rotors in its spinning section.
JCT has captive power plants of 5.5 MW and 8MW, which is based on biomass fuels like,
rice husk. These plants are well equipped with state of the art pollution control devices.
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The JCTs new plant is the first of its type in whole of South Asia. The production from this
plant fills in the gap in the supply chain. With most brands strengthening their sourcing base
for garmenting out of India, procurement of this fabric from Far East was a nightmare in
logistics. With increasing demand on shortening the supply chain, the availability of such
fabrics in India will save 20 to 25 days for sourcing such garments out of India. The plant
has capabilities to produce different functional finishes and special coating effects.
The plant is equipped with state-of-the-art technology with water jet weaving machines from
Tsudakoma, Japan. Processing machinery from Il Sung and other suppliers from Korea &
Taiwan.
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Bankers
STATE BANK
OF
PATIYALA
STATE BANK
OF
TRAVANCOR
E
STATE BANK
OF INDIA
BANKERS OF
JCT
ALLAHABAD
BANK
PUNJAB &
SIND BANK
PUNJAB
NATIONAL
BANK
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1) Spinning
A)
B)
C)
D)
E)
Cotton Spinning
Synthetic Spinning
Spinning Auto-Coro/ Open End Spinning
Spinning Maintenance
Post Spinning
2) Weaving
A)
B)
C)
D)
3) Processing
A)
B)
C)
D)
Synthetic Processing
Cotton Processing
Finishing
Printing
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1) Warehouse
A)
B)
C)
D)
E)
Mending
Grey Folding
Cotton Warehouse
Synthetic Warehouse
Exports Warehouse
2) Marketing
A) Domestic Marketing
B) RMG Marketing
C) Exports
3)
4)
5)
6)
7)
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PRODUCTION DEPARTMENT
A) Spinning
1. Cotton Spinning
Synthetic Spinning
This department also produces yarn but uses the blend of Polyester and Cotton
(PC) or Polyester and Viscose (PV). The process of synthetic spinning differs as
per the PC and PV blends.
2. Spinning Autoconer/ Open end spinning
The spinning autocoro section works under the open end technology. The section
gives many advantages over the conventional spinning process.
3. Spinning Maintenance
This department is responsible for the preventive maintenance of all the three
spinning sections. This section deals with many cases like replacement of broken
machinery parts and cleaning of the machines. This section plays a major role in
the working of the spinning machinery.
4. Post Spinning
This section comes after the final spinning in the ring frame section. The main
objectives of the section are:
To clear the yarn from the thin and thick places (correcting the faults). It is
essential to impact proper tension to the yarn so as to reduce snarls and
hence breakages in the future process.
Different machines used in the process are:
Cone winding
Cheese winding
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B) WEAVING
1. Weaving Preparatory
The main objectives of this section are:
To prepare the sheet of warp yarns (warping) as per the designs and the
percentage of colors threads used.
To prepare the packages for weft yarn.
To seize the yarn so that the thread can withstand strains in the weaving
process (sizing).
Drawing in / Tying in.
2. Weaving Conventional
This section provides gray fabric based on weaving machines used for fabric
manufacturing.
3. Weaving Sulzer
As the mass of the shutte (weft carrying package in conventional weaving) is very
high, so the acceleration or the acceleration of the shuttle is very less. So we can
increase the production by using lightweight weft carrier. Sulzer technique is
based upon this principle and is widely used in JCT.
4. Weaving Air jet
C) PROCESSING
Process house
The department comes into action when fabric from the weaving section is
obtained in the grey stage. Different chemical treatments are given to the fabric so
as to improve its appearance and properties. This section is divided in three main
units:
Benninger Plant
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Cotton Processing
Synthetic Processing
2. Inspection
3. Planting
4. Grading
There are certain faults and damages, which are left in the cloth even if the cloth is
processed carefully. Following are the types of damages possible: Crack
Patties
Double picks
Lashing
Floats
Shuttle floats
Designing cuts
Swai
Phutki
Draw picks
Missing ends
Reed marks
Stain
Salvage
Torn
Packing is done on the basis of following standards:
Suiting:1. Plain Suiting
2. Fancy Suiting
3. Matty
2. Fancy Suiting
3. Rubia
That part of the cloth which is not included in the bales or the rejected parts of cloth
are future divided into chindies, fents and rags depending on their lengths
Warehouse Cotton
Warehouse Synthetic
Warehouse Grey Export
B) MARKETING DEPARTMENT
After the manufacturing process is over, it is the duty of the marketing department to sell
these manufactured goods to the retailers and wholesalers at profitable rates. The
marketing department has three sections:
Domestic Marketing
JCT is largest supplier of fabrics for ministry of defense and has been a
reliable supplier for past 25 years.
JCT has a strong presence in school uniforms and institutional suiting and
shirting.
JCT has the largest dealer and distribution network.
RMG Marketing
Exports
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Different market has different dynamics. Some markets like Nepal, Srilanka,
Bangladesh, etc are thriving purely because of Quotas.
JCT works with overseas agents on commission basis.
Catering to following countries- USA, Italy, Spain, Holland, Czech Republic,
Greece, Portugal, Germany, France, Singapore, Mauritius, South Africa,
Kenya, Bangladesh, Nepal, Australia, Madagascar, Egypt, UAE, Turkey,
Kuwait, Baharain etc.
Type of buyers-Buying houses, readymade garment manufacturer, Stockiest,
Traders etc.
Exports turn over-1 million meters per month.
Type of fabric-dyed, bladched, grege, now more orientation towards dyed.
Whole world distributed in five zones.
Total 8 per son in marketing.
6 per son in pre & post shipping.
80% business through L/c, balance on advance payment or on CAD basis.
D) FABRIC DEVELOPMENT
To grow effectively in the industry, development is very necessary. Changes in the
ongoing processes are made to create an improvement in the design and the quality of the
fabric. Fabric development department is working in this direction. It is directly related
with the marketing department and also to the whole mill directly or indirectly. As per the
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requirement of the marketing department, the desired design and the quality of the fabric
is developed. The whole process is carried on with the help of computers.
E) PRODUCTION PLANNING
This department acts as a conduct between the marketing department and the production
department. The main objectives of the planning department are:
Checking the feasibility of the order and the specifications placed by the customer.
To plan the entire production process to meet a particular order in the set time
limit.
To ensure that the fabric so produced confirms the specifications of the order and
the marketing department.
All changes in the production are made with the consent of the planning
department.
Thus, this department focuses on the utilization of the full capacity of all the production
units. It works for the proper management.
G) ISO CELL
This is the cell for the International Standards Organization. The scope of this department
is Department; Production & Marketing of Cotton & Blended Yarns & Fabric for apparel
uses. This is basically a quality management system. The British standards Institution
(BSI) gives the ISO standards and certification. JCT at present is an ISO- 9001:2000
certified company. This certification relates to the following:
Development
Production
Servicing
The BSI gives the certification after a through audit and followed by half yearly
sevilience Audit. An internal audit is carried at an interval of 6 months. The external audit
includes the following:
Observation
Non conformity
Suggestion for further improvement
The internal audit is done by a team of 16 members (one from each department). JCT
limited it yet to go for the ISO-14001 & 18001 Certification.
SERVICE DEPARTMENTS
A) Engineering Department
The main purpose of this department is to repair the damaged machine parts and to
manufacture the new parts so that the time can be saved, rather than getting it repaired
from the outside sources. This department has six sections:
Workshop
Utility
Power House
Electronics & Electrical
Civil & Constructions
Effluents Treatment Plant
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It is that branch of management that deals efficiently with the proper utilization of human
resources and to get the maximum output. The major focus areas include
Man Power Planning
Recruitment and Training
TQM-Quality Circle, Kaizen & Cross Functional Teams
Employee Performance
Employee Welfare
Personal Records
It also takes care of discipline matters, personnel information system etc. It also provides
strategic and logistic support to the industrial relation matters of the company.
To develop software for various reports as per the need of different departments.
To maintain the efficient working of the various modules of Ramco Applications
& in house Developed Software.
To maintain the security of data and different reports in the company.
To provide online information to different departments for they are efficient
working.
To develop new software and reports for various departments for the smooth flow
of information.
To provide & maintain the network as well as the Computer hardwares of the
company.
To ascertain the results of the business activities carried on during the year.
To show the financial position of the business as on a particular date.
To meet the requirements of the taxation authorities, investors, management and
owners.
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E) Purchase Department
All the purchases made by the mill are made through this department (except the raw
materials). This department manages the purchase of the following items:
New Machinery
Dyes and Chemicals
Packing Materials
Capital Goods
Spare parts for all machines
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F) Administration Department
The administration department ensures Office Establishment, Dispatch, Transportation,
Records Leave & Insurance of the company. The main objectives of this department are:
Office Establishment
Transportation
Records
Leave
Insurance
G) Factory Department
The factory department ensures safety, security and welfare of the workers of the
company. The main objectives of this department are:
To ensure safety and security of the staff and workers.
Disciplinary actions in regard to workers.
Recruitments of workers and allotment of departments.
To keep the record of the attendance of the staff members and the workers.
To prepare the statement of the salary and wages of the staff and the workers.
This department is also called the personnel department. It ensures the safety, security and
welfare of the staff and workers. It takes care of disciplinary actions and sports. This
department is further divided into following sections:1. Time Office: This section deals with recording of time of workers, staff members and
trainees with the help of numbered cards.
2. Safety Department: There are three safety officers in JCT. If an accident occurs
inside the plant then proper enquiry is done so that this could be avoided in the future.
3. Security Department: This department makes all arrangements of security in the
factory.
4. Establishment: This department makes the records of wages and salaries of staff and
workers. Employees Staff Insurance Corporation provides the staff members free
medical services.
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CHAPTER-2
OBJECTIVES OF THE STUDY
1. To demonstrate the size of the market opportunity.
2. To explain the business model.
3. To show the path to profitability.
4. To quantify the investment requirement.
5. To facilitate valuation of the business
RESEARCH METHODOLOGY
Research design stands for the framework of research. The research design utilized in this
study
is descriptive.
Data Collection
Data refers to information or facts. It is not only refers numerical figures but also includes
descriptive facts. While deciding about the method of data collection to be used for the study,
The researcher should keep in mind about two types of data, such as primary data and
secondary data.
Primary Data
I have collected the primary data through some face-to-face formal interviews with staff.
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Secondary Data
Secondary data means data that are already available in the organization. The researcher has
to look into sources for the data from where he can obtain data. The secondary data may
either be published or unpublished.
Published data will be available in
Magazines
Journals, books
Reports by management, scholars, economist etc
The secondary data for conducting the study has been taken from Financial Statement that is
Income Statement, Balance Sheet Statement, Annual Reports of Company and some other
financial records.
CHAPTER-3
COUSRE OVERVIEW
'Project Finance Modeling' is designed to help middle and senior managers deal with
financial models from disparate sources, enabling them to be compared and analyzed on a
consistent and focused basis.
The principal aim of the course is to teach participants to create, use and analyses a project
finance model .These skills can be used to support credit approvals and reviews by lenders
and to support organizations which run or sponsor projects. This will be done by reviewing
best practice in model structures and logic, and using tools to highlight areas of risk,
particularly in sensitivity analysis.
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FINANCIAL MODEL
A financial model is anything that is used to calculate, forecast or estimate financial numbers.
Models can therefore range from simple formulae to complex computer programs that may
take hours to run.
At the simple end a valuation ratio, such as the price earnings ratio (PE), is a simple valuation
model. Although the term model is rarely used for something quite as simple as a
straightforward, commonly used ratio, it is commonly used for slightly more complex
formulae of a similar nature.
Specific methods of calculating numbers are often called models: for example, application of
a discounted cash flow (DCF) to dividends to value a share would be called a dividend
discount model.
Spreadsheets used for budgeting and for forecasting profit and cash flow are also financial
models.
More specialist computer software is used for more complex models, especially those that
require a more complex application of statistics and financial mathematics.
In areas such as risk management and economic forecasting, the models used are extremely
complex. Models such as value at risk are implemented using specially written computer
programs. Investment banks employ quantitative analysts and computer programmers who
specialize in devising and implementing financial models.
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modelling companies can engage in calculated risks that will minimize the danger of failure
while maximizing the potential rewards. By learning these skills then you will be able to
create comprehensive models of companies, prepare valuation of a business, project or
scenario and accelerate your career and your company as a result.
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I n
r o
s t r y
r p
r a
t e
i n
i n
i c
i n
i a
i a
i a
l s
l s
l s
Now that weve looked at the context of financial models from an economic and financial
analysis perspective, let us now examine financial models specifically from a financial
modeling build perspective. Financial models can generally be classified into 3 categories:
DS pi e m e t e c u r l
mai a t l i oi n z n i s
Bte i d c a s e d
F in a n
nc i c a i l a l
M ode
el s l s
S p D e ec S ti ea i rl m im z u e i l n d a i t s F i t o i n c a F B n i c a n i s a e n l d c M i F a o i l n d M a e n l o s c d i a e l s M o d e l s
Multiple sensitivity analysis tables can be combined in a scenario manager. The scenario
manager is useful when there are interdependencies between the changing variables, as
financial analysts can configure and change multiple variables in each scenario.
In certain scenarios, multiple regression analysis is used to determine the mathematical
relationship between multiple variables in a deterministic financial model, and such analysis
is termed econometric analysis.
The deterministic model is probably the most common type of financial model used in
business and finance today. Most financial forecasting models used for revenue management,
cost management and project financing are primarily deterministic based financial models.
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o DCF Valuations
o Whole-Of-Business
o
3. Dashboard Outputs
4. Powerful Charts
1. Models try and minimize financial risk, as u know if u do this then this is likely to
happen
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2. Models provide quick answer to things that may take month to actually happen.
Automatic recalculation means that if a change is made in the model then all related
formulae and value change.
3. As long the person is familiar with the model and a good set of rules to follow than it
is easy to run the model.
4. They provide consistent result the same input will always produce the same answer
so a decision to make that loan to a customer by a finance employee does not depend
on how that person is feeling that day.
5. What if.. Statements can be asked without rebuilding a model from scratch each
time the test is executed.
6. Graphs can be shared between different people in different locations.
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1. Keep it simple.: This is most important. You are into all the details of your business.
You really like to be on top of everything. And might be tempted to create a model that
covers every eventuality and every variable. Dont. The purpose of a financial model to be
shared with investors is to get them excited about your business. You may have budget
spreadsheets that go into a lot of detail. But the place for that complexity is in your back
office, not the model you share with investors. Think of the model as a way to tell the story
of your business. It should be easy for someone to follow and understand. This requires
effort and time and you need to put in the effort. Examples?: make sure you use a format that
is easy to follow, dont have too many unnecessary sheets in your file, clearly state and label
the assumptions vs. the calculations, dont create too many assumptions/variables if they are
not consequential to the business; emphasize the appropriate time period for your business
(monthly, quarterly, yearly).
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3. Altitude is important. This is closely related to the 1st point. Make sure you can see
the forest and not just the trees. You need to know what level of detail is important to your
audience. Understanding how much ink toner you are going to use is not relevant unless you
are in the publishing industry. The level of detail has to be relevant to what your investor is
trying to understand. Most likely whether the business has potential, can it grow fast, be
profitable or require too much capital; not whether you can predict the travel budget of your
salesperson in year 5. You model also needs to be relevant to the stage of your business. At
the stage of an idea, you should only have general assumptions around key items. Not things
you cant predict that are irrelevant. Creating too much detail not only makes it hard to
understand your business; it also says you are not in touch with reality, so make sure you
fly at the right level.
4. Find the key drivers Our financial model is not a crystal ball into the future. And
investors are not asking you to predict the future. What they want to understand is what
drives your business. What will accelerate or slow down your business, what will make it
more profitable or less capital intensive? In every business there are a few numbers that
business performance is most sensitive to. The most important thing you can do with your
model is help identify those things that drive your business: the key drivers. Is it sales
conversion, number of customer calls per sales person, cost per widget by volume, growth in
demand, etc? Understanding and clearly explaining what those are has a double bonus: it
helps investors understand your business and also sends the message that you are on top of
your business. Both build trust and confidence in investing.
5. Well spaced bread crumbs We need to help investors understand the story of your
business. We need to guide them so that they stay engaged and interested. You need to
make it easy. Here is a practical example: create a power point presentation to explain our
business model. One of the companies we looked at recently came prepared with a
presentation that highlighted all their main assumptions, compared those key assumptions to
other competitors and highlighted why they thought they were conservative and reasonable in
their projections. That made it a lot easier to follow and significantly shortened the amount
of time we would have to spend on due diligence.
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to run or if it takes some extra work every time to create the outputs. A model that will be
used frequently, however, should be designed differently.
input variables. You have to take somewhat different approaches to testing and debugging a
model depending on whether you are working with Excel or VBA. Both Excel and VBA
provide some special tools for this purpose; I will discuss these tools and provide suggestions
on how to debug models in Excel and VBA in later chapters.
Here are a few helpful hints that apply to both:
There is no standard approach to testing and debugging a model. You almost always have
to use your ingenuity to figure out what will be the best way to test and debug a particular
model. Your ability to do so will improve with experience.
The better you understand a problem and a model, the easier it will be to
Debug it. If you understand how changes in certain independent variables affect the values of
certain dependent variables, then you can change the values of the independent variables to
see if the dependent variables are changing in the right direction and by the right orders of
magnitude. This is one of the best tools, especially for debugging large models, and you
should do a lot of testing using this approach. You can also use this approach to hunt down
the sources of the problems: Starting from a value that looks wrong, backtrack through the
values of the intermediate dependent variables to see where the problem may be originating.
This approach may sound somewhat vague and abstract, but with experience you will find
that you can locate and fix most bugs rapidly using this approach.
checking a models output against hand-calculated answers is a common and effective
approach to debugging. In some situations, doing hand calculations may not be practical, but
you may be able to use Excel itself to do some side calculations to test individual parts of the
model.
Step8: Protect the Model
Once you have completed a model, and especially if you are going to give it to others to use,
you should consider protecting it against accidental or unauthorized changes. In addition, you
may also want to hide parts of the model so that others cannot see certain formulas, data, and
so on. Excel provides several flexible tools that you can use to hide and protect parts or all of
your model. A good strategy is to cluster and color code all the inputs cells of a model and
protect and hide everything else in the workbook. There is less need to protect VBA modules
because most users do not even know how to open them. Nonetheless, if you think it is
necessary, you can protect parts of your VBA models as well.
Step 9: Document the Model
Documenting a model means putting in writing, diagrams, flowcharts, and so on, the
information that someone else (or you yourself in the future) will need to figure out what it
does, how it is structured, and what assumptions are built into it. One can then efficiently and
effectively make changes to (update) the model if necessary. For large systems (for example,
the reservation systems for airlines), the amount of necessary documentation can be
enormous; it is often put on CDs for Easy access and use. Professional system development
organizations have elaborate standards for documentation, because different pieces of large
systems are developed by different peoplemany of whom may not be around for very long.
Also, it is almost certain that the systems will have to be constantly updated. Over time,
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anyone who creates models develops his own system of documentation. As long as you keep
in mind the objectives I mentioned before, you have a lot of leeway to come up with your
own system as well. Both Excel and VBA offer a number of features that let you easily do a
lot of the documentation as you work on your model. You should take full advantage of them
and do as much of your documentation as possible while creating the model.
This is important for two reasons. First, if you write your documentation when things are
fresh in your mind, it will save you time later and you will be less likely to forget to
document important things. Second, everyone hates (or learns to hate) documentation. It is no
fun at all, especially if you try to do it all at once at the end of the project. If you do not work
on the documentation until the end, chances are you will never do it. Then, if you have to use
the model again a few months later or have to update it, you will end up spending hours or
even days trying to figure out what you did. Do your documentation as you go along and
finish it immediately after your model is done. You have to take somewhat different
approaches to when you document Excel and VBA models. I will discuss how in the
appropriate later chapters.
Step10: Update the Model as Necessary
This is not a part of the initial model development, but almost all models require updating at
some point, either because some things have changed or because you want to adapt it to do
something else. This is where the documentation becomes useful. Depending on how much
updating is involved, you may want to go through all of the above steps again. You should
also thoroughly update the documentation and include in it the information on who updated
it, when and why, and what changes were made.
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