digjam project of menegment.

SUMMER TRAINNING REPORT ON ORGANIZATIONAL STUDY AT DIGJAM LTD & RESEARCH WORK ON COMPARISON OF RATIO ANALYSIS OF DIGJAM LTD V/S RAYMOND LTD SUBMITTED BY NIRAV MEHTA MBA Sem-III Guided by PROF. ASHISH NATHWANI ACADEMIC YEAR 2009-2011 SUBMITTED TO JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT JAMNAGAR AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY AHMEDABAD 1 JVIMS - JAMNAGAR

INDIAN TEXTILE INDUSTRY INTRODUCTION The Indian textile industry has a significant presence in the econo my as well as in the international textile economy. Its contribution to the Indi an economy is manifested in terms of its contribution to the industrial producti on, employment generation and foreign exchange earnings. It contributes 20 perce nt of industrial production, 9 percent of excise collections, 18 percent of empl oyment in the industrial sector, nearly 20 percent to the countries total export earning and 4 percent to the Gross Domestic Product. In human history, past and present can never ignore the importance of textile in a civilization decisively affecting its destinies, effectively changing its soc ial scenario. A brief but thoroughly researched feature on Indian textile cultur e. HISTORY OF TEXTILE INDUSTRY: India has been well known for her textile goods since very ancient times. The tr aditional textile industry of India was virtually decayed during the colonial re gime. However, the modern textile industry took birth in India in the early nine teenth century when the first textile mill in the country was established at for t gloster near Calcutta in 1818. The cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then engaged in overseas and inte rnal trade. Indeed, the vast majority of the early mills were the handiwork of P arsi merchants engaged in yarn and cloth trade at home and Chinese and African m arkets. The first cotton mill in Ahmedabad, which was eventually to emerge as a rival centre to Bombay, was established in 1861. The spread of the textile indus try to Ahmedabad was largely due to the Gujarati trading class. The cotton textile industry made rapid progress in the second half of the ninete enth 2 JVIMS - JAMNAGAR

century and by the end of the century there were 178 cotton textile mills; but d uring the year 1900 the cotton textile industry was in bad state due to the grea t famine and a number of mills of Bombay and Ahmedabad were to be closed down fo r long periods. However, during the period 1922 to 1937 the industry was in dold rums and during this period a number of the Bombay mills changed hands. The seco nd World War, during which textile import from Japan completely stopped, however , brought about an unprecedented growth of this industry. The number of mills in creased from 178 with 4.05 lakh looms in 1901 to 249 mills with 13.35 lakh looms in 1921 and further to 396 mills with over 20 lakh looms in 1941. By 1945 there were 417 mills employing 5.10 lakh workers. The cotton textile industry is rightly described as a Swadeshi industry because it was developed with indigenous entrepreneurship and capital and in the pre-ind ependence era the Swadeshi movement stimulated demand for Indian textile in the country. The partition of the country at the time of independence affected the cotton tex tile industry also. The Indian union got 409 out of the 423 textiles mills of th e undivided India. 14 mills and 22 per cent of the land under cotton cultivation went to Pakistan. Some mills were closed down for some time. For a number of ye ars since independence, Indian mills had to import cotton from Pakistan and othe r countries. After independence, the cotton textile industry made rapid strides under the Pla ns. Between 1951 and 1982 the total number of spindles doubled from 11 million t o 22 million. It increased further to well over 26 million by 1989-90. 3 JVIMS - JAMNAGAR

BRIEF HISTORY Formally, this mill was established in the area of Shrinagar-Kashm ir. The name of mill was ³Shri Karansingh Woolen Mills´ which was promoted by Mr.A.K .Watter. In 1948, when Pakistan attacked on Jammu-Kashmir, Mr.A.K.Watter came to wards this area with the view to set a mill somewhere in Gujarat in the coasted areas. During those days, Jam Sahib used to rule over Jamnagar. When he learnt a bout Mr.A.K.Watter, he permitted Mr.A.K.Watter to set up mill within his provinc es. Besides he also offered attractive concessions. He gave: 1) 2) 3) 4) 40 acre s of land free of charge 20 lacks loan towards equity Free import of raw materia l Exception from state taxes This A.K. Wattel starts mill and give the name ³Shri Digvijay Wollen Mill´ to give h onor to Jamsaheb which is today famous with the name of DIGJAM LIMITED. In the y ear of 1948 the foundation store was laid by Shri H.H. Krishna Kumar Singh, the king of Bhavnagar. In 1949 civil construction of mills was commenced and in 1952 the trial production was started. Around 1954 BIRLA took over the reigns of mills in their hands and since Digjam is a Birla managed company a unit of Birla VXL Ltd as S.K. Birla Group Company. The name of the company now stands change to DIGJAM LIMITED in which ³DIG´ for Digvi jay Wollen Mills and ³JAM´ for Jamnagar unit. 4 JVIMS - JAMNAGAR

Company Profile DIGJAM Limited, an S K Birla Group Company, began its activites nearly 60 years back in Jamnagar, Gujarat. Since then, it has been catering to t he ever-growing demands of the Clothing and Fashion industry, in the domestic as well as the international markets. Digjam Limited is a leading textile company in India, manufacturer of fabrics for suiting and casual wear. In recent years, the company restructured its business portfolios to focus as a textile company m anufacturing and marketing fabrics and readyto-wear clothing under its own brand s. A complete vertically integrated plant, Digjam has ultra modern production fa cilities to convert wool tops to finished fabrics through different processes of Dyeing, Spinning, Weaving and Finishing using state-of-the-art machinery import ed from France, Germany, Switzerland and Italy. Stringent quality checks at ever y stage and process enabled Digjam to bag the prestigious ISO 9001 certification . Keeping pace with the complex requirements of the industry, Digjam expanded it s production capacity to over 5 million meters, of which 35%-40% (approximately) is exported to major countries across the globe. Andersen Consulting, a leading management and corporate advisors agency, underto ok a major review of the operational parameters of our textile company. Followin g a thorough review of the operating and marketing practices, recommendations were made which now form the basis of our strategic marketing an d manufacturing thrusts spanning the coming 3-4 years. The company has also init iated steps to strengthen its organization and induct the youth and skills neces sary to attain results from this strategic shift-cum-consolidation exercise. 5 JVIMS - JAMNAGAR

While the company lays uniform stress on all fundamental aspects such as quality , designs and cost-friendliness for products under all its brands, DIGJAM is und oubtedly its premium fabrics brand. DIGJAM has a high-end fabric brand presence in the domestic market, reputed for its finish and quality. The company manufact ures over 3000 design-shade combinations each year in Light Wool, Polyester Wool and Woolen fabrics for the DIGJAM brand alone. Constant research on designs ens ures creation of innovative future trends. In the new millennium, DIGJAM introdu ced superpremium fabrics designed by European experts (with whom we work regular ly and extensively) comprising fine wool yarn of Super 150s and Super 120s and o ccasionally blended with exotic fibres like Silk or Cashmere. Dressing in India has come of age - rising affluence levels, increased media exposure of internati onal fashions and a growing tendency towards self-indulgence have all contribute d to it. The all round impact is visible with the influx of international, and d omestic products and brands in both, formal and casual wear. Indian customer has choice today, but one where we are determined to make and sustain our mark. The DIGJAM brand will increasingly reflect, both tradition and modernity in its pos itioning, product range and marketing approach. We intend to position the brand as the clear favorite for a wider, but demanding clientele with special emphasis on becoming the preferred premium choice for the youthful consumer. This segmen t offers a high potential in terms of market size and also presents a tougher ch allenge to us in terms of providing satisfaction. DIGJAM's superior product qual ity is at par with global standards and many of the world's best readymade brand s use fabrics produced by us. A major proportion of our output is exported to US A, Europe, Middle East and Far East. This bodes well for our future as our preem inent position as one of the largest manufacturer of textiles from India. DIGJAM products and their ranges are available at its exclusive showrooms and over 300 0 other retail outlets across the country 6 JVIMS - JAMNAGAR

ACHIEVEMENTS y y y Digjam has achieved also the certificate of Confidence in Tex tiles. They have even achieved the Certificate of Recognition. By using the best technology and machineries available, DIGJAM has achieved the ISO 9001 International Quality Certificates. y The present production capacity is of 20000 meters of woolen per day, which is o ne of the highest in the textile industry. y Bureau of Indian Standards License for the Quality Management Systems Certificat ion y For four consecutive years DIGJAM has received the highest Exporter Award in the woolen worsted category from the Export Promotion Council of India. y The first and only woolen worsted mill in India to be awarded the status of ³ACCRE DIATED MILL´ from internationally renewed DuPont. y They have got Wool mark wool blend licenses from international wool secretariat. 7 JVIMS - JAMNAGAR

ORGANISATION STRUCTURE: 1. President 2. Vice President   Sales   export 3. General Manager   Personnel   HRD   Sul zer & Weaving   Spinning   Finishing   Financing 4. Deputy General Manager   Raw Materia l & Store   Mechanical Engineer   Sulzer   Management Information System   Electric Data Processing 5. Senior Manager 6. Manager 7. Assistant Manager 8. Senior Officer 9. Officer 10. Supervisor 11. Junior Supervisor 12. Trainee 8 JVIMS - JAMNAGAR

PRODUCTION DEPARTMENT 9 JVIMS - JAMNAGAR

Plant Location: Plant location may be understood as the function of determining where the plant should be located for maximum operation, economy and effectivene ss. The selection of place for locating a plant is one of the most important fun ctions which are handled by the entrepreneur while launching a new enterprise. DIGJAM is located at the coastal region of Jamnagar at Gujarat, because this lan d is given by H.H.JamSaheb. This place is helpful to import raw material like wo ol and export finished products and also helpful in transportation facilities be cause of remote town. The total weaving capacity of the plant is 14000 meter per day. The plant spread over 47 acres, 515 employees and executives and dedicated force of 1300 employees. Plant Layout: Plant layout refers to the arrangement of the production facilitie s in a scientific way such that the production continues softly and without any interruption. Plant Layout is the concept in which the arrangement of different sections of the production dept is done. The layout is designed in such a way th at the not required movement of machines is eliminated. The layout can be classified into four types: 1.) Product Layout 2.) Process Lay out 3.) Fixed Position Layout 4.) Combined / Mixed Layout 10 JVIMS - JAMNAGAR

The company operates in the woolen worsted textile segment and has composite mil l with having a certificate of ISO 9001. DIGJAM covers more than 19000 square me ters of plant area with nearly 220 machines for manufacturing high quality suiti ng at Jamnagar. The type of layout used at DIGJAM is Process Layout. The machine ry remains at the fixed place and material flows to one machine to another. The sequence of the machines is not changed frequently. Raw Material: At DIGJAM unit major raw material manufactured of fabric is as follows: POLYESTE R: It is man made fiber. The raw material ³polyester tow´ in a firm is bought from R eliance Industries Limited. There are two types of Polyester Available: 1.) Tril obal 2.) Circular The Trilobal polyester is more lustrous as compared to other one. The polyester in DIGJAM is received from IOCL Pondicherry and RIL Patalganga. It comes in bale s of approximately 350 Kg. Some qualities of polyester are imported from Germany and packing of 200 Kg is bought. 11 JVIMS - JAMNAGAR

BASIC RAW MATERIAL: It is a natural fiber. The raw material, greasy wool is imported from Australia and New Zealand and is extracted from a breed of sheep called ³Marino´ by shearing m achines in these countries. This wool is tested and certified for its quality by IWTO (International Wool Testing Organization). The wool is received in the for m of bales weighting 125-150 Kg of each. Inventory Management:Inventory control is also an essential aspect in production management. There are few sectors which DIGJAM considers: 1.) Average periodica l requirement of a production Dept. 2.) To maintain inventory by involving minim um funds. 3.) To keep stock according to the space availability. 4.) To maintain stock after considering purchase lead time 5.) At the time of maintaining stock s we should also consider the self-life of material. In DIGJAM the raw material used are woolen and polyester, for the control of inv entory they use ABC method i.e. Always Better Control. 12 JVIMS - JAMNAGAR

Production Planning:It is the nerve center, co-coordinating activities from the time of procurement of order to delivery up to warehouse. It also ensures timely delivery of all fab rics in the stipulated frame and in assortment. In the planning dept. depending upon the manufacturing order the process takes place. Depending on the order giv en by the party, planning dept. plans the first to the last stage. [a] Recombing [b] Dyeing [c] Spinning [d] Warping [e] Weaving [f] Mending [g] Finishing 6 8 1 5 2 10 7 12 days days days days days days days Total 60 days Planning dept also follow up the material process. In the planning dept. they co nsider the allowance percentage depending upon the quality. For e.g.   In the dome stic market the delivery time: 70 to 75 days   In the export market the delivery t ime : 60 to 65 days 13 JVIMS - JAMNAGAR

PRODUCTION PROCESS Scouring Carding Gilling Combing Dyeing Recombing Spinning Weaving Finishing 14 JVIMS - JAMNAGAR

Flow Chart of Grey Combing, Dyeing & Recombing Greasy Wool Sorting / Trapping Polyester Tow Scouring Convertor Carding 3 Gilling Gilling - 1 Polyester Top Gilling - 2 Gilling - 3 Combing Gilling (Post Combing) Grey Wool Tops Hydro for Polyester Top Dyeing Blend Preparation Back Wash for wool Recombing Recombed Tops 15 JVIMS - JAMNAGAR

GREY COMBING: SCOURING: The wool contains dirt, mud, grease which has to be remo ved. Scouring removes the dirt, grease, perspiration & salt from the wool by was hing the wool fiber in non ± ionic detergent, with Soda ±ash & hot water. (600 - 650 C) Process flow of Scouring Re- Opening Washing Squeezing Drying The Detergent used in the washing process is SAPCO ± 1735 or RVKMA - 950. G rey wool contains following: Grease Dirt & Dust ± ± 15% - 20% 8 % - 10% 1% Vegetable Matters ± 16 JVIMS - JAMNAGAR

To remove the above impurities from the wool scouring is done. It¶s done in scouri ng machine, which consists of 3 units : 1. Hooper or Feeding Zone : In Hooper, w ool is fed which is then moved to washing bowls by means of horizontal & vertica l conveyor lattice. 2. Washing Bowls : There are 5 washing bowls in scouring machine. Out of these f ive bowls 3 bowls are of detergent (non-ionic) or soap and soda solution, remain ing 2 bowls are of plain water. Here, Three times washing with the help of Non-i onic Detergent and Two times with plain water. 3. Drying Units : A drying chamber is provided at the end of machine which consists of steam heated coils & fan. It dr ies up the wool. In dryer chamber hot air is passed form downward direction. CARDING: Carding breaks open the entangled scoured wool and remove the ³BURR´ and ³SHO DDY´, leaving the wool as a continuous web called ³SLIVERS´ Purpose of carding: To remove the vegetable matter To remover Burr and Shoddy wa st 17 JVIMS - JAMNAGAR

Carding Machine: Model Thibeau TTC RTC Thibeau No. Of Machine 2 1 The Main objective of this process is Parallelization of fibers and removal of d ust. The By product of carding are burrs and shoody. Burrs are the bunch of fibe rs in ball shape with vegetable matter found in wool. Shoody has short fibers wi th mud & dust.. GILLING: Gilling is the process done before combing. Gilling uses a comb to blen d different quality of card silver together and aligns fiver parallel to one ano ther. In gilling multiple slivers from carding are fed into gilling machine & th en drafted to form a more uniform, properly mixed silver with parallel fibers. T he multiple fibers are mixed to reduce variation in quality. Gilling use a coars e comb to blend different qualities of card slivers together & align the fibre p anel to one another The Sliver from carding is given 3 gilling processes before sending it to for combing to convert into tops because after carding the wool fi bre takes a shape of hook. The carded sliver follows following 3 gilling operati ons as under : 1st Gilling: Here 10 carded slivers are fed to the one machine dr afted together to form one sliver. 18 JVIMS - JAMNAGAR

2nd Gilling: Here 5 slivers from the first gilling machine is fed to the machine to produce uniform sliver. 3rd Gilling: This is also called Bi ± Coiler. Here 2 s livers are produced from 4 slivers & stored in one can. Machine Gill ± 1 Gill ± 2 Gi ll ± 3 Model GC 13 GC 13 GN 5 No. Of Machine 1 1 2 COMBING: Combing continuous the fibre alignments using a fine metallic pinnings circular half laps & top comb. It removes the remaining vegetable matter & short fibres during carding. The product of combing is ³Top´ and by product is called ³Noil´ Combing is the main operation in the worsted combing further removes the short f ibres & remaining vegetable matters and broken fibres during carding, It also re moves the short stable fibres from the sliver which are formed by doubling & dra fting during previous session. It males the sliver more uniform & maintains the span length of fibres. NSC machine from France is used from combing. Model PB 28 PB 30 PB 31 No. Of Machine 5 4 2 POST GILLING: 19 JVIMS - JAMNAGAR

This is same as gilling process. The additional process is that the tops are for med here of desired weight from combed sliver. 10 Slivers are fed into this mach ine drafted together to produce one sliver & to form a top. QUALITY CHECKS:After the final top is made it¶s sent to lab for following testing: y y y y Mean fiber length is maintained Coefficient of variation Checks for oil & moisture content in the sample. It must be less than 1% & 14% respectively. No. of Neps. DYEING: Dyeing is the process of uniformly colouring or applying the dye at a pa rticular temperature & pressure. Dyeing colours the wool & can be carried out sc oured wool tops, yarn, fabric or garments. There are 2 types of dyes used for dy eing wool & polyester. Material Polyester Wool Type of Dye Used Dispersed Dyes M etal Compexes Sulpho dyes 20 JVIMS - JAMNAGAR

Here 3 Types of Dyeing are done they are as follows: 1. Top Dyeing 2. Yarn Dyein g 3. Fabric/Piece Dyeing List of Machineries: Names of Machines Ilma Dalal-1 Dalal-2 Staffi-1 Staffi-2 Staffi-3 Staffi-4 Staffi-5 Dalal-3 Dalal4 Kg in each machine Tops formed (in each machine) 200 200 200 100 100 20 20 15 50 50 4 4 4 4 4 3 3 2 3 3 21 JVIMS - JAMNAGAR

For Fabric dyeing, generally polyester/wool blend fabrics are dyed in JET BECK m achine. Model Dalal Jet Back HT1 Dalal Jet Back HT2 MCS SF82 Capacity (Kgs) 100 200 200 No. of machines 1 3 1 PROCESS FLOW OF TOP DYEING Tops from Grey Combing Packing in Top Dyeing Dyeing Hydro Extraction Back Washing or R.F.Dryer Defelter Recombing 22 JVIMS - JAMNAGAR

PROCESS OF YARN DYEING Yarn R F Dryer Rewinding PROCESS FLOW OF DYEING ACCORDING TO DIFFERENT SHADES Dyeing Hydro Extractor WOOL Light Shade - R.F.Dryer Dark Shade Back Washing Dryer POLYESTER For Both (Light & Dark Shade) Radio Frequency Dryer is used. Defelting 23 JVIMS - JAMNAGAR

  Some important points for Dyeing :   Wool is dyed at 100°C.   Polyester is dyed at 130°C .   Yarn is dyed at 120°C.   Light and Medium Shades are dyed for 30 minutes.   Dark sha des are dyed for 45 minutes. RECOMBING: During dyeing process, certain degree of disturbances takes place in the fiber. Hence parallelization is required. In Recombing we achieve this as well as remov e short fibers to achieve better quality of yarn. In Recombing department drying of wool, Defelting, Gilling and Combing is done. Objective of Recombing: y y y y To get blended wool & polyester. Parallelization of fibres. To remove the impu rities. To get the requires shades. Blend Produces: Polyester (%) 55 70 80 40 0 Wool % 45 30 20 60 100 24 JVIMS - JAMNAGAR

Process of Recombing: 1. Defelter Selection 2. Gilling 3. Recombing 4. Auto Leve ler 5. Auto Looper List of Machineries: Name Of Machine / Name Of Producer Defelter (NSC France) Gill Box (NSC France) C omber (NSC France) No Of Machine Model 3 GN 6 7 GN 6 - 3 Machine GN 5 - 4 Machine 12 PB 28 - 6 Machine PB 29 - 5 Machine PB 31 - 1 Machine Auto Leveler (NSC France) Auto Looper (NSC France) 2 2 25 JVIMS - JAMNAGAR

SPINNING: Recombed Top Gilling 1 Gilling 2 Gilling 3 Gilling 4 Flyer Frame / Rubbing Frame Ring Frame (Spinning) Single Yarn Steaming Auto Corner (Single Yarn Winding) Assembly & Winding T.F.O. Twisting Two Fold Yarn Steaming Two Fold Yarn Winding 26 JVIMS - JAMNAGAR

To achieve the better quality and improve the yarn, Spinning is required. Spinni ng converts ³TOP´ into ³Yarn´. It is the art of using fibers of variable length to twist then together in order to produce continuous yarn with characteristics adapted to their subsequent use weaving. Spinning Process takes the worsted roving and t wists it into thread or yarn. Twisting wool strands increases the strength of ya rn & creates continuous unbroken yarn necessary for weaving. Spinning further re duces the thickness of roving. Then apply twist to bind the fiber together to ma ke continuous yarn. The purpose of Spinning is the conversion of recombed tops i nto the yarn of desired quality. The Spinning department has seven sections:

  NSC preparatory.   Frame sections.   Ring frame Section   Auto corner   Twisting-TFO   Steaming   Final winding and delivery. 27 JVIMS - JAMNAGAR

NSC Prepatory: In NSC Prepatory, the set of Gill Box ³GNs´ is included. There are total eight machi nes in spinning department. The main purpose of Gilling is as follows: y y y To reduce the wrapping To parallelize the fiber To increase the Sliver uniformity. Frame Section: The Flyer Frame is a machine used for Drafting and Twisting. Ther e are three machines of Flyer Frame in spinning dept. each with the capacity of 48 spindles and having speed of 60 meters per minute. Flyer Frame is manufacture d by NSC-France makers from 1980. The basic principle of Rubbing Frame is same a s of Flyer Frame. A false twist is given to roving bobbin in Rubbing Frame. This machine is used for rubbing and twisting. The Objective of the Flyer Frame is a s Follows: y y y y To reduce the wrapping i.e. weight unit /length of the Sliver. To make suitable package for Ring frame. To make fibers more parallel as far as possible which is done by the high drafting machine. Flyer frame is the conversion from sliver to import a slight twist in order to increase its strength. 28 JVIMS - JAMNAGAR

List of Machine: Machines Flying Frame Flying Frame Flying Frame Rubbing Frame Models BM12 BM12 BM14 FM7N Spindles 32 spindles 32 spindles 48 spindles 32 spindles Meter/Minute 60 meter/minute 60 meter/minute 60 meter/minute 160 meter/minute Ring frame Section: Ring frame machines are used for Drafting and Twisting. There are 37 machines of Ring Frame in spinning dept. these machines are from India and Nether land. Som e of the important points about this machine: y y y y This is required to make a yarn of required count and of required twist. Spindle capacity of ring frame is 400. Total spindle capacity of shed=37*400=14,800 Spe ed of the machine-7000to 9000 per minute. Auto Corner: This machine is used to remove the yarn faults. There are 5 machines of Auto cor ner in spinning dept. These machines are imported from Germany. It is used to ma ke a suitable or bigger package for further process which is known as Cone. Cone is the bundling of the yarn. The total cone capacity is 300. 29 JVIMS - JAMNAGAR

Assembly: The job of assembly machine is to mix any two color of yarn. In this t he two yarn mixed can be seen separately. There are three machines in the spinni ng dept. of assembly. These machines are from India. Twisting TFO: It is a Two for One machine. In this machine yarn is twisted and i t is seen as one. There are 19 machines in all in spinning dept. these machines are from India. Steaming: Steaming is done to fix the yarn from doubling. It is done in order to make yarn strong. The object of the Steaming is to recover the winding from hig h twist yarn. In this process first the material which comes from single and dou ble frame are put in one trolley and then this trolley is put into the trolley m achine and accordingly the pressure and vacuum is controlled. Final Winding Machine and Delivery: This is the final process where the yarns are winded in order to remove knot, if at all present. 30 JVIMS - JAMNAGAR

WEAVING : Weaving is done by the interlacement of warp & weft. Two sets of yarn move in tw o motions, lengthwise & widthwise. Longtudinal moving yarn is warp & widthwise m oving yarn is weft. The process of interlacement is called weaving. Weaving inte rlaces yarn at right angles to one another forming a fabric. Warp yarn runs the length of fabric & weft yarn runs across the fabric. Weaving take place on a loo m. Weaving consist of two things that is Warping and Wefting. In wrapping process, a complete warp is made for a loom from the individual cone s. Warping process is divided in two namely: Warping: - In this process the bunch of cones are wound on the drum and yarn sec tion is made made according to the requirement. Beaming: - After After warping, all section s are fixed up on the wrapper beam. Width of the beam is maintained by flange of the beam. In wefting process, the horizontal layer is formed with the help of yarn in fabr ic. 31 JVIMS - JAMNAGAR

FINISHING: FABRIC WOOL BLEND Fixation Thermofixation Scouring Singeing Hydro Extraction Hydro Extraction Drying Drying Decatising Sheraring/Cropping Shrinkage Decatizing Pressing Pressing Kier Decatizing Kier Decatizing Finishing describe a number of processes designed to impart the required drape h andle and aesthetic properties to a wool fabric .Wet finishing involves liquors and chemical being applied to the fabric while dry finishing involves mechanical treatments. 32 JVIMS - JAMNAGAR

FOLDING: Process of Folding. 1] Final inspection 2] Stamping 3] Measuring & Cutt ing 4] Folding 5] Weight and piece according in production sheet 6] Wrapping pkg . After finishing and checking in perching m/c., the fabric comes in to folding de pt. In this dept., at first the fabric is finally inspected. Here the fabrics wh ich are defective are given identification by placing a red and white flag (thre ad). If the fabric is having defect but can be mended is given the identificatio n of white flag. Similarly, if the fabric is having defect but it can¶t be mended than it is given the identification of red flag. The fabrics having the red flag cannot be exported so these fabrics are sold at less cost. DESIGNING: What is Design? They define deign as purposeful, systematic and creat ive activity. The purpose is purposeful designers give form to products, interio r and visual communication satisfies the fundamental psychological and aesthetic needs of users. 33 JVIMS - JAMNAGAR

Stage through the design: Survey of market Feed back of Dealers Season wise Decision on the shades Sampling Sample cutting Handloom card preparation Send to market and dealers for approval Sort book entry Yarn order by PPC. 34 JVIMS - JAMNAGAR

Design is creative, as designers must posses the expertise to create the compell ing forms for product spaces and information systems and to advance application of new techniques in our everyday life. Sources of Design:   International Magazin es which contains fabric cuttings.   Designers Intuition and Past Experience.   Mark et Survey.   Customer Requirement (they also design for Institutions). QUALITY CON TROL: The Quality Policy of DIGJAM is: Our Company is Committed: To achieve the highes t quality standards of its fabrics and services for maximum customer satisfactio n by following systematic quality management system. To continually improve the effectiveness of the Management System. Functions of Quality Control Department : The main functions of the quality cont rol department are: 1] To find out micron value of wool. 2] To find out blend co mposition. 3] To find out count value of yarn. 4] To find out the fabric propert ies like steam shrinkage, Relaxation Shrinkage, stretch & growth percentage, Fas tness, etc. In quality control some of the checking is done. The types of Checki ng are as follows: 35 JVIMS - JAMNAGAR

Tow: (1) Denier (2) C.V % (3) Oil % (4) Shade Final Top: (1) (2) (3) (4) (5) C.V % Short fiber % Oil % M.F.L Neps Yarn Checking: (1) (2) (3) (4) Count & Its C.V % Neps Twist & its C.V % Shade ch ecking Dyeing: (1) Fastness (a) (b) (c) (d) Washing fastness Dry cleaning fastness Ligh t fastness Rubbing fastness 36 JVIMS - JAMNAGAR

Fabric Checking: (1) (2) (3) (4) (5) (6) Weight Width (cms) Blends Composition Pilling test Crease Recovery Angel Shrinka ge (a) (b) (c) Relaxation shrinkage Steam shrinkage M/C Wash shrinkage (7) (8) (9) (10) (11) (12) Drape Coefficient Martindale abrasion test Fabric Strength Fabric tear strength Fabric stretch & Growth Color fastness 37 JVIMS - JAMNAGAR

HUMAN RESOURCE DEPARTMENT 38 JVIMS - JAMNAGAR

HR Policy of the Company HRD POLICY STATEMENT Coming together is beginning Keeping together is progress Working together is su ccess Some of the Policies of the company are as follows:   Employees satisfaction creat es an environment where people enjoy there work and realize their full potential ; find opportunity to grow, focus their attention and satisfying the customer an d the organization.   Encourage teamwork along with individual excellence; develop a sense of belonging amongst employee by carrying attitude.   Consider quality co nsciousness as the key requirement for the products and services.   Consider emplo yees as a valuable asset.   Promote commitment and creativity for better performan ce.   Build enough flexibility to encourage and accommodate innovative thoughts. 39 JVIMS - JAMNAGAR

Human Resource Planning: The human resource planning is a key to the success of the organization, if it i s done carefully cautionary and based on real and factual data available. It is a process of determing how an organization should move from its current manpower position to its desired manpower position. HRP is the process of acquiring and utilizing the human resource in organization . In simple terms, Human resource planning is the term used to describe how comp anies ensure that their staffs are the right staff to do the jobs. With the help of HRP management strives to have the right number, the right kind of people at the right place at the right time to do things which results in both the organi zation and individual receiving the maximum long term benefits. It is a continuo us process. In DIGJAM human resource planning is used in following situations: 1.) HRP is us ed in urgent production, routine production as well as in special situation. 2.) HRP is motivation for better productivity, better individual performance and ou tput bonus as per requirement. 40 JVIMS - JAMNAGAR

Recruitment & Selection: Recruitment: Recruitment is the process of identifying that the organization nee ds to employ someone up to the point at which application forms for the post hav e arrived at the organization. Recruitment has been regarded as the most importa nt function of the personnel department because unless the right type of people are hired, even the best plans and controls of organization would not do much go od. The recruiting procedure of DIGJAM consists of three segments: Segments Recruitment of Workers Recruitment of Executives & Managerial Staff Recruitment of Technical Personnel 41 JVIMS - JAMNAGAR

Sources of Recruitment: For any organization there are various sources available. Mainly two sources are available for the recruitment for DIGJAM: 1.) Internal Sources. 2.) External So urces. Internal Source: In DIGJAM the internal recruitment is done by the reference of internal members of the organization. With the help of internal advertisement, w ithin the company, company gets enough reference for the recruitment. External Source: In DIGJAM the external sources for the recruitment are as follo ws: 1.) New entrance for the labor force i.e. young, mostly inexperience, potent ial employees, college students. 2.) The unemployed with wide range of skills an d abilities. 3.) Experienced persons such as mechanics, accountants and welders. Selection: Selection consists of the processes involved in choosing from applica nts a suitable candidate to fill a post. In DIGJAM recruitment & selection proce dure for blue collar force is as per laws. For the recruitment of the labor in t he company it is essential that he should acquire the certificate of ITI examina tion. Workers are selected by the concern supervisor and the assistant personnel management. Physical fitness for the workers are considered at the time of sele ction. 42 JVIMS - JAMNAGAR

Recruitment and Selection procedure for white collar force refers to the selecti on of officers and managers. They are selected by departmental head.. Training & Development: In DIGJAM the HRD identifies the training of all employees with the department h eads. Every year in the month of March, after having training date identified th e HRD with the approval of the top management prepares a training calendar and c onducts the Training Programme.

  In case of Workman, training is given on safety, housekeeping, quality improveme nt, skill improvement, multiskilling, awareness, discipline, behavior and conduc t rules are given.   In case of Staff Category, the training areas are skill devel opment, attitude, motivation, awareness, roles and responsibilities etc. are giv en.   In case of Management Training, all the training areas are of specific natur e mainly the management development areas are been conducted.   In company Employees are developed through demonstration, seminar and discussion process also. 43 JVIMS - JAMNAGAR

There are two type of training is given to the employee in DIGJAM. They are as f ollows: Training at DIGJAM On the Job Training On the Job Training: DIGJAM provides on the job training to the workers, who are on the machinery. The head of the dept. provides the specific training to the w orkers and also solves problems which are faced by the workers. This method is e conomically, as the supervisor provides the training. The regular work is not af fected as the trainee learns within the factory premises. However this method ma kes the clear, the practical and theoretical aspects of the job. Off the Job Training Off the Job Training: DIGJAM provides off the job training to the workers and th e employees. In that they provide classroom training in which they invite some e ngineers to train the workers and they arrange different seminars. Trained emplo yees handle machines and equipments much carefully. The result is that, machines and equipments are carefully utilized. Not only maintenance cost is reduced but also working life of machines and equipments are also increased. Because of thi s profit is also increased. 44 JVIMS - JAMNAGAR

Industrial Relationship: ³The relationship between employees and employer or trade union is called Industri al Relations´. Industrial Relations deal with the nature of working relationship that subsists between the two particular partners in production management and workers. One th ing is clear that if the relationship is good and management and workers work in good spirit of goodwill and understanding, production will be maximized. If rel ationship lacks goodwill and understanding workers will not be at their best. Pr oduction will suffer, and losses will be inevitable. In DIGJAM there is a better co-operation between all of them and management also . The company has not faced any strike problem in past few years. They always tr y to motivate their union members and try to increase the efficiency of the memb ers in the workers. There is a family type of environment of the unit and if any problem occurs then union leader or labor officers solve the problem jointly. All the trade union h elps in the development of the unit. 45 JVIMS - JAMNAGAR

Induction: Induction mainly implies familiar introduction of new employees with the work, follow workers, work culture, superiors and organization. DIGJAM has systematic induction programme, which helps to make employees feel at home and reduces the initial nervousness on his part. The main objectives of an induction program of DIGJAM are: 1.) To develop a feeling of belongings and loy alty to the organization. 2.) To give all the necessary information to employee about location of workrooms, canteen and other facilities, leave rules, rest per iods, etc. 3.) To build up the new employee¶s confidence in him in lathe new organ ization so that he may become an efficient employer. Performance Appraisal:³Performance is not a matter of chance. It is not a thing to be waited for. It is a thing to be achieved««´ Performance Appraisal is the step where the management fields out how effective it has been at hiring and placing employees he performs. In DIGJAM the Performan ce Appraisal is a unit for managerial level which is done on yearly basis. This is done normally in the month of February & March. The Performance Appraisal com mittee is consisting of department head and the Senior Management head personnel . The annual & increments are decided on the basis of individual performance dur ing the year. The appraisal is being carried out on following points: 46 JVIMS - JAMNAGAR

1.) Achievements. 2.) Behaviors. 3.) Attendance 4.) Skills 5.) Knowledge 6.) Eff iciency 7.) Co-operation with others. Social Responsibility:The DIGJAM has not only concentrated on building an indust rial empire but also they are one of the largest philanthropic groups in India. Over the years, the BIRLA Group has been involved in recreation and religious ce nters, museums, planetarium, art galleries and rural development programs. They are also a great patron of Indian art and culture. DIGJAM has contributed extens ively to education and research. The prestigious Birla Institute of Technology at Pilani is recognized as the premier Institute. From this Institute thousands of students graduate and comes out eac h year. Some of the other responsibilities that DIGJAM looks after are as follow s: 1.) Build an Auditorium at Jamnagar. 2.) Given a donation in Laboratory of L. G.Haria School, Jamnagar. 3.) 1500 families¶ requirement is fulfilled by the Compa ny. 4.) Pay health tax and wealth tax. 5.) Co-operation with the Society. 47 JVIMS - JAMNAGAR

Promotion & Transfer: ³A promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.´ In DIGJAM the management reviews the performance of every individual on the year ly basis. The promotion is given on the merit basis. There are no fix promotion schemes. In DIGJAM demotion is also followed. These step is also been taken for some workers who does not perform the job well as required. ³A lateral shift causing movement of individuals from one position to another usua lly without involving any marked change in duties, responsibilities, skills need ed or compensation. ´ In DIGJAM workmen and staff employees are normally being transferred from one de partment to another. This is also done in case of Sales Promotion i.e. from one location to another 48 JVIMS - JAMNAGAR

Time Keeping System: Time Keeping System is very important aspect. Through Time Keeping System company can run smoothly and successfully with boosting profits e very year. DIGJAM has different Time Keeping System. The main functions of this department are as under: 1.) Attendance 2.) Wages & Salary 3.) Leave Records. 4. ) Gratuity 5.) Bonus Payments 6.) PF & Employee Safety Insurance (ESI) Scheme In case of workers they have three shifts. They are provided with the attendance card is issued to them which they have to carry while reporting on the job and submit to the respective dept. Respective heads dept. make the present of all th e workmen and deliver to the time office, for making attendance register. The ti ming for shifts is as follows: 1.) 7:00 a.m. to 3:30 p.m. 2.) 3:30 a.m. to 12:00 p.m. 3.) 12:00 p.m. to 7:00 a.m. With a recess of half an hour. In case of Staff and management category the records is being maintain through c omputerized cards and punching machine system which prepares the payroll automat ically. They come in the general shifts of 8:30 a.m. to 5:30 p.m. with 1 hour re cess. Workmen and Staff and Management are having weekly holiday on Sundays. 49 JVIMS - JAMNAGAR

Leave Rules: Leave Rules are different for workers and for employees in DIGJAM. They have fou r types of workers: 1.) Contract Workers. 2.) Badli Workers.(Substitutes) 3.) Pe rmanent Workers. 4.) Temporary Workers. Leave Rules for Workers: 1.) Privilege Leave Qualified - 240 days / 365 days (1 P.L. on 16 day basis) 2.) Casual Leave-7 days in a year. (for Badli workers 7 da ys per year) 3.) Sick Leave ± for permanent workers 7 days per year. For Badli wor kers 1 day leave on 40 days. Leave Rules for Staff Employees: 1.) Privilege Leave-30 days 2.) Casual Leave-10 days 3.) Sick Leave-10 days In DIGJAM there is one policy regarding leave for workers and employees that is: 1.) Casual Leave can¶t be carried forward 2.) Sick Leave can be carried forward u p to 3 years. 3.) Privilege Leave can be enchased up to 3 years. 50 JVIMS - JAMNAGAR

Wages & Salary: The wage is remuneration paid for the service of labor. In produ ction wages usually refers to the contribution to production, while salary norma lly refers to the clerical administration & professional employees. A person who gets the wages is called ³Blue Collar Work´. On the other hand salary normally refe rs to the monthly rates paid to clerical administration & professional employees or ³White Collar Work´. In DIGJAM time office dept. decides the wages of workers. T here is attendance system and after totaling the attendance of workers they pay the workers on the 10th date of the month. If the worker needs money earlier i.e . advance than it will be given on 25th of the month. The maximum general advanc e will be Rs.450 each. In case of Staff Category the employees gets consolidated salary on monthly calculated basis. The pay scale starts from 7000 gross salary . Trade Union: There are 1336 employees in the DIGJAM that is there are: 1.) Permanent 2.) Badl i 3.) Sub-Staff 4.) Staff = 751 = 260 = 52 = 273 51 JVIMS - JAMNAGAR

For the state of protection of rights they have formed the trade union. Presentl y there are five trade unions. These unions are affiliated with the external tra de unions such as:   Woolen Mill Mazdur Sangh affiliated to BMS   Woolen Mill Kamdar Sangh affiliated to AITUC   Woolen Kamdar Manda Grievance Management: There is hardly any organization which runs smoothly all t ime. In some companies, the employees have complaint against the other employees . While on the other hand it is the employees who have the dispute with the empl oyees. There dispute may be real or imaginary, valid or invalid, genuine or fals e. DIGJAM has its own certified standing orders. The company is having five labo r unions. In case of the unions, representatives of the unions put the grievance to management. The management mainly solves the disputes within the framework o f the organization and as per the provision of industrial dispute act. 1.) They investigate the problem whether it is genuine or not. 2.) After confirmation the y discuss the matter with the workers and listen their arguments. 3.) Then they discuss the problem with supervisors of workers and try to solve the problems. 4 .) It problem is serious then he arranges meeting between workers and supervisor s and prepare an agreement of conclusion. 5.) Sometimes they discuss the problem with personnel dept. also. 52 JVIMS - JAMNAGAR

Benefits & Welfare: Benefits provided by DIGJAM are as follows:   Employees at various levels are prov ided with tea with different intervals of time.   Water and Sanitary facility for all.   Canteen facilities for workers in the campus of the unit. It contains tea, coffee, breakfast etc. at reasonable rates.   Medical facility includes ambulance, doctors for workers and employees for monthly checkup.   Telephone facility is al so provided to employees and above staff.   All employees are connected through Lo cal Area Network (LAN) and internet for Senior Executives.   PF facilities for all the workers and employees.   Vehicle facility for managerial with driver for offi cial purpose today.   Petrol allowance to employees for official workers.   Casual l eave, Sick leave and Privilege Leave for all.   Festival advances and bonus given on the basis of attendance.   Quarters provided to employees.   Park or garden is pr ovided in front of house of employees.   Pension fund and ESI scheme are also prov ided by the company.   Separate training halls with necessary equipments for worke rs, employees and executives also.   Library facilities   Welfare Facilities.   Mobile Facility for staff and Managerial category. 53 JVIMS - JAMNAGAR

MARKETING DEPARTMENT 54 JVIMS - JAMNAGAR

Organization Structure Vice President General Manager Dy. General Manager Senior Manager (4 zone) (East, West, South, North) Assistant Manager Senior Officer Officer Senior Assistant Dy. Assistant Clerk 55 JVIMS - JAMNAGAR

Distribution Channel: DIGJAM Sales /Marketing Team Selling Representative Exclusive Show Rooms MBO¶s (Multi Brand Outlet) Whole Seller / Distributors Dealers/Tag Dealers End Customer 56 JVIMS - JAMNAGAR

Sales Process: The General Manager (Sales) heads the sales function of the organization. Indian market is normally divided into four zones and the zonal sales manager who is d esignated as Senior Sales manager ahs many territories. Each territory is looked after by a area sales manger (ASM). The area Sales Manager is posted in a city in the territory that looks after the sales in his respective territory. Each of four has a Sales Officer. The sales officers are posted at the mill and their b asic function is to co-ordinate between ASM who is on the field and the mill. The Sales Officer is an important link as he ensures smooth operation of the sal es person at the field. The company operates through Sales Representatives for e ach territory, there is Sales Representatives appointed by the company. This Sal es Representatives assists the ASM in catering to the market needs. The function include market development by making new customers, order booking, collection o f payments, coordination on mills behalf on local publicity, gift items to retai lers, etc. The financial liability rests with the Sales Representatives, this es sentially means that in case of default in payment by a customer, the Sales Repr esentatives will have to bear this bad debt and his account with the company is debited. The noteworthy characteristics of such a system are that the company re mains safe from defaults. The company follows the system of order booking and delivery of these orders to the customers by the desired date through transport or courier service depending on the urgency of order. Order booking is done in two ways: 1.) Seasons booking (Winter and Summer Booking) 2.) Intermediate Visits and booking and mid season book. 57 JVIMS - JAMNAGAR

Sales Promotion:DIGJAM gives sales promotion in two types in which lot of dealer s scheme and consumer scheme are included. In both types they give discount coup on (about 15% discount) of frequent year and all the discount coupons are includ ed in lucky draw and trip is given to lucky draw winner. Such activity is done f or both winter and summer Carnival. They also give award for top five dealers, t op five retailers and top five showrooms. Major Sales Promotion tools for SIGJAM are as follows: For Consumer: 2) Samples 3) Coupons 4) Premium 5) Prizes 6) Dis counts For Traders: 1) Price Off 2) Allowance For Business: 1) Trade shows 2) Fa shion Shows 3) Specialty adds. DIGJAM is also sending Punchang and Calendar to their dealers to know when marri age and other occasion period comes, when there will be more demand for that fun ctions, so that dealer can make stock for it and sale at right time. 58 JVIMS - JAMNAGAR

Branding & Packaging: Branding: Branding is the art and cornerstone of marketing . Perhaps the most distinctive skills of professional marketer is the ability to create, maintain and protect brand. A brand is a name or trademark connected wi th a product or producer. Brands have become increasingly important components o f culture and the economy, now being described as "cultural accessories and pers onal philosophies". A product identity, or brand image are typically the attribu tes one associates with a brand, how the brand owner wants the consumer to perce ive the brand - and by extension the branded company, organization, product or s ervice. A brand is a complex symbol that can convey up to 6 level of meaning:   At tributes   Benefits   Values   Culture   Personality   User In DIGJAM the branding on the cloth a big label is stick which is known as Selvedge or Monogram. It contains:   Name of the company is written.   Details of the product i.e. of which fabric the cloth has been made whether it should be washed or dry cleaned etc. It includes all the information. 59 JVIMS - JAMNAGAR

Packaging: Packaging is the science, art and technology of enclosing or protecti ng products for distribution, storage, sale, and use. Packaging also refers to t he process of design, evaluation, and production of packages. Packaging contains , protects, preserves, transports, informs, and sells. DIGJAM define packaging a s all the activities of designing and producing the container for the product. T he container container called as a package package and it is growing use as a marketing marketing tool: Self Service Consumer affluence Company and Brand Image Innovation Opportunity In DI GJAM the packaging of the final products depends on the requirement of the custo mer. In case of export the fabric is being packed in the form of role with a pla stic cover with a proper tag. In case of container load the material is being pa ck and loaded in the container with the proper fumigation. In case of local mark et it is being packed in boxes and balers. In case of finished products the prod uct is being packed in different manner that is according to its price range. Th ey have velvet bag, leather bag, plastic bag etc. Price Decision: In general terms price is a component of an exchange or transact ion that takes place between two parties and refers to what must be given up by one party (i.e., buyer) in order to obtain something offered by another party (i .e., seller). In simple termsthe amount of money charged for the product or a se rvice or some of values that consumer exchanges for the benefits of having or us ing the product or services. 60 JVIMS - JAMNAGAR

Pricing is a strategic element in marketing mix. A product cannot enter in the m arket without a price tag. Pricing policies and strategies are guidelines and fr amework within which management of a company administrates prices so as to match them with the market needs. Price policies are general guidelines to make futur e decision. In DIGJAM prices are selected on the basis of cost, market and competitors. They select price range in the conference, which is held twice in a year. In June an d December DIGJAM has different range of products available in the market from t he price range of Rs.217 to Rs.5580 per meter. New Product Development: For the development of any unit and for achieving continuous growth in the marke t, a systematic planning for the development of new product and new idea generat ion as well as idea screening is must. In DIGJAM Company create new product development from the following point of vie w: 1.) Designer book 2.) Websites 3.) According to the Customer Requirement and Choice dealers. 61 JVIMS - JAMNAGAR

Mainly DIGJAM produce following products but from these they have produced many new products also: 1) All wool i.e.100% wool 2) Wool Rich i.e. 60% wool and 40% polyester 3) Poly W ool i.e. they are having three ratios in this i.e. Polyester 70 % 80 % 55 % Wool 30 % 20 % 45 % 4) Poly Viscose i.e. they are having three ratios in this: Polyester 65 % 67 % 8 0 % New Product Categories: 1.) Poly: Wool: Lycra 2.) Poly: Wool: Linen 3.) Poly : Viscose: Linen 4.) Poly: Wool: Cotton 5.) Wool: Cashmere 95:5, 100% Linen 6.) Poly: Wool: Bamboo Wool 35 % 33 % 20 % 62 JVIMS - JAMNAGAR

Advertising: Advertising is any paid form of non-personal presentation and promotion of ideas , goods or services by an identified sponsor. As we know that modern marketing c annot service without advertising. The department carries out the function of communicating the brand name, value a nd image to the consumer. It ensures that the premium brand of DIGJAM brand is u pheld in the market place. For this, it decides on advertising to be under taken by the company and supervises the functioning of the advertising agency. In DIGJAM advertising is done by mainly three ways: 1.) International Campaign 2 .) National Campaign 3.) Local publicity. They did international campaign throug h participating in international fairs being held in Germany, Italy and Hong Kon g. Using national campaign they give advertising across the country, in the enti re world through television, newspaper, magazines etc. they give local publicity through hoarding, posters, pamphlets, neon lights, exhibition, fashion shows, g ift banners, cinema slides, carry bags, point of purchase etc. they also give ad vertisement through internet. They also have advertisement in the magazines like Namashkar, Exotica, Go, Time-Out (which is published mainly in Delhi, Mumbai an d Bengaluru) and Go (which is an international business magazine). They advertis ed also through films like ³Kabhie Khushi Kabhie Gum.´ 63 JVIMS - JAMNAGAR

Mr. India World 2008 Finale at Intercontinental The Grand, Mumbai, India on 9th February 2008 India's most desirable man - ready to conquer the world. The 23 fi nalists totally charmed the audience with their walk, wit and style in dazzling and sensational creations by DIGJAM In Digjam they are preparing advertising bud get. They are spending 10% of last year¶s sales for advertising purpose. In T.V.Me dia they are giving advertisement in News Channels only. 64 JVIMS - JAMNAGAR

FINANCE DEPARTMENT 65 JVIMS - JAMNAGAR

Source of Finance: There are several resources of finance/funds available to any company. An effective appraisal mechanism of various sources of funds available to any company must be instituted in the company to achieve its main objectives . Such a mechanism is required to evaluate risk, tenure and cost of each and eve ry sources of fund. The selection of the fund sources is dependent on the financ ial strategy pursued by the company, the leverage planned by the company, the fi nancial condition prevent in the economy and the risk profile of both i.e. the c ompany as well as industry in which the company operates. Each and every source of funds has some advantages as well as disadvantages. Sources of finance mean a place where a company gets their finance. There are mainly two types of sources : : requirements: Internal Source includes: Depreciation Fund Profit Fund. Exter nal Source includes: Banks Financial Institutions IDBI Bank of India Bank of Ame rica Central Bank of India State Bank of India UCO Bank Union Bank of India In D IGJAM they use both types of sources to meet their different types of 66 JVIMS - JAMNAGAR

Capital Budgeting; Capital Budgeting consist of planning & budgeting of the available capital for t he purpose of maximization the long term profitability. In Capital Budgeting the re are different methods, which can determine the period in which investment mad e is recovered. There are different methods of evolution capital budgeting as pa yback method, accounting rate of return method etc. DIGJAM uses ³Pay Back Period M ethod´ for evaluating the investment. And it has the policy of yearly capital budg eting. The BOD with the help of experts does capital budgeting: Dividend Policy: Dividend is a term that refers to that part of a profit of a co mpany, which is distributed by the company among its shareholders. It is one kin d of reward for shareholders for the investment made by them in the shares of a company. The major decision in financial management is related to dividend polic y, involves the choice between distributing the profit belonging to the sharehol ders and retention by the firm. Dividend refers to the part of the firms net ear ning which are paid to shareholders. Focus is on dividend paid to ordinary share holders because holder of preference share is entitled to a fix rate of dividend . DIGJAM has a policy of rewarding its shareholders by out of distribute profit of the company. The company dend for 36 years till the year 1998. However due to d lack of profitability the company has not paid any 67 JVIMS - JAMNAGAR

way of payment of dividend had paid uninterrupted divi adverse market condition an dividend since year 1999.

Equity Capital Structure (Rs.in Cr) Year Authorized Issued Subscribed Called Up 2009 2008 2007 2006 2005 2004 2002 2001 2000 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 80.00 68.76 68.76 68.76 13.02 65.12 65.12 65.12 65.12 65.12 68.76 68.76 68.76 13.01 65.07 65 .09 65.09 65.09 65.09 68.74 68.74 68.74 13.01 65.07 65.07 65.07 65.07 65.07 Less : Calls Forfeited Paid Up in Arrears 0.00 0.02 68.76 0.00 0.02 68.76 0.00 0.02 68.76 0.00 0.02 13.03 0.00 0.02 65.09 0.00 0.02 65.09 0.00 0.02 65.09 0.00 0.02 65.09 0.00 0.02 65.09 Cash Flow (Rs. in Crores) Particulars Cash and Cash Equivalents at Begining of the year Ne t Cash from Operating Activities Net Cash Used In Investing Activities Net Cash Used In Financing Activities Net Inc/(Dec) In Cash And Cash Cash And Cash Equiva lents At End Of The Year Mar-09 Mar-08 Mar-07 2.20 4.33 29.30 0.03 -0.99 7.02 4. 00 0.67 63.90 -5.63 -1.81 -95.89 -1.60 -2.13 -24.97 0.60 2.20 4.33 68 JVIMS - JAMNAGAR

Balance Sheet Particulars SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders F unds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF F UNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets, Loa ns & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Pro visions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total As sets Contingent Liabilities (Rs. in Crores) Mar-09 Mar-08 Mar-07 Mar-06 88.76 68 .76 68.76 43.76 -137.53 -125.97 -117.86 -95.17 -48.77 -57.21 -49.10 -51.41 127.8 4 133.02 138.84 211.93 18.82 29.15 26.54 30.59 146.66 162.17 165.38 242.52 97.89 249.78 187.37 0.23 62.18 0.00 0.28 4.41 39.85 31.57 0.61 13.92 85.95 50.06 4.87 54.93 31.02 0.00 0.00 0.00 0.00 97.89 0.82 104.96 251.40 184.21 0.23 66.96 0.00 0.08 4.42 45.01 26.42 2.21 14.50 88.14 50.18 4.46 54.64 33.50 0.00 0.00 0.00 0. 00 104.96 0.84 116.28 191.11 252.05 257.63 178.19 173.09 0.23 NA 73.63 NA 0.00 0 .00 0.00 0.08 4.42 70.90 43.71 40.75 24.54 24.60 4.34 29.30 13.79 21.24 86.38 11 5.89 44.01 64.02 4.14 16.28 48.15 80.30 38.23 35.59 0.00 0.00 0.00 0.00 0.00 0.0 0 0.00 0.00 116.28 191.11 0.83 13.49 69 JVIMS - JAMNAGAR

RESEARCH ON RATIO ANALYSIS OF DIGJAM LTD V/S RAYMOND LTD. 70 JVIMS - JAMNAGAR

Overview of Financial Statement Analysis: ³A Financial Statement is an organized c ollection of data organized according to logical and consistent accounting proce dures.´ - Hampton Financial statement analysis is defined as the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship betwe en the items of the balance sheet and the profit and loss account. The Process o f critical evaluation of the financial information contained in the financial st atements in order to understand and make decision regarding the operations of th e firm is called ³Financial Statement analysis´. It is a study of relationship among various financial facts and figures as given in a set of financial statements, and the interpretation thereof to gain an insight into the profitability and ope rational efficiency of the firm to assess its financial health and future prospe cts. Financial statements are prepared to meet external reporting obligations an d also for decision making purposes. They play a dominant role in setting the fr amework of managerial decisions. But the information provided in the financial s tatements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial stat ements is of immense use in making decisions through analysis and interpretation of financial statements. An important aspect of financial statement analysis is determining relevant relationship among specific items of information. Companie s typically present financial information for more than one time period, which p ermits users of the information to make comparisons that help them understand ch anges over time. Financial Statements based on absolute value and percentage cha nges and trend percentages are tools for comparing information from successive t ime periods. In short, Financial Statements represents a summary of the financia l information prepared in the required manner for the purpose of use by managers and external stakeholders. 71 JVIMS - JAMNAGAR

Objectives of Financial Statement Analysis: 1. To assess the current profitabili ty and operational efficiency of the firm as a whole as well as its different de partments so as to judge the financial health of the firm 2. To ascertain the re lative importance of different components of the financial position of the firm 3. To identify the reasons for change in the profitability/financial position fi rm. 4. To Judge the ability of the firm to repay its debt and assessing the shor t-term as well as long-term liquidity position of the firm. Advantages of Financial Statement Analysis: 1. Investors get enough idea to deci de about the investments of their funds in the specific company. 2. Regulatory A uthorities like International Accounting Standards Board can ensure whether the company is following accounting standards or not. 3. Company can analyze it own performance over the period time through financial statement analysis. Limitation of Financial Statement Analysis: 1. Financial Statements only reveal financial position of the company in a summarized manner; In case of balance she et it shows the financial position of business on a particular day usually at th e end of the year. 2. Financial Statement s don¶t recover non-monetary transaction . 3. Unless the statements are audited their authenticity is under doubt and the y may be misleading and fraudulent. 4. Financial Statements reflect the recorded facts and figures. Hence these are not useful for control purposes. 72 JVIMS - JAMNAGAR

Need for Financial Statement Analysis: Need for Management: 1. Measuring the suc cess or the failure of the operation, as a whole. 2. Making sound decisions rela ting to all the phase of operations. 3. Controlling Operations and 4. Determinin g the relative efficiency of departments and process. Need for Outside Parties: 1. Creditors use analysis as a basis of granting credit. 2. Investors use it to come to a decision of buying, selling or holding shares in a company and, 3. Gov ernment uses it for purposes of regulations and administration. 73 JVIMS - JAMNAGAR

RESEARCH METHODOLOGY 74 JVIMS - JAMNAGAR

Meaning of Research: Research is simply the process of arriving as dependable so lution to a problem through the planned and systematic collection, analysis and interpretation of data. The term research consists of two words: Research = Re + Search ³Re´ means again and ³Search´ means to find out something. Definition of Research: The Advanced Lerner¶s Dictionary of Current English lays d own the meaning of research as ³A careful investigation or inquiry especially thro ugh search for new facts in any branch of knowledge´ According to Fred Kerlinger, ³R esearch is an organized enquiry designed and carried out to provide information for solving a problem´ According to Francis Rummel, ³Research is a careful inquiry o r examination to discover new information or relationships and to expand and to verify existing knowledge´ Research Objective: The objective of Financial Statement Analysis of Digjam Ltd v/s Raymond Ltd are as follows: To assess the current profitability & operationa l efficiency of both the company. To analyze growth & performance of both the co mpany. To Identify the reason for change in the profitability/financial position position To Judge the ability of the firm to repay its debt & assessing the short-term a s well as long-term liquidity position of both companies 5. To Judge the financi al health of both companies. 6. To Judge the ability of the company to pay the p rincipal and interest, arrangements for amortization of debt and the security av ailable for the loans extended. 1. 2. 3. 4. 75 JVIMS - JAMNAGAR

Significance of Research: The Research is study about ³Comparison of Financial Sta tement Analysis of Digjam Ltd v/s Raymond Ltd. Significance of this research of this research from the view point of interested parties are as under: Management: Financial Statement Analysis will help the management of Digjam & Ra ymond in understanding the progress, position and prospects of business. Investors: Financial Statement Analysis is also significant for investor both pr esent and prospective. They will invest in the company where they feel that fina ncial structure of a company is sound & which has bright future. Bankers: Financial Statement Analysis is also significant for bankers because ba nker is primarily concerned with the ability of paying current debts and the cur rent operation results. He wants no only the payment of advances but he also wan ts that such advance should be repaid at proper time also. Government: Financial Statement Analysis is also significant for govt. because C entral and State Governments are also interested in published financial statemen ts in order to assess their revenues through various taxes to regulate capital i ssue and public utility regulation. Creditors: From the creditor¶s point of view Financial Statement Analysis act as m agic eye highlighting the credit worthiness i.e., assurance whether the company will honour obligations as and when they mature. 76 JVIMS - JAMNAGAR

Statement of the Problem: The first step while conducting research is careful de finition of Research Problem ³To ERR IS THE HUMAN´ is a proverb which indicates that no one is perfect in this world. Every researcher has to face many problems whi le conducting any research that¶s why problem statement is defined to know which t ype of problems a researcher has to face while conducting any study. It is said that ³Problem well defined is problem half solved´ Basically, a Problem Statement re fers to some difficulty, which researcher experiences in the context of either a theoretical or practical situation and wants to obtain solution for the same. T he Problem Statement for this research is: ³Comparison of Financial Statement Anal ysis of Digjam v/s Raymond Research Design: ³A Research Design is the arrangement of conditions for collectio n and analysis of data in a manner that aims to combine relevance to the researc h purpose with economy in procedure´ ³Research Design is the plan, structure and str ategy of investigation conceived so as to obtain answers to research questions a nd to control variance´ - Kerlinger ³In This Research Study Experimental / Hypothesis Testing Research Design have bee n applied´ 77 JVIMS - JAMNAGAR

Data Collection: There are two types of data collection method : 1. Primary Data 2. Secondary Data Primary Data: Primary data are those data which are collected fresh and for the first time and thus happen to be original in character. Secon dary Data: The Secondary data are those data which have been collected by someon e else and which have already been passed through the statistical process. In th is research Secondary Data are collected, (Annual Reports of Digjam Ltd & Raymon d Ltd, for the year 2007, 2008 & 2009 are collected) Tools/Methods of Financial Statement Analysis: 1. Comparative Statements 2. Rati o Analysis 3. Common-size statements Comparative Statements: These are the statements showing the profitability and f inancial position of a company for different periods of time in a comparative fo rm to give an idea about the position of two or more periods. It usually applies to the two important financial statements, namely, Balance Sheet and Income Sta tements prepared in a comparative form. The financial data will be comparative o nly when same accounting principles are used in preparing these statements. Comp arative figures indicate the trend and direction of financial position and opera ting results. This analysis is also known as Horizontal Analysis 78 JVIMS - JAMNAGAR

Ratio Analysis: It describes the significant relationship which exists between v arious items of a balance sheet and a profit and loss account of a company. As a technique of financial statement analysis, accounting ratios measure the compar ative significance of the individual items of the income and position statements . It is possible to assess the profitability, solvency and efficiency of an ente rprise through the technique of ratio analysis. Common Size Statements: These are the statements which indicate the relationship of different items of a financial statement with some common item by expressing each item as a percentage of the common item. The percentage thus calculated ca n be easily compared with the results corresponding percentages of the previous year or of some other firms, as the numbers are brought to common base. Such sta tements also allow an analyst to compare the operating and financing characteris tics of two companies of different sizes in the same industry. Thus, common-size statements are useful, both, in intra-firm comparison for the same year or for several years. This analysis is also known as ³Vertical Analysis´ Hypothesis Formulation: The word hypothesis consists of two words: Hypo + thesis = Hypothesis. Hypo means composition of two or more variables which is to be va ried. Thesis means position of these variables in the specific frame of referenc e Thus, Hypothesis means assumption regarding all results before going for exper iment. In other words, Hypothesis is a special proposition, formulated to be tas ted in a certain given situation as a part of research which states what the res earcher is looking for, 79 JVIMS - JAMNAGAR

Types of Hypothesis: Null Hypothesis: If we have to compare method A with method B about its superior ity and if we proceed on the assumption that both methods are equally good, then this assumption is termed as Null Hypothesis. It means that there is no signifi cance difference between methods. Null Hypothesis is symbolized by HO Alternate Hypothesis: As against null hypothesis, we may think that the method A is superior or the method B is inferior, we are then stating what it is termed as alternate hypothesis. It means that there is a significance difference betwee n two methods. Alternative Hypothesis is symbolized by H1. Level of Significance: This is very important concept in the context of hypothes is testing. It is always some percentage (usually 5%) which should be chosen wit h great care, thought and reason. Thus the significance level is the maximum val ue of probability of rejecting HO when it is true and it usually determined in a dvance before the testing the hypothesis. In Context to this Research, 1. H0 = There is no significance difference in Gros s Profit ratio of Digjam & Raymond during the study period H1 = There is signifi cance difference in Gross Profit ratio of Digjam Ltd & Raymond 2. H0 = There is no significance difference in Net Profit ratio of Digjam & Raym ond during the study period H1 = There is significance difference in Net Profit ratio of Digjam Ltd & Raymond during the study period 80 JVIMS - JAMNAGAR

3. H0 = There is no significance difference in Expenditure ratio of Digjam & Ray mond during the study period H1 = There is significance difference in Expenditur e ratio of Digjam Ltd & Raymond during the study period 4 H0 = There is no significance difference in Return on Capital Employed of Digj am & Raymond during the study period H1 = There is significance difference in Re turn On Capital Employed of Digjam Ltd & Raymond during the study period 5 H0 = There is no significance difference in Return on Equity Share Capital of Digjam & Raymond during the study period H1 = There is significance difference i n Return on Equity Share Capital of Digjam Ltd & Raymond during the study period 6. H0 = There is no significance difference in Earning per Share of Digjam & Ray mond during the study period H1 = There is significance difference in Earning Pe r Share of Digjam Ltd & Raymond during the study period 7. H0 = There is no significance difference in Price Earning Ratio of Digjam & R aymond during the study period H1 = There is significance difference in Price Ea rning ratio of Digjam Ltd & Raymond during the study period 8. H0 = There is no significance difference in Current ratio of Digjam & Raymond during the study period H1 = There is significance difference in Current ratio of Digjam Ltd & Raymond during the study period 81 JVIMS - JAMNAGAR

9. H0 = There is no significance difference in Quick ratio of Digjam & Raymond d uring the study period H1 = There is significance difference in Quick ratio of D igjam Ltd & Raymond during the study period 10. H0 = There is no significance difference in Proprietary ratio of Digjam & Ra ymond during the study period H1 = There is significance difference in Proprieta ry ratio of Digjam Ltd & Raymond during the study period 11 H0 = There is no significance difference in Debt-Equity ratio of Digjam & Ray mond during the study period H1 = There is significance difference in Debt-Equit y ratio of Digjam Ltd & Raymond during the study period 12 H0 = There is no significance difference in Stock turnover ratio of Digjam & Raymond during the study period H1 = There is significance difference in Stock t urnover ratio of Digjam Ltd & Raymond during the study period 13. H0 = There is no significance difference in Fixed Assets Turnover ratio of D igjam & Raymond during the study period H1 = There is significance difference in Fixed Assets Turnover ratio of Digjam Ltd & Raymond during the study period 14. H0 = There is no significance difference in Overall Turnover ratio of Digjam & Raymond during the study period H1 = There is significance difference in Overall Turnover ratio of Digjam Ltd & Raymond during the study period 82 JVIMS - JAMNAGAR

15. H0 = There is no significance difference in Debtors ratio of Digjam & Raymon d during the study period H1 = There is significance difference in Debtors ratio of Digjam Ltd & Raymond during the study period Statistical Tool Used in Research: _  In this research chi-square Test is used as a statistical tool. Chi- square Test :Suppose we have obtained an observed frequency distribution and we are interest ed in knowing whether the observed frequency distribution supports a particular hypothesis. For this a very powerful test for testing the significance of the di screpancy between frequency distribution and expected distribution. This test wa s given by Karl Pearson in 1900. Chi-square is a continuous distribution and the form of the distribution depends upon degree of freedom n. This test is also kn own as Test of Goodness of Fit. The value of X2 is calculated by following formu la : X2 =  (Oi - Ei)2 ----------------Ei 83 JVIMS - JAMNAGAR

RATIO ANALYSIS 84 JVIMS - JAMNAGAR

PROFITABILITY RATIOS In Relation to Sales:1. Gross Profit Ratio 2. Net Profit Ratio 3. Expenditure Ra tio In Relation to Investment:1. Return on Capital Employed 2. Return on Equity Shar e Capital 3. Earning Per Share 4. Price Earning Ratio 85 JVIMS - JAMNAGAR

In Relation to Sales Gross Profit Ratio: Gross Profit Ration measures the percentage of each sales ru pee remaining after the firm has paid for its goods. It is a ratio expressing re lationship between Gross Profit earned to Net Sales. It is an useful indication of the profitability of business. A high ratio of gross profit to sales is a sig n of a good management, while a low ratio is definitely a danger signal, warrant ing a careful and detailed analysis of the factors responsible for it. Formula: Gross Profit Ratio = Gross Profit ------------------- x 100 Sales Where, Gross Profit = Sales - Cost of goods sold (COGS) COGS = Opening Stock + P urchases + Purchase Expenses - Closing Stock Digjam: - (Amt in Lacs.) 6979.32 2007 = ------------------ x 100 = 64.61% 10802.49 6907.34 2008 = ---------------- x 100 = 62.20% 11104.63 8861.13 2009 = ----------------- x 100 = 63.3 2% 13992.89 86 JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.) 122263.01 2007 = ------------------ x 100 = 95.21% 128419.35 119781.25 2008 = ---------------- x 100 = 90.57% 132251.15 127267.86 2009 = ----------------- x 10 0 =92.28% 137919.38 YEAR 2007 2008 2009 DIGJAM 64.61% 62.20% 63..32% RAYMOND 95.21% 90.57% 92.28% GROSS PROFIT RATIO 100 90 80 70 60 PERCENTAGE 50 40 30 20 10 0 2007 2008 YEAR 2009 DIGJAM RAYMOND 87 JVIMS - JAMNAGAR

Interpretation: The Gross Profit ratio of Digjam Ltd. Shows fluctuating trend. I n the year 2007 it was 64.61%, while in 2008 it was decreased to 62.20%, again i n 2009 it was increased to 63.32%. The Gross Profit Ratio of Raymond Ltd. Also shows fluctuating trend. In 2007 it was 95.21%, which was decreased to 90.57% in 2008, & again in 2009 it was increa sed to 92.28%. When we compare the ratio of both the company we can say that Raymond has High G ross Profit Ratio. It shows good sign of management for Raymond as it implies th at cost of production of the firm is relatively low. Gross Profit Ratio of Digja m Ltd is low because High cost of production, low selling price resulting form s evere competition. Chi - square Test for DIGJAM: Year Observed Frequency (OI) 64.61 62.20 63.32 Exp ected Frequency (Ei) 63.38 63.38 63.38 (Oi-Ei) (Oi-Ei)2 / Ei 2007 2008 2009 1.23 -1.18 -0.06 TOTAL 0.024 0.021 0.001 0.046 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance Difference in the Gross Profit Ratio of DIGJAM Ltd during the study period. 88 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND: Year Observed Frequency (OI) 95.21 90.57 92.28 Ex pected Frequency (Ei) 92.69 92.69 92.69 (Oi-Ei) (Oi-Ei)2 / Ei 2007 2008 2009 2.52 -2.12 -0.41 TOTAL 0.069 0.048 0.002 0.119 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance Difference in the Gross Profit Ratio of RAYMOND Ltd during th e study period. 89 JVIMS - JAMNAGAR

Net Profit Ratio: Net Profit Ratio measures the percentage of each sales rupee r emaining after all costs and expenses including interests and taxes have been de ducted. This ratio is valuable for the purpose of ascertaining the over-all prof itability of the business & shows the efficiency or otherwise of operating the b usiness. This ratio indicates what portion of sales revenue is left to the propr ietors after all operating expenses are met. A high net profit ratio would ensur e adequate return to the owners as well as enable a firm to withstand adverse ec onomic conditions when selling price is declining, cost of production is rising and demand for the product is falling. A low net profit ratio has opposite impli cations. Formula: Net Profit after Tax Net Profit Ratio = ------------------------------------------------------ x 100 Sales Digjam: - (Amt in Lacs.) (2269.10) 2007 = ------------------ x 100 = (21)% 10802.49 (811.21) 2008 = ---------------- x 100 = (7.3)% 11104.63 (1156.24) 2009 = ----------------- x 100 = (8.26) % 13992.89 90 JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.) 20125.28 2007 = ------------------ x 100 = 15.67% 128419.35 6612.17 2008 = ---------------- x 100 = 5% 132251.15 (27039.68) 2009 = ----------------- x 100 = (1 9.60)% 137919.38 YEAR 2007 2008 2009 DIGJAM (21)% (7.3)% (8.26)% RAYMOND 15.67% 5% (19.60)% Net Profit Ratio 20% 15% 10% 5% 0% Percentage -5% -10% -15% -20% -25% Year 2007 2008 2009 DIGJAM RAYMOND 91 JVIMS - JAMNAGAR

Interpretation: The Net Profit Ratio for Digjam Ltd. Shows negative trend. Digja m Ltd. Has net loss for the year 2007,2008 & 2009. They are not making net profi t during these 3 years Their loss shows fluctuating trend. Net Profit Ratio for Raymond shows decreasing trend. Their Net Profit decreases continuously during the year 2007, 2008 & 2009. They have net profit in 2007 & 2 008, but it has loss in the year 2009. When we compare the ratio of both companies we can say that for the year 2009 bo th company shows loss. This shows that management is not able to operate busines s with sufficient success for recovering the revenues from the business. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) -21 -7.3 -8.26 Expected Frequency (Ei) -12.19 -12.19 -12.19 (Oi-Ei) (Oi-Ei)2 / Ei -33.19 -19.49 -20.45 TOTAL -90.36 -31.16 -34.30 -155.82 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Net Profit Ratio of DIGJAM Ltd during the s tudy period. 92 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 15.67 5 -19.60 Expected Frequency (Ei) 0.36 0.36 0.36 (Oi-Ei) (Oi-Ei)2 / Ei 15.31 4.64 -19.96 TOTAL 651.10 59.80 1106.67 1817.57 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal > X2tab . So, Ho is rejected. Therefore it can be said that there is significance difference in the Net Profit Ratio of RAYMOND Ltd during the stu dy period. 93 JVIMS - JAMNAGAR

Expenditure Ratio:In order to determine & scrutinize the operational efficiency of the business, every expenditure has to be matched with sales. For the purpose of ascertaining relationship between expenses & net sales expense ratios are co mputed. Formula: Total Expenses Expense Ratio = ---------------------------------------------- x 100 Sales Digjam: - (Amt in Lacs.) 11504.24 2007 = ------------------ x 100 = 106.50% 10802.49 12314.51 2008 = ----------------- x 100 = 110.89% 11104.63 14806.52 2009 = ----------------- x 100 = 105.81% 13992.89 Raymond: - (Amt in Lacs.) 121798.53 2007 = ------------------ x 100 = 94.84% 128419.35 135717.19 2008 = ----------------- x 100 = 102.62% 132251.15 94 JVIMS - JAMNAGAR

153654.89 2009 = ----------------- x 100 =111.41% 137919.38 YEAR 2007 2008 2009 DIGJAM 106.50% 110.89% 105.81% RAYMOND 94.84% 102.62% 111.41% Expenditure Ratio 115 110 105 Percentage 100 DIGJAM 95 90 85 2007 2008 Year 2009 RAYMOND 95 JVIMS - JAMNAGAR

Interpretation: The Expenditure ratio of Digjam Ltd. Shows increasing trend. IN 2007 it was 105.81%, then it was increased to 106.50% & in 2009 it was increased to 110.89%. Thus, Expenditure of Digjam Ltd. are increasing from year 2007 to 2 009. Expenditure ratio of Raymond Ltd also shows increasing trend. In 2007 it wa s 94.84% the it was increased to 102.48% in 2008, & in 2009 it was 111.41%. Thus , Expenditure of Raymond Ltd. are increasing from year 2007 to 2009. When we com pare the expenditure ratio of both company expenditures of both the companies ar e increasing from 2007 to 2009. Digjam Ltd. Has more expenditure as compared to Raymond. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) 106.50 110.89 105.81 Expected Frequency (Ei) 107.73 107.73 107.73 (Oi-Ei) (Oi-Ei)2 / Ei -1.23 3.16 -1.92 TOTAL 0.01 0.09 0.03 0.13 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Expenditure Ratio of DIGJAM Ltd during the study period. 96 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 94.84 102.62 111.41 Expected Frequency (Ei) 102.96 102.96 102.96 (Oi-Ei) (Oi-Ei)2 / Ei -8.12 -0.34 8.45 TOTAL 0.64 0.01 0.69 1.34 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Expenditure Ratio of RAYMOND Ltd during the study period. 97 JVIMS - JAMNAGAR

In Relation to Investment Return on Capital Employed: It is an index of profitab ility of business & is obtained by comparing net profit with capital employed. T his ratio provides a test of profitability related to the sources of long term f unds & it provides sufficient insight into how efficiently the long-term funds o f owners and lenders are being used. The term capital employed includes share ca pital, reserves & surplus and long term loans such as debentures. The success of the enterprise is judge with the help of this ratio. The higher the ratio, the more efficient is the use of capital employed. Formula: EBIT Return on Capital Employed = --------------------------- x 100 Cap ital Employed Where, EBIT = Earnings before interests & tax Capital Employed = E quity Share Capital + Reserves & Surplus + Long Term Loans. Digjam: - (Amt in Lacs.) (393.66) 2007 = ------------------ x 100 = (1.90)% 20760.06 (1120.38) 2008 = ---------------- x 100 = (5.55)% 20177.54 (712.22) 2009 = ----------------- x 100 = (3.62)% 19660.25 98 JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.) 23823.28 2007 = ------------------ x 100 = 16.85% 141415.94 8169.66 2008 = ---------------- x 100 = 4.62% 176458.17 (29755.06) 2009 = ----------------- x 100 = (15.23) % 195363.49 YEAR 2007 2008 2009 DIGJAM (1.90)% (5.55)% (3.62)% RAYMOND 16.85% 4.62% (15.23)% Return on Capital Employed 20 15 10 5 Percentage 0 -5 -10 -15 -20 Year 2007 2008 2009 DIGJAM RAYMOND 99 JVIMS - JAMNAGAR

Interpretation:Return on capital employed of Digjam ltd. Shows fluctuating trend . Digjam Ltd. Is not getting return on their capital employed. Return on capital employed of Raymond ltd. Shows decreasing trend. Their return on capital employ ed are decreasing. They are getting return in 2007 & 2008. While in 2009 they ar e not getting any return on their capital employed. When we compare the ratios o f both the company we can say that performance of Digjam Ltd. Is poor as they ar e not getting return on their capital employed & their operational efficiency is not good. So, they have less internal accruals & suppliers are not willing to e xtend more favorable terms. While in Raymond ltd. Their performance is decreasin g. So, we can say that their operational efficiency is declining. So, they have less efficient use of capital employed. Chi - square Test for DIGJAM: Year 2007 2008 2009 Observed Frequency (OI) (1.90) (5.55) (3.62) Expected Frequency (Ei) -3.69 -3.69 -3.69 (Oi-Ei) (Oi-Ei)2 / Ei -5.59 9.24 7.31 TOTAL -8.47 -23.14 -14.48 - 45.79 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Return on capital employed of DIGJAM Ltd du ring the study period. 100 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 16.85 4.62 (15.23) Expected Frequency (Ei) 2.08 2.08 2.08 (Oi-Ei) (Oi-Ei)2 / Ei 14.77 2.54 -17.31 TOTAL 104.88 3.10 144.05 252.03 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal >X2tab . So, Ho is rejected. Therefore it can be said that there i s significance difference in the Return on capital employed of RAYMOND Ltd durin g the study period. 101 JVIMS - JAMNAGAR

Return on Shareholder¶s Fund: This ratio indicates whether the return on sharehold er¶s funds is enough in relation to the risks that they undertake. This ratio show s what amount of dividend is likely to be received on shares. It has great pract ical importance to be compared with that of the other company. This ratio reveal s how owners fund (shareholders funds) are utilized by the firm. This ratio will throw light on the relative performance and strength of the company. Formula: Net Profit after Tax Return on Shareholders Fund = -------------------------- x 100 Shareholders fund Digjam: - (Amt in Lacs.) (2269.10) 2007 = ------------------ x 100 = (9.69) % 23413.57 (811.21) 2008 = ---------------- x 100 = (3.51) % 23092.38 (1156.24) 2009 = ----------------- x 1 00 = (4.91) % 23542.72 Raymond: - (Amt in Lacs.) 20125.28 2007 = ------------------ x 100 = 14.84% 135615.94 6612.17 2008 = ---------------- x 100 = 4.67% 141915.45 102 JVIMS - JAMNAGAR

(27039.68) 2009 = ----------------- x 100 = (23.56) % 114798.32 YEAR 2007 2008 2009 DIGJAM (9.69)% (3.51)% (4.91)% RAYMOND 14.84% 4.67% (23.56)% Return on Shareholders Fund 20 15 10 5 0 Percentage -5 -10 -15 -20 -25 -30 Year 2007 2008 2009 DIGJAM RAYMON D 103 JVIMS - JAMNAGAR

Interpretation: Return on shareholders fund ratio shows negative trend for Digja m ltd. Digjam ltd is not earning on their shareholders fund. Their return is in negative & it is fluctuating. In 2007 it was -9.69%, then it 2008 it was -3.51% and in 2009 it was -4.91%. Return on shareholders fund ratio shows Decreasing tr end for Raymond Ltd. They are getting return on shareholders fund on 2007 & 2008 but in 2009 they are not getting any return on shareholders fund. In 2007 retur n on shareholders fund ratio was 14.84%, which was decreased to 4.67% & again in 2009 it was decreased to -23.56%. When we compare the ratio of return on shareh olders fund we can say that Raymond Ltd is earning more return on equity share c apital as compare to Digjam. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) (9.69) (3.51) (4.91) Expected Frequency (Ei) (6.04) (6.04) (6.04) (Oi-Ei) (Oi-Ei)2 / Ei -15.73 -9.55 -10.95 TOTAL -40.96 -15.10 -19.85 -75.91 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Return on Shareholders Fund of DIGJAM Ltd d uring the study period. 104 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 14.84 4.67 (23.56) Expected Frequency (Ei) -1.35 -1.35 -1.35 (Oi-Ei) (Oi-Ei)2 / Ei 13.49 3.32 -24.91 TOTAL -134.80 -8.16 -459.63 -602.53 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is rejected. Therefore it can be said that there is no significance difference in the Return on Shareholders Fund of RAYMOND Ltd during the study period. 105 JVIMS - JAMNAGAR

Return on Equity Share Capital: It shows what percentage of the profit is earned on the capital invested. The ratio is obtained by dividing net profit after ded uction of preference divided by amount of equity share capital. This ratio measu res the return on the total equity funds of ordinary shareholders. Formula: Net Profit after Tax ± Preference Dividend Return on Equity Share capital = ----------------------------------------------------------------------------------------------------------------- x 100 Equity Capita l Digjam: - (Amt in Lacs.) (2269.10) 2007 = ------------------ x 100 = (33) % 6875.79 (811.21) 2008 = ---------------- x 100 = (11.79) % 6875.79 (1316.24) 2009 = ----------------- x 100 = (19.14) % 6875.79 Raymond: - (Amt in Lacs.) 20125.28 2007 = ------------------ x 100 = 328.86% 6138.08 106 JVIMS - JAMNAGAR

6612.17 2008 = ----------------- x 100 = 107.72% 6138.08 (27039.68) 2009 = ----------------- x 100 = (440.52) % 6138.08 YEAR 2007 2008 2009 DIGJAM (33)% (11.79)% (19.14)% RAYMOND 328.86% 107.72% (440.52)% Return on Equity Share Capital 400 300 200 100 0 Percentage -100 -200 -300 -400 -500 Year 2007 2008 2009 DIGJAM RAYMOND 107 JVIMS - JAMNAGAR

Interpretation: Return on equity share capital of Digjam ltd. Shows fluctuating and negative trend. They are not getting return on their equity share capital. R eturn on equity share capital of Raymond ltd. Shows decreasing trend. In 2007 & 2008 they are getting return on their equity share capital, while in 2009 they a re not getting return on equity share capital. When we compare return on equity share capital we can say that Raymond has more return on equity share capital ex cept 2009. So, we can say that for the year 2007 & 2008 Raymond has earned satis factory return for their shareholders. While Digjam ltd has not earned satisfact ory return for its shareholders. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) (33) (11.79) (19.14) Expected Frequency (Ei) -21.31 -21.31 -21.31 (Oi-Ei) (Oi-Ei)2 / Ei -54.31 -33.10 -40.45 TOTAL -138.41 -51.41 -76.78 -266.60 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Return on Equity Share Capital of DIGJAM Lt d during the study period. 108 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 328.86 107.72 (440.52) Expected Frequency (Ei) -3.94 -3.94 -3.94 (Oi-Ei) (Oi-Ei)2 / Ei 332.8 111.66 -444.46 TOTAL -28110.62 -3164.45 -50138.25 -81413.32 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is rejected. Therefore it can be said that there is no significance difference in the Return on Equity Share Capital of RAYMOND L td during the study period. 109 JVIMS - JAMNAGAR

Earning Per Share:EPS measures the profit available to the equity shareholders o n a per share basis, that is, the amount they can get on every share held. The E PS shows the average income that the firm earns per share if profit of the firm is more than EPS will increase and if profit of the firm is lower than EPS will decrease. The objective of finding this ratio is to measure the profitability of the firm on per equity share basis. Formula: Net Profit after tax ± Preference Dividend Earning per Share = ----------------------------------------------------------------------------------------------------No. -No. Of Equity Share Digjam: - (Amt in Lacs.) (2269.10) 2007 = ------------------ = -3.30 Rs. 687.41 (811.21) 2008 = ---------------- = -1.18 Rs. 687.41 (1316.24) 2009 = ----------------- = -1.91 Rs. 687.4 1 Raymond: - (Amt in Lacs.) 20125.28 2007 = ------------------ = 32.79 Rs 613.80 110 JVIMS - JAMNAGAR

6612.17 2008 = ----------------- = 10.77 Rs 613.80 (27039.68) 2009 = ----------------- = -44.05 Rs 613.80 YEAR 2007 2008 2009 DIGJAM -3.30 Rs. -1.18 Rs. -1.91 Rs. RAYMOND 32.79 Rs. 10.77 Rs. -44.05 Rs. Earning Per Share 40 30 20 10 0 Rs. -10 -20 -30 -40 -50 Year 2007 2008 2009 DIGJAM RAYMOND 111 JVIMS - JAMNAGAR

Interpretation: EPS of Digjam ltd shows negative trend &it is fluctuating. Their Earning per share is negative. So their shareholders are not getting earnings o n every share held by them. EPS of Raymond shows decreasing trend. EPS of Raymon d ltd is decreasing. Raymond¶s shareholders get return on every shares held by the m in 2007 & 2008 but in 2009 they are not getting return on shares. When we comp are EPS of both company we can say that shareholders of Raymond ltd are getting more return on their share as compare to Digjam. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) -3.30 -1.18 -1.91 Expected Frequency (Ei) -2.13 -2.13 -2.13 (Oi-Ei) (Oi-Ei)2 / Ei -5.43 -3.31 -4.04 TOTAL -13.84 -5.14 -7.66 -26.64 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Earning Per Share of DIGJAM Ltd during the study period. 112 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 32.79 10.77 -44.05 Expected Frequency (Ei) -0.16 -0.16 -0.16 (Oi-Ei) (Oi-Ei)2 / Ei 32.63 10.61 -44.21 TOTAL -6654.48 -703.57 -12215.77 -19573.82 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is rejected. Therefore it can be said that there is no significance difference in the Earning Per Share of RAYMOND Ltd during the study period. 113 JVIMS - JAMNAGAR

LIQUIDITY RATIOS 1. Current Ratio 2. Quick Ratio / Acid Test Ratio 114 JVIMS - JAMNAGAR

Current Ratio: This ratio is most commonly used to perform short term financial analysis. It is also known as working capital ratios. This ratio matches the cur rent assets of the firm to the current liabilities of the firm. This ratio is an indication of the firm¶s commitment to meet its short-term liabilities. Normally a current ratio of 2:1 is considered satisfactory. Current assets represents tho se assets which can be in the ordinary course of business, converted into cash w ithin a short period of time, normally not exceeding one year and includes cash and bank balances, marketable securities, debtors, bills receivables, & prepaid expenses. Current Liabilities defined as liabilities which are short-term maturi ng obligations to be met, as originally contemplated, within a year, consist of trade creditors, bills payable, and bank credit, provision for taxation, dividen ds and outstanding expenses. Formula: Current Assets Current Ratio = ---------------------------------------------Current --Current Liabilit ies Digjam: (Amt in Lacs.) 8637.34 2007 = ------------------ = 1.79:1 4815.16 8814.40 2008 = ---------------- = 1.61:1 5464.61 8595.02 2009 = ----------------- = 1.56:1 5492.71 115 JVIMS - JAMNAGAR

Raymond: - (Amt in Lacs.) 82490.59 2007 = ------------------ = 2.84: 29083.90 93282.09 2008 = ---------------- = 3.31:1 28210.03 98165.33 2009 = ----------------- = 2.80:1 35044.23 YEAR 2007 2008 2009 DIGJAM 1 .79:1 1.61:1 1.56:1 RAYMOND 2.84:1 3.31:1 2.80:1 Current Ratio 3.5 3 2.5 2 Times 1.5 1 0.5 0 2007 2008 Year 2009 DIGJAM RAYMOND 116 JVIMS - JAMNAGAR

Interpretation: Current Ratio of Digjam ltd shows decreasing trend. It is decrea sing from 2007 to 2009. In 2007 it was 1.79:1, then it decreases to 1.61:1, & th en in 2009 it was 1.56: 1.It shows that in 2009 current ratio of Digjam is 1.56: 1. It implies that every one rupee of current liabilities current assets of 1.56 Rs are available to meet them. Current Ratio of Raymond ltd shows fluctuating t rend. In 2007 it was 2.84:1 then it was increased to 3.31:1 in 2008 & in 2009 it was 2.80:1.In 2009 current ratio of Raymond ltd is 2.80: 1. It implies that eve ry one rupee of current liabilities, current assets of Rs. 2.80 are available to meet them. When we compare the current ratio of both company we can say that cu rrent ratio of Raymond is higher. It implies that Raymond has larger amount of r upees available per rupee of current liability & the more is firm¶s ability to mee t current obligations & the greater is tha safety of funds for short term credit ors. Chi - square Test for DIGJAM : Year 2007 2008 2009 Observed Frequency (OI) 1.79 1.61 1.56 Expected Frequency (Ei) 1.65 1.65 1.65 (Oi-Ei) (Oi-Ei)2 / Ei 0.14 -0.04 -0.09 TOTAL 0.012 0.001 0.004 0.017 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Current Ratio of DIGJAM Ltd during the stud y period. 117 JVIMS - JAMNAGAR

Chi - square Test for RAYMOND : Year 2007 2008 2009 Observed Frequency (OI) 2.84 3.31 2.80 Expected Frequency (Ei) 2.98 2.98 2.98 (Oi-Ei) (Oi-Ei)2 / Ei -0.14 0.33 -0.18 TOTAL 0.007 0.037 0.011 0.055 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal