CHAPTER - I

INTRODUCTION

Indian spinning industry is one of the biggest in the world with around 50 million spindles.
Installed ability of rotors in the country is around 8 lakh. India has the second highest spindle age
after China and contributes to about 25 per cent divide in globe trade of cotton yarn. Cotton
continues to be the leading fiber addicted by the textile industry. Cotton textiles contribute to over
60 per cent of Indian textile exports. India is biggest yarn exporter in world and mainly exports to
China, Korea Republic, Bangladesh, Egypt, Taiwan, Hong Kong, Turkey, Japan, Israel, European
Union and Mauritius. India produces yarn of wide range of counts, which varies from two to 120s
Ne and mainly dominated by cotton yarn. Other than 100per cent cotton yarn, cotton is spun with
other fibers to manufacture blended yarns. Some of the major blended yarns exported from this
country are polyester/cotton, cotton/viscose and acrylic/cotton Small Scale Spinning Mills an
addition to the spinning and amalgamated mills in the organized sector, of late, great number of
tiny scale spinning mills(the spinning mills having 6000 or less spindles are termed as small scale
spinning mills) have come up, predominantly in Tamil Nadu in and around Coimbatore. There
were 1035 SSI with an installed capacity of 4286451 spindles and 130480 rotors in 2012-13. It
has provided employment to 41122 persons.
Indian Spinning mill occupies a very important place in the economic life of India. The
Indian spinning mill is one of the largest in the world with a massive raw material and textiles
manufacturing base. Our economy is largely dependent on the textile manufacturing and trade in
addition to other major industries. About 27% of the foreign exchange earnings are on account of
export of textiles and clothing alone.
The textiles and clothing sector contributes about 14% to the industrial production and
3% to the gross domestic product of the country. Around 8% of the total excise revenue
collection is contributed by the spinning mill. So much so, the spinning mill accounts for as large
as 21% of the total employment generated in the economy. Around 35 million people are directly
employed in the textile manufacturing activities. Indirect employment including the manpower
engaged in agricultural based raw-material production like cotton and related trade and handling
could be stated to be around another 60 million.

A textile is the largest single industry in India and amongst the biggest in the world,
accounting for about 20% of the total industrial production. It provides direct employment to
around 20 million people. There are 1,227 textile mills with a spinning capacity of about 29
million spindles. While yarn is mostly produced in the mills, fabrics are produced in the power
loom and handloom sectors as well. The Indian spinning mill continues to be predominantly

1
based on cotton, with about 65% of raw materials consumed being cotton. The yearly output of
cotton cloth was about 12.8 billion about 42 billion.

Textile is one of India’s oldest industries and has a formidable presence in the national
economy inasmuch as it contributes to about 14 per cent of manufacturing value-addition,
accounts for around one-third of our gross export earnings and provides gainful employment to
millions of people. They include cotton and jute growers, artisans and weavers who are engaged
in the organized as well as decentralized and household sectors spread across the entire country.
The spinning Industry plays an important role in the country. At present the
contribution of the spinning Industry to GDP is about 4%. Because of the spinning Industry.
Because of the rabid growth get employed in spinning industry in domestic sector apparel
industry is expanded to provide direct employment to 40 million by More than 35 million
people get employment and it is the second largest employment provides in India after
agriculture of this 29 million people get in spinning industry and balanced 6 million in apparel
industrythe year 2010. The size of the spinning and apparel industry is esteemed to be US $ 80
billion comprising US $ 40 billion comprising U S $ 40 billion in domestic of balance in export
by 2010

2
1.1 OBJECTIVES OF THE STUDY

The objectives of the study are divided into two.

Primary Objective

The primary objective of the study is to know the organization structure and the functions of
different department.

Secondary Objectives

▪ To know about the textile industry

▪ To study the structure of the company

▪ The functions of various department

▪ To analyze the strengths weaknesses opportunities and threates of the company

▪ To provide suitable suggestions of the effective functioning of the company

▪ To know the interaction between different departments

1.2 REASON FOR SELECTING COMPANY

Researcher very interested in cotton mill industry. So I have chosen jayavelu spinning
mills ltd which is very near to my place and having good understanding with employees and
management to undergo a study on entire production process and get the practical information
about production and operations that followed by the company.

3
1.3 STUDY PLAN

S.no Date Department Managerial Development

01-12-20 Blow room, Carding, SB2

to PRODUCTION Unilab, comber, Drawing,
10-12-20 simplex, spinning cone winding.
1

11-12-20 Decision to purchase, new

2 to PURCHASE assets raw material and high
16-12-20 quality inputs.
17-12-20 Financial position of the
to ACCOUNTS AND spinning mill balance sheet
21-12-20 trading account and profit and
3 FINANCE
loss account.
22-12-20 Sales operation, Inventory

SALES AND management, Production

to forecasts Control, sales

4 MARKETING
25-12-20 promotion area evaluating the
marketing pulse.

26-12-20 Interpersonal skills, problem

5 to HUMAN RESOURCE solving skill, and conflict
30-12-20 management skill. Study about
recruitment, monetary benefits,
training and promotion.

4
1.4 CHAPTER SCHEME:

▪ The first chapter contains introduction which explains objectives of the study, reason for
selecting company and study plan
▪ The second chapter focus on industry profile of the present study. This chapter also
include the world, national and state scenario of industry.
▪ The third chapter contains company profile which focus on objectives of the company
and development from inception future plans and last 3 years’ performance of the
company.
▪ The fourth chapter provides details about each department like production, HR and
marketing etc.
▪ The fifth chapter contains observations, suggestions and conclusion.

5
 CHAPTER - II

INDUSTRY PROFILE

2.1 WORLD SCENARIO

The U.S. model, includes supply, demand, and market equilibrium for raw fibers (cotton and
man-made) and textile products (cotton and non-cotton). The inclusion of textile models enables
the estimation of cotton and man-made fiber mill use with appropriate linkage between the cotton
and textile sectors. On the U.S. supply side, cotton production is divided into four regions: Delta,
Southeast, West, and Southwest (irrigated and dry land). Regional production is modeled using
separate acreage and yield equations. India planting area and yield is modeled according to four
productive regions as well: South, Central, North, and Others. Data used in this study was
compiled from various sources including the Food and Agricultural Policy Research Institute
(FAPRI) for the historical and projected macro variables (real GDP, exchange rate, population,
and GDP deflator); Production, Supply & Demand (PS&D) database of the Foreign Agricultural
Service (FAS) for cotton acreage, yield, production, mill use, ending stocks, and trade; and the
FAO World Fiber Consumption Survey and Fiber Organon for fiber mill consumption and man-
made fiber statistics.

The world’s four largest cotton producing and consuming countries are china, the United
States, India and Pakistan. Together, these four account for around 60 percent of world
production and consumption. The next three largest consuming countries are Turkey, Brazil, and
Mexico, all of which produce cotton but are often large importers nonetheless. Cotton is mostly a
northern
Hemisphere crop, but about 10 percent of the world’s output comes from south of the
Equatorprimarily Brazil and Australia. Developed countries account for more than 40 percent of
global consumer end-use of cotton end-use is exported from developing countries to other
developed countries. Both production of cotton and its export patterns are distorted very
considerably by subsidies to both as well as by tariffs on cotton, spinning and clothing
imports. Cotton usage, on the other hand, is distributed across countries both production of

6
cotton and its export patterns are distorted very considerably by subsidies to both as well
as by tariffs on cotton, spinning and clothing imports. Cotton usage, on the other hand, is
distributed across countries roughly in proportion to their volumes of spinning production

2.2 NATIONAL SCENARIO

GROWTH OF SPINNING MILLS IN INDIA

The "deindustrialization" of the Indian economy and of India's spinning industries in

particular, is the subject of a major historiographical debate. While some scholars have claimed
that colonial rule permanently undermined indigenous production, others have argued that
handloom weavers were able to adjust to colonial conditions and therefore carved out new niches
for themselves. Hanretty (1991) examines handloom weavers in one part of India, an area that is
now Madhya Pradesh, between 1800 and Indian independence in 1947. Eschewing a simplistic
attachment to either of the two main positions, Hanretty shows that while handloom weavers as a
group faced great competition in the mid-19th century from imported cloths, some specialist
producers were able to cope better than others, mainly because of their production of specialized
products and the security given by they enhanced caste status. The real challenge came in the
20th century as India's own mills subordinated weavers to middlemen as the former became more
dependent on mill-spun yarns.
When the British left India in 1947, the economy was only slightly more industrialized than
when they had taken formal control nearly one hundred years earlier. Wolcott (1997) asks, were
they responsible for the lack of development? Two strains of argument suggest they were. The
first, primarily associated with Amiya Bauchi, faults the British for not giving sufficient
protection to domestic industries.

The independent India was ruled by government backed up different political parties
originated from different schools of thought. those government have made very sincere effort to
put industry on growth path realizing industrialization can defined improved wealth of nation and
same time living standard of the people. Since independent, the government of India enunciated

7
two industrial policy resolution and several industrial licensing policy to give impetus to Indian
industry the prime objectives behind enacting these policies were to provide justice.
After attaining independence on April 1948 the Indian government enunciated its first ever
industrial policy resolution. Its main objectives to increase the wealth maximization of nation
through rapid industrialization and thus raised the national and per caipta income.it also
emphasized the need for acceleration production to meet needs of growing population and
creating more employment opportunities.

A high level delegation global spinning mill industry comprising representative from us
Switzerland Pakistan Brazil and Germany is slated to visit India this month. These delegates are
members of the spinners committee of headquarters. The international textile manufactures
federation a leading international association for world textile industry.

The main objectives of the spinner committee is to support the development of quality
cotton fibers to suit modern spinning requirement and promote mechanical testing of raw cotton.
with a view to taking of Indian cotton scenario the delegates will visit modern farms upgrade
ginning and pressing factories and textile mills in India.

GLOBAL TEXTILE TRADE IN INDIA

The share of India in global textile trade is more than 3 percent. It is predominantly
cotton based while world over the trend is shifting towards Man Made Fibers and blends. In the
total world exports of MMF textiles, the share of India is 3.51 percent as compared to China with
8.35 percent, Japan with 5.75 percent and Indonesia with 7.60 percent. Besides, the unit price
realisation of Indian exports is one of the lowest which is mainly due to low value addition, as
bulk of India’s exports is in the form of yarn, Grey fabrics and low value garments. Though the
majority of the Indian textile machinery in weaving and processing is obsolete, the spinning
sector has been fairly modernised.

8
INDIAN SPINNING INDUSTRY

Indian Spinning Industry has gone from strength to strength since a very long time now as
it was the hub of cotton manufacturing. Cotton is not only consumed to the highest extent in
India but it has also become one of the most profitable textiles in the export industry.
Spinning in India can be classified into 2 categories: medium and long staple. But there was a
shortfall in the 'extra-long' category that continued for many years. There was a massive
downfall in the cotton spinning in India during 2004-2005.

ROLE OF INDIAN SPINNING MILLS

Spinning mills across India would continue production cut till mid-June to use up cotton
yarn inventories of 500 million kg. A week after the `70,000 crore Spinning industry voluntarily
cut its production by 33 percent, there has 35 has been a marginal movement in the stocks that
have remained unsold owing to price volatility. "The industry is in a hand-to-mouth situation.
We have no option but to extend our production cut till the unused stocks find takers," said
chairperson of Confederation of Indian Spinning mill (CITI) and MD of Ginni Filaments, Shishir
Jaipuria. Spinning contributes $10 billion to India's $62 billion textile and clothing sector. Price
volatility of cotton that touched a record of 63 percent high of `62,000 per candy in the 2010-11
crop season and then came crashing at `44,000 per candy, destablised the prices of yarn that
moved from `204 per kg in October to `253 per kg in March and then fell `185 per kg in May.
India produced 3,500 million kg of cotton yarn and maintains a stock enough for 10-15 days.

SHARE IN GROSS DOMESTIC PRODUCT (GDP)

Its importance is underlined by the fact that The Spinning mill accounts for around 4 percent of
Gross Domestic Product, 14 percent of industrial production, 9 percent of excise collections, 18
percent of employment in the industrial sector, and 16 percent of the country’s total exports
earnings. The Spinning sector, which is integrated to the Spinning mill accounts to 22.4 percent of
the total value of the Spinning mill3. GDP has been quite beneficial in the economic life of the
country. The worldwide trade of textiles and clothing has boosted up the GDP of India to a great
extent as this sector has brought in a huge amount of revenue in the country. In the past one year,
there has been a massive upsurge in the spinning mill of India. The industry size has expanded

9
from $37 billion in 2004-05 to $49 billion in 2006-07. During this era, the local market witnessed
a growth of $7 billion, that is, from $23 billion to $30 billion. The export market increased from
$14 billion to $19 billion in the same period.

FOREIGN EXPORTS

The textiles industry accounts for 14 percent of industrial production and accounts for
nearly 12 percent share of the country's total exports basket. The Government fixed the target for
2008-09 at $26.55 billion an increase of 20 percent over the actual performance of $22.14 billion
in 2007-08, for export of textiles. However, no targets were fixed for 2009-10. At present, Indian
spinning mill holds 3.5 to 4 percent share in the total textile production across the globe and 3
percent share in the export production of clothing. USA is known to be the largest purchaser of
Indian textiles.

EXPORT TO MAJOR DESTINATIONS

S.NO. COUNTRY EXPORT %

NAME
1 Bangladesh 13
2 Egypt 07
3 China 06
4 Portugal 05
5 Italy 08
6 Turkey 05
7 Iran 04
8 South Korea 04
9 Others 48
100

2.3 STATE SCENARIO

10
SPINNING MILL IN TAMILNADU

The spinning Mills are the backbone of Tamil Nadu’s industrial development and are
providing massive employment in the State, predominantly spinning oriented. The State spinning
mill has a significant presence in the national economy also. There are 3069 large, medium and
small spinning mills in India, of which, 1889 are located in Tamilnadu. The spinning mills in the
State comprise 18 Cooperative Spinning Mills (5 functioning), 17 National Textile Corporation
Mills (7 functioning) and 1854 Private Mills (including 23 Composite Mills). Those spinning
mills provide employment for around 2.40 lakh persons. The capacity of the spinning mills in the
State is around 18.92 million spindles. The State produces about 1612 million kg. of spun yarn
per year and this is about 40 percent of the spun yarn produced per year in the entire nation.
It also increased from 18.8 percent of the national share (ranked 2) in 1982-83 to 32.2
percent (ranked 1) in 1992-93. In terms of net value added, the corresponding figures were 18.4
percent (ranked 2) and 37.4 percent (ranked 1). Other textile products accounted for 20.3 percent
of the national gross output value (ranked 2) in 1992-93 and 22.3 percent of that year's net value
added (ranked 2). However, in 1995-96, the textile sector as a whole in Tamil Nadu registered a
disturbing negative growth rate. When we look at Tamil Nadu's Textile Sector in 94-95, the total
yarn production in the State was 695 million kgs, fully 33.3 percent of the country's production.
Within this, the production of cotton yarn was 611 million kgs, being 38.5 percent of the
country's output and blended and manmade fibers accounted for 84 million kgs, 16.7 percent of
the national output. This was the output of 617 textile mills (44.2 percent of the country),
comprising 595 spinning mills (52.7 percent) and 22 composite mills (8.2 percent) accounting for
a total of 98.7 lakh spindles (32.5 percent). Included in the spinning mills are 18 co-operative
spinning mills accounting for 4.69 lakh spindles and 34 million kgs of yarn, a quantity sufficient
to meet roughly half the hank yarn requirement of the State. In 1994-95, Tamil Nadu also
produced 187 million metres of cloth, 11 percent of the national production, of which cotton
accounted for 93 million metres (8.4 percent) and blended varieties accounted for 94 million
metre (15.8 percent). This was the output of 7.7 lakh looms, being 5.1 percent of the country's
loomage. Of this, 4.3lakh looms were in the handloom sector and 3.4 lakh in the powerloom and
composite mill sectors.

11
Need for a State Textile Policy, the country's textile policy was last specified through the Textile
Policy Statement of June 1985. Prior to this, the development of the spinning mill was guided by
policy announcements in March 1981 and August 1978. The stated objective of the textile policy
of 1985 was an increase in production of cloth of acceptable quality at reasonable prices to meet
the clothing requirements of growing population. In pursuit of this objective, the employment
and export potential of the industry were also to be kept in view.

The national policy is a broad statement and covers every aspect of the spinning mill.

However, in order to cater to the specific needs of individual states, there is a felt need for a State
Level Policy. The spinning mill continues to play a vital socio-economic role in Tamil Nadu.
Hence, the need for a dynamic, growth oriented policy is all the more important. The objective of
the State Textile Policy will be to produce textiles to cater satisfactorily to the quantity, quality
and price requirements of both domestic and international markets, keeping in view the industry's
potential for employment. Until last year, spinning mills in Tamil Nadu were running round the
clock and were busy expanding their operational capacities. Textile mill in Coimbatore districts
plays a predominant part of the industry in South India.

Presently, a major part of the spinning mills which involves in manufacturing yarn remains idle.
Several units are closing down, putting the jobs of thousands of the workers into jeopardy and
many others have not received their wages for months. 392 mills were closed during the previous
year leaving more than 2 lakh workers jobless. Saddled with recession, the industry is tumbling
down facing a steep fall in the export orders, especially from the South East Asian markets. The
economic liberalization, which was believed to be the pivot of Coimbatore spinning mills’
success, is now being blamed as a reason for the industrial turmoil.

The corresponding period during the previous year was a busy period for the spinning
mills in South India. The spindle capacity was doubled with 40 percent additional capacity. All
these efforts have gone with the wind, with the advent of global recession and power crisis. The
fiscal year 2008-09 is one of the most difficult periods in the history of textile mills in South
India. Cotton yarn production is already down by 20 percent during the last fiscal year.
Production which was 4003.44 million kg during 2007-08 dropped to 3239.17 million kg during
the last year. Profile of spinning mill in Tamil Nadu is given in table

12
 PROFILE OF SPINNING MILL IN TAMIL NADU

ITEM
2.4
ALL INDIA TAMILNADU
SPINNING FUTURE
SECTOR
No. of Spinning 3069 1889
Mills
Workers (in lakh) 8.94 2.40
Spindles (in 39.27 18.92
Million)
POWERLOOM
SECTOR
Powerlooms (in 19.03 3.66
lakhs)
Workers (in lakhs) 47.57 9.14
HANDLOOM
SECTOR
Handlooms (in 34.86 4.13
lakhs)
Weavers (in lakhs) 65.50 6.08
Handloom Cloth 6.00 0.70
Production(Bn. Sq.
Mt)
Value(` in Crore) 18000 1700
OTHER SECTOR
Power processing 2510 985
Units
Hand Processing 10397 2614
Units

OUTLOOK

▪ Reduce cost of production

13
▪ Sell improved quality cost efficient products.
▪ Focus more on export of cost efficient cotton yarns and less on promotional activities.
▪ Upgrading the present quality of products to international quality standards.Instant
decision making in certain procurement activities.
▪ Timely introduction and implementation of market driven decisions.
▪ Cost behavior analysis of spinning industry in India.
▪ Cost model analysis of spinning industry in India.
▪ Financial Efficiency of textile industry with macro level.
▪ Sector Wise Performance Appraisal of spinning industry.

14
 CHAPTER-III

COMPANY PROFILE

3.1 INTRODUCTION OF JAYAVELU SPINNING MILLS (p) LTD LIMITED

,Jayavelu Spinning Mills Private Limited has made a name for itself in the list of
top suppliers of in India. The supplier company is located in Aruppukkottai, Tamil Nadu
and is one of the leading sellers of listed products.

Jayavelu Spinning Mills Private Limited is listed in Trade India's list of verified sellers
offering supreme quality of etc. Buy in bulk from us for the best quality products and
service.

The Company has been continuously expanding its manufacturing capacities by adding
71424 spindles during past five years through internal accruals, promoters funding and
loans from banks/ financial institutions.

The Company has three spinning units in the state of Tamilnadu located at Devakotai,
Dist. Toothukudi; Palani, Dist. Dindigul and Coimbatore making a total of 71424
spindles as a whole. The Company also does the yarn manufacturing on lease or
exclusive jobwork basis. Presently the combined capacity of the company is 140,000
spindles.

The Company manufactures and sells Polyester and Cotton blended yarn at a competitive
price to cater to the domestic markets. It has over the years built and maintained long-
term relationship with customers on account of its group presence. The company has
realized the net sales of Rs 40,060.87 lakhs in 2011-12 and net profit is Rs 754.74 lakhs.
The net sale in FY 2010-11 is Rs 23,392.85 lakhs and net profit is Rs 116.84 lakhs. The
growth of the Company in 2011-12 is 42 % as compared with previous year.

15
In view to increase the volumes; PTL has planned the addition of 34,000 spindles in its
volumes in existing unit no.2 at a total investment of Rs. 64.15 Crores. The same will be
highly beneficial for the company as it will increase the capacity of the mills and reduce
its overall cost of production simultaneously.

The company can install the same into its existing infrastructure and does not need to
procure any land or construct any building for the same. The entire infrastructure for the
expansion is already in place as the unit previously had installed capacity of 51,000
spindles. There is also surplus capacity in the manufacturing process and therefore the
company is able to add capacity at a low cost of Rs. 18,870/- per spindle.

Knowing the strong foothold of this region in spinning and textiles, currently the main
focus of the company is to increase the volumes. This will increase overall profitability
of the company because of increase in volumes and reducing the production cost.

The investment proposal towards addition of 34,000 spindles in existing unit no.2 is Rs.
64.15 Crores. The company plans to achieve the expansion plan partly by way of
infusion of equity capital, internal accruals, and partly by way of debt.

The promoter’s contribution is Rs 25.65 Crores and term loan sought from the bank is
Rs 38.50 Crores. Henceforth the study is undertaken to determine the Technical,
Economical and Financial viability and feasibility of the proposed addition of 34,000
spindles in its existing unit.

3.2 OBJECTIVES OF THE COMPANY

The Corporate office of the group is located at. Mumbai. The Group has an
existing marketing and sales network established over many years of presence in the
Yarn Industry. The Group enjoys tremendous market confidence and has an extensive

16
 network spanning many states such as Rajasthan, Gujarat, Maharashtra, Madhya
Pradesh and Tamil Nadu areas.

The Group is presently selling yarn of manufacturing capacity 140,000 spindles and can
easily add the increased capacity into its existing network.The major markets are located
at Bhiwandi, Malegaon, Ichalkaranji in Maharashtra, Tirupur, Erode etc. in Tamil Nadu.
Bhilwara in Rajasthan, Surat, Ahmedabad in Gujarat, Burhanpur in Madhya Pradesh,
and PTL sells the blended yarn in the same market.

The orders are collected through phone and personal meetings. PTL sells the yarn to
domestic market only.

3.3 ORGANIZATIONAL STRUCTURE

17
 MANAGING DIRECTOR

OFFICE MANAGER FACTORY MANAGER

ACCOUNTS PURCHASE SALES OFFICE ADMIN

QUALITY PERSONEL STORES PRODUCTION

CONTROL

STORE KEEPER
MAINTAINERS

SPINNING
SUPERVISOR
FILTTERS

JOBBERS

. SIDERS (WORKERS)
.

18
3.4 DIFFERENT PHASE OF DEVELOPMENT

PTL also does the yarn manufacturing on lease or exclusive job-work basis.
The Company manufactures and sells blended yarn. The total yarn manufactured
inhouse and from job work in FY 2017-18 is approx. 21,000 MT.

Jayavelu spinning mills Limited (Previously Known as Neha Furnishings Limited) is

a company incorporated under the Companies Act 1956 in year September 1993 in the
State of Maharashtra with Corporate identity No. U17120MH1993PTC073419.

Jayavelu spinning mills Limited (PTL) has its entire yarn manufacturing capacity
located in the state of Tamil Nadu. They have purchased the assets of three spinning
mills in the state of Tamilnadu. The table presents the location of spinning units owned
by the The company proposes the addition of 34,000 spindles in the existing unit 2
which already have surplus capacity in terms of land and building. The Unit 2 of the
company already has sufficient infrastructure to carry out expansion activity. The
existing buildings will provide the company an opportunity to add 34,000 spindles for
increase production capacities.

The company will procure the used machinery after a thorough inspection in order to
ensure the value of the machine as well as the lifespan. As the textile machines in the
spinning industry have a very long life span only machines having a good certified
residual life will be purchased.

This investment will increase the manufacturing capacity of the units by about 34,000
spindles resulting in a tremendous boost in profitability and manufacturing capacity. The
Unit will also reduce the per Kg cost of production by Rs. 10/Kg. The saving in
manufacturing cost alone will be sufficient to repay the interest and principal payments
of the fresh term loan required by the company. The company will additionally generate
profits from the increased production capacity. The machines procured will also reduce
the labour requirement of the unit thereby increase profitability.

19
 3.5 FUTURE PLANS OF THE COMPANY

 PTL’s main focus is to increase the spinning capacity. The same will be highly
beneficial for the company as it will increase the capacity of the mills and reduce
its overall cost of production simultaneously.

 To achieve the purpose, PTL has planned the addition of 34,000 spindles in its
volumes in existing unit no.2 at a total investment of Rs. 64.15 Crores. The
promoter’s contribution is Rs 25.65 Crores and term loan sought from the bank is
Rs 38.50 Crores

 The company proposes to do the expansion in the existing unit 2 which already
have surplus capacity in terms of land and building. The Unit 2 of the company
already has sufficient infrastructure to carry out expansion activity. The existing
buildings will provide the company an opportunity to add 34,000 spindles for
increase production capacities.

 PTL plans to purchase and install the process machines required for capacity
expansion which are 5-15 years used one.

 The duration for the addition of 34,000 spindles is 12 months.

3.6 PERFORMANCE DETAIL OF THE COMPANY

The table presents the performance of the Group

(Rs in lakhs)

20
 Particulars FY 2015-16 FY 2016-17 FY 2017-18

Net Sales 14,485.78 23,392.85 40,060.87

Cost of production 13,922.70 22,687.12 38,058.30

Operational Profit 145.72 188.61 1,092.24

EBIDTA 145.72 188.61 1,092.24

Net profit 112.67 116.84 754.74

Net Worth 928 1769 4044

Remarks

Note 1: FY 2017-18 was the first full year of operations for all the units of the company.

The net sales increased in this year is because of increasing the manufacturing capacity

CHAPTER- IV

DEPARTMENT DETAILS

21
4.1. PRODUCTION DEPARTMENT

Production department is the most important part of this organization. Here production is carried
out in required quality at minimum cost. The production department in coordination with the
marketing divisions does managing and controlling of the production process. Customer
requirement in terms of quality, quantity, delivery, packaging are obtained an analyzed as per the
sales contract from the export division.
Production capacity

GTN have 165000 Spindles Capacity, consisting of 30000 Compact spindles and 135000
Ring Spinning in addition process like twisting Gassing, Dye package winding, Knitting etc. in-
house in order to server different customer’s requirements effectively.

Product

The reason for success in this competitive environment I that all the products are
customized and are produced on a ‘made to order bases’

GTN’s Product Range

GTN group manufacture 100% cotton yarn/ knitted fabrics:

▪ Yarn of count 30’s to 140’s

▪ Two for one twisted & Ring double
▪ Knitting & Weaving yarn
▪ Gassed yarn
▪ Gassed and processed knitted yarn
▪ Knitted garments

Main counts

Over 90% of products are fine and superfine 100% yarns carded and combed with counts ranging
from 30s to 140s, both single and multi-fold, as well as gassed, suitable for knitting and weaving.

Flow chart of production process

22
 Bale Opening Mixing Blow Room

Drawing Combing Carding

Ring Spinning Automatic Cone Doubling

Winding

Conditional Yarn Singeing Waxing

Packaging

Production process

The production process is mainly going through five stages:

1) Bale opening: In this process cotton are opened, foreign matters are segregated and
processed in the bale- opening machine. From this process, cotton is subject to maximum.

2) Mixing: Here different varieties of cotton are blended in define proportion. The objective
of blending different varieties of cotton is to spin the required yarn economically. Unimix
is the machine that is used to mix the cotton and to convert in to chute.

Stack mixing is the best way of doing the mixing compared to using automatic bale
openers which picks up the material from 40-70 bales depending on the length of the
machine and bale size, provided stack mixing is done perfectly. Improper stack mixing

23
 will lead to shade variation problem, stack mixing with bale opener takes care of short
term blending and two mixers in series take care of long term blending.

3) Blow Room: In this, the mixed cotton is opened, cleaned and made in to a continuous
sheet in the wound from. This product is called Blow Room Lap.

4) Carding: In carding operation, the Blow Room Lap material is cleaned, fibers are made
parallel and then wastes are extracted from fibers and assemble in to a continuous stand.
This stand is called card Sliver. This silver are coiled and stored in cans. There are two
rules of carding.

 The fibre must enter the carding machine, be efficiently carded and taken from it in as
little time as possible.

 The fiber must be under supervision from entry to exit.

The purpose of carding:-

▪ To open the flocks individual fibers.

▪ Cleaning or elimination of impurities.

▪ Elimination of dust.

▪ Elimination of short fibers

▪ Fiber blending

▪ Fiber orientation or alignment

▪ Sliver formation

5) Combing: The carded sliver is then prepared for combing in Sliver Lap and Ribbon Lap
machines. The product thus prepared is called Ribbon Lap. This Ribbon Lap are then fed
to comber machine. In comber, the short fibers and minute impurities are removed and the
fibers are made parallel and assembled in fro of sliver.

24
6) Drawing: In drawing process, s definite number of combed sliver is doubled and drawn
together to make the resulting sliver more even and parallelized fibers. The sliver is stored
in cans in coiled form.

7) Simplex: The object of simples or speed frame process is to attenuate the drawn sliver into
a finer strand, twist and wind it on a plastic tube this product is called Roving.

8) Spinning: In ring spinning process the roving is attenuated with the help of drafting
system and the drafted fibers strand is twisted and wound on a tube. The twisting and
winding operations are performed with the help of Ring Traveler and spindle. The yarn
count s also set at this stage. The arrangement is being progress to sin the latest form of
compact yarn by the employment of Elite and Com4 machines.

9) Automatic Cone Winding: In the automatic cone winding process, yarn from the ring
frame cops passed through electronic yarn cleaners to detect and remove objectionable
fault in the yarn. The yarn ends are joined with the splicing provision. A definite length of
yarn will be wounded on ones. Waxing can also be done in this process.

10) Doubling: In doubling process, two or more single yarns are twisted together. This
consists of two processors- assembly winding and twisting. In assembly winding the
required number of single yarns of definite length is wound in parallel to a single package.
Twisting may be carried out either with Ring Doubling machine or two- for one twister.

11) Conventional winding: In conventional winding a definite length yarn is wounded on

ones. During winding yarn is passed through electronic yarn cleaner to detect and remove
objectionable yarn fault waxing also can be done in this process.

12) Singeing: In singeing process yarn is passed through a flame at high speed to remove the
protruding fibres. The object of singeing is to make the yarn lustrous, which can be used
for some special end uses. The flame and speed of the should be constant as ay change can
cause damage to the yarn.

13) Conditional yarn: Apart from gassed yarn conditional yarn is also produced. According
to the customer requirement the yarn is conditioned in a conditioning machine. The yarn
conditioned for half n hour in specific temperature and moisture. The time limit is

25
 imported as over conditioning may lead to absorption of moisture by the yarn and hence
may result in poor quality.

14) Precision Winding:- In this process yarn is passed through a special type of tension
assembly to get the package more softly so as to get the dye package directly. The softness
can be increased or decreased as per the requirement.

Organization structure- Production Department

Senior Manager

Manager

Assistant Assistant Assistant Assistant

Manager Manager Manager Manager
Production -1 Production -2 Production -3 Production -4

Officers Officers Officers Officers

Supervisors Supervisors Supervisors Supervisors

Workers Workers Workers Workers

4.2 PURCHASE DEPARTMENT PURCHASE ORDER MATERIAL

Stores department is the department whose main service is maintaining several types of
inventories. Also it functions as maintenance of materials, spare parts and general store as

26
required. Purchase is made with reputed companies who offer good quality of products at
reasonable cost.
Functions:

▪ Storing of purchased raw material

▪ Issuing reorder level

▪ Material inspection

▪ Listing and selling of scrap

Procedure

 Storing of raw material

It is the duty of the stores department to store the purchased raw material. All the
purchase are made online. SAP is the software used for this purpose. The purchases are made
through quotations for a period of six months. Quotations are received from dealers who provide
maximum discount.

Mainly 3 type of material are purchased and stored.

▪ Mill stores: this inculds spear parts, bearings, consumable goods etc.
▪ Packing goods: These include material which is used for packing.
▪ Utility item: This include engineering items, electric items etc.

All purchases are made within the limit of 8-12 days and on the same day itself it is fed into the
computer.

 Issuing Re Order Level

All the purchase and issue of raw materials are entered in the computer and computer will show
the re order level.

 First release

The requirement of each department is listed out by the respective department staff. This
list is then sent to the department head.

 Second release

The list prepared b the department is approved by the department head and then sent to the
vice- chairman.

 Order Placement

27
 After the second release, the requirement list is sent to the stores department, where the
order is placed. The description and quality of the product is specified in the order form.

 Order release

The store manager places the order with the suppliers and is knows as order release. The re
order time and lead time is estimated with the help of past record. Tax free goods are
specified

 Order acceptance

The order acceptance is the receipt of goods ordered. The quality of the item is checked by
the stores department.

 Material Inspection

The quality of the items delivered by the suppliers is inspected by the investigation in the quality
assurance department. Then the materaisl are issued to the respective departments. The purchase
entry is also made during this time. The items received by the stores department are stocked in the
stores.

Monthly reports are generated. Consumption reports are generated to find out the consumption
rate. The reports are alsso used to tally the physical stock with consumption.

 Listing and selling of scrap

The scrap materials are listed out once in every six months. A call for quotation is made to find
the best price that can be obtained for scarp. ABC analysis is used for regular items, which
directly affect the quality like packaging materials and machinery spares.

Organization structure- stores Department

Stores Manager

28
 Supervisor

Worker

4.3 ACCOUNTS AND FINANCE DEPARTMENT

This department has to raise necessary funds, mange them, prepare finance budgets and
administer its working capital. The department functions on public issue of capital, maintains
records for helping the finance manager access the appropriateness of capital structure. It
provides data for the preparation of budget and various financial statements. The accounting
function of the department includes the preparation of trial balance on a yearly basis. They also
prepare managerial reports regarding expenditure of travelling, postal telephone and courier
transactions.

Functions of Finance Department

The company maintains a clear and perfect accounting system. The main activity of the
finance department is working capital management. Preparation of fund flow statement, cash flow
statement, balance sheet, profit and loss accounts are also the activities of finance department.
Secretarial work relating to board comes under the finance department. Most the activities carried
out by the finance department are preparing to long term and short term requirement of the
operation, closing purchase bill, maintaining the account contractors, subcontractors, income tax,
deduction, salary discrepancy, dealing with the financial institutions with import and exports.

Maintaining Books of Accounts like,

a. Purchase Records

29
 The finance department of the company keeps the account of raw material and
accounting entries are made in the books of accounts of the company. The department analyses
the details of purchase afterwards.

b. Salary accounts

The main function of the department is preparation and disbursement of salary of

officers, office staff and workers. The department keeps salary register pertaining to each of the
above said person and facilities charges in salary due to granting of annul increment and
deduction from the salary. The department is maintaining sub ledgers for deduction made in the
salary such as PF, insurance premium advance and income tax. Another important function is
computation of income tax.

c. Sales and Revenue Accounts

The department functions on calculation of paying sales tax and central excise duty to
the concerned government every year, provision for current tax is made on the basis estimated
taxable income for the current accounting year in accordance with income tax 1961.

d. Cash and bank accounts

The department does all the matters relating to the day to day cash transactions. They
receive and make payment for purchase and sales.

e. Cost sheet

Annual budget and cost sheet is prepared at the outset of every year and the company is
following Process costing method. It helps the company to ascertain the cost of a product at each
stage of the production, i.e., cost at each process through which the raw cotton passes through for
the production of fine years. The total incurred at each stage of production is carried out to
ascertain the final cost. The pricing policy adopted by Jayavelu spinning mills is Cost plus-
pricing and hence a certain percentage of the profit is added to the final cost incurred.

f. Depreciation

30
 Department has been provided at the rates and in the manner prescribed in Schedule
XIV to the Companies act 1956. Plant and machinery and electrical installation have been, on
technical assessment, considered as continuous process.

Accounting system

 The financial statements are prepared on historical cost and convention.

 All fixed assets are states at cot adjusted by revaluation in case of certain land, building,
land and machinery and electrical installation, less accumulated depreciation.

 Long term investments are stated at cost less provision

 Values of fixed assets are devalued by technicians

 Valuation of investment is done at cost.

 Depreciation is done as per the company’s act 1956.

Management of Payables and Receivables:

As 90% of the sales are as exports, it takes place with the support of letter of credit or
bank guarantee. Therefore, management of payables and receivables has not been a problem for
the company. In this total amount, 50% of the total amount is written off as bad depts. Likewise
80% of the raw cotton purchased is imported. So L/C is made us here too. Local purchase is made
by the company for a credit period of 30 to 90 days. The company claims to have an efficient
management of both payables as well as receivables.

Accounting Policies:

Basis of presentation:

The financial statements have been prepared to comply with the mandatory Accounting
Standards issued by the Institute of Charted Accountants of India and the relevant provisions of

31
the Company’s Act 1956. The financial statements have been prepared under the historical cost
convention, 0 the basis of a going concern, on accrual basis.

Use of Estimates:

The preparation of financial statements requires Management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the de of financial statements and reported amounts of revenue and
expense of that year. Actual result could differ from these estimates. Any revision accounting
estimates is recognized prospectively in current and future periods.

Fixed assets:

i. All fixed assets are stated at cost less accumulated depreciation. Expenditure during
construction period in respect of new project/ expansion is allotted to the respective fixed
assets on their being ready for commercial use. Also refer Policy G and J below.

ii. Impairment of assets the company assesses at each Balance sheet data whether there is any
indication that any asset may be impaired. If any such indication exists, the carrying value
of such assets is reduced to recoverable amount and the impairment loss is charged to
Profit and Loss account. If at the Balance sheet data there is any deduction that’s
previously assessed impairment loss on longer exists, then such loss is reversed and the
asset is restated to that effect.

Investments:

Long term investments are stated at cost les provision, if any, for other than temporary
diminution in the value of investments.

Inventories:

Inventories are valued at lower of cost or net reliable value. Cost of Raw Materials is
computed by using “Specific identification” method and for other inventories “Weighted
Average” method. The cost includes costs of purchase, cost of convention and other costs
incurred in bringing the inventories to their present location and condition.

32
Sales:

Sales are recognized as and when risks and rewards of ownership are passed on to the
buyer and ultimate realization of price is reasonable certain. Export sales are inclusive of deemed
exports while local sales a re net of sales Tax/ VAT.

Borrowing Cost:

Borrowing Cost attributable to acquisition and construction of qualifying assets are

capitalized as a part of the cost of such asset up to the date when such asset is ready for its
intended use. Other borrowing costs are charged to profit and Loss Account.

Employee benefit:

Short ‘Term employee benefits including accrued liability for leave Encashment (other
than termination benefits) which are payable within 12 months after the end of the period in
which the employee render service are paid/ provided during the year as per the Rules of the
company.

Foreign currency transactions:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of
transactions. Foreign currency assets and liabilities are stated at the rate of exchange prevailing at
the year- end and resultant gains/ losses are recognized over the life of the contacts. In
accordance, with the AS-11 (revised 2003) the exchange difference arising on the contacts/
transactions enters into on or after 01-04-2004 on the settlement of monetary items or on reporting
monetary items at rates different from those at which they were initially recorded during the
period, or reported in previous financial statements, is recognized as income or expenses in the
period in which they arise.

Taxation:

Income tax expense comprises current tax and fringe benefit tax (i.e. amount of tax for the
period determined in accordance with the Income Tax Law) and deferred tax charge or credit
reflecting the tax effects of timing difference between accounting income and taxable income for
the year). Deferred tax charge or credit and the corresponding deferred tax liabilities or assets are

33
recognized using the tax rates that have been enacted or substantively enacted by the balance
sheet date. Deferred tax assets are recognized only if there is a virtual certainly of realization of
such assets. Deferred tax assets are reviewedat each balance sheet date and written up to reflect
the amount that is reasonably I virtually certain as the case may be to be realized. Tax credit is
recognized in respect of Minimum Alternative Tax (MAT) as per the provisions of section
IISJAA of the Income Tax Act, 1961 based on evidence that the company will pay normal income
tax within the statutory time frame and is reviewed at each balance sheet date.

Costing and pricing:

As Jayavelu spinning mills Limited is a manufacturing concern and involves a large

number of processes, process costing method is followed. It helps the company ascertain the cost
of a product at each stage of production, i.e. cost at each process through which the row cotton
passes through for the production of fine yarn. The total cost incurred at the each stage of
production is carried out to ascertain the final cost. The pricing method adopted by the GTN
Textile is cost- plus- pricing and hence a certain percentage of the profit is added to the final cost
incurred.

Budget and budgetary control:

Budgets are prepared by this department on a quarterly basis and based in this the annual
budgets are prepared. The budgets can be sales budget, production budget, expenses budget and
the total budget. At the month end, a comparison is made between budgets and actual right from
the raw cotton procurement till the last process. The reasons for variations (if any) will be found
out.

34
Organization structure- finance Department

Manager

Assistant Manager Assistant Manager Assistant

Accounting Taxation Manager
Costing

Officers Officers Officers

35
4.4 SALES AND MARKETING DEPARTMENT

4.4.1 SALES DEPARTMENT

Sales are activity involved in selling the product sales are the most important part of
every business. It means the goods are transferred for money. The price of finished products are
determined by managing director. The sale manager sellout product through the broker
commission agent etc. sales are made at various place in India like that Kolkatta Mumbai.

The sales are made at regular intervals. The goods are sent by railway and roadways. The
yarn made to sold to old as well as new customer. The cash discount is made to buyer who buy
for large amount cash and credit cash sale. Credit sale means selling the goods under the credit
basis. Credit sale are normally allowed only to the normal buyer. Credit sale is made only when
there is a sufficient capital to run business.
FUNCTION OF SALE DEPARTMENT

▪ Commitment of employee
▪ Dedication of employee
▪ Determination of work
▪ Best management system
▪ Achieve target
▪ Improve efficiency.

36
CHANNEL OF DISTRIBUTION

TRUE VALUE TEXTILE MILL

↓

WHOLESALER
↓

RETAILER

↓
CUSTOMER

SALES TAX

Sales of cotton mill subjected to sale tax. So every mill should registered under sale tax
act. The auditor should ensure that proper record of sale tax as required by sales tax act are
maintained by company and sale tax returns are submitted in time. Sales department considered
to Get sale conformation letter and sale contract letter.

In this letters are maintained to address count price quality delivery. Yarns are made to sold
through agent. It considered payment under 35 days. These agent will get a commission one or
two percentage. Every payment considered the GST no and income tax an number.

37
SALES PROMOTION

Sales promotion plays an important role for the cotton products sales promotion influences
the customers for buying the product and also helps to reduce competition; it popularizes the
product so as to stimulate demand.

SALES PROMOTION TOOLS USED ARE

CONSUMER PROMOTION
 COUPONS
 DEMONSTRATION
 CONTEST
 PRICE OFFER
DEALERS PROMOTION
 SALES CONTEST
 DEALERS GIFT
 TURNOVER ALLOWANCES.
4.4.2 MARKETING DEPARTMENT

The American marketing association (AMA) defines marketing as “the performance of

the business activity which directs the flow of goods and services from the producer to the
consumer to user.According to Philip Kotler marketing is defined as “human activity directed at
satisfying the needs and wants through exchange involve sellers, searching buyers, satisfying
their want and making relevant product promoting and strong transporting and functional area of
business for the flow of the goods and services from the producer to the consumer it helps to plan
and develop products on the basis of known consumer needs.

After production the product are being sold in the market according the orders taken by
the marketing department. The marketing department studies the market and the target consumer
and decides the best way to reach their customers, and works with the rest of the company to
help determine the new product needs of the market. The company does continue market
research which helps them in planning and executing the new marketing strategies for the future

38
course of action also helps the company to analyze the buyer habits, popularity of product and
effectiveness of the advertisement media. It also helps in collecting information regarding
marketing problems and opportunities.

STRUCTURE OF MARKETING DEPARTMENT

DEPARMENT HEADS

EXECUTIVES

JUNIOR EXECUTIVES

MAIN FUNCTIONS OF MARKETING MANAGER

 Sales operation

 Inventory management

 Production forecasts

 Control of sales

 Evaluating the marketing pulse

 Tailoring promotion plans and activities

 Monitoring delivery performance of distributors

39
 THE MARKETING TECHNIQUES USED ARE

 Channels distribution

 Sales promotion

 Advertising  Market research.

MARKETING STRATEGY

Action or business of promoting and selling product or service including market

research and advertising.it is the management process through which goods and service move
from concept to the customer.it include coordination of 4 element

 Product

 Price

 Place

 Promotion.

The area of marketing planning involves foreign a plan for marketing activities.
Marketing plan can also pertain to specific product as well as to organization overall marketing
strategy.it mainly considered customer focus, product focus, product life cycle.

FUNCTION OF MARKETING DEPARMENT

▪ MARKETING STRATEGY
▪ PRODUCT PLANNING AND DEVELOPMENT
▪ PRICING STRATEGY
▪ DISTRIBUTION STRATEGY
▪ PROMOTION STRATEGY.

40
MARKETING LABOUR OFFICE

MARKETING MANAGER

ASS MARKETING MANAGER

↓
EXPORT SALE DISPATCH
OFFICER ← PROMOTION OFFICER → OFFICER

↓ ↓ ↓

STAFF STAFF STAFF

MARKETING OPERATION

Marketing department always plays a key role in success of any organization. Marketing
team is considered as set of factor who nourishes through getting continue order. They are
responsible for negotiating buyer developing and getting approval about lab dips fabric and
samples from the buyer and forward buyer requirement specification production planning
department .So that an order can get delivered on time with all specialization and quality
parameter requirement by buyer. SSM is one of the few loading finish fabric producer in
Pakistan. Most of the finish fabric exported to different countries in which include America and
European countries.

41
MARKETING STRATEGY INCLUDE

▪ Meeting with buyer

▪ Company profile
▪ Buyer visit
▪ Free sample
▪ Contact with agent
4.5 HR DEPARTMENT

Personnel Department plays a crucial role in the management of the company. The
department try to create and utilize an able and motivated workforce to accomplish the
organizational goal, and try to satisfy individual and group needs by providing adequate and
equitable wages and incentives, employee, benefit and social security and measures for
challenging work prestige, recognition security, status etc.

The personal department is responsible for recruitment, selection, placemen training

performance, appraisal, promotion and separation. This department is headed by DGM (industrial
relations). He is in charge of implementation systematic recruitment procedures for providing
facility for the overall development and motivation of all the employees. He is also in charge of
ensuring safety aspect in the mill and maintaining cordials industrial relation with the workers.
The categories of workers employees in GTN are permanent and temporary. The recruitment,
employment, leave disciplinary actions, retirement etc. are done as per the standing order. This
department is also responsible for training, performance appraisal compensation and separation.

Work staffs

The company works round the clock in three shifts

1st shift : 8 am- 4 pm

2nd shift : 4pm- 12 pm

3rd shift : 12pm- 8am

Staff shift : 9 am- 5.30 pm

Employees : 721

42
 Staff : 109

For each shift there would be 3 supervisors: 1 shift in charge and supervisors.

Functions of personal department

 Recruitment and selection

 Induction training procedure

 Training

 Evaluation

 Performance appraisal

 Wage and salary Administration

 Recruitment and selection

GTN textile Ltd recruits its manpower resources through recruitment agencies and
advertisement in leading newspapers. The other sources are form reference service and relatives
of employees and from apprentices. Recruitment is done b the G.M. of personnel and industrial
Relation Department. At GTN textile selection is done through tests and interview.

 Induction Training Procedure

Technical and non technical fresh recruits are given general exposure to the overall activities
of the organization during initial days. There after they are given in depth training in assigned
areas of work followed by on the job training.

Work men fresh recruits are given general exposure to the overall activities of the
organization. They are on the job training under the supervision of the jobber/ mastery, guided by
supervisors or deputy Manger (training).

Introduction Program

43
Induction Report
 Training

On the Off the

Job Job

 Training

Training is given to all workers for developing their skills and proficiency in work. The
probationary period for also workers and office staff is six months. A formal induction training
program is provided for fresh recruits as per the program given in the induction training manual.
Also training is given to each worker when a new machine is installed respective to their
department.

 Evaluation

On completion of training an evaluation regarding effectiveness of training received is

sought from the department concerned”.

 Performance Appraisal

Performance appraisal is systematic evaluation of the capacity for development. It is

usually done by the supervisors at GTN. Check list method is used for personnel evaluation. It
helps the superior or the manager to judge the honesty, sincerity, loyalty and responsibility of the
employees. It is usually done in the duration of six months. The performance of each of the
workers, their strengths, merits, weakness etc. is discussed in detail with them and these are

44
considered for their promotion. However at the managerial level, the through maintains the
performance appraisal system, does not discuss with the officers. It is not carried out in a
transparent manner.

 Wage and Salary Administration

GTN follows time rate wage system. For this purpose the attendance records are
maintained strictly also there is card punching system for recording entry and exit of the
employees and workers. The remuneration for the work of service rented by the employees is paid
in the form of salaries, wages or fringe benefit. Wages include both monetary benefits and non
monetary benefits. The employees pay/ wage includes basic pay, DT, TA, HRA, LTC, PF and ESI
for 26 days. A certain percentage of annual earning is distributed as bonus/ of the total pay 12 %
is for PF and 1.75% is for ESI. Over time work is also paid at the rate of 1.75 times that of a
normal day’s pay. There is no PF and ESI for over time and holiday work.

Employee welfare schemes

The company provides all the statutory welfare measure as per the factory’s act 1948.
There are general measures and the company also administers activities that come under non-
statutory items.

 Employee co-operative society

There is an employee co-operative consumer stores to cater the requirement of provisions

stationary and textile articles. They also arrange for supple of household appliances like TV, Two
wheeler, sewing machines et coin installment basis

 Employee credit society

GTN Textile employees credit society advanced loans to the employees ranging from Rs.
2000/- to 25000/- for various purposes on a reduced rate of interest. They also run recurring
deposit schemes for the employees.

 Silver Jubilee educational Assistance

45
 Under the sliver jubilee educational assistance scheme, employees can avail benefits up to
2 children towards their educational expenses, it ranges form Rs. 600/- up to VII std. student, RS.
2500/- to medical/ engineering students per year

 Marriage assistance

Interest free loans of Rs. 10000/- are being given to the employees in the event of marriage
of their daughter.

 Insurance linked gratuity scheme

The company has adopted insurance liked gratuity scheme for the benefit of the
employees. Under the scheme, in case of death of an employee, his dependents will be eligible
to receive full gratuity for the total calculated period of service including the balance of years of
service after death.

 Holidays

Each employee can avail 13 paid holidays in a calculating year. List of holidays will be
notified each year.

 Canteen

A subsidized canteen managed by the employee representatives is taken care of catering

needs of the employees. Meals, snacks, coffee/ tea are available in the canteen during the
prescribed timings.

 Quality Circles

Quality circle activities are being organized in Aluva Unit with the effective participation
of the employees.

 Safety

46
 Safety, housekeeping activities are arrived out on a continuous basis. A part from the
statutory compliance; a safety committee is effectively working.

Jayavelu spinning mills employee welfare fund

There is fund constituted for the welfare of the employees. There are different benefits like
death benefit, retirement benefit, disablement benefit, loans assistance, etc. contemplated under
the scheme

 Assistance for the handicapped children

There is a scheme to assist the handicapped children of employees; this includes supply of
artificial limbs, aids or any other assistance to such cases.

 Blood Donor Group

Blood Group of almost all employees has been ascertained. In case of emergency,
employees will come forward to donate blood.

 Suggestion scheme

The company conducts suggestion scheme in the areas of productivity, housekeeping,

quality, safety, etc. employees who submit suggestions are being properly rewarded

 Attendance award

To recognize the employees to attend word regularly special prices given every year.

 Membership in professional bodies

The company has membership in various professional bodies tamil nadu

state productivity Council Etc.

 Subscription to News Paper and Journals

Various News papers and journals are being subscribed for the benefit of employees

47
  Anti addiction program

The company provides all assistance to employees who wish to come out form their
addiction habit.

 Worker Education through worker

In association with central board of workers education, employees are given classes in
batches for a period of 2-3 months on various subjects. There are trained worker teacher who take
such classes.

 Standing orders

There is an approved standing order, which regulates the conditions of employment

 Excursion tours

Excursion tours are arranged regularly for the staff member and for the participation the
workers education classes

 Twenty years service award

As a token of appreciation for the continuous service put in, the employees are given
memento after completion of 20 years of service.

 Family planning program

Encouragement like special level of finance incentive is given to employees in the field of family
planning activities.

 Conveyance facility

Subsidized conveyance facility is provided between Alwaye and factory for the second
and third shifts.

Social Activities

48
 The company take care of the need of the local people with due consideration. This
includes construction of building ,waiting shed ,donation to various charitable organization etc.
Steps are taken for pollution control.

 First Aid Facilities

The company has direct touch towards he nearby hospital the company can use the service
of the hospital in case of emergence.

 Welfare office

Welfare activities are under the supervision of the welfare officer MR. Wilson Joseph
appointed by the company.

 Health and safety

There is a safety committee for looking after the safety of the workers drinking water
drinking water facilities are priced different spots inside the company.

 Employee state insurance scheme

ESI scheme is unique multidimensional self financing social security scheme in which
every contributor is a benefactor and beneficiary. This integrated scheme of health insurance prides
comprehensive medical cover and cash benefit in contingencies of sickness, maternity, disablement
and health.

Trade unions

▪ There are four registered and one unregistered union in the organization
▪ INTUC (Alwaye Textiles Employee Association)
▪ AITUC (Alwaye Textiles Workers Union)
▪ CITU (AlwayeMekhala District Textiles Labour Union)
▪ BMS (BharathiyaMasdoorSangam)
▪ The unregistered union is GTN Workers (Jobbers) Association

49
Organization structure- personnel department

GM Personnel

Security Officer
Personnel Officer Manager Training

Security Guards
Junior Officer

Time Keeper Assistant

4.6 SWOT ANALYSIS

STRENGTHS

50
 ▪ Mill has a good infrastructure facility.
▪ Perfect and pre planned time schedule to workers in the organization.
▪ Good quality products.
▪ Spindle capacity; there is enough space for increasing plant capacity and spindle capacity.
▪ On time delivery.
▪ Good and established brand image.
▪ Decade of experience in trading cotton and yarn before venturing in to this line

activity.
▪ The cost of switching between suppliers is low.
▪ Study the demand in market.
WEAKNESS
▪ Slow technology up gradation.
▪ Old machineries.
▪ The operation expenses are on the higher scale.
▪ Presents of more than two trade union in the organisation.
▪ Transportation problem.
OPPORTUNITIES
▪ Increasing demand of cotton yarn in the society.
▪ Approach of government authority.
▪ Widening of market distribution network.
▪ Improvement in technology is possible.
▪ Expand the business by opening new branches.
▪ A developing market such as cotton yarn.
THREATS
▪ Labour cost is increasing.
▪ Raw material price is increasing.
▪ Global market competition affects domestic market by low price for yarn.
▪ Unavailability of skilled labours.
▪ Unexpected accidents occur during production process.

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 ▪ Promotional programs for other blends.

CHAPTER-V

OBSERVATIONS, SUGGESTIONS AND CONCLUSION

5.1 OBSERVATIONS

▪ In the production department mixing process only done by manual. The dust are
removed by human from cotton.
▪ The cottons are purified by blow room section with the help of exhaust fans.
▪ The cotton are transformed as mat format.
▪ The cotton are segregate as various counts like 120,140, 270, 320and 340.
▪ The cotton convert as sliver format that is rope format with the twist.
▪ The purchase department is purchasing 60% from domestic market and remaining
40% from oversea seller.
▪ The yarn has selling 75% to local market. The 25% of sale made to overseas market.
▪ The manpower has been recruited from local. That is in around the company.
▪ The safety measures and welfare measures are being maintained properly by jayavelu
spinning mills ltd.
▪ More than 75% of employee are male and only 25% of employee are female.
5.2 SUGGESTIONS

▪ The company may expand its storage space for future expansion.
▪ The can speed up their delivery to their clients to increase their sale volume.
▪ The salary of employee may be revised for getting efficient work.
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 ▪ The female employee may be provided creches for their children.
▪ The management can be more participative with their employee for better morale.
▪ The company can concentrate on overseas market.
▪ The employee benefits may be increase in future for cordial relation with employee.
▪ The company may arrange for school facility for their employee children.
▪ The quarters may be provided to experience employee in concessional rate.
▪ The annual performance award may be considered to motivate employee who perform
well.

5.3 CONCLUSION

There are so many cotton mills are available in India. But recently many small scale and
medium scale spinning mills are winding up especially in Tamil Nadu . Many industrialist
struggle with technological up gradation and also the cotton price hike one of the reason for
slow down of business. Occupational hazards are more in spinning mills , hence the people
were hesitate to work . Government should take any initiation towards the price of cotton
candy , the opportunity of growth is possible

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5.4 BIBLIOGRAPHY

BOOKS

▪ Mr. ASWATHAPPA, Human Resource & Personnel Management

▪ Mr. MALHOTHRA, Marketing Research
▪ The Cotton Mills of India 1854-1954, SDMHTO,The Textile Association (India)p.28.
▪ Government of India, Status paper on Cotton India, Bombay, Directorate of Cotton
Development, 1994, p.7.

WEBSITES
www.textilespinning.com
www.entyce.com
www.textilefibre.com

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