An INDUSTRIAL REPORT On ARVIND LTD.

Submitted to Ahmedabad University H.L. Institute of Commerce

ARVIND LTD A GLANCE

TypePublic(NSE, BSE) Founded1931 IndustryTextile Products Denim, Knits, Khakhis, Shirting HeadquartersAhmedabad RevenueRs 20billion Websitewww.arvindmills.com

INTRODUCTION
Arvind Ltd., was setup with the pioneering efforts of the Lalbahi brothers in 1931. With the best of technology and business acumen, Arvind has become a true Indian multinational, having chosen to invest strategically, where the demand has been high and quality required has been superlative. Arvind Ltd., has setup the pace for changing global customer demands for textiles and has focused its attention on select core products. Such a focus has enabled the company to play a dominant role in global textile arena. With its presence across the textile value chain, the company endeavors to be a one-stop shop for leading garment brands. Styles may be short lived, but for well over decades Arvind has been defining and shaping many a collection and trendsetting styles across the ramps and retail outlets of the fashion capitals of the world. Arvind is today synonymous with a vast range of lifestyle products- be it fabrics or brands.

HISTORY OF ARVIND LTD.

1931
 Arvind limited was setup by three brothers Kastubhai, Narottambhai and ChimanbhaiLalbhai with a share capital of Rs2,525,000(US$55,000) backed by state-of the-art technology, with the aim to produce high end-superfine fabric.

1934
 With sales reaching Rs 45.76 lacs, and a profit of almost Rs3 lacs, Arvind establishes itself amongst the foremost textile units in the country.

1986
 An established leader in fine and superfine cotton fabrics for Indian market.

1987
 The largest zero discharge green ETP facility in India  First company to bring international shirt brand Arrow in India and to start dedicated retail outlet for Arrow brand.

1989
 Largest Denim & Shirting in South Asia.  3rd largest senior capacity in the world

1997
 First Indian company to veticalise the cotton textile business from cotton fields to apparel retailing.

2008
 First company to launch a pan Indian apparel outlet stores Megamart  Largest portfolio of International brands: Lee, Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, Pierre Cardin, Palm Beach, Cherokee, Hart Schaffner Marx.

The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was a dominant figure in the business and civic life of the city. He enjoyed the patronage of the Moghul emperors to whom he was a trusted jeweler. Shantidas was amongst the prominent financers of his time as well.. The current surname, Lalbhai, is derived from LalbhaiDalpatbhai the great greatgreat grandson of Khushalchand. Lalbhai was born around the time when the first textile factory in the city went into production. The first manufacturing company of the Lalbhai family, Saraspur Manufacturing Company was established in 1897. It started with producing cotton yarn. The second company Raipur Mills was established in 1905. Due to untimely death LalbhaiDalpatbhai the reins of his businesses were handed over to his young sons including a seventeen year old KasturbhaiLalbhai. Kasturbhai started the first large scale textile mill under the name of Asoka Mills in 1920. 1930-31 saw the resurgence of second Swadeshi movement coinciding with the great depression. While different entrepreneurs reacted to the situation differently Kasturbhai saw this as the decade of prosperity and growth and established the flagship Arvind Limited in 1931 with an authorized capital of Rs. 25.25 Lakh. Kasturbhai had also floated mills for families of his three sisters under the name of Aruna Mills in 1928 and Nutan Mills in 1931 and Ahmedabad New Cotton Mills in 1938. With the expansion Kasturbhai came to occupy the position of the biggest textile magnate in the country. Few groups could claim to have made such great strides during one of the worst periods in India s industrial history. With the retirement of Kasturbhai and his younger brother Narottambhai from active business, the role of the patriarch fell on the shoulders of Arvindbhai. He along with his brother Niranjanbhai and his cousins Ashokbhai, Ajaybhai, Chinubhai and Vijaysinhbhai looked into the running of the textile mills,Siddharthbhai headed Atul Products, and Shrenikbhai, Anilstarch. The group took over a sick company called Ahmedabad Laxmi Cotton Mills Co. Ltd. and merged with Arvind Limited and the unit was renamed as Ankur Textiles. With the third generation of Lalbhais retiring from business Sanjay, Sunil and SamvegLalbhai, the fourth generation of Lalbhais, now oversee all the businesses.

PRODUCTION AT ARVIND LTD.

ARVIND LTD., is established in Ahmedabad with the world s most advanced looms to produce best quality shirting products. Arvind Ltd., Ahmedabad has established itself as one of the largest manufacturing center for fabric cotton shirting. The main key to success is to keep close relationship with Spinning, Weaving, Processing units and monitor production cycle first hand. They are working only with the high-class quality manufacturing standards and dedicated to deliver the best quality in the market as per expectations of customers. A trendsetter and an innovator in the Indian Textile market , their expertise has been brought to bear by their in-house research & development team. Their innovations have become milestones in the shirting as well as textile industry as a whole. World- Class Facilities: ARVIND LTD. ,manufacturing facilities includes fully integrated plants in India, deploying state-of-the-art technology modern quality management systems like ISO 9001 and Environment Control Systems. All their plants are self-sufficient and provide staff welfare measures such as education, housing, recreation and support systems for employee. There are ambulances and first aid facilities available throughout the day on 24*7 basis. There are multiple fire exits in the unit which guarantees safety of the workers.

PRODUCTION CAPACITY AT ARVIND LTD.

UNIT Shirting Khakis Knit fabric Denim PRODUCTION CAPACITY 30 lakh meters/month 17 lakh meters/month 36 tonnes/month 20 million meters/month

LOCATION OF INDUSTRY
A very first important decision taken by an entrepreneur is about the choice of location of their business. Location is the place of selection of the site where entrepreneur are interested to establish industry. Plant location is place where all internal and external factors are available. Location decision is vital because it is the decision, which is to be taken once in lifetime of the industry. The plant of Arvind Ltd. , is located at around half an hour from Ahmedabad city. The address:

ARVIND LIMITED, Santej, Nr. KhatrajChokdi, P.O. Khatraj, Ahmedabad- 382721 Gujarat. India
The benefits from this location are as follows: y Huge industrial area y Availability of skilled and unskilled labourers from nearby areas y Vicinity of national highway and helps decrease transportation cost and fast distribution. The area of Arvind ltd. is spread around 550acres of land and 275 acres of land is used for manufacting. The manufacturing is mainly divided into three sections. The sections are: 1) Spinning 2) Weaving 3) Processing

PRODUCTION PROCESS
The process of manufacturing shirting fabrics involves following steps: 1. Grey Combing: The cotton received as per specifications in different microns is opened, scoured, dried, carded and combed. It includes removal of dust, sweat, natural grease etc. 2. Carding : Individualization of fibers is achieved and it also separates vegetable matter. It converts loose fibers into a continuous silver for subsequent process. It is done in the Blow room. Tow to top Convertor: Cotton is received in a raw form and is cut in the required length to match with the fiber for homogeneous blending. So , it is made into rolls of approximately 70kgs, which is made in nearly 5 minutes. Dyeing: Cotton thread are dyed separately in required colours. Recombing& Spinning: During the dyeing process, certain degree of disturbances takes place in the fiber. Hence parallelization is required. In recombing we achieve this as well as remove short fibers to achieve better quality of yarn and improve spinning performance. Depending on the count and blend, the twist is also imparted to give adequate strength to the yarn. This is followed by auto coning to remove spinning faults, if any ,and the final yarn is assembled and twisted to make it suitable for weaving. Wrap preparation: Sectional wraps are used and depending on the pattern required in the fabric, the creel is arranged. The wrap beams are produced followed by drawing, reaching and denting to prepare the beam for weaving. For plain shirts direct wrapping is done whereas , for multicoloured shirts, sectional wraping is done.

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7. Weaving: The weaving takes place on the loom with interlacement of wrapand weft. Number of ends and picks are dependent on the count of weave required. 8. Mending (Grey checking): It is the manual operation carried out by trained workmen to rectify spinning and weaving faults that may be present in the fabric. 9. Finishing: It is divided into two areas, viz, wet processing and dry processing. In wet processing, the fabric is washed with detergent to remove stains or chemicals that are applied during earlier operations. It is also eliminates stresses on the yarn spinning and weaving. In dry processing, the fabric is set for dimensional stability, sheared to give fabric which is then pressed and becomes ready for tailouring. 10. Inspection & folding 100% of the fabric is inspected and graded. The inspected fabric is cut into length as per market requirement and delivered to warehouse.

QUALITY CONTROL AT ARVIND LTD.

Quality Checking: First quality check done after drawing-in- process. A skilled operator identifies such damages in fabric. Damages may be of 20 different types. The final quality checks is done after the mercerizing process y Thus more damages are identified & worked upon. y y y y

1930 was a year the world suffered a traumatic depression. Companies across the globe began closing down. In UK and in India the textile industry in particular was in trouble. At about this time, Mahatma Gandhi championed the Swadeshi Movement and at his call, people from all India began boycotting fine and superfine fabrics, which had so far been imported from England. In the midst of this depression one family saw opportunity. The Lalbhais reasoned that the demand for fine and superfine fabrics still existed. And any Indian company that met this demand would surely prosper. The three brothers, Kasturbhai, Narottambhai and Chimanbhai decided to put up a mill to produce this superfine fabric. Next they looked around for state-of-the-art machinery that could produce such high quality fabric. Their search ended in England. The best technology of that time was acquired at a most attractive price. And a company called Arvind Limited was born

The Lalbhais A Historical Perspective The Lalbhais can trace their descent from Seth Shantidas (c.1590-1659), who was a dominant figure in the business and civic life of the city. He enjoyed the patronage of the Moghul emperors to whom he was a trusted jeweler. Shantidas was amongst the prominent financers of his time as well. He played an influential role amongst the Jain community of his time, and it was because of his influence at the Moghul court that Shah Jehan confirmed the rights of the Jains over the ancient shrines ofShetrunjaya. His grandson, Khushalchand, (1680-1748) too occupied a place of prominence in the business and social life of the city. He saved the city of Ahmedabad from the marauding Maratha army in 1725 by paying a ransom of Rs. 5 Lakh on behalf of the whole city. For this act the grateful mahajans promised in perpetuity, a small amount collected as town duties on goods entering the city to Khushalchand and his family, and the title of Nagarsheth was bestowed upon him . 1931 Arvind Limited Limited is set up by three brothers Kasturbhai, Narottambhai and ChimanbhaiLalbhai with a share capital of Rs 2,525,000 (US$55,000) backed by state-of-the-art technology, with the aim to produce high-end superfine fabric. 1934 With sales reaching Rs 45.76 Lakhs, and a profit of almost Rs 3 Lakhs, Arvind establishes itself amongst the foremost textile units in the country. 1986 - An uninterrupted record of not missing out on paying dividend to its shareholders. - An established leader in fine & superfine cotton fabrics for Indian market. 1986 Renovision: First company to bring globally accepted fabrics Denim, yarn dyed shirting fabrics & wrinkle free gaberdines to India. 1987 - The largest zero discharge green efluent treatment plant in India. - Commitment to greener world 1987 - First company to bring International shirt brand Arrow to India - First company to start dedicated retail outlets for Arrow brand. - Awarded various awards for Highest exports and ISO 1989 - Largest denim & shirting in South Asia. - 3rd Largest denim capacity in the world 1997 First Indian company to verticalise the cotton textile business from cotton fields to apparel retailing.

1997-1998 First company to introduce ERP SAP business solutions 2008 Company launches 'Megamart', now India's largest value apparel-retail chain 2008 Largest portfolio of International brands: Lee, Wrangler, Jansport, Kipling, Tommy, Arrow, US Polo, Izod, Palm Beach, Cherokee, hart Schaffner Marx

The underlying theme running across the broad spectrum of all business activities at Arvind is that of enhancing lifestyles of people, across all diversities and demographics. To serve that end, the corporate vision for Arvind states: 'We will enable people to experience a better quality of life by providing enriching and inspiring lifestyle solutions'. PHILOSOPHY WE BELIEVE In people and their unlimited potential. In content and focus in problem solving. In teams for effective performance.In intellect & its power. WE ENDEAVOUR To select, train and coach people to obtain higher responsibilities. To nurture talent to build leaders for tomorrow's corporation. To reward, celebrate and activate all intellectual business contributions. WE DREAM Of excellence in all endeavours. Of mutual benefit and prosperity. Of making the world a better place to live in. We Make Things Happen. Arvind has a strong Research and Development focus on process improvement, cost reduction and new product development. This is evident in the fact that Arvind continuously modifies its production process to enhance flexibility on the use of various types and quality of cotton. To further meet customer needs, Arvind has also introduced a new dyeing and processing method for denims.

Date of Establishment Revenue Market Cap Corporate Address Management Details

Business Operation Background

1931 517.174 ( USD in Millions ) 14780.6423821 ( Rs. in Millions ) Naroda Road, , Ahmedabad-380025, Gujarat www.arvindmills.com Chairperson - Sanjay S Lalbhai MD - Sanjay S Lalbhai Directors - BakulDholakia, Bakul H Dholakia, G M Yadwadkar, Jayesh K Shah, K M Jayarao, MuneshKhanna, R V Bhimani, R W Khanna, RenukaRamanath, S R Rao, Sanjay S Lalbhai, Sudhir Mehta, TarunSheth Textile Arvind was set up in the year 1931 by three brothers Kasturbhai, Narottambhai and ChimanbhaiLalbhai with a share capital of Rs 2,525,000 (US$55,000) to produce high-end superfine fabrics. It was earlier known as Arvind Mills.

The company has largest portfolio of International brands such as Lee, Wrangler, Nautica, Jansport, Kipling, Tommy, Arrow, Arvind was set up in the year 1931 by three brothers Kasturbhai, Narottambhai and ChimanbhaiLalbhai with a share capital of Rs 2,525,000 (US$55,000) to produce high-end superfine fabrics. It was earlier known as Arvind Mills. The company has largest portfolio of International brands such as Lee, Wrangler, Nautica, Jansport, Kipling, Tommy,Arrow, US Polo, Pierre Cardin, Palm Beach, Cherokee, hart Schaffner Marx Arvind has an employee strength of 14000 people as workmen and over 2700 people appointed as management staff. Business Division Denim- It produces a wide range of denims such as ring denim, indigo voiles, organic denim, bi-stretch denim and fair trade certified denim. Arvind is the 3rd largest producer of denim in the world. It has an export network in over 70 countries. It caters to clients like GAP, VF Corporation, Levi Strauss, Abercrombie & Fitch, Calvin Klein to name a few. Shirting- Under this category its product portfolio consists of fabrics with non-iron properties, mechanical finishes, printed fabrics apart from the cotton and cotton blends in linen, lycra, polyester, modal, silk, etc with varieties in yarn dyeds and solids. It has clients namely Polo, Ralph Lauren, ESPRIT, GAP, FCUK, Zara, Pull & Bear, Louis Philippe, Van Heusen, Allen Solly, Color Plus, Parx and Park Avenue. Khaki- It is the only khaki division in South East Asia with an annual production capacity of 21 million meters. Its product manufactured under this range are chinos, canvas, ribstop, HBT, tussore, cavalry, structures and dobbies.The clientele for this product are J Crew, Ralph Lauren, Banana Republic, Ann Taylor, Liz Clairborne,(US), Marks & Spencer, Pull & Bear, Benetton, Grotto Gas, Diesel, Madura Garments, Color Plus (India) to name a few. Knits- It has annual knitting capacity of 10,000 tonnes. Apart from basic knitting techniques, it is also mastered in specialty knitting techniques such as yarn-dyed auto stripers, jacquards, and stretch fabric. Voiles- Arvind is the market leader in the manufacture of voiles with an annual capacity of 33 million meters. The company's voiles are basically used for blouse materials and sold through a network of 150 dealers in India. It also exports voiles to Switzerland, Sri Lanka and countries in the Middle East. It also manufactures readymade garment such as jeans, shirts, and knits. Milestones In the year 1986 Arvind became first company to bring globally accepted fabrics denim, yarn dyed shirting fabrics and wrinkle free gaberdines to India. It was first company to bring International shirt brand Arrow to India in 1987.

Arvind was first company in India to introduce ERP SAP business solution during 1997-1998. It was first to launch a pan-India apparel outlet store Megamart in the year 2008. Outlook Arvind has entered into an agreement with US-based Philips-Van Heusen to market its IZOD sports lifestyle brand in Indi

Product Name Cloth Garments Knit Fabric Yarn Misc Sales Utility EPABX Grey Delta Others Grey IT Services Yarn Cloth Spindles Rotors Stitching Machines Knitting Machines Looms EPABX/RAX System Lines

Year 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010

Month 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03 03

Sales Sales Quantity Value(Rs.Million) 12.72 1.92 0.22 0.25 0.00 0.00 0.02 0.08 0.01 0.00 38008.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15127.50 5552.50 516.80 364.10 364.00 297.40 193.90 54.60 46.40 5.60 2.00 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

% of STO 65.25 23.95 2.23 1.57 1.57 1.28 0.84 0.24 0.20 0.02 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

S.No 1 3 2 4 5 6 7 8 9 10 11

Name Sanjay S Lalbhai Sanjay S Lalbhai R V Bhimani Sudhir Mehta BakulDholakia MuneshKhanna RenukaRamanath G M Yadwadkar Jayesh K Shah R W Khanna Jayesh K Shah

Designation Chairman Managing Director Company Secretary Director Director Director Director Nominee Director - IDBI Director - Finance & Chief Financial Officer Nominee Director - EXIM Bank Director - Finance & Chief Financial Officer