1. Summer Training Project on Organic Cotton: An Opportunity for Ludhiana textile industry to trade in Global textile market Undertaken at AARTI INTERNATIONAL LIMITED Presented by: Nitin Goel MBA-IB (2B) Roll No. 94972238291

5. Introduction to Aarti Group

12. Introduction to Aarti International Ltd.

25. Ratio Analysis of Aarti International Ltd.

26. Liquidity Ratios

27. Current ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Current assets 167 193 186 Current liabilities 85 93 87 Current ratio 1.96:1 2.07:1 2.14:1

28. Quick Ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Quick assets 71 62 76 Current liabilities 85 93 87 Quick ratio 0.84:1 0.67:1 0.87:1

29. Activity Ratios

30. Inventory turnover ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Cost of goods sold 284 218 278 Average inventory 98.5 115 121 Inventory turnover ratio ( in times) 2.88 1.89 2.3 Inventory holding period ( in days) 126.7 192.3 158.7

31. Debtor turnover ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Net credit sales 275 276 345 Average debtors 64 61 64 Debtors turnover ratio 4.24 4.49 5.43 Debtor conversion period 86.1 81.3 67.2

32. Creditor turnover ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Net credit purchases 248.5 190.7 187.9 Average creditors 10.57 11.43 11 Creditor turnover ratio ( in times ) 23.51 16.68 17.08 Average payment period ( in days ) 15.52 21.88 21.37

33. Capital structure ratios

34. Debt –equity ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Debt 256 368 362 Equity 163 170 162 Debt equity ratio 1.57:1 2.16:1 2.23:1

35. Proprietary ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Shareholder fund 162 170 162 Equity 444 238 536 Proprietary ratio 37% 71% 30%

36. Solvency ratio Year 2006-07 2007-08 2008-09 Proprietary 37% 71% 30% Solvency ratio 63% 29% 70%

37. Profitability ratios

38. Gross profit ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Gross profit 73 58 68 Net sales 275 276 345 Gross profit ratio 26.6% 20.9% 19.6%

39. Net profit ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Net profit 14.35 12.4 10.97 Net sales 275 276 345 Net profit ratio 5.2% 4.49% 3.96%

40. Operating profit ratio ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Operating profit 56 41 35 Net sales 275 276 345 Operating ratio 20.34% 15% 9.08%

41. Return on shareholders’ equity ( Fig. In Crores ) Year 2006-07 2007-08 2008-09 Net profit after taxes 14.35 12.4 10.97 Shareholders’ fund 275 170 170 Return on shareholders’ equity 5.22% 7.3% 6.45%

42. Trend analysis

43. Trend of Turnover Years Sales (Rs. In Crores) Trend ( In %) 2004-05 143.68 100 2005-06 154.28 107.38 2006-07 274.92 191.34 2007-08 276.09 192.16 2008-09 345.43 240.42

44. Trend of Net Profit / Loss Years Net Profit (Rs. In Crores) Trend ( In %) 2004-05 17.49 100 2005-06 18.61 106.4 2006-07 14.35 82.05 2007-08 12.41 70.95 2008-09 10.97 62.72

45. Trend of EPS Years EPS (Rs.) Trend (In %) 2004-05 25.98 100 2005-06 25.29 97.34 2006-07 16.61 63.93 2007-08 14.03 54 2008-09 11.47 (31.25)

46. Introduction to the Project

52. Global retail sales of organic cotton products Source: Organic Exchange 2009 Market Report

54. Title of the Research Organic cotton: An opportunity for Ludhiana textile industry to trade in global textile market

56. Research Methodology

60. Data Analysis and Interpretation

61. Table 5.1-No of organic cotton textile products manufacturers & exporters in Ludhiana (N=40) Products Yarn Fabric Garment Knitted Woven Knitted Woven Knitted Woven No of responses 12 6 16 4 19 4 No of respondents 40 40 40 40 40 40 Percentage 30% 15% 40% 10% 47.5% 10%

62. Fig. 5.2- Annual turnover of the manufacturers & exporters in the year 2009-10 (N=40)

63. Fig 5.3- Proportion of export of organic cotton products out of total sales (N=40)

64. Fig 5.4-Export trend of organic cotton textile products since manufacturers have started making (N=40)

65. Fig 5.5-Factors resulting in an increasing demand of organic cotton textile products (N=40)

66. Fig 5.6-Factors resulting in decreasing & constant demand of organic cotton textile products (N=40)

67. Fig 5.7-No. holders of valid operational certificate applicable for the production/ trade of organic cotton textile products (N=40)

68. Fig 5.8-Holders of different types of operational certificate (N=40)

70. Table 5.9(b)-Rating of price factor (N=40) Rating No. of respondents Product Most considered (+2) 26 52 More considered (+1) 13 13 Neutral (0) 1 0 Less considered (-1) 0 0 Least considered (-2) 0 0 Total Mean 40 65 1.625

71. Table 5.9(c)-Rating of quality factor (N=40) Rating No. of respondents Product Most considered (+2) 16 32 More considered (+1) 14 14 Neutral (0) 9 0 Less considered (-1) 1 -1 Least considered (-2) 0 0 Total 40 45 Mean 1.125

72. Table 5.9(d)-Rating of lead time factor (N=40) Rating No. of respondents Product Most considered (+2) 4 8 More considered (+1) 14 14 Neutral (0) 14 0 Less considered (-1) 6 -6 Least considered (-2) 2 -4 Total 40 12 Mean 0.30

73. Table 5.9(e)-Rating of long term relationship factor (N=40) Rating No. of respondents Product Most considered (+2) 12 24 More considered (+1) 12 12 Neutral (0) 8 0 Less considered (-1) 3 -3 Least considered (-2) 5 -10 Total 40 23 Mean 0.575

74. Table 5.9(f)-Rating of reputation of supplier factor (N=40) Rating No. of respondents Product Most considered (+2) 7 14 More considered (+1) 12 12 Neutral (0) 11 0 Less considered (-1) 7 -7 Least considered (-2) 3 -6 Total 40 13 Mean 0.325

75. Fig 5.10-Combined result of various parameters while procuring raw material

76. Factors influencing people to enter in to organic cotton textile products business Table 5.11(a)-Rating of increasing basket size factor (N=40) Rating No. of respondents Product Most influencing (+2) 17 34 More influencing (+1) 11 11 Neutral (0) 5 0 Less influencing (-1) 4 -4 Least influencing (-2) 3 -6 Total 40 35 Mean 0.875

77. Table 5.11(b)-Rating of Highly profitable factor (N=40) Rating No. of respondents Product Most influencing (+2) 4 8 More influencing (+1) 18 18 Neutral (0) 14 0 Less influencing (-1) 2 -2 Least influencing (-2) 1 -2 Total 40 22 Mean 0.55

78. Table 5.11(c)-Rating of Necessary for survival factor (N=40) Rating No. of respondents Product Most influencing (+2) 3 6 More influencing (+1) 16 16 Neutral (0) 14 0 Less influencing (-1) 7 -7 Least influencing (-2) 0 0 Total 40 15 Mean 0.375

79. Table 5.11(d)-Rating of to remain competitive factor (N=40) Rating No. of respondents Product Most influencing (+2) 11 22 More influencing (+1) 18 18 Neutral (0) 6 0 Less influencing (-1) 4 -4 Least influencing (-2) 1 -2 Total 40 34 Mean 0.85

80. Table 5.11(e)-Rating of helps in branding or differentiation factor (N=40) Rating No. of respondents Product Most influencing (+2) 1 2 More influencing (+1) 12 12 Neutral (0) 9 0 Less influencing (-1) 13 -13 Least influencing (-2) 5 -10 Total 40 -9 Mean 0.225

81. Table 5.11(f)-Rating of global demand factor (N=40) Rating No. of respondents Product Most influencing (+2) 19 38 More influencing (+1) 10 10 Neutral (0) 7 0 Less influencing (-1) 3 -3 Least influencing (-2) 1 -2 Total 40 43 Mean 1.075

82. Combined result of factors influencing people to enter into organic cotton textile products business Fig 5.12-Factors influencing people to enter into organic cotton textile products business

83. Table 5.13-Steps that government should take to boost the sales of organic cotton textile products in the global textile market (N=40) Steps Regulate prices Favourable global policies Create awareness of eco-friendly products Encourage farming of organic cotton Incentives to farmers to grow organic cotton Others No of responses 24 7 17 9 6 1 No of respondents 40 40 40 40 40 40 Percentage 60% 17.5% 42.5% 22.5% 15% 2.5%

87. Conclusion and Suggestions

92. THANK YOU