TERM PAPER

OF
“FINANCIAL MANAGEMENT”
MGT 517

Submitted to : Submitted by:

Ms. Neha Tikoo Imran Hussain

Roll no.- A20

Section- RT1902 ‘B’
Reg.- 10902893
MBA 2nd Sem.
 CONTENTS

➢ ACKNOWLEDGEMENT

➢ HISTORY OF THE COMPANY

➢ CAPITAL STRUCTURE

➢ Comparative Analysis of Capital Structure

➢ CONCLUSION
 ACKNOWLEDGMENT

I deem it as my personal duty to thank all those who proved

indispensable in the completion of my project. I express mine
gratitude towards GOD. I express mine gratitude to my esteemed
guide. I would also like to put on record my gratitude Lecture In-
charge Miss Neha Tikoo for giving me valuable and competent
guidance in accomplishment of my work.Finally I am thankful to
my friends and all those who helped me in completing the project
for the support and co-operation.
 ITC
ITC Limited was incorporated in 1946 as Jagatjit Cotton Textile Mills Limited and
renamed ITC in 1989. As a part of family settlement of Thapar Brothers, ITC
Limited came to Mr. M. M. Thapar. ITC is engaged in manufacturing textiles and
filament yarn through its integrated textile facilities in Phagwara, Punjab and
filament yarn facilities in Hoshiarpur, Punjab. Its integrated facilities, from yarn to
finished fabric, give it the flexibility to offer superior quality and a wide product
range to customers. The bulk of ITC's textiles production is exported either
directly in the form of fabric or garments after conversion by the domestic RMG
segment. Within India, the Company has a strong network of dealers/ distributors.
Cotton and polyester cotton fabric is sold all over India to some of the major
domestic brands as well as garment converters nominated by major international
brands/ buying houses.
YEAR EVENTS
1946 - The Company was incorporated on 28th October in Kapurthala. The main
object of the Company is to manufacture cotton textile goods. The products
manufactured are sheetings, shirtings, cambric, dhoties, sarees, coating, mazril,
mulls, etc.
1950 - 430 preference and 30,910 No. of Equity shares allotted.
1962 - The Company acquired Benaras Cotton and Silk Mills. 4,16,364 No. of
Rights Equity shares issued
1963 - preference shares entitled to gross dividend of 6.5% P.A.
1967 - 4,16,275 No. of equity shares issued in prop.
2001 - The Company has decided hive-of its synthetic fibre division in
Punjab and has also proposed to restructure its equity capital by reducing
the face value of its shares from Rs 10 to Rs.2.50 MM Thapar group
flagship ITC has decided to induct three new professionals on the board.
The new inductees are Raj Mohan Singh, head of the company's
Phagwara unit,finance head; T N Subramaniam and; S P Narang,
secretary, The Institute of Company taries of India.

NESTLE

The Power of Dreams.

Dreams are what drive us. Ever since our inception in 1966 we have continued to
deliver innovative knitwear and fabric that have made key style statements.
Creation of a unique corporate management system and culture is enabling us to
develop into a conglomerate that becomes a role model of worldwide respect and
trust. Founder of the group, Komal Kumar Jain, and his son Kuntal Jain, have
embraced and taken forward the principles of total Quality Management which
translates to doing “whatever it takes!” to guarantee 100% customer delight.
The Group corporate philosophy is based on the following principles:
• Credibility, integrity and honesty
• Straightforward business dealings
• Work as a worship
• Spirit of Social Service and human respect

The business of fashion is dreaming and styling the future. Business strategy,
vision & innovation are the principal pillars on which our forward-thinking
corporate policy is founded. After all, no company can afford to stand still. We
work ceaselessly to develop new directions in apparel production and export, thus
ensuring that all our constituent companies shall continue to have a strong voice in
the international apparel and textile forums of today and tomorrow.

Corporate Track Record

The Nestle saga commenced about four decades ago, in Ludhiana, the fashion hub
of Punjab.
Today Nestle embraces a complete vertically integrated garment manufacturing
plant, with knitting, dying, processing, finishing, mercerizing, compacting,
embroidery and printing under one roof. Production facilities are in India.
Nestle Fashions (India) Limited pioneered the T-shirt culture, and gradually
established several new trends in knitting garments and fabric research. In 1998,
Thermal wears were introduced for the first time in India, under the brand name
"Neva", by Mr. Nirmal Jain, Younger brother of the founder. Two other group
constituents – Venus Garments (India) Limited and Venus cotsyn (India) Limited,
Glaze Garments (India) Limited, is headed by Mr. Anil Jain, the youngest of the
brothers.
Today Mr. Kuntal Jain, son of the founder, is steering the flagship brand in the
new millennium. Thanks to his dynamic Programs, Nestle is acknowledged today
as the undisputed leader, with a turnover Rs. 65 crores.
Stringent quality control mechanisms punctuate the entire operations and make
certain that the final products enjoy true value for money status and first choice of
customer in India and abroad as well.
The Company strives to be a good corporate Citizen, with several path-breaking
eco-friendly initiatives to minimize pollution, e.g. waste water treatments, use of
nature and eco-friendly materials such as dyes and chemicals, and recycling of
polyester yarns. The goal, simply stated, is to ensure a “green, unpolluted
environment”.

Awards & Rewards

• Nestle fashions (India) Limited has received the most coveted ISO 9001-
2000 certificate from DNV, the largest certification body in India.
• ORG_MARG, the largest market intelligence service in Asia, has proclaimed
Nestle T-shirts as the number one selling T-shirts brand in India.
• Mr. Komal Kumar Jain, founder, was awarded the prestigious Udyog Patra
Award by the Institute of Trade & Industrial Development for his
contributions towards economic growth.
• DFU publications have felicitated Nestle with the “Inside Fashion” award, for
excellence in retail.
• Safety award from Director of factories and Punjab industrial safety council
Chandigarh.
• ITID Quality Excellence Award for manufacture of T-shirts & Ready-made
Garments from Shri. S. Vaghela (Hon'ble Minister of Textiles, Govt. of
India)
Cutting Edge Synergy

Nestle is evolving, growing and diversifying to attain new heights.

The key expression is cutting edge technologies and relentless quality checks by a
Quality Assurance Team to achieve impeccable synergy. Our in house knitting,
dying, mercerizing, finishing, compacting, garment printing, embroidery and
manufacturing facilities feature state-of-the-art machineries and equipment
supplied by world class Juki, Pegasus, Yamato, Brother, Barudan, Stefab,
Ramsons and others. The embroidery section is fully computerized.
The knitting division is fully equipped to make single jersey, double jersey, auto
stripes for ribs, fleece, velour, feeder stripes, terry and computer jacquards in
diverse gauges, Our fabric choice ranges from 100% cotton to techno-blends with
polyester, acrylic, linen, polymix, lyocell, viscose, modal spandex, nylon, rayon
etc.
The design studio of the company is well laced with expert professionals and latest
software. At the beginning of each season, our design team carries out extensive
research-based forecasting to ensure that we stay at the pinnacle of contemporary
fashion.

The Portfolio
Every design that we create, every contact that we accept, we execute it with the
strictest regulation. No impractical designs, no cutting corners, no compromising
on quality for our valued customers and vendors.
Customer satisfaction begins at our drawing board. Every design is created with
the need of customers foremost in our mind – we consider how they will fit our
designs around their lifestyle.
The Nestle group produces for men, women, and children:
• T-shirts
 • Jackets
• Sweaters
• Track – suits
• Sweatshirts
• Shirts
• Trousers
• Denims
• Lounge Wears
• Lowers
• Bermudas
• Thermal Wears
• Innerwear
• Accessories
Brand names under the group umbrella include Nestle, X-cite, Creyons, Prime
Bodies, Royale Lagos & Neva.
We process institutional export orders in accordance with our clients need.
Customized orders are executed for reputed industrial units, corporate houses and
renowned educational institutions spread though out India. We have a unique
capability of designing T-shirts for special occasions, to suit specific needs like
brand promotion, and even uniforms.

Strategic Approach

The Nestle group’s strategic approach is entirely brand centric and strategically
defined to reach divergent markets in India and around the World, especially in
Nepal, Sri Lanka, Canada and U.S.A. with the help of extensive advertising and
promotional campaigns. Our seasonal product catalogues are successful in
positioning our brand at the top echelons of quality and value for money.
A strong market network of over 2500 multi-brand outlets and over 70 exclusive
stores across major cities in India is succeeding in bolstering the profit curve of
the entire product range. Our own sales team monitors this massive network to:
Make it easy for the network to build positive relationships and increase sales.
Understand market segments and changing demands.
Communicate feedback to the Group headquarters.
We are the only national brand with international standards. Our well-rounded and
multi-leveled marketing approach incorporates a wide assortment of image
management and customer interactive programs.

Company position in market

ITC is the largest textile company. ITC largely depends upon the textile
manufacturing and export. It also plays a major role in the economy of the
country.ITC the country in terms of employment generation. It not only
generates jobs in its own.ITC market position and goodwill is good in
textile industry.ITC financial position is good in sound.
ITC mill can be divided into several segments, some of which can be listed as
below:
• Cotton Textiles
• Silk Textiles
• Woolen Textiles
• Readymade Garments
• Hand-crafted Textiles
• Jute and Coir
Nestle is also largest garment company india. Nestle market position and goodwill
is good in textile industry market .ITC financial position is good in
sound.The product of Nestle company is selling all over india. Its mostly
depend on winter clothe but they make all item.
Nestle garment can be divided into several segments, some of which can be listed
as below:
• Woolen Textiles
• Readymade Garments
• Hand-crafted Textiles

Capital Structure of ITC mill

Period Instrument Authorized Capital Issued Capital- P A I D U P
FromTo (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2008 2009 Equity Share 150 89.27 357069192 3 89.27
2007 2008 Equity Share 150 89.27 357069192 3 89.27
2006 2007 Equity Share 150 85.92 343669044 3 85.92
2005 2006 Equity Share 150 85.92 343669044 3 85.92
2004 2005 Equity Share 150 85.92 343669044 3 85.92
Balance Sheet of ITC
------------------- in Rs. Cr. -------------------

Mar '
Mar '06 Mar '07 Mar '08 Mar '09
05

12
12 mths 12 mths 12 mths 12 mths
mths

Sources Of Funds
Total Share Capital 123.36 122.20 122.20 122.73 119.66
Equity Share Capital 85.92 85.92 85.92 89.27 89.27
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 37.44 36.28 36.28 33.47 30.39
Reserves 42.41 49.17 48.42 70.69 1.35
Revaluation Reserves 9.71 7.74 7.31 0.00 0.00
Networth 175.48 179.11 177.93 193.42 121.01
Secured Loans 186.43 179.39 229.66 319.64 315.85
Unsecured Loans 30.03 65.57 194.96 176.10 208.05
Total Debt 216.46 244.96 424.62 495.74 523.90
Total Liabilities 391.94 424.07 602.55 689.16 644.91
Mar
Mar '06 Mar '07 Mar '08 Mar '09
'05

12
12 mths 12 mths 12 mths 12 mths
mths

Application Of Funds
Gross Block 589.51 674.60 710.00 462.89 514.21
Less: Accum. Depreciation 433.02 416.84 426.59 0.00 0.00
Net Block 156.49 257.76 283.41 462.89 514.21
Capital Work in Progress 9.94 31.44 183.85 59.44 3.97
Investments 41.29 68.92 78.24 77.47 62.77
Inventories 108.21 119.86 141.27 131.38 119.94
Sundry Debtors 49.36 38.27 32.38 40.97 37.95
Cash and Bank Balance 8.98 6.38 3.42 12.28 9.23
Total Current Assets 166.55 164.51 177.07 184.63 167.12
Loans and Advances 157.83 35.51 41.82 51.85 56.54
Fixed Deposits 1.80 3.39 6.39 0.00 0.00
Total CA, Loans & Advances 326.18 203.41 225.28 236.48 223.66
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 125.86 120.25 148.80 129.46 136.91
Provisions 16.11 17.23 19.41 17.65 22.81
Total CL & Provisions 141.97 137.48 168.21 147.11 159.72
Net Current Assets 184.21 65.93 57.07 89.37 63.94
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 391.93 424.05 602.57 689.17 644.89

Contingent Liabilities 50.27 58.18 51.80 27.70 35.73

Book Value (Rs) 3.73 3.93 3.91 4.48 2.54

Capital Structure of Nestle

Period Instrument Authorized Capital Issued Capital- P A I D U P
FromTo (Rs. cr) (Rs. cr) Shares (nos) Face ValueCapital
2008 2009 Equity Share 5.25 5.03 5028000 10 5.03
2007 2008 Equity Share 5.25 5.03 5028000 10 5.03
2006 2007 Equity Share 5.25 5.03 5028000 10 5.03
2001 2002 Equity Share 5.25 5.03 5028000 10 5.03
2000 2002 Equity Share 5.25 5.03 5028000 10 5.03
Balance Sheet of ------------------- in Rs. Cr. -------------------
Nestle
Mar
Mar '06 Mar '07 Mar '08 Mar '09
'05

Sources Of Funds
Total Share Capital 4.98 4.98 4.98 4.98 4.98
Equity Share Capital 4.98 4.98 4.98 4.98 4.98
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
-
Reserves -3.67 -5.07 -5.24 -2.86
3.37
Revaluation Reserves 0.85 0.00 0.00 0.00 0.00
Networth 2.46 1.31 -0.09 -0.26 2.12
Secured Loans 0.41 0.38 0.38 0.27 0.00
Unsecured Loans 1.09 1.30 0.80 0.84 0.62
Total Debt 1.50 1.68 1.18 1.11 0.62
Total Liabilities 3.96 2.99 1.09 0.85 2.74
Mar
Mar '06 Mar '07 Mar '08 Mar '09
'05

12
12 mths 12 mths 12 mths 12 mths
mths

Application Of Funds
Gross Block 3.20 1.76 2.32 2.32 2.17
Less: Accum. Depreciation 1.31 0.98 1.25 1.51 2.08
Net Block 1.89 0.78 1.07 0.81 0.09
Capital Work in Progress 0.55 0.55 0.00 0.00 0.00
Investments 0.00 0.00 0.00 0.00 2.24
Inventories 0.00 0.00 0.00 0.00 0.00
Sundry Debtors 1.77 1.76 0.02 0.00 0.23
Cash and Bank Balance 0.20 0.16 0.20 0.10 0.22
Total Current Assets 1.97 1.92 0.22 0.10 0.45
Loans and Advances 0.01 0.02 0.10 0.05 0.69
Fixed Deposits 0.00 0.00 0.00 0.00 0.00
Total CA, Loans & Advances 1.98 1.94 0.32 0.15 1.14
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 0.49 0.28 0.30 0.10 0.36
Provisions 0.00 0.00 0.00 0.00 0.38
Total CL & Provisions 0.49 0.28 0.30 0.10 0.74
Net Current Assets 1.49 1.66 0.02 0.05 0.40
Miscellaneous Expenses 0.03 0.00 0.00 0.00 0.00
Total Assets 3.96 2.99 1.09 0.86 2.73

Contingent Liabilities 0.00 0.00 0.00 0.00 0.00

Book Value (Rs) 3.23 2.63 -0.18 -0.51 4.22

Comparative Analysis of Capital

Structure
ITC vs Nestle

1. The face value of ITC is Rs 3 per share but the face value of Nestle is Rs 10 per share
which is much more the ITC it shows that market value of Nestle is much more better
than ITC .
 2. When we compare with capital structure of Nestle and ITC its shows that the
company position of ITC is much better than Nestle in comparagion of asset.
3. If we see liblity and current asset of the company then ITC is much larger than the
Nestle it shows that the investment of asset of ITC is much larger then Nestle.
4. When we see the equity share of the company than ITC is much larger than the Nestle
it shows that the share holders are confidence is more in case of ITC .
5. When we se the number of share of the company its shows that ITC is much larger
number of share than the Nestle.
6. When we see total share capital of the company its shows the ITC is much larger then
Nestle.
7. When we preference share capital of the company its shows that the ITC is much larger
than the Nestle
8. When we see net worth of the company its shows the ITC is the much better than the
Nestle.

CONCLUSION

Overall , if we see the company has less earnings and the investment it has made is

more which will help them to earn the profit in long term.As we have seen 5
tabular for the study of the company , which shows that the company is having

gradual growth and comparatively the profit and earning per share are less.ITC

and Nestle is expected to have a great future and investment in it will be a wise

idea if you are expecting to have the profit at long term and ofcourse the part of

risk is more here as the company has more debt than the equity. Overall both

company market position and financial position is good in sound and market

goodwill is also good .