NTC Report

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INDUSTRY VISIT REPORT OF Prepared By : Saheli Biswas, Anurag Das & Shaibal Bhattacharjee

Transcript of NTC Report

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INDUSTRY VISIT REPORTOF

Prepared By : Saheli Biswas, Anurag Das

& Shaibal Bhattacharjee

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-: Content:- Acknowledgement Preface Company Profile Growth of industry Manufacturing capability Work flow model of ntc Financial Analysis Marketing Position HR & Personnel Department Conclusion & Suggestion

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ACKNOWLEDGEMENT

Writing this industrial visit report happens to be one of the greatest achievements in this phase of our life. We express our heartiest thanks to those who provided us tremendous support for making it a useful experience.

This visit has proven to be a pleasant journey, practical work in ntc with our fellow friends, under the guidance of honorable teachers and with the help of the field attendant.

We take the opportunity to thank all of the people involved. We are very thankful to our Asst. Director & HOD(MBA) Prof. Sanjay Bhattacharya and Co-ordinator Mrs. Mitra Sen Mazumdar, Ms Shubhanjali Chakravarty, Mr. Shuvam Chatterjee, Mrs. Anamika Mukherjee who gave us an excellent platform like this.

We like to express our gratitude to all the staff members, laborers, Officer- HR & Admin, Mr. Ranjan Kumar Singh of ntc.

We are also indebted to the respondents for their valuable support and kind cooperation for the purpose of study.

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Preface Management is both an academic theory and a business practice that addresses the techniques of managing a workforce. The theoretical discipline is based on the assumption that employees are individuals with varying goals and needs and as such should not be thought of as bonded labor on can be purchased at price. The field takes a positive view of employees and study of practices followed by organization to manage this intellectual capital to their maximum satisfaction, so that they can work to best of their ability.

So, as a MBA student, we must know the practical implication of concepts of Human Resource Management, Financial management and Marketing strategy. Our institution Regent Education and Research Foundation has given us this golden opportunity to meet with them by means of this project work.

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Company profile :

ntc industries limited, earlier known as the National Tobacco Co. of India Limited, founded in September 1931 with its office and works in the city of Kolkata, India, is a premier organization for Cigarette and Tobacco Products manufacturing and marketing within India and overseas.

ntc is the first company to manufacture and market filter and menthol cigarettes in India.

ntc has a modern PMD for tobacco processing of any blend type- Virginia or American. They can make and develop finest blends to suit customer’s choice.

ntc's cigarette making and packaging division are well equipped with full range of modern machineries to produce quality cigarettes as well as excellent finished packets in conformation to international standards.

The company pioneered the introduction of 84mm king size filter cigarettes, mentholated cigarettes.

The company is working with single minded focus on continuous value creation for consumer, through significant research & development in creating quality blends, maintaining consistent quality, state-of-the-art manufacturing technology & robust marketing and distribution.

ntc also offer high-quality, value-priced cigarettes and Roll-your-own tobacco to USA, Africa and Central and Middle East countries through its export operations.

ntc's cigarettes are manufactured in state-of-the-art factory at Kolkata with modern technology & excellent work practices. A robust supply-chain & distribution network ensures that the products reach across the length & breadth of the country.

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Growth of industry

Business Type : 1) Manufacturer

2) Supplier

3) Exporter

Annual turnover: More than Rs. 500 lacs.

Product portfolio: Length

Shell & SlideHLP 10'SHLP 20'SSoft Cup

50 GMS POUCH69mm Plain

Deluxe Tenor Virginia64mm Filter

Regent StandardRegent GoldRegent Black

Regent StandardNo. 10

69mm FilterRegent MinikingRegent RoyaleRegent Special

CoolSmokette

84mm FilterRegent Luxury Filter

MaypoleJaipur

GeneralAadie

AxFx

GoldmansDerby

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Manufacturing capability

India’s first company to manufacture and market filter and menthol cigarettes.

Possesses modern PMD for tobacco processing of any blend type- Virginia or American.

Ability to develop finest customized blends to suit customer’s choice. Well equipped cigarette making and packaging division with full range of

modern machineries to produce quality cigarettes as well as Excellent finished packets in conformation to international standards.

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Segment Brand Name Nature Available Size Geographical AreaSegment Brand name Nature Available size Geographical areaDomestic Cool Menthol filter 84 mm and 69 mm Western , Southern India Regent Miniking Virginia filter 69 mm Southern, Eastern India Regent Luxury Filter Virginia filter 84 mm Eastern India Regent Special Virginia filter 69 mm Eastern India Regent Royale Virginia filter 69 mm Northern, Eastern India Regent Standard Virginia filter 64 mm Eastern India NO.10 Virginia filter 69 mm Northern India Deluxe Tenor Virginia non-filter 69 mm Northern India Prince Henry Flavoured 50 gms pouch Eastern India smoking mixture American typeExport Maypole American blend 84 mm Central and South America

and others

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Work flow model of ntc 1. Reconstituted tobacco sheet and tobacco leaf go through the following processes:

Mixing and wetting Blending Cutting

2. Tobacco stem goes through the following processes:

Wetting Crushing Cutting Drying

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3. At this point the reconstituted tobacco sheet, the tobacco leaf, the tobacco stem, and rag from waste cigarettes together go through the secondary process:

Mixing Drying Cooling

4. This produces CIGARETTE RAG which then goes through the following stages:

Cigarette making machines Packing machines (Normally cartons of 200 in cases of 3-6,000) Production account point (On pallets) Registered store (Awaiting delivery) Assembly (Orders made up)

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Additional notes Any damaged cigarettes are split and the tobacco (ie. rag from waste products) is

returned to the process at point 3. 

Financial Analysis

Profit loss account(Rs crore)

Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09

Income

Operating income 44.77 39.76 10.60 3.07 26.70

Expenses

Material consumed 29.01 29.46 8.35 1.53 -16.80

Manufacturing expenses 1.69 0.91 0.62 0.37 37.36

Personnel expenses 3.98 4.20 3.26 3.07 3.28

Selling expenses - - 1.37 0.95 2.33

Adminstrative expenses 6.62 3.61 0.75 0.34 1.97

Expenses capitalised - - - - -

Cost of sales 41.30 38.17 14.34 6.27 28.14

Operating profit 3.47 1.59 -3.74 -3.20 -1.45

Other recurring income 1.47 0.40 5.35 4.33 6.90

Adjusted PBDIT 4.94 2.00 1.61 1.13 5.45

Financial expenses 1.55 0.72 0.45 0.07 1.98

Depreciation 1.10 0.98 0.96 1.05 1.47

Other write offs - - - - -

Adjusted PBT 2.29 0.30 0.20 0.01 2.00

Tax charges 0.29 0.01 0.07 0.33 0.30

Adjusted PAT 2.00 0.28 0.13 -0.32 1.71

Non recurring items - - 0.01 0.20 0.81

Other non cash adjustments -0.30 - -0.03 -0.09 0.18

Reported net profit 1.70 0.28 0.11 -0.21 2.69

Earnigs before appropriation 14.44 12.74 12.46 12.35 23.68

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Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09

Equity dividend - - - - 0.54

Preference dividend - - - - -

Dividend tax - - - - 0.09

Retained earnings 14.44 12.74 12.46 12.35 23.05

Balance sheet

(Rs crore)

Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09

Sources of funds

Owner's fund

Equity share capital 10.75 10.75 10.75 10.75 10.75

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 18.61 16.91 16.63 16.52 67.58

Loan funds

Secured loans 5.50 9.08 3.99 2.29 32.55

Unsecured loans 2.00 2.00 2.01 2.00 11.26

Total 36.86 38.74 33.38 31.56 122.14

Uses of funds

Fixed assets

Gross block 29.70 28.00 28.37 26.07 33.56

Less : revaluation reserve - - - - -

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Mar ' 13 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09

Less : accumulated depreciation 12.10 11.07 10.84 10.12 9.88

Net block 17.60 16.93 17.54 15.95 23.68

Capital work-in-progress 8.00 8.06 6.95 4.54 4.08

Investments 0.60 0.60 0.05 0.05 13.59

Net current assets

Current assets, loans & advances 33.08 28.60 17.93 19.55 156.62

Less : current liabilities & provisions 22.42 15.45 9.09 8.53 75.82

Total net current assets 10.66 13.15 8.84 11.02 80.80

Miscellaneous expenses not written - - - - -

Total 36.86 38.74 33.38 31.56 122.14

Notes:

Book value of unquoted investments - 0.55 0.05 0.05 13.59

Market value of quoted investments 2.15 0.12 - - -

Contingent liabilities 89.61 88.66 87.72 93.63 148.29

Number of equity sharesoutstanding (Lacs) 107.50 107.50 107.50 107.50 107.50

Quarterly results in brief(Rs crore)

Dec' 13 Sep' 13 Jun' 13 Mar' 13 Dec' 12

Sales 3.93 5.64 4.56 9.56 10.42

Operating profit 0.57 1.84 0.84 0.52 0.77

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Dec' 13 Sep' 13 Jun' 13 Mar' 13 Dec' 12

Interest 0.31 0.26 0.27 0.47 0.36

Gross profit 0.44 2.11 0.85 0.57 0.68

EPS (Rs) 0.11 1.98 0.55 -0.28 0.37

Marketing Position

Peer Comparison

Company Market Cap(Rs. in Cr.)

P/E (TTM)(x)

P/BV (TTM)

(x)

EV/EBIDTA(x)

ROE(%)

ROCE(%)

D/E(x)

ITC 285,519.27 33.84 12.84 20.78 36.2 52.1 0.00

Godfrey Phillips 3,372.46 15.23 3.24 8.91 15.4 17.8 0.32

VST Inds. 2,591.22 19.48 8.63 11.02 43.0 62.7 0.00

Golden Tobacco 34.60 0.00 -0.53 0.00 0.0 0.0 0.00

NTC Inds. 19.24 6.83 0.66 5.67 6.0 8.8 0.44

Global position: Among other key players of the industry, ntc industries limited is the 2nd largest exporter of cigarettes and other tobacco products.

ntc's cigarettes are manufactured in state-of-the-art factory at Kolkata with modern technology & excellent work practices. A robust supply-chain & distribution network ensures that the products reach across the length & breadth of the country.

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ntc also offer high-quality, value-priced cigarettes and Roll-your-own tobacco to USA, Africa and Central and Middle East countries through its export operations.

HR & Personnel Department

Interpersonal Relationship : In their relationship with colleagues- they recognize their respect and dignity and in the same way, they themselves would expect the same from them.

Honour confidentiality : They shall maintain the confidentiality of all material non-public information about ntc industries limited business until and unless discharged from such obligations under requirement of any law or any provisions of this code.

Conflict of interest : It is expected on part of the employees to make business decision taking into account best interest of the company as a whole, without being influenced by personal relationships or benefits. They are expected to apply their proper mind in arriving at sound decision without any conflict of interest, which may adversely affect the company’s business.

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Corporate business opportunities : It is duty of the employees and directors towards the company to enhance its legitimate business interest whenever and wherever such opportunities so arise. They are prohibited from taking benefits of such opportunities for themselves or through third party.

Safety , Health & Risk management

The company continues to contribute to the communities in which they operate and address social issues responsibly. Their products are safe to make and use. They conserve natural resources and continue to invest in a better environment.

The management recognizes human resources as the prime machinery of an organization, therefore they always give first priority to provide all safety measure for good health of the employees. The company expects that all employees of ntc possess good habit and leave bad habit , if any because fair and fresh environment helps employees to realize their full potential.

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The company believes in evolving a comprehensive risk management framework by a process of developing strategy to not only manage but also minimize the risk. This is process of identifying, assessing, and measuring the possible risk, which may be faced by the company, and then formulating plans to cover and manage the same.

They are aiming at an ideal risk management system where they have vision to make this company a zero accident company with focus on safety and environment.

They like to market consumer friendly products of global best quality and ensure safety and security of all stakeholders of the company.

In case it is found that any of employees does not follow this code by engaging misconduct, the company reserves the right to take appropriate action against the guilty employee.

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Executive summary

As a customer centric organization, their activities are channelized towards satisfying clients by offering high utility products and efficient services. They understand that the needs of different clients vary and thus they manufacture products not only in standard but also in customized models. Association with National Tobacco companies enables them to deliver the ordered consignments timely and sagely. In addition to this, clients get the benefit of their excellent products and services at very affordable rates.

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Conclusion

They work in difficult terrains facing a myriad of challenges partnering a critical nation building objective of developing cigarettes manufacturing in the country.

Their people through their indomitable commitment surmount all obstacles to make it happen. Through their resolve and unbounded energy as their greatest assets, they help them achieve the national purpose and build the future of ntc industries limited in a responsible and inclusive manner. Their unwavering commitment to fulfill the expectation of their stakeholder in terms of quality, innovation and sustainability through an aligned work philosophy enables them to deliver upon this promise.

They believe that in an increasingly complex and competitive business landscape it is imperative to attract and retain talent and at the same time develop mutually rewarding, long term relationship with their employees who enable them to realize their vision and deliver value to all their stakeholders.

Suggestion To minimize the cost by reducing the lead time. To draw strong strategies to focus and capture the domestic

market. To increase reach among customers through promotional activities. To increase the workforce by recruiting more specialized people

having expertise in this particular field.