INDUSTRY VISIT REPORT

OF

Prepared By : Saheli Biswas, Anurag Das

& Shaibal Bhattacharjee

-: Content:-

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

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.

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.

 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 customers 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.

Growth of industry

Business Type : 1) Manufacturer

2) Supplier 3) Exporter

Annual turnover: More than Rs. 500 lacs.

Product portfolio: Length

Shell & Slide HLP 10'S HLP 20'S Soft Cup 50 GMS POUCH 69mm Plain

Deluxe Tenor Virginia

64mm Filter

Regent Standard Regent Gold Regent Black Regent Standard No. 10

69mm Filter

Regent Miniking Regent Royale Regent Special Cool Smokette

84mm Filter

Regent Luxury Filter Maypole Jaipur General Aadie Ax Fx Goldmans Derby

Manufacturing capability

Indias 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 customers 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.

Segment Brand Name Domestic Cool Regent Miniking Regent Luxury Filter Regent Special Regent Royale Regent Standard NO.10 Deluxe Tenor Prince Henry smoking mixture Maypole and others

Nature Menthol filter Virginia filter Virginia filter Virginia filter Virginia filter Virginia filter Virginia filter Virginia non-filter Flavoured American type American blend

Available Size 84 mm and 69 mm 69 mm 84 mm 69 mm 69 mm 64 mm 69 mm 69 mm 50 gms pouch 84 mm

Geographical Area Western , Southern India Southern, Eastern India Eastern India Eastern India Northern, Eastern India Eastern India Northern India Northern India Eastern India Central and South America

Segment Brand name Nature Available size Geographical area

Export

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

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)

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 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 29.01 1.69 3.98 6.62 41.30 3.47 1.47 4.94 1.55 1.10 2.29 0.29 2.00 -0.30 1.70 14.44 14.44 29.46 0.91 4.20 3.61 38.17 1.59 0.40 2.00 0.72 0.98 0.30 0.01 0.28 0.28 12.74 12.74 8.35 0.62 3.26 1.37 0.75 14.34 -3.74 5.35 1.61 0.45 0.96 0.20 0.07 0.13 0.01 -0.03 0.11 12.46 12.46 1.53 0.37 3.07 0.95 0.34 6.27 -3.20 4.33 1.13 0.07 1.05 0.01 0.33 -0.32 0.20 -0.09 -0.21 12.35 12.35 -16.80 37.36 3.28 2.33 1.97 28.14 -1.45 6.90 5.45 1.98 1.47 2.00 0.30 1.71 0.81 0.18 2.69 23.68 0.54 0.09 23.05 44.77 39.76 10.60 3.07 26.70 Mar ' 12 Mar ' 11 Mar ' 10 Mar ' 09

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

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

Mar ' 13

Mar ' 12

Mar ' 11

Mar ' 10

Mar ' 09

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 Sales Operating profit Interest Gross profit EPS (Rs) 3.93 0.57 0.31 0.44 0.11 Sep' 13 5.64 1.84 0.26 2.11 1.98 Jun' 13 4.56 0.84 0.27 0.85 0.55 Mar' 13 9.56 0.52 0.47 0.57 -0.28 Dec' 12 10.42 0.77 0.36 0.68 0.37

Marketing Position
Peer Comparison
Company Market Cap (Rs. in Cr.) P/E (TTM) (x) P/BV (TTM) (x) 12.84 3.24 8.63 -0.53 0.66 EV/EBIDTA (x) ROE (%) ROCE (%) D/E (x)

ITC Godfrey Phillips VST Inds. Golden Tobacco NTC Inds.

285,519.27 3,372.46 2,591.22 34.60 19.24

33.84 15.23 19.48 0.00 6.83

20.78 8.91 11.02 0.00 5.67

36.2 15.4 43.0 0.0 6.0

52.1 17.8 62.7 0.0 8.8

0.00 0.32 0.00 0.00 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 supplychain & distribution network ensures that the products reach across the length & breadth of the country.

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 companys business.

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. 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.

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.

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.