Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis-II - Question Paper

Finance

Arvind Mills is acclaimed in the Indian corporate field for its financial skills. Be it the phase of rapid growth or downturn; the company has demonstrated swift, sharp and robust financial acumen to navigate the company through various phases of economic cycles. Arvind Mills was the 1st textile company from India to problem GDRs in the year 1992-93. Highly complex financial restructuring exercise involving more than 80 domestic and international lenders which the company implemented subsequent the major downturn in the business cycle during year 2000-2002 is considered to be the benchmark for the Indian corporate. Arvind Mills has been making judicious option of fund-raising avenues in the domestic as well as international markets so as to construct very efficient capital structure, which is in the tune with operating risks and enhances the shareholders’ value.

Risk Management

The Company has laid down the Risk Management policy to manage the financial risks emerging out of currency and interest rate risks. It runs an active treasury desk so as to make use of modern hedging tools available to manage financial risks. Arvind Mills was the 1st Textile Company in India to implement ERP, SAP as back as in the year 1997-98. The company follows best accounting practices to prepare its financial statements as envisaged in the Indian and international accounting standards.

Utilities

Arvind established its own naphtha based combined cycle cogeneration plant in 1997. The identical has been converted into natural gas fuel. Being operated on natural gas fuel it is totally emission free and environment friendly. Arvind is serving the nation by preserving the precious resources with establishment of highly efficient combined cycle cogeneration plant both at Naroda and Santej (main 2 facilities). At the identical time it is also serving the objective to give stable, reliable, uninterrupted quality power and economic steam. The exhaust waste flue gases of gas turbines efficiently utilized to generate the high-pressure steam from Heat Recovery Steam generators, which again generate the power from steam turbine. The low pressure extracted steam from the steam turbines serve the steam requirement of the textile process. Almost 70 % of the heat energy of the fuel are being recovered. By achieving the highest availability constant production needs are being attained. By maintenance of constant quality power in terms of voltage and frequency which attributes to consistent production rate with less maintenance of the equipment.

Earning:   Approval pending.