Beruflich Dokumente
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SUGAR INDUSTRY
AT GLANCE
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INDIAN SUGAR INDUSTRY
1.1) INTRODUCTION:
Sugar originated from the Arabic word "sharkara" and is derived from the
sanskrit world "sharkara". Sugar is an important part of the daily diet and
forming a class of edible substances which includes sucrose, lactose, and
fructose. It provides the human body with requisite carbohydrates and is
basically extracted from sugar cane and sugar beet. Found in fruits, honey,
sorghum, sugar maple and in several other sources, it is the main ingredient of
candy which is loved by children the world over. Yet, it has been blamed for
causing tooth decay and excess consumption of sugar has been associated with
a host of ailments like diabetes, obesity, weight gain, depression, joint pain,
fatigue and insulin resistance and even cancer. Sugar is present in various forms
in fruits, honey, maple syrup and other natural sources. It is extracted by an
intricate process, whereby the pulp is extracted first and then, the remaining is
used for producing the sugar. Sugar has wide variety of uses and is used for
baking, sweets, alcoholic beverages, and even in the soap we use. Further, it is
also used as a food preservative and in confectionery items.
1.2) History:
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substantially and in Britain, all classes of people took to sugar and it has
become a part of their routine. Earlier, it was relegated to the upper echelons of
society, it, then, became a common commodity and became sufficiently
cheaper. Maximum consumption of sugar has been recorded from Belgium and
the least consumption is from Ethopia with an amount of three kilos per year.
2)Blanco direct
Blanco direct is a white sugar used much more in India and Asia and is
less purer than the white sugar. It undergoes the process of phosphation and is
more devoid of impurities. White refined sugar, popular in the West, is
processed by dissolving the raw sugar and purifying it with phosphoric acid or
by filtration strategies. White sugar is available in granulated form. Granulated
sugar includes coarse grained sugars such as sanding sugars, caster sugar and
superfine powdered sugar and they are divided on the basis of fineness of
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grades.
3)Brown sugars
Brown sugars are formed when sugars form fine crystals with high
molasses content or from coating white refined sugar with a cane molasses
syrup. Colour and taste becomes stronger with increasing molasses content . On
being exposed to air, they tend to harden and proper handling of this. Natural
sugars are found in their natural form and covers the most unrefined sugars and
includes the fruits, grains and vegetables. The World Health Organization has
approved the natural sugars as carbohydrates for unrestricted consumption
purposes.
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further contraction of production in the EU, on the other hand and a continuing
expansion of sugar output in Brazil, on the other hand are the four major
supply features of Sugar season 2008-
2009.
The Country’s sugar output touched a three year low. Sugar production
in 2008-09 season is set to fall by 44% from the previous season. In sugar
season 2008-09, production has declined to 147.50 lacs tones compared to
production of 263.28 lac tonnes in the year, 2007-08. One major reason for this
is the shrinkage in the sugarcane growing area in last couple of years due to
delay in cane payment and confusion over the price, less area of ratoon in this
season and poor monsoon in some parts of the country. The sugar industry is
cyclical in nature. It is dependent upon monsoons for both its production and
price realisation. Such a shortfall in sugar production has posed a serious threat
to inventory on hand. Drop in cane output may lead to increase in cost of
production for sugar companies and hit their profit margins in 2009.
Rising prices of sugar has caused concern to the Government and it has
intervened substantially to control the prices of the sugar, because it is one of
the essential commodities. The Government brought in measures such as
weekly quota for free sale, weekly reporting mechanism to monitor sugar
dispatches and sale, liberalized raw sugar import under Advance Authorization
Scheme [with change in export obligation norm from ‘grain-to-grain’ to
‘tonne-to tonne’ basis] and finally the facility to import raw sugar without
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export obligation as well as import of white sugar upto 10 lakh tonnes by
Government agencies, both at zero% customs duty. The Centre is also
planning to bring back Gur under the Sugarcane (control) order, 1996 to ensure
adequate cane supplies to sugar mills.
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1.12) Sugar Producing States in India:
SWOT ANALYSIS:
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SWOT analysis is a strategic planning method used to evaluate the
Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a
business venture. It involves specifying the objective of the business venture or
project and identifying the internal and external factors that are favorable and
unfavorable to achieving that objective. The technique is credited to Albert
Humphrey, who led a convention at Stanford University in the 1960s and 1970s
using data from Fortune 500 companies.
STRENGTHS
WEAKNESS
OPPRTUNITIES
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Prices to rise by 25% in fy09 and more in fy10e
Higher margins , lower cyclicality driving shift towerds integration
The on going increase in demand year after year
The shift of brazil from white sugar to production of ethanol.
THREATS
Less rainfall in the highest sugarcane cultivating regions
Due to water shortage the shift of the farmers to multiple crops
cultivation
Due to government policies the selling of sugarcane by the farmers to
private sectors
Sugar production being more volatile than cane production
Due to rise in domestic consumtion the export is likely to fall
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CHAPTERCHAPTER-2
DESIGN OF
THE STUDY
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2.1) TITLE OF THE STUDY:
Any business enterprise needs funds for its operations, investors are the
major ‘Source’ of fund apart from owners funds. From the above statement it is
clearly state that they need to be strong in managing resources and increase
there receivables and decrease the liabilities, to be strong in managing working
capital thus it is this problem, which prompted the researcher to take up the
study on financial statement analysis and working capital management.
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To measure the liquidity or the short-term solvency and to indicate
whether the company will be able to meet the short-term obligations out
of its resources.
2.5) METHODOLOGY:
Primary Data:
Primary data required for the study is collected from the Vishwanath Sugars ltd
Head office.
Secondary Data:
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This includes information relating too
Annual reports.
Internet.
REFRENCE PERIOD:
For the company under study, financial year is from March 2008-2009,
March 2007-2008, and March 2006-2007.
REVIEW OF LITERATURE:
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Financial management text books:
Prasanna Chandra.
I. M. Pandey.
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Cash: Cash is the money, which the firm can disburse immediately
without any restrictions.
Net sales: It is the gross sales less returns and allowances freight out and
cash discounts allowed.
• The figure and facts claimed in the annual reports and other forms are
assumed to be true.
• The out come of the study is based on the data given in the financial
statements so that there is always difference in the actual and the
calculated values.
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CHAPTER-3
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INTRODUCTION
TO FINANCE
INTRODUCTION TO FINANCE
Finance has been called “The science of money”. In studies the principles
and methods of obtaining control of money from those have saved it and the
administration of it by those in to whose control it passes.
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Finance is the business activity which is concerned with the acquisition
and conversation of capital funds in meeting financial needs and overall
objective of a business enterprise.
Introduction:
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There are two concepts of working capital:
There are two interpretation of working capital under the balance sheet
concept:
In the broad sense, the term working capital refers to gross working capital and
represents the amount of funds invested in current assets. Thus, the gross
working capital invested in total current assets of the enterprise. The gross
working capital concept is financial or going concern concept.
The term net working capital is the excess of current assets over current
liabilities. Net working capital is an accounting concept of working capital.
Cash in hand.
Cash in bank.
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Short-term loans and advances.
• Raw materials.
• Work-in-progress.
• Finished goods.
Prepaid expenses.
Accrued incomes.
Bills payable.
Dividends payable.
Bank overdraft.
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The circular flow of concept of working capital is based upon this operation or
working capital cycle of a firm. The cycle starts with the purchase of raw
material and other resources and ends with the realization of cash from sale of
finished goods. The speed/time duration required to complete one cycle
determination the requirements of working capital-longer the period of cycle
determines the requirements of working capital.
Working capital is the life blood and nerve center of a business. Working
capital is very essential to maintain the smooth running of a business. No
business can run successfully without an adequate amount of working capital.
Some of the importance or advantage of adequate working capital are as
follows:
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Solvency of the business: Adequate working capital helps in
maintaining solvency of the business by providing uninterrupted flow of
production.
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Quick and regular return on investment: Every investor wants a quick
and regular return on his investments. Sufficiency of working capital
enables a concern to pay quick and regular dividends to its investors as
there may not be much pressure to plough back profits. This gains the
confidence of its investors and creates a favorable market to rise
additional funds in the future.
Every business concern should have adequate working capital to run its
business operations. Both excess as well as short working capital positions are
bad for any business.
• Excessive working capital mans idle funds which earn no profits for the
business and hence the business cannot earn a proper rate of return on its
investments.
• When there is excessive working capital, relations with the banks and
other financial institutions may not be maintained.
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• Due to low rate of return on investments the value of shares may also fall.
• A concern which has inadequate working capital cannot pay its short –
term liabilities in time. Thus it will lose its reputation and shall not be
able to get good credit facilities.
• It cannot buy its requirement in bulk and cannot avail discounts, etc.
• The firm cannot pay day-to-day expenses of its operations and it creates
inefficiencies, increases costs and reduces the profits of business.
• The rate of return on investments also falls with the shortage of working
capital.
The need for working capital to meet the operation needs of a firm need
not be over emphasized. Every business needs some amount of working capital.
The need of working capital arises due to the time gap between production and
realization of cash from sales.
The amount of working capital needed goes on increasing with the growth
and expansion of business till it attains maturity. At maturity the amount of
working capital needed is called normal working capital.
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higher level of current assets or working capital while a liberal
management assumes greater risk by reducing working capital.
Cash management.
Receivable management.
Inventory management.
Cash Management:
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Cash management has assumed importance because it is the most significant of
all the current assets. It is required to meet business obligations and it is
unproductive when not used.
Receivable management:
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The investment in inventory is very high in most of the undertakings
engaged in Manu fracturing, whole-sale and retail trade. The amount of
investment is sometimes more in inventory than in other assets. It is necessary
for every management to give proper attention to inventory than in other assets.
It is necessary for every management to give proper attention to inventory
management. A proper planning of purchasing, handling, storing and
accounting should form a part of inventory management. An efficient system of
inventory management will determine what to purchase, how much to purchase,
from where to purchase, where to store etc.
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The ratio analysis is one of the most powerful tools of financial analysis. It is
used as a device to analysis and interprets the financial health of the enterprise.
The use of ratios is not confined to financial managers only. There are different
parties interested in the ratio analysis for knowing the financial position of a
firm for different purposes of a firm for different purposes. The suppliers of
goods on credit, banks, financial institutions, investors, shareholders and
management all make use of ratio analysis as a tool in evaluating the financial
positions and performance of a firm for granting credit, providing loans or
making investment in the firm. With use of ratio analysis, one can measure the
financial condition of a firm and one can point whether the condition is strong,
good, questionable or poor.
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solvency ratios will help him in assessing the financial position of the
concern. Profitability ratios, on the other hand will be useful to determine
the profitability position.
Ratio analysis is not only useful to management but also to outsiders like
creditors and investors.
Ratios computed from historical dated are used for predicting and
projecting the likely events in the future. Such ratios may provide a
glimpse of the firms past performance but the forecast for the future may
not be correct.
Profitability Ratios.
Activity Ratios.
Operating Ratios.
The long term liability financial stability of the firm may be considered as
dependent upon its ability to meet all its liabilities, including those not currently
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payable. The ratios which are important in measuring the long-term solvency
are as follows:
• Debt-Equity Ratio.
• Proprietary ratio.
• Dividend cover.
• Interest cover.
This ratio indicates the relationship between loan funds and net
worth of the company, which is known as gearing. If the
proportion of debt to equity is low, a company is said to be low-
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geared and vice versa. A debt equity ratio of 2:1 is the norm
accepted by financial institutions for financing of projects. The
higher the gearing, the more volatile the return to the shareholders.
3. Debt to net worth ratio: The ratio compares long- term debt to
the net worth of the firm i.e., the capital and free reserves less
intangible assets. This ratio is finer than the debt-equity ratio and
includes capital which is invested in fictitious assets like deferred
expenditure and carried forward losses. This ratio would be more
interest to the contributors of long term finance of the firm.
Net worth
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Capital Gearing Ratio = Fixed Interest bearing funds
5. Fixed assets to long term funds ratio: This ratio indicates the
proportion of long term funds deployed in fixed assets.
Fixed assets represent the gross fixed assets less
depreciation provided on this till date of calculation. Long
term funds include share capital, reserves and surplus and
long term loans. The higher the ratio indicates the safer the
funds available in case of liquidation. It also indicates the
proportion of long term funds that is invested in working
capital.
Long-Term
funds
7. Interest cover: The interest coverage ratio shows how many times
interest charges are covered by funds that are available for
payment of interest. An interest cover of 2:1 is considered
reasonable by financial institutions. A very high ratio indicates that
the firm is conservative in using debt and a very low ratio indicates
excessive use of debt.
Interest
Dividend
The short-term solvency ratios, which measure the liquidity of the firm and its
ability to meet its maturing short-term obligations. Liquidity is defined as the
ability to realize values in money the most of liquid assets. It refers to the
ability to pay in cash, the obligations that are due.
The corporate liquidity has two dimensions viz, quantitative and qualitative
concepts. The quantitative concept includes the quantum, structure and
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utilization of liquid assets and in the qualitative concept it is the ability to meet
all present and potential demands on cash from any source in a manner that
minimizes cost and maximizes the value of the firm. Thus, corporate liquidity is
a vital factor in business-excess liquidity, though a guarantor of solvency would
reflect lower profitability, deterioration in managerial efficiency, increased
speculation and unjustified expansion, extension of too liberal credit and
dividend policies.
Current ratio.
1. Current ratio: This ratio measures the solvency of the company in the
short-term. Current assets are those assets which can be converted into
cash within a year. Current liabilities and provisions are those liabilities
that are payable within a year. A current ratio of 2:1 indicates a highly
solvent position. A current ratio of 1.33:1 is considered by banks as the
minimum acceptable level for providing working capital finance. A high
current ratio may be due to the pilling up of inventory, inefficiency in
collection of debtors, high balances in cash and bank accounts with out
the proper investment.
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meet other current liabilities. A quick ratio of 1:1 indicates highly solvent
position. This ratio is called acid test ratio. This ratio serves as a
supplement to the current ratio in analyzing liquidity.
Quick Ratio or Liquidity Ratio = Current Assets, Loans & Advances – Inventories
Profitability Ratios:
The purpose of study and analysis of profitability ratios are to help assessing the
adequacy of profits earned by the company and also to discover whether
profitability of the firm is the net result of a large number of policies and
decisions. The profitability ratios show the combined effects of liquidity, asset
management and debt management on operating results. Profitability ratios are
measured with reference to sales, capital employed, total assets employed,
shareholders funds etc. The major profitability ratios are as follows:
Return on assets.
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1. Return on capital employed: The strategic aim of business enterprises
is to earn a return on capital. If in any particular case, the return on the
long-run is not satisfactory then the deficiency should be corrected or the
activity be abandoned for a more favorable one. Measuring the historical
performance of an investment centre calls for a comparison of the profits
that has been earned with capital employed.
Capital Employed
Earning per Share = Net Profit after tax and Preference Dividend
No of Equity Shares
3. Gross profit margin: The ratio measures the gross profit margin on the
total net sales made by the company. The gross profit represents the
excess of sales proceeds during the period under observation over their
costs, before taking into account administration, selling and distribution
and financing charges. The ratio measures the efficiency of the company
operations and this can be compared with the previous year’s results to
ascertain the efficiency partners with respect to the previous years. The
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gross profit margin may be compared with that of competitors in the
industry to assess the operational performance relative to the other
players in the industry.
Sales
4. Net profit margin: The ratio is designed to focus attention on the net
profit margin arising from business operations before interest and tax is
deducted. The convention is to express profit after tax and interest as a
percentage of sales. A draw back is that the percentage which a result
varies depending on the sources of employed to finance business activity,
interest is charged above the line while dividends are deducted below the
line. It is for this reason that the net profit earnings before interest and tax
(EBIT) are used. It is to be observed that majority of the costs debited to
the profit and loss account are fixed in nature and any increase in sales
will cause the cost per unit to decline because of the spread of same fixed
cost over the increased number of units sold.
Net Profit Margin = Net Profit before interest and Tax 100
Sales
Cash profit ratio measures the cash generation in the business as a result
of the operations expressed in terms of sales. The cash profit ratio is more
reliable indicator of performance where there are sharp fluctuations in the
profit before tax and net profit from year to year owing in depreciation
charged. It also facilitates inter-firm comparison of performance since
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different methods of depreciation may be adopted by different
companies.
Sales
Total Assets
Activity ratios measure how effectively the firm employs its resources. These
ratios are also called turnover ratios which involve comparison between the
level of sales and investments in various accounts inventories, debtors, fixed
assets, etc, activity ratios are used to measure the speed with which various
accounts are converted into sales or cash. The following activity ratios are
calculated for analysis:
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Average inventory
Current assets
Debtors:
Average debtors.
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Debtors collection period: Average debtors X 365
Credit sales
3. Bad debts to sales ratio: This ratio indicates the efficiency of the credit
control procedures of the company. Its level will depend on the type of
the business. Mail order companies have to accept a fairly high level of
bad debts, while retailing organizations should maintain very low levels
or, if they do not allow credit accounts, none at all. The actual ratio is
compared with the target or norm to decide whether or not acceptable
Sales
Purchases
Operating ratios:
The ratio of all operating expenses (i.e. materials, labour, factory overheads,
administration, and selling expenses) to sales is the operating ratio. A
comparison of the operating ratio would indicate whether the cost content is
high or low in the figure of sales. If the annual comparison shows that the sales
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has increased the management would be naturally interested and concerned to
know as to which element of the cost has gone up.
CHAPTER-4
COMPANY PROFILE
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VISHWANATH SUGARS LIMITED
BELLAD-BAGEWADI
4.1) PROFILE OF THE COMPANY
Vishwanath Sugars Ltd., was a pioneer in the exporting of power to other
industry. Situated in state of Karnataka, it combines for technology and the
latest. Mechanization and compliments with a two years experience result, High
quality sugar.
Alongside, the factory waste namely molasses is used for organo
Chemicals industrial alcogol/rectified spirit is manufacture with the sugar
waste. This VSL company is also looking towards venturing into plant a new
plant for production.
4.2) History:
Vishwanath sugars ltd entered the sugar industry in the late nineties.
Based in the Indian State of Karnataka, it began operations by setting up one
sugar factory, of which used a scientific method of cultivation. Despite
increasing emphasis on traditional cultivation methods, Vishwanath sugars ltd
was among the few to introduce modernity to this industry.
Sugar factories in Maharashtra were being victimized through state
policies Private farms were being nationalized and the co-operative movement
quickened the pace of ultimate closure of these farms. This was unfortunate
because the yields from these belts of sugarcane were among the best in the
world. The yield of cane was 64 ton per acre, recovery of sugar was 11.5% per
acre and yield of sugar was 7.36 tons per acre. Realizing that it could no longer
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work towards its full potential, the opened Vishwanath Sugars Ltd at Bellad
Bagewadi in Karnataka State.
In 2002, the foundation stone at the factory of Vishwanath sugars ltd was
laid by then Governor of Karnataka. Due to the prevalent India Pakistan war at
that time.
The factory was erection on a war footing and commissioned in a record
time of less than ten months. Production started in 2005.Today advanced
technology and a high level of Mechanization has made Vishwanath sugars ltd
one of India’s largest sugar producers. This Vishwanath sugars ltd company has
one of the highest average recovery rates in industry.
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Then he started his carrier as a Business man as a industrialist, when we
studied about his we would he was a visionary person and a hard worker and he
is a self made man and a good decision maker.
When we asked his employs their opinion was that “He is a kind hearted
Person and also a well knowledge person in the field of sugar industry and
distillery industry technical field.” When we asked for some more details they
told being a politician he is also a great industrialist. They also told that my
establishing this industry in rural place he is feeding thousand of family’s live
hoods. Being a agriculturist he understands the problems of farmers and poor
people and helped to solved the problems. When we asked the people of the
villages.
Shri Umesh V. Katti vision and foresight have led to this huge growth of
industry in Karnataka. Due to his belief in Humanity and faith in Almighty he
could transform his dream into reality.
4.4) Location:
Vishwanath sugars ltd is located at Bellad Bagewadi small village in the
Belgaum district of Karnataka Bellad Bagewadi lies in presented between two
rivers, Ghatprabha & Krishna. It falls under the command area of Hidkal dam,
on the Ghatprabha Left Bank canal, at the confluence of four townships
(talukas) , Mudhol, Jamakhandi, Raibag and Gokak.
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VSL always has and will continue to use renewable resources in its
products. We believe that this is an important need for sustainable development.
VSL has been and always is aware of its social commitment to the
community that it serves. We believe that we have a responsibility and
obligation to return to society what we earn from it.
VSL has a vision to adopt the most modern technologies and equipments
to improve the production of the company and to create more no of
employment.
VSL has an vision to help farmers present in the surrounding area and
help them in improving their yield totally they want to see rural development.
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4.7) MANAGEMENT TEAM:
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Mr.Ramesh V. Katti
Mr.Ramesh V. Katti is the vice chairman of the company. He is also
Bachelor of Arts from Hukkeri. He is also a Chairman of a Sugar cane factory
at Hukkeri.
Shri Mallikarjun Pujar
Managing Director of the company having more than 12 years of
experience in the filed of Sugar, Chemical and Power. He is Bachelor of Arts
having such a good experience he is good at managerial skills which helps
maintaining of people of the company.
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• We shall continually strive to improve the effectiveness of our quality
management system.
• We shall train and motivate our employees for continual improvement.
• We are conscious of our responsibility towards safety, Health and
Environment.
• Quality is what we think, and Believe.
SUGAR CANE
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RECTIFIED BIOGAS EXPORTABLE POWER BIO
SPIRIT POWDER FERTILIZER
1 Administration Department
2 Purchase Department
4 Production Department
5 Finance Department
Administration Department
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4. Sales Section.
5. Time office section.
6. Computer section.
7. Security section.
8. Telephone operating section.
1) SHARE SECTION:
The Share section is one of the important sections because more than half
of the total authorized capital is collected from shareholders. In this factory the
share are class
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2) PURCHASE SECTION :
Purchase officer
Clerks
Attenders
FUNCTIONS OF PURCHASE DEPARTMENT:-
A. Raising requisition :
It is the first step and necessity for particular can be used only by the user
of the material.
B. Scrutinizing requisition :
The manager scrutinizes the demand of materials. He examines
whether the item mentioned in the requisition note is necessary or not.
C. Vendor selection :
After scrutinizing, if a material is necessary then tender advertisement
is given or if they have permanent vendors. The manager chooses the power
vendor. The BOD does selection of vendors.
D. Enquiry :
After selecting a proper vendor enquiry is sent to the vendor.
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E. Receiving Quotation :
The purchase manager receives the quotations from vendors to whom
the enquiries are sent. Through there quotations a right vendor is chosen.
3) STORES SECTION
Stores keeper
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After receiving the materials from suppliers they seek the quality approval
of the same materials. After getting the approval materials are placed to the
respective to the racks they issue the materials by adapting FIFO method.
They issue the materials to the workers of the factory on loan and
retainable basis on daily loan or personal loan.
STORES ACCOUNT:
TOOL ROOM:
1. Transport register.
2. Approval memo book.
3. Bin card files.
4. Purchase order.
5. Stores purchase indent etc.
4) TIME OFFICE :
Time keeper
Clerks
Time office is one of the important sections of administration department.
There are 5 employees working in this department.
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Functions:
1. Showing the absent report to the HOD’s
2. To receive the attendance cards from the workers
3. To put attendance of the workers in the master role
4. It arranges the duty to the workers, maintains working bell
5. It maintains salary register book.
Types of Leaves:
1. Sick leaves :
Sick leave provided to employees 15 days per year
2. Casual leaves :
Casual leave provided to employees 12 days per year
3. Earn leaves :
If employee attends 30 days in a month then he is eligible for 3 days
Earn leave
Shift working :
In a shift of 8 hours the factory is providing 4 types of shifts.
Shift Time
I 4 am to 12 pm
II 12 pm to 8 pm
III 8 pm to 4 am
General Shift 8-30 am to 5-30 pm
5) SALES SECTION:
Sales officer
Godown clerk
Consultant Clarks
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In this section sales of the following products produced takes place are
sugar, molasses, bagasses and power. This factory is producing three types
of sugars they are M-30, S1-30 and S2-30 grades. And also it producing by
products like molasses, bagasses, press mud. These are used by factory it
self only like molasses and press mud are used in distillery / Ethanol
production and bagasses is used in production of power. And power is
exported to KPTCL.
This section will take care of all the sales transactions. The sale of sugar
is done according to the notification by the central government and has such
factories follows certain government rules in sales of sugar. Accordingly,
Karnataka state federation of co-operative sugar factories limited will give
figures of bags to sell within a month.
1. Free sale: Free sale is done within the country. Hear company will invite
tenders from different buyers at a 10 days notice. The sugar is sold to that
buyer who quotes or bids highest price. Tenders are called periodically. If
the rate is not satisfactory the tender will be cancelled. In free sale sugar
is being done to bulk purchases on the bases of tenders, these bulk
purchases then sell the purchased sugar to retailers.
2. Levy sale: It is also done within the state of Karnataka and being sold to
the government of Karnataka on levy bases. The government then
distributes outlets at predetermined, reasonable price.
3. Export: Sugar is sold outside the country on the contract bases.
According to the rules and regulation of the contract it will be done.
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6) COMPUTER SECTION:
7) SECURITY SECTION:
Security officer
Security guard
The security section is operating under the administrative department. It
is also working in three shifts as mentioned under time office section. Hear in
this department the employees are recruited on the yearly contract basis. There
are total 42 guards working in this section.
FACILITY TO WORKERS:-
1 Availability of rest house with TV facility.
2 Availability of quarters.
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3 Providing 2 wheelers for employees who are visiting the field to
supervise and check the availability cane.
4 Executive levels are provided with 4 wheelers.
5 Weekly one holiday of any in a week
FINANCE DEPARTMENT:
Accounts of finance department are the main and the hart of every
department of the company or industry. Hear in this factory, the accounts
section maintains all the transactions related to the factory dealings. The sale
accounts, purchase accounts, etc are maintained and this department prepares
P&L account, Balance sheet, etc.
In RSSK is divided finance department or accounts department in two sections.
1. General account section
2. Cane account section
In the above chart 50% of the labors are working in the general
account section and 50% are in the cane accounts section.
1. GENERAL ACCOUNTS SECTION:
In general accounts section book keeping is followed. General
account transactions like receipts and payments registers are maintained.
Receipts include sales process of sugar, molasses, share amount, etc. Payments
include salary, tax, etc. maintaining audit and audit rectification is done, annual
account and monthly account are prepared and maintained.
Some other types of registers are maintained by this section are:
a. Advance register
b. Contractors register
c. Contra register
d. Fixed assets register
e. Bank register
f. Expense register
Functions
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1) Its main function’s to finalize each & every record of the factory.
2) It prepares profit & loss a/c & balance sheet.
3) It executes financial activities in factory.
4) Ratio analysis.
5) Report to the management.
6) Conduction of meetings.
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Field Assistants Field Assistants
PRODUCTION DEPARTMENT
STRUCTURE
Laboratory Manufacturing
Chemist Chemist Page | 62
Laboratory Staff and Workers
Boys
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CHAPTER-5
ANALYSIS
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SCHEDULE OF CHANGES IN WORKING CAPITAL
2 FIXED ASSETS
Gross Block 1,800,795,673.04 965,574,561.26 835221111.78
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Working capital required:
No of Working Days
1) Raw Materials
No of working days
(Amount in Rupees)
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Working capital maintained by the company:
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RATIO
ANALYSIS
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Particular’s 2009 2008 2007
Debt 135,33,40,965.26 63,80,64,000 76,80,20,840
Equity 34,03,59,000.00 34,03,59,000 33,19,71,481
Ratio 3.97 1.87 2.31
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Total assets 2,18,79,33,329.91 152,67,00,000 110,46,90,466
Share holders equity: Equity shares+ Preference+ Reserves and surplus- losses (if any)
Net worth
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Long term debt 135,33,40,965.26 63,80,64,000 76,80,20,840
If we look at this ratio we can say the company is having more long term debts
than its net worth. So the company has to taken care of it. Here higher the ratio
higher the obligation and vice-versa.
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Particular’s 2009 2008 2007
If we look at this ratio the company is getting more and more long term funds
from year to year. This analysis states us that the company securing itself by
raising its long term funds. This raise the company’s capability of investment.
5) Current ratio:
Current liabilities
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Current assets 111,96,08,329.53 68,35,78,842.26 42,20,67,183.97
As the current ratio is moving downwards from year to year, it states us that the
company is becoming lesser capable to meet its short term obligations. If the
company’s current ratio goes lesser than 1 it would be very harmful to the
company. So the company has taken care of it.
6) Quick Ratio:
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Particular’s 2009 2008 2007
If we look at the quick ratio we can say that the company is not so consistent to
meet its short term debt obligations. By above analysis the company from 2007
to 2008 it had more capability of repaying its debt obligations and if compare
2008 to 2009 it has lost its capability of repayment of its debt obligations.
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Capital Employed
This position of the company states us that the company is fair enough in its
return on capital employed. The above analysis states us that the company as
compared to 2009 into 2008 it is not having fair margin and if we 2008 into
2007 it has gained good margin in it.
Net Profit Margin = Net Profit before interest and Tax 100
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Sales
2007
2008
2009
SUGGESTION AND
RECOMMENDATION
On the basis of analysis, the recommendation to further improves the
working capital management, which would level the company to greater
heights.
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1) As we seen in the current ratio, we can say that the company is
utilizing its equity fully. This states us that there is no unutilized
fund in the company.
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