A Project Report On Leverage Analysis at Satish Sugar LTD

A study on leverage analysis at Satish Sugar ltd
Chapter 1 2 3 4 5 6 7 8 9
Contents Executive Summary Objective of the study Methodology of data collection Profile of the Sugar Industry Company Profile Product Profile Organization chart SWOT analysis Department wise study Administration Department Finance Department Human Resource Department Quality control Department Stores department Production Department Marketing department
Page no
10 11 12 13 14 15
Analysis & interpretation of leverages and cost analysis Findings Suggestion Conclusion Bibliography Annexure
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EXCUTIVE SUMMARY All round development of all communities is at the heart of the activities of Satish sugars Ltd. [SSL]. Established with the principal objective of serving the society the through economic development and the motto being Growing with farmers SSL Has today grown to become a dynamic group of companies that makes a fine case of youthful spirit and far-sighted vision. The Group has covered the path of success adopting innovative approach and has left in its wake rays of hope for the people of Gokak and the surrounding regions. Mr. Satish L.Jarkiholi the man at the helm set the path of the group to widespread economic activities with an unwavering commitment and conviction Employment generation and community development were the primary goals behind the imitation to the activities of the group. The Satish sugars Ltd was established in 2000-01 promoted by Mr.Satish.L.Jarkiholi The production capacity of the industries is 5000 TCD per day and it manufacture of sugar and by products like molasses and bagasse, generation of power, distillation.
SATISH SUGARS
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Objective of the study: To study the organization.
1) To conduct the organization study and understand the practical aspects..
2) To know the effect on income of the firm due to change in sales volume
3) To provide the management with the information regarding financial
result if a specified level of activity or volume fluctuates

4) To Understand the cost incurred on manufacturing, administration,
selling and distribution of the company.
Methodology of information collected 1)Primary sources: Primary sources include information collected through discussion with the concerned department persons and external gide. 2 Secondary sources: The secondary data is collected for the three year from 2007/2008/2009. This data is collected from Annual report and published Data source data provided the company. The relevant supporting data is collected from Broacher, websites of the company .
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Profile of Sugar Industry INTRODUCTION India is the second largest producer of sugar in the world. The Indian sugar industry is the second largest agro industry located in the rural India. The Indian sugar industry has a turnover of Rs.500 billion per annum and it contributes almost Rs.22.5 billion to the central and state exchequer as tax, and excise duty every year. It is the second largest agro processing industry in the country. There are 493 sugar mills operating in India with an aggregate installed capacity of 16.2 million tones. Of these 152 are in private sector, 271 in the co-operative sector and 70 in public sectors. About 50 million sugar cane farmers and a large number of agricultural laborers are involved in sugar cane cultivation and ancillary activities, constituting 7.5% of the rural population. The industry provides employment to about 2 million skilled/semi-skilled workers and others mostly from the rural areas. The industry not only generates power for its own requirement but surplus power for export to the grid based on by product, Bagasse. It also produces ethyl alcohol, which is used for industrial and potable uses, and can be used to manufacture Ethanol, an eco friendly and renewable fuel for blending with petrol. The sugar industry in the country uses only sugar cane as input; hence, sugar companies are established in large sugar cane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu and Andhra Pradesh. In the year 2005-06, these six states contributed more than 85% of total sugar production in the country
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BRAZIL Sugar may gain as Brazil devotes more than 55% of its crops to ethanol. Rising oil prices have increased demand for alternative fuels, such as sugar based ethanol which can be mixed with gasoline to cut fuel costs. This will continue to keep sugar prices at higher level. EUROPE EU is dismantling a preferential scheme for sugar improved from ACP countries cutting the price t pays by 36% over the next four years starting this month. This will be creating a level playing field for all and also help n sustaining sugar prices in the world. UNITED STATES OF AMERICA The U.S. may allow 22% more refined sugar and specially sugar to be imported. The supply will probably come from Central America or Brazil. The import quota of raw sugar imported in 12 months is ending on September 30th of this year. MEXICO The United States and Mexico have ended a heated decade long dispute over sugar and sweetener trade lifting all barriers from 2008 under the North American free trade agreement. The two countries agreed to reciprocal free tariff free import quotes prior to 2008. The deal allows free trade from 2008 in the products that go to make coke and other soft drinks and is also heavily used in the baking industry. It includes the U.S. accepting 500000 tones of sugar imported from Mexico tariff-free between 2006 and 2007 and Mexico taking 500000 tones of hight fructose core of syrup from U.S producer.
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AUSTRALIA The Queensland govts sugar industry innovation Fund (S11F) has been successfully motivating sugar industry participant to adopt innovative management system & technologies. It has enabled increased production of value added product from sugar. Fostered the development of more efficient supply chain & will help secure a brighter future for cane farm families, Allied Business and communities SOUTH AFRICA Concession made by the EU to cut back on its sugar exports & allow imports From the world s poorest nations are sure to sweeten South African based sugar produced. Under the, which were announced last year, the EU is to cut sugar production & export, and the continent on an unlimited on an basis to the world s 48 poorest countries. However, also means that the profits the made the profits made through sugar exports from Africa will benefit the European food companies. MALAYSIA Refined sugar may be allowed to be imported soon to overcome a shortage. The Govt has received proposals from several parties to import refined sugar .The ministry has asked for more details like volume & most important the price. PAKISTAN Pakistan plan to keep raw/refined sugar imports duty free for another year to avoid any price spiral, as the current sugarcane crop wont meet domestic demand. The country needs a harvest of over 53 million tones to meet its annual sugar demand.
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VIETNAM The Vietnam sugar & sugarcane Association (VSA) has filed a pet ion with the Govt, asking it to stop licensing sugar import because domestic demand is more. The existing 36 sugar plants have output 1000000.
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Chapter 2 Company Profile. INTRODUCTION The Company was established with an all-encompassing view of around development of all communities. Satish Sugars Ltd. (SSL) established with the principal objective of serving the society through economic development, SSL has today grown to become a dynamic company that makes a fine case of youthful spirit and farsighted vision. The Company has covered the path of success adopting innovative approach and has left in its wake rays of hope for the people of Gokak and the surrounding region. Mr. Satish.L.Jarkiholi, the man at the helm, set the path of the Company to widespread economic activities with an unwavering commitment and conviction. Employment generation and community development were the primary goals behind the initiation to the activities of the Company. Today, it provides employment to nearly 500 people and has transformed the lives of thousands of families in the region. Indirectly has helped farmer community to stand with pride & self-respect and lead to financial stability of their families. The journey of SSL spanning diverse activities such as sugar mill, agriculture research, organic farming and community development makes a impressive tale. For every major stride taken by the Company, the community has taken a corresponding progressive step. Inspired by its success so far, the SSL has charted out ambitious plans for the future. Its projects in the anvil include a power generation unit, distillery unit, Aircraft charter and Aviation Pilot training & maintenance center. Most of these projects are community centric in nature and have the objective of creating a vibrant social atmosphere in Gokak. Its this vision of community-oriented business model is what sets Satish Sugars Ltd. Apart from the rest. It also spurs us to strive for people development even harder.
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The Satish Sugars Ltd. is one of the sugar producers in the state of Karnataka. The Company was incorporated on 12th April, 2000 as Khandari Sugar plant in the name of Gokak Power, Distilleries & Sugars (P) Ltd., (Annexure II) and name was modified to Satish Sugars Ltd. (Annexure IV) In 2004-05, the unit adopted Vacuum Pan Technology keeping in view its economic viability, efficiency and higher return on investment. The initial capacity of the reformed unit was 1250 TCD and in the trial season, the unit processed 51,406 tons of sugarcane in 2004-05 and registered a profit of Rs. 1.76 crore on a turnover of around Rs. 9.2crore. SSL has set a target of two lakhs tones of cane crushing for the year 2005-06 with a turnover of Rs.20.00crore and a net profit of Rs.2.50 crore. SSL has distributed seeds and fertilizers to needy farmers on a credit at low rate interest. This way, it has developed more than 2,500acres of land in 2004-05 and is developing 5,000acres in 2005-06 under the Registered cane Area Program. The Company has set an ambitious target of achieving a processing capacity of 10lakhs tones in the next five years. The future plans of the Company include generation of 20MW power from by-products and setting up of 30KL distillery unit. SSL is arduously working for the development of sugarcane cultivators. It regularly sponsors the visit of farmers to various states and National level agriculture fairs and organizes seminars and workshop on improved methods of sugarcane cultivation. Free training on scientific farming to children and encouragement to students with special talent in areas of education, culture and sports are other prominent community development activities undertaken by the company In view of the above, Mr. Satish Jarkiholi has developed sufficient exposure to become a successful entrepreneur. His foresight in the sugar and allied industries enabled him to take the following steps well in advance, even while executing the Khandsari Sugar Unit and keeping in mind the Government of Indias incentive scheme of 1977 to Khandsari sugar units to adopt vacuum
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pan technology, Mr. Jarkiholi had envisaged changing the technology along with suitable expansion even while implementing the Sugar Unit.
BOARD OF DIRECTORS Mr. Satish.L.Jarkiholli Smt. S. S. Jarkiholli Mr. Pradeep.M.Indi Mr. Vittal.R.Parasannavar Auditors: Mr. B.B.Amanagi Chartered Accountants Belgaum Bankers: Indian Bank Corporation Bank Chairman & M.D Director Director Director
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VISION AND MISION Mission Satish Sugars Group has set the goal of becoming a vibrant dynamic and professionally managed group of companies having a turnover of over Rs.1000 crore with a net profit of 5% by 2015, 25% of the net profit will be spent on a board-spectrum of community development activities such as Education, Healthcare, Culture, Sports and Social Welfare. This is in line with the groups motto of placing community before self and Social services before. Vision
To become the most efficient processor of sugar & the largest marketer of sugar and compete globally
PRODUCT PROFILE SUGAR The sugar produced in Satish Sugars Limited factory is both refined confirming to EC II grade with negligible sulphur content as well as plantation grade white sugar. The EC II grade sugar meets the European standards of refined sugar (Color of less than 45 IU) Sugar is a sweet, white or brown, usually crystalline substance obtained mainly from sugar cane or sugar beets and used commonly in food products. Sugar means something sweet in form of taste. Formula: 12CO2 + 11H2O = C12 H22O11 + 12O2 Carbon dioxide + water = sucrose + oxygen In chemistry, sugar refers to any of the class of carbohydrates to which this substance belongs. The chemist knows as sucrose one of the family of sugars otherwise known as saceharides as the name implies, contain carbon and hydrogen plus oxygen in the same ratio as in water.

The government controls sugar capacity additions through industrial licensing determines the price of the major input sugar cane, decides the quantity that can be sold in the open market, fixes the prices of the levy quarter sugar and determines maximum stock levels for wholesalers etc.
BY- PRODUCTS OF SUGARCANE: The sugar mill produces many by-products along with sugar. A typical sugarcane complex of 3000 TCD capacity can produce 345 ton of sugar, 6000 liters alcohol, 3 ton of yeast, 15 ton of potash fertilizer, 25 ton of pulp, 15 ton of wax, 150 ton of press-mud fertilizer and 750KW of power from Bagasse.
i.
MOLASSES Molasses is the final effluent obtained in the preparation of sugar by
repeated crystallization. It is the product from a refining process carried out yield sugar. Sucrose and invert sugars constitute a major portion (40 to 60%) of molasses. The yield of molasses per ton of sugarcane varies in the range of 3.5% to 4.5%. Molasses is mainly used for the manufacture of ethyl alcohol (ethanol), yeast and cattle feed. Ethanol in turn used to produce portable Liquor and downstream value added chemical such as acetone, acetic acid, butonol, acetic anhydride, MEG, etc. Some of the alcohol based chemicals like MEG, acetic acid, etc., face stiff competition from production through the petrochemical route. The government controls the export of molasses through export licenses issued for every quarter. Molasses and alcohol-based industries were decontrolled in 1993 and are being controlled by respective state government policies. Nearly 70% of molasses produced are consumed by the industrial alcohol manufactures and the remaining 30% is consumed by the portable alcohol sectors. ii. BAGASSE

Bagasse is a fibrous residue of cane stalk that is obtained after crushing and extraction of juice. It consists of water, fiber and relatively small quantities of soluble solids; the composition of Bagasse varies based on the variety of sugarcane, maturity of cane, method of harvesting and the efficiency of the sugar mill, the usual Bagasse composition is given as under: Content Moisture Fiber Soluble solids Range % 46-52 43-52 2-6
Bagasse is usually as a combustible in the furnaces to produce steam, which in turn used to generate power; it is also used as raw material for production of paper and as feedstock for cattle. iii. ETHANOL The company produces alcohol from the molasses (Molasses is the brown colored residue after sugar has been extracted from the juice. Molasses still contains some quantity of sugar, but this sugar cannot be extracted by usual technology) left after the extraction of sugarcane juice, which can be used both for potable purpose as well as an Industrial chemical. Further, this alcohol can be purified to produce fuel grade ethanol that can be blended with petrol. iv. BIO-FERTILIZERS The residue product from distillery operations blended with chemicals is sold as bio-fertilizers.
Chapter 3 MC KINSEY 7S MODES


7-S MODEL The 7-S model of Mc Kinsey is a Value Based Management (VBM) model that describes how one can holistically and effectively organize a company. Together these factors determine the way in which a corporation operates. The first three elements are strategy, structure and system are considered as hardware of success, the meet four elements are style, staff, skills and shared values/super ordinate goals are the software of any company.
Structur e Strategy Shared Values Style Staff System
Skills
According to the 7s MODEL
1) STRATEGY

The way in which a business aims to improve its positions relation to its competition is embodies in its strategy or the way of doing something in an organization. In SSL, introduce new technologies and products strategies importance in time with national objective to improve quality reliability of products there by attaining the international standards. 2) SYSTEM System refers to how the production system, distribution, information system and security system is maintained in its company.
Production System The process of production consists of input as sugar cane and output as the sugar. First the Cane will be crushed in five mills. Juice will be transferred to boiling Stations. In the boiling station, for the purpose of purification Sulphur and lime powder will be added in proper proportion.
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A study on leverage analysis at Satish Sugar ltd Plantation White Sugar Process
Weighted and Prepared Cane Cane Milling / Crushing Sulphatation Press Mud Clarification
Bio Composing
Juice Evaporation
Syrup
A Plan Boiling
A Massecuite
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Cetrifugation Sugar
A Molasses
Drying and Cooling
B Massecuite
Packed as plantation white Sugar
Centrifugation B Sugar used in a boiling as seed
B Molasses
C Massecuite
Centrifugation
C Sugar used in a
boiling
Final Molasses
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Distribution System The distribution system of the sugar produced is in the following system. Indirect sales are made outside the country and the depot sales are made. The producers are also sold directly to the consumer or sold to the wholesales. Information System Structure of Information System also
CHAIRMAN
MANAGING
SENIOR GENERAL
HEAD OF THE
SECTION
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Security System The SSL has strict Security system. In the maintenance of accounts after the record have closed, the records are kept in the room is opened only with permission of higher authority. If the visitors went to inter they have to take prior permission with the authority and after entering they are not suppose to go any dept other them the department from whom they took the permission. 3) STRUCTURE:
The following departments carry out the general admission of the company and are in the order of downward communication in the company. The information flows from the top level of management to the lower levels.
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ORGANIZATIONAL STRUCTURE BOARD OF DIRECTORS CHAIRMAN AND MANAGING DIRECTOR
EXECUTIVE DIRECTOR
EXECUTIVE DIRECTOR
GENERAL MANAGER ASST.GENERAL MANEGER
MANAGER CHIEF MANAGER TECHNICAL DISTLR
COMPANY SECRETARY
MANAGER CANE ASST. MANAGER
MANAGER HRD
MANAGER ADMIN
MANAGER LEGAL
CE MANAGER DY.CE DISTLR
CC DY.CE
(CANE) ZONAL INCHARGE FIELD ASST
LAISIONING BLR GEN ADMIN VEHICLES ETP
LAISIONING DELHI
EXECUTIVES
ENG
CIVIL
STORE
ASST MANAGER ASST MANAGER NEW PROJECT (A/CS) (COMPRL) MARKETTING PROJECT CO COORDINATOR ETP OFFICER ORDINATOR TRAINING HR WELFARE TIME OFFICE SECURITY GUEST HOUSE
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4) STYLE The style, which is portrayed to outside world, is derived from the style and behaviors exhibits inside organization. The internal style of the organization effects new staff feels thinks and does their jobs. Therefore an organization is reflection of its structure. 5) SHARED VALUES/SUPER ORDINATE GOALS.
Shared values are reefers to company policies. In Gokak Sugar Company limited the following policies are maintained. Safety Policy Quality Policy Environment policy T.P.M Policy [ Total Productivity Management] Safety Policy We at SSL engaged to producing white crystal sugar will always aim to providing absolute safety to every person employed in the company from any risk and danger by adopting safe working methods. Safety objectives We believe that accidents are preventable. We will fallow all the rules regarding safety. Our policy is to maintain safety beyond compromise. We believe that rules are sacred and must be observed. Our Motto-No. accidents due to human failure.
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Quality Policy We at SSL, engaged in producing while crystal Sugar will always strive for product, Quality by adopting latest technology disciplined quality management system. continuous improvement in working methods etc. wants to be market techniques. Quality Objectives
it
leader in its field of operation following innovative
Production of best quality sugar satisfying domestic and international norms. Strive to conduct the operation by preserving the quality of the environment. Motivation of employees through training and retraining for improving Operational performance.
Environment Policy The SSL is committed to comply with the requirement of relevant environment regulation and the standards by implementing environment management system and continually improve its effectiveness. Total Productive Management Policy The SSL is committed in maximizing limited is committed in maximizing over all plants effectiveness to make Gokak Sugar Company a World class company through total productive manufactured by. Prompting automates maintains culture. Involving all employees and building culture. Minimizing the losses and reduced the cost.
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6)
STAFF
Good hard working citizens play essential role in the development of nation. The employee is responsible for the success or failure of company. The company has totally 650 workers are working is the company. They are categorized as following. 1) Permanent workers 2) Seasonal workers 3) Probationary worker 4) Daily wage worker 400 110 40 100 650 Company is paying salary of Rs. 25 lakhs per month to its workers. 7) SKILLS
Skills here refer to how the training will be given to the employees and employees. The training will be given in 2 months they are. a) On the job: This is one of the oldest method, under this method, the individual place is on the regular job and taught the skill necessary to perform that job on the job training has the advantage of giving first hand knowledge and experience under the actual working conditions. This is given to employees. b) Off the job: In this methods trainee is separated from the job situations and his attention is focused upon learning the material related to his future job performance. There is an opportunity for the trainees.
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Chapter 3 FUNCTIONAL DEPARTMENTS
FINANCE DEPARTMENT ENGINEARING DEPARTMENT ACCOUNTS DEPARTMENT CANE DEPARTMENT PROCESS DEPARTMENT HRD DEPARTMENT MAINTENANCE DEPARTMENT PURCHASE DEPARTMENT STORE DEPARTMENT PERSONAL AND ADMINISTRATIVE DEPARTMENT
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FINANCE DEPARTMENT Finance department is very important in an organization. It is not just confined to raising funds, but extends beyond it to control the over utilization of funds and helps to monitor the utilization of funds raised. This function influences the operation of other essential functioning areas of the firm such as production, marketing and personal. FUNCTIONS OF FINANCE DEPARTMENT: Preparation of finance reports Preparation of annual budgets Budgetary control Scrutinizing of purchase bills and proposals Passing of all payment bills Maintenance of sales ledger Maintenance of all subsidiary books under the co-operative societies acts like cashbook, debtors, and salary register. Preparing of cost sheet Direction of internal auditing. There is an important section in finance department, which is the computer section. Computer section is newly modernized and has expert computer operators, which does the following functions: Maintaining records of sundry debtors of sugar Preparation of daily raw cane purchase bills Preparation of pay bills Daily generation of sales Cheque remittance etc.,
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PREPARATION OF FINAL ACCOUNTS The profit and loss account is prepared every month by highly experienced accountants. This enables effective monitoring of financial position and preparation of final accounts after the accounting year.
A BRIEF OUT LOOK OF THE FINANCIAL STATUS Share capital 40.50 Crores Member deposits 3.25 Crores Raw material consumed year 24.24 Crores Every year sales 17.70 lakhs Profit for the year ended was lakhs rupees
The balance sheet and the profit and loss account of the firm for the past few years are shown as below in the table.. From which we analyze the growth and development of the firm and also we obtain information regarding sources of funds and their allocation ENGINEERING DEPARTMENT In SSL the engineering department looks after mechanical, civil construction, improving production method. Simplifying of work and power generation and also deals with good working condition maintains of go down, installation of machinery etc. ACCOUNTS DEPARTMENT The SSL Gokak Sugar Companys growth in terms of turnover and profitability besides investment in the block of assets and working capital has been satisfactory over a period of time. Unless proper accounting of the various transitions of the companys taking place out systematically, the real control on the various functional areas of the company will be lost to the management.

All the transactions of the company will be accounted on accrual basis only except where deviations are permitted by the management through its accounting policies.
Main Functions are as follows Registration and scrutiny of sale orders pertaining to equipment and spare parts. Preparation and submission of invoice to customers for payment. Accounting of sales and sales realization. Receipt of cash, cheque and bank drafts etc and issue of official receipts for the same. Follow up or watch of transfer or receipt of funds to and from regions or district offices. Operation of bank accounts. Maintenance of journal, expense ledger and balance sheet. Preparation of trail balance, profit and loss account and balance sheet.
CANE DEPARTMENT In SSL cane department deals with registration of Sugar Cane with growers, good quality maintains, developing high yields and also term loans and subsides to the farmers who are growing sugar cane for this company and now giving seeds of sugar cane to grow variety sugar cane and this department has consultant to consult sugar cane and I/P.
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SSL has some Developmental Programmes for Cane The unit is undertaking cane development programmes which will be a part of its activities. They are. 1. Loans are provided to formers to take up new variety of cane activities. 2. Subsides are provided to farmers.
3.
Press mud and by products is supplied to farmer on fertilizers free to work
PROCESS DEPARTMENT Process department is given integral part of the organization. It looks afterward of different process of sugarcane into the consumer sugar. Process of Cane Cane will be crushed in five mills. Juice will be transferred to boiling Stations. In the boiling station for the purpose of purification Sulphur and lime powder will be added proportionality. By- products obtained and used for The following by products are obtained from the process.
1.
Molasses: This is the mother licker obtained of the sugar mesquite crystals.
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2. 3.
Press mud: The product gains in the settlers. Bagasse: Bio product obtains after the crushing of cane in the mill without Juice.
FLOWCHART OF SUGAR MANUFACTURING
Weighted cane Hauled to crushing yard Cane unloaded on to the carrier Cane cut into pieces Crushed in successive mills
Juice treated with lime and Surplus & heated
Dry chaff fed into boilers as fuel
Subsider
Scum
Clear juice Evaporat Concentrated Syrup
Filter cake used As manure
Clear juice
Surplus syrup to vacuum pans Boiler to mane cite Centrifugal
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Sugar
Molasses
Bagging
Dispatching
Power Alcohol
Portable Alcohol
HUMAN RESOURCE DEVELOPMENT DEPARTMENT The activities carried out are planning for human resources, requirements, welfare, and safety, training and legal matters. It even helps in providing necessary manpower and skills towards successful implementation of quality system. It also organizes the training activities of the employees. Security and Administration is for overall security maintenance of school, hospital and village administration. SSL caters for education up to class X (10th) both State Syllabus and CBSE for the benefits of employees children. They have started the officers club, social club, and welfare center, playground and parks, gardens, open era theaters etc. and many more. AREA OF FUNCTION OF SATISH SUGARS LTD Man power planning Recruitment and selection Placement, training and development Wage and salary administration Performance appraisal industrial relations Health and safety measures Employees state insurance benefits
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Disciplinary actions
Promotions, demotion and dismissal
FUNCTIONS: 1. Selection and recruitment of trainee workman, clerical staff and supervisory staff. 2. Induction of clerical supervisor staff. 3. Issue and badly of workman. 4. Issue of punching cards. 5. Attendance recording. 6. Leave Management. 7. Wage administration. 8. Bonus calculations and payments. 9. Performance appraisal of supervisory staff.
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10. Promotion and transfer of workman and clerical staff. 11. Sanitation of management. 12. Carry out safety promotional activities. 13. Reporting of accidents. 14. Checking canteen activities.
MAINTENANCE DEPARTMENT Totally there are 27 workers The members of filters are 12 The numbers of helpers are 13 There is only one welder. Maintenance department is a Mechanical department in which all the machines of this firm are repaired. If there are any major problems the machines are repaired by General-Shift-Workers. General-shift-workers are fixed for only one major problem, the general shift workers and other workers work in shift wise PURCHASE DEPARTMENT Purchasing procedure very considerably according to the needs of the organization and authority delegated to purchase managers the success of

organization is based on effective inventory management system and UN interrupted production schedule. This is achieved with adequate purchasing function. OBJECTIVES 1) To receive purchase requisition from the stores department production centers or any other authorized sources. 2) 3) To invite quotation from a number of suppliers. To make arrangements for the purchase of appropriate quantities at any given times. 4) To ensure the purchase of the correct quality under trade or brand name by sample, description. 5) 6) To follow up the orders placed. To receive incoming suppliers, verity quantity tests and inspects them. 7) To arrange for the storage and issue of materials.
STORES DEPARTMENT In this department all types of materials are stored. The purchase department purchases the materials and these materials are sending to stores department. Storekeepers send the sample of material to the lab for testing purpose. If the material satisfies all the tests specifications then the material will be stored and the transactions, which are related to this, are done in this department. Otherwise the goods will be rejected and sent back. The explanation should be given for the rejection of goods. The purpose officer receives the order slip from the marketing officer and this order slip will be sent to store department to check the raw material essential; to fulfill the order for a particular product of produce it. Further the stock statement is sent to the purpose department, which contents

the quantity that is the raw materials required for a particular product or produce it. From this the purpose officer will come to know that how much quantity is required. And whenever there is not much stock in stores department the store keeper will inform the purpose officer and in turn he will give instruction to purchase that particular materials.
PERSONNEL AND ADMINISTRATION DEPARTMENT PERSONNEL DEPARTMENT: Objectives: 1. To look after the welfare of the employees. 2. It deals with appointments, job training to new employees. 3. They deal with safety health measures of the employees. 4. They provide necessary help or aid to the employees. 5. Control over the day to day activities. Workers get their week off but the staff gets holidays on Sunday. This department sanctions leaves to the employees. The employees get leave on national festival . Different wages are paid to the different labors depending on their experience, skill, performance and work. Wages are paid promptly and the incentives are also paid during the festivals. This department has direct
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contact with labors and sometimes personnel department acts like a bridge between the labor and the management. ADMINISTRATION DEPARTMENT The Administration Department looks after the administration of the company. This department consists of the top-level management. 1. 2. Administration Department has an aerial lockout over all the departments. Progress of the entire department is sent to this department. So that the administration department prepares the progress sheet after the end of certain period. 3. 4. 5. 6. Administration function includes training of administrative staff. This department looks after the wages and salaries of the staff. This department has to answer for any Enquire done by the Govt. This department controls over the flow of funds along with the accounts department.
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Chapter 5 SWOT ANALSIS STRENGTHS: Raw material is available easily in near locations. Well established since long time. Strong network from all aspects-location, transport and Good financial supports whenever needed are provided Location in the heart of the city. Concept of Multi joint-products New power plant, which is constructing now, is
infrastructure. by both State and Central Governments.
needed for future growth.


Sound Management.
WEAKNESS: There is less power to management to take decisions Absent of motivating incentives. Lot of training required for all levels of employees. Company has been facing stress-related issues. Decrease in the production of row materials due to
directly.
natural calamities like, Flood etc.
OPPORTUNITIES: Implement change in technology. Establishment of New Units. Frame proper policies and procedures.
THREATS: Competition by other units Decrease in Sugar growth. Diversified resources such as raw materials due to many sub unit initializations. Government Regulations.
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Future planes: The company has to improve its canteen facility; it must arrange a good building to canteen. It looks pretty awesome if company makes uniform for all workers. The company has to consider internal experienced employee also while making a higher postings. Making of company shares as LISTED is good decision in todays competitive world.
Leverage analysis
Leverage means: Is the employment of an asset/sources of a finance for

which firm pays fixed cost/ fixed return. Leverage may be defined as relative change in profit due to the change in sales. A high degree of leverage implies that that a large change in profit occurs due to a relatively small change in the sales if earnings less the variable cost exceeds the fixed return requirement the leverage is called favorable when they do not the result is unfavourableleverage.
Important of leverages:
1.Leverages is to set forth a framework for the financing decision of firm.
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2 The sources may be for the purposes of exposition, classified into those which carry a fixed of return. 3The ordinary shareholders is affected by the magnitude of debt in the capital structure of the firm. 4 The fixed returns on some source of finance have implication for those who are entitled to variable return.
Types of leverage:
1)Operating leverage 2)Financial leverage 3)Combined leverage
Income statement
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Particulars 2006/7 (Amt in Rs.) Sales Less: variable cost Contribution Less: fixed cost EBIT Less: interest EBT Less: Tax Net profit 5,34,094,000.00 5,77,590,00.00 4,76,335,000.00 4,23,695,000.00 5,26,400,00.00 2,00,500,00.00 3,25,900,00.00 3,87,2000.00 2,871,80,00.00 2007/08 (Amt in Rs.) 9,28,124,000.00 1,19,614,000.00 8,08,510,000.00 6,40,888,000.00 1,67,622,000.00 7,33,780,00.00 9,42,440,00.00 1,09,090,00.00 8,33,350,00.00 2008/09 (Amt in Rs.) 1,41,841,5149.00 9,68,234,69.00 1,32,159,16.00 1,00,878,9979.00 3,12,801,701.00 1,43,377,399.00 1,69,424,302.00 1,13,300,00.00 1,58,094,302.00
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1)Operating leverage: The operating leverage affects a firm operating profit. It result from the existence of fixed operating expenses in the firms income stream. The degree of the leverage is defined as the percentage of change in the earnings before interest and taxes relative to given percentage change in sales. Operating leverage refers to the use of fixed cost in the operation of a firm from will not have operating leverage. if its ratio a firm given sales produce same percentage change in operating profit. if the firm has fixed cost the percentage change in operating profit would be more for given percentage change in sales. Operating profit of a highly levered firm would increase at a faster rate for any given increase in sales. However if sales falls it will suffer a more loss. Formula: Degree of operating leverages=Contribution/EBIT Here EBIT indicates earning before interest and taxes
Degree of Operating leverage
Year
Contribution
EBIT
DOL=contribution/ EBIT
2006/07 2007/08 2008/09
4,76,335,000.00 8,08,510,000.00 1,32,159,1680.00
5,26,400,00.00 1,67,622,000.00 3,12,801,701.00
9.04 4.82 4.22
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INTERPRETATION:
Table reveals: The degree of operating leverage very much greater than first for all years of the study period. This high degree of OL indicates higher indicates high senility of EBIT to change in sales. The DOL is very much higher indicating a very high operating risk. In view of this there is need to reduce operating risk by reducing fixed costs ,increasing sales changing sales mix etc. 2)Financial leverage: The use of the fixed charges sources of funds such as debt and preference capital along with the owners equity in the capital structure as financial leverage. The financial leverage employed by a company is intended to earn more return on fixed charge funds more than their costs. The surplus will increase on the return on the owners equity. The role of the financial leverages in magnify the return of the shareholders is based on the assumption that the fixed charge funds can be obtained at a cost lower than the firms rate of return on net assets. Degree of financial leverage can be calculated by using the following formula.
DFL=EBIT/EBT
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Where: DFL=Degree of financial leverage EBIT=Earning before interest and tax EBT=Earning before tax.
Degree of Financial leverage
Year 2006/07 2007/08 2008/09
EBIT 5,26,400,00.00 1,67,622,000.00 3,12,801,701.00
EBT 3,25,900,00.00 9,42,440,00.00 1,69,424,302.00
DFL=EBIT/EBT 1.61 1.77 1.84
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INTERPREATION: Table 2 reveals that: The DFL is slightly higher 1 for all the years of the study. This low degree of financial leverage indicates a low sensitivity if EBT to change in EBIT. It also indicates low financial risks. in view of this the firm needs to maintain this so as to keep this level of low financial risk constant.
3)Combined leverages: The operating leverage has its effects on operating risk and measured by the percentage change in EBIT due to percentage change in sales. The financial leverage has its effects on financial risk and is measured by the percentage change in EPS due to percentage change in EBIT. The degree of combined leverage can work in either direction. It will be favorable if sales increase and unfavorable when sales decrease because change in sales will result in more than proportionate returns in the form of EPS. Formula: Degree of combined leverage =Operating leverage* financial leverage.
Degree of combined leverage
Year 2006/07 2007/08 2008/09
DCL=DOL*DFL 9.0489*1.615219 4.82341*1.778595 4.22501436*1.846262
TOTAL 14.61595 8.578892 7.8004828
Page 45
Leverages objectives: 1) To ascertain the minimum sales to cover the cost and avoid losses. 2)To ascertain the sales volume necessary for the business to achieve the profit. 3) To study the operating leverage to evaluate the investment in debts through the financial leverage.
Findings of leverages
1 In this organization the operating leverage is very much higher than first year compared to all the periods of the study 2)It was 9.04 in the year 2006/07 which has decreased to 4.82 in the year.2007/08 and again decreased to 4.22 in the year of 2008/09.

3 )The financial leverage is slightly higher than first in all the years of the study. It was 2006/07 -1.61, 2007/08-1.77 and 2008/09-1.84.
Suggestions
The firm should maintain the sales to total cost proportion as it was maintained in the year 2007-08 and 2008-09. The firm should maintain the its operating leverage at the current level. Firms financial leverage is fluctuating year by year in the periods of the study, so it should manage its fixed financial obligation at the required level, so that it is favorably financial levered.
Page 47
Cost analysis Introduction of cost Accounting Introduction : There is a quick deriving worlds of economic activity in this modern world. When the competition is the deciding fate of commercial and industrial units. Price of commodity or a service is the instrument to measure its success or failure. if price is a policy cost is the determent of this price. It is the cost which makes a unit to flourish or kiss the dust. That is why every management should keep abreast of its cost structure. Cost accounting defined as the Cost Accounting is defined as the body of concepts methods and procedures used to measure analyses or estimate the cost profitability and performance of individual products department and other segments of a companys operations for either internal or external use of both and to report on these questions to the interested parties. Is called cost Accounting. Advantages to the management: 1 It discloses profitability of activities. 2 It helps in cost control. 3 It helps In inventory control. 4 It aids in formulating policies. 5 It helps In decision making. Scope of cost Accounting: Means what exactly we study in cost accounting. So the scope of the cost a accounting is wide. It covers the following aspects. 1)Cost 2)Cost presentation 3)Cost control.
ascertainment

Costing means: Techniques and process of ascertaining costs. These techniques are the rules and regulations to govern or regulate the process of ascertaining the costs or services. Therefore these rules and regulations are carried from unit to unit immediately to the industry and to the formation of the policy.
Cost Accountancy: Cost Accountancy as the application of costing and cost accounting principles methods and ascertainment of profitability as well as presentation of information for the purpose of managerial decision making. Is called cost Accountancy. Advantages of cost Accountancy: 1) The cost accountancy are to ascertain the cost of production profitability of the industry and help in controlling the cost. 2) It is widely used term which includes costing cost accounting and cost accountancy.
Importantances of cost Accountancy: 1) The main purpose of the cost accounting is to provide detailed cost information to the management. 2) Maintains of cost accounts is voluntary. 3) It is estimated price. 4) Costs are classified into direct and indirect or element wise. 5) It shows the detailed profit and loss of each product, department process etc.
Cost analysis means: Cost means the essential parts or components of goods or services or jobs. In otherworlds elements of cost is part of the total cost and includes the main item of expenditure incurred for production of goods services and jobs.
Importance of cost analysis: 1)It helps the management for implementing cost control and decision making.

2)It helps for calculation of cost of production. 3)It helps for valuation of work in progress.
Cost Sheet: Cost sheet is a document which provides for the presentation of the estimated detailed cost in respect of a cost cadre or a cost unit. The statement summaries the cost of manufacturing a particular list of product and discloses,1 The prime cost 2.Work cost 3.Cost of production 4 Total cost.
Purposes of cost sheet: 1)It gives the breakup of total cost by element and sub divisions. 2)It discloses the total cost as well as the cost per unit of production. 3)It helps for comparisons 4)It helps for preparation of tenders and quotations.
5)It helps for fixing selling price.
Page 50
Specimen of cost sheet for the period of 31st march 2007 Particulars Direct materials: Opening stock of raw materials Add: Purchases of raw material Carriage inwards Less: Closing stock Material consumed Add: Factory over heads: 1)Consumption of chemicals 2)Power, fuel and water 3)Repairs and Maintenance 4)Industrial tour exp Add: Opening work in progress Less: Closing stock Work cost Add: Administrative overhead 1)insurance 2)Rent 3)Rates,Taxes&other fees 4)Printing and stationery 5)Director fees 6)Auditors fees Cost of production 1,38,000.00 1,50,1000.00 7,92,000.00 1,40,2000.00 4,20,000.00 25,000.00 = 4,27,8000.00
Page 51
Total unit
cost
per
3,54,930,00.00 1,80,550,00.00 2,80,0000.00
_ _ 5,63,480,00.00
3,29,1000.00
4,73,7000.00 6,89,9000.00 1,72,000.00 3,71,5000.00 1,88,140,00.00 2,80,0000.00 =1,601,4000.00 -
Add: Opening stock of goods Less: closing stock Add:Purchage of manufactured _ goods
4,89,5000.00 =9,17,3000.00 1,07,20000.00 =1,54,7000.00
Less:Clo-stock Cost of goods sold Add: Selling overheads 1)Advertisement Cost of sales: Profit and loss Sales distribution -
=1,54,7000.00
9,06,000.00 =2,45,3000.00
5,34,097,000.00
Specimen of cost sheet for the period 31st march 2008
Page 52

Particulars Direct materials Add: Purchases of raw materials Prime cost Less:Clo-Stock Total Add: Factory Over head. 1)Consumption exp 2)Power &fuel 3)Repairs 4)Industrial exp Total 1,24,330,00.00 7,07,700,00.00 2,88,05000.00 4,36,8000.00 =9,90,59000.00 Add: Opening Progress Total Less:Clo-stock in progress Work cost Add: Administrative exp. 1)Insurance 2)Rent 3)Rates 4)Printing and stationery 5)Director fees 6)Audit fees 90,000.00 64,000.00 Total
Total cost per unit 3,021,7000.00 2,35,65000.00 5,37,82000.00 5,378,2000.00 7,40,6000.00 =4,63,76000.00
9,90,.0059000 2,80,.000000 1,018,59000.00 7,40,6000.00
=9,44,53000.00
8,75,000.00 1,43,9000.00 6,36,1000.00 1,14,3000.00
1,15,720,00.00 6,16,1000.00 1,77,33000.00 3,096,9000.00
Page 53
Add: Opening stock of goods Add:Purchage of manufacture exp
Less:Closeing stock Total:A
2,54,9000.00
4,6153000.00 study on leverage analysis at Satish Sugar ltd Add:Salleing and distribution exp. Advertisement 2,401,000.00 Cost of sales Profit and loss Sales 4,85,540,00.00 4,85,543,000.00 5,34,097,000.00
Findings of leverages and cost sheet: 1) In this organization the operating leverage is very much higher in the first year compared to all the periods of the study 2) It was 9.04 in the year 2006/07 which has decreased to 4.82 in the year.2007/08 and again decreased to 4.22 in the year of 2008/09. 3) The financial leverage is slightly higher in first year compare to other years. It is 1.61 in the year of 2006-07, 1.77 in the year of 2007/08 and 1.84 in the year of 2008/09. 4) The Administrative expenses have been increasing trend in every year from 2007 to 2009 at the years.
Page 54

5) The cost of material consumed is very high compared to previous year, in the year 2009 is showing very high and in the year 2007 is showing low. .
Suggestions : The fixed cost is very much higher it constitute the major part in total cost.
The firm should maintain the its operating leverage at the current level. Firms financial leverage is fluctuating year by year in the periods of the study, so it should manage its fixed financial obligation at the required level, so that it is favorably financial levered.
In the year 2009 the administrative cost is very much high ,so it should be control.
Page 55
Conclusion This project helps to know that the company operating in significant manner and the sales of the company increased from year to year and considerably profit also increased and some year the fixed cost is more so it needs to reduce its fixed cost.

The firm is favorably financial levered since it managed to keep its fixed financial obligations at the required level but its operating risk is very high because of high fixed costs and high operating leverage. This study helps to ascertain the cost per unit total cost production and to know the administrative expense. Cost sheet is the very important tool that analyses the cost of the company. Through this cost sheet we can improve in estimated cost sheet.
Bibliography
Financial Management by books used from which I have taken help for the theory part of the study:
M.V. Khan & P.K. Jain
www.satishsugars.co.org
www.google.co.in
PART 8
Page 58

Annexury Profit and Loss Account 2007-08
PARTICULARS SALES EXPENDITURE COST OF RAW MATERIAL MANUFAFACTURE EXP. PROFIT BEFORE INTEREST INTEREST DEPRICIATION PROFIT BEFORE TAX TAXATION PROFIT AFTER TAX ADD PROFIT FORWARD EARLIAR YEAR PROFIT AVAILABLE FOR APPRPPRITION
YEAR 2007 5,340.9 7
YEAR 2008 9,281.24
4,143.6 7 577.59 619.70 200.50 93.28 325.90 38.72 287.18 14.99 302.17
6,089.77 1,196.14 1995.32 733.78 319.11 942.42 109.09 833.33 302.17 1135.51
Page 59
BALNCE SHEET 2007-08
PARTICULAR SHARE HOLDERS FUNDS a) Share Capital b) Share Application Money c) Reserves and Money Total Loans nad Funds a) Secured Loans b) Unsecured Loans Total Total Funds APPLICATION FUNDS 1) Fixed Assets a) Gross Block b) Less Depreciation c) Net Block d) Work In Progress Total 2) Investments
YEAR200 7
YEAR200 8
2871.39 44.80 302.17 3218.36
2871.39 406.80 1135.51 4413.71
4405.86 20.10 4425.96 7644.33
8291.64 950.67 9242.32 13656.03
5632.90 180.06 5452.84 00 5452.84 3.17
9514.47 499.17 9015.29 224.31 9239.61 53.75
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CURRENT ASSETS LOANS ADVANCES A) Inventaries B) Sendry Debtors C) Cash and Bank Balance D) Other current Assets E) Loans and Advances Total Less Current Liabilities and Provisions a) Current Liabilities b) Provisions Total Net Current Assets 4)MISC. ASSETS 2114.02 74.28 4232.73 129.93 2443.44 37.09 2480.53 3671.46 155.82 3827.28
3334.40 338.44 263.59 147.75 510.36 4594.56
6114.67 402.69 882.96 129.23 530.45 8060.02
5) TOTAL ASSETS
7644.33
13656.03
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Page 62

A Project Report On Leverage Analysis at Satish Sugar LTD

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A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

result if a specified level of activity or volume fluctuates

selling and distribution of the company.

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

MOLASSES Molasses is the final effluent obtained in the preparation of sugar by

A study on leverage analysis at Satish Sugar ltd

Chapter 3 MC KINSEY 7S MODES

A study on leverage analysis at Satish Sugar ltd

Structur e Strategy Shared Values Style Staff System

According to the 7s MODEL

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

Drying and Cooling

Packed as plantation white Sugar

Centrifugation B Sugar used in a boiling as seed

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

GENERAL MANAGER ASST.GENERAL MANEGER

MANAGER CHIEF MANAGER TECHNICAL DISTLR

MANAGER CANE ASST. MANAGER

CE MANAGER DY.CE DISTLR

(CANE) ZONAL INCHARGE FIELD ASST

LAISIONING BLR GEN ADMIN VEHICLES ETP

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

leader in its field of operation following innovative

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

Press mud and by products is supplied to farmer on fertilizers free to work

A study on leverage analysis at Satish Sugar ltd

FLOWCHART OF SUGAR MANUFACTURING

Juice treated with lime and Surplus & heated

Dry chaff fed into boilers as fuel

Clear juice Evaporat Concentrated Syrup

Filter cake used As manure

Surplus syrup to vacuum pans Boiler to mane cite Centrifugal

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

A study on leverage analysis at Satish Sugar ltd

infrastructure. by both State and Central Governments.

needed for future growth.

A study on leverage analysis at Satish Sugar ltd

natural calamities like, Flood etc.

DCL=DOLDFL 9.04891.615219 4.823411.778595 4.225014361.846262