Sie sind auf Seite 1von 112

PROJECT REPORT ON

ANALYSIS OF FINANCIAL STATEMENTS


WITH SPECIAL REFERENCE TO

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT, CHIKODI.

SUBMITTED IN PARTIAL FULFILLMENT OF POST GRADUATION DEGREE OF MASTER OF COMMERCE

(Session 2012-2013)
UNDER THE GUIDENCE OF:

SUBMITTED BY:
HITESH. MITHALAL. SHAH M.COM III SEM Reg. No. MC111610

KLE SOCIETYS,

BASAVPRABHU KORE ARTS,

SCIENCE AND COMMERCE COLLEGE, CHIKODI.


(Affiliated to RANI CHANNAMMA UNIVERSITY, BELAGAVI)

S.L No. Chapter- 1

CONTENT EXECUTIVE SUMMARY Importance Of Financial Statement Analysis Need For The Study Objectives Of The Study Methodology Of The Report Scope Of The Study Limitations Of The Study Review Of Literature

PAGE NO.

Chapter- 2

COMPANY PROFILE
World Sugar Industry Scenario

Indian Industry Profile Company Profile Product Profile Chapter- 3 THEORETICAL FRAMEWORK ON FINANCIAL STATEMENT ANALYSIS. Definition Of Financial Statement Nature Of Financial Statements Conventions Uses And Importance Of Financial Statements Limitations Of Financial Statements Parties Interested In Financial Statements Analysis And Interpretation Of Financial Statements Types Of Financial Statements Tools Of Financial Analysis Used In The Study:

-Comparative Financial Statements -Common-Size Financial Statements -Trend Analysis -Ratio Analysis

Chapter- 4

DATA ANALYSIS AND INTERPRATION Calculation of Comparative financial statements


Comparative financial statements of Income For the year 2008-2009 Comparative financial statements of Balance sheet For the year 2008-2009 Comparative financial of Income For the year 2009-2010 Comparative financial statements of Balance sheet For the year 2009-2010 Comparative financial statements of Income For the year 20010-2011 Comparative financial statements of Balance Sheet For the year 2010-2010 Comparative financial statements of Income For the year 20011-2012 Comparative financial statements of Balance sheet For the year 20011-2012

Calculation of Common-size statements : Common-size statements of Income For the Year 2008 - 2009 Common-size statements of Balance sheet As on Year 2008 2009 Common-size statements of Income For the Year 2009 - 2010 Common-size statements of Balance sheet As on Year 2009 - 2010 Common-size statements of Income For the Year 2010 - 2011 Common-size statements of Balance sheet

For the Year 2010 - 2011 Common-size statements of Income For the Year 2011 - 2012 Common-size statements of Balance sheet For the Year 2011 - 2012 Calculation Of Trends of Financial Statements Trends of Income Statements For the year 2008-2009,2010 Trends of Income Statements For the year 2008-2011,2012 Trends of Balance Sheet For the year 2008-2009,2010 Trends of Balance Sheet For the year 2008-2011,2012 Chapter -5

FINDINGS, SUGGESTIONS & RECOMMENDATIONS AND CONCLUSION

PREFACE

As the world is growing rapidly, the businesses are also moving to become the huge one. And by that result, more and more people want to become a master in these businesses. The main purpose in the finance field is to know how the financial analysis is done. We all know that finance is the blood of any business and without it no business can run. Financial analysis of a company is very difficult and the most important task and by doing this I am able to know the whole financial position and financial structure of the company. Simply by looking at how much cash a company has does not provide enough information. The financial statements need to be analyzed to measure a companys performance and to compare it with other firms in the same industry. The resulting information is intended to be useful to owners, potential investors, creditors, analysts, and others as the analysis evaluates the past performance, future potential and financial position of the firm. This report is an analysis of financial statements of DKSSKN. This report has been prepared with an objective to develop analytical skills required to interpret the information (explicit as well a simplicit) provided by the financial statements and to measure the companys performance during the past few years. The financial statements are analyzed using traditional evaluation techniques such as Comparative Financial Statements, Common-Size Financial Statements, Trend Analysis and Ratio analysis. Details are given in chapter 3 of this report. I have tried to put my best effort to complete this task on the basis of skill that I have achieved during the last one year study in the institute. I have tried to put my maximum effort to get the accurate statistical data. However I would appreciate if any mistakes are

brought to my by the reader.

ACKNOWLEDGEMENT Gratitude is not a thing of expression; it is more a matter of feeling. It is my pleasure to be indebted to various people, who directly or indirectly contributed in the development of this work and who influenced my thinking, behaviour, and acts during the course of study. I express my sincere gratitude to , worthy Principal for providing me an opportunity to undergo my project report at D.K.S.S.K.N Chikodi. I deem it a proud privilege to extend my greatest sense of gratitude to my guide (EXTERNAL GUIDE) For the keen interest, inspiring guidance, continuous encouragement, valuable suggestions and constructive criticism throughout the pursuance of this report. I also extend my sincere appreciation to (INTERNAL GUIDE) Who provided her valuable suggestions and precious time in accomplishing my project report. Lastly, I would like to thank the almighty and my parents for their moral support and my friends with whom I shared my day-to-day experience and received lots of suggestions that improved my quality of work.

Thanking you

Place Date

: : (HITESH SHAH)

DECLARATION

I hereby declare that this project report entitled a study on CAPITAL BUDGETING with special reference to Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit, Chikodi, submitted here is genuine and original work of mine. This project report, written arid submitted to the under the guidance of , Project Guide is an original work carried out by me and is not submitted to any other University or Institution for the award of any Degree / Diploma / Certificate or publish any time before. The findings of this report are based on the information collected by me during the study period. I further state that I am alone responsible for omissions and commissions, if any.

Place : Date : (HITESH SHAH)

Chapter -1

EXECUTIVE SUMMARY

Importance Of Financial Statement Analysis Need For The Study Objectives Of The Study Methodology Of The Report Scope Of The Study Limitations Of The Study Review Of Literature

EXECUTIVE SUMMARY Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is being drawn. By financial statements by means of two Statements Profit and loss account or Income Statement. Balance Sheet or Position Statement. These are prepared at the end of a given period of time. They are the indicators of profitability and financial soundness of the business concern. The term financial analysis is also known as analysis and interpretation of financial statements. It refers to the establishing meaningful relationship between various items of the two financial statements i.e. Income statement and Position statement. It determines financial strength and weakness of the firm. Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. Thus, the analysis and interpretation of financial statements is very essential to measure the efficiency, profitability, financial soundness and future prospects of the business units. Financial analysis serves the following purposes. Indicating the trend of achievements

Financial statements of the previous years can be compared and the trend regarding various expenses, purchases, sales, gross profits and net profit etc can be ascertained. Value of assets and liabilities can be compared and the future prospects of the business can be envisaged. Assessing the growth potential of the business The trend and other analysis of the business provides information indicating the growth potential of the business. Comparative position in relation to other firms The purpose of financial statements analysis is to help the management to make a comparative study of the profitability of various firms, engaged in similar businesses. Such comparison also helps the management to study the position of their firm in respect of sales expenses, profitability and utilising capital, etc. Assess overall financial strength The purpose of financial analysis is to assess the financial strength of the business. Analysis also helps in taking decisions, whether funds required for the purchase of the new machines and equipments are provided from internal sources of the business or not if yes, how much? And also to assess how much funds have been received from external sources. Importance of Financial statement Analysis Financial statement analysis is very helpful in knowing the sugar factories internal operations and its relations with the outside world. Therefore, the financial information must be organized into anun derstandable, coherent and sufficiently limited set of data. The present project seeks to discuss the framework for investmen t & financing decision and also helps to expound several analytical methods which are in practice. An attempt has been made to analysis the financial statement of D.K.S.S.K.N. sugar factory. The investors relay on the financial statement and judge the factory and ensure that these statements are correct, complete, consistent and comparable. The accuracy of the financial statement can be identified from the report of the auditors. The financial statement analysis can be used by investors for deciding about their investments. The debentureholders, creditors, employees and government can also use the financial statements for different purposes.

NEED FOR THE STUDY To calculate the important financial terms of the organisation as a part of the financial analysis thereby to understand the changes the needs and trends in the firms financial position. To assess the performance of D.K.S.S.K on the basis of earnings and also to evaluate the solvency position of the company. To identify the financial strengths and weaknesses of the organization. To give the appropriate suggestions to the investors. To help them to make more informed decisions. OBJECTIVES OF THE STUDY To understand an item wise study of the company financial performance of the company. To suggest the possible measures for the improvement of and capital Budgeting financial position of an organization. To provide information about the financial position, performance and changes in financial position of an enterprise that are useful to wide range of users in making economic decision. To provide factual and interpretative information about transaction and other events which are useful for prediction, comparing, and evaluating enterprises earning power. Locate and use sources of information about company performance. Analyze the performance of a company using trend analysis, common-size financial statements and segment reporting METHODOLOGY OF THE REPORT STEPS OF METHODOLOGY COLLECTION OF DATA ORGANIZATION OF DATA PRESENTATION OF DATA

ANALYSIS OF DATA INTERPRETATION OF DATA COLLECTION OF DATA There are two methods of collection of data which are as follows:1. Primary Method 2. Secondary Method 1. Primary Method The primary data was not a part of my study, my every interpration and analysis is fully based in secondary data. 2. Secondary Method The methodology followed in conducting the study is to collect data regarding Sugar production in Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit, Chikodi. The secondary data is obtained from the following. a) Collection of required data from annual records, monthly records, internal Published book or profile of D.K.S.S.K.N.Chikodi. b) Other books and Journals and magazines c) Annual Reports of the company. d) Use of Internet.

ORGANISING THE DATA The information / data collected during data process are organizing and presented in a comprehensible sequence to make the understandable. The data, thus obtained is then edited, classified and put in a tabulated form to make it understandable. PRESENTATION OF DATA After organizing the data, it is ready for presentation. These are presented in different modes like charts, tables, and diagrams etc. the main objective of presentation is to put collected data into an easy reliable form. ANALYSIS OF DATA

After organizing and presenting the data, the researchers then have to proceed towards conclusions by logical inferences. The whole data is then analyzed: 1. By bringing raw data to measured data. 2. Summarizing the data 3. Applying analytical methods to manipulate the data so that their inter Relationship and quantitative meaning become evident. INTERPRETATION Interpretation is the last and main step of research methodology. Interpretation means to bring out meaning of data & to convert mere data into information. After analysis the data, various conclusion are found out on the basis of logical inferences. Without interpretation research study cant be completed. SCOPE OF THE STUDY The present study is undertaken with an intention that it would be helpful in assessing the financial position in the organization and to make recommendations for the improvement of requirements of D.K.S.S.K.N. The scope of the study is identified after and during the study is conducted. The study of financial statement analysis is based on tools like Comparative Financial Statements, Common-Size Financial Statements and Trend Analysis Further the study is based on last 5 years Annual Reports of D.K.S.S.K.N Chikodi. That is from accounting period from 2008 to 2012. Scope of the study is limited up to the availability of official records and Information provided by the employees. The industry and competitors analysis were not considered while preparing the project. The Study also highlights the present scenario of the Sugar Industry in the global market as a whole and the contribution of D.K.S.S.K.N in the Indian Market & State Market in Particular.

Thus a good deal of ground is covered in the study, including the trends of various components of financial statements, so as to find the effect of each component on decision-making. PROJECT TITLE: A STUDY OF FINANCIAL STATEMENT ANALYSIS WITH SPECIAL REFERANCE TO SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT CHIKODI STATEMENT OF THE PROBLEM: The statement of problem is pertained to THE STUDY OF FINANCIAL STATEMENT ANALYSIS AT SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT CHIKODI is directed towards evaluation of FINANCIAL STATEMENT ANALYSIS to ensure higher profitability, liquidity and sound structural health of organization. HYPOTHESIS: Three important hypotheses can be formulated from the interpretation of data, the following findings were made: 1. Proper analysis of financial statements may enhance the profitability and solvency position of the industry. 2. The application of the analysis and interpretation can spark towards the success or improper implementation may hinder it. 3. Proper judgement with financial analysis would make it easy to management with correct decision making. AREA OF STUDY: The study is confined to D.K.S.S.K.N Chikodi. PERIOD OF REFERENCE: The study is conducted with reference to the co-operative years 2008 to 2012. The selection of the years is conditioned by mere

convenience of the research study. Moreover, deliberately, the study was limited to five years only with a view to getting fuller and correct information of the D.K.S.S.K.N Chikodi.

LIMITATIONS OF THE STUDY The project has completed with annual report i.e., secondary data. There were limitations for the primary date. The project is based on five year annual reports of the company. It is difficult to collect the data regarding competitor and their financial information. The information is confined only with D.K.S.S.K. Hence it cannot be generalized to the entire sugar industry. Non-availability of confidential financial data. The economic and government policies etc., may affect the industry after the study which is not taken into consideration. The study will be only a provisional one based on the data collected from the report and accounts during the period and it is subject to refinement. Review of Literature Financial performance analysis is vital for the triumph of an enterprise. Financial performance analysis is an appraisal of the feasibility, solidity and fertility of a business, sub-business or mission. Altman and Eberhart (1994) reported the use of neural network in identification of distressed business by the Italian central bank. Using over 1,000 sampled firms with 10 financial ratios as independent variables, they found that the classification of neural networks was very close to that achieved by discriminant analysis. They concluded that the neural network is not a clearly dominant mathematical technique compared to traditional statistical techniques. Gepp and Kumar (2008) incorporated the time bias factor into the classic business failure prediction model. Using Altman (1968) and Ohlsons (1980) models to a matched sample of failed and non-failed firms from 1980s, they found that the predictive accuracy of Altmans model declined when applied against

the 1980s data. The findings explained the importance of incorporating the time factor in the traditional failure prediction models. Campbell (2008) constructed a multivariate prediction model that estimates the probability of bankruptcy reorganization for closely held firms. Six variables were used in developing the hypotheses and five were significant in distinguishing closely held firms that reorganize from those that liquidate. The five factors were firm size, asset profitability, the number of secured creditors, the presence of free assets, and the number of under-secured secured creditors. The prediction model correctly classified 78.5% of the sampled firms. This model is used as a decision aid when forming an expert opinion regarding a debtors likelihood of rehabilitation. No study has incorporated the financial performance analysis of the central public sector enterprises in Indian drug & pharmaceutical Industry. Nor has any previous research examined the solvency position, liquidity position, profitability analysis, operating efficiency and the prediction of financial health and viability of public sector drug & pharmaceutical enterprises in India.

CHAPTER - 2

COMPANY PROFILE

World Sugar Industry Scenario Indian Industry Profile Company Profile Product Profile

CHAPTER - 2

COMPANY PROFILE

I.

WORLD SUGAR INDUSTRY SCENARIO

Sugar is produced in over 100 countries worldwide. In most years, over 70% of world sugar production is consumed domestically and the remaining is traded in the world. However, a significant share

of this trade volume takes place under bilateral long-term agreements or on preferential terms. Since only a small proportion of world production is traded freely, small changes in production and government policies tend to have large effects on world sugar markets. As a result, sugar prices have been unstable in the world market. OVERVIEW OF THE WORLD SUGAR INDUSTRY AND SUGAR POLICIES For the 2007-2011 periods, annual global sugar production was approximately 157 million metric tons with about 33% of production exported from its country of origin. The largest sugar producing region is Brazil, followed by the India and the EU (Table 1). Table 1. World Sugar Supply and Utilization, 2007 to 2011 Average. Country/ Region Beet/ Cane Consum ption Production Net Exports Ending Per Stocks Capita Consum ption

----------1,000 metric tons, raw value------------ Kg Algeria Australia Brazil Canada China Cuba European Union Egypt Former Soviet Union India Indonesia Japan Korea Mexico South Africa Thailand United States Rest of World B C C B B/C C B B/C B/C C C B/C C C C B/C B/C 1,285 1,250 11,670 1,379 14,270 677 17,151 2,743 10,462 23,730 4,760 2,304 1,259 5,098 1,603 2,184 10,186 42,146 6 4,461 34,790 88 12,737 1,272 15,629 1,760 6,328 24,033 1,964 828 0 5,474 2,192 8,357 7,139 30,395 (1,273) 3,213 22,990 (1,299) (1,508) 685 (1,357) (974) (4,022) 1,262 (2,764) (1,460) (1,343) 752 639 6,244 (2,492) (15,688) 215 340 (375) 113 2,597 81 2,101 445 1,603 6,957 522 326 482 1,063 144 2,252 1,232 13,798 34 60 56 43 7 61 48 34 37 17 16 18 27 50 36 30 32 19

World

B/C

154,167

157,452 51,473 33,894 Source: USDA-FAS, PS&D website.

21

World Current market situation The world sugar market has experienced and continues to experience considerable price volatility. The world indicator price for raw sugar has witnessed a succession of peaks and downward corrections in 2010 before reaching to a 30-year high of USD 795/tone in February 2011.The reason for this global price volatility was global sugar deficit in previous two seasons due to failure of crops because of adverse seasonal condition which resulted in low production of sugar and due to high demand the prices has risen. World sugar stocks, which had already been drawn down, fell to their lowest level in 20 years in 2010-11, supporting higher as well as more volatile market prices. International sugar prices have eased in year 2012, as there was a bumper crop around the world which has resulted in fall of prices around the globe and the global balance moves into a larger surplus that allows the start of stock rebuilding.

2008 and 2009 world sugar balances were into negatives as the production was less than consumption. 2008 and 2009 were bad crop years due to seasonal adversities, and it has pushed the global sugar prices up. 2010 was a crop year as compared to a couple of previous year. 2011 has been a good year and sugar stock has risen considerably after 3 years.

Following is the list of Top 10 Sugar Producing Countries of the World as per United Nations Food and Agricultural Organization, FAOStat, 2011: S.No. 1 2 3 4 5 6 7 8 9 10 Country Brazil India China Mexico Thailand Pakistan Colombia Australia Indonesia USA Production (1000 tonnes ) 455,291 281,170 100,684 50,597 47,658 44,666 39,849 38,169 30,150 26,835
Source: OECD and FOA Secretariat

Global emerging trends

Global sugar demand will increase to 198 mn tonnes in 2021 Compared with 168mn tonnes in 2010. Asia will remain the biggest consumer of sugar, increasing its sh are of total consumption from around 45% in 2010, to 50% in 2 021. In Asia also China will be the biggest importer by 2020. Indias consumption will nearly double over the next 20 years an d Chinese consumption will overtake EU consumption in around 2014. By 2030, it is forecast that India and China will respectively con stitute 17.6% and 14.7% of the total global consumption.

Totalconsumption in Europe is expected to remain stable over th e next 20 years,with declining per capita consumption in several of the largest EU economies being offset by increasing consumpti on in less developed countries. Africa will begin to emerge as a major consumer, increasing its c ontribution in global consumption from 9% to 13% in 2030, with strong growth in several countries as a result of high rates of population and GDP growth. Asia is set to become the largest consumer of sugar by 2020 and it will be consuming half of the world sugar, china and India will be the largest consumers in Asia. Consumption for Sugar will fall in North America and EU but the fall will be offset by rise in consumption by Africa.

II.

INDIAN INDUTRY PROFILE

Introduction to Indian Sugar Industry Sugar is one of the oldest commodities in the world and traces its origin in 4th century AD in India and China. In those days Sugar was Manufactured only from sugar cane. But both countries lost their Initiatives to the European, American and Oceanic countries, as the 18thcentury witnessed the development of newtechnology to manufactu re sugar from sugar beet. However, India is presently adominant player in the global sugar industry along with Brazil in terms of production. Given the growing sugar production and the structural changes witnessed in Indian sugar industry, India is all set continue its domination at the global level. Indian sugar industry is highly fragmented with organized and Unorganized players the unorganized players mainly produce Guru and Khandesi, the less refined forms of sugar. Sugar industry, one of the major agro-based industrial in India, has been instrumental in resource mobilization, employment generation, income generation and creating social infrastructure in rural areas. Indeed, sugar industry has facilitated and accelerated pace of rural industrialization. The government had a controlling grip over the industry, which has slowly yet steadily given way to liberalization. The production of sugarcane is cyclical in nature. Hence the sugar production is also cyclical as it depends on the sugarcane production in India. As the industry is a fragmented one, even leading players do not control more than 4 percent market in India. However, the situation is changing and players off late are striving to increase their market share either by acquiring smaller mills or by going for green field capacity additions. Indian sugar industry can be broadly classified in to two sub sect ors, the organized sector i.e. sugar factories and the unorganized sector i.e. manufacturers of traditional sweeteners like gur and khandsari. The latter is considered to be a rural industry and enjoys much greater freedom than sugar mills. The production of traditional sweeteners gur and khandsari is quite substantial. Domestic Scenario Sugar tasted sweeter this year for the Rs 80,000 crore industry which saw massive production, higher exports and signs of freedom from government control, but consumers had to pay Rs 10 per kg more for the commodity through the year. High retail prices helped sugar industry to recover costs and clear almost entire cane payments to farmers -- worth Rs 52,000 crore in 2011-12 marketing year (OctoberSeptember).

Way back in 1971-72 and 1978-79, the government had made attempts on decontrol. The present Agriculture Minister Sharad Pawar tried for the decontrol in 2010 when he was holding the charge of Food Minister, but without any result. Besides some action on the decontrol front, the year also witnessed surplus sugar production, prompting the government to initially allow exports of 2 million tonnes and then freeing shipments altogether in May.

30 25 20 15 10 5 0

Indias sugar production trend


2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07

Source: Magnum connect magazine February 2013 for industrial profle,Volume 5,Issue No. 54 February 2013

Sugar output rose to 26.34 million tonnes in the 2011-12 marketing year (October-September), as against 24.4 million tonnes in the previous year. Exports from India stood at 3.4 million tonnes, as against 2.6 million tonnes in the same period last year. Meanwhile, sugar production is expected to decline to 23.5 million tonnes in sugar year 2012-13 although output will remain higher than annual domestic demand of 21- 22 million tonnes for the third consecutive year. There was some speculation that sugar production might fall drastically due to drought situation. But the situation has improved. Earlier, the government was expecting 23 million tonnes production, but now it has improved its estimates to 23.5 million tonnes. So, the situation is comfortable and prices are likely to remain under control. Season- wise production of sugar from sugarcane since 200708 is given below:(Qty. in lakh tonns)

Sugar Season Production of Sugar 2007-2008 263.00 2008-2009 147.00 2009-2010 188.00 2010-2011(P)# 243.50 P- Provisional #this includes production of raw sugar. States contribution in total production Indian Sugar Industry generates power for its own requirement and even gets surplus power for export to the grid based on by-product biogases. There is even production of ethanol, an ecology friendly and renewable energy for blending with petrol. Sugar Companies have been established in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh and these six states contributing more than 85% of total sugar production in the India while, over 60% of total production is together contributed by Uttar Pradesh and Maharashtra. Indian sugar industry has been growing horizontally with large number of small sized sugar plants set up throughout India as opposed to the consolidation of capacity in the rest of the important sugar producing countries and sellers of sugar, where there is greater concentration on larger capacity of sugar plants. Sugar production contribution of major states in India

50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%

Sugar production contribution of major states in India

Source: Magnum connect magazine February 2013 for industrial profle,Volume 5,Issue No. 54 February 2013

Till December 31, 2012, the country has crushed more than 83 million tonnes of sugarcane to produce 7.96 million tonnes of sugar with 496 mills operations. This sugar production is about 2.5% higher than last year. However, about 12 more of mills were operational during the corresponding period last year. Of total, Uttar Pradesh has produced 1.93 million tonnes of sugar, at 8.74% recovery. The sugar production is about 11% less than the last year sugar production during this period but with same recovery. While, Maharashtra has produced 2.01 million tonnes of sugar which is about 4% higher than last year; this is due to early starting of sugarcane crushing season with better operational utilization of started sugar mills. Meanwhile, Karnataka has produced 1.55 million tonnes of sugar which is about 17% higher than last year, with same numbers of 56 operational sugar mills as that of last year. While Tamil Nadu has produced 0.3 million tonnes of sugar with 38 operational mills, which is same as that of last year and Andhra Pradesh with 33 operational sugar mills has produced 0.33 million tonnes of sugar which is about 12% higher than the last year during this period. Consumption Although, the usual annual sugar consumption is around 21.5 million tonnes to 22 million tonnes, Indian sugar consumption is set to rise in 2012-13 to 26.5 million tonnes, about 15.22 per cent higher than in 2011-12, on improved domestic supplies and strong demand from bulk consumers. Prospects of growth in the Indian economy, and a growing population (about 1.8 percent per annum) would support growth in sugar consumption. Bulk consumers such as soft drink manufacturers, bakeries, confectionary, hotel and restaurant consumers account for 60 percent of milled sugar demand. Most bulk consumers only use cane sugar as India does not produce high fructose corn syrup (HFCS) in significant quantities.

30 25 20 15 10 5 0

Indias sugar consumption


Indias sugar comsum ption

Source: Magnum connect magazine February 2013 for industrial profle,Volume 5,Issue No. 54 February 2013

In the recent 2012-13 Union Budget announcement, the Government of India (GOI) reduced the import duty on corn syrup from 30 percent to 20 percent for fiscal year 2012-13. Lowering the import duty will encourage imports of HFCS for commercial use. Local sweet shops Consume most of Indias Khandsari sugar. Gur is mostly consumed in rural areas for household consumption and feed use. Further, by, 2020-21, sugar consumption in India is forecasted to rise to 31.3 million tons, by Indian Sugar Mills Association (ISMA) SUGAR RELEASES FOR DOMESTIC CONSUMPTION Sugar Season 2007-2008 2008-2009 2009-2010 2010-2011(P) (Qty. in lakh Tonns Release/Consumption 214.75 230.80 208.78 207.69

Higher Cost of Sugar Production Sugarcane costs, comprising over 70% of a sugar mills total cost, will see an increase in 2013. For the mills based in north India that generally adopt state-advised prices (SAP), sugarcane cost has increased by Rs 40/qtl to Rs 280/qtl. For the mills based in Maharashtra and Karnataka, the FRP - representing floor price for sugarcane has increased by Rs 25/qtl to Rs 170/qtl. Mills will, however, end up paying a rate that is higher than the FRP (around Rs 270/qtl - Rs 300/qtl) due to lower sugarcane availability in 2013.

Given the increase in sugarcane costs for the mills based in north India adopting SAP, the cost of producing sugar is likely to be around Rs 33/kg- Rs 34/kg, which in the case of Maharashtra, which have higher recoveries of 10.5%- 11% versus UPs 9%-9.5%, will be Rs 30/kg - Rs 32/kg. Thus, the sugar companies based in north India, who are likely to procure raw material from UP, would be at a relative disadvantage to the companies in southern India. However, sugar prices in north India are on an average Rs 1/kg- Rs 2/kg higher than those in south India, which mitigates the disadvantage of north Indian players to an extent. Also, higher capacity use in north India will also result in cost benefits which will not accrue to the mills in Maharashtra and Karnataka due to the decline in cane acreage. Meanwhile, Indian sugar mills overall profitability is cushioned by the high margins of its by-products (distillery and power) business. However, the support from by-product businesses is not likely to be sufficient to offset the decline in sugar profitability. In 2012, operating profits from by-products as a percentage of total operating profits was around 70%. This effectively masked overall margins, which reduced by 3% y-o-y (based on financial data of 11 UP-based sugar mills) because of a significantly deteriorated performance in the core sugar business. Unlike UP-based mills, operating margins for the mills based in south and west India in 2012 improved around 3% y-o-y (based on financial data of six sugar mills), attributed to benefits from sugar exports and sugar refinery businesses. Operating profits from the byproducts businesses as a percentage of total operating profits was around 45%. Exports The government is likely to open sugar exports for the 2012-13 seasons soon. The food ministry may soon issue notification to start exports, which have become unviable amid crashing global prices due to excess supply from Brazil. In the last season, the country exported 3.4 million tonnes. Sugar will be exported under the open general licence scheme which requires exporters to obtain a registration certificate (RC) from the Directorate General of Foreign Trade. Exporters can obtain an RC for shipping a maximum of 20,000 tonnes at a time. They may apply for another RC only after shipping at least 10,000 tonnes. The country is likely to produce surplus sugar for a third year in a row. While the government put the estimate at 23.5-24 million tonnes, the industry expects the output to go up to 24.5 million tonnes as against last years record production of 26.2 million tonnes. Meanwhile, the government has relaxed the procedure for the export of

pharmaceutical grade and specialty sugar freeing it from any kind of registration. Exports of such sugar will not require any registration with the DGFT. Thus, there is an opportunity to export at least 1.5 million tonnes this year too but, the declining global prices may not help exports. Global prices have crashed from around $650 a tonnes to $513 a tonnes in the last four months making exports unviable.

III.

COMPANY PROFILE

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT, CHIKODI.

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT, CHIKODI is a co-operative society registered under Karnataka co-operative societys Act in 1969 Shree D.K.S.S.K.N. Chikodi is a co-operative unit. It is a situated near Nandi village, at a distance of about 13Km from Chikodi town .and the factory at present has an attractive campus with magnificent buildings over it. Agriculture was continues to be an extremely important sector in our country and cooperative system, as one of its main pillars providing vital support services, is crucial for the transformation of agriculture. It is how inspired our founder Late Sri. Chidanand B. Kore, an agriculturist and a co-operator, to establish this factory during 1972-73 with the financial support from cane growers of this area and the State Government. With an initial crushing capacity 1250 TCD and as a standalone sugar industry, lour factory had faced a lot of problems all these years in coming out as a viable unit. Though this factory had emerged in this area with a meager beginning, it had not only provided a source of income for forming community but also created a sustainable employment opportunity in this rural area. After a lot of dispute on location of plant, near Nanadi village, the construction work started in year 1971 and comp elected in the year 1974. The factory was inaugurated by Vice-president Sheri B.D Jatti on 6th November 1974. The regular production has been started from December 1974. The factory started on 5/3/1969 with initial Crushing capacity to the extent of 1250 TCD per day began during the year 1974 with total expenditure of Rs.337 lakh. The area of operation covered 111 villages of which 102 villages are from Chikodi talukas, 5 villages are from Raibag taluka and 4 villages are from Athani taluka. At present total sugar cane supplied to this sugar industry is from 20,000 acres with average yield per acre of 25 MT. The entire plant and Machinery has been supplied by m/s National Heavy Engineering Co-operative Ltd. Pune, A cooperative institution (for Rs. 1990 lakhs and 3500 TCD plant) has also been installed to meet the present requirement of the Crushing capacity. The DKSSK, at present is equipped with modern machines and skilled personals.

The crushing capacity was enhanced from 1250 TDC to 2000 in 1984-85 and from 2000 TCD to 3000 IN 1993-94. The factory house hold expenses of factory from 3500 to 5500 TCD. Every expansion was not easy and had created a financial setbacks due to the lack of professionalism both in technical and financial managements. Thus over the period of two and half decades, the factory had grown only in sizes but not adopted the range of different bi-product activities and had suffered due to a weak governance on efficiency, effectiveness, adaptability and internal and external accountability in the management. These things have brought the factory almost to the brink of sickness. Besides resulting a huge negative net worth and ever-high accumulated losses. However this cooperative and rural based industry must succeed if the poor farmers and the rural unemployed youths have to be prosperous. Nature of Business: Sugar sector is one of the large scale industries in manufacturing sector. Now a day the competition in sugar sector is very high. SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT, CHIKODI is a co-operative society registered under Karnataka cooperative societys Act in 1969. The object of business is to encourage proper devolvement of agricultural industrial amongst members on cooperative lives by promotions of co-operative and joint forming methods so as to secure best merits of modern large scale agriculture production to the owners of the lands. The nature of business is to encourage self help, thrift and co-operate amongst members. POLICY: The present policy of partial decontrol 10% of production by each unit is supplied for public distribution system i.e. as levy sugar at Govt. notified prices admittedly below 20% of the actual cost of production. The levy sugar is I to the public irrespective of their economic status. The balance 90% is sold in the free market against monthly\issued by the Government. This policy has been continuing since 1967-68 except for brief periods of de-control me during the years of surplus production and accumulated sugar stocks.

Government announces the Statutory Minimum Price (SMP) for sugarcane every year based on recommendations of the Commission for Agricultural Costs and Prices (CACP).

Vision, mission and objectives VISION Total customer satisfaction MISSION Encourage agro-based co-operative industry. To develop co-operative movement in rural sector. To encourage the farmers to grow sugar cane for production of sugar and its by-products. AIMS & OBJECTIVE OF THE COMPANY The object of the society is to encourage proper development of Agricultural Industrial amongst members on Co-operative lives by promotions of principal and methods of Co-operative and joint forming methods so as to secure best merits of modern large scale agriculture production to the owners of lands and for this purpose. To encourage self-help, thrift and co-operate amongst members. To acquire lands either by way of purchase or otherwise for cultivation of sugar cane and other cost and for erection of building. Godawns staff quarters etc and for installations of machineries. To manufacture sugar jogger and their byproducts out of sugarcane grown and supplied by members of the society and other and to sell the same to the best advantage. To undertake such other activities as are identical and conductive to the development of the society etc. To acquire and install machinery for the utilization of the product and buy raw material and sell finished product is the course of utilizing and marketing the byproducts. OWNERSHIP PATTERN

The authorized share capital of the Society shall be RS.15.20 crores divided in to total 38,000 shares of RS.4, 000/-each as under. Rs.14, 51,000 /-dividends in to 36,275 shares of the face value of Rs.4, 000/-each reserved for the grower members called as A Class... Rs.9, 00,000 /-dividends in to 225 shares of the face value of Rs.4000/-each reserved for Co-operative Institutions. Called as B Class. Rs.20, 00,000 /-dividends in to 500 shares of Redeemable preference share of Rs.4, 000/-each to be issued to Government of Karnataka/Maharashtra called as C Class. Rs.40,00,000/- dividend in to 1,000 shares of face value of Rs.4,000/-each reserved for non grower members called as D Class. BOARD OF DIRECTORS The following composition of directors on the board of Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit, Chikodi Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NAME Sri. Amit Prabhakar Kore Sri. Bharatesh Shantappa Banawane Sri. Annasaheb Shankar Jolle Sri. Ajit Shivajirao Desai Sri. Balagouda Shivamurti Rendale Sri. Kallappa Krishnappa Maishale Sri Mahantesh Mallayyaswami Kavatagimath Sri. Mallikarjun Ganapatarao Kore Sri. Mahaveer Yashavant Mirje Sri. Parasagouda Iragouda Patil Sri. Prakash Jinagouda Patil Sri. Rohan @ Sandeep Ashok Patil Sri. Subhash Nemanna Katrale Sri. Satappa Ningappa Saptasagar Sri. Tatyasaheb Dadu Kate DESIGNATION Chairman Vice Chairman Director Director Director Director MLC,Director Director Director Director Director Director Director Director Director

16 17

Sri. Nandakumar Mallappa Nashipudi Sri. D. S. Girigouda

Director The Managing Director

ACHIVEMENTS AND AWARDS ACHIEVEMENTS STAI, SISSTA & DSTA in their recent 8th annual convention at Hyderabad held on 13-08-2005 have honoured with the most prestigious award as the THE BEST EFFICIENCY & PERFORMANCE SUGAR FACTORY in the country for the year 2004-05. The award was given by Honble Union Minister for agricultural, food & Civil Supplies, in presence of Honble Chief Minister of Andra Pradesh. The Karnataka State Co-op Federation Ltd., had adjudged as The Best Co-operative Sugar Factory in the State and AWARD had been given to us through Honble Chief Minister of Karnataka, on 14/11/2004. Energy Department of Government of Karnataka and KREDL have awarded us he excellence Award THROUGH Deputy Chief Minister of Karnataka for having developed efficiently 20.7 MW Co-gen Power Project on the occasion of RAJIV GANDHI AKSAYA URJA DIWAS ON 20/8/2004 . The companies have the Honour of achieving the Highest Sugar Recovery @ 11.80% in Southern part of India for the year 200102. And 11.90% for 2002-03 also. AWARDS The Karnataka State Cooperative Sugar Factories Federation Ltd., Bangalore had honored the company with the following awards for the: Highest sugar recovery in South India during 2001-02. The Best Administration Award to the Managing Director with a cash prize of Rs .10.000/- and a certificate. The Best chief Chemist Award with Rs.5000/- Cash prize and a Certificate. Best chief engineer with award worth of Rs.5000/- cash prize and certificate.

SWOT ANALYSIS SWOT analysis is a strategic planning tool 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 favourable and unfavourable to achieving that objective. STRENGTHS: Location of the factory in the high recovery zone between perennially flowing rivers Krishna and Ghataprabha which is conducive for healthy growth of the sugar cane. Excess availability of cane in the area of operation. Automation of plant, excellence in efficiency and prudent cane management resulted in lower conversion cost. Well-planned layout and working resulting in minimized manpower and reduction in cost of production. Good Administration Healthy management labour relations Superior product quality Well established since long time Concept of multi joint products Maximum profitability due to various by products Well-structured distribution channel. Improved infrastructure. Automated highly sophisticated machines. WEAKNESS: As the industry is seasonal, it is always exposed to the risk of underutilization of capacities. Large number of sugar factories available with radius of 25-30 km from the factory. High cost of production Lot of training required for all level of employees. No control on minimizing the losses in process Company cant sell as much as sugar in the market at any specific time, as sugar release mechanism is controlled by government of India.

OPPORTUNITIES: Expansion of plant capacity from 6000 TCD to 10000 TCD. Expansion of cogeneration plant capacity. Expanding projects like paper unit, Ethanol production and Bio fertilizers. Promoting lift irrigation projects. Non-establishment of the programs to motivate and develop effective manpower. Restructuring of man power. Borrowing of law cost funds. Reducing the overhead expenditure. To provide comfort and convince to employees for doing the work. To facilitate the smooth running of the manufacturing process. THREATS: Uncertain and volatile policies of sugar industry. Stiff competition. Interference of Govt. on all policies of sugar industry. Liberalization in sugar policy is yet to take place. Due to uncertain rainfall procurement of raw material is being affected High competition in procurement of raw material. The main raw material sugarcane may not sufficiently be available in future. Change in various government policies. MAJOR COMPITATORS FOR DKSSKN UGAR SUGARS HIRA SUGARS RENUKA SUGARS HALSIDHNATH SUGARS DATT SUGARS (MAHARASHTRA) PANCHAGANGA SUGARS(MAHARASHTRA)

MAJOR DIFFERENT DEPARTMENTS AND THEIR FUNCTIONS. ORGANIZATIONAL CHART


Board of Management

Board of Director

1. MECHANICAL DEPARTMENT This department is headed by General Manager and Chief Engineer. Maintenance of the sugar machinery and plant over having of

the some in off season and to run all the sugar machinery and their devices properly and smoothly in the season and to extract cane juice for the cane in respect of less losses of sugar content in fazes that is more extraction. FUNCTION

Maintenances of the machineries in the plants. Taking care of machineries while working. Undertaking expansion & modification in the off season. Preparing plant ready for the seasonal operation.

2.

ELECTRICAL DEPARTMENT (Co-generation) z


Chief Engineer

Asst. Engineer

Supervisor General Worker Electrician Electrician

General Worker

3.

PRODUCTION DEPARTMENT

Production management refers to the application of management principles to the production function in a factory. In other words production management involves application of planning, organizing, directing and controlling the production process. A well-organized production function can offer competitive advantage to a firm in the following areas. Higher quality More inventory turns Shorter new product lead time Greater flexibility Shorter manufacturing lead time Better customer satisfaction Reduced wastage

CHEMICAL DEPARTMENT

To control the process Quality control Purity checking Examining the Coal & Bricks contains in the Sample

PRODUCTION PROCESS The main saw material in the production of sugar is Sugar cane. The raw materials has to go through following stages before it become finished product. The process in each stage is as under: STAGE 1: SUGAR CANE SUPPLY The harvested and transported sugar cane received is weighed on the weigh Bridge. It is unloaded and kept on the feeder tables. It is fed to the cane carrier as per the requirement. STAGE 2: MILLING OF CANE/ EXTRACTION OF JUICE

This cane is passed through leveller and furzier by making the fine making the fine chips. It is crushed through series of mills. Imbibitions hot water is added prior to the last mill to extract more possible sugar. The bagasse from the last will is carried through bagasse conveyor and required quantity of bagasse is fed to the boilers and excess quality is sent for storage. STAGE 3: CLARIFICATION AND EVAPORATIONS. The juice from all the mills is pumped to juice weighting scale. It is heated to about 70-77o c in the juice heaters. It is taken to continuous juice sulphitor in which milk of lime and sulphur dioxide gas are adjusted to maintain ph 7.0. it is again heated in juice heaters to about 100 to 105oc and sent to continuous clarifier. Clear juice is taken to multiple effect evaporators to concentrate up to 60oc Brix. The settled mud from the bottom of the clarifier is taken to mud mixer to mix with beguile and taken to continuous vacuum filer. The filtrate is transferred to raw juice receiving tank for treatment. The

adhered mud on the screens is scraped and sent out as filter cake, which will be used for composting the manure STAGE 4:CRYSTALLIZATION PUREING AND SUGAR MANUFACTURE The concentrated syrup from evaporator is taken to syrup sulpthitor to adjust Ph 4.8 to 5.2. This is stored in the supply tanks and fed to A masscult boiling by taking B-seed as a footing. It is concentrated to 92o Brix and dropped to the crystallizes. This masscult is purged in the centrifugal machines. The adhered crystals are scraped to hopper and treated with hot air and cold air blower. It is sent to grader the size for gradation. This graded sugar is stared in SILOS. Weighed and bagged sugar bags are transferred to respective go downs for stacking. STAGE 5: FURTHER PROCESS

While purging A- massecuite the A-light molasses received is sent to supply tanks and fed to A- molasses is sent to supply tanks and fed to B- masscult boiling with b-grain as footing. This is purged in the centrifugals. This sugar is used as B- seed and excess is melted and fed to A- masscults. White purging low purity B- Heavy molasses obtained is used for boiling C- masscult with C- grain as footing. This C- massecruite is taken for purging in C.F.W. Centrifugal Machines. The final molasses is separated, weighed and sent to storage tanks. C. F. Magma is sent to melt supply tanks and fed to A massecuite boiling. C-light molasses obtained is tired in supply tanks and used for C- massecuite boiling and C- graining also.0 FLOW CHART OF SUGAR MANAFACTURING Weighed cane-hauled to crushing yard

Cane unloaded on to the carrier

Cane cut into pieces

Crushed in successive mills

Juice treated with line and surplus and heated

Dry chaff fed into boilers as fuel

Subsider

Sucm

Clear juice Evaporates

Filter cake used as manure

Clear Juice Concentrated syrup


Surplus syrup to vacuum pans

Boiler to mane cite

Centrifugal

Sugar

Molasses

Gagging Power Alcohol Dispatching 4. ADMINISTRATION DEPARTMENT Portable Alcohol

Administration department is the main department in the organization. There are number of employees working in this department. This entire department looks after other work related to administration. WATCH AND WARD DEPARTMENT This department is headed by security officer. Security of factory and control on gates and supervision is there day and night all over the factory area from security point. TIME OFFICE DEPARTMENT This department is headed by head time keeper. To maintain the register of attendance of the factory staff to prepare the pay sheets and leave records and personal services register of the staff.
LABOUR WELFARE

This department is headed by labour welfare officer. To look into the welfare activities of the worker and solve the labour problems. The factory provides all the necessary facilities. The purpose of providing welfare amenities is to facilitate the development of total personality of working class for physical, mental, psychological, cultural, social, moral and intellectual development the factory provides well planned residential accommodation, medical facilities, educational facilities, drinking and washing water, canteen, cycle stand, library etc. In addition, the factory has following non-statutory schemes for workers welfare. Consumers society, uniforms to watchman production and engineering workers etc. OBJECTIVES To secure for the worker fair wage. To improve the working condition and express share in the increased profitability. To ensure the workers security of employment and protect larger interest of the society. To establish relationship between management and employees. FUNCTION: To promote harmonious relation between the factory management and workers.

To bring to the notice of board of directors grievances of workers and to act as a liaison officer between management and labour. To study and understand the point of view of labour in order to help the management to shape and formulate labour welfare policies. To advice and assist the management in fulfilment of statutory and other obligations. To encourage the formation of work joint production councils, co operative societies and welfare committee and supervise their work. To secure the provision of amentias such as canteen, washing, first aid, shelter, rest rooms, launch rooms etc. To suggest the measure which will serve to raise the standard of living of workers and in general to promote their well being. RECRUITMENT The recruitment is the process of searching for and obtaining applicants for jobs, from among whom the right people can be selected. The process begins when new recruits are sought and ends when their applications from which new employees are selected. Selection is the process of packing individuals (out of the pool job applicants with requisites qualification and competence to fill jobs in the organization).

RECRUITMENT AND SELECTION Recruitment of workers, the factory does not have a good procedure for recruitment. All the rights of recruitment are invested with the Board of Directors. The factory has good system of up grading. A promotion is given on the basis of experience, qualification. For upgrading the workforce a committee of Board of Directors is appointed. The up grading of workers is considered only when a vacancy exists in the higher grades, the factory instead of recruiting people from outside gives preference to their own personnel on the basis of qualifications, experiences and performance. The possibility of promotion serves as incentives. Promotion is given to the workers of they are well experienced and also of good qualification. INTERNAL SOURCES

In DKSSKN Internal search is made to identify surplus manpower. So that this manpower can be utilized elsewhere. This can be done through transfer and promotion to employees in their positions. EXTERNAL SOURCES Some time it may not be possible to find out right manpower within the company, especially in technical skill required jobs. Then they go for external sources. The major external sources used by DKSSKN are giving advertisements in news papers and other medias through personal contracts etc., After identifying the sources, the requirement process and selection process start.

5. FINANCE AND ACCOUNTS DEPARTMENT Finance plays a vital role in the functioning of all industrial units. Finance is the life blood of the organization. In sugar Industry Finance and accounts Department has very vital roles. The financial plan basically deals with raising and proper utilization of funds. The funds can be raised by issue of shares as well as by raising loans various sources. The finance manager supported with accountant manager and an accountant assistant looks finance department FUNCTIONS They look after the overall financial requirements of the company. They see that a proper inflow and outflow of income and expenditure is maintained. Costing and accounting is framed and maintained. Yearly budget is framed so that each department can meet their cash requirements. Budget prepared is based on sales forecasting, expenses forecasting, cost forecasting, purchase forecasting etc. which submitted by respective departments. Finance Department consists of following sub branches: General Accounts Section Cane Accounts Section Sales Section

Cash Section Accounts offices are the head of this department. Accountant sales manager, and head cashier assist him. Finance controlling repayment of term loans. Taking loans excepting and payment call deposits maintains all Accounts. Payment of all bills statuary and normal bills.

6.

SALES AND MARKETING DEPARTMENT Marketing is a social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others. American marketing association defines, Marketing Management as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. FUNCTIONS OF SALES DEPARTMENT: Sales officer is responsible for selling the products. To look after dispatch of the ordered products. Secondary sales are taken properly. Suggestion, ideas, complaints, feedback from the market to the company. Stocking planning in advance, godown maintenance in advance S & R.

7.

AGRICULTURAL & CANE YARD DEPARTMENT This department is headed by Cane development officer. Cane procurement, harvesting (to reap) and development of cane. To make the provision of proper seed of cane to the cultivators, soil testing and proper guideline for measuring etc. CANE PROCUREMENT ACTIVITIES 1. Cane surveying. 2. Cane maturity survey. 3. Harvesting & transport arrangement for cane supply to the factory. 4. Issue of cane cutting orders. 5. Cane quality control.

CANE DEVELOPMENT ACTIVITIES 1. Selection of high sugared cane verities of 9-10 months with pest & disease free seed for plantation. 2. Advice low cost technology in cultivation. 3. Micro nutrients management. 4. Pest & disease control. 8. SALES AND MARKETING DEPARTMENT

Marketing is a social process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others. American marketing association defines, Marketing Management as the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. FUNCTIONS OF SALES DEPARTMENT: Sales officer is responsible for selling the products. To look after dispatch of the ordered products. Secondary sales are taken properly. Suggestion, ideas, complaints, feedback from the market to the company. Stocking planning in advance, godown maintenance in advance S & R.

9. PURCHASE AND STORE DEPARTMENT Purchase Department is headed by purchase officer is responsible for purchasing the spare parts required for the industry. The storekeeper is responsible for stacking quality maintaining and issuing to the concerned section. The important functions of the department are:

Purchasing materials Calling quotations Preparing C.S.Q (comparative statement quotation) Placing before meeting for decision Placing orders for supply of materials. Passing bills to Accounts section for payment.

STORES DEPARTMENT This department is headed by store keeper. To keep the sores and required materials for the factory section wise in a proper way and to maintain their registers and big cards of indents (order goods) FUNCTIONS

Receiving the materials Unfolding the packing. Takes entry in store receipt Book (SRB) Preparing bills after receiving quality memo back. Stacking the materials. Issue of materials to concerned sections as per their indents.

PROBLEM FACED IN STORE


Material damaged during loading & unloading Excess supply from vendors. Short supply from vendors. Sometimes required material is not available as per given description.

GODOWN For storing the sugar there are 11 godowns are available in factory. They are various capacity as under:Godown Capacity

S No 1 2 3 4

Capacity 35000 30000 1,00,000 1,50,000

Qty 04 02 03 03

SHARED VALUES Shared values are refers to company policies. In DKSSKN Sugar Company limited the following policies are maintained. Quality policies Environment policies T.P.M. policies (Total productivity management)
QUALITY POLICY

Total customer satisfaction is our goal. To achieve this we at DKSSKN committed to produce quality white crystal sugar as per the Indian sugar standard through continual improvement in our process, people and stake holder. ENVIRONMENT POLICY The DKSSK is committed to comply with the requirement of relevant environment regulation and standers by implementing environment management system and the continually improve its effectiveness.
TOTAL PRODUCTIVE MANAGEMENT

The DKSSK is committed in maximizing limited is committed in maximizing overall plants effectiveness to make Mysore sugar company a world class company through total productive manufactured by Promoting automates maintenance culture. Involving all employees and building culture. Minimizing the losses and reduced the cost.

IV.

PRODUCT PROFILE

PROCUREMENT The factory obtains the sugarcane, which is required from more than 1000 farmers and by the company farms and others raw materials which are required for the operation is taken from the vendor there vendors will be evaluated on basis of price and quality and then the required raw materials will be taken for the efficient vendors. The transport of sugar cane from framers to the factory will be engaged throng lorries, which will be taken through bidding at time of harvesting, and also farmers themselves supply by their own bullock carts or by tractors. CANE WEIGHMENT : There are 12 outlaying weighbridges situated round about Chikodi for delivering the sugarcane from the farmers. Double check has been provided over the weight of cane transported from out stations. OPERATIONS

The sugarcane, which is carried by lorries or other, will be directly fed to the machine where the initial process starts. At the starting point these are knives which cuts sugar cane bunches into individual sugar care. After this in the next step there are sharp cutter, which cuts the sugarcane, bunches into very small pieces. Then it will go to trade marbs (a series of rollers used for crushing purpose) for crushing. Then the juice produced will go for further processing and the Bagasse will be lift out their itself. Then they add flocculent (used for mud setting) milk sanitation etc and then after it will go through pans and masscuite for this masscuite they will add sodium Hydro Sulphite ( to bleach the masscuite ) and it will be separated out and the molasses will be send to distillery and they white sugar will be bagged. BY PRODUCTS OF SUGAR MANUFACTURER The chief by products of sugar manufacturing are 1. Bagasse Bagasse is the by-product of sugar left behind after cursing of sugar cane. It is used as a fuel in the sugar factory boiler. Excess Bagasse finds use as raw materials in paper manufacturing industry. 2. Molasses Molasses is a by product of sugar refining chiefly used for alcohol production. The entire molasses out put is routed to the distillers unit, which is maintained by the organization. 3. Press mud Press mud is the by-product generated by cane juice filtration during sugar manufacture, currently. Press mud is used as a fertilizer in sugar cane cultivation.

Theoretical Framework Of FINANCIAL STATEMENT ANALYSIS.


Definition Of Financial Statement Nature Of Financial Statements Conventions Uses And Importance Of Financial Statements Limitations Of Financial Statements Parties Interested In Financial Statements Analysis And Interpretation Of Financial Statements

Chapter - 3

Types Of Financial Statements Tools Of Financial Analysis Used In The Study -Comparative Financial Statements -Common-Size Financial Statements -Trend Analysis -Ratio Analysis

Theoretical Framework Of FINANCIAL STATEMENT ANALYSIS.


Understanding financial statements is key to fundamental stock analysis and overall investment research. Financial statements provide an account of a companys past performance, a picture of its current financial strength and a glimpse into the future potential of a firm The term financial analysis is also known as analysis and interpretation of financial statements. It refers to the process of determining financial strengths and weaknesses of the firm by establishing strategic relationships between the items of the balance sheet, profit and loss account and other operative data.

Chapter - 3

DEFINITION OF FINANCIAL STATEMENT: According to Hampton John A financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a movement of times as in the case of a balance sheet, or may reveal a series of activities over a given period of time, as in the case of an income statement. NATURE OF FINANCIAL STATEMENTS: The term financial statements refers to the balance sheet reflection the financial position of the assets, liabilities a capital of a particular company during a certain period and profit and loss account showing the operational results of the company during a certain period. Financial statements are plain statements of informed opinion uncompromising in their truthfulness. It is meant that within the limits of accepted accounting principles and the very human abilities of the persons preparing them they have to rely on judgements and estimated divorced of prejudice. CONVENTIONS: According to the American institute of certified public accounts, financial statements reflect, a combination of recorded facts accounts conventions and personal judgements and the judgements and the conventions applied affect them materially, this implies that the exhibited in the financial statements are affected by recorded facts, accounting conventions personal judgements. USES AND IMPORTANCE OF FINANCIAL STATEMENTS: The financial statements are mirrors which reflect the financial position and operating strengths or weaknesses of the concern. These statements are useful to management, investors, creditors, bankers, workers, government and public at large. George O May points of the following measure used of financial statements: As As As As a a a a basis for taxation. basis for price or rate regulation guide to the value of investment already made basis for granting credit.

LIMITATIONS OF FINANCIAL STATEMENTS:

Financial statements are essentially interim reports and hence cannot be final because the actual gain or loss of a business can be determined only efface it has put down its shutters. They tend to give an appearance if finality and accuracy, because they are expressed in exact money amount. Any value to the amounts presented in the statement depends on the value standards of the person dealing with them. The balance sheet loses its functions as an index of current economic realities due to the fact the financial statements are compiled on the basis of historical costs while there is a market decline in the value of the monitoring unit and the resultant rise in prices. The problem has become more important especially during the war and the post war period. They do not give effort to many factors, which have a hearing on financial conditions and operating results because they cannot be stated in terms of money and are qualitative in nature. Such factors are reputation and prestige of the business with the public its credit rating the efficiency and loyalty of its employees and integrity of the management. Due to these limitations it is said that financial statements dont show the financial conditions of the business rather they show, the position of financial accounting for a business. PARTIES INTERESTED IN FINANCIAL STATEMENTS: Now a days the ownership of capital of many public companies has become truly board based due to dispersal of shareholding, hence, the public in general evinces interest in the financial statements. Apart from the shareholders there are other persons and bodies who are also interested in financial results disclosed by the annual reports of the companies. As already mentioned, such persons and bodies include: 1. Potential investors 2. Creditors, potential suppliers or other doing business with the company. 3. Debenture holders 4. Credit institutions like bankers. 5. Employee customers who wish to make a long standing contact with the company. 6. Economic and investment analysis 7. Members.

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS: Analysis and interpretation of financial statements are and attempt to determine the significance and meaning of the financial statement data as so that a forecast can be made of the prospects for future earnings ability to pay interest, debt and maturities (current and long term) and profitability of a sound dividend policy. Financial analysis main function is pinpointing of the strengths and weaknesses of a business concerns by regrouping and analysis of figure contained in financial statements by making comparisons of various component and by examine their content. The financial manager uses this as the basis to plan future financial requirements by means of forecasting and budgeting procedures. The analysis of and interpretation of financial statements represents the lost of the four measure steps of accounting viz. Analysis of each transaction to determine the accounts to debited and credited and the measurements and the valuation of each transactions to determine the amounts involved. Recording of the information in the journals. Summarization in largest and preparation of work sheet. Preparation of financial statements. Analysis and interpretation of financial statements results in the presentation of information that assets business managers, creditors and investors. This requires a clear understanding of monitoring item of the items. The analysis must group that represents sound and unsound relationships reflected by the financial statements. Those, the data is more maintain full and it is placed in better perspective when it is provision and by means of measurement, its relationship with others is established in terms of if relative significance and it is ranked in terms of its relative significance. One can achieve this by comparisons made between related items in the statements series of years. TYPES OF FINANCIAL STATEMENTS: Financial statements primarily comprise two basic statements: 1. The position statements of the balance sheet. 2. The income statements or the profit and loss account.

Accounting principles specify that a complete set of financial statements must include: A balance sheet An income statement A statement of change in owners accounts. A statement of changes in financial position.

BALANCE SHEET: The balance sheet is one of the important statements depicting the financial strength of concern. It shows the properties that are owned on one hand and on the other hand the sources of the assets owned by the concern and all the liabilities and claims it owes to owners and outsiders. The balance sheet is prepared on a particular date. The right hand shows properties and assets and the left hand shows liabilities. INCOME STATEMENT OR PROFIT AND LOSS ACCOUNT: Income statement is prepared to determine the operation position of the concern. It is a statement of revenues. The income statement may be prepared in the form of manufacturing account to find out the cost of the production in the form of trading accounts to determine gross profit or loss, in the form of profit and loss account to determine net profit or net loss. STATEMENT OF CHANGES IN OWNERS EQUITY: The term owners equity refers in the claims of the owners of the business against the assets of the firm. It consists of two elements. Paid up share capital i.e. the initial amount of funds invested by the shareholders. Retained earnings/reserves and surplus representing undistributed profits. The statement of changes in owners equity simply shows the beginning balance of each owners equity account, the reasons of increases and decreases in each, and its ending balance. However, in most cases the owners equity account changes significantly in retain earnings and hence the statement of changes in owners equity becomes merely a statement of retained earnings. STATEMENT OF CHANGES IN FINANCIAL POSITION:

The basic financial statement i.e. the balance sheet and profit and loss account and income statement of a business reveals the net effect of various transactions on the operational position of the company. But there are many transactions that do not operate through profit and loss account. Those for a better understanding another statement of changes in financial position has to be prepared to show the changes in assets and liabilities from the end of another point of time. The statement of changes in financial position may take any of the two forms. They are: Funds statements Cash flow statements TOOLS OF FINANCIAL ANALYSIS USED IN THE STUDY: Analysis of financial statements is intended to re-arrange and present the financial data in such a way that it is useful to the management. In analysing income statement and balance sheet for identifying the financial strengths or weakness of the business by properly establishing relationship between the items of these financial statements by adopting the following tools and techniques: Comparative Financial Statements Common-Size Financial Statements Trend Analysis Ratio Analysis

1. MEANING OF COMPARATIVE STATEMENT: The comparative financial statements are the statements of the Financial position of different periods; the elements of financial positions are then in a comparative form to give idea of financial position of two or more periods. The comparative statement may show: Absolute figures Changes in absolute figures i.e. increase or decrease in absolute figures. Absolute data in terms of percentage. Increase or decrease in terms of percentage. COMPARATIVE BALANCE SHEET:

It is a statement of financial position of a business at a specific Movement of time. It represents all assets owned by the business at a

particular Movement of time and the claims of the owners and outsiders against those Assets at the time. It is a way they shape the financial condition of the business at that time. The important distinction between an income statement and balance sheet is that the income statement is for a period where as balance sheet is on a particular date. COMPARATIVE INCOME STATEMENT:

The comparative income statement gives the results of the operation of a business. The comparative income statement gives an idea of the program of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyze the profitability of the business. o Advantages: 1. Comparative financial statements indicate trends in interest earned profit etc. and help to evaluate performance of the bank. 2. It uses to compare the performance of a bank with the average performance of the other banks and helps in identification of weakness of the bank and remedial measures can be taken accordingly. o Disadvantages: 1. Procedure with regards to depreciation, inventory valuation etc. policies if followed differently, the comparison can be mislead. 2. Comparison of different periods can also be misleading if the period has witness changes in accounting policies, inflation, and recession. o GUIDELINES FOR INTERPRETATION OF INCOME STATEMENT: The analysis and interpretation of income statement will involve the following steps: 1. The increase or decrease in sales should be compared with the increase or decrease in cost of goods sold. An increase in sales will not always mean an increase in profit. The profitability will improve if increase in sales promotion and the control of operating expenses.

2. The second step of analysis should be the study of operation profit. The operating expenses such as office and administrative expenses. Selling and distribution expenses should be deducted from gross profit to find out operating profit which will result from the increase in sales position and control of operating expenses. 3. The increase or decrease in net profit give an idea about overall profitability of the concern, non-operating expenses such as interest paid, loss from sale of assets, writing off to deferred expenses or deducted from operational profit we get the figure of operating profit. 4. An opinion should be formed about profitability of the concern and it should be given at the end. This should be mentioned whether the overall profitability is good or not.

2. COMMON SIZE STATEMENTS: The common size statement, balance sheet and income statement are shown in analytical percentages. The figures are shown as percentages of total assets, total liabilities and total sales. The total assets are taken as of and different assets are expressed as a percentage of the total. 1. Common size balance sheet: A statement in which balance sheet items are expressed as the ration of each asset to total assets and the ratio of each liability is expressed as a ratio of total liabilities is called common sized balance sheet. 2. Common size income statement: The items in income statement can be shown as percentage of sales to show the relation of each item to sales. A significant relationship can be established between item of income statement and value of the sales. The increase in sales will certainly increase selling expenses and not administrative are financial expenses. o Advantages: 1. Common size analysis reveals the sources of capital and all other sources of funds and the distribution or use or application of the total funds in the asset of a bank.

2. Comparison of common size statement over a number of years will clearly indicates the changing proportions of the various components of assets, liabilities, interest earned and profits. 3. Comparison of common size statement of two or more banks will assist evolution and ranking. o Disadvantages: 1. Common size statements do not show variation in the various account items from period to period. 2. Common size statements are regarded by many as useless as there are no established standard proportions of an asset to the total assets or of an item of expense to the interest earned. 3. If financial statements of a particular business organization are not prepared year after year on a consistent basis, comparative study of common size statement will be misleading. 3.. TREND ANALYSIS: Trend percentages: The method of trend percentages in useful analytical device for the management since y substitution of percentage for large amounts, the clarity and readability are achieved. Trend percentages are immensely helpful in making comparative study of the final statements for several years. The method of calculating trend percentages involves the calculation of percentage relationship that each item bears to the same item in the base year. The earliest year may be taken as base year. Each item of the base year is taken as 100 and on the basis the percentage for each of the item of each year is calculated. Least Square Method: This method is widely used in practised. It is a mathematical method and with the help of a trend line fitted to the data in such a manner by using the actual figures of the study period, we have to calculate the trend values for these periods. Based on this value we can easily forecast the values of the future period. The method of least square may be used either to fit a straight line trend or a parabolic trend. The straight line is represented by the equation Y(C)=A+B(X). o ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT:

An attempt has been made to analyze and interpret the financial statements of DKSSKN for the period of 2008-2012. These statements were prepared on the basis of the data in the balance sheets and profit and loss accounts of the DKSSKN for the above period. o Advantages of Trend Analysis: 1. A trend analysis indicates in which direction a business is moving i.e. upwards or downwards. 2. The trend analysis facilitates an efficient comparative study of the financial performance of a business enterprise over a period of time. o Disadvantages of Trend Analysis: 1. During the inflationary periods the data over a period of time becomes incomparable unless the absolute rupee is adjusted. 2. The undue importance must not be laid down on the percentage when there is a small number in the base year in such a case even a slight variation will be magnified by the percentage change. 4.. RATIO ANALYSIS:

A ratio is a simple mathematical expression. It is a number expressed in terms of another number, expressing the quantitative relationship between the two, ratio analysis is the technique of interpretation of financial statements with the help of various meaningful ratios. Ratios do not add to any information that is already available, but they show the relationship between two items in a more meaningful way. Ratio analysis is a very important tool of financial analysis. It is the process of establishing a significant relationship between the items of financial statements to provide a meaningful understanding of the performance and financial position of the firm. They help us to draw certain conclusions. Comparison with related facts is the basis of ratio analysis. Ratios may be used for comparison in any of the following ways. 1. Comparison of a firm with its own performance in the past. 2. Comparison of one firm with its own performance in the past.

3. Comparison 4. Comparison 5. Comparison standards. 6. Comparison

of one firm with another firm in the industry. of one firm with the industry as a whole. of an achieved performance with pre-determined of one department of a concern with other departments.

TYPES OF RATIOS: Liquidity ratio Profitability ratio Activity ratio. I. LIQUIDITY RATIOS: It measures the short-term solvency of the firm. In a short period of a firm should be able to meet all its short-term obligation i.e. current liabilities and provisions. It is current assets that yield funds in the short period. Current assets are those, which the firm can convert it into cash within one year or short run. Current assets should not only yield sufficient funds to meet current liabilities as they fall due but also to enable the firm to carry on its day-to-day activities. The following are the important liquidity ratios: 1. Current ratio 2. Acid test/quick ratio. Current ratio: Current ratio is the ratio of current assets to current liabilities. Current assets are the assets that are expected to be realized in cash or sold or consumed during the normal operating cycle of the business or within one year, whichever is longer, they include cash in hand and bank, bills receivable, net sundry debtors, stock of raw materials, finished goods and working in progress, prepaid expenses, outstanding incomes, assured incomes and short term or temporary investments. Current liabilities are the liabilities that are to be repaid within a period of one year. They include bills payable, sundry creditors, bank overdrafts, outstanding expenses, income receivable in advance, proposed dividend, provision for taxation, unclaimed dividends and short term loans and advanced repayable within one year. Any instalment of long-term liability payable within the next 12 months is also current liability.

CURRENT RATIO= CURRENT ASSETS/ CURRENT LIABILITIES Generally 2:1 ratio is considered ideal for the company. Acid test/quick ratio: The acid test ratio is the ratio between quick current assets and current liabilities and calculated by dividing the quick assets by current liabilities. Quick assets mean those which can be converted into cash immediately by exclusion of inventory and prepaid expenses from current assets. Acid test Ratio=Quick assets/Current liabilities. Generally 1: 1 ratio is considered to be ideal for the company.

II.

PROFITABILITY RATIO:

Profitability ratios measure the profitability of a company. Generally they are calculated either in relation to sales or in relation to investments. The various profitability ratios are discussed under the following heads. GENERAL PROFITABILITY RATIOS: 1. Gross Profit Ratio: Gross profit is one of the most commonly used ratios. It reveals the result of trading operations of the business. In other words, it indicates to us the profitability of the business. It is calculated as Gross Profit Ratio=(Gross Profit/Net sales)*100 Gross Profit=net sales-cost of goods sold. Net Sales=Total Sales- Sales Returns Cost of Goods Sold=Opening Stock + Purchases + Manufacturing expenses closing Stock. Generally the higher the ratio, the better will be the performance of the company. 2. Net profit ratio: It indicates the results of overall operations of the firm. While the gross profit ratio indicates the extent of profitability of core operations. Net profit ratio tells us about overall profitability. It is called as net profit

Ratio=(net profit after tax/net sales)*100 Generally higher the ratio, the more profitable to the company. 3. Operating ratio: it expresses the relationship between expenses incurred for running the business, and the resultant net sales. It is calculated as Operating ratio=cost of goods sold + office and administrative expenses + selling and distribution expenses. Generally lower the ratio, the better it is to the company. 4. Operating profit ratio: it establishes the relationship between operating profit and sales. It is calculated as Operating profit ratio=(operating profit/net sales)*100 Generally higher the ratio, the better it is to the company. 5. Expenses ratio: Expenses ratios are the ratios that supplement the information given by the operating ratio. Each of the expense rations highlights the relationship given by the particular expense and net sales. For example, factory expenses ratio is of factory expenses to net sales any expenditure can be shown as a ratio to sales. All such ratios fall under the broad head of expenses ratios. III. ACTIVITY RATIO:

Activity ratios measures the efficiency or effectiveness with which a firm managers its resources or assets. They calculate the speed with which various assets, in which funds are blocked up, get converted into sales. The significant activity or turnover ratios are 1. Inventory Turn Over Ratio Or Stock Turn Over Ratio: Stock turnover ratio indicates the number of items the stock has turned over into sales in a year. It indicates to us the extent of stock required to be held in order to achieve a desired level of sales. Inventory Turn Over Ratio = Cost of Goods Sold/Average Stock Cost of Goods Sold=Sales-Gross Profit. Average Stock=(Opening Stock + Closing Stock)/2 Generally 8 is considered ideal ratio of the company.

2. Debtors Turn Over Ratio: Debtors Turn Over Ratio expresses the relationship between debtors and net credit sales. It is calculated as Debtors Turn Over ratio= Net Credit Sales/Average Debtors. Generally the ratio between 10-12 an ideal value for the company. 3. Working Capital Turn Over Ratio: This ratio is defined as Working Capital Turn Over Ratio= Cost of Goods Sold/Working Capital Working Capital=Current Assets- Current Liabilities. Generally higher ratio indicates efficient utilization of firms funds. 4. Fixed Assets Turn Over Ratio: It is Defined as ratio of Net Sales to the Fixed Assets. Generally the ratio of around 5 is considered ideal for the company. 5. Total Assets Turn Over Ratio: It is defined as ratio of Net Sales to the Total Sales. Generally higher the ratio, the greater is the ability of the firm to utilize the investments in the business. o Advantages of Ratio Analysis: 1. Simplifies Financial Statement: Ratio analysis simplifies the comprehension of financial statement. Ratio tells the whole story of changes in the financial condition of the business. 2. Makes Intra firm Comparison Possible: Ratio analysis also makes possible comparison of the performance of different division of the firm. The ratio is helpful in deciding about their efficiency or otherwise in the past and likely performance in the future. 3. Useful in judging the efficiency of a business. 4. Useful in improving future performance. o Disadvantages of Ratio Analysis: 1. Reliability of ratios depends upon the correctness of the basic data. 2. An Individual ratio may by itself be meaningless. 3. Ratios are not always comparable.

4. Ratios ignore qualitative factors.

Chapter 4 DATA ANALYSIS AND INTERPRATION

Calculation of Comparative financial statements Comparative 2009 Comparative 2008-2009 Comparative Comparative 2009-2010 Comparative 2011 Comparative 2010-2010 Comparative 2012 Comparative 20011-2012 financial statements of Income For the year 2008financial statements of Balance sheet For the year financial of Income For the year 2009-2010 financial statements of Balance sheet For the year financial statements of Income For the year 20010financial statements of Balance Sheet For the year financial statements of Income For the year 20011financial statements of Balance sheet For the year

Calculation of Common-size statements : Common-size statements of Income For the Year 2008 - 2009 Common-size statements of Balance sheet As on Year 2008 2009 Common-size statements of Income For the Year 2009 - 2010 Common-size statements of Balance sheet As on Year 2009 2010 Common-size statements of Income For the Year 2010 - 2011 Common-size statements of Balance sheet For the Year 2010 2011 Common-size statements of Income For the Year 2011 - 2012

Common-size statements of Balance sheet For the Year 2011 2012

Calculation Of Trends of Financial Statements Trends Trends Trends Trends of of of of Income Statements For the Income Statements For the Balance Sheet For the year Balance Sheet For the year year 2008-2009,2010 year 2008-2011,2012 2008-2009,2010 2008-2011,2012

Chapter 4 DATA ANALYSIS AND INTERPRATION


As stated above in the 3rd chapter that analysis of financial can be analysised using four common techniques they are Comparative Financial Statements Common-Size Financial Statements Trend Analysis Ratio Analysis

The project undertaken by myself I have selected all the tools to numerically analysing the financial statements of D.K.S.S.K.N. Chikodi. I have considered tools and technique for this approached study are: Comparative Financial Statements. (Horizontal Analysis) Common-Size Financial Statements. Trend Analysis. Ratio Analysis

Comparative Financial Statements


Method of Calculations:

While in the calculation the earliest year is considered as the preceding year. Change in amount or increase or decrease of amount is summed by using formula : Increase or decrease of amount= Current year Preceding year. (Say amount of 2009 subtracted by 2008) Change in Percentage is calculated using formula: Change in Percentage = 100 X Change in Amount -----------------------------------Base Year

Analysis of first tools that is Of a Comparative financial statements is as follows: Calculation of Comparative financial statements (Horizontal Analysis): Table No. 1.1 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Income For the year 2008-2009
Particulars Amount 2009 Amount 2008 Change (in Rupees) Change (In Percentage)

INCOME Gross Profit Interest & Dividend Subsidies Misc. Income Net Loss C/f to B/s Total EXPENDITURE 327,550,060 484,593 107,678,788 9,786,500 --------------445,499,941 151,545,944 1,369,282 65,772,789 4,889,633 32,805,127 256,382,775 +176,004,116 -884,689 +41,905,999 +4,896,867 -32,805,127 +189,117,166 +116.14% +64.61% +63.71% +100.15% -100% +73.76%

Gross Loss Salaries & Wages Interest Repair & Maintenance Establishment Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total

131,260,248 42,630,974 129,791,287 12,791,631 7,548,149 1,572,928 2,050,490 87,889,222 29,965,012 445,499,941

-----------44,807,699 161,627,040 12,024,077 9,084,545 1,170,363 22,376,683 5,292,368 --------------256,382,775

+131,260,248 -2,176,725 -31,835,753 +767,554 -1,536,396 +402,565 -20,326,193 +82,596,854 +29,965,012 +189,117,166

+100% -4.86% -19.69% +6.38% -16.91% +34.39% -90.86% +1560.67% +100% +73.76%

Source: Financial Statements of DKSSKN Chikodi.

Chart 1 Comparative financial statements (Horizontal Analysis) of Income For the year 2008-2009

350,000,000

300,000,000

250,000,000

200,000,000 151,545,944 150,000,000 161,627,040

100,000,000 65,772,789 50,000,000 32,805,127 4,889,633 1,369,282 0 44,807,699 0 22,376,683 12,024,077 9,084,545 5,292,368 1,170,363 0

Amount 2009 Amount 2008

INTERPRETATION: There is an increase in gross profit of 176,004,116 from 151,545,944 in 2008 to 327,550,060 in 2009. There has been tremendous increase in miscellaneous expenses of 1560.67% from 5292368 in 2008 to 87889222 in 2009. Net loss from 2008 which was 32,805,127 has certainly decreased to profit and it amounted plus 29965012 in 2009.

Table No. 1.2 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Balance sheet
Particulars Amount 2009 Amount 2008 Change (in Rupees) Change (In

For the year 2008-2009

Percentage ) LIABILITIES Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposit Suspences,Sunderie s & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL 1,374,289,493 16,535,673 1,228,803,889 98,184,345 370,904,282 359,837,673 621,586 174,474,897 3,623,651,83 7 1,307,442,553 16,732,280 1,039,879,461 101,440,324 274,333,895 389,802,685 306,080 132,400,951 3,262,338,22 9 +66,846,940 -196,607 +188,924,428 -3,255,979 +96,570,387 -29,965,012 +315,506 +42,073,946 +361,313,60 8 +5.11% -1.18% +18.17% -3.21% +35.20% -7.69% +103.08% +31.78% +11.08%

152,000,000 134,395,084 841,057,302 974,025,835 434,798,843 7,102,359 664,895,774 567,376,639 3,623,651,83 7

152,000,000 133,660,864 757,903,376 717,854,010 502,835,821 12,836,499 666,174,201 471,073,459 3,262,338,22 9 +734,220 +83,153,926 +256,171,825 -68,036,978 -5,734,140 -1,278,427 +96,303,180 +361,313,60 8 +0.55% +10.97% +35.69% -13.53% -44.67% -0.19% +20.44% +11.08%

Source: Financial Statements of DKSSKN Chikodi.

Chart 2

Comparative financial statements (Horizontal Analysis) of Balance sheet For the year 2008-2009

1,200,000,000 974,025,835 841,057,302 800,000,000 664,895,774 600,000,000 434,798,843 400,000,000 134,395,084 200,000,000 152,000,000 7,102,359 0 98,184,345 16,535,673 0 0 621,586 370,904,282 Series1 174,474,897 Series2 567,376,639 359,837,673

1,000,000,000

INTERPRETATION: 1. There is increase in capital to Rs. 133660864 compare to last year i.e. Rs.134395084. But 0.02 % has been decrease current year. Although the bank has issued shares in order to raise fund. But there has been decrease in Bank over draft and payables by 44.67%. 2. There has been substantial change in cash in hand of 103.08% from 306080 in 2008 to 621586 in 2009. 3. Fixed assets have increased by 5.11 % from 1307442553 in 2008 to 1374289493 in 2009.

Table No. 2.1 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Income For the year 2009-2010 Particulars
INCOME Gross Profit Interest & Dividend Subsidies Misc. Income Net Loss C/f to B/s
Total

2010
327,550,060 484,593 107,678,788 9,786,500 --------------445,499,941

2009
287,021,523 1,237,508 -------------3,334,726 -------------291,593,757

Change in Rupees
+40,528,537 -752,915
+107,678,788

Change in Percentage.
+12.37% -155.37% +100% +65.93%

+6,451,774

+153,906,184

+34.55%

EXPENDITURE Gross Loss Salaries & Wages Interest Repair & Maintenance Establishment Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total 131,260,248 42,630,974 129,791,287 12,791,631 7,548,149 1,572,928 2,050,490 87,889,222 29,965,012
445,499,941 +131,260,248

45,740,889 132,800,108 20,138,940 11,038,059 1,399,070 2,751,944 27,947,146 49,777,600


291,593,757

-3,109,915 -3,008,821 -7,347,309 -3,489,910 +173,858 -701,454 -59,942,076 -19,812,588


+153,906,184

+100% -7.29% +2.31% -57.44% -46.24% +11.05% +34.21% +68.20% -66.12%


+34.55%

Source: Financial Statements of DKSSKN Chikodi

Chart 3 -Figure showing Change in Rupees.

40000000 20000000 752,915 0 -20000000 -40000000 -40,528,537 -60000000 -59,942,076 -80000000 -1E+08 -1.2E+08 -1.4E+08 -1.6E+08 -1.8E+08 -153,906,184 -107,678,788 -131,260,248 Change (in Rupees) Change (In Percentage) -6,451,774 7,347,309 3,109,915 19,812,588

3,489,910701,454 3,008,821

-173,858

INTERPRETATION: There is a decrease in gross profit of 12.37 % in 2010 compared to 2009. There has been tremendous increase in repair and maintenance of 57.44% that is increased by 7347309 rs in 2010 from 2009. There has been surplus amount of Rs.19812588. Net profit has been accounted to Rs.49777600 compared to 2009 increasing 66.12% in 2010.

Table No. 2.2 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Balance sheet For the year 2009-2010

Particulars

Amount 2010

Amount 2009

Change (in Rupees)

Change (In Percentage )

LIABILITIES Share capital


Authorised Share Capital

152,000,000 135,430,051 2,316,591,982 1,302,202,490 366,008,584 ---------------718,232,330 692,770,803 5,531,236,24 1

152,000,000 134,395,084 841,057,302 974,025,835 434,798,843 7,102,359 664,895,774 567,376,639 3,623,651,83 7 +1,034,967 +1,475,534,680 +328,176,655 -68,790,259 -7,102,359 +53,336,556 +125,394,164 +19,07,584,40 4 +33.69% +15.82% -100% +8.02% +22.10% +52.64% +0.77% +175.44%

Paid up Share Capital Reserve And Surplus


Working Capital Loans

Term Loans
Other Bank O.D. Payables Statutory & Other Deposits

Suspences,Sunderie s & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL

2,842,889,419 16,915,053 1,666,080,342 59,550,548 484,409,546 310,060,073

1,374,289,493 16,535,673 1,228,803,889 98,184,345 370,904,282 359,837,673 621,586

+1,468,599,926 +379,380 +437,276,453 -38,633,797 +113,505,264 -49,777,600 +890,658 -24,655,881

+106.86% +2.29% +35.59% -39.35% +30.60% -13.83% +143.29% -14.13%

1,512,244 149,819,016 174,474,897

5,531,236,24 3,623,651,83 +1,907,584,40 +52.64% 1 7 4 Source: Financial Statements of DKSSKN Chikodi

Interpretation: Reserves and surplus have increased have increased 175.44% in year 2010 compared to 2009. While other banks over draft payables has been fully set 100% by Rs. 7102359.

Particulars

Amount 2011

Amount 2010

Change
(in Rupees)

Change (In Percentage)

INCOME Gross Profit Interest & Dividend Misc. Income Net Loss C/f to B/s Total EXPENDITURE Gross Loss B/f to P&L 61,906,586 -------------+61,906,586 +100% 285,624,206 2,938,017 32,966,491 287,021,523 1,237,508 3,334,726 -------------291,593,757 -1,397,317 +1,700,563 +29,631,765 -0.49% 137.42% 888.58%

321,528,713

+29,934,956

+10.27%

Most important interpretation would be the spectacular increase in fixed assets by more than double amounting 1374289493 in 2009 while compared its amounted to Rs. 2842889419 measuring 106.86% increase. Table No. 3.1 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Income For the year 20010-2011

A/c Salaries & Wages Interest Repair & Maintenance Establishment Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total

37,221,096 155,373,803 26,927,859 8,459,148 1,772,447 2,680,425 4,405,050 22,782,300 321,528,713

45,740,889 132,800,108 20,138,940 11,038,059 1,399,070 2,751,944 27,947,146 49,777,600 291,593,757

-8,519,793 +22,573,695 +6,788,919 -2,578,911 +373,377 -71,519 -23,542,096 -26,995,300 +29,934,956

-18.63% +17% +33.71% -23.34% +26.69% -2.60% -84.24% -54.23% +10.27%

Source: Financial Statements of DKSSKN Chikodi

350000000 300000000 250000000 200000000 150000000 100000000 Amount 2010 50000000 0 INCOME Gross Profit Interest & Dividend Misc. Income Net Loss C/f to B/s EXPENDITURE Gross Loss B/f to P&L A/c Salaries & Wages Interest Repair & Maintenance Establishment Expenses Management Expenses Rates & Taxes Miscelenious Expenses Net Profit C/f to B/s 2 per. Mov. Avg. (Amount 2010) Amount 2011

Interpretation: Miscellaneous expenses have been the highlight in this years interpretation which has been considerably increased by 888.58% from 3334726 in 2010 to 32966491 in 2011. Again in the year 2011 the profit has decrease by 54.23% from 22782300 in 2010 to 49777600 in 2011.

Table No. 3.2

D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Balance Sheet For the year 2010-2010
Particulars Amount 2011 Amount 2010 Change
(in Rupees)

Change
(In Percentage)

LIABILITIES Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL 2,873,790,558 27,381,571 1,902,665,158 56,302,415 384,968,154 287,277,773 467,470 298,532,968 2,842,889,419 16,915,053 1,666,080,342 59,550,548 484,409,546 310,060,073 1,512,244 149,819,016 +30,901,139 +10,466,518 +236,584,816 -3,248,133 -99,441,392 -22,782,300 -1,044,774 +148,713,952 +1.09% +61.88% +14.20% -5.45% -20.53% -7.3% -69.09% +99.26%

172,000,000 136,596,015 2,581,645,278 1,358,779,236 229,397,976 823,246,510 701,721,052 5,831,386,066

152,000,000 135,430,051 2,316,591,982 1,302,202,490 366,008,584 718,232,330 692,770,803 5,531,236,241

20,000,000 +1,165,964 +265,053,296 +56,576,746


-136,610,608

13.16% +0.86% +11.44% +4.35% -37.32% +14.62% +1.29% +5.43%

+10,501,4180 +8,950,249 +300,149,825

5,831,386,066 5,531,236,241 +300,149,825 +5.43% Source: Financial Statements of DKSSKN Chikodi

INTERPRETATION: There is a decrease in cash in hand of Rs.1044774 by 69.09% in 2011 compared to 2010. There has been substantial change bank balance by 99.26% that is 298532968 in 2011 compared to 2010.

Investments have increased by 61.88% since 2011 which was Rs. 16915053 in 2010 compared to 27381571 in2011.

Table No. 4.1 D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Income For the year 20011-2012
Source: Financial Statements of DKSSKN Chikodi Particulars Amount 2012 Amount 2011 Change (in Rupees) Change (In Percentage)

INCOME Gross Profit Interest & Dividend Misc. Income Net Loss C/f to B/s Total EXPENDITURE Gross Loss Salaries & Wages Interest Repair & Maintenance Establishment Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total 6,118,729 42,058,462 197,265,519 23,994,313 9,981,628 2,272,953 5,285,908 9,880,142 62,674,321 359,531,974 61,906,586 37,221,096 155,373,803 26,927,859 8,459,148 1,772,447 2,680,425 4,405,050 22,782,300 321,528,713 -55,787,857 +4,837,366 +41,891,716 -2,933,546 +1,522,480 +500,506 +2,605,483 +5,475,092 +39,892,021 38,003,261 -90.12% +13% +26.96% -10.89% +18% +28.24% +97.20% +124.29% +175.10% +11.81% 350,488,982 3,911,386 5,131,606 ------------359,531,974 285,624,206 2,938,017 32,966,491 -------------321,528,713 +64,864,776 +973,369 -27,834,885 -------------38,003,261 +22.71% +33.13% -84.43% -------------+11.81%

INTERPRETATION: Gross profit has increased to 350488982 in 2012 which was 285624206 in 2011, increased by 22%. Its also notable that Net profit has been drastically increased heavily percenting 175.10% amounting to 39892021. It was 22782300 in 2011 compared to 62674321 in 2012. As profit has increased rapidly from 2680425 in 2011 to 5285908 in 2012 Table No. 4.2

D.K.S.S.K.N. Chikodi Comparative financial statements (Horizontal Analysis) of Balance sheet For the year 20011-2012
Particulars Amount 2012 Amount 2011 Change
(in Rupees)

Change
(In Percentage)

LIABILITIES Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL 2,956,998,803 53,534,935 1,773,586,043 101,335,285 445,534,836 224,603,452 4,913,828 297,454,877 5,857,962,059 2,873,790,558 27,381,571 1,902,665,158 56,302,415 384,968,154 287,277,773 467,470 298,532,968 5,831,386,066 +83,208,245 +26,153,364 -129,079,115 +45,032,870 +60,566,682 -62674321 4,446,358 -1,078,091 26,575,993 +2.89% +95.51% -6.78% +79.98% +15.73% -21.81% +207.85% -0.36% +0.46%

172,000,000 155,617,306 2,818,111,135 1,590,686,946 17,908,943 829,487,861 446,149,869 5,857,962,059

172,000,000 136,596,015 2,581,645,278 1,358,779,236 229,397,976 823,246,510 701,721,052 5,831,386,066 +19,021,291 +236,465,857 +231,907,710
-211,489,033

+13.92% +9.16% +17.07% -92.19% +0.76% -36.42% +0.46%

+6,241,351
-255,571,183

26,575,993

Source: Financial Statements of DKSSKN Chikodi

Interpretation: Cash in Hand has increased 207.85 % from 467470 in 2011 to 4913828 in 2012. Working capital has been considerably increased by 231907710 percenting 17.07%.

COMMON-SIZE FINANCIAL STATEMENTS.


Preparation of Common size income and Balance sheet statement. Steps: Selecting Sales in income and total liabilities and capital or total assets in balance sheet as the base, which is considered equal to 100. Calculation of the percentage of each items to Sales in income and total liabilities and capital or total assets in balance sheet and mentioned it in the separate column provided after amount column. Formula used to calculate percentage of each items to Sales in income and total liabilities and capital or total assets in balance sheet is Items in Statements Percentage = ------------------------------

Sales or total liabilities and Capital or total assets.

Here during the calculations terms are added to reduce redundancy, those amount are total of some sub items so total in a whole is used. Those are 1. Operating Expenses = Salary and Wages. 2. Non-Operating Income = Interest and Dividend + Miscellaneous Income + Subsidies 3. Non-Operating Expenses = Finance expense + Repair and Maintenance + Establishment Expenses + Management Expenses Miscellaneous Expenses.

Calculation of Common-size statements: Table No. 5.1 D.K.S.S.K.N. Chikodi Common-size statements of Income For the Year 2008 - 2009
Source: Financial Statements of DKSSKN Chikodi

Particulars
Gross Profit (Sales Cost) Less: Operating Expenses Operating Profit Add: Non-Operating Income Profit Before Interest and Taxes Less: Non-operating Expenses Total Less: Gross Loss Net Profit Before Tax Less Tax Net Loss/profit after tax

Amount 2008
151545944 44807699 106738245 72031704 178769949 189198393 -10428444 -------------10428444 22376683 -32805127

Percentage 2008(%)
100.00% 29.57% 70.43% 47.53% 117.96% 124.84% -6.88 ----------6.88 14.77 -21.65

Amount 2009
327550060 42630974 284919086 117949881 402868967 239593217 163275750 131260248 32015502 2050490 29,965,012

Percentage 2009(%)
100.00% 13.01% 86.99% 36.01% 123.00% 73.15% 49.85% 40.07% 9.78% 0.63% 9.15%

Table No. 5.2

D.K.S.S.K.N. Chikodi Common-size statements of Balance sheet As on Year 2008 2009 Particulars Amount 2008 % (In Percentage) Amount 2009
(In Percentage)

LIABILITIES
Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL
152,000,000 133,660,864 757,903,376 717,854,010 502,835,821 12,836,499 666,174,201 4.0970% 23.2319% 22.0042% 15.4133% 0.3934% 20.4201% 152,000,000 134,395,084 841,057,302 974,025,835 434,798,843 7,102,359 664,895,774 3.7088% 23.2102% 26.8796% 11.9989% 0.1960% 18.3487%

471,073,459 3,262,338,229

14.4397% 100%

567,376,639 3,623,651,837

15.6575% 100%

ASSETS
Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL
1,307,442,553 16,732,280 1,039,879,461 101,440,324 274,333,895 389,802,685 306,080 132,400,951 3,262,338,229 40.0768% 0.1512% 31.8752% 3.1094% 8.4091% 11.9485% 0.0093% 4.0584% 100% 1,374,289,493 16,535,673 1,228,803,889 98,184,345 370,904,282 359,837,673 621,586 174,474,897 3,623,651,837 37.9855% 0.4563% 33.9106% 2.7095% 10.2356% 9.9302% 0.0171% 4.8148%

100%

Source: Financial Statements of DKSSKN Chikodi

Interpretation: In the year 2008 income statement showed that major amount consisted non operating expenses which caused a loss of rs.10428444 at 6.88% its total amounted compared to Profit before tax was 124% during that year.

Major part of assets contains fixed and current assets consisting of 71.95% that is 2347322014 out of 3262338229 in 2008 and same in the next year where assets major items were fixed and current assets of 72%. Cash in hand in 2008 and even in 2009 had the smallest part to play. The amount of tax showed 14.77% in 2008 adding further to the loss.

Table No. 6.1 D.K.S.S.K.N. Chikodi Common-size statements of Income For the Year 2009 - 2010
Particulars Gross Profit (Sales Cost) Less: Operating Expenses Operating Profit Add: Non-Operating Income Profit Before Interest and Taxes Less: Non-operating Expenses Total Less: Gross Loss Net Profit Before Tax Less Tax Net Profit after tax Amount 2009 327550060 42630974 284919086 117949881 402868967 239593217 163275750 131260248 32015502 2050490 29,965,012 Percentage 2009(%) 100.00% 13.01% 86.99% 36.01% 123.00% 73.15% 49.85% 40.07% 9.78% 0.63% 9.15% Amount 2010 287021523 45740889 241280634 4572234 245852868 193323324 52529544 -----------52529544 2751944 4977760 Percentage 2010(%) 100.00% 15.9363% 84.0636 1.5929 85.6565% 67.3549% 18.3016% ------------18.3016% 0.9587 17.3425%

Source: Financial Statements of DKSSKN Chikodi

Table No. 6.2 D.K.S.S.K.N. Chikodi Common-size statements of Balance sheet As on Year 2009 - 2010 Particulars Amount 2009
(In Percentage)

Amount 2010

% (In Percentage)

LIABILITIES
Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL 152,000,000 134,395,084 841,057,302 974,025,835 434,798,843 7,102,359 664,895,774 567,376,639 3,623,651,837 152,000,000 135,430,051 2,316,591,982 1,302,202,490 366,008,584 ---------------718,232,330 692,770,803 5,531,236,241

3.7088% 23.2102% 26.8796% 11.9989% 0.1960% 18.3487% 15.6575% 100%

2.4484% 41.8819% 23.5427% 6.6171% 12.9850% 12.5247% 100%

ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c 1,374,289,493 16,535,673 1,228,803,889 98,184,345 370,904,282 359,837,673 621,586 174,474,897 3,623,651,837 37.9855% 0.4563% 33.9106% 2.7095% 10.2356% 9.9302% 0.0171% 4.8148% 2,842,889,419 16,915,053 1,666,080,342 59,550,548 484,409,546 310,060,073 1,512,244 149,819,016 5,531,236,241 51.3969% 0.3058% 30.1213% 1.0766% 8.7577% 5.6056% 0.0273% 2.7085% 100%

TOTAL

100%

Source: Financial Statements of DKSSKN Chikodi

Interpretation: Reserve and surplus had a greater impact in 2010 balance sheet which raised drastically from 23.10% in 2009 to acquiring a major part of 41.89% in 2010 with 2316591982Rs. Again in this year 2010 fixed and current assets had the highest holding. Table No. 7.1 D.K.S.S.K.N. Chikodi Common-size statements of Income

For the Year 2010 - 2011


Particulars Gross Profit (Sales Cost) Less: Operating Expenses Operating Profit Add: Non-Operating Income Profit Before Interest and Taxes Less: Non-operating Expenses Total Less: Gross Loss Net Profit Before Tax Less Tax Net Profit after tax Amount 2010 287021523 45740889 241280634 4572234 245852868 193323324 52529544 -----------52529544 2751944 4977760 Percentage 2010(%) 100.00% 15.9363% 84.0636 1.5929 85.6565% 67.3549% 18.3016% ------------18.3016% 0.9587 17.3425% Amount 2011 285624206 37221096 248403110 35904508 284307618 196938307 87369312 61906586 25462726 2680425 22782301 Percentage 2011(%) 100.00% 13.03% 86.96% 12.57% 99.53% 68.95% 30.58% 21.67% 8.91% 0.93% 7.97%

Source: Financial Statements of DKSSKN Chikodi

Table No. 7.2 D.K.S.S.K.N. Chikodi Common-size statements of Balance sheet As on Year 2010 - 2011 Particulars LIABILITIES
Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL ASSETS Fixed Assets 2,842,889,419 51.3969% 2,873,790,558 49.28% 152,000,000 135,430,051 2,316,591,982 1,302,202,490 366,008,584 ---------------718,232,330 692,770,803 5,531,236,241 172,000,000 136,596,015 2,581,645,278 1,358,779,236 229,397,976 -------------823,246,510 701,721,052 5,831,386,066

Amount 2010

(In Percentage)

Amount 2011

%
(In Percentage)

2.4484% 41.8819% 23.5427% 6.6171% -------------12.9850% 12.5247% 100%

2.34% 44.27% 23.30% 3.93% -----------------14.12% 12.03% 100%

Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c

16,915,053 1,666,080,342 59,550,548 484,409,546 310,060,073 1,512,244 149,819,016 5,531,236,241

0.3058% 30.1213% 1.0766% 8.7577% 5.6056% 0.0273% 2.7085% 100%

27,381,571 1,902,665,158 56,302,415 384,968,154 287,277,773 467,470 298,532,968 5,831,386,066

0.47% 32.63% 0.97% 6.60% 4.93% 0.01% 5.12% 100%

TOTAL

Source: Financial Statements of DKSSKN Chikodi

Interpretation: In year 2010 source of operating income was too low of just 1.5929% which increased to 12.57% in next year. In year 2011 there was a record of gross loss of 21.67% due to heavy operating expenses. In 2011 the amount of fixed assets has increased nearly half of all the assets and cash balance has rapidally decreased to 0.01%. Table No. 8.1 D.K.S.S.K.N. Chikodi Common-size statements of Income
For the Year 2011 - 2012

Particulars Gross Profit (Sales Cost) Less: Operating Expenses Operating Profit Add: Non-Operating Income Profit Before Interest and Taxes Less: Non-operating Expenses Total Less: Gross Loss Net Profit Before Tax Less Tax Net Profit after tax

Amount 2011 285624206 37221096 248403110 35904508 284307618 196938307 87369312 61906586 25462726 2680425 22782301

Percentage 2011(%) 100.00% 13.03% 86.96% 12.57% 99.53% 68.95% 30.58% 21.67% 8.91% 0.93% 7.97%

Amount 2012 350488982 42058462 308430520 9042991 317473511 243394555 74078956 6118729 67960227 5285908 62674619

Percentage 2012(%) 100% 12% 88% 2.58% 90.58% 69.44% 21.44% 1.75% 19.40% 1.50% 17.88%

Source: Financial Statements of DKSSKN Chikodi

Table No. 8.2 D.K.S.S.K.N. Chikodi Common-size statements of Balance sheet As on Year 2011 - 2012

Particulars

Amount 2011

(In Percentage)

Amount 2012

%
(In Percentage)

LIABILITIES
Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c 2,873,790,558 27,381,571 1,902,665,158 56,302,415 384,968,154 287,277,773 467,470 298,532,968 5,831,386,066 49.28% 0.47% 32.63% 0.97% 6.60% 4.93% 0.01% 5.12% 100% 2,956,998,803 53,534,935 1,773,586,043 101,335,285 445,534,836 224,603,452 4,913,828 297,454,877 5,857,962,059 100% 50.48% 0.91% 30.28% 1.73% 7.61% 3.83% 0.08% 5.07 172,000,000 136,596,015 2,581,645,278 1,358,779,236 229,397,976 -------------823,246,510 701,721,052 5,831,386,066 172,000,000 155,617,306 2,818,111,135 1,590,686,946 17,908,943 ----------------829,487,861 446,149,869 5,857,962,059

2.34% 44.27% 23.30% 3.93% ---------------14.12% 12.03% 100%

2.66% 48.11% 27.15% 0.30% ------14.16% 7.62% 100%

TOTAL

Source: Financial Statements of DKSSKN Chikodi

Interpretation: Non operating income and gross loss has certain ally decreased heavily to 2.58% in 2012 and 1.75% from 21.67% in 2011 respectively.

From above it can be interpreted that term loan has decreased a lot in recent preceding years. Its been a trend that amount of investment has been consistentally less in all the financial years of the study.
Receivables have shown a decent trend showing consistence performance all the year which rotated around 7-10% all 5 years of the study.

Trend Analysis
Trend analysis is a technique, employed to analyse the trend of data shown in a series of financial statements of several successive years. The trend obtained by such an analysis is expressed in percentages. Trend percentage analysis involves the calculation of percentage relationship that each statement bears to the same item in the base year. The base year may be any one of the periods involved in the analysis but the earliest period is mostly taken as the base year. The trend percentage statement is an analytical device for condensing the absolute rupee data by comparative statements. These trend percentages can be represented in various ways. They may be shown in a horizontal or vertical manner. They can be plotted on a chart or on a semi-logarithmetic scale or on a graph by slotting curves. They are sometimes calculated using the trend X as index.

How to calculate trend analysis? (1) Selection of the base year: any year, either the earliest year or the latest year or the intervening year, may be taken as the base year. But the base year selected should be normal and should be truly representative of all years involved in the analysis. Usually, the earliest year is taken as the base year. (2) Every item in the base statement is stated as 100. (3) Trend ratio is computed by dividing each amount in the statement with the corresponding item in the base statement and the result is expressed as a percentage. (4) A downward trend will be clearly indicated by the trend percentage being less than 100 and an upward trend by the trend percentage being more than 100. These trend percentages may not be calculated for insignificant items, which are normally clubbed together.

Calculation of Trends of Financial Statements Table 9.1.1 D.K.S.S.K.N. Chikodi Trends of Income Statements For the year 2008-2009, 2010

Particulars

Year 2008

Year 2009

Year 2010

% 200

% 2009

% 2010

8
INCOME Gross Profit Interest & Dividend Subsidies Misc. Income Net Loss C/f to B/s Total 151,545,94 4 1,369,282 65,772,789 4,889,633 32,805,127 327,550,06 0 484,593 107,678,78 8 9,786,500 --------------287,021,52 3 1,237,508 -------------3,334,726 --------------

100 100 100 100 100


100

216.14 35.39 163.71 200.15 --------173.76

189.4 0 90.38 -------68.20 -------113.7 3

256,382,77 5

445,499,94 1

291,593,75 7

EXPENDITUR E Gross Loss Salaries & Wages Interest Repair & Maintenance Establishmen t Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total -----------44,807,699 161,627,04 0 12,024,077 9,084,545 1,170,363 22,376,683 5,292,368 --------------131,260,24 8 42,630,974 129,791,28 7 12,791,631 7,548,149 1,572,928 2,050,490 87,889,222 29,965,012 ------------45,740,889 132,800,10 8 20,138,940 11,038,059 1,399,070 2,751,944 27,947,146 49,777,600

100 100 100 100 100 100 100 100 100

---------95.14 80.30 106.38 83.09 134.40 9.16 1660.7 ---------

-------102.0 8 82.16 167.4 9 121.5 0 119.5 4 12.30 528.0 6 --------

256,382,77 5

445,499,94 291,593,75 100 173.76 113.7 1 7 3 Source: Financial Statements of DKSSKN Chikodi

Table 9.1.2 D.K.S.S.K.N. Chikodi Trends of Income Statements For the year 2008-2011, 2012

Particulars
INCOME Gross Profit Interest & Dividend Subsidies Misc. Income Net Loss C/f to B/s Total

Year 2008

Year 2011

Year 2012

% 200 8
100 100 100 100 100
100

% 2011

% 2012

151,545,94 4 1,369,282 65,772,789 4,889,633 32,805,127

285,624,206 2,938,017 --------------32,966,491

350,488,98 2 3,911,386 -------------5,131,606 -------------

---------------321,528,713

188.4 7 214.2 7 -------674.2 1 -------125.4 1

231.27 285.65 -------104.94 -------140.23

256,382,7 75

359,531,9 74

EXPENDITU RE Gross Loss Salaries & Wages Interest Repair & Maintenance Establishmen t Expenses Management Expenses Rates & Taxes Miscellaneous Expenses Net Profit C/f to B/s Total -----------44,807,699 161,627,04 0 12,024,077 9,084,545 1,170,363 22,376,683 5,292,368 -------------256,382,7 75 61,906,586 37,221,096 155,373,803 26,927,859 8,459,148 1,772,447 2,680,425 4,405,050 22,782,300 6,118,729 42,058,462 197,265,51 9 23,994,313 9,981,628 2,272,953 5,285,908 9,880,142 62,674,321

100 100 100 100 100 100 100 100 100

-------83.07 96.13 223.9 4 93.16 151.4 4 11.98 83.23 --------

-------93.87 122.04 199.55 109.88 194.21 23.62 186.68 ---------

321,528,713

359,531,9 100 125.4 140.23 74 1 Source: Financial Statements of DKSSKN Chikodi

INTERPRETATION:

Most important trend notable is that net profit is considerably increasing in an increasing trend, where in 2008, there was a loss amounting 32,805,127 to profit in continuous four financial year those are 29965012 in 2009, 49777600 in 2010, 22782300 in 2011 and finally 62674321 in 2012 In the above analysis it can be clearly seen that gross profit is in rising trend in major, where as in between smaller hiccups are measured. In 2008 that is in base year compared to 100% in 2012 its percentage increased to 231.27 and lowest was 188.47 in 2011. An item in Income statement-subsidies amounted 65772789 in, which increased by 163.71% in next year 2009. This item was not further accounted for next 3years in factories financial statements. Repair and maintenance expenses has been continuously increasing from 2008 to all other four years. Expense has increased by 106.38%, 167.49%, 223.94% and 199.55% in 2009, 2010, 2011 and 2012 respectively. Miscellaneous Expenses have recorded 1660.7% and 528.06% increase in 2009 and 2010 compared to 2008.

Table 9.2.1 D.K.S.S.K.N. Chikodi Trends of Balance Sheet For the year 2008-2009, 2010

Particulars LIABILITIES Share capital Authorised Share Capital Paid up Share Capital Reserve And Surplus

Year 2008

Year 2009

Year 2010

% 2008

% 2009

% 2010

152,000,000 133,660,864 757,903,376

152,000,000 134,395,084 841,057,302

152,000,000 135,430,051 2,316,591,982

100 100 100

100 100.5 5 110.9

100 101.3 2 305.6

Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderies & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL

717,854,010 502,835,821 12,836,499 666,174,201 471,073,459 3,262,338,229

974,025,835 434,798,843 7,102,359 664,895,774 567,376,639 3,623,651,837

1,302,202,490 366,008,584 ---------------718,232,330 692,770,803 5,531,236,241

100 100 100 100 100 100

8 135.6 9 86.47 55.33 99.81 120.4 4 111.0 7

6 181.4 0 72.79 -------107.8 1 147.0 6 169.5 4

1,307,442,553 16,732,280 1,039,879,461 101,440,324 274,333,895 389,802,685 306,080 132,400,951 3,262,338,229

1,374,289,493 16,535,673 1,228,803,889 98,184,345 370,904,282 359,837,673 621,586 174,474,897 3,623,651,837

2,842,889,419 16,915,053 1,666,080,342 59,550,548 484,409,546 310,060,073 1,512,244 149,819,016 5,531,236,241

100 100 100 100 100 100 100 100 100

105.1 1 98.82 118.1 6 96.79 135.2 0 92.32 203.0 8 131.7 8 111.0 7

217.4 4 101.0 9 160.2 2 58.71 176.5 8 79.54 494.0 7 113.1 6 169.5 4

Source: Financial Statements of DKSSKN Chikodi

Table 9.2.2 D.K.S.S.K.N. Chikodi Trends of Balance Sheet For the year 2008-2011, 2012
Particulars LIABILITIES Share capital Authorised Share Capital Paid up Share Year 2008 Year 2011 Year 2012 % 2008 % 2011 % 2012

152,000,000 133,660,864

172,000,000 136,596,015

172,000,000 155,617,306

100 100

113.15 102.20

113.1 5 116.43

Capital Reserve And Surplus Working Capital Loans Term Loans Other Bank O.D. Payables Statutory & Other Deposits Suspences,Sunderi es & Cane Payables TOTAL ASSETS Fixed Assets Investments Current Assets Loans And Advances Other Receivables Profit And Loss A/c Cash & Bank Balances Cash In Hand Bank Balance S.B.& C.D.A/c TOTAL

757,903,376 717,854,010 502,835,821 12,836,499 666,174,201 471,073,459 3,262,338,229

2,581,645,278 1,358,779,236 229,397,976 ------------823,246,510

2,818,111,135 1,590,686,946 17,908,943 ------------------

100 100 100 100 100

340.63 189.29 45.62 -------123.58 148.97 178.74

371.82 221.60 3.56 --------124.51 94.71 179.56

829,487,861 100 701,721,052 5,831,386,066 446,149,869 5,857,962,059 100

1,307,442,553 16,732,280 1,039,879,461 101,440,324 274,333,895 389,802,685 306,080 132,400,951 3,262,338,229

2,873,790,558 27,381,571 1,902,665,158 56,302,415 384,968,154 287,277,773 467,470 298,532,968 5,831,386,066

2,956,998,803 53,534,935 1,773,586,043 101,335,285 445,534,836 224,603,452 4,913,828 297,454,877 5,857,962,059

100 100 100 100 100 100 100 100 100

219.80 163.64 182.97 55.50 140.32 73.70 152.72 225.47 178.74

226.16 319.95 170.56 99.90 162.41 57.62 1605.4 224.66 179.56

Source: Financial Statements of DKSSKN Chikodi

INTERPRETATION: Reserves and Surplus has been continuously increasing in a trend without any fall in all the 5 years. It has increased by 110.98%, 305.66%, 340.63% and 371.82% in 2009, 2010, 2011 and 2012 respectively. Whereas liability, term loan has been drastically decreasing year by year from 100% in 2008 to 3.56% in 2012. Bank over Draft and Payables were a part of factories liability till year 2009 which was decreased to 55.33% from 2008. There has been no further Bank over Draft and Payables till 2012.

Fixed assets investments in DKSSKN Chikodi has been in increasing trend since 2008 till 2012. In all 5 financial years

management has increased the investments by 111.07 in 2009, 169.54 in 2010, and 178.74 in 2011 and 179.56 in 2012. The amount which has been dynamic in nature or always changing is Assets side of balance sheet that is Cash in Hand. Cash in hand means liquid assets which can be very useful to working capital management. Percentage has increased heavily from 306080 in 2008 to 4913828 percenting increase by 1605.4 in 2012.

Total amount of income statements, assets and liabilities are also increasing year by year from 3262338229 in 2008 to 5857962059 in 2012 calculating 179.56% in 2012 compared to 2008 of 100%.

RATIO ANALYSIS

1. LIQUIDITY RATIOS a. Current Ratio Current Ratio =Current asset / Current Liabilities
Particulars Current assets Current liabilities Ratio 0.82 0.84 0.87 0.91 0.915 1,867,938,168 2,213,400,607 2,713,205,624 2,883,746,797 2,866,324,675 2008 1548360711 2009 1872988998 2010 2361371696 2011 2642936164 2012 2622824869

CURRENT RATIO
2011-12 2010-11 YEARS 2009-10 2008-09 2007-08 0.75 0.87 0.84 0.82 0.8 0.85 RATIO 0.9 0.95 0.915 0.91 Series3 Series2 Series1

INTERPRETATION: As we can interpret that the current ratio is increasing year by year it can be concluded that company is capable of meeting it long term goals. A standard current ratio is 2:1 which company does not stand to the task of being in the standard ratio. This simply indicates that the liquidity position of the company is weak.

b. Quick ratio :Quick ratio = Quick assets / Quick liabilities


Particular s Quick assets Quick liabilities Ratio 1,855,106,670. 18 0.343 637233989.95 772057921.1 9 2206298248. 06 0.340 766552010.8 9 2713205624. 26 0.282 809365890.6 3 2883746797. 82 0.280 747,903,541.5 4 2,866,324,675. 61 0.260 2008 2009 2010 2011 2012

QUICK RATIO
2011-12 YEARS 2010-11 2009-10 2008-09 2007-08 0 0.1 0.2 RATIO Series1

0.3

0.4

INTERPRETATION: It is analysed above that Quick ratio of the company is not so consistent to meet its short term debt obligations. Company during year 2008 had more compatibility of repaying debt obligations compared to 2012 which has considerabally decreased.

2. Profitability ratios a. Return on capital employed:Return on capital employed = Net profit / Capital employed * 100
Particular Net profit Capital employed Ratio 1,394,400,060 -2.35 1,851,048,771 1.61 2,818,030,616 1.76 2,947,639,268 0.09 299,163,738 0.209 2008 -3,2805,126 2009 29,965,011 2010 49,777,600 2011 22,782,300 2012 62,674,321

Return on capital employed


2 1.5 1

RATIOS

0.5 0 -0.5 -1 -1.5 -2 -2.5 2007-08 2008-09 2009-10 2010-11 Series1

2011-12

YEARS
INTERPRETATION: The jist of Return on capital employed ratio is to find out how optimally the long term funds provided by the creditors and shareholders has been utilized. Except in the year 2009 and 2010 factory has generated a good amount of revenue with a decent utilization of its capital. Wheras in 2008 there has been a huge loss.

b.. Gross profit margin:Gross Profit Ratio = Gross profit / Sales * 100
Particulars Gross profit Sales Ratios 2008 151,545,943 1,773,104,125 8.54 2009 327,550,059 2,302,348,871 14.22 2010 287,021,523 2,614,351,672 10.90 2011 285,624,205 3,009,539,076 9.49 2012 350,488,982 3,712,090,724 9.44

Gross profit margin


16 14 12 10 8 6 4 2 0 14.22 10.9 8.54 9.49 9.44

Ratio

2007-08 8.54

2008-09 14.22

2009-10 10.9

2010-11 9.49

2011-12 9.44

Series1

YEARS

INTERPRETATION: The Gross Profit ratio is showing continuously a mixed trend, starting from 2008 at 8.54, 14.22 in 2009 and 10.9 in 2010 then there has been decline trend for two years which shows that a company is loosing its productivity in maintaining its gross profit margin.

c. Net profit margin :Net profit margin = Net profit before interest and tax / Sales * 100
Particular s Netprofit beforeintere st& tax Sales Ratio 177,310,4 125 10.17 2,517,705, 736 8.05 2,834,951, 979 7.25 3,292,386, 846 1.51 3,712,090, 724 1.68 18046806 7 202776099 205631414 49749309 62674321 2008 2009 2010 2011 2012

Net profit margin


12 10 10.17 8.05 7.25

RATIO

8 6 4 2 0 2007-08

1.51 2008-09

1.68

2009-10

2010-11

2011-12

YEARS

INTERPRETATION: A high net margin ratio ensures adequate return to the owners as well as enable company to withstand adverse economic condition. The ratios calculated above indicate the net margin of company decreasing for last 4 years. In 2011 it has decreased by 5.74. It is because of increase in indirect expenses. And in the year 2011-12 again there is increment in the ratio by 0.17.

3.... ACTIVITY RATIO a. Fixed assets turnover ratioFixed assets Turnover = Sales / Net fixed assets
particul ars Sales 1,773,104,12 2,517,705,73 2,834,951,97 3,292,386,84 4,079,104,76 2008 2009 2010 2011 2012

5 Net fixed assets Ratio 1.35 1,307,442,55 2.62

6.37 1,374,289,49 2.60 1.83

9.91 2,842,889,41 8.56 0.99

6.22 2,873,790,55 7.56 1.14

3.74 2,956,998,80 2.61 1.38

2 1.8 1.6 1.4

Fixed assets turnover ratio

RATIO

1.2 1 0.8 0.6 0.4 0.2 0 2007-08 2008-09 2009-10

2010-11

2011-12

YEARS
INTERPRETATION: It measures the efficiency of utilisation of fixed assets of a firm. Interpretation is clear that the ratio is in the year 2009 is 1.83, 0.99 in 2010 indicating a decrease of 0.84 and in the year 2012 company has recovered to some extent. b. Current assets turnover ratioCurrent assets turnover ratio =Net sales / current assets Partic ulars 2008 2009 2010 2011 2012

Net sales Curre nt assets Ratio

177,310,4 125 1,548,360 ,711.4 1.14

2,517,705, 736.37 1,872,988, 998.12 1.342

2,834,951, 979.91 2,361,371, 696.39 1.200

3,292,386, 846.22 2,642,936, 164.11 1.245

4,079,104, 763.74 2,622,824, 869.72 1.555

Current assets turnover ratio


1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2007-08 2008-09 2009-10 YEARS 2010-11 2011-12

INTERPRETATION: It measures the efficiency of utilisation of current assets of a firm. And from the above chart we can say that for two years i.e 2009 & 2010 the ratios are declined as compared to other three years. c. Stock turnover ratioStock turnover ratio= sales/ Average inventory Particulars Sales 2008 1,773,104,12 5 2009 2,302,348 ,871
2010

RATIOS

2011 3,009,539, 076

2012 3,712,090,724

2,614,3 51,672

Average inventory Ratio

994,706,530 1.78

1,006,028 ,899 2.288

1,347,8 75,38 1.94

1,714,194, 979 1.76

1,770,815,438 2.096

Stock turnover ratio


2.5 2 RATIOS 1.5 1 0.5 0 2007-08 2008-09 2009-10 YEARS 2010-11 2011-12

INTERPRETATION: This ratio is used to measure how quickly a company is selling its inventory. This ratio tells how many times each year a firms inventory is turned over. The inventory turnover of the company over the period of five years has remained stable more or less.

CHAPTER 5

Findings, Suggestions & Recommendations and Conclusion.

Findings, Suggestions and Recommendations. Conclusion.

Findings:
Profit is the main motto of any undertakings. There is healthy trend analysis analysed during the conduct of this project. Net profit has increased fairly and consistently during these 5 years. The inventory has varied year to year. This is proportional to the demand in the market for the products of that company. There is an increasing trend in the cash & bank balances. This is acceptable and shows the positive trend as the costs rises year to year. The increase in cash and bank is essential to meet the increased costs of overhead. The slope of the trend equation is also positive There is polite increase in the current assets and fixed assets every year in the 5 years of the project undertaken indicating that the slope of the trend is positive analysis for the factories future. The liability named other banks over draft payables have been fully cleared during 2010 which shows factory is processing and running smoothly and flawlessly. During the year 2008 the companys financial statements showed a loss of nearly 3.28 crore with heavy tax adding to the amount of loss and after the hiccup the stood tall and was dealing in heavy profits in the next 4 years till the date. Repair and maintenance expenses have been continuously increasing from 2008 to 2012 where management has to play an active role. Reserves and Surplus has been continuously increasing in a trend without any fall in all the 5 years. Total capital and amount of income statements, assets and liabilities are also increasing year by year. Miscellaneous expenses have been the highlight in the year 2011 interpretation which has been considerably increased by 888.58% from 3334726 in 2010 to 32966491 in 2011. There has been slowly but effectively increase in the investments in the later half of these 5years of project study.

The life blood of a factory i.e., working capital loan which has increased nearly 2 folds from the beginning of 2008 till 2012 which is quite important and vital analysis. The additional working capital has been bought from outside as a Working capital loan.

A standard current ratio is 2:1 which company does not stand to the task of being in the standard ratio. This simply indicates that the liquidity position of the company is weak. Quick ratio of the company is not so consistent to meet its short term debt obligations Except in the year 2009 and 2010 factory has generated a good amount of revenue with a decent utilization of its capital. Wheras in 2008 there has been a huge loss. The Gross Profit ratio is showing continuously a mixed trend which shows that a company is loosing its productivity in maintaining its gross profit margin. The Net profit ratios calculated indicate the net margin of company decreasing for last 4 years. In 2011 it has decreased by 5.74. It is because of increase in indirect expenses. And in the year 2011-12 again there is increment in the ratio by 0.17. The inventory turnover of the company over the period of five years has remained stable more or less.

SUGGESTIONS AND RECOMMENDATIONS: To ensure higher profitability, liquidity and sound structural health of organization it is essential to use the sources of funds and cash effectively. The company should finance some parts of its currents assets with short-term funds. It should not depend on long-term funds as they involve higher interest payments. Generally an ideal company will try to maintain an average working capital policy rather too conservative or too aggressive. But the company highly followed conservative approach. It can be suggested that the company should develop an optimum working capital policy, in keeping in view of the availability of the funds for day-to-day operations to get more returns. The capital employed or investment should be properly utilised by the DKSSK to increase its return on investment and total assets. The company should try to set orders from other customers other than permanent Customers so that company could get economy of scale and reduce cost of Production to maximize its profit. Inventory should be perfectly managed so as to process of the factory should not be obstacled by scarce of raw materials needed at the time and place in the quantity needed. The investment in loans and advances should be minimized to possible extent. The company has to find out new source of funds for introducing new investment opportunities. The firm should take necessary steps immediately to improve long term solvency, short term liquidity position and rate of return on capital employed.

Quick liquid position of the firm is not up to the mark, the company has to concentrate on short term obligation to improve their liquidity position of the firm. The liquid liabilities surpasses liquid assets. Current ratio is fair below the standard ratio of 2:1 so company should initiate urgent steps to improve current ratio by reducing current liabilities. Assets turnover ratio is very weak indicating poor performance of assets which may be seriously viewed and necessary actions should be taken.

CONCLUSION: Understanding nancial statements is key to fundamental stock analysis and overall investment research. Financial statements provide an account of a companys past performance, a picture of its current nancial strength and a glimpse into the future potential of a rm. On the basis of analysis of financial statements of DKSSKN Chikodi we may conclude that overall working stability - soundness have improved over the years. The financial performance during the year ended 31st March, 2012 remain healthy with total income of Rs 359,531,974 against 256,382,775 in 2008 i.e., a significant increase of 40.23% over the period of just four years which is quite notable and appreciable. This growth was driven primarily by increase in sales. Sale of power by Co-generation unit, sale by distillery unit and the main product of DKSSKN through sale of tones together of sugar by sugar unit. Operating expenses has been managed optimally which is an highlight of my study undertaken operating expenses have never been out of hands as throughout all the 5 years it has hardly moved out of the charts, it was amounting 44,807,699 for the year 2008 and surprisingly with the decent amount of profit generated from it, expenses have never increased to a notable point as in 2012 statements showed operating expenses amounting 42,058,462 less than what was in 2008 decreasing by 6.14%. Its clear the management has played an active and participative role in its operations, operating expenses mainly consists of salary, wages and bonus. This data also reflects that employee have their job as well pay satisfaction during these years.

Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit, Chikodi this factory has been producing sweet in lifes of many people through its qualitative sugar for nearly 44 years established in 1969. In these times DKSSKN has stood tall in such a cut throat competition with several other factories surrounding it. As rightly said Customers are kings of markets the undertakings vision is concerned towards Total customers satisfaction which shows its intent towards society and its real assets that is human assets. With the analysis of DKSSKN financial statements lastly it can be concluded that factory has a great potential and capacity with all the needed resources. Factory has a bright future in coming times.

BIBLIOGRAPHY
Internet Url References:

http://www.investopedia.com http://www.investorwords.com http:// WWW.scribd.com http:// www.oecd.org http:// www.slideshare.com http://www.indiansugar.com/ (Indian sugar mills association.) http://www.agriculturesnetwork.org http://www.wikinvest.com/commodity/Sugar www.investopedia.com

Book References: 1. Financial Management by I.M. Pandey 2. Financial Management by M Y Khan and P K Jain 4. Annual Report of the company. 5. Financial Management by Dr.Ravindra Diwan.

Magazines: Magnum connect magazine Feb 2013 for industrial profile. Volume V Issue No. 54 February 2013