Sugar Factory Project

Shree.D.K.S.S.
K,CHIKODI by-Abhijeet A Gidagalle (9035051108)
JH INDUSTRY PROFILE
India has been known as the original home of sugar and sugarcane. Indian
mythology supports the above fact as it contains legends showing the origin of sugarcane.
India is the second largest producer of sugarcane next to Brazil. Presently, about 4
million hectares of land is under sugarcane with an average yield of 70 tones per hectare.
India is the largest single producer of sugar including traditional cane sugar sweeteners,
khandsari, and Gur equivalent to 26 million tones. India, the world’s second-largest sugar
producer and biggest consumer, had produced 1.84 million tonnes of the sweetener in the same
period last year.
Traditional sweeteners Gur & Khandsari are consumed mostly by the rural
population in India. In the early 1930’s nearly 2/3 rd of sugarcane production was utilized for
production of alternate sweeteners. Gur & khandsari. With better standard of living and higher
incomes, the sweetener demand has shifted to white sugar. Currently, about 1/3rd sugarcane
production is utilized by the Gur & khandsari sectors. Being in the small scale sector, these two
sectors are completely free from controls and taxes which are applicable to the sugar sector.
The advent of modern sugar processing industry in India began in 1930 with grant
of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in
the year 1930 -31 to 135 in the year 1935-36 and the production during the same period
increased from 1.20 lakhs tones to 9.34 lakhs tones under the dynamic leadership of the private
sector.
The era of planning for industrial development began in 1950-51 and Government lay
down; targets of sugar production and consumption, licensed and installed capacity, sugarcane
production during each of the Five Year Plan periods.
Under the policy of licensing, Government initially permitted small sized new
units of 1250 capacity only and later on increased the minimum economic size of plant to 2500
TCD. Similarly capacity expansions initially allowed up to 3500 TCD only were subsequently
raised to 1 TCD and finally these expansion limits were withdrawn in 1990.
REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 1

Shree.D.K.S.S.K,CHIKODI by-Abhijeet A Gidagalle (9035051108)
No of sugar factories in India
Sector No. of factories

(1) Co-operative 321
(2) Private 272
(3) Public 62
Total 655
(source -annual report 2010-11 (Ministry of Consumer Affairs,Food and Public Distribution))
Futures trading in sugar
Sugar was approved for futures trading in May, 2001. At present, three national
exchanges viz. National Commodity and Derivative Exchange Ltd. (NCDEX), Mumbai, Multi
Commodity Exchange Ltd., (MCX), Mumbai, National Multi Commodity Exchange (NMCE),
Ahmedabad and E sugar India Ltd., Mumbai & E-Commodities Ltd., Delhi have been given
recognition for future trading in sugar. Except, E-Commodities Ltd., Delhi, trading in sugar is
taking place in all other exchanges. Bulk of the futures trading in sugar takes place at NCDEX.
Production of Sugar
(in lakh tone)
Sugar Season Production of
Sugar
2006-2007 282.00
2007-2008 263.00
2008-2009 146.70
2009-2010 188.00
(source -annual report 2010-11 (Ministry of Consumer Affairs,Food and Public Distribution))

Production of Sugar
300
250
200
150
Production of Sugar
100
50
0
2006-2007 2007-2008 2008-2009 2009-2010
Sugarcane ,sugar, molasses production and recovery of sugar
Sugar Molasses
Sugarcane
Year (million tonnes) (million tonnes) ‘000 tonnes Recovery%
2001-02 298.422 18.528 8073 10.27

2002-03 281.575 20.145 8879 10.22
2003-04 233.862 13.546 5905 10.22
2004-05 281.172 19.267 8549 10.21
2005-06 281.173 19.267 8549 10.21
2006-07 355.52 28.367 13111 10.16
2007-08 340.557 26.357 11313 10.55
2008-09 285.029 14.539 6546 10.03
2009-10 277.75 18.912 8400 10.19
(Source-www.caneinfo.nic.in/)

In global sugar economy, the Indian sugar industry has achieved a number of milestones.
 Second Largest Area under Cane/Cane Production.
 Amongst the cost-effective industries with its field cost (Sugar cane) being the second
lowest, despite small land-holdings and low productivity
 Fourth efficient processor of sugar despite low capacity of its sugar plants as compared to
very large-size plants in other parts of the world.
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).

COMPANY PROFILE
SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE

NIYAMIT, CHIKODI is a co-operative society registered under Karnataka co-operative
society’s Act in 1969. The industrial license number of the factory is L-25/N-250/-LC dated
16/10/1970.
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 10Km 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 stand alone 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 Shri 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 lakhs.
The area of operation covered 111 villages of which 102 villages are from Chikodi
talukas, 5 villages are from Chikodi taluks, 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 co-operative institution (for Rs. 1990 lakh 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 set backs 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.

SHREE D.K.S.S.K.N.-CHIKODI,
Taluka – chikodi, dist.- Belgaum
Name of the Organization : Shree D.K.S.S.K.N.-Chikodi.
Location : Nanadi Village.
Tal.-Chikodi, Dist.- Belgaum
Karnataka.
Regd. Office : Chikodi.
Ph. No. – 08338-276931 To 35
Fax: 08338 – 276105
E-Mail – dksugar@sancharnet.com
Construction : Building Layout, Garden & Light
Facilities.
Capacity : 5500 tones crashing per day.(Tcd)
20.7 M. W. Power Generation.
30 K.L.P.D. Rectified Spirit.
Turnover : 500 to 600 Crores / Anum.
Work Shifts : 3 Shifts / 8 hours per shift (no Holiday)

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 co-operative society’s Act in 1969. The object of business is to encourage proper
devolvement of agricultural industrial amongst members on co-operative 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 member
Vision, mission and quality policy
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.
a) To encourage self-help, thrift and co-operate amongst members.

b) 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.
c) To manufacture sugar jogger and their by products out of sugar-cane grown and supplied
by members of the society and other and to sell the same to the best advantage.
d) To under take such other activities as are identical and conductive to the development of
the society etc.
e) 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 by products.

OWNERSHIP PATTERN
The authorized share capital of the Society shall be Rs.172,000,000 divided in to total
25,676 shares.
i) Rs.13,19,27,265 /-dividend in to 24,490 shares of the face value of Rs.4,000/-each

reserved for the grower members called as “A” Class.
ii) Rs.8,20,750 /-dividend in to 225 shares of the face value of Rs.4,000/-each

reserved for Co-operative Institutions. Called as “B” Class.
iii) Redeemable preference share of Rs.4,000/-each to be issued to Government of

Karnataka/Maharastra called as “C” Class.
iv) Rs.38,48,000/- dividend in to 984 shares of face value of Rs.4,000/-each reserved
for non grower members called as “D” Class.
INFRASTRUCTURAL FACILITIES
 Nearer to raw materials.

 Good transportation facilities.
 Nearer to rivers place. (Krishna River)
 Good networking.
 Proper accommodation for its employees.

ACHIVEMENTS AND AWARDS
ACHIEVEMENTS
 STAI, SISSTA & DSTA in their recent 8th annual convention at Hyderabad held on 13-
08-2005 have honored 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 Hon’ble Union Minister for agricultural, food & Civil
Supplies, in presence of Hon’ble Chief Minister of Andhra 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 Hon’ble 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 2001-02. 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:-
1. Highest sugar recovery in South India during 2001-02.

2. The “Best Administration Award” to the Managing Director with a cash prize of Rs
.10,000/- and a certificate.
3. The Best chief Chemist Award with Rs.5,000/- Cash prize and a Certificate.
4. Best chief engineer with award worth of Rs.5,000/- cash prize and certificate.


PRODUCT PROFILE
Sugar is regular product that we daily use but we know only one type of the sugar but
there are many types of the sugar are available in the market. Sugarcane in India is used to make
either sugar, khandsari or gur. However, sugar products produced worldwide are divided into
four basic categories : granulated, brown, liquid sugar and invert sugar.
1. Granulated Sugar
There are many different types of granulated sugar. Most of these are used only by food
processors and professional bakers and are not available in the supermarket. The types of
granulated sugars differ in crystal size. Each crystal size provides unique functional
characteristics that make the sugar appropriate for the food processor's special need.
2. Brown Sugars -
This sugar is a raw sugar which has been partially processed, removing some of the
surface molasses. It is a blond color with a mild brown sugar flavor and is often used in tea
3. Liquid Sugars
Liquid sugars were developed before today's methods of sugar processing made
transport and handling granulated sugars practical. There are several types of liquid sugar. Liquid
sucrose (sugar) is essentially liquid granulated sugar and can be used in products wherever
dissolved granulated sugar might be used. Amber liquid sucrose (sugar) is darker in color and
can be used where the cane sugar flavor is desirable and the non-sugars are not a problem in the
product.
4. Invert Sugar
Inversion or chemical breakdown of sucrose results in invert sugar, an equal mixture of

glucose and fructose. Available commercially only in liquid form, invert sugar is sweeter than
granulated sugar. One form of liquid invert was specially developed for the carbonated beverage

industry and can be used only in liquid products. This liquid sugar is actually part invert sugar
combined with part dissolved granulated sugar. Another type, named total invert sugar syrup, is
commercially processed and is almost completely invert sugar. It is used mainly in food products
to retard crystallization of sugar and retain moisture.
 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 the basis of price and quality and then the required
raw materials will be taken for the efficient vendors.
The transport of sugar cane from farmers to the factory will be engaged throng Lorries
which will be taken through bidding at the time of harvesting and also farmers themselves supply
by their own bullock carts or by tractors.
 CANE WEIGHMENT
There are 12 outlaying weigh bridges situated round about Chikodi for delivering the
sugarcane from the farmers. Double check has been provided over the weighment 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.
 BYPRODUCTS OF SUGAR CANE
The chief by products of sugar manufacturing are -
1) Bagasse
Bagasse is the by product of sugar left behind after crushing 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 output is routed to the distillers unit which is maintained by the organization.
3) Pressmud
Pressmud is the by product generated by cane juice filtration during sugar manufacture,
currently Pressmud is used as a fertilizer in sugarcane cultivation.
AREA OF OPERATION

The area of operation of the society shall be confined to the following villages of chikodi,
Athani, Raibag Talukas of Belgaum District and Jamakhandi Taluka of Bagalkot District of
Karnataka State and villages of shirol, kagal Talukas of Kolhapur District Maharastra State only.
COMPETITORS INFORMATION
There are other co-operative and the private sugar factories in the surrounding area are the
main competitors of the . SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE
KARKHANE NIYAMIT, CHIKODI
Among from that some are listed in the stock exchange they are
1. Shree Renuka Sugars
2. Ugar Sugar Works, Ugar
And other co-operative and private sugar industries are as
1. Hirankeshi sahakari sakkare karkhane niyamit ,Sankeswar

2. Halsidhanath sugar factory , Nipani
3. Shivashakti sugar ,Yadrav
4. Viswanath sugars , Belladbhagewadi.
5. Deshbakt Rantapanna kumbhar sakhar karkhana , Ichalkaranji (maharastra)
6. Datt sugars , Sirol (maharastra)
7. Shree guru data sugars (maharastra)
8. Jawahar sugars hupari (maharastra)
9. Venateswara power project Kolhapur (maharastra)
10. Sharad sugars, Narde (maharastra)

PRODUCTION PROCESS
The main raw 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 leveler 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-
77’o 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 105’oc 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 vaccum 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 PURGING 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 godowns for stocking.
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’- masscult’s. White purging low purity B- Heavy molasses obtained is used for
boiling C- masscult with C- grain as footing.
This C- massecuite 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

MC KINSEY 7 S MODEL
The first three element are strategy, structure and system are considered as hardware
of success, the meet four elements are style, staff, skills and shared values / super ordinate goals
are the software of any company.
1. Structure
The general admission of the company is carried out by the following departments and these are
downwards communication in the company. The information flows from the top level of
management to the lower levels.

2. System
System refers to how the production system, distribution, information system and security
system is maintained in its company.
a. Production System
The process of production consisting of input of sugar come and output of the
sugar
b. Distribution System
The distribution system of the precuts produced is in the following way:
 Direct sales are made with in the state and outside the state.
 Indirect sales are made outside the country and the depot sales are also made.
 The producers are also sold directly to the consumers or sold to the
wholesales.

c. Information System
Structure of information system
CHAIRMAN
MANAGING duDIRECTOR
SENIOR GENERAL MANAGER
HEAD OF THE DEPARTMENT
SECTION
d. Security System
The DKSSK has strict security system.
In the maintenance of accounts after the record have been closed, the records are kept in
the room and closed the room is opened only with permission of higher authority.
If the visitors went to inter they have to take prior permission with the authority and after
entering they are not suppose to go any dept other then the department from whom they took the
permission.

3. Strategy
The way in which a business aims to improve its position in relation to its competition is
embodies in its strategy or the way of doing something in an organization.
In DKSSK, introduce new technologies and products strategies importance in time with
national objective to improve quality reliability of products there by attaining the international
standards.
4. Skills
Skills here refer to how the training will be given to the employees and employees.
The training will be given in 2 months they are
a) On the job
This is one of the oldest method, under this method, the individual place is on the
regular job and taught the skill necessary to perform that job on the job training has the
advantage of giving first hand knowledge and experience under the actual working conditions.
This training is given to employees.
b) Off the job
In this methods trainee is separated from the job situations and his attention is
focused upon learning the material related to his future job performance. There is an opportunity
for freedom of expression for the trainees.
5. Style
The style which is portrayed to outside world is derived from the style and behaviors exhibits
inside organization. The internal style of the organization effects new staff feels thinks and does
their jobs. Therefore an organization is reflection of its structure.
a) Top down / Bottom up

At the time of policy framing, the style flows from top to bottom. If the policy has to be
framed then the policy has to be taken by upper level & it flows towards lower level.
But when the opinion of the policy is to known, at that time the style flows from bottom to
up. This is to know the attitudes of the employees about the policy which is framed by the upper
level.
b) Authoritarian / Participative
Only the upper level is having the authority to make the decisions in the factory.
 Regarding policy matter

Board of management will take the decision in case of policy making.
 Financial matter
If the financial matter is within the amount of Rs 20,000/-, Managing Director will take the
decision. And if financial matter is more than Rs 20,000/-, then the board will take the decision.

6. Staff
Good hard working citizen play essential role in the development of nation. The employees
are responsible for the success or failure of company.
The company has totally 696 workers are working in the company. They are divided as
follows
No. of Workers
1) Permanent worker 325
2) Seasonal workers 204
3) Consolidated worker 167
696
7. Shared values
Shared values are refers to company policies. In Mysore Sugar Company limited
the following policies are maintained.
 Quality policies
 Environment policies
 T.P.M. policies (Total productivity management)

 QUALITY POLICY
Quality leading to customer satisfaction shall be the top priority, this shall be
achieved by complying to the requirements of the quality management system and continuously
improve its effectiveness.
 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.

PROCEDURE FOLLOWED IN SALE OF SUGAR, MOLASSES, BAGASSE,

RECTIFIED SPIRIT AND ARRACK
 SUGAR
Domestic Sale of Sugar
The free sale released by Government of India is sold in the domestic market through
tender system. Sugar tenders will be called periodically from the various sugar traders. The
traders will be called advance about the grade and quantity being offered in tender over
telephone. The sugar tender are some time will be conducted at Karnataka Sugar Institute,
Belgaum and also at this factory site.
The rates will be collected over telephone from the various parties along with grade and
quantity of sugar required by them. The committee will take decision on allotment of sugar to the
parties who have offered higher price. Karkhana has maintained Sugar Sale Tender register for
recording the offers received and allotment made to the parties. The parties who have purchased
sugar in the tender will be sold against 100% payment. The rate of domestic price of sugar in the
state and the rate of neighboring sugar factories will be compared while selling the sugar in
tenders.
Export of sugar
When the international price of sugar is remunerative compared to domestic price of

sugar, we do export some of the stock of sugar. The sugar export is mainly undertaken through
the mercantile export or through EXIM Corporation New Delhi. The price for export sugar is
negotiated taking into account, the prevailing international sugar price and the price being
offered by various sugar factories for export of sugar. Once the rates are finalized, they will enter
into agreement with the party. Then the party will obtain a release orders from the Chief Director
of sugar, New Delhi and necessary excise bond from the concerned authority. After completing
all the necessary formalities Sugar will be delivered to the party for export against full payment
of the consignment.
After the export shipmen are completed, necessary documents in proof of export of
consignment will be collected from the parties. The same will be submitted to the excise
department.
 Molasses Bagasses
For sale of Molasses and Bagasses we use to make a vide publicity in the various
news papers in Karnataka and Maharashtra and also floating the enquiries to the prospective
purchasers in order to get competitive offers and better price realization.

SWOT ANALYSIS
STRENGTH:
1. Good Administration
2. Healthy management labor relations
3. Largest distribution
4. Superior product quality
5. Skilled and efficient staff and labor force
6. Effective cost control
7. Maximum profitability due to various by products
8. Well structured distribution channel.
9. Improved infrastructure.
10. Automated highly sophisticated machines.
WEAKNESS:
1. High cost of production

2. No control on minimizing the losses in process
3. Company can’t sell as much as sugar in the market at any specific time, as sugar release
mechanism is controlled by government of India.
4. Most of the employees feel that light is not enough to there work at night shifts.

OPPROTUNITIES:
1. Non-establishment of the programs to motivate and develop effective manpower.

2. Restricted market opportunities shirked a better price for finished products.
3. Borrowing of law cost funds.
4. Reducing the overhead expenditure.
5. To provide comfort and convince to employees for doing the work.
6. To facilitate the smooth running of the manufacturing process.
THREATS:
1. Due to uncertain rainfall procurement of raw material is being affected

2. High competition in procurement of raw material.
3. The main raw material sugarcane may not sufficiently be available in future.
4. Change in various government policies.

Part - b

Design of the study:
Statement of the problem:
Financial analysis being an integral part of overall corporate management and it is one
of the powerful tools of financial performance analysis. The analysis of financial statement of
SRSL is done in order to know the company’s financial position.
Objectives of the study:
The following are the main objectives of this study
 The main purpose of doing this project is to analysis the company’s financial statement
for the last 3 years
 To bring out the results of Financial Statement through analysis.
 To study about the d.k.s.s.k.niyamit. chikodi in general.
 To judge the financial position of the d.k.s.s.k.niyamit. Chikodi is satisfactory or not.
Scope of the study:
This study is exclusively conducted for d.k.s.s.k.niyamit. chikodi. It covers period 5 years
financial statement analysis. The trends indicated may differ from year to year as the pattern of
investments, borrowings etc change. This also covers study in general about the company and
industry. But comparison of financial indicator which the industry of beyond the scope of this
project.

Methodology:
This project is an analytical research where in the researcher has to use the available
facts as information and analyze these to make a critical evaluation of materials. This is also an
applied research with an aim to find a solution for immediate problems facing industry or the
firm.
The methodologies followed in the analysis of the financial statement of Ratio analysis.
Sources of data collection
1. Primary data: The data required for the project was collected through the discussion
with finance manager and various executives in the company.
2. Secondary data: The major source of data for this project was collected from annual
reports, profit and loss account, manuals & some more information collected
through the internet.

Plan of analysis
This study is conducted with the help of statistics figures & techniques like Graphs &
charts and interpretation
Comparative financial statement
Comparative financial statement is those statements which have been designed in

a way so as to provide time perspective to the consideration of various elements of financial
position embodied in such statements. In these statements, figures for two or more periods are
placed side by side to facilitate comparison.
But the income statement and balance sheet can be prepared in the form of
comparative financial statement.
Ratio analysis:
Ratio analysis is widely used tool of financial performance analysis. Ratio is the numerical or
quantitative relationship between two items or variables. The ratio analysis is the systematic
use of the ratios to interpret the hidden meanings lying in the financial statements. This reveals
the strengths and weakness of the comp any along with its performance and current financial
condition. The relationship in terms of ratios can be expressed as
Percentage e.g. net profit as percentage of sales
Fraction e.g. net profit is one-fourth of sales.
Proportions of numbers e.g. relationship between net profit and sales.
The ratio does not add to the existing information in the financial statements, but they do
not reveal the relation in more meaningful way so as to enable us to draw conclusions from
them. The rationale of ratio analysis lies in the fact that it makes related information

comparable. A single figures it yield significant inferences. Further comparison single ratio
should be done with the effect in revealing the true position of the company.
 This comparison can be done in the following ways:-

 Trend ratios.
 Inter-firm comparison.
 Comparison of items in the single year’s financial statements of the company.
 Comparison with standards or plans.
The significance of each ratio is described which is supported by the computation of the
ratios for the four financial years. The same is computed with previous year for the further
analysis of financial performance of DKSSKN.
Types of Ratios:
The ratios can classified in the following broad main groups
1. Liquidity ratios.
2. Turnover or activity ratio.
3. Profitability ratios.
4. Expenses ratios.
5. Capital structure or leverage ratios

1. Liquidity Ratios:
Liquidity of the company means its ability to meet its current and short term obligations
when they become due for payment. It reflects the short financial strengths and solvency of a
company. The short term creditors of the company are interested in the short solvency or
liquidity of the company. But, from the point of utilization of funds liquidity or excess of it may
end with the funds lying idle. Hence, a proper balance between the two contradictory
requirements i.e. liquidity and profitability is required for the efficient financial management.
en
The following are the some ratios, which give indication about the liquidity of the
company. These ratios are as follows:
 Current ratio.
 Quick ratio.
 Current Ratio:
The current ratio is the ratio of current assets to the current liabilities. It is calculated by
dividing current assets by current liabilities
Current Ratio = Current Asset/Current Liabilities
The current assets of the company represent such assets, which can by converted into cash
within sort time or period which is normally not exceeding one year and includes cash and bank
balances, marketable securities, inventory of raw material, work in process and finished goods,
net debtors, bills receivable. Similarly total of current liabilities includes sort term liabilities
namely trade debtors, bills payable, outstanding expenses etc.

The current ratio is measure of sort term solvency of the company. It indicates the
rupee of current asset available for each rupee of current liability. The higher thecurrent ratio
the larger the amount of rupees available per rupee of current liability and the greater the
safety of the sort term creditors. This margin of safety to the creditors is essential due to the
unevenness of the flow of the funds through current assets to the current liability account.
Current liabilities can be settled by making the payment whereas current available to liquidate
tem are subject to shrinkage for various reasons like obsolesces of inventory, bad debts,
unexpected losses and son on. Thus the current ratio represents the short term liquidity
“buffer”.
A high ratio indicates better liquidity position. But, it should be noted that very high current
ratio is the indicative of ineffective utilization of current assets due to high amount of fund
locked in high level of current, assets (i.e. generally a high amount of inventory). The norm for
this ratio is 2:1 which means even if 50% of the current assets are available for the liquidation;
it can meet the current liabilities. The high ratio is also possible when the long term sources of
funds are available for financing the part of the current assets. This avoids the embarrassing
situations where the sort obligations can be met due to temporary liquidity crunch.
This is due low reliance on sort-funds, a standard norm of the current ratio depends on the
type of the industry as this govern the level of current assets requirements (e.g. public utility
companies have low requirement of the current assets while the whole-sellers require high
level of current assets.
The limitation of the current ratio is that it gives only quantitative information rather than
qualitative information. This is due to fact that it does not consider the composition of the
current assets i.e. the partitions of the different current assets, since ability of the different
current assets to liquidate is different. Inventory treated as the most illiquid and then comes
the debtors and cash is the most liquid.

 QUICK RATIO:
Quick ratio establishes a relationship between quick, or liquid, assets and current
liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon
without a loss of value. Cash is the most liquid asset. Inventories are considered to be less
liquid. Inventories normally require some time for realizing into cash; their value also has a
tendency to fluctuate. The quick ratio is found out by dividing quick asset by current liabilities.
Quick ratio = Current assets—Inventories
Current liabilities
2. Turnover or Activity Ratios :
The Turnover Ratio or Activity ratios are concerned with measuring the efficiency in asset
management . Hence some times these ratios are also called as efficiency or asset utilization
ratios, these ratios reflect the management efficiency in utilization of the company’s assets vis
as vis its operations.
The speed and rapidity with which the assets are utilized to generate sales show the efficiency
with which assets are used. The greater the rate of turnover or equal. These ratios are the test
of relationship between sales (or cost of goods sold ) and various assets of company. Depending
on various types of assets there are various types of activities ratios.

* Inventory or stock turnover ratio:-
It is computed by dividing the cost of goods sold by the average inventory.
Inventory Turnover Ratio= cost of goods sold / average inventory
The cost of the goods sold can also be computed as net sales less gross profit.
The average inventory is computed as the simple average of the opening stock and closing
stock of the inventory. This ratio indicates number of times inventory is replaced during the
year. In case of seasonal industries, the average can be computed by taking simple average for
opening stock of a month for a year, which will smoothen out fluctuating in the inventory. In
some cases if the data is not easily available, then this ratio can be calculated by dividing the
net sales by closing inventory.
In general, a high inventory turnover ratio is better, as it shows the efficient

management of inventory. but, a very high inventory turnover ratio can be an indicative of
under investment in a very low level of inventory. A very low level of inventory serious
implications. It will adversely effect the production due to “out of stock” situation which in turn
effect the ability of a company to meet customer demand. Conversely a very low inventory
turnover ratio is also not good as this indicates excessive inventory or over investment. In
inventory due top this the funds are blocked in excessive inventory, which may impose serious
problem in working capital management.

The inventory turnover ratio can also be expressed in terms of days or months of cost of
goods sold.
Inventory Holding period = 365/ Inventory Turnover Ratio
 Asset Turnover Ratios:
This ratio is also known as the investment turnover ratio. This is based on the relation
between the cost of goods sold and assets of the company. The important ratios this are-
 Working Capital Turnover Ratio:

A firm may also like to reduce net current assets to net sales. It may compute working
turnover by dividing net sales by the net working capital
Working Capital Turnover Ratio = Net sales / Net working capital
Higher ratio indicates efficiency of using working capital to maximize the sales and vice-
versa. But too high ratio indicates shortage of working capital of firm.
The reciprocal of this ratio indicates that the availability of working capital on one
rupee of sales.

 Accounts Receivable (debtors)Turnover Ratio:

This ratio is computed by dividing the sales by debtors.
Debtors Turnover Ratio = Sales / Average Debtors
This ratio shows how quickly receivable or debtors are converted into cash .It is test of
liquidity of debtors of the company.
 Debtors collection period -

This ratio will be expressed in terms of days or months gives the average collection
period. It is calculated as follows-
Average collection period = 360 / Debtors Turnover Ratio
This gives time period after which the debtors are converted into cash on an average.
This is important from the point view of efficiency of collection. This average collection period
if compared with the credit period given to the customers of the company, will give a lot of
insight into receivables management of the company. Hence, in general a high turnover ratio of
debtors is or short collections period is preferable.
A very collection period would imply either poor credit selection or an inadequate
collection effort . The delay in the, collection of receivables affect liquidity position of the
company seriously and there is possibility of a large number of accounts receivables becoming
bad debts.

 Creditors Turnover Ratio:

This ratio is the ratio between purchases and creditors outstanding. The creditors
turnover ratio as follows-
Creditors turnover Ratio = Purchases / Average Creditors
A low ratio reflects liberal credit terms granted by the suppliers, while a high ratio
shows that accounts are settled rapidly. It is important ratio for analysis, as company can
reduce its requirement of working capital by relying on supplier’s credit.
 Accounts payable period ratio -

This ratio can be expressed as the accounts payable period in terms of days or months.
Account Payable Period = 360 / Creditors Turnover Ratio
This ratio shows the extent to which the trade creditor are willing to wait for payment.
The velocity of creditor (i.e. accounts payable period) on higher side reflects better negotiation
for the credit period. The velocity of creditors should be compared with the credit period
received from the suppliers. This should show the efficiency of the management in negotiation
for the credit terms.

3. Profitability Ratio:
The management of a company or the company itself is naturally interested to measure

operating efficiency. Also, the owners invest their funds in the company in the expectation of
reasonable return to its share holders depends on the profits earned by it. Profitability an
important measure of efficiency. It also indicates the acceptance of the public the product and
its effectiveness in the market. Also, the profits provide the money for the repayment of the
incurred to finance the project, expansion programme and other related activities. The
profitability ratios help in measuring the profitability of the company. Various types of such
ratios are explained below,
 Gross profit Margin:

Gross profit margin represents the relation between the profits and sales.
Gross Profit Margin = Gross Profit / Net Sales
Gross profit is the result of the relation between prices, sales value and cost. Any
changes in these well effect the gross profit. A high gross profit margin is the of good
management. As it implies that the cost of goods it self might have reduced.
 Operating Profit Margin:

This ratio measures the relationship between operating profit and sales.
Operating Profit Margin = Operating Profit / Net Sales

The operating profit means the profit before the interest and taxes and before considering
the effect of non trading transactions. ( This may also be considered as after interest and tax)
PAT/EBIT. This ratio indicative management ability to operate the business so that it should be
sufficient to take care of the cost borrowed funds and the margin of reasonable compensation
should be left for the owners.
 Net Profit Margin:

This ratio measures the relationship between and profit after tax and net sales
Net Profit Ratio = Net Profit / Net Sales
The profit tax is the total profit (i.e. including operating profit and non operating) after
interest and tax. This ratio indicates the percentage of the net sales left after paying the
interest and taxes. This includes the amount available for the apportionment to its owners for
providing their capital at risk.
The high net profit margin should ensure adequate return to the owners as well as
enable company to withstand adverse economic conditions and selling price declining, the cost
of production is rising and the demand product is falling.
This gives the return on total assets employed. But it throws no light on the profitability
of the different sources of funds, which finance the total assets.

 Return On investment:
It is the indicator of relationship between net profit and total assets (capital employed).
Return On investment= operating profit*100/ capital employed
This gives the return on total assets employed. But it throws no light on the profitability of the
different sources of funds, which finance the total assets.
4. Expenses Ratios:
It is computed by dividing sales. There are various expense ratios
 Material Cost Ratio = Material / Sales
 Manufacturing Expense Ratio = Manufacturing Expense / Sales
 Cost of Goods Sold Ratio = Cost of Goods / Sales
In case of lower ratio is favorable while higher one is unfavorable.

DATA ANALYSIS

Current Ratio
bajaj
DKSS Dhampur Ugar Bannari
year CA CL renuka hindusta
K Sugar Sugar amman
n
2007 1714896380 1472956367 1.16 0.69 1.72 0.63 0.88 1.9
2008 1537601227 1188967322 1.29 0.9 2.46 0.29 0.61 1.26
2009 1878279994 1547321323 1.21 1.15 2.55 1.31 0.62 1.29
2010 2353106528 1992183097 1.18 0.71 1.6 0.95 0.76 1.21
2011 2971601903 2060859016 1.44 .-- 1.78 0.82 0.72 0.93
Current Ratio
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2007 2008 2009 2010 2011
DKSSK renuka bajaj hindustan Ugar Sugar Bannariamman Sakthi Sugars

Interpretation and Analysis:
The above table and diagram shows that the current ratio in the year 2006-07 was 1.16
and then it decrease to 1.29, 1.21 and 1.18 in the respective years of 2007-08, 2008-09 and 2009-
10 and in the year 2010-11 it increased to 1.44
The normal current ratio is 2:1. The above table current ratio of the DKSSK is below the
standers so it is not satisfactory. If we compare DKKSSK current ratio with the other sugar
factory current ratio that is Renuka Sugars, Bajaj Hindustan Sugars, Dhampur Sugars, Ugar
sugars and Bannariamman sugars no one meet the required standard of the 2:1 except the Bajaj
Hindustan Sugars they had the ratio of 2.46 and 2.55 in the respective years of the 2007-08 and
2008-09 and they are having high ratio compare to all other sugar industries. And Ugar sugars is
having lowest ratio in the all other sugar industries

Quick Ratio:-
bajaj Banna
Dhampur Ugar Sakthi
year CA-INV CL ratio renuka hindusta riamm
Sugar Sugar Sugars
n an
2007 1683947537 1472956367 1.14 1.45 1.54 1.23 0.74 0.88 6.33
2008 1506139749 1188967322 1.27 1.15 1.71 0.58 0.71 1.28 4.13
2009 1828608882 1547321323 1.18 0.88 1.9 1.08 0.67 0.89 1.21
2010 2286427485 1992183097 1.15 0.42 0.85 0.49 0.48 0.68 1.29
2011 2921786705 2060859016 1.42 -- 1.35 0.33 0.38 0.95 0.79
QUICK RATIO
7
6
5
4
3
2
1
0
2007 2008 2009 2010 2011
DKSSK renuka bajaj hindustan Dhampur Sugar

Ugar Sugar Bannariamman Sakthi Sugars

Interpretation:
Generally quick ratio of 1:1 is considered to represent a satisfactory current financial

condition of the company. The quick ratios of the company for five years from 2006-07 to 2010-
11 are 1.14, 1.27, 1.18, 1.15 and 1.42 respectively. By observing five years ratios, the company
found to be sound liquidity position and it is in the increasing trend .
Shakti sugar is having the sound ratio till 2006-07 to 2009-10 that is 6.33, 4.13, 1.21,
1.29 and the ratio is decreased to 0.79 in year 2010-11 Ugar Sugar is the least ratio in all the five
years. In the year 2010-11 the DKSSK is the highest ratio to compare to all other sugar
industries.

Assets turnover ratio:-
Bajaj
sales assets DKSS Dhampu Ugar Bannar Sakthi
year renuka hindusta
r Sugar Sugar iamman Sugars
K n
2007 1536921221 3021536851 1.26 0.65 2.35 0.77 1.3 1.5

0.51
2008 1773104125 2872535544 2.26 0.58 0.76 1.93 1.05 1.19

0.62
2009 2302348871 3263814163 1.59 0.47 0.54 1.12 0.97 1.16

0.71
2010 2614351672 5221176169 3.06 0.44 0.74 1.15 0.85 1.08

0.50
2011 3009539076 5544108293 - 0.72 1.68 1.55 0.74 1.66

0.54
Assetsturn over ratio

6.00
5.00
4.00
3.00
2.00
1.00
0.00
2007 2008 2009 2010 2011


The above table and diagram shows the relationship between the fixed assets and sales.
The DKSSK sale is 0.54 times more than the fixed assets 2010-11. The highest ratio is in
year2008-09 is 0.71and lowest in the year 2009-10 is 0.50 The DKSSK is the least performer in
the asset turnover ratio compare to all other sugar industries .
Shree Renuka sugar is having a handsome ratio compare to all. It is having 3.06 ratio in
the year 2009-10 and the DKSSK is having the lowest ratio in all it is having below 1 ratio in all
the years.

Debtors turnover ratio
Bajaj
sales debtor Dhampur Ugar Bannari Sakthi
year Renuka
Sugar Sugar amman Sugars
DKSSK hindustan
2007 1536921221 272931005 5.63 17.24 19.88 20.09 5.76 11.6 18.63
2008 1773104125 370904282 4.78 40.26 23.21 11.83 15.17 8.58 16.63
2009 2302348871 274333895 8.39 29.22 45.24 10.44 12.65 9.29 44.63
2010 2614351672 484409546 5.40 26.23 29.97 11.19 14.68 15.46 31.44
2011 3009539076 384968153 7.82 -- 23.73 26.44 18.69 11.32 22.56
Debtor turn over ratio

50.00
40.00
30.00
20.00
10.00
0.00
2007 2008 2009 2010 2011
DKSSK Renuka bajaj hindustan Dhampur Sugar


This ratio indicates that how rapidly debts are collected. The DKSSK ratios
for Five years are 5.68, 4.78, 8.39, 5.4 and 7.82 respectively from the year 2006-07 to 2010-
11. The highest ratio was 8.39 in the year 2009.
The DKSSK is having lowest ratios compare to the other factories and the
Bajaj Hindustan sugars is having the high ratio in all factories compare to all five years. And
the Dhampur sugar is having highest ratio 26.44 in the year 2010-11
Fixed assets turnover ratio
bajaj Dhampur Ugar Bannari Sakthi

year DKSSK renuka
sales Fixed assets hindustan Sugar Sugar amman Sugars
2007 1381745102 1296300712 1.07 1.31 0.68 2.38 1.26 2.21 1.7
2008 1389667492 1307442552 1.06 2.26 0.58 0.76 1.93 1.05 1.12
2009 1539886058 1374289492 1.12 1.59 0.47 0.54 1.12 0.97 1.16
2010 2342992891 2842889418 0.82 3.06 0.44 0.74 1.15 0.85 1.08
2011 2650543076 2873790557 0.92 0.72 1.68 1.55 0.74 1.66

Fixed assets turnover ratio

3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2007 2008 2009 2010 2011

The above table and diagram shows the relationship between the fixed assets and sales.
The DKSSK’s sale is 1.07 times more than the fixed assets 2006-07 and 2007-08 it was 1.06
times. and It is highest during 2008-09 is 1.12 times and 2009-10 and 2010-11 it was 0.82 and
0.92 respectively.
Compare to all sugar industries the Dampur sugars and Shakti sugars are having the
more than 1 times of the ratio in all the five years and Bajaj hinduastan is the least performer in
the all sugar industries it is having 0.72 times and the highest ratio is of the Shree Renuka
sugars in the year 2010 the ratio is 3.06 times.

Gross Profit Ratio
Bajaj
sales DKSS Renuk Dhampur Ugar Bannari Sakthi

year
K a hindusta Sugar Sugar amman Sugars
gross profit
n
2007 133349814 1536921221 8.68 14.33 10.4 10.17 6.26 18.56 13.43
2008 151545943 1773104125 8.55 11.24 4.72 -8.66 7.51 6 3.88
2009 327550059 2302348871 14.23 14 10.59 10.25 9.88 19.93 12.86
2010 287021523 2614351672 10.98 10.28 7.22 13.91 -1.76 22.24 12.87
2011 285624205 3009539076 9.49 9.78 4.39 4.44 8.81 2.49
Gross Profit Ratio

25.00
20.00
15.00
10.00
5.00
0.00
-5.00 2007 2008 2009 2010 2011
-10.00
-15.00


INTERPRETETION:-
The above table and diagram shows the relation ship between the gross profit and net
sales in percentage. The high gross profit ratio to sales is sign of good management as it implies
that the cost of production is relatively high. The DKSSK ratios for five years i.e., from 2006-07
to 2010-11 are 8.64%, 8.55%, 14.23% 10.98% and 9.49% respectively.
In the year 2007-08 the Dhampur Sugar is had the negative ratio of the -8.66% it shows
the company is in loss and the highest ratio found in the year 2009-10 22.24% of the
Bannariamman sugars
Net profit ratio
bajaj Dhampur Ugar Sakthi

year DKSSK renuka Bannariamman
hindustan Sugar Sugar Sugars
2007 1.95 6.72 2.53 10.37 0.98 11.35 10.79
2008 -1.85 5.27 -2.52 -10.19 3.32 6.27 3.98
2009 1.30 6.41 9.06 0.52 3.54 16.73 -6.73
2010 1.90 7.43 1.7 5.88 -4.54 16.08 7.4
2011 0.76 0.24 0.37 0.67 6.46 -4.65

20.00
Net profit ratio
15.00
10.00
5.00
0.00
2007 2008 2009 2010 2011
-5.00
-10.00
-15.00
INTERPRETETION:-
This ratio is the overall measure of the firms ability to turn each rupee of sales into net
loss. The ratios of the DKSSK for three years are 1.95%, -1.85%, 1.30%, 1.9%and 0.76%
respectively. By analyzing the above ratios it clearly shows that, the company’s profitability is
not satisfactory. But among the five years ratios, it is found that in the year 2007-08 it was in net
loss of -1.85%.
Among all sugar industries the Dhampur sugar is incurred a loss of -10.19% in the year
2007-10 and in the overall performance of the five year the DKSSK is the least performer and the
Bannriamman sugars is the good performer compare to all

Working capital Turnover Ratio
Year sales net W C Ratio

2007 1536921221 241940013.2 6.352488788
2008 1773104125 348633904.9 5.085862563
2009 2302348871 330958671.1 6.956605377
2010 2614351672 360923430.7 7.243507762
2011 3009539076 910742887.5 3.304488146
working capital turnover ratio

8
7
6
5
4
3
2
1
0
2007 2008 2009 2010 2011
Interpretation:
This ratio establishes relation between sales and net working capital. The ratios for five years
are 6.35, 5.085, 6.96, 7.24 and 3.30times, respectively. The highest ratio was 7.24 times, which
was in the year 2009-10. It may be interpreted that the one rupee of net working capital, the
company has generated Sales of rupees 7.24 and it can be said that its net working capital
rotated in that year.

Debtors Collection Period
Year Debtors Turnover Ratio no of days ratio

2007 5.631171222 360 63.930
2008 4.780489768 360 75.306
2009 8.392506041 360 42.895
2010 5.396986277 360 66.704
2011 7.817631283 360 46.050
Debtors Collection Period

80
70
60
50
40
30
20
10
0
2007 2008 2009 2010 2011

Credit turnover ratio
year credit sales ratio

2007 555990726 1536921221 2.764
2008 471073459 1773104125 3.764
2009 567376638 2302348871 4.058
2010 692770803 2614351672 3.774
2011 701721051 3009539076 4.289
ratio
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2007 2008 2009 2010 2011
Interpretation:
This ratio reflects credit terms granter by the suppliers. A low ratio shows
that the liberal credit terms granted by the suppliers, while the high ratio shows that accounts are
being settled rapidly. The ratio for Five years is 2.76 times, 3.76 times, 4.05 times, 3.77 and
4.289 respectively. There was high ratio 4.289 times in the year 2011.

Account Payable Period
year no of days ratio days

2007 360 2.764292908 130
2008 360 3.76396524 96
2009 360 4.057884511 89
2010 360 3.773761337 95
2011 360 4.288796911 84
Accounts payable period

140
120
100
80
60 days
40
20
0
2007 2008 2009 2010 2011

Material procurement cost to sales
year cost sales Ratio

2007 824642844 1381745102 0.596812569
2008 678014200 1319054052 0.514015479
2009 1173972426 1475308158 0.795747261
2010 1818481560 2245656051 0.809777419
2011 1709192307 2544876887 0.671620822
Chart Title
3E+09
2.5E+09
2E+09
1.5E+09 Cost
Sales
1E+09
500000000
0
2007 2008 2009 2010 2011
Interpretation:
This ratio reflects the relation between the material procurement cost and the
sale . the both sugarcane procurement cost and the sale of the sugar is in increasing order in the
last five years in the year 2011 the DKSSk is a highest sale of Rs 2544879887/- and the highest
cost in the year 2010 is 1818481560/- and the lowest procurement cost and the sales we can find
in the year 2007-08 RS 678014200/- and 1319054052/- respectively

Sugar production cost to sugar sales ratio
year cost sales ratio

2007 1255533218 1381745102 0.908657622
2008 1040995085 1389667492 0.749096522
2009 1771196078 1539886058 1.150212426
2010 2542814454 2342992891 1.08528475
2011 2604089176 2650543076 0.982473818
ratio
1.4
1.2
0.8
0.6
0.4
0.2
0
2007 2008 2009 2010 2011
Interpretation:
The ratio indicates how much material cost incurred on one rupee of sales
the of sugar of five years ratios i.e. from 2006-07 to 2010-11 are 0.908, 0.7490, 1.15, 1.085,
0.9854 respectively.

particular As at As at As at As at As at
31.03.20 % 31.03.20 31.03.2 31.03.20 31.03.20
11 10 % 009 % 08 % 07 %
LIABILITIES -
Share Capital 1365.96 2.34 1354.3 2.45 1343.95 3.71 1336.6 4.10 1321.99 3.91
Reserves & Surpluses 25816.45 44.27 23165.91 41.88 8410.57 23.21 7579.03 23.23 6768.01 20.03
Term loan 2293.97 3.93 3660.09 6.62 4347.98 12.00 5028.35 15.41 4094.98 12.12
Working capital loan 13587.79 23.30 13022.02 23.54 9740.25 26.88 7178.54 22.00 9124.6 27.01
Bank O. D. payable 0 0.00 0 0.00 71.02 0.20 128.36 0.39 84.04 0.25
Statutory and other
deposits 8232.46 14.12 7182.32 12.99 6648.95 18.35 6661.74 20.42 6831.82 20.22
Suspense, sundries &
other 7017.21 12.03 6927.7 12.52 5673.76 15.66 4710.73 14.44 5559.9 16.46
Total Rs 58313.84 100 55312.34 100 36236.48 100 32623.35 100 33785.31 100
ASSETS -
Fixed assets 28737.9 49.28 28428.89 51.40 13742.89 37.93 13074.42 40.08 12963 38.37
Investments 273.81 0.47 169.15 0.31 165.35 0.46 167.32 0.51 26.1 0.08
Current assets 19026.66 32.63 16660.8 30.12 12288.03 33.91 10398.75 31.88 12424.75 36.78
Loans and advances 563.03 0.97 595.5 1.08 981.84 2.71 1014.4 3.11 485.58 1.44
Debtors 3849.68 6.60 4844.09 8.76 3709.04 10.24 2743.38 8.41 2729.31 8.08
Cash in hand 4.67 0.01 15.12 0.03 6.21 0.02 3.06 0.01 3.29 0.01
Cash at bank 2985.32 5.12 1498.19 2.71 1744.74 4.81 1324 4.06 1583.31 4.69
Other assets 0 0.00 0 0.00 0.00 0 0.00 0 0.00
Profit and loss
account 2872.77 4.93 3100.6 5.61 3598.38 9.93 3898.02 11.95 3569.97 10.57
Total Rs 58313.84 100 55312.34 100 36236.48 100 32623.35 100 33785.31 100

 The share capital of the company 4.10% highest in the year 2008 and lowest in the year
2011 2.34% .
 In the balance sheet the reserves and surplus is having the major share that is the 44.27%
in the year 2011 and it is increasing continuously from 20.03% In year 2007 to 44.27% in
the year 2011.
 the term loans are slightly decreasing from the 12.12% in the year 2007 to 3.93% in the
year 2011
 working capital is having second largest share in the liability side the highest is in the
year 2006-07 is 27.01% and lowest in the year 22% in the year 2008
 the DKKSK is also recorded the decreasing statutory and other deposits it decreased
from 20.2% to 14.12% from the year 2007 to 2011
 the suspense , sundries and other liabilities are also decreasing from 16.46% in2007 to
12.03 in 2011
 I the asset side the fixed assets are the major portion that is 49.28% in the year 2011 and
lowest in the year 38.37% 2007 it shows that the fixed assets are increasing continuously
 the current assets is fluctuating in between the percentage of the 30 to 36 in the year 2006
it was highest of 36.78% and the lowest is in the year 2010 is 30.12%
 the DKSSKs loans and advances are decreased from the 1.44% to 0.97% in the period of
2007 to 2011
 profit and loss account is also shown decreasing trend in the balance sheet it was
decreased from 10.57% in 2007 to now it is 4.93% in 2011

Findings:-
 The current ratio of all the sugar mill did not meet the standards except some time
they all are under performing and DKSSK is also among that and its is also having
below 1:2 standard
 The Quick ratio during the 5 year of the company DKSSK is very satisfactory with the
standard 1:1 and also compared to the other sugar industry
 In the assets turnover ratio and the debtor turnover ratio the DKSSK is the lowest
performer compare to all other six sugar factories.
 We can find the DKSSK is the moderate performer in the gross profit ratio compare
to all other and Bannariamman and Renuka sugars are the higher performer in the
gross profit ratio
 In the case of the net profit ratio and the fixed assets turnover ratio the DKSSk is not
satisfactory but It is the second least performer compare to all six factories Ugar
sugar works in net profit ratio and Bajaj Hindustan sugar in fixed asset turnover
ratio.
 The working capital turnover ratio of the company is 7.24 times is highest and
3.30times is the lowest this shows that the DKSSK is not having the satisfactory
working capital ratio.

 Material procurement cost of the DKSSk is more than 0.5 times of the sales it shows
that the company is spending more on the material procurement.
 Sugar production cost to sugar sales ratio is 0.9 and in the year 2009 and 2010 it is
more than the 1 times it shows the companies cost is more than the sales.
 In the common size balance sheet the reserves and surplus are near about 40% of
the liabilities it shows that the company had more reserves and surplus.
 In the asset side of the common size balance sheet we can see the fixed assets about
49% and current assets near 32%. It shows that the company is having more than
70% of its assets are fixed and current assets.

SUGGESTIONS
 The company has to increase the current ratio up to the standard limit for efficient
utilization of the current assets.
 Increase the Gross Profit ratio by reducing the cost of production.
 The DKSSK company has to increase sale to increase the asset turnover ratio.
 The DKSSK’s net profit is reduced in the year 2011 to Rs 22782300 from 2011 from
Rs 49777600 so company has to try increase the net profit.
 The cost of the sugar production of the company is high so the DKSSK must try to
reduce the cost of the production
 The sugarcane procurement cost is comparatively high so the DKSSK must try to
reduce the sugarcane procurement cost.
 The DKSSk is transferred its major funds to the reserves and surplus so the
companies liabilities is increased heavily so they must have to take care of the
reserve and surplus to reduce the company liabilities and increase profit.

Balance sheet of the DKSSK
ANNUAL REPORT 1-4-2006 to 31-3-2007
BALANCE SHEET AS AT 31-03-2007
particular schedule As at
31.03.2007
LIABILITIES -
Share Capital 1 1321.99
Reserves & Surpluses 2 6768.01
Term loan 3 4094.98
Working capital loan 4 9124.6
Bank O. D. payable 5 84.04
Statutory and other deposits 6 6831.82
Suspense, sundries & other 7 5559.9
Total Rs 33785.31
ASSETS -
Fixed assets 8 12963
Investments 9 26.1
Current assets 10 12424.75
Loans and advances 11 485.58
Debtors 12 2729.31
Cash in hand 13 3.29
Cash at bank 14 1583.31
Other assets 15 -
Profit and loss account 16 3569.97
Total Rs 33785.31

31.03.2008
LIABILITIES -
Term loan 3 5028.35
Total Rs 32623.35
ASSETS -
Fixed assets 8 13074.42
Investments 9 167.32
Debtors 12 2743.38
Cash at bank 14 1324
Other assets 15 -
Total Rs 32623.35

31.03.2009
LIABILITIES -
Term loan 3 4347.98
Total Rs 36236.48
ASSETS -
Debtors 12 3709.04
Other assets 15 -
Total Rs 36236.48

31.03.2010
LIABILITIES -
Term loan 3 3660.09
Bank O. D. payable 5 -
Total Rs 55312.34
ASSETS -
Debtors 12 4844.09
Other assets 15 -
Total Rs 55312.34

31.03.2010
LIABILITIES -
Term loan 3 3660.09
Bank O. D. payable 5 -
Total Rs 55312.34
ASSETS -
Debtors 12 4844.09
Other assets 15 -
Total Rs 55312.34

Sugar Factory Project

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Shree.D.K.S.S.

K,CHIKODI by-Abhijeet A Gidagalle (9035051108)

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 1

No of sugar factories in India

Sector No. of factories

Futures trading in sugar

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 2

Sugarcane ,sugar, molasses production and recovery of sugar

2001-02 298.422 18.528 8073 10.27

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 3

 Second Largest Area under Cane/Cane Production.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 4

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE

Shree D.K.S.S.K.N. Chikodi is a co-operative unit. It is a situated near Nandi village, at a

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 5

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 6

Taluka – chikodi, dist.- Belgaum

Name of the Organization : Shree D.K.S.S.K.N.-Chikodi.

Location : Nanadi Village.

Tal.-Chikodi, Dist.- Belgaum

Regd. Office : Chikodi.

Ph. No. – 08338-276931 To 35

Fax: 08338 – 276105

Construction : Building Layout, Garden & Light

Capacity : 5500 tones crashing per day.(Tcd)

20.7 M. W. Power Generation.

30 K.L.P.D. Rectified Spirit.

Turnover : 500 to 600 Crores / Anum.

Work Shifts : 3 Shifts / 8 hours per shift (no Holiday)

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 7

Vision, mission and quality policy

“Total customer satisfaction”

 Encourage agro-based co-operative industry.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 8

AIMS & OBJECTIVE OF THE COMPANY

The object of the society is to encourage proper development of Agricultural Industrial

a) To encourage self-help, thrift and co-operate amongst members.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 9

i) Rs.13,19,27,265 /-dividend in to 24,490 shares of the face value of Rs.4,000/-each

ii) Rs.8,20,750 /-dividend in to 225 shares of the face value of Rs.4,000/-each

iii) Redeemable preference share of Rs.4,000/-each to be issued to Government of

 Nearer to raw materials.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 10

ACHIVEMENTS AND AWARDS

 Energy Department of Government of Karnataka and KREDL have awarded us he

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 11

1. Highest sugar recovery in South India during 2001-02.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 12

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 13

Inversion or chemical breakdown of sucrose results in invert sugar, an equal mixture of

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 14

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 15

 BYPRODUCTS OF SUGAR CANE

The chief by products of sugar manufacturing are -

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 16

And other co-operative and private sugar industries are as

1. Hirankeshi sahakari sakkare karkhane niyamit ,Sankeswar

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 17

The main raw material in the production of sugar is.

STAGE: 1 SUGAR CANE SUPPLY.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE Page 18

STAGE: 2 MILLING OF CANE/ EXTRACTION OF JUICE.