Davangere Sugar

Davanagere sugar company

JGFGC Basavapattana

1.1 THEORETICAL BACKGROUND OF THE STUDY:

The art of making sugar was discovered in India around 4

Sugar is an important element in mans food and definitely widely used product. It

provides employment to n

based industry it is known to the second largest industry in the country, in spit

being one of the largest producer of sugar in the world the export ratio is the lowest

among sugar exporting countries, hardly 2% of the total production is exported .It

plays an major role in the economic development of rural areas in the state.

The industry revolution introduced the concept of mass production which

revolutions the manufacturing process and technology of production. The industry

revolution mechanized the production as processing unit the method of manufacturing

led for the birth of va

and process maintenance.

Sugar is a sweet white or brown usually crystalline substance obtained cheaply

from sugarcane or sugarcane beets and used commonly in food products

1.2 LITERATURE REVIE

William F. Slater (Finance Ratio Analysis):

This research paper will reveal the financial analysis techniques used to

evaluate the financial performance of sample Company, and evaluate the company’s

worthiness as an investment. The paper is divided i

sections the memo, which is the main body of the paper

Appendix, includes as a reference contains each of the sets of the four financial

statements that show Sample Company’s performance from 1999 to 2001.

section, Appendix B, contains the actual financial ratio analysis techniques, showing

the company’s performance.


CHAPTER - 1

Introduction

THEORETICAL BACKGROUND OF THE STUDY: -

The art of making sugar was discovered in India around 4


provides employment to nearly 5lakhs of people directly. Sugar industry is an agro

based industry it is known to the second largest industry in the country, in spit




industry revolution introduced the concept of mass production which



led for the birth of various concepts like process engineering, process management

and process maintenance.


from sugarcane or sugarcane beets and used commonly in food products

LITERATURE REVIE W:-

(Finance Ratio Analysis):



worthiness as an investment. The paper is divided into three sections. The first

sections the memo, which is the main body of the paper. The second section.

, includes as a reference contains each of the sets of the four financial

statements that show Sample Company’s performance from 1999 to 2001.


the company’s performance.

The art of making sugar was discovered in India around 4th century.


lakhs of people directly. Sugar industry is an agro

based industry it is known to the second largest industry in the country, in spite of




industry revolution introduced the concept of mass production which



rious concepts like process engineering, process management


from sugarcane or sugarcane beets and used commonly in food products.



nto three sections. The first

. The second section.

, includes as a reference contains each of the sets of the four financial

statements that show Sample Company’s performance from 1999 to 2001. The third



JGFGC Basavapattana

Rune Stenbacka and Mihkel Jombak:

Both the authors developed a model of simultaneous investment and financing

decisions made by th

imperfections. They maximize their value by determining the capital structure

simultaneously with the magnitude of the investment program. Initially the authors

characterize theoretically how the optimal

will depend on the firms internal funds available for investments. Their theory

identifies conditions under which there would be complementarities between debt and

new equity. Subsequently the authors tested these

data for the year 1982

Telecommunications Corporation.

Kashiram Rana:

He describes that the new challenges and opportunities presented by the

rapidly changing global

by adopting a modernization program. An important factor inhibiting the technology

up gradation is the high cost of capital required for carrying out such a programme

1.3 STATEMENT OF THE

To evaluate the reasons leading to the declining

in Davangere Sugar Company Limited (DSCL)

1.4 OBJECTIVES OF THE STUDY:

For the progress of any research, objectives are must, without the objectives

the tasks cannot be completed. The main objecti

� To know the earning capacity of the Sugar company.

� To analyze the overall financial performance of the Sugar company.

� To judge the liquidity, solvency and profitability

� To examine the working capital position of the Sugar Company.

� To know the assets and liabilities of the company.

� To examine the fund flow position of the company.


Rune Stenbacka and Mihkel Jombak:


decisions made by the owners of firms in the presence of capital market



characterize theoretically how the optimal combination of debt and equity financing



new equity. Subsequently the authors tested these predictions empirically on financial

data for the year 1982 – 1992 on 3119 publicly traded manufacturing and

Telecommunications Corporation.


rapidly changing global environment the industry has to become globally competitive


up gradation is the high cost of capital required for carrying out such a programme

STATEMENT OF THE PROBLEM:-

To evaluate the reasons leading to the declining revenue from past three years

Davangere Sugar Company Limited (DSCL) in Davangere.

OBJECTIVES OF THE STUDY: -


the tasks cannot be completed. The main objectives of the study are as follows:

To know the earning capacity of the Sugar company.

To analyze the overall financial performance of the Sugar company.

To judge the liquidity, solvency and profitability position of the Sugar Company.

To examine the working capital position of the Sugar Company.

To know the assets and liabilities of the company.

To examine the fund flow position of the company.


e owners of firms in the presence of capital market



combination of debt and equity financing



predictions empirically on financial

1992 on 3119 publicly traded manufacturing and


environment the industry has to become globally competitive


up gradation is the high cost of capital required for carrying out such a programmed.

revenue from past three years


ves of the study are as follows:

To analyze the overall financial performance of the Sugar company.

position of the Sugar Company.


JGFGC Basavapattana

� To examine major findings and offer useful suggestions to impr

1.5 SCOPE OF THE STUDY

The study mainly conducted to

performance of Sugar

1.6 AREA OF THE STUDY:

The study has been made with reference to Sugar C

Davangere.

1.7 LIMITATIONS OF THE STUDY:

� The study is based on secondary data such as published annual reports.

� During the study some important and confidential matters are not disclosed by the

respective authorities.

� Due to the changes in the price leve

cannot give correct conclusion.

� There is absence of standard ratio, so comparing of the ratio is misleading.

� As the study period is only for 3 years, so the collected and analyzed belongs to only

those years

1.8 DATA COLLECTION :-

METHODOLOGY USED FOR THE STUDY:

The methodology occupies important place for studying any problems. The

required data may be collected in two ways. They are

a) Primary Data

b) Secondary Data

a) Primary Data: The data which is obtained for the first time for the statistical

investigation collected in a specified way are known as a primary data.

b) Secondary data: If the data already has been collected by some person or institution

and they made available for sta


To examine major findings and offer useful suggestions to improve the performance.

SCOPE OF THE STUDY:-

The study mainly conducted to attempt has been made for analyzing the

performance of Sugar Company.

AREA OF THE STUDY: -

The study has been made with reference to Sugar C

.7 LIMITATIONS OF THE STUDY: -

The study is based on secondary data such as published annual reports.

During the study some important and confidential matters are not disclosed by the

Due to the changes in the price level of various year comparison of ratio of such years

cannot give correct conclusion.

There is absence of standard ratio, so comparing of the ratio is misleading.

As the study period is only for 3 years, so the collected and analyzed belongs to only

-

METHODOLOGY USED FOR THE STUDY:


required data may be collected in two ways. They are

The data which is obtained for the first time for the statistical


If the data already has been collected by some person or institution

and they made available for statistical investigation is known as the secondary data.

ove the performance.

attempt has been made for analyzing the financial

The study has been made with reference to Sugar Company limited,

The study is based on secondary data such as published annual reports.

During the study some important and confidential matters are not disclosed by the

l of various year comparison of ratio of such years

There is absence of standard ratio, so comparing of the ratio is misleading.

As the study period is only for 3 years, so the collected and analyzed belongs to only


The data which is obtained for the first time for the statistical


If the data already has been collected by some person or institution

tistical investigation is known as the secondary data.


JGFGC Basavapattana

SOURCES OF DATA:-

SOURCES OF DATA

SECONDARY DATA

PRIMARY DATA


SECONDARY DATA

JOURNALS

ANNUAL REPORTS

TEXT BOOK

PERSONAL INTERVIEWWITH

STAFF MEMBERS

PERSONAL OBSERVATIONS

PRIMARY DATA

JOURNALS

ANNUAL REPORTS

TEXT BOOK

PERSONAL INTERVIEWWITH

STAFF MEMBERS

PERSONAL OBSERVATIONS


JGFGC Basavapattana

It is thought that it cane sugar was first used by man in Polynesia from where

it spread to India. In 510 BC the emperor Darius of what then Persia invaded India

where he found “the reed which gives honey

as with many other of man’s discoveries, was kept a closely guarded secret whilst the

finished product was exported for a rich profit.

It was the major expansion of the Arab peoples in the seventh century AD that

led to a breaking of the secret. When they invaded Persia in 642 AD they found sugar

cane being grown and learn how sugar was made. As their expansion continued they

established sugar production in other lands that they conquered including North

Africa and Spain.

2.1 THE INDIAN SUGAR INDUSTRY

India is the largest consumer and second largest producer of sugar in the

world. The Indian sugar industry is the second largest agro

rural India. It is the second largest agro

textiles. With 566 operating sugar mills in different parts of the country, Indian sugar

industry has been a focal point for socio

About 65 million sugarcane farmers and a large number

involved in sugarcane cultivation and ancillary activities, constituting 7.5% of the

rural population. Besides, the industry provides employment to about 2 million

skilled/semi skilled workers and others mostly from the rural

India is the only country in the world that produces plantation white sugar. All other

countries are producing either raw sugar or refined sugar or both. Thus the processing

capacities are quite different and so also is the quality of sugar.

Sugar production commenced in 1920's but it got industry status in late

20's/early 30's when India had 29 sugar mills producing just 100,000 tons of sugar.

The industry facing competition from imported sugar sought tariff protection. Sugar

production picked up under the Sugar Industry Protection Act passed in 1932 and

country became self Sufficient in 1935. Also cane


CHAPTER - 2

INDUSTRIAL PROFILE



where he found “the reed which gives honey without bees”. The secret of cane sugar,


finished product was exported for a rich profit.


ed to a breaking of the secret. When they invaded Persia in 642 AD they found sugar



THE INDIAN SUGAR INDUSTRY


world. The Indian sugar industry is the second largest agro-industry located in the

rural India. It is the second largest agro-processing industry in the country after cotton


industry has been a focal point for socio-economic development in the rural areas.

About 65 million sugarcane farmers and a large number of agricultural laborers are



skilled/semi skilled workers and others mostly from the rural areas.



capacities are quite different and so also is the quality of sugar.




d up under the Sugar Industry Protection Act passed in 1932 and

country became self Sufficient in 1935. Also cane-pricing act was enforced to provide



without bees”. The secret of cane sugar,



ed to a breaking of the secret. When they invaded Persia in 642 AD they found sugar




industry located in the

ry in the country after cotton


economic development in the rural areas.

of agricultural laborers are



areas.






d up under the Sugar Industry Protection Act passed in 1932 and

pricing act was enforced to provide


JGFGC Basavapattana

good cane price to farmer. This was followed by land reforms putting ceiling on land

holdings to protect small farmers, formation of cane grower co

up of sugar mills jointly with farmers called as co

sharing basis. Today this sector produces 60% of country's production.

The industry not only generates pow

power for export to the grid based on by

alcohol, which is used for industrial and potable uses, and can also be used to

manufacture Ethanol, an ecology friendly and renewable

The sugar industry in the country uses only sugarcane as input; hence sugar

companies have been established in large sugarcane growing states like Uttar Pradesh,

Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Prade

(SY) 2006-2007, sugar production in the country is provisionally estimated at 283.28

lakh tones which were 194.94 lakh tones in the year 2005

sugar was 271 lakh tones during the year 2006

08) the production is 265 lakh tones.

The center’s original sugar production estimate of 220 lakh tones for 2008

09.The Government de

the restrictions on expansion of existing capacity

units, with the only stipulation that a minimum distance of 15 kms would continue to

be observed between an existing sugar mill and a new mill. There are 566 installed

sugar mills in the country with a production capacit

which only 453 are working. These mills are located in 18states of the country.

Around 315 of the total installed mills are in the co

private sector and 62 in the public sector.



mall farmers, formation of cane grower co-operatives and setting

up of sugar mills jointly with farmers called as co-operative mills on ownership and


The industry not only generates power for its own requirement but surplus

power for export to the grid based on by-product - Bagasse. It also produces ethyl


manufacture Ethanol, an ecology friendly and renewable fuel for blending with petrol.



Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh. . In Sugar Year

2007, sugar production in the country is provisionally estimated at 283.28

lakh tones which were 194.94 lakh tones in the year 2005-2006. The production of

sugar was 271 lakh tones during the year 2006-07. During the current s

08) the production is 265 lakh tones.

The center’s original sugar production estimate of 220 lakh tones for 2008

The Government de-licensed the sugar sector in August 1998, thereby removing

the restrictions on expansion of existing capacity as well as on establishment of new



sugar mills in the country with a production capacity of 180 lakh MTs of sugar, of


Around 315 of the total installed mills are in the co-operative sector, 189 in the

private sector and 62 in the public sector.


operatives and setting

operative mills on ownership and


er for its own requirement but surplus

Bagasse. It also produces ethyl


fuel for blending with petrol.



sh. . In Sugar Year

2007, sugar production in the country is provisionally estimated at 283.28

2006. The production of

07. During the current season (2007-

The center’s original sugar production estimate of 220 lakh tones for 2008-

licensed the sugar sector in August 1998, thereby removing

as well as on establishment of new



y of 180 lakh MTs of sugar, of


operative sector, 189 in the


JGFGC Basavapattana

2.2 STRUCTURE OF PRODUCTION DEPARTMENT

D.G.M.

MECHANICAL

CHIEF ENGINEER

DEPUTY CHIEF

ENGINEER

SENIOR

ENGINEER

ASST.SHIFT

ENGINEER

FOREMAN

OPERATOR

HELPER


STRUCTURE OF PRODUCTION DEPARTMENT :

CHIEF CHEMIST ELECTRICAL

ENGINEER

SHIFT CHEMIST SUPERVISOR

LAB CHEMIST ELECTRICIAN

OPERATOR HELPER

HELPER

GENERAL

MANAGER

INSTUMENTATION

MANAGER

HELPER

TECHNICIAN


JGFGC Basavapattana

2.3 MARKET PLAYERS

� The Mysore sugar company ltd. (MYSORE)

� The Godavari sugar mills ltd. (GODAVARI)

� Gangavathi sugars ltd.(GANGAVATHI)

� Bannari Amman sugars ltd.

� Sri Renuka sugars ltd.

� Sri Prabhulingeshwara sugars

� Shamanur Sugars ltd.(DUGGATHI)

� Sirguppa Sugars and chemicals.(SIRGUPP)

2.4 CURRENT POSTION OF SUGAR INDUSTRY /SCENARIO IN INDI A

However the likely sustenance of firm global prices would permit export of

around 20 lakhs MT of sugar P.A for the next two sugar seasons. There by easing the

pressure on domestic stocks. Sugar year 2007

period October to September.

INTERNATIONAL

Sugar prices likely to remain firm over the medium term for most of the late

1990s and clearly 2000s sugar prices in the international market remained in the range

of US$ 200-250MT but 2004 prices have firmed up and are curr

450 MT.

KEY SUCCEESS FACTORS

1. Cane development activities

2. Level of integration

3. Capital structure

4. Regulatory risks


The Mysore sugar company ltd. (MYSORE)

The Godavari sugar mills ltd. (GODAVARI)

Gangavathi sugars ltd.(GANGAVATHI)

Bannari Amman sugars ltd.

geshwara sugars and chemicals ltd.

Shamanur Sugars ltd.(DUGGATHI)

Sirguppa Sugars and chemicals.(SIRGUPP)

CURRENT POSTION OF SUGAR INDUSTRY /SCENARIO IN INDI A



pressure on domestic stocks. Sugar year 2007-08 on words sugar year refers to the

to September.



250MT but 2004 prices have firmed up and are currently at around US$

KEY SUCCEESS FACTORS

Cane development activities

CURRENT POSTION OF SUGAR INDUSTRY /SCENARIO IN INDI A



08 on words sugar year refers to the



ently at around US$


JGFGC Basavapattana

2.5 PROBLEMS OF SUGAR INDUSTRY

1. Weak representative farmers’ institutions.

2. Poor & patronage based management system

3. Lack of accountability

4. Excessive deduction and taxation of farmer income

5. Delayed payment to farmers

6. Inefficiency in service provisions and payment

7. Poor accountability systems

8. Poor marketing and distribution policy

9. Negative effects of regional

2.6 Sugarcane Availability

Sugarcane is the main raw material for sugar production. Sugar can also be

produced by ‘sugar beet’. About 70% of world sugar is produced by sugarcane and

the remaining by sugar beet. Indian sugar factories’ pr

Sugarcane. Sugarcane is a yearly crop. There are varieties of sugar seeds available to

farmers which differ from their sugar content and time taken for growing. Sugarcane

is a genus of tropical grasses which requires strong sunlig

satisfactory growth. As growing of sugarcane requires abundant water the major areas

which grow sugarcane are having sufficient irrigation facilities.

Sugarcane occupies about 2.7% of the total cultivated area and it is one of th

most important cash crops in the country. In India, sugarcane is utilized by sugar mills

as well as by traditional sweeteners like gur and khandsari producers.

Indian sugar companies have sufficient sugarcane for production of sugar.

Strongly established companies, facilities of irrigation, less restrictions of government

on establishment and expansion, market opportunities, strong demand for by

Encouraging farmers to grow sugarcane. Today sugarcane is characterized as an

energy crop.

Brazil and India are the largest sugar producing countries followed by China,

USA, Thailand, Australia, Mexico, Pakistan, France and Germany. All these countries


PROBLEMS OF SUGAR INDUSTRY

Weak representative farmers’ institutions.

Poor & patronage based management system at all levels

Lack of accountability

Excessive deduction and taxation of farmer income

Delayed payment to farmers

Inefficiency in service provisions and payment

Poor accountability systems

Poor marketing and distribution policy

Negative effects of regional trading system



the remaining by sugar beet. Indian sugar factories’ production is based only on



is a genus of tropical grasses which requires strong sunlight and abundant water for


which grow sugarcane are having sufficient irrigation facilities.

Sugarcane occupies about 2.7% of the total cultivated area and it is one of th




companies, facilities of irrigation, less restrictions of government

on establishment and expansion, market opportunities, strong demand for by


d India are the largest sugar producing countries followed by China,




oduction is based only on



ht and abundant water for


Sugarcane occupies about 2.7% of the total cultivated area and it is one of the




companies, facilities of irrigation, less restrictions of government

on establishment and expansion, market opportunities, strong demand for by-products


d India are the largest sugar producing countries followed by China,



JGFGC Basavapattana

are producing more sugar than they internally consume. The supply of sugar in world

market is more than the actual demand.

The world’s largest consumers of sugar are India, China, Brazil, USA, Russia,

Mexico, Pakistan, Indonesia, Germany and Egypt. According to USDA Foreign

Agriculture Service, the consumption of sugar in Asian countries has increased at a

faster rate, as a direct result of increasing population, increasing per capita income

and increased availability of sugar.

2.7 HISTORICAL INDUSTRIAL DEVELOPMENT

India has been known as the original home of sugarcane and sugar. Indians

knew the art of making sugar since the fourth century. However the advent of modern

sugar industry in India dates back to mid 1930's when a few vacuum pan units were

established in the sub-tropical belts of Uttar Pradesh and Bihar.

Until the mid 50s, the sugar industry wa

of Uttar Pradesh and Bihar. After late fifties or early sixties the industry dispersed into

Southern India, Western India and other parts of Northern India.

India is the largest consumer and second largest producer of

world. The sufficient and well distributed monsoon rains, rapid population growth and

substantial increases in sugar production capacity have combined to make India the

largest consumer and second largest producer of sugar in the world.

The Indian sugar industry has not only achieved the singular distinction of

being one of the largest producer of white plantation crystal sugar in the world but has

also turned out to be a massive enterprise of gigantic dimensions. With over 450 sugar

factories located throughout the country, the sugar industry is amongst the largest

agro processing Industries, with an annual turnover of Rs150bn. It plays a major role

in rural development and its importance for India stretches far beyond the role of a

sweetener supplier.

The sugar factories located in various parts of the country work as nuclei for

development of rural areas by mobilizing rural resources and generating employment,

transport and communication facilities. Over 45mn farmers, their dependants and a

large mass of agricultural labor are involved in sugarcane cultivation, harvesting and



the actual demand.





and increased availability of sugar.

HISTORICAL INDUSTRIAL DEVELOPMENT


making sugar since the fourth century. However the advent of modern


tropical belts of Uttar Pradesh and Bihar.

Until the mid 50s, the sugar industry was almost wholly confined to the states


Southern India, Western India and other parts of Northern India.

India is the largest consumer and second largest producer of




ndian sugar industry has not only achieved the singular distinction of



located throughout the country, the sugar industry is amongst the largest

Industries, with an annual turnover of Rs150bn. It plays a major role





arge mass of agricultural labor are involved in sugarcane cultivation, harvesting and







making sugar since the fourth century. However the advent of modern


s almost wholly confined to the states






ndian sugar industry has not only achieved the singular distinction of



located throughout the country, the sugar industry is amongst the largest

Industries, with an annual turnover of Rs150bn. It plays a major role





arge mass of agricultural labor are involved in sugarcane cultivation, harvesting and


JGFGC Basavapattana

ancillary activities constituting 7.5% of the rural population. The sugar industry

employs over 0.5mn skilled and unskilled workmen, mostly from the rural areas.

2.8 GLOBAL SCENARIO (INTERNATIONAL TRADE OPPORTUNITY)

International trade is of strategic importance to India as it can help maintain

stability in the domestic market, despite the cyclicality in production. If there is a

sugar surplus either due to excess produc

attractiveness of cane for ethanol and cogen in the future, exports could be used if the

surplus cannot be managed in the domestic market. Acceptability as a credible

exporter will provide the Indian sector an alternate set

production. Similarly, in case of deficits, raw sugar imports could help bridge the

supply gap.

Globally, in most of the key geographies like Brazil and Thailand, regulations

have a significant influence on the sugar

landholdings and the need to influence domestic prices; all have been the drivers for

regulations. In India, too, sugar is highly regulated. Since 1993, the regulatory

environment has considerably eased, but su

commodity under the Essential Commodity Act. There are regulations across

entire value chain land demarcation, sugarcane price, sugarcane procurement, sugar

production and sale of sugar by mills in domestic and in

fundamental changes in the consumer profile and the demonstrated ability of the

sector to continuously ensure availability of sugar for domestic consumption has

diluted the need for sugar to be considered as an essential commo

recently conducted nationwide survey, nearly 75 percent of the total non

consumed by Industrial, small business and high income household segments.

Further, even for a low income household, 10 percent increase in sugar pr

result in less than 1 percent increase in the 3 monthly food expenses.




BAL SCENARIO (INTERNATIONAL TRADE OPPORTUNITY)



sugar surplus either due to excess production or due to greater economic



exporter will provide the Indian sector an alternate set of markets for diverting surplus



have a significant influence on the sugar sector. Perishable nature of cane, small farm



environment has considerably eased, but sugar still continues to be an essential

commodity under the Essential Commodity Act. There are regulations across


production and sale of sugar by mills in domestic and international markets. However,



diluted the need for sugar to be considered as an essential commodity. According to a

recently conducted nationwide survey, nearly 75 percent of the total non


Further, even for a low income household, 10 percent increase in sugar pr




BAL SCENARIO (INTERNATIONAL TRADE OPPORTUNITY)



tion or due to greater economic



of markets for diverting surplus



sector. Perishable nature of cane, small farm



gar still continues to be an essential

commodity under the Essential Commodity Act. There are regulations across the


ternational markets. However,



dity. According to a

recently conducted nationwide survey, nearly 75 percent of the total non-levy sugar is


Further, even for a low income household, 10 percent increase in sugar price would



JGFGC Basavapattana

2.9 INDIAN SUGAR INDUSTRY SCENARIO

In an era where there is a need for inclusive growth, the sugar industry is

amongst the few industries that have successfully contribute

has done so by commercially utilizing the rural resources to meet the large domestic

demand for sugar and by generating surplus energy to meet the increasing energy

needs of India. In addition to this, the industry has become the

industry. The sector supports over 50 million farmers and their families; and1 delivers

value addition at the farm side. In general, sugarcane price accounts for 2

approximately 70percent of the ex

standing in the global sugar space. The Indian Domestic sugar market is one of the

largest markets in the world, in volume terms. India is also the second largest sugar

producing geography. India remains a key growth driver for world sug

above the Asian and world consumption Growth average.

2.10 GOVERNMENT POLICY

Sugar is a controlled commodity in India. It is covered under the purview of

the Essential Commodities Act, 1955. The government controls sugar capacity

additions through industrial licensing, determines the price of the major input which

sugarcane, decides the quantity that can be sold in the open market, fixes the prices of

the levy quota sugar, etc.

Government control over all aspects of the production and sale o

extends to the level of wholesalers in the distribution chain. All sugar wholesalers

need to obtain a license issued by the government before they can begin to operate.

Also they should confirm to government notifications for the amount of inventor

they can maintain.

The government policies for the sugar industry are broadly classified in the

following section for the better understanding.

Licensing policies: Till recently sugar is used to be amongst the 9 industries under

licensing provision. The major criterion for issuing new licenses were as follows


INDIAN SUGAR INDUSTRY SCENARIO


amongst the few industries that have successfully contributed to the rural economy. It



needs of India. In addition to this, the industry has become the mainstay of the alcohol



approximately 70percent of the ex-mill sugar price. The sector also



producing geography. India remains a key growth driver for world sug

above the Asian and world consumption Growth average.

GOVERNMENT POLICY



through industrial licensing, determines the price of the major input which


the levy quota sugar, etc.

Government control over all aspects of the production and sale o



Also they should confirm to government notifications for the amount of inventor


following section for the better understanding.

: Till recently sugar is used to be amongst the 9 industries under

The major criterion for issuing new licenses were as follows


d to the rural economy. It



mainstay of the alcohol



mill sugar price. The sector also has a significant



producing geography. India remains a key growth driver for world sugar, growing



through industrial licensing, determines the price of the major input which


Government control over all aspects of the production and sale of sugar



Also they should confirm to government notifications for the amount of inventories


: Till recently sugar is used to be amongst the 9 industries under

The major criterion for issuing new licenses were as follows


JGFGC Basavapattana

New sugar factories should have minimum economic capacity of 2500 TCD with no

maximum limit on capacity. However in industrially backward areas, co

public sector new units are allowed

the Condition that the units would expand their capacities to 2500 TCD within a

period of 5 years of going into production.

New sugar factories are permitted subject to the minimum distance of 15

kilometers between the proposed new sugar factory and an existing / already licensed

sugar factory.

Other things being equal, preference in licensing is given to proposals from

the co-operative sector, public sector, private sector, etc. in that order.

The past policies have helped in planned development of sugar industry taking into

account economic size and availability of sugarcane and simultaneously avoiding

unhealthy competition. The mushrooming growth of co

performance is worsening of late, i

Further, a large number of parties have obtained licenses during 1990s but are not

implementing them due to several reasons, leading to a blocking of the entry of other

interested parties. To tackle this problem, the g

Letter of Intent (LoI) from three years to one year.

since August 1998 and any interested party/person is allowed to set up a sugar mill in

the country provided they satisfy few conditions.

minimum distance of 15 kilometers from an existing already licensed sugar factory.

No incentive will be provided and new units have to adhere to levy quota regulation

from first year of operations.

Pricing of sugarcane: Gove

supplied to the mills by farmers. The Statutory Minimum Price (SMP) announced by

GOI year on year is used as a benchmark by the state governments to fix their State

Advised Price (SAP). The SAP co

The above said pricing procedure has been adopted so as to protect the farmers &



maximum limit on capacity. However in industrially backward areas, co

public sector new units are allowed with an initial capacity of 1750 TCD subject to


period of 5 years of going into production.


between the proposed new sugar factory and an existing / already licensed


operative sector, public sector, private sector, etc. in that order.

icies have helped in planned development of sugar industry taking into


unhealthy competition. The mushrooming growth of co-operatives, whose

performance is worsening of late, is also an offshoot of these policies.



interested parties. To tackle this problem, the government has reduced validity of

Letter of Intent (LoI) from three years to one year. The sugar industry is un


the country provided they satisfy few conditions. The new sugar factory is at a



from first year of operations.

: Government of India regulates & controls the rates of sugarcane



Advised Price (SAP). The SAP could be a recovery linked average or just a flat rate.



maximum limit on capacity. However in industrially backward areas, co-operative &

with an initial capacity of 1750 TCD subject to



between the proposed new sugar factory and an existing / already licensed


operative sector, public sector, private sector, etc. in that order.

icies have helped in planned development of sugar industry taking into


operatives, whose

s also an offshoot of these policies.



overnment has reduced validity of

The sugar industry is unlicensed


new sugar factory is at a



rnment of India regulates & controls the rates of sugarcane



uld be a recovery linked average or just a flat rate.



JGFGC Basavapattana

ensure them a good price for cane. Also it reduces the impact of cane prices on the

cost structure of different mills dep

2.11 7 S FRAME WORK MODEL

The 7S framework for management analysis was developed by Mckensy’s and

company. 7S model provides an effective way analyzing an organization, in terms of

dynamic relationship among 7 key elements

system, staff, shared value.

Richard Pascal identified these factors in his book “The art Japanese

management” according to Pascal it was because of these factors the Japanese

companies excelled over American firm

that Mckinsey’s consultants in their studies of several firms have extensively tested it.

7S model is very good tool available to the mangers, to study the organizations. This

study is important from a strategic

competitive perspective. A major premise of the model is that many performances

related issues are rooted among the 7 factors outlines. The 7S are interconnected,

aligned and working together in high performing orga

The 7 S’s are

� Structure

� Skill

� Style

� Strategy

� System

� Staff

� Shared



cost structure of different mills depending on their location.

7 S FRAME WORK MODEL



dynamic relationship among 7 key elements namely- structure skill, style, strategy,

system, staff, shared value.



companies excelled over American firms. A very important feature of this modal is



study is important from a strategic, marketing, organizational behavior and



aligned and working together in high performing organizations.




structure skill, style, strategy,



s. A very important feature of this modal is



, marketing, organizational behavior and




JGFGC Basavapattana

2.12 SUGAR PRICING & DISTRUBITION

Government enforces a dual pricing policy for the sugar industry. Presently

10% of the production is sold at a fixed price to the government which is used for

PDS and other market operations.

from the levy quota for a period of five to eight years which makes the new sugar

units more profitable. But mills under levy are free to sell the remaining 90 % of

sugar (as 10% is supplied to government) in the open market at the market determined

price. The government controls supply of sugar in the open market through monthly

sugar release notifications based on market conditions and thus influencing the open

market prices to a great extent. Though, the incentive scheme has achieved the

objective of attracting more players, due to better margin than existing players, the

returns for older units reduces substantially due to low increase in levy prices for

controlling fiscal deficits. However new units face the problem of procuring

sugarcane from the farmers and

Import Export Policy

Act, 1958, which stipulates that the Government can use 20 per cent of the country’s

total production for sale abroad. Till a very recent past imports and exports were

routed through Indian Sugar a

(ISGIEC), a consortium of apex organizations of private and co

and government agencies. The imports and exports are mainly resorted to when there

is mismatch in domestic sugar prod

1997 allowing private parties to export sugar. The government has also put sugar

imports on Open General License (OGL) allowing private parties to import sugar. The

imported sugar has been subjected to a custom

to provide a level playing field to the domestic industry, which supplies sugar at lev

prices to GOI, for PDS supply.

Excise and taxes: Some of the state

purchases made by the sugar mills, which varies from state to state. The states of


SUGAR PRICING & DISTRUBITION :



PDS and other market operations. The new & expanded sugar plants are exempted

he levy quota for a period of five to eight years which makes the new sugar



overnment controls supply of sugar in the open market through monthly



g more players, due to better margin than existing players, the



sugarcane from the farmers and sometimes end up paying a premium to SAP.

Import Export Policy : Sugar exports were governed by the Sugar Export Promotion



routed through Indian Sugar and General Industry Export Import Corporation Limited

(ISGIEC), a consortium of apex organizations of private and co-operative sugar mills


is mismatch in domestic sugar production. The government decimalized exports in



imported sugar has been subjected to a customs duty of 20% from January 1999, so as

to provide a level playing field to the domestic industry, which supplies sugar at lev

prices to GOI, for PDS supply.

Some of the state governments impose purchase on

y the sugar mills, which varies from state to state. The states of



The new & expanded sugar plants are exempted

he levy quota for a period of five to eight years which makes the new sugar



overnment controls supply of sugar in the open market through monthly



g more players, due to better margin than existing players, the



sometimes end up paying a premium to SAP.

Sugar exports were governed by the Sugar Export Promotion



nd General Industry Export Import Corporation Limited

operative sugar mills


uction. The government decimalized exports in



s duty of 20% from January 1999, so as

to provide a level playing field to the domestic industry, which supplies sugar at levy

governments impose purchase on the sugarcane

y the sugar mills, which varies from state to state. The states of


JGFGC Basavapattana

Assam, Nagaland, Rajasthan, Orissa, West Bengal & Goa which produce small

quantities of cane, however, do not levy cuss on the sugarcane purchases.

2.13 SWOT ANALYSIS

Strength and weaknesses are essentially internal to the organization and

relate to the matter concerning resources, programs and organization in key areas such

as

� Sales

� Marketing

� Capacity

� Manufacturing cost etc

Opportunity and Threa

in the following areas

� Size & Segmentation

� Growth pattern and maturity

� International dimensions

� Relative attractive of segments

� New Technologies etc

Sr. Key Word

1 SKILLED LABOR

2 CAPACITY

3 INFRASTRUCTURE

4 FINANCE






Manufacturing cost etc

Opportunity and Threat are external to the organization and can exist or develop

Growth pattern and maturity

International dimensions

Relative attractive of segments

.

WEAKNESSES

Key Word Description

SKILLED LABOR Lack of skilled labor as the company

is situated in rural areas

CAPACITY The capacity of sugarcane crushing is

less compare to supply of sugarcane.

INFRASTRUCTURE The infrastructure is not is developed

FINANCE Lack of financial funds





t are external to the organization and can exist or develop

Lack of skilled labor as the company

is situated in rural areas

The capacity of sugarcane crushing is

less compare to supply of sugarcane.

The infrastructure is not is developed

Lack of financial funds


JGFGC Basavapattana

STRENGTHS

Sr. Keyword

1 AUTOMATIZED

2 COST

3 EXPERIENCE

4 BRAND

5 SPEED

THREATS

Sr.No Keyword

1 RECOVERY

2 GOVERNMENT

INTERVENTION

3 EXPORT


Keyword Description

AUTOMATIZED The production of sugar plant is fully

automatized

lowest cost producer

EXPERIENCE 36 years of experience

BRAND Brand name established

SPEED Faster decision making

Description

RECOVERY

The percentage recovery is

comparatively less than other areas

in the country.

GOVERNMENT

INTERVENTION

The price & quantity of supply of

sugar is fixed by Govt.

The competition is very high in

foreign market &

production is high than other

foreign companies. The global

price is not favorable.

The production of sugar plant is fully

36 years of experience

Brand name established

Faster decision making

The percentage recovery is

comparatively less than other areas

The price & quantity of supply of

sugar is fixed by Govt.

The competition is very high in

foreign market & the cost of

production is high than other

foreign companies. The global

price is not favorable.


JGFGC Basavapattana

2.14 PEST ANALYSIS:-

It is very important that an organization considers its environment before

beginning the marketing process. In fact, environmental analysis should be continuous

and feed all aspects of planning. The organization’s marketing environment is made

up of:

1. The internal environment e.g. staff (or internal customers), office technology, wages

and finance, etc.

2. The micro environment e.g. our external customers, agents and distributors, suppliers,

our competitors, etc.

3. The macro environment e.g.

and Technological Forces. These are known as PEST Factors

The political environment of sugar industry is not stable it keeps on changing

as per the government change because of the production cap

fluctuations as per the government changing pattern. The government polices affects

the industry because the policy is framed by government gives the guide line to the

OPPORTUNITIES

Sr. No Key Word

1 SUGARCANE

2 FREE MARKET

3 FOREIGN

MARKET

4 CENTRAL

GOVERNMENT





The internal environment e.g. staff (or internal customers), office technology, wages

The micro environment e.g. our external customers, agents and distributors, suppliers,

The macro environment e.g. political forces, Economic Forces, Socio

and Technological Forces. These are known as PEST Factors.


as per the government change because of the production capacity and the price



Key Word Description

SUGARCANE The supply of sugarcane is abundant.

FREE MARKET The ratio of free market is increased by

90%

FOREIGN

MARKET

The central Govt is encouraging for

foreign market.

CENTRAL

GOVERNMENT The central Govt is giving subsidy.




The internal environment e.g. staff (or internal customers), office technology, wages

The micro environment e.g. our external customers, agents and distributors, suppliers,

political forces, Economic Forces, Socio-cultural Forces,


acity and the price



The supply of sugarcane is abundant.

The ratio of free market is increased by

The central Govt is encouraging for

The central Govt is giving subsidy.


JGFGC Basavapattana

operation of the industry. The government has restricted the open sa

sale must be packed so that there will be less amount of wastage.

POLITICAL ANALYSIS

1) Pricing Regulation:

The price and supply of sugar to free market is fixed by the Government. Even

the price of sugarcane is fixed by the Government. So, there is more influence of

political environment in sugar industry.

2) Taxation:

The taxation policy of the government changes with time & this change effects

the industry to a larger extent. Any increase in the tax policy will decrease the profit

margins of the industry & vice

policy as there are more tax exemption & reduction in sugar industry.

3) Wage Legislation:

The government has taken several initiatives in the welfare of the workers.

The government has came with the acts of Minimum Wages Act, which regulates a

Political

Social


operation of the industry. The government has restricted the open sa

sale must be packed so that there will be less amount of wastage.

POLITICAL ANALYSIS :



ment in sugar industry.



margins of the industry & vice-versa. And sugar industry is enjoying the taxation




Political

PEST

Social

Technological

Economic

operation of the industry. The government has restricted the open sale of sugar. The





ry is enjoying the taxation




Technological

Economic


JGFGC Basavapattana

company to pay a certain fixed amount of wages to their workers. The government

also has introduced the Work Limit for the manufacturing companies.

4) Mandatory employee benefits

The government has made it mandatory for the companies to provide their

employees with certain benefits like Insurance, provident fund, allowances, etc. if any

company who doesn’t

5) Industrial safety regulations

It has been made mandatory for the industry to provide their employees with

the training to handle the equipments & must also provide some safety accessories

like eye gears, helmet, shoes, e

and if the sugar company has COGEN plant then the company has more safety policy

which has to be followed.

6) Environmental safety act

The viscose industry is viewed as the one of the polluting company. The

government has taken several measures to prevent the industry from polluting the

environment. Any industry not following the rules of this policy will be closed down

by government.

7) Export- Import policy

The government has made it very easy to export the s

countries. There excise duty is less &

to export more sugar.

Economic Analysis:

1. Type of economic:

The performance of an industry depends upon the market & economy in which

it performs. As sugar is a essential commodity which we use in our daily life.

2. Infrastructure quality

The infrastructure of the country affects the performance of the industry. As

India is lacking in infrastructure the industry is facing the problems like

transportation, warehousing, etc



e Work Limit for the manufacturing companies.

Mandatory employee benefits:



company who doesn’t follow it will be legally charged.

Industrial safety regulations:



like eye gears, helmet, shoes, etc. to ensure the safety of the employees & workers


which has to be followed.

Environmental safety act:




Import policy :

The government has made it very easy to export the s

countries. There excise duty is less & in fact Government is promoting the industries


sugar is a essential commodity which we use in our daily life.

Infrastructure quality :



, warehousing, etc


e Work Limit for the manufacturing companies.





tc. to ensure the safety of the employees & workers





The government has made it very easy to export the sugar to the other

Government is promoting the industries


sugar is a essential commodity which we use in our daily life.




JGFGC Basavapattana

3. Skill level of workforce

We find labor force abundant in India but the majority of the labors are not

skilled, their efficiency level is poor & must be trained especially for this type of

manufacturing activity

4. Labor cost:

The human resource is abundant in India & it is also cheap. This is one of the

factors which control the cost of the industry. But today we find that as the country is

developing this resource is also being expensive.

5. Economic growth rate

The current growth of the

development of these industries.

Porter’s Five Force Model

Michael Porter provided with a framework that explains how an industry gets

influenced by the five forces. The strategic business m

edge over rival firms can use this model to better understand the industry context in

which the firm operates


Skill level of workforce:



manufacturing activity.

resource is abundant in India & it is also cheap. This is one of the


developing this resource is also being expensive.

Economic growth rate:

The current growth of the country is 9% which is very encouraging for the

development of these industries.

Porter’s Five Force Model:


influenced by the five forces. The strategic business manager seeking to develop an


which the firm operates



resource is abundant in India & it is also cheap. This is one of the


country is 9% which is very encouraging for the


anager seeking to develop an



JGFGC Basavapattana

Bargaining Power of Suppliers

The price of raw

suppliers are farmers and the total of suppliers is very high. So, there is no such

bargaining power of suppliers in sugar industry.

Bargaining Power of Customers

The bargaining power of customers determines how much customers can impose

pressure on margins and volumes. But in sugar industry the price of sugar is fixed by

the Government. So, there is no bargaining power of customers in sugar industry.

Threat of New Entrants

The competition in an industry will not be so higher, as sugar is essential

commodity; but the Government is encouraging & taking more interest in developing


Bargaining Power of Suppliers

The price of raw-materials (sugarcane) is fixed by the Government. The

farmers and the total of suppliers is very high. So, there is no such

bargaining power of suppliers in sugar industry.

Bargaining Power of Customers




New Entrants



materials (sugarcane) is fixed by the Government. The

farmers and the total of suppliers is very high. So, there is no such







JGFGC Basavapattana

& increasing the number of Sugar Company. So it is easier for other companies to

enter this industry. In such a situation, new entrants could change major determinants

of the market environment (e.g. market shares, prices, customer loyalty) at any time.

There is always a latent pressure for reaction and adjustment for existing players in

this industry. The threat of new entries will depend on the extent to which there are

barriers to entry.

These are typically

� Economies of scale (minimum size requirements for profitable operations),

� High initial investments and fixed costs,

� Scarcity of important resources, e.g. qualified expert staff

� Access to raw materials is controlled by existing players,

� Distribution channels are controlled by existing players,

� Existing players have close customer relations, e.g. from long

� Legislation and government action

regulation of government.

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower

prices of better performance param

attract a significant proportion of market volume and hence reduce the potential sales

volume for existing players. This category also relates to complementary products.

Similarly to the threat of new entr

like

� Current trends- this is most important because the sugar industry do not have any

trend for consumption of sugar.

� The substitute’s products like gur

But there is no such impact of substitutes which create a threat to sugar

industry.

Competitive Rivalry between Existing Players



er this industry. In such a situation, new entrants could change major determinants




Economies of scale (minimum size requirements for profitable operations),

High initial investments and fixed costs,

important resources, e.g. qualified expert staff

Access to raw materials is controlled by existing players,

Distribution channels are controlled by existing players,

Existing players have close customer relations, e.g. from long-term service contracts,

islation and government action- the sugar industry is totally controlled by strict

regulation of government.

Threat of Substitutes


prices of better performance parameters for the same purpose. They could potentially



Similarly to the threat of new entrants, the treat of substitutes is determined by factors

this is most important because the sugar industry do not have any

trend for consumption of sugar.

The substitute’s products like guru & khandasri which are substitutes of sugar.


Competitive Rivalry between Existing Players


er this industry. In such a situation, new entrants could change major determinants




Economies of scale (minimum size requirements for profitable operations),

term service contracts,

the sugar industry is totally controlled by strict


eters for the same purpose. They could potentially



ants, the treat of substitutes is determined by factors

this is most important because the sugar industry do not have any

& khandasri which are substitutes of sugar.



JGFGC Basavapattana

This force describes the intensity of competition between existing players

(companies) in an industry... Competitio

when

� There are many players of about the same size

almost many are of same size, so there exist the competition between the existing

players.

� There is not much differenti

much price competition

different so the prices followed according to the size & quality ex: large size, medium

size or small size.

There is no much competition between competitors as sugar is controlled commodity

& the prices, the quantity of sugar supplied to market is fixed by the Government.

2.15 INDUSTRY COMPETITION

The international scenario of sugar is highly favorable for another 4to

This is an account of the following reasons.

• The W.T.O. has banned the dumping of D grade sugar to the world market.

• The petroleum industries are in need of ethanol for blending with the petrol hence the

sugar factories are diverting to ethanol m

• On amount of the above reasons the availability of the sugar in the international market

has been reduced substantially.

• Demand in more at international market, but supply is deficit hence the prince has

sugar an international leve

This trend is giving to be continued for another 4 to 5 years. As



(companies) in an industry... Competition between existing players is likely to be high

There are many players of about the same size- the sugar industry have many players


There is not much differentiation between players and their commodities, but there is

much price competition- the commodity sugar is similar but the quality of are


much competition between competitors as sugar is controlled commodity


INDUSTRY COMPETITION :-

The international scenario of sugar is highly favorable for another 4to

This is an account of the following reasons.

The W.T.O. has banned the dumping of D grade sugar to the world market.

The petroleum industries are in need of ethanol for blending with the petrol hence the

sugar factories are diverting to ethanol manufacturing gradually.

On amount of the above reasons the availability of the sugar in the international market

has been reduced substantially.

Demand in more at international market, but supply is deficit hence the prince has

sugar an international level is soaring up.

This trend is giving to be continued for another 4 to 5 years. As


n between existing players is likely to be high

the sugar industry have many players


ation between players and their commodities, but there is

the commodity sugar is similar but the quality of are


much competition between competitors as sugar is controlled commodity


The international scenario of sugar is highly favorable for another 4to 5 years.

The W.T.O. has banned the dumping of D grade sugar to the world market.

The petroleum industries are in need of ethanol for blending with the petrol hence the

On amount of the above reasons the availability of the sugar in the international market

Demand in more at international market, but supply is deficit hence the prince has


JGFGC Basavapattana

3.1 COMPANY INFORMTION:

DAVANGERE SUGAR COMPANY was started in 1970’s. The company is

situated in Kukkuwada near DAVANGERE. Firstly the

public limited, then in 1996 the company became private limited company i.e. the

administration and management of the company came under SHAMANUR GROUP

OF INDUSTRIES. Now the company is totally privatized and named as

DAVANGERE SUGAR COMPANY PRIVATE LIMITED.

HISTORY:

The proposal to set up a Sugar Factory at Kukkuwada took a concrete shape

with the development of vast irrigation facilities created by network of canals of

Bhadra Dam in the Taluk of Davangere, Channagiri, Honnali and Harihar and nearly

1, 20,000 hectares of the land brought under irrigation in 1970

Km from the present location of DAVANGERE SUGAR COMPANY PRIVATE

LIMITED, at Kukkuwada village

Factory with a crushing capacity of 1250

DAVANGER SUGAR COMPANY LIMITED, as a Joint Sector Government

Company in the year 1970 at the initiative of the local Farmers, Leaders of the above

Taluks with the active financial participation and guidance of Karnataka Agr

Industries Corporation and KSIIDC, who substantially contributed to the Equity

Funds of the company. The other financial institutions like IDBI, IFCI and ICICI also

participated in the Equity of the company to some extent.

3.2 MISSION AND VISION STATEME

VISION :

It is proud on the part of the company that about 20000 acres of land has been

brought under sugarcane cultivation for the ensuring season 2007


CHAPTER - 3

COMPANY PROFILE

COMPANY INFORMTION:


ukkuwada near DAVANGERE. Firstly the nature of the company was




UGAR COMPANY PRIVATE LIMITED.




s of the land brought under irrigation in 1970-80 within radius of 100


LIMITED, at Kukkuwada village to exploit this vast irrigation potential, a Sugar

Factory with a crushing capacity of 1250 TCD was established by the name



Taluks with the active financial participation and guidance of Karnataka Agr



participated in the Equity of the company to some extent.

MISSION AND VISION STATEME NT


brought under sugarcane cultivation for the ensuring season 2007


nature of the company was







80 within radius of 100


o exploit this vast irrigation potential, a Sugar

TCD was established by the name



Taluks with the active financial participation and guidance of Karnataka Agro




brought under sugarcane cultivation for the ensuring season 2007-08. The company


JGFGC Basavapattana

could able to achieve this on account of co

has a vision to bring at least 25,000 acres of land under sugarcane cultivation for the

season in the next coming years. This is with a view to crush at least 8.00,000 tones of

sugarcane to achieve the prosperity of the company

MISSION :

1. To provide guidance’s and early warnings to Cane and Sugar Industry including

Sugar-related Industries.

2. To support Cane and Sugar industry including Sugar

their competitiveness capacity and sustainable growth with balances.

3. To supervise sustainable growth of Cane and Sugar Industry.

4. To increase their sales.

5. To achieve the recovery level of 11% at the end of 2009

6. During 2009-2010 company has a target to crush a sugar cane of 280000 MT.

7. To increase quality of the product & fulfill the need

3.3 GENERAL OBJECTIVES:

OBJETIVES:

• To increase quality of sugar.

• To increase their sales.

• Increase the sales by conducting many programs like consumer information programs.

• To increase the members of the union

• To regularly supply there

3.4 PRODUCTS AND SERVICES MARKETING

In DSCL the major production is sugar. The company has to produce two

types of sugars. They are,

1. Brown sugar

2. Raw sugar.


could able to achieve this on account of co-operation of the farmers. The management



sugarcane to achieve the prosperity of the company

guidance’s and early warnings to Cane and Sugar Industry including

related Industries.

To support Cane and Sugar industry including Sugar-related Industries to develop


sustainable growth of Cane and Sugar Industry.

To increase their sales.

To achieve the recovery level of 11% at the end of 2009

2010 company has a target to crush a sugar cane of 280000 MT.

To increase quality of the product & fulfill the needs of the customer.

GENERAL OBJECTIVES: -

To increase quality of sugar.

To increase their sales.

Increase the sales by conducting many programs like consumer information programs.

To increase the members of the union

To regularly supply there product all the customers according to customer needs.

3.4 PRODUCTS AND SERVICES MARKETING


types of sugars. They are,

operation of the farmers. The management



guidance’s and early warnings to Cane and Sugar Industry including

related Industries to develop


2010 company has a target to crush a sugar cane of 280000 MT.

s of the customer.

Increase the sales by conducting many programs like consumer information programs.

product all the customers according to customer needs.



JGFGC Basavapattana

1. Brown sugar

In the form of dry,

of impurities) obtained from the evaporation of clarified sugar cane juices imported

for processing into refined sugar, this product is not sold to customers because it does

not meet Canadian stand

By products

The chief by products of sugar manufacturing are,

� Bagasse

� Molasses

� Press mud

� Bagasse

Bagasse is the byproduct left behind after crushing of sugar cane. It is used as

a fuel in the sugar boilers. Excess Bagasse

manufacture.

� Molasses

Molasses is a byproduct of sugar refining chiefly used for alcohol production

the entire molasses output is routed to the distillery unit and acetic acid plant.

� Press mud

Press mud is the byprodu

manufacture currently press mud is used as a fertilizer in sugarcane cultivation.

Distillery effluents are mixed with press mud that comes from sugar factory to make

bio fertilizers a substitute for chemi

Full exploitation of these potentials would besides significantly contributing to

the energy of the country and there by immensely benefiting sugar cane formers.

Hence central government shows keen interest in setting up many more sugar

it uplifts the rural masses and helps to generate eco

major product by the company is sugar. Apart from producing sugar the company also

produces liquor, acetic acid, arrack etc.


In the form of dry, brown sugar crystals (the colour being due to the presence



not meet Canadian standards for health and hygiene.

The chief by products of sugar manufacturing are,


a fuel in the sugar boilers. Excess Bagasse finds use as a raw material in paper



Press mud is the byproduct generated by cane juice filtration during sugar



bio fertilizers a substitute for chemical fertilizer.



Hence central government shows keen interest in setting up many more sugar

it uplifts the rural masses and helps to generate eco- friendly renewable energy.


produces liquor, acetic acid, arrack etc.

brown sugar crystals (the colour being due to the presence




finds use as a raw material in paper



ct generated by cane juice filtration during sugar





Hence central government shows keen interest in setting up many more sugar units as

friendly renewable energy. The



JGFGC Basavapattana

The DSCL area of interested/opera

Shivamoga. Chikamanglur and Bellary has brought considerable prosperity to the formers.

For the purpose of maintain the phase of economic growth the promoters have setup a plant

for manufacturing white sugar at Davanagere. The plant will also meet the demands from the

agricultural community for establishing a sugar factory in the

accordingly with the active support of the state gover

government to issue a license to setup the sugar factory at Davanagere.

white sugar to the other places and countries like Bangladesh and Sri

3.5 ORGANISATION STRUCTURE

FINANCE

PRODUCTION

&

MAINTENANCE


The DSCL area of interested/operation in the districts of Chitradurga, Davanagere,



ar at Davanagere. The plant will also meet the demands from the

agricultural community for establishing a sugar factory in the region.

active support of the state government KSIIDC and KAIC the central

e a license to setup the sugar factory at Davanagere.

white sugar to the other places and countries like Bangladesh and Srilanka.

ORGANISATION STRUCTURE :-

MANAGING

FINANCE

SALES

H.R.DEPT

VICE

CHAIRMAN

tion in the districts of Chitradurga, Davanagere,



ar at Davanagere. The plant will also meet the demands from the

region. The company as

KSIIDC and KAIC the central

The DSCL export

lanka.

CANE

DEVELOPMENT


JGFGC Basavapattana

3.6 DEPARTMENTAL STUDY:

3.6.1 FINANCE :-

The Financial Department is plays an important role as everything that

company does is revealed in this matter in the sense of financial statement and reports

of the company. And this is the department which constitute towards the shareholder

and the investors of the company so to maintain this department prior concentration

must be there and this must be prepared only by the accountants who have the

knowledge or by company secretary or by charted accountant appointed by the

company which must be reviewed

performance of the company and by keeping this department accurate and transparent

they can attract more investors or can get competitive advantage.

A business concern means a concern, which undertakes trading,

manufacturing activities of goods/services. The basic criteria for starting a business

unit are to make profit from that. There are so many trading activities in a financial

year. There for the company has to make the records of all these activities.

arises the used for book

Now a day every business

requirements of the law. Generally the companies are required to maintain mainly

two types of accounts.

1. Trading and P&L Account.

2. Balance sheet and even cash flow statement.

The same process is followed in DSCL as mentioned above.

NEEDS FOR ACCOUNTING SYSTEM

� To ascertain the profit and loss of the business.

� To ascertain the financial position of the business.

� To providing control over assets


DEPARTMENTAL STUDY: -




stors of the company so to maintain this department prior concentration



company which must be reviewed by the company auditor. This report shows the



A business concern means a concern, which undertakes trading,



year. There for the company has to make the records of all these activities.

arises the used for book-keeping.

Now a day every business has to keep books of accounts. It is the



Trading and P&L Account.

and even cash flow statement.

The same process is followed in DSCL as mentioned above.

NEEDS FOR ACCOUNTING SYSTEM:

To ascertain the profit and loss of the business.

To ascertain the financial position of the business.

To providing control over assets and properties of the company.




stors of the company so to maintain this department prior concentration



by the company auditor. This report shows the


A business concern means a concern, which undertakes trading, or



year. There for the company has to make the records of all these activities. So these

to keep books of accounts. It is the



JGFGC Basavapattana

� To providing information to tax authorities like, sales tax, income tax, control excise

etc.

� Assistance to management on

a) Decision-making

b) Forward planning and budgeting.

3.6.2 MARKETING:


To providing information to tax authorities like, sales tax, income tax, control excise

Assistance to management on

Forward planning and budgeting.

MARKETING: -

CHIEF SALES

OFFICER

CASHIER

GODOWN

MANAGER

GODOWN

KEEPER

ASSISTANTS

To providing information to tax authorities like, sales tax, income tax, control excise


JGFGC Basavapattana

INTRODUCTION :

DSCL has marketing cum sales department. Sugar is controlled

commodity & the price of the sugar & quantity of sugar that should be released in

market is fixed by the government. So, there is much influence of government on

sugar pricing & releasing.

In DSCL there are seven employees working in sales cum marketing

department.

3.6.3 CURRENT SCENARIO:

Every sugar industry has a dual policy that is Free & Levy.

a) Free market:

Free market means the company can

quantity of sugar that should be sold is fixed by the government. The government will

fix the quantity of sugar that should be sold on monthly basis.

b) Levy:

The government will fix the ratio of levy which means in

some percentage of sugar should be supplied to PDS( Public Distribution System) and

the percentage is fixed by the government.

a) The current ratio is 90:10, which means 90% of sugar can be sold in sugar market &

10% should be sold to gover

b) The current market price of sugar in international market is 229Dollars per metric ton

that is 900 per quintal.

c) The current market price of sugar in domestic market is Rs. 1180 per quintal.

As the international price is not favorable the company is

commodity in Indian market.

3.6.4 MARKET SEGMENTATION:

DSCL has 900 dealers across the country. The company has a market share of

0.37%. There are mainly 6states where DSCL is concentrating they are:

a) KARNATAKA

b) TAMIL NADU





icing & releasing.


CURRENT SCENARIO:

Every sugar industry has a dual policy that is Free & Levy.

Free market means the company can sell sugar directly to the market, but the


fix the quantity of sugar that should be sold on monthly basis.

The government will fix the ratio of levy which means in


the percentage is fixed by the government.

The current ratio is 90:10, which means 90% of sugar can be sold in sugar market &

10% should be sold to government.

The current market price of sugar in international market is 229Dollars per metric ton

that is 900 per quintal.

The current market price of sugar in domestic market is Rs. 1180 per quintal.

As the international price is not favorable the company is

commodity in Indian market.

MARKET SEGMENTATION:







sell sugar directly to the market, but the


The government will fix the ratio of levy which means in total production


The current ratio is 90:10, which means 90% of sugar can be sold in sugar market &

The current market price of sugar in international market is 229Dollars per metric ton

The current market price of sugar in domestic market is Rs. 1180 per quintal.

As the international price is not favorable the company is selling its




JGFGC Basavapattana

c) ANDRA PRADESH

d) WEST BENGAL

e) BIHAR

f) KERALA

3.6.5 HUMAN RESOURCES

INTRODUCTION :

The Human Resources Department is performing a vital role in the

organization. Human Resources Management is concerned with people dimensions in

management. As every organization is made up of people, acq

developing their skills, motivating them to higher levels of performance and ensuring

their commitment to the organization.HRM is the qualitative improvement of human

beings who are considered the most valuable assets of an organizat

Human Resources are given more importance, cared & always motivated towards

organization goal.


HUMAN RESOURCES -



management. As every organization is made up of people, acquiring their services,



beings who are considered the most valuable assets of an organizat


HR

Manager

Deputy HR

Manager

Officers

Assistants



uiring their services,



beings who are considered the most valuable assets of an organization. In DSCL also



JGFGC Basavapattana

3.6.6 PROCESS OF HR DEPT IN DSCL

The process followed in DSCL as follows

a) Acquisition of Human Resources

In DSCL acquisition process is

who are required by the organization, according to the hierarchy level in the

organization keeping in mind organizational objectives.

b) Development of Human Resources

In DSCL development process is concerned

employees, molding their behavior according to organization needs & changing their

skills, knowledge, aptitude,& values.

service which he renders for the organization & these q

improved to achieve organization goal.

c) Motivation of Human Resources

As DSCL is situated in rural areas where the motivational expenses( expenses

made on employees to motivate them) are low compare to urban areas.

For example: if you increase salary or if you give a gift/ incentive of Rs.250 to 500

the employee gets motivated. In case of workers if you give a incentive of Rs. 150 to

250 then he will be motivated. In DSCL most of the employees are self motivated are

they are working in the organization from past 15 to 25 years. Nearly 85% of

employees in DSCL are working from past 15 years.

d) Maintenance of Human Resources

The maintenance function is concerned with providing those working

conditions that employees believe are n

commitment to the organization. The HR dept is also continuously working to

improve the working conditions of the employees.


PROCESS OF HR DEPT IN DSCL:

ess followed in DSCL as follows

Acquisition of Human Resources:

In DSCL acquisition process is concerned with securing & employing people


organization keeping in mind organizational objectives.

Development of Human Resources:

In DSCL development process is concerned with improving the skills of


skills, knowledge, aptitude,& values. All this process is done to improve the quality of

service which he renders for the organization & these qualities of employees are

improved to achieve organization goal.

Motivation of Human Resources:



if you increase salary or if you give a gift/ incentive of Rs.250 to 500



ing in the organization from past 15 to 25 years. Nearly 85% of

employees in DSCL are working from past 15 years.

Maintenance of Human Resources:


conditions that employees believe are necessary in order to maintain their


improve the working conditions of the employees.

concerned with securing & employing people


with improving the skills of


All this process is done to improve the quality of

ualities of employees are



if you increase salary or if you give a gift/ incentive of Rs.250 to 500



ing in the organization from past 15 to 25 years. Nearly 85% of


ecessary in order to maintain their



JGFGC Basavapattana

For example:

As the working conditions were not good in Administration and Management

block of the organization & the employees were disturbed with the working

conditions. So, they requested to HR dept to improve the working conditions of the

office. All this happened 2 years back & this problem was solved by the HR dept

within a span of 6months

Management block was shifted. Now the employees are happy and HR dept Head said

that after this action the efficiency of employees is increased by 20%.

HOW HR DEPT WORKS IN DSCL

The sugar plant

policies & procedures to acquire, develop, motivate & maintain Human Resources of

the organization. There is a committee named TRIPRIATE COMMITTEE, which

makes policies & procedures for the welfare of e

3.6.7 ABOUT TRIPRIATE COMMITTEE

TRIPRIATE COMMITTEE is a body which functioned for the welfare of

employees and it is regulated by the:

a) Government-( Sugar Ministry, Labor Ministry, labor commissioner, joint labor

commissioner etc)

b) Members of Co-operative Sugar factory and Government Sugar Factory ( Few

selected members)

c) Karnataka State Sugar Federation

The above committee is functioned for the welfare of employees in

industry. It solves problems between workers & management in the organization.

The functions as follows

a) The committee fixes the salaries of workers, employees and others who rendered

service for the organization.

b) The committee conducts employee w

c) Over all the committee look after the employees in sugar industry.



of the organization & the employees were disturbed with the working



within a span of 6months. That is, A new building was build were Administration &



HOW HR DEPT WORKS IN DSCL :

The sugar plant works on seasonal basis, so HR Dept has two different


There is a committee named TRIPRIATE COMMITTEE, which

makes policies & procedures for the welfare of employees in whole Sugar Industry.

ABOUT TRIPRIATE COMMITTEE :


employees and it is regulated by the:

( Sugar Ministry, Labor Ministry, labor commissioner, joint labor

operative Sugar factory and Government Sugar Factory ( Few

Karnataka State Sugar Federation-(President, General Secretary, Treasurer, etc).

The above committee is functioned for the welfare of employees in


The functions as follows

The committee fixes the salaries of workers, employees and others who rendered

service for the organization.

The committee conducts employee welfare & safety programs.

Over all the committee look after the employees in sugar industry.


of the organization & the employees were disturbed with the working



. That is, A new building was build were Administration &



works on seasonal basis, so HR Dept has two different


There is a committee named TRIPRIATE COMMITTEE, which

mployees in whole Sugar Industry.


( Sugar Ministry, Labor Ministry, labor commissioner, joint labor

operative Sugar factory and Government Sugar Factory ( Few

(President, General Secretary, Treasurer, etc).

The above committee is functioned for the welfare of employees in sugar


The committee fixes the salaries of workers, employees and others who rendered


JGFGC Basavapattana

3.6.8 EMPLOYEES WELFARE

DSCL has conducted many programs for the welfare of employees. The

different allowances paid by the company to the employees according t

act as follows;

1. Provident fund:

The company pays 12% on Basic

2. Gratuity :

The company pays 15days salary (per year) for permanent employees and

7days salary for seasonal employees.

3. EDLI (Employees Deposit Linked Fund)

The present rate of EDLI is Rs.67000. EDLI means if any employee expired

during the course of employment, then Rs. 67000 is paid to his dependents.

4. Workmen Compensation Payment

The company pays compensation, if any employee met with an accident while

working and the payment is done according to the act.

5. Medical Allowances:

The company pays Rs 250 per month for all the employees as Medical

Allowances.

6. Traveling Allowances

The company pays traveling allowances according to the distance traveled by the

employees.

0.1 to 4.9 kilometers Rs. 175 per month

� 5 to 9.9 kilometers Rs. 225 per month

� 10 to 14.5 kilometers Rs. 275 per month

� 15 and above Rs.325 per month.

The company also has transportation facility for employees.


EMPLOYEES WELFARE :


different allowances paid by the company to the employees according t

The company pays 12% on Basic + DA as provident fund.


7days salary for seasonal employees.

EDLI (Employees Deposit Linked Fund):



Workmen Compensation Payment:


rking and the payment is done according to the act.


Traveling Allowances:


to 4.9 kilometers Rs. 175 per month

5 to 9.9 kilometers Rs. 225 per month

10 to 14.5 kilometers Rs. 275 per month

15 and above Rs.325 per month.

The company also has transportation facility for employees.


different allowances paid by the company to the employees according to employees








JGFGC Basavapattana

7. Uniform :

The company also provides uniforms for the employees. The company

provides 3 pairs of uniform for 2years to permanent employees & 2 pairs of uniform

for seasonal employees.

allowances. The stitching allowances are Rs.87.5 per pair and washing allowance Rs.

25 per month.

8. Night Shift Allowances

The company pays Night Shift Allowances to the employees.

9. Canteen Facility:

The company has clean & hygiene canteen facility. The company charges

Rs.0.60 for tea, Rs.1.20 for Tiffin & Rs.3.50 for full meals.

10. Safety Training Programmers

The company has conducted many safeties training programmed in both sugar

plant & cogen plant. In cogen plant the safety training programmed i

in two months. The company has done many others programmers for the welfare of

employees and there are many other allowances made by the company for the welfare

of employees.

TIME OFFICE :

As every organization has Time Office, even DSCL has Time Office were

attendance register of the employees is maintained.

TIME OFFICE PROCESS

The company has t

Each shift is of 8hours. In time office has installed Electronic Punching Machine

where each employee has given a punching card & when an employee enters into the

organization goes through this




mployees. The company also pays stitching allowances and washing


Night Shift Allowances:

The company pays Night Shift Allowances to the employees.


Rs.0.60 for tea, Rs.1.20 for Tiffin & Rs.3.50 for full meals.

Safety Training Programmers:-


plant & cogen plant. In cogen plant the safety training programmed i

The company has done many others programmers for the welfare of

re are many other allowances made by the company for the welfare


attendance register of the employees is maintained.

TIME OFFICE PROCESS:

The company has three shifts & there are different workers in different shift.



organization goes through this process and the data is saved.



pany also pays stitching allowances and washing


The company pays Night Shift Allowances to the employees. (Rs. 5 per night).



plant & cogen plant. In cogen plant the safety training programmed is conducted once

The company has done many others programmers for the welfare of

re are many other allowances made by the company for the welfare


hree shifts & there are different workers in different shift.




JGFGC Basavapattana

4.1 INTRODUCTION


company does is revealed in this matter in the sense of financial statement










unit are to make profit from that. There are so many tr


arises the used for book

Now a day’s every business have to keep books of accounts. It is the

requirements of the law. Gener


1. Trading and P&L Account.

2. Balance sheet and even cash flow statement.

THE SAME PROCESS IS FOLLOWED IN DSCL AS MENTIONED A BOVE

� DSCL expanded its cogeneration capacity from 3MW to

2008 with a capital investment of INR 6,800 lakhs.


CHAPTER 4

FINANCIAL ANALYSIS

INTRODUCTION :-


company does is revealed in this matter in the sense of financial statement







re investors or can get competitive advantage.





arises the used for book-keeping.




Trading and P&L Account.

Balance sheet and even cash flow statement.

THE SAME PROCESS IS FOLLOWED IN DSCL AS MENTIONED A BOVE

DSCL expanded its cogeneration capacity from 3MW to 24.45MW during March

2008 with a capital investment of INR 6,800 lakhs.











ading activities in a financial



ally the companies are required to maintain mainly

THE SAME PROCESS IS FOLLOWED IN DSCL AS MENTIONED A BOVE.

24.45MW during March


JGFGC Basavapattana

� DSCL has developed its own farm of about 30 acres for experimentation &

development of new varieties of high yield sugarcane with higher sucrose content.

During 2007-08, DSCL was succe

belonging to farmers under sugarcane cultivation.

� During 2008-09, as a measure of upgrading technology in sugar manufacturing,

DSCL has adopted syrup clarifier technology imported from Tate & Lyle, London to

produced carbonized refined sugar. DSCL is envisaging next phase expansion of this

project currently. The objective is to realize higher price for per kg. of sugar sold by

INR 4 to 5.

� DSCL is managed by highly experienced team of technical & financial peop

the strong leadership of Mr. S. S. Ganesh, Managing Director.

� Managing Director Mr. Ganesh awarded with “Best Business

Cogeneration” by the Solar

Energy Society of India and Win rock International for best managed power plant in

India in 2009.

Mr. S S Ganesh is working with

� DSCL awarded with the honor of “Industrial Excellency” in technology &

management by Institute of Indian Economic Studies, New Delhi

� Documentary on DSCL co

� DSCL has entered into power trading a

Limited after grant of permission of open access by the order of CERC. The

agreement is renewable every 12 months. Due to this development, the average

realization per unit has improved to INR 7.50 during the current y

� DSCL has brought 3,000 acres of land under cultivation of high yield variety of

sugarcane by encouraging farmers.

� DSCL has improved its sugar manufacturing process by implementation of re

engineering the existing process and semi

processes.

� DSCL is controlled by Shamanur family.

� Promoter group holds 96% stake and balance 4% is with public


DSCL has developed its own farm of about 30 acres for experimentation &


08, DSCL was successfully in bringing about 18,000 acres of land

belonging to farmers under sugarcane cultivation.

09, as a measure of upgrading technology in sugar manufacturing,




DSCL is managed by highly experienced team of technical & financial peop

the strong leadership of Mr. S. S. Ganesh, Managing Director.

Managing Director Mr. Ganesh awarded with “Best Business

Cogeneration” by the Solar


Mr. S S Ganesh is working with

DSCL awarded with the honor of “Industrial Excellency” in technology &

management by Institute of Indian Economic Studies, New Delhi

Documentary on DSCL co-gen unit by BBC, UK.

DSCL has entered into power trading agreement with Reliance Energy Trading



realization per unit has improved to INR 7.50 during the current year.

DSCL has brought 3,000 acres of land under cultivation of high yield variety of

sugarcane by encouraging farmers.

DSCL has improved its sugar manufacturing process by implementation of re

engineering the existing process and semi- atomizing few of the

DSCL is controlled by Shamanur family.

Promoter group holds 96% stake and balance 4% is with public

DSCL has developed its own farm of about 30 acres for experimentation &


ssfully in bringing about 18,000 acres of land

09, as a measure of upgrading technology in sugar manufacturing,




DSCL is managed by highly experienced team of technical & financial people under

Managing Director Mr. Ganesh awarded with “Best Business –Leadership


DSCL awarded with the honor of “Industrial Excellency” in technology &

greement with Reliance Energy Trading



ear.

DSCL has brought 3,000 acres of land under cultivation of high yield variety of

DSCL has improved its sugar manufacturing process by implementation of re-

key manufacturing


JGFGC Basavapattana

� Current share capital of DSCL is INR 3686.85 lakhs (equivalent

face value of INR 10)

� DSCL is listed with Bangalore stock exchange, currently trading is suspended DSCL

Shareholding pattern

� Shamanur Group of Companies are promoted by Dr. S. Shivshankarappa. Shamanur

Group has business interest in Education, Bank, Sugar, and Power, Commodities,

Distilleries & food processing.

� The group is highly influential in Karnataka particularly Davangere region with its

flagship education business under the name & style of Bapuji Educational Association

� Davangere Sugar Company Limited (DSCL) is under majority control of t

Managing Director Mr S. S. Ganesh.

� Other sugar & power co

o Indian Cane Power Limited

o Shamanur Sugar Mills Limited

o Samson Distilleries Pvt. Limited

4.2 CURRENT RATIO:

This ratio measures the solvency of the company in

ratio of current assets to current liabilities. It shows the firm’s ability to cover its

current liabilities with its current assets. I

Generally 2:1 is considered ideal for a concern i.e., current as

twice of the current liabilities current assets are those assets which can be converted

into cash within a year. Current liabilities and provisions are those liabilities that are

payable within a year. Current assets includes cash in hand, c

receivable , sundry debtors, inventories, readily marketable securities, prepaid

expenses etc., current liabilities includes item such as bills payable, sundry creditors,

bank overdraft, cash credit, short term loans, occurred expenses

advance provision for income tax, proposed dividend etc.,


Current share capital of DSCL is INR 3686.85 lakhs (equivalent

face value of INR 10)

Bangalore stock exchange, currently trading is suspended DSCL

Shamanur Group of Companies are promoted by Dr. S. Shivshankarappa. Shamanur


ood processing.

The group is highly influential in Karnataka particularly Davangere region with its


Davangere Sugar Company Limited (DSCL) is under majority control of t

Managing Director Mr S. S. Ganesh.

Other sugar & power co-gen unit of the group includes:

Indian Cane Power Limited

Shamanur Sugar Mills Limited

Samson Distilleries Pvt. Limited

This ratio measures the solvency of the company in the short term. It is the


ities with its current assets. It is expressed as follows;

Generally 2:1 is considered ideal for a concern i.e., current as



payable within a year. Current assets includes cash in hand, cash at bank, , bills



bank overdraft, cash credit, short term loans, occurred expenses, income received in

advance provision for income tax, proposed dividend etc.,

Current share capital of DSCL is INR 3686.85 lakhs (equivalent equity shares with

Bangalore stock exchange, currently trading is suspended DSCL

Shamanur Group of Companies are promoted by Dr. S. Shivshankarappa. Shamanur


The group is highly influential in Karnataka particularly Davangere region with its


Davangere Sugar Company Limited (DSCL) is under majority control of the

the short term. It is the


Generally 2:1 is considered ideal for a concern i.e., current assets should be



ash at bank, , bills



, income received in


JGFGC Basavapattana

Current Ratio

TABLE NO – 4.2

Year

2008

2009

2010

Interpretation :

The standard current ratio is 2:1. The current ratio of the Davangere Sugar

Company is 6.07 in the year 2009 as compared to 8.05 in the year 2007. This shows

that the financial position of the Sugar

current ratio of all three

Davangere Sugar Company is less than 2. It means the company fined some

difficulties in payment of current liabilities and also

may suffer

0

2

4

6

8

10


=

Current

Asset

Current

Liabilities

77726.01 9650.07

85393.95 14493.57

100167.69 16501.10



that the financial position of the Sugar Company is not good; when we observ

current ratio of all three years we come to the conclusion that the current ratio of

ngere Sugar Company is less than 2. It means the company fined some

difficulties in payment of current liabilities and also day to day operations of business

2007 2008 2009

Ratios

8.05

5.89

6.07



Company is not good; when we observed the

years we come to the conclusion that the current ratio of

ngere Sugar Company is less than 2. It means the company fined some

day to day operations of business


JGFGC Basavapattana

4.3 LIQUID / QUICK / ACID RATIO

The term liquidity refers to the ability of a firm to pay its short term

obligations as and when they become due. This is the ratio of liquid assets to liquid

liabilities. It shows a firm’s ability to meet the current liabiliti

assets.1:1 is considered as ideal ratio for a concern. The concern should keep the

liquid assets at least equal to the liquid liabilities at all the times. Liquid assets are that

asset which are readily converted into cash and includes cash balances, bills

receivables, sundry debtors and short term investments. Inventories and prepaid

expenses are not included in the liquid assets because the emphasis is on the ready

availability of cash in case of liquid assets. Liquid liabilities include all the items of

current liabilities except bank overdraft. This is the acid test of a concern’s financial

soundness.

Ratio =

TABLE NO -4.3

Interpretation :

The quick ratio was lowest during the year 2007 i.e., 0.39 and

the year 2009 i.e., 0.55 the ideal standard quick ratio is 1:1. It means the company is

in a position to meet its immediate current liabilities.

0

0.5

1

2007

Year

2007

2008

2009


LIQUID / QUICK / ACID RATIO :



ows a firm’s ability to meet the current liabilities with its most liquid

1:1 is considered as ideal ratio for a concern. The concern should keep the


et which are readily converted into cash and includes cash balances, bills



ash in case of liquid assets. Liquid liabilities include all the items of


= –

The quick ratio was lowest during the year 2007 i.e., 0.39 and


in a position to meet its immediate current liabilities.

20072008

2009

Quick Asset Current Liabilities

3781.41 9650.07

13948.34 14493.57

9151.57 16501.10



es with its most liquid

1:1 is considered as ideal ratio for a concern. The concern should keep the


et which are readily converted into cash and includes cash balances, bills



ash in case of liquid assets. Liquid liabilities include all the items of


The quick ratio was lowest during the year 2007 i.e., 0.39 and lowest during


Ratio

0.39

0.96

0.55


JGFGC Basavapattana

4.4 DEBT EQUITY RATIO:

This ratio is calculated to measure the relative proportions of outsider’

and shareholders fund invested in the company. This ratio is determined to ascertain

the soundness of long term financial policies of that company and is also known as

external – internal equity ratio. Debt generally refers to long term liabilities

means owners fund. It consists of capital reserves and profits. It is calculated as

follows:

Debtors Turnover Ratio:

Debtors Turnover Ratio =

TABLE NO -4.4

Interpretation: -

The high Debt Equity Ratio shows that the claim of creditors is more than that

of owners. If the ratio is very high then it is unfavorable as per the firm’s point of

view. In the year 2007,

0

0.5

1

1.5

2

2.5

3

3.5

4

Year

2007

2008

2009


DEBT EQUITY RATIO:

This ratio is calculated to measure the relative proportions of outsider’



internal equity ratio. Debt generally refers to long term liabilities


Debtors Turnover Ratio:

Debtors Turnover Ratio =



view. In the year 2007, 2008 and 2009, the ratio was 1.39, 3.90 and 3.31.

2007 2008 2009

Sales Debtor Ratio

4742.71 3409.54 1.39

7805.8 2002.95 3.90

7948.48 2398.48 3.31

This ratio is calculated to measure the relative proportions of outsider’s funds



internal equity ratio. Debt generally refers to long term liabilities equity




2008 and 2009, the ratio was 1.39, 3.90 and 3.31.


JGFGC Basavapattana

4.5 AVERAGE COLLECTION PERIOD:

Average Collection Period =

TABLE NO - 4.5

Year

2007

2008

2009

Interpretation :

The average collection period represents the number of day’s worth of credit

sales that locked in debtors. Low average collection period shows that company’s

collection is fast and prompt. Form year 2007 and

average collection period but in 2008 it was decreased. This is good sign for

company.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5


AVERAGE COLLECTION PERIOD:

Average Collection Period =

4.5

Days In a

Year

Debtor Turnover

Ratio

Collection

Period

365 1.39 263

365 3.90 94

365 3.31 110



collection is fast and prompt. Form year 2007 and 2009 there was an increase in the


2007 2008

Collection



2009 there was an increase in the


2009


JGFGC Basavapattana

4.6 FIXED ASSET AND CURRENT ASSET RATIO

This ratio measures the efficiency of the assets use. The efficiency use of

assets will generate greater sales per rupee invested in all the assets of a concern. The

insufficient use of asset will result in low sales volume coupled with higher overhead

charges and under utilization of the available capacity. This ratio is important in case

of manufacturing concerns because the sales are produced not only by use of current

asset but also by amount invested in fixed assets. The higher is the ratio better is

performance. On the other hand, a low ratio indicated that fixed assets are not being

efficiently utilized.

The firm may wish to know its efficiency utilizing fixed assets and current

assets separately.

Fixed Asset Turnover Ratio:

Fixed Asset Turnover Ratio

Year

2007

2008

2009


FIXED ASSET AND CURRENT ASSET RATIO :




rges and under utilization of the available capacity. This ratio is important in case


asset but also by amount invested in fixed assets. The higher is the ratio better is



Fixed Asset Turnover Ratio:

Fixed Asset Turnover Ratio =

Fixed Assets

Sales Fixed Asset

4742.71 4870.14

7805.8 6060.01

7948.48 7206.42




rges and under utilization of the available capacity. This ratio is important in case


asset but also by amount invested in fixed assets. The higher is the ratio better is the



Sales

Fixed Assets

Ratio

0.97

1.29

1.10


JGFGC Basavapattana

Current asset turnover Ratio

Year

2007

2008

2009

0

0.5

1

1.5


TABLE NO -3.7

Current asset turnover Ratio = Sales

Current Asset

Sales Current Asset

4742.71 3781.41

7805.8 13948.34

7948.48 9151.57

2007 2008 2009

Sales

Current Asset

Ratio

1.25

0.56

0.87


JGFGC Basavapattana

Interpretation :

The fixed asset turnover of the Sugar Company is faster than the current asset

turnover. The fixed asset turnover ratio during the year 2008 is highest i.e., 1.29

times. It implies that company generates a sale of Rs. 1.29 for one rupee investment in

fixed assets. The current asset turnover ratio during the year 2007 was highest i.e.,

1.25 times it implies that company generates a sales of Rs. 1.25 for one rupee

investment in current assets. The high fixed assets and current assets ratio indicates

that the overtrading on assets.

0

0.5

1

1.5


TABLE NO -3.8




assets. The current asset turnover ratio during the year 2007 was highest i.e.,



overtrading on assets.

2007 2008 2009




assets. The current asset turnover ratio during the year 2007 was highest i.e.,




JGFGC Basavapattana

NET PROFIT RATIO:

This ratio explains per rupee profit generating capacity of sales. If the cost of

sales is lower, then the net profit will be higher and then we divide it with net sales,

the result is the sales efficiency. If the lower is the net profit per rupee of sales, lower

will be the sales efficiency. The concern must try for achieving greater sales

efficiency for maximizing the ROI. This ratio is very useful to the proprietors and

prospective investors be

ratio is differ from the operating ratio in as much as it is calculated after deducting

non operating expenses such as loss on sale of fixed assets etc from operating profit

and adding non operating income like interest or dividends on investments profit on

sales of investments or fixed assets like higher the ratio, the better it is because it

gives idea of improved efficiency of the concern.

Net Profit Ratio =

Year

2007

2008

2009


NET PROFIT RATIO:



efficiency. If the lower is the net profit per rupee of sales, lower



prospective investors because it reveals the overall profitability of the concern.



n operating income like interest or dividends on investments profit on


gives idea of improved efficiency of the concern.

Profit after Tax

Net Profit Ratio =

Net Sales

Profit After

Tax

Sales

8612.90 4742.71

5218.10 7805.8

3586.06 7948.48



efficiency. If the lower is the net profit per rupee of sales, lower



cause it reveals the overall profitability of the concern. This



n operating income like interest or dividends on investments profit on


Profit after Tax

Net Sales

Ratio

1.82

0.66

0.45


JGFGC Basavapattana

Interpretation :

The net profit ratio of the Sugar Company during the

is because of low interest and high operating profit. The net profit is low during the

year 2009 was 4.5%, this is because of low operating profit. From 2

net profit has been

economic conditions such as price competition, low demand etc.

WORKING CAPITAL TURNOVER RATIO:

Working capital of concer

bills receivable, cash, stock etc. The working capita

current assets – current liabilities.

Working capital turnover ratio indicates the velocity of utilization of net

working capital. This ratio indicates the number of times the working capital is turned

over in the course of a year. This ratio measures the efficiency with which the

working capital is being used by a firm. A higher ratio indicates efficient utilization of

working capital and a low ratio indicates otherwise. But a very high working capital

turnover ratio is not a good situation for any firm and hence care must be taken while

interpreting the ratio.

0

0.5

1

1.5

2


TABLE NO -3.9

The net profit ratio of the Sugar Company during the year 2007 was 11%, this


year 2009 was 4.5%, this is because of low operating profit. From 2

decreases. This is because the company fa

economic conditions such as price competition, low demand etc.

WORKING CAPITAL TURNOVER RATIO:

Working capital of concern is directly related to sales. The current assets like debtors,

cash, stock etc. The working capital is taken as; Working capital =

current liabilities.



f a year. This ratio measures the efficiency with which the



t a good situation for any firm and hence care must be taken while

2007 2008 2009

year 2007 was 11%, this


year 2009 was 4.5%, this is because of low operating profit. From 2007 onward the

decreases. This is because the company faces the adverse

he current assets like debtors,

l is taken as; Working capital =



f a year. This ratio measures the efficiency with which the



t a good situation for any firm and hence care must be taken while


JGFGC Basavapattana

Working capital turnover Ratio

Year

2007

2008

2009

Interpretation :

The working capital turnover

is high (i.e., 1.10) times while compared to the working capital turnover ratio of other

years. This high ratio indicates efficient utilization of working capital.

0

0.2

0.4

0.6

0.8

1

1.2


Net sales

Working capital turnover Ratio =

Working capital

Net Sales Working

Capital

4742.71 6807.59

7805.8 7090.03

7948.48 8038.96

TABLE NO -3.10

The working capital turnover ratio of the Sugar Company during the year 2008



2007 2008 2009

Net sales

Working capital

Ratio

0.70

1.10

0.99

ratio of the Sugar Company during the year 2008




JGFGC Basavapattana

PROPRIETORY RATIO OR EQUITY RATIO:

Proprietary ratio or equity ratio is also called as the shareholders to total

equities ratio or net worth to total asset ratio. This ratio establishes the relationship

between shareholders funds and total assets of the firm. This is an important ratio for

determining the long term solvency of a firm. The shareholders funds are equity

capital. Preference share capital, undistributed profits, reserves and surplus. The total

asset denotes the total resourc

Proprietary ra

Year

2007

2008

2009

2

2.1

2.2

2.3

2.4

2.5

2.6


PROPRIETORY RATIO OR EQUITY RATIO:




determining the long term solvency of a firm. The shareholders funds are equity

Preference share capital, undistributed profits, reserves and surplus. The total

asset denotes the total resources of the concern

Net worth

ary ratio =

Total Asset

Net worth Total Asset

3702.59 1650.11

4010.11 1613.51

4368.71 1686.00

TABLE NO -3.11

2007 2008 2009




determining the long term solvency of a firm. The shareholders funds are equity share

Preference share capital, undistributed profits, reserves and surplus. The total

Net worth

Total Asset

Total Asset Ratio

2.24

2.48

2.59


JGFGC Basavapattana

Interpretation :

The proprietary ratio was highest during the year 2009 (i.e., 2.59) while compared to

the proprietary ratio from 2007 and 2008. The ratio of 2.24: 2.48 considered as an

ideal proprietary ratio. The proprietary ratio of Sugar Company is more than the ideal

ratio. Therefore, the company financial position is very good and strong. The Sugar

Company also has long term solvency position




ratio. The proprietary ratio of Sugar Company is more than the ideal

Therefore, the company financial position is very good and strong. The Sugar

Company also has long term solvency position.



ratio. The proprietary ratio of Sugar Company is more than the ideal

Therefore, the company financial position is very good and strong. The Sugar


JGFGC Basavapattana

SUMMARY OF FINDINGS

5.1 FINDINGS BASED ON RATIO:

In this chapter involved brief result of the study in terms of findings and some

suggestions to improve over come the drawbacks.

Following are the findings identified fr

� The company is large scale growth oriented company and it shows a profitable figure

throughout period of study, among the 3 years.

� The company has managing its working capital

� Current ratio of the Davangere sugar company

09.

� The firm is maintained in more efficient inventory of raw materials in next future

production.

� The company has followed the inventory system of the company preparing on daily

basis, monthly basis and yearly basis.

� The quick ratio of Davangere sugar company Ltd.

� Working capital turnover

the year 2008-09

� Company has maintained sufficient cash a

except 2008-09.

� The fixed assets turnover rat

the year 2007-08 (but slightly decr

� The company failed to manage inventory turnover ratio in the y

� The company is ordered raw material by calling tenders. This is purely looked after

by the purchase department.

� The company is following the economic order quantity on ordering for the raw

materials.

� The company aim is to increase the produc


CHAPTER 5

SUMMARY OF FINDINGS , SUGGESSIONS, CONCLUSION AND FUTURE

LINE OF RESEARCH

5.1 FINDINGS BASED ON RATIO:-


suggestions to improve over come the drawbacks.

Following are the findings identified from the analysis made on the working capital.

The company is large scale growth oriented company and it shows a profitable figure

throughout period of study, among the 3 years.

The company has managing its working capital is not more efficiently.

tio of the Davangere sugar company Ltd., decrease but increased in 2008

The firm is maintained in more efficient inventory of raw materials in next future

The company has followed the inventory system of the company preparing on daily

asis, monthly basis and yearly basis.

of Davangere sugar company Ltd. has decreased year to year.

Working capital turnover ratio of Davangere sugar company Ltd., was decreased

Company has maintained sufficient cash and bank balance during the study period

The fixed assets turnover ratio of Davanger sugar company Ltd., has increased duri

but slightly decreased in 2008-09.

The company failed to manage inventory turnover ratio in the year 2008

The company is ordered raw material by calling tenders. This is purely looked after

by the purchase department.

The company is following the economic order quantity on ordering for the raw

The company aim is to increase the production of Sugar and power

, SUGGESSIONS, CONCLUSION AND FUTURE


om the analysis made on the working capital.

The company is large scale growth oriented company and it shows a profitable figure

more efficiently.

decrease but increased in 2008-

The firm is maintained in more efficient inventory of raw materials in next future

The company has followed the inventory system of the company preparing on daily

has decreased year to year.

Ltd., was decreased in

nd bank balance during the study period

Ltd., has increased during

ear 2008-09.

The company is ordered raw material by calling tenders. This is purely looked after

The company is following the economic order quantity on ordering for the raw

Sugar and power in future.


JGFGC Basavapattana

5.2 FINDING BASED ON OBSERVATION:

• Growth is the main objective or goal of any organization & the organization will be

frequently working on it.

• The government plays an important role in framing policies & procedures

industry.

• Flow of information & understanding between departments plays an important role

for the success of an organization.

• Each and every department is interlinked & acts as a source of information to one

another.

• The effect of external facto

environment etc plays an important role in agro

• The company is planning to increase its sugarcane crushing capacity.

• The company is planning to supply its power to TATA Company limited.

• The company is showing more interest towards foreign market.

• The company has a separate department called cane development department where

farmers are encouraged by giving loans to grow more & more sugarcane.

• The company has adopted new techniques & procedure

5.3 SUGGESTION:-

The following are few suggestion offered to the Sugar Company for

improving its performance.

1) The company should raise the funds through issuing the equity share capital,

preference share capital, debentures, bonds and other sources of finance.

2) The sugar Company should improve its short term solvency position by investing

more and more in current


5.2 FINDING BASED ON OBSERVATION:

Growth is the main objective or goal of any organization & the organization will be

frequently working on it.

The government plays an important role in framing policies & procedures

Flow of information & understanding between departments plays an important role

for the success of an organization.

Each and every department is interlinked & acts as a source of information to one

The effect of external factors like, suppliers(farmers), government, natural

environment etc plays an important role in agro-based industries

The company is planning to increase its sugarcane crushing capacity.

The company is planning to supply its power to TATA Company limited.

company is showing more interest towards foreign market.

The company has a separate department called cane development department where


The company has adopted new techniques & procedures to cut the total cost.

-


improving its performance.

The company should raise the funds through issuing the equity share capital,


The sugar Company should improve its short term solvency position by investing

more and more in current assets.

Growth is the main objective or goal of any organization & the organization will be

The government plays an important role in framing policies & procedures for sugar

Flow of information & understanding between departments plays an important role

Each and every department is interlinked & acts as a source of information to one

rs like, suppliers(farmers), government, natural

The company is planning to increase its sugarcane crushing capacity.

The company is planning to supply its power to TATA Company limited.

The company has a separate department called cane development department where


s to cut the total cost.


The company should raise the funds through issuing the equity share capital,


The sugar Company should improve its short term solvency position by investing


JGFGC Basavapattana

3) The sugar Company should improve its production methods by upgrading the latest

technologies so it helps the company to produce the product at lower cost with better

quality which can attract more and more customers.

4) For the day to day operatio

the company should maintain the high working capital ratio.

5) The company can reduce the loss by reducing the certain position of cost of goods

sold.

6) While upgrading the technology the company needs or require the fund so the

government should provide the fund for the development of the company.

7) Sugar Company should take the effective barriers to reduce the competition.

8) The Sugar Company should conce

by adopting the various marketing strategies.

9) While observing the balance sheets it clearly shows that there is existence of sundry

debtors. It means the company sells the goods on credit basis. Credi

inevitable, but future is uncertain. So the company should improve its collection

policy.

10) It is very important for the company to control and managed the inventory in an

effective manner. The company should make an investment in inventories.

company should try to reduce the holding period of the stock.

5.4 CONCLUSION:

Sugar industry a seasonal, agro

the economy. It has an immense potential for transforming the rural economy into


The sugar Company should improve its production methods by upgrading the latest


quality which can attract more and more customers.

For the day to day operations of the company the working capital is very essential. So

the company should maintain the high working capital ratio.

The company can reduce the loss by reducing the certain position of cost of goods

While upgrading the technology the company needs or require the fund so the


Sugar Company should take the effective barriers to reduce the competition.

The Sugar Company should concentrate on to improve the sales. This is possible only

by adopting the various marketing strategies.

While observing the balance sheets it clearly shows that there is existence of sundry

debtors. It means the company sells the goods on credit basis. Credi


It is very important for the company to control and managed the inventory in an

effective manner. The company should make an investment in inventories.

company should try to reduce the holding period of the stock.

Sugar industry a seasonal, agro-based industry occupies an important place in


The sugar Company should improve its production methods by upgrading the latest


ns of the company the working capital is very essential. So

The company can reduce the loss by reducing the certain position of cost of goods

While upgrading the technology the company needs or require the fund so the


Sugar Company should take the effective barriers to reduce the competition.

ntrate on to improve the sales. This is possible only

While observing the balance sheets it clearly shows that there is existence of sundry

debtors. It means the company sells the goods on credit basis. Credit sales are


It is very important for the company to control and managed the inventory in an

effective manner. The company should make an investment in inventories. The

based industry occupies an important place in



JGFGC Basavapattana

self-generating one. The industry can except to grow and emerge as a key player in

the international arena.

When such is the case, safety and welfare measure observed in the industries have an

important role to play in the development of the industries.

DAVANGERE SUGAR COMPANY LIMITED

privatization and succeeded in market from past 36 years and it is frequently working

on its objective that is growth, as DSCL believes growth as the success of the

organization.


generating one. The industry can except to grow and emerge as a key player in

the international arena.


important role to play in the development of the industries.

DAVANGERE SUGAR COMPANY LIMITED has made great efforts after its



generating one. The industry can except to grow and emerge as a key player in


has made great efforts after its




JGFGC Basavapattana

BOOKS

Marketing management by Philip kotler, 2005 edition

Human resource management Ashwathappa k. 2000 edition

Production and operation management Ashwathappa k.3

Company three years annual report

1. 2007-08

2. 2008-09

3. 2009-10

NEWS PAPER

Nagar vane local news paper on 14/06/2008

Prajavani news paper on 13

LIST OF WEBSITES

Www.sugar.co.in

www.dscl.co.in

www.indiansugar.co.in

LINKS

http://www.processregister.com/Davangere_Sugar_Co_Ltd/Supplier/sid2

2751.htm

Last Accessed 13-04 2010

http://business.mapsofindia.com/sugar

Last Accessed 06-05

http://www.karnataka.com/industry/sugar

Last Accessed 19-05

http://www.projectsmonitor.com/detailnews.asp?newsid=5869

Last Accessed 11-06


BIBLIOGRAPHY

Marketing management by Philip kotler, 2005 edition

Human resource management Ashwathappa k. 2000 edition

Production and operation management Ashwathappa k.3rd edition

Company three years annual report

Nagar vane local news paper on 14/06/2008

Prajavani news paper on 13-09-2009

WEBSITES

www.indiansugar.co.in


04 2010

http://business.mapsofindia.com/sugar-industry/karnataka.html

05-2010

http://www.karnataka.com/industry/sugar

05-2010


06-2010


industry/karnataka.html



JGFGC Basavapattana

http://www.business

beacon.com/kommon/bin/sr.php?kall=wcos&tab=1010&cocode=56459

Last Accessed 17-06

http://www.gorecroot.com/hiring/India/Davangere

Last Accessed 14-08


usiness-


06-2010

http://www.gorecroot.com/hiring/India/Davangere-Sugar-

08-2010


-Co-Ltd-


JGFGC Basavapattana

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2008

INCOME SALE OF PRODUCTS

1.SUGAR

DOMESTIC SALES

EXPORTS

2. POWER

3. MOLASSES SALES

4 OTHER INCOME

TOTAL

EXPENDITURE

SUGAR UNIT:

CANE PURCHASED

CANE PURCHASE TAX

CANE PROCUREMENT & DEV

EXP

MANUFACTURING

EXPENSES

ADMINISTRATIVE

EXPENSES

RAW SUGAR CON



PRODUCTS SCHEDULE

AS AT

31.03.2008

37,45,41,049.66

9,97,30,250.00

47,69,10,124.80

3. MOLASSES SALES 3,08,98,630.00

2.01 55,82,731.50

98,76,62,785.96

52,88,49,841.00

CANE PURCHASE TAX 2,77,13,381

CANE PROCUREMENT & DEV 2.02 1,84,46,384.96

2.03 8,62,42,224.78

2.04 1,34,95,787.48

2.05 0.00


AS AT

31.03.2007

37,45,41,049.66

9,97,30,250.00

59,64,74,504.28

18,41,06,650.00

47,69,10,124.80 43,17,06,571.00

3,08,98,630.00 3,54,87,501.00

55,82,731.50 4,89,82,670.20

98,76,62,785.96 1,29,67,57,896.48

52,88,49,841.00

31,08,59,217.00

1,40,51,071.26

1,84,46,384.96 1,98,66,885.53

8,62,42,224.78 6,39,16,100.42

1,34,95,787.48 2,50,31,439.15

74,77,149.08


JGFGC Basavapattana

SELLING & DISTRUBUTION

EXPENSES

FINANCIAL CHARGES

FRINGE BENEFIT TAX

CO-GEN UNIT:

CONSUMPTION OF COAL

FINANCIAL CHARGES

DECREASE(+) /INCREASE(

FINISHED GOODS & BY

PRODUCTS

TOTAL

PROFIT BEFORE TAX

LESS:

TOTAL DEPRECIATION

OPBPT

LESS:

MAT

FRINGE BEN TAX

PAT

ADD: DEFERRED TAX ON

INCOME


SELLING & DISTRUBUTION 2.06 3,44,51,852.75

FINANCIAL CHARGES 2.08 5,86,53,665.29

FRINGE BENEFIT TAX 1,43,377.00

CONSUMPTION OF COAL 19,68,94,627.40

FINANCIAL CHARGES 2.08 5,40,59,769.00

DECREASE(+) /INCREASE(-) IN 2.07 1,96,70,692.43

FINISHED GOODS & BY -21,36,15,036.00

82,50,06,567.09

PROFIT BEFORE TAX 16,26,56,218.87

TOTAL DEPRECIATION

1.05 10,03,79,109.99

6,22,77,108.88

70,55,996.44

3,13,073.36

5,49,08,039.08

ADD: DEFERRED TAX ON 27,27,007.31

3,44,51,852.75 1,10,45,549.07

5,86,53,665.29 6,13,29,090.64

19,68,94,627.40 26,61,36,962.05

5,40,59,769.00 5,48,11,390.80

1,96,70,692.43 1,65,60,384.53

21,36,15,036.00 29,01,61,403.00

82,50,06,567.09 1,14,12,46,642.53

16,26,56,218.87 15,55,11,253.95

10,03,79,109.99 10,07,65,618.96

6,22,77,108.88 5,47,45,634.99

70,55,996.44

45,82,293.28

1,32,666.00

5,49,08,039.08 5,00,30,675.71

27,27,007.31 3,60,98,317.26


JGFGC Basavapattana

NET PROFIT

LOSS B/F PREV YEAR

BAL LOSS C/F BALANCE SHEET

BALANCE

SOURCES OF FUNDS

1)SHAE HOLDERS FUND :

A. SHARE HOLDERS

CAPITAL

B. RESERVES & SURPLUS

TOTAL ‘A’

2)LOAN FUNDS:

A. SECURED LOAN

B. UNSECURED LOAN

TOTAL ‘B’

TOTAL (A+B)

APPLICATIONS OF FUNDS:

1.FIXED ASSETS:

A. GROSS BLOCK


5,21,81,031.77

LOSS B/F PREV YEAR -5,10,84,345.96

BAL LOSS C/F BALANCE SHEET 10,96,685.81

BALANCE SHEET as at 31.03.2008

SCHEDULE AS AT 31.03.2008

1)SHAE HOLDERS FUND :

A. SHARE HOLDERS


1.01

1.02

36,85,64,570.00

3,24,46,432.46

40,10,11,002.46

A. SECURED LOAN

B. UNSECURED LOAN

1.03

1.04

1,20,13,35,441.89

1,11,72,819.96

1,21,25,08,261.85

1,61,35,19,264.31


1.05

5,21,81,031.77 8,61,28,992.97

5,10,84,345.96 -13,72,13,338.93

10,96,685.81 -5,10,84,345.96

AS AT 31.03.2008 AS AT 31.03.2007

33,89,09,940.00

3,13,49,746.65

37,02,59,686.65

1,30,46,23,164.25

1,11,19,677.96

1,68,60,02,528.86

1,68,60,02,528.86


JGFGC Basavapattana

B. DEP TO DATE

C. NET BLOCK

D. CAPITAL W.I.P

TOTAL ‘C’

1. INVESTMENTS

TOTAL ‘D’

4.CURRENT ASSETS,

LOAN& ADVANCES:

A. INVENTORIES

B. SUNDRY DEBTORS

C. CASH & BANK BAL

D. LOANS ADVANCES

TOTAL ‘E’

LESS:

CURENT LIABILITIES &

PROVISION:

PROVISIONS TOTAL ‘F’

NET CURRENT

ASSETS(E-F)

DEFERRED REV EXP

‘H’

DEFERRED TAX ASSET


1,23,05,00,985.61

48,29,51,456.50

74,75,49,529.11

6,57,57,253.17

81,33,06,782.28

INVESTMENTS 1.06 5,35,900.00

4.CURRENT ASSETS,

ADVANCES:

B. SUNDRY DEBTORS

C. CASH & BANK BAL

ADVANCES

1.07

1.08

1.09

1.10

43,98,97,606.92

20,02,95,265.17

9,59,93,775.54

11,77,52,950.11

85,39,39,597.74



CURRENT

DEFERRED REV EXP

DEFERRED TAX ASSET

1.11

14,49,35,718.51

70,90,03,879.23

5,73,01,392.85

1,04,44,28,682.10

38,25,72,346.51

66,18,56,335.59

19,08,72,768.50

85,27,29,104.09

5,35,900.00

13,45,69,762.44

34,09,54,491.46

2,43,57,261.29

27,73,78,683.17

77,72,60,198.36

9,65,00,714.66

68,07,59.483.70

6,47,95,377.85


JGFGC Basavapattana

‘H’

PROFIT & LOSS A/C ‘J’

TOTAL ( C+D+G+H+I+J)

PROFIT & LOSS ACCOUN

INCOME SALE OF PRODUCTS

1.SUGAR

DOMESTIC SALES

EXPORTS

2. POWER

3. MOLASSES SALES

4 OTHER INCOME

TOTAL

EXPENDITURE

SUGAR UNIT:

CANE PURCHASED

CANE PURCHASE TAX

CANE PROCUREMENT & DEV

EXP

MANUFACTURING

EXPENSES

ADMINISTRATIVE



3,33,71,309.95

0.00

C+D+G+H+I+J) 1,61,35,19,264.31


INCOME SALE OF PRODUCTS SCHEDULE

AS AT

31.03.2009

72,58,62,806.20

6,89,86,550.00

42,07,02,266.40

1,27,39,836.00

2.01 63,86,448.95

1,23,46,77,907.95

58,17,00,763.00

57.40,710.00

CANE PROCUREMENT & DEV 2.02 1,73,62,738.31

2.03 10,06,19,886.51

2.04 1,56,56,050.91

3,60,98,317.26

5,10,84,345.96

1,68,60,02,528.86

T FOR THE YEAR ENDING 31.3.2009

AS AT

31.03.2008

37,45,41,049.66

9,97,30,250.00

47,69,10,124.80

3,08,98,630.00

55,82,731.50

98,76,62,785.96

52,88,49,841.00

2,77,13,381

1,84,46,384.96

8,62,42,224.78

1,34,95,787.48


JGFGC Basavapattana

EXPENSES

RAW SUGAR CON

SELLING & DISTRUBUTION

EXPENSES

FINANCIAL CHARGES

FRINGE BENEFIT TAX

CO-GEN UNIT:

CONSUMPTION OF COAL

FINANCIAL CHARGES

DECREASE(+) /INCREASE(

FINISHED GOODS & BY

PRODUCTS

TOTAL

PROFIT BEFORE TAX

LESS:

TOTAL DEPRECIATION

OPBPT

LESS:

MAT

FRINGE BEN TAX

PAT

ADD: DEFERRED TAX ON

INCOME

NET PROFIT

LOSS B/F PREV YEAR

BAL LOSS C/F BALANCE SHEET

BALANCE SHEET as

SOURCES OF FUNDS

1)SHARE HOLDERS FUND :


2.05

SELLING & DISTRUBUTION 2.06 58,71,146.53

2.08 8,42,08,069.22

18,07,26,782.00

2.08 4,40,41,807.00

DECREASE(+) /INCREASE(-) IN 2.07 2,47,81,260.49

FINISHED GOODS & BY +3,58,79,023.00

1,09,92,88,236,97

13,53,89,670.58

1.05 10,54,31,593.83

2,99,58,076.75

34,57,848.06

4,22,265.35

2,60,77,963.34

ADD: DEFERRED TAX ON 97,82,681.49

3,58,60,644.83

10,96,685.81

BAL LOSS C/F BALANCE SHEET 3,96,57,330.64

BALANCE SHEET as at 31.03.2009

SCHEDULE AS AT 31.03.2009

1)SHARE HOLDERS FUND :

0.00

3,44,51,852.75

5,86,53,665.29

1,43,377.00

19,68,94,627.40

5,40,59,769.00

1,96,70,692.43

-21,36,15,036.00

82,48,63,190.09

16,26,56,218.87

10,03,79,109.99

6,24,20,485.88

70,55,996.44

3,13,073.36

5,49,08,039.08

27,27,007.31

5,21,81,031.77

-5,10,84,345.96

10,96,685.81

AS AT 31.03.2009 AS AT 31.03.2008


JGFGC Basavapattana

A. SHARE HOLDERS CAPITAL


TOTAL ‘A’

2)LOAN FUNDS:

A. SECURED LOAN

B. UNSECURED LOAN

TOTAL ‘B’

TOTAL (A+B)


1.FIXED ASSETS:

A. GROSS BLOCK

B. DEP TO DATE

C. NET BLOCK

D. CAPITAL W.I.P

TOTAL ‘C’

3. INVESTMENTS

TOTAL ‘D’

4.CURRENT ASSETS, LOANS &

ADVANCES:

A. INVENTORIES

B. SUNDRY DEBTORS

C. CASH & BANK BAL

D. LOANS & ADVANCES

TOTAL ‘E’


A. SHARE HOLDERS CAPITAL


1.01

1.02

36,85,64,570.00

6,83,07,077.29

43,68,71,647.29

B. UNSECURED LOAN

1.03

1.04

1.20,21,19,191.27

1,11,19,677.96

1,21,32,38,869.23

1,65,01,10,516.52


1.05

1,32,25,99,159.77

58,83,83,050.33

73,42,16,109.44

1,74,16,362.28

75,16,32,417.72

INVESTMENTS 1.06 5,35,900.00

4.CURRENT ASSETS, LOANS &

D. LOANS & ADVANCES

1.07

1.08

1.09

1.10

45,21,28,310.14

23,98,48,063.29

4,63,02,992.81

26,33,97,549.85

1,00,16,76,916.09

36,85,64,570.00

36,85,64,570.00

3,24,46,432.46

43,68,71,647.29 40,10,11,002.46

1.20,21,19,191.27

1,11,19,677.96

1,20,13,35,441.89

1,11,72,819.96

1,21,32,38,869.23 1,21,25,08,261.85

1,65,01,10,516.52 1,61,35,19,264

1,32,25,99,159.77

58,83,83,050.33

73,42,16,109.44

1,23,05,00,985.61

48,29,51,456.50

74,75,49,529.11

6,57,57,253.17

75,16,32,417.72 81,33,06,782.28

5,35,900.00

45,21,28,310.14

23,98,48,063.29

26,33,97,549.85

43,98,97,606.92

20,02,95,265.17

9,59,93,775.54

11,77,52,950.11

1,00,16,76,916.09 85,39,39,597.74


JGFGC Basavapattana

LESS:


PROVISION:


NET CURRENT ASSETS(E

DEFERRED REV EXP ‘H’

DEFERRED TAX ASSET ‘H’


TOTAL ( C+D+G+H+I+J)




NET CURRENT ASSETS(E-F)

DEFERRED REV EXP ‘H’

DEFERRED TAX ASSET ‘H’

1.11

19,77,81,345.58

80,38,95,570.51

5,08,92,582.85

4,31,53,991.44

TOTAL ( C+D+G+H+I+J) 1,65,01,10,516.52

19,77,81,345.58

80,38,95,570.51

14,49,35,718.51

70,90,03,879.23

5,73,01,392.85

3,33,71,309.95

0.00

1,65,01,10,516.52 1,61,35,19,264

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Davangere Sugar