ORGANIZATION STUDY AT

EMPEE SUGARS AND CHEMICALS LIMITED

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CHAPTER I

INDUSTRY PROFILE

Global Scenario Indian Scenario Past & Current Situation Few Influencing Factors Key Players PEST Analysis Porter’s 5 Forces Analysis Scope of the study Objectives of the study Limitations

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GLOBAL SCENARIO:-

INTRODUCTION

Sugars are a major form of carbohydrates and are found probably in all green plants.

They occur in significant amounts in most fruits and vegetables. There are three main simple

sugars sucrose, fructose and glucose. Sucrose is in fact a combination of fructose and glucose

and the body quickly breaks down into these separate substances.

GLOBAL BIGWIGS IN SUGAR

Brazil 648,921,280

 India 348,187,900

  People's Republic of China 124,917,502

Thailand 73,501,610

Pakistan 63,920,000

Mexico 51,106,900

Colombia 38,500,000

Australia 33,973,000

Argentina 29,950,600

United States 27,603,000

World 1,743,092,995

PRODUCTION

World production is now put at 157.160 million tonnes, raw value, up by 4.678

million tonnes or 3.07% from the last season. Generally sugar crops in the world’s leading

producing countries with the exception of the EU, Russia, and, probably, India is now likely

to be lower than expectations at the beginning of the season.

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INDIAN SCENARIO:-

INTRODUCTION

There are 453 sugar mills in India. Co-operative sector has 252 mills and private

sector has 134 mills. Public sector boasts of around 67 mills.

The Indian sugar industry uses sugarcane in the production of sugar and hence

maximum number of the companies is likely to be found in the sugarcane growing states of

India including Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, Karnataka, and Andhra

Pradesh. Uttar Pradesh alone accounts for 24% of the overall sugar production in the nation

and Maharashtra's contribution can be totaled to 20%.

Sugar consumption rate is highest in India as shown in the statistics received from

USDA Foreign Agricultural Service. However, as per production is concerned, India has

notched up 2nd position following Brazil, the largest sugar producer in the world.

ECONOMY ROLE

India is one of the largest sugar producing and consuming country in the world. The

sugar industry plays a vital role in rural areas and provides direct and indirect employment in

the country. India emerged as the largest producer of white sugar in the world.

The central government has already de-licensed. The sugar productions they purpose

to decontrol the release mechanism by introduction of reduce on sugar price. At present India

enjoys second place in the world sugar production. Central as well as state government has

been getting 140 crores in the form of excess taxes from sugar industry. The industry has

been providing substance to 5.5 lakhs workers and sustaining about 4.5 crores agriculture. Its

total capital investment is amount to Rs 1560 crores.

The sugar industry has a unique place in Indian economy and rural development

because if its multiple contributions in terms of employment and provisions of raw materials

to other industries. The sugar industry occupies a vital role among the 4 major sugar

producing countries in the world. The other 3 are being USA, Brazil and Cuba.

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EXPORTS

Global demand and shortage of sugar cane has been in the news for the past years or

so. Sugarcane is exported by India and Brazil, the two major sugar producers. There has been

a sharp drop in sugar production and processing of sugar in India for the past year, a supply

crunch that was caused by erroneous monsoon rains- The monsoon hit India there were losses

accumulating in the sugarcane industry.

SUGAR PRODUCTION PROCESS

The sugar production process involves three steps:

(a) Crushing of the sugarcane,

(b) Clarification of the sugarcane juice and crystallization of sugar and

(c) Separation.

The sugarcane received from the farmers is uniformly fed to the fibrizor to prepare the

same for efficient milling. The sugarcane is crushed to extract the sugarcane juice. The juice

extracted from the milling plant is mechanically screened. The juice is then heated to about

70 degree centigrade in rapid flow vertical juice heater. The heated juice is limed and

sulphited in a continuous juice sulphiter. The treated juice is then heated to approximately

105 degree centigrade and made to enter a flash tank for the removal of gas and air before

letting it into a continuous clarifier, where the settling of the mud and other impurities takes

place. The clear juice is then sent to the evaporators for concentration. The muddy juice is

filtered in rotary vacuum filters and recycled back in to the process while impurities taken out

in the form of filter cakes are removed. The concentrated juice known as syrup is further

boiled until the sugar crystallizes. Lastly, the mixture of sugar crystals and the syrup is spun

in a centrifuge, which separates the sugar crystals (also called plantation white sugar) to

produce sugar and molasses. The sugar produced is dried, graded and packaged for storage

and marketing. Molasses, filter cake and bagasse (the fibrous residue leftover after crushing

sugarcane and extracting its juice), are by-products of sugar production process. The

molasses and filter cake are sold in the market to generate revenue.

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THE SUGAR MANUFACTURING PROCESS

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CURRENT SITUATION

Indian sugar mills faced a cane shortage in the 2008-09 sugar season (October 2008 to

September 2009) and suspended their crushing operation two–three months ahead of

schedule. The shortage emerged from farmers switching their crop pattern owing to lower

realizations during the previous sugar season and a yield decline from around 40 tonnes per

acre to 25-30 tonnes. As a result, India’s sugar production is likely to decline to 16.5 million

tonnes while consumption is expected to remain steady at 22–23 million tonnes.

Indian sugar prices surged to around Rs. 34–37 a kg. Owing to a slump in sugar

output, the government permitted the duty-free import of raw sugar till September 2009

without any re-export obligation. The result is that India is expected to be a sugar importer to

the extent of 2.5 million tonnes. The Union Government re-imposed the release order

mechanism for sugar exports and will fix the quantum of sugar that each mill can export

similar to controls placed on domestic monthly sales. The move to restrict exports under the

open general license comes in the wake of apprehensions of low sugar production in sugar

year 2008-09.

FACTORS DETERMINE SUGAR PRODUCTION IN INDIA:

Area under sugarcane production (Max. acreage of 4.43 million hectare)

Sugarcane yield per hectare (Max. yield of 71.3 tonnes per hectare)

The production of sugarcane that is crushed by sugar factories in relation to the total

Sugarcane produced (Max drawl percentage = 69%)

Recovery of sugar (Max recovery = 10.48%)

Factors pertaining to the climatic conditions and rainfall

Production of sugarcane in the country

Political factors

Technological changes resulting in development of new uses of sugar

Income of the consumer

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When all the above parameters are concurrently at the peak, India's sugar production

will aggregate to 22.85 million tonnes (multiply all the max figures). India's consumption of

sugar is expected to increase from 18.3 Kg per capita to a level of 23/24 kg per capita by

2010 and total demand to be of the order of 24.3 million tonnes. To achieve this level of

production, sugarcane needs to be cultivated on an area of about 5.5 million hectares with an

average yield of 65 tonnes per hectare but the increase in area of cultivation may not be

possible due to other competing crops. India has amongst the lowest sugar prices in the world

and if the farmers are not compensated adequately for their sugarcane produce they may not

switch to sugarcane.

Of the total sugar sold in the free market (non-levy), around 61% is accounted for by

the industrial and small business segments, also referred to as indirect consumption.

Household segment accounts for the rest 39%. Low income household account for 25% of

the total non-levy market.

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INDIAN SUGAR INDUSTRY – MAJOR PLAYERS

COMPANY SALES (RS MILLION)

CURRENT PRICE

MARKET CAP (RS

MILLION)

P/E RATIO

CHANGE (%)

SHREE RENUKA SUGAR

22342.17 67.90 45445.93 9.09 -1.09

EID PARRY 7852.40 413.10 34904.78 17.00 1.90

TRIVENI ENGG 18948.06 100.80 25968.53 13.26 -0.25

BALRAMPURCHINI MILL

1700.44 82.85 21432.59 10.06 0.06

BANNA AMMAN SUGARS

6948.26 886.00 10124.13 7.05 -0.09

KCP SUGARS 1832.35 19.65 2176.99 9.17 1.03

EMPEE SUGARS 464.70 48.85 2054.57 221.78 -0.10

SHAKTI SUGARS 13747.12 55 2039.13 1.57 -1.08

RANA SUGARS 1968.16 12.59 1835.97 3.99 -1.10

UGAR SUGAR WORKS

4097.98 15.50 1748.25 0.00 0.91

VENUS SUGAR 501.22 2.95 119.18 0.00 -5.45

VISHNU SUGAR 574.52 1124.30 269.83 21.96 0.00

JK SUGAR 1219.75 22.60 199.29 0.00 -3.42

KM SUGAR 1511.18 5.14 478.40 117.89 -1.15

PONNI SUGARS 1365.21 110.00 919.60 2.50 4.07

SBEC SUGAR 2894.66 15 714.81 13.60 1.35

GMR INCLUSIVE 2037.53 130.80 2576.06 0.00 0.04

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PEST ANALYSIS

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and

describes a framework of macro environmental factors used in the environmental scanning

component of strategic management. It is a part of the external analysis when conducting a

strategic analysis or doing market research and gives a certain overview of the different

macro environmental factors that the company has to take into consideration. It is a useful

strategic tool for understanding market growth or decline, business position, potential and

direction for operations.

Political factors include areas such as tax policy, employment laws, environmental

regulations, trade restrictions and tariffs and political stability.

Economic factors are economic growth, interest rates, exchange rates and inflation

rate.

Social factors often look at the cultural aspects and include health consciousness,

population growth rate, age distribution, career attitudes and emphasis on safety.

Technological factors include ecological and environmental aspects and can

determine barriers to entry, minimum efficient production level and influence

outsourcing decisions. Technological factors look at elements such as R&D activity,

automation, technology incentives and the rate of technological change.

Identifying PEST influences is a useful way of summarising the external environment in

which a business operates. However, it must be followed up by consideration of how a

business should respond to these influences.

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Political / Legal Economic Social Technological

- Environmental regulation and protection

- Economic growth (overall; by industry sector)

- Income distribution (change in distribution of disposable income;

- Government spending on research

- Taxation (corporate; consumer)

- Monetary policy (interest rates)

- Demographics (age structure of the population; gender; family size and composition; changing nature of occupations)

- Government and industry focus on technological effort

- International trade regulation

- Government spending (overall level; specific spending priorities)

- Labour / social mobility

- New discoveries and development

- Consumer protection - Policy towards unemployment (minimum wage, unemployment benefits, grants)

- Lifestyle changes (e.g. Home working, single households)

- Speed of technology transfer

- Employment law - Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates)

- Attitudes to work and leisure

- Rates of technological obsolescence

- Government organisation / attitude

- Exchange rates (effects on demand by overseas customers; effect on cost of imported components)

- Education - Energy use and costs

- Competition regulation - Inflation (effect on costs and selling prices)

- Fashions and fads - Changes in material sciences

- Stage of the business cycle (effect on short-term business performance)

- Health & welfare - Impact of changes in Information technology

POLITICAL ASPECTS:

Sugar plant is deemed to be manufacturing activity for the purpose of incentives for

the industry in line with the approved policy of Government of India.

All sugar plants are entitled to "Industry" status. Such units are eligible for all

concessions and incentives applicable to Industries.

The State Government encourages flow of investments including FDI and provides

full support wherever required. The State Government can offer customized package

of incentives for prestigious investment proposals i.e. projects where total investments

are more than Rs. 10 Crore.

State Financial Institutions and the Banks, in line with the approved policy of

Government of India; treat sugar plants as priority sector.

ECONOMICAL ASPECTS:

Sugar sector uses low cost highly skilled human resources in which India enjoys

internationally competitive advantage.

It should be emphasized that the internal strengths of Indian sugar industry principally

comes from domestic entrepreneurship and domestic capabilities.

The impact of WTO and need for free trade areas can be observed by the fact that

Indian firms have established operations in countries like USA and Brazil.

SOCIO CULTURAL ISSUES:

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Expansion of sugar development centres abroad by Indian sugar firms is very limited

and is mostly driven by labour costs.

Indian sugar firms are used to intense competition in global markets. Most companies

compete only on price and have gained reputation as price warriors.

Indian managers do not consider the need to customize software solutions for a

foreign country to be a major impediment for global expansion.

TECHNOLOGICAL ASPECTS:

Export of sugar and related services is heavily dependent on transport infrastructure.

Modern advances in technology and transport media have a revolutionary change in

the scenario. Latest chemical analysis and their properties forced the industry to keep

them updated.

The universal nature of Internet and satellite communication capability provided by

Indian government has mitigated the importance of telecommunication infrastructure.

Also to organize global fests like Olympics there is demand of a very good

infrastructure, thus technology matters.

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PORTER’S 5 FORCES ANALYSIS

Porter's 5 Forces analysis focuses on the external factors of the industry. The original

competitive forces model, as proposed by Porter, identified five forces which would impact

on an organization’s behavior in a competitive market. These include the following:

The rivalry between existing sellers in the market.

The power exerted by the customers in the market.

The impact of the suppliers on the sellers.

The potential threat of new sellers entering the market.

The threat of substitute products becoming available in the market

.

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Force 1: The Degree of Rivalry

There are many companies which are into the business of producing and distributing

sugar and there is heavy competition with them in terms of grapping the market share . There

is no substitute product of sugar due to which this industry has no rivalry with other

industries but in between its own community is has many rivals.

The Indian sugar industry faces dramatic changes, challenges, and constraints as it

uses the global delivery model to transform itself into a knowledge leader competing

with established global giants.

Since rival firms often hire managers and engineers professionals who have

experience working at established firms, the labor cost for Indian firms is expected to

increase as they compete to retain talent. Unless the Indian educational system can

produce a large number of high-quality new graduates to meet the demand for

engineers, there will be a gradual movement of work to other emerging industries.

Force 2: The Threat of Entry

New entrants to an industry can raise the level of competition, which may cause in

reducing its attractiveness. The threat of new entrants largely depends on the barriers to entry.

In sugar industry it is easy to enter but talking about Products it is tough because it depend on

the reliability of customer. Key barriers to entry include

In industry Economies of scale is very slow because it take time to increases customer

loyalty and whole growth is depend on that only.

For new entrant it very big challenge for them to establish business because it require

huge amount of capital and investment.

In sugar sector distribution play major role, without that it is not possible for publisher

to reach customer so; it’s also a problem to new entrants.

In today’s scenario sugar manufacturing is a profitable business and many new companies

are attracted to enter into this business. Then also there is no threat to the existing companies

as they have been identified by their performance and services they provide to the customers.

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Force 3: The Threat of Substitutes

The presence of substitute products in sugar industry can lower industry attractiveness and

profitability because they limit price levels. The threat of substitute products depends on:

In sugar sector once competitor got customer reliability then it’s difficult to divert

customer mind.

In sugar industry price plays major role and it’s totally depend on market price i.e. is

fixed by government. The relative price and performance of substitutes.

Empee sugars & chemicals ltd. is into sugar manufacturing business where there is no

substitute product so the threat of substitute is not possible for this industry.

Force 4: Buyer Power

The most important determinants of buyer power are the size and the concentration of

customers. Sugar industry has expanded their production to a large extent by their

performance due to which they are able to satisfy the ultimate customers by providing the

services.

Brand loyalty is a negligible factor in the software industry mostly due to the concept

of customized business solutions.

But however there is the advantage of bulk orders being processed due to the fact that

most of the firms cater to business to business prospects only.

The reputation and the size of the firm also plays an important role in the choice of

clients.

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Force 5: Supplier Power

Suppliers are the businesses that supply materials & other products into the industry.

The cost of items bought from suppliers (e.g. raw materials, components) can have a

significant impact on a company's profitability. If suppliers have high bargaining power over a

company, then in theory the company's industry is less attractive. The bargaining power of

suppliers will be high when:

In this industry, sugar cane rate is fixed by the government so bargaining power over

a company is not much this factor may attract to new entrant in industry.

The industry is not a key customer group to the suppliers but sugar manufacturing

industry is the key customer to the supplier because for suppliers other buyers are

few.

Almost all sugar company supplies sugar on their own so there is no supplier power

which can affect their business.

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SCOPE OF THE STUDY:

Organizational Functioning is an important factor for any Organization to achieve the

desired goals and Objectives. This requires Co-ordination at all levels to smooth functioning.

This study is to know the overall efficiency and performance of sugarcane Industries and a

general study on Empee Sugars and Chemicals Limited.

As a part of two year MBA program at the end of 1st year, we had to carry on a project

in an organization in order to understand the organization structure and their functions. This

was a great opportunity to get the first hand information and understand the functioning of the

various departments

OBJECTIVES OF THE STUDY:

The following are the objectives of the study

To know the Key Players in the Industry

To know the Business Level Functions & Process of the Organization

To know the Company Profile

To do SWOT Analysis, PEST Analysis etc. of the Company

To learn about the Organizational Culture, Values, Benefits in a Practical way

To get an exposure to the different functions of the Organization and understand

how they are performed and coordinated.

To relate various concepts studied in the first term to a real Organizational

environment

To learn about convincing people and how to extract what we want

To make contacts with the industrial people and maintain it.

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LIMITATIONS OF THE STUDY:

The following are the limitations of the study,

As we had a limitation of time, the detailed report about the operations of the

organization was not possible.

The information given by the persons may not be complete because of their busy

work schedules

The report suffers from the limitation of meeting only the departmental heads

because of lack of permission to interact with other people.

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CHAPTER II

____________________________________________

COMPANY PROFILE

Background & History

location

vision , mission & Philosophy

SWOT Analysis

Products & Market

Balance Score Card

organization structure

organization design

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BACKGROUND & HISTORY

The saga of Empee Group has been one of perseverance and hard work in pursuit of

quality and excellence. Founded over 40 years ago, the Empee Group has grown in stature,

diversifying its operational areas and size.

Since its inception in early 70’s the Group has risen to be one of the leading

conglomerates in the southern part of the country. The credit goes in entirety to the undying

spirit and farsighted vision of its founder-chairman, Mr. M P Purushothaman. Today, the

Empee Group encompasses all business related to Hotels, Liquor, Sugar, Power, Packaging,

Transport, Construction and Exports.

The history of Empee began way back in early 1970’s when a small restaurant was

started and by mid seventies acquired the erstwhile Hotel Madras International now known as

Hotel Grand Orient and Hotel New Victoria thus establishing in the Hotel business.

Empee Group diversified into the business of manufacturing liquor in Chennai by

establishing its first distillery in Mevaloorkuppam in 1984. It further progressed to Alcobev

business with the acquisition of a brewery license in 1987. Perceiving the rapid growth of

alcohol market in Karnataka, Empee had acquired a distillery unit in 2003 from the Alembic

group in Whitefield, Bangalore.

As a step further in diversifying its business activities by backward integrating, a

sugar factory was established in 1991 in Nayudupet, Nellore District of Andhra Pradesh.

In 1994, the Industrial Alcohol Plant was added to the sugar factory making it a

complete sugar complex.

In 1996, emboldened by the success in distilling & marketing liquor in Chennai,

Empee Group established another unit in Palakkad, Kerala to meet the local demand.

Since Empee was diversifying into different sectors of business, the need to have a

centralized control to coordinate various operations was necessary. As a result a corporate

office was established in 2000 at 'Empee Towers' in Egmore, Chennai.

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Over the years to support the growth, Empee group had entered into packaging

business, cargo transport, and travels – this as a support for its growing hospitality & Alcohol

business. The group has lately added another feather to its glorious past by entering into the

realm of producing non-conventional power generation; promoting and tapping non-

conventional energy by introducing wind propelled electric generators in Coimbatore,

Tamilnadu.

Following the glorious success, Empee Group has been licensed to set up a co-

generation power plant adjacent to the sugar mill complex. As a mark of the Empee Group’s

commitment to non-conventional energy generation the plant is suitably devised to use

biomass in addition to bagasse as fuel for electric power generation. Power generated by

these units will be fed into the state grid or made available to the private sector.

EMPEE – THE MAN

Empee Group, started its operations in the early

70's, has grown to be a Conglomerate. A reflection no

doubt, of the commitment instilled through Mr. MP

Purushothaman's passion for learning through

experience.

Mr. M P Purushothaman, Chairman of

EMPEE GROUP, has over 40 years of rich business

experience, honed to perfection in the hard school of

life.

He began his business life in an earnest way at a very young age and soon associated

himself with the Hotel Industry before starting other ventures. His undoubting courage and

vision saw him establish several business ventures in all the Southern States of India.

Affectionately known as “EMPEE”, he is meticulously careful in choosing areas of activities

and setting strategies and goals that are carrying the Companies to great success.

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On a personal level Mr. MP Purushothaman is equally well known for his charitable

and philanthropic contribution to society. He founded an educational and charitable trust,

which manages the catering institute with foreign affiliation. Even while presiding over the

destiny of numerous Companies, he finds enough time and energy for the promotion and

growth of socio-economic and cultural activities. For the past several years, he has been

donning the mantle of President of Federation of All India Marunadan Malayalees

Associations and the Confederation of Tamil Nadu Malayalees Associations (CTMA), in

which capacity he has been rendering yeomen service for the redressal and amelioration of

Malaya lees residing outside Kerala.

His unstinted service and contribution to the Hospitality Industry has taken him to the

pinnacle of President of Federation of Hotels & Restaurants Association of India and during

his tenure as President, his contribution for the growth of the Industry has been substantial.

He had also served as President of Tamil Nadu Hotels & Restaurants Association for a record

unbroken period of 16 years and the vital role he played during this period has made his zone

a flag bearer for others to follow. He had also assumed the mantle of President of South India

Hotels and Restaurants Association and the services rendered by him in this capacity is a

mile-stone in the 50 years history of the Association.

In his relentless pursuit of his vision, he continues to explore and conquer new

frontiers and take the Group to new peaks.

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HISTORY OF COMPANY

In 1992, the Empee Group diversified its business interests and this led to the set up

of a Sugar Mill in Andhra Pradesh. The Naidu pet Mandal in Nellore District was the chosen

site and the development it has bought to this once dry land is an incredible success story in

itself. Farmers in the region now have a steady cash crop in sugarcane and a host of allied

industries have sprung up in and around the region. The fore runner to all this change, the

Empee sugar factory was subsequently expanded into a huge complex with additional

facilities for manufacturing Rectified Spirit, Extra Neutral Spirit, Bio-mass Fertilizer etc. It

also has a captive power plant generating power for consumption.

Empee Group started a sugar mill in the state of Andhra Pradesh in 1992 with a vision

focusing on consumer commodities and it was very shortly expanded into a huge complex

with additional facilities for manufacturing rectified spirit, extra neutral spirit, bio-mass

fertilizer, etc. Empee Sugars and Chemicals also have a captive power plant generating power

for captive consumption.

The sugar unit with a capacity of 2500 TCD per day can crush upto 3500 MTs of cane

per day. Plans are on the anvil to enhance the capacity by 5,000 TCD. The sugar mill has tied

up cane area of over 15,000 acres. Perennial water ensures regular supply of cane to the mill.

The sugar mill has a cane command area of over 1, 00,000 acres with a perennial

water supply ensuring regular supply of cane to the mill. Every allied produce from the sugar

mill is renewed into resources for a range of other industries and products. In pursuit of the

group's expansion activities, a sugar plant is being planned in state of Tamilnadu with a cane

crushing capacity of 5000 TCD expandable to 8000 TCD along with 50 MW cogeneration

power plants and 100 KLPD Ethanol plant.

For captive consumption of molasses in 1994, an industrial alcohol plant with a

capacity of 30,000 litres per day was established with a capacity to turn out 20,000 liters of

extra neutral alcohol as well. This is being now upgraded to produce 60000 liters per day. To

meet the demand for Ethanol a 30,000 liters per day. A state-of-the-art ethanol plant is also

being set up.

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Empee  started over two decades ago in a small way in Chennai, for manufacturing

Indian Made Foreign Liquor, has now expanded substantially with state-of-art manufacturing

facilities not only in Tamil Nadu but also in Kerala, Karnataka and Andhra Pradesh. The

distinction of having manufacturing facilities in all the southern states is unique, which few

National players can boast of.

The bio fertilizer plant attached to the alcohol plant caters to the needs of the cane

growers at subsidized rates. The sugar mill also takes care of the water needs of nearby

farmers by supplying quality water out of treated effluent.

The Empee Group, started its operations in the early 70's, has grown to be a

conglomerate. A reflection no doubt, of the commitment instilled through MP

Purushothaman's passion for learning through experience.

The Empee Group has diversified it’s business into hotels, liquor, sugar, power,

packaging, transport, construction and exports.  The company is an ISO 9001: 2000

certified company.

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LOCATION

Empee sugars and chemicals limited is a Private Sector Organisation. The Group's

principal activity is to manufacture sugar, alcohol and allied products. It operates in two

segments: Sugar and Industrial Alcohol Plant. The products include cane sugar, spirit, alcohol

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EMPEE SUGARS AND CHEMICALS LIMITEDIndustry : food processing - sugar BSE Code : 500132

House     : Chennai

Incorporation Year 1988

Registered Office

Empee Tower No. 59 Harris Road Pudupet

Chennai : 600002

Tamil Nadu ,India

Telephone (44) 28522510, 28413151

Fax (91) 0861 48171, 48172

Chairman M P Purushothaman

Managing Director M P Purushothaman

Company Secretary S S K Swarup

Auditor R Rajagopalan

Face Value 10

Listing BSE

Registrar

M/s Cameo Corporate Services Limited,

(1, Subramanian Building, Club House Road

Chennai-600 002

Chairman & Managing Director M P Purushothaman

Vice President G V Ramana

Director K Jayachandran

Joint Managing Director Sheeju Purushothaman

DirectorShankar Menon

M P Mehrotra

Company Secretary S S K Swarup

and allied products. The Group's plants are located at Nellore district of Andhra Pradesh and

Tirunelveli district of Tamil Nadu.

EMPEE SUGARS AND CHEMICALS HEAD OFFICE ADDRESS:

Empee Tower No. 59 Harris Road Pudupet Chennai: 600002 Tamil Nadu,India .

CORPORATE ADDRESS:

Ayyapareddipalem Village,

Naidupet ,

Nellore-524126,

Andhra Pradesh.www.empeegroup.co.in

MOLASSES PLANT

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SUGAR PRDUCTION PLANT

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VISION

To register a strong consumer surplus through a superior sugar quality at affordable

prices.

MISSION

To sustain its reputation as the most efficient sugar producer in the country.

To drive down costs through innovative plant practices.

To increase the awareness of superior product quality through a realistic and

convincing communication process with consumers.

To strengthen realisations through intelligent brand building.

P

HIOLOSOPHY

Let noble thoughts come to us from all over the world.

Rig-Veda.

Empee Sugars And Chemicals Limited is a professionally managed company. The

company always believes in complete transparency and discharge of the fiduciary

responsibilities which has been assumed by Directors as well as by the Senior Management

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Executives and/or Staff. Therefore in order to ensure the continuity thereof though, not

written but otherwise ingrained, the Board of Directors has approved of the following Code

of Conduct for all Directors as well as for the Senior Management Executive and/or

personnel and other employees.

All the Directors as well as Senior Management Executive and/or Personnel owe to

the Company as well as to the shareholders :

i)   "Fiduciary duty"

ii)  “Duty of skill and care”

iii)  “Social responsibility”

With the above objects in mind the following code of conduct has been evolved and it

is expected that all Directors as well as Senior Management Executives and/or personnel will

adhere to it.

FIDUCIARY DUTIES

All Directors as well as Senior Management Executives and/or personnel while

dealing on behalf of the company will exercise the power conferred upon him / them and

fulfill his / their duties honestly and in the best interest of the company.

DUTY TO EXERCISE POWER FOR PROPER PURPOSES

The Board from time to time shall determine the powers to be exercised by the

Directors as well as the Senior Management Executives and/or Personnel and all such powers

shall be exercised reasonably.

CONFLICT OF INTEREST

None of the Directors and/or Senior Management Executives and/or personnel will

put himself in a position where there is potential conflict of interest between personal interest

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and his duty to the company. None of the Directors and/or Senior Management Executive

and/or personnel will exploit an opportunity arising while associated with the Company for

his personal gain either directly or indirectly.

SECRET PROFITS

The Director as well as Senior Management Executives and/or personnel while discharging

their duties in a fiduciary capacity is precluded from making any personal profit from an

opportunity which may arise being a Director and / or Senior Management Executive of the

Company and should always ensure that he is acting for and on behalf and for the good of the

Company.

DUTY OF SKILL AND CARE

Since all the Directors as well as Senior Management Executives and / or personnel

are acting in a fiduciary capacity and for the benefit of the company, being advocates of the

business of the Company, none of them will do anything which is in conflict with the interest

of the company.

ATTENTION TO BUSINESS

All Directors as well as Senior Management Executives and/or personnel will give

proper attention to the business of the company.

SECRECY AND CONFIDENTIALITY

None of the Directors as well as Senior Management Executives and/or personnel

while associated or working for the company will be entitled to disclose either directly or

indirectly or make use of the confidential information which may come in their possession

while acting on behalf of the company and shall not divulge the financial status and position

of the company to any person or persons.

INTERNAL TRADING

None of the Directors as well as Senior Management Executives and/or personnel will

directly or indirectly in the name of his family members and/or associates will indulge in any

31

internal trading of the company’s shares and stocks.

RISK AND PROPER PROCESS

The Senior Management personnel and/or employees are expected to keep the

Directors fully informed about the effect of the policies adopted by the company from time to

time and also regarding the risk connected with such policies.

Senior Management personnel and/or staff who have been entrusted with specific

duties for ensuring compliance of statutory requirements including the rules and regulations

shall forthwith comply with the same and keep the Board of directors fully informed about

such compliance or non-compliance.

Senior Management personnel will from time to time provide or cause to be provided

a true and faithful account of the company’s working and effectiveness of the procedures

adopted by the company from time to time.

All Directors as well as Senior Management Executives and/or personnel are aware

that while working with the company they have a social responsibility as well and therefore

from time to time will devote such time for the upliftment of the downtrodden, poor and

needy persons in the locality.

SUCCESS DRIVER

PEOPLE AS PROGRESS DRIVERS

Empee group believes that what is present in the minds of people is more valuable

than the assets on the shop floor. All the company’s initiatives are directed to leverage the

value of this growing asset.

TEAMWORK

Empee group leverages effective team working to generate a sustainable

improvement.

LEADERS AT EVERY LEVEL

32

Empee group believes in creating leaders -not just at the organizational apex but at

every level, resulting in a strong sense of emotional ownership.

CULTURE OF INNOVATION

Empee group believes that what is good can be made better -across the organization.

CUSTOMER FOCUS

Empee group is committed to deliver a superior quality of sugar at attractively

affordable prices.

SHAREHOLDER VALUE

Empee group is focused on the enhancement of value through a number of strategic

and business initiatives that generate larger and a better quality of earnings.

COMMUNITY AND ENVIRONMENT

Empee group community concern extends from direct assistance to safe and

dependable operations for its members and the environment

SWOT ANALYSIS 33

Strength and weaknesses are essentially internal to the organization and relate to the

matter concerning resources, programmes and organization in key areas such as

Sales

Marketing

Capacity

Manufacturing cost etc

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

following areas

Size & Segmentation

Growth pattern and maturity

International dimensions

Relative attractive of segments

New Technologies etc

STRENGTHS

Company has its own electricity production unit thus need not to depend on the

availability of power n dependency on electricity department.

Well transport facility, near to national highway..

Maintain a very good customer loyalty and relationship.

A very superior production quality thus customer is always satisfied.

Upper level of management is too skillful.

WEAKNESS

Very less advertising thus in other part of country its not as popular.

Technical knowledge is less at lower level of employee, which is draw back for

achieving maximum profit.

It’s difficult for them to change to an alternate line of production with existing

machinery.

OPPORTUNITIES

34

Potential to enhance sugar production and sugar recovery rate

Transition from an adverse sugar cycle to a favorable sugar cycle

A growing population (growing at nearly 1.6%) and consumption are poised to

graduate India into the world’s largest sugar producer

Increasing demand for high-value by-products such as exportable power through

bagasse and fuel ethanol

Significant technological up gradation will enhance yield and recovery

THREATS

Advancement in technology.

Entry of new player.

Change in government policy as they may increase the tax.

Non availability on raw material.

Labour and higher technical personnel may switch to another plants.

PRODUCTS

35

PRODUCT: SUGAR

Sugars are a major form of carbohydrates and are found probably in all green plants

they occur in significant amounts in most fruits and vegetables there are three main simple

sugars sucrose, fructose, glucose, sucrose is in fact a combination of fructose and glucose and

the body quickly breaks down into these separate substances

THE NEED FOR ENERGY

All energy stored in food is derived originally from the sun and it is made by green

plant life. The sun's energy acts upon the green chemical "chlorophyll" in the leaves of plants

to produce sugars and Starches from the carbon-dioxide in the atmosphere and the water from

the roots by a process known as Photosynthesis .These carbohydrates (starches and sugar)

acts as a plants food and energy supply. .The Energy need of human body is largely

dependent on the carbohydrates that are derived from plants.

A BALANCE DIET

A balanced diet can (and should) come from a variety of different foods ,calculated to

give the desired levels of carbohydrates ,proteins, fats, vitamins, and minerals .Nutritional

scientists advocate that carbohydrates should provide at least 50% of over energy

requirements .

SUGARS ROLE

Starches provide the large part of our carbohydrate needs .The sugar which nature

provides alongside the starches in our food supply have also a very special role to play in

human metabolism for primitive man the sweet taste probably acted as a signal that the food

was safe to eat .For modern man sugar is used to improve the palatability of many foods and

can thereby encourage a more varied diet.

THE USE OF SUGAR IN FOODS

36

Sucrose is a natural and economical sweetener .It is the most versatile of all the

sweeteners, performing many useful functions in a range of foods - As a sweetener. - Acting

as a preservative. - Enhancing flavor in foods. - Providing bulk and texture in ice cream,

custard, baked goods and confectionary. - Acting as a food for yeast in baking and brewing

beer and cider. - Contributing to crust color, and flavor and delaying staleness in cakes and

biscuits.

Product Name Year Month Sales Quantity Sales Value (Rs.Million) % of STO

Sugar 2010 03 12915.00 306.28 64.24

PRODUCT: EXTRA NEUTRAL ALCOHOL

Neutral alcohol is used for the production of white spirit such as gin and vodka but

also as a base for a wide range of flavoured alcoholic beverages. The production of neutral

alcohol from malt, grape, apple or sugar has considerably increased over the last few years

there may be local alcohol taxation advantages.

Indian Extra Neutral Alcohol (ENA) Min. 96% Purity made from Sugar Cane Molasses

(Food Grade), which is being used in manufacturing of Liquor such as Whisky, Vodka, Rum,

Medicine, Pharmaceutical, Cosmetic Products etc.

TECHNICAL SPECIFICATIONS OF EXTRA NEUTRAL ALCOHOL:

1. Relative density at 15o / 15oC: 0.81245 to 0.81679

2. Ethanol content, percent by volume at 15.6oC: 94 to 96

3. Miscibility with water: Miscible

4. Alkalinity: Nil

5. Acidity (as CH3COOH), g/100ml: Max 0.002

6. Residue on evaporation, g/100ml: Max 0.002

7. Esters (as CH3 COOC2H5), g per 100 ml,: Max 0.01

8. Lead (os Pb), g per 100ml, : Max Nil

9. Methyl alcohol content: To pass test

10. Furfural content: To pass test

11. Aldehydes (as CH3 CHO), g/100 ml, : Max 0.004

37

12. Permanganate reaction time, min., : Min 30

13. Copper (as Cu), g/100 ml, : Max 0.0002

14. Isopropyl alcohol, acetone and other ketones

Product Name Year Month Sales Quantity Sales Value (Rs.Million) % of STO

Extra Neutral Alcohol 2010 03 4727179.00 167.16 35.06

QUALITY INITIATIVES

Empee sugars and chemicals limited possess one of the few R&D centre’s in the

Indian sugar industry. This center has been recognized by the DSIR, Government of India.

The research team is headed by a highly qualified and experienced scientist. Empee group

R&D center has directly contributed in the conservation of electrical and thermal energy, an

improvement in product quality, cost reduction..

Computer Aided Planning System

Stacker-Reclaimed for homogenization of lime stone

On-Line Sampling System by Auto Samplers

Roller Press Control & High Efficiency Separator for particle size distribution

Packing by Automatic Electronic Packers

THE BALANCE SCORE CARD APPROACH

38

The Balanced Scorecard (BSC) is a performance management tool which began as a

concept for measuring whether the smaller-scale operational activities of a company are

aligned with its larger-scale objectives in terms of vision and strategy. The Balanced

Scorecard helps the organization to act in their best long-term interests. It was introduced by

Robert S. Kaplan and David P. Norton in 1992.The Balanced Scorecard provides managers

with the instrumentation they need to navigate to future competitive success.

The Balanced Scorecards includes four processes:

1. Translating the vision into operational goals;

2. Communicating the vision and link it to individual performance;

3. Business planning;

4. Feedback and learning, and adjusting the strategy accordingly.

Kaplan and Norton found that companies are using Balanced Scorecards to:

Drive strategy execution;

Clarify strategy and make strategy operational;

Identify and align strategic initiatives;

Link budget with strategy;

Align the organization with strategy;

Conduct periodic strategic performance reviews to learn about and improve strategy.

The Four Perspectives

The grouping of performance measures in general categories (perspectives) is seen to aid in

the gathering and selection of the appropriate performance measures for the enterprise. Four

general perspectives have been proposed by the Balanced Scorecard:

Financial Perspective;

Customer Perspective;

Internal process Perspective;

Innovation & Learning Perspective.

The financial perspective examines the company’s implementation and execution of

its strategy is contributing to the bottom-line improvement of the company. The three stages

are rapid growth, sustain and harvest. Financial objectives and measures for the growth stage

39

will stem from the development and growth of the organization which will lead to increased

sales volumes, acquisition of new customers, and growth in revenues.

The customer perspective defines the value proposition that the organization will

apply in order to satisfy customers and thus generate more sales.

The internal process perspective is concerned with the processes that create and

deliver the customer value proposition. It focuses on all the activities and key processes

required in order for the company to excel at providing the value expected by the customers

both productively and efficiently. The internal process perspective are operations

management (by improving asset utilization, supply chain management, etc), customer

management (by expanding and deepening relations), innovation (by new products and

services) and regulatory & social (by establishing good relations with the external

stakeholders).

The Innovation & Learning Perspective is concerned with the jobs (human capital),

the systems (information capital), and the climate (organization capital) of the enterprise.

These three factors relate to what Kaplan and Norton claim is the infrastructure that is needed

in order to enable ambitious objectives in the other three perspectives to be achieved.

Note

The company Empee sugars and chemicals limited do not follow the balance score card approach.

ORGANIZATION STRUCTURE

40

\

ORGANIZATION DESIGN

41

CHAIRMAN {M P Purushothaman}

EXECUTIVE DIRECTOR { Nisha Purushothaman}

M K Mohan

M P Mehrotraa

T S Raghava

Shankar Menon

MANAGING DIRECTOR {M P Purushothaman}

BOARD OF DIRECTORS

Organization Design is a formal, guided process for integrating the people,

information and technology of an organization. It is used to match the form of the

organization as closely as possible to the purpose(s) the organization seeks to achieve.

Through the design process, organizations act to improve the probability that the collective

efforts of members will be successful.

Typically, design is approached as an internal change under the guidance of an

external facilitator. Managers and members work together to define the needs of the

organization then create systems to meet those needs most effectively. The facilitator assures

that a systematic process is followed and encourages creative thinking.

HIERARCHICAL SYSTEMS

Western organizations have been heavily influenced by the command and control

structure of ancient military organizations, and by the turn of the century introduction of

Scientific Management. Most organizations today are designed as a bureaucracy in whom

authority and responsibility are arranged in a hierarchy. Within the hierarchy rules, policies,

and procedures are uniformly and impersonally applied to exert control over member

behaviors. Activity is organized within sub-units (bureaus, or departments) in which people

perform specialized functions such as manufacturing, sales, or accounting. People who

perform similar tasks are clustered together.

The same basic organizational form is assumed to be appropriate for any organization,

be it a government, school, business, church, or fraternity. It is familiar, predictable, and

rational. It is what comes immediately to mind when we discover that ...we really have to get

organized!

As familiar and rational as the functional hierarchy may be, there are distinct

disadvantages to blindly applying the same form of organization to all purposeful groups. To

understand the problem, begin by observing that different groups wish to achieve different

outcomes. Second, observe that different groups have different members, and that each group

possesses a different culture. These differences in desired outcomes, and in people, should

alert us to the danger of assuming there is any single best way of organizing. To be complete,

however, also observe that different groups will likely choose different methods through

which they will achieve their purpose. Service groups will choose different methods than

42

manufacturing groups, and both will choose different methods than groups whose purpose is

primarily social. One structure cannot possibly fit all.

ORGANIZING ON PURPOSE

The purpose for which a group exists should be the foundation for everything its

members do — including the choice of an appropriate way to organize. The idea is to create a

way of organizing that best suits the purpose to be accomplished, regardless of the way in

which other, dissimilar groups are organized.

Only when there are close similarities in desired outcomes, culture, and methods

should the basic form of one organization is applied to another. And even then, only with

careful fine tuning. The danger is that the patterns of activity that help one group to be

successful may be dysfunctional for another group, and actually inhibit group effectiveness.

To optimize effectiveness, the form of organization must be matched to the purpose it seeks

to achieve.

The Design Process

Organization design begins with the creation of a strategy — a set of decision

guidelines by which members will choose appropriate actions. The strategy is derived from

clear, concise statements of purpose, and vision, and from the organization’s basic

philosophy. Strategy unifies the intent of the organization and focuses members toward

actions designed to accomplish desired outcomes. The strategy encourages actions that

support the purpose and discourages those that do not.

Creating a strategy is planning, not organizing. To organize we must connect people

with each other in meaningful and purposeful ways. Further, we must connect people with the

information and technology necessary for them to be successful. Organization structure

defines the formal relationships among people and specifies both their roles and their

responsibilities. Administrative systems govern the organization through guidelines,

procedures and policies. Information and technology define the process (es) through which

members achieve outcomes. Each element must support each of the others and together they

must support the organization’s purpose.

43

EXERCISING CHOICE

Organizations are an invention of man. They are contrived social systems through

which groups seek to exert influence or achieve a stated purpose. People choose to organize

when they recognize that by acting alone they are limited in their ability to achieve. We sense

that by acting in concert we may overcome our individual limitations.

When we organize we seek to direct, or pattern, the activities of a group of people

toward a common outcome. How this pattern is designed and implemented greatly influences

effectiveness. Patterns of activity that are complementary and interdependent are more likely

to result in the achievement of intended outcomes. In contrast, activity patterns that are

unrelated and independent are more likely to produce unpredictable and often unintended

results.

The process of organization design matches people, information, and technology to

the purpose, vision, and strategy of the organization. Structure is designed to enhance

communication and information flow among people. Systems are designed to encourage

individual responsibility and decision making. Technology is used to enhance human

capabilities to accomplish meaningful work. The end product is an integrated system of

people and resources, tailored to the specific direction of the organization.

44

CHAPTER III

____________________________________________

BUSINESS LEVEL FUNCTION AND PROCESS

MARKETING FUNCTION

HR FUNCTION

OPERATION & QUALITY FUNCTION

FINANCE FUNCTION

THE MARKETING FUNCTION 45

The advent of globalization has brought marketing to the forefront of all the business

activities. Increased competition has resulted in a customer driven market with ever rising

consumer expectations. At Empee group, marketing is not merely identified innovative

measures to sell its products, but to proactively gauge their changing needs and produce

accordingly.

Indian sugar industry clocked an impressive growth during FY 08-09. As against it,

Empee group registered a growth in sales volume. Net sales value showed rise.

MARKET SHARE

Empee group strategy of quality advertising combined with active field marketing

helped it increase its market share in south India. Company maintained its leadership position

in the key market of Andhra Pradesh and Tamilnadu. Company increased its market share in

south India.

Our focuses on increasing marketing share in areas which are closer to their plants

offer them the advantage of low radius. The strategy benefited them in significantly

increasing their market share in the nearer markets of Andhra Pradesh and Tamilnadu. Going

forward they aim to further consolidate and increase our presence to attain the leadership

mantle in the entire south Indian market.

RICH DIVIDENDS FROM MULTIPLE BRANDS STRATEGY

Empee group strategy of multiple competing brands paid rich dividends in term of

achieving deeper market penetration, distinct customer segment, improved brand equity and

overall increase market share in south India. Empee group was able to acquire newer market

and extend its domination to the existing market. Increased growth indicates empee group

superior preparedness to tap the emerging business opportunity.

STRENGTHENING DISTRIBUTION NETWORK

46

Company has been marketing significant investment in strengthening marketing

expertise and creating execution excellence to enhance customer servicing. Multiple brand

strategy adopted by the company build a large network of dealers & retailers and other

marketing infrastructure.

The sales force was suitably assisted by quality advertising and sales promotions

activities. TV commercials, hoardings as well as print media were used to create and brand

awareness. Total advertising spending was increased. Company’s multiple efforts towards

marketing excellence have resulted in the trade sales increase.

INSTITUTIONAL SALES

The institutional sales segment witnessed increased demand due to heightened

activities in infrastructure and commercial real estate such as multiplexes, malls, IT office

space etc. Considering the high demand potential of this segment, they stepped up their

efforts to increase sales, to institutional customer. The results were encouraging as the

institutional sales witnessed a massive rise during the year. They were able to acquire quality

conscious and prestigious customer.

HUMAN RESOURCE FUNCTIONS

HUMAN RESOURCE POLICY

47

At Empee Sugars and Chemicals limited are committed to

Empower people

Honour individuality of every employee.

Non discrimination in recruitment process.

Develop Competency.

Employees shall be given enough opportunity for Betterment.

None of the person below the age of 18 years shall be engaged to work.

Incidence of sexual Harassment shall be viewed seriously.

Statute enacted shall be honoured in letter & sprit & standard labour practices shall be

followed. Every employee shall be accountable to the law of the land & is expected to

follow the same without any deviation.

Management will appreciate observance of Business ethics & professional code of

conduct.

To follow safety & Health, Quality, environment, Energy Policy.

EMPOWERING PEOPLE

At EMPEE group they consider their people as their greatest assets. They drive

growth and achieve long term sustainability of their business. Their culture fosters

differential thinking, empowering people by investing in their professional growth. The

company strives to be recognizing as the best place for the best people to do the best work.

PROMOTING PROGRESS

Empee group prides itself in promoting progress by creating and maintaining a work

environment which is conducive to both professional and personal growth. The exceptional

performance of people manifests itself in the overall performance of the company and

growing outlay for human resources.

TRAINING & DEVELOPMENT

EMPEE group HR policies are directed towards enhancing knowledge, experience &

skill of its people and retain a skilled workforce. Various multi skills training programs are

48

arranged to acquire cross-functional expertise. These are put to use through job enlargement

and increase responsibilities. It leads to an all round development of the employees, such

programmes benefit the company through cost reduction, improved processes and overall

enhanced productivity. Employees also gains through knowledge enrichment and career

progression.

TALENT MANAGEMENT

Empee group believes the right mix of talent is the key to rip the benefit and avail of

the business opportunities presented by current pace of globalization. Empee group has an

excellent combination of professional competencies in its workforce be in managerial and

technical.

ENCOURAGING INNOVATION

At Empee group, spirit of innovation permits through every run of employee.

Company encourages original thoughts which translate into action that yield benefit. A

unique scheme “JO SOCHE WO PAVE” has been running for past many years to encourage

the employees to suggest innovative ideas towards cost reduction, process improvement, and

energy & environment conservation. Good ideas are recognized and rewarded at company

gathering.

PEOPLE

CREATING LEADERS AT EVERY LEVEL

RECOGNITION AND REWARD SCHEME

49

MULTISKILL DEVELOPMENT TRAINING PROGRAMME

ASCENT PROGRAMME

CREATING LEADERS AT EVERY LEVEL

 Empee group emphasises that creating leaders not just at the organisational apex but

at every level results in strong sense of emotional ownership. Thus the employees are

delegated with responsibility and authority to adopt one Electric motor and related equipment

for keeping watch and care resulting in energy conservation, thus generating multiple CEO's

in the Energy Management System.

RECOGNITION AND REWARD SCHEME

The management believes in the self-actualization of its employees by injecting the

concept of Human resource Development in all its policies and strategies. By recognition and

reward the employees are motivated to give their best in the interests of the organization in

particular and for the society in general. So many schemes of recognition and rewards are

given to boost the morale and motivate the employees.

According to Managing Director of the company, morale management is considered

to be more challenging than material management. According to him it is important to keep

walking around and congratulating the teams for their small victories. Efforts and their

success stories are disclosed to all in special functions so that other employees may take

inspiration from them. Employees are rewarded for doing exemplary work in the field of

reducing/ eliminating breakdown, in-house development, better housekeeping, and reduction

in raw material, fuel, power and wastage. Cash awards and Certificates of honour have been

given in a function.

MULTISKILL DEVELOPMENT TRAINING PROGRAMME

50

The company started the concept of multi skilling to optimize manpower, enhance

skill sets and to facilitate cross-functional development. Unlike other organizations who

introduce multi-skilling for high fliers, the company started this concept first for its workers.

Reason: The Company faced a problem of surplus workers. Other organizations

would have resorted to retrenching and lying off, but this is not Empee group philosophy.

Empee group optimally utilized its surplus strength by developing worker skills in other

technical process. This helped the company build in a redundancy factor wherein at any given

point there was always a skilled set of people for any function. The company reduced

overtime through efficient manpower utilization, organized smooth functioning of the

production cycle, increased job security leading to a greater sense of belonging and

strengthened industrial relations. As a result the company did not lose a single day's work due

to strikes or lockouts. Employees were deputed for multiskill training of fitter trade in

different Industrial Training Centers.

Following the success of multi-skilling with workers, the company introduced this

concept with staff members. The objective was to enhance competencies and to enable

managers understand how an initiative taken by their department could affect the productivity

and performance of another department. This broadened the outlook of staff members,

making them think like business managers.

ASCENT PROGRAMME

Small groups have been formulated in order to institutionalize the process of learning,

self-development as well as bringing continuity and inculcating the process of brain storming

for self and organizations development.

OPERATIONAL AND QUALITY FUNCTION

51

Raw Material Management

Commodity business is dependent upon naturally procured resources for its

manufacturing. The real challenge for Empee group is thus to manage costs and seek

alternatives wherever possible. The fundamental strength of Empee group business model

starts from its core competence in raw material management. Its innovative approach and

excellent risk taking capability has its business sustainable.

Product Mix

Production of sugar and molasses is both values assertive and eco-friendly. At Empee sugars

their production of sugar is increasing over the last many years, mirroring industry demand.

Power Consumption

Empee sugars strive to reduce power consumption. It regularly invests in adoption of

new technology and practices for reducing its usage of power. It’s installeds and replaced a

range of energy efficient equipments in the year such as high efficiency fan and motors, VFD

etc. it continually looks at the ways to reduce the idle running of equipment. The additional

cost well recovered through better price realization.

Quality Philosophy

The Company’s quality obsession covers the following:

Holistic perspective covering all organisational functions.

Continuous improvement in standards.

Continuous reduction in cost

Strong focus on start of the pipe solutions instead of end-of-th-pipe reviews.

Lapse prevention focus as opposed to a fault-finding culture.

Strong documentation process that enables product complaints to be traced swiftly

and effectively to the root problem.

Performance improvement through knowledge sharing with other plants.

Quality Assurance

Empee sugars with certificates that testify to the high production standards achieved

by the company.

52

Quality Initiatives

Empee sugars possess one of the few R&D centres in the Indian sugar industry. This

center has been recognised by the Government of India. The research team is headed by a

highly qualified and experienced scientist. Empee sugars R&D centre has directly contributed

in the conservation of electrical and thermal energy, an improvement in product quality, cost

reduction, mineral conservation.

FINANCE FUNCTION

FINANCE DEPARTMENT

The account department is involved in monitoring the functions of other department

thus ensuring that the unit is functioning as per plan though with minor deviation.

53

Important functions constitute the following:

Planning and budgeting

C.V.A [Cash Value Added] calculations

Bill passing for the supplier as well as the contractors.

Cash as well as bank transactions

MIS related activities such as generation of MIS and review meetings from

corrective actions.

Planning and budgeting activities are done once a year and budgets so formed are

reviewed quarterly. Quarterly revisions or estimates are essential to transform the yearly data

contained in the budget to operational data pertaining to the immediate quarter incorporating

there in any factors that might have escaped notice during the budget preparation due to the

any reason. Deviations from the budgets are reported in the MIS (CVA is calculated annually

for assessing the performance of the unit in cash terms. Delta C.V.A gives the idea of the

cash value additions done during a year.

Separate cash affiliated to the accounts department does bill passing activity. The

payment of the bill is done in the accounts department. MIS generated from accounts

department contains details of the functioning of all the departments in the line of the

consumption patterns of all the products as well as the by – products etc.

If there are any deviations from the budget or the quarterly estimates that are serious

in natural then there deviations are discussed in the monthly review meetings.

performance has posted a good performance with all round improvement production,

sales and in profitability. A strong demand for celluloic fibre coupled with the company’

strategy on specilty fibres has driven the performance. The above table gives the details of

performance .

Time office:

The main function of this department is to maintain the records such as Attendance, Leave and Pay role. They also maintain records of the management, such as the Employee State Insurance (ESI) Provident Fund (PF), Attendance of each employee are maintained by

54

issuing the SWAP cards to the individuals. The timings of office workers depend on the rules of the government body.

There are 2 major shifts for the workers to work at different time intervals.

Allocation of funds

FMP= 70%

FD= 20%

Liquid funds= 5%

Debt fund= 5%

KEY PEOPLE

Mr. R.Rajagopalan (Auditor)

Messrs. Vivekanandan Unni & Associates

BANKERS

Andhra Bank, Bank of India, Bank of Maharashtra, Federal Bank, Indian Bank,

Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank,

Union Bank of India

Annual results in brief (Rs crore)  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Sales 46.12 46.44 59.62 60.78 99.36

55

  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Operating profit 9.07 8.59 8.45 5.75 15.86

Interest 4.94 3.94 5.74 3.47 2.74

Gross profit 4.12 5.28 3.15 2.66 13.15

EPS (Rs) 0.22 0.23 0.31 0.21 2.28

Annual results in details  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Other income - 0.63 0.43 0.37 0.03

Stock adjustment -0.74 -5.49 -7.40 -6.53 1.59

Raw material 28.79 33.92 42.66 46.62 67.84

Power and fuel - - - - -

Employee expenses 4.04 4.28 4.87 - -

Excise - - - - -

Admin and selling expenses - - - 7.08 5.64

Research and development expenses - - - - -

Expenses capitalised - - - - -

Other expenses 4.96 5.13 11.04 7.86 8.42

Provisions made - - - - -

Depreciation 3.54 3.30 2.71 2.11 2.09

Taxation -0.34 1.02 -0.86 -0.33 1.48

Net profit / loss 0.93 0.96 1.30 0.88 9.58

Extra ordinary item - - - - -

Prior year adjustments - - - - -1.71

Equity capital 41.97 41.97 41.97 41.97 41.97

Equity dividend rate - - - - -

Agg.of non-prom. shares (Lacs) 115.97 123.66 128.63 128.63 128.63

56

  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Agg.of non promotoHolding (%) 27.63 29.46 30.65 30.65 30.65

OPM (%) 19.65 18.49 14.18 9.46 15.97

GPM (%) - 11.21 5.24 4.34 13.23

NPM (%) - 2.03 2.16 1.43 9.64

BALANCE SHEET  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Sources of funds

Owner's fund

Equity share capital 41.97 41.97 41.97 41.97 41.97

Share application money - - - - -

Preference share capital 124.27 75.62 - - -

Reserves & surplus -6.17 -6.56 -5.76 -6.10 -6.54

Loan funds

Secured loans 362.51 91.22 43.83 36.39 22.13

Unsecured loans 26.55 26.55 26.55 6.00 -

Total 549.13 228.80 106.59 78.26 57.57

Uses of funds

Fixed assets

Gross block 86.07 77.05 74.94 49.35 47.18

Less : revaluation reserve - - - - -

Less : accumulated depreciation 34.99 31.45 28.16 25.45 23.33

Net block 51.08 45.59 46.79 23.91 23.84

Capital work-in-progress 350.08 22.53 17.06 25.39 5.54

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  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Investments 23.28 23.28 7.84 0.05 -

Net current assets

Current assets, loans & advances 149.01 128.92 34.16 30.94 24.39

Less : current liabilities & provisions 39.32 18.93 14.26 17.02 11.21

Total net current assets 109.69 109.99 19.90 13.91 13.18

Miscellaneous expenses not written 15.00 27.41 15.00 15.00 15.00

Total 549.13 228.80 106.59 78.26 57.57

Notes:

Book value of unquoted investments 23.28 23.28 7.84 0.05 -

Market value of quoted investments - - - - -

Contingent liabilities 55.70 176.60 147.63 10.33 -

Number of equity shares outstanding (Lacks) 419.73 419.73 419.73 419.73 419.73

PROFIT LOSS ACCOUNT  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Income

Operating income 46.59 46.99 60.80 61.61 101.10

Expenses

Material consumed 24.02 22.63 34.28 37.17 75.04

Manufacturing expenses  6.65 7.91 8.31 10.54 4.49

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  Mar ' 10 Mar ' 09 Jun ' 08 Jun ' 07 Jun ' 06

Personnel expenses 4.04 4.28 4.87 4.46 3.76

Selling expenses 0.69 0.60 0.97 0.81 0.89

Administrative expenses 1.96 2.84 3.41 2.54 2.31

Expenses capitalised - - - - -

Cost of sales 37.36 38.27 51.83 55.51 86.48

Operating profit 9.23 8.72 8.96 6.09 14.62

Other recurring income 0.18 0.61 0.18 0.29 0.36

Adjusted PBDIT 9.41 9.34 9.14 6.38 14.98

Financial expenses 5.28 4.06 5.99 3.75 4.79

Depreciation  3.54 3.30 2.71 2.11 2.10

Other write offs - - - - -

Adjusted PBT 0.59 1.98 0.44 0.52 8.09

Tax charges  -0.34 1.02 -0.86 -0.33 -2.01

Adjusted PAT 0.93 0.95 1.30 0.86 10.09

Nonrecurring items - - - - -

Other non cash adjustments - - - 0.02 0.22

Reported net profit 0.93 0.95 1.30 0.88 10.31

Earnings before appropriation 0.93 0.95 1.30 0.88 10.31

Equity dividend - - - - -

Preference dividend - - - - -

Dividend tax - - - - -

Retained earnings 0.93 0.95 1.30 0.88 10.31

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CHAPTER IV

_____________________________________________

OBSERVATIONS AND CONCLUSIONS

Observations

Suggestions

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Conclusions

bibliography

OBSERVATIONS

Learning is a never ending process which continues from birth of human being to

his/her death. It can also be done by reading book and through training and work. Spending 6

weeks in EMPEE SUGARS AND CHEMICALS LTD was good learning experience for

me. After completing the organization study I came to know that academic learning is

different and working in organization and learning is different. After spending such precious

time in an organization my major finding in that particular organization are as follows:

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Firstly, organization culture of Empee Sugars is formal, where every person cannot a

directly meet to High authority without any systematic way which I considered was

good because it encourages employees at work.

Secondly, organization structure of Empee group is well formatted in which each and

every department plays important role.

Thirdly, in the organisation structure is divided into to 4 parts one is in Finance,

Marketing, Operation & Quality, Human and Resources These all departments are

headed by different persons but at the same time they work for same objective with

full co-ordination which shows the unity level about the organisation.

Fourthly, all the employees and labourers work very hard towards achieving the goal.

Even the higher authorities work very hard without wasting time towards the

organization goal

Fifthly, security concern in chemicals. Doesn’t allow the outsiders to enter into the

factory without prior appointment or consulting the higher authorities. They have a

very effective security system.

Sixthly, Administrative head role in an organisation very important to make good

working environment the practice which I observed was that he was very hard

working person and he does his work very efficiently. .

seventhly, an organisation study also makes me learn that any objective cannot

achieve with a short span of time it has to be done through systematic ways.

Finally, in any organisation time management play important role because each

activity should be done at a right time at right place.

SUGGESTIONS

Advertising strategies should be revised. More focus should be given on publicity and

awareness among customer should be there.

We often see that retailers would like to sale only that product in which he gains more

profit, so we should give a good margin of profit to retailer.

In sales promotion activity, we should focus on counter meeting, contractor’s meeting

& retailer meeting, in which we can give some gifts and refreshments to contractor,

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dealer and retailers.

Literature can be provided to stockiest and retailers. This written material will also

help them to advertise and promote the product.

The major problem faced by the retailers is great transparency in prices so company

should make a policy for stability in prices.

Company should also provide more technical services, so they can visit every site &

solve the customer’s problem.

CONCLUSION

The company has more concern towards the employees, labour standards and

environment by following global compact principles and put forward its thoughts by

promoting environment friendly business to the world by its new products. It had succeeded

in balancing its profit making and environments commitments which are two sides of the

business

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The company follows the international standards to achieve the utmost customer

satisfaction by its timely responding to the customer requirements resolving their problems.

After eight weeks of organizational study in Empee sugars and chemicals limited,

my knowledge and thinking of has been transformed from theoretical approach to real time

business approach. Empee sugars and chemicals limited have all state of art facilities to

achieve its strategic plan 2015.

The health, safety measures and welfare facilities are necessary for the employees

to enhance the work culture and the encouragement for the employees that leads to achieve

the organizational objective.

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BIBLIOGRAPHY

www. empeegroup.co.in.com

www.google.com

Annual report of company for the year 09-10

www.wikipedia.com

Bseindia.com

Business world

Many online articles etc.

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