Triveni and engineering LTD.

A SUMMER TRAINING PROJECT REPORT 0NSTUDY OF RATIO ANALYSIS AT SUBMITTED TO

UP TECHNICAL UNIVERSITY, NOIDAIN PARTIAL FULFILLMENT OF THEREQUIREMENTS FOR THE DEGREEOFMASTER OF BUSINESS ADMINISTRATIONSubmitted to:Dr. Sandeep Kumar

Submitted by:Harshit Rastogi

IIMT MANAGEMENT COLLEGE MEERUT

DECLARATION

It is certified that the Summer Training Project Report entitled STUDY OF CUSTOMER PERCEPTION FOR CIRCULAR BUSINESS OF HINDI NEWS PAPERS IN MEERUT submitted in partial fulfillment of the requirement for the degree of Master of Business Administration of UPTU, Noida is a record of bonafide Summer Training project work conducted by me. I have collected the data personally. The data given in the Summer Training Project Report is genuine e and original. Further, I also declare that it not submitted to any other university for the award of any degree or diploma.

ACKNOWLEDGEMENTI am extremely grateful to Mr. Sandeep , for having extended his guidance during the course of this research project.This acknowledgement would be incomplete without grateful mention of all the people who formed the sample and were kind enough to fill in the questionnaire and respond warmly to my questions.I shall be falling in my duty if I do not thank to Bajaj computers who typed this report well in time.Last but not the least; I thank ALMIGHTY for His blessings.

A TRAINING PROJECT REPORTON

STUDY OF RATIO ANALYSIS AT TRIVENIN ENGINEERING LTD.

Submitted for the partial fulfillment of the requirement for the award of degreeOFMaster of Business Administration(Affiliated to U.P.T.U LUCKNOW)(2012-2014) SUBMITTED TO: SUBMITTED BY:Ms. SANIYA MATHUR (School of Management) Roll no. 1206970035 MBA III Sem. FORRADHA GOVIND GROUP OF INSTITUTION MEERUT

UTTAR PRADESH TECHNICAL UNIVERSITY LUCKNOW

Date: ..

To Whom So Ever It May Concern

This is to certify that Mr. MOHD. SAMIR ANSARI has prepared a project report on the title ANALYSIS OF MUTUAL FUNDS INDUSTRY (WITH SPECIAL REFERENCE TO BULANDSHAHR REGION) for the partial fulfillment of Masters Degree in Business Administration from Uttar Pradesh Technical University, Lucknow. To the best of my knowledge the matter presented in project report is satisfactory and I wish her success in her future endeavor.

ms. Saniya Mathur (Supervisor of Project)

Anuyogipuram, Garh Road, Meerut-250 004 (UP) INDIATelefax : 0121 2760396, 2765023, 2603082 Fax : 0121-2600771e-mail : info@rgec.edu, info@iims.edu.in, website : www.rgec.edu, www.iims.edu.in

STUDENT DECLARATION

I MOHD. SAMIR ANSARI student MBA here by declared that the research report entitled ANALYSIS OF MUTUAL FUNDS INDUSTRY (WITH SPECIAL REFERENCE TO BULANDSHAHR REGION) is completed and submitted under the guidance of Ms. SANIYA MATHUR is my original work. The imperial finding in this report is based on the data collected by me. I have not submitted this project report to U.P.T.U., Lucknow or any other University for the purpose of compliance of any requirement of any examination or degree.

DATE: MOHD. SAMIR ANSARIPLACE: MBA III Sem Roll No. 1206970035

ACKNOWLEDGEMENT

First and foremost I would want to thank my Institute RADHA GOVIND GROUP OF INSTITUTIONS, Meerut for giving each and every student a platform of such nature where even before the completion of twos course, interaction with the industry and exposure to the same is made possible.

I express my immense pleasure and solemn gratitude to Mr. MOHD. SAMIR ANSARI for giving me this opportunity to study an entire sector very closely.

Last but not the least I am grateful to all those persons who were involved with me in the project for their co-operation and support.

MOHD. SAMIR ANSARI MBA III Sem. Roll No. 1206970035

EXECUTIVE SUMMARY The significant outcome of the government policy of liberalization in industrial and financial sector has been the development of new financial instruments. These new instruments are expected to impart greater competitiveness flexibility and efficiency to the financial sector. Growth and development of various mutual fund products in Indian capital market has proved to be one of the most catalytic instruments in generating momentous investment growth in the capital market. There is a substantial growth in the mutual fund market due to a high level of precision in the design and marketing of variety of mutual fund products by banks and other financial institution providing growth, liquidity and return. In this context, prioritization, preference building and close monitoring of mutual funds are essentials for fund managers to make this the strongest and most preferred instrument in Indian capital market for the coming years. With the decline in the bank interest rates, frequent fluctuations in the secondary market and the inherent attitude of Indian small investors to avoid risk, it is important on the part of fund managers and mutual fund product designers to combine various elements of liquidity, return and security in making mutual fund products the best possible alternative for the small investors in Indian market. There are various parameters which an investor should consider before investing in mutual funds. The comparative analysis between two mutual fund will help the investor to take appropriate decision before investing in mutual funds.

TABLE OF CONTENTS

CHAPTER NO.TITLEPAGE NO.

EXECUTIVE SUMMARYV

LIST OF TABLESVI

LIST OF TABLE & FIGURES VII

1.Introduction 1-4

2.LITERATURE REVIEW0-22

TYPES OF MUTUAL FUNDS23-28

ADVANTAGE AND DISADVANTAGE29-34

MARKETING STRATEGY ADOPTED BY MF35-37

MARKETING OF FUNDS38-41

PRODUCT INNOVATION AND VARIETY42-43

DISTRIBUTION NETWORK44-45

ADVERTISE AND SALES PROMOTION46-58

MARKET SHARE OF MUTUAL FUND

3. OBJECTIVE 61-62

4.RESEARCH METHODOLOGY63-69

5.DATA INTERPRETATION AND ANALYSIS70-83

6.FINDINGS AND INFERENCES84-85

7.RECOMMENDATIONS86-87

8.LIMITATIONS88-89

9.CONCLUSION90-91

10.BIBLIOGRAPHY92-93

11.APPENDIX94-98

INTRODUCTION

INDUSTRY PROFILE

Indian sugar Industry:

India is the second largest producer of sugar in the world. The Indian sugar industry is the second largest agro industry located in the rural India. The Indian sugar industry has a turnover of Rs.500 billion per annum and it contributes almost Rs.22.5 billion to the central and state as tax, and excise duty every year. It is the second largest agro processing industry in the country offers cotton textiles.

About 50 million sugar cane farmers and a large number of agricultural laborers are involved in sugar cane cultivation and ancillary activities, constituting 7.5% of the rural population. The industry provides employment to about 2 million skilled/semiskilled workers and others mostly from the rural areas.

The industry not only generates power for its own requirement but surplus power for export to the grid based on by - product- bagasse. It also produces ethyl alcohol, which is used for industrial and potable uses, and can also be used to manufacture Ethanol, an ecology friendly and renewable fuel for blending with petrol.

The sugar industry in the country uses only sugar cane as input; hence sugar companies have been established in large sugar cane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu and Andhra Pradesh. In the year 2003-04 these six states contribute more than 85% of total sugar production in the country. Exhibit 1 shows the state-wise sugar production in India for 2004-2005 and 2005-06.

The government de-licensed the sugar sector in the August 1998, there by removing the restriction on the expansion of existing as well as on the establishment of new 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.

EXHIBIT 1: Sugar production by state in India (in Metric Million Ton):

There are 566 installed sugar mills in the country with a production capacity of 180 lakh Million tons of sugar, of which only 453 are working. These mills are located in 18 states of the country. Around 315 of the total installed mills are in the co-operative sector, 189 in the private sector and 62 in the public sector. The number of operating sugar mills in the country has increased from 29 in sugar year (SY) 1930-31 to 412 by (S) Y1996-97 (sugar year = October 1 st to September 30th). The addition in number of mills was at its peak during seventies that when nearly 100 mills were added between 1970 and 1980 to increase the number of operating units to 300. The development of industry in the past is as given in table below.

The average capacity of the sugar mills in the industry has considerably moved up from just 644 ton per day in SY 1930-31 to 2656 ton per day. But still the production of sugar in India is inching. Industry was driven by horizontal growth (increase in number of units) compared to the vertical growth witnessed in other countries (increase in average capacity) Refer Exhibit (3)

1.1 Sugar Availability:

Sugarcane occupies about 2.7% of the total cultivated land and it is one of the most important cash crops in the country. The area under sugar cane has gradually increased from 2.7 million hectares in 1980-81 to 4.3 million hectares in 2002-03, mainly because of much larger diversions of land from other crops to sugarcane by the farmers for economic reasons. The sugarcane area, however, declined in the year 2003-04 to 3.9 million hectares and to 3.7 million hectares in 2004-05, mainly due to drought and pest attack.

From a level of 154 MMT in 1980-81, the sugarcane production increased to 241 MMT in 1990-91 and further to 296 MMT in 2000-2001. Since then it has been hovering around 300 MMT until last year. In the season 2003-2004, however, sugarcane production declined to drought and pest attack. Not only sugarcane acreage and sugarcane production has bas been increasing, even drawl of sugarcane by sugar industry has also been increasing over the years. In India, sugarcane is utilized by sugar mills as well as by traditional sweeteners like Gur and Khandsari producers. However, the diversions of sugarcane to Gur and Khandsari are lower in states of Maharashtra and Karnataka, as compared to Northern states like Uttar Pradesh. Exhibit 2 gives data on sugarcane utilization for different purposes.

EXHIBIT 2: Sugar Utilization:

The three largest sugarcane growers in terms of production are Brazil, India and China, yielding between them more than half of total sugar production. Exhibit 3 compares production and yield figures for the top 11 sugar growing countries as shown below.

EXHIBIT 3: Sugarcane production and consumption by country.

Most of the mills in India are not equipped to make refined sugar. Mills which are designed to produce refined sugar can manufacture sugar not only from sugarcane but also from raw sugar which can be imported. Therefore, such mills can run their production all the year round, as opposed to single stage mills which are dependent upon the seasonal supply of sugarcane.

COMPANY PROFILE

Mr. Dhruv M. Sawhney, Chairman & Managing Director graduated with a Masters in Mechanical Sciences from Emmanuel College, University of Cambridge, U.K. and M.B.A with distinction from the Wharton School, University of Pennsylvania, U.S.A. He was on the Dean's list for all terms, came second in the University, and is a life member of Beta Gama Sigma. Mr. Sawhney has received the highest civilian award "Chevalier de la Legion d'Honneur" from President Chirac of the French Republic.

Mr. Sawhney is a Past President of the Confederation of Indian Industry (CII), the Indian Sugar Mills Association and the Sugar Technologists Association of India. He was the first Chairman from the developing world of the International Society of Sugar Cane Technologists. Mr. Sawhney has served on the Board of various public sector organizations and chaired Government advisory councils on Industry, Energy and Sugar. He chairs the Commonwealth Leadership Development Conferences founded by HRH Prince Philip, The Duke of Edinburgh in 1956 to foster and broaden the understanding and decision-making ability of individuals in the commonwealth countries. Mr Sawhney is Deputy Chairman of the Evian Group and Chairman of the India Steering Committee of the World Economic Forum, Switzerland. He also chairs CII's International and Internal Audit Committees.

Mr. Sawhney takes a keen interest in education, and was a past Governor of the Indian Institute of Management, Lucknow, the Management Institute at the University of Delhi and Chairman of the Doon School, Dehra Dun, one of India's most famous Public Schools. He is a Companion Member of the Chartered Institute of Management, U.K. and chairs the Board of Trustees of Delhi's oldest private charitable hospital. He was President of the All India Chess Federation for 12 years.

TRIVENI NGINEERING AND INDUSTRIES LIMITED

PERFORMANCE:

Particulars2005-062010-09% Increase

Sales (Gross)12702.9610212.9224.38

Sales (Net)11920.379610.5024.04

Operating Profit ( EBIDTA)2130.001724.4623.52

Interest and Financial Charges229.96304.67(24.52)

Depreciation and amortization288.25178.7361.29

Profit before tax (PBT)1611.791241.0629.87

Tax liability- Normal165.32235.29

- Net deferred tax charges131.5110.57

Profit after tax (PAT)1314.96995.2032.13

Surplus brought forward82.4044.55

Available for appropriation1397.361039.75

APPROPRITATIONS

Provision for Dividend (included dividend distribution tax)

Equity147.5493.9557.04

Preference-2.70-

Transfers to molasses reserves1.270.83

Transfer to capital redemption reserves19.8719.87

Transfer to general reserves1150.00840.00

Surplus carried forwarded78.6882.40

Earning per equity share of Re. 1 each (in Rs.)5.884.7723.27

During the year under review, the company reported a record performance across the following parameters: Net sales increased 24.04 % to Rs 11920.37 million. Profit after tax increased 32.13 % to Rs 1314.96 million.There was a remarkable growth in turnover in all the engineering units accompanied by an attractive increase in their respective margins. The company is optimistic of a similar or higher growth in turnover and profit of all businesses in Financial Year 2006-07. Divisionwise breakup of total external sales (%)

2000

CORPORATE INFORMATION:Sl. No.Name and Address of Stock ExchangeStock Code

01.Bombay Stock Exchange LimitedPhiroze Jeejeebhoy Towers,Dalal Street, FortMumbai 400023532356

02.National Stock Exchange of India Ltd.Exchange Plaza, 5th Floor, Plot no c/1, G block, Bandera (E), Mumbai - 400051TRIVENI

Enhancing shareholders value:The Triveni public issue: The shares of Triveni Engineering & industries Limited are listed on the Bombay stock Exchange and National stock Exchange, the major stock exchange of India.The company issued 50 million equity shares in November 2005 and the issue was oversubscribed more then ten times reflecting investor confidence. The equity shares of RS. 1 each were issued through a book building process within a price range of Rs. 42.50. While 97% of the demand was for shares in the upper band, the company prudently fixed the issue price at Rs. 48 in general investor interest. Consequent to this issue, the equity shares of the company were listed on NSE and BSE on 13 December 2005. As on 31 March 2006, reputed institutional investors including mutual funds, foreign institutional investors and domastic banks held 21.53% of the companys shareholding. The closing price of Triveni share at NSE on 31 March 2006 was Rs. 125.95, impaling a market capitalisation of Rs.32480 million. The company has increased the limit of investment by FIIs to 49%, which will enable more international investors to participate in its growth story.

At Triveni, our principal achievement is that we started with one business, but leverage our engineering knowledge to extend into four other growing and profitable business.

SUGAR BUSINESS GROUP (SBG)

Highlights, 2005-06 13% increase in turnover from Rs. 7676.07 million in 2010-09 to Rs. 8663.25 million. Recovery of the Deoband sugar unit of the highest in Western UP during the 2005-06 sugar seasons. 60% increase in sugar capacity from TCD in 2010-09 to 40500 TCD. Commissioning of the 7000 TCD Greenfield sugar unit in Sabitgarh in January 2006.Outlook, 2006-07 Sugar prices are expected to stay firm for the next two years on account of domestic demand and supply, high crude price influencing higher ethanol production as well as due to other international factors. The company will expend capacity from 40500 TCD to 61000 TCD in 2006-07 It will commission three Greenfield units in Chandanpur (6000 TCD) and Rani Nagal (5500 TCD) by the start of the 2006-07 sugar season; the third plant in Narainpur (6000 TCD) will be completed in the fourth quarter of 2006-07; capacity expansion of the Ramkola sugar unit from 3500 TCD to 6500 TCD will be complete by the start of the 2006-07 sugar season. The company is setting up a captive 160 KLPD distillery for ethanol production that will be commissioned in the fourth quarter of 2006-07.PerformanceThe company achieved 7% higher crushed in 2005-06, a good performance as it competed successfully with producers of alternative sweeteners to reduce cane diversion and increase drawal of sugarcane. Further, the company produces Rs. 0.38 million tones of White sugar in 2005-06. Due to late rains, winter frodt and overfertilisation, the sugar recovereries in Western UP were lower by around 0.6-0.7% than what had been achieved in 2010-09. Averages recover for our sugar units declined from 10.08% in 2010-09 to 9.59% in 2005-06 due to the aforesaid. It is to the companys credit that despite poor weather, the Deoband units reported one of the highest recoveries among all Western UP sugar factories during the season under review. In Sugar Division area during the down turn, they invested in the modernization of the sugar units to achieve benefits which are fully under their control and invested additionally in the cogeneration plant to insulate themself from the sugar cycle, developing an alternative stable revenue stream. Besides they invested in state-of-the-art vacuum pans in a joint collaboration with sugar research international of Australia. The result of these initiatives is that when the industry turned around, Triveni was in the right place at the right time with the right capacity and the right efficiencies.The government did not permit the import of white sugar during the last two years even when a shortage was evident, but quite pragmatically allowed the import of raw sugar under an advance License scheme with corresponding export obligations. Considering all the factors and as described in detail in the Management Discussion and Analysis, the sugar outlook appears stable till 2009.The Khatauli sugar unit is being modernized and expanded to 16000 tcd and they are planning to setup three new units, one of which will be set up at Sabitgarh, district Bulundshahar, UP. All these units would have capacity of 5000-7000 tcd, expandable to 12000tcd. As a result, they expect their sugarcane crushing capacity to significantly rise over our current base of 25250 tcd.

THE BRANDED SUGAR (SHAGUN)The Companys branded sugar is manufactured in Khatauli and marketed under the Shagun Brand. The company announced this sugar in 26 September 2003.the branded sugar provides in 1-5 KG.packets. During the year under review, the off take of Branded sugar increased by 44 % to 6522 MT. While the market of branded sugar is not large, demand is increasing due to increased urbanization and life style changes.And the branded sugar of Triveni Shagun is packaged in a state-of-the-art sugar packaging section located in the sugar factory premises. The sugar packaging section is considered to be the best designed sugar packaging sections amongst all the players in branded sugar business in India.

THE COGENERATION GROUP (CBG) Cogen plant at Khatauli was one of the quickest commissioning schedules for co-generation plants in India.

Plant: Khatauli and Deoband Bagasse-based cogeneration power is a renewable, enviournmant friendly driver of sustainable development. The government of India has issued the national electricity policy, which calls for the promotion of cogeneration and generation from renewable Sources of energy. Performance, 2005-2006

222% increased in the divisions revenue from Rs. 188.03 million in 2004-2005 to Rs. 605.5 million. 304% increased in EBIDTA from Rs. 58.6 million in 2004-2005 to Rs. 237 million. Commissioning of new 23 MW co-generation plant in Khatauli reported PLF of over 98% in March 2006. 92% plant load factor for the Deoband unit across 207 days of working (99% and 100% PLF in February and March 2006 respectively). Power purchase agreement with Utter Pradesh Power Corporation Ltd. (UPPCL), the buyer for the power supplied to the grid; timely payments from UPPCL for the power supplied.

Trivenis co-generation units

DEOBAND: State of the art, bagasse-based co-generation unit with a capacity of 22 MW. The company captivity consumed 31 % of the electricity produced by this plant and the rest was supplied to the Utter Pradesh power corporation Limited, secured by a ten-year power purchase agreement. Plant operated at an average plant load factor of 92% for the 207 days it was operational in 2005-06; PLF could have been higher but for fuel shortage during the start of the sugar season and high grid disturbances in January 2006. Plant achieved 99 % and 100 % PLF in February 2006 and March 2006 respectively.

KHATAULI:State of the art and energy efficient, bagaees-based 23 MW cogeneration power plant (commenced operation during 2005-06-sugar season). The company captivity consumed 25 % of the electricity produced by this plant and the rest was supplied to the Utter Pradesh Power Corporation Limited, secured through a 10- year power purchase agreement. One of the quickest commissioning schedules for co-generations plant in India. Commenced the export of power in October 2005. After an initial period of stabilization, the cogen plant has achieved full capacity; PLF was over 98 % for March 2006. Additionally utilizes continuous Electro de-ionization (CEDI) process in its Boiler feed water system (installed through the companys water business Group) with the objective to rationalize bulk acid and alkali handling as well as improve water quality. This is the largest CEDI-based water treatment module in India and the first in a power plant in the country.THE ENGINEERING BUSINESSESOverviewGDP growth increased from 6.9% in 2004-2005 to 8.1% in 2005-2006, driven by the manufacturing and power sector. The index of industrial production for February 2006 rose to 227.3, up 8.8% against the corresponding month of the previous year.According to figures available, the IIP for mining, manufacturing and electricity sectors stood at 153.9, 242.3 and 186 respectively in February 2006 against 152.5, 221.3 and 170.7 in February 2005. The cumulative growth during April- February 2005-2006 in these three sectors was 0.5%, 9% and 5.3% respectively.Power sector (including IPP and co-generation units) India consumes almost 3% of the worlds commercial energy and is the sixth largest consumer of energy in the World. During 2005, the recorded energy requirement was 626 billion units whereas energy available was only 546 billion units, reflecting a shortage of 80 billion units (13%).Captive power It is estimated that a capacity addition 100000 MW will be required by 2012 to bridge the supply deficit. Electricity generation will have to grow at a minimum of 10% per annum in order to support the targeted industrials and economic growth. The government expects to bring around 5000 MW of electricity (2010) to the grid through the captive generation route to supplement capacity addition. Out of the countrys installed captive power generation of 18740 MW, steam generation power accounted for 46%, followed by diesel-based power generation.

The contribution of the division to the companys revenue increased from 16.9% in 2004-2005 to 22.6% in 2005-2006uvyfvhfyshcc gdftrth

TECHNOLOGYSTECHNOLOGIES IN SUGAR DIVISION: Continuous Vacuum Pan Syrup Clarifier System Short Retention Clarifier

Continuous vacuum PanDeveloped by Triveni SRI Limited, a wholly owned subsidiary, in association with Sugar Research International (SRI) of Mackay, Australia, the CVC was installed in the Deoband sugar factory for usage on C massecuite, the first time an SRI pan was installed for C massecuite in a sulphitation plant.SRI is one of the sugar machinery technology authorities in the world; its subsidiary, Triveni SRI Limited, has an exclusive license in India from SRI International for many of their products. Owing to technical improvements made on the CVP, Triveni and SRI are now eligible to jointly own the intellectual property for this new improved vacuum pan. Company has in the past presented these details in a paper jointly presented with SRI at a convention of the International Society for Sugar Sugarcane Technology. Syrup Clarifier System:Installed at the Deoband and Khatauli sugar plants to improve the quality of sugar, this licensed product from SRI has been sold to EID parry in Tamil Nadu, where it is working efficiently.

Short retention Clarifier:To be installed in 2005-06 at the Khatauli unit and at the new plant, the clarification of juice is achieved in only 30 minutes while in a normal clarifier juice is retained for approximately 150 minutes. This prevents the inversion of sugar and also leads to an improved sugar recovery and quality.

Mill-Tandem: Designed and manufactured by the company (captive technology), installed in companys sugar plants. The mill-tandem has proved to be one of the most efficient in India: reflected in the reduction in Bagasse losses and increase in reduced mills extraction (RME); RME for the unit is 96 while that of the industry is around 95; bagasse loss in the unit is 1.6 compared to 1.9 for the rest of the industry; strong design feature ensures a negligible downtime. Triveni has set up over 65 sugar plants and supplied over 300 cane mills to sugar factories in India and overseas.

FINANCIAL REWIEWKEY PARAMETRES:2006-072010-09

Return on Net worth (RONW) (%)72.5938.92

Return on Capital employed (ROCE) (%)43.5229.34

Total Debt Equity Ratio (Times)2.740.79

EBDITA margin (%)17.9417.87

PAT margin (%)10.3611.03

Interest Cover (Times)4.898.60

Book value (Rs. Per equity share of Re. 1, post bonus)7.9119.82

CORPORATE INFORMATIONChairman and Managing DirectorMr. Dhruv M. Sawhney

Board of DirectorsDr. F.C. KohliLt. Gen. K.K. Hazari (Retd.) Mr. M. K. DagaMr. R. C. SharmaMr. V. Venkateswarlu Mr. R. K. Kapoor (IDBI Nominee)Vice President (legal) and Company SecretaryMr. V.P. GhulianiBankersPunjab National BankCentral Bank of IndiaCanara BankOriental bank of CommerceUnion Bank of India Standard Chartered BankState Bank of TravancoreUTI bank Ltd.

AuditorsM/s. J.C. Bhalla & Co.

Branch AuditorsM/s. Virmani & Associates

COMPANYS BUSINESS LOCATIONSRegistered Office Deoband, District Saharanpur Utter Pradesh 247554 Phone: (01336) 222497, 222185,222866 Fax: 222220

Corporate Office Express Trade Towers, 8th floor 15-16, sector 16 A, Noida 201301 (UP) Phone: (0120) 5308000 Fax: 5311010-11 Share department/investors grievances Express Trade Tower; 8th floor 15-16, sector- 16 A Noida 201301 (U.P.) STD code: 0120 Phone: 4308000 Fax: 4311010-11 Email: shares@trivenigroup. ComRegistrar and share transfer agents For equity shares held in physical and electronic mode. M/s Karvy computer share Pvt. Ltd. Karvy house,46, Avenue 4 Street No. 1, Banjara Hills Hyderabad 500034 STD Code :040 Phone: 23312454,23320751 Fax: 23311968Email: mailmanager@karvy.comTurbine business group12-A, peenya industrial Area, Peenya, Banglore-560058STD Code: 080Phone: 28394721(4 lines), 28394843, 28394771Fax: 28395211Gear business group1, 2, 3 belagola industrial Area Metagalli, K.R.S. road,Mysore-570016, STD code: 0821Phone: 5280502, 5280501Fax: 2582694Fixed deposit sectionAccounts DepartmentExpress Trade Tower; 8th floor15-16, Sector-16A Noida 201301 (U.P.)STD Code: 0120 Phone: 4308000Fax: 4311010-1 Email:hoaccts@trivenigroup.comKhatauli sugar unitKhatauli, District- MuzaffarnagarUttar Pradesh 251201STD code-01396Phone: 272561, 272562Fax: 272309

Deoband Sugar UnitDeoband, District SaharanpurUtter Pradesh 247554Phone: (01336) 222497,222185, 222866Fax: 222220Ramkola sugar unitRamkola, District-KushinagerUtter Pradesh-247305STD Code: 05567 Phone: 256021Fax: 256248Satigarh Sugar unitP.O. Karora, Tehsil KhurjaDistricrt-Bulandshare(U.P.)STD Code: 05738Phone:228894Fax: 228893

LITERATURE REVIEWOVERVIEW OF SUGAR BUSINESS

Global sugar production is expected to increase from 144.05 MMT in 2004-2005 to 148.80 MMT in 2005-2006.

The companys installed capacity of 40500 tcd across the three units is among the largest in India. The companys Khatauli unit is credited with having crushed the largest quantity of sugar across any unit in India in the 2005-06-sugar season.RATIONALE FOR PRESENCE

India is the largest consumer of sugar and its per capita consumption is still below the levels achieved by peer countries. With a projected increase in per capita incomes and an improvement in lifestyle quality across Indias middle and lower economic classes, we expect that sugar consumption will increase significantly on account of two factors: the crossover from the consumption of gur and khandsari to sugar and an increase in direct consumption by all sections of the Indian society.COMPANYS VALUE PROPOSITION

Sugarcane is the only significant raw material for the domestic sugar industry. Consequently, any interruption in sowing or harvesting of sugarcane could lead to a detrimental impact on the sugar industry at large and to our company.As a forward-looking organization, Triveni is actively engaged in mitigating foreseeable risk factors. In relation to fostering the availability of sugarcane in its command area,

Cane Development ProgrammeTriveni protects farmer interests in a number of ways-ensuring consistent and equitable cane purchases from farmers, providing access to advanced farming best-practices, arranging timely remuneration and taking a leadership position in community development. In turn these initiatives encourage farmers to allocate a significant acreage towards the cultivation of sugarcane, making the arrangement mutually rewarding. The quality of the companys output has helped it graduate to the states of a major brand in Indias retail and wholesale markets, thereby enabling it to enjoy a premium and a distinctive recall in a relatively unbranded marketplace.The philosophy of the cane development and marketing is almost common for all the sugar units. While in following paragraphs, description is for Khatauli but applies generally to Deoband & Ramkola units as well. After identifying the constraints in the area of operation, the mill has undertaken an ambitious programme of Cane Development for improvement in productivity and quality of cane. The mill has separate cane development wing with qualified staff and experienced personnel. For this purpose the operational area has been divided into sub-zones and the field supervisory staff has been provided with the necessary facilities for efficient working and proper supervision of the various cane development activities. The cane development programme is planned with following activities:- To educate the farmers regarding modern agricultural practices in sugarcane cultivation. To replace the unapproved and degenerated cane varieties To initiate and propagate the use of healthy and generically pure, seed material. To initiate heat therapy for the treatment of cane seed through moist hot air treatment plant to eliminate the diseases.

The details of various schemes of cane development being undertaken by mill are enumerated as below:- Plantation of High Yield Variety of Sugarcane

Seed Distribution

Demonstration Plots

Technical Assistance to Cane Growers

Moist Hot Air Treatment

Irrigation

Ratoon Management

Biological Laboratory

Soil Analysis and Soil Treatment

Control of Post Harvest Sugar Losses

Awareness Among Cultivators

General

COMPANYS STRENGTHS

Advanced technological assets and capital equipment, represented by world-class continuous vacuum pans at the B (sugar boiling) and C (sugar boiling) stages, resulting in boiling consistency, uniform crystal size, reduced molasses purity, decline in steam consumption and enhanced product quality. The technology and intellectual property for this equipment were jointly developed with Sugar Research International, the premier Australian organization. Positive recall in a competitive marketplace, translating into a premium and quicker off-take. The location of the sugar manufacturing plants in the fertile Doab region (between the Ganga and Yamuna rivers), resulting in a superior sugarcane quality and an exceptionally high yield. Canal water availability over a large part of the region, representing one of the highest penetrations of man-made water intervention in India, reducing the companys dependence on monsoon vagaries. Established culture of cane cultivation in the region. Largest cane crushing capability across any one unit in India (18.66 million quintals in the 2010-09-sugar season at Khatauli); a quicker crush enables the farmer to grow wheat on fallow land and earn an attractive supplementary income. Excellent cane procurement logistics, critical for any large sugar unit, demonstrated in the systematic pooling of cane from no less then 220 purchase centers in the Khatauli command area without any shortage or inventory pile-up. Dependable relations with more than 160,000 farmers across the Khatauli, Deoband and Ramkola command areas, resulting in a reliable and increasing supply of sugarcane. Strong in-house technical and project management capability, resulting in the commissioning of the Deoband co-generation project in the fastest implementation time lines; proposed expansion of the Khatauli capacity from 11750 tcd to 16000 tcd. Vast project execution experience in setting up sugar plants and carrying out expansions in view of our earlier experience in sugar plant machinery and through our subsidiary, Triveni SRI Limited.INDUSTRY ANALYSIS World SugarThe total consumption of sugar increases by 1.2 MMT in 2003-04 to 18.5 MMT in 2004-2005.

The forecast of the world sugar balance (October2004 to September 2005) indicates that production will be 2 mn tones lower than consumption: world sugar output (October 2004 to September 2005) has been estimated at 146.1 mn tones (raw value) as against 143.7 mn tones in the previous year while consumption is estimated 2.1 per cent higher at 148 mn tones (raw value) with increased demand coming out of Asia and the Far East.Interestingly, leading trade house ED&F Man sees this global (2010-09, Oct-Sept) deficit widening to 4 mn tones; its production estimate for 2010-09 is unchanged from its 2009-08 benchmark of 143 mn, while consumption, driven by Asia, is forecast to increase from 144 mn to 147 mn.In fact, the principal factor behind the price rise over the past 18 months was the conviction that global demand growth could outstrip production in 2010-09, depleting stocks, as well as the belief that high oil prices may induce Brazil and other countries to divert more cane towards the production of ethanol, reducing cane supplies directed towards sugar manufacture. Looking into the short-term, two developments are likely to tip yhr Asian balance: Indias sugar consumption has been growing at an average annual rate of around 3 per cent over the last ten years; besides, global sucrose demand, discounting the role of artificial sweeteners, is expected to grow by around one mn tones a year. China too is likely to become a major importer after 2009, given the limited availability of its resources to expand sugar production.WTOSugar and dairy products are probably the most protected agricultural sector. As a result, the impact of product-specific negotiations in the WTO Doha Round (as agreed in the July 2004 framework) on sugar was more significant then in the last WTO round of multilateral trade negotiations.The critical factors: the base period chose for the duty reduction commitments, the length of the implementation period for making the reductions and whether sugar would be included in a WTO list of sensitive products, which would allow it to escape a part of the WTO trade reform process.More recently, the World Trade Organizations highest court issued a final ruling on April 28, 2005, ordering the European Union to stop dumping subsidized sugar illegally on the global markets or face trade sanctions. The decision by the Whos Appellate Body in Geneva gives the EU up to 15 months to strictly comply with this directive. It is important to note that the export of white sugar, especially from European Union, is heavily subsidized at prices less than 25 percent of the prices prevailing in the European domestic markets. But for such exports, the international prices of the white sugar would be higher and would in turn have a favorable impact on Indias domestic prices.In 2004, a panel of WTO experts estimated that the EU exported about four million metric tones of sugar in 2004-05 (period under investigation) or about three times more then what the rules permitted. As a result, any reform in this area will give Indian exports a significant boost and have a positive impact on global prices.India also suffers from a small quota in the Loma and ACP conventions, which gives members a preferential price in the lucrative EU and US markets. Any increase in these quotas could help domestic manufactures in the short term.

EthanolAt the 13th annual International Sugar Organization seminar in 2004, Chairman Francisco varua (also President of the Philippines Sugar Millers Association) pronounced that ethanol could become the sugar cane industrys principal product by the end of the first decade of the new millennium. Not only are fuel ethanol programmes spreading across the globe, but more players are becoming aware of the need for cross-order trade to help the product become more competitive against gasoline.Since Brazil will need to raise ethanol production by 14 bn liters (25 mn tones sugar equivalent) just to meet its growing domestic demand- this represents 175 mn tones of cane, 2.5 mn hectare of extra land and an addition 85 to 90 mills FO Licht does not expect a large Brazilian sugarcane crop to upset the world sugar balance, especially as ethanol is expected to become dearer over the foreseeable future.

DOMESTIC INDUSTRY SCENARIO AND OUTLOOK

Industry StructureThe sugar industry in India is highly fragmented, with 566 sugar units spread over 16 states. The total capital employed by the sugar industry is Rs 250 bn, annual sugarcane payments Rs 180 bn, direct employment for 500,000 and the involvement of 45 mn farmer/families in cane growth.The average size of each unit is approximately 3300 tcd, substantially below the new international economic size of 7500 tcd. Nearly 35 percent of all Indian mills are in the private sector, 6 per cent in the public sector and 59 per cent in the co-operative sector. Despite the large recent profits shown by the Indian sugar industry, 112 mills old and inefficient remained closed during the year.In a raw material-dependant industry, profitability is influenced by the following factors: Cane availability: Within the reserved area of any factory, the yield and size of the area under sugarcane are critical success drivers. Economic size: Without a minimum economic size of 5000 tcd (generally 10000 tcd in western Uttar Pradesh), it is becoming increasingly difficult for a sugar unit to command pricing power. Technology: The ability to minimize sugar-processing losses depends on process technology. Demand-pull: The ability to draw a higher percentage of sugarcane from the reserved area reduces the diversion to other sweeteners. Sucrose content: This is directly influenced by soil quality and cane development programmes initiated by progressive manufacturers; a higher sugar content in sugarcane leads to the manufacture of more sugar, while payment is still based on weight.

Operating efficiency: The ability to bring cane in quickly from the fields and continuously operate a sugar unit minimizes post-harvest sucrose evaporation.

OPERATIONAL PERFORMANCE:The company achieved 7 % higher crush in 2005-06,a good performance as it competed successfully with producers of alternative sweeteners to reduce cane diversion and increase drawled of sugarcane. Further, the company produced Rs 0.38 million tones of White sugar in 2005-06. Due to late rains, winter frost and overfurtilisation, the sugar recovers in western UP were lower by around 0.6-0.7 % then what had been achieved in 2010-09. Average recovery for our sugar units declined from 10.08 % in 2010-09 to 9.59 % in 2005-06 due to reasons a foresail. It is to the companys credit that despite poor weather, the Deoband unit reported one of the highest recoveries among all western U.P. sugar factories during the season under review.Trivenis Khatauli, Deoband and Ramkola units crushed 18.66 mn tones, 13.8 mn tones and 3.4 mn tones of sugarcane respectively during the 2010-09 sugar seasons. The sugarcane crushed at the Khatauli sugar unit was the highest across any unit in the country. Recovery was 10.06 per cent at Khatauli, 10.19 per cent at Deoband and 9.86 per cent at Ramkola. The company also imported 0.185 mn tones of raw sugar, which was converted into white sugar during the 2010-09-sugar season.The company produced 1, 96,000 tones in Khatauli (included processed raw sugar), 1,52,000 tones in Deoband (included processed raw sugar) and 33,600 tones in Ramkola, a cumulative 3,81,600 tones in 2010-09 (3,64,400 tones in 2009-08). As a result, company emerged as one of the largest sugar producers in India and expects to preserve this position following the increased production from its ongoing expansion programmes.The companys Khatauli unit procured cane from over 220 out-centers during the letter part of the season, a record across any sugar unit in India. Dispersed prudently over a 59000 hectare commend area, Khataulis sugarcane marketing staff refined the logistical system of cane harvest and transportation in the shortest time (empirical studies suggest that if whole stalk sugarcane is not crushed within 16 hours following harvest, the sucrose in the cane is converted into non-sugars with a consequent drop in sugar recovery). This efficiency will stand the company in good stead when it expends its capacity to 16000 tcd in the 2005-06 seasons. Besides engineering stoppages were within the estimated budget there was an attractive improvement in steam consumption, thereby increasing the allocation of Bagasse for the Deoband co-generation plant.FORWARD-LOOKING STATEMENTS

Global Corporate Strategy In the opinion of leading international sugar expert F.O.Licht, regulatory, technological and organizational issues will drive the growth of sugar companies. Since sugar is an agricultural commodity, the last factor is expected to influence profits the most. In this connection, it would be reasonable to assume that regulatory differences between various production locations may decline. As a result, companies that profited from regulation rents (guaranteed income within a protected business environment) will need to change their strategy to protect their longer-term survival. The last of these determinants limits the expansionary drive of sugar companies to national and /or supranational entities (EU) where an identical set of rules guarantees a high degree of planning security. The regulatory environment under which sugar companies operate is often challenging, requiring skill, experience and potential clout.From an international perspective, the industry structure of the sugar sector is surprisingly mature and yet fragmented; technology is advanced but innovations restricted to normal technological progress; markets saturated but driven by economic or population growth. As a result, technological economies of scale are important in determining the size of an individual plant.From an organizational perspective, companies can succeed through prudent cost reduction by centralizing functions (cost accounting and data processing) or optimizing competencies (bargaining contracts with suppliers and customers etc.).

Companys Expansion PlansCompany intends to complete the following projects which will enable it to avail benefits / incentives under the UP Government sugar policy: The commissioning of three new sugar plants. Each plant to have 5000 to 7000 tcd capacities (expandable to 10000-12000 tcd at a minimal cost). The commissioning of one of the plants (Sabitgarh) at one of the best sites in India today, with 75 per cent of the cultivable area being canal irrigated with almost no low lying sugarcane areas. In preparation, over 5000 hectares of high recovery sugarcane have been planted. The modernization and expansion of the Khatauli sugar unit from 11750 tcd to 16000 tcd, which will make it the largest single standalone sugar unit in India. The commissioning of a 23 MW co-generation plant at Khatauli by September 2005 to supplement the 22 MW cogeneration plant at Deoband.Following the establishment of these three units and the expansions at the existing units, companys cane crushing capacity will significantly rise from its existing aggregate of 25,250 tcd. The benefits of this scale equate to a better coverage of overheads, generation of adequate bagasse to ensure the fullest utilization (over 270 days) of companys two cogenerations units and tax-free profits from the two-cogeneration units for ten years.Going ahead, company also intends to commission a large distillery to fully consume the large throughput of molasses with the objective to manufacture ethanol in line with the government policy.It is our opinion that there will be an inevitable consolidation over the next few years in the sugar industry, with unviable plants in the co-operative, state government and private sectors closing down. This will present attractive acquisition opportunities and your company expects to avail of them especially if they lie in their targeted geographies.

RATIO ANALYSIS:

Fundamental Analysis has a very broad scope. One aspect looks at the general (qualitative) factors of a company. The other side considers tangible and measurable factors (quantitative). This means crunching and analyzing numbers from the financial statements. If used in conjunction with other methods, quantitative analysis can produce excellent results.

Ratio analysis isn't just comparing different numbers from the balance sheet, income statement, and cash flow statement. It's comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future.

MEANING OF RATIO:A ratio is one figure express in terms of another figure. It is a mathematical yardstick that measures the relationship two figures, which are related to each other and mutually interdependent. Ratio is express by dividing one figure by the other related figure. Thus a ratio is an expression relating one number to another. It is simply the quotient of two numbers. It can be expressed as a fraction or as a decimal or as a pure ratio or in absolute figures as so many times. As accounting ratio is an expression relating two figures or accounts or two sets of account heads or group contain in the financial statements.

MEANING OF RATIO ANALYSIS:Ratio analysis is the method or process by which the relationship of items or group of items in the financial statement are computed, determined and presented.Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health and profitability of business enterprises. Ratio analysis can be used both in trend and static analysis. There are several ratios at the disposal of an annalist but their group of ratio he would prefer depends on the purpose and the objective of analysis. While a detailed explanation of ratio analysis is beyond the scope of this section, we will focus on a technique, which is easy to use. It can provide you with a valuable investment analysis tool.This technique is called cross-sectional analysis. Cross-sectional analysis compares financial ratios of several companies from the same industry. Ratio analysis can provide valuable information about a company's financial health. A financial ratio measures a company's performance in a specific area. For example, you could use a ratio of a company's debt to its equity to measure a company's leverage. By comparing the leverage ratios of two companies, you can determine which company uses greater debt in the conduct of its business. A company whose leverage ratio is higher than a competitor's has more debt per equity. You can use this information to make a judgment as to which company is a better investment risk.However, you must be careful not to place too much importance on one ratio. You obtain a better indication of the direction in which a company is moving when several ratios are taken as a group.OBJECTIVE OF RATIOSRatio is work out to analyze the following aspects of business organization-1. Solvency-0. Long term 0. Short term0. Immediate1. Stability1. Profitability1. Operational efficiency1. Credit standing1. Structural analysis1. Effective utilization of resources1. Leverage or external financing

FORMS OF RATIO:Since a ratio is a mathematical relationship between to or more variables / accounting figures, such relationship can be expressed in different ways as follows A] As a pure ratio:For example the equity share capital of a company is Rs. 20,00,000 & the preference share capital is Rs. 5,00,000, the ratio of equity share capital to preference share capital is 20,00,000: 5,00,000 or simply 4:1.B] As a rate of times: In the above case the equity share capital may also be described as 4 times that of preference share capital. Similarly, the cash sales of a firm are Rs. 12,00,000 & credit sales are Rs. 30,00,000. so the ratio of credit sales to cash sales can be described as 2.5 [30,00,000/12,00,000] or simply by saying that the credit sales are 2.5 times that of cash sales.C] As a percentage:In such a case, one item may be expressed as a percentage of some other item. For example, net sales of the firm are Rs.50,00,000 & the amount of the gross profit is Rs. 10,00,000, then the gross profit may be described as 20% of sales [ 10,00,000/50,00,000]

STEPS IN RATIO ANALYSISThe ratio analysis requires two steps as follows:1] Calculation of ratio 2] Comparing the ratio with some predetermined standards. The standard ratio may be the past ratio of the same firm or industrys average ratio or a projected ratio or the ratio of the most successful firm in the industry. In interpreting the ratio of a particular firm, the analyst cannot reach any fruitful conclusion unless the calculated ratio is compared with some predetermined standard. The importance of a correct standard is oblivious as the conclusion is going to be based on the standard itself.TYPES OF COMPARISONSThe ratio can be compared in three different ways 1] Cross section analysis: One of the way of comparing the ratio or ratios of the firm is to compare them with the ratio or ratios of some other selected firm in the same industry at the same point of time. So it involves the comparison of two or more firms financial ratio at the same point of time. The cross section analysis helps the analyst to find out as to how a particular firm has performed in relation to its competitors. The firms performance may be compared with the performance of the leader in the industry in order to uncover the major operational inefficiencies. The cross section analysis is easy to be undertaken as most of the data required for this may be available in financial statement of the firm.2] Time series analysis:The analysis is called Time series analysis when the performance of a firm is evaluated over a period of time. By comparing the present performance of a firm with the performance of the same firm over the last few years, an assessment can be made about the trend in progress of the firm, about the direction of progress of the firm. Time series analysis helps to the firm to assess whether the firm is approaching the long-term goals or not. The Time series analysis looks for (1) important trends in financial performance (2) shift in trend over the years (3) significant deviation if any from the other set of data\3] Combined analysis:If the cross section & time analysis, both are combined together to study the behavior & pattern of ratio, then meaningful & comprehensive evaluation of the performance of the firm can definitely be made. A trend of ratio of a firm compared with the trend of the ratio of the standard firm can give good results. For example, the ratio of operating expenses to net sales for firm may be higher than the industry average however, over the years it has been declining for the firm, whereas the industry average has not shown any significant changes.

The combined analysis as depicted in the above diagram, which clearly shows that the ratio of the firm is above the industry average, but it is decreasing over the years & is approaching the industry average.

PRE-REQUISITIES TO RATIO ANALYSISIn order to use the ratio analysis as device to make purposeful conclusions, there are certain pre-requisites, which must be taken care of. It may be noted that these prerequisites are not conditions for calculations for meaningful conclusions. The accounting figures are inactive in them & can be used for any ratio but meaningful & correct interpretation & conclusion can be arrived at only if the following points are well considered.1. The dates of different financial statements from where data is taken must be same.1. If possible, only audited financial statements should be considered, otherwise there must be sufficient evidence that the data is correct.1. Accounting policies followed by different firms must be same in case of cross section analysis otherwise the results of the ratio analysis would be distorted.1. One ratio may not throw light on any performance of the firm. Therefore, a group of ratios must be preferred. This will be conductive to counter checks.1. Last but not least, the analyst must find out that the two figures being used to calculate a ratio must be related to each other, otherwise there is no purpose of calculating a ratio.

CLASSIFICATION OF RATIO

CLASSIFICATION OF RATIO

BASED ON FINANCIAL BASED ON FUNCTION BASED ON USERSTATEMENT

1] BALANCE SHEET 1] LIQUIDITY RATIO 1] RATIOS FOR RATIO 2] LEVERAGE RATIOSHORT TERM2] REVENUE 3] ACTIVITY RATIOCREDITORS STATEMENT 4] PROFITABILITY 2] RATIO FOR RATIO RATIO SHAREHOLDER

3] COMPOSITE 5] COVERAGE 3] RATIOS FOR

RATIO RATIO MANAGEMENT

4] RATIO FOR LONG TERMCREDITORS

BASED ON FINANCIAL STATEMENT

Accounting ratios express the relationship between figures taken from financial statements. Figures may be taken from Balance Sheet , P& P A/C, or both. One-way of classification of ratios is based upon the sources from which are taken.1] Balance sheet ratio:If the ratios are based on the figures of balance sheet, they are called Balance Sheet Ratios. E.g. ratio of current assets to current liabilities or ratio of debt to equity. While calculating these ratios, there is no need to refer to the Revenue statement. These ratios study the relationship between the assets & the liabilities, of the concern. These ratio help to judge the liquidity, solvency & capital structure of the concern. Balance sheet ratios are Current ratio, Liquid ratio, and Proprietory ratio, Capital gearing ratio, Debt equity ratio, and Stock working capital ratio.

2] Revenue ratio:Ratio based on the figures from the revenue statement is called revenue statement ratios. These ratio study the relationship between the profitability & the sales of the concern. Revenue ratios are Gross profit ratio, Operating ratio, Expense ratio, Net profit ratio, Net operating profit ratio, Stock turnover ratio.

3] Composite ratio:These ratios indicate the relationship between two items, of which one is found in the balance sheet & other in revenue statement. There are two types of composite ratios-1. Some composite ratios study the relationship between the profits & the investments of the concern. E.g. return on capital employed, return on proprietors fund, return on equity capital etc.1. Other composite ratios e.g. debtors turnover ratios, creditors turnover ratios, dividend payout ratios, & debt service ratiosBASED ON FUNCTION:

Accounting ratios can also be classified according to their functions in to liquidity ratios, leverage ratios, activity ratios, profitability ratios & turnover ratios.

1] Liquidity ratios:It shows the relationship between the current assets & current liabilities of the concern e.g. liquid ratios & current ratios.

2] Leverage ratios:It shows the relationship between proprietors funds & debts used in financing the assets of the concern e.g. capital gearing ratios, debt equity ratios, & Proprietory ratios.

3] Activity ratios:It shows relationship between the sales & the assets. It is also known as Turnover ratios & productivity ratios e.g. stock turnover ratios, debtors turnover ratios.

4] Profitability ratios:1. It shows the relationship between profits & sales e.g. operating ratios, gross profit ratios, operating net profit ratios, expenses ratios1. It shows the relationship between profit & investment e.g. return on investment, return on equity capital.

5] Coverage ratios:It shows the relationship between the profit on the one hand & the claims of the outsiders to be paid out of such profit e.g. dividend payout ratios & debt service ratios.

BASED ON USER:1] Ratios for short-term creditors:Current ratios, liquid ratios, stock working capital ratios2] Ratios for the shareholders:Return on proprietors fund, return on equity capital

3] Ratios for management:Return on capital employed, turnover ratios, operating ratios, expenses ratios4] Ratios for long-term creditors:Debt equity ratios, return on capital employed, proprietor ratios.

LIQUIDITY RATIO: -Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year) obligations. The ratios, which indicate the liquidity of a company, are Current ratio, Quick/Acid-Test ratio, and Cash ratio. These ratios are discussed below

CURRENT RATIOMeaning:This ratio compares the current assests with the current liabilities. It is also known as working capital ratio or solvency ratio. It is expressed in the form of pure ratio. E.g. 2:1Formula:

Current assetsCurrent ratio =

Current liabilities

The current assests of a firm represents those assets which can be, in the ordinary course of business, converted into cash within a short period time, normally not exceeding one year. The current liabilities defined as liabilities which are short term maturing obligations to be met, as originally contemplated, with in a year. Current ratio (CR) is the ratio of total current assets (CA) to total current liabilities (CL). Current assets include cash and bank balances; inventory of raw materials, semi-finished and finished goods; marketable securities; debtors (net of provision for bad and doubtful debts); bills receivable; and prepaid expenses. Current liabilities consist of trade creditors, bills payable, bank credit, provision for taxation, dividends payable and outstanding expenses. This ratio measures the liquidity of the current assets and the ability of a company to meet its short-term debt obligation.CR measures the ability of the company to meet its CL, i.e., CA gets converted into cash in the operating cycle of the firm and provides the funds needed to pay for CL. The higher the current ratio, the greater the short-term solvency. This compares assets, which will become liquid within approximately twelve months with liabilities, which will be due for payment in the same period and is intended to indicate whether there are sufficient short-term assets to meet the short- term liabilities. Recommended current ratio is 2: 1. Any ratio below indicates that the entity may face liquidity problem but also Ratio over 2: 1 as above indicates over trading, that is the entity is under utilizing its current assets.LIQUID RATIO:Meaning:Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio compare the quick assets with the quick liabilities. It is expressed in the form of pure ratio. E.g. 1:1.The term quick assets refer to current assets, which can be converted into, cash immediately or at a short notice without diminution of value.Formula:Quick assetsLiquid ratio =

Quick liabilitiesQuick Ratio (QR) is the ratio between quick current assets (QA) and CL. QA refers to those current assets that can be converted into cash immediately without any value strength. QA includes cash and bank balances, short-term marketable securities, and sundry debtors. Inventory and prepaid expenses are excluded since these cannot be turned into cash as and when required.QR indicates the extent to which a company can pay its current liabilities without relying on the sale of inventory. This is a fairly stringent measure of liquidity because it is based on those current assets, which are highly liquid. Inventories are excluded from the numerator of this ratio because they are deemed the least liquid component of current assets. Generally, a quick ratio of 1:1 is considered good. One drawback of the quick ratio is that it ignores the timing of receipts and payments.

CASH RATIOMeaning:This is also called as super quick ratio. This ratio considers only the absolute liquidity available with the firm.Formula:Cash + Bank + Marketable securities Cash ratio = Total current liabilities

Since cash and bank balances and short term marketable securities are the most liquid assets of a firm, financial analysts look at the cash ratio. If the super liquid assets are too much in relation to the current liabilities then it may affect the profitability of the firm.

INVESTMENT / SHAREHOLDER

EARNING PER SAHRE:-Meaning:Earnings per Share are calculated to find out overall profitability of the organization. An earnings per Share represents earning of the company whether or not dividends are declared. If there is only one class of shares, the earning per share are determined by dividing net profit by the number of equity shares.EPS measures the profits available to the equity shareholders on each share held.

Formula:NPATEarning per share =Number of equity share

The higher EPS will attract more investors to acquire shares in the company as it indicates that the business is more profitable enough to pay the dividends in time. But remember not all profit earned is going to be distributed as dividends the company also retains some profits for the business

DIVIDEND PER SHARE:-Meaning:DPS shows how much is paid as dividend to the shareholders on each share held. Formula: Dividend Paid to Ordinary ShareholdersDividend per Share =Number of Ordinary Shares

DIVIDEND PAYOUT RATIO:-Meaning:Dividend Pay-out Ratio shows the relationship between the dividend paid to equity shareholders out of the profit available to the equity shareholders.

Formula:Dividend per shareDividend Pay out ratio = *100Earning per shareD/P ratio shows the percentage share of net profits after taxes and after preference dividend has been paid to the preference equity holders.GEARING

CAPITAL GEARING RATIO:-Meaning:Gearing means the process of increasing the equity shareholders return through the use of debt. Equity shareholders earn more when the rate of the return on total capital is more than the rate of interest on debts. This is also known as leverage or trading on equity. The Capital-gearing ratio shows the relationship between two types of capital viz: - equity capital & preference capital & long term borrowings. It is expressed as a pure ratio.

Formula: Preference capital+ secured loanCapital gearing ratio = Equity capital & reserve & surplusCapital gearing ratio indicates the proportion of debt & equity in the financing of assets of a concern.

PROFITABILITY These ratios help measure the profitability of a firm. A firm, which generates a substantial amount of profits per rupee of sales, can comfortably meet its operating expenses and provide more returns to its shareholders. The relationship between profit and sales is measured by profitability ratios. There are two types of profitability ratios: Gross Profit Margin and Net Profit Margin.

GROSS PROFIT RATIO:-Meaning:This ratio measures the relationship between gross profit and sales. It is defined as the excess of the net sales over cost of goods sold or excess of revenue over cost. This ratio shows the profit that remains after the manufacturing costs have been met. It measures the efficiency of production as well as pricing. This ratio helps to judge how efficient the concern is I managing its production, purchase, selling & inventory, how good its control is over the direct cost, how productive the concern , how much amount is left to meet other expenses & earn net profit.

Formula: Gross profitGross profit ratio = * 100 Net salesNET PROFIT RATIO:-Meaning: Net Profit ratio indicates the relationship between the net profit & the sales it is usually expressed in the form of a percentage.Formula:NPAT Net profit ratio =* 100 Net salesThis ratio shows the net earnings (to be distributed to both equity and preference shareholders) as a percentage of net sales. It measures the overall efficiency of production, administration, selling, financing, pricing and tax management. Jointly considered, the gross and net profit margin ratios provide an understanding of the cost and profit structure of a firm.RETURN ON CAPITAL EMPLOYED:-Meaning:The profitability of the firm can also be analyzed from the point of view of the total funds employed in the firm. The term fund employed or the capital employed refers to the total long-term source of funds. It means that the capital employed comprises of shareholder funds plus long-term debts. Alternatively it can also be defined as fixed assets plus net working capital.Capital employed refers to the long-term funds invested by the creditors and the owners of a firm. It is the sum of long-term liabilities and owner's equity. ROCE indicates the efficiency with which the long-term funds of a firm are utilized.

Formula: NPATReturn on capital employed = *100 Capital employed

FINANCIALThese ratios determine how quickly certain current assets can be converted into cash. They are also called efficiency ratios or asset utilization ratios as they measure the efficiency of a firm in managing assets. These ratios are based on the relationship between the level of activity represented by sales or cost of goods sold and levels of investment in various assets. The important turnover ratios are debtors turnover ratio, average collection period, inventory/stock turnover ratio, fixed assets turnover ratio, and total assets turnover ratio. These are described below:

DEBTORS TURNOVER RATIO (DTO) Meaning:DTO is calculated by dividing the net credit sales by average debtors outstanding during the year. It measures the liquidity of a firm's debts. Net credit sales are the gross credit sales minus returns, if any, from customers. Average debtors are the average of debtors at the beginning and at the end of the year. This ratio shows how rapidly debts are collected. The higher the DTO, the better it is for the organization.Formula: Credit salesDebtors turnover ratio =Average debtors

INVENTORY OR STOCK TURNOVER RATIO (ITR)Meaning:ITR refers to the number of times the inventory is sold and replaced during the accounting period. Formula:COGS Stock Turnover Ratio = Average stock

ITR reflects the efficiency of inventory management. The higher the ratio, the more efficient is the management of inventories, and vice versa. However, a high inventory turnover may also result from a low level of inventory, which may lead to frequent stock outs and loss of sales and customer goodwill. For calculating ITR, the average of inventories at the beginning and the end of the year is taken. In general, averages may be used when a flow figure (in this case, cost of goods sold) is related to a stock figure (inventories).

FIXED ASSETS TURNOVER (FAT)The FAT ratio measures the net sales per rupee of investment in fixed assets. Formula: Net salesFixed assets turnover =Net fixed assetsThis ratio measures the efficiency with which fixed assets are employed. A high ratio indicates a high degree of efficiency in asset utilization while a low ratio reflects an inefficient use of assets. However, this ratio should be used with caution because when the fixed assets of a firm are old and substantially depreciated, the fixed assets turnover ratio tends to be high (because the denominator of the ratio is very low).

PROPRIETORS RATIO:Meaning:Proprietary ratio is a test of financial & credit strength of the business. It relates shareholders fund to total assets. This ratio determines the long term or ultimate solvency of the company.In other words, Proprietary ratio determines as to what extent the owners interest & expectations are fulfilled from the total investment made in the business operation.Proprietary ratio compares the proprietor fund with total liabilities. It is usually expressed in the form of percentage. Total assets also know it as net worth.Formula: Proprietary fundProprietary ratio = OR

Total fund

Shareholders fund

Proprietary ratio = Fixed assets + current liabilities

STOCK WORKING CAPITAL RATIO:Meaning:This ratio shows the relationship between the closing stock & the working capital. It helps to judge the quantum of inventories in relation to the working capital of the business. The purpose of this ratio is to show the extent to which working capital is blocked in inventories. The ratio highlights the predominance of stocks in the current financial position of the company. It is expressed as a percentage.Formula:StockStock working capital ratio = Working Capital

Stock working capital ratio is a liquidity ratio. It indicates the composition & quality of the working capital. This ratio also helps to study the solvency of a concern. It is a qualitative test of solvency. It shows the extent of funds blocked in stock. If investment in stock is higher it means that the amount of liquid assets is lower.

DEBT EQUITY RATIO:MEANING:This ratio compares the long-term debts with shareholders fund. The relationship between borrowed funds & owners capital is a popular measure of the long term financial solvency of a firm. This relationship is shown by debt equity ratio. Alternatively, this ratio indicates the relative proportion of debt & equity in financing the assets of the firm. It is usually expressed as a pure ratio. E.g. 2:1

Formula: Total long-term debt

Debt equity ratio = Total shareholders fund

Debt equity ratio is also called as leverage ratio. Leverage means the process of the increasing the equity shareholders return through the use of debt. Leverage is also known as gearing or trading on equity. Debt equity ratio shows the margin of safety for long-term creditors & the balance between debt & equity.

RETURN ON PROPRIETOR FUND:Meaning:Return on proprietors fund is also known as return on proprietors equity or return on shareholders investment or investment ratio. This ratio indicates the relationship between net profit earned & total proprietors funds. Return on proprietors fund is a profitability ratio, which the relationship between profit & investment by the proprietors in the concern. Its purpose is to measure the rate of return on the total fund made available by the owners. This ratio helps to judge how efficient the concern is in managing the owners fund at disposal. This ratio is of practical importance to prospective investors & shareholders.Formula: NPATReturn on proprietors fund =* 100 Proprietors fund

CREDITORS TURNOVER RATIO:It is same as debtors turnover ratio. It shows the speed at which payments are made to the supplier for purchase made from them. It is a relation between net credit purchase and average creditors Net credit purchase Credit turnover ratio = Average creditors

Months in a year Average age of accounts payable = Credit turnover ratio

Both the ratios indicate promptness in payment of creditor purchases. Higher creditors turnover ratio or a lower credit period enjoyed signifies that the creditors are being paid promptly. It enhances credit worthiness of the company. A very low ratio indicates that the company is not taking full benefit of the credit period allowed by the creditors.

IMPORTANCE OF RATIO ANALYSIS:As a tool of financial management, ratios are of crucial significance. The importance of ratio analysis lies in the fact that it presents facts on a comparative basis & enables the drawing of interference regarding the performance of a firm. Ratio analysis is relevant in assessing the performance of a firm in respect of the following aspects:1] Liquidity position,2] Long-term solvency,3] Operating efficiency,4] Overall profitability,5] Inter firm comparison6] Trend analysis.

1] LIQUIDITY POSITION: -With the help of Ratio analysis conclusion can be drawn regarding the liquidity position of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its current obligation when they become due. A firm can be said to have the ability to meet its short-term liabilities if it has sufficient liquid funds to pay the interest on its short maturing debt usually within a year as well as to repay the principal. This ability is reflected in the liquidity ratio of a firm. The liquidity ratio are particularly useful in credit analysis by bank & other suppliers of short term loans.

2] LONG TERM SOLVENCY: -Ratio analysis is equally useful for assessing the long-term financial viability of a firm. This respect of the financial position of a borrower is of concern to the long-term creditors, security analyst & the present & potential owners of a business. The long-term solvency is measured by the leverage/ capital structure & profitability ratio Ratio analysis s that focus on earning power & operating efficiency.Ratio analysis reveals the strength & weaknesses of a firm in this respect. The leverage ratios, for instance, will indicate whether a firm has a reasonable proportion of various sources of finance or if it is heavily loaded with debt in which case its solvency is exposed to serious strain. Similarly the various profitability ratios would reveal whether or not the firm is able to offer adequate return to its owners consistent with the risk involved.3] OPERATING EFFICIENCY:Yet another dimension of the useful of the ratio analysis, relevant from the viewpoint of management, is that it throws light on the degree of efficiency in management & utilization of its assets. The various activity ratios measures this kind of operational efficiency. In fact, the solvency of a firm is, in the ultimate analysis, dependent upon the sales revenues generated by the use of its assets- total as well as its components.4] OVERALL PROFITABILITY:Unlike the outsides parties, which are interested in one aspect of the financial position of a firm, the management is constantly concerned about overall profitability of the enterprise. That is, they are concerned about the ability of the firm to meets its short term as well as long term obligations to its creditors, to ensure a reasonable return to its owners & secure optimum utilization of the assets of the firm. This is possible if an integrated view is taken & all the ratios are considered together.5] INTER FIRM COMPARISON:Ratio analysis not only throws light on the financial position of firm but also serves as a stepping-stone to remedial measures. This is made possible due to inter firm comparison & comparison with the industry averages. A single figure of a particular ratio is meaningless unless it is related to some standard or norm. one of the popular techniques is to compare the ratios of a firm with the industry average. It should be reasonably expected that the performance of a firm should be in broad conformity with that of the industry to which it belongs. An inter firm comparison would demonstrate the firms position vice-versa its competitors. If the results are at variance either with the industry average or with the those of the competitors, the firm can seek to identify the probable reasons & in light, take remedial measures.6] TREND ANALYSIS:Finally, ratio analysis enables a firm to take the time dimension into account. In other words, whether the financial position of a firm is improving or deteriorating over the years. This is made possible by the use of trend analysis. The significance of the trend analysis of ratio lies in the fact that the analysts can know the direction of movement, that is, whether the movement is favorable or unfavorable. For example, the ratio may be low as compared to the norm but the trend may be upward. On the other hand, though the present level may be satisfactory but the trend may be a declining one.ADVANTAGES OF RATIO ANALYSISFinancial ratios are essentially concerned with the identification of significant accounting data relationships, which give the decision-maker insights into the financial performance of a company. The advantages of ratio analysis can be summarized as follows: Ratios facilitate conducting trend analysis, which is important for decision making and forecasting. Ratio analysis helps in the assessment of the liquidity, operating efficiency, profitability and solvency of a firm. Ratio analysis provides a basis for both intra-firm as well as inter-firm comparisons. The comparison of actual ratios with base year ratios or standard ratios helps the management analyze the financial performance of the firm.

LIMITATIONS OF RATIO ANALYSISRatio analysis has its limitations. These limitations are described below:1] Information problems

Ratios require quantitative information for analysis but it is not decisive about analytical output . The figures in a set of accounts are likely to be at least several months out of date, and so might not give a proper indication of the companys current financial position. Where historical cost convention is used, asset valuations in the balance sheet could be misleading. Ratios based on this information will not be very useful for decision-making.

2] Comparison of performance over time

When comparing performance over time, there is need to consider the changes in price. The movement in performance should be in line with the changes in price. When comparing performance over time, there is need to consider the changes in technology. The movement in performance should be in line with the changes in technology. Changes in accounting policy may affect the comparison of results between different accounting years as misleading.

3] Inter-firm comparison Companies may have different capital structures and to make comparison of performance when one is all equity financed and another is a geared company it may not be a good analysis. Selective application of government incentives to various companies may also distort intercompany comparison. comparing the performance of two enterprises may be misleading. Inter-firm comparison may not be useful unless the firms compared are of the same size and age, and employ similar production methods and accounting practices. Even within a company, comparisons can be distorted by changes in the price level. Ratios provide only quantitative information, not qualitative information. Ratios are calculated on the basis of past financial statements. They do not indicate future trends and they do not consider economic conditions.PURPOSE OF RATIO ANLYSIS:1] To identify aspects of a businesses performance to aid decision making2] Quantitative process may need to be supplemented by qualitative Factors to get a complete picture.3] 5 main areas:-

1. Liquidity the ability of the firm to pay its way1. Investment/shareholders information to enable decisions to be made on the extent of the risk and the earning potential of a business investment1. Gearing information on the relationship between the exposure of the business to loans as opposed to share capital1. Profitability how effective the firm is at generating profits given sales and or its capital assets1. Financial the rate at which the company sells its stock and the efficiency with which it uses its assets

ROLE OF RATIO ANALYSIS: It is true that the technique of ratio analysis is not a creative technique in the sense that it uses the same figure & information, which is already appearing in the financial statement. At the same time, it is true that what can be achieved by the technique of ratio analysis cannot be achieved by the mere preparation of financial statement.Ratio analysis helps to appraise the firm in terms of their profitability & efficiency of performance, either individually or in relation to those of other firms in the same industry. The process of this appraisal is not complete until the ratio so computed can be compared with something, as the ratio all by them do not mean anything. This comparison may be in the form of intra firm comparison, inter firm comparison or comparison with standard ratios. Thus proper comparison of ratios may reveal where a firm is placed as compared with earlier period or in comparison with the other firms in the same industry.Ratio analysis is one of the best possible techniques available to the management to impart the basic functions like planning & control. As the future is closely related to the immediate past, ratio calculated on the basis of historical financial statements may be of good assistance to predict the future. Ratio analysis also helps to locate & point out the various areas, which need the management attention in order to improve the situation.As the ratio analysis is concerned with all the aspect of a firms financial analysis i.e. liquidity, solvency, activity, profitability & overall performance, it enables the interested persons to know the financial & operational characteristics of an organisation & take the suitable decision.

OBJECTIVE OF THE STUDY

To be able to apply the theoretical knowledge obtained at the institute in a practical manner in the actual business environment. To get the knowledge about organizational problems, perceptions and challenges.

To get an opportunity of real life business experience.

To analysis and find ratio for financial year 2009-2011

RESEARCH METHODOLOGY

The data collected for the project was in the form of written as well as verbal information regarding ratio analysis of the company.1) Primary data: -The information about the Company is gathered from the discussion with the employees/staff and from the web site of the Company.

2) Secondary data:-The secondary data collected -The balance sheets as on the date of 31st march for the years- 2008 20092009 20102010 - 2011 The methodology of this study has been adopted on the following basis:

Study of various Journals, Notes & Books. Study through web-sites Collection of Primary & Secondary data records of the organization. Analysis of the collected data for its application.

ANALYSIS

RATIO ANALYSIS

1)Debt Equity Ratio: Debt Equity Ratio = Long Term Debt Share Holders Fund Debt= Secured loan + unsecured loan (long term)

Particulars201120102009

Debt135,33,40,965.2663,80,64,00076,80,20,840

Equity 34,03,59,000.0034,03,59,00033,19,71,481

Ratio3.971.872.31

2) Shareholders equity ratio:

Shareholders equity ratio: Share holders Equity Total assets (Tangible)

Particulars201120102009

Shareholders funds 83,45,92,364.65 60,93,74,000 34,38,69,627

Total assets 2,18,79,33,329.91152,67,00,000110,46,90,466

Ratio0.380.390.31

Share holders equity: Equity shares+ Preference+ Reserves and surplus- losses (if any)

3)Debt to net worth ratio:

Debt to Net worth Ratio = Long term debt Net worth Net worth: equity + preference+ reserves and surplus- lossesParticulars201120102009

Long term debt 135,33,40,965.26 63,80,64,000 76,80,20,840

Net worth 83,45,92,364.65 60,93,74,000 34,38,69,627

Ratio1.6