sugar factory project

Shree.D.K.S.S.K,CHIKODI by-Abhijeet A Gidagalle (9035051108)

JH INDUSTRY PROFILE

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

mythology supports the above fact as it contains legends showing the origin of sugarcane.

India is the second largest producer of sugarcane next to Brazil. Presently, about 4

million hectares of land is under sugarcane with an average yield of 70 tones per hectare.

India is the largest single producer of sugar including traditional cane sugar sweeteners,

khandsari, and Gur equivalent to 26 million tones. India, the world’s second-largest sugar

producer and biggest consumer, had produced 1.84 million tonnes of the sweetener in the same

period last year.

Traditional sweeteners Gur & Khandsari are consumed mostly by the rural

population in India. In the early 1930’s nearly 2/3 rd of sugarcane production was utilized for

production of alternate sweeteners. Gur & khandsari. With better standard of living and higher

incomes, the sweetener demand has shifted to white sugar. Currently, about 1/3rd sugarcane

production is utilized by the Gur & khandsari sectors. Being in the small scale sector, these two

sectors are completely free from controls and taxes which are applicable to the sugar sector.

The advent of modern sugar processing industry in India began in 1930 with grant

of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in

the year 1930 -31 to 135 in the year 1935-36 and the production during the same period

increased from 1.20 lakhs tones to 9.34 lakhs tones under the dynamic leadership of the private

sector.

The era of planning for industrial development began in 1950-51 and Government lay

down; targets of sugar production and consumption, licensed and installed capacity, sugarcane

production during each of the Five Year Plan periods.

Under the policy of licensing, Government initially permitted small sized new

units of 1250 capacity only and later on increased the minimum economic size of plant to 2500

TCD. Similarly capacity expansions initially allowed up to 3500 TCD only were subsequently

raised to 1 TCD and finally these expansion limits were withdrawn in 1990.

REVA INSTITUTE OF TECHNOLOGY AND MANAGEMENT, BANGALORE


No of sugar factories in India

Sector No. of factories

(1) Co-operative 321

(2) Private 272

(3) Public 62

Total 655

(source -annual report 2010-11 (Ministry of Consumer Affairs,Food and Public Distribution))

Futures trading in sugar

Sugar was approved for futures trading in May, 2001. At present, three national

exchanges viz. National Commodity and Derivative Exchange Ltd. (NCDEX), Mumbai, Multi

Commodity Exchange Ltd., (MCX), Mumbai, National Multi Commodity Exchange (NMCE),

Ahmedabad and E sugar India Ltd., Mumbai & E-Commodities Ltd., Delhi have been given

recognition for future trading in sugar. Except, E-Commodities Ltd., Delhi, trading in sugar is

taking place in all other exchanges. Bulk of the futures trading in sugar takes place at NCDEX.

Production of Sugar

(in lakh tone)

(source -annual report 2010-11 (Ministry of Consumer Affairs,Food and Public Distribution))


Sugar Season Production of

Sugar

2006-2007 282.00

2007-2008 263.00

2008-2009 146.70

2009-2010 188.00


2006-2007 2007-2008 2008-2009 2009-20100

50

100

150

200

250

300

Production of Sugar

Production of Sugar

Sugarcane ,sugar, molasses production and recovery of sugar

Year

Sugarcane

(million tonnes)

Sugar

(million tonnes)

Molasses

‘000 tonnes Recovery%

2001-02 298.422 18.528 8073 10.27

2002-03 281.575 20.145 8879 10.22

2003-04 233.862 13.546 5905 10.22

2004-05 281.172 19.267 8549 10.21

2005-06 281.173 19.267 8549 10.21

2006-07 355.52 28.367 13111 10.16

2007-08 340.557 26.357 11313 10.55

2008-09 285.029 14.539 6546 10.03

2009-10 277.75 18.912 8400 10.19

(Source-www.caneinfo.nic.in/)



In global sugar economy, the Indian sugar industry has achieved a number of milestones.

Second Largest Area under Cane/Cane Production.

Amongst the cost-effective industries with its field cost (Sugar cane) being the second

lowest, despite small land-holdings and low productivity

Fourth efficient processor of sugar despite low capacity of its sugar plants as compared to

very large-size plants in other parts of the world.

POLICY

The present policy of partial decontrol 10% of production by each unit is supplied

for public distribution system i.e. as levy sugar at Govt. notified prices admittedly below 20% of

the actual cost of production. The levy sugar is I to the public irrespective of their economic

status. The balance 90% is sold in the free market against monthly\issued by the Government.

This policy has been continuing since 1967-68 except for brief periods of de-control me during

the years of surplus production and accumulated sugar stocks.

Government announces the Statutory Minimum Price (SMP) for sugarcane every

year based on recommendations of the Commission for Agricultural Costs and Prices (CACP).



COMPANY PROFILE

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE

NIYAMIT, CHIKODI is a co-operative society registered under Karnataka co-operative

society’s Act in 1969. The industrial license number of the factory is L-25/N-250/-LC dated

16/10/1970.

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

distance of about 10Km from Chikodi town .and the factory at present has an attractive campus

with magnificent buildings over it.

Agriculture was continues to; be an extremely important sector in our country and

cooperative system, as one of its main pillars providing vital support services, is crucial for the

transformation of agriculture. It is how inspired our founder Late Sri. Chidanand B. Kore, an

agriculturist and a co-operator, to establish this factory during 1972-73 with the financial support

from cane growers of this area and the State Government. With an initial crushing capacity 1250

TCD and as a stand alone sugar industry, lour factory had faced a lot of problems all these years

in coming out as a viable unit. Though this factory had emerged in this area with a meager

beginning, it had not only provided a source of income for forming community but also created a

sustainable employment opportunity in this rural area.

After a lot of dispute on location of plant, near Nanadi village, the construction work

started in year 1971 and comp elected in the year 1974. The factory was inaugurated by Vice-

president Shri B.D Jatti on 6th November 1974. The regular production has been started from

December 1974.

The factory started on 5/3/1969 with initial Crushing capacity to the extent of 1250 TCD

per day began during the year 1974 with total expenditure of Rs.337 lakhs.

The area of operation covered 111 villages of which 102 villages are from Chikodi

talukas, 5 villages are from Chikodi taluks, 5 villages are from Raibag taluka and 4 villages are

from Athani taluka.



At present total sugar cane supplied to this sugar industry is from 20,000 acres with

average yield per acre of 25 MT.

The entire plant and Machinery has been supplied by m/s National Heavy Engineering

Co-operative Ltd. Pune, A co-operative institution (for Rs. 1990 lakh and 3500 TCD plant) has

also been installed to meet the present requirement of the Crushing capacity. The DKSSK, at

present is equipped with modern machines and skilled personals.

The crushing capacity was enhanced from 1250 TDC to 2000 in 1984-85 and from 2000

TCD to 3000 IN 1993-94. The factory house hold expenses of factory from 3500 to 5500 TCD.

Every expansion was not easy and had created a financial set backs due to the lack of

professionalism both in technical and financial managements. Thus over the period of two and

half decades, the factory had grown only in sizes but not adopted the range of different bi-

product activities and had suffered due to a weak governance on efficiency, effectiveness,

adaptability and internal and external accountability in the management. These things have

brought the factory almost to the brink of sickness. Besides resulting a huge negative net worth

and ever-high accumulated losses. However this cooperative and rural based industry must

succeed if the poor farmers and the rural unemployed youths have to be prosperous.



SHREE D.K.S.S.K.N.-CHIKODI,

Taluka – chikodi, dist.- Belgaum

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

Location : Nanadi Village.

Tal.-Chikodi, Dist.- Belgaum

Karnataka.

Regd. Office : Chikodi.

Ph. No. – 08338-276931 To 35

Fax: 08338 – 276105

E-Mail – [email protected]

Construction : Building Layout, Garden & Light

Facilities.

Capacity : 5500 tones crashing per day.(Tcd)

20.7 M. W. Power Generation.

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

Turnover : 500 to 600 Crores / Anum.

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


mailto:[email protected]


Nature of Business

Sugar sector is one of the large scale industries in manufacturing sector. Now a day the

competition in sugar sector is very high. SHREE DOODHAGANGA KRISHNA SAHAKARI

SAKKARE KARKHANE NIYAMIT, CHIKODI is a co-operative society registered under

Karnataka co-operative society’s Act in 1969. The object of business is to encourage proper

devolvement of agricultural industrial amongst members on co-operative lives by promotions of

co-operative and joint forming methods so as to secure best merits of modern large scale

agriculture production to the owners of the lands. The nature of business is to encourage self

help, thrift and co-operate amongst member

Vision, mission and quality policy

Vision

“Total customer satisfaction”

Mission

Encourage agro-based co-operative industry.

To develop co-operative movement in rural sector.

To encourage the farmers to grow sugar cane for production of sugar and its by-

products.



AIMS & OBJECTIVE OF THE COMPANY

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

amongst members on Co-operative lives by promotions of principal and methods of Co-operative

and joint forming methods so as to secure best merits of modern large scale agriculture

production to the owners of lands and for this purpose.

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

b) To acquire lands either by way of purchase or otherwise for cultivation of sugar cane and

other cost and for erection of building. Godawns staff quarters etc and for installations of

machineries.

c) To manufacture sugar jogger and their by products out of sugar-cane grown and supplied

by members of the society and other and to sell the same to the best advantage.

d) To under take such other activities as are identical and conductive to the development of

the society etc.

e) To acquire and install machinery for the utilization of the product and buy raw material

and sell finished product is the course of utilizing and marketing the by products.



OWNERSHIP PATTERN

The authorized share capital of the Society shall be Rs.172,000,000 divided in to total

25,676 shares.

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

reserved for the grower members called as “A” Class.

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

reserved for Co-operative Institutions. Called as “B” Class.

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

Karnataka/Maharastra called as “C” Class.

iv) Rs.38,48,000/- dividend in to 984 shares of face value of Rs.4,000/-each reserved

for non grower members called as “D” Class.

INFRASTRUCTURAL FACILITIES

Nearer to raw materials.

Good transportation facilities.

Nearer to rivers place. (Krishna River)

Good networking.

Proper accommodation for its employees.



ACHIVEMENTS AND AWARDS

ACHIEVEMENTS

STAI, SISSTA & DSTA in their recent 8th annual convention at Hyderabad held on 13-

08-2005 have honored with the most prestigious award as the “THE BEST

EFFICIENCY & PERFORMANCE SUGAR FACTORY” in the country for the year

2004-05. The award was given by Hon’ble Union Minister for agricultural, food & Civil

Supplies, in presence of Hon’ble Chief Minister of Andhra Pradesh.

The Karnataka State Co-op Federation Ltd. had adjudged as “The Best Co-operative

Sugar Factory in the State” and AWARD had been given to us through Hon’ble Chief

Minister of Karnataka, on 14/11/2004.

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

“excellence Award” through Deputy Chief Minister of Karnataka for having developed

efficiently 20.7 MW Co-gen Power Project on the occasion of RAJIV GANDHI

AKSAYA URJA DIWAS ON 20/8/2004 .

The companies have the Honour of achieving the Highest Sugar Recovery @ 11.80% in

Southern part of India for the year 2001-02. And 11.90% for 2002-03 also.



AWARDS

The Karnataka State Cooperative Sugar Factories Federation Ltd., Bangalore had honored

the company with the following awards for the:-

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

2. The “Best Administration Award” to the Managing Director with a cash prize of

Rs .10,000/- and a certificate.

3. The Best chief Chemist Award with Rs.5,000/- Cash prize and a Certificate.

4. Best chief engineer with award worth of Rs.5,000/- cash prize and certificate.



PRODUCT PROFILE

Sugar is regular product that we daily use but we know only one type of the sugar but

there are many types of the sugar are available in the market. Sugarcane in India is used to make

either sugar, khandsari or gur. However, sugar products produced worldwide are divided into

four basic categories : granulated, brown, liquid sugar and invert sugar.

1. Granulated Sugar

There are many different types of granulated sugar. Most of these are used only by food

processors and professional bakers and are not available in the supermarket. The types of

granulated sugars differ in crystal size. Each crystal size provides unique functional

characteristics that make the sugar appropriate for the food processor's special need.

2. Brown Sugars -

This sugar is a raw sugar which has been partially processed, removing some of the

surface molasses. It is a blond color with a mild brown sugar flavor and is often used in tea

3. Liquid Sugars

Liquid sugars were developed before today's methods of sugar processing made

transport and handling granulated sugars practical. There are several types of liquid sugar. Liquid

sucrose (sugar) is essentially liquid granulated sugar and can be used in products wherever

dissolved granulated sugar might be used. Amber liquid sucrose (sugar) is darker in color and

can be used where the cane sugar flavor is desirable and the non-sugars are not a problem in the

product.

4. Invert Sugar

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

glucose and fructose. Available commercially only in liquid form, invert sugar is sweeter than

granulated sugar. One form of liquid invert was specially developed for the carbonated beverage



industry and can be used only in liquid products. This liquid sugar is actually part invert sugar

combined with part dissolved granulated sugar. Another type, named total invert sugar syrup, is

commercially processed and is almost completely invert sugar. It is used mainly in food products

to retard crystallization of sugar and retain moisture.

PROCUREMENT

The factory obtains the sugarcane, which is required from more than 1000 farmers and by

the company farms and others raw materials which are required for the operation is taken from

the vendor there vendors will be evaluated on the basis of price and quality and then the required

raw materials will be taken for the efficient vendors.

The transport of sugar cane from farmers to the factory will be engaged throng Lorries

which will be taken through bidding at the time of harvesting and also farmers themselves supply

by their own bullock carts or by tractors.

CANE WEIGHMENT

There are 12 outlaying weigh bridges situated round about Chikodi for delivering the

sugarcane from the farmers. Double check has been provided over the weighment of cane

transported from out stations.

OPERATIONS

The sugarcane, which is carried by Lorries or other, will be directly fed to the machine

where the initial process starts. At the starting point these are knives which cuts sugar cane

bunches into individual sugar care.



After this in the next step there are sharp cutter which cuts the sugarcane bunches into

very small pieces. Then it will go to trade marbs (a series of rollers used for crushing purpose)

for crushing. Then the juice produced will go for further processing and the Bagasse will be lift

out their itself. Then they add flocculent [used for mud setting] milk sanitation etc and then after

it will go through pans and Masscuite for this Masscuite they will add sodium Hydro Sulphite (to

bleach the masscuite) and it will be separated out and the molasses will be send to distillery and

they white sugar will be bagged.

BYPRODUCTS OF SUGAR CANE

The chief by products of sugar manufacturing are -

1) Bagasse

Bagasse is the by product of sugar left behind after crushing of sugar cane. It is used as a

fuel in the sugar factory boiler. Excess Bagasse finds use as raw materials in paper

manufacturing industry.

2) Molasses

Molasses is a by product of Sugar refining chiefly used for alcohol production. The entire

molasses output is routed to the distillers unit which is maintained by the organization.

3) Pressmud

Pressmud is the by product generated by cane juice filtration during sugar manufacture,

currently Pressmud is used as a fertilizer in sugarcane cultivation.

AREA OF OPERATION



The area of operation of the society shall be confined to the following villages of chikodi,

Athani, Raibag Talukas of Belgaum District and Jamakhandi Taluka of Bagalkot District of

Karnataka State and villages of shirol, kagal Talukas of Kolhapur District Maharastra State only.

COMPETITORS INFORMATION

There are other co-operative and the private sugar factories in the surrounding area are the

main competitors of the . SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE

KARKHANE NIYAMIT, CHIKODI

Among from that some are listed in the stock exchange they are

1. Shree Renuka Sugars

2. Ugar Sugar Works, Ugar

And other co-operative and private sugar industries are as

1. Hirankeshi sahakari sakkare karkhane niyamit ,Sankeswar

2. Halsidhanath sugar factory , Nipani

3. Shivashakti sugar ,Yadrav

4. Viswanath sugars , Belladbhagewadi.

5. Deshbakt Rantapanna kumbhar sakhar karkhana , Ichalkaranji (maharastra)

6. Datt sugars , Sirol (maharastra)

7. Shree guru data sugars (maharastra)

8. Jawahar sugars hupari (maharastra)

9. Venateswara power project Kolhapur (maharastra)

10. Sharad sugars, Narde (maharastra)



PRODUCTION PROCESS

The main raw material in the production of sugar is.

Sugar cane.

The raw materials has to go through following stages before it become finished product.

The process in each stage is as under

STAGE: 1 SUGAR CANE SUPPLY.

The harvested and transported sugar cane received is weighed on the weigh Bridge. It is

unloaded and kept on the feeder tables. It is fed to the cane carrier as per the requirement.



STAGE: 2 MILLING OF CANE/ EXTRACTION OF JUICE.

This cane is passed through leveler and furzier by making the fine making the fine

chips. It is crushed through series of mills. Imbibitions hot water is added prior to the last mill

to extract more possible sugar. The bagasse from the last will is carried through bagasse

conveyor and required quantity of bagasse is fed to the boilers and excess quality is sent for

storage.

STAGE: 3 CLARIFICATION AND EVAPORATIONS.

The juice from all the mills is pumped to juice weighting scale. It is heated to about 70-

77’o c in the juice heaters. It is taken to continuous juice sulphitor in which milk of lime and

sulphur dioxide gas are adjusted to maintain ph 7.0. It is again heated in juice heaters to about

100 to 105’oc and sent to continuous clarifier. Clear juice is taken to multiple effect evaporators

to concentrate up to 60oc Brix.

The settled mud from the bottom of the clarifier is taken to mud mixer to mix with

beguile and taken to continuous vaccum filer. The filtrate is transferred to raw juice receiving

tank for treatment. The adhered mud on the screens is scraped and sent out as filter cake, which

will be used for composting the manure.

STAGE: 4 CRYSTALLIZATION PURGING AND SUGAR MANUFACTURE

The concentrated syrup from evaporator is taken to syrup sulpthitor to adjust Ph 4.8 to

5.2. This is stored in the supply tanks and fed to “A” masscult boiling by taking B-seed as a

footing. It is concentrated to 92o Brix and dropped to the crystallizes. This masscult is purged



in the centrifugal machines. The adhered crystals are scraped to hopper and treated with hot air

and cold air blower. It is sent to grader the size for gradation. This graded sugar is stared in

SILOS. Weighed and bagged sugar bags are transferred to respective godowns for stocking.

STAGE: 5 FURTHER PROCESS

While purging A- massecuite the A-light molasses received is sent to supply tanks and

fed to ‘A’- molasses is sent to supply tanks and fed to ‘B’- masscult boiling with b-grain as

footing. This is purged in the centrifugals. This sugar is used as B- seed and excess is melted

and fed to ‘A’- masscult’s. White purging low purity B- Heavy molasses obtained is used for

boiling C- masscult with C- grain as footing.

This C- massecuite is taken for purging in C.F.W. Centrifugal machines. The final

molasses is separated, weighed and sent to storage tanks. C.F.Magma is sent to melt supply

tanks and fed to ‘A’ massecuite boiling. C-light molasses obtained is tired in supply tanks and

used for C- massecuite boiling and C- graining also.0



MC KINSEY 7 S MODEL

The first three element are strategy, structure and system are considered as hardware

of success, the meet four elements are style, staff, skills and shared values / super ordinate goals

are the software of any company.

1. Structure

The general admission of the company is carried out by the following departments and these are

downwards communication in the company. The information flows from the top level of

management to the lower levels.



2. System

System refers to how the production system, distribution, information system and security

system is maintained in its company.

a. Production System

The process of production consisting of input of sugar come and output of the

sugar

b. Distribution System

The distribution system of the precuts produced is in the following way:

Direct sales are made with in the state and outside the state.

Indirect sales are made outside the country and the depot sales are also made.

The producers are also sold directly to the consumers or sold to the

wholesales.


CHAIRMAN

MANAGING duDIRECTOR

SENIOR GENERAL MANAGER

HEAD OF THE DEPARTMENT

SECTION


c. Information System

Structure of information system

d. Security System

The DKSSK has strict security system.

In the maintenance of accounts after the record have been closed, the records are kept in

the room and closed the room is opened only with permission of higher authority.

If the visitors went to inter they have to take prior permission with the authority and after

entering they are not suppose to go any dept other then the department from whom they took the

permission.



3. Strategy

The way in which a business aims to improve its position in relation to its competition is

embodies in its strategy or the way of doing something in an organization.

In DKSSK, introduce new technologies and products strategies importance in time with

national objective to improve quality reliability of products there by attaining the international

standards.

4. Skills

Skills here refer to how the training will be given to the employees and employees.

The training will be given in 2 months they are

a) On the job

This is one of the oldest method, under this method, the individual place is on the

regular job and taught the skill necessary to perform that job on the job training has the

advantage of giving first hand knowledge and experience under the actual working conditions.

This training is given to employees.

b) Off the job

In this methods trainee is separated from the job situations and his attention is

focused upon learning the material related to his future job performance. There is an opportunity

for freedom of expression for the trainees.

5. Style

The style which is portrayed to outside world is derived from the style and behaviors exhibits

inside organization. The internal style of the organization effects new staff feels thinks and does

their jobs. Therefore an organization is reflection of its structure.

a) Top down / Bottom up



At the time of policy framing, the style flows from top to bottom. If the policy has to be

framed then the policy has to be taken by upper level & it flows towards lower level.

But when the opinion of the policy is to known, at that time the style flows from bottom to

up. This is to know the attitudes of the employees about the policy which is framed by the upper

level.

b) Authoritarian / Participative

Only the upper level is having the authority to make the decisions in the factory.

Regarding policy matter

Board of management will take the decision in case of policy making.

Financial matter

If the financial matter is within the amount of Rs 20,000/-, Managing Director will take the

decision. And if financial matter is more than Rs 20,000/-, then the board will take the decision.



6. Staff

Good hard working citizen play essential role in the development of nation. The employees

are responsible for the success or failure of company.

The company has totally 696 workers are working in the company. They are divided as follows

No. of Workers

1) Permanent worker 325

2) Seasonal workers 204

3) Consolidated worker 167

696

7. Shared values

Shared values are refers to company policies. In Mysore Sugar Company limited

the following policies are maintained.

Quality policies

Environment policies

T.P.M. policies (Total productivity management)



QUALITY POLICY

Quality leading to customer satisfaction shall be the top priority, this shall be

achieved by complying to the requirements of the quality management system and continuously

improve its effectiveness.

ENVIRONMENT POLICY

The DKSSK is committed to comply with the requirement of relevant environment

regulation and standers by implementing environment management system and the continually

improve its effectiveness.

TOTAL PRODUCTIVE MANAGEMENT

The DKSSK is committed in maximizing limited is committed in maximizing

overall plants effectiveness to make Mysore sugar company a world class company through total

productive manufactured by

Promoting automates maintenance culture.

Involving all employees and building culture.

Minimizing the losses and reduced the cost.



PROCEDURE FOLLOWED IN SALE OF SUGAR, MOLASSES, BAGASSE,

RECTIFIED SPIRIT AND ARRACK

SUGAR

Domestic Sale of Sugar

The free sale released by Government of India is sold in the domestic market through

tender system. Sugar tenders will be called periodically from the various sugar traders. The

traders will be called advance about the grade and quantity being offered in tender over

telephone. The sugar tender are some time will be conducted at Karnataka Sugar Institute,

Belgaum and also at this factory site.

The rates will be collected over telephone from the various parties along with grade and

quantity of sugar required by them. The committee will take decision on allotment of sugar to the

parties who have offered higher price. Karkhana has maintained Sugar Sale Tender register for

recording the offers received and allotment made to the parties. The parties who have purchased

sugar in the tender will be sold against 100% payment. The rate of domestic price of sugar in the

state and the rate of neighboring sugar factories will be compared while selling the sugar in

tenders.

Export of sugar

When the international price of sugar is remunerative compared to domestic price of

sugar, we do export some of the stock of sugar. The sugar export is mainly undertaken through

the mercantile export or through EXIM Corporation New Delhi. The price for export sugar is

negotiated taking into account, the prevailing international sugar price and the price being

offered by various sugar factories for export of sugar. Once the rates are finalized, they will enter

into agreement with the party. Then the party will obtain a release orders from the Chief Director



of sugar, New Delhi and necessary excise bond from the concerned authority. After completing

all the necessary formalities Sugar will be delivered to the party for export against full payment

of the consignment.

After the export shipmen are completed, necessary documents in proof of export of

consignment will be collected from the parties. The same will be submitted to the excise

department.

Molasses Bagasses

For sale of Molasses and Bagasses we use to make a vide publicity in the various

news papers in Karnataka and Maharashtra and also floating the enquiries to the prospective

purchasers in order to get competitive offers and better price realization.



SWOT ANALYSIS

STRENGTH:

1. Good Administration

2. Healthy management labor relations

3. Largest distribution

4. Superior product quality

5. Skilled and efficient staff and labor force

6. Effective cost control

7. Maximum profitability due to various by products

8. Well structured distribution channel.

9. Improved infrastructure.

10. Automated highly sophisticated machines.

WEAKNESS:

1. High cost of production

2. No control on minimizing the losses in process

3. Company can’t sell as much as sugar in the market at any specific time, as sugar release

mechanism is controlled by government of India.

4. Most of the employees feel that light is not enough to there work at night shifts.



OPPROTUNITIES:

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

2. Restricted market opportunities shirked a better price for finished products.

3. Borrowing of law cost funds.

4. Reducing the overhead expenditure.

5. To provide comfort and convince to employees for doing the work.

6. To facilitate the smooth running of the manufacturing process.

THREATS:

1. Due to uncertain rainfall procurement of raw material is being affected

2. High competition in procurement of raw material.

3. The main raw material sugarcane may not sufficiently be available in future.

4. Change in various government policies.



Part - b



Design of the study:

Statement of the problem:

Financial analysis being an integral part of overall corporate management and it is one

of the powerful tools of financial performance analysis. The analysis of financial statement of

SRSL is done in order to know the company’s financial position.

Objectives of the study:

The following are the main objectives of this study

The main purpose of doing this project is to analysis the company’s financial statement

for the last 3 years

To bring out the results of Financial Statement through analysis.

To study about the d.k.s.s.k.niyamit. chikodi in general.

To judge the financial position of the d.k.s.s.k.niyamit. Chikodi is satisfactory or not.

Scope of the study:

This study is exclusively conducted for d.k.s.s.k.niyamit. chikodi. It covers period 5 years

financial statement analysis. The trends indicated may differ from year to year as the pattern of

investments, borrowings etc change. This also covers study in general about the company and

industry. But comparison of financial indicator which the industry of beyond the scope of this

project.



Methodology:

This project is an analytical research where in the researcher has to use the available

facts as information and analyze these to make a critical evaluation of materials. This is also an

applied research with an aim to find a solution for immediate problems facing industry or the

firm.

The methodologies followed in the analysis of the financial statement of Ratio analysis.

Sources of data collection

1. Primary data : The data required for the project was collected through the discussion

with finance manager and various executives in the company.

2. Secondary data : The major source of data for this project was collected from annual

reports, profit and loss account, manuals & some more information collected

through the internet.



Plan of analysis

This study is conducted with the help of statistics figures & techniques like Graphs &

charts and interpretation

Comparative financial statement

Comparative financial statement is those statements which have been designed in

a way so as to provide time perspective to the consideration of various elements of financial

position embodied in such statements. In these statements, figures for two or more periods are

placed side by side to facilitate comparison.

But the income statement and balance sheet can be prepared in the form of

comparative financial statement.

Ratio analysis:

Ratio analysis is widely used tool of financial performance analysis. Ratio is the numerical or

quantitative relationship between two items or variables. The ratio analysis is the systematic

use of the ratios to interpret the hidden meanings lying in the financial statements. This reveals

the strengths and weakness of the comp any along with its performance and current financial

condition. The relationship in terms of ratios can be expressed as

Percentage e.g. net profit as percentage of sales

Fraction e.g. net profit is one-fourth of sales.

Proportions of numbers e.g. relationship between net profit and sales.

The ratio does not add to the existing information in the financial statements, but they do

not reveal the relation in more meaningful way so as to enable us to draw conclusions from

them. The rationale of ratio analysis lies in the fact that it makes related information



comparable. A single figures it yield significant inferences. Further comparison single ratio

should be done with the effect in revealing the true position of the company.

This comparison can be done in the following ways:-

Trend ratios.

Inter-firm comparison.

Comparison of items in the single year’s financial statements of the company.

Comparison with standards or plans.

The significance of each ratio is described which is supported by the computation of the

ratios for the four financial years. The same is computed with previous year for the further

analysis of financial performance of DKSSKN.

Types of Ratios:

The ratios can classified in the following broad main groups

1. Liquidity ratios.

2. Turnover or activity ratio.

3. Profitability ratios.

4. Expenses ratios.

5. Capital structure or leverage ratios



1. Liquidity Ratios :

Liquidity of the company means its ability to meet its current and short term obligations

when they become due for payment. It reflects the short financial strengths and solvency of a

company. The short term creditors of the company are interested in the short solvency or

liquidity of the company. But, from the point of utilization of funds liquidity or excess of it may

end with the funds lying idle. Hence, a proper balance between the two contradictory

requirements i.e. liquidity and profitability is required for the efficient financial management.

en

The following are the some ratios, which give indication about the liquidity of the

company. These ratios are as follows:

Current ratio.

Quick ratio.

Current Ratio:

The current ratio is the ratio of current assets to the current liabilities. It is calculated by

dividing current assets by current liabilities

The current assets of the

company represent such assets, which can by converted into cash within sort time or period

which is normally not exceeding one year and includes cash and bank

balances, marketable securities, inventory of raw material, work in process and finished goods,

net debtors, bills receivable. Similarly total of current liabilities includes sort term liabilities

namely trade debtors, bills payable, outstanding expenses etc.


Current Ratio = Current Asset/Current Liabilities


The current ratio is measure of sort term solvency of the company. It indicates the

rupee of current asset available for each rupee of current liability. The higher thecurrent ratio

the larger the amount of rupees available per rupee of current liability and the greater the

safety of the sort term creditors. This margin of safety to the creditors is essential due to the

unevenness of the flow of the funds through current assets to the current liability account.

Current liabilities can be settled by making the payment whereas current available to liquidate

tem are subject to shrinkage for various reasons like obsolesces of inventory, bad debts,

unexpected losses and son on. Thus the current ratio represents the short term liquidity

“buffer”.

A high ratio indicates better liquidity position. But, it should be noted that very high current

ratio is the indicative of ineffective utilization of current assets due to high amount of fund

locked in high level of current, assets (i.e. generally a high amount of inventory). The norm for

this ratio is 2:1 which means even if 50% of the current assets are available for the liquidation;

it can meet the current liabilities. The high ratio is also possible when the long term sources of

funds are available for financing the part of the current assets. This avoids the embarrassing

situations where the sort obligations can be met due to temporary liquidity crunch.

This is due low reliance on sort-funds, a standard norm of the current ratio depends on the

type of the industry as this govern the level of current assets requirements (e.g. public utility

companies have low requirement of the current assets while the whole-sellers require high

level of current assets.

The limitation of the current ratio is that it gives only quantitative information rather than

qualitative information. This is due to fact that it does not consider the composition of the

current assets i.e. the partitions of the different current assets, since ability of the different

current assets to liquidate is different. Inventory treated as the most illiquid and then comes

the debtors and cash is the most liquid.



QUICK RATIO:

Quick ratio establishes a relationship between quick, or liquid, assets and current

liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon

without a loss of value. Cash is the most liquid asset. Inventories are considered to be less

liquid. Inventories normally require some time for realizing into cash; their value also has a

tendency to fluctuate. The quick ratio is found out by dividing quick asset by current liabilities.

Quick ratio = Current assets—Inventories

Current liabilities

2. Turnover or Activity Ratios :

The Turnover Ratio or Activity ratios are concerned with measuring the efficiency in asset

management . Hence some times these ratios are also called as efficiency or asset utilization

ratios, these ratios reflect the management efficiency in utilization of the company’s assets vis

as vis its operations.

The speed and rapidity with which the assets are utilized to generate sales show the efficiency

with which assets are used. The greater the rate of turnover or equal. These ratios are the test

of relationship between sales (or cost of goods sold ) and various assets of company. Depending

on various types of assets there are various types of activities ratios.



* Inventory or stock turnover ratio:-

It is computed by dividing the cost of goods sold by the average inventory.

The cost of the goods sold can also be computed as net sales less gross profit.

The average inventory is computed as the simple average of the opening stock and closing

stock of the inventory. This ratio indicates number of times inventory is replaced during the

year. In case of seasonal industries, the average can be computed by taking simple average for

opening stock of a month for a year, which will smoothen out fluctuating in the inventory. In

some cases if the data is not easily available, then this ratio can be calculated by dividing the

net sales by closing inventory.

In general, a high inventory turnover ratio is better, as it shows the efficient

management of inventory. but, a very high inventory turnover ratio can be an indicative of

under investment in a very low level of inventory. A very low level of inventory serious

implications. It will adversely effect the production due to “out of stock” situation which in turn

effect the ability of a company to meet customer demand. Conversely a very low inventory

turnover ratio is also not good as this indicates excessive inventory or over investment. In

inventory due top this the funds are blocked in excessive inventory, which may impose serious

problem in working capital management.


Inventory Turnover Ratio= cost of goods sold / average inventory


The inventory turnover ratio can also be expressed in terms of days or months of cost of

goods sold.

Asset Turnover Ratios:

This ratio is also known as the investment turnover ratio. This is based on the relation

between the cost of goods sold and assets of the company. The important ratios this are-

Working Capital Turnover Ratio :

A firm may also like to reduce net current assets to net sales. It may compute working

turnover by dividing net sales by the net working capital

Higher ratio indicates efficiency of using working capital to maximize the sales and vice-

versa. But too high ratio indicates shortage of working capital of firm.

The reciprocal of this ratio indicates that the availability of working capital on one

rupee of sales.


Inventory Holding period = 365/ Inventory Turnover Ratio

Working Capital Turnover Ratio = Net sales / Net working capital


Accounts Receivable (debtors)Turnover Ratio:

This ratio is computed by dividing the sales by debtors.

This ratio shows how quickly receivable or debtors are converted into cash .It is test of

liquidity of debtors of the company.

Debtors collection period -

This ratio will be expressed in terms of days or months gives the average collection

period. It is calculated as follows-

This gives time period after which the debtors are converted into cash on an average.

This is important from the point view of efficiency of collection. This average collection period

if compared with the credit period given to the customers of the company, will give a lot of

insight into receivables management of the company. Hence, in general a high turnover ratio of

debtors is or short collections period is preferable.

A very collection period would imply either poor credit selection or an inadequate

collection effort . The delay in the, collection of receivables affect liquidity position of the

company seriously and there is possibility of a large number of accounts receivables becoming

bad debts.


Debtors Turnover Ratio = Sales / Average Debtors

Average collection period = 360 / Debtors Turnover Ratio


Creditors Turnover Ratio :

This ratio is the ratio between purchases and creditors outstanding. The creditors

turnover ratio as follows-

A low ratio reflects liberal credit terms granted by the suppliers, while a high ratio

shows that accounts are settled rapidly. It is important ratio for analysis, as company can

reduce its requirement of working capital by relying on supplier’s credit.

Accounts payable period ratio -

This ratio can be expressed as the accounts payable period in terms of days or months.

This ratio shows the extent to which the trade creditor are willing to wait for payment.

The velocity of creditor (i.e. accounts payable period) on higher side reflects better negotiation

for the credit period. The velocity of creditors should be compared with the credit period

received from the suppliers. This should show the efficiency of the management in negotiation

for the credit terms.


Creditors turnover Ratio = Purchases / Average Creditors

Account Payable Period = 360 / Creditors Turnover Ratio


3. Profitability Ratio:

The management of a company or the company itself is naturally interested to measure

operating efficiency. Also, the owners invest their funds in the company in the expectation of

reasonable return to its share holders depends on the profits earned by it. Profitability an

important measure of efficiency. It also indicates the acceptance of the public the product and

its effectiveness in the market. Also, the profits provide the money for the repayment of the

incurred to finance the project, expansion programme and other related activities. The

profitability ratios help in measuring the profitability of the company. Various types of such

ratios are explained below,

Gross profit Margin :

Gross profit margin represents the relation between the profits and sales.

Gross profit is the result of the relation between prices, sales value and cost. Any

changes in these well effect the gross profit. A high gross profit margin is the of good

management. As it implies that the cost of goods it self might have reduced.

Operating Profit Margin:

This ratio measures the relationship between operating profit and sales.


Gross Profit Margin = Gross Profit / Net Sales

Operating Profit Margin = Operating Profit / Net Sales


The operating profit means the profit before the interest and taxes and before considering

the effect of non trading transactions. ( This may also be considered as after interest and tax)

PAT/EBIT. This ratio indicative management ability to operate the business so that it should be

sufficient to take care of the cost borrowed funds and the margin of reasonable compensation

should be left for the owners.

Net Profit Margin :

This ratio measures the relationship between and profit after tax and net sales

The profit tax is the total profit (i.e. including operating profit and non operating) after

interest and tax. This ratio indicates the percentage of the net sales left after paying the interest

and taxes. This includes the amount available for the apportionment to its owners for providing

their capital at risk.

The high net profit margin should ensure adequate return to the owners as well as

enable company to withstand adverse economic conditions and selling price declining, the cost

of production is rising and the demand product is falling.

This gives the return on total assets employed. But it throws no light on the profitability

of the different sources of funds, which finance the total assets.

Return On investment:

It is the indicator of relationship between net profit and total assets (capital employed).


Net Profit Ratio = Net Profit / Net Sales


This gives the return on total assets employed. But it throws no light on the profitability of the

different sources of funds, which finance the total assets.

4. Expenses Ratios :

It is computed by dividing sales. There are various expense ratios

Material Cost Ratio = Material / Sales

Manufacturing Expense Ratio = Manufacturing Expense / Sales

Cost of Goods Sold Ratio = Cost of Goods / Sales

In case of lower ratio is favorable while higher one is unfavorable.

DATA ANALYSIS


Return On investment= operating profit*100/ capital employed


Current Ratio



year CA CLDKSS

Krenuka

bajaj

hindusta

n

Dhampur

Sugar

Ugar

Sugar

Bannari

amman

2007 1714896380 1472956367 1.16 0.69 1.72 0.63 0.88 1.9

2008 1537601227 1188967322 1.29 0.9 2.46 0.29 0.61 1.26

2009 1878279994 1547321323 1.21 1.15 2.55 1.31 0.62 1.29

2010 2353106528 1992183097 1.18 0.71 1.6 0.95 0.76 1.21

2011 2971601903 2060859016 1.44 .-- 1.78 0.82 0.72 0.93

2007 2008 2009 2010 20110

0.51

1.52

2.53

3.54

4.5

Current Ratio

DKSSK renuka bajaj hindustanUgar Sugar Bannariamman Sakthi Sugars

Interpretation and Analysis:



The above table and diagram shows that the current ratio in the year 2006-07 was 1.16

and then it decrease to 1.29, 1.21 and 1.18 in the respective years of 2007-08, 2008-09 and 2009-

10 and in the year 2010-11 it increased to 1.44

The normal current ratio is 2:1. The above table current ratio of the DKSSK is below the

standers so it is not satisfactory. If we compare DKKSSK current ratio with the other sugar

factory current ratio that is Renuka Sugars, Bajaj Hindustan Sugars, Dhampur Sugars, Ugar

sugars and Bannariamman sugars no one meet the required standard of the 2:1 except the Bajaj

Hindustan Sugars they had the ratio of 2.46 and 2.55 in the respective years of the 2007-08 and

2008-09 and they are having high ratio compare to all other sugar industries. And Ugar sugars is

having lowest ratio in the all other sugar industries

Quick Ratio:-



year CA-INV CL ratio renuka

bajaj

hindusta

n

Dhampur

Sugar

Ugar

Sugar

Banna

riamm

an

Sakthi

Sugars

2007 1683947537 1472956367 1.14 1.45 1.54 1.23 0.74 0.88 6.33

2008 1506139749 1188967322 1.27 1.15 1.71 0.58 0.71 1.28 4.13

2009 1828608882 1547321323 1.18 0.88 1.9 1.08 0.67 0.89 1.21

2010 2286427485 1992183097 1.15 0.42 0.85 0.49 0.48 0.68 1.29

2011 2921786705 2060859016 1.42 -- 1.35 0.33 0.38 0.95 0.79

2007 2008 2009 2010 20110

1

2

3

4

5

6

7

QUICK RATIO

DKSSK renuka bajaj hindustan Dhampur SugarUgar Sugar Bannariamman Sakthi Sugars

Interpretation:



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

condition of the company. The quick ratios of the company for five years from 2006-07 to 2010-

11 are 1.14, 1.27, 1.18, 1.15 and 1.42 respectively. By observing five years ratios, the company

found to be sound liquidity position and it is in the increasing trend .

Shakti sugar is having the sound ratio till 2006-07 to 2009-10 that is 6.33, 4.13, 1.21,

1.29 and the ratio is decreased to 0.79 in year 2010-11 Ugar Sugar is the least ratio in all the five

years. In the year 2010-11 the DKSSK is the highest ratio to compare to all other sugar

industries.

Assets turnover ratio:-



year sales assets DKSS

K

renuka

Bajaj

hindusta

n

Dhampu

r Sugar

Ugar

Sugar

Bannar

iamman

Sakthi

Sugars

2007 1536921221 30215368510.51 1.26 0.65 2.35 0.77 1.3 1.5

2008 1773104125 28725355440.62 2.26 0.58 0.76 1.93 1.05 1.19

2009 2302348871 32638141630.71 1.59 0.47 0.54 1.12 0.97 1.16

2010 2614351672 52211761690.50 3.06 0.44 0.74 1.15 0.85 1.08

2011 3009539076 55441082930.54 - 0.72 1.68 1.55 0.74 1.66

2007 2008 2009 2010 20110.00

1.00

2.00

3.00

4.00

5.00

6.00

Assetsturn over ratio

DKSSK renuka bajaj hindustan Dhampur Sugar Ugar Sugar Bannariamman Sakthi Sugars




The above table and diagram shows the relationship between the fixed assets and sales.

The DKSSK sale is 0.54 times more than the fixed assets 2010-11. The highest ratio is in

year2008-09 is 0.71and lowest in the year 2009-10 is 0.50 The DKSSK is the least performer in

the asset turnover ratio compare to all other sugar industries .

Shree Renuka sugar is having a handsome ratio compare to all. It is having 3.06 ratio in

the year 2009-10 and the DKSSK is having the lowest ratio in all it is having below 1 ratio in all

the years.

Debtors turnover ratio



year sales debtor DKSS

K

Renuk

a

Bajaj

hindusta

n

Dhampur

Sugar

Ugar

Sugar

Bannari

amman

Sakthi

Sugars

2007153692122

1

27293100

5 5.63 17.24 19.88 20.09 5.76 11.6 18.63

2008177310412

5

37090428

2 4.78 40.26 23.21 11.83 15.17 8.58 16.63

2009230234887

1

27433389

5 8.39 29.22 45.24 10.44 12.65 9.29 44.63

2010261435167

2

48440954

6 5.40 26.23 29.97 11.19 14.68 15.46 31.44

2011300953907

6

38496815

3 7.82 -- 23.73 26.44 18.69 11.32 22.56

2007 2008 2009 2010 20110.005.00

10.0015.0020.0025.0030.0035.0040.0045.0050.00

Debtor turn over ratio

DKSSK Renuka bajaj hindustan Dhampur SugarUgar Sugar Bannariamman Sakthi Sugars




This ratio indicates that how rapidly debts are collected. The DKSSK ratios

for Five years are 5.68, 4.78, 8.39, 5.4 and 7.82 respectively from the year 2006-07 to 2010-

11. The highest ratio was 8.39 in the year 2009.

The DKSSK is having lowest ratios compare to the other factories and the

Bajaj Hindustan sugars is having the high ratio in all factories compare to all five years. And

the Dhampur sugar is having highest ratio 26.44 in the year 2010-11

Fixed assets turnover ratio

year

sales Fixed assets

DKSS

K

renuk

a

bajaj

hindusta

n

Dhampu

r Sugar

Ugar

Suga

r

Bannar

i

amman

Sakthi

Sugar

s

200

7

138174510

2

129630071

2 1.071.31 0.68 2.38 1.26 2.21 1.7

200

8

138966749

2

130744255

2 1.062.26 0.58 0.76 1.93 1.05 1.12

200

9

153988605

8

137428949

2 1.121.59 0.47 0.54 1.12 0.97 1.16

201

0

234299289

1

284288941

8 0.823.06 0.44 0.74 1.15 0.85 1.08

201

1

265054307

6

287379055

7 0.92 0.72 1.68 1.55 0.74 1.66



2007 2008 2009 2010 20110.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Fixed assets turnover ratio



The above table and diagram shows the relationship between the fixed assets and sales.

The DKSSK’s sale is 1.07 times more than the fixed assets 2006-07 and 2007-08 it was 1.06

times. and It is highest during 2008-09 is 1.12 times and 2009-10 and 2010-11 it was 0.82 and

0.92 respectively.

Compare to all sugar industries the Dampur sugars and Shakti sugars are having the

more than 1 times of the ratio in all the five years and Bajaj hinduastan is the least performer in



the all sugar industries it is having 0.72 times and the highest ratio is of the Shree Renuka

sugars in the year 2010 the ratio is 3.06 times.

Gross Profit Ratio

yeargross profit

sales DKSS

K

Renuk

a

Bajaj

hindusta

n

Dhampur

Sugar

Ugar

Sugar

Bannari

amman

Sakthi

Sugars

2007 133349814 1536921221 8.68 14.33 10.4 10.17 6.26 18.56 13.43

2008 151545943 1773104125 8.55 11.24 4.72 -8.66 7.51 6 3.88

2009 327550059 2302348871 14.23 14 10.59 10.25 9.88 19.93 12.86

2010 287021523 2614351672 10.98 10.28 7.22 13.91 -1.76 22.24 12.87

2011 285624205 3009539076 9.49 9.78 4.39 4.44 8.81 2.49



2007 2008 2009 2010 2011

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

Gross Profit Ratio

DKSSK renuka bajaj hindustan Dhampur Sugar Ugar Sugar BannariammanSakthi Sugars

INTERPRETETION:-

The above table and diagram shows the relation ship between the gross profit and net

sales in percentage. The high gross profit ratio to sales is sign of good management as it implies

that the cost of production is relatively high. The DKSSK ratios for five years i.e., from 2006-07

to 2010-11 are 8.64%, 8.55%, 14.23% 10.98% and 9.49% respectively.

In the year 2007-08 the Dhampur Sugar is had the negative ratio of the -8.66% it shows

the company is in loss and the highest ratio found in the year 2009-10 22.24% of the

Bannariamman sugars



Net profit ratio

year DKSSK renuka

bajaj

hindusta

n

Dhampu

r Sugar

Ugar

Sugar

Bannariamma

n

Sakthi

Sugars

2007 1.95 6.72 2.53 10.37 0.98 11.35 10.79

2008 -1.85 5.27 -2.52 -10.19 3.32 6.27 3.98

2009 1.30 6.41 9.06 0.52 3.54 16.73 -6.73

2010 1.90 7.43 1.7 5.88 -4.54 16.08 7.4

2011 0.76 0.24 0.37 0.67 6.46 -4.65

2007 2008 2009 2010 2011

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

20.00 Net profit ratio


INTERPRETETION:-

This ratio is the overall measure of the firms ability to turn each rupee of sales into net

loss. The ratios of the DKSSK for three years are 1.95%, -1.85%, 1.30%, 1.9%and 0.76%

respectively. By analyzing the above ratios it clearly shows that, the company’s profitability is



not satisfactory. But among the five years ratios, it is found that in the year 2007-08 it was in net

loss of -1.85%.

Among all sugar industries the Dhampur sugar is incurred a loss of -10.19% in the year

2007-10 and in the overall performance of the five year the DKSSK is the least performer and the

Bannriamman sugars is the good performer compare to all

Working capital Turnover Ratio

Year sales net W C Ratio

2007 1536921221 241940013.2 6.352488788

2008 1773104125 348633904.9 5.085862563

2009 2302348871 330958671.1 6.956605377

2010 2614351672 360923430.7 7.243507762

2011 3009539076 910742887.5 3.304488146



2007 2008 2009 2010 20110

1

2

3

4

5

6

7

8

working capital turnover ratio

Interpretation:

This ratio establishes relation between sales and net working capital. The ratios for five years

are 6.35, 5.085, 6.96, 7.24 and 3.30times, respectively. The highest ratio was 7.24 times, which

was in the year 2009-10. It may be interpreted that the one rupee of net working capital, the

company has generated Sales of rupees 7.24 and it can be said that its net working capital

rotated in that year.

Debtors Collection Period

Year Debtors Turnover Ratio no of days ratio

2007 5.631171222 360 63.930

2008 4.780489768 360 75.306

2009 8.392506041 360 42.895

2010 5.396986277 360 66.704

2011 7.817631283 360 46.050



2007 2008 2009 2010 20110

10

20

30

40

50

60

70

80

Debtors Collection Period

Credit turnover ratio

year credit sales ratio

2007 555990726 1536921221 2.764

2008 471073459 1773104125 3.764

2009 567376638 2302348871 4.058

2010 692770803 2614351672 3.774



2011 701721051 3009539076 4.289

2007 2008 2009 2010 20110

0.51

1.52

2.53

3.54

4.55

ratio

Interpretation:

This ratio reflects credit terms granter by the suppliers. A low ratio shows

that the liberal credit terms granted by the suppliers, while the high ratio shows that accounts are

being settled rapidly. The ratio for Five years is 2.76 times, 3.76 times, 4.05 times, 3.77 and

4.289 respectively. There was high ratio 4.289 times in the year 2011.

Account Payable Period

year no of days ratio days

2007 360 2.764292908 130

2008 360 3.76396524 96

2009 360 4.057884511 89

2010 360 3.773761337 95

2011 360 4.288796911 84



2007 2008 2009 2010 20110

20

40

60

80

100

120

140

Accounts payable period

days

Material procurement cost to sales

year cost sales Ratio

2007 824642844 1381745102 0.596812569

2008 678014200 1319054052 0.514015479

2009 1173972426 1475308158 0.795747261

2010 1818481560 2245656051 0.809777419



2011 1709192307 2544876887 0.671620822

2007 2008 2009 2010 20110

500000000

1000000000

1500000000

2000000000

2500000000

3000000000

Chart Title

CostSales

Interpretation:

This ratio reflects the relation between the material procurement cost and the

sale . the both sugarcane procurement cost and the sale of the sugar is in increasing order in the

last five years in the year 2011 the DKSSk is a highest sale of Rs 2544879887/- and the highest

cost in the year 2010 is 1818481560/- and the lowest procurement cost and the sales we can find

in the year 2007-08 RS 678014200/- and 1319054052/- respectively

Sugar production cost to sugar sales ratio

year cost sales ratio

2007 1255533218 1381745102 0.908657622

2008 1040995085 1389667492 0.749096522

2009 1771196078 1539886058 1.150212426



2010 2542814454 2342992891 1.08528475

2011 2604089176 2650543076 0.982473818

2007 2008 2009 2010 20110

0.2

0.4

0.6

0.8

1

1.2

1.4

ratio

Interpretation:

The ratio indicates how much material cost incurred on one rupee of sales

the of sugar of five years ratios i.e. from 2006-07 to 2010-11 are 0.908, 0.7490, 1.15, 1.085,

0.9854 respectively.

particular As at As at As at As at As at

31.03.20

11

% 31.03.20

10 %

31.03.2

009 %

31.03.20

08 %

31.03.20

07 %



LIABILITIES -

Share Capital 1365.96 2.34 1354.3 2.45 1343.95 3.71 1336.6 4.10 1321.99 3.91

Reserves & Surpluses 25816.45 44.27 23165.91 41.88 8410.57 23.21 7579.03 23.23 6768.01 20.03

Term loan 2293.97 3.93 3660.09 6.62 4347.98 12.00 5028.35 15.41 4094.98 12.12

Working capital loan 13587.79 23.30 13022.02 23.54 9740.25 26.88 7178.54 22.00 9124.6 27.01

Bank O. D. payable 0 0.00 0 0.00 71.02 0.20 128.36 0.39 84.04 0.25

Statutory and other

deposits 8232.46 14.12 7182.32 12.99 6648.95 18.35 6661.74 20.42 6831.82 20.22

Suspense, sundries &

other 7017.21 12.03 6927.7 12.52 5673.76 15.66 4710.73 14.44 5559.9 16.46

Total Rs 58313.84 100 55312.34 100 36236.48 100 32623.35 100 33785.31 100

ASSETS -

Fixed assets 28737.9 49.28 28428.89 51.40 13742.89 37.93 13074.42 40.08 12963 38.37

Investments 273.81 0.47 169.15 0.31 165.35 0.46 167.32 0.51 26.1 0.08

Current assets 19026.66 32.63 16660.8 30.12 12288.03 33.91 10398.75 31.88 12424.75 36.78

Loans and advances 563.03 0.97 595.5 1.08 981.84 2.71 1014.4 3.11 485.58 1.44

Debtors 3849.68 6.60 4844.09 8.76 3709.04 10.24 2743.38 8.41 2729.31 8.08

Cash in hand 4.67 0.01 15.12 0.03 6.21 0.02 3.06 0.01 3.29 0.01

Cash at bank 2985.32 5.12 1498.19 2.71 1744.74 4.81 1324 4.06 1583.31 4.69

Other assets 0 0.00 0 0.00 0.00 0 0.00 0 0.00

Profit and loss

account 2872.77 4.93 3100.6 5.61 3598.38 9.93 3898.02 11.95 3569.97 10.57

Total Rs 58313.84 100 55312.34 100 36236.48 100 32623.35 100 33785.31 100

The share capital of the company 4.10% highest in the year 2008 and lowest in the year

2011 2.34% .

In the balance sheet the reserves and surplus is having the major share that is the 44.27%

in the year 2011 and it is increasing continuously from 20.03% In year 2007 to 44.27% in

the year 2011.



the term loans are slightly decreasing from the 12.12% in the year 2007 to 3.93% in the

year 2011

working capital is having second largest share in the liability side the highest is in the

year 2006-07 is 27.01% and lowest in the year 22% in the year 2008

the DKKSK is also recorded the decreasing statutory and other deposits it decreased

from 20.2% to 14.12% from the year 2007 to 2011

the suspense , sundries and other liabilities are also decreasing from 16.46% in2007 to

12.03 in 2011

I the asset side the fixed assets are the major portion that is 49.28% in the year 2011 and

lowest in the year 38.37% 2007 it shows that the fixed assets are increasing continuously

the current assets is fluctuating in between the percentage of the 30 to 36 in the year 2006

it was highest of 36.78% and the lowest is in the year 2010 is 30.12%

the DKSSKs loans and advances are decreased from the 1.44% to 0.97% in the period of

2007 to 2011

profit and loss account is also shown decreasing trend in the balance sheet it was

decreased from 10.57% in 2007 to now it is 4.93% in 2011

Findings:-



The current ratio of all the sugar mill did not meet the standards except some time

they all are under performing and DKSSK is also among that and its is also having

below 1:2 standard

The Quick ratio during the 5 year of the company DKSSK is very satisfactory with the

standard 1:1 and also compared to the other sugar industry

In the assets turnover ratio and the debtor turnover ratio the DKSSK is the lowest

performer compare to all other six sugar factories.

We can find the DKSSK is the moderate performer in the gross profit ratio compare

to all other and Bannariamman and Renuka sugars are the higher performer in the

gross profit ratio

In the case of the net profit ratio and the fixed assets turnover ratio the DKSSk is not

satisfactory but It is the second least performer compare to all six factories Ugar

sugar works in net profit ratio and Bajaj Hindustan sugar in fixed asset turnover

ratio.

The working capital turnover ratio of the company is 7.24 times is highest and

3.30times is the lowest this shows that the DKSSK is not having the satisfactory

working capital ratio.

Material procurement cost of the DKSSk is more than 0.5 times of the sales it shows

that the company is spending more on the material procurement.

Sugar production cost to sugar sales ratio is 0.9 and in the year 2009 and 2010 it is

more than the 1 times it shows the companies cost is more than the sales.



In the common size balance sheet the reserves and surplus are near about 40% of

the liabilities it shows that the company had more reserves and surplus.

In the asset side of the common size balance sheet we can see the fixed assets about

49% and current assets near 32%. It shows that the company is having more than

70% of its assets are fixed and current assets.

SUGGESTIONS



The company has to increase the current ratio up to the standard limit for efficient

utilization of the current assets.

Increase the Gross Profit ratio by reducing the cost of production.

The DKSSK company has to increase sale to increase the asset turnover ratio.

The DKSSK’s net profit is reduced in the year 2011 to Rs 22782300 from 2011 from

Rs 49777600 so company has to try increase the net profit.

The cost of the sugar production of the company is high so the DKSSK must try to

reduce the cost of the production

The sugarcane procurement cost is comparatively high so the DKSSK must try to

reduce the sugarcane procurement cost.

The DKSSk is transferred its major funds to the reserves and surplus so the

companies liabilities is increased heavily so they must have to take care of the

reserve and surplus to reduce the company liabilities and increase profit.

Balance sheet of the DKSSK

ANNUAL REPORT 1-4-2006 to 31-3-2007

BALANCE SHEET AS AT 31-03-2007



particular schedule As at31.03.2007

LIABILITIES -

Share Capital 1 1321.99

Reserves & Surpluses 2 6768.01

Term loan 3 4094.98

Working capital loan 4 9124.6

Bank O. D. payable 5 84.04

Statutory and other deposits 6 6831.82

Suspense, sundries & other 7 5559.9

Total Rs 33785.31

ASSETS -

Fixed assets 8 12963

Investments 9 26.1

Current assets 10 12424.75

Loans and advances 11 485.58

Debtors 12 2729.31

Cash in hand 13 3.29

Cash at bank 14 1583.31

Other assets 15 -

Profit and loss account 16 3569.97

Total Rs 33785.31




LIABILITIES -





Term loan 3 5028.35





Total Rs 32623.35

ASSETS -

Fixed assets 8 13074.42

Investments 9 167.32



Debtors 12 2743.38


Cash at bank 14 1324

Other assets 15 -


Total Rs 32623.35




LIABILITIES -





Term loan 3 4347.98





Total Rs 36236.48

ASSETS -





Debtors 12 3709.04



Other assets 15 -


Total Rs 36236.48




LIABILITIES -



Term loan 3 3660.09




Bank O. D. payable 5 -



Total Rs 55312.34

ASSETS -





Debtors 12 4844.09



Other assets 15 -


Total Rs 55312.34




LIABILITIES -





Term loan 3 3660.09


Bank O. D. payable 5 -



Total Rs 55312.34

ASSETS -





Debtors 12 4844.09



Other assets 15 -


Total Rs 55312.34


sugar factory project

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