ACKNOWLEDGMENT

I am the student of Sana College of Information Science & Management BBA III sem very grateful to all the people who have provide their precious time and advice for making this project successful. Firstly, I am very grateful to The Nirani Sugars Ltd. for giving me an opportunity to make this project in their organization. I am thankful to Mr. S.V.Kariyannavar (CEO) of Nirani Sugars Ltd, Mudhol for permitting me to do my project in their organization. I sincerely express my thanks to my company project guide Mr. M.S. Heggalagi Manager (PMP) of Nirani Sugars Ltd, Mudhol. For his strong support and inspiration during my project period. I am heartily thankful to all the Executives of the company for their valuable guidance and for sharing their experience in completing this project successfully. I am heartily thankful to my internal guide Prof.Pradeep Gupta and all faculty members of my institution for their valuable guidance in completing this project successfully. I express my sincere thanks to our Director Prof.Uttam Kinnange for providing us all the facilities to complete the report and study successfully.

IRAPPA B NAVI

NIRANI SUGARS LTD.MUDHOL

DECLARATION
I, the undersigned, hereby do declare that the project report entitled The Study of Organization in Nirani sugars ltd. Mudhol prepared and submitted in partial fulfillment of the requirement of the degree of Bachelor of Business Administration; Awarded by the Karnataka University, Dharwad. Is my original work. The empirical findings in this report are based on data collected by me. This has not been previously submitted for the award of any Degree, Diploma or Associate ship or any other similar titles.

Place: HUBLI Date:

IRAPPA B NAVI BBA III sem

NIRANI SUGARS LTD.MUDHOL

CONTENTS
S.NO TITLES PAGE NO

CHAPTER I 1) EXECUTIVE SUMMARY 2) OBJECTIVES OF STUDY 1.

3)

THE WORKING CAPITALPURPOSE 1-12

4) SCOPE OF STUDY 5) LIMITATION OF THE STUDY 6) METHODOLOGY 2. CHAPTER II COMPANY PROFILE CHAPTER III 3. PRODUCTION PROFILE 4. CHAPTER IV STUDY OF DEPARTMENTS CHAPTER V WORKING CAPITAL MANAGEMENT CHAPTER VI DATA REPORT FINDINGS AND RECOMANDATION SUGGESTION AND CONCLUSION BIBLIOGRAPHY 25-46 47-51 19-24 13-18

6 7 8 9

52-62 63-64 65-66 67

NIRANI SUGARS LTD.MUDHOL

CHAPTER - I
1) EXECUTIVE SUMMARY
This summer project A STUDY OF WORKING CAPITAL IN NIRANI SUGARS LTD. deals to ascertain this efficiency of working capital management of the company. Working capital may be regarded as lifeblood of business. Working capital is needed to meet the day-to-day requirement of the business unit. The utilization of working capital assets is possible only by efficient working capital management. This study on working capital management is conducted in Nirani sugars Ltd. Working capital management not only shows the financial efficiency of business, but also its credit worthiness, which has gained importance in these days of credit squeeze. Therefore, study of the management of working capital is very necessary. Objective of the project was to study the pattern and procedures followed for managing various components of working capital, so as to evaluate the efficiency of working capital management. So, this study intends to comprehensively evaluate the inventory, receivables, creditors and cash management. The study also aims to analyze the alternative sources of working capital financing employed by Nirani sugars Ltd. Desk Research method is adopted for this study. The required information was collected through secondary sources. Secondary data were collected from various sources including the annual reports of the company for the year 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09, 2009-10.

NIRANI SUGARS LTD.MUDHOL

2) OBJECTIVES OF STUDY 1) To study the overall working of the organization. i.e. department & organization structure 2) To study the efficiency of working capital management of the company 3) To study the efficiency of cash, inventory and receivables management of the company
4)

study of all

To understand and analyze the working capital position of Nirani Sugars Ltd. During the period of 2004-2010

3) THE WORKING CAPITAL PURPOSE

For purchasing raw materials, components and spare parts For paying wages and salaries To increase day-to-day expense and overhead costs like fuel, power and office expense etc.

To meet selling costs of packaging, advertising etc

To provide credit facilities to customers

4) SCOPE OF STUDY
Since the decision regarding working capital are of an operating nature not one time decision, the scope of the study is regarded towards identifying important areas of control and to establish model for better control of the various components of working capital. The study would also attempt to identify the various sources available for financing of working capital.

NIRANI SUGARS LTD.MUDHOL

The study gives a fair idea of improvement in efficiency of working capital management and also to have proper control over the components of working capital and managing of efficiency.

5) LIMITATION OF THE STUDY

This study deals only with the data made available. Hence the result of this study cannot judge the business of the firm in general The study have been influenced by the limitation of the ratio analysis The study extensively uses the data provided is the financial reports of the firm which may also have their own limited perspective The analysis made on the working capital management is for a particular period of time the current assets and current liabilities will change for an analysis made at any other of time.

6) METHODOLOGY
Desk Research method is adopted for this study. The required information was collected through secondary sources. Secondary data were collected from various sources including the annual reports of the company for the year 2004-05, 2005-06, 2006-07, 2007-08, and 200809, 2009-10. Ratio analysis is the major tool for analyzing the working capital management of Nirani Sugars Ltd... And also the information for 6 years is collected.

NIRANI SUGARS LTD.MUDHOL

INDUSTRIAL PROFILE
India is the largest consumer & second largest producer of sugar in the world. The Indian sugar industry second large agro industry Located in the rural India. The Indian sugar has a turnover of rs.500 billion per annum & it contributes almost rs.22.5 billion to the central & state exchequer as taxs & excise duty every year. It is the second largest agro-processing industry in the country after cotton textiles. With 453 operating sugar mills in different part of the country, Indian sugar industry has been a focal point for a socio-economic development in the rural areas. About 50 million sugarcane farmers & a large number of agricultural labors are involved in sugarcane cultivation & ancillary activities, constituting 7.5 % of the rural population. Besides, the industry provides employment to about 2 million skilled/semi-skilled workers & 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 &portable uses, & can be used to manufacture ethanol, an ecology friendly &renewable fuel for blending with petrol. The sugar industry in the country uses only sugarcane as input; hence Sugar Companys have been established in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, and Tamil Nadu & Andhra Pradesh. In the year 2005-06 these six states contributed more than 85 % of total sugar production in the country; Uttar Pradesh, Maharashtra & Karnataka together contribute more than 65 % of total production.

NIRANI SUGARS LTD.MUDHOL

The given chart shows the state manner wise production in India for 2003-04 & 2005-06.

Sugar production by state in India

Source: Indian sugar magazine December 2005, published by sigma. The government de-licensed the sugar sector in august 1998, thereby removing the restrictions on expansion of existing capacity as well as on establishment of new units, with the only stipulation that a minimum distance of Kms would continue to be observed between an existing sugar mill & a new mill. State 2003-04 % of total 2005-06 % of total Uttar Pradesh 5.65 28.06% 4.55 33.60% Maharashtra 6.22 30.86% 3.18 23.44% Karnataka 1.87 9.28% 1.12 8.24% Gujarat 1.25 6.22% 1.07 7.87% Tamil Nadu 1.64 8.16% 0.92 6.80% Andhra Pradesh 1.21 6.01% 0.89 6.54% Haryana 0.64 3.16% 0.58 4.30% Punjab 0.59 2.91% 0.39 2.88% Uttaranchal 0.50 2.47% 0.39 2.86% Bihar 0.41 2.03% 0.27 2.02% Others 0.17 0.85% 0.20 1.46% Total 20.14 100.00% 13.55 100.00% There are 566 installed sugar mills in the country with a production capacity of 180 lack mts of sugar, of which only 453working.These mills are located in 18 states of the country. Around 315 of the total installed mills are co-operative sector, 189 in the private sector & 62 in public sector.

NIRANI SUGARS LTD.MUDHOL

Sugarcane availability
Sugarcane occupies about 2.7% of the total cultivated area & it is one of the most important cash crops in the country. The area under sugarcane gradually increased from 2.7 million hectors in 1980-81 to 4.3 million hector in 2003-04, mainly because of much larger diversion of land from other crops to sugarcane by the farmer for economic reason. The sugarcane area however declined in the year 2005-06 to 3.9 million hector & to 3.7 million hector in 2004-05, mainly due to drought & insect attacks. From a level of 154 MMT in 1980-81, the sugar production increased to 241 MMT IN 1990-91 & further to 296 MMT in 2000-01. Since then it has been hovering around 300 MMT until last year. In the season 2004-05, however, sugarcane production decline to 236 MMT mainly due to deficiency & insect attacks. Not only sugarcane acreage & sugarcane production has been increasing, ever drawl of sugarcane by the sugar industry has also been increased over the period. In India, sugarcane is utilized by sugar mils as well as by traditional sweeteners like jiggery & khadisakhar producers. The chart given below gives data on sugarcane utilization for different purposes:

SUGARCANE UTILIZATION
(% of sugarcane utilization for) Year 1990-1991 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 White Sugar 33.4 50.7 59.7 57.4 68.9 56.1 Gur & Khandsari 54.8 37.4 28.8 31.5 20.1 32.5 Seed, feed & chewing 11.8 11.8 11.5 11.1 11.1 11.4

Sugar production:
Most of the sugar in India is manufacture & sold as plantation white
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NIRANI SUGARS LTD.MUDHOL

sugar which is produced by double sulphitation process, while the norms in developed & emerging nations is refined sugar which is produced by the phosphitation process. 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 state mills, which are dependent upon the seasonal supply of sugarcane.

International sugar industry demand & supply

Brazil & India are the largest sugar producing countries followed by china, USA, Thailand, Austria, Mexico, Pakistan, and France & German. Global sugar production inched from approximately 125.88 MMT in 1995-96 to 149.4 MMT in 2002-03 & then declined to 143.7 MMT in 2003-04, where as consumption increased steadily from 118.1 MMT in 1995-96 to142.8 MMT in 2003-04 as shown in below given chart. The word consumption is projected to grow to 160.7 MMT by 2012 & 176.1 MMT by 2015. The worlds largest consumers of sugars are India, china, Brazil, USA, Russia, Mexico, Pakistan, Indonesia, Germany & Egypt. According to USDA foreign agriculture service, the consumption of sugar in Asian countries has increased at a faster rate, as a direct result of increasing population, increasing per capita income & increased availability.
35000 30000 25000 20000 15000 10000 5000 0
production

brazil india china usa thialand austrila mexico pakistan

World sugar trade

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NIRANI SUGARS LTD.MUDHOL

World trade in raw sugar is typically around 22MMT & white sugar around 16MMT. Brazil is the largest importer followed by EU, Thailand, Australia & Cuba. The largest importers are Russia, Indonesia, UK, South Korea, Japan, Malaysia, and the Middle East & North Africa.

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NIRANI SUGARS LTD.MUDHOL

CHAPTER- 2 COMPANY PROFILE

INTRODUCTION

M/s Nirani sugars Ltd, Promoted by Mr.Murugesh R Nirani. B.E, D.B.M. a technical Graduate and local MLA of Bilagi and Minister of large and Medium Scale Industry Govt of Karnataka. He comes from an agricultural family from Bilagi Taluk of Bagalkot Dt. He started as an industrialist with setting up of a modern Khandasari Unit at Mudhol. He is also very actively involved as a Managing Director of Bilagi sugars mill Ltd, a new 2500 TCD sugar and Co12

NIRANI SUGARS LTD.MUDHOL

gen plant at his constituency Bilagi. The new unit is completed and commenced commercial production in December 2005. He has also been recognized and awarded Bharat Udyog Ratna award from Govt of India. He has also taken over a sick mini cement plant of 100 TPD capacities at Mudhol area, which has now been put into commercial operation with a capacity of 200 TDP within a short span of time.

Nirani sugars Ltd.is presently operating a sugar mill of 5000 tones cane / day (5000 TCD). This sugar mill was originally established as a khandasari sugar factory of 500 TCD in the year 1997-98. In fact this was the most modern khandasari sugar factory & was first in the country to have started with high pressure boiler, turbo generator set with captive power generation, multiple effect pressure evaporator system with falling film evaporators etc. it successfully produced goods quality white crystal sugar. But as khandasari unit, it had its own constraints due to technical limitations and govt policies.

Subsequently, making use of the govt. of Indias liberalized policy, vide govt of India notification DCS /S/14/97 dated 2-6-98, which permitted conversion of khandsari sugar Readopting vaccum evaporation & vaccum pan boiling systems along with related changes. NSL did not lose time to expand the capacity to 5000 TCD, side by side taking development measures to increase cane area & cane availability. Today NSL is a regular sugar factory with 5000 TCD capacity with improved efficiencies.

But however, NSL could not enjoy the economy of scale. According the company conceived a project to expand the sugar mill to 2500 TCD with cogeneration of power of 16MW. In order to reach the minimum viable capacity for a sugar unit, as per govt of Indias norms. While the same was in conceptual stage, the industrial scenario started changing. The industry in general started realizing that the sugar mills with cogeneration of power should have still higher capacities up to 10000 TCD. This has been widely recognized & appreciated by the policy makers at all levels, & the financial institutions. Further, it is also recognized that the stand alone sugar mills, even with viable capacity may find it difficult to operate profitably on a sustained basis in a view of the exposure to the international market. The industry has to with stand the
13

NIRANI SUGARS LTD.MUDHOL

pulls & pressures or ups & downs of the global market, which fluctuates depending upon the sugar scenario in different part of the world.

Having regard to the above. The new sugar projects in the country are coming up with a capacity of 5000 TCD & more with the facility of cogeneration of power. A number of existing mills in the country are expanding to even bigger capacities like 7500 TCD, 10000 TCD & so on.

Falling in line with the above, NSL thought it prudent to make an upward revision and accordingly enhance the capacity to 5000 TCD from 2500 TCD as conceived earlier.

The cogeneration of power permits generation of surplus power, which is encashable and thus helps increase of income to the industry substantially on a sustained basis. The profitability of the cogeneration plant increases with increase in the size of the plant. Bigger cogeneration plants are feasible only with bigger sugar mills, either as forward integration or with back up support for fuel.

The market and the price for the power produced are assured as the surplus power so generated is under written by KPTCL through power purchase Agreement. The govt of Karnataka also shares the aforesaid viewpoint & encourages cogeneration of power by sugar factories using bagasse as a fuel. In support of this, the govt has announced a capital subsidy of Rs. 25 lakhs per MW of surplus power, for such cozen projects.

More importantly, it is important to note that private companies have come forward to purchase power from cozen. Plants offering even higher prices than those offered by electricity corporations of the state. In fact NSL has already entered into an agreement with TATA power trading company Ltd. For sale of power at a price of Rs3.61 per unit.

14

NIRANI SUGARS LTD.MUDHOL

Having appreciated the above, it is imperative for NSL to go for expansion of the sugar mill from the present capacity of 5000 TCD to 10000 TCD. While doing so, it makes sense to update the technologies & modernize the entire plant. It needs no emphasis that the expansion project would be meaningful only if associated with the cogeneration of power & in turn associated with energy saving devices.

To match the sugar mill expansion from 5000 TCD to 10000 TCD, NSL proposes to double its cogeneration capacity also from 16MW to 48MW.

COMPANY PROFILE
Name of the company Address : NIRANI SUGARS LIMITED. MUDHOL : Nirani Sugars Limited. Vinayak Nagar, Sy No-166 Near Kulali Cross, Jamakhandi Road Mudhol 587313 Dist: Bagalkot Regd. Office : # 2053, High Point- II 45 Palace Road, Bangalore 560 001 Branch Office Status of Company : Bijapur : Sole trading concern.
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NIRANI SUGARS LTD.MUDHOL

Constitution of the firm Financial Institutions

: Registered under companies act 1956 : K.S.I.D.C, IDBI, BOI, K.S.F.C

Bankers of the Company

: I.C.I.C.I Bank Jamakhandi S.B.I Mudhol Branch. Indian Bank Lokapur. Grameen bank Mudhol.

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NIRANI SUGARS LTD.MUDHOL

Products

: Sugar (L30, M30, S30) Molasses, Press Mud, Bagasse, Electricity.

Press Mud / Filter cake Sugar Storing Capacity

: This is also another type of product. : 3 lakh Bags.

AIMS AND OBJECTIVES

To make available good working condition and opportunity development with proper training and high moral. To produce good quality sugar at acceptable prices to meet the increasing demand.

VISION

To establish production 60000 T.C.D at Mudhol. To produce 40 Megawatt electricity. To produce 12,000 liters of distillery unit. To produce 10,000 ton Bio fertilizers.

MISSION
We will provide products of superior quality at competitive price and ensure sustained profitability and growth. We will protect the interest of all concerned promoters, shareholders, customers, distributors, employees and community.
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NIRANI SUGARS LTD.MUDHOL

ORGANIZATION STRUCTURE
Chairman&MD Board of Directors : Murugesh R Nirani. (B.E.Civil) : H R Nirani.Advocative Kamala M Nirani L R.Nirani S R.Nirani Administration : Sangamesh R Nirani (ExecutiveDirector) R.V. Vatnal (Technical Director) S.V. Karriyannavar (CEO) S.C. Iitnal (GM of Plant) M.R. Dabade (Dy GM Production) M.S. Heggalagi (Manager, PMP) B.S. Khandekar (GM Cane) M.M. Hiremath (Finance) S.C. Salagare (Chief Engineer) S.G. Yaragatti (Stores purchase officer) M.R. Agnihotri (Personnel officer)

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CHAPTER 3 PRODUCT PROFILE BY-PRODUCTS OF SUGAR INDUSTRY

Fibrous Products

Fuel Gases Filter Mud

Bagasse

Utilization as Fuel for CO-GEN Sugar

Sugar Cane Composite Fertilizer

Furnace Ash Direct Utilization

Molasses Protein From Cane Juice Ethanol Rectified Spirit The factory produces about 184400 Tones of plantation crystal white sugar. As per statute from Govt of India the sugar can be packed in 100 Kg net Gunny bags and 50 Kg net Polythene bags. As per the Indian sugar standards the sugar can be graded in 3 grades by size and color namely L,
19

Distillery Industry

NIRANI SUGARS LTD.MUDHOL

M, S (Size) and 29, 30 (color). The factory envisages producing M30 and s30 grades. The storage of sugar will be done in a warehouse built in masonry and roofed with AC sheets. The size of the warehouse will be suitable to store about 50% of a seasons production. The molasses which is a by product, is a highly viscous liquid. The total production of molasses in a season will be about 40,480 Tone. Two steel storage tanks of capacity 4000 tone each will be added. This can accommodate about 2 months production. As the demand for molasses is high, it is proposed to sell the molasses to distilleries as raw material to produce alcohol. Beside the finished goods and molasses storage space is required for Bagasse, ash and filter mud. Adequate open will be provided for these in the factory for easy and smooth working of the factory.

Main Product-White Crystal Sugar

The main product of the sugar manufacturing process is white crystal sugar. This white crystal sugar is manufactured in the following grades: 1) L-30 [Large size sugar] 2) M-30 [Medium size sugar] 3) S1-30 [small size sugar]

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PERFORMANCE OF NSL

1. TABLE SHOWING PRODUCTION OF SUGAR

YEAR 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

SUGAR (in Qtls) 47,995 1,62,446 2,65,148 3,43,132 4,55,765

50 0000 45 0000 40 0000 35 0000 30 0000 25 0000 20 0000 15 0000 10 0000 50000 0

2 005-20 06

2006-07

2007-2 008

2008-200 9

2009 -2010

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2. TABLE SHOWING PRODUCTION OF BAGASSE

YEAR 2005-2006 2006-2007 20007-2008 2008-2009 2009-2010

BAGASSE (in Qtls) 142322.22 402859.12 684097.67 759807.39 897842.98

900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0 2005-2006 20 06-2007 2007-2008 2008-200 9 2009-2010

3. TABLE SHOWING PRODUCTION OF MOLASSES

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YEAR 2005-2006 2006-2007 20007-2008 2008-2009 2009-2010

MOLASSES (in Qtls) 17895.70 49700.00 90781.42 143572.53 187673.87

200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0

20052006

20062007

20072008

20082009

20092010

P R O D U C T I O N

4. TABLE SHOWING SUGAR RECOVRY

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YEAR 2005-2006 2006-2007 20007-2008 2008-2009 2009-2010

SUGAR RECOVRY (%) 10.09 % 12.11 % 11.62 % 12.09% 13.87%

1 4 1 2 1 0 8 6 4 2 0 200 5-20 06 20 06-2007 200 008 2 -2009 2009-2010 7-2 008

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CHAPTER 4 STUDY OF DEPARTMENTS

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FUNCTIONAL DEPARTMENTS

1. Human Resource Department 2. Marketing Department 3. Purchase Department 4. Cane Development Department 5. Production Department 6. Finance Department 7. Sales and Distribution Department

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1. HUMAN RESOURCE DEPARTMENT

The Human Resource department is the primarily concerned with the human constitution of an organization. organization. The Human Resource Department refers to the systematic approach to the problem of selection, training motivating and retaining personnel in any organization. It also considers with planning, organizing, directing the personnel functions in the organization. It is concerned with the manpower recruitment, remuneration, promotion, retirement etc., all related to human resource or labors of the

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NIRANI SUGARS LTD.MUDHOL

The department is also concerned with recruitment, selection and placement.

1

Development and training to the workers.

2 Development evaluation of the workers. 3 Wage and salary administration. In Nirani Sugars the personnel manager takes all the above responsibilities and undertakes the activities concerned with him. Suitable candidates are selected to a particular job according to their qualification and experience. There is no necessary to give training to the workers on separate machine other than actual production process. Hence training is given on the job only. Manager and supervisor are continuously inspecting every worker to access their performance and there is a better scope for hard workers.

TIME OFFICE Time office is one of the important sections of administration department. This section maintains the attendance of workers. It also shows records of particular workers about his working hours, dit, etc. it evaluates the workers punctuality, discipline and uniforms and maintains documents and records for the future reference purpose. FUNCTIONS 1. Showing the absenteeism report of HOD. 2 .To receive the attendance cards from the workers. 3. To put attendance of the workers in he muster role.
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In time office there are 4 types of leaves.

SICK LEAVE: employees are eligible to take have on the sickness. 8 days sick leave shall be granted with full wages. CASUAL LEAVE: 10 days casual leave shall be granted with full wages or pay including DA to the every workman. PRIVILEGED LEAVE: 15 Days privileged leave shall be granted with full wages or pay including DA to the every workman for every completed year. SECURITY OFFICE: Security officer also one of the important section of the administration department. There are totally 39 guards.

DUTIES OF SECURITY OFFICER

1 Maintain the silencing in the factory area. 2 Time maintenance of workers.
3

Raw materials are checked according to the voucher. inward and seal the bill and leave inside.

4 Incoming materials are checked, if they are right, they will records 5 If out going material from the industry that person must and should have got pass and it is entered in outwards. 6 If goods are returnable, it will be entered in return A/C book.
7

All times of A/Cs are submitted to M.D. daily.

FACILITY TO WORKERS
1

Availability of rest house with TV facility.

2 Availability of quarters.

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3 Providing 2 wheelers for employees who are visiting the field to supervise and check the availability cane. 4 Executive levels are provided with 4 wheelers. 5 Weekly one holiday of any in a week

NATIONAL HOLIDAYS
The industry can give the leave for the national holidays; fair days of national holidays should be given to the employees, such as Independence Day, Republic Day, and Gandhi Jayanti etc. DUTIES OF TIME OFFICE:1 Maintenance of clock 2 Sequencing the punching cards 3 Siren maintenance ( signal value ) 4 Observation of employees 5 Maintaining Notice Board 6 Accepting leave letter application 7 Over time requisition 8 Absent statement

SHIFT WORKING:In a shift of 8 hours factory is providing 4 types of shifts:1st shift 2nd shift 3rd shift General shift 4 am 12 pm 12 pm 8 pm 8 pm 4 am 8.30 am 5.30 pm

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OBJECTIVES
1. To maintain good relation between employer and employees. 2. To maintain good industrial relation. 3. To select right person at right job. 4. To cope with a chain. 5. To develop employees in organization. 6. To full utilization of human resource.

FUNCTIONS
Recruitment Job analysis and job description Promotion Wages and salary administration Training and development Records and incentives Welfare maintenance

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H. R. D NUMBER OF WORKERS
Officers Regular Trainees 24 172 351 17 564

Daily wages with order Total -

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NIRANI SUGARS LTD.MUDHOL

2 .MARKETING DEPARTMENT

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MARKETING PROCESS

The term marketing has been derived from the word MARKET. Market is generally understood as a place or geographical area where buyers and sellers meet and enter in to transactions involving transfer of ownership of goods, service, and securities.

Features of Marketing
1

It is consumer oriented.

2 It starts and ends with consumer. 3 Marketing is a system 4 It is a goal oriented. 5 Exchange process is the essence of marketing. 6 It is the guiding element of business.

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MARKETING
Marketing is a social and managerial process by which individual and group obtains what they need and what through creating, offering and exchanging products of values with others. This marketing is important element in every organization, which should be maintained compulsory in a systematic manner. This section will take care of all sale transactions like sale of sugar, molasses, Bagasse and scrap material. This section works by 7 employees including sales manager. The factory has sold the sugar according to central government The notification. The central government sends the notice to the factory every month regarding sale of sugar, without notice the sugar is not sold to anybody. government is giving permission for a particular period, particular for sale of sugar. The sugar is sold to the buyer who quotes highest price. In this section, some records like sale of sugar register, molasses register, Bagasse registers and scrap material registers are maintained.

PRODUCT OF SALE
The organization undertakes selling activities in two methods:1

FREE SALE: - free sale of sugar is being done to bulk purchases on the basis of tenders called, collected, negotiated and sold. LEVY SALE: - This is being sold to the government of Karnataka on levy basis. The government then distributes the same to the public through public distribution outlets at predetermined reasonable price.

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3. PURCHASE DEPARTMENT
Purchase success and failure of any company depends on the cost of materials, the proper buying of materials and procurement of materials at the right time from the right source is having greater importance in any business. There is a need for separate department for buying the materials known as purchasing department.

The purchase section also connected to administrative department. all types of materials for the factory, plant and machinery.

In this

section 3 workers are working including purchase officers. This section is purchasing

This department also maintains the quality of raw materials, by taking the sample of cane to laboratory test then if the raw material will below standard then will be rejected, otherwise the raw material will be purchased at the particular price.

FUNCTIONS

Receiving purchasing requisition Determining the volume of materials to be ordered Placing orders Inviting tenders and quotations from different suppliers Checking and passing bills for payment.

Receiving and inspecting materials.

QUALITIES

Good knowledge of industry and material used in the industry.

Administrative and organizing ability Knowledge and contract of law Knowledge of economic principles and demand and supply Knowledge of government policies
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RESPONSIBILITIES

Purchasing of materials at right time and in proper way from right source. Receiving of materials.

Storing of materials. Issuing of materials. Accounting of materials. Keeping proper records of material purchased. Properly planned for material required. Co-ordination and co-operation between different departments.

4. CANE DEVELOPMENT DEPARTMENT

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OBJECTIVES

To get high yield of sugarcane to the factory in right time.

To improve variety of cane To provide all facilities like seeds, fertilizers, unloading and loading charges

To maintain registration of cane, gang and cultivated area.

To undertake seed distribution programme

The soil of this area is varying alluvial fertile soil is there on the bank of Krishna and Ghataprabha rivers. Further upwards, there is a medium deep black soil, vary fertile well drained light to medium clay soil, which has received heavy application if from yard Manu science last 10-12 years also is presently in some parts. The main function of cane development department is to arrange for raw material, which is required to the factory. For this the order is received by priority basis (that is growers who grows sugar cane first in his lead). They also provide a loading gang with 8 to 10 members per village and also a bonded tractor for transportation.

SUGAR CANE VARIETIES

At present COC-671, COC-8011 is very popular sugar cane varieties growing in this area. The factory had introduced a new variety of sugar cane that is COC 86032 two years back. Here more than 85% of sugar cane is of variety COC 671 which is mainly grown in this area.
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S.L 1 2 3

NAME OF THE VARIETY COC-671 CO-8011 CO-86032

AREA IN HA (P) 1153 ha 480 ha 1921 ha

(R) 60.02% 24.99% 14.99%

5. PRODUCTION DEPARTMENT
The production department is center of the organization. The main function of the production department: To maintain close and co-ordinates relationship with all others. To upgrade the technical efficiency of the production. To flow up the daily production schedule of as per plan. To produce the future needs of the company and to promote the organization.

OBJECTIVES: To plan and meet the production requirements as per customer specification through the continuous improvement in the planning processing and optimum utilization of resource. To identify control the customer supplied products. To produce for future needs and customers specification. In every sugar industry production is divided in to two sections. Engineering section Manufacturing section

PRODUCTION PROCESS
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NIRANI SUGARS LTD.MUDHOL

Step 1. Weighing of sugar cane, it means, when the sugar cane comes to the factory. After weighing of sugar cane the unloaded carrier cane weigh bridge. Step 2. In the next step sugar cane go to the cane cutter machine and it cuts the fine pieces after that, there are 3 mills and 5 mills tandem that is sequential mill. Step 3. After the milling of sugar cane there is a separation of baggasse and juice milk, baggasse will be used as a fuel. There are 7 boilers. They used as a fuel and there is production steam and steam is used to produce the electricity. Step 4. The juice, weighing takes place and there are mixing the juice and there is addition of phosphoric. After heated of juice milk 75 C that juice is called as raw juice. Additional of milk of lime and SO2 is called Sulfur and this again goes to juice heater it heated up to 104 C. Step 5. Then the next step, the juice sent to clarifier and in that there is a separation of dust and clear transferals juice. Clear juice sends to Bhoomi Labh. This is the produce fertilizer. Clear juice will be thick. It calls as syrup. Again add to the milk and SO2 then it is called syrup suplitation. Step 6. Sulpitation comes to the pan boiling station and this there are 3 categories, A, B and C first of all the sulpitation goes to the A category. And the pan boiling directly goes to pan crystal. sugar crystal and molasses. Step 7. In this, the sugar crystal downs and passes through grass happer. In the grass happer the sugar goes to the one place to another place. Raw sugar goes to the

centrifugal machine routed to the high speed of around 1200 rpm. It will be separated

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After there is gradation, in that there are 3 grades. It will be divide the 3 grades:high grade, small grade, low grade. Step 8. And then the sugar goes to the different vessels. In that, package of sugar. In this there are 2 types packing exporting and domestic is different.

FINISHED PRODUCTS
Finished product is sugar. There are 3 types of finished sugars, High Quality, Middle Quality and Low Quality. These are 3 types of bye products Molasses Bagasse Filters mud

ENGINEERING SECTION
This section is assisted by workshop. It maintains all the work connected with plant and machinery.

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WORKSHOP
In this workshop machinery work is done. The spares, materials are fabricated using the lathe machines in the workshop, shaping like square cutting etc is also done in the workshop. Following machines are used in this workshop. o 2 lathe machines for round job o 1 redial drilling machines for drilling hole o 1 shaping machine of 32* for right angle planning o 1 hacksaw machine for cutting o 1 grinding machine for tool grinding

MANUFACTURING SECTION
The manufacturing section again divided in to 3 sub sections. Laboratory Manufacturing process Go down

LABORATORY:The factory has a separate well equipped laboratory. The main activity of the lab is to check the content of sugar in the sugarcane and also fixing the correct shape and size of sugar. The lab prepares hourly reports which advice on the addition of other chemicals in his production.

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6. CHEMICAL DEPARTMENT

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CHEMICALS USED IN PRODUCTION

Caustic Soda (Sodium Carbonate) Washing soda (Sodium Bicarbonate) Common salt (sodium Chloride) Phosphoric Acid (To maintain the PH) Ammonium Bi-fluoride Formalin quality maintain and preservative Mill sanitation chemical to prevent the generation of bacteria and germs Hydrous Viscosity Misopropile - Used for Color - Used for reducer - Used for Alcohol

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7.FINANCE

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8. SALES AND DISTRIBUTION DEPARTMENT SALES MANGEMENT PRACTICE

The marketing department of Nirani Sugars is working in two ways. 1. Free Scale 2. Levy Scale

The out put of the factory produced is sold to public and Government in the ratio of 40 : 60 all the functions of marketing department are generally done by the sales manager who is in charge of assistant manager. The factory has big market area for sugar in Bagalkot, Bijapur and Belgaum Districts, little in local area covered by local sugar dealers. The bi-products are also sold in large volume to biscuits, chocolate and wine industries and also are used by distilleries.

SALESMANSHIP AT NIRANI SUGARS

It is the duty of marketing manager to appoint sales representatives salesmanship is not necessary at Nirani Sugar, because the reasons are: Because their product is available at ever corner of the district As the product is not a lectury one so it is not necessary to appoint sales man. As the product is an essential one salesman are not required to approach the customers at their door step and induce them to purchase their product.

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CHAPTER 5 WORKING CAPITAL MANAGEMENT

INTRODUCTION:
The aim of the present study (project) is to examine the Working Capital management. Since the efficiency of the Working Capital management is determined by the efficient administration of its various components- cash, accounts receivable and inventory, the study attempts to determine the management of each component. Working Capital in a business enterprise may be compared to the blood in a human body: Blood gives life and strength to the human body. Similarly Working Capital injects life and strength- profits and solvency - to the business organization. Working Capital refers to short term funds required for the purpose of business operations. The funds used for meeting day to day expenses like, purchase of raw materials, payment of wages and other expenses, stocking of goods, granting of credit to customers and maintenance of the minimum balance. It is not necessary that the funds should be in the form of cash only. It can be in the form of near cash items like, marketable securities, inventories and account receivable

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CONCEPT OF WORKING CAPITAL

Like most other financial concepts, the concept of Working Capital is used in different connotations by different writers. Obviously, it is understood either as the total current assets or as the excess of current assets over current liabilities. The former is referred to the gross working Capital and the latter the net Working Capital. So there are two concepts in Working Capital: 1. Gross Working Capital. 2. Net Working Capital. Gross Working Capital is the total of all current assets, viz. cash, marketable securities account receivable and inventory. Net Working Capital refers to excess of current assets over current liabilities. Both of these concepts have their own importance. The gross concept is a going concern concept in which management is particularly interested because for the productive utilization of fixed assets all the currents are necessary. The net concept is useful to gauge the financial soundness of a form and is of special interest to sundry creditors and suppliers of short-term loans and advances. It creates confidence among the creditors about the security of their amounts. No special distinction is made between the terms total current assets and Working Capital by some authors Working Capital is nothing but total of current assets. It is a substitute for Working Capital, though not a perfect one Working Capital is the capital circulating into cash over an operating cycle. Working Capital is equated with all the current assets. Working Capital and current assets are interchangeable.

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ESTIMATION OF WORKING CAPITAL REQIUREMENTS

Managing the working capital is a matter of balance. The firms must have sufficient funds on hand to meet its immediate needs. The NSL is manufacturing oriented organization; the following aspects have to be taken into consideration while estimating the working capital requirements. They are:

Total costs incurred on material, wages and overheads. The length of time for which raw material are to remain in stores before The length of the production cycle or work-in-process, i.e., the time taken The length of sales cycle during which finished goods to be kept waiting for The average period of credit allowed to customers. The amount of cash required paying day-today expenses of the business. The average amount of cash required to make advance payments. The average credit period expected to be allowed by suppliers. Time lag in the payment of wages and other expenses.

they are issued for production. sales.

for conversion of raw material into finished goods.

FINANCING OF WORKING CAPITAL

In that NSL, it was financing the working capital from the following five common sources. They are:
1. SHARES:

The NSL has issued the equity shares for raising the funds. The Equity

Shares do not have any fixed commitment charges and the dividend on these shares is to be paid subject to the availability of sufficient funds. These funds have been

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injected from the companys own personal resources, from the members and from the third party investors.
2. TRADE CREDITORS: The trade creditors refer to the credit extended by the

suppliers of milk in the normal course of business. The firm has a good relationship with the trade creditors. So that suppliers send the milk to the firm for the payment to be received in future as per the agreement or sales invoice. In this way, the firm generates the short-term finances from the trade creditors. the firm.
3. FACTORING OR ACCOUNTS RECIEVABLE CREDIT:

It is an easy and

convenient method to finance and it is informal and spontaneous source of finance for

Another method of raising

short-term finance in the NSL is through accounts receivables credit offered by the commercial banks and factors. A commercial bank has provided finance by discounting the bills or invoices of its customers. Thus, a firm gets immediate payment for sales made on credit. The factor is also a financial institution, which offers services relating to management and financing of debts arising out of credit sales. Factors render services varying from bill discounting facilities provide commercial banks to the total take over of administration of credit sales including maintenance of sales ledger, collection of accounts receivables, credit control, and protection from bad debts, provision of finance and rendering of advisory services to the firms clients. 4. LINE-OF-CREDIT: The business is well capitalized by equity and is has a very

good collateral, the business (the firm) might quality fore one. A line-of-credit allows firm to borrow funds for short-term needs when they arise. The funds are rapid once the collections of accounts receivables that result from the short-term sales peak. Lines-of-credit typically are made for one year at a time and expected to be paid it for 30 to 60 consecutive days some times during the year to ensure funds are used for short-term needs only.
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5. SHORT-TERM LOAN:

The firm has borrowed the funds from the commercial

banks to finance for the working capital needs. The short-term loans duration is less than one year. They provide a wide verity of loans to meet the specific requirements of a concern. The different forms in which the banks normally provide loan and advances are Loans Cash credits Overdraft

DATA ANLYSISS ANLYSIS 0F WORKING CAPITAL MANAGEMENT

Working Capital management involves deciding upon the amount and composition of current asset and how to finance the asset. This decision involves trade off between risk and profitability. Working Capital Balances are measured from the financial dates of the companys balance sheet. A study of the causes for changes of working capital that take place in the balance from time to time is necessary. These changes can be measured in rupee amount and also in percentage by comparing current assets, current liabilities and working capital over the given period. The importance tools of Working Capital are, I. Ratio Analysis of Working Capital

II. Funds Flow Analysis of Working Capital

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III. Working Capital Budget

CHAPTER-6 DATA REPORT

CALCULATOIN OF GROSS WORKING CAPITAL TABLE 01 TABLE SHOWING GROSS WORKING CAPITAL OF NIRANI SUGARS LTD
Particulars Current Assets Cash and Bank Balance Other Current Assets Loans & advances Inventories Sundry Debtors Gross Working Capital 21347 6300 18663 92717 69265 16680 6300 32726 89713 76180 9679 6300 42916 96322 45153 9217 6300 56818 33818 583 13618 16321 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

------- ---------34813 31645 84221 98769 2408 2789 149524

208292 221599

200370 106758 135060

INFERENCE
The gross working capital has fluctuated with the growth of the business over a period of 2004-2010. There is a fluctuating in the current assets of the company.

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CALCULATION OF NET WORKING CAPITAL TABLE 02 TABLE SHOWING NET WORKING CAPITAL NIRANI SUGARS, LTD.
Particulars Current Assets a) Current 327456 451021 499078 Liabilities Net Working Capital (a-b) -119164 -229422 -298708 -417481 61395 95645 2004-05 208292 2005-06 2006-07 2007-08 2008-09 2009-10 221599 200370 106758 524,2 39 73665 135060 149524 53879

INTERPRETATION:
The net working capital table indicates that excess current asset is available at the disposal of the company for the operational requirements.

GRAP H SHOWING NET WORKING CAPITAL IN DIFFERENT YEARS.

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600 000 400 000 200 000 0 -2 0 0 000 -4 0 0 000 -6 0 0 000 2 0 -0 2 0 -0 2 0 -0 2 0 -0 2 0 -0 2 0 -1 04 5 05 6 06 7 07 8 08 9 09 0 C A C L NWC

INTERENCE
The graph shows that there is a decrease in the working capital in the year 2007-08 In this year Inventories, Debtors and Loans & advances are increases, Due to increase in the production Capacity of the Co, so in this year Working capital is increase from Rs 29387228 to Rs 157043223.

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1) Statement of changes in working capital (2004and2005)

(Rs in Lakhs) Particulars A. Current assets Cash and bank balance Other current assets Loans and advances Inventories Sundry debtors Total current assets B. Current liabilities Current liabilities Provisions Total current liability Net current assets(A-B) 27,46,63 88,64 2835,27 601,90 31,53,27 1,21,29 32,74,56 -11,92,24 3526 62560 40664 3265 2,44,36 79,00 2,94,34 8,91,91 7,23,76 2,13,47 63,00 1,86,63 9,27,17 6,92,05 3526 -3089 1600 10771 -3171 As @ 01/4/04 As @ 31/3/05 Effect of wc Increase Decrease

22,33,37

20,82,32

Increase or decrease in working capital Total working capital -60190

59034 -60190

59034 62560 62560

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Interpretation
The statement shows that the changes in working capital in the year 2003-2004 and 2004-2005. The changes in capital of two years is Rs. 59034 in 2004 - 2005 so its shows the working capital decreased of Rs 59034 in 2004 -2005 which compare to 2003 -2004hear due to decreased the firm is no satisfactory with its working capital.

2) Statement of changes in working capital (2005and 2006) (Rs in Lakhs)

Particulars A. Current assets Cash and bank balance Other current assets Loans and advances 2,1 3,47 6 3,00 1,8 6,63 1,66,80 63,00 3,27,26 8,97,1 7,61,80 6975 14063 3004 4667 As @ 01/4/05 As @ 31/3/06 Effect of wc Increase Decrease

debtors

Inventories 9,27,17 3 Sundry 6, 92,05 20, 82,32

Total current assets B. Current liabilities

22,15,99

31,5 3,27 1,2 Provisions 1,29 32,7 Total current liability 4,56 Current liabilities

44,11,54 98,67 45,10,21 2262

125827

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Net current assets(A-B) Increase or decrease in working capital Total working capital

11,92,24

-22,94,22

23300

33498

110198 -1192 24

110198

-119224

133498

33498

Interpretation
The statement shows that the changes in working capital in the year 2004-2005 and 2005-2006. The changes in capital of two years are Rs. 11098 in 2005- 2006 so its shows the working capital decreased of Rs 110198 in 2005- 2006 which compare to 2004-2005 hear due to decreased the firm is not satisfactory with its working capital.

3) STATEMENT SHOWING CHANGES IN THE WORKING CAPITAL IN (2006-07)

(Rs in Lakhs) Particulars A. Current assets Cash and bank balance Other current assets Loans and advances Inventories Sundry debtors As @ 01/4/06 As @ 31/3/07 Effect of wc Increase Decrease

1,66,80 63,00 3,27,26 29,16 8, 97,13 2

96,79 63,00 4, 9,63,2 4,51,5 10190 6609

7001

310
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7,61,80 Total current assets B. Current liabilities Current liabilities Provisions Total current liability Net current assets(A-B) Increase or decrease in working capital Total working capital 22,15,99

3 20,03, 70

27

464 15 4 4,11,54 9 98,67 45,10 ,21 -22,94,22 8 -29,87,08 16799 8608 5 48,75,6 2 1,15,09 49,90,7 164

69286 -229422 -229422

69286 86085 86085

Interpretation
The statement shows that the changes in working capital in the year 2005-2006 and 2006-2007. The changes in capital of two years are Rs. 69286 in 2006- 2007 so its shows the working capital decreased of Rs 69286 in 2006- 2007 which compare to 2005-2006 hear due to decreased the firm is not satisfactory with its working capital.

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4) Statement of changes in working capital in (2007and 2008)

(Rs in Lakhs) Particulars As @ 01/4/07 As @31/3/08 Effect of wc Increase Decrease

A. Current assets Cash and bank balance Other current assets Loans and advances Inventories Sundry debtors Total current assets B. Current liabilities Current liabilities Provisions Total current liability Net current assets(A-B) Increase or decrease in working capital Total working capital

96,79 63,00 4,29,16 9,63,22 4,51,53 20,03,70

92,17 63,00 5,68,18 3,38,40 5,83 10,67,58 13902

4,62

6,24,82 4,45,70

48,75,69 1,15,09 49,90,78 -29,87,08

51,72,04 70,35 52,42,39 -417481 118773 118773 4474 18376

2,96,35

137149

-29,87,08

-29,87,08

137149

137149

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Interpretation
The statement shows that the changes in working capital in the year 2006-2007 and 2007-2008. The changes in capital of two years is Rs. 118773 in 2007- 2008 so its shows the working capital decreased of Rs 118773 in 2007- 2008 which compare to 2006-2007 hear due to decreased the firm is not satisfactory with its working capital.

5) Statement of changes in working capital (2008and 2009)

(Rs in Lakhs) Particulars A. Current assets Cash and bank balance Other current assets Loans and advances Inventories Sundry debtors Total current assets B. Current liabilities Current liabilities Provisions Total current liability As @ 01/4/08 92,17 63,00 5,68,18 3,38,40 5,83 10,67,58 As @ 31/3/09 13618 34813 84221 2408 135060 50381 1825 Effect of wc Increase 4401 63,00 22005 Decrease

51,72,04 70,35 52,42,39

66597 7068 73665

450607 33

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Net current assets(A-B)

-417481

61395

507214

28338

Increase or decrease in working capital Total working capital

478876 61395 61395 507214

478876 507214

Interpretation
The statement shows that the changes in working capital in the year 2007-2008 and 2008-2009. The changes in capital of two years are Rs. 478876 in 2007- 2008 so its shows the working capital increased of Rs 478876 in 2008- 2009 which compare to 2007-2008 hear due to decreased the firm is not satisfactory with its working capital

Statement of changes in working capital (2009and 2010) (Rs in lakhs)

Particulars As @ 01/4/09 As @31/3/10 Effect of wc Increase 2703 Decrease

A. Current assets Cash and bank balance Other current assets Loans and advances Inventories Sundry debtors Total current assets

13618 -------34813 84221 2408 135060

16321 -------31645 98769 2789 149524

3168 14548 381

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B. Current liabilities 20665 Current liabilities Provisions Total current liability Net current assets(A-B) Increase or decrease in working capital Total working capital 95645 65665 8000 73665 61395 45000 8879 53879 95645 34250 879 24214 24214

95645

24212

24212

Interpretation
The statement shows that the changes in working capital in the year 2008-2009 and 2009-2010. The changes in capital of two years are Rs. 34250 in 2009- 2010 so its shows the working capital decreased of Rs 34250 in 2009- 2010 which compare to 2008-2009 hear due to decreased the firm is not satisfactory with its working capital

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FINDINGS
1. The net working capital during the year 2004-05 is -119164 2. The net working capital during the year 2005-06 is -229422 3. The net working capital during the year 2006-07 is -298708 4. The net working capital during the year 2007-08 is -417481 5. The net working capital during the year 2008-09 is 61395 6. The net working capital during the year 2009-10 is 95645 7. The increase net change in working capital from 2004-2010 is (95645+119164) 214809

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RECOMMANDATION
As this factory is well managed in itself it doesnt need much of recommendations. But I will like to provide some of my suggestions and I hope it could further help this factory to improve. Especially one person must be employed who must sit with the workers and look out for what further changes they want in the existing system. It means start the Human Resource department for knowing problems of workers as well as employees. Workers must be given more liberty to meet the higher officials and talk about their difficulties. Improve the payment method as the payment is poor to the cane growers. It should see that the facilities to workers are somewhat improved and brought up to the expectations of the workers. Worker-management meet should be conducted regularly to handle the grievances of the workers and other matters.

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SUGGESTIONS
1. Whether the companys expectations for employees are extremely high or simply average, the company should always be clear and precise in communicating their official desires. 2. Actively train, educate, and adviser the staff: It is seen that the overwhelming majority of employees want to learn more, enlarge their education, and become more valuable to their employers 3. The management should ensure that the Promotion of employees is based on a fair and transparent process i.e. the employees with the same qualification, work ability and experience should be promoted at the same time. 4. The organization should give importance to factors like Pay and rewards as the employees feel that they are not being paid adequately for their performance on job.

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CONCLUSION
Nirani Sugars Ltd is one of the best sugar factories. It takes care of all the employees, workers. It has a good management. There are well qualified staffs, engineers in each every department who are highly experienced in those fields in which they are working. After all the study I came out with the following conclusion, that the organization sounds good when it has good financial background,NSL has a sound financial background of promoters including chief promoters which will help to raise required equity. NSL has got one of the integrated sugar co-gen projects in Karnataka which will help to reduce national problem of power shortage also.

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BIBLIOGRAPHY
1. 2. 3.

Financial Management by M.Y. Khan & P.K. Jain Financial Management by I.M. Pandy Internet websites www.niranisugars.com www.google.com www.sugarindustry.com

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