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WITH RENUKA SUGAR”(Submitted to Utkal
University in partial fulfilment for degree of Master of Finance & Control under Kushagra Institute of Information & Management Science (KIIMS), Cuttack.)
NAME: MISS. MONALISA PATRA
ROLL NO: 13771U111020 BATCH: 2011-2013
UNDER THE GUIDANCE OF:
External guide Mr. Sabyasachi Mishra CMD, NSCL Internal guide Prof. RASHMI RANJAN MISHRA Faculty in Management
KUSHGRA INSTITUTE OF INFORMATION AND MANAGEMENT SCIENCE PIRABAZAR, CUTTACK .
“A COMPERATIVE FINANCIAL STATEMENT ANALYSIS OF NAYAGARH SUGAR COMPLEX LTD. WITH RENUKA SUGAR”
This is to be certified that the summer project report entitled, Submitted to Utkal University in partial fulfilment of the requirement for the award of MASTER OF FINANCE & CONTROL, is a record of original research work done by MONALISA PATRA during the period of his study (2011-2013) in the department of MFC,KUSHAGRA INSTITUTE OF INFORMATION AND MANAGEMENT SCIENCE, affiliated to Utkal University under the supervision & guidance of Prof. RASHMIRANJAN MISHRA & that Summer project has not formed the basis for award of any degree/ diploma/associate ship/fellowship/any other similar title.
Date: Academic Place: KIIMS
“A COMPERATIVE FINANCIAL STATEMENT ANALYSIS OF NAYAGARH SUGAR COMPLEX LTD. WITH RENUKA SUGAR”
This is to be certified that the summer project report entitled, Submitted to Utkal University in partial fulfillment of the requirement for the award of MASTER OF FINANCE & CONTROL, is a record of original research work done by MONALISA PATRA during the period of his/her study (20112013) in the department of MFC, KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE, affiliated Utkal University under the supervision & guidance of prof. RASHMI RANJAN MISHRA & that summer project has not formed the basis for award of any degree/ diploma/associate ship/fellowship/any other similar title .
Date : Place: KIIMS
HOD DEPT. OF MFC,
CERTIFICATE “A COMPERATIVE FINANCIAL STATEMENT ANALYSIS OF NAYAGARH SUGAR COMPLEX LTD. Submitted to Utkal University in partial fulfilment of the requirement for the award of MASTER OF FINANCE & CONTROL. Date : Sabya Sachi Mishra Place: NSCL External guide . That summer project has not formed the basis for award of any degree/ diploma/associate ship/fellowship/any other similar title.NSCL. Sabyasachhi Mishra (CMD). KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE. WITH RENUKA SUGAR” This is to be certified that the summer project report entitled. is a record of original research work done by MONALISA PATRA during the period of his/her study (201-2013) at the department of MFC. Utkal University under the supervision & guidance of Mr.
is a record of original research work done by MONALISA PATRA during the period of my study (2011-2013) at the department of MFC. Date: student Signature of . Utkal University under the supervision & guidance of PARTHASARATHI SENAPATI & that summer project has not formed the basis for award of any degree/ diploma/associate ship/fellowship/any other similar title . KUSHAGRA INSTITUTE OF INFORMATION AND SCIENCE. “Submitted to Utkal University in partial fulfilment of the requirement for the award of MASTER OF FINANCE & CONTROL. WITH RENUKA SUGAR I do hereby declare that the summer project report entitled.DECLARATION “A COMPERATIVE FINANCIAL STATEMENT ANALYSIS OF NAYAGARH SUGAR COMPLEX LTD.
KIIMS and for guiding me in completing the project. I would like to express my profound gratitude to my external guide Mr. R. J. self affecting humility and genuine affection for student community have been an inspiration. WITHRENUKA SUGAR” KIIMS who utilized their valuable time able to guide my project work in Their simplicity. the Secretary.Rashmi ranjan mishra. Rosalin.Place: ACKNOWLEDGEMENT It is with profound gratitude that I express my sincere thanks to Mr.B. Padhi. I sincerely express my deep sense of gratitude to. Lastly no words can express my debt gratitude to my parents and thanks to all my relatives for their cooperation. KIIMS and all other faculty members of our college for their constant encouragement during the course of my study. .MFC. Head of the department. I am indebted to all our friends for their encouragement and support rendered for their successful completion of the project. “A COMPERATIVE FINANCIAL STATEMENT ANALYSIS OF NAYAGARH SUGAR COMPLEX LTD. SABYASACHI MISHRA (CMD) and Internal guide Prof.
SL NO 1 2 3 4 5 6 7 6 7
INTRODUCTION COMPANY PROFILE CURRENT SCENARIO OF SUGAR RATIO ANALYSIS TYPES OF RATIO OBJECTIVE OF RATIO ANALYSIS IMPORTANCE OF RATIO ANALSIS ADVANTAGE & LIMITATION OF RATIO ANALYSIS FINANCIAL STATEMENT OF NAYAGARRAH SUGAR COMPLEX
8 9 10 11 12
RATIO ANALYSIS OF NAYAGARRAH SUGAR COMPLEX FINANCIAL STATEMENT OF RENUKA SUGAR COMPANY RATIO ANALYSIS OF RENUKA SUGAR COMPANY CONCLUSION BIBLIOGRAPHY
OBJECTIVE OF THE STUDY
To know the financial position of the NSCL ltd. Find out strength and weakness of the NSCL ltd. Growth of NSCL ltd.
After preparation of the financial statements, one may be interested in knowing the position of an enterprise from different points of view. This can be done by analyzing the financial statement with the help of different tools of analysis such as ratio analysis, funds flow analysis, cash flow analysis, comparative statement analysis, etc. Here I have done financial analysis by ratios. In this process, a meaningful relationship is established between two or more accounting figures for comparison. Financial ratios are widely used for modeling purposes both by practitioners and researchers. The firm involves many interested parties, like the owners, management, personnel, customers, suppliers, competitors, regulatory agencies, and academics, each having their views in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for
it is necessary to understand the meaning of analysis‘and financial statements‘. Historically one can observe several major themes in the financial analysis literature. It includes two statements.. By financial statements. Thus. Before understanding the meaning of analysis of financial statements. There is overlapping in the observable themes.e. These are prepared at the end of a given period of time. Position statement presents the financial position of the business at the end of the year. The income statement presents the summary of the income earned and the expenses incurred during a financial year. Many distinct areas of research involving financial ratios can be discerned. Analysis means establishing a meaningful relationship between various items of the two financial statements with each other in such a way that a conclusion is drawn. Financial statements are those statements which provide information about profitability and financial position of a business.e. i. while the researchers' main interest has been to develop models exploiting these ratios.. i. They are indicators of profitability and financial soundness of the business concern. to forecast the future success of companies. analysis of financial statements means establishing meaningful relationship between various items of the two financial statements. income statement and position statement Parties interested in analysis of financial statements Analysis of financial statement has become very significant due to widespread interest of various parties in the . and they do not necessarily coincide with what theoretically might be the best founded areas. profit & loss a/c or income statement and balance sheet or position statement. we mean two statements.(1) profit & loss a/c (2) balance sheet.instance.
The various persons interested in the analysis of financial statements are:Short.term creditors They are interested in knowing whether the amounts owing to them will be paid as and when fall due for payment or not.financial result of a business unit. Trade unions They are interested in financial statements for negotiating the wages or salaries or bonus agreement with management . return and capital appreciation. Management The management is interested in the financial position and performance of the enterprise as a whole and of its various divisions. Long –term creditors They are interested in knowing whether the principal amount and interest thereon will be paid on time or not. Shareholders They are interested in profitability.
Clean cruddy hands For extra mucky hands (think paint. regular table sugar can pinch-hit for a number of other concoctions. Whether for health or beauty. Treat a wound You can treat wounds with a sprinkle of sugar: Wives' tale or wise truth? This study showed that pouring granulated sugar on bedsores. grease. leg ulcers or amputations before dressing killed the bacteria that prevents healing and causes chronic pain." as British colonists called it. The "white gold. here are a number of ways you can put this versatile ingredient to work. sitting in a five-pound bag in the pantry patiently waiting to be spooned into a cup of coffee or employed in a batch of cookie dough. From ancient China to the colonies to Candy Land. Soothe your babe According to a study in Pediatrics. 3. in the kitchen or in the garden. sugar has been making its mark throughout time in myriad ways. grime) add sugar to your soap lather to act as an abrasive. Uses of Sugar 1. often times taking the place of more costly or possibly toxic solutions. You can also use equal parts sugar and olive oil. which acts to soothe and moisturize over-worked hands. babies who were given a one-tofour sugar-water solution (directly into the mouth or administered on a pacifier) before immunizations handled the pain of the shots better than children who received only water. In a bind. But that doesn't mean the coruscating carbohydrate can't be put to other uses. 2. has now reached mundane staple status for much of the western world. .HISTORY OF SUGAR The history of sugar is not a simple one.
The sugar feeds the stems and the vinegar restricts the growth of bacteria. Prevent cheese from moulding: Storing cheese with sugar cubes will prevent cheese from moulding. it will stay fresh longer.4. . 6. 5. Feed your flowers Add three teaspoons of sugar and two tablespoons of white vinegar per quart of warm water for fresh-cut flowers. Keep cakes fresh If you store cake in an airtight container with a few sugar cubes.
5% from the last season. World consumption is expected to grow at a rate significantly lower than the long-term 10 year average (1.911 million tonnes or 4.67 cents per pound as on 12th March. and a higher sugar crop in the EU have become the three major supply features of 2009/10. estimates put world production at 159.887 million tonnes. A forecasted limited growth in sugar output in Brazil. the global supplies are expected to further increase. with the commencement of crushing season in Brazil by May.66%. the biggest consumer of sugar has also taken its toll on the sugar prices globally. Lack of any strong trigger to reverse the falling trend in sugar prices.CURRENT SCENARIO OF SUGAR GLOBAL SCENARIO OF SUGAR INDUSTRY International sugar prices have dipped to a 7-month low after falling about 25-30% from highs in the last 2 months. it is now felt that while the shortage will remain. in the backdrop of deferment of the purchases by importing nations and surplus production by India and EU. Analysts are expecting a rebound in sugar production next year and a higher-than-anticipated output in the current agricultural year ending September. Drop in the sugar imports from India.9 per tonne and raw sugar price has dipped to 19. However. Also. it will not be to the extent anticipated earlier. a modest production recovery in India after last season’s unprecedented shortfall. Till some time back. 2010. . For October 2009 to September 2010. The price of white sugar has fallen to $540. up by 6. respectively).71% and 2. continuing government interference to check rising sugar prices and increased production estimates are all turning out to be negatives for the sector. there was a shortage (of sugar) globally.
world sugar consumption .SOME GRAPHICAL STATEMENT OF WORLD SUGAR Some major sugar producer . .
World raw sugar price .World sugar balance and stock ..
55 million tons in 2008-09. It is also a huge 'swing producer' . The following table shows the supply demand imbalance since 2004-05.5 million tons of sugar.INDIAN SUGAR SCENARIO India is the largest consumer and second largest producer of sugar in the world (Source: USDA Foreign Agricultural Service). India will end the year with stocks of around 4 million tons. It has once again become a net importer and is importing in 2009. accounting for 15% of global consumption. India is the world's largest sugar consumer. .3 million tons and consumed 22. produced 26. With an opening stock of 9. This demonstrates the domestic sugar industry's extreme cyclicality. India had swung itself from a net importer to a potentially big exporter in two years.severe year-to-year production fluctuations affects its trade status (and often the world's net balance by extension). as it alternates as a massive importer to small sugar exporter. In SY 2007-08 India.
41million hectares in 2008-09 from the record area in 2007-08 of 5. . Higher alternative crop prices began influencing cane growers back in 2006-07.29 million hectares. down 43% from the 26. Latest estimates from India's Sugar Mills Associations suggest sugar output will fall to about 15 MT.The main contribution to the world sugar deficit this year is the large production shortfall in India.3 MT achieved in 2007-08. Following unprecedented output growth. India is now entering the down phase of its production cycle. India's cane area fell 16% to 4. causing a large switch to other crops like paddy and wheat.
SOME GRAPHICAL STASTEMENT OF INDIAN SUGAR SCENRIO .
.SHARE OF SUGAR PRODUCTION .Supply and demand for India .
CHAPTER -II .
(Khurda Junction) 3) 10 minutes from the nearest Bus Stand. The Company's registered office is in Bhubaneswar. Orissa and Corporate Office is at Mumbai. Nayagarh Sugar Complex Ltd was incorporated on 20th June 2004 after it acquired a 4 years closed 1250 TCD unit from the Government of Orissa. is one of the fastest growing Sugar Industries in the Eastern Part of India.500 family members comprising10000 farmers. NAYAGARH SUGAR is a very Big FAMILY of more than 10. Bhubaneswar. (Bhubaneswar) 2) 60 minutes drive from the nearest railway station.e. (Nayagarh) . The Plant is located at Nayagarh which is 90minutes drive from the State Capital of Orissa i. 500 employees and many more. LOCATION OF NSCL: 1) 90 minutes drive from the nearest airport.COMPANY PROFILE OF NSCL NAYAGARH SUGAR COMPLEX LTD. Currently the Company is crushing 1500 tonnes of sugar cane per day. Nayagarh Sugar plans to be an integrated manufacturing company with strategic focus on Sugar and its allied products in Power and Ethanol. Subsequently the plant capacity was increased to 1500 TCD with a parallel development in the Agricultural side looking to achieve both horizontal and vertical growth.
TAMILINADU a reputed based company. No. Vision and Objective of the organization Nayagarh Sugar .11. who operated under the management contract from 1991 to 1998. (Gopalpur) b. of this organization is NG 28/2004.06.Due to public demand and potential strength of sugar growing area. the government during the period from 2000 to 2004 hon’ble chief minister of Odisha wanted to revive the sugar mill under private entrepreneurship.nov.4) a.After that the sugar mill was Handel over the M/S DHARANI SUGAR & CHAMICAL. from Vishakhapattanam Port. from the nearest port. from Paradip Port. REGISTRATION NO. Limited. Due to various reasons company abandoned the project in1998.2004.Mission. 120 km. C. HISTORY OF THE ORGANIZATION A sugar industry under co-operative banner in the name and style of Nayagarh co-operative sugar industry limited was commissioned in 1988 at Nayagarh district. The commercial production of the sugar mill wait for two years and subsequently due to mounting losses the mill was closed in 1991. 400 km. At last under disinvestment scheme of government of Odisha M/S ECP group of industry a large business house of Odisha having provision track record in industry and business take over the sugar mill by signing the sales and purchase agreement on 20.2004 and modified by 24.2004 the sugar mill now is functioning in the name and style of Nayagarh sugar complex limited(NSCL) and commenced its crossing operation immediately after the take over27. OF THE ORGANIZATION The Regd. 220 km.
At Nayagarh Sugar we producing M-30 and S-30 sugar as per standard fixed by government of India. MEG etc. rectified spirit. It consists of water. potable liquor and downstream value added chemicals such as acetone. With an able management and robust vision. into a dynamic and vibrant business entity where growth is an ethos and the long-term value creation for our stakeholders is the paramount objective. Molasses is mainly used for the manufacture of alcohol. Expect sugar some other products are produce by NSCL. By Products Molasses: Molasses is the only by-product obtained in the preparation of sugar through repeated crystallization. pure. acetic acid. a cetican hydride. Nayagarh Sugar will be the leader in the field of sugar. manufactured without any toxic chemicals from the fresh canes. Bagasse: Bagasse are a fibrous residue of cane stalk that is obtained after crushing and extraction of juice. butane. Products of the organization The main product of NSCL is sugar. yeast and cattle feed. Our mission to transform Nayagarh Sugar Complex Ltd. create an organization that all our associates will be proud of . Here briefly discuss about other products Plantation White sugar This sugar is sparkling white. fibre and . The company is working on organic and inorganic opportunities to strengthen its growth prospects. Ethanol & Bio-Fertilizer plant. also diversify to Power. set benchmarks that will become the standard for others to emulate and through ethical business practices create wealth for our stakeholders.Complex Ltd plans to manufacture good quality Sugar. Alcohol in turn is used to produce ethanol.
This fly can be used as a raw material for brick manufacturing. By making use of biogases sugar mills have been successful in reducing depends on State Electric Boards. Cane is sowed during October to March every year. for their power supply as it can procure up to 90-95% of its total power requirement through captive generation from steam turbines. 2. against which he will deliver the sugarcane. . which in turn is used for power generation. He then harvests the cane and transports it either in a bullock cart. Every farmer within the command area of the Mill is provided with a calendar. Fly Ash: Fly Ash is the residual output from the boiler furnace after biogases has completely burnt out. 3. The early variety has more sugar content than the general variety. tractor. The first seed growth is known as the plant and subsequent growth after harvesting from the stem is known as Raton. 1. which tells him when he can expect a Mill Supply Ticket (cutting order).relatively small quantities of soluble solids. maturity of cane. mid and late. It is also used as a raw material for production of paper and as feedstock for cattle. Bagasse are usually used as a combustible in furnaces to produce steam. It is mixed with spent wash from the distillery and cultivated to produce high quality biomanure. is the residual output after the filtration of the juice. trolley or truck to the mill. method of harvesting and the efficiency of the sugar mill. Sugar cane is broadly classified into three varieties early. also known as olive cake or press cake. Press Mud: Press mud. The composition of bagasse varies based on the variety of sugarcane.
The clear juice is evaporated to a syrup stage. The early variety has more sugar content than the general variety. Residual biogases is sent to boilers for use as fuel for steam generation 9.Sugarcane juice is then extracted by pressing the prepared cane through mills. Extracted juice mixed with water is weighed and sent to the boiling house for further processing. Every farmer within the command area of the Mill is provided with a calendar. This juice is heated and then treated with milk of lime and sculpture dioxide. Sugarcane juice is then extracted by pressing the prepared cane through mills. bleached by sculpture dioxide and then sent to vacuum pans for further concentration and sugar grain formation. The first seed growth is known as the plant and subsequent growth after harvesting from the stem is known as Raton. He then harvests the cane and transports it either in a bullock cart . 8.trolley or truck to the mill. Cane is weighed and unloaded into cane carriers. The treated juice is then further heated and sent to clarifiers for continuous settling. 7.4. Cane is sowed during October to March every year. tractor . Sugarcane is broadly classified into three varieties early. It is then prepared for milling. Cane is weighed and unloaded into cane carriers. Residual biogases are sent to boilers for use as f uel for steamgeneration. 10. Crystals are developed to a desired size and the crystallized mass is then dropped in the . which tells him when he can expect a Mill Supply Ticket (cutting order). It is then prepared for milling . 6. mid and late. against which he will deliver the sugarcane. Extracted juice mixed with water is weighed and sent to the boiling house forfurther processing. The settled mud is filtered by vacuum filters and filtered juice is returned to be further processed while the Oliver cake is sent out. 5.
The molasses is re-boiled for further crystallization 11. The sugar thus is separated from molasses in the centrifuge is dried. whether the plant and machinery can crush 1250 tons of cane per day. medium and small.85 lakhs tons of Sugarcane in a season. TRIVENI ENGINEERING WORKS. was not to the rated capacity. WALCHAND NAGAR INDUSTRIES. At no Time during the period of operations between 1988 to 1999 the equipment was subjected to any performance trial. While most of the blame is shifted to non-availability of cane. 12.25 lakhs tons of cane in 180 days to become viable. a viscous liquid is obtained from which sugar can no longer be recovered economically.73. the original syrup is disguised progressively (normally three times) till finally.5% and above. only on one day the plant is recorded to have crushed 1160 tons.Kirolskar Industries. During the entire years of operation. In fact in the present day context. This is then centrifuged for separating the crystals from molasses. bagged (50 Kg and 100 Kg). The specifications of the equipment confirm to standard specification laid down by Govt. is sent to the distillery for making alcohol. pumps by M/s. This liquid. large. Sugar is made in different sizes and accordingly classified into various grades i. PUNE and Turbines by M/S. weighed and sent to storage houses. An and Tanks & Vessels. achieving a sugar recovery % of 9. which is called final molasses. . even the meagre amounts crushed. the plant and machinery should crush 2. of India in 1972 . Boilers and Centrifugal machines are supplied by M/S.e. Thus. Major equipment like Mills. A 1250 ton plant can become viable if it can crush 1. Technology :The plant and machinery at Nayagarh Co-operative Sugar Industries was supplied by M/s.crystallizers to exhaust the mother liquor of its sugar as much as possible.
Mr. The organization process in the forming of structure interpersonal relationship. But a good will definitely avoid all these defects and positively contribute to the efficiency of administration. with which a management directs so. lack of co-ordination. (o) is a known name in sugar industry A poor organization may lead to duplicity of work.ORGANIZATION STRUCTURE: Organization is a set of people working together to achieve a common goal.Each department of NSCL is leaded by able HOD’S who are working and the direct supervision of director Sri Manoranjan Mishra whose dedication to words the plant. and Sri Sabyasachi Mishra the yours Director is in charge of Deputy Managing Director who isa dynamic youth and whose guidance the plant is marched ahead to teach the new horizon so far as sugar production productivity is concerned.P. . co-ordinates and controls the activities of employees. loose administration and in effective delegation. The organization of NSCL contains a Board of Directors of eminent well experienced persons as directors and headed by a visionary Chairman.K. Vigilance officer function directly under s the A&P is answerable to the Chairman and acts as chairman in his absence. We can show the organizational structure and chart below. The organization process is the forming of structural interpersonal relationship the organization is a mechanism. The management committee come under the control of chairman and is answerable to the chairman of sugar industry.S.Acharya V. NAYAGARH SUGAR COMPLEX LIMITED has a well developed and systematic organizational structure. Trailokya Mishra. Mr. We may say that an organization is a combination of human beings with defined duties and responsibilities who are brought together to accomplish some desired objects.
Karnataka at Bangalore and received the certificate for commencement of business on January 5. 08-19046 dated October 25. 1996.COMPANY PROFILE OF RENUKA SUGAR COMPANY The Company was originally incorporated as Shree Renuka Sugars Limited vide certificate of incorporation no. MANAGEMENT SYSTEM OF SHREE RENUKA Name Vidya Murkumbi Vijender Singh Hrishikesh Parandekar Robert Taylor J J Bhagat Nandan V Yalgi S M Kalauti Jonathan Kingsman Sanjay K Asher Designation Executive Chair Person Executive Director Independent Director Independent Director Independent Director Executive Director Non executive Director Independent Director Independent Director . 1995 with Registrar of Companies.
16 .26 1.64 2.TOP SHARE HOLDERS Name of the Shareholder No.014 8.122 13.720.31 Total Shares held 8 9 15.79 1.572.42 142.000.97 1.222.040 2.000 15.000. 1 2 3 4 5 6 7 ICICI Prudential Life Insurance Company Ltd Shree Renuka Sugars Development Foundation Life Insurance Corporation of India Platinum Investment Management Ltd A/c Platinumasia DNB Fund ASIAN Small Cap GMO Emerging Markets Fund Thier Avenue Management LLC A/c Third Avenue Global Value (Master) fund LP Sbi Magnum Sector Funds Umbrella Contra Fund Morgan Stanley Asia Singapore Ptd Total 30.06 2.103.523.745 11.884 18.48 3.946 4.158 20.155.909 21.080.23 1.783.000 9.
228.414.400.2343 5.05 __ __ __ __ __ __ __ __ __ __ __ __ __ _ __ __ __ __ ___ __ .990 __ 18.000 1.000 18.86 58.400.000 1.37 __ __ __ 4.59 893.732 315.522.202.860 0.24 0.18 0.237.41 6.18 0. Shares held 1 2 3 4 5 6 7 8 9 10 11 121.08 __ 3.000 37.990 793.800 1.710. Shares pledged or Otherwise encumbered Name of the Shareholder Murkumbi Investment Pvt Ltd Khandepar Investment Pvt Ltd Agriventure Trading & Investment Pvt Ltd Narendra Madhusudan Murkumbi Supria Shailesh Rojekar Shanta V Deshpande Inika Narendra Murkumbi Malavika Murkumbi Vidya Murkumbi Anuradha Ravindra Kulkarni Dilip Vasant Rao Deshpande Number As a % of Grand total % of total As a % of Grand total (A)+(B)+(C) ( A )+(B)+(C) No.52 __ 9.705 1.400.200 1.0922 75.7 0.000 1.SHAREHOLDING BELONGING TO THE CATEGORY : “PROMOTER AND PROMOTER GROUP’’ Total Shares held No.600.21 0.21 0.295 11.
481.12 Total Apoorva Narendra Murkumbi 50. from Nizam Sugars Limited with an existing capacity of 1.1996. buildings.0666 HISTORY AND OTHER CORPORATE MATTERS OVERVIEW The Company was originally incorporated as Shree Renuka Sugars Limited vide certificate of incorporation no.Year Milestone achieved 1998 Acquisition of assets of Nizam Sugars Limited Our Company bought over the sick unit (sugar mill).01 __ 687. Parigi Mandal. near Hindupur. At) the land. Ananthapur District. Andhra Pradesh.980 __ 26. 08-16046 dated October 25. 1995 with Registrar of Companies.000 0. .592 38.552 acres situated at Sudhanagar Sugar Unit.250 TCD and land admeasuring 135. plant and machinery along with the employees were taken over by our Company.1 __ 9.93 255. The key events in the business of our Company are as follows: . Karnataka at Bangalore and received the certificate for commencement of business on January 5.
5 MW and setting up 250 TPD sugar refinery at Munoli We increased our co-generation capacity of power . 2000 Commencement of 11. 1999 Commencement of commercial production We started our commercial production of sugar at the Munoli unit. 2003 Increase in co-generation capacity to 20. and enhancement of capacity Our Company subsequent to purchase of the mill from Nizam Sugars Limited. transferred all the plant and machinery along with the employees to the Munoli Unit at Belgaum and enhanced the capacity to 2. 1999 Shifting of plant from Hindupur to Munoli.2 MW cogeneration plant for producing electricity from the Bagasse 2002 Commencement of 60 KL distillery at Munoli in Karnataka We installed a distillery with a capacity of 60 KL at our Munoli unit for manufacture and production of Ethanol. being 7.2 MW cogeneratlon plant We commissioned a 11.500 TCD. We entered into a power purchase agreement with the Karnataka Electricity Board for sale of surplus electricity. 2.25 per kilowatt hour with escalation at the rate of 5% per annum.55 MW for an initial period of 10 years from the date of commercial production and a renewal period of 20 years at the rate of Rs.
from 11. United Arab Emirates to carry on the business of wholesale trading of sugar in the International market. We also installed a sugar refinery at our Munoli unit with a capacity of 250 TPD. 2005 Lease for operation of Unit III at Mohannagar in Maharashtra Our Company vide a lease agreement with Mohanrao Shinde Sahakari (a co-operative sugar factory) Sakhar Karkhana Limited dated July 2005. 2004 Setting up subsidiary in Dubai We incorporated and registered Renuka Commodities DMCC as a Company in the Free Trade Zone in Dubai. 2006.2 MW to 20. leased the sugar factory at Ajara in Maharashtra with a capacity of 2. 2004 Expansion of refinery capacity to 1000 TPD Subsequent to the installation of the 250 TPD sugar refinery and successful operation.500 TCD for a period of two years until September 26.5 MW by adding an additional turbine and boiler. leased the sugar factory at Mohannagar village of Taluka Miraj. District Sangli in Maharashtra with a capacity of 2500 TCD for a period of six years for the entire crushing season . we expanded the capacity to 1000 TPD 2004 Lease for operation of Unit II at Ajara in Maharashtra Our Company vide a lease agreement with Ajara Shetkari Sahakari (a co-operative sugar factory) Sakhar Karkhana Limited dated October 29. 2004.
Form 18 dated February 23. see "Objects of the Issue" on page 29 of this Red Herring Prospectus.590 002. Karnataka at Bangalore. 1996. Reasons for Change in Office Date of Change Shifting of operational office February 23. Havelock Road. 1996 for the change in address of the Registered Office has been filed with the Registrar of Companies. Karnataka for a sum of Rs. Belgaum . Taluka Athani. Changes in Registered Office of the Company The table below shows the changes in the Registered Office of the Company since incorporation: Previous Address New Address 1438/2 Kalmath Road.590 001.of 2005-2006 to end of crushing season 2010-2011. 2005 We have entered into a memorandum of understanding (MoU) with Haripriya Sugar Works Limited to acquire all assets (excluding receivables) of Haripriya Sugar Works Limited (Haripriya Sugar) including land admeasuring 162 acres and 29 guntas situated at village Burlatti (old Kokantur). due to expansion of facilities. . 40 million. For details. BC 105. Belgaum . District Belgaum. Cantonment.
20th April.f.. Brazil -Shree Renuka joins hand for Munoli project 2007 -Shree Renuka Sugars Limited has appointment Mr Nitin Puranik as Whole Time Director of the Company w. Mr B S Parashivamurthy. 2008 -Shree Renuka Sugars Ltd has signed a Memorandum of Understanding (MOU) with Hindustan Petroleum Corporation Ltd.e.The Company has splits its face value from Rs10/.to Rs1/-.-Shree Renuka Sugars enters into MoU with Copersucar. October 23. 2006. 2007. (HPCL) for formation of a Joint Venture Company (JV) for the purposes of setting up of an Integrated Sugar and Ethanol Plant in the State of Maharashtra. . -Shree Renuka Sugars acquired 87pc stake in Gokak Sugars 2009 -Shree Renuka Sugars Ltd has informed BSE that the Company has acquired 5% equity stake in National Commodity & . by IDBI w.e.f. consequent to the withdrawal of nomination of Institutional Nominee Director. 2006 -Shree Renuka Sugars Ltd has informed that there has been a change in Company's Board of Directors.
in India and 295MW in Brazil.105 Havelock Road.com Website:http://www.Camp Belagaum Karnataka 590001 Tel:0831-2404000 Fax:0831-2404961 Email:iyer.40011400 Fax:24977747 .Annie Besant Road.Worli Mumbai-400018 Maharashtra-India Phone:24977744.Dr. for a total consideration of Rs.Shiv Sagar Estate. the world’s largest consumer market • Highly integrated with ethanol capacity of 6. -Shri Renuka Sugars acquires Brazilian VDI Global Market Position • One of the largest sugar producers in the world with eleven cane mills globally and total crushing capacity of 20. ADDRESS Registered Address BC.120 KL per day and Co.com Group:Not Applicable Corporate Office 7th Floor.Generation capacity of 242 MW.7 MTPA • Leading manufacturer of sugar in India.50 crores. 36.Derivatives Exchange Ltd (NCDEX) from Intercontinental Exchange Holdings and Goldman Sachs Investments (Mauritius) I Ltd.email@example.com million tons of cane per annum • One of the largest sugar refiners globally with capacity of 1.renukasugars.Devchand House.
Cantonment. Reasons for change n Office Shifting of operational office due to expansion of facilities.A.Belgaum-590 001.com Internet:N.Havelock Road. 1996. CHANGES IN REGISTERED OFFICE OF THE COMPANY The table below shows the changes in the Registered Office of the Company since incorporation: Previous Address 1438/2 Kalmath Road. New Address BC 105. Belgaum-590 002. Date Of Change February 23.Karnataka at Bangalore. Form 18 dated February 23. .Email:firstname.lastname@example.org for the change in address of the Registered Office has been filed with the Registered of Companies.
CHAPTER -III .
The ability is reflected in the liquid ratios of a firm. The relationship between two accounting figures is known asratio.With the help of ratio analysis. inter-firm comparison.b) As a rate i. Ratio analysis is useful to share holders. which is used for qualified judgment anddivision making.c) As a percentage.Relationship between profits and capital employed are primary ratios. These ratios may be compared with the previous year or base year ratios of the same firm. Ratio analysis is a powerful tool of financial analysis it is one of thestatistical yardsticks that provide relationships between two accounting figures.RATIO ANALYSIS RATIO ANALYSIS Ratio analysis is the most used tool of analysis.Primary Ratio and Secondary Ratios. The liquidity position of a firm will be satisfactory if it isable to meet its current obligations when they become due.British institute of management has classified the ratios into twocategories.Ratio analysis not only throws light on the financial position of a firm butalso serves . Liquidity ratios and leverage ratios are the secondary ratios. The liquid ratios areparticularly useful in credit analysis by banks and other suppliers of short termloans. A firm can be said tohave the ability to meet the short term liabilities if it has sufficient liquid funds topay the interest on its short term liabilities if it has sufficient liquid funds to paythe interest on its short-making debt usually with in a year as well the principal.Ratios may be expressed in 3 forms:a) As a quotient 1:1 or 2:1 etc.creditors and executives of the company. A comparison may also be made with the selective firms in the sameindustry i. inventory turnover as number of times in a year.e.Secondary ratios give the information about the financial position andcapital structure of the company. conclusions can be drawn regarding theliquidity position of a firm.e. It indicates a quantitative relationship. A ratio is quotient of twonumbers and is expression of relationship between the figures or two amounts. Ratio analysis of financial statements refers to the process determining andpresenting the relationship of items and group of items in the statement.
watching especially for any unfavorable trends that may be starting. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years. and progress of your business. The Balance Sheet and the Statement of Income are essential. failure.as a stepping-stone to remedial measures. To everyone responsible for provision of funds. Importance of financial statement analysis in an organization. In our money-oriented economy. thefirm can seek to identify the probable reasons and. 1. . 2. There has been increasing emphasis on (a) Giving information to the shareholder in such a manner as to enable them to grasp it easily. (b) Giving much more information e. This is made possiblefrom interfirm comparison with industry averages. take remedial measures. If the results areat variance either with the industry overage or with those of the competitors. but they are only the starting point for successful financial management.g. funds flow statement. The profit and loss account (Income Statement). in that light. An inter-firm comparisonwould demonstrate the relative position vis-à-vis its competitors. these are the two statements that have been prescribed and their contents have been also been laid down by law in most countries including India. Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. Apply Ratio Analysis to Financial Statements to analyze the success. Finance may be defined as provision of money at the time it is needed. Ratio analysis may provide the all-important early warning indications that allow you to solve your business problems before your business is destroyed by them. it is problem of securing importance to so adjust his resources as to provide for a regular outflow of expenditure in face of an irregular inflow of income. The balance sheet In companies. again with a view to facilitating easy understanding and to place a year results in perspective through comparison with post year results.
To establish basis for Granting Loans. Financial statements are being made use of increasingly by parties like Bank. labour.To assess the prospects of the business and to know whether they can get a good return on their investment. The statement should be sufficiently informative so as to serve as wide a curia as possible.To formulate policies.To extend Credit facility to business. Leverage Ratios 4. Bankers : . Turnover Ratios 3. Government Agencies: . The main uses of accounting statements for. Accountants : . finance.To study the statement for comparative purposes. Uses of Financial Statement Analysis. and Financial Analysis etc. Liquidity ratios 2. Governments.To study from an angle of tax collection duty levee etc TYPES OF RATIOS 1. Profitability Ratios . Institutions \ Auditors : . government policies. Investors : . marketing.(c) The Directors report being quite comprehensive to cover the factors that have been operating and are likely to operate in the near future as regards to the various functions of production. Institutions. Executives : . The accounts convert activities in monetary terms to the help know the position. The financial statement is prepared by accounts based on the activities that take place in production and non-production wings in a factory. environment in general.
A. Advances Payment and prepaid expenses...1.. Net working capital. The current ratio measures the ability of the firm ..Current Liabilities The current assets include cash and Bank Balance. unclaimed divided and proposed dividend.... Acid test Ratio. which indicate the liquidity of a firm. are: A. Inventories. The current liabilities include creditors. Liquidity ratios are based on the relationship between current assets the sources for meeting short-term obligation and current liabilities.. bills payable bank overdraft short-term loans. Receivable.. Liquidity ratios:Liquidity refers of the ability of a firm to meet its obligation in the short run. C. A proper balance between liquidly and profitability is required for efficient Financial Management. usually one year or when they become duration for payment. The current Ratio is the ratio of current liabilities it is calculated as: Current assets Current ratio = .. Bills. B.. Current Ratio. outstanding expense & income tax payable.. Marketable securities. Current Ratio.... The ratios.. Loans and advances.
. marketable securities. it concentrates on the really liquid assets. could my business meet its current obligations with the readily convertible `quick' funds on hand?" An acid-test of 1:1 is considered satisfactory unless the majority of your "quick assets" are in accounts receivable. It is figured as shown below: current assets – inventories QUICK RATIO = -----------------------------------------------Current liabilities – bank over draft The Quick Ratio is a much more exacting measure than the Current Ratio. It helps answer the question: "If all sales revenues should disappear.QUICK RATIO The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures of liquidity. By excluding inventories. Working capital turnover ratio Working capital refers to the investment by the company in short terms assets such as cash. Net current assets or net working capital refers to the current assets less current liabilities. The higher the ratio. The current assets get converted into cash into the operational cycle of the firm and provide the fund needed to pay current liabilities. Definitions of Working Capital: The following are the most important definitions of Working capital: 1) Working capital is the difference between the inflow and outflow of funds. Symbolically. and the pattern of accounts receivable collection lags behind the schedule for paying current liabilities. Net Current Assets = Current Assets Current Liabilities.to meet its current liabilities. C. In other words it is the net cash inflow. B. to ward off. it means. with value that is fairly certain.
This ratio establishes relationship between the level of activity represented by sales or cost of goods sold and levels of various assets. In other words it is the Net Current Assets or Net Working Capital It is calculated as. Net sales Inventory Turnover ratio = ____________________ Average Inventory The numerator of this ratio is the net sales for the year and the denominator is the Inventory balance at the end of the year. A low level of inventory may cause a higher inventory turnover ratio.2) Working capital represents the total of all current assets. INVENTORY TURN OVER RATIO This Ratio is computed by dividing net sales by inventory Thus. A. 3) Working capital is defined as the excess of current assets over current liabilities and provisions . Woking capital turnover ratio = Sales / Working capital 2. it is also known as Circulating capital or Current capital for current assets is rotating in their nature. TURN OVER RATIOS Turnover Ratios are also referred to as Activity ratio or Assets Management ratios. In other words it is the Gross working capital. It might be argued that the inventory turnover ratio may be Cost of goods sold . This statement need not be always true. This ratio is deemed to reflect the efficient the management of inventories and vice versa.
. DEBTORS TURNOVER RATIO The debtor s turnover ratio is determined by dividing the net credit sales by average debtors outstanding during the year. C.Here there is no specification about net credit purchase and average debtors So. Net credit purchases Creditors turnover ratio = --------------------------Average of creditors Average creditors = Average of creditors outstanding at the Beginning and at the end of the year.Inventory Turnover ratio = -------------------------------------------Average Inventory B.CREDITORS TURN OVER RATIO Creditor‘s turnover ratio is a rate between net purchase and average amount of creditor Outstanding during the year. assume that (net credit sales = net sales) (Average debtors = debtors) The main function of this ratio is to measure how rapidly debts are collected. A high ratio is indicative of shorter time lag between credit sales and cash collection/ A low ratio indicates that debts are not being collected rapidly. . Therefore Debtors turnover ratio = Net credit sales -----------------------------Average debtors NOTE.
Here. The ratio indicates the relative proportions of debt and equity in financing the assets of the firm. The creditor‘s turnover ratio is an important tool as a firm can reduce its requirement of current assets by relying on suppliers creditors. The intent to which trade creditors are willing to wait for payment can be approximated by the creditors turnover ratio. let assume that. So. 2. debt equity ratios establishment relationship between borrowed funds and owner capital to measure the long term financial solvency of the firm. A. Repayment of Principe on maturity or in predetermined instalments at due dates. while a high turnover ratio shown that accounts are settled rapidly. It is calculated as follows Debt equity ratio = Debt / Equity . DEBT-EQUITY RATIO This ratio reflects the relative claims of creditors and share holders against the assets of the firm. Periodic payment of interest during the period of loan. (net credit purchase = Net Purchase) (Average of creditors = creditors) 3.A low turnover ratio reflects liberal terms granted by suppliers. LEVERAGE or CAPITAL STRUCTURE RATIO These ratios refer to the use of debt finance long term solvency of the firm can be examined by using leverage or capital ratios.. The leverage ratio or capital structure ratio can be defined as the financial ratios which throw light on the long term solvency of a firm reflected in its ability to assure the long term creditors with regards to. there is no specification about net credit purchase and average of creditors. 1. NOTE.
The lower the debt equity ratio the higher in the degree of protection enjoyed by the creditors. B. DEBT – ASSET RATIO The debit asset ratio establishes a relationship between borrowed funds and the assets of firm. The equity side consists of new worth (plus) preference capital. Interest coverage ratio determined by dividing the operating profits or earnings before interest and taxes by fixed interest charges on loans. debt is defined as long term debt plus preference capital which is redeemable before 12 years and equity is defined as paid up equity capital plus preference capital which is redeemable after 12 years. The debt equity ratio defined by the controller of capital issue. It is calculated as: Debt Debt Asset Ratio = ------------------------------Asset Debt includes all liabilities. The general norm for this ratio is 2:1.The debts side consist of all liabilities (that include short term and long term liabilities) of the firm. on case of capital intensive industries as norms of 4:1 is used for fertilizer and cement industry and a norms of 6:1 is used for shipping units. INTEREST COVERAGE RATIO This ratio is also known as Time interested Earned ratio This ratio measures the debt servicing of capacity of a firm in so far as fixed interest on long term loan is concerned. Short term as well as long term and the assets include the total of all the assets (the balance sheet total) C. It is calculated as Earning Before Interest &Taxes (EBIT) Interestest coverage Ratio = ---------------------------Debt Interest .
The retail industry. A. comparing a retailer's fourth-quarter profit margin with the profit margin from the same period a year before would be far more informative. A healthy operating margin is required for a company to be able to pay for its fixed costs. A low interest coverage ratio results in financial embarrassment when EBIT declines. OPERATING MARGIN A ratio used to measure a company's pricing strategy and operating efficiency. for example. raw materials. The ratio apparently measure the margin of safety the firm enjoys with the respect to its interest burden. For instances. typically experiences higher revenues and earnings for the Christmas season.The EBIT is used in the numerator of this ratio because the ability of a firm to pay interest is not affected by tax payment as interest on debt fund in a tax deductible expenses. On the other hand. . 4. it would not be too useful to compare a retailer's fourth-quarter profit margin with its first-quarter profit margin. having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. PROFITABILITY RATIO A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. Therefore. etc. For most of these ratios. Some examples of profitability ratios are profit margin. Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages. This ratio is not appropriate measures of interest coverage because the source of interest payment is cash flow before interest and taxes. not EBIT. return on assets and return on equity. A high interest coverage ratio implies that the firm can easily meet its interest burden even if EBIT decline. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios. some industries experience seasonality in their operations.
When looking at operating margin to determine the quality of a company. C. such as cash paid out in a lawsuit settlement. GROSS PROFIT MARGIN Gross profit can be defined as the difference between net sales and cost of goods sold. The gross profit margin ration shows the margin left after meeting manufacturing cost. This relationship is also known as net margin. For example.such as interest on debt. the better. Administration selling. it is best to look at the change in operating margin over time and to compare the company's yearly or quarterly figures to those of its competitors. nonrecurring cash flows.12 (before interest and taxes) for every dollar of sales. Gross margin profit ratio is also known as gross margin gross profit margin ratio is calculated by dividing gross profit by sales. This ratio shows the earning left for shareholder (both equity and preference) as percentage of Net sales." Calculated as: 56 Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales.Net sales-cost of goods sold. Often. Gross profit margin ratio = gross profit/Net sales . Net Margin Ratio measures the overall efficiency of production. NET PROFIT MARGIN The Net Profit Margin Ration determines the between Net profit and sales of business firm. this means that it makes $0. The ratio also measures. A high ratio may also imply of a higher sales rise without a corresponding increase in the cost of goods sold. are excluded from the operating margin calculation because they don't represent a company's true operating performance B. pricing and Tase anagement. if a company has an operating margin of 12%. It Is Also known as "operating profit margin. Financing. . The higher the margin. If a company's margin is increasing. it is earning more per dollar of sales. The efficiency of production as well as pricing. The Gross profit to sales is a sign of good management s as it implies that the cost of production of the firm is relatively low.
A low Net Profit Margin has opposite implications. If the company pays out $1 million in preferred dividends and has 10 million shares for half of the year and 15 million shares for the other half. First. For example. However. data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period. A firm with low net profit margin can earn a high rate of return on investment it has a higher inventory turnover. the EPS would be $1. Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number. because the number of shares outstanding can change over time.5). assume that a company has a net income of $25 million. It is also a major component used to calculate the price-to-earnings valuation ratio. Calculated as: EPS = Net Profit Available To Equity-Holders Number Of Ordinary Shares Outstanding When calculating. Earnings per share are generally considered to be the single most important variable in determining a share's price. the $1 million is deducted from the net income to get $24 million.Thus. and then a weighted average is taken to find the number of shares outstanding (0. it is more accurate to use a weighted average number of shares outstanding over the reporting term. cost of production is rising and demand for product is falling.92 (24/12. Net profit Margin Ratio: Net Profit/Net Sales A high Net profit Margin indicates adequate return to the owners as well as enable a firm to withstand adverse economic conditions when selling price is decanting. Jointly considering gross and net profit margin provides a valuable understanding of the cost and profit structure of the firm and enables the analyst to identity the source of business efficiency of inefficiency. Earnings per share serve as an indicator of a company's profitability. D.5 x 10M+ . EARNING PER SHARE The portion of a company's profit allocated to each outstanding share of common stock.
5M). therefore. That is. This ratio is popularly used by security analysts to assess a firm‘s performance as expected by the investors.The PE ratio reflects the price currently being paid by the market for each rupee of currently reported EPS. . This ratio is computed dividing the market price of the shares by the EPS.that company would be more efficient at using its capital to generate income and. but to use it in conjunction with statement analysis and other measures. E. It is actually the reciprocal of the latter. PE ratio = Market Price of hare EPS. but one could do so with less equity (investment) .5 x 15M = 12. all other things being equal. the P/E ratio measures investors‘ expectations and the market appraisal of the performance of a firm. In other words. It is important not to rely on any one financial measure. In estimating the earnings. An important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number. say. discontinued operations and extraordinary items as well as many other items not expected to occur. Thus.0. would be a "better" company. only normally sustainable earnings associated with the assets are taken into account. Investors also need to be aware of earnings manipulation that will affect the quality of the earnings number. PRICE EARNINGS RATIO PE ratio is closely related to the earnings yield/earnings price ratio. the earnings are adjusted for income from.
For that there are some objectives which are described as under. (a) Whether funds required for the purchase of new machinery and equipments are provided from internal resources of business or not. 4. Such comparison also helps the management to study the position of their firm in respect of sales expenses. EARNING CAPACITY OR PROFITABILITY The overall objective of a business is to earn a satisfactory return on the funds invested in it.SOLVECNY OF THE FIRM The different tools of analysis tells us whether the firm has suffucient funds to meet its short-term and long-term liabilities or not. 3. 2. 1.OBJECTIVES OF RATIO ANALYSIS Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. Analysis also helps in taking decisions. It also helps the management to find out shortcomings of the business so that remedial measures can be taken to remove these shortcomings. It also helps in knowing the capacity to pay the interest and dividend. Financial analysis helps in ascertaining whether adequate profits are being earned on the capital invested in the business or not. . (b) How much funds have been raised from external sources. profitability and using capital. FINANCIAL STRENGTH The purpose of financial analysis is to assess the financial potential of business.etc. EFFICIENCY OF MANAGEMENT The purpose of financial statement analysis is to know that the financial policies adopted by the management are efficient or not. COMPARATIVE POSITION IN RELATION TO OTHER FIRMS The purpose of financial statements analysis is to help the management to make a comparative study of the profitability of various firms engaged in similar business. Analysis also helps the management in preparing budgets by forecasting next year‘s profit on the basis of past earnings. 5.
we calculate our interest coverage ratio which is 10times but our competitor company's interest coverage ratio is 15 times. With this. we can analyze business's financial position. 2. we can tell five year collection period with following way 2007 = 90 days 2008 = 70 days 2009 = 60 days 2010 = 50 days . It means capacity of the profit of our competitor company is more than us. When we calculate different ratios in ratio analysis. Helpful in Financial Forecasting and Planning Every year we calculate lots of accounting ratios. Suppose. We also check company's short term and long term solvency with ratio analysis. By seeing this. Following are the main importance of ratio analysis. Helpful in Decision Making All our financial statements are made for providing information. 1. we get useful information. at that time.IMPORTANCE Ratio analysis is very useful tool of management accounting. But this information is not helpful for decision making because financial statements provide only raw information. When we make trend of all these ratios. I can explain it with simple example. we can get useful information for our future forecasting and planning. For example. we can take decisions for increasing our profitability.
we can make two plans. We can . By just telling this ratio.6% and in 2011. it is 28.55%. Helpful in Co-ordination No company has all the strength points. Helpful in Communication Ratio analysis are more important from communication point of view. 5. Company's financial results shows some strength points and some weak points. 4. Like this. There is no need of hitech for understanding the meaning of any specific ratio. At that time. 3. our gross profit in 2010 is 26. we know that we are decreasing the days for collection money from our debtors. Helps in Control Ratio analysis can also use for controlling our business. we can communicate them by using our company's sales and profit related ratios. we can understand whether our company is growing or falling. Suppose. For example. With this information. we have to appoint new sales agents for our company. One is effective use of money which we are getting from our debtors more fastly and second we can also check the behavior of our debtors by comparing this with sales trend. Ratio analysis can create co-ordination between strength points and weak points.2011 = 30 days From this trend. there are lots of ratios which are also useful for better planning.
we can find variance. fixed assets to long term debt ratio. These variance may be favorable and unfavorable. they take decisions. So. In which. On this basis. By comparing standard ratios with actual accounting ratios. I have to calculate long term solvency ratios. they calculate current ratio and quick liquid ratio and average payment period. we can also calculate standard ratios. On this basis. 7. For this. Before buying any company's shares. Helpful for employees' decisions Every employee wants to increase his salary. Helpful for Creditors' decisions Creditors are those persons who provide goods on credit to company or provides short period loan to company. we can control our business from financial point of view. All the creditors are interested to know whether company will repay their debt or not. I have to calculate fixed assets to net worth ratio. I will be interested to know company's long term solvency.easily create the standard of each financial item of our balance sheet and profit and loss account. I am a shareholder. ROI. 6. EPS and DPS are most useful ratios which I can calculate for knowing this. He also wants to get . On this basis. I will be interested to know my return on this investment. Helpful for Shareholder's decisions For example. After checking my money's security. I want to invest in any company's shares. 8. I can know the level of fixed assets and its main resource. On this basis.
. If ratios will wrong. Simplifies financial statements: It simplifies the comprehension of financial statements. Govt. The following are some of the advantages of ratio analysis: 1. Helps in planning: It helps in planning and forecasting. They also reveal strong firms and weak firms. decisions Different companies analyze their accounting ratios and publish on the net and print newspapers. collects all these information. Helpful for Govt. For this. 9. policies will become wrong. control and communications. Profitability ratios will be helpful for employees to pressure on the company for increasing their salary. For example. 2. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in the future. 4. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Govt. he takes help from company's profitability ratios. overvalued and undervalued firms. ADVANTAGES OF RATIO ANALYSIS Ratio analysis is an important and age-old technique of financial analysis. coordination. Ratios can assist management. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the performance of different divisions of the firm. Ratios tell the whole story of changes in the financial condition of the business. Govt. makes policies. Planning. 3. collects income data of all companies in different industries for calculation the national income. Ratios highlight the factors associated with successful and unsuccessful firm.more and more incentives from company. On this basis. Govt. in its basic functions of forecasting.
Help in investment decisions: It helps in investment decisions in the case of investors and lending decisions in the case of bankers etc. are also subject to those limitations. LIMITATIONS OF RATIO ANALYSIS The ratios analysis is one of the most powerful tools of financial management. Thus ratios derived. does not convey much of a sense. Problems of price level changes: A change in price level can affect the validity of ratios calculated for different time periods. 1. Financial statements are affected to a very great extent by accounting conventions and concepts. For example.5. 4. Ratios have to interpret and different people may interpret the same ratio in different way. . To make a better interpretation. be adjusted keeping in view the price level changes if a meaningful comparison is to be made through accounting ratios. such a comparison only provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions. 3. Though ratios are simple to calculate and easy to understand. there from. Limitations of financial statements: Ratios are based only on the information which has been recorded in the financial statements. Comparative study required: Ratios are useful in judging the efficiency of the business only when they are compared with past results of the business. However. 5. Financial statements themselves are subject to several limitations. may affect the future operations. usually. they suffer from serious limitations. Limited use of single ratios: A single ratio. etc. non-financial changes though important for the business are not relevant by the financial statements. Personal judgment plays a great part in determining the figures for financial statements. management policies. therefore. 2. Personal bias: Ratios are only means of financial analysis and not an end in itself. a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision. The financial statements. In such a case the ratio analysis may not clearly indicate the trend in solvency and profitability of the company.
012. It makes comparison of ratios difficult and misleading. Incomparable: Not only industries differ in their nature.769.153. Calculation Ratio’s Of NSCL: LIQUIDITY RATIO 1:.4 2:.TOL = Total outsiders liability = 152.542.6.87 3:.87 .542.Acid test ratio = Liquid/Quick asset = -3.592.44 = 0.99 1.904.185. but also the firms of the similar business widely differ in their size and accounting procedures etc.902.896.87 = 0.541 TNW Total net worth 280.904.25.732.87 = 2.Current Ratio = Current Assets Current liabilities = 255.029 -Current liabilities 125.
886.EFFICENCY RATIO 1:.60 =0.00 416.570.707.695.023 =2.60 =0.PBT = before tax Profit = TTA Total tangible Asset 9.886.13 416.3 3:.628 =62.Bank finance = 160.570.59(time) 2:.033.99 .Net sales Total tangible Asset = 248.44 = 0.8% Current Asset 255.185.592.360.673.715.
00 LEVERAGE RATIO 1:.673.Fixed asset coverage ratio = Net fixed asset = 277.929.192.896.87 = 1.595.23 =0.173.00 2:.957.968.033.37 Secured loan 202.601.87 .558 Net sales 248.Inventory+Receivable = 138.95 shareholders fund 78.Debt equity ratio = outsiders fund = 152.153.820.4:.
= 220.127.116.11 26643530.809.372 3:.097.64 TURNOVER RATIO 1:.Inventory turnover= Cost of goods sold Average inventory = 226.interest coverage ratio = EBIT Interest Expenses = 17750715.18 = 0.71 123.213 .13 = 0.
00 518.23 = 416.033.00 160.601.44 Term loan from UCO Bank = 21.929.707.Asset turnover = Net Sales Average total assets = 248.145 = 0.395.719.957.478 Total tangiable assets= Net block + Inventories = 277.532.112.695.886.570.968.673.2:.456.37 + 138.00 Indian Bank term loan = 36.989.44 .60 (1) Total Bank finance = Cash credit from UCO Bank = 102.593.215.
732.909.769.87 (3) Total outsiders liabilities = Debenture + Reserve = 0 + 152.153.87 = 152.904.518.104.22.1688.(2) Total Net worth = Owner’s fund + Long term liabilities = = 280.6.670.44) (5) Total liabilities = Total liabilities + Current liabilities = 432.896.922.930.896.33) + 2.902.84 = (.87 (4) Liquid asset/ quick asset = Sundry debtors + Cash / Bank balance = (.60 + 125.012.027.87 .
804.922.47 (6) Total assets = Total assets – Current liabilities = 432.542.909.= 558.380.60 – 125.004.87 = 307.465.73 CHAPTER -IV .904.
ACID TEST RATIO = LIQUID/QUICK ASSET 0.732.87 = -0.99 =2.542.012.542.87 2.87 3.769.FINANCIAL STATEMENT OF NSCL BALANCE SHEET P/L AC CASH FLOW STATEMENT Ratio analysis of nscl LIQUIDITY RATIO 1.44 125.592.904.902. TOL TNW = = TOTAL OUTSIDER’S LIABILITY TOTAL NET WORTH 152. CURRENT RATIO= CURRENT ASSETS CURRENT LIABILITIES = 255.87 = 280.541 CURRENT LIABILITIES = -3.896.153.029 LEVERAGE RATIO DEBT EQUITY RATIO = OUTSIDER’S FUND .185.904.036 125.
033.896.372 = EBIT INTEREST EXPENSES = 17.00 416. NET SALES = TOTAL TANGIBLE ASSET 248.95 FIXED ASSET COVERAGE RATIO = ASSET NET FIED SECURED LOAN = 277.673.SHAREHOLDER’S FUND = 152.153.00 = 1.820.570.192.968.530.666 EFFICIENCY RATIO 1.715.173.13 26.87 = INTEREST COVERAGE RATIO 1.750.643.886.929.87 78.37 202.60 .64 = 0.595.
570.8% 4.715.628 62.886.185.707.= 0.957.60 = = 0. INVENTORY RECEVABLE NET SALES = 138.3% 3.13 416. PBT TTA = PROFIT BEFORE TAX TOTAL TANGIBLE ASSET = 9. BANK FINANCE CURRENT ASSET = 160.59(TIME) 2.033.023 2.695.00 .99 = = 0.673.592.601.44 255.360.23 248.
00 67.69 31.18 0.09 6.00 518.in Rs.60 24.59 12 mths 27.213 ASSET TURNOVER RATIO ASSET = = NET SALES AVERAGE TOTAL 248.00 31.69 20.673.= 0. Cr.13 67.04 0.478 = FINANCIAL STATEMENT OF RENUKA SUGAR LTD. ShreeRenukaSugars Balance Sheet ------------------.101.033.26 .145 0.81 27.809.395.04 67.251.60 24.13 0. ------------------Mar '12 Sep '10 Sep '09 Sep '08 Sep '07 18 mths 12 mths 12 mths 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application 67.215.558 TURNOVER RATIO INVENTORY TURNOVER RATIO = COST OF GOODS SOLD AVERAGE INVENTORY = = 226.81 23.097.71 123.
802.221.67 1.95 122.28 105.76 100.451.23 753.895.00 0.00 0.66 100.64 41.96 2.00 0.070.98 -135.26 304.051.86 0.211.059.41 53.00 0.456.113.639.495.366.692.72 69.95 207. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA.17 38.44 248.58 621.79 755.361.363.061.15 562.00 1.563.00 0.406.00 1.161.31 513.00 231.98 1.71 159.98 1.719.116.02 193.92 589.592.85 302.715.82 229.04 161.64 410.501.84 6.76 0.265.76 87.861.071.00 0.23 9.021.230.53 159.09 432.721.00 19.627.22 150.30 982.29 982.73 572.491.51 315.161.352.00 6.00 0.788.37 376.32 176.92 1.57 186.00 0. Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 3.852.375.52 987.563.34 647.013.299.291.06 1.491.43 956.135.92 16.87 631.00 0.363.906.94 104.88 270.91 4.45 149.627.75 3.002.264.721.342.136.495.20 639.47 243.951.65 737.46 242.872.377.241.86 691.99 827.42 7.95 335.62 778.113.75 .12 5.051.00 0.39 4.711.61 2.99 1.328.571.256.68 0.052.31 147.00 0.91 48.27 10.09 38.06 355.257.11 6.73 2.76 25.57 186.02 323.06 2.05 203.683.94 2.712.779.75 Mar '12 Sep '10 Sep '09 Sep '08 Sep '07 18 mths 12 mths 12 mths 12 mths 12 mths Application Of Funds Gross Block Less: Accum.643.83 23.116.013.00 0.311.00 1.051.64 7.20 9.Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 0.69 20.
08 122.84 10.66 650.12 5.32 176.74 -88.24 44.81 Previous Years » ------------------.00 0.241.42 17.809.87 72.94 2.908.365.89 32.439.51 92.68 216.15 1.805.74 91.00 5.08 6.76 2.48 350.10 5.00 60.43 -49.818.43 47.84 55.87 86.90 5.757.05 465.55 -132. ------------------Mar '12 Sep '10 Sep '09 Sep '08 Sep '07 18 mths 12 mths 12 mths 12 mths 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 6.06 24.31 1.468.40 369.224.803.68 389.92 5.11 234.44 37.96 827.00 26.44 234.93 47.26 81.511.36 Mar '12 Sep '10 Sep '09 Sep '08 Sep '07 18 mths 12 mths 12 mths 12 mths 12 mths 738.64 1.54 39.21 1.in Rs.53 798.54 84.94 51.18 5. Cr.13 234.50 148.18 84.60 0.558.24 127.821.30 37.35 132.284.13 0.634.05 11.10 116.06 2.13 4.72 632.58 759.87 648.362.86 -180.50 22.94 381.00 43.320.52 5.64 26.14 284.18 54.23 375.37 101.18 128.58 29.28 19.25 0.00 0.16 581.081.00 0.463.584.27 2.78 1.51 61.00 63.19 2.Contingent Liabilities Book Value (Rs) Profit and loss ac Shree Renuka Sugars Profit & Loss account 1.34 106.59 0.64 Operating Profit PBDIT Interest .60 6.35 25.078.53 101.234.59 730.
06 556.51 92.00 Book Value (Rs) 26.24 22.90 Depreciation 145.00 0.00 0.82 3.51 (Rs) Equity Dividend (%) 100.00 20.46 36.47 81.15 23.79 54.759.13 5.24 0.43 Total Value Addition 623.00 100.28 280.05 143.99 Net Cash From -685.13 67.35 132.36 20.58 217.01 1.00 3.99 150.48 24.64 26.99 274.53 638.53 3.00 0.63 131.94 -354.09 150.56 Reported Net Profit 84.56 83.44 74.55 62.98 Extra-ordinary items -0.65 217.05 556.96 Corporate Dividend 10.45 Tax Per share data (annualised) Shares in issue (lakhs) 6.70 77.78 -212.92 Other Written Off 0.01 -0.54 39.67 166.00 0.69 5.26 53.65 113.88 1367.703.96 4.63 113.18 102.92 Investing Activities .00 20.62 219.00 0.00 0.PBDT 280.20 6.14 39.73 217.98 Items) Tax 50.00 2.25 6.00 0. ------------------Mar '12 Sep '10 Sep '09 Sep '08 Sep '07 18 mths 12 mths 12 mths 12 mths 12 mths Net Profit Before Tax 135.04 31.00 18.81 Cash flow statement Shree Renuka Sugars Cash Flow Previous Years » ------------------. Cr.05 410.55 Equity Dividend 67.39 1.94 77.in Rs.169.81 198.11 -584.12 4.15 0.713.00 100.70 77.00 PBT (Post Extra-ord 135.05 560.83 Operating Activities Net Cash (used in)/from -1247.88 Preference Dividend 0.89 11.83 -311.00 Profit Before Tax 135.78 -2061.10 Earning Per Share 1.63 248.
38 13.85 49.71 114.08 -187.27 8.51 Equivalents Opening Cash & Cash 23.11 4.39 30.17 Equivalents Closing Cash & Cash 10.16 15.25 Per Share (Rs) Free Reserves Per -0.67 Equivalents Ratio analysis of renuka sugar Shree Renuka Sugars Mar '12 Investment Valuation Ratios Face Value 1.47 210.88 Capital Profitability Ratios Operating Profit 13.in Rs.74 Share (Rs) Net Operating Profit 184.90 196.56 484.40 -- 15.00 Dividend Per Share -Operating Profit Per 25. ------------------Sep '10 1.60 -Sep '07 10.25 81.97 Margin(%) Profit Before Interest 5.61 And Tax Margin(%) Gross Profit 5.10 Share (Rs) Bonus in Equity 49.30 6.00 -17.01 44.46 .47 211.17 164.95 Sep '09 1.08 12. Cr.28 13.32 6.00 -7.58 506.93 -Sep '08 1.67 17.39 30.47 12.Net Cash (used in)/from 1920.95 6.70 Margin(%) Previous Years » ------------------.90 -17.00 -4.39 314.12 4.20 68.00 -57.21 12.39 23.30 12.29 13.60 Financing Activities Net (decrease)/increase In Cash and Cash -13.15 720.82 383.67 26.40 32.
02 11.06 0.33 Revaluations Return on Assets 32.43 Margin(%) Net Profit Margin(%) -0.83 1.89 1.04 30.49 1.46 Funds(%) Liquidity And Solvency Ratios Current Ratio 1.68 5.86 13.77 2.37 1.24 Margin(%) Return On Capital 7.98 Net Worth(%) Return on Assets Excluding 32.77 2.55 16.24 18.08 1.11 1.45 9.86 Debt Equity Ratio 4.65 8.66 0.55 6.00 7.83 14.66 1.41 1.63 Long Term Debt 4.77 4.87 Coverage Ratio Financial Charges Coverage Ratio Post 1.42 Worth(%) Adjusted Return on -3.68 8.50 14.31 5.45 10.95 Tax Management Efficiency Ratios 10.40 1.55 47.90 2.45 0.Cash Profit Margin(%) 7.99 0.61 8.46 Employed(%) Return On Net -1.86 34.12 9.95 34.68 0.26 175.63 Equity Ratio Debt Coverage Ratios Interest Cover 0.33 Including Revaluations Return on Long Term 7.20 11.50 175.31 6.13 0.24 Adjusted Net Profit -0.63 Fund Financial Charges 1.08 8.42 2.83 -1.48 1.48 6.31 29.20 8.65 1.00 5.94 4.55 -4.07 4.71 0.13 7.04 18.23 29.93 1.45 1.61 12.89 0.88 Total Debt to Owners 4.12 11.09 23.95 3.45 Quick Ratio 0.53 2.35 .55 1.06 1.43 Adjusted Cash 7.65 47.17 0.
14 91.95 4.88 14.90 5.51 0.21 2.83 8.07 1.73 248.33 1.67 4.46 Ratio Fixed Assets Turnover 0.97 Ratio Total Assets Turnover 1.87 Cash Profit Earning Retention -Ratio Cash Earning 91.33 -- 11.10 2.18 Composition Imported Composition of Raw Materials -Consumed Selling Distribution -Cost Composition Expenses as Composition of Total -Sales Cash Flow Indicator Ratios Dividend Payout Ratio -Net Profit Dividend Payout Ratio 7.33 25.55 21.60 15.67 100.85 1.11 8.23 86.21 80.30 16.51 9.83 -1.12 Ratio Investments Turnover 6.42 -1.42 Working Capital Profit & Loss Account Ratios Material Cost 76.58 12.93 0.94 38.87 23.19 83.20 4.55 0.87 .21 15.51 -4.01 Ratio Asset Turnover Ratio 0.67 0.26 2.51 12.86 -- 104.07 120.51 2.00 66.28 187.94 0.Inventory Turnover 6.32 -163.97 Average Raw Material -Holding Average Finished -Goods Held Number of Days In 65.30 114.78 14.06 6.09 -- 71.67 53.07 12.14 13.60 1.55 46.38 13.46 Ratio Debtors Turnover 29.04 90.70 -2.38 -- 84.87 1.95 93.81 17.
34 times in comparison to previous year. The proportion of raw material consumed & sale has been decreased in comparison to previous year 2009-2010.372 RATIO INTEREST COVERAGE 0.16 FIXED ASSET COVERAGE 1.666 RATIO INVENTORY TURNOVER 0.99 COMPARISION OF FINANCIAL RATIOS NAME OF THE RATIO NAYAGARH SUGAR CURRENT RATIO 2.08 31. .8 times.82 6.7 times.43 5.46 ANALYSIS OF FINANCIAL ASPECTS OF NAYAGARH SUAGR This analysis of financial aspects of Nayagarh Sugar Complex Ltd.213 RATIO RENUKA SUGAR 1.55 325.77 8.Retention Ratio AdjustedCash Flow Times 10.036 DEBT EQUITY RATIO 9. Is providing the specified comparison of various financial aspects of the year 2011 with the data of 2010. Gross sale has been increased by 2. The expenditures in raw materials consumed is increased by 2.372 0.45 4. Net profit increased by 1.63 1.
Planning is also made to establish a project in Bhadrak with the capacity of 2500tcd & 18 mw power generation. . Is in a good position n comparison to the profitability of the renuka Sugars Ltd.05 times. After completion of this project the plant will able to generate 1 mw power from the grain. There is a very big change in the current liability. But the current asset is decreased by 0.93times CONCLUSION The profitability of Nayagarh Sugar complex Ltd. A dislery project is also going to be started in Nayagarh Sugar plant in Nayagarh. Is also planning for many projects. It increased by 10. Nayagarh sugar complex Ltd. Fixed asset of the firm is increased by 1.08 times. The projected net worth of the project is 280 corers. Long term liabilities also decreased by 0. Some of the projects are Nayagarh sugar is also making plan to start a plant in Navarangpur with the capacity 2500 TCD& with power generation capacity of 18mw. Capital work in progress is remaining same during the period. Land acquisition for the project is also completed. The project cost is Rs60 crores.98 times. The project cost will be 310 crores.
In brief. relation and evaluation. Nevertheless. The first task of financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. To capture the rural market the company is also planning to introduce retail sugar packet of 1kg & 5 kg. financial analysis is the process of selection. MANAGEMENT ACCOUNTING AUTHOR: Sashi K Gupta PUBLISHER: Kalyani Publishers 2. The final step is interpretation and drawing of inferences and conclusions.It shows that the company is performing well &also earning a good profitability. they are an important tool of financial analysis. The second step is to arrange the information in a way to highlight significant relationships. The analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firm‘s position and performance. FINANCIAL MANAGEMNT AUTHOR: Prasanna Chandra . Ratio analysis in view of its several limitations should be considered only as a tool for analysis rather than as an end in itself. The reliability and significance attached to ratios will largely hinge upon the quality of data on which they are based. They are as good or as bad as the data itself. BIBILOGRAPHY BOOKS 1.
nayasugar. J Panda. ANNUAL REPORT OF NSCL 2.indiansugar.com www.renukasugar.com ANNUAL REPORTS 1. WEBSITES www.3. college Khorda . Research article published by Mr. FINANCIAL ACCOUNTING AUTHOR: T S Grewell PUBLISHER: Sultan Chand & Sons. ANNUAL REPORT OF RENUKA SUGAR ARTICLES 1.N. lecturer P.com www.
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