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“The Study of the Sugar Industry and the Financial Performance Analysis of Three Sugar Units done for IDBI”
This project report is being submitted as part of the requirements of the MBA Program of Bangalore University (2003-05). The study has been undertaken by: CIBY OOMMEN Reg. No. 03VWCM6023 With the guidance and support of Prof. Guha Faculty, ABA
ALLIANCE BUSINESS ACADEMY BANGALORE – 560 076 Batch: 2003-2005
DECLARATION I, Ciby Oommen, studying in Alliance Business Academy, Bangalore do hereby declare that this dissertation study on the topic “The study of the Sugar Industry and
the Financial Performance Analysis of Three Sugar Units done for IDBI” is an original research
work carried out by me as part of the requirements of the MBA Program of Bangalore University (Batch of 2003 – 2005). My guide for the training has been Prof. K. N. Guha. I further declare that this project report has not been submitted earlier to any other University or Institute for the award of any Degree or Diploma.
Date: 9.06.2005 Place: Bangalore
CIBY OOMMEN Reg. No 03VWCM6023 ALLIANCE BUSINESS ACADEMY
This is to certify that Ms. Ciby Oommen, of Alliance Business Academy, pursuing her MBA degree through Bangalore University has done a dissertation study on:
“The study of the Sugar Industry and the Financial Performance Analysis of three Sugar Units done for IDBI”
This work is based on an original project study conducted by her under my guidance. This has not formed a basis for award of any degree by Bangalore University or any other university.
Date: 10.06.05 Place: Bangalore Prof. K.N. Guha Faculty Alliance Business Academy
G.ACKNOWLEDGEMENT It would not be fair to start the formal proceedings in this study report without recognizing the efforts and input of all those people without whom this would not have been possible. just a word for my parents. 4 . our chairman and Dr. Angur. Guha. Finally. At first hand I would like to thank Mr. V. our director for giving me this opportunity. Thank You. I also like to thank my friends who have rendered their help and support in the completion of the project work. Sudhir. I would also like to mention the valuable inputs given by the managing directors of the three sugar units without whom this would not have been possible. B. Krishnamurthy. if not for whom this would be pointless. I extend my deepest gratitude to Prof. my guide and teacher without whose valuable guidance it would have been impossible for me to make sense of this project.
one of the major Financial Institutions in India has contributed to the growth of National economy and has always been supportive to the Government by assisting in its development activities. Bihar. To understand the reasons for such problems and the effect of the industry trends three sugar units assisted by IDBI have been studied. India is the largest producer and consumer of sugar in the world. controls by the Government. the institution also strives towards enhancing the scope for overall development of those emerging industries. Punjab. In addition to analysis and determining the problems.ABSTRACT Industrial Development Bank of India (IDBI). which has slowly yet steadily given way to liberalization. In the past few years the sugar industry in India has been facing several problems like mounting stocks. This financial analysis forms the basis for sanctioning of loans by IDBI. The government had a controlling grip over the industry. Rajasthan. Indian sugar industry is highly fragmented with organized and unorganized players. In India sugar is produced mainly in the states of Andhra Pradesh. with Maharashtra contributing over one-third of country’s sugar output. the less refined forms of sugar. The unorganized players mainly produce Khandasari and Khandari. 5 . There are around 434 Sugar Mills in India. Tamil Nadu and Uttar Pradesh. Gujarat. low capacities etc. The financial analysis of the sugar units was done using financial analysis tools like ratio analysis. has been the topic of the study. This institution was established with a view to analyzing/ determining the problems and prospects of the emerging industries in India. common-size statements and trend analysis. Madhya Pradesh. Karnataka. One such emerging industries namely the sugar industry. Maharashtra.
The Industrial Finance Corporation of India (IFCI) was formed in 1948 to finance development especially in the industrial sector. Broadly speaking such FIs are known as Development Banks. For each category of term financing activity. There are separate development institutions for agriculture. industry.0 INDUSTRY PROFILE 1. SSI. mainly to provide the required thrust to accelerate industrialization and to meet the increasing need of capital. FIs in India comprises of 14 institutions at the national level and 46 at the State Level. an apex All India Development has been promoted. Industrial Credit and Investment Corporation of India (ICICI) followed in 1955. and State Financial Corporations under the SFC Act were set up thereafter to cater the specific industrialization needs of the States. The national level institutions comprise 6 All India Development Banks (AIDBs). These institutions have played an important role in the development of the industries and thus the success of the economy. tourism. investment.1 HISTORY OF FINANCIAL INSTITUTIONS The Government of India had set up Financial Institutions (FIs) for providing finance to those sectors of the economy to which commercial banks do not provide finance. Industrial Development Bank of India (IDBI) was incorporated by an Act of Parliament in 1964. Industrial Reconstruction Bank of India (IRBI) was set up in 1971 to nurture sick units. IRBI is renamed as Industrial Investment Bank of India (IIBI) and Small Industries Development Bank of India (SIDBI) 6 . etc. 1.1 All India Development Banks (AIDBs) Industrial Finance Corporation of India (IFCI) was set up in 1948 to provide long-term finance to industrial sectors. 5 Specialized Financial Institutions (SFIs) and 3 Investment Institutions (IIs). there are 18 State Financial Corporations (SFCs) and 28 State Industrial Development Corporations (SIDCs).1.1. At the State Level. These institutions handle the problem of providing long-term finances at affordable rates.
2 Specialized Financial Institutions (SFIs) In recent years. (TFCI) Technology Development and Information Corporation of India (TDICI) and ICICI set up to fund VC projects. (RCTC) Tourism Finance Corporation of India Ltd. The IDBI Act governs the functions and working of IDBI.IDBI Industrial Development Bank of India (IDBI) was established in 1964 by the Government of India under an Act of the Parliament. the government has set up 4 Specialized Financial Institutions and they are as follows: Export and Import Bank of India (EXIM bank) was hived off from IDBI in 1982 as a separate institution. to provide credit and other facilities for the development of industry. 1964 (IDBI Act).2 COMPANY PROFILE . the ownership of IDBI was transferred from RBI to the Government of India and 7 . 1.3 Investment Institutions (IIs) The following are the Investment Institutions: Life Insurance Corporation of India (LIC) Unit Trust of India (UTI) General Insurance Corporation of India (GIC) 1.1. IDBI was set up as a wholly owned subsidiary of the Reserve Bank of India (RBI). IDBI was reconstituted through legislation in 1976 enacted by Parliament and was made the premier financial institution of the country. The Risk Capital and Technology Corporation Ltd.1. Initially. called the Industrial Development Bank of India Act. Due to manifold increase in its activities and diverse responsibilities. In 1976.1.
promoting or development of industry. in July 1995. In October 1994.it was entrusted with the additional responsibilities of acting as the principal financial institution for coordinating the activities of institutions engaged in the financing. Following this amendment. This would help IDBI in responding to the changing needs of industrial sector in a much more prompt and decisive manner. The Government stake now stands at 57. the IDBI Act was amended.187. the Government shareholding in IDBI was reduced to 72.76%.2184 crore. Simultaneously. Since its inception IDBI has played a pioneering role in fulfilling its mission of promoting industrial growth in line with national plans and priorities. which was established as a wholly owned corporation of the Government of India. as a wholly owned subsidiary. which permitted IDBI to raise equity from the public. IDBI made its initial public offering of equity shares aggregating Rs. CARE is the credit rating agency promoted by IDBI.5 crore to the Indian public. In 1982. In 1990. IDBI transferred its portfolio comprising the operations relating to small-scale industries were shifted to the Small Industries Development Bank of India (SIDBI). subject to the provision that the holding of the Government should not be below 51% of the issued capital. and as on date. On completion of allotment of shares to the public. which was providing export finance to industry to the Export and Import Bank of India.14% in line with recommendations of Narasimham Committee. In August 2000. The amendment also aimed at providing greater operational flexibility to IDBI. 8 . IDBI transferred its International Finance Division. the Government also offered for sale a part of its holding of equity shares in the capital of IDBI aggregating Rs. IDBI became the first All India Financial Institution to obtain ISO 9002 Certification for its treasury operations.
813 crore (disbursements). and also to co-operatives. IDBI currently offers the following major products and services to industrial concerns: 1. term loans or a mix of both. diversification and modernization of existing industrial enterprises. approximately 91% of total sanctions and 94% of the total disbursements were under direct finance. diversification and modernization of existing industrial units. Assistance under project assistance can be either in the form of equity. 9 . joint and public sectors. Reflecting national priorities.1. Infrastructure Finance Infrastructure development has been a keen commitment on the country’s macro agenda on account of its deterministic influence on overall economic growth. assistance is provided to the industrial units directly.3 PRODUCTS AND SERVICES PROFILE IDBI provides finance for the establishment of new industrial projects as well as for expansion.440 crore (sanctions) and Rs. Project finance is granted directly to units established as companies in private.3.1 Direct Finance Under direct finance. Infrastructure financing continues to be the Bank’s thrust area with IDBI financing projects involving large financial outlay. IDBI has adopted infrastructure financing a key focus area. Project Finance Project Finance involves providing credit and other facilities to medium and other large scale units as well as for the establishment of new projects as well as for expansion. IDBI has made efforts to respond to the financial needs of the industry by constantly expanding its range of products and services. Assistance to infrastructure projects during 2003-04 amounted to Rs. During 2003-04.
which arise from the sale of indigenous machinery on a deferred payment basis by a seller to a domestic purchaser. including films and approving the same as an eligible activity for financing under the IDBI Act. in the form of full payout financial lease. IDBI has introduced a scheme for financing the film industry. Equipment leasing Financial lease is provided by IDBI for the purchase of indigenous / imported equipment for a period of 3-10 years.Financing of Feature Films Pursuant to the Government of India giving industry status to Entertainment industry. Direct Discounting of Bills IDBI provides facilities for direct discounting of bills of exchange and promissory notes. 10 . Under asset credit facility. IDBI underwrites public and rights issues and provides direct subscription support in respect of equity as well as debt instruments. Such loans are secured by charge on specific assets and generally have a maturity of up to 6 years. Equipment Finance and Asset Credit Under equipment finance. a line of credit is extended to industrial units for financing of their normal capital expenditure over a period of about 5-6 years and is secured by a charge on the assets so acquired. Underwriting and Direct Subscription As part of project finance and capital market activities. rupee and foreign currency loans are given to industrial units conforming to certain financial criteria for the purpose of financing acquisition of specific items of machinery and equipment.
3. 1. Corporate Loans & Working Capital IDBI also provides loans to corporates to meet the working capital and other normal expenditure under the corporate loan Scheme and Treasury product facilities. as well as for projects which fall in the high-risk. Line of credit to SFC/SIDCs. It also provides finance for implementing Ozone Depleting Substances (ODS) phase out projects under the Montreal Protocol.2 Indirect Finance This refers to the provision of finance to industrial concerns through State Financial Corporations (SFCs). for projects involving adaptation and development of imported technology. by ways of: Refinance facilities to SFCs. State Industrial Development Corporation (SIDCs) and Commercial Banks. high-return venture category. the responsibility for repayment of loans to IDBI rests with the relevant intermediary institution or bank. It also provides term loans to pollution control and prevention projects in highly polluting industrial sectors. and banks against their loans to medium-sized industrial concerns throughout India. 11 . Investment is shares of other financial institutions/SFCs and. Rediscounting of bills of exchange discounted by banks arising from sale of indigenous machinery on deferred payment terms. Under indirect finance. SIDCs. Venture Capital Venture Capital finance is extended by IDBI for projects involving the development and use of indigenous technology.Energy Conservation IDBI provides rupee and foreign currency loans for the acquisition and installation of energy conservation equipment.
1. swaps. Assistance is provided in restructuring of existing corporates through mergers. project advice or appraisal. acquisitions and divestments. (ITSL) IDBI Intech Ltd. forward exchange rate agreements and other derivative products.Indirect finance form only 3% of the total IDBIs portfolio. capital restructuring and mergers and acquisitions. identification of foreign partners/investors and assistance in evaluation and negotiations. 1. loan and guarantee syndication. Forex Services IDBI offers various foreign exchange related services namely spot and forward purchases of currencies for letters of credit and debt servicing.4 SUBSIDIARIES IDBI has set up a host of subsidiaries and associates with a view to expand the functional reach of the IDBI Group and take advantage of opportunities in a liberalized market economy. The main subsidiaries of IDBI are: IDBI Bank Ltd Small Industries Development Bank of India (SIDBI) IDBI Capital Market Services Ltd (ICMS) IDBI Trusteeship Services Ltd.3. It undertakes valuation of shares and advises public sector undertakings of industry studies. It also provides support in structuring financing plan and advising on financing options. (INTECH) 12 . These include techno-economic evaluation of projects. Corporate Advisory Services IDBI offers advisory services to corporates.3 Financial Services Merchant Banking IDBI’s capital market division provides professional advice and service to industry for capital market issues.
borrowings under capital bonds scheme. borrowings from the corporates I. Deposits and borrowing from other sources. Multilateral and bilateral credits.6 OPERATIONS IDBI’s portfolio of direct finance comprises over 3200 companies representing the complete range of industrial activities and a well-diversified client profile. investments and guarantees. Besides equity support by the Government. IDBI also enjoyed tax exemption. 2005 was Rs. syndicated loans and other foreign currency borrowings. raised concessional funds by way of SLR bonds.T.IDBI Home Finance 1.5 SOURCES OF FUNDS With a view to foster industrialization and to provide concessional finance to the industry. At present. etc. fixed deposits and private placement of unsecured bonds. 2004 was Rs. Borrowings from the Government and RBI. Foreign currency borrowings. scheme.54677 crore and March 31. Since the advent of liberalization. concessional funds more or less evaporated and the IDBI had to rely on market borrowings. as on September 30. Its portfolio which includes loans. the GOI granted IDBI concessional funds. Borrowings by way of Government Guaranteed Rupee Bonds. Certificates of deposits. Market related borrowings including Public Issue. etc. the principal sources of funds are: Equity. 13 .57850 crore. Internal generation 1.
which together accounted for about 48% of the outstandings as on March 31. indicating high credit quality with a low expectation of Credit risk. FITCH and “LAA” by ICRA.8. cotton textiles. 2004 only two industries viz Iron & Steel and Electricity Generation exceeded the limit. A2 and Graph G1. The recent Flexi Bonds of IDBI have been rated as “AA+” by CRISIL. 1. 2004 is given in APPENDIX B – Tables B1 and Graph G1. power. telecom services and petrochemicals. 1.8 IDBI’S CREDIT RATING 1. the highest international rating obtained by an Indian borrower viz “BBB” for its Japanese yen bond issues in February 1991. 1. 2004. Moody’s Investors services have assigned a long-term foreign currency debt rating of “Baa3” with positive outlook. 14 . The major outstandings are to the iron & steel. Recently IDBI has revised the exposure limit to individual industry at 10% of its total portfolio or Rs.5000 crore whichever is lower.7 INDUSTRY-WISE BREAK-UP OF PORTFOLIO IDBI’s loan portfolio is well diversified among industries.Particulars regarding the effective sanctions and disbursements for the last four years are given in APPENDIX A – Tables A1. The industry-wise breakdown of the outstandings as on March 31.1 International Rating Japan Rating and Investment Information Inc (R&I) has accorded to IDBI. has assigned long-term foreign currency rating of “BB+” to IDBI.2 Domestic Rating “AAA” by the domestic rating agencies. Fitch. As on March 31.8. Standard & Poor’s assigned “BB” long term foreign currency credit rating to IDBI. the international rating agency.
trend analysis and common-size analysis. 2. Identify the problems faced by the three units under study.2 OBJECTIVES OF STUDY Identify the problems prevalent in the sugar industry. Identify the possible ways of reviving the ailing sugar units. The financial details of the three sugar companies under study were obtained from the published annual reports of these units. 15 . 2. 2.1 STATEMENT OF PROBLEM The problems is to find out a basis for sanctioning of loans by IDBI to the Sugar Industry particularly in reference to three units. Shakthi Sugars Ltd and Bannari Amman Sugars Ltd 2.0 RESEARCH METHODOLOGY 2.3 SCOPE OF THE RESEARCH The study was done for three sugar units in Coimbatore namely Rajshree Sugars and Chemicals Ltd. Secondary data was collected from published articles in magazines and the internet.2.5 DATA ANALYSIS The performance analysis of the sugar units were done by analyzing the financial statements of the units over the past four years using tools like ratio analysis.4 RESEARCH DESIGN Exploratory research was conducted to understand the present state of the industry and the problems faced by the industry.
The eighteenth century witnessed the development of new technology to manufacture sugar from sugar beet. Today.3. is presently a dominant player in the global sugar industry.1 INTRODUCTION Sugar is one of the oldest commodities in the world and traces its origin to 4th century AD in India and China. Approximately 70 percent is produced from sugar cane. 3. sugar is produced in 121 Countries and global production exceeds 120 million tons a year. 16 . Equally. India is all set to continue its domination at the global level. The European.0 THE SUGAR INDUSTRY 3. a very tall grass with big stems. largely grown in the tropical countries. and Oceanic countries pioneered this. Given the growing sugar production and the structural changes witnessed in Indian sugar industry. In India sugar is produced from sugar cane.2 THE INDIAN SUGAR INDUSTRY India. American. along with Brazil. In those days. The remaining 30 percent is produced from sugar beet. A typical sugar content for mature cane would be 10% by weight but the figure depends on the variety and varies from season to season and location to location. the yield of cane from the field varies considerably but a rough and ready overall value to use in estimating sugar production is 100tons of cane per hectare or 10 tons of sugar per hectare. sugar was manufactured only from sugarcane. a root crop resembling a large parsnip grown mostly in the temperate zones of the northern hemisphere.
The Corporate sector and the Cooperative sector. There are around 434 Sugar Mills in India as on March 2004. Production of sugarcane. Thus. Cane purchases. Population. In India. the less refined forms of sugar. the Government exercises a control over all aspects of the production and sale of sugar. The Corporate sector includes the Public sector. Rajasthan. sugar is produced mainly in the states of Andhra Pradesh. decides the quantity that can be sold in the open market. Production value. and Uttar Pradesh. the domestic sugar 17 . Karnataka. with Maharashtra contributing over one-third of country’s sugar output. Punjab. The government had a controlling grip over the industry. Indian sugar industry is highly fragmented with organized and unorganized players. The basic parameters by which the sugar industry is measured are: Total units. fixes the levy quota of sugar etc. The Government controls the price of sugarcane and sugar capacity additions. Gujarat. based on the levy sugar prices and the subsidy to be provided through budgetary system. In India with a large section of the agriculture-dependent population involved in the farming of sugar-cane (which constitutes 60-70% of the cost of sugar).India is the largest producer and consumer of sugar in the world. Sugar has always been the most political of all commodities. Sugar recovery. Production of molasses. Sugar is a controlled commodity in India. Working units. It comes under the Essential Commodities Act. Sugar is produced in two sectors in India . Madhya Pradesh. and this control extends to the level of wholesalers in the distribution chain. 1955. Tamil Nadu. Total consumption. The Government of India fixes the sugar prices distributed through the PDS. A Dual Pricing System is adopted in the Indian sugar industry. Maharashtra. Per capita consumption etc. The unorganized players mainly produce Gur and Khandari. which includes sugar price in Public Distribution System (PDS) and the Free Market Price. Cane crushed. Bihar. which has slowly yet steadily given way under liberalization.
1 Stocks The Rs 25. Year 2001-02 2002-03 Levy Sugar 26.48 10.27 Sugar Given below is the annual release of levy sugar and free sugar (thousand MT).32 20. controls by the Government.3. Year 2001-02 2002-03 Sugarcane (million MT) 26. The sugar recovery and crushing period during the years 2001-02 and 2002-03 are given below.3 THE PROBLEMS In the past few years the sugar industry in India has been facing several problems like mounting stocks.industry has traditionally attracted political protectionism.25 112 The production of sugar and its associated products for the period 2001-02 and 2002-03 is given below.5 Sugar MT) 121.2 80.7 (lakh 3.5 Free Sugar 121. Each of these problems has been dealt in detail below.32 20.000 crore sugar industry has been suffering from the problem of plenty for nearly five years causing distress both to the sugar factories and sugarcane growers.25 112 (lakh Molasses MT) 78. low capacities etc. Most of the 450 sugar factories in the country are beset with 18 . 3. with too many restrictions on input and output prices as well as on the distribution of the commodity. Average Year 2001-02 2002-03 Period (days) 139 140 Crushing Average Recovery (%) 10.
State governments intervene in matters relating to sugarcane production and pricing. Sugar Wage Board Rules.four successive years of excess production resulting in the build-up of unsustainable stocks. Sugar Control Orders. and Molasses Decontrol. 1961. in India. the sugar mills have no assurance regarding the adequate availability of sugarcane for the installed capacity base. In addition to the regulations issued by the Central Government.2 Regulations In India. the state governments have control over the allocation of the command area. which govern the sugar industry. the sugar industry is also affected by regulations issued by the state governments. 1966 and 1999. 1993. 1964. The prices of sugar have crashed from Rs 1300 per quintal in 2001-02 to Rs 1180 per quintal in 2002-03 and Rs 1070 per quintal in 2003-04. The industry was mired in an intricate web of controls and restrictions for long because sugar has been considered as one of the essential commodities. In addition. As a result. the sugar industry. hence. 1943. which is below the levy sugar price. sugarcane farming by corporates is not allowed. Some of the regulations. even the Minimum Support Price (MSP) fixed by the government.3. This year an additional price hike of Rs 5 a quintal has been made. as sugar producers can not hold/own land. 3. To make matters worse the MSP of sugarcane is arbitrarily hiked every year. from sugarcane production to sugar distribution is highly regulated by the Government. Molasses Control Order. The Essential Commodities Act. Financial viability has been eroded with the industry suffering a loss of Rs 5500 crore in the last two years. In India. the capacity additions and production planning for sugar 19 . include. Large arrears of sugarcane price have accumulated and the industry is unable to pay cane prices.
In addition to the regulations issued by the Central Government. As a result. State governments announce the support/advice prices for sugarcane. sugar prices are monitored carefully and sugar produced can not be increased as sugar is considered as an essential commodity. Sugar sales higher than the fixed quotas are not permitted.producers is difficult. the control of the Governments on the sugar industry has been declining. The Government has a control on the sale of sugar through the quota release mechanism. State governments intervene in matters relating to sugarcane production and pricing. The sugar mills have a limited ability to control the quality. most restrictions were removed. which has adversely affected the profitability of sugar units. Levy quota sugar is to be sold at a subsidized rate. quantity and the cost of the sugarcane procured. the sales and distribution of sugar are controlled. Over the years.3. In a phased decontrol over past three years. the sugar industry is also affected by regulations issued by the state governments. 3. which are usually announced without any economic consideration and are not linked to sugar realizations.3 Pricing The sugar industry follows a highly controlled pricing mechanism. In addition. Sugar sales lower than the allocated quota would have to be surrendered to the Government at levy prices. Statutory Minimum Price (SMP) The Statutory Minimum Price (SMP) is the minimum price fixed by the Central Government that the mills have to compulsorily pay to the sugar cane growers. State advice/support prices announced by the state governments are usually higher than the Minimum Support Price (MSP) of sugarcane announced by the Central Government. except the 10 per cent levy on mills (Government procurement below market price) and the monthly free-sale quota release mechanism (marketing restrictions). 20 .
The Government distributes the sugar procured to the poorer sections of society through fair price shops (public distribution system). Free-sale quota Free-sale quota is the balance production.5 6.1 69. at a price lower than the cost of production (levy price) a fixed proportion of the sugar production (called levy quota).0 200001 200102 200203 200304 State advised price (SAP) In addition to SMP announced by the Centre.5 per cent) for the ongoing 2004-05 crushing season.5 199900 basic recovery rate of 8. Sugarcane: Statutory minimum price (SMP) (Rs per quintal) SMP(Linked to the 52. Levy quota. The Government issues release orders allowing producers to sell a fixed quantity of sugar in the open market in each month.5 62.5 per cent) Growth over previous year the 6. levy price and public distribution system (PDS) The Government procures. State advice/support prices announced by the state governments are usually higher than the Minimum Support Price (MSP) of sugarcane announced by the Central Government.7 56.The Centre fixed an SMP of Rs 73 per quintal (linked to a basic sugar recovery of 8. 21 .3 12. left after levy quota that can be sold by producers to the consumers in the open market.1 59. State governments announce the support/advice prices for sugarcane.1 4.
PDS issue price It is the retail price at which sugar is sold through PDS shops. 3.5 Cost of Production Sugarcane is the key input for sugar production. Sugarcane is handled by hand and involves extensive labour. It accounts for around twothirds of the cost of production of sugar. such as tropical climate. 22 . 3. over 50 per cent of the units (accounting for approximately over onethird of the installed capacity) had a capacity of less than 2.000 tcd at the same location. instead of expanding the capacity beyond 10. Sugar recovery rates in India are not significantly lower. easy availability and low cost of labour. sugar producers prefer to increase capacity by acquiring small units. the existing infrastructure is unable to support sugarcane management and transportation of sugarcane in large volumes. and thereby the gestation period for sugarcane development would be lower. Labour costs account for a significant share of the total cost of producing sugarcane.3.500 tcd (tonnes of cane crushed per day-minimum economic size capacity).4 Capacity In 1998. In general. In addition. The difference between the PDS issue price and the cost to the Government (cost of levy sugar. India has ideal conditions for growing sugarcane at a low cost. and the cost of storing and transporting such sugar) is the subsidy provided by the Government. which is required to support the increased capacity. as compared with the international standards. and low cost of irrigation facilities. since the sugar producers would have access to the cane command area of the acquired unit.3.
as compared with other leading sugar producing countries. due to the high borrowings required for funding sugar inventories.India is relatively competitive at the farm level (as measured by the cost of sucrose). its overall competitiveness is lower. Sugar producers are expected to benefit with the discontinuation of the release mechanism. the net profit margins are low. as producers would be able to control the sales volume. 23 . However. This can be turned into a cattle food or sent to a distillery where alcohol is made.3. thus a sweet by-product is formed called the molasses. such as Thailand (98 per cent). sales of domestic producers are controlled by the release mechanism. The main reasons for the inefficiencies at the mill level are lower overall recovery rates and smaller capacities. due to the high factory production costs. as sugar production is seasonal. However. However. as compared with that in other countries.) In addition. based on the prevailing demand-supply situation. As a result of the high debt-equity ratio. with the world average at 100 per cent). in order to be successful.4 BY-PRODUCTS During the manufacturing of sugar from sugar cane not all the sugar can be extracted out of the juice. (Inventory levels with domestic producers are high. cost of production is higher in countries. due to the high debt levels. the sugar producers would need to implement new strategies. Pakistan (110 per cent) and China (130 per cent). the interest coverage ratio of the sugar industry is low. In India. 3. the total cost of white sugar producing mill is high (indexed at around 82 per cent.6 Performance Operating margins in the sugar industry are moderate. such as Brazil (60 per cent) and Australia (70 per cent). In a decontrolled environment. 3. The debt-equity ratio of the sugar industry is high.
The factory needs electricity and steam to run. Going forward. However the scenario is changing. The by-products of sugar. as further pressure builds up on the sugar inventory in the country. The bagasse is burnt in large furnaces where a lot of heat is given out which can be used in turn to boil water and make high pressure steam. With diminishing closing stock India has started to import sugar after a long time. the prices will move higher.e. i. i. In India with a large section of the agriculture-dependent population involved in the farming of sugarcane (which constitutes 60-70% of the cost of sugar). with too many restrictions on input and output prices as well as on the distribution of the commodity. The net profit margins are low. with no trouble due to 24 . as sugar production is seasonal The interest coverage ratio of the sugar industry is low. The steam is then used to drive a turbine in order to make electricity and create low-pressure steam for the sugar making process. 3.The fibre obtained from crushing the sugar cane is called bagasse in the industry. the domestic sugar industry has traditionally attracted political protectionism. both of which can be generated using this fibre. In such a scenario the companies that can source the raw material. Inventory levels with domestic producers are high. Most importantly. for the first time India will see a sugar supply crunch since the 1980s.e.5 SUGAR INDUSTRY STANDARDS Operating margins in the sugar industry are moderate.6 THE CURRENT INDUSTRY SCENARIO Sugar has always been the most political of all commodities. The debt levels are high due to the high borrowings required for funding sugar inventories. The restrictions over the distribution of the commodity have gone. 3. alcohol (potable as well as industrial) and bagasse are driving the growth in the bottom line of sugar companies. sugar-cane.
The Company has some of the most distinguished specialists in sugar engineering. It has: 25 .their locational advantage or due to long-term relationship with farmers are poised to benefit. The Company today is an integral part of the rural economy. The programme requires close interaction with farmers and involves providing requisite material and technical support. technology and sugarcane development and has in-house expertise in all areas of sugar factory operation. Sakthi Sugars has set up sugar units in different parts of India. Eco-friendly organic practices are imparted to farmers.1 RAJSHREE SUGARS AND CHEMICALS LTD The sugar factory has a capacity of 2500 TCD (tonnes of cane crushed per day) and is balanced to handle 3000 tonnes of cane per day. the Company has set a record for a plant in its category. Shakthi Sugars Ltd and Bannari Amman Sugars Ltd.750 tonnes of cane crush per day. A study was done for three sugar units in Coimbatore namely Rajshree Sugars and Chemicals Ltd. The factory has an extended crushing duration of over 300 days in a season as against the industry norm of 180 days and has consistently recorded an average sugar recovery of around 10%. 3. The Company has a dedicated and intensive cane development program to ensure the required quantity of cane with high CCS.6.2 SAKTHI SUGARS LTD Sakthi Sugars Limited is one of the largest producers of white crystal sugar in the country accounting for a capacity of 12.000 tons of cane in a single year. A well-trained team of agricultural experts man far-flung divisional operations of its sugar cane procurement department.6. The profiles of these industries are as follows: 3. The factory was commissioned in 1990 and is today one among the leading sugar factories in the country. Crushing over 900. High quality seeds of improved cane varieties are raised in nurseries and supplied for planting in a staggered schedule. The factory produces sugar of ISS grade S-30 with an ICUMSA value less than 100. The Company has focused on agricultural extension services with a view to encourage modern methods of cultivation to improve sugarcane yield per hectare.
Sugar Unit-1: An EN/ISO 9002 unit accredited by RWTUV of Germany in 1997 for its good system of quality management ensuring a better product. Tamil Nadu State. Shakthi Sugars Ltd and Bannari Amman Sugars Ltd that had taken loans from IDBI were studied and analyzed using the following tools. Best export quality of Sugar produced. • • • Sugar manufactured is of international standard of ICUMSA 35 units maximum and exported overseas. started its commercial production in the year 1986 with an initial capacity of 1250 tonnes of Cane crush per day and expanded to 2500 tonnes in 1998. The unit's sugar is also marketed in consumer packs of 1 kg in select cities of Tamil Nadu.7.• • • • Mills equipped with Auto Setting facilities.2007. The crushing capacity is now expanded to 4000 TCD. This has been upgraded to ISO 9001:2000 valid upto 20. Efficient Sugar manufacturing method used thereby reducing the sugar loss. pest resistant and high yielding sugarcane varieties Mechanization of cane harvesting. The unit has many credits and firsts in the sugar industry of the country. Factory sites are maintained neat and clean .Hygiene at its best.3 BANNARI AMMAN SUGARS LTD WHITE CRYSTAL PLANTATION CANE SUGAR production in the two units of Bannari Amman Sugars Limited is now double at 7500 tonnes of cane crush / day from the initial capacity of 3750. The first Sugar unit near Sathyamangalam of Erode District.0 FINANCIAL PERFORMANCE ANALYSIS The financial statements of the three sugar units Rajshree Sugars and Chemicals Ltd. 3. 26 . 4. Scientific farming Continuous R&D in sugar rich.6.
The standard current ratio for a healthy business is two. It shows the percentage of net sales remaining after subtracting cost of goods sold. The ratios are useful only when they are further interpreted. as long as it keeps overhead costs in control. you will recognize if it begins to get out of line. A high gross profit margin indicates that a business can make a reasonable profit on sales. This will allow you to take early action to prevent your business from ending up in a difficult position. By keeping a close eye on this figure. Some of the ratios calculated have been explained below: Gross Profit Margin Ratio The gross profit margin ratio indicates how efficiently a business is using its materials and labor in the production process. The current ratio should be part of your business' basic financial planning. It helps us understand the financial strengths and weaknesses of a firm. meaning it has twice as many assets as liabilities. meaning it should be tracked monthly or quarterly. Current Ratio The current ratio is the standard measure of any business' financial health. It will tell you whether your business is able to meet its current obligations by measuring if it has enough assets to cover its liabilities.1 RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements.•Ratio Analysis •Common-size Statements •Trend Analysis 4. 27 . A single ratio in itself does not make much of sense.
the quick ratio (also sometimes called the acid test ratio) measures a business' liquidity. This is an important planning tool. safer is the long-term creditors because even if the earnings of the firm fall the firm shall be able to meet its commitments of fixed interest charges.Quick Ratio Like the current ratio. It calculates a business' liquid assets in relation to its liabilities. 28 . since it also indicates whether a business can pay off its debts quickly. Debt Equity Ratio The debt equity ratio is ideally 1:1. A low ratio is considered as favorable from the long-term creditors point of view because a high proportion of owner’s fund provide a larger margin of safety for them. we can keep an eye out for negative trends that could hamper our business' ability to meet its obligations. which usually corresponds to its financial health. A firm with a low quick ratio may be more likely to delay payments because its assets are tied up elsewhere. However. The optimal quick ratio is 1 or higher. Caution to be taken as a very high ratio may be unfavorable from the point of view of the firm as its hard to get credit without paying a very rate of interest and without accepting undue pressure and conditions of the creditors. the higher your business' level of liquidity. especially for businesses that can tie up a lot of assets in inventory. We can also use the quick ratio to evaluate the financial health of potential customers. many financial planners consider it a tougher measure than the current ratio because it excludes inventories when counting assets. By tracking it monthly. The higher the ratio is. Interest Coverage Ratio The higher the ratio. A high debt equity ratio which indicates that the claims of outsider’s (creditor’s) are greater than those of owner’s may not be considered by the creditors because it gives a lesser margin of safety for them at the time of liquidation of the firm.
This ratio measures the efficiency with which the working capital is being used by the firm. Working Capital Turnover Ratio Working capital of a concern is directly related to sales. it could indicate that it may be hampering your cash flow. Because this ratio judge’s annual inventory turns. The net income has decreased in 2003-04 due to substantial increase 29 .2 INTERPRETATIONS The financial statements and the ratio analysis for Rajshree Sugars and Chemicals Ltd are given in APPENDIX C – Tables C1. it declined to 23.9%. Rajshree Sugars and Chemicals Ltd The gross profit margin ratio has shown considerable variation over the past four years. The net margin ratio increased from negative levels to 1. It ranges from -7. The high variability of gross margin is not a good sign. 4.Inventory Turnover Ratio This ratio tells how often a business' inventory turns over during the course of the year. However. If inventory is turning too slowly. it is usually conducted once a year. The operating profit ratio improved in the period 1999-00 to 2002-03 from 13. Because inventories are the least liquid form of asset. a high inventory turnover ratio is generally positive.3%. in 2003-04.7% to 26. On the other hand. an unusually high ratio compared to the average for your industry could mean a business is losing sales because of inadequate stock on hand. If your business has significant assets tied up in inventory.01% in 200203. tracking your turnover is critical to successful financial planning.3%. A higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise.4% to 23. C2 and C3. Working Capital Turnover Ratio indicates the velocity of the utilization of net working capital.
suggesting severe liquidity problems. Earnings per share has shown a steady improvement from Rs. 0. The cost of goods sold has increased manifolds over the years. Thus in 2003-04 the ratio has again decreased to 0. It has severe liquidity and turnover problems that need to be addressed.96.6 over the last 4 years. The financial statements and the ratio analysis for Shakthi Sugars Ltd is given in APPENDIX D – Tables D1.6 to 3.04 per share. which has declined till 2002-03 has again increased in 2003-04 because of an increase in both secured and unsecured loans.07 to 0. 30 . the quick ratio is well below 0.16%.46 to 0. This reflects the poor performance of the company. However.63 over the last four years. although it suffered a reversal in the most recent fiscal year. suggesting that the unit’s efficiency in utilizing working capital has declined. Interest coverage ratio has improved from 0. Shakthi Sugars Ltd The gross profit margin ratio has drastically decreased from 73. a positive sign for lenders to this unit.03 per share to a small positive Rs.22 in 2001-02 to –63. But the trend in these ratios is due to the rise and then a decrease in the net income. Like for the other ratios the ROE and ROA have increased till 2002-03 and declined in the recent financial year.83 in 2003-04.0. The total assets have increased over the period.in raw material prices and the sales have gone up. Inventory turnover has declined from 2. -6.2 to 1. Working Capital Turnover has also deteriorated from 1.5. the company’s profitability has improved in the last four years. D2 and D3. Overall. This suggests that the unit has problems selling its inventory and that they are not moving fast. The debt equity ratio. Current ratio has improved from 2.
However. From 2000-01 to 2003-04 the operating profit has decreased by 95%. Inventory turnover has declined from 2.14. Interest coverage ratio has improved from 1. The liquidity of the company is going below accepted levels.63 over the last four years. The increase in current ratio is due to the increase in inventories and debtors.In 2003-04 a major contribution to the CGS is from excise duty and taxes. Earnings per share have shown a decline from Rs. On the whole the company’s performance has been declining over the years.18 to 0. Interests have come down by 63% in the four years.25 to 1. This suggests that the unit has problems selling its inventory and that they are not moving fast.2 to 0.5 per share. 4.76. Current ratio has decreased from 3. Thus ROE has decreased from 3.0%.09. the quick ratio has gone down continuously from 1.88% in 2003-04. The net margin ratio decreased from 4. Working Capital Turnover has also increased from 1. We can conclude that the asset utilization is very low and the company’s return on equity is not attractive. This has reduced the operating profit ratio from 18.14 and again decreased in 2003-04 suggesting that the unit’s efficiency in utilizing working capital has increased.6% to -4.4. a positive sign for lenders to this unit.77% and ROA has decreased from 2.8 to 2.86% in 2000-01 to –15. The increase in 2003-04 in the debt equity ratio is because the company has taken more secured and unsecured loans. The debt equity ratio is low compared to the industry standards. 31 .07 to 0.-13. which is dangerous.43 to 2.0 in 2001-02 and then slightly increased to 2.6 per share to a small positive Rs.9% to -13. From 2000-01 to 2003-04 the net profit has decreased by 250%.
02.3 COMMON-SIZE STATEMENTS The common-size statements are shown in analytical percentages. The operating profit has also gone down and the company has made losses. which is not advisable. In 2004 the cost of goods sold has gone up.04 in 2001-02 to 2. Hence the current ratio has come down from 3.6 in 2003-04 which is dangerously low from the point of view of creditors. Also the inventories have been increasing for the past three years. Thus the quick ratio has decreased rapidly. Common-Size Balance Sheet can be used to compare companies of differing size. But in 2004 due to a sudden increase in the cost of goods sold the ratio has gone up from 0. total liabilities and total sales. The interest coverage ratio has been decreasing due to decreasing profits for the past three years. 32 . E2 and E3. The figures are shown as percentages of the total assets.8 in the previous year to 1.The financial statements and the ratio analysis for Bannari Amman Sugars Ltd is given in APPENDIX E – Tables E1. Till 2002 the inventory turnover ratio had been decreasing. The total figures are taken to be 100. But they have acceptable values. operating profit ratio and net profit margin ratio have decreased rapidly in the last three years. Bannari Amman Sugars Ltd The gross profit ratio. decreasing the gross profit. ROE and ROA had increased in 2001-02 but has then shown a steady decline.04 in 2003-04. The debt equity ratio has increased mainly due to decrease in equity. The current liabilities have increased significantly in 2003-04. 4. It is 0.
It involves the computation of the percentage relationship that each item bears to the same item in base year. Bannari Amman Sugars has it around 60%. This analysis helps in understanding the trend of figures. The inventories of Rajshree Sugars and Chemicals Ltd are 40% of the total assets.4 TREND ANALYSIS Trend analysis is done by computing trends of series of information. The figures of the base year are taken as 100 and trend ratios for other years are calculated based on the base year. 33 . whether upward or downward. D6 and E6.3. 4. The trend analyses for Rajshree Sugars and Chemicals Ltd are given in APPENDIX C – Tables C4 and C5. which has been reduced to 40% in the previous year. of Shakthi Sugars Ltd is varying between 20-35% and for Bannari Amman Sugars it is 50% of the total assets. The depreciation amounts for Rajshree Sugars and Chemicals Ltd and Bannari Amman Sugars is between 5-10% while that of for Shakthi Sugars Ltd is higher at 13-20%.The common size balance sheet is given in APPENDIX C. 4. D and E – Tables C6. Rajshree Sugars and Chemicals Ltd Balance Sheet The secured loan has increased by 15% in 2003-04 compared to the base year.1 Common Size Analysis For Rajshree Sugars and Chemicals Ltd the debt is around 65% of liabilities and for Shakthi Sugars Ltd it is around 50%.
Inventories have increased by around 10% every year while debtors have drastically increased – by 150% in 2003-04. Shakthi Sugars Ltd Balance Sheet The share capital has decreased. The total debt that had decreased in the previous two years has risen by 6% compared to the base year in 2003-04. P&L The sales have shown only a slight increase over the years. though not continuously. Total income and total expenditure have declined compared to the base year. 97% and then 140% in the three years. The trend analyses for Shakthi Sugars Ltd are given in APPENDIX B – Tables B4 and D5. But the figures for 2003-04 are higher with respect to 2002-03. The raw materials consumed and the total expenditure have declined. Depreciation has increased by 48%. compared to the base year. The net block has decreased because of a huge depreciation. The trend analyses for Bannari Amman Sugars Ltd are given in APPENDIX E – Tables E4 and E5. P&L Sales have continuously decreased to just 46% of the base year. Bannari Amman Sugars Ltd 34 .
Due to heavy cut in interest charges the company’s performance has stabilized.a. Rajshree Sugars and Chemicals Ltd had been making losses amounting to Rs. 5. while sanctioning the term loans under project finance to Rajshree Sugars and Chemicals Ltd. IDBI. –47569342 in 2001-2002.a which was subsequently reduced due to changes in Government policies. 35 . Restructuring of liabilities is done by way of reschedulement of principal. The total debt has remained same for 2001-02 and 2002-03. IDBI has sanctioned financial restructuring. But there has been a decline in 2003-04. Thus we find that restructuring is an attractive option to revive the beleaguered sugar units.Balance Sheet The share capital has reduced to 87% of the base year due to buy back of shares.0 FINDINGS In view of the difficulties faced by certain industries IDBI has been extending relief to select corporates. At the request of the company. had charged an interest of 21% p. 5259252 and Rs. reduction in interest rates/ stepping-up of interest payments in line with the revised cash-flow projections. P&L Sales for 2002-03 and 2003-04 are down compared to the base year. –127118211 in the year 2000-2001 and Rs. allowing a reduction in the interest rate on the term loans/debentures to 14%p. It has made a profit of Rs. during February 2001. 871824 in the years 2002-03 and 2003-04 respectively. Material costs have gone up except in 2002-03.
mills must examine ways and means to improve operational efficiency. Loans from the Sugar Development Fund (SDF) at concessional rates of interest are available now for the revival of potentially viable sick sugar mills. Food & Public Distribution. The technology upgradation of the sugar industry is therefore every 7. operational efficiency and better management of resources. Also.0 SUGGESTIONS AND RECOMMENDATIONS Restructuring of loans will bring some relief to the beleaguered industry. Sugar producers should also diversify and set up co-generation power units from bagasse. as per information provided by NABARD. important to ensure its global competence.6. In regard to the cooperative sugar mills which are not within the purview of BIFR. All attempts to minimize costs have to be technology driven. 2004. there were 45 sick sugar companies in the public/private sectors. and distilleries for producing anhydrous ethanol from molasses. 1982 to provide for loans from the SDF at concessional rate of interest to sugar factories for undertaking baggase based cogeneration of 36 . to recommend revival packages for potentially viable sick cooperative sugar mills. The industry must seek to become globally competitive. In order to remain profitable. the Central Government has amended the Sugar Development Fund Act.0 REVIVAL OF SICK SUGAR MILLS As on April 01. the Government has constituted a Committee under the Chairmanship of Joint Secretary. The number of cooperative sugar units with negative net worth as on 31/3/2003 was 130. economies of scale.
Under efficient management sugarcane is one of the most viable crops to grow economically compared to other crops hence with the findings it can be concluded that with a focus on achieving low costs of production and high levels of efficiency that will firstly mutually benefit the two primary stakeholders: growers and millers.power projects and for production of anhydrous alcohol/ethanol from alcohol/molasses. with too many restrictions on input and output prices as well as on the distribution of the commodity. The restrictions over the distribution of the commodity have gone. However the scenario is changing. In India with a large section of the agriculture-dependent population involved in the farming of sugar-cane (which constitutes 60-70% of the cost of sugar). The performances of the three sugar units were studied. for the first time India will see a sugar supply crunch since the 1980s. So it has become inevitable for the companies to adopt measures to arrest the losses at the earliest. the domestic sugar industry has traditionally attracted political protectionism. It is found that the problem prevalent in the sugar industry has affected the performance of the companies to a great extent. ie alcohol (potable as well as industrial) and bagasse are driving the growth in the bottom line of sugar companies.0 CONCLUSION Sugar has always been the most political of all commodities. 8. Most importantly. 37 . The by-products of sugar. With diminishing closing stock India has started to import sugar after a long time. and secondly influence economic growth and job creation at national level.
APPENDIX A TABLE A1 TREND IN SANCTIONS 38 .
TABLE A2 TRENDS IN DISBURSEMENTS
Year Ending March 31 DIRECT FINANCE (Rs crore) Rupee Loans Foreign Currency Loans Underwriting and direct subscription to shares, bonds and debentures of industrial concerns Equipment Leasing Guarantees for loans and deferred payments TOTAL DIRECT FINANCE INDIRECT FINANCE Refinance of Industrial Loans Bills Finance Loans to and Investments in shares and bonds of financial institutions Others TOTAL INDIRECT FINANCE 0 87 53 113 253 187 123 291 226 827 363 286 246 529 1424 242 723 968 34 1967 1377 1123 105 0 2605 31 2636 9722 2029 512 12 12275 403 12678 17121 2564 457 250 20392 1362 21754 15604 3442 512 299 19857 236 20093 2004 2003 2002 2001
(Rs crores)Rs crores) (Rs crores) (Rs crores)
DISBURSEMENTS Year Ending March 31 2004 2003 2003 2001 (Rs.crores ) ( Rs.crores) ( Rs.crores) ( Rs.crores) 2011 1542 140 0 3693 0 3693 5812 1610 2892 12 10326 0 10326 11182 1341 3391 255 16169 0 16169 10719 2614 1745 370 15448 0 15448
DIRECT FINANCE Rupee Loans Foreign Currency Loans Underwriting and direct subscription to shares, bonds and debentures of industrial concerns Equipment Leasing Guarantees for loans and deferred payments TOTAL DIRECT FINANCE INDIRECT FINANCE Refinance of Industrial Loans Bills Finance Loans to and Investments in shares and bonds of financial institutions Others TOTAL INDIRECT FINANCE TOTAL DISBURSEMENTS
0 60.8 53.8 117.1 231.7 3924.7
158.8 84.9 313 267.9 824.6 11150.6
332 202 287 484 1305 17474
229.5 527.9 823.5 34 1614.9 17062.9
GRAPH A1 TRENDS IN SANCTIONS AND DISBURSEMENTS MARCH 2001 – MARCH 2004
Trend in Sanctions and Disbursement March 2001 - March 2004
25000 20000 Rs. crore 15000 10000 5000 0 2003 2002 2001 2000 YEAR
SANCTIONS DISBURSEMENT S
INDUSTRY WISE BREAK-UP OF OUTSTANDING LOAN AMOUNT BY IDBI O/S AMOUNT AS % OUTSTANDING OF TOTAL AMOUNT (Rs.034752 4.185326 3.28 1250.54 1069.63 2045.9 6257.76 12003.21 912.867544 2.189525 2.69 1704.559723 24.214595 2.489015 1.56655 INDUSTRY Iron and Steel Electricity Generation Cotton Textiles Telecom Services Petrochemicals Fertilizers Cement Artificial Fibres Chemical (Others) Food (Others) Basic Industrial Chemicals Services (Others) Electronics Drugs & Pharmaceuticals Paper & Paper Products Other Industries( incl sugar industry) GRAPH B1 GRAPH OF OUTSTANDING AMOUNT AS % OF TOTAL OUTSTANDING 42 .12 1174.43 1082.66 2132.403327 2.08 1895.34 1216.488174 2.87 1080. crore) OUTSTANDING 9104.71 1517.106004 3.80701 9.98 18.63349 12.21083 2.9 4414.879635 3.3645 4.
Crores) 298500000 2001-02 (Rs.Crores) 298500000 2002-03 (Rs.Crores) 210500000 43 .BALANCE SHEET SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital 2003-04 (Rs.OUTSTANDING AMOUNT AS % OF TOTAL OUTSTANDING Other Industries 26% Paper & Paper Products 3% Drugs & Pharmaceuticals 2% Electronics 2% Services (Others) 2% Basic Industrial Chemicals 2% Food (Others) 2% Chemical (Others) 2% Artificial Fibres Cement 3% Fertilizers 3% 4% Iron and Steel Electricity Generation Cotton Textiles Telecom Services Petrochemicals Fertilizers Cement Artificial Fibres Electricity Generation 13% Chemical (Others) Food (Others) Basic Industrial Chemicals Services (Others) Electronics Cotton T extiles Drugs & Pharmaceuticals 9% Paper & Paper Products T elecom Services Other Industries 4% Petrochemicals 4% Iron and Steel 19% APPENDIX C RAJSHREE SUGARS AND CHEMICALS LTD TABLE C1 .Crores) 275500000 2000-01 (Rs.
crores) 498658387 19465366 103056474 621180227 363545644 17447771 1167884 20312691 18961298 31141163 19081185 4101598 2001 (Rs. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilitites and provisions Net current assets ( Working Capital) Miscellaneous Expenditure(not written off) P&L Account TOTAL(Capital deployed) 1977657 300477657 1062765745 21000700 1083766445 1384244102 0 1384244102 1977657 300477657 984918358 0 984918358 1285396015 0 1285396015 1977657 277477657 1002490870 7837500 1010328370 1287806027 0 1287806027 1977657 212477657 923651092 0 923651092 1136128749 0 1136128749 729765860 174320671 555445189 0 555445189 89571179 0 723639625 142942770 580696855 0 580696855 0 0 715055470 107428701 607626769 21846 607648615 0 0 706840651 72492031 634348620 225413 634574033 0 0 700720682 19831487 2750689 46466726 769769584 211711419 558058165 69753240 111416329 1384244102 654637854 16478828 1323650 36131129 708571461 284880131 423691330 79148500 201859331 1285396016 606008259 9671753 856292 26764953 643301257 253400026 389901231 83137598 207118583 1287806027 492954327 7883272 1100288 24922959 526860846 201447798 325413048 16592437 159549229 1136128747 TABLE C2 .crores) 520670838 35541909 37661763 593874510 343556435 13444933 1098090 21076388 16962214 0 21110977 4114098 2002 (Rs.Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Total fixed assets DEFERRED TAX ASSET INVESTMENTS CURRENT ASSETS.crores) 534189496 43205939 51520364 628915799 367906172 25830669 1588320 20353248 13107236 0 22987088 9395260 2003 (Rs.crores) 475853118 1356960 112369847 589579925 374524193 19982417 2927841 22588834 25973854 56722810 18241425 2241489 Sales inclusive of Excise Duty Other Income Inventory Change TOTAL INCOME Raw Material Consumed Process & Packaging Materials Consumed Power & Fuel Employees cost Repairs and Maintenance Excise duty Other Expenses Expenses Written Off 44 .P&L ACCOUNT 2004 (Rs.
8868 26.4623 19.4342 13.1632 0.3261 2002-03 2.2289 0.RATIOS ANALYSIS 2003-04 LIQUIDITY RATIOS: Current Ratio=Current Assets/Current Liabilities Acid test ratio=Quick assets/Current Liabilities LEVERAGE RATIOS: Debt-Equity ratio=Long term debt/Equity Interest Coverage ratio=Profit before interest and taxes/Interest TURNOVER RATIOS: Inventory turnover ratio=Cost of goods sold/Average inventory Total assets turnover=Net sales/Average total assets Working capital turnover ratio=Net sales/Working capital PROFITABILITY RATIOS: Gross Profit Margin ratio=Gross profit/Net sales Operating profit margin ratio=Operating profit/Net sales Net Profit margin ratio=Net profit/Net sales Return on total assets=Net income/Average total assets Return on equity=Equity earning/Average net worth 3.6287 0.5387 0.4873 0.3471 0.4774 -7.2618 23.6359 0.6639 -26.0064 3.3142 0.2589 -9.1893 2001-02 2.3779 23.0399 3.4031 0.9449 -64.2778 1.4097 1.0741 0.1683 3.2789 2.8027 -24.8806 0.3986 1.0101 0.8942 45 .6411 0.3762 2.6154 0.TOTAL EXPENDITURE Profit/Loss before interest and depreciation Interest and financing charges Depreciation Profit before tax Add: Income Tax Paid Profit after tax Deferred Tax Asset Loss b/f from the previous year Balance carried forward 461167993 167747806 135482601 31393381 871824 0 871824 89571179 -201859331 -111416328 421363135 172511375 131738055 35514068 5259252 0 5259252 0 -207118583 -201859331 475759234 145420993 158048876 34936670 -47564553 -4789 -47569342 0 -159549230 -207118572 523202863 66377062 158916109 34457408 -126996455 -121756 -127118211 0 -32431019 -159549230 TABLE C3 .6068 1.1472 2000-01 2.9654 25.6364 0.0658 0.5385 -3.3063 1.4038 1.9572 0.6882 -10.2009 0.6991 4.4079 2.
1382 130.0389 0.5915 108.2252 -2.3842 113.0399 -0.TREND ANALYSIS .BALANCE SHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Total fixed assets DEFERRED TAX ASSET INVESTMENTS CURRENT ASSETS.4161 115.9047 78. LOANS AND ADVANCES Current Assets 2002-03 2001-02 2000-01 141.8387 141.3009 -0.0064 0.6332 113.1382 NA 113.691544 95.8387 NA 121.VALUATION RATIOS: Earnings per share=Profit after tax and preference dividend/No of equity shares COVERAGE RATIOS Financial charges coverage ratio COMPONENT RATIOS Material cost component(% earnings) 0.8789 100 130.78751 9.7991 68.2433 240.3504 100 100 100 100 100 100 100 100 100 103.335 121.3504 NA 113.8052 100 141.50971 NA NA 101.75693 NA NA 100 100 100 100 100 100 100 46 .0373 0.3766 197.8052 100 141.0614 NA 117.8718 65.4161 106.6332 NA 106.5304 NA NA 102.1622 148.5357 NA 109.1938 95.2598 -6.9834 72.4687 87.54223 0 91.7058 TABLE C4 .1841 91.5615 0 87.
483 91.933276 37.45345 3.5185 113.TREND ANALYSIS .1526 88.82435 107.84892 106.13729 NA 491.92359 73.4893 141.2011 477.68584 NA 638.23295 129.3908 122.8148 2001-02 104.5642 249.4923 420.46319 0 126.Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilities and provisions Net current assets (Working Capital) Miscellaneous Expenditure (not written off) P&L Account TOTAL (Capital deployed) 142.14325 252.7284 91.53533 259.3504 100 100 100 100 100 100 100 100 100 100 25 TABLE C5 .7195 85.00148 54.9006 104.4184 2619.4267 69.45428 101.6036 182.9972 186.0832 99.7894 119.8961 82.06867 87.73144 67.7925 1434.14126 0 -4.50511 93.3918 69.83194 NA NA 112.687 77.5159 100.1008 125.25416 91.71186 105.5431 80.68649 0 -0.5185 NA 2002-03 109.1382 122.31562 39.8148 113.1472 251.30445 65.1049 105.2593 3184.4414 146.9713 134.30496 0 115.0572 129.0949 171.88891 89.0155 126.4164 130.025 45.10314 50.7989 209.24885 90.8387 132.83194 121.3598 97.23 33.0354 120.0159 419.P&L 2003-04 Sales inclusive of Excise Duty Other Income Inventory Change TOTAL INCOME Raw Material Consumed Process & Packaging Materials Consumed Power & Fuel Employees cost Repairs and Maintenance Excise duty Other Expenses Expenses Written Off TOTAL EXPENDITURE Profit/Loss before interest and depreciation Interest and financing charges Depreciation Profit before tax Add: Income Tax Paid Profit after tax Deferred Tax Asset Loss b/f from the previous year Balance carried forward Surplus carried to balance sheet NA 622.93208 219.6435 126.6718 98.10778 -0.3909 37.267 54.28382 37.9649 129.8173 501.42134 2000-01 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 47 .89786 103.9854 90.0666 -4.731 183.3003 144.934 122.
08226 1.14204 16.06066 100 45.265496 100 19.COMMON-SIZE .125943 0.87561 0.32039 0.6123857 0 46.42541 0. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Loans and advances 2002-03 2001-02 2000-01 18.419655 47.1239168 18.906028 1.725952 10.1723537 2.703529 0.31587 67.88527 69.016852 47.827446 66.591188 1.05556 1.300941 45.08359 9.84487 5.05407 84.084294 2.8033 5.9115301 48.39584 6.8033 0 34.44167 100 100 15.72262 65.42683 0 0 52.50853 62.049422 0.74012 36.04587 0 0.38921 48 .13534 18.73742 0.627544 0.98056 0 0 46.68935 1.001417 39.863292 39.05407 0 69.TABLE C6 .970431 39.55833 0 0 18.42522 0.85429 0.147854 15.0094 17.124 39.922652 34.72262 65.242609 0.5544 81.128319 19.736624 41.93934 0 15.907058 86.58937 0.00393 62.103034 36.BALANCE SHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY Current Liabilitites and provisions TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Total fixed assets DEFERRED TAX ASSET INVESTMENTS CURRENT ASSETS.232521 41.44207 0 0 43.85796 83.98056 0 36.734504 0 13.
43873 100 100 1.85502 13.92823 100 APPENDIX D SHAKTHI SUGARS LTD TABLE D1 .Miscellaneous Expenditure(not written off) P&L Account TOTAL(Capital deployed) 4.BALANCE SHEET SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Capital expenditure on project Total fixed assets INVESTMENTS CURRENT ASSETS.394321 12.040419 5.9811676 100 5.3706256 6.240485 11. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilitites and provisions Net current assets ( Working Capital) Deferred Tax asset 2003-04 (Rs crores) 300853570 765910162 1066763732 1914363298 62348435 1976711733 3043475465 0 3043475465 2002-03 (Rs crores) 300853570 886239860 1187093430 1702495999 40824000 1743319999 2930413429 0 2930413429 2001-02 (Rs crores) 350853570 911898685 1262752255 1627312571 36258000 1663570571 2926322826 0 2926322826 2000-01 (Rs crores) 397520240 894733127 1292253367 1784933469 69297000 1854230469 3146483836 0 3146483836 2241466582 726289131 1515177451 284600 7189411 1522651462 757966908 1294213101 559590547 734622554 288968 737791839 1472703361 763664920 1831978441 576685573 1255292868 284600 13159050 1268736518 764103020 1814272674 487197380 1327075294 15872648 7189411 1350137353 404283320 1049503976 107956358 6764615 150376473 1314601422 627813002 686788420 62018525 688136860 80467934 5477515 312713948 1086796257 541686436 545109821 58110257 842309040 175753283 54181159 403111367 1475354849 604256353 871098496 0 1284770524 54217809 7850361 526847569 1873686263 494975799 1378710464 0 49 .
Crore) 1583522819 1973291732 260249797 385286222 -437712329 515766505 1406060287 533929051 1895134 477235280 1748579 239154032 97140558 310846 1351413480 54646807 0 0 0 81137 54565670 368931 931297 54003304 138484532 0 2874344459 1163858284 2917300 956561780 2814433 466916022 182500764 2690795 2778259378 96085081 0 0 0 50596 96034485 0 1164125 94870360 104604797 0 0 0 0 0 24666666 0 0 33428082 3409664 10000000 45937500 5053125 50 . Shares Tax on distributed pft 2004 (Rs.Miscellaneous Expenditure(not written off) TOTAL(Capital deployed) 14050150 3043475465 90825070 2930413429 22384792 2926322826 13352699 3146483836 TABLE D2 . Crore) 1168024194 60179003 -155323194 1072880003 577225284 1506908 343021373 1099101 141852929 63769600 2913972 1131389167 -58509164 0 0 -1671785 50000 -56887379 0 543252 -57430631 155650090 10000000 2002 2001 (Rs.P&L ACCOUNT Sales Other income Inc/Dec in stock TOTAL INCOME Material cost Purchase of fertilisers and insecticides Manufacturing and other expenses Research. Crore) (Rs. farma nd devt expenditure Interest and finance charges Depreciation Extra-Ordinary expenditure TOTAL EXPENDITURE Profit/Loss before tax LESS:Prvn of tax LESS:Current tax LESS: Deferred tax LESS:Wealth tax Pft/Loss after tax ADD: Prvn for tax for earlier yrs written back LESS:Share issue expenses written off TOTAL net pft for the yr ADD: surplus from previous year Debenture Redemption reserve written back Proposed dividend on Preference Shares written back Transfer from General Reserve TOTAL PFT AVAILA BLE FOR APPROPRIATION APPROPRIATIONS: Debenture redemption reserve Proposed dividend on pref. Crore) 912514837 98824583 360289079 1371628499 789476738 3025025 461106826 1672819 171591732 91221196 1477004 1519571340 -147942841 931791 0 -3908268 30000 -144996364 0 0 -144996364 83552793 0 24666666 -36776905 -73553810 108219459 192487836 199475157 2003 (Rs.
4349 1.8667 2.1497 18.7208 1.0063 0.4458 1.8358 1.1378 1.3287 0.4189 33.9659 4.8704 -1.7360 2001-02 2.0330 -13.2058 1.3987 1.4392 73.8726 2.2285 1.4429 -4.7178 58.Surplus carried to b/s -73553810 83552793 155650090 138484532 TABLE D3 .0939 0.4855 -7.RATIO ANALYSIS 2003-04 LIQUIDITY RATIOS: Current Ratio=Current Assets/Current Liabilities Acid test ratio=Quick assets/Current Liabilities LEVERAGE RATIOS: Debt-Equity ratio=Long term debt/Equity Interest Coverage ratio=Profit before interest and taxes/Interest TURNOVER RATIOS: Inventory turnover ratio=Cost of goods sold/Average inventory Working capital turnover ratio=Net sales/Working capital PROFITABILITY RATIOS: Gross Profit Margin ratio=Gross profit/Net sales Operating profit margin ratio=Operating profit/Net sales Net Profit margin ratio=Net profit/Net sales Return on total assets=Net income/Average total assets Return on equity=Equity earning/Average net worth VALUATION RATIOS: Earnings per share=Profit after tax and preference dividend/No of equity shares COMPONENT RATIOS Material cost component (% earnings) 2.9805 51 .0476 2000-01 3.7584 -15.5875 1.7118 -7.5166 49.5850 1.8530 0.2546 4.9172 -13.4223 2002-03 2.2532 3.8309 7.1427 0.7736 42.8898 -4.1898 1.7041 -23.8915 1.3174 1.4686 0.4416 1.5554 1.4313 -63.6593 86.2200 8.8178 1.6470 3.7854 1.
7262 75.1695 28.7930 1.3351 149.8935 100.0030 NA 93.6021 82.7775 109.4370 39.5611 148.7408 122.BALANCE SHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Capital expenditure on project Total fixed assets INVESTMENTS CURRENT ASSETS.8591 114.9759 118.6425 93.5507 107.1741 76.5463 71.TREND ANALYSIS .0031 109.2233 96.1330 88.4841 188.6826 99.3565 1.2001 93.1330 NA 93.TABLE D4 .0780 187.0030 100 100 100 100 100 100 100 100 100 123. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Loans and advances Less: Current Liabilitites and provisions Net current assets ( Working Capital) Deferred Tax asset Miscellaneous Expenditure(not written off) TOTAL(Capital deployed) 2002-03 2001-02 2000-01 75.8205 100.2606 101.3557 58.1615 690.0780 63.1694 52.9185 97.1330 65.8371 49.6826 85.3226 89.3680 94.7930 183.8623 95.5610 324.0185 93.1160 86.0507 91.9728 106.9709 189.4161 69.7171 91.0019 100 100 100 100 100 100 100 81.2014 112.1742 55.0030 100 100 100 100 100 100 100 100 100 100 TABLE D5 .1612 126.0338 93.5377 NA 680.1821 NA 167.6055 96.3815 58.5909 1.5139 78.7176 93.7741 59.0749 114.7262 53.7262 NA 96.5427 70.9116 94.6880 199.P&L 2003-04 2002-03 2001-02 2000-01 52 .2512 89.TREND ANALYSIS .8138 NA 105.0000 10262.
8737 59.8598 39.9707 NA NA NA 59.6497 69.9233 132.1917 15.0000 53.8734 NA NA NA 160.7197 67.9836 NA 0.8907 62.5958 51.3953 100 100 100 100 53 .5359 148. farma nd devt expenditure Interest and finance charges Depreciation Extra-Ordinary expenditure TOTAL EXPENDITURE Profit/Loss before tax LESS:Prvn of tax LESS:Current tax LESS: Deferred tax LESS:Wealth tax Pft/Loss after tax ADD: Prvn for tax for earlier yrs written back LESS:Share issue expenses written off TOTAL net pft for the yr ADD: surplus from previous year Debenture Redemption reserve written back Proposed dividend on Preference Shares written back Transfer from General Reserve TOTAL PFT AVAILA BLE FOR APPROPRIATION APPROPRIATIONS: Debenture redemption reserve Proposed dividend on pref.2521 80.2046 59.8910 54.5522 48.6425 56.0000 0.9176 45.0523 30.1290 51.9619 49.2932 -150.6926 48.2275 11.0000 60.3808 34.Sales Other income Inc/Dec in stock TOTAL INCOME Material cost Purchase of fertilisers and insecticides Manufacturing and other expenses Research.5471 -84.6193 -30.7500 49.8747 NA NA NA -36.1150 37.8188 NA 79.9840 54.3625 56.4971 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 0.8551 47.8664 48.7982 NA NA NA 54.2199 53.9421 108.8758 64.2433 25.9997 56.3337 0. Shares Tax on distributed pft Surplus carried to b/s 46.6961 0.2941 40.0000 0.8220 -59.0000 72.2364 NA 46.8327 103.7229 -60.8931 NA NA NA 98.2478 67.4372 36.1134 0.6542 35.6951 -153.7686 67.6661 -60.8363 79.3261 49.4763 112.3883 NA NA NA 96.0000 -53.0000 -152.
02697 47.488903 0.006479 31.1947679 20.BALANCE SHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY Current Liabilities and provisions TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Capital expenditure on project Total fixed assets INVESTMENTS CURRENT ASSETS.41535 21.11678 21.76615 46.008323 21.82268 13.144181 1.197432 37.47458 20.11891 82.586802 2.008061 0.TABLE D6 .41771 41.52461 34.0960135 35.48724 49.45426 0 0.6982712 53.271 0.615854 100 23.4435 0.28175 1.673634 2.09194 1.37918 36.05693 52.39888 0 15.33402 35.053949 19.97803 1.7879 0 0.01698 1.20939 84. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Loans and advances Deferred Tax asset Miscellaneous Expenditure(not written off) TOTAL(Capital deployed) 2002-03 2001-02 2000-01 8.1842572 4.689285 0.634026 100 35.007752 0.215583 14.64243 49.88889 16.937564 25.30084 1.3827035 100 19.782949 41.07682 11.91651 24.100618 100 8.157758 9.93565 21.46803 51.807631 1.534625 11.175773 50.899382 0 17.57073 35.81904 2.10223 28.85753 4.15788 0.82859 35.903001 50.664888 25.1895 49.645801 37.60112 100 9.317558 0.27465 16.842452 82.88506 0 17.195828 41.9405578 0.COMMON-SIZE .372716 35.59279 100 61.366685 100 54 .435887 0.24915 42.40721 0 13.99432 51.03361 1.862162 29.11494 100 10.91998 86.55487 0.
APPENDIX E BANNARI AMMAN SUGARS LTD TABLE E1 .P&L ACCOUNT 2004 (In crores) 1625408635 2003 (In crores) 1329033413 2002 (In crores) 2204239579 2001 (In crores) 1866025044 Sales 55 .BALANCE SHEET SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Total fixed assets INVESTMENTS CURRENT ASSETS. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Other Current Assets Loans and advances Less: Current Liabilities and provisions Net current assets ( Working Capital) Deferred Tax asset TOTAL(Capital deployed) 2003-04 (In crores) 113385050 496280973 609666023 1039720204 187570830 1227291034 1836957057 242799798 2079756855 2002-03 (In crores) 113385050 538493501 651878551 1118228820 191029580 1309258400 1961136951 234667839 2195804790 2001-02 (In crores) 113385050 677283826 790668876 1070011427 227856330 1297867757 2088536633 0 2088536633 2000-01 (In crores) 128930160 610568115 739498275 1096594244 197400830 1293995074 2033493349 0 2033493349 1266284128 311459113 954825015 59288422 1014113437 11432776 1224809282 256759370 968049912 13439199 981489111 11432776 1073907076 200167752 873739324 85197609 958936933 11432776 1293995074 147752864 1146242210 25651993 1171894203 11432776 1538260271 73185488 53091438 1298174 204018611 1869853982 914432890 955421092 98789550 2079756855 1438565711 48026504 41091432 2467261 207141557 1737292465 643943637 1093348828 75107132 2161377847 1362400236 64565339 28213254 1972164 207141557 1664292550 546125626 1118166924 0 2088536633 1466308018 70807258 41281015 3038828 203237660 1784672779 660568372 1124104407 0 2307431386 TABLE E2 .
044824 0. Selling.701723 0.047454 0.552789 2000-01 2. Administrative and other expenses Excise Duty and Taxes Interest Depreciation TOTAL EXPENDITURE Profit/Loss before tax LESS:Prvn of tax Current tax Deferred tax ADD:Reversal of Deferred Tax Pft/Loss after tax Balance brought forward from previous year 38908759 104741590 1769058984 1037442988 139030265 239620032 199427266 150180052 61121368 1826821971 -57762987 93190909 72551349 1494775671 755205124 145464594 201691893 138119829 143090270 57587316 1441159026 53616645 16238269 -95461989 2125015859 1052671113 205851214 262899174 231578628 152069513 53130148 1958199790 166816069 30000000 27921254 42166810 1936113108 845924271 211439715 277454142 319920563 120143593 42873471 1817755755 118357353 20000000 0 0 15550459 -42212528 208379987 166167459 4500000 15097710 0 34018935 207170312 241189247 0 136816069 135999711 272815780 0 98357353 86966057 185323410 APPROPRIATIONS: Transfer to Capital Redemption ReserveShares Buy Back Proposed dividend Transfer to General Reserve Tax on distributed profits Surplus carried to b/s 0 0 0 0 166167459 0 28346263 4462997 0 208379987 15545110 28346263 18862775 2891320 207170312 0 32232540 10000000 7091159 135999711 TABLE E3 .Other income Inc/Dec in stock TOTAL INCOME Material cost Payment and Benefits to Employees Manufacturing.697895 0.RATIO ANALYSIS 2003-04 LIQUIDITY RATIOS: Current Ratio=Current Assets/Current Liabilities Acid test ratio=Quick assets/Current Liabilities LEVERAGE RATIOS: 2.463902 2001-02 3.362622 2002-03 2.481956 56 .
9430 81.457917 -9.641481 2.098095 23.224944 37.582517 0.332954 TABLE E4 .749828 1.566500 5.9268 106.192926 21.4432 87.797946 1.500302 9.013055 0.096972 1.9430 88.2818 82.985132 1.052360 -0.701248 0.971297 0.756656 45.246017 8.121841 0.082173 7.008439 1.9430 110.Debt-Equity ratio=Long term debt/Equity Interest Coverage ratio=Profit before interest and taxes/Interest TURNOVER RATIOS: Inventory turnover ratio=Cost of goods sold/Average inventory Working capital turnover ratio=Net sales/Working capital PROFITABILITY RATIOS: Gross Profit Margin ratio=Gross profit/Net sales Operating profit margin ratio=Operating profit/Net sales Net Profit margin ratio=Net profit/Net sales Return on total assets=Net income/Average total assets Return on equity=Equity earning/Average net worth VALUATION RATIOS: Earnings per share=Profit after tax and preference dividend/No of equity shares COMPONENT RATIOS Material cost component (% earnings) 2.970805 1.1955 88.313927 16.374705 1.128731 63.025622 1.215562 0.9196 100 100 100 100 57 .708146 16.BALANCE SHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS 2002-03 2001-02 2000-01 87.826595 56.474529 15.823637 47.052710 3.062070 5.TREND ANALYSIS .140599 0.025970 -1.025597 1.1515 87.601484 13.722936 0.915567 12.972248 1.660010 6.005088 -3.615375 2.
3982 2002-03 71.4418 NA 107.5731 100 100 100 100 100 100 87.2993 102.7724 101.3569 94.9916 135.1574 -226.8279 100.3587 128.6402 65.4312 84.1286 81.P&L 2003-04 Sales Other income Inc/Dec in stock TOTAL INCOME 91.8271 99.5363 100.7762 84.0580 2001-02 118.TREND ANALYSIS .2227 333. Administrative and other expenses Excise Duty and Taxes Interest Depreciation 122.6938 43.3905 83.3843 104.3005 231.0000 100 100 100 100 100 100 104.Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block Capital work-in-progress Total fixed assets INVESTMENTS CURRENT ASSETS.7972 72.6533 173.6751 99.3913 2000-01 100 100 100 58 .9940 NA 90.6703 92.4542 52.4718 NA 90.7068 100 100 100 100 100 100 97.9209 93.1330 98.1260 86.7973 83.4283 100.0000 82.1846 68.5135 100 100 100 100 100 100 100 100 100 100 TABLE E5 .8451 90.6098 42.0203 94.4833 97.8585 210.7196 100.0000 94.7524 100.9070 103.1054 139.3444 64.3365 125.7568 124.0994 109.8988 101.3452 97.7541 86.3717 Material cost Payment and Benefits to Employees Manufacturing.1796 96.9819 97.1912 101.3518 248.5408 81.2264 332.2757 68.3638 62. Selling.1249 58.7541 72.2640 NA 93.3863 126.9209 97.2751 101.7729 138.4747 76.4403 97.9729 96. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Other Current Assets Loans and advances Less: Current Liabilitites and provisions Net current assets ( Working Capital) Deferred Tax asset TOTAL(Capital deployed) 94.0005 77.3350 NA 102.8136 95.5759 115.2050 89.2548 82.9136 91.7068 NA 102.7633 172.1080 67.1732 119.
10903178 30.992785 16.14245 79.9890868 61.1010 156.66021 40.0000 100 100 100 100 100 100 100 100 100 100 139.3006 0.9231 107.63409 75.68745 34.9430 188.3616362 29.78683583 3.2913788 43.350723 8.0000 NA NA NA NA NA NA -42.76071 43.0000 153.48058 0 24.0000 0.30359 32.1451 123.707474 63.02558 36.9430 44.92569 8.06024 8.724593 6.5871 238.0000 NA NA NA 34.BALANCESHEET 2003-04 SOURCES OF FUNDS: SHAREHOLDERS' FUNDS Share capital Reserves and surplus Net worth LOAN FUNDS Secured Loan Unsecured Loan Total debt Capital employed DEFERRED TAX LIABILITY TOTAL APPLICATION OF FUNDS: FIXED ASSETS Cost Less: Depreciation Net block 2002-03 2001-02 2000-01 3.23259 10.26449377 40.6107 89.27151 0 20.6300 0.142.263684 22.3825 147.COMMON-SIZE .785717 30.2823 45.9427 150.62545 69.3314 100 100 100 100 100 TABLE E6 .67608 100 4.9175 239.92662 9.0000 0.3192 79.51942 100 42.2209 NA 87.6278 40.7736 152.59822 59 .5402452 100 50.0000 122.1822 NA 87.2197 130.2106 APPROPRIATIONS: Transfer to Capital Redemption Reserve-Shares Buy Back Proposed dividend Transfer to General Reserve Tax on distributed profits Surplus carried to b/s NA 0.5748004 24.5622 TOTAL EXPENDITURE 100.42863 37.7262 140.52374 20.36591 53.4988 Profit/Loss before tax -48.699752 59.90986 62.72849 100 4.6635 134.8039 LESS:Prvn of tax Current tax Deferred tax ADD:Reversal of Deferred Tax Pft/Loss after tax Balance brought forward from previous year 0.85755 51.
8693778 34.indiainfoline.407539 7.074855 7.com 60 .48431 0.087949 7.98011573 0.98669 0.4494151 3.04335644 6.070849 0. www.27989 1.securities. Gupta.433937 4.978197 38.40391 2.479061 33.92846 2.com www.K.450612 1.383879 61.71062 2.29937507 100 51.597473 33.50763 1.864286 39. Sharma and Shahi K.77314875 0.847631 60.464767 0.16324 3.23372 36.04 IDBI Offer Document Management Accounting – Principles and Practice.8892621 34.39696 0.677309 100 51. LOANS AND ADVANCES Current Assets Inventories Sundry debtors Cash and bank balances Other Current Assets Loans and advances Less: Current Liabilitites and provisions Net current assets ( Working Capital) Deferred Tax asset TOTAL(Capital deployed) 10.711979 1.81381704 62.152583 31.idbi.1691 0 100 49.39087 0.3748427 2.102386 6.Capital work-in-progress Total fixed assets INVESTMENTS CURRENT ASSETS.62002 0.385201 51.4021168 9.13049 0 100 BIBLIOGRAPHY IDBI Annual Report 2001 .38183205 0.com www.44425017 1.862167 63. R.385689 1.