TABLE OF CONTENTS

Chapter No. CHAPTER ABSTRACT I.1 I I.2 I.3 I.4 II Introduction Industry Profile Company Profile Product Profile REVIEW OF LITERATURE PROJECT PROFILE II.1 II.2 III II.3 II.4 IV V.1 V V.2 V.3 V.4 Research Methodology Scope of Receivable Management Objectives Limitation DATA ANALYSIS & INTERPRETATION Findings Suggestions Conclusion Bibliography Appendix 45 46 48 84 85 86 87 88 44 44 1 5 9 23 29 Page No.

LIST OF TABLES

Table No. IV-1 IV-2 IV-3 IV-4 IV-5 IV-6

PARTICULARS

Page No.

Inventory Turnover Ratio Work in Progress Stock Holding Rays Percentage of Work in Progress Percentage of Inventory in Current Asset Percentage of Inventory in Total Asset

49 51 53 55 57 59

IV-7 IV-8 IV-9 IV-10 IV-11 IV-12

Percentage of Inventory in Networking Capital Current Ratio Trend in Sales Trend in Inventory Comparative Balance Sheet Stock Position

61 63 65 68 70 78

LIST OF CHARTS

Table No. IV-1 IV-2 IV-3 IV-4 IV-5

PARTICULARS Inventory Turnover Ratio Work in Progress Stock Holding Rays Percentage of Work in Progress Percentage of Inventory in Current Asset

Page No. 50 52 54 56 58

IV-6 IV-7

Percentage of Inventory in Total Asset Percentage of Inventory in Networking Capital

60 62

IV-8 IV-9 IV-10 IV-11

Current Ratio Trend in Sales Trend in Inventory Stock Position

64 67 69 83

ABSTRACT The project work entitled A Study an Inventory Management with special reference to Dharani sugars and Chemicals Limited. The Inventory Management analysis helps to measure the financial soundness of the company. Inventory control is one of the key elements of overhead management which is a major factor in the next profit of any business just in time ordering and inventory control helps a practice to create an effective stepby-step system and the top performing companies world wide have adopted it, as it is one of the best methods. This study helps the management to make the best us of its inventory analytical type of research design has been adopted for this study. Data collection is done through secondary data Tools like inventory turnover ratio has been used for analyzing the data, The study consists of the inventory management analysis of the lost 5 years to know about the financial soundness of the company. The inventory management is a powerful tool of the financial management.

CHAPTER - I 1.1. INTRODUCTION OF INVENTORY MANAGEMENT Inventory management involves the control of assets being produced / procured to be sold in the normal course of the firms operations. The general categories of inventory include raw materials inventory, work-inprocess inventory, and finished goods inventory. The three categories of inventory taken together constitute the biggest component of current assets. The management of inventory assumes significance in the light of the magnitude of funds blocked in them. A comfortable cushion of inventory enables the firm to absorb both supply and demand shocks. 1-lowever, possessing a high level of inventory for long periods of time is likely to affect the bottom-line adversely due to increased inventory storage, obsolescence. and spoilage costs. Conversely, an inventory level that is too low is not good either, because the business runs the risk of losing out on potential sales and potential market share as well. Thus the thrust of inventory management is to arrive at the optimal level on inventory. MEANING OF INVENTORY Inventory represents value locked up at both ends of the production system. For a typical manufacturing firm, this blockage is in the form of raw material at one end of the production system, WIP (or semi-finished) goods at the other end. For a trading/merchandising firm such as Big Bazaar, inventory refers to the stock of finished goods for sale, while in the case of a manufacturing business, the definition of inventory includes raw material, WIP (or semi-finished) goods, and finished goods. Thus, the definition of inventory is specific to the nature of business. Although spares and stores are also shown as a part of inventory for financial reporting purpose, they are excluded from the definition of inventory in the chapter because they are procured to facilitate production/operations and not for sale.

MOTIVES FOR HOLDING INVENTORY There are three specific motives for holding inventory TRANSACTIONARY MOTIVE The basic purpose of holding inventory is to carry out production/procurement and setting transactions in an interrupted manner. RECAUTIONARY MOTIVE Since uncertainty and associated risks are inevitable, the business must always plan for them. There or with the demand for outputs. An adequate raw material inventory level tides over temporary supply side constraints and reduces input availability risks. Similarly, sufficient inventory of WIP and finished goods enables the firm to overcome uncertainties related to the production line and the demand side respectively. This is termed the precautionary motive of holding inventory. In addition to transaction and precautionary motives, firms might also be holding inventory in anticipation of gain from expected rises n future prices of raw material or finished goods. This is reefed to as speculative motive. For example, if an oil refinery with the objective of gaining from an anticipated hike in international oil prices increases its crude oil reserves, it is said to be doing so with a speculative motive. TYPES OF INVENTORY Raw Materials Inventory Raw material inventory consists of basic materials used as inputs in the firms production operations. For a steel manufacturing firm, iron ore is the main raw material; for a construction company, cement, iron, bricks, etc., are the basic raw materials. All manufacturing firms maintain a raw materials

inventory, regardless of the specific form of the inventory. Its purpose is to decouple the production function from the purchasing function that is, to make these two functions independent of each other, so that delays in shipment of raw materials do not cause production delays. In the event of a delay in shipment, the firm can meet its need for raw materials by dipping into its existing raw material inventory. Work-in process inventory Work-in-Process inventory consists of partially finished goods requiring additional work before they become finished goods. The more complex and lengthy the production process, the larger will be the investment in WIP inventory. The purpose of WIP inventory is to decouple the various operations in the production process so that machine failures and work stoppages in one stage of operation do not affect the subsequent stages. Finished Goods Inventory The finished goods inventory consists of unsold goods on which production process have been completed. The purpose of a finished goods inventory is to decouple production and sales functions, so that sales remain unhindered by stoppages/slowdown in the production process. Firms holding such an inventory can absorb temporary bottlenecks in the production process, meet delivery schedules, and service customers demands despite the lag in the production schedules. INVENTORY NIANAGEMENT Inventory management involves an interface between all the departments along the productive distributive channel of the firm. Such departments are the direct stakeholders, and have their own interests in inventory management. The purchase department, in order to benefit from the economies of scale, indulges in bulk buying, which may cause an overstocking of raw material. The production departments focus is on output maximization

through improved operational efficiency, for which unhindered production is a prerequisite. Therefore, the production department would always want sufficient inventory of WIP so that interruption at some stage in the production line does not affect its output, i.e., finished goods. Similarly, the marketing department, with its objective to maximize sales, would focus on maximizing investment in the finished goods inventory, as it enables the firm to exploit any sudden spurt in demand. These individual goals of the different department may lead to suboptimization of organizational resources. The role of the finance department, Therefore, Assumes significance. The finance department not being a direct stoke holder. In the purchase production distribution process, can decide about the optimal level of inventory investments in a dispassionate manner. It not only reconciles the varied and often conflicting goals of the purchase, production, and marketing departments with regard to inventory investments, it also looks at inventory management from the broader perspective of shareholders wealth maximization. Proper inventory management requires a total systemic view that integrates both the suppliers and the customers into the business. It is no wonder that many times the dividing line between inventory management and supply chain management gets blurred. Instead of taking a functional view of inventory and looking at it in isolation, inventory management should be seen as a subset of overall corporate strategy. Inventory management is intricately linked to overall business strategy, and so reflects the prevailing strategy in a firm.

1.2. INDUSTRY PROFILE India has been known as the original home of sugar and sugarcane. Indian mythology supports the above fact as it contains legends showing the origin of sugarcane. With over 450 sugar factories located throughout the country, the sugar industry is amongst the largest agro processing industries in India, with au annual turnover of Rs.150bn. India is the largest consumer and the second largest producer of sugarcane next to brazil. Presently, about 4 million hectares of land is under sugarcane with an average yield of 70 tones per hectare. India is the largest single producer of sugar including traditional cane sugar sweeteners. khan sari and gur equivalent to 26 million tones raw value followed by brazil in the second place at 18.5 million tones. Even in respect of white crysal sugar, India has ranked No.1 position in 7 out of last 12 years. During 2011-2012 India produce 17.0 million tones (155 lakh tones white sugar) while brazil in 1st place produced 18.5 million tones. Mostly the rural population in India consumes traditional sweeteners gur and khan sari. In the early 1930s nearly 2\3 of sugarcane production was utilized for production of alternate sweeteners. gur and khan sari. With better standard of living and higher incomes, the sweetener demand has shifted to white sugar. Currently, about l\3 sugarcane production is utilized by the fur and khan sari sectors. Being in the small-scale sector, these two sectors are completely free from controls and taxes. Which are applicable to the sugar sector. The advent of modern sugar processing industry in India began in 1930 with grant of tariff protection to the Indian sugar industry. The number of sugar mills increased from 30 in the year 1930-31 to 135 in the year 1935-36 and the production during the same increased from. ah tones under the dynamic leadership of private sector.

SUGAR INDUSTRY STRUCTURE Indian sugar industry can be broadly classified into two sub sectors, the organized sector i.e., sugar factories and the unorganized sector i.e., manufacturers of traditional sweeteners like gur arid khan sari. Since the sugar industry in the country uses only sugarcane as an in input, sugar companies have been established in large cane growing states like Uttar Pradesh, Maharashtra. Tamilnadu, Karnataka. Punjab and Gujarat. Uttar Pradesh leads the tally by contributing 24% of the countries total sugar production and maharashtra stands next with 20% contribution. Out of 453 sugar mills in the country, 252 are in the co-operative sector, 134 are in the private sector and 67 are in the public sector.

CURRENT POSITION The Indian sugar industry is the second largest agro-processing industry in the country. No. of sugar factories established Total capital employed Total payment to cane growers Contribution to central & state exchequers Direct employment: Rural Educated Farmers\ families involved in sugarcane (7.5% of rural population) 493 Rs 16,000 cores Rs 20000 cores Rs 12000 cores Rs 1600 cores Rs 5.00 Lakh Rs 45 million

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

 Largest sugar producer in 7 out of 1 0 years. Second largest area under cane / cane production. Among the cost-effective industries with its field cost (sugarcane) being the second lowest, despite small land-holdings and low productivity. Fourth efficient processor of sugar despite low capacity of its sugar plants as compared to very large-size plants in other plants in other parts of the world. TECHNOLOGY ADOPTED IN SUGAR INDUSTRY Double sulphitation process is employed for production of plantation of white sugar which has a poll of 99.8%. Government has laid down quality standards in terms of grain size namely Large (L), Medium (M), Small (S) and in the colour series of 31, 30 and 29. The mill extraction is generally around 94 to 96% while the overall extraction is about 85% and the losses account for about 2% to 2.5%, owing to small capacity of the individual units automation in the sugar industry has not received a high priority. Some units however, have pH control; auto feed system and boiler control equipments. SUGAR POLICY Under the present policy of partial decontrol 30% of production by each unit is supplied for public distribution system known as the levy sugar. The levy sugar is distributed to the public irrespective of the economic status. The balance 70% is sold in the free marked against monthly releases issued by the government, This policy has been continuing since 1967-68 expect for brief periods of de-control mainly during the years of surplus production and accumulated sugar stocks.

Government announces the statutory minimum price (SMP) for sugarcane every year based on the recommendations of the commission for agricultural costs and prices (CACP). CONSUMPTION TRENDS

During the 9th five year plan period, the government projected the growth rate in consumption at a compound rate of 5.6% having regard to the GDP at 7%. The projected requirement of production and installed capacity upto the year ended 2011-2012 is given below. Sugar year 2000-2001 2001-2002 2002-2003 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2011-2012 Sugar production (in laksh tones) 185.0 194.8 205.2 216.1 227.6 239.8 252.7 264.8 277.6 291.2 Installed capacity (lakhs tones) 194.8 205.2 216.1 227.6 239.7 252.6 266.0 279.2 291.0 302.8

I.3 PROFILE OF THE FACTORY

GROUP

Dharani sugars and chemicals limited is one of the units of POP Group of company promoted by Non-Resident Indians based at United States of America under the dynamic leadership of Dr.Palani G.Periasamy, MA.. MA..Ph.D., a leading economist and industrialist. Dr. Palani O.Periasamy was a tenured professor of Economics and Director of the Graduate school of Business Management at University of Baltimore, USA. On a passion to bring some contribution to born country he established the industry in Tamilnadu. LOCATION OF THE FACTORY Dharani sugars and chemical ltd., is the first sugar factory setup in southern part of Tamilnadu, the most industrially backward area. The factory is situated at Naranapuram village of Sivagiri taluk in Tirunelveli district. It is one of few heavy industries of the district and it is the first agro based industry of the district. It caters to the needs of cane growers of three districts viz, major parts of Thirunelveli, the western parts of Tuticorin and western parts of Virudhunagar. CAPACITY OF THE FACTORY The installed capacity of the sugar unit is 2500 TCD. DATE OF COMMISSION 06.03.1989. The DISTILLERY unit has been installed with the capacity of 30 KLD of Rectified spirit and 10 KLDof Extra neutral alcohol. DATE OF COMMISSION 25.06.1995

CANE PRODUCTION The factory has commenced its maiden season in March 1989 and has successfully completed 19 crushing seasons with total crushing of around 78 lakhs tonnes of cane.

CANE PROCUREMENT MANAGEMENT

Cane an agro based raw material is cultivated in 100 kilometre radius. Like other raw materials, we cannot procure and store it in the industry and use according to our requirement. Whereas the planting of cane itself has to be planned well in advance in accordance with the crushing programme of the factory for the next year. Hence, the cane lanting in the field has to be controlled by the industry to suit their requirement of cane according to the crushing programme. We have opened 14 divisional offices with one cane officer and 4 or 5 cane assistants in each division to approach the ryots and advise them in planning of cane, development, harvesting and supplying to the factory. Around 15000 cane growers are under our fold and they have been provided with crop loans through local financial institutions. The cane cultivation is completely monitored by our cane department. The ryots are advised in method of preparation of field, preparation of seed, method of cultivation, manuring, pest controlling and harvesting. The post harvesting service is also rendered to bring up the ratoon crop and registered to the factory. SOCIO ECONOMIC FACTORS The rural growth of a country is scaled at the growth of villages. The growth of the villages is scaled at the growth of agro based industries. Our industry is also taking part in developing the socio economic growth of the villages in all three districts. EMPLOYMENT OPPORTUNITY Around 1000 employees are being directly benefited and about 10000 people are being indirectly benefited by offering themselves for the promotional operations of sugar cane production.

Nearly around 40 to 50 crores of money is generated for a season and transacted in the rural area which strengthens the economic growth of our area. SUGAR FACTORY OPERATION Our factory is one of the modern factories in Tamilnadu and is the first one setup with auto setting mill in the world which contributes to the maximum efficiency of the industry. MILLING The delivered cane is weighed, sampled for cane quality and unloaded in the feeder table. The cane is prepared by means of cane preparation devices arranged in the field. A serious of three roller mills crush the prepared cane and extract the raw juice. Water is added (imhibition) in the last mill to help wash the juice for extraction of residual sugar. The residue left after extraction of the juice is called bagesses and it is used as the fuel in the boilers and it cane also be used for paper manufacturing. CLARIFICATION The raw juice is strained heated and lime is added to cause impurities such as mud to settle. Clarifiers separate the juice in to clarified juice and muddy juice. The muddy juice is sent to filter where the juice is removed leaving mud (filter cake) which is used as manure. EVAPORATION The clarified juice is then boiled in evaporators which remove most of the water leaving thick syrup.

HUMAN RESOURCE DEPARTMENT Training After the selection they give joining date and from join ITI candidates are trained 2 years. Other graduates are taking training at 1 year. If they physically and mentally fit means the management will select them otherwise they will not selected be the management. Personal file After the selection, candidates passport size photos and address, blood group. Medical certificates, agreement all those things are received from the selected candidates by the personal department. That file are called candidates personal file. This is creating and maintained by personal department. RECRUITMENT SOURCES Internal - Transfer - Promotion External - Advertisement Friends and employees reference - Casual applicant ADMIN RULES AND POLICY Workers and others not allowed to smoking and drinking within the factory campus. They dont allow to using mobile with in factory. But the office people can use mobile with in the office only, they also not allowed to using mobile in production area and other areas. Workers and others not allowed taking any plastic to the factory.Workers should keep punctuality and start work at a proper time. This is also watched by time office and they can give performance and discipline report to general manager. This may lead to dismiss the candidate.

 Dharani sugars working hour is 24 hours, round clock of two times. They are not allowing any vehicles to the factory. Workers should be in uniform. MAINTENANCE FUNCTION Personal records All the candidates or employees name. Address, post, duty details, authority. Conduct number, blood group, medical certificate, agreement all those personal file are maintained by personal department. Safety Here normal health dont affected from work to the employees. The management provide good ventilation and sitting facilities; through this they maintain the workers with safety. Machines All the machines are buying through loan. Loan from MGT branch, Indian bank. They maintain the machineries properly, giving services, making repair correction, create depreciation for every machine. Induction program If any new employee recruited for any job, he /she will introduce to the other employees by the general manager. The personal department manager will tell about the rules and regulation and taking two types of classes. CLASS ROOM TRAINING Will give by the personal department persons weekly two days about the work teaching with theoretical.

ON-JOB-TRAINING On-job-training will give by the existing workers and experienced, expert persons. On-job-training means work spot training. What they will do in future practically that all trained to them in works spot.

TOTAL NUMBER O.F EMPLOYEES 325 peoples are working in the Dharani sugar and chemicals Ltd. Naranapuram. 15 securities is for security level. There are permanent workers also seasonal workers. WORKING HOURS 8 hours per day (working hours time). There are three shifts for production process. 1st shift - morning 6.00 am to 2.00 pm 2nd shift - afternoon 2.00 pm to 10.00 pm 3rd shift - night 10.00 pm to 6.00 am 1/2 hour lunch break for workers 1 hour lunch break for office workers. Central shift for production process Only one shift - 8.00 am to 5.00 pm Central shift for office workers Only one shift - 8.30amto5.3Opm Securities also shift by three times.

SELECTION PROCESS

Employment exchange

Advertisement

Reference

Receive filled application

Written test conduct by interview committee

Personal interview conduct by interview committee Final approval

Provisional certificate issued by managing director

CANE DEPARTMENT Target fixation Before a particular crushing year begins, the cane department has to fix the target of raw materials to be procured. This target can be fixed based on the production capacity of the mill. The production capacity of the mill is 2500 tonnes crushing per day. Usually the miffs crushing period in a year is 10 months. Thus the total requirement of sugarcane for a particular crushing period is 750000 tonnes. This requirement can be converted into no. of acres to be planted by dividing the total requirement with average yield per acre. The average sugarcane yield per acre is 35 tonnes. Thus to meet the total requirement of cane, we have to plant 21428 acres for full capacity utilisation of the mill. DEMARCATION OF AREA FOR SUGAR MILL BY GOVERNMENT Tirunelveli district Virudhunagar district Temporary allocation Kovilpatti Pail of Thirunelveli taluk Thiruchendur taluk Part of Thoothukudi taluk Vilathikulam The target fixed for each division can be decided based on potential pockets. Potential pockets are in terms of soil suitability, sources of irrigation, type of land, cropping pattern followed in that area etc., Once the target is fixed to each division, the cane assistants has to approach the farmers and collect planting offers. Sivagiri taluk,Sankarankovil taluk, V.K.pudur taluk Rajapalayam taluk & Srivilliputtur taluk

Credit facilities The farmers can be provide with credit facilities ie. bank loan under tie-up arrangements. Thus the farmers can avail crop loan only on supply of sugarcane to thc mill and all the sugarcane proceeds should be send to loan arrangement. For identiflcation each field and farmer are provided with Ryot number. STORE DEPARTMENT Material Receipt Process In store department they having all the things, what all the materials the other department needs inside of the factory. If they dont have means they receive purchase indent and they will buy it from out side or they give request to the head office and they will provide the things to them. Through head office purchase means above 7000 cost of purchase that are like chemicals. any machinery parts, machine oils, etc., The store manager will demanding the material (with the reason for what purpose) to the head office. Purchase Indent Purchase indent means what are all the things demanded by the departments inside of the factory. The concern department will send a purchasing material name, in what quality, quantity (No, kg). purpose to the store department demanded material requisition to the store department by the concern department is purchase indent. Purchase Order After receiving purchase indent from other department, the store manager will searching the materials where its available, and before that he analyze the same material. Where we buy it in past days, then he will search many suppliers and then to one suppliers placing order at a positive and suitable place for buying material. Positive place means lowest price but good quality of material).

Vendor Supply After placing order supplier will supply the material to the factory. The company will pay the amount through bank or sent LR directly. Materials Enters Factory When the materials is enters into the factory inward gate pass will give by the security peoples. Received at Stores After that getting inward gate pass the materials will send to the stores department. They will receive the materials. MATERIAL ISSUE PROCESS Material Issue Slip from Consumer Department In which department want material that department will issuing slip to the store manager for getting material. Sent to Stores Then they sent that material issue slip to store. Stock Availability Checked The store peoples will check the wanted material is available or not. Store Issue Material If the material is available means they will issue material or not they will buy it and issue to the consumer department. Then material slip will codified in computer - posting bin cards - send it to electronic data process section computer feeding - finally reports generated.

MATERIAL ISSUE CHART

Material issue slip from consumer dept

Sent to Stores

Stock availability checked

Stores issue materials

Materials issues slip codified

Bin card posted

Sent to EDP section

Computer feeding

Reports generated

Financial Analysis

Cost center analysis

Expenses Capital A/C Dr

Stock A/C Cr

ORGANISATION CHART

MANAGING DIRECTOR (SUGAR DVN)

GENERAL MANAGER

H.O.D H.O.D ADMINISTRATOR ADMINISTRATOR

H.O.D ENGINEERING

H.O.D CANE

1.4 PRODUCT PROFILE

PROCESS OF SUGAR MANUFACTURE Sugarcane. the raw material for sugar is brought to the factory in lorries, tractors and tyre carts and weighed in the weigh bridge. The total weights of the cane received in a day is posted in the sugar cane purchase account maintained by the factory. An allowance of 0.1% is made for binders. The water introduced in the mill is called IMBIBITION WATER. The weight of the water is assessed by means of automatic flow recorder. The BAGASSE obtained from the mills after the extraction of juice from the sugarcane is used in the boilers as fuel for producing steam from the water. to run the mill turbines and to generate electricity required to run the factory. The juice obtained in the mill house is known as mixed juice is pumped to the boiling house after weighing. The mixed juice is heated to a temperature of 65C in the primary heater and the milk of lime is added to the juice and the sulphur dioxide (S02) is added simultaneously. The juice is now called treated juice and further heated to l00C and pumped to huge clarifies. In this tank settling aid is added and the juice gets settled leaving the muddy juice at the bottom and the clear juice overflows from the clarifiers as the inflow is continuous. Here phosphoric acid is added to further precipitation in the evaporator. The muddy juice is pumped from the clarifier to mud mixer where it is mixed with fine particles of bagasse and the mixed slurry is taken to vacuum filter. To extract the juice from this slurry. water is sprayed and the juice is sucked through the perforated surface of the rotating drum by means of vacuum.

ANHYDROUS SLCOHOL The raw material utilized for producing anhydrous alcohol (99.8% v/v) is molasses. The rectified spirit is produced by continuous fermentation & distillation process. The rectified spirit contains 94.68% of ethanol and 5.32% v/v water. The water in the rectified spirit is to be removed to produce 99.85 v/v ethanol which is called as anhydrous alcohol. This is achieved by the latest advanced technology of vapour phase molecular sieve system. The rectified spirit, which is in liquid stage, is taken to the rectifier cum stripping column and boiled with steam to bring it to vapour stage. The alcohol vapour is passed through a super heated to raise the temperature to 130C by using steam. The regeneration of molecular sieve beds is achieved by applying vacuum to the bed. The absorbed water from the molecular sieve material desorbs and evaporates into the ethanol vapour steam. The ethanol is stripped and the water is recycled to the rectifier column of R.S plant. In the rectifier column of RS plant the higher alcohols are tapped and sent to a decanter. In the decanter the higher alcohol liquid in mixed with water for separating it and the remaining liquid is again sent to the rectifier column. So this water will be stopped and the water which comes out of the anhydrous alcohol plant will be utilised for the same. This is only a purification process where the water is removed form the rectified spirit for concentration of ethanol.)

PROCESS OF ETHYL ALCOHOL MANUFACTURE Fermentation The raw material molasses is diluted with water in the ratio of 1:2.8 to 3.0 in order to bring down the sugar % in diluted molasses for the growth of yeast. To this diluted molasses solution the yeast is added as reactant and diammonium phosphate urea and sulphuric acid is added to this for providing neutrients to the yeast. Then the whole solution is allowed to undergo reaction for 24 hrs in three reaction vessel namely fermenters by cascade process (continuous process). After completion of the reaction, the sugar percent in the molasses is converted to ethyl alcohol & CO(2). This solution after conversion is known as FERMENTED WASH. It is ready to distillation process. Distillation The fermented wash contains about 7 to 8.5% v/v. ethyl alcohol is send for distillation section. It mainly consists of two column. 1 .analyser column. 2.rectifier column. first, the fermented wash is sent to the top of the analyser column and the steam passes at the bottom. While the steam contact the down coming fermented wash, ethyl alcohol present in the fermented wash goes to the rectifier column and remaining unwanted material emerges as spent wash at the bottom. The clear juice so obtained is concentrated to 60 brix at the evaporators in a series of vessels, where the vapour from the previous vessel heats the juice the next vessel for conserving heal and steam, the evaporators vessels are in vacuum and boiling taken place under reduced pressure. The thick liquid emerging out of last vessel is known as syrup and S02 gas is passed through the syrup to bleach the same (second suiphitation). This is known as SULPHURED SYRUP. The sulphured syrup is pumped to pan floor for storing in tanks and then taken for boiling in the vacuum pan.

It will not be possible to extract all sugar from the syrup in one operation. Three separate carefully controlled boiling brings out sugar. The syrup is boiled in the vacuum pans. The thick boiled mass with sugar grains is known as MASSECUITE. For purification purpose different grades of massecurites are boiled -as A,B &C. The final liquid that we get by centrifuging from C-Massecurites is termed as final molasses from which no recoverable sugar is got. Hence, sent out as bye-product (FINAL MOLASSES) to the storage tanks. For obtaining white sugar, A massecuite is processed. In this, after attaining the required grain size, it is discharged to the crystallizers. From the crystallizers, it is sent to centrifugal machines, where the sugar is separated and the molasses is purged out. The sugar produced must confirm to ISI specifications and is indicated on the bags as S-29, S-30. etc., as the case may be alphabet shows the sugar grain size and the number indicates the degree of whiteness of sugar. I.MAIN PRODUCT-SUGAR A. Sugar Collection at Bins The final product sugar is first collected in the sugar bin& As we are storing sugar in the bins, we could able to pack and store a clay production in the general shift itself. B. Packing The sugar is packed in 50 kgs., and 100 kgs bags according to the requirements through automatic weighing scale. Before brought for bagging the sugar bags are checked and printed the address and other details as per the provisions of sugar packing control order through sciten printing Before filling of sugar, the weight of the bags are checked to the standard weight and sent for bagging of sugar. The packed sugar is stitched and sent for storage. The cross weighment checking is done once in every 50 bags of packing.

C. Storage After confirming the correct weight the sugar bags are being transmitted to godowns through conveyor. In the godowns, the sugar bags are stacked in lots through stackers upto the height of 36 layer& The lot quantity are determined according to the space availability and convenience. D. Despatch The sale advice is received form our head office. The advice is serially accounted in the sugar despatch advice record and the same number is fed into the computer link number wise which is the base for preparation of invoices and other related documents. The sale advice is informed to transport section for the arrangement of lonies. The lonies for sugar loading will report to godown office with the sale intencL After verifying the intend and the (SDA) advice from head office sugar will be loaded to the lorries in a countable manner. E. Records & Registers Personal ledger account (P.L.A) is the register of excise duty payment account. Invoice wise debit entries shall be made in this account and the duty is paid once in fortnight through the special challans. II. BY - PRODUCTS A. Molasses Molasses is the one of the main by-products. It is also an excisable commodity. After separation of molasses from sugar, it is weighed and stored in steel tanks. The molasses dispatched after getting sale advice from head office following all central excise procedures adapted for sugar. B. Bagasse Bagasse is also an excisable commodity, but exempted from paying excise duty. A portion of baggase is captively consumed at boiler for the production of steam.

C. Filter cake / Press mud Press mud is one of the waste material arising during the manufacture of sugar. This is used as manure also it is made composed by adding distillery effluent. III. DISTILLERY Four types of qualities of spirit is manufactured. such as, rectified spirit, extranuetral spirit, impure spirit and denatured spirit. Among this, D.N.A. is only the excisable commodity, others are exempted from the payment of excise duty. IV. REPORTS I RETURNS A. Weekly Production and clearance details of sugar are furnished to directorate of sugar, New Delhi trough telegram. Proforma-Il return is furnished to the directorate of sugar, New Delhi. Production and clearance details of molasses are furnished to the commissioner of prohibition & excise, Chennai. B. Fortnightly Free sales sugar state-wise dispatch details is furnished to the directorate of sugar. new Delhi. Production, despatch and stock details to ISMA / SISMA C. Monthly E.R-1 Return to central excise department V. Marketing pattern Release of sugar is controlled by directorate of sugar, ministry of food and civil supplies, Government of India, new Delhi, every month certain quantity of sugar is released to state Government who nominate civil supplies

corporation in Tamilnadu for distribution to consumers is controlled channel (Levy sugar).

CHAPTER II REVIEW OF LITERATURE

Inventory is a list of goods and materiais or those gords and materials themselves, held available in stock by a. business, Inventory are held in order to manage and hide from the customer (he ibm that manulhcturesupply delay is longer than delk cry delay, and also to ease the offect of imperibetions in the manui during process that lower production etIieieneies if production capacity stands idle for lack of materials. HE REASONS FOR KEEPING STOCK All these stock reasons can apply to any owner or product stage. BUFFER STOCK lt is held in individual workstations against the possihtlity that the upstream workstation may be a little delayed in providing the next item br processing. Whilst some processes carry very large buffer stocks. I ovota moved to one (or a tew items) and has now moved to eliminate this stock type. SAFETY STOCK It is held against process or machine failure in the hope/belief that the thilure can he repaired before the stock rms out. This type of stock can be eliminated by programmes like fatal Productive Maintenance. AWERPRODUCTION It is held because the forecast and the actual sales did not match. Making to order and ill eliminates this stock type. i. Financial Managemen - FM. Pandey 9 Edition tV kas Pnhlieaioni

2. Financial Management K han & Jam 5 Edition

LOT DELAY STOCK It is held because a part of the process is designed work on a batch basis whilst only processing items individually. Therefore each item of the lot must vat for the whole lot to he processed before moving to the next workstation. This can he eliminated by single piece working or a lot size of one. DEMAND FLUCTUATION STOCK It is held where production capacity is unable to flex with demand. Therefore a stock is built in times of lower utilisation to he supplied to customers when demand exceeds production capacity. This can be eliminated by increasing the flexibility and capacity of a production line or reduced by moving to item level load balancing. Line balance stock is held because different subprocesses in a line work at different rates. Therefore stock will accumulate after a fast sub process or before a large lot size sub- process Line balancing will eliminate this stock type. CHANGEOVER STOCK It is held after a sub-process that has a long setup or change-over time, This stock is then used while that changeover is happening. This stock can he eliminated h tools like SMED. Where these stocks contain the same or similar items it is often the work practice to hold all these stocks mixed together before or after the sub process to which they relate. This reduces costs. Because they are mixed-up together there is no visual reminder to operators of the adjacent subprocesses or line management of the stock which is due to a particular cause and should he a particular individuals responsibility with inevitable consequences. Some

plants have centralized stock holding across sub processes which makes the situation even more acute.

THE BASIS OF INVENTORY ACCOUNTING Inventory needs to be accounted where it is held across accounting period boundaries since general) expenses should he matched against the results of that expense within the same period. When processes were simple and short then inventories were small but with more complex presses then inventories became larger and valued unsold and incomplete goods has driven many new behaviours into management practice. Perhaps most significant of these are the complexities of fixed cost recovery, transfer pricing, and the separation of direct from indirect costs. This, supposedly. Precluded anticipating income or declaring dividends out of capital. It is one of the intangible benefits of lean and the IPS that process times shorten and stock .revels decline to the point where the importance of this activity is hugely reduced and therefore effort. Especially management to achieve it can he minimised.

INVENTORY DECISIONS These refer to means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw material semi finished or finished goods. They can also be in-process between locations. Their primary purpose of buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can Cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supp1y chain operations. It is long term in the sense that top management sets goals.

INVENTORY CONTROL MANAGEMENT INVENTORY DATA BASE An important component of inventory planning involves access to an inventory database It is a structured framework that contains the information needed to effectively manage all items of inventory, from raw materials to finished goods. This information includes the classification and amount of inventories, demand for the items, and cost to the firm for each item. Ordering costs Carrying costs and other data, The EOQ (economic order quantity) refers to the optimal order size that will result in the lowest total of order and carrying costs and ordering costs. By calculating the economic order quantity the firm attempts to determine the order size that you minimize the total inventory costs

INVENTORY FLOW The management of logistics is concerned with the movement and storage of materials and finished products. Logistical operations start with the initial shipment of a material or component part from a supplier and are finalized when a manufactured or processed product is delivered to a customer. From the initial purchase of a material or component. the Logistical process adds value. By moving inventory when and where needed, Thus the material gains value at each step. For a large manufacturer, logistical operations ma yconsist of thousands of movements, which ultimately culminate in the delivery of the product to an industrial user. Wholesaler, dealer or customer.

INVENTORY RELATED COSTS INVENTORY CARRYING COST (ICC):

Tax Storage Capital Insurance Obsolescence Ordering: Communication Processing including material handling and packaging Update activities, including Receiving and date-processing.

BASIC INVENTORY DECISIONS 1 here are two basic decisions that must he made for every item that is maintained in inventory. These decisions have to do with the timing of orders for the item and the size of orders for the item.

RELEVANT INVENTORY COSTS Hem costs Holding Costs Ordering Costs Shortage Costs Direct cost for getting an item

 Purchase cost for outside orders. Manufacturing Cost for internal orders Costs associated with carrying items in inventory. Storage and other related costs. Fixed costs associated with placing an order. Costs associated with not having enough inventories to meet demand, E.OQ The EOQ can be calculated with the help of a mathematical formula. Following assumptions are implied in the calculation: CONSTANT OR UNIFORM DEMANI) Although the FOQ model assumes constant demand. demand may vary from day to day. If demand is not known in advance the model must be modified through the inclusion of safe stock. Constant unit price the EOQ model assumes that the purchase price per unit of material will remain unaltered irrespective of the order offered by the suppliers to include variable costs resulting from quantity discounts. The total costs in the EOQ model can be redefined. CONSTANT CARRYING COSTS Unit carrying costs mar very substantially as the size of the inventory rises. perhaps decreasing because of economies of scale or storage efficiency or increasing as storage space runs out and ne warehouses have to he rented.

CONSTANT ORDERING COST This assumption is generally valid. However any violation in this respect can be accommodated by modifying the FOQ model in a manner similar to the one used for variable unit price.

Instantaneous delivery - if delivery is not instantaneous. Which is general the case: the original LOQ model must be modified through the inclusion of a safe stock. INDEPENDENT ORDERS If multiple orders result in cost saving by reducing paper work and the transportation cost, the original EOQ model must be further modified, While this modification is somewhat complicated, special EOQ models have been developed to deal with it. COST OF CARRYING INVENTORY Carrying material in inventory is expensive .A number of studies indicated that the annual cost of carrying a production inventory averaged approximately 25% of the value of the inventory. The escalating and volatile cost of money has escalated the annual inventory carrying cost to a figure between 25% - 35% of the value of the inventory. The following five elements make up this cost. Opportunity cost (12% 20%) Insurance cost (2% 4%) Property taxes (1% - 3%) Storage costs (1% 3% Obsolescence and deterioration (4% 10%) Total carrying cost (20% - 40%)

OPPORTUNITY COST OF IN VESTED FUNDS When a firm uses money to buy production material and keeps it in the inventory, it simply has this much less cash to spend for other purposes. Money invested in external securities or in productive equipment earns a return for the company. INSURANCE COST Most firms insure the assets against possible losses from fire and other forms of damage. PROPERTY TAXES This is levied on the assessed value of a firms assets, the greater the inventory value the greater the asset value and consequently the higher the firms tax bill. STORAGE COSTS The warehouse is depreciated every year over the length of its life. This cost can be charged against the inventory occupying the space. THE ABC CLASSIFICATION An indicator that classifies a material as an A.B or C part according to its consumption value .The classification process is known as the ABC analysis. The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.

REORDER POINT The inventory level R in which an order is placed where R D.L, D = demand rate (demand rate period (day. week, etc). and I. lead time.

SAFETY STOCK Remaining inventory between the times that an order is placed and when new stock is received. I there are not enough inventories then a shortage may occur. Safety stock is a hedge against running out tormentor; It is an extra inventory to take care on unexpected events. It is often called butler stock. 1 he absence o inventory is called a shortage. ABC INVENTORY CLASSIFICATION The ABQ classifications process is an analysis of a range of items, such as finished products or customers into three categories. Outstandingly important B-of average importance C-relatively unimportant As a basis for a control scheme each category can and sometimes should be handled in a different way, with more attention being devoted to category A, less to 13, and less to C. BREAK-EVEN POINT Number of units that must be sold in order to produce a profit of zero (hut will recover all associated costs). In other words, the breakeven point is the point at which your product stops costing you money to produce and sell, and starts to generate a. profit for your company.

Where: Q FC VC UP Therefore

= = = =

Breakeven Point. i.e., Units of production (Q), Fixed Costs, Variable Costs per Unit Unit Price

Break Even Point Q = Fixed Cost / (Unit Price - Variable Unit Cost) STOCK CONTROL AND INVENTORY Stock control, otherwise known as inventory control is used to show how much stock you have at any one time, and how you keep track of it. Efficient stock control allows you to have the right amount of stock in the right place at the right time. it ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain. INVENTORY CONTROL OVERVIEW Normal Inventory As it sounds, this type of inventory item will be used for the majority of your parts. It will correctly track the inventory received and sold on a first in first out basis, will handle cost of sales, and will warn you when youre out of stock. NON-INVENTORY TYPE This is used for selling things that are not really inventory items. For example, you could be selling warranty. But because you dont have warranty in a box to sell, and youll never run out of stock, you wont need to keep inventory control on it. As welt there is no cost of sale adjustments with non-stock items.

Labour Parts You dont have technicians hanging from hooks in your back room, so like non inventory items. The system will not try to remove them from inventory when you sell a labour item. The two differences between NonInventory items and Labour items are that you can optionally have the system ask you for the technician code that did the work so that you can print reports showing who did what work. As well, the system will optionally ask for a comment to explain what was done so that the description of the service work can he printed on the invoice. Consignment items Consignments can be used to keep track 01 inventory that you dont own, but at the time you sell it, you must pay for it. Youll be able to generate several reports. Including, a list of inventory that is on consignment but not sold and a list of inventory solo on consignment but riot yet paid for. Floor plan Inventory Floor planning is very similar to consignment, except that you take possession and own the inventory when you receive it. But you dont have to pay for it until its sold, or until its been in the store 11w a negotiated period of time. Tire Inventory Windward System Five has the ability to sort and categorize tires by their size, aspect ratio and rim size. In addition, you will also be able to search for the tires by just entering in some of the search criteria and having the system bring up a window of all matches.

When the list brings up a list of tires that can all fit the vehicle, the system can sort the list to show the items with the highest quantity in stock at the top of the list and the items that are out of stock at the bottom of the list. This will help you sell what you actually have to sell instead of creating special orders. Product Inventory Products are items such as vehicles that you might service or repair after selling them to the customer. That is, they are an item in the database that can be sold, and when sold, are automatically added to the customers list, of products that can be worked on. Windward System Five can also track whole goods such as recreational vehicles by keeping, track of the cost of the item before the sale. add ones and pre-delivery inspection items. In addition, the system can generate a wash out report one level deep to show the costs and income associated with the trade in.

Seria1zed Inventory Those items that need to be tracked by their serial numbers can he marked as serialized inventory, For example. Fridges, stoves, Computers and chainsaws might all be serialized. Note that if you plan on servicing these items in the figure and keeping trek of all work you do on them. They should be entered as products instead of serial numbers.

TYPES OF INVENTORY Several different types of inventories are conducted, depending upon the type of materiel involved and type of information needed. Bulkhead-to Bulkhead Inventor A bulkhead-to-bulkhead inventor is a physical count of all stock materiel within the ship or within a specific storerooms bulkheadto bulkhead inventory of a specific storeroom is taken when a random sampling inventory of that storeroom fails to meet the inventory accuracy rate of 90 percent when directed as a result of a supply management inspection (SMI). It is also taken when directed by the commanding officer or when circumstances clearly indicate that it is essential to effective inventory control. SPECIFIC COMMODITY INVENTORY The specific commodity inventory is a physical Count of all items under the same cognizance symbol, .FSC or that support the same operational function, such as boat spares. electron tubes. boiler tubes. or lire brick. This inventory is taken under the same conditions as a bulkhead- t-bulkhead inventory; however. Prior knowledge of specific stock numbers and item location is required to conduct a specific commodity inventory.

SPECIAL MATERIEL INVENTORY A special materiel inventory requires the physical count of all items that, because of their physical characteristics, costs, mission essentiality, and criticality, are specifically designated for separate identification and inventory Control.

ADVAPTAGE INVENTORY CONTROL The Inventor Control gives von the ability to handle our inventory your way. As one of the most flexible and comprehensive modules in the Advantage, you can choose the level of control that best suits your specific business needs. Your inventory can be valued on a LIFO, FIFO or Average cost basis. You can choose to use pails explosions. Serialized inventory, parts allocations, Vendors, warehouses and an audit trail. Handles core pricing Produces a re order report based on minimum stock quantities Tracks unlimited vendors per item and recommends a best vendor Tracks allocations including explosion allocations Up to 254 discounts per item, including quantity break discounts Unit conversions can be defined for each item for both buying and selling quantities Allows for warehouse transfers and other adjustments Set up special sale dates for item discounting Reports the best and worst selling items in each of eight different categories Tracks items by location or quantity in multiple warehouses Can automatically generate items based on a template hem Utilizes Rapid Entry to facilitate entry of item data INVENTORY MANAGEMENT AND CONTROL Their proper management and control assume considerable Importance. In fact, the management of inventory is given such an importance that it is often treated synonymous with material management.

PROCESS OF INVENTORY MANAGEMENT Determination of optimum inventory levels and procedures of their review and adjustments. Determination of the degree of control that is required for the best results. Planning and design of the inventory control system. Planning of the inventory control organization. DETERMINATION OF OPTIMUM INVENTORY LEVEL Determination of optimum inventory that an organization should hold is a significant but difficult step. Too much of inventory results in locking out of working capital accompanied by increased carrying costs. DETERMINATION OF THE DEGREE OF CONTROL The second aspect of inventory management is to decide just how much control is needed to realise the objectives of inventory management. The difficulty is best overcome by classification of inventory on the basis of value. Popularly called the ABC classification, this approach is useful in degree of control PLANNING AND DESIGN OF THE INVENTORY CONTROL SYSTEM An inventory system provides the organizational structure and the operating policies for maintaining controlling goods to be inventoried .The system is responsible for ordering and receipt of goods, timing the order placement, and keeping track of what has been ordered how much, and from whom. The fixed order quantity system The fixed order periodic system

DETERMINING ORGANIZATIONAL ARRANGEMENT STRUCTURE Inventory management and control is to determine an organization structure to handle inventory, organizationally speaking .inventory control function is assigned to materials management, or production planning and control. INVENTORY CONTROL TECHNIQUES Always better control classification High Medium, Low classification Vital, Essential and Desirable classification Scarce, Difficult and Easy to obtain Fast moving .Slow moving and Non moving Economic order quantity Max minimum system Two bin system HML CLASSIFICATION The high, medium and low classification follow the same procedure as is adopted in ABC classification only difference is that in J-IML classification unit value is the criterion and not the annual consumption value. The item of inventory should be listed in descending order of unit value and it is up to the management to fix limits for three categories. VED CLASSIFICATION While in ABC classification inventory are classified on the basis of their consumption value in HML analysis, unit value is the basis, critically of inventories is the basis for vital, essential and desirable categorization. The VED analysis is done to determine the critically of an item and its effect on production and other services.

MINIMUM MAXIMUM TECHNIQUE The minimum maximum technique is often used in connection with manual inventory control system. The minimum quantity is established in the same way as any order point. The maximum is the minimum quantity plus the optimum lot size. In practice a requisition is initiated when a withdrawal reduces the inventory below the minimum level. The order quantity is the maximum minus the inventory status after the withdrawal If the final withdrawal reduces the stock level substantially below the minimum level, the order quantity will be longer than the calculated EOQ. COST OF HOLDING INVENTORY One operating objective of inventory management is to minimize cost .Excluding the cost of merchandise the associated with inventory fall in Iwo basic categories. Ordering or acquisition or set up costs Carrying costs ORDERING COSTS This category of cost is associated with the acquisition or ordering of inventory. Firms have to place orders with suppliers to replenish inventory of raw materials, the expenses involved are referred to as ordering costs. Apart from placing order outside, the various production departments have to acquire material from the stores. Receiving, impacting and recording the goods received to ensure both quantity and Quality. The cost of acquiring material consists of clerical costs and cost of stationery. CARRYING COSTS Those that arise due to the storing of inventory the main components of this category of carrying cost are storage cost that is tax,

insurance, Depreciation, maintenance of the building utilities and janitorial services.

CHAPTER - III Ill. 1. RESEARCH METHODOLOGY

DEFIN1TION Research is the process in which the researches wish to find the solution for a given problem. Thus the solution helps in the future course of action. According to the Ridmen and more it is defined as systematic effort to gain knowledge. It has been defIned as a careful investigation or inquiry especially through search for new facts in any branch of knowledge. NEED FOR THE STUDY Inventories constitute a major element of the total working capital Inventory should neither be excessive or inadequate .Since both the Situations would lead to lose to the company. A study of the inventory management system therefore becomes necessary to ensure the supply of the required quantity and quality of inventories at the required time and at the same time to prevent unnecessary investment in inventory. Such a study may reveal introduction of new methods of control. Which help in maintaining optimum level? III. 2. SCOPE OF INVENTORY MANAGEMENT The study is based on the annual consumption of company for the period of 5years from 2-007-2011. The study can use as the base for understanding the inventory management

III.3. OBJECTIVES

To analyze the cost of holding stock. To study the efficiency an inventory management To maintain sufficient stock of mw material in periods of short supply and anticipate price changes. To reduce the manufacturing lead time. To maintain a minimum investment in inventories. To find out the current trend for the performance of the company.

III. 4. LIMITATION

Inventory and quantity control measure adopted by the company was all based on secondary data. There was also constant of time due to which an in-depth study was not possible. The non involvement of respondent may be limitation in data collection.

A. RESEARCH DESIGN Research Design is the specification of methods and procedures for acquiring the information needed to structure or to solve given problem. it has been explained as series of advance decisions that is taken together for a specification or model for the conduct of investigation. B. PERIOD OF THE STUDY This period of study takes for this project 5 years from 2O62QjGol1ected were arranged as per the importance tabulation and charts used in this project work for the purpose of quick reference and supporting this study. C.TYPES OF DATA Primary Data Secondary Data SECONDARY DATA Secondary data mean data that are already available. They refer to the data which here already been collection and analyzed by someone else. When the research utilizes secondary data, then he has to look in the various sources from where he can obtain them. In this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published data or unpublished data. Usually published data are available. ANALYTICAL STUDY In analytical research on the other hand, the research her to use facts or information already available and analyze there to make a critical evaluation of the material.

CHAPTER - IV

DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS Analysis of data is a process of inspecting, cleaning, transforming, and modelling data with the goal of highlighting useful information suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains. INTERPRETATION There is now a standard story about the originality approach to constitutional interpretation. In the 1970s and 80s certain constitutional law scholars became concerned with what seemed to them the ungrounded jurisprudence of the United States Supreme Court. They began to articulate a theory of interpretation that stressed the obligation of the judge to apply the Constitution in its original and therefore unchanging sense. By this they meant the sense intended by the people who wrote and ratified it. I say they articulated this view because, prior to that time, it was already the prevailing conventional, if implicit, understanding of constitutional interpretation.

INVENTORY TURNOVER RATIO

Inventory turnover ratio measures the velocity of conversion of stock into Sales. The ratio is obtained by Inventory turnover Ratio = Cost of goods sold / Average Inventory

TABLE-IV-1 INVENTORY TURNOVER RATIO

Year 20062007 20072008 20082009 20092010 20102011

Cost of goods sold 22,523.5 9 20,949.1 8 19,815.3 3 14,061.4 4 54,057.8 7

Average Inventory 3034.02

Inventory Turnover Ratio 8.41

1916.84

10.92

2430.31

8.15

8403.29

1.67

25131.83

2.15

INTERPRETATION The table IV-1 reveals that the inventory turnover ratio showing slightly increasing trend it was in the year 2009-2010 as

1.67% and than a sudden increasing in the previous year 2006-2007 as 8.41%, 10.92%, 8.15% and 2010-2011 2.15% respectively.

CHART-IV-1 INVENTORY TURNOVER RATIO

Inventory Turnover Ratio 12 10 8 6 4 2 0 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011 Inventory Turnover Ratio

WORK IN PROGRESS

Average collection period is computed using the following formula. Work in progress = Sales / Average work in progress

TABLE-IV-2 WORK IN PROGRESS

Year

Sales

Average Work in progress

Work in Progress

20062007 20072008 20082009 20092010 20102011

32,742.2 9 28,341.9 8 20,692.5 9 23,283.0 8 59,667.6 2

107.82

303.67

94.01

301.19

51.22

403.99

66.92

347.92

191.27

311.95

INTERPRETATION

The table IV-2 reveals that the work in progress Turnover ratio showing slightly increasing trend it was in the year 2008-2009 as 403.99 and decreasing during the year 2007-2008.

CHART-IV-1 WORK IN PROGRESS

Work in Progress 450 400 350 300 250 200 150 100 50 0
20 06 -2 20 007 07 -2 20 008 08 -2 20 009 09 -2 20 010 10 -2 01 1

Work in Progress

STOCK HOLDING DAYS

Stock Holding Days is computed using the following formula. Stock Holding Days = No. of days in a year / Inventory turn over Ratio

TABLE-IV-3 STOCK HOLDING DAYS

Year 20062007 20072008 20082009 20092010 20102011

No. of days in a year 365

Inventory Turnover Ratio 10.79

Stock Holding Days 33.82

365

14.76

24.72

365

8.51

42.89

365

2.77

131.76

365

2.37

154.00

INTERPRETATION The table IV-3 reveals that the Stock holding days increasing trend it was low in year 2007-2008 as 24.72 days and

sudden increasing in the next year 2008-2009 as 42.89 days and from that it raised to 154 days in the period of 2010-2011.

CHART-IV-3 STOCK HOLDING DAYS

Stock Holding Days 180 160 140 120 100 80 60 40 20 0 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011 Stock Holding Days

PERCENTAGE OF WORK IN PROGRESS

Percentage of work in progress is computed using the following formula.

Percentage of work in progress = Work in progress / Inventory

TABLE-IV-4 PERCENTAGE OF WORK IN PROGRESS

Year 20062007 20072008 20082009 20092010 20102011

Work in progress 215.64

Inventory

% of Work in progress 0.03

6068.04

18.03

3833.69

0.04

102.44

4860.62

0.02

133.84

16806.59

7.96

282.54

50263.66

7.61

INTERPRETATION

The table IV-4 reveals that the work in progress in total inventory showing slightly increasing trend it was high in the year 2010-2011 as 7.96%

CHART-IV-4 PERCENTAGE OF WORK IN PROGRESS

300

250

200 Work in progress 150 % of Work in progress

100

50

0
08 09 10 -2 0 20 10 07 -2 0 -2 0 -2 0 09 06 07 08 -2 0 11

20

20

20

20

PERCENTAGE OF INVENTORY IN CURRENT ASSET

Percentage of inventory in current asset is computed using the following formula.

Percentage of inventory in current asset = Inventory / current asset

TABLE-IV-5 PERCENTAGE OF CURRENT ASSET

Year

Inventor y

Current asset

% of inventory in current asset 0.03

20062007 20072008 20082009 20092010 20102011

215.64

6068.04

18.03

3833.69

0.04

102.44

4860.62

0.02

133.84

16806.59

7.96

282.54

50263.66

7.61

INTERPRETATION

The table IV-5 reveals that the total inventory in current asset showing slightly increasing trend it was high in the year 20102011 as 0.82% and decreasing during the previous 4 years 20062011 as 0.65%, 0.38%, 0.60% and 0.72% respectively.

CHART-IV-5 PERCENTAGE OF CURRENT ASSET

% of inventory in current asset 9 8 7 6 5 4 3 2 1 0

20 06 -2 20 007 07 -2 20 008 08 -2 20 009 09 -2 20 010 10 -2 01 1

% of inventory in current asset

PERCENTAGE OF INVENTORY IN TOTAL ASSET

Percentage of inventory in total asset is computed using the following formula.

Percentage of inventory in total asset = Inventory / total asset

TABLE-IV-6 PERCENTAGE OF TOTAL ASSET Inventor y % of inventory in total asset 0.31

Year 20062007 20072008 20082009 20092010 20102011

Total asset

6068.04

19537.4

3833.69

21792.17

0.17

4860.62 16806.5 9 50263.6 6

21853.73

0.22

50963.47

0.32

100551.24

0.49

INTERPRETATION

The table IV-6 reveals that the total inventory in total asset showing slightly increasing trend it was high in the year 20102011 as 0.49% and decreasing during the previous 4 years 20062011 as 0.31%, 0.17%, 0.22% and 0.32% respectively.

CHART-IV-6 PERCENTAGE OF TOTAL ASSET

120000 100000 80000 60000 40000 20000 0

20 06 20 2 007 07 20 2 00 08 8 20 2 009 09 20 2 010 10 -2 01 1

Inventory Total asset % of inventory in total asset

PERCENTAGE OF INVENTORY IN NET WORKING CAPITAL

Percentage of inventory in net working capital is computed using the following formula.

Percentage of inventory in net working capital = Inventory / net working capital

TABLE-IV-7 PERCENTAGE OF NET WORKING CAPITAL

Year

Inventor y

% of Net working inventory in capital net working capital 7731 0.78

20062007 20072008 20082009 20092010 20102011

6068.04

3833.69

8166

0.46

4860.62 16806.5 9 50263.6 6

6338

0.76

13209

0.81

22488

2.23

INTERPRETATION

The table IV-7 reveals that the total inventory in net working capital showing slightly increasing trend it was high in the year 2010-2011 as 2.23% and decreasing during the previous 4 years 2006-2011 as 0.78%, 0.46%, 0.76% and 0.71% respectively.

CHART-IV-7 PERCENTAGE OF NET WORKING CAPITAL

% of inventory in net working capital 2.5 PERCENTAGE 2 1.5 1 0.5 0

20 06 20 2 00 07 7 20 2 00 08 8 20 2 00 09 9 20 2 01 10 0 -2 01 1

% of inventory in net working capital

YEAR

CURRENT RATIO

Current ratio is measuring the liquidity current ratio is the ratio of total current asset to total current assets to total current liabilities. Current ratio = Current Assets / Current Liabilities

TABLE-IV-8 CURRENT RATIO

Year 20062007 20072008 20082009 20092010 20102011

Current Asset 9215

Current Liabilities 4916

Current Ratio 1.87

9983

3231

2.51

8117

4810

1.68

23258

16422

1.41

38942

53687

0.72

INTERPRETATION The table IV-7 reveals that the Current Asset ratio showing slightly increasing trend in the year 2007-2008 as 2.51% and decreasing during the year of 2008-2009 as 1.68%, then a sudden decreasing in the year 2010-2011 as 0.72%.

CHART-IV-8 CURRENT RATIO

Current Ratio 3 2.5 PERIOD 2 1.5 1 0.5 0

20 06 -2 20 00 07 7 -2 20 00 08 8 -2 20 00 09 9 -2 20 01 10 0 -2 01 1

2.51 1.87 1.68 1.41 0.72 Current Ratio

YEAR

TREND IN SALES TABLE-IV-9

Year 20062007 20072008 20082009 20092010 20102011

Sales 32,742.29

X -2

Y -65,484.58

X2 4

28,314.98

-1

-28,314.98

20,692.59

23,283.08

-23,283.08 119,335.24

59,667.62 EY=164,70 0.56

EY=48,818. 76

EY2=10

Y = a + bx A = Ey/N = 164,700.56 / 5 = 32,940.11 B = EXY/EX2 = 48,818.76/10 = 4,881.88

2007 = = 2008 =

32,940.11 + 4,881.88 (-2) 23,176.35 = 32,940.11 + 4,881.88 (-1)

28,058.23

2009 =

32,940.11 + 4,881.88 (0)

32,940.11

2010 = 2011 =

32,940.11 + 4,881.88 (1)

37,821.99 = 32,940.11 + 4,881.88 (2)

42,703.87

Forecasted Sales in the year 2012 Y2012 = = 32,940.11 + 4,881.88 (3)

47,585.75

INTERPRETATION Dharani Sugars and Chemical Limited of Sales trend in 2006-2007 decreased Rs. 23,176.35 next year of Sales position its increase on 2011 42703.87. Future Sales on 2012 increase Rs. 47.585.75 the over all financial position satisfactory.

CHART-IV-9 TREND IN SALES

TREND IN SALES
70,000.00 60,000.00 SALES RATIO 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011 YEAR Sales

TREND IN INVENTORY TABLE-IV-10

Year 20062007 20072008 20082009 20092010 20102011

Inventory 6,068.04

X -2

Y -12,136.08

X2 -4

3,833.69

-1

-3,833.69

-1

4,860.62 16,806.5 9 50,263.6 6 EY=81,83 2.6

16,806.59 100,527.32

EY=101,36 4.14

EY2=10

Y A B

= = =

a + bx Ey/N = 81,832.6 / 5 = 16,366.52 EXY/EX2 = 101,364.14/10 = 10,136.41

2007 = = 2008 = 2009 = =

16,366.52 + 10,136.41 (-2) -3,906.6 = 16,366.52 + 10,136.41 (-1)

6,230.11 16,366.52 + 10,136.41 (0) 16,366.52

2010 = 2011 =

16,366.52 + 10,136.41 (1)

26,502.93 = 16,366.52 + 10,136.41 (2)

36,639.34

Forecasted Sales in the year 2012 Y2012 = = 16,366.52 + 10,136.41 (3)

46,775.75

CHART-IV-10 TREND IN SALES

TREND IN INVENTORY
60000 50000 INVENTORY RATIO 40000 30000 20000 10000 0 2006- 2007- 2008- 2009- 20102007 2008 2009 2010 2011 YEAR 16,806.59 6,068.04 4,860.62 3,833.69 Sales 50,263.66

COMPARATIVE BALANCE SHEET Comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items. Thus while in a single balance sheet the emphasis in on present position. It is on change in the comparative balance sheet. Such a balance sheet is very useful in studying the trend in an enterprise.

COMPARATIVE BALANCE SHEET OF COMPANY FOR THE YEAR ENDING DECEMBER 31ST 2007 AND 2008.

Year ending 31st December 2007 Assets Current assets Cash and banks Debtors Stock Loan and advance Total Current Assets Profit and loss a/c Fixed Assets Total Assets Currents Liabilities Source of funds Total Liabilities 606.01 1376.10 6068.04 1165.77 9215.92 704.63 10327.48 20242.03 1484.83 18757.20 20242.03 3319.68 1621.72 3833.69 1208.23 9982.32 11808.85 21792.17 1817.15 19975.02 21792.17 2008

Increase /December (amounts)

Increase /December (percentage)

2713.67 245.62 2234.35 42.46 767.4 1489.37 1550.14 332.32 1217.8 1550.14

447.79 17.83 36.82 3.64 8.32 14.45 7.65 22.38 6.49 7.65

INTERPRETATION

The shareholders fund has been decreased by 6.49% in the year 2007-08 when compared to 2006-2007. It includes mostly reduced reserve and surplus. The loan fund has been decreased by 3.64% in the year 2007-2008 when compared to 2006-2007. The total fixed asset has been increased by 14.45% in the year 2007-2008 when compared to 2006-07. It indicates the sale the assets one part. The total current assets decreased by 8.32% in the year 2007-2008 when compared to 2006-2007. It indicates which cannot by used to repay the current liabilities. But sundry debtors have been decreased by 17.83% in the year 2007-2008. When compared to 2006-2007 and cash and bank balance has been decreased by 447.79% in the year 2007-2008. When compared to 2006-2007. The current liability has been decreased by 22.38% in the year 2007-2008, when compared to 2006-2007.

COMPARATIVE BALANCE SHEET OF COMPANY FOR THE YEAR ENDING DECEMBER 31ST 2008 AND 2009.

Year ending 31st December 2008 Assets Current assets Cash and banks Debtors Stock Loan and advance Total Current Assets Fixed Assets Total Assets Currents Liabilities Source of funds Total Liabilities 3319.68 1621.72 3833.69 1208.23 9983.32 11808.85 21792.17 1817.15 19975.02 21792.17 463.91 995.23 4860.62 1797.39 8117.15 13736 21853.73 1778.72 20075.01 21853.73 2009

Increase /December (amounts)

Increase /December (percentage)

2855.77 626.49 1026.93 589.16 1866.17 1927.73 61.56 38.43 99.99 61.56

86.05 38.63 26.78 48.76 18.69 16.32 0.28 2.11 0.50 0.23

INTERPRETATION

The shareholders fund has been decreased by 0.50% in the year 2008-09 when compared to 2007-2008. The loan and advance has been increased by 48.76% in the year 2007-08 when compared to 2006-2007. The total fixed assets have been increased by 16.32% in the year 2008-09 when compared to 2008-2009.

It indicate the purchased of new asset. The total current asset increased 18.69% in the year 2008-2009. When compared to 2007-2008. It indicates which can be used to repay the current liabilities. But an inventory has been decreased by 26.78% in the year 2008-09 when compared to 2007-2008. The current liability has been decreased by 2.11% in the year 2008-2009 when compared to 2007-2008.

COMPARATIVE BALANCE SHEET OF COMPANY FOR THE YEAR ENDING DECEMBER 31ST 2009 AND 2010.

Year ending 31st December 2009 Assets Current assets Cash and banks Debtors Stock Loan and advance Total Current Assets Fixed Assets Total Assets Currents Liabilities Source of funds Total Liabilities 463.91 995.23 4860.62 1797.39 8117.17 13736.58 21853.73 1778.72 20075.01 21853.73 3137.86 822.52 16806.59 2451.31 23258.28 27705.19 50963.47 10049.11 40914.36 50963.47 2010

Increase /December (amounts)

Increase /December (percentage)

2713.95 172.71 11945.97 653.92 15141.11 13968.61 29109.74 8270.39 20839.35 29109.74

585.01 17.35 245.77 36.38 186.53 101.68 133.20 464.96 103.80 133.20

INTERPRETATION

The shareholders fund has been decreased by 103.80% in the year 2009-10 when compared to 2008-2009. The loan and advance has been increased b 26.38% in the year 2009-10 when compared to 2008-2009. The total fixed assets have been increased by 101.68% in the year 2009-10 when compared to 2008-2009.

It indicates the purchase of new assets. The total current assets increased by 186.53% in the year 2009-10 when compared to 2008-2009. Cash and bank balance has been increased 585.01% in the year 2009-2010 when compared to 2008-2009. The current liabilities have been increased by 464.96% in the year 2009-10 when compared to 2008-2009.

COMPARATIVE BALANCE SHEET OF COMPANY FOR THE YEAR ENDING DECEMBER 31ST 2010 AND 2011.

Year ending 31st December 2010 Assets Current assets Cash and banks Debtors Stock Loan and advance Total Current Assets Fixed Assets Total Assets Currents Liabilities Source of funds Total Liabilities 3177.86 822.52 16806.59 2451.31 23258.25 27705.19 50963.47 10049.11 40914.36 50963.47 3951.19 2598.70 50263.66 4617.50 61341.05 39120.19 100551.24 38942.14 61609.10 100551.24 2011

Increase /December (amounts)

Increase /December (percentage)

773.33 1776.18 33457.07 2166.19 38172.77 11415 49587.77 28893.03 20694.74 49587.77

24.33 215.94 199.07 88.36 164.12 41.20 97.30 287.51 50.58 97.30

INTERPRETATION

The shareholders fund has been decreased by 50.58% in the year 2010-11 when compared to 2008-2009. The loan and advance has been increased b 88.36% in the year 2010-11 when compared to 2008-2009. The total fixed assets have been decreased by 41.20% in the year 2009-10 when compared to 2008-2009.

It indicates the purchase of new assets. The total current assets have been decreased by 164.12% in the year 2010-11 when compared to 20082009. Sundry debtors have been increased by 215.94% in the year 2010-11 when compared to 2008-2009. The current liabilities have been decreased by 287.51% in the year 2010-2011 when compared to 2008-2009.

INDUSTRIAL ALCOHOL
Industiral Alchohol (Qty. in Ltrs) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 8,30,174 98,83,523 1,468 1,04,60,887 2,50,442 95,03,284 2,059 95,25,923 2007-2008 2008-2009 Increase/Decr ease -5,79,732 -3,80,239 591 -9,34,964

Percentage

-69.83 -3.84 40.25 -8.93

900 2,50,442 2,441.82

900 2,24,844 2,377.76

-25,598 -64.06

-10.22 2.62

POWER
Power (in Units) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 2007-2008 70,07,36,000 4,30,20,800 2008-2009 6,20,32,575 3,35,28,800 Increase/Decr ease -87,03,425 -94,92,000 Percentage -12.30 -22.06

2,77,15,200 1255.39

2,85,03,775 1,027.25

7,88,575 -228.14

2.84 -18.17

STOCK POSITION 2009-2011 SUGAR

Sugar (Qty. in Quintals) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 2009-2010 2,83,097 14,36,090 10,46,299 2010-2011 6,72,888 21,30,010 18,83,099 Increase/Decr ease 3,89,791 6,93,920 8,36,800 Percentage 137.68 48.32 79.97

6,72,888 18,112.28

9,19,799 52,262.36

2,46,911 34,150.08

36.69 188.54

MOLASSES
Molasses (Qty. in MTs) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 2009-2010 8,061 71,731 18,877 2010-2011 18,084 63,715 Increase/Decr ease 10,023 -8,016 Percentage 124.33 -11.17 -

42,831 18,084 641.55

49,759 32,040 -

6,928 13,956 -

16.17 77.17 -

INDUSTRIAL ALCOHOL
Industiral Alchohol (Qty. in Ltrs) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 2,24,844 89,33,333 939 89,74,253 1,81,785 1,50,59,065 574 1,42,29,140 2009-2010 2010-2011 Increase/Decr ease -43,059 61,25,732 365 52,54,887

Percentage

-19.15 68.57 38.87 58.55

1,200 1,81,785 2,594.83

1,200 10,09,936 4,248.10

8,28,151 1,653.27

455.56 63.71

POWER
Power (in Units) Opening Stock Production Normal Loss Sales Less return Own Consumption Closing Stock Sales inclusive of Excise Duty 2009-2010 8,42,19,600 5,03,93,300 2010-2011 12,14,28,285 7,65,36,600 Increase/Decr ease 3,72,08,685 2,61,43,300 Percentage 44.18 51.87

3,38,26,300 1,555.64

4,48,91,685 3,062.53

1,10,65,385 1,50,689

32.7 96.86

CHAPTER IV 11 STOCK POSITION 2007-2011

Closing Stock Sugar Molasses Industrial 2.50 Alcohol Power 2.24 1.81 1.00 2007-2008 2.16 1.66 2008-2009 2.83 8.06 2009-2010 6.72 1.80 2010-2011 9.19 3.20

(Source: Secondary Data)

INTERPRETATION Sugar
During 2007-2008 and 2008-2009 the sugar sales is more as compare to 2009-2010 and 2010-2011. So the inventory is less during the period.

Molasses

During 2010-2011 the distillery has expanded from 30 KL to 60KL unit so the stock position has improved.

Industrial alcohol
Due to capacity increase the production and stock has increased.

CHAPTER IV 11

STOCK POSITION 2007-2011

10 9 8 7 6 5 4 3 2 1 0 2007-2008 2008-2009 2009-2010 2010-2011

Sugar

Molasses industrial alcohol

Power

CHAPTER V

FINDINGS

The inventory turnover ration was increase in the year 2007-2008 as 14.76

The work in progress turnover ration was increase in the year 2008-2009 405.72

The stock holding days increasing year by year, current year 2011-2012 holding day is 154 days

The work in progress in total inventories was increased in the year 20112012 as 7%

The inventory in current assets was increase in the year 2011-202 as 81%

The inventory in total asset was increase in the year 2011-2012 as 49%

The inventory in networking capital was increase in the year 2011-2012 as 223%

The trend analysis for inventory was increased in the year 2010 as 26502.

The comparative balance sheet shows the percentage of decrease for two years 2011-2012 of assets and liabilities. The total current asset decreased by 106.53% and 164.12% in the year 2011-2012. Fixed asset decreased by 41.20% reserve and surplus were decreased 50.58.

SUGGESTIONS

The company work in progress turnover ration level is decreased in current year so it is better to improve their work in progress in the next year.

The company stock holding days is increasing by year. So if should be controlled.

The inventory also depends upon import and export policy.

Uniform of release order from government is essential.

To reduce the stores stock value will help to the company for working capital.

To sugar industry the stock maintenance is not in the hands of company as in the hands of government. So the government has to take proper step to safeguard the sugar industry.

Comparative balance sheet shows the increase or decrease percentage of the assets and liabilities for two year. The company must increase the current assets then current liabilities.

CONCLUSION

The company is one of the leading manufacturers in while sugars. The Research and development team of the company has proved to the best in the company development and each year in introducing new techniques.

The company advised to maintain of the inventory turnover normally. Its suggests improving their work in progress in coming year and also control it stock holding days. The most common tools of inventory management in trend analysis and inventory turn over ration and have been applied in this study. In Todays condition there is considerable scope for improving inventory

management in Dharani Sugars and Chemical Limited. Finally it will improve the working capital of the company and reducing inventory stock holding days.

BIBLIOGRAPHY

Financial Management Publication) Financial Management Publication) Financial Management Publication)

I.M.Pandey 9th Edition (Vikas Khan & Jain (Margham

T.S.Reddy & Murthy (Margham Chuna Walla, Patel

Production&Operation Management

3rd Edition (Himalaya Publication) Material Management Publication) Material Management Sons Operation Management Control Publishing) Financial Management WEBSITES www.google.com www.yahoo.com Rajiv Srivastava & Anil Misra Biswajit Banerjee (Wheeler M.M.Varma, Sultan Chand & A.K.Datta, 2nd Edition (Himalaya

APPENDIX BALANCE SHEET AS ON 31ST MARCH

Particular A. SOURCES OF FUNDS Shareholders Funds Share Capital Reserve & Surplus Loan Funds Secured Loans Unsecured Loans Total B.APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation Net Block Capital-Work in Progress Investments Deferred tax asset Current Assets, Loan & Advances Inventors Sundry Debtors Cash and Bank Balances Loan and Advances 7 8 9 10 6.068.04 1,376.10 606.01 1,165.77 9,215.92 Less: Current liabilities and Provisions Net Current Assets Profit and Loss Account 11 1,484.83 7,731.09 704.63 3,833.69 1,621.72 3,319.68 1,208.23 9,983.32 1,817.15 8,168.17 6 5 14,666,.2 2 6,426.14 8,240.08 287.77 8,527.85 515.25 791.50 17,135.1 2 6,935.93 10,199.1 9 302.91 10,502.10 515.25 1,278.38 3 4 13,334.38 1,287.69 14,622.0 7 18,757.2 0 10,410.5 3 4,420.33 14,830.86 19,975.02 1 2 2,538.98 1,596.15 4,135.13 2,538.98 2,605.18 5,144.16 Schedu le No Rs.Laks 2006 Rs.Laks Rs.Laks 2007 Rs.Laks

Total Notes on Accounts 18 -

18,757.2 0 -

19,975.02

BALANCE SHEET AS ON 31ST MARCH

Particular A. SOURCES OF FUNDS Shareholders Funds Share Capital Reserve & Surplus Loan Funds Secured Loans Unsecured Loans Total B.APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation Net Block Capital-Work in Progress Investments Deferred tax asset Current Assets, Loan & Advances Inventors Sundry Debtors Cash and Bank Balances Loan and Advances 7 8 9 10 4,860.62 995.23 995.23 1,797.39 8,177.15 Less: Current liabilities and Provisions Net Current Assets 11 1,778.72 6,338.43 16,806.59 822.52 3,177.86 2,451.31 23,258.28 10,049.11 13,209.11 6 5 17,803.83 7,485.79 10,318.04 1,223.00 11,541.04 515.25 1,680.29 20,810.33 8,172.65 12,637.68 14,006.79 26,644.47 520.42 540.30 3 4 13,169.64 1,559.11 15,728.75 20,075.01 29,630.18 6,240.40 35,870.58 40,914.36 1 2 2,538.98 1,807.28 4,346.26 2,538.98 2,504.80 5,043.78 Schedu le No Rs.Laks 2008 Rs.Laks Rs.Laks 2009 Rs.Laks

Profit and Loss Account Total Notes on Accounts 18 20,075.01 40,914.36

BALANCE SHEET AS ON 31ST MARCH

Particular A. SOURCES OF FUNDS Shareholders Funds Share Capital Share Application Money Reserve & Surplus Deferred Tax Liability Loan Funds Secured Loans Unsecured Loans Total B.APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation Net Block Capital-Work in Progress Investments Deferred tax asset Current Assets, Loan & Advances Inventors Sundry Debtors Cash and Bank Balances Loan and Advances 7 8 9 10 16,806.5 9 822.52 3,177.86 2,451.31 23,258.2 8 Less: Current liabilities & Provisions 11 10,049.1 1 50,263.6 6 2,598.70 3,951.19 4,617.50 61,431.0 5 38,942.1 4 6 5 20,810.3 3 8,172.65 12,637.6 8 14,006.7 9 26,644.47 520.42 540.30 45,001.7 5 9,424.18 35,577.5 7 3,022.20 38,599.77 520.42 3 4 29,630.1 8 6,240.40 35,870.58 40,914.36 42,639.1 3 5,780.72 48.419.85 61,609.10 2 1 2,538.98 2,504.80 5,043.78 2,538.98 1,600.11 6,612.36 10,751.45 2,437.80 Schedul e No Rs.Laks 2010 Rs.Laks Rs.Laks 2011 Rs.Laks

Net Current Assets Profit and Loss Account Total

13,209.1 1

22,488.9 1

40,914.36

61,609.10

Notes on Accounts

18