DSCL

CONTENTS
CHAPTER TITLE PAGE NO

NO
1 Executive summery 1-2
2 Introduction
Industry Profile
Company Profile 3-17
Organization Structure
3 Functianal Department

Production Department 33-36
Personal Department
Marketing Department
Finance and Account Department
4 Mc Kinsey 7-s Model 37-38
5 SWOT Analysis

39-42
6 Finding suggestion

Conclusions 43-44
7 Learning Experience
45-59
8 Bibliography
60-69
Institute of Management Studies, Davangere 1

Institute Of Management Studies Davangere
Executive summary
The Davanagere Sugar Company Limited (DSCL), a joint sector undertaking promoted
by KSIIDC, KAIC and the agriculturists of DavanagereTaluk was incorporated in the year 1970
and commenced commercial operations in October 1974 with an installed capacity of 1250 TCD.
The factory is situated at Kukkuwada village, about 18 kms away from Davangere city
(DavangereTaluk/District). in the year 1995, Shamanur Group holds substantial and controlling
interest in the Company and the day-to-day affairs are managed by Sri. Ganesh, Managing
Director. The first chapter of part A gives the industry profile of the sugar industry. The second
chapter explains about the company profile which includes the different services, work flow,
competitor’s information and future prospects of the company. The third chapter explains the
McKinsey’s 7s frame work with special reference to organization under study. The fourth chapter
deals with the SWOT analysis of the organization as a whole. The fifth chapter gives the analysis
of the financial statements using the ratio analysis. Finally the sixth chapter gives the researchers
learning experience during the project tenure.
The Part B of the report gives detail about the project undertaken. The projecttitled “A
study on “working capital management”davangereSugar Company with reference to Karnataka
state”.
The study can be considered to explore the variables affecting the business behavior. The
study has an insight in understanding the various attributes of the product as well as other factor
which influences business behavior and effective formulation of marketing strategy with respect
to working capital management.
The study on working capital management with respect to sugar industry was insight by
my guide at the organization to understand the business, which in a very difficult position.
To conclude, I agree that the study has been experience to me, which highlighted all
theoretical concepts of my study. The suggestions may be helpful to DSCL to overcome problems
they are facing
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PART-A
1. INDUSTRY PROFILE
1.1 General Introduction
It is thought that cane sugar was first used by man in Polynesia from where it spread to
India. In 510BC the emperor darius of what then Persia invaded India where he found “the reed
which gives honey without bees”. The secret of cane sugar, as with many other of man’s
discoveries, was kept a closely guarded secret whilst the finished product was exported for a rich
profit.
It was the major expansion of the Arab people in the seventh century AD that led to a breaking of
the secret. When they invaded Persia in 642 AD they found sugar cane being grown and learn
how sugar was made. As their expansion continued they established sugar production in other
lands that they conquered including North Africa and Spain.
1.2 The Indian Sugar Industry
India is the largest consumer and second largest producer of sugar in the world. The Indian sugar
industry is the second largest agro-industry located in the rural India. It is the second largest agro-
processing industry in the country after cotton textiles. With 566 operating sugar mills in different
parts of the country, Indian sugar industry has been a focal point for socio-economic development
in the rural areas. About 65 million sugarcane farmers and a large number of agricultural laborers
are involved in sugarcane cultivation and ancillary activities, constituting 7.5% of the rural
population. Besides, the industry provides employment to about 2 million skilled/semi skilled
workers and others mostly from the rural areas.
India is the only country in the world that produces plantation white sugar. All other
countries are producing either raw sugar or refined sugar or both. Thus the processing capacities
are quite different and also are the quality of sugar.
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Sugar production commenced in 1920’s but it got industry status in late 20’s/early 30’s
when India had 29 sugar mills producing just 100000 tons of sugar sought tariff protection. Sugar
production picked up under the Sugar Industry Protection Act passed in 1932 and country became
self sufficient in 1935. Also cane-pricing act was enforced to provide good cane price to farmer.
This was followed by land reforms putting ceiling on land holdings to protect small farmers,
formation of cane grower co-operatives and setting up of sugar mills jointly with farmers called as
co-operative mills on ownership and sharing basis. Today this sector produces 60% of country’s
production.
The industry not only generates power for its own requirement but surplus power for
export to the grid based on by-product-Bagasse. It also produces ethyl alcohol, which is used for
industrial and potable uses, and can also be used to manufacture Ethanol, an ecology friendly and
renewable fuel for blending with petrol.
The sugar industry in the country uses only sugarcane as input; hence sugar companies
have been established in large sugarcane growing states like Uttar Pradesh, Maharashtra,
Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh. In sugar year (SY) 2006-2007, sugar
production in the country is provisionally estimated at 283.28 lakh tones which were 194.94 lakh
tones in the year 2005-2006. The production of sugar was 271 lakh tones during the year 2006-07.
During the current season (2007-08) the production is 265 lakh tones.
The center original sugar production estimate of 220 lakh tones for 2008-09. The Government de-
licensed the sugar sector in August 1998, thereby removing the restrictions on expansion of
existing capacity as well as on establishment of new units, with the only stipulation that a
minimum distance of 15kms would continue to be observed between an existing sugar mill and a
new mill. There are 566 installed sugar mills in the country with a production capacity of 180 lakh
Million tones of sugar, of which only 453 are working. These mills are located in 18 states of the
country. Around 315 of the total installed mills are in the co-operative sector, 189 in the private
sector and 62 in the public sector.
1.3 Introduction of Sugar
Sugars are a major form of carbohydrates and are found probably in all green plants. They
occur in significant amounts in most fruits and vegetables. There are three main simple sugars
such as sucrose, fructose and glucose. Sucrose is in fact a combination of fructose and glucose
and the body quickly breaks down into these separate substances.
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1.4 History
The discovery of sugarcane, from which sugar as it is known today, is derived dates back
unknown thousands of years. It is thought to have originated in New Guinea, and was spread
along routes to Southeast Asia and India. The process known for creating sugar, by pressing out
the juice and then boiling it into crystals, was developed in India around 500 BC.
Its cultivation was not introduced into Europe until the middle-ages, when it was brought
to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to
thrive in a most favorable climate.
It was not until the eighteenth century that sugarcane cultivation was began in the United
States, where it was planted in the southern climate of New Orleans. The very first refinery was
built in New York City around 1690; the industry was established by the 1830s. Earlier attempts
to create a successful industry in the U.S. did not fare well; from the late 1830s, when the first
factory was built. Until 1872, sugar factories closed down almost as quickly as they had opened.
It was 1872 before a factory, built in California, was finally able to successfully produce sugar in
a profitable manner. At the end of that century, more than thirty factories were in operation in the
U.S.
Manufacturing Process and Technology
Sugar (sucrose) is a carbohydrate that occurs naturally in every fruit and vegetable. It is a
major product of photosynthesis, the process by which plants transform the sun's energy into
food. Sugar occurs in greatest quantities in sugarcane and sugar beets from which it is separated
for commercial use. The natural sugar stored in the cane stalk or beet root is separated from rest
of the plant material through a process known as refining.
For sugarcane, the process of refining is carried out in following steps.
Pressing of sugarcane to extract the juice.
Boiling the juice until it begins to thicken and sugar begins to crystallize.
Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar
Shipping the raw sugar to a refinery where it is washed and filtered to remove remaining non-
sugar ingredientsandcolor.
Crystallizing, drying and packaging the refined sugar.
For the sugar industry, capacity utilization is conceptually different from that applicable to
industries in general. It depends on three crucial factors the actual number of ton of sugarcane
crushed in a day, the recovery rate which generally depends on the quality of the cane and actual
length of the crushing season
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Since cane is not transported to any great extent, the quality of the cane that a factory receives
depends on its location and is outside its control. The length of the crushing season also depends
upon location with the maximum being in south India.
Sugarcane in India is used to make sugar, khandsari or gur. However, sugar

products produced worldwide are divided into four basic categories: granulated, brown,
liquid sugar and invert sugar.
SUGAR DEMAND:
Demand for sugar increased with the growing world population, and even faster, perhaps
because improving technology made its production cheaper. In the 1830's when the world
population was 1,000 million, sugar production was 800,000 tones a year. By 1900 it was 8
million tones. By the mid-1970 with a world population in excess of 4,000 million, world
production of sugar was about 80 million tones, almost equally divided between sugar cane and
beet. Today annual production stands at 115,000,000 tones.
1.5 Industry Structure
Indian sugar industry can be broadly classified into two sub sectors, the organized sector I
sugar factories and the unorganized sector i.e., manufacturers of traditional sweeteners like guru
and khandsari. The letter is considered to be a rural industry and enjoys much greater freedom
than sugar mill.
The production of traditional sweeteners sugar and khandsari is quite substantial.

Though the trends indicate a progressive shift from traditional sweeteners to white sugar
over the years, they still account for about 37% of total sweetener consumption in India.
The breakup of consumption of sugar, guru and khandsari is as given below.
Since the sugar industry in the country uses only sugarcane as an input , sugar
companies have been established in large cane growing states like Uttar Pradesh,
Maharashtra, Tamil Nada, Karnataka, Punjab, Gujarat, Uttar Pradesh leads the tally by
contributing 24% of the country’s total sugar production and Maharashtra stands next
with 20% contribution .
The formers co-operatives own and operate the largest chunk of the industry’s total
capacity. They are concentrated primarily in Maharashtra and eastern Uttar Pradesh the
largest number of sugar companies in the private sector is located in southern India, in the
states of Tamil Nadu, Andhra Pradesh and Karnataka.
6
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. Besides 136 units in the private sector
various stages of implementation. A few such units are under implementation in the co-
operative sector as well.
1.6 Government policy

Sugar is a controlled commodity in India. It is covered under the purview of the
essential commodities act,1955. The government controls sugar capacity additions
through industrial licensing, determines the price of the major in put which sugarcane,
decides the quantity that can be sold in the open market, fixes the prices of the levy quota
sugar, etc.
Government control over all aspects of the production and sale of sugar extends to
the level of wholesalers in the distribution chain. All sugar wholesalers need to obtain a
license issued by the government before they can begin to operate. Also they should
confirm to government notifications for the amount of inventories they can maintain the
government policies for the sugar industry are broadly classified in the following section
for the understanding.
Licensing polices: Till recently sugar is used to be amongst the 9 industries under
licensing provision. The major criterions for issuing new licenses were as follows.
New sugar factories should have minimum economic capacity of 2500 TDC with
no maximum limit on capacity. However In industrially backward areas, co- operative
and public sector new units are allowed with an initial capacity of 1750 TDC subject to
the condition that the unit would expand their capacities to 2500 TDC with a period of
years of going into production.
New sugar factories are permitted subject to the minimum distance of 15
kilometers between proposed new sugar factory and an existing / already licensed sugar
factory.
Other things being equal, preference in licensing I given to proposals from the co-
operative sector, private sector, etc.In that order.
The pat polices have helped in planned development of sugar industry into
accounts economic size and availability of sugarcane and simultaneously avoiding
unhealthy competition. The mushroom growth of co-operatives, whose performance is
worsening of late, is also an offshoot of these policies.
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Further, a large number of parties have obtained licenses during 1990s but are not
implementing them due to several reasons, leading to a blocking of the entry of other
interested parties. To tackle this problem, the government has rendered validity of letter
of intent (LOI) from three years to one year. The sugar industry is unlicensed since august
1998 and interested party / person I allowed to set up a sugar mill in the country provided
they satisfy few conditions. The new sugar factory is at a minimum distance of 15
kilometers from an existing already licensed sugar cane factory. No incentive will be
provided and new units have to adhere to levy quota regulations from first year of
operation.
1.7 Current Position of Sugar Industry/ Scenario in India
However the likely sustenance of firm global prices would permit export of around
20lakhs Million Tone of sugars Per annum for the next two sugar season. There by easing the
pressure domestic stocks.
International
Sugar prices likely to remain firm over the medium term for most of the late 1990s and
clearly 2000 prices in international market remained in the range of Us$ 200-250 MT but 2004
prices have firmed up and are currently at around Us$ 450 MT.
Key Success Factors
1. Cane development activities.

2. Level of integration.
3. Capital structure.
4. Regulatory risks.
Problem of Sugar Industry
1. Weak representatives.
2. Poor and patronage based management system at all levels.
3. Lack of accountability.
4. Excessive deduction and taxation of farmer’s income.
5. Delayed payment to farmers.
6. Inefficiency in service provisions and payment.
7. Poor accountability system.
8
8. Delayed payment to farmers.

9. Inefficiency in service provisions and payment.
10. Poor accountability systems.
11. Poor marketing and distribution policy.
12. Negative effects of regional trading system.
Sugarcane Availability
Sugarcane is the main raw material for sugar production. Sugar can also be
produced by “sugar beet”. About 70% of world sugar is produced by sugarcane and
remaining by “sugar beet”. An Indian sugar factories production is based only on
sugarcane is a yearly crop. There are varieties of sugars of sugars seeds available to
farmers which differ from their sugar content and time taken for growing. As growing of
sugarcane requires abundant water, major areas which grow sugarcane are having
sufficient irrigation facilities.
Sugarcane occupies about 2.7% of the total cultivated areas and it is one of the most
important cash crops in the country. In INDIA, sugarcane is utilized by sugar mills as well as by
traditional sweeteners like sugar and khandsari producers.
Indian sugar companies, have sufficient sugarcane for production of sugar. Strongly established
companies, facilities of irrigation, levy restrictions of government on establishment and
expansion, market opportunities, strong demand for by products encouraging farmers to grow
sugarcane. Today sugarcane I characterized as an energy crop.
Brazil and India Is the largest sugar producing countries followed by china, USA,
Thailand, Australia, Mexico, Pakistan, France and Germany. All thee countries are producing
more sugar than they internally consume. The supply of sugars in world market is more than the
actual demand.
The world s largest consumers of sugar are India, china, brazil, USA, Russian,
Mexico, Pakistan, Indonesia, Egypt. According to USDA Foreign Agriculture service, the
consumption of sugar in Asian countries has increased at a faster rate, as a
direct result of increasing population, per capita income and increased
availability of sugars.
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Historical Industrial Development
India has been known as the original home of sugarcane and sugar. Indians knew
the art of making sugar since the fourth century. However the advent of modern sugar industry in
India dates back to mid 1930s when a few vacuum pan units were established in the ub tropical
belts of Uttar Pradesh and Bihar.
Until the mid 50s, the sugar industry was almost wholly confined to the states of Uttar
Pradesh and Bihar. After late fifties or early sixties the industry dipped into northern India,
western India and other parts of northern India.
India is largest consumer and second largest producer of sugar in the world. The
sufficient and well distributed monsoon rains, rapid population growth and substantial increase in
sugar production capacity have combined to make India the largest consumer and second largest
producer of sugar in the world.
The Indian sugar industry has not only achieved the singular distribution of being one of
the largest producer of white plantation crystal sugar in the world but has also turned out to be a
massive enterprise of gigantic dimensions. With over 450 sugar factories located throughout the
country, the sugars industry is almost the largest agro processing industries, with an annual
turnover of r150bn. It plays a major role in rural development and its importance far India
stretches far beyond the role of a sweetener supplier.
The sugar factories located in various part of the country work as nuclei for development
of rural areas by mobilizing rural resources and generating employment, transport and
communication facilities. Over 45mn farmer, their dependants and a large mass of agricultural
labour are involved in sugarcane cultivation, harvesting and ancillary activities constituting 7.5%
of the rural population. The sugar industry employs over 0.5mn skilled and unskilled workman,
mostly from the rural areas.
1.8 Global Scenario (International Trade Opportunities)
International trade is of strategic importance to India as it can help to maintain stability

in the domestic market, despite the cyclicality in production. If there is a sugar surplus either due
to excess production or due to greater economic attractiveness of cane for ethanol cogent in the
further, exports could be used if the surplus cannot be managed in the domestic market.
Acceptability as a credible exporter will provide the Indian sector an alternative set of markets for
diverting surplus production. Similarly for diverting surplus production. Similarly, in case of
deficits, raw sugar imports could help bridge the gap.
10
Globally, in most of the key geographies like Brazil Thailand, regulations have a
significant influence on the sugar sector. Perishable nature of cane, mall farm landholding and the
need to influence domestic price; all have been the drivers for regulation. In India, too, sugar is
highly regulated. Hence 1993, the regulatory environment has considerably sealed, but sugar till
continue to be an essential commodity under the essential commodity act. There are regulations
across the entire value land demarcation, sugarcane price, sugarcane procurement, sugar
production and sale of sugar by mills in domestic and international markets. However,
fundamental changes in the consumer profile and the demonstrated ability of the sector to
continuously ensure availability of sugar for domestic consumption has diluted the need for sugar
the need for sugar to be considered as an essential commodity. According to a recently conducted
nationwide survey, nearly 75% of the total non-levy sugar Is consumed by industrial, small
business and high income household segments. Further, even for a low income household, 10%
increase in sugar price would result in less than 1% increase in the 3 monthly food expenses.
1.9 The main Market Players in Karnataka.
 The Mysore Sugars Company. ( Mysore )

 The Godavari sugars mile ltd.(Godavari )
 The Gangavati sugars ltd.(Gangavati )
 Bannari Amman sugars l td.
 Sri Renuka sugars ltd.
 Sri Prabhulingeshwarasugars and chemicals ltd.
 Shamanur sugars ltd.(Duggati)
 Sriguppa sugars and chemicals
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2.COMPANY PROFILE
2. BRIEF BACKGROUND OF THE COMPANY
Davanagere Sugar Company Limited (DSCL), a joint sector undertaking promoted by

KSIIDC, KAIC and the agriculturists of Davanagere Taluk was incorporated in the year 1970 and
commenced commercial operations in October 1974 with an installed capacity of 1250 TCD. The
factory is situated at Kukkuwada village, about 18 kms away from Davangere city (Davangere
Taluk/District). The company went into commercial production in October 1974 and due to
Government policy (de-control of sugar industry and lower realization of sugar-free sale @
Rs.1.60/kg &Rs. 2.10/kg) then prevailing especially during the years 1977 onwards, the company
incurred losses and was declared as a Sick Unit in 1986-87. IDBI was appointed as OA. As result
of the reliefs & concessions extended by Financial Institutions, the company started earnings
profits from the year 1986-87 onwards and by 1983-94 the net worth of the company was became
positive. After its satisfactory performance for 2 more years, the company was declared
economically viable in February 1996 and discharged from the purview of BFIR.
In pursuance of disinvestment policy, Government of Karnataka transferred 20% share

held by K.A.I.C. in the company to farmers in the year 1995. The stake of Government of
Karnataka was further reduced to 6.38% with the allotment of shares on preferential basis in the
year 1995. Shamanur Group holds substantial and controlling interest in the Company and the
day-to-day affairs are managed by Sri. Ganesh, Managing Director.
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2. Expansion/evaluation of D, S, C, L, projects
During the year 1998, the Company took up expansion/modernization of the plant to
double the crushing capacity from 1250 TCD 2500 TCD in two phases at a total cost of Rs.26.64
Crores. The project was funded by term loans from IDBI 10.75 Crores SDF Rs.7.89 Crores,
Promoters’ contribution/internals accruals Rs.4.00 Crores and the bridge finance of Rs.
4.00 Crores from Bapuji Co-operative Bank. The expansion/modernization project of the plant
was completed the project was implemented from 31.03.2001. The plant is presently operating at
2500 TCD. The IDBI Term loan of 10.75 Crores is fully repaid in January’2005. The repayment
of SDF Loan (extended on soft terms-present rate of interest 4% p.a. w.e.f., 21st October, 2004) in
5 equal installments would start one year after closure of IDBI Loan i.e., from 2006 onwards.
The sugar expansion project enhancing capacity from 2500 TCD to 3500 TCD is also in
advanced stages and is scheduled to be commissioned by September 2005. This sugar expansion
project cost of Rs. 36.40 Crores is funded with promoters’ contribution of Rs. 9.22 Crores and the
term loan assistances from IDBI Rs. 15.00 Crores& SDF soft loan of Rs. 12.18 Crores. The
company had so far availed Rs. 11.00 Crores respectively from IDBI & SDF.
The company had commissioned 24.45 MW multi fuel co-gen power plant on 24th
March’2004 at the existing sugar plant at a project cost of Rs. 74.45 Crores with term loan
assistance of Rs.48.50 Crores availed (sanctioned Rs. 51.70 Crores) from IREDA. The project
was implemented without cost/time over runs. The performance of Co-Gen Power project is well
stabilized and consistently doing well with power exports about 93 Million Units to KPTCL grid
(till February’2005) in the very first 11 months of commissioning. By 31st March 2005 the
company is confident of achieving 108 million units of net export to KPTCL Grid.
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2.NATURE OF THE BUSINESS CARRIED:
DSC Ltd., was established during 1970 in Kukkuwada village (Incorporation date is 28th Sep
1970)
The nature of business in DSCL is as follows:
The main production of DSCL is manufacturing of sugar. Their main input for production is
sugarcane, Sugarcane is the major Raw material for the production of sugar and for the production
of sugarcane irrigation facility is very important. In this area Bhadra canal water is flowing it is
important point for location of this factory. Aim to manufacturing good quantity sugar and it's by
products and to give employer it to the village people.
Harvesting and processing season may vary from country to country, area to area and factory
to factory depending on the convenience. Usually, the harvest starts in July/ August and continues
up to April /May. Some factories have the continuous supply of cane throughout the year, and
they process them in whole year without leaving the factory idle.Their sub production is power;
they generate power and use it for Production of Sugar. During the season of sugar they generate
power with the help of bagasse which is sub product of sugarcane. And during off season they
will generate power with the help of coal. By this we will come to know that their main nature of
business is production of Sugar and generation of power.
2.VISION, MISSION, AND QUALITY POLICY :
1. VISION:
DSC has dedicated to deliver overall value to their customers, delivering high quality
products, exceptional financial performance to company shareholders and complete satisfaction to
cane-growers, employees and stakeholders.
Expansion of cane cultivation area to reach 30,000 acres of land under cane cultivation.
To plant, cultivate procedure, raise and trade in sugar cane, sugar beets and other crops.
Diversification, Ethanal, Sugar refineries, one more sugar plant, starch manufacturing unit and
increase in existing crushing capacity from 3500 TCD 5000/7500 MT.
Enter into joint venture.
To expand the group of companies.
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2. MISSION:
Efficiency in production.
Offering quality products and value for money to the consumers.
Participating with the Government in policy formulation.
Upgradation of technology in work of changing technological need.
To provide better salary and welfare facilities to Employees
3. QUALITY POLICY:
Regarding quality planning to provide healthy and Sulphur free sugar to the customers.
2.PRODUCT PROFILE:
1. Meaning of sugar:
Sugar is a sweet, white or brown, usually crystalline substance obtained chiefly from
sugarcane or sugar beets and used commonly in food products, sugar means something sweet in
form of taste.
2. UTILITIES OF SUGAR:
Sugar is necessary product, which provides carbohydrates to human body, which is the source
of energy for doing work sugar is contained in sugarcane, fruits and other food items.
The following are the main utilities of sugar
 In our houses and hotels the sugar is commonly used for preparing Coffee, Tea, Sweets, Badam
milk etc.
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 The different manufactures of chocolate, ice cream, soft drinks are often used the sugar for
preparing their products.
 Distilleries and Breweries, Alcohol producers will also use sugar in different forms.
3. BY-PRODUCTS IN SUGAR INDUSTRY:
The main by-products of sugar manufacturing are:
Bagasse
Molasses
Press mud
a) Bagasse.
A number of products can be prepared from different constituents of bagasse. Cellulose can be
used for the manufacture of paper cardboard, active carbon etc. Bagasse is also a suitable raw
material for plastic industry.
Bagasse and its uses:
The by-product or residue of milling or diffusing cane is bagasse, the woody fiber of the cane, in
which the residual juice and the moisture from the extraction process remain. By the work fiber is
meant those all insoluble solids, fibrous or not.
Bagasse, Storage:
Storage of bagasse produced at grinding season is necessary when it is to be used as raw

material for the other operations that are carried out continuously throughout the year. Fresh and
under graded bagasse gives the best result in pulping.
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Commercial utilization of Bagasse:
Paper manufacturing
Wall board and insulating board
Production of cellulose
b) Molasses:
It accounts for an output of 3% to 4% of cane. Molasses utilized variety of waysMethylated

Spirit, Cattle food, Fertilizer, Yeast, Road surface, Cheap confectionary, Artificial silk,
Chemicals Power Alcohol, Fuel. Etc
c) Press mud:
Impurities are precipitated during the course of clarification of sugarcane juice. The cake,
which is discharged after washing, is called press mud. This mud contains certain mineral and
organic matter.
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2 Ownership and management Pattern:
.Davangere sugar company Limited, is a privet Limited company owned by the following
members:
BOARD OF DIRECTORS:
PROMOTED DIRECTORS
NAME DESIGNATION
Shri. S shivashankrappa Chairmen
Shri. S, S, ganesh Managing director
Shri. S Smallikarjun Director
INDIPENDENT DIRECTORS
Shri. S SJayanna Director
Shri. K V Somashekar Director
NOMINEE DIRECTOR
Shri. K P Surendranath IAS (Nominee of IREDA)
SMT, Rekhaganesh
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AUDITORS
M/S Shantappa and co, davanagere.
COST AUDITORS
Shri G.I. Srinivasa Murthy, Bangalore.
2.Competitors Information
 Sri Renuka sugar sugars LTD-it’s having a good market share in Karnataka, its supply the
sugars to shaping malls, it is the main competitor of all other sugar companies in Karnataka, it’s
large sugar producer in Karnataka sugars, it’s work in 365days of the year.
 Shamanur sugars LTD-shamanur sugars is the south Karnataka famous sugar company, it’s
production capacity is very high 3200qt per day and it’s located in duggati,davangere. So it’s
given high competition our davangere sugar company. The shamanur sugars charge
 Bathi sugar company LTD- Bathi sugars is the large public ltd company it’s anther main player
in Karnataka, it’s located in doddabathi davangere. It’s given high competition to the davangere
sugar company, it’s purchase the sugar cane from the formers at RS2100qtl compare to our
davangere sugar company it’s 40 low so it’s considered as a competitive industry.
 Chamundeshwary sugars- it is the another big player in south Karnataka it’s located in Mysore.
The gangavathi sugar ltd.- the gangavathi sugar company is one of the leading sugar producer in
north Karnataka it is also main competitor of davangere sugar company in the market.
Satish sugars ltd.- satish sugars is one of the leading sugars in the market, it’s given high
competition to davangere sugar company in the market.
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2.INFRASTRUCTURE FACILITIES:
PLANT LOCATION:
Plant location is an important managerial decision, which decides the fate of the enterprise.
Ideal plant location is one, which results into the lowest cost of production and distribution. The
DSC ltd., has plant location in better condition that have the following facilities.
1. Availability of Raw Material:
As the cost of raw materials in sugar industry constitute a large part of total production cost,
efforts should be made to establish the undertaking close to the source of materials. It helps to
continuity of production and reduces cost of transportation and thus ultimately enables the factory
to operate successfully.
The availability of raw materials i.e., sugarcane is sufficient for the production process of DSC
ltd., majority of cane that is being crushed is available within a radius of 20 km of the factory.
2. Source of Power:
DSC Ltd., is setting up a co-generation plant with 24 MW exportable capacity using biogases
which is used in production process daily.
3. Transport and Communication Facilities:
The better transport facility enables existence of storage handling and service facilities.
Davangere city is at distance of about 17 km from the project site. The project site is well
connected by Bangalore, Pune through railway and NH4 road.
20
4. Climate condition:
The cordial reason for locating the plant near Davangere is favorable Agro climate conditions,
which are conductive to sugar development. Climate induces the efficiency of workers to a
considerable extent. The agriculture resources are available in plant in this location.
5. Supply of Labour:
The labour cost is an important item of the total production cost in every industry. DSC Ltd.,
has supply of labour from surrounding rural areas and Davangere district at cheaper cost.
6. Banking and Credit Facilities:
These facilities are available in Kukkuwada where the DSC Ltd., is located and also in
Davangere city. State bank of Mysore, Indian Banks, Canara Bank and union Bank of India have
lent a helping hand in this regard.
7. Water Facility:
For the purpose of cooling and waste disposal process large quantity of water way may be
needed. DSC Ltd., has water supply from the Shygalehalla which is very nearer to the project
site.
the cost of raw materials in sugar industry constitute a large part of total production cost, efforts
should be made to establish the undertaking close to the source of materials. It helps to continuity
of production and reduces cost of transportation and thus ultimately enables the factory to operate
successfully.
The availability of raw materials i.e., sugarcane is sufficient for the production process of DSC
ltd., majority of cane that is being crushed is available within a radius of 20 km of the factory.
21
2. Achievements / Awards of company.
The managing Director has been honored with the “BEST BUSSINESS
LEADERSHIP CO- GENERATER” awarded by the solar energy society of India with win
rock international, which is the award for the best power plant in India. The award was given on
8th February, 2006.
The company has been bestowed with honor of ‘INDUSTRIAL

EXCELLANCY’in technology and management by the institution of economic studies.
The company managing director has bestowed with honor of ‘BHARATH

UDYOGARATNA AWARD’forachieving excellence in company management of make it a
profitable venture and installation of co-generation plant with a short period of 10 months.
2.WORK FLOW MODEL (END TO END):
Process followed to manufacture Sugar from Sugarcane.
1. Cane procurement.
2. Juice extraction.
3. Juice clarification.
4. Evaporation.
5. Syrup clarification.
6. Crystallization process.
7. Conveying and grading of Sugar.
8. Sugar Packing, Weighers and Storage.
22
PROCESS FLOW DIAGRAM OF DSCL KUKKUWADA
Cane procurement
Juice extraction
Juice clarification
Evaporation
Syrup clarification
Crystallization process
Conveying and grading of Sugar
Sugar Packing, Weighs and Storage
A brief description of the above process steps are given below.
23
l. Cane procurement:
Matured cane is harvested and transported by tractors to the factory site, taking care that
the time gap b/w harvesting and milling is not more than 22 hours. Cane is harvested on the basis
of 1. Age of the crop. 2. Hand refractometerbris and 3. Lab crusher test.
2. Juice extraction:
For the convenience of milling, cane is cut into small fibers while conveying to mill.
Fibrous cane is compressed in a tandem of 4 mills in series to extract maximum juice. Compound
imbibitions are followed to extract the juice efficiently using hot condenses at 90° c. To avoid
microbial attack, mill sanitation is followed by addition of carbonate-based chemicals. Juice
gutters and receiving tanks are washed with hot water jet every 8 hrs.
3. Juice clarification:
Before clarifying the Sugar cane juice it is weighed for the material balance purpose.
Weighed juice is pumped to continuous liming and sulphita-tion tank; through a multi-pass heater
to a temperature 70° c to 75° c. heated juice is treated with milk of lime and So2 gas. To reduce
fluctuations in chemical reaction, film type continuous sulphur furnace and auto PH control
system is installed. Treated juice is pumped to a continuous clarifier, Precipitated non Sugars
settle at the bottom of each compartment and decanted clear juice comes out from the upper
portion of each compartment. There are 4 compartments in the clarifier.
Under-flow of the clarifier is sent to rotary Vacuum filter, to further recover Sugar from
the non-Sugar precipitated juice. Filtrate juice sent to filter for further refining the juice clarity.
Milk of lime is prepared after passing through lime slacker and classifier. (To maintain
quality of lime, fresh quick lime is procured from limekilns).To prepare sulphurdioxide gas,
superior quality rolled sulphur is burnt in a furnace, in the presence of compressed air.
4. Evaporation:
Clear juice coming out from the clarifier is fed to multiple effect evaporator set, to
concentrate the juice to 58° to 60° bris. Condensate collected from evaporator later bodies is used
for mill imbibition purpose.
24
5. Syrup clarification:
Concentrated syrup from evaporator outlet is sent to, syrup is treated with phosphoric acid
and patented flocculent to separate out non-sugar to the possible extent. Clarified syrup is sulfated
for further bleaching to improve color. Clarified and sulfated syrup is sent to pan floor tanks to
crystallize sugar.
6. Crystallization:
To extract the sugar from cane syrup it is boiled in Vacuum Fans adopting 3 massecuite
systems. After extracting the maximum quantity of sugar, in the pans the left over liquors is called
final molasses, which is sold to distilleries.
Fresh cane syrup (mother liquor) is boiled in vacuum pans called as 1st massecuite or
‘A’massecuite. From this massecuite, commercial sugar is taken out through centrifugal and
liquor is separated out. This other liquor after 1st extraction called 'A' molasses. To get required
number of sugar crystal and to maintain uniformity. 'A' massecuite is boiled on seed sugar
collected from sugar hopper.
'A' molasses is again boiled as 'B' massecuite. It is centrifuged and the sugar is melted
using pan condensate water. This melt is used in "A"massecuite boiling along with syrup.
Massecuite coming out from "B" massecuite centrifugal is called as "B" molasses.
"B" molasses is again boiled as "C" massecuite. Sugar coming out by the centrifuging of
"C" massecuite is melted and also used in "A" massecuite boiling. Molasses coming out from c-
centrifuged is called as final molasses.
7. Conveying and grading of Sugar:
"A"massecuite (Bagging Massecuite) is centrifuged in fully automatic batch type

centrifuged in fully automatic batch type centrifuged to get commercial grade sugar. This sugar is
discharged on a hopper cum conveyor. While conveying the sugar to grader, it is treated with hot
and cold air to remove moisture and to bring down the sugar to 38°c before packing / bagging.
Magnets are provided just above the sugar hopper and at the bottom of sugar elevators to separate
out metal pieces if any.
25
8. Sugar packing, weighers and storage:
Graded sugar is sent to sugar silos. These sugar silos are attached with auto weighers.
Sugars are bagged according to market requirement either in 50 kg pack or 100 kg pack. For 50-
kg packing normally High-Density Poly Eurethane (H.D.P.E) bags with polytene linking are
used.
In the sugar godown bags are stacked carefully in lots. These lots are covered with Low
Density Poly Eurethane (L.D.P.E) black sheets to prevent moisture entertainment.
Brief Description of Co-gen Process.
Boiler:
Make: BHEL
Capacity: 80Ton per hour
Pressure: 67 kg
Temperature: 500oc
Type: Bid-rum natural circulation
Turbo Generator:
Make : BHEL
Capacity: 22 MW
TYPE : Double extraction cum conducting
When the cane is crushed the expressed juice is sent out the process for production of
sugar. The by-product after expressing juice coming from the mills is known as Bagasse, which
contains 50% moisture and fiber. The same is used as a fuel for generating steam. The bagasse
coming from the mills is fed to boiler for generating high-pressure steam. In addition to Bagasse,
other biomass fuels like Groundnut shell, Coffee Husk, Paddy Husk, Saw Dust, and Wood-chips
etc are also used for steam generation.
26
As it is a high-pressure boiler the water quality should be maintained properly. For this
purpose there is a water treatment plant to supply the required demineralized (DM) water for
boiler and soft water for cooling purpose. For controlling the air pollution there is an Electro
Static Precipitator (ESP) in the boiler, which collects the fly ash, so that the dust concentration in
flue gas is maintained well within the norms.
The high-pressure steam is passed through the turbine for generating power. The required
low-pressure steam is drawn from turbine and sent to Sugar Plant for processing. The turbine,
which is coupled with generator power at 11 kV. This power is used for sugar plant as well as co-
gen plant operation and the surplus power is evacuated to the KPTCL grid. The 11 kV is stepped
up to the transmission voltage of 66 kV. The power is evacuated to the substation, which is 6.5
km from the site through tower lines.
27
The functional structure of DSCL is appropriate for an organization with several

products in one industry. The company ensures the maximum use of Principle of
specialization
ORGANISATION STRUCTURE
Istrati
28
Cane Development
29
3. FUNCTIONAL DEPARTMENT :
1. Production Department:
Production is any process or procedure developed to transform a set of inputs like Man,
Machine, Material, Money and management into a specified set of outputs like finished products
and service in proper quantity by achieving the objectives of an enterprise.
Production management is a set of general principles applied for production economics

facility design and schedule design, quality control, work-study and budgetary control. The sugar
industry in India adopted all the facilities which help in achievement of greater production like
location, layout, production control, Inventory control, quality control, labour control,
improvements in cost control and regarding socio-economic environment.
The DSCL has adopted advanced technology in their production process, the standards
recovery percentage in India is 10.8. In DSCL and they have the recovery percentage of 10.2. In
DSCL they are proposing to generating power about 24 MW by using bagasse. The generated
power will be used in crushing and also supply the power to grid.
Stores:
The DSCL as very well managed stores, by storing the genuine standardize spares, which
are used in production process. They purchase the standardized spares in through tenders.
For the purpose of sugar process some chemical are also used like Ortho Phosphoric Acid
(OPA) burnt lime, sulphur, hydrogen peroxide and they are also stored. The final raw sugar is
stored in the store. The company store sugar in large quantity. Sugar is produced only in the
season. Because of unavailability of sugarcane in all season.
2. Personal Department:
Human resource management is "the planning, organizing, directing and controlling of

the procurement development composition, integrating and maintenance of people for the purpose
of contributing and organizational individual and social goal. Personal department covers the
entire department and sections of an organization where the people are working.
Indian sugar companies require three of working group's permanent, Seasonal, temporary
with skills like highly skilled, semi skilled and unskilled workers, according to the type of the
job.
30
In DSCL personal administrations along with general manager carry out the job of
managing human resource. The company has adopted electronic punching card system to
maintain attendance/absenteeism. In HR department also given some incentives and awards to
employees for whom showing better performance, seniority and experience.
ABOUT EMPLOYEES
The company has 404 employees who are working under different department and as they
have got special training under their respective department. The company after privatization
automated and it is a capital intensive. All the employees are educated according to these
employees they have to supervise and work with machine.
The company also has unskilled labor that is daily wage paid workers are not permanent
they are called as seasonal workers and the strength is 84.The strength of contractual employees is
72.
The company also has permanent workers who are know as helpers in the company.
Strength of labor is 172. These type of permanent labor are semi skilled and also called as
HELPERS, They are divided among different Department of the organization according their skill
and experience. There are around 64 trainers.
3. Marketing Department:
CEO
GENERAL MANAGERE
MANAGERE
ASST. MANAGERE
SUPERVISOR
31
Marketing is the process of planning and executing the conception, pricing, promoting and
distribution of ideas, goods and services to create exchanges that satisfy individual and
organizational goals.
32
Sugar is one of the essential commodities; marketing strategy is entirely different in sugar
when compared to other product, which are exposed to the open market operation. The demand
and the department of consumer affairs and public distribution systems, New Delhi, guide
marketing, controls supply theory at different levels and sales. Sales of are controlled under
"Release Mechanism" of quota of sugar regulated by the central government. Earlier two quotas
i.e. levy and non levy at 40% and 60% was fixed by the central government accounting for about
5-6% of buffer stock of sugar held by the sugar factories. Levy quota of 40% was sold to the
government to distribute sugar to the public under public distribution system and remaining 60%
sugar was sold in the open market through the dealers holding Essential Commodities License
(ECL).
DSCL has exported more than 2.5 million quintals of sugar in the last 2 years of all now in a
comfortable position holding only about 80,000 quintals of sugar. With the advent of new export
avenues to Srilankha, Maldives, Bangladesh, mainly with its good quality of sugar better price in
the open market indigenously.
4. Finance and Accounts Department:
Finance and Accounts department performs the duty of generating funds on the basis of the
financial projections and achievements made by the company and on the
budgeting income, expenditure is controlled and streamlined in a planned way on the basis of
budgetary expenditure envisaged by various production departments both for production and
maintenance. Finance department projects the financial projection of the company including its
expansion activities in addition to looking after day today financial arrangements.
DSCL has adopted financial management software system to arrive at the projected analysis
and function very efficiently and this helps the company to negotiate with financial institutions
and banks for its future financial needs well in advance. Finance package also included the
approachto sugar development fund and its formalities to be observed in getting financial
assistance from SDR.
Company has installed "Tally" system accounting. Account department works under the
finance department and submit of monthly, quarterly, and annual accounts for internal audit to a
separate audit from M/s Shanthappa and company Davangere. Accounts are maintained by
accounts staff, and accountant and preparation of trial balance, reconciliation confirmation of
balances from sundry auditors and salary debtors is his responsibility. Accountant also deals sales
tax and income tax matters.
33
Functions:
It prepares and maintains journal books, cash and bank books, ledger accounts and trial balance.
The corporate office prepares profit and loss account and balance sheet.
The department analyses the financial position of the organization by maintains the required
records by preparing and analyzing the financial statement of the company.
Other impordental function are
1. Budget preparation
2. Budget administration
3. Cost allocation
4. Technical assistance to service provider
5. Contract administration
6. Technical assistance to service providers
7. Fixed assets records
8. Cash flow analysis
34
3.MCKINSEY’S 7S FRAMEWORK
It’s all very well devising a strategy, but you have to be able to implement it if it’s to do
any good. The seven S frameworks first appeared in “the art of Japanese management” by
Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese industry
had been so successful, at around the same time that Tom Patters and Robert Waterman were
exploring what made a company excellent. The seven S model was born at a meeting of the four
authors in 1978. it went to appear in “ in search of excellence” by Peters and Waterman , and
was taken up as a basic tool by the global management consultancy Mckinsey: it’s sometimes
known as the Mckinsey 7S model.
35
Managers, they said, need to take account of all as seven of the factors to be sure of
successful implementation of a strategy- large or small. They’re all interdependent, so if you fail
to pay proper attention to one of them, it can bring the others crashing down around you. Like a
lot of these models, there’s a good dose of common sense in here, but the 7S Framework is
useful way of checking that you’ve covered all the bases. To better represent the challenges of
service marketing Mckinsey developed a new framework for analyzing and improving
organizational effectiveness, the 7S model:
1. Soft:
The 4Ss across the bottom of the model are less tangible, more cultural in nature, and
were termed ‘soft Ss’ by Mckinsey:
2. Skills:
The capabilities and competencies that exist within the company
3. Shared values:
The values and benefits of the company. Ultimately they guide employees towards
‘valued’ behavior.
4. Staff:
The Company’s people resources and how they are developed, trained and motivated.
5. Style:
The leadership approach of top management and they company’s overall operating
approach.
6. HardSs:
The 3Ss across the top of the model are described as ‘Hard Ss’: The 3Ss across the top
of the model are described as ‘Hard Ss’:
7. Strategy:
The direction and scope of the company over the long term
8. Structure:
The basic organization of the company, its departments, reporting lines, areas of
expertise and responsibility (and how they inter-relate)
36
9. Systems:
Formal and informal procedures that govern everyday activity, covering everything
from management information systems, through to the systems at the point of contact with the
customer (retail systems, call center systems, online systems, etc)
2.1. 7S Mckinsey Model of DSC Ltd.
1. Structure:
D S C Ltd is a one of the main sugar industry in Karnataka. Organization

structure defines the authority, responsibility and relationship in the organization. We
can observe that the departmentation is done on the basis of standard function of
management. There are different departments in KFIL namely as follows:
1.1. Personnel Department.
1.2. Marketing Department.
1.3. Finance Department.
1.4. Materials Department.
1.5. Production Department.
2. Skills:
The company is having number of skills Labours, which jointly and effectively produce
the end results. Most of the employees are multi skilled; this makes the company working
without any interruption. The supervisions in the production department are having a positive
attitude to motivate the workers to achieve the organizational goal.
The middle level management both inside and out side the company is highly dedicated.
All the middle level management people are skilled and are capable of taking decision whenever
it’s required.
Top-level management has the ability to engage all work groups in coordinated manner,
which enhances productivity in all departments.
3. System:
37
The company partially computerized. Production department depends upon the manual
work. Office work is computerized.
4. Style:
The company is following the participative and social type of leadership in which all the
level of managers interact with each other for achievement towards the goal and report to the
higher officials. Manager’s work together as team to solve today’s and tomorrows problems in a
significant manner.
5. Staff:
The company is having highly qualified and skilled staffs working together to achieve
the organizational goals. The company is covering its marketing activities with general manager,
assistant manager, supervisors and employees. The staff have been recruited through predefined
process, selected, and observed through training. In co. there are 523 regular employees
including executives and other officers, supervisors and clerical staff.
6. Shared values:
The company following one value system. Each and every employee in the
organizational hierarchy is sharing their views.
7. Strategy:
By fixing the competent value, they attract the formers to grow sugarcane. And by offering the
competent price they purchase sugarcane from the formers. By purchasing the more sugarcane
they keep continuous production. They try to meet the customers demand as early as possible.
38
3.2 Organizational Structure of DSCL:
1.
Chief Executive
Cane Manufacturing Workhouse

General Engineering
Share Computer Purchase Stores Time Sales
39
4. SWOT ANALYSIS OF D S C L
STRENGTHS:
DSCL has good reputation in sugar market. This is the result of long experience of around 36
years in the sugar industry.
The major strength of DSCL lies with the Production. DSCL will enjoy production during
seasons.
Production Quality is the strength of the DSCL.
Exemptions from sales taxes major dispatches are made from plant site.
Support from state government.
Its continuous and large production.


WEAKNESSES:
Transportation costs are high due to non-availability of trucks and other means of transportation
easily.
Financial crush is another Weakness at DSCL. Problems in efficient warehousing and out bound
transportation.
OPPORTUNITIES:
The Central Government has relaxed industry from the conduction of prior approval for the
exports. Now the sugar industries are free to export the sugar without the prior approval of the
Central Government.
The Central Government on the other hand is encouraging the production of ethanol.
Recent Government policies of promoting sugar exports, mandatory mixing of Ethanol in petrol
and interest subsidies for generation of alternative energy have thrown open various opportunities
for the industry like understanding more quantity of sugar exports and reduce burden on the
domestic market, diversification into manufacture of Ethanol from molasses and generation
bagasse based power.
These developments promise to be long lasting as it has positive feature for both the consumers of
sugar/power/petrol and also for the industry.
The projection of shortage of sugar has provided another opportunity in the form of important of
raw sugar and processing of the same into white sugar and re-export.
In the area Bhadra canal water is flowing it is important point for location of this factory.
40
THREATS:
Ambiguity in the policy decisions of the Central Government regarding decontrol of sugar
industry has been a Damocles' sword hanging on the industry.

Any hasty decision for the total decontrol of the sugar industry by removing the monthly release
mechanism would prove harmful in the short run, through it is in the interest of the industry in the
long run.
Frequent changes in the policy decision of the state Government / state power transmission
corporations regarding purchase of power from the bagasse cogeneration units, would hit at the
very survival of the industry as a great majority of the units are embarking on diversification into
bagasse based cogeneration by sacrificing the profitability in the sugar sector.
The international market also is witnessing the surplus sugar and expectation of increase in the
international sugar prices is bleak.
41
5. ANALYSIS OF FINANCIAL STATEMENT
Profit and loss Account For the Year Ending 31. 03. 2017
Particular 31-03-2017 31-03-2017
Revenue from operations
(Gross) 2466189089.10 1922002142.46
Less : Excise duty 69493294.00 48393783.00
Revenue from operations(Net) 2396695795.10 1873608359.46
Other income 13709136.64 6898878.10
Total Revenue 2410404931.74 1880507237.56
EXPENDITURE
Cost of Materials consumed 1529712234.46 1836644160.83
Purchase of Traded Goods

0.00 0.00
Changes in inventories of finished
goods and work in progress
Employee benefit Expenses

365628600.00 -480623782.00
Finance costs
Depreciation 67519505.94 66946930.12
Other expenses 96815349.09 85884546.68
TOTAL EXPENSES 118312765.11 84040094.79
168638576.53 163716753.78
Profit before exceptional and 2346627031.13 1756608704.20

extraordinary items and tax
42
Exceptional Items
63777900.61 123898533.36
Profit before extraordinary items
and tax 0.00 0.00
Extraordinary items
Profit before tax
Tax expenses
63777900.61 123898533.36
a) Interest on MAT
0.00 0.00
b) deferred tax
63777900.61 123898533.36
TOTAL
Profit For the Period

1032886.00 2115356.70
8974099.00 7661241.00
10006985.00 9776597.70
53770915.61 114121935.66
Earnings per share (basic and 1.46 3.10

diluted) Rs..
43
BALANCE SHEET AS AT 31.03.2017
SOURCER OF FUNDS: 31-03-2017 31-03-2017
Share holder fund:
a) share capital 368564570.00 368564570.00
b) reserves and surplus 611472251.60 557701335.99
980036821.60 926265905.99
2) NON-CURRENT LIABILITIES
a) long term borrowings 472854201.91 371251627.93
b) deferred tax liabilities 0.00 0.00
c) other long term liabilities 103028462.58 28313084.58
d) long term provisions 0.00 0.00
3) CURRENT LIABILITIES
a) short term borrowings 1189755769.84

1273647785.03
b) trade payables 35838919.00
76254237.51
c) other current liabilities 126191754.20
223126411.29
d) short term provisions 12816626.63
0.00
TOTAL 2920522555.76
2898859052.33
ASSETS
1)NON –CURRENT ASSETS
44
a) Fixed assets
1) Tangible assets 1194353196.50
2) Capital work in progress 96519343.26
b) Non –current investments 545900.00

1237472365.19
50205531.81
2)CURRENT ASSETS
a)long term loans and advances 68041807.63 545900.00
b)inventories 770531488.73
c)trade receivables 290708798.71

50400008.00
d)cash and cash equivalents 250893551.60
1030838222
e) short term loans and advances 177450658.41
279389352.46
23424299.08
f) other non current assets:
146131463.52
Deferred tax Asset 71477810.92
80451909.92
TOTAL
2920522555.76 2898859052.33
45
6. Learning Experience
It was a great experience at Davanagere sugar company Pvt. Ltd., where I got an
opportunity to learn the functions of the company in accordance with the present market trends.
The interaction with the company gave me an insight and very good experience of the industrial
scenario in the competitive environment. It gave an opportunity to study the human behavior and
also made to face different situations, which normally would come across while on work in
office/factory environment.
My learning experience at D.S.C Pvt. Ltd. is as follows,
Practical Exposure
Industry Exposure
Presentation Skills
Fieldwork
Research
Practical Exposure:
Practical study of the organization regarding planning, organizing, staffing, co-ordinating

and controlling of all the departments helped me to improve my decision making skills.
Industry Exposure:
The study gave an exposure to the real life situation in the industry, future growth
possibilities and its contribution to the economy.
Presentation Skills:
The study helped in improving my presentation skills, as i need to talk to different people
in the organization.
Fieldwork:
I also got an opportunity to go to different markets and got the experience of practical
field and also gained knowledge about the functioning of the organization.
Research:
I got an excellent opportunity to Interview the dealers in Karnataka state. and I also have
learnt on how to conduct research, research process, data collection, data analysis and preparation
of a research report
46
1. For Trading Concern

Statement of Working Capital Requirements
Particulars Amount
CURRENT ASSETS
1. Cash *****
2. Debtors or receivables ( For – month’s sales)
*****
3. Stocks
4. Advance Payments, if any *****
5. Others
*****
TOTAL CURRENT ASSETS
LESS: CURRENT LIABILITIES

*****
1. Creditors ( For – months purchases) **** *** *
2. Outstanding expenses (Lag in payment of expenses) * * * *
WORKING CAPITAL
Add : Provision /Marginfor contingencies

***
****
*** *
NEW WORKING CAPITAL REQUIRED ****
NOTE:
In order to provide for contingencies, some extra amount generally calculated as a fixed
percentage of the working capital, may be added as a margin of safety.
Profits should be ignored while calculating working capital requirements as funds provided by
profits may or may not be used as working capital.
Stock and debtors should be taken at cost unless otherwise required in a given question.
47
Particulars
a Amount
CURRENT ASSETS
1. Stock of Raw materials ( For – month’s consumption) ****
2. Work in progress
a. Raw materials
b. Direct labour *****
c. Overheads *****
3. Stock of finished goods (For months sales) *****
a. Raw materials
b. Direct labour ****
c. Overheads ***
4. Sundry Debtors / receivables ****
a. Raw materials
b. Direct labour ****
c. Overheads **** ****
5. Payments in advance **** ****
6. Balance of cash (Required to meet day to day expenses) ****
7. Any other ****
TOTAL CURRENT ASSETS
LESS: CURRENT LIABILITIES ****
1. Creditors
2. Outstanding expenses ****
3. Others if any
****
WORKING CAPITAL
**** * ** *
Add : Provision /Margin for contingencies
* ** *
* ** *
NET WORKING CAPITAL REQUIREMENT ****
48
4.1 Meaning of Accounting Ratio
An accounting ratios is the relationship between two accounting figure expressed

mathematically in short it in the arithmetical or numerical relationship between two accounting
figure.
Some of the important ratio relating to working capital management is analyzed as under net
profit or net loss of DSCL
1. Net Profit / Net Loss of DSCL
2. Current Ratio
3. Quick Ratio
4. Net Working Capital
5. Working Capital Turnover Ratio
6. Netprofit ratio
7. Gross Profit Ratio
8. Operating Cost Ratio
49
Findings, Suggestions & Conclusions
Findings:
This study was undertaken at Davangere Sugar Company Ltd.Kukkuvada to understand and
analysis working capital management to find out company’s present financial standing or status.
Accordingly years balance sheet was considered for analyzing working capital management.
The major findings with respect to study are given below
Company has well-organized administration department,HRdepartment,manufacturing

department and garden
 From the table 4.1 shows The highest Net profit is in the year 2014-15 i.e. 1519.42 and lowest in
the year 2016-17 i.e. 53.70
 From the table 4.2 shows The highest current ratio is in the year 2012-13 i.e. 1.75:1 and lowest
in the year 2016-`17 i.e. 0.94:1
 From the table 4.4 shows The highest Net working capital is in the year 2012-13 i.e. 6912.79
and lowest in the year 2015-16 i.e. 932.45
 From the table 4.5 shows The highest working capital turnover ratio is in the year 2015-16 i.e.
50
2013-14 and lowest in the year 20 - i.e.
 From the table 4.6 shows The Net Profit ratio is in the year 2014-15 i.e. 7.86% and lowest in
the year 2016-17 i.e. 2.18%
 From the table4.7 shows The gross profit ratio is in the year 2013-14 i.e. 33.25% and lowest
in the year 2015-16 i.e. 5.93%
 From the table 4.8 shows The operating cost ratio is in the year 2015-16 i.e. 8.51% and
lowest in the year 2012-13 i.e. 0.83%
51
Suggestions
After making the detailed study on working capital management of Davangere Sugar
Company Limited, the work intends to give some recommendations to improve the working
capital can be managed.
 The company should prepare financial budget to know the cash inflow and outflow of
each and every department.
 Stability has to be brought to the fluctuation currect liabilities. A stable currect liabilities
value will prove beneficial to the corporation
 The company should improve its short term solvency position by raising additional funds
most economically.
 It is important that the inventory should be controlled and managed effectively, the
company should reduce the investment in inventories and it should try to reduce the
investment in inventories and it should try to reduce the holding period of inventories.
 As inventories constitute a major portion of current assets and also working capital, the
company has to adjust investment in inventories, according to the requirements in order to
improve profitability of the company.
52
Conclusions
The effective of the working capital depends on the efficient management of its various
components such as cash, account receivable and inventories.
 The sugar industry mainly depends upon the availability of raw materials; the major raw
material for sugar industry is sugarcane. But to ensure the availability of sugarcane
forDSCL it should identify the place where the sugarcane is available for smooth running
of the company.
 The study of financing of current assets revealed that both long term and short term fund
to finance their current Assets.
 The current ratio should be maintained at least at 2:1 and in the same way liquid ratio
should be at least 1:1
 Since the inventory constitutes the major item at current assets, inventory turnover ratio
of the company should be high and also the inventory holding period should low.
 It can be concluded that the main source of funds in DSL is arrangement of long term
barrowings and issue of shares; funds were mainly used for acquisition of fixed assets and
financing of capital work-in-progress
53
BIBILIOGRAPHY
References
1. Uma Sharma, "Management of Working Capital", Delhi, 1st edition, Akashdeep Publishing
House, 1990, P.2.
2. Dr. D. Raghunatha Reddy and P. Kameshwari, "Working Capital Management Practices in

Pharma Industry", Management Accountant, Vol. 39, Issue 8, August Company, 2001, PP.892-
3.
3. R.P Rustagi, "Financial Management", New Delhi, 2nd Revised Edition, Glagotia Publishing
P.V Kulkarni, "Financial Management", 9th Revised Edition, Himalaya Publishing House,
2000, PP. 679-83
1. S. Arokisomy, "Sugar Industry", Kothari's Industrial Directory of India, 37th Edition, 1990.
2. Company Brochures, Davangere Sugar Company Ltd., Kukkuwada.
1. S.C. Bordia, "Working Capital Management", Jaipur, Pointer Publisher, 1st Edition, 1988,
P.149.
2. Davangere sugar company,
3. Davangere sugar company Pvt Ltd, Annual Report
S.P JAINE “ FINANCE MANAGEMENT”
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CONTENTS

CHAPTER TITLE PAGE NO

1 Executive summery 1-2

3 Functianal Department

5 SWOT Analysis

6 Finding suggestion

7 Learning Experience

Institute of Management Studies, Davangere 1

1.1 General Introduction

1.2 The Indian Sugar Industry

1.3 Introduction of Sugar

Manufacturing Process and Technology

For sugarcane, the process of refining is carried out in following steps.

Pressing of sugarcane to extract the juice.

Sugarcane in India is used to make sugar, khandsari or gur. However, sugar

1.5 Industry Structure

The production of traditional sweeteners sugar and khandsari is quite substantial.

1.6 Government policy

1.7 Current Position of Sugar Industry/ Scenario in India

Key Success Factors

1. Cane development activities.

Problem of Sugar Industry

8. Delayed payment to farmers.

Historical Industrial Development

1.8 Global Scenario (International Trade Opportunities)

International trade is of strategic importance to India as it can help to maintain stability

1.9 The main Market Players in Karnataka.

 The Mysore Sugars Company. ( Mysore )

2. BRIEF BACKGROUND OF THE COMPANY

Davanagere Sugar Company Limited (DSCL), a joint sector undertaking promoted by

In pursuance of disinvestment policy, Government of Karnataka transferred 20% share

2.NATURE OF THE BUSINESS CARRIED:

The nature of business in DSCL is as follows:

2.VISION, MISSION, AND QUALITY POLICY :

The following are the main utilities of sugar

3. BY-PRODUCTS IN SUGAR INDUSTRY:

The main by-products of sugar manufacturing are:

Bagasse and its uses:

Storage of bagasse produced at grinding season is necessary when it is to be used as raw

Commercial utilization of Bagasse:

It accounts for an output of 3% to 4% of cane. Molasses utilized variety of waysMethylated

2 Ownership and management Pattern:

Shri. S shivashankrappa Chairmen

Shri. S, S, ganesh Managing director

Shri. S Smallikarjun Director

Shri. S SJayanna Director

Shri. K V Somashekar Director

Shri. K P Surendranath IAS (Nominee of IREDA)

M/S Shantappa and co, davanagere.

Shri G.I. Srinivasa Murthy, Bangalore.

1. Availability of Raw Material:

3. Transport and Communication Facilities:

6. Banking and Credit Facilities:

2. Achievements / Awards of company.

The company has been bestowed with honor of ‘INDUSTRIAL

The company managing director has bestowed with honor of ‘BHARATH

2.WORK FLOW MODEL (END TO END):

Process followed to manufacture Sugar from Sugarcane.

PROCESS FLOW DIAGRAM OF DSCL KUKKUWADA

1. Creditors ( For – months purchases) ** * *