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CHAPTER – 1

INTRODUCTION

Sugar is a major form of carbohydrates and is found probably in all green plants. They occur in signification amounts in most fruits and vegetables. There are three main simple sugars sucrose, fructose, and glucose. Sucrose is in fact a combination of fructose and glucose and the body quickly breaks down into these separate substances.

HISTORY

The discovery of sugarcane from which sugar was produced had been known since 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 creation of 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 to thrive in a most favorable climate.

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It was not until the eighteen 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 1960; the industry was established by him 1830s. Earlier attempts to create a successful industry in the U.S. did not fare well; from the last 1830s, when the first factory was built. Until 1872, sugar factories closed down almost as quickly as they had opened. It was 1872 before, built in California, and 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.

INDUSTRY PROFILE

Indian sugar industry is going through a rough weather on account of decline in international / domestic market prices for sugar, higher cost of production, high carry over of stocks, higher cane price fixed by some state government through the SAP(state advised price) than the SMP (statutory minimum price) announced by the government of India have initiated certain measures such as rationalization of sugar cane prices, operationalisation of futures /forward trading etc., aiming to complete decontrol of sugar industry. Export incentives like inland transport subsidy up to port for export of sugar are also offered. To tide over surplus stocks of sugar, the government of India have approved three exchanges for futures /forward trading in sugar viz. e-commodities Ltd., Mumbai; NCS InfoTech Ltd.,

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Sugar is most important agro based industry of India and it has marked place in the country’s economy the reforms the liberalization policies of government of India are fast taking place and changing the industry scene in the country in the country. However it appears that the winds of liberalization and deregulation with are blowing presently through other industrial sectors has bypassed the sugar industry.

More over Indian sugar industry have spread over mainly in rural areas, as such major share of benefits should flow towards rural population. Besides present position of the industries shake less the policy of supporting farming economy by increasing sugar cane prices will ultimately raise the sugar crop. So emphasis has to be towards cane development both by Yield and quality. So at this junction it would be appropriate to consider, if no full liberalization at least partial by eliminating some of the undesirable constraints which would help industry in the changing environment when India needs to increase its foreign earnings, in the world market. India has been known as the original of sugar and sugarcane. Indian mythology support the above fact as it contains some legends showing the origin of sugarcane, the growth of the sugar industry is full of tales of adventure and conquest.

Hyderabad and e-sugar India, Mumbai, the introduction of futures trading may help in correcting the price distributions, but for it to be effective, the mounting stocks should be managed properly. India has emerged as the largest producer in the world. The sugar production in India during 2001-2002 seasons was around 183 lakh tones with the carry over of stocks of around 118 lakh tones of the previous season. With the internal consumption of 160 lakh tones and exports of around 10 lakh tones, the industry is estimated to be saddled with the carry over stock of around131 lakh tones to the 2002-03 seasons. As on April 30-2002, the co-operative sugar mills had a stock of 114.73 lakh tones.

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MANUFACTURING PROCESS & TECHNOLOGY

Sugar (Sucrose) is a carbohydrate that occurs naturally in every fruit and vegetables. It is a major production 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 nature sugar stored in the cane stalk or root is separated from rest of the plant material though a process as refining.

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

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 in a day, the recovery rate which generally depends on the quality of the cane and actual length of the crushing season.

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 is South India. Sugarcane in India is used to make either sugar, khandsari basic categories, granulated, brown, liquid, or invert sugar.

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SUGAR IN INDIA

Sugar is a controlled commodity in India under the essential commodities act, 1955. the government controls sugar capacity additions through industrial licensing determines the price of the major input sugarcane, decides the quantity that can be sold in the open in the open market, fixes the prices of the levy quota sugar and determines maximum stock levels for wholesales, etc.,

India is the largest consumer and second largest produces of sugar in the world. With over 450 sugar factories located throughout the country, the sugar industry is amongst the largest agro-processing industries in India, with an annual turnover of Rs 150bilion.

India has been known as the original home of sugarcane and sugar. Indians knew the art of making sugar since the forth 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 sub- tropical belts of Uttar parades and Bihar.

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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 dispersed into southern India, western India and other parts of Northern India.

India is the largest consumer and second largest produces of sugar in the world. The sufficient and well-distributed monsoon rains, rapid population growth and substantial increases in sugar production capacity have combined to make India the largest consumer and largest produces of sugar in the world.

With over 450 sugar factories located throughout the country, the sugar industry is amongst the largest agro processing industry, with an annual turnover of Rs 150bn. It plays a major role in rural development and its importance for India stretches far beyond the role of a sweetener supplier.

The sugar factories located in various parts of the country work as nuclei for development of rural areas by mobilizing rural resources and generating employment, transport and communication facilities. Over 45mn formers, their department and a large mass of agriculture labor 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 workmen, mostly from the rural areas.

After alternating between control and decontrol, the government adopted the policy of partial decontrol in 1967-68, which has since been the mainstay of government policy except for two short periods of decontrol in the 1970s. Under this policy, the government procures 40% of production at controlled prices based on the statutory minimum price for sugarcane, for supply through the public distribution system.

And the balance 60% is allowed to be sold by the mills in free market subject to the monthly release mechanism.

The levy quota for sugar mills has been brought down from the peak levels of 70% in 1968-69 to the present levels of 40% as a gradual process of deregulation of sugar industry.

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The number of operating sugar mills in the country has increased from 29 in sugar year (SY) 1930-31 to 1969-97 (sugar year October 1st to September 30th ). The addition in number of mills was at its peak during seventies that when nearly 100 mills were added between 1970 and 1980 to increase the number of operating units to 300.

SUGAR DEMAND

Demand for sugar increased with the growing world population, and even faster, perhaps because improving technology made its production cheaper. In the 1980s when the world population was 1,000 millions tones, recorded sugar production was 800,000 tones a year. By 1900 it was 8 million, 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 annually production stands at 115,000,000 tones.

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CHAPTER -2

RESEARCH DESIGN

STATEMENT OF THE PROBLEM

Channarayapattana is one of the major cities in Karnataka state. Major raw material viz., sugar cane for sugar factory is available in and around the city. The importance of study lies in the fact that there has been no systematic and comprehensive study in the tax by researchers on working capital management with reference to the unit seeks further this study. The study covers a brief history of Chamundeswari Sugar Limited, (Lessee of H.S.S.K Ltd.,) , its performance and working capital management system of Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,)The study also covers the receivable management, inventory management and cash management.

OBJECTIVES OF THE STUDY

The following are the main objectives of the study

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the liquidity position of Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,)

during study period.

SCOPE OF THE STUDY

The study examines the working management in Chamundeswari Sugar Limited, (Lessee of H.S.S.K Ltd.,).The focus is only on analyzing and evaluating effectiveness of working capital management in Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) The issues relating to working capital management include:

  1. How much money is to be invested in current assets.

  1. Management of Account Receivables.

  1. Management of Inventory.

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___________________________________________________________ SOURCES OF DATA

It is very well known that success or failure of the research depends upon the data. Therefore, selection of appropriate methodology for collection of relevant data is important. The sources include both primary and secondary sources.

PRIMARY

Personal interview with

SOURCES OF

CAO and other top-level

DATA

officers

SOURCES OF

DATA

Company annual reports

SECONDARY

SOURCES OF        Journals

DATA

Magazines

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___________________________________________________________ Limitations of the Study

The limitations of the study are:

  1. The study is confined only to HSCL.

  1. The study is restricted to only the current assets and current liabilities. Hence, the study of fixed assets and capital are excluded in this study.
  2. The major part of the analysis has been based on the audited financial reports of HSCL.

.

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CHAPTER - 3

COMPANY PROFILE

Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,)is established in the year of 1984 in the interest of local farmers and pre planned to provide job for the soil sons under the register no 2599/73-74. The plant was erected by buck Wolf Company from Pune, it is having capacity of 1250 TCD per day. The first estimated cost of the factory increased up to 7.3 crore. After this cost it is not enough for establishment of factory. So the third estimated cost of this project is 9.70 crore. Today’s establishment of factory cost approximately more than 50crore..

The site was selected for the location of the factory near the village Srinivaspura 6-Km from Channrayapatna taluk head quarter which is situated at an NH 48 on BM road which is 150 km from Bangalore.

The Government of Karnataka granted 150 acres of land near Srinivasapura village. The river Hemavathy is flowing at about 2.5 km from the site. Water is constantly fed from the river water by factory jack well pump.

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The starting moment of the factory, some important technicians were called from the other factories only for trial season. After some employees were selected on their experience and remaining employees were selected on contract basis. Ultimately the contract employees were appointed in the year of 1991 -92 according to the rules these posts are approved by the director of sugar, Karnataka govt Bangalore (as per staffing pattern). At present the total strength of the employees working in this factory is 567.

PRODUCT SERVICE PROFILE: -

CANE: -

Sugarcane is a plant is mixing more CO2 by efficient process of photosynthesis and translucent. The sugar synthesized in the leaves or translated to the steam in the form of sucrose and is converted into glucose and other sugars. The glucose molecules are used for the developments of the plant at the growth phase. Sugarcane contains about 14% fiber and 86% juice, sugarcane juice consists of 13% of sucrose and 73% moisture and non-sugar solids. The transport of sugarcane from farmers to the factory will be engaged through Lorries which will be taken through bidding at the time of harvesting and also farmers themselves supply by their own bullock carts or by tractors.

For the purchase of other raw materials Manager will receive the material requisition slips from the usage department, which should be signed by all the department heads and by the General Manager. Then the purchase department will evaluate the list of vendors and the tabulated comparative statement will be sent to the usage department. Then on the basis of the opinion of the usage department the purchase department will send a file to the management, and then on the basis of this file the purchase department will place the purchase order.

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Cane varieties in Chamundeswari Sugar Limited, (Lessee of H.S.S.K Ltd.,)

  1. CO 419.

  1. CO 7804.

  1. COC- 671.

  1. CO 8371.

  1. CO 62175.

  1. CO 8014.

  1. CO 32175.

PRODUCT DETAILS:

CANE HANDLING:

The transport system of cane should be established for efficient supply of cane. At present 80% of the cane crushed per day is through tractors and Lorries and 20% by bullock carts. The transport is entirely arranged by the growers. The cane is unloaded on the feeding table after measuring the weight. .

CANE SUPPLY:

The indent for crushing cane is given by the chief engineer to the agricultural dept daily. The agricultural dept allots the cane quota to each circle in three days in advance.

The laboratory section takes the samples of the cane from the cane yard randomly and makes the analysis for the expected recovery and external material percent cane. If both are beyond the normal level, instruction will be sent to agricultural dept. to staff the harvesting of the particular cultivator field or farm.

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___________________________________________________________ QUALITY POLICY

CANE QUALITY:

The cane should be free from traps, tops, dirt, soil etc. After unloading the cane from the trucks the company has arranged contract labors to remove the remaining dry cane, water shoot trash, binding materials etc from the cane supply to the factory. This practice improves not only the quality of cane but also the efficiency of the factory performance.

AREA OF OPERATION: -

SUGARCANE GROWN AREA:

Sugarcane is grown in 130-140 villages under different circle names mentioned as bellows:

SL.NO.

Name of the circle

1

Channarayapattna-1.

2

Hassan.

3

Holenarasipura.

4

Kikkeri.

5

Shravanabelagola.

6

Srinivasapura.

Area of operation means, the place where the company carries business operation companies is always used to carry business, where the required resources are easily available. Area of operation plays a vital role while fixing price, there by development of the company. Because if the area has suitable environment , raw material, labors for less wages , then it will reduces the cost of production.

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OWNERSHIP PATTERN:

It is a government based company and major contribution for this company is from the state government, and remaining contribution is from the share holders of the company. And the company is mainly controlled by govt. Company conducts election to elect president for the company, and share holders has voting power for this election, and these are the members for the company. If any members have any queries they can discuss with president in the meeting. In case president absence, they can meet general manager for the solution. Now the president of H.S.S.K Ltd is Sri H.S Shrikantappa .The entire union is controlled by president of the company. If the company earns profit, profit will be distributed to the formers based on their contribution.

VISION:

“To achieve organizational profitability by attaining the high level of productivity, to earning the trust of customer, and providing better value for sugar cane to attract the customer”.

MISSION:

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GOALS AND OBJECTIVES:

COMPETITORS INFORMATION

H.S.S.K Ltd has many competitors in different places around there area, and the main competitors are from MANDYA sugar factory. They attract customers by providing some benefits in terms of traveling expenses. There is a more competition mainly through supply of sugar cane. Company set a proper equivalent price to the sugar cane to attract more customers, and make good relation with the customers through cash settlements for sugar cane purchase.

INFRASTRUCTURAL FACILITIES

The factory premises have an area by 86.22 acres of land. In the premises has there is a factory building, management office, accounting section, cane department, cane yard, quarters, weight bridge, cane sugar & 20 acres of land to undertake Research & Development.

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Present sugarcane plantation in the year of 1998-99 as given below,

SI NO

Name of the circle

1998-99

1.

Channarayapattna-1

2624

2.

Srinivasapura

1507

3.

Holenarasipura

1684

4.

Kikkeri

533

5.

Hassan

307

Nearly 85% of cane area is under wet land condition and 15% of cane area is under dry lands.

ACHIEVEMENTS

  1. It has been awarded as the good infrastructure In the Karnataka in 1994.

  1. It achieves more profit during 1989 in the Karnataka.

  1. It has been awarded as the best quality product producer by the government of Karnataka.
  2. It holds more number of customers and it has many share holders with good relation, they are the strength of the company.

CHAPTER – 4

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DEPARTMENTATION

INTRODUCTION

Department is s a process of dividing the large functional organization in so small and flexible administrative units. The basic need of departmentation arises because of limitation on the number of subordinates that can be directly managed by the superior.

BASIS OF DEPARTMENTATION

Departmentalization may be on the basis of function, products, regions, customers, process, time, number, and marketing channel

Functional basis is a very popular method of departmentalization. It refers to grouping of activities of the organization into major functional departments like, production, purchase, and marketing act.

In Chamundeswari Sugar Limited, (Lessee of H.S.S.K Ltd.,) departmentalization is on the basis of function. The major functional departments of Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) , are as follows.

ORGANIZATION STRUCTURE

Organization structure is a basic framework within which the decision making behavior of executives takes place. It is an established pattern of relationship among the components of the organization. Chamundeshwari sugar industry limited is headed by the Chairman under whom M.D. and can advisor will take place. This crew guides the G.M. who is assisted by the department manager and heads.

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ORGANIZATION

CHART

CHAIR PERSON

BOARD OF DIRECTORS

Mechanical Dept.

Production Department

Power Plant Dept

Cane Dept.

ADM/TIME/OFFICE

GM (Tech)

Chief Chemist

Duty Engineer

Cane Manager

Admn. Manager

Chief Engineer

and. Officer

Sr. Mfg. Chemist

Asst. Engrs.

Dy. Cane Manager

Sr. Engineer

Mfg. Chemist

Turbine Optrs

Asst. Cane Dept

Asst. Per. Officer

Asst. Engineer

Panamaa

Bioler Optrs

Officer

Asst. Admn Officer

Cane procurement

Shift Engineer

Asst. Time

Centrifugal Optrs

Fitters

officer

Keeper

General A/c section

Workshop section

Eng. Dept

Store Section

Dy.

Foreman

Sales Dept.

Boiling House Filter

Chief Engr

Head Store Keeper

Manager(Finance)

Turners

Sale I/C

Sr. A/c’s Officer

Welders

Welders

Sr.Engr.

Computer Optr

Accountant

Sales Officer

Mechanist

Fitter Helpers

Asst. Engr.

Clerk

Cashiers

Assistants

Helper

Fitter

Store Boys

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1

PURCHASES DEPARTMENT

2

STORES DEPARTMENT

3

ADMINISTRATION DEPARTMENT

4

FINANCE DEPARTMENT

5

CANE DEPARTMENT

6

ENGINEERING DEPARTMENT

7

SALES DEPARTMENT

8

CHEMICALS DEPARTMENT

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PRODUCTION DEPARTMENT

PRODUCTION DEPT

CHIEF CHEMIST

SR.MFG. CHEMIST

MFG. CHEMIST

PANAMAN

CENTRIFUGAL OPTRS

JUICE SUPERVISOR

SUGAR HOUSE

CLERK

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PRODUCTION ACTIVITY

The department deals with the production activities on the production floor where men and machines are employed to convert the cane and chemicals into finished product (sugar) for handling them over to sales department.

PRODUCTION PROCESS

Sugar (sucrose) is a carbohydrate that occurs naturally in every frurt and vegetable. It is a major product of photosynthesis, the process by which plant 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.

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The natural sugar stored in the cane stalk or beetroot is separated from rest of the plant material through a process known as refining. For sugarcane, the process of refining is carried out in the following steps:

  1. Pressing of sugarcane to extract the Juice.

  1. Boiling the juice until it begins to thicken and sugar begins to crystallize.

  1. Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar

  1. Shipping the raw sugar to a refinery where it is washed and filtered to remove remaining non-sugar ingredients and color.
  2. 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 that generally depends on the quality of the cane and actual length of the crushing season.

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 UJKMI location with the maximum being in south India.

FERTILIZER

Mud and spent wash from distillery plant are mixed and fertilized is produced. Fertilizer later is transported to fields of farmers who gave ordered for.

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PRODUCATION PROCESS

CANE PREPARATION

STEAM

CANE PREPARATION

WATER

BAGASSES

---------------------------------------------------------------------

RAW JUICE

BOILER

EXHAUSTED STEM

-----------------------

CONDENSATE

SULPHURED JUICE

FILTERED JUICE

SULPHUR DIOXIDE

EXHUSTED STEAM --------------------------------

CONDENSATE

WATER

CLEAR JUICE

EXHUSTED STEAM----------------------------------

JUICE+MUD

MUDE

SULPHUR DIOXIED -----------------

SURUP-------------

VAPOURS

EXHAUSTED STEAM-----------

----

------ CONDENSED

MOLASSES

CLEAR JUICE

STEAM OR SUPAER

HEAT WASH WATER

CLEAR JUICE


GODOWN

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PURCHASES DERPARTMENT

The head of the department heads purchasing department. Purchasing decisions are divided into two. One for purchase of capital assets and another is regular purchase.

Purchase of capital assets requires approval of management

CONSIDERABLE POINTS WHILE PURCHASING CAPITAL ASSETS

REGULAR PURCHASES

Indent from the user is original document to issue purchase order for regular purchase of materials and goods.

PROCESS:

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___________________________________________________________ STORE DEPARTMENT

HEAD STORE KEEPER

COMPUTER OPERATIONS

CLERKS

STORE BOYS

Stores dept. holds the entire inventory required in the organization. All the materials coming are subject to record at stores and are held in the stores until they are issued to the required department.

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FUNCTIONS:

  1. Receipt of materials.

  1. Inspect it with ordered quantity quality and any specifications.

  1. Some of the materials like chemicals are to be sent to laboratory for inspection and testing.
  2. Getting indents from the departmental head or the concerned person and issuing it
  3. To make purchase-returns if the materials are rejected.

  1. Maintain minimum level of material.

  1. Informing purchase department when materials require.

MATERIALS HANDLED

  1. Engineering: tools, Spares.

  1. Raw-materials.

  1. Stationery.

  1. Packing materials.

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___________________________________________________________ ADMINISTRATION DEPARTMENT

At Hemavathi sugar Ltd., has administration department control and monitor the activities of time arid security personnel. Human Resource Development is the challenging function in front of administration department.

GENERAL MANAGER

ADMINISTRATION

MANAGER

PERSONNEL DEPT

TIME OFFICE

SECURITY

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___________________________________________________________ PERSONAL DEPARTMENT

FUNCTIONS;

  1. To maintain the Personnel administration of the manpower strength of 350.

  1. Recruitment and selection: The advertisements for recruitment of employee are made though leading news papers. Apart from this as a statutory obligation, Hemavathi sugar Ltd., appoint trainee also. Among the application received, eligible candidates are selected though scrutiny competent candidates are appointed for the job.

  1. Training and development: Training and development skills to newly employed. Training is necessary production, mechanical and electrical department. On the job training is arranged at the plant.

  1. Remuneration: Remuneration refers to the reward for labor and service. Basically remuneration is fixed on the basis of hours worded. Each shift is of 8hours and 3 shifts a day.

FRINGE BENEFITS

Food is providing at subsidized rates.

Cars are providing to managerial levels and executives. Supervisors are given two wheelers.

The company has its own quarters and providing quarters to employees.

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___________________________________________________________ TIME OFFICE

Objectives of time office are:

FINANCE DEPARTMENT

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Finance is the lifeblood of any business it is concerned with the activation of funds and wide application on the funds. The success of a business lies with the effective management of finance in the company. Finance management is that managerial activity, which is consumed with the planning and controlling of the firm’s financial resources.

It is the most important department in which most of the functions are carried out such as accounting, planning, mobilization and effective utilization of funds.

OBJECTIVES:

SOURCES OF FINANCE:

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___________________________________________________________

CHART OF FINANCIAL DEPARTMENTS

MANAGING DIRECTOR

FINANCE MANAGER

DEPUTY FINANCE

MANAGER

ACCOUNTS OFFICER

ACCOUNTS

CASHIER

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___________________________________________________________ ACCOUNT ING DEPARTMENT

INTRODUCTION :

Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) is an industrial organization manufacturing sugar, power, and ethanol accounts department of HSCL plays role in achieving objectives

NEEDS FOR ACCOUNTING SYSTEM:

  1. Decision-making

  1. Forward planning and budgeting.

  1. Controlling various management functions.

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___________________________________________________________ CANE DEPARTMENT

INTRODUCTION

Cane is the only raw material for producing the sugar. Cane department keeps the direct link with farmer to procurer and the development of the cane.

SUGARCANE

In India Sugar is produced only from Sugarcane, as the country’s climatic conditions are suitable for cane cultivation sugarcane being agricultural crops subject to the unpredictable vagaries of natures, yielding either a bumper crop of a massive shortfall in its cultivation from year to year.

The quality of sugarcane improves with age, reaching a peak, and gradually declining. A rapid deterioration begins from the most purity of juice cane has to be crushed within 8 to 10 hours of cutting

The usual sugarcane constituents along with their content I sugarcane as a % of total weight is as given below

SUGARECANE CONSTITUENTS

Constituent

% of total weight

Water

69-75

Sucrose

8-16

Reducing sugar

0.5-3

Organic substances

0.5-1

Nitrogenous bodies

0.5-1

Ash

0.3-0.8

Fiber

10-16

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Rainfall and temperature are the two important determining factors for the yield and quality of sugarcane, although reduced level of rainfall can be substituted by irrigation or sprinkling of cane water.

Even ton of cane cultivation requires approximately 60-70 ton of water under controlled conditions. But under field conditions the water requirement for sugarcane varies with variations in soil and climatic conditions. The efficiency of water uptake and use varies with different varieties.

Sugarcane yield in the country has doubled in the past sixty five years from 30.90 ton per hectare in SY 1930-31 to 66.5 ton hectare in SY 1996-97. The sugarcane yield has decreased since the peak 71.3 ton per hectare in SY 1994-95.

The sugarcane yield varies widely across the country in the range of 40 to 100 ton per hectare. Tamilnadu and Karnataka lead among the states with a yield of 100 to 85.7 ton per hectare respectively. Madhya Pradesh and Bihar have the lowest yield in the country in the range between the quantities of 40 tons to 44 tons per hectare.

SUGARCANE JUICE

Sugar cane juice is acidic in nature. Besides sugar it contains many other organic and inorganic and soluble as well as insoluble substance in varying amounts, together called as non-sugars, to the extent of 3 to 7.5 % of total quantity. These insoluble suspended matters make the juice viscous and turbid. The constituent of sugarcane juice as a percentage of total quantity is as given below.

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SUGARCANE JUICE CONSTITUENTS

Constituent

% of total quantity

Water

75-85

Sucrose

10-21

Other sugar

0.3-3

Other organic Substances

0.2-0.6

Nitrogenous bodies

0.5-1

Bricks Test must be made before cane is cut. It is also called Recovery Test

OBJECTIVES OF CANE DEPARTMENT

  1. To procure the cane at proper time and at proper condition.

  1. To look after the transportation of cane from farmers through trucks tractors and carts.
  2. To develop the cane and giving proper guidelines to grow.

  1. To keep and maintain concerned land database.

  1. Hiring trucks and tractors.

  1. Harvesting cane.

CIRCLE OFFICES

Assistant Cane Development Officer heads the circle office. There are ten circle officer located at different places surrounding from where cane is being procured. Supervisors assist circle officer.

Supervisors are to report corresponding circle offices. Weekly report has to be sent to the Cane manager.

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CHART OF CANE DEPARTMENT

GENERAL MANAGER (CANE)

CANE MANAGER

DEPUTY CANE MANAGER

CANE DEVELOPMENT

SUPERVISORS

CLERKS

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SALES DEPARTMENT

SALES INCHARGE

SALES OFFICER

ASSISTANTS

INTRODUCTION

Sales Manager is in charge of the sales department. The sales department takes care of all the sales. The Asst. Sales Manager has to supervise the sales.

Marketing and advertisements are not necessary in sugar industry, because customer won’t ask for specific company produced sugar and that not even separable. Anyhow the contacts with dealers and agents are to be developed.

FUNCTIONS

As mentioned above, marketing and advertising efforts are not made to promote sales.

But the sales department has to keep in contact with dealers and agents.

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___________________________________________________________ EXPORTS

Sugar is exported to Middle-East and European countries.

DEMAND-SUPPLY, IMPORT-EXPORT

DEMAND

Indians by nature have a sweet tooth and sugar is a prime requirement in every household. Bulk consumers like bakers, candy makers, sweet madders, and soft drink manufacturers consume almost 75% of the sugar available in the open market. Khandsari sugar is less refined and is typically consumed by sweet makers. Gur an unrefined form of lumpy brown sugar, is mostly consumed in rural areas, and with some quantities illegally diverted for alcohol production.

Industrial consumption for sugar is also growing rapidly particularly from the food-processing sector and sugar based bulk consumers such as soft drink and ice cream manufacturers.

The demand for sugar has increased from 3.69million ton in SY 1975-76 to 14.8mn ton for SY 1997-98 at a CAGR of.6.48%. The per capita consumption of total sugar (Gur & Khandsari) in the country has been increasing at phenomenal rate. The total per capita consumption has increased form 19.8 kg in SY 1975-76 to 2455 kg in SY 1997-98.

It is evident from the table (2) that in states with a higher net per capital state domestic product and also a higher proportion of urban population. The consumption of sugar is significantly higher and compares favorably with developed countries such as the USA and countries of the I’TJ. In fact, in urban areas of comparatively affluent Indian states like Punjab, Haryana etc., per capita consumption of sugar is substantially higher.

SUPPLY

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Indian sugar industry has grown horizontally primarily because of GOL policy to support small size sugar factories by excluding them from the requirement of supplying.

The production of sugar has increased in the past from 0.12mn ton in SY 1930-31 to 12.85mn ton in SY 1997-98 at a CAGR if 7.23%. The number of operating sugar mills for the corresponding period has i9ncreased from just 29 in SY1930-31 to around 412 in SY1997-98. The addition of mills was at its peak during the period of seventies and eighties when 100 and 70 new mills respectively were commissioned.

The sugar production in the country fluctuates widely based on sugarcane availability in the country. For example; the sugar production increased in SY 1991-92 by 58% to 13.4 million ton, but decreased in SY 1993-94 by 27% to 9.83 million ton. Similarly the production increased in SY 1995-96 by 67% to 16.45mn ton, but decreased by 22% in SY 1996-97 million tons.

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S-30 grade sugar has the maximum production in the country constituting around 72% of the total; production. The remaining 24% is of M-30 and the rest is from L-30 and the other different grades under 29 series.

IMPORTS

The government controls import of sugar thought policy and custom duties based on a demand-supply mismatch in the county.

In the past, imports were allowed only though government agencies or institutions, but since 1997, private were allowed to import and distribution sugar in the country.

In 1997, sugar was placed under Open General License (OGL) and allowed to be imported at zero import duty, so as to overcome the domestic shortage of sugar production. This led to a sudden spurt in imports to 0.94mn to for SY1997-98

The zero import duty was continued in the early part of 1997-98 season in spite of a bumper crop of sugarcane leading to excess supply and closing stock in the industry, the slowdown in demand in other Asian countries only further added to boost exports from other Asian countries into India, which have freight cost advantages.

Pakistan and Brazil are the major exporters of sugar to the country. Pakistan has advantages of freight cost and provides a subsidy of Rs.4 per kg for exported sugar.

To overcome the problem, the GOI announced customs duly of 5% and valorem and countervailing duty of Rs. 850 per ton on 26th April 1998. But the devaluation of Asian currencies along with a depression in the region pushed up the supply through imports in to the country.

In September 1998, all imports were asked to register with APFPDA (Agricultural and Processed Food Products Development Authority) so as to monitor the amount of sugar imported into the country, presently imports are mainly carried out by

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multination trading firms having a well-establishment distribution network in the country.

On January 15th,1999, the customs duties on sugar were increased to 20% and valorem so as to protect the Indian sugar industry from excess supply though imports , but this has made little impact from Pakistan, which has raised subsidies for exports and Brazil, which has devalued its currency.

To further discourage imports, Indian sugar companies are demanding an increase in; duty to 50% as India is allowed to impose a maximum of 150% customs duty on agro processed foods as per WTO. But the GOI is in hurry to increase customs duty as it feels domestic sugar prices will increase in customs duty.

In the recent budget for 1999-2000, customs duty on sugar was marginally increased to 25% as a process of rationalization of duty slabs in their tax systems, taking into account the 10% across the board surcharge on all imports, the effective import duty for sugar work out to be 27.5% ad-valorem plus a countervailing duty of Rs. 850 per ton.

First SY 1998-99, imports are expected to be around O.S. million ton, But to protect the interests of farmer in the period of high sugar production, the GOI is expected to customs duty, leading to a drop in imports for SY 1999-2000 to 0.6 million ton and 0.4 million ton in SY 2000-01

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EXPORTS

The substantial increase in the volume of free international trade in sugar presents an excellent opportunity to the Indian sugar industry to embark on a regular plan for sugar exports. But the restrictive sugar; policies along with unstable sugar production pattern make it an erratic trader on the world market.

In quick succession, India changes guard from the position of exporter of sugar to that of an importer. To quote a recent example, sugar of O.S million ton SY 1991-92 and SY 1992-93 was followed by import of 2mn ton in SY 1993-94 and 0.2 million ton SY 1994-95. This was again followed by an export of I million ton in SY 1995-96 and 0.4 million ton is SY1996-97. This circle has been completed last year SY 1997-98) with 0.94 million ton imports. The different up cursing period in India and other major producers\ exporter like Brazil and Australia can be utilized to tap the export marking in a big way. For the purpose of a comparison, the crushing season for different sugarcane producing countries vis-à-vis India is as given in table no (3)

In demand-supply calculation projection, the exports are expected to increase from the present level of 0.07 million ton to the earlier levels of around 0.1 million ton in SY 1999-2000 and 0.2 million ton in SY 2000-2001.

DEMAND SUPPLY

By estimating sugar cycle to top in season 1999-2000 by clocking a growth of 7%, and then witness a drop in production for the season 2000-01. The closing stock will come down to 3.3 million ton by September 30th 2001 form present level of 5.4 million ton by September 30th 1998.

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CHEMICALS DEPARTMENT

INTRODUCTION

Chemicals department is directly concerned with production. When the production is on process, mixing proper quantity and proper chemicals is necessary. Chemicals department is the production department.

IMPORTANT CHEMICALS

Lime and sulphur dioxide

CHART OF CHEMICAL DEPARTMENT

GENERAL MANAGER

CHIEF CHEMIST

CHEMIST MANUFACTURING

SHIFT CHEMIST

LAB CHEMIST

PAN MEN

CENTRIFUGAL OPERATORS

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ENGINEERING DEPARTMENT INTRODUCTION

This department takes care of all the repairs-and maintenance units. The Chief Engineer is the head of the department. Deputy Engineer and an instrumentation engineer assist him.

The department is responsible for rectifying any breakdown machinery & equipment.

FUNCTIONS

CHART OF ENGINEERING DEPARTMENT

GENERAL MANAGER

CHIEF ENGINEER

STORE DEPT

DEPT.CH. ENGINEER

WOKE SHOP


INSTRUMENTATION

ENGINEER

TRAINEE ENGR.

INSTRUMENTATION

TECHNICIANS

FITTERS

HELPER

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ELECTRICAL ENGINEERING DEPARTMENT INTRODUCTION

This department takes care of all repairs and maintenance of fittings and fixtures of the plant. The Senior Engineer is the head of the department. Assistant Electrical engineer and junior engineers assist him.

ELECTRILCAL ENFINEERING DEPARTMENT

GENERAL MANAGER

SENIOR ELECTRICAL

ENGINEER

ASSISTANT

ENGINEER

SUPERVISORS

WORKMEN

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POWER PLANT

Power plant uses the fiber of processed sugarcane (basgass) as fuel to generate electricity in an environment responsible manner.

An integrated 15 M W power plant generator and supplies electricity to the state grid produced from sugarcane waste. Steam used to rotate turbines, 7WM power is utilized within the plant, and remaining power is supplied to KPTGL.

CHART OF POWER PLANT

GENERAL MANAGER

HEAR POWER PLANT

ASSISTANT

ENGINEER

JUNIOR ENGINEER

BOILER OPERATORS

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DISTILLERY

Distillery plant was installed in the year 2002 at the same location,

Spirit produced at the distillery plant, Molasses is converted into rectified spirit.

Molasses is waste product form sugar juice. It is the byproduct in sugar industry.

Production of spirit is subject to control of excise department (Karnataka State Government) the same department makes distribution and sale of spirit only.

Ethanol also subject to control of excise department, 0.55 Ethanol is used in petrol.

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CHART OF DISTILLERY PLANT

GENERAL MANAGER

DISTILLERY MANAGER

SHIFT CHEMIST

SENIOR CHEMIST

LAB CHEMIST

DISTILLERY

OPERATORS

HELPER

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___________________________________________________________ PRICING POLICY

INTRODUCTION

Unlike other consumer goods, sugar cane will not be differing in price, because it is subject to control of Government will fix the sugar price.

Price for export will be fixed by the firm. It is management’s policy

to fix the price.

Sugar Price

Sugar is a controlled commodity in India the essential commodities Act, 1995. Sugar prices in the country can be classified into two broad categories at the user end as free market prices and prices of sugar through public distribution system. The GOI announces PDS sugar prices based on levy sugar prices fixed by it and the subsidy to be provided through budgetary system.

The realization to sugar mills from government levy quota is called levy prices. Levy prices are fixed by the GOI based on SMP for the year. But usually levy prices are very low and fall below the cost of production. Therefore the producers are left with only free sugar quota to run the business profitably.

GOI controls extend to free market prices also though the issue of monthly dispatch orders to all the sugar mills and the country on demand supply situation in the country.

In September IS1998, PDS sugar prices were increased from Rs.11.40 per kg to Rs.

12 per kg.

The sugar price range in the country for last few years is given below the sugar prices move in close relation to production of sugar and the inventory in the country.

Sugar prices are the lowest in India when compared to the leading sugar consuming countries in the world. Converted into India rupees the prices equivalent in

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Japan is of the order        Rs.64.8 per kg

USA        Rs 31.5 per kg

China        Rs.25.78 per kg

Indonesia        Rs. 18.62 per kg

Brazil and Pakistan        Rs.17.9 per kg and

Sri Lanka, Thailand and Malaysia        Rs.17.81per kg

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CHAPTER 5

SWOT ANALYSIS

STRENGTHS

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WEAKNESSESS

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OPPORTUNITIES

THREATS

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CHAPTER 6

FINDINGS AND SUGGESTIONS

FINDINGS

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SUGGESTIONS

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CONCLUSION

Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) has stated of art equipment and Hilly competent technical team that produces one of the highest quality sugars. It is growing very fast in the industry. It is dynamic achievement of lady entrepreneur Mrs.Vidya.M.Murkaumbi.

Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) is not only concentrating in production of quality of quality sugar, but also engaged in developing new seeds which will be more suitable to the climate.

Irrigation planning by Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) is appreciable, It arranges loans from banks for pipeline facilities fanner’s fields. Lots of irrigation is being done under this scheme and repayment to banks in made from the bill of concerned farmer.

Chamundeswari Sugar Limited,(Lessee of H.S.S.K Ltd.,) is agro based and monsoon season hilts the production. This is the reason when sugar factories will be closed because of inconvenience of harvesting and even transporting the cane factory Indian sugar industry is highly fragmented with organization and unorganized ;players. The unorganized players mainly produce gur and khandsri, the less refined form of sugar.

The company is very active in trading portfolio and second last merchant exporter in FY 02-04 when the sugar was being exported. It is the largest raw sugar importer in the current fiscal year. The company’s trade flow in sugar is largest its own manufactured products.This leverages the company to understand to understand the market and to play an active part in both domestic and international markets.

The company is the only one in the industry today with a formal risk managements system in place. As a significant step forward in dedging own sugar

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price risk as well as that of customers, the company because an active corporate member on NCDX dealing in sugar commodities to trade in spot market and in future.

It has a strategic relationship with one of the largest overseas players Tate and Lyle plc, UK and continues its focus and plans to play an active role in global market.

With an able management and robust vision, Chamundeswari Sugar Limited, (Lessee of H.S.S.K Ltd.,) today is one of the fastest growing manufactures in the country.

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LEARNING EXPERIENCE GAINED BY THE CANDIDATE DURING THE INPLANT TRAINING.

My overall experience in the company was very pleasant. The response and support got from the management and staff was appreciable. I would like to mention the name of MR.NARAYAN sir and who guided me in this project and who helped me in the course of my in plant training. The atmosphere and working conditions were encouraging in the company.

In plant training in the company helped me to know the practicalities. I learned about management from the practical perspective and I learnt about organization as to how it works in management aspects and the policies and procedures. Totally it was a highly useful training for me in the company. This has added value in my academic learning.

To conclude this project has given me practical exposure in the study of organization. It was a dream come true for me who always wanted to work in the industries which is my area of interest and it was a great experience working where I learnt many things about the functioning of an organization in accordance with the present market trends. The main purpose of the organization study is to make the students acquainted with the practical knowledge about the overall functioning of the organization. It given me the opportunity to study the human behavior and also makes one ready to face different situations, which normally would come across while on work in the office or factory environment

During the first week, it was totally a new experience entering into the organization. On the first day of the training, senior assistant (HRD) detailed us very clearly about the guidelines to be followed with respect to maintaining the discipline of the organization.

After the initial session, they were taken to different departments and it was great interaction with the various departmental heads and i came to know the real situation, duties, responsibilities and functions of the departments. I visited the R & D

department, i came to know about the various tests undertaken by them to achieve the desired level of quality.

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Each department has separate Manager, Deputy Manager, Purchase Officer, Assistant Officer and Supervisor. It was really a fruitful and great experience while working in the organization. Employees from every corner of the department helped me in getting the required information for the successful completion of this project. They cooperated well when we had to disturb them with so many queries in our mind to be cleared from the concerned person during the visits to the respective

departments.

The atmosphere was so friendly and we did not feel any difficulty during the whole training period of four weeks, which gave me a great deal information and knowledge as to how an organization really functions

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BIBLIOGRAPHY

SL NO

TITLE

AUTHOR

PUBLISHERS

EDITION

Marketing

Prentice - Hall of

1

Management

Philip Kotler

India Pvt Ltd.

2005

Human

Tata Mc Graw-hill

Resource

Publishing com.

2

Management

K. Ashwathappa

Ltd

2000

Research

3

Methodology

C R Kothari

Wishwa Prakashan

2nd edition

Website

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ANNEXURE

Balance sheet as on 2007-2008

Sl

Expense

Amount

Sl

Income

Amount

NO.

NO.

1

Opening stock.

1

Byproduct sales.

a.  molasis.

a)

molasis

19979419.00

b.

Sugar production

14951915.00

b) pressmud

164875.00

990000.00

15941915.70

c) Ash sales

26520.00

d) damaged bags

10000.00

20180814.00

2

Cane purchase a/c

143080357.00

2

Cane purchase

504739.00

3

Cane transportation

3866365.00

3

Closing stock.

a.  Molasis

16132252.50

b.

cane production

956250.00

17088502.50

4

560580.00

4

Production cost

178010552.25

5

Cane purchase tax

7733514.00

6

1546702.00

7

Production cost

43055144.00

Total

215784607.75

Total

215784607.75

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