INTRODUCTION OF ORGANIZATION STUDY.

An organization is an on going process of defining and grouping the activities of the

enterprise. It also establishes the authority relationship among them. The process concept

stresses dynamic nature of an organization and it permits an organization to be

considered as an open adaptive system.

An organization is a group of people who are working together towards a common

objective or goal. In this sense, it is a group of people bound together in a formal

relationship to accomplish certain common objectives.

According to the Peter F Drucker, Organization is not an end in itself, but a means to the

end of business performance and business results. Organization structure is an

indispensable means and the wrong structure will seriously in pair business performance

and may even destroy it. Organizational structure must be designed so as to make

possible to attain objectives of the business

OBJECTIVES OF THE STUDY

1. To know the objectives of the organization.

2. To study the functions of the organization.

3. To study the profile of the company.

4. To know the functional work of the each department in the factory.

5. To know the facilities provided to the workers in a factory.

6. To study the production and sales of last past five years.

INDUSTRY

PROFILE

2

INTRODUCTION

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 1930's when a few vacuum pan units were established in the sub-

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 dispersed into Southern India, Western India and other parts of Northern India.

India is the largest consumer and second largest producer 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 second largest producer of sugar in the world.

The Indian sugar industry has not only achieved the singular distinction 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 sugar industry is amongst the largest agro processing

industries, with an annual turnover of Rs150bn. 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 farmers, their dependants and a large mass of agricultural 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.

3

GLOBAL SCENARIO (INTERNATIONAL TRADE OPPORTUNITY)

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

cogen in the future, 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 alternate set

of markets for diverting surplus production. Similarly, in case of deficits, raw sugar

imports could help bridge the supply gap.

Globally, in most of the key geographies like Brazil and Thailand, regulations have a

significant influence on the sugar sector. Perishable nature of cane, small farm

landholdings and the need to influence domestic prices; all have been the drivers for

regulations. In India, too, sugar is highly regulated. Since 1993, the regulatory environment

has considerably eased, but sugar still continues to be an essential commodity under the

Essential Commodity Act. There are regulations across the entire value chain 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 to be

considered as an essential commodity. According to a recently conducted nationwide

survey, nearly 75 percent of the total non-levy sugar is consumed by industrial, small

business and high income household segments. Further, even for a low income household.

INDIAN SUGAR INDUSTRY SCENARIO

In an era where there is a need for inclusive growth, the sugar industry is amongst the few

industries that have successfully contributed to the rural economy. It has done so by

commercially utilizing the rural resources to meet the large domesticdemand for sugar and

by generating surplus energy to meet the increasing energy needs of India. In addition to

this, the industry has become the mainstay of the alcohol industry. The sector supports

over 50 million farmers and their families.The sector also has a significant standing in the

4

global sugar space. The IndianDomestic sugar market is one of the largest markets in the

world, in volume terms. India is also the second largest sugar producing geography. India

remains a key growth driver for world sugar, growing above the Asian and world

consumption growth average.

SUGARCANE AREA AND PRODUCTION

FROM 2003-04 TO 2008-2009

YearArea under sugarcane (Million

hectares)

Sugarcane Production

(MMT)

2003-

043.7 241.1

2004-

054.2 299.2

2005-

064.4 298.4

2006-

074.3 281.6

2007-

083.9 221.2

2008-

093.7 201.9

5

INDUSTRY STRUCTURE

Indian sugar industry can be broadly classified in to two sub sectors, the organized sector

i.e. sugar factories and the unorganized sector i.e. manufacturers of traditional sweeteners

like Gur and khandsari. The latter is considered to be a rural industry and enjoys much

greater freedom than sugar mills.

The production of traditional sweeteners Gur 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.

Since the sugar industry in the country uses only sugarcane as an in input, sugar

companies have been established in large cane growing states like Uttar Pradesh,

Maharashtra, Tamil Nadu, Karnataka, Punjab and Gujarat. Uttar Pradesh leads the tally

by contributing 24% of the country’s total sugar production and Maharashtra stands next

with 20% contribution.

The farmers 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 numbers of sugar companies in the private sector are located in southern India, in

the states of Tamil Nadu, Andhra Pradesh and Karnataka.

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 are in

various stages of implementation. A Few such units are under implementation in the co-

operative sector as well.

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 input 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 better understanding.

Licensing policies : Till recently sugar is used to be amongst the 9 industries under

licensing provision. The major criterion for issuing new licenses were as follows

1. New sugar factories should have minimum economic capacity of 2500 TCD with

no maximum limit on capacity. However in industrially backward areas, co-

operative & public sector new units are allowed with an initial capacity of 1750

TCD subject to the condition that the units would expand their capacities to 2500

TCD within a period of 5 years of going into production.

2. New sugar factories are permitted subject to the minimum distance of 15

kilometers between the proposed new sugar factory and an existing / already

licensed sugar factory.

3. Other things being equal, preference in licensing is given to proposals from the

co-operative sector, public sector, private sector, etc. in that order.

4. The past policies have helped in planned development of sugar industry taking

into account economic size and availability of sugarcane and simultaneously

avoiding unhealthy competition. The mushrooming growth of co-operatives,

whose performance is worsening of late, is also an offshoot of these policies.

7

5. 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 reduced

validity of Letter of Intent (LoI) from three years to one year.

6. The sugar industry is relicensed since August 1998 and any interested

party/person is 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 factory.

7. No incentive will be provided and new units have to adhere to levy quota

regulation from first year of operations.

Pricing of sugarcane

Government of India regulates & controls the  rates  of sugarcane supplied to the mills by

farmers. The Statutory Minimum Price (SMP) announced by GOI year on year is used as

a benchmark by the state governments to fix their State Advised Price (SAP). The SAP

could be a recovery linked average or just a flat rate. The above said pricing procedure

has been adopted so as to protect the farmers & ensure them a good price for cane. Also it

reduces the impact of cane prices on the cost structure of different mills depending on

their location.

SUGAR PRICING & DISTRUBITION :

Government enforces a dual pricing policy for the sugar industry. Presently 10%

of the production is sold at a fixed price to the government which is used for PDS and

other market operations.

The new & expanded sugar plants are exempted from the levy quota for a period of five

to eight years which makes the new sugar units more profitable. But mills under levy are

free to sell the remaining 90 % of sugar (as 10% is supplied to government) in the open

market at the market determined price.

8

The government controls supply of sugar in the open market through monthly sugar

release notifications based on market conditions and thus influencing the open market

prices to a great extent. Though, the incentive scheme has achieved the objective of

attracting more players, due to better margin than existing players, the returns for older

units reduces substantially due to low increase in levy prices for controlling fiscal

deficits. However new units face the problem of procuring sugarcane from the farmers

and sometimes end up paying a premium to SAP.

Import Export Policy: Sugar exports were governed by the Sugar Export Promotion Act,

1958, which stipulates that the Government can use 20 per cent of the country’s total

production for sale abroad. Till a very recent past imports and exports were routed

through Indian Sugar and General Industry Export Import Corporation Limited

(ISGIEC), a consortium of apex organizations of private and co-operative sugar mills and

government agencies. The imports and exports are mainly resorted to when there is

mismatch in domestic sugar production. The government decimalized exports in 1997

allowing private parties to export sugar. The government has also put sugar imports on

Open General License (OGL) allowing private parties to import sugar. The imported

sugar has been subjected to a customs duty of 20% from January 1999, so as to provide a

level playing field to the domestic industry, which supplies sugar at levy prices to GOI,

for PDS supply.

Excise and taxes : Some of the state governments impose purchase cess on  the sugarcane

purchases made by the sugar mills, which varies from state to state. The states of Assam,

Nagaland, Rajasthan,  Orissa, West Bengal & Goa which produce small quantities of

cane, however, do not levy cess on the sugarcane purchases.

9

Porter’s Five Force Model:

Michael Porter provided with a framework that explains how an industry gets influenced

by the five forces. The strategic business manager seeking to develop an edge over rival

firms can use this model to better understand the industry context in which the firm

operates.

10

Bargaining Power of Suppliers

The price of raw-materials (sugarcane) is fixed by the Government. The suppliers are

farmers and the total of suppliers is very high. So, there is no such bargaining power of

suppliers in sugar industry.

Bargaining Power of Customers

The bargaining power of customers determines how much customers can impose

pressure on margins and volumes. But in sugar industry the price of sugar is fixed by the

Government. So, there is no bargaining power of customers in sugar industry.

Threat of New Entrants

The competition in an industry will not be so higher, as sugar is essential commodity; but

the Government is encouraging & taking more interest in developing & increasing the

number of sugar company. So it is easier for other companies to enter this industry. In

such a situation, new entrants could change major determinants of the market

environment (e.g. market shares, prices, customer loyalty) at any time. There is always a

latent pressure for reaction and adjustment for existing players in this industry. The threat

of new entries will depend on the extent to which there are barriers to entry.

These are typically

Economies of scale (minimum size requirements for profitable operations),

High initial investments and fixed costs,

Scarcity of important resources, e.g. qualified expert staff

Access to raw materials is controlled by existing players,

Distribution channels are controlled by existing players,

Existing players have close customer relations, e.g. from long-term service

contracts,

Legislation and government action- the sugar industry is totally controlled by

strict regulation of government.

11

Threat of Substitutes

A threat from substitutes exists if there are alternative products with lower prices of better

performance parameters for the same purpose. They could potentially attract a significant

proportion of market volume and hence reduce the potential sales volume for existing

players. This category also relates to complementary products. Similarly to the threat of

new entrants, the treat of substitutes is determined by factors like

Current trends- this is most important because the sugar industry do not have any

trend for consumption of sugar.

The substitutes products like gur & khandasri which are substitutes of sugar.

But there is no such impact of substitutes which create a threat to sugar

industry.

Competitive Rivalry between Existing Players

This force describes the intensity of competition between existing players (companies) in

an industry... Competition between existing players is likely to be high when

There are many players of about the same size- the sugar industry have many

players almost many are of same size, so there exist the competition between the

existing players.

There is not much differentiation between players and their commodities, but

there is much price competition- the commodity sugar is similar but the quality of

are different so the prices followed according to the size & quality ex: large size,

medium size or small size.

There is no much competition between competitors as sugar is controlled commodity &

the prices, the quantity of sugar supplied to market is fixed by the Government.

12

PEST analysis:

It is very important that an organization considers its environment before beginning the

marketing process. In fact, environmental analysis should be continuous and feed all

aspects of planning. The organization’s marketing environment is made up of:

1. The internal environment e.g. staff (or internal customers), office technology,

wages and finance, etc.

2. The micro environment e.g. our external customers, agents and distributors,

suppliers, our competitors, etc.

3. The macro environment e.g. Political forces, Economic Forces, Socio-cultural

Forces, and Technological Forces. These are known as PEST Factors 

.

The political environment of sugar industry is not stable it keeps on changing as per the

government change because of the production capacity and the price fluctuations as per

the government changing pattern. The government polices affects the industry because

the policy is framed by government gives the guide line to the operation of the industry.

The government has restricted the open sale of sugar. The sale must be packed so that

there will be less amount of wastage.

13

Political

PEST

Social Technological

Economic

Political Analysis:

1) Pricing Regulation:

The price and supply of sugar to free market is fixed by the Government. Even

the price of sugarcane is fixed by the Government. So, there is more influence of

political environment in sugar industry.

2) Taxation:

The taxation policy of the government changes with time & this change effects

the industry to a larger extent. Any increase in the tax policy will decrease the

profit margins of the industry & vice-versa. And sugar industry is enjoying the

taxation policy as there are more tax exemption & reduction in sugar industry.

14

3) Wage Legislation:

The government has taken several initiatives in the welfare of the workers. The

government has came with the acts of Minimum Wages Act, which regulates a

company to pay a certain fixed amount of wages to their workers. The

government also has introduced the Work Limit for the manufacturing companies.

4) Mandatory employee benefits:

The government has made it mandatory for the companies to provide their

employees with certain benefits like Insurance, provident fund, allowances, etc. if

any company who doesn’t follow it will be legally charged.

5) Industrial safety regulations:

It has been made mandatory for the industry to provide their employees with the

training to handle the equipments & must also provide some safety accessories

like eye gears, helmet, shoes, etc. to ensure the safety of the employees & workers

and if the sugar company has COGEN plant then the company has more safety

policy which has to be followed.

6) Environmental safety act:

The viscose industry is viewed as the one of the polluting company. The

government has taken several measures to prevent the industry from polluting the

environment. Any industry not following the rules of this policy will be closed

down by government.

7) Export-Import policy:

The government has made it very easy to export the sugar to the other countries.

There excise duty is less & infact Government is promoting the industries to

export more sugar.

15

Economic Analysis:

1. Type of economic:

The performance of an industry depends upon the market & economy in which it

performs. As sugar is a essential commodity which we use in our daily life.

2. Infrastructure quality:

The infrastructure of the country affects the performance of the industry. As India

is lacking in infrastructure the industry is facing the problems like transportation,

warehousing, etc

3. Skill level of workforce:

We find labor force abundant in India but the majority of the labors are not

skilled, their efficiency level is poor & must be trained especially for this type of

manufacturing activity.

4. Labor cost:

The human resource is abundant in India & it is also cheap. This is one of the

factors which control the cost of the industry. But today we find that as the

country is developing this resource is also being expensive.

5. Economic growth rate:

The current growth of the country is 9% which is very encouraging for the

development of these industries.

16

Social Analysis:

1. Demographics:

The demographics factor like Age, Gender, Occupation, Income level, etc does not

play an important role in the demand of the product by the customers.

2. Class structure:

Sugar is essential commodity and it is used by all class of people and the

people who are Below Poverty Line( BPL) are also consuming this commodity

through Public Distribution System (PDS).

Technological Analysis:

1. Recent technological development:

This industry was facing the problem of the pollution but thanks to the technology

to introduce machines (EFFLUENT TREATMENT PLANT) & ( WATER

TREATMENT PLAN) which control the emissions of toxics, recycle the

effluents & water, etc.

2. Technology’s impact on product offering:

The technology has enhanced the productivity of this sector & has reduced cost.

As a result we can find the Tones per Day capacity has increased drastically.

3. Impact on cost structure:

The development in technology has reduced the cost & also encouraged the

companies to produce more.

Conclusion:In order to sustain in the market & to capture more market share the

company performing in the sugar industry must keep track of these factors or it would

become difficult to sustain in the market.

17

COMPANY PROFILE

18

INTRODUCTION

ANOTHER NAME FOR SWEETNESS:

Davangere sugar company was started in 1970’s. The company is situated in kukkuwada

near Davangere. Firstly the nature of the company was public limited, then in 1996 the

company became private limited company i.e. the administration and management of the

company came under “shamanur group of industries”. Now the company is totally

privatized and named as “Davanger sugar company private limited”.

HISTORY:

The proposal to set up a Sugar Factory at Kukkuwada took a concrete shape with the

development of vast irrigation facilities created by network of canals of Bhadra Dam in

the Taluk of Davangere, Channagiri, Honnali and Harihar and nearly 1,20,000 hectares

of the land brought under irrigation in 1970-80 within radius of 100 Km from the present

location of davangere sugar company private limited, at Kukkuwada village.

To exploit this vast irrigation potential, a Sugar Factory with a crushing capacity

of 1250 TCD was established by the name davanger sugar company limited, as a Joint

Sector Government Company in the year 1970 at the initiative of the local Farmers,

Leaders of the above Talukas with the active financial participation and guidance of

Karnataka Agro Industries Corporation and KSIIDC, who substantially contributed to the

Equity Funds of the company. The other financial institutions like IDBI, IFCI and ICICI

also participated in the Equity of the company to some extent.

19

ABOUT CHAIRMAN

The chairman of the company is Mr. S.Shivashankarappa.is the chairman of all

shamanur group of industries. He is also the present MLA of Davangere city. He is also

the chairman of Bapuji group of Institutes, including Bapuji Dental college under its wing

& it is the third largest college in Asia.

ABOUT BOARD OF DIRECTORS

1) Managing Director: Mr.S.S.GANESH.

2) Promoter Director: Mr.S.S.MALLIKARJUN.

3) Independent Director: Mr.S.S.JAYANNA.

4) Independent Director: Mr.K.V.SOMASHEKAR.

5) Nominee Director: Mr.K.P.SURENDRANATH.

PROMOTERS:

a) Promoters: Mr.S.SHIVASHANKARAPPA,

Mr.S.S GANESH AND

Mr.S.S.MALLIKARJUN are the core

Promoters of DSCL.

b) Interests of promoters: Shamanur group of industries have varied

Interests in the field of sugar & cogeneration,

Distillery, Banking, Rice Mills,Wholesale

Trading and also in Education Institutions

( including Medical, Engineering, MBA,

Nursing, Phamacy and also Primary and

Secondary Education.)

20

c) EXPERIENCE: The Shamanur group is headed by

Mr. Shamanur.Shivashankarappa who has

experience over 45years in the field of industry,

Trading &Education & Mr.S.Shivashankarappa is also

the MLA of Davangere.

ABOUT EMPLOYEES:

The company has 85 employees who are working under different

department who are skilled and has got special training under their respective department.

The company after privatization is automatized and it is a capital intensive where as

before privatization it was labor intensive. All the employees are educated according to

their respective fields as these employees have to supervise and work with machine.

The company also has unskilled labor that is daily wage paid workers. These

kinds of workers are not permanent, they are called as seasonal workers and the strength

is 110.

The company also has permanent workers who are known as helpers in the

company. The strength of permanent labor is 217. These type of permanent labor are

semi-skilled and are also called as HELPERS, they are divided in different departments

of the organization according their skill of work and experience.

21

MANAGING DIRECTOR

PRODUCTION & MAINTENANCE DEPT

FINANCE DEPT

SALES DEPT

H.R.DEPT CANE DEVELOPMENT

DEPT

VICE PRESIDENT

ORGANISATION STRUCTURE

ORGANISATION DESIGN:

The structure & design of DSCL is functional that is it is a functional

organizational structure. The company has subdivided into functional units such as,

engineering, production & maintenance department, finance department, sales

department, human resource department & cane development department. It is a

traditional kind of organizational design followed by DSCL.

CHAIRMAN

22

MANAGEMENT VISION STATEMENT

It is proud on the part of the company that about 20000 acres of land has been

brought under sugarcane cultivation for the ensuring season 2007-08. The company could

able to achieve this on account of co-operation of the farmers. The management has a

vision to bring at least 25,000 acres of land under sugarcane cultivation for the season in

the next coming years. This is with a view to crush at least 8.00,000 tones of sugarcane to

achieve the prosperity of the company

FACTORY LOCATION

The plant is located at KUKKUWADA village which is 18 Kilometers far away from

Davangere City.

LAND

The factory is located over a widespread area of 151 acres. The acreage includes green

belt and other necessary facilities for maintaining clean environment.

LOCATIONAL ADVANTAGE

The factory is located in area surrounded by sugarcane growing belt. About 60,000 acres

of land is covered under the command area. It is situated at distance of about 15 Kms

away from NH4 and about 18 Kms away from railway goods shed. The sugarcane

growing areas are located within the radius of 25 Kms from the factory.

SUGAR PRODUCTION PLANT:

The sugar generation plant is fully automatized . The total process that is from sugarcane

crushing to packaging is done through machinery, but supervision is needed and frequent

operating of machinery is required.

The company has licensed cane capacity of 5500 TCD, but the company has a plant of

capacity of 3500TCD.

23

1)POWER GENERATION

The company started Power Generation Plant from 24th march, 2004. The power

generation plant capacity is 24.45 Mega Watt per day. The present capacity of utilization

is 95% of total capacity. The power to be generated from the plant is fed to the 64 Kva

sud-station set up by KPTCL, at a distance of 200 yards from the cogen plant in

Kukkuwada village.

HIGHLIGHTS OF POWER PLANT

1) The plant is regarded as one of the best plant in India.

2) The British Broad Casting Corporation ( BBC) has prepared a documentary on

COGEN power plant and telecasted worldwide.

3) The plant is one of the power efficient plants, first of its kind in Karnataka.

4) The internal consumption of power is also minimum due to latest technology

adopted in sugar manufacturing during the season.

5) The power export ti KPTCL is to the extent of about Rs. 4.80 Crs per month during

off season and about Rs.3.00 Crs per month during the season.

6) The power plant is managed by the team of professionals in the field.

7) The Ministry of Non-Conventional Energy (MNES) has sanctioned subsidy

of Rs. 4.00 Crs, which is awarded for the prompt repayment of interest and the principal

amount in time. On account of this interest subsidy the rate of interest charges has been

reduced from 11.25% to 9.25% p.a.

8) The power plant use baggasse as fuel during the season and Non-coking Coal as

fuel during off season to generate power.

24

9) The power plant is also fully automaticed control system. The working plant is

supervised through controlling panel. If any technical default is found, the

immediately action is taken and correction is made.

2)WATER TREATMENT PLANT (WTP):

The WTP was also started when power generation plant was started, as water is very

much important during the process of power generation. The WTP acts like a heart of

power generation plant & also sugar plant also need cooling water & steam produced by

WTP.

3)EFFLUENT TREATMENT PLANT (ETP):

The ETP was also started when power generation plant was established. ETP is a process

of treating solid & gaseous wastages before liberating to environment. The wastages like-

fly ashes, ashes, nitrogen, carbon monoxide & sulphur dioxide. In short Effluent

Treatment plan is a device used to control gas pollution.

SOURCES OF REVENUE GENERATION:

a) SALE OF SUGAR.

b) SUPPLY OF POWER TO KPTCL.

c) SALE OF MOLASSES.

DEPARTMENTS IN THE ORGANISATION:

The company has five departments as follows;

1) Sugar Production & Maintenance Department ( including COGEN & Water

Treatment Plant).

2) Finance Department.

3) Human Resources Department- Personnel Department.

4) Cane Development Department.

5) Sales Marketing Department.

25

PRODUCTION and MAINTAINANCE DEPARTMENT:

ANOTHER NAME FOR SWEETNESS

The company’s main production is sugar. As DSCL is surrounded with sugarcane

growing belt, the sugar plant was started in 1970’s, but after the induction and interest

taken by shamanur group of industries in to the new management in 1996, the company is

making steady progress with all new plans & strategies. The crushing capacity has

increased in stages as follows:

1st stage from 1250 TCD to 1500 TCD at a cost of Rs. 110.00 lakhs

2nd stage from 1500 TCD to 2200 TCD at a cost of Rs. 1900.00 lakhs

3rd stage from 2200 TCD to 2500 TCD at a cost of Rs. 2500.00 lakhs

4th stage from 2500 TCD to 3500 TCD at a cost of Rs. 3500.00 lakhs

Now the company is planning to go for 5500 TCD production capacity plant.

The company has adopted both production & maintenance in one department. As the

process of manufacturing is automatized and there is frequent need of technician and

engineering background employees in the process of production to supervise, control

and maintenance of the plant. And even the manufacturing of sugar is of seasonal basis

that is the manufacturing of sugar is processed 8-9 months in a year. As it depends upon

the production & supply of sugarcane. The remaining 3-4months the plant goes under

maintenance process.

TYPES OF SUGERS

There are total three size of sugar as follows,

a) Large size

b) Medium size

c) Small size.

The company is producing two types of sugar that is medium (M30) and

small size (S30) and their ratio for production depends on the market demand. And

also cost of producing large size sugar is comparatively high than medium and small

size.

26

RECOVERY OF SUGAR FROM SUGAR CANE :

Recovery of sugar from sugarcane means the amount of sugar we get from crushing

& processing from a particular amount of sugarcane.The recovery of sugar from

sugarcane is 9-10% which is comparatively less from other parts of India where

sugarcane is produced. For example the recovery of sugar from sugarcane near Belgaum

is 13-14%.

Then to the company is making good profit as the cost of production is controlled by

frequent supervising, testing quality of sugar, juice analysis in laboratories by the

chemists to get the finest quality of sugar, best utilization of by products, as the baggasse

is used for further generation of power and the company itself is producing sulphur

dioxide as it is one of the ingredients in preparation of sugar, but the sulphur is

purchased.

EMPLOYEES OF PRODUCTION DEPARTMENT

As the sugar plant is automotized, there is more need of technical &

engineering background employees who are well educated and can handle machines

systematically. The company also has employed technically skilled & engineering

background employees who are mainly employed to supervise the process, workers,

helpers.

PRODUCTION DEPARTMENT

The sugar production plant has one head for production department i.e; production

general manager,39 supervisors and other 76 included with trainees, workers & helpers.

The total number of people employed in production department are 116.

27

D.G.M. MECHANICAL CHIEF CHEMIST ELECTRICAL ENGINEER

CHIEF ENGINEER SHIFT CHEMIST SUPERVISOR

DEPUTY CHIEFENGINEER

LAB CHEMIST ELECTRICIAN

SENIOR ENGINEEROPERATOR HELPER

ASST.SHIFT ENGINEER HELPER

INSTUMENTATION MANAGER

HELPER

TECHNICIAN

FOREMAN

OPERATOR

HELPER

STRUCTURE OF PRODUCTION DEPARTMENT:

GENERAL MANAGER

28

PROCESS OF MANUFACTURING SUGAR:

1. CANE UNLOADERS:This is the first stage in the process where sugarcane

is lifted through crane lifters.

2. PREPRATORY DEVICES:Here the sugarcane is chopped, leveled &

fiberized.

3. FIBERIZER CARRIER: Here the carrier takes the chopped, leveled &

fiberized baggasse to Donnely Chute.

4. MILLS:There are totally 4 mills in the plant. Each mills works frequently one

after another. In first mill pure juice is extracted from the baggasse and then the

pure juice is pumped into pure juice tank. And baggasse is carried to 2nd mills

with mixture of water & juice came from the 2nd mill.

29

In the 2nd mill again juice is extracted from the baggasse and pumped to another

juice tank. Then again baggasse is mixed with hot water and carried to 3rd mill.

In the 3rd mill there is a process called water imbition where again juice is

extracted from the baggasse and the baggasse is send to 4th mill. Here also water is

mixed with baggasse.

Then finally in 4th mill again juice is extracted and baggasse is carried to

cogeneration plant through baggasse evilator.After getting four different type of

juice, these juices are mixed in one tank and boiling process starts from here.

BOILING, HEATING & EVAPOURATION STAGE:

a) In first stage the juice is heated in vapour line juice heater at 60c , then send to

raw juice heater.

b) Then from raw juice heater it is send to clarifier where juice is cleaned and

purified and all impurities are thrown out. And the purified juice is pumped to

clear juice heater where again juice is heated.( There are 6 RJH & 2 clarifiers)

c) Then from clear juice heater the juice is pumped to semi kistner body where juice

is again heated up to 102c, then pumped in to sulphitation tank

d) In sulphitation tank, sulphur dioxide is added and then pumped to evapouraters.

( 2 sulphitation tank & 8 evapouraters). But only 4 evapouraters are used and

other 4 are alternatives.

e) Then from evapouraters the juice is send to syrup sulphitor where again juice is

mixed with sulphur dioxide, then send to vaccum pan.

f) In vaccum pan process again the syrup is boiled and crystal form starts from this

process. There are 7 vacuums pumps with capacity of 60 tones. Then it is send to

crystalizers.

g) In crystalizers, the syrup gets crystallized and there are 14 crystalizers, then it is

send to centrefugal machines, where improvement of quality & color is assured.

There are 3 stages in improvement, then it is send to batch type centrefugal.

( There are 13 centrifugal machines & 14 crystallizers)

30

h) In batch type centrefugal machines, there will be separation of molasses, then

steam wash and lastly water wash, then send to hoppers.

i) In hoppers the sugar is separated according to the quality & grade of sugar, then

sugar is send to sugar bins.( As the company is producing two types of sugar that

is medium & small size, it is separated and stored in two sugar bins).

j) Lastly sugar is packed in 50 Kgs and 100Kgs of bags and send to Godown

through a conveyer. (All this process of packaging and storage of manufactured

product is done through machines, which gives clear picture that the company is

capital intensive & frequently working on reducing cost of production.)

31

SUGAR PRODUCED IN LAST 5 YEARS.

SL.NO YEAR SUGARCANE

CRUSHSED(M

T)

RECOVERY SUGAR

PRODUCED(qtls)

1 2004 to 2005 545912 10.22% 561635

2 2005 to 2006 344865 8.73% 300923

3 2006 to 2007 157056 8.64% 135730

4 2007 to 2008 300537 9.14% 276624

5 2008 to 2009 529156 9.01% 486208

NOTE: The crushing season for the year 2008-09 was very significant as in this

crushing season the company had highest quantity of sugarcane crushed and this is a

record quantity in the past history of the company.

This made company to plan for increasing capacity of plant from 3500TCD to

5500TCD. The Managing Director & Board of Directors started working on the plan &

the company has set up a target of crushing 7, 00,000 Metric Tones sugarcane in 2009.

FACTORS AFFECTING PRODUCTION

Sugarcane availability depends on:

Area under sugarcane cultivation:

The area under cultivation of sugarcane in the proximity of the mill determines the

amount of sugarcane that can be made available. Crop switching from sugarcane to

other crops effectively lowers the area under cultivation of sugarcane.

32

Climate and irrigation facilities:

Sugarcane is a tropical crop which requires adequate water and sunshine.

In addition, monsoons can affect the crop yield and quality of the crop. The state of

UP is supplied water from the Ganga, which along with its tributaries and associated

canal system accounts for 34% of the total river water available in the country

(Source: Ministry of Water). This available perennial water reduces the state's

reliance on seasonal monsoons.

Crop diseases and pests:

Crop diseases affect both the quantity and quality of sugarcane. Harvests

have been impacted severely by insects and pests (Eg. Wholly Aphid). Several sugar

factories are currently investing in research and development in the field of

Entomology to control such pest outbreaks.

Sugarcane yield:

This is the total sugarcane output per hectare of land. It depends upon

several factors like climate, soil, variety of sugarcane, and development measures

undertaken by sugarcane farmers, agencies, co-operatives, government, and sugar

manufacturers. Agricultural engineering and extension services, usually undertaken

by individual sugar mills, have played an important role in increasing sugarcane

yields

Diversion of sugarcane to other products:

The sugarcane producers may not supply the sugarcane to a sugar manufacturer

and divert the production to other products like gur, and khandsari which are forms of

crude sugar.

33

CHIEF ENGINEER CHIEF ELECTRICAL CHIEF CHEMIST

SENIOR ENGINEER SENIOR ENGINEER JUNIOR CHEMIST

SHIFTENGINEER

SHIFT ENGINEER OPERATOR

JUNIOR ENGINEERJUNIOR ENGINEER HELPER

OPERATOR ELECTRICIAN

INSTUMENTATION MANAGER

TECHNICIAN

ENGINEER

HELPER

GENERAL MANAGER (COGEN)

HELPER

HELPER

COGEN- POWER GENERATION PLANT

Hierarchy in COGEN plant:

34

ANOTHER NAME FOR POWER :The name of power generation plant is

COGEN. COGEN was established or commissioned on 24 th march 2004. Till then there

was only sugar plant in DSCL. As there was no power generation plant till march 2004

the byproduct of sugar that is baggasse was send to one of the sister concern of DSCL

named SHAMANUR SUGAR MILLS were the company had power generation plant,

but the profit was enjoyed by the SHAMANUR SUGAR MILLS, so DSCL came up with

power generation plant in march 2004.

The cost of power generation plant is Rs.80 crores. The power generation

capacity of plant is 24.45 Megawatt.

COGENERATION BENEFITS

Since co-generation can meet both power and heat needs, it has advantages in the form of

significant cost savings for the plant and reduction in emissions of pollutants. Major

benefits of co-generation can be listed as below:

1) Provides economic competitive advantages through a maximized return

on investment by utilizing the same fuel to provide heat and electricity;

2) Environment friendly because of reduced air emissions of Green House Gases,

sulfur dioxide, nitrogen oxides, and particulate matters;

3) A reliable source of power and process steam or heat;

4) Onsite electricity generation can reduce transmission and distribution

35

PRODUCTION, CONSUMPTION & EXPORT OF POWER PER

DAY.

SL.NO SEASONAL

BASIS

TOTAL

PRODUCTION

CONSUMED

BY THE

COMPANY

EXPORT TO

KPTCL

1 DURING

SUGARCANE

CRUSHING

OPERATION

16.5 Megawatt

(16500 units)

4.5 Megawatt

(4500 units)

12 Megawatt

(12000 units)

2 DURING NON-

CRUSHING OF

SUGARCANE

24.45 Megawatt

(24450 units)

1.6 Megawatt

(1600 units)

22.85

Megawatt

(22850 units)

CURRENT SCENARIO:

During the year the company has exported 150802280 units of power to the

KPTCL compared to the previous year’s export of 138855000 units and imported 98200

units of power from KPTCL against import of 168000 units during the previous year. The

COGEN unit has worked for 350 days during the year.

EMPLOYEES IN COGEN:

The COGEN power generation plant has one head that is general manager of COGEN, 23

supervisors, 30 plant operators, 10 electrical helpers & 9 other helpers.

Here in COGEN plant all helpers, plant operators are skilled and are educated in their

respective field. There are no unskilled workers in COGEN plant.

36

SHIFTS IN COGEN PLANT:

The power generation process has 3 shift a day, each shift is of 8 hours

which means the power generation process is for 24 hours. The timings of the shift as

follows:

1st shift starts from 6.00am to 2.00pm

2nd shift starts from 2.00pm to 10.00pm

3rd shift starts from 10.00pm t0 6.00am.

RAW MATERILS USED IN COGEN PLANT:

COGEN uses both Bagasse & Non-coking Coal as fuel for power generation.

During sugarcane crushing season COGEN uses Baggasse as fuel in power generation

plant for generation of power ( that is 8-9 months in a year). In remaining months

COGEN uses Non-Coking Coal as a fuel in non crushing season.

Sometimes COGEN uses both Baggasse & Non-Coking Coal as a fuel for power

generation.

FUTURE PLANNING:

As COGEN is planning to supply the power to TATA Company Limited

SUPPLY OF RAW MATERIALS:

The company purchases Non-Coking Coal from mangalore & Baggasse is taken from

sugar plant. There is an baggasse evilator which carries baggasse from sugar plant to

COGEN plant. The Non-Coking Coal is purchased from Mangalore.

37

POWER GENERATION PROCESS:

a) BAGGSSE EVILATOR OR COAL CONVEYER:

It is the first step in power generation, were Baggasse or Coal or both is carried

to CHAMBERS and stocked, then it is dumped to BABCOCK & WILCOX BOILER ( It

is manufactured by THERMAX co) through spreaders.

b) BABCOCK & WILCOX BOILER:

In this boiler, the coal or baggasse or both are boiled and steam is given, then it

is send to TURBINE.

c) TURBINE:

In TURBINE, the steam is absorbed and power is generated ( electrical energy

is generated)

d) SUPPLY OF POWER :

After generation of power the power is supplied to KPTCL which is situated

200yards far from the plant.

38

BAGASSE OR COAL (RAW MATERIAL)

BIOLER THERMAX

STEAM IS PRODUCED

STEAM IS TO TURBINE

ELECTRICAL ENEGY IS GENERATED

POWER GENERATION PROCESS CHART

39

WATER TREATMENT PLANT(WTP)

INTRODUCTION:

WATER TREATMENT PLANT was established on 24th march 2004. WTP plays

a vital role, as Steam & cooling water is produced through WTP. COGEN & SUGAR

plant is fully depending on steam & cooling water which is generated through WTP.

WTP acts as a cooling & steaming agent for both the plant.

WTP is situated next to COGEN plant.

CAPACITY:

The capacity of WTP is 1500metercube. The average raw water required per day

for the process- 1200metercube.

CONVERSION OF WATER:

The WTP process coverts raw water into two types as follows:

a) De-mineral water

b) Soft water

WATER REQUIREMENT:

TYPES OF WATER REQUIRED PER DAY REQUIREMENT IN

METERCUBES

DE-MINERAL WATER 200

SOFT WATER 800

OTHER USES & WASTAGES 200

TOTAL REQUIREMENT 1200

NOTE: So the total requirement of water is 1200metercubes of raw water per day for

process, and the water is pumped from near by lake. There are 3 lakes within the radius

of 5Kms.

40

DE-MINERAL WATER:

Raw water is converted into De-mineral water. De-mineral water is

converted into steam which is used for further process in SUGAR plant & COGEN plant.

SOFT WATER:

Soft water is used for cooling purpose. There are total 4 cooling fans situated

in the plant for cooling of soft water. Soft water is used in cooling of machineries while

in process.

41

RAW WATER STORAGE TANK

AERATOR

CLARIFIER

DE-MINERAL WATER SOFT WATER

ACF-ACTIVATED CARBON FILTER ACF- ACTIVATED CARBON FILTER

SAC- STRONG ACID FILTER

DE-GASSER

WBA- WEAK BASE ANION

SBA- STRONG BASE ANION

MULTIGRADE FILTERMULTIGRADE FILTER

MB-MIXED BED

SOFT WATER PLANT

SOFT WATER STORAGE

DE-MINERAL WATER STORAGE

WATER TREATMENT PROCESS

42

MARKETING DEPARTMENT

INTRODUCTION: DSCL has marketing cum sales department. Sugar is controlled commodity & the price

of the sugar & quantity of sugar that should be released in market is fixed by the

government. So, there is much influence of government on sugar pricing & releasing.

In DSCL there are seven employees working in marketing department.

STRUCTURE OF MARKETING DEPARTMENT:

CURRENT SCENARIO:

CHIEF SALES OFFICER

CASHIER

GODOWN MANAGER

GODOWN KEEPER

ASSISTANTS

43

Every sugar industry has a dual policy, that is Free & Levy.

a) Free market:

Free market means the company can sell sugar directly to the market, but

the quantity of sugar that should be sold is fixed by the government. The government

will fix the quantity of sugar that should be sold on monthly basis.

b) Levy:

The government will fix the ratio of levy which means in total production

some percentage of sugar should be supplied to PDS( Public Distribution System) and

the percentage is fixed by the government.

a) The current ratio is 90:10, which means 90% of sugar can be sold in sugar market

& 10% should be sold to government.

b) The current market price of sugar in international market is 229Dollars per metric

ton that is 900 per quintal.

c) The current market price of sugar in domestic market is Rs. 1180 per quintal.

As the international price is not favorable the company is selling its

commodity in Indian market.

MARKET SEGMENTATION:

DSCL has 900 dealers across the country. The company has a market share

of 0.37%. There are mainly 6states where DSCL is concentrating they are:

a) KARNATAKA d) WEST BENGAL

b) TAMIL NADU e) BIHAR

c) ANDRA PRADESH f) KERALA

HUMAN RESOURCES DEPARTMENT

44

INTRODUCTION:

The Human Resources Department is performing a vital role in the organization. Human

Resources Management is concerned with people dimensions in management. As every

organization is made up of people, acquiring their services, developing their skills,

motivating them to higher levels of performance and ensuring their commitment to the

organization.

HRM is the qualitative improvement of human beings who are considered the most

valuable assets of an organization. In DSCL also Human Resources are given more

importance, cared & always motivated towards organization goal.

PROCESS OF HR DEPT IN DSCL:

The process followed in DSCL as follows:

a) Acquisition of Human Resources:

In DSCL acquisition process is concerned with securing & employing people who are

required by the organization, according to the hierarchy level in the organization

keeping in mind organizational objectives.

b) Development of Human Resources:

In DSCL development process is concerned with improving the skills of employees,

molding their behavior according to organization needs & changing their skills,

knowledge, aptitude,& values.All this process is done to improve the quality of

service which he renders for the organization & these qualities of employees are

improved to achieve organization goal.

c)Motivation of Human Resources:

As DSCL is situated in rural areas where the motivational expenses( expenses made on

employees to motivate them) are low compare to urban areas.

For example: if you increase salary or if you give a gift/ incentive of Rs.250 to 500 the

employee gets motivated. In case of workers if you give a incentive of Rs. 150 to 250

then he will be motivated.

45

In DSCL most of the employees are self motivated are they are working in the

organization from past 15 to 25 years. Nearly 85% of employees in DSCL are working

from past 15 years.

d)Maintenance of Human Resources: The maintenance function is concerned

with providing those working conditions that employees believe are necessary in order to

maintain their commitment to the organization. The HR dept is also continuously

working to improve the working conditions of the employees.

For example: As the working conditions were not good in Administration and

Management block of the organization & the employees were disturbed with the working

conditions. So, they requested to HR dept to improve the working conditions of the

office. All this happened 2 years back & this problem was solved by the HR dept within a

span of 6months. That is, A new building was build were Administration & Management

block was shifted. Now the employees are happy and HR dept Head said that after this

action the efficiency of employees is increased by 20%.

HOW HR DEPT WORKS IN DSCL:

The sugar plant works on seasonal basis, so HR Dept has two different policies &

procedures to acquire, develop, motivate & maintain Human Resources of the

organization.

There is a committee named TRIPRIATE COMMITTEE, which makes policies &

procedures for the welfare of employees in whole Sugar Industry.

TRIPRIATE COMMITTEE:

TRIPRIATE COMMITTEE is a body which functioned for the welfare of employees and

it is regulated by the:

46

a) Government-( Sugar Ministry, Labor Ministry, labor commissioner, joint labor

commissioner etc)

b) Members of Co-operative Sugar factory and Government Sugar Factory ( Few

selected members)

c) Karnataka State Sugar Federation-(President, General Secretary, Treasurer, etc).

The above committee is functioned for the welfare of employees in sugar

industry. It solves problems between workers & management in the organization.

The functions as follows;

a) The committee fixes the salaries of workers, employees and others who rendered

service for the organization.

b) The committee conducts employee welfare & safety programs.

c) Over all the committee look after the employees in sugar industry.

EMPLOYEES WELFARE:

DSCL has conducted many programs for the welfare of employees. The

different allowances paid by the company to the employees according to employees act

as follows;

i. Provident fund: The company pays 12% on Basic+DA as provident fund.

ii. Gratuity: The company pays 15days salary (per year) for permanent employees

and 7days salary for seasonal employees.

iii. EDLI (Employees Deposit Linked Fund):The present rate of EDLI is

Rs.67000. EDLI means if any employee expired during the course of

employment, then Rs. 67000 is paid to his dependents.

iv. Workmen Compensation Payment:The company pays compensation, if

any employee met with an accident while working and the payment is done

according to the act.

47

v. Medical Allowances: The company pays Rs 250 per month for all the

employees as Medical Allowances.

vi. Traveling Allowances: The company pays traveling allowances according to

the distance traveled by the employees.0.1 to 4.9 kilometers Rs. 175 per month, 5

to 9.9 kilometers Rs. 225 per month, 10 to 14.5 kilometers Rs. 275 per month, 15

and above Rs. 325 per month, The company also has transportation facility for

employees.

vii. Uniform: The company also provides uniforms for the employees. The

company provides 3 pairs of uniform for 2years to permanent employees & 2

pairs of uniform for seasonal employees. The company also pays stitching

allowances and washing allowances. The stitching allowances are Rs.87.5 per pair

and washing allowance Rs. 25 per month.

viii. Night Shift Allowances: The company pays Night Shift Allowances to the

employees. (Rs. 5 per night).

ix. Canteen Facility: The company has clean & hygiene canteen facility. The

company charges Rs.0.60 for tea, Rs.1.20 for Tiffin & Rs.3.50 for full meals.

Safety Training Programme:

The company has conducted many safety training programme in both sugar plant &

cogen plant. In cogen plant the safety training programme is conducted once in two

months.

48

The company has done many others programmes for the welfare of employees and there

are many other allowances made by the company for the welfare of employees.

TIME OFFICE:

As every organization has Time Office, even DSCL has Time Office were attendance

register of the employees is maintained.

TIME OFFICE PROCESS:

The company has three shifts & there are different workers in different shift. Each shift is

of 8hours.

In time office has installed Electronic Punching Machine where each employee has given

a punching card & when an employee enters into the organization goes through this

process and the data is saved.

FINANCE DEPARTMENT

INTRODUCTION

49

The Financial Department is plays an important role as every thing that company does is

revealed in this matter in the sense of financial statement and reports of the company.

And this is the department which constitute towards the shareholder and the investors of

the company so to maintain this department prior concentration must be there and this

must be prepared only by the accountants who have the knowledge or by company

secretary or by charted accountant appointed by the company which must be reviewed by

the company auditor. This report shows the performance of the company and by keeping

this department accurate and transparent they can attract more investors or can get

competitive advantage

A business concern means a concern, which undertakes trading, or manufacturing

activities of goods/services. The basic criteria for starting a business unit are to make

profit from that. There are so many trading activities in a financial year. There for the

company has to make the records of all these activities. So these arises the used for

book-keeping.

Now a days every business have to keep books of accounts. It is the requirements of the

law. Generally the companies are required to maintain mainly two types of accounts.

1. Trading and P&L Account.

2. Balance sheet and even cash flow statement.

The same process is followed in DSCL as mentioned above.

FINANCIAL STATEMENT OF DSCL as at 31.03.2009.

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31.3.2009.

50

INCOME SALE OF

PRODUCTS

SCHEDULE AS AT

31.03.2009

AS AT

31.03.2008

1.SUGAR

DOMESTIC SALES

EXPORTS

50,12,99,875.64

3,36,76,500.00

72,58,62,806.20

6,89,86,550.00

2. POWER 97,30,54,075.40 42,07,02,226.40

3. MOLASSES SALES 5,29,91,091.00 1,27,39,836.00

4 OTHER INCOME 2.01 2,97,82,377.12 63,86,448.95

TOTAL 1,59,08,03,919.16 1,23,46,77,907.55

EXPENDITURE

SUGAR UNIT:

CANE PURCHASED 60,83,23,383.00 58,17,00,763.00

CANE PURCHASE TAX 2,47,90,563.00 57,40,710.00

CANE PROCUREMENT

& DEV EXP

2.02 4,83,78,326.08 1,73,62,738.31

MANUFACTURING

EXPENSES

2.03 10,42,37,273.51 10,06,19,886.51

ADMINISTRATIVE

EXPENSES

2.04 1,70,15,269.85 1,56,56,050.91

RAW SUGAR CON 2.05 0.00 0.00

SELLING &

DISTRUBUTION

EXPENSES

2.06 80,05,581.79 58,71,146.53

FINANCIAL CHARGES 2.08 9,39,89,812.18 8,42,08,069.22

FRINGE BENEFIT TAX 0.00 0.00

CO-GEN UNIT:

CONSUMPTION OF

COAL

50,70,45,171.80 18,07,26,782.00

FINANCIAL CHARGES 2.08 4,23,29,513.00 4,40,41,807.00

COGENARATION 2.07 2,20,14,743.84 2,74,81,260.49

51

EXPENSES

DECREASE (+)/

INCREASE (-)IN

FINISHED GOODS &

BY PRODUCTS

-4,96,59,242.00 3,58,79,023.00

TOTAL 1,42,64,70,396.05 1,09,92,88,236.97

PROFIT BEFORE TAX 16,43,33,523.11 13,53,89,670.58

LESS:

TOTAL

DEPRECIATION

1.05 9,99,21,321.58 10,54,31,598.83

OPBPT 6,44,12,201.53 2,99,58,076.75

LESS:

MAT

FRINGE BEN TAX

80,62,568.47

3,61,300.96

34,57,848.06

4,22,265.35

PAT 5,59,88,332.10 2,60,77,963.34

ADD: DEFERRED TAX

ON INCOME

1,42,87,317.48 97,82,681.49

NET PROFIT 7,02,75,649.58 3,58,60,644.83

LOSS B/F PREV YEAR 0.00 10,96,685.81

BAL LOSS C/F

BALANCE

7,02,75,649.58 3,58,60,644.83

BALANCE SHEET as at 31.03.2009

SOURCES OF SCHEDULE AS AT 31.03.2009 AS AT 31.03.2008

52

FUNDS

1)SHARE HOLDERS

FUND :

A. SHARE HOLDERS

CAPITAL

B. RESERVES &

SURPLUS

1.01

1.02

36,85,64,570.00

13,85,82,726.87

36,85,64,570.00

6,83,07,077.29

TOTAL ‘A’ 50,71,47,296.87 436871647.29

2)LOAN FUNDS:

A. SECURED LOAN

B. UNSECURED

LOAN

1.03

1.04

1,09,77,11,813.34

1,11,19,677.96

1,30,46,23,164.25

1,11,19,677.96

TOTAL ‘B’ 1108831491.30 1315742842.21

TOTAL (A+B) 1615978788.17 1752614489.5

APPLICATIONS OF

FUNDS:

1.FIXED ASSETS:

A. GROSS BLOCK

B. DEP TO DATE

C. NET BLOCK

D. CAPITAL W.I.P

1.05

1,36,85,00,318.63

68,63,85,853.17

68,21,14,465.46

1,07,67,316.69

1.32,25,99,159.77

58,83,83,050.33

73,42,16,362.28

1,74,16,32,471.72

TOTAL ‘C’ 69,28,81,782.15 75,16,32,471.72

3. INVESTMENT

S

TOTAL ‘D’

1.06 5,35,900.00 5,35,900.00

4.CURRENT ASSETS,

LOANS & ADVANCES:

53

A. INVENTORIES

B. SUNDRY DEBTORS

C. CASH & BANK BAL

D. LOANS & ADVANCES

1.07

1.08

1.09

1.10

50,28,88,491.87

28,63,37,339.12

19,35,74,021.06

14,02,13,905.40

45,21,28,310.14

23,98,48,063.29

4,63,02,992.81

26,33,97,549.85

TOTAL ‘E’ 1,12,30,13,757.45 1,00,16,76,916.09

LESS:

CURENT LIABILITIES

& PROVISION:

PROVISIONS TOTAL ‘F’

NET CURRENT

ASSETS(E-F)

DEFERRED REV EXP ‘H’

DEFERRED TAX ASSET

‘H’

PROFIT & LOSS A/C ‘J’

S

1.11 28,67,05,078.55

2,88,11,118.20

5,74,41,308.92

0.00

19,77,81,345.58

5,08,92,582.85

4,31,53,991.44

0.00

TOTAL ( C+D+G+H+I+J) 1,61,59,78,788.17 1,65,01,10,516.52

54

CANE DEVELOPMENT DEPARTMENT

INTRODUCTION:

As sugarcane is the important raw-material which is processed to manufacture sugar. As

like other manufacturing companies which are totally dependent on raw-material, DSCL

is also dependent on sugarcane. So, DSCL has a separate department named Cane

Development Department

In Cane Development Department we have one more separate Department called Cane

Accounts section. Cane Development Department means it is a department which

supervises and motivates farmers to grow good quality of cane. So that the company can

get good recovery percentage and abundant sugarcane for production.

EMPLOYEES IN CDD

In cane development department there are totally 149 employees including General

Manager. The list of other employees as follows;

Employees Designation Number of Employees

Factory Farm + Farm Asst (5+1)=6

Zonal Office 5

Asst Cane Officer 10

Junior asst 10

Circle Officer 51

Circle Field Asst 51

Cane Office 6

Senior Asst 1

Junior Asst 2

Note: In cane account section a separate accounting system is followed where cane

purchase, loan to farmers & cane development related transaction are recorded, then it is

send to finance department for further information.

55

GM (CANE)

FACTORY FARM ZONAL OFFICE CANE OFFICE

Sr AsstJr Asst

Asst CANE OFFICER FARM Asst

CIRCLE OFFICER

IN CANE ACCOUT SECTION:

EMPLOYEES DESIGNATION NUMBER OF EMPLOYEES

Deputy Chief Accounts Officer 1

Staff Members 5

Attenders 2

STRUCTURE OF CANE DEVELOPMENT DEPARTMENT:

56

CANE DEVELOPMENT PROCESS:

The sugarcane growing season is classified into three types as follows;

a) Early Variety- in the month of July, August, September, October

b) Mid-late Variety- November, December

c) Late Variety- January, February & March.

The company follows the following process in cane development;

1) The company give loan to farmers to produce more sugarcane & loan is given

according to the size of land the farmer cultivates & quantity of other things like

pesticides, fertilizers etc which are required for growing of sugarcane.

2) The company has appointed 51 field officers & 51 circle officers who frequently

motivates, supervise & guide the farmers so the company can get good &

abundant raw materials for production.

3) The interest rate is 12% on loan given to farmers and the loan is recovered when

cane is supplied by the farmers to the company & the remaining payment is done

within 35 days after supply.

4) Company also pays advances according to the quantity of supply. Advances are

given twice in a week that is Tuesday & Friday. (This is also is recovered in final

bill).

5) Lastly all this process is supervised by the field & circle officers to see to that the

loans are properly employed for whom they are given.

6) Quality of sugarcane is frequently checked (while in growing stage) & it is also

checked before and after purchase of sugarcane.

57

CURRENT SCENARIO:

1) The current price of sugarcane per tonne is Rs. 1543/.

2) The company is having 9783 suppliers & all are farmers.

3) The company has targeted to crush 700000 tonnes of sugarcane this year. Last

year 624834 tonnes of sugar is supplied.

Under the dynamic management of the company, a long perspective of bringing

more & more land under sugarcane cultivation is always kept in view. The figures as

follows;

Year Area under sugarcane cultivation ( in acres)

2006-07 3,859

2007-08 10,295

2008-09 18,238

2009-10 20,000

58

SWOT ANALYSIS Strength and weaknesses are essentially internal to the organization and relate to the matter concerning resources, programs and organization in key areas such as

• Sales

• Marketing

• Capacity

• Manufacturing cost etc

Opportunity and Threat are external to the organization and can exist or develop in

the following areas

• Size & Segmentation

• Growth pattern and maturity

• International dimensions

• Relative attractive of segments

• New Technologies etc

59

STRENGTHS

Sr. Keyword Description

1 AUTOMATIZED The production of sugar plant is fully automatized

2 COST lowest cost producer

3 EXPERIENCE 36 years of experience

4 BRAND Brand name established

5 SPEED Faster decision making

OPPORTUNITIES

WEAKNESSES

Sr.

Key Word Description

1 SKILLED LABOR Lack of skilled labor of the company is situated in rural areas

2 CAPACITY The capacity of sugarcane crushing is less compare to supply of sugarcane.

3 INFRASTRUCTURE The infrastructure is not developed

4 FINANCE Lack of financial funds

60

Sl. Key Word Description

1 SUGARCANE The supply of sugarcane is abundant.

2 FREE MARKET The ratio of free market is increased by 90%

3 FOREIGN MARKET The central Govt is encouraging for foreign market.

4CENTRAL GOVERNMENT

The central Govt is giving subsidy.

THREATS

Sr. Keyword Description

2GOVERNMENT INTERVENTION

The price & quantity of supply of sugar is fixed by Govt.

3 EXPORTThe export market is very compitative because of low cost production of sugar from countries like Brazil, Thailand etc.

61

FINDINGS

INDUSTRY FINDINGS:

Growth is the main objective or goal of any organization & the organization will

be frequently working on it.

The government plays an important role in framing policies & procedures for

sugar industry.

Flow of information & understanding between departments plays an important

role for the success of an organization.

Each and every department is interlinked & acts as a source of information to one

another.

The effect of external factors like, suppliers(farmers), government, natural

environment etc plays an important role in agro-based industries

ORGANISATION FINDINGS:

The production plant & COGEN plant is fully computerized.

The company is planning to increase its sugarcane crushing capacity.

The company is planning to supply its power to TATA Company limited.

The company is showing more interest towards foreign market.

The company has a separate department called cane development department

where farmers are encouraged by giving loans to grow more & more

sugarcane.

The company has adopted new techniques & procedures to cut the total cost.

SUGGESTIONS:

62

The company should increase its production capacity as the supply is more

compared to capacity.

The company should import some more sophisticated machinery to reduce

cost of production, so that it can compete in foreign market.

The departments in the organization should be systematically arranged.

The company should increase its warehouse capacity & to renovate the

existing warehouse.

The company should recruit experienced & young managers which will helps

in adopting new managerial techniques.

Medical allowances should be increased because they will not get proper

treatment from that amount.

Special incentives should be given to encourage employees.

63

CONCLUSION:

Sugar industry a seasonal, agro-based industry occupies an important place in the

economy. It has an immense potential for transforming the rural economy into self-

generating one. The industry can expect to grow and emerge as a key player in the

international arena.

DAVANGERE SUGAR COMPANY LIMITED has made great efforts after its

privatization and succeeded in market from past 36 years and it is frequently working on

its objective i.e growth, as DSCL believes growth as the success of the organization.

I conclude that, the internship study at dscl gave me an insight of how an organization

works. The objective of my study was complete.

64

BIBLIOGRAPHY

During this project the required information has been collected through various sources.

While going through the Organizational Study at “Davanger sugar company private

limited”.

, I came to know various facts about the company from both primary & secondary

sources.

K. Aswathappa, 2007, Human Resource and Personnel Management, Fourth

edition, The McGraw-Hill companies.

K. Aswathappa & K. Shridhara Bhat, 2002, Production & Operation

Management, First edition, Himalaya Publishing House.

Kotler & Kotler, 2003, Marketing Management, Millennium edition, The

McGraw-Hill companies.

Financial Result of the company.

Company website. WWW.DSCL.COM

www.google.com

Annual Report of the Company.

Company Profile

65