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A

PROJECT ON

REPORT

WORKING CAPITAL MANAGEMENT ANALYSIS OF SAKTHI SUGARS LIMITED

SUBMITTED TO

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE MANAGEMENT PROGRAMME (M.B.A)

Submitted by SURENDRA KUMAR SWAIN ENROLMENT NO.740667033

Institute of Management & Bio-Technology, Kunjakanta, Dhenkanal-759001.

CERTIFICATE

This is to certify that Mr. Surendra Kumar Swain, a Management Programme student of Punjab Technical University, Jalandhar (Punjab) has completed his Project Report on WORKING CAPITAL MANAGEMENT ANALAYSIS OF SAKTHI SUGARS LIMITED under my guidance and supervision. To the best of my knowledge and belief, the work is original piece of project study.

(SATYAPRIYA MISHRA) MANAGER(ACCTS.)

DECLARATION

I, Sri Surendra Kumar Swain, a Management Programme student of Punjab Technical University, Jalandhar (Punjab) do hereby declare that the present piece of project work entitled WORKING CAPITAL MANAGEMENT ANALYSIS OF SAKTHI SUGARS LIMITED being presented for the partial fulfillment of the Management Programme (M.B.A) Course of Punjab Technical University, Jalandhar is developed by me and is of original piece of study. I sincerely declare that this piece of work is my original work and it is not submitted in any other institution including this Institute as published at any time before. All the data included in the Project Report was collected personally. I also wish to try my best not to expose the valuable documents I have collected for my study.

Surendra Kumar Swain, Enrolment No.740667033

ACKNOWLEDGEMENTI express my sincere, honest and grateful acknowledgement to Dr.S.K.Salwan, Vice Chancellor and Dr.R.P.Singh, Dean, Distance Education cell of Punjab Technical University, Jalandhar for giving me an opportunity to study the Management Programme (M.B.A) at Punjab Technical University, Jalandhar. I also express my heartiest thanks to Sri Jitendra Prasad Nanda, Project Coordinator of the Institute of Management & Bio-Technology, Dhenkanal (LCC) and other staff members for their most useful guidance and suggestions during my tenure of study here. Above all, I have special gratitude and thanks to Sri Ramachandran Ramadurai, Vice President (Orissa Operations) and the Management of Sakthi Sugars Limited. for giving me the opportunity and encouragement for higher study and to complete the programme successfully. I am also thankful to Sri Satyapriya Mishra, Deputy Manager(Accts.) for extending all cooperation and technical guidance needed to complete the Project Report successfully. My special thanks goes to Mr.S.N.Samantaray, A.G.M(P & C), Mr.V.S.Naidu, A.G.M(Process), Mr.Y.Jaisankar,Manager Engineering, Mr.H.K.Behera, Manager-HRD, Mr.Manoranjan Dash, Dy. Manager (Electrical), Mr. Bhabani Prasad Rath, Dy. Manager(Process), Mr.Sangram Keshari Mohanty, Asst. Manager(Process), all Chemists, all Engineers and EDP staff for their cooperation. And I also thankful to all of my colleagues in Sakthi Sugars for their excellent cooperation in preparation of this project report. And last but not least my heartfelt thanks goes to my family members for their moral support and encouragement to complete the course, with a lot of patience and inspiration for future. Surendra Kumar Swain, Enrolment No.740667033

CONTENTS 1. Introduction a) b) c) d) e) f) g) 2. Objectives of the study Scope Importance Techniques Methodology Limitation of the study Company Profile

Theoretical Approach to working capital management a) b) c) d) Concept of working capital Type of working capital factors determining working capital Financing of working capital

3.

Working Capital Manager Analysis in Sakthi Sugars Limited. a) b) c) Receivable Management Inventory Management Cash Management

4.

financial Analysis a) b) Estimate Working Capital Ratio Analysis of Sakthi Sugars Ltd.

5. 6.

FINDINGS & SUGGESTIONS BIBLIOGRAPHY

CHAPTER - I

INTRODUCTION

a) b) c) d) e) f) g)

Objectives of the study Scope Importance Techniques Methodology Limitation of the study Company Profile

CHAPTER - I

INTRODUCTIONA) OBJECTIVES OF THE STUDY : The main purpose of the preparation of this project report at Sakthi Sugars Limited was to have an overall idea about the organization functions the various factors that are operating in the organization and thereby gain on the spot training and experience regarding the working capital functions carried by finance department. This was done to have the practical knowledge on financial functions to prepare me as a future manager. The Major Objectives are : i) To the efficiency of the Working Capital Management of SSL by studying the different elements of working capital, ii) To study the measure of improvement in efficiency of Working Capital Management of Sakthi Sugars Limited. B) SCOPE OF THE STUDY : To study and know about the organizational structure along with their day to day functions, I had cover the following departments at SSL, Dhenkanal unit. 1) 2) 3) Finance department Cane department Stores department

C)

IMPORTANCE OF UNDER STUDY : There are five prime factors seen in an industrial organization. They are described as the five Ms. They are 1) 2) 3) 4) 5) Men Money Material Machinery Management

From among these five Ms the foremost one is financial management. Finance department is more valuable than other resources in an organization. Their proper management can help an organization tremendously to maximize the utilization. I learnt a lot of about Working Capital Management in my theory but without practical knowledge in the field, the theory has no value. Scope in order to get experience in the field I have gone to the understudy programme about WORKING CAPITAL MANAGEMENT at Sakthi Sugars Limited, Dhenkanal unit, which helped me in acquiring more practical knowledge. D) TECHNIQUES OF THE STUDY : The information are collected during my six week understudy programme at Sakthi Sugars Limited, from official documents, records, manuals of different departments and section of the organization and also through observation of functioning and discussion about it with officers of various departments of the organization.

E)

METHODOLOGY :the information were collected during my understudy programme for

about a period of 45 days from official documents, records, company rules of Sakthi Sugars Ltd, Dhenkanal unit, materials from different department and sections of the organization and also through observation and discussion with the officers of various departments of the organization. F) LIMITATIONS OF THE STUDY : The whole study primarily centers on the secondary data collected from annual reports, officials records of SSL and other Financial Management Book. Therefore, the limitations associated with secondary data present in the study

G)

COMPANY PROFILE : Sakthi Sugars Limited, a South based Group of Companies is today one of the largest producers of white crystal sugar in the country. Together with the new projects in the State of Orissa, its member companies account for a capacity of over 16,000 Tonnes of cane crush per day. Sugar also accounts for a large share of the Groups turnover. The member companies are standards of technical efficiency and the highest mill efficiency. This unit is the only sugar factory in India which could produce superfine grade of sugar corresponding to international standard measured at grade 35 and below by International Commission for Uniform Method of Sugar Analysis (ICUMSA). This has been possible through constant R &

D efforts, excellent rapport with the farming community, adoption of appropriate technology in cane cultivation and processing techniques. The registered area under sugar cane cultivation progressively increased from 3500 hectares to over 15,000 hectares and the per hectare productivity increased from 70 to 100 tons. Mega Irrigation Projects have been established with the efforts of Sakthi Sugars Ltd and the area under sugar cane cultivation is continuously increasing. Name 1. 2(a) Year of incorporation Registered Office : : : Sakthi Sugars Limited, 1961 Sakthi nagar-638315, Bhavani Taluk, Erode District, Tamilnadu State(India) (b) Corporate Office : 180, Race Course Road, Coimbatore-641018, Tamilnadu State(India) 3. a) Units : Sugar Units Sakthi nagar, BHavani Taluk, Erode District, Tamilnadu Jothi nagar,Padamathur BO, Sivaganga Dist,Tamilnadu Kannarirupa Mathur, Modakuruchi, Erode District, Tamilnadu State Haripur village, Korian Post, Dhenkanal District(Orissa)

b)

Distillery units

Sakthi nagar, Bhavani Taluk, Erode District,Tamilnadu. Haripur Village, Korian Post, Dhenkanal District(Orissa)

c)

Soya units

Marchinaickenpalayam, Pollachi, Tamilnadu State Harpur Village, Korian Post, Dhenkanal District(Orissa).

d) e)

Pollution Control Unit Co-generation plant

Sakthi nagar, Bhavani Taluk, Erode District, Tamilnadu Sakthi nagar, Bhavani Taluk, Erode District, Tamilnadu Jothi nagar,Padamathur BO, Sivaganga Dist,Tamilnadu Modakuruchi , Erode Dist, Tamilnadu

f) g)

Coke Bottling Plant Ethanol Plant

Jothi nagar,Padamathur BO, Sivaganga Dist,Tamilnadu Sakthi nagar, Bhavani Taluk, Erode District, Tamilnadu

4.

Year of Establishment and Capacities : Capacity 8000 TCD 4000TCD 2500 TCD 2500 TCD 27500 KLPA Expanded from Remarks Last expansion from 6000 TCD in 2005 Expanded from 2500 TCD in May, 2000

Name of the unit Year Estd. Sakthi nagar sugar 1964 unit Sivaganga unit Sugar 1989

Dhenkanal sugar 1994 unit Modakuruchi Sugar 2008 unit Sakthi nagar 1972

Distillery unit Dhenkanal Distillery unit Pollachi Soya unit Dhenkanal