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The terms ‘analysis’ and ‘interpretation’ are complimentary to each other, though
sometimes they are used distinctively. Analysis is used to mean the simplification of data by
methodical classification of data given in the financial statements and the term interpretation
means explaining the meaning and significance of the data so simplified. However, analysis
is useless without interpretation, and interpretation becomes difficult without analysis. Hence,
as the objective of analysis is to study the relationship among the various items of financial
statements by interpretation, many to cover both analysis and interpretation together use it
1
1.2 METHODS OF FINANCIAL ANALYSIS
There are various tools and techniques to do financial analysis. The main objective or
any analytical method is simplification and presentation of data in a more comprehensive
manner. However, no one type of analysis is sufficient to support overall findings, or to serve
all types of users. The most important tools of financial analysis are as follows:
2
1.3 NEED FOR THE STUDY
A comparative analysis of financial statements reveals the trend in the progress and
position of enterprise.
To know the company’s cash investment in various activities and their effect on the
cash balance.
To reveal the cash position of the company for the past financial years.
To make a detailed study about the cause and effect of the profitability and effect of
the profitability and financial condition of the company.
To know the operational efficiency as well as the financial position of the company.
To know the cash transactions and the balance of cash for two financial years.
The study will act as a basis for analyzing the financial position of the company.
The company can come to know where their concentration was and where they have
to concentrate.
The study will be a basis for analyzing the financial health of the Company in terms
of liquidity, profitability and efficiency in utilization resources.
The figures taken from the financial statement for analysis were historical in nature,
time value of money is not being considered.
The reliability and accuracy of calculations depend on the information found in the
balance sheet of the company.
The findings of the study could be taken only as guidelines and cannot be applied
directly to other companies of the same industry
3
1.6 METHODOLOGY
RESEARCH DESIGN
SOURCE OF DATA
Primary data is collected through informal interview with the employees and workers
of the company regarding the performance and operation of the company.
Secondary data is collected through Annual Reports, Company source and various
websites.
The period of the study for financial performance analysis was 5 years (i.e.) 2005-
2009.
1. Comparative Technique
2. Trend Analysis
3. Cash Flow Analysis
4
Chapter -2
Industry profile
2.1 Introduction
Sugars are a major form of carbohydrates and are found probably in all green plants. They
occur in significant amounts in most fruits and vegetables. There are three main simple
sugars sucrose, fructose and glucose. Sucrose is in fact a combination of fructose and glucose
and the body quickly breaks down into these separate substances.
A Balanced Diet
A balanced diet can come from a variety of different foods, calculated to give the desired
levels of carbohydrates, proteins, fats, vitamins and minerals. Nutritional scientists advocate
that carbohydrates should provide at least 50% of over energy requirements.
2.2 History
The discovery of sugarcane, from which sugar as it is known today, is derived dates
back unknown thousands of years. It is thought to have originated in New Guinea, and was
spread along routes to Southeast Asia and India. The process known for creating sugar, by
pressing out the juice and then boiling it into crystals, was developed in India around 500 BC.
Its cultivation was not introduced into Europe until the middle-ages, when it was brought to
Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to
thrive in a most favourable climate.
It was not until the eighteenth century that sugarcane cultivation was began in the United
States, where it was planted in the southern climate of New Orleans. The very first refinery
was built in New York City around 1690; the industry was established by the 1830s. Earlier
5
attempts to create a successful industry in the U.S. did not fare well; from the late 1830s,
when the first factory was built. Until 1872, sugar factories closed down almost as quickly as
they had opened. It was 1872 before a factory, built in California, was finally able to
successfully produce sugar in a profitable manner. At the end of that century, more than thirty
factories were in operation in the U.S.
Beet sugar processing is similar, but it is done in one continuous process without the raw
sugar stage. The sugar beets are washed, sliced and soaked in hot water to separate the sugar
-containing juice from the beet fibre. The sugar-laden juice is then purified, filtered,
concentrated and dried in a series of steps similar to cane sugar processing.
For the sugar industry, capacity utilization is conceptually different from that applicable to
industries in general. It depends on three crucial factors the actual number of ton of sugarcane
crushed in a day, the recovery rate which generally depends on the quality of the cane and
actual length of the crushing season.
Since cane is not transported to any great extent, the quality of the cane that a factory receives
depends on its location and is outside its control. The length of the crushing season also
depends upon location with the maximum being in south India.
6
Sugarcane in India is used to make sugar, khan sari or gur. However, sugar products
produced worldwide are divided into four basic categories: granulated, brown, liquid sugar
and invert sugar.
7
The Sugar mill produces many by-products along with sugar. A typical sugarcane complex of
3000 tcd capacity can produce 345 ton of sugar, 6000 liters of alcohol, 3 ton of yeast, 15 ton
of potash fertilizer, 25 ton of pulp, 15 ton of wax, 150 ton of press-mud fertilizer and 750KW
of power from bagasse.
Molasses
Molasses is the final effluent obtained in the preparation of sugar by repeated crystallization.
It is the end product from a refining process carried out to yield sugar. Sucrose and invert
sugars constitute a major portion (40 to 60%) of molasses.
The yield of molasses per ton of sugarcane varies in the range of 3.5 to 4.5%.
Molasses is mainly used for the manufacture of ethyl alcohol (ethanol), yeast and cattle feed.
Ethanol is in turn used to produce portable liquor and downstream value added chemicals
such as acetone, acetic acid, butane, acetic anhydride, MEG, etc. Some of the alcohol based
chemicals like MEG, acetic acid, acetone etc., face stiff competition from production through
the petro-chemicals route.
Bagasse :
Bagasse is a fibrous residue of cane stalk that is obtained after crushing and extraction of
juice. It consists of water, fibres and relatively small quantities of soluble solids. The
composition of bagasse varies based on the variety of sugarcane, maturity of cane, method of
harvesting and the efficiency of the sugar mill. The usual bagasse composition is given
below.
Content Range %
Moisture 46-52
Fibre 43-52
Soluble solids 2-6
Bagasse is usually used as a combustible in the furnaces to produce steam which in turn is
used to generate power. It is also used as raw material for production of paper and as feed
stock for cattle.
8
By making use of bagasse, sugar mills have been successful in reducing dependence on state
electric boards for power supply. For example, Ballarampur Chini Mills procured 95% of its
total power requirement for FY98 from captive generation from steam turbines.
Chapter-3
Company profile
9
3.1 Bannari Amman Sugars Limited is an India-based integrated sugar manufacturing
company. Bannari Amman Sugars is an offshoot of the legendary Bannari Amman Group
which is one of India's largest industrial conglomerates.
The Group's business activities include areas like manufacturing, trading, distribution, and
financing. Bannari Amman Group manufacturing and trading business includes production of
sugar, alcohol, liquor, granite, and cotton yarn. Further, its trading activities include
distribution of automobiles and related auto parts of renowned brands and financing.
Furthermore, the service sector includes business portfolios like wind power energy,
education, health care, and real estate.
Manufacturing units of Bannari Amman Sugars are -
10
• Distillery unit - produces over 60,000 liters of industrial alcohol and extra neutral
spirit per day from sugarcane molasses
• Bio-Compost Fertilizer Unit - is prepared by mixing nutrient rich press mud from
sugar mills with nitrogen, phosphorous and potassium rich spent wash obtained from
its distillery unit. Bio-compost helps in maintaining soil fertility
• Bio diesel unit - produces 3000 litres of Bio Diesel per Day, from multi feed stock
viz., Jatropha, Pungan seeds etc.
Bannari Amman Sugars have registered net sales of Rs. 79286.65 lakh for the year ended
31st March 2008-2009 and the company's net profit stands at Rs. 9153.22 lakh for the same
period, said Mr. S.V. Bala Subramanian, Chairman & Managing Director, Bannari Amman
Sugars.
11
3.3 Board of Directors :
Chairman : DR. S.V Balasubramaniam
Directors : S. G. Subrahmanyam
S.V. Alagappan
S.V. Arumugam
P.L. Sivanappan
A.K .Perumalsamy
T .Gundan
B.Saravanan
Bankers : Punjab national bank , Bank of Baroda, Canara Bank, Federal Bank
Limited, Karur vysya bank limited, Union Bank of India, Indian Overseas Bank, State
Bank of Travancore, State Bank of India, Lakshmi Villas’ Bank Limited, State Bank of
Hyderabad, Bank of India
12
Figure-1
3.4 ORGANISATION STRUCTURE
CHAIRMAN
MANAGING DIRECTOR
GENERAL MANAGER/TECHNICAL
PERSONAL MANAGER
13
Figure-2
Department functions
CANE DEPARTMENT
DY GENERAL MANAGER-CANE
SR MANAGER-CANE
DY MANAGER-CANE
OFFICER-YARD AND
MANAGER-DIVISION HEADS
TRANSPORT
14
Figure-4
ADMINISTRATIVE
DEPARTMENT
ASST.
GUEST TIME MANAGER OFFICER
HOUSE AND OFFICE ACCOUNTS CANE
TELEPHONE ACCOUNT
ASST.SECURITY
OFFICE
ACCOUNTS
ACCOUNTS STAFFS
STAFFS
SECURITY
15
Figure-5
ENGINEERING
DEPARTMENT
DY.GENERAL MANAGER-
SR.MANAGER -ENGINEERING
CO-GENERATION
DY MANAGER
DY MANAGER DY MANAGER DY MANAGER ELECTRICAL
MECHANICAL RO PLANT MECHANICAL
DCS
SHIFT ENGINEER DCS
SHIFT ENGINEER LAB-CHEMIST OPERATOR
OPERATOR
WORKER ELECTRICIAN
WORKER ELECTRICIAN
16
Figure-6
MANUFACTURING
DEPARTMENT
ASST.GENERAL MANAGER-PROCESS
LABOURERS
17
FIGURE-7
DISTILLERY
ASST.GENERAL MANAGER
DEPUTY MANAGER
SHIFT CHEMIST
WORKER
18
FUTURE PLAN OF ACTION
• In sugar unit-1 necessary steps are being taken up to identify technologies viz power
tiller drawn implement for small farmers, mini tractors drawn implements for medium
to large holding and popularising the same with farming community for the benefit of
farmers effort are being taken to mechanise cane harvesting operation by identify
suitable tractor drawn machine as well as medium size international machine suitable
for Indian condition.
• In the distillery division is Tamil Nadu in depth study is in progress to adopt new
technologies for spent wash utilization with energy conservation.
BANNARI AMMAN has provided resources infrastructure and motivation and direction in
the establishment of the following facilities benefiting the rural public in the command area.
The social responsibility activities that are executed by BANNARI RURAL FOUNDATION
with the assistance provided by the company are us under.
EXPENDITURE ON R&D:
Capital – Rs 192660500.
Recurring - Rs 1118110.
Total – Rs 193778610
19
Total R&D expenditure as a percentage of total turnovers – 2.6%
2. Refined sugar and less than 45 CUMSA sugar are exported in the current year and the
product are well received in the international markets , efforts are being taken to
increase the export of granite products.
20
4.1ABOUT THE WORKING CAPITAL
Meaning
“Working capital is the amount of funds necessary to cover the cost of operating the
enterprise”.
“Circulating capital means current assets of a company that are changed in the
ordinary course of business from one from to another, as for example, from cash to
inventories, inventories to receivables, receivables into cash”.
In the broad sense, the term working capital refers to the gross working capital and
represents the amount of funds invested in current assets.
Thus, the gross working capital is the capital invested in total current assets of the
enterprise. Current assets are those assets which in the ordinary course of business can be
converted into cash with in a short period, normally one accounting year.
In a narrow sense, the term working capital refers to the networking capital.
Networking capital is the excess of current assets over current liabilities or say:
21
Networking capital may be positive or negative. When the current assets exceed the
current liabilities the working capital is positive and the negative working capital results
when the current liabilities are more than the current assets. Current liabilities are those
liabilities which are intended to be paid in the ordinary course of business within a short
period of normally one accounting year out the current assets or the income of the business.
Examples of current liabilities are,
2. Bill receivables
5. Inventory of stocks, as :
a. Raw materials
b. Working process
d. Finished goods
7. Prepaid expenses
8. Accrued incomes
1. Bills payables
22
4. Short – term loans, advances and deposits
5. Dividends payables
6. Bank overdraft
The gross working capital concept is financial or going concern concept whereas net
working capital is an accounting concept of working capital. These two concepts of working
capital are not exclusive, rather both have their own merits. The gross concept is sometime
preferred than the net concept of working capital for the following reasons ;
1. It enables the enterprise to provide correct amount of working capital at the right time.
2. Every management is more interested in the total current assets with which it has to
operate than the sources from where it is made available.
3. The gross concept takes into consideration the fact that every increase in the funds of
the enterprise would increase its working capital.
4. The gross concept of working capital is move useful in determining the rate of return
on investments in working capital.
23
Figure-8
Permanent or Temporary or
Gross Working Net Working Fixed Working Variable
Capital Capital Capital Working Capital
24
Permanent of Fixed Working Capital
Goodwill
Sufficient working capital enables an business concern to make prompt payments and
hence helps in creating and maintaining goodwill.
Easy Loans
A concern having adequate working capital, high solvency and good credit standing
can arrange loans from banks and others on easy and favourable terms.
Sufficient working capital ensures regular supply of raw materials and continuous
production.
25
Regular Payment of Salaries, Wages and other Day – to – Day
Commitments
A company which has ample working capital can make regular payment of salaries,
wages and other day-to-day commitments which raises the morale of its employees, increases
their efficiency, reduces wastages and costs and enhances production and profits.
Only concerns with adequate working capital can exploit favourable market
conditions such as purchasing its requirements in bulk when the prices are lower and buy
holding its inventers for higher prices.
Every investor wants a quick and regular return on his investment sufficiency of
working capital enables a concern to pay quick and regular dividends to its investors as there
may not be much pressure to plough back profits. This gains the confidence of its investors
and creates favourable market to raise additional funds in the future.
High Morale
26
3. To incur day-to-day expenses and over head costs such as fuel, power and office expenses
etc.,
6. To maintain the inventories of raw materials, work in progress, stores and spares and
finished stock.
1. Ratio analysis
3. Budgeting
Ratio Analysis
Funds flow analysis is a technical device designated to study the sources from which
additional funds were derived and the use to which these sources were put. It is an effective
management tool to study changes in the financial position (working capital) of a business
enterprise between beginning and ending financial statements dates. The funds flow analysis
consists of
iii.
27
Working Capital Budget
28
4.3Factors Determining Working Capital
Nature of Industry
Demand of Industry
Cash requirements
Nature of business
Manufacturing time
Volume of sales
Terms of purchase and sales
Inventory turnover
Receivable turnover
Factors Business cycle
Affectin
g Current assets
Workin Valuation to sales
g
Production cycle
Capital
Credit control
Liquidity and profitability
Inflation
Seasonal fluctuations
Profit planning and control
Repayment ability
Cash reserves
Operation efficiency
29
Nature of Industry
The composition of an asset the industry of the size of a business and the industry
which it belongs. Small companies have smaller proportions of cash, receivables and
inventory than large corporations. A public utility, for example mostly employs fixed assets
in its operations, while merchandising department depends on inventory and receivables
needs for working capital are thus determined by the nature of the enterprise.
Demand of Industry
Creditors are interested in the security of loans. They want their obligations to be
sufficiently covered. They want the amount of security in assets which are greater than the
liability.
Cash Requirements
Cash is one of the current assets which is essential for successful operations of the
production cycle. Cash should be adequate and properly utilized. It would be wasteful to hold
excessive cash. Unlike illiquid assets, its value is clear cut and define.
Nature of Business
Time
The level of working capital depends upon the time required to manufacture goods. It
he time is longer, the size of working capital is greater, moreover the amount of working
capital depends upon inventory turnover and the unit cost of the goods that are sold. The
greater this cost, the bigger is the amount of working capital.
Volume of Sales
This is the most important factor affecting the size and component of working capital.
A firm maintains current assets because they are needed to support the operational activities
30
which result in sales. The volume of sales increases, there is an increase in the investment of
working capital in the cost of operations in inventories and in receivables.
If the credit terms of purchases are more favourable and those of sales less liberal
cash will be invested in inventory with more favourable credit terms, working capital are
directly related to each other. As the volume of sales increases, there is an increase in the
investment of working capital in the case of operations, in inventories and in receivables.
Inventory Turnover
If the inventory turnover is high, the working capital requirement will be low. With a
better inventory control, a firm is able to reduce its working capital requirements. While
attempting this it should determine the minimum level of stock which, it will have to
maintain thorough out the period of its operations.
Receivable Turnover
Business Turnover
The business turnover of the organisation directly calls for systematic planning for
production. The exploitation of the available business can be achieved only when sufficient
raw materials are store and supplied. Hence business turnover will also influence the working
capital.
Business Cycle
Business expands during periods of prosperity and declines during the period of
depression. Consequently, more working capital is required during periods of depression.
During marked upswings of activity, there is usually a need for larger amounts of capital to
cover the lag between the collection and increased sales and to finance purchase of additional
material to support growing business activity.
31
Value of Current Assets
A decrease in the real value of current assets as compared to their book value reduces
the size of the working capital. If the real value of current assets increase there is increase in
working capital.
Variations in Sales
A seasonal business requires the maximum amount of working capital for a relatively
short period of time.
Production Cycle
The time taken to convert raw materials into finished product is refereed to as the
production cycle or operating cycle. The longer the production cycle, the greater is the
requirement of working capital.
Credit Control
Credit control includes such factors as the volume of credit sales, the terms of credit
sales, the collection policy etc., with a sound credit control policy, it is possible for a firm to
improve its cash inflow.
If a firm desires to take a greater risk for bigger gains or losses it reduces the size of
its, sales. If it is interested in improving its liquidity, it increase the level of its working
capital.
Inflation
32
Seasonal Fluctuations
Seasonal fluctuations in sales affect the level of variable working capital. Often the
demand for products may be of a seasonal nature. Yet inventories have got to be purchased
during certain seasons only. The size of the working capital in one period may, therefore be
bigger than that in another.
The level of working capital is decided by the management in accordance with its
policy of profit planning and control. Adequate profit assists in the generation of cash.
Repayment Ability
A firm’s repayment ability determines level of its working capital. The usual practice
of a firm is to firm to prepare cash follow projections accordingly to its plans of repayment
and to fix working capital levels accordingly.
Cash Reserves
It would be necessary for a firm to maintain some cash reserves to enable it to meet
contingent disbursements. This would provide a buffer against abrupt shortages in cash flows.
Changes in Technology
Firm’s Policies
33
These affect the levels of permanent and variable working capital changes in credit
policy, production policy etc are bound to affect the size of working capital.
A firm’s size, either in terms of its assets or sales, affects its need for working capital.
Bigger firms, with many sources of funds, may need less working capital as compared to
their total assets or sales.
Attitudes of Risk
The greater among of working capital, the lower is the risk of the liquidity.
34
TABLE -1
35
Tax 1280.65 1265.57 1874.17 1806.54 318.20
• Distillery unit in Tamil Nadu had produced 18.22 lakh Bltrs of rectified spirit 156.93
lakh B ltrs of neutral spirit and 0.06lakh Bltrs of fuel oil.
36
TABLE-2
37
1. Punjab national bank consortium
consists of Cash credit and other working capital limits/
• Punjab National Bank. Demand loan aggregating to
• Bank Of Baroda. Rs 23589.07 laksh sanctioned to the company
TABLE -3
38
Interest/turnover 2.17 2.48 1.84 0.93 0.99
ROCE(PBDIT)/average
capital employed % 19.15 19.99 29.66 28.08 11.35
Turnover/average capital
employed
Debtor’s turnover(day) 52 44 40 32 41
39
Inventory
turnover(days) 195 169 108 89 138
Dividend on
equity 3.60 4.50 7.00 7.00 7.00
Dividend on
preference(Rs) - - - 3.00 9.00
Dividend
payout % 11.70 11.13 9.89 11.09 26.72
Net
indebtedness 99.25 135.63 143.68 94.62 120.76
FINANCIAL RESULT
TABLE-6
Financial result
2008-09 2007-08
40
Profit for the year before depreciation 7397.92 14570.19
(less) depreciation 3481.86 3734.83
Profit before tax
3916.06 10835.36
(less) provision income tax
441.55 461.00
Fringe benefit tax
20.57 14.80
MAT credit entitlement
-441.02 -
Deferred tax
-339.30 630.74
Profit after tax
4234.26 9028.82
Add: surplus brought forward from previous
1630.05 1103.37
year
Amount available for appropriation
5864.31 10132.19
Appropriations :
Provision for diminution in value of
0.51 0.48
investment.
Transfer to general reserve
3000.00 7500.80
Divided on preference capital
166.14 55.38
Dividend on equity capital
800.78 800.78
Provision fofr tax on dividend
164.33 145.50
Surplus carried over to balance sheet
1732.55 1630.05
5864.31 10132.19
Source ; Annual Report-2009
TABLE-7
41
At 31.3.08 Schedule At 31.03.09 Total
SOURCE OF FUND’S
SHAREHOLDER FUND’S
43562.73 46815.23
Loan fund’s
16672.34 36203.30
APPLICATION OF FUND’S
FIXED ASSETS
42
38930.50 43668.35
CURRENT ASSETS
43170.40 60660.06
ANALYSIS
From the above balance sheet, there has been a increase in the loans and advances of
the current asset of Rs. 16298.26 in lakhs. Also there has an increase in the inventories of the
company by Rs 7548.73 in lakhs. The over all current asset has been increased by Rs.
43080.10 in lakhs.
43
The fixed asset has been by Rs. 4737.85 in lakhs. Investment has been increased by
Rs. 1408.06 in lakhs.
In the liability side of the balance sheet, current liability has been increase by Rs.
11974 in lakhs. The total loan has been increased by Rs. 19530.96 in lakhs.
Also the company has mobilized fund for Rs. 46815.23 in lakhs.
As a whole, there was an increase in the asset and liability of the company for Rs.
17585.96 in lakhs
44
Income
2460.41 73458.76
241.96 71725.29
1161.00 -318.20
45
630.74 5864.31
1806.54 Appropriation
55.38
145.50
1630.05
89.51
46
4.4CASH FLOW STATEMENT
Cash flow analysis is an analysis based on the movement of cash and bank balances.
Under cash flow analysis, all movements of cash, rather than the movement of working
capital would be considered. Such movements of cash are depicted in a statement called Cash
Flow Statement. It is a statement of changes in financial position prepared on cash basis.
While preparing cash flow statement, two types of cash flows, viz., actual cash flows and
notional cash flows are identified. Actual cash flows refer to the actual movements of cash
into or out of business. Purchase of fixed assets for cash, borrowing from bank or financial
institutions, redemption of debentures, etc., are a few examples of cash flows. But notional
cash flows result only in the case of increase or decrease in current assets. Notional cash
flows result in indirect cash movements into or out of business.
47
Application of cash include
48
TABLE-9
Cash flow statement for the year ended 31.03.09
Year ended 31.03.09 year ended 31.03.08
(Rs in laksh)
A. Operating activities
7613.00 14974.65
49
Net cash from operation -4251.54 11020.61
activities
B. Investing activities
C. Financing activities
4508.53 3262.47
Source; Annual Report-2009
50
ANALYSIS
During the year 2007-2008 there was a profit of Rs. 3916.06 in lakhs. Where as in the next
financial year (i.e.) 2008-2009 the company has gained a profit of Rs. 10835.36 in lakhs. By
comparing the two years cash flow statement the company’s operating activity has been
increased from Rs.- 4251.54 in lakhs to Rs.11020.61 in lakhs.
Also the company’s investment activity has been increased from Rs.9112.68 in lakhs to
Rs. 9538.70 in lakhs. The company’s financial activities had increased the cash position by
issue of equity shares of Rs. 364.1 in lakhs and by borrowing cash of Rs. 2840.7 in lakhs
Overall cash balance has been increased from Rs. 120.04 in lakhs to Rs. 553.01 in lakhs.
51
POWER AND FUEL CONSUMPTION:
TABLE-10
Current year Previous year
Electricity
b. Own generation
52
SCHEDULES :
TABLE-11
53
As at As at 31.3.09 Total
31.3.08 details Rs in laksh
SCHEDULE-1
SHARE CAPITAL AUTHORISED
PENDING ALLOTMENT
SCHEDULE -2
RESERVE AND SURPLUS
Capital reserve
Government subsidy
506.25 Balance as per last balance sheet 506.25
8503.35 8503.35
GENERAL RESERVE
29933.11 332933.11
40572.76 TOTAL 54
43825.26
Table-12
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31.3.2010
(Rupees in Lakhs)
55
Tax expenses:
10.. 1512.29 462.12
a. Provision for Taxation
b. MAT Credit Entitlement (707.30) (441.02)
c. Provision for Deferred Tax 401.75 (339.30)
d. Total 1206.74 (318.20)
Net Profit/(Loss) from Ordinary Activities after
11. 11982.77 4234.26
Tax ( 9- 10)
12. Extraordinary Items (net of tax expenses Rs. ) -- --
13. Net Profit/(Loss) for the Period (11-12) 11982.77 4234.26
Paid-up Equity Share capital
14. 1143.97 1143.97
(Face value Rs.10/- per share)
Reserves excluding Revaluation Reserves as per
15. 54270.48 43825.26
Balance Sheet of Previous Accounting Year
16. Earning Per Share (EPS)
a. Basic and diluted EPS before Extraordinary
items for the period, for the year to-date and for 103.05 35.31
the previous year (Rs.)
b. Basic and diluted EPS after Extraordinary
items for the period, for the year to-date and for 103.05 35.31
the previous year (Rs.)
17. Public Shareholding
- Number of Shares 5179424 5182753
- Percentage of Shareholding 45.28 45.30
18. Promoters and Promoter group Shareholding:
a. Pledged/Encumbered
- Number of Shares NIL NIL
- Percentage of Shares (as a % of of the total
N.A. N.A.
share holding of promoter and promoter group)
- Percentage of Shares (as a % of of the total
N.A. N.A.
share holding of the company)
b. Non-encumbered
- Number of Shares 6260276 6256947
- Percentage of Shares (as a % of of the total
100 100
share holding of promoter and promoter group)
- Percentage of Shares (as a % of of the total
54.72 54.70
share holding of the company)
56
Notes:
1. The above results have been taken on record by the Board of Directors at their
meeting held on 25rd June 2010.
2. The Board of Directors have recommended dividend of Rs.10/- per share on Equity
Share of Rs. 10/- each and Rs. 9/- per share on Preference Share of Rs. 100/- each for
the year ended 31.3.2010
3. During the quarter ended 31st March 2010, six investor complaints were received,
which were promptly attended to by the company. No complaints were pending either
at the beginning (or) at the end of the quarter.
4. Previous year figures have been re-grouped wherever necessary.
57
TABLE-13
58
a) Sugar 52636.03 57463.01
b) Power 6731.93 11409.42
c) Distillery 9890.18 6113.57
d) Unallocated 4494.06 3960.95
Total 73752.20 78946.95
CURRENT RATIO
Current Ratio may be defined as the relationship between current assets and current
liabilities. This ratio is also known as working capital ratio. It is used to make on analysis of
a short term financial position or liquidity of a firm. It is a calculated by dividing the total
current assets by total current liabilities. The formula for calculating current ratio is
Current Assets
Current Ratio = * 100
Current Liabilities
TABLE-14
Year 04-05 05-06 06-07 07-08 08-09
CHART-1
59
current ratio
2.5
2 2004-05
2005-06
1.5
2006-07
1 2007-08
2008-09
0.5
0
2004-05 2005-06 2006-07 2007-08 2008-09
Analysis
Current ratio was increased in the year of 04-08 but in the year 08-09 current ratio was
decreased . The current ratio is an index of the concern’s financial stability of the company
and through the current ratio of a company show’s their stability in finance and should
sustain their current ratio. High ratio mean’s excessive dependence on long term sources of
raising funds.
Here I interpret the current ratio decreased shows the poor financial performance of the
company. Due a lack of sugarcane
60
CURRENT ASSETS TURNOVER RATIO
The ratio is calculated to ascertain the efficiency of current assets of the concern.
Observes that the current assets turnover is to give an overall impression of how rapidly the
total investment in current assets is being turned with a decrease in sales. Higher ratio is
generally an index of better efficiency and profitability of the concern.
Sales
Current Assets Turnover ratio = x 100
Current Assets
TABLE-15
61
CHART-2
RATIO
350
300
250
200
150 RATIO
100
50
0
2007-08 2008-09
Current asset turnover ratio has decreased in the year 08-09 when compared to the year 07-08
due to the decrease in the sales in the corresponding year.
QUICK RATIO:
TABLE-16
Year 04-05 05-06 06-07 07-08 08-09
CHAT-3
62
Quick ratio
1.6
1.4
1.2
1
04-05
0.8
05-06
0.6 06-07
07-08
0.4
08-09
0.2
0
04-05 05-06 06-07 07-08 08-09
Analysis:
The above chart indicates the low performance in the year 08-09. From the year 04-08 quick
ratio has increased steeply. But in the year 08-09 the quick ratio has been decreased due to
the down turn of the sugar industry.
This ratio measure the efficiency with which the working capital is being used by a
firm. A higher ratio indicates efficient utilization of working capital and a low ratio indicates
otherwise. But a very high working capital turnover ratio is not a good situation for any firm
and hence care must be taken while interpreting the ratio. Working capital turnover ratio
indicated the velocity of the utilization of networking capial.
63
Cost of goods sold
Working Capital Turnover Ratio =
Net Working Capital
Table-17
year Sales Working capital Ratio
CHART-4
WORKINGCAPITALTURN OVERRATIO
3.5
3
2.5
2
1.5 WORKING CAPITAL TURN
1 OVER RATIO
0.5
0
2007-08 2008-09
Analysis
The working capital turnover ratio has decreased in the year 2007-08. The decrease in
working capital turnover ratio is due to the decrease in the sales.
This ratio is calculated by dividing the total of current assets by the amount of fixed
assets in terms of percentage would be
Current Assets
Current Assets to Fixed Assets Ratio = x 100
Fixed Assets
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TABLE-18
Year Current assets Fixed assets Ratio
CHAT-5
RATIO
120
100
80
60
RATIO
40
20
0
2007-08 2008-09
Analysis :
The above chart shows the ratio between current assets and fixed assets. Both the current and
fixed assets have increased in the years 07-08 and 08-09. In the year 08-09 current and fixed
assets were more or less equal.
65
EPS:
TABLE-19
YEAR 04-05 05-06 06-07 07-08 08-09
CHAT-6
EPS
120
100
80
60
40
20
0
04-'05 05-'06 06-'07 07-'08 08-'09
EPS
Analysis
EPS (Earning per share) is uneven in the last 5 years. In a year 08-09 EPS was 37.01 it was
lower than the year of 07-08, because of the slide in the share market.
66
TURNOVER
TABLE-20
YEAR TURN OVER
04-05 52273.24
05-06 44933.92
06-07 59427.12
07-08 82265.05
08-09 73468.34
CHART-7
TURN OVER
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
04-05 05-06 06-07 07-08 08-09
TURN OVER
Analysis :
From 2005 to 2008 the company’s turnover has increased steeply but in the year 2009 it
decreased, because of the increase in sugarcane and oil price. The turnover of the company in
the year 2008 is Rs.82265.05 (in lakhs) and in the year the 2009 it slides down to
Rs.73468.34 (in lakhs).
67
RAW MATERIAL
TABLE-21
YEAR RAW MATERIAL
04-05 26961.48
05-06 18654.02
06-07 23960.08
07-08 39071.60
08-09 38375.83
CHART-8
RAWMATERIAL
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
04-045 05-06 06-07 07-08 08-09
RAW MATERIAL
Analysis
Raw material utilisation has increased steeply in the year 07-08 when compared to the
previous years. In the year 2008-09 there is a slight decrease in the raw material
consumption.
68
AVERAGE TURNOVER RATIO
TABLE-22
AVERAGE
TURNOVER
RATIO 1.16 0.92 1.26 1.36 0.91
CHAT-9
Analysis
Average turnover ratio of the year 2008-09 has decreased when compared to the previous
year due to the lack of sugarcane in the region. Turnover ratio indicates the growth of the
company depends on the production capacity.
69
DEBT EQUITY RATIO
TABLE-23
YEAR DEBT EQUITY RATIO
04-05 0.55
05-06 0.62
06-07 0.49
07-08 0.26
08-09 0.31
CHAT-10
DEBTEQUITY RATIO
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
04-05 05-06 06-07 07-08 08-09
Analysis:
The debt equity ratio is determined to ascertain the soundness of the long term financial
policies o the company. It is also known as a external- internal equity ratio and the ratio
indicates the extent to which the firm depends upon outsiders for its existences. Debt equity
ratio was decrease from 04-08 and some increase in the last year of 08-09
Problem identification
70
• The cost of input’s especially sugarcane price rose steeply adding to the adverse
condition.
71
FINDINGS
The following findings have emerged after the analysis and interpretations of data
from the records of BANNARI AMMAN SUGARS LTD..,
The comparative of all balance sheet and schedule are indicates that the company has
not performed well in the all activities (because lack of sugarcane) the profit has also
decreased double from previous year.
Also the company has increased its operating and non operating expenses for that
level. Where as in the next operating year the company has reduced its expenses and
also increased its sales to a greater extend.
The company has recovered its loans and advances are increase from the year by year.
Also the company has mobilized fund by issuing bonds and invested in the fixed
assets which is also a reason for increase in sales.
From the financial highlight, it is clear that the company is in the prosperity which
means the company’s property is increasing continuously.
Also the company’s cash position was increasing during the period of study which
indicates the company’s operating efficiency.
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SUGGESTIONS
The company’s performance is getting fluctuation over a period of time. If they could
continue this, the shareholders will not benefited
By looking into the dividend declared by the company, it is clear that the company
gives more importance to the shareholders wealth.
The company may try to repay their long term loans and advances sooner so that they
may avoid paying interest in huge amount.
The company is constantly increasing its current liabilities. If this continues for a
period of time, the company will be not free from its liabilities.
The cash position of the company is maintained properly. This will help the company
to meet out their immediate payment to their creditors.
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BIBLIOGRAPHY
From Company: Annual report 2008-09.
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