Ratio Analysis On Renuka Sugars Ltd.

SHREE RENUKA SUGARS, MUNOLI
EXECUTIVE SUMMARY:
This project has been done in Shree Renuka Sugars Pvt. Ltd. The company is situated in
Munoli. It deals in sugar refiner, ethanol producer, power and bio-fertilizers.
The study gives an idea about the “A study on financial performance using Ratio’s”. At Shree
Renuka Sugars. A ratio analysis plays an important role in the successful operation of
business activities. It is one of the important concept of “Financial Department” in each and
every department of company. It helps to study the financial statement in details i.e consists
of two statement, they are:
 Profit & loss A/c of the company.
 Balance sheet of the company.
Ratio analysis is an important tool for financial manager is interpreting the financial
statement. A ratio signifies relationship between two figures expressed in terms of
percentage or quotient. It represents mathematical relationship between two factors
expressed in numerical terms.
Ratio may be regarded as important tool of a business, its efficient provision can do much to
success of a business its efficient management can lead not only loss of profits but also to
the downfall of a business. A study of ratio analysis is of major importance to understand
financial condition of organization and to increase the profits.
The arithmetical method of ascertaining the interrelation between any two numeric data
expressed in accounting statement is known as Accounting Ratio. The definition implies that
in use of an accounting ratio both the components in the form of numerals or variable used
in computing a ratio are taken from the financial statement prepared in financial
accounting.
The company is running profitably and the ratio analysis required by the firm to understand
financial performance.
KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 1

Title of the project:
“A study on financial performance using Ratio’s”
Objevtives of the study:
 To study the financial performance of the firm using ratio’s.

 To study and analysis the different types of ratio.
 To analysis profitability ratio.
 To analysis the utilisation of ratio analysis.
This project is conducted to know and understand the performance of the company. I used
primary and secondary data in this research and I also used three years balance sheet as my
sample to calculate the different ratio of the company.
The study covers calculation of components of debtor turnover ratio, stock turnover ratio,
working capital turnover ratio, gross profits etc. at the end details of project, balance sheets of
Shree Renuka sugars were attached in annexure part.

Industry Profile

HISTORY OF SUGAR:
It is universally acknowledged that India is the homeland of sugarcane and sugar. There are
references of sugarcane cultivation, its crushing and preparation of Gur in Atharva Veda as
well as Kautaliya's Arthasastra. The scribes of Alexander the Great, who came to India in 327
BC recorded that inhabitants chewed a marvelous reed which produced a kind of honey
without the help of bees. The Indian Religious offerings contains five 'Amrits' (elixiris) like
milk, curd, ghee(clarified butter), honey and sugar - which indicates how important sugar is
not only as an item of consumption but as an item which influences the Indian way of life.
It is thought that cane sugar was first used by man in Polynesia from where it spread to India.
In 510 BC the Emperor Darius of what was then Persia invaded India where he found "the
reed which gives honey without bees". The secret of cane sugar, as with many other of man's
discoveries, was kept a closely guarded secret whilst the finished product was exported for a
rich profit.
It was the major expansion of the Arab peoples

in the seventh century AD that led to a breaking
of the secret. When they invaded Persia in 642
AD they found sugar cane being grown and
learnt how sugar was made. As their expansion
continued they established sugar production in
other lands that they conquered including North
Africa and Spain.
Sugar was only discovered by western Europeans as a result of the Crusades in the
11th Century AD. Crusaders returning home talked of this "new spice" and how pleasant it
was. The first sugar was recorded in England in 1099. The subsequent centuries saw a major
expansion of western European trade with the East,
including the importation of sugar. It is recorded,
for instance, that sugar was available in London at
"two shillings a pound" in 1319 AD. This equates
to about US$100 per kilo at today's prices so it was
very much a luxury.

In the 15th century AD, European sugar was refined in Venice, confirmation that even then
when quantities were small, it was difficult to transport sugar as a food grade product. In the
same century, Columbus sailed to the Americas, the "New World". It is recorded that in 1493
he took sugar cane plants to grow in the Caribbean. The climate there was so advantageous
for the growth of the cane that an industry was quickly established.
By 1750 there were 120 sugar refineries operating in Britain. Their combined output was
only 30,000 tons per annum. At this stage sugar was still a luxury and vast profits were made
to the extent that sugar was called "white gold". Governments recognized the vast profits to
be made from sugar and taxed it highly. In Britain for instance, sugar tax in 1781 totaled
£326,000, a figure that had grown by 1815 to £3,000,000. This situation was to stay until
1874 when the British government, under Prime Minister Gladstone, abolished the tax and
brought sugar prices within the means of the ordinary citizen.
Sugar beet was first identified as a source of sugar in 1747. No doubt the vested interests in
the cane sugar plantations made sure that it stayed as no more than a curiosity, a situation that
prevailed until the Napoleonic wars at the start of the 19th century when Britain blockaded
sugar imports to continental Europe. By 1880 sugar beet had replaced sugar cane as the main
source of sugar on continental Europe. Those same vested interests probably delayed the
introduction of beet sugar to England until the First World War when Britain's sugar imports
were threatened.
Today's modern sugar industry is still beset with government interference at many levels and
throughout the world. Annual consumption is now running at about 120 million tons and is
expanding at a rate of about 2 million tons per annum. The European Union, Brazil and India
are the top three producers and together account for some 40% of the annual production.
However most sugar is consumed within the country of production and only approximately
25% is traded internationally.
One of the most important examples of governmental actions is within the European Union
where sugar prices are so heavily subsidized that over 5 million tons of white beet sugar have
to be exported annually and yet a million tons of raw cane sugar are imported from former
colonies. This latter activity is a form of overseas aid which is also practiced by the USA.

The EU's over-production and subsequent dumping has now been subjected to GATT
requirements which should see a substantial cut-back in production over the next few years.
GLOBAL SUGAR INDUSTRY:
Industry Facts:
• World sugar production is expected to be 170.9 MMT in 2016-17.
• In 2016-17, the top five sugar producers, namely Brazil, India, European Union, Thailand
and China will account for nearly 57% global sugar production.
• Amongst the top 10 producers in the World, sugar production in 2016-17 declined in only
two countries namely India and US.
• Sugar mills are increasingly allotting more cane for sugar versus ethanol. In 2016-17, close
to 47% of cane in Brazil was allotted for sugar production, the highest ever allotment levels.
• In 2016-17, the global sugar consumption is estimated to outpace production for the second
year in a row since 2009-10.
• In October 2016, raw sugar prices soared to the highest levels in 5 years at above 23
cents/pound and since then prices have declined to 14 cents/ pound currently.
Production and consumption:
According to USDA, global sugar production is estimated at 170.9 MMT in

2016-17, up 3.7% as compared to 164.7 MMT in 2015-16 driven by higher output in Brazil
and increased allocation of cane for sugar production (close to 47%, highest ever). Global
sugar consumption is estimated at 171.9 MMT in 2016-17 reflecting an increase of 1.48%
over 169.4 MMT in 2015-16. In 2016-17, the global sugar consumption is estimated to
outpace production for the second year in a row since 2009-10. The ending stock in 2016-17
is projected at 38.8 MMT, a 11.5% decline over the previous year’s level of 43.9 MMT.

COMPANY PROFILE

Type Public Company

Industry Sugar
Founded 1998
Founder(s) NarendraMurkumbi&VidyaMurkumbi
Headquarters Belgaum, Karnataka, India
Area Served Belgaum
Key People NarendraMurkumbi, MD
Owner(s) NarendraMurkumbi
Website www.renukasugars.com
Shree Renuka Sugars is India's largest sugar refiner and ethanol producer based in Mumbai,
Maharashtra, with refining capacity of 4000 tons/day and distillery capacity of 600 Kilo
liter/day. It has 21% market share in India's fuel ethanol market and has an aggressive growth
plan of increasing its ethanol production capacity to 900 Kilo liter/day by Dec 2009. It also
accounts for 20% of India's international sugar trade.
SRSL is a fully integrated sugar company focused on sugar manufacturing and trading with
by-products such as power, ethanol and bio-fertilizers. SRSL owns five sugar units (four in
Karnataka and one in Maharashtra) and has taken on lease three sugar units (two in
Maharashtra and one in Karnataka). SRSL’s five owned manufacturing facilities are located
at Munoli, Athani, Havalga and Gokak in Karnataka, and at Pathri in Maharashtra. Three
leased facilities are located at Arag&Panchaganga in Maharashtra, and at Raibag in
Karnataka. SRSL has dedicated port based refineries at Haldia having a refining capacity of
2,500 TPD and Kandla with refining capacity of 3,000 TPD a secondary distillation plant at
Khapoli having a distilling capacity of 300 KLPD.
In Fiscal Year 1998, SRSL acquired a sugar mill at Hindupur in Andhra Pradesh with
a sugar manufacturing capacity of 1,250 TCD from the Government of Andhra Pradesh. In
Fiscal Year 1999, this unit was moved to Munoli, Karnataka and the company expanded its
sugar manufacturing capacity to 2,500 TCD with a 11.2 MW cogeneration plant. SRSL
increased its co-generation capacity from 11.2 MW to 35.5 MW in Fiscal Year 2008

Thereafter, SRSL has been rapidly scaling up and integrating its manufacturing operations on
a continuous basis by 1) acquiring old plants, expanding and modernizing them, 2) acquiring
plants on lease and 3) setting up new grass root plants as brought out in the following
paragraphs.
In Fiscal Year 2002, SRSL ventured into the manufacture of ethanol by setting up a
distillery with a distilling capacity of 60 KLPD at Munoli unit. In Fiscal Year 2003, they set
up a refinery to process raw sugar with a refining capacity of 250 TPD at Munoli with
technical assistance from Tale & Lyle Industries Ltd. of UK and subsequently increased its
refining capacity to 1,000 TPD in Fiscal Year 2007. In the same fiscal year of 2007, the sugar
manufacturing capacity of Munoli plant increased to 7,500 TCD and its distillery capacity
was increased to 120 KLPD.
In Oct 2004, SRSL took on lease the sugar mill of AjaraShetkariSahakariSakharKarkhana

Ltd. located at Ajara in Maharashtra having facilities for the manufacture of white crystal
sugar with a capacity of 2500 TCD. Initially, the lease was for a period of two years
commencing from the crushing season 2004-05. The lease agreement was extended for
further three years i.e. up to the crushing season 2008-09.
In Fiscal Year 2005, Company acquired from M/s. Haripriya Sugars a green-field
project at Athani with land and licenses and successfully commissioned a 6,000 TCD plant in
March 2007 with a co-generation facility of 38 MW and a distillery of 120 KLPD. In Fiscal
Year 2008, the sugar manufacturing and distillery capacity at Athani was increased to 8,000
TCD and 300 KLPD, respectively, along with the addition of refining capacity of 1,000 TPD
and subsequently the refining capacity was increased to 2000 TPD in the fiscal year 2010.
SRSL also acquired another sugar factory of MohanraoShindeSahakariSakharKarkhana Ltd

located at Arag in Maharashtra having facilities for manufacture of white crystal sugar with a
capacity of 2500 TCD on lease for a period of six years i.e. the crushing season 2005-06. As
per terms of the lease agreement, lease rental of Rs. 2.80 crore was payable for the season
2005-06 and lease rental of Rs. 5.55 crore per year is payable in four equal quarterly
installments each year for the next five crushing seasons. The sugarcane crushing capacity of
this unit has since been increased from 2500 TCD to 4000 TCD by installation of some
balancing equipment and the expanded capacity has commenced commercial operations from
sugarcane crushing season 2006-07.

In Fiscal Year 2006, SRSL also acquired a sick sugar mill of 2,500 TCD in
Sindhkheda, Dhule, Maharashtra from Sitson India Private Limited which was dismantled
and relocated and expanded to 4,000 TCD at Havalga, Afzalpur, Karnataka in 2006. In Fiscal
Year 2008, SRSL increased the sugar manufacturing capacity at Havalga to 8,000 TCD. They
also added cogeneration capacity of 25.5 MW and distillery capacity of 180 KLPD in year
2008-09 and subsequently implemented 1000 TPD refining plant in 2009-10.
In Fiscal Year 2006, Company acquired another lease unit, a loss-making co-
operative sugar mill viz. The AllandSahakariSakkareKarkhaneNiyamith having facilities for
the manufacture of white crystal sugar with a capacity of 1250 TCD located at Aland in the
State of Karnataka for a period of seven years commencing from the crushing season 2005-06
but the lease was terminated in the year 2007-08.
In Fiscal Year 2008, SRSL acquired Ratnaprabha Sugars Limited, which owns a mill in
Pathri, Maharashtra with a sugar manufacturing capacity of 1,250 TCD and a distillery with a
capacity of 30 KLPD. In the same year, company also acquired 87.28% of Gokak Sugars
Limited, which has a sugar manufacturing capacity of 2,500 TCD and a co-generation
capacity of 14 MW. In Fiscal Year 2008, SRSL also acquired on lease a cooperative sugar
mill in Raibag, Karnataka with a sugar manufacturing capacity of 2,500 TCD.
In October 2008, SRSL commissioned a 2,500 TPD secondary refinery at Haldia, West
Bengal in addition to the two refineries of 1,000 TPD at Munoli and Athani. In Fiscal Year
2008, it acquired the Khapoli plant from Dhanuka Petro Chem. with a secondary distillation
capacity of 100 KLPD and increased it to 300 KLPD in the same year.
SRSL has set-up a 30MW co-generation plant on land leased from Panchganga SSK at their
site in Kolhapur district, Maharashtra on a 20 years BOOT basis. The same has commenced
operations from the first quarter of Fiscal Year 2010. Further, SRSL has set up additional
24MW co-generation plant on a similar BOOT basis on land leased by Ajinkyatara SSK at
Satara in Maharashtra.
SRSL commissioned another refinery on the west coast in the state of Gujarat at Kandla
with a sugar refining capacity of 3,000 TPD and 45 MW power plant in February 2012.
On 19th March, 2010 the Company completed the acquisition of Vale do Ivaí S.A. Açúcar e
Álcool ("VDI") a Brazilian sugar and ethanol production company and renamed it as Renuka
Vale do Ivai S/A (RVdI). The acquisition includes two sugar and ethanol production facilities

located in the Southern State of Parana with a combined cane crushing capacity of 3.1 million
tons per annum. In addition, RVDI holds strategic stakes in several logistics assets including
terminals for storage and loading of sugar and ethanol at the port of Paranagua. Larger part of
the sugarcane requirements at RVDI are met through its own cultivation of more than 18,000
Ha of land on long lease. RVDI has currently a third production facility in the State of Minas
Gerais which shall be spun off to the current shareholders of RVDI as a consideration for the
acquisition.
In June 2010, SRSL acquired controlling stake in Equipav S.A. Açúcar e Álcool
(“Equipav AA”). As per the terms, the Company shall invest R$ 450 million (USD 250
million, INR 1,151 crores) in Equipav leading to a majority, controlling stake of 50.34%.
This values Equipav AA at an Enterprise value of R$ 2.064 billion (USD 1.147 billion). They
further increased their stake to 59.4% by March 2012 by adding additional equity of R$ 200
million (USD 115 million). SRSL renamed it as Renuka do Brazil S/A (RdB). RdB consists
of two very large and modern sugar/ethanol mills with integrated co-generation facilities in
Sao Paulo state in Southeast Brazil having a combined cane crushing capacity of 10.5 million
tons of cane per annum (44,400 TCD). In addition, it has a co-generation capacity of
295MW. Cane supply comes from the cultivation of about 115,000 Ha of land of which
nearly 2/3rd is cultivated by the Company with very high level of mechanization for both
planting and harvesting. The mills have easy access to the main ports of Santos and
Paranagua.
COMPANY OVERVIEW:
Shree Renuka Sugars is a global agribusiness and bio-energy corporation. The Company is
one of the largest sugar producers in the world, the leading manufacturer of sugar in India,
and one of the largest sugar refiners in the world. The company has its Corporate office in
Mumbai (Maharashtra, India) and Head Office in Belgaum (Karnataka, India).
The Company operates eleven integrated sugar mills globally (four in Brazil & seven in
India) & two port based refineries in India.

The Company Operates in the following Segments :
Sugar:
The Company operates eleven mills globally with a
total crushing capacity of 20.7 million tons per
annum (MTPA) or 94,520 tons crushed per day
(TCD). The Company operates seven sugar mills in
India with a total crushing capacity of 7.1 MTPA or
35,000 TCD and two port based sugar refineries with
capacity of 1.7 MTPA. The Company also has
significant presence in South Brazil, through acquisitions of Renuka Vale do Ivai and Renuka
do Brazil. Renuka Vale do Ivai was acquired on 19th March 2010 and is 100% owned by the
Company. The Company currently holds 59.4% equity stake in Renuka do Brazil which was
acquired on 7th July 2010. The combined crushing capacity of the Brazilian subsidiary
companies is 13.6 MTPA. The Company is the only sugar producer globally with year round
crushing due to complementary seasons in India and Brazil.
Ethanol:
The Company manufactures fuel grade ethanol that
can be blended with petrol. Global distillery capacity
is 6,240 KL per day (KLPD) with Indian distillery
capacity at 930 KLPD (630 KLPD from molasses to
ethanol and 300 KLPD from rectified spirit to
ethanol)and Brazil distillery capacity at 5,310KLPD.

KBK Chem-Engineering (100% subsidiary) facilitates turnkey distillery, ethanol and bio-fuel
plant solutions.
Power:
The Company produces power from bagasse (a
sugar cane by product) for captive consumption
and sale to the state grid in India and Brazil. Total
Cogeneration capacity increased to 555MW with
exportable surplus of 356 MW. Indian operations
produce 242 MW with exportable surplus of 135
MW and Brazilian operations produce 313 MW
with exportable surplus of 221 MW.
Bio-Fertilizers:
Sugar industry is a unique industry which follows
the principle of soil-to-soil. Press-mud/filter cake
obtained as waste during sugar manufacturing
process is mixed with the effluent from distillery
operations to give bio fertilizer. This bio fertilizer
is organic, eco-friendly and cost-effective
compared to chemical fertilizers.
The Company’s presence in the largest sugar producing country, Brazil and the largest sugar
consuming country, India provides access to information on movements in market price and
the know-how of the global supply-demand situation. The Company’s operations in Brazil
are favored by low operating cost, high scalability and highly conducive climatic conditions.
The Company’s Indian operations are present in sugar rich belt of South and West India,
ensuring high sugarcane yields and sugar recovery from cane. The strategically located port-
based refineries in Gujarat and West Bengal states of India cover India, South Asia and
Middle-East markets competitively.
The Company has witnessed a strong Revenue CAGR of 55% and EBITDA CAGR of 58%
from FY2006 to FY2012. The strong financial performance has ensured consistent returns for
shareholders with an average Return on Equity of approx. 20% from FY 2006 to FY 2012.

The Company’s strong Management team has delivered consistently to ensure growth
through successful completion of strategic acquisitions.
The shares of the Company are listed on the Bombay Stock Exchange Ltd (BSE) and the
National Stock Exchange of India Ltd (NSE)
NSE Symbol – Renuka

BSE symbol - 532670
Bloomberg symbol - SHRS:IN
Reuters symbol - SRES.BO, SRES.NS.
MILESTONES:
 1998: Foundation of Shree Renuka Sugars with the acquisition of assets of Nizam
Sugars Ltd. in Andhra Pradesh.
 2000: Commissioned a co-generation plant at Munoli, Karnataka.
 2001: Commissioned a 60 KLPD distillery at Munoli.
 2002: Established 250 tonnes per day sugar refinery at Munoli.
 2003: Leased first co-operative Mill.
 2005: Successfully completed Initial Public Offering & Established a Greenfield
sugar mill at Athani, Karnataka.
 2006: Acquired sugar mill in Sindhkheda and relocated it to Havalga in Karnataka.
 2007: Acquired KBK Chem Engineering Pvt. Ltd., Maharashtra.
 2008: Commissioned a refinery of 2,000 tonnes per day at Haldia in West Bengal.
 2009: Commissioned co-generation plant in Panchganga Co-operative Sugar Mill on
BOOT basis (Maharashtra).
 2010: Acquired 100% stake in Renuka Vale do Ivai S/A and 50.34% stake in Renuka
do Brazil S/A (Equipav).
 2011: Commissioned a 3,000 tonnes per day port based refinery in Gujarat (near
Kandla).
 2012: Increased stake in Renuka do Brazil S/A to 59.4%.

ACHIEVEMENTS AND AWARDS:

 The company is working as per ISO9001 quality standards.
 The company is working as per ISO 14000 environmental standards.
 The company has also been awarded a 2 star export house status by the Director
General of Foreign Trade(DGFT), Government of India.
 the company's Bagasse based cogeneration plant at Munoli has qualified a Clean
Development Mechanism(CDM) project.
 The company has also bagged a Silver Medal at South Indian Sugarcane & Sugar
Technology 2001-2002 for energy conservation measures at SRSL.
 SRSL is recognised as first largest plant of Ethanol by Mr.Kannappa, Honourable
Minister of MNSE and Mr.Bhaktavatsalam Managing Director of IREDA.
 The modern technology of Re-boiler cuts down quantity of effluent produced by 14%,
helping management of spent wash.
 remarkable reduction in generation of spent wash through various measures.
 Zero discharge status for distillery. Recycle and reuse adaptability in sugar plant,
cogeneration and distillery.
 SRSL has taken up an ambitious program of planting 30,000 trees in the campus of
factory and has successfully implemented it which improves the environment and
adds to the beautification of the sugar mill.
BOARD OF DIRECTORS:
Name Designation
Mrs.Vidya M. Murkumbi Executive Chairperson
Mr. NarendraMurkumbi Vice Chairman & Managing Director
Mr. S. K. Tuteja Independent Director
Mr. Sanjay K. Asher Independent Director
Mr. DorabMistry Independent Director
Mr. BhupatraiPremji Independent Director
Mr. HrishikeshParandekar Independent Director
Mr. Jean-Luc Bohbot Non Executive Director
Mr.AtulChaturvedi Non Executive Director

MANAGEMENT TEAM :
Name Designation
Mrs. Vidya M. Murkumbi Co-founder, Executive Chairperson
Mr. NarendraMurkumbi Co-founder, Vice Chairman & MD
Mr. Nandan V. Yalgi Executive Director Commercial & HR
Mr. Krishna Kumar Kumbhat Chief Financial Officer
Mr. VineshSadekar Head, Group Corporate Strategy
Mr. GautamWatve Head, International Business Division
Mr. Vijendra Singh Executive Director
Mr. S. R. Nerlikar Executive Director, Cane
Mr. Pratik Vora General Manager, Renuka DMCC
PROMOTERS:
Smt. Vidya M. Murkumbi, is the Executive Chairperson of SRSL. She is a chemistry
graduate from the Karnataka University. She spent about 23 years in the trading and
distribution of Tata's and Parle's products. Prior to promoting SRSL, Smt. Murkumbi started
her industrial experience with Murkumbi Bio Agro Pvt. Ltd and Murkumbi Industries Private
Ltd. which were engaged in agro-processing and chemical formulation. After having four
years industrial experience she promoted SRSL. She has received the following prestigious
awards for her professional achievement:
 VIKAS RATNA AWARD for Best Lady Entrepreneur, 2000
 Award for contribution in industrial growth of India, conferred by Smt.
SushmaSwaraj, Hon'ble Minister for I & B, GOI, 2000
 BhartiyaUdyog award, for Role of Individuals in India's Economic
Development, 2000
In the year 2006, the Karnataka Government felicitated her with ‘Karnataka Ratna’ in
recognition of her achievements. She served as the president of South Indian Sugar Mills

Association for the period 2003-05. She was member of Tuteja Committee set up by the
Govt. of India in 2004 for revitalization of sugar industry.
Mr. Narendra M. Murkumbi, son of Smt. Vidya M. Murkumbi, aged about 42 years is the
Managing Director and Vice-Chairman of SRSL. He is an Electronic and Tele-
communication Engineer from Karnataka University and Post Graduate Diploma holder in
Management from IIM Ahmadabad with specialization in Entrepreneurship and New Venture
Management. Mr. Murkumbi is also recipient of Economic Times – Entrepreneur of the Year
Award 2010.
PLANT LOCATIONS (INDIA) :

Unit Location
Unit I Village Munoli, Taluka:Saundatti, District Belgaum, Karnataka.
Unit II Village Mohannagar, Arag, TalukaMiraj, District Sangli, Maharashtra.
Unit IV Village Buralatti,(Kokatnur), TalukaAthani, District Belgaum, Karnataka.
Unit V Village Havalga, TalukaAfzalpur, District Gulbarga, Karnataka.
Unit X TalukaRaibag, District Belgaum, Karnataka.
Unit VIII Village Deonandra,TalukaPathri, District Parbhani, Maharashtra.
Unit IX Village Kolavi, Taluka Gokak, District Belgaum, Karnataka.
Unit E1 Village Donvat, Khapoli, TalukaKhalapur, Maharashtra.
Unit R1 Haldia, District PurbaMidnapur, Kolkata, West Bengal.
Unit R2 Kandla, Gujarat.
Unit 11 Ichalkaranji, Village Kabnoor, TalukaHatnagale, District Kolhapur,
Maharashtra.
Unit 12 Shahunagar, TalukaShindre, District Satara, Maharashtra.
Unit 13 TalukaMulshi, District Pune, Maharashtra
PLANT LOCATION (BRAZIL) :

Renuka do Brazil S/A:
Unit Location
Unit 1 UsinaMadhuPromissao, Sao Paulo Brazil
Unit 2 UsinaRevatiBrejoAlegre, Sao Paulo Brazil
Renuka Vale do Ival S/A:
Unit Location
Unit 1 Usina Sao Pedro do Ivai Sao Pedro do Ivai, Parana
Brazil
Unit 2 UsinaCambui Sao Miguel do Cambui, Parana
Brazil

ORGANIZATION STUDY

ORGANIZATION STRUCTURE:
Structure refers to the organizational arrangement for performing tasks and activities. Te
structure could be line, functional, regional and product wise etc. Organizations are economic
and social entities in which a number of persons perform multifarious tasks in order to attain
common goals. An organizational structure is one of the strategic management variables.
Organizational structure is the framework of reporting relationships, role definitions and
accountabilities that are intended to assist the firm in meeting its mission and objectives. In
SRSL the centralized functional division structures is used to control the entire organizational
work flow. it implemented top down management system to handle the work flow of entire
organization so as to bring the systematic relationship in between all the functional areas of
the company. It provides the frame work for relationship among different parts of the
organization. It sets out formal reporting relationships , mode of communication, their
respective roles and rules and regulations for carrying out their different tasks.
SRSL has one registered office, one corporate office and its fully owned overseas subsidiary
to fulfill their all the official and clerical operations.
The following chart shows the formal structure of the organization:

DEPARTMENTS:
1. Production Department
2. Purchase Department
3. Stores Department
4. Administrative Department
5. Finance Department
6. Accounts Departments
7. Cane Departments
8. Engineering Department
9. Sales Department
10. HR Department.
Production Department:
The department deals with the production activities in the production floor where men and
machines are employed to convert the cane and chemical into finished product(sugar) for
handling them over to sales department.
For sugarcane the production process is carried in the following steps:
 Pressing of sugarcane to extract the juice.
 Boiling the juice until it begins to thicken and sugar begins to crystallize.
 Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar.
 Shipping the raw sugar to a refinery where it is washed and filtered to remove
remaining non-sugar ingredients and colour.
 Crystallizing the drying and packing the refined sugar.
Purchase Department:
The head of the department’s heads is the purchasing department. Purchasing decisions are
divided into two. One for purchase of capital assets and another is regular purchase. Purchase
of capital assets: It requires approval of management.
Considerable point while purchasing capital assets are,

 Life duration of the assets.
 Cost of the assets.
 Capacity etc. Regular Purchases:

 Indent from the user is original document to issue purchase order for regular purchase
of materials and goods.
Process:
 Receiving indent from the users.
 Calling tenders if necessary.
 Preparing purchase order.
 Ordering to suppliers
 Making purchase return if the material does not match the order.
Stores Department:
Stores department holds the entire inventory required in the organization all the materials
coming are subject to record at stores and holds them at stores until they are issued to the
required department.
Functions:
 Receipt of materials.
 Inspect it with ordered quantity, quality and any specification.
 Some of the materials like chemicals are to be sent to laboratory for inspection and
testing.
 Getting the indents from the department head and issuing it.
 To make the purchase returns if the materials are rejected.
 Maintain minimum level of materials.
 Informing purchase department when materials require. Materials handled:
 Engineering tools spares.
 Raw materials
 Stationary.
 Packing materials.
Administrative Department:
Overseeing and carrying out office operations, preparing, systematizing and preserving
written communication, distributing information, collecting accounts. Administrative helps
HR functions like employee’s pay, leave’s , attendance, formalities in joining organization.
The administration controls and monitors the activities of the time office and security
personnel. Human Resource Development is the challenging function in front of the
administration department.

Finance Department:
Finance is the life blood of the business. One cannot imagine a business without finance
department because it is the central point of all business activities. Finance department of
SRSL (Shree Renuka Sugars Ltd) plays a very important, as it is here that decision with
regard to procurement and utilization of funds are taken. Such decision includes the
preparation of various budgets, allocation of funds for various activities or division of the
firm as well as distribution of profits etc.
Accounting Department:
SRSL is an industrial organization manufacturing sugar, power and ethanol accounts
department of SSRL plays a vital role in achieving company’s objectives. Need for
accounting system:
 To ascertain the profit/loss of the business.
 To ascertain the financial position of the business
 To provide control over assets and properties of the company
 To provide information to tax authorities like sales tax, income tax, control excise etc.
 Assistance to management on:
1. Decision-making
2. Forward Planning and budgeting.
 To provide information to government central, state and various local bodies.
Cane Department:
Cane is the only raw material for producing sugar. The department keeps a direct link with
farmers and helps the farmer to develop the cane.
Objectives of Cane Department:
 To produce the cane at proper time and proper condition

 To look after the transportation of cane from farmers through trucks, tractors and
carts.
 To develop the cane and giving proper guidelines to grow.
 To keep and maintain concerned land database.
 Hiring trucks and tractors
 Harvesting cane.

Engineering Department:
This department takes care of all repairs and maintenance of fittings and fixtures of the plant.
The electrical engineer is the head of the department. Assistant electrical engineer and junior
engineer assist him.
Functions:
 Repair and maintenance of machines
 To develop power of prime movers and lighting
 Attending electricity related work
 Maintenance of switch board, etc.
Sales Department:
Sales manager is incharge of the sales department. The sales department takes care of all the
sales. The assistant sales manager has to supervise the states. Marketing and advertisement
are not necessary in sugar industry because the customer do not ask for specific company
produced and that not separable.
Anyhow the contacts with dealers and agents are maintained and developed . About 40% of
the sugar produced by the company is used for domestic consumption and the rest 60% is
exported.
Functions:
As mentioned above, marketing and advertisement efforts are not made as mentioned above,
marketing and advertisement efforts are not made to promote sales, but the sales department
has to keep in contact with dealers and agents
 Getting orders from parties.
 Arranging for delivery to parties.
 Maintains records of sales.
 Sending reports to managing director (head office).

Human Resource Department:

 The company recruits its manpower through various sources such as internal sources,
campus recruitments, advertising etc.
 The selection process consists of collection of applications blanks. Screening of
applications, written tests (aptitude& technical, personal interview, technical
interview, medical examination, job offer, placement and induction).
 Training is based on the requirements of the employee. Each employee is given a
questionnaire which consists of the various skills required to perform a particular job.
The employee rates himself on various aspects. Based on the ratings, the area in
which the training is to be given is decided and a training calendar is prepared every
year.
 The employees are appraised on their performance once in every 6 months. The
appraisal method is based on “Rating Scale”. The appraiser rates his subordinate
based on the targets set and how far the subordinate is able to achieve his set targets.
SWOT ANALYSIS:
Strengths:
 We are established since long time.

 Largest sugar and ethanol producer in coastal India.
 Integrated manufacturing company.
 Unique business model.
 Availability of high recovery and yield of sugar cane.
 Good financial health of the company.
Weaknesses:
 Absence of motivating incentives
 High labour turnover
 Obsolete cane cultivation techniques
 Seasonal product fortunes swing from one extreme to another
Opportunities:
 Scope to improve profitability
 Scope to set up green field projects,

 Scope to implement ERO system like SAP etc.

 International markets can be trapped.
 Can acquire more and more sick units in co-operative sector.
Threats:
 Open market system for ethanol and alcohol
 Government's involvement in fixing the sugarcane price
 Huge competition
 Advancement of technology and changing job profile
PRODUCT LIFE CYCLE:

Product life cycle is a business analysis that attempts to identify a set of common stages in
the life of commercial products. In other words the 'Product Life cycle' PLC is used to map
the lifespan of the product such as the stages through which a product goes during its
lifespan.
The stages of Product Life Cycle can be classified as follows :
Introduction:
The establishment stage is characterized by low growth rate of sales as the product is newly
launched in the market. Monopoly can be created, depending upon the efficiency and need of
the product to the customers. Firms usually incur losses rather than profit turning this stage. If
the product is in the new product class, the users may not be aware of its true potential. In
order to achieve that place in the market, extra information about the product should be
transferred to consumers through various media. The stage has the following characteristics:
 Low competition
 Firm mostly incurs losses and not profit
 Promotion goes high
When a new product is introduced, market gain tends to be very slight. Marketing costs may
be high, and it is unlikely that there are any profits.
Growth:
The Growth stage is where your product starts to grow. In this stage a very large amount of
money is spent on advertising. You want to concentrate on telling the consumer how much
better your product is than your competitors' products. Growth comes with the acceptance of

the innovation in the market and profit starts to flow. If the monopoly exists, companies can
experiment with new ideas and innovation in order to maintain the sales growth. The growth
stage exhibits a rapid increase in both sales and profits, and this is the time to try and increase
your product's market share.
Maturity:
The third stage in the Product Life Cycle is the maturity stage. If your product completes the
Introduction and Growth stages then it will spend a great deal of time in the Maturity stage.
During this stage sales grow at a very fast rate and then gradually begin to stabilize. The key
to surviving this stage is differentiating your product from the similar products offered by
your competitors. Due to the fact that sales are beginning to stabilize you must make your
product stand out among the rest. Aggressive competition in the market results in profits
decreasing at the end of the growth stage thus beginning the maturity stage. In addition to
this, the maturity stage of the development process is the most vital.
Decline:
The decline stage is where most of the product class usually dies due to low growth rate in
sales. A number of companies share the same market, making it difficult for all entrants to
maintain sustainable sales levels. Not only is the efficiency of the company an important
factor in the decline, but also the product category itself becomes a factor, as the market may
perceive the product as "old" and may not be in demand. It is not always necessary that a
product should go through these stages. it depends on the type of product, its competitors,
scope of the product, etc. and free from tax perks, and life people.
The duration of each life cycle phase can be controlled, to some extent. The phase that can be
controlled in particular is the maturity phase, in which steps can be taken to ensure that it
lasts longer than what it initially was going to. Some of the known tactics used in extending
the maturity phase are: • by adding or updating the features of a particular product. • by using
different pricing approaches to attract consumers that use a different brand. • by advertising
to encourage people that have never used a product in the category to try it and therefore gain
new customers.
LEADERSHIP STYLE :
Leadership is different to management. Management relies more on planning, organizing and
communication skills. Leadership relies on management skills too, but more so on qualities

such as integrity, honesty, humility, courage, commitment, sincerity, passion, confidence,

positively, wisdom, determination, compassion and sensitivity. Some people are born more
naturally to leadership than others. Most people don't seek to be a leader. Those who want to
be a leader should develop leadership abilities.
Leadership can be performed with different styles. Some leaders have one style, which is
right in certain situation and wrong for others. Some leaders can adapt and use different
leadership styles from the given situation.
 Authoritative Leadership
 Democratic Leadership
 Participative Leadership
In the modern business situation of SRSL, the company is using "Democratic Leadership
Style" . Anyone in the firm can directly meet anyone. Daily meeting will be held between the
sales team and the team manager to solve the problems of the team mate and to collect the
sales details. Team manager will report to the AGM (Assistant General Manager) on the
same day. Once in a week AGM will meet the sales executives. Once in a month Vice-
Chairman of the organization meets all the managers.
The decision power is handled by CEO. he will take major decisions regarding
developmental activities and relationship with other dealers and corporate buyers. Each
department is given power and responsibilities to operate and take decisions.
SRSL has instituted adequate internal control procedures commensurate with the nature of
business and size of its operations. SRSL has also prepared an 'Internal Control Procedure
Manual' for all the departments to ensure that the control procedures are followed by all the
departments. Internal controls are supported by internal audit and management reviews. The
Board of Directors has an Audit Committee chaired by an Independent Director. The Audit
Committee meets periodically the management.
 External-Internal auditors
 Internal-Internal auditors
 Statutory auditors and reviews the audit plans
 Internal controls
 Audit reports and the management response to the observation and recommendations
emanated from the audit. All significant observations and follow-up actions are
reported to the Audit Committee.

STRATEGIC OUTLOOK:
Vision:
To be among the top three integrated sugar and ethanol companies in the world by harnessing
our strengths and realizing synergies through our global presence.
Synergy:
We are present in the world’s largest sugar producing and consuming regions which provide
us with superior business intelligence and help leverage information flows.
Our Brazilian operations have low operating cost, high scalability and highly conducive
climatic conditions.
Our Indian operations are present in Southern and Western parts of India where the recovery
of cane is higher than other cane growing regions in the country.
Our strategically located port-based refineries in India cater to India, South Asia and Middle-
East markets competitively.
Innovation:
Driving Growth through innovation.
Innovation has been the driving force of our growth right from inception.Our journey began
with raising capital innovatively by inducting farmers as shareholders in the Company.
We pioneered the concept of operating sugar manufacturing assets in India on lease.
We are running power projects at third party mills on BOOT basis.
We are one of the first in the traditional Indian sugar industry to have ventured into the
business of sugar refining.
We have aligned our strategies to achieve synergies from our presence in Brazil (the largest
sugar producer), India (the largest sugar consumer) and an extensive reach to the growing
sugar markets in Asia
Mission:
"Its mission in meeting these objectives are to expand its installed capacity, achieve end-to-
end integration for all its plant to improve margins, achieve greater raw material security,
increase its focus of corporate and high value customers to reduce price-risk in sugar by
hedging, maintain a strong presence in export market and expand a market for ethanol.

Social Initiatives:
At Shree Renuka Sugars, our belief is that our work is not over when we report profitability
to our shareholders. We believe we are equally responsible to contribute to the society within
which we operate. To this end, we have sponsored a host of programs that positively impacts
the well being of the people and sections of the society that need intervention to better their
prospects.
We believe that development of the communities in which we operate will result in the
empowerment of not just the people in these communities but the nation at large.
Our CSR foundation has been built on two pillars focusing on Rural Health and
Development as well as Education:
 Shree Renuka Institute for Rural Development & Research (SRIRDR), a NGO
sponsored by Shree Renuka Sugars Ltd. (SRSL) dedicated to serve the cause of
Health and Rural Development.
 Shree Renuka Sugars Development Foundation (SRSDF), a registered Trust engaged
in the promoting education to bring about the rural transformation and sustainable
development.
 Educational Initiatives:
In a bid to improve the educational level of our staff
families and the communities we operate in, we have
tried to contribute by building a variety of educational
institutions that educate, provide employability skills
and help improve the standard of living of the people
in these communities.

 Healthcare Initiatives:
Our initiatives catering to the health and well being
of the communities we operate in include Health
Centers, Multi Diagnostic health camps, a Hi Tech
Diagnostic centre, an Ambulance service and
ShakarShalas for children of cane harvesting staff
which provides not only education but also nutritive
food and regular health check-ups, along with sports
and cultural activities.
 Community Development Service:

Being a conscientious contributor to the well
being of the communities around us, we
contribute through variety of programs that
positively impact the lives of the communities we
serve.
Apart from these initiatives, we also hold sports meets, yoga shivirs, sarvashikshanabhiyan
programs, van mahotsavs and street dramas.

BUSINESS

INDIAN BUSINESS:
 Integrated Sugar Mills:
The Company operates seven sugar mills in India located in the states of Karnataka and
Maharashtra. The mills are integrated to the fullest to process sugarcane, produce sugar and
its by-products ethanol, power and bio fertilizers.
1. Units in Karnataka: Munoli, Athani, Havalga, Gokak, Raibag
2. Units in Maharashtra: Ratnaprabha, Panchaganga
Sugar mills at Raibag and Panchganga are operated on lease by SRSL.
SRSL also operates cogeneration plants of Panchaganga, Ajinkyatara&Arag on BOOT basis.

The mills have a total crushing capacity of 7.1 MTPA or 35,000 TCD and produces high
quality sugar which is mostly sold to food and beverage industry. Indian distillery capacity
stands at 930 KLPD and it manufactures fuel grade ethanol which is sold to Oil
Manufacturing Companies along with Chemical industry. Power plants in India generate 242
MW of power of which 135 MW is exportable and mainly sold to open access grids.

In India,ethanolis consumed primarily by portable alcohol industry, Oil marketing companies

(for blending with petrol) and chemical industries.
 Sugar Refineries:
The Company operates two port based sugar refineries with total refining capacity of 1.7
MTPA. The rated capacity of the Kandla sugar refinery is 3,000 tons per day and that of the
Haldia refinery 2,000 tons per day.
Operating Models:
 India Importing: Import raw sugar, sell refined sugar locally (When India is sugar
deficient).
 India Exporting: Refine local raw sugar, sell internationally (When India produces
surplus sugar).
 Tolling Operation: Import & re-export to capture global refining margin.

Advantages:
 Port-based location minimizes freight costs and enables cost efficient imports and
exports of sugar.
 Flexibility to shift focus from domestic market to export.
 Gujarat refinery location enables competitive exports to the highly sugar deficit
Middle East region.
 Haldia refinery strategically located close to sugar deficit regions in East India and
South-East Asia.
 Madhur:
Madhur Sugar was launched in 2007 by Shree Renuka Sugars Limited and is the leading
sugar brand in India today. From the beginning it has focussed on providing pure and
hygienic sugar to its customers.
Advantages:
 Natural Sweetness - Sugar made from superior quality sugarcane.
 Sulphur Free Processing - Stringent quality control & sulphur-free refiningprocess
ensure 'consumption-healthy' sugar.
 Consistent Quality - Refined, sparkling white, moisture free and easy to dissolve
crystals.
 Advanced Production Technology - Manufactured, packed, stored & shipped in a
state-of-the-art refinery that complies with International standards to ensure that every
crystal is untouched by hand.

Supported by these inherent advantages and backed by strong Marketing & Sales support, it
is not surprising that Madhur is the leader in most of the markets it is present in, from the
local kirana stores to the leading modern retail chains across the country.
Madhur Sugar ensures that our every sugar crystal contributes to the moments of delight and
celebration into one's life.
Currently, Madhur Sugar has strong presence in areas like Gujarat, Maharashtra, Delhi,
Rajasthan& Karnataka.
Madhur Sugar is also increasingly making its presence felt in many other parts of India
including Haryana, Madhya Pradesh, Andhra Pradesh, Kerala, Punjab and Jammu &
Kashmir.
 KBK Chem-Engineering Pvt Ltd:

KBK Chem-Engineering Private Ltd is a 100% subsidiary company of Shree Renuka Sugars
Ltd based in Pune. It has acquired a well-deserved reputation for providing optimal solutions
for Fermentation & Distillation industries, having its presence in countries of Asia, South-
East Asia & Africa. Well engineered, innovative and effective EPC plant solutions are our
hallmark.
 KBK is an Indian Company providing its one of kind services across the Globe.
KBK’s has installed plants in last five years in record time & 7 projects under
execution.
 KBK’s success in building EPC Plants in three continents has led KBK to undertake
mega-projects that contribute handsomely to the world's Ethanol and Distillery
Industry. Discerning clients have chosen KBK products after thorough global market-
searches and the "K-SUPER" & “K-M@S” technology advantage has won KBK
accolades from time to time.

BRAZILIAN BUSINESS:
 Renuka do Brazil S/A:
SRSL acquired RdB from GrupoEquipav on July 7, 2010 and holds currently 59.4% equity
stake.
RdB is one of the largest sugar/ethanol companies in Sao Paulo state in Southeast Brazil.
Facilities include two modern mills and integrated co-generation capacity- Madhu (Equipav,
erstwhile) and Revati (Biopav, erstwhile).
RdB has a crushing capacity of 44,400 TCD or 10.5 million tons/yr to produce sugar which is
sold in domestic as well as export markets. Distillery has a capacity of 4,000 klpd to produce
both hydrous and anhydrous ethanol for Flex-fuel cars as well as industrial needs. RdB
generates 221 MW of exportable power. Owned cane plantations at RdB cover 78,000
hectares of land.

Renuka Vale doIvai S/A:
SRSL acquired 100% of Renuka Vale do Ivai on 19th March, 2010.

RVdI has two mills – São Pedro doIvaí (PR) and Cambuí (PR) – in the state of Parana with
surrounding own cane plantations on 28,000 hectares of land.
Proximity to ethanol distributors and the port of Paranagua (551 km) along with the stake in
logistics companies and a port terminal ensures lower logistics and export costs.
RVdI has a crushing capacity of 15,120 TCD or 3.1 million tons/yr to produce sugar for
domestic as well as export markets. Distillery has a capacity of 1,310 klpd to produce both
hydrous and anhydrous ethanol.
PRODUCTS:
 Sugar:
White/Refined Sugar:-
White sugar is sugar which has been refined and

washed so that it has a white appearance and no
molasses flavour. It contains 99.9% sucrose.
It is normally consumed in households and being

relatively neutral in flavour, it is used as an ingredient
in various edible processed foods and beverages.

VHP (Very High Polarized)Sugar:-

It is a type of raw sugar, manufactured mainly in Brazil, which is classified as a chemical
product which is easy to transport and need further refining before it can be used for
consumption. In recent years, VHP sugar (raw sugar) has been a standard sugar category
traded on the international market.
Sugar Refining Process :-

Sugar Manufacturing Process :
 Ethanol:
Ethyl alcohol or ethanol can either be produced

by direct fermentation of cane juice or from
molasses, which is a by-product of the sugar
manufacturing process. In India, ethanol can be
produced only from molasses whereas, mills in
Brazil produce ethanol directly from sugarcane
juice. Ethanol can be used for potable alcohol
industry, chemical industry and as a bio-fuel in
vehicles (direct/blended with gasoline).
In India, ethanol is consumed primarily by portable alcohol industry, Oil marketing

companies (for blending with petrol) and chemical industries.
In Brazil, ethanol is primarily utilized as fuel in flex-fuel cars either directly as hydrous
ethanol or anhydrous ethanol blended with gasoline.

Ethanol Manufacturing Process :
 Power:
Shree Renuka Sugars produces power from
bagasse (sugarcane by product) for captive
consumption and sale to the state grids in India
and Brazil. The Bio energy produced from
burning bagasse is a renewable energy that
provides a significant reduction to greenhouse
gas emissions.

Power Generation Process:
 Bio-Fertilizers:
Sugar industry is a unique industry which
follows the principle of soil-to-soil. Press-
mud/filter cake obtained as waste during sugar
manufacturing process is mixed with the effluent
from distillery operations to give bio fertilizer.
This bio fertilizer is organic, eco-friendly and
cost-effective compared to chemical fertilizers.

Bio-Fertilizer Production Process:

INTRODUCTION OF
RATIO ANALYSIS

INTRODUCTION OF RATIOS:
When we observed the financial statement comprising the balance sheet & profit or loss
account is that they do not give all the information related to financial operations of the firm,
they can provide some extremely useful information to the extent that the balance sheet
shows the financial position on a particular date in terms of structure of assets, liabilities and
owners equity and profit or loss account shows the result of operation during the year. Thus
the financial statements will provide a summarized view of the firm. Therefore in order to
learn about the firm the careful examination of in valuable reports and statements through
financial analysis or ratios are required.
Meaning &Definition:
Ratio analysis is one of the powerful techniques which is widely used for interpreting
financial statement. This technique serves as a tool for assessing the financial soundness of
the business.The idea of ratio analysis was introduced by Alexander wall for the first time in
1919. Ratios are quantitative relationship between two or more variables taken from financial
statements.
Ratio analysis is defined as, the systematic use of ratio to interpret the financial statement so
that the strength and weakness of the firms well as its historical performance and current
financial condition can be determined in the financial statements we can find many items are
co-related with each other for e. g. current assets and current liabilities, capital and long term
debt, gross profit And net profit, purchase and sales etc.
To take managerial decision the ratio of such items reveals the soundness of financial
position. Such information will be useful for creditors, shareholders, management.

IMPORTANCE OF RATIO ANALYSIS
Ratio analysis serves for many purpose and is helpful not only for internal management and
but also for prospective investors, creditor and other outsiders.
The following are the importance of the ratio;
 It helps in making financial estimates for the future.

 It is an important tool to check upon the working capital in being used in business
enterprises.
 It helps the management of business of concern in evaluating its financial position and
efficiency of performance.
 It helps the task of manager control to a great extent.
 It helps the credit supplier and investors in evaluating the business for potential
investment outlet.
 It serves as an instrument for testing managing efficiency.
 It servers as a sort of health test of a business firms because with help of this analysis
financial manager can determine whether the firm is financially healthy or not.
 It helps the management of a business concern to discharge there basic function of
planning, co-ordinating, controlling etc.
 With help of this analysis ideal ratio cn be established and this can be used for the
purpose of comparison of the firm progress and performance.
 It sometimes provide a useful tool for decision for on certain policy matter.
DISADVANTAGES OF RATIO ANALYSIS
 It is essential to understand the formula and assumptions used in computation of a

ratio by another person before attempting to interpret or compare the same.
 Comparison of ratio between two firms may not be valid in view of differing
management and accounting policy followed in presenting the financial data.
 The ratio re based on historical values and non-consideration of changes in price
levels renders comparison between old and new firm is less meaningful.
 The validity of the analysis depends on the knowledge, competence and integrity of
the analyst.

 The ratio analysis does not consider the non-financial data.

 The terminology used in the analysis is not standardized.
USES OF RATIO ANALYSIS
The uses of ratio analysis are classified into four ways. They are as follows;
1. Uses of ratio analysis to management.

2. Uses of ratio analysis to investors.
3. Uses of ratio analysis to creditor.
4. Others uses
Limitations of Ratios:
Ratios should be used with extreme care & consideration judgment because they suffer from
certain serious drawbacks; some of them are listed below:
 Ratio can sometimes be misleading if an analyst does not know the reliability &
soundness of the figures from which they are computed & the financial position of the
Business at other times of the year.
 The mechanics of ratio construction are not as important as the proper interpretation
of the ratios. As a matter of the fact, ratios are only the primary step in interpretation.
They call attention to certain aspects of a business which need detailed investigation
before arriving at any final conclusion.
 Ratio can never be substituted of raw figures. At the time of interpretation, therefore
raw figures should also be referred too.
 Price level changes makes ratios analysis difficult.
Types of Ratios:-
Ratio as tool of financial management is of crucial significance. Ratios are tool of measuring
liquidity, profitability, efficiency & financial position of the firm.

Ratio can be classified into 4 basic types:
1) Liquidity Ratio:
Liquidity Ratio provides test to measure the ability of the firm to cover its short-term
obligations out of its short-term resources. Interpretation of liquidity ratios provides
considerable insight into the present cash solvency of the firm& its ability to remain solvent
in times of adversity. It is mainly classified into 2 types, viz.,
a) Current Ratio
b) Quick Ratio
A. Current ratio:The current ratio of a unit measures firms short-term solvency that is
its ability to meet short-term obligation. It is the ratio of total current to the current
liabilities.
The current ratio measures that ability of the firm to meet its current
liabilities current assets get converted into cash in the operating cycle of the firm
and provides the funds needed to pay current liabilities.
Current Ratio = Current Assets/Current Liabilities
B. Quick Ratio: This ratio is also termed as acid ratio. A Quick ratio is concerned with,
the relationship between quick assets and current liabilities. It is a measure of liquidity
calculated current assets minus inventory and prepaid expenses by current liabilities.
The quick ratio between quick current assets and current liabilities.
Quick ratio = Quick Current Assets / Current Liabilities
2) Leverage Ratio:
Leverage ratios generally designed to measure the contributions of the firm's owners funds
provided by its creditors. These ratios are computed to solicit information along the following
lines-
l) The firm's ability to weather times of stress & to cover all its obligations including Short-
term & Long-term obligations.
2) The margin of safety afforded to the creditors

3) The extent of control of stock holders over the firm.
4) The potential earnings from the use of loan funds.
It is mainly classified into 3 types, viz.,
a) Total debt ratio

b) Debt equity Ratio
c) Interest coverage Ratio
A. Total Debt Ratio: Total debt is a ratio that indicates the proportion of a company
debt to its total assets. It shows how much the company relies on debt to finance
assets. The debt ratio gives users a quick measures of the amount of debt that the
company has on its balance sheets compared to its assets. The higher the ratio, the
greater the risk associated with the firms operation. A low debt ratio indicates
conservative financing with an opportunity to borrow in the future at no
significant risk.
Debtors Turnover Ratio = Total Sales /Debtors
B. Debt equity ratio:Debt equity ratio, also known as external, internal equity ratio
is calculated to measure the relative claims of outsides &owner against the firm
assets. The debt equity ratio can be calculated by dividing total debt by equity.
Debt equity ratio=short term loan+long term loan/ shareholders funds
3) Activity Ratio:
Activity ratios reflect how efficiently the firm is managing its resources. This ratio expresses
relation between the level of sales &the investment in various assets: inventories, receivables,
fixed assets, etc

It is mainly classified into 10 types, viz.,
a) Inventory turnover Ratio
b) Inventory conversion period
c) Debtors turnover Ratio
d) Debtors collection period
e) Gross operating Ratio
i) Creditors turnover Ratio
g) Creditors collection period
h) Net asset turnover Ratio
i) Current asset turnover Ratio
j) Working Capital turnover Ratio
4) Profitability Ratio:
Profitability Ratios are the best indicators of overall efficiency of a business concern because
they return of value put into business with sale or service carried on by the firm with the help
of assets employed.
It is mainly classified into 6 types:
a) Gross profit Margin Ratio
b) Net profit Margin Ratio
c) Operating expense Ratio
d) Proprietary Ratio
e) Return on investment Ratio (ROI)
f) Return on equity Ratio (ROE)

1. DEBTOR TURNOVER RATIO:
Debtor turnover ratio is the relationship between net sales and average debtors. It is also
called account receivable turnover ratio because we debtor and bill receivables total is used
for following formula.
=Net credit sales/Average Debtor(sundry debtors+ bill receivable)
Average Debtor=opening balance of debtor+closing balance of debtor/2
2. STOCK TURNOVER RATIO:
Stock turnover ratio indicates the velocity with which stock of finished goods is
sold. Generally it is expressed as number of times the average stock has been “turned over”
or rotate of during the year
Stock turnover ratio=net sales/average inventory at cost
Average inventory=(opening stock+ closing stock)/2
3. TOTAL ASSETS TURNOVER RATIO:
Assets turnover ratio is the ratio of a company sales to its aseets. It is an efficiency
ratio which tell how successfully the company is using its assets to generate revenue.
Total assets turnover ratio=net sales/Average total assets
4. WORKING CAPITAL TURNOVER RATIO:
Working capital turnover ratio is an activity ratio that measures dollors of revenue
generated per dollor of investment in working capital. Working capital is defined as
the amount by which current assets exceed current liabilities.

Working capital turnover ratio=net sales/net working capital
5. GROSS PROFIT:
Gross profit ratio is a profitable ratio that shows the relationship between gross profit
and total net sales revenue. It is a popular tool to evaluate the operational performance
of the business. The ratio is computed by dividing the gross profits figure by net sales.
Gross profit ratio=gross profit/net sales
6. NET PROFIT RATIO:
Net profit ratio is a popular profitability ratio that shows relationship between net profit
after tax and net sales. It is computed by dividing the net profit after tax.
Net profit ratio=net profit after tax/net sales
7. FIXED ASSETS TURNOVER RATIO:
The fixed assets turnover ratio is an efficiency ratio that measures a companies return
on their investment in property, plant, and equipment by comparing net sales with
fixed assets.
Fixed assets turnover ratio=net sales/fixed assets-accumulated depreciation
8. RETURN ON SHARE HOLDERS INVESTMENT:
Is a measures of overall profitability of the business and is computed by dividing

the net income after interest and tax by average stockholders equity. It is also known

as return on equity ratio and return on net worth ratio. The ratio is usually expressed
in percentage.
Return on shareholders investment=net income after interest and tax/average

shareholders equity*100.
OPERATING RATIO:
The operating ratio shows the efficiency of a company's management by comparing
operating expense to net sales. The smaller the ratio, the greater the organization's
ability to generate profit if revenues decrease.
Operating Ratio=Operating expenses/Net sales.
AVERAGE COLLECTION PERIOD:

The average collection period is the approximate amount of time that it
takes for a business to receive payments owed in terms of accounts receivable.
Average collection period=average debtor/credit sales*360

DATA ANALYSIS
& INTERPRETATION

1. Debtor turnover ratio:

Formula : Net Credit sales / Average debtor
Years Net credit sales Average debtor Ratio in times
2014-15 5744.20 283.22 20.28
2015-16 5862.05 384.44 15.24
2016-17 7771.53 589.03 13.19
RATIO
25
20
15
10 RATIO
5
0
2014-15 2015-16 2016-17
Interpretation:
The debtor turnover ratio is an activity ratio measuring how efficiently a firm uses its assets
Ratio in 2015 is 20.28,
2016 it decreased to 15.24,
2017 it decreased to 13.19.
In 2017 debtors is increased so the debtors turnover ratio is decreased.
It calculates the efficiency of the firm and if debtors increases that seems company is in loss.

2.Stock turnover ratio:
Formula :Net sales/ Average inventory cost
Years Net sales Average Ratio in times

inventory
2014-15 5744.20 1452.29 3.95
2015-16 5862.05 1935.24 3.02
2016-17 7771.53 1342.97 5.78
RATIO
8
4
RATIO
2
0
2014-15 2015-16 2016-17
Interpretation:
If the actual ratio is more than 8 times it indicates that more sales are effected and effective
inventory management and goods sold many times in a year.
Ratio in 2015 is 3.95,
2016 is decreased to 3.02,
2017 it is increased to 5.78
After 2015 there are immense upgrade in stock turnover ratio is shows management
inefficiency in using its resource.
Higher the ratio indicates that finished stock is rapidly turnover.
Lower ratio indicates that accumulated of absolute or carrying of excess stocks.
Higher the no of time is better.

3.Total assets turnover ratio:
Formula: Sales/ Total Assets
Years Sales Total assets Ratio in times
2014-15 5744.20 7119.43 0.806

2015-16 5862.05 9564.77 0.61
2016-17 7771.53 9061.51 0.85
RATIO
1
0.8
0.6
0.4 RATIO
0.2
0
2014-15 2015-16 2016-17
Interpretation:
Total turnover ratio shows how efficiently a company can use its assets to generate sales.
Ratio in 2015 is 0.806,
2016 it decreased to 0.61,
2017 it increased to 0.85,
It indicates the number of times assets are been turned over during the period and it evaluates
the efficieny which the company has not managed its assets.
It means every assets invested generates 0.86 for 1 of sales efficiency of investment in assets
shown by the ratio.
Higher the ratio is better.

4.Working capital turnover ratio:
Formula: Net sales/ Net working capital
Years Net sales Net working Ratio in

capital times
2014-15 5744.20 -2510.08 -2.28
2015-16 5862.05 -1746.57 -3.35
2016-17 7771.53 -818.47 -9.49
RATIO
0
2014-15 2015-16 2016-17
-2
-4
RATIO
-6
-8
-10
Interpretation:
The working capital turnover ratio measures how well a company is
utilizing its working capital to support a given level of sales
Ratio in 2015 is 215.15,

2016 is decreased to 199.06,
2017 increased to 237.5,
The working capital turnover ratio has shown one year decreasing trend and one
year on increasing trend.
Higher working capital turnover indicates the efficiency of management.
Lower working capital indicates inefficiency of the management

5. Gross profit ratio:
Formula :Gross profit/ net sales*100
Years Gross profit Net sales Ratio in

times
2014-15 5824.11 5744.20 1.01
2015-16 5965.00 5862.05 2
2016-17 7864.46 7771.53 1.01
RATIO
2.5
2
1.5
1 RATIO
0.5
0
2014-15 2015-16 2016-17
Interpretation :
Compare the gross profit of current year with the last year. If actual gross
profit is high, it is an indication to good health. If its actual gross profit is low, it is
a indication of poor health.
Ratio in 2015 is 1.013,
2016 it increased to 2,
2017 it decreased to 1.01.
The company ratio is very low which indicates that the company has more direct
expenditure which reducing the gross profit of the company higher the ratio is
considered as better company.
Higher ratio in gross profit is better.

6. Net profit turnover ratio:

Formula: Net profit after tax/ net sales *100
Years Reported net Net sales Ratio in

profit times
2014-15 -295.09 5744.20 -5.13
2015-16 -285.28 5862.05 -4.8
2016-17 -123.89 7771.89 -1.59
RATIO
0
2014-15 2015-16 2016-17
-1
-2
-3 RATIO
-4
-5
-6
Interpretation:
A company's after-tax profit margin is important because it tells investors the
percentage of money a company actually earns per dollar of revenue.
Ratio in 2015 is 5,
2016 is decreased to 4,
2017 it is decreased to 1.
Years after years their ratio is going down wards which will harm the Company.
Higher the ratio indicates efficient management.

7. Fixed assets turnover ratio:

Formula: Net sales / Fixed assets
Years Net sales Fixed sales Ratio in

times
2014-15 5744.2 2581.53 2.22
2015-16 5862.05 4420.35 1.32
2016-17 7771.53 4192.38 1.85
RATIO
2.5
2
1.5
1 RATIO
0.5
0
2014-15 2015-16 2016-17
Interpretation:
Fixed assets turnover ratio (also known as sales to fixed assets ratio) is a
commonly used activity ratio that measures the efficiency with which a company
uses its fixed assets to generate its sales revenue
Ratio in 2015 is 2.22,
2016 it is decreased to 1.32
2017 it is increase to 1.85
Fixed assets turnover ratio measures the efficiency of how well assets are utilized
from the above calculation.
Increase ratio will show on improvement in utilisation of fixed assets.
Decrease ratio will indicate that fixed assets are not properly utilised.

8. Return on share holders investment:
Formula: net profit after tax/ shareholders fund
(in Cr)
Years Reported net Shareholders Ratio in
profit funds times
2014-15 -295.09 1537.78 -19
2015-16 -285.28 3226.04 -8
2016-17 -123.89 3026.14 -4
RATIO
0
2014-15 2015-16 2016-17
-5
-10 RATIO
-15
-20
Interpretation:
Return on shareholders' investment ratio is a measure of overall profitability of the

business and is computed by dividing the net income after interest and tax by
average stockholders' equity. ... The ratio is usually expressed in percentage
Ratio in 2015 is 19,
2016 it is decreased to 8
2017 it is decreased to 4.
This ratio measures the overall efficiency of the management.
Higher ratio is better for the company.

9. Operating ratio:
Formula: operating expenses/ net sales *100
Years Operating Net sales Ratio in times

expenses
2014-15 6059.66 5744.20 1.05
2015-16 6197.70 5862.05 1.05
2016-17 7999.03 7771.53 1.02
RATIO
1.06
1.05
1.04
1.03
RATIO
1.02
1.01
1
2014-15 2015-16 2016-17
Interpretation :
The operating ratio can be used to determine the efficiency of a company's
management by comparing operating expenses to net sales
Ratio in 2015 is 105.49
2016 it is increased to 105.72
2017 the ratio is 102.92
If operating profit is more than it indicates efficiency of the business.
If operating profit is less than it indicates inefficiency of the business.

10.Average collection period:

Formula: Average debtor/credit sales*360
Years Average Credit sales Ratio in

debtors times
2014-15 283.22 5744.20 17.74
2015-16 384.44 5862.05 23.60
2016-17 589.03 7771.53 27.28
RATIO
30
25
20
15
RATIO
10
5
0
2014-15 2015-16 2016-17
Interpretation:
The average collection period is the approximate amount of time that it takes for a business to
receive payments owed in terms of accounts receivable
Ratio in 2015 is 17.74
2016 it increased to 23.60
2017 it increased to 27.28
A lower average collection period is more favorable than a higher average collection period.

FINDINGS

1. The debtor turnover ratio is fluctuating. The turnover ratio decreased from
20.28 in 2015 to 15.24 in 2016 which indicates the efficiency of the company
in collecting the debt amount. But the decrease debtor turnover ratio from the
year 2015 to 2017 that is from 20.28 to 13.19 indicates that the company has
to raise its credit policies collection procedure.
2. Stock turnover ratio is decreased from 3.95 in 2015 to 3.02 in 2016 and in
2017 it is increased to 5.78 so increase in the ratio indicates that efficiency and
high liquidity
3. Total cost low turnover ratio indicates poor sales or excess inventory. A low
turnover indicates poor liquidity. High turnover ratio strong sales or inefficient
buying high ratio can indicates better liquidity.
4. The working capital turnover ratio has drastically been decreased from 215.12
in 2015 to 199.25 in 2016 and return in 2017 it has increased to 237.8 which
indicates that the company cab pay all of its current liabilities and still have
current assets left over or positive working capital.
5. Gross profit turnover ratio can be used to test the business condition by
comparing it with past years generally higher ratio is consider better.
6. Net profit turnover ratio is a useful tool to measure to overall profitability of
the business. A high ratio indicates the efficient management of the affair of
the business.
7. Fixed assets turnover ratio generally a high fixed assets turnover ratio
moderates better utilization of fixed assets and a low ratio. Means inefficient
or under utilization of fixed assets.
8. Return on share holder’s investment higher ratio means high rate of return on
share holder’s investment the ratio also indicates the efficiency of the
management in using the resources of the business.
9. Operating ratio is more than it is an indication of the operating efficiency of
the business and if the ratio is less it is an indication of inefficiency of the
business.
10. The average collection period is the approximate amount of time that it takes
for a business to receive payments owed in terms of accounts receivable. A
lower average collection period is more favourable than a higher average
collection period.

CONCLUSION

Conclusion
Ratio analysis is one of the key finance functions, which is integral for a dynamic and vibrant
business. Ratio analysis plays very vital role in the financial health of a company. This
efficiency is measured by employing different ratios and the improvement made, based on its
results. If the company has to grow, it has to bear the risk.
The project of ratio analysis in the production concern is not merely a work of the project.
But a brief knowledge and experience of that how to analysis the financial performance of the
firm.
From the above analysis it can be concluded that the ratio analysis of shree renuka sugars
limited,is not so efficient and most of the ratio are less than the standard ratio so it indicates
that the company financial position is slightly liquidity for the past one year. This study made
me to understand the applicability of theoretical concept in practical world.

BIBLOGRAPHY

Websites:
 www.renukasugars.com/
 www.google.com
 www.moneycontrol.com/india/stockpricequote/sugar/shreerenukasugars/SRS03
 https://economictimes.indiatimes.com › Markets › Stocks › Stock Price Quotes
 https://money.rediff.com/companies/Shree-Renuka-Sugars-Ltd/11320019
 https://www.investopedia.com/terms/r/ratioanalysis.asp
 https://www.edupristine.com › Blog
 www.zenwealth.com/BusinessFinanceOnline/RA/RatioAnalysis.html
 https://accountingexplained.com/financial/ratios/
 profit.ndtv.com › Markets › Market Dashboard
Reference books
Management accounting
Author: G.B.Baligar

ANNEXURE

Balance sheet of 2015
Standalone Consolidated
Sr. Particulars As at As at As at As at
No. 31.03.2015 31.03.2014 31.03.2015 31.03.2014
(Audited) (Audited) (Audited) (Audited)
A EQUITY AND LIABILITIES
1 Shareholders’ Funds
(a) Share capital 929 671 929 671
(b) Reserves and Surplus 14,449 12,686 (24,354) (5,636)
Sub-total- Shareholders’ funds 15,378 13,357 (23,425) (4,965)
2 Minority Interest 16 23
Non- current liabilities
(a) Long-term borrowings 9,734 11,867 39,252 50,197
(b) Deferred tax liabilities (net) - 710 -
(c) Other long-term liabilities - - 1,849 3,357
(d) Long-term provision 51 33 773 812
Sub-total- Non-current liabilities 9,785 12,610 41,874 54,366
3 Current liabilities
(a) Short-term borrowings 21,773 21,889 26,266 28,695
(b) Trade Payables 18,219 10,864 32,955 26,200
(c) Other Current Liabilities 6,036 7,848 31,976 25,180
(d) Short-term provision 3 3 5 7
Sub-total- Current liabilities 46,031 40,604 91,202 80,082
TOTAL-EQUITY AND LIABILITIES 71,194 66,571 109,667 129,506
B Assets
1 Non-current assets
(a) Fixed assets 25,815 27,202 60,409 80,020
(b) Non-current investments 19,475 20,140 824 1,642
(c) Deferred Tax Assets (net) 835 - 3,551 1,862
(d) Long-term loans and advances 4,136 3,873 6,021 6,957
(e) Other non-current assets 2 3 833 1,095
Sub-total- Non-current assets 50,263 51,218 71,638 91,576
2 Current Assets
(a) Current Investments - - 23 28
(b) Inventories 14,523 10,034 22,326 22,775
(c) Trade receivables 2,832 2,481 6,169 6,443
(d) Cash and cash equivalents 914 710 1,302 1,615
(e) Short-term loans and advances 2,661 2,115 8,153 6,995
(f) Other current assets 1 13 56 74
Sub-total- Current assets 20,931 15,353 38,029 37,930
TOTAL-ASSETS 71,194 66,571 109,667 129,506

Balance sheet of 2016

Balance sheet of 2017:





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SHREE RENUKA SUGARS, MUNOLI

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 1

Title of the project:

“A study on financial performance using Ratio’s”

Objevtives of the study:

 To study the financial performance of the firm using ratio’s.

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 2

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It was the major expansion of the Arab peoples

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Production and consumption:

According to USDA, global sugar production is estimated at 170.9 MMT in

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KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 7

Type Public Company

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 8

In Oct 2004, SRSL took on lease the sugar mill of AjaraShetkariSahakariSakharKarkhana

SRSL also acquired another sugar factory of MohanraoShindeSahakariSakharKarkhana Ltd

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 9

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 10

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The Company Operates in the following Segments :

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 12

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 13

NSE Symbol – Renuka

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 14

ACHIEVEMENTS AND AWARDS:

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 15

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 16

PLANT LOCATIONS (INDIA) :

PLANT LOCATION (BRAZIL) :

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Considerable point while purchasing capital assets are,

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 20

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 To produce the cane at proper time and proper condition

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 22

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 23

Human Resource Department:

 We are established since long time.

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 24

 Scope to implement ERO system like SAP etc.

PRODUCT LIFE CYCLE:

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 25

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 26

such as integrity, honesty, humility, courage, commitment, sincerity, passion, confidence,

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KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 28

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 Community Development Service:

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 30

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 31

 Integrated Sugar Mills:

SRSL also operates cogeneration plants of Panchaganga, Ajinkyatara&Arag on BOOT basis.

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 32

In India,ethanolis consumed primarily by portable alcohol industry, Oil marketing companies

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 33

KLE SOCIETY’S COLLEGE OF BUSINESS ADMINISTRATION, HUBBALLI Page 34

 KBK Chem-Engineering Pvt Ltd: