1.

INDUSTRY PROFILE
1.1 Indian sugar Industry:

India is the second largest producer of sugar in the world. The Indian sugar
industry is the second largest agro industry located in the rural India. The Indian
sugar industry has a turnover of Rs.500 billion per annum and it contributes almost
Rs.22.5 billion to the central and state as tax, and excise duty every year. It is the
second largest agro processing industry in the country offers cotton textiles.

About 50 million sugar cane farmers and a large number of agricultural

laborers are involved in sugar cane cultivation and ancillary activities, constituting
7.5% of the rural population. The industry provides employment to about 2 million
skilled/semiskilled workers and others mostly from the rural areas.

The industry not only generates power for its own requirement but surplus
power for export to the grid based on by - product- bagasse. It also produces ethyl
alcohol, which is used for industrial and potable uses, and can also be used to
manufacture Ethanol, an ecology friendly and renewable fuel for blending with petrol.

The sugar industry in the country uses only sugar cane as input; hence sugar
companies have been established in large sugar cane growing states like Uttar
Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu and Andhra Pradesh. In the
year 2003-04 these six states contribute more than 85% of total sugar production in
the country. Exhibit 1 shows the state-wise sugar production in India for 2004-2005
and 2005-06.

The government de-licensed the sugar sector in the August 1998, there by
removing the restriction on the expansion of existing as well as on the establishment
of new units , with the only stipulation that a minimum distance of 15 km’s would
continue to be observed between an existing sugar mill and a new mill.

EXHIBIT 1: Sugar production by state in India (in Metric Million Ton):

There are 566 installed sugar mills in the country with a production capacity
of 180 lakh Million ton’s of sugar, of which only 453 are working. These mills are
located in 18 states of the country. Around 315 of the total installed mills are in the
co-operative sector, 189 in the private sector and 62 in the public sector.
 The number of operating sugar mills in the country has increased from 29 in
sugar year (SY) 1930-31 to 412 by (S) Y1996-97 (sugar year = October 1 st to
September 30th). The addition in number of mills was at its peak during seventies
that when nearly 100 mills were added between 1970 and 1980 to increase the
number of operating units to 300. The development of industry in the past is as
given in table below.

The average capacity of the sugar mills in the industry has considerably
moved up from just 644 ton per day in SY 1930-31 to 2656 ton per day. But still the
production of sugar in India is inching. Industry was driven by horizontal growth
(increase in number of units) compared to the vertical growth witnessed in other
countries (increase in average capacity) Refer Exhibit (3)

1.2 Sugar Availability:

Sugarcane occupies about 2.7% of the total cultivated land and it is one of
the most important cash crops in the country. The area under sugar cane has
gradually increased from 2.7 million hectares in 1980-81 to 4.3 million hectares in
2002-03, mainly because of much larger diversions of land from other crops to
sugarcane by the farmers for economic reasons. The sugarcane area, however,
declined in the year 2003-04 to 3.9 million hectares and to 3.7 million hectares in
2004-05, mainly due to drought and pest attack.

From a level of 154 MMT in 1980-81, the sugarcane production increased to

241 MMT in 1990-91 and further to 296 MMT in 2000-2001. Since then it has been
hovering around 300 MMT until last year. In the season 2003-2004, however,
sugarcane production declined to drought and pest attack. Not only sugarcane
acreage and sugarcane production has bas been increasing, even drawl of sugarcane
by sugar industry has also been increasing over the years. In India, sugarcane is
utilized by sugar mills as well as by traditional sweeteners like Gur and Khandsari
producers. However, the diversions of sugarcane to Gur and Khandsari are lower in
states of Maharashtra and Karnataka, as compared to Northern states like Uttar
Pradesh. Exhibit 2 gives data on sugarcane utilization for different purposes.

EXHIBIT 2: Sugar Utilization:

The three largest sugarcane growers in terms of production are Brazil, India and
China, yielding between them more than half of total sugar production. Exhibit 3
compares production and yield figures for the top 11 sugar growing countries as
shown below.
EXHIBIT 3: Sugarcane production and consumption by country.

Most of the mills in India are not equipped to make refined sugar. Mills which
are designed to produce refined sugar can manufacture sugar not only from
sugarcane but also from raw sugar which can be imported. Therefore, such mills can
run their production all the year round, as opposed to single stage mills which are
dependent upon the seasonal supply of sugarcane.

1.3 Industry Outlook:

Facts:
1.4 Budgetary Measures For The Sugar Industry For The Year 2006-
07:
 2. COMPANY PROFILE
2.1 INTRODUCTION:

The factory is situated in Munoli Village. It is an integrated manufacturing

company with strategic focus on sugar and its allied products in power and ethanol.
The company’s registered office is in Belgaum, Karnataka and corporate office is at
Mumbai. The factory is 70 Kilo Meter from Belgaum and operates a leased facility at
Ajara, Maharashtra.

Shree Renuka Sugars was incorporated in 1995. Initially it acquired a 1250

TCP (Ton Crushing Perday) sick unit from the Andhra Pradesh Government in 1998.
This unit asset base was moved to its own location in Munoli and expanded its
capacity to 2500 TCP with 11.2 Mega Watt co-generation plant. The production took
place in November 1999.

German technology machines and equipment are installed. Power plant

machines and turbines are of BHEL and Triveni made.

A distillery and ethanol plant of 60 kiloliter per day capacity was added in
2002. The sugar refinery was set up to progress raw sugar to produce refined sugar
meeting European specification.

The current capacity of the sugar plant in Munoli is 8000 TCD and 100 MT
(Million Ton) of raw sugar per day. The co-generation power plant is 35 MW plant. It
is growing very fast in industry. It is dynamic achievement of lady entrepreneur
Mrs.Vidya.M. Murukumbi.

The company manufactured and traded over 2,50,000 MT (Million Ton) of

sugar in 2002-03 and 3,50,000 MT in 2004-05. Total trade flow puts the Company in
the top 10 of sugar producers/marketers in India. This is the only listed sugar
company in India.

The company's merchant export division is the second largest sugar exporter
in India (about 45% of India’s sugar export). In the previous year (2005-2006) the
company was largest raw-sugar importer into India. This plant is so designed that
M.S.RAMAIAH INSTITUTE OF TECHNOLOGY, -6- BANGALORE.
sugar can be produced not only from sugarcane but also from raw sugar. This unit
manufactures EC-II grade sugar conforming to European standards, with negligible
sulphur content.

Its distillery is among the few, to manufacture fuel ethanol from ethanol.
Government of India is encouraging the use of fuel ethanol as mortar fuel since it is
considered to be less polluting and also a renewable source.

Shree Renuka Sugars Ltd Initial Public Offering opened on October 7, 2005
and closed on October 14, 2005.

Issue Price is Rs.285 per Equity Share of Face Value of Rs.10 each. The Issue
price is 28.5 times the face value. Issue is over subscribed by 15 times.
2.2 NATURE OF BUSINESS CARRIED:

Shree Renuka sugar is integrated manufacturing company with Strategic

focus on sugar and its allied products in Power and Ethanol

The Group's principal activity is to manufacture and market sugar. It also

provides power generation and ethanol production. The Group operates through four
segments. They are Trading, Sugar, Cogeneration, Distillery and Other. It carries
business of wholesale trading of sugar in the international market through its
subsidiary Renuka Commodities DMCC.

Exhibit 4: Manufacturing Division:

2.3 OBJECTIVES, VISION, MISSION AND ENVIRONMENT POLICY

Objectives:

1. Shree Renuka Sugars Ltd, aims to become the most efficient and market driven
integrated processor of sugarcane in the world.
2. To enable the team to grow in a learning and motivating atmosphere.
3. To participate in the all round development of the community delivering
consistently on returns to all its shareholders
4. Commitment to keep process environment friendly.

Vision:

The company’s vision is to become the most efficient processor of sugar and
the largest marketer of sugar and ethanol in the country.

Mission:

SRSL’s strategies in meeting these objectives are:

1. To expand its installed capacity, achieve end-to-end integration for all its plants to
improve margins and reduce cyclically of business.
2. Achieve greater raw material security.
3. Increase its focus of corporate and high value consumers.
4. To reduce price risk in sugar by hedging.
5. Maintain a strong presence in export market and expand market for ethanol.

Environment policy:

Environment policy has become a serious matter in the industrial scenario in

India. Central and State Governments have many guidelines, to be followed by
Industries.
Shree Renuka Sugar Ltd., commits to incorporate environmental issues an
integral part of management philosophy in sugar and distillery operations.

Towards this Shree Renuka Sugars Ltd., will

1. Produce ethanol in a clean, green and safe environment.

2. Comply with all relevant statutory regulations.
3. Train and motivate employees on environmental and safety through participation.
4. Maintain the motto of continual improvement management
5. Strive for pollution prevention by optimizing resources.

2.4 PRODUCT/SERVICE PROFILE:

Sugar is sweety, white or brown, usually crystalline substance obtained

chiefly from sugarcane or sugar beets and used commonly in food products.

Sugar means something sweet in form of taste.

Formula: 12CO2 + 11H2O = C12 H22O11 + 12O2

Carbon dioxide + water = sucrose + oxygen

In chemistry sugar refers to any of the class of carbohydrates to which this

substance belongs Glucose, lactose, and maltose are sugar most plants manufacture
sugar is soluge in water, sweet to the taste and either directly on indirectly for
mentable.
 The chemist knows as “sucrose” one of the family of sugars otherwise known
as saceharides as the name implies, contain carbon and hydrogen plus oxygen in the
same ratio as in water.

Sugar is controlled commodity in India under the essential commodities Act,

1955. The government controls sugar capacity additions through industrial licensing
and determines the price of the major input sugar cane, decides the quantity that
can be sold in the open market, fixes the prices of the levy quarter sugar and
determines maximum stock levels for wholesalers etc.

2.4.1 Harvesting and processing season:

Harvesting and processing season may vary from country to country and area
to area and factory to factory depending on the convenience. Usually the harvest
starts in July/August and continues to April/May. Some factories have the continuous
supply of cane throughout the year, and they process throughout the year without
keeping the factory idle.

2.4.2 Handling and transport of cane:

The bulk of the world’s sugarcane is harvested and loaded by hand and
Transported by trucks, Lorries, tractors and bullock carts from growing place to
factories. Some factories have railway tracks for the purpose of transporting
sugarcane and sugar.

2.4.3 By-Products of sugarcane:

The sugar mill produces many by-products along with sugar. A typical
sugarcane complex of 3000 TCP capacity can produce 345 tons of sugar, 6000 liters
alcohol, 3 tons of yeast, 15 tons of potash fertilizer, 25 ton of pulp, 15 ton of wax,
150 ton press-mud fertilizer and 750 KW 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 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 chemical such as acetone, acetic acid, butonol, acetic anhydride, MEG, etc.
Some of the alcohol based chemicals like MEG, acetic acid, and acetone etc., face
stiff competition from production through the petrochemical route.

Nearly 70% of molasses produced are consumed by the industrial alcohol

manufactures and the remaining 30% is consumed by the portable alcohol sector.

After alternating between control and decontrol, the government adopted the
policy of partial decontrol in 1967-68, which has since been the mainstay of
government policy except for two short periods of decontrol in the 1970's Under this
policy, the government procures 40% of production at controlled prices based on the
Statutory Minimum price for sugar cane, for supply through the public Distribution
System and the balance 60% is allowed to be sold by the mills in free market subject
to the monthly release mechanism. The levy quota for sugar mills has been brought
down from the peak levels of 70% in 1968-69 to the present levels of 40% as a
gradual process of deregulation of sugar industry.

Bagasses:

Bagasse is a fibrous residue of cane stalk that is obtained after crushing and
extraction of juice. It consists of water, fiber and relatively small quantities of soluble
solids, the composition of bagasses varies based on the variety of sugarcane,
maturity of cane, method of harvesting and the efficiency of the sugar mill, the usual
bagasses composition is given in exhibit 5 as shown below.

EXHIBIT 5:

Bagasse is usually as a combustible in the furnaces to produce steam, which

in turn is used to generate power. It is also used as raw materials for production of
paper and as feedstock for cattle.

By making use of bagasse, sugar mills have been successful in reducing

dependence on State Electric Board for electric supply. For example requirement for
FY98 from captive generation from stream Turbines.

Power:

In the process of crushing of sugar cane, Bagasse, a fibrous by-product is

produced which is used in the boilers to generate steam. The Company produces
power from Bagasse, which is used in the manufacturing process as well as sold to
the state electricity boards. Further, this Bagasse based cogeneration plant is eligible
for carbon credit compensation under the Kyoto protocol.

Ethanol:

The company produces alcohol from the molasses (Molasses is the brown
colored residue after sugar has been extracted from the juice. Molasses still contains
some quantity of sugar, but this sugar cannot be extracted by usual technology) left
after the extraction of sugarcane juice, which can be used both for potable purpose
as well as an Industrial chemical. Further, this alcohol can again be purified to
produce fuel grade ethanol that can be blended with petrol.
Bio-fertilizers:

The residue product from distillery operations blended with chemicals is being
sold as bio-fertilizers.

2.5 AREA OF OPERATION:

Registered office:

Shree Renuka Sugars Limited.

BC 105 Havelock Road, Camp, Belgaum-590 001.
Tel: 0831-240 4000; 0831-2404 961.

Corporate Office :

7th Floor, Devchand House, Shiv Sagar Estate,

Dr Annie Besant Road,
Worli, Mumbai-400018.

Sugar and co-generation,

Mohhanagar. Taluka: Miraj.

Sangli, Maharastra.

Sugar, Havalaga.

Taluka: Afzlapur.
Gulbarga, Karnataka

Sugar refinery, Haldia.

Kolkatta, West- Bengal.

Sugar co-generation and Distillary, Munoli.

Taluka: Saundatti.
Belgaum, Karnataka.

Sugar and co-generation, Gavase.

Taluka: Ajra.
Kolhapur, Maharastra.

Sugar and co-generation, Kokatnur.

Taluka: Athani.
Belgaum, Karnataka.

Sugar, Bhusanoor.

Taluka: Aland.
Gulbarga, Karnataka.
2.6 OWNERSHIP PATTERN: Board of Director:

• Mrs. Vidya M. Murukumbi. Executive Chair Person.

• Mr. Robert Taylor.
• Mr. Nandan V. Yalgi.
• Mr. Sanjay K. Asher.
• J J Bhagat.
• Dr. B.P. Baliga.
• Mr. Narendra M. Murukumbi.
• Mr. B.S. Parashivamurthy
• Mr. Jayant .G.Herwadkar
• Mr. L.M. Menezes
• Mr. B.S. Parashiva
• Nithin Puranik.
• Surendra Kumar Tuteja.
• Ramnath H Sadekar.
• Hrishikesh parandekar.
• Jonathan Kingsmen.
• S N Kaluti.
Non Executive Director.
Whole time director.
Non Executive Director.
Non Executive Director.
Non Executive Director.
Managing Director.
Nominee.
Chairman.
IREDA Nominee
Murthy. Nominee (IDBI)
Whole Time Director.
Additional Director.
Company Secretary.
Non Executive Director.
Non Executive Director.
Whole time director.

Audit Committee:

The Audit committee comprising of three independent Directors namely

• Mr. Jayant .G.Herwadkar Chairman.

• Mr. Robert Taylor
• Mr. B.S. Parashivamurthy

The statutory auditors, internal auditors and Head of Finance will be attendees. The
broad terms of reference of the audit committee are as follows:

• Review of accounting and financial policies and practices.

• Review of the Company's financial reporting process and its financial
statements.
• Review of the internal Control and internal audit systems.
• Review of Risk Management policies and practices.

Corporate governance: As an important step towards corporate governance and part

of compliance under clause 49 of the SEBI Guidelines for the listed Companies, SRSL
has constituted its Board of Directors by inducting professionals, independent
persons of stature in Sugar industry and nominees of strategic lenders. In order to
have efficient and effective control over the operations of the Company in line with
the Corporate Governance the following committees have been formed 2.7

Risk Management Committee:

 The committee consists of following Directors and Officers of the Company to
monitor price fluctuation and review financial and risk management policy of the
Company.

• Mr. Narendra M.Murkumbi. (Managing Director).

• Mr. Nandan V. Yalgi, Director. (Commercial)
• Mr. Robert Taylor. (Director).
• Mr. C. Dwaraka Nath Acharya. CFO(Chief Finance Officer).
• Mr. Abhay Deshpande. General Manager (Sales).
• Mr. Rajshekhar Charantimath. General Manager (Finance).
• Mr. Nitin Bhandari. Manager (Futures).

2.7 COMPETITORS INFORMATION:

The following are the competitors of SRSL.

• Samirwadi Sugar Mill.

• Hoogar Sugar Mill.
• Gem Sugar Mill.
• GMR Sugar Mill.
• Someshwar Sugar Mill.
• Gathaprabha Sugar Mill.
• Athani Farmers Sugar Mill.

2.8 INFRASTRUCTURE FACILITY:

Owned Facility At Munoli:

The current capacity of the sugar plant is currently 8,000 TCD and 1000 MT of
raw sugar per day. The cogeneration power plant is a 35 MW plant. The distillery
produces 120KL of rectified spirit and 60KL of fuel grade ethanol per day. The
command area of sugar cane procurement is about 15,000 acres spread over 150
villages and the supporting base of over 8000 farmer shareholders who are the
backbone of our company and part of our success story.

Leased Facility At Ajra:

The capacity of the sugar plant is currently 2,500 TCD plant with a command
area of over 8000 acres spread over 84 villages with a planned average recovery of
about 12%.

Leased Facility At Mohannagar:

The capacity of the sugar plant is 2500 TCD (will be enhanced to 4,000 TCD
plant after balancing equipment is in place) with a command area of over 9500 acres
spread over 67 villages with a planned average recovery of about 12%.

2.9 ACHIEVEMENT AND AWARDS:

Achievements And Awards:

• The company is working as per ISO 9001 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 as a

Clean Development Mechanism (CDM) projects.
• The company has also bagged a Silver Medal at south Indian Sugar Cane &
Sugar Technology 2001-2002 for Energy conservation measures at SRSL.
• Renuka Sugar is recognized as first largest plant of Ethanol by Mr.Kannappan
Hon’ble Minister for MNES and Mr.Bhaktavatsalam Managing Director IREDA.
• The modern technology of Re-boiler cuts down quantity of effluent produced
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, co-generation and distillery.
• Renuka Sugars 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

2.10 WORK FLOW MODEL:

2.12 FUTURE GROWTH AND PROSPECTS:

Future Plans:

At SRSL, the present is nothing more than a mere milestone on the path to
the future. And it is this future that constantly beckons us to tap into its vast
reservoir of ideas and innovations that will secure a higher quality of life for
everybody. The company have planned ahead to embrace that future in a variety of
ways.

The company believes in a constant evolution. Taking inspiration from the

past, setting milestones in the present. The company continually strives to unravel
the opportunities that the future has a store. Tapping the vast pool of technology
and efficient manpower, the company believes in transforming opportunities into
advantages. The dream of expanding the capacities and working with zeal to
implement new ideas and innovations has kept us ahead.

Expansion Programmes:

• A proposal for acquisition of balance plant facilities and for relocation of the
same to a new location in the State of Karnataka with expansion of cane
crushing to 4000 TCD.
• Increase in Cane crushing capacity of the green field sugar unit at Burlatti,
Taluka Athani, District Belgaum from 5000 TCD, as is originally envisaged in
the Prospectus, to 6000 TCD and Setting up of 15 MW cogeneration power
plants at the same location.
• In addition to the existing and already announced capacity of cane processing
would be 8500 TCD and cogeneration would be 15 MW taking the Company’s
total capacity next season to 20,000 TCD (inclusive of existing lease of 4000
TCD) and Cogeneration capacity to 50.5 MW.
• A project is undertaken by the company to establish a plant in South-Africa.
 3. MC-KINSEY’S 7-S MODEL

The 7-S Framework of McKenzie is a management model that describes 7

factors to organize a company in a holistic and effective way. Together these factors
determine the way in which a corporation operates. Managers should take into
account all seven of these factors, for the successful implementation of strategy
large or Small. They are all interdependent organizational variables that need to be
taken into account in organizational design. So if management of an organization
fails to pay proper attention to one of them, this may affect all others as well. On top
of that, the relative importance of each factor may vary over time.

3.1 Origin:

The 7-S Framework was first mentioned in “The Art of Japanese Management”
by Richard Pascale and Anthony Athos in 1981. They had been investigating how
Japanese industry had been so successful. At around the same time that Tom Peters
and Robert Waterman were exploring what made a company excellent. The Seven S
model was born at a meeting of these four authors in 1978. It appeared also in “In
Search of Excellence” by Peters and Waterman, and was taken up as a basic tool by
the global management consultancy company McKinsey. Since then it is known as
their 7-S model.

3.2 Key – Elements:

There are seven interdependent key – elements in the McKinsey 7-S Model.
These are: Strategy, Structure, System, Style, Staff, Skills, and Shared
Values.

These seven elements are distinguished in so called Hard S’s and Soft S’s.
The Hard – S elements (Strategy, Structure and System) are feasible and easy to
identify. They can be found in strategy statements, corporate plans, organizational
charts and other documentations.

The Soft – S elements (Style, Staff, Skills, and Shared Values) however, are hardly
feasible. They are difficult to describe since capabilities, values and elements of
corporate culture are continuously developing and changing. They are highly
determined by the people at work in the organization. So it is much more difficult to
plan or to influence the characteristics of the soft elements. Although the soft factors
are below the surface, they can have a great impact of the hard Structures,
Strategies and Systems of the organization.
3.3 STRATEGY:

By “strategy” we mean those actions that a company plans in response to or

anticipation of changes in its external environment, its customers and its
competitors. Strategy is the way; a company aims to improve its position vis-a-vis
completion, perhaps through low cost of production or delivery perhaps by providing
better value to the customer, perhaps by achieving sales and services dominance. It
is, or ought to be, an organization way of saying, “here is how we will create unique
value.”

As the Sugar company’s has chosen route to competitive success, strategy is

obviously a central concern in many business situations – especially in highly
competitive by industries where the game is won or loose on share points. But
“structure follows strategy” is by no means the be all and end all of the
organization’s wisdom.

SRSL is providing ample opportunities to the people at various levels to

impart their skills and expertise in order to enhance growth by taking positive
strategic decisions. The management wants to empower the greater heights of
achievements and each one should be given opportunity to excel and show their
potential, effective and efficient performance.

Now I am going to explain the pricing strategy of SRSL.

Pricing Policy:

Unlike other consumer or other goods, sugarcane will not be differing because
it is subject to control of Government. Government will fix the sugar price. Price for
exporting will be fixed by the firm. It is management's policy to fix the price for
exporting.

Sugar Prices:

Sugar is a controlled commodity in India under the Essential Commodities

Act, 1955. Sugar prices in the country can be classified into two broad categories at
the user end as free market prices and prices of sugar through public distribution
system. The GOI (Government of India) announces PDS sugar prices based on levy
sugar prices fixed by it and the subsidy to be provided through budgetary system.

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

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

In September 1998, PDS sugar prices were increased from Rsll.40 per kg to
Rs.12 per kg.

The sugar price range in the country for last few years is given below. The sugar
prices move in close relation to production of sugar and the inventory in the country.
Sugar prices are the lowest in India when compared to the leading sugar consuming
countries in the world. Converted into Indian rupees the price equivalent in

3.4 STRUCTURE:

To understand this model of organization change better, let us look at each of

its dimensions, as most organizations do. The central problem in structuring today is
not the one on which most organization designers spend their time that is, how to
divide up tasks. It is one of emphasis and coordination how to make the whole thing
work. The challenge lays not so much in trying to comprehend all the possible
dimensions of organization structure as in developing the ability to focus on those
dimensions which are currently important to the organization’s evaluation and ready
to re-focus as the crucial dimensions shift.

The activities are classified and based up on the job profile. The mangers
perform the various functions of the concerned departments.

There is vertical communications in the organization. The manager has a

span of control on 10-20 members in a particular section. The departmentalization
in company as a whole is based on the Function because each department has to
perform their respective functions. The decision making is partly centralized and
partly de-centralized. The employees have to follow according to the instructions
given by their higher authorities.
DEPARTMENTATION:

Departmentation is a process of dividing the large functional organization into

small and flexible administrative units. The basic need of department ion arises
because of limitation on the number of subordinates that can be directly managed by
superior.

Basis for Departmentation:

Departmentation may be on the basis of function, products region,

customers, process time, and marketing channel.
 Functional basis is very popular method of departmentation. It refers to
grouping of actives of organization into major functional department like, production,
purchase, marketing etc.

In Renuka Sugars departmentation is on the basis of Function. The major

Functional departments of Shri Renuka Sugars Ltd are as follows.

3.4.1 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 begging 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 color.
• Crystallizing the drying and packing the refined sugar. ‘

3.4.2 PURCHASE DEPARTMENT:

The head of the department’s heads is the purchasing department. Purchasing

decisions are divided in to 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.

3.4.3 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 departmental 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.

3.4.4 ADMINISTRATIVE DEPARTMENT:

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.
3.4.4.1 PERSONNEL DEPARTMENT:

Functions

• Recruitment and selection:

The advertisement for recruitment of employees is made through leading

newspaper. Apart from this as statutory obligation, the company appoints trainee
also among the application received eligible candidates appointed for the job.

• Training and development:

Training imparts skills to newly employee. Training is necessary in production,

mechanical and electrical department. On the job training is arranged at the plant.

• Remuneration:

Remuneration refers to the reward for labor and service. Basically

remuneration is on the basis of hours worked. Each shift is of 8hours and 3 shifts a
day.

Fringe Benefits:

• Canteen facility.
• Transportation facility.
• Housing facility.
• Free electricity.
• Exgratia (A type of bonus given during deepawali.).
• KLE’S Health Card (Rs.1 lakhs for the employee and Rs. 50,000 for spouse.)
• Workesmen compensation policy depending upon the age and position of the
employee.

3.4.4.2 TIME OFFICE:

Objectives of time office are.

• Keeping attendance records for administration and payment purposes.

 • Maintains records for giving increment and promotion (Promotion is on the
basis of Merit.)

3.4.5 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 (Shri 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.

Authorized Share Capital : Rs.25 crores

Project Cost : Rs.55.6 crores
Funding Institutions : IDBI, IREDA, and KS1IDC
Bankers : Bank of Baroda, SBI, Sangli Bank Ltd. Katkol Cooperative Bank Ltd.
Vysya Bank Ltd.

3.4.6 ACCOUNTING DEPARTMENT:

SRSL is an Industrial organization manufacturing sugar, power and ethanol

accounts department of SRSL plays a vital role in achieving company's objectives.

Need for accounting system:

• To ascertain the profit

• To ascertain the financial position of the business
• To provide information to tax authorities like, sales tax, income tax, control
excise etc.
• To provide control over assets and properties of the company
• Assistance to management on:
1. Decision-making
2. Forward Planning and budgeting.
• To provide information to government central, state and various local bodies

3.4.7 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 procure 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.
Circle office:

Assistant cane development officer heads the circle office there are 20 circle
officers located at different places surrounding from where cane is being produced.
Supervisor assists circle officer. There is one supervisor for 1500 acre. Supervisors
are to report corresponding circle offices. Weekly report has to be sent the cane
manager.

3.4.8 ELECTRICAL 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

• To repair & maintenance of machines.

• To develop power for prime movers
• Attending electricity related works.
• Maintenance of switch board etc.

3.4.9 SALES DEPARTMENT:

Sales manager is in-charge 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.

3.4.10 CHEMICAL DEPARTMENT:

Chemicals department is directly concerned with production. When the

production is on process, mixing proper quantity and proper chemicals is necessary.
Chemicals department is the production department here.

Important Chemical: Lime and sulphur dioxide.

4.4.11 POWER PLANT:

Power plant uses the fiber of processed sugarcane (biogases) as fuel to

generate electricity in an environmentally responsible manner.

An integrated 35MW power plant generates and supplies electricity to the

state grid produced from sugarcane waste. Steam used to rotate turbines.12MW
power is utilized in the plant remaining power is supplied to KPTCL AND TATA
(5MW).

3.4.12 DISTILLERY:

Distillery Plant was located in the year 2002 at the same location. Spirit is
produced at the distillery plant. Molasses converted into rectified spirit. Molasses is
waste product from sugar juice. It is the by-product in the sugar industry.

Production of spirit is subject to control of excise department (Karnataka

state government). The same department makes distribution and sale of spirit only.
Ethanol is also subject to control of excise department. In India 5% ethanol is used
in petrol.

3.5 SYSTEM:

System refer to the formal process and procedure used to manage the
PRESIDENT organization including the management control system, performance
management, measurement and reward system, planning, budgeting, resource
allocation, MIS, distribution system, accounting system, trading system etc.

Systems maintained by the SRSL:

The firm has both manual and also computerized systems.

1. Financial system/ Accounting System: Currently they are using Tally 7.2 as
the accounting software. Each branch and department is divided and each have their
own files maintained, and at the end of the day the data will be transferred to the
main branch which will be processed together by the finance manager.
2. Customer data base system: The details of the customers are maintained in the
software called SAP which helps in maintaining long relationship with the customers,
and also help in the process of any difficulty arises. This will help them to shortlist
the deliveries and timely delivery of cars.

3. Compensation system/ Reward system: The salary details of various

designations, payment dates and payments made are recorded and also the
incentives given are also maintained here. The software used for this purpose is SAP.

4. Attendance System: The VB* Punching Machine is used to record the

attendance of the employees. The employees has to insert there thumb on the
machine when they comes to the company and at the time of going again they has
to insert his thumb on the machine. This enables the company to have proper
recording of the attendance.

3.6 STYLE:

This part of McKinsey 7-S framework includes the leadership style of top
management and the overall operating style of the organization. It also includes the
motivational style used in the company. Some other important areas which come
under style are:

1. How does top management make decisions (Ex participatory v/s top-down)?
2. How do manager spend their time (Ex: informal meeting, informal conversation in
the field with customer)?

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, positivity, 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 ability.

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 for the given situation.

A number of leadership styles are given below.

• Authoritative Leadership.
• Democratic Leadership.
• Participative Leadership.

SRSL Perspective:
 In the modern business situation of SRPL, the company is using “Democratic
Leadership style”. Any one in the firm can directly meet any one. Daily meetings
will be held between the sales team and the team manager to solve the problems of
the teammates and to collect the sales details. Team manage 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-Chairmen 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 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 observations and
recommendations emanated from the audit. All significant observations and
follow-up actions are reported to the Audit Committee. The Audit Committee
has met seven times during the financial year.
3.7 SKILLS:

A skill is the ability, knowledge, understanding and judgment to accomplish a

task. Skills may be defined as what the company does best; the distinctive capacities
and competencies that reside in the organization.

The skills of employees of organization are very appropriate, as the business

needs. The skills needed are both technical and clerical (finance and marketing
related). Sales executives are mainly from the branches of B.Com, BBM, and MBA.
And skilled people are mainly engineers. The firm knows what is its responsibility in
the market and complete knowledge in order to satisfy its customer delightfully.

SRSL consists of the personnel, having high technical and managerial skills.
Shri Renuka Sugars Ltd is having distinctive capabilities in comparison with the
competitors. Training is provided to all level of the employees, on specific tasks
related to job and also on various other broad aspects. They also contribute to the
total customer value. The technical personnel are sent to Vasantdada Sugar
Institute, Pune each year for up-gradation and post-graduation courses and further
choosing them on merit.

Training:

SRSL’s HR strategies focus on providing need based training to its employees

to develop their knowledge, skills and attitude in compliance with ISO 9001/14000
standards. During the year, 49 in-house trainings were organized covering:

• Operation
• Maintenance
• Instrumentation
• Electrical
• Finance
• Information Technology.

On-the-job training was provided to 180 employees in Key areas of

operation.106 Executives were nominated for 60 external training programmes on
various topics. Awareness programme on Internal Quality Auditor Training on ISO
9001 (Quality Management System), ISO 14001 (Environmental Management
System) were conducted to train 38 Executives in the above standards.

3.8 STAFF:

Staff (in the sense of people, not line / staff) is often treated in one of two
ways. At the hard end of the spectrum, we talk of appraisal systems, pay scales,
formal training program, and the like. At the soft end, we talk about moral, attitudes,
motivation, and behavior.

People are one of the most important assets of the company. The
technologies, Products and structures of a company can be copied by competitors
but no one can match the highly charged, motivated people who care these things.
 People are firm’s repository of knowledge and they are central to company’s
competitive advantage. Well educated, coached and highly motivated people are
critical to the development and execution of strategies, especially in today’s faster-
paced, more perplexing world, where top management alone can no longer assure
firm’s competitiveness.

The staff of SRSL – Top, middle and lower management have nurtured
following qualification thereby being able to meet the expectations of their valuable
customers.

Quality:

SRSL staff maintains professional attitude among all employees.

Line & staff Relationship:

Line refers to those positions of an organization, which have responsibility,

authority and is accountable for accomplishment of primary objectives. The
relationship existing between two managers due to delegations of authority and
responsibility and giving or receiving instructions or orders is called line relationship.

Line authority represents uninterrupted series of authority and responsibility

delegating down the management hierarchy.

SRSL has adopted Line & Staff organizational structure that offers individual
the opportunity to meaningfully learn & participate across diverse business
processes.

The Managing Director of the company responsible for the Quality

Management System. He is overall in-charge overseeing the overall growth of the
company, whereas plant heads look after day -to -day activities.

The business process heads, as shown in overall organization chart, are

treated as top management to establish, implement, maintain & continually improve
effectiveness of Quality management to establish, implement, maintain & continually
improve effectiveness of Quality Management System.

The Deputy General Manager follows the Managing Director. The team leaders
of various departments report to the Deputy General Manager.

3.9 SHARED VALUES:

Shared values are what engender trust and link an organization together.
Shared values are also the identity by which an organization is known throughout its
business areas. These values must be stated as both corporate objectives and
individual values. Every organization and every leader should have a different set of
values that are appropriate to its business situation.

How To Establish Shared Values?

 • Ensuring employee's understanding of organization's values and vision
requires the organization to have clearly defined values. Without this,
organization can get itself into real trouble.
• Defining shared value is more than putting words on the paper. Most
organizations have values statements or mission statements, yet many do not
follow them. Winning organizations create successful cultures in a systematic
way using various approaches that may include visual representations,
training seminars, and/or socializing events.

Unlike the other six ‘S’s, super ordinate goals (Shared Values) don’t seem to be
present in all, or even most organizations. They are, however, evident in most of the
superior performers.

The different values system of subordinates is to be responsible to their

departmental duties as delegated by the functional / departmental managers. The
organization can work effectively and efficiently if there is proper co-ordination.

Culture of the company:

• The company practice integrity, honesty, commitment, promoting

salesmen’s.)
• The company promotes Team Work.
• The company value leadership. (Result oriented and innovative, positive
attitude)
• The company have a passion for excellence (competing with global standards)
• The company reward and recognize the standard.
 4. SWOT ANALYSIS

4.1 INTRODUCTION:

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

SWOT analysis is an extremely useful tool for assessing and communicating the
current position of an organization or a particular reform option in terms of its
internal Strengths and Weakness and the external Opportunities and Threats it faces.

4.2 SWOT ANALYSIS:

SWOT analysis came from the research conducted at Stanford Research

Institute from 1960-1970. The background to SWOT stemmed from the need to find
out why corporate planning failed. The Research Team was Marion Dosher, Dr Otis
Benepe, Albert Humphrey, Robert Stewart, and Birger Lie. The research carried on
from 1960 to 1969. 1100 companies and organizations were interviewed and a 250-
item questionnaire was designed and completed by over 5,000 executives.

During the research, initially SWOT analysis was called SOFT (Satisfactory,
Opportunity, Fault, and Threat) analysis which was nothing but good and bad about
operation in its present and future. “What is good in the present is Satisfactory, good
in the future is an Opportunity, bad in the present is a Fault, and bad in the future is
a Threat”. This was called the SOFT analysis. Afterward in a Long Rang Planning in
Switzerland, the ‘F’ of SOFT changed to ‘W’ and then it called as SWOT analysis.

SWOT Analysis: SRSL Perspective:

 5. Summary of Annual report

5.1 Balance sheet:

5.2 profit and loss account:
5.3 FINANCIAL ANALYSIS:
It is a very powerful tool useful for measuring performance of an
organization. It concentrates on the inter-relationship among the figures appearing
in the balance sheet and income statements and helps the management to analyze
the past performance and make future predictions. Ratio analysis pinpoints a
business strengths and weakness in two ways:
• They provide an easy way to compare present performance with the past.
• They depict areas in which the business is competitively advantaged or
disadvantaged through comparison of ratios of other businesses within the
same industry.
5.4 INTERPRETATION

1. SHORT TERM SOLVENCY RATIOS: These ratios measure the liquidity of the
firm and its ability to meet its maturing short-term obligations.

CURRENT RATIO:
 This ratio measures the solvency of the company in short term. A current
ratio of 2:1 indicates a highly solvent position. Banks consider a ratio of 1.33:1 as
minimum acceptable level for providing working capital finance. The ratio has been
increasing over the years and is 2.02 in 2006, which was 1.19 and 1.30 in 2005 and
2004. This shows that the assets are being effectively utilized. The position of SRSL
is very good.

QUICK RATIO:

This is a measure of the company’s ability to meet its current obligations. A

quick ratio of 1:1 indicates a highly solvent position. The position of SRSL is fairly
good in this aspect.

2. LONG TERM SOLVENCY RATIOS:

These ratios measure the long- term financial stability of the firm. Long-term
stability means the ability of the firm to pay all its liabilities including those, which
are not currently payable.

DEBT EQUITY RATIO:

This ratio indicates the relationship between loan funds and net worth of the
company, also called gearing. If the proportion of debt is low, a company is said to
be low geared and vice versa. Ideal debt equity ratio is 2:1. The higher the gearing,
the more volatile the return to the shareholders. In the year 2006 SRSL is a highly-
geared company as the percentage of debt as compared to the shareholders fund is
high. This ratio has been 0.73 and 0.34 in 005 and 2004.

INTEREST COVERAGE RATIO:

This ratio shows how many times interest charges are covered by funds that
are available for payment of interest. 2:1 is considered an ideal ratio. A very high
ratio indicates the firm is conservative and a very low ratio indicates excessive use of
debt. This ratio is very high in SRSL indicating that it is a very conservative in using
debt. This ratio has bee 5.43 and 5.27 in 2006 and 2005.

3. PROFITABILITY RATIOS:

These ratios help in assessing the adequacy of profits earned by the company
and also to discover whether profitability is increasing or declining.

RETURN ON INVESTMENT:

The aim of a business enterprise is to earn return on capital. This ratio helps
managers in knowing what each project is bringing in the form of returns and also
helps in discontinuing non-profitable products. The returns have been increasing over
the years except a slight decline in 2006 (15%).In the year 2005 and 2004 it was
41% and 23%.

NET PROFIT RATIO:

This ratio focuses on the net profit margin arising from the business
operations. This ratio is usually calculated to determine the trend in net profit
margins and performance of the company along the years and with other similar
companies. The net profits have been showing an increasing trend. In the year 2006,
2005, and 2004 it was 11%, 9%, and 11% respectively.

RETURN ON ASSETS:

This ratio indicates the efficiency of utilization of assets in generating

revenue. As the ratio indicates there has been optimum and effective utilization of
assets in this unit.

4. TURNOVER RATIOS:

These ratios measure how effectively the firm employs its resources and with
which speed it converts various accounts in to sales or cash.

INVENTORY TURNOVER RATIO:

The higher the ratio or lower the stock turnover period is always better. SRSL
has a ratio of 6.66, 7.59, and 6.80 in the year 2006, 2005, and 2004.

DEBTORS TURNOVER RATIO:

It measures the amount of resources tied up in debtors and whether the

company has been efficient in converting them into cash. The higher the ratio, the
better the position and the collection period is very good. The debtors’ turnover in
the year 2006, 2005, and 2004 is 22.63, 47.77, and 32.29 respectively and
therefore the position is good.

DEBTORS COLLECTION PERIOD: It measures how long it takes to collect amounts

from debtors. This company follows a policy of 30 days credit period policy. The
company has been able to collect its due on time. In the year 2006, 2005, and 2004
it took 16, 11, and 7.5 days for collection of its dues. This indicates that there is
efficiency in the procedures for collection of debts.

SALES TO CAPITAL EMPLOYED RATIO:

This ratio indicates the efficiency in utilization of capital employed in

generating revenue. This ratio has been on an increasing trend being 4.48 times in
2005, but in the year 2006 it has reduced to 1.4 times. Thus, there is a chance of
improvement and better utilization of the capital in generating revenue.

6. MANAGERIAL CONCEPTS OBSERVED

Following are the managerial concepts I observed in the organization.

• The Organization is partly centralized and partly decentralized. I observed in

the Administration department that the manager delegated the decision
making authority to his subordinates. The employees at the hierarchical level
are allowed to pass the expense bills up to a certain limit.
• The department’s functions as individual teams. This creates a sense of team
spirit among the group members in each of the division. This also creates a
competitive environment with in the organization.
• The plant is designed on the basis of Product / Line layout. This type of layout
avoids bottlenecks in the process, facilitates better planning, and requires less
space.
• There was no unity of direction. The worker received the orders from 2
superiors. As a result of this there was confusion. I observed that the
production employee was getting the instructions from his superior as well as
from the juice supervisor.
• The manager has a span of control of 10-12 workers.
• The workers are motivated by giving fair salary, job security, good working
condition, recognition for significant accomplishment (they are rewarded
either on 26th January or 15th August.), giving increased responsibility etc.
• I experienced that there was informal communication among the staff
workers.
• 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.
• The company uses Pull Strategy for marketing its products.
• The subordinates are encouraged by their superiors to take initiatives in
production planning and control which could lead to reduction in cycle time.
• All the staff members are given fair and just treatment. There is no
discrimination among the employees on caste, religion and sex.
 7. LEARNING EXPERIENCES

It is a wonderful experience of being able to observe the working of an

organization first hand as it is my first time experience.

This exposure to the corporate working will help us in comparing the

standards in other companies. It will also help us in choosing our specializations and
the career which one is planning to get into in the long run.

As my first exposure to the corporate word, the things which I have learned
as a trainee in this organization are as follows:-

The first thing I learned as a trainee is to be punctual. First few days I was
not punctual. One day I did not go to the company and failed to inform the Senior
Administrative officer. The next day I went to the company, the officer asked me not
to come for the next 2 days. I realized my mistake and I was punctual for the rest of
my training programme.

7.1 Human Resource:

• The company recruits its manpower through various sources such as internal
sources, campus recruitments, advertising, etc.
• 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 training is to be given is decided and a training
calendar is prepared every year.
• 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
• 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.

7.2 Marketing:

• Marketing department is considered as the key department in this

organization as it is responsible for generating orders for the company’s
product range. These work orders are sent to respective department for
processing.
• At present the company is using pull strategy for marketing its products.
• The company fixes to both distributors as well as to marketing personnel to
meet the desired objectives. If they achieve the target it provides incentives
to sales personnel.

7.3 Production:
 • The company has sugar laboratory which conducts tests and check for
suitability of product to health care.
• All employees have to wear uniform on all working days. This shows the
discipline of workers.
• The plant is designed in the shop floor and the movement of materials from
one machine to another is easily understood by me.

7.4 General:

• The company uses VB* punching machine to record the attendance of the
employee.
• The company has a strict security department. They will not allow any
outsider to enter the company unless the Administrative department gives
permission. The trucks and tractor are allowed to enter inside the company
only after checking the invoice and the license of driver.
• The depreciation is calculated on the Reducing Balance Method.
• The company follows more of an Organic type of structure which develops
self-reliance and decision making abilities among the departments.
• The department’s functions as individual teams. This creates a sense of team
spirit among the group members in each of the division. This also creates a
competitive environment with in the organization.
• The subordinates are encouraged by their superiors to take initiatives in
production planning and control which could lead to reduction in cycle time.
 8. CONCLUSION

Shree Renuka sugars have state of art equipment and a highly competent
technical team that produces one of the highest quality sugars. It is growing very
fast in the industry. It is dynamic achievement of lady entrepreneur Mrs. Vidya
Murukumbi.

SRSL is not only concentrating in production of quality sugar, but also

engaged in developing new seeds which will be more suitable to the climate.

Irrigation planning by SRSL is appreciable. It arranges loans from banks for

pipeline facilities to fanner's fields. Lots of irrigation is being done under this scheme
repayment to banks is made from the bill of concerned farmer.

Sugar industry is agro based and monsoon season hits the production. The
reason as to why sugar factories will be closed is because of inconvenience of
harvesting and even transporting the cane to the factory. Indian sugar industry is
highly fragmented with organized and unorganized players. The unorganized players
mainly produce Gur and Khandsari, the less refined form of sugar.

The Company is very active in trading portfolio and second largest merchant
exporter in FY 02-04 when the sugar was being exported, and has been the largest
raw sugar importer in the previous year. The Company is the only one in the industry
today with a formal risk management system in place. As a significant step forward
in hedging own sugar price risk as well as that of customers, the company became
an active corporate member on NCDEX dealing in sugar commodities to trade in spot
market and in futures.

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

With an able management and robust vision, Shree Renuka Sugars today is
one of the fastest growing sugar manufacturers in the country. M.S.RAMAIAH
INSTITUTE OF TECHNOLOGY, - 59 - BANGALORE.