Financial Analysis of

PARRYS SUGAR INDUSTRIES LTD

A Project Report Submitted to

Mrs. Neha s. sukla

Faculty Member, NSVKMS MBA Collage (Affiliated With Gujarat Technological University) On Date- 17/11/2011 In Partial of the requirement for Accounting for Managers course sem.1 Master of Business Administration Programme Batch 2011-2013 Submitted by Group no.

NAME Modi jaydip Borat chirag Modi shirish Parmar vijay Modh ravi

Roll no. 28 02 30 42 27

PREFACE

Today is the age of competition. A lot of new firm entered in the market with new things. People everyday wants something new. So businessmen continuously do hard work and struggle to generate new ideas and to do something different from others. All this require not only theoretical knowledge but also some practical knowledge. Practice is more important for getting knowledge and experience. For getting real life experience practice, we have to do some practical work and these opportunities get in MBA by preparing a financial report. From this practical study I got a very good experience and it improves my knowledge and it provides guidelines to me to do work in actual situation. Today there is scarcity of funds, so its very important for every company to make effective utilization of the funds. In these report I analyze the financial data of PARRYS SUGAR INDUSTRIES LTD. For these years and analyze the financial position of the company.

ACKNOWLEDGEMET The successful completion of this report would not have been possible without the cooperation and support of my teachers, friends and my institute. I also extend my gratitude to respected HOD. JAYRAJ SETHY of the institute for arranging this kind of practical studies on finance report. I also forward my thanks my Prof. NEHA S.SUKLA for imparting valuable guidance and co-operation in making of this finance report I am also forwarding my gratitude to the company which helped me when we called them to sort out our doubts. Also I am thankful to Gujarat Technological University for introducing this kind of practical study on finance report as a significant aspect of MBA program without which we would have had no practical experience of real finance management.

Table of contents

Sr.no Part 1

Contents Company profile Introduction of the company Brief history of the company Current mgt of the company Analysis of directors report Analysis of the auditors report Introduction of the ratios Meaning and objectives of ratios Classification of ratios Interpretation through ratios Calculation of ratios Common size statement Profit and loss a/c Balance sheet Comparative statement Comparative balance sheet Analysis and significant accounting policy Cash flow statement Conclusion Bibliography

Page no. 6

Part 2 Part 3 Part 4

12 16 17

Part 5

61

Part 6 Part 7 Part 8 Part 9 Part 10

66 67 71 74 75

Part 1 Introduction of the company

Sugar industry is the second largest agro based industry, next only to the textile industry & india is one of the largest & producers & consumers of sugar in the world. The sugar industry in india highly fragmented. In most part of the world, sugarcane is handled manually & involves extensive labour. Given the nature of regulation in the sugar industry, there are no foreign sugar producer in india. Industrial consumer & household in the country determined the growth of domestic sugar consumption.

COMPANY PROFILE Registered office Main Office Karvy computershare Pvt. Ltd. Unit : Parrys Sugar industries LTD
Plot no.17 to 24, vittal Rao Nagar Madhapur Hyderabad- 500081 Phone:(040) 23420819 to 24 Fax:(040) 23420814 Email Id:einward.ris@karvy.com

BRANCE OFFICE Karvy computershare Pvt. Ltd. Unit : Parrys Sugar industries LTD
No.51/2 TKN Complex, Vani vilas Road Opp: National Collage, Basavanagudi Bangalore- 560004 Phone :(080) 26621169 Email Id: Bangalore@karvy.com

Brief History of the Company

Company History - Parrys Sugar Industries GMR was originally incorporated on June 30th, 1986 in the name and style of Sree Sarada Ferro Alloys Ltd., to set up a plant for the manufacture of Ferro Chrome at an installed capacity of 6,000 TPA at vivalasa Village, Tekkali Mandal in Srikakulam District of ndhra Pradesh. The name of the Company was subsequently changed to GMR Vasavi Industries Ltd and a fresh Certificate of corporation was obtained on 1st February 1994. As the project could not be implemented by the original promoters viz., Sri P V Lakshmana Rao, Sri K Srinivas Rao and associates, the present Directors comprising Shri G Mallikarjuna Rao and Shri S Suryanarayana Murthy had taken over the management in 1989 and implemented the said project. GMR's existing Ferro Alloys operations registered a capacity utilisation of 71.12% in 1990-91 which subsequently increased to 89.73% in 1991-92 and around 88.20% in 1992-93. The company enhanced the manufacturing capacity from 6,000 TPA to 10926 TPA during 1993-94 and achieved a capacity utilization of 63.83% during 1993-94. The capacity utilization has been lower due to shut down of the Plant for a period of about 2 months on account on implementation of the expansion project and time taken for stabilization of production. 2000 - The Company has entered into tripartite agreement wit NSDL and CDSL and Karvy Consultants Ltd. (R&T agents) to make the equity shares of the company available for dematerialisation. 2001 - The Board has resolved to hive-off the brewery division to GMR Beverage Industries Ltd., Hyderabad, a group company, which is going to be a100 per cent subsidiary of the company. 2002-V Balasubramanian appointed as Company Secretary of GMR Technologies. 2003 - GMR Technologies & Industries Ltd has informed BSE about the following changes in the composition of the Board of Directors of the company: 1. Mr K V K Seshavataram has been elected as the Chairman of the Board of Directors of the company 2. Mr O Bangaru Raju has resigned form the Board of Directors of the company and the Board has accepted his resignation wef December 30, 2002.

2005 - GMR Industries picks up Best Performer Award 2007 -GMR Industries Ltd has appointed Dr. V Raghunathan as the Managing Director of the Company, with effect from January 25, 2007. 2009 - GMR Industries Ltd has informed that the Board of Directors of the Company at its meeting held on July 27, 2009, inter alia, has appointed Mr. A Sankara Rao as Executive Director with effect from August 01, 2009 for a period of 3 years. 2010 - GMR Industries Ltd has appointed Mr. D. Kumaraswamy as an Additional Director on the Board of the Company with effect from May 18, 2010.

CURRENT MANAGEMENT
BOARD OF DIRECTORS s.sandiya, chairman D. kumaraswamy, managing director K. Balusubramanian K. Ramadoss V. Rravichadram N. Srinivasan

Company secretary B.N. Rath

REGISTERED OFFICE Venus building, 3rd floor, kalyanamantapa road Jakkasandra, koramangla Bangaluru 560034

BANKERS State bank of india

INVESTOR CONTACTS REGISTER & TRANSFER AGENTS

Karvy computershare Pvt. Ltd. Unit : Parrys Sugar industries LTD

Plot no.17 to 24, vittal Rao Nagar Madhapur Hyderabad- 500081 Phone:(040) 23420819 to 24 Fax:(040) 23420814 Email Id:einward.ris@karvy.com

COMPANY b.m.rath general manager (legal) & company secretary tel: 91 80 49006666 fax: 91 80 49006600 email: investorgrievancescell@psil.murugappa.com website: www.parrysugar.in

Part 2 Analysis of Directors Report

Dear Members, The Directors have pleasure in presenting their 25th Annual Report together with the audited financial statements for the 15-month period ended 30th June 2011.

Financial Result For the year ended 31st March, 2011 26753 2989 619 (28) 2398

Turnover (including other income) Profit Before Tax Less: Provision for Taxation (current) Provision for Taxation (Deferred) Profit after Tax (Before Extraordinary Item) Extraordinary Item (Net of taxes) Add: Balance of Profit brought forward from previous year Profit available for

(Rs. in lacs) For the year ended 31st March, 2010 31898 2991 421 45 2525

12536 6504

4278

21438

6804

appropriation Appropriation to: General Reserve Balance Carried over to the Balance Sheet

300 21138

300 6504

CHANGE IN FINANCIAL YEAR The financial year 2010-11 of the Company was extended upto June 30,2011 to fully refect the performance of the Company for the sugarseason 2010-11 which continued beyond March 2011 due to availability ofcane. Hence, the financial results for the year under review cover a period of 15 months and not comparable with the results of the previous financial year 2009-2010 which is a 12 months period. DIVIDEND your Board is unable to recommend any dividend for the financial year ended on June 30, 2011. COMPANY PERFORMANCE During the year under review your Company''s total income was Rs. 14934.25 lakhs as against Rs. 2526.29 lakhs for the previous year. The Profit before interest and depreciation of Rs. 200480.68 lakhs was marginally higher compared to last two year. The sugar prices remained sluggish due to higher sugar output during the year 2010-11 which witnessed a 65% percent growth driven mainly by improved cane acreage in response to higher cane prices paid in last two sugar years. Further, during the year in line with the industry, the Company had to pay Rs. 200 per tonne of cane in Karnataka units as additional cane price for the cane supplied during the previous year. Distillery Division The distillery division produced 188.85 lakh litres of industrial Alcohol/Ethanol against 95.92 lakh litres in the previous year registering an increase of 96.88% due to commencement of operations of the distillery unit at Haliyal. Increase in production and sale was due to availability of more sugarcane resulting in higher production of molasses.

Power Division The total power generated by our Co-generation plants was 1508.06 lakhs units as against 1025.57 lakhs units in the previous year mainly due to availability of more bagasse from sugarcane crushing. The power exported during the previous year includes export during the off season realising a better tariff. The revenue of the Company is affected by lower tariff of the StateGovt. utilities and the Company is exploring the possibility of higher revenue through third party exports and sale through power exchange. SHARE PURCHASE AGREEMENT As informed in the last year's report, pursuant to the Share Purchase Agreement dated April 25, 2010 entered into by E.I.D.- Parry (India) Ltd. (EID Parry) with the erstwhile promoters and the consequent open offer made under the SEBI (Substantial Acquisition of Shares and Takeover) Regulations,1977 (Takeover Code), Consequently, your Company has become a subsidiary of EID Parry with effect from August 27, 2011 and EID Parry has become the promoter of the Company under the applicable Regulations.

SOCIAL RESPONSIBILITY The Company through its CSR initiatives seeks to provide quality education, improve access to public health system, nutritional inputsand enhance economic opportunities of families and community through the promotion of sustainable agriculture and by providing training to farmers. The Company in collaboration with HelpAge India, has launched a project to run a Mobile Medicare Unit in and around Rajam, Srikakulam District, Andhra Pradesh to provide basic & essential Medicare, to the poor, needy and elderly population of the society. SUBSIDIARY COMPANY The Company''s wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. (ABSPL), proposes to set up an integrated sugar plant at Raibagh, Karnataka and the land acquisition process is completed. The Company is in the process of conversion of land and obtaining various other clearances/approvals.

SUBSIDIARY ACCOUNTS In terms of the Circular No: 2 /2011 dated February 8, 2011 issued by the Central Government u/s 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit and Loss Account, and Reports of the Board and the Auditors of the Company''s wholly owned subsidiary, Alagawadi Bireshwar Sugars Pvt. Ltd. have not been attached to the Balance Sheet of the Company as at June 30, 2011. However, as directed by the Central Government, the financial data of the subsidiary have been separately furnished forming part of this Annual Report. These documents will also be available for inspection at the Registered office of the Company and of the subsidiary company during working hours up to the date of the Annual General Meeting. However, the related detailed information of the Annual Accounts of the Subsidiary Company will be made available to the Holding Company's investors seeking such information at any point of time. The Annual Accounts of the Subsidiary Company will also be kept for inspection by the investors at the Registered office of the Company and that of the Subsidiary Company. CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements have been prepared by the Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the same together with Auditors'' Report thereon form part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956 and on the basis of explanation given by the Executives of the Company and also subject to disclosures in the Annual Accounts, your Directors to the best of their

FIXED DEPOSITS During the year under review, your Company has neither invited nor accepted any fixed deposits from the public as per the provisions of Section 58A of the Companies Act, 1956. As such, no amount of principal or interest was outstanding as on the date of the Balance Sheet.

CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance Requirements as set out by SEBI and is in conformity with most of the requirements of the voluntary guidelines on Corporate Governance issued by the Ministry of Corporate Affairs. CEO/CFO CERTIFICATION Mr. D. Kumaraswamy, Managing Director and Ms. G. Jalaja, Chief Financial officer, have given a certificate to the Board as required under Clause 49 of the Listing Agreement with the stock exchanges. PERSONNEL RELATIONS Your directors hereby place on record their appreciation for the services rendered by the executives, staff and workers of the Company. During the year under review, relations between the employees and the management continued to be cordial. CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO The information relating to conservation of energy, technical absorption and foreign exchange earnings and outgo pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules,1988 is given in the Annexure forming part of this Report.

Part 3 Analysis of AUDITORS report

The Auditors, M/s. Price water house, retire at the conclusion of the ensuing Annual General Meeting and have expressed that they do not wish to be reappointed at the ensuing Annual General Meeting. M/s. R.G.N Price & Co, Chartered Accountants have confirmed their willingness to act as Auditors of the Company for the financial year 2011-12 and have confirmed that their appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. COST AUDITORS Narashima Murthy & Co., Cost Accountants, was appointed as the Cost Auditor for conducting the cost audit of Sugar Units of the Company for the financial year 2010-11. As per the Circular No.52/26/CAB/2010 dated 02.05.2011 of the Central Government, the Company is also required to conduct the cost audit of its distillery and cogen units with effect from the financial year 2011-12. Accordingly, Narashima Murthy & Co. has also been appointed as Cost Auditor for conducting the cost audit of Sugar, Distillery and Cogen Units of the Company for the financial year 2011-12. PARTICULARS OF EMPLOYEES The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 is given in the Annexure forming part of this Report. ACKNOWLEDGEMENTS Your directors acknowledge and express their grateful appreciation for the co-operation and assistance received from Banks, Government Authorities, Customers, Farmers and Suppliers. Your directors also thank the shareholders for the confdence reposed by them in the management of the Company and for their continued support and co-operation.

PART 4 INTRODUCTION OF RATIO ANALYSIS

MEANING OF RATIO ANALYSIS:Ratio is financial form should the comparison between two financial terms". It relationship between various related items in these financial statements is established, they can provide useful clues to judge accurately the financial health and ability of business to maximize the profit. This relationship between related items of financial is thus, one number expressed in form of return on paid up capital the net profit of the business is dividend by the paid up share capital. The figure so obtain is the ratio. It the same is multiplied by 100 a percentage rate of return on paid up capital is obtained. EXPRESSION In the form of percentage In the form of proportion of the value In the form of number of times

 IMPORTANCE OF RATIO ANALYSIS:In application to studying the rupee amount shown in the financial statements, Relationships between different items may be established by computing various ratios. The relation between two related items of financial statement is known as Ratio. A ratio is thus, one number expressed in terms of other Ratios are particularly useful in comparing one years performance with other years, as well as one companys performance with anothers. In many cases the average ratios relating to companies in particular industries are available, and an individual companys ratio may be compared with such an average. Ratios help to make qualitative judgments depending upon the calculations made which arequantitative judgments. The ratio analysis involves comparison for a useful interpretation of the financial statements. A single ratio in itself does not indicate favorable or unfavorable condition. It should be compare with some standard. Standard of comparison may decided by the company or firm itself.

Importance:. (1) Efficiency: The turnover ratios are excellent guides to measure the efficiency of managers. E.g. the stock turnover will indicate how efficiently the sale is being made, the debtors turnover will indicate the efficiency of collection department and assets turnover shows the efficiency with which the assets are used in business. All such ratios related to sales present a good picture of the success or otherwise of the business.

(2) Inter firm comparison: The absolute ratios of a firm are not of much use, unless they are compared with similar ratios of other firms belonging to the same industry. This is inter-firm comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective measures. (3) Indicate Trend: The ratios of the last three to five years will indicate the trend in the respective fields. For example, the current ratios of a firm are lower than the industry average, but if the ratios of last five years show an improving trend, it is an encouraging trend. Reverse may also be true. A particular ratio of a company for one year may compare favorably with industry average but, of its trend shows a deteriorating position, if is not desirable. Only ratio analysis will provide this information. (4) Useful for Budgetary Control: Regular budgetary reports are prepared in a business where the system of budgetary control is in use. If various ratios are presented in these reports, if will give a fairly good idea about various aspect of financial position. (5) Useful for Decision making: Ratio guide the management in making some of the importation show an unsatisfactory position, the management may decide to get additional liquid funds. Even for capital expenditure decisions, the ratio of return on investment will guide the management can be judged on the basis and efficiency of each department can thus be determined.

Classification of accounting ratio

Profitability Ratio 1) Gross profit Ratio 2) Net profit Ratio 3) Operating Ratio 4) Return on capital Employed 5) Return on share holders fund 6) Return of equity share capital 7) Earnings per share 8) Dividend per share Activity Ratio 1) Debtors' turnover ratio 2) Debtors ratio 3) Creditors ratio 4) Fixed-assets turnover ratio 5) Total-assets turnover ratio 6) Stock turnover

 Liquidity Ratio 1) Current Ratio 2) Liquid Ratio

Leverage Ratio 1. Proprietary ratio 2. Long term funds to Fixed assets ratio

Interpretation through ratio

Profitability Ratios

{1} Gross Profit Ratio

It is the basic measure of profitability of business. This ratio measures the relationship between gross profit & net sales. It is also known as Gross Margin.

Objective:The main objective of computing this ratio is to determine the efficiency with which the production & or purchase operations are carried on.

Gross profit Gross profit ratio = -------------------Sales x 100

Particulars Gross Profit Sales

2008-09

2009-10

2010-11

16343.42 20051.77 15469.00 27043.69 32200.76 24084.14 62.27% 64.23%

G.P. Ratio (%) 60.43%

Gross Profit Ratio

65 64.23 64 63 62 61 60 59 58 2008-09 2009-10 2010-11 60.69

62.27

Interpretation:The fluctuation of Gross profit ratio is increasing and joying on in 200809 to 2010-11. Gross profit of the company in increases year to year. So we can say that companys position is good.

{2} Net Profit Ratio

This ratio measures the relationship between net profit & net sales. The reasonable ratio ensures adequate return to the owners and so it is of great significance to owners.

Objectives:The main objective of computing this ratio is to determine the overfull profitability due to various factors such as operational efficiency trading on equity, etc.

Net profit Net profit ratio = -------------------Sales x 100

Particulars Net Profit Sales N.P. Ratio (%)

2008-09 1957.15

2009-10

2010-11

2526.29 14934.25

27043.69 32200.76 24084.14 6.86 7.85 62.01

NET PROFIT RATIO

70 62 60 50 40 30 20 10 0 2008-09 2009-10 2010-11 6.86 7.85

Interpretation:In 2009-10 net profit is high as compare to 2008-09. In 2010-11 net profit increases as compare to others year. So we can say that profitability of the company has been increase. It may be good for the company.

{3) Operating Ratio

This ratio measures the relationship between total cost of goods sold, operating expense & net sales. It shows the overall operating efficiency of the business.

Objectives:The main objective of calculating this ratio is to determine the operational efficiency with which production and purchase and selling operations are carried on.

COGS + Operating Expenses Operating ratio = -------------------------------------- x 100 Sales

Particulars Operating Expense Net Sales

2008-09

2009-10

2010-11

20748.83 24358.66 18228.00 27043.69 32200.76 24084.14 75.65% 75.68%

Operating Ratio (%) 76.73%

Operating Ratio
77 76.8 76.6 76.4 76.2 76 75.8 75.6 75.4 75.2 75 2008-09 2009-10 2010-11 75.65 75.68 76.73

Interpretation:In 2008-09 expenses was the highest one as compare to other years. In the year 2009-10 the expense was lowest which affect profitability of the firm positively and helps to achieve profit maximisation objective. The higher the ratio the less will be the margins available to the proprietors so, it is good that the ratio has been decline year-to-year.

{4) Return on Capital Employed

This ratio measures a relationship between net profit before interest & tax and capital employed.

Objectives:The objective of this ratio is to measure the marginal efficiency of operating the business. It helps to find out the efficiency of the management.

EBIT Return on Capital Employed = --------------- x 100 Sales

Particulars EBIT Net Sales

2008-09 2522.66

2009-10 3665.42

2010-11 20040.68

35548.11 47828.56 67979.13 7.66% 29.48%

Return on Capital Employed (%) 7.10%

Return on Capital Employed Ratio

35 30 25 20 15 10 5 0 2008-09 2009-10 2010-11 7.1 7.66 29.48

Interpretation:It is the most important ratio forms the viewpoint of management because success of the enterprise is judge with the help of this ratio. The ratio in 2008-09 7.1% and in 2010-11 it was highest but in 2008-09 it was lowest. It is not good for the company and management of the company should take decision like decrease in capital employed or should try to increase profit.

{5} Earnings Per Share

This ratio measures a relationship between earnings available to an equity shareholder on a per share basis.

Objectives:The objective of calculating this ratio is to measure the profitability of the firm on per share basis.

N.P. Pref. Dividend Earnings Per Share= ---------------------------- x 100 No. of Equity Shares

Particulars

2008-09

2009-10

2010-11

N.P. After Pref. Dividend 185494000 252629000 1493425000 No. of Equity Shares Earnings per Share 156083563 156669800 156669800 1.19 1.61 9.53

Earnings Per Share (Rs.)

12 10 8 6 4 2 0 2008-09 2009-10 2007-08 1.19 1.61 9.53

Interpretation:The Earning per Share of the company refers to the earning to the ordinary share holders. The ratio in the year 2008-09 was the lowest and same of the year 2010-11 was the highest. The ratio has been decreased in 2008-09. It is not beneficial to shareholders because the less earning per share, the less dividends to shareholders.

{6) Return on Shareholders Funds

This ratio measures a relationship between net profit after interest & tax & shareholders fund.

Objectives:The objective of calculating this ratio is to find out how efficiently the funds supplied by the share holders have been used.

EAT Return on Shareholders Fund = -------------------------- x 100 Shareholders Fund

Particulars N.P. After Tax Shareholders Fund

2008-09 1854.94

2009-10 2526.29

2010-11 14934.25

30934.47 33489.15 49914.57 7.54% 29.92%

Return on Shareholders Fund 6.00%

Return on Shareholders fund

35 30 25 20 15 10 6 5 0 2008-09 2009-10 2010-11 7.54 29.92

Interpretation:The higher the ratio, the more beneficial to shareholder because it shows what amount of dividend has been given to shareholders. It indicates whether the return on proprietor funds is enough in relation to the risks that they undertake. In 2010-11 the percentage was higher as compare to 2008-09 and also 2009-10. The ratio was the lowest in the year 2008-09 which is not good for the business.

{7) Return on Equity Share Capital

This ratio measures a relationship between net profit after interest, tax, preference share, dividend & equity shareholders fund.

Objectives:The objective of calculating this ratio is to find out how efficiently the funds supplied by the equity share holders have been used.

EATPref. Dividend Return on Equity Share Capital = -------------------------- x 100 Shareholders Fund

Particulars N.P. After Tax Shareholders Fund

2008-09 1854.94

2009-10 2526.29

2010-11 14934.25

30934.47 33489.15 49914.57 7.54% 29.92%

Return on Shareholders Fund 6.00%

Return on Shareholders Fund

35 30 25 20 15 10 6 5 0 2008-09 2009-10 2010-11 7.54 29.94

Interpretation:The higher the ratio, the more beneficial to the shareholder because it shows the amount of dividend that given on share. It indicates whether the return on proprietor funds is enough in relation to the risks that they undertake. In 2010-11 the ratio was highest. The ratio has been decline little in the year 2008-09 which is not good for the company and its shareholders.

{8) Dividend Per Share

Dividend Per Share is the amount of actual dividend paid to equity shareholders divided by the number of equity shares outstanding.

Objectives:The objective of calculating this ratio is to find out the net distributed profit after interest, tax & preference share dividend belong to equity share holder.

Dividend Paid To Equity Dividend Per Share= ------------------------------- x 100 No. of Equity Shares

Particulars

2008-09

2009-10 31127000

2010-11 -

Dividend Paid To Equity 14085000 No. of Equity Shares

156083563 156669800 0.20 -

Dividend per Share (Rs.) 0.09

Dividend per Share (Rs.)

0.25 0.2 0.2

0.15 0.09

0.1

0.05

0 2008-09 2009-10

Interpretation:This ratio shows dividend paid to the equity shareholder of the company. But during the next year company does not paid to the dividend to the shareholders because company has to planning to the started new venture for their coming up project.

Activity Ratios

{1} Stock Turnover Ratio

This ratio establishes a relationship between cost of goods sold and average inventory (average stock).

Objective:The objective of computing this ratio is to determine the efficiency with which the inventory is utilized.

COGS Stock Turnover ratio = -------------------Average Stock

Particulars COGS Average Stock Stock Turnover Ratio (Times)

2008-09 10700.27 3405.85 3.14

2009-10 12148.99 3432.33 3.54

2010-11 8615.14 3943.26 2.19

Stock Turnover Ratio(Times)

4 3.54 3.5 3 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2010-11 2.19 3.14

Interpretation:This ratio is important to know the speed of turnover of inventories in a manufacturing concern. The higher the turnover, the more profitable the business would be. In 2009-10 the ratio was higher. In 2010-11 it was at the lowest level which is danger signal to the management.

{2) Fixed Assets Turnover Ratio

This ratio measures a relationship between net sales and fixed assets of the firm.

Objectives:The objective of calculating this ratio is to point out the efficiency of the firm in the use of fixed assets.

Net Sales Fixed Assets Turnover ratio = ------------------Fixed Assets

Particulars Fixed Assets Net Sales Fixed Assets Turnover Ratio(Times)

2008-09 10253.09 27043.69 2.64

2009-10 16223.55 32200.76 1.99

2010-11 19768.51 24084.14 1.22

Fixed Assets Turnover Ratio (Times)

3 2.64 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2010-11 1.99

1.22

Interpretation:This ratio shows the efficiency with which assets are being used in the company. The ratio of the year 2008-09 was higher than both other years. The ratio in the year 2010-11 was the lowest which shows fluctuation in efficiency of the company.

{3) Debtors Ratio

This ratio shows the number of days taken to collect the dues of credit sales. It shows the efficiency or otherwise of collection policy of enterprise.

Objective:The objective of computing this ratio is to determine the efficiency with which trade debtors are managed.

Debtors + Bills Receivable Debtors ratio = ------------------------------ x 365 Credit Sales

Particulars

2008-09

2009-10 5723.33

2010-11 9388.46

Debtors+ Bills Receivable 4192.85 Credit Sales Debtors Ratio(days)

27043.69 32200.76 24084.14 57 64 142

Dabtor's Ratio (Days)

160 142 140 120 100 80 60 40 20 0 2008-09 2009-10 2010-11 57 64

Interpretation:-

Generally, higher the ratio, the more unsatisfactory position it shows. It suggests that the credit and collection policy is weak. In the year 2010-11 the ratio was the highest and for the year 2008-09 was the lowest which may be in favour of the company.

{4) Debtors Turnover Ratio

This ratio establishes a relationship between net credit sales and average trade debtors.

Objectives:The objective of calculating this ratio is to determine the efficiency with which the trade debtors are managed and to know average collection period.

No. of Working Days Debtors Turnover Ratio = ---------------------------Debtors Ratio

Particulars No. of Working Days Debtors Ratio

2008-09 2009-10 2010-11 365 57 365 64 5.70 365 142 2.57

Debtors Turnover Ratio 6.40

Dabtors Turn Ratio

7 6 5 4 3 2 1 0 2008-09 2009-10 2010-11 2.57 6.4 5.7

Interpretation:Generally, the higher the ratio, the more the beneficial for the company. The ratio has decreased continuously from the year 2008-09 to the year 2010-11. In 2008-09 the ratio was higher than the other two years which shows deffective collection policy.

{5) Creditors Ratio

The Creditors Ratio gives us the number of days within which the amount due for credit Purchase is payment. Similarly the number of days within which we payment to our creditors for Credit Purchase is obtained from Creditors Velocity

Objectives:The objective of calculating this ratio is to determine the efficiency with which the creditors are managed.

Creditors + Bills Payable Creditors ratio = ------------------------------ x 365 Credit Purchase

Particulars

2008-09 2009-10 2010-11

Creditors+ Bills Receivable 2235.32 3197.05 4174.72 Credit Purchase Creditors Ratio(days) 7224.38 9231.86 4174.77 113 126 170

Creditor's Ratio (Days)

180 160 140 120 100 80 60 40 20 0 2008-09 2009-10 2010-11 113 126 170

Interpretation:This ratio shows the average payment to the creditors of the company. In the year 2008-09 the payment was made within 113 days which increase to 13 days in 2009-10 and it increases to 44 days in 2010-11 The ratio indicates that the company has not constant payment policy every year.

{6) Creditors Turnover

This ratio establishes a relationship between net credit purchase and average trade creditors.

Objectives:The objective behind computing this ratio is to determine an efficiency with which the trade creditors are managed.

No. of Working Days Creditors Turnover = ---------------------------Creditors Ratio

Particulars No. of Working Days Creditors Ratio

2008-09 2009-10 2010-11 365 113 365 126 2.90 365 170 2.15

Creditors Turnover Ratio 3.23

Creditors Turnover Ratio

3.5 3 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2010-11

Interpretation:The ratio has ups and down continuously from the year 2008-09 to the year 2010-11. This shows that the companys credit policy is not constant. In 2010-11 the ratio was lower than the other two years which shows that in the year 201011 creditors are paid faster than the other years.

{7) Total Assets Turnover

This ratio measures the overall performance or activities of the firm.

Objective:Objective behind calculating this ratio is to point out the efficiency or inefficiency in the use of total assets.

Net Sales Total Asses Turnover = ----------------total assets

Particulars Total Assets Net Sales

2008-09

2009-10

2010-11

40260.28 54969.43 78889.57 27043.69 32200.76 24084.14 0.59 0.31

Total Assets Turnover (Times) 0.67

Total Assets Turnover (Times)

0.8 0.7 0.6 0.5 0.4 0.31 0.3 0.2 0.1 0 2008-09 2009-10 2010-11 0.67 0.59

Interpretation:In the year 2008-09 the ratio was the highest. A lower ratio shows that the assets are lying idle. In the year 2010-11 the ratio was so low and was below the idle one (2:1). So company needs to improve utilisation capacity.

Liquidity Ratios

{1} Current Ratio

This ratio establishes a relationship between current assets and current liabilities.

Objectives:The objective of calculating this ratio is to measure the ability of the firm to meet its short term obligation.

Current Assets Current ratio = ----------------------Current Liabilities

Particulars Current Assets

2008-09

2009-10

2010-11

10667.18 12155.05 18078.49 5377.73 2.26:1 4627.65 3.91:1

Current Liabilities 2873.96 Current Ratio 3.71:1

Current Ratio
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2007-08 2.26 3.71 3.91

Interpretation:-

The Current Ratio shows the liquidity position of the company. In 201011 the ratio was higher than other years it may because of excessive or idle inventories or may be low sales. Ratio of the year 2009-10 was quite low and was below the idle ratio (2:1).

{2} Liquid Ratio This ratio establishes a relationship between quick assets and quick liabilities.

Objectives:The objective of calculating this ratio is to measure the ability of the firm to meet its short term obligations as and when they become due without relying upon stock.

Liquid Assets Liquid (Quick) ratio = ---------------------Liquid Liabilities

Particulars Liquid Assets

2008-09 2009-10 2010-11 5091.30 6170.48 10084.01

Liquid Liabilities 2873.96 5377.73 4627.65 Liquid Ratio 1.77:1 1.15:1 2.18:1

Liquid Ratio
2.5 2.18 2 1.77

1.5 1.15 1

0.5

0 2008-09 2006-07 2010-11

Interpretation:-

If the liquid assets are equal to or more than liquid liabilities, the condition may be considered as satisfaction. These data of the ratio indicate that the ratio in all the three years is satisfactory.

Leverage Ratios
{1} Proprietary Ratio This Ratio shows the proportion of proprietors Funds or Shareholders to the total assets of the business.

Objective:The objective of computing this ratio is to find out how the proprietors funds are utilised for purchasing the assets for business.

Proprietors Funds Proprietary Ratio= --------------------------- x 100 Total Assets

Particulars Proprietors Funds Total Assets

2008-09

2009-10

2010-11

30934.47 33489.15 49914.57 40260.28 54969.43 78889.57 60.92% 63.27%

Proprietary Ratio (%) 76.84%

Proprietory Ratio (%)

90 80 70 60 50 40 30 20 10 0 2008-09 2009-10 2010-11 Proprietory Ratio (%) 76.84 60.92 63.27

Interpretation:The higher the ratio, the stronger the financial position of the enterprise, as but here it shows that the proprietors have provided lager amount to purchase the assets. But The ratio is decreasing year-by-year which shows poor financial position of company.

{2) Long Term Funds to Fixed Assets

This ratio shows the relationship between fixed capital and fixed assets.

Objective:Objective behind computing this ratio is to know the proportion of fixed capital in fixed assets.

Long Term Fund Long Term Debts to Fixed Assets = ----------------------Fixed Assets

Particulars Long Term Fund Fixed Assets

2008-09

2009-10

2010-11

36202.58 48092.25 69399.12 10253.09 16223.55 19768.52 2.96:1 3.51:1

Fixed Capital to Fixed Assets 3.53:1

Fixed Capital to Fixed Assets Ratio

4 3.56 3.5 3 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2010-11 2.96 3.51

Interpretation:Fixed assets should be purchased from long terms funds only. If fixed assets are less as compare to long term funds which means fixed assets are not properly purchased. An ideal ratio is 1:1 and the ratio is more than that in all the three years which is positive part of the company.

Part 5 Common size statement

MEANING AND CONCEPT

The methods so far discussed do not provide any common base with which all items in statement can be compared. For this purpose common-size statements are prepared in which all items are compared with one common item, which is significant. For example, in the income statement or profit & loss account, sales may be taken as 100 and all other items in this statement are computed as percentage of sales. Similarly in case of balance sheet the relation of each item to total assets is computed. There are two types of common-size statement as under:

(1) (2) (1)

balance sheet as common-size statement common-size profit & loss account Balance sheet as common-size statement: In the balance sheet, total asset is taken as 100 and all are presented as percentage of total assets.

(2)

Common-size profit & loss account: In the common-size income statement, the sales as 100 and all individual items of expenses and incomes are shown as percentage of sales.

VERTICAL ANALYSIS
1.

2.

Vertical Analysis in other words we can say that it is Common size Statement analysis. Vertical analysis is the proportional expression of each item on a financial statement to the statement total. The result of vertical analysis are presented in the form of common size statement in which all the element within each statement are expressed as percentages of some common number and always add up to 100. Common size statement analysis helps in making comparison of companies that differ in size science financial statements are expressed in comparable common size format. Further, a comparison of common size statements for several years may reveal important changes in the components from one year to the next year.

Common size Balance Sheet

PARTICULARS
SOURCES OF FUNDS
SHARE HOLDER'S FUNDS 1. A. Equity Share Capital 2. Reserves & Surplus LOAN FUND Secured Loans Deferred Tax Liability CURRENT LIABILITIES 1.Current Liability 2.Provisions TOTAL SOURCES OF FUNDS 1560.84 29373.63 5268.11 726.74 2873.96 1111.47 40914.75 3.82 71.79 12.87 1.78 7.02 2.72 100 1566.70 31922.45 14603.10 766.79 5377.73 996.35 55233.12 2.84 57.80 26.44 1.39 9.74 1.80 100 1566.70 48347.87 19484.55 831.66 4627.65 5451.13 80309.56 1.95 60.20 24.26 1.04 5.76 6.79 100 2005-06 2006-07 (%) 2007-08 2005-06 (%) 2006-07 2007-08 (%)

APPLICATION OF FUNDS
FIXED ASSETS INVESTMENTS CURRENT ASSETS & LOANS 1. Inventories 2. Sundry Debtors 3. Cash & Bank Balance 4. Other Current Assets 5. Loans & Advances Miscellanies expenses TOTAL APPLICATION OF FUNDS 10253.09 12975.20 5575.88 4192.85 898.45 58.46 6306.35 654.47 40914.75 25.06 31.71 13.63 10.25 2.20 0.14 15.41 1.60 100 16223.55 13236.57 5984.57 5723.33 447.15 53.74 13300.52 263.69 55233.12 29.37 23.97 10.84 10.36 0.80 0.10 24.08 0.48 100 19768.51 18336.57 7994.48 9388.46 695.55 108.32 22597.68 1419.99 80309.56 24.62 22.83 9.95 11.69 0.87 0.13 28.14 1.77 100

Interpretation
Total of current assets shows an increasing trend constantly. This is good for the company. In current liabilities it shows an increasing trend. Common Size percentages also show an increasing trend. Shareholders Funds is increasing every year. There is a high fluctuation in shareholders funds.

Common size Profit & Loss A/c

PARTICULARS

2008-09 Rs. In lacks

2009-10 Rs. In lacks

2010-11 Rs. In lacks

200809

200910

201011

(%) Sales COGS Gross Profit +Other income Payment for Employees Administrative & Selling Expx. Written off miscellaneous Depreciation P.B.I.T. Interest Tax Differed Tax Net Profit (419.19) 2522.26 (290.18) (275.33) (102.21) 1854.94 (513.53) 3665.42 (674.35) (421.02) (44.76) 2526.29 (542.52) (1.55) (357.30) (264.31) (260.81) (1.32) 27043.69 32200.76 24084.14 100

(%) 100

(%) 100

(10700.27) (12148.99) (8615.14) (39.27) (37.73) (35.77) 16343.42 354.48 (3350.19) 20051.77 627.58 (4026.42) 15469.00 60.43 17992.88 1.31 62.27 1.95 64.23 74.71

(3005.01) (12.39) (12.50) (12.48)

(10048.56) (12209.67) (9612.86) (33.76) (37.92) (39.91)

(0.82)

(1.08)

(1.60) 11.38 (2.09) (1.32) (0.14) 7.85

(2.25) 83.24 (3.26) (17.94) 62.01

20048.68 9.32 (785.11) (1.07)

(4321.32) (1.02) (0.38)

14934.25 6.86

Interpretation 1.
Looking form the view point of expenditure, management expenses are increasing at a higher rate. 2. The Profit After Tax is also shows an increasing trend as per common size percentages. 3. In Profit available for appropriation in 2005-06 i.e. disposable profit is more than last two years which shows more satisfactory position in that year than other two years.

Part 6 Comparative statement

Part 7 Analysis & significant accounting policies

Principles of Consolidation
The consolidated financial statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the parent companys separate financial statements unless stated otherwise.

Accounting policies Fixed Assets and Depreciation

Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any directly & indirectly attributable expense of bringing the asset to its working condition for its intended use including expenses on startup,commissioning, trial run and experimental production. Any income generated during project implementation is reduced from project cost.

Development and stability test expenses account for Product development cost shown as intangible assets. Relevant assets are amortized over a period of 10 years on straight-line basis commencing from the year of completion of

development including stability test. In addition to amortization, product development costs are subjected to periodic review for test of impairment as required under AS-26 issued by ICAI. Intangible Fixed assets also include Product right, which is amortized over a period of 10 years.

Investment Investments of long-term nature are entirely strategically held and carried at cost. Provision will be made against diminution, if any, of ermanent nature in carrying cost of investment. Current investments are held at lower of cost and market value.

Inventories Stocks are valued at lower of cost or net realizable value. Cost is determined as follows: Raw materials, Packing materials, stores & Spares At cost computed on weighted average Basis Work-in-process At cost of input plus overhead upto the stage of completion. Finished goods At cost of input plus appropriate overhead.

Recognition of Income and expenses

 Sales and purchases are accounted for on the basis of passing of title to the goods. Sales comprise of sale price of goods including excise duty but exclude trade discount, VAT and sales tax. Exports subsidy is accounted for on the basis of. receipt of licence. Exports Sales are accounted for on the basis of date of bill of lading. All items of incomes and expenses have been accounted for on accrual basis.

Income Tax and Deferred Tax The liability of Company is estimated considering the provisions of the Income Tax Act, 1961. Deferred tax is recognized subject to the consideration of prudence, on time differences being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods in due cognizance of AS-22, issued by ICAI.

Contingent Liabilities Disputed liabilities and claims against the company including claims raised by fiscal authorities are provided in accounts unless no reliable estimate can be made of the amount of obligation or possibility of future cash flow is remote. Otherwise the same is disclosed by way of notes to accounts. Foreign Currency Translation In respect of foreign branches/offices, revenue items have been converted at the simple average of monthly exchange rates prevailing during the year. Fixed assets have been converted at the rates prevailing on dates of purchase overseas assets & outside liabilities other than fixed assets are converted at the year-end exchange rate. Exchange gain or loss arising out of above is charged to Profit & Loss Account.

 Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to Profit and Loss Account. Impact of exchange fluctuation is separately disclosed in notes to accounts. premium account. Miscellaneous Expenditure Deferred Employee Compensation under ESOP is being amortized on straight-line basis over vesting period. Share issue expenses are being amortised over a period of five years from the year in which expenses are incurred.

Part 8 Cash Flow

A Cash Flow Statement provides information that enables users to evaluate the changes in the assets of an enterprise, its financial structure and its ability to affect the amounts and timing of cash flows in order to adopt to changing circumstances. The Cash Flow Statement should report cash flows during the period classified by operating, investing and financial activities. Cash Flow Statement is concerned only with the change in cash and Fund Flow Statement is concerned with Changes in working capital.

CASH FLOW STATEMENT

(In lacs) Particulars A) Cash Flow From Operating Activities: Net Profit Non-Monetary Transactions: Add:- Depreciation Interest Written off miscellanies expenses Loss on sale on assets Profit on sale on assets OPRATING PROFIT Change in working capital Add:- Increase in trade pay able 2008-09 2009-10 2010-11

2232.48 419.19 290.18 357.30 0.47 3299.62 264.21

2991.07 513.53 674.35 264.31 (4.11) 4439.15 919.80

2988.58 542352 785.71 260.81 (2.60) 4575.02 1061.52

Decrease in inventory Less:- Increase in inventory Increase debtors Increase in other current assets

218.19 -

(408.69) (2009.90)

(4831.53) (6643.64) (5342.16)

B)

Cash Generated From Operating Activities Less:-Income Tax Paid Interest paid Net Cash Generated From Operating Activities Cash Flow From Investment Activities: Add:- Sale of fixed assets Received of extra ordinary items Advance for sale of none once formulation business Less:-Purchases of fixed assets Purchases of investment Net Cash Generated From Investing Activities Cash Flow From Financing Activities: Add:-Issue of share capital Capital reserve Receive of long term liability Receive of S.T.L. Less:-Payment of long term liability Share issue expense Payment of dividend Payment of dividend tax Cash Generated From Financing Activities Net Increase in Cash & Cash Equivalents Cash & Cash Equivalents at The End of

(1803.58) (3223.86) (5380.65) (276.68) (446.74) (317.40) (291.14) (674.35) (785.71) (2371.40) (4344.95) (6483.76)

14.70 -

54.89 156.16 - 11035.65 1500.00 -

(3435.99) (6534.78) (4241.09) (350.00) (261.37) (5100.00) (6142.69) (9586.21) (4633.04)

C)

6640.74 764.42 (360.73) (230.07) (140.85) (18.77) 512.05 386.40 898.45

5.86 150.00 9335.00 (312.17) (43.78) (451.30) 898.45 447.15

4881.44 248.40 447.15 695.55

Year

CASH FLOW STATEMENT ANALYSIS:Cash flow statement is divided into three major parts.

1. Cash inflow or out flow from operating activities:In the year 2011 the cash flow from operating activities is highest, so, we can say that cash inflow of the company is high in last in one years.

2. Cash inflow or out flow from investing activities:The cash flow from these activities is increased from year to year. That means the company has invested more money in investment in compare to last year. It is good for company because through investments company may earn more interest.

3. Cash flow from financing activities:Cash flow from financing activities in the year 2009-10 has decline in compare to the year 2010-11.

Part 9 CONCLUSION
As per this finance report I conclude that the company is doing excellent work, I am very thankful to get a project of PARRYS SUGAR INDUSTERIS LTD and definitely prove benefits this projects. From the analysis of three years published data of parrys sugar Limited. I found that it is professionally well-managed and one of leading Indian company. It has enough experience of business. When I read the annual report of three years of the company and after analysis the figures of three years I found that financial position of the company is very good. So we can conclude that company will have lots of opportunities in future to become the worlds largest integrated sugarcane producer.

Part 10 BIBLIOGRAPHY
Annual report of parrys sugar industries ltd. Annual report of 2009-10 Annual report of 2010-11 BOOKS: Financial management B.S. Shah (S.Y.B.B.A) Financial management - M.Y. Khan & P.K. Jain Web sites www.parryssugarindustriesltd.com