SUMMER TRAINING PROJECT REPORT ON FINANCIAL ANALYSIS OF BAJAJ HINDUSTHAN LIMITED SUBMITTED BY NEETHU PILLAI 01119201709 STUDENT OF LINGAYAS

LALITA DEVI INSTITUTE OF MANAGEMENT & SCIENCES MANDI ROAD,NEW DELHI-110047

FOR THE PARTIAL FULFILLMENT OF BACHELOR OF BUSINESS MANAGEMENT UNDER THE SUBMISSION OF Dr.Rakesh kumar gupta SUBMITTED TO

GURU UNIVERSITY

GOBIND SINGH INDRAPRASTHA DELHI,INDIA

CERTIFICATE

Certified that this project report FINANCIAL ANALYSIS OF BAJAJ HINDUSTHAN LIMITED is the bonafide work of NEETHU PILLAI who carried out the project work under the supervision of Mr Bhuwan Ganglasya (Asst. Manager) Signature HEAD OF THE DEPARTMENT (DR RAKESH KUMAR GUPTA) BBA

Lingayas lalita devi institute of management and sciences Mandi road , new delhi

DECLARATION
I hereby declare that the project work entitled FINANCIAL ANALYSIS OF BAJAJ HINDUSTHAN LIMITED submitted to the GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY,DELHI is a record of an original work done by me under the guidance of. Mr Bhuwan Ganglasya (Asst. Manager Faculty Member), LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT AND SCIENCES,MANDI ROAD,NEW DELHI and this project work has not performed the basis for the award of any Degree to the best of my knowledge. NEETHU PILLAI, O1119201709 SIGNATURE OF STUDENT

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me during the writing of this report. My deepest thanks to Lecturer, MS GAYATRI (the Guide of the project for guiding) for correcting various documents of mine with attention and care. She has taken pain to go through the project and make necessary correction as and when needed. I express my thanks to the HOD of BBA for extending his support. Thanks and appreciation to MS GAYATRI for her support. I would also like to thank my Institute and my faculty members without whom this project would have been a distant reality.

PREFACE
In this report Summer training is an integral part of the BBA program. Each student is required to undergo research with any topic after 4th semester. As complementary to that, every student has to prepare & submit a report on the research work conducted by the student. I had privilege to do project with an objective related to the corporate world. The present report is entirely an outcome of internal records of the company. This report is at continuation of the above tradition.

CONTENT CHAPTER 1 2. 3 4 TITLE Certificate Declaration Acknowledgement Introduction 4.1 financial analysis 4.1.1 goals 4.1.2 methods 4.2 bajaj hindusthan ltd 4.2.1 company history 4.2.2 vision & mission 4.2.3 board of directors 4.2.4 milestones 4.2.5 products 4.2.6 financial results 4.2.7 dividends 4.2.8 operations 4.2.9 expansion of power capacity 4.2.10 subsidiaries operations 4.2.11 name of entities 4.2.12 plant locations 5 6 Objectives Research methodology types of research 1.1 data collection methods presentation and analysis .financial analysis & operations of company 1.1 results of operations 1.2 turnover 1.3 analysis of sales 1.4 other income 1.5 other expenses 1.6 ebidta 1.7 interest & finance charges 1.8 depreciation & amortization 1.9 provision for tax 1.10 balance sheet 1.11 capital 1.12 equity share susupense 1.13 reserves & surplus 6 the PAGE NO.

1.14 loan funds 1.15 fixed assets 1.16 investments 1.17 inventories 1.18 debtors 1.19 significant non-recurring income,expenditure and other items 1.20 division-wise operations 1.21 distillery division 1.22 power division 8 9 10 11 12 limitations Findings and suggestions Conclusions and recommendations Bibliography LIST OF TABLES Table1:financial results Table2:result of operations Table3:balance sheet Table4:balance sheet Table5:profit and loss account Table6:cash flow statement Table7:consolidated balance sheet Table8:consolidated profit &loss account Table9:consoloidated cash flow statement

EXECUTIVE SUMMARY The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance. In this project I have done the finanacial analysis of bajaj hindusthan limited. The Bajaj Group came into existence during the turmoil and the heady euphoria of India's freedom struggle. Late Shri Jamnalal Bajaj ji, founder of the Bajaj Group, was a confidante and disciple of Mahatma Gandhi and was deeply involved in the effort for freedom. Kamalnayan, the eldest son of Jamnalal Bajaj, succeeded his father in 1942, at the age of twenty-seven. Putting the nation before business, he devoted himself to the later only after India achieved independence in 1947. But when he did so, he put his heart and soul into it. Within a short while, he not only consolidated the Bajaj Group, but also diversified into various manufacturing activities elevating the Bajaj Group to the status it enjoys till this day. Bajaj Hindusthan was established in 1931. since then it has been weaving a success story as Indias number one intergrated Sugar Company with Sugar, Industrial Alcohol (including ethanol) and Power as its key products. The Company has fourteen sugar mills [including four of its 75% subsidiary Bajaj Hindusthan Sugar and Industries Ltd. (BHSIL)] with distilleries at six locations (including one of BHSIL) and bagasse-based power generation plants at all the locations, spread across the length and breadth of UP, the largest sugar producing state in India. The Company has a strong track record of profitability have declared dividend in 73 out of BHLs 76 years of existence. It has nurtured a tradition of strong relationships with farmers for mutual benefit and they are very much a part of our family. We have forayed into a relatively value-additive business. In this project report we have given the complete financial analysis of the company.

INTRODUCTION
Before giving explanations about the financial analysis about the company it is

necessary to explain about what is financial analysis. The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance. 1 . FINANCIAL ANALYSIS Financial Analysis refers to the assessment of a business to deal with the planning, budgeting, monitoring, forecasting, and improving of all financial details within an organizational performance. Financial referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or analysis (also project). It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.

Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its Issue stocks or negotiate for a bank loan to increase its working capital Make decisions regarding investing or lending capital; Other decisions that allow management to make an informed selection on various

goods;

alternatives in the conduct of its business. 9

1.1 GOALS Financial analysts often assess the firm's: 1.1.1. Profitability -its ability to earn income and sustain growth in both short-term and long-term. A company's degree of profitability is usually based on the income statement which reports on the company's results of operations; 1.1.2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term; 1.1.3. Liquidity - its ability to maintain positive cash flow while satisfying immediate obligations; Both 1.1.2 and 1.1.3 are based on the company's balance sheet, which indicates the financial condition of a business as of a given point in time. 1.1.4. Stability- the firm's ability to remain in business in the long run, without having to sustain significant losses in the conduct of its business. Assessing a company's stability requires the use of both the income statement and the balance sheet, as well as other financial and non-financial indicators. 1.2 METHODS Financial analysts often compare financial ratios (of solvency, profitability, growth, etc.): 1.2.1 1.2.2 Past Performance - Across historical time periods for the same firm (the last 5 years for example) Future Performance - Using historical figures and certain mathematical and statistical techniques, including present and future values, This extrapolation method is the main source of errors in financial analysis as past statistics can be poor predictors of future prospects. 1.2.3 Comparative Performance - Comparison between similar firms.

These ratios are calculated by dividing a (group of) account balance(s), taken from the balance sheet and / or the income statement, by another, for example : Net income / equity = return on equity(ROE)

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Net income / total assets = return on assets (ROA) Stock price / earnings per share = P/E ratio Comparing financial ratios is merely one way of conducting financial analysis. Financial ratios face several theoretical challenges:

They say little about the firm's prospects in an absolute sense.

Their insights about relative performance require a reference point from other time periods or similar firms.

One ratio holds little meaning. As indicators, ratios can be

logically interpreted in at least two ways. One can partially overcome this problem by combining several related ratios to paint a more comprehensive picture of the firm's performance.

Seasonal factors may prevent year-end values from being

representative. A ratio's values may be distorted as account balances change from the beginning to the end of an accounting period. Use average values for such accounts whenever possible.

Financial ratios are no more objective than the accounting methods

employed. Changes in accounting policies or choices can yield drastically different ratio values. Financial analysts can also use percentage analysis which involves reducing a series of figures as a percentage of some base amount.For example, a group of items can be expressed as a percentage of net income. When proportionate changes in the same figure over a given time period expressed as a percentage is known as horizontal analysis.Vertical or common-size analysis, reduces all items on a statement to a common size as a percentage of some base value which assists in comparability with other companies of different sizes.As a result, all Income Statement items are divided by Sales, and all Balance Sheet items are divided by Total Assets. Another method is comparative analysis. This provides a better way to determine trends. Comparative analysis presents the same information for

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two or more time periods and is presented side-by-side to allow for easy analysis. Most businesses produce annual and monthly financial statements and comply with record-keeping requirements, yet financial statement analysis is often overlooked or not performed on a systematic and timely basis so as to obtain insight into the financial performance of the business. Other businesses seek to interpret and assess their financial statements yet lack the tools to do so. To assist decision makers, analysis-one provides a structured framework of financial analysis tools to analyse financial statements and deliver actionable insight from the business intelligence contained within. Financial ratio analysis is employed for Income Statement Analysis and Balance Sheet Analysis and is incorporated in the Financial Scorecard Tool, to provide a unique picture of a company's financial position. Key financial ratios measured by analysis-one represent standard performance measures used by the accounting profession on a daily basis, and seek to analyze the income statement and balance sheet from a variety of financial performance perspectives, which include - Profitability, Liquidity, Efficiency, Asset Usage and Gearing. Financial analysis tools within analysis-one, include: Financial Ratio Analysis, Breakeven Analysis, Cash Flow Analysis, Forecasting, Variance Analysis and Sensitivity Analysis. Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. When computing financial ratios and when doing other financial statement analysis always keep in mind that the financial statements reflect the accounting principles. This means assets are generally not reported at their current value. It is also likely that many

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brand names and unique product lines will not be included among the assets reported on the balance sheet, even though they may be the most valuable of all the items owned by a company. These examples are signals that financial ratios and financial statement analysis have limitations. It is also important to realize that an impressive financial ratio in one industry might be viewed as less than impressive in a different industry. Our explanation of financial ratios and financial statement analysis is organized as follows:

Balance Sheet
o o o

General discussion Common-size balance sheet Financial ratios based on the balance sheet General discussion Common-size income statement Financial ratios based on the income statement

Income Statement
o o o

Statement of Cash Flows

The balance sheet reports a company's assets, liabilities, and stockholders' equity as of a specific date, such as December 31, 2010, September 28, 2010, etc. The accountants' cost principle and the monetary unit assumption will limit the assets reported on the balance sheet. Assets will be reported (1) only if they were acquired in a transaction, and (2)generally at an amount that is not greater than the asset's cost at the time of the transaction. This means that a company's creative and effective management team will not be listed as an asset. Similarly, a company's outstanding reputation, its unique product lines, and brand names developed within the company will not be reported on the balance sheet. As 13

you may surmise, these items are often the most valuable of all the things owned by the company. (Brand names purchased from another company will be recorded in the company's accounting records at their cost.) The accountants' matching principle will result in assets such as buildings, equipment, furnishings, fixtures, vehicles, etc. being reported at amounts less than cost. The reason is these assets are depreciated. Depreciation reduces an asset's book value each year and the amount of the reduction is reported as Depreciation Expense on the income statement. While depreciation is reducing the book value of certain assets over their useful lives, the current value (or fair market value) of these assets may actually be increasing. (It is also possible that the current value of some assetssuch as computersmay be decreasing faster than the book value.) Current assets such as Cash, Accounts Receivable, Inventory, Supplies, Prepaid Insurance, etc. usually have current values that are close to the amounts reported on the balance sheet. Current liabilities such as Notes Payable (due within one year), Accounts Payable, Wages Payable, Interest Payable, Unearned Revenues, etc. are also likely to have current values that are close to the amounts reported on the balance sheet. Long-term liabilities such as Notes Payable (not due within one year) or Bonds Payable (not maturing within one year) will often have current values that differ from the amounts reported on the balance sheet. Stockholders' equity is the book value of the company. It is the difference between the reported amount of assets and the reported amount of liabilities. For the reasons mentioned above, the reported amount of stockholders' equity will therefore be different from the current or market value of the company.

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By definition the current assets and current liabilities are "turning over" at least once per year. As a result, the reported amounts are likely to be similar to their current value. The long-term assets and long-term liabilities are not "turning over" often. Therefore, the amounts reported for long-term assets and long-term liabilities will likely be different from the current value of those items.

2. BAJAJ HINDUSTHAN LIMITED 2.1 Company history Bajaj Hindusthan Limited (BHL) was incorporated on 23rd November, 1931 under the name - The Hindusthan Sugar Mills Limited on the initiative of Jamnalal Bajaj - a businessman, confidante, disciple and adopted son of Mahatma Gandhi. He sought Gandhiji's blessings in this new venture, which, apart from being a sound commercial proposition would also meet a national need. Till then, there were barely thirty sugar factories in the country. The site selected for the first plant was at Golagokarannath, district Lakhimpur Kheri in the Terai region of Uttar Pradesh (UP), an area rich in sugar cane. The original capacity of the factory was 400 tons of cane crushed per day (tcd). Subsequently, this capacity was increased in stages and is currently 13,000 tcd. The distillery Unit at this plant commenced production during the end of World War II in 1944. In the initial few years, the major output was in the form of power alcohol as an additive to petrol, which was then in short supply. The unit was the first to supply alcohol-mixed petrol to the army. In 1967, a new Company - Sharda Sugar & Industries Limited - was established as a subsidiary of Hindusthan Sugar Mills Limited. Under this new subsidiary, a sugar plant with a cane crushing capacity of 1400 tcd was set up in 1972 at Palia Kalan, a large cane supplying centre at a distance of about 70 kilometres from Golagokarannath. The objective of this new Unit was primarily to help the cane growers of the area supply their

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produce to the new location closer to their fields, thereby cutting down on transportation costs. The capacity was subsequently increased in stages to reach the present 11,000 tcd. In the year 1988, The Hindusthan Sugar Mills Limited was renamed as Bajaj Hindusthan Limited and shortly thereafter in 1990, Sharda Sugar & Industries Limited was amalgamated with Bajaj Hindusthan Limited. The Company embarked on an aggressive Greenfield expansion drive in 2003-2007, starting with a plant at Kinauni, near Meerut (UP), which was completed in a record time of just seven months as against the industry norm of 18-24 months. This facility commenced commercial production in November 2004. At the end of the expansion project in 2007, BHL had ten sugar manufacturing locations across UP with a cane crushing capacity of 96,000 tcd and was also the countrys largest ethanol producer with an output of 480 KL/ day. In an acquisition move, the Company took over the Pratappur Sugar and Industries Limited (PSIL), district Deoria, Eastern UP in December 2005. This Plant, in operation since 1903, had a crushing capacity of 3,200 tcd, which was increased to 6,000 tcd in the subsequent sugar season 2006-07. PSIL was subsequently renamed Bajaj Hindusthan Sugar and Industries Limited (BHSIL) and became a subsidiary of BHL. This acquisition provided BHL a strategic foothold in the sugar-deficient region of Eastern UP and reaffirmed the consolidation that took place in the sugar industry. BHSIL embarked upon significant new expansions. While the capacity of its existing sugar plant at Pratappur was enhanced, three new sugar units were also set up in virgin, cane-rich areas of East UP at Rudauli (district Basti), Kundarkhi (district Gonda) and in Utraula (district Balrampur). BHSIL then, had a crushing capacity of 40,000 tcd and a distillery with the capacity to manufacture 160 kilo-litre per day of ethanol. The total industrial alcohol/ ethanol capacity of the Company, including its subsidiary, was 800 KL/ day.

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With the commissioning of three bagasse-based power co-generation plants at Kundarkhi, Rudauli and Utraula, BHSIL had an aggregate power generation capacity of 95.8 MW. Combined with the power generation capacity of 325 MW from BHL, the Companys total generation capacity is 420.8 MW. After meeting its own energy needs, the Company has a surplus of 90 MW. It supplies a significant part of this surplus power to the UP state grid. In December 2010, BHSIL was amalgamated with BHL The Companys growth initiative has been led by a strategic focus of attaining global scales of manufacturing and cost competitiveness. Such benchmarking provides BHL advantages of cost and higher domestic market share where demand is expected to outstrip supply for the next few years. BHL is in a unique position. While its planning and processes are benchmarked against global practices, its activities are directed at contributing to the Indian rural economy at a local, grassroots level, primarily in the uplifting of the farmers. The Company embarked on an expansion, the scales of which are unprecedented worldwide, providing tremendous opportunities of employment, infrastructure and community development and contributing to the growth of the rural economy of UP.

2.2 Mission and vision Mission To be the leader in our chosen business area, create an organisation that all our constituents are proud to be associated with, set benchmarks that will become the standard for others to emulate and through ethical business practices create wealth for our stakeholders. vision

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To transform bajaj hindusthan ltd. into a dynamic and vibrant business entity where growth is an ethos and the long-term value creation for our stakeholders is the paramount objective.

2.3 Board of directors Mr. Shishir Bajaj, Chairman & Managing Director

Mr. Shishir Bajaj, Chairman & Managing Director of the Company, belongs to the promoter - Bajaj Group. After completing his MBA from New York University majoring in finance, Mr. Bajaj joined the Company in 1974 and since then has been been shouldering the overall responsibility of the Company. He is holding the position of Managing Director of the Company since July 1988. Mr. Kushagra Nayan Bajaj, Vice Chairman and Joint Managing Director Mr. Kushagra Nayan Bajaj is the Jt. Managing Director of the Company. A Bachelor of Science in Economics, Political Philosophy and Finance from the Carnegie Mellon University, Pittsburgh, USA, he earned his Master of Science in Marketing from the Northwestern University, Chicago, USA. Mr. Bajaj was Chief Executive of the Company between August 2001 and April 2007, responsible for overall operations. Mr. D.S. Mehta Mr. D S Mehta has been on the Board of Bajaj Hindusthan Ltd since January 1986. He holds directorship in various other Bajaj group companies. He graduated with an honours degree in commerce from Mumbai University and he is an alumnus of Sydenham

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College. He is a fellow member of both the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He has been associated with the Bajaj group of companies since 1966 and has more than 30 years experience in corporate law, taxation, finance and investment.

Mr. M.L. Apte Mr. M.L. Apte, an industrialist having interest in sugar business is associated with Bajaj Hindusthan Ltd. as Director for over 33 years. A former Sheriff of Mumbai, he was also a former President of Maharashtra Chamber of Commerce, Bombay Chamber of Commerce, Cricket Club of India, Indian Sugar Mills Association, Member of the Indian Cotton Mills Federation and former Chairman of the Textiles Committee. He is currently the Chairman of the Apte Group of Companies and a Director of Grasim Industries Ltd. and Tata Asset Management Pvt. Ltd. Mr. Ravindrakumar V. Ruia Mr. Ravindrakumar V Ruia is the Executive Director of the Dawn Mills Company Limited and is actively associated with the day-today affairs of Dawn Apparels Limited, subsidiary of the Dawn Mills Co. Ltd. as its Director. Mr. Ruia joined the Board of Bajaj Hindusthan Ltd. in April 2001. He is also a Director of Special Paints Ltd., Sigma Paints (Karnataka) Ltd. apart from various other Ruia group companies. He is also Committee Member of The Bombay Mill owners' Association, Indian Cotton Mills Federation and Bombay Textile Research Association and is associated with various public charity trusts as Trustee.

Mr. D. K. Shukla

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Mr. Dinesh Kumar Shukla, is a B. A. and M. S. W. He retired as an Executive Director (Personnel) in February, 2003 from Life Insurance Corporation of India (LIC). During his tenure with LIC, he occupied positions like Regional Manager - Marketing, Group Pension and Superannuation Schemes of LIC at Kolkata (Eastern Zone) as well as Incharge of 3 LIC divisions viz. Raipur, Jabalpur and Bhopal. Mr. Shukla has been associated with the company as nominee of LIC since October, 2001 and also as a member of the Audit Committee. After withdrawal of his nomination by LIC in November, 2008, Mr. Shukla has been re-inducted as a director of the Company in December, 2008. Mr. Alok Krishna Agarwal Mr. Alok Krishna Agarwal has been a member of Board of Directors of Bajaj Hindusthan Limited since April 2007. He is the founder managing partner of Juris Consultus, New Delhi. He was admitted to the Bar Council of India in 1988. He is an associate member of the Bar Council of Delhi, the Supreme Court Bar Association, the International Bar Association, the Indo American Chamber of Commerce and Federation of Indian Chambers of Commerce and Industry. Dr. Sanjeev Kumar, Director (Corporate and Legal Affairs) Dr. Sanjeev Kumar, Director (Corporate and Legal Affairs) has been a member of Bajaj Hindusthan Limited since March 2009. He was formerly the Group President of corporate and legal of the Company since June 2004. He obtained a Masters in Commerce in 1979, a Doctorate in 1996, an LL.B. in 2001, a Diploma in intellectual property rights laws in 2001 and a Diploma in Literature. In addition, Dr. Sanjeev Kumar has been a Cost Accountant since 1981 and a Company Secretary since 1982. Dr. Sanjeev Kumar has approximately 26 years of professional experience. 2.4 Milestones 2001 onwards

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New 7,000 TCD plant near Meerut commenced operations in November 2004. First unit to crush 20 million quintals of cane during the drought year 2002-03. Achieved record profit of Rs. 283.51 million in FY 2003. Turnover up by 25% (on annualised basis). Production up by 25%. Crushing of sugar cane up by 26%. GOI changes the free to levy sugar sale ratio from 70:30 to 85:15. 1991-2000

LOI received to increase cane capacity to 10,000 MT per day for Gola unit Construction Board Ltd. amalgamated with bajaj hindusthan ltd. Palia capacity increased to 5,000 TCD The cement plant is sold to J K Udaipur Udyog Ltd. for Rs. 1475 million Board of directors decide to dispose of the cement unit.

1981-1990

Company applies for a license to increase capacity from 4,800 TCD to 10,000 Complete decontrol of cement effective March 1, 1989 Sharda Sugar & Ind. Ltd. receives LOI to expand its capacity from 1,400 TCD to The company changes its name to bajaj hindusthan ltd. Capacity of cement plant increased from 4 to 6 million tons per annum Bonus shares issued of Rs. 1.12 million in the ratio of 4:1 Expansion of Gola plant from 3,600 to 4,800 tons completed Golden jubilee year Sharda Sugar & Ind. Ltd. amalgamated with bajaj hindusthan ltd.

TCD

5,000 TCD.

2.5 Corporate social responsibility.. Looking beyond balance sheets..

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2.5.1 Bajaj school at maqsoodapur

The CSR philosophy of Bajaj Hindusthan is driven by the consistent and unflinching commitment of the Companys businesses to function ethically and to contribute to the economic and social development of the community it operates in. This improves the quality of life of the workforce and employees families as well as that of the local population, including sugarcane growers, and the society in general. It also contributes to enhance the qualify of the physical environment. BHLs establishment of the Bajaj Public school at its Maqsoodapur (district Shahjahanpur) manufacturing Unit in UP is in pursuit of this philosophy, Bajaj Hindusthan has plans to impart high quality education at an affordable cost to the children of its employees and its cane growers, members of the local community and society at large through this School. 2.5.2 Bajaj hindusthans CSR initiatives win CIIs national award

As part of its Corporate Social Responsibility initiative, Bajaj Hindusthan Ltd. is working hard at the grassroots level towards the development of natural and human resources and their efficient and judicious use. Under the related activities, the company has initiated 22

and integrated community development programs for stressed farmers in the suicideprone zone of Wardha district in the Vidarbha region, focusing particularly on water harvesting and its efficient utilization. Under the integrated water resources development programme, BHL constructs Check Dams, Percolation Tanks and Ponds/ Farm Ponds, besides working on the revival of rivers through the dredging and widening of river beds, bori bandhs, inter-linking of water bodies through link water channels/ canals, wells and bore wells, recharging through rain water, gabion structures and farm bunds, etc. Along with water harvesting measures, the company is equally emphatic on the efficient use of water in the agriculture sector. It promotes micro irrigation systems like drip and sprinkler irrigation systems, horticulture plantation, dairy farming and less waterintensive short duration cash crops. Dedicated efforts have seen us reach 101 villages of Wardha district and consequently, 8380 acres of agricultural land and 4473 farmers have directly benefitted. All these programs are being planned and implemented through an experienced professional team under the Kamalnayan Jamnalal Bajaj Foundation based at Wardha. Appreciating BHLs efforts, NABARD has now joined hands with us for the promotion of horticulture (Wadi Project) and the Confederation of Indian Industries (CII) too has recognized our water harvesting efforts. BHL has won the CIIs National Award for Excellence in Water Management 2010 in the category Excellent Water Efficient Unit Beyond the Fence 2010. 2.6 Products 2.6.1 From sugarcane to sugar crystals- the process of making sugar Sugarcane, is broadly classified into three varieties early, general and unapproved. Cane is sowed during February and October every year. The first seed growth is known as the plant and subsequent growth after harvesting from the stem is known as Ratoon. The early variety has more sugar content than the general variety.

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Every farmer within the command area of the Mill is provided with a calendar, which tells him when he can expect a Mill Supply Ticket (Purchy), against which he will deliver the sugarcane. He then harvests the cane and transports it either in a bullock cart or tractor trolley to the mill. Cane is also bought at the mill's own centers within the command area. This cane is then transported in trucks or through rail to the mill. Cane is weighed using an electronic weigh bridge and unloaded into cane carriers. It is then prepared for milling by knives and shredders. Sugarcane juice is then extracted by pressing the prepared cane through mills. Each mill consists of three rollers: 1. Extracted juice mixed with water is weighed and sent to the boiling house for further processing. Residual bagasse is sent to boilers for use as fuel for steam generation 2. This juice is heated and then treated with milk of lime and sulphur dioxide. The treated juice is then further heated and sent to clarifiers for continuous settling. The settled mud is filtered by vacuum filters and filtered juice is returned to be further processed while the oliver cake is sent out 3. The clear juice is evaporated to a syrup stage, bleached by sulphur dioxide and then sent to vacuum pans for further concentration and sugar grain formation. Crystals are developed to a desired size and the crystallized mass is then dropped in the crystallizers to exhaust the mother liquor of its sugar as much as possible. This is then centrifuged for separating the crystals from molasses. The molasses is re-boiled for further crystallization Thus, the original syrup is desugarised progressively (normally three times) till finally, a viscous liquid is obtained from which sugar can no longer be recovered economically. This liquid, which is called final molasses, is sent to the distillery for making alcohol. The sugar thus is separated from molasses in the centrifuge is dried, bagged (50 Kg and 100 Kg), weighed and sent to storage houses. 24

Sugar is made in different sizes and accordingly classified into various grades i.e. large, medium and small. 2.6.2 By- products of the sugar making process . Molasses: Molasses is the only by-product obtained in the preparation of sugar through repeated crystallization. The yield of molasses per ton of sugarcane varies in the range of 4.5% to 5%. Molasses is mainly used for the manufacture of alcohol, yeast and cattle feed. Alcohol in turn is used to produce ethanol, rectified spirit, potable liquor and downstream value added chemicals such as acetone, acetic acid, butanol, acetic anhydride, MEG etc. The state government controls the export of molasses through export licenses issued every quarter. Molasses and alcohol-based industries were decontrolled in 1993 and are now being controlled by respective state government polices. Nearly 90% of molasses produced is consumed by the industrial alcohol manufacturers and the remaining 10% is consumed by the potable alcohol sector. Bagasse: Bagasse is a fibrous residue of cane stalk that is obtained after crushing and extraction of juice. It consists of water, fibre and relatively small quantities of soluble solids. The composition of bagasse varies based on the variety of sugarcane, maturity of cane, method of harvesting and the efficiency of the sugar mill. Bagasse is usually used as a combustible in furnaces to produce steam, which in turn is used to generate power. It is also used as a raw material 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 Boards, for their power supply as it can procure up to 90-95% of its total power requirement through captive generation from steam turbines. Fly ash:

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Fly Ash is the residual output from the boiler furnace after bagasse has completely burnt out. This fly ash is used as a substitute for firewood. It is rich in potassium and is also used by local farmers for cultivation.

Press Mud: Press mud, also known as oliver cake or press cake, is the residual output after the filtration of the juice. It is mixed with spent wash from the distillery and cultivated to produce high quality bio-manure. 2.7 Financial results The summarized financial results of the company for the year ended September 30, 2010 are presented below: Table1 20082009-10 sales and other income profit before interest, depreciation and taxation interest(net) depreciation and amortisation profit before taxation provision for taxation(net) provision for deferred tax profit after tax disposable surplus after adjustments transfer to reserve for molasses storage tanks transfer to general reserve transfer to debenture redemption reserve 3,028.98 613.82 301.34 257.44 55.04 0.1 3.19 51.75 204.56 0.33 10.03 09 1814.89 595.29 187.08 202.21 206 0.66 49.11 156.23 161.14 0.16 40 27.5

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proposed dividend corporate dividend tax on proposed dividend balance carried to balance sheet

13.4 2.22 178.58

12.38 2.1 79

On a stand alone basis the company achieved a turnover of Rs.3,028.98 crore as compared to Rs.1814.89 crore in the previous year. The profit after tax stood at rs.51.75 crore as compared to the profit of Rs.156.23 crore in the previous year. On consolidated basis , the turnover is Rs.3,340.68 crore as compared to Rs.2,333.52 crore in the previous year. The profit after tax and minority interest is Rs.44.06 crore as compared to Rs.61.78 crore in the previous year. 2.8 Dividend The board of directors of the company recommend , for consideration of shareholders at the 79th annual general meeting , payment of dividend of 70% (re 0.70 per share)on equity shares of the face value of re 1/- each for the year ended september30,2010. the dividend paid during the previous year was also 70% . 2.9 Operations The merger of subsidiary BHSIL with the company has further consolidated BHLS leadership position in the Indian sugar industry. Post amalgamation the company now has 14 sugar factories with an aggregate sugarcane crushing capacity of 1,36,000 TCD , six distilleries having capacity to produce industrial alcohol of 800 kilolitres per day and cogeneration plants having power generation capacity of 428MW. The operations during the financial year ended september30,2010 at all the fourteen sugar mills of the company, six distilleries and co-generation facilities were satisfactory. Despite volatile conditions , the company had achieved commendable results during the year 2009-10. During the sugar season 2009-10 , the sugarcane crop acreage reduced in u.p primarily due to deficient rainfall and relatively low sugar prices during the previous few sugar

27

Seasons.. to meet the perceived shortfall in sugar production and with a view to optimize its sugar production capacity utilization, the company had imported an aggregate of 5,27,805 MT of raw sugar. However owing to a ban imposed in inward transportation.

2.10. Expansion of power capacity Modification of boilers for use of alternate fuel The conversion of bagasse fired boiler into multifuel boiler at our gangnauli,kinauni &.maqsoodapur sugar units has been completed and put in operations successfully. Now we have option to run the boiler on alternate fuels i.e with coal separately, with bagasse separately and jointly with bagasse & coal as a fuel for the purpose of power export. New coal fired power plants Sugar industry in India /of late has witnessed an intense volatility in sugar prices. Considering the cyclical nature of industry the company constantly endeavours to evolve a business model that can insulate itself from the vagaries of cyclicality of sugar business. Since the year 2003, the company had expanded its sugar capacity rapidly from 24000 TCD to the present capacity of 1,36,000 TCD. The power industry in India has been characterized by energy shortages as the gap between demand and supply of power has been increasing. U.P government has also announced U.P energy policy 2009 inviting private participation in the power sector to generate over 32,000 MW of power by 2014. The company has been in the business of power generation through the co-generation bagasse fired power generation plants

28

located at all its sugar units of which major part around 75%-80% was used for captive purpose and surplus sold to the Uttar Pradesh government. Phase1-450 MW In the first phase the company had commenced project for an aggregate power generating capacity of 400 MW comprising of 80MW thermal power plants at five locations on the unused land available in the vicinity of the sugar mills of the company at khamberkhera, barkhera, maqsoodapur, kundarkhi and utraula all located in the state of uttar Pradesh.Subsequently the capacity of these thermal power plants were upwardly revised to 450MW. Phase 2- 1980 MW at lalitpur The company was awarded 1,980MW ultra mega thermal power project at lalitpur , Uttar Pradesh . This project is proposed to be implemented through lalitpur power generation company limited(LPGCL), a SPV created for this purpose by the government of U.P. The approximate cost of project is estimated at around Rs.12000 crore. The company had entered into a memorandum of understanding(MOU) with government of uttar Pradesh and have acquired LPGCL from UPPCL to make it a subsidiary of the company with effect from December10,2010. Phase III 1,980 MW at bargarh The company has also been awarded another 1,980 MW ultra themal power project at bargarh , district chitrakoot, uttar Pradesh. The cost of project is estimated at around Rs.12000 crore. A memorandum of understanding has been executed with government of uttar Pradesh in this regard. The bargarh TPP shall be implemented through another SPV-Bajaj power generation private limited(BPGPL), a subsidiary of the company. Bio-gas/ power from press mud In addition to the bagasse and molasses , the sugar mill operations also generate sufficient amount of press mud. At six out of fourteen units of the group, distilleries are 29

attached to the sugar plant. In these cases , such press mud is partly utilized gainfully in compost taking with bio-methanated effluent for distilleries to accomplish zero discharge and rest is sold at very nominal price. At other locations the entire quantity is sold at nominal prices. The company has at time experienced great difficulty for disposal of the press mud(approximately 4% of cane crushed). With around 30-35% biomass content , press mud has the potential to be converted into biogas through anaerobically . Keeping above in consideration and also in order to utilize the press mud valuably the company has actively considered tapping renewable energy from industrial waste. It was considered desirable to utilize the surplus press mud generated in the sugar units which do not have a distillery attached by gainfully converted it into biogas which in turn can also be consumed advantageously in power generation through gas engine.

2.11 Subsidiaries operations 2.11.1 Bajaj hindusthan sugar and industries limited During the year bajaj hindusthan sugar and industries limited(BHSIL), a 75% subsidiary of the company has ceased to be a subsidiary of the company pursuant to the scheme of amalgamation of BHSIL with the company with effect from april1,2010 fixed as appointed date. 2.11.2 Bajaj eco-tec products limited Bajaj co-tec products limited(BEPL) is a wholly owned subsidiary of bajaj hindusthan limited engaged in manufacture of medium density fibre boards(MDF) boards and pencil boards and particle boards from sugarcane bagasse . During the financial year ended march 31 , 2010 BEPL recorded a turnover of RS.154.63 as against Rs.59.48 crore during the previous year. The net loss 30

after tax for the year was reduced to Rs.50.57 crore as agaibst Rs.73.95 recorded during the previous year. 2.11.3 Bajaj aviation private limited Bajaj aviation private limited is a wholly owned subsidiary of bajaj eco-tec products limited and therefore is a subsidiary of the company. During the year ended September 30,2010,it generated an income of Rd.1.76 crore and posted profit after taxation of Rs.0.67 crore. 2.11.4 Bajaj energy private limited(BENPL) (formerly bajaj eco-chem products

private limited) During the year the proposed plans of carrying on the business of manufacture and sale of specialty chemicals through this subsidiary were abandoned. The entire pre-operative expenditure aggregating to Rs.0.63 crore on the aforesaid project has since been written off. The name of the company was therefore changed from bajaj eco-chem products private limited to bajaj energy private limited with effect from march 19,2010. After obtaining approval of government of uttar Pradesh , these five under construction power projects were assigned to be developed by bajaj energy private limited. As per the terms and conditions stipulated by the government of u.p , BHL is obligated to hold 26% of the equity of his SPV. Also BHL and this SPV shall have the joint responsibility for setting up these projects . The project has been appraised by SBICAP trustee company limited on behalf of a consortium of lenders and financial closure for debt aggregating to Rs.1740 crore has been achieved. The equity requirement for the project has been estimated at Rs.580 crore . Till date , BHL has subscribed equity to the tune of Rs.137.81 crore and Rs.149.88 crore has been subscribed by an entity belonging to the promoters of BHL. 2.11.5 Bajaj internacional participacoes limitada(subsidiary in brazil)

31

During the year too, no business as envisaged to be undertaken through this wholly owned subsidiary in brazil could be commenced. The amount invested by the company had remained deployed in bank deposits.since the company did not see any opportunity of commencing business soon,the process of its winding up and repatriation of capital has been initiated.

2.11.6 Bajaj hindusthan(Singapore)private limited During the year bajaj hindusthan (Singapore) pte.ltd, a wholly owned subsisiary of the company in Singapore decided to commence operations of trading in commodities like sugar, coal etc. The company also plans to acquire a coal mine located in Indonesia. To meet the fund requirements of its business, BHL has further invested a sum of us$27 million equivalent to Rs92.3 crore in this subsidiary. The financial year of this subsidiary has been changed from October-september period to april-march period with effect from march 31,2010. No business operations has been commenced upto march 31,2010. With the aggregate expenditure during the period amounting to Rs.0.03 crore , the net loss for the period was Rs.0.03 crore and accumulated carried forward loss upto march 31,2010 is Rs0.12 crore.

2.11 Persons constituting group within the definition ofgroup as defined in the momopolies and restrictive trade practices act , 1969 , for the purpose of regulation 3(1)(e)(i) of the securities and exchange board of India (substantial acquisition of shares and takeovers) regulation , 1997, include thw following: 32

Sr.no 1. 2. 3. 4. 5. 6. 7. 8. 9.

Name of the entity

A.N Bajaj pvt.ltd(formerly known as krishnavijay paper and board pvt.ltd) Abhitech developers pvt.ltd Anandmayi trust Apoorv trust Bajaj allwyn realty pvt.ltd Bajaj capital ventures pvt.ltd Bajaj consumer care employees welfare fund, udaipur Bajaj consumer care employees welfare fund, varanasi Bajaj consumer care ltd

10. Bajaj corp.ltd 11. Bajaj ebiz pvt.ltd 12. Bajaj hindusthan limited employees educaton welfare fund 13. Bajaj hindusthan limited employees family planning welfare fund 14. Bajaj hindusthan limited employees general medical aid fund 15. Bajaj hindusthan limited employees sports & cultural activities welfare fund 16. Bajaj hindusthan limited managerial staff medical aid fund 17. Bajaj infrastructure development co.ltd 18. Bajaj infrastructure finance corporation pvt.limited 19. Bajaj international realty pvt.ltd 20. Bajaj logistics pvt.ltd 21. Bajaj power ventues pvt.ltd 22. Bajaj trustee company pvt.ltd 23. Bhoomipooja shelters pvt.ltd 24. Bhoomivijay properties pvt.ltd 25. Carbery infrastructure pte.ltd 26. Esugarindia clearing corporation ltd. 27. Esugarindia ltd

33

28. Global world power projects pvt.ltd 29. Golden shore investing FZE 30. Golden shore investing limited 31. Jagruti chinni pvt.ltd 32. kalakruti real estates pvt.ltd 33. KNB enterprises pvt.ltd(formerly known as parvati chinni pvt.ltd) 34. Kruti real estate pvt.ltd 35. kushagra trust 36. kushagra trust no.2 37. Lambodar sugars pvt.ltd 38. Megha khandsari pvt.ltd 39. N.H.M marketing pvt.ltd 40. New horizon investments ltd. 41. Shishir bajaj family trust 42. Shishir bajaj HUF 43. SKB roop commercial pvt.limited(formerly known as Roop sugars pvt.ltd) 44. Vishwarupe trust 45. Yugadikrit trust 46. Bajaj eco-tec products ltd. 47. Bajaj aviation pvt.ltd 48. Bajaj internacional participacoes ltda. 49. Bajaj hindusthan( singapore) pte.ltd 50. Bajaj energy pvt.ltd(formerly known as bajaj eco-chem products pvt.ltd) 51. Lalitpur power generation company ltd. 52. Bajaj power generation pvt.ltd(formerly known as kashyap properties pvt.ltd) 2.12 PLANT LOCATIONS Sugar mills

34

1.Golagokarannath , district lakhimpur kheri, uttar Pradesh 2. palia kalan, , district lakhimpur kheri ,uttar Pradesh 3. kinauni, district meerut, uttar Pradesh 4. Thanabhawan,district muzaffarnagar, uttar Pradesh 5. Budhana, district muzaffarnagar , uttar Pradesh 6. Bilai, district bijnor, uttar Pradesh 7. Barkhera , district pilibhit, uttar Pradesh 8 Khambarkhera, district lakhimpur, uttar Pradesh 9 Gangnauli , district saharanpur, uttar Pradesh 10. Maqsoodapur, district shahjahanpur, uttar Pradesh 11. Pratappur,district deoria, uttar Pradesh 12. Rudauli,district basti, uttar Pradesh 13. Utraula, district balrampur, uttar Pradesh 14. Kundarkhi,district gonda, uttar Pradesh Distillery 1. Golagokarannath , district lakhimpur kheri, uttar Pradesh 2. Palia kalan, , district lakhimpur kheri ,uttar Pradesh 3. kinauni, district meerut, uttar Pradesh 4. Khambarkhera, district lakhimpur, uttar Pradesh 5. Gangnauli , district saharanpur, uttar Pradesh 6. Rudauli,district basti, uttar Pradesh

35

Co-generation 1. palia kalan, , district lakhimpur kheri ,uttar Pradesh 2. Barkhera , district pilibhit, uttar Pradesh 3. Khambarkhera, district lakhimpur, uttar Pradesh 4. kinauni, district meerut, uttar Pradesh 5. Thanabhawan,district muzaffarnagar, uttar Pradesh 6. Budhana, district muzaffarnagar , uttar Pradesh 7. Bilai, district bijnor, uttar Pradesh 8. Gangnauli , district saharanpur, uttar Pradesh 9. Maqsoodapur, district shahjahanpur, uttar Pradesh 10. Golagokarannath , district lakhimpur kheri, uttar Pradesh

36

OBJECTIVES OF THE STUDY

To learn how to make a business report. To understand the Financial analysis of Bajaj Hindusthan limited. To study about the accounting policies and standards adopted by BHL. To get knowledge about the functioning of finance and accounts department

***** ***** ***** *** ****** ******

37

RESEARCH METHODOLOGY
Research is an original contribution to the contribution to the existing stock of knowledge making for its advancement. It is the pursuit of the truth with the help of study. Observation for knowledge through objective and systematic approach of finding solution to a problem is research. The systematic approach concerning generalization and the formulation of a theory is also research. The manipulation of things, concepts and symbols for the purpose of generalization to extend, correctly and verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. D.Slesinger and M.Stephenson 1 TYPES OF THE RESEARCH The basic types of research are as follows: 1. Descriptive research: The purpose of this research is sales promotion activities in telecom with special reference to idea cellular. 2. Analytical research: In this research the researcher has to use facts or information strategy already available and analyze these to make a critical evaluation of the material.

38

3. Quantitative research: It is

concerned with the qualitative phenomenon is

phenomena relating to or involving quality or kind. 4. conceptual research: It is related to some abstract ideas or theory. 5. empirical research: It is data based research coming with conclusions, which are capable of being verified by the observation and experiment. 6. Diagonostic research: such a research follow case study method or in depth approaches to reach the basic casual relation. 7. Exploratory research: The objective of this research is the development of hypothesis rather than their testing. The research methodology includes the information regarding the sample size design, data collection methods and the analytical tools used . Here also the same is explained in detail regarding the sample size , collection methods and analytical tools used in this research. 1.1 Data collection methods There are so many ways in which data shall be collected. The methods that have been used for collecting the data are: 1.1.1 Primary research 1.Questionnaire method 2.Direct interview method 1.1.2 Secondary research Books Internet Articles Newspapers Magazines

In this research, Firstly I have studied the company history, Cos Growth, cos products, govt. policies for sugar industry, global & Indian scenario of sugar, risks & concerns for

39

better understanding of accounting policies & accounting procedures. After that I started my project of Financial analysis of Bajaj hindusthan limited . Define the problem and research objectives The first step calls for the researcher to define the problem carefully and agree on the research objective. An old age sayingA problem well defined is half solved. 1.1.3 Data Collection Datas collected through Personal interviews, Cos Balance Sheets, Internet sites, Books etc.

PRESENTATION AND ANALYSIS

1 .THE FINANCIAL ANALYSIS AND OPERATIONS OF THE COMPANY A scheme of amalgamation of Bajaj Hindusthan sugar and industries limited (hereinafter referred to as Amalgamated company) with the company under sections 391 to 394 of the companies act , 1956 was sanctioned by Honble high court having judicature at Bombay vide order dated November 26,2010. Current year figures includes the stand-alone figures of Bajaj hindusthan limited for the period from October 01,2009 to September 30,2010 and the figures of Bajaj Hindusthan sugar and industries limited(Amalgamated company) for the period from April 01, 2010 to September 30,2010. Further the assets and liabilities as on September 30,2010 of the company also includes assets and liabilities of the Amalgamated company as per the scheme of amalgamation. Table 2

cane crushing

MMT

8.467

5.425

40

Raw sugar processing Sugar recovery Sugar production-from cane - from raw sugar Industrial alcohol production Molasses production Power generation

MMT % M.T M.T K.L M.T M.W

0.327 _ 9.24 782,118 315,262 _ 94,719 442,433 448,901 32,070 267,241 276,300 9.09 493,468

During the year the production of sugar and molasses has increased to 10,97,380MT and 4,,42,433 MT as compared to 4,93,268MT and 2,67,241 MT respectively in previous year recording a growth of 122% and 65% respectively. This was mainly due to higher availability of sugarcane and processing imported raw sugar. Similarly industrial alcohol ethanol production was higher at 94,719 KL as compared to 32,070 KL in previous year recording a growth of 195%. Power generation was also higher at 4,48,901 MW as compared to 2,76,300 MW in previous year recording a growth of 62% largely due to higher quantum of bagasse available from the crushing of sugarcane. Looking to the reduced sugarcane crop acreage in sugar season 2009-10, the company took necessary steps to ensure availability of cane so that mills can operate at optimum capacity. Though, cane crop acreage reduced in u.p, the quality of sugarcane improved , resulting into higher production of sugar and other related products i.e molasses and alcohol. Recovery of sugar from sugarcane was also higher this year at 9.24% as against 9.09% in the previous year. The farmers have gain shifted from other crops to sugarcane crop this year due to higher fair and remunerative price(FRP), State advisory price(SAP) fixed by the central government and state government respectively and incentive paid to cane growers by the sugar mills. 41

1.1 Results of operations Table 3 Particulars Revenue Earnings before interest,depreciation(EBIDTA) Interest&finance charges(net) cash profits Depreciation & amortisation Profit before tax provision for taxation Profit after tax Basic earning per share(Rs) Diluted earning per share(Rs) 1.2 Turnover Increase in revenue is due to higher quantum of sugar sold , higher sales realization of sugar and revenue of amalgamated company for the period from april1,2010 to september30, 2010. 1.3 Analysis of sales During the year the company sold 9,26,966 MT of sugar as against 6,72,180 MT during the previous year, registering an increase of 38%. The company also sold 54,602 MT of molasses as against 71,120 MT in the previous year , reporting a downfall of 23% due to more molasses used for production of alcohol during the year. 1.4 Other income 42 2009-10 3,028.98 613.82 301.34 312.48 257.44 55.04 3.29 51.75 2.51 2.51 2008-09 1814.89 595.29 187.08 408.21 202.21 206 49.77 156.23 10.3 9.39

Other income for the year was Rs.155.38 crore against Rs.231.15 crore in the previous year. The major component of other income was gain due to foreign exchange fluctuation of Rs.47.73 crore, lease rent at RS.15.84 crore. Provision no longer required/credit balance appropriated of Rs.32.19 crore and profit on sale of long term investment of Rs.16.61 crore. 1.5 other expenses During the year other expenses were Rs.246.27 crore as against Rs.138.28 crore in the previous year. The increase in other expenses was largely due to higher crushing of sugarcane and processing of raw sugar during the year. 1.6 Earnings before interest, depreciation, tax and amortization The EBIDTA achieved for the year was Rs.613.82 crore as against Rs.595.29 crore in the previous year. The increase in EBIDTA margins was mainly on account of higher volume of sales, higher realization of sugar and power sale as compared to previous year. 1.7 Interest & finance charges Increase in interest expenses was mainly due to higher loans and additional working capital utilized for making early cane price payments to growers as compared to the previous year. This year company also held higher stocks of sugar and alcohol due to higher production and lower demand of sugar. 1.8 Depreciation & amortisation The depreciation for the year increased from Rs.202.21 crore to Rs.257.44 crore mainly due to depreciation on revaluation of assets of the company as on april01,2010 and depreciation on assets of amalgamated company i.e Bajaj hindusthan sugar and industries limited w.ef april01,2010. 1.9 Provision for tax

43

Provision for taxation includes current tax of Rs.16.35 crore , deferred tax liability of Rs.3.19 crore and wealth tax of Rs.0.10 crore. 1.10 Balance sheet The summarized balance sheet as at September 30,2010 is as under: Table4 financial year ended september30 sources of funds shareholder's funds capital equity share suspense equity warrants stock option outstanding reserves and surplus sub total loan funds deferred tax liability total application of funds fixed assets including CWIP investments current assets,loans &advances less:current liabilities & provisions net current assets total 1.11 Capital The company has allotted 1,45,00,000 new equity shares on January 4,2010 to the promoter group of the company in terms of warrants allotted to them on may18,2009 on 5,571.19 1,113.39 3,987.87 1,908.93 2,078.94 8,763.52 2,763.78 549.11 3,034.42 870.45 2,163.97 5,476.86 19.14 3.7 0 15.3 3,098.82 3,136.96 5,543.13 83.43 8,763.52 17.69 0 18.9 0 2,257.08 2,293.67 3,075.15 108.04 5,476.86 2010 2009

44

preferential basis carrying right to subscribe for and be allotted one(1) fully paid equity share of face value Re1 each per warrant, at a price of Rs.52.14 per equity share in accordance with the SEBI preferential issue guidelines.

1.12 Equity share suspense Equity share suspense of Rs.3.70 crore represent the face value of an aggregate of 3,70,00,000 equity shares of Re.1 each of the company to be allotted in accordance with the terms and conditions of the scheme of amalgamation of Bajaj hindusthan sugar and industries limited with Bajaj hindusthan limited as sanctioned by honble high court having judicature at Bombay vide order dated November 26,2010.

1.13 Reserves and surplus Securities premium account increased by Rs.806.63 crore represent Rs.722.05 crore was credited in accordance with the scheme of amalgamation being the aggregate of excess of the fairvalue of net assets of amalgamated company over the paid up value of equity shares to be issued and allotted. 1.14 Loan funds Loan funds increased to Rs.5,543.13 crore as against Rs.3,075.15 crore in the previous year mainly due to further loan taken for fulfillment of working capital requirement and loan funds of the amalgamated company. 1.15 Fixed assets Gross block increased from Rs.3,407.48 crore to Rs.6,509.87 crore was mainly due to revaluatiom of certain assets of the company and assets of malgamted company w.e.f April 01,2010. 1.16 Investments

45

During the year company invested Rs.137.00 crore in Bajaj energy private limited(subsidiary) by subscribing to 69,90,000 equity shares of Rs.10each at a premium of Rs186 per share and Rs92.31 crore in Bajaj hindusthan(Singapore) pte.ltd(subsidiary) by subscribing to 2,70,00,000 equity shares of $1 each. 1.17 Inventories The inventory of sugar at the end of the year was 4,60,097 MT equivalent tp 181 days sales as compared to 95 days sales in the previous year. This was due to higher production , raw sugar processed into white sugar and gradual liquidation of stocks due to demand being met by import of white sugar and gradual liquidation of stocks due to demand being met by import of white sugar allowed by the government.

1.18 Debtors In line with the companys focus on effective working capital management , vigorous efforts were made to recover dues from debtors. The debtors at the end of the year were equivalent to 20 days sales as compared to 6 days sales in the previous year. 1.19 Significant non-recurring income , expenditure and other items 1.19.1 Income The profit on sales of investment of Rs.16.61 crore and the provisions no longer required / credit balance appropriated,Rs.32.19 crore, were of a non-recurring nature. 1.19.2 Expenditure The loss on assets sold/discarded , Rs.0.10 crore is of a non-recurring nature. 1.19.3 Contingent liabilities The status of contingent liabilities as at september30,2010 has been reviewed by the management. Efforts are being made for speedy settlement of pending cases.

46

1.20 division wise operations Table 5:Crushing details of plants during the year 2009-10 : 2009-10 2008-09 Cane Sugar Sugar Cane Sugar Sugar crushing recovery production crushing recovery production 1.184 1.161 9.68 8.69 9.00 9.03 9.37 10.15 9.07 9.11 8.95 9.20 9.24 114583 100797 110100 70208 91964 88528 41188 72607 57538 34605 782118 0.857 0.857 0.788 0.541 0.578 0.470 0.187 0.529 0.344 0.274 5.425 9.53 9.31 8.72 8.77 8.84 10.04 8.47 9.16 8.79 8.46 81637 79816 68645 47479 51038 47141 15851 48351 30187 23123

Plant location Gola gokarannath Palia kalan Kinauni Thanabhawan Budhana Bilai

zone Central u.p u.p

Western 1.224 0.777 0.981 0.871 0.454 0.796 0.643 0.376 8.467

Gangnauli khambarkhera Central Barkhera Maqsoodapur Pratappur Rudauli Utraula Kundarkhi total u.p Eastern u.p

9.09

493268

1.21 Distillery division The distillery division produced 94719 kilolitres of industrial alcohol/ethanol against 32070 kilolitres in the previous year registering an increase of 195%. Likewise alcohol/ethanol sales aggregated 63123 kilolitres in the previous year registering an increase of 96%. In value terms the sale of industrial alcohol/ethanol during the year was rs.162.82 as against Rs85.81 crore in the previous year registering an increase of 90%.

47

Increase in production and sale was due to availability of more sugarcane resulting onto higher production of molasses. 1.22 Power division The sale of power was at Rs51.97 crore in the current year as against Rs22.62 crore recorded in the previous year registering anm increase of 130% mainly due to availability of more bagasse from sugarcane crushing.

1.23 Balance sheet as at September 30,2010 Table 6:

48

Rs.crore sources of funds shareholders funds capital equity share suspense equity warrants stock option outstanding reserves&surplus loan funds secured loans unsecured loans deferred tax liability total ii.application of funds fixed assets gross block less:depreciation net block capital work in progess investments current assets,loans&advances Inventories sundry debtors cash&bank balances loans&advances less:current liabilities &provisions current liabilities provisions net current assets TOTAL 19.14 3.7 15.3 3,098.82

As at sept30,2010

As at sept30,2009 17.69 18.9

3,136.96 4,429.77 1,113.36 5,543.13 83.43 8,763.52 6,509.87 1029.96 5,479.91 91.28 5,571.19 1,113.39 1921.36 163.1 479.2 1,424.21 3,987.87

2,257.08 2,293.67 1,956.73 1,118.42 3,075.15 108.04 5,476.86 3,407.48 774.98 2,632.50 131.28 2,673.78 549.11 800.45 28.57 112.35 2,093.05 3,034.42

1,716.95 191.98 1,908.93 2,078.94 8,763.52

683.03 187.42 870.45 2,163.97 5,476.86

1.24 profit and loss account for the year ended september30,2010 Table 7:

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RS,CRORE 2009-10 INCOME Gross sales/income from operations less:excise duty net sales/income from operations other income EXPENDITURE raw materials consumed manpower cost other expenses interest&finance charges depreciation&amortisation increase/decrease in stocks profit for the year before taxation less:provision for taxation current tax deferred tax wealth tax fringe benefit tax less:MAT credit entitlement

2008-09

2970.27 96.67 2,873.60 155.38 3,028.98 2,765.64 146.82 246.27 301.34 257.44 -743.57 2,973.94 55.04 16.35 3.19 0.1 _ 19.64 16.35 3.29 51.75

1655.75 72.01 1583.74 231.15 1814.89 816.76 120.83 138.28 187.08 202.21 143.73 1608.89 206 33.09 49.11 0.1 0.56 82.86 33.09 49.77 156.23 6.53 -1.62

profit for the year add:balance bought forward excess/(short)provision for tax dividend paid of earlier year corporate dividend tax on dividend paid debenture redemption reserve

79 -1.02 -0.17 75 152.81 204.56

4.91 161.14 0.16 40 27.5 12.38 2.1 79

Transfers to: reserve for molasses storage tanks general reserve debenture redemption reserve proposed dividend corporate dividend tax on proposed dividend balance carried to balance sheet 50

0.33 10.03 13.4 2.22 178.58

basic earning per share net profit/weighted average no.of shares basic earning per share in rupees(face value re1/-each) diluted earning per share net profit/weighted average no.of shares diluted earning per share(face value re1/-each)

51.75/206,133,823 154.6/150,148,207 2.51 10.3

51.75/206,133,823 154.61/164,648,207 2.51 9.39

1.25 Cash flow statement for the year ended September 30,2010 Table 8: 2009-2010 A.Cash flow from operating activities net profit before exceptional items and taxation adjustment for Depreciation & amortisation (gain)/loss due to foreign exchange fluctuation provision for foreign exchange fluctuation loss/(surplus)on sale of fixed assets(net) interest&finance charges dividend/income from current investment received profit on sale of investment interest received employee's compensation expenses(ESOP cost) operating profit before working capital changes adjustment for: trade&other receivables inventories trade payables cash generated from operations direct taxes paid net cash from/(used in)operating activities B.Cash flow from investing activities purchase of fixed assets dsale of fixed assets purchase of investments sale of investments 51 2008-2009

55.04 257.04 -14 0 -0.15 415.2 -3.59 -16.61 -113.86 -0.88 523.55 578.59 48.74 -1,209.38 8.23 -573.82 -40.25 614.07 -219.67 2.69 -4700.5 4512.83

206 0 -83.65 1.26 295.06 -0.47 0 -107.98 0 306.43 512.43 -206.87 -163.21 -76.85 219.2 -13.04 206.16 -60.81 5.54 -650.13 -589.28

loans&advances dividends received interest received net cash used in investing activities C cash flow from financing activities proceeds from borrowings(net of repayments) issue of convertible warrants issue of equity shares & premium thereon on issue of QIP on conversion of equity warrants issue expenses(QIP) interest paid dividend paid(including tax thereon) net cash from/(used in) financing activities net increase/(decrease)in cash and cash equivalents cash&cash equivalents as at oct01(opening balance) earmarked for specific purposes other balances cash and cash equivalents on amalgamation cash and cash equivalents as at september 30(closing balance) earmarked for specific purposes other balances

-61.44 3.59 113.86 -348.64 1674.18

-55.47 0.47 107.98 63.14 -466.21 18.9 723.18

56.7 -391.95 -15.58 1,323.35 360.64 34.82 77.53 112.35 6.21 3.18 476.02 479.2 34.82 77.53 112.35 19.87 -316.56 -9.83 -70.39 72.63 1.61 38.11 39.72

1.26 consolidated balance sheet as at September 30,2010 Table 9: AS at sept30,2010

RS.CRORE 1.sources of funds shareholder's funds capital equity share suspense equity warrants stock options outstanding reserves & surplus minority interest loan funds secured loans unsecured loans deferred tax liability 52

As at sept30,2009

19.14 3.7 15.3 2,845.67 2883.81 202.97 5076.38 1273.37 6349.75 83.45

17.69 18.9 16.18 2060.74 2113.51 65.06 2865.78 1190.48 4056.26 48.61

total 2.application of funds fixed assets gross block less:depreciation net block capital work in progress investment current assets,loans&advances inventories sundry debtors cash&bank balances loans&advances less:current liablities &provisions current liabilities provisions net current assets total 1967.43 152.87 525.77 1435.1 4081.17 1749.18 193.15 6866.8 1109.77 5757.03 930.61

9520.38

6283.44

6687.64 693.9

5295.13 1059.83 4235.3 154.8 4390.1 0.12 956.44 49.86 127.27 1859.39 2992.96 902.7 197.04 1099.74 1893.22 6283.44

2138.84 9520.38

1.27 Consolidated profit & loss account for the year ended September 30,2010 Table10: AS at sept30,2010 3304.8 103.37 3201.43 139.25 3340.68 3219.08 183.89 387.16 368.12 344.03 53

RS.CRORE income gross sales/income from operations less:excise duty net sales/income from operations other income expenditure raw materials consumd manpower cost other expenses interest&finance charges

As at sept30,2009 2115.29 89.34 2025.95 307.57 2333.52 1073.46 165.33 218.44 278.13 345.66

147. depreciation&amortisation increase/decrease in stocks profit/(loss) for the year before taxation exceptional items: surplus on cessation of subsidiary profit before the year before taxation less:provision for taxation current tax deferred tax wealth tax fringe benefit tax less:MAT credit entitlement profit for the year less:minority /interest income attributed to consolidated group add:balance brought forward excess/short provision for tax dividend paid of earlier year corporate dividend tax on dividend paid debenture redemption reserve transfers to: reserve for molasses storage tanks general reserve debenture redemption reserve proposed dividend corporate dividend tax on proposed dividend balance carried to balance sheet basic earning per share net profit/weighted avg no.of shares basic earning per share in rupees diluted earning per share net profit/weighted avg no.of shares diluted earning per share in rupees (998.67 3503.61 -162.93 -194.93 32 16.6 -9.4 0.11 7.31 16.52 -9.21 41.21 -2.85 44.06 -176.1 -0.03 -1.02 -0.17 75 102.32 -58.26 0.35 10.03 13.4 2.22 (176.10 -84.26 -155.7 -93.92 0.2 40 27.5 12.38 "(1.62) 35 2228.37 107.15 105.15 33.18 44.68 0.1 0.78 78.74 33.13 45.61 59.54 -2.24 61.78 -154.08

44.03/206133823 60.6/150148207 2.14 4.01 44.03/206133823 60.16/164648207 2.14 3.65

1.28 Consolidated cash flow statement for the year ended September 30,2010

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Table 11 2009-10 2008-09 cash flow from operating activities net profit/(loss) before exceptional items and taxation -162.93 105.15 adjustment for: depreciation&amortisation 344.03 345.66 (gain)/loss due to foreign exchange fluctuation -14 provision for foreign exchange written back -121.12 loss/(surplus) on sale of fixed assets -0.25 1.27 interest&finance charges 448 .13 358.74 dividend received -3.71 -0.47 profit on sale of investment -16.62 interest received -80.01 -80.61 employee's compensation expenses -0.88 676.69 503.47 513.76 608.62 operating before working capital changes adjustment for: trade and other receivables -34.1 -225.8 inventories -1595.53 -164.07 trade payables 396.21 -30.95 cash generated from operations -719.66 187.8 direct taxes paid -39.63 (14.22_) net cash from/(used in) operating activities -759.29 173.58 cash flow from investing activities purchase of fixed assets -1011.8 -166 sale of fixed assets 2.78 5.6 purchase of investments -4571.29 -589.28 sale of investments 4587.84 589.23 loans and advances -61.4 -46.07 dividend eceived 3.71 0.47 interest received 80.01 80.61 exchange fluctuation reserve on consolodation -0.53 0.62 net cash(used in) investing activities -970.68 -124.82 cash flow from finanacing activities proceeds from borrowings 2302.68 -427.67 issue of convertible warrants 18.9 issue of equity shares&premium theeon om issue of qip 723.18 on conversion of equity warrants 56.7 minority interest 211.88 issue expenses -19.87 interest paid -427.21 -380.23 dividend paid -15.58 -9.83 net cash from/(used in) financing activities 2128.47 -95.52 net increase/(decrease) in cash and cash equivalents 398.5 -46.76 55

cash and cash equivalents as at oct1 earmarked for specific purposes other balances cash and cash equivalents as at sept30 earmarked for specfic purpose other balances

35.98 91.29 127.27 14.51 511.26 525.77

2.92 171.11 174.03 35.98 91.29 127.27

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LIMITATIONS
Time was the main constraint High Cost Limited flexibility for modification as per requirement Required special training for using SAP User cannot be used multipurposely user required for completing the specific task

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FINDINGS AND SUGGESTIONS

FINDINGS During the Summer Training at Bajaj Hindusthan Limited I get knowledge of accounting policies and system of accounting and procedure . I also get the knowledge of functioning and general administration of finance & accounts department.

CONCLUSIONS AND RECOMMENDATIONS

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RECOMMENDATIONS Bajaj hindusthan limited is Indias largest sugar and ethanol manufacturing company. The company has many weakness and strengths. The main weakness is that one should have a good knowledge about SAP for accounts. Strengths is that the company has a good functioning in finance and accounts department. I want to recommend to the bajaj hindusthan limited is that the company should take measures to avoid that weakness. CONCLUSION The summer training period in Bajaj Hindusthan Limited is a great experience for me. The project report on Financial analysis of bajaj hindusthan limited provided me platform to interact with accounting policies of a company and learn about the accounting system of the organisation. During the study on financial analysis of Bajaj hindusthan limited. I get knowledge of accounting policies of the company, system of accounting and procedure in SAP. I also get the knowledge of functioning and general administration of finance & accounts department. In this report I also understand how company maintains their accounts. In this report I also attached some print screen of SAP as samples. I met many people but Mr. Sanjay Kumar Goyal (HOD Finance & Accounts) and Mr. Bhuwan Ganglasya (Asst. Manager) in account department of BHL encouraged and motivated me a lot and provides me with very useful information. This project enhanced my knowledge as well as increased my confidence also.

BIBLIOGRAPHY
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Source: F.O. Licht's International Sugar and Sweetener Report dated Oct. 29th 2008 Source: F.O. Licht's International Sugar and Sweetener Report World Sugar Balances - Report dated Oct 29th 2009-10. BHL Annual Report Source: Religare Technova www.Bajaj Hindusthan Limited.com www.answers.com www.wikipedia.com Books: Accounting Standards And Corporate Accounting Practices-T.P.GHOSH Financial and Management Accounting-Dr. S.N.Masheshweri

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