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Dissertation submitted in partial fulfillment of the requirement for the award of the degree of PGDM
BY T.CHANDRA SHEKAR (08M004) (FINANCE AND MARKETING)
DHRUVA COLLEGE OF MANAGEMENT APPROVED BY AICTE, MINISTRY OF HRD, GOVT. OF INDIA MEDCHAL, HYDERABAD-501401 (2008-2010)
I hereby declare that the dissertation titled A STUDY ON BUDGETARY CONTROL PRACTICES OF NFCL that is being submitted by me in partial fulfillment of the requirements for the award of the degree of PGDM in FINANCE and MARKETING to DHRUVA COLLEGE OF MANAGEMENT is a record of a bonafide work carried out by me. The results embodied in this dissertation have not been submitted to any other University or Institution for the award of any Degree or Diploma.
Date: Signature of the student Place:
Internal Supervisor 2……………………………
I express my deep sense of gratitude to the management of NFCL for giving me an opportunity to carry out my summer internship in their esteemed organization. I sincerely thank Mr. ACHARYA, Charted Accountant at NFCL for giving me his valuable guidance and helping me in completion of the project. I also thank my internal supervisor Prof. Seethapathi, Narsimhulu Dhruva College of Management who guided me through out my project analysis. I convey my special thanks to Dr. S. Pratap Reddy, Chairman, Dhruva College of Management for providing all the necessary facilities in bringing out this project report successfully.
TABLE OF CONTENT 1. 1.1 1.2 1.3 1.4 1.5 1.6 2. 2.1 2.2 2.3 3. 4. 4.1 4.2 4.3 INTRODUCTION --------------------------------------------------------------INTRODUCTION TO THESTUDY REVIEW OF LITERATURE NEED OF THE STUDY OBJECTIVES OF THE STUDY SCOPE OF THE STUDY PROFILE OF THE COMPANY DESIGN OF THE STUDY-------------------------------------------------------------RESEARCH METHODOLOGY SOURCES OF DATA LIMITATIONS OF THE STUDY CONCEPTUAL ANALYSIS OF BUDGET AND BUDGETARY CONTROL ANALYSIS--------------------------------------------------------------------BUDGET PROJECTION VARIANCE ANALYSIS COMPARTIVE STATEMENTS
FINDINGS AND SUGGESTIONS---------------------------------------------------BIBLIOGRAPHY-------------------------------------------------------------------------------ANNEXURE-------------------------------------------------------------------TABLE & GRAPH REGARDING PRODUCTION BUDGET OF NFCL FOR 2007-08AND 2008-09
5 TABLE REGARDING P&L A/C OF DIFFERENT FERTILIZER COMPANIES TABLE REGARDING BALANCE SHEET OF DIFFERENT FERTILIZER COMPANIES TABLE & GRAPH REGARDING VARIENCE OF P&L A/C FOR 2007-08 AND 2008-09
EXECUTIVE SUMMARY: BUDGETARY CONTROL PRACTICES Budget is one of the important and powerful tools available to the organization to have estimates about expenses and income for a definite period of time. Budgetary control involves the use of budget and budgetary reports, throughout the period to co-ordinate, evaluate and control day to day operations in accordance with the goals specified by the budget. In this present scenario it is very necessary to reduce the cost in regard of all terms to sustain in the market. So i have taken budgetary control as my study, which carries huge weight age to reduce the wastages and does the process efficiently. The following are the objectives of the study 1. To evaluate the budgetary control practices followed in NFCL. 2. To make a prediction about capital expenditure for NFCL. 3. To have comparative analysis among different fertilizer companies.
The findings that I have come out of study 1. The demand towards fertilizers and its byproducts is more. 2. Apart from this the expenses regarding the raw materials is growing at higher rate when compared previous years (2007-08). 3. Subsidy towards the agriculture and fertilizers is more in this financial year (2008-09) and appeared to grow at 15% in the next year and ultimately benefited by the farmers 4. Net sales variance NFCL is showing very low from 2007-08 to 2008-09 .Which shows that sales of the company is increased but in less quantity when compared others 5. The net worth of the NFCL is showing a good figures when compared to others and it also made huge investments in other companies and carrying a good name in the minds of investors and as well as the suppliers etc,.
1.1 INTRODUCTION TO THE STUDY: In the past liberalization environment, the subject of budgetary control has become far more complex than what it was in the last century. Now-a- days, budgetary control is one of the most vital and critical area of business management. The content of budgetary control are also changing at a rapid pace and quantitative techniques are also incorporated in its field which have shifted emphasis from the episodic cost control and cost reduction. Budgetary control is a tool of management used to plan, carry out and control the operations of the business. The entrepreneur finds it quite handy in planning the growth of his business or enterprise. The concept and procedures under budget plan and control have wide application not only in profits- oriented enterprises but in every enterprise where the resource are limited and have to be properly applied. This, in a sense is ‘managerial budgeting’. It applies to public and private enterprises, government departments and charitable organizations. The modern approach is towards a comprehensive budget plan and control. Of all business activities, budgeting is one of the most important aspects and, therefore requires detailed attention.
1.2 REVIEW OF LITERATURE: An Examination of the Effects of Budgetary Control on Performance November, 2007 Carolyn M. Callahan, Doris M. Cook Professor, Tammy R. Way mire, University of Arkansas-Fayetteville. This study represents the first which suggests that tight budgetary control may not be as effective in improving performance as assumed both in public sector and private sector entities. While it would be premature to conclude that tight budgetary control is not related to Performance, it can be concluded that the effective level of budgetary control will vary based on contextual factors. In this study, it appears that the effective level of budgetary control is at the net level for the funds within governmental entities. Budget and Budgetary Control for Improved Performance: A Consideration for Selected Food and Beverages Companies in Nigeria Ishola Rufus Akintoye Department of Economics, Faculty of the Social Sciences, University of Ibadan, Oyo State, Nigeria, West Africa. This study examines how budget and budgetary control can impact on the performance of the selected food and beverages companies in Nigeria, as considered in this study, being a sample of the entire population of the firms in the Nigerian Manufacturing Industry. We reviewed the performance of the Nigeria manufacturing industry in previous and recent times. We found out that the performance of this industry leaves much to be desired due to factors such as neglect of the industry due to over dependence on crude oil, epileptic power supply, collapsing infrastructures, unfavorable sectoral reforming among others and have resulted in low capacity utilization of the manufacturing industry. An empirical investigation was undertaken, using the simple correlation analytics technique specifically the Pearson product movement correlation coefficient. In most of cases considered, established the presence of strong relationship between turnover as a variable of budget and performance indicators – EPS, DPS and NAS, of the selected food and beverages companies. Following our findings, we advise managers and business operators to pay more attention to their budgetary control
9 systems, for those without an existing budgetary control system, they should put one in place, and those with a dummy or passive budgetary control system, it is time they re-established a result-oriented budgetary control system as it goes a long way in repositioning the manufacturing industry from its creeping performance level to an improved high capacity utilization point.
1.3INTRODUCTION TO BUDGET AND BUDGETARY CONTROL: BUDGET: A budget is a financial and /or quantities a statement prepared prior to a definite period of time, of the policy to be pursed during that period that for the purpose of attaining a given objective. A budget is a pre determined statement of management policy during a given period which provides a standard for comparison with the results actuality achieved. Advantages of budgets: A budget helps us in the following ways: 1. It brings about efficiency and improvement in the working of the organization. 2. It is a way of communicating the plans to various units of the organization. By establishing the divisional, departmental, sectional budgets, exact responsibilities are assigned. It thus minimizes the possibilities of buck passing if the budget figures are not met. 3. It is a way or motivating managers to achieve the goals set for the units. 4. It serves as a benchmark for controlling on-going operations. 5. It helps in developing a team spirit where participation in budgeting is encouraged. 6. It helps in reducing wastage and losses by revealing them in time for corrective action. 7. It serves as a basis for evaluating the performance of managers. 8. It serves as a means of educating the managers BUDGETING: Budgeting is the technique for formulation begets. Budgets are the individual objectives of a department, whereas budgeting is the act of building budgets BUDGETARY CONTROL:
11 Budgetary control involves the use of budget and budgetary reports, throughout the period to co-ordinate, evaluate and control day to day operations in accordance with the goals specified by the budget. Budgetary control techniques: I. a. b. c. d. e. Accounting techniques Standard costing Overhead and Sales variance, Marginal costing, Business Forecasting, Zero Base Budgeting
Advantages of budgeting and budgetary control : There are a number of advantages to budgeting and budgetary control: 1. Compels management to think about the future, which is probably the most important feature of a budgetary planning and control system. Forces management to look ahead, to set out d`etailed plans for achieving the targets for each department, operation and (ideally) each manager, to anticipate and give the organization purpose and direction. 2. Promotes coordination and communication. 3. Clearly defines areas of responsibility. Requires managers of budget centers to be made responsible for the achievement of budget targets for the operations under their personal control. 4. Provides a basis for performance appraisal (variance analysis). A budget is basically a yardstick against which actual performance is measured and assessed. Control is provided by comparisons of actual results against budget plan. Departures from budget can then be investigated and the reasons for the differences can be divided into controllable and noncontrollable factors. 5. Enables remedial action to be taken as variances emerge. 6. Motivates employees by participating in the setting of budgets.
7. Improves the allocation of scarce resources. 8. Economizes management time by using the management by exception principle. Problems in budgeting: Whilst budgets may be an essential part of any marketing activity they do have a number of disadvantages, particularly in perception terms. 1. Budgets can be seen as pressure devices imposed by management, thus resulting in: a. b. Bad labor relations Inaccurate record-keeping.
2. Departmental conflict arises due to: a. Disputes over resource allocation b. Departments blaming each other if targets are not attained. 3. It is difficult to reconcile personal/individual and corporate goals. a. Waste may arise as managers adopt the view, "we had better spend it or we will lose it". This is often coupled with "empire building" in order to enhance the prestige of a department b. Responsibility versus controlling, i.e. some costs are under the influence of more than one person, e.g. power costs. c. Managers may overestimate costs so that they will not be blamed in the future should they overspend. ESSENTAIL OF EFFECTIVE SYSTEM OF BUDGETARY CONTOL: There are certain steps which are necessary for the successful implementation of a budgetary control system. They are as follows: 1. Organization for budgetary control 2. Budget centers 3. Budget officer 4. Budget manual 5. Budget committee 6. Budget period
13 7. Determination of key factor.
Budget centers: A budget center is that part of the organization for which the budget is prepared. A budget center may be a department, section of department or any other part of the department Budget manual:
14 A budget manual is a document which spells out the duties and also the responsibilities of the various executives concerned with the budgets. It specifies the relations among various functionaries.
Budget officer: The chief executive, who is at the top of the organization, appoints some persons as budget officer. The budget officer empowered to scrutinize the budgets prepared by the various departmental heads and too many changes in them, if the situation so demands. The actual performance of different departments is communicated to the budget officer. He determines the deviations in the budget and takes necessary steps to rectify the deficiencies, if any. Budget committee: In a small scale concerns, the accountant is made responsible for preparation and implementation of budget. In large scale concerns a committee is known as a budget committee is formed. The heads of all important departments are made members of this committee. The committee is responsible for preparation and execution of budgets. The budget officer acts as so coordinator of this committee. Budget period: A budget period is the length of time for which a budget is prepared. The budget period depends upon a number of factors. It may be different for different industries or even it may be different in the same industries or business. Determination of key factor: A factor which influences all other budget is known as key factor or principle factor. There may be limitations on the quantity of goods concern may sell. In this case sales will be a key factor and all other budgets will be prepares by keeping in view the amount of the goods the concerns will be able to sell. The raw material supply may be limited, so production, sales and cash budgets will be decided according to raw materials budget. Similarly, plant capacity may be a key factor if the supply of other factors is easily available. Advantages of budgetary control:
15 The budgeting control system helps in fixing the goals for the organization as a whole and concerted efforts are made for its achievements. It enables economies in the enterprise. Some of the advantages of budgetary control are:
Maximization of profits: The budgetary control aims at the maximization of profits of the enterprise. To achieve this aim, a proper planning and coordination of different functions is undertaken. Co-ordination: The working of different departments and sectors is properly coordinated. The coordination of various executives and sub ordinates is necessary to for achieving budgeted targets. Specific aims: The plans, policies, and goals are decided by the top management. All efforts are together to reach the common goal of the organization. Every department is given a target to be achieved. The efforts are directed towards achieving some specific aims . Tool for measuring of performance: By providing targets to various budgetary control provides a tool for measuring performance. The budgeted targets are compared to actual reasons and deviations are determined. The performance of the each department is reported to the top management . Economy: The planning of expenditure will be systematic and there will be economy in spending. The finance will be put to optimum use. Determining weakness: The deviations in budgeted and actual performance will enable the determination of weak ports. Efforts are concentrated on those aspects where performance is less than the stipulated. Corrective action:
16 The management will be able to take corrective measures whenever there is discrepancy in performance. Reduce costs: In the present day competitive world budgetary control has a significant role to play. Every business man tries to reduce the cost of production for increasing sales.
Introduction of incentive schemes: Budgetary control system also enables the introduction of incentive schemes of remuneration. The comparison of budgeted and actual performance will enable the use of such schemes. LIMITATIONS: Uncertain futures: The budgets are prepared for the future period. Despite best estimates made for the future, the prediction may not always come true. The future is always uncertain and the situation which is presumed to prevail in future may change. Budgetary revisions required: Budgets are prepared on the assumptions that certain conditions will prevail. Because of future uncertainties, assumed conditions may not prevail necessitating the re vision of budgetary targets. The frequent revision of targets will reduce the value of budgets and revisions involve huge expenditure too. Problem of co ordination: The success of budgetary control depends upon the co-ordination among different departments. The performance of one department affects the results of other departments. Conflict among different departments: Budgetary control may lead to conflicts among functional departments. Every departmental head worries his department goals without thinking of business goal. Every department tries to get maximum allocation of funds and this raises a conflict among different departments. TYPES OF BUDGETS:
17 BASED ON TIME: Long term budgets: The budgets are prepared to depict long term planning of the business. The period of long term budgets varies between 5 to 10 years. Long term budgets are prepared for some sector of the forms concern such as capital expenditure, research and development, long term finance, etc.
Short term budgets: These budgets are generally one or two years are in the form of monitory terms. The consumers’ goods industries like sugar, cotton, textile, etc. use short term budgets. Current budgets: The periods of current budget is generally of months and weeks. These budgets related to the current activities of the business. BASED ON FUNCTION: Operating budgets: These budgets are related to the different activities or operations of a firm. The no. of such budgets depends upon the size and nature of business. The commonly used operating budgets are: 1. Sales budget 2. Production budget 3. Production cost budget 4. Purchase budget 5. Raw material budget 6. Labor budget 7 plant utilization budget 8. Manufacturing expenses or workers over head budget 9. Administrative and selling expenses budget Financial budget:
18 Financial budgets are concerned with cash receipts and disbursements, working capital, capital expenditure, financial position and results of business operations. The commonly used financial budgets are: 1. Cash budgets 2. Working capital budget 3. Capital expenditure budget 4. Income statement budget 5. Statement of retained earnings 6. Budgeted balance sheet or position statement budget BASED ON THE FLEXBILITY: Fixed budget: Fixed budgets are prepared for a given level of activity,; the budget is prepared before the beginning of financial year. The changes in expenditure arising out of the anticipated changes will not be adjusted in the budget. Flexible budget: A flexible budget consists of a series of budgets for different level of activities. Therefore, varies with the level of activity attained. A flexible budget is prepared after taking into consideration unforeseen changes in the conditions of the business. A flexible budget is defined as a budget which by recognizing the difference between fixed, semi fixed and variable cost is designed to change in relation to the level of activity. Master budget: Various functional budgets are integrated info master budgets. The budget is prepared by the ultimate integration of separate functional budgets. Definition: The master budget is the summary budget incorporating its functional budgets-----------ICMA. Master budget is prepared by the budget officer and it remains with the top level management. This budget is used to co ordinate the activities of various functional departments and also to help as control device. The various steps involved in the preparation of this budget is the preparation of the budget include the construction of sales budget, production budget, cost of production budget, cash budget and the projected income statement and the balance sheet.
Zero based budgets: Before preparing a budget, a base is determined from which the budget process begin. Quite often current year’s budget is taken as the base or the starting point for preparing the next year’s budget. The figures in the base are changed as per the plan for the next year. This approach of preparing a budget is called incremental budgeting since the budget process is concerned mainly with the increase or changes in operations that are likely to occur during the budget period. For example, sales of the current year’s budget may be taken as the base and next year’s budget for sales will be current year’s budget may be taken as the base and next year’s budget for sales will be current year’s sales plus allowance for price increases and expected changes in sales volumes. The main drawback of this conventional approach is that it perpetuates the past inefficiencies. Zero bases budgeting (ZBB) is an alternative to conventional or incremental budgeting. ZBB was introduced at Texas Instruments in USA in 1960 by Peter Phyrr, who is known as the father of ZBB. It is a managerial tool and is steadily gaining acceptance in the business community. ZBB not based on incremental approach and previous year’s figures are not taken as the base, for preparing next year’s budget. Instead, the budget figures are developed with zero as the base, which means that a budget will be prepared as if it is being prepared for a new company for the first time. Advantages of zero based budgets: In ZBB all activities included in the budget are justified on cost benefit consideration ZBB discards the attitude of accepting the current position in favour of an attitude of It is an educational process and can promote a management team of talented and skilful It facilitates identification of inefficient and unnecessary activities and avoid wasteful Cost behavior patterns are more closely examined. which promotes more effective allocation of resources. questioning and challenging each item of budget. people who tend to promptly respond to changes in the business environments. expenditure.
Disadvantages of zero based budgets: ZBB involves high cost of preparing budgets every year.
20 ones. It has a tendency to regard any activity not foreseen and sanctioned in the most recent ZBB as illegitimate. It also requires high volume of paper work. In ZBB there is danger of emphasising short-term gains at the expense of long-term
BUDGET PREPARATION: The company prepares its master budget along with budgets for major important functions like sales, production, cash, labor, etc. the budget is prepared by Budget Control and Cost Accounts (BCCA) department in consultation with the chief executive, departmental heads. After the initial budget preparation, it is approved by budget committee and finally, it is sent for the approval of Board of Directors at its head office at Mumbai. Normally the standards of last year are used as the basis for budget preparation with suitable adjustment. For example, rates of materials are adjusted according to the prevailing rates in the market. Similarly adjustment is made in labor cost depending on the budget period. Dearness is paid on the basis of All India cost of Living Index. Overheads are changed on percentage basis. When budgets are prepared and approved, these are communicated to respective heads of departments/ sections for implementation COMPARISON WITH ACTUAL PERFORMANCE OF PREVIOUS YEAR: It will be more meaningful, if the comparison of the current year actual is made with the previous year actual, in addition to the comparison of actual performance of the current year with the budgets. For this purpose, the profit and loss account and balance sheet as per the companies act, 1956 can be made use of. On the similar lines, reasons for variance are submitted to the management for taking appropriate actions. PREPARTION OF CASH BUDGET: A cash budget is an estimate of cash receipts and disbursements during a future period of time. It precedes various other budgets like material budgets research and development budget. Definition:
21 “The cash budget is an analysis of flow of cash in a business over a future, shot or long period of time. It is a forecast of expected cash intake and outlay” The cash receipts from various sources are anticipated. The estimated cash collections for sales, debts, bills receivables, interest, dividends and other incomes and sale of investments and other assets will be taking into account. The amount to be spent on purchase of materials, payment to creditors and meeting various other revenue and capital expenditure needs should be considered. Cash forecasts will include all possible sources from which cash will be received and the channels in which payments are to be made so that a consolidated cash position is determined. The cash budget should be coordinated with other activities of the business. The functional budget may be adjusted according to the cash budget. The available funds should be fruitfully used and the concern should not suffer for want of funds. Objectives of setting budgets: a. It is a plan of action and serves as a declaration of policies. b. It defines the objectives for all the executives. c. It provides a means of co-ordination and communication. d. Budgets facilitate centralized control with delegated authority and responsibility. e. It provides comparison of actual performance with budgets f. Only the exceptions are reported to the management so that corrective action can be taken in order to achieve the objectives laid down by the management
1.4 NEED OF THE STUDY: NFCL is a manufacturing concern relating to the fertilizers; it has two plants which involves a lot of direct and indirect costs towards operating it. As there is a heavier competition in the market of fertilizers in order to cope up and sustain in the market, it has to operate effectively by reducing the cost and by avoiding the wastages which are involved in it. So I have choosen one of the best and popular cost control technique budgetary control to have effectiveness and removal of wastages from its operations and such that it runs competitively.
1.5 ABOUT THE COMPANY VISION: Global “Leadership” in Plant Nutrition Excellence in products/performance, processes/costs and relationships VALUES: Deliver solutions that will please our customers Deliver returns that motivate our investors Take actions that strengthen us and inspire the best in others (by setting an example in relationships, integrity, honesty, humility and hard work) by understanding the deep and fundamental needs of Our People, Our Customers, Our Investors and Our Ecosystem (Alliances, Community and Environment) THE GROUP: Founded in 1973 by Shri K V K Raju with a modest investment of US$ 23 million, the Nagarjuna Group today is a prominent industrial house in India with an asset base of US$ 2.5 billion. 1974: Birth of a business group that pioneered several core sector enterprises in the coming decades. Starting with manufacturing steel, Nagarjuna Steels Limited was launched.
24 1985: With focus on agriculture input business started plant nutrition business with Nagarjuna Fertilizers and Chemicals Limited. 1992: Forayed into the Crop Protection Business with investments in Pesticide Formulations manufacturing followed by Technical Grade Manufacturing in the year 1994. 1994: Micro irrigation business started to address the irrigation problems of farmers living in water and energy scarce regions. 1995: Ventured into Energy sector. Entered into power generation by setting up Nagarjuna Power Corporation Limited. 1997: Entered into petroleum by setting up Nagarjuna Oil Corporation Limited. Consolidating its core activities, today the Group’s major operations cover Agri and Energy sectors. FOUNDER: SHRI K V K RAJU - AN ETERNAL SOURCE OF INSPIRATION
Nagarjuna Group is a dream willed into reality by its visionary Founder Shri KVK Raju. Shri KVK Raju a first generation technopreneur was born in a humble agricultural family in Andhra Pradesh on November 28, 1928. On graduating from Banaras Hindu University and the Madras Institute of Technology he went on to complete his Master's in Mechanical and Industrial Engineering from Michigan State University and the University of Minnesota, USA. After a short stint in the American Industry he returned to India and worked for short periods at Caltex Oil Refinery, Orient General Industries and Associated Electrical Industries.
25 Finally, he joined Union Carbide of India and worked with them for 15 years. While working with Union Carbide, KVK's deep-rooted urge to serve society through industry impelled him to start out on his own. Thus was born Nagarjuna Group in 1973 with an investment of US$ 23 million. The Group has since then come a long way to become a diversified conglomerate with an asset base of US$ 2.5 billion. A recipient of various awards for his outstanding contribution to the industry and society, KVK, was a firm believer in the adage "practice what you preach". A self-made man KVK practiced simple living and high thinking. He dreamt big and worked with an unstinted focus of mind and body to make his dreams come true. KVK was a visionary with firm belief in his mission to serve society through industry. It is this belief, which continues today to be the guiding light of Nagarjuna Group
The flagship company of the Nagarjuna Group, Nagarjuna Fertilizers and Chemicals Limited is a leading manufacturer and supplier of plant nutrients in India. Commencing operations in 1985, today our asset base is around Rs. 21 billion. We have the distinction of being the single largest private sector investment in Southern India. An ISO 9001:2000 certified company; our operational profits are one of the highest in the industry. We assume market leadership in the markets we operate. Our broad portfolio of products and services include: • • Nutrition solutions: Macro and Micro fertilizers and Farm Management services Micro Irrigation solutions
We offer our expertise for the management of chemical process plants, which include Specialist Services and Total Project Management.
26 Our operations and offerings have been aligned into three strategic business units: • Straight Nutrition Business • Nutrition Solutions Business • Nagarjuna Management Services To survive, grow and attain leadership position in our areas of operation it is essential for us to identify and capitalize on emerging opportunities. Preparing for the future, proactively, we are addressing the most important aspects of our organization: Strategy – Having a long term vision for the company Structure – To facilitate achieve our strategy People – Aligning related policies with Strategy and Structure. In turn to build the right capability, attitude and behavior in employees Process – To enable employees to work more efficiently and effectively, to have the best in class internal business processes. Our Endeavour is to unlock the full potential of our people by transforming into a performance driven organization that attracts the best talent, nurtures a more productive and results-focused workforce and implements initiatives, which align people strategies with organizational objectives. The key action areas in this road map are:
Facilitating redefinition of organization structure to support NFCL’s business direction, goals and priorities. Evolving a people management philosophy and institutionalizing systems and policies that reflect uniformity, fairness and transparency. Establishing Best in Class HR systems and processes, in line with organizational requirements. Facilitating creation of a performance based culture with clear linkages to rewards and careers.
27 Defining the organization capability framework and assessing organizational people capability to support NFCL’s vision.
1.6 OBJECTIVES OF THE STUDY: 1. To evaluate the budgetary control practices followed in NFCL. 2. To make a prediction about capital expenditure for NFCL. 3. To have comparative analysis among different fertilizer companies.
1.7 SCOPE OF THE STUDY:
1. The time period considered in the study is two financial years i.e., from 2007-08 to 2008-09. 2. The study is confined to the manufacturing costs and details of NFCL.
2. DESIGN OF THE STUDY: 2.1 RESEARCH METHODOLOGY: The present study is mainly about the measuring the effectiveness of budgets at NFCL and the following methodology was adopted: 1. 2. 3. 4. 5. 6. Understanding the concept of budgeting. Preparing budgeting reports. Projection of budget for 2009-10 basing on assumptions Finding out the deviations between actual and estimated figures. Giving the appropriate reasons for such variances. Comparison of P&L account and Balance sheet of various fertilizer companies
2.2 DATA COLLECTION: The data needed for the study was collected from the following sources:
A) Primary source:
29 Collected information through interactions from various personnel (at different hierarchies) in the departments of Finance and Accounts at NFCL B) Secondary source: The data is collected from the following secondary sources: 1. Annual reports of the company 2. Books (relating to budgeting) and 3. Internet
2.3 LIMITATIONS OF THE STUDY: 1. The study is confined to NFCL only. 2. The lesser time frame for understanding this study is also a significant limitation.
3. ANALYSIS: 3.1 BUDGET PROJECTION FOR 2009-2010:
SL.NO INCOME 1 2 3 4 5 6 Capacity P1 P2
BUDGET 2008-2009 11.946 7.566 6.733 14.298 0 14.298 584.86
PROJECTION FOR 2009-2010 11.946 7.5465 6.353 15.58482 424.4896 15.58482 637.4974
11.946 7.527 5.973 13.5 389.44 13.5 375.36
Production (urea) Production (mi) Sales(urea) Sales(mi)
Manufactured urea Plant 1 Specific energy Variable cost Fixed cost Group concession Plant 2 Specific energy Variable cost Fixed cost Group concession
5.535 3520 3095 6615
5.534 3827 3095 6922
221.36 3445 3095 6928.922
5.627 12839 2712 15551 700 66243.56
5.621 11515 2712 14227 900 71545.4
281.05 103635 2712 156497 1215 77984.45
8 9 10
Freight subsidy Sales Subsidy Normal production Urea P1 P2 Additional production Urea P1 P2 Other income EXPENDITURE Purchases (raw materials) Power and fuel Salaries ,wages and benefits Packing materials consumed Distribution expenses Other expenses
11375.09 65111.08 3026.07 0 480
13569.75 57205.73 3456.34 6523.47 117.5
16012.305 67502.7614 4078.48 7697.69 129.25
1 2 3 4 5 6
73815.99 26781.82 5883.12 6398.02 765 8267.38
77294.1 26769.76 6987.38 6341.44 532.95 8122.63
82704.687 27305.1552 82947.7188 6595.0976 586.245 8528.76
Budget Projection for 2009-2010
ASSUMPTIONS: 1. Plant utilization up to 100%. 2. Book value of plant 1 and 2 i.e. 7.5465 crores and 6.353 crores is taken under the condition of 100% capacity and these are the values taken on the basis of average of previous years. 3. Here the growth rate is taken is 9% for both production of UREA and MI and sales on the basis of following factors. Area coverage under sown is 638.33 lakhs hector which increased a lot when Compared to the previous year (10%). Irrigational potential has Increased 81.1 to 102.08 % up to previous year and more over the govt has come with improved accelerated irrigation benefit program (alibi)-special grant extension programs for pending projects, increased international demand for fertilizers about (11%), And fertilizer consumption compared to previous year and apart from this growth
33 observed is (6%), Rain falls are expected according to predications.
4. As this year, The Company is going to use gas as raw material, the expenses relating to the specific energy is increased because previously the company is used naphtha as major raw material for the production which incurs more cost than gas. At the same time variable cost of naphtha raw materials is reduced to larger extent. And fixed cost of production is kept as same as it is observed from previous budget. Group concession is shown at a normal growth of previous budget. 5. The subsidy towards agriculture and fertilizers this year is shown a good growth from previous years and is about 99456 crores. As keeping this in the mind growth relating to subsidy is observed 29% previously, so this time it is more than that. Hence considered 35%as growth rate (huge govt support this time for fertilizer industry to increase the production and productivity). 6. Hence the demand, subsidy, support price, grown sown area, good rain fall prediction and many other programs may lead to good growth rate when compared to the previous (8%). On basis of above things 2% growth rate is taken on previous year percentage. 7. As earlier mentioned that the subsidy towards the agriculture and fertilizers is in this financial year is more compared to the previous years i.e,15% growth rate ,Hence applied better rate than that of previous years and it is about 18%. 8. As keeping in the mind regarding inflation rate, market trends and other variable conditions, The expenditure relating to the purchase of raw materials for future may be expected to be more than previous years and apart from this supply of raw materials in regard of manufacturing is falling short that of demand .Hence they need to pay more for the suppliers to get the required things. 9. In the previous budget there is decline in the growth rate of expenditure on fuel and power ,But as on present conditions of market in regard of fuel and power is increasing rather than decrease .Hence in that view, Increased 2% on previous year budget. 10. The growth rate relating to the salaries, wages and benefits are applied as same as the previous year. Such that the employees, workers and others work dedicatedly and
34 loyally towards the organizational goal. 11. As on the basis of increasing production of units, packaging materials required will be also be more .So, 4% is taken as growth rate on previous year. 12. They have taken 10% growth rate which normally which prevails in the market rent deeds but where as in the previous year budget they have shown declined growth rate. 13. In the present situation, expenses, rates, taxes, and maintained relating have been increased (inflation).In the same line, some nominal growth rate is applied, which is normally observed in the market every year due to various factors. 14. As the present market is slowly recovering, and flow of funds in market is low so as per assumptions, banks and other institutional lenders may provide at lesser interest rate when compared to previous years and it would be very beneficial to the company in financial terms. 15. As per the norms of the companies act and company, depreciation % and method will be depending. As per that, it had been applied. 3.2VARIANCE ANALYSIS:
RS IN LAKHS BUDGET ACTUALS VARIANCE BUDGET ACTUALS VARIANCE 2007-08 2007-08 2007-08 2008-09 2008-09 2008-09 65100.69 480 8267.38 14992.65 12567.5 6940.71 66190.91 1984.33 6600.4 16296.63 12015.21 4013.03 1090.22 1504.33 -1666.98 1303.98 -552.29 -2927.68 70058.91 117.5 8122.63 12916.5 12229.94 2251.29 237191 1199 204334 16932 12096 5028 167132.O9 1081.5 196211.37 4015.5 133.94 2776.71
Net sales Other income Total expenditure Interest and Financing charges Depreciation PBT
Variance analysis 2007-2008
Variance analysis 2008-2009
ANALYSIS: 1.Net sales The amount appear in budget2007-08 is 65100.69 lakhs and in actual is 66190.91 lakhs. Which is almost having a variance of 1090.22 lakhs, It had little variance when compared to the budget 2008-09, which had huge variance i.e., 167132.09 lakhs (app)because the forecasting regarding the wheather is favorable towards farmers 2.Other income The amounts which the company is taken as other income for both the budgets is 480 and 117.5 lakhs which are very low when compared to the actual generated i.e,1984.33 and 1199 lakhs respectively. This shows that company’s effectiveness and efficiency in investing and other related activities 3.Total expenditure When coming to expenditure it had been observed that the budgeted amount for year 2007-08 is more than the actual generated i.e., 8267.38 lakhs in budget and where the actual is 6600.4 and having a variance about -1666.98 lakhs in the next budget i.e,2008-09,Once again there exists a broad variance of 196211.37 lakhs among budgeted amounts and actual. which explains that the company is unable to meet their expenditure according to planned budget. By this we say that they need to improve their standards regarding the budget.
4.Interest and financing charges Amounts scattered in interest and financing charges of budgets 2007-08 and 2008-09 are somewhat low than the actual of that particular year and comparative variances of other heads such as total expenditure, sales etc, 5.Depreciation In budget 2007-08 the amount allocated towards depreciation is more of 552 lakhs than of actual and in later budget i.e., 2008-09 it is more of 133.94 lakhs forecasted than of actual of that particular year. 6.Pbt Figures in the budget 2007-08 relating to the PBT are over casted of 2927.68 lakhs of actual and under casting of 2776.71 lakhs of the actual 2008-09.
3.3COMPARATIVE STATEMENT FOR 2008-2009: PARTICULARS INCOME Sales turn over Excise duty Net sales Other income Stock adjustments Total income EXPENDITURE Raw materials Powerful cost Employee cost Other manufacturing exp Selling and admin exp Miscellaneous expenses Total expenses Operating profit 1341.04 311.59 59.33 14.62 255.85 8.66 1991.09 303.48 0.59 0.15 0.6 0.18 0 3.02 4.54 -3.29 1130.48 560.82 72.46 79.63 314.32 18.35 2176.06 481.07 699.75 18.56 57.86 10.24 30.39 28.17 844.97 180.16 1,130.0 3 259.61 40.87 17.34 66.24 17.52 1531.61 93.18 2818.28 66.18 97.66 30.84 239.97 44.86 3297.79 436.29 NFCL amt 2193.59 0 2193.59 -29.07 100.98 2265.5 BHARTH CHAMBAL DEEPAK amt Amt amt 1.43 0.12 1.31 0.09 -0.06 1.34 2728.78 0.52 2728.28 74.73 -71.13 2731.86 11,142.71 90.57 1052.14 32 -27.01 1057.13 MFCL Amt 1627.67 2.28 1625.39 -3.5 -0.6 1621.29 CORMONANDEL Amt 3844.09 44.31 3799.78 20.89 -65.7 3754.97
38 PBDIT 274.41 Interest 162.97 PBDT 111.44 Depreciation 120.15 Other written off 0 Profit before tax -8.71 Extra ordinary 0.27 items PBT(post extra-ord -8.44 items) Tax 13.31 Reported net profit 22.49 Total value 650.05 addition Preference dividend 0 Equity dividend 0 Corporate dividend 0 tax Shares in issue 4281.82 Earnings per share 0.53 Equity dividend 0 Book value 20.3 -3.2 0.78 -3.98 0.9 0 -4.88 -0.28 -5.16 0.01 -5.18 3.95 0 0 0 -9.81 0 4.58 555.8 102.67 453.13 184.94 1.09 267.1 2.78 269.88 64.28 203.8 1045.57 0 74.92 12.73 4162 4.9 18 27.35 212.16 15.95 196.21 44.71 0 151.5 0 151.5 51.25 100.27 145.22 0 30.87 5.25 882.05 11.37 35 79.23 89.68 15.43 74.25 15.91 0 58.34 -1.73 56.61 20.65 40.46 401.58 0 7.11 1.21 1185.15 3.41 6 23.64 457.18 71.65 385.53 52.13 0 333.4 -1.2 332.2 122.46 209.76 479.51 0 48.96 8.32 1398.97 14.99 175 56.79
ANALYSIS: 1. The lion share in sales turnover is occupied by Coromandel fertilizers (3844.09 crores) and next to it is Nagarjuna fertilizers with 2193.59 crores, followed by Chambal, Mangalore, Deepak and Bharth fertilizers respectively. 2. Some slight variations appeared from sales turnover to net sales in the following companies Bharth fertilizers (-0.12 crores), Deepak fertilizers (-90.57 crores), Mangalore fertilizers (-2.28 crores), coromandel fertilizers (-44.31 crores). 3.The highest other income is shown by Chambal fertilizers(74.73 crores),next to it is Deepak fertilizers with(32 crores)and Bharth fertilizers is (0.09 crores).where as the other two companies are showing negative other income. 4.Once again coromandel is having highest share in total income of 3754.97 crores, later it followed by Chambal fertilizer with 2731.86 crores and nagarjuna fertilizer with 2265.5 crores, Bharth fertilizer with least amount of 1.34 crores. 5. Nagarjuna fertilizer is making an expense of 1652.63 crores towards its raw materials and power & fuel with 3rd in its position. Whereas coromandel fertilizer is having a variance of
39 1100 crores from NFCL and placing it as 1st position in expenses.
6. Coromandel fertilizer is incurring highest employee cost of 97.66 crores when compared to the other companies. 7. Chambal fertilizer is making higher expenses towards selling and distribution of 314.32 crores but where as coromandel which is having highest sales turnover is making lower than it i.e, 239.97 crores. And when coming to NFCL it is also making a higher amount of money towards S&D expenses comparing to its sales turn over. 8. Chambal fertilizer is recorded with highest operating profit of 481.07 crores, coromandel fertilizer with 436.29 crores and nagarjuna fertilizer with 303.48 crores and it is good sign to the companies. 9. NFCL is a company which is spending huge amount in the terms of interest towards their borrowing i.e,162.97 crores and it is higher amount when compared to other companies ,it is not a good sign to the company that more financial risk. 10. PROFIT before tax of NFCL and Bharth fertilizer is showing a negative sign and where as coromandel fertilizer is showing is showing a good figure of 333.4 crores.
11. Earnings per share available to the investors is higher in the coromandel fertilizers i.e., 14.99 crores when we make comparisons with others and where Bharth fertilizers is showing a negative value.
3.4 COMPARATIVE BALANCE SHEET FOR 2008-2009
BALANCE SHEET Sources of funds Total share capital Equity share capital Share application money Preference share capital Reserves Revaluation reserves Net worth Secured loans Unsecured loans Total debt Total liabilities Application of funds Gross block Less: Accum. Deprecation Net block Capital work in progress Investments Inventories Sundry debtors Cash and bank balance Total current assets Loans and advances 3892.7 8 1835.9 1 2056.8 7 30.23 722.46 189.24 298.14 21.66 509.04 416.87 28.73 21.69 7.04 0 0.02 6 0.35 0.41 6.76 1.71 3213.86 1593.03 1620.83 709.58 307.41 302.6 163.1 58.57 524.27 472.03 1039.22 487.68 551.54 248.19 142.75 79.24 216.81 11.76 307.81 96.31 581.24 272.21 309.03 15.57 0.05 170.68 17.01 59.91 247.6 514.65 1125.93 401.38 724.55 10.84 351.34 864.87 102.59 52.95 1020.41 606.93 NFCL Amt 465.18 427.97 6.53 37.2 441.03 760.94 1673.6 8 1391.3 1 62.42 1443.7 3 3127.4 1 BHARTH CHAMBAL DEEPAK amt Amt amt 5.29 5.29 0 0 -2.86 0 2.43 2.6 2.03 4.63 7.06 416.21 416.21 0 0 722.06 0 1138.27 1612.98 280.65 1893.63 3031.9 88.2 88.2 0 0 610.6 0 698.8 198.39 150.99 349.38 1048.18 MFCL amt 118.55 118.55 0 0 161.61 92.65 372.81 355.75 24.25 380 752.81 COROMANDEL Amt 27.98 27.98 0 0 766.46 0 794.44 512.27 400.41 912.68 1707.12
Fixed deposits Total ca, loans &advances Differed credit Current liabilities Provisions Total Cl &provisions Net current assets Miscellaneous expenses Total assets Contingent liabilities book value 9.54 935.45 0 470.62 146.97 617.59 317.86 0 3127.4 2 231.65 20.3 0 8.47 0 8.32 0.15 8.47 0 0 7.06 0.51 4.58 4.1 1000.4 0 468.92 138.78 607.7 392.7 1.36 3031.88 854.68 27.35 18.29 422.41 0 274.68 43.22 317.9 104.51 1.21 1048.2 184.05 79.23 0 762.25 0 276.01 58.08 334.09 428.16 0 752.81 35.67 23.64 13.37 1640.71 0 916.66 103.66 1020.32 620.39 0 1707.12 64.25 56.79
ANALYSIS 1. The amount raised through share capital in nagarjuna fertilizers is appearing higher amount when compared to the others i.e, 465.18 crores and in Bharth fertilizers it is only about 5.29 crores. 2. When coming to reserves, Coromandel, Chambal and Deepak are maintaining huge amounts as reserves from the part of their profits .NFCL is also showing the reserves but not in the proportion of coromandel, Chambal and Deepak fertilizers. 3. Net worth of the NFCL is showing a good figure i.e., 1673.68 crores, Where the other companies showing below 1000 figure. It shows the soundness of the organization and creates a good image in minds of the people. 4. Investments made by the company also carries a good name in the view of investors and NFCL is the which made huge investments in the name of company in other companies i.e,722.46 crores and where as other companies have not invested 50% of NFCL also.
5. Coming to total current assets NFCL is maintaining a good proportion to other companies i.e., 509.04 crores where as Chambal is 524.27 crores and coromandel fertilizer is 1020.41 crores. 6. Current liabilities to be paid to the lenders is more appearing in coromandel and Chambal fertilizers while others are somewhat less when compared highest possessing
42 assets company is nagarjuna fertilizers with 3127.42 crores when compared to the companies like Bharth, coromandel, Deepak, Mangalore, and Chambal fertilizers .it is a health sign to the company and trustee sign in the minds of investors.
FINDINGS 1. More demand for urea and its byproducts. (According to economic survey 2008-2009) 2. The subsidy and govt support towards the agriculture and fertilizers industry is showing good growth rate. (According to economy survey 2008-2009) 3. Expenditure relating to the raw material is showing fast growth rate for NFCL. 4. As production of fertilizers is showing a growth, packing materials required is also more. 5. Variance in the net sales of NFCL is showing low when compared to other fertilizer companies for two financial year’s i.e. 2008 and 2009. 6. Amounts scattered in interest and financing charges of budgets 2007-08 and 2008-09 are somewhat lower than actual of that particular year. This shows that company is going for more debts from outside than what it expected. 7.In budget 2007-08 the amount allocated towards depreciation is more of 552 lakhs than of actual and in the later budget 2008-09 it is more of 133.94 lakhs forecasted than of actual of that particular year. 8. Chambal fertilizer is making higher expenses towards selling and distribution is standing first with 314.32 and NFCL is standing in third position, it may act as good sign for NFCL as it is fewer amounts.
9. Coromandel fertilizer is occupying lion share in sales turn over and next to it is nagarjuna fertilizer with 2193.59 crores. 10. Earnings per share available to the investor is higher in coromandel fertilizers i.e.14.99crores Where NFCL is standing at 4th position with very less amount i.e.53 crores. 11. Net worth of the NFCL is showing a good figure i.e. 1673.68crores where other companies showing below 1000 crores. 12. Investments made by the NFCL is huge and which played a vital role in carrying good name and fame in the mind of investor, suppliers etc, 13. Highest possessing of assets is NFCL among all the fertilizer companies compared.
SUGGESTIONS: A budget is treated as an important tool by organization in the management of its financial resources. With the help of proper maintenance of budget and budgetary control, can allocate funds for appropriate purpose; keep spending within bounds and better use of its funds. The following are the things which help in increase effectiveness of budgetary control. a. Budgetary control avails huge benefits if it properly applied. But it is not possible in the
NFCL because it does not have proper structure and pattern of organization, as knowledge also lies in the lines of authority and it is possible to get full advantage only the structure is proper. b. NFCL needed to divide the organization into sub units. Such that decision centers and
profit centers. Which will be also used as investment, profit, cost centres and improves responsibility and accountability of employees towards their work. c. NFCL is required to maintain a systematic way of recording budgets. They must be
flexible enough for making monthly or quarterly budgets and for facing any future consequences. They can estimate the budgets logically basing not only on the past estimated/actual figures but also the considerations affecting the future profits of the concern. Further, employing various budgetary control techniques are Accounting Techniques like Standard costing (comprising Overhead and Sales variance), Marginal costing, Business Forecasting, Zero Base Budgeting and.
Conclusion: NFCL is one of the leading manufacturer of fertilizers, it has given many subsidies by the government in regard to provide the fertilizers at lower price to farmers. NFCL has a huge capacity to produce UREA and MI in their respected plants when compared to other fertilizer companies such as Deepak, Bharth, Chambal fertilizers. Expenditure relating to the raw materials is showing the faster growth in NFCL and along with they are also going for more borrowings from outside then what they have expected. Apart from this company is also possessing huge investments and returns on it when compared to all other companies (as per the study). NFCL is also incurring less amount towards its distribution channel and it has huge assets in its hand, which shows the soundness of the company.
BIBLIOGRAPHY: Websites: http://www.allbusiness.com/government/3568664-1.html http://www.fao.org/docrep/W4343E/w4343e05.htm http://findarticles.com/p/articles/mi_hb5951/is_200201/ai_n24060105?tag=rel.res1 http://findarticles.com/p/articles/mi_hb5951/is_200201/ai_n24060105?tag=rel.res1 http://www.laynetworks.com/Accounting%20and%20Finance%20on%20Computers.htm http://www.centage.com/partners/programs-prn.asp http://www.centage.com/products/reporting-and-analysis-prn.asp Books: P.V.Rathnam., Budgeting, Bombay, Himalaya publishing house, 1994 Cost and management by Maheshwari. Cost accounting R.S.N. Pillai V. Bagavathi. COLIN DRURY, Cost and management accounting, sixth edition, Thomson Learning,
48 BUDGET 2007-2008 11.946 7.527 5.973 13.5 389.44 13.5 375.36 BUDGET 20082009 11.946 7.566 6.733 14.298 0 14.298 584.86
SL.NO 1 2 3 4 5 6 INCOME Capacity P1 P2
Production (urea) Production (mi) Sales(urea) Sales(mi)
Manufactured urea Plant 1 Specific energy Variable cost Fixed cost Group concession Plant 2 Specific energy Variable cost Fixed cost Group concession
5.535 3520 3095 6615
5.534 3827 3095 6922
5.627 12839 2712 15551 700 66243.56
5.621 11515 2712 14227 900 71545.4
8 9 10
Freight subsidy Sales Subsidy Normal production Urea P1 P2 Additional production
49 Urea P1 P2 11 Other income EXPENDITURE Purchases (raw materials) Power and fuel Salaries ,wages and benefits Packing materials consumed Distribution expenses Other expenses Interest and financial charges Depreciation 3026.07 0 480 3456.34 6523.47 117.5
1 2 3 4 5 6 7 8
73815.99 26781.82 5883.12 6398.02 765 8267.38 14992.65 12567.5
77294.1 26769.76 6987.38 6341.44 532.95 8122.63 12916.5 12229.94
Table PARTICULARS INCOME Sales turn over Excise duty Net sales Other income Stock adjustments Total income EXPENDITURE Raw materials 1341.04 0.59 0.15 0.6 0.18 0 3.02 4.54 -3.29 -3.2 0.78 -3.98 0.9 0 -4.88 -0.28 -5.16 0.01 -5.18 3.95 0 0 0 -9.81 0 1130.48 560.82 72.46 79.63 314.32 18.35 2176.06 481.07 555.8 102.67 453.13 184.94 1.09 267.1 2.78 269.88 64.28 203.8 1045.57 0 74.92 12.73 4162 4.9 18 699.75 18.56 57.86 10.24 30.39 28.17 844.97 180.16 212.16 15.95 196.21 44.71 0 151.5 0 151.5 51.25 100.27 145.22 0 30.87 5.25 882.05 11.37 35 1,130.0 3 259.61 40.87 17.34 66.24 17.52 1531.61 93.18 89.68 15.43 74.25 15.91 0 58.34 -1.73 56.61 20.65 40.46 401.58 0 7.11 1.21 1185.15 3.41 6 2818.28 66.18 97.66 30.84 239.97 44.86 3297.79 436.29 457.18 71.65 385.53 52.13 0 333.4 -1.2 332.2 122.46 209.76 479.51 0 48.96 8.32 1398.97 14.99 175 NFCL amt 2193.59 0 2193.59 -29.07 100.98 2265.5 BHARTH CHAMBAL DEEPAK amt Amt Amt 1.43 0.12 1.31 0.09 -0.06 1.34 2728.78 0.52 2728.28 74.73 -71.13 2731.86 11,142.71 90.57 1052.14 32 -27.01 1057.13 MFCL Amt 1627.67 2.28 1625.39 -3.5 -0.6 1621.29 CORMONANDEL Amt 3844.09 44.31 3799.78 20.89 -65.7 3754.97
Powerful cost 311.59 Employee cost 59.33 Other 14.62 manufacturing exp Selling and admin 255.85 exp Miscellaneous 8.66 expenses Total expenses 1991.09 Operating profit 303.48 PBDIT 274.41 Interest 162.97 PBDT 111.44 Depreciation 120.15 Other written off 0 Profit before tax -8.71 Extra ordinary 0.27 items PBT(post extra-ord -8.44 items) Tax 13.31 Reported net profit 22.49 Total value 650.05 addition Preference dividend 0 Equity dividend 0 Corporate dividend 0 tax Shares in issue 4281.82 Earnings per share 0.53 Equity dividend 0
51 Book value Table
BALANCE SHEET Sources of funds Total share capital Equity share capital Share application money Preference share capital Reserves Revaluation reserves Net worth Secured loans Unsecured loans Total debt Total liabilities Application of funds Gross block Less: Accum. Deprecation Net block Capital work in progress Investments Inventories Sundry debtors Cash and bank balance Total current assets Loans and advances Fixed deposits Total ca, loans &advances Differed credit Current liabilities Provisions Total Cl &provisions Net current assets Miscellaneous expenses Total assets Contingent liabilities 3892.7 8 1835.9 1 2056.8 7 30.23 722.46 189.24 298.14 21.66 509.04 416.87 9.54 935.45 0 470.62 146.97 617.59 317.86 0 3127.4 2 231.65 28.73 21.69 7.04 0 0.02 6 0.35 0.41 6.76 1.71 0 8.47 0 8.32 0.15 8.47 0 0 7.06 0.51 3213.86 1593.03 1620.83 709.58 307.41 302.6 163.1 58.57 524.27 472.03 4.1 1000.4 0 468.92 138.78 607.7 392.7 1.36 3031.88 854.68 1039.22 487.68 551.54 248.19 142.75 79.24 216.81 11.76 307.81 96.31 18.29 422.41 0 274.68 43.22 317.9 104.51 1.21 1048.2 184.05 581.24 272.21 309.03 15.57 0.05 170.68 17.01 59.91 247.6 514.65 0 762.25 0 276.01 58.08 334.09 428.16 0 752.81 35.67 1125.93 401.38 724.55 10.84 351.34 864.87 102.59 52.95 1020.41 606.93 13.37 1640.71 0 916.66 103.66 1020.32 620.39 0 1707.12 64.25 NFCL Amt 465.18 427.97 6.53 37.2 441.03 760.94 1673.6 8 1391.3 1 62.42 1443.7 3 3127.4 1 BHARTH CHAMBAL DEEPAK amt amt amt 5.29 5.29 0 0 -2.86 0 2.43 2.6 2.03 4.63 7.06 416.21 416.21 0 0 722.06 0 1138.27 1612.98 280.65 1893.63 3031.9 88.2 88.2 0 0 610.6 0 698.8 198.39 150.99 349.38 1048.18 MFCL Amt 118.55 118.55 0 0 161.61 92.65 372.81 355.75 24.25 380 752.81 COROMANDEL Amt 27.98 27.98 0 0 766.46 0 794.44 512.27 400.41 912.68 1707.12
book value 20.3 4.58 27.35 79.23 23.64 56.79
VARIENCE ANALYSIS PARTICULARS Net sales Other income Total expenditure Interest and Financing charges Depreciation Pbt VARIANCE VARIANCE 2008-09 2007-08 167132.O9 1090.22 1081.5 1504.33 196211.37 -1666.98 1303.98 -552.29 -2927.68 4015.5 133.94 2776.71
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