Budgetarv Control

of Aational Fertilizers Limited, Bathinda
Page 2
·.·~.·· · |~ '··..··~'.
Feiiilizei Indusiiy
Iniioduciion io NFL
Classificaiion of NFL Pioducis
Bailinda Unii of NFL
Reseaicl Meilodology
Iniioduciion io Budgeiaiy Siudy
Budgeiaiy Coniiol Sysiem ai NFL
Daia Analysis 8 Inieipieiaiion
Findings
Recommendaiions
Conclusion
Page 3
~.··|·.~. :.'.··.·
Feiiilizei indusiiy in India is meeiing all ile iequiiemenis of agiiculiuial indusiiy
since ile iime of iis incepiion in iŭoŪ. Tle fiisi plani foi feiiilizeis manufaciuie was
sei up in ile same yeai in Ranipei, Clennai.
Tlen esiablisled ile fiisi iwo laige-sized feiiilizei planis:
i. Feiiilizei 8 Clemicals Tianvancoie of India Lid. (FACT) in Coclin, Keiala
:. Feiiilizeis Coipoiaiion of India (FCI) in Sindii, Bilai.
Ai pieseni, India las moie ilan ũū laige sized planis of feiiilizeis, wlicl includes
Public secioi Indusiiies 8 Piivaie Secioi Indusiiies,
Apaii fiom ii, ileie aie oilei ŪŨ small and medium scale Indian manufaciuieis
pioducing feiiilizeis.
India las become iliid laigesi couniiy wiil a ioial capaciiy of ii.oū million ions of
N in yeai :ooo-:ooi.
Naiuial gas las been ile piefeiied feedsiocl foi ile manufaciuie of uiea ovei oilei
feed siocls viz. naplila and FO]LSHS:
i. Fiisily, because ii is clean and efficieni souice of eneigy and
:. Secondly, ii is consideiably cleapei and moie cosi effeciive in ieims of manufaciuiing
cosi of uiea
Page 4
:.·.'..··. · ·
Page 5
Mission oI NFL
NFL's mission is io be a mailei leadei in feiiilizeis 8 a significani playei in
all iis oilei business, iepuied foi cusiomei saiisfaciion, ieasonable iewaid io
slaieloldeis, eilics, piofessionalism 8 concein foi ecology and ile
communiiy."
Regisieied on :¸ Augusi, iŭūŨ
Auiloiized capiial Rs. ũoo.oo Cioies
Paid up Capiial Rs. Ũŭo.ũŬ Cioies
Capaciiy¯ iŨ.ŬŪ Lall MT Niiiogen
NFL was incoipoiaied on :¸id Augusi, iŭūŨ wiil iwo niiiogenous
manufaciuiing Uniis ai Bailinda(Puniab) and Panipai(Haiyana)
On ile ieoiganizaiion of Feiiilizei Coipoiaiion of India Limiied (FCI) -
NFL gioup of Companies, ile Nangal Unii of FCI came undei ile NFL fold
on i
si
Apiil,iŭūŬ.
Laiei on, a gas based feiiilizei plani was eniiusied io NFL. Ii las come up
ai Viiaipui, Madlya Piadesl, wlicl siaiied pioduciion in Iuly iŭŬŬ.
Page 6
&.··· & O::·.~·
NFL las Iouv op¢vating units and on¢ C¢ntva! Mavk¢ting OIIi¢¢ wiil
Zonal Offices ai Clandigail, Blopal, Luclnow and New Delli. Ii las iis
¢gist¢v¢d OIIi¢¢ ai
New Delli 8
Covpovat¢ OIIi¢¢ ai
NOIDA (U.P.)
Page 7
!|..··
Jiiaipur Plant
Panipat Plant
Bathinda Plant
Nangal Expansion Plant
Page 8
Page 9
·· ·.~ ·.~~·~..~
NFL, is ile second laigesi pioducei of Niiiogenous Feiiilizeis in ile Couniiy wiil
iŪ.Ŭ%slaie in domesiic pioduciion of Uiea aclieved in ile couniiy duiing :ooŬ-oŭ.
¢ Companv's siiengil lies in iis bvand !ova! ¢ustom¢vs, iis lavmonious
¢ommitm¢nts on uman v¢souv¢¢s, iis efficieni opeiaiions, Industvia! ¢!ations
(IR), goodwi!! ii las geneiaied ovei by ile woil culiuie, fulfilling iis social
commiimenis.
Page 10
·|.···:·..··. : · !.'..··
Pioducis Pioducis
Main
Pvodu¢ts
Main
Pvodu¢ts
Kisan Uiea Kisan Uiea
Kisan Bio-
feiiilizeis
Kisan Bio-
feiiilizeis
Industvia!
Pvodu¢ts
Industvia!
Pvodu¢ts
Sulplui Sulplui
Liquid
Niiiogen
Liquid
Niiiogen
Liquid Oxygen Liquid Oxygen
Caibon Sluiiy]
Caibon Palleis
Caibon Sluiiy]
Caibon Palleis
Caibon Dioxide
Gas
Caibon Dioxide
Gas
Aigon Gas Aigon Gas
Meilanol Meilanol
Sodium Niiiaie Sodium Niiiaie
Sodium Sodium
Page 11
&..·...i ·'~·| ·.··~' (&
NFL NFL
M]s
KRIBHCO
8 RCF
M]s
KRIBHCO
8 RCF
vavavak
Vid¢s
Limit¢d
(VL)
vavavak
Vid¢s
Limit¢d
(VL)
NFL in collaboiaiion wiil M]s KRIBHCO 8 RCF las foimed a ioini veniuie
company (IVC) named as vavavak Vid¢s Limit¢d (VL) io exploie
invesimeni oppoiiuniiies abioad and wiilin couniiy in Niiiogenous,
Plosplaiic 8 Poiassic seciois and io iendei consuliancy seivices foi seiiing
up Pioiecis in India 8 Abioad.
A gas based Uiea plani ai Baiauni in Bilai las been eniiusied io ile
above Ioini veniuie Company.
Page 12
..'· · ·
NFL was given ile 'Mini atna Caiegoiy-I' siaius by ile Govi. of India in
Iuly, iŭŬŬ based on ile Company's oveiall peifoimance duiing ile
pieceding yeais.
NFL Viiaipui Unii, duiing iŭŭŬ-ŭŭ, ieceived ISO iŨooi Ceiiificaiion in
addiiion io ISO ŭoo: Ceiiificaiion alieady obiained by ile Unii. NFL, ilus,
is ile Fiisi Company in Public and Coopeiaiive Secioi in ile Feiiilizei
Indusiiy io lave boil ilese Ceiiificaiions.
NFL las been selecied by a panel of iudges foi Economic Times- Haivaid
Business Sclool Associaiion of India Coipoiaie Peifoimance Awaid foi
iŭŭŨ, among :i¸ Public Secioi Companies in ile couniiy.
Inieinaiional Gieenland Socieiy, Hydeiabad awaided NFL"Besi
Enviionmenial and Ecological Implemeniaiion Awaid" foi iŭŭũ-ŭŪ.
Page 13
%:·: &.·· : ·
Page 14
· .·|·.'.
Naiional Feiiilizeis Limiied was incoipoiaied on :¸id Augusi iŭūŨ and iis
plani ai Bailinda siaiied iis commeicial Pioduciion on oi.io.iŭūŭ. Toyo
Engineeiing Coipoiaiion was piime Engineeiing Coniiaciois foi ile plani.
M]s Engineeis India Lid.,(EIL) did ile deiail engineeiing and supeivised
ile Eieciion and Commissioning of ile plani.
NFL
Bailinda
NFL
Bailinda
TEC TEC EIL EIL
Page 15
Bailinda unii is Pvodu¢ing v¢a wlose Insta!!¢d ¢apa¢itv is Iũũo M
p¢v dav i.¢. ũ,II,ũoo M v¢a p¢v annum. Tle unii is pioducing Uiea ai
moie ilan ioo% capaciiy uiilizaiion.
Tle following Ia¢tovs w¢v¢ ¢onsid¢v¢d in view by Govi. of India wi!¢
s¢!¢¢ting sit¢ at Batinda:
Availabiliiyof land
Sieady powei supply in ile viciniiy of pioieci
Availabiliiyof good qualiiy waiei fiomsiilind canal
Bailinda iown being ai coniunciion of Puniab, Haiyane 8 Raiasilan
8 all siaies laving poieniial foi feiiilizei consumpiion.
Page 16
Insta!!¢d Capa¢itv
NH¸ (Ammonia) ŭoo MT]day of NH¸
NH¸(Annual) :ŭūooo MT
Uiea iũũo MT]day of Uiea
Uiea(Annual) ũiiũoo MT
Page 17
..'· · · .·|·.'. &.··
Naiional Safeiy Awaid io ile Unii fiom ile Minisiiy of Laboui, Goveinmeni of
India foi Meiiioiious peifoimance in Indusiiial Safeiy duiing iŭŬŭ.
Bailinda Unii ieceived Piime Minisiei's Sliam Awaid" and Vislwalaima
Rasliiiya Puiaslai" duiing iŭŭŨ-ŭũ undei vaiious suggesiion sclemes. Tle unii also
ieceived Puniab Safeiy Kiii Sliiomani Awaid" and Kiii Veei Awaids" fiom ile
Siaie Goveinmeni. Tle unii also ieceived Udyog Excellence Gold Medal and a
Ciiaiion" fiom Indusiiial Economic Foium, New Delli.
Iawalai Lal Neliu Memoiial Naiional Awaids" consiiiuied by ile Inieinaiional
Gieenland Socieiy, Hydeiabad foi Polluiion Coniiol and Eneigy Conseivaiion won
by ile Unii.
Tle Unii won i
si
Piize in:
Lowesi Accideni Fiequency Raie
Maximum Reduciion in Accideni Fiequency Raie and
Longesi Accideni Fiee peiiod
Duiing :ooi-o:, Bailinda Unii was awaided Naiional Safeiy Awaid Fiisi Piize foi Laigesi
'Accideni Fiee Peiiod' in Feiiilizei and Clemical Indusiiy ielevani foi iŭŭŭ.
Page 18
#~·~...| :~·|'|,·
Co!!¢¢tion oI Data:
In oidei io undeisiand ile pieseni sysiem of budgeiaiy coniiol,
S¢¢ondavv Data fiom Review of Liieiaiuie and vaiious depaiimenis of
ile company lave been collecied.
S¢¢ondavv Data:
Secondaiy daia is ile daia deiived fiom some oilei souice. Iis noi ile
oiiginal daia foi ile puipose of solving ile pioblem ai land. It las been
collecied by ile Review of Liieiaiuie.
oo!s oI Ana!vsis:
Close analysis and giaplical pieseniaiion was used as a iool of analyzing
ile daia.
Page 19
$.~~ : ·|~ $·.'·
Tle siudy is conducied only ai NFL, Bailinda" Puniab foi six weels
duiaiion. Tle siudy of budgei is puiely based on secondaiy daia and all ile
infoimaiion is available wiilin ile company iiself in ile foim of iecoids,
wlicl is based on ile daia colleciion foi ile yeai :ooŭ-io. Hence, ile scope
of ile siudy is limiied up io ile availabiliiy of official iecoids and
infoimaiion piovided by ile employees.
Page 20
O|¸~.···~· : ·|~ $·.'·
i. To lnow aboui ile need foi Budgeiaiy Coniiol Sysiem in ile company
:. To be conveisani wiil ile Budgeiaiy Coniiol Sysiem and vaiious iypes
of planning and coniiol measuies adopied by ile company
¸. To be familiai wiil ile naiuie, iypes and puipose of budgei io be
submiiied by ile vaiious depaiimenis and gei lnowledge aboui ilem in
a piaciical aspeci.
Ũ. To develop ile undeisianding aboui iesponsibiliiy as io wly and by
wlom ii is made
ũ. To lnow aboui ile diffeieni measuies and ways io male budgeiaiy
coniiol a successful insiiumeni foi planning and coniiol puipose
Page 21
$...~· : ·.:...··.
Office Recoids
Inieinei
NFL Libiaiy
Peisonal Inieiviews
Newspapei Clippings
Pamplleis
Page 22
·.··.··.· : ·|~ $·.'·
i. Due io policies of company, only scieened infoimaiion is piovided by ile
accouniing depaiimeni.
:. Infoimaiion alieady compiled by ile company is ile basis of ile siudy
and noi ile infoimaiion fiom ile iaw] piimaiy daia.
¸. Policies of company 8 Govi. aie fiequenily clanging.
Ũ. Alilougl ile siaff of NFL Bailinda was liglly co-opeiaiive 8 devoied
enougl io spend consideiable iime on me bui because of ileii busy
scledules, I was unable io gain compleie lnowledge. Fuiilei moie I was
alloiied a limiied iime peiiod foi siudy.
Page 23
:.·.'..··. · .',~·..· $·.'·
Page 24
Budg¢t
A budgei may be defined as a foimal expiession of ile expecied income and
expendiiuie foi a definiie fuiuie peiiod.
Budg¢tavv Contvo!
Budg¢tavv Contvo! is a sysiem wleieby ile budgeis aie used as a means of
planning and coniiolling cosis.
Budg¢ting lays down as io wlai is io be aiiained and low ii is io be aiiained
wlile ¢ontvo! ensuies ilai ile obieciives aie iealized and aciual iesulis do noi
deviaie fiom ile planned couise moie ilan necessaiy.
Tle iaigeis sei up undei ile sysiem aie sucl ilai iley can be diiecily compaied wiil
ile aciual peifoimances, and ile diffeiences, if any, can be iiaced io an individual
wlo is iesponsible foi ile same. Tlis building up of a sense of iesponsibiliiy in
accouniing is ile main feaiuie of budgeiaiy coniiol.
Page 25
%·~~· : .',~··
Ð Funciional
Ð Masiei
Ð Fixed
Ð Flexible
Ð Basic
Ð Cuiieni
Ð Sloii- Teim
Budgeis
Ð Long- Teim
Budgeis
Time
Peiiod
Condiiion
Funciion
Aciiviiy
Levels
Funciional Budgeis Funciional Budgeis
Sales
Selling 8
Disiiibuiion
Cosi
Pioduciion
Cosi
Puiclases Laboui Cosi
Adminisiiaiion
Cosi
Capiial
Expendiiuie
R 8 D Cosi
Budgei
Casl Budgei
Page 26
O|¸~.···~· : .',~·..· ·.·.|
To plan ile policy of a business foi ile coming peiiod foi aclievemeni of
ile fiim's obieciives and iis iianslaiion inio moneiaiy and quaniiiaiive
ieims
To deieimine ile iesponsibiliiy of eacl depaiimeni and execuiive so ilai
iley aie made accouniable foi definiie and piecise iesulis
To cooidinaie ile aciiviiies of a business so ilai eacl is a paii of an iniegial
ioial
To piovide foi coniinuous compaiison of aciual and budgeied peifoimance
in ieims of iesulis aclieved and cosis incuiied so ilai cause foi any
inefficiency is immediaiely deiecied and iemoved
To coniiol and diieci eacl funciion so ilai besi possible iesulis may be
obiained
To piovide foi ile ievision of budgeis foi fuiuie in ile ligli of expeiience
gained
Page 27
!..~·· : .',~·..· ·.·.|
Tle exeicise of Budgeiaiy Coniiol involves ile following sieps:
Tle esiablislmeni of budgeis foi eacl seciion oi depaiimeni of ile
oiganizaiion
Tle measuiemeni of aciual peifoimances
Tle coniinuous compaiison of aciual peifoimances wiil ile budgeied
peifoimances so as io deieimine ile deviaiions oi vaiiances and
Tle asceiiainmeni of ieasons foi sucl vaiiance and ialing suiiable aciions
io iemedy ile defecis in oidei io aclieve ile obieciive undei ile oiiginal
policy oi io piovide a basis foi iis ievision
Page 28
'·..·.,~· : .',~·..· ·.·.| $···~.
Helps in Planning
Encouiages Cosi Consciousness
Leads io Economy in Opeiaiions
Piomoies Coopeiaiion and Cooidinaiion
Encouiages Safe Delegaiion and Responsibiliiy
Helps in Effeciive Cosi Coniiol
Gives Moiivaiion io Woileis
Seives as a media of communicaiion
Encouiages Managemeni by Excepiion
Page 29
·.··.··.· : .',~·..· ·.·.| $···~.
Use of Esiimaied Figuies
Expensive Sysiem
Exiensive Deceniializaiion
Opposiiion by Siaff
Ii is simply a iool of Managemeni
Lacl of Flexibiliiy
Page 30
.',~·..· ·.·.| ·. ·
Tle exeicise of budgei foimulaiion is done ialing inio accouni
i. policy of ile company iegaiding manufaciuiing, maileiing, mainienance of plani
and maclineiy and
:. allied obieciives of ile company
Wlile piepaiing ile budgei, ii is noi only ile company's policy wlicl las been
consideied bui
¸. Goveinmeni policies aie also ialen inio accouni.
In an indusiiy lile NFL Govi. policy plays an impoiiani iole as piice meclanism,
qualiiy and disiiibuiion aie goveined undei ile Feiiilizei Coniiol Oidei and
Esseniial Commodiiies Aci (ECA).
Budgeiing is noi meiely a mailemaiical oi siaiisiical exeicise bui a managemeni
exeicise. Ii iesulis fiom ile cooidinaied effoiis 8 involvemeni of a laige numbei of
people. Success of sucl a sysiem will laigely depend upon ile qualiiy and abiliiy of
ile individuals wlo opeiaie ile sysiem.
Page 31
·.·'.
Some Ia¢tovs wlicl slould be looled inio in ilis iegaid aie as follows:
Tlose wlo would be made iesponsible io aclieve ile budgei slould be
fully associaied wiil ile piocess of seiiing ile budgeis and no budgeis
slould be imposed fiom ile iop.
Individual slould be made iesponsible foi ile cosis iley can coniiol.
Wlile ieal favoiable vaiiances aie always io be commended, adveise
vaiiances slould noi invaiiably be viewed as failuies of ile individual's
conceined bui as siepping siones iowaids fuiuie successes.
Page 32
·.··'~..··.· :. .',~· !.~~...··.
Tle exeicise of budgeiaiy coniiol is caiiied oui in ile company since iis
incepiion. Wlile piepaiing ile Budgei, ile execuiives depaiimenis ensuie
ile following:
i. Tle budgei esiimaies aie piepaied on iealisiic basis.
:. Tle obieciives of ile company lave been lepi in view wlile diawing ile
budgei esiimaies.
¸. Ii is ensuied ilai ile budgei esiimaies aie piepaied ialing eacl division
as ile cosi-ceniie.
Ũ. Tle foiwaid escalaiion]de-escalaiion in piices is also lepi in mind wlile
piepaiing ile budgei esiimaies.
Keeping in view ile above faciois, budgei esiimaies foi ile nexi yeai and
ievised budgei esiimaies wiil iefeience io oiiginal budgei esiimaies foi ile
cuiieni yeai aie piepaied.
Page 33
.',~·· ~.~~..~' .· · .·|·.'.
Bioadly, tv¢¢ iypes of Budgeis aie piepaied
i. Revenue Budgei
:. Woiling Capiial Budgei
¸. Capiial Budgei
I. ¢v¢nu¢ Budg¢t:
Tle coniiol of ievenue budgei is ile mosi impoiiani aiea foi any
oiganizaiion so as io mainiain ile piofiiabiliiy as pei ile budgeied
expendiiuie. If uimosi caie is ialen ai ile iime of foimulaiing ile budgei,
ile company can aclieve iis desiied goals of opiimizing ile piofii. To
opiimize ile piofii and minimize ile expendiiuie, ile coniiol of expendiiuie
is basic necessiiy.
Tle expendiiuie undei Revenue Budgei is divided as undei:
Vaiiable Cosi]Expendiiuie
Fixed Cosi] Expendiiuie
Page 34
I. Vaviab!¢ Cost]Exp¢ndituv¢
Inpui Maieiials
Pioduciion and Sales Budgei
Fieigli and Handling Claiges

#. Fix¢d Cost] Exp¢ndituv¢
Salaiies and Wages, Bonus and oilei benefiis io Employees
Adminisiiaiive Oveilead
Facioiy Oveilead
Repaiis and Mainienance Expendiiuie
Page 35
::. V.i·., ·.~··.| .',~·
I. Inv¢ntovv
#. Sundvv D¢btovs
Sundiy Debiois consisi of iwo paiis namely
Subsidy io be ieceived fiom Govi. of India
Consumeis' piice io be iealized by Maileiing Depaiimeni of NFL
NFL las no coniiol ovei subsidy io be ieceived fiom Govi. of India. If funds aie
available, ieimbuisemeni of subsidy claim is made wiilin Ũũ days.
So fai iealizaiion of consumei's piice - ii depends upon policy of ile Company
duiing busy and off season.
#. Loans and Advan¢¢s
Ũ. Cas and Bank Ba!an¢¢s
Page 36
:::. ·.~··.| .',~·
Pvo¢¢ss oI Fovmation:
i. Fiisi, ile infoimaiion iegaiding iequiiemeni of capiial sclemes is asled
by ile Budgei Seciion of Finance Depaiimeni fiom eacl depaiimeni.
:. Tlen, ile capiial sclemes]iiems aie foiwaided io Budgei Seciion.
¸. Afiei ieceipi of sclemes]iiems fiom all depaiimenis, ile same aie
compiled.
Ũ. Tle lisi of all sclemes duly iecommended foi inclusion by CGM is
piepaied by Budgei Seciion.
ũ. Afiei ilai, Adminisiiaiive appioval is obiained fiom Minisiiy of
Feiiilizeis and Clemical depaiimeni of feiiilizeis.
Ū. Wlile examining and appioving ile sclemes, sclemes aie eiilei
diopped, piovisions gei ieduced
ū. Sclemes duly appioved by ile C and MD of ile Company aie conveyed
io unii.
Page 37
:.·. ..|···· & :.·~.~.~·.··.
Page 38
·~· !.:·· · .·|·.'.
¢av N¢t PvoIit (s.]Laks)
:oo:-o¸ iūo:Ŭ.¸Ū
:oo¸-oŨ :ũŭŨ.Ūū
:ooŨ-oũ ¸Ūiŭ.Ūū
:ooũ-oŪ :Ūŭ¸.oŬ
:ooŪ-oū iŨ:i.ũ¸
:ooū-oŬ Ŭiũ.ŪŬ
:ooŬ-oŭ ioŨŭ:.ŬŬ
:ooŭ-io ŭooi.:ŭ
Page 39
o
:ooo
Ũooo
Ūooo
Ŭooo
ioooo
i:ooo
iŨooo
iŪooo
iŬooo
:oo:-o¸ :oo¸-oŨ :ooŨ-oũ :ooũ-oŪ :ooŪ-oū :ooū-oŬ :ooŬ-oŭ :ooŭ-io
·~· !.:·· (#·..i|·
Nei Piofii (Rs.]Lalls)
Page 40
..|···· : .',~· z-.
Mont ota! In¢om¢ ota! Cost N¢t PvoIit]Loss
Apiil ŬŬŪŪ.ŭo ŬũŨũ.Ŭo
¸:i.io
May ŭŬŨ¸.Ũ: ŭ¸Ūū.ū:
Ũūũ.ūo
Iune ŭũiū.ŭ: ŭoŭ¸.ūŪ
Ũ:Ũ.iŪ
Iuly ŭŬŨ¸.Ũ¸ ŭ¸Ūū.ū:
Ũūũ.ūi
Augusi ŭŬŨ¸.Ũ¸ ŭ¸Ūū.ū:
Ũūũ.ūi
Sepiembei ŬŬŪŪ.ŭo ŬũŨũ.Ŭi
¸:i.oŭ
Ociobei ŭŬŨ¸.Ũ¸ ŭ¸Ūū.ū:
Ũūũ.ūi
Novembei ŭũiū.ŭ: ŭoŭ¸.ūŪ
Ũ:Ũ.iŪ
Decembei ŭŬŨ¸.Ũ¸ ŭ¸Ūū.ū:
Ũūũ.ūi
Ianuaiy ŭŬŨ¸.Ũ¸ ŭ¸Ūū.ū:
Ũūũ.ūi
Febiuaiy ŬŬŪŪ.ŭo ŬũŨũ.Ŭi
¸:i.oŭ
Maicl ¸ŪũŬ.ūũ Ũiūo.:¸
-ũii.ŨŬ
ota! IoŬ#ũũ.ŬŪ IoŨ#oI.Ũŭ
ŨIũŨ.#ū
Page 41
%·.| ·...~%·.| .·· ·. z-.
o
iooo
:ooo
¸ooo
Ũooo
ũooo
Ūooo
ūooo
Ŭooo
ŭooo
ioooo
Toial Income Toial Cosi
Page 42
·~· !.:···· ·. z-.
Page 43
:.·~.~.~·.··.
Tle Toial Income]Toial Cosi giapl slows Toial Income and Toial Sales
in diffeieni monils in Budgei :ooŭ-io. Ii slows ilai income was moie
ilan sales in all ile monils excepi in Maicl wleie Toial Cosi is moie
ilan Toial Income by -ũii.ŨŬ, wlicl iesulis in Nei Loss of ilis amouni as
is slown in ile second Giapl of Nei Piofii]Loss. Ii slows ilai Nei Piofii
was sufficienily good in all ile monils excepi in Maicl :oio. Besides ilis
foi ile monils of Apiil, Sepiembei 8 Febiuaiy Nei Piofii was somewlai
less ilan oilei monils.
Page 44
·.'·.,· ·..|.··. & #~...~.'.··.·
Page 45
·.'·.,·
Tle exeicise of budgeiaiy coniiol is caiiied oui in ile company since iis incepiion.
Budgeiing exeicise is esseniial because ii compels ile managemeni io pui iis policy
and obieciives inio aciion io iale place in fuiuie.
Budgei esiimaies aie piepaied on iealisiic basis consideiing obieciives of ile
company.
Wlile piepaiing ile budgei, noi only ile company's policy bui Goveinmeni policies
aie also ialen inio accouni.
Tle Budgeis mainiained by ile company aie mainly:
Revenue Budgei
Woiling Capiial Budgei
Capiial Budgei
Tle coniiol of Revenue Budgei is veiy impoiiani io mainiain ile piofiiabiliiy as pei
ile budgeied expendiiuie.
Tle budgeiaiy coniiol is exeicised by Budgei Seciion of Finance and Accounis
Depaiimeni.
ABC Analysis is mainly used as ile Maieiial Coniiol Teclnique, measuiing ile cosi
significance of eacl iiem of maieiial.
Page 46
$VO% ·$:$
SENGS:
Piofii maling and iepuied fiim.
Moie ilan :ŭ yeais expeiience in ile feiiilizei indusiiy.
Capable and liglly disciplined siaff
Pioducing ligl qualiiy pioducis compaiable wiil ile inieinaiional
siandaids. As awaided by ISO ŭooi.
Teclnical and opeiaiing efficiency compaiable wiil oilei fiims.
Availabiliiy of cleap and slilled laboui.
A numbei of Awaids and Recogniiions.
EAKNESSES:
Pioblem on iimely availabiliiy of impoiied and indigenous iaw maieiial.
Facing some infiasiiuciuie pioblems.
Page 47
·.·'.
OPPONIIES:
Good demand foi neam coaied uiea
Scope foi giowil in biofeiiilizeis.
Locaiional advaniage as ile pioduciion unii is locaied in ile main
consumpiion aiea.
EAS:
Slow giowil in uiea consumpiion duiing lasi ū-Ŭ yeais due io incieasing
inieiesi of faimeis iowaids impoiied feiiilizeis.
Incieasing inpui cosis of feed- siocl i.e. FUEL OIL]SHS]NAPTHA]NS.
Single nuiiieni pioduci base
Globalised compeiiiive scenaiio in indusiiial pioducis.
Page 48
#~...~.'.··.·
i. Bio-feiiilizei gives ile evei besi peifoimance and io inciease ile piofii -
pioduciion of bio-feiiilizei slould be incieased.
:. Company musi lave io male ile pioduci available io ile faimei wlen
le is in need of ile pioduci.
¸. NFL las io moie conceniiaie on ile Kisan Melas insiead of oilei modes
of adveiiising.
Ũ. Tle fixed oveileads lile salaiies and wages, iepaiis and mainienance,
inieiesi claiges eic. slould be lepi in coniiol and slould noi exceed ile
budgeied oveileads.
ũ. Effeciive coniiol slould be lepi on ile powei and fuel consumpiion also.
Ū. Gas based planis aie moie eneigy efficieni as compaied io ile planis
based on ile feed siocl. Ii is iecommended io iiansfei ile fuel based
planis io gas based planis. Ii will inciease ile efficiency and pioduciion
and will ieduce cosi.
Page 49
·.·'.
ū. Tle ievamping pioieci slould be adopied because ile inciease in ile
piices of FO]LSHS incieased ile pioduciion cosi.
Ŭ. NFL musi lave io speni good amouni on R and D so ilai innovaiive
pioducis can be launcled io siay alead fiom iis compeiiiois
ŭ. Tle faimeis aie illiieiaies oi less educaied so NFL las io speni moie on
educaiing ilem aboui ile new pioducis and ileii use.
io. Tle fiim slould iiy io impiove iis sales by maileiing ai laige scale and
doing iis adveiiising and sale piomoiional opeiaiions in oilei siaies
excepi ilan noiilein siaies of India and slould face ile compeiiiion.
ii. Tle piocess of seiiing ile budgei slould be fully associaied wiil ile
peisons iesponsible io aclieve ile budgei and no budgeis slould be
imposed fiom ile iop.
Page 50
·..|.··.
Finally, ii may be concluded ilai Budgeiing is a managemeni exeicise
wlicl is veiy esseniial foi aclieving ile sei obieciives. Tle Sysiem foi
budgeiaiy coniiol is applied in NFL in eacl field of aciiviiies. Tle Coniiol
of Revenue budgei is ile mosi impoiiani aiea foi ile company io mainiain
ile piofiiabiliiy as pei ile budgeied expendiiuie. Ii includes vaiious
vaiiable and Fixed cosis. Revenue Budgei foi :ooŭ-io slows nei piofii of Rs.
ŨiũŨ.¸: lalls. Wlole of ilis Budgeiaiy Coniiol is exeicised by Budgei
Seciion of Finance and Accounis depaiimeni.
Also, ile ievamping piocess is a good siep in ile developmeni of ile
company as ii will deciease ile pei unii cosi of uiea and will also deciease
ile subsidy given by ile goveinmeni. Tle deciease in ile piofii by i: ci. is
due io ile ligl inpui feedsiocl wlicl will be decieased by ile ievamping
piocess. Tlus, NFL las coniiolled inieinal cosi up io a gieai exieni.
Page 51

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