Professional Documents
Culture Documents
INTRODUCTION
Budget is essential in every walk of our life – national, domestic and business. A
budget is prepared to have effective utilization of funds and for the realization of
objectives as efficiently, as possible. Budget is a widely practiced technique and most of
us use budgets in some way or the other.
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Budget And Budget Control
The scope of the study is very wide as it ranges from the various specific budgets
of each department to the Master Budget and Performance Budget of the organization.
RESEARCH METHODOLOGY
Case study method has been adopted to carry out the study. Both primary and
secondary data have been used to complete the study. Primary data was collected
through interaction with personnel who are working in finance and Accounts Departments
of the organization.
Secondary data was collected from the company annual reports & other relevant
records. Afterwards, the data collected is processed and analyzed by using appropriate
analytical tools and techniques so as to examine the efficiency. The present study was
carried out for a period of thirty days in a prestigious organization i.e. Leo labs ltd.
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Budget And Budget Control
LIMITATION
The proposed study may not be free from certain limitation. For instance the
limitation of time and cost cannot be ignored. At the time, the findings of the study can be
applied to comparable firms and not to incomparable ones. Besides this, budgeted
amounts calculated at one point of time may not be informative as they suffer from short-
fluctuations.
REVIEW OF LITEATURE
DEFINITION OF BUDGET
The term “Budget” appears to have been derived from the French word
“Baguette” which means “Little Bag” or a container of documents and accounts. A
budget can be seen as an “Economic plan” for a given period of time.
CONCEPT OF BUDGET
Budget is as quantified plan for future activities – quantitative blueprint for action.
It is referred as a plan relating to period of time expressed in monetary and in quantitative
terms.
The Charted institute of Management Accountants, (CIMA) defined budget as
follows: -
A plan expressed in money. It is prepared and approved prior to the budget period
and may show income, expenditure of the capital to be employed, may be drawn up
showing incremental effects a former budgeted or actual figures.
According to Gordon shilling law, “A business budget is pre-determined detailed
plan of action, developed and distributed as a guide to current operations and as a partial
basis for subsequent evaluation of performance”.
It is planning device and also serves as a bases for performance evaluation and
control.
It is laid down prior to the budget period during which it is followed and based on
rights policy.
BUDGET MANUAL
A budget Manual lays down the details of the organizational set up, the routine
procedures and programmers to be followed for developing budgets for various items and
the duties and responsibilities of the executives regarding the operation of the budgetary
control system.
A budget manual is defined as a document schedule or booklet which sets out,
inter alia, the responsibilities or the persons engaged in the routine of and the forms and
records required for budgetary control. Budgets are to be drawn keeping in view the
objectives of the organization given in the budget manual.
The following are some of the most important matters covered in a Budget
Manual.
Introduction and brief explanation of the objectives, benefits and principles of
budgetary control.
Organization chart giving the titles of different personnel’s with full explanation
of the duties and each to operating systems and preparation of departmental and
functional budgets.
The entire process of budgeting programmer including the timetable for
periodical reporting.
Length of budget periods and control periods should be clearly states.
Procedures to be followed throughout the system should be explained in clear
terms.
Outline of main budgets and their accounting relationships.
Explanation of Key budgets.
The advantages to be derived from the use of budget manual are:
Every one knows in writing that what is his role, what is to be done and how it is
to be done in the system of budgetary control.
ADMINISTRATION OF BUDGETS
level managers to participate in the budget process, because lower – level managers have
valuable knowledge about the day – to – day aspects of running the business. Participator
also. Creates greater commitment and responsibility towards the budget among lower
level manages.
budgeting systems outweigh their cost. To gain the benefits of budgeting. Management at
all levels of the company should understand and support the budget and all aspects of the
for changes in plans. A manager may commit to the budget, but a situation might develop
in which some unplanned repairs or an unplanned advertising program would better serve
the in interest of the company. The managers should not defer the repairs of the
advertising as a way of meeting the budget – not if doing so will hart the company in the
BUDGETING
the long-range plan. It is the act of preparing budgets. Budgeting is a way of managing
The budgets are usually classified to their nature. The following are the types of
Long – term Budgets: the budgets are prepared to depict long-term planning of the
business. The period of long-term budgets varies from five to ten years. The long-term
planning is done by top level management. Long time budgets are prepared for some
sectors of the concern such as capital expenditure, research and development, long-
term finances etc. These budgets are useful for those industries where gestation period
is ling i.e. machinery, electricity, engineering etc.
Short-term Budgets: These budgets are generally for one or two years and are in
the form of monetary terms. The consumer’s goods industries like sugar, cotton,
etc. Use short-term budgets.
Master Budget: Various functional budgets are integrated into Master Budget.
The Budget is prepared by the ultimate integration of separate functional Budget.
According to Institute of Cost and Works Accounts, London, “The Master Budget
is the summary Budget incorporating its functional Budget”. The Budget Officer
prepares Master Budget and it remains with the top-level management. This
budget is used to co-ordinate the activities of various functional department and
also to help as a control device.
Fixed Budget: The fixed budgets are prepared for a given level of activity; the
budget is prepared before beginning of the financial year. If the financial year
starts in January then budget will be prepare a month or two earlier, November or
December. The changes in expenditure arising out of the anticipate changes will
not be adjusted in the Budget. These is a difference of about twelve months in the
budgeted an actual figures. According Institute of Cost and works Accounts,
London, “Fixed Budget is a budget which is designed to remain unchanged
irrespective of the level of the level f activity actually attained”. Fixed budget are
suitable under static conditions. If sales expenses and costs can be forecasted with
greater accuracy then this budget can be advantageously used.
OPERATING BUDGETS
1) Sales Budget: A Sales Budget is an estimate of expected sales during a Budget period.
A sales Budget is known as a nerve center or backbone of the enterprise. The degree of
accuracy with which sales are estimated will determine the practicability of operating
Budgets. A sales Budget is the starting points on which other budgets are also bases. A
sales Budget lay down potential sales figures in value as in quantity. It lays down a
comprehensive plan and programme for sales department. The sales manger is made
responsible for preparing Sale Budget. He uses all possible factors to be taken into
account while preparing a sales Budget.
Principal Budget factor, e.g. if the sales be the key factor then sales Budget,
otherwise other Budget.
Production planning and determination of optimum capacity.
The opening and closing stocks.
Management policy regarding make or buy of components.
3) Production Cost Budget: A purchase Budget gives the details of the purchases which
must be made to meet the needs of the business. It includes all items of purchase, such as
raw materials, indirect materials and other equipment. However, purchase Budget for raw
materials is the most important and the following are required to be considering in
preparing this Budget.
4) Purchase Budget: A Purchase budget gives the details of the purchases which must be
made to meet the needs of the business. It includes all items of purchase, such as raw
materials, indirect materials and other equipments. However, purchase Budget for raw
materials is the most important and the following factors are required to be considering in
preparing this Budget.
4) Material Budget: A Materials Budget shows the estimated quantities as well costs of
raw materials and components required for producing goods as per production
Budget. At the stage of preparation of materials Budget is used to obtain the cost of
each material consumed. It serves the following purposes.
.6) Labour Budget: This Budget gives and estimates the requirements of directs labour
essential to meet the production target. This Budget may be classified into “Labour
requirement budget” and “Labor Requirement Budget”. The purpose of Labour Budget is
to assist in the provision of the correct number and type of
Employee for the projected output. Once the preliminary classification of labour into its
principal grades has been carried out, the labour requirements for each product are then
set with the help of time and motion studies. From the total mean-hour required for
production labour requirements are ascertained and from the estimated rate per hour,
labour cost per hour, labour cost per unit is determined.
7) Plant Utilization Budget: This budget indicates that the plan and machinery
requirement to meet the budgeted production during the period. Such a budget will detail
the machine load in every department and indicate the extent of under or over loading.
Thus management may get useful information regarding the effective utilization of plants
and machinery in an organization.
9) Administration Cost Budget: All the administration costs relating to each Budget
center should be separately and then incorporated in the administration cost Budget. A
very important aspect of predetermining administration costs is to make sure that all
administrative functions are carried out as effectively as possible. Thus, this budget
represents forecast of the cost of selling and Distribution for Budget represents forecast of
the cost of selling and distribution of budget period and is clearly related to the sales
Budget. All expenses relating to selling and distribution of the various products as
indicated in the sales budget are included in it. These expenses are based on the volume of
sales distribution overhead. Long-term expenses advertisement are divided into fixed and
variable categories with reference to volume of sale, separate Budgets are of selling and
distribution costs as cost of transport department are
included in the departmental production cost Budget form control point view rather than
including in selling and distribution costs Budget.
FINANCIAL BUDGET
1) Cash Budget: This Budget gives and estimate of the anticipated receipts and payment
of each during the Budget period. So, this Budget is divided into two parts, one showing
the estimated cash receipt on account of cash sales, credit collections and miscellaneous
receipt and the other showing the estimate disbursement on account of cash purchases,
amount payable to creditors, wages payable to workers, indirect expenses payable,
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Thus, Capital Expenditure Budget enables one to know what new fixed assets are
needed and what will their costs rate of return.
PERFORMANCE BUDGETING:
These days Budgets are established in such a way so that item of expenditure is
related to specific responsibility center and is closely linked with performance of that
standard. Developing work programs and performance expectations by assigned
responsibility is the achievement and objects of the enterprise. Thus, in performance
Budgeting classification of expenditure follows a three-tier pattern viz. Function-
Programme-Activity.
It presents clearly the purpose and objectives for which funds are required.
In Zero Base budgeting, budget requests for appropriation are accepted on the
basis of cost / benefit approach, which ensures vale for money. If question long-standing
assumptions and systematically examines and perhaps abandons any unproductive
projects.
This means that those activities which are of no value find no value in the
forthcoming Budget even though these might have been an integral part of the past budget
prepared under the traditional approach. Zero Base budgeting in way are tries to locate
those activities not essential.
and the procedures and programmes to be followed for developing Budgets for various
activities. The contents of a budget manual are summarized as follows:
Follow – up procedure.
6) Budget Period: Budget period is the length of time for which a Budget is prepared and
operated. Budget periods vary between short-term and long-term and no specific period
can be laid down for all budgets. It varies among concerns and industries for several
factors. Whether a budget is long-termed or short-termed, it is to decide primary these
two factors:
Type of business.
7) Determination of the key Factor: Also known as limiting factor, governing factor and
principal Budget factor, the key factor means the factor, which limits the size of output. It
is defined as “the factor the extent of whose influence must first be assessed in order to
ensure that functional Budgets are capable of fulfillment”. Such a factor is of vital
important and effects all Budgets to large extent.
8) Budget Officer: The Chief Executive, who is at the top of the organization, appoints
some person as a budget Officer. The Budget Officer is empowered to scrutinize the
Budgets prepare by different functional heads and to make changes in them, if the
situation so demands. The actual performance of different departments is communicated
to the budget Officer. He determines the departments are communicated to the Budget
Officer. He determines the deviations in the Budgets and takes necessary steps to rectify
the deficiencies if any. He works as co-coordinator among different departments and
monitors the relevant information. He also informs the top management about the
performance of different departments. The Budget Officer will be able to carry out his
work fully well only if he is conversant with the working of the department.
9) Patronage from Top Management: For the true success of budgetary activities,
impetus and direction must come from the top management. If involvement of top
management is missing, it will be difficult for Budget Officer to bring round the reluctant
line managers to this way of thinking. Thus, right form the start, activities should be
initiated in such a manner that involvement of top management in budgetary activities
becomes apparent.
5) The Budget should be realistic. It should present goals that are reasonably
attainable.
6) A good system of accounting is also essential to make the budgeting successful.
7) The budget should cover all the phases of the organization and be continuous
exercise.
8) Periodic report should be prepared. Comparing budget and actual results i.e..,
there should be effective follow up.
9) Clear-cut organizational lines should be established and the employees should be
impaired budgeting education.
10) The budgeting system should be bases on information, communication and
participation.
1) The budgets are used to realize objectives of the business. In the absence of clear
goals, the budgets will also be unrealistic.
Limitations of Budgeting
Budgeting cannot take place of management but is only a tool of management the
budget should be regarded not as a master, but as a servant.
A budget programme must be dynamic and continuously deal with the chaining
business conditions. Budgets will lose much of their usefulness if they acquire
rigidity and are not revised with the changing circumstances
specialized staff and involves other expenditure which small concern may find
difficult to incur.
Estimates are used as basis for budget plan and estimates are based mostly on
available facts and beset managerial judgments. Since a lot of human element is
involved in exercising managerial judgment. It is but natural to give some
allowance interpretation and utilization of estimated results. Budgeting based on
inaccurate forecasts is use less as a yardstick for the measuring of the actual
performance.
The circumstances are constantly changing and therefore budgets and budgetary
techniques will not be useful, till they are continually adapted.
The use of budgets may lead to restricted use of resources. Budgets are often
taken as limits. Efforts may, therefore, not be made to exceed the performance
beyond the budgeted targets, even though it may be physically possible..
It normally begins with the mangers of the various activities calculating the
expected cost of maintaining current ongoing activities and then adding to those, which
are considered desirable.
government initiatives such as development of 100 smart cities are expected to provide a
major boost to the sector.
Expecting such developments in the country and aided by suitable government foreign
policies, several foreign players such as the likes of Lafarge, Holcim and Vicat have
invested in the country in the recent past. Another factor which aids the growth of this
sector is the ready availability of the raw materials for making cement, such as limestone
and coal.
Market Size
According to data released by the Department of Industrial Policy and Promotion (DIPP),
cement and gypsum products attracted foreign direct investment (FDI) worth US$
2,984.29 million between April 2000 and September 2014.
In India, the housing sector is the biggest demand driver of cement, accounting for about
67 per cent of the total consumption. The other major consumers of cement include
infrastructure at 13 per cent, commercial construction at 11 per cent and industrial
construction at nine per cent.
To meet the rise in demand, cement companies are expected to add 56 MT capacity over
the next three years. The cement capacity in India may register a growth of eight per cent
by next year end to 395 MT from the current level of 366 MT. It may increase further to
421 MT by the end of 2017. The country's per capita consumption stands at around 190
kg.
A total of 188 large cement plants together account for 97 per cent of the total installed
capacity in the country, while 365 small plants account for the rest. Of these large cement
plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu. The
Indian cement industry is dominated by a few companies. The top 20 cement companies
account for almost 70 per cent of the total cement production of the country.
Investments
On the back of growing demands, due to increased construction and infrastructural
activities, the cement sector in India has seen many investments and developments in
recent times. Some of them are as follows:
Lafarge and Holcim plans to request for the European Commission's approval for
their possible merger. The two companies had earlier unveiled plans in April 2014
to create the world's biggest cement group with US$ 44 billion in yearly sales.
JSW cement plans to enter the Kerala market to cash in on the construction frenzy
in the state. JSW is presently building a three million tonnes per annum (MTPA)
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capacity plant at Chitrapur in Karnataka to add to the current 5.4 MTPA capacity
in South India.
Zuari Cement through its subsidiary Gulbarga Cement Limited (GCL) plans to set
up a 3.23 MT cement plant in Gulbarga, Karnataka. The company along with the
cement plant is setting up a 50 MW captive power plant in the region.
Malabar Cements plans to set up an automated cement handling and bagging unit
as well as raw materials import facility in the Kochi port. Malabar Cements has
projected a minimum throughput of 300,000 tonnes per annum which can be
extendable up to 600,000 tonnes per annum, apart from intermediate products and
raw materials such as clinker, limestone and coal.
Reliance Cement Company (RCC), a subsidiary of Reliance Infrastructure, has
entered into the cement market of Bihar where the demand for the building
material is on the rise due to a realty boom. RCC presently has plants with total
installed capacity of 5.8 MTPA.
Government Initiatives
In the 12th FiveYear Plan, the government plans to increase investment in infrastructure
to the tune of US$ 1 trillion and increase the industry's capacity to 150 MT.
The Cement Corporation of India (CCI) was incorporated by the Government of India in
1965 to achieve self-sufficiency in cement production in the country. Currently, CCI has
10 units spread over eight states in India.
In order to help the private sector companies thrive in the industry, the government has
been approving their investment schemes. Some such initiatives by the government in the
recent past are as follows:
The Andhra Pradesh State Investment Promotion Board (SIPB) has approved
proposals worth Rs 9,200 crore (US$ 1.48 billion) including three cement plants
and concessions to Hero MotoCorp project. The total capacity of these three
cement plants is likely to be about 12 MT per annum and the plants are expected
to generate employment for nearly 4,000 people directly and a few thousands
more indirectly.
India has joined hands with Switzerland to reduce energy consumption and
develop newer methods in the country for more efficient cement production,
which will help India meet its rising demand for cement in the infrastructure
sector.
The Government of India has decided to adopt cement instead of bitumen for the
construction of all new road projects on the grounds that cement is more durable
and cheaper to maintain than bitumen in the long run.
Road Ahead
With the Government of India providing a boost to the infrastructure and various housing
projects coming up in urban as well as rural areas, the cement sector has enough scope for
development in the future.
Market Size
The Indian cement sector is expected to witness positive growth in the coming years, with
demand set to increase at a CAGR of more than 8 per cent in the period FY 2013-14 to
FY 2015-16, according to the latest report titled ‘Indian Cement Industry Outlook 2016’
by market research consulting firm RNCOS. The report further observed that India’s
southern region is creating the maximum demand for cement, which is expected to
increase more in future.
The cement and gypsum products sector has attracted foreign direct investments (FDI)
worth US$ 2,656.29 million in the period April 2000–August 2013, according to data
published by the Department of Industrial Policy and Promotion (DIPP).
Investments
Prism Cement Ltd has become the first Indian company to get the Quality Council
of India's (QCI) certification for its ready-mix concrete (RMC) plant in Kochi,
Kerala. The company received the certification from Institute for Certification and
Quality Mark (ICQM), a leading Italian certification body authorised to oversee
QCI compliance.
UltraTech Cement, an Aditya Birla Group Company, has acquired the 4.8 million
tonne per annum (MTPA) Gujarat unit of Jaypee Cement Corp for Rs 3,800 crore
(US$ 595.61 million).
ACC Ltd plans to invest Rs 3,000 crore (US$ 470.22 million) to expand its
capacity by nearly 4 MT a year in three eastern region states, over the next three
years.
Reliance Cements Co Pvt Ltd will set up a 3 MTPA grinding unit at an estimated
cost of Rs 600 crore (US$ 94.04 million). The unit is likely to come up at
Raghunathpur in Purulia, West Bengal.
Reliance Cement Co, a special purpose vehicle (SPV) of Reliance Infrastructure
Ltd, is commissioning its first 5 MTPA plant in Madhya Pradesh. The project has
been implemented at a cost of approximately Rs 3,000 crore (US$ 470.22
million).
Zuari Cement plans to set up a cement grinding unit at Auj (Aherwadi) and
Shingadgaon villages in Solapur, Maharashtra. The new unit will have a
production capacity of 1 MTPA and is expected to be operational by the second
quarter of 2015.
JSW Steel has acquired Heidelberg Cement India's 0.6 MTPA cement grinding
facility in Raigad, Maharashtra, for an undisclosed amount.
Government Initiatives
Giving impetus to the market, the Indian government plans to roll out public-private
partnership (PPP) projects worth Rs 1 trillion (US$ 15.67 billion) over the next six
months. The Principal Secretary in the Prime Minister's Office (PMO) will monitor these
projects.
Also, the steering group appointed by Dr Manmohan Singh, Prime Minister of India, to
accelerate infrastructure investments, has set deadlines for the awarding of projects such
as Mumbai rail corridor and Navi Mumbai Airport, among others.
The Goa State Pollution Control Board (GSPCB) has signed a memorandum of
understanding (MoU) with Vasavdatta Cement, a company with its plant in Karnataka.
The firm would use the plastic waste collected by the state agencies and village
panchayats from Goa as fuel for its manufacturing plant.
Road Ahead
With the ever-increasing industrial activities, real estate, construction and infrastructure,
in addition to the various Special Economic Zones (SEZs) being developed across the
country, there is a demand for cement.
It is estimated that the country requires about US$ 1 trillion in the period FY 2012-13 to
FY 2016-17 to fund infrastructure such as ports, airports and highways to boost growth,
which promises a good scope for the cement industry.
The 4th Annual India Cement Sector Business Sentiment Survey is nearly out and the
India Construction & Building Materials Journal provides the opportunity of an exclusive
look at the survey’s results before their sharing with the wider audiences. We are glad to
be able to present here some of the survey highlights and provide our readers with before-
hand data regarding the views and expectations of cement industry professionals.
Optimism continues to be the name of the game for the Indian cement industry – a
function of long-term trends as well as human nature. But on a closer look, the survey
shows that the optimism only runs skin deep and that it has already been eroded by an
increasing percentage of industry members who feel dissatisfied with the overall
performance of the field last year.
For instance, the percentage of those who believe the industry performed “well” dropped
from 43 percent in 2012 to 26 percent in 2013, while the number of respondents who
believe the industry performed poorly almost tripled from 8 percent last year to 22
percent in 2013. Regarding the future evolution of the industry, survey participants
continue to be on the optimistic side and hope for a “somewhat better” or “much better”
performance compared to the last 6 months.
2013 has been the year that China's central planners took action against cement
production overcapacity and pollution. Consolidation plans for the industry followed
falling profits for cement producers in 2012. However, record air pollution levels in
Beijing in early 2013 shut the city down, raised public awareness and gave the
government a strong lever to encourage further industry consolidation through
environmental controls. By the middle of year profits of major producers were up but
production was also up. Finally in December 2013, China started to launch its emissions
trading schemes (ETS), led by Guangdong province, to create what will be the second
largest carbon market in the world after the EU ETS.
Meanwhile, the world's second largest cement producing country has faced poor profits
and growth for cement producers blamed on paltry demand, piddling prices and
proliferating production costs. Compounding that, the Indian Rupee fell to a historic low
relative to the US Dollar in mid-2013, further putting pressure on input costs. Holcim
reacted to all of this by releasing plans to simplify its presence in the country between
Holcim India, Ambuja and ACC.
Saudi Arabian infrastructure demands have created all sorts of reverberations across the
Middle Eastern cement industry and beyond as the nation pushes on to build its six
'economic' cities amongst other projects. Back in April 2013 King Abdullah bin Abdulaziz
Al Saud of Saudi Arabia issued an edict ordering the import of 10Mt of cement. Then
some producers started to report production line shutdowns in the autumn of 2013 as they
buckled under the pressure, although they consoled themselves with solid profit rises.
Now, cement sales have fallen following a government crackdown on migrant workers
that has hit the construction sector.
Europe may be slowly emerging from the economic gloom but anti-trust regulators have
remained vigilant. An asset swap between Cemex and Holcim over units in the Czech
Republic, Germany and Spain has received attention from the European Commission. In
the UK the Competition Commission has decreed that further action is required for the
cement sector following the creation of new player Hope Construction Materials in 2012.
Lafarge Tarmac may now have to sell another one of its UK cement plants to increase
more competition into the market. Elsewhere in Europe, Belgium regulators took action
in September 2013 and this week we report on Polish action against cartel-like activity.
Growth continues to dominate these regions and major sporting tournaments are on the
way in Brazil and Russia, further adding to local cement demand. Votorantim may have
cancelled its US$4.8bn initial public offering in August 2013 but it is still has the highest
cement production capacity in Brazil. Finally, Indonesia may not have had any 'marquee'
style story to sum up 2013 but it continues to regularly announce cement plant builds. In
July 2013 the Indonesian Cement Association announced that cement sales growth had
fallen to 'just' 7.5% for the first half of 2013.
The most important use of cement is the production of mortar and concrete—the bonding
of natural or artificial aggregates to form a strong building material which is durable in
the face of normal environmental effects.
Concrete should not be confused with cement because the term cement refers only to the
dry powder substance used to bind the aggregate materials of concrete. Upon the addition
of water and/or additives the cement mixture is referred to as concrete, especially if
aggregates have been added.
It is uncertain where it was first discovered that a combination of hydrated non-hydraulic
lime and a pozzolan produces a hydraulic mixture (see also: Pozzolanic reaction), but
concrete made from such mixtures was first used on a large scale by Roman
engineers.They used both natural pozzolans (trass or pumice) and artificial pozzolans
(ground brick or pottery) in these concretes. Many excellent examples of structures made
from these concretes are still standing, notably the huge monolithic dome of the Pantheon
in Rome and the massive Baths of Caracalla. The vast system of Roman aqueducts also
made extensive use of hydraulic cement. The use of structural concrete disappeared in
medieval Europe, although weak pozzolanic concretes continued to be used as a core fill
in stone walls and columns.
Modern cement
Modern hydraulic cements began to be developed from the start of the Industrial
Revolution (around 1800), driven by three main needs:
Hydraulic renders for finishing brick buildings in wet climates
Hydraulic mortars for masonry construction of harbor works etc, in contact with sea
water.
Development of strong concretes.
In Britain particularly, good quality building stone became ever more expensive during a
period of rapid growth, and it became a common practice to construct prestige buildings
from the new industrial bricks, and to finish them with a stucco to imitate stone.
Hydraulic limes were favored for this, but the need for a fast set time encouraged the
development of new cements. Most famous was Parker's "Roman cement." This was
developed by James Parker in the 1780s, and finally patented in 1796. It was, in fact,
nothing like any material used by the Romans, but was a "Natural cement" made by
burning septaria - nodules that are found in certain clay deposits, and that contain both
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clay minerals and calcium carbonate. The burnt nodules were ground to a fine powder.
This product, made into a mortar with sand, set in 5–15 minutes. The success of "Roman
Cement" led other manufacturers to develop rival products by burning artificial mixtures
of clay and chalk.
John Smeaton made an important contribution to the development of cements when he
was planning the construction of the third Eddystone Lighthouse (1755-9) in the English
Channel. He needed a hydraulic mortar that would set and develop some strength in the
twelve hour period between successive high tides. He performed an exhaustive market
research on the available hydraulic limes, visiting their production sites, and noted that
the "hydraulicity" of the lime was directly related to the clay content of the limestone
from which it was made. Smeaton was a civil engineer by profession, and took the idea
no further. Apparently unaware of Smeaton's work, the same principle was identified by
Louis Vicat in the first decade of the nineteenth century. Vicat went on to devise a method
of combining chalk and clay into an intimate mixture, and, burning this, produced an
"artificial cement" in 1817. James Frost,orking in Britain, produced what he called
"British cement" in a similar manner around the same time, but did not obtain a patent
until 1822. In 1824, Joseph Aspdin patented a similar material, which he called Portland
cement, because the render made from it was in color similar to the prestigious Portland
stone.
All the above products could not compete with lime/pozzolan concretes because of fast-
setting (giving insufficient time for placement) and low early strengths (requiring a delay
of many weeks before formwork could be removed). Hydraulic limes, "natural" cements
and "artificial" cements all rely upon their belite content for strength development. Belite
develops strength slowly. Because they were burned at temperatures below 1250 °C, they
contained no alite, which is responsible for early strength in modern cements. The first
cement to consistently contain alite was made by Joseph Aspdin's son William in the early
1840s. This was what we call today "modern" Portland cement. Because of the air of
mystery with which William Aspdin surrounded his product, others (e.g. Vicat and I C
Johnson) have claimed precedence in this invention, but recent analysis of both his
concrete and raw cement have shown that William Aspdin's product made at Northfleet,
Kent was a true alite-based cement. However, Aspdin's methods were "rule-of-thumb":
Vicat is responsible for establishing the chemical basis of these cements, and Johnson
established the importance of sintering the mix in the kiln.
Portland flyash cement contains up to 30% fly ash. The fly ash is pozzolanic, so that
ultimate strength is maintained. Because fly ash addition allows a lower concrete water
content, early strength can also be maintained. Where good quality cheap fly ash is
available, this can be an economic alternative to ordinary Portland cement.
Portland pozzolan cement includes fly ash cement, since fly ash is a pozzolan, but also
includes cements made from other natural or artificial pozzolans. In countries where
volcanic ashes are available (e.g. Italy, Chile, Mexico, the Philippines) these cements are
often the most common form in use.
Portland silica fume cement. Addition of silica fume can yield exceptionally high
strengths, and cements containing 5-20% silica fume are occasionally produced.
However, silica fume is more usually added to Portland cement at the concrete mixer.
Masonry cements are used for preparing bricklaying mortars and stuccos, and must not
be used in concrete. They are usually complex proprietary formulations containing
Portland clinker and a number of other ingredients that may include limestone, hydrated
lime, air entrainers, retarders, waterproofers and coloring agents. They are formulated to
yield workable mortars that allow rapid and consistent masonry work. Subtle variations of
Masonry cement in the US are Plastic Cements and Stucco Cements. These are designed
to produce controlled bond with masonry blocks.
Expansive cements contain, in addition to Portland clinker, expansive clinkers (usually
sulfoaluminate clinkers), and are designed to offset the effects of drying shrinkage that is
normally encountered with hydraulic cements. This allows large floor slabs (up to 60 m
square) to be prepared without contraction joints.
White blended cements may be made using white clinker and white supplementary
materials such as high-purity metakaolin.
Colored cements are used for decorative purposes. In some standards, the addition of
pigments to produce "colored Portland cement" is allowed. In other standards (e.g.
ASTM), pigments are not allowed constituents of Portland cement, and colored cements
are sold as "blended hydraulic cements".
Very finely ground cements are made from mixtures of cement with sand or with slag or
other pozzolan type minerals which are extremely finely ground together. Such cements
can have the same physical characteristics as normal cement but with 50% less cement
particularly due to their increased surface area for the chemical reaction. Even with
intensive grinding they can use up to 50% less energy to fabricate than ordinary Portland
cements.
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Budget And Budget Control
COMPANY PROFILE
ULTRATECH CEMENT:
UltraTech Cement Limited has an annual capacity of 18.2 million tonnes. It manufactures
and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland
Pozzalana Cement. It also manufactures ready mix concrete (RMC).
UltraTech Cement Limited has five integrated plants, six grinding units and three
terminals — two in India and one in Sri Lanka.
UltraTech Cement is the country’s largest exporter of cement clinker. The export markets
span countries around the Indian Ocean, Africa, Europe and the Middle East.
UltraTech’s subsidiaries are Dakshin Cement Limited and UltraTech Ceylinco (P)
Limited.
The roots of the Aditya Birla Group date back to the 19th century in the picturesque town
of Pilani, set amidst the Rajasthan desert. It was here that Seth Shiv Narayan Birla started
trading in cotton, laying the foundation for the House of Birlas.
Through India's arduous times of the 1850s, the Birla business expanded rapidly. In the
early part of the 20th century, our Group's founding father, Ghanshyamdas Birla, set up
industries in critical sectors such as textiles and fibre, aluminium, cement and chemicals.
As a close confidante of Mahatma Gandhi, he played an active role in the Indian freedom
struggle. He represented India at the first and second round-table conference in London,
along with Gandhiji. It was at "Birla House" in Delhi that the luminaries of the Indian
freedom struggle often met to plot the downfall of the British Raj.
FACT FILE
Largest producer of grey cement, white cement and ready-mix concrete in India.
Largest producer of white cement in India.
Installed capacity of 62 MTPA.
Presence with 12 integrated plants, 1 white cement plant, 2 WallCare putty plants,
1 clinkerisation plant in UAE, 16 grinding units; 12 in India, 2 in UAE, 1 in
Bahrain and Bangladesh each, 6 bulk terminals; 5 in India and 1 in Sri Lanka and
101 Concrete plants.
Straddling export markets in countries across the Indian Ocean and the Middle
East.
A formidable force in Indian industry, Mr. Aditya Birla dared to dream of setting up a
global business empire at the age of 24. He was the first to put Indian business on the
world map, as far back as 1969, long before globalisation became a buzzword in India.
In the then vibrant and free market South East Asian countries, he ventured to set up
world-class production bases. He had foreseen the winds of change and staked the future
of his business on a competitive, free market driven economy order. He put Indian
business on the globe, 22 years before economic liberalisation was formally introduced
by the former Prime Minister, Mr. Narasimha Rao and the former Union Finance
Minister, Dr. Manmohan Singh. He set up 19 companies outside India, in Thailand,
Malaysia, Indonesia, the Philippines and Egypt.
Interestingly, for Mr. Aditya Birla, globalisation meant more than just geographic reach.
He believed that a business could be global even whilst being based in India. Therefore,
back in his home-territory, he drove single-mindedly to put together the building blocks to
make our Indian business a global force.
Under his stewardship, his companies rose to be the world's largest producer of viscose
staple fibre, the largest refiner of palm oil, the third largest producer of insulators and the
sixth largest producer of carbon black. In India, they attained the status of the largest
single producer of viscose filament yarn, apart from being a producer of cement, grey
cement and rayon grade pulp. The Group is also the largest producer of aluminium in the
private sector, the lowest first cost producers in the world and the only producer of linen
in the textile industry in India.
At the time of his untimely demise, the Group's revenues crossed Rs.8,000 crore globally,
with assets of over Rs.9,000 crore, comprising of 55 benchmark quality plants, an
employee strength of 75,000 and a shareholder community of 600,000.
Most importantly, his companies earned respect and admiration of the people, as one of
India's finest business houses, and the first Indian International Group globally. Through
this outstanding record of enterprise, he helped create enormous wealth for the nation,
and respect for Indian entrepreneurship in South East Asia. In his time, his success was
unmatched by any other industrialist in India.
That India attains respectable rank among the developed nations, was a dream he forever
cherished. He was proud of India and took equal pride in being an Indian.
Under the leadership of our Chairman, Mr. Kumar Mangalam Birla, the Group has
sustained and established a leadership position in its key businesses through continuous
value-creation. Spearheaded by Grasim, Hindalco, Aditya Birla Nuvo, Indo Gulf
Fertilisers and companies in Thailand, Malaysia, Indonesia, the Philippines and Egypt,
the Aditya Birla Group is a leader in a swathe of products — viscose staple fibre,
aluminium, cement, copper, carbon black, palm oil, insulators, garments. And with
successful forays into financial services, telecom, software and BPO, the Group is today
one of Asia's most diversified business groups.
Board of Directors
:: Mr. Kumar Mangalam Birla, Chairman
:: Mrs. Rajashree Birla
:: Mr. R. C. Bhargava
:: Mr. G. M. Dave
:: Mr. N. J. Jhaveri
:: Mr. S. B. Mathur
:: Mr. V. T. Moorthy
:: Mr. O. P. Puranmalka
:: Mr. S. Rajgopal
:: Mr. D. D. Rathi
Company Secretary
:: Mr. S. K. Chatterjee
Our vision
"To actively contribute to the social and economic development of the communities
in which we operate. In so doing, build a better, sustainable way of life for the
weaker sections of society and raise the country's human development index."
Awards won
Year Award
IMC Ramkrishna Bajaj National Quality Award
2015-2016
activities
2010-2011 Subh Karan Sarawagi Environment Award
2010-2011 Business World FICCI-SEDF CSR Award
2010 Greentech Environment Excellence Gold Award
2010 IMC Ramkrishna Bajaj National Quality Award
2010 Asian CSR Award
2009-2010 National Award for Prevention of Pollution
2009-2010 Rajiv Gandhi Environment Award for Clean Technology
2009-2010 State Level Environment Award (Plant)
Making a difference
Before Corporate Social Responsibility found a place in corporate lexion, it was already
textured into our Group's value systems. As early as the 1940s, our founding father Shri
G.D Birla espoused the trusteeship concept of management. Simply stated, this entails
that the wealth that one generates and holds is to be held as in a trust for our multiple
stakeholders. With regard to CSR, this means investing part of our profits beyond
business, for the larger good of society.
While carrying forward this philosophy, his grandson, Aditya Birla weaved in the concept
of 'sustainable livelihood', which transcended cheque book philanthropy. In his view, it
was unwise to keep on giving endlessly. Instead, he felt that channelising resources to
ensure that people have the wherewithal to make both ends meet would be more
productive. He would say, "Give a hungry man fish for a day, he will eat it and the next
day, he would be hungry again. Instead if you taught him how to fish, he would be able to
feed himself and his family for a lifetime."
Mr. Kumar Mangalam Birla institutionalized the concept of triple bottom line
accountability represented by economic success, environmental responsibility and social
commitment. In a holistic way thus, the interests of all the stakeholders have been
textured into our Group's fabric.
The footprint of our social work today straddles over 3,700 villages, reaching out to more
than 7 million people annually. Our community work is a way of telling the people among
whom we operate that We Care.
Our strategy
Our projects are carried out under the aegis of the "Aditya Birla Centre for Community
Initiatives and Rural Development", led by Mrs. Rajashree Birla. The Centre provides the
strategic direction, and the thrust areas for our work ensuring performance management
as well.
Our focus is on the all-round development of the communities around our plants located
mostly in distant rural areas and tribal belts. All our Group companies —- Grasim,
Hindalco, Aditya Birla Nuvo, Indo Gulf and UltraTech have Rural Development Cells
which are the implementation bodies.
Projects are planned after a participatory need assessment of the communities around the
plants. Each project has a one-year and a three-year rolling plan, with milestones and
measurable targets. The objective is to phase out our presence over a period of time and
hand over the reins of further development to the people. This also enables us to widen
our reach. Along with internal performance assessment mechanisms, our projects are
audited by reputed external agencies, who measure it on qualitative and quantitative
parameters, helping us gauge the effectiveness and providing excellent inputs.
Our rural development activities span five key areas and our single-minded goal here is to
help build model villages that can stand on their own feet. Our focus areas are healthcare,
education, sustainable livelihood, infrastructure and espousing social causes.
The name “Aditya Birla” evokes all that is positive in business and in life. It exemplifies
integrity, quality, performance, perfection and above all character.
Our logo is the symbolic reflection of these traits. It is the cornerstone of our corporate
identity. It helps us leverage the unique Aditya Birla brand and endows us with a
distinctive visual image.
Depicted in vibrant, earthy colours, it is very arresting and shows the sun rising over two
circles. An inner circle symbolising the internal universe of the Aditya Birla Group, an
outer circle symbolising the external universe, and a dynamic meeting of rays converging
and diverging between the two.
Through its wide usage, we create a consistent, impact-oriented Group image. This
undoubtedly enhances our profile among our internal and external stakeholders.
Our corporate logo thus serves as an umbrella for our Group. It signals the common
values and beliefs that guide our behaviour in all our entrepreneurial activities. It embeds
a sense of pride, unity and belonging in all of our 130,000 colleagues spanning 25
countries and 30 nationalities across the globe. Our logo is our best calling card that
opens the gateway to the world.
Group companies
:: Grasim Industries Ltd.
:: Hindalco Industries Ltd.
:: Aditya Birla Nuvo Ltd.
:: UltraTech Cement Ltd.
Indian companies
:: Aditya Birla Minacs IT Services Ltd.
:: Aditya Birla Minacs Worldwide Limited
:: Essel Mining & Industries Ltd
:: Idea Cellular Ltd.
:: Aditya Birla Insulators
:: Aditya Birla Retail Limited
International companies
Thailand
:: Thai Rayon
:: Indo Thai Synthetics
:: Thai Acrylic Fibre
:: Thai Carbon Black
:: Aditya Birla Chemicals (Thailand) Ltd.
:: Thai Peroxide
Philippines
:: Indo Phil Group of companies
:: Pan Century Surfactants Inc.
Indonesia
:: PT Indo Bharat Rayon
:: PT Elegant Textile Industry
:: PT Sunrise Bumi Textiles
:: PT Indo Liberty Textiles
:: PT Indo Raya Kimia
Egypt
:: Alexandria Carbon Black Company S.A.E
:: Alexandria Fiber Company S.A.E
China
:: Liaoning Birla Carbon
:: Birla Jingwei Fibres Company Limited
:: Aditya Birla Grasun Chemicals (Fangchenggang) Ltd.
Canada
:: A.V. Group
Australia
:: Aditya Birla Minerals Ltd.
Laos
:: Birla Laos Pulp & Plantations Company Limited
North and South America, Europe and Asia
:: Novelis Inc.
Singapore
:: Swiss Singapore Overseas Enterprises Pte Ltd. (SSOE)
Joint ventures
UltraTech's products include Ordinary Portland cement, Portland Pozzolana cement and
Portland blast furnace slag cement.
Portland blast-furnace slag cement contains up to 70 per cent of finely ground, granulated
blast-furnace slag, a nonmetallic product consisting essentially of silicates and alumino-
silicates of calcium. Slag brings with it the advantage of the energy invested in the slag
making. Grinding slag for cement replacement takes only 25 per cent of the energy
needed to manufacture portland cement. Using slag cement to replace a portion of
portland cement in a concrete mixture is a useful method to make concrete better and
more consistent. Portland blast-furnace slag cement has a lighter colour, better concrete
workability, easier finishability, higher compressive and flexural strength, lower
permeability, improved resistance to aggressive chemicals and more consistent plastic and
hardened consistency.
Portland pozzolana cement is ordinary portland cement blended with pozzolanic materials
(power-station fly ash, burnt clays, ash from burnt plant material or silicious earths),
either together or separately. Portland clinker is ground with gypsum and pozzolanic
materials which, though they do not have cementing properties in themselves, combine
chemically with portland cement in the presence of water to form extra strong cementing
material which resists wet cracking, thermal cracking and has a high degree of cohesion
and workability in concrete and mortar.
"As a Group we have always operated and continue to operate our businesses as Trustees
with a deep rooted obligation to synergise growth with responsibility."
The cement industry relies heavily on natural resources to fuel its operations. As these
dwindle, the imperative is clear — alternative sources of energy have to be sought out and
the use of existing resources has to be reduced, or eliminated altogether. Only then can
sustainable business be carried out, and a corporate can truly say it is contributing to the
preservation of the environment.
UltraTech takes its responsibility to conserve the environment very seriously, and its eco-
friendly approach is evident across all spheres of its operations. Its major thrust has been
to identify alternatives to achieve set objectives and thereby reduce its carbon footprint.
These are done through:
:: Waste management
:: Energy management
:: Water conservation
:: Biodiversity management
:: Afforestation
:: Reduction in emissions
Importantly, UltraTech has set a target of 2.96 per cent reduction in CO 2 emission
intensity, at a rate of 0.5 per cent annually, up to 2015-16, with 2009-10 as the baseline
year. This will also include CO2 emissions from the recently acquired ETA Star Cement
and upcoming projects.
Our strategy
Our projects are carried out under the aegis of the "Aditya Birla Centre for Community
Initiatives and Rural Development", led by Mrs. Rajashree Birla. The Centre provides the
strategic direction, and the thrust areas for our work ensuring performance management
as well.
Our focus is on the all-round development of the communities around our plants located
mostly in distant rural areas and tribal belts. All our Group companies —- Grasim,
Hindalco, Aditya Birla Nuvo and UltraTech have Rural Development Cells which are the
implementation bodies.
Projects are planned after a participatory need assessment of the communities around the
plants. Each project has a one-year and a three-year rolling plan, with milestones and
measurable targets. The objective is to phase out our presence over a period of time and
hand over the reins of further development to the people. This also enables us to widen
our reach. Along with internal performance assessment mechanisms, our projects are
audited by reputed external agencies, who measure it on qualitative and quantitative
parameters, helping us gauge the effectiveness and providing excellent inputs.
Our vision
"To actively contribute to the social and economic development of the communities
in which we operate. In so doing, build a better, sustainable way of life for the
weaker sections of society and raise the country's human development index."
The Aditya Birla Centre for Community Initiatives and Rural Development
Making a difference
Before Corporate Social Responsibility found a place in corporate lexicon, it was already
textured into our Group's value systems. As early as the 1940s, our founding father Shri
G.D Birla espoused the trusteeship concept of management. Simply stated, this entails
that the wealth that one generates and holds is to be held as in a trust for our multiple
stakeholders. With regard to CSR, this means investing part of our profits beyond
business, for the larger good of society.
While carrying forward this philosophy, our legendary leader, Mr. Aditya Birla, weaved in
the concept of 'sustainable livelihood', which transcended cheque book philanthropy. In
his view, it was unwise to keep on giving endlessly. Instead, he felt that channelising
resources to ensure that people have the wherewithal to make both ends meet would be
more productive. He would say, "Give a hungry man fish for a day, he will eat it and the
next day, he would be hungry again. Instead if you taught him how to fish, he would be
able to feed himself and his family for a lifetime."
TABLE NO.1
SHOWING REVENUE EXPENDITURE BUDGET
2010-2011
(Rupees in
Lakhs)
S.No. Item Budget Actual Variation Variation
Estimates (Amount) (Percentage)
Reasons for Variations between Budget estimate & Actual Expenditure 2010-2011
Increase in the cost of raw materials/prime consumables.
Download revision in the power-tariff by state.
Saving on account of deferment of Leave Concession for employees by the
Government.
TABLE NO. 2
Reasons for Variations between Budget Estimate & Actual Expenditure 2011-2012
Non-revisions of the rate of prime raw materials which was anticipated and also
short supply of the same by the supplier.
Partial withdrawal of increased power tariff by the State Government Non-filling
of vacant and new posts as per policy of the Government
TABLE NO. 3
SHOWING REVENUE EXPENDITURE BUDGET
2012-2013
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Budget And Budget Control
(Rupees in
Lakhs)
S.No. Item Budget Actual Variation Variation
Estimates (Amount) (Percentage)
Reasons for Variations between Budget Estimate & Actual Expenditure 2012- 2013
TABLE NO. 4
SHOWING REVENUE EXPENDITURE BUDGET
2013-2014
(Rupees in
Lakhs)
S.No. Item Budget Actual Variation Variation
Estimates (Amount) (Percentage)
Reasons for Variations between Budget Estimate & Actual Expenditure 2013-2014
Saving under the head Salaries due to shifting due to shifting of provision to new
cities head.
Saving under the Head Traveling Expenses, Office Expenses, foreign Expenses,
due to economy.
Increase under supplies and materials due to upward revision of manuals
Savings under the head of motor vehicles due to postponement of replacement of
same vehicles for the next year.
TABLE NO. 5
SHOWING REVENUE EXPENDITURE BUDGET
2014 - 2015
(Rupees in
Lakhs)
S.No. Item Budget Actual Variation Variation
Estimates (Amount) (Percentage)
Reasons for Variations between Budget Estimate & Actual Expenditure (2014 –
2015)
Increase in Salaries due to merger of 50% of Dearness allowance on 01-04-2007.
Saving under the head traveling Expenses, Office expenses due to Economy
measure.
Decrease is mainly due to MDU supply and other materials based on production
schedule.
Savings under Motor vehicles due to non-receipt of sanctions.
TABLE NO. 6
SHOWING REVENUE EXPENDITURE BUDGET
2015- 2016
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Budget And Budget Control
(Rupees in
Lakhs)
S.No. Item Budget Actual Variation Variation
Estimates (Amount) (Percentage)
Reasons for Variations between Budget Estimate & Actual Expenditure (2015-
2016)
Increase in salaries on Account of liberated LTC provision
Increase in Office Expenses on Account of increases Transport and issue of
Uniform for Ministerial Staff
Increase in Rent, Rates & Taxes as per demand for property Tax.
TABLE NO. 7
Reasons for Variation between Budget Estimate & Actual Expenditure (2016- 2017)
Salaries
Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Variation amount 312.02 186.1 -445.2 548.87 116.18 -93.42 111.79
Variation
Percentage 5 2.96 -7.13 8.8 -1.9 -1.4 1.64
Interpretation
The variations that need to be commented are those falling in a range above +(or) 5
percentage The years in which such variations occurred are 2010-11 where the variation
is +5 percentage on account of liberated LTC provisions and it has increased to 8.8% in
2013-14.
Travel expenses
Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Variation amount 41.65 38.74 47.12 42.47 48.9 2.17 -4.4
Variation
Percentage 41.6 38.74 39.26 36.61 58.91 2.78 -6.28
Interpretation
The travel expenses had over short the budget consistently five out of seven years under
study. The range was 36 percent to 59 percent which indicated lack of control and
absence of economy measures. The company realized these facts in 2010-2011 and put in
place a package of economy measures which raised the bar for out of budget expenditure.
The measures have worked well and as a result the variance of travel expenses over and
above budget was controlled almost in 2012-2013 and more than expected 2014-2015.
The control was so effective that a negative variance have set in year 2016-2017of the
order of -6.28
Amount
Variation 4.44 14.19 1.5 -15.28 10.05 2863 4439.46
Percentage
Interpretation
It signifies that the trend of increase in the negative variation in last 2 years is on account
2013 which is not a healthy sign. Under procurements of materials points out to delay in
Minor works
Interpretation
The acceptable range is + (or) - 5%. In general the variation was with in the rage only in 2
out of 7 years. In 4 out of 7 years it was positive variation of 15% to 31% which is
indicative of the fact that the budgetary process was not being diligently adhered to in the
case of budgets for minor works. There is thus a need to fine-tune budgetary process
implementation in this category.
Interpretation
Acceptable range is + (or) - 10%. The variation beyond the above range is observed in
case of 2010-2011 and 2013-2014. The reason was on account of general and rapid
reduction in rates of interest charged by banks
Motor vehicle
Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Variation
Amount 43.36 -19.2 83.04 78.24 71.08 50.53 83.83
Variation
Percentage 36.13 -21.33 61.5 62.59 56.86 49.05 55.88
Interpretation
The acceptable range is + (or) – 25%., As the age of vehicles stock is more, allowing for
increased expenditure in repairs and maintenance on account of age of vehicle stock it
was found that the expenditure under the head was “uncontrollable”. With the range of
over expenditure being from 36% to 63%. There is and urgent need to formulate and
implement a cost reduction program.
Office Expenses
Year 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Variation
Amount 11.96 -14.34 29.02 81.65 60.1 -28.69 -1.53
Variation
Percentage 2.88 -3.35 5.8 16.13 11.87 -6.04 -4.37
Interpretation
The acceptable range is + (or)-5%. The variation above the range was found to be sizable
in the case of 2010-2011 and 2011-2012 due to issue of uniform to ministerial staff and
increase transport
Administrative Expenses
Interpretation
The acceptable range is + (or)-5%. It was observed that the budget for administrative
expenses was periodically increased to accommodate the positive variation in previous
year during period 2010-2011. Thus the budget peaked in year 2011-2012, while the
variation is high in 2010-2011 and 2011-2012.
Interpretation:
[Type text] Page 72
Budget And Budget Control
The acceptable range is + (or) - 20%. The abnormal years were observed to be 2010-2017
which a positive variation of 58% in 2011-2012 to negative variation of around 50% in
2010-2011 and 2012-2013. This is and account of changes in government / taxes /
municipal polices and changes in valuations during the relevant years.
Others
Interpretation:
The acceptable range is + (or) - 20% as the item indicates miscellaneous of expenditure
the variance is found to be with in the acceptable range.
CONCLUSION
In conclusion, I wish to summarize the budget and budgetary control process and
how each manger can draw out of the budgetary planning and control system
business.
This is some times called Management by objectives, but it is also, in a very real
within goal.
Control reports and procedures that leading management to assure that such
basic management process of planning, execution and control. Also stressed was
It should be evident that the effect of this is to enlarge the abilities of all levels of
Its is also evident that good budgeting is more than financial exercise and that, in
fact the role of the budget director and of accounting personnel is largely one of
the role of the Budget director and of accounting personal is largely one of
administrative and coordinate guidance, combined with the rather routine job of
Leo labs. has been achieving highest production year over the year by rescuing the
corresponding expenditure and attained no only self sufficiency but also been
With the help of proper budgetary planning and control system, Leo Labs has
The financial system in Leo Labs has been very quick and well planned one,
The organization have followed effective budget system and control for
maintaining the expenditure within the appeared Budget and it also kept the
profile high and achieving the targeted production within the appeared Budget and
it also kept the profile high and achieving the targeted production by minimum
expenditure which expenditure which is evident form the last seven years
Form the variations between Budget Estimates and Actual Expenditure of last five
years it may be seen that the percentage of variation is becoming marginal from
Expenditure.
Suggestions must be taken from all departments of the organization for proper
It is important to have budget manual so that everyone in Leo Labs can refer to it
The variances arising out of each factor should be correctly segregated, and
Budgetary process has been effective in case of travel expenses and in effective in
BIBLIOGRAPHY
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3. Management Accountancy, M.Y. Khan and P.K.Jain, Tata Mc. Graw Hill
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5. Websites:
www.ultratechcements .com