A STUDY ON ANALYSIS OF BUDGET AND BUDGETARY CONTROL SYSTEM

AT SMRC AUTOMOTIVE PVT LTD.

A PROJECT REPORT

SUBMITTED IN PARTIAL FULFILLMENTS OF THE REQUIREMENTS FOR THE AWARD

OF THE DEGREE OF

MASTER IN BUSINESS ADMINISTRATION

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

SUBMITTED BY

PURVA VISHWANATH MARATHE

SPECIALISATION: FINANCE
(2K181096)

AUGUST 2019

MKSSS. SMT. HIRABEN NANAVATI INSTITUTE OF MANAGEMENT AND

RESEARCH FOR WOMEN
 PUNE

A STUDY ON ANALYSIS OF BUDGET AND BUDGETARY CONTROL SYSTEM

AT SMRC AUTOMOTIVE PVT LTD.

A PROJECT REPORT

SUBMITTED IN PARTIAL FULFILLMENTS OF THE REQUIREMENTS FOR THE AWARD

OF THE DEGREE OF

MASTER IN BUSINESS ADMINISTRATION

SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

SUBMITTED BY

PURVA VISHWANATH MARATHE

SPECIALISATION: FINANCE
(2K181096)

CERTIFICATE
I hereby, certify that the work which is being submitted as project report entitle “A STUDY ON
ANALYSIS OF BUDGET AND BUDGETARY CONTROL SYSTEM AT SMRC
AUTOMOTIVE PVT LTD., in partial fulfillments of the requirements for the award of the Master
in Business Administration to the university of Pune is an authentic record of my own work during
the period from May 2019 to Aug 2019 under the guidance of Dr. Prashant Mamarde

The matter presented in this project report has not been submitted by me for the award of any other
degree elsewhere

Purva Marathe

This is to certify that the above statement made by the student is correct to the best of the my
knowledge.

Dr. Prashant Mamarde

Date:

CERTIFICATE
This is to certify that Ms. PURVA VISHWANATH MARATHE has successfully completed her
summer internship project on the project titled “A STUDY ON ANALYSIS OF BUDGET AND
BUDGETARY CONTROL SYSTEM AT SMRC AUTOMOTIVE PVT LTD” in the partial
fulfillment of MBA programme

Dr. Jagdish Pol Prof. Prashant Mamarde

ACKNOWLEDGEMENT

I would like to place on record my deep sense of gratitude to “SMRC AUTOMOTIVE PVT
LTD” and Mr Satish Ladwa (Plant Head) for their generous guidance, help and useful
suggestions.
I express my sincere gratitude to Dr. Prashant Mamarde, for his stimulating guidance, continuous
encouragement and supervision throughout the course of present work.

I am extremely thankful to Dr. Jagdish Pol, Director of HNIMR pune, for continuously motivated
me, without which this work would not have been possible.

PURVA MARATHE

TABLE OF CONTENT

INDEX

Chapter No. Page No.

1 Executive summery
2 Objective and Scope
3 Introduction
4 Company Profile
Theoretical Background and Literature
5
Review
6 Research Methodology
7 Data Analysis and Interpretation
8 Findings
9 Conclusion
10 References
11 Bibliography
EXCEUTIVE SUMMARY
A budget is the most crucial part of the organisation which is seen all before taking over the new
venture or taking up a new project without which the the working of the whole system is not
possible . It lays some importance in overall working of the company in which it has to be done in a
approved budget limit which is most toughest thing to handle .

In the introductory part , I have consider aspects of the budget and budgetary control system which .
Learned how important it is to properly manage the budget within the given limits . Majorly budget
have been playing dominant role seen ages in every field.

This project includes basics of budget and budgetary control system, defining and discussing the
mechanics about how overall budgeting works in manufacturing company . The study is mainly
focused on how the company could be benefited by controlling the budgeting system .

This project is made to analyses the budget and budgetary control system performance and examine
various parameters of budgetary control . The project report begins with the detailed introduction of
SMRC AUTOMOTIVE PVT LTD followed by the theatrical background which gives the base to
the project.

The project is carried out depending on the data obtained from secondary source .
After completing this study it was found that The budget represents a set of yardsticks or guidelines
for the use in controlling internal operations of an organisation. A careful analysis and continuous
comparison of actual with budgeted results will definitely improve the overall performance.

OBJECTIVES
 OBJECTIVES OF THE STUDY

• To study the existing budgetary controls method & practices at SMRC AUTOMOTIVE.

· To provide a theoretical framework of budget, and budgetary control.

· To describe the profile of the organisation as a backdrop for undertaking a study of

budgetary control system.

· To analyse the budgetary system in practice in SMRC Automotive Pvt Ltd with particular
reference to their objectives and phases of organisational and re-appropriation.

· In addition to the analysis of the conventional budgetary system in practice in SMRC

Automotive Pvt Ltd. The study aims at evaluation and modification to the budgetary system.
The scope in the formulation of performance budget is also studied

SCOPE OF THE STUDY

The main motive of doing this project was to know about the budget and budgetary controls system
functions of automotive company . To understand the motion behind the working of budgetary
control system which is done on as per the set time frame by the company . Which is associated to
an each and every field .
It also helped to understand deeper things about the budgetary control and its various aspects . The
study also provide good knowledge about how it could be effectively managed in the various
situation in future while dealing with the budget .

INTRODUCTION
 INTRODUCTION TO BUDGET

A budget is an estimation of revenue and expenses over a specified future period of time and is
usually compiled and re-evaluated on a periodic basis. Budgets can be made for a person, a family,
a group of people, a business, a government, a country, a multinational organisation or just about
anything else that makes and spends money. At companies and organisations, a budget is an internal
tool used by management and is often not required for reporting by external parties. budget is a
detailed plan expressed in quantitative terms that specifies how an organisation will acquire and use
resources during a particular period of time. As resources are limited, budget provides one means of
allocating resources among competing uses. So, that resources can be used in a best
possible manner.

DEFINITION OF BUDGET

In the general sense, the budget is described as a precise statement, representing a financial estimate
of income and expenditure of the government for a certain period. In cost accounting, budget means
a quantitative statement, prepared before a particular period to serve as an estimate of future
receipts and disbursements.The integrated process of preparing, implementing and operating
budgets is called as Budgeting.

CONCEPT OF BUDGET

One of the primary objects of cost accounting is to provide information to business management for
planning and control. Budgeting act as a toll of both planning and control. Budgeting is a formal
process of financial planning using estimated and accounting data.
 INTRODUCTION TO BUDGETARY CONTROL SYSTEM

Budgetary control is the process of determining various actual results with budgeted figures for the
enterprise for the future period and standards set then comparing the budgeted figures with the
actual performance for calculating variances, if any. First of all, budgets are prepared and then
actual results are recorded.

The comparison of budgeted and actual figures will enable the management to find out
discrepancies and take remedial measures at a proper time. The budgetary control is a continuous
process which helps in planning and co-ordination. It provides a method of control too. A budget is
a means and budgetary control is the end-result.

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 contains two different processes one is the preparation of the budget and
another one is the control of the prepared budget.

The establishment of budgets relating to the responsibilities of executives to the requirements of a

policy and the continuous comparison of actual with budgeted results, either to secure by individual
action the objectives of that policy or to provide a basis for its revision”.

WHAT IS BUDGETARY CONTROL SYSTEM

Budgetary control refers to how well managers utilise budgets to monitor and control costs and
operations in a given accounting period. In other words, budgetary control is a process for managers
to set financial and performance goals with budgets, compare the actual results, and adjust
performance, as it is needed.

CONCEPT OF BUDGETARY CONTROL SYSTEM

Budgetary Control is the managerial tool which helps in the proper quantitative planning in the
firm. The Budgetary Control lays down the performance goals of the firm by forming the budgets.
The managers are supposed to follow these budgets and file a report to the higher authority. If the
actual results do not match with the planned results, the corrective measures are taken to mend the
results.

Thus Budgetary control can be referred to as a managerial tool which helps the management to
quantify data in the form of budgets, make plans, observe the performance, make comparisons and
take measures to match the planned performance.

DEFINITION OF BUDGETARY CONTROL SYSTEM

“Budgetary control is a system of controlling costs which includes the preparation of budgets,
coordinating the departments and establishing responsibilities, comparing actual performance with
the budgeted and acting upon results to achieve maximum profitability”

The establishment of budgets relating the responsibilities of executives to the requirements of a

policy, and the continuous comparison of actual with budgeted results, either to secure by individual
action the objectives of that policy or to provide a firm basis of its revision.

BENEFITS OF BUDGETARY CONTROL SYSTEM

(i) Budgetary control ensures maximum utilisation of available resources with a view to achieving
maximum profitability.

(ii) It leads to better coordination between different departments and hence better understanding
between different functions.

(iii) It creates a sense of awareness at all levels of management in the process of achieving the
planned targets.

(iv) It is a process of self-examination and self-criticisms which is essential for the success of any
business enterprise.
(v) Budgeting gets the support and active participation of top management without which a
budgeting programme cannot succeed.

(vi) Budgetary control directs capital expenditure in the most profitable time.

(vii) It helps in increasing productivity of men, materials and machine.

(viii) It acts as a yard-stick for measuring actual performance against targeted performance.

(ix) By comparing the actual with the targeted performance, budgetary control can identify the
variances and helps to take remedial measures for correcting the variances.

DRAWBACKS OF BUDGETARY CONTROL SYSTEMS

(i) Forecasting, planning or budgeting is not an exact science and a certain amount of judgement is
present in any budgeting plan.

(ii) Lacking of support from the top management may lead to the collapse of plans.

(iii) Budgetary control is expensive.

(iv) It will be ineffective in a situation like strikes, lockout and economic revision.

(v) Budgetary control loses its importance when policies, programmes, techniques are to be
changed to keep peace with socio-economic and political environment.

(vi) To be effective budgeting should be followed up by effective control system. Many

organisations lack this effective control system which defeats the very purpose of budgeting.

(vii) Factors that cannot be controlled by the management cannot be incorporated in implementing
the policies of budgetary control system.

OBJECTIVES OF BUDGETARY CONTROL

The primary objective of budgetary control’s to help the management is systematic planning and in
controlling the operations of the enterprise. The primary objective can be met only of there is proper
communication and coordination amongst different within the organization. Thus the objectives can
be stated as:

• To prepare annual budgets in such a manner those managers at various levels in the organization
carry out periodical exercise in respect of each contact or responsibility center for physical
planning and matching resources broke up into monthly targets or cash flows.

• To introduce and operate responsible for achievement of specified targets with the resources
allocated for the purpose.

• To bring about effective co-ordination of all activities of the organization of all activities of the
organization and to gear up service divisions to meet effectively the requirement of projects.

1. PLANNING

Businesses require planning to ensure efficient and maximum use of their resources. The
first step in planning is to define the broad aims and objectives of the business. Then, strategies to
achieve the desired goals are formulated and tentative schedule of proposed combinations of the
various factors of production, which is the most profitable for the defined period. Budget influences
strategies that need to be followed by the originations. It cultivates forced planning aiming
managers.
2. CO-ORDINATION

Co-ordination is managerial functions under which all factors of production and all
departmental activities are balanced and integrated achieve the objectives of the organization.
Budgeting provides the basis for individual in all department to exchange ides on how best the
organizations objectives can be realized. Executives are forced ot think of the relationship between
their department and the company as a whole. This removes unconscious bases against other
departments. It also helps to identify weaknesses in the organization structure.

3. COMMUNICATIONS

All people in the organization must know the objectives, policies and performances of the
organizations. They must have a clear understanding of their part in the organizations goals. This is
made possible by ensuring their participation in the budgeting process.

4. CONTROLS AND PERFORMANCE EVALUTION

Control ensures control by continuous comparison of actual performance with the budgeted
performance. Variances are highlighted and corrective action can be initiated. Budget’s also from
the basis of performance evaluation in an organization as they reflect realistic estimates of
acceptable and expected performance.

ESSENTIALS OF BUDGETARY CONTROL

The proper organization is essential for the successful preparation, maintenance and administration
of budgets. A budgetary committee is formed which comprises the departmental heads of various
departments. All the functional heads are entrusted with the responsibility if ensuring proper
implementation of their respective departmental budgets.
The chief executive is the overall in charge of budgetary system. He constitutes a budget committee
for preparing realistic budgets. A budget officer is the convener of the budget committee who co-
ordinates the budgets of different departments. The managers of different departments are made
responsible for their departmental budgets.

BUDGET OFFICER

The chief executive appoints budget officer. Such budget officer also called as “budget
controller or budget director”. His rank should be equal to other functional managers.

The budget officer does not have the direct responsibility of preparing the budgets. The
various functional managers prepare the budgets. His role is that of a supervisor. The budget
officer has the specific duty of administering the budget. He is responsible for timely
completion of budgeting activity by various departments and for co-ordination between them so
the t there is a proper link between them. He is empowered to scrutinise the budgets prepared by
different functional heads and to make changes in them. If the situation so demands.

The budget officer works as a coordinator among different department. He continuously

monitors the actual performance of different departments. He determines the deviations in the
budgets and takes necessary steps to rectify the deficiencies, if any. He also informs the top
management about the performance of different department.

The budget officer will be able to carry out his work only if is conversant with the working
of all the departments he must have technical knowledge of the business and should also possess
accounting knowledge.
BUDGET COMMITTEE

A budget committee is formed to assist the budget officer. The heads of all the important
department’s are made members of this committee. The committee is responsible for
preparation and execution of budgets. The members of this committee put up the case of their
respective departments and help the committee to take collective decisions, if necessary.
The budget committee is responsible for reviewing the budgets prepared by various functional
heads. Co ordinate all the budgets and approve the final budgets, the budget officer acts as
coordinator of this committee. All the functional heads are entrusted with the responsibility of
ensuring proper of ensuring proper implementation of their respective final departmental
budgets.

BUDGETS CENTRES

A budget centres is that part of the organisation for which the budget is prepared. A budget
centre may be a department, section of a department or any other part of the department. Ideally,
the head of every centre should be a member of the budget committee. However, it must be
ensured that each budget centre at least has an indirect representation in the budget committee.

The establishment of budget centres is essential for covering all parts of the organisation
becomes easy. When different centres are establishment. The budget centres are also necessary
for cost control purposes.

BUDGET MANUAL

A budget manual is a document that spells out the duties and responsible of the various
executives concerned it specifies among various functional areas. A budget manual covers the
following matters.
A budget manual clearly defines the objectives of budgetary control system. It also gives the
benefits and principles of this system.
The duties and responsibilities of various persons dealing with preparation and exec ton of
budgets are also given in a budget manual. It enables the management to know the persons
dealing with various aspects to budgets and provides clarity on their duties and responsibilities,
 It gives information about the sanctioning authorities of various budgets. The financial powers
of different managers are given in the manual for enabling he spending amount on various
expenses.

BUDGET PERIOD

A budget period is the length of time for which a budget is prepared. It depends upon a
number of factors. The choice of a budget period depends upon the following considerations.
The types of budget (long/short)

The nature of demand for the products.

The timings for the availability of the finance.
The economic situations of the cycles.
All the above mentioned factors are taken into account while fixing the period of budgets. In this
budgeting process the financial manager has to take the financial decision on the budgets.

The financial manager usually responsible for organising this budget, he must perform the
following functions.

• To decide the general policies and guidelines.

• To officer technical advice

• To suggest changes

• To receive and review individual budget estimates

• To reconcile divergent views

• To co-ordinate budgeting activities.

• To approve budgets with or without revisions.

• To scrutinise control reports later on

REQUISITES FOR A SUCCESSFUL BUDGETARY CONTROL SYSTEM

For making a budgetary control system successful requisites are required.

1. Clarifying Objectives

The budgets are used to realize objectives of the business. The objective must be clearly
spelt out to that budgets are properly prepared. In the absence of clear goals, the budgets will also
be unrealistic.

2. Proper Delegation of Authority and Responsibility

Budget preparation and control is done are every level of management. Even though budgets
are finalized at top level but involvement of persons from lower levels of management is essential
for their success.

3. Proper Communication System

An effective system of communication is required for a successful budgetary control. The

flow of information regarding budgets should be quick so that these are implemented. The upward
communication will help in knowing the difficulties in implementation of budgets. The
performance reports of various levels will help top management in budgetary control.

4. Budget Education
 The employees should be educated about the benefit of budgeting system. They should be
the benefits of budgeting system they should be educating about their roles in the success of this
system. Budgetary control may not be taken only as a control device by the employees but it should
be used as a tool to improve their efficiency.

5. Flexibility

Flexibility in budgets is required to make them suitable under changed circumstances.

Budgets are prepared for the future, which is always uncertain, even though budgets are prepared by
considering the future possibilities but still some adjustment. Flexibility makes the budgets more
appropriate and realistic.

6. Motivation

Budgets are to be implemented by human beings. Their successful implementation will

depend upon the interest shown by the employees. All persons should be motivated to improve their
working so that budgeting is successful. A proper system of motivation should be introduced for
making this system a success.
SCOPE & TECHNIQUES FOR BUDGETARY CONTROL SYSTEM

Scope

A. Budgets are prepared keeping all the functional context into consideration i.e. Production &
Sales. Actual situation is compared & efforts are exercised to control the same. Standards are
adhered by classifying, recording & allocation of the expenses to cost units. Actual costs are
compared with standard cost.

B. Budgets have wider coverage to the organization as a whole. Every operation is segregated
into number of elements & standards are set for each elements respectively

C. Budgetary control comes into picture at the level of expenditure at functional level. Standard
costing is concerned with the requirement of each element of cost

D. Budget is a projection of financial accounts whereas Standard Costing projects the Cost
Accounting.
Techniques

A. Budgetary control is exercised by putting budgets & actual parallel, Variance is not generally
revealed in the accounts. Standard Costing Variance are revealed through accounts.

B. Budgetary control system can be operated in smaller parts. E.g. Advertisement Budget,
Research & Development Budget etc. Standard Costing is not put into operation in parts.

C. Budgetary control of expenses is broad in nature whereas Standard Costing system is a far
more technically improved system by means of which the Variance are analysed in details.

PARAMETERS FOR EFFECTIVE BUDGETARY CONTROL SYSTEM

The following parameters are supposed to be the consideration for effective Budgetary Control
Process

1. Clear cut objectives & goal should be well defined

2. The ultimate objective of realising maximum benefits should always be kept on supreme.

3. A Budget Manual is required, Which contains all details regarding plan & procedure for its
execution. A proper time-table should be assigned to Budget Preparation for approval,
details about responsibilities & Cost Centres etc.

4. Budget committee should be set-up for Budget preparation & efficient execution of the plan.

5. A Budget should always be related to specified time-period.

6. Support of top management is necessary in order to get the full support and co-operation of
the system of budgetary control.
 7. To make budgetary control successful, there should be a proper delegation of authority and
responsibility.

8. Adequate accounting system is essential to make the budgeting successful.

9. The employees should be properly educated about the benefits of budgeting system.

10. The Budgeting System should not cost more to operate than it is worth.

11. Key factors are limiting factors, if any, should consider before preparation of budget.

STAGES IN THE FORMULATION OF PERFORMANCE BUDGET:

The system provides for a two stages formulation for performance budget operation the
stages are given below:

Initial proposal

In the initial proposal the project is required to indicate yearly targets. In the addition to
furnishing basic information like synchronisation and commercial generation dates.

Constraints and coal operation at less than the designed specification calorific value of raw
material and limestone, material consumptions. In physical terms for items whose consumption
value in Rs.5 lakhs or more planned shutdown for a maintenance and overhauling and norms for
serious operating parameters provided for designs specifications and in the tariff agreements to the
corporate budget committee.

In the initial proposals is planned to be submitted after considering else factors and keeping in
view the perspective plan of the organisation, as well as norms for various operating parameters.
These targets and terms are then communicated to all stations and transmissions line offices of the
last week of July to be used for formulating detailed budget in the final proposal.
Final proposal

Budgeted balance sheet. Budgeted profit and loss account and budgets in the form of cash
budget along with the final proposal will consist of detailed supporting schedules for each of the
investment centre/cost centre. This final proposal needs to be submitted to corporate centre with in
three weeks of receiving approval for initial proposal.

The final proposal, after approval by board, will become the basis of monitoring
performance for cost centres and investment centres.

The frequency and extent review and monitoring will be done is under:

1. The monitoring of actual performance against budgeted target for investment

centre/profit centre on monthly basis and for cost centres on quarterly for remedial/corrective
action.

2. The review of performance budget on quarterly basis to assess the anticipated

profitability.

REVIEW OF PROJECT BUDGET

Monthly review

At monthly intervals the budget should be reviewed by project review committee . Project budget
should report actual expenditure against budget heads. Work heads and corporate budget by the 7th
of month following the report month. The monthly review should be examined by project review
team,who should record variations for any variations and proposed for expending works in the
minutes of the meetings reasons for any variations in the case of budget heads exceeding 10% of the
budget estimates revised estimates or which ever is Rs.5 lakhs should be analysed and report upon.

Quarterly review
Project Review Team should conduct a quarterly budgets review with a view to projecting
anticipated expenditure during the year against approved budget estimates/revised estimates. As
time is essence of such review, only a quick review of anticipated expenditure for individual budget
heads involving provisions exceeding Rs.50 lakhs in each case should be made and reported in
minutes too Project Review Team. For this purpose, project budget should furnish all the relevant
data to project manager [project] and planning and system by the 10th, of the month following the
quarter project budget committee should review the actual expenditure and assess anticipated
expenditure contract co-ordination/engineers in charge. The assessments of anticipated expenditure
should be furnished by the project budget committee to General Manager [project] by the 30 th of the
month following the quarter under review.
\
CLASSIFICATION OF TYPES OF BUDGET
Importance of Budgetary Control

In management, there is great significance of budgeting control:

• It increases competence

• It reveals inefficiency positions

• The causes of variances between the budgeted and actual are recognised to chart the remedial
process.

• It checks over-expenditure on the part of spending officer.

• It reduces huge losses since it is a constant measuring of actual and budgeted.

LITERATURE REVIEW
Name of the Research Paper : Budget And Budgetary Control And Performance Evaluation
Author: Dr. K. Manoharan Nair
Publishing year: 2017
Abstract:Budgetary control allows for greater expansion opportunities and provides the means to
strengthen the control of management within major companies and it can be performs well only in
highly managed companies (Nicolas Berland (2001).
In a study on budgetary control system, David Otley (2001) revealed that the assumption of
budgetary control is that it is the main integrative control method for most business enterprises. The
assumption being that an organization’s business plan can be represented financially by the budget
and that the budget can be used as a monitoring and controlling method for the complex issues of
the business plan.
Ruth Hamson, Len Bird (2002) in a study argued that budget management and budgetary control is
influenced by three main elements: control, performance and people all of which are governed by
the culture of the organization.

Name of the Research Paper : A Study On Budget And Budgetary Control

Author: Prof . Mubaina Shaikh
Publishing year: 2016
Abstract : Budgetary control is a system in which income and spending are compared with a
company's budget to make sure the plans are being followed. It allows companies to adjust their
spending as necessary to make a profit. Every company has a budget, and at times, that budget
needs to be revised to account for spending and an increase or decrease in income. In essence,
budgetary control compares actual results with budgets. If discrepancies are found, key players
within a company have two choices. They can either control the spending of the company or revise
the original budgets. The study of budgetary control is very helpful for management of companies
for control of their expenditure through a powerful instrument that the name is budget. In fact it will
provide a yardstick for measuring and evaluating the performance of individuals and their
departments.
ABOUT THE COMPANY
Samvardhana Motherson Group (SMG) combines the power of innovation and product quality to
passionately create world class products that cater to customer needs across diverse industries,
especially automotive. Founded in 1975, the Group has a diversified industry-leading portfolio of
auto ancillary products and services that make it a full system solutions provider for its customers
across the globe. With market leading products ranging from Electrical Distribution Systems,
automotive rearview mirrors, polymer processing, lighting systems, air intake manifolds and HVAC
systems. SMG’s principal focus is the automotive industry, globally and in India. SMG is a leading
supplier to automotive industry globally. It also serves wide number of other industries. The Group
recorded a turnover of USD 11.7 billion (approx.) during 2018-19.

Samvardhana Motherson Reydel Companies (SMRC), a member of Samvardhana Motherson

Group, is a leading global developer and supplier of interior components to the global automotive
manufacturers.

SMRC has full capabilities to design, develop and manufacture complete and functional modular
interior systems. The company’s expertise lies in manufacturing, materials, design and styling
which allows it to provide innovative, cost-and-weight-efficient products.
SMRC has 16 manufacturing facilities, three just-in-time assembly sites and eight technical centres
located in Europe, South America and Asia. Global engineering centers with R&D teams have the
capability to develop new products or adapt existing products to local markets.
Additionally, SMRC’s in-depth local market consumer perceived quality research capability
enables it to provide valuable insights in developing consumer-appealing solutions to help its
customers differentiate their vehicles.

MISSION

Our mission is to provide innovative quality products to our customers. This mission is stronger

than ever as SMRC aims to be the global automotive supplier of value-added components and
systems to vehicle manufacturers around the world.

SMRC has full capability to design, develop and manufacture complete and functional modular
interior systems. Our expertise in manufacturing, materials, design and styling allows us to provide
innovate, cost-and-weight-efficient products.
 ACCREDITATIONS

SMRC companies are accredited with the major industry accreditations in their respective fields.
SMRC companies not only have total quality accreditations, but also serve a wide customer base
with customer specific quality systems.
The SMRC companies are accredited with relevant accreditations such as ISO 9001, VDA 6.1,
ISO/TS 16949, CMM Level 5, ISO 14001 & OHSAS 18001, ISO 50001, ISO 27001.

PRODUCT PORTFOLIO

PRODUCT PORTFOLIO OF SMRC AUTOMOTIVE

• Cockpit modules

• Instrument panels

• Door panels
• Console modules

• Decorative parts

COMPETITORS

This are the following competitors of smrc automotive

• Johnson Controls

• OMRON Corporation.

• Vacon Plc.

• Danfoss Inc.

• NYX Inc.

• Schneider Electric SA.

• Honeywell International Inc.

• RIELLO UPS Ltd.

 MANAGEMENT VALUES

5 main values create on a day to day basis the spirit of the SMRC group among the teams to serve
customers and provide partners and shareholders trust and reliability.
 
Safety

The 1st value is Safety. We strive to ensure Safety for the SMRC teams throughout the industrial
process in all locations worldwide.
 
Commitment

The 2nd value is Commitment, since SMRC teams are committed to deliver quality products and
services to our customers. This has been recognised  by our customers through several Quality
Excellence Awards.

Innovation

The 3rd value is Innovation, we pursue new creative ideas and technologies that continuously
improve vehicle interiors.

Empowerment
 The 4th value is Empowerment since we encourage our SMRC teams to take
initiative and give their best. We empower them to lead and make decisions for the good of our
customers, shareholders and business partners.
 

Ownership

The 5th value is Ownership, as a consequence of the 4th value it is a clear state of mind shared by
our teams. In fact, we organise our Company in such a way that all employees feel accountable for
what they do to serve our customers.

BOARD OF DIRECTORS
(Late) - Smt. S.L. Sehgal - Founder Chairperson

(Late) - Sh. K.L. Sehgal - Chairman Emeritus

Mr. Vivek Chaand Sehgal - Chairman

Mr. Sushil Chandra Tripathi, IAS (Retd.) - Independent Director

Mr. Shunichiro Nishimura - Director

Mr. Arjun Puri - Independent Director

Mr. Gautam Mukherjee - Independent Director

Ms. Geeta Mathur - Independent Director

Mr. Naveen Ganzu - Independent Director

Mr. Laksh Vaaman Sehgal - Director

Mr. Takeshi Fujimi - Director

Mr. Pankaj Mital - Whole-time Director and Chief Operating Officer

 RESEARCH
METHODOLOGY

This is base do primary as well as secondary data, however primary data collection was given
more important is over hearing factor in attitude studies. One of the most important user so free
search methodology is that it helps in identifying the problem, collecting, analysing the required
information data and providing an alternative solution to the problem. It also helps in collecting
the vital information that is required by the top management to assist them for the better decision
making both day to day decision and critical.
 · Types of Research

This research is qualitative and analytical in nature. Qualitative research talks about the
qualityoftheresearchworkandanalyticalresearchisconcernedwithdeterminingvalidity of hypothesis
based on analysis of facts collected.

DATA COLLECTION

 Primary data
The primary data of the topic is collected by personal interaction with the officials of the finance
and accounting department and also from annuals of the company. The financial data relating to the
organisation has been collected for the 5 years

Secondary data

Annual reports

Company databases

Auto journals

Industry analysis reports Company websites

 DATA ANALYSIS AND
INTERPRETATION

SMRC AUTOMOTIVE PVT LTD Revenue Budget (2016 -17)

Table-I

S.no Particulars Budget Actual Variance

Estimated Amount(Rs.
Amount(Rs. Crores)
Crores)
 Sales
1 Fixed and recovery 689 599 90
2 Variable cost recovery 745 652 93
3 Fuel price adjustment recovery 784 823 -39
4 Own consumption 116 128 -12
5 Total of (1…4) 2334 2202 132
6 Average intensives 98 91 7
7 Other income 51 43 8
Grand total(5+6+7) 2483 2336 147

Interpretation:

The data pertaining to the generation and consumption of cement at SMRC Automotive Pvt
Ltd have been obtained from the year 2008-09 and presented in Table-1.The aspect included are
total generation in (cores Rs) and utilisation for auxiliary consumption, raw material consumption
and line store respectively.

During the year 2008-09 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales decreased by 132 crores to the estimated budget.

During the year 2008-09 the average intensives are decreased by 7 crores., there income also
decreased by 8 crores respectively. Finally, with regard to the result in revenue budget of SMRC
Automotive Private limited, totally decreased by 147 crores in the year 2008-09 respectively.
SMRC AUTOMOTIVE PVT LTD Operational expenditure budget for the year 2016 - 17
Table-II

S.no Particulars Budget Actual Variance

Estimated Amount(Rs.
Amount(Rs. Crores)
Crores)
Variable cost
1 Raw material 400 423 23
 2 Lime stone 430 450 20
3 Total of (1,2) 830 873 43
Operative
maintained cost
4 Chemicals and 120 140 20
water
5 Repairs & 240 275 35
maintenance

6 Employee cost 290 335 45

7 Stationary & 55 70 15
general expenses
8 Rebate 10 12 2
9 Share of 8 10 2
operating
expenses
10 Total of(4..9) 723 842 119
Finance charges
11 Deprecation 38 11 -27
12 Interest on fixed 18 20 2
capital
13 Totalof-3 56 31 -25
Gland total 1609 1746 137
(3+10+13)

Interpretation:

Observed from the above table that the "Operational Expenditure Budget" of Smrc
Automotive Private Limited in the year 2008-09.

In the year 2008-09 variable cost components, Raw material consumption 23 crores
increased and the lime stone consumption 20 crores also increased.
 In operating & maintain aces cost components, chemicals & water, repair & maintenance,
employee cost, stationary & general expenses rebate and share of other expenses in all are
fluctuating expenses of the year 2008-09.how ever the total operating maintenance costs are 119
crores increasing respectively.

In finance charges depreciation and interest on fixed capital, has been included, the total
finance
Charges recording decreasing 25 crores in the year 2008-09 respectively.

SMRC AUTOMOTIVE PVT LTD Revenue Budget (2017 - 18)

Table-I

S.no Particulars Budget Actual Amount(Rs. variance

Estimated Crores)
Amount(Rs.
Crores)
Sales
1 Fixed and 689 617 72
recovery
2 Variable cost 829 735 94
recovery
3 Fuel price 815 856 -41
adjustment
recovery
4 Own consumption 110 132 -22

5 Total of 2443 2340 103

(1…4)
6 Average 93 86 7
intensives
7 Other income 49 38 11
8 Grand 2585 2464 121
total(5+6+7)

Interpretation:
The data pertaining to the generation and consumption of cement at Smrc Automotive Private
Limited have been obtained from the year 2009-10 and presented in Table-1.The aspect included
are total in (cores Rs) and utilisation for auxiliary consumption, raw material consumption and line
store respectively.

During the year 2009-10 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales consumption is deceased by 103 crores respectively.

During the year 2009-10 the average intensives are decreased by 7 crores and there income
also decreased 11 crores respectively.

Finally, with regard to the result in revenue budget of Smrc Automotive Private limited,
totally decreased by 121 crores in the year 2009-10 respectively.
SMRC AUTOMOTIVE PVT LTD Operational expenditure budget for the year 2017 - 18

Table-II

S.no Particulars Budget Actual variance

Estimated Amount(Rs.
Amount(Rs. Crores)
Crores)
Variable cost
1 Raw material 419 449 30
2 Lime stone 420 465 45
3 Total of(1,2) 839 914 75
Operative maintained
cost
4 Chemicals and water 121 148 27
5 Repairs & maintenance 232 289 57

6 Employee cost 314 348 34

7 Stationary & general 59 77 18
expenses
8 Rebate 11 13 2
9 Share of operating 8 10 2
expenses
10 Total of(4..9) 745 885 140
Finance charges
11 Deprecation 38 14 -24
12 Interest on fixed capital 18 20 2
13 Total of(11,12) 56 34 -22
Grand total (3+10+13) 1640 1833 193

Interpretation:
 Observed from the above table that the "Operational Expenditure Budget” Smrc
Automotive Private Limited in the year 2009-10.

In the year 2009-10 variable cost components, Raw material consumption 30 crores
increased and the lime stone consumption 45 crores also increased.

In operating & maintain aces cost components, chemicals & water, repair &
maintenance, employee cost, stationary & general expenses rebate and share of other expenses
in all are fluctuating expenses of the year 2009-10.how ever the total operating maintenance
costs are 140crores increasing respectively.

In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges decreasing by 22 crores in the year 2009-10 respectively.

SMRC AUTOMOTIVE PVT LTD Revenue Budget (2018 - 19)

Table-I
s.no Particulars Budget Actual Variance
Estimated Amount(Rs.
Amount(Rs. Crores)
Crores)
Sales
1 Fixed and 721 611 110
recovery
2 Variable cost 815 729 86
recovery
3 Fuel price 810 823 -13
adjustment
recovery
4 Own consumption 121 131 -10

5 Total of (1…4) 2467 2294 173

 6 Average 97 92 5
intensive
7 Other income 53 48 5
8 Grand 2617 2434 183
total(5+6+7)

Interpretation:
The data pertaining to the generation and consumption of cement at Smrc Automotive
Private Limited have been obtained from the year 2010-11 and presented in Table-1.The aspect
included are total generation of cement in (cores Rs) and utilisation for auxiliary consumption, raw
material consumption and line store respectively.

During the year 2010-11 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales consumption is decreased by 173 crores respectively.

During the year 2010-11 the average intensives are decreased by 5 crores and there income
also decreased 5 crores respectively.

Finally, with regard to the result in revenue budget of Smrc Automotive Private limited,
totally decreased by 183 crores in the year 2010-11 respectively.

SMRC AUTOMOTIVE PVT LTD Operational Expenditure Budget For the year 2018 -19
Table-II

S.no Particulars Budget Actual Variance

Estimated Amount(Rs.
Amount(Rs. Crores)
Crores)
Variable cost
1 Raw material 418 445 27
2 Lime stone 442 465 23
3 Total o(1,2) 860 910 50
Operative
maintained cost
 4 Chemicals and 128 150 22
water
5 Repairs & 265 296 31
maintenance

6 Employee cost 316 348 32

7 Stationary & 63 80 17
general expenses
8 Rebate 11 13 2
9 Share of operating 7 10 3
expenses
10 Total of(4…9) 790 897 107
Finance charges
11 Deprecation 41 15 -26
12 Interest on fixed 17 19 2
capital
13 Total of(11,12) 58 34 -24
Grand total 1708 1841 133
(3+10+13)

Interpretation:

Observed from the above table that the "Operational Expenditure Budget" of Smrc
Automotive Private Limited in the year 2010-11.

In the year 2010-11 variable cost components, Raw material consumption 27 crores
increased and the lime stone consumption 23 crores also increased.

In operating & maintain aces cost components, chemicals & water, repair &
maintenance, employee cost, stationary & general expenses rebate and share of other expenses
in all are fluctuating expenses of the year 2010-11.how ever the total operating maintenance
costs are increasing by 107 crores respectively.
 In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges recording decreasing by 24 crores in the year 2010-11 respectively.

Finally with regard to the operational expenditure budget of Smrc Automotive Private
Limited the total profit has increased by 133 crores during the year 2010-11.
The overall budget results of Smrc is industries limited is earning more profits.

FINDNGS & CONCLUSION

FINDINGS
In spite of a good financial plan, the desired results may not be achieved if there is no effective
control to ensure its implementation. The budget represents a set of yardsticks or guidelines for the
use in controlling internal operations of an organization. The management through budget, can
evaluate the performance at every level of an organization.

Budget is an important tool for planning and control. No system of planning can be successful
without having an effective and efficient system control. Budgeting is closely connected with
control. Budgetary control is an important device for making the organization more efficient on all
fronts. It is an important tool for controlling costs and achieving the overall objectives.

A careful analysis and continuous comparison of actual with budgeted results will definitely
improve the overall performance.

CONCLUSION

After the successfully completion of my summer internship I understood that market research is an
important aspect for a company through out the life cycle of a particular product. It helps in
knowing the changing taste, preference, life style etc of the consumer.

From the study it can be concluded that to know that budgetary control is treated as one of the better
techniques for minimizing cost and maximizing profit in Smrc Automotive Pvt Ltd Budgetary
control technique Plays important role in the profit making or smooth running of the company

It co ordinates all the departments like Finance, Marketing, Production in the company. It makes the
decentralization of authority in the organization which helps organization goal with in stipulated
period of time. Budgetary control acts as safety for an organization because it helps to identify
business risk and necessary steps can be taken to avoid the risk.

Budgetary control techniques help to know how the available monetary resources can be utilized
effectively. This technique focus on efficiency in the allocation of resources in particular time. As
the finance department is the soul of any organization. Budgetary control helps the organization by
making finance department effectives
 BIBLOGRAPHY

WEBSITES

• www.yourarticlelibrary.com
• w
ww.accountingtools.com

• w
ww.businessjargon.com

• w
ww.economictimes.com

• w
ww.icai.com

• w
ww.moneycontrol.com

NEWS PAPERS

• Economic times

• The Hindu

• Business Standard

MAGAZINES
• Business Today

• Business World

BOOKS
• Budget and Budgetary Control

• Business Budget and Budgetary Control

• Financial Budgeting and Budgetary Control

 \

ANNEXURE