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As the budget is playing an important role in any organization which asses the actual performance with the budgeted performance .The concept of the Budgeted and way of adaptability, which creates new challenges to industrial sector for surviving in this current competitive edge. It indicates the progress of the concern by way of its sales or profit, market shares, process of the concern etc, all these made me to select the project topic as” Budgetary Control system”. As budgetary control helps to understand goal of the concern whether it may be short or long term goal.
VTU P.G.CENTER, BELGAUM.
DESIGN OF THE STUDY
OBJECTIVES OF THE STUDY:
To study the existing methods & practices by budgetary control at Shree Renuka Sugars Ltd. To find out any loopholes in the budgetary control system. To suggests the methods to minimize the working system or burden at budgetary control
SCOPE OF THE STUDY:
The scope of the study is restricted only to the costing department and its functions and the concerned departments i.e. production dept, finance dept etc. The scope is to study and understand objective of budgetary control system and different functional budgets, technique used to make budget more effective. So the study is the concerned with the costing department.
VTU P.G.CENTER, BELGAUM.
METHODOLOGY: PRIMARY SOURCE:
The information of the budgetary control where obtained from Departmental heads. Discussion with manager of costing. Budgetary control statement.
This type means secondary dates are collected from
Office records Files & manual Website of the Shree Renuka Sugars Ltd.
Considering the scope mentioned above, some or few limitations are arising i.e. the Shree Renuka Sugars Ltd is big organization. This finance & accounts is also big departments. But due to shortage of training period, I am concentrating only on the budgetary control of costing departments.
VTU P.G.CENTER, BELGAUM.
The Historical Background Of The Indian Sugar Industry:
The sugar industry is proud to be an industry, which spreads the taste of sweetness to the mankind. The history of origin of this industry is as old as the history of main him self. Sugar is generally made from sugarcane and beet. In India, sugar is produced mainly from sugarcane. India had introduced sugarcane all over the worlds and is a leading country in the making sugar from sugarcane. ‘Saint Vishwamitra’ is known as the research person of the sugarcane in religious literature. We can find the example of sugarcane in Vedic literature also as well as sugarcane. We can also find the reference of sugar and the sugarcane in Patanjali’s Mahabashya and the treaty on the grammar of ‘Panini’. Greek traveler ‘Niyarchus’ and Chinese traveler ‘Tai-Sung’ have mentioned in their travelogue that the people of India used to know the methods of making sugar and juice from sugarcane the great Emperor Alexander also carried sugarcane with him while returning to his country. Thus from different historical references and from some ‘Puranas’ it can be concluded that method of making sugar from sugarcane was known
VTU P.G.CENTER, BELGAUM.
To the people of Bihar. The historical evidences of sugar industry prospering in ancient India concrete and this has helped to develop and prosper the co-operative sugar movement in India.
National Scenario Of Sugar Industry:
The first sugar mill in the country was set up in 1903 in the United Provinces. There are 566 installed sugar mills, of which 453 were in operation in the year 2002-03 and utilized 194.4 million ton of sugarcane (69% of total cane production) to produce 20.14 million tons of sugar. About 5 lakh workmen are directly employed in the sugar. About 5 lakh workmen are directly employed in the sugar industry besides many in industries, which utilize by-products of sugar industry as raw material. India is the largest consumer and second largest producer of sugar in the world. The Indian sugar industry is the second largest agro-industry located in the rural India. Indian sugar industry has been a focal point for socio-economic development in the rural areas. About 50 million sugarcane farmers and a large number of agricultural laborers are involved in sugarcane cultivation and ancillary activities, constituting 7.5% of the rural population. Besides, the industry provides employment to about 2 million skilled/semi skilled workers and others mostly from the rural areas. The industry not only generates power for its own requirement but surplus power for export to the grid based on by-product–Bagasse. It also produces ethyl alcohol, which is used for industrial and potable uses, and can be used to the manufacture Ethanol, an ecology friendly and renewable fuel for blending with petrol. The sugar industry in the country uses only sugarcane as input, hence sugar companies have been established in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh. In sugar year 2003-04, these six states contribute more than 85%of total sugar production in the country; Uttar Pradesh, Maharashtra, and Karnataka together contribute more than 65%of total production. The government of India licensed new units with an initial capacity of 1250 TCD up to the 1980s and with the revision in minimum economic size to 2500 TCD, the Government issued licenses for setting up of 2500 TCD plants thereafter. The government de-licensed sugar sector in the year of 11.September.1988. The entrepreneurs have been allowed to set up sugar factories of expand the existing sugar
VTU P.G.CENTER, BELGAUM.
CENTER. The sector wise break up’s as follows: Table no#1 Sl. Australia. of which only 453 are working. they are required to maintain a radial distance of 15 kms from the existing sugar factory. The Russian Federation. 1. There are 566 installed sugar mills in the country as on March 31st 2005 .factories as per the techno-economic feasibility of the project. and quality of soil. India. The leading sugarcane producing countries are Brazil. with a production capacity of 180 lack MTs of sugar. No. Sugar is extracted from two different raw materials. However. sugarcane and beet. In addition to weather conditions. Total Sector Private Public Co-operative No of factories 189 62 315 566 International Scenario of Sugar Industry: Sugar is produced in 110 countries. insects. Ukraine and Europe account for around 80 per count of total beet sugar production. 6 .G. a number of new sugar plants of varying capacities have been set up and the existing plants have substantially increased their capacity. Both produce identical refined sugar. China and Cuba. VTU P. Sugarcane is grown in semi-tropical regions. After de-licensing. diseases. Thailand. and accounts for around two-thirds of world accounts for the balance one third of world production. international trade agreements and domestic price support programmers affect production of sugarcane and beet. 3. These mills are located in 18 states of the country. 2. BELGAUM.
Global sugar production increased from approximately 125.4 MMT in 2002-2003 and then declined to 143. Brazil.International Sugar Industry: Demand. According to USDA Foreign Agriculture Service. China. Russia. Mexico.7 MMT in 2003-2004.Supply: Brazil and India are the largest sugar producing countries followed by China. Diagram no#1 VTU P. Mexico.1 MMT by 2015. the consumption of sugar in Asian countries has increased at a faster rate. BELGAUM.CENTER. Pakistan. USA. 7 .8 MMT in 2003-2004 as shown in below given chart. Germany and Egypt.G. Pakistan. USA. Thailand. as a direct result of increasing population. The world’s largest consumers of sugar are India. The word consumption is projected to grow to 160.7 MMT by 2010 and 176.1 MMT in 1995-1996 to 142. Indonesia. France and Germany. increasing per capita income and increased availability. whereas consumption increased steadily from 118. Australia.88 MMT in 1995-1996 to 149.
Contribution of Sugar Industry to Indian Economy: Sugar industry contributes about Rs. 2004 to 12. about Rs.02 cents in March.3 million hectares in 2002-03. and North Africa. South Korea. The largest importers are Russia.7% of the total cultivated area and it is one of the most important cash crops in the country. Sugar Prices: World sugar prices fell steadily from 1994-1995 till 1998-1999 and have been almost stable at those levels.CENTER.G.7 4.9 3. 8 . the Middle East.24000 crores per year. UK. Australia and Cuba. BELGAUM.7 million hectares in 1980-81 to 4. The area under sugarcane gradually increased from 2.16 cents per pound in January. Sugarcane Availability: Table showing sugar cane availability in cultivated area: Table no#2 Year 1980-81 1990-91 2000-01 2002-03 2003-04 2004-05 Cultivated area (%) 2. Indonesia. mainly because of much larger diversion of land from other crops to sugarcane by the farmers for VTU P.7 MMT 154 241 296 300 236 Sugarcane occupies about 2.2005 (Source: USDA Foreign Agriculture Services).1650 crores to the Central Exchequer as excise duty and other taxes annually. Brazil is the largest importer.3 3. the total sugar cane produced in the country value at about Rs. World Sugar Trade: Word trade in raw sugar is typically around 22 MMT and white sugar around 16 MMT. followed by EU. Malaysia. In addition. Japan.600 crores is realized by the State Governments annually through purchase tax and cess on cane. At the prevailing sugarcane price. Thailand. The trend seems to have now reversed and refined sugar prices have increased by 30% in the last 5 quarters – from 9.
7 million hectares in 2004-05. Not only sugarcane acreage and sugarcane production has been increasing. however. BELGAUM.5 chewing 11. declined in the year 2003-04 to 3.9 million hectares and to 3.4 50.7 57.CENTER. mainly due to drought and pest attacks.4 68.economic reasons. However. the sugarcane production increased to 241 MMT in 1990-1991 and further to 296 MMT in 2000-2001.9 56. In India.5 20. it has been hovering around 300 MMT until last year. In the season 2003-2004.8 37.1 11.1 Khandsari 54. feed and 33. sugarcane production declined to 236 MMT mainly due to drought and pest attacks.5 11.1 11.1 32.8 11. even drawal of sugarcane by the sugar industry has also been increasing over the years.G. while the norm in developed VTU P.4 Sugar Production: Most of the sugar in India is manufactured and sold as “White Crystal Sugar” which is produced by Double Suspiration Process. 9 . SUGARCANE UTILIZATION Table no#3 Year 1980-1981 1990-1991 2000-2001 2001-2002 2002-2003 2003-2004 % Sugarcane utilization for White Sugar Guru and Seed. The sugarcane area. as compared to Northern states like UP. the diversion of sugarcane to guru and khandsari is lower in states of Maharashtra and Karnataka.8 31. sugarcane is utilized by sugar mills as well as by traditional sweeteners like guru and khandsari producers.7 59.4 28. Since then. From a level of 154 MMT in 1980-1981. however.8 11.
COMPANY PROFILE: VTU P. As seeing the consumption of sugar the India is having a big market for sugar industry. In the sugar industry the top position is Brazil as it is a world largest manufacturer of sugar.and emerging nations is refined sugar. BELGAUM. such mills can run their production all the year round. Most of the mills in India are not equipped to make refined sugar Mills which are designed to produce refined sugar can manufacture sugar not only from sugarcane but also from raw sugar which can be imported. 10 . As it is a large-scale industry it provides large profit for the country and it can also be helpful for development of industrial infrastructure. Therefore. which are dependent upon the seasonal supply of sugarcane. Germany. USA. and Pakistan. which is produced by the Phosphoflotation Process. Thailand.G.CENTER. as opposed to single state mills. India is a world’s largest consumer and second largest manufacturing of sugar so the sugar must be cheaper. Conclusion India is a largest consumer of sugar in the world and second largest manufacturer of sugar followed by China. It can be provide by our sugar industry.
5%.CENTER. Sugar production per day 4000 Quintal Co. BELGAUM. The company is working on other acquisitions.5 Mw Nature Of Business Carried VTU P.11.Background and inception of the company: Shree Renuka Sugars is an integrated manufacturing company with strategic focus on Sugar and its allied products in Power and Ethanol. 1999-The commissioning and trail production took place. Maharashtra. 2002-A distillery and ethanol plant of 60kl per day capacity was added. 1998-Initially it acquired a 1250 tcd sick unit from the AP Govt.G. 11 .Generation. Milestone of SRLS: 1995-SRSL was incorporated. The Company's registered office is in Belgaum. expansions and lease opportunities to strengthen its existing strong fundamentals and growth prospects. 70 Kms from Belgaum and also operates a leased facility at Ajara. Its key manufacturing facility is in Munoli. Crushing capacity per day 3500\TCD (Tonne capacity per day) Recovery 10. Karnataka and Corporate Office is at Mumbai.
The process of production involve conversion of 1) Raw sugarcane to sugar. 12 .CENTER. it is also used as raw materials for production of paper and as feedstock for cattle. Molasses: Molasses is mainly used for the manufacture of ethyl alcohol (ethanol). VTU P. BELGAUM. The company is having rich German technology machines and equipment that are installed in the production area. which in turn is used to generate power. 2) Raw sugar into refined sugar Molasses. Bagasses: Bagasses is usually used as a combustible in the furnaces to produce steam. The power plant machines and Turbines are of Bharath Heavy Electricals Limited and Thriveni made.Nature of Business carried SRSL is involved in the activity of manufacturing white crystal sugar products which is the main product.G. Yeast and cattle feed. Bagasses are it’s by products.
G. Delivering consistently on returns to all its shareholders. To create an environment. Achieve greater raw material security. 4. 3. Bringing over all productivity and efficiency through out the organization. Producing the best quality sugar to satisfy the domestic and internal norms. To become the most efficient and market driven integrated processor of sugarcane in the world. VTU P. While enabling the team to grow in a learning and motivating atmosphere. especially by value addition of it’s by products in sugar effluent waste etc. Shree Renuka Sugars Ltd. To become a provider of world-class sugar products to the Nation. To fulfill national and social obligations as a responsible corporate citizen. 2. profitable anal financially sound growth with prudent risk management systems. achieve end-to-end integration for all its plants to improve margins and reduce business cycle. The mission of Shree Renuka Sugars Ltd: 1. BELGAUM. To enhance shareholders wealth by sustained. aims To expand its installed capacity. 13 .CENTER. intellectually satisfying and professionally rewarding to the employees.VISION AND MISSION Vision The company’s vision is to become the most efficient processor of sugar and the largest marketer of sugar and ethanol in the country. Increase its focus of corporate and high value consumers. participating in the all round development of community.
White Crystal Sugar: The main product of the sugar manufacturing process is white crystal sugar. 25 ton of press mud fertilizer and 750 KW of power from bagasse. acetic anhydride. A typical sugarcane comprising of 3000 ton capacity can produce 345 on of sugar. Molasses and alcohol-based industries were decontrolled in 993 and VTU P. Molasses still contains some quantity of sugar. Molasses is mainly used for the manufacture of ethyl alcohol (ethanol). Face stiff competition from production through the petrochemical route. The government controls the export of molasses through export licenses issued for every quarter. 15 tons of potash fertilizer. 3 tons of yeast. 6000 liters alcohol. BELGAUM.CENTER. acetic acid. Further this alcohol can be again purified to produce fuel and ethanol that can be blended with petrol. This white crystal sugar is manufactured in the following grades: 1) L-30 [Large size sugar] 2) M-30 [Medium size sugar] 3) S1-30 [small size sugar] 4) S2-30 [very small size] By-Products of Sugar Cane: The sugar mill produces many by-products along with sugar. 14 . which can be used both for potable purpose as well as an industrial chemical.G. buttonhole. The yield of Molasses per ton of sugarcane varies in the range of 3. Yeast and cattle feed. but this sugar cannot be extracted by usual technology.5% to 4. MOLASSES: Molasses is the final effluent obtained in the preparation of sugar by repeated crystallization.5%. 1. Sucrose and invert sugars constitute a major portion (40 to 60%) of Molasses. It is the end product from a refining process carried out to yield Sugar. Ethanol is in turn used to produce portable liquor and downstream value added chemical such as acetone. etc. Molasses is the brown colored residue after sugar has been tracted from the juice. SRSL produces alcohol from the molasses left after the extraction of sugarcane juice.PRODUCT PROFILE Main Product.
3. the usual bagasse composition is given below.G. but with reduction of import duties in 1995 and bumper crop in 1996. The residue product from distillery operation blended with chemicals is being sold as bio-fertilizers. The molasses prices that used to rule a round 200 per ton during early nineties shot up to Rs 1400 per ton as a result of decontrol of the industry in 1993. Maturity of cane. The increase in excise duty to specific rate of Rs 500 per ton in 1997 budget lead to sharp increase in Molasses price. the prices came down to Rs 400 level. BAGASSE: Bagasse is a fibrous residue of cane stalk that is obtained after crushing an extraction of juice. 2. Method of harvesting and the efficacy of the sugar mill. Further this bagasse based cogeneration plant is eligible for carbon credit compensation under the Kyoto protocol. Table no#4 CONTENT Moisture Fiber Soluble solids RANGE % 46-52 43-52 2-6 Bagasse is usually used as a combustible in the furnaces to produce steam.CENTER. which in turn is used to generate power.are being controlled by respective state government policies. sugar mills have been successful in reducing dependence on state electric boards for power supply. the composition of bagasse varies based on the variety of sugarcane. It consists of water. BELGAUM. for example requirement for FY98 from captive generation from steam turbines. it is also used as raw materials for production of paper and as feedstock for cattle. 15 . Power Generation Plant: VTU P. By making use of bagasses. Fiber an relatively small quantities of soluble solids. Nearly 70% of the alcohol produced is consumed by the potable alcohol sector.
power generates and supplies electricity to the state grid produced from sugar cane waste used to rotate turbines 7 M.G.W.2 M.W.CENTER. An integrated 11. power is utilized in the plant remaining power is supplied to KPTCL. Location Of The Unit And Its Subsidiaries Diagram no#2 VTU P. BELGAUM. 16 .Power plant uses the fiber of the processed sugar cane (bagasse) as fuel to generate electricity in an environmentally responsible manner.
Board of Director: Table no#5 Sl. J. M. S. B. Bhagat Mr. Robert Taylor Mr.M. Murkumbi Mr. J. established its branches in various part of Karnataka and Maharashtra with the share capital of 200 millions of Indian Rupees. Under the entrepreneur of Vidya Murkumbi. Yalgi Mr.CENTER. Narendra .Ownership Pattern: Shree Renuka Sugar LTD is one of the privatized sugar manufacturing company. No 1 2 3 4 5 6 7 8 9 10 11 12 Name of the Director Mrs. Kaluti Mr. Murkumbi Dr. Surender Kumar Tuteja Mr. Sanjay K. Nandan V. Hrishikesh Parandekar Mr. Jonathan Kingsman Mr. Vidya M. 17 . Asher Mr. Baliga Mr. BELGAUM.G. P. Nitin Puranik Nature of Directorship Executive Chairperson Managing Director Non Executive Director Non Executive Director Non Executive Director Whole Time Director Non Executive Director Whole Time Director Non Executive Director Non Executive Director Non Executive Director Whole Time Director VTU P.
BELGAUM.CENTER.2% Sugar production-9000 Qtls (per day) VTU P.ORGANIZATION STRUCTURE Competitors Information: The main competitors are as follows: • Ugar sugar industry Ltd. Crushing capacity-10000 Tcd Recovery-11.G. Crushing capacity-3500 TCD Recovery-10.5% Sugar production-4000 Qtls (per day) • Shree Prabulingeshwar sugar works Ltd. 18 . Crushing capacity-4500 TCD Recovery-11.5% Sugar production-12000 Qtls (per day) • Godavari sugar Ltd.
SWOT ANALYSIS OF THE COMPANY STRENGTHS SRSL LTD is very integrated player in sugar industry. 19 . The company has the control on the seasonal affect through producing sugar not only with sugarcane and also raw sugar. The company is having prominent marketing employees who have good knowledge of marketing.G. Non availability of raw sugar in excess VTU P. The project of SRSL ltd is eligible for carbon credits based on units of power sold from Munoli co-generation plant. WEAKNESSES SRSL is bearing extra cost of exporting the sugar to the foreign countries.CENTER. The company processes sugarcane into three co products viz. ethanol. BELGAUM. power. It has maintained excellent relationship with farmers. sugar.
Shree Prabuligeshwar sugar works ltd. BELGAUM. SRSL is well equipped with superior technology. The sugar pricing policy of the government is also big threat to the company usually the levy prices fixed by the government are very low and fall below the cost of production. THREATS The company has to face the threat of competition from competitors from like Ugar sugar industry Ltd. Superior utilization of fixed assets is there in plant because of region where it is located. The company has easy excess for importing raw sugar and exporting white crystal sugar for foreign countries. VTU P.OPPORTUNITY It is going to have a largest sugar refinery unit in India. 20 .G.CENTER. Gdavari sugar Ltd. which enables the co to enjoy better economic scale.
man power requirement. BELGAUM. the number of companies are compete with each other for the survival in the present market. Now a day. a most powerful tool to the management for performing its function i.e. Budgetary control i. It always helps to the top management to take the appropriate decision to motivate and directing their personal towards well set upped planning’s and policies of the company. By considering the advantage of the budgetary control the Shree Renuka Sugars Ltd also adapted this system. VTU P. And it always watching the activities of the organization by comparing the different department’s performance towards company goals with the help of budgets. wages etc. effectively as well as effectively. By this statement or submitted report. The daily reports must contain the item like production efficiency. So the Cost-Budgetary control may help them to make proper decision in the number of various fields. And actual results are known that are compared without budget estimates.but no one company can compete without proper planning. In Shree Renuka Sugars Ltd they were maintaining the monthly budget with the help of daily reports. whether it may be other sugars industries . A study has been conducted on the “BUDGETARY CONTROL” which is most probably adopted in the Shree Renuka Sugars Ltd organization. consumption of electricity.G. formulating plans. Budgetary control is applied to a system of management & accounting control by which all operations & output are forecasted as for ahead as possible.THEORETICAL FRAMEWORK INTRODUCTION: Budgetary control is the important aspect for industry development because budgets provide yard stick against with actual performance. sugar cane utilization.CENTER.e. With this the budgetary control manager prepares a monthly profitability statement of a particular month & submitted that one of the appropriate authority like production manager. 21 . coordinating activities and controlling operations etc. they will take correct decision about the organizational activities.
On the basis of this gives the statement that whether the budgetary control is favorable or unfavorable. Then also with forecast is necessary. Direct labour budget etc. STATEMENT OF THE STUDY The budgetary control is good aspects for an organization. the budget should not be prepared. VTU P. Production budget. which is the base for budget & is an essential part of the budgeting system.G. BELGAUM.CENTER. A more accurate budget can be developed for those activates where direct relationship exists between inputs & outputs. A budget is a detailed statement of forecast resulting from joint action of a number of planned operations conducted with normal efficiency. because it always watching the actual & wake the comparison of cost between the actual & budgeted. Therefore this study is undertaken in the field of Budgetary Control adapted in the Shree Renuka Sugars Ltd. So forecast is an assessment of probable future events. output are base for developing budgets & exercising control. Budgetary control is acts as a watchdog. These input. co-ordination & control number of separate budgets may be prepared like Sales budget. It will help the promoters to promote their company towards profit maximization or sales maximization. This will help the promoters to access their company capacity & take proper control over activities by adapting appropriate planning.The budgetary system integrates key managerial functions as it links top management’s planning function with the control function performed at all the levels in the managerial hierarchy. By this they will take necessary steps. Budgetary control is applied to system of management and accounting control by which all operations and output are forecasted as for as possible and actual results when Known are compared with budget estimates. This will help the management to assess how much cost estimated & what its actual. An estimate is predetermination of future events either on the basis of simple guesswork or following scientific principles. 22 . But without proper forecasting.
Budgets are the individual objectives of a department act. 23 . a budget is financial plan & budgetary control results from the administration of financial plan. Budgetary control embraces all this and in addition includes the science of planning the budgets themselves and the utilization of such budgets to affect an overall management tool for the business planning and control. And it fixes a target in terms of Rupees or quantities against which the actual performance is measured. Thus. An organization without a budgetary control is like a ship sailing in a chartered sea. BELGAUM. Budget is related to a definite future period. VTU P.CENTER.G. Whereas budgeting may be said to be the act of building budgets.
BELGAUM.CENTER. The budgetary control will force management at all levels to plan in time all the activities to be done during the future periods. 24 . The most profitable course of plan is selected. A budgeted as a plan of action achieves the following purposes. It is bridge through which communication is established. VTU P. budgetary control has the objective of controlling cost.G. Action is guided by well thought out plan because a budget is prepared after a careful study and research. To coordinate all the activates of various department of a business firm in such a manner that the maximum profit will be achieved for the minimum use of resources. and to supply information on the basis of which necessary corrective action may be taken. GENERAL OBJECTIVES OF BUDGETARY CONTROL ARE AS FOLLOWS: 1) Planning: A budget is a plan of the policy to be pursed during the defined period of timed to attain a given objectives. To provide a means of determining the responsibility for all deviations from the plan (budget).OBJECTIVES OF BUDGETARY CONTROL: Budgetary control has the following main objects: To provide an organized procedure for planning. It provides a detailed plan of Action for business over a definite period of time. Budget is a complete formulation of the policy of the undertaking to be pursed for the purpose of attaining a given objectives. Thus. The budget serves as a mechanism through which management’s objectives and polices are affected.
BELGAUM. Budgets inform each manager of what others have agreed to do. programmers and performance.G.2). 3).CENTER. Communication: It is necessary in an efficient organization that all people be informed about the objectives. This is made possible through their Participant in the budgeting process. But the efficiency of the budget as a planning and control device depends upon the activity in which it is being used. Thus the budgeting system integrates key managerial functions as it links top management’s planning function with the function performed at all the levels in the managerial hierarchy. 25 . CONCEPT OF BUDGETING: One of the primary objects of cost accounting is to provide information to business management for planning and control. VTU P. Budgeting is a formal process of financial planning using estimated and accounting data. They also inform managers of the resources available objects and targets. polices. Budgeting act as a toll of both planning and control. Co-Ordination: The common objectives of the firm may be successfully achieved by the way of budgetary control because it stimulates the co-operation of all concerns with the coordinates the various activities. The basis for developing budgets and exercising control. A more accurate budget can be develop for those activities where direct relationship between inputs and outputs.
Forecasting comes to an end after mere estimating. Forecasting is estimating future events and their effects on the budget. Forecasting is an essential part of the budgeting process. 26 .CENTER. Accounts (UK) defines A budget as a “a financial and/or quantities statement. BELGAUM.DEFINITION OF THE BUDGET: The Institute of Cost and Management. prepaid and approved prior to a defined period of time. RELATION BETWEEN BUDGETING AND FORECASTING: “Budgeting” and “forecasting” are used interchangeably According to the national association of accountants (USA)”forecasting is a process of predicating or estimating a future happening”. expenditure and the payment of capital”. Budgeting is a process of preparing budgets and further control aspects are involved in its procedure. After budgets of different departments have been reviewed and approved they become targets that set desirable limits on spending.G. VTU P. departments analyze their plans for the future and submit estimates as per their requirements. a comparison of actual expenditure with budget expenditure is made as a means of judging performance and fixing responsibility foe deviations. CONTROL AND PERFORMANCE EVALUATION: Budgeting entries into control at three points: When a budgeted is being formulated. It may include income. At the end of the budget period. ESSENTIALS OF BUDGET: It is prepared in advance based on a future plan of action. justifying each of their demands by demon string a need. It is a statement expressed in monetary and for physical units prepared for the implementation of policy formulated by the management. It relates to a future period and based on objective to be attained. of the policy to be pursed during that period for the purpose of attaining a given object.
CENTER. 27 . budgeting provides a valuable means of controlling income and expenditure of a business as it is a “plan for spreading” Budgeting provides a too through which managerial polices and goals are periodically evaluated. Budgeting compels and motivates management to make an early and timely study of its problem. Budgeting coordinates and correlates all business activates. The use of budgeting in an organization develops an attitude of “Cost Consciousness”.ADVANTAGES OF BUDGETING: Budgeting plays an important role in the effective use of resources and achieving overall organizational goals. tested and established as a guidelines for the entire organization. and creates an environment of profit-mindedness throughout the organization. VTU P.G. “The uppermost point is that budgets provide a discipline that brings planning to the fore front as a key managerial responsibility”. BELGAUM. stimulates the effective use of resources. Budgeting encourage productive competition. Budgeting help in directing capital and others resources into the most profitable channels.
B. 2) Information about present condition with in the individual company & in each sales territory. Forecasting sales: The three main factors that should be considered by management in forecasting sales.CENTER. According to flexibility Fixed budget: A budget prepared on the basis of fixed or a standard level of activity. 28 . VTU P. BELGAUM.CLASSIFICATION OF BUDGETS: A. is the sales budget.G. Short term budgets: A budget is a generally prepared for a period of Not exceeding 5 years Current Budgets: The budgeted is prepared for a month or a quarter. 1) Information concerning past performance. Flexible budget: A budget is prepared depend upon the level of the Activity. Operating and functional budgets: 1) Sales budget: The most important budget. selling & distribution budget & other all affected by the sales budgeted & are depended upon the revenue derived from sales. According to time: Long term budgets: A budget is designed for a period of 5 to 10yrs. which all other budgets are contingent upon. All budgets. 3) Data concerning the industry & generally business. such as production budget. It does not change with respect to level of activity.
and may be expressed and analyzed by departments and or products. It helps in fixing minimum and maximum levels of inventories in stores department. 29 . It is also known as manufacturing budget.G.) 3) Production cost budget: A production cost budgeted summaries the materials budget. 4) Direct material budget: This budget specifies the cost if direct materials used and the Cost of the direct materials purchased. Units produced= Budgeted Sales+ (Desired Closing Inventory of Finished GoodsBeginning Inventory of Finished Goods. It helps the purchasing departments to prepare a schedule to ensure Delivery of material when needed. essentially the production budget is the sales budget adjusted for inventory changes as follows. Use of direct material budget 1. lab our budgeted. 2.2) Production budget: A production budget is stated in physical units. the factory budget.CENTER. VTU P. BELGAUM.
travel advertising and bad debts.G.A system of budgetary control installation in VTU P. a. BELGAUM. selling budget. i.5. Direct labor budget: The labour budget estimates the labor. interest. Selling expenses budget: It is also known as the marketing expenses budget. The administrative expenses budgets contains expenses like director’s remunerations. This budget determines income before taxes (If the tax rate is available. salaries. legal charges. net income after taxes can also be computed). Administrative expenses budget The Administrative expenses budget covers the administrative costs for nonmanufacturing business activates. Inventory budget: An inventory budget can be prepared to find out the values of direct materials & finished goods inventory. audit fees. and administrative expenses budget. Factory overhead budget: This budget is prepared on the basis of chart of accounts which reflects different expenses accounts & which properly classified expenses accounts and details the cost centers or departments factory overhead budgeted where in overhead costs have been classified in to fixed and variable components. Fixed expenses are salaries and depreciation. 6. adequate in number and grades. The selling cost budget is made up of a number of cost items. sales budgeted. BUDGETED INCOME STATEMENT A budgeted income statement summaries all the individual Budgets i. rent office expenses. the principal variable expenses are commission. It is generally preferable to prepare a separate direct labour budget and to include indirect labour in the factory over head budget. cost of the goods sold budget. 30 .e. b. to enable the production budget to be achieved. some of which are fixed and some variable. p&t etc. property tax.CENTER.
Reports. statements. Co-ordination of activities of different departments. SOME IMPORTANT MATTERS COVERED IN A BUDGET MANUAL: A statement related to objectives of the organization & how they can be achieved through budgetary control. A.CENTER. VTU P. Suppose in case of past performance is not available than the company has to follow the following process. it is very much essential that company have to consider the past performance. The objective may be Minimizing costs or maximizing profits. ORGANIZATION FOR BUDGETING: Under this process the authorities and responsibilities of each executive are clearly stated. BELGAUM. forms & other records to be maintained. Controlling the management functions. which specifies the objective of the budgeting organization & procedures. BUDGET MANUAL: The budget manual is a written document. DETERMINATION OF THE OBJECTIVES: The installation of budgetary control system needs to have proper objective i. i. It ultimately results in minimizing costs and maximizing profits. There should be proper classification of accounts. delegation of work means dividing the work between departmental heads. C. for what purposes it has been installed.G. A statement related to functions and responsibilities of each executive. which are lost.e. If the company wants to prepare the budgets for future period of time. B. revenues and other financial amounts are to be classified with their respective nature. Timetables for all stages of budgeting.an organization is very much beneficial which may be result in proper planning & control of activates. Thus the past performance is treated as vital basis for the future period.e. 31 .
G. VTU P. Budgeted procedure: The procedure followed while designing and operating a budgetary control system depends upon the nature of the business.e. production. The duty of budget committee to submit. Fixation of the budgeted period: Budgeted period: “The period for which a budget is prepared & employed”.CENTER. and finance etc. 32 . The control techniques. discuss and finally approve of the budgeted big figures. The budget period depend upon: The nature of the business. Responsibility for budgeting: 1. BELGAUM. Budget committee: Budget committers are framed for true delegation of authority and responsibilities. Budget controller: The chief executive is ultimately responsible for the budget program and past of work designated as budget controller. The budget controller should have knowledge of technical skill of the business and report to chief executive. E.D. Sales. 2. F. The work should be divided under different heads i.
production cost and financial requirements of the business.THE PROCEDURE AS FOLLOWS: 1. Ex: Sales. The flexible budget considers the fixed and the variable costs separately. Consideration of alternative combinations of forecasts: Alternative combination of forecasts is considered for efficient of overall plan with the motive to maximum profits. 2. A flexible budget is prepared for changing levels of activity. Preparation of budgets: After finalization of forecasts the budgets will be prepared. Key factor must be identified & diagnosed. Budget are meaning & unless key factor identified. production.CENTER. VTU P. cash etc. 33 . Forecasts are made regarding sales. BELGAUM. 4. Determination of key factor: Key factor is that factor the extent of whose influence must first be assessed in order to ensure that functioned budgets are reasonably capable of fulfillment. 3. purchases. It is ineffective & meaningless because of actual capacity utilization may vary from month to month or quarter to quarter. 5.G. Choice between Fixed & Flexible budgets: A fixed budget is based on a fixed volume of activity. Making of forecasts: Forecast is nothing but estimation of probabilities for a given period.
Don’t try to force your lifestyle and personal situation into a generic. BELGAUM. a comfortable retirement. To increase your chances of success. then go for simplicity. 34 . Why does budgeting matter? Money is a tool that enables you to reach your goals in life. so many people fail at budgeting is attitude. successful budget and stick to it. in the meantime. a new car. a college education. Think about it. If you think of it as a penny-pinching sacrifice instead of a means for achieving your financial goals and dreams. If a simpler approach makes it easier to stay committed. effective budget long enough. the other is positive and allows you to indulge now and then and still achieve your goals. if not THE top reason. There are several universal budgeting concepts that every successful budget will include. you'll be able to institute a rewarding. A budget shows you exactly where your money goes and provides a spending plan that lets you save for the things that are important to you: a new house.G. VTU P. one-size-fits-all budget.The Secret to Budgeting Successfully It's All in the Attitude. travel. Have you ever attempted to budget and given up in frustration or discouragement? If you can figure out the reason your budgeting attempt failed. do whatever it takes to keep yourself going. work on your attitude first. One is negative and restrictive. What really determines whether budgeting works for you? One of the top reasons. the rewards will keep you motivated. but until you know where your money goes. you can’t make conscious decisions about how to use this tool effectively.CENTER. or whatever your particular goals and dreams happen to be. If you stick with a realistic. but one of the most important features of a successful budget is customization to your needs. how long are you likely to stick with it? It’s like the difference between going on a diet and eating healthily.
If you still can’t figure out why your budget isn’t working. BELGAUM. To avoid them. VTU P. to make yourself feel worthwhile? Do you enjoy the heady rush of making a new purchase? Do you use it as a sign of power or control in a relationship? There are a number of good books about the psychological aspects of money that can help you spot these factors and help you work with them.CENTER. What makes a good budget? In all the budget bloopers and blunders I've seen. you’re going to be at cross-purposes that are going to be a cause of ongoing conflict. consider the psychological factors at work. If you can’t agree about saving towards those goals. long-term relationship is working towards common goals. What does money mean to you? Do you use it for reasons other than its obvious purpose? Do you use it as a self-esteem booster. It’s okay to have individual goals that the other person doesn’t share. and to provide for a way for those goals to be met. 35 . Couples who can’t come to an agreement about savings towards common goals should sit down and talk calmly and rationally and come to a compromise to resolve this disconnect in their relationship. but it’s critical to have basic common financial goals that both people in the relationship agree to and are motivated to work towards. the same few problems keep rearing their ugly heads.One important aspect of a successful. here are the top ten most important features of a successful budget. A budget centered around conflict and resentment is a budget doomed for failure.G. and a budget is a means of achieving them.
Why??? They have motivation and education but they are missing the last piece -implementation. 36 .if you lack any one of these critical elements. The BudgetMap system solves this problem. I believe that BudgetMap has provided that missing piece.the "how to" 3. BELGAUM. Implementation . it is the "missing link" to implement what you learn.the "way to" You will have limited success -.or fail -.G. Simple and effective. Many people successfully complete good books or courses on budgeting but they still fail. It takes the inspiration and motivation and practical worksheets and puts it in women's purses and men's shirt pockets so they can. Motivation .the "want to" 2. "I have found our special class [actual name not shown] to be the inspiration and motivation and the practical help for our church members to get their financial house in order but there is a missing piece. Education . know exactly how much money is left in any of their budgeted accounts” VTU P.The three critical elements for successful budgeting: 1. They don't have a way to put in practice what they learned (or they have a way but it is so difficult they give up after several months).CENTER. at a moment's glance. It works with any book or course on budgeting.
If the number is negative. Once you've got the budgeting process in place.HOW TO BUDGET 1. Go through your check book or bills for the last two to three months and add and delete categories from the worksheet to fit your expenditures. 12. 11. 37 . Your situation can probably be greatly improved by changing your spending habits. 7. analyze your spending to identify where you can comfortably make cuts. Subtract the total expenses from the total income to arrive at your net income. If you have a positive net income. and set realistic goals 15. 5.G. Once you're comfortable with your expense categories and budgeted amounts. Do the same for any interest income. 4. 13. enter expenditures from your checkbook from the last month. After you've tracked your actual spending for a month or two. take an in-depth look at your largest spending categories. or other miscellaneous income. 9. your expenses are greater than your income. 3. 2. 8. brainstorm about ways to reduce spending in specific categories. 6. Think about your hobbies and your habits and be sure to add categories for these expenses. 14. transfer most of it to a savings or investment account at the end of each month. Update your budget and expenses monthly VTU P. Keep track of cash expenditures throughout the month and total and categorize these at the end of each month. Start with a canned budget worksheet. For each expense category. Go through your pay stubs and calculate your average monthly gross pay. Subtotal the income and expense categories.CENTER. bonuses. 10. BELGAUM. Extra cash left in a regular checking account has a way of getting spent. dividends. try to determine a budget amount that realistically reflects your actual expenses while setting targeted spending levels that will enable you to save money.
Tips: 1. BELGAUM. Make your categories detailed enough to provide useful information. Don't try to fit your expenses into somebody else's budget categories. VTU P. 38 . 2. Tailor the categories to fit your own situation. 3.CENTER. not as a financial diet.G. Think of your budget as a tool to help you get out of debt and save money. but not so detailed that you become bogged down in trivial details.
93 51.99 NA NA NA NA NA 385.52 42 97.72 172.47 88.2 34.52 109.89 18.05 NA NA 6 7 Estimated production of ethanol(kl) Molases consumption Estimated sugar releases(mt) Estimated molases sales(mt) 8 9 Ii 1 2 3 Receipts Sugars sales Sale of buy products Advances/debts recoverable 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 39.44 Payments 1 2 3 4 5 6 7 Cane consumed Raw sugar Cost of trading sugar Other direct materials Interest on borrowings Labour cost Other administration overheads 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 114.48 279.83 127.47 293.34 NA NA NA NA NA NA 290 1188.21 84.87 2) BUDGETED STATEMENT ANALYSIS OF RENUKA SUGARS LTD VTU P.38 34.G.01 543.6 NA NA NA 243. BELGAUM.39 NA NA NA 35.38 565.87 121.54 NA NA April to Sept ___________________ Increase Decrease (%) (%) 78.79 110.48 18.17 NA 14.1) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR s.96 Nil 331. 39 .44 411.32 971.CENTER.4 43.71 NA NA 28.36 84.192 NA 39.71 54.79 1675.42 74.87 447.85 NA 490.79 NA 327.2 34.43 125.31 40.47 327.25 41.no 1 2 3 4 5 PARTICULARS Opening stock Opening stock of raw sugar(MT) Opening stock of molases(MT) Estimate of cane to be crushed(mt) Estimated production of sugar(mt) Estimated molases(mt) production of year 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 2005-06 2006-07 compared to year 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 2004-05 Oct to Mar ___________________ Increase Decreases (%) (%) 21.48 822.85 NA 490.13 NA 75.63 177.
G.no Particulars 2004-05 2005-06 2006-07 VTU P.S.CENTER. BELGAUM. 40 .
08 - 384 432 234 200 384 288 234 - 3460 1794 1224 476 3460 897 1224 - Total B Net revenue lakhs (A-B) in 26255. Working capital loan B.1 2 19163.75 NA NA 379.on other term loan C. Bio-fertilizer B.3 845.5 625.58 1038.sales wages etc N. Rawsugar cost C.22 Apl To Sep 10866.14 20209 9568 NA NA 1002 NA NA 549 990 397 18 48 6585 NA NA NA 334 NA NA NA 402 53 12 48 48177 28316 8250 NA 3822 NA NA 1200 1392 565 1118 102 18603 NA 8250 NA 1274 NA NA NA 590 429 930 102 K.0 7 13649.repairs & mait (mfr exp) G.96 286.intrest on borrowings A.3 955. Sugar cost(trading) D.08 443.CENTER.54 1602 410 1368 735 6894 132 6894 132 3 NA NA 48 48 NA NA 444 Total A 4 Expenditures A.other administration expenses L. Lease rent I.) F.22 Oct To Mar 18555 - Apl To Sep 46875 - Oct To Mar 22693 6668 Apl To Sep 86340 10002 2 Sales of byproducts A.07 -13416 40686 -63509 68053 S R S L Combined Profit & Loss budgeted statement VTU P.manufacturing expenses J.stores etc.54 2513.08 - 585.98 574.1 Revenue from sale of sugar A.G.62 402.96 286.05 NA NA 379.canes consumed(purchased) B.raw material to power plant M.directmat. Power export revenue Other income A.94 20615 49026 36387 103812 9424 5175 7210 625.7 8 4745.58 1038.16 193. Sale of bagasse 2513.dividend 585.14 1736 5175 2403.estimated excise duty H.(cons.87 34031 8340 99896 35759 -4654.6 4745.95 5514.98 574.62 402. BELGAUM. Alchol spirit B. Purchased sugars Oct To Mar 13302.16 193.08 443. Own production B.Purchase of molases&bagasse E.other financial charge 21600. 41 .
481 2.534 15. BELGAUM.607 17.352 3.796 537 4.904 2.Distillery Sales-Bio products Sales-Total Gross-profit-Sugar Gross-profit-Sugar Refinery Gross -profit .534 NA NA NA NA 6.9% NA 0% NA 4.637 20.621 3.2% 4. Sales –Sugar Sales -Sugar Refinery Sales –Cogen Sales .859 1.338 23.CENTER.0% 10.Cogen Gross -profit -Distillery Gross-profit-Bioproducts Gross-profit Total Gross Profit/Total sales (%) Interest on Term loan Interest on working capital loan Depreciation Operating profit/Loss Operating Profit/Sales (%) Profit before tax Less : tax Net profit after tax Net profit/Sales Equity Dividend amount Dividend (%) Dividend tax Retained profit Net cash accruals 2007 111.896 6.375 5.0% 190 548 769 10.259 9.278 110 42.Year ending September 30.2% 356 746 637 4.190 NA 4.155 11 11.642 8.370 4.376 6.018 13.6% 402 0% 80.525 15.2% 476 20% 95 20.095 2006 52.547 2.7% 23. Lakhs 59.671 18.620 65 29. In Crores) 2008 IV YEAR Projected VTU P.700 140 76.00 6.910 12.827 17.757 23.190 2.948 6.180 14.834 173 1.547 13.519 267 171.1% 1.409 32.353 17. 42 .452 13.018 3.259 4.360 ANALYSIS OF BALANCE SHEET Period Ending on 30th September ASSETS III YEAR Projected 2007 (Rs.929 2005 34.160 6.895 PEAK LEVEL WORKING CAPITAL REQUIREMENT Rs.G.585 9.796 11.672 2.
75 6.CURRENT ASSETS 26.68 13.17 126. BELGAUM.17 1. Instalments of deferred receivables (due within one year) 30.75 6.02 4.32 81.77 101. Other current assets (specify) Deposits with Gov. Investments (other than long term investments) (I) Government & other Trustee securities (ii) Fixed deposits with Banks 28.17 1.53 587.83 472.) (a) Imported (b) Indegenous (ii) Stocks in process (iii) Finished goods (iv) Other consumable spares (a) Imported (b) Indegnous 31.68 1.Advance payment of taxes 33. Blls purchased and discounted by banks) (ii) Export receivables (including bills purchased and discounted by banks) 29.32 17.17 1. Gross Block (land & building machinery.53 101. work-in-progress) 901.7 17.82 2. (i) Receivables other than deferred & exports (incld. TOTAL CURRENT ASSETS (Total of 26 to 33) 3 5 5 0 5 5.CENTER. Advances to suppliers of raw materials & stores/spaares 32.46 FIXED ASSETS 35.83 VTU P.75 687.34 4.75 6.02 6.G. Inventory: (i) Raw Materials (including stores & other items used in the process of mfr. Depts Advances to staff Advances to Others Balance with Central Excise 34.65 101.83 901.89 27.51 27.84 4 6 6 0 6 33. Cash and Bank balances 27. 43 .
G. b.98 0.s/affiliates (b) Others (ii) Advances to suppliers of capital goods & contractors (iii) Deferred receivables (maturity exceding 1 yr) (iv) Others 39. Expenses.55 0. Goodwill prelim.48 1. a.64 2008 1457.55 951.04 0 1.73 758. TOTAL ASSETS (34+37+41+42) 44. Non-consumable stores & spares 40. 92. Depreciation to date 37.55 0. Other nn-current assets including dues from directors 41. NET WORKING CAPITAL [(17+24)-(37+41+42)] 46.04 381. TOTAL OTHER NON-CURR. Intangible assets (patents.43 221. Investments/book debts/ advances/deposits which are not Current Assets (i) (a) Investment in subsidiary Co. exps 45.11 143.99 1. In Crores) 2007 2008 III YEAR IV YEAR Projected Projected VTU P.71 1457.7 1457.CENTER.55 0. Current Ratio 47.72 809.04 951.42 0.7 0 Period Ending on 30th September LIABILITIES (Rs. ASSETS 42.46 1.12 2007 951. BELGAUM. Total Term Liabilities/TNW YEAR LIABILITIES ASSETS DIF.36. 44 . NET BLOCK (35-36) OTHER NON-CURRENT ASSETS 38. TANGIBLE NET WORTH (24-21-42) capital+reserve-misc.7 598. Deferred Tax Assets (DTA) 43.1 0. bad/doubtful expenses not provided for etc.15 -1. Total Outside Liabilities/TNW 48.
discounted & excess borrowing placed on repayment basis) (i) From applicant Bank (ii) From other Banks (iii) (of which BP & BD) Sub-Total (A) 2. Deposits/Instalments of term loans/DPGs/ Debentures.Debentures (not maturing within one year) VTU P.61 465. Advance payment from customers/deposits from dealers 5.95 10.17 9. BELGAUM. Sundry Creditors (Trade) (i) Trade (ii) Capital Goods 4. etc.CURRENT LIABILITIES 1. Other Current Liabilities & Provisions (due within 1 year) 17.65 424.G. Provision for taxation 6.17 9. Other statutory liabilities ( due within one year) 8. Short term borrowings from others 3.32 84. 45 . TOTAL CURRENT LIABILITIES [total of 1 to 9 excld 1 (iii)] 40.CENTER. Short-term borrowings from banks (incld bills purchased.17 27.76 86. Dividend payable 7.78 26.77 128.48 TERM LIABILITIES 11.17 9. (payable within one year) 9.7 9.94 339.6 5 5 Sub-Total (B)41.33 69.
63 951. Others 24.12.88 177.28 NET WORTH 19. Preference shares (redeemable after one year) 13.54 426.81 192. Ordinary share capital 20.CENTER. Term Loans (excld instalments payable within one year) 14.68 390.G. BELGAUM.41 33. Deferred Payment Credits (excluding instalments due within one year) 15. Other term liabilities (unsecured) 17.88 214.85 23.38 23. Term Deposits (repayable after one year) 16.General Reserve 21. TOTAL LIABILITIES 395.04 610. TOTAL TERM LIABILITIES 18. Revaluation Reserve 22.82 12.95 Period Ending on 30th September (Rs.21 847.37 12.7 1.01 1457.1 1. NET WORTH 25. 46 .Other reserves [excluding provisions] 23.43 336.56 382. Deferred Tax Liability [DTL] 23 b. Surplus(+) or Deficit(-) in Profit & Loss Account 23 a.81 369. In Crores) 2007 2008 III YEAR IV YEAR VTU P.8 555. TOTAL OUTSIDE LIABILITIES [Item 10 plus item 17] 23.
28 0.Net Sales[item 1 . Stocks-in-process VTU P.84 2380.98 310.78 148.79 25.35 ix] Deduct: CI.56 51.07 2289.2 321.12 52.59 33. Cost of Sales i] Raw materials [including stores & other items used in the process of manufacture] [a] Imported [b] Indigenous ii] Other spares [a] Imported [b] indigenous iii] Power & fuel iv] Direct labour [Factory wages] v] Other mfg.92 1602.53 28. % rise [+] or fall [-] in net sales as compared to last year [annualised] 5.Projected 1. Less Excise Duty Deduct other items 3.84 91.50% 1184.45 24.item 2] 4.G.14 1541. Gross Sales (i) Domestic Sales (ii) Export Sales Add other revenue income Total 2.28 1280. BELGAUM.39 593.CENTER.01 1958.13 60. 47 . Expenses vi] Depreciation vii] SUB-TOTAL [I to vi] viii] Add: Op.75 27.1 874.99 191. stocks-in-process Sub-total 1266.32% Projected 2380.27 1202.35 1985.88 1795.57 1266.
87 1958.85 97.49 205.77 20% 178. [a] Equity dividend paid-amt [Already paid+B.36 30.38 205.19 1998.CENTER.24 33.53 1958. Sub-total [expenses] [iii] Net of non-op.76 182. Op. Income Sub-total [income] [ii] Deduct other non-op. income [a] Futures Trading [b] Interest recd. [a] Provision for taxes [b] Provision for Deferred Tax [b] Prior period Adjustment 14.62 4.92% SHREE RENUKA SUGARS LIMITED VTU P.35 40. & Misc. Profit After Tax 15. 48 .income/exp [iii] Expenses Amortised 12.04 97. Op. Sub-Total xii] Sub -Total [ Total cost of sales] 6. Selling.39% 229.77 20% 224. [i] Add other non-op.28 49.06 257. Stock of F. SUB-TOTAL [5+6] 8. exp.35 49. Profit before tax/loss [10+11 (iii)] 13. BELGAUM. Genl. Interest 10. profit after Interest [8-9] 11.28 39. [a] Preliminary Exps [b] Deferred Rev. Expenses 7.81 4.Prov) [b] Dividend Rate 16.34 1305. Exps.x] Cost of Production xi] Add: Op.s.18 2007.18 1315.38 27.54 291.G.87 23. G.86 257.Retained Profit/Net Profit[%] 1266.63 236. profit after Interest [3-7] 9.47 1266. & Admn. Retained Profit [14-15] 17.
88 21.05 2160.69 114.7 0.48 35.61 3378.85 50.84 11.24 15. Profit & Loss Account for the year ended September 30.1 145.G.51 1589.67 15.24 899. 2007 All amounts in millions of indian Rupees.28 122.81 -128.1 7 555.PROFIT & LOSS ACCOUNT (All amounts in millions of Indian rupees unless otherwise stated) Shree Renuka Sugars Limited Regd.65 736. Havelock Road.53 164 2.08 544.CENTER.04 30-Sep-06 8015.45 87.16 132.590 001. Belgaum . BELGAUM.51 49.4 2.85 935. Camp.24 779.33 0 0 544.44 16.62 6.91 3964.84 187.32 237.19 745.62 14.8 180. 49 .89 4.15 23.33 382.45 0 47.92 7438. Office: BC 105. unless otherwise stated Schedule No.39 562. INCOME Revenues (Net) Other income TOTAL EXPENDITURE Raw material consumed Cost of traded goods Increase in inventories Personnel expenses Operating and other expenses Managerial Commission Depreciation/amortization Financial expenses Research & Development Profit before tax Provision for tax Current Tax Fringe benefit tax Deferred Tax Profit after tax and before prior period items Prior Period items Add: Excess provision of Dividend on Equity Shares Less: Prior Period Expenses Net Profit Balance brought forward from previous year Profit available for appropriation Dividend on Preference Shares Dividend on Equity Shares Corporate Dividend Tax General reserve Surplus carried to Balance Sheet Basic and Diluted Earnings Per Share (in rupees) Significant Accounting Policies Notes of Accounts 16 17 30-Sep-07 7323.91 88.06 8065.15 926.47 500 326.68 300 382.18 115.98 18 19 20 21 22 6 23 24 25 26 SHREE RENUKA SUGARS LIMITED BALANCE SHEET VTU P.88 249.
77 319. 50 .85 539.32 32.69 1121. 2007 All amounts in millions of indian Rupees.31 1404.88 Loans and advances 12 1333.67 238.35 5992.25 Net Current Assets 2140.66 Less: Current Liabilities and Provisions Current Liabilities 13 822.92 6469.CENTER. Budgetary control system is adopted for checking the industrial performance.35 5992.31 Deferred Tax Liabilities 5 201.04 Net block 5623.86 Investments 7 167.G.32 916 Provisions 14 389.590 001.62 436. Balance Sheet as at September 30. VTU P.33 3357.65 1629.54 Current Assets.03 1193.66 Other current assets 11 323. Havelock Road.07 166.9 Miscellaneous Expenditure 15 21.12 Cash and bank balances 10 306.56 Less: Depreciation 690.44 2224. unless otherwise stated Schedule No.98 3711.(All amounts in millions of Indian rupees unless otherwise stated) Shree Renuka Sugars Limited Regd.52 Capital work-in-progress including capital advances 2077.59 Significant Accounting Policies Notes on Accounts 25 26 OBESERVATION IN SHREE RENUKA SUGAR LTD All departments are fully computerized no manual work is done.77 1986.93 56.85 TOTAL 10029. Belgaum . Office: BC 105.83 774.14 75.1 Reserve and surplus 2 3046. 30-Sep-07 30-Sep-06 SOURCES OF FUNDS Shareholders' Funds Share Capital 1 310.83 Sundry debtors 9 386. Loans and Advances Inventories 8 1001.59 APPLICATION OF FUNDS Fixed Assets 6 Gross block 6313.71 171.91 3544.77 TOTAL 10029.39 Unsecured loans 4 259. Camp.43 Loan funds Secured loans 3 6210. BELGAUM.61 5.26 3312.
In Shree Renuka Sugars Ltd monthly operations plan is prepared on the availability of cane and orders / commitments to corporate customers (viz. In Shree Renuka Sugars Ltd both monthly operation plan and annual operation plan are prepared ascertaining the budgeting performance with actual performance. Company is paying on an average 9% interest rate for borrowing money from financial institution like UTI. In house power is available as the co-generation is mandatory for Sugar Manufacturing companies.G. FINDINGS: VTU P. Cadbury India Ltd. accounting. Shree Renuka Sugars Ltd is Exporting 40% out of its total sales to mark its presence in International market and has been awarded a “Two Star Rating from DGFT (Directorate General of Foreign Trade). BELGAUM. Pepsi Co. SBI etc. SAP software is used for accessing the financial. Shree Renuka Sugars Ltd is importing raw sugar from countries like Brazil where sugar is by product.CENTER. also it maybe noted that the surplus power is exported to HESCOM Grid. logistics and material management. Coca Cola and many others. Depreciation is charged on the basis of Straight Line Method. the same is adopted to keep the plant running for almost whole of the year. for their working capital arrangements. 51 .
VTU P.CENTER.As annual Budging is commonly prepared by all Industrial concerns. 52 . so it doesn’t consider time value of money. Budgeting performance can be ascertained only when books of accounts are closing. BELGAUM. It is very difficult to estimate the budget performance during the course of business. sales price etc. Time factor is not taken into consideration: As the budgeting is prepared for whole year. Performance cannot be ascertained in between the budgeted period.G. Marketing condition may not be stable throughout the year Marketing condition may not react properly towards estimated sales. it normally assesses the performance of concern at the end of the financial year. which is Accurate position of the business cannot be estimated: It arises due to inflationary pressure and change in Government policies all these affect the budgeting performance. The following are some things are finding out in Annual Budgeting.
53 . As a sugarcane is the seasonal product VTU P. Optimum utilization of available resource. Co ordination can be achieved It helps to maintain favorable relationship among all departments in the organization Cost of working capital can be minimized.CENTER.RECOMMENDATION: Quarter budget helps Industrial concerns to realize its actual performance Quarter by Quarter. It helps industrial concern to utilize available resource at maximum extent. After ascertaining the actual performance if any modification requires that can be adjusted in next quarter. BELGAUM. Business risk can be ascertained. Quarter Budget helps industrial concerns to checks its actual performance. Use of quarter Budget leads to chances of improvement or modification. machinery or equipments etc. If industry is incurring loss that can be minimized or adjusted in next quarter. Its serve as a safety signal to industrial for following reasons. The resource may be raw material. It helps to ascertain industrial performance in terms of profit or loss during particular quarter. human resource.G.
Finally I can say that budgetary control techniques helps organization for optimum utilization of available resource. It helps the management to identify the reason of variation in the actual performance necessary steps can be taken. and controlling the activities of organization. departments like Finance. It helps industry to check its performance by way of comparing with budgeted performance.CONCLUSION From the above analyses of the study it is clear that budgetary control is treated as a sophisticated techniques for minimizing cost and maximizing profit in Shree Renuka Sugar Ltd. BELGAUM. directing. 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 is not mainly used for minimizing cost also used for controlling the inventory It creates better relationship among all departments in the organization. A budgetary control technique helps management for proper planning. it makes the decentralization of authority in the organization which helps organization goal with in stipulated period of time.CENTER. Production etc. Marketing. VTU P.G. organizing. it leads to achieve organization goal within stipulated period of time it checks industrial performance by way of compare with budgeted performance. 54 .
com VTU P.w.CENTER.Sahaf COST ACCOUNTING Jawahar Lal FINANCIAL MANAGEMENT Khan & Jain WEB SITE OF SRSL w.G. 55 . BELGAUM.N.shreerenukasugars.Maheshwari MANAGEMENT ACCOUNTING Principles and Practice M.S.A.BIBILOGRAPHY Principle of “MANAGEMENT ACCOUNTING” Dr.w.
Belgaum .62 6.85 935.33 382.88 249.84 11.33 0 0 544.89 4.18 115.91 3964.68 300 382.590 001.81 -128.1 145.67 15. BELGAUM.06 8065.05 2160.53 164 2.88 21.44 16.4 2.84 187.24 15.7 0. unless otherwise stated Schedule No.G.51 49.48 35. Office: BC 105.24 899.39 562.16 132. 2007 All amounts in millions of indian Rupees.69 114.61 3378.1 7 555.65 736.91 88.04 30-Sep-06 8015. INCOME Revenues (Net) Other income TOTAL EXPENDITURE Raw material consumed Cost of traded goods Increase in inventories Personnel expenses Operating and other expenses Managerial Commission Depreciation/amortization Financial expenses Research & Development Profit before tax Provision for tax Current Tax Fringe benefit tax Deferred Tax Profit after tax and before prior period items Prior Period items Add: Excess provision of Dividend on Equity Shares Less: Prior Period Expenses Net Profit Balance brought forward from previous year Profit available for appropriation Dividend on Preference Shares Dividend on Equity Shares Corporate Dividend Tax General reserve Surplus carried to Balance Sheet Basic and Diluted Earnings Per Share (in rupees) Significant Accounting Policies Notes of Accounts 16 17 30-Sep-07 7323.32 237.45 0 47.19 745.51 1589.ANNEXURES SHREE RENUKA SUGARS LIMITED PROFIT & LOSS ACCOUNT (All amounts in millions of Indian rupees unless otherwise stated) Shree Renuka Sugars Limited Regd.15 926.8 180.24 779. Profit & Loss Account for the year ended September 30.45 87.08 544. Camp. Havelock Road.92 7438.98 18 19 20 21 22 6 23 24 25 26 VTU P.15 23.62 14.47 500 326.CENTER.85 50. 56 .28 122.
77 TOTAL 10029.83 774.62 436.03 1193.61 5.CENTER.1 Reserve and surplus 2 3046.SHREE RENUKA SUGARS LIMITED BALANCE SHEET (All amounts in millions of Indian rupees unless otherwise stated) Shree Renuka Sugars Limited Regd. Loans and Advances Inventories 8 1001.59 Significant Accounting Policies Notes on Accounts 25 26 VTU P.86 Investments 7 167. BELGAUM.91 3544.25 Net Current Assets 2140.26 3312.35 5992.07 166.590 001. 30-Sep-07 30-Sep-06 SOURCES OF FUNDS Shareholders' Funds Share Capital 1 310. Havelock Road. 2007 All amounts in millions of indian Rupees. Belgaum .66 Other current assets 11 323.67 238.59 APPLICATION OF FUNDS Fixed Assets 6 Gross block 6313.71 171.04 Net block 5623.93 56. Camp.31 1404.77 319.54 Current Assets.98 3711.66 Less: Current Liabilities and Provisions Current Liabilities 13 822.88 Loans and advances 12 1333.39 Unsecured loans 4 259.52 Capital work-in-progress including capital advances 2077.9 Miscellaneous Expenditure 15 21.33 3357.G.14 75.77 1986.43 Loan funds Secured loans 3 6210.32 916 Provisions 14 389. unless otherwise stated Schedule No.44 2224.35 5992. 57 .31 Deferred Tax Liabilities 5 201.32 32. Balance Sheet as at September 30. Office: BC 105.65 1629.69 1121.12 Cash and bank balances 10 306.85 TOTAL 10029.85 539.83 Sundry debtors 9 386.56 Less: Depreciation 690.92 6469.
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