Merged - Budgetary Control 3 - BDL - MOHD ABDUL DANISH KHAN Good CP24

A
PROJECT REPORT ON
BUDGETARY CONTROL
AT
BHARAT DYNAMICS LIMITED
SUBMITTED BY
MOHD ABDUL DANISH KHAN

H.T.NO: 1211 - 21 - 401 - 021
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE
AWARD OF THE DEGREE OF
BACHELOR OF COMMERCE
OSMANIA UNIVERSITY,
HYDERABAD.
ST. PAUL’S DEGREE & PG COLLEGE

(AFFILIATED TO OSMANIA UNIVERSITY)
HIMAYATNAGAR, HYDERABAD.
(2023 - 2024)
ST. PAULS DEGREE AND PG COLLEGE
HIMAYATNAGAR, HYDERABAD. PH. NO. 27602533.
WEBSITE: www.st-pauls.co.in, EMAIL ID: stpdge@yahoo.co.in,
Ph. no. 040 27602533.
CERTIFICATE
This is to certify that MOHD ABDUL DANISH KHAN is a bonafide student of

B.COM, III YEAR of this institution with Hall Ticket No: 1211 - 21 - 401 - 021
for this Academic year 2023 - 2024. He has submitted a project on
BUDGETARY CONTROL from the organization BHARAT DYNAMICS
LIMITED under the supervision of MS. ASRA SULTANA.
DATE: PRINCIPAL
Ph. no. 040 27602533.
CERTIFICATE
This is to certify that MOHD ABDUL DANISH KHAN of B.COM, III

YEAR with Hall Ticket NO: 1211 - 21 - 401 - 021 for the academic year 2023
- 2024 has completed a project on BUDGETARY CONTROL from BHARAT
DYNAMICS LIMITED under the supervision of MS. ASRA SULTANA.
DATE: SIGNATURE OF THE GUIDE

Ph. no. 040 27602533.
CERTIFICATE
This is to certify that the project is submitted by MOHD ABDUL

DANISH KHAN bearing Hall Ticket No: 1211 - 21 - 401 - 021 of B.COM, III
YEAR on the project BUDGETARY CONTROL from BHARAT
DYNAMICS LIMITED during the academic year 2023 - 2024
External Examiner Internal Examiner

DECLARATION
I MOHD ABDUL DANISH KHAN, student of BACHELOR OF

COMMERCE hereby declare that this project report titled BUDGETARY
CONTROL from BHARAT DYNAMICS LIMITED submitted by me to the
department of Commerce, OU, Hyderabad, is a bonafide work undertaken by me
and is not submitted to any other University or Institution for the award of any
degree / certificate or Published any time before.
Date: Signature of student
Name: MOHD ABDUL DANISH KHAN

ACKNOWLEDGEMENT
As a student of St. Paul’s Degree and P.G College affiliated to Osmania

University, I express my heartfelt gratitude to the BHARAT DYNAMICS
LIMITED for providing the necessary information related to my project.
I also express my sincere thankfulness to Sri. SIRAJUDDIN, Hon. Secretary &

correspondent of St. Paul’s Degree & P. G College and Sri. M. HAYA
GREEVA CHARY, Principal St. Paul’s Degree & P.G College for providing me
the opportunity and complete cooperation, and all the necessary infrastructure to
complete my project.
Last but not the least it is my pleasure to have a dedicated faculty and guide for
my project, their whole-hearted co-operation helped in completing the project in
time and acquiring the knowledge.
MOHD ABDUL DANISH KHAN

1211 - 21 - 401 - 021
ABSTRACT
Budgetary control plays a pivotal role in the financial management of organizations, facilitating
effective planning, monitoring, and control of financial resources. This project report delves
into the implementation and effectiveness of budgetary control at Bharat Dynamics Limited
(BDL), a premier defense PSU in India. The report aims to analyze how BDL employs
budgetary control to optimize its financial performance and achieve its strategic objectives.
The first section of the report provides an overview of budgetary control as a management tool,
highlighting its significance in the context of BDL's operations. It delves into the theoretical
framework of budgetary control, outlining its key components such as budget preparation,
implementation, monitoring, and variance analysis. Furthermore, this section examines the
relevance of budgetary control in the dynamic and complex environment of defense
manufacturing, emphasizing its role in ensuring cost efficiency and resource optimization.
The second section offers insights into the specific budgetary control mechanisms adopted by
BDL. It explores the company's budgeting process, including the formulation of annual
budgets, allocation of resources across departments, and setting performance targets.
Additionally, this section evaluates the effectiveness of BDL's budgetary control systems in
aligning financial activities with organizational goals, enhancing accountability, and
facilitating informed decision-making by management.
The third section of the report assesses the performance of BDL in terms of budgetary control.
It analyzes key financial indicators such as budget variance, cost efficiency, and adherence to
budgetary targets. Through quantitative analysis and comparison with industry benchmarks,
this section aims to evaluate the extent to which BDL's budgetary control measures contribute
to its financial stability and competitive advantage in the defense sector.
Finally, the report concludes with recommendations for enhancing the effectiveness of
budgetary control at BDL. Drawing upon the findings of the analysis, it proposes strategies for
refining budgeting processes, strengthening monitoring mechanisms, and fostering a culture of
fiscal discipline within the organization. By implementing these recommendations, BDL can
further leverage budgetary control as a strategic tool for achieving operational excellence,
financial sustainability, and long-term growth amidst evolving market dynamics and regulatory
requirements.
TABLE OF CONTENTS
CHAPTER NO CONTENTS PAGE NUMBER
I INTRODUCTION 01-06
II REVIEW OF LITERATURE 07-26
III COMPANY PROFILE 26-35
IV DATA ANALYSIS AND INTERPRETATION 36-59
V FINDINGS, SUGGESTIONS & CONCLUSION 60-63
- BIBLIOGRAPHY 64-65
CHAPTER I
INTRODUCTION
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INTRODUCTION:
Budget is one of the emphasized terms used in efficient methods of planning and
control. It is employed, no doubt, in large business houses, but even the small businesses are
using it, in some informal manner. Budget in common parlance is understood as planning for
expenditure.
A budget is defined as a comprehensive and Co-ordinate plan expressed in
financial terms, for the operations and resources of an enterprise for some specified period in
the future.
Budgetary control is part of overall organisations control and is concerned primarily
with the control of performance. The use of budgetary control in performance management
has of late taken on greater importance especially as a more integrative control mechanism
for the organisations. Critically evaluate this claim, supporting your discussion with both
theoretical arguments and practical examples.
In the views of E. H. Graham of the Chrysler Corporation, “Of the management tools
used by Chrysler Corporation, including computers, PERT, Operations Research (OR) and
system analysis and so on, budgets are un doubly the most important tool”.
Budget is always expressed in terms of money and quantity. The techniques of
budgeting are important applications of Management accounting.
Budgets are set in large business houses as well as in families. It is basically a
statement of expected income & expense under certain anticipated operating conditions.
ADVANTAGES OF BUDGETARY CONTROL SYSTEM
It is necessary for a manager to understand the strengths and weaknesses of budgetary system
in general, and budgetary control system in particular, to enable him to use it as a proper tool
of management.
i. The greatest strength of budgeting lies in its use of rupee language i.e., use of a single
common denominator for a great many diverse actions and things. It defines the objectives of
an organization as a whole and in financial terms.
ii. Budget deals directly with efficiency, which is the main concern to every organization. It
provides yard stick to measure efficiency of various units of the organization.
iii. Budgetary system helps managers to learn from past experience.
iv. Budget under various functional units indicates the limits for expenses and results to be
achieved.
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v. Budgetary control system reveals the extent by which actual results have varied from
defined objectives.
HOW BUDGETARY SYSTEM CAN OPERATE EFFECTIVELY TO

INCREASE MARKET SHARE
While budget is a financial statement, which provides details of the proposed revenues and
their utilization for expenditure for a specific period, the budgetary control is the process of
comparing what was planned with what has been accomplished during the period. A
budgetary control system helps to measure the progress made towards goals, to uncover
deviations, to initiate corrective actions, to know the causes for deviations and hence to avoid
leaving things to happen as the happen. therefore in other to increase market share through
effective budget control, when budget are properly followed, supervised and executed there is
always reduction in time, cost and wastage these extra resources if re-invested into the
business and using the appropriate market business strategy by expanding the total market,
expanding the market shares and also by protecting the market share. Expanding the market
share can be by stimulating the products usage, creating new users for the products and also
finding new users of the products this could be achieved by advertisement, products
sensitization, seminars presentations and trade fairs
Also in other for the market share to be increase the shares need to be protected by applying
pre-emptive defense strategy there by keeping our competitors of balance in this case we
identify our current products strength and weakness we build on them and create a very good
competitive advantage by striking first lunching new and improved brand into the market and
close all windows of opportunity for other competitor in this way our shares will be protected
and our share price improved
3
NEED OF THE STUDY
Budget schedule is so essential and must because during this period for which a
budget is prepared and employed. In terms of time, budget can be short and Long-terms
Budget. Short-term Budget is prepared on the basis of day-to-day administrations. They are
generally prepared in physical as well as in monitory. Long-term Budget is designed for a
long period. This is prepared in the case of major projects schemes to know in advances the
probable capital commitment
OBJECTIVES OF THE STUDY
1. To study the various aspects of budget and budgetary control.
2. To study the performance of the organization in terms of profitability.
3. To study revenue receipt and revenue expenditure of the organization
4. To study the actual performance with budget performance.
5. To facilitate centralized control with delegated authority and responsibility
SCOPE OF THE STUDY
The scope of the study is very wide as it ranges from the various specific budgets of
each department to the Master Budget and Performance Budget of the organization.
Master Budget is a “Summary of the budget schedules in capsule form made for the
purpose of presenting in one report the highlights of the budget forecast”. Performance
Budget involves evaluation of the performance of the organization in the context of both
specific as well as overall objectives of the organization. According to the National Institute
of bank Management Performance Budgeting technique is, “The process of analyzing,
identifying, simplifying and crystallizing specific performance objectives of a job to be
achieved over a period in the frame work of the organization objectives, the purpose and
objectives of the job. The technique is characteristic by its specific directions towards the
business objectives of the organization”.
4
RESEARCH METHODOLOGY
Case study method has been adopted to carry out the study. Both primary and
secondary data have been used to complete the study.
Primary data: Primary data was collected through interaction with personnel who are
working in finance and Accounts Departments of the organization.
Secondary data: Secondary data was collected from the company annual reports &
other relevant records. Afterwards, the data collected is processed and analyzed by using
appropriate analytical tools and techniques so as to examine the efficiency. The present study
was carried out for a period of thirty days in a prestigious organization i.e. BHARAT
DYNAMICS LIMITED.
SOURCES OF DATA:
The data of BHARAT DYNAMICS LIMITED, has been collected mainly from
secondary sources viz.
• Form the concerned officers of the BHARAT DYNAMICS LIMITED.
• BHARAT DYNAMICS LIMITED journals.
• Accounting books, records.
• Key books of concerned title.
• Statistical records
• BHARAT DYNAMICS LIMITED library.
Tools and techniques:
The tools used for this study are:
1. Budget sheets
2. Bar diagrams
5
LIMITATIONS OF THE STUDY:
The following are the limitations of the study
1. The study is limited based on data provided by the company’s financial statements. So
the limitations of the statements are equally applicable of this study.
2. Estimates are used as basis for budget plan and estimates are based mostly on
available facts and best managerial judgment.
3. Budgetary control cannot reduce the managerial function to a formula. It is only a
managerial.
4. Tool which increase effectiveness of managerial control.
5. The use of Capital budget may be to restricted use of resources. Budgets an often
taken as limits.
6. Efforts may therefore not be made to exceed the performance beyond the Budgets.
7. Budgeted targets.
8. Frequent changes may be called for in budgets due to first changing industrial climate.
9. The study is the limited up to the date and information provided by BHARAT
DYNAMICS LIMITED and its annual reports.
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CHAPTER II
REVIEW OF LITERATURE
7
REVIEW OF LITERATURE
Ishola Rufus Akintoye (2008) “Budget and Budgetary Control for Improved Performance:
A Consideration for Selected Food and Beverages Companies in Nigeria”); „Budget‟ and
„Budgeting‟ are concepts traceable to the bible days, precisely the days of Joseph in Egypt. It
was reported that „nothing was given out of the treasure without a written order‟. History has
it that Joseph budgeted and stored grains which lasted the Egyptians throughout the seven
years of famine.
Chika Agu (2006) in the case study of 'budgeting and budgetary Control in Business
organization,' "Budgetary control, is the use of the budget as an instrument for the guidance
of business operations. In that case, budgets serve as a yardstick for executive control of
operation, to determine the extent to which planned goals and objectives are being attained
and to arrest off-line drifts on "time". While agreeing that budgetary control follows budget
preparation, lucky opined that budgets require not only top managerial support but that
control is assisted as well by "participation of budgets holders into the investigation of
solution to the problems which arise".
Boquist (1998) observe that companies continue to blunder and fail because they have
flawed budgetary planning and control systems, which they apparently fail to recognized.
Some firms sense weakness of their budgetary analysis but viewed them as individual
problems rather than systematic deficiencies. They misdirect efforts and produce greater
frustrations. As a result, corporate strategy and capital allocation become misaligned and
remain so, despite disapproving financial performance.
Onho Stepen Ioryer, Iortyer Doo Boniface and Zayol Patrick (2017) A Critical Appraisal
of Budgeting and Budgetary Control, “To ascertain the effectiveness of budgets control and
the problems affecting budgeting and budgetary control. The budgeting and budgetary control
in public sector is weak and despite the effort of government, it has failed because of
dependence on federation account, untrained budget staff, non-adherence to budgetary
control measures, corruption, inflation and political environment. The author recommended
among others that there is a need for budget culture in the public sector, sharpening the
budget monitoring and implementation procedures in the public sector, sustaining greater
accountability and transparency and making the need for budgeting realistic and not just a
formality”.
Prof. Mubina Shaikh, (2016) A Study on Budget and budgetary control, “Budgetary control
is a system in which income and spending are compared with a company’s budget to make
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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 need to be revised to
account for spending and an increase or decrease or in income”.
Dr.Abhijit Pandit (2016) “A budget is a formal expression of policies, plans, objectives and
goals laid down for a definite period in the future. The budget expresses revenue goals in the
sales budget and expense limitations in the expense budgets that must be attained in order to
realize the desired profit objective. Budgetary control involves the use of budgets and
budgetary reports throughout the period of budget to co-ordinate, evaluate and control day-
today operations in accordance with the goals specified by the budget”.
James D.Savage, (2015) “Budgeting is a process of governments allocate public resources to

bureaucracies, other governmental units, and client groups. This process usually takes place
on an annual basis, involves procedural rules and institutional arrangements, often invokes
intense political conflict, and, together with taxation, forms the basis for fiscal and macro
economic policy. Because it fundamentally determines political winners and losers through
its allocative function, budgetary processes and outcomes serve as a distinct guide to a state’s
philosophy of government and public policy. The act of budgeting, therefore, lies at the heart
of politics and government”.
S Kimunguyi, F Memba and A Njeru, (2015) “The main objective of this study was to
establish the effect of budgetary process on financial performance of NGOs in health sector
in Kenya, applying priority based budgetary theory. Regression results revealed that
budgetary process had significant influence on financial performance”.
Lambe Issac, Mary Lawal and Theresa Okoli (2015), A Systematic Review of Budgeting
and Budgetary Control, “Budget and budgetary control entails the establishment of goals by
the management of an organization and designing a process which serves as a framework
within which an organization effectively articulates overall planned activities. The
quantification of these planned activities in financial terms is known as budgeting, while the
establishment of an effective mechanism to guarantee desired result is known as budgetary
control. It therefore recommended that since budgeting and budgetary control contributes to
management efficiency and high productivity of an organization, all relevant stakeholders
must be involved in the budget process, from preparation to implementation, in order to
guarantee overall goal attainment”.
Tanase GabrielaLidia, (2014), “Budgeting is universally used all over the world. Budgets
are the most powerful tool for management control, they are the key drivers and evaluators of
9
managerial performance. However, in recent years criticism towards traditional budgeting has
been notably increased. Researchers consider that traditional budgeting is a relic of the past;
it cannot keep up with the changes and requirements of today’s business world”
Tanase GabrielaLidia, (2014) “Budgets are management tools universally recognized for
their ability to support planning and efficient management of resources and activities in
economic entities. The preparation and use of budgets is not without difficulties. This
presents a synthesis of the studies on the difficulties of the budgeting process and the factors
that determine nevertheless the adoption and use of this tool. The result show that budgets are
useful tools and offer numerous advantages, despite the issues generated, which determines
their importance and use in economic entities”.
THEORETICAL FRAMEWORK - CONCEPT OF BUDGET

Budget is as quantified plan for future activities – quantitative blueprint for action. It
is referred as a plan relating to period of time expressed in monetary and in quantitative
terms.
The Charted institute of Management Accountants, (CIMA) defined budget as

follows: -
A plan expressed in money. It is prepared and approved prior to the budget period and
may show income, expenditure of the capital to be employed, may be drawn up showing
incremental effects a former budgeted or actual figures.
According to Gordon shilling law, “A business budget is pre-determined detailed plan

of action, developed and distributed as a guide to current operations and as a partial basis for
subsequent evaluation of performance”.
The Essentials of a Budget are

• Financial and quantitative statement of the action plan.
• It is planning device and also serves as a bases for performance evaluation and
control.
• It is laid down prior to the budget period during which it is followed and based on
rights policy.
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BUDGET MANUAL
A budget Manual lays down the details of the organizational set up, the routine procedures
and programs to be followed for developing budgets for various items and the duties and
responsibilities of the executives regarding the operation of the budgetary control system.
A budget manual is defined as a document schedule or booklet which sets out, inter
alia, the responsibilities or the persons engaged in the routine of and the forms and records
required for budgetary control. Budgets are to be drawn keeping in view the objectives of the
organization given in the budget manual.
The following are some of the most important matters covered in a Budget Manual:-
• Introduction and brief explanation of the objectives, benefits and principles of

budgetary control.
• Organization chart giving the titles of different personnel’s with full explanation of
the duties and each to operating systems and preparation of departmental and
functional budgets.
• The entire process of budgeting program including the timetable for periodical
reporting.
• Length of budget periods and control periods should be clearly states.
• Procedures to be followed throughout the system should be explained in clear terms.
• Outline of main budgets and their accounting relationships.
EXPLANATION OF KEY BUDGETS

The advantages to be derived from the use of budget manual are:
• Everyone knows in writing that what is his role, what is to be done and how it is to be
done in the system of budgetary control.
• As everything is in writing. Ambiguity is avoided and reliance on memory is

eliminated.
11
• As one of the objectives of budgeting is communication, it is important to have
budget manual so that everyone in the organization can refer to it for guidance and
information about the budgetary process.
ADMINISTRATION OF BUDGETS
Budgeting takes up a lot of management time. Top managers want lower level managers
to participate in the budget process, because lower-level managers have valuable knowledge
about the day-to-day aspects of running the business. They also Creates greater commitment
and responsibility towards the budget among lower level managers.
The prevalence of budgets indicates that the advantages of budgeting systems

outweigh their cost. To gain the benefits of budgeting. Management at all levels of the
company should understand and support the budget and all aspects of the management
control system.
Budgets should not be administered rigidly. Changing conditions usually call for
changes in plans. A manager may commit to the budget, but a situation might develop in
which some unplanned repairs or an unplanned advertising program would better serve them
in interest of the company.
BUDGETING
It is concerned with the implementation of the approved programs within the long-
range plan. It is the act of preparing budgets. Budgeting is a way of managing Business and
Industry
CLASSIFICATION OF BUDGETS
The budgets are usually classified to their nature. The following are the types of
budgets, which are commonly used.
1. Classification according to Time
❖ Long – term Budgets
❖ Short – term Budgets
❖ Current Budgets
2. Classification on the basis of Functions
❖ Operating Budgets
❖ Financial Budgets
❖ Master Budgets
3. Classifications on the basis of Flexibility
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❖ Fixed Budgets
❖ Flexible Budgets
1) CLASSIFICATION ACCORDING TO TIME
• Long – Term Budgets
The budgets are prepared to depict long-term planning of the business. The period of long-
term budgets varies from five to ten years. The long-term planning is done by top level
management. Long time budgets are prepared for some sectors of the concern such as capital
expenditure, research and development, long-term finances etc. These budgets are useful for
those industries where gestation period is ling i.e. machinery, electricity, engineering etc.
• Short-term Budgets:
These budgets are generally for one or two years and are in the form of monetary
terms. The consumer’s goods industries like sugar, cotton, etc., Use short-term budgets.
Current Budget:
The period of current budget is generally of months and weeks. These budgets
relate to the current activities of the business. According to Institute of Cost and
Works Accounts., London “Current Budget is a budget which is established for use
over a short period of time and is related to current conditions.
2) CLASSIFICATION ON THE BASIS OF FUNCTIONS
• OPERATING BUDGET
These budgets relate to different activities or operations of a firm. The number of

such budget depends upon the size and nature of the business. The commonly used operating
budgets are:
✓ Sales Budget
✓ Production Budget
✓ Production cost Budget
✓ Purchase Budget
✓ Raw Material Budget
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✓ Labor Budget
✓ Plan Utilization Budget
✓ Manufacturing Expense or Works Overhead Budget
✓ Administration and Selling Expenses Budget etc.
The Operating Budget for a firm may be constructed in terms of program or

responsibility areas, and hence consists of
▪ Program Budget
▪ Responsibility Budget.
• PROGRAM BUDGET
It consists of expected revenues and costs of various products or projects that are
termed as the major programs of the firm such as budget can prepared for each product line
or project showing revenues, costs and the relative profitability of the various programs.
Program Budgets are useful in locating areas where efforts may be required to reduce costs
and increase revenues. They are also useful in determining imbalances and inadequacies in
program so that corrective action may be taken in future.
• RESPONSIBILITY BUDGET
When the budget of a firm is constructed in terms of responsibility areas it is

called the responsibility budget. Such shows the plan in terms of persons responsible for
achieving them. It is used by the management as a control device to evaluate the performance
of executives who are in-charge of various cost centers. Their performance is compared to the
targets (Budgets), set for them and proper action is taken for adverse result, if any. The kinds
of responsibility areas depend upon the size and nature of business activities and the
organizational structure. However, responsibility area may be classified under three broad
categories:
❖ Cost / Expense Centre
❖ Profit Centre
• FINANCIAL BUDGET
Financial Budgets are concerned with case receipt and disbursements, working capital
expenditure, financial position and results of business operations.
The commonly used financial budgets are
▪ Cash Budget
▪ Working Capital Budget
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▪ Capital Expenditure Budget
▪ Income statement Budget
▪ Statement or Retained Earnings budget
▪ MASTER BUDGET
Various functional budgets are integrated into Master Budget. The Budget is prepared
by the ultimate integration of separate functional Budget. According to Institute of Cost
and Works Accounts, London, “The Master Budget is the summary Budget incorporating
its functional Budget”. The Budget Officer prepares Master Budget and it remains with
the top-level management. This budget is used to co-ordinate the activities of various
functional department and also to help as a control device.
3) CLASSIFICATION ON THE BASIS OF FLEXIBILITY
▪ Fixed Budget:
The fixed budgets are prepared for a given level of activity the budget is prepared
before beginning of the financial year. If the financial year starts in January then budget
will be prepare a month or two months earlier (November or December). The changes in
expenditure arising out of the anticipate changes will not be adjusted in the Budget. These
is a difference of about twelve months in the budgeted an actual figures. According
Institute of Cost and works Accounts, London, “Fixed Budget is a budget which is
designed to remain unchanged irrespective of the level of the activity actually attained”.
Fixed budget are suitable under static conditions.
FLEXIBLE BUDGET
A flexible budget consists of series of Budgets for different level of activity. It

therefore, varies with the level of activity attained. A flexible Budget is prepared after taking
into consideration unforeseen changes in the conditions of the business.
A flexible Budget is defined as Budget which by recognizing the difference between

fixed, semi-fixed and variable cost is designed to change in relation to the level of activity.
The flexible budgets will be useful where level of activity changes from time to time. When
the forecasting of demand is uncertain and the undertaking operate under shortage of
materials, labor etc. this Budget will be more suited.
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OPERATING BUDGETS
1) Sales Budget
A Sales Budget is an estimate of expected sales during a Budget period. A sales

Budget is known as a nerve center or backbone of the enterprise. The degree of accuracy with
which sales are estimated will determine the practicability of operating Budgets. A sales
Budget is the starting points on which other budgets are also bases. A sales Budget lay down
potential sales figures in value as in quantity. It lays down a comprehensive plan and program
for sales department. The sales manager is made responsible for preparing Sale Budget. He
uses all possible factors to be taken into account while preparing a sales Budget.
2) PRODUCTION BUDGET
Production Budget is built up in terms of quantities and money. The quantities are
entered at the beginnings and when the remainder of the Budget has been built up and the
cost of production calculated the costs are entered to compile a production cost Budget. In
preparing the production Budget the following factors should be considered.
➢ Principal Budget factor, e.g. if the sales be the key factor then sales Budget, otherwise
other Budget.
➢ Production planning and determination of optimum capacity.
➢ The opening and closing stocks.
➢ Management policy regarding make or buy of components.
1) PRODUCTION COST BUDGET
A purchase Budget gives the details of the purchases which must be made to meet the
needs of the business. It includes all items of purchase, such as raw materials, indirect
materials and other equipment. However, purchase Budget for raw materials is the most
important and the following are required to be considering in preparing this Budget.
4) PURCHASE BUDGET
A Purchase budget gives the details of the purchases which must be made to meet the
needs of the business. It includes all items of purchase, such as raw materials, indirect
materials and other equipment’s. However, purchase Budget for raw materials is the most
important and the following factors are required to be considering in preparing this Budget.
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▪ Opening and closing stocks
▪ Unfulfilled orders at the beginning of the budget period.
▪ Storage space, economic buying quantity and financial resources.
5) MATERIAL BUDGET
A Materials Budget shows the estimated quantities as well costs of raw materials and
components required for producing goods as per production Budget. At the stage of
preparation of materials Budget is used to obtain the cost of each material consumed. It
serves the following purposes.
• It assists purchasing department in planning the purchases.
• It helps in the preparation of purchase Budget
• It provides data for raw materials control.
6) LABOUR BUDGET
This Budget gives and estimates the requirements of directs labor essential to meet
the production target. This Budget may be classified into “Labor requirement budget” and
“Labor Requirement Budget”. The purpose of Labor Budget is to assist in the provision of the
correct number and type of Employee for the projected output. Once the preliminary
classification of labor into its principal grades has been carried out, the labor requirements for
each product are then set with the help of time and motion studies. From the total mean-hour
required for production labor requirements are ascertained and from the estimated rate per
hour, labor cost per hour, labor cost per unit is determined.
7) PLANT UTILIZATION BUDGET
This budget indicates that the plan and machinery requirement to meet the budgeted
production during the period. Such a budget will detail the machine load in every department
and indicate the extent of under or over loading. Thus management may get useful
information regarding the effective utilization of plants and machinery in an organization.
8) MANUFACTURING OVERHEADS BUDGET
This Budget gives an estimate of the works overhead expenses to be incurred in a

budget period to achieve the production target. The budget includes the cost of indirect
materials, indirect labor and indirect works expenses. The budget may be classified into fixed
cost, variable cost and semi-variable cost. It can be broken into departmental overhead can be
17
estimated on the basis of past information after taking into consideration the expected
changes which may occur during the Budget period. Variable expenses are estimated on the
basis of the budgeted output because these expenses are bound to change with the changes in
output.
9) ADMINISTRATION COST BUDGET
All the administration costs relating to each Budget center should be separately and
then incorporated in the administration cost Budget. A very important aspect of
predetermining administration costs is to make sure that all administrative functions are
carried out as effectively as possible. Thus, this budget represents forecast of the cost of
selling and Distribution for Budget represents forecast of the cost of selling and distribution
of budget period and is clearly related to the sales Budget. All expenses relating to selling and
distribution of the various products as indicated in the sales budget are included in it. These
expenses are based on the volume of sales distribution overhead. Long-term expenses
advertisement are divided into fixed and variable categories with reference to volume of sale,
separate Budgets are of selling and distribution costs as cost of transport department are
included in the departmental production cost Budget form control point view rather than
including in selling and distribution costs Budget.
FINANCIAL BUDGET
1) CASH BUDGET
This Budget gives an estimate of the anticipated receipts and payment of each
during the Budget period. So, this Budget is divided into two parts, one showing the
estimated cash receipt on account of cash sales, credit collections and miscellaneous receipt
and the other showing the estimate disbursement on account of cash purchases, amount
payable to creditors, wages payable to workers, indirect expenses payable, Budgeted, wages
payable to workers, indirect expenses payable, budgeted capital expenditure etc. In short,
every factor which affects the receipts and payments of cash are taken into accounts in the
preparation of this Budget.
2) CAPITAL EXPENDITURE BUDGET
The Capital Expenditure Budget gives an estimate of the amount of capital that may
be needed for acquiring the fixed assets required for fulfilling production requirements as
specified in the production budget. The Budget is prepared after taking into consideration the
18
available productive capacities, probable reallocation of the existing assets and possible
improvement in production techniques. Separates Budget may be prepared for different items
of assets such as plant and equipment Budget, building budget, etc.
The capital expenditure Budget is an important Budget providing for acquisition of

assets, necessitated by the following factors:
• Replacement of existing assets.
• Purchase of additional assets because of starting up of new lines of production.
• Installation of an improved type of machinery so as to reduce cost of production.
Thus, Capital Expenditure Budget enables one to know what new fixed assets are
needed and what will their costs rate of return.
PURPOSES:
The objectives of Capital Expenditure Budget are stated below
➢ To enable the company to establish system of priorities in expenditure
➢ To correct capacity imbalances.
➢ To provide a tool for controlling capital expenditure.
➢ To make proper financial provision to meet planned expenditure.
➢ To provide Budget of depreciation and maintenance costs for inclusion in the
department expense Budgets.
PERFORMANCE BUDGETING
“Performance Budgeting” had its origin in the U.S.A after Second World War. It
tries to rectify some of the shortcomings in the traditional Budget. In the traditional Budgets
amounts are earmarked for the objects of expenditures such as salaries, travel, office
expenses, grant-in-aid etc. In such system of Budgeting the money concept was given more
prominence i.e. estimating or projecting rupee value for the various accounting heads or
classification of revenue and cost. Such system of budgeting was more popularly used in
government department and many business enterprises. But such system Budgeting control of
performance in terms of physical units or the related costs cannot be achieved.
These days Budgets are established in such a way so that item of expenditure is
related to specific responsibility center and is closely linked with performance of that
standard. Developing work programs and performance expectations by assigned
responsibility is the achievement and objects of the enterprise. Thus, in performance
19
Budgeting classification of expenditure follows a three-tier pattern viz. Function-Program -
Activity.
Advantages of Performance Budgeting

The following are the main advantages of performance Budgeting.
➢ It presents clearly the purpose and objectives for which funds are required.
➢ It gives better appreciation of Budgeting by legislature.
➢ It improves Budget formulation process.
➢ It enhances accountability of the executives.
A Systematic Approach to develop the performance budget
Objective
Structure
Execution
&
Record Keeping
Review Organizational
Develop Physical
& Structure
Targets
Control
Develop
Function
Programs
20
ZERO BASE BUDGETING
Under Zero Base Budgeting methods, before preparing a Budget a base determined
form which the Budget process begins. Quite often current year’s Budget is taken as the base
or the starting point for preparing the next year’s Budget. The figures in the base are charged
as per the plan for the next year. This approach of preparing Budget is called “Incremental
Budgeting” since the Budget process is concerned mainly with the increases or changes in
operations that are likely to occur during the Budget period. For example, sales of the current
year’s Budget for sales will be current year’s sales plus and allowance for price increases and
expected changes in sales volumes. The main drawback of this approach is that it perpetuates
the past inefficiencies.
Zero Base Budgeting is an alternative to Incremental Budgeting. It was introduced at

Texas Instruments in USA in 1969 by peter pyre, who is known as the father of Zero Base
Budgeting. It is managerial tool and is steadily gaining acceptance in the business
community. Zero Base Budgeting is not based on Incremental approach and precious figures
are not taken as the base for preparing next year’s budget. Instead, the Budget figures are
developed with zero as the base, which means that a budget will be prepared as if it is being
prepare for a new company for the first time.
In Zero Base budgeting, budget requests for appropriation are accepted on the basis of
cost / benefit approach, which ensures value for money. If question long-standing
assumptions and systematically examines and perhaps abandons any unproductive projects.
This means that those activities which are of no value find no value in the
forthcoming Budget even though these might have been an integral part of the past budget
prepared under the traditional approach. Zero Base budgeting in way are tries to locate those
activities not essential.
The important steps in Zero Base Budgeting are

➢ Identification of decision units in order to justify expenditure in their proposed
Budget.
➢ Preparation of Decision Packages. Each package is a separate and Identifiable

activity. These packages are linked with corporate objectives.
21
➢ Ranking of decision packages based on cost benefit analysis.
➢ Allotment of funds based on the above resulting by following pyramid-ranking

system to ensure optimum results.
CONCEPT OF BUDGETARY CONTROL
Budgetary Control and Budgeting are often used inter changeably to refer to a system
of management control. “Budgetary Control” implies the use of a comprehensive system of
budgeting to aid management in carrying out its functions like planning, co-ordination and
control. According to C.I.M.A, London “Budgetary Control is the establishment of budget
relating to the responsibilities of executive of a policy and to continuous comparison of the
actual with the budgeted results, either to secure by individual action the objection of policy
or to provide a basis for its revision”.
According to Brown and Howard “Budgetary Control is a system of controlling costs

which includes the preparation of budgets, coordinating the debts and establishing
responsibilities, comparing actual performance with the Budget and acting upon results to
achieve maximum profitability.
Characteristics of Budgetary Control
The Main Characteristics are as follows:

➢ Establishment of Budgets for each function or department of the organization.
➢ Comparison of actual performance with the Budgets on continuous basis.
➢ Analysis of variations of actual performance form that of the budgeted
performance to know the reasons there of.
Co-Ordinal Features
The three Co-Ordinal features of a “Budgetary Control” are as follows:
➢ Planning
➢ Co-ordination
➢ Control
OBJECTIVE OF BUDGETING CONTROL

Budgetary control improves planning and in co-ordination and helps in control. The
reasons for producing budgets are as follows:
1) To aid planning of annual operation.
22
2) To co-ordinate the activities of various parts and to ensure harmonious conditions
prevails in the organization with each other.
3) To communicates plans to the various responsibility center managers.
4) To motivate managers to strive to achieve the organizational goals.
5) To control activities.
CHARACTERISTICS OF A GOOD BUDGETING
1) Budgeting process should be backed and supported by the chief executive of an

organization.
2) The Organization goal should be qualified and clearly stated. These goals should be
within the frame work of organization in plans.
3) There should be proper fixation and delegation of authority and responsibility.
4) The persons for execution of budget should participate in budget preparation.
5) The Budget should be realistic. It should present goals that are reasonably attainable.
6) A good system of accounting is also essential to make the budgeting successful.
7) The budget should cover all the phases of the organization and be continuous
exercise.
8) Periodic report should be prepared. Comparing budget and actual results i.e.., there
should be effective follow up.
REQUISITES FOR A SUCCESSFUL BUDGETARY CONTROL

SYSTEM
1) The budgets are used to realize objectives of the business. In the absence of clear
goals, the budgets will also be unrealistic.
2) Budget preparation and control is done at every level of management. Every though
budgets are finalized at top level but the involvement of person form lower levels of
management is essential for their success. This necessitates proper delegations of
authority and responsibility.
3) An effective system of communication is required for a successful budgetary control.
4) Budgetary control may not be taken only as control device by the employees but it
should be used as a tool improves their efficiency.
23
5) Budgeting is done4 for every segment of the business. It will also require the active
participation and involvement of all employees. The success of budgetary control
systems depends upon the participation of all employees of the organizations.
6) Flexibility in budgets is required to make them suitable under changed circumstances.

Budgets are prepared for the future, which is always uncertain. Flexibility will make
the budgets more appropriate and realistic.
7) 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.
ADVANTAGES OF BUDGETARY CONTROL
• The Budget program forces the managers into plan ahead.

• In forces early consideration of basic policies.
• All members of top management participate in budget committee. For this reason
even planning a departmental level gets benefits of experience of seasoned executives.
• Management is forces to put down in cold figures, what is means by satisfactory
results.
• It demands the most economical use of labor, materials, facilities and capital.
• In inculcates a habit of timely, careful, adequate considerations of all factors before
reaching important decisions.
• The use of budget promotes understanding of the problems of co-workers.
• It facilitates period self-analysis of the organization.
• The use of budgets removes clouds of uncertainties for lower levels of management
regarding basic policies and objectives.
• Management is forced to give timely and adequate attention to the effect of changing
business conditions.
• Budgeting co-ordinates the activities of various department and functions of the
business.
• Budgeting control aims at maximization of profits through careful planning and
control.
24
• It directs capital expenditure in maximization of profits through careful planning and
control
• It directs capital expenditure in the most profitable direction.
• Budgetary control system creates necessary conditions for the introduction of standard
casting techniques.
LIMITATIONS OF BUDGETING
➢ Estimates are used as basis for budget plan and estimates are based mostly on
available facts and beset managerial judgments. Since a lot of human element is
involved in exercising managerial judgment. It is but natural to give some allowance
interpretation and utilization of estimated results. Budgeting based on inaccurate
forecasts is use less as a yardstick for the measuring of the actual performance.
➢ The circumstances are constantly changing and therefore budgets and budgetary
techniques will not be useful, till they are continually adapted.
➢ Budgetary control cannot reduce the managerial function to a formals. It is only a

managerial tool, which increase effectiveness of managerial control.
➢ The use of budgets may lead to restricted use of resources. Budgets are often taken as
limits. Efforts may, therefore, not be made to exceed the performance beyond the
budgeted targets, even though it may be physically possible
25
CHAPTER III
THE COMPANY PROFILE
26
INTRODUCTION
Bharat Dynamics Limited (BDL) is one of India's manufacturers of ammunitions and missile
systems. It was founded in 1970 in Hyderabad, India. BDL, since its inception, has been
working in collaboration with DRDO & Foreign Original Equipment Manufacturers (OEMs)
for manufacture and supply of various missiles and allied equipment to Indian Armed Forces.
While fulfilling its basic role as a weapon system manufacturer, BDL has built–up in-house R
& D capabilities primarily focussing on Design & Engineering activities. BDL has three
manufacturing units, located at Kanchanbagh, Hyderabad; Bhanur, Medak district, and
Visakhapatnam, Andhra Pradesh.
Two new units are planned at Ibrahimpatnam, Ranga Reddy district, Telangana and
Amravati, Maharashtra.
Bharat Dynamics Limited (BDL) is a prominent defense sector enterprise in India,

specializing in the design, development, production, and integration of advanced defense
systems and technologies. Crafting comprehensive mission, vision, and core values
statements is essential for BDL to articulate its purpose, long-term aspirations, and guiding
principles. Here's a detailed breakdown:
MISSION STATEMENT:
"Bharat Dynamics Limited is committed to safeguarding India's sovereignty and national
security by delivering innovative, reliable, and cutting-edge defense solutions. We strive to
excel in every facet of our operations, from research and development to manufacturing and
customer support, ensuring the readiness and capability of our armed forces to meet evolving
challenges."
VISION STATEMENT:
"Our vision is to emerge as a global leader in defense technology, renowned for our
excellence in engineering, commitment to quality, and unwavering dedication to national
defense. We aspire to continually push the boundaries of innovation, foster strategic
partnerships, and contribute significantly to India's defense self-reliance and global stature."
27
CORE VALUES:
1. Integrity: We uphold the highest standards of honesty, ethics, and transparency in all our
dealings, fostering trust among stakeholders and ensuring the integrity of our products and
services.
2. Excellence: We pursue excellence relentlessly, striving for continuous improvement,

innovation, and the highest quality in everything we do, to meet and exceed the expectations
of our customers and stakeholders.
3. Customer Focus: We are dedicated to understanding and fulfilling the needs of our
customers, both domestic and international, by delivering tailored solutions, responsive
support, and superior value, thereby fostering enduring partnerships.
4. Collaboration: We recognize the power of collaboration and teamwork, both internally and
externally. We foster an environment of mutual respect, open communication, and
knowledge-sharing to leverage collective expertise and achieve common goals.
5. Responsibility: We take responsibility for the impact of our actions on society, the
environment, and the nation's security. We are committed to sustainable practices, safety, and
security, while also contributing to the socio-economic development of the communities in
which we operate.
6. Innovation: We embrace a culture of innovation and agility, encouraging creativity,

experimentation, and forward thinking. We harness the latest technologies and insights to
develop pioneering solutions that address emerging threats and challenges.
7. Adaptability: We remain flexible and adaptable in the face of dynamic geopolitical,

technological, and market changes. We proactively anticipate shifts in requirements and
conditions, swiftly adjusting our strategies and operations to stay ahead of the curve.
HISTORY
India began to develop indigenous missiles through the Integrated Guided Missile
Development Programme (IGMDP), which gave BDL an opportunity to be closely involved
with the programme wherein it was identified as the Prime Production Agency. This opened
up a plethora of opportunities to assimilate advanced manufacturing and programme
28
management technologies and skills. Responding to the Concurrent Engineering Approaches
adopted by DRDO in IGMDP, BDL was seen as a reliable and trust worthy ally, and resulted
in the induction of India's first state-of- the-art Surface-to-Surface Missile Prithvi. BDL has
delivered Prithvi to the three services as per requirements. BDL has forayed into the field of
under water weapon systems and air-to-air missiles and associated equipment with
technology support from the DRDO and other players in this domain.
OPERATIONS
BDL has been consistently incurring profits and has been nominated as a Mini Ratna –
Category-I Company by the Government of India. Showing steady progress in its operations
over the years, BDL achieved a record sales turnover of ₹1,075 crore in 2012–13. BDL has
orders worth over ₹1,800 crore. Keeping pace with the modernisation of the Indian Armed
Forces, BDL is poised to enter new avenues of manufacturing covering a wide range of
weapon systems such as: Surface to Air Missiles, Air Defence Systems, Heavy Weight
Torpedoes, Air to Air Missiles, making it a defence equipment manufacturer. BDL has also
entered into the arena of refurbishment of old missiles.
PRODUCTS AND SERVICES

INDIGENOUS MISSILES
BDL is the nodal agency for the production of missiles developed by India. The first such
missile that entered production of dynamics with BDL was the Prithvi missile.
BDL manufactures a range of missiles for the Indian Armed Forces some prominent products
are listed below:
AGNI
In 1998, BDL produced Agni-I were inducted into the Indian Armed Forces. BDL also
manufactures other missiles and systems for the Indian Armed Forces
AKASH
Akash (Sanskrit: आकाश Ākāś "Sky") is a medium-range surface-to-air missile defence system
developed by the Defence Research and Development Organisation (DRDO), and supported
by Ordnance Factories Board and Bharat Electronics (BEL) in India. The missile system can
target aircraft up to 30 km away, at altitudes up to 18,000 m. A pre-fragmented warhead
could potentially give the missile the capability to destroy both aircraft and warheads from
ballistic missiles. It is in operational service with the Indian Army and the Indian Air Force.
29
ADVANCED LIGHT WEIGHT TORPEDO
It can be launched from a Ship, Helicopter, or Submarine and is available as both war
shot/exercise modes. Homing can be passive/active/mixed modes. It has multiple search
pattern capabilities.
COUNTER MEASURES DISPENSING SYSTEMS

Counter Measures Dispensing System (CMDS) is a chaff and flare dispensing system. CMDS
is an airborne defensive system providing self-protection to the aircraft by passive ECM
against radar-guided and IR-seeking, air and ground-launched missiles. Protection to the
aircraft is achieved by misguiding the missiles by dispensing chaff, and/or flare payloads.
MILAN 2T
This is a second-generation, semi-automatic, tube-launched, optically tracked missile with a
tandem warhead.
KONKURS – M
This is a second-generation, semi-automatic, antitank, tube-launched, optically tracked, wire-
guided and aero-dynamically controlled missile. It is designed to destroy moving and
stationary armoured targets with Explosives Reactive Armour at a range of 75 to 4000
metres.
Salient Features: Can be launched either from BMP-2 or from the ground launcher. Tandem
Warhead Simple in operation and immune to Electronic Countermeasures High hit and kill
probability Portable and Para droppable. Hermetically sealed ensuring long storage life.
INVAR
Invar is a weapon fired from the Gun barrel of T-90 Tank. The missile has a semi-automatic
control system, tele-orienting in the laser beam. This is a high-velocity jamming immune
missile with a tandem warhead designed to defeat explosive reactive armour. Intended to
destroy stationary and moving targets with speeds up to 70 km/h.
BUSINESS ACTIVITIES:
Bharat Dynamics Limited (BDL) is a prominent defense company in India engaged in the
manufacture of advanced defense equipment and systems. Established in 1970 under the
30
Ministry of Defence, Government of India, BDL plays a crucial role in strengthening India's
defense capabilities through indigenous production and technological advancement. Here's a
detailed overview of the business activities of Bharat Dynamics Limited:
1. Missile Systems Production: One of the primary business activities of BDL is the
production of missile systems. BDL manufactures a wide range of missile systems including
surface-to-air missiles (SAMs), surface-to-surface missiles (SSMs), and anti-tank guided
missiles (ATGMs). These missile systems are crucial for the defense of the nation and are
deployed across various platforms including land, sea, and air.
2. Research and Development (R&D): BDL invests significantly in research and development
to enhance its technological capabilities and develop cutting-edge defense systems. The
company collaborates with various research institutions, defense organizations, and
international partners to leverage expertise and innovation in missile technology. Continuous
R&D efforts enable BDL to stay ahead in the rapidly evolving defense landscape and meet
the evolving requirements of the armed forces.
3. Collaborations and Partnerships: BDL actively seeks collaborations and partnerships with
both domestic and international entities to strengthen its product portfolio and expand its
market presence. Collaborative ventures with other defense companies and technology firms
enable BDL to access advanced technologies, specialized expertise, and new markets. These
partnerships also facilitate technology transfer, which is essential for indigenization and self-
reliance in defense production.
4. Export of Defense Equipment: BDL has been actively involved in exporting defense
equipment to friendly nations. The company's high-quality missile systems have garnered
interest from various countries seeking to enhance their defense capabilities. BDL's export
activities not only contribute to revenue generation but also bolster India's strategic
relationships with partner countries.
5. Modernization and Upgradation: As part of its business activities, BDL focuses on the
modernization and upgradation of existing defense systems to enhance their performance,
reliability, and lifespan. The company works closely with the armed forces to understand
their requirements and provide customized solutions tailored to their needs. Upgradation
projects also involve incorporating the latest technological advancements to ensure that the
defense systems remain effective in modern warfare scenarios.
6. Quality Assurance and Compliance: BDL places utmost importance on quality assurance
and compliance with international standards in its manufacturing processes. The company
31
adheres to stringent quality control measures at every stage of production to ensure that its
defense systems meet the highest standards of performance, reliability, and safety.
Compliance with regulatory requirements is integral to BDL's business operations, especially
considering the sensitive nature of defense equipment.
7. Diversification and Expansion: In addition to its core business of missile systems

production, BDL explores opportunities for diversification and expansion into related areas
such as electronic warfare systems, unmanned aerial vehicles (UAVs), and defense
electronics. Diversification efforts enable BDL to leverage its technical expertise and
manufacturing capabilities in new domains while addressing emerging defense requirements.
MILESTONES
• 1968: Establishment of Bharat Dynamics Limited (BDL) as a public sector undertaking
under the Ministry of Defence, Government of India.
• 1970: BDL commences production of Anti-Tank Guided Missiles (ATGMs) and Surface-
to-Air Missiles (SAMs), contributing to India's defense capabilities.
• 1974: Introduction of the Milan Anti-Tank Guided Missile System, marking a significant
advancement in indigenous defense technology.
• 1980: BDL achieves self-reliance in the production of various missile systems, reducing
dependency on imports and bolstering national security.
• 1990: Successful development and production of the Akash Surface-to-Air Missile
System, enhancing India's air defense capabilities.
• 2000: BDL expands its portfolio to include underwater weapons systems, such as
torpedoes and underwater mines, strengthening India's maritime defense capabilities.
• 2007: Collaboration with international partners for technology transfer and joint
development programs, fostering global partnerships in defense technology.
• 2010: Integration of advanced guidance and propulsion systems into missile platforms,
enhancing accuracy and range capabilities of BDL's missile systems.
• 2015: Introduction of the Nag Anti-Tank Guided Missile, featuring fire-and-forget
capabilities and all-weather operability, further augmenting India's ground combat
capabilities.
• 2018: BDL achieves ISO 9001 certification for quality management systems, ensuring
adherence to international quality standards in its production processes.
• 2020: Expansion of BDL's manufacturing facilities and research infrastructure to support
the development of next-generation missile technologies.
32
• 2023: Successful indigenous development of long-range ballistic missile systems,
establishing BDL as a key player in India's strategic deterrence capabilities.
AWARDS AND ACCOLADES

2015:
- Raksha Mantri's Award for Excellence: BDL received this prestigious award for its
outstanding performance and contribution to the defense sector.
2017:
- Best Performing Defence Public Sector Undertaking (DPSU): BDL was recognized as the
best-performing DPSU for its exemplary work in the defense industry.
2018:
- Mini Ratna Category-I Status: BDL was granted Mini Ratna Category-I status by the
Government of India, acknowledging its consistent growth and performance.
2020:
- Defence Technology Absorption Award: BDL received this award for its significant efforts
in absorbing and mastering defense technologies.
2021:
- Top Performer in Indigenisation: BDL was acknowledged as a top performer in
indigenization efforts, contributing to the 'Make in India' initiative in the defense sector.
SWOT ANALYSIS
Strengths:
1. Strong Government Support: Bharat Dynamics Limited (BDL) is a government-owned
enterprise in India, which gives it a strong backing from the government. This support can be
instrumental in securing contracts and navigating regulatory environments.
2. Technological Capabilities: BDL has developed indigenous missile technologies,
demonstrating its expertise in defense systems. This technological prowess can give it a
competitive edge in the market and attract collaborations or partnerships.
3. Diverse Product Portfolio: The company offers a wide range of defense products including
surface-to-air missiles, anti-tank guided missiles, underwater weapons, and more. This
diversity can help in mitigating risks associated with dependence on a single product.
33
4. Established Infrastructure: BDL possesses well-established manufacturing facilities and
infrastructure, which can contribute to efficient production processes and timely delivery of
orders.
Weaknesses:
1. Dependence on Government Orders: BDL heavily relies on orders from the Indian
government for its revenue. This dependence can make the company vulnerable to
fluctuations in government defense budgets or changes in procurement policies.
2. Limited Market Diversification: While BDL has a diverse product portfolio, its market is
primarily domestic. Limited international exposure may hinder its growth potential and
expose it to risks associated with geopolitical tensions or regulatory barriers.
3. R&D Investment: The level of investment in research and development (R&D) compared
to global competitors might be lower, potentially limiting innovation and new product
development capabilities.
Opportunities:
1. Export Market Expansion: BDL can explore opportunities to expand its presence in
international markets by offering its defense products to other countries. Emerging economies
with growing defense budgets could be particularly lucrative markets.
2. Joint Ventures and Collaborations: Forming strategic partnerships or joint ventures with
international defense companies can facilitate technology transfer, access to new markets,
and diversification of product offerings.
3. Focus on Technological Advancements: Investing in research and development to enhance
existing products or develop new technologies can help BDL stay competitive in the rapidly
evolving defense industry.
Threats:
1. Competition: BDL faces competition from both domestic and international defense
manufacturers. Intense competition could lead to pricing pressures and loss of market share.
2. Geopolitical Uncertainties: Geopolitical tensions and conflicts can impact defense budgets
and procurement decisions, affecting BDL's order book and revenue streams.
3. Technological Changes: Rapid advancements in defense technology could render existing
products obsolete or less competitive. Failure to adapt to technological changes could pose a
threat to BDL's market position.
4. Regulatory Environment: Changes in government regulations, export controls, or trade
policies can significantly impact BDL's operations and market access.
34
COMPETITORS
1. Larsen & Toubro (L&T) - Engaged in defense manufacturing and technology.

2. Hindustan Aeronautics Limited (HAL) - Major aerospace and defense company in
India.
3. Bharat Electronics Limited (BEL) - Another prominent defense electronics company
in India.
4. Tata Advanced Systems Limited (TASL) - Part of Tata Group, involved in defense
and aerospace sectors.
5. Reliance Defence and Engineering Limited (RDEL) - Part of Reliance Group,
focusing on defense manufacturing and shipbuilding.
6. Ashok Leyland Defence Systems - Subsidiary of Ashok Leyland, involved in defense
vehicles and systems.
7. Mahindra Defence Systems - A division of Mahindra Group, active in defense
equipment manufacturing.
8. Mazagon Dock Shipbuilders Limited (MDL) - Engaged in shipbuilding for defense
and commercial sectors.
9. Garden Reach Shipbuilders & Engineers (GRSE) - Another major shipbuilding
company catering to defense requirements.
10. Ordnance Factory Board (OFB) - Government-owned defense production
organization, manufacturing various defense equipment and ammunition.
35
CHAPTER IV
DATA ANALYSIS AND

INTERPRETATION
36
STUDY ON BUDGET PREPARATION AT BHARAT DYNAMICS LIMITED
The study involves various aspects of budgetary done at BHARAT DYNAMICS

LIMITED which consists of Revenue Expenditure for the past seven years and to identify the
process involved in control of expenditure to maximize the efficiency of Revenue
Expenditure. The Revenue Expenditure on BHARAT DYNAMICS LIMITED for the past
seven years with break-up under expenditure are tabulated below form Table No.1 to Table
No.7
Table No. 1
SHOWING REVENUE EXPENDITURE BUDGET 2022-2023
(Rupees in Lakhs)
Budget
Variation Variation
S.No. Item Estimates Actual
(Amount) (Percentage)
Salaries and
Other
1. 7150 7032.21 117.79 1.64
Establishment
Charges
Travel
2. Expenses(Foreign 70 74.40 -4.4 -6.28
Trips)
Supplies and
3. 26872 37477.15 -10605.15
Materials -39.46
4. Minor works 2600 2191.55 408.45 15.70
Interest and
5. 2000 2000 0 0
Depreciation
6. Motor Vehicle 150 66.17 83.83 55.88
7. Office Expenses 35 36.53 -1.53 -4.37

Administrative
8. 35 36.53 -1.53 -4.37
Expenses
Rent, Rates
9. 35 28.60 6.4 18.28
And Taxes
10. Others 39 33.31 5.69 14.58
Totals 39,489 49,495.88 -10,006.88 -25.34
37
Figure No. 1
REVENUE EXPENDITURE BUDGET FOR YEAR 2022-2023
50000 Salaries and Other

Establishment Charges
45000 Travel Expenses(Foreign Trips)
40000 Supplies and Materials
35000 Minor works
30000 Interest and Depreciation

25000 Motor Vehicle
20000
Administrative Expenses
15000
Rent, Rates And Taxes
10000
Others
5000
Totals
0
Budget Actual
Estimates
Figure No. 2
90
80
70
60
East
50
40 West
30
North
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
INTERPRETATION
Reasons for Variation between Budget Estimate & Actual Expenditure (2022-2023)
• Saving under the Head Salaries due to shifting of premises to new cities head.
• Increase under supplies and materials due to upwards revision of manuals.
• Saving under the head of motor vehicles due to postponement of replacement of same
vehicles for the next year.
38
Table No. 2

(Rupees in Lakhs)
Budget
Variation Variation
Salaries and
Other
1. 6650 6743.42 -93.42 -1.40
Establishment
Charges
Travel
2. Expenses(Foreign 78 75.83 2.17 2.78
Trips)
Supplies and
3. 27052 30947 -3895 -14.39
Materials
4. Minor works 2102 2373.98 -271.98 -12.93
Interest and
5. 7300 5500 1800 24.65
Depreciation
6. Motor Vehicle 103 52.47 50.53 49.05
7. Office Expenses 475 503.69 -28.69 -6.04
Administrative
8. 35 36.53 -1.53 -4.37
Expenses
Rent, Rates
9. 35 38.5 -3.5 -4.37
And Taxes
10. Others 1507 1544..82 -37.82 -2.50
Totals
45,337 47,816.24 -2,479.24 -5.46
39
FIGURE NO. 3

Travel Expenses(Foreign Trips)
45000
Supplies and Materials
40000
Minor works
35000
Interest and Depreciation
30000
Motor Vehicle
25000
Office Expenses
20000
15000
10000
Others
5000
Totals
0
Budget Actual
Estimates
INTERPRETATION
Reasons for Variations between Budget Estimate & Actual Expenditure (2021-2022)
• Increase in salaries on Account of liberated LTC provision Increase in Office

Expenses on Account of increases Transport and issue of Uniform for Ministerial
Staff
• Increase in Rent, Rates & Taxes as per demand for property Tax
40
Table No. 3
(Rupees in Lakhs)
Budget
Variation Variation
Salaries and
Other
1. Establishment 6100 6216.18 -116.18 -1.90
Charges
Travel
Expenses(Foreign
2. 83 34.1 48.90 58.91
Trips)
Supplies and
3.
Materials 28349 25497.79 2851.21 10.05
4.
Minor works 2040 2102.44 -62.44 -3.06
5. Interest and
9850 8896 954 9.68
Depreciation
6.
Motor Vehicle 125 53.92 71.08 58.86
7.
Office Expenses 506 445.90 60.1 11.87
Administrative
8.
Expenses 35 35.31 -0.31 -0.88
Rent, Rates
9.
And Taxes 26 26.20 -0.2 -0.76
10. Others 1286 1335.27 -49.27

-3.83
Totals
48,400 44,643.11 3,756.89 7.76
41
Figure No. 4

45000 Travel Expenses(Foreign
Trips)
40000 Supplies and Materials
35000 Minor works
30000 Interest and Depreciation
25000 Motor Vehicle
20000 Office Expenses
15000 Administrative Expenses

10000 Rent, Rates And Taxes
5000
Others
0
Totals
Budget Actual
Estimates
INTERPRETATION
• Increase in Salaries due to merger of 50% of Dearness allowance on 01-04-2021.
• Saving under the head traveling Expenses, Office expenses due to Economy measure.
• Decrease is mainly due to MDU supply and other materials based on production
schedule.
• Savings under Motor vehicles due to non-receipt of sanctions.
42
Table No. 4
(Rupees in Lakhs)
Budget
Variation Variation
Salaries and
Other
1. Establishment 6231 5682.13 548.87 8.8
Charges
Travel
Expenses(Foreign
2. 116 73.53 42.47 36.61
Trips)
Supplies and
3.
Materials 22078 25452.56 -3374.56 -15.28
2288
4. Minor works 1560.31 727.69 31.80
Interest and
5.
Depreciation 7500 9850 -2350 -31.33
62.59
6. Motor Vehicle 125 46.76 78.24
7.
Expenses 506 424.35 81.65 16.13
Administrative
8. Expenses 35 33.58 1.42 4.05
Rent, Rates 18
9. 26.80 -8.8 -48.88
And Taxes
10.
Others 1289 1303.07 -14.07 -1.09
Totals
40,186 44,453.09 -4267.09 -10.61
43
Figure No. 5

40000 Travel Expenses(Foreign Trips)

35000
Minor works
30000
25000 Motor Vehicle
20000 Expenses

10000
Others
5000
Totals
0
Budget Actual
Estimates
INTERPRETATION
• Saving under the head Salaries due to shifting due to shifting of provision to new
cities head.
• Saving under the Head Traveling Expenses, Office Expenses, foreign Expenses, due
to economy.
• Increase under supplies and materials due to upward revision of manuals
• Savings under the head of motor vehicles due to postponement of replacement of
same vehicles for the next year.
44
Table No. 5
Budget
Variation Variation
Salaries and
Other
1. Establishment 6241 6686.20 -445.2 -7.13
Charges
Travel
Expenses(Foreign
2. 120 72.88 47.12 39.26
Trips)
Supplies and
3.
Materials 21162 20844.36 317.64 1.50
Minor works 2234 1889.79 15.40

4. 344.21
Interest and - -
5. 28200 28200
Depreciation
83.04
6. Motor Vehicle 135 51.96 61.50
5.80
7. Expenses 500 470.98 29.02
Administrative
8.
Expenses 30 29.69 0.31 1.03
Rent, Rates
-8.57
9. And Taxes 17 25.57 -50.4
Others
10. 732 652.34 79.66 10.88
0.75
Totals 59,371 58,923.77 447.23
45
Figure No. 6

Travel Expenses(Foreign
Trips)
50000
Minor works
40000
30000 Motor Vehicle
Expenses

10000
Others
Totals
0
Budget Actual
Estimates
INTERPRETATION
• Excess under salaries due to payment of updating allowance.

• Saving under the head minor works due to less rates claimed by M/s. APGPCL.
• Saving under supplies and materials for postponement of procurement of certain
materials.
46
Table No. 6
(Rupees in Lakhs)
Budget
Variation Variation
Salaries and
Other
1. Establishment 6274 6087.90 186.10 2.96
Charges
Travel
Expenses(Foreign
2. Trips) 100 61.26 38.74 38.74
Supplies and
3. Materials 19515 16744.60 2770.4 14.19
4. Minor works 2481 2057.72 423.28 17.06
Interest and 16000 16000 - -

5. Depreciation
6. Motor Vehicle 90 109.20 -19.2 -21.33
7. Expenses 427
441.34 -14.34 -3.35
8. Administrative 45 21.83 48.51

Expenses 23.17
9. Rent, Rates 30
And Taxes 12.57 17.43 58.10
10.
Others 1148 956.86 191.14 16.64
Totals 46,110 42,494.62 3615.38 7.84
47
Figure No. 7
Salaries and Other

50000 Trips)
40000
Minor works
30000
20000 Motor Vehicle
10000 Expenses
0
Budget Estimates Rent, Rates And Taxes
Others
Totals
INTERPRETATION
• Non-revisions of the rate of prime raw materials which was anticipated and also short
supply of the same by the supplier.
• Partial withdrawal of increased power tariff by the State Government Non-filling of
vacant and new posts as per policy of the Government
48
Table No. 7

(Rupees in Lakhs)
Budget
Variation Variation
Salaries and
Other Establish –
1. ment Charges 6231 5918.98 312.02 5
Travel
Expenses(Foreign
2. Trips) 100.1 48.45 41.65 41.55
Supplies and
3. Materials 19421 18558.61 862.39 4.44
4. Minor works 1984.1 1922.61 61.49 3.09
Interest and
5. Depreciation 16 16 - -
6. Motor Vehicle 120 76.64 43.36 36.13
7. Expenses 415 403.04 11.96 2.88
Administrative
8. 45.8 22.15 23.65 51.64
Expenses
Rent, Rates
9. And Taxes 25 28.03 -3.03 -12.12
854.55 156.45 15.47

10. Others 1011
Totals 45,353 43,843.06 1509.94 3.32
49
Figure No. 8
REVENUE EXPENDITURE BUDGET FOR YEAR 2016 - 2017

45000 Trips)
40000
Minor works
35000
30000
Motor Vehicle
25000
Expenses
20000
15000
10000
Others
5000
Totals
0
Budget Actual
Estimates
INTERPRETATION
Reasons for Variations between Budget estimate & Actual Expenditure (2016 – 2017)
• Increase in the cost of raw materials/prime consumables.

• Download revision in the power-tariff by state.
• Saving on account of deferment of Leave Concession for employees by the
Government.
Table No. 8
SALARIES
2017 - 2018 - 2019 - 2020 - 2021 - 2022 -
Year 2016 – 2017
2018 2019 2020 2021 2022 2023
Variation
312.02 186.1 -445.2 548.87 116.18 -93.42 111.79
amount
Variation
5 2.96 -7.13 8.8 -1.9 -1.4 1.64
Percentage
50
INTERPRETATION:
The variations that need to be commented are those falling in a range above +5% or
below -5%The years in which such variations occurred are 2016 – 2017 where the variation
is +5% on account of liberated LTC provisions and it has increased to 8.8% in 2019-2020.
Table No. 9
TRAVEL EXPENSES
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 41.65 38.71 17.12 12.17 18.9 2.17 1.1
Variation
41.6 38.74 39.26 36.61 58.91 2.78 -6.28
Percentage
70
60
50
40
Variation amount
30
Variation Percentage
20
10
-10
Table No. 9
INTERPRETATION
The travel expenses had over short the budget consistently five out of seven years
under study. The range was 36 percent to 59 percent which indicated lack of control and
absence of economy measures. The company realized these facts in 2020-2021 and put in
place a package of economy measures which raised the bar for out of budget expenditure.
The measures have worked well and as a result the variance of travel expenses over and
above budget was controlled almost in 2019-2020and more than expected 2022-2023. The
control was so effective that a negative variance have set in year 2022-2023 of the order of -
6.28.
51
Table No. 10
SUPPLIES AND MATERIALS
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 82.39 2770.4 317.64 -3374.6 2851.21 1853 605.2
Variation
4.44 14.19 1.5 -15.28 10.05 2863 4439.46
Percentage
5000
4000
3000
2000
1000 Variation amount
0 Variation Percentage
-1000
-2000
-3000
-4000
Figure No. 10
INTERPRETATION:
It signifies that the trend of increase in the negative variation in last 2 years is on account
of postponement of procurement of materials in the year 2019-2020, 2020- 2021 and 2021-
2022 which is not a healthy sign. Under procurements of materials points out to delay in
implementation of projects and impartial negative effects on profitability which needs to be
probed into in detail.
52
Table No. 11
MINOR WORKS
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 61.49 423.28 344.21 727.69 -62.44 -271.98 408.45
Variation
3.09 17.06 15.4 31.8 -3.06 -12.93 15.7
Percentage
800
700
600
500
400
300 Variation amount

100
0
-100
-200
-300
Figure No. 11
INTERPRETATION
The acceptable range is + (or) - 5%. In general the variation was with in the rage
only in 2 out of 7 years. In 4 out of 7 years it was positive variation of 15% to 31% which is
indicative of the fact that the budgetary process was not being diligently adhered to in the
case of budgets for minor works.
53
Table No. 12
INTEREST AND DEPRECIATION
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 0 0 0 -2350 954 1800 0
Variation
0 0 0 -31.33 9.68 24.65 0
Percentage
2000
1500
1000
500
-500 Variation amount
-1000
-1500
-2000
-2500
Figure No. 12
INTERPRETATION
Acceptable range is + (or) - 10%. The variation beyond the above range is observed
in case of 2019-2020 and 2021-2022. The reason was on account of general and rapid
reduction in rates of interest charged by banks.
54
Table No. 13
MOTOR VEHICLE
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 43.36 -19.2 83.04 78.24 71.08 50.53 83.83
Variation
36.13 -21.33 61.5 62.59 56.86 49.05 55.88
Percentage
100
80
60
40 Variation amount
20
-20
-40
Figure No. 13
INTERPRETATION
The acceptable range is + (or) – 25%., As the age of vehicles stock is more,
allowing for increased expenditure in repairs and maintenance on account of age of vehicle
stock it was found that the expenditure under the head was “uncontrollable”. With the range
of over expenditure being from 36% to 63%.
55
Table No. 14
OFFICE EXPENSES
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 11.96 -14.34 29.02 81.65 60.1 -28.69 -1.53
Variation
2.88 -3.35 5.8 16.13 11.87 -6.04 -4.37
Percentage
120
100
80
60
20 Variation amount
-20
-40
-60
Table No. 14
INTERPRETATION:
The acceptable range is + (or)-5%. The variation above the range was found to be
sizable in the case of 2019-2020 and 2020-2021 due to issue of uniform to ministerial staff
and increase transport.
56
Table No. 15
ADMINISTRATIVE EXPENSES
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 23.65 21.83 0.31 1.42 -0.31 -1.53 -1.53
Variation
51.64 48.51 1.03 4.05 -0.88 -4.37 -4.3
Percentage
60
50
40
30 Variation amount
20
10
-10
Figure No. 15
INTERPRETATION
The acceptable range is + (or)-5%. It was observed that the budget for
administrative expenses was periodically increased to accommodate the positive variation in
previous year during period 2017-2018. Thus the budget peaked in year 2017-2018, while the
variation is high in 2016-2017 and 2017-2018.
57
Table No. 16
RENT, RATES AND TAXES
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount -3.03 17.43 -8.57 -8.8 -0.2 -3.5 6.4
Variation
-12.12 58.1 -50.41 -48.88 -0.76 -10 18.28
Percentage
100
80
60
40
0 Variation amount
-20
-40
-60
-80
Table No. 16
INTERPRETATION
The acceptable range is + (or) - 20%. The abnormal years were observed to be 2017-
2018 which a positive variation of 58% in 2017-2018 to negative variation of around 50% in
2018-2019 and 2019-2020. This is an account of changes in government / taxes / municipal
polices and changes in valuations during the relevant years.
58
Table No. 17
OTHERS
2016 – 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -

Year
2017 2018 2019 2020 2021 2022 2023
Variation amount 156.45 191.14 79.66 -14.07 -49.27 -37.82 5.69
Variation
15.47 16.64 10.88 -1.09 -3.83 -2.5 14.58
Percentage
200
150
100
Variation amount
50
-50
Table No. 17
INTERPRETATION
The acceptable range is + (or) - 20% as the item indicates miscellaneous of expenditure
the variance is found to be with in the acceptable range.
59
CHAPTER V
FINDINGS, SUGGESTIONS &

CONCLUSIONS
60
FINDINGS
➢ Budget is referred as a plan relating to period of the expressed in monetary and in

quantitative terms
➢ Budgeting takes up a lot of management.
➢ Budgets should not be administrated rigidly changing conditions usually call for
changes plan.
➢ In zero budgeting, budget request for opportunity are accepted as the basis of
cost/benefit approach which ensure value of money.
➢ Ranking of decision packages a cost benefit analysis.
➢ Saving under the Head Salaries due to shifting of premises to new cities head.
➢ Increase under supplies and materials due to upwards revision of manuals.
➢ Increase in salaries on Account of liberated LTC provision Increase in Office
Expenses on Account of increases Transport and issue of Uniform for Ministerial
Staff
➢ Increase in Rent, Rates & Taxes as per demand for property Tax
➢ Saving under the head traveling Expenses, Office expenses due to Economy measure.
➢ Savings under Motor vehicles due to non-receipt of sanctions.
➢ Excess under salaries due to payment of updating allowance.
➢ Saving under supplies and materials for postponement of procurement of certain
materials.
➢ Non-revisions of the rate of prime raw materials which was anticipated and also short
supply of the same by the supplier.
61
SUGGESTIONS
➢ There is an urgent need to formulate and implement cost reduction program.
➢ There is under procurement of materials with consequences for profitability, which

needs to be proved into in detail.
➢ Budgetary process has been effective in case of travel expenses and in effective in case
of motor vehicle repairs and maintenance and minor works.
➢ There are fluctuations in salaries.
➢ The company objectives of the organization and how they can be achieved through
budgetary control
➢ Time tables for all stages of budgeting follow
➢ Reports, statements, forms and other record to be maintained
➢ Continuous comparison of actual performance with budgeted performance.
62
CONCLUSIONS
➢ This can be concluded that the budget and budgetary control process and how each
manager can draw out of the budgetary planning and control system concrete
objective to improve the operating performance and profitability of the business.
➢ BHARAT DYNAMICS LIMITED. Has been achieving highest production year over
the year by rescuing the corresponding expenditure and attained not only self-
sufficiency but also been supportive to the nuclear power Plants spread all over India.
➢ With the help of proper budgetary planning and control system, BHARAT
DYNAMICS LIMITED has been able to improve operating performance and
profitability of the Organization.
➢ The financial system in BHARAT DYNAMICS LIMITED has been very quick and
well planned one, which could be implanted in other such government organization.
➢ The organization have followed effective budget system and control for maintaining
the expenditure within the appeared Budget and it also kept the profile high and
achieving the targeted production within the appeared Budget and it also kept the
profile high and achieving the targeted production by minimum expenditure which
expenditure which is evident form the last seven years Revenue Expenditure Budget.
➢ Form the variations between Budget Estimates and Actual Expenditure of last five
years it may be seen that the percentage of variation is becoming marginal from year
to year which reflects improved system of Budgeting as well as control of
Expenditure.
63
BIBLIOGRAPHY
64
BIBLIOGRAPHY
BOOKS
• Brownell, P., The Role of Accounting Data in performance Evaluation, Budgetary

Participation and Organizational Effectiveness, Journal of Accounting Research , 20,
1982, pp. 12-27
• Bruns, W.J., and J.H.Waterhouse, Budgetary Control and Organisational Structure,
Journal of Accounting Research, 13, 1975, pp. 177-203.
• CamillusJ.C, The Review and Follow-up Process: key to Effective Budgetary Control,
Vikalpa, 1(3), July 1976, pp. 1-6.
• Flamboltz, R.M., Accounting, Budgeting and Control Systems in their Organisational
Context, Accounting, Organisations and Society, 8, 1983, pp.153-169.
• Mary, M.K. Fleming, A Budget Model for a small Manufacturing Firm, Industrial
Management, 37(2), March/April 1995, pp. 1-5.
• Otley, T.D., Budget use and Managerial Performance, Journal of Accounting Research,
1(6), 1978, pp. 122-149.
• Sethi, K.L., Budgetary Control and Standard Costing in Textile Industry, Cooperative
Accountant, 3968, pp.622-629.
JOURNALS AND MAGAZINES

• TIMES OF INDIA
• BUSINESS STANDARD
• ASSENT
• ECONOMIC TIMES
• MONTHLY REVIEW OF THE COMPANY
WEBSITES
• https://shodhganga.inflibnet.ac.in/bitstream/10603/16572/16/16_bibliography.pdf
• http://article.sciencepublishinggroup.com/html/10.11648.j.jfa.20190305.17.html
• https://courses.lumenlearning.com/sac-managacct/chapter/introduction-to-budgeting-and-
budgeting-processes/
• http://makir.mak.ac.ug/bitstream/handle/10570/6829/Ayorekire-cobams-
mba.pdf?sequence=3&isAllowed=y
• https://mpra.ub.uni-muenchen.de/61452/1/MPRA_paper_61452.pdf
• http://www1.worldbank.org/publicsector/LearningProgram/PEAM/DorotinskyBackCh4.pdf
• https://www.infoentrepreneurs.org/en/guides/budgeting-and-business-planning/
65

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A

BHARAT DYNAMICS LIMITED

MOHD ABDUL DANISH KHAN

PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE DEGREE OF

ST. PAUL’S DEGREE & PG COLLEGE

This is to certify that MOHD ABDUL DANISH KHAN is a bonafide student of

This is to certify that MOHD ABDUL DANISH KHAN of B.COM, III

DATE: SIGNATURE OF THE GUIDE

This is to certify that the project is submitted by MOHD ABDUL

External Examiner Internal Examiner

I MOHD ABDUL DANISH KHAN, student of BACHELOR OF

Date: Signature of student

Name: MOHD ABDUL DANISH KHAN

As a student of St. Paul’s Degree and P.G College affiliated to Osmania

I also express my sincere thankfulness to Sri. SIRAJUDDIN, Hon. Secretary &

MOHD ABDUL DANISH KHAN

CHAPTER NO CONTENTS PAGE NUMBER

II REVIEW OF LITERATURE 07-26

III COMPANY PROFILE 26-35

IV DATA ANALYSIS AND INTERPRETATION 36-59

V FINDINGS, SUGGESTIONS & CONCLUSION 60-63

ADVANTAGES OF BUDGETARY CONTROL SYSTEM

iii. Budgetary system helps managers to learn from past experience.

HOW BUDGETARY SYSTEM CAN OPERATE EFFECTIVELY TO

OBJECTIVES OF THE STUDY

1. To study the various aspects of budget and budgetary control.

2. To study the performance of the organization in terms of profitability.

3. To study revenue receipt and revenue expenditure of the organization

4. To study the actual performance with budget performance.

5. To facilitate centralized control with delegated authority and responsibility

SCOPE OF THE STUDY

Tools and techniques:

The tools used for this study are:

James D.Savage, (2015) “Budgeting is a process of governments allocate public resources to

THEORETICAL FRAMEWORK - CONCEPT OF BUDGET

The Charted institute of Management Accountants, (CIMA) defined budget as

According to Gordon shilling law, “A business budget is pre-determined detailed plan

The Essentials of a Budget are

• Introduction and brief explanation of the objectives, benefits and principles of

• Length of budget periods and control periods should be clearly states.

• Procedures to be followed throughout the system should be explained in clear terms.

• Outline of main budgets and their accounting relationships.

EXPLANATION OF KEY BUDGETS

• As everything is in writing. Ambiguity is avoided and reliance on memory is

The prevalence of budgets indicates that the advantages of budgeting systems

1) CLASSIFICATION ACCORDING TO TIME

• Long – Term Budgets

2) CLASSIFICATION ON THE BASIS OF FUNCTIONS

These budgets relate to different activities or operations of a firm. The number of

The Operating Budget for a firm may be constructed in terms of program or

When the budget of a firm is constructed in terms of responsibility areas it is

3) CLASSIFICATION ON THE BASIS OF FLEXIBILITY

A flexible budget consists of series of Budgets for different level of activity. It

A flexible Budget is defined as Budget which by recognizing the difference between

A Sales Budget is an estimate of expected sales during a Budget period. A sales

1) PRODUCTION COST BUDGET

7) PLANT UTILIZATION BUDGET

8) MANUFACTURING OVERHEADS BUDGET

This Budget gives an estimate of the works overhead expenses to be incurred in a

9) ADMINISTRATION COST BUDGET

2) CAPITAL EXPENDITURE BUDGET

The capital expenditure Budget is an important Budget providing for acquisition of