“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CONTENTS SL NO
PARTICULAR
PAGE NO
1
Executive Summary
1
2
Objective Of the Study
2
3
Introduction
3
4
Industrial Profile
4
5
Company Profile
6
6
Organization Profile
7
7
Introduction to Budgetary Control
38-50
8
Data Analysis and Interpretation
51-61
9
Findings
62
10
Suggestion
63
11
Conclusion
64
12
Bibliography
65
13
Annexure
66
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
EXECUTIVE SUMMARY
RANNA SUGARS. Is the co-operative company. The project has been undertaken on the STUDY ON BUDGET BUDGETARY ARY CONTROL CONTROL at RANNA RANNA SUGARS SUGARS” ” As budgetary topic “A STUDY budgetary
control helps to understand goal of the concern whether it may be b e short or long term goal. As the budget is playing an important role in any organization which helps to compare the actual performance with the budgeted performance .The concept of the Budget and way of adapta adaptabil bility ity,, which which create createss new challen challenges ges to indust industria riall sector sector for surviv surviving ing in this this curren currentt competitive edge. It indicates the progress of the concern by way of its sales or profit, market shares, process of the concern etc.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
OBJECTIVES OF THE STUDY: 1) To study the the existing existing budgetary budgetary controls controls method method & practice practicess at Ranna Sugars Sugars .
2) To compare compare the budgeted budgeted figures with with actual figures figures and Comparis Comparison on of financial financial statements for different financial years.
3) To find out any loophol loopholes es in the the budgetary budgetary control control system. system.
4) To Forecast Forecast the future future and plan to avoid losses losses but more more positive positively ly to maximize maximize the profits
METHODOLOGY:
PRIMARY SOURCE: The information of the budgetary control where obtained from.
Departmental Departmental heads.
Discussion with manager of costing.
Budgetary control statement.
SECONDARY SOURCE This type means secondary data’s are collected from
Office records.
Files & manual.
Annual Reports.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INTRODUCTION: Budgetary control is the important aspect for industry development because budgets provide yard stick against which the actual performance is measured. It always helps to the top management to take the appropriate decision to motivate and directing their personnel towards well set plans and policies of the company. By considering the advantage of the budgetary control the Ranna Sugars also adapted this system. In Ranna Sugars they were maintaining the monthly budget with the help of daily reports. The daily reports must contain the item like production efficiency, sugar cane utilization, man power requirement, consumption of electricity, wages etc. 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. By this statement or submitted report, they will take correct decision about the organizational activities. A study has been conducted on the “BUDGETARY CONTROL” which is most probably adopted in the Ranna Sugars organization. Budgetary control i.e. a most powerful tool to the management for performing its function i.e. formulating plans, coordinating activities and controlling operations etc, effectively as well as effectively. Now a day, the number of companies are compete with each other for the survival in the present market. Whether it may be other sugars industries .but no one company can comete without proper planning. So the Cost-Budgetary control may help them to make proper decision in the number of various fields. Budgetary control is applied to a system of management & accounting control by which all operations & output are forecasted as for ahead as possible. And actual results are known that are compared without budget estimates. 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. A more accurate budget can be developed for those activates where direct relationship exists between inputs & outputs. These input, output are base for developing budgets & exercising control.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INDUSTRIAL PROFILE Indian sugar industry India is the largest consumer & second largest producer of sugar in the world. The Indian sugar industry second large agro industry Located in the rural India. The Indian sugar has a turnover of rs.500 billion per annum & it contributes almost rs.22.5 billion to the central & state exchequer as tax, cess & excise duty every year. Indian sugar industry has been a focal point for a socio-economic development in the rural areas. About 50 million sugarcane farmers & a large number of agricultural labors are involved in sugarcane cultivation & ancillary activities, constituting 7.5 % of the rural population. Besides, the industry provides employment to about 2 million skilled/semi-skilled workers & 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 &portable uses,& can be used to manufacture ethanol, an ecology friendly &renewable fuel for blending with petrol. The sugar industry in the country uses only sugarcane as input; hence Sugar Company’s have been established in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, and Tamil Nadu & Andhra Pradesh. In the year 2005-06 these six states contributed more than 85 % of total sugar production in the country; Uttar Pradesh, Maharashtra & Karnataka together contribute more than
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65 % of total production
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Product Profile : The main & direct product of the sugarcane is a sugar. The factory has by-products like distillery, arrack, co-generation & ethanol etc.
SUGARCANE
MAIN PRODUCTION
BY PRODUCT
Sugar
distillery
L
arrack
M
compost
S1
power by Co-generation
S
ethanol
L=large
M=medium
S1=small S2=small2
Size of bags: 50kg &100kg Packing: plastic & jute bags.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
COMPANY PROFILE : LOCATION
:
The RAYATAR SAHAKARI SAKKRE KARKHANE NYIYAMIT RANNA NAGAR TMMAPUR Factory: Timmapur Mudhol, Tq: Mudhol District: Bagalkot
ESTABLISHED IN
:
25/11/1999
REGESTERED NO
:
DSK/REG/182-83
WEEKLY HOLIDAY
:
SUNDAY
WORKING SHIFT
:
4 am to 12 pm, 12 pm to 8 pm, 8 pm to 4 am
CHAIRMAN
:
R.S.Talewad
VOICE CHAIRMEN
:
Anant Rao Gorphade
M.D
:
S.S.Pujari
FINANCIAL INSTITUTION :
The Karnataka State Co-operative sugar Factories
OF THE COMPANY
, Bangalore
BANKERS OF THE
:
IDBI Bangalore
COMPANY
D.C.C Bank Timmapur, D.C.C.Bank Mudhol DCC Bank Bijapur
ARAE OF OPERATION
:
Andra Pradesh, Uttar Prades, Tamilnadu, Maharashtra
(NATIONALLY)
Bihar
(LOCALLY)
:
Mudhol, Bagalkot,Bilagi, Jamakhandi, Badami
AWARD
:
“PARTHA SARATHI”
COMPRTATORS
:
Nirani sugars Prabhulingeshwar sugar Pvt
WORKERS
:
947
NO OF SHAREHOLDER
:
10822
PRODUCT
:
Sugar
BY PRODUCT
:
Two Types Product
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,
•
Molasses
•
Bagasse
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ORGANISATIONAL PROFILE
•
Chairman
:
Shri. R.S.Talewad
•
Voice chairman
:
Shri, AnantRao Ghorpadhe.
•
Managing Director
:
Shri, S.S.Pujari
•
Board of Directors
:
Shri, Ashok M Patil. Shri, Uday V Sarwad Shri, K.S.Patil Shri, G.P.Patil Shri, L.S.Chinnanavar. Shri, Ramesh. Tungal Shri, L.S.Talewad. Shri, Rajugouda Patil. Shri, Dayanand Patil.
•
Head of Department: Finance
:
Administration
:
Cane section
:
Production
:
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Shri, S.K.Kulkarni.
Shri, R.N.Patil (Chief engineer).
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
BACKGROUND AND INCEPTION OF THE COMPANY: The
Total Cane Crushed
4,07,989 MT
Sugar produced
5,10,015 Qtls
Recovery
12.50%
Molasses produced
17,360 NT
RAYATAR SAHAKARI SAKKRE KARKHANE NYIYAMIT (R.S.S.K.N) is a large scale Agro-based sugar industry. It cov ers under Co-operative sector. This factory was registered on 29 th July 1982 itself and government has given licensee for 2,500 TCD (Tone Capacity per day). In the same year government has given registration number is DSK/REG/182-83 dated: 27/07/1982. From that onwards it started issuing the shares to the public this issuing of shares comes to end in the year 1997. During these periods they purchased 200 acres of land at Timmapur (Mudhol Taluka) village at a cost of Rs.24 lakh. The 1 st trial crushing was taken in the month of May from 19/05/1999 to 10/06/1999. The performance of the factory in this period is as under.
Total Cane Crushed Sugar produced Recovery
123.28MT 407989Qtls.
12.50
The 1st regular season starts in the yar of 1999-2000 , from 25th NOV 1999 to 28th June 2000 (217 days). The progress achieved during this season is as follows:
The estimated project cost of R.S.S.K.N Sugar factory was Rs.47.250res as prepared by the Karnataka State Co-operative sugar Factories , Bangalore. And this report has been appraised by the IFCI, New Delhi.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
10% 30% 60%
Member shares Government Term loan from Financial Institutions Total
Rs.4,725 corers Rs.14,175 corers Rs.28,350 crores 47,250 crores
Investment
Member shares 10%
Financial Institutions 60%
Government 30%
Vision •
To become one of the dignified company in the country.
•
To give due importance for the development of society.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Mission To employee support and farmers development for the fullest extent. Improving our operation activities.
Quality policy: The quality policy is to meet & exceed customer satisfaction by Adopting better quality management system practices
Setting suitable objectives & targeted of reviewing them periodically for continually improving the effectiveness of the quality management system
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
MANAGING DIRECTOR
ADMINISTRATION
PURCHASE
SALES
ENGINEERING
AGRICULTRAL
ACCOUNTS
ELECTRICAL
MANUFACTURING
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INFROSTRUCTURE
CO-GENERATION
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
1] ADMINISTRATIVE DEPARTMENT: Administrative department is classified into five sections share, sales, purchases, store, time office and security.
A) SHARE SECTION: The share section is one of the important section because more than half of the share capital is collected from the share holders.
There are five classes of shares: “A” Class- Grower members “B” Class- Co-operative institution “C” Class - State government “D” Class- Non grower members “E” Class- Outside are members.
The person who wants to become a member has to follow the procedure/rules. He has to fulfill appropriate application given by the share section authority. If the Directors approve the application, then only he is treated as shareholder of the factory. After the approval he has to pay the amount equivalent to face value of the share. There is no transferability of share. If at all he wants to transfer his shares, he has to transfer to such a person who is the member of the factory. Ife transfers to another pe rson it not valid and such shares get cancelled. For the identification of its members, the factory issues share certificates and identity cards to such shareholders.
This section gives identity card only. This section is also send notice to the concerned members on behalf of the factory. They maintain two types of books of accounts
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
B) TIME OFFICE SECTION:
Function1) Distribution of salary according to the workers attendance. 2) Sanctioning of leaves to workers. 3) Maintaining working bell. 4) It maintain present and absent record daily. 5) It reports daily attendance to concerned section. 6) Showing the absent report to the HOD’ 7) It maintains salary regester book There are 581 workers working in this factory. As this is a new establishment of all working on daily wages. Within a few months the management is going to take workers as permanent at present only on leave in a month is sectioned to the workers.
STRUCTURE
Time
Assistant time keeper genre
Bill clerk
Shift time keeper
Leave clerks Attendee Attendee peon
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
The factory runs three shifts in a season-
Shift
Starting time
Closing time
1st Shift
4am
12pm
2nd Shift
12pm
8pm
3rd Shift
8pm
4am
One general shift 8.30am to 5.30pm for both season and off season.
Types of Leaves: 1. Sick leaves:
Sick leave provided to employees 15 days Per year
2. Casual leaves:
Casual leave provided to employees 12 days Per year
3. Earn leaves:
If employee attends 30 days in a month then he is eligible for 3 days Earn leave
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
C) TELEPHONE OPERATING SECTION: In this section EPABX system is i.e. “Electronic Private Automotive Branch Exchange”. Hear only one person is operating in this section. He is the person who connects the incoming calls to different departments of the factory and also out going calls.
D) WATCH & WARD SECTION : The main function of this section is to secure factor related assets. It maintains books regarding in & out vehicles & visitors. Report to concerned section & to general accounts.
Total number of security guards is 35. There are 7 to 8 security guards in every shift.
Structure
SECURITY OFFICER
ASSISTANT SECURITY
ZAMADA R
LEAVE CLERK
GATE CLERK
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SECURITY OFFICER
ASSISTANT SECURITY
ZAMADA R
LEAVE CLERK
GATE CLERK
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
F) COMPUTER SECTION: The total number of employees working in this department is 4. This section is to maintain all types of records that are very important for the organization and the following departments are computerized in the factory,
Weight bridge department
a) Cane Cane acco accoun unts ts depa depart rtme ment nt
b) Time office department
c) Labo Labora rato tory ry depar departm tment ent
d) Stor Stores es depar departm tment ent
e) Sale Saless dep depar artm tmen entt
f) Purc Purcha hase se depa depart rtme ment nt
g) General General account accountss depar departme tment nt
h) Sales Sales acco accoun unts ts sec secti tion on
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
STRUCTURE:
COMPUTER HEAD CLEARK
COMPUTER OPERATOR
PEON
Function 1) Design Designing ing of the the packa packages ges requir required. ed. 2) Prog Progra ramm mmin ing g of the the LAN LAN.. 3) Main Mainta tain inin ing g of serv server er..
PURCHASE SECTION: This section section gives identity identity card card only. This section section is also send send notice to the concerned concerned members on behalf of the factory. They The y maintain two types of books of accounts viz.
It is also a important section in administrative department in performing the activities of purchasing. In this section there are two employees, one is purchase manager and another one is purchase assistant. The purchase manager issues the purchase order from various section of the factory. He estimates the cost purchase and accordingly he go for direct purchases or purchases through purchase committee.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SOME SPECIFIC SPECIFIC CONDITONAL CONDITONAL TO PURCHASE PURCHASE MATERIAL: The material received or any reason what so ever will be returned to the suppliers at their own cost. The material should be recently packed if any breakage, leakage it is the responsibilities of the supplier All the disputes arising out of the transaction Sales tax will have refunded if changed extra The order will be treated as canceled canc eled if goods are not supplied then the specific period
FUNCTIONS: •
Purchasing materials
•
Calling quotation
•
Placing before meeting for decision
•
Passing bill to Account section for payment
STRUCTURE
PURCHASE OFFICER
CLARKS
ATTAINDERS
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
3] SALES SECTION
This section will take care of all the sales transactions like sale of •
Sugar,
•
Molasses,
•
Bagasse.
•
Scrap material.
STRUCTURE: SALES OFFICER
SENIOR ASSISTANT
JUNIOR ASSISTANT
ATTAINDER
In the sugar industry sugar is sold according to central govt. guidance & release. Marketing & advertising is not necessary in sugar industry. Any how customer relationship is necessary to convert the stock into cash.
Function 1) Getting order from parties. 2) Arranging for delivery to parties. 3) Maintaining record of sales. 4) Sending report to managing director 5) Stocking planning godown maintainance Sales of the sugar are done in two ways a) free sales b) levy sales
a) Free sales: Babasabpatilfreepptmba.com
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Government allows the sugar factory to sale c ertain percentage of sugar by calling tender is known as free sales.
b) Levy sales: This means to sell the product to the govt. i.e. to sell the product under the guidance of the govt
5) Account section Finance is the lifeblood of business one cannot imagin a business without finance department because it is the central point of all business activities. Finance dept. of RS SKN factory plays a very important role, as it is here that decision with to procurement & utilization of funds are taken. Such decision includes the preparation of various budgets, allocation of funds for various activities or division of the firm as well as distribution of profits etc. An account section is also including in the finance dept. it helps in achieving the objectives of the company. Proper management of the fund is necessary for effective management
Structure: ACCOUNT OFFICER
CANE ACCOUNTANT
GENERAL ACCOUNTANT
CASHER
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CANE DEVELOPMENT DEPARTME
CANE MANAGER
OFFICE MANAGER CANE
CANE PROCUREMENT MANAGER
CANE OFFICERS
FIELD ASSISTANT
CANE DEV MANAGER
CANE OFFICERS
FIELD ASSISTANT
Objectives of the CDD:
•
To get best quality of cane at a right time
•
To improve the variety of the cane
•
To provide all facilities like seeds, fertilizers, unloading and loading charges
•
Main objectives are to receiving exactly 3500
•
To undertake seeds development program
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
IN CANE DEVELOPMENT
YEAR
DATE
CANE DAYS
SUGAR DEVELOPMENT
RECOVERY PRODUCTION
1999 - 00
25/11/1999 TO 28/06/2000
217
407989 510015
12.50
2000 - 01
19/11/2000 TO 15/05/2001
178
352938 436300
11.91
2001 - 02
29/10/2001 TO 05/04/2002
159
354028 424670
11.41
2002 - 03
21/10/2002 TO 29/04/2003
191
503083 585700
11.47
2003 - 04
05/11/2003 TO 13/01/2004
69
115321 127000
10.68
2004 - 05
21/10/2004 TO 18/01/2005
90
105687 115850
10.88
2005 - 06
02/11/2005 TO 21/04/2006
170
351953 400151
11.39
2006 - 07
28/10/2006 TO 09/06/2007
225
520288 608549
11.60
2007 - 08
20/11/2007 TO 26/05/2008
189
379020 446699
11.65
2008 - 09
02/10/2008 TO 25/02/2009
145
238681 255400
10.60
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” 6 )PRODUCTION DEPARTMENT :
To utilize the installed capacity of 3500 in proper manner the following personality the duty to manage the Production department.
PRODUCTION DEPARTMENT
LABORATORY INCHARGE
DEPUTY CHIEF CHEMIST
LABORATORY CHEMIST
MANUFACTURING CHEMIST
LABORATORY BOYS
STAFF AND WORKERS
The production department is one of the core parts in every process based industry. In addition, it plays a vital role in the organization for smooth going in every sugar industries; Production department is divided in to two sections.
a)Engineering department
b)Manufacturing department
a) Engineering Department.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
STRUCTURE:
CHIEF ENGINEER
MECHANICAL SECTION
ELECTRICAL SECTION
CANE WEIGHMENT
BOILER SECTION
CANE UNHOLDING URANGMENTS
WORKSHOP
STORE SECTION
POWER GENERATION
CANE PREPARATION
MILLING
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Mechanical section : This includes all the mechanical process that is right from the cane weighment till milling ( obtaining of sugar juice ) for further processing. This section includes 4 main steps they are…..
a. Cane weighment arrangements b. Cane unloading arrangement c. Cane preparation d. Milling
Cane Weighment Arrangements: Cane weighment is totally computerized process. Hear the cane weightment is carried through electronic platform called “weighs bridge”. This electronic platform is of two types. One with the capacity of 40 tons for lorry and tractors and other with a capacity of 10 tones for only cart. Hear after weighing the cane a slip is provided so that particular farmer which has the details of total weight of the cane, total trips, timing, vehicle number, variety of sugarcane a nd other details. And after this when the vehicle comes back after unloading the sugar cane, empty vehicle weight all their data stored in the computer and final copies are listed for further actions.
Cane unloading arrangements: Hear the weighed sugar cane is unloaded and sent further for cane preparation. Further unloading cane there are 2 unloaders with the help of sling attached instruments cane is loading on the feeding table.
Cane preparation: After feeding the sugar cane on feeding tables with the help of levelers which avoid overloading of sugar cane is sent to primary cutter, which cut the sugar canes in to small pieces, further fine fibers are obtained from there process by passing the m in the fibrizer.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Milling: After fibrizering the cane passing the prepared fiber cane through a set of mills carries on milling weighted hot water is also added in the course of crushing for better extraction of juice. After crushing the juice is sent for further process Power generation
Process chart of Co-generation
Water treatment
Make up water
Feed water tank
Deareator tank [Heating 1100 C]
Pumping
Stream drum
Turbine
Generator [electricity]
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Functions of power generation department are given below.
•
To generate power at high quantity.
•
To distribute it to different areas, as KPTCL.
•
To provide better working conditions to their workers for safety.
•
4 MW, 11 KV turbo alternator using for home consumption.
•
Around 8.5 MW is exported to KPTCL.
•
Power production 12.5 MW per hour.
Stores Section Various section spare parts are stored in stall system and all the units are computerized and given a code number. Bin card and other system are followed hear. These stores materials are normally required for preventive maintenance during seasons and off seasons for servicing and overalling
Function 1) To make the material requisitions for the purpose of knowing the quantity material. 2) To make purchase order or in simple terms the tender. 3) To make approval memo for verification of materials. 4) The main function of store department is to prepare a bin card. 5) The store department issued material with reference with store requisition. 6) To make classification & codification of materials. 7) Receipt of material. 8) Inspect it with ordered quantity, quality & if any other specifications. 9) Some of the material like chemical is to be sent to laboratory for incepatation & testing. 10) Getting indents from departmental head & issuing it. 11) To make purchase return if the material are rejected. 12) To maintain minimum level of materials. 13) Infringing purchase department when material required
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Structure
STORE KEEPER
CLARKS
TOOL ROOM CLARK
DIESEL ROOM CLARK
ATTAINDERS
TOOL ROOM ATTAINDER
CLARKS
DAILY WAGE LABOURS
ATTAINDERS
Store section is also important section in the administrative department. All types of materials are kept in this section. Which are required for the factory smooth running. The section works day and night. Shift is changing every 8 hours. This section is maintained by the stores keeper. The main work of this section is providing the materials to the required departments.
Those stores section maintains some books like : a. Transport. b. Bin card. c. Daily issued. d. Monthly issued.
It is also one of the section under Administration department, there are total of 7 employees working in this section.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
STORES ACCOUNT: After receiving the materials from suppliers quantity will be verified. The details of the materials will be entered in to transport registered and approved memo will be sent to the concerned departments for getting quality approval. They keep bin cards for each different items receipt from the suppliers with details.
DIESEL BANK: They issue diesel to the party against indents brought by the parties and issued is entered in the daily issue register.
TOOL ROOM: Tool room is personnel issue the materials to the workers on temporary loan and retainable basis entering in the register.
List of the registers: 1. Transport register. 2. Approval memo book. 3. Bin card files. 4. Purchase order.
In store there are two sections 1)
Transport entry table.
2)
Store receipt table.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
1) Transport entry table: They maintain records the receipt of material at what data, at what time, vehicle number, &quantity in kg. Acknowledgement from vehicles etc.
2) Store receipt table The store keeper maintain the record of receipt of materials, serial no’s made of transport, purchase order reference, bill no’s the name of the supplier etc. the store keeper has given proper condition to the material to identify the materials.
b) MANUF ACTURING DEPARTMENT Manufacturing section is again divided in to 2 sub sections •
Laboratory
•
Godown
LABORATORY:
Laboratory plays a significant role in sugar production. The Key activity of laboratory is checking the content of sugar in the sugar cone and fixing the correct shape and size of sugar. The la prepared hourly reports which advise on the addition of other chemicals in the production.
Other concerned activities of the laboratory:
•
It determines the percentage of water contents in the dilution of the juice.
•
It determines as well as managing the temperature of boiling juice.
•
Choices of colors and size of sugar.
•
To manage time and quality.
•
It decides the percentage and contents of chemicals to be added during production.
•
It finds the pH of water through universal indicator.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Structure
Chief chemist
Depute chief Chemist Manufacturing Chemist
Lab in charge
Lab chemist
Lab boy
Sample boy
Function 1) It takes care of quality of sugar juice. 2) It mixes the chemical as per requirement. 3) It examines the sugar quantity.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Chemicals used in the production of sugar.
•
Burnt-lime bleaching agent and pH controls (juice clarification)
•
Sulphur major bleaching agent.
•
Orthophosphoric acid-bleaching agent.
•
Flocculent - setting aid.
•
Caustic soda - clearing.
•
Common salt- clearing
•
Washing soda - clearing.
•
Phosphoric acid - setting.
•
Hydrous a pan bleaching agent ( color ).
•
Viscosity reducer- for reducing viscosity
•
Ammonium biflouride formalin-quality maintain and preservative.
•
Mill sanitation chemical to prevent generation of bacteria and increases the rate of boiling.
•
Mesopropile alcohol.
•
Commercial HCL. Bleaching powder – for cleaning purpose.
•
Ole acetate – used for lab.
SUGAR: It means something sweet in form of taste.
FORMULA: Carbon dioxide + Water = sucrose + oxygen 12CO2 +11H22O11+12O2
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CANE IMBITION WATER
MILLING BAGASSE
RAW JUICE EXHAUST STEAM
CONDENSATE WATER
SULPHURDIOXIDES + LIME
SULPHURED JUICE CONDENSATE WATER
EXHAUST STEAM
CLEAR JUICE EXHAUST STEAM
JUISE + MUD
VAPOURS
CONDENSATE WATER
SYRUP SULPHURDIOXIDE GAS
EXHAUST STEAM, VAPOURS
VAPOURS, CONDENSATE WATER
MASSCUITE FINAL MOLASSES
STEAM OR SUPER HEATED WASH WATER
SUGAR Babasabpatilfreepptmba.com
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
RAW JUICE: Before sending ra juice to process house it has to be weighted in order to excise the chemical control and making material balance for efficient control of the process.
JUCE HEATING: In this process the raw juce is heated and is converted to clear juce the required temperature is 100c to 105c in the boiling house.
SULPHURED JUCE: In this process the raw juce is added with time and sulphur gas and is mixes temperature 105c to 110c. and the sulphur juce received from in the from milk will be coloured.
CLARIFICATION: In this process through the vacuum filters the mud particles and the juce filtration takes places.
EVAPORATION: In the process the juce is boiled to make it solid. The solid from of sugar is than again passed to sulphur tank.
CENTRIFUGATION: In this the mass masscult is cured I,e sugar crystals separated from the liquor in high speed centrifugal machine of around 1200/RPM
GRADATION: Is the last process in the manufacturing of sugar. It collects the totally mixed sugar from the centrifugal section through happen and sugar passes from it each elector sugar is lifted to mixer part from the grader part the sugar is separated by grad wise it has grades.
BAGGING: The sugar is packed in 100kg, 50kg,& 25kg bags with latest with a technology of bagging with the mechanized stitching.
STORAGE: After it is sent to god own for storage through machines Factory has totally 2 big Godowns with a capacity of 2.5 lakhs each.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
GODOWN SECTION: Godown section is also one of the important part of the factory. Where the finished sugar is stored. This factory has 15 godowns; there are 2 big godowns its capacity 2 lakhs bags and other 13 godowns capacity 30000 bags.
STRUCTURE:
Godown Keeper
Clerks
Attender
Varieties of Sugar cane: 1.COC671
{Early Maturity}
2.CO8011
{Middle Maturity}
3.CO86032
{Early Maturity}
4.CO8021
{Early Maturity}
5.CO94012
{Early Maturity}
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Civil section
Structure CIVIL ENGINEER
ASSISTANT ENGINEER
OFFICIAL
HEAD CLARK
NON OFFICIAL
WORKER
WORKER
1) Planning for new project. 2) Water supply to the factory & quarters. 3) Looking over cleanliness of the factory. 4) Making arrangement for the functions. 5) Maintenance of factory building.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
6) Maintenance of roads, which are constructed by factory. 7) Maintaining distillery plant.
INFRASTRUCTURE SECTION The infrastructure is one of the co-operative sectors in sugar production, which is located in rannaagar, at timmapur village and is 16KM away from Mudhol. It is located near the bank of Ghtaprabha River, so the factory has obtained the premises for lifting Water from this river for factory use.
THE INFRASTRUCTURE FACILITIES PROVIDED TO THE EMPLOYEES IN THE FACTORY LIKE:
•
Canteen and mess facility
•
Medical facility
•
Housing facility
•
Safety measures
•
Guest house facility
•
Contingencies
•
Insurance facility Etc;
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” 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. The budgetary control will force management at all levels to plan in time all the activities to be done during the future periods.
A budgeted as a plan of action achieves the following purposes. Action is guided by well thought out plan because a budget is prepared after a careful study
and research. The budget serves as a mechanism through which management’s objectives and polices are
affected. It is bridge through which communication is established. The most profitable course of plan is selected. Budget is a complete formulation of the policy of the undertaking to be pursed for the
purpose of attaining a given objectives.
2). 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 co-ordinates the various activities.
3) Communication: It is necessary in an efficient organization that all people be informed about the objectives, polices, programmers and performance. This is made possible through their Participant in the budgeting process. Budgets inform each manager of what others have agreed to do. They also inform managers of the resources available objects and targets. 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. But the efficiency of the budget as a planning and control device depends upon the activity in which it is being used. A more accurate budget can be develop for those activities where direct relationship between inputs and outputs. The basis for developing budgets and exercising control.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CONCEPT OF BUDGETING: One of the primary objects of cost accounting is to provide information to business management for planning and control. Budgeting act as a toll of both planning and control. Budgeting is a formal process of financial planning using estimated and accounting data.
DEFINITION OF THE BUDGET: The Institute of Cost and Management. Accounts (UK) defines A budget as a “a financial and/or quantities statement, prepaid and approved prior to a defined period of time, of the policy to be pursed during that period for the purpose of attaining a given object. It may include income, expenditure and the payment of capital”.
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”, Forecasting is an essential part of the budgeting process. Forecasting is estimating future events and their effects on the budget. Forecasting comes to an end after mere estimating. Budgeting is a process of preparing budgets and further control aspects are involved in its procedure.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ESSENTIALS OF BUDGET: It is prepared in advance based on a future plan of action.
It relates to a future period and based on objective to be attained.
It is a statement expressed in monetary and for physical units prepared for the
implementation of policy formulated by the managemen t.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CONTROL AND PERFORMANCE EVALUATION: Budgeting entries into control at three points:
When a budgeted is being formulated, departments analyze their plans for the future and
submit estimates as per their requirements, justifying each of their demands by demon string a need. After budgets of different departments have been reviewed and approved they become
targets that set desirable limits on spending. At the end of the budget period, a comparison of actual expenditure with budget
expenditure is made as a means of judging performance and fixing responsibility foe deviations.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ADVANTAGES OF BUDGETING: Budgeting plays an important role in the effective use of resources and achieving overall
organizational goals. Budgeting compels and motivates management to make an early and timely study of its
problem. 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, tested and established as a guidelines for the entire organization. Budgeting help in directing capital and others resources into the most profitable channels. Budgeting coordinates and correlates all business activates. The use of budgeting in an organization develops an attitude of “Cost Consciousness”,
stimulates the effective use of resources, and creates an environment of profit-mindedness throughout the organization. “The uppermost point is that budgets provide a discipline that brings planning
fore front as a key managerial responsibility”. Budgeting encourage productive competition.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CLASSIFICATION OF BUDGETS:
A. According to time: Long term budgets: A budget is designed for a period of 5 to 10yrs. 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.
B. According to flexibility Fixed budget: A budget prepared on the basis of fixed or a standard level of activity. It
does not change with respect to level of activity. Flexible budget: A budget is prepared depend upon the level of the Activity.
OPERATING AND FUNCTIONAL BUDGETS:
1) Sales budget: The most important budget, which all other budgets are contingent upon, is the sales budget. All budgets, such as production budget, selling & distribution budget & other all affected by the sales budgeted & are depended upon the revenue de rived from sales.
Forecasting sales: The three main factors that should be considered by management in forecasting sales. 1) Information concerning past performance. 2) Information about present condition with in the individual company & in each sales territory. 3) Data concerning the industry & generally business.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
2) Production budget: A production budget is stated in physical units. Essentially the production budget is the sales budget adjusted for inventory changes as follows. Units produced= Budgeted Sales+ (Desired Closing Inventory of Finished Goods-Beginning Inventory of Finished Goods.)
3) Production cost budget: A production cost budgeted summaries the materials budget, lab our budgeted, the factory budget, and may be expressed and analyzed by departments and or products. It is also known as manufacturing budget.
4) Direct material budget: This budget specifies the cost if direct materials used and the Cost of the direct materials purchased. Use of direct material budget 1.
It helps the purchasing departments to prepare a schedule to ensure Delivery of material when needed.
2.
It helps in fixing minimum and maximum levels of inventories in stores department.
5. Direct labor budget: The labor budget estimates the labor, adequate in number and grades, to enable the production budget to be achieved. It is generally preferable to prepare a separate direct labor budget and to include indirect labor in the factory over head budget.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
6. 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.
i.
Inventory budget: An inventory budget can be prepared to find out the values of direct materials & finished goods inventory.
a. Selling expenses budget: It is also known as the marketing expenses budget. The selling cost budget is made up of a number of cost items, some of which are fixed and some variable. Fixed expenses are salaries and depreciation; the principal variable expenses are commission, travel advertising and bad debts.
b. Administrative expenses budget The
Administrative expenses budget covers the administrative costs for non-
manufacturing business activates. The administrative expenses budgets contains expenses like director’s remunerations, legal charges, audit fees, salaries, rent office expenses, interest, property tax, put etc.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
BUDGETED INCOME STATEMENT A budgeted income statement summaries all the individual Budgets i.e. sales budgeted, cost of the goods sold budget, selling budget, and administrative expenses budget. This budget determines income before taxes (If the tax rate is available, net income after taxes can also be computed).A system of budgetary control installation in an organization is very much beneficial which may be result in proper planning & control of activates. It ultimately results in minimizing costs and maximizing profits. If the company wants to prepare the budgets for future period of time, it is very much essential that company have to consider the past performance. Thus the past performance is treated as vital basis for the future period. Suppose in case of past performance is not available than the company has to follow the following process.
A. DETERMINATION OF THE OBJECTIVES: The installation of budgetary control system needs to have proper objective i.e. for what purposes it has been installed. The objective may be Minimizing costs or maximizing profits. Co-ordination of activities of different departments. Controlling the management functions.
B. ORGANIZATION FOR BUDGETING: Under this process the authorities and responsibilities of each executive are clearly stated. i.e. delegation of work means dividing the work between departmental heads.
C. BUDGET MANUAL: The budget manual is a written document, which specifies the objective of the budgeting organization & procedures.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SOME IMPORTANT MATTERS COVERED IN A BUDGET MANUAL A statement related to objectives of the organization & how they can be achieved
through budgetary control. Reports, statements, forms & other records to be maintained. Timetables for all stages of budgeting. A statement related to functions and responsibilities of each executive. There should be proper classification of accounts, which are lost, revenues and other
financial amounts are to be classified with their respective nature.
D. REPONSIBILITY FOR BUDGETING:
1. 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.
2. Budget committee: Budget committers are framed for true delegation of authority and responsibilities. The work should be divided under different heads i.e. Sales, production, and finance etc. The duty of budget committee to submit, discuss and finally approve of the budgeted big figures.
E. FIXATION OF THE BUDGETED PERIOD: Budgeted period: “The period for which a budget is prepared & employed”.
The budget period depend upon:
The nature of the business.
The control techniques.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
F. BUDGETED PROCEDURE: The procedure followed while designing and operating a budgetary control system depends upon the nature of the business.
THE PROCEDURE AS FOLLOWS:
1. 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. Ex: Sales, production, purchases, cash etc. Key factor must be identified & diagnosed. Budget are meaning & unless key factor identified.
2. Making of forecasts: Forecast is nothing but estimation of probabilities for a given period. Forecasts are made regarding sales, production cost and financial requirements of the business.
3. Consideration of alternative combinations of forecasts: Alternative combination of forecasts is considered for efficient of overall plan with the motive to maximum profits.
4. Preparation of budgets: After finalization of forecasts the budgets will be prepared.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
5. Choice between Fixed & Flexible budgets: A fixed budget is based on a fixed volume of activity. It is ineffective & meaningless because of actual capacity utilization may vary from month to month or quarter to quarter. A flexible budget is prepared for changing levels of activity. The flexible budget considers the fixed and the variable costs separately. 1. Start with a canned budget worksheet. 2. 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 expe nditures. 3. Think about your hobbies and your habits and be sure to add categories for these expenses. 4. Go through your pay stubs and calculate your average monthly gross pay. 5. Do the same for any interest income, dividends, bonuses, or other miscellaneous income. 6. For each expense category, try to determine a budget amount that realistically reflects your actual expenses while setting targeted spending levels that will enable you to save money. 7. Once you're comfortable with your expense categories and budgeted amounts, enter expenditures from your checkbook from the last month. 8. Keep track of cash expenditures throughout the month and total and categorize these at the end of each month. 9. Subtotal the income and expense categories. 10. Subtract the total expenses from the total income to arrive at your net income. 11. If the number is negative, your expenses are greater than your income. Your situation can probably be greatly improved by changing your spending habits. 12. If you have a positive net income, transfer most of it to a savings or investment account at the end of each month. Extra cash left in a regular checking account has a way of getting spent. 13. After you've tracked your actual spending for a month or two, analyze your spending to identify where you can comfortably make cuts. 14. Once you've got the budgeting process in place, take an in-depth look at your largest spending categories, brainstorm about ways to reduce spending in specific categories, and set realistic goals
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Tips: 1. Don't try to fit your expenses into somebody else's budget categories. Tailor the categories to fit your own situation. 2. Make your categories detailed enough to provide useful information, but not so detailed that you become bogged down in trivial details. 3. Think of your budget as a tool to help you get out of debt and save money, not as a financial diet.
NEED FOR THE STUDY:
•
To make myself well known about organization structure at Ranna Sugars.
•
To get the knowledge about budgetary performance through trend analysis and over all performance of Rona Sugars through primary and secondary data.
So studying the various practices carried out in finance will be helpful to me in my
•
MBA course.
LIMITATIONS:
Considering the scope mentioned above, some or few limitations are arising i.e. the Rona Sugars 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.
Time constraints.
Only Three years data is used for the analysis of the study
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
DATA ANALYSIS AND INTERPETATION
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR
RECEIPTS 2006Sl.No
Particular
1
Sugar Sales Sale of By
2 3 4
Products Dividend Interest on Loans
2007
Actual
At Rs. In
Income
2007-2008 At Rs. In Lakhs
Lakhs 9487.50
1985.40
7187.50
1053.50
57.37
7.55 14.40
7550.46 1285.63
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2008Actual
2009
Actual
Income
At Rs. In
Income
7189.50
Lakhs 6440.00
1593.86
1046.36
679.13
909.36
2672.92
7.55 2.00
360.50 1003.17
3.60 3.02
1371.05 5619.10
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Comparisons of Actual expenses
Sl.N
Particulars
o
1
Sugarcane purchased
2
2006-07
Actual exp's
At Rs. In Lakhs
At Rs.in Lakhs
2007-08
Actual
2008-09
Actual
At Rs. In
Exp's At
At Rs. In
Exp's At Rs.
Lakhs
Rs.in Lakhs
Lakhs
In Lakhs
7250.00
6162.81
5230.00
5230.00
4400.00
5616.18
Reconstruction expenses
2.00
79.28
3.00
3.00
3.00
15.13
3
Vehicles management
8.00
114275.50
8.00
80.00
12.00
108,00
4
Interest on loan
1800.00
756040.98
1800.00
18000.00
1600.00
8268.57
5
Salary to staff
264.00
48219.82
264.00
18000.00
338.00
70.49
6
Auditors fees
2.00
1874.94
2.50
2.50
3.00
2.79
7
Rent and taxes
8.00
18723.36
20.00
200.00
20.00
15.98
8
Insurance
10.00
51.71
10.00
100.00
10.00
0.17
200.00
191679.06
300.00
3000.00
300.00
235.84
9
Repairs and maintenance of machiner y
10
Telegram and telephone charges
5.00
2655.46
4.00
40.00
3.00
2.95
11
Bank commission
4.00
2960.78
4.00
-------
1.50
0.74
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR
RECEIPTS
Sl.No 1 2
3 4 5
Particulars
Sugar Sales Sale of By Products Dividend Interest on Loans Loss TOTAL
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2005-2006
2006-2007
2007-2008
2008-2009
At Rs. In
At Rs. In
At Rs.in
At Rs. In
Lakhs 6160.00 877.21
Lakhs 9487.50 1053.50
Lakhs 7187.50 1046.36
Lakhs 6440.00 909.36
10.00 3.00 1370.89 8421.10
7.55 1,44 1007.51 11557.50
7.55 2.00 ------8243.41
3.60 3.02 ------7355.98
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
RECEIPTS
10000 9000 8000 E 7000 E 6000 P 5000 U 4000 R 3000 2000 1000 0
Sugar Sales Sale of By Products Dividend Interest on Loans Loss At Rs. In Lakhs
At Rs. In Lakhs
At Rs.in Lakhs
At Rs. In Lakhs
2005-2006
2006-2007
2007-2008
2008-2009
YEAR
PAYMENTS
Sl.No
Particulars
1 2 3 4 5 6 7 8
Sugarcane purchased Reconstruction expenses Vehicles management Interest on loan Salary to staff Auditors fees Rent and taxes Insurance Repairs and maintenance of
9 10 11 12 13
machinery Telegram and telephone charges Bank commission Other expenses Net Profit carry forward to C/B TOTAL
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2005-2006
2006-2007
2007-2008
2008-2009
Amt Rs. In
Am Rs. In
Am Rs.IN
Amt Rs. in
Lakhs 4900.00 10.10 6.00 1400.00 250.00 3.00 6.00 10.00
Lakhs 7250.00 2.00 8.00 1800.00 264.00 2.00 8.00 10.00
Lakhs 5230.00 3.00 8.0 1800.00 264.00 2.50 20.00 10.00
Lakhs 4400.00 3.00 12.00 1600.00 338.00 3.0 20.00 10.00
4.00 1.75 1831.00
300.00 5.00 4.00 1904.00
8421.10
11557.50
300.00 4.00 4.00 442.50 155.41 8243.41
300.00 3.0 1.50 418.50 246.98 7355.98
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
PAYMENTS Sugarcane purchased
8000 7000
Reconstruction expenses
6000 E5000 E P4000 U R3000
Vehicles management Interest on loan
2000 Salary to staff
1000 0 Amt Rs. In Lakhs
Am Rs. In Lakhs
Am Rs.IN Lakhs
Amt Rs. in Lakhs
2005-2006
2006-2007
2007-2008
2008-2009
Auditors fees
Rent and taxes
YEAR
A) 2006-07 Receipts. Sl.No
Particulars
2005-2006
2006-2007
At Rs. In
At Rs. in
Lakhs
Lakhs
Increase
Decrease
In %
In%
1
Sugar Sales
6160.00
9487.50
54.00%
-------
2
Sale of By Products
877.21
1053.50
20.09%
-------
10.00
7.55
------
24.50%
3.00
1.44
------
52.00%
1370.89
1007.51
------
26.50%
8421.10
11575.10
37.45%
-------
3
Dividend
4
Interest On Loans
5
Loss
TOTAL
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INTREPRETATION
Sugar sales increased by 54.00% in the year 2006-2007 compared to 2005-2006. Sales of by product decreased by 20.09% in the year 2006-2007 compared to 2005-2006 Interest on loans decreased by 52.00% in the year 2007-2008 compared to 2006-2007
PAYMENTS:-2006-2007
Sl.No 1 2 3 4 5 6 7 8 9 10 11 12 13
Particulars Sugarcane purchased Reconstruction expenses Vehicles management Interest on loan Salary to staff Auditors fees Rent and taxes Insurance Repairs and maintenance of machinery Telegram and telephone charges Bank commission Other expenses Net Profit carry forward to C/B TOTAL
2005-2006
2006-2007
At Rs.in
At in
Lakhs 4900.00 10.10 6.00 1400.00 250.00 3.00 6.00 10.00
40.00 1.00 1831.00 ------8421.10
Rs.Lakhs 7250.00 2.00 80.00 1800.00 264.00 2.00 8.00 10.00 300.00 5.00 4.00 1904.50 ------11557.50
Increase
Decrease
In % 47.95% -----33.33% 28.57% 5.60% -----33.00% --------------350% 4.01% ----37.24%
In % -----80.20% ---------------33.33% ----------------87.50% --------------------
INTREPRETATION
Sugarcane purchased increased by 47.95% in the year 2006-2007 compared to 2005-2006
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” Reconstruction expenses decreased by 80.20% in the year 2006-2007 compared to 2005-
2006. Auditor fees decreased by 33.33% in the year 2006-2007 compared to 2005-2006. Bank commission increased by 350% in the year 2006-2007 compared to 2005-2006.
B)2007-2008 Receipts
Sl.No
Particulars
2006-2007
2007-2008
At in Rs. In
At Rs. In
Increase
Decrease
Lakhs
Lakhs
%
%
1
Sugar Sales
9487.50
7187.0
--------
24.24%
2
Sale of By Products
1053.50
1046.36
--------
0.68%
3
Dividend
7.55
7.55
--------
------
4
Interest On Loans
1.44
2.00
39.8%
------
5
Loss
1007.51
------
------
------
11557.50
8243.41
-------
28.67%
TOTAL
INTREPRETATION
Sugar sales decreased by 32% in the year 2007-2008 compared to 2006-2007 Sales of by product decreased by 0.68% in the year 2007-2008 compared to 2006-2007 Interest on loans increased by 28% in the year 2007-2008 compared to 2006-2007
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
PAYMENT:2007-2008
Sl.No 1 2 3 4 5 6 7 8 9 10 11 12 13
Particulars Sugarcane purchased Reconstruction expenses Vehicles management Interest on loan Salary to staff Auditors fees Rent and taxes Insurance Repairs and maintenance of machinery Telegram and telephone charges Bank commission Other expenses Net Profit carry forward to C/B TOTAL
2006-2007
2007-2008
At Rs. In
At Rs. In
Lakhs 7250.00 2.00 8.00 1800.00 264.00 2.00 8.00 10.00 300.00 5.00 4.00 1904.00 11557.50
Lakhs 5230.00 3.00 8.00 1800.00 264.00 2.50 20.00 10.00 300.00 4.00 4.00 442.50 155.41 8243.41
Increase
Decrease
%
% 27.87% ----------------------------------------20% -----77% -----29%
-----50% ----------------25% 60% --------------------------------
INTREPRETATION
Sugar purchased decrease by 27.87% in the year 2007-2008 compared to 2006-2007 Reconstruction expenses increase by 50% in the year 2007-2008 compared to 2006-2007 Rent and taxes increased by 60% in the year 2007-2008 compared to 2006-200
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
C)2008-2009 Receipts 2007-2008
2008-2009
At Rs. In
At Rs. In
Lakhs
Lakhs
Sugar Sales
7187.00
Sale of By Products
Sl.No
1
2
Particulars
Increase
Decrease
%
%
6440.00
-----
10.40%
1046.36
909.36
------
13.10%
3
Dividend
7.55
3.60
------
52.32%
4
Interest On Loans
2.00
3.02
33.78%
-----
5
Loss
------
-----
------
10.77%
TOTAL
8243.41
735598000
INTREPRETATION
Sugar sales decreased by 10.40% in the year 2008-2009 compared to 2007-2008 Sales of by product decrease by 13.10% in the 2008-2009 compared to 2007-2008 Interest on loan increased by 33.78% in the 2008-2009 compared to 2007-2008
PAYMENTS:-2008-2009 Babasabpatilfreepptmba.com
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Sl.No
Particulars
1 2 3 4 5 6 7 8
Sugarcane purchased Reconstruction expenses Vehicles management Interest on loan Salary to staff Auditors fees Rent and taxes Insurance Repairs and maintenance of
9 10 11 12 13
machinery Telegram and telephone charges Bank commission Other expenses Net Profit carry forward to C/B TOTAL
2007-2008
2008-2009
At Rs. In
At Rs. In
Lakhs 5230.00 3.00 8.00 1800.00 264.00 2.50 20.50 10.50
Lakhs 4400.00 3.00 12.00 1600.00 338.00 3.00 20.00 10.50
300.50 4.50 4.00 442.50 155.41 8243.41
300.00 3.00 1.50 418.50 246.98 7355.98
Increase
Decrease
%
In %
--------50% -----22% 17% -----------
16% ---------11.11% --------2.43% -----
-------------------58.92% ------
0.16% 33.33% 63% 5.00% ---11%
INTREPRETATION •
Sugarecane consumption is decreased by 16%in the year 2008-2009 compared to 2007-2008
•
Vehicales management cost’s are increased by 50% in the year 2008-2009 compared to 20007-2008
•
Bank commission is decreased by 63% in the year 2008-2009 compared to 20072008
FINDINGS: •
In Ranna Sugars both monthly operation plan and annual operation plan are prepared ascertaining the budgeting performance with actual performance.
•
Budgetary control system is adopted for checking the industrial performance
•
Sugar sales increased by 54.00% in the year 2006-2007 compared to 2005-2006-
•
Interest on loans decreased by 39.8% in the year 2007-2008 compared to 2006-2007
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
•
Sugarcane purchased increased by 47.95% in the year 2006-2007 compared to 2005 – 2006
•
Sugar purchased decrease by 27.87% in the year 2007-2008 compared to 2006- 2007
•
Vehicles management cost’s are increased by 50% in the year 2008-2009 compared to 20007-2008
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SUGGESTIONS
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.
Ranna Sugars can carry out some promotional activities, so as to increase its sales
and beat
the competition
Use of quarter Budget it leads to chances of improvement or modification. Quarter Budget helps industrial concerns to checks its actual performance. After
ascertaining the actual performance if any modification requires that can be adjusted in next quarter.
Ranna Sugars may appoint specialized and experienced finance manager to improve
its finance performance.
The company should have proper co-ordination between finance and marketing
department.
The company should have close watch on the market which helps to make new
strategies.
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CONCLUSION: From the study it can be concluded that to know that budgetary control is treated as one of the better techniques for minimizing cost and maximizing profit in Ranna Sugars. Budgetary control technique Plays important role in the profit making or smooth running of the company
It co ordinates all the departments like Finance, Marketing, Production in the company. It makes the decentralization of authority in the organization which helps organization goal with in stipulated period of time. Budgetary control acts as safety for an organization because it helps to identify business risk and necessary steps can be taken to avoid the risk.
Budgetary control techniques help to know how the available monetary resources can be utilized effectively. This technique focus on efficiency in the allocation of resources in particular time. As the finance department is the soul of any organization. Budgetary control helps the organization by making finance department effectives
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“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” BIBOLOGRAPHY
Financial management by M.Y. Khan and P.K. Jain
Financial management by I.M. Pandey
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