Beruflich Dokumente
Kultur Dokumente
CONTENTS
SL NO PARTICULAR PAGE NO
1 Executive Summary 1
3 Introduction 3
4 Industrial Profile 4
5 Company Profile 6
6 Organization Profile 7
9 Findings 62
10 Suggestion 63
11 Conclusion 64
12 Bibliography 65
13 Annexure 66
Babasabpatilfreepptmba.com -1-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
EXECUTIVE SUMMARY
RANNA SUGARS. Is the co-operative company. The project has been undertaken on the
control helps to understand goal of the concern whether it may be 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
adaptability, which creates new challenges to industrial sector for surviving in this current
competitive edge. It indicates the progress of the concern by way of its sales or profit, market
Babasabpatilfreepptmba.com -2-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
2) To compare the budgeted figures with actual figures and Comparison of financial
statements for different financial years.
4) To Forecast the future and plan to avoid losses but more positively to maximize the
profits
METHODOLOGY:
PRIMARY SOURCE:
The information of the budgetary control where obtained from.
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.
Babasabpatilfreepptmba.com -3-
“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.
Babasabpatilfreepptmba.com -4-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INDUSTRIAL PROFILE
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 65 % of total production
Babasabpatilfreepptmba.com -5-
“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
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.
Babasabpatilfreepptmba.com -6-
“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
• Molasses
• Bagasse
Babasabpatilfreepptmba.com -7-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ORGANISATIONAL PROFILE
• Head of Department:
Finance : Shri, S.K.Kulkarni.
Administration :
Cane section :
Production : Shri, R.N.Patil (Chief engineer).
Babasabpatilfreepptmba.com -8-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Recovery 12.50%
407989Qtls.
Sugar produced
Recovery 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.
Babasabpatilfreepptmba.com -9-
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Investment
Member shares
10%
Government
Financial 30%
Institutions
60%
Vision
• To become one of the dignified company in the country.
Babasabpatilfreepptmba.com - 10 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Mission
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
Babasabpatilfreepptmba.com - 11 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
MANAGING DIRECTOR
ENGINEERING ELECTRICAL
Babasabpatilfreepptmba.com - 12 -
“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.
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 person 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
Babasabpatilfreepptmba.com - 13 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Function-
1) 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
keeper
Assistant time
keeper genre
Bill clerk
Leave clerks
Attendee
Attendee peon
Babasabpatilfreepptmba.com - 14 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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
Babasabpatilfreepptmba.com - 15 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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
Babasabpatilfreepptmba.com - 16 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SECURITY OFFICER
ASSISTANT SECURITY
ZAMADA
R
LEAVE CLERK
GATE CLERK
Babasabpatilfreepptmba.com - 17 -
“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,
c) Laboratory department
d) Stores department
e) Sales department
f) Purchase department
Babasabpatilfreepptmba.com - 18 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
STRUCTURE:
COMPUTER OPERATOR
PEON
Function
PURCHASE SECTION:
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 viz.
Babasabpatilfreepptmba.com - 19 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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 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
Babasabpatilfreepptmba.com - 20 -
“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 - 21 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Government allows the sugar factory to sale certain 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 RSSKN
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
Babasabpatilfreepptmba.com - 22 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CANE MANAGER
• To provide all facilities like seeds, fertilizers, unloading and loading charges
Babasabpatilfreepptmba.com - 23 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
IN CANE DEVELOPMENT
Babasabpatilfreepptmba.com - 24 -
“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
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.
Babasabpatilfreepptmba.com - 25 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
STRUCTURE:
CHIEF ENGINEER
CANE
WEIGHMENT BOILER SECTION
CANE POWER
UNHOLDING GENERATION
URANGMENTS
CANE
PREPARATION
MILLING
Babasabpatilfreepptmba.com - 26 -
“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…..
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 them in the fibrizer.
Babasabpatilfreepptmba.com - 27 -
“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
Deareator tank
[Heating 1100 C]
Pumping
Stream drum
Turbine
Generator [electricity]
Babasabpatilfreepptmba.com - 28 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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
Babasabpatilfreepptmba.com - 29 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Structure
STORE KEEPER
TOOL ROOM
ATTAINDERS 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.
It is also one of the section under Administration department, there are total of 7 employees
working in this section.
Babasabpatilfreepptmba.com - 30 -
“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.
Babasabpatilfreepptmba.com - 31 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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.
Babasabpatilfreepptmba.com - 32 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Structure
Chief chemist
Depute chief
Chemist
Manufacturing
Chemist
Lab in charge
Function
Babasabpatilfreepptmba.com - 33 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Babasabpatilfreepptmba.com - 34 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SUGAR:
It means something sweet in form of taste.
FORMULA:
Carbon dioxide + Water = sucrose + oxygen
12CO2 +11H22O11+12O2
Babasabpatilfreepptmba.com - 35 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CANE
IMBITION WATER
MILLING
BAGASSE
RAW JUICE
SULPHURDIOXIDES + LIME
SULPHURED JUICE
CLEAR JUICE
SYRUP
MASSCUITE
SUGAR
Babasabpatilfreepptmba.com - 36 -
“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.
Babasabpatilfreepptmba.com - 37 -
“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
Babasabpatilfreepptmba.com - 38 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Civil section
Structure
CIVIL ENGINEER
ASSISTANT
ENGINEER
OFFICIAL
NON OFFICIAL
WORKER
Babasabpatilfreepptmba.com - 39 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INFRASTRUCTURE SECTION
Babasabpatilfreepptmba.com - 40 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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.
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.
Babasabpatilfreepptmba.com - 41 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CONCEPT OF BUDGETING:
Babasabpatilfreepptmba.com - 42 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ESSENTIALS OF BUDGET:
It is a statement expressed in monetary and for physical units prepared for the
implementation of policy formulated by the management.
Babasabpatilfreepptmba.com - 43 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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.
Babasabpatilfreepptmba.com - 44 -
“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 to the
fore front as a key managerial responsibility”.
Budgeting encourage productive competition.
Babasabpatilfreepptmba.com - 45 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
CLASSIFICATION OF BUDGETS:
A. According to time:
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.
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 derived 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.
Babasabpatilfreepptmba.com - 46 -
“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.)
Babasabpatilfreepptmba.com - 47 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
i. Inventory budget:
An inventory budget can be prepared to find out the values of direct materials & finished
goods inventory.
Babasabpatilfreepptmba.com - 48 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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.
C. BUDGET MANUAL:
The budget manual is a written document, which specifies the objective of the budgeting
organization & procedures.
Babasabpatilfreepptmba.com - 49 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
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.
Babasabpatilfreepptmba.com - 50 -
“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.
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.
4. Preparation of budgets:
After finalization of forecasts the budgets will be prepared.
Babasabpatilfreepptmba.com - 51 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Babasabpatilfreepptmba.com - 52 -
“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.
• To get the knowledge about budgetary performance through trend analysis and over all
performance of Rona Sugars through primary and secondary data.
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
Babasabpatilfreepptmba.com - 53 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
DATA ANALYSIS
AND
INTERPETATION
Babasabpatilfreepptmba.com - 54 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
RECEIPTS
2006- 2008-
2007-2008
2007 Actual Actual 2009 Actual
Sl.No Particular At Rs. In
At Rs. In Income Income At Rs. In Income
Lakhs
Lakhs Lakhs
1 Sugar Sales 9487.50 1985.40 7187.50 7189.50 6440.00 1593.86
Sale of By
1053.50 57.37 1046.36 679.13 909.36 2672.92
2 Products
3 Dividend 7.55 7550.46 7.55 360.50 3.60 1371.05
4 Interest on Loans 14.40 1285.63 2.00 1003.17 3.02 5619.10
Babasabpatilfreepptmba.com - 55 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
Babasabpatilfreepptmba.com - 56 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
RECEIPTS
2005-2006 2006-2007 2007-2008 2008-2009
At Rs. In At Rs. In At Rs.in At Rs. In
Sl.No Particulars Lakhs Lakhs Lakhs Lakhs
1 Sugar Sales 6160.00 9487.50 7187.50 6440.00
2 Sale of By Products 877.21 1053.50 1046.36 909.36
3 Dividend 10.00 7.55 7.55 3.60
4 Interest on Loans 3.00 1,44 2.00 3.02
5 Loss 1370.89 1007.51 ------- -------
TOTAL 8421.10 11557.50 8243.41 7355.98
Babasabpatilfreepptmba.com - 57 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
RECEIPTS
10000
9000
8000 Sugar Sales
RUPEES
PAYMENTS
2005-2006 2006-2007 2007-2008 2008-2009
Amt Rs. In Am Rs. In Am Rs.IN Amt Rs. in
Sl.No Particulars Lakhs Lakhs Lakhs Lakhs
1 Sugarcane purchased 4900.00 7250.00 5230.00 4400.00
2 Reconstruction expenses 10.10 2.00 3.00 3.00
3 Vehicles management 6.00 8.00 8.0 12.00
4 Interest on loan 1400.00 1800.00 1800.00 1600.00
5 Salary to staff 250.00 264.00 264.00 338.00
6 Auditors fees 3.00 2.00 2.50 3.0
7 Rent and taxes 6.00 8.00 20.00 20.00
8 Insurance 10.00 10.00 10.00 10.00
Repairs and maintenance of
9 machinery 300.00 300.00 300.00
10 Telegram and telephone charges 4.00 5.00 4.00 3.0
11 Bank commission 1.75 4.00 4.00 1.50
12 Other expenses 1831.00 1904.00 442.50 418.50
13 Net Profit carry forward to C/B 155.41 246.98
TOTAL 8421.10 11557.50 8243.41 7355.98
Babasabpatilfreepptmba.com - 58 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
PAYMENTS
Sugarcane
8000 purchased
7000 Reconstruction
6000 expenses
RUPEES
5000 Vehicles
management
4000
3000 Interest on loan
2000
1000 Salary to staff
0
Auditors fees
Amt Rs. In Am Rs. In Am Rs.IN Amt Rs. in
Lakhs Lakhs Lakhs Lakhs
Rent and taxes
2005-2006 2006-2007 2007-2008 2008-2009
YEAR
Insurance
Repairs and
maintenance of
machinery
Telegram and
telephone charges
A) 2006-07 Receipts.
Bank commission
2005-2006 2006-2007
Increase Decrease
Sl.No Particulars At Rs. In At Rs. in
In % Other In%
expenses
Lakhs Lakhs
Babasabpatilfreepptmba.com - 59 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
INTREPRETATION
PAYMENTS:-2006-2007
2005-2006 2006-2007
At Rs.in At in Increase Decrease
Sl.No Particulars Lakhs Rs.Lakhs In % In %
1 Sugarcane purchased 4900.00 7250.00 47.95% ------
2 Reconstruction expenses 10.10 2.00 ------ 80.20%
3 Vehicles management 6.00 80.00 33.33% ------
4 Interest on loan 1400.00 1800.00 28.57% ------
5 Salary to staff 250.00 264.00 5.60% ------
6 Auditors fees 3.00 2.00 ------ 33.33%
7 Rent and taxes 6.00 8.00 33.00% ------
8 Insurance 10.00 10.00 ------ -------
9 Repairs and maintenance of machinery 300.00 ------ ------
10 Telegram and telephone charges 40.00 5.00 ----- 87.50%
11 Bank commission 1.00 4.00 350% -----
12 Other expenses 1831.00 1904.50 4.01% ------
13 Net Profit carry forward to C/B ------- ------- ----- ------
TOTAL 8421.10 11557.50 37.24% ------
INTREPRETATION
Babasabpatilfreepptmba.com - 60 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
B)2007-2008 Receipts
2006-2007 2007-2008
At in Rs. In At Rs. In Increase Decrease
Sl.No Particulars Lakhs Lakhs % %
INTREPRETATION
Babasabpatilfreepptmba.com - 61 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
PAYMENT:2007-2008
2006-2007 2007-2008
At Rs. In At Rs. In Increase Decrease
Sl.No Particulars Lakhs Lakhs % %
1 Sugarcane purchased 7250.00 5230.00 ------ 27.87%
2 Reconstruction expenses 2.00 3.00 50% ------
3 Vehicles management 8.00 8.00 ------- ------
4 Interest on loan 1800.00 1800.00 ------ -------
5 Salary to staff 264.00 264.00 ------ ------
6 Auditors fees 2.00 2.50 25% ------
7 Rent and taxes 8.00 20.00 60% -----
8 Insurance 10.00 10.00 ------ ------
9 Repairs and maintenance of machinery 300.00 300.00 ------ ------
10 Telegram and telephone charges 5.00 4.00 ----- 20%
11 Bank commission 4.00 4.00 ----- ------
12 Other expenses 1904.00 442.50 ----- 77%
13 Net Profit carry forward to C/B 155.41 ----- ------
TOTAL 11557.50 8243.41 ------ 29%
INTREPRETATION
Babasabpatilfreepptmba.com - 62 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
C)2008-2009 Receipts
2007-2008 2008-2009
Increase Decrease
Sl.No Particulars At Rs. In At Rs. In
% %
Lakhs Lakhs
INTREPRETATION
PAYMENTS:-2008-2009
Babasabpatilfreepptmba.com - 63 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
2007-2008 2008-2009
Increase Decrease
Sl.No Particulars At Rs. In At Rs. In
% In %
Lakhs Lakhs
1 Sugarcane purchased 5230.00 4400.00 ----- 16%
2 Reconstruction expenses 3.00 3.00 ----- -----
3 Vehicles management 8.00 12.00 50% ------
4 Interest on loan 1800.00 1600.00 ------ 11.11%
5 Salary to staff 264.00 338.00 22% -----
6 Auditors fees 2.50 3.00 17% -----
7 Rent and taxes 20.50 20.00 ------ 2.43%
8 Insurance 10.50 10.50 ------ -----
Repairs and maintenance of
9 machinery 300.50 300.00 ------ 0.16%
10 Telegram and telephone charges 4.50 3.00 ------ 33.33%
11 Bank commission 4.00 1.50 ------ 63%
12 Other expenses 442.50 418.50 ----- 5.00%
13 Net Profit carry forward to C/B 155.41 246.98 58.92% ----
TOTAL 8243.41 7355.98 ------ 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 2007-
2008
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-
Babasabpatilfreepptmba.com - 64 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
• 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
Babasabpatilfreepptmba.com - 65 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
SUGGESTIONS
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.
Babasabpatilfreepptmba.com - 66 -
“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
Babasabpatilfreepptmba.com - 67 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
BIBOLOGRAPHY
Babasabpatilfreepptmba.com - 68 -
“A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”
ANNEXURE
Babasabpatilfreepptmba.com - 69 -