A project report on budgetary control at ranna sugars

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A project report on budgetary control at ranna sugars

  1. 1. “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 66Babasabpatilfreepptmba.com -1-
  2. 2. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” EXECUTIVE SUMMARY RANNA SUGARS. Is the co-operative company. The project has been undertaken on thetopic “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” As budgetarycontrol 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 theactual performance with the budgeted performance .The concept of the Budget and way ofadaptability, which creates new challenges to industrial sector for surviving in this currentcompetitive edge. It indicates the progress of the concern by way of its sales or profit, marketshares, process of the concern etc.Babasabpatilfreepptmba.com -2-
  3. 3. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” OBJECTIVES OF THE STUDY: 1) To study the existing budgetary controls method & practices at Ranna Sugars . 2) To compare the budgeted figures with actual figures and Comparison of financial statements for different financial years. 3) To find out any loopholes in the budgetary control system. 4) To Forecast the future and plan to avoid losses but more positively to maximize the profitsMETHODOLOGY: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-
  4. 4. “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-
  5. 5. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”INDUSTRIAL PROFILEIndian sugar industryIndia 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. TheIndian sugar has a turnover of rs.500 billion per annum & it contributes almost rs.22.5 billion tothe central & state exchequer as tax, cess & excise duty every year. Indian sugar industry has beena focal point for a socio-economic development in the rural areas. About 50 million sugarcanefarmers & a large number of agricultural labors are involved in sugarcane cultivation & ancillaryactivities, constituting 7.5 % of the rural population. Besides, the industry provides employment toabout 2 million skilled/semi-skilled workers & others mostly from the rural areas. The industry notonly 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,& canbe 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’shave 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 statescontributed more than 85 % of total sugar production in the country; Uttar Pradesh, Maharashtra &Karnataka together contribute more than 65 % of total productionBabasabpatilfreepptmba.com -5-
  6. 6. “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.Babasabpatilfreepptmba.com -6-
  7. 7. “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: BagalkotESTABLISHED IN : 25/11/1999REGESTERED NO : DSK/REG/182-83WEEKLY HOLIDAY : SUNDAYWORKING SHIFT : 4 am to 12 pm, 12 pm to 8 pm, 8 pm to 4 amCHAIRMAN : R.S.TalewadVOICE CHAIRMEN : Anant Rao GorphadeM.D : S.S.PujariFINANCIAL INSTITUTION : The Karnataka State Co-operative sugar FactoriesOF THE COMPANY , BangaloreBANKERS OF THE : IDBI BangaloreCOMPANY D.C.C Bank Timmapur, D.C.C.Bank Mudhol DCC Bank BijapurARAE OF OPERATION : Andra Pradesh, Uttar Prades, Tamilnadu, Maharashtra(NATIONALLY) Bihar(LOCALLY) : Mudhol, Bagalkot,Bilagi, Jamakhandi, BadamiAWARD : “PARTHA SARATHI”COMPRTATORS : Nirani sugars Prabhulingeshwar sugar PvtWORKERS : 947 ,NO OF SHAREHOLDER : 10822PRODUCT : SugarBY PRODUCT : Two Types Product • Molasses • BagasseBabasabpatilfreepptmba.com -7-
  8. 8. “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 : Shri, S.K.Kulkarni. Administration : Cane section : Production : Shri, R.N.Patil (Chief engineer).Babasabpatilfreepptmba.com -8-
  9. 9. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”BACKGROUND AND INCEPTION OF THE COMPANY: Total Cane Crushed 4,07,989 MT Sugar produced 5,10,015 Qtls Recovery 12.50% Molasses produced 17,360 NT The RAYATAR SAHAKARI SAKKRE KARKHANE NYIYAMIT (R.S.S.K.N) is a largescale Agro-based sugar industry. It covers under Co-operative sector. This factory was registered on 29th July 1982 itself and government has given licensee for2,500 TCD (Tone Capacity per day). In the same year government has given registration number isDSK/REG/182-83 dated: 27/07/1982. From that onwards it started issuing the shares to the publicthis issuing of shares comes to end in the year 1997. During these periods they purchased 200acres of land at Timmapur (Mudhol Taluka) village at a cost of Rs.24 lakh. The 1 st trial crushingwas taken in the month of May from 19/05/1999 to 10/06/1999. The performance of the factory inthis period is as under. Total Cane Crushed 123.28MT 407989Qtls. Sugar produced Recovery 12.50 The 1st regular season starts in the yar of 1999-2000, from 25th NOV 1999 to 28thJune 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 theKarnataka State Co-operative sugar Factories , Bangalore. And this report has been appraised bythe IFCI, New Delhi.Babasabpatilfreepptmba.com -9-
  10. 10. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” 10% Member shares Rs.4,725 corers 30% Government Rs.14,175 corers Term loan from 60% Rs.28,350 crores Financial Institutions Total 47,250 crores Investment Member shares 10% Government Financial 30% Institutions 60%Vision • To become one of the dignified company in the country. • To give due importance for the development of society.Babasabpatilfreepptmba.com - 10 -
  11. 11. “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 systemBabasabpatilfreepptmba.com - 11 -
  12. 12. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”ORGANISATIONAL STRUCTURE BOARD OF DIRECTORS MANAGING DIRECTOR ADMINISTRATION PURCHASE SALES AGRICULTRAL ACCOUNTS ENGINEERING ELECTRICAL MANUFACTURING INFROSTRUCTURE CO-GENERATIONBabasabpatilfreepptmba.com - 12 -
  13. 13. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”1] ADMINISTRATIVE DEPARTMENT: Administrative department is classified into five sections share, sales, purchases, store, timeoffice and security.A) SHARE SECTION: The share section is one of the important section because more than half of the share capitalis 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 tofulfill appropriate application given by the share section authority. If the Directors approve theapplication, then only he is treated as shareholder of the factory. After the approval he has to paythe 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 totransfer to such a person who is the member of the factory. Ife transfers to another person itnot valid and such shares get cancelled. For the identification of its members, the factory issuesshare certificates and identity cards to such shareholders. This section gives identity card only. This section is also send notice to the concernedmembers on behalf of the factory. They maintain two types of books of accountsBabasabpatilfreepptmba.com - 13 -
  14. 14. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”B) TIME OFFICE SECTION: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 allworking on daily wages. Within a few months the management is going to take workers aspermanent at present only on leave in a month is sectioned to the workers.STRUCTURE Time keeper Assistant time keeper genre Bill clerk Shift time keeper Leave clerks Attendee Attendee peonBabasabpatilfreepptmba.com - 14 -
  15. 15. “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 4amOne 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 leaveBabasabpatilfreepptmba.com - 15 -
  16. 16. “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 CLERKBabasabpatilfreepptmba.com - 16 -
  17. 17. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” SECURITY OFFICER ASSISTANT SECURITY ZAMADA R LEAVE CLERK GATE CLERKBabasabpatilfreepptmba.com - 17 -
  18. 18. “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 maintainall types of records that are very important for the organization and the following departments arecomputerized in the factory, Weight bridge department a) Cane accounts department b) Time office department c) Laboratory department d) Stores department e) Sales department f) Purchase department g) General accounts department h) Sales accounts sectionBabasabpatilfreepptmba.com - 18 -
  19. 19. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”STRUCTURE: COMPUTER HEAD CLEARK COMPUTER OPERATOR PEON Function 1) Designing of the packages required. 2) Programming of the LAN. 3) Maintaining of server.PURCHASE SECTION: This section gives identity card only. This section is also send notice to the concernedmembers on behalf of the factory. They maintain two types of books of accounts viz. It is also a important section in administrative department in performing the activities ofpurchasing. In this section there are two employees, one is purchase manager and another one ispurchase assistant. The purchase manager issues the purchase order from various section of thefactory. He estimates the cost purchase and accordingly he go for direct purchases or purchasesthrough purchase committee.Babasabpatilfreepptmba.com - 19 -
  20. 20. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”SOME SPECIFIC CONDITONAL TO PURCHASE MATERIAL: The material received or any reason what so ever will be returned to the suppliers at theirown cost. The material should be recently packed if any breakage, leakage it is the responsibilities ofthe 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 periodFUNCTIONS: • Purchasing materials • Calling quotation • Placing before meeting for decision • Passing bill to Account section for paymentSTRUCTURE PURCHASE OFFICER CLARKS ATTAINDERSBabasabpatilfreepptmba.com - 20 -
  21. 21. “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 ATTAINDERIn the sugar industry sugar is sold according to central govt. guidance & release. Marketing & advertising is not necessary in sugar industry. Any how customerrelationship 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 maintainanceSales of the sugar are done in two ways a) free sales b) levy salesa) Free sales:Babasabpatilfreepptmba.com - 21 -
  22. 22. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” Government allows the sugar factory to sale certain percentage of sugar by callingtender 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 ofthe govt5) 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 CASHERBabasabpatilfreepptmba.com - 22 -
  23. 23. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”CANE DEVELOPMENT DEPARTME CANE MANAGER OFFICE MANAGER CANE CANE PROCUREMENT MANAGER CANE DEV MANAGER CANE OFFICERS CANE OFFICERS FIELD ASSISTANT FIELD ASSISTANTObjectives 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 programBabasabpatilfreepptmba.com - 23 -
  24. 24. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”IN CANE DEVELOPMENT CANE SUGAR RECOVERY YEAR DATE DAYS DEVELOPMENT 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 10.60Babasabpatilfreepptmba.com - 24 -
  25. 25. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”6 )PRODUCTION DEPARTMENT: To utilize the installed capacity of 3500 in proper manner the following personality theduty 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 basedindustry. In addition, it plays a vital role in the organization for smooth going in every sugarindustries; Production department is divided in to two sections. a)Engineering department b)Manufacturing department a) Engineering Department.Babasabpatilfreepptmba.com - 25 -
  26. 26. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” STRUCTURE: CHIEF ENGINEER MECHANICAL ELECTRICAL WORKSHOP STORE SECTION SECTION SECTION CANE WEIGHMENT BOILER SECTION CANE POWER UNHOLDING GENERATION URANGMENTS CANE PREPARATION MILLINGBabasabpatilfreepptmba.com - 26 -
  27. 27. “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. MillingCane Weighment Arrangements: Cane weighment is totally computerized process. Hear the cane weightment is carriedthrough electronic platform called “weighs bridge”. This electronic platform is of two types. Onewith the capacity of 40 tons for lorry and tractors and other with a capacity of 10 tones for onlycart. Hear after weighing the cane a slip is provided so that particular farmer which has thedetails of total weight of the cane, total trips, timing, vehicle number, variety of sugarcane andother details. And after this when the vehicle comes back after unloading the sugar cane, emptyvehicle 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. Furtherunloading cane there are 2 unloaders with the help of sling attached instruments cane is loading onthe feeding table.Cane preparation: After feeding the sugar cane on feeding tables with the help of levelers which avoidoverloading 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 -
  28. 28. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Milling: After fibrizering the cane passing the prepared fiber cane through a set of mills carries onmilling weighted hot water is also added in the course of crushing for better extraction of juice.After crushing the juice is sent for further processPower 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]Babasabpatilfreepptmba.com - 28 -
  29. 29. “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 andgiven a code number. Bin card and other system are followed hear. These stores materials arenormally required for preventive maintenance during seasons and off seasons for servicing andoveralling 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 requiredBabasabpatilfreepptmba.com - 29 -
  30. 30. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Structure STORE KEEPER CLARKS TOOL ROOM DIESEL ROOM CLARK CLARK TOOL ROOM ATTAINDERS ATTAINDER CLARKS DAILY WAGE LABOURS ATTAINDERS Store section is also important section in the administrative department. All types ofmaterials are kept in this section. Which are required for the factory smooth running. The sectionworks day and night. Shift is changing every 8 hours. This section is maintained by the storeskeeper. 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 employeesworking in this section.Babasabpatilfreepptmba.com - 30 -
  31. 31. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”STORES ACCOUNT: After receiving the materials from suppliers quantity will be verified. The details of thematerials will be entered in to transport registered and approved memo will be sent to theconcerned departments for getting quality approval. They keep bin cards for each different itemsreceipt from the suppliers with details.DIESEL BANK: They issue diesel to the party against indents brought by the parties and issued is entered inthe daily issue register.TOOL ROOM: Tool room is personnel issue the materials to the workers on temporary loan and retainablebasis 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.Babasabpatilfreepptmba.com - 31 -
  32. 32. “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 DEPARTMENTManufacturing section is again divided in to 2 sub sections • Laboratory • GodownLABORATORY: Laboratory plays a significant role in sugar production. The Key activity of laboratory ischecking the content of sugar in the sugar cone and fixing the correct shape and size of sugar. Thela 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.Babasabpatilfreepptmba.com - 32 -
  33. 33. “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.Babasabpatilfreepptmba.com - 33 -
  34. 34. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Babasabpatilfreepptmba.com - 34 -
  35. 35. “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+12O2Babasabpatilfreepptmba.com - 35 -
  36. 36. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” CANE IMBITION WATER MILLING BAGASSE RAW JUICE EXHAUST STEAM CONDENSATE WATER SULPHURDIOXIDES + LIME SULPHURED JUICE EXHAUST STEAM CONDENSATE WATER CLEAR JUICE EXHAUST STEAM JUISE + MUD VAPOURS CONDENSATE WATER SYRUP SULPHURDIOXIDE GAS EXHAUST STEAM, VAPOURS VAPOURS, CONDENSATE WATER MASSCUITE STEAM OR SUPER HEATED WASH WATER FINAL MOLASSES SUGARBabasabpatilfreepptmba.com - 36 -
  37. 37. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”RAW JUICE: Before sending ra juice to process house it has to be weighted in order toexcise the chemical control and making material balance for efficient control of theprocess.JUCE HEATING: In this process the raw juce is heated and is converted to clear jucethe required temperature is 100c to 105c in the boiling house.SULPHURED JUCE: In this process the raw juce is added with time and sulphur gasand is mixes temperature 105c to 110c. and the sulphur juce received from in the frommilk will be coloured.CLARIFICATION: In this process through the vacuum filters the mud particles andthe juce filtration takes places.EVAPORATION: In the process the juce is boiled to make it solid. The solid from ofsugar is than again passed to sulphur tank.CENTRIFUGATION: In this the mass masscult is cured I,e sugar crystals separatedfrom the liquor in high speed centrifugal machine of around 1200/RPMGRADATION: Is the last process in the manufacturing of sugar. It collects the totallymixed sugar from the centrifugal section through happen and sugar passes from it eachelector sugar is lifted to mixer part from the grader part the sugar is separated by gradwise it has grades.BAGGING: The sugar is packed in 100kg, 50kg,& 25kg bags with latest with atechnology of bagging with the mechanized stitching.STORAGE: After it is sent to god own for storage through machines Factory hastotally 2 big Godowns with a capacity of 2.5 lakhs each.Babasabpatilfreepptmba.com - 37 -
  38. 38. “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 13godowns capacity 30000 bags.STRUCTURE: Godown Keeper Clerks AttenderVarieties of Sugar cane:1.COC671 {Early Maturity}2.CO8011 {Middle Maturity}3.CO86032 {Early Maturity}4.CO8021 {Early Maturity}5.CO94012 {Early Maturity}Babasabpatilfreepptmba.com - 38 -
  39. 39. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Civil section Structure CIVIL ENGINEER ASSISTANT ENGINEER OFFICIAL NON OFFICIAL HEAD CLARK 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.Babasabpatilfreepptmba.com - 39 -
  40. 40. “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 islocated in rannaagar, at timmapur village and is 16KM away from Mudhol. It is locatednear the bank of Ghtaprabha River, so the factory has obtained the premises for liftingWater from this river for factory use.THE INFRASTRUCTURE FACILITIES PROVIDED TO THE EMPLOYEES IN THEFACTORY LIKE: • Canteen and mess facility • Medical facility • Housing facility • Safety measures • Guest house facility • Contingencies • Insurance facility Etc;Babasabpatilfreepptmba.com - 40 -
  41. 41. “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 budgetarycontrol because it stimulates the co-operation of all concerns with the co-ordinates the variousactivities.3) Communication: It is necessary in an efficient organization that all people be informed about theobjectives, polices, programmers and performance. This is made possible through their Participantin the budgeting process. Budgets inform each manager of what others have agreed to do. Theyalso inform managers of the resources available objects and targets.Thus the budgeting system integrates key managerial functions as it links top management’splanning function with the function performed at all the levels in the managerial hierarchy. But theefficiency of the budget as a planning and control device depends upon the activity in which it isbeing used. A more accurate budget can be develop for those activities where direct relationshipbetween inputs and outputs. The basis for developing budgets and exercising control.Babasabpatilfreepptmba.com - 41 -
  42. 42. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”CONCEPT OF BUDGETING: One of the primary objects of cost accounting is to provide information to businessmanagement 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 adefined period of time, of the policy to be pursed during that period for the purpose of attaining agiven 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 nationalassociation of accountants (USA)”forecasting is a process of predicating or estimating a futurehappening”, Forecasting is an essential part of the budgeting process. Forecasting is estimatingfuture 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 itsprocedure.Babasabpatilfreepptmba.com - 42 -
  43. 43. “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 management.Babasabpatilfreepptmba.com - 43 -
  44. 44. “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.Babasabpatilfreepptmba.com - 44 -
  45. 45. “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 -
  46. 46. “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 salesbudget. All budgets, such as production budget, selling & distribution budget & other all affectedby 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 -
  47. 47. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”2) Production budget: A production budget is stated in physical units. Essentially the production budget is thesales budget adjusted for inventory changes as follows. Units produced= Budgeted Sales+ (Desired Closing Inventory of Finished Goods-BeginningInventory of Finished Goods.)3) Production cost budget: A production cost budgeted summaries the materials budget, lab our budgeted, the factorybudget, and may be expressed and analyzed by departments and or products. It is also known asmanufacturing budget.4) Direct material budget: This budget specifies the cost if direct materials used and the Cost of the direct materialspurchased. 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 theproduction budget to be achieved. It is generally preferable to prepare a separate direct laborbudget and to include indirect labor in the factory over head budget.Babasabpatilfreepptmba.com - 47 -
  48. 48. “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. Babasabpatilfreepptmba.com - 48 -
  49. 49. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” BUDGETED INCOME STATEMENT A budgeted income statement summaries all the individual Budgets i.e. sales budgeted, costof the goods sold budget, selling budget, and administrative expenses budget. This budgetdetermines income before taxes (If the tax rate is available, net income after taxes can also becomputed).A system of budgetary control installation in an organization is very much beneficialwhich may be result in proper planning & control of activates. It ultimately results in minimizingcosts and maximizing profits. If the company wants to prepare the budgets for future period of time, it is very much essentialthat company have to consider the past performance. Thus the past performance is treated as vitalbasis for the future period. Suppose in case of past performance is not available than the companyhas to follow the following process.A. DETERMINATION OF THE OBJECTIVES: The installation of budgetary control system needs to have proper objective i.e. for whatpurposes 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 budgetingorganization & procedures.Babasabpatilfreepptmba.com - 49 -
  50. 50. “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.Babasabpatilfreepptmba.com - 50 -
  51. 51. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”F. BUDGETED PROCEDURE: The procedure followed while designing and operating a budgetary control system dependsupon 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.Babasabpatilfreepptmba.com - 51 -
  52. 52. “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 expenditures.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 youre 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 youve tracked your actual spending for a month or two, analyze your spending to identify where you can comfortably make cuts.14. Once youve 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 goalsBabasabpatilfreepptmba.com - 52 -
  53. 53. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Tips: 1. Dont try to fit your expenses into somebody elses 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 RonaSugars is big organization. This finance & accounts is also big departments. But due to shortage oftraining 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 studyBabasabpatilfreepptmba.com - 53 -
  54. 54. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” DATA ANALYSIS AND INTERPETATIONBabasabpatilfreepptmba.com - 54 -
  55. 55. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR 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 5619.10Babasabpatilfreepptmba.com - 55 -
  56. 56. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”Comparisons of Actual expenses 2007-08 Actual 2008-09 ActualSl.N 2006-07 Actual exps Particulars At Rs. In Exps At At Rs. In Exps At Rs. o At Rs. In Lakhs At Rs.in Lakhs Lakhs Rs.in Lakhs Lakhs In Lakhs 1 Sugarcane purchased 7250.00 6162.81 5230.00 5230.00 4400.00 5616.18 2 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 Repairs and maintenance of 9 200.00 191679.06 300.00 3000.00 300.00 235.84 machinery10 Telegram and telephone charges 5.00 2655.46 4.00 40.00 3.00 2.9511 Bank commission 4.00 2960.78 4.00 ------- 1.50 0.74Babasabpatilfreepptmba.com - 56 -
  57. 57. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITHSUBSEQUENT YEARRECEIPTS 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 7355.98Babasabpatilfreepptmba.com - 57 -
  58. 58. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” RECEIPTS 10000 9000 8000 Sugar Sales RUPEES 7000 Sale of By Products 6000 5000 Dividend 4000 3000 Interest on Loans 2000 Loss 1000 0 At Rs. At Rs. In At Rs.in At Rs. In Lakhs Lakhs Lakhs In Lakhs 2005-2006 2006-2007 2007-2008 2008-2009 YEAR 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 7355.98Babasabpatilfreepptmba.com - 58 -
  59. 59. “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 Net Profit carry 1 Sugar Sales 6160.00 9487.50 54.00% ------- forward to C/B 2 Sale of By Products 877.21 1053.50 20.09% ------- 3 10.00 7.55 ------ 24.50% Dividend 4 Interest On Loans 3.00 1.44 ------ 52.00% 5 Loss 1370.89 1007.51 ------ 26.50% TOTAL 8421.10 11575.10 37.45% -------Babasabpatilfreepptmba.com - 59 -
  60. 60. “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 2005-2006 2006-2007 At Rs.in At in Increase DecreaseSl.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  Sugarcane purchased increased by 47.95% in the year 2006-2007 compared to 2005-2006Babasabpatilfreepptmba.com - 60 -
  61. 61. “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 2006-2007 2007-2008 At in Rs. In At Rs. In Increase Decrease Sl.No Particulars 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 ------ ------ ------ TOTAL 11557.50 8243.41 ------- 28.67%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 2006-2007Babasabpatilfreepptmba.com - 61 -
  62. 62. “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  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 2006-200Babasabpatilfreepptmba.com - 62 -
  63. 63. “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 1 Sugar Sales 7187.00 6440.00 ----- 10.40% Sale of By Products 1046.36 909.36 ------ 13.10% 2 3 Dividend 7.55 3.60 ------ 52.32% 4 Interest On Loans 2.00 3.02 33.78% ----- 5 Loss ------ ----- TOTAL 8243.41 735598000 ------ 10.77%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:-2008-2009Babasabpatilfreepptmba.com - 63 -
  64. 64. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” 2007-2008 2008-2009 Increase DecreaseSl.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 -
  65. 65. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS”• Interest on loans decreased by 39.8% in the year 2007-2008 compared to 2006-2007• 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 20007-2008Babasabpatilfreepptmba.com - 65 -
  66. 66. “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.Babasabpatilfreepptmba.com - 66 -
  67. 67. “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 effectivesBabasabpatilfreepptmba.com - 67 -
  68. 68. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” BIBOLOGRAPHY  Financial management by M.Y. Khan and P.K. Jain  Financial management by I.M. PandeyBabasabpatilfreepptmba.com - 68 -
  69. 69. “A STUDY ON BUDGETARY CONTROL at RANNA SUGARS” ANNEXUREBabasabpatilfreepptmba.com - 69 -

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