Professional Documents
Culture Documents
TABLE OF CONTENTS
1
S.NO
CHAPTER NO
CHAPTER -I
CHAPTER II
CHAPTER III
PAGE NUMBER
1-14
15-24
REVIEW OF LITERATURE:
-Essentials of budgetary control
-Requisites for a successful budgetary
control system
-Types of budgets
25-38
CHAPTER - IV
CHAPTER V
52-64
CHAPTER VI
CHARTS
65-71
CHAPTER -VII
ANNEXURES
72-77
CHAPTER - VIII
78-80
BIBLIOGRAPHY
39-51
81
CHAPTER-I
INTRODUCTION
INTRODUCTION:
It is well recognized that budget are among the essential tools of management of any organization unlike
other management aids, budgets are made use of practically by all functionaries in the organization.
Budgets not only reflect the plan of action for different levels of management but are also useful to
monitor various activates and initiate mid course corrective actions. Budgets just do not reduce the
managerial function to a mere formula but aids as a managerial tool.
Henceeffective use of this art as well science. Thus it needs continuous budget education and creation of
evaluation and performance through budgets. Budgets provide management summarized picture of the
results to be expected, also forms the proposed plan of operations. They enable the management to
determine whether the plan is satisfactory. Budgets serve as a guide to executives and departmental heads.
They measure performance since Budget Deviations reflect either the organization failure to achieve the
planned standards of performance or its ability to better them.
Thus budgeting is a means of obtaining the most productive and profitable use of the companies resources
through planning and control.
production, sales, purchase etc) of the organization with the result that the activities precede according to
the objective.
Budgets are means of communication. Ideas of the top management are given the shape of the
budget and are passed on the subordinates who are to give them the practical shape. As the activities of
various departmental heads are coordinated at the preparation of budget, it is helpful in developing a team
work which is very much needed for the very success of an organization. Thus, a budget is necessary to
plan for the future, to motivate the staff associated, to coordi9nate the activities of different levels. A
budget is an overall blue print of a comprehensive plan of action expressed in physical and financial terms;
it includes plan for each of the activity responsibility centers of the business and provides a link between
the physical and financial plans of various departments of a company. It is also a document to serve as
control for monitoring and review. The budget system should be such that it makes it imperative for
management to establish goals and objectives, define policies, develop programmers both long term and
short term, measure performance against the targets and in the process, revises the part of management. In
a way of budgetary control system has been increasing an enterprises profits, and a goals-achieving
machine for facilitating organizational coordination and planning while achieving the budgeted targets.
By identifying progress we are better informed regarding the effects of our actions and have a clear
understanding of the effect of any future action we take. Knowing how much is being spent each month
enables a manager to consider whether action needs to be taken to spend more or less in the future. This
process is only worthwhile if the budget is realistic. Analyzing variances against an unrealistic budget is
pointless.
However in a well runs organization the comparison between actual and budget is used as the basis for
deciding the appropriate action. This paper sets out how the analysis is used to maximum effect. The
process is really part of the normal control process.
budget cash figure. The original budget numbers will need to be changed to reflect the new circumstances
and future reporting should be against the revised budget (often called a reforecast or latest estimate.)
Action is required but it may not be within the area where the error was made.
AVOID: The Accounts figures are always different from ours so we ignore them and keep our records.
2) Errors in the arithmetic or the actual results
It is perfectly possible for the actual results to be reported wrongly. This includes the use of the wrong
category omission of costs; double counting of income etc. one well known way of staying within budget is
to throw away any invoices received from Suppliers, or charge them someone elses account code. This
sort of deliberate action makes nonsense of budgetary control and must be avoids. The corrective action
once this is discovered is to prevent it happening again. Improvements in management education and
control procedures are recommended.
One extra consideration is that in order to correct the error the cumulative results will need to be corrected.
This means either putting through a correction in the next period, which will then also be wrong, or
adjusting the past results to correct the error.
Failing to note that the correction can cause misleading results can lead to wrong decisions being made.
AVOID: The accounts figures are always different from ours so we ignore them and keep our own
records.
3) Reality is wrong.
Sometimes the actual results are useless as an indicator. A strike or natural disaster will have an impact on
results. This does not mean that the budget process in future should include an allowance for this
happening again. (However in large organizations it is normal to allow for the impact of a disaster centrally
as a contingency even if it is not budgeted at operating unit level.) If necessary, insurance should be taken
out. If business is disrupted for two weeks, then it is pointless to compare the remaining two weeks of the
month against a full months budget. Produce a realistic budget for only two weeks and compare against
that to establish true performance under normal circumstances.
7
AVOID: The variances are distorted because of ..So its not my fault.
4) Differences between budget assumptions and actual outcome
This is the key issue and the one which involves the use of variance analysis techniques. Remember that
all budgets contain errors in the assumption No one knows the future outcome for certain. The important
thing is not to apportion blame by looking backwards, but to look forwards and take action to improve the
future in the light of experience. The action to be take action to be taken depend s on circumstances.
However, punishing deviation from the budget is the best way of destroying the budget process.
Manages will spend up to budget, conceal data, make the actual fit the budget in order to avoid blame.
This is particularly true in large multi-national organizations. The emphasis must be on what can we do
about it, rather than why the results are different.
EXAMPLE:
PARTCULARS
BUDGET
8
TOTAL
SALES VOLUME
100
90
SALES VALUE
1000
990
VARIABLE COSTS
500
495
FIXED COSTS
200
210
PROFIT
300
285
The budget committee wishes to blame someone for the fact that profit is down by 15.
It is obvious who is to blame sales are below target and fixed costs have not been controlled.
ORIGINAL BUDGET
REVISED BUDGET
ACTUAL
SALES VOLUME
SALES VALUE
VARIABLE COSTS
100
1000
500
90
900
450
90
990
495
PARTICULARS
SALES VOLUME
SALES VALUE
VARIABLE COSTS
FIXED COSTS (LESS)
PROFIT
ORIGINAL
BUDGET
100
1000
500
200
300
REVISED BUDGET
ACTUAL
VARIANCES
90
900
450
200
250
90
990
495
210
285
90
(45)
(10)
35
The valid set of budget data is to compare against actual. The variance on sales can be due to price. This is
the SALES PRICE VARIANCE of Rs. 90.
The variable costs require further investigation.
Assume that the original budget was to use 2.50 meters of material for each sales unit and that each meter
was expected to cost Rs. 2.00. This gave a budget figure 100 X 2.50 X Rs.2.00=Rs.500.
The Actual result included a price of Rs. 2.75 per meter but only 2.00 meters were used per sales unit. This
gave an actual figure of 90 x 2.50 x Rs.2.00 = Rs. 450.
To identify the cause of the variance of Rs. 45, we need to separate the price impact from the usage
impact.
Price
We expected to pay Rs. 2.00 per meter; we did pay Rs. 2.75 per meter.
Each of the 180 meters we bought cost 0.75 extra .180 x (2.00-2.75) = Rs. (135) this is the MATERIALS
USAGE VARIANCE Rs. (135).
Usage
10
We expected to use 225 meters in total to make 90 units; we did use 180.
At the budget price of Rs. 2.00 we saved ..Rs.2.00 x (180-225) = Rs.90
This is the MATERIAL USAGE VARIANCE Rs.90.
On fixed costs we expected to spend Rs. 200 but we did spend Rs. 210.
The FIXED COST VARIANCE IS Rs. (10).
SUMMARISING THE VARIANCES
SALES VOLUME
(50)
SALES PRICE
90
MATERIALS PRICE
(135)
MATERIALS USAGE
90
FIXED COSTS
(10)
----------(15)
======
11
OBJECTIVES OF STUDY:
To describe the profile of the organization as a backdrop for undertaking a study of budgetary
control system.
To analyze the budgetary system in practice in Kesoram cement Industries Limited (hereafter
Kesoram) with particular reference to their objectives and phases of organizational and reappropriation.
In addition to the analysis of the conventional budgetary system in practice in Kesoram cement
Industries limited. The study aims at evaluation and modification to the budgetary system with
reference to the various types of budgets. The scope in the formulation of performance budget is
also studied
METHODOLOGY
SOURCES OF DATA:
A). SOURCES OF THE DATA
There are mainly two important sources through which the whole data is collected.
12
Primary data
The primary data of the topic is collected by personal interaction with the officials of the finance and
accounting department and also from annuals of the company. The financial data relating to the
organization has been collected for the 5 years
Secondary data
The data collected from the other sources.
2.
3.
4.
5.
Statically records.
6.
13
Estimates are used as basis for budget plan and estimates are based on available facts and best
managerial judgment
Budgetary control cannot reduce the managerial function to a formula. It is only a managerial
Efforts may therefore not be made to exceed the performance beyond the budgeted targets.
Frequent changes may be called for in budgets due to fast changing industrial climate.
In order that a system may be successful, adequate budget education should be imparted at least
through the formative period. Sufficient training programs should be arranged to make employees
gibe positive response to budgetary activities.
The study is the limited up to the date and information provided by Kesoram cement industry
Limited and its annual reports
14
CHAPTER-II
PROFILE OF THE ORGANIZATION
15
manufacturing cement
became increasingly attractive and the industry experienced substantial expansion. As the supply in
response to the 1982 partial decontrol was significant in March 1989, price and distribution control were
finally dispensed with .It was one of the first Major industries in the country to be so deregulated.
OVERVIEW OF THE INDUSTRY:
The word cement means any substance applied for sticking things. But cement is most vital and
important material for modem construction as a binding agent .In the ancient times ,clay ,bricks and
stones have been used for construction work.
The Romans were using a binding or a cementing material that would harden under water. The first
systematic effort was made by SMEATION who under took the erection of a new lighthouse in 1756.he
observed that the production Obtained by burning limestone was the best cementing material for work
under water.
After eighty
ground delay used
hardened
cement
years
branch
chemist
produced
Cement paste
Since
it a s Portland
A name that has ensured even Portland cement was list manufactured in USA in 1975 In
Of
however
domestic demand
1914
operations
indigenous
with a
production
16
fees
combined installed
for
difficulties
short
and
of
foreign
Trade during
the
Industry
by
1924
and
capacity
the
development of indigenous
In 1963 all the cement companies with the exception of SONE VALLEY PORTLAND
CEMENT
COMPANY LIMITED merged to form the ASSOCIATED CEMENT COMPANIES LIMITED. This has
more
facilitated
a cost reduction
capacity
of the
cement
producing
of 18 units that
3.8million
expansion
capacity
1982.
as
well as uniformly
in
in quality. By
to Pakistan
tones
by 1950-51. In
the three
decades
decade
And
the
installed
partition 5 of
total
installed
Annum . This
between
the
1947
is
1950-1980
the
capacity
increased to
the
capacity
generation was released with impetus given by the partial decontrol announced in
Several
units locked
up
project
for
expansion
of capacity and
modernization
which
DEFINITION OF CEMENT:
Cement
property
may is defined
which
have
the
of setting and hardening under water .The amount of silica which is present on each
crust are sufficient to combine with calcium oxide to form the corresponding
aluminates
CLASSIFICATION OF CEMENT:
Cement is of 3 types
1. Puzzolantic cement
2. Nature cement and
3. Portland cement
17
calcium
silicate and
Puzzolantic cement:
It consists of mixture of silicate of calcium and aluminum .it shows the hydraulic properties when it is in
the form of powder and being mixed with suitable proportions of suitable Proportion of lime
The rate of hardening is much slower and the comprehensive strength developed is about half of Portland
cement .it is found more resistant to the chemical
Natural cement:
This is nature occurring material
it is obtained
containing
from cement
rocks
these cement
rocks are
is half of it.
Portland cement:
This is of various kinds
1. ordinary Portland cement
2.
3.
4.
5.
6.
7.
8.
sulfate resisting
After the dealing of the industry in July 1991 it reacted positively to the policy changes
new
importing
cement
the
the volume
country
the
government
in India
of
production
started
exploring
black market
cement production
is only
increased
from a situation
due to high
in cement
in
cost
other
world average
the matters of
and
quality
of
in
exports
the
of
the
global
market
the
is not very
competitive Due to high power and full costs. in order to improve its position in
cement
industries
location organization
structures etc.
LOCATION
Kesoram cement industry is one of the leading manufacturer of cement in India it is a day process
cement plant the plant capacity is 8.25 lakh tones per annum .it is located at basanthnagar in
karimnagar
Basanthnagar is 8km
away
from the
Ramagundam
railway station linking madras to new Delhi. The chairman of the company is syt.B.K.Birla.
19
suspension-
preheated system was commissioned during the year of 1969 the second unit Was setup in year 1971
with a capacity of 2.1 tones per annum and the third unit with a capacity of 2.5lakh tons per annum
went on stream in the year 1978 the coal for this company is being supplied iron singareni
collories and the power is obtained from
APSEB the power demand
The plant layout is rational to begin with the limestone is rich in calcium carbonate a key factor that
influence
monitoring overseas the manufacturing process samples are sent regularly to the bureau of Indian
standards national council of constructions and Building material for certification of derived quality
norms
The company has vigorously undertaking different promotional measures their product
through different media which includes the use of newspapers ,magazines ,hoardings etc
Kesoram cement industry distinguished itself among all the cement factories in India by bagging
the
national productivity award consecutively for two years and the year 1985 -1987.the federation of
Andhra Pradesh chamber of commerce and industries also conferred
20
for the best Industrial promotion expansion efforts in the year 1981.kesoram also bagged FAPCCI
Awarded for best family planning effort in the state for the year 1987-1988.
One among the industrial giants in the country today serving the nation on the industrial
front kesoram industrials Ltd has a cheque red and
when only a textile mill under its banner 1924 it grew from Strength to spread and activities 10
newer fields like Rayan pulp Transport paper spun pipes refractivites types and other products
Looking to the wide gap between the demand and supply of a vital commonly cement Which plays UI
important
role in national building activity the government of India had de-licensed the cement
industry in the year 1966 with a view to attract private entrepreneurs to augment the cement industry
production kesoram rose to the occasion And divided to setup a few cement plants in the country
Kesoram
Karnataka, Tamilnadu, kerala, Maharastraha, and Gujarat. In AP sales depots are located in different
areas like karimnagar Warangal Nizambad Vijayawada and Nellore In other states it has opened around
10 depots.
21
it also bagged the may day award of the government of India For the best management and the Pandit
Jawaharlal Nehru
Pradesh
silver rolling trophy for the industrial productivity effort in the state of Andhra
by FAPCCI and also the Indira Gandhi memorial national award of the government of
1981
83
88
65
21
43
30
1983
108
85
61
25
40
28
1986
106
73
71
36
36
24
1989
210
82
70
45
4
27
1990
210
87
72
48
41
40
World ranking
1
2
3
4
5
6
Today in the cement industry is producing 58.3 million tones per annum indication surplus conditions
while its demand is 56.7 million tones lies per annum Now The cement market has become buyer
market which was
A selling market till 1970s and so the quality &brand taken an upper edge for cement marketing.
Today installed at the India cement industry is 771lakh tones But in India 106 Major plants
are producing 583lakh tones leaving the balance for exports.
INDIAS LARGEST CEMENT COMPANIES POST ACQUISITION
22
Company
Cement capacity
Cement % of
In TPA
Sales
Larsen& turbo
12.0
20
ACC
11.3
93
GRASIM
9.7
28
INDIAN CEMENT
6.6
92
GUJRATHI AMBHUJA
6.5
100
WEAKNESSES:
The per capita consumption of the cement in India is very low
The transport costs in India are very high
The cement industry is facing with acute power shortage and raw material problem
The industry is also facing major packaging problems
OPPORTUNITIES:
The industry has tremendous potential for growth in India
In near future cement is going
There are good prospects for export with cement export promotion council
The government polices
from the
The surplus levels are increasing as the production of the cement is much greater than the
consumption.
In the present scenario of stiff competition there is a declining trend of price
The performance of the smaller unit is badly hit by major takeovers
The crisis situation in south east Asian countries may create problem to the exports of the
industry.
24
CHAPTER-III
REVIEW OF LITERATUTRE
The management is efficient if it is able to accomplish the objectives of the enterprise It is effective when
it accomplish
the objectives with minimum effort and most in attain long-range efficiency and
systematic approach in facilitate effective management performance is profit planning and control or
budgeting .Budgeting is therefore an integral part historical combination of a goal setting machine
for increasing an enterprises profits and a goal achieving machine for facilitating generational
coordination and planning while achieving the budgeted gets
MEANING OF BUDGET:
It is a financial and quantitative statement prepared and approved or to a defined period of time of
policy to be pursued during that period purpose of attaining a given objective it may include income
expenditure and employment capital
In other words it is a pre-defined detailed plan of action development distributed as a guide operations
and as a partial basis for subsequent evolution of performance
PLANING OF BUDGETING:
The process of planning all flows of financial resources into within from an entity during some
specified future period it includes providing detailed allocation
figures will enable the management to out discrepancies and take remedial measures at a proper
time the budgetary control is a continuous process which helps in planning and coordination it
provides a method of control too .A budget is means and budgetary control is the end result.
In the words of J.A.scolt budgetary control is the system of management control and accounting in
which all operations are forecast so as possible planned ahead and actual results compared with the
forecast and the planned ones
budgeted performance.
performance
7. Revision of budgeted if it is felt that the budgets prepared are no longer relevant on account of
unforeseen developments
The primary objective of budgetary controls to help the management in systematic planning and
controlling the operations of the enterprises the primary objective can be met only if there is proper
communication and coordination amongst different organization thus the objectivities can be stated as:
1. Coordination:
Coordination is a managerial function under which all factors of production and all departmental
activities are departmental are balanced and integrated to achieve the objectivities of the organization
budgeting provides the basis for organization objectivities can be realized executives are forced to
think of the relationship between their
unconscious biases against other departments it also helps to identify weakness in the organization
structure.
2. Communication:
All people in the organization must know the objectivities polices and
performances of the organizations they must have a clear understanding of their part in the organization
goals this is made possible by ensuring their participation in the budgeting process
and
expected performance.
28
From the above definitions we can differentiated the three terms as budgets are the individual
objectivities of a department etc where as budgeting may be said to act of building budgets budgetary
control embraces all and in addition includes the science of
Planning the budgets to effect on overall management tool the business planning and control
which
comprises
the departmental
them so that there is a proper link between them He is empowered to scrutinize the budgets prepared
by different functional heads and to make changes in them if the situation so demands
The budget officer works as a coordinator among different departments he continuously monitors
the actual performance different departments steps to rectify the defiance if any he also informs the top
management about the performance of different departments
29
The budget officer will be able to carry out his work only if he is versant with the working of all the
departments
he must have technical knowledge of the business and should also process accounting
knowledge
BUDGET COMMITTEE:
A budget committee is formed to assist the budget officer. The heads all the important
departments are made members of this committee. The committee is responsible for preparation and
execution of budgets. The chambers of this committee put up the case of their respective departments to
help the committee to take collective decisions if necessary. The budget committees responsible for
reviewing the budgets prepared by various functional heads coordinate all the budgets and approve the final
budgets. The budget officer acts as a coordinate of this committee all the functional heads are entrusted
with the responsibility of ensuring proper implementation of their respective final departmental budgets.
BUDGET CENTERS:
A budget center is the part of the organization for which the budget is prepared. A budget creator
may be a department section of department or any other part of department ideally, the head of every center
should be a member of the budget committee. However it must be ensured that each budget center at least
has an indirect representation in the budget committee.
The establishment of budget centers is essential for covering all parts of the organization
becomes easy when different centers are established the budget centers are also necessary for cost
control purpose.
BUDGET MANUAL:
1. A budget manual is a document that spells out duties and responsible the various executives
conquered with it specifies among various functional areas A budget manual covers the following
matters.
2. A budget manual clarity defines the objectivities of budgetary control systems it also gives the
benefits and principles of this system.
30
3. the duties and responsibilities of various persons dealing with preparation and execution of
budgets are also given in the budget manual it enables the management
dealing with various aspects to budgets and provides clarity on their duties and responsibilities it
gives the information about the sanctioning authorities of various budgets the financial powers
of sanctioning authorities of various budgets the financial powers of different manages are given
in the manual for enabling the spending amount on various expenses
4. a dropper table for budgets including the sending of performance reports is drawn so that every
work starts in the and a systematic control is exercised
5. the specimen forms and number of copies to be lased fro ore oaring budget reports is also stated
budget centers involved should be clearly stated.
6. the length of various budget periods and control points is clearly given
7. The problem follow all in the centre system clearly stated.
8. A method of accounting to be used for various expenditures is also stated in the manual... A budget
manual helps the documentation the role of every employee his duties responsibilities the ways of
undertaking various tasks etc thus it also helps n reducing ambiguity at any point of time
BUDGET PERIOD:
A budget period is the length of time for which a budget is prepared upon a number of factors the choice of
a budget period depends upon the following considerations the type of budget (long\short).
The nature of demand for the products
The timing for the availability of the finance
The construction situation of the cycles
All the above mentioned factors are taken into account while fixing the period of budgets
The financial manager usually responsible for organizing this budget he must perform the
following functions.
To suggest changes.
To receive and review individual budget estimates.
To reconcile divergent with or without revisions.
To coordinate budgeting activities.
To approve budgets with or without revisions.
To scrutinize control reports later on
To scrutinize to budget reports later on.
To disseminate these guidelines.
After finalizing the budget proposal the budget committee subjects the final budget to the Board of
Directories or Budget Director for approval.
Budgets are too implemented by human beings. Their successful implementation will depend upon
the interest shown by the employees. All persons should be motivated to improve their working so that
budgeting is successful. A proper system of motivation is introduced for making is system a success.
TYPES OF BUDGETS.
Long term budgets:
The long-term budgets are the budgets prepared for a long period of five to years. They are concerned with
planning the operations of a firm over a considerably long period of time. The financial Controller
exclusively for top management usually prepares long-term budgets. These budgets are useful in terms of
physical units (i.e... quantities) or percentages, the accurate values may be difficult to forecast over such
long period. Initial expenditure, research and development budgets, etc, are examples long-term budgets.
Short term budgets.
Short term budgets are budgets prepared for a short period of one to two is. They are prepared for those
activities the trend in which cannot be seen easily over long periods. These budgets are very useful are very
useful in case of consumer goods industries such as sugar, cotton, textiles, etc. they are generally, prepared
in terms of physical units (i.e., Quantities) as well as monetary units (i.e., values...) Materials budget, cash
budget. Etc are examples of short-term budgets. They are useful to lower level of management for control
purpose.
Current budgets.
Current budgets are a budget, which is established for use over a short period of time and is related
to current conditions. Thus current budgets are essentially short term budgets adjusted to current (i.e.,
present or prevailing) conditions or circumstances. They are prepared, for a very short period. Say, a
quarter or a month. They relate to current activities of the budgets.
Interim budgets:
34
Interim budgets are budgets, which are prepared in between two budgets periods. These budgets may get
integrated with the budgets of the following period.
CLASSIFICATION OF BUDGETS ACCORDING TO CONTENT:
Budget may be classified into budgets in physical terms and into budgets in monetary terms.
A) Budgets in physical terms:
Budgets in physical terms are budgeted that budget in terms of quantities only. They do not include
corresponding rupee value. Long term budgets are usually in prepared in physical terms. Examples of
such budgets are production budget, materials budget, etc.
B) Budgets in monetary terms:
Budgets in monetary terms are budgets that budget in terms of quantities as well as their corresponding
rupee value. Sales budget, purchase budget, etc are examples of such budgets. Budgets such as cash budget
capital expenditure budget, etc that may not have physical quantities also from part of budgets in monetary
terms.
1. Operating Budgets.
35
These budgets relate to different activities or operations of a firm. The number of such budgets
depends upon the size and nature of the business, the commonly used operation budgets are:
i)
Sales Budgets
ii)
Purchase Budget
iii)
iv)
v)
vi)
vii)
The operating budget for a film may be constructed in terms of programmers or responsibility areas, and
hence may consist of:
A) Programmed Budget
B) Responsibility Budget
A) Programmed Budget:
It Consists of expected revenues and costs of various products or projects that are termed as the major
programmers of the firm, Such a budget can be prepared for each product line or project showing revenues,
Cost and the relative profitability of the various in locating areas where efforts may be required to reduce
COST5 ad increase revenues. They are so useful in determining imbalances and inadequacies in
programmers so at corrective action may be taken in future.
B) Responsibility Budget:
36
Here the operating of a firm is constructed in terms of responsibility areas. Such a budget shows the plan in
terms of persons for achieving them. It is used by the management as a control thus used by the
management as a control device to evaluate the performance of executives who are in charge of various
cost centers. Their performance is compared to the targets (Budgets), set for them and proper taken for
adverse results.
Responsibility areas may be classified under three brand categories:
I.
II.
Profit center
III.
Investment center
2) Financial budgets
Financial budgets are concerned with cash receipts and payments, working capital, financial position and
results of business. The commonly used financial budgets include Cash budget, Capital budget, and Income
statement budget, Statement of earnings budget, Budgeted balance sheet or position statement.
3) Master budget
The Master budget is the summary budget incorporating its functional budgets. All the operational
and financial budgets are integrated into the Master budget. The budget officer for the benefits of the toplevel management prepares this budget. This budget is used to coordinate the activities of various
functional departments. It is also used an effective control devices.
A) Fixed budget
According to ICMA London a fixed budget is a budget which is designed to remain unchanged
irrespective of the level of activity actually attained. It is based on a fixed volume of activity and shows
one volume of output and related cost. It is not adjusted according to the actual level of activity attained.
A fixed budget is useful only when the actual level of activity corresponds with the budgeted level
of activity. But this, generally, does not happen; as such a fixed budget is not useful for managerial
purposes.
B) Flexible variable sliding scale or control type budget:
According to ICMA, London a flexible budget is a budget which is designed to change in
accordance with the level of activity) actually attained. Thus, a flexible budget changes according to the
change in the level of activity. In other words it provides the budgeted costs at any level of activity.
Business activity cannot be accurately predicted on account of uncertainties of business
environment. A flexible budget contains several estimates for different assume circumstances instead of
just one estimate, it provides for automatic adjustments with changes in the volume of activity. Hence a
situations operating in an unpredictable environment.
38
CHAPTER-IV
40
To prepare annual budgets in such a manner those managers at various levels in organization carry
out periodical exercise in respect of each contact or responsible centre for physical planning and matching
resources broke up into monthly targets or cash flows.
To introduce and operate responsible for achievement of specified targets with the recourses
allocated for the purpose.
To bring about effective co-ordinate of all activities of the organization and
To gear up service divisions to meet effectively the requirements of project.
BUDGET PERIOD AND PHASING:
The budget period or annual begets should with the financial year. In October every year the budget
should drawn up for the ensuring the financial year in the form of Budget estimates financial year in the
form of Revised Estimates [R.E]...In addition the budgets are to be reviewed on monthly basis by project
review teams, in the light of actual expenditure and projections in the budget period. Budget should
indicate monthly phasing of expenditure and targets for the first and quarterly phasing for the second half
of the year. At the time of review of the budget estimates to frame revised estimates the quarterly phasing
should be broken up into monthly phasing.
While drawing up the actual budget in October every year, the long term capital budget for ongoing and
new schemes should be formulated as apart of exercise as preparation of annual plan. The long term capital
budget should indicate for a period of six years following the budget period of six years following the
budget period of six years following the budget period wise annual phasing of the capital expenditure and
physical schedules recourse based network.
BUDGET HEADS:
41
For uniform accounting, it is essential that costs are collected for each of the factory though this may
involve splitting up of payments against contracts which embrace more than one system. Allocation of the
cost as system wise affords a sound basis for cost accounting, inter-firm comparisons and provides valuable
inputs to the data bank. Budget provisions are related to project estimates and monitoring of actual
expenditure where as control variables for part control and instrumentation system. Factory piping which
includes pipelines, for ash water mains, compressed air system and civil works piping.
Auxiliary pumps for water treatment plant and civil works system. If there are, any contracts not
covered in the budget heads provision for such contracts should be shown against the appropriate system
by head by adding code number.
minutes of the meetings reasons for any variations in the case of budget heads exceeding 10% of the budget
estimates revised estimates or which ever is Rs.5 lakhs should be analyzed and report upon.
Quarterly review:
PRT should conduct a quarterly budgets review with a view to projecting anticipated expenditure during
the year against approved budget estimates/revised estimates. As time is essence of such review, only a
quick review of anticipated expenditure for individual budget heads involving provisions exceeding Rs.50
lakhs in each case should be made and reported in minutes to PRT. For this purpose, project budget should
furnish all the relevant data to project manager [project] and planning and system by the 10th, of the month
following the quarter project budget committee should review the actual expenditure and assess anticipated
expenditure contract co-ordination/engineers in charge. The assessments of anticipated expenditure should
be furnished by the project budget committee to General Manager [project] by the 30 th of the month
following the quarter under review.
BUDGET OF SERVICE DIVISION CORPORATE BUDGETS:
A review of budgets of service and corporate divisions should be conducted at quarterly intervals by
corporate budget committee[CS'C].For this purpose corporate accounts should report actual expenditure up
to the need of the quarter by the 10th of the month following quarter to corporate budget and budgetcoordination of the remaining period of the year should be sent to the corporate budget should put up a
consolidated report division wise and project wise to corporate budget committee[CBC] by the 15th of the
may, August, November and February every year.
The budget for operation and maintenance activities will be called performance budget operation. This
in effect means that all financial targets in the budget will be based on performance targets in physical
terms.
The current budgetary control system operation pays envisages generation and transmission line
projects as independents investment centres. It becomes applicable to a project in the year in which it plans
to commercialize its first generation unit. How ever, the budget infer expenses from the date of
synchronization to the date of commercial generation is to be taken case of in the capital budget of the
respective project similarly in the case of transmission line projects the system becomes applicable from
the year in which it plans to commissions its first line along with substation or the date commercial
generation of the first unit of generative project with which this line is associated, which ever is later. For
subsequent lines, the O&M will be prepared from the case generation of energisation.
The system investigates the preparation of operation and maintenance budget for each of the cost
centers as per the requirements of coasting systems.
The performance budget operation will consists of following budgets along with the supporting
schedules:
1. Budget balance sheet.
2. Budget profit and loss account.
3. Revenue budget.
In addition, separate budgets for revenue activities other than operation for research and
development consultancy contracts etc.
46
centre/cost centre. This final proposal needs to be submitted to corporate centre with in three weeks of
receiving approval for initial proposal.
The final proposal, after approval by board, will become the basis of monitoring performance for
cost centers and investment centers.
The frequency and extent review and monitoring will be done is under:
1. The monitoring of actual performance against budgeted target for investment center/profit center
on monthly basis and for cost centers on quarterly for remedial/corrective action.
2. The review of performance budget on quarterly basis to assess the anticipated profitability.
The first step in the preparation of performance budget, O&M is formulation of maintenance and
overhauling schedules for boiler and TO with generation, then considering the grid demand, the availability
or inputs and factory problems, if any the utilization of capacity will be worked out on month-month basis
for the budget period the gross generation targets can be worked and accordingly.
NET GENERATION:
The sales value will be determined from quantum of net generation [i.e., grass generation aux.
consumption].
CHEMICAL CONSUMPTION:
The chemicals are used by many cost centers by many cost centers for treatment of water. The
consumption of chemicals will be co-related with volume of water certain norms will have to be developed
for different type of chemicals and different type of treatments.
Based on these norms each of the cost centers will indicate consumptions of chemicals in
quantitative as well as financial terms the most centre wise requirement will be consolidated to arrive at
total chemicals consumption to be charged to profit and loss account.
EMPLOYEE COST:
The basis of employee cost will be the approved manpower budget effective of respective years of
budget period. The estimation of employee cost is to be done for each grade considering mid-point as the
scale as basis pay and after reading various allowances like "D.A., H.R.A., C.C.A" project allowance etc.
admissible in respective grades. This is to be worked 49 out or each of the budget periods based on existing
strength (at the time of estimation) in each grade and additions during each quarter (taking 70% satisfaction
for additions).
The provisions of LTC medical reimbursement, PF and other welfare expenses in previous years
are taken into account policies changes, if any the details of welfare expenses like liveries and uniforms,
safety expenses, accident compensation, games & sports, canteen subsidy etc. are to list out as per chart of
account the provisions for incentive, bonus and payments of one time nature are to be shown separately
based on total employee cost for executives, supervisors and non-supervisors and total man power in these
categories ,separates of cost per employee will be worked out for each of theses categories as under.
1. Salaries and allowance
2. Contribution of PF and other funds
3. Welfare expenses
The cost centre of employee cost will be worked out based on these rates separately for theses
executives, supervisors and non-supervisors. This will again be consolidated separately for operations,
49
maintenance and common [service] function. The employee cost of common functions will be appropriated
between construction and O&M budgets in ratio of capital expenditure and sales during respective years.
50
Normally, maintenance of equipment through contractors should be avoided. But in certain areas, if
the expertise and in house capability or sufficient man power is not available, maintenance jobs can be got
done through contractors. Such contracts will need to be listed out separately .If owner supply items are
covered in such contracts the cost of theses items will be included in the material cost.
Depreciation:
This is to be charged as per ES act from the year following the year in which assets have been
capitalized value and, rates of depreciation furnished by the site finance and account for different
categories of assets. Cost centre-wise depreciation will be added to arrive at total deprecation for the
investment centre.
51
CHAPTER-V
ANALYSIS AND INTERPRETATION
52
Particulars
Budget
Actual
Estimated
Amount(Rs.
Amount(Rs.
Crores)
Variance
Crores)
Sales
1
689
599
90
745
652
93
784
823
-39
Own consumption
116
128
-12
Total of (14)
2334
2202
132
Average intensives
98
91
Other income
51
43
Grand total(5+6+7)
2483
2336
147
Interpretation:
The data pertaining to the generation and consumption of cement at kesoram Industries Limited
have been obtained from the year 2008-09 and presented in Table-1.The aspect included are total
generation of cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and
line store respectively.
During the year 2008-09 the sales, fixed cost, variable cost, fuel price, consumption was decreased.
Sales decreased by 132 crores to the estimated budget.
During the year 2008-09 the average intensives are decreased by 7 crores., there income also
decreased by 8 crores respectively.
Finally, with regard to the result in revenue budget of kesoram cement industries limited, totally
decreased by 147 crores in the year 2008-09 respectively.
Kesoram Industries Limited Operational expenditure budget for the year 2008-09
53
Table-II
S.no
Particulars
Budget
Actual
Estimated
Amount(Rs.
Amount(Rs.
Crores)
Variance
Crores)
Variable cost
1
Raw material
400
423
23
Lime stone
430
450
20
Total of (1,2)
830
873
43
Operative
maintained
4
cost
Chemicals and
120
140
20
water
Repairs &
240
275
35
maintenance
6
Employee cost
290
335
45
Stationary &
55
70
15
10
8
12
10
2
2
723
842
119
11
charges
Deprecation
38
11
-27
12
Interest on
18
20
13
fixed capital
Totalof-3
Gland total
31
1746
-25
137
general
8
9
expenses
Rebate
Share of
operating
10
expenses
Total of(4..9)
Finance
56
1609
(3+10+13)
54
Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of kesoram cement
industries Limited in the year 2008-09.
In the year 2008-09 variable cost components, Raw material consumption 23 crores increased
and the lime stone consumption 20 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair & maintenance,
employee cost, stationary & general expenses rebate and share of other expenses in all are fluctuating
expenses of the year 2008-09.how ever the total operating maintenance costs are 119 crores increasing
respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total finance
Charges recording decreasing 25 crores in the year 2008-09 respectively.
Budget
Actual Amount(Rs.
Estimated
Crores)
Amount(Rs.
55
variance
Crores)
Sales
Fixed and
689
617
72
recovery
Variable cost
829
735
94
recovery
Fuel price
815
856
-41
adjustment
4
recovery
Own
110
132
-22
consumption
Total of
2443
2340
103
(14)
Average
93
86
intensives
Other income
49
38
11
Grand
2585
2464
121
total(5+6+7)
Interpretation:
The data pertaining to the generation and consumption of cement at kesoram Industries Limited have
been obtained
from the year 2009-10 and presented in Table-1.The aspect included are total generation
of cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and line store
respectively.
During the year 2009-10 the sales, fixed cost, variable cost, fuel price, consumption was decreased.
Sales consumption is deceased by 103 crores respectively.
During the year 2009-10 the average intensives are decreased by 7 crores and there income also
decreased 11 crores respectively.
56
Finally, with regard to the result in revenue budget of kesoram cement industries limited, totally
decreased by 121 crores in the year 2009-10 respectively.
Kesoram Industries Limited Operational expenditure budget for the year 2009-10
Table-II
S.no
Particulars
Budget
Actual
Estimated
Amount(Rs.
Amount(Rs.
Crores)
variance
Crores)
Variable cost
1
Raw material
419
449
30
Lime stone
420
465
45
Total of(1,2)
Operative maintained
839
914
75
cost
4
121
148
27
232
289
57
Employee cost
314
348
34
59
77
18
expenses
8
Rebate
11
13
Share of operating
10
745
885
140
expenses
10
Total of(4..9)
Finance charges
11
12
Deprecation
Interest on fixed capital
38
18
14
20
-24
2
13
Total of(11,12)
Grand total
56
1640
34
1833
-22
193
(3+10+13)
57
Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of kesoram cement
industries Limited in the year 2009-10.
In the year 2009-10 variable cost components, Raw material consumption 30 crores increased
and the lime stone consumption 45 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair &
maintainance,employee cost, stationary & general expenses rebate and share of other expenses in all are
fluctuating expenses of the year 2009-10.how ever the total operating maintenance costs are 140crores
increasing respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges decreasing by 22 crores in the year 2009-10 respectively.
Particulars
Budget
Actual
Estimated
Amount(Rs.
Amount(Rs.
Crores)
Variance
Crores)
1
Sales
Fixed and
721
611
recovery
58
110
Variable cost
815
729
86
recovery
Fuel price
810
823
-13
recovery
Own
121
131
-10
5
6
consumption
Total of (14)
Average
2467
97
2294
92
173
5
7
8
intensive
Other income
Grand
53
2617
48
2434
5
183
adjustment
total(5+6+7)
Interpretation:
The data pertaining to the generation and consumption of cement at kesoram Industries Limited
have been obtained from the year 2010-11 and presented in Table-1.The aspect included are total
generation of cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and
line store respectively.
During the year 2010-11 the sales, fixed cost, variable cost, fuel price, consumption was decreased.
Sales consumption is decreased by 173 crores respectively.
During the year 2010-11 the average intensives are decreased by 5 crores and there income also
decreased 5 crores respectively.
Finally, with regard to the result in revenue budget of kesoram cement industries limited, totally
decreased by 183 crores in the year 2010-11 respectively.
kesoram industries limited operational expenditure budget for the year 2010-11
Table-II
S.no
Particulars
Budget
Actual
Estimated
Amount(Rs.
59
Variance
Amount(Rs.
Crores)
Crores)
Variable cost
1
2
3
Raw material
Lime stone
Total o(1,2)
418
442
860
445
465
910
27
23
50
Operative
maintained cost
4
Chemicals and
128
150
22
water
Repairs &
265
296
31
maintenance
6
Employee cost
316
348
32
Stationary &
63
80
17
11
7
13
10
2
3
790
897
107
general expenses
8
9
Rebate
Share of
operating
10
expenses
Total of(49)
Finance charges
11
Deprecation
41
15
-26
12
Interest on fixed
17
19
13
capital
Total of(11,12)
58
34
-24
1841
133
Grand total
1708
(3+10+13)
Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of kesoram cement
industries Limited in the year 2010-11.
60
In the year 2010-11 variable cost components, Raw material consumption 27 crores increased
and the lime stone consumption 23 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair & maintenance,
employee cost, stationary & general expenses rebate and share of other expenses in all are fluctuating
expenses of the year 2010-11.how ever the total operating maintenance costs are increasing by 107
crores respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges recording decreasing by 24 crores in the year 2010-11 respectively.
Finally with regard to the operational expenditure budget of kesoram cement industries limited
the
total
profit
has
increased
by
133
crores
during
the
year
2010-11.
The overall budget results of kesoram cement industry is industries limited is earning more profits.
S.no Particulars
Budget
Actual
Estimated
Amount(Rs.
Amount(Rs.
Crores)
Variance
Crores)
1
Sales
Fixed and
724
618
106
recovery
Variable cost
840
740
100
recovery
Fuel price
820
863
-43
132
2516
148
2369
-16
147
adjustment
4
5
recovery
Own consumption
Total of (14)
61
Average
102
98
7
8
intensives
Other income
Grand
56
2674
49
2516
7
158
total(5+6+7)
Interpretation:
The data pertaining to the generation and consumption of cement at kesoram Industries Limited
have been obtained
from the year 2011-12 and presented in Table-1.The aspect included are total
generation of cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and
line store respectively.
During the year 2011-12 the sales, fixed cost, variable cost, fuel price, consumption was decreased.
Sales consumption is decreased by 147 crores respectively.
During the year 2011-12 the average intensives are decreased by 4 crores and, their income also
decreased 7 crores respectively.
Finally, with regard to the result in revenue budget of kesoram cement industries limited, totally
decreased by 158 crores in the year 2011-12 respectively
Budget
Actual amount
Estimated amount
(RS. Crores)
Variance
(Rs. Crores)
1
2
3
4
5
6
7
Variable cost
Raw material
Lime stone
Total of (1,2)
Operative maintained cost
Chemicals and water
Repairs & maintenance
Employee cost
Stationary & general expenses
420
450
870
450
470
920
30
20
50
130
280
320
65
150
300
350
80
20
20
30
15
62
8
9
10
11
12
13
Rebate
Share of operating expenses
Total of(4...9)
Finance charges
Deprecation
Interest on fixed capital
Total of(11,12)
Grand total (3+10+13)
11
8
814
13
10
903
2
2
89
42
18
60
1744
15
20
35
1858
-27
2
-25
114
Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of kesoram cement
industries Limited in the year 2011-12.
In the year 2011-12 variable cost components, Raw material consumption 30 crores increased
and the lime stone consumption 20 crores also increased.
In operating & maintainaces cost components, chemicals & water, repair &
maintainance,employee cost, stationary & general expenses rebate and share of other expenses in all are
fluctuating expenses of the year 2011-12.how ever the total operating maintenance costs are 89 crores
increasing respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance
charges
recording
decreasing
by
25
crores
in
the
year
2011-12
respectively
finally with regard to the operational expenditure budget of kesoram cement industries limited the total
profit has increased by 114 crores during the year 2011-12.
The overall budget results of kesoram cement industry is industries limited is earning more
profits.
63
CHAPTER-VI
CHARTS
64
SALES
Table showing total sales of Kesoram cement industry
2008-09
2009-10
2010-11
2011-12
BE
2334
2443
2467
2516
ACT
2202
2340
2294
2369
Interpretation
In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is accurate.
In the 2008-09 it shows a slight change between budgeted amount and actual. In the year 2011-12 budgeted
amount is more compared to actual. It shows that the quantity is more comparing to market. Selling of
cement product less than the estimates.
65
AVERAGE INTENSIVES
Table shown on average intensives of kesoram cement industry
2008-09
2009-10
2010-11
2011-12
BE
98
93
97
102
ACT
91
86
92
98
Interpretation
In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is accurate. In the
2008-09 it shows a slight change between budgeted amount and actual. In the year 2011-12 budgeted
amount is more compared to actual. It shows that the quantity is more comparing to market. Selling of
cement product less than the estimates.
66
OTHER INCOME
Table shown on other income of kesoram cement industry
2008-09
2009-10
2010-11
2011-12
BE
51
49
53
56
ACT
43
38
48
49
Interpretation
In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is accurate. In the
2008-09 it shows a slight change between budgeted amount and actual. In the year 2011-12 budgeted
amount is more compared to actual. It shows that the quantity is more comparing to market. Selling of
cement product less than the estimates.
67
VARIABLE COST
2008-09
2009-10
2010-11
2011-12
BE
830
839
860
870
ACT
873
914
910
920
Interpretation
FORM above table it can be under that the estimated amount and actual amount of kesoram cement
was recorded at raw materiel 830 during the year 2008-2009 it is increased to actual raw material 873 in the
year 2008-2009. It shows that there is an increased in budget to the actual. The highest amount in budget
was recorded in year 2011-2012..
68
2008-09
2009-10
2010-11
2011-12
BE
723
745
790
814
ACT
842
885
897
903
Interpretation:
1. Form the above table it can be understood that the budget of kesoram cement was recorded the
estimated value 723 during the year 2008-2009 and it is decreased to 842 during the year 2008-2009.
2. It shows that there is on decreased in the budgetary to the actual 2011-12.
3. The lowest investment in budgetary was recorded in year 2011-12.
69
FINANCE CHARGES
2008-09
2009-10
2010-11
2011-12
BE
56
56
58
60
ACT
31
34
34
35
Interpretation:
1. Form the above table it can be understood that the budgetary of kesoram cement was recorded at
56 value of estimation during the year 2008-2009.and it decreased to 31 of actual value in during year
2008-2009.
2. It shows that there is increase in the budgetary the lower value in the 2008-2009.
3. The lowest investment in budgetary was recorded in year 2011-2012.
70
CHAPTER - VII
ANNEXURES
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012:
71
PARTICULARS
RS:
RS:
activities
Net profit before tax
3,41,78,32,892
Depreciation
Adjustments for:
5, 76, 15,772
assets sold/disable
Loss on sale of long 3, 58,952
-----
term investments
Income from
long term
4,91,46,881
2,61,37,771
investment(other
trader)
Interest paid/payable 33, 50, 30,376
on loans etc
Interest receivable 2, 50, 55,563
9, 05, 21,426
on loans
Provision for doubtful
Debts/deposits in 3,82,15,119
--------
add
Provision for doubtful
Debts/deposits (net)
Debt/advance/depos
93, 92,067
55, 44,394
-----------
7,700
investment
written
off
Unrealized loss/gain on
Foreign
fluctuation
Provision for diminution
72
19, 16,075
in
Value of investment
---------------
1, 10, 09232
(1,21,69,75,334)
other (50, 17, 40, 397)
receivable
Trade payables
Cash
generated
(24,94,24,615)
2, 92, 62,288
(20,01,35,318)
from
operations
Direct taxes/ refund (93, 49, 80,671)
Net cash from 1,98,37,48,569
(20,01,35,318)
1,10,42,01,672
operating activities
Interpretation:
Observed from the above table that cash flow statement of kesoram cement industries limited in the year
2011-2012. In the year 2011-2012variable net profit before tax, depreciation, loss/profit on food asset
sold/disable, loss on sale of long term investments, interest paid/payable on loans etc have been increased.
In operating profit before working capital changes of inventory, trade receivable and trade payables of
the year 2011-2012. However the total operating profits is increasing respectively.
In cash generated from operations the direct taxes/refund has been included, the total cash generated from
operations increase in the year 2011-2012 respectively.
Finally with regard to the cash flow statement of kesoram cement industries limited the total cash flow
has been increased during the year 2011-2012. The overall budget results of kesoram cement is industries
limited is earning more cash flows.
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31stMARCH 2012
PARTICULARS
RS
73
Rs
Schedule Income
Sales
Less excise duty
Net sales
Other income
Expenditure
Finished goods
Manufacturing selling
Deprecation
Rescue of assets
Schedule
Interest
Profit before taxation
Provision for
Current taxation
Provision benefit tax
Profit after taxation
Profit available for
2010-2011
18,17,81,55,294
2,04,63,80,752
16,13,17,74,542
53, 74, 29,621
16,66,92,64,153
2011-2012
25,16,45,89,369
3,07,41,00,000
22,06,9660,339
49, 04, 06,410
22,58,00,66,749
7,61,14,89,922
7,40,51,67,576
59, 52, 33,509
1, 48,449,493
51, 57, 16,762
32, 75, 37,771
9,20,98,35,678
9,03,43,03,781
53, 05, 56,255
1, 21, 74,437
53, 30, 64,022
33,50,30,375
45,70,92,132
2,65,68,32,892
2, 56, 62,001
30, 00, 00,000
50, 86, 35,273
2,14,81,97,619
9.99%
58.08%
appropriation
Appropriation
Proposed dividend
Tax on proposed Dividend
In tend Dividend
Tax on in tend
Dividend
General resend
Balance carried to schedule2
Earnings per share
Interpretation:
Observed from the above table that the profit and loss account of kesoram cement industries limited in
the year 2011-2012 In the year 2011-2012.sales and income increased EXPENDITURE of finished goods,
manufacturing selling, and administration expenses are also increased, deprecation, less transfer from
capital, rescue of assets is decreased.
74
Profit before taxation increased from Rs.34, 00, 00,000 to 75, 00, 00,000 and profit after taxation also
increased from Rs.45, 70, 92,132 to 2,65,68,32,892 in the year 2010-2011 respectively.
Finally with regard to the profit and loss account of kesoram cement industries Limited the total profit have
been increased the year 2011-2012. The overall budget result of kesoram cement is industries limited is
earning profits.
FINDINGS:
There is a huge increase in INCOME of the company in 2011-2012, compared to 2010-2011.
Huge increase in earnings per share in 2011-2012, when compared to 2010-2011.
In the year 2007-08, 2010-11 and 2011-12 represents actual are less than budgeted so less purchases
made in every department. In the year 2008-09and 2009-10 actual is more than budgeted it shows
that greater importance given to purchases.
In the year 2006-07 civil expenses are at a very high range. Accruals are high compared to budget
because of construction of cold storage sector, cement plant and bore wells. In the year 2007-08
actual are less compared to budgeted because as the expenses are less. In the year 2011-12 it
incurred high volume of expenses than the budgeted because it incurred heavy expenses.
In the year 2011-12 budgeted amount is more compared to actual. It shows that the quantity is more
compared to market. Selling of cement products, less than the estimates.
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In the year 2011-2012 sales and income increased EXPENDITURE of finished goods,
manufacturing selling, and administration expenses are also increased, deprecation, less transfer
from capital, rescue of assets is decreased.
CHAPTER-VIII
SUGGESTIONS & CONCLUSIONS
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SUGGESTIONS
Planning has become the primary function of management most of the planning relates to
individual situations and individual proposals. Budgets are nothing but expressions largely in financial
terms, budgetary control has, therefore become and essential tool of management for controlling and
maximizing profits.
a. Continuous comparison of actual performance with budgeted performance.
b. The company has to maintain super quick assets in order to maintain sound liquidity.
c. A company has to recollect their own standing amount from the debtors regularly.
d. The company has to maintain funds for long-term investment.
e. The company has to monitory from liability position in regular intervals.
f. The company must be conscious about their working capital position.
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g. There is lot of pretension consistence demand the cement industry as a cement producer the
company can able to source, their funds throw more share holders funds.
h. Company is maintaining the inventories a part from current assets for the entire study period. To
show that excessive inventory level are not good for any organization and any company. Since
the company has it concentrate much more on inventory maintain.
i.
During study period there is negative working capital levels for the company so the company
must maintained enough current assets to keep working capital, figure positively.
CONCLUSIONS
a. Every organization has predetermined set of objectives and goals, but reaching their objectives and
goals by proper planning and executing of these plans economically.
b. The kesoram cement industries Limited objectives of planning and organizing promoting an
integrated development of Cement Company.
c. The corporation machine of kesoram cement industries is to make available and quickly cement in
increasingly small quantities, the company will spear head the process of accelerated development
of cement sector by expeditiously.
d. The organization needs the capable personalities as management makes the plans and implement of
these plans are expressed in terms of budget and budgetary control.
e. The kesoram cement Industries Limited has budget process in two stages. one is the capital
expenditure budget and another is operating maintenance budget, the capital expenditure budget
shows the list of capital projects selected for investment along with their estimated costs, operating
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maintenance budgets, the medical budgets are rarely used in the organization like long term
budgets, search & development budget for consultancy.
f. The Kesoram cement industries is to make efficient utilization of its resources and implementation
of sophisticated technology to produce available and quality cement and also creating ambience of
collective working of its employees.
BIBLIOGRAPHY
1. Prasanna Chandra, Financial Management: Theory and Practice, 7/e, 2008, Tata McGraw-Hill
Education.
2. I.M.Pandey, financial management: Principles and Practice 9/e, 2005, Vikas publishing.
3. R.K Sharma Shashi K Gupta, financial management: Principal and Management, 7/e, 2002, Kalyani
Publishers.
4. Dr.S N Maheshwari: management Accounting and financial control, 6/e, 1996, sultan chand and sons.
5. M.Y.Khan, and P.K Jain: Basic financial management, 3/e, 1982, Tata McGraw-Hill.
6.
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