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SUMMER INTERNSHIP REPORT ON

“PERFORMANCE APPRAISAL”

SUMMER INTERNSHIP REPORT ON “PERFORMANCE APPRAISAL” (JETKING CHANDIGARH) 1

(JETKING CHANDIGARH)

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DECLARATION

I hereby declare that the project report entitled “CAPITAL BUDGETING”submitted in fulfillment of the requirement for the degree of Bachelor of Business Administration is my original work and has not been submitted for the award ofany other degree at this university.

)

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ACKNOWLEDGEMENT

A project is a combination of views, ideas and suggestions and contribution of many people. The report is the opportunity to thank those who contributed towards its fulfillment.

Firstly I would like to thank the teachers of my institute for making me able to prepare this project. I would also like to thank my project guide I would like to thank my parents who give me encouragement and support.

I conclude by delivering my thanks to the almighty for giving me strength and for enabling me to understand this project and for everything else.

PREFACE

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BBA is a stepping stone to management career. In order to achieve practical, positive and concrete results, the classroom needs to be effectively fed to the realities of the situation exiting outside the classroom this is particle truth of the management. To develop healthy managerial and administrative skills in the potential managers it is necessary that the theoretical knowledge must be supplemented with expose of real environment. Actually it is very vital

for the management and it is very in the practical training that the measuring of management is itself realized. My project is PERFORMANCE APPRAISAL. If your company is like most companies today, you're working leaner. You're asking everyone on your staff to work harder and smarter, often without the support you may have had in the past. When you're asking so much of your employees, your managers may curb discipline measures for fear of losing a good worker. However, lean times are when employers most need employees to fulfill their job duties.

When your managers ask employees to work additional time or take on increased responsibilities, they often face resistance. When an employee’s pushes back against working harder, ask you, "Is the resistance a motivation problem or a discipline issue?"

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CHAPTER-1

INTRODUCTION

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INDUSTRY PROFILE

Indian sugar industry

India is the largest consumer & second largest producer of sugar in the world. The Indian sugar industry second large agro industry Located in the rural India. The Indian sugar has a turnover of rs.500 billion per annum & it contributes almost rs.22.5 billion to the central & state exchequer as tax, cess & excise duty every year. Indian sugar industry has been a focal point for a socio-economic development in the rural areas. About 50 million sugarcane farmers & a large number of agricultural labors are involved in sugarcane cultivation & ancillary activities, constituting 7.5 % of the rural population. Besides, the industry provides employment to about 2 million skilled/semi-skilled workers & others mostly from the rural areas. The industry not only generates power for its own requirement but surplus power for export to the grid based on by-product-bagasse. It also produces ethyl alcohol, which is used for industrial &portable uses,& can be used to manufacture ethanol, an ecology friendly &renewable fuel for blending with petrol.

The sugar industry in the country uses only sugarcane as input; hence Sugar Company’s have been established in large sugarcane growing states like Uttar Pradesh,

Maharashtra, Karnataka, Gujarat, and Tamil Nadu & Andhra Pradesh. In the year 2005- 06 these six states contributed more than 85 % of total sugar production in the country; Uttar Pradesh, Maharashtra & Karnataka together contribute more than 65 % of total production. The sugar industry is the second largest agro-based industry next to textiles in India. In India, sugarcane is the key raw material for the production of sugar. The sugar is extracted from two different raw materials sugarcane and beet; both produce identical refined sugar. Sugarcane is grown in semi-tropical region and accounts for around two- third of world sugar production.

Sugar is extracted from two raw materials beet root and sugarcane, both produce identical refined sugar. Sugar cane accounts for two-third of the raw material used for sugar production in the world and beet root one third balance of the world production.

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Key Characteristics of Sugar industry:

Capital intensive

Government regulated

Seasonal fluctuation in the industry(demand increases during festive season)

Raw materials constitute major cost

No proper substitutes

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COMPANY PROFILE

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BACKGROUND AND INCEPTION OF THE COMPANY:

The RAYATAR SAHAKARI SAKKRE KARKHANE NYIYAMIT (R.S.S.K.N) is a large scale Agro-based sugar industry. It covers under Co-operative sector. This factory was registered on 29 th July 1982 itself and government has given licensee for 2,500 TCD (Tone Capacity per day). In the same year government has given registration number is DSK/REG/182-83 dated: 27/07/1982. From that onwards it started issuing the shares to the public this issuing of shares comes to end in the year 1997. During these periods they purchased 200 acres of land at Timmapur (Mudhol Taluka) village at a cost of Rs.24 lakh. The 1 st trial crushing was taken in the month of May from 19/05/1999 to 10/06/1999. The performance of the factory in this period is as under.

Total Cane Crushed

123.28MT

Sugar produced

407989Qtls.

Recovery

12.50

The 1 st regular season starts in the yard of 1999-2000, from 25 th NOV 1999 to 28 th June 2000 (217 days). The progress achieved during this season is as follows:

The estimated project cost of R.S.S.K.N Sugar factory was Rs.47.250res as prepared by the Karnataka State Co-operative sugar Factories, Bangalore. And this report has been appraised by the IFCI, New Delhi.

 

10%

Member shares

Rs.4,725 corers

30%

Government

Rs.14,175 corers

 

Term loan from

   

60%

Financial Institutions

Rs.28,350 crores

 

Total

47,250 crores

 
 

Investment

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Member shares

10%

Financial

Institutions

60%

Government

30%

Rana Sugars Ltd.

Rana Sugars Ltd. a Rana Group company was founded in 1992 in collaboration with Punjab Agro Corporation. In year 2002 RSL has setup a Demonstration Co-generation Project to produce extra power from the Bagasse (by-product of sugar) and export it to Punjab State Electricity Board.

The Rana Group of Companies made a humble beginning in mid 80’s when Rana Gurjeet Singh, group’s Founder set-up Agro Boards Limited a Kraft Paper unit in Punjab. Success of this maiden venture was duly recognized by apex state owned industrial promotion corporations and this led to Rana Group’s ventures with different state owned corporations.

After the success of Agro Boards, Rana Group diversified into sugar manufacturing by setting its first unit at Buttar Sevian, Punjab in 1993.

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Over the years the group has established itself as a pioneer in the sugar industry. Today, the group is in sugar, alcohol, power generation and textile sector.

Sugar is very vital part of the rural economy and Rana Group supports the cause of the sugar farmers. The group is actively involved with the farming community in order to improve yields and quality of sugarcane.

Quality, consistency and relationships have propelled the group to become one of the most successful industrial houses in north India.

Rana Sugars Limited (RSL) is also a market leader in Punjab Medium Liquor (PML) sector. The company has portfolio of well established liquor brands. RSL is also a preferred bottler of several leading liquor brands.

The alcohol is produced from both Molasses and grain. Molasses is a by-product of sugar that has a certain amount of sugar content that is extracted through a technological process.

Identifying the vast opportunities in the ethanol sector, RSL has proposed to set up an ethanol plant that will use molasses as raw material from RSL’s existing facilities.

Products range of the company-RSL has one of the most diversified sugar facilities in the country. The following categories of sugar are manufactured:

Double Refined White Sulphurless Sugar Plantation White Sugar Raw Sugar Alcohol- Rana Sugars Limited (RSL) is also a market leader in Punjab Medium Liquor (PML) sector.

Date of Establishment Revenue Market Cap Corporate Address

Management Details

1991

112.233 ( USD in Millions ) 328.6351348 ( Rs. in Millions ) Sco 49-50,Sector 8- Madhya Marg Chandigarh- 160009, Punjab www.ranagroup.com

Chairperson - Rana Ranjit Singh MD - Rana Inder Pratap Singh

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Business Operation Background

Financials

Company Secretary Bankers Auditors

Directors - A S Sodhi, A S Sodhi, AS Sodhi, Baljit Singh, Balour Singh, Karan Pratap Singh, M P Singh, M P Singh, Manmohan K Raina, Manmohan K Raina. Sugar Rana Sugars Ltd. a Rana Group company was founded in 1992 in collaboration with Punjab AgroCorporation. In year 2002 RSL has setup a Demonstration Co-generation Project to produce extra power from the Bagasse (by-product of sugar) and export it to Punjab State Electricity Board.

The Rana Group of Companies made a humble beginning in mid 80’s when Rana Gurjeet Singh, Total Income - Rs. 5553.429 Million ( year ending Mar 2012) Net Profit - Rs. -204.448 Million ( year ending Mar 2012) Manmohan K Raina

Kansal Singla & Associates

Management
Management

Name

Designation

A S Sodhi

Director

Baljit Singh

Director

Balour Singh

Nominee Director

M P Singh

Nominee Director

Manmohan K Raina

Co. Secretary & Compl. Officer

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Manmohan K Raina

Secretary

Manoj Gupta

Chief Financial Officer

Rana Inder Pratap Singh

CEO

Rana Inder Pratap Singh

Managing Director

Rana Karan Pratap Singh

Director

Rana Ranjit Singh

Chairman

Rana Veer Pratap Singh

Director

S A S

Bajwa

Director

SWOT Analysis of the Industry:

The major strengths of the sugar industry in Swaziland lie in its high competitiveness, due to efficient cane production and technically efficient sugar production plants. This is further enhanced by premium markets to which the Swazi sugar is sold. So far, the exposure to the low-paying world market has been minimal, although it is poised to grow due to a reduction in the quota access to preferential markets and increased production of sugar.

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Strengths

High productivity in cane growing.

Technical efficiency in sugar production.

Access to preferential markets.

Support from the Government.

Good marketing infrastructure.

Limited exposure to the world market.

Weaknesses

Inefficient infrastructure and high transport costs.

Increasing costs of sugar production.

Increasing inefficiency of smallholder farmers in growing sugar.

Deficiencies and inefficiency of public utilities, with their related high costs.

Opportunities

Expanded access into the EU and regional preferential markets.

Diversification into other sugar-based products.

Supply of sugar markets previously supplied by Brazil and LDCs.

Temporary nature of problems facing smallholders.

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Threats

Preference erosion

EU-RSA TDCA

Expiry of COMESA derogation

Failure of smallholders to run farms efficiently

Low returns to smallholders, and reduced viability of irrigation projects

Price pressures on SACU market

INTRODUCTION TO THE TOPIC

Meaning and definition

Budgeting has come to be accepted as an efficient method of short-term planning and control. It is employed, no doubt, in large business houses, but even the small businesses are using it at least in some informal manner. Through the budgets, a business wants to know clearly as to what it proposes to do during an accounting period or a part thereof. The technique of budgeting is an important application of Management Accounting. Probably, the greatest aid to good management that has ever been devised is the use of budgets and budgetary control. It is a versatile tool and has helped managers cope with many problems including inflation.

Budget

Meaning-

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A budget is a document that translates plans into money - money that will need to be spent to get your planned activities done (expenditure) and money that will need to be generated to cover the costs of getting the work done (income). It is an estimate, or informed guess, about what you will need in monetary terms to do your work. On the other hand, if the budget is insufficient to complete a piece of work, additional funds should be availed so that the project or work is completed. Additional funds in supplementary estimates should be availed so long as satisfactory reasons are given. This will facilitate completion of projects on time . A budget is not:

Written in stone – where necessary, a budget can be changed, so long as you take steps to deal with the implications of the changes. So, for example, if you have budgeted for ten new computers but discover that you really need a generator, you could buy fewer computers and purchase the generator. Simply a record of last year’s expenditure, with an extra 15% added on to cover inflation. Every year is different. (See also the section on different budgeting techniques.) Organizations need to use the budgeting process to explore what is really needed to implement their plans.

Definition-

“ A financial and/or quantitative statement, prepared and approved prior to define period of time, of the policy to be pursued during that period for the purpose of attaining a given objective.”

--- The Chartered Institute of Management Accountants, England

“A budget is a predetermined statement of managerial policy during the given period which provides a standard for comparison with the results actually achieved.”

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ESSENTIALS OF BUDGET

---- Brown and Howard

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.

It is prepared for a definite future period.

The Budget is monetary and I or quantitative statement of policy.

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.

ADVANTAGES OF BUDGET

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Budget plays an important role in the effective use of resources and achieving

overall organizational goals. Budget compels and motivates management to make an early and timely study of its

problem. Budget provides a valuable means of controlling income and expenditure of a

business as it is a “plan for spreading” Budget provides a too through which managerial polices and goals are periodically

evaluated, tested and established as a guidelines for the entire organization. Budget help in directing capital and others resources into the most profitable channels.

CLASSIFICATION OF BUDGETS

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.

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

Sales budget:

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The most important budget, which all other budgets are contingent upon, is the sales budget. All budgets, such as production budget, selling & distribution budget & other all affected by the sales budgeted & are depended upon the revenue derived from sales.

Forecasting sales:

The three main factors that should be considered by management in forecasting sales:

Information concerning past performance.

Information about present condition with in the individual company & in each sales territory.

Production budget:

A production budget is stated in physical units. Essentially the production

budget is the sales budget adjusted for inventory changes as follows. Units produced= Budgeted Sales+ (Desired Closing Inventory of Finished Goods- Beginning Inventory of Finished Goods.)

Production cost budget:

A production cost budgeted summaries the materials budget, lab our budgeted, the factory budget, and may be expressed and analyzed by departments and or products. It is also known as manufacturing budget.

Direct material budget:

This budget specifies the cost if direct materials used and the Cost of the direct materials purchased.

Use of direct material budget

It helps the purchasing departments to prepare a schedule to ensure.

Direct labour budget:

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The labor budget estimates the labor, adequate in number and grades, to enable the production budget to be achieved. It is generally preferable to prepare a separate direct labor budget and to include indirect labor in the factory over head budget.

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.

Inventory budget:

 

An inventory budget can

be prepared

to find

out the values of direct

 

materials & finished goods inventory.

 
 

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.

Administrative expenses budget:

 

The Administrative expenses budget covers the administrative costs for non-manufacturing business activates.

BUDGETED INCOME STATEMENT

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A budgeted income statement summaries all the individual Budgets i.e. sales budgeted, cost of the goods sold budget, selling budget, and administrative expenses budget. This budget determines income before taxes (If the tax rate is available, net income after taxes can also be computed).A system of budgetary control installation in an organization is very much beneficial which may be result in proper planning & control of activates. It ultimately results in minimizing costs and maximizing profits. If the company wants to prepare the budgets for future period of time, it is very much essential that company have to consider the past performance. Thus the past performance is treated as vital basis for the future period. Suppose in case of past performance is not available than the company has to follow the following process.

Determination of the objectives:

The installation of budgetary control system needs to have proper objective i.e.

for what purposes it has been installed. The objective may be Minimizing costs or maximizing profits.

Co-ordination of activities of different departments.

Controlling the management functions.

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.

Budget manual:

The budget manual is a written document, which specifies the objective of the budgeting organization & procedures.

Reponsibility for budgeting:

Budget controller:

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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.

Budget committee:

Budget committees 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.

Fixation of the budgeted period:

Budgeted period:

employed”.

“The period for which a budget is prepared &

Budgeted procedure:

The procedure followed while designing and operating a budgetary control system depends upon the nature of the business.

Budgeting

Budgeting for a business is a process. It is the process of preparing a detailed statement of financial results that are expected for a given time period in the future. There are two keywords in that statement. The first keyword is "expected." Expected means something that is likely to happen. The second keyword is "future" which is a period in the time to come. So, budgeting is the process of preparing a detailed statement of financial results that are likely to happen in a period in a time to come.

Budget Planning

A budget is an important tool which co-ordinates various activities within an organization. Planning involves selecting objectives and action to achieve them. It is looking ahead and preparing for it, which links it to budgeting. Through planning, the

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organization is able to assess where it is supposed to be in terms of objectives and goals. This comes from the information system.

Good planning is characterized by clear objectives. It must be simple and comprehensive. The plan should be well balanced and flexible so as to incorporate changes in the resources and should be time bound. Properly covered plans tell what, when and how something is to be done. Sound planning mentions priorities and the planning control cycle. Since there are so many activities to be performed, it is imperative that they are listed in order of preference. These are decision packages.

Despite the differences in definitions and measures of performance among researchers, most observers would agree that organizations vary in how well they perform. Budgets co-ordinate the activities of the parts of the organization. Through this, the objectives of the organization harmonize with objectives of its parts. Budgets perform the function of control which is the art of comparing where you are (actual performance) to where you are supposed to be ((plans), so corrective action can be taken when there is a deviation from the target. It is necessary to ensure that plans as laid down in the budget are being achieved.

Bu dget Moni to r in g and Control

Budget control is the process of comparing actual results with planned results and reporting on the variations .The aspect of budget control is the most well known and it is frequently encountered by ordinary staff members. Control compares actual performance and budgeted, thus helps expenditure to be kept within agreed limits. Control is constituted by budget evaluation and monitoring. Budgetary control and standard costing systems are essential According to Drury (1995), budgetary monitoring and control process is a systematic and continuous process, which is characterized by the following stages:

Establishing targeted performance or level of activity for each department of the organization.

Communicating details of the budgetary policy.

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Monitoring of actual revenue or cost data. Continuous comparison of actual performance with the budgeted performance. Regular reporting of variances to the responsible officials. Asserting the reasons for the differences between actual and budgeted performances.

Organization for Budgetary Control

In order to introduce budgetary control system, the following are essential to be considered for a sound and efficient organization. The important aspects to be considered are:

  • 1. Organization Chart

  • 2. Budget Center

  • 3. Budget Officer

  • 4. Budget Committee

  • 5. Budget Manual

  • 6. Budget Period

  • 7. Key Factor

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From the above chart we can observe that the chairman of the company is the overall

From the above chart we can observe that the chairman of the company is the overall in charge of the functions of the Budgeted Committee. A Budget Officer is the convener of the budget committee, who helps in co-ordination.

Organization Chart:

For the purpose of effective budgetary control, it is imperative on the part of each entity to have definite "plan of organization." This plan of organization is embodied in the organization chart. The organization chart explaining clearly the position of each executive's authority and responsibility of the firm. All the functional heads are entrusted with the responsibility of ensuring proper implementation of their respective departmental budgets. An organization chart for budgetary control is given showing clearly the type of budgets to be prepared by the functional heads.

  • 1. Budget Center:

A Budget Center is defined by the terminology as "a section of the organization of an undertaking defined for the purpose of budgetary control." For effective

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budgetary control budget centre or departments should be established for each of which budget will be set with the help of the head of the department concerned.

  • 2. Budget Officer:

Budget Officer is usually some senior member of the accounting staff who Controls the budgetary process. He does not prepare the budget himself, but facilitates and co-ordinates the budgeting activity.

  • 3. Budget Committee:

Budget Committee comprising of the Managing Director, the Production Manager, Sales Manager and Accountant. The main objectives of this committee is to agree on all departmental budgets, normal standard hours and allocations. In small concerns, the Budget Officer may co-ordinate the work for preparation and implementation of budgets.

  • 4. Budget Manual:

A Budget Manual has been defined as "a document which set out the responsibilities of persons engaged in the routine of and the forms and records required for budgetary control." It contains all details regarding the plan and procedures for its execution. It also specifies the time table for budget preparation to approval, details about responsibility, cost centers, constitution and organization of budget committee, duties and responsibilities of budget officer.

  • 5. Budget Period:

A budget is always related to specified time period. The budget period is the length of time for which a budget is prepared and employed. The period may depend upon the type of budget. There is no specific period as such. However, for the sake of convenience, the budget period may be fixed depending upon the following factors:

Types of Business

Types of Budget

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Nature of the demand of the product

Length of trade cycle

Economic factors

6.

Key Factor

Key Factor is also called as "Limiting Factor" or Governing Factor. While preparing the budget, it is necessary to consider key factor for successful budgetary control. The influence of the Key Factor which dominates the business operations in order to ensure that the functional budgets are reasonably capable of fulfillment. The Key Factors include.

 

Raw materials may be in. short supply.

Non-availability of skilled labours.

Government restrictions.

Limited sales due to insufficient sales promotion.

Shortage of power.

Underutilization of plant capacity.

Shortage of efficient executives.

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OBJECTIVES OF THE STUDY

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OBJECTIVES OF THE STUDY

To study the existing budgetary controls method & practices at Ranna Sugars.

To compare the budgeted figures with actual figures.

To find out any loopholes in the budgetary control system.

To Forecast the future and plan to avoid losses but more positively to maximize the profits

To forecast technology development for identifying the requirement of inputs ..

For implementations of preferred technology option(s) identify critical inputs such as raw material, capital goods and human resources required and their availability, investments required to commercialize, and benefits/returns expected. Maximum possible quantification is required.

Action Plan for implementation of recommendations alongwith identification

of:

 

o

List of available technologies for Indian industry and

o

The agencies/groups/individuals for implementation.

Expected impact of recommendations, if implemented. The study to build upon

the earlier studies of TIFAC and other organizations, with a focus of details for

action.

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CHAPTER-2

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Research Methodology in a way is systematic representation of research or any other problem. It is a written game plan for conducting research. It tends to describe the step taken by a researcher in studying the research problem along with a logical background.

It tends to describe methodology for solution of the problem that has been taken for the purpose of study .This project focuses on the methodology for technique used for the collection, classification & tabulation of the data. This plan throws light on the research problem, the objective of the study & Limitation of the study. Therefore, In order to solve a problem, it is necessary to design a Research Methodology for problem as the same way differs from problem to problem.

The Project The Project undertaken during the summer training at “BUDGETING PLANNING”. The main aim of the study is to understand the “How budgeting is done in the Industry”.

Nature of the study

The nature of study is that it has an applied base. The statement indicates that results obtained from the study, inference drawn from the study can actually be applied practically and can be of great help to the customers to set the budget in industry more comprehensive way.

Scope of study

The report is based on the findings of mail survey and field visits and the information

collected through desk research. Mail survey and field visits were conducted to elicit the

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views of different categories of respondents such as sugar mills, equipment / know-how suppliers, R & D organizations, experts and manufacturers' associations.

TYPES OF RESEARCH

Research methodology is a way to systematic solve the Research Problem. It is a

procedure, which is following Red step by step to solve a particular research problem.

There are basically four types of researches:

Explorative research

Descriptive research

Diagnostic research

Hypothesis testing research

Explorative Research:

To gain familiarity with phenomenon or to achieve an insight into it.

Descriptive Research:

To poetry accurately the characteristics of the particular individual situation or a group.

Diagnostic Research:

To determine the frequency with which something occurs or with which it is associated with something else.

Hypothesis Testing Research:

To test a hypothesis of casual relationship between variables. The present project is Descriptive in nature. It is done to poetry accurately the characteristics of a particular individual situation or a group. The major purpose of the descriptive research is the description of the state of the affairs as it exits at resent. The main characteristics of this method are that the researcher has no control over the variables; he can only report what has happened or what is happening.

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RESEARCH PROCESS

Specifying the Research objective Preference the list of needed information Research Design Collection of Data Analysis
Specifying the Research objective
Preference the list of needed information
Research Design
Collection of Data
Analysis of Data
Report Writing

There are six steps of designing a research report:-

  • 1. Specifying the Research objective:

The relationship and the importance of the selected subset of technology to be broad

one to which it belongs.

  • 2. Preference the list of needed information:

The second step in designing the project work is the preparation of list of need

information. There is basic information on which the research project is to structure.

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In this project, the various information is headed in starting of the project. These are as follows:-

Q: What is the study about? Ans: Budgeting Planning.

  • Q. Why is the study being made?

Ans: To understand how to plan Budget.

  • Q. Where will the study be carried out?

Ans: Chandigarh.

  • Q. What type of data is required?

Ans: Primary as well as Secondary

  • Q. Where can the required data be found?

Ans: Primary Data through questionnaire from the customers and also with personal

meting & secondary data through magazines, newspaper etc.

  • 3. Designing the data collection process :

During the data collection process a questionnaire was made for the collection of the data from the customers personally. Because in the research project both primary as well as secondary data is required. So primary data was collected with the help of the questionnaires.

The following types of question were asked from the customers.

Dichotomous

A question with two possible answers says Yes or No.

Multiple Choices

A question with three or more answers.

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Selecting the sample size

Taking the sample of the study was not an easy task. The objective and the limitation of

the study have to be kept in mind before deciding about the sample type. In the sample type all levels of its customers have been covered. Basically the present customers as well as prospective customers were questioned with help of the questionnaire.

  • 5. Analysis of data:

After deciding upon the sample size & preparing the questionnaire, the fieldwork had to be carried out. In the field work the place had to be chosen where you want to do your study. The project survey work was carried out in the Bihar City.

  • 6. Analyzing the collected data & reporting the finding:

After the survey work was over & the data had been collected the analysis of the data

was must & its graphical representation was needed. So after the data collection process step by step analysis of data was done on the basis of the analysis.

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CHAPTER-3

DATA ANALYSIS AND INTERPETATION

36

1) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR

RECEIPTS

 

2006-

2008-

 

2007-2008

 

2007

Actual

Actual

2009

Actual

S.No

Particular

At Rs. In

Income

At Rs. In Lakhs

Income

At Rs. In

Income

 

Lakhs

Lakhs

Sugar Sales

  • 1 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

 

Dividend

  • 3 7.55

7550.46

7.55

360.50

3.60

1371.05

  • 4 14.40

Interest on Loans

1285.63

2.00

1003.17

3.02

5619.10

1) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR RECEIPTS 2006- 2008- 2007-2008 2007 Actual Actual

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Actua

Actual

2008-09

2006-07

Actual exp's

2007-08

Exp's At

At Rs.

Exp's

Sl.No

Particulars

At Rs. In

At Rs.in

At Rs. In

At Rs

Rs.in

In

Lakhs

Lakhs

Lakhs

In

Lakhs

Lakhs

Lakh

1

Sugarcane purchased

7250.00

6162.81

5230.00

5230.00

4400.00

5616.1

2

Reconstruction expenses

2.00

79.28

3.00

3.00

3.00

15.1

3

Vehicles management

8.00

114275.50

8.00

80.00

12.00

108,0

4

Interest on loan

1800.00

756040.98

1800.00

18000.00

1600.00

8268.5

5

Salary to staff

264.00

48219.82

264.00

18000.00

338.00

70.4

6

Auditors fees

2.00

1874.94

2.50

2.50

3.00

2.7

7

Rent and taxes

8.00

18723.36

20.00

200.00

20.00

15.9

8

Insurance

10.00

51.71

10.00

100.00

10.00

0.1

Repairs and maintenance of

9

machinery

200.00

191679.06

300.00

3000.00

300.00

235.8

Telegram and telephone

10

charges

5.00

2655.46

4.00

40.00

3.00

2.9

11

Bank commission

4.00

2960.78

4.00

-------

1.50

0.7

Comparisons of Actual expens

38

2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR RECEIPTS 2005- 2006 2006-2007 2007-2008 2008-2009 At

2) COMPARISION OF PREVIOUS BUDGETED FIGURES WITH SUBSEQUENT YEAR

RECEIPTS

   

2005-

     

2006

2006-2007

2007-2008

2008-2009

At Rs. In

At Rs. In

At Rs.in

At Rs. In

S.No

Particulars

Lakhs

Lakhs

Lakhs

Lakhs

  • 1 Sugar Sales

6160.00

9487.50

7187.50

6440.00

  • 2 Sale of By Products

877.21

1053.50

1046.36

909.36

  • 3 Dividend

10.00

7.55

7.55

3.60

  • 4 Interest on Loans

3.00

1,44

2.00

3.02

  • 5 Loss

1370.89

1007.51

-------

-------

 

TOTAL

8421.10

11557.50

8243.41

7355.98

39

PAYMENTS 2005-2006 2006-2007 2007-2008 2008-2009 Amt Rs. In Am Rs. In Am Rs.IN Amt Rs. S.No

PAYMENTS

 

2005-2006

2006-2007

2007-2008

2008-2009

Amt Rs. In

Am Rs. In

Am Rs.IN

Amt Rs.

 

S.No

Particulars

Lakhs

Lakhs

Lakhs

in Lakhs

  • 1 Sugarcane purchased

4900.00

7250.00

5230.00

4400.00

  • 2 Reconstruction expenses

10.10

2.00

3.00

3.00

  • 3 Vehicles management

6.00

8.00

8.0

12.00

  • 4 Interest on loan

1400.00

1800.00

1800.00

1600.00

  • 5 Salary to staff

250.00

264.00

264.00

338.00

  • 6 Auditors fees

3.00

2.00

2.50

3.0

  • 7 Rent and taxes

6.00

8.00

20.00

20.00

  • 8 Insurance

10.00

10.00

10.00

10.00

 

Repairs and maintenance of

 
  • 9 machinery

 

300.00

300.00

300.00

  • 10 Telegram and telephone charges

4.00

5.00

4.00

3.0

  • 11 Bank commission

1.75

4.00

4.00

1.50

  • 12 Other expenses

1831.00

1904.00

442.50

418.50

  • 13 Net Profit carry forward to C/B

 

155.41

246.98

 

TOTAL

8421.10

11557.50

8243.41

7355.98

40

41

41

A) 2006-07 Receipts.

 

2005-2006

2006-2007

 

Increase

Decrease

S.No

Particulars

At Rs. In

At Rs. in

 

In %

In%

 

Lakhs

Lakhs

1

Sugar Sales

6160.00

9487.50

54.00%

-------

2

Sale of By Products

877.21

1053.50

20.09%

-------

3

Dividend

10.00

7.55

------

24.50%

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%

-------

A) 2006-07 Receipts. 2005-2006 2006-2007 Increase Decrease S.No Particulars At Rs. In At Rs. in In

42

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

43

PAYMENTS:-2006-2007

   

2005-

     

2006

2006-2007

At Rs.in

At in

Increase

Decrease

S.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

------

-------

 

Repairs and maintenance of

  • 9 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

2005-2006

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

45

 

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 2006-2007

46

PAYMENT:2007-2008

   

2006-

     

2007

2007-2008

At Rs. In

At Rs. In

Increase

Decrease

S.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

------

------

 

Repairs and maintenance of

  • 9 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 2006-200

47

C)2008-2009 Receipts

   

2007-

     

2008-2009

2008

Increase

Decrease

S.No

Particulars

At Rs. In

At Rs. In Lakhs

%

%

Lakhs

  • 1 Sugar Sales

7187.00

6440.00

-----

10.40%

Sale of By Products
2

1046.36

909.36

------

13.10%

  • 3 Dividend

7.55

3.60

------

52.32%

  • 4 Interest On Loans

2.00

3.02

33.78%

-----

 
  • 5 Loss

------

-----

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

48

PAYMENTS:-2008-2009

 

2007-2008

2008-2009

 

Increase

Decrease

S.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%

 

Telegram and telephone

  • 10 charges

4.50

3.00

------

33.33%

  • 11 Bank commission

4.00

1.50

------

63%

  • 12 Other expenses

442.50

418.50

-----

5.00%

 

Net Profit carry forward to

  • 13 C/B

155.41

246.98

58.92%

----

TOTAL

8243.41

7355.98

------

11%

INTREPRETATION

Sugarcane consumption is decreased by 16%in the year 2008-2009

compared to 2007-2008 Vehicles 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

49

Chapter-4

FINDING

AND

SUGGESTION

50

FINDINGS:

In Rana 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 2010-2011

Interest on loans decreased by 39.8% in the year 2007-2008 compared to 2011-

2012

Sugarcane purchased increased by 47.95% in the year 2011-2012 compared to

2010

– 2011

Sugar purchased decrease by 27.87% in the year 2012-2013 compared to

2011- 2012 Vehicles management cost’s are increased by 50% in the year 2013-2014

compared to 20012-2013 Sugarcane consumption is decreased by 16%in the year 2013-2014 compared to

2012-2013

51

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.

Rana 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. Rana 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.

52

CONCLUSION

From the study it can be concluded that

budgetary control is treated as one of the

better techniques for minimizing cost and maximizing profit in Rana Sugars. Budgetary control technique plays important role in the profit making or smooth running of the company.

It co ordinates all the departments like Finance, Marketing, Production in the company. It makes the decentralization of authority in the organization which helps organization goal with in stipulated period of time. Budgetary control acts as safety for an organization because it helps to identify business risk and necessary steps can be taken to avoid the risk.

Budgetary control techniques help to know how the available monetary resources can be utilized effectively. This technique focus on efficiency in the allocation of resources in particular time. As the finance department is the soul of any organization. Budgetary control helps the organization by making finance department effectives .

53

BIBLIOGRAPHY

54

ANNEXURE

56

BALANCE SHEET OF RANA SUGAR LIMITED

 

(Rs Crore)

 

Mar' 05

Mar' 06

Mar ' 07

Mar ' 08

Mar ' 09

Sources of funds Owner's fund Equity share capital

76.59

76.59

153.54

153.54

153.54

Share application money

9.57

9.57

-

-

9.57

Preference share capital

41.09

41.09

41.09

41.09

41.09

Reserves & surplus Loan funds

89.77

132.62

66.83

61.42

81.87

Secured loans

411.04

345.32

557.76

530.85

554.31

Unsecured loans

63.59

37.73

87.41

74.66

57.45

Total Uses of funds Fixed assets

691.65

642.92

906.64

861.57

897.83

Gross block

562.63

324.18

668.44

661.17

640.46

Less : revaluation reserve

-

-

-

-

-

Less : accumulated depreciation

77.88

55.04

214.36

181.89

151.03

Net block

484.75

269.14

454.08

479.28

489.44

Capital work-in-progress

85.00

294.02

39.56

24.51

34.09

Investments Net current assets

-

-

0.09

0.09

1.29

Current assets, loans & advances

261.37

146.22

755.36

683.20

545.01

Less : current liabilities & provisions

139.47

66.79

342.45

325.51

172.00

Total net current assets

121.90

79.43

412.91

357.69

373.02

Miscellaneous expenses not written

-

0.32

-

-

-

Total

691.65

642.92

906.64

861.57

897.83

Notes:

-

-

-

-

1.29

Book value of unquoted investments Market value of quoted investments

-

-

0.11

-

-

Contingent liabilities

58.04

97.47

8.75

0.08

2.39

57

Mar' 05

Mar' 06

Mar ' 07

Mar ' 08

Mar ' 09

Number of equity sharesoutstanding (Lacs)

766.18

766.18

1535.68

1535.68

1535.68

PROFIT & LOSS ACCOUNT OF RANA SUGAR LIMITED

 

(Rs Crore)

Mar' 05

Mar' 06

Mar ' 07

Mar ' 08

Mar ' 09

Income Operating income Expenses

199.87

233.19

123.26

24.72

18.14

6.64

18.48

-

191.24

8.63

1.99

10.63

44.83

23.28

0.32

-57.80

-9.64

-48.16

10.19

-4.89

-42.85

-22.23

-

-

-

159.38

21.02

14.60

7.16

9.10

-

211.25

21.94

10.39

32.33

23.02

15.69

1.13

-7.51

-0.84

-6.67

11.61

0.18

5.12

34.26

-

-

-

703.68

550.78

776.51

Material consumed

513.97

387.23

650.55

Manufacturing expenses

13.84

27.69

21.72

Personnel expenses

27.73

25.39

23.74

Selling expenses

-

-

11.65

Adminstrative expenses

36.60

22.12

13.29

Expenses capitalised

-

-

-

Cost of sales

592.14

462.42

720.94

Operating profit

111.55

88.36

55.57

Other recurring income

-0.07

1.51

3.96

Adjusted PBDIT

111.47

89.87

59.53

Financial expenses

72.51

77.98

64.23

Depreciation

32.92

32.22

31.67

Other write offs

-

-

-

Adjusted PBT

6.05

-20.33

-36.38

Tax charges

0.04

0.02

-2.17

Adjusted PAT

6.01

-20.36

-34.21

Non recurring items

-0.60

-0.09

-4.03

Other non cash adjustments

-

-

1.48

Reported net profit

5.41

-20.44

-36.76

Earnigs before appropriation

-34.66

-40.07

-19.62

Equity dividend

-

-

-

Preference dividend

-

-

-

Dividend tax

-

-

-

58

 

Mar' 05

Mar' 06

Mar ' 07

Mar ' 08

Mar ' 09

Retained earnings

-22.23

34.26

-34.66

-40.07

-19.62

CASH FLOW OF RANA SUGAR LIMITED

 

(Rs Crore)

 

Mar' 05

Mar' 06

Mar ' 07

Mar ' 08

Mar ' 09

Profit before tax

-47.61

-9.54

6.05

-20.33

-39.46

Net cashflow-operating activity

-13.50

1.50

54.31

69.75

-1.68

Net cash used in investing activity

-29.62

-375.11

-23.56

-21.18

-5.48

Netcash used in fin. activity

49.33

365.30

-32.85

-45.05

-35.36

Net inc/dec in cash and equivlnt

6.21

-8.31

-2.10

3.52

-42.51

Cash and equivalnt begin of year

4.72

13.03

22.12

18.60

61.04

Cash and equivalnt end of year

10.92

4.72

20.03

22.12

18.53

59