Budgetory control in“ushodaya degree college.”.

The establishment of budgets relating the responsibilities of executives to the

requirements of a policy, and the continuous comparison of actual results with budgeted

results, either to secure by individual action the objective of that policy, or to provide a

basis for its revision. Budget is a formal statement of the financial resources set aside for

executing specific activities in a given period of time. It helps to coordinate the activities

of the organization.

A budget is a quantitative expression of a plan of action relating to the

forthcoming budget period. It represents a written operational plan of management for

the budget period.” A plan expressed in money. It is prepared and approved prior to the

budget period and may show income, expenditure, and the capital to be employed, may

be drawn up showing incremental effects on former budgeted or actual figures, or be

compiled by zero based budgeting”. Budget and Budgetary control. The terms budget and

budgetary control are often used interchangeable to refer to a system of managerial

control. Budgetary control implies the use of a comprehensive system of budgeting to aid

management in carrying out its functions like planning, co-ordination and control.

BUDGET:

According to Institute of Chartered Management Accountants (ICMA) England “A plan

qualified in monetary term prepared and approved prior to a defined period of time

usually showing planned income to be generated and or to be incurred during that period

and the capital to be employed to attain a given objective”.

BUDGETORY CONTROL:

The Chartered Institute of Management Accountants (CIMA) London defines

budgetary control as establishment budget relating to the responsibility of executives to

the requirement policy and the continuous comparison of actuals with budgeted results

either to secure individuals action the objective of policy or to provide a basic for its

revision.

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A budget is the monetary and quantitative expressions of business plans and

policies to be pursued in the future period of time the term budgeting is used for

preparing budgets and other procedures for planning co-ordination and control of

business enterprise. Budgetary control is the process of determining various budgeted

figures for the enterprises for the future period and then comparing the budgeted figures

with the actual performance for calculating variations, if any first of all budgets are

prepared and then actual results are recorded.

NEED OF THE STUDY

1. To know about the budget and budgetary control of a “USHODAYA DEGREE

COLLEGE.”.

2. To know about the status of a company by different financial Budgetary policies

in the year 2009 to 2013.

3. To know about the present scenario of Manufacturing companies Investment

estimation that are existed in the market.

4. Tto know about the present impact of budgetary control on the Financial position

of the company.

5. To know about the fast performance to based on future Estimation of the

budgetary control of the techniques.

SCOPE OF THE STUDY

The scope of the study limited to collecting the data published in the reports of

the company and opinions of the employees of the organization with reference to the

objective stated above and theoretical framework of the data. With a view to suggest

solutions to various problems relating to budget and budgetary control.

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OBJECTIVE OF THE STUDY

1. To provide the material frame work of budget and budgetary control in 2009-13.

2. To describe the profit of the organization as a backdrop for undertaking a study of

budgetary control system.

3. To analyze the budgetary system in practice in USHODAYA DEGREE

COLLEGE with particular reference to their objectives and phases of

organizational and re-appropriation.

4. In addition to the analysis of the conventional budgetary system in practice in

USHODAYA DEGREE COLLEGE. The study aims at evaluation and

modification to the current budgetary system with reference to the various types

of budgets. The scope in the formulation of performance budget is also studied.

5. To study the budgeted estimates and accruals of the revenue expenditure and

revenue receipts.

6. To study the variations of the accruals from the budgeted estimates.

7. To study the working of the financial department at USHODAYA DEGREE

COLLEGE.

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METHODOLOGY OF THE STUDY

Research is the systematic investigation of fact that seeks to establish relationship

between two types.

PRIMARY DATA:

Officers of accounts sections.

Executives and staff of financial and accounts department.

Meeting with concerned people.

Personal observation.

SECONDARY DATA:

Annual reports of USHODAYA DEGREE COLLEGE. Financial

management text books.

Printed Materials.

Journals and magazines

News papers.

LIMITATIONS

1. The study is purely based on the information provided by the company and the

data is collected from the reports, annual reports, and magazines of the company.

2. Estimates are used as basis for budget plan and estimates are based mostly on

available facts and best managerial judgment

3. Budgetary control cannot reduce the managerial function to a formula. It is only a

managerial.

4. Tool which increase effectiveness of managerial control.

5. The use of budget may be to restricted use of resources. Budgets an often taken as

limits.

6. Efforts may therefore not be made to exceed the performance beyond the

budgeted targets.

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7. Frequent changes may be called for in budgets due to first changing industrial

climate.

8. In order that a system may be successful, adequate budgets education should be

imparted at least through the formative period. Sufficient training programs

should be arranged to make employees give positive response to budgetary

activities.

9. To study is restricted to USHODAYA DEGREE COLLEGE.

10. To study is restricted to limited period i.e 2009-13.

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REVIEW OF LITERATURE

BUDGET:

Budget is essential in every walk of our life – national, domestic and Business. A

budget is prepared to have effective utilization of funds and for the realization of

objective as efficiently as possible. Budgeting is a powerful tool to the management for

performing its functions i.e., formulation plans, coordination activities and controlling

operations etc., efficiently. For efficient and effective management planning and control

are tow highly essential functions. Budget and budgetary control provide a set of basic

techniques for planning and control.

A budget fixes a target in terms of rupees or quantities against which the actual

performance is measured. A budget is closely related to both the management function as

well as the accounting function of an organization.

As the size of the organization increases, the need for budgeting is

correspondingly more because a budget is an effective tool of planning and control.

Budget is helpful in coordinating the various activities of the organization with result that

all the activities precede according to the objective. Budgets are means of

communication. Ideas of the top management are given the practical shape. As the

activities of various department heads are coordinated at the much needed for the very

success of an organization. Budget is necessary to future to

Motivate the staff associated, to coordinate the activities of different departments and to

control the performance of various persons operating at different levels.

Budgets may be divided into two basic classes. Capital and operating budgets.

Capital budget are directed towards proposed expenditure for new projects and often

require special financing.

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The operating budgets are directed towards achieving short-term operational goals

of the organization for instance, production or profit goals in a business firm. Operating

budgets may be sub-divided into various departmental of functional budgets.

DEFINITIONS OF BUDGET:

According to Institute of Charted Management Accountants, England “ A plan

quantified in monetary term prepared and approved prior to a defined period of time

usually showing planned income to be generated and / or to be incurred during that

period and the capital to be employed to attain a given objective.”

According to ICMA, England, a budget is, “a financial and/or quantitative

statement, prepared and approved prior to a defined period of time, of the policy to be

pursed during the period for the purpose of attaining a given objective.”

It is also defined as, “a blue print of projected plan of a action of a business for a

definite period of time.”

BUDGETARY CONTROL:

No system of planning can be successful without having an effective and efficient

system of control. Budgeting is closely connected with control. The exercise of control in

the organization with the help of budgets is known as budgetary control. The process of

budgetary control includes.

1. Establishment of budget for each function and section of the organization.

2. Executive responsibility in order to perform the specific tasks so that objectives of

the enterprise may be attained.

3. Continues comparison of the actual performance with that of the budget and

placing the responsibility of executives for failure to achieve the desired result a

given in the budget

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4. Taking suitable remedial action to achieve the desired objective if there is a

variation of the actual performance from the budgeted performance.

5. Revision of budgets in the light of changed circumstances.

DEFINITIONS OF BUDGETARY CONTROL:According to the Brown and Howard “Budgetary control is the system of

controlling costs which includes the preparation of Budgets, co-coordinating the

department and establishing the responsibilities, comparing the actual performance with

the budgeted and acing upon the results to achieve the maximum profitability”

According to the J.Betty: “A system which uses budgets as a means of planning

and controlling all aspects of producing and / or selling commodities and services”

.According to the CIMA, London, “Budgetary control is the establishment of

budgets relating to responsibilities of executives to the requirement of a policy, and the

continuous comparison of actual with budged results, either to secure by individual action

the objective of that policy or to provide a basis for revision.

BUDGET, BUDGETING AND BUDGETING CONTROL

Row land and William in their book entitled Budgeting for management control

has given the difference between budge, budgeting and budgetary control as follows:

“Budgets are the individual objectives of a department etc where as budgeting

may be said to be the act of building budgets. Budgetary control embraces all this and in

addition includes the science of planning the budgets themselves and the utilization of

such budgets to effect on overall management tool for the business planning and control”.

Thus, a budget is a financial plan and budgetary control results from the administration of

the financial plan.

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ESSENTIAL FEATURES OF A BUDGETARY:

Budgetary control defines the objectives and policies of the undertaking as a

whole.

It is an effective method of controlling the activities of various departments of a

business unit. It fixed targets and the various departments have to efficiently to

reach the targets.

It secures proper co-ordination among the activities of various departments.

It helps the management to fix up responsibility in case the performance is below

expectations.

It helps the management to reduce wasteful expenditure. This leads to reduction

in the cost of production.

It brings in efficiency and economy by promoting cost consciousness among the

employees.

It facilitates centralized control with decentralized activity.

It acts as internal audit by a continuous evaluation of departmental results and

osts.

LIMITATIONS OF BUDGETARY CONTROL:

The preparation of a budget under inflationary conditions and changing

Government policies is really difficult. Thus, the accurate position of the business

can not be estimated.

Accuracy in budgeting comes through expenditure. Hence it should not be relied

on too much in the initial stages.

Budget is only a management tool. It is not a substitute for management. It can

not replace management in decision making.

Budgeting involves a heavy expenditure, which small concerns cannot afford.

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There will be active and passive resistance to budgetary control as it points out the

efficiency or inefficiency of individuals.

The success of budgetary control depends upon wiling co-operation and team

work. This is often lacking.

Frequent changes maybe called for in budgets due to fast changing industrial

climate. It may be difficult for a company to keep pace with these fast changes,

because revision of budgets is expensive exercise.

OBJECTIVES OF BUDGETARY CONTROL:

PLANNING:

A budget is a plan of the policy to be pursued during the defined period of time to

attain a given objective. The budgetary control will force management at all the activities

to be done during the future periods. A budget as a plan of action achieves the following

purposes:

Action is guided by well thought out plan because a budget is prepared after a

careful sturdy and research.

The budget serves as a mechanism through which.

Management’s objectives and policies are affected.

It is a bridge through which communication is establishment between the top

management and the operatives who are to implement the policies of the top

management.

The most profitable course of action is selected from the various available

alternatives.

CO-ORDINATION:

The budgetary control co-ordinates the various activities of the firm and secures

co-operation of all concerned so that the common objective of the firm may be

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Successfully achieved. It forces executives to think and think as a group. It co-

coordinating the policies, plans and actions. An organization without a budgetary control

is like a ship sailing in a chartered sea. A budget gives direction to the business and

imparts meaning and significance to its achievement by making comparison of actual

performance and budgeted performance.

MOTIVATION:

It employees have actively participated in budget preparation and if they are

convinced that their personal interests are closely associated with the success of

organizational plan, budgets provide motivation in the form of goals to be achieved. The

budgets will motivate the workers, depends purely on how the workers have been

mentally and physically involved with the process of budgeting.

CONTROL:

Control consists of the action necessary to ensure the performance of the

organization conforms to the plans and objectives. Control of performance is possible

with predetermined standards which are laid down in a budget. Thus, budgetary control

makes control possible by continuous comparison of actual performance with that of the

budget so as to report the variations from the budget to the management of corrective

action.

Thus, budgeting system integrates key managerial functions as it links top

management’s planning function with the control function performed at all levels in the

managerial hierarchy. But the efficiency of the budget as a planning and control device

depends upon the activity in which it is being used. A more accurate budget can be

developed for those activities where direct relationship exists between inputs and outputs.

The relationship between inputs and outputs becomes the basis for developing budgets

and exercising control.

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APPROVED PLAN:A mater budget provides an approved summary of results to be expected from

proposed plan of operations. It concerns all functions of organization and serves as a

guide to executives and departmental heads responsible for various departmental

objectives.

COMMUNICATION: The employees of an organization should know organizational aims, objectives of

subunits( budgets centers) and the part that they have to play for their attainment.

Budgets effectively communicate this information to employees. Besides, budges keep

Different sections of the organization informed about the contribution of different

subunits in the attainment of overall organizational objective.

BUDGET PROCEDURES:Having the budget organization and fixed the period, the actual work or budgetary

control can be taken upon the following pattern.

STEPS IN BUDGETING CONROL:

ORGANIZATION FOR BUDGETING:The setting up of a definite plan of organization is the first step towards installing

budgetary controlling system in an organization a budget manual should be prepared

giving details of the powers, duties, responsibilities and areas of operation of each

executive in the organization.

BUDGET MANUAL:

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A Budget manual lays down the details of the organizational set up, the routine

procedures and programmers to be followed for developing budgets for various items and

the duties and responsibilities of the executives regarding the operation of the budgetary

control system. CIMA England defines a budget manual as “a document schedule or

Booklet which sets out, inter alia, the routine of and the forms and records required for

budgetary control”. Thus, it is a written document which guides the executives in

preparing various budgets. Budgets are to be drawn keeping in view the objectives of the

organization given in the budget manual. Responsibility and functions of each executive

in regard to budgeting are written down in the budget manual to avoid any duplication or

overlapping of responsibilities. Steps and the methods for developing various budgets and

the methods of reporting performance against the budget are written down in the budget

manual. In short it is a written document which gives everything relating to the

preparation and execution of various budgets. It should be clear and there should be no

ambiguity in it.

The following are some of the most important matters covered in a Budget manual:

a) Introducing and brief explanation of the objects, benefits and principles of

budgetary control.

b) Organization chart giving the titles to different personnel’s with full

explanation of the duties of each to operating system and preparation of

departmental and functional budgets.

c) Length of budget periods and control periods should be clearly stated.

d) A method of accounting and control of expenditure.

e) A statement showing the responsibility and of authority given to each manger

for approval of budgets, vouchers and all other forms and documents which

authorize them to spend the money. The authority for granting approval must

be clearly stated.

f) The entire process of budgeting programme including the time table for

periodical reporting. A schedule should be drawn for this.

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g) Purpose, specimen form and number of copies to be used for each report and

statement. Budget centers involved should also be stated clearly.

h) Outline of main budgets and their accounting relationships.

i) Explanation of key budgets.

FIXATION OF BUDGET PERIOD:

The budget period mean the period for which a budget is prepared and employed.

The budget period will depend upon the type of business and the control aspect.

Budget period mean the period for which a budge is prepared and employed. The

budget period depends upon the nature of the business and the control techniques. For

example, in case of seasonal industries (i.e., food or clothing) the budget period should be

a short one and should cover one season. But in case of industries with heavy capital

expenditure such as heavy engineering works, the budget period should be long enough

to meet the requirements of the business. From control point of view, the budget period

should be a short one so that the actual results may be compared with the budget each

week end or month end and discussed with and discussed with the Budget committee.

Long term budgets should be supplemented by short term budgets to make the budgetary

control successful, as short-terms budgets will helping exercising control over day-today

operations. In short, the budget period should not be too long so that there may be

sufficient time before budget implementation. For most business, annual budget is quite

common because it compares with the financial accounting year.

There should be a regular time plan for budget preparation. It may be on the following

lines.

Long-term budgets for three to five years should be prepared for expansion and

modernization of the undertaking, introduction of new products or new projects

and undertaking heavy advertisement.

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Annual budgets coinciding with financial accounting year should be prepared for

the operations activities

For control purposes, short-term budgets-monthly or even weekly budget-should

be prepared for watching progress of actual performance against targets. Short-

term budgets are prepared to see that actual performance is proceeding according

to the budgets and early corrective action may be taken if there is any pitfall.

The responsibility for preparation and implementation of the budgets may be

fixed as under.

BUDGETARY CONTROLLER:Although the chief executive l finally responsible for the budgetary programme. It

is better if a large part of the supervisory responsibility is deluged to an official

designated as Budget Controller or Budget Director. Such a person should have

knowledge of the technical details of the business and report directly to the president or

the chief executive.

ROLLING (CONTINUES) BUDGET:This is a budget which is updated continuously by adding a further period (a

month\quarter) and deducting a corresponding earlier period. Budgeting is a continuous

process under these methods of preparation of budget. Once the first period elapses, the

forecast for that period is dropped and the forecast for the future period beyond the

existing could not be predicted and forecast reliably, this method is useful. However, it is

a costly exercise but matched by considerable reduction in operational variances.

ANNUAL VS CONTINUES BUDGETING SYSTEM:In some organizations budgets are prepared on annual basis. But annual budgets

may not help the management to have control because variances due to rapidly changing

conditions, severe rapidly changing conditions, severe inflationary conditions exist

resulting fast increase in the prices of inputs without reflecting in and wide range of

products being produced making it not feasible to have precise estimate of levels of

activity for a year.

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The procedure in continuous budgeting will be that a year will be divided into four

quarters. Monthly budgets for the first quarter and three quarterly budgets for the next

year can be prepared. For the first quarter precise estimates can be drawn up monthly.

The budget estimates for the second quarter may be revised working out separately

monthly estimates on more precise basis for control purposes before the starting of the

second quarter.

Similarly procedure may be followed for third and fourth quarters. This method a

time which need not be in respect of or coincide with the financial year.

PRINCIPAL BUDGET (LIMITING) FACTOR:

Principal budget factor is such an important factor that it would affect all the

functional budgets to a large extent. The extent of its influence must be assessed first in

order to ensure that functional budgets are reasonably capable of fulfillment. This is the

factor in the activities of an undertaking which at a particular point in time or over a

period will limit the volume of output. It is the governing factor which is a major

constraint on all the operational activities of the organization, so this factor is taken into

consideration to determine whether the budgets are capable of attainment. It is essential

to locate the limiting factor may be any one of the following:

Is there sufficient demand for the product? (customer demand)

Will a required quality and quantity of materials be available? (availability of raw

material)

Is the plant capacity sufficient to cope up with the expected? (plant capacity)

Is the required type of labor available? (available of labor)

Is cash position sufficient to finance the expected volume of ? (cash position)

Are there any Government restrictions? (Government restrictions)

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For example, a concern has the capacity to produce 50,000 units of particular item per

year. But only 30, 000 units can be sold in the market. In this case, low demand for the

product is the limiting factor. Therefore, budget should be prepared first and other

functional budgets such as production budget, labor budget, plant utilization budget, cash

budget etc. should be prepared in accordance with this case plant capacity is limited.

Therefore, production budget should be prepared first and other budgets should follow

the production budget.

Thus, the budget relating to limiting factor should be prepared first and the other

budgets should be prepared in the light of that factor. All budgets should be co-

coordinated keeping in view the principal budget factor if the budgetary control is to

achieve the desired results.

Principal budget factor is not static. It may vary rapidly from time to time due to

internal and external factors.

DIFFERENT TYPES OF BUDGET:

Different types of budgets have been developed keeping in view the different

purposes they serve. Budgets can be classified according to:

The coverage they encompass;

The capacity to which they are related;

The conditions on which they are based; and

The periods which they cover.

FUNCTIONAL BUDGET:

A functional budget is a budget which relates to any of the functions of an

undertaking e.g., , production, research and development, cash etc, the following

budgets are generally prepared.

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BUDGET PREPARED BY1. Budget including selling and Manager

Distribution Cost Budget

2. Production Budget Production Manager

3. Material Budget Purchase Manager

4. Labor and Personnel Budget Personnel Manager

5. Manufacturing Overheads Production Manager

6. Administration Cost Budget Finance Manager

7. Plant Utilization Budget Production Manager

8. Capital Expenditure Budget Chief Executive

9. Research and Development Cost Budget R&D Manager

10. Cash Budget Finance Manager

BUDGET:

budget is the most important budget and of primary importance. It forms the

basis on which all the budgets are built up. This budget is a forecast of quantities and

values of to be achieved in a budget in a budget period. Every effort should be made to

ensure that its figures are as accurate as possible because this is usually the starting

budget ( being limiting factor on which all the other budgets are built up). The Manger

should be made directly responsible for the preparation and execution of the budget. The

budget may be prepared according to products, territories, types of customers; men

etc., in the preparation of the budget, the manager should take into consideration the

following factors:

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1. Past Figures and Trends.

2. men’s Estimation.

3. Plant Capacity.

4. Availability of Raw Material and other Supplies.

5. General Trade Prospects.

6. Orders in Hand.

7. Seasonal Fluctuations.

8. Financial Aspect.

9. Adequate Return on Capital Employed.

10. Competition.

11. Miscellaneous Considerations.

PRODUCTION BUDGET:

Production budget is a forecast of the total output of the whole organization

broken down into estimates of output of each type of product with a scheduling of

operations (by weeks and months) to be performed and a forecast of the closing finished

stock. This budget may be expressed in quantitative (weight, units etc) r financial

(rupees) units or both. This budget is prepared after taking into consideration the

estimated opening stock, the estimated and the desired closing finished stock of each

product. The works manger is responsible for the total production budget and the

departmental managers are responsible for the departmental production budget. In

preparing the production budget, the following factors are considered.

The time lag between the production in the factor and to the customer should be

considered so as to allow fro the time required or the dispatch of goods from the factory

to the place of the customers.

The stock of goods to be maintained both at the factory’s go gown and at he

centers.

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The level of production needed to meet the programme. Monthly production

targets should be fixed and it should be seen that production is kept more or less at

uniform level throughout the year. The material labor and plant requirements should be

ascertained to have the desired production to meet the programme.

The and the production are inter-dependant because production budget is

governed by the budget and the budget is largely determined by the production

capacity and by production costs.

COST OF PRODUCTION BUDGET:

After determining the volume of output the cost of procuring the output must be

obtained by preparing a cost of production budget. This budget is an estimate of cost of

output planned for a budget period and may be classified into material cost budget, labor

cost budget and overhead budget because cost of production includes material, labor and

overheads.

MATERIALS BUDGET:

In drawing up the production budget, one of the first requirements to be

considered is material. As we know, materials may be direct or indirect. The materials

budget deals with the requirements and procurement of direct materials. Indirect

materials are dealt with under the works overhead budget. The budget should be related

to the production budget and the period of the budget should be of short duration because

this budget has an important bearing on the cash budget

PURCHASE BUDGET:Purchase Budget is mainly dependent on production budget and material

requirement budget. This budget provides information about the materials to be acquired

from the market during the budget period.

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Purchase budget should be prepared by the purchase manger by getting relevant

information about capital items, tools, general supplies and direct materials required

during the budget period from other related departments. Like other budgets, the purchase

budget has to be approved by the budget committee. After approval it becomes the

responsibility of the purchase officer to see that purchases are made as per the purchase

budget. Sometimes additional purchases which are not covered by the purchase budget

are made under the following circumstances.

If there is increase in production not anticipated while preparing the purchase

budget and purchase of larger quantities of materials becomes necessary.

If accumulation of stock becomes necessary to avoid shortage of materials.

If overstocking is desired to take advantage of lower prices and there is fear that

price will increase in near future.

The purchase manger should get additional sanctions from the higher authorities

for making the additional purchases not covered by the purchase budget.

DIRECT LABOR BUDGET:

This budget gives as estimate of the requirements of direct labor essential to meet

the production target. This budget may be classified into labor Requirements budget and

recruitment budget. The labor recruitment budget is developed on the basis of

requirement of the production budget given and detailed information regarding he

different classes of labor e.g., fitters, welders, turner, millers, and grinders and drillers

etc., required for each department, their scales of pay and hours to be spent. This budget

is prepared with a view too enable the personnel department to carry out programmers of

training and transfer and to find out sources of labour needed so that every effort may be

made to remove difficulties arising in production the available workers in each

department, the expected changes in the labour force during the budget period due to the

labour turnover. This budget gives information about the personnel specification for the

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jobs for which workers are to be recruited, the degree for skill and experience required

and the rates of pay. Where standard costing system is applied, the labor cost budget is

dev eloped on the basis of standard labor cost per unit multiplied by the quantity of

anticipated production determined in the production budget. If standard costing system is

not being followed in the organization, the information of labour cost may be obtained

from past records or estimated cost.

Sometimes another budget known as Manpower budget is prepared. This

budget gives the requirements of direct and indirect labour necessary to meet the

programme set out in the , manufacturing, maintenance, research and development and

capital expenditure budgets. The labor terms are expressed of rupee value, number of

labour hours, number and grade of workers etc. this budget makes provision for shift and

overtime work and for the effective training for new workers on labour cost.

MANUFACTURING OVERHEADS BUDGET:

This budget gives an estimate of the works overhead expenses to be incurred in a

budget period to achieve the production target. The budget includes the cost of indirect

material, indirect labour and indirect works expenses. The budget may be classified into

fixed cost, variable cost and semi-variable cost. It can be broken into departmental

overhead budget to facilitate control. In preparing the budget, fixed works overhead can

be estimated on the basis of past information after taking into consideration the expected

changes which may occur during the budget period. Variable expenses are estimated on

the basis of the budgeted output because these expenses are bound to change with the

change in output.

The Cost Accountant prepares this budget on the basis of figures available in the

manufacturing overhead ledger or the head of the workshop may be asked to give

estimates for the manufacturing expenses. A good method is to combine the estimates of

the Cost Accountant and the shop executive.

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ADMINISTRATIVE EXPENSES BUDGET:

This budget covers the expenses incurred in framing policies, directing the

organization and controlling the business operations. In other words, the budget provides

as estimate of the expenses of the central office and of management salaries. The budget

can be prepared with the help of past experience and anticipated changes. Budget may be

prepared be prepared for each administration department so that responsibility for

increasing such expenses. This budget covers the expenses incurred in framing policies,

directing the organization and controlling the business operations. In other words, the

budget provides an executive. Much difficulty is not experiences in developing such

budget as most of the administration expenses are of a fixed nature. Although fixed

expenses remain constant and are not related to sale volume in the sort run, they are

dependent upon in the long run. With a small change in output, they do not change.

However, if there is persistent fall in output, administration expenses will have to be

reduced by discharging the services of some members of the staff and taking other

economy measures. On the other hand, with persistent increase in output or business

activity, administration expenses will increase but they may lag behind business activity.

BUDGETED INCOME STATEMENT:

A budgeted income statement summarizes all the individual budges i.e., budget,

cost of goods sold budget, selling budget, and administrative budget. This budget

determines income before taxes. If the tax rate is available net income after taxes can also

be computed.

SELLING AND DISTRIBUTION COSTS BUDGET:

This budget is the forecast of the cost selling and distribution for budget period

and is clearly related to the sale budget. All expenses related to selling and distribution of

the various products as indicated in the budget are included in it. These expenses are

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based on the volume of set in the budget and budget and budgets are prepared for

each item of selling and distribution overhead. Long term expenses.

As advertisement are spread over more than one period. Selling and distribution

overheads are divided into fixed and variable category with reference to volume of .

Separate budgets are prepared for variable and fixed items of selling and distribution

overheads.

PLANT UTILIZATION BUDGET:This budget lays down the requirements of plant capacity to carry out the production as

per the production programme. This budget is terms of convenient physical units as

weight or number of products or working hours. The main functions of this budget are:

It will show the machine load in each department during the

Budget period.

It will indicate the overloading on some departments, machine or group of

machine and alternative courses of actions as working overtime, off loading,

procurement or expansion of plants, sub-contracting etc., can be taken.

Idle capacity in some departments may be utilized by making efforts to increase

the demand for the products by providing after sale service, conducting

advertisement campaign, reducing prices, introducing lucky prize coupons,

recruiting efficient staff etc.

CAPITAL EXPENDITURE BUDGET:

The capital expenditure budget gives an estimate of the amount of capital that

may be needed for acquiring the assets required for fulfilling production requirements a

specified in the production budget. The budget is prepared after taking into consideration

in the available productive capacities, probable reallocation of the existing assets such as

plant and equipment budget, building budget etc. The capital expenditure budget is an

important budget proving for acquisition of assets, necessitated by the following factors:

24

RESEARCH AND DEVELOPMENT COST BUDGET:

While developing research and development cost budget, it should be clear in

mind that work relating to research and development is different from that relating to the

manufacturing function. Manufacturing function gives quicker results than research and

development which may go on for several years. Therefore, these budgets are established

on a long term basis; say for 5 to 10 years which can be further subdivided into short-

term budgets on annual basis. As a rule research workers are less cost conscious; so they

are not susceptible to strict control. A research and development budget is prepared

taking into consideration the research projects in hand and the new research projects in

hand and the new search and development projects to be taken up. Thus this budget

provides an estimate of the expenditure to be incurred on research and development

during the budget period.

After fixation of the research and development cost budget, the research executive

fixes priorities for the various research and development projects and submits research

and development project authorization forms to the budget committee. The projects are

finally approved by the senior executive.

Before giving the approval, the expenditure on research and development is

matched against the benefits likely to be availed of from the new project; after the

approval of the budget, a close watch is kept on the expenditure so that it may not exceed

budget provisions. It is also seen that extent of progress made is commensurate with the

expenditure incurred.

CASH (FINANCIAL) BUDGET;

The cash budget can be prepared by any of the following method:

25

1. Receipts and payments method

2. The adjusted profit and loss method

3. The balance sheet method

1. Receipts and payments method: In case of this method the cash receipts from

various sources and the cash payments to various agencies are estimated. In the

opening balance of cash, estimated cash receipts are added and from the total of

estimated cash payments are deducted to find out of the closing balance.

2. The adjusted profit and loss method: In case of this method the cash budget is

prepared n the basis of opening cash and bank balance of the various assets an

liabilities.

3. The balance sheet method: With the help of budget balances at end except cash

and bank balances, a budgeted balance sheet can be prepared and the balancing

figure would be the estimated closing cash\bank balance.

Thus under this method, closing balances, other than cash\bank will have to be found out

first to be put in the budget balance sheet. This can be done by adjusting the anticipated.

MASTER BUDGET (FINALIZED PROFIT PLAN):

The Master Budget is consolidated summary of the various functional budgets. It

has been defined as “a summary of the budget schedules in capsule form made for the

purpose of presenting, in one report, the highlights of the budget forecast”. The

definition of this budget given by the Chartered Institute of Management Accountant,

England, is as follows:

“Thus summary budget incorporating its components functional budgets and

which are finally approved and employed”.

The master budget is prepared by the budget committee on the basis of co-

coordinated functional budgets and becomes the target for the company during the budget

26

period when it is finally approved by the committee. This budget summaries functional

budget to produce a budgeted Profit and Loss Account and a Budget Balance Sheet as at

the end of the budget period.

FIXED BUDGET:

This budget is drawn for one level of activity and one set of conditions. It has

been defined as a budget which is designed to remain unchanged irrespective of the

volume of output or turnover attained. It is rigid budget and is drawn on the assumption

that there will be no change in the budgeted level of activity. A fixed budget will,

therefore, be useful only when the actual level of activity corresponds to the budgeted

level of activity. A master budget tailored to a single output level of (say) 20,000 units of

is a typical example of a fixed budget. But in practice, the level of activity and set

conditions will change as a result of internal limitations and external factors like changes

in demand and price, shortage of materials and power, acute competition etc. It is hardly

of any use as a mechanism of budgetary control because it does not make any distinction

between fixed, variable and semi-variable costs and provides for no adjustment in the

budget fixed as result of change in cost due to change in level of activity. It is also not

helpful at all in the fixation of price and submission of tenders.

FLEXIBLE BUDGET:

The Chartered Institute of Management Accountants, defines a flexible budget

also called sliding scale budget as a budget which, by recognizing the difference in

behavior between field an d variable costs in relation to fluctuations in output, turnover,

or other variable factors such a number of employees, is designed to change appropriately

27

with such fluctuations. This, a flexible budget gives different budgeted costs for different

levels of activity. A flexible budget making an intelligent classification of all expenses

between fixed, semi-variable and variable because the usefulness of such a budget

depend upon the accuracy with which the expenses can be classified. Such a budget is

prescribed in the following cases.

Where the level of activity during the year varies from period, either due

to the seasonal nature of the industry or to variation in demand.

Where the business is a new one and it is difficult to foresee the demand.

Where the undertaking is suffering from shortage of a factor of production

such as materials, labour, plant, capacity etc. The level of activity depends

upon the availability of such a factor of production.

Where an industry is influenced by changes in fashion.

Where there are general changes in .

Where the business units keep on introducing new products or make

changes in the design of its products frequently.

BASIC BUDGET:

A Basic budget has been defined as a budget which is prepared for use unaltered

over a long period of time. This does not take into consideration current conditions and

can be attainable under standard conditions.

CURRENT BUDGET:

A Current budget can be defined a budget which is related to the current

conditions and is prepared for use over a short period of time. This budget is more useful

than a basic budget, as a target of lays down will be corrected to current conditions.

28

LONG-TERM BUDGET:

A Long-term budget can be defined as a budget which is prepared for periods

longer than a year. These budgets help in business forecasting and forward planning.

Capital Expenditure Budget and Research and Development Budget are examples of

long-term budgets.

SHORT- TERM BUDGET:

This budget is defined as a budget which is prepared for period less than year and

is very useful to lower levels of management for control purposes. Such budgets are

prepared for those activities the trend in which is difficult to foresee over longer periods.

Cash budget and material budget are examples of short term budget.

PERFORMANCE BUDGET:

Performance Budgeting has its origin in U.S.A. after second World War. It tries

to rectify some of the shortcoming in the traditional budget. In the traditional budget

amount are earmarked for the objects of expenditures such as salaries, travel, office

expenses, grant in aid etc. In such system of budgeting the money concept was given

more prominence i.e. estimating or projecting rupee value for the various accounting

heads or classification of revenue and cost. Such system of budgeting was more

popularly used in government department and many business enterprises

Performance oriented budgets are established in such a manner that each item of

expenditure related to a specific responsibility centre is closely linked with the

performance of that centre. The basic issue involved in the fixation of performance

29

budgets is that of developing work programmers and performance expectation by

assigned responsibility, necessary for the attainment of goals and objectives of the

enterprise, it involves establishment of well defined centers of responsibilities,

establishment for each responsibility centre-a programmed of target performance e in

physical units, forecasting the amount of expenditure required to meet the physic al plan

laid down and evaluation of performance.

ZERO BASED BUDGETS:

This budge is the preparation of budget starting from Zero or from a clean state.

As a new technique it was proposed by Patter Peal of Texas Instruments Inc., U.S.A.

This technique was introduced in the budgeting in the state of Georgia by Mr. Jimmy

Carter who was then the Government of that state. ZBB was tried in federal budgeting as

a means of controlling state expenditures.

The use of zero-based budgeting as a managerial tool has become increasingly

popular since the early 1970’s It is steadily gaining acceptance e in the business world

because it is providing it utility as a tool integrating the managerial function of planning

and control. ZBB is not based on the incremental approach and previous year’s figures

are not adopted as a base. Rather, zero is taken as a base aw the name goes. Taking zero

as a base, a budget is developed on the basis of likely activities for the future period. In

ZBB, by declining the budget from the past, the past mistakes are not repeated. Funds

required for any for the next budget period should be obtained by presenting a convincing

case. Funds will not be available as a matter of course.

ADVANTAGES OF BUDGETARY CONTROL:

30

The most important advantage of a budgetary control is to enable management to

conduct business in the most efficient manner because budgets are prepared to get the

effective utilization of resources and the realization of objectives as efficiently.

It lies down as objective for the business as a whole. Even though a monetary

reward is not offered the budget becomes a game – a goal to achieve or a target to shoot

at – and hence it is more likely to be achieved or hit that if there was no predetermined

goal or target. The budget is an impersonal policeman that maintains ordered effort and

brings about efficiency in result. It ensures effective utilization of men, materials,

machines and money because production is planned according to the availability of these

items.

Everyone working in the concern knows what exactly to do because budgetary

control laid emphasis on the staff organization. It ensures that individual responsibilities

are clearly defined and that the required authority commensurate with the responsibility is

delegated so that buck passing ay is prevented when the budgeted results are not

achieved. Budgetary control takes the help of different levels of management in the

preparations of the budget. Budget finally approved represents the judgment of the entire

organization and not merely that of an individual or a group of individuals. Thus, it

ensures team work.

Management by exception is possible because the comparison of actual and

budgeted results points out weak spots so that remedial action is taken against weak spots

which are not in conformity with the budgeted performance.

Budgetary control creates conditions for setting up a system of standard costing.

It is helpful in reviewing current trends in the business and in determining further

policy of the business because current and future trends are studied in the preparation of

the budget.

DIS-ADVANTAGES OF A BUDGET:

31

While budgets may be essential part of activity they do have number of disadvantages,

particularly in perception terms.

Budgets can be seen pressure devices imposed by management, thus resulting in:

a) bad labor relations

b) Inaccurate record-keeping.

DEPARTMENTAL CONFLICT ARISES DUE TO: a) dispute over resources allocation

b) Departmental blaming each other if targets are not attained. It is difficult to reconcile

personal\individual and corporate goals. Waste may arise as managers adopt the view,

“we had better sped it or we will lose it”. This is often coupled with “empire building” in

order to enhance the prestige of department. Responsibility versus controlling, i.e. some

costs are under the influence of more than one person, eg. Power costs.

32

COMPANY & INDUSTRY PROFILEVISION

“To provide quality education to the younger generation so that they may be

counted among the best minds in the world. With emphasis on discipline, dedication and

determination towards education, it hopes to generate graduates with utmost respect for

human values.”

We aspire to be an institute reckoned around the world for creating impeccable

future leaders contributing to the society at large. We aim to achieve this by: •

Continuous knowledge enhancement. • Commitment and value based teaching process. •

Synergic contribution to society through value added services.

MISSION

Ushodaya Degree College was set-up to provide modern (formal and

professional) education to the deserving students. It believes that education is the key that

empowers the students for peaceful co-existence, encourages tolerance, which is

necessary for peace and communal harmony.

33

With this belief, Ushodaya Degree College is truly committed to 3 – Ds

(Discipline, Dedication and Determination). It aims to provide the best possible

educational experience through excellence in teaching and research activities for today’s

students and professionals of tomorrow. It is dedicated for honing young minds and

producing conscientious individuals who will serve the society, state and country

individuals who will move the human race towards responsible progress in the 21st

century.

We aim to cater the knowledge seeker and shape up their career in the modern

professional world through :

• Quality Education.

• Research based practical know-how.

• Innovative and advance teaching methodologies.

• Global Exposure.

OUR VALUES

The underlying philosophy of Ushodaya Degree College is generated from the

very noble idea of enlightenment through knowledge. We put uncompromising efforts in

realizing the philosophy. We believe true knowledge comes from innovation and

innovation is the child of exposure. So, our efforts are aligned to provide maximum

exposure to our students, that triggers innovative instinct and illuminate their life with

knowledge and raise the career graph to the pinnacle of success.

34

CHAIRMAN’S MESSAGE

A warm welcome to you !

Ushodaya Group of Institution was conceived to impart quality education in the

society. I am proud to say that the college is unique in imparting value based education

and our students are well placed in college of repute both in India and abroad. The

Institution aims to guide the youth towards an enriching creativity and love towards

learning, the right attitude, interests in sports, cultural activities and essential skills. The

Institution also plays a vital role to nurture each student’s individual personalities, talents,

to develop their inherent strengths. The institution is also determined to provide the best

possible educational experience through excellence in teaching and research activities for

today’s students and graduates of tomorrow who will move the human race towards

responsible progression in the years to come. It is dedicated to honing young minds and

producing conscientious individuals who will serve the society, state and country. This

achievement is possible mainly through the strong commitment and dedication of the

management and faculty who mould the students to face global challenges with the

support of our state of infrastructure. The future of our country depends on the outlook

and behavior of our students. The graduates emerging from the portals of an educational

institution possess atleast minimal moral values. The Institution is a platform to mould

the student to be model acceptable by the society. They should not only excel in the

35

subject matter, but, they should develop their traits and add value to life and should

become a role model for the future generations.

V.SuryaPrakash

Chairman - Ushodaya Group of Educational Instituations.

PRINCIPAL’S MESSAGE

Greetings from Ushodaya Degree College. The critical measure of a man is not

where he plunks in moments of comfort and convenience, but where he stands in times of

challenge and controversy. The key to life is accepting challenges. Once someone stops

doing this, he is dead. We at Ushodya Degree College nurture the students to take up

challenges to achieve victory and to become champions and prove their talent. To

accomplish this, Institution provides the right infrastructure, committed faculty and

learning resources which helps to mould the students into excellent personalities.

By choosing Ushodaya Degree college, our students choose to belong to a

community, a community of faith. Our key focus is to inspire our students who come

from middle and low class to be strengthened by the ethical values, determination,

dedication and discipline. This will definitely enable them to contribute to a change and

challenging world positively. We also have a long term planning of putting the Institution

on the global map.

The Institution is affiliated to Telangana University. The curriculum design we

follow is designed by the University. To make the students withstand today’s challenges,

we also provide the value addition to the students in the form of mentoring, guest

36

lectures, quiz on current affairs, seminars, workshops and industry interaction. The

overall performance of the students has been good and they are well employed.

We are pleased to submit the Self-study report prepared as per the NAAC formats. The

reports is the outcome of coordinated efforts of the secretary, principal, head of

department, faculty members and the administrative staff.

M.Gangadhar

Principal - ushodaya Degree College

LIST OF ABBREVATIONS

B.A- Bachelor of Arts

B.Com- Bachelor of Commerce

B.Sc – Bachelor Of Science

37

COLLEGE PROFILE

1. Ushodaya Degree College is a part of Ushodaya Group of Institutions. We do

not have a separate playground forUshodaya Degree College. The playground is

located at one of our Institution namely, Ushodaya College of Junior, which is

utilized by our entire Group of Institutions for conducting Annual Sports Meet.

For daily sports activities, we utilize the playground of Nizam Deccan Sugars

Limited (NSF), which is very nearby to our Institution.

2. Since Ushodaya Degree College is a part of Ushodaya Group of Institutions, the

comman hostels is utilized by the enitire group both for boys and girls pursuing

the education in Ushodaya Group of Institutions. The students studying in this

Institutions are accommodated in these hostels.

3. Our Institution is situated in the heart of the city, several hospitals are in the

vicinity of our Institution.

4. As specified by the Telangana University, we meet all the requirements for setting

up a study centre for Directorate of Correspondence Courses and Distance

38

Education. The Institution has forwarded its application to the University and the

same is inder process.

5. Our College is situated in the heart of the city nearby the Bus Stop.Bus stop is

located to nearby our College. This is very helpful for the students commuting

from far off places, especially for girl students.

6. The Institution has taken every measure for prevention of fire in any

circumstances. For safety of students, staff and the entire Institution, we have

installed 15 Nos. of different types of fire extinguishers for the entire campus for

safety of students, staff and the entire infrastructure of the Institution.

CURRICULAR ASPECTS

(Curricular design and development, academic flexibility, feedback on curriculum.

Curriculum update, Best practices)

The Institution follows the Telangana University curriculum in all the courses

offered. Three undergraduate programs viz., BCOM, BA & BSC are offered to meet the

diverse needs of the students. The University updates the syllabus once in five years.

There is a system in the University to review the curriculum where in the faculty will

interact with University faculty, BOS members, industry experts and students to obtain

the feedback and suggest improvement.

The Institution ensures that the objectives of curriculum are achieved with an

instant goal of providing quality education. The Institution ensures that the objective of

the curriculum is imparted through innovative teaching methods such as Presentations,

Assignments, Discussions, Workshops, Seminars, Industrial Visits, Computer Education

etc., which is apart from the regular lectures. It also ensures that the students are updated

regarding the latest trends in their area of specialization.

39

TEACHING AND LEARNING EVALUATION

(Admission process and student profile, Catering to diverse needs, Teaching-learning

process, Teacher quality, Evaluation Process and reform, Best practices)

The Institution has an explicit and transparent mechanism with respect to

admissions. The admission process gives equal opportunities for all. A minimum of

35% is required for admission in any of the degree courses offered by the institution as

per the norms of the TelanganaUniversity. The faculty follows the most advances

methods of teaching to make the learning process more effective. The class room lectures

happen as per the syllabus prescribed by the Bangalore University. Faculty encourages

the interactive sessions in the class room where in students are motivated to clarify their

doubts then and their itself.

The faculty also makes use of power point presentations, assignments, practical

tests and internal assessment test which enable the students to understand the subject in a

better way.

The faculty members also update the students on the latest developments in the

subjects with the help of journals and magazines. The industrial visit is also organized to

enable the students to have industrial exposure.

40

Project works also constitutes the part of teaching learning process. It inculcates

research skills among the students. Students have an access to the previous question

papers and also the question bank prepared by the faculty.

INNOVATIIVE PRACTICES

(Environment consciousness, Energy conservation, Innovations and Best practices)

Some of the Innovations and Best Practices promoted by the Institution during the last

five years are as follows:

INNOVATIONS

a) Energy Conservation: Institution is creating awareness among the staff and students

about the various ways and means of conserving energy.

b) Eco-Friendly Campus: The Institution has maintained a pollution free Campus.

c) E-Waste Management: The Institution is ensuring disposal of the e-waste from time to

time.

d)Hazardous Waste Management: The institution is taking initiatives to make the campus

free of plastic and other hazardous waste.

Best Practices:

a) Knowledge Exchange Series: Apart from regular Lecture classes, to enhance the

knowledge of the students, special lectures are delivered by the faculties on different and

advanced aspects of learning.

b) Orientation Program : The Institution organizes Orientation Programs at regular

intervals for the staff and students.

41

c) Student Feedback: Feedback from current and outgoing students are collected and

analyzed in the light of course, content, syllabus and teachers involvement and the report

is sent to IQAC for further action to fulfill the students needs.

d) Soft Skills Training Programs : Soft Skill Programs for the students and staff are

organized by the Institution.

e) Student Seminar: The students are encouraged to give seminars on current trends in the

field of commerce and management.

f) Lecture Notes: Lecture notes are prepared by the faculties to help the weaker and

advanced learners.

g) Revision Classes: Revision Classes are conducted to help the slow learners, which

involves solving previous years question papers.

DATA ANALYSES AND INTERPRETATION

CALCULATION OF REVENUE RECEIPTS BUDGET FOR THE

YEAR 2012-2013 (Cr……)

S.No DESCRIPTION BUDGETED ACTUALS VARIANCE

1.

2.

3.

Interest Earned

Other Income

Balance in

bank(Inventory)

8965.24

75.35

1025.36

8604.99

64.26

999.02

360.25

11.09

26.34

Total 10065.95 9668.27 397.68

42

Interpretation:

In this year it can be seen that every item actuals are bellow the budget estimate

which reprehensions a positives indications of savings, the actuals are beyond budget

estimates due to revision in pay scales. Which can be ignored, because in total budget

estimates are more then the actuals

In revenue receipts, the actuals are below the budgeted. Except in increase in

inventory value is negative. The budget estimates with a good variation percentage.

CALCULATION OF REVENUE RECEIPTS BUDGET FOR THE YEAR 2011-

2012

(Cr……)


1.

2.

3.

Interest Earned

Other Income

Balance in

bank(Inventory)

8965.24

75.35

1025.36

8604.99

64.26

999.02

360.25

11.09

26.34

Total 10065.95 9668.27 397.68

43

Interpretation:

In this year it can be seen that every item actuals are bellow the budget estimate

which reprehensions a positives indications of savings, the actuals are beyond budget

estimates due to revision in pay scales. Which can be ignored, because in total budget

estimates are more then the actuals

In revenue receipts, the actuals are below the budgeted. Except in increase in

inventory value is negative. The budget estimates with a good variation percentage.

CALCULATION OF REVENUE

RECEIPTS BUDGET FOR THE YEAR 2010-2011

(Cr……)


1.

2.

3.

Net (Earned)

Other Income

Balance in Inventory

6231.58

18.69

805.67

5903.71

11.47

761.88

327.87

7.22

43.79

Total 7055.94 6677.06 378.88

44

Interpretation :

In this year, the budgeted are above the actuals. Interested Earned is high value

the budget estimates among all items and in total that shows a good budgeting effort

makes the actuals.

In revenue receipts, the budgeted are above the actuals, but with a minimum

percentage of variation as compared with previous year.


2010

(Rs……)


1.

2.

3.

Net (Earned)

Other Income


6214.25

184.57

517.83

5886.70

111.52

447.21

327.25

73.05

70.62

45

Total 6916.65 6445.43 471.22

Interpretation :

During this year budget estimates are above actuals are below. The budgets and

actuals increasing in compared to previous year.

In revenue receipts budget estimates are above the actuals which indicates a good

variation.


2009

(Rs……)


1.

2.

3.

Net (Earned)

Other Income


4258.69

31.02

587.14

4082.59

15.06

421.98

176.10

15.96

165.16

46

Total 4876.85 4519.63 357.22

Interpretation :

This year budgets and actuals estimates are below compared to the 2008-2009

except in employee remuneration and benefits.

In revenue receipts, the budgeted are above the actuals. Increase in inventors

value in negative the budget estimates with a good percentage of variation.

CALCULATION OF REVENUE RECEIPTS BUDGET FOR THE

YEAR 2007-2008

(Rs……)


1.

2.

3.

Net (Earned)

Other Income


1824.01

37.17

201.57

1574.55

28.03

155.97

249.26

9.14

45.60

Total 2062.75 1758.55 304.20

47

Interpretation :

In this year the budgets are above the previous year and all expenditures and in all it

shows a good signification of budget techniques.

It we see the revenue receipts, budget are above the actual, with minimum

difference. Increase in inventory total five year’s values is negative.

Interested Expanded

(Cr…..)

YEAR BUDGETED ACTUALS

2007-2008 15.21 08.30

2008-2009 102.58 88.48

2009-2010 204.69 173.53

2010-2011 215.68 169.64

2011-2012 421.25 340.26

48

Interpretation :

By observing the above graph the materiel consumption is fluctuating from 2008-

2012. The interested expenditure the state at which the implementation of the need and

the elements of the company is 340.26 cr so the company needs effective budget

technique to get targeted actual.

PROVISIONS AND CONTINGENCES

(Cr…..)


2007-2008 390.21 314.32

2008-2009 648.69 567.12

2009-2010 916.37 866.29

2010-2011 902.67 818.65

2011-2012 763.91 648.57

49

Interpretation :

By observing the above graph the consumable stores is fluctuating from 2008-

2012. The value is increased from 314.32 in 2008 to 648.57 in 2012 so the company

needs effective budget techniques to get targeted actual.

EMPLOYEE REMUNERATION & BENEFITS

(Cr…..)


2007-2008 2365.54 2078.90

2008-2009 2009.63 1971.70

2009-2010 2103.65 1925.79

2010-2011 2996.31 2816.93

2011-2012 3608.91 3515.28

50

Interpretation:

By observing the above graph the employee remuneration and benefits are

fluctuating from 2008 to 2012. There is an increase in the values from 2078.90 in 2008 to

3515.28 in 2012. So the company should follow the same technique and also improve to

get targeted actual.

ADMINISTRATIVE & OPERATION EXPENSES

(Cr…..)


2007-2008 60.21 42.77

2008-2009 2.06 0.65

2009-2010 10.25 2.24

2010-2011 ---- ----

2011-2012 ---- -----

51

Interpretation :

By observing the above graph the administrative and operation expenses are

fluctuating from 2008 to 2012. There is a decrease in the values from 42.77 in 2008 to

2.24 in 2010 so the company needs effective budget techniques to get targeted actual.

TAX


2007-2008 112.24 96.91

2008-2009 158.91 138.17

2009-2010 291.21 233.72

2010-2011 201.24 141.41

2011-2012 0.00 -9.41

52

Interpretation :

By observing the above graphs the Tax are fluctuating from 2008-2012 there is an

decrease in the values from 96.91 in 2008 to -9.41 in 2012. So the company should

follow the same technique and also improve to get targeted actual.

DEPRECIATION


2007-2008 20.91 11.62

2008-2009 61.20 40.53

2009-2010 97.68 59.77

2010-2011 89.67 72.06

2011-2012 159.68 101.44

53

Interpretation :

By observing the above graph the depreciation values are fluctuating from 2008-

2012. There is an increase in the values from 11.62 in 2008 to 101.44 in 2012 so the

company need effective budget techniques to get targeted actual.

ASSETS


2007-2008 2258.61 2145.97

2008-2009 3458.47 3204.66

2009-2010 6014.25 5894.37

2010-2011 7501.34 7236.55

2011-2012 8027.91 6988.33

54

Interpretation :

By observing the above graph the Assets are fluctuating from 2008-2012.there is

an increase in the values from 2145.27 in 2008 to 6988.33 in 2012. There is an increase

in the actual so the company need effective budget techniques to increase the sale of

targeted actual.

OTHER INCOME

(Cr…..)


2007-2008 37.17 28.03

2008-2009 31.02 15.06

2009-2010 184.57 111.52

2010-2011 18.69 11.47

2011-2012 75.35 64.26

55

Interpretation :

By observing the above graph the other incomes are also fluctuating from 2008-

2012 there is a increase in the value 28.03 in 2008 to 64.26 in 2012 so the company need

effective budget techniques to get targeted actual in the year 2009-2010 the company

plant location was sold out and the income earned in that year is high i.e. 111.52 Cr.

Capital Work in programs

(Cr…..)


2007-2008 102.54 81.42

2008-2009 36.69 22.37

2009-2010 48.91 33.44

2010-2011 185.64 102.08

2011-2012 41.27 24.39

56

Interpretation :

By observing the above graph the decrease in working process values. The values

are in positive. The company should concentrate on this to improve the increasing in the

inventory and in the year 2010-2011 the valuation is high berceuse the increase in the

investment to the plants.

FINDINGS

1. The budget and budgetary control of USHODAYA DEGREE COLLEGE. Was

found to be very effective when considered all categories of items.

2. In spite of having techniques many techniques of budget system, the company is

not following any of the system to control budget.

3. In the 2008-2012 the total budgets value was high. Where was in the next two

years it has come down drastically.

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4. In all the five years budget expenditure was of high consumption a value.

5. Material consumed which is one of the inputs for the production.

6. It is also found that the reasons for maintaining huge stock of Banking expenses

in 2007-2008 is due to high production of manufacturing expenses as well as the

is also high in the year of 2008-2012 compared to other year.

SUGGESSIONS

1. It is recommended to the company that every item to be considered when

categorizing the items into budgets.

2. As company is not using any budget techniques we can suggest the company to

follow budget techniques for better and effective budget and budgetary control.

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3. Pre audit of all expenditure proposals before issue of order and to check whether

the expenditure is legitimate, approved by appropriate authority and availability

of funds for the above items.

4. The budget estimations should be made that they will reach with the actual for

every year with very less variation.

5. In USHODAYA DEGREE COLLEGE revenue expenditure and revenue

receipts are not interdependent on each other.

6. The revenue expenditure will be spent based on the production target irrespective

of the revenue receipts.

7. In this proves the effective financial performance of budget department in the

organization

CONCLUSIONS

1. Since, all the production units in USHODAYA DEGREE COLLEGE.

2. Will run perpetually throughout the year, there will be minimum variations in the

revenue expenditure budget estimates and actual.

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3. As the expenditure will be incurred more or less to the estimations made by the

organization.

4. In concern with overhead expenses, it will also be with minimum variations

between budget estimates and actual.

5. Since the production process will be consistent.

6. Any change in the items of expenditure, will lead to the review in the budget

estimates by the accounts and finance department.

7. It is also suggested to the company that budget techniques will be very useful to

control and manage cost effectively.

BIBLIOGRAPHY

Books referred:

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Financial Management: M.Y. Khan & P. K. Jain, Fourth edition, published by

TATA McGraw HILL.

Financial Management: Prof. Satish Inamdar, published by Symbiosis center

for distance learning, Pune.

Financial Management; I. M. Pandey, Second edition, published by TATA

McGraw HILL publishing company.

Financial Management : Prasannachandra

Management Accounting and control S.N.Maheswari

Internet sites: www.lanco.com

www.yahoofinance.com

www.google.com

Journals & Magazines Springer (Dec-12)

Financial Budget.

Times of India.

Financial cornices.

QUESTIONNAIRE

1. Profession [a]a. Business manb. private employed

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http://www.google.com/

http://www.lanco.com/

c. Government employedd. others

2. Marital status [b]a. married b. single

3. Income level of the respondents [c]a. < 10,000Rsb. 10000-25,000c. 25,000-50,000d. above 50,000

4. preferred investment plan [c]a. Bank FDb. ULIPC. Mutual fundsd. Stock market

5. What type of mutual funds you prefer ? [b]a. Debt fundsb. Equity fundsc. Hybrid funds

6. Risk preference in mutual funds [MF] investment plan [c]a. High riskb. Moderate riskc. Low risk

7. What type of scheme you prefer much [a]a. Open – Endedb. Closed – Ended

8. What is your period of investment [a]a. Long term b. Short term

9. In which sector fund do you prefer much in estate funds [b]

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a. Financial fundsb. Utility fundsc. Technology fundsd. Healthcare funds

10.Why do u prefer in investing in mutual funds [b]a. Tax savingsb. Risk cover c. Others

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Budgetory control in“ushodaya degree college.”.

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Transcript of Budgetory control in“ushodaya degree college.”.