MBA Program

Shivaji University, Kolhapur

INTRODUCTION OF THE STUDY AND METHODOLOGY

Introduction:The Budget is mainly concerned with the sales, products& purchase of
material.Budget is themost useful ideal resource. India is the fourth major sugar producing
country in the world. Therefore the budget of such large sugar factories is important. There
are 420 sugar factories in India with a total installed capacity of fifteen million tones.
Against this 400 factories were in actual production of which 120 in the private sector,60 in
public sectors &220 in co-operative sector.
The established of budgets relating to the responsibilities of executives to the
requirements of a policy & the continuous comparison of actual with the budgets results,
either to secure by individual action the objectives of that policy or to provide a basis for
its revision.
The term budgeting is frequently used for preparing budgets and other concerting
procedure in their use in planning control of the business enterprises in all budgets; cash
budget is more useful as it is prepared strictly on a cash basis & not on accrual basis
unlike other budgets.

1.1Objectives of study:Budgets are the basis of performance evaluation in an organization. Hence,

theobjective is to examine the usefulness of budgets in the measurements of current
performance as against a budgeted of performance.
1) To understand how budgeting influence the formulation of business objective and strategies.
2) To understand the receipt and payment of organization used to form the cash budget.
3) To the study how the firm has utilized budgeting process in learning in consistencies
among the goal and action of each department to accomplishoverall objective of the firm.
4) To examine the participation and improvementof all concern manager in the process of
budgeting.
5) To observe findings and give suggestions.
1.2 Importance of the Study

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The cash budget is help in building the economic viability of company in all departments.
To understand the overall fiscal health of the company it is necessary to know the
adequate knowledge of the subject .help in the financial condition of the company.

Scope of the study:The scope of the study extends to prepaid the financial performance of shri.
DattaShetakrii.SahakariSakharKarakhana Ltd, Shirol. by the cash budget. The data used
for the study is of past three years I e. 2012 to 2014.

1.3 Research Methodology

For any study collection of data is necessary. Unless data is collected and analyzed one is
not able to achieve the target. The data is collected under this heading mainly based upon
the report and record

Data collection:The data used for the present study is of two types:
1) Primary Data
2) Secondary Data
1) Primary Data:-

The primary data used in the study is obtained by following sources.

Primary Data:Observation:In these, researcher has personally attempted to look around and see how things are
done and pass judgment as an individual. At times used the direct and indirect
observation of facts.
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Interview:During the process of data collection the researcher has also discussed &interviewed
concerned officers. IT was not structured but just in an unstructured manner.

Secondary Data:a)Company records:The information mainly depends upon company records and reports.

1.4 Limitation of the study:The study covers data collection of three years i.e. 2012-2014.
1) Study is limited to the latest 3years period from 2011-12 2012-13 2013-14.
2) It is also experienced that most of the person individual are not positive to provide the
detail information &business statistics for the study.
3) Study is limited to Shri. DattaShetakariSakhariSakharKarkhana. Ltd, Shirol.
4) The study may not sufficient to forecasting & estimation of all aspects in entire firm.

INTRODUCTION OF THE ORGANIZATIO

Introduction: -ShriDattaShetkariSahakariSakharKarkhana Ltd., Shirol.
2.1Origin:
The co-operative movement started long ago in many countries on relatively
limited scale and with rather limited objectives. Today it has grown big in every country,
whether it is a communist, a socialist or a capitalist, because it has met the cases of socio
economic, to uplift the common people.
A pioneering effort of starting an agro-industrial in the co-operative an agro-industrial
project in the co-operative filed for achieving social empowerment through rural
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development was made for the first time in Ahmadnagar District in the year 1950 by
PravaraSahakariSakharKarkhanaLtd., Under the guidance of distinguished cooperative leaders likes Sarvashri Dr. DhananjayraoGadgil ,ShriVaikunthbhiMehta and
shri.VitthalraoVikhe- Patilandit proved to be very successful venture mainly on account
of efforts of the rural co-operative leaders .This has ushered in an era of sugar cooperative in Maharashtra which has resulted in transforming rural economy in the
vicinity of sugar factories by ensuring stability & better return to the cultivators.
ShirolTalukaof Kolhapur district is gifted by the presence of natural irrigation
potential

on

account

of

rivers

viz.

Krishna,

Panchaganga,

Warana,

Dudhganga&Vedhagangaand very eager to have a sugar factory so as to ensure all

round development and economic prosperity to the higher to poor and marginal
farmers. A preliminary meeting was, therefore held at Kurundwad, In ShirolTaluka on
31st December 1960 for organizing a sugar factory after collecting requisite among of
share capital,an application for industrial licence was forwarded to the Government of
India.
The

persistent

efforts

put

fourth

by

the

promoters

of

the

proposedShriDattaShetkariSahakariSakharKarkhana Ltd., Shirolultimately proved to

be successful and the Government of India issued a later of intent in the month of May
1969. In accordance with its enlightened agro-industrial policy.

2.2Introduction to the Organization

Shri.D.S.S.S.K Ltd.,Shirol was registered as a co-operative society under the
Maharashtra co-operative societies Act,1960 on 9thjune, 1969 vide registration No:
KPR/PRG(A)I.
An industrial license for establishing a sugar factory on co-operative basis with
initial crushing capacity of 1250 Metric Tons per day was issued.On 9th March 1989 for
factory got the registered under the multi-sate co-operative societies act and its area of
operation was extended to BelgaumDistrict in Karnataka state. The crushing capacity
was increased to 7000 Mts per day from 1st August, 2001.

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1
General
.
a Name & Address
) of the co-operative
sugar factory

2.3Area

b
)
c
)
d
)
e
)
2
.
a
)
b
)

Telephone No

Shree
DattaShetakariSahkariSakharKarkhanaL
td.Shirol PO: Dattanagar,TalukaShirol,
Dist:Kolhapur 416 120(MS)
(02322)236551(6 lines)

Fax No

(02322)236600)

TelegraphicAddres
s
Email Address

DATTA SAKAR SHIROL

klp_dattsssk@sancharnet.in
of the

Registration
Registration
Number & Date
Turnover of 20132014

KPR/PRG(A)-1 DATED 9TH JUNE,1969

Rs. 450 Crore

operation
The area of operation of ShirolSugar Factory comprises of 117 villages and shown in
table.
Sr.No

Name of the Taluka

Name of District

Name of State

No.of Villages

01
02
03
04
05
06

Shirol
Hatkanangle
Karveer
Kagal
Chikodi
Athani

Kolhapur
Kolhapur
Kolhapur
Kolhapur
Balgaum
Balgaum

Maharashtra
Maharashtra
Maharashtra
Maharashtra
Karnataka
Karnataka

50
32
02
03
21
07

Sugar Project Implementation:Shri.DattaShetakariSahakariSakharKarkhanaLtd.Shirolis

situated

in

the

industrially backward area of the Kolhapur district near villageShirol and is the first
co-operative sugar factory in the state to go into production amongst the 12
contemporary licensees licensed in the year 1969.
Distillery & Ethanol plan:A.G.I.M.S.,Sangli

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The capacity of distillery was 30000 Liters day capacity based on the continuous
fermentation &multipressure vacuum distillation technology has been installed &
commission from 25th May 2002.
Co-Generation:During the inaugural address by the then Honble chief minister ,He appealed
to all the co-operative sugar factories to go in for co-generation & produce extra
power, Which will be supplied to state electricity board so as to overcome the short
supply of the power through co-Generation in the state.We are the proud mention here
that a part from providing electricity to over by product units through co-Generation,
We have already started providing surplus power generated to MSEB grid from the
year 1990-1991 Onwards to the extent of 1.5mw.
The management of the factory considered present scenario of electricity &
decided to go in co- generation project of 36 mw.The project under construction on
boot basis with UrjaankurNidhitrust of Government of Maharashtra & will be
completed before ensuing crushing season i.e.2011-2012.
Environment Department:The factory management has established a separate Environment Management
cell to look after all the related issue of pollution control.It has a task to look after the
effluent treatment of sugar factory and Distillery. Due to the efforts of department
effluent quality has reduced to meager 300 M3/Day of crushing of 7500TCD. The
effluent was treated in the full-fledged ETP.Based on activated sludge process. The
process has now been modified to anaerobic filter followed by activated sludge
process. The results are found to be one of the best. The treated effluent is used for
irrigation of about 40Ha of land.
The Distillery effluent is on of the most polluted item. The factory management
has adopted composting technique for the treatment and disposal of spend
wash.Presumed, Bagasse and Ash are mixed in definite proportion with the spent
wash and aerated for about 21 days to get good quality of compost. The ready
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compost is distributed to the member farmers at a rate of Rs.125/ ton. The compost is
good in Human contest and bacterial content. The application of compost has helped
to improve the yield of crop along with soil quality.

Water Management:It is clear that due to reduction in water consumption the savings in the savings in the
electricity for jack well is in the tune of Rs.11.00 Lakhs.The savings in the water bill
of irrigation department is in the tune of Rs.55.00. Lakhs per year. Besides this the
load on effluent treatment plant is also reduced considerably and the disposal problem
was totally finished.

2.3 Features of the organization:

Co-operative industrial complex has undertaken various socio economic activities
for improving the economic conditions and standard of living of the villagers in the
area of operation are as follows:

Soil Testingalong with Proper Tillage Operation, Supply of Chemical Fertilizers,

Organic Manure, Sugarcane Seeds, Bio- Fertilizers

Horticulture development schemes
GobarGas plant Scheme
Consumer co-operative stores
Firefighting unit
Medical Facilities
Socio Economic Activities
Industrial Training Center
Education Field
Employees Co-Operative Credit Society

Achievements ofSugarcane Development Work:

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1) By implementing various cane development activities, the crop yield increased by

23 MT/HA. Five farmers are awarded by VIS, Pune as OOS BHUSHAN for taking
highest yield per hectare in the state of Maharashtra.
2) For implementing various cane development activities on large area, factory
awarded by VasantDada Sugar Institute, Pune VGSIO for Best cane Development
Activity for the year from 2000-2001, 2001-2002 and 2006-2007.
3) For Best cane Development and its Management, Factory Awarded by National
Federation of co-op. Sugar Factories Ltd. New Delhi in 2007-2008.
4) For implementing cane development activities on large area with positive results
in yield, VSI awarded our cane Development officer as BEST CANE
DECLELOPMENT OFFICER in Maharashtra state sugar Factory level.

2.5Organizations Chart
Management of the Factory is as follows:
ShriDattaShetkariSahakariSakharKarkhana Ltd., Shirolis managed by the board of the
director & top level officer.
Board of director (2009-2014): Chairman- HonbleShri-Appasaheb Alias S.R.Patil
and Vice chairman-HonbleShriSidgaudaGurasidgaudaPatil.
The Organizations chart is as follows:-

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Introduction
Cash budget is the most significant device to plan for and payments. A cash
budget is a summary statement of the firms expected cash inflows and outflow over a
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projected time period. It gives information on the timing and magnitude of expected cash
flows and cash balances over the projected period. This information helps the financial
manager to determine the future cash needs of the firm, plan for the financing of these
needs and exercise control over the cash and liquidity of the firm.
The time horizon of a cash budget may differ from firm to firm. A firm whose business is
affected by seasonal variations may prepare monthly cash budgets. Daily or weekly cash
budgets should be prepare for determining cash requirement if cash flows show extreme
fluctuations. Cash budgets for a longer intervals may be prepared if cash flows are
relatively stable. Cash budgets help management to avoid having unnecessary idle cash
on the on hand unnecessary cash deficiencies on the other. A well-managed financing
program keep cash balance maintained not too large or too small. The cash a budget is
having affected by the level of operation summarized in the budgets income statements.
The cash budget is one of the most important and one of the last to be prepared. It is a
detailed estimate of the cash receipt from all sources and cash payment for all purpose
and the resultant cash balance during the budget period. It makes certain that the business
has sufficient cash available to meet its need as and when these arise. It is a device for
coordinating and controlling the financial side of the business to ensure solvency and
provide basic for planning and financing required covering up any deficiency in cash.
Cash budget thus plays an important role in the financial management of a business
undertaking.

3.1 Meaning
Cash budget is nothing but a written form of various forecasts relating to cash receipt and
cash payment. In other words, to meet future obligation, forecasting the expected receipt
and expected payment of cash is known. Cash budget is mere forecast of cash position of
an undertaking for a definite period. In cash budget, the budget period is normally daily,
weekly monthly or quarterly etc. There are two distinct parts of cash budgeting, one is for
forecasting the cash receipt and the second for forecasting the cash disburse.
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3.1.1 Uses of the cash budgets: Within the broad category of business budget, the owner of the small business may
want to do some specialized budgeting with regard to cash flow.
Cash budget is mostly used to estimate whether or not a company has a sufficient
amount of cash to fulfill regular operations.
Cash budget requires the following main of our accounting function planning &
proactively for the uses of cash.
Cash budget is the most accurate method. It is a core, very simple procedure.

3.1.2 Purpose of the cash budget: It ensures that sufficient cash is availed when required.
It indicates cash excesses and shortage so that action may be taken in time to invest

any excess.
Cash or to borrow fund to meet any shortage.
It establishes a sound basis for credit.
It shows whether capital expenditure may be financed internally.
It establishes a sound basis control cash position.

3.1.3 Characteristics of cash budget

Cash budget is a statement of anticipated cash receipt and payment.

Cash budgeted is related to predetermine the future period.
Cash budget is expressed in terms of monetary values.
Cash budget is a fore cast of the financial aspirations of an enterprise
Cash budget is an outline of future plans, polices and action of the management.

3.2 Importance of cash budget

(1) Helpful in Planning: Cash budget helps planning for the most efficient use of cash. It
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points out cash surplus or deficiency at selected point of time and enables the
management to arrange for the deficiency before time or to plan for investing the surplus
money

as

profitable

as

possible

without

any

threat

to

the

liquidity.

(2) Forecasting the future needs: Cash budget forecasts the future needs of funds, its
time and the amount well in advance. It, thus, helps planning for raising the funds
through

the

most

profitable

sources

at

reasonable

terms

and

costs.

(3) Maintenance of ample cash balance: Cash is the basis of liquidity of the enterprise.
Cash budget helps in maintaining the liquidity. It suggests adequate cash balance for
expected

requirements

and

fair

margin

for

the

contingencies.

(4) Controlling cash expenditure: Cash budget acts as a controlling device. The
expenses of various departments in the firm can best be controlled so as not to exceed the
budgeted

limit.

(5) Evaluation of Performance: Cash budget acts as a standard for evaluating the
financial

performance.

(6) Testing the influence of proposed expansion programmer: Cash budget forecasts
the inflows from a proposed expansion or investment programmers and testify its impact
on

cash

position.

(7) Sound dividend policy: Cash budget plans for cash dividend to shareholders,
consistent with the liquid position of the firm. It helps in following a sound consistent
dividend

policy.

(8) Basis of long-term planning and co-ordination: Cash budget helps in cocoordinating the various finance functions, such as sales, credit, investment, working
capital etc. it is an important basis of long term financial planning and helpful in the

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study of long term financing with respect to probable amount, timing, forms of security
and methods of repayment

3.3Advantages and Disadvantages of Cash Budget:Below is a free essay on "Disadvantages and Advantages of Cash Budget" from Anti
Essays, your source for free research papers, essays, and term paper examples.
Advantages of Budgeting
1) Budgeting forces early consideration.
2) Budgeting compels all the members of management to participate in the establishment
of goals and plans.
3) Budgeting compels departmental managers to make plans in harmony with the other
departments and of the entire enterprise.
4) Budgeting helps the management to put down in figures what is necessary for a
satisfactory performance.
5) Budgeting helps the management to plan for the most economical use of labour,
material and capital.
6) Budgeting tends to remove the uncertainty that exists in many organizations, especially
among lower levels of management, relative to basic policies and objectives.
7) Budgeting promotes an understanding among members of management of their coworkers' problems.

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8) Budgeting force management to give adequate attention to the effects of general

business conditions.
9) Budgeting aids in obtaining bank credit as banks commonly require a projection of
future operations and cash flows to support loans.
10) Budgeting checks progress towards the objectives of the enterprise.
11) Budgeting rewards high performance and seeks to correct unfavorable performance.
12) Budgeting forces management to consider expected future trends and conditions.
13) Budget provides tool for corrective action through reallocations.

3.4 Disadvantages of Budgeting

1) It can be very time-consuming to create a cash budget, especially in a poorly-organized
environment

where

many

iterations

of

the

budget

may

be

required.

2) Cash budgets may also cause distortions. Cash inflows do not equate to profit. Cash
inflows resulting from security deposits, fines, the sale of capital assets, or any other oneoff, non-sustainable activity do not necessarily represent reliable on-going sources of
revenue.
3) Major problems factor would occur when budgets are applied mechanically and
rigidly.

3.5 Types of the budget

A) Functional budget
B) Fixed and flexible budget
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A) Functional budget
A functional budget is related to the function of the business, e g. sales budget,
production budget purchase budget, etc there are many types of functional budgets.
Function of the cash budget are:
To ensure that sufficient cash is available when required.
To get the working capital easily from the banks and for smooth running of

business.
To invest the excess.
To know the exact amount if cash required for business.
To reveal any expected surplus of cash may be invested or loaned.
To reveal any expected shortage cash so that action can be taken to
Procure fianc by way of bank overdraft or loan etc.

Sales budget
In the most companies, the sales budget is notonlyimportant:but also
the most difficult budget to prepay. The importance of this budget arises from the fact
that if the sales figures is incorrect than all practically allother budget will be affected.
The difficulties in the preparation of this budget arise because it is not easy to
estimate consumer demand, particularly when a new product is introduced. The sales
budget is a statement of planned sales in terms of quantity and value .it forecast what
the company can reasonably expect to the sale to its customers during the
Budget period .the sales budget can be prepared to show sales classified according to
product salesmen, customers, territories,and period.
Production budget:
The production budget is an estimate of production for the budget
period. It is a first drawn up in quantities of each product and when the remaining
budgets have been prepared and cost of production calculated, and then the quantities
of production cost are translated into many terms, what in effect becomes a
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production cost budget. The production budget is the initial step in budgeting
manufacturing operations. In addition to production budget, there are three other
budgets relation to manufacturing activates of a company. These are raw material
budget, labor budget, and production over head budget.
Production cost budget:
This budget is shows the estimated cost of production. The
production budge shows the quantity of production .these quantities of production are
expressed in terms of the cost of production budget. The cost of production is shown
in detail in respect of material cost, laborcost,and factoryover head. Thus production
cost budget is based upon production budget material cost budget, labour cost budget
and factory over head budget.
Raw material budget:
This budget shows the estimated quantities of all the raw material
and components needed for production budget. .raw material budget serve the
following purpose.
a. It assists the purchasing department in planning the purchase.
b. It helps in the preparation of purchase budget.
c. It provides data for raw material control.
Purchase budget:
Carefully planning of purchase offer one of the most significant
areas of cost saving in many concern. The purchase manager should be assigned the
direct responsibility for preparing a detailed plan of purchase for the budget period
and the submitting plan in the form of purchase budget. The purchase budget provides
the detail of purchase s which are planned to be made during the period to meet the
need of the business it indicates.
The quantities of each type of the raw material and other items to purchased.
The time of purchases and the estimated cost of material purchase.
Labour Budget

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Labour cost is classified into direct and indirect. Some concerns

prepare a labour budget that includes both direct and indirect labour, while others
include only direct labour cost and include indirect labour in the overhead cost
budget.
Production overhead Budget:
After budgeting of material and labour cost, the next logical step is
to prepare a budget for production overheads. The production overhead budget
represents the forecast of all the production overheads to be incurred the budget
period.
Selling and Distribution cost Budget:
This is closely related with the sales budget and represents the
forecast of all costs incurred in selling and distributing the companys products during
the budget period. As a general rule, the sales budget and the selling and distribution
cost budgets are prepared simultaneously, since each has a definite impact on the
other.
Administration Cost Budget:
This budget represents forecast of all administration expenses like
directors fees, managing directors salary, office lighting, heating and air
conditioning, etc. Most of these expenses are fixed, so they should not be too difficult
to forecast.
Capital Expenditure Budget:
This budget represents the expenditure on all fixed assets during the
budget period. It includes such items as new buildings, machinery, land and
intangible items like patents etc.

B) Fixed Budget:
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A fixed budget is one which is prepared keeping in mind one level

of output. It is defined as a budget Which is designed to remain unchanged

irrespective of the level of activity attained.* If actual output differs from budgeted
level of output, variances will arise. Fixed budget is prepared on the assumption that
output and sales can be estimated with a fair degree of accuracy. This means that in
those situations where sales and output cannot be accurately estimated, fixed budget
does not suit.
Flexible Budget:
In contrast to a fixed budget, a flexible budget is one which is
designed to change in relation to the level of activity attained.* The underlying principle
of flexible budget is that a budget is of little use unless cost and revenue to the actual
volume of production. Flexible budgeting has been developed with the objective of
changing the budget figures to correspond with the actual output achieved. Thus a budget
might be prepared for various levels of activity, say, and 70%, 80%, 90% and 100%
capacity utilization. Then whatever the level of output actually reached, it can be
compared with an appropriate level.

3.6 Preparation of Cash Budgets:

Cash budget represents the cash receipts & payments & the cash balance each month of
the budget period. Whatever method of preparing cash budget is adopted, its basis
concept will be the same i.e. cash receipts & payments thus, cash budget shows the
position during the various stages of a budget period as well as after its expiry.
The contents of cash budget are total receipts & payments over a period of time.
Cash payments are shown by way of deduction from cash receipts to show surplus or
deficiency.
In order to develop a realistic cash budget it is necessary that detailed and pragmatic for
casts of sales, production, expenses, purchases & other operations are available it means
for preparation of reliable cash budget other functional budgets supplying reliable data
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are essential as entries in the cash budget are based on the information recorded in other
budgets.
A cash budget is prepared strictly on a cash basis & not on accrual basis unlike
other budgets. It starts with opening balance of cash in hand and at bank to this, receipts
are added and payments are deducted there from resulting in the balance i.e. deficiency or
surplus.
There are three methods for preparation of cash budget.
A. Receipts & payments methods.
B. Adjusted earnings or adjusted profit & loss method.
C. Balance sheet changes methods.

A) Receipts & payments methods.

1) Estimating Cash Receipt:It is on estimate or prediction of cash receipt from sales, accounts. Receivable nonoperating incomes, capital transaction such as sales of assets, issue of shares,
debentures etc.
In the case of credit sales, there is a long between credit sales & recovery of cash
hence due consideration must be given to this factor, which estimating cash receipts
from credit sales. The non-operating receipts include interests, dividend, rent,
discount, commission, royalty etc. As their period of receipt & amounts are definite
there is no problem in estimating them.
The sale of assets, shares, debenture etc. is largely a matter of a management
decision. Only net receipt from sale of shares & debentures should be taken i.e. their
expenses should be debuted from their receipts.

2) Cash Disbursement:The Disbursement may also be for1. Operating expenses.

2. Non-operating expenses.
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3. Capital transaction-porches of assets, investment etc.

The payments for expenses should be provided for in the month when they will be
actually paid & not when they were incurred.

B) Adjusted Profit & Loss Method:If cash balance at the end of each month is not required to be known & if it is
sufficient to know cash at the end of budget period, this method may be followed.
This Method gives simply broad idea of cash position & does not gives maximum
possible details unlike the first method.
The net profit is adjusted with non cash items, which are taken into consideration
while arriving at net profit.

C) Balance Sheet Changes Method:

If it is desired to prepare a cash budget for the several years ahead, then this method
is followed. For this method, figures of assets & liabilities for more than one year are
necessary.The operating balance of cash is taken as starting point & it is adjusted with
changes in assets & liabilities involving cash receipts & payments.

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3.7 Format of Cash Budgets:CASH BUDGET

(IN LAKHS)

Particular

Financial Year/ Half

Year/Quarter
XXXX

Opening Balance
Receipts:-

XXXX

Cash sales

XXXX

Credit sales

XXXX

Dividend income)

XXXX

Interest income

XXXX

Other income

XXXX

Issue of shares and debentures

XXXX

Central Govt. Export

XXXX

Ocean Transport Subsidy

XXXX

Other Income

XXXX
TOTAL(A)

XXXX

Payments:-

XXXX

Cash purchases.

XXXX

Salary & wages

XXXX

Stores & Repairs

XXXX

Manufacturing expenses.

XXXX

Excise Duty

XXXX

Administrative expenses.

XXXX

Interest

XXXX

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Depreciation

XXXX

Provision

XXXX

Selling and distribution expenses

XXXX
TOTAL(B)

Balance(A-B)

XXXX
XXXX

Data Analysis and Interpretation

By preparing cash budget it becomes possible for the organization to predict whether at
any point of time there will be excess or shortage of cash.
The Cash Budget is a method, under is a statement projecting the cash inflows &
outflows (receipt & disbursements) of the firm over various interim period of the budget
period.
Here the cash budget is analyzed for three consecutive financial years: 2011-12, 2012-13
and 2013-14.

A.G.I.M.S.,Sangli

Page 22

MBA Program

Shivaji University, Kolhapur

Particulars

Budgeted

Actual

Variance

Sugar sales

430.50

435.84

1.24%

Sales of by product

215.20

205.12

-4.68%

Other income

145.50

151.85

4.36%

Petrol pump

60.50

72.73

20.21%

Total

851.7

865.54

1.62%

Chart No:-I

A.G.I.M.S.,Sangli

Page 23

1. Receipt 2011-2012 :
Budgeted and Actual
( Rs in Lakh)
Table No:I

MBA Program

Shivaji University, Kolhapur

500
450
400
350
300
250
200
150
100
50
0

budgeted
actual

INTERPREATION:

The sugar sales in the year 2011-12 areRs435.84Lakhs. The variance of budgeted &

Actual is only 1.24%

The sales of by product actual receipt side isRs205.12 Lakhs where variance is -4.68%.
In the other income a variance of 4.36%. Can be seen this is slight increase an actual

other income than the Budgeted other income.

Petrol pumps income for Budget while the actual income is 72.73 Lakh and increase of

20.21% is seen.
These we can see the total variance in budgeted & Actual is 21.13%.

A.G.I.M.S.,Sangli

Page 24

MBA Program

Shivaji University, Kolhapur

2. Payment 2011-2012 (Rs. in Lakh)

Table No:II

Particulars

Budgeted

Actual

Variance

380.50

394.47

0.036%

20.56
70.52

25.99
64.12

26.41%
-9.07%

Production& sale expenses

30.85

24.71

-6.14%

Administrative expenses

70.00

64.24

-8.22%

Interest on loan
Depreciation
Total

50.14
70.85
693.37

55.24
64.01
637.54

10.17%
-9.65%
-8.05%

Sugar can purchased &related

expenses
Salary & wages
Store & repairs

Chart No:-II

A.G.I.M.S.,Sangli

Page 25

MBA Program

Shivaji University, Kolhapur

450
400
350
300
250
200
Budgeted

150

Actual

100
50
0

INTERPRETATION:

The Budgeted sugar cane purchased and related expenses areRs 38.50 Lakh whereas the

actual expense shows Rs 39.47 the variances is -0.6%.

The Budgeted salary and wages amount is 20.56 Lakh.
The store and repairs expenses have decreased in Rs. 64.12 Lakh in actual
Administrative expenses have decreased in actual which isRs64.24 Lakh.
Interest on lone has increased byRs55.24 Lakh.
Depreciationhas decreased by Rs. 64.01 Lakh.

A.G.I.M.S.,Sangli

Page 26

MBA Program

Shivaji University, Kolhapur

3. Receipt 2012-2013 (Rs in Lakh)

Table No:III
Particulars

Budgeted

Actual

Variance

Sugar sales

414.69

450.67

8.67%

Sales of by product

347.96

264.30

-24.04%

Other income

105.7

91.32

-13.60%

Petrol pump

9.00

13.49

49.88%

877.35

819.78

-6.61%

Total

Chart No:-III

A.G.I.M.S.,Sangli

Page 27

MBA Program

Shivaji University, Kolhapur

500
450
400
350
300
250
200
150

Budgeted

100

Actual

50
0

INTERPREATION:

The sugar sales in the year 2012-13 areRs. 450.67 Lakh. The variance of Budgeted&

Actual is only 8.67%.

The by product in the actual data is 264.30 Lakh. Where the variance is 24.04%.
In the other income a variance of 13.60 % can be seen and slight decrease in actual

income than the budgeted other income.

Petrol pump income shows increase in the actual income which is Rs. 13.49 Lakh.

A.G.I.M.S.,Sangli

Page 28

MBA Program

Shivaji University, Kolhapur

Particulars
Sugar can purchased &related
expenses
Salary & wages
Store & repairs
Production& sale expenses
Administrative expenses
Interest on loan
Depreciation
Total

4. Payment 2012-2013

Budgeted

Actual

Variance

666.27

394.47

-40.7943%

27.43
23.54
30..00
79.00
69.24
63.00
958.48

25.99
22.46
36.54
76.42
48.40
74.76
679.04

-5.24973%
-4.58794%
21.8%
-3.26582%
-30.0982%
18.66667%
-29.01%

(Rs. in Lakh)
Table No: IV

Chart No:-IV

A.G.I.M.S.,Sangli

Page 29

MBA Program

Shivaji University, Kolhapur

700
600
500
400
300
Budgeted

200

Actual

100
0

INTERPREATION:

The budgeted sugar cane purchased and related expenses isRs. 666.27 Lakh were as the

actual expenses showsRs 394 47 the Variances is -0.48%.

The budgeted salary and wages amount is Rs 27.43 Lakh however the actual expenses on

salary and wages are Rs. 25.99 Lakh.

The store and repairs expenses have Rs 22.46 Lakh in actual which occurred less than the

budgeted.
The production and sales expenses has increased by at Rs 36.54 Lakh.
The actual administrative expenses decreased by Rs.66.42 Lakh.
Interest on Lone has increased by Rs 48.40 Lakh.
Depreciation in actualexpenditure is increased by Rs 74.76 Lakh.

A.G.I.M.S.,Sangli

Page 30

MBA Program

Shivaji University, Kolhapur

5. Receipt 2013-2014 (Rs. in Lakh)

Table No:V
Particulars
Sugar sales
Sales of by
product
Other income
Petrol pump
Total

Budgeted

Actual

Variance

427.33

403.81

-5.50%

236.64

230.53

-2.58%

508.75

512.31

0.69%

6.00

00

0.00%

1178.72

1146.65

-2.73%

Chart No:-V
A.G.I.M.S.,Sangli

Page 31

MBA Program

Shivaji University, Kolhapur

600
500
400
Budgeted

300

Actual
200
100
0
Sugar sales Sale of by product Other income

Petrol pump

INTERPREATION:

The sugar sales in the year 2013-14 areRs. 403.85 Lakh and the variance of budgeted and

actual is-5.50%.
The sales of by product in the actual is Rs. 230.53 Lakh while the variance is 2.58%
In the other income a variance of 0.69% can be seen. This shows a slight increase in

actual other income than the budgeted other income.

Petrol pumpincomein actual income is zero.

A.G.I.M.S.,Sangli

Page 32

MBA Program

Particulars
Sugar can purchased &related
expenses
Salary & wages
Store & repairs
Production& sale expenses

Shivaji University, Kolhapur

Budgeted

Actual

Variance

666.27
274.35
237.55

344.96
288.40
265.75

-0.48%
5.12%
11.87 %

216.60

254.55

17.52%

11.72
87.31
51.90
1545.7

66.61
39.07
44.48
1304.12

66.3447%
-55.2514
-16.68%
-18.62%

Administrative expenses
Interest on loan
Depreciation
Total

6. Payment 2013-2014 (Rs. in Lakh)

Table No:VI

A.G.I.M.S.,Sangli

Page 33

MBA Program

Shivaji University, Kolhapur

Chart No:-VI
700
600
500
400
300
200
100
0

Budgeted
Actual

INTERPREATION:

The budgeted sugarcane purchased and related expenses are666.27Lakh whereas the
actual expense showsRs. 344.96Lakh and the variance is -0.48%.
The budgeted salary and wages amount is Rs. 274.35 Lakh however the actual expenses
on salary and wages are Rs. 288.40 Lakh.
The store and repairs actual expenses increased byRs. 265.75 Lakh.
Production and sales expenses increased by actual expenditure are Rs. 254.55 Lakh.
Actual administrative expenses are increased which isRs. 66.61 Lakh.
Interest on lone isdecreased by RS 39.07 Lakh.
Depreciation is actual expenditure is Rs 44.48 Lakh.

A.G.I.M.S.,Sangli

Page 34

MBA Program

Shivaji University, Kolhapur

Year

Budgeted
(Total)

Actual
(Total)

Variance

2011-2012

851.7

865.54

1.59%

2012-2013

877.35

819.78

-6.56%

2013-2014

1178.72

1146.65

-2.73%

7. Receipt:Budgeted and Actual (Rs. in Lakh)

Table No:VII

Chart No: VII

A.G.I.M.S.,Sangli

Page 35

MBA Program

Shivaji University, Kolhapur

1400
1200
1000
800
Budgeted
600

Actual

400
200
0
2011-2012

2012-2013

2013-2014

INTERPREATION:

The year 2011-12 in budgeted total income isRs851.7 lakh but compared the actual

income is increased to 865.54 Rs. Lakh.

The year 2012-13 in increased the budgeted total income is Rs.877.35 Lakh but the actual

income is decreased to Rs.819.78 lakh.

The year 2013-14 in budgeted total income isincreasedRs. 1178.72 Lakh but actual total
income is decreased 1146.65 Rs. lakh.

A.G.I.M.S.,Sangli

Page 36

MBA Program

Shivaji University, Kolhapur

8. Payment:Budgeted and Actual (Rs. in Lakh)

Table No:VIII

Year

Budgeted
(Total)

Actual
(Total)

Variance

2011-2012

693.37

637.54

-8.05%

2012-2013

958.48

679.04

-29.15%

2013-2014

1545.7

1304.12

-18.62%

Chart No: VIII

A.G.I.M.S.,Sangli

Page 37

MBA Program

Shivaji University, Kolhapur

1800
1600
1400
1200
1000

Budgeted

800

Actual

600
400
200
0
2011-2012

2012-2013

2013-2014

INTERPREATION:

In the year 2011-12 total budgeted purchases isto Rs.693.37 Lakhs but actual expenditure

is decreased to Rs.637.54 Lakh.

The year in 2012-13 budgeted totalsis Rs.958.48 Lakh but the actual expenditure is

decreased to 679.04 Rs Lakh.

The year in 2013-14 budgeted total is increased 1545.7 Rs. Lakh but the total actual
expenditure decreased to Rs304.12Lakh.

Findings and Suggestions:

Findings:
The findings are given below on the basis of data analysis and interpretation:
The cash budget is prepared for the current financial year byconsidering the
previous financial year of. Organizationsincome is compared to the budgeted and
actual. In the financial year 2011-2012, the actual income is more than the
budgeted one. The variance is of 1.59%. Whereas the expenditure is decreased by
-8.05%. (Table No VII and VIII)
In thefinancial year 2012-2013the actualincome is decreased than the budgeted
one giving a negative variance of 6.56%. The actual expenditure is decreased in
the same year showing negative variance of 8.05%.(Table No VII and VIII)

A.G.I.M.S.,Sangli

Page 38

MBA Program

Shivaji University, Kolhapur

For the financial year 2013-2014 the actual income is increased compared to
previous financial year but it is less than the budgeted one showing negative
variance of 2.73%. (Table No VII and VIII)
In financial year 2013-2014, the actual sugar sales have decreased as compared to
the other two years.(Table No I, III and V)
The sale from byproducts has always shown decrease in actual sales.Also there is
no income from Petrol pump in the year 2013-2014 (Table No I, III and V).
The purchases related to sugarcane are the same for consecutive two years and it
has decreased in the year 2013-2014.(Table no II, V and VI)
The salary and wages, interest on loan and depreciation are on the increasing side.
(Table no II, V and VI)
The administrative expenses in the year 2013-2014 are decreased. (Table no II, V
and VI)

Suggestions:
On the basis of findings, suggestions are as follows:
The factory should continue in preparing cash budget in the future.
It may be noted that the preparation of cash budget (as per receipt & payments method)
require forecast of different receipt and disbursement by the firm during each of the
interim period.
For improvement and the modifications it is suggested thatthe factory can carry out a
yearly or quarterly bases, receipt and payment analysis.

A.G.I.M.S.,Sangli

Page 39

MBA Program

Shivaji University, Kolhapur

The factory can improve the financial position in future consequences.

The factory should increase their investments, to increase profit maximization.
It is suggested that factory try to reduce its operating costs, so that it will result in
increase their receipt.
The factory should have proper co-ordination between all the departments to make new
strategies.

Conclusion:
From the study, it can be concluded that:
It can be concluded that the budgetary control is treated as one of the better techniques
for minimizing cost and maximizing profit in the factory.
A study of cash budget is very essential to understand the receipt and payment of the
factory where cash transactions are considered.
Here, the financial position of the factory is in good condition due to increase in the sugar
sales.

A.G.I.M.S.,Sangli

Page 40

MBA Program

Shivaji University, Kolhapur

It indicates the budgeted and actual performance vary with each other for a particular
year but not for all the financial years.

As the finance department is the soul of any organization, budgetary control helps the
organization by making finance department effective.

Bibliography
Books:
Financial Management Khan M. Y & Jain P. K., 2007 by Tata McGraw Hill
Publishing Company Limited New Delhi.
Fifth Edition
Financial Management Pandey I. M. 2005 by Vikas Publishing House Pvt. Ltd.
Ninth Edition
Research Methodology - Kothari C.R. & Garg Gaurav, 2014 by New Age
International Publishers, New Delhi.
Third Edition
A.G.I.M.S.,Sangli

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MBA Program

Shivaji University, Kolhapur

Cost & Management Accounting Arora M.N. , 2011 by Himalaya Publishing

House, New Delhi
Third Edition
Financial Reports:
Financial

reports

from

the

year

2011-2013

of

ShriDattaShetkariSahakariSakharKarkhana Limited Shirol.

Websites:
www.investopedia-cash budget/meaning.com

Profit & Loss Account

Expenditure

2010-11

2011-12

2012-13

Receipts

Cane
Sugar
purchase & 32418930 394471 39566663 Production
12.12
8617
66.58
related
Value
expenses
(including
Duties)
Salary &
By-product
27543783 259986 26489381 Production
Wages
7.01
237
5.29
value
(including
duties)
Stores &
Co21287970 232663 22214958 generation
repairs
1.49
914
6.30
Receipts
Production
Other
23596006
247169
22463513
& sales
Income
.72
77
.06
expenses
A.G.I.M.S.,Sangli

Page 42

2010-11

2011-12

2012-13

378668 4358470 45067281

8870.9
012
23.22
5

196103
013.23

2051223 26430872
48
6.05

458302 6691414 32109097.

39.50
3
90
818418 1518577 91321871.
07.45
18
99

MBA Program
Excise Duty

Shivaji University, Kolhapur

16287164 155107 15391956

7.92
146
1.23

By-product
236398 1029532 6132768.2
Profit
8
(Distillery) 56.57

Administrati
Petrol Pump
7273383 1349201.1
122292
ve expenses 54134776 642420 76427087
6
4
Profit
.25
99
.01
2.19
63474650 552431 48405111
.00
45
.00
Depreciation 50608547 640138 74761966
.00
97
.00

Interest

Price
Fluctuation
Fund
Project Fund

15000000 300000 40000000

00
.00
.00
21277000 200000
.00
00

40000000
.00

Provision for
loan
repayment
Net profit 14153531 543555 2262782.
.38

Total

11

41353267 4856127 49019497

589
09.89
88.58

A.G.I.M.S.,Sangli

Page 43

Total

413532
48561275
6709.8
89
9

49019497
88.58