cos accounting(final)
TRANSCRIPT
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This is to certify that the undersigned have assessed and evaluated the project
submitted by student of M.Com. Part - I
(Semester I) for the academic year 2012-13. This project is original to the
best of our knowledge and has been accepted for Internal Assessment.
Name & Signature of Internal Examiner
Name & Signature of External Examiner
PRINCIPAL
Shri Sunil B. Mantri
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I, student of M.Com. (Part I) Roll No.: hereby
declare that the project titled
for the subject
submitted by me for SemesterI of the academic year 2012-13, is
based on actual work carried out by me under the guidance and supervision of
. I further state that this work is original and not submitted
anywhere else for any examination.
Place:
Date:
Name & Signature of Student
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ACKNOWLEDGEMENT
I am thankful to Karnataka Co-operative Milk Producers Federation (KMC) for giving me an
opportunity to conduct research work in their esteemed organization. I am honored to take
this opportunity to sincerely thankMr. Unni Krishnan, Assistant Manager, KMC, for his
keen interest, guidance, continuous encouragement, support and help throughout the period of
the project.
I wish to express my sincere gratitude to Prof. Kedar Bhide for having helped me get a
better perspective of the subject matter and conduct the study effectively.
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Executive Summary
Hassan Milk Union is the producer of milk and various milk
products and prepares a budget estimating the various expenses and
income for each financial year. The budget is prepared by the
accounts department in consultation with the various other
departments. However, the estimated figure does not match with the
actual figures always. Milk procurement is based on population of
milch animal, availability of green fodder. It is almost impossible to
predict the exact figures and so deviations are bound to occur. Thus, it
becomes necessary to identify the deviations and analyse the reasons
for the same. Thus, this study focuses on the calculation of the
deviation and ascertaining the reasons for the same.
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1.1ObjectivesAn effective budgeting system is very vital to the success of any organization. Thus a
detailed study on the budget and the budgetary system is being carried out with the following
objectives:1. The main objective is to study about the budgetary system which is being followed at
Hassan Milk Union and evaluate the same to know the limitations in the existing
system.
2. Computation and analysis of variances for the purpose of control and performanceevaluation.
3. Basis on which the yearly budgets are prepared and measures taken to control invariances.
Thus, the detail study on the budgetary control system would give a knowledge on
how controlling is carried out in an organization.
1.2Scope of the StudyThe study is extended to the accounts department of Hassan Milk Union. The data has
been collected for the financial year 2008-09 and has been analysed using pictorial diagrams
like graphs, bar and column charts etc. Most of the data has been collected from secondary
sources.
1.3Research MethodologyThe study is conducted at Hassan co-operative Milk Producers Societies union
Limited, which is situated at B M Road, Hassan over a period of 10 weeks.
1.4Data Collection Method
In order to fulfil the objectives of the study the data has been collected from both-
Primary Data Secondary Data
Primary Data
To generate primary data for the analysis, discussion was made with company
assistant manager of finance, accountants and other officials from the accounts department.
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The data collected from such discussions are coordinated, analyzed and integrated in this
study.
Secondary Data
For gathering secondary data various other sources were used, which are-
Different accounting records of the company Magazines and journals Internets and other publication
Limitations of the Study
There are bound to be certain limitations while carrying out a study in anorganisation.
Due to busy schedule of the employees, it was not possible to get access toeach and every, information.
Due to certain constraints, current data could not be disclosed.
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2.1 Introduction
One the primary functions of the management is planning. Most of the planning
relates to individual situations and individual proposals. However, this has to be
supplemented and reinforced by overall periodic planning followed by continuouscomparison of the actual performance with the planned performance. Budgetary control has,
therefore, become as essential tool of management for controlling costs and maximizing
Budget and Budgeting are concepts traceable to the bible days, precisely the days of
Joseph in Egypt. It was reported that nothing was given out of the treasure without a written
order. History has it that Joseph budgeted and stored grains which lasted the Egyptians
throughout the seven years of famine.
Budgets were first introduced in the 1920s as a tool to manage costs and cash flows in
large industrial organizations. Johnson states that it was during the 1960s that companies
began to use budgets to dictate what people needed to do. In the 1970s performance
improvement was based on meeting financial targets rather than effectiveness. Companies
then faced problems in the 1980s and 1990s when they were not willing to spend money on
innovations in order to stay with the rigid budgets; they were no longer concerned about how
customers were being treated; only meeting sales targets became essential.
Budgeting in business organizations is formally associated with the advent of
industrial capitalism for the industrial revolution of the eighteenth century, which presented a
challenge for industrial management.
Glautier and Under (1987) state that the emergence of scientific management
philosophy with its emphasis on detailed info as a basis for taking decision provided a
tremendous impetus for the development of management accounting and indeed budgeting
techniques.
However, budgeting at the early stage of its development was concerned with
preparing and presenting credible information to legitimize accountability and to permit
correct performance evaluation and consequently, rewards.
Over the years, the function and focus of budgeting has shifted considerably and
business organization became more complex and their environment became dynamic coupled
with the emergence trend, the term budget and budgeting have been differently defined and
examined by various scholars in several ways.
The Institute Of Cost and Management Accountants (UK) defines a budget as a
financial and/ or quantitative statement, prepared and approved prior to a defined period of
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time, of the policy to be pursued during that period for the purpose of attaining a given
objective. It may include income, expenditure and the employment of capital.
2.2 Elements of a Successful Budget PlanThe success of the budgeting process in an organization depends on the following
essential elements:
Accurate forecasting of business activities. Coordinating business activities. Communicating the budgets. Acceptance and cooperation. Reasonable flexibility. Providing a framework for evaluation.
2.3 Budgeting Process
The budgeting process varies widely from one organization to another. Differences in
management styles, organization objectives, structure of competition and such other factors
affect the procedures companies adopt in budget preparations. However, the common steps
are as follows:
Obtaining estimates of sales, production levels, expected costs and availabilityof resources from each sub-unit/division/department.
Coordinating estimates. Communicating the budget to responsible managers and the concerned
departments.
Implementing the budget plan. Reporting the interim progress towards budgeted objectives.
2.4 Fixed and Flexible Budgeting Fixed Budgeting
Fixed Budgeting
The Institute of Cost and Management Accountants, London, defines a fixed budget
as the budget which is designed to remain unchanged irrespective of the level of activity
actually attained. It is based on a single level of activity. Fixed budgets do not change when
production level changes. This budget is rarely used as the actual output is often significantly
different from the budgeted output.
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Flexible Budgeting
A flexible budget is a budget that is prepared for a range, i.e., for more than one level
of activity. It is a set of alternative budgets to different expected levels of activity. This
budget is also known as variable budget, dynamic budget, step budget, sliding scale budget,
expense formula budget and expense control budget. The underlying principle of a flexible
budget is that every business is dynamic, ever-changing and never static. A flexible budget
has the following features:
1. It covers a range of activity.
2. It is flexible and facilitates performance measurement and evaluation.
2.5 Types of Budget
Budgets are the end process of the budgeting process. The number and types of
budgets in a business enterprise depends on the size and nature of business. However, in a
manufacturing concern, the following budgets are generally prepared:
(A) Operating and Functional Budgets:
1. Sales budget.
2. Production budget.
3. Production cost budget.
(i) Direct material budget.
(ii) Direct labour budget.
(iii) Factory overhead budget.
4. Ending inventories budget.
5. Cost of goods sold budget.
6. Selling expense budget.
7. Administrative expense budget.
8. Budgeted income statement.
(B) Financial budgets:
1. Capital expenditure budget.
2. Research and development budget.
3. Cash budget.
4. Budgeted balance sheet.
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5. Budgeted statement of changes in financial position.
Sales Budget
The most important budget, which all other budgets are contingent upon, is the sales
budget. Sales budget forecasts the future sales. The information about past performance is the
starting point for sales forecasting. After collecting all relevant information sales budget is
prepared.
Production Budget
After preparing sales budget, the production budget is prepared. A production budget
is stated in physical units. It specifies the number of units of each product that must be
produced to satisfy the sales forecasts and to achieve the desired level of closing finished
goods inventory. Units to produce= budgeted sales + desired closing inventory of finished
goodsbeginning inventory of finished goods.
Production Cost Budget
A production cost budget summarizes material budget, labour budget, the factory
overhead budget and may be expressed and analysed by departments and or products.
Ending Inventories Budget
An inventory budget can be prepared to find out the values of direct materials and
finished goods inventory.
Cost of Goods Sold Budget
A cost of goods sold budget summarizes direct material, direct labour, factory
overhead and ending inventory.
Selling Expense Budget
This budget shows the budgeted cost of promoting sales for the budget period. It is
also known as marketing expense budget.
Administrative Expense Budget
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This budget covers the administrative costs for non-manufacturing business activities.
It contains expenses like directors remuneration, legal charges, audit fees, salaries, rent,
office expenses, postage, telephone etc.
Budgeted Income Statement
A budgeted income statement summarizes all the individual budgets, i.e., sales
budget, cost of goods sold budget, selling budget and administrative expense budget.
Capital Expenditure Budget
The budgeting of capital expenditure is one of the important areas of managerial
decisions. Capital expenditure budgets are prepared for both short and long- range projects
depending on the requirements of the business firm. Short- range projects are implemented
during the accounting period. Long-range projects are not executed in the current period; they
are expressed only in general terms. They become budget commitments only when the time
for their implementation approach
Cash Budget
A cash budget contains detailed estimates of cash receipts (cash inflows) and
disbursements (cash outflows) for the budget period or some other specific period. Such a
budget helps to ascertain the cash requirements needed for a plant or equipment expansion
programme. It shows the availability of funds for a given period of time and thus helps to
make financial decisions.
Projected Balance Sheet
A projected balance sheet represents the expected financial position at a particular
date. The projected balance sheet automatically determines the arithmetical accuracy of other
budgets since they are used in preparing the forecasted balance sheet.
Budgeted Statement of Changes in Financial Position
The projected statement of changes in financial position is usually prepared from data
in the budgeted income statement and changes between the projected balance sheet at the
beginning of the budget period and projected balance sheet at the end of the budget period.
This projected statement is very useful to management in the financial planning process.
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2.6 Budgetary Control
Budgetary control is a means of control in which the actual state affairs is compared
with the budget so that appropriate action may be taken with regard to any deviations before
it is too late. The use of a budget to control a firms activities is known as budgetary control.Budgetary control has the following main objectives:
1. To provide an organized procedure for planning. It provides a detailed plan of
action for a business over a definite period of time.
2. To coordinate all the activities of various departments of a business firm in such a
manner that the maximum profit will be achieved for the minimum use of resources.
3. To provide a means of determining the responsibility for all deviations from the
plan (budget) and to supply information on the basis of which necessary corrective action
may be taken. Thus, budgetary control has the objective of controlling cost.
2.6.1 Budgetary Control as a Management Tool
Budgetary control has become an essential tool of management for controlling costs
and maximizing profits. It may be conceived as one of the supreme examples of the
rationality in management. It is a useful management tool in comparing the current
performance with the pre-planned performance with a view to attain equilibrium between
ends and means, output and effort. It corrects the deviations from pre-planned path through
the media of observation, research planning, control and decision-making and thus helps in
the performance of the future activities in an orderly way. It uncovers uneconomies in
operations, weaknesses in the organization structure and minimizes wasteful spending. It acts
as a friend, philosopher and guide to the management. Its advantages to the management can
be summarized as follows:
i. Brings Economy in Working It brings efficiency and economy in theworking of the business enterprise. Budget helps to achieve a goal and attain
the target. The budget helps to bring about efficiency in the results.
ii. Establishes CoordinationIt coordinates the various divisions of a business,namely, the production, marketing, financial and administrative divisions. It
forces the executives to think and think as a group. This results in
smoother operation of the entire unit.
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iii. Guards Against Undue Optimism It guards against undue optimismleading to over-expansion because the targets are fixed by executives after a
careful thought.
iv. Acts as a Safety Signal It acts as a safety signal for the management. Itshows when to proceed cautiously and when manufacturing can be safely
undertaken. It serves as an automatic check on the judgment of the
executives as losses are revealed in time which is a caution to the
management to stop wastages.
v. Optimum Mix It helps management in obtaining the most profitablecombination of different factors of production. This results in a more
economical use of capital.
vi. Management by Exception Budgetary control reveals variations of actualperformance from budgeted performance. The variations point to the root
inefficiencies and thus enabling the management to consider only the items
that do not go according to plan and leave the others, i.e., to concentrate on
exceptions.
2.6.2 Effective Budgetary Control
In order to make the budgetary system really effective, the management should pay
attention to the following aspects:
Consultation with Non-financial Executives- The effective participation of non-
financial executives should be solicited in the formulation of the budget in order to make
each manager emotionally committed to the budget.
Total Corporate Exercise- Budgeting should be a total corporate exercise.
Piecemeal budgeting cannot be effective.
True Delegation of Authority and Responsibility- There should be a true
delegation of authority and responsibility beginning with top management itself. Each
executive should have maximum opportunity to take decisions within the scope of his/her
authority.
Past Experience- Past experience is a useful guide for the future. It is, therefore,
necessary that points revealed by past experience should be taken note of while formulating
plans for the future.
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Minimum Limits only- budget should be taken as only minimum and not the
maximum level of performance. However, budget should not be suffocating. Sufficient
freedom should be given to the concerned executives within the overall framework.
Good Reporting System- Budgeting cannot be successful unless there is a properfeed-back system. The reporting system should be so devised that it not only tells about major
variations but also the persons who are responsible for these variations. The causes for the
variances should be analyzed and the management should be kept informed about the major
and proper remedial measures should be taken by the management at appropriate level and
appropriate time.
2.6.3 Calculation of the Variances in Budgetary Control
Variances = Actual yearly totalBudgeted yearly total
% of variances = variance amount X 100
Budgeted yearly total
2.6.4 Limitations of Budgetary ControlThe budgetary control system is not a perfect tool. It has its own limitations which are
as follows:
Budgeting and Changing Economy- The preparation of a budget which gives arealistic position of the firms affairs under inflationary pressure and changing
government policies is really difficult. Thus, the accurate position of the
business cannot be estimated.
Time Factor- Accuracy in budgeting comes through experience. Managementmust not expect too much during the development period.
Not a Substitute for Management- Budget is only a management tool. Itcannot substitute management. Besides that no budgetary program can be
successful unless adequate arrangements are made for supervision and
administration.
Cooperation Required- The success of the budgetary control depends upon thewilling cooperation and teamwork. Budget officer must get co-operation from
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all departmental managers. These managers must feel the responsibility for
achieving or bettering departmental goals laid down in the budget.
3.1 Industry Scenario
India is called the country of villages where it covers nearly 70% of its total area. In
this relation we can say that Indian economy is base on rural activities and their development.
Therefore we have to give prime importance to the rural activities.
A dairy is a place for handling milk and milk products. Technology refers to the
application of scientific knowledge for practical purposes. Dairy technology has been defined
as that branch of dairy science which deals with the processing of milk and the milk products
on an industrial scale. In developed dairying countries such as the USA the year 1850 is seen
as the dividing line between farm and factory scale production. Various factors distribute to
this change in these countries such as the concentration of the population in cities where the
jobs are plentiful, rapid industrialization, improvement of transportation facilities,
development of machines etc., The rural areas are identified for the production, urban areas
are for the processing of the milk.
3.2 Origin of Dairying in India
Around 1500 BC to 2000 BC the Aryans were first to domesticate cattle. Use them for
tilling their land obtain milk to be consumed as food. Again it were Aryans who priced the
milk of a cow more than its meat, forbade its slaughter, created legends about it and even
worshipped it. Hindus even to this day consider cow as sacred. Besides it were only the East
(India/China) which domesticated buffalo as milch animal and succeeded so well that today,
more than half the total production of milk in India is obtained from buffalo.
Most of the farmers have one milk animal; they sell the milk through local milk
contractors or middlemen. These traders have always exploited the poor and uneducated milkproducers. It was in the late forties, when integrated approach for dairy development based on
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farmers owned milk co-operative was first adopted at Anand. The system includes milk
procurement productions and marketing through farmer co-operatives. In India, the market
milk technology may be considered to have commenced in1950 with the functioning of the
Central Dairy of Aarey Milk Colony and milk product technology in 1956 with the
establishment of AMUL dairy, Anand. The system of collective ownership, operation and
control of milk trade by farmers came to be known as ANAND PATTERN. Anand pattern
has given them an opportunity to have access to the modern technology. The Brand ' is the
household name for Pure and Fresh milk and milk products.
The premises institution is NDDB and IDC for application of the Anand pattern
throughout the country. The whole project under which replication was envisioned, is named
as operation flood. The success of Anand pattern depends as establishing a strong co
operative infrastructure at the grass root level, making economically viable to strengthen.
Dairy industry offers employment opportunity to the people so as to help the farmers
to get fair price of milk. The farmers are provided with medical facilities to their cattle. Milk
is becoming an alternative life line in our rural economy. With the advent of white revolution
that is SKHEERA KRANTI in the same pattern of Denmark and Holland.
Export of dairy products plays an important role in our foreign trade. It increases the
foreign exchange and national income of our country and also economic development of our
country.
3.3 History of Indian milk market industry:
Organized milk handling was made in India with the establishment of Military DairyFarms Handling of milk in co operative milk unions established all over the country
on a small scale in early stages.
Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945. Pasteurization and bottling of milk on a large scale for organized distributed was
started at: Aarey - 1950 Calcutta - 1958 Delhi - 1959 Mumbai - 1961 Madras - 1963
Establishment of milk plants under the 3 year plans for dairy development all overIndia. They were taken up the dual object of increasing the national level of milk
consumption and ensuring better returns to the primary milk producer. Now India is
one of the richest milk producing country in the world. In 1999 it produced milk up to
770 laths tons and the milk valued up to 75000 cores and 13% of total production in
the world is produced by India itself.
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3.4 Dairy Industry in Karnataka
3.4.1 Background
In June 1974, an integrated project was launched in Karnataka to restructure and
reorganize the dairy industry on the co-operative principle and to lay foundation for a new
direction in dairy development. Work on the first ever, World Bank aided dairy development
project was initiated in 1975. Initially the project covered 8 southern districts of Karnataka
and Karnataka Dairy Development Corporation was set up to implement the project. Dairy
developmental activities was set up with dairy co operative societies at grass root level, milk
unions at the middle level and dairy development corporation at state level as an apex body
with the responsibility of implementing Rs.51 cores project. After the closure of operation
flood II the dairy development activities which continued under operation flood III ended on1996. The post operation flood works are financed by NDDB under different terms and
conditions.
KMF has 13 Milk Unions throughout the State which procure milk from Primary
Dairy Cooperative Societies (DCS) and distribute milk to the consumers in various
Towns/Cities/Rural markets in Karnataka.
The Federation has a Board consisting representatives of Milk Producers and the
Government nominees. The day to day functions of the Federation is managed by a group of
professional managers headed by the Managing Director.
Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the Apex Body
in Karnataka representing Dairy Farmers' Co-operatives. It is the second largest dairy co-
operative amongst the dairy cooperatives in the country. In South India it stands first in terms
of procurement as well as sales. One of the core functions of the Federation is marketing of
Milk and Milk Products.
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Mother Dairy, Bangalore, a Unit of KMF, is set up by NDDB on 7.12.1984. The
Dairy which has expanded from 4LLPD to capacity of 7.00 LLPD has a unique nature of
homogenising the milk and selling to its consumers through 50 Automatic Bulk Vending
Booths, 83 Shoppers and 70 FRP tanks. The Dairy also caters Milk in sachets and Milk
Products through its 289 retailers. The average sale of milk per day is 2.60 Lakh litres during
the year 2008-09. The entire requirement of milk is procured from Kolar Milk Union. The
Dairy produces Butter, Ghee, Curds, and Ice Cream & Skim Milk Powder. The activities of
all the Departments at Mother Dairy are being carried out through an on- line computer
system
3.5 Profile of Hassan Co-Operative Milk Producers Societies Union Ltd.
3.5.1 Introduction
The Union was registered on 30th March 1977 with the operational jurisdiction
extended to 3 Districts namely Hassan, Kodagu &Chikkamagalur.
The Dairy was setup under the Operation Flood II & III and has a processing capacity
of 1.2 Lakh Litres of milk per day. The Union also has a Dairy at Kudige with a capacity of
50,000 litres per day which is the first Dairy in Karnataka State started during January 1955.
The Union has three Chilling Centres at Birur, Holenarasipur and channarayapatna
with chilling capacity of 20000 liters per day at Birur and Holenarasipura and 100000 liters
per day at Channarayapatna. The Union also produces Ghee, Peda, Curds, Khova and Butter
Milk. The Union procures on an average 4.07 Lakh litres of milk and sells 1.04 Lakh litres
per day. There are 5 Bulk Milk Coolers & 46 Automatic Milk Collection Units in the Union.
Hassan Dairy was established under the World Bank aid with an initial handling
capacity of 60,000 KGPD and was being managed by Karnataka dairy development
corporation. In the year 1987 with an idea of bringing all milk allied activities such as milk
procurement, milk processing and milk marketing the Hassan dairy and the Kudige dairy (the
first commission dairy plant) were handed over to Hassan Co operative Milk Producers
Societies Union. The integrated system of monitoring the milk procurement, processing and
marketing activities by milk producers themselves was established.
3.5.2 Mission Statement
Hassan milk union aims to render the best services at normal cost to its members to
increase milk production and produce good quality milk by paying remunerative price
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throughout the year, thereby improving their economic and social condition while ensuring
high quality milk and milk products to the delighted level of the consumers at competitive
price.
3.5.3 Vision Statement
The union thrives hard to adopt the modern and eco friendly technologies to produce
milk and milk products of international standards to make our presence prominent in the
global market.
3.5.4 Aims and Objectives
Hassan Co-Operative Milk Producers Societies Union is completely an autonomous
body consisting of representatives from milk producers as policy makers
To produce continuous and remunerative market for the surplus milk in the ruralareas.
To supply quality milk to customers in the urban areas at a competitive price. To provide the technical inputs necessary to produce good quality milk and to
facilitate increase in milk yield.
To provide self employment to rural folk and to make them economically selfsustainable by which the migration of rural folk to urban areas is minimized.
To prevent the role of the middle men in the milk business and to increase theirreturns.
To establish a bridge between rural and urban folk and to play a vital role in changinghe social and economic status of the rural folk.
3.5.5 Role of Diary Co-Operative Society
The dairy co operatives are organized in rural areas for the milk producers keeping in
view the domestic principles and values. These societies educate, guide, and support the milk
producers in dairy development activities.
3.5.6 Functioning of Diary Co-Operatives
The dairy co operative function all through the year in two shifts, this will provide
continuous market for the surplus milk produced and the payment for the milk supplied will
be distributed to the producers on the predetermined day. Input activities include:
Veterinary services like regular vaccination
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Artificial insemination services
Supply of balanced cattle feed and fodder slips
Training facilities
3.5.7 Growth of the Union
The milk union which was established in the year 1977 with 100 functional dairy co
operatives collecting 10,300 Kgs of milk per day is procuring on an average 386462 Kgs per
day from 1122 co operatives as on date with the increase in milk production the Hassan dairy
with the initial capacity of 60,000 KGPD was expanded to 120000 KGPD during 1996.The
union has also established three chilling centers with a chilling capacity of 20,000 KPD and
100000 KPD.
3.5.8 Activities of Hassan Milk Union
1. Organization of dairy co operative societies: As at the end of March 2010, 1197
societies have been registered. Out of functional societies, 330 women societies are
functioning.
2. Membership Enrolment: As on 31st March 2010 173396 members have been
enrolled of which 71046 are small farmer48866 are marginal farmers, 22199 are agriculturelabourers and 31285 are other big farmers.
3. Milk procurement activities: The present average milk procurement from 1122 milk
societies is 386462 Kgs/day.
3.5.9 Product Profile
Milk is marketed under Nandini brand name in different types. The pricing adopted is
mainly on four categories namely: Double Toned Milk Rs 14 /1000ml Toned MilkRs 16 /1000ml
Standardized (homogenized) Milk Rs 18 /1000ml
Full Cream Milk Rs 20 /1000ml
Apart from this, milk is marketed in 3 variants-
Nandini Goodlife with 3.5% fat and 8.5% SNF
Nandini Smart with 1.5% fat and 9% SNF
Nandini Goodlife Slim with 0.5% fat and 9% SNF
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Types of milk and milk products marketing by HAMUL
Nandini Toned Milk
Karnatakas most favourite milk, Nandini Toned Milk is a Fresh and pure milk
containing 3.0% fat and 8.5% SNF. Available in 500ml and 1 litter packs. Better to use
within a day from the date of pack. Maximum Retail Price is Rs. 13/- per litre.
Nandini Homogenized Toned Milk
Nandini Homogenized Milk is pure milk containing 3% Fat and 8.5% SNF. This is
homogenized and pasteurized. Consistent right through, it gives you more cups of tea or
coffee and is easily digestible. Available in 500 ml packets.
Nandini Full Cream Milk
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Nandini Full Cream Milk, Contains 6% Fat and 9% SNF. A rich, creamier and tastier
milk, ideal for preparing home-made sweets and savouries- available in 500ml and 1 litre
packs. MRP Rs. 15/- per litre
Good life
Cow's pure milk, UHT processed bacteria free in a tamper-proof tetra-fino pack which
keeps this milk fresh for 60 days without refrigeration until opened. Available in 500 ml Fino
and in 200ml bricks at premium stores across the state.
Smart
Cow's pure milk, homogenized, double toned UHT processed milk bacteria free in a
tamper proof tetra fino pack which keep the milk fresh for 60days without refrigeration until
opened. At present the milk is being directly home delivered on request? Available in 500ml
Pack.
Slim
Cow's pure milk, homogenized, Skimmed. UHT processed milk bacteria free in a
tamper proof tetra-fino pack which keep the milk fresh for 60 days without refrigeration until
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opened. Nandini Goodlife slim skimmed milk is 99.5% fat free. Available in 500ml Fino and
in200ml bricks at premium stores across the state.
Shubham
Buffalo's milk, 100% pure pasteurized processed and packed hygienically. This milk
has 5% fat and 9% SNF. Available in 500ml and litre, packs.
Mysore pak
Fresh and tasty, Nandini Mysore Pak is made from quality Bengal Gram, Nandini
Ghee and Sugar. It's a delicious way to relish a sweet moment. Available in 250gms.PP
container shrink packed to preserve freshness. Can be kept for 7 days. Advised to consume
fresh to enjoy its excellent taste.
Nandini Curd
Nandini Curd made from pure milk. Its thick and delicious giving you all the
goodness of homemade curds. Available in 200 grams and 500 grams packs. Nandini butter is
rich smooth and delicious.
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Nandini Ghee
A taste of purity, Nandini Ghee made from pure butter. It is fresh and pure with a
delicious flavour. Hygienically manufactured and packed in a special pack to retain the
goodness of pure ghee, having Shelf life of 6 months at ambient temperatures. Available in
200ml, 500ml, 1000ml, and sachets and also in 5lts tins and 15.0 kg tins.
Nandini Butter
Nandini spiced buttermilk is a refreshing health drink. It is made from quality curds
and is blended with fresh green chillies, green coriander leaves, asafoetida and fresh ginger.
Nandini spiced butter promotes health and easy digestion. It is available in 200ml packs and
is priced at most competitive rates, so that it is affordable to all sections of people.
Nandini Butter Milk
Nandini butter milk is Rich, smooth and delicious. Available in 100 grams (salted),
200 grams and 500 grams cartons both salted and unsalted.
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Cheese
Delicious Cheese, processed with utmost care to ensure the smooth and rich taste of
pure cheese. It's highly nutritious an excellent source of milk proteins and a rich source of
calcium. Need to be kept under refrigeration. Available in 100gms carton
Paneer
Pure and tasty dishes with Nandini Paneer! A fresh, nutritive product made by
coagulating pure milk, it is an excellent source of milk protein. Nandini Paneer is ideal forvegetarian dishes such as mutter Paneer, sag Paneer and various other dishes. Refrigerated
storage in preferable. Available in 200gms pack, specially packed in a five layer film and
vacuum packed to preserve its quality. Bulk packings are also available.
Flavoured milk
Sterilized flavoured milk, a nutritious and healthy drink and an all-season wholesome
drink available in five different flavours - pineapple, rose, badam, pista and natural orange.
Apart from refreshing energy. Available in 200ml.
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Nandini Peda
No matter what you are celebrating! Made from pure milk, Nandini Peda is a
delicious treat for the family. It is maintained at room temperature, for approximately 7 days.
Available in 250grams pack containing 10 pieces each.
3.5.10 Production DepartmentEvery morning by 9.30am, the scheduled is drawn depending on the consolidation of
all the information from different units. Entire milk has to dispatched before the next raw
milk comes in. All the availability options should be weighed and instant decisions have to be
taken. Presently the day to procurement on an average comes up to 2,50,000 litres per day.
All the indents are moved there by 11am and this has to be intimated to the packing division.
Packing material purchase is based on the integrated business plan. The rolls have to
be weighed and bought out because by the end of the month the statement has to be prepared
if the loss is 2% over and above the loss is recovered from the suppliers. If the loss is >1%
and
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3.5.11 Marketing Department
Marketing should be considered as the core business function in this competitive
world as it establishes, develops, and commercializes long term customer relationships and
helps in meeting organizational goals.
Pricing is a federal policy and KMF decides the marketing price of the milk end the
milk products. KMF has adopted pricing mainly on four categories namely
Double Toned Milk Rs 14/100ml
Toned Milk Rs 16/1000ml
Standardized (homogenized) Milk Rs 18/1000ml
Full Cream Milk Rs 20/1000ml
As Hassan Milk Union is procuring 4 Lakh milk per day and its local market requirement is
1.2 Lakh Kgs/day. As such the excess milk is being sent to sister unions and Interstate
federations and balance if any will be sent for conversion into butter and SNP. 3
3.5.12 Procurement Department
The milk co operative societies will be organized in villages where there is excess
milk production. The extension staff of the union will visit the villages and conducts the
survey about the village population, animal population and the availability of the surplus milk
and report to the office for consideration. The office will issue necessary instructions to
organize the societies.
Then the first Gramasabha meeting will be conducted and select the promoters to
promote the Dairy cooperative in the village and with the permission of Registrar of
Cooperative with the recommendation of Milk union the Village Chief promoter will
permitted to collect the share capital and with all fulfilment of required norms then proposal
will be sent to registrar of co operative department for registration. On registration, milk co
operative society will be commissioned and starts procuring milk from the producers. The
milk procured will be transported through trucks to nearby chilling centers and dairy where
milk is processed further. The society will be provided with veterinary services, AH services,
feed and fader services, and training and extension services.
The village dairy Cooperatives will receives payments for the milk supplied to Union
once in a week and the same will be distributed among its produce members every week and
day is fixed which is convenient to the concerned village.
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3.5.13 Stores/ Purchase Department
Purchase Purchase/stores Officer Sub staff Hassan Milk Union is having a separate
purchase department and purchases are made based on the requirements of various
department and purchases are made as per the relation laid out.
Hassan Milk Union is having full pledged stores which supplies materials to various
based on the indents or requirements and the people who are working in the stores are very
well worked in inventory management. Both purchase and store departments are working
under the supervision of manager dairy.
Stores:
The storage place for almost all necessary goods which come into the factory premises: But
here the store is the place where all these are there:
1. Packing materials
2. Stationery
3. Spares
4. Oil and lubricants
5. Sugar
6. Testing chemicals
7. Cleaning acids
8. Uniforms and Shoes
9. Cans for societies
10. Ledgers
The activity takes place in stores:
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Requisition letter: First the manager of concerned department depending upon the need for
the goods sends a requisition letter to the manager dairy and then once approved the same
reaches the stores in charge; the purchase section places an order.
Purchase order: But for the goods regular nature depending upon the stock level, the stores in
charge takes up the responsibility to place order and have the materials ready when ever
required. Here in the co operative sector as per the transparency act if the goods and where
the capital expenditure is involved, the enquire letters are sent the suppliers and who ever
quotes the least and also with quality gets the order.
And the same purchase order copy goes to
1. The supplier
2. The store in charge
3. Accounts section
4. Concerned user section
Purchase order also includes
1. Mode of payment after and before supply
2. Terms and conditions (taxes)
3. Delivery period
4. Mode of dispatch
Invoice
Against the purchase order the concerned supplier gives the invoice. Once the invoice
is received the cross checking of materials as per the specifications purchase order is done.
The concerned department communicated about the goods and the concerned person gives a
user section remark on the quality of the product. Hence the goods received note is sent to
concerned user section.
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3.5.15 Production Department:
The dairy works in 3 shifts to receive milk in the morning and evening shifts. The
milk received from DCS in cans will be tested for quality and weight is recorded. The
payment will be made based on the quality and the quantity. The milk received in tankers willbe weighed and tested and pumped into chillers and stored in insulator storage tank. The local
market needed quantity will be pasteurized and stored in insulated HMST for packing toned
milk, double toned milk and standardized homogenized milk. Apart from this, union also
produces ghee, Peda, flavoured milk, curds and butter milk.
The excess fat in the milk will be separated in the form of cream and issued for butter
making. The cream breaks into butter and butter milk where butter is issued for ghee making
and butter milk is tested for fat/COB (clout on boiling) and it will be reprocessed or will be
drained out. Based on the market demand, butter is drawn for ghee production and sale will
be packed as per requirement.
3.5.16 Achievements
Hassan milk union is procuring milk from all the 13 taluks of three districts andselling quality milk in all the taluks and small towns.
The union and all the dairy co operatives are being managed by the democraticallyelected boards from among the milk producers.
The technical input to dairy co operatives and the dairy plants are managed by welltrained, committed professionals and technical team.
91% of the milk co operative societies are operating under profit The union has successfully implemented the animal induction program for SC ST and
OBC since 1996 with the financial assistance from central and state governments and
rendered direct loans to the beneficiaries at lower interest rates.
254 women dairy co operatives (as on May 2009) have been organized since 1997under support training and education program(STEP)
The union has also implemented mini dairy scheme and bring entrepreneurialenvironment in the rural area.
The union has set up Artificial insemination facilities for dairy co operatives. The union has rendered emergency veterinary services round the clock. The union has implemented foot and mouth disease control program(FMDCP)
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Fertility camps are being conducted once in three months by inviting experts in thefield.
The union supplies quality fodder slips and seeds through the year and facilitates theavailability of green fodder.
The union is insuring the life of milk producers and dairy co operative staff with theco ordination from Life Insurance Corporation and National insurance company since
1997-1998 under samajika suraksha yojana.
The union has launched the YESHASHVINI program to the milk producerswherein the milk producers are provided with the best available medical facility at
free of cost.
Smokeless chula have been provided to the milk producers with an intention ofimproving the health of rural women folk.
The union has successfully implemented the Total energy management program andTotal quality management program (quality excellence from cow to consumer) since
2001 respectively.
Quality awareness programs are being conducted regularly for school children, housewives and consumers.
The union has got ISO 9001:2000 certification from TUV India, Mumbai. The unionhas got Energy Conservation Award
3.5.19 SWOT Analysis
Strengths
Procurement and Input( P&I) network
Goodwill
ISO 9001:2000 certified
Second largest producer
Vast market
Weaknesses
WTO standards
Advertisement execution in its early
Early stages of automation and computerization
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Opportunities
Enter rural market
Neutraceuticals
Exports
Threats
Entry of big players
WTO standards
Government policies
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4.1 Budget 2008-09 of the Union
The first objective of this study is to analyze the budget of the organization. The
budget of the organization is prepared by a budget committee with consultation with the
various departments. The budget is prepared on the basis of the estimations given by eachdepartment and the same is consolidated into a yearly budget by taking into consideration the
various sources of income and expenditure.
For the purpose of analysis, the budget of 2008-09 of Hassan Milk Union is
considered wherein the current year figures are compared with the actual of the year to obtain
the variations thereof.
4.2 Budget Process at Hassan Milk UnionThe budget prepared by any organization is an estimate of the various sources through which
revenue would be generated and the various expenditures which would be incurred during the
year. Excess of income over expenditure would result in net profit and excess of expenditure
over income results in net loss during the year. At Hassan Milk Union, the budget is prepared
by the accounts department with consultation from various other departments.
Estimation of Procurement of Milk from Various Societies
The budget of Hassan Milk Union mainly depends on the procurement of milk from its
various societies. Thus the estimation of the same plays a vital role in the budget process. The
accounts department obtains estimation on the quantity of procurement from the MIS
department based on the past experience and the trend. Procurement of milk depends on the
seasonal fluctuations. In the milk industry, a period from October to January is considered as
a flesh period during which there is abnormal procurement i.e. over and above the normal
procurement. A period of 3 months from March to June is considered as lean period during
which the quantity of milk obtained is less. The remaining months in the year generate
normal procurement. Also in the milk industry, once in 3 years is considered as lean period
wherein the procurement of milk reduces in all the diaries throughout the country. However,
there has been a change in the trend recently wherein in November the procurement is normal
and May to August is a period when the procurement is abnormal and January to April has
turned out to be lean period. Based on these trends, the MIS department estimates the
procurement and that is the basis on which the yearly budget is based.
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Marketing Plan is Set Out
The Marketing department of Hassan Milk Union lays down its marketing plan which gives
an estimate of the local sales of milk and various milk products. H.R.I.H.E, Hassan Page 54
55. A Study on Budgetary Control System Based on this plan, an estimate is made on the
milk which is to be sent to other diaries and what quantity of milk is to be sent for
conversion. Based on this, the transportation costs and conversion costs are estimated.
Target is Laid down by Different Departments
Each department of the Union lays down its own targets for which has finance to be provided
for by the accounts department in its budget. All this has to be incorporated for in the yearly
budget.
Costs are estimated
Based the plans of various departments, the total expenditure and revenue are penned down
in a prescribed manner which would estimate the net profit/ loss for the year.
4.3 Analysis of Budget
Here each item of the budget is calculated as a % of sales and analyzed. The yearly
figures are considered for these calculations.
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The table above shows the projected annual figures of the on various items for year
2008-09. It also shows the various incomes and expenditure as a % to sales. As per the
budget, the Hassan Milk Union is expecting a net profit of Rs 31, 32,000 for the year with a
net profit ratio of 0.19%. The major source of revenue is from sales of milk and milk
products in local markets and inter-diaries. There are certain other sources of income as well
like interest on deposits and other income. However, they contribute to only 0.15% and
0.37% respectively which indicates it is a minor source of revenue to them. The major
expense projected is purchase of milk and milk products which is about 86.35% of sales.
Hassan Milk Union procures milk from various societies at different rates. It is the basic raw
material required for processing into Skimmed Milk Pouches and for conversion to various
milk products like ghee, butter, Peda, buttermilk etc,
The graph depicts the budget in a diagrammatic manner. The graph shows that the
main items in the budget are sales and purchases. All the remaining items are very minor and
are thus hardly pointed on the graph.
4.4 Comparing the Actual with the Budgeted Figures and Computing the
Variances.
The table on the next page shows the annual budgeted figures and the actual figures
which is obtained from the audited reports of the union. The following 2 formulas have been
used to calculate the variances and the % of variances.
Calculation of Variance and % of Variance
Variances = Actual yearly totalBudgeted yearly total
% of variances = variance amount X 100
Budgeted yearly total
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The graph shows that the estimate of sales and purchase is very less compared to the
budgeted amount. The same can be shown using a pie-chart which shows the variances in the
various particulars.
4.5 ANALYSIS OF VARIOUS ITEMS ESTIMATED IN THE BUDGET
Opening Stock
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INTERPRETATION
The chart above shows the budgeted and actual results with regard to stock of milk and
various milk products at the beginning of the year. The budgeted figures were Rs 50.45 Lakh
and the actual expenditure incurred was Rs 155.14 Lakh. Thus, there is a variance of Rs
104.69 Lakh. The stock at the beginning of the year depends on the closing stock at the end
of previous year. The closing stock at the end of 2007-08 was Rs 155.14 Lakh which,
therefore, became the opening stock of the year 2008-09.
Purchase and Material Consumption
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the purchases
and material consumption. The budgeted figures were Rs 14167.26 Lakh and the actual
expenditure incurred was Rs 18810.83 Lakh. Thus, the variance is Rs 4643.57 lakhs which is
highly inconsistent.
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This variance is mainly due to high purchase of milk and milk products made during
the year. The Union accepts the entire quantity of milk which it procures from the various
societies at different rates depending on the profitability of the Union, and the purchases vary
substantially from the budgeted amount every year.
Procurement and Transport Expenses
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the procurement
transportation cost. The budgeted figures were Rs 372.97 lakhs and the actual expenditure
incurred was Rs 637.48 lakhs. Thus, the variance of Rs 264.51 lakhs is an adverse variance.
This variance is due to the addition of various routes from which the diary procures
milk. The number of societies from which milk is obtained as increased and an increase in
number of sources would obviously increase the transportation cost of procuring the raw
milk.
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Processing and Manufacturing Expenses
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the process
manufacturing expenses. The budgeted figures were Rs 438.54 lakhs and the actual
expenditure incurred was Rs 931.05 lakhs. Thus, the variance is Rs 492.51 lakhs which isquite high.
The deviation in the process manufacturing expenses is mainly due to the variation in
the conversion cost which shows a difference of Rs 174.68 lakhs. The conversion cost mainly
depends on the milk procured by Hassan Milk Producers Union Society. Whenever the mil k
procured is in excess, there would be no market for milk. In such case, excess milk is sent to
inter-diary and then after its sent for conversion to butter, SMP. As we have seen that the
procurement of milk was very high during the year, the conversion cost has also varied
considerably which in turn is the main cause for the process manufacturing process to
deviate.
Sales
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INTERPRETATION
The chart above shows the budgeted and actual results with regard to the sales
generated during the year. The budgeted figures were Rs 16405.07 lakhs and the actual
expenditure incurred was Rs 21852.33 lakhs. Thus, the variance of Rs 5447.26 lakhs is highly
a favourable variance.
Sales are the main source of revenue for any organisation. Thus, the higher sales it is
the better for the organisation. The higher variance in it has a positive impact. However it
becomes necessary to analyse the causes for it.
The deviation in sales is mainly on account of sales to inter dairies and other states
which have varied considerably. This is again due to high procurement during the year. The
excess of milk has been sold to various other diaries which have been a major source of
income. Also ghee has a very good demand in the local market near Hassan due to which the
sales of loose and sachet ghee is much more than anticipated.
Closing Stock
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the closing stock
at the end of the year. The budgeted figures were Rs 70.56 lakhs and the actual amount has
increased by Rs 248.09 lakhs. Thus, the actual closing stock at the end of the financial year
2008-09 was Rs 318.65 lakhs.
Closing stock depends on the sales generated, production during the year and also the
opening stock.
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Opening Stock + Production = Sales + Closing Stock
Closing Stock = Opening Stock + Production - Sales
As there is a variance in the opening stock, purchase and production and also in the
sales made during the year, the closing stock is bound to show variations from the anticipated
figures. The closing stock of this year becomes the actual opening stock for next year.
Staff Expenses
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the staff
expenses incurred during the year. The budgeted figures were Rs 986.77 lakhs and the actual
expenses were Rs 997.8 lakhs. Thereby, there is an adverse variance of Rs 11.03 lakhs.
The various expenses under this head show minor deviations from the budgeted
figures. The major variance was in Leave Encashment Insurance Premium paid during the
year. The deviation was due to the additional premium paid by the union during the year. The
amount received at the time of maturity is used to pay the employees at the time of their
retirement for the leave not availed by them during their service in the union.
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Administrative Expenses
INTERPRETATION The chart above shows the budgeted and actual results with regard to
the office and administrative expenses incurred during the year. The budgeted figures were
Rs 134.06 lakhs and the actual expenditure incurred was Rs 99.06 lakhs. Thus, the actual
expenditure is less than the budgeted amount by Rs 35 lakhs thereby making it a favourable
variance in total.
Selling and Distribution Expenses
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the selling and
distribution expenses. The budgeted figures were Rs 289.33 lakhs and the actual amount is Rs
358.74 lakhs. Thus, there is an adverse variance of Rs 69.41 lakhs. The major deviation was
in the tanker charges incurred in the selling and distribution expenses for the year. The tanker
charges had been much more than budgeted because the sale of milk and milk products to the
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various inter diaries have increased. With the increase in the sales, the cost to transport the
products also increased.
Interest and Bank Charges
INTERPRETATION The column chart above shows the budgeted and actual results with
regard to the expenses on interest and bank charges. The budgeted figures were Rs 18.25
lakhs whereas the actual amount incurred during the year is Rs 15.58 lakhs. Thus, there is a
favourable variance of Rs 2.67 lakhs due to the reduction in expense and thereby increasing
profit in total. The Union proposed to borrow loan from the bank at the beginning of the
financial year and thus interest calculations were done for the entire 12 months of the year.
However, the loan was borrowed mid-year and thus, the amount of interest paid was less than
the budgeted figure. This caused a favourable variance in this head.
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Depreciation
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the depreciation
charged on the fixed assets during the year. The budgeted figures were Rs 60 lakhs and the
actual expenditure incurred was Rs 133.30 lakhs. Thus, the variance is Rs 73.30 lakhs which
is quite high.
At the time of preparing the budget, Hassan Milk Union followed the Straight Line
Method of depreciation and thus expected the monthly depreciation to be Rs 5 lakhs which
amounts to Rs 60 lakhs per annum. However, during 2008-09, the union changed its method
of depreciation to Written down Value Method due to which the non-cash expense has been
much more than expected. The additions in the fixed assets have also lead to an increase in
the amount of depreciation.
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Other Income
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the income
generated from other sources. The budgeted figures were Rs 61.48 lakhs and the actual
amount has increased by Rs 6.24 lakhs. Thus, the total income from other sources was Rs
67.72 lakhs in total.
Interest on Deposit and Advances
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INTERPRETATION
The chart above shows the budgeted and actual results with regard to the income generated
from interest on deposits and advances during the year. The budgeted figures were Rs 24.18
lakhs and the actual amount was less by Rs 3.83 lakhs which was due to early withdrawal of
deposits from the bank.
Net Profit/Loss
INTERPRETATION
The chart above shows the budgeted and actual results with regard to the net profit
earned during the year. The budgeted figures were Rs 31.32 lakhs and the actual profit
incurred was Rs 117 lakhs. Thus, the variance is Rs 85.68 lakhs which is a highly positive
impact.
An organisation should try to maximise its various sources of revenue and at the same
time it should minimise its expenses and various costs. Excess of income over expenditure
indicates profit. And excess of expenditure over income results in loss.
At Hassan Co-Operative Milk Producers Societies Union, they have enhanced their
sales by Rs 3040.82 lakhs as against the budgeted figure. This has been the main reason for
the net profit to be much more than the amount anticipated. However, a deviation in the
various expenses has reduced the net profit as against the additional sales generated.
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5. Findings
After carrying out a detailed study on the budgetary control at Hassan Co- Operative
Milk Producers Societies Union, Hassan, the following observations were made:
Hassan Co-Operative Milk Producers Societies Union prepares a financialbudget every year. However, a study on the budget of year 2008-09 shows
high inconsistency. Certain expenditures and incomes show major variations.
The union follows a budgetary control system. However, it is not followedstrictly.
Budgetary control system is strictly followed in case of items which are capitalin nature. In case of revenue expenses, the organisation tries to stick to its
budgetary limits. However, only in rare cases, the budgeted figures match withthe actual figures for the year.
Every year, after the audit of the annual reports, the accounts departmentprepares a report on the major variances and excess expenditure incurred
during the year. The same is presented in the Annual General Body meeting
for ratification for the excess of expenditure.
There are certain items of revenue and expenditure which were not takenincluded in the budget, but however, they were incurred in actual. Due to this,
the profit as per the budget format does not match with the actual profits
shown in the Profit and Loss Account. The variation is due to omission in the
inclusion of these items in the budget. This includes provision for tax,
provision for bad and doubtful debts, dividend and bonus from KMF.
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Suggestions
After conducting a detailed study on the budgetary control system of the Union, it is
evident that the budgeted amount and actual amount for the year vary substantially. However,
in my view, the following points would ensure a better budgetary control system at HassanMilk Union.
The union should prepare the financial budget considering all items of probableexpenses. Non-estimation of any expense in the budget may put financial constraints
in the working of union as a budget helps to work out the financial plan for the year. \
The budget should be prepared in such a way that the deviations in the expenses arereduced to minimal. The higher the inconsistency in the budget, the higher the
fluctuations in the financial position of the Union. The Union has changed the method of depreciation during the financial year. There
should be a consistency in the method of depreciation as adopted at the time of
preparation of budget and in real practice. Any change in it can put financial burden
on the Union.
The Hassan Milk Union should follow a strict procedure on the budgetary controltechnique which would ensure a proper control on the funds of the Union.
The Union should involve all the other departments in the preparation of budget. Itwould bridge the gap between the budgeted figures and the actual figures for the year.
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Conclusion
Budgetary control is an important tool for the management to have an effective check
on its working as well as the staff. However, it is seen as a time consuming technique by
various organisations and thus do not pay much attention to it.This study examined the relationship between budget and performance of the
financial year 2008-09 of Hassan Milk Union. The previous literature and contributions to
this study and the problems associated with budgetary control have been reviewed. Through
this study it was found that the budget shows high inconsistency and the actual performance
varies considerably from the budgeted figures.
Following the findings, it is hereby advised that all the managers and business
operators to pay more attention to their budgetary control systems, while those without any
should endeavour to ensure the set-up of a result-oriented system as it goes a long way in
repositioning businesses and organizations from their creeping performance level to an
improved and high capacity utilization point.
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Bibliography
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