report on budgeting
DESCRIPTION
project report on budgeting rsmmTRANSCRIPT
EXECUTIVE SUMMARY
In this competitive scenario theoretical knowledge of subjects are not sufficient, we have to
apply this knowledge practically.
I learned practical knowledge through our 6 -8 weeks training from
29th May ‘13 to 10th July ‘13 from Rajasthan State Mines & Minerals Limited (RSMML) on
“Budget and budgeting process”
I am thankful to RSMML for giving me this opportunity.
In 1947, a private sector company was set up called Bikaner Gypsum
Limited (BGL) to mine Gypsum from mines situated around Bikaner. In 1973, 99.99% shares of
BGL were acquired by Govt. of Rajasthan and in 1974 it was renamed as Rajasthan State Mines
& Minerals Limited.
RSMML is engaged in excavating multi minerals like Rock phosphate, Lignite,
Gypsum, Limestone.
Budget is essential in every walk of our life. Budgeting provides a
powerful tool to the management for the efficient performance of its functions viz., formulating
plans, coordinating activities and controlling operations.
Under training, first I try to understand the process of budgeting. In
RSMML budget starts keeping in view corporate goals then demand for products is assessed by
the Marketing Department of the concerned Strategic Business Units (SBUs). Each department
then assesses its capacities to achieve the given targets & converts into capital and revenue
budgets and then these capital and revenue budgets submit to the Finance Department of the
SBU which then compiles and consolidates along with necessary notes/ justifications and submit
to the SBU head and then they submit to the Finance Department at corporate office and then
meetings are held, including at the top level, with various heads of SBUs and other departments.
After necessary amendments as per the discussions in the meeting the final budget is submitted
to Managing Director and after his approval the same is put up before the Board of Directors for
final approval.
After this I have made budget report of corporate office for the period 2011 – 12
through which we can know the budgeted level of activity and budgeted cost of the same,
budgeted cost of actual activity, variance between budgeted figures and actual figures etc. It also
helps to the management for follow up action. After all this I conclude that:
The company makes two type of budget i.e. revenue budget and capital budget.
All SBU & PC and corporate office make their budget separately.
Company makes its budget annually.
Whole budget is approved first by SBU heads, then by M.D. and finally by Board of
Directors.
Company doesn’t use any software for making budget however integrated software called
FAMIS has been prepared to integrate accounting, budgeting and costing which is being
used presently for accounting and would be expected to budgeting also.
CONTENTS1. Introduction of RSMML
2. Financial performance of the company
3. SWOT analysis
4. Financial profile
5. Research methodology
6. Objectives
7. Scope
8. Data collection
9. Reliability of data
10. Analysis
11. Budget in RSMML
12. Conclusion
13. Observation
14. Suggestion
15. Appendix
16. Bibliography
GENERAL INFORMATION
REPORTOF
Rajasthan State Mines & Minerals Ltd.
(A Govt of Rajasthan Enterprise)
INFORMATION PUBLISHED
UNDER SECTION 4(1)(b)
OF THE RIGHT TO INFORMATION ACT, 2005
Corporate Office Registered Office4, Meera Marg
Udaipur- 313 004-INDIA.Phone : +91-294-2428763 to 67
Fax : +91-294-2428770, 2428739
E-mail : [email protected]
C-89-90,Janpath, Lal Kothi Scheme, Jaipur - 302 004, INDIA
Phone : +91-141-2743734,2743934
Fax : +91-141-2743735E-mail : [email protected]
Table of Contents
Chapter I. The particulars of its organisation, functions and duties;............................4
Chapter II The powers and duties of its officers and employees;...............................15
Chapter III .............The procedure followed in the decision making process, including
channels of supervision and accountability;..................................................................16
Chapter IV The norms set by RSMML for the discharge of its functions;…………..16
Chapter V The rules, regulations, instructions, manuals and records, held by it or under its
control or used by its employees for discharging its functions;.......................17
Chapter VI A statement of the categories of documents that are held by it or under its
control;.............................................................................................................17
Chapter VII . . . The particulars of any arrangement that exists for consultation with, or
representation by, the members of the public in relation to the formulation of its
policy or implementation thereof;....................................................................18
Chapter VIII A statement of the boards, councils, committees and other bodies consisting of
two or more persons constituted as its part or for the purpose of its advice, and as to
whether meetings of those boards, councils, committees and other bodies are open to
the public, or the minutes of such meetings are accessible for public;............18
Chapter IX A directory of its officers and employees;..............................................19
Chapter X The monthly remuneration received by each of its officers and employees,
including the system of compensation as provided in its regulations;.............19
Chapter XI The budget allocated to each of its agency, indicating the particulars of all
30plans, proposed expenditures and reports on disbursements made;............20
Chapter XII The manner of execution of subsidy programmes, including the amounts
allocated and the details of beneficiaries of such programmes;......................20
Chapter XIII Particulars of recipients of concessions, permits or authorisations granted by
it;......................................................................................................................20
Chapter XIV Details in respect of the information, available to or held by it, reduced in an
electronic form;................................................................................................21
Chapter XV The particulars of facilities available to citizens for obtaining information,
including the working hours of a library or reading room, if maintained for public
use;...................................................................................................................21
Chapter XVI The names, designations and other particulars of the Public Information
Officers;...........................................................................................................21
Chapter XVII Such other information as may be prescribed and thereafter update these
publications every year;...................................................................................23
Name and designation of appellate authority.................................... 23
Annexure-I…………………………………………………………24
Preface
Rajasthan State Mines & Minerals Ltd. is a (A Govt. of Rajasthan Enterprise). With its Corporate office at Udaipur and its registered office at Jaipur engaged in Mining and related business of various minerals mainly, Rock Phosphate, Lignite, Limestone, Gypsum, Fluorspar etc. Information has been documented and published under section 4(1)(b) of the Right to Information Act, 2005.
Chapter-I
The particulars of organisation, functions and duties;
1.1 Rajasthan State Mines and Minerals limited (in short RSMML) is one of the leading and progressive enterprises of the Government of Rajasthan. It occupies a place of pride in production and marketing of non metallic minerals in India. RSMML is multi mineral and multi location enterprise engaged in mining of Rock Phosphate, Lignite, SMS grade Limestone and Gypsum. RSMML is the leader not only in Mining & Selling of Rock Phosphate, Gypsum across the country, but also global pioneer in technology in open cast mining and mineral beneficiation of Carbonate Rock Phosphate. Besides minerals, RSMML has also forayed into Energy Sector and has setup 106.30 MW installed capacity Wind Power Project at Jaisalmer, Rajasthan.
1.2 PROFILE
THE BEGINNING & BEYOND
In 1942 M/s. Natural Science (India) Private Limited (NSIPL), a Calcutta based Company was granted a 5 years lease to mine gypsum by the Ruler of the erstwhile Kingdom of Bikaner. In 1947 a long-term lease was granted to a newly formed Company called M/s. Bikaner Gypsum Limited (BGL). BGL was registered on May 7, 1947. The State and the public of Bikaner held 30% and 20% of its shares. The promoters of BGL held the rest. BGL appointed NSIPL as its managing agent for 20 years.
BGL was initially awarded a contract to provide 100,000 MT of Gypsum to the fertilizer plant producing Ammonium Sulphate. Later, the Company started selling gypsum to cement plants all over the Country.
After the independence of India and subsequent merger of Bikaner State into the State of Rajasthan, the operations of BGL continued to flourish. Following the discovery of the Jhamarkotra Rock Phosphate deposit in Udaipur District of Rajasthan, BGL was appointed as the contractor for raising rock phosphate on behalf of the State in May 1970.
The magnitude of operations at Jhamarkotra and the need to develop the Rock Phosphate deposit rapidly on scientific lines led to the take over of BGL by the Government of Rajasthan on 06.12.1974. The name of the Company was changed to the Rajasthan State Mines & Minerals Limited (RSMML). From 1974 to 1988, RSMML continued to work as contractors to Government for raising rock phosphate and also mined gypsum as it had done previously. During this period, RSMML produced and marketed 6 million tones of rock phosphate and contributed more than Rs. 3000 million to the State Exchequer.
In April 1988, the Government decided to grant a lease for Rock Phosphate mining to the Company and RSMML became a full-fledged mining Company in its own right. It has not looked back since.
RSMML has now stepped into the 66th year of its existence.
AMALGAMATION OF RSMDC WITH RSMML
On 20th February, 2003, the other Public Sector Undertaking in mining sector, Rajasthan State Minerals Development Corporation was merged with RSMML. The merger made the new entity a formidable force in the mining sector of India. Lignite, gypsum and limestone sectors received tremendous boost in terms of huge deposits and established production processes. The Company quickly resolved the issues emerged during the merger and started consolidating the mines spread in 8 districts of Rajasthan.
POST MERGER SCENARIO
Rock Phosphate continued its prime position in the business profile of the Company and catered to almost 94% of the indigenous demand during 2003-04 and 2004-05. The capacity of industrial beneficiation plant was increased from 1500 TPD and the production got streamlined in 2004-05. The production of Lignite was streamlined at Giral and the Company is gearing up fast for providing one million tons of Lignite for the Lignite based Thermal Power plant coming up at Girl under State owned Company, Rajasthan Vidyut Utpadan Nigam Ltd. Being pioneer in the Lignite field, RSMML has ensured its strong presence in the Lignite based power sector in Rajasthan. Dispatches of gypsum touched 3.36 million tons in 2011-12 .Renewed emphasis on environmental management was stressed upon for the management of Gypsum Mines. Supply of SMS grade Limestone to the steel plants of India touched the record level of 3.23 million tons in 2011-12.
The profit before tax for 2011-12 as stood at Rs.408.99 crores as against previous year figures of 271.69 crores. The Company started a number of R&D activities to further strengthen its R&D activities. Generous contributions were made for creation of life saving medical infrastructure in 8 project districts. The company is regular in dividend of Rs. 31,02,06,000/- was declared during the year 2011-12. Indeed it was a proud moment for the Company, which started a small entity excavating gypsum in 1947.
BUSINESS & PRODUCT PROFILE
SBU & PC – ROCK PHOSPHATE – BACKGROUND
The SBU & PC – Rock Phosphate of RSMML is presently engaged in mining of Rock Phosphate from different mines situated around Udaipur.
Only about 7% to 10% of requirement of raw material for Phosphatic fertilizer production in the is being met through indigenous sources and the rest is met through import.
SBU & PC – Rock Phosphate of has played an important role by contributing 90% of Rock Phosphate production of India.
INDUSTRIAL BENEFICIATION PLANT.
The plant produces Beneficiated Rock Phosphate Concentrate (Avg. 34.0% P2O5A for SSP & DAP Manufacturing Units ).
Original Capacity : 1500 TPD Expanded Capacity : 3000 TPD Capital Investment : Rs. 357.70 millions
Beneficiation Process Development
Initial lab & bench scale studies through IBM, Nagpur and other foreign laboratories.
IBM’s double stage froth floatation process selected which is most economically viable beneficiation process.
Based on the above, established a 200 tpd pilot plant at Jhamarkotra. Developed an industrial beneficiation plant of 1500 tpd capacity. Plant capacity expanded to 3000 tonne /day using energy efficient roller press
technology in 2003-04.At Jhamarkotra, Udaipur, used in manufacting of SSP and DAP, Main products – high grade chips, concentrate and low grade direct application fertilizer (Rajphos).
Products :
All products approved by Fertilizer Control Order, Government of India.
31.5% P2O5 Crushed – ½” size High Grade Rockphosphate
(SSP Manufacturing Units)
34% P2O5 Crushed -½”size High Grade Rockphosphate
(DAP/Nitrophosphate Manufacturing Units)
31.54% P2O5 Beneficiated Rockphosphate Concentrate
(SSP & DCP Manufacturing Units, PROM etc.)
18.20% P2O5 Ground Low Grade Beneficiated Rockphosphate (RAJPHOS)
(Fertilizer for direct application to acidic soils)
30-31% P2O5 +½”size High Grade Rockphosphate (Gitti)
(Elemental Phosphorus Manufacturing Units)
Phosphate Chips (+31.5% P2O5)
Suitable for manufacture of Fertilizer – Single Super Phosphate (SSP) & Di Ammonium Phosphate (DAP)
Beneficiated Phosphate Concentrate (+31.5% P2O5)
Suitable for manufacture of SSP, DCP & proposed use in manufacture of DAP
Rajphos
Used as Direct Application Fertiliser for Acidic Soil (18 to 20%( P2O5)
SBU & PC LIGNITE
GIRAL LIGNITE MINES, BARMER
The Giral Lignite mine is at 45 kM NW of Barmer town in Rajasthan. It has an area of 24 Sq.km. and minable reserves of 34.60 million ton.
The Company has entered into a Memorandum of Understanding with Rajasthan Vidyut Utpadan Nigam Ltd. For supply of Lignite for the proposed 125 MW Power Plant at Giral. The power generation from the plant has commenced from February, 2007.
KASNAU – MATASUKH LIGNITE MINES, NAGAUR
Kasnau – Matasukh Lignite mines are located in the Nagaur district of Rajasthan. The estimated mineable geological reserves of Lignite as per the approved mine plan are 13.294 million tons at Kasnau and 5.290 million tons at Matasukh mines.
PERFORMANCE OF SBU & PC LIGNITE
SBU & PC –Lignite posted a very healthy performance despite the problems faced at Nagaur due to inrush of water at mines locations.
The production and sale of lignite in 2011-12 was 10.60 lacs metric tones & Revenue of Rs.12900.75 lacs.
The Company has also applied for fresh mining leases for Soneri and Gurha west Lignite deposits has been allotted to RSMML (20 Million Tons).
Mines at Giral and Nagaur, used as industrial fuel and suitable for power generation in Lignite based power plants. From 2006, lignite would be used for power generation.
GYPSUM
Gypsum occurs as surface deposit in western district of Rajasthan. The mining leases are in Bikaner, Sriganganagar, Barmer, Nagaur, Jalore and Hanumangarh districts.
In 2011-12, production of 33.36 Lacs Metric was achieved. Operating 20 Gypsum mines and 3 selenite mines. Central Grinding Unit for gypsum powder (70 TPH) has been set up at Rawla to
ensure uniform quality standards.
PERFORMANCE OF SBU & PC GYPSUM
During the year 2011-12, the sale of Gypsum and Selenite was 3.37million tons as against 3.40 million tons in 2010-11.
Supplies of Gypsum powder for land reclamation have been made to Haryana, UP & Rajasthan.
The commercial production of Gypsum powder from Centralised Gypsum Grinding Units at Rawla was also started during the year 2003.Gypsum & Selenite located in Bikaner, Sriganganagar, Barmer, Hanumangarh, Nagaur & Jalore.
LIMESTONE
SMS grade Limestone with very low Silica content, one of its kinds in the world.Mines and Crushing - Sizing Plant at Sanu (Jaisalmer), Mines at Gotan.Used in Steel Industry & customers include SAIL, TISCO, Birla White etc.Fluorspar mineral is also produced which is used in chemical industry.
SBU & PC LIMESTONE – ACTIVITIES IN BRIEF
Low Silica Steel Grade Limestone, Sanu. Low Silica Steel Grade Limestone, Gotan. High Grade Limestone for White Cement Gotan High Grade Limestone for Chemical Industry, Gotan 30-40% Grade Flourspar Gitti. 50-60% Grade Flourspar 70-75% Grade FloursparSanu Low Silica Steel Grade Limestone Project, Jaisalmer
Mining (open cast) started in the year 1994. The limestone from the mines is regarded as the best and most suitable for steel
making process. More than 200 million tones of proved reserves are available. Commissioned crushing and screening plants with installed feed capacity of 350
MT per hour in September 1996. Total capital investments around Rs. 250 million. The Company supplies standard size Limestone in all steel plants of the giant
public sector steel maker Steel Authority of India Ltd (SAIL). Low Silica Limestone is also supplied to Tata Iron & Steel Co. (TISCO),
Jamshedpur.
PERFORMANCE OF SBU & PC - LIMESTONE
SBU & PC Limestone has registered strong performance during the financial year 2011-12 and has touched the 3.23 million tons production milestone.
The total production of Limestone was 32.32 lac MT in the year 2011-12 compared to 30.80 lac MT in 2010-11. In value terms, the turnover of the SBU
was Rs. 153.46 million as compared to Rs. 134.38 million during the year 2010-11.
WIND ENERGY
With a view of diversification activities and to protect environment degradation, RSMML has entered into wind power generation business in 2001. RSMML has commissioned 14x350Kw wind energy turbine on 70 mtr. high lattice towers at Badabagh area of Jaisalmer. The wind farm at Badagarh was expanded with additional 14x350Kw WET's in May 2002. In 2004, RSMML has commissioned 4x1250Kw WETs in Pohra Village of Jaisalmer. 6x1250 Kw (7.5 MW) was added in March 2006. In last 2006-07, 25x600 KW (15 MW) windfarm is installed at Bharmsar- Pohra at Jaisalmer. In year 2007-08 RSMML has installed 22.5MW (18 x 1250 Kw) wind farm at Hansuwa Satta Gorera at Jaisalmer. Now the total wind farm capacity of RSMML is 106.30 MW. Annual Generation of grid quality power is now 1815 lacs Kwh from echo friendly windpower.
RSMML ACTIVITIEES
Rajasthan State Mines & Minerals Limited - one of the largest and most successful mining companies in India is proud to support four key areas in the economic development of country namely; Agriculture, Steel, Construction and Power.
Only producer of high grade Rock phosphate in the country – catering to 68% of the indigenous Rock demand for SSP fertilizer in India. Total production of Phosphate ore has touched 1.6 million tons. Rock handling has crossed 15 million tons per annum.
The Integrated Beneficiation Plant located at Jhamarkotra, Udaipur produces high grade Rock phosphate concentrate, utilizing a unique set of technologies for the first time in the world.
Rajphos, a direct application phosphatic fertilizer, has become the most effective solution of the acidic soils of Southern and North Eastern states.
RSMML is the largest producer of natural Gypsum, the most critical input for high grade cement, supplying 2.99 million tones of Gypsum to the cement industries of Western India.
Helping farmers of Rajasthan, Haryana and Uttar Pradesh in reclaiming millions of hectare of land, by supplying Gypsum powder under state and World Bank assisted programmes.
Steel Authority of India and TISCO source low silica SMS grade Limestone from RSMML.
RSMML processes almost 2.5 million tones of Limestone every year and supplies to Steel Plants at Bokaro, Dungapur, Rourkela, Burnpur, Bhilai and Jamshedpur.
Lignite is the future of power sector in Rajasthan and RSMML is the only Company producing Lignite in Rajasthan. From 2006, RSMML will supply 1 million ton of Lignite for power generation.
This premier mining Company of Rajasthan also supplies high grade Limestone and fluorite to cement and chemical industries.
PROFORMANCE AT A GLANCE (Rs. in Crores)
2007-08 2008-09 2009-10 2010-2011 2011-12
Total
Revenue
636.41 972.34 956.03 1136.46 1355.45
Total
Expenditure
449.66 794.45 809.92 864.76 946.46
Profit
Before Tax
186.75 177.89 146.11 271.69 408.99
Registration of Company’s Project with Executive Board of Clean Development Mechanism under UNFCCC
Our 14.8 MW small scale grid connected wind power project in Jaisalmer, Rajasthan, India after completing all procedural requirements of UNFCCC has now been finally registered by CDM Board on 14.4.2006.(ref.0243 under methodology AMS.ID). Looking to the significant contribution of the project towards substantial development in India, host country approval for the project was accorded on 26th December 2005 vide no. 4/22/05-CCC by Ministry of Environment and Forest (MOEF), Govt. of India .
Company shall get 13,353 Carbon Emission Reduction points (CERs) every year from the project till 2012 and also will be eligible to get CERs earned from the project since its commissioning, i.e. Aug. 2001 under Kyoto Protocol of UNFCCC through Clean Development Mechanism.
22.5 MW grid connected wind farm project which has already been commissioned in 2006 is also registered under CDM category with UNFCCC.
RESEARCH & DEVELOPMENT
Producing fused Calcium Magnesium Rock Phosphate from Jhamarkotra
Converting tailing rejects of IBP to Direct Application Fertilizer for Magnesium deficient soils.
Plantation of Jatropha on waste land and back fill areas for creating Bio-fuel groves.
Beneficiation of low grade Gypsum for producing high grade 80% + material for cement industry.
Making the fine size Limestone gitti produced at Jaisalmer suitable for glass and allied industries.
Beneficiation of secondary Rock Phosphate (Mineral reject), Development of Phosphate Rich Organic Manure (PROM) . Development of Apatite as semi precious mineral.
ENVIORNMENT
As a responsible corporate citizen, RSMML believes in “reduce, reuse and recycle.”
RSMML has constructed a huge dam of 200 mcft. fresh water storage capacity on Jhamri river, which has helped in recharging the regional water table.
Extensive afforestation / plantation work is being done in and around all mines. The Industrial Beneficiation Plant is a ‘Zero discharge plant’. The waste water is
treated at acid water treatment plant, resulting in an saving of about 1.5 million Cu M of fresh water.
Regular monitoring of different environmental parameters i.e. air, water, dust, noise etc.
Automatic water sprinklers on the Main Haulage Road of Jhamarkotra Mines, water injection system at drill units.
Scientific use of explosives. Installation of dust extraction system at crushing and screening plant and at
Central Gypsum Grinding Unit.
The mined out area is being back filled simultaneously to reclaim the land.
SOCIAL COMMITMENT – AN OVERVIEW
As a responsible corporate entity committed to discharge its social obligations, RSMML has been contributing generously towards the development of the areas located near its mining sites and other areas of operation.
These contributions have been in the areas of Medical & Health care Education Drinking Water Environment Development of village infrastructure
The Company has been providing medical, educational and other facilities to the villages situated around its mines.
A contribution of Rs. 34.53 crores has been made in last 8 Years to the Chief Minister’s Relief Fund for development of Medial and Health infrastructure facilities in Medical Colleges & District hospitals in project districts.
The contribution has been made to Medical Colleges / District Hospitals at Udaipur, Bikaner, Jodhpur, Barmer, Sri Ganganagar, Jaisalmer, Pali, Hanumangarh and Nagaur.
Memorandums of Understanding have also been entered with Government of Rajasthan for utilization of these funds.
Medical Camps are being regularly organize in the villages around the mine location and project areas of the Company where free check-up and medicines are provided.
RSMML has provided prime land for the project for setting up a 100 bedded multi-super specialty hospital and Udaipur under a IV arrangement with M/s. American International Health Management Limited, Udaipur. The capital investment on the hospital envisage Rs. 200 millions.
Other works for development of village infrastructure include: Contribution to panchayats for schools Improvement in village Goshalas
According high priority to fulfill its social responsibilities, the Company regularly takes up works related to socio-economic development alongwith environment restoration and management in the areas where the Company has major mining operations and other business activities.
SUPPLY OF POTABLE WATER
Water supply to Udaipur City
Supplying 7 million litres per day of potable water from Jhamarkotra Mines to city of Udaipur since 1994-95.
Company has commenced supply of 6 million litres per day of potable water from Kanpur mines in addition to the present supply of 7 million litres per day since 2004, With this, RSMML caters to the potable water needs of more than 2 lac people of the water starved Udaipur city.
Water supply to Villages
Supplying of potable water from Jhamarkotra Mines to 7 nearby villages on a permanent basis since last 8 years.
Adequate potable water supply is ensured through a permanent pipeline
VOCATIONAL TRAINING CENTRES Different Mines of the Company are having elaborate setup of Vocational
Training Centres. Objectives:
Induction and in-service training of both departmental & contractor’s work force.
Monitoring safety policy of RSMML. Up-keep of safety records. Annual celebration of Environment & safety weeks.
Chapter-II
The powers and duties of its officers and employees;
RSMML is a company registered under Company’s Act 1956, governed by the
Board of Directors. The present constitution of the Board is as under:
1 Shri C.K. Mathew, IAS – ChairmanChief Secretary to the Government of Rajasthan,Jaipur
2 Shri Sunil Arora, IASPrincipal Secretary to the Government of Rajasthan,Department of Industries,Jaipur
3 Dr. Govind Sharma, IASPrincipal Secretary to the Government of Rajasthan,Department Finance,Jaipur
4 Shri Sudhansh Pant, IASSecretary to the Government of Rajasthan,Department of Mines & Petroleum,Jaipur
5 Shri Naresh Pal Gangwar, IASSecretary (Energy) Government of Rajasthan,Jaipur
6 Shri A.C. Wadhawan,Ex-CMD, Hindustan Zinc Ltd,New Delhi
7 Shri Ajitabh Sharma, IAS Managing Director,Udaipur
The powers are delegated by the Board to the Managing Director who has further sub delegated the powers to Group General Managers and other officers for discharging their functions and duties.
Chapter-III
The procedure followed in the decision making process, including channels of supervision and accountability;
RSMML is registered under Company Law.
The Board of Director is the apex body of the company. Most of the major decisions are taken during Board Meetings. The Board Meeting is called time to time to take decisions. The Managing Director is further delegated powers by the Board for carrying out the day to day Administrative Work. There is delegation of power by Managing Director to different Officers for carrying out day to day work
Chapter-IV
The norms set by RSMML for the discharge of its functions;
SBU wise and for organization as a whole, physical & financial targets with reference to production revenue & expenditure being set and executed through annual Budget.
Broad Budget Estimates for the financial year 2012-13 are as follows:
(Rs in Lacs)
PARTICULARS Revenue Expenditure Profit
SBU & PC Phosphate 87558.18 60777.32 26780.86
SBU & PC Gypsum 1944.10 10800.84 11143.26
SBU & PC Lime Stone 16525.00 14200.22 2324.78
SBU & PC Lignite 22519.00 16725.00 5794.00
Power Generation (Wind Farms)
5604.69 3735.77 1868.92
Other Minerals - 24.94 -24.94
Corporate Business Revenue 2600.00 2956.91 -356.91
TOTAL 156750.97 109221.00 47529.97
We are a Commercial Organization so the Company is Audited by CAG. The Company is examined by PUC.We are preparing balance sheet every year which is examined by statutory audit and CAG.
A part from Financial norms the productivity of operation are guided by the technical standard and norms. The Contractual operation are based on specific norms defined in every Contract. Every financial year a Budget is made and submitted to the Board for its approval.
Chapter-V
The rules, regulations, instructions, manuals and records, held by RSMML or used by its employees for discharging its functions;
RSMML is a Government of Rajasthan Enterprise so guided by BPE guideline. A part from BPE guideline instructions are issued by Finance Department and Mines Department of Government of Rajasthan.
The Company is following all the Rules & Regulations as enacted by the Central and the state Government for carrying out mining and other activities as and when enforced.
Instruments which form the basis and enable its employees to discharge their duties and functions are as follows:
a) Service rules for executivesb) Standing order for workmenc) Promotion rules for employees etc..
Chapter-VI
A statement of the categories of documents that are held by the company or under its control ;
The major categories of documents are as under :
a) Production: Financial statement , Performance, Reports, and production statistics. b) Personnel & Administration : Personal files and Service books of the
officers/workmen , ACR Records of the officers/ workmen, sanction of various types of advances, files relating to purchases, files relating to selection/filling up of posts/vacancies, files dealing with legal matters, files relating to vigilance matters etc. files relating welfare activities etc. Rules & Regulations
c) Finance & Accounts : Budget, Budgetary allocations, audit files details of CPF, advances, their recoveries, details of capital and revenue income and expenditures etc., and physical details
d) Purchase & Stores: Indents, SRVs, SIVs, Stock Registers, RCs and various Challans and vouchers.
e) Marketing: Commercial papers comprising of invoices delivery challans, orders, account statements and respective files of various customers and related agencies.
Chapter-VII
The particulars of any arrangement that exists for consultation with, or
representation by, the members of the public in relation to the formulation of
its policy or implementation thereof;
Being a commercial company there is limited scope’s for consultation with or
representation by, the members of the public in relation to the formulation of its policy of
implementation thereof.
Chapter-VIII
A statement of the boards, councils, committees and other bodies consisting of two or more persons constituted as its part or for the purpose of its advice, and as to whether meetings of those boards, councils, committees and other bodies are open to the public, or the minutes of such meetings are accessible for public;
The Board of directors are mentioned at Para 2 of this report. Board of Directors is the governing body of the organization and Managing Director is the Chief Executives of the Company. Various committees operate based on the statutory and other requirement.
Chapter-IX
A directory of its officers and employees;
A directory of Officers is placed at Annexure-I
Chapter-X
The monthly remuneration received by each of its officers and employees, including the system of compensation as provided in its regulations;
The pay scales of the employees are as under:-
Pay scales of Executives:
Grade Pay Scale Rs. Grade Pay
E - 7 (PB-4) 37,400-67,000 8,900
E - 6 (PB-4) 37,400-67,000 8,700
E - 5 (PB-3) 15,600-39,100 8,200
E - 4 (PB-3) 15,600-39,100 7,600
E - 3 (PB-3) 15,600-39,100 6,800
E - 2 (PB-3) 15,600-39,100 6,600
E - 1 (PB-3) 15,600-39,100 5,400
Pay Scales of Workmen:
Category Pay Scale Rs. Grade Pay
IX-S (PB-2) 9,300-34,800 5,400
IX (PB-2) 9,300-34,800 4,800
VIII (PB-2) 9,300-34,800 4,200
VII (PB-2) 9,300-34,800 3,600
VI (PB-1) 5,200-20,200 2,800
V (PB-1) 5,200-20,200 2,400
IV (PB-1) 5,200-20,200 2,000
III (PB-1) 5,200-20,200 1,850
II (PB-1) 5,200-20,200 1,800
I (PB-1S)4,750-7,440 1,650
In addition to above DA, HRA and other perks are also applicable as per the prevailing
norms of the company.
Chapter-XI
The budget allocated to each of its agency, indicating the particulars of all plans, proposed expenditures and reports on disbursements made;
The broad details regarding the allocation of the budget is mentioned at Para 4 of this report. Further details are for internal use only.
Chapter-XII
The manner of execution of subsidy programmes, including the amounts allocated and the details of beneficiaries of such programmes;
Credit policy in place of subsidy as per general commercial practice.
Chapter-XIII
Particulars of recipients of concessions, permits or authorisations granted by it;
Not applicable.
Chapter-XIV
Details in respect of the information, available to or held by it, reduced in an electronic form;
Information about various aspects and functions of RSMML is available on the web site
www.rsmm.com.
Chapter-XV
The particulars of facilities available to citizens for obtaining information, including the working hours of a library or reading room, if maintained for public use;
Not applicable.
Chapter-XVI
The names, designations and other particulars of the Public Information Officers(PIO) & Assistant Public Information Officers (APIO);
For Corporate Office
Name of PIODesignation & Office Address
Contact No. Name of APIO Designation & Office Address
Sh.Balmukund Asawa
Chief(P&A) RSMM Ltd., Corporate Office, 4, Meera Marg, Udaipur(Raj.)
Phone: 0294-2428793, Res.No. 0294-2810473
Fax: 0294-2428793
Sh.M.L.TailorFinancial Advisor, RSMM Ltd., Corporate Office,4,Meera Marg, Udaipur
For SBU & PC – Rockphosphate
Name of PIODesignation & Office Address
Contact No. Name of APIO Designation & Office Address
Sh.L.S.RathoreGroup General Manager,SBU & PC-Rockphosphate, Jhamarkotra Mines, Udaipur
Phone: 0294- 2342441-443 Sh.Dinesh
Bhupesh
Manager(P&A), SBU & PC-Rockphosphate, Jhamarkotra Mines, Udaipur
Fax: 0294-
2342444
For SBU & PC – Limestone
Name of PIODesignation & Office Address
Contact No. Name of APIO Designation & Office Address
Sh.P.C.PurohitGroup General Manager,SBU & PC-Limestone, 8, West Patel Nagar, Circuit House Road, Jodhpur
Phone: 0291-2512970,2515528, Res:0291-2755313
Sh.Y.S.SankhlaManager(Mining), SBU & PC-Limestone, 8, West Patel Nagar, Circuit House Road, Jodhpur
Fax:: 0291-2511029
For SBU & PC – Lignite
Name of PIODesignation & Office Address
Contact No. Name of APIO Designation & Office Address
Sh.R.K.MehtaGroup General Manager,SBU & PC-Lignite, Khanij Bhawan, Tilak Marg, Jaipur
Phone:0141-2227715,2227770 Res:0141-2359772
Sh.Sumnesh Sharma
Manager(PR), SBU & PC-Lignite, Khanij Bhawan, Tilak Marg, Jaipur
Fax:: 0141-2227860, 2227761
For SBU & PC – Gypsum
Name of PIODesignation & Office Address
Contact No. Name of APIO Designation & Office Address
Sh.R.K.ZOSHI General Manager,SBU & PC-Gypsum, 02, Gandhi Nagar Scheme, Bikaner
Phone:0151-2200171 to 175 Res:0151-2540713
Sh.R.S.ShekhawatManager(P&A), SBU & PC- Gypsum, 02, Gandhi Nagar Scheme, Bikaner
Chapter-XVII
Such other information as may be prescribed and thereafter update these publications every year;
Updation of information on website is carried out.
Name & designation of Appellate Authority :
Shri Ajitabh Sharma, Managing Director,
Corporate Office, 4-Meera Marg,
Udaipur – 313 004 INDIA.
Phone: +91-294-2428741-42 Res: 0294 – 2451288
Fax: +91-294-2428770
RAJASTHAN STATE MINES & MINERALS LIMITED
Rajasthan State Mines and Minerals limited (RSMML) is one of the leading and progressive undertaking
of the Government of Rajasthan. It occupies a place of pride in production and marketing of non metallic
minerals in India. RSMML is multi mineral and multi location enterprise engaged in mining of Rock
Phosphate, Lignite, SMS grade Limestone and Gypsum. RSMML is not only the leader in Mining &
Selling of Rock Phosphate, Gypsum across the country, but also global pioneer in technology in open cast
mining and mineral beneficiation of Carbonate Rock Phosphate.
Besides minerals, RSMML has also forayed into Energy Sector and has setup 74.80 MW installed
capacity Wind Power Project at Jaisalmer, Rajasthan.
INTRODUCTION
Rajasthan State Mines & Minerals Limited (RSMML) is one of the premier public sector enterprises of
the Government of Rajasthan, primarily engaged in mining and marketing of industrial minerals in the
State. The very objective of the company is to achieve cost effective technological innovations in the
mining of minerals and to diversify into mineral based downstream projects. Apart from the above, the
Company is also aiming at long term fuel supply to lignite based power projects, apart from setting up
wind energy farms at Jaisalmer. This company is professionally managed and remains focused towards
increasing productivity and growth.
AMALGAMATION
Year 2003, witnessed completion of amalgamation of Rajasthan State Mineral Development Corporation
Limited (RSMDC), another Rajasthan State Government PSU with Rajasthan State Mines & Minerals
Limited (RSMML) notification was issued by the Department of Company Affairs, Government of India
(Order No. S.O.207(E) dated 19th February 2003) under Section 396 of the Companies Act, 1956 and the
same has come into effect from 20th February, 2003, the date of its publication in the Gazette of India
(Extraordinary).
STRATEGIC BUSINESS UNITS & PROFIT CENTRES
After amalgamation, the following four mineral based Strategic Business Units & Profit Centres (SBU &
PC) namely Rock Phosphate, Lignite, Gypsum and Limestone have been set up as a part of corporate
restructuring: -
Strategic Business Unit and Profit Centre – Rock phosphate at Udaipur.
Strategic Business Unit and Profit Centre – Gypsum at Bikaner
Strategic Business Unit and Profit Centre – Limestone at Jodhpur
Strategic Business Unit and Profit Centre – Lignite at Jaipur
Rock Phosphate continued its prime position in the business profile of the Company and catered to almost
20% of the indigenous demand. The capacity of industrial beneficiation plant was increased from 1500
TPD to 3000 TPD and the production got streamlined. The production of lignite was streamlined at Giral
and the company is gearing up fast for providing one million tonnes of lignite for the lignite based
thermal power plant at Giral under state owned Company, Rajasthan Vidyut Utpadan Nigam Ltd. Being
pioneer in the lignite field, RSMML has ensured its strong presence in the lignite based power sector in
Rajasthan. Despatches of gypsum touched 2.88 million ton in 2011-12. Renewed emphasis on
environmental management was stressed upon for the management of gypsum mines. Supply of SMS
grade limestone to the steel plants of India touched the record level of 2.09 million tonnes in 2011-12.
In the year 2011-12, company has achieved the profit before tax Rs. 416,87,00,659 in comparison to profit
before tax of Rs. 2716.95 lacs in 2010-11. The Company started a number of R&D activities to further
strengthen its R&D activities. Generous contributions were made for creation of life saving medical
infrastructure in 8 project districts. The dividend of Rs. 25,51,03,000/- was declared for the year 2011-12.
RSMML today has broken away from its monopolistic moorings and welcomes competition. From a
small backwaters company, it is now rated as a technologically advanced company and an innovator. It
boasts of a highly trained and competent workforce and strong financial base. It has established itself as
the most successful public sector company in Rajasthan.
THE ORIGIN
In 1947, a small company called Bikaner Gypsum Limited was incorporated to mine Gypsum in the Thar
or the Great Indian Desert. From its humble beginnings, BGL grew and prospered. The sheer magnitude
of operations and the need to rapidly develop the mines compelled the Government of Rajasthan to take
over the company in 1973. It was rechristened as the Rajasthan State Mines and Minerals Limited and
came to be known by its abbreviation RSMML. The company has not looked back since then.
RSMML TODAY
RSMML today comprises of four separate divisions, each works autonomously under the overall
control of the corporate office at Udaipur. There are also a number of representative offices in
various cities of India.
RSMML today deals in Four Principal Minerals
GYPSUM,
ROCK PHOSPHATE,
LIMESTONE AND
LIGNITE.
It also deals in phosphate fertilizers, which are a direct downstream product of its rock phosphate
operations.
THE MISSSION
To become the largest producer of Rock Phosphate, Gypsum, Limestone, Lignite and as
dominant market leader.
To avail opportunities to diversify into other mining activities.
To maximize satisfaction of its stakeholders.
RSMML today deals in Gypsum, Rock Phosphate, Limestone and Lignite and also phosphate fertilizers.
Each of these forms separate units, and are called Strategic Business Units, working automatically under
the overall control of the Corporate Office at Udaipur.
THE GYPSUM UNIT-SBU-PC
RSMML is the country’s leading producer of natural Gypsum and Selenite producing about 1.0 million
tonnes per year. These are mined in the heart of the Thar Desert areas where the working conditions are
very harsh. The deposits are shallow and scattered over large areas. Most of the land is owned by private
cultivators.
The mining of Gypsum of purity of +70% CaSO4, 2H2O is a co-operative effort between the land owners
and RSMML. The farmers give up his gypsum bearing land to RSMML in return for an assured share of
profits. After mining, the Company improves the land condition and returns back to the farmer for
cultivation.
Gypsum fulfils the demands of the cement industries and powder Gypsum is used by farmers as a direct
fertilizer for reconditioning of alkaline soils for reducing alkalinity and improving crop production.
Selenite is a naturally occurring crystalline form of high purity Gypsum and is used extensively in the
ceramics industries and to manufacture surgical grade Plaster of Paris.
THE PHOSPHATE –SBU-PC
The major activity of RSMML is the mining of Rock phosphate ore. It operates one of the largest and
fully mechanized mines in the country at Jhamarkotra, 26 Kms. from Udaipur and Kanpur Group of
Mines located 15 Kms. from Udaipur is upcoming as a second Rock phosphate complex in Rajasthan.
In India the economy being predominantly based on agriculture, the fertilizer production plays a pivotal
role. Only about 35% to 40% of the requirement of raw material for phosphatic fertilizer production is
being met through indigenous sources and the rest is met through import in the form of rock phosphate,
phosphoric acid & direct fertilizers. In such a situation Jhamarkotra plays an important role by
contributing 98% of rock phosphate production of India.
Rock Phosphate mines at Jhamarkotra & Kanpur Group of Mines are complex deposits. Mining these
rock phosphate deposits is far more difficult than that in most parts of the world. Despite the complexities
of the deposit, excellent results have been achieved by continuous innovations. With an annual rock
handling of about 20 million tonnes, Jhamarkotra is probably the largest open cast mine in India outside
the steel and coal sectors.
On technical fronts the problem of ground water had affected the mining operations, until an effective
dewatering scheme was evolved and implemented. The geometry of the ore body i.e thin and sharply
dipping had resulted in long and narrow pits with great depth extension, which involves very high
stripping ratio with high lead and lift for waste and mineral. Despite these entire problems Jhamarkotra
project could sustain the very difficult periods because of its commitment towards scientific approach for
exploitation of the deposit with planned development of the pits.
THE LIMESTONE SBU-PC
Limestone Mines are located at Jaisalmer and Gotan & Fluorspar mining operations are located at
Bhinmal. The production from units at Jaisalmer and Gotan stood at 20.24 lacs tones as against 20.00 lacs
in previous year. Similar, sales of limestone gitti stood at 20.94 lac tones as compared to 18.80 lac tones
during the previous year.
Due to the Rubust Growth in the global demanded for Iron and Steel Industry, India is expected to
become the second largest steel producer after China by 2015-2016. The demand for steel will be much
higher dued to the industrial growth, infrastructure and huge house-building activity in the country.
Company is all set to capitalist the boom as it is a producer of major raw material of the steel sector. As a
part of expansion plan SAIL has already signed MOU with the company for supply of SMS grade
limestone from Sanu mines on long-term basis. The quantity of supply will increase from 2.9 million
tones to 4.4 million tones from 2011-2012 to 2017-2018. SAIL has increased the quantity of procurement
of undersized material by three times. The steel plants are also procuring undersized limestone for
sintering.
LIGNITE UNIT -SBU-PC
RSMML has its two Lignite mines situated at Giral , Barmer district and another mines at Kasnau-
Matasukh , Nagour district .Lignite products are used in power plant .
Lignite activity witnessed significant success after set back of flood at Barmer and confined water
problem at Nagaur during the year 2006. The production and sales of lignite was increased to 6.06 lacs
MT as compared to 4.67 lac MT product.
The 125 MW power plant set up by Rajasthan Vidhyut Utpadan Nigam Ltd. Based on Giral Lignite has
commenced power generation and the company is supplying lignite to it. This has lead to the increase in
demand of lignite at Giral. However, production as well as sales was lower in Kasnau-Matasukh due to
dewatering and other connected problems.
FUNCTIONS OF CORPORATE OFFICE
1. Making policies.
2. Exercising administrative control.
3. Exercising financial control.
4. Project planning & approval and installation.
5. Conducting & handling audit.
6. Installation & monitoring of systems.
7. Corporate office looks after the funds flow of the company.
8. It looks after the working capital requirement.
9. Handling the taxation matters.
10. It prepares accounts and balance sheet for the company as a whole.
11. Planning/Budgeting.
12. Awarding large contracts.
13. Capital purchases, rate contracts & other large purchases beyond the power of SBUs
14. Liaising with government & various other agencies.
CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate entity committed to discharge its social obligations, RSMML has been
contributing generously towards the development of the areas located near its mining sites and other areas
of operation.
These contributions have been in the areas of –
o Medical & Health Care
o Drinking water
o Education
o Environment
o Development of village infrastructure
The Company has been providing medical, educational and other facilities to the villages situated
around its mines.
To improve the medical infrastructure of Udaipur region, which is predominantly a tribal district,
RSMML has contributed Rs. 3.05 crores for establishment of Cardio-Thoracic Surgery Centre
and Neo-Natal Special Care Unit at the M.B. Government Hospital, Udaipur.
A Contribution of Rs. 2.888 crores has been made to the Chief Minister Fund for development of
Medical and Health infrastructure facilities in project districts.
The contribution has been made to Medical colleges / District Hospitals at Udaipur, Bikaner,
Jodhpur, Barmer, Sri Ganganagar, Jaisalmer, Hanumangarh and Nagaur.
Memorandum of Understanding has also been entered with Government of Rajasthan for
utilization of these funds.
Medical Camps are being regularly organized in the villages around the mine location and project
areas of the company where free check-up and medicines are provided.
RSMML has provided land for the project for setting up a 100 bedded multi super specialty
hospital at Udaipur under a JV arrangement with M/s American International Health
Management Limited, Udaipur. Total capital investment on the hospital envisaged – Rs. 200
millions.
Other works for development of village infrastructure include:
Contribution to Panchayats for schools.
Improvement in village Goshalas.
According high priority to fulfill its social responsibilities, the company regularly takes up works related
to socio-economic development along with environment restoration and management in the areas where
the company has major mining operations and other business activities.
SUPPLY OF POTABLE WATER
Supplying 7 million liters per day of potable water from Jhamarkotra mines to city of Udaipur
since 1994-95.
Recently company has commenced supply of 6 million liters per day of potable water from
Kanpur mines in addition to the present supply of 7 million liters per day. With this, RSMML
caters to the potable water needs of more than 2 lacs people of the water starved Udaipur City.
Supply of potable water from Jhamarkotra mines to 7 nearby villages on a permanent basis since
last 8 years.
Adequate potable water supply is ensured through a permanent pipeline & 75000 liters capacity
GLR in each village.
MEDICAL & HEALTH
Full Fledged dispensaries at Mine site and Corporate Office;
Managed by Qualified Doctors and paramedical staff
Regular annual Monitoring of Occupational Health
Health facilities extended to employees dependents at mine site
Company also extends medical facility to village population in & around mine site
Recently, comprehensive health check up, covering all the 2200 employees, has been conducted
with the help of National Institute of Miners’ Health, Nagpur, India.
FINANCIAL PERFORMANCE OF THE COMPANY
The period covered under the study for the financial performance of R.S.M.M.L is three financial years,
viz, 2009-2010,2010-2011,2011-2012.
Particulars Note
2011-12 2010-11
INCOME
I Revenue from operations 20 1273,63,23,221 1078,15,67,231
II Other Income 21 66,66,82,562 46,85,18,308
III Total Revenue (I+II) 1340,30,05,783 1125,00,85,539
IV EXPENSES
Purchase of Ore 15,61,65,507 1,62,38,151
Changes in inventories of finished goods & Others 22 -15,01,43,805 -11,45,42,138
Employee benefit expenses 23 135,40,27,748 126,07,43,326
Finance costs 24 12,21,11,428 1,55,96,978
Depreciation & Amortisation expense 62,98,37,976 72,09,11,165
Other Expenses 25 712,23,06,270 662,28,00,149
Total Expenses 923,43,05,124 852,17,47,631
V Profit before Prior Period Adjustments, Exceptional Items & Tax
416,87,00,659 272,83,37,908
Prior Period Adjustments (Net) 26 8,02,16,462 1,13,86,320
VI Profit before Exceptional Items & Tax 408,84,84,197 271,69,51,588
Exceptional items (Refer Note No. 12.4) 14,99,999 0
VIII Profit Before Tax 408,99,84,196 271,69,51,588
IX Tax expense:
Current Tax 140,00,00,000 80,00,00,000
Tax of earlier years -30,35,661 -1,03,93,819
Deferred Tax -12,00,24,397 4,19,63,739
X Profit for the year (VIII-IX) 281,30,44,254 188,53,81,668
XI Earning Per equity share 27
Basic and Diluted 36.27 24.31
Face value Per equity share 10.00 10.00
Weighted Average Number of Equity Shares 77551500 77551500
SWOT ANALYSIS
SWOT ANALYSIS of R.S.M.M.L is done in the following way for the better understanding of the
company’s position:-
STRENGTHS
Jhamarkotra rock phosphate mines of R.S.M.M.L is one of the largest well -mechanized open
cast mines of Asia, which is most modern and scientifically laid out mine.
Industrial beneficiation plant of R.S.M.M.L converting low grade ore of rock phosphate into
higher grade concentrate is the only plant of its kind in the world.
In R.S.M.M.L, research and development activities are integral part of the business activities.
Extensive computerization along with advanced software is being used for evaluation of natural
resources and financial analysis to optimize resource utilization.
The service condition and welfare facilities given to the workmen are attractive and handsome.
The employees are satisfied with the facilities and services given by the company. The rate of
labour or employee turnover is almost zero and since its inception, no strike or lock- out in the
organization.
R.S.M.M.L |is having a HRD department who is arranging training and development programmes
for their executives and workmen, refresher courses are being arranged by their vocational
training centre, VTC at Jhamarkotra mines under the supervision of manager rank executives.
R.S.M.M.L has its own and separate marketing department at corporate office in Udaipur.
WEAKNESSES
Due to Government controls, RSMML has lesser flexibility compared to private organization.
Being Government company, procedural delays hamper quick decisions.
Being Government Company, it has to follow government rules and regulations.
OPPORTUNITIES
In the era of economic liberalization, R.S.M.M.L may try to obtain ISO- 9000 or 9002 in order to
access an extra mileage for their brand quality.
Most of the customers have strong faith on the quality of materials offered by R.S.S.M.L.
R.S.M.M.L may convert this faith into business by targeting potential & occasional buyers and by
improving the quality of the present service.
There are many opportunities for the organization for expansion and diversification of its
activities in India as well as abroad.
THREATS
The government of India controls entire business of phosphatic fertilizers and as such any change
in the government policies in future may adversely affect the company business.
The various deposits of minerals under the control of the company are depleting & would good
exhaust in future.
Some demand of rock phosphate is being full filled by import from foreign suppliers. Any
reduction in prices by the foreign suppliers may adversely affect the Indian market.
FINANCIAL PROFILE
FINANCIAL MANAGEMENT
Financial Management may be defined as planning, organizing and controlling of
financial activities in business enterprises.
Financial Management is concerned with raising of funds at optimum cost and their effective utilization
with a view to maximize the wealth of the shareholders.
It involves decision making in the following :-
1. Arrangement of funds
2. Investment of funds
3. Financing of different activities
4. Disposal of profits
The finance manager is primarily concerned with arranging finances in desired quantity, critical analysis
of the available investment opportunities and controlling the funds.
Thus, management of finance is crucial for success of business. The financial manager must see that
funds are procured in a manner that risks, cost and control considerations are properly managed in a firm
and there is optimum utilization of funds.
GENERAL OBJECTIVES
1. To help build company’s approach and policies to resource management.
2. To help build the company’s management process and procedures to plan, estimate, implement,
monitor and evaluate; including internal control procedures.
3. Arrangement of funds & Optimum utilization of resources.
The Research Methodology of this project report is as under:-
1. Objectives
2. Scope
3. Data Collection
4. Reliability of data
5. Analysis
6. Observation
7. Suggestion
OBJECTIVES OF THE STUDY
The present study aims to contribute towards the broad objectives, which are as follows:-
To gain maximum insight into the working of R.S.M.M.L in order to understand the practical
functioning of a corporate government enterprise.
To study the functioning of the finance department in R.S.M.M.L.
To know the budget and its process and to analyze the financial statements of R.S.M.M.L and
their interpretation.
To assess the financial condition and performance of the firm. Ratio Analysis technique has
been used for analyzing that.
SCOPE OF THE STUDY
For the purpose of this study R.S.M.M.L. Udaipur (the Corporate Office) was selected, keeping in view
of the easy accessibility and convenience in collecting data/ information.
The period covered under the study is three accounting years, i.e., 2009-2010, 2010-2011 & 2011-2012.
Though, Budget has been prepared for 2012-13 but since the annual accounts of the company for the
accounting year 2012-13 were under finalization that’s why not covered.
DATA COLLECTION
There are two types of sources from which data can be collected, these are as follows:-
(i) Primary Data
(ii) Secondary Data
(i) PRIMARY DATA:- Primary Data are those, which are collected for the first time by the
researcher for any particular problem.
(ii) SECONDARY DATA:- Those data, which are collected for some earlier research work and are
applicable or usable in the study researcher has primarily undertaken. The primary data in one
research work may take the form of secondary data.
For my research work I have taken only the Secondary Data because this study is about
knowing the budget of the company, which can only be done by the past records of the
company.
SOURCES OF SECONDARY DATA
Secondary Data can be collected from different sources, these different types of Secondary Data
are as follows:-
SOURCES OF SECONDARY DATA
Internal Sources External Sources
Various Internal ReportsPrepared by the firm Govt. Commercial Industry Miscellaneous Sources Sources Sources Sources
Accounting Sales Miscellaneous Reports Reports Reports
Other Sources for the Study:-
In order to achieve the objectives of my study, different methods are adopted including:-
Review of relevant literature on Budget and Budgeting Process.
Study of published annual reports of, and Budget of 2011-12 of R.S.M.M.L.
Discussions with company’s management,
And discussion with my mentor at company etc.
These exercises helped a lot in collecting relevant data and requisite information in time for the purpose
of the present study and also to interpret and analyze the results as also for getting important
classifications about various aspects of the study.
RELIABILITY OF DATA
A fairly good reliability of data/ information can be ascertained from the following, which has duly been
taken into consideration from the following sources:-
Study of relevant literature, project reports and articles.
Examination and study of published annual accounts of the company such as, Annual Reports of
the company and budget of the company.
Budget information has been taken from the company itself.
Personal discussions with company’ management.
Discussion with the academicians and professionals.
BUDGETARY CONTROL
The chartered Institute of management Accountants Landon, Defines a budget as under
“ A plan quantified in monetary terms prepared and approved to a defined period of time usually showing planned income to be generated or expenditure to be incurred during that period and the capital to be employed to attain a given objective.”
An analysis of this definition reveals of the following essential of a budget:
It is a plan expressed in monetary terms but it can also contain physical units. It is prepared prior to a defined period of the time (budget period) during which it will operate. It is related to a definite future period. It is approved by the management for implementation. It usually shows the planned income to be generated and expenditure to be incurred. It also shows capital to be employed during the period and It is prepared for the purpose of implementing the policy formulated by the management and the
objective to be achieved during the period.
Thus, a budget fixes a target in terms of rupees or quantities against which the actual performance is measured. A budget can, therefore, be taken as a document which is closely related to both the management function as well as the accounting function of an organisation.
CIMA, Landon defines budgetary control as –The establishment of the budgets relating to the responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted result either to secure by individual action the objectives of that policy or to provide a firm basis for its revision.
The essentials of budgetary control that are contained in this definition are
(i) Establishment of budgets for each function and section of the organization.(ii) Executive responsibility in order to perform the specific tasks so that objectives of the
enterprise may be attained.(iii) Continuous comparison of the actual performance with that of the budget so as to know the
variations from budget and placing the responsibility of executives for failure to achieve the desired result as given in the budget.
(iv) Taking suitable remedial action to achieve the desired objective if there is a variation of the actual performance from the budgeted performance.
(v) Revision of budgets in the light of changed circumstances.
Budget, Budgeting and Budgetary Control
Rowland and William in their book entitled Budgeting for Management Control has given the difference between budget, budgeting and budgetary control as follows
“Budgets are the individual objectives of a department, etc. whereas budgeting may be said to be the act of building budgets. Budgetary control embraces all this and in addition includes the science of planning the budgets themselves and the utilization of such budgets to effect an overall management tool for the business planning and control”.
Thus a budget is a financial plan budgetary control results from the administration of the financial plan.
Preliminaries for the adoption of a system of budgetary control
The following are the pre-requisites or steps for the successful implementation of a sound system of
budgetary control:
(i) A concern must have a clearly defined organization chart. This is necessary in order to have a clear
idea of authority and responsibility of each executive so that there may be no conflict among
functional executive for shirking responsibilities and blaming others for poor performance.
(ii) The business objective, plans and policy should be clearly defined and stated in unambiguous
terms. The scope of budgetary control should be clearly laid down.
(iii) The budget output should be stated in clear terms.
(iv) The budget or key factor, if any, must be indicated before starting the preparation of
budgets.
(v) There must be efficient system of accounting in order to record and provide necessary
accounting information to the management for successful system of budgetary control.
(vi) Budget committee should be set up for the establishment and efficient executive of the
plan.
(vii) To make budgetary control successful, there should be a proper system of communication
and reporting between the various levels of management. A two way system of
communication should be adopted. The top management should be able to communicate the
budget plan to the lower levels in clear terms who in turn should feedback by reporting the
deviation from the targets to the higher levels. On the basis of feedback, the top
management may again communicate instructions to the lower management for taking
corrective action.
(viii) Budget centres should be established for cost control and all budgets should be related to
cost centres. Budget centres will disclose the sections of the organisation where planned
performance is not achieved.
(ix) There should be a budget manual to indicate charter of programme. It contains all details
regarding the plan and procedures for its execution. It should also specify the length of the
period.
(x) To motivate the workers, the budget must be prepared by those who are responsible for its
performance.
(xi) The budget should cover all phases.
(xii) Top management approval is necessary in order to get full cooperation and acceptance of
the system of budgetary control. The system may fail in future due to disagreements which
may arise later on without approval of the top management.
Advantages of Budgetary Control
The important advantages of a budgetary control can be summed up as follows:
1. The most important advantage of a budgetary control is to enable management to
conduct business in the most efficient manner because budgets are prepared to get
the effective utilization of resources and the realization of objectives as efficiently
as possible.
2. It lays down an objective for the business as a whole. Even though a monetary
reward is not offered the budget becomes a game-a goal to achieve or a target to
shoot at-and hence it is more likely to be achieved or hit than if there was no
predetermined goal or target. The budget is an impersonal policeman that maintains
ordered effort and brings about efficiency in result.
3. Everyone working in the concern knows what exactly to do because budgetary
control laid emphasis on the staff organization.
4. Budgetary control takes the help of different levels of management in the
preparation of the budget. Budget finally approved represents the judgement of the
entire organization and not merely that of an individual or a group of individuals.
Thus, it ensures team work.
5. Management by exception is possible because the comparison of actual and
budgeted results points out weak spots so that remedial action is taken against weak
spots which are not in conformity with the budgeted performance.
6. It ensures effective utilization of men, materials, machines and money because
production is planned according to the availability of these items.
7. It is helpful in reviewing current trends in the business and in determining further
policy of the business because current and future trends are studied in the
preparation of the budget.
8. Budget acts as a measure of efficiency of departments and persons working in the
organization because budgets provide a yardstick against which actual performance
of departments and employees can be compared.
9. Budgetary control creates conditions for setting up a system of standard costing.
10. It helps in promoting a feeling of cost consciousness and in restricting expenditure
to the minimum.
11. It enhances the standing and credit of the undertaking with the government and the
banks because an efficient technique of cost control is used.
12. Functions of planning, co-ordination and control can be better performed with the
help of the budgetary control.
Limitations of Budgetary Control
The budgetary control as a management control device suffers from the following
limitations:
1. It may be impossible to achieve the budgeted targets as estimates and forecasts
relating to the future made in the budget can never be perfectly accurate for the
simple reason that future is unpredictable.
2. In rapidly changing conditions it may not be possible to achieve the budgeted
targets. Budgets may have to be revised from time to time, but frequent revisions
may prove to be a costly affair.
3. Budgets may serve as constraints on managerial initiative because every executive
tries to achieve the budgeted targets. It tends to bring about rigidity in control.
4. Correlation and coordination of various budgets is expensive; so small organizations
cannot afford the employment of budgetary control as a cost control technique.
5. Budgetary control may lead to conflicts among functional executives.
6. Budget is only a tool of the management and is not a substitute of management.
7. Badly handled budgetary control system with undue pressure and lack of regard to
behavioural aspects may cause antagonism and may lower morale of the employees.
8. Budgets may be developed keeping in view existing organization
Different Types of Budget
Different types of budget have been developed keeping in view the different purpose serve.
Budget can be classified according to:
(1) the coverage they encompass ;
(2) the capacity to which they are related ;
(3) the conditions on which they are based ; and
(4) the periods which they cover
Functional Budget
A functional budget is a budget which relates to any of the functions
of an undertaking, e.g., sales, production, research and development, cash etc. The
following functional budgets are generally prepared:
Budget Prepared by
(1) Sales Budget including Selling
and Distribution Cost Budget Sales Manager
(2)Production Budget Production Manager
(3) Materials Budget Purchase Manager
(4) Labour and Personal Budget Personnel Manager
(5) Manufacturing Overhead Production Manager
(6) Administration Cost Budget Finance Manager
(7) Plant Utilisation Budget Production Manager
(8) Capital Expenditure Budget Chief Executive
(9) Research and Development Cost Budget R & D Manager
(10) Cash Budget Finance Manager
Master Budget
Master Budget is consolidated summary of the various functional budgets. It has
been defined as "a summary of the budget schedules in capsule form made for the purpose of
presenting in one report, the highlights of the budget forecast". The definition of this budget given
by the chartered Institute of Management Accountant, England, is as follows:
“The summary budget incorporating its component functional budgets and which is finally
approved adopted and employed".
Fixed budget
The fixed budget is prepared for a specified operation level. In this budget no change
is effected on any change in production level. Therefore , such budget are not more useful for business
concerns because in practice operational level changes from time to time due to internal and external
causes such as conditions of demand and supply, market fluctuations etc.
When the actual activity differs from the budgeted level of activity, the use of fixed budget as a
basis of performance evaluation does not give correct picture. CIMA England has defined it, as “a budget
which is designed to remain unchanged irrespective of the level of activity attained.”
Flexible budget
A flexible budget may be defined as a budget which is designed to change in
accordance with the level of activity attained. According to CIMA England flexible budget is, “a budget
which by recognizing different cost behaviour pattern, is designed to change as volume of output
changes.” Earlier it was defined as “A budget designed to change in accordance with the level of activity
actually attained.”
Basic Budgets
A basic budget has been defined as a budget which is prepared for use unaltered
over a long period of time. This does not take into consideration current conditions and can be
attainable under standard conditions.
Current Budgets
A current budget can be defined as a budget which is related to the current
conditions and is prepared for use over a short period of time. This budget is more useful than a
basic budget, as the targets it lays down will be corrected to current conditions.
Long-Term Budgets
A long-term budget can be defined as a budget which is prepared for periods
longer than a year. These budgets help in business forecasting and forward planning. Capital
Expenditure Budget and Research and Development Budget are examples of long-term budgets.
Short-term Budgets
This budget is defined as a budget which: is prepared for period less than a
year and is very useful to lower levels of management for control purposes. Such budgets are
prepared for those activities, the trend in which is difficult to foresee over longer periods. Cash
budget and material budget are examples of short-term budgets .
Rolling (Continuous) Budget
This is a budget which is updated continuously by adding a further period (a month/ quarter) and deducting a corresponding earlier period. Budgeting is a continuous process under this method of preparation of budget. Once the first period elapses, the forecast for that period is dropped
and the forecast for the future period beyond the existing budget period is added, thereby a 12 months forecast is available. Where future costs or activities could not be predicted and forecast reliably, this method is useful. However, it is a costly exercise but matched by considerable reduction in operational variances.
BUDGETING:-
Budget is a financial and/or quantitative statement that is prepared and approved prior to the budget
period , of the policy to be persuade during that period for the purpose of attaining a given objective.
Budgeting is a critical step in planning and controlling day-to day operations. It is also a time consuming,
multilayered and complex process. To streamline the budgeting process and ensure more timely and
accurate budgets, companies place great value on a formalized process that produces detailed yet flexible
budgets that are fully aligned with the strategy goals of the organization.
Balancing flexibility and control, sophistication and ease of use, Budgeting is the tool of choice to create
and execute detailed budgets: transforming strategic goals into operational plans. Budgeting typically not
only simplifies the investment but also streamlines the sharing of data with key managers and future goal
and cash flow.
Budget means the future plan or estimation .It covers action in the whole of the organization for a definite
period of time, being a sum total of all Assets, Services and administrative offices put together in case of
RSMML.
Budgeting in RSMML
The philosophy:
The philosophy of budgeting in RSMML is to optimise it’s operations & profits & to chalk out the course
of action to be taken during the year down to the smallest activity.
The process:
Budgeting in RSMML starts keeping in view the corporate goals which themselves are set keeping in
view the economic environment, tax regime, govt policies demand for various products , production
capacities etc. The demand for various products is assessed by the Marketing Departments of the
concerned SBUs. Product-wise production & sales targets for various SBUs are set accordingly. The
whole process of setting production & sales targets is conducted at the top most level keeping in view the
assessed demand & other factors as mentioned above.
The sales targets are converted into sales budget including revenue from sales & related expenditure of
selling & distribution.
The production targets are further split downstream into targets for main production department, like
Mining dept., Crushing Dept, Industrial Beneficiation Plant (IBP), Contracts Dept. Etc. These
departments communicate their requirements of inputs & resources as also maintenance etc. to the various
service departments like the different machinery maintenance departments, Workshop, Purchase dept.,
Stores, Quality Control, Civil etc.
Each department then assesses it’s capacities to achieve the given targets/requirements & converts the
same into Capital & Revenue Budgets. Thus planning is done for each function/department to
synchronize with the targets/requirements. The Mining & Maintenance departments as well as Crushing
Dept. & IBP dept assess the requirements of new machinery/assemblies which constitutes part of Capital
Budget. They also assess the requirement of various inputs & services which constitutes part of revenue
budget. Likewise, other departments also assess their requirements of capital items & their input/services
requirements to synchronize with the SBU targets of production & sales. Justification is also given for
capital & revenue requirements.
Each department then submits its Capital & Revenue budgets to the Finance Department of the SBU
which then compiles & consolidates along with necessary notes/justifications & submits the same to the
SBU head. Once the SBU heads give go-ahead for the budget, the same is submitted to the Finance
Department at Corporate Office. Corporate Office then compiles & consolidates the SBU budgets
incorporating it’s own budget. After this consolidation series of meetings are held, including at the top
level, with various heads of SBUs & other departments to optimize profit.
After necessary amendments as per the discussions in the aforesaid meetings, the final budget is
submitted to Managing Director & after his approval; the same is put up before the Board of Directors for
final approval.
Budgetary Control in RSMML :
After the final approval of the Board of Directors, the budget document becomes the basis for all
activities during the period. Monitoring of the actual performance & expenditure vis-à-vis budget is done
through MIS.
Budget is prepared keeping in mind the following points: -
1. Economic environment
2. Tax regime / other changes in loan
3. Government policies
4. Corporate goal for the year
5. Demand & supply position of various products
6. Production capacities
7. SBU targets for production & sales
8. Last year expenditure
9. Inflation / Deflation
The traditional or incremental approach:-
RSMML has adopted traditional or incremental approach for Budget.
In the traditional approach, the budget was prepared on the basis of previous years figures. The past
spending was extrapolated every year. This carried forward the inefficiencies of previous year to
current year. However, while calculating variable expenses norms are also considered.
This budget estimates may change according to period and financial year. Like inflation/deflation,
bank rate, depreciation, pay commission etc.
Like in 2007-08-09 Rajasthan government announced 6th pay commission by which pay scale or
payment to & provision for employees were changed which were earlier constant or fix.
BUDGETING:-
Budget is a plan covering action in the whole of the organization for a definite period of time, being sums
total of all the individual activities of assets, services, and administrative offices put together. An effective
mechanism of financial management and control can be built up only on a sound comprehensive budgetary
system. Budgeting is essentially a managerial process and it should not be mistaken solely as an instrument
providing a basis for obtaining funds or providing a ceiling for expenditure.
At RSMML, Budget is prepared on accrual basis in four components:-
1. Capital budget
2. Revenue budget :
a. Operation budget
b. Procurement budget
c. Cash budget
1. Capital Budget–
Budget covering proposals of acquisition and disposal of Fixed Assets resulting in change in assets base,
enabling conduct businesses of the organization. It is the process of identifying, analyzing and selecting
investment projects, whose return are expected beyond one year. As also plant & machinery and other
capital resources required to achieve yearly goals.
At the headquarters, the Capital Budgeting process, to bring that in alignment with plans of the
organization, has been integrated with corporate planning, to primarily focus on the organization’s quest
for increasing the productive assets base.
Capital Budget is the plan for listing the expected investment proposals, schemes or projects, result of
which enables the organization to enables the organization to either reduce its operational costs, or increase
its revenue by increasing its working area/assets. It is the proposed plan of acquisitions and replacements
of long term assets and their financing. It is a process of deciding whether or not to commit resources to a
project whose benefits will be spread over several time periods. There are typically two types of
investments. First the selection decisions in terms of obtaining/creating new facilities or expanding
existing facilities such as Exploration and acquisition and improvement of Service and Infrastructure
Facilities. And second replacement decisions in terms of replacing existing facilities like replacement of
typewriter with computer or machinery or equipment and old inefficient vessel/rig with an efficient and
update one requiring much less operating or repair maintenance expenses. The Capital Budget is composed
of:-
1. New Projects/Schemes/Proposals:
A. Direct capital outlay including separate details for:
Finding Cost including Planned survey equipments and exploratory drilling expenses;
Fixed Assets including cost of land, infrastructural facilities, civil, mechanical, electrical and
instrumentation works, townships etc. for finding and creating production / processing
facilities;
Fixed Assets including equipment those are required to meet the requirements of production &
sales.
B. Technical Consultancy;
C. Commissioning Expenses;
D. Bought out Assets;
E. Interest during Construction;
F. Net Working Capital requirements;
G. Capital Expenditure not represented by assets;
H. Township and Social Overheads;
2. Capital Addition Expenses for alteration, amendment, modification for betterment, renovation, or
balancing of equipment or facilities, with the objective of reduction in cost or improving profitability over
a period of time.
3. Any other items of expenditure incurred for increasing revenues or reduction of costs of the
Corporation over a period of time extending beyond the year in which expenditure is made.
Budget format:
This format of budget is for SBU & PC’s which is used by RSMML.
Capital budget: SBU & PC Rock Phosphate
Rs. In Lac
Particulars Budget estimates
2010-11
Revised estimates
2010-11
Budget estimates
2011-12
Mining equipment
Ancillary equipment
Laboratory
Vehicles
Furniture fixture &
fittings
Office equipments
Electrical equipment &
installation
Civil work
Survey & planning
IBP Process
Mechanical -MPP
Mechanical -LGO
Electrical
Instrumentation
Weigh bridge
Construction of
connecting Road
MIS
(hardware,networking &
Site Preparation etc.)
Land Acquisition for
Kanpur Mines (Token
provision)
Land Acquisition for
DKT Mines (Token
provision)
Explosive Van &
Ambulance for KGM
Environment
management cell
Construction of STP at
Bagdhara Colony
Safety management
Total
2. Revenue / Operational Budget – Budget of Income and Expenditure of Revenue
incurred for the business of organization.
Revenue Budget:-
Revenue Budget is supposed to be plan for laying down the expected standards of performance in current
operations. It has broadly two components Operating Income and Operating Expenses. It is typically
composed of :-
1. Payment to & provision for employees.
2. Mining & processing expenses.
3. Financial costs.
4. Selling & distribution.
5. Administration overheads.
6. Any other items of expenditure incurred for carrying on with the day-to-day
activities of the Corporation, benefit of which shall be available during the year in
which it is being incurred.
Revenue Budget broadly includes all revenues from operations of the organization and costs applicable for
generation of such revenue for the time period of a year, segregated between production, general,
administrative, selling and repairs and maintenance cost incurred to maintain the producing/working assets
of the organization.
Budget format:
This format of budget is for SBU & PC’s which is used by RSMML.
REVENUE BUDGET: SBU & PC ROCK PHOSPHATE
Rs. In lac
Particulars Actual
2009-10
Budget
estimates
2010-11
Revised
estimates
2010-11
Budget
estimates
2011-12
A. PAYMENTS TO
& PROVISION
B. FOR
EMPLOYEES
Salary and Wages
Contribution to
Provident & Other
Funds
Bonus /Additional
remuneration
Employees Welfare
Exgratia to employee
Employees Social
Security
Leave Encashment
Provision for Arrears of
LTA / VI th Pay
Commission incl. PF &
Gratuity
VRS Expenses
B.MINING &
PROCESSING
EXPENSES
Purchase of ore
Stores consumed
Payment to Contractors
(a) For Removal of
overburden
(c) For Exploration &
Development in G Block
(b) For Transportation,
Grinding & Others
Dewatering of Mines
Crushing
Plant Expenses
Sampling & Analysis
Power Charges
Expenditure on mine
safety measures
Royalty
M.R. Cess
Prospecting &
Development Charges
Repairs to Plant
Machinery
Forest Plantation &
Environment clearance
Compensation for land
Rural & Urban
Development
Road Repair Expenses
Repairs to others
Rent, Rates & Taxes
Land Tax
Insurance
Laboratory Exp
Depreciation
C.FINANCIAL COSTS
Interest to Bank
Bank charges
Guarantee Commission
D. SELLING &
DISTRIBUTION
Selling expenses
Business promotion
expenses
Packing charges
Freight
E. ADMINISTRATIVE
OVERHEADS
General Charges
Repairs to Buildings
Traveling & Conveyance
Vehicle Up-keep
Postage, Telephone &
Telegraph
Seminar & Conferences
Printing & Stationery
Advertisement
Subscription Books &
Periodicals
Consultancy Charges
Prior Period Adjustment
Entertainment
Donation
Computer Maintenance
& Consumables
Legal & Professional
Charges
Loss on sale of
Machinery
Research & Development
Total
Budget Report:
Performance evaluation and reporting of variances is an integral part of all control
systems. Establishing budgets is in itself of no avail unless a comparison is made regularly between the
actual expenditure and the budgeted allowances, and all results reported to the management. For this
purpose, budget reports showing the comparison between the actual and budgeted expenditure should be
presented periodically in a tabular form or in graphs. The reports should be prepared in such a manner
that they reveal the responsibility of a department or an executive and give full reasons for the variances
so that proper corrective action may be taken.
Analysis of budget variance in RSMML for the year 2011-12
Department : Corporate office Budget Report
Period : 2011-12
Expenses Difference
Increase
%
Decrease
%
Reasons
A. PAYMENT TO & PROVISION FOR EMPLOYEES
4.77 Payment to & provision for employees decreases due to decrease in salary & wages, contribution to provident & Contribution to provident & other
funds10.98
other funds , provision for leave encashment.
Salaries and Wages 0.68
Exgratia to employee 12.92
Bonus/Additional Remuneration 22.50
Employee Welfare 14.80
Employee Social Securities 1.47
Provision for leave Encashment 96.32
VRS Expenses 5.90
B OPERATIONAL EXPENSES 8.33 Operational expenses increases due to increase in forest, plantation & environment projects, rural & urban development projects, repairs to others, rent, rates & taxes
Forest, Plantation & Environment 13.64
Rural & Urban Development (Social Responsibility)
95.20
Repairs to others 13.10
Rent, Rates & Taxes 92.00
Depreciation/Amortization 10.33
C. FINANCIAL COSTS 5.80 Financial costs decreases due to decrease in interest to bank / financial institutions, decrease in bank charges, guarantee commission
Interest to Bank/ Financial institutions
0.26
Bank charges including exchange rate diff.
93.18
Guarantee Commission 87.00
Selling expenses 0.98
D BUSINESS PROMOTION 20.80
E. ADMINISTRATIVE OVERHEADS
34.15 Administrative overheads decreases due to decrease in general charges, repairs to building, traveling & General Charges 65.07
conveyance, vehicle up-keep, electricity & water, seminar, training, HRD & exhibition, advertisement, books & periodicals, board meeting expenses, software upgrade & equipment maintenance, research & development & scientific studies, contribution to RSMML foundation.
Repairs to Building 76.55
Travelling & Conveyance 5.03
Vehicle up - keep 25.20
Payment to Auditor :
1. Audit Fee2. Tax Audit Fees3. For reimbursement of
expenses
0.33
42.50
Postage, Telephone & telegraph 11.00
Printing & Stationary 66.50
Electricity & water 5.93
Seminar, Training,HRD & Exhibition
73.00
Legal and Professional Charges 19.31
Advertisement 74.63
Book & Periodicals 75.00
Entertainment 392.0
Board Meeting expenses 3.33
Donations 78.08
Consultancy Charges - -
Claim & Settlements 11.53
Software upgrade & Equipment maintenance
75.60
Written off / Advance written 0.83
Sundry Debit Balance 27.87
Research & Development & Scientific Studies
75.00
Provision for Doubtful debts 15.83
Prior period expenses 10.74
Contribution to RSMML Foundation
100.0
Total 18.38
Profit 124.4
RSMML don’t want to publish their internal Data.
There was increase in the profits of corporate office of around 124% compared to budget due to
increase in revenue consequent upon recoveries related to wind farm.
CONCLUSIONS
From the study of budget of the company, following conclusions are made:-
The company makes two types of budget revenue budget and capital budget.
All SBU & PCs and corporate office make their budget separately.
Company makes its budget annually based on the traditional approach.
Whole budget is approved by M.D. & finally by board of directors.
Company doesn’t use any software for making budget however integrated software called
FAMIS has been prepared to integrate accounting, budgeting & costing which is being used
presently for accounting & would be expected to budgeting also.
The whole budgeting process is considered to be of standard nature.
Control vis. a vis. Budget is exercised through MIS.
I hope that this study of mine is of use to the organization and people concerned and also fulfill the
requirements of PGDM (finance) programme.
.
SUGGESTION
Creating an integrated data base so that data for budgeting and budgetary control are available at
all times. For this purpose integrated software called FAMIS (Finance and Accounts
Management Information system) has already been started which in true course will cater to the
above purpose.
APPENDIX
Questionnaire:
On conversation with Anamika Sharma DM (F&A) (Corporate office) the answers
of following questions are given below:
Q.1 What criteria do you consider while preparing budget?
Ans. Demand and supply position of various products, production capacities,
economic environment, tax regime, Gov. policies , corporate goal for the
year, SBU targets for production & sales, last year expenditure, inflation /
deflation are being considered for preparation of budgets.
Q.2 What types of problems generally you face while preparing budget?
Ans. Basically we face problems in collection of data.
Q.3 Is there any separate department for budgeting?
Ans. No, there is no separate department for budgeting. Budget is prepared in
finance department of every SBU & PC and corporate office.
Q.4 What is the time period for preparing budget?
Ans. We prepare budget annually. Generally in the month of January – February
and then revised it suitably.
Q.5 Is there any software for budgeting?
Ans. Company doesn’t use any software for making budget however integrated
software called FAMIS has been prepared to integrate accounting, budgeting
& costing which is being used presently for accounting & would be expected
to budgeting also.
Q.6 Where the budget meetings are held?
Ans. All meeting are held in Udaipur corporate office up to Managing Director
(MD) level where heads of all SBU – PC & heads of all departments of
corporate office meet & then they discuss giving justification on their
budget.
BIBLIOGRAPHY
Annual reports of the company
Books
Cost Accounting by – N.K Prasad
Cost Accounting by – Jain Narang
Website
Website of the company – “www.rsmml.com”