BUDGETARY CONTROL IN

NATIONAL FERTILIZERS LTD.

Bhatinda

Presented by:
Karan Jain
2023
COMPANY PROFILE
 National Fertilizers Limited (NFL) is a fully
owned Government of India undertaking and
was set up on 23rd August 1974.
 NFL is a multi unit, multi product company and
is one of the India’s largest producers of
Nitrogenous fertilizer with a market share of
16.8%. 
 National Fertilizer Limited (NFL) is the first
fertilizer manufacturer in the country Neem
Coated Urea.
 Awarded Excellent rating for 2008-09
Which is for 9th year in row
About National Fertilizers ltd.
 Registerd On 23 Aug, 1974
 Authorised Capital
Rs.50000.00lakh
 Issued Capital
Rs.49057.84 lakh
 Capacity 13.70
lakh Mt Nitrogen
 Bathinda unit Of NFL
 Urea Prodction 511500 Mt
 Commisioned on 1 oct,1979
 Project cost 23930 lakh
 Foreign investment 6787 lakh
 Products

 Kisan Urea
 Neam Urea
 Bio-Fertilizers
 Various industrial products
 ect
Introduction to Proj
Introduction to Budgetary
control
WHAT IS BUDGETARY CONTROL?
Budgetary control is the use of the comprehensive system of
budgeting to aid management in carrying out its functions like
planning, coordination and control.
This system involves:
 Division of organization on functional basis into different
sections known as a budget centre.
 Preparation of separate budgets for each “budget centre”.
 Consolidation of all functional budgets to present overall
organizational objectives during the forthcoming budget period.
 Comparison of actual level of performance against budgets.
 Reporting the variances with proper analysis to provide basis for
future course of action.
10
 CLASSIFICATION OF BUDGETS

ACCORDING TO ACCORDING TO ACCORDING TO

TIME FUNCTION FLEXIBILITY

1. Long term budget 1. Sales budget 1. Fixed budget

2. Short term budget 2. Production budget 2. Flexible
budget
3. Current budget 3. Cost of Production budget
4. Rolling budget 4. Purchase budget
5. Personnel budget
6. R & D budget
7. Capital Expenditure budget
8. Cash budget
9. Master budget

11
Essentials of Effective budgeting system

 Efficient organization
 Preparing master budget
 Quick reporting
 Flexible
 Support of top management
 Based on reasonable assumption
 Reward and punishment
 Appropriate authority
 Disadvantages, Limitations or
problems of budgetary control
 Inaccuracy
 personal bias
 Non-availability of Co-operation
 Rigidity
 Results are not attainable
 Consistency
 Time Consuming process
 Ineffective budgetary control
 Discourage the initiative
 More paperwork
Review of Literature
YEAR AUTHOR FINDINGS

(1999) David Explored some of the processes of

Marginson
control operating organisation
(2007) M. Cook et Suggested that tight budgetary
al
control may not be very effective
(2008) Ahmad Discussed on accounting theory and
Bello
it facilitates budgetary control

(2006) Ishola Examines how budget and

Rufus budgetary control can impact on the
akintoye performance.
NEED, SCOPE AND
OBJECTIVES OF THE
STUDY
 NEED OF STUDY
 The need of the study was done effectiveness
and removal of wastages from its operations
and such that it runs competitively As there is a
heavier competition in the market of fertilizers
In order to cope up and sustain the market
SCOPE OF THE STUDY
The study of Budgetary control is purely based on
secondary data and is limited to National
fertilizers ltd. Bathinda only
 Objectives of the study
 To know about the need for budgetary control
system in the Company:
 To develop the understanding about responsibility
as to why and by whom it is made.
 To study and review the present budgetary control
system in NFL, Bathinda for the purpose of better
understanding of system and making it more
effectiv
Research Methodology……
 RESEARCH DESIGN
DESCRIPTIVE

TOOLS OF ANALYSIS
TABLE,BAR CHARTS,
RESEARCH PERCENTAGES
METHODOLOGY

SOURCES OF DATA
SECONDARY
Findings of the study
 Production Of urea to capacity
Production(in tonnes)
106

105

104

103
Production

102

101 Percentage to capacity

100

99

98

97
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Years
 Sales Turnover
SALES TURNOVER ( Rs.In Crores )

1400

1200

1000
Sales Turnover

800
SALES TURNOVER ( Rs.In
Crores )
600

400

200

0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Years
 BUDGET PROJECTION
BUDGET 2008- BUDGET 2009- PROJECTION FOR 2010-
SL.NO PARTICULARS
2009 2010 2011
  INCOME      

1
Capacity 11.946 11.946 11.946
2
P1 7.527 7.566 7.5465
3
P2 5.973 6.733 6.353
4
Production (urea) 13.5 14.298 15.58482
5
Production (mi) 389.44 0 424.4896
6
Sales(urea) 13.5 14.298 15.58482
 
Sales(mi) 375.36 584.86 637.4974
8
Freight subsidy 700 900 1215
9
Sales 66243.56 71545.4 77984.45
 
EXPENDITURE      
1
Purchases (raw materials) 73815.99 77294.1 82704.687
2
Power and fuel 26781.82 26769.76 27305.1552
3
Salaries ,wages and benefits 5883.12 6987.38 82947.7188
4
Packing materials consumed 6398.02 6341.44 6595.0976
5
Distribution expenses 765 532.95 586.245
6
Other expenses 8267.38 8122.63 8528.76
7
Interest and financial charges 14992.65 12916.5 12342
8
Depreciation 12567.5 12229.94 12567.5
 VARIANCE ANALYSIS
             RSRS
ININ LAKHS
LAKHS    

PARTICULARS
PARTICULARS BUDGET
BUDGET ACTUALS
ACTUALS VARIANCE
VARIANCE BUDGET
BUDGET ACTUALS
ACTUALS VARIANCE
VARIANCE

    2008-09
2008-09 2008-09
2008-09 2008-09
2008-09 2009-10
2009-10 2009-10
2009-10 2009-10
2009-10

Net
Netsales
sales 65100.69
65100.69 66190.91
66190.91 1090.22
1090.22 70058.91
70058.91 237191
237191 167132.O9
167132.O9

Other
Other income
income 480
480 1984.33
1984.33 1504.33
1504.33 117.5
117.5 1199
1199 1081.5
1081.5

Total
Totalexpenditure
expenditure 8267.38
8267.38 6600.4
6600.4 -1666.98
-1666.98 8122.63
8122.63 204334
204334 196211.37
196211.37

Interest andFinancing
Interest and 14992.65
14992.65 16296.63
16296.63 1303.98
1303.98 12916.5
12916.5 16932
16932 4015.5
4015.5
Financing
charges charges

Depreciation
Depreciation 12567.5
12567.5 12015.21
12015.21 -552.29
-552.29 12229.94
12229.94 12096
12096 133.94
133.94

PBT
PBT 6940.71
6940.71 4013.03 -2927.68
-2927.68 2251.29
2251.29 5028
5028 2776.71
2776.71
 COMPARISON ANALYSIS
PARTICULARS NFL BHARTH CHAMBAL DEEPAK MFCL CORMONANDEL

  amt Amt Amt amt Amt Amt

INCOME            

Sales turn over 2193.59 1.43 2728.78 11,14.27 1627.67 3844.09

Excise duty 0 0.12 0.52 90.57 2.28 44.31

Net sales 2193.59 1.31 2728.28 1052.14 1625.39 3799.78

Other income -29.07 0.09 74.73 32 -3.5 20.89

Stock adjustments 100.98 -0.06 -71.13 -27.01 -0.6 -65.7

Total income 2265.5 1.34 2731.86 1057.13 1621.29 3754.97

 Conclusions
and Recommendations
 RECOMMENDATIONS
 The main reason for decline in profit is increase in the manufacturing
cost. About 70% of the total manufacturing cost of urea is attributable to
cost of feed stock.
 Bio-fertilizer gives the ever best performance and to increase the profit
production of biofertilizer should be increased.
 NFL must have to spent good amount of R and D so that innovative
products can be launched to stay ahead from its competitors.
 The Farmers are illiterates or less educated so NFL has to spent more on
educating them about the new products and their use.
 More new creative minds are required as emloyees are mostly 45 years
or more
ANY QUERIES