SYNOPSIS

This Project is done for the Chennai Port Trust to analyze the
Budgetary Control.

For researcher various areas of vital information are:

 To find the Variance between the Actual and the Budget Estimates of
the Organization for the Past Five Years.

 To find the Income and Expenses are Increasing year by year or

Decreasing.

 This Project aims to make the Trend Analysis, Variance Analysis and
prepare the Comparative Statement.

 This details enables the organization to have clear picture about

budgetary control. This could be help the top management in arriving
at a corrective decision.
 INTRODUCTION

BUDGET:

 In our daily life, we use to prepare budgets for matching the expenses
with income; and available funds can be invested in a profitable manner.

 Similarly in government Organization, budgets are prepared on the basis

of future estimated Income in order to find out the profit in a specified
period.

 A budget is in the nature of an Estimate and is a qualified plan for the

future activities to co-ordination and controls the activities for a specific
period.

DEFINITION OF BUDGET AND BUDGETARY

CONTROL:

 Budgeting is a process, which includes two important functions.

Budget and budgetary control. Budget is a planning function and
Budgetary Control is a controlling systems or technique.

 A control technique whereby actual results are compared with budget’s is

known as Budgetary Control.

 The exercise of control in the Organization with the help of Budgets is

known as Budgetary Control.
 THE PROCESS OF BUDGETARY CONTROL INCLUDES:

A budget is defined as a comprehensive and coordinated plan, expressed in

financial for the Operations and resources of an enterprise for some specified
period in the future.

 Preparation of various budgets.

 Continuous Comparison of Actual Performance with Budgetary

Performance.

 Revision of Budgets in the light of changed circumstances.

Budgeting plays an important in any Organization. Forecasting the events,

Planning allocation of funds are the major sources of Budgetary Control.

KINDS OF BUDGET:

Budgets may be divided into two basic classes:

1. Capital Budgets
2. Operating Budget

Capital Budgets are directed towards proposed expenditure for new

projects and often require special financing.

The Operating Budgets are directed towards achieving short-term

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

Operating budgets may be sub-divided into various departmental of

functional budgets. Sales budget, Production budget, Administrative
Expenses budget, Raw –material budget, All these sectional budgets are
afterwards integrated into a master budget, which represents an overall plan of
the organization.
 The other Types of Budgeting Known as:

• Zero Based Budgeting

• Performance Based Budgeting

ZERO BASED BUDGETING:

Each manager prepares estimates of his or her proposed

expenses for a specific period of time as though they were being performed
for the first time. In other words, each activity starts from a budget base zero.
By starting from scratch at each budget cycle, managers are required to take a
close look at all their expenses and justify them to top management, thereby
minimizing waste.

PERFORMANCE BASED BUDGETING:

Performance Budgeting results in a Budget which present the

operations of an enterprise in term of functions, programmes, activities and
projects. The measurement of actual performance with Budgeted performance
in terms of financial and physical is known as performance Based Budgeting.

ADVANTAGES OF BUDGETARY CONTROL:

There are a number of advantages of Budgetary Control:

• Compels management of think about the future, which is probably the

most important feature of a budgetary planning and control system.
Forces management to look ahead, to set out detailed plans for achieving
the targets for each department, operation and (ideally) each manager, to
anticipate and give the organization purpose and direction.

• Promotes coordination and communication.

• Clearly defines areas of responsibility. Requires managers of budget

centers to be made responsible for the achievement of budget targets for
the operations under their personal control.
• Provides a basis for performance appraisal (variance analysis). A budget
is basically a yardstick against which actual performance is measured and
assessed. Control is provided by comparisons of actual result against
budget plan. Departures from budget can then be investigated and the
reasons for the differences can be divided into controllable and non-
controllable factor

• Enables remedial action to be taken as variances emerge.

• Motivates employees by participating in the setting of budgets.

• Improves the allocation of scarce resources.

Main characteristics of a Budgetary Control are:

1. It is prepared in advance and is derived from the long-term strategy

of the organization.

2. It relates to future period for which objectives or goals have been laid
down.

3. It is expressed in quantitative form, physical or monetary units, or

both.

BUDGET AND BUDGETARY CONTROL IN CHENNAI PORT

TRUST:

• The Budgets in Chennai port Trust are prepared to meet their

expenses with their income in the forth coming year.

• Budget Estimates are made on the basis of the Previous Year Income
and an approval form is sent to the Government for the sanction of
Amount

• The Actual exceed the Budget Estimates so the necessary for

budgetary control arise.
 OBJECTIVE

PRIMARY OBJECTIVE:

• The Primary Objective of this Study is to explore the activities in

Chennai Port in achieving the Budgeted Estimates.

SECONDARY OBJECTIVE:

• To compare the Budget Estimates and Actual of Chennai Port Trust

for the Past Five Years.

• To carry out the Trend Analysis, Variance Analysis and to prepare

Comparative Statement.
 SCOPE

Any Organization has to look back, if it wants go to forward. This

study which is done at Chennai Port Trust aims at Studying the
Budgetary System and the ways of making it more Effective.

 The scope of this study is to compare the Budget Estimates, with the
Actuals.

 The study helps to know about the Budgetary Control at Chennai Port
Trust.
 LIMITATIONS

BUDGETARY CONTROL IS AN EFFECTIVE TOOL FOR

MANAGEMENT CONTROL. HOWEVER IT HAS CERTAIN
LIMITATION WHILE OPERATING IT AS A TECHNIQUE.

 Budgeting is a process of forecasting and estimation. Forecasting

may not be accurate.

 It is prepared on the basis of certain prevailing conditions. If the

conditions. If the conditions change budget are also to be revised.

 The data used for this is collected only from the Income and
Expenditure Statement

 At Present they are following the Zero Based Budgeting Method

which is not Properly Implemented.
COMPANY PROFILE

PORT PROFILE:

Chennai port is an artificial harbour situated on the

coromandel cost in southeast India and it is the second principal port
handling containers. Chennai port has 24 alongside berths and 1 mooring in
the 3 dock viz. Dr.Ambedkar Dock, Bharathi Dock, Jawahar Dock and
container Terminal the major items being handled are liquid and dry bulk.

COMPANY PROFILE:

INDRODUCTION:

In the sea borne trade of India the Chennai Port is one of the
most important ports in the east coast, it is growing as a hub port for
handling containers in the Eastern India, In terms of volume of cargo
handled the Chennai port stands in third place. The port is handling all kind
of cargoes and the infrastructure avails in the port is an asset to the shipping
industry in the southern region.
Chennai port in one of the eleven major ports of the country.
Out of seventy three thousand among the Major ports, nearly ten thousand
employees are working in Chennai port the main advantage of the port is
Geographical location, which caters to the needs of the user. UN the sea
borne trade of India, the Chennai port is one of the most important ports in
the Eastern Coast. It is growing as a hub port for handling containers in the
eastern India. In term of volume of cargo handled, the Chennai ports stands
In third place. The port is handling all kinds of cargoes. The infrastructure
and human resources available in the port is an asset to the shipping industry
in the southern region.

INFRASTRUCTURE OF THE PORT:

The Chennai port has considerable to handle 45 millions tons of

cargo. The details on the infrastructure are described as follows:
Water spread Land area No of berths
Inner harbour 218 acres 413 acres 16
Outer harbour 200 acres 100 acres 7
Chennai port 418 acres 513 acres 23

The port’s operational area is grouped into three dock system namely

1. Ambedkar Dock
2. Jawahar Dock
3. Bharathi Dock

There are 23 berths distributed in the above 3 dock systems.

ORGANISATION STRUCTURE AND DEPARTMENTS:

Chennai port, is go reined by board of trustees numbering about 21
presenting various losers, port management agencies, representatives of
labour, the customs, shipping personnel, the electricity food most [ Ministry
of surface transport ] apart from the Central Government and local state
government.

A Deputy Chairman, who is a trustee and head of various

departments, is assistant the chairman as the executive head.
THE HIERARCHIES IN THE CHENNAI PORT TRUST IN
AS FOLLOWS:

CHAIRMAN
↓
DEPUTY CHAIRMAN
↓
DEPARTMENT HEADS
↓
CHIEF OFFICER
↓
DEPUTY CHIEF OFFICER
↓
SUPERINTENDENT
↓
LABOURERS
PORT HISTORY:

The little fishing village called Chennai pattinam, which was

founded in 1639, became prominent during the early part of the 18th century
when the East India Company was active on the East Coast. In the Harbour,
to and from ships were anchored about quarter mile offshore and the cargo
to and from the ships were transported through small lighters called masula
boats as the loss of cargo while transporting through masula boats was high,
it was proposed to build a pier to berth larger crafts and an Iron screw pile
Pier was built in 1861 to a length of 1100 ft., perpendicular to the shore
during November 1881, due to violent cyclone over half a mile of
breakwater was breached and equipments and human lives lost. Through
there was a demand for relocating the entrance, the restoration was resumed
in 1885.

Port of Chennai [madras then] until the year 1875 was simply
an open roadstead on open sandy coast swept by storms and occasional
monsoons. Sir Frands Sprig, the then chairman of madras port trust in 1904
created a new north-eastern Entrance after closing the original eastern
Entrance to control the siltation of the Chennai in front of the basin.
Subsequently quays were constructed at different period[i.e.] south quay-1 in
1913, the five west quay berths in 1916 to 1920, North Quay in North
Quay in 1931 and south Quay-2 in 1936 in the Inner Harbour which was
later, christened as Dr. Ambedkar DOCK.
 The bharathi dock originally constructed as an outer harbour to
handle vessels up to [-] 16-2 m draft. An oil jetty to handle crude oil
imported by the manali oil Refinery [presently Chennai petroleum
Corporation Ltd ] was constructed initially during the year 1970 An Iron ore
berth was constructed in the same dock in 1974 for exporting Iron ore to
Japan and other far East countries subsequently one more oil jetty was
constructed during the year 1985 to meet the additional demand for
crude/products.

In 1970s the madras port trust started handling container traffic

was increasing, a container Terminal of 380 m length was constructed at
Bharathi Dock during the year 1983 as a first full-fledged container hub of
the country with container storage year of 51,000 sq. m and a area. The
terminal was provided with tow shore cranes and other shore facilities
required for container terminal.

Subsequently the terminal was farther extended by 220 m.

during the year 1991 with additional two shore cranes and other matching
infrastructural facility. As the traffic was constantly increasing the terminal
was further extended by 285 m, during fully 2002. This container terminal of
885 in total berth length with backup area was privatized lender concessional
agreement with M/s. X Chennai container. Terminal private ltd., On BOT
Basis for 30 years from November 2001.
 MAJAOR PORTS

Major ports are technically well developed with reference to men and
machinery.

In India, we have the following 12 major ports.

Chennai - Tamil Nadu

Tuticorin - Tamil Nadu
Visakhapatnam - Andhra Pradesh
Phsredip - Calcutta
Cochin - Kerala
Mangalore - Karnataka
New Mormugoa Port - Goa
Mumbai - Maharastra
J.N.P - New Bombay
Kantla - Kutch Region of Gujarat State
GEOGRAPHY OF CHENNAI PORT

GEOGRAPHY OF THE PORT:

1. Ambedhkar Dock
2. Jawaher Dock
3. Bharathi Dock
4.
AMBEDKAR DOCK

Type of cargo handled General cargo, cars, granite steel,

food grains.
Other usage Passenger vessels
Terminal
Terminal Car Terminal
Cruise Terminal
Name of Berth North Quay, West Quay-I,II, West
Quay-III,IV, South Quay I,II,III, East
Quay

Second container terminal

 Ambedkar Dock the type of cargo handled are general cargo, cars,
granite steel, and food grains. In this dock the scheduled depth meters is
from 8.50 to 12.00 meters. And its quay length is of 198.00 meters to
372.00. The transist shed is attached to this dock. The E.Q services berth is
0 to 60 m from south, from south 9.00 m 60 to 372 m 12.00 m and the naval
navy vessel berth is 200.00, to 60 m from north 9.00 m to 60 to 200 m 1200
m.

JAWAHER DOCK:

Type of cargo handled Coal fertilizer, Iron one lumps,

pellets, edible oil, phosperic acid
Other usage Nil
Terminal Nil
Name of berth JD,1,2,3,4,5,6.

In jawahar dock the type of cargo handled are coal, fertilizer,

iron ore lumps, pellets, edible oil, phosperic acid, and there is no other usage
and terminal in this dock. The names of the berths handled in this dock are
1,2,3,4,5,6. In this dock the scheduled depth is from 10.40 to 11.00 in meters
and the quay length is from 218.33 meters. It has the transit shed attached
and overflow shed attached.
BHARATHI DOCK:

Types of cargo handled Container, Iron

Other usage Nil
Terminal i. Container terminal
ii. Iron one terminal
iii. Oil terminal
Name of berth Container ( T, 1,2,3)
Iron one – B02
Oil – B 21, 3D3

In this dock the type of cargo handled are containers, iron ore, POL,
there is no other usage in this dock. The are three types of terminal they
container terminal, iron ore teorminal, and oil terminal. The names of the
berths are container (T,1,2,3), Iron ore – B02, Oil – B 21, 3D3. The
scheduled depth is from 355.65 to 307.50. The length between the extreme
dolphins is 67.50 m on the southern side was damaged during Tsunami in
26-12-2004.

DEPARTMENTS
The Major Five Departments which have selected to use in the Study.

TRAFFIC DEPARTMENT:

It looks after all the matters relating to the provision of facilities for
cargo handling. It also licenses to hawkers, controls allotment of rent
stocking area, what’s rent etc.

MARINE DEPARTMENT:

It manages the movement of the ships in and out of the harbours. It

guards against fire hazards in and out of the harbour.

CIVIL ENGINEERING DEPARTMENT:

It executes such formation as preparation of project, report, estimates,

design and scrutinizing of tender documents, procurement of stores &
protection of the employees.

ELECTRICAL AND MECHANICAL DEPARTMENT:

This department is responsible for the operational and working of the

iron ore handling plant and running of port work shops, operation and
maintenance of port.

SECRETARIAL DEPARTMENT:

It deals with matters like industrial relation public relation and

training center and dealing with establishment matters to all department.
It co-ordinates all department. It also looks after the welfare of the
employees.
OUR MISSION:

The Chennai Port Trust is committed to:

  To achieve excellence in port operations through dedicated, loyal
and committed workforce to enhance customer satisfaction.

 Strive for continual improvement at all levels by enhancing skills,

knowledge and enthusiasm to meet the needs of the challenging
world.

 Strive to achieve maximum values addition through the most

effective use of resources.

OUR VISION:

 To become the best among all Ports in all aspects.

 Empower employees for shouldering higher responsibilities

resulting in job enrichment and job satisfaction.

 To become the best Port in environmental management and it

controlling pollution.

OUR POLICY:

 The Chennai Port Trust is committed to;

 Provide efficient, prompt, safe and timely services at optimum

cost.

 Ensure quick turn round of vessels by providing facilities for

efficient handling of cargo.

 Maintain total transparency in all our transactions and

 Continuously improve our services to meet the expectations of the

Port Users, employees and the Society.
 DEVELOPMENT OF PORT TRUST

1877- Construction of the south pier was commenced with stones brought
from Pallavaram on the old Indian railway which had been opened by them
and which was extended the harbour works authorities.

1881- Construction of a harbour was completed and handling of ships inside

the harbour was started. A disastrous cyclone occurred on 12.11. 1881 the
sea swept over the break waters from both sides of the harbour damaging the
work to an enormous extent.

1906- Sir Francis Spring assumed charge as the chief engineer if the port.

1912- Construction of south quay – I was completed.

1916- A harbour office building was constructed at centre quay-of west quay
berths.

1936- Construction of south quay- II was completed..

1959- Passenger station on the 1st floor of the transit shed at north quay was
commissioned.

1961- Construction of signal station was completed at north quay.

1965- Construction of outer harbour “Bhartathi dock”.

1972- Construction of oil jetty was completed at Bharathi dock.

2000- Exports of cars was started in this year.

2001- Container terminal was handed over to M/s CCTL under 30- years
lease for managing and operating the terminal.

2003- Berth (574 mts) was reconstructed and a port was given to Navy for
30-years lease (200 mts)
FUTURE PLANS:

 Second container terminal with a capacity of 1 million TEU’s per-

annum,developed by PSA-SICAL

 Master plan for port railway, realigning rail and road network

 Mechanized conveyor system for coal to handle 9 MT

 Dedicated evaluated expressway from Chennai Port Trust madura royal

to NH4 as been approved by the government to enhance the hinterland
connectivity.

 Development of Ro-Ro terminal and multi level car parking facility with
a capacity of 5000 cars

 The break water extension from existing outer arm will be utilized to
develop deep draft oil berth for handling VLCCs.

PORT DETAILS:

GEOGRAPHICAL LOCATION

Latitude - 13 06’N
Longitude - 80 18’E
Climate - Tropical
Time - +5 hrs 30 minutes
Temperature - 30 c max
18 c min
Annual rainfall - About 125 cms
Spring Tides - 1.2 meters
Water area - 420.00 acres (169.97 hectares)
Land area - 586.96 acres (237.54 hectares)
FUNCTION OF THE PORT

The port renders two types of services:

 Ship related

 Cargo related

(i) Ship related services:

• Berthing / Un berthing of ship.

• Provision of pilots to the ship.

• Marine crew to provide assistance on shore while berthing / un

berthing.

• Provision of pilot launches.

• Water supply to ships.

• Bunkering.

(ii)Cargo related services:

• Labors on board.

• Hire of cranes & if necessitated stevedoring, operation etc.