SUMMER TRAINING REPORT

ON
Budgetary Control
Training undertaken at OMAXE LTD, corporate office, kalkaji,
New Delhi

SUBMITTED TO AMITY UNIVERSITY OF DISTANCE LEARNING

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD
DEGREE OF
Master of Business Administration (MBA)
SESSION: 2013-2015
Submitted by:
Anshul Singla
MBA 4TH SEMESTER
ENROLL NO. A19201130931
UNDER THE SUPERVISION OF:1. VINIT GOEL
(CHIEF MANAGER FINANCE)

AMITY UNIVERSITY OF DISTANCE LEARING

UTTAR PARDESH
1

DECLARATION
I hereby declare that this summer training project report based on Finance, submitting for partial
fulfillment of the requirement for the degree of MBA (FINANCE) from AMITY UNIVERSITY OF
DISTANCE LEARING is of my original work. This report is for only educational purpose and not for
any other purpose.

(Anshul Singla)

ACKNOWLEDGEMENTS
Getting the practical training in the prestigious organization of OMAXE LTD. Is very much
informative and fruitful experience for me. I wish to express my deep sense of gratitude towards all
those who have helped me in the best possible way.
I am grateful to my training in charges Mr. VINIT GOYAL (Finance Chief Manager) and Mr. ASHISH
KUMAR JAIN (GENERAL MANAGER) Finance without his kind help and guidance it would not have
been possible for me to complete this project Budgetary Control System At Omaxe Limited
in such a short period successfully.
I would also like to thank MR. VINIT GOYAL (Finance Chief Manager) & entire team of OMAXE
LIMITED for the constant support and help in the successful completion of my project.

(Anshul Singla)

TABLE OF CONTENTS
Contents
Chapter 1
Chapter 2

Page No.
Introduction

6-14

Objectives and Scope of Study

15-16

Chapter 3

Methodology

17-21

Chapter 4

Company Profile

22-36

Budgeting and Budgetary System 37-49

Chapter 5

Data Analysis & Interpretations

50-62

Chapter 6

Charts

63-69

Chapter 7

Findings

70-71

Chapter 8

Suggestions & Conclusions

72-74

Suggestions
Conclusions
Chapter 9
Chapter 10

Annexure

75-79

Bibliography

80-82

EXECUTIVE SUMMARY
OMAXE LIMITED is the co-operative company. The project has been undertaken on the topic
A STUDY ON BUDGETARY CONTROL at OMAXE LIMITED As budgetary control helps to
understand goal of the concern whether it may be short or long term goal.
As the budget is playing an important role in any organization which helps to compare the
actual performance with the budgeted performance .The concept of the Budget and way of adaptability,
which creates new challenges to industrial sector for surviving in this current competitive edge. It
indicates the progress of the concern by way of its sales or profit, market shares, process of the concern
etc.

CHAPTER-I
INTRODUCTION

INTRODUCTION:

It is well recognized that budget are among the essential tools of management of any organization
unlike

other management aids, budgets are made use of practically by all functionaries in the

organization. Budgets not only reflect the plan of action for different levels of management but are also
useful to monitor various activates and initiate mid course corrective actions. Budgets just do not
reduce the managerial function to a mere formula but aids as a managerial tool.
Henceeffective use of this art as well science. Thus it needs continuous budget education and creation
of evaluation and performance through budgets. Budgets provide management summarized picture of
the results to be expected, also forms the proposed plan of operations. They enable the management to
determine whether the plan is satisfactory. Budgets serve as a guide to executives and departmental
heads. They measure performance since Budget Deviations reflect either the organization failure to
achieve the planned standards of performance or its ability to better them.
Thus budgeting is a means of obtaining the most productive and profitable use of the companies
resources through planning and control. Budgets are helpful in coordination the various activities (Such
as production, sales, purchase etc) of the organization with the result that the activities precede
according to the objective.
Budgets are means of communication. Ideas of the top management are given the shape of the
budget and are passed on the subordinates who are to give them the practical shape. As the activities of
various departmental heads are coordinated at the preparation of budget, it is helpful in developing a
team work which is very much needed for the very success of an organization. Thus, a budget is
necessary to plan for the future, to motivate the staff associated, to coordi9nate the activities of different
levels. A budget is an overall blue print of a comprehensive plan of action expressed in physical and
financial terms; it includes plan for each of the activity responsibility centers of the business and
provides a link between the physical and financial plans of various departments of a company. It is also
a document to serve as control for monitoring and review. The budget system should be such that it
makes it imperative for management to establish goals and objectives, define policies, develop
7

programmers both long term and short term, measure performance against the targets and in the
process, revises the part of management. In a way of budgetary control system has been increasing an
enterprises profits, and a goals-achieving machine for facilitating organizational coordination and
planning while achieving the budgeted targets.

NEED FOR BUDGETS

The rationales for budgets have five aspects:
1. Authorization: The budget is used to authorize the expenditure and activities contained in it.
2. Evaluation of performance: The planned activities and expenditures contained in the budget
provide a standard against which the actual achievement of the firm can be measured and
evaluated.
3. Coordination of activities: The piecemeal budgets of the subunits of the firm are so framed that
each sun-unit is made to contribute to the achievement of the overall budget.
4. Control: The setting up of organizational machinery to direct efforts towards the planned aims.
The budgets sets out the planned activity, subsequent deviations between achievement and plan
will indicate the need for investigation and corrective action.
5. Motivation: The budget is so constructed as to move employees form one target goal to
another; indeed it is bound up with the reward punishment type of organization environment and
bureaucratic decision processes, where employees are given incentives to work towards the
achievement of the firms targets.

WHY COMPARE ACTUAL AND BUDGET?

One of the objectives of budgeting is to provide a base against which actual performance can be
measured. This is only worth doing if action will be taken as a result.
8

In too many organizations the production of results compared to budget is seen as the end of the process.
If no action is taken on the basis of management accounts then there is little point in producing them and
even less point is wasting management time discussing them.
By identifying progress we are better informed regarding the effects of our actions and have a clear
understanding of the effect of any future action we take. Knowing how much is being spent each month
enables a manager to consider whether action needs to be taken to spend more or less in the future. This
process is only worthwhile if the budget is realistic. Analyzing variances against an unrealistic budget is
pointless.
However in a well runs organization the comparison between actual and budget is used as the basis for
deciding the appropriate action. This paper sets out how the analysis is used to maximum effect. The
process is really part of the normal control process.

WHAT CAUSES BUDGET VARIANCES

There are four key reasons and it is important that good managers recognize the differences, because the
action required is may be completely different in each case.
The four reasons are:
1. Faulty Arithmetic in the Budget figures.
2. Errors in the Arithmetic of the Actual Results
3. Reality is wrong
4. Differences between Budget Assumptions and Actual Outcome
Each of these will be examined in turn.
1) Faulty Arithmetic in the Budget Figures
It is perfectly to have an error in the budget. This includes errors of commission or duplication as well
as pure arithmetic. One action is to make a note to ensure it does not happen again when the next budget
is being done. Other action depends on the error.
9

Assume the budget stated no overdraft would necessary and it now appears one is required because the
sales forecast was used to predict cash inflows rather than the debtor payments. There are two options:
Go to the bank and ask for an overdraft, or take some other action to improve cash flow to stay within
the budget cash figure. The original budget numbers will need to be changed to reflect the new
circumstances and future reporting should be against the revised budget (often called a reforecast or
latest estimate.) Action is required but it may not be within the area where the error was made.

AVOID: The Accounts figures are always different from ours so we ignore them and keep our
records.
2) Errors in the arithmetic or the actual results

It is perfectly possible for the actual results to be reported wrongly. This includes the use of the wrong
category omission of costs; double counting of income etc. one well known way of staying within
budget is to throw away any invoices received from Suppliers, or charge them someone elses account
code. This sort of deliberate action makes nonsense of budgetary control and must be avoids. The
corrective action once this is discovered is to prevent it happening again. Improvements in management
education and control procedures are recommended.
One extra consideration is that in order to correct the error the cumulative results will need to be
corrected. This means either putting through a correction in the next period, which will then also be
wrong, or adjusting the past results to correct the error.
Failing to note that the correction can cause misleading results can lead to wrong decisions being made.

AVOID: The accounts figures are always different from ours so we ignore them and keep our own
records.
3) Reality is wrong.
Sometimes the actual results are useless as an indicator. A strike or natural disaster will have an impact
on results. This does not mean that the budget process in future should include an allowance for this
10

happening again. (However in large organizations it is normal to allow for the impact of a disaster
centrally as a contingency even if it is not budgeted at operating unit level.) If necessary, insurance
should be taken out. If business is disrupted for two weeks, then it is pointless to compare the remaining
two weeks of the month against a full months budget. Produce a realistic budget for only two weeks
and compare against that to establish true performance under normal circumstances.

AVOID: The variances are distorted because of ..So its not my fault.
4) Differences between budget assumptions and actual outcome

This is the key issue and the one which involves the use of variance analysis techniques. Remember that
all budgets contain errors in the assumption No one knows the future outcome for certain. The
important thing is not to apportion blame by looking backwards, but to look forwards and take action to
improve the future in the light of experience. The action to be take action to be taken depend s on
circumstances. However, punishing deviation from the budget is the best way of destroying the budget
process.
Manages will spend up to budget, conceal data, make the actual fit the budget in order to avoid blame.
This is particularly true in large multi-national organizations. The emphasis must be on what can we do
about it, rather than why the results are different.

AVOID: We are under budget, who can we blame?

HOW ARE VARIANCES CALCULATED

There are two important rules:
1) The level of variance analysis should be decided by the needs of the decision maker, not the
convenience of the reporter.
2) The budget must always be flexed for volume changes to produce realistic Variances.

11

EXAMPLE:

PARTCULARS

BUDGET

TOTAL

SALES VOLUME

100

90

SALES VALUE

1000

990

VARIABLE COSTS

500

495

FIXED COSTS

200

210

PROFIT

300

285

The budget committee wishes to blame someone for the fact that profit is down by 15.
It is obvious who is to blame sales are below target and fixed costs have not been controlled.

PROPER VARIANCE ANALYSIS

The require some through and some simple calculations. It has 4 Stages:
1) Flexing the budget.
2) Analyzing the variances.
3) Identifying the causes.
4) Taking appropriate action.
Since only the last of these is a value adding activity, the first three are only worth doing if step 4 is
taken in time to help future results. This may mean the first three steps have to be done fast even if that
reduces their accuracy.
FLEXING THE BUDGET
In the example it is futile to compare the actual variable costs with the budget. To do so suggests that
the manager is doing better than budget, but actual volume is below budget so costs should be lower. It
is vital to produce a revised budget to use for comparison. This does not mean that the original budget is
useless. It merely means that in order to analyze the 15 difference it is important to start by removing
the impact of volume changes on the various headings which are by it.
12

PARTICULARS

ORIGINAL BUDGET

REVISED BUDGET

ACTUAL

SALES VOLUME
100
90
90
SALES VALUE
1000
900
990
VARIABLE COSTS
500
450
495
FIXED COSTS (LESS)
200
200
210
PROFIT
300
250
285
This recalculates the budget using actual volume but budget prices and shows that the expected profit for
90 units is 2502. Thus the impact on profit is a reduction of 50 and this can be identified as SALES
VOLUME VARIANCE Rs. (50). A common convention is to put unfavorable variances in brackets.
Now the other variance can be calculated.

ANALYSING THE VARIANCES:

PARTICULARS
SALES VOLUME
SALES VALUE
VARIABLE COSTS
FIXED COSTS (LESS)
PROFIT

ORIGINAL
BUDGET
100
1000
500
200
300

REVISED BUDGET

ACTUAL

VARIANCES

90
900
450
200
250

90
990
495
210
285

90
(45)
(10)
35

The valid set of budget data is to compare against actual. The variance on sales can be due to price.
This is the SALES PRICE VARIANCE of Rs. 90.
The variable costs require further investigation.
Assume that the original budget was to use 2.50 meters of material for each sales unit and that each
meter was expected to cost Rs. 2.00. This gave a budget figure 100 X 2.50 X Rs.2.00=Rs.500.
The Actual result included a price of Rs. 2.75 per meter but only 2.00 meters were used per sales unit.
This gave an actual figure of 90 x 2.50 x Rs.2.00 = Rs. 450.
To identify the cause of the variance of Rs. 45, we need to separate the price impact from the usage
impact.
Price
We expected to pay Rs. 2.00 per meter; we did pay Rs. 2.75 per meter.

13

Each of the 180 meters we bought cost 0.75 extra .180 x (2.00-2.75) = Rs. (135) this is the
MATERIALS USAGE VARIANCE Rs. (135).

Usage
We expected to use 225 meters in total to make 90 units; we did use 180.
At the budget price of Rs. 2.00 we saved ..Rs.2.00 x (180-225) = Rs.90
This is the MATERIAL USAGE VARIANCE Rs.90.
On fixed costs we expected to spend Rs. 200 but we did spend Rs. 210.
The FIXED COST VARIANCE IS Rs. (10).
SUMMARISING THE VARIANCES
SALES VOLUME

(50)

SALES PRICE

90

MATERIALS PRICE

(135)

MATERIALS USAGE

90

FIXED COSTS

(10)
----------(15)
======

IDENTIFING THE CAUSES

This is where politics and blame apportionment must be avoided. Consider these possible Comments on
the above figures.
The price of the raw materials went up so we asked the factory to be careful about waste and told the
manufacturing force to put prices up.

14

CHAPTER-2
OBJECTIVES AND SCOPE OF STUDY

OBJECTIVES OF STUDY

To provide a theoretical framework of budget, and budgetary control.

15

To describe the profile of the organization as a backdrop for undertaking a study of budgetary
control system.

To analyze the budgetary system in practice in Omaxe Limited with particular reference to their
objectives and phases of organizational and re-appropriation.

In addition to the analysis of the conventional budgetary system in practice in Omaxe Limited.
The study aims at evaluation and modification to the budgetary system with reference to the
various types of budgets. The scope in the formulation of performance budget is also studied

SCOPE OF THE STUDY

The budgetary control system in Omaxe Limited considers generation and transmission line
projects as independent cost centers. This system prepares the operation and management
budget for each of the cost centers as per the requirements of the cost system. The budget for
the investment center is the sum of the budgets of the cost centers. Separate budgets are
prepared for revenue activities other than Operations and Research Development, Consultancy
Contracts. To facilitate management, budgets are phased into monthly or quarterly targets .The
actual performance is analyzed against this budgeted performance in order to take corrective
remedial actions if variances any exist. The projection of internal resources over a period of 5 to
15 years and updating 5 years plans of the company is also done.

16

CHAPTER-3
METHODOLOGY

RESEARCH METHODOLOGY
Meaning

17

Research is a systematized effort to gain new knowledge. It is a systematic study

consisting of a problem formulating a hypothesis collecting the facts and data, analyzing the facts
and reaching for certain conclusions, which can be in the form of either solution towards a problem.

Research design
A research design is the arrangement of conditions for collection and analysis of data in
a manner that aims to combine relevance to the research purpose with economy in procedure. The
research design used in my study is basically descriptive in nature.
Types of research
Exploratory research
Descriptive research
Causal research
Applied research
Basic research
Exploratory research
Exploratory studies are conducted to clarify the ambiguous problems.
Ambiguity means that the nature of problem to be solved is unclear.
Descriptive research
The research design in my study is descriptive. Its studies are concern with describing
the characteristics of a particular group or individual. Studies concerned with specific prediction
with narration of facts and characteristics concerning individual, group or situations are examples of
descriptive research .it is also known as social research.
Causal research
The mean purpose of causal research is to identify the cause and effect relationship
between variables.
Applied research

18

Applied research is conducted when a decision is to be made about a specific real-like

problem.
Basic research
Basic or pure research (fundamental research) attempts to expand the limits of
knowledge.
Sample Design
A sample design is a definite plan for obtaining a sample from a given population. It refers to
the technique or the procedure the researcher would adopt in selecting items for the sample i.e. the
size of the sample. Stratified sample method is adopted to select the sample.
Sample Size
It includes the number of sampling unit selected from the population for
investigation. The sample size must be optimum or adequate. If the sample size is small it may not
appropriately represent the population.
Too large sample would be costly in terms of money &time. The optimum sampling size would
fulfill the requirements of efficiency, representativeness, reliability, and flexibility.
The sample size is taken of 100 customers. It is because of the shortage of time & their busy
schedule.
.

METHODS OF DATA COLLECTION

Data collection is an art. Sometime it is very time consuming affair. The source information
falls under two categories:
Primary Data
Secondary Data
Primary data
We collect primary data either through observation or through direct communication with
respondents in one form or other personal interviews.
19

 Observation method
Interview method
Schedules & Questionnaire method
Internet
Advantages
Simplicity
Direct and realistic study
Useful for formulating
Greater accuracy
Results are more dependable
Disadvantages
Not possible to remain present
Not possible because a schedule events may not take place
Not possible on account of the long duration
Secondary Data
The secondary data means data that are already available in various reports, diaries,
letters, books, etc.
Life history, diaries, autobiographies, letters and testaments.
Reports published by various Research Organizations.
Advantages
More flexible
It is perfect sample of the general population
Controlled which person will answer the question
Disadvantages
Uneconomical
20

 Emotionalism
Personal bias
A questionnaire is simply a formalized set of questions for eliciting information. The method used
in this project is closed ended questionnaire in which respondent is not free to choose the response
demand appropriate.
Sampling Method
Stratified method of sampling was used for face-to-face survey while snowball
sampling method was used while conducting telephonic survey.

LIMITATIONS OF THE STUDY

Estimates are used as basis for budget plan and estimates are based on available facts and best
managerial judgment

Budgetary control cannot reduce the managerial function to a formula. It is only a managerial

Tool which increase effectiveness of managerial control

The use of budget may lead to restricted use of resources.

Efforts may therefore not be made to exceed the performance beyond the budgeted targets.

Frequent changes may be called for in budgets due to fast changing industrial climate.

In order that a system may be successful, adequate budget education should be imparted at
least through the formative period. Sufficient training programs should be arranged to make
employees gibe positive response to budgetary activities.

The study is the limited up to the date and information provided by Omaxe Limited Limited
and its annual reports

21

CHAPTER 4
COMPANY PROFILE

22

Has Glorious Past and

Great future

INTRODUCTION OF OMAXE
The company was originally set up as OMAXE Builders Private limited in 1989, promoted by
SHRI. ROHTASH GOEL, the founder, to undertake construction & contracting business. The
company further changed its constitution to a limited company known as OMAXE Construction
Ltd., in 1999. The name of the company has now changed to OMAXE LTD from 2006. The
company began life as a civil construction and contracting company, has successfully executed
more than 120 prestigious Industrial, Institutional, Commercial, Residential and Hospital
construction projects.
The company entered the Real Estate Development business in 2001 and in now amongst the
large Real Estate Development companies in India. The company has executed construction
contracts for a number of prestigious Indian private, public sector and Multinational's clients.
OMAXE was founded by SHRI. ROHTASH GOEL , a first generation entrepreneur, a civil
engineer by qualification and a visionary having more than two decades of experience in
Construction and Real Estate Development. Mr. GOEL, as the Chairman & Managing Director of
OMAXE has been at the forefront, a man with a mission of building globally comparable quality
Residential & Commercial projects, his motto Turning Dreams Into Reality

23

OMAXE MANAGEMENT

CMD

: Mr. Rohtash Goel

JMD

: Mr. Sunil Goel

Director

: Mr. J. B. Goel

CEO

: Mr. Mohit Goel

Director Coordination & Audit

: Mr. Bhupendra

Chief Advisor Legal

: Mr. Madan Mohan

Director Construction

: Mr. Rajeev Goel

Director - Planning & Finishing

: Mr. Praveen Goel

Director - Business Development

: Mr. Dalip Moudgil

& Liaisoning

24

THE OMAXE LOGO

The

OMAXE is a strong,

contemporary and confident symbol for a brand that is always ahead of the rest. It is
specially drawn word mark.
Surety of quality by INTERNATIONAL ORGANIZATION for STANDARDS.

LOGO OF REGISTRATION
THE OMAXE IMAGE STYLE
It incorporates one solid, sky- blue rectangular with a square close door
form assures to turn the dreams into reality.

25

MEANING OF THE TITLE

The title can be broken into two parts- OM+ AXE = OMAXE.

OM: It is the name of God, according to our Grunth all the 36 core live in OM.

AXE: It is the weapon of the construction and the past time the company was in
construction.

The beginnings
Incorporated as Omaxe Builders Private Limited in 1989, to undertake construction & contracting
business, the company changed its constitution to a limited company known as Omaxe
Construction Ltd., in 1999. The name of the company has now changed to Omaxe Ltd in 2006.

26

Omaxe was founded by Shri Rohtash Goel, a first generation entrepreneur, a civil engineer by
qualification and a visionary. With over two decades of experience in construction and real estate
development, Rohtash Goel, as Chairman & Managing Director of Omaxe Ltd., has been at the
forefront of the real estate industry, following its motto Turning Dreams into Reality through
building world class residential and commercial projects.
As a civil construction and contracting company, Omaxe successfully executed more than one
hundred and twenty industrial, institutional, commercial and residential projects for a number of
prestigious Indian private, public sector and Multinational's clients such as Amity University, LG,
Pepsi, Samsung, Wave Cinemas, National Brain Research Centre, P.G.I. M.E.R, Apollo Hospitals
and Delhi High Court.
To capture the opportunities offered by the growing real estate market in India, Omaxe entered the
real estate development business in 2001.

27

Today and Tomorrow

In the span of a few years, Omaxe Ltd. has experienced exponential growth and success, crowned
by its landmark IPO oversubscribed by 68 times in 2007, and is now amongst the largest publiclisted real estate development companies in India.
By the end of 2007, the company has completed and delivered eleven projects consisting of eight
residential, one integrated township and two commercial, covering 5.6 million sq. ft of area. The
Forest, The Nile, NRI HEIGHTS, Omaxe Connaught Place, Wedding Mall, House 2 Home,
Omaxe Plaza, Omaxe Arcade, Park Plaza, Pearls Omaxe, Omaxe Jasola, Omaxe Novelty Mall,
Omaxe Terminal Mall and Omaxe Mall - Ludhiana are some of the milestone projects of the
company.
The company currently has fifty four projects under development, including hotels: twenty three
group housing projects, sixteen integrated townships, fourteen shopping malls and commercial
complexes. These fifty four projects cover a total of over 156 million sq ft of area and are located
in 31 towns in 10 states in northern, central and southern India. In addition to these, Omaxe is
developing a Special Economic Zone on 12, 500 acres in Alwar Rajasthan.
Omaxe is also spreading its wings off shores and has acquired land in Dubai through a wholly
owned subsidiary. To undertake such expansion, Omaxe Ltd. today, is backed by a professional
and competent Team Omaxe: a constantly growing workforce of currently over twelve hundred
professionals, including four hundred highly-qualified engineers, architects, Chartered
Accountants, MBAs, etc. With high standards in line with Mr. Goels vision and ambitions, Team
Omaxe makes Omaxe Ltd. a strong, structured and high-growth ISO-certified company with a
bright future. Taking forward our vision to provide an environment of professionalism,
competence, teamwork and service excellence, Omaxe is working towards benchmarking our HR
policies with the best employers and international standards. Thanks to its strong experience in
construction, Omaxes uniqueness also lies in the fact that the company doesn't give its projects
on sub contract: while assuring timely completion, this also allows keeping pace with the progress
in construction technology, helping to give clients value for money.

28

Today, OMAXE enjoys a reputation of being one of India's leading real estate developers with an
indelible focus on customer satisfaction. Omaxe has adopted quality system standards that
integrate technological and design innovations with a strong technical base to provide state-ofthe-art real estate options.
Omaxe has also been the first to

offer Penalty Clause,

introduce Sample Flats concept,

offer Theme Malls, like the Wedding Mall, House 2 Home Mall, etc.,

offer ready-to-move-in homes.

Besides this, Omaxe is the first to have created and implemented the concept of Eco Friendly
HEIGHTS, integrating Environment Protection Measures in all projects, with a defined
implementation process.
For Omaxe, environment protection and innovative architecture and practices are the standards of
today and tomorrows in real estate development
Presence
Today OMAXE one of Indias fastest growing Real Estate Developer, has registered its
presence across the country with a healthy mix of projects that range from well- planned office
space, international- standard integrated Township, Group Housing, State- of the art
Commercial Shopping Malls, Multiplexes, Theme Malls, Resorts, Hotels Serviced Apartments,
Bio-Tech Parks, SEZs, etc.
Footprints in New Delhi, Noida. Greater noida, Gurgaon, Faridabad, Ghazi bad, Ludhiana,
Amritsar, Patiala, Derabassi, Baddi, Sonepat, Rothak, Bahadurgarh, Palwal, Faridabad,
Vrindavan, Jaipur, Alwar, Bhiwadi, Indoor, Raipur, Rudrapur, Lucknow, Agra, Rajpur,
Kishangarh, Mohali, Yamuna Nagar, Vrindavan, Vizag, Hyderabad, Jabalpur.

29

Perception
OMAXE enjoys a reputation of being one of Indias premier Real Estate Developers
with an indelible focus on customer satisfaction. This feet has been achieved through the adoption
of quality system standards that integrate technological and design innovation with a strong
technical base to provide state of the art real estate options.

1st to offer penalty clause.

1st to introduce sample flats

1st to offer Theme Malls like The Wedding Mall

Presence of environment protection measures with a defined implementation process.

ERP in advanced stage of implementation

1st to come up and implement the concept of ECO friendly city.

1st to offer Ready-to-move-in homes

People
At OMAXE, the human mind and spirit continue to be our most precious resource and a
critical ingredient in the spectacular success of our endeavors. Today, OMAXE boasts of over
1100 qualified men and women who are successfully turning their dreams, and the dreams of
millions, into reality.
Performance
Having registered a phenomenal start based on the successful acquisition and
implementation of a large number of highly challenging and hugely varied projects, all in a short
span of under two decades, OMAXE today enjoys the reputation of being one of Indias fastest
growing Real Estate Developer. A reputation that fuels it to realize more ambitious dreams in its
relentless quest to become the single most trusted brand in the Real Estate Industry.

30

Vision

Create a progressive organization matching international standard maintaining integrity, high

ethical standard and transparency.

Create an environment of professional, competence, teamwork, and service excellence

Deliver projects conforming to international Environment Impact Assessment (EIA) norms

Use modern cost effective techniques for quality construction resulting in wealth creation.
Mission

Commitments towards quality, integrity and the creation of value for all stakeholder/customers.

Implement best business practices which exceed customer expectations.

Establish industry standards and benchmarks.

Deliver quality residential &commercial projects comparable with Global Developers

Lead the industry using high caliber and efficient team of people with advanced technology.

OMAXE FINANCIALS
NET WORTH OVER THE YEARS

31

Particulars
Revenue
Profit
Before Tax
Profit After
Tax
Net Worth

2010-11

2009-10

2008-09

2007-08

2006-07

23,077.56

14,399.24

8,304.08

4.490.53

2,439.35

6,161.93

3,229.08

1,606.87

217.85

101.24

4,948.76

2,439.61

1,281.94

129.45

63.58

14,132.61

4,333.17

2,149.75

516.05

419.12

32

33

PROJECTS

RESIDENTIAL

COMMERCIAL
RESIDENTIAL
Projects in INDIA are in the following states:

ANDHRA PRADESH

CHHATTISGARH

DELHI-NCR

HARYANA

HIMACHAL PRADESH

MADHYA PRADESH

PUNJAB

RAJASTHAN

UTTAR PRADESH
34

UTTARANCHAL

COMMERCIAL
Location for commercial projects:

DELHI

HARYANA

MADHYA PRADESH

PUNJAB

UTTAR PRADESH

Vision
To be the most progressive name in the REAL ESTATE INDUSTRY, providing quality,
professionalism and value to customer at par with international standards, based on professional,
ethical and moral values.
Mission
Our mission is to bring homes of international standard within the reach of every individual. We are
committed to achieve and sustain excellence in the field of real estate, for the benefit of the nation
and our beloved country men.
Project Location

35

Omaxe New Heights Faridabad Sector 78 Apartment, Omaxe New Heights Sector 78 Apartment,
Omaxe New Heights, Omaxe New Heights Faridabad DELHI-AGRA highway, makes it an ideal
location to make such a dream into a concrete reality.

Provision for

Commercial complex

Dispensary/nursing home

High school

Nursery schools

A ROYAL RETREAT

Childrens play facilities

Integrated landscape including theme parks.

Wide roads with planted pathways & jogging track.

Features of this project

Essential services within the township: banks, postal service, taxi stand, grocery store, etc.

Underground cables for telephone, electric HEIGHTS distribution, storm water drains & sewer
system.

Efficient power distribution network.

Regulated underground/ overhead water supply

Professionally managed housekeeping

Children's play area.

Integrated landscaping including theme parks, water bodies & water features.
36

Wide roads with planted pathways & jogging track.

Environment-friendly waste disposal.

Restaurant and banquet hall

Located within greenbelt

Rainwater harvesting for replenishing ground water.

BUDGETING AND BUDGETARY SYSTEM

IN
OMAXE LIMITED
37

ZERO BASED BUDGETING:

Zero budgeting is the latest technique of budgeting and it has increased use as a material tool. This
technique was first used in America in 1962, by the former president America, Jimmy Carter.
As the name suggests, it is starting from a "scratch, the normal technique of
Budgeting is to use previous levels as a base for preparing this year's budget. This method carries
previous years inefficiencies to the present year because we taken last year as a guide, and decide "what
is to be done this year when this much was the performance of the last year.
In the zero based budgeting every year is taken as new year and previous year is not as a base, the
budget for this year will have to be justified according to present situation, zero is taken as base and
likely future activities are decided according to present situations. In zero based budgeting a manager is
to justify why he wants to spend. The performance of spending on various activities will depend upon
their justification and priority for spending will have to be that an activity is essential and the amounts
asked for are really reasonable taking into account the volume of activity.
BUDGET AND BUDGETARY SYSTEM IN OMAXE LIMITED
The budgeting process is used in the performance budgeting for the construction of phase which
includes pre commissioning activities. Besides meeting the essential requirements of managerial control
38

the budgeting exercise also covers the long term capital budgeting, which is presented in the form of
annual plan.

OBJECTIVES OF THE BUDGETARY SYSTEM:

To prepare annual budgets in such a manner those managers at various levels in organization carry
out periodical exercise in respect of each contact or responsible centre for physical planning and
matching resources broke up into monthly targets or cash flows.
To introduce and operate responsible for achievement of specified targets with the recourses
allocated for the purpose.
To bring about effective co-ordinate of all activities of the organization and
To gear up service divisions to meet effectively the requirements of project.
BUDGET PERIOD AND PHASING:
The budget period or annual begets should with the financial year. In October every year the budget
should drawn up for the ensuring the financial year in the form of Budget estimates financial year in the
form of Revised Estimates [R.E]...In addition the budgets are to be reviewed on monthly basis by project
review teams, in the light of actual expenditure and projections in the budget period. Budget should
indicate monthly phasing of expenditure and targets for the first and quarterly phasing for the second
half of the year. At the time of review of the budget estimates to frame revised estimates the quarterly
phasing should be broken up into monthly phasing.
While drawing up the actual budget in October every year, the long term capital budget for ongoing
and new schemes should be formulated as apart of exercise as preparation of annual plan. The long term
capital budget should indicate for a period of six years following the budget period of six years
following the budget period of six years following the budget period wise annual phasing of the capital
expenditure and physical schedules recourse based network.

39

BUDGET HEADS:
For uniform accounting, it is essential that costs are collected for each of the factory though this
may involve splitting up of payments against contracts which embrace more than one system. Allocation
of the cost as system wise affords a sound basis for cost accounting, inter-firm comparisons and provides
valuable inputs to the data bank. Budget provisions are related to project estimates and monitoring of
actual expenditure where as control variables for part control and instrumentation system. Factory piping
which includes pipelines, for ash water mains, compressed air system and civil works piping.
Auxiliary pumps for water treatment plant and civil works system. If there are, any contracts not
covered in the budget heads provision for such contracts should be shown against the appropriate system
by head by adding code number.

TYPES OF BUDGETS IN OMAXE LIMITED:

According to the nature expenditure budget are classified under:
Direct capital outlay on works
Technical consultancy
incidental construction during construction
Employee cost
Other establishment expenses:
Training and recruitment
Preliminary expenses
misc.brought-out assets
cash budget
Township budget

40

BRIEF EXPLANATION TO THE NATURE OF EXPENDITURE INCLUDED IN EACH

BUDGET IS INDICATED BELOW:
Incidental expenditure during construction personal payment:
These comprises of salary,wages,allowance,contribution of PF and other funds and other
expenses such as LIC,medical reimbursement, canteen subsidy etc. any provision of areas of salary
D.A.

Office and other expenses:

Expenses incidental to construction and capital works not traceable directly to incidental
expenditure, during contribution equipments, vehicle running expense, office rent.LC and cost of
drawings, travelling expenses, printing and stationary, communication expenses, advertisement for
tenders etc. are major items in the category.
Training recruitment & other deferred revenue expenditure:
The first part of the budget consists of expenses for training executives, and non executive trainees,
rent for training halls and expenses for management development courses. The second part consists of
expenses for recruitment such as advertisement for recruitment, interview expenses, T.A. candidate etc.
the third part combines preliminary expenses including registration fees and research ad development
expenses.
Miscellaneous bought out passes:
Vehicles, furniture and fixtures equipments, hospital and medical equipment. Miscellaneous
assesses township figure in the budget.
REVIEW OF PROJECT BUDGET:

41

Monthly review:
At monthly intervals the budget should be reviewed by project review committee [PRC]. Project
budget should report actual expenditure against budget heads. Work heads and corporate budget by the
7th of month following the report month. The monthly review should be examined by project review
team[PRC],who should record variations for any variations and proposed for expending works in the
minutes of the meetings reasons for any variations in the case of budget heads exceeding 10% of the
budget estimates revised estimates or which ever is Rs.5 lakhs should be analyzed and report upon.
Quarterly review:
PRT should conduct a quarterly budgets review with a view to projecting anticipated expenditure during
the year against approved budget estimates/revised estimates. As time is essence of such review, only a
quick review of anticipated expenditure for individual budget heads involving provisions exceeding
Rs.50 lakhs in each case should be made and reported in minutes to PRT. For this purpose, project
budget should furnish all the relevant data to project manager [project] and planning and system by the
10th, of the month following the quarter project budget committee should review the actual expenditure
and assess anticipated expenditure contract co-ordination/engineers in charge. The assessments of
anticipated expenditure should be furnished by the project budget committee to General Manager
[project] by the 30th of the month following the quarter under review.
BUDGET OF SERVICE DIVISION CORPORATE BUDGETS:
A review of budgets of service and corporate divisions should be conducted at quarterly intervals
by corporate budget committee[CS'C].For this purpose corporate accounts should report actual
expenditure up to the need of the quarter by the 10th of the month following quarter to corporate budget
and budget-coordination of the remaining period of the year should be sent to the corporate budget
should put up a consolidated report division wise and project wise to corporate budget committee[CBC]
by the 15th of the may, August, November and February every year.

42

OBJECTIVES OF THE CURRENT BUDGETARY CONTROL SYSTEM IN

OMAXE LIMITED:
The current budgetary control system-operating phase has been compiled to achieve the following
objectives.
To control actual performance with reference to standards/norms adapted in the budget
ascertain the deviations analyze and establish the reasons.
To identify constraints in generation and timely action for estimation constraints.
To monitor the generation of internal recourses so as to ensure the availability of
adequate funds.
To prepare the revenue budget so as to forecasting the periodical profitability of the
organization.
To develop standards/norms of performance in the various areas of operation and
maintenance based on the experience.
To ensure effective coordinate planning of all activities so that all the inputs and services
necessary for achieving the physical targets are available at appropriate time.
To create cost consciousness among the managers responsible for decision making
To provide data regarding operational norms and cost for the purpose of formulating
tariff.
To provide data basis for assessment of working capital requirements
To control the working capital particularly book debts spares and other items inventory.
43

 To improve profitability and internal resources generation.

SCOPE OF THE PERFORMANCE BUDGET:

The budget for operation and maintenance activities will be called performance budget operation.
This in effect means that all financial targets in the budget will be based on performance targets in
physical terms.
The current budgetary control system operation pays envisages generation and transmission line
projects as independents investment centres. It becomes applicable to a project in the year in which it
plans to commercialize its first generation unit. How ever, the budget infer expenses from the date of
synchronization to the date of commercial generation is to be taken case of in the capital budget of the
respective project similarly in the case of transmission line projects the system becomes applicable from
the year in which it plans to commissions its first line along with substation or the date commercial
generation of the first unit of generative project with which this line is associated, which ever is later.
For subsequent lines, the O&M will be prepared from the case generation of energisation.
The system investigates the preparation of operation and maintenance budget for each of the cost
centers as per the requirements of coasting systems.
The performance budget operation will consists of following budgets along with the supporting
schedules:
1. Budget balance sheet.
2. Budget profit and loss account.
3. Revenue budget.

In addition, separate budgets for revenue activities other than operation for research and
development consultancy contracts etc.
44

The expenses respect of developmental expenditure for improvements additions replacement,

renewals, balancing facilities etc. arc of capital nature and will be budgeted for in the construction
budget of budgetary control system-construction pairs.
To facilitate management control the system also investigates, phasing of these budgets into
monthly targets. The actual performance then will be reasons for variation s will be analyzed and
established for taking corrective remedial actions.

STAGES IN THE FORMULATION OF PERFORMANCE BUDGET:

The system provides for a two stages formulation for performance budget operation the stages are
given below:
Initial proposal:
In the initial proposal the project is required to indicate yearly targets. In the addition to
furnishing basic information like synchronization and commercial generation dates.
Constraints and coal operation at less than the designed specification calorific value of raw material
and limestone, material consumptions. In physical terms for items whose consumption value in Rs.5
lakhs or more planned shutdown for a maintenance and overhauling and norms for serious operating
parameters provided for designs specifications and in the tariff agreements to the corporate budget
committee.
In the initial proposals is planned to be submitted after considering else factors and keeping in view
the perspective plan of the organization, as well as norms for various operating parameters. These targets
and terms are then communicated to all stations and transmissions line offices of the last week of July to
be used for formulating detailed budget in the final proposal.
45

Final proposal:
Budgeted balance sheet. Budgeted profit and loss account and budgets in the form of cash
budget along with the final proposal will consist of detailed supporting schedules for each of the
investment centre/cost centre. This final proposal needs to be submitted to corporate centre with in three
weeks of receiving approval for initial proposal.
The final proposal, after approval by board, will become the basis of monitoring performance
for cost centers and investment centers.
The frequency and extent review and monitoring will be done is under:
1. The monitoring of actual performance against budgeted target for investment center/profit
center on monthly basis and for cost centers on quarterly for remedial/corrective action.
2. The review of performance budget on quarterly basis to assess the anticipated profitability.
The first step in the preparation of performance budget, O&M is formulation of maintenance
and overhauling schedules for boiler and TO with generation, then considering the grid demand, the
availability or inputs and factory problems, if any the utilization of capacity will be worked out on
month-month basis for the budget period the gross generation targets can be worked and accordingly.
NET GENERATION:
The sales value will be determined from quantum of net generation [i.e., grass generation
aux. consumption].
AUXILLARY CONSUMPTION/CONSUMPTION BY UTILITIES:
The cement consumption by each of the cost centers for individual unit auxiliaries, station
auxiliaries as well as transformer losses are to be estimated separately based on designed specification
and added in order to work out total auxiliary consumption rather than fixing overall percentage
similarly consumption by utilities will also need to be indicated by concerned cost centers like township
46

and construction department this will be valued at cost net generation to arrive at the sales values for
owns consumption.
CHEMICAL CONSUMPTION:

The chemicals are used by many cost centers by many cost centers for treatment of water. The
consumption of chemicals will be co-related with volume of water certain norms will have to be
developed for different type of chemicals and different type of treatments.
Based on these norms each of the cost centers will indicate consumptions of chemicals in
quantitative as well as financial terms the most centre wise requirement will be consolidated to arrive at
total chemicals consumption to be charged to profit and loss account.
EMPLOYEE COST:
The basis of employee cost will be the approved manpower budget effective of respective years of
budget period. The estimation of employee cost is to be done for each grade considering mid-point as
the scale as basis pay and after reading various allowances like "D.A., H.R.A., C.C.A" project allowance
etc. admissible in respective grades. This is to be worked 49 out or each of the budget periods based on
existing strength (at the time of estimation) in each grade and additions during each quarter (taking 70%
satisfaction for additions).
The provisions of LTC medical reimbursement, PF and other welfare expenses in previous years
are taken into account policies changes, if any the details of welfare expenses like liveries and uniforms,
safety expenses, accident compensation, games & sports, canteen subsidy etc. are to list out as per chart
of account the provisions for incentive, bonus and payments of one time nature are to be shown
separately based on total employee cost for executives, supervisors and non-supervisors and total man
power in these categories ,separates of cost per employee will be worked out for each of theses
categories as under.
1. Salaries and allowance
2. Contribution of PF and other funds

47

3. Welfare expenses
The cost centre of employee cost will be worked out based on these rates separately for theses
executives, supervisors and non-supervisors. This will again be consolidated separately for operations,
maintenance and common [service] function. The employee cost of common functions will be
appropriated between construction and O&M budgets in ratio of capital expenditure and sales during
respective years.

REPAIRS & MAINTAINENCE:

In line, with costing system following three activities can represent major classification of
repairs and maintenance.
1. Major overhaul
2. Preventive maintenance
3. Breakdown maintenance
Normally, budgeting will be done for the former two; under each activity separate estimates will
be prepared for consumption of materials and maintenance jobs. This estimation will be done at ach of
sub cost centre wise details are required to be mentioned.
The consumption material for repairs and maintenance will be classified into spares, lubricant
loose tools and plants, consumables and others. The cost centre totals separately for three activities will
be added to arrive at summary of material consumption and maintenance jobs, which will be reflected in
the profile & loss account.
The material consumption, especially of spares, can be estimated based on the expected life of
various components/spares in the installed equipment the frequency of breakdowns in the past and the
requirement for preventive maintenance and major overhauls. The actual life of components may be
different from that indicated in the manufacturer's specification. Therefore, it is very difficult to estimate
48

requirements of spares. But this estimation will become gradually accurate as more experience is gained.
For new stations it will be advisable to collect such information from old stations that have gained
experience in this field.
Normally, maintenance of equipment through contractors should be avoided. But in certain areas,
if the expertise and in house capability or sufficient man power is not available, maintenance jobs can
be got done through contractors. Such contracts will need to be listed out separately .If owner supply
items are covered in such contracts the cost of theses items will be included in the material cost.

FACTORY & GENERAL OVERHEADS:

All the items of an expenditures under this head will be estimated based on past trend with due
adjustment for policy changes. The estimates will be given by cost centre needs for items identified with
respective cost centers. The total administrative cost of service cost centers will be allocated between
construction and O&M in the ratio of capital expenditure and sales during respective years.

Depreciation:
This is to be charged as per ES act from the year following the year in which assets have been
capitalized value and, rates of depreciation furnished by the site finance and account for different
categories of assets. Cost centre-wise depreciation will be added to arrive at total deprecation for the
investment centre.

Interest on fixed capital:

As per existing accounting policy, the interest is to be charged to profit & loss account based on
the loan content in the capitalized assets restricted to total accrued interests on actual loans.

49

For budgeting purposes, interest will be worked on equated loan content or equated loan
which ever is less.

CHAPTER-5
DATA ANALYSIS AND INTERPRETATION
50

OMAXE Limited Revenue Budget (2008-09)

Table-I
S.no

Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

Variance

Crores)
Sales
1

Fixed and recovery

689

599

90

Variable cost recovery

745

652

93

Fuel price adjustment recovery

784

823

-39

Own consumption

116

128

-12

Total of (14)

2334

2202

132

Average intensives

98

91

Other income

51

43

Grand total(5+6+7)

2483

2336

147

Interpretation:

51

The data pertaining to the generation and consumption of cement at OMAXE Limited have been
obtained from the year 2008-09 and presented in Table-1.The aspect included are total generation of
cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and line store
respectively.
During the year 2008-09 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales decreased by 132 crores to the estimated budget.
During the year 2008-09 the average intensives are decreased by 7 crores., there income also
decreased by 8 crores respectively.
Finally, with regard to the result in revenue budget of Omaxe Limited, totally decreased by 147
crores in the year 2008-09 respectively.

OMAXE Limited Operational expenditure budget for the year 2008-09

Table-II
S.no

Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

Variance

Crores)
Variable cost
1

Raw material

400

423

23

Lime stone

430

450

20

Total of (1,2)

830

873

43

Operative
maintained
4

cost
Chemicals and

120

140

20

water
Repairs &

240

275

35

290

335

45

maintenance
6

Employee cost

52

Stationary &

55

70

15

10
8

12
10

2
2

723

842

119

11

charges
Deprecation

38

11

-27

12

Interest on

18

20

13

fixed capital
Totalof-3
Gland total

31
1746

-25
137

general
expenses
Rebate
Share of

8
9

operating
expenses
Total of(4..9)

10

Finance

56
1609

(3+10+13)

Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of Omaxe Limited
in the year 2008-09.
In the year 2008-09 variable cost components, Raw material consumption 23 crores
increased and the lime stone consumption 20 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair & maintenance,
employee cost, stationary & general expenses rebate and share of other expenses in all are fluctuating
expenses of the year 2008-09.how ever the total operating maintenance costs are 119 crores increasing
respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance
Charges recording decreasing 25 crores in the year 2008-09 respectively.
53

OMAXE Limited Revenue Budget (2009-10)

Table-I
S.no Particulars

Budget

Actual Amount(Rs.

Estimated

Crores)

variance

Amount(Rs.
Crores)
1

Sales
Fixed and

689

617

72

recovery
Variable cost

829

735

94

recovery
Fuel price

815

856

-41

adjustment
4

recovery
Own

110

132

-22

consumption
Total of

2443

2340

103

(14)
Average

93

86

intensives
Other income

49

38

11

Grand

2585

2464

121

total(5+6+7)

Interpretation:
54

The data pertaining to the generation and consumption of cement at OMAXE Limited have been
obtained

from the year 2009-10 and presented in Table-1.The aspect included are total generation of

cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and line store
respectively.
During the year 2009-10 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales consumption is deceased by 103 crores respectively.
During the year 2009-10 the average intensives are decreased by 7 crores and there income also
decreased 11 crores respectively.
Finally, with regard to the result in revenue budget of Omaxe Limited, totally decreased by 121
crores in the year 2009-10 respectively.

OMAXE Limited Operational expenditure budget for the year 2009-10

Table-II
S.no

Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

variance

Crores)
Variable cost
1

Raw material

419

449

30

Lime stone

420

465

45

Total of(1,2)
Operative maintained

839

914

75

cost
4

Chemicals and water

121

148

27

Repairs & maintenance

232

289

57

Employee cost

314

348

34

55

Stationary & general

59

77

18

expenses
8

Rebate

11

13

Share of operating

10

745

885

140

expenses
10

Total of(4..9)
Finance charges

11
12

Deprecation
Interest on fixed capital

38
18

14
20

-24
2

13

Total of(11,12)
Grand total

56
1640

34
1833

-22
193

(3+10+13)

Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of Omaxe Limited
in the year 2009-10.
In the year 2009-10 variable cost components, Raw material consumption 30 crores
increased and the lime stone consumption 45 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair &
maintainance,employee cost, stationary & general expenses rebate and share of other expenses in all
are fluctuating expenses of the year 2009-10.how ever the total operating maintenance costs are
140crores increasing respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges decreasing by 22 crores in the year 2009-10 respectively.

56

OMAXE Limited Revenue Budget (2010-11)

Table-I
s.no

Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

Variance

Crores)
1

Sales
Fixed and

721

611

110

recovery
Variable cost

815

729

86

recovery
Fuel price

810

823

-13

-10

adjustment
4

recovery
Own

121

131

5
6

consumption
Total of (14)
Average

2467
97

2294
92

173
5

7
8

intensive
Other income
Grand

53
2617

48
2434

5
183

total(5+6+7)

Interpretation:
The data pertaining to the generation and consumption of cement at OMAXE Limited have been
obtained from the year 2010-11 and presented in Table-1.The aspect included are total generation of
cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and line store
respectively.
57

During the year 2010-11 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales consumption is decreased by 173 crores respectively.
During the year 2010-11 the average intensives are decreased by 5 crores and there income also
decreased 5 crores respectively.
Finally, with regard to the result in revenue budget of Omaxe Limited, totally decreased by 183
crores in the year 2010-11 respectively.

OMAXE Limited operational expenditure budget for the year 2010-11

Table-II
S.no

Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

Variance

Crores)
Variable cost
1
2
3

Raw material
Lime stone
Total o(1,2)

418
442
860

445
465
910

27
23
50

Operative
maintained cost
4

Chemicals and

128

150

22

water
Repairs &

265

296

31

maintenance
6

Employee cost

316

348

32

Stationary &

63

80

17

11
7

13
10

2
3

general expenses
8
9

Rebate
Share of
operating

58

expenses
10

Total of(49)
Finance charges

790

897

107

11

Deprecation

41

15

-26

12

Interest on fixed

17

19

13

capital
Total of(11,12)

58

34

-24

1841

133

Grand total

1708

(3+10+13)

Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of Omaxe Limited
in the year 2010-11.
In the year 2010-11 variable cost components, Raw material consumption 27 crores
increased and the lime stone consumption 23 crores also increased.
In operating & maintain aces cost components, chemicals & water, repair & maintenance,
employee cost, stationary & general expenses rebate and share of other expenses in all are
fluctuating expenses of the year 2010-11.how ever the total operating maintenance costs are
increasing by 107 crores respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges recording decreasing by 24 crores in the year 2010-11 respectively.
Finally with regard to the operational expenditure budget of Omaxe Limited the total profit
has increased by 133 crores during the year 2010-11.
The overall budget results of Omaxe Limited is industries limited is earning more profits.

59

Omaxe Limited Revenue Budget (2011-12)

Table-I

S.no Particulars

Budget

Actual

Estimated

Amount(Rs.

Amount(Rs.

Crores)

Variance

Crores)
1

Sales
Fixed and

724

618

106

recovery
Variable cost

840

740

100

recovery
Fuel price

820

863

-43

4
5
6

recovery
Own consumption
Total of (14)
Average

132
2516
102

148
2369
98

-16
147
4

7
8

intensives
Other income
Grand

56
2674

49
2516

7
158

adjustment

total(5+6+7)

Interpretation:
The data pertaining to the generation and consumption of cement at OMAXE Limited have been
obtained from the year 2011-12 and presented in Table-1.The aspect included are total generation of
cement in (cores Rs) and utilization for auxiliary consumption, raw material consumption and line store
respectively.
During the year 2011-12 the sales, fixed cost, variable cost, fuel price, consumption was
decreased. Sales consumption is decreased by 147 crores respectively.

60

During the year 2011-12 the average intensives are decreased by 4 crores and, their income also
decreased 7 crores respectively.
Finally, with regard to the result in revenue budget of Omaxe Limited, totally decreased by 158
crores in the year 2011-12 respectively

Table showing operating expenditure of for the year 2011-2012

Table-II
Particulars
S.no

Budget

Actual amount

Estimated amount

(RS. Crores)

Variance

(Rs. Crores)
1
2
3
4
5
6
7
8
9
10
11
12
13

Variable cost
Raw material
Lime stone
Total of (1,2)
Operative maintained cost
Chemicals and water
Repairs & maintenance
Employee cost
Stationary & general expenses
Rebate
Share of operating expenses
Total of(4...9)
Finance charges
Deprecation
Interest on fixed capital
Total of(11,12)
Grand total (3+10+13)

420
450
870

450
470
920

30
20
50

130
280
320
65
11
8
814

150
300
350
80
13
10
903

20
20
30
15
2
2
89

42
18
60
1744

15
20
35
1858

-27
2
-25
114

Interpretation:
Observed from the above table that the "Operational Expenditure Budget" of Omaxe Limited
in the year 2011-12.
In the year 2011-12 variable cost components, Raw material consumption 30 crores
increased and the lime stone consumption 20 crores also increased.
In operating & maintainaces cost components, chemicals & water, repair &
maintainance,employee cost, stationary & general expenses rebate and share of other expenses in all
61

are fluctuating expenses of the year 2011-12.how ever the total operating maintenance costs are 89
crores increasing respectively.
In finance charges depreciation and interest on fixed capital, has been included, the total
finance charges recording decreasing by 25 crores in the year 2011-12 respectively
finally with regard to the operational expenditure budget of Omaxe Limited the total profit has
increased by 114 crores during the year 2011-12.
The overall budget results of Omaxe Limited is industries limited is earning more profits.

62

CHAPTER-6
CHARTS

63

SALES
Table showing total sales of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

2334

2443

2467

2516

ACT

2202

2340

2294

2369

Figure showing on sale of Omaxe Limited

Interpretation

In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is
accurate. In the 2008-09 it shows a slight change between budgeted amount and actual. In the year 201112 budgeted amount is more compared to actual. It shows that the quantity is more comparing to market.
Selling of cement product less than the estimates.

64

AVERAGE INTENSIVES
Table shown on average intensives of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

98

93

97

102

ACT

91

86

92

98

Figure showing on Average Intensicves of OMAXE LIMITED

Interpretation
In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is accurate. In
the 2008-09 it shows a slight change between budgeted amount and actual. In the year 2011-12 budgeted
amount is more compared to actual. It shows that the quantity is more comparing to market. Selling of
cement product less than the estimates.

65

OTHER INCOME
Table shown on other income of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

51

49

53

56

ACT

43

38

48

49

Figure showing on other income of Omaxe Limited

Interpretation
In the year 2008-09 the actual amount is less compared to budgeted amount as the budget is accurate. In
the 2008-09 it shows a slight change between budgeted amount and actual. In the year 2011-12 budgeted
amount is more compared to actual. It shows that the quantity is more comparing to market. Selling of
cement product less than the estimates.

66

VARIABLE COST

Table showing on variable cost of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

830

839

860

870

ACT

873

914

910

920

Figure showing on variable cost of Omaxe Limited

Interpretation

FORM above table it can be under that the estimated amount and actual amount of OMAXE was
recorded at raw materiel 830 during the year 2008-2009 it is increased to actual raw material 873 in the
year 2008-2009. It shows that there is an increased in budget to the actual. The highest amount in budget
was recorded in year 2011-2012..

67

OPERATIVE MAINTAINED COST

Table showing on operative maintained cost of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

723

745

790

814

ACT

842

885

897

903

Figure showing on operative maintained cost of Omaxe Limited

Interpretation:

1. Form the above table it can be understood that the budget of Omaxe Limited cement was
recorded the

estimated value 723 during the year 2008-2009 and it is decreased to 842 during the

year 2008-2009.
2. It shows that there is on decreased in the budgetary to the actual 2011-12.
3. The lowest investment in budgetary was recorded in year 2011-12.

68

FINANCE CHARGES

Table showing on finance charges of Omaxe Limited

2008-09

2009-10

2010-11

2011-12

BE

56

56

58

60

ACT

31

34

34

35

Figure showing on finance charges of Omaxe Limited

Interpretation:
1. Form the above table it can be understood that the budgetary of Omaxe Limited cement was recorded
at

56 value of estimation during the year 2008-2009.and it decreased to 31 of actual value in during

year 2008-2009.
2. It shows that there is increase in the budgetary the lower value in the 2008-2009.
3. The lowest investment in budgetary was recorded in year 2011-2012.

69

CHAPTER 7
FINDINGS

70

FINDINGS
There is a huge increase in INCOME of the company in 2011-2012, compared to 2010-2011.
Huge increase in earnings per share in 2011-2012, when compared to 2010-2011.
In the year 2007-08, 2010-11 and 2011-12 represents actual are less than budgeted so less
purchases made in every department. In the year 2008-09and 2009-10 actual is more than
budgeted it shows that greater importance given to purchases.
In the year 2006-07 civil expenses are at a very high range. Accruals are high compared to
budget because of construction of cold storage sector, cement plant and bore wells. In the year
2007-08 actual are less compared to budgeted because as the expenses are less. In the year 201112 it incurred high volume of expenses than the budgeted because it incurred heavy expenses.
In the year 2011-12 budgeted amount is more compared to actual. It shows that the quantity is
more compared to market. Selling of cement products, less than the estimates.
In the year 2011-2012 sales and income increased EXPENDITURE of finished goods,
manufacturing selling, and administration expenses are also increased, deprecation, less transfer
from capital, rescue of assets is decreased.

71

CHAPTER-8
SUGGESTIONS & CONCLUSIONS

72

SUGGESTIONS
Planning has become the primary function of management most of the planning relates to
individual situations and individual proposals. Budgets are nothing but expressions largely in
financial terms, budgetary control has, therefore become and essential tool of management for
controlling and maximizing profits.
a. Continuous comparison of actual performance with budgeted performance.
b. The company has to maintain super quick assets in order to maintain sound liquidity.
c. A company has to recollect their own standing amount from the debtors regularly.
d. The company has to maintain funds for long-term investment.
e. The company has to monitory from liability position in regular intervals.
f. The company must be conscious about their working capital position.
g. Company is maintaining the inventories a part from current assets for the entire study period.
To show that excessive inventory level are not good for any organization and any company.
Since the company has it concentrate much more on inventory maintain.
h.

During study period there is negative working capital levels for the company so the
company must maintained enough current assets to keep working capital, figure positively.

73

CONCLUSIONS

a. Every organization has predetermined set of objectives and goals, but reaching their objectives
and goals by proper planning and executing of these plans economically.
b. The Omaxe Limited objectives of planning and organizing promoting an integrated development
of Cement Company.
c. The corporation machine of Omaxe Limited cement industries is to make available and quickly
cement in increasingly small quantities, the company will spear head the process of accelerated
development of cement sector by expeditiously.
d. The organization needs the capable personalities as management makes the plans and implement
of these plans are expressed in terms of budget and budgetary control.
e. The Omaxe Limited has budget process in two stages. one is the capital expenditure budget and
another is operating maintenance budget, the capital expenditure budget shows the list of capital
projects selected for investment along with their estimated costs, operating maintenance budgets,
the medical budgets are rarely used in the organization like long term budgets, search &
development budget for consultancy.
f. The Omaxe Limited cement industries is to make efficient utilization of its resources and
implementation of sophisticated technology to produce available and quality cement and also
creating ambience of collective working of its employees.

74

CHAPTER - 9
ANNEXURES

75

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012:
Cash flow from operating

PARTICULARS

RS:

RS:

activities
Net profit before tax

3,41,78,32,892

80, 92, 92132

Depreciation

58, 30, 64,022

51, 57, 16,762

Adjustments for:

Loss/profit on food 5, 45, 85,229

5, 76, 15,772

assets sold/disable
Loss on sale of long 3, 58,952

-----

term investments
Income from
long term

4,91,46,881

2,61,37,771

investment(other
trader)
Interest paid/payable 33, 50, 30,376

32, 75, 37,771

on loans etc
Interest receivable 2, 50, 55,563

9, 05, 21,426

on loans
Provision for doubtful
Debts/deposits in 3,82,15,119

--------

add
Provision for doubtful
Debts/deposits (net)
Debt/advance/depos

-----------------5, 34, 50,070

93, 92,067
55, 44,394

its written off

Long-term

-----------

7,700

investment

written
76

off
Unrealized loss/gain on
Foreign

currency 2, 95, 96,073

19, 16,075

fluctuation
Provision for diminution
in
Value of investment

---------------

1, 10, 09232

Operating profit before

working capital changes:
Adjustment for:
Inventories
Trade and

(1,21,69,75,334)
other (50, 17, 40, 397)

receivable
Trade payables
Cash

generated

65, 61, 02,594

(24,94,24,615)
2, 92, 62,288
(20,01,35,318)

from

operations
Direct taxes/ refund (93, 49, 80,671)
Net cash from 1,98,37,48,569

(20,01,35,318)
1,10,42,01,672

operating activities

Interpretation:
Observed from the above table that cash flow statement of Omaxe Limited in the year 2011-2012. In
the year 2011-2012 variable net profit before tax, depreciation, loss/profit on food asset sold/disable,
loss on sale of long term investments, interest paid/payable on loans etc have been increased.
In operating profit before working capital changes of inventory, trade receivable and trade payables
of the year 2011-2012. However the total operating profits is increasing respectively.
In cash generated from operations the direct taxes/refund has been included, the total cash generated
from operations increase in the year 2011-2012 respectively.
Finally with regard to the cash flow statement of Omaxe Limited the total cash flow has been
increased during the year 2011-2012. The overall budget results of Omaxe Limited cement is industries
limited is earning more cash flows.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31stMARCH 2012
77

PARTICULARS
Schedule Income
Sales
Less excise duty
Net sales
Other income
Expenditure
Finished goods
Manufacturing selling
Deprecation
Rescue of assets
Schedule
Interest
Profit before taxation
Provision for
Current taxation
Provision benefit tax
Profit after taxation
Profit available for

RS
2010-2011
18,17,81,55,294
2,04,63,80,752
16,13,17,74,542
53, 74, 29,621
16,66,92,64,153

Rs
2011-2012
25,16,45,89,369
3,07,41,00,000
22,06,9660,339
49, 04, 06,410
22,58,00,66,749

7,61,14,89,922
7,40,51,67,576
59, 52, 33,509
1, 48,449,493
51, 57, 16,762
32, 75, 37,771

9,20,98,35,678
9,03,43,03,781
53, 05, 56,255
1, 21, 74,437
53, 30, 64,022
33,50,30,375

75, 00, 00,000

1, 22, 00,000
45, 70,92,132

34, 00, 00,000

1,10,00,00
2,65,68,32,892

45,70,92,132

2,65,68,32,892

13, 72, 29,954

1, 92, 46,501
--------------

-----------------------------------18, 29, 73,272

--------------5, 00, 00,000

20, 64, 70,455
25, 06, 15,677

2, 56, 62,001
30, 00, 00,000
50, 86, 35,273
2,14,81,97,619

9.99%

58.08%

appropriation
Appropriation
Proposed dividend
Tax on proposed Dividend
In tend Dividend
Tax on in tend
Dividend
General resend
Balance carried to schedule2
Earnings per share

Interpretation:
Observed from the above table that the profit and loss account of Omaxe Limited in the year 20112012 In the year 2011-2012.sales and income increased EXPENDITURE of finished goods,
manufacturing selling, and administration expenses are also increased, deprecation, less transfer from
capital, rescue of assets is decreased.

78

Profit before taxation increased from Rs.34, 00, 00,000 to 75, 00, 00,000 and profit after taxation also
increased from Rs.45, 70, 92,132 to 2,65,68,32,892 in the year 2010-2011 respectively.
Finally with regard to the profit and loss account of Omaxe Limited the total profit have been increased
the year 2011-2012. The overall budget result of Omaxe Limited cement is industries limited is earning
profits.

CHAPTER 9
79

BIBLIOGRAPHY

BIBLIOGRAPHY
1. Prasanna Chandra, Financial Management: Theory and Practice, 7/e, 2008, Tata McGraw-Hill
Education.
2. I.M.Pandey, financial management: Principles and Practice 9/e, 2005, Vikas publishing.
3. R.K Sharma Shashi K Gupta, financial management: Principal and Management, 7/e, 2002, Kalyani
Publishers.
4. Dr.S N Maheshwari: management Accounting and financial control, 6/e, 1996, sultan chand and
sons.
5. M.Y.Khan, and P.K Jain: Basic financial management, 3/e, 1982, Tata McGraw-Hill.
6.

A. W. Willsmore: business budget and budgetary control, 2/e1949, pitman&sons.

7. Edward J Mock: Financial decision making, 2/e, 1969, International Textbook.

8. Eugene F. Brigham: Financial mangament, 12/e, 2008, cengage learning.
9. 88th annual report of Omaxe Limited.
10. detailed project report of Omaxe Limited

80

WEBSITES:

www.realestateindia.com

www.indianproperty.com

www.omaxe.com

www.ecel.com

www.passionhr.com

NEWS PAPERS:
Economic times
The Hindu
Business Standard

MAGAZINES:
Business Today
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81