Budgetory Control

A
PROJECT REPORT ON
BUDGETORY CONTROL
AT
ICICI BANK
SUBMITTED BY
Mr. MOHAMMED NAYAB PASHA

H.T.NO: 280120684056
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE

AWARD OF THE DEGREE
BACHELOR OF BUSINESS ADMINISTRATION
OSMANIA UNIVERSITY,
HYDERABAD.
ST. JOSEPH’S DEGREE COLLEGE
(AFFILIATED TO OSMANIA UNIVERSITY)
ATTAPUR, HYDERABAD .
(2022-2023 )
ATTAPUR, HYDERABAD. PH. NO: 61759749
WEBSITE: www.st-josephs.in, EMAIL ID: st22109@gmail.com ph: 040-61759749
CERTIFICATE
This is to certify that Mr. MOHAMMED NAYAB PASHA is a bonafide student of BBA
III YEAR of this institution with Hall Ticket No: 2801-2068-4056 for this Academic year
2022-2023. He has submitted a project on BUDGETORY CONTROL from the
organization ICICI BANK under the supervision of Ms. SALIMA DESHMUKH.
DATE: PRINCIPAL
ATTAPUR, HYDERABAD . PH. NO: 61759749
CERTIFICATE
This is to certify that Mr. MOHAMMED NAYAB PASHA of BBA III YEAR with Hall
Ticket No: 2801-2068-4056 for the academic year 2022-2023 has completed a project on
BUDGETORY CONTROL from ICICI BANK under the supervision of Ms. SALIMA
DESHMUKH.
DATE: SIGNATURE OF THE GUIDE

ATTAPUR, HYDERABAD . PH. NO: 61759749
CERTIFICATE
This is to certify that the project is submitted by Mr. MOHAMMED NAYAB PASHA
bearing Hall Ticket No: 2801-2068-4056 of BBA III YEAR on the project BUDGETORY
CONTROL from ICICI BANK during the academic year 2022-2023
External Examiner Internal Examiner

DECLARATION
I here by state that the information related to my project on BUDGETORY

CONTROL from ICICI BANK is the primary data related to my subject and it
is part of curriculum under the Osmania university jurisdiction and it is not
submitted to any organization or institute.
Place: Hyderabad
Date:

ACKNOWLEDGEMENT
As a student of St. Joseph’s Degree College is affiliated to Osmania University. I express my

heartfelt thanks to the ICICI BANK organization for providing the necessary information
related to my project.
I also express my sincere thanks to the Sri. SIRAJUDDIN, Hon. Secretary & correspondent
of St. Joseph’s Degree College and Smt. S.JYOTHI LAKHSMI, Principal St. Joseph’s
Degree College who provided me the opportunity and complete cooperation facilities and all
the necessary infrastructure to complete my project.
Last but not the least it is my good fortune to have a dedicated faculty and guide for my
project, their whole-hearted co-operation helped in completing the project in time and
acquiring the knowledge.
2801-2068-4056
ABSTRACT
Budgetary control is a system in which income and spending are compared with a company's
budget to make sure the plans are being followed. It allows companies to adjust their
spending as necessary to make a profit. Every company has a budget, and at times, that
budget needs to be revised to account for spending and an increase or decrease in income. In
essence, budgetary control compares actual results with budgets. If discrepancies are found,
key players within a company have two choices. They can either control the spending of the
company or revise the original budgets. Budgetary control helps to coordinate and organize a
company's financial activities. The study of budgetary control is very helpful for
management of companies for control of their expenditure through a powerful instrument
that the name is budget. In fact it will provide a yardstick formeasuring and evaluating the
performance of individuals and their departments.
TABLE OF CONTENTS
CH. NO. PARTICULARS PAGE NO.
CHAPTER -1 INTRODUCTION 1-5
NEED OF THE STUDY
OBJECTIVES OF THE STUDY
RESEARCH METHODOLOGY
SCOPE OF THE STUDY
LIMITATIONS OF THE STUDY
CHAPTER -2 REVIEW OF LITERATURE 6-25
CHAPTER-3 INDUSTRY & COMPANY PROFILE 26-42
DATA ANALYSIS & INTERRETATION 43-64

CHAPTER-4
FINDINGS , SUGGESTIONS & 65-68

CHAPTER-5 CONCLUSIONS
BIBLIOGRAPHY 69
CHAPTER-I
INTRODUCTION
1
INTRODUCTION
"The establishment of budgets relating the responsibilities of executives to the

requirements of a policy, and the continuous comparison of actual with budgeted
results, either to secure by individual action the objective of that policy, or to
provide a basis for its revision".
A budget is a quantitative expression of a plan of action relating to the forthcoming

budget period.It represents a written operational plan of management for the budget
period.” A plan expressed in money. It is prepared and approved prior to the budget
period and may show income, expenditure, and the capital to be employed, may be
drawn up showing incremental effects on former budgeted or actual figures, or be
compiled by zero based budgeting”. Budget and Budgetary control. The terms budget
and budgetary control are often used interchangeable to refer to a system of
managerial control. Budgetary control implies the use of a comprehensive system of
budgeting to aid management in carrying out its functions like planning, co-ordination
and control.
According to Institute of Chartered Management Accountants (ICMA) England “A

plan qualified in monetary term prepared and approved prior to a defined period of
time usually showing planned income to be generated and or to be incurred during
that period and the capital to be employed to attain a given objective”.
BUDGETORY CONTROL:
The Chartered Institute of Management Accountants (CIMA) London defines

budgetary control as establishment budget relating to the responsibility of executives
to the requirement policy and the continuous comparison of actuals with budgeted
results either to secure individuals action the objective of policy or to provide a basic
for its revision.A budget is the monetary and quantitative expressions of business
plans and policies to be pursued in the future period of time the term budgeting is
used for preparing budgets and other procedures for planning co-ordination and
control of business enterprise. Budgetary control is the process of determining various
budgeted figures for the enterprises for the future period and then comparing the
budgeted figures with the actual performance for calculating variations, if any first of
all budgets are prepared and then actual results are recorded.
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NEED OF THE STUDY
 To know about the budget and budgetary control of “ICICI.”.
 To know about the status of a company by different financial Budgetary

policies.
 To know about the present scenario of Thermal companies Investment

estimation that are existed in the market.
 To know about the present impact of budgetary control on the Financial

position of the company.
 To know about the fast performance to based on future Estimation of the

budgetary control of the techniques.
SCOPE OF THE STUDY
The scope of the study limited to collecting the data published in the reports
of the company and opinions of the employees of the organization with reference to
the objective stated above and theoretical framework of the data. With a view to
suggest solutions to various problems relating to budget and budgetary control.
3
OBJECTIVE OF THE STUDY
 To study the existing budgetary control method and practice at

ICICI
 To analyze the budgetary system in practice in ICICI with particular reference

to their objectives and phases of organizational and re-appropriation.
 To study the budgeted estimates and accruals of the revenue expenditure and
revenue receipts.
 To study the variations of the accruals from the budgeted estimates.
 To study the working of the financial department at ICICI.
METHODOLOGY OF THE STUDY
Research is the systematic investigation of fact that seeks to establish

relationship between two types.
Primary data:
 Officers of accounts sections.
 Executives and staff of financial and accounts department.
 Meeting with concerned people.
 Personal observation.
Secondary data:
 Annual reports of ICICI. Financial management text books.
 Printed Materials.
 Journals and magazines
 News papers.
4
LIMITATIONS OF THE STUDY
 The study is purely based on the information provided by the company and the
data is collected from the reports, annual reports, and magazines of the
company.
 Estimates are used as basis for budget plan and estimates are based mostly on
available facts and best managerial judgment
 To study is restricted to ICICI. Co.
 To study is restricted to limited period of 45 day’s.
5
CHAPTER-II
REVIEW OF LITERATURE
6
INTRODUCTION TO BUDGET AND BUDGETARY CONROL
Meaning:
Budgetary control is the process of determining various actual results with
budgeted figures for the enterprise for the future period and standards set then
comparing the budgeted figures with the actual performance for calculating variances,
if any. First of all, budgets are prepared and then actual results are recorded.
The comparison of budgeted and actual figures will enable the management to
find out discrepancies and take remedial measures at a proper time. The budgetary
control is a continuous process which helps in planning and co-ordination. It provides
a method of control too. A budget is a means and budgetary control is the end-result.
Definitions:
“According to Brown and Howard, “Budgetary control is a system of
controlling costs which includes the preparation of budgets, coordinating the
departments and establishing responsibilities, comparing actual performance with the
budgeted and acting upon results to achieve maximum profitability.” Weldon
characterizes budgetary control as planning in advance of the various functions of a
business so that the business as a whole is controlled.
J. Batty defines it as, “A system which uses budgets as a means of planning
and controlling all aspects of producing and/or selling commodities and services.
Welsch relates budgetary control with day-to-day control process.” According to him,
“Budgetary control involves the use of budget and budgetary reports, throughout the
period to co-ordinate, evaluate and control day-to-day operations in accordance with
the goals specified by the budget.”
From the above given definitions it is clear that budgetary control involves
thefollows:
(a) The objects are set by preparing budgets.
(b) The business is divided into various responsibility centres for preparing various
budgets.
(c) The actual figures are recorded.
(d) The budgeted and actual figures are compared for studying the performance of
different cost centres.
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(e) If actual performance is less than the budgeted norms, a remedial action is taken
immediately.
Objectives of Budgetary Control:
Budgetary control is essential for policy planning and control. It also acts an
instrument of co-ordination.
The main objectives of budgetary control are the follows:

 To ensure planning for future by setting up various budgets, the requirements
and expected performance of the enterprise are anticipated.
 To operate various cost centres and departments with efficiency and economy.
 Elimination of wastes and increase in profitability.
 To anticipate capital expenditure for future.
 To centralise the control system.
 Correction of deviations from the established standards.
 Fixation of responsibility of various individuals in the organization.
Essentials of Budgetary Control:
There are certain steps which are necessary for the successful implementation
budgetary control system.
These are as follows:
 Organisation for Budgetary Control
 Budget Centres
 Budget Mammal
 Budget Officer
 Budget Committee
 Budget Period
 Determination of Key Factor.
1. Organization for Budgetary Control:
The proper organization is essential for the successful preparation, maintenance and
administration of budgets. A Budgetary Committee is formed, which comprises the
departmental heads of various departments. All the functional heads are entrusted
with the responsibility of ensuring proper implementation of their respective
departmental budgets.
8
The Chief Executive is the overall in-charge of budgetary system. He
constitutes a budget committee for preparing realistic budgets A budget officer is the
convener of the budget committee who co-ordinates the budgets of different
departments. The managers of different departments are made responsible for their
departmental budgets.
2. Budget Centres:
A budget centre is that part of the organization for which the budget is prepared. A
budget centre may be a department, section of a department or any other part of the
department. The establishment of budget centres is essential for covering all parts of
the organization. The budget centres are also necessary for cost control purposes. The
appraisal performance of different parts of the organization becomes easy when
different centres are established.
3. Budget Manual:
A budget manual is a document which spells out the duties and also the
responsibilities of various executives concerned with the budgets. It specifies the
relations amongst various functionaries.
4. Budget Officer:
The Chief Executive, who is at the top of the organization, appoints some person as
Budget Officer. The budget officer is empowered to scrutinize the budgets prepared
by different functional heads and to make changes in them, if the situations so
demand. The actual performance of different departments is communicated to the
Budget Officer. He determines the deviations in the budgets and the actual
performance and takes necessary steps to rectify the deficiencies, if any.
He works as a coordinator among different departments and monitors the

relevant information. He also informs the top management about the performance of
different departments. The budget officer will be able to carry out his work fully well
only if he is conversant with the working of all the departments.
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5. Budget Committee:
In small-scale concerns the accountant is made responsible for preparation and
implementation of budgets. In large-scale concerns a committee known as Budget
Committee is formed. The heads of all the important departments are made members
of this committee. The Committee is responsible for preparation and execution of
budgets. The members of this committee put up the case of their respective
departments and help the committee to take collective decisions if necessary. The
Budget Officer acts as convener of this committee.
6. Budget Period:
A budget period is the length of time for which a budget is prepared and employed.
The budget period depends upon a number of factors. It may be different for different
industries or even it may be different in the same industry or business.
The budget period depends upon the following considerations:

(a) The type of budget i.e., sales budget, production budget, raw materials purchase
budget, capital expenditure budget. A capital expenditure budget may be for a longer
period i.e. 3 to 5 years purchase, sale budgets may be for one year.
(b) The nature of demand for the products.
(c) The timings for the availability of the finances.
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(d) The economic situation of the country.
(e) The length of trade cycles.
All the above-mentioned factors are taken into account while fixing period of budgets
7. Determination of Key Factor:
The budgets are prepared for all functional areas. These budgets are interdependent
and inter-related. A proper co-ordination among different budgets is necessary for
making the budgetary control a success. The constraints on some budgets may have
an effect on other budgets too. A factor which influences all other budgets is known
as Key Factor or Principal Factor.
There may be a limitation on the quantity of goods a concern may sell. In this
case, sales will be a key factor and all other budgets will be prepared by keeping in
view the amount of goods the concern will be able to sell. The raw material supply
may be limited, so production, sales and cash budgets will be decided according to
raw materials budget. Similarly, plant capacity may be a key factor if the supply of
other factors is easily available.
The key factor may not necessarily remain the same. The raw materials supply
may be limited at one time but it may be easily available at another time. The sales
may be increased by adding more sales staff, etc. Similarly, other factors may also
improve at different times. The key factor also highlights the limitations of the
enterprise. This will enable the management to improve the working of those
departments where scope for improvement exists.
Advantages of Budgetary Control:
The budgetary control system help in fixing the goals for the organization as whole
and concerted efforts are made for its achievements. It enables ‘economies in the
enterprise.
Some of the advantages of budgetary control are:

1. Maximization of Profits:
The budgetary control aims at the maximization of profits of the enterprise. To
achieve this aim, a proper planning and co ordination of different functions is
undertaken. There is a proper control over various capital and revenue expenditures.
The resources are put to the best possible use.
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2. Co-ordination:
The working of different departments and sectors is properly coordinated. The
budgets of different departments have a bearing on one another. The co-ordination of
various executives and subordinates is necessary for achieving budgeted targets.
3. Specific Aims:
The plans, policies and goals are decided by the top management. All efforts are put
together to reach the common goal, of the organization. Every department is given a
target to be achieved. The efforts are directed towards achieving some specific aims.
If there is no definite aim then the efforts will be wasted in pursuing different aims.
4. Tool for Measuring Performance:

By providing targets to various departments, budgetary control provides a tool for
measuring managerial performance. The budgeted targets are compared to actual
results and deviations are determined. The performance of each department is
reported to the top management. This system enables the introduction of management
by exception.
5. Economy:
The planning of expenditure will be systematic and there will be economy in
spending. The finances will be put to optimum use. The benefits derived for the
concern will ultimately extend to industry and then to national economy. The national
resources will be used economically and wastage will be eliminated.
6. Determining Weaknesses:
The deviations in budgeted and actual performance will enable the determination of
weak spots. Efforts are concentrated on those aspects where performance is less than
the stipulated.
7. Corrective Action:
The management will be able to take corrective measures whenever there is a
discrepancy in performance. The deviations will be regularly reported so that
necessary action is taken at the earliest. In the absence of a budgetary control system
the deviations can be determined only at the end of the financial period.
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8. Consciousness:
It creates budget consciousness among the employees. By fixing targets for the
employees, they are made conscious of their responsibility. Everybody knows what he
is expected to do and he continues with his work uninterrupted.
9. Reduces Costs:
In the present day competitive world budgetary control has a significant role to play.
Every businessman tries to reduce the cost of production for increasing sales. He tries
to have those combinations of products where profitability is more.
10. Introduction of Incentive Schemes:

Budgetary control system also enables the introduction of incentive schemes of
remuneration. The comparison of budgeted and actual performance will enable the
use of such schemes.
BUDGETARY CONTROL:
No system of planning can be successful without having an effective and
efficient system of control. Budgeting is closely connected with control. The exercise
of control in the organization with the help of budgets is known as budgetary control.
The process of budgetary control includes.
1. Establishment of budget for each function and section of the organization.
2. Executive responsibility in order to perform the specific tasks so that

objectives of the enterprise may be attained.
13
3. Continues comparison of the actual performance with that of the budget and
placing the responsibility of executives for failure to achieve the desired result
a given in the budget
4. Taking suitable remedial action to achieve the desired objective if there is a

variation of the actual performance from the budgeted performance.
5. Revision of budgets in the light of changed circumstances.
Definitions of Budgetary Control:
According to the Brown and Howard “Budgetary control is the system of

controlling costs which includes the preparation of Budgets, co-coordinating the
department and establishing the responsibilities, comparing the actual performance
with the budgeted and acing upon the results to achieve the maximum profitability”
According to the J.Betty: “A system which uses budgets as a means of

planning and controlling all aspects of producing and / or selling commodities and
services”
.According to the CIMA, London, “Budgetary control is the establishment of

budgets relating to responsibilities of executives to the requirement of a policy, and
the continuous comparison of actual with budged results, either to secure by
individual action the objective of that policy or to provide a basis for revision.
BUDGET, BUDGETING AND BUDGETING CONTROL
Row land and William in their book entitled Budgeting for management
control has given the difference between budge, budgeting and budgetary control as
follows:
“Budgets are the individual objectives of a department etc where as budgeting

may be said to be the act of building budgets. Budgetary control embraces all this and
in addition includes the science of planning the budgets themselves and the utilization
of such budgets to effect on overall management tool for the business planning and
14
control”. Thus, a budget is a financial plan and budgetary control results from the
administration of the financial plan.
Essential Features of a Budgetary:
 Budgetary control defines the objectives and policies of the undertaking as a

whole.
 It is an effective method of controlling the activities of various departments of

a business unit. It fixed targets and the various departments have to efficiently
to reach the targets.
 It secures proper co-ordination among the activities of various departments.
 It helps the management to fix up responsibility in case the performance is

below expectations.
 It helps the management to reduce wasteful expenditure. This leads to

reduction in the cost of production.
 It brings in efficiency and economy by promoting cost consciousness among

the employees.
 It facilitates centralized control with decentralized activity.
 It acts as internal audit by a continuous evaluation of departmental results and

osts.
Limitations of Budgetary Control:
 The preparation of a budget under inflationary conditions and changing

Government policies is really difficult. Thus, the accurate position of the
business can not be estimated.
 Accuracy in budgeting comes through expenditure. Hence it should not be

relied on too much in the initial stages.
15
 Budget is only a management tool. It is not a substitute for management. It
can not replace management in decision making.
 Budgeting involves a heavy expenditure, which small concerns cannot afford.
 There will be active and passive resistance to budgetary control as it points out
the efficiency or inefficiency of individuals.
 The success of budgetary control depends upon wiling co-operation and team
work. This is often lacking.
 Frequent changes maybe called for in budgets due to fast changing industrial
climate. It may be difficult for a company to keep pace with these fast
changes, because revision of budgets is expensive exercise.
OBJECTIVES OF BUDGETARY CONTROL:
Planning:
A budget is a plan of the policy to be pursued during the defined period of time to
attain a given objective. The budgetary control will force management at all the
activities to be done during the future periods. A budget as a plan of action achieves
the following purposes:
 Action is guided by well thought out plan because a budget is prepared after a
careful sturdy and research.
 The budget serves as a mechanism through which.
 Management’s objectives and policies are affected.
 It is a bridge through which communication is establishment between the top

management and the operatives who are to implement the policies of the top
management.
 The most profitable course of action is selected from the various available
alternatives.
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Co-ordination:
The budgetary control co-ordinates the various activities of the firm and
secures co-operation of all concerned so that the common objective of the firm may
be Successfully achieved. It forces executives to think and think as a group. It co-
coordinating the policies, plans and actions. An organization without a budgetary
control is like a ship sailing in a chartered sea. A budget gives direction to the
business and imparts meaning and significance to its achievement by making
comparison of actual performance and budgeted performance.
Motivation:
It employees have actively participated in budget preparation and if they are

convinced that their personal interests are closely associated with the success of
organizational plan, budgets provide motivation in the form of goals to be achieved.
The budgets will motivate the workers, depends purely on how the workers have been
mentally and physically involved with the process of budgeting.
Control:
Control consists of the action necessary to ensure the performance of the

organization conforms to the plans and objectives. Control of performance is possible
with predetermined standards which are laid down in a budget. Thus, budgetary
control makes control possible by continuous comparison of actual performance with
that of the budget so as to report the variations from the budget to the management of
corrective action.
Thus, budgeting system integrates key managerial functions as it links top

management’s planning function with the control function performed at all levels in
the managerial hierarchy. But the efficiency of the budget as a planning and control
device depends upon the activity in which it is being used. A more accurate budget
can be developed for those activities where direct relationship exists between inputs
and outputs. The relationship between inputs and outputs becomes the basis for
developing budgets and exercising control.
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Approved Plan:
A mater budget provides an approved summary of results to be expected from

proposed plan of operations. It concerns all functions of organization and serves as a
guide to executives and departmental heads responsible for various departmental
objectives.
Communication:
The employees of an organization should know organizational aims,

objectives of subunits( budgets centers) and the part that they have to play for their
attainment. Budgets effectively communicate this information to employees. Besides,
budges keep Different sections of the organization informed about the contribution of
different subunits in the attainment of overall organizational objective.
Budget procedures:
Having the budget organization and fixed the period, the actual work or
budgetary control can be taken upon the following pattern.
STEPS IN BUDGETING CONROL:
Organization for budgeting:
The setting up of a definite plan of organization is the first step towards

installing budgetary controlling system in an organization a budget manual should be
prepared giving details of the powers, duties, responsibilities and areas of operation of
each executive in the organization.
Budget Manual:
A Budget manual lays down the details of the organizational set up, the routine
procedures and programmers to be followed for developing budgets for various items
and the duties and responsibilities of the executives regarding the operation of the
budgetary control system. CIMA England defines a budget manual as “a document
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schedule or Booklet which sets out, inter alia, the routine of and the forms and records
required for budgetary control”. Thus, it is a written document which guides the
executives in preparing various budgets. Budgets are to be drawn keeping in view the
objectives of the organization given in the budget manual. Responsibility and
functions of each executive in regard to budgeting are written down in the budget
manual to avoid any duplication or overlapping of responsibilities. Steps and the
methods for developing various budgets and the methods of reporting performance
against the budget are written down in the budget manual. In short it is a written
document which gives everything relating to the preparation and execution of various
budgets. It should be clear and there should be no ambiguity in it.
The following are some of the most important matters covered in a Budget
manual:
a) Introducing and brief explanation of the objects, benefits and principles of

budgetary control.
b) Organization chart giving the titles to different personnel’s with full

explanation of the duties of each to operating system and preparation of
departmental and functional budgets.
c) Length of budget periods and control periods should be clearly stated.
d) A method of accounting and control of expenditure.
e) A statement showing the responsibility and of authority given to each

manger for approval of budgets, vouchers and all other forms and
documents which authorize them to spend the money. The authority for
granting approval must be clearly stated.
f) The entire process of budgeting programme including the time table for
periodical reporting. A schedule should be drawn for this.
g) Purpose, specimen form and number of copies to be used for each report
and statement. Budget centers involved should also be stated clearly.
h) Outline of main budgets and their accounting relationships.
i) Explanation of key budgets.
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FIXATION OF BUDGET PERIOD:
The budget period mean the period for which a budget is prepared and
employed. The budget period will depend upon the type of business and the control
aspect.
Budget period mean the period for which a budge is prepared and employed.
The budget period depends upon the nature of the business and the control techniques.
For example, in case of seasonal industries (i.e., food or clothing) the budget period
should be a short one and should cover one season. But in case of industries with
heavy capital expenditure such as heavy engineering works, the budget period should
be long enough to meet the requirements of the business. From control point of view,
the budget period should be a short one so that the actual results may be compared
with the budget each week end or month end and discussed with and discussed with
the Budget committee. Long term budgets should be supplemented by short term
budgets to make the budgetary control successful, as short-terms budgets will helping
exercising control over day-today operations. In short, the budget period should not be
too long so that there may be sufficient time before budget implementation. For most
business, annual budget is quite common because it compares with the financial
accounting year.
There should be a regular time plan for budget preparation. It may be on the following
lines.
 Long-term budgets for three to five years should be prepared for expansion
and modernization of the undertaking, introduction of new products or new
projects and undertaking heavy advertisement.
 Annual budgets coinciding with financial accounting year should be prepared

for the operations activities (i.e., sales, purchases, and production etc, of the
business)
 For control purposes, short-term budgets-monthly or even weekly budget-

should be prepared for watching progress of actual performance against
targets. Short-term budgets are prepared to see that actual performance is
20
proceeding according to the budgets and early corrective action may be taken
if there is any pitfall.
The responsibility for preparation and implementation of the budgets may be

fixed as under.
Budgetary controller:
Although the chief executive l finally responsible for the budgetary

programme. It is better if a large part of the supervisory responsibility is deluged to an
official designated as Budget Controller or Budget Director. Such a person should
have knowledge of the technical details of the business and report directly to the
president or the chief executive.
Rolling (Continues) Budget:
This is a budget which is updated continuously by adding a further period (a

month\quarter) and deducting a corresponding earlier period. Budgeting is a
continuous process under these methods of preparation of budget. Once the first
period elapses, the forecast for that period is dropped and the forecast for the future
period beyond the existing could not be predicted and forecast reliably, this method is
useful. However, it is a costly exercise but matched by considerable reduction in
operational variances.
Annual Vs Continues budgeting system:
In some organizations budgets are prepared on annual basis. But annual

budgets may not help the management to have control because variances due to
rapidly changing conditions affect the sales in quantity and prices, severe rapidly
changing conditions affect the sales in quantity and prices, severe inflationary
conditions exist resulting fast increase in the prices of inputs without reflecting in
sales prices immediately and wide range of products being produced making it not
feasible to have precise estimate of levels of activity for a year.
The procedure in continuous budgeting will be that a year will be divided into four
quarters. Monthly budgets for the first quarter and three quarterly budgets for the next
year can be prepared. For the first quarter precise estimates can be drawn up monthly.
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The budget estimates for the second quarter may be revised working out separately
monthly estimates on more precise basis for control purposes before the starting of the
second quarter.
Similarly procedure may be followed for third and fourth quarters. This method a
time which need not be in respect of or coincide with the financial year. It will enable
to evolve a precise plan of action and control of variance functions at least for the
immediate quarter and a broad tentative one the subsequent three quarters on a
continues basis.
Principal Budget (limiting) factor:
Principal budget factor is such an important factor that it would affect all the
functional budgets to a large extent. The extent of its influence must be assessed first
in order to ensure that functional budgets are reasonably capable of fulfillment. This is
the factor in the activities of an undertaking which at a particular point in time or over
a period will limit the volume of output. It is the governing factor which is a major
constraint on all the operational activities of the organization, so this factor is taken
into consideration to determine whether the budgets are capable of attainment. It is
essential to locate the limiting factor may be any one of the following:
Is there sufficient demand for the product? (customer demand)
Will a required quality and quantity of materials be available? (availability of

raw material) Is the plant capacity sufficient to cope up with the expected sales? (plant
capacity) Is the required type of labor available? (available of labor) Is cash position
sufficient to finance the expected volume of sales? (cash position) Are there any
Government restrictions? (Government restrictions)
For example, a concern has the capacity to produce 50,000 units of particular
item per year. But only 30, 000 units can be sold in the market. In this case, low
demand for the product is the limiting factor. Therefore, sales budget should be
prepared first and other functional budgets such as production budget, labor budget,
plant utilization budget, cash budget etc. should be prepared in accordance with this
case plant capacity is limited. Therefore, production budget should be prepared first
and other budgets should follow the production budget.
22
Thus, the budget relating to limiting factor should be prepared first and the
other budgets should be prepared in the light of that factor. All budgets should be co-
coordinated keeping in view the principal budget factor if the budgetary control is to
achieve the desired results.
Principal budget factor is not static. It may vary rapidly from time to time due
to internal and external factors. It is of temporary nature and in the long run can be
overcome by suitable management taking sales promotion steps as increasing sales
staff and advertising. Plant capacity can be improved by better planning,
simplification of product or extension of plant.
DIFFERENT TYPES OF BUDGET:
Different types of budgets have been developed keeping in view the different
purposes they serve. Budgets can be classified according to:
 The coverage they encompass;
 The capacity to which they are related;
 The conditions on which they are based; and
 The periods which they cover.
Functional Budget:
A functional budget is a budget which relates to any of the functions of an

undertaking e.g., sales, production, research and development, cash etc, the
following budgets are generally prepared.
Budget prepared by
1. Sales Budget including selling and Sales Manager
Distribution Cost Budget
2. Production Budget Production Manager
23
3. Material Budget Purchase Manager
4. Labor and Personnel Budget Personnel Manager
5. Manufacturing Overheads Production Manager
6. Administration Cost Budget Finance Manager
7. Plant Utilization Budget Production Manager
8. Capital Expenditure Budget Chief Executive
9. Research and Development
Cost Budget R&D Manager
10. Cash Budget Finance Manager
Sales Budget:
Sales budget is the most important budget and of primary importance. It forms
the basis on which all the budgets are built up. This budget is a forecast of quantities
and values of sales to be achieved in a budget in a budget period. Every effort should
be made to ensure that its figures are as accurate as possible because this is usually the
starting budget (sales being limiting factor on which all the other budgets are built
up). The sales Manger should be made directly responsible for the preparation and
execution of the budget. The sales budget may be prepared according to products,
sales territories, types of customers; salesmen etc., in the preparation of the sales
budget, the sales manager should take into consideration the following factors:
1. Past Sales Figures and Trends.
2. Salesmen’s Estimation.
3. Plant Capacity.
4. Availability of Raw Material and other Supplies.
5. General Trade Prospects.
6. Orders in Hand.
24
7. Seasonal Fluctuations.
8. Financial Aspect.
9. Adequate Return on Capital Employed.
10. Competition.
11. Miscellaneous Considerations.
Production Budget:
Production budget is a forecast of the total output of the whole organization

broken down into estimates of output of each type of product with a scheduling of
operations (by weeks and months) to be performed and a forecast of the closing
finished stock. This budget may be expressed in quantitative (weight, units etc) r
financial (rupees) units or both. This budget is prepared after taking into consideration
the estimated opening stock, the estimated sales and the desired closing finished stock
of each product. The works manger is responsible for the total production budget and
the departmental managers are responsible for the departmental production budget. In
preparing the production budget, the following factors are considered.
The time lag between the production in the factor and sales to the customer
should be considered so as to allow fro the time required or the dispatch of goods
from the factory to the place of the customers.
The stock of goods to be maintained both at the factory’s go gown and at he

sales centers. The level of production needed to meet the sales programme. Monthly
production targets should be fixed and it should be seen that production is kept more
or less at uniform level throughout the year. The material labor and plant requirements
should be ascertained to have the desired production to meet the sales programme.
The sales and the production are inter-dependant because production budget is
governed by the sales budget and the sales budget is largely determined by the
production capacity and by production costs.
25
CHAPTER-III
INDUSTRY PROFILE
&
COMPANY PROFILE
26
INTRODUCTION
As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently
capitalized and well-regulated. The financial and economic conditions in the country
are far superior to any other country in the world. Credit, market and liquidity risk
studies suggest that Indian banks are generally resilient and have withstood the global
downturn well.
Indian banking industry is expected to witness better growth prospects in 2015 as a

sense of optimism stems from the Government’s measures towards revitalizing the
industrial growth in the country. In addition, RBI’s new measures may go a long way
in helping the restructuring of the domestic banking industry.
A bank is a financial institution that accepts deposits and channels those

deposits into lending activities. Banks primarily provide financial services to
customers while enriching investors. Government restrictions on financial activities
by banks vary over time and location. Banks are important players in financial
markets and offer services such as investment funds and loans. In some countries such
as Germany, banks have historically owned major stakes in industrial corporations
while in other countries such as the United States banks are prohibited from owning
non-financial companies. In Japan, banks are usually the nexus of a cross-share
holding entity known as the keiretsu. In France, bancassurance is prevalent, as most
banks offer insurance services (and now real estate services) to their clients.
Introduction
India’s banking sector is constantly growing. Since the turn of the century,
there has been a noticeable upsurge in transactions through ATMs, and also internet
and mobile banking.
Following the passing of the Banking Laws (Amendment) Bill by the Indian
Parliament in 2012, the landscape of the banking industry began to change. The bill
allows the Reserve Bank of India (RBI) to make final guidelines on issuing new
licenses, which could lead to a bigger number of banks in the country. Some banks
have already received licences from the government, and the RBI's new norms will
provide incentives to banks to spot bad loans and take requisite action to keep rogue
borrowers in check.
27
Over the next decade, the banking sector is projected to create up to two
million new jobs, driven by the efforts of the RBI and the Government of India to
integrate financial services into rural areas. Also, the traditional way of operations
will slowly give way to modern technology.
History
Origin of the word
The name bank derives from the Italian word banco "desk/bench", used during
the Renaissance by Jewish Florentine bankers, who used to make their transactions
above a desk covered by a green tablecloth. However, there are traces of banking
activity even in ancient times, which indicates that the word 'bank' might not
necessarily come from the word 'banco'.
In fact, the word traces its origins back to the Ancient Roman Empire, where
moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco and bank are
derived. As a moneychanger, the merchant at the bancu did not so much invest money
as merely convert the foreign currency into the only legal tender in Rome—that of the
Imperial Mint.
The earliest evidence of money-changing activity is depicted on a silver

drachm coin from ancient Hellenic colony Trapezus on the Black Sea, modern
Trabzon, c. 350–325 BC, presented in the British Museum in London. The coin shows
a banker's table (trapeza) laden with coins, a pun on the name of the city.
In fact, even today in Modern Greek the word Trapeza (Τράπεζα) means both a table
and a bank.
Market Size
The Indian banking system consists of 26 public sector banks, 25 private

sector banks, 43 foreign banks, 56 regional rural banks, 1,589 urban cooperative
banks and 93,550 rural cooperative banks, in addition to cooperative credit
institutions. Public-sector banks control nearly 80 percent of the market, thereby
leaving comparatively much smaller shares for its private peers.
28
As of November 11, 2015, 192.1 million accounts had been opened under
Pradhan Mantri Jan Dhan Yojna (PMJDY) and 165.1 million RuPay debit cards were
issued. These new accounts have mustered deposits worth Rs 26,819 crore (US$ 4
billion).
Standard & Poor’s estimates that credit growth in India’s banking sector would
improve to 12-13 per cent in FY16 from less than 10 per cent in the second half of
CY14.
29
COMPANY PROFILE
ICICI Bank is India's largest private sector bank with total assets of Rs. 6,461.29
billion (US$ 103 billion) at March 31, 2015 and profit after tax Rs. 111.75 billion
(US$ 1,788 million) for the year ended March 31, 2015. ICICI Bank currently has a
network of 4,070 Branches and 13,235 ATM's across India.
History
1955
The Industrial Credit and Investment Corporation of India Limited (ICICI)
incorporated at the initiative of the World Bank, the Government of India and
representatives of Indian industry, with the objective of creating a development
financial institution for providing medium-term and long-term project financing to
Indian businesses. Mr. A. Ramaswami Mudaliar elected as the first Chairman of
ICICI Limited. ICICI emerges as the major source of foreign currency loans to Indian
industry. Besides funding from the World Bank and other multi-lateral agencies,
ICICI was also among the first Indian companies to raise funds from international
markets.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian

financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in
ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal
1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000,
ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in
fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal
2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank,
the Government of India and representatives of Indian industry. The principal
objective was to create a development financial institution for providing medium-term
and long-term project financing to Indian businesses.
In the 1990s, ICICI transformed its business from a development financial

institution offering only project finance to a diversified financial services group
offering a wide variety of products and services, both directly and through a number
of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian
30
company and the first bank or financial institution from non-Japan Asia to be listed on
the NYSE.
After consideration of various corporate structuring alternatives in the context

of the emerging competitive scenario in the Indian banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the
view that the merger of ICICI with ICICI Bank would be the optimal strategic
alternative for both entities, and would create the optimal legal structure for the ICICI
group's universal banking strategy. The merger would enhance value for ICICI
shareholders through the merged entity's access to low-cost deposits, greater
opportunities for earning fee-based income and the ability to participate in the
payments system and provide transaction-banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital base and scale of
operations, seamless access to ICICI's strong corporate relationships built up over five
decades, entry into new business segments, higher market share in various business
segments, particularly fee-based services, and access to the vast talent pool of ICICI
and its subsidiaries.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved
the merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High
Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.
Consequent to the merger, the ICICI group's financing and banking operations, both
wholesale and retail, have been integrated in a single entity.
31
...........................................
Board Members Mr. K. Ramkumar,
Mr. M. K. Sharma, Chairman Executive Director
.............................................. ...........................................
Mr. Dileep Choksi Mr. Rajiv Sabharwal,
.............................................. Executive Director
Mr. Homi R. Khusrokhan
..............................................
Mr. M.S. Ramachandran
..............................................
Dr. Tushaar Shah
..............................................
Mr. V. K. Sharma
..............................................
Mr. V. Sridar
..............................................
Mr. Alok Tandon
Ms. Chanda Kochhar,
Managing Director & CEO
...........................................
Mr. N. S. Kannan,
Executive Director
32
ORGANIZATION STRUCTURE
We believe that the structure of an organization needs to be dynamic, constantly
evolvingand responsive to changes both in the external and internal environments.
Our organizationalstructure is designed to support our business goals, and is flexible
while at the same time ensuring effective control and supervision and consistency in
standards across business groups. The organization structure is divided into five
principal groups – Retail Banking, Wholesale Banking, Project Finance & Special
Assets Management, International Business and Corporate Centre.
The Retail Banking Group comprises ICICI Bank’s retail assets business including
various retail credit products, retail liabilities (including our own deposit accounts as
well as distribution of third part liability products) and rural micro-banking.
The Wholesale Banking Group comprises ICICI Bank’s corporate banking business
including credit products and banking services, with separate dedicated groups for
large corporates, Government and public sector entities and emerging corporates.
Treasury, structured finance and credit portfolio management also form part of this
group.
Awards - 2015
ICICI Bank
 Ms. Chanda Kochhar featured in Fortune India’s list of Most Powerful

Women in Business.
 ICICI Bank won awards in the categories of ‘Use of Technology for Fraud
Prevention and NPA Management’ among large banks and ‘Evangelising
Technology Adoption’ among large banks at the IDRBT Banking Technology
Excellence Awards 2015.
 Ms. Chanda Kochhar was conferred with the 2015 Asia Game Changers
Award.
 ICICI Bank won the award of 'Top Borrowers in Asia - India' at 2015 Fixed
Income Research Poll in a poll conducted by FinanceAsia magazine.
33
 ICICI Bank won ‘Best Private Sector Bank’ under ‘Global Business’ category
at the ‘Dun & Bradstreet Banking Awards 2015’.
 Ms. Chanda Kochhar featured in the list of ‘Time 100 Most Influential People,
2015’.
 Ms. Chanda Kochhar featured in Forbes Asia Magazine’s 2015 list of Asia’s
50 Power Businesswomen and in the list of CNBC TV18’s top 15 Indian
Business Icons.
 ICICI Bank won a total of seven awards at the ‘National Award for Excellence
in Energy Management 2015’ organised by the Confederation of Indian
Industry (CII).
 Ms. Chanda Kochhar ranked first in Fortune’s list of ‘Most Powerful Women’
in Asia Pacific.
 ICICI Bank won the ‘Best Foreign Exchange Bank’ at FinanceAsia’s 2015
Country Banking Achievement Awards.
 Congratulations to Mr. Rakesh Jha for securing the top position in the
category of ‘Best CFO’ for banks, announced by Institutional Investor, a US-
based magazine. This result was determined by a poll in which 625 sell side
analysts across 16 sectors participated. The poll is part of an initiative by the
magazine to determine the ‘2015 All Asia Executive Team’ rankings among
financial institutions.
 ICICI Bank has been adjudged the ‘Best Retail Bank in India’ by The Asian
Banker. It has also emerged winners in the categories of ‘Best Internet
Banking Initiative’ and ‘Best Customer Risk Management Initiative’ awards
given by The Asian Banker.
 ICICI Bank has been declared as the first runner up at Outlook Money Awards
2015 in the category of ‘Best Bank’.
 ICICI Bank won an award in the BFSI Leadership Summit & Awards in the
'Best Phone Banking for End-users’ category.
 ICICI Bank won in six categories and was the first runner-up in one category
among Private Sector Banks at IBA Banking Technology Awards, 2015. The
34
bank was declared winner in the six categories of Best Technology Bank of
the Year, Best use of Data, Best Risk Management Initiatives, Best use of
Technology in Training, Human Resources and e-Learning initiatives, Best
Financial Inclusion Initiative and Best use of Digital and Channels
Technology. ICICI Bank was the first runner-up in Best use of Technology to
Enhance Customer Experience.
Awards - 2014
ICICI Bank
 Ms. Chanda Kochhar received an honorary Doctor of Laws from Carleton

University, Canada. The university conferred this award on Ms. Kochhar in
recognition of her pioneering work in the financial sector, effective leadership
in a time of economic crisis and support for engaged business practices.
 Ms Chanda Kochhar featured in The Telegraph (UK) list of '11 most
important women in finance'.
 ICICI Bank has been recognised as one of the 'Top Companies for Leaders' in
India in a study conducted by Aon Hewitt.
 IDRBT has given awards to ICICI Bank in the categories of 'Social Media and
Mobile Banking' and' Business Intelligence Initiatives'.
 ICICI Bank won the award for the Best Bank - Global Business Development
(Private Sector) in the Dun & Bradstreet - Polaris Financial Technology
Banking Awards 2014.
 ICICI Bank was awarded the Certificate of Recognition as one of the Top 5
Companies in Corporate Governance in the 14th ICSI (The Institute of
Company Secretaries of India) National Awards for Corporate Governance.
 ICICI Bank has been honoured as The Best Service Provider - Risk
Management, India at The Asset Triple A Transaction Banking, Treasury,
Trade and Risk Management Awards 2014.
 Mr Rakesh Jha has been ranked as the Best CFO in India at the 14th Annual
Finance Asia's Best Managed Companies Poll.
35
 ICICI Bank has won The Corporate Treasurer Awards 2013 in the categories
of 'Best Cash Management Bank in India' & 'Best Trade Finance Bank in
India'.
 ICICI Bank has been awarded the 'Best Retail Bank in India', 'Best
Microfinance Business' and Best Retail Banking Branch Innovation' under the
'Excellence in Retail Financial Services awards 2014' by The Asian Banker.
 Ms Chanda Kochhar, MD & CEO, ICICI Bank, has been named among
Fortune's 50 most powerful women in business for the fourth consecutive
year.
 Ms. Chanda Kochhar, MD and CEO received the 'Mumbai Women Of The
Decade' award by ASSOCHAM.
ICICI Bank, India’s largest private sector bank, today announced the launch of
India’s only credit card with a unique transparent design and a distinctive look. The
‘ICICI Bank Coral American Express Credit Card’ is the latest addition to the Bank’s
exclusive ‘Gemstone Collection’ of credit cards.
Speaking at the launch, Mr. Rajiv Sabharwal, Executive Director, ICICI Bank
said, "At ICICI Bank, it is our constant endeavour to deliver innovative, powerful and
distinctive value propositions to our discerning customers. We are delighted to launch
the ‘ICICI Bank Coral American Express Credit Card’, the only card in the country
with a youthful, transparent design. Aimed at providing significant lifestyle benefits,
this card re-affirms our commitment to bring forth innovative services to our
customers. We are also introducing a host of exciting privileges including an
introductory extended credit period offer and bonus reward points on online
transactions. We believe this card will be yet another compelling addition to our
Gemstone collection of credit cards."
Ms. Siew Choo Ng, Senior Vice President, Head of Global Network
Partnerships, Asia, American Express International, Inc. said, "We are delighted
to have further strengthened our long and cherished relationship with ICICI Bank with
the launch of the new ICICI Bank Coral American Express Credit Card. Designed to
appeal to value seeking customers, the Card reinforces our consistent endeavor to
provide differentiated products and services to our customers. The Card offers a wide
array of exclusive privileges and features including additional PAYBACK points on
36
online spend and an innovative transparent design. At American Express, we always
strive to work closely with our partners to develop the most relevant and compelling
products for our valued card members."
Mr. Sanjay Rishi, President, South Asia, American Express, said, “This launch
marks a further strengthening of the relationship between ICICI Bank and American
Express. We already partner with ICICI Bank on customer loyalty programs,
insurance services, retail banking services as well as initiatives to expand card
accepting merchants. The launch of the ICICI Bank Coral American Express Card
combines the strengths and capabilities of both organizations to offer an exciting new
payment choice to customers.
The ICICI Bank Coral American Express® Credit Card offers a wide range of
attractive benefits to its card members: Extended Credit Period; a unique proposition
offering card members ability to carry over the retail purchase balances in first two
billing statements by simply paying the minimum amount due. No interest shall be
charged in such cases and the total amount due shall be payable as per the third billing
statement. TnC apply, for complete details please visit www.icicibank.com.
 4 PAYBACK points per Rs.100 spent on dining, groceries and at

supermarkets, 3 PAYBACK points per Rs.100 of online spends and 2
PAYBACK points per Rs.100 on other spends
 Complimentary movie tickets with 'buy one get one free' offer
on www.bookmyshow.com
 Complimentary visits to Altitude lounges at Mumbai and Delhi airports
 Minimum 15% discount on dining bills at leading restaurants across India with
the ICICI Bank ‘Culinary Treats’ programme
 No fuel surcharge on fuel transactions at HPCL fuel stations
OVERVIEW ICICI Group
ICICI Group offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through its
specialised group companies and subsidiaries in the areas of personal banking,
investment banking, life and general insurance, venture capital and asset management.
37
With a strong customer focus, the ICICI Group Companies have maintained and
enhanced their leadership positions in their respective sectors.
ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47
billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$
1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,791
branches and 10,021 ATMs in India, and has a presence in 19 countries, including
India.
ICICI Prudential Life Insurance is a joint venture between ICICI Bank, a premier
financial powerhouse, and Prudential plc, a leading international financial services
group headquartered in the United Kingdom. ICICI Prudential Life was amongst the
first private sector insurance companies to begin operations in December 2000 after
receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI
Prudential Life's capital stands at Rs. 47.91 billion (as of March 31, 2012) with ICICI
Bank and Prudential plc holding 74% and 26% stake respectively. For FY 2012, the
company garnered Rs.140.22 billion of total premiums and has underwritten over 13
million policies since inception. The company has assets held over Rs. 707.71 billion
as on March 31, 2012.
ICICI Lombard General Insurance Company, is a joint venture between ICICI

Bank Limited, India's second largest bank with consolidated total assets of over USD
91 billion at March 31, 2012 and Fairfax Financial Holdings Limited, a Canada based
USD 30 billion diversified financial services company engaged in general insurance,
reinsurance, insurance claims management and investment management. ICICI
Lombard GIC Ltd. is the largest private sector general insurance company in India
with a Gross Written Premium (GWP) of Rs. 5,358 crore for the year ended March
31, 2012. The company issued over 76 lakh policies and settled over 44 lakh claims
and has a claim disposal ratio of 99% (percentage of claims settled against claims
reported) as on March 31, 2012.
ICICI Securities Ltd is the largest integrated securities firm covering the needs
of corporate and retail customers through investment banking, institutional broking,
retail broking and financial product distribution businesses. Among the many awards
that ICICI Securities has won, the noteworthy awards for 2012 were: Asiamoney
`Best Domestic Equity House for 2012; 'BSE IPF D&B Equity Broking Awards 2012'
38
under two categories:- Best Equity Broking House - Cash Segment and Largest E-
Broking House; the Chief Learning Officer Award from World HRD Congress for
Innovation in Learning category. IDG India's CIO magazine has recognized ICICI
Securities as a recipient of CIO 100 award in 2009, 2010, 2011 and 2012. I-Sec won
this awards 4 times in a row for which the CIO Hall of Fame award was additionally
conferred in 2012.
ICICI Securities Primary Dealership Limited (‘I-Sec PD’) is the largest primary
dealer in Government Securities. It is an acknowledged leader in the Indian fixed
income and money markets, with a strong franchise across the spectrum of interest
rate products and services - institutional sales and trading, resource mobilisation,
portfolio management services and research. One of the first entities to be granted
primary dealership license by RBI, I-Sec PD has made pioneering contributions since
inception to debt market development in India. I-Sec PD is also credited with
pioneering debt market research in India. It is one of the largest portfolio managers in
the country and amongst PDs, managing the largest AUM under discretionary
portfolio management. I-Sec PD’s leadership position and research expertise have
been consistently recognised by domestic and international agencies. In recognition of
our performance in the Fixed Income market, we have received the following awards:
 “Best Domestic Bond House” in India - 2007, 2005, 2004, 2002 by Asia
Money
 “Best Bond House” - 2009, 2007, 2006, 2005, 2004, 2001 by Finance Asia
 “Best Domestic Bond House” – 2009 by The Asset Magazine’s annual Triple
A Country Awards
 Ranked volume leader - by Greenwich Associates in 2010 Asian Fixed-

Income Investors Study. Ranked 5th in ‘Domestic Currency Asian Credit’
with market share of 4.5%, Only Domestic entity to be ranked.
 “Best Debt House in India” – 2012 by EUROMONEY
ICICI Prudential Asset Management is the third largest mutual fund with average
asset under management of Rs. 688.16 billion and a market share ( mutual fund ) of
10.34% as on March 31, 2012. The Company manages a comprehensive range of
mutual fund schemes and portfolio management services to meet the varying
39
investment needs of its investors through117 branches and 196 CAMS official point
of transaction acceptance spread across the country.
ICICI Venture is one of the largest and most successful alternative asset managers
in India with funds under management of over US$ 2 billion. It has been a pioneer in
the Indian alternative asset industry since its establishment in 1988, having managed
several funds across various asset classes over multiple economic cycles. ICICI
Venture is a wholly owned subsidiary of ICICI Bank
GROUP PHILOSOPHY
As India transforms into a key player in the global economic arena, multiple
opportunities for the financial services sector have emerged. We, at ICICI Group,
seek to partner the country's growth and globalization through the delivery of world-
class financial services across all cross-sections of society.
From providing project and working capital finance to the buoyant

manufacturing and infrastructure sectors, meeting the foreign investment and treasury
requirements of the Indian corporate with increasing levels of international
engagement, servicing the India linked needs of the growing Indian diaspora, being a
catalyst to the consumer finance story to serving the financially under-served
segments of the society, our technology empowered solutions and distribution
network have helped us touch millions of lives.
Vision:
To be the leading provider of financial services in India and a major global bank.
Mission:
We will leverage our people, technology, speed and financial capital to:
 be the banker of first choice for our customers by delivering high quality,
world-class products and services.
 expand the frontiers of our business globally.
 play a proactive role in the full realisation of India’s potential.
 maintain a healthy financial profile and diversify our earnings across
businesses and geographies.
 maintain high standards of governance and ethics.
40
 contribute positively to the various countries and markets in which we operate.
 create value for our stakeholders.
Towards Sustainable Development
As India's fastest growing financial services conglomerate, with deep

moorings in the Indian economy for over five decades, ICICI Group of companies
have endeavored to contribute to address the challenges posed to the community in
multiple ways.
1) ICICI Foundation for Inclusive Growth: ICICI Foundation for Inclusive

Growth (ICICI Foundation) was founded by the ICICI Group in early 2008 to
carry forward and build upon its legacy of promoting inclusive growth. ICICI
Foundation works within public systems and specialised grassroots
organisations to support developmental work in four identified focus areas.
We are committed to investing in long-term efforts to support inclusive
growth through effective interventions.
2) Disha Counselling: Disha Financial Counselling services are free to all in

areas like financial education, credit counselling and debt management.
3) Technology Finance Group: TFG's programmes are designed to assist

industry and institutions to undertake collaborative R&D and technology
development projects.
4) Read to Lead campaign: ICICI Bank has pledged to educate 1,00,000

children through the 'Read to Lead initiative. Because education today means
a better life tomorrow.
5) Go Green. Each one for a better earth: ICICI Bank, is a responsible

corporate citizen and believes that every small 'green' step today would go a
long way in building a greener future and that each one of us can work
towards a better earth.
6) Go Green' is an organisation wide initiative that moves beyond moving

ourselves, our processes and our customers to cost efficient automated
channels to building awareness and consciousness of our environment, our
nation and our society.
41
PERSONAL BANKING
Deposits
ICICI Bank offers wide variety of Deposit Products to suit your requirements.
Convenience of networked branches/ ATMs and facility of E-channels like Internet
and Mobile Banking, Select any of our deposit products and provide your details
online and our representative will contact you.
Loans
ICICI Bank offers wide variety of Loans Products to suit your requirements.
Coupled with convenience of networked branches/ ATMs and facility of E-channels
like Internet and Mobile Banking, ICICI Bank brings banking at your doorstep. Select
any of our loan product and provide your details online and our representative will
contact you for getting loans.
Cards
ICICI Bank offers a variety of cards to suit your different transactional needs.
Our range includes Credit Cards, Debit Cards and Prepaid cards. These cards offer
you convenience for your financial transactions like cash withdrawal, shopping and
travel. These cards are widely accepted both in India and abroad. Read on for details
and features of each.
Wealth Management
Wealth is the result of a recognized opportunity. We understand this and we

work with you to plan and manage your financial opportunities prudently. Not just
that, we also extend a host of services so you can remain focused on immediate
objectives while we take care of all your wealth management requirements.
42
CHAPTER-IV
DATA ANALYSIS AND INTERPRETATION
43
CALCULATION OF REVENUE RECEIPTS BUDGET FOR THE
YEAR 2019-2020
(Cr……)
S.No DESCRIPTION BUDGETED ACTUALS VARIANCE
1. Interest Earned 53211.34 49091.14 4120.20
2. Other Income 13032.91 12176.13

856.78
3. 287.06
Balance in 16938.77 16651.71
bank(Inventory)
Total 83183.02 77918.98 5246.04
BUDGETED 53211.34
ACTUALS 49091.14
VARIANCE 4120.2
In this year it can be seen that every item actual are bellow the budget estimate
which reprehensions a positives indications of savings, the actual are beyond budget
estimates due to revision in pay scales. This can be ignored, because in total budget
estimates are more than the actual
In revenue receipts, the actual are below the budgeted. Except in increase in
inventory value is negative. The budget estimates with a good variation percentage.
44
CALCULATION OF REVENUE EXPENDITURE BUDGET FOR
THE YEAR 2019-2020
(Cr……)
S. DESCRIPTION BUDGETED ACTUALS VARIANCE

No.
1. Interested Expanded 31259.43 30051.53 1207.90
Operating Expenses
2. 11634.99 11495.83 139.16
Employee Remuneration &
3. Benefits 4936.87 4749.88 186.99
Administrative &Operation
Expenses
4. 16842.53 14631.56 2210.97
Provisions & Contingencies
Depreciation
5. 8722.66 8544.56 178.10
6. 783.37 658.95 124.42
Total 74179.85 70132.31 4047.54
45
YEAR BUDGETED ACTUALS
BUDGETED; 5;
783.37
ACTUALS; 5;
BUDGETED; 1;
BUDGETED; BUDGETED; 3;BUDGETED; 4;
2;
ACTUALS; 1; ACTUALS; 2; ACTUALS; 3; ACTUALS; 4; 658.95
596.67 621.47 621.47
562.44 581.37
524.53
578.21 575.97
YEAR; 1; 0 YEAR; 2; 0 YEAR; 3; 0 YEAR; 4; 0 YEAR; 5; 0 BUDGETED;

YEAR;
ACTUALS;
6; 0 6; 0
46
YEAR 2018-2019
(Cr……)
1. Interest Earned 46514.58 44178.15 2336.23
1050.67
2. Other Income 11478.54 10427.87
306.77
3. Balance in 20014.54 19707.77
bank(Inventory)
Total 78007.46 74313.79 3693.67
BUDGETED
ACTUALS
VARIANCE
47
THE YEAR 2018-2019
(Cr……)

No.
Operating Expenses
2. 10878.55 10308.86 569.69
3. Benefits 4354.81 4220.11 134.70
Expenses
4. 3154.87 2888.22 266.65
Depreciation
5. 6965.64 6784.10 181.54
6. 621.47 575.97 45.50
Total 54520.98 52479.85 2041.13
48
BUDGETED
ACTUALS
VARIANCE
49
YEAR 2017-2018
(Cr……)
1. Interest Earned 41658.64 40075.60 1583.04
352.64
2. Other Income 8698.34 8345.70
3. 1086.72
Balance in 23451.51 22364.79
bank(Inventory)
Total 73808.49 70786.09 3022.40
BUDGETED
ACTUALS
VARIANCE
50
THE YEAR 2017-2018 (Cr……)
S. DESCRIPTION BUDGETE ACTUAL VARIANC

No. D S E
Operating Expenses
2. 10245.14 9012.88 1232.26
Employee
3. Remuneration & 4157.58 3893.29 264.29
Benefits
Administrative
4. &Operation Expenses 3154.87 2888.22 266.65
Provisions &
Contingencies
5. 5258.94 4873.76 385.18
Depreciation
6. 621.47 578.21 43.26
Total 50896.19 47455.54 3440.65
51
BUDGETED
ACTUALS
VARIANCE
52
YEAR 2016-2017
(Cr……)
1. Interest Earned 34187.69 33542.65 645.04
121.57
2. Other Income 8029.67 7908.10
3. 319.07
Balance in 16087.09 15768.02
bank(Inventory)
Total 58304.45 57218.77 1085.68
BUDGETED
ACTUALS
VARIANCE
In this year it can be seen that every item actuals are bellow the budget
estimate which reprehensions a positives indications of savings, the actuals are
beyond budget estimates due to revision in pay scales. Which can be ignored, because
in total budget estimates are more then the actuals
In revenue receipts, the actuals are below the budgeted. Except in increase in
53
THE YEAR 2016-2017
(Cr……)
S. DESCRIPTION BUDGETED ACTUALS VARIANC

No. E
Operating Expenses
2. 9024.67 8843.63 181.04
Employee Remuneration
3. & Benefits 3608.91 3515.28 93.63
Administrative
&Operation Expenses
4. 2961.37 2888.22 73.15
Provisions &
Contingencies
5. 3479.35 3333.37 145.98

Depreciation
524.53 56.84
6. 581.37
Total 42914.7 41913.53 1001.17
54
BUDGETED
ACTUALS
VARIANCE
55
YEAR 2015-2016
(Cr……)
1. Interested Earned 26189.57 25974.05 215.52
2. Other Income 7308.69 7108.91 199.78
3. Balance in 14074.34 13183.11 891.23

bank(Inventory)
Total 47572.6 46266.70 1306.53
BUDGETED
ACTUALS
VARIANCE
In this year, the budgeted are above the actuals. Interested Earned is high
value the budget estimates among all items and in total that shows a good budgeting
effort makes the actuals.
In revenue receipts, the budgeted are above the actuals, but with a minimum
percentage of variation as compared with previous year.
56
THE YEAR 2015-2016

No.
Operating Expenses
2. 8964.31 8594.16 370.15
3. Benefits 2996.31 2816.93 179.38
Expenses
4. 3905.34 3785.13 120.21
Depreciation
5. 2869.34 2380.27 489.07
596.67 562.44 34.23

6.
Total 36930.11 35096.08 1834.03
(Cr……)
57
BUDGETED
ACTUALS
VARIANCE
58
Interested Expanded
2016-2017 17598.14 16957.15
2016 – 2017 23259.03 22808.50
2017 – 2018 27458.19 26209.18
2018 - 2019 46514.58 44178.15
2019-2020 31259.43 30051.53
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the materiel consumption is fluctuating from 2014-
2018. So the company needs effective budget technique to get targeted actual.
59
PROVISIONS AND CONTINGENCES
2016-2017 2869.34 2380.27
2016 – 2017 3479.35 3333.37
2017 – 2018 5258.94 4873.76
2018 - 2019 6965.64 6784.10
2019-2020 8722.66 8544.56
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the consumable stores is fluctuating from 2014-2018.
The value is increased to 8544.56 in 2018 so the company needs effective budget
techniques to get targeted actual.
60
MPLOYEE REMUNERATION & BENEFITS
2016-2017 2996.31 2816.93
2016 – 2017 3608.91 3515.28
2017 – 2018 4157.58 3893.29
2018 - 2019 4354.81 4220.11
2019-2020 4936.87 4749.88
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the employee remuneration and benefits are fluctuating
from 2014 to 2018. There is an increase in the 4749.88 in 2018. So the company
should follow the same technique and also improve to get targeted actual.
61
ADMINISTRATIVE & OPERATION EXPENSES
2016-2017 3905.34 3785.13
2016 – 2017 2961.37 2888.22
2017 – 2018 3154.87 2888.22
2018 - 2019 3154.87 2888.22
2019-2020 16842.53 14631.56
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the administrative and operation expenses are
fluctuating from 2014 to 2018. There is a increase in the values in 2018 so the
company needs effective budget techniques to get targeted actual.
62
BANKING EXPENSES
2016-2017 2785.64 2510.82
2016 – 2017 2967.12 2647.25
2017 – 2018 3154.98 2986.67
2018 - 2019 3254.84 3125.54
2019-2020 3894.57 3589.67
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the Banking expenses are fluctuating from 2014-2018
there is a increase in the values in 2018. so the company should follow the same
technique and also improve to get targeted actual.
63
DEPRECIATION
2016-2017 596.67 562.44
2016 – 2017 581.37 524.53
2017 – 2018 621.47 578.21
2018 - 2019 621.47 575.97
2019-2020 783.37 658.95
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2016-2017 2016 – 2017 2017 – 2018 2018 - 2019 2019-2020
By observing the above graph the depreciation values are fluctuating from 2014-2018.
There is an increase in the values in 2018 so the company needs effective budget
techniques to get targeted actual.
64
CHAPTER-V
FINDINGS
SUGGESTIONS
CONCLUSIONS
BIBLIOGRAPHY
65
FINDINGS
 The budget and budgetary control of ICICI. Was found to be very effective
when considered all categories of items.
 In spite of having techniques many techniques of budget system, the company

is not following any of the system to control budget.
 In the 2014-2018 the total budgets value was high. Where was in the next two
years it has come down drastically.
 In all the five years budget expenditure was of high consumption a value.
 Material consumed which is one of the inputs for the production.
 It is also found that the reasons for maintaining huge stock of Banking
expenses in 2016-2017 is due to high expenses as well as the sales is also high
in the year of 2016-2017 compared to other year.
66
SUGGESTIONS
 It is recommended to the company that every item to be considered when

categorizing the items into budgets.
 As company is not using any budget techniques we can suggest the company
to follow budget techniques for better and effective budget and budgetary
control.
 Pre audit of all expenditure proposals before issue of order and to check
whether the expenditure is legitimate, approved by appropriate authority and
availability of funds for the above items.
 The budget estimations should be made that they will reach with the actual for
every year with very less variation.
 In ICICI revenue expenditure and revenue receipts are not interdependent on

each other.
 The revenue expenditure will be spent based on the production target

irrespective of the revenue receipts.
 In this proves the effective financial performance of budget department in the

organization
67
CONCLUSION
Since, all the production units in ICICI. Will run perpetually throughout the
year, there will be minimum variations in the revenue expenditure budget estimates
and actual. As the expenditure will be incurred more or less to the estimations made
by the organization.
In concern with overhead expenses, it will also be with minimum variations

between budget estimates and actual. Since the production process will be consistent.
Any change in the items of expenditure, will lead to the review in the budget
estimates by the accounts and finance department. It is also suggested to the company
that budget techniques will be very useful to control and manage cost effectively.
68
BIBLIOGRAPHY
Books referred:
 Financial Management:M.Y. Khan & P. K. Jain, Fourth edition, published

by TATA McGraw HILL.
 Financial Management:Prof. Satish Inamdar, published by Symbiosis

center for distance learning, Pune.
 Financial Management; I. M. Pandey, Second edition, published by TATA

McGraw HILL publishing company.
 Financial Management : Prasannachandra
 Management Accounting and control S.N.Maheswari
Internet sites:
 www.icici.com
 www.yahoofinance.com
 www.google.com
69

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A

Mr. MOHAMMED NAYAB PASHA

PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE

BACHELOR OF BUSINESS ADMINISTRATION

ST. JOSEPH’S DEGREE COLLEGE

(AFFILIATED TO OSMANIA UNIVERSITY)

DATE: SIGNATURE OF THE GUIDE

External Examiner Internal Examiner

I here by state that the information related to my project on BUDGETORY

Mr. MOHAMMED NAYAB PASHA

As a student of St. Joseph’s Degree College is affiliated to Osmania University. I express my

Mr. MOHAMMED NAYAB PASHA

CHAPTER -1 INTRODUCTION 1-5

NEED OF THE STUDY

OBJECTIVES OF THE STUDY

SCOPE OF THE STUDY

LIMITATIONS OF THE STUDY

CHAPTER -2 REVIEW OF LITERATURE 6-25

CHAPTER-3 INDUSTRY & COMPANY PROFILE 26-42

DATA ANALYSIS & INTERRETATION 43-64

FINDINGS , SUGGESTIONS & 65-68

"The establishment of budgets relating the responsibilities of executives to the

A budget is a quantitative expression of a plan of action relating to the forthcoming

According to Institute of Chartered Management Accountants (ICMA) England “A

The Chartered Institute of Management Accountants (CIMA) London defines

 To know about the budget and budgetary control of “ICICI.”.

 To know about the status of a company by different financial Budgetary

 To know about the present scenario of Thermal companies Investment

 To know about the present impact of budgetary control on the Financial

 To know about the fast performance to based on future Estimation of the

SCOPE OF THE STUDY

 To study the existing budgetary control method and practice at

 To analyze the budgetary system in practice in ICICI with particular reference

 To study the variations of the accruals from the budgeted estimates.

 To study the working of the financial department at ICICI.

METHODOLOGY OF THE STUDY

Research is the systematic investigation of fact that seeks to establish

 Officers of accounts sections.

 Executives and staff of financial and accounts department.

 Meeting with concerned people.

 Annual reports of ICICI. Financial management text books.

 Journals and magazines

 To study is restricted to ICICI. Co.

 To study is restricted to limited period of 45 day’s.

The main objectives of budgetary control are the follows:

He works as a coordinator among different departments and monitors the

The budget period depends upon the following considerations:

Some of the advantages of budgetary control are:

4. Tool for Measuring Performance:

10. Introduction of Incentive Schemes:

1. Establishment of budget for each function and section of the organization.

2. Executive responsibility in order to perform the specific tasks so that

4. Taking suitable remedial action to achieve the desired objective if there is a

5. Revision of budgets in the light of changed circumstances.

Definitions of Budgetary Control:

According to the Brown and Howard “Budgetary control is the system of

According to the J.Betty: “A system which uses budgets as a means of

.According to the CIMA, London, “Budgetary control is the establishment of

BUDGET, BUDGETING AND BUDGETING CONTROL