budget controll analysis

Budget & Budgetary Control Analysis in PepsiCo

PepsiCo is the world's premier consumer Products Company focused on convenience food and

beverages. Co. seek to produce healthy financial reward to investors as they provide

opportunities for growth and enrichment to our employee

PepsiCo India and its partners have invested more than U.S. $1 billion since the company was

established in the country. PepsiCo provides direct and indirect employment to 150,000 people

including suppliers and distributors

The group has built an expansive beverage and foods business. To support its operations,

PepsiCo has 43 bottling plants in India, of which 15 are company owned and 28 are franchisee

owned. PepsiCo’s business is based on its sustainability vision of making tomorrow better than

today. PepsiCo’s commitment to living by this vision every day is visible in its contribution to

the country, consumers and farmers.

This summer training internship project Budgeting System in PepsiCo gives an in-depth

knowledge of the various elements covered in budgetary control system. In this Project I have

done the actual work on Budgeted data of 2011-12 i.e. current year data. But due to some

confidentiality of the PepsiCo I have used the Budget Data of year 2010-11 i.e. last year data

The main objective of the study is to gain knowledge with the current budgetary control

system being implemented through SAP in PepsiCo. Another objective of the study is to

analyze the budget performance. For this purpose, comparison of the Expected performance

and the actual performance has been done. The study tries to highlight the important areas

which require attention and to find out reason for variances.

Ganesh S. Bhat/SIMS/MMS/2010-11 1

EXECUTIVE SUMMARY


The project will explain very clearly what a budget is the process of budgeting and budgetary

control system in PepsiCo. It will also explain the various stages in the preparation of budgets

wherein the process of preparation, approval and review will be studied and analysis of

expenses which also include variance analysis with theoretical concept.

In the preparation of the Budgets, the principle of Zero Base Budgeting is followed according

to which expenditure is required to be justified after evaluation of various alternatives and

ranking them in order of importance by systematic analysis.

The research design is exploratory. All the data gathered are secondary data. The data have

been collected from internal sources.

The brief finding of the study is that in PepsiCo, the Budgeted Estimate made By the Company

is always greater than that of the Revised Estimate in most of the cases. The Company could

achieve 80% or more of the target only in few cases.

The recommendations of this research are that corrective actions should be taken to keep

the budget within the realizable target. The management must focus more on controlling of

budget for maximum utilization of plan budget in terms of financial as well as physical

budgets.



Overview of Food Industry & Beverage industry

Introduction:

India is the second largest producer of food and holds the potential to be the biggest on global food and

agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food industry in India

comprises the food production industry and the food processing industry. The food processing industry is one

of the largest in India – it is ranked fifth in terms of production, consumption, export and expected growth.

Growth Drivers of India’s food Industry:

The growth of the food industry is driven by:

Higher disposable incomes

Change in spending pattern

Increasing organized food retailing

Increasing export opportunities

Favorable regulatory environment and Government support and investment inflows

Market Size of Indian food Industry:

The Indian food industry is projected to grow by US$ 100 billion to US$ 300 billion by 2015, according to a

report by a leading industry body and Technopak. The industry, estimated at US$ 200 billion in 2006-07, is

projected to reach US$ 300 billion by 2015. During the period, the share of processed food in value terms is

expected to increase from 43 per cent to 50 per cent.

Exports:

Exports of organic food products are expected to grow five-fold by 2015, according to the Agriculture and

Processed Food Products Export Development Authority (APEDA). The Government agency expects exports



to touch US$ 1.43 billion by 2014-15 against US$ 280 million in 2010-11.

Exports of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal products, other

processed foods and cereals stood at US$ 5.45 billion as on November 2010-2011, according to DGCIS

annual data published by APEDA.

Spice Board has revealed that the export of spices from India during 2010-11 has registered an-all-time-high

both in quantity and value. During the year, a total of 5, 25,750 tones of spices and spice products valued at

US$ 1,502.85 million were exported, as against 5, 02,750 tones valued at US$ 1,173.75 million in 2009-10.

This is an increase of 5 per cent in volume and 28 per cent in dollar terms of value.

Food Processing Industry:

Food processing Industry is one of the largest industries operating in India, and is highly fragmented.

Segments:

The Food Processing Industry operates across various segments that include:

Fruits & vegetables

Meat & poultry

Dairy

Marine products, grains and consumer foods (that includes packaged food, beverages and packaged

drinking water).

Value addition of food products is expected to increase from 8 per cent to 35 per cent by the end of 2025.

Fruit & vegetable processing is also expected to increase to 25 per cent of total production in 2025 from the

current level of 2 per cent, states the CCI report. Dairy sector – that holds highest share in processed food

market – holds large potential to be exploited. The report reveals that 37 per cent of the total dairy produce is

processed of which only 15 per cent is done by the organized sector. Hence, there still lies a lot of scope for

investment and development.

The sector has attracted foreign direct investment (FDI) worth US$ 1,253.79 million from April 2000 to April

2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP).



The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11 up to

November 2010 (8 months) is US$ 129.2 million.

Beverages: The Indian non-alcoholic drinks market was estimated at around US$ 4.43 billion in 2008 and is expected to

grow at a CAGR of around 15 per cent during 2009-2012, according to a report published by market research

firm RNCOS, titled "Indian Non-Alcoholic Drinks Forecast to 2012".

As per the report, the fruit/vegetable juice market will grow at a CAGR of around 30 per cent in value terms

during 2009-2012, followed by the energy drinks segment which will grow at a AGR of around 29 per cent

during the same period.

Investment Trends:

Dan Cake, Portugal, one of the leading names in the world of bakery and confectionery industry and

one of the largest butter cookies producers worldwide is set to enter the Indian market. For this, the

company has formed a 66:34 joint venture with Pune-based Phadnis Group.

US based McCormick & Co, a leading spice maker, will invest close to US$ 115 million in a joint

venture it will form with Kohinoor Foods Ltd, a leading marketer of branded Basmati rice and other

food products. McCormick's investment, through a Singapore-based subsidiary, will include picking

up an 85 per cent stake in the new joint venture Kohinoor Specialty Foods India Pvt. Ltd. Kohinoor

will hold the balance 15 per cent.

Quick food service restaurant chain Subway will set up 45 outlets across the country by 2011-12

entailing investment of almost US$ 9 million. The company has now 205 outlets in India and plans to

take its count to 250 by the end of this fiscal.

French dairy firm DANONE is chalking out a measured expansion plan in India. The corporation has

been in India for a little over a year and has introduced yogurt, dahi (curd) and smoothie product

range in Pune and Mumbai. It is now focusing on Hyderabad.

Players & Strategies:

Presence of numerous segments across the food industry has generated scope for the players to foray into

diversified portfolios and avenues. For instance, domestic player Dabur India ltd. deals in beverages and

culinary products and foreign company HUL offers beverages, staples, dairy and snack foods. Where on one



hand overseas firms like ITC, HUL, Britannia and Pepsi offer wide product range and quality, Indian players

like Haldirams, MTR and Parle leverage their position on competitive pricing and mass reach.

Government Initiatives:

The Indian government has approved funds for establishing 15 mega food parks across the country, Food

Processing Secretary Ashok Sinha said. In the wake of social responsibility, the Food Ministry is considering

a new law restricting the amount of food wasted at Indian weddings.The Union budget 2011-12 has also

allocated US$ 135 million to the Food Processing Ministry from the previous US$ 90 million. As a measure

to boost investment in agriculture the minister extended the Viability Gap Funding Scheme (VGFS) for public

private partnerships (PPP) for setting up modern storage capacity besides giving infrastructure status to cold

chains.

Road Ahead:

The food industry in India has taken off significantly well and will continue to grow rapidly given the

unexplored potential in the sector. The growth in this sector is not only indicative of changing development

patterns of the country, similar to the developed nations, but also the promise it holds in propelling growth of

a certain section of society that has remained constrained for a long time.The government of India had also

announced Vision 2015, which lays focus on enhancing the competitiveness of food processing industry in

both domestic as well as international markets along with ensuring stable income levels to farmers. The

Vision 2015 provides for enhancing the level of processing of perishable to 20 per cent, enhancing value

addition to 35 per cent and increasing the share in global food trade from 1.5 per cent to 3 per cent, by 2015.

In the past half-century, the food and beverage industry has blossomed from a collection of mom-and-pop

operations to a trillion-dollar powerhouse led by huge international corporations. Familiar names like

PepsiCo, Starbucks and McDonald's can be found in every corner of the globe. The overarching theme

dominating the food and beverage industry is exploding global demand and rapidly rising food prices. The

breakneck economic growth of countries such as China, India, Brazil and Vietnam gives billions of people the

ability indulge in ways previously enjoyed only by those in developed nations. A massive influx of consumers

onto the global food market has resulted in a rapid and sustained increase in food prices, stoking global

inflation.


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The related shift to ethanol and other bio-diesels in the face of rapidly rising energy prices has only

exacerbated the world's food inflation headache. Although some members of the food and beverage industry

(primarily farmers and agribusinesses) benefit from higher prices, most corporations in the industry have seen

their cost of doing business increase, biting into profit margins. These higher costs are passed, in part, onto

consumers, who find their discretionary spending restricted when they must spend a larger chunk of their

paycheck at restaurants and grocery stores. So, just as oil prices are a key economic indicator, so too are the

prices of key agricultural commodities such as corn, wheat, and soybeans.


http://www.wikinvest.com/wiki/Soybeans

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http://www.wikinvest.com/wiki/Oil_prices

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Introduction

PepsiCo, Incorporated (NYSE: PEP) is a Fortune 500, American Multinational Corporation Headquartered in Purchase, NY with interests in manufacturing and marketing a wide variety of carbonated and non-carbonated beverages, as well as salty, sweet and grain-based snacks, and other foods. PepsiCo founded in 1965 through the merger of Pepsi- Cola and Frito- Lay. PepsiCo International is comprised of all PepsiCo businesses in Europe, Asia, Africa and Australia. Historically, Pepsi-Cola began selling its products in Europe in the 1930s and expanded international beverage operations rapidly beginning in the 1950s. PepsiCo formally established an international food unit in 1973, and 30 years later, in 2003 the company combined the food and beverage businesses to form PepsiCo International. Today, the employees of PepsiCo International make, sell and deliver a variety of great tasting foods and beverages around the world, including Lay's potato chips, Doritos, Cheetos, Quaker Oats, Pepsi-Cola, Gatorade, Lipton ready to drink teas, and Tropicana juices. The company also regularly introduces unique products for local tastes.

Revenue: USD 43.25 Billion.


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More than 1,98,000 employees.

PEPSICO IN INDIA:

Chairwoman, President & CEO: Indra Krishnamurthy Nooyi

It entered India in 1989, Owns 43 bottling plants in India, 17 are company owned and 26 are franchisee

owned. Generates direct employment for more than 4000 people in India and indirect employment for 60,000

people.

PepsiCo entered India in 1989 and has grown to become one of the country’s leading food and beverage

companies. One of the largest multinational investors in the country, PepsiCo has established a business

which aims to serve the long term dynamic needs of consumers in India.

PepsiCo India and its partners have invested more than U.S. $1 billion since the company was established in

the country. PepsiCo provides direct and indirect employment to 150,000 people including suppliers and

distributors.

The group has built an expansive beverage and foods business. To support its operations, PepsiCo has 43

bottling plants in India, of which 15 are company owned and 28 are franchisee owned. In addition to this,

PepsiCo’s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo’s business is based on its

sustainability vision of making tomorrow better than today. PepsiCo’s commitment to living by this vision

every day is visible in its contribution to the country, consumers and farmers.



Company Profile

Name PepsiCo India Holding PrivateLimited (PEPSICO)

Incorporation 1989

Constitution Private Limited Company

Sector Carbonated & Non Carbonated Beverage

Industry Food & Beverage

Activities Production & Distribution

Workforce 1,98,000 employees.

Findings on the basis of history:

The ad campaign has been Indianite with a lot money being spent on advertising.

Brand has been kept alive by effective promotional schemes.

"To be the world's premier consumer Products Company focused on convenience foods and

beverages. We seek to produce healthy financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the



communities in which we operate. And in everything we do, we strive for honesty,

fairness and integrity."

PepsiCo is a world leader in convenience foods and beverages, with 2007 revenues of more

than $39 billion and more than 185,000 employees across the world. Its world renowned

brands are available in nearly 200 countries and territories.

PepsiCo entered India in 1989 and has grown to become the country’s largest selling food

and beverage companies. One of the largest multinational investors in the country, PepsiCo

has established a business which aims to serve the long term dynamic needs of consumers in

India.

PepsiCo India and its partners have invested more than U.S. $700 million since the company

was established in the country in 1989. In India, PepsiCo provides direct employment to

4,000 people and indirect employment to 60,000 people including suppliers and distributors.

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP,

Mirinda and Mountain Dew, in addition to low calorie options– Diet Pepsi and 7Up Light;

hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports drinks -

Gatorade, and 100% natural fruit juices and juice based drinks – Tropicana, Tropicana

Twister and Slice. Our local brands – Lehar Everess Soda, Dukes Lemonade and Mangola

complete our diverse spectrum of brands.

PepsiCo’s snack food company, Frito-Lay, is the leader in the branded.

The group has built an expansive beverage, snack food and exports business and to support

the operations are the group’s 38 bottling plants in India, of which 15 are company owned

and 22 are franchisee owned. In addition to this, PepsiCo’s Frito Lay snack division has 3

state of the art plants. PepsiCo’s business is based on its sustainability vision of making

tomorrow better than today. Our commitment to living by this vision every day is visible in

our contribution to our country, consumers, farmers and our people

Performance with Purpose articulates PepsiCo India's belief that its businesses are

intrinsically connected to the communities and world that surrounds it. Performance with



Purpose means delivering superior financial performance at the same time as we improve the

world.

Vision and Mission

At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do,

but the right thing to do for our business.

Our Vision

"PepsiCo's responsibility is to continually improve all aspects of the world in which we

operate - environment, social, economic - creating a better tomorrow than today." Our vision

is put into action through programs and a focus on environmental stewardship, activities to

benefit society, and a commitment to build shareholder value by making PepsiCo a truly

sustainable company.

Our Mission

Our mission is to be the world's premier consumer products company focused on convenient

foods and beverages. We seek to produce financial rewards to investors as we provide

opportunities for growth and enrichment to our employees, our business partners and the

communities in which we operate. And in everything we do, we strive for honesty, fairness and

integrity.

Performance with Purpose

At PepsiCo, we're committed to achieving business and financial success while leaving a

positive imprint on society - delivering what we call Performance with Purpose.



Our approach to superior financial performance is straightforward - drive shareholder value.

By addressing social and environmental issues, we also deliver on our purpose agenda, which

consists of human, environmental, and talent sustainability

PRODUCTS

PepsiCo nourishes consumers with a range of products from tasty treats to healthy eats that deliver

enjoyment, nutrition, convenience as well as affordability.

Beverages

PepsiCo India’s expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Nimbooz,

Mirinda and Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and

nutritional beverages such as Aquafina drinking water, isotonic sports drinks - Gatorade,

Tropicana100% fruit juices, and juice based drinks – Tropicana Nectars, Tropicana Twister

and Slice. Local brands – Lehar Evervess Soda, Dukes Lemonade and Mangola add to the

diverse range of brands.

Foods

PepsiCo’s food division, Frito-Lay, is the leader in the branded salty snack market and all Frito Lay

products are free of trans-fat and MSG. It manufactures Lay’s Potato Chips, Cheetos extruded



snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The

company’s high fiber breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance

the healthful choices available to consumers. Frito Lay’s core products, Lay’s, Kurkure Uncle

Chipps and Cheetos are cooked in Rice Bran Oil to significantly reduce saturated fats and all of its

products contain voluntary nutritional labeling on their packets.

MANAGEMENT STRUCTURE

The Management Structure of PepsiCo India Holdings Pvt. Ltd. is given below:


Top Management (Plant Manager)

Account Section

Production & Maintenance Dept

Purchase Dept. Personnel & Admin Dept.

Quality Control & Inspection Dept.

Shipping & Distribution

Store Dept.

Management Representative & Training


PEP Revenues by Segment:


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PepsiCo is the largest snack and non-alcoholic drink producer in the United States, with 39% and 25% of

the respective market shares. The fall in net income was attributable to two reasons. First, PepsiCo

recognized a $346 million mark-to-market loss on derivatives used to hedge its commodity exposure.

Next, the company incurred restructuring costs of $543 million in relation to its Productivity for Growth

program.

Operating Segments:

PepsiCo operates in six divisions:

Frito-Lay North America (29% of Revenue, 43% of Operating Income):

Manufactures markets and sells branded snacks. Popular products include Lay's Potato Chips, Doritos

Tortilla Chips, Cheetos, Rold Gold Pretzels, and SunChips. Following the company's purchase of Pepsi

Bottling Group (PBG) and Whitman (PAS), company executives have said that it will lead to increased

joint marketing, bundling the company's snack and beverage offerings.

Quaker Foods North America (4% of Revenue, 8% of Operating Income):

Manufactures markets and sells cereals, rice, pasta and other branded products. Popular products

include Quaker Oatmeal, Aunt Jemima mixes and syrups, Cap n' Crunch cereal, Rice-A-Roni, and

Life cereal.

Latin America Foods (14% of Revenue, 13% of Operating Income):

Manufactures markets and sells a number of leading salty and sweet snack brands. Popular products

include Gamesa, Doritos, Cheetos, and Ruffles.

PepsiCo Americas Beverages (25% of Revenue, 29% of Operating Income):

Manufactures markets and sells beverage concentrates, fountain syrups and finished goods, under

various beverage brands. Popular products include Pepsi, Mountain Dew, Gatorade, Tropicana, and

Izze.

United Kingdom & Europe (15% of Revenue, 10% of Operating Income):


include Lay's, Walker's, Doritos, and Cheetos.


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Middle East, Africa, and Asia (13% of Revenue, 8% of Operating Income):


include Lay's, Smith's, Doritos, and Cheetos.

Key developments of PepsiCo

Grupo Embotelladoras Unidas SAB de CV Receives Authorization for Business

Integration and New Company with PepsiCo Inc and Polmex Holdings SL

Group Embotelladoras Unidas SAB de CV announced that on August 31, 2011 it received an

authorization from its shareholders to carry out the operation with Pepsico Inc and Polmex

Holdings SL, under which they will integrate the beverage business of the Pepsi Bottling Group

Mexico S de RL de CV and its subsidiaries and Gatorade de Mexico (composed of Productos

Gatorade de Mexico S de RL de CV, Gatorade de Mexico S de RL de CV and Servicios

Operativos Gatorade de Mexico S de RL de CV) with Geusa SA de CV. As a result, the first

beverage company with national coverage will be created. The operation was approved by the

Federal Competition Commission on August 23, 2011 and its completion is expected on

September 30, 2011.



PepsiCo Inc. Raises FY 2011 EPS Guidance

PepsiCo Inc. updated its fiscal 2011 earnings per share (EPS) guidance and expects high-single-

digit earnings per share growth on a core, 52-week basis, including an estimated foreign

exchange translation benefit of approximately 2 percentage points, from its fiscal 2010 core EPS

of $4.13. The current guidance compares to the Company's previous fiscal 2011 guidance of 7%-

8% core constant currency EPS growth and an estimated 1 to 2 percentage point benefit from

foreign exchange. The Company's updated guidance reflects higher uncertainty regarding

macroeconomic and consumer trends for 2011 and anticipates high global commodity cost

inflation and ongoing support of strategic initiatives in emerging markets and of its brand-

building activities. According to I/B/E/S Estimates, analysts were expecting the Company to

report EPS of $4.50 for fiscal 2011.

PepsiCo Inc. Plans Mexico Beverage Joint Venture With Grupo Embotelladoras-DJ

Dow Jones reported that PepsiCo Inc. plans to form a nationwide beverage company in Mexico

through a joint-venture with bottler Grupo Embotelladoras Unidas SAB and Venezuelan food

and drink producer Empresas Polar. Pepsi said the venture would combine its Mexican beverage

manufacturing and distribution operations with those of Grupo Embotelladoras unit GEUSA,

which is a Pepsi bottler.

PepsiCo Inc. To Buy Remaining Stake In Russia's Wimm-Bill-Dann Foods-DJ

Dow Jones reported that PepsiCo Inc. plans to exercise an option to acquire the remaining stake

of Russian dairy products and juice maker Wimm-Bill-Dann Foods that it doesn't already own,

marking the completion of its second major foray into the Russian market. Late last year,

PepsiCo Inc. agreed to purchase a 66% stake in Russia's food and beverage business for about

$3.8 billion. PepsiCo Inc. was expected to buy the remaining stake at a future date. Pepsi said

ordinary shareholders would be entitled to receive 3,883.70 Russian rubles $139.33) per ordinary

share. Holders of the American Depositary Shares will receive RUB970.025 per ADS, subject to

conversion and payable in U.S. dollars. The deal, which is expected to close by September,



follows Pepsi's move in 2008 to pay $1.4 billion for control of Russian juice producer

Lebedyansky.

East Capital Explorer AB (publ) Accepts PepsiCo Inc.'s Subsidiary Buyout Offer for

Wimm-Bill-Dann Foods OJSC

East Capital Explorer AB (publ) announced that it has accepted PepsiCo's subsidiary's buyout

offer to purchase its holding in Wimm-Bill-Dann Foods OJSC. East Capital Explorer realized an

annualized pre-tax return of 17.4% on its initial EUR 6.8 million investment (39.7% pre-tax IRR

when measured in the transaction currency USD). The buyout offer by PepsiCo was required in

accordance with Russian law after it received approval to acquire 66% of Wimm-Bill-Dann for a

price USD 132 per common share. After the buyout, East Capital Explorer received EUR 7.4

million which is available for future investments.

Overview of Finance Department.

Financial management is a key tool in controlling and directing the resources of any business

organization. Managers--not only financial professionals but also managers whose responsibilities

are largely non-financial--can use this tool to generate and analyze the financial information that is

essential to decision making in business. Understanding the principles of financial management

helps all managers, from line supervisors to senior executives, to use this tool more effectively to

support the organization's goals. This course introduces non-financial managers to the principles of

financial management. It explores the basic concepts of risk and return and time value of the money.

Functions of Finance Department in Organization



1. Estimation of capital requirements: A finance manager has to make estimation with

regards to capital requirements of the company. This will depend upon expected costs and

profits and future programmers and policies of a concern. Estimations have to be made in an

adequate manner which increases earning capacity of enterprise.

2. Determination of capital composition: Once the estimation have been made, the capital

structure have to be decided. This involves short- term and long- term debt equity analysis.

This will depend upon the proportion of equity capital a company is possessing and

additional funds which have to be raised from outside parties.

3. Choice of sources of funds: For additional funds to be procured, a company has many

choices like-

a. Issue of shares and debentures

b. Loans to be taken from banks and financial institutions

c. Public deposits to be drawn like in form of bonds.

Choice of factor will depend on relative merits and demerits of each source and period of

financing.

4. Investment of funds: The finance manager has to decide to allocate funds into profitable

ventures so that there is safety on investment and regular returns is possible.

5. Disposal of surplus: The net profits decision have to be made by the finance manager. This

can be done in two ways:

a. Dividend declaration - It includes identifying the rate of dividends and other benefits

like bonus.

b. Retained profits - The volume has to be decided which will depend upon expansion,

innovation, diversification plans of the company.

6. Management of cash: Finance manager has to make decisions with regards to cash

management. Cash is required for many purposes like payment of wages and salaries,

payment of electricity and water bills, payment to creditors, meeting current liabilities,

maintenance of enough stock, purchase of raw materials, etc.

7. Financial controls: The finance manager has not only to plan, procure and utilize the funds

but he also has to exercise control over finances. This can be done through many techniques

like ratio analysis, financial forecasting, cost and profit control, etc.



Financial performance of last Five years

Income statement 05 years summary (in $ Millions )

2010 2009 2008 2007 2006

Revenue 57,838.00 43,232.00 43,251.00 39,474.00 35,137.00

Total Revenue 57,838.00 43,232.00 43,251.00 39,474.00 35,137.00

Cost of Revenue, Total 26,575.00 20,099.00 20,351.00 18,038.00 15,762.00

Gross Profit 31,263.00 23,133.00 22,900.00 21,436.00 19,375.00

Selling/General/

Administrative Expenses,

Total

22,326.00 14,612.00 15,489.00 14,196.00 12,711.00

Research & Development 488 414 388 0 0

Depreciation/Amortization 117 63 64 58 162


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Interest Expense (Income), Net

Operating

0 0 0 0 0

Unusual Expense (Income) 0 0 0 0 0

Other Operating Expenses,

Total

0 0 0 0 0

Operating Income 8,332.00 8,044.00 6,959.00 7,182.00 6,502.00

Interest Income (Expense), Net

Non-Operating

0 0 0 0 0

Gain (Loss) on Sale of Assets 0 0 0 0 0

Other, Net 0 0 0 0 0

Income Before Tax 8,232.00 8,079.00 7,045.00 7,643.00 6,989.00

Income Tax - Total 1,894.00 2,100.00 1,879.00 1,973.00 1,347.00

Income After Tax 6,338.00 5,979.00 5,166.00 5,670.00 5,642.00

Minority Interest -18 -33 -24 12 0

Equity In Affiliates 0 0 0 0 0

U.S. GAAP Adjustment 0 0 0 0 0

Net Income Before Extra.

Items

6,320.00 5,946.00 5,142.00 5,682.00 5,642.00

Total Extraordinary Items 0 0 0 0 0

Net Income 6,320.00 5,946.00 5,142.00 5,682.00 5,642.00

Total revenue:

The total revenue of the Company has increased from 35,137.00 in year 2006 to 57,838.00 in the

year2010. It increased by 64.60%.



2010 2009 2008 2007 2006

57,838.00

43,232.00 43,251.0039,474.00

35,137.00

Revenue (in $ million)

Net Income:

Net profit /Net income after Tax has increased from $ 5642 million in 2006 to $ 6320 in the year

2010.Its increased by around 15%.



2010 2009 2008 2007 2006

6,320.005,946.00

5,142.005,682.00 5,642.00

Net income (in $ million)

Growth Rates %Growth Rates % Company Industry S&P 500

Sales (Qtr vs year

ago qtr) 13.7 32 16

Net Income (Qtr vs

year ago qtr) 17.6 16.6 63.2

Sales (5-Year Annual

Avg.) 12.18 9.82 8.18

Net Income (5-Year

Annual Avg.) 9.23 14.72 8.69

Dividends (5-Year

Annual Avg.) 13.35 9.65 5.62



Sales (Qtr vs year ago qtr)

Net Income (Qtr vs year ago qtr)

Sales (5-Year Annual Avg.)

Net Income (5-Year Annual

Avg.)

Dividends (5-Year Annual

Avg.)

0

10

20

30

40

50

60

70

Growth(in %)

CompanyIndustryS&P 500

The table & chart indicates the growth of sales of the Company, Industry & S&P 500 in the terms of

percentage.

The growth of sales of the Co. is 13.70% & S&P500 is 16% where as Industry growth rate is 32

%.

Net Income of (5 yrs. Avg.) of Co. is 9.23 %, Industry Net income (5 yrs. Avg.) is 14.72 %,

where S&P500 is 8.69 %.

Dividend (5-Year Annual Avg.) of the Company is higher than Industry & S&P500, which is 13.35

% as compare to 9.65 % & 5.62 % respectively.

Activity process flow chart


Receive Purchase Indent From Production



Check with Stock List

Supplier Registration

Issue P.O. For Raw Material

List of Approved Suppliers

Supplier EvaluationPrepare GIN for Raw material

Prepare the GRN

Raw Material Inspected by Q & I Dept.

Return material to supplier with GRN and RRN

Not select

Select

IdentificationStore R.M. at Storage Dept.

Raw material issue slipIssue Raw material for Production Dept.

Update stock


RESEARCH METHODOLOGY

1. Research Design : Exploratory Research

2. Data Collection Method : Secondary Data Collection Method

3. Operational Area of Study: Plant Budgeting.(PepsiCo.)

OBJECTIVES OF STUDY

To learn and understand the budget forecast, activity planning, preparation of budget,

monitoring and controlling of budget.

Analyze the company’s performance

To understand use of SAP in budgeting process of PepsiCo.

Determining the amount of different types of Expenditure and estimating the

expenditure of future requirements.

To analyze variance of actual performance with the target set.



BUDGETING AND

BUDGETARY CONTROL ANALYSIS

Budgeting is used by businesses as a method of financial planning for the future. Budgets are

prepared for main areas of the business – purchases, sales, production, labour, debtors, creditors,

cash – and provide detailed plans of the business for the next three, six or twelve months. The focus

of this project is the cash budget.

In this project I observed:

• The benefits of budgets and budgetary control

• The limitations of budgets and budgetary control

• The preparation and use of cash budgets

Introduction to budgets

Businesses need to plan for the future. In large businesses such planning is very formal while, for

smaller businesses, it will be less formal. Planning for the future falls into three time scales:

• Long-term: from about three years up to, sometimes, as far as twenty years ahead

• Medium-term: one to three years ahead

• Short-term: for the next year

Clearly, planning for these different time scales needs different approaches: the further on in time,

the less detailed are the plans. In the medium and longer term, a business will establish broad

business objectives. Such objectives do not have to be formally written down, although in a large

business they are likely to be. In smaller businesses, objectives will certainly be considered and

discussed by the owners or managers. Planning takes note of these broader business objectives and

sets out how these are to be achieved in the form of detailed plans known as budgets.

What is a budget?



A budget is a financial plan for a business, prepared in advance.

A budget may be set in money terms, e.g. a sales budget of £500,000, or it can be expressed in terms

of units, e.g. a purchases budget of 5,000 units to be bought.

Budgets can be income budgets for money received, e.g. a sales budget, or expenditure budgets for

money spent, e.g. a purchases budget.

The budget we shall be focusing on in this chapter is the cash budget, which combines both income

and expenditure, estimating what will happen to the bank balance during the time period of the

budget. Most budgets are prepared for the next financial year (the budget period), and are usually

broken down into shorter time periods, commonly four-weekly or monthly. This enables budgetary

control to be exercised over the budget: the actual results can be monitored against the budget, and

discrepancies between the two can be investigated and corrective action taken where appropriate.

Benefits of budgets and budgetary control

Budgets provide benefits both for the business, and also for its managers and other staff:

The budget assists planning

By formalizing objectives through a budget, a business can ensure that its plans are achievable. It

will be able to decide what is needed to produce the output of goods and services, and to make sure

that everything will be available at the right time.

The budget communicates and co-ordinates

Because a budget is agreed by the business, all the relevant managers and staff will be working

towards the same end. When the budget is being set, any anticipated problems should be resolved

and any areas of potential confusion clarified. All departments should be in a position to play their

part in achieving the overall goals.

The budget helps with decision-making



By planning ahead through budgets, a business can make decisions on how much output – in the

form of goods or services – can be achieved. At the same time, the cost of the output can be planned

and changes can be made where appropriate.

The budget can be used to monitor and control

An important reason for producing a budget is that management is able to use budgetary control to

monitor and compare the actual results (see diagram below). This is so that action can be taken to

modify the operation of the business as time passes, or possibly to change the budget if it becomes

unachievable.

The budget can be used to motivate

A budget can be part of the techniques for motivating managers and other staff to achieve the

objectives of the business. The extent to which this happens will depend on how the budget is agreed

and set, and whether it is thought to be fair and achievable. The budget may also be linked to

rewards (for example, bonuses) where targets are met or exceeded.

Limitations of budgets and budgetary control


BUDGET FIGURES

ACTUAL FIGURECONTROL AND TAKE ACTION

MONITOR AND COMPARE


Whilst most businesses will benefit from the use of budgets, there are a number of limitations of

budgets to be aware of:

The benefit of the budget must exceed the cost:

Budgeting is a fairly complex process and some businesses – particularly small ones – may find that

the task is too much of a burden in terms of time and other resources, with only limited benefits.

Nevertheless, many lenders – such as banks – often require the production of budgets as part of the

business plan. As a general rule, the benefit of producing the budget must exceed its cost.

Budget information may not be accurate:

It is essential that the information going into budgets should be as accurate as possible. Anybody can

produce a budget, but the more inaccurate it is, the less use it is to the business as a planning and

control mechanism. Great care needs to be taken with estimates of sales – often the starting point of

the budgeting process – and costs. Budgetary control is used to compare the budget against what

actually happened – the budget may need to be changed if it becomes unachievable.

The budget may demotivate:

Employees, who have had no part in agreeing and setting a budget which is imposed upon them, will

feel that they do not own it. As a consequence, the staff may be demotivated. Another limitation is

that employees may see budgets as either a ‘carrot’ or a ‘stick’, ie as a form of encouragement to

achieve the targets set, or as a form of punishment if targets are missed.

Budgets may lead to disfunctional management:

A limitation that can occur is that employees in one department of the business may over-achieve

against their budget and create problems elsewhere. For example, a production department might

achieve extra output that the sales department finds difficult to sell. To avoid such dysfunctional



management, budgets need to be set at realistic levels and linked and co-ordinate across all

departments within the business.

Budgets may be set at too low a level:

Where the budget is too easy to achieve it will be of no benefit to the business and may, in fact, lead

to lower levels of output and higher costs than before the budget was established. Budgets should be

set at realistic levels, which make the best use of the resources available.

Budgetary planning

Many large businesses take a highly formal view of planning the budget and make use of:

• A budget manual, which provides a set of guidelines as to who is involved with the budgetary

planning and control process, and how the process is to be conducted

• A budget committee, which organizes the process of budgetary planning and control; this

Committee brings together representatives from the main functions of the business –

E.g. production, sales, administration – and is headed by a budget co-coordinator whose job is to

administer and oversee the activities of the committee. In smaller businesses, the process of planning

the budget may be rather more informal, with the owner or manager overseeing and budgeting for all

the business functions.

Whatever the size of the business it is important, though, that the planning process begins well

before the start of the budget period; this then gives time for budgets to be prepared, reviewed,

redrafted, and reviewed again before being finally agreed and submitted to the directors or owners

for approval.

Budgeting Process

The following budgeting process involves the participation of all the senior staff in the whole

organization.

1. The senior management held a meeting to discuss and set the future directions of the company.

2. The key financial information such as future business targets are identified.

3. Taking cue from the business plans, a deadline for the completion of the budgets is determined.



4. The Finance head will start the preparation process by accumulating the historical financial data

and put them in the templates similar to the existing financial statements.

5. The budget templates are then further extended to departmental or cost centres levels.

6. The business targets and the templates are distributed to the various departmental heads which

consist of both Finance and non Finance managers. All the managers are required to prepare their

budgets for their respective areas and devise business plan on how to achieve them.

7. The Finance manager will collect all the completed templates from the respective departmental

managers and compile into a master budget.

8. Once the master budget is ready, the Finance manager will present it to the senior management.

The above processes can be summarized into 4 main steps as follows:

1 Set Business Targets

2 Accumulate Historical Data

3 Prepare Business Plans and Strategies

4 Compile into Master Budget



Types of Budgets:

For Finance Executives, it is necessary to be familiar with the various types of budgets to understand

the whole picture. The types of budgets include master, operating (for income statement items

comprised of revenue and expenses), financial (for balance sheet items), cash, static (fixed), flexible,

capital expenditure (facilities), and program (appropriations for specific activities such as research

and development, and advertising). These budgets are briefly explained below.

Master Budget:

A master budget is an overall financial and operating plan for a forthcoming calendar or fiscal year.

It is usually prepared annually or quarterly. The master budget is really a number of sub budgets tied

together to summarize the planned activities of the business. The format of the master budget

depends on the size and nature of the business.

Operating and Financial Budgets:

The operating budget deals with the costs for merchandise or services produced. The financial

budget examines the expected assets, liabilities, and stockholders' equity of the business. It is needed

to see the company's financial health.

Cash Budget:

The cash budget is for cash planning and control. It presents expected cash inflow and outflow for a

designated time period. The cash budget helps management keep cash balances in reasonable

relationship to its needs and aids in avoiding idle cash and possible cash shortages. The cash budget

typically consists of four major sections:

1. Receipts section, which is the beginning cash balance, cash collections from customers, and other

receipts

2. Disbursement section comprised of all cash payments made by purpose

3. Cash surplus or deficit section, showing the difference between cash receipts and cash payments

4. Financing section, providing a detailed account of the borrowings and repayments expected

during the period.



Sections of a cash budget

A cash budget consists of three main sections:

• Receipts for the month

• Payments for the month

• Summary of bank account

Receipts are analyzed to show the amount of money that is expected to be received from cash sales,

debtors, sale of fixed assets, capital introduced/issue of shares, loans received etc.

Payments show how much money is expected to be paid in respect of cash purchases, creditors,

expenses (often described in cash budgets as operating expenses), purchases of fixed assets,

repayment of capital/shares and loans. Note that non-cash expenses (such as depreciation and

doubtful debts) are not shown in the cash budget.

The summary of the bank account at the bottom of the cash budget shows net cash flow (total

receipts less total payments) added to the bank balance at the beginning of the month, and resulting

in the estimated closing bank balance at the end of the month. An overdrawn bank balance is shown

in brackets.

The main difficulty in the preparation of cash budgets lies in the timing of receipts and payments –

for example, debtors may pay two months after date of sale, or creditors may be paid by the business

one month after date of purchase: it is important to ensure that such receipts and payments are

recorded in the correct month column.

Static (Fixed budget):

The static (fixed) budget is budgeted figures at the expected capacity level. Allowances are set forth

for specific purposes with monetary limitations. It is used when a company is relatively stable.

Stability usually refers to sales. The problem with a static budget is that it lacks the flexibility to

adjust to unpredictable changes. In industry, fixed budgets are appropriate for those departments

whose workload does not have a direct current relationship to sales, production, or some other

volume determinant related to the department's operations. The work of the departments is

determined by management decision rather than by sales volume. Most administrative, general

marketing and even manufacturing management departments are in this category. Fixed



appropriations for specific projects or programs not necessarily completed in the fiscal period also

become fixed budgets to the extent that they will be expended during the year.

Examples are appropriations for capital expenditures, major repair projects, and specific advertising

or promotional programs.

Study of budgeting in PepsiCo

Budgets are planned for specific sections of the business: these budgets can then be controlled by a

budget holder, who may be the manager or supervisor of the specific section. Such budgets include:

• Purchases budget – what the business needs to buy to make/supply the goods it expects to sell

• Sales budget – what the business expects to sell

• Production budget – how the business will make/supply the goods it expects to sell

• Labor budget – the cost of employing the people who will make/supply the goods

• Debtor budget – how much the business will receive from credit sales

• Creditor budget – how much the business will pay for credit purchases

• Cash budget – how much money will be flowing in and out of the bank account

The end result of the budgeting process is often the production of a master budget, which takes the

form of forecast operating statements – forecast trading and profit and loss account – and forecast

balance sheet. The master budget is the ‘master plan’ which shows how all the other budgets ‘work

together’.



Material description

Basic Cost ED VAT Freight Unload Tran. Ins. Octroi

Service

tax Total

CAMERA VISION

SYSTEM 38160.00

96,2

96.76

128,90

2.10 57,851.26 321210.12

SERVO BASED

REJECTION

MECHANISUM 324360.00

33,4

09.08

44,72

1.14 22,579.70 425069.92

DATA LOGGING

SYSTEM CAMERA

VISION 38160.00

3,9

30.48 5,261.31 2656.44 50008.23

UPS SYSTEM FOR

DATE LOGGING. 38160.00

3,9

30.48 5,261.31 2656.44 50008.23

Autoscrubber elect.

M/c 253687.01

31,71

0.88 1,000.00 14,062.79 300460.68

tASKI vACUMAT22

230V/50HZ 33481.49

4,18

5.19 500 1,896.48 40063.16

HIGH PRESSURE

WATER JET 71679.12

8,95

9.89 500 3,997.35 85136.36

TASKI DORSALINO

230V 50 HZ 39911.62

4,98

8.95 500 2,250.14 47650.71

PICOBELLO 151 36765.91

4,59

5.74 500 2,077.13 43938.78

0.00

PCC ROOM PIPE

WORKS 300000.00 300000.00

0.00

FILLED

INSPECTION

STATION 969000.00

121,12

5.00

20,000.0

0 10,901.25 62,278.02 1183304.27

Installation &

Commissioning 25000.00

2,5

75.00

2,57

5.00 30150.00

0.00

Testo 875-2 thermal

imager 284050.00

35,50

6.25 319556.25

0.00

SPEED RETARDER 63240.00

7,90

5.00 71145.00


Expected cost for different material categories during the year 2010-11:


CONVEX MIRROR 9800.00

1,22

5.00 11025.00

0.00

ISMB 200 68580.00

3,42

9.00 72009.00

ISMC 120 X 75 184140.00

9,20

7.00 193347.00

ISMC 200 41760.00

2,08

8.00 43848.00

ISMC 100 X 50 86940.00

4,34

7.00 91287.00

MS PLATE GUSSET

12 MM THK 40500.00

2,02

5.00 42525.00

TOE GUARD MS

FLAT 22500.00

1,12

5.00 23625.00

ISA 75 X 75 X 6 MM 7335.00

36

6.75 7701.75

ROD 16 MM DIA 2250.00

11

2.50 2362.50

CHARGER PLATE 4

MM. 91520.00 4,576.00 96096.00

RAILLING PIPE 32

NB 110550.00 5,527.50 116077.50

MS ELBOW 32 NB 16200.00 810 17010.00

M 16 NUT BOLTS 60

MM 1440.00 72 1512.00

ANCHORE BOLT 16

X 100 MM LONG 3840.00 192 4032.00

CHAIN PULLY

BLOCK 12000.00 1,500.00 13500.00

CHAIN PULLY

TROLLY 6600.00 825 7425.00

fabrication & erection

monorail at CT 478827.00 49,319.18

49,31

9.18 577465.36

11 STAGE APEC

PANEL -300 KVR 588000.00 73,500.00

10,000.0

0 34,108.80 705608.80

6 STAGE APFC

PANEL 100 KVAR 125440.00 NA 7,037.18 132477.18

BIO-WASTE

CONVERTER 452189.00 0 452189.00

0.00

Providing & laying 171995.00 8,599.75 17,715.49 198310.24


Budget & Budgetary Control Analysis in PepsiCocaustic storage faci

0.00

15 S MULTIMETER 20662.50 2,582.81 23245.31

DIGITAL

INSULATION

TESTER 16169.00 2,021.13 18190.13

AC TONG TESTER 22562.50 2,820.31 25382.81

PORTABLE POWER

ANALYSER 104500.00 NA 104500.00

MOTOR CHEKER 15675.00 NA 15675.00

0.00

Receiver & liquid line

valve 504400.00 63,050.00 7,000.00 28,512.00 602962.00

0.00

Revamping of UASB

ETP 820000.00 102,500.00 922500.00

Erection &

commissioning 60000.00

6,1

80.00 6,180.00 72360.00

0.00

FABRICATION &

INSTALLATION HP

MONORAIL 328080.00

33,7

92.24 33,792.24 395664.48

0.00

ISMB 250 40284.00 1,611.36 41895.36

ISMC 150 X 75 110700.00 4,428.00 115128.00

MS PLATE 12 MM

THK 5625.00 225 5850.00

ISMC 100 X 50 19872.00 794.88 20666.88

MS FLAT 100 X 6

MM 11925.00 477 12402.00

ISA 75 X 75 X 6 MM 7344.00 293.76 7637.76

ROD 16 MM DIA 2250.00 90 2340.00

CHAQUIRE PLATE 4

MM 60320.00 2,412.80 62732.80

RAILING PIPE 32

NB. 56100.00 2,244.00 58344.00

MS ELBOW. 6300.00 252 6552.00

M 16 NUT BOLT 600.00 24 624.00

anchor bolt 16 x 100

mm 1600.00 64 1664.00

CHAIN PULLY. 36000.00 4,500.00 40500.00

CHAIN PULLY 13000.00 1,625.00 14625.00


Budget & Budgetary Control Analysis in PepsiCoTROLY.

0.00

UG TANK FENCING

WORK 131560.00 5,262.40 136822.40

0.00

BOILER SAFETY &

EFF MONITORING

SYS. 1124379.00 140,547.38

10,000.0

0 71523.37 1346449.75

0.00

Heavy duty platform

trolly 10 Feet 192000.00 24,000.00 11,880.00 227880.00

Tltable tower ladder

ES-TTL-H 40 Feet 225000.00 28,125.00

25,000.0

0 15,296.88 293421.88

Maintenance Trolley

ES-MTHD_H 6 feet 151200.00 18,900.00 9,355.50 179455.50

LADDER FIBER 18

FEET 69000.00 8,625.00 4,269.38 81894.38

0.00

ENERGY SAVER 3

PH 415 VOLTS 50 HZ 240000.00

4,8

00.00

10,000.0

0 14,564.00 4,800.00 274164.00

INSTALLATION &

COMM 10000.00

1,0

30.00 1,030.00 12060.00

0.00

MCC CONTROL

PANEL WITH DOL

STARTER 887400.00 110,925.00 3,000.00 56,174.34 1057499.34

0.00

Equalisation pump

KGEC 14-8 35162.56 1,758.13 2,062.73 38983.42

Equalisation pump

Motor 27358.00 3,419.75 1,723.25 32501.00

Equalisation pump

Access & Matching

Flan 17286.87 2,160.86 972.06 20419.79

UASB PUMP KGEC

12B-5 29152.52 1,457.63 1,710.17 32320.32

UASB PUMP KGEC

12B-5 MOTOR. 14535.21 1,816.90 918.13 17270.24

UASB PUMP

ACCESS & FLANGE 13219.37 1,652.42 744.63 15616.42

CLARIFIER PUMP

FRE 80-210 118195.38 5,909.77

6,

933.66 131038.81

CLARIFIER PUMP 19609.41 2,451.18 1,231.23 23291.82


Budget & Budgetary Control Analysis in PepsiCoMOTOR

CLARIFIER PUMP

ACCESS & FLANGE 19320.62 2,415.08 1,080.27 22815.97

GARDENING PUMP

KGEC 16-6 36736.38 1,836.82 2,155.06 40728.26

GARDENING PUMP

MOTOR 27358.00 3,419.75 1,717.75 32495.50

GARDENING PUMP

ACCESS & FLANG 17286.87 2,160.86 966.56 20414.29

Tursury treatment

pump CN 40-160 35360.54 1,768.03 2,074.34 39202.91

Tursury treatment

pump MOTOR. 17842.08 2,230.26 1,120.26 21192.60

Tursury treatment

pump ACCESS &

FLANGE 15253.12 1,906.64 852.84 18012.60

wATER PUMP KGEC

16-6 36736.38 1,836.82 2,155.06 40728.26

wATER PUMP KGEC

16-6 MOTOR 27358.00 3,419.75 1,717.75 32495.50

wATER PUMP KGEC

ACCESS & FLANGE 17286.87 2,160.86 966.56 20414.29

Mechnical Seal cn 40-

160 17286.87 2,160.86 966.56 20414.29

0.00

light curtain 31500.00 3,937.50 35437.50

AF 20MR D 11700.00 1,462.50 13162.50

POWER SUPPLY

PS230 2700.00 337.5 3037.50

0.00

M & w COUNTER

COMPLETE SET 22145.00 2,768.13 1,000.00 1,327.98 27241.11

RELAY 24 V 875.50 109.44 48.15 1033.09

0.00

DIGITAL ENERGY

METER E 1000 6175.00 771.88 6946.88

DIGITAL ENERGY

METER ENTITY

VER 1.0 16458.75 2,057.34 18516.09

DIGITAL ENERGY

METER ENTITY

VER 1.0 3135.00 391.88 3526.88


Budget & Budgetary Control Analysis in PepsiCoDIGITAL ENERGY

METER ENTITY

VER 1.0 9975.00 1,246.88 11221.88

DIGITAL LOAD

MANAGER 11400.00 1,425.00 12825.00

ENERGY METER

WITH PANEL 8075.00 1,009.38 9084.38

CURRENT

TRANSFORMER 5700.00 712.5 6412.50

WIRING OF

ENERGY METER 1425.00 178.13 1603.13

MAKING CUTOUT

WIRING 19950.00 2,493.75 22443.75

0.00

PROVIDING &

FIXING EYE

WASHER 164227.00 0 164227.00

0.00

Blower

fitting,cabeling,civil

work 189000.00 NA 189000.00

0.00

Providing & laying

PVC strip door 272363.52 0 272363.52

0.00

MCC CONTROL

PANAEL FOR WR

PLANT 770355.00 96,294.38 5,000.00 48899.53 920548.91

DRONA PCH CHAIR. 177574.32 22,196.79 - 1217970.12

KAREENA CHAIR

GODREJ. 43140.11 5,392.51 48532.62

motor gaurd 10 HP 6897.00 862.13 7759.13

MOTOR GAURD 7.5

HP 1024.10 128.01 1152.11

MOTOR GAURD

0.75 HP 2037.75 254.72 2292.47

MOTOR GAURD 3

HP 950.00 118.75 1068.75

MOTOR GAURD 3.7

KW 1024.10 128.01 1152.11

MOTOR GAURD 15 4284.50 535.56 4820.06


Budget & Budgetary Control Analysis in PepsiCoKW

MOTOR GAURD

11KW 6897.00 862.13 7759.13

WTP PANEL

WIRING &

INSTALLATION 640788.00 53,666.00 21,780.38 716234.38

DISCONNECTING

AND REMOVING

WTP PANEL 35000.00

3,6

05.00 3,605.00 42210.00

MIS

CONDITIONIONG

OF ELECTRICAL 693922.00 58,115.97 23586.41 775624.38

Installation,

commissioning and

Painting 34413.60

3,2

13.60 3213.6 40840.80

ETP Electrification 1415368.00 118,537.07 48108.35 1582013.42

Installation,

commissioning and

Painting 162951.00

16,7

83.95 16,783.95 196518.90

E 1000 DIGITAL

ENERGY METER 24700.00 3,087.50 27787.50

LOAD MANAGER 17100.00 2,137.50 19237.50

WIRING ENERGY

METER 8550.00 1,068.75 9618.75

SELF CONTAINED

BRATHING

APPARATUS SET. 1.00 1,000.00 1001.00

SOFTNER TANK

GUTTER SLOPE

WORK 283000.00 0.00 283000.00

M.S. PIPE 2''. 96200.00 4,810.00 101010.00

M.S. PIPE 3''. 7380.00 369 7749.00

M.S ELBOW 2 ''. 114.00 5.7 119.70

M.S ELBOW 3''. 274.00 13.7 287.70

M.S SHEET

8MM(205KG PER

SHEET). 18450.00 922.5 19372.50

ANCHOR FASTNER

6'' LENGTH. 8000.00 400 8400.00

WHITE BOARD4 X4. 3440.00 430 3870.00

AIR 85333.32 10,666.67 95999.99


Budget & Budgetary Control Analysis in PepsiCoCONDITIONING.

INSTALLATION 30000.00 0 30000.00

ADAPTOR/PISTON

NUT SPANNER

1903587413 340.76 42.6 383.36

ENERGY SERVICE

PANEL 8911.00

91

7.83 917.83 10746.66

BOILER SAFETY &

EFF MONITORING

SYS. 1124379.00

115,8

11.14 155,023.77

10,000.0

0 2,092.82 78832.5 1486139.23

Receiver & liquid line

valve 504400.00 63,050.00 7,000.00 28,512.00 602962.00

400.00 0 400.00

Electric Forklift truck -

Drum Lifter 1021900.00

3,1

57.65 141,289.08 7,000.00 70,323.10 1243669.83

BATTERY

CHARGER 43800.00 5,475.00 2,409.00 51684.00

Safety system solution 450000.00

60,7

50.00 60,750.00

10,000.0

0 22500 30,428.75 634428.75

FABRICATATION &

INSTALLATION 73300.00

7,5

49.90 7,549.90 88399.80

IBR APPROVED

MATERIAL FOR

AUTOMATIC BLOW 54100.00 2,705.00 56805.00

IBR APPROVED

MATERIAL FOR

PIPE LINE 40800.00 2,040.00 42840.00

ETP UPGRATION

WORK - MOTOR

PUMP MODIFICA 115000.00 0.00 115000.00

HI WALL TYPE

SPLIT UNIT 24888.89 3,111.11 1,368.89 29368.89

HI WALL TYPE

SPLIT UNIT 101337.00 12,667.13 5,573.54 119577.67

ERECTION

CHARGES 61287.00

6,3

12.56 6,312.56 73912.12

supply of cabling REF 20940.00 2,617.50 1,151.70 24709.20

supply of cabling ref

piping for 2 TR 98000.00 12,250.00 5,390.00 115640.00

PROJECTOR LV

7280 XGA 42000.00 5,250.00 47250.00

PANEL -300 KVR

pannel unloading

13500.00 0.00 13500.00


Budget & Budgetary Control Analysis in PepsiCocharges

4 square mm,4 core

cable 45600.00 2,280.00 47880.00

32 A MCB with box,2

pole socket and top 2460.00 307.5 2767.50

25A MCB with box 2

pole socket 4920.00 615 5535.00

SERVICES 61400.00 0.00 61400.00

MS FLAT

300*16MM. 13000.00 650.00 13650.00

SELF CONTAINED

BRATHING

APPARATUS SET. 45400.00 5,675.00 1,000.00 52075.00

CC TV SYSTEM SET 31289.00 3,911.13 35200.13

Installation charges 3520.00 0.00 3520.00

Expected

Cost/Expenditure

20810160.4

2

453,3

64.85

1,976,60

8.44 130000 22500 12,994.07

731,361.2

1

247,26

9.89 24384258.88

Material description Basic ED VAT Freight

Unload

Ch

Insuranc

e Octroi

Service

tax Total

CAMERA VISION

SYSTEM

SERVO BASED

REJECTION

MECHANISUM

DATA LOGGING

SYSTEM CAMERA

VISION

UPS SYSTEM FOR DATE

LOGGING.

Autoscrubber elect. M/c

243,9

35.00 30,491.88 274,426.88

tASKI vACUMAT22 33,4 22,254.13 55,735.62


Actual cost/Experience occurred during the year2010-11:

Budget & Budgetary Control Analysis in PepsiCo230V/50HZ 81.49

HIGH PRESSURE WATER

JET

71,6

79.12 22,254.13 93,933.25

TASKI DORSALINO 230V

50 HZ

39,9

11.62 22,254.13 62,165.75

PICOBELLO 151

32,9

60.80 22,254.13 55,214.93

-

PCC ROOM PIPE WORKS 3,00,000 0.00 -

-

FILLED INSPECTION

STATION -

Installation &

Commissioning -

-

Testo 875-2 thermal imager 2,84,050 35,506.25 35,506.25

SPEED RETARDER -

CONVEX MIRROR -

ISMB 200

68,5

80.00 35935.41 104,515.41

ISMC 120 X 75

184,1

40.00 184,140.00

ISMC 200

41,7

60.00 41,760.00

ISMC 100 X 50

86,9

40.00 86,940.00

MS PLATE GUSSET 12

MM THK

35,1

53.10 35,153.10

TOE GUARD MS FLAT

22,5

00.00 22,500.00

ISA 75 X 75 X 6 MM

7,3

35.00 7,335.00

ROD 16 MM DIA

2,2

50.00 2,250.00

CHARGER PLATE 4 MM.

915,1

00.00 915,100.00

RAILLING PIPE 32 NB

110,5

50.00 110,550.00

MS ELBOW 32 NB

16,2

00.00 16,200.00

M 16 NUT BOLTS 60 MM 1,4 1,440.00


Budget & Budgetary Control Analysis in PepsiCo40.00

ANCHORE BOLT 16 X

100 MM LONG

3,8

40.00 Total 3,840.00

CHAIN PULLY BLOCK

12,0

00.00 12,000.00

CHAIN PULLY TROLLY

6,6

00.00 Balance 6,600.00

-

fabrication & erection

monorail at CT

487,8

24.00 49318.87 537,142.87

-

11 STAGE APEC PANEL -

300 KVR -

6 STAGE APFC PANEL

100 KVAR -

-

BIO-WASTE

CONVERTER

452,1

89.00 0 452,189.00

-

Providing & laying caustic

storage faci -

-

15 S MULTIMETER

20,6

62.50 4603.94 25,266.44

DIGITAL INSULATION

TESTER

16,1

69.00 4603.94 20,772.94

AC TONG TESTER -

PORTABLE POWER

ANALYSER

104,5

00.00 13062.5 117,562.50

MOTOR CHEKER

15,6

75.00 1959.38 17,634.38

-

Receiver & liquid line valve -

-

Revamping of UASB ETP

820,0

00.00 102500 922,500.00

Erection & commissioning -

FABRICATION &

INSTALLATION HP

MONORAIL

328,0

79.78 33792.22

ISMB 250 38,0 17637


Budget & Budgetary Control Analysis in PepsiCo25.00

ISMC 150 X 75

110,7

00.00

MS PLATE 12 MM THK

5,6

25.00

ISMC 100 X 50

7,4

25.00

MS FLAT 100 X 6 MM

8,7

75.00

ISA 75 X 75 X 6 MM

3,6

00.00

ROD 16 MM DIA

2,2

50.00

CHAQUIRE PLATE 4 MM

46,8

00.00

RAILING PIPE 32 NB.

56,1

00.00

MS ELBOW.

6,3

00.00

M 16 NUT BOLT

6

00.00

anchor bolt 16 x 100 mm

1,6

00.00

CHAIN PULLY.

36,0

00.00

CHAIN PULLY TROLY.

13,0

00.00

UG TANK FENCING

WORK

BOILER SAFETY & EFF

MONITORING SYS.

Heavy duty platform trolly

10 Feet

192,0

00.00 79650 11880

Tltable tower ladder ES-

TTL-H 40 Feet

225,0

00.00 25000 15296.88

Maintenance Trolley ES-

MTHD_H 6 feet

151,2

00.00 9355.5

LADDER FIBER 18 FEET

69,0

00.00 2894.62


Budget & Budgetary Control Analysis in PepsiCoENERGY SAVER 3 PH 415

VOLTS 50 HZ

240,0

00.00 4800 10000 14564

INSTALLATION &

COMM

10,0

00.00

MCC CONTROL PANEL

WITH DOL STARTER

753,5

14.80 0

Equalisation pump KGEC

14-8

35,1

62.56 0 2062.73

Equalisation pump Motor

27,3

58.00 0 1723.25

Equalisation pump Access

& Matching Flan

17,3

89.87 0 972.06

UASB PUMP KGEC 12B-5

29,1

52.52 0 1710.17

UASB PUMP KGEC 12B-5

MOTOR.

14,5

35.21 18.16.90 918.13

UASB PUMP ACCESS &

FLANGE

13,2

19.37 1652.42 744.63

CLARIFIER PUMP FRE

80-210

118,1

95.38 0 6933.66

CLARIFIER PUMP

MOTOR

19,6

09.41 0 1231.23

CLARIFIER PUMP

ACCESS & FLANGE

19,3

20.62 0 1080.27

GARDENING PUMP

KGEC 16-6

36,7

36.38 0 2155.06

GARDENING PUMP

MOTOR

27,3

58.00 0 1717.75

GARDENING PUMP

ACCESS & FLANG

17,2

80.87 966.56

Tursury treatment pump CN

40-160

35,3

60.54 0 2074.34

Tursury treatment pump

MOTOR.

17,8

42.08 0 1120.26

Tursury treatment pump

ACCESS & FLANGE

15,2

53.12 852.847

wATER PUMP KGEC 16-6

36,7

36.38 2155.06

wATER PUMP KGEC 16-6 27,3 0 1717.75



MOTOR 58.00

wATER PUMP KGEC

ACCESS & FLANGE

17,2

86.87 0 966.56

Mechnical Seal cn 40-160

17,2

86.87 0 966.56

32068.877

light curtain

31,5

00.00 5737.5

AF 20MR D

11,7

00.00

POWER SUPPLY PS230

2,7

00.00

M & w COUNTER

COMPLETE SET

22,1

45.00 461.41 950

RELAY 24 V

8

75.00

DIGITAL ENERGY

METER E 1000

6,1

75.00 9992.84

DIGITAL ENERGY

METER ENTITY VER 1.0

14,107.50

2,3

51.25

DIGITAL ENERGY


3,135.00

DIGITAL ENERGY


9,975.00

DIGITAL LOAD

MANAGER

11,4

00.00

ENERGY METER WITH

PANEL

8,0

75.00

CURRENT

TRANSFORMER

5,7

00.00

WIRING OF ENERGY

METER

1,4

25.00

MAKING CUTOUT

WIRING

19,9

50.00

PROVIDING & FIXING

EYE WASHER

164,2

25.00 0

Blower fitting,cabeling,civil



work

Providing & laying PVC

strip door

272,3

63.52 0

MCC CONTROL PANAEL

FOR WR PLANT

770,3

55.00 0 49794

DRONA PCH CHAIR.

86,2

50.38 27589.3

91,3

23.94

KAREENA CHAIR

GODREJ.

34,5

12.09

8,6

28.02

motor gaurd 10 HP

6,8

97.00 2889.31

MOTOR GAURD 7.5 HP

1,0

24.10

MOTOR GAURD 0.75 HP

2,0

37.75

MOTOR GAURD 3 HP

9

50.00

MOTOR GAURD 3.7 KW

1,0

24.10

MOTOR GAURD 15 KW

4,2

84.50

MOTOR GAURD 11KW

6,8

97.00

WTP PANEL WIRING &

INSTALLATION

DISCONNECTING AND

REMOVING WTP PANEL

MIS CONDITIONIONG OF

ELECTRICAL

Installation, commissioning

and Painting

ETP Electrification

15,3

68.00 166645.42 16783.95

Installation, commissioning

and Painting

162,9

51.00

E 1000 DIGITAL ENERGY

METER

12,3

50.00 1543.75

17,1

00.00 3681.25



LOAD MANAGER

17,1

00.00 3681.25

12,3

50.00 3681.25

WIRING ENERGY

METER

8,5

50.00 1068.75

SELF CONTAINED

BRATHING APPARATUS

SET.

SOFTNER TANK

GUTTER SLOPE WORK

283,0

00.00 0

M.S. PIPE 2''.

96,2

00.00 5179

M.S. PIPE 3''.

7,3

80.00

M.S ELBOW 2 ''.

1

14.00 419.4

M.S ELBOW 3''.

2

74.00

M.S SHEET 8MM(205KG

PER SHEET).

ANCHOR FASTNER 6''

LENGTH.

8,0

00.00

WHITE BOARD4 X4.

3,4

40.00 430

AIR CONDITIONING.

ADAPTOR/PISTON NUT

SPANNER 1903587413

3

40.76 528.57

ENERGY SERVICE

PANEL

8,9

11.00 917.83

BOILER SAFETY & EFF

MONITORING SYS.

Receiver & liquid line valve

Electric Forklift truck -

Drum Lifter

BATTERY CHARGER

Safety system solution

FABRICATATION &

INSTALLATION

IBR APPROVED

MATERIAL FOR

AUTOMATIC BLOW


Budget & Budgetary Control Analysis in PepsiCoIBR APPROVED

MATERIAL FOR PIPE

LINE

ETP UPGRATION WORK

- MOTOR PUMP

MODIFICA

HI WALL TYPE SPLIT

UNIT

HI WALL TYPE SPLIT

UNIT

ERECTION CHARGES

supply of cabling REF

supply of cabling ref piping

for 2 TR

PROJECTOR LV 7280

XGA

42,0

00.00 5250

PANEL -300 KVR pannel

unloading charges

13,5

00.00 0

4 square mm,4 core cable

45,6

00.00 3202.5

32 A MCB with box,2 pole

socket and top

2,4

60.00

25A MCB with box 2 pole

socket

4,9

20.00

SERVICES

MS FLAT 300*16MM.

SELF CONTAINED

BRATHING APPARATUS

SET.

CC TV SYSTEM SET

Installation charges

Actual

Cost/Expenditure 9,065,3

07.17

- 747429.66 35950 167922.754 16783.95 4,220,374.32



I have taken last year’s data (eg.2010-11) for the analysis of Budget of the PepsiCo Because of some

Confidentiality of the Company

Expenses Head

expected

Expenditure

Actual

Expenditure Variances

Basic cost 20,810,160.42 41,009,760.84 -20,199,600.42

Edu.Cess 453,364.85 41,047,920.84 -40,594,555.99

Vat 1,976,608.44 747,429.66 -20,199,600.42

Fright 130,000.00 260,000.00 -130,000.00

Unload ch. 22,500.00 0.00 22,500.00

Trans. Insrnce 12,994.07 0.00 12,994.07

Octroi 731,361.21 1,404,871.16 -673,509.95

Service Tax 247,269.89 494,539.78 -247,269.89

Total 24,384,258.88 4,220,374.32 -20,199,600.42



Basic

cost

Edu.C

ess

Vat

Fright

Unloa

d ch.

Trans

. Ins

rnce

Octrai

Serv

ice T

axTot

al0.00

5,000,000.00

10,000,000.00

15,000,000.00

20,000,000.00

25,000,000.00

30,000,000.00

35,000,000.00

40,000,000.00

45,000,000.00

Expenditure 2010-11

Expeted cost

Actual Exp. Cost

Zero-based budgeting:

The PepsiCo follows Zero-Based Budgeting Technique for preparation of the Company budget.

The technique of zero base budgeting provides a solution for overcoming the limitations of

traditional budgeting by enabling top management to focus on priorities, key areas and alternatives

of action throughout the organization.

Zero base budgeting, as the term suggests, examines or reviews a program or function or

responsibility from ’scratch’, The reviewer proceeds on the assumption that nothing is to be allowed.

The manager proposing the activity has, therefore, to justify that the activity is essential and the

various amounts asked for are reasonable taking into account the outputs or results or volume of

activity envisaged. No activity or expense is allowed simply because it was being allowed or done in

the past. Thus, according to this technique each program, whether new or existing, must be justified

in its entirety each time a new budget is formulated.



Advantages:

i. dealing with practically all elements of managers’ budget requests

ii. critical examination of ongoing activities along with the newly proposed activities

iii. Providing each manager a range of choices in setting priorities in respect of different

activities and in allocating resources.

iv. Efficient allocation of resources, as it is based on needs and benefits rather than history.

v. Drives managers to find cost effective ways to improve operations.

vi. Detects inflated budgets.

vii. Increases staff motivation by providing greater initiative and responsibility in decision-

making.

viii. Increases communication and coordination within the organization.

ix. Identifies and eliminates wasteful and obsolete operations.

x. Identifies opportunities for outsourcing.

xi. Forces cost centers to identify their mission and their relationship to overall goals.

xii. It helps in identifying areas of wasteful expenditure and, if desired, it can also be used for

suggesting alternative courses of action.

Disadvantages:

I. More time-consuming than incremental budgeting.

II. Justifying every line item can be problematic for departments with intangible outputs.

III. Requires specific training, due to increased complexity vs. incremental budgeting.

IV. In a large organization, the amount of information backing up the budgeting process may be

overwhelming.



Limitation of the study:

This study work was based on primary data collected from available source. The study area was limited to

Mumbai and the findings may not be applicable to other markets, as vast difference exists among the

consumers with regard to demographic and psychographic characteristics.

i. The study has not been intended on a very large scale, have the possibility of errors, which cannot be

ruled out.

ii. Time was restricted to the 8 weeks had been found inadequate to gain the knowledge &

gather sufficient information about the financial operation of the Company.

iii. Due to some sort of confidentiality of the PepsiCo, the management unable to disclose

Extract Figures of Variances and some other Financial Data

iv. There are other factors which affect to the budgeting & operation process such inflation,

unavailability of row material.

v. Some of the respondents were not co-operative & many seem to be having no interest.



RECOMMENDATIONS AND SUGGESTIONS:

After the visit and while preparing this report I think there are certain things that the company should

take care of.

1) The budget should be review properly on monthly and quarterly basis to analyze

the flow of operation process.

It has been witnessed that the actual targets achieved year on year basis, vary widely from the

budgeted estimates and revised estimates. In lieu of this anomaly, it can be said that the month and

quarter wise physical targets breakups and corresponding budget allocations need to be fixed with a

clear vision and proper planning.

2) Better response towards market volatility

In the recent volatile market condition high fluctuating food & beverage prices indicate that

expecting a hundred percent accuracy in line with the estimates is harsh on the company. However if



predetermined response system is in place then market volatility won’t remain a deterrent and the

company would be better prepared to achieve its projected aggressive guidance.

3) Accountability of the fund centre

The reason of the unachievement or underachievement of physical targets in a given year is due to

the late release or lack of sufficient funds at various fund centers. Thus for faster achievement of

targets smooth flow of funds is required which can only be implemented when the various fund

centre are held accountable. The availability of the fund should review by the fund centre monthly

and quarterly basis.

4) Budgeted estimates preparation should more realistic in the nature

The Budgeted estimates that are prepared for the next year allocations need to make on more

realistic assumption through proper forecasting of the future market trends and availability of R&D

and technology during the period for which the estimates are being made. It should based on the

capability of the Company to achieve target goal.

5) Channelize the whole process through Use of SAP

Budget is meant more for controlling than for meeting financial needs as and when they arise.

Therefore proper control mechanism needs to be installed which can minimize deviations in

practicality. The budget software presently being used at PepsiCo just fixes the initial outlays and

targets. These targets are then fed into the SAP software in order to monitor the achieved progress.

This creates duplicity in the budget preparation. Some of the Workers are not that much expert to

handle the SAP software. So its need to give proper training to the workers. Hence a better option

would be to channelize the whole process of budget preparation and operation through SAP only as

this software provides lesser room for deviations and hence better monitoring.

6) Proper monitoring of all services-In

Order to have micro monitoring in place, proper supervision of each service can be helpful. The

overall achievement, overachievement or underachievement records of the organization help, but if

proper achievement has to be monitored then performance of each service type needs to be done.



7) Focus of control – negative or positive variances

A matter of practical importance that has drawn frequent comment is the nearly universal tendency

to focus control effort on minimizing negative variances, in spite of the intellectual recognition that

equal effort applied to maximizing positive variances might be more productive.

8) Forecasting for Activity Cost Control

Company should focus upon future revenues, future costs and technical problems. Due to the high

competition in the market, manager should focus on the optimum utilization of the available source

of fund. For this purpose, traditional financial accounting schemes are not adequate to reflect the

dynamic nature of a project. Accounts typically focus on recording routine costs and past

expenditures associated with activities.

9) Give priorities to the important works:

The manager should foretaste the priorities of works to be done in the future which is essential for

the business growth & expansion. Because some of the projects which not has been complete during

the financial year will affect to the revenue of the Company. Otherwise it will block the available

fund.



Conclusion

With the project subject title Budget & Budgetary Control Analysis, in PepsiCo we conclude

that Budgeting is the essential part of the every business organization. Budgeting helps to

calculate the estimated expenditure, revenue for the future period of organization. Preparation

of the budget is very essential part of the organization. So it necessary it should be prepare

appropriately with the proper analysis of past records & financial data. While budget is

prepare the manager should focus on future goals & aims of the company which helps to know

the key area which need to improve for growth & expansion of the company. For the growth &

expansion of the Business manager should prepare in the real manner on the basis of External

Environment Factor which always affect to the business.



BIBLIOGRAPHY

I took certain references and various help while preparing the project. The Google was the main

source from where we found the information. The list of URLs used for the reference is listed below:

www.pepsiCo.com

www.pepsiCoindia,com

www.wikipedia.com

www.encyclopedia.com


http://www.pepsiCoindia,com

http://www.encyclopedia.com/

http://www.wikipedia.com/

http://www.pepsiCo.com/

budget controll analysis

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