Budget & Budgetary Control Analysis in PepsiCo

EXECUTIVE SUMMARY

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. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos 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.

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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.

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Budget & Budgetary Control Analysis in PepsiCo

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 Indias 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.

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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.

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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 [Link] 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 [Link] 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. 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

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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, PepsiCola, Gatorade, Lipton ready to drink teas, and Tropicana juices. The company also regularly introduces unique products for local tastes.
Revenue: USD 43.25 Billion. More than 1,98,000 employees.

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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 countrys 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, PepsiCos Frito Lay foods division has 3 state-of-the-art plants. PepsiCos business is based on its sustainability vision of making tomorrow better than today. PepsiCos commitment to living by this vision every day is visible in its contribution to the country, consumers and farmers.

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Budget & Budgetary Control Analysis in PepsiCo

Company Profile
Name Incorporation Constitution Sector Industry Activities Workforce
PepsiCo India Holding PrivateLimited (PEPSICO) 1989

Private Limited Company

Carbonated & Non Carbonated Beverage

Food & Beverage

Production & Distribution 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.

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Budget & Budgetary Control Analysis in PepsiCo

PepsiCo entered India in 1989 and has grown to become the countrys 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 Indias 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.

PepsiCos 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 groups 38 bottling plants in India, of which 15 are company owned and 22 are franchisee owned. In addition to this, PepsiCos Frito Lay snack division has 3 state of the art plants. PepsiCos 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.

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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

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Budget & Budgetary Control Analysis in PepsiCo

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 Indias 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

PepsiCos 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 Lays Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the Kurkure and Lehar brands. The companys high fiber breakfast cereal, Quaker Oats, and low fat and roasted snack options enhance the healthful choices available to consumers. Frito Lays core products, Lays, 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.
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Budget & Budgetary Control Analysis in PepsiCo

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

Top Management (Plant Manager)

Management Representative & Training

Account Section

Production & Maintenance Dept

Purchase Dept.

Personnel & Admin Dept.

Quality Control & Inspection Dept.

Shipping & Distribution

Store Dept.

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PEP Revenues by Segment:

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. Ganesh S. Bhat/SIMS/MMS/2010-11 15

Budget & Budgetary Control Analysis in PepsiCo

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): Manufactures markets and sells a number of leading salty and sweet snack brands. Popular products include Lay's, Walker's, Doritos, and Cheetos. Middle East, Africa, and Asia (13% of Revenue, 8% of Operating Income): Manufactures markets and sells a number of leading salty and sweet snack brands. Popular products include Lay's, Smith's, Doritos, and Cheetos.

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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-singledigit 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 brandbuilding 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
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Budget & Budgetary Control Analysis in PepsiCo

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.

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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 likea. 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.

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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.

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Budget & Budgetary Control Analysis in PepsiCo

Financial performance of last Five years Income statement 05 years summary (in $ Millions )
2010 Revenue Total Revenue 57,838.00 57,838.00 2009 43,232.00 43,232.00 2008 43,251.00 43,251.00 2007 39,474.00 39,474.00 2006 35,137.00 35,137.00

Cost of Revenue, Total Gross Profit

26,575.00 31,263.00

20,099.00 23,133.00

20,351.00 22,900.00

18,038.00 21,436.00

15,762.00 19,375.00

Selling/General/Administrative 22,326.00 Expenses, Total Research & Development Depreciation/Amortization 488 117

14,612.00

15,489.00

14,196.00

12,711.00

414 63 0

388 64 0

0 58 0

0 162 0

Interest Expense (Income), Net 0 Operating Unusual Expense (Income) Other Total Operating Income 8,332.00 Operating 0

0 0

0 0

0 0

0 0

Expenses, 0

8,044.00

6,959.00

7,182.00

6,502.00

Interest Income (Expense), Net 0 Non-Operating Gain (Loss) on Sale of Assets Other, Net Income Before Tax 0 0 8,232.00

0 0 8,079.00

0 0 7,045.00

0 0 7,643.00

0 0 6,989.00

Income Tax - Total Income After Tax

1,894.00 6,338.00

2,100.00 5,979.00

1,879.00 5,166.00

1,973.00 5,670.00

1,347.00 5,642.00

Minority Interest

-18

-33

-24

12

0 21

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

Budget & Budgetary Control Analysis in PepsiCo Equity In Affiliates U.S. GAAP Adjustment 0 0 0 0 5,946.00 0 0 5,142.00 0 0 5,682.00 0 0 5,642.00

Net Income Before Extra. 6,320.00 Items

Total Extraordinary Items Net Income

0 6,320.00

0 5,946.00

0 5,142.00

0 5,682.00

0 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%.

Revenue (in $ million)

57,838.00 43,232.00 43,251.00

39,474.00

35,137.00

2010

2009

2008

2007

2006

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Net Income:

Net profit /Net income after Tax has increased from $ 5642 million in 2006 to $ 6320 in the year [Link] increased by around 15%.

Net income (in $ million)

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

2010

2009

2008

2007

2006

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

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 Annual Avg.) (5-Year 13.35 9.65 5.62 9.23 14.72 8.69 12.18 9.82 8.18 17.6 16.6 63.2 13.7 32 16

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Growth(in %)
70 60 50 40 30 20 10 0 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 (5Year Annual Avg.) Company Industry S&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.

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

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Budget & Budgetary Control Analysis in PepsiCo

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

Prepare GIN for Raw material

Supplier Evaluation

Prepare the GRN

Raw Material Inspected by Q & I Dept.

Not select Return material to supplier with GRN and RRN Select

Store R.M. at Storage Dept.

Identification

Issue Raw material for Production Dept.

Raw material issue slip

Update stock

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Budget & Budgetary Control Analysis in PepsiCo

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 companys 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.

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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.
BUDGET FIGURES

CONTROL AND TAKE ACTION

ACTUAL FIGURE

MONITOR AND COMPARE

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.

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Budget & Budgetary Control Analysis in PepsiCo

Limitations of budgets and budgetary control

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

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Budget & Budgetary Control Analysis in PepsiCo

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.
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Budget & Budgetary Control Analysis in PepsiCo

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

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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
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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

Expected cost for different material categories during the year 2010-11:
Material description Basic Cost ED VAT Freight Unload Tran. Ins. Octroi Service tax Total

CAMERA SYSTEM SERVO REJECTION

VISION 38160.00 BASED 96,296.76 128,902.10 57,851.26 321210.12

MECHANISUM DATA SYSTEM VISION UPS SYSTEM FOR DATE LOGGING. LOGGING CAMERA

324360.00

33,409.08

44,721.14

22,579.70

425069.92

38160.00

3,930.48

5,261.31

2656.44

50008.23

38160.00

3,930.48

5,261.31

2656.44

50008.23

Autoscrubber M/c

elect. 253687.01 31,710.88 1,000.00 14,062.79 300460.68

tASKI vACUMAT22 230V/50HZ HIGH PRESSURE 71679.12 8,959.89 500 3,997.35 85136.36 33481.49 4,185.19 500 1,896.48 40063.16

WATER JET TASKI DORSALINO 230V 50 HZ

39911.62

4,988.95

500

2,250.14

47650.71

PICOBELLO 151

36765.91

4,595.74

500

2,077.13

43938.78 0.00

PCC

ROOM

PIPE 300000.00 300000.00 0.00

WORKS

FILLED INSPECTION STATION Installation Commissioning & 25000.00 2,575.00 2,575.00 30150.00 0.00 Testo 875-2 thermal imager 284050.00 35,506.25 319556.25 0.00 969000.00 121,125.00 20,000.00 10,901.25 62,278.02 1183304.27

SPEED RETARDER

63240.00

7,905.00

71145.00

CONVEX MIRROR

9800.00

1,225.00

11025.00

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

36

Budget & Budgetary Control Analysis in PepsiCo

0.00

ISMB 200

68580.00

3,429.00

72009.00

ISMC 120 X 75

184140.00

9,207.00

193347.00

ISMC 200

41760.00

2,088.00

43848.00

ISMC 100 X 50 MS PLATE GUSSET 12 MM THK TOE FLAT GUARD MS

86940.00

4,347.00

91287.00

40500.00

2,025.00

42525.00

22500.00

1,125.00

23625.00

ISA 75 X 75 X 6 MM

7335.00

366.75

7701.75

ROD 16 MM DIA CHARGER PLATE 4 MM. RAILLING PIPE 32 NB MS ELBOW 32 NB M 16 NUT BOLTS 60 MM ANCHORE BOLT 16 X 100 MM LONG CHAIN BLOCK CHAIN TROLLY PULLY PULLY

2250.00

112.50

2362.50

91520.00

4,576.00

96096.00

110550.00 16200.00

5,527.50 810

116077.50 17010.00

1440.00

72

1512.00

3840.00

192

4032.00

12000.00

1,500.00

13500.00

6600.00

825

7425.00

fabrication & erection monorail at CT 11 STAGE APEC 588000.00 73,500.00 10,000.00 34,108.80 705608.80 478827.00 49,319.18 49,319.18 577465.36

PANEL -300 KVR 6 STAGE APFC

PANEL 100 KVAR BIO-WASTE CONVERTER

125440.00

NA

7,037.18

132477.18

452189.00

452189.00 0.00

Providing

&

laying 171995.00 8,599.75 17,715.49 198310.24 0.00

caustic storage faci

15 S MULTIMETER DIGITAL INSULATION

20662.50

2,582.81

23245.31

16169.00

2,021.13

18190.13

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Budget & Budgetary Control Analysis in PepsiCo

TESTER AC TONG TESTER PORTABLE POWER ANALYSER MOTOR CHEKER 104500.00 15675.00 NA NA 104500.00 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 Erection commissioning & 60000.00 6,180.00 6,180.00 72360.00 0.00 FABRICATION & 820000.00 102,500.00 922500.00 22562.50 2,820.31 25382.81

INSTALLATION HP MONORAIL 328080.00 33,792.24 33,792.24 395664.48 0.00 ISMB 250 ISMC 150 X 75 MS PLATE 12 MM THK ISMC 100 X 50 MS FLAT 100 X 6 MM ISA 75 X 75 X 6 MM ROD 16 MM DIA CHAQUIRE PLATE 4 MM RAILING NB. MS ELBOW. M 16 NUT BOLT anchor bolt 16 x 100 mm CHAIN PULLY. CHAIN TROLY. PULLY 13000.00 1,625.00 14625.00 0.00 UG TANK FENCING WORK 131560.00 5,262.40 136822.40 0.00 BOILER SAFETY & EFF SYS. MONITORING 1124379.00 140,547.38 10,000.00 71523.37 1346449.75 1600.00 36000.00 64 4,500.00 1664.00 40500.00 PIPE 32 56100.00 6300.00 600.00 2,244.00 252 24 58344.00 6552.00 624.00 60320.00 2,412.80 62732.80 11925.00 7344.00 2250.00 477 293.76 90 12402.00 7637.76 2340.00 5625.00 19872.00 225 794.88 5850.00 20666.88 40284.00 110700.00 1,611.36 4,428.00 41895.36 115128.00

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Budget & Budgetary Control Analysis in PepsiCo

0.00 Heavy duty platform trolly 10 Feet Tltable tower ladder ES-TTL-H 40 Feet Maintenance Trolley 151200.00 18,900.00 9,355.50 179455.50 225000.00 28,125.00 25,000.00 15,296.88 293421.88 192000.00 24,000.00 11,880.00 227880.00

ES-MTHD_H 6 feet LADDER FIBER 18 FEET

69000.00

8,625.00

4,269.38

81894.38 0.00

ENERGY SAVER 3 PH 415 VOLTS 50 HZ INSTALLATION COMM & 10000.00 1,030.00 1,030.00 12060.00 0.00 MCC CONTROL 240000.00 4,800.00 10,000.00 14,564.00 4,800.00 274164.00

PANEL WITH DOL STARTER 887400.00 110,925.00 3,000.00 56,174.34 1057499.34 0.00 Equalisation KGEC 14-8 Equalisation Motor Equalisation Access Flan UASB PUMP KGEC 12B-5 UASB PUMP KGEC 12B-5 MOTOR. UASB PUMP 13219.37 1,652.42 744.63 15616.42 14535.21 1,816.90 918.13 17270.24 29152.52 1,457.63 1,710.17 32320.32 pump pump 27358.00 3,419.75 1,723.25 32501.00 pump 35162.56 1,758.13 2,062.73 38983.42

& Matching 17286.87 2,160.86 972.06 20419.79

ACCESS & FLANGE CLARIFIER FRE 80-210 CLARIFIER MOTOR CLARIFIER PUMP PUMP PUMP

118195.38

5,909.77

6,933.66

131038.81

19609.41

2,451.18

1,231.23

23291.82

ACCESS & FLANGE GARDENING PUMP KGEC 16-6 GARDENING PUMP MOTOR GARDENING PUMP ACCESS & FLANG Tursury treatment

19320.62

2,415.08

1,080.27

22815.97

36736.38

1,836.82

2,155.06

40728.26

27358.00

3,419.75

1,717.75

32495.50

17286.87

2,160.86

966.56

20414.29

pump CN 40-160

35360.54

1,768.03

2,074.34

39202.91

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Budget & Budgetary Control Analysis in PepsiCo

Tursury treatment 17842.08 2,230.26 1,120.26 21192.60 pump MOTOR. Tursury pump treatment ACCESS & 15253.12 1,906.64 852.84 18012.60

FLANGE wATER PUMP KGEC 16-6 wATER PUMP KGEC 16-6 MOTOR wATER PUMP KGEC ACCESS & FLANGE Mechnical Seal cn 40160

36736.38

1,836.82

2,155.06

40728.26

27358.00

3,419.75

1,717.75

32495.50

17286.87

2,160.86

966.56

20414.29

17286.87

2,160.86

966.56

20414.29 0.00

light curtain AF 20MR D POWER PS230 SUPPLY

31500.00 11700.00

3,937.50 1,462.50

35437.50 13162.50

2700.00

337.5

3037.50 0.00

M & w COUNTER COMPLETE SET RELAY 24 V 22145.00 875.50 2,768.13 109.44 1,000.00 1,327.98 48.15 27241.11 1033.09 0.00 DIGITAL ENERGY 6175.00 771.88 6946.88

METER E 1000 DIGITAL METER VER 1.0 ENERGY ENTITY

16458.75

2,057.34

18516.09

DIGITAL METER VER 1.0 DIGITAL METER VER 1.0 DIGITAL MANAGER ENERGY

ENERGY ENTITY 3135.00 ENERGY ENTITY 9975.00 LOAD 11400.00 METER 8075.00 1,009.38 9084.38 1,425.00 12825.00 1,246.88 11221.88 391.88 3526.88

WITH PANEL CURRENT TRANSFORMER WIRING ENERGY METER MAKING WIRING CUTOUT OF

5700.00

712.5

6412.50

1425.00

178.13

1603.13

19950.00

2,493.75

22443.75 0.00

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Budget & Budgetary Control Analysis in PepsiCo

PROVIDING FIXING WASHER & EYE 164227.00 0 164227.00 0.00 Blower fitting,cabeling,civil work 189000.00 NA 189000.00 0.00 Providing & laying 272363.52 0 272363.52 0.00 MCC CONTROL

PVC strip door

PANAEL FOR WR PLANT DRONA PCH CHAIR. 770355.00 177574.32 96,294.38 22,196.79 5,000.00 48899.53 920548.91 1217970.12

KAREENA GODREJ.

CHAIR 43140.11 5,392.51 48532.62

motor gaurd 10 HP MOTOR GAURD 7.5 HP MOTOR GAURD 0.75 HP MOTOR GAURD 3 HP MOTOR GAURD 3.7 KW MOTOR GAURD 15 KW MOTOR 11KW WTP WIRING INSTALLATION DISCONNECTING AND REMOVING PANEL & GAURD

6897.00

862.13

7759.13

1024.10

128.01

1152.11

2037.75

254.72

2292.47

950.00

118.75

1068.75

1024.10

128.01

1152.11

4284.50

535.56

4820.06

6897.00

862.13

7759.13

640788.00

53,666.00

21,780.38

716234.38

WTP PANEL MIS CONDITIONIONG OF ELECTRICAL Installation, commissioning Painting ETP Electrification Installation, and

35000.00

3,605.00

3,605.00

42210.00

693922.00

58,115.97

23586.41

775624.38

34413.60 1415368.00 162951.00

3,213.60 118,537.07

3213.6 48108.35 16,783.95

40840.80 1582013.42 196518.90

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Budget & Budgetary Control Analysis in PepsiCo

commissioning Painting E 1000 DIGITAL 24700.00 3,087.50 27787.50 and 16,783.95

ENERGY METER

LOAD MANAGER

17100.00

2,137.50

19237.50

WIRING METER SELF

ENERGY 8550.00 1,068.75 9618.75

CONTAINED

BRATHING APPARATUS SET. SOFTNER GUTTER WORK M.S. PIPE 2''. M.S. PIPE 3''. M.S ELBOW 2 ''. M.S ELBOW 3''. M.S 8MM(205KG SHEET). ANCHOR FASTNER 6'' LENGTH. WHITE BOARD4 X4. AIR CONDITIONING. INSTALLATION ADAPTOR/PISTON NUT SPANNER 340.76 SERVICE 8911.00 917.83 917.83 10746.66 42.6 383.36 85333.32 30000.00 10,666.67 0 95999.99 30000.00 8000.00 3440.00 400 430 8400.00 3870.00 SHEET PER 18450.00 922.5 19372.50 TANK SLOPE 283000.00 96200.00 7380.00 114.00 274.00 0.00 4,810.00 369 5.7 13.7 283000.00 101010.00 7749.00 119.70 287.70 1.00 1,000.00 1001.00

1903587413 ENERGY PANEL BOILER SAFETY & EFF SYS. Receiver & liquid line valve MONITORING

1124379.00

115,811.14

155,023.77

10,000.00

2,092.82

78832.5

1486139.23

504400.00 400.00

63,050.00 0

7,000.00

28,512.00

602962.00 400.00

Electric Forklift truck Drum Lifter BATTERY CHARGER 43800.00 5,475.00 2,409.00 51684.00 1021900.00 3,157.65 141,289.08 7,000.00 70,323.10 1243669.83

Safety system solution FABRICATATION &

450000.00 73300.00

60,750.00

60,750.00

10,000.00

22500

30,428.75 7,549.90

634428.75 88399.80

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Budget & Budgetary Control Analysis in PepsiCo

INSTALLATION IBR APPROVED FOR 54100.00 2,705.00 56805.00 7,549.90

MATERIAL

AUTOMATIC BLOW IBR APPROVED FOR

MATERIAL PIPE LINE ETP WORK

40800.00

2,040.00

42840.00

UPGRATION MOTOR 115000.00 0.00 115000.00

PUMP MODIFICA HI WALL TYPE

SPLIT UNIT HI WALL TYPE

24888.89

3,111.11

1,368.89

29368.89

SPLIT UNIT ERECTION CHARGES supply of cabling REF supply of cabling ref piping for 2 TR PROJECTOR LV 7280 XGA PANEL pannel charges 4 square mm,4 core cable 32 A MCB with box,2 pole socket and top 25A MCB with box 2 pole socket SERVICES MS 300*16MM. SELF CONTAINED FLAT -300 KVR

101337.00

12,667.13

5,573.54

119577.67

61287.00 20940.00

6,312.56 2,617.50 1,151.70

6,312.56

73912.12 24709.20

98000.00

12,250.00

5,390.00

115640.00

42000.00

5,250.00

47250.00

unloading 13500.00 0.00 13500.00

45600.00

2,280.00

47880.00

2460.00

307.5

2767.50

4920.00 61400.00

615 0.00

5535.00 61400.00

13000.00

650.00

13650.00

BRATHING APPARATUS SET. CC TV SYSTEM SET Installation charges Expected Cost/Expenditure 20810160.42 453,364.85 1,976,608.44 130000 22500 12,994.07 731,361.21 247,269.89 24384258.88 45400.00 31289.00 3520.00 5,675.00 3,911.13 0.00 1,000.00 52075.00 35200.13 3520.00

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Budget & Budgetary Control Analysis in PepsiCo

Actual cost/Experience occurred during the year2010-11:

Unload Material description
CAMERA SYSTEM SERVO REJECTION MECHANISUM DATA SYSTEM VISION UPS SYSTEM FOR DATE LOGGING. LOGGING CAMERA BASED VISION

Service Insurance Octroi tax Total

Basic

ED

VAT

Freight

Ch

Autoscrubber elect. M/c tASKI 230V/50HZ HIGH PRESSURE WATER JET TASKI DORSALINO 230V 50 HZ vACUMAT22

243,935.00

30,491.88

274,426.88

33,481.49

22,254.13

55,735.62

71,679.12

22,254.13

93,933.25

39,911.62

22,254.13

62,165.75

PICOBELLO 151

32,960.80

22,254.13

55,214.93 -

PCC ROOM PIPE WORKS

3,00,000

0.00

FILLED STATION Installation

INSPECTION & -

Commissioning

Testo 875-2 thermal imager SPEED RETARDER CONVEX MIRROR

2,84,050

35,506.25

35,506.25 -

ISMB 200

68,580.00

35935.41

104,515.41

ISMC 120 X 75

184,140.00

184,140.00

ISMC 200

41,760.00

41,760.00

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Budget & Budgetary Control Analysis in PepsiCo

ISMC 100 X 50 MS PLATE GUSSET 12 MM THK 35,153.10 35,153.10 86,940.00 86,940.00

TOE GUARD MS FLAT

22,500.00

22,500.00

ISA 75 X 75 X 6 MM

7,335.00

7,335.00

ROD 16 MM DIA

2,250.00

2,250.00

CHARGER PLATE 4 MM.

915,100.00

915,100.00

RAILLING PIPE 32 NB

110,550.00

110,550.00

MS ELBOW 32 NB

16,200.00

16,200.00

M 16 NUT BOLTS 60 MM ANCHORE BOLT 16 X 100 MM LONG

1,440.00

1,440.00

3,840.00

Total

3,840.00

CHAIN PULLY BLOCK

12,000.00

12,000.00

CHAIN PULLY TROLLY

6,600.00

Balance

6,600.00 -

fabrication

&

erection 487,824.00 49318.87 537,142.87 -

monorail at CT

11 STAGE APEC PANEL 300 KVR 6 STAGE APFC PANEL 100 KVAR BIO-WASTE CONVERTER 452,189.00 0 452,189.00 Providing & laying caustic storage faci -

15 S MULTIMETER DIGITAL TESTER AC TONG TESTER INSULATION

20,662.50

4603.94

25,266.44

16,169.00

4603.94

20,772.94 -

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Budget & Budgetary Control Analysis in PepsiCo

PORTABLE ANALYSER POWER 104,500.00 13062.5 117,562.50

MOTOR CHEKER

15,675.00

1959.38

17,634.38 -

Receiver & liquid line valve

Revamping of UASB ETP Erection & commissioning

820,000.00

102500

922,500.00 -

FABRICATION INSTALLATION MONORAIL

& HP 328,079.78 33792.22

ISMB 250

38,025.00

17637

ISMC 150 X 75

110,700.00

MS PLATE 12 MM THK

5,625.00

ISMC 100 X 50

7,425.00

MS FLAT 100 X 6 MM

8,775.00

ISA 75 X 75 X 6 MM

3,600.00

ROD 16 MM DIA

2,250.00

CHAQUIRE PLATE 4 MM

46,800.00

RAILING PIPE 32 NB.

56,100.00

MS ELBOW.

6,300.00

M 16 NUT BOLT

600.00

anchor bolt 16 x 100 mm

1,600.00

CHAIN PULLY.

36,000.00

CHAIN PULLY TROLY.

13,000.00

UG

TANK

FENCING

WORK

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Budget & Budgetary Control Analysis in PepsiCo

BOILER SAFETY & EFF MONITORING SYS.

Heavy duty platform trolly 10 Feet Tltable tower ladder ESTTL-H 40 Feet Maintenance Trolley ESMTHD_H 6 feet 151,200.00 9355.5 225,000.00 25000 15296.88 192,000.00 79650 11880

LADDER FIBER 18 FEET

69,000.00

2894.62

ENERGY SAVER 3 PH 415 VOLTS 50 HZ INSTALLATION COMM & 10,000.00 240,000.00 4800 10000 14564

MCC CONTROL PANEL WITH DOL STARTER 753,514.80 0

Equalisation pump KGEC 14-8 35,162.56 0 2062.73

Equalisation pump Motor Equalisation pump Access & Matching Flan

27,358.00

1723.25

17,389.87

972.06

UASB PUMP KGEC 12B-5 UASB PUMP KGEC 12B-5 MOTOR. UASB PUMP ACCESS & FLANGE CLARIFIER PUMP FRE 80-210 CLARIFIER MOTOR PUMP

29,152.52

1710.17

14,535.21

18.16.90

918.13

13,219.37

1652.42

744.63

118,195.38

6933.66

19,609.41

1231.23

CLARIFIER

PUMP 19,320.62 0 1080.27

ACCESS & FLANGE

GARDENING KGEC 16-6

PUMP 36,736.38 0 2155.06

GARDENING MOTOR GARDENING

PUMP 27,358.00 PUMP 0 1717.75 966.56

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Budget & Budgetary Control Analysis in PepsiCo

ACCESS & FLANG Tursury treatment pump CN 40-160 Tursury MOTOR. Tursury treatment pump 15,253.12 852.847 treatment pump 17,842.08 0 1120.26 35,360.54 0 2074.34 17,280.87

ACCESS & FLANGE

wATER PUMP KGEC 16-6 wATER PUMP KGEC 16-6 MOTOR wATER PUMP KGEC

36,736.38

2155.06

27,358.00

1717.75

ACCESS & FLANGE

17,286.87

966.56

Mechnical Seal cn 40-160

17,286.87

966.56 32068.877

light curtain

31,500.00

5737.5

AF 20MR D

11,700.00

POWER SUPPLY PS230

2,700.00

&

COUNTER 22,145.00 461.41 950

COMPLETE SET

RELAY 24 V DIGITAL METER E 1000 DIGITAL ENERGY ENERGY

875.00

6,175.00

9992.84

METER ENTITY VER 1.0

14,107.50

2,351.25 DIGITAL ENERGY 3,135.00

METER ENTITY VER 1.0 DIGITAL ENERGY

METER ENTITY VER 1.0 DIGITAL MANAGER ENERGY METER WITH PANEL CURRENT TRANSFORMER WIRING METER MAKING CUTOUT OF ENERGY LOAD

9,975.00

11,400.00

8,075.00

5,700.00

1,425.00

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Budget & Budgetary Control Analysis in PepsiCo

WIRING 19,950.00

PROVIDING & FIXING EYE WASHER 164,225.00 0

Blower fitting,cabeling,civil work Providing & laying PVC strip door MCC CONTROL PANAEL FOR WR PLANT 770,355.00 0 49794 272,363.52 0

DRONA PCH CHAIR.

86,250.38

27589.3

91,323.94 KAREENA GODREJ. CHAIR 34,512.09

8,628.02

motor gaurd 10 HP

6,897.00

2889.31

MOTOR GAURD 7.5 HP

1,024.10

MOTOR GAURD 0.75 HP

2,037.75

MOTOR GAURD 3 HP

950.00

MOTOR GAURD 3.7 KW

1,024.10

MOTOR GAURD 15 KW

4,284.50

MOTOR GAURD 11KW WTP PANEL WIRING & INSTALLATION DISCONNECTING AND

6,897.00

REMOVING WTP PANEL MIS CONDITIONIONG OF ELECTRICAL Installation, commissioning and Painting

ETP Electrification Installation, commissioning and Painting E 1000 DIGITAL ENERGY

15,368.00

166645.42

16783.95

162,951.00 1543.75

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Budget & Budgetary Control Analysis in PepsiCo

METER 12,350.00

17,100.00

3681.25

LOAD MANAGER

17,100.00

3681.25

12,350.00 WIRING METER SELF CONTAINED ENERGY 8,550.00

3681.25

1068.75

BRATHING APPARATUS SET. SOFTNER TANK 283,000.00 0

GUTTER SLOPE WORK

M.S. PIPE 2''.

96,200.00

5179

M.S. PIPE 3''.

7,380.00

M.S ELBOW 2 ''.

114.00

419.4

M.S ELBOW 3''. M.S SHEET 8MM(205KG PER SHEET). ANCHOR LENGTH. FASTNER 6''

274.00

8,000.00

WHITE BOARD4 X4. AIR CONDITIONING. ADAPTOR/PISTON NUT

3,440.00

430

SPANNER 1903587413 ENERGY PANEL BOILER SAFETY & EFF MONITORING SYS. Receiver & liquid line valve SERVICE

340.76

528.57

8,911.00

917.83

Electric

Forklift

truck

Drum Lifter BATTERY CHARGER Safety system solution FABRICATATION INSTALLATION IBR MATERIAL AUTOMATIC BLOW APPROVED FOR &

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Budget & Budgetary Control Analysis in PepsiCo

IBR MATERIAL LINE ETP UPGRATION WORK MOTOR PUMP APPROVED FOR PIPE

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 XGA PANEL -300 KVR pannel unloading charges 13,500.00 0 LV 7280 42,000.00 5250

4 square mm,4 core cable 32 A MCB with box,2 pole socket and top 25A MCB with box 2 pole socket SERVICES MS FLAT 300*16MM. SELF CONTAINED

45,600.00

3202.5

2,460.00

4,920.00

BRATHING APPARATUS SET. CC TV SYSTEM SET Installation charges

Actual Cost/Expenditure
9,065,307.17 747429.66 35950 167922.754 16783.95 4,220,374.32

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Budget & Budgetary Control Analysis in PepsiCo

I have taken last years data (eg.2010-11) for the analysis of Budget of the PepsiCo Because of some Confidentiality of the Company

expected Expenses Head

Basic cost [Link] Vat Fright Unload ch. Trans. Insrnce Octroi Service Tax Total

Actual Expenditure
41,009,760.84 41,047,920.84 747,429.66 260,000.00 0.00 0.00 1,404,871.16 494,539.78 4,220,374.32

Expenditure
20,810,160.42 453,364.85 1,976,608.44 130,000.00 22,500.00 12,994.07 731,361.21 247,269.89 24,384,258.88

Variances
-20,199,600.42 -40,594,555.99 -20,199,600.42 -130,000.00 22,500.00 12,994.07 -673,509.95 -247,269.89 -20,199,600.42

Expenditure 2010-11
45,000,000.00 40,000,000.00 35,000,000.00 30,000,000.00 25,000,000.00 20,000,000.00 15,000,000.00 10,000,000.00 5,000,000.00 0.00 Expeted cost Actual Exp. Cost

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Budget & Budgetary Control Analysis in PepsiCo

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. ii. iii. dealing with practically all elements of managers budget requests critical examination of ongoing activities along with the newly proposed activities Providing each manager a range of choices in setting priorities in respect of different activities and in allocating resources. iv. v. vi. vii. Efficient allocation of resources, as it is based on needs and benefits rather than history. Drives managers to find cost effective ways to improve operations. Detects inflated budgets. Increases staff motivation by providing greater initiative and responsibility in decisionmaking. viii. ix. x. xi. Increases communication and coordination within the organization. Identifies and eliminates wasteful and obsolete operations. Identifies opportunities for outsourcing. Forces cost centers to identify their mission and their relationship to overall goals.

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Budget & Budgetary Control Analysis in PepsiCo

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. II. III. IV. More time-consuming than incremental budgeting. Justifying every line item can be problematic for departments with intangible outputs. Requires specific training, due to increased complexity vs. incremental budgeting. In a large organization, the amount of information backing up the budgeting process may be overwhelming.

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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 wont 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.
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Budget & Budgetary Control Analysis in PepsiCo

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

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Budget & Budgetary Control Analysis in PepsiCo

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

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Budget & Budgetary Control Analysis in PepsiCo

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.

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Budget & Budgetary Control Analysis in PepsiCo

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: [Link] [Link],com [Link] [Link]

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