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5.1 BUDGET

The functioning & working pattern of Greaves is entirelydependent on the Budget prescribed by the company personnel.

The personnel from Head office & Branch offices get together andprepare the budget for the coming year. The sales to be achievedfor all the Business Groups are put down in the budget givendepending on the following conditions

Past performance of the company. ie The sales achieved bythe company in the previous year.

Future growth anticipated for the company( For e.g. Greaves are going to add agricultural pump sets(Electrical) to their product line. So if the anticipated sales for

the 1st year is about 100 units , & the price of the pump is Rs.10,000 /- each then Rs. 10 lakhs will be added to the budgetfor Business Group 7 (Agro Equipments)

The growth potential in that particular sector of the country.

The market conditions & climatic conditions of that particulararea (For e.g. Rainfall during the year is one of the majorfactors for sale of agro equipments. If more rainfall isanticipated then sales of the agro equipments will be more)

The Budgeted sales set for the coming year will obviously bemuch more then the sales achieved for previous year. This is donein order to motivate the employees & make them work harder toachieve the prescribed targets. Also the employees have completeautonomy in making decisions & are so highly empowered. Such amethod of functioning gives a tremendous boost to the employees &they also push themselves to the limit for attaining the targets.

The financial year for Greaves is 1st July to 30th June. While the

year for payment of income tax is 1st april to 31st march.

Given below is an example of the budget prepared for theBusiness Group 7. The actual sales achieved during the financial

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Greaves : An Analysis of Product Quality

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year of 2002 03 is given alongwith the anticipated (anticipatedbecause the below given budget was prepared in the end of May)sales for the year 2003 04 . Also the future projections for the year2004-05 is shown.

Greaves Cotton ltd.BG - 7

( Rs. In Lakhs )

Actual 2002 -03

Anticipated2003 -04

Projection2004 - 05

Product Quantity

Rs. Quantity

Rs. Quantity

Rs.

PED/Reaper

1767 138.22

1756 128.14 1900 149.22

DieselPump sets 545 87.00 300 51.10 625 102.67

PowerTiller

-1 -0.72 9 7.70 20 16.60

Electrical

Pump sets 150 8.89Total 2311 224.5

02065 186.94 2695 277.38

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