asha priya project

7/29/2019 Asha Priya Project

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INTRODUCTION

The information concerning the business enterprise is very helpful to the

Management to control it in an efficient way. As the other branches like

financial accountancy and management accountancy, the cost accountancy

also serves the Important information to the regarding the operating

efficiency if the business, it becomes very easy for management to lay

down management policies, to guide management decisions or evaluate

operating management performance with the information provided by cost

accounting.

The management the term operation in business terminology refers to an

activity of the business. It is very important to study the of the business in

detail because the entire business Depends on the operation, which it

performs. Should always concentrate on the efficiency of the operation and

also the costs associated to the operations. It is very important to control the

costs associated to the Operations for the enterprises like manufacturing

companies, companies engaged in The process of extraction of materials from

earth like, bio energies etc. Generally,, the above-mentioned business enterprises

depend on the operation that it has to be performed in to produce the final

output. The cost associated wroth such operations are generally higher. The costs

are called as The costs Operating costs which are incurred t o perform

the operation of the enterprise, are called as operating costs.

The costs are to be accounted for in order to arrive at the total

costs of operation Or process, which helps in determining the price of the

final product.Cost Accounting is the classifying recording and appropriate

allocation of expenditure of the determination of products or service, and

to the presentation of suitably; arranged data for the purpose of control and

guidance of management.


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It includes the ascertainment of the costs of every process, operation,

service or contract as may be appropriate. It deals with the cost of production,

selling and distribution It is thus, the provision of such analysis and

classification of expenditure as will enable the total cost of anyparticular unit of production to be ascertained with reasonable degree of

accuracy and at the same time to disclose exactly how such total cost is

constituted (I.e. the value of material used, the amount of labors and other

expenses incurred) so as to control and reduce the cost. The term Operation

herein general refers to any activity, which I engaged in converting the raw

materials into finished goods or the process of producing or extracting the final

product.

This project is concerned with the operation of extracting the local form the

underground and the cost associated with that operation. The company produce

the bio energies from two types namely Open cast energies and underground

energies More specifically this project focuses on the costs of operations

in underground mines. In underground mines the company follows various

technologies to produce the bio energies are as follows.

Long walls

BG panels

Continuous miner

Side Discharge loaders

Load Haul Dumpers


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In hand section the bio energies is extracted entirely with manpower. In

machine the bio energies Is produced with the help of machines. In energies

the production process depends largely on machines but it requires some

skilled manpower also. The study focuses on the machines called side dischargeloaders. For the purpose of the detailed area it was observed. In this the

bio energies produced with the help of chines called SDLs (side discharge

loaders0besides hand section. Extraction of bio energies in hand section entirely

depends on the manpower. The process of extraction of bio energies from an

underground which is using the technology of hand section is as follows. cleaning

and other process after which the bio energies can be used. After this process

the bio energies can be transported to the customers Another technology of

extracting bio energies is using SDLs is to improve safety, avoid the human

drudgery of carrying baskets at work apace and also better conservation of

bio energies. In the where the technology of SDLs is using the bio energies can be

extracted as follows. Blasting of bio energies with the help of explosives o

separate it from the machine instead of men can fill the bio energies.

These machines are called as side discharge loaders (SDLs). After the

blasting the bio energies SDLs move towards the face, takes the bio energies

into its basket and comes back(in the same direction without turning back)and

discharge the bio energies onto a belt. The belt takes the bio energies and dumps

into the tubs of the tub train and these tubs will bring the bio energies to the

surface. The capacity of the bucket of the machine is one tone. The time taken by

the machines it move from the coverage belt to the face where the bio

energies lift the bio energies into the bucket and to discharge the bio energiesonto the coverage belt is called Lead Time. The lead time takes the major part in

computing the cost of the production. Shorter the lead time larger the

production and vice a versa.


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The process will generally include the following costs:

1. Wages (filling and time rated)

2. Wages of other executives

3. Explosives

4. Power

5. Bio energies transportation

6. Other stores

7. Sand stowing

8. bio overheads

9. Workshop overheads

10. CSP overheads

11. Depreciation of mines

12. Depreciation of common assets

13. Inters


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NEED OF THE STUDY

1. Analyze the same worth the turn over the years.

2.

To determine the cost of each operation involved in a process.

3. It helps management in making more accurate estimated about the cost ofsimilar jobs to be executed in future on the basis of past records.

4. Special order concerns manufacture products in clearly distinguishable lossin accordance with special order and individual specification

5. Each process is designated as separate cost centre and the cost per unitcalculated by dividing the total costs of the process with the total number of

units produced by the process.

OBJECTIVES OF THE STUDY

1. The find out the cost of product at each stage in manufacturing. by

undertake an item and study the operating cost of the company. to highlight the

efficiency of operating cost of the company through various parameters.

2. To make suggestion if any for improving the practical positions of the firm

regarding operating

SCOPE OF THE STUDY

The area of the study was restricted to the bio energies pvt ltd and its operations.


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METHODOLOGY OF THE STUDY

Determination of the input required to be introduced in the operation.

Calculation of the cost of raw materials required to produce one piece of finished

product. To find out the operating profit ratio. Calculating the operating ratio

Research methodology

The study is based on secondary data and examines the total costs vs.

operating costs. The results are drawn mainly from the sources Secondary data has

been collected from the various sources such as

Publications of the company.Business magazines.

Journal, text books.

Company websites.

Annual reports.

In order to gain information on current processes and operations the area

chosen for study is the gopalapuram area in khammam district.

Limitation of the study

Coverage area was only limited to one bio energies in the Company

2. The financial data of the energies is limited to one years

3 .The analyses are based on only monitory information and Monitory factors/

information are ignored.

4.While computing number, percentage, the figure was Approximated

5. The period of study limited only for five year the is from 2007- 08 to 2011-12

6. The operating cost of the bio energies is confined to the area of gopalapuram


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INDUSTRY PROFILE

The electric power industry provides the production and delivery ofelectric

energy, often known as power, or electricity, in sufficient quantities to areas that

need electricity through a grid connection. The grid distributes electrical energy to

customers. Electric power is generated by centralpower stations or by distributed

generation.

Many households and businesses need access to electricity, especially in

developed nations, the demand being scarcer in developing nations. Demand for

electricity is derived from the requirement for electricity in order to operate

domestic appliances, office equipment, industrial machinery and provide sufficientenergy for both domestic and commercial lighting, heating, cooking and industrial

processes. Because of this aspect of the industry, it is viewed as a public utility as

infrastructure.

Energy is required for everything that we do, and it is the next important

thing apart from the food upon which the lives of nations depend. Lack of power

could cause economies to cripple. The flourishing power generation industry is

considered to be a sign of prosperity for any nation.Energy comes in various forms but electrical energy is the most convenient

form of energy since it can be transported with ease, generated in a number of

different ways, and can be converted into mechanical work or heat energy as and
http://en.wikipedia.org/wiki/Electric_energyhttp://en.wikipedia.org/wiki/Electric_energyhttp://en.wikipedia.org/wiki/Electricityhttp://en.wikipedia.org/wiki/Grid_connectionhttp://en.wikipedia.org/wiki/Power_stationhttp://en.wikipedia.org/wiki/Distributed_generationhttp://en.wikipedia.org/wiki/Distributed_generationhttp://en.wikipedia.org/wiki/Developed_nationhttp://en.wikipedia.org/wiki/Developing_nationhttp://en.wikipedia.org/wiki/Domestic_appliancehttp://en.wikipedia.org/wiki/Office_equipmenthttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Machineryhttp://en.wikipedia.org/wiki/Public_utilityhttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Infrastructurehttp://en.wikipedia.org/wiki/Public_utilityhttp://en.wikipedia.org/wiki/Machineryhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/wiki/Office_equipmenthttp://en.wikipedia.org/wiki/Domestic_appliancehttp://en.wikipedia.org/wiki/Developing_nationhttp://en.wikipedia.org/wiki/Developed_nationhttp://en.wikipedia.org/wiki/Distributed_generationhttp://en.wikipedia.org/wiki/Distributed_generationhttp://en.wikipedia.org/wiki/Power_stationhttp://en.wikipedia.org/wiki/Grid_connectionhttp://en.wikipedia.org/wiki/Electricityhttp://en.wikipedia.org/wiki/Electric_energyhttp://en.wikipedia.org/wiki/Electric_energy


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when required. In this article we will learn about a few of the most commonly

used methods of generating electrical energy.

THE POWER PLANT:

Power or energy is generated in a power plant which is the place where

power is generated from a given source. Actually the term generated in the

previous sentence is a misnomer since energy cannot be created or destroyed but

merely changed from one form to the other. More correctly, a power plant can be

said to be a place where electrical energy is obtained by converting some other

form of energy. The type of energy converted depends on what type of power

plant is being considered.

In the industrial use of the word, the term power plant also refers to any

arrangement where power is generated. For example the main engine of a ship or

an airplane for that matter.

TYPES OF ENERGY SOURCES:

Oil is the worlds favorite energy source which comprises 38% to the total

energy production closely followed by coal (26%) and gas (23%). Both nuclear

and hydroelectric energy sources contribute equally at 6% each with the remaining

1% coming from solar, wind, wood, wave, tidal, and geothermal sources. The

supply of oil has both geopolitical and strategic implications for the entire world.

It is geopolitical because the large known oil reserves are in the Middle East which

is a region considered to be anti-American.

It was the hidden agenda in the U.S. invasion of Iraq and the toppling of a

legitimate or some say illegitimate, presidency of Saddam Hussein. Iraq has the

2nd

largest known oil reserves in the world after Saudi Arabia.


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Electricity diagram

Oil was used once before as a political weapon by Arab countries when the

cartel of OPEC (Organization of Petroleum Exporting Countries) was still strong

then. The discovery of new and large oil fields in countries which are not members

reduced OPECs political and economic clout on the world stage. It is also

strategic militarily because it is one of the war materials a country needs to wage

and win wars. Oil, like copper and aluminum, is a strategic raw material and the

U.S. imports a lot of oil not for its consumption but for stockpiling in underground

salt mines in Utah and Nevada. These reserves from its strategic planning to

ensure supplies of critical materials in wartime. The Strategic Petroleum

Reserve is filled up to 700 million barrels which is equal to about a months

energy consumption by the U.S. There has been a frantic search for oil by drilling

in such pristine areas as Alaska, around the Great Lakes area and continental shelfbut it carries the risk of degrading the ecosystem and the environment.

Energy consumption graph

Coal consumption has been increasing for the past years because of the

fantastic price increases of oil in world markets. Coal is relatively cheaper

compared to all other energy sources and new carbon-emission technologies

allowed cleaner burning. Another reason for its comeback is its availability in the


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U.S. mainland and therefore it is less vulnerable to supply disruptions than oil

which is mainly imported from other countries.

Water energy

Gas is a cleaner fuel compared to either oil or coal but has its own

drawbacks. One is the safe transport of gas since it is very flammable or

combustible. This energy source is cooled and pressurized to make it into liquidform for easier and safer transport. The correct term for it is liquefied natural gas

(LNG) or liquefied petroleum gas (LPG).

Nuclear energy

Nuclear power is a significant energy source in some countries like

Germany and France. Its critics always cite safety concerns because of what

happened at the Chernobyl reactor. The meltdown and resulting explosion spewed

clouds of radioactive material into much of Europe and is the leading cause of

birth defects due to genetic mutations. There is a new nuclear reactor technologythat uses ceramics for its core. Ceramics can prevent meltdowns because it has a

very high tolerance for extreme heat.


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Hydroelectric power energy

Hydroelectric power is the alternative energy chosen by some countries

who do not want nuclear plants due to safety concerns. This is a viable alternative

when a country has sufficient water supplies. The largest dam for years is the

Hoover Dam in the U.S. between the borders of Arizona and Nevada. Today, that

distinction now belongs to the Three Gorges Dam in mainland China. When it

becomes operational in 2012, it will be the largest hydroelectric power station in

the world producing some 22,500 megawatts.

The argument against building dams to produce electricity is dislocation of

the people living nearby and the resulting changes to the environment.

The dam made many historical monuments, archaeological sites and

cultural villages now underwater and gone forever. This Chinese dam spans the

Yangtze River in the Hubei province and is the largest civil works project since

the construction of the Great Wall. A reason for building this giant dam is flood

control along the entire Yangtze River.

Estimated total cost of this project is US$25 billion when completed and it

needs to generate about 1,000 terawatts in 10 years for its construction costs to be

fully recovered. China has a 14-facility hydropower long-term development plan

in place until 2020.


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DIFFERENT TYPES OF POWER PLANTS:

Steam power plants use fuels such as petroleum, coal, or biomass are

burned to heat water to create steam, the pressure of the steam spins a turbine

turning the copper wire inside the generator.

Geothermal power plants are steam power plants that tap into steam

released from the earth. Once used the water is returned to the ground.

Gas power plants use fuels that are burned to create hot gases to spin the turbine.

Nuclear power plants nuclear generators use nuclear fission to turn water

into steam. This drives the steam turbine, which spins a generator to produce

power. A pound of highly enriched uranium can power a nuclear submarine or

nuclear aircraft carrier is equal to something on the order of a million gallons of

gasoline.

Wind power plants use the wind to push against the turbine blades,

spinning the copper wires inside the generator to create an electric current.

Hydroelectric dams use falling (or flowing) water to spin the turbine blades.

Coal plants burn coal to drive a steam engine. Coal is plentiful, but the collateral

damage is extreme.

Fossil fuel power plants burn oil to drive a steam engine. Burning fossil

fuels is increasingly expensive, and highly polluting. Oil supplies will run very

thin in the coming decades.


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PERFORMANCE:

The capital-intensive power industry suffered tremendous losses due to the

economic recession. Industry analysts have revealed that there was a staggering

50% decline in the number, value and capacity of new projects between the

beginning of the credit crunch in Q3 2009 and Q3 2010. There is a silver lining

though, as analysts believe figures for Q3 2010 have shown signs of positive

growth.

Going forward, it is believed the hotspots of activity will primarily be in

India, China and the UK. As well as new builds, there are also significant

opportunities for synergies across the global energy supply chain with industry

and governments keen to invest in and adopt new technologies. In order to best

capitalize on these new opportunities, major contractors and companies across the

energy supply chain have begun to work together more closely, to streamline their

operating and procurement procedures.

India has the fifth largest electricity generation capacity in the world. The

total installed capacity of India is ~150,000 MW, of which majority of generation,

transmission and distribution capabilities with either public sector companies or

with State Electricity Boards (SEBs). Only ~15% capacity is from the private

sector, though this is now beginning to increase. Market research suggests ~65%

of Indias total installed capacity is contributed by thermal power with the Western

and Southern regions each accounting for ~30%. Due to unbalanced growth and

rural-urban disparity, only ~40% of rural household have access to electricity

versus ~80% of urban households. Key players include National Thermal Power

Corporation Limited, Nuclear Power Corporation of India Limited, North Eastern

Electric Power Corporation Limited, Power Grid Corporation of India and Tata

Power.


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GROWTH POTENTIAL:

The Indian power sector is experiencing a large demand-supply gap. At

present, the energy shortage in the India is ~10% but there are States where the

energy shortage is as high as 25%. To combat this, over 80,000 MW of new

generation capacity is planned in the next five years. A corresponding investment

is required in Transmission and Distribution networks.

The Indian Ministry of Power has set a goal, Mission 2012: Power for all

and released a comprehensive sector development blueprint. The main objectives,

in addition to providing 100% access to power, are to provide sufficient power to

achieve targeted GDP growth rate of 8%, provide reliable and good quality power

and to enhance commercial viability.

A huge capital investment of about US$ 200 billion is required to meet

Mission 2012 targets. This has welcomed numerous global companies to establish

their operations in India under the famous PPP (public-private partnership)

programs. Additional massive capital investment is further required over the

subsequent years with the countrys power requisite expected to touch 800,000

MW by 2031-32.

FUTURE PROSPECTS:

Due to the influx of foreign companies, and the ramping up of operations

by domestic companies, the industry is experiencing a hiring spike. New graduates

would be advised to seek an initial position in one of the larger companies as there

will be specific training courses and more opportunities for someone starting out.

Given the breadth of the power industry, it is possible to work with a range of

different technologies and disciplines depending upon your preferences.


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All of the large power-generation companies are looking for graduates and

apprentices in a range of disciplines. Degrees in engineering (mechanical,

electrical or civil), science (physics, chemistry or mathematics) and even IT or

business studies are required. In addition, work experience is a big advantage.

POWER INDUSTRY IN INDIA:

The critical role played by the power industry in the economic progress of a

country has to be emphasized. A self sufficient power industry is vital for a nation

to achieve economic stability.

INDIAN POWER INDUSTRY:

Before Independence

The British controlled the Indian power industry firmly before

Independence. The then legal and policy framework was conducive to private

ownership, with not much regulation with regard to operational safety.

POST INDEPENDENCE:

Immediately after Independence, the country was faced with capacity

restraint. India adopted a socialist structure for economic growth and all the major

industries were controlled by public sector enterprises. By 1970's India had

nationalized most of its energy assets, due to its commitment to social goals. By

the late 1980's the Indian economy felt the strain of the socialist agenda followed

since independence. Faced with a serious deterioration in public finance and

balance of payment crisis, the Union government as part of its policy of economic

liberalization allowed greater investment by private sector in the power industry.


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POWER

Constitutional Position

Power as a matter of legislative and executive competence, falls in the

Concurrent List (List III of the Seventh Schedule to the Constitution ofIndia).Both the Parliament and state legislatures have the rights to pass laws on the

matter and any law passed by the Parliament overrides the existing state laws

unless.

The existing law is conserved or saved from such a repeal or A law passed by the state legislature receives acknowledgment from the

President of India.

POST LIBERALIZATION:

Understanding the critical part played by the power industry, the Union

government passed several laws and restructured the Power Industry to gear it up

to meet the challenges posed to the Indian economy post Liberalization.

Electricity Bill 2001

Learning from the experience gained through various reform initiatives, the

Indian government passed the Electricity Bill 2001.The Bill seeks to

Consolidate and rationalize existing laws. To address the issues of developing industry including regulation, power

trading, non discriminatory open access, choice of dispensing with

vertically integrated state enterprises and encouraging private enterprise.

Energy Conservation Act 2001

The Act was enacted by the Indian government to facilitate stringent steps

to ensure the efficient use of energy and its conservation. A Bureau of Energy

Efficiency was set up to monitor and regulate the Power Industry according to the

provisions of the act.


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NON RENEWABLE ENERGY:

FOSSIL FUELS:

The Industrial Revolution in Europe in the 19th century forced human's to

seek alternative sources of fuel to cater to the increasing demand. Focus was

shifted to fossil fuels as an alternate source of energy.

Fossil fuels were formed millions of years ago. They are nothing but

fossilized organic remains that after millions of years has been converted into oil,

gas and coal. Because this process takes a long time, they are known as non

renewable.

COAL:

It is the most easily available fossil fuel in the world. It is mostly carbon

and is used as a combustion fuel, especially after the Industrial Revolution. Coal

can further be divided into lignite, bituminous and anthracite. Lignite and

Bituminous have lesser percentage of carbon and therefore burn faster. They are

not environmentally friendly, Whereas Anthracite has about 98% carbon and

therefore burns slowly and is more environmentally friendly. Coal can be found in

both underground mines and open mines.

Though Petroleum gained prominence through the 20th century, coal still

continues to be the most used raw material for power generation.

Oil and Gas:

Oil and Gas is mostly found in underground rocks. Millions of years ago

when plants and animals died, they got buried in layers of mud and sand. The

earth's crust changed its shape and put immense pressure and heat on the dead

plants and animals. Over a period of time, the energy in those plants and animals

changed into hydrocarbon liquids and gases. They then turned into chemicals

called hydrocarbons .Most of the hydrocarbons is found under the sea bed. Oil has

a disastrous effect on the environment and many scientists believe the main reason

for global warming.


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Natural gas is usually found near a source of oil. It is a mixture of light

hydrocarbons. It is lighter than air and is odorless. It is therefore mixed with a

chemical that gives it a strong our and thereby easy to detect in case of a leak. It is

the cleanest burning fossil fuel.RENEWABLE ENERGY:

Because of the environmentally disastrous effect of non renewable energy,

an alternate source of energy which would not pollute the environment and which

can also be renewed was tapped. They are known as renewable energy. The

various types of renewable energy are

SOLAR ENERGY:

It is the most easily available renewable resource. After the oil shock in

1970's many countries conducted research work to tap solar energy. It is believed

in the next few years millions of consumers across the world would switch to solar

energy. In India the Indian Renewable Energy Development Agency and the

Ministry of Non Conventional Energy Sources are devising strategies to encourage

the usage of solar energy.

Solar energy can be used for cooking, heating, drying, distillation,

electricity, cooling, refrigeration, cold storage etc.

HYDEL ENERGY:

Energy available in fast flowing water can be used to generate electricity.

Waves occur due to the interface of the wind with surface of sea and represent a

transfer of energy. This energy can be tapped for commercial purpose.

HYDRO POWER:

It is the one of the best, cheapest and cleanest source of power, though large

dams could have environmental and social repercussions. In view of these

problems associated with larger dams, experts have advocated the construction of

smaller dams. New environmental laws to safeguard the planet from the effects of

global warming have made smaller hydropower projects more viable.


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WIND ENERGY:

It is the kinetic energy used for many centuries in water sports like sailing

and for irrigation. It converts kinetic energy into more usable forms of power.

Wind turbines help to convert the energy in the wind into mechanical energywhich can be used for generating power. Since the late 1980's the viability of wind

energy has gained in prominence across the globe. In India the states of Tamil

Nadu and Gujarat lead in the field of wind energy.

BIOMASS:

It is sourced from the carbonaceous waste of animals and is also the by

products from timber industry, agricultural crops, raw material from forest,

household waste and wood. It can be used to generate power with the same power

plant that are burning fossil fuels and is very much environmentally friendly.

It is being used in the western countries for applications such as combined

heat and power generation. In India 90% of the rural households and 15% of the

urban households use bio mass fuel.

NUCLEAR ENERGY:

Nuclear energy can be created in nuclear reactors under strict human

control. The nuclear power can be generated by the fission of uranium, plutonium

or thorium or the fusion of hydrogen into helium. Nowadays mostly Uranium is

used for generating nuclear power. With a view to increase India's dependence on

nuclear energy to offset the energy crisis in the country, the Indian government

entered into an agreement with the government of USA called the 123 agreement.

This agreement aims to assuage greater cooperation between the two countries in

the field of nuclear technology.


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FUTURE TRENDS:

According to experts the private sector would play a greater role in powergeneration and foreign investments would increase considerable in his

sector.

The government of Indias Hydrocarbon vision 2025 gives in details theguidelines for the policies in India for the next 25 years to attract

investment in exploration, production, refining and distribution of

petroleum products.

INDIA POWER SECTOR:

India power sector or the power industry in India comprises of the various

governmental bodies looking after the power systems in India, power generation

industry and technologies in India, power supplies, power industry report showing

the analysis of the power scenario in India, the India power requirements and

shortage, the various India power supply unit and the power infrastructure in India.

MINISTRY OF POWER:

Indian power sector comes under the Ministry of Power India. Earlier

known as Ministry of Energy, it comprised of separate departments for power,

coal and non-conventional sources of energy. In 1992, the Ministry of Power

started working independently with work areas covering planning and strategizing

the Indian power projects and policies.

The power management and implementation of the various power projects

undertaken, formulation and amendments of the power laws in India, management

of the power supply in India, monitoring of the power plants in india, powercompanies in India, power generation in India and other power shortage problems

etc.


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The Ministry of Power (MoP) is coordinated by Central Electricity Authority

(CEA) in all technical and economic aspects. Along with the CEA, other

subsidiary organizations of the Mop are:

National Thermal Power Corporation (NTPC)

National Hydro Electric Corporation (NHEC) Power Finance Corporation of India (PFCI) Nuclear Power Corporation of India Limited North Eastern Electric Power Corporation (NEEPC) Rural Electrification Corporation (REC) Damodar Valley Corporation (DVC) Bhakra Beas Management Board (BBMB)

POWER INFRASTRUCTURE IN INDIA:

The power industry in India derives its funds and financing from the

government, some private players that have entered the market recently, World

Bank, public issues and other global funds. The Power Ministry India has set up

Power Finance Corporation of India that looks after the financing of the power

sector in India. The Power Finance Corporation Limited provides finance to major

power projects in India for power generation and conversion, distribution and

supply of power in India.

Power Finance Corporation (PFC) Ltd India also looks after the installation

of any new power projects as well as renovation of an existing power project

India. The PFC in association with central electricity authority and the ministry of

power facilitates the development in infrastructure of the power sector India. They

have taken up construction of mega power projects that will answer to the power

shortage in various states through power transmission through regional and

national power grids.


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POWER SUPPLY UNITS INDIA:

Power is derived from various sources in India. These include thermal

power, hydropower or hydroelectricity, solar power, biogas energy, wind power

etc. the distribution of the power generated is undertaken by Rural ElectrificationCorporation for electricity power supply to the rural areas, North Eastern Electric

Power Corporation for electricity supply to the North East India regions and the

Power Grid Corporation of India Limited for an all India supply of electrical

power in India.

Thermal Power in India is mainly generated through coal, gas and oil. Indiacoal power forms a majority share of the source of power supply in India.

The electric power in India is generated at various thermal power stations in

India. The power generated at these thermal power plants is then distributed

all over India through a network of powergrid at regional and national

levels. The power ministry organization responsible for the thermal power

management in India is the NTPC.

Hydropower is India is one of the mega power generators in India. Varioushydropower projects and hydro power plants have been set up by the

ministry of power for generation of hydro power in India. Various dams

and reservoirs are constructed on major rivers and the kinetic energy of the

flowing water is utilized to generate hydroelectricity. The power generator

here is the running water. The hydroelectric power plants and the hydro

power generation companies are managed by the National Hydro Electric

Power Corporation (NHPC).

Wind Power in India is available in plenty as India witnesses high intensitywinds in various regions due to the topographical diversity in India. Efforts

have been made to utilize this natural source of energy available free of cost

for wind power generation.


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Huge wind energy farms have been set up by the government for tappingthe wind energy by using gigantic windmills and them converting the

kinetic energy of the wind into electricity by the use of power converters.

The wind power advantages start with the very fact that a wind energypower plant does not require much infrastructure input and the raw material

i.e. wind itself is available free of cost.

Solar Power in India is being utilized to generate electricity on smallerscale by setting up massive solar panels and capturing the solar power.

Solar power India is also being utilized by the power companies in India to

generate solar energy for domestic and small industrial uses.

Nuclear Power in India is generated at huge nuclear power plants andnuclear power stations in India. A nuclear power plant generates the

electricity using nuclear energy. All the nuclear power plants in India are

managed by the Nuclear Power Corp of India Ltd (NPCL). The electricity

from all India nuclear plants is distributed by the NPCL as per the nuclear

power project scheme.

Biogas Production in India is still in its infancy stage. Also the number ofbiogas plants in India is still very low. India being the largest domestic

cattle producer has plenty of biogas fuel and thus utilization of the fuel for

mass biogas production by setting up more biogas plants in India would

solve the power shortage problem to some extent.


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POWER COMPANIES IN INDIA:

Many government as well as private organizations have taken up the task of

power generation in India. The major Indian power companies playing prime are:

Bhakra Beas Management Board

Enercon Systems India Essar Group GMR Group Gujarat State Petroleum Corporation Ltd Jindal Steel & Power Limited Karnataka Power Transmission Corporation Limited (KPTCL) Karnataka Renewable Energy Development Limited Konarka Magnum Power Generation Limited Nippo Batteries Reliance Energy Ltd. Shri Shakti Durgapur Projects Limited Satluj Jal Vidyut Nigam Ltd. United Power Ventral Systems Pvt. Ltd. Enron India Power Plant Celetronix Power India Caterpillar Power India

Man is blessed with abundance of natural resources, Including Mineral

wealth that play vital role in the Development of a country and promote the

economic growth when explored and made best use of them.


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Bio energies, which is one of the important electricity, is Known to

man since ages and this natural wealth has put to diverse use in the modern world.

Bio energies regarded as the fuel for growth, the bio energies an important

input for power generation and many other industries like iron and steel,railway, shipping and construction industries etc, a vital infrastructure for

economic development. Despite the development for alternative fuel sources like

electricity, petrol and solar energy, bio energies continues to be major fuel

material in many industries. Thus bio energies industry plays an important role

in the industrial development of any country, like India. The world bio

energies consumption is projected to go up from 4 billion tones in 2000 to

6 billion tones by 20, primarily in china and India which are expected to

Account for 75% of the increased consumption. In India, bio energies was

started in 1774 and is still significantly under the Government control and

Ownership with bio energies India worth its following subsidiaries Subsidiaries

are become number one bio energies producer in India

HISTORY:

The year 1921 witnessed the formation of the Secendrabad Deccan

company private limited and it acquires the lights for exploiting the bio energies

reserves. The first commercial operation commenced at Gopalapuram Kkhammam

district) in Andhra Pradesh in 1921.

In 1991 the company. Re- christened the Gowthami private company

limited and its scrip listed on the National stock Exchange. The energies right

exploiting the bio reserves were acquired by the Hyderabad Deccan company,

which was incorporated at national stock exchange.

Hence The first extracting of bio energies was started at Gopalapuram in

1886 by eastgodavari company the company became government company

after purchased its shares from National stock exchange in 494. With this,


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GBPL became the first-ever government managed bio energies company in

India. Later in the year 1949, energies came under the control of governments of

India and Andhra Pradesh as a joint venture with equity ration of 49%

and 51%respectively. The energies Is engaged in bio energies in four districts ofAndhra Pradesh namely. Khammam, area producing 1 of total bio energies.

The operation areas of gbpl are as follows:

KHAMMAM DISTRICTgopalapuram. The bio energies reserves stretch

over 3 square kms. Of khammam above districts of Andhra Pradesh with proven

deposits of 8,575 million tones of bio energies. snow operates forty two (42) under

ground mines and thirteen(13) open cast energies in these four(4)districts.

Technologies & their output in GBPL:

NAME OF THE TECHNOLOGY PERCENTAGE TO TOTAL OUTPUT

in 2007-08

Traditional underground energies 15%

Opencast energies 69%

Long wall technology

16%

Blasting gallery technology


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MANPOWER OF GBPL

SLNO CATEGORY 31-05-2012

1 Top Executives 4

2 Executives 25

3 Supervisory 39

4 Secretarial staff 23

5 Technical staff 96

6 Skilled(daily rated) 184

7 Semiskilled(daily rated) 52

8 Unskilled(daily rated) 193

9 Unskilled(piece rated) 167

10 Apprentices 4

Total 787

GBPL-MISSION:

To retain strategic role of a premier bio energies producing company in the

country and excel in a competitive business environments. To strive for self-

reliance by optimum utilization of existing resources and earn adequate returns

on capital employed.


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To exploit the available energies blocks with maxim Conservation and

utmost safety by adopting suitable technologies and practices and constantly

upgrading them against international bench marks.

To supply reliably and qualitative bio in adequate quantities and

strive to satisfy customers needs by constantly harmonious industrial

relations with the legal and social frame work of the state.

To emerge as a responsible company through good corporate

governance, by laying emphasis on protection of environment & ecology and

with due regard for corporate social obligations.

GLOOM TO GLORY:

The GBPL was receiving budgetary support from both government of

India and Government of Andhra Pradesh till some time age, but they later

abandoned. Also the pricing of bio energies was decided by government of

India keeping its impact on their major sectors like, power, railways, cement etc.

the prices were not revised regularly, also hike in input cost due.

To periodical revisions of national bio energies wage agreements (NCWA)

stores and interest were also not fully compensated by government. The frequent

strikes by the workers, law and order problem , low productivity, apart from

un-Remunerative bio energies price vis--vis cost of production during the

period 1989-90 to 1991-92 affected the financial health of the company and

refer referred to BIFR in may 1992, but due to liberal financial package

extended by the govt. of India in consultation with govt. of AP, and sustained

effort made by the management GBPL and Trade unions, a modest

financial turnaround was achieved.


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The company earned profit of Rs.17.76 core and 26.64 cores in 1993-94

and 1994-95respectively. My march 1994, GBPL came out the BIFR purview.

Following remedial measures/reforms were taken by the company for

success:

Unifying trade unions through path breaking elections.

High pitch communication drives harnessing media, launching literacy

programmers.

Focused multi-faceted workers welfare programme.

Establishing outsourcing of non-core and ancillary activities.

Innovative programmers launched(Dial-your-GM, field visits, intersections,

followups)

Fuel supply agreements-technology infusion for quality testing, workforce visits to

client sites.

Focus on safety, environment protection and lab our welfare.

The process of turning around a sick company, which commenced in 1997-

98, reached its logical conclusion when GBPL totally, wiped out its accumulated

losses and entered the financial year 203-04 with ant profit of Rs80.45 core after

issuing a dividend of Rs 86.70 core


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.S,no particulars Units Pre-2000

(2002-03)

Post-2003

(2006-07)

Gain/reduction(%)

1 Bio

energies

production

M.tonne

s

28.73 33.24 (+)16%

2 Bio

energies

dispatches

M.tonne

s

28.83 33.37 (+)16%

3 Overalloutput per

man

shift(OMS)

Tones 0.98 1.51 (+)54%

4 Manpower Nos. 1,14,486 97,053 (-)15%

5 No.of

strikes

Nos. 310 35 (-)83%

6 Turn over Rs.incrs 2114 3689 (+)75%

COMPUTERIZATION IN GBPL:

GBPL has initiated computerization activity in the early eighties

utilizing Accounting management information system, personnel, personnel

data (EPR), in inventory management.


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Computerization has been introduced in the supply and allotment of bio

energies to the industries in the non-core sector by the marketing department.

All documentation of data pertaining to over 200 industrial consumers has

been total computerized. The marketing department has been issuingcomputerized sale notes to all the industrial consumers with in 24 hours of

receipt of requests from the consumers .

Daily a computerized statement indicate the sale notes issued to consumers

and the requests pending at the each day is displayed on the notice board of

the marketing department computerized recruitment system by which

selection of candidates was Completed within 24 hours of written test evolved

to remove the subjectivity in the Selection process and this was appreciated by

the candidates as well as the general public.

INDUSTRIAL RELATIONS:

Industrial relations are one of the most delicate and complex elements of a

modern industrial society. Industrial relations have now become a part and

parcels of the science of management because they deal with the manpower

enterprise. The term industrial relations refer to industry and relations. Industry

means any productive activity in which an individual is engaged and trade unions

on wages and other terms of employment. The day-to-day relations with a plant

also constitute one of the important elements and impinge on the broader aspect of

industrial relation. The primary objective of industrial relations is to bring about

good and healthy relations between the two parries in industry-labor and

management.


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INDUSTRIAL RELATIONS IN GBPL:

To safeguard the interest of labor as well as of management by Securing

the highest level of mutual understanding and good will Between all sections in

industry which take part in the process of Production.

To avoid industrial conflicts and develop harmonious relations,

which are essential for the productive efficiency of workers and the

industrial progress of the country.

To raise productivity to a higher level in an aera of full employment By

reducing the tendency to higher and frequent absenteeism

To establish and maintain industrial democracy based on labor

partnership, not only for the purpose of sharing the gains of but also

participating and managerial discussions so that the individual personality

may be fully developed anther may grow into a civilized citizen of the county.

To bring down strikes, lockouts and gelatos by providing better And

reasonable wages and fringe benefits to the works and improved living

conditions.

To bring about government control over such units and plants as re-running

atlases where production has to be regulated in the public interest.

To ensure that the state endeavors to bridge the gap between the

unbalance, disordered and maladjusted social order and the need for reshaping

the complex social relationships emerging out of technological advance

interest- protecting some and retraining others and evolving a healthy social

order.

.


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Employee and Employers:

An amount equivalent to two and one third contribution percent of salary of the

employee.

COMMUNITY BUILDINGS/FACILITES:

In order to provide recreation facilities the company has constructed recreation

clubs and community halls in the bio energies field areas.

No of community 10

No of recreations clubs 32

EXPENDITURE INCURRED ON WELFARE

Year Expenditure (Rs in lkhs) Expenditure per

employee(in Rs)

2007-08 27681 27837

2008-09 29305 30195

2009-10 31724 3349

2010-11 37693 40925

2011-12 46800 54403


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TARGET AND OFF-TAKE OF BIO ENERGIES

During the year 2010-2011 off take of bio energies was 4 million

tones Against the AP target of 2 million tones per the new bio energies

distribution polices

Announced by the ministry bio energies, goal, the customers who are

drawing more than 200 tones per annum have to enter in to FSA and so far 140

such customers have entered in to FSAS with the GBPL.A part from that, three

power utilities, 44 paddy units 38 sponge units and 18 CPP customers have

FSAS with GBPL 89% of dispatches have been covered by FSAS and joint

sampling protocols agains87% covered in the previous year.

The no of customers registered GBPL have gone up from 55in 2009-2010

to 63 in 2010-11 he details of sector wise AAP target and off take and enegies

consumption during 2008-09 has compared to the previous year are as under

MEASURES FOR IMPR1OVING QUALITY AND CUSTOMER

SATISFACTION:

Modernizations of CHPS by establishing auto sampling system is in

progress and labs are provided with latest equipment.washery is being established

at gopalapuram on BIO basis. With a view to facilitate the customers who

are unable to get bio energies as per the exisisting system e-auction of bio

energies is introduced which bio energies can be purchased on line through

simple, transparent and customer friendly system complaints received from

customers on sampling, quality and weigh menthae slightly increased

from 15in the previous year to 20 during year under report and necessary

measures were Taken to address the complaints which lead to prompt

elimination of grievances of customers.


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INDUSTRIAL RELATIONS:

The year 2009-10 has set a new record in the IR scenario of the company

with zero strikes, company in establishing congenial atmosphere and maintaining

industrial harmony and peace. It was possible through multi-dimensional approach

which Inter-alia consists efforts in creating increased awareness among workmen,

enhancing welfare measures, transparency and holding meetings eighth unions

at regular intervals, elections for according recognition to the trade unions at

company and areas levels were conducted for the 4th time successfully, while the

year 2008-09 strike free- the number of strikes, man days & production lost in

previous year are as Under

WELFARE OF EMPLOYEES AND SOCIAL SECURITY SCHEMES:

Various welfare activities that are in vogue viz, housing &sanitation,

educational, Recreational, medical facilities with super specialty services and

social security schemes are being continued with more vigor awareness

campaigns on the subjects of health, Hygiene, prevention and spreading of

diseases were organized extensively for the benefit of employees and the people

living in near plant. The overall housing satisfaction as on 31-03-08 was 68% as

against 60% at the end of previous year.

INFORMATION TECHNOLOGY:

Enterprise resource planning (Erp) software is being implemented in

association with SAP India initially in finance, payroll, materials management

and marketing and movement modules ,networking through infant is established

between various departments Energies Laser profiler is introduced for survey

departments. Project monitoring is integrated with estates and purchase

departments for reviewing implementation of service


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SAFETY IN ENEGIES:

The company strives constantly continuously and consistently for

complete safe, during the year under report several measures were taken

towards improving safety which includes mechanization of and other work places

, creation of awareness among the work men and their family members,

organizing training programmers and work shops, conducting safety audit The

details of accidents during the year under report are indicated below:

BIO ENERGIES SERVICES:

The energies services of the company were developed on par with

international standards and best of its kind in AP This is achieved by continuous

strengthening of rescue services with the best training. Latest resourceful

equipment and by adopted international best practices. The company facilities of

injured persons from place of work and the same are being used on trial basis at

rescue service points. During the year under report, 32 persons were

imparted initial training in rescue and recovery works and 593 active rescue

trained persons working at different mines of the company were imparted 4947

refresher Man shift practices.

RESEARCH AND DEVELOPMENT:

During the year under report, R&D activities were taken up in UG

control studies in long wall BG panels, semi - Mechanized, wide stall method of

working, simultaneous extraction of seams, and estimation of long Wall

support capacity, water dams design, determination of in-situ strength of

bio energies, degree of Gassiness and reclassification. In open cast projects,

studies were carried out in High wall and dump slope stability, determination

of optimum slope of benches, impact of deep hole blast vibrations and

controlled blasting.


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The activities benefited in expediting the new projects, improving safety,

mine ventilation, production and productivity, health of workmen.

FUTURE PLAN OF ACTION:

Ventilation studies, strata monitoring and ground control studies,

Introduction of resin capsules in heavy water seepage mines in conjunction

with roof Bolters are some of the studies proposed to be conducted future

ENVIRONMENT AND ECOLOGY:

GBPL carries out eco-friendly bio energies and gives due concern for

protection of environment, air, water, bio-diversity and nature, theactivities taken by the Company have won laurels for the company have

won laurels for the company and several environmental organizations have

conferred awards. GBPL takes measures on a continuous basis for keeping

quality levels of air , water, and environment within the limits and unaffected

by mining and allied operations. 4sewage treatment plants were constructed

during 2009-10.

ORGANIZATION STRUCTURE:

The successful performance of any institute depends to a large

extent units organization may be defined as the process of identifying and

group of work


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THEORETICAL FRAME WORK

The term operation in business terminology refers to an activity of the

business. It is very. Important to study the operations of the business in detail

because the entire business.

Depends of the operation, which its performs. The also the costs

associated to the operation. It is very important to control the costs associated to

the operation for the enterprises like manufacturing companies, companies

engaged in the process of extraction of materials from earth like, bio energies etc.

Generally the above mentioned business enterprise depend on the operation

That it has to be performed in order to produce the final output. The cost

associated with such operations is generally higher. These costs are called as

OPERATING COSTS The costs, which are incurred to perform the

operation of the enterprise, are called as Operating costs.

The costs are to be accounted for in order to arrive at the total costs of

Operation or process, which helps in determining the price of the final

product. Cost accounting is the classifying , recording and appropriate allocation

of expenditure for the determination of the costs of products or service and

to the presentation of suitably, arranged for the purpose of control and guidance

of management

It includes the ascertainment of the costs of very process. Operation

servicer contract as may be appropriate. It deals with the cost of production.

Selling and distribution. It is thus the provision of such analysis and classificationof expenditure as will enable the total cost of any particular unit of

production to ascertained with reasonable degree of accuracy and at the same

time to disclose exactly how such total cost is constitutes (i.e., the value of


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material used, the amount of labor and other expenses incurred) so as to

control and reduce the cost.

THE FEATURES OF COST ACCOUNTING:

1. It is process of accounting.

2. It records income and expenditure relating to production of goods and service.

3. It provides statistical data on the basis of which future estimates are prepared

and quotations are submitted.

4. The exact cause of decrease or increase may suffer not because of the cost of

production is high or price are low also because the output is much below the

capacity of the concern.

5.Efficiency of public enterprises. Costing has a more important role to play in

public enterprises than in private enterprises. The primary objective of the public

enterprise is not to raise profits but it is to serve the society by providing quality

goods at cheaper rates.

6.The efficiency of a public sector can be best judged by comparing its cost of

production with the cost of production of its counterparts.


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ELEMENTS OF COST

Elements of costs

By grouping the above elements the following divisions of costs are obtained.

1. Prime cost = direct material + direct labour +direct expenses.

2. Workers or factory cost = prime cost + works or factory overheads.

3. Cost of production= works cost + administration overheads.

4. Total cost or cost of sales = cost of production + selling and distribution

overheads.

The difference between cost of sale and selling price presents the profits or loss.

Material Labour

Direct Indirect Direct Indirect Direct

Prediction of

works OH

Administrati

on OHSelling OH

Other expenses

Indirect

Distribution OH


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DIRECT MATERIALS:

Direct materials are those materials which can be identified in the product and

can be conveniently measured and directly enter the production and form a part

of the finished product.

For example timber in furniture making clothe in dress making and bricks in

building a house.

The following are normally classified as direct materials

All raw materials like jute in the manufacturing of gunny bags, pig iron in

foundry and fruits in caning industry.

Materials specifically purchased for a specific job, process or order like glue for

book building starch powder for dressing yarn etc.

Parts or components or produced like batteries for transistor radios and tires for

Primary packing materials like cartons, wrapping ,cardboard boxes, etc. used to

protect finished product from climatic conditions or far easy handling inside the

factory.

Indirect materials are those materials which cannot be classified as direct

material. For examples , consumables like cotton waste, lubricants, brooms,

rags, cleaning materials, materials for repairs and maintenance of fixed assets.

High diesel used in power generations etc.


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DIRECT LABOUR:

Direct labor is all labor expended in altering, construction, composition,

confirmation or condition of the product. In simple words it is that labor which can

be conveniently identified or attributed wholly to a particular job, product

or process or extended in converting raw materials in to finished goods.

Indirect wages are the wages paid to supervisors, inspectors etc, through not

direct labor.

DIRECT EXPENSES:

All expenses, which can be identified to a particular cost center and hence

directly charged to the center, are known as direct expenses. In other words all

expenses (other hand direct materials and direct labour) incurred specifically

for a particular product, job, department etc,. are called direct expenses. These

are directly charged to the product, job, department etc. Examples of such

expenses are royalty, excise duty, hire ,charges of a specific plant and equipment.

OVER HEADS:

Overheads may be defined as the aggregate of the cost of indirect materials,

indirect

Labor and such other expenses including services as cannot conveniently be

Charges direct to specific cost units. Thus, overhead are all expenses that direct

expenses.

Over head are sub divided as

Manufacturing expenses

Administration over heads.

Selling over heads.

Distribution over heads.

Research and development over heads.


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EXPENESE EXCLUDED FROM COSTS:

The total cost of a product should include only those items or expenses

which are a charge against profit. Items of expenses which are relation to capital

assets. Capital losses, payments by way of distribution of profits and matters of

pure finance should not from a part of the costs.

Examples of such expenses are income tax, dividends. Abnormal wastage

Of materials, wages paid abnormal idle time, interesting capital given or

received expenses of raising capital, discount on shares and debentures profit or

loss from the sale of asset investment excessive depreciation. Appropriation

of profit, writing off good wall, preliminary expenses, and underwritingexpenses etc.

STATEMENT OF COST OR COST SHEET:

Cost sheet is a statement designed to show the output of a particular

accounting period along with break-up of costs. The data incorporated in cost

sheet are collected form various statements of accounts, which have been written

in cost accounts, either day-today or regular records.

There is no fixed form for preparation of a cost sheet in order to make the

cost sheet more useful it is generally presented in columnar form The columns

are for total cost of the current period per unit cost for the current period and

total and per unit cost for the preceding period and total and per units for the

budget period and so on.


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ADVANTAGE OF COST SHEET:

It discloses the total cost and the cost per unit of the units produced during the

given period.

It enables a manufacture to keep a close watch and control over the cost of

production.

By providing a comparative study of the various elements of current cost with the

past results and standard cost. It is possible to find out the causes of variations in

costs and to eliminate the adverse factors and conditions which to go increase the

total cost. It acts as a guide to the manufacture and helps him in formulating a

define useful production policy.

It helps in fixing up the selling price more accurately.

OBJECTIVE OF OPERATING COST:

1. To find out the cost of the product at each stage on manufacturing.

2.It helps in finding out the cost of production of every order and thus

helps in ascertaining profit on its execution. The management can judge the

profitability of each job and decide its future course of action.

3. Management in making move accurate estimates about the cost of similar job

to be executed by the helps of past records the management conveniently and

accurately determine and quote the price for order.

4. It enables management to control operational in efficiently by companies

actual Cost with the climates ones.

5.Each order should be continuously identifiable from the raw material stage to

stage of completion.


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The term operation here in general refers to any activity, which I

engaged in Converting the raw materials into finished goods are the

process of producing or extracting finalproduct.

This project is concerned with the operations of extracting the local from the

under ground and the cost associated with the operation. The company produce

the bio energies from two types mines namely opencast mines and underground

mines. More specifically this project focus on the cost of operation in

underground mines In underground mines the company follows various

technology to product

Another technology of extracting of bio energies is using SDLs. themain objective of introducing SDLs is to improve safety, avoid the human

drudgery of carrying baskets at work space and also better conservation of bio

energies. In the mines where the technology of SDLs is using the bio energies can

be extracted as follows.

Blasting of bio energies with the help for explosives to separate it firm the

earth the machines instead of men can fill the bio energies. These machines are

called as side discharge loaders (SDLs). After the blasting for the bio energies

SDLs move towards the face, takes the bio energies into its bucket and comes

back (in the same direction without turning back)and discharge the bio energies

onto a belt. The belt takes the bio energies and dumps into the tubs of the tub train

and these tubs will bring the bio energies to the surface.

The capacity of the bucket to the machine is one tone. The time taken by

the machines to move from the coverage belt to the face were the bio energies is

blasted, to lift the bio energies into the bucket and to discharge the bio energies

onto the coverage belt is called lead time


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The lead time takes the major part in computing the cost of the production.

Shorter the The process will generally include the following costs. wages (Filling

and time rated) wages of other executives explosives other stores power bio

energies transportation sand stowing

Mine overheads.workshop overheads CSP overheads.

Depreciation of enegies

Depreciation of common assets.

Interest.

Area overheads.

The system being followed and the steps involved in preparation of cost

sheet under the present costing system are explained as follows.

A preformed cost sheet followed in presentation of cost sheet for hand

section and technologies is furnished. For expenditure is presented through the

cost sheet under various elements of cost.

Cost ascertainment is done through cost centers allotted to the various

elements of cost

The total activities at the mine are divided into 39 parts and each activity is

given a cost called activity cost center with two digit code starting from 01 to 39 to

ascertain the expenditure .The activity wise cost centers are shown below. The

Expenditure. The activity wise centers are shown below. The expenditurebooked the below cost centers is treated as direct incurred at the mine.

Similarly to ascertain the expenditure on various surface activities cost

codes from 40 to 102 are allocated which are used to book the expenditure on the

activities on the service and administrative departments etc.


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The expenditure incurred at workshop, CSP and G.M office est. Are the

examples of the indirect cost booked through below cost centers.

The indirect cost is grouped into 2 parts for presentation in the mine cost

sheet. They are mine overheads and area overheads. The mine overhead, which

represents the incidental, costs to the direct wages like LTC/LLTC, leave

encashment, workmen compensation free issue for gas etc. paid to the employees

have been taken as direct expenditure and the actual provision of gratuity allocated

to the mine is treated as mine overhead and appointed on the basis of men on roll.

The area overhead have been a[[prto9oned on the basis of production as per the

procedure.

Thus the total cost of production is ascertained by way of allocation of

direct expenditure and apportionment of overhead costs booked through various

cost centers.

The expenditure thus ascertained is dived with the production to arrive at

the cost of production per tone. The profit/ loss is the difference between the

average sales realization plus surface transport charges and total cost of

production.

The preformed of existing cost sheet is felt adaptable to other

underground machine mining technologies and as such the same is retained. The

cost of production is to be ascertained for a technology as a profit center and all

the costs are ascertained accordingly.

To introduced the system of cost booking to the cost centers technology

wise it is sought to ascertain the expenditure right from the basic documents

of expenditure Without considering manual information.


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According the manpower at the mines on allocation and apportionment to

the respective technology shall be grouped under the technology bio energies

with designed cost centers and the attendance shall be maintained and

furnished accordingly so that wages cost can be directly obtained for eachtechnology through the wage summaries from payroll programs.

The indirect cost involving wages, stores and other expenditure booked to

the respective cost centers shall be appointed ion the basis of production and the

adopted base as is dine in the case of apportionment of overhead cost to the

mines.


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Specimen of cost sheet or statement of cost:

Particulars Total cost (Rs.) Cost per unit(Rs.)

DIRECT MATERIALS

DIRECT LABOUR

DIRECTT OR

CHANGEABLE EXP:

PRIME COST

ADD:

WORK OVERHEADS

WORKS COST

ADD:

ADMINISTRATION OVER

HEADS

COST OF PRODUCTION

ADD:

SELLING AND

DISTRIBUTION OVER

HEADS

TOTAL COST OF COST OF

SALES

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX

XXX


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0

5

10

15

20

25

30

35

40

45

50

2007-08 2009-2010 2011-12

Wages to cost of production

Source from annual report of G.B.P.L.

YEAR S TOTAL WAGES TOTAL COST PERCENTAGE

2007-08

2008-09

2009-10

2010-11

2011-12

10,919.31

9,127.47

8,463.42

10,758.20

10,355.01

23,393.50

22,786.71

18,159.05

23,911.00

35,679.07

46.67

40.05

46.60

44.99

29.02


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Interpretation:

The wages to cost of production ratio is fluctuating from year to year. (in

year 2007-08 the wages to cost of production ratio is 46.67% and in the year

2011-12, it is decreased to 29.02%.).so their is a decline is total wages amountis the year 2011-12. It very low in the year 2011-12 and in is very high in year

2007-08.


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Stores to cost of production

Source from annual report of GBPL

Interpretation:

The stores to cost of production ratio is fluctuating from year to year . (In

the year 2007- 08)the stores to cost of production ratio is 15.37%, and in the year

2011-12.it is increased to 18.65%). So there is a decline is total stores amount in

the year 2009-10. it very high in the year 2011-12 and very low in the year 2008-

09

0

5

10

15

20

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

YEAR S TOTAL WAGES TOTAL COST PERCENTAGE

2007-08

2008-09

2009-10

2010-11

2011-12

3595.61

1409.63

1253.2

2743.33

6654.27

23393.50

22786.71

18159.05

23911.00

35679.07

15.37

6.19

6.90

11.47

18.65


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53

Other expanses to cost of production

Source from annual report of G.B.P.L

Interpretation:

The other expanses to cost of production ratio is fluctuating from year to year.( in

the year 2007-08 other expanses to cost of production ratio is 37.95% and in the

year 2011- 12 is increased to 52.32% ). So there is a increase is total other

expanses amount in the year 2011-12. it very in the year2010-11, and very low in

the year 2007-08.

0

10

20

30

40

50

60

2007-08 2008-09 2009-10 2010-11 2011-12

YEAR S TOTAL OTHER

EXPENCES

TOTAL COST OF

PRODCTION

PERCENTAGE%

2007-08

2008-09

2009-10

2010-11

2011-12

8878.58

12249.60

8442.43

10409.49

18669.79

23,393.50

22,786.71

18,159.05

23,911.00

35,679.07

37.97

53.75

46.49

43.53

52.32


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54

Total cost of production and trend analysis

YEARS TOTAL COST OF

PRODUCTION

TREND ANALYSIS%

2007-08

2008-09

2009-10

2010-11

2011-12

23,393.50

22,786.71

18,159.05

23,911.00

35,679.07

100.00

97.41

77.62

102.2

152.52

Source annual report of G.B.P.L.

Interpretation:

The trend analysis to cost of production ratio is fluctuating from year to year.( in

the year .

2007-08 the trend analysis to cost of production ratio is 100% and in the year2011-12. It is increased to 152.52%). So there is increase in total trend analysis

amount is the year

2010-11. it very high in the year 2011-12. it very low in the year 2009-10.

0

20

40

60

80

100

120

140

160

2007-08 2008-09 2009-10 2010-11 2011-12


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55

Total cost of production to total sales

Years Total cost of

production

Total sales Percent (%)

2007-08

2008-09

2009-10

2010-11

2011-12

23,393.50

22,786.71

18,159.05

23,911.00

35,679.07

21424.94

18249.94

24738.83

24520.91

34988.93

109.19

124.86

73.40

97.5

101.97


Interpretation:

The total sales to cost of production ratio are fluctuating from year to year. ( in the

year

2007-08 the total sales to cost of production ratio are 109.19% and in the year

2011-12, it is decreased to 101.97%). So there is a decline in total sales amount in

the year 2011-12. It very high in the year 2008-09, and very low in the year 2009-

10.

0

20

40

60

80

100

120

140

2007-082008-092009-102010-112011-12


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56

Profit/loss to total sales

Year Profit/loss Total sales Percentage(%)

2007-08

2008-09

2009-10

2010-11

2011-12

1968.56

4536.77

6579.78

609.91

690.14

21424.94

18249.94

24738.83

24520.91

34988.93

9.19

24.86

26.60

2.48

1.97


Interpretation:

The profit/loss to total sales ratio is fluctuation from year to year .(in the year

2007-08 the total profit/loss to total sales ratio is 9.19%, and in the year 2011-12 ,

it is decreased to -1.97 % ). So there is decline in total profit/loss amount in the

year 2011-12. it very high in the year 2009-10,and very low in the year 2010-11.

0

5

10

15

20

25

30


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57

Proportion expenses to total cost

Year Wages (in %) Stores (in %) Other expenses

(in %)

Total cost (in %)

2007-08

2008-09

2009-10

2010-11

2011-12

46.67

40.05

46.60

44.99

29.02

15.37

6.19

6.90

11.47

18.65

37.97

53.75

46.49

43.53

52.32

100

100

100

100

100


0

10

20

30

40

50

60

2007-08 2008-09 2009-10 2010-11 2011-12


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58

Interpretation:

1.The wages to cost of production ratio is fluctuating from year to year. (in year

2007-08 the wages to cost of production ratio is 46.67% and in the year 2011-12,

it is decreased to 29.02%.).so their is a decline is total wages amount is the year

2011-12. It very low in the year 2011-12 and in is very high in year 2007-08.

2.The stores to cost of production ratio is fluctuating from year to year . (In the

year 2007- 08)the stores to cost of production ratio is 15.37%, and in the year

2011-12,it is increased to 18.65%). So there is a decline is total stores amount in

the year 2011-12. it very high in the year 2011-12 and very low in the year 2008-

09

3.The other expanses to cost of production ratio is fluctuating from year to year.(

in the year 2007-068other expanses to cost of production ratio is 37.95% and in

the year 2011- 12 is increased to 52.32% ). So there is a increase is total other

expanses amount in the year 2011-12. it very in the year2010-11, and very low in

the year 2007-08


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59

FINDINGS

The wages to cost of production ratio is fluctuating from year to year. (in year

2007-08 the wages to cost of production ratio is 46.67% and in the year.

The stores to cost of production ratio is fluctuating from year to year . (In the year

2007-08)the stores to cost of production ratio is 15.37%, and in the year.

The other expanses to cost of production ratio is fluctuating from year to year.( in

the year 2007-08 other expanses to cost of production ratio is 37.95% and in the

year.

The trend analysis to cost of production ratio is fluctuating from year to year.( in

the year 2007-08 the trend analysis to cost of production ratio is 100% and in the

year.

The total sales to cost of production ratio is fluctuating from year to year .( in the

year 2007-08 the total sales to cost of production ratio is 109.19% and in the year.

The profit/loss to total sales ratio is fluctuation from year to year .(in the year

2007-08the total profit/loss to total sales ratio is 9.19%, and in the year.


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60

CONCLUSION

The performance in maintenance the operating cost of the organization is good.

This shows the healthy of financial strength of organization.

The under ground expanses are year to year increased so those expenses try to

minimize that.

Other expanses are increased from year to year. This situation can be avoided by

increasing the sales.

The management is to minimize the operating cost expenditure to the extent

possible to decrease the net profit ratio, which is very low.

The management of GBPL. has to examine efforts to increase the net profit ratio

in the same way as achieved better results in case of gross profit.

From the frame conclusion it is recommended to GBPL are expressed their

comments as follows.

The GBPL is production oriented public ltd company the sales price of based on

the financial viability and as well as the government policies. The GBPL has no

freedom in fixation of purchase prices of the business. The main objective of the

GBPL is to viable the bio energies selling rate to the extent possible. With regard

to Net profit, it is concluded that it is the internal efficiency gains of the

management against the expected targets fixed by the GBPL

Hence the un favorable factors referred under the conclusion at Sl.No.3, 4, 5 may

be negligible.


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BIBLIOGRAPHY

1) FINANCIAL MANAGEMENT ----- I.M.PANDEY

2) FINANCIAL MANAGEMENT ----- S.N.MAHESHWARI

3) FINANCIAL MANAGEMENT ----- PRASANNA

CHANDRA

4) MANAGEMENT ACCOUNTING ----- KHAN & JAIN

5) MANAGEMENT ACCOUNTING ----- R.K. SHARMA&

SHASHI K GUPTA

Websites:

[email protected]

[email protected]

asha priya project

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