Professional Documents
Culture Documents
1
These 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.
2
3. It provides statistical data on the basis of which future
estimates are prepared
4. and quotations are submitted.
3
3. It guides for future production polices. It explains the cost
incurred and there by provides data on the basis of which
production can be appropriately planned.
4
• To identify the different technologies used to extract the
coal from earth.
• To find the associated with the process under various
technologies.
SCOPE OF STUDY:
5
TOOLS & TECHNIQUES OF DATA COLLECTION:
6
COMPANY PROFILE
7
and solar energy, coal continues to be major fuel material in
many industries. Thus coal industry plays an important role
in the industrial development of any country, like India.
Bengal.
Pradesh
8
5. Western coal fields limited (WCFI) – Nagpur, Maharashtra.
ORIGIN:
9
makeshift stove caught fire. The incident was immediately
reported to the local Government.
10
The company become Government Company after
Nizam purchased its shares from London Stock Exchange in
1945.With this SCCL became the first-ever government
management Coal Company in India. Later in the year 1949,
SCCL came under the control of Government of India and
Andhra Pradesh as a joint venture with equity ratio of 49% and
51% respectively.
Manuguru.
11
ADILABAD DISTRICT Bellampalli, Mandamarri and
Srirampur
12
1954 Flame proof Mining Machinery.
Opencast Mines.
Development:
Vision :
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a. Vision shall bring into view untapped potentials and
14
effectively in a socially and environmentally sustainable
marketplace.
performance.
SCCL – MISSION :
15
To strive for self – reliance by optimum utilization of
employed.
the state.
16
environment & ecology and with due regard for corporate social
obligations.
Gloom to Glory :
time age, but they later abandoned. Also the pricing of coal was
sectors like, power, Railways, cement etc. The prices were not
17
consultation with Govt. of AP, and sustained efforts made by the
Elections.
activities.
18
v Innovative programs Launched (Dial-your-GM, Field
Welfare.
19
No. of Mines
April,2010 Distri
Areas U Tot
OC ct
G al
Khamma
Kothagudem 2 2 4
m
Khamma
Yellandu 1 2 3
m
Khamma
Manuguru 1 1 2
m
KGM
4 5 9
REGION
Bellampalli 1 3 4 Adilabad
Mandamarri 7 - 7 Adilabad
Srirampur 8 2 10 Adilabad
BPA.
16 5 21
REGION
Ramagunda Karimnag
5 1 6
m-I ar
Ramagunda Karimnag
4 1 5
m-II ar
Ramagunda Karimnag
2 2 4
m-III ar
Bhupalpally 5 1 6 Warangal
RGM. 16 5 20
20
REGION
Total SCCL 36 15 51
TABLE – 2.1
THE SINGARENI COLLERIES COMPANY
LIMITED
PRODUCTION PROFILE
(Lakh Tonnes)
Ap
200 200 200 200 200 ril
Year
5-06 6-07 7-08 8-09 9-10 201
0
Product 361. 377. 406. 445. 504. 35.0
ion 38 07 04 46 25 2
UG 127. 118. 126. 120. 119.
9.37
Mines 11 76 45 87 69
234. 258. 279. 324. 384. 25.6
OC
27 31 59 59 56 5
TABLE – 2.2
THE SINGARENI COLLERIES COMPANY
LIMITED
21
MANPOWER PROFILE (Lakh
Tonnes)
Year 20 20 20 20 20 20 Apr2
04- 05- 06- 07- 08- 09- 010
05 06 07 08 09 10
Manp 91, 86, 82, 75, 70, 69, 68,84
ower 97 02 22 52 58 04 4
0 5 4 7 6 3
TABLE – 2.3
THE SINGARENI COLLERIES COMPANY
LIMITED
PRODUCTION PROFILE
(Lakh Tonnes)
2004- 2005- 2006- 2007- 2008- 2009-
Year
05 06 07 08 09 10
Over all
productivity 1.62 1.74 1.91 2.10 2.42 2.73
UG-OC
UG mines 0.85 0.89 0.90 1.02 1.05 1.08
22
The term operation here in general refers to any
activity, which is engaged in converting the raw materials into
finished goods or the process of producing or extracting the final
product.
The company produce s the coal from 2 type mines namely open
cast and under ground mines. More specifically this project focuses
on the costs of operations in under ground mines.
Hand section
Long walls
BG panels
Road headers
Continuous miner
Side discharge loaders
Load haul dumpers
23
For the purpose of the detailed study of the production
process of coal in singareni collieries the coal mine Bhupalpally
area was observed.
Blasting the faces with the help of explosives. The face is the place
where the coal is located; the coal will be separated from the earth
using these explosives.
24
conservation of coal. In the mains where the technology of SDL s
is using the coal can be extracted as follows.
25
11. Depreciation of mines.
12. Depreciation of common assets.
13. Interest.
14. Area over heads.
Elements of costs:
Elements of Costs
Material Labour
Other Express
Direct Indirect
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Production or Administration Off Selling Off
Distribution Off
Works Off
Direct Materials:
Direct materials and those materials which can be
identified in the production and can be conveniently measured and
directly charges to the product. Thus, these materials 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.
27
The following are normally classified as direct materials
i. All raw materials like jute in the manufacturing of
gunny bags, pig iron in foundry and fruits in
canning industry.
ii. Material specifically purchased for a specific job,
process or order like glue for a book building,
starch powder for dressing yarn etc...
iii. Parts or components purchased or produced like
batteries for transistor radios and tries for cycles.
iv. Primary packing materials like cartoons,
wrappings, cardboard, boxes, etc... Used to
protect finished product from climate conditions
or far easy handling inside the factory.
Direct Labour:
Direct labour is all labour expended in altering,
construction, composition, confirmation or condition of the
product. In simple words it is that labour which can be
conveniently identified or attributed wholly to a particular job,
product of extended in converting raw materials into finished
goods.
Direct Expenses:
28
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 than direct materials
and direct labour) incurred specifically for a particular, 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.
Overheads:
a. Manufacturing expenses.
b. Administration overheads.
c. Selling overheads.
d. Distribution overheads.
e. Research and development overheads.
29
MINING:
Mining is an economic activity. It does not belong to a
service sector where expenditure is permitted without matching
financial returns. Coal mining activity, therefore, is undertaken not
only to meet the coal demand but also to enhance financial
resources of the coal producer for further advancement and growth.
Even when coal prices are controlled or regulated by the Govt., a
coal producing organization is either given an average price for
coal that is expected to yield a reasonable return on overall
investments by the producer or is given a subsidy as
comprehensive for activities required to be done but are not
economical. The coal mining industry in India is largely in public
sector and guidelines of the Govt., presently (1998), are that, while
approving any coal mining new, reorganization or expansion
project, the project should indicate a return (to be precise- internal
rate of return- IRR) on investment of minimum 17% at 85% level
of projected output. It is, therefore, clear that even the public sector
coal mining activity is expected to be an economic activity. The
private sector, obviously, will like to have similar or more return
on investment. Any mining activity, therefore, has to be viable.
Not only just viable but also that which will give minimum
acceptable return on investment, of course, following law of the
land. Thus all economic activities, including mining are permitted
activities that incur least cost and are viable.
IMPORTANT OF TRENDS:
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to opencast in 1960’s. Today, many erstwhile underground mining
properties. In full or part, are being worked and are being
converted to be worked by opencast. This trend music must be
given due consideration while deciding whether a property should
be worked by opencast or by underground mining to be cheaper by
10-15% or so compared to opencast mining, the property should
not be worked by underground. After all, an underground mine
may have a life of 15 to 20 years and more with in which time
opencast mining become more viable in many cases, by the time
depth is worked by opencast, deeper depth may also become viable
for opencast.
2. Similarly, transport costs by rope haulage are rising
sharply than transport costs by belt conveyor. This is due to the
fact that, a rope haulage system is manpower oriented and wage
cost is increasing substantially each year. Therefore, if there is only
a sight difference between estimated mining costs for rope haulage
and belt system should be preferred if the installation is to last for a
few years. Further, belt conveyors can deal with increased output
in future more affectivity.
31
for such a technology have not yield desired results on sustained
basis and such equipments have ultimately become a Burdon on
the industry.
SCOPE:
32
This is a method of costing by units of production and it
adopted where production is uniform and a continuous affair, units
of output are identical and the cost units are physical and natural.
The cost per unit is determined by dividing the total cost during a
given period by the number of units produced during that period.
This method of costing is generally adopted where an undertaking
is engaged in producing only one type of product or two or more
products of the same kind but of varying grades of quality. The
industries where this method of costing is used are collieries,
sugar, mills, cement works, brick works, paper mills etc. In all
these cases, work is a natural unit of cost.
1. Transport service:
Tramways, Railways, Bus, Transport.
2. Supply service:
Gas supply, Electricity supply, Water supply.
3. Welfare service:
Hospitals, canteen, Libraries.
33
4. Municipal service:
Street lighting, Road maintenance etc.
34
timely furnished, improvements for cannot be properly planned
and executed.
1. Nature of deposit
2. Quantum of projected production and degree of
mechanization. Effect of reduced or increased production
than projected.
3. Requirement and availability of recourses and their phasing:
i. Financial (including loan)
ii. Equipment (including hire), particularly from
indigenous sources.
iii. Manpower (including contact).
4. Proximately of coal consumer and willingness to pay higher
price, if required.
5. Capabilities of management.
6. Law of land.
7. Intrastate required and infrastructure available.
8. Past trends and future projects.
9. Social atmosphere and expectations of the people likely to be
disturbed.
10. Possibilities of early return on capital and rate of return
on capital to be invested.
11. Period for which a facility is to be created and the time
it takes to be created.
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7. Specimen of sheet or statement of cost:
Partic
ulars total cost (Rs) cost per unit (Rs)
36
DIRECT XXX XX
MATERIALS XXX XX
DIRECT LABOUR XXX XX
DIRECT OR
CHANGEABLE
EXP
XXX XX
PRIME COST
ADD:
WORK
OVERHEADS
ADMINISTRATION XXX XX
OVERHEADS
COST OF
PRODUCTION XXXXXXX
ADD: XX
SELLING AND
DISTRIBUTION
OVERHEADS
TOTAL COST OF
COST OF SALES
37
DEPLOYMENT OF SDLS IN UNDER GROUND MINES
YEAR SIMPLEX EMICO TOTAL
YEAR
2005-06 2 0 2
2006-07 6 1 7
2007-08 7 1 8
TOTAL 15 2 17
The average production in KTK 1 per SDL per day for the year
2007-08 is as follows.
38
MINE NO.OF PRODUCTIO PRODUCTION
SDL s N (T) (T) PER
DAY
KTK 1 3 98,120 119
39
Detailed analysis of the idle hours:
Total 52%
Man power:
The actual man shift booked are varying from 25 to 135 per
SDL as there is no uniform practice of booking in different mines.
The average is 58 man shifts per day per SDL
40
The details of cost of production, ASR and profitability of
Hand Section and SDL s at company level during the 2006-07 to
2007-08.
41
(d) Profit/loss:
The total activities at the mine are divided into 39 parts and
each activity is given from 01 to 39 to ascertain the expenditure.
The activity wise costs centers are shown below. The expenditure
booked to the below cost centers is treated as direct cost incurred at
the time.
42
expenditure on the activities on the service and administrative
department etc. the expenditure incurred at workshop. CSP and
G.M. office etc are the examples of the indirect cost booked
through below cost centers.
43
08 VENTILATION AND SANITSTION
10 PROVING FAULT
11 DAILY MAZDOORS
12 MAINTANCE AND REPAIR
44
STATEMENT SHOWING THE OPERATION
COSTS
45
Total Output:
10.75360
46
STATEMENT SHOWING THE OPERATION
COSTS
OF BHOOPALPALLY AREA FOR 2007-08
47
Total Output:
10.88767
(1984.45/2658.16)*100=74.
65%
48
STATEMENT SHOWING THE OPERATION
COSTS
49
Total Output:
10.88767
50
(1534.88/2149.61)*100=71.
40%
51
Total Output:
10.88767
52
(1243.35/1638.10)*100=75.
90%
53
Total Output:
9.79111
54
(1137.01/1655.13)*100=68.
70%
CONCLUSIONS
55
The total operating cost is 2257.06 with the total output of
10.75360 by which the operating cost to total cost % is 87.45 in the
year 2008-09. The total operating cost is 1984.45 with the total
output of 10.56310 by which operating cost to total cost % is 74.65
in the 2007-08. In 2006-07 the total output production is
10.388767 and the total cost % is 71.40%. In 2005-06 the total
output production is 11.41903 and the total cost % is 75.90%. In
the year of 2004-05 the % is 68.70% with the total output
production of 9079111.
SUGGESTIONS
56
Reduce the cost of area.
Reduce the area overheads.
Increase the production which can be done by the
increase the mechanization in the total production
process.
Reduce the indirect cost of workshop and CSP.
Reduce the cost of transport contract.
57
h
58