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Project Report on
MASTER OF COMMERCE
In
BANGALORE UNIVERSITY
SUBMITTED BY
SHILPA .B.S
(Reg. No.13AVCMN034)
43,Dickenson Road,Bangalore-560042
2014-2015
HASANATH COLLEGE FOR WOMEN,BANGALORE Page 1
A Study on Operating Cost at BMTC
CHAPTER.1
INTRODUCTION
Service Sector in India today accounts for more than half of Indian’s GDP.
According to data for the financial year 2009-2010, the share of services,
industry, and agriculture in Indian’s GDP in 55.1%, 26.4%, and 18.5%
respectively. The fact that the service sector now accounts for more than half
the GSP marks a watershed in the evolution of the Indian economy and takes it
closer to the fundamentals of a developed economy. Services or the “tertiary
sector” of the economy covers a wide gamut of activities like trading, banking
& finance, information, real estate, transportation, security, management &
technical consultancy among several others. The various sectors that combine
together to constitute service industry in India are:
1. Trade
2. Hotels and Restaurants
3. Railways
4. Other Transport & Storage
5. Communication (Post, Telecom)
6. Banking
7. Insurance
8. Dwellings
9. Real Estate
10.Business Services
11.Public Administration
12.Defense
13.Personal Services
14.Community Services
15.Other Service
There was marked acceleration in services sector growth in the 80’s and 90’s,
especially in the 90’s. While the share of services in India’s GDP increased by
21% points in the 50years between 1950 and 2000, nearly 40% of that increase
was concentrated in the 90’s. While almost all service sectors participated in
this boom, growth was fastest in communications, banking, hotels and
restaurants, community services, trade, and business services. One of the
reasons for the sudden growth in the services sector in India in the 90’s was the
liberalization in the regulatory framework that gave rise to innovation and
higher exports from the services sector.
The boom in the services sector has been re-actively “jobless”. The rise in
services share in GDP has not accompanied by proportionate increase in the
sector’s share of national employment. Some economists have also cautioned
that service sector growth must be supported by proportionate growth of the
industrial sector, otherwise the service sector grown will not be sustainable, in
the current economic scenario it looks that the boom in the services sector is
here to stay as India is fast emerging as global services hub.
India gross domestic product (GDP) means the total value of all the services
and goods that are manufactured within the territory of the nation during the
specified period of time.
The Indian economy is the second fastest major growing economy in the whole
world with the growing rate of the GDP at 9.4% in 2006-2007. The economy
of India is the 12th biggest in the world for it has the GDP of US$ 1.09 trillion
in 2007.
The Reason for the growth of Services Sector contribution to the India’s GDP-
The contribution of the services sector has increased very rapidly in the India
GDP for many foreign consumers have shown interest in the country’s service
exports. This is due to the fact that India has a large pool of highly skilled, low
cost, and educated workers in the country. The foreign companies seeing this
have started outsourcing their work to India especially in the area of business
services which includes business process outsourcing and information
technology services. This has given a major boost to the services sector in
India, which in its turn has made the sector contribute more to the India GDP.
Meaning:
A Operating Cost is a Cost per unit of a product or service, or the annual cost
incurred on a continuous process. Operating costs do not include capital outlays
or the costs incurred in design and implementation phases of a new process.
engaged in the process of extraction of materials from earth like, coal mines
etc.
The costs, which are incurred to perform the operation of the enterprise, are
called as operating cost.
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.
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. “Cost accounting is the and appropriate allocation of classifying,
recording expenditure for the determination of the costs of products or services,
and to the presentation of suitably; arranged data for the purposes of control
and guidance of management.”It includes the ascertainment of the costs of
every process, operation, services or contrast as may be appropriate. It deals
with the cost of production, selling and distribution. It thus, the provision of
such analysis and classification of expenditure as will enable the total cost of
any particular unit of production to be ascertained with reasonable degree of
accuracy and at the some time to disclose exactly how such total cost is
constituted (i.e. the value of material used, the amount of labour and other
expenses incurred so as to control and reduce the cost).
Arrive at the total costs of These costs are to be accounted for in order to
operation or process, which helps in determining the price of the final
HASANATH COLLEGE FOR WOMEN,BANGALORE Page 6
A Study on Operating Cost at BMTC
Methods of Costing
As per the nature and peculiarities of the business, different Industries follow
different methods to find out the cost of their product. There are different
principles and procedure for doing the costing. However the basic principle and
procedure of costing remain the same. Some of the methods are mentioned
below:
1. Unit Costing
2. Job Costing
3. Contract Costing
4. Batch Costing
5. Operating Costing
6.Process Costing.
7. Multiple Costing
8. Uniform Costing.
Unit Costing: This method also called 'Single output Costing'. This method of
costing is used for products which can be expressed in identical quantitative
units and is suitable for products which are manufactured by continuous
manufacturing activity. Costs are ascertained for convenient units of output.
Examples: Brick making, mining, cement manufacturing, dairy, flour mills etc.
Job Costing: Under this method costs are ascertained for each work order
separately as each job has its own specifications and scope. Examples:
Painting, Car repair, Decoration, Repair of building etc.
Contract Costing: Under this method costing is done for big jobs which
involves heavy expenditure and stretches over a long period and often it is
undertaken at different sites. Each contract is treated as a separate unit for
costing. This is also known as Terminal Costing. Construction of bridges,
roads, buildings, etc. comes under contract costing.
Batch Costing: This method of costing is used where the units produced in a
batch are uniform in nature and design. For the purpose of costing each batch is
treated as a job or separate unit. Industries like Bakery, Pharmaceuticals etc.
usually use batch costing method.
Process Costing: This kind of costing is used for the products which go
through different processes. For example, manufacturing cloths goes through
different process. Fist process is spinning. The output of spinning is yarn. It is a
finished product which can be sold in the market to the weavers as well as use
as a raw material for weaving in the same manufacturing unit. For the purpose
of finding out the cost of yarn, the cost of spinning process is to be ascertained.
The second step is the weaving process. The output of weaving process is cloth
which also can be sold as a finished product in the market. In such case, the
cost of cloth needs to be evaluated. The third process is converting cloth in to
finished product such as shirt or trouser etc. Each process is to be evaluated
separately as the output of each process can be treated as a finished good as
well as consumed as a raw material for the next process. In such industries
process costing is used to ascertaining the cost at each stage of production.
Types of Costing
There are different types or techniques of costing are used in cost accounting.
Different types of costing are used in different industries to analyze and
presenting costs for the purposes of control and managerial decisions. The
generally used types of costing are as follows:
Historical costing: When costs are determined in terms of actual costs and not
in terms of predetermined standards cost is called Historical costing. In this
system of cost accounting, costs are determined only after they have been
HASANATH COLLEGE FOR WOMEN,BANGALORE Page 10
A Study on Operating Cost at BMTC
Double entry system of account is being used by large manufacturing firms and
they adopt one of the following two methods:
ledgers i.e. Stores Ledger, Work-in-progress Ledger and Finished Stock Ledger
are also maintained in addition to the General Ledger, Sales Bought Ledger
and Sales Ledger.
Under this method, no costing profit and loss account is prepared since
only one set of account is maintained. Therefore, there is no need for
Costing Profit and Loss Account: A separate Costing Profit and Loss
Account is prepared for determining the profit or loss of a particular period
when cost accounts are maintained independent of financial accounts. This
account is debited with the cost of sales and credited with the sales value. It is
also debited with items like abnormal losses, under-absorption of overheads,
loss or sale of special jobs etc., and credited with items like abnormal gains,
over-absorption of overheads, profit on sale of special jobs, etc. The balance of
this account will indicate the profit or loss as per cost records which should be
reconciled with the profit or loss as per financial records.
ADVANTAGES OF COSTACCOUNTANCY :
1. It enables a concern to measure the efficiency and then to maintain and
improve it. This can be done with the help of comparison of data made
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.
beyond deployment. Following are some of the ways that the toolkit reduces
operating costs:
Operational portability
If operational conditions require that the application be moved to another
platform, this can be quickly performed since the application is platform-
independent.
Ease of maintenance
During operation, it is common to discover that application changes are
required. The environment and the distributed nature of the application
supports easy, quick, and universal application updates no matter how
many resources application delivery channels and users are affected.
1. Establish what the vehicle's Fixed Cost value is (see Fixed Costs Table
below).
2. Determine the Running Cost value (see appropriate Running Costs
Table below).
3. Add these two figures together (Fixed Cost and Running Cost) to get the
Total Vehicle Operating Cost in cents per kilometer.
Fixed Costs
(Add a 30% loading for a driver with a driver's license held for less than 5
years)
It is assumed that:
Vehicles below Rs 200 000 are fitted with a VESA level 4 alarm /
immobilizer device.
Vehicles above Rs 200 000 are fitted with a vehicle-tracking device.
Hire purchase repayments are not included in the calculation of the vehicle's
Fixed Cost values.
Select from the first column the purchase price (not the current value) you paid
for the vehicle. It does not matter whether you bought it new or used. Decide
how many kilometers you travel on average each year (include both business
and personal travel). The value depicted where the row and column meet is the
Fixed Cost value of the vehicle.
<10 000 10 001 15 001 20 001 25 001 30 001 35 001 >40 001
to to to to to to
15 000 20 000 25 000 30 000 35 000 40 000
up to R30 000 93 62 47 38 32 28 25 22
Rs:30 001 –
157 104 79 63 53 47 41 37
Rs:50 000
Rs:50 001 –
237 158 119 96 81 71 63 57
Rs:75 000
Rs:s:75 001 –
318 213 160 129 108 95 84 76
Rs:100 000
Rs:100 001 –
344 230 173 140 118 103 92 83
Rs:125 000
Rs:125 001 –
415 277 209 169 142 124 110 100
Rs:150 000
Rs:150 001 –
487 325 245 198 166 146 130 117
Rs:175 000
Rs:175 001 –
560 374 281 227 191 168 149 135
Rs:200 000
Rs:200 001 –
704 470 354 286 240 211 187 169
Rs:250 000
Rs:250 001 –
788 526 396 320 269 237 210 191
Rs:300 000
Rs:300 001 –
927 619 466 377 317 279 247 224
Rs:350 000
Rs:350 001 –
1067 713 536 434 365 321 285 258
Rs:400 000
More than
1183 790 594 481 404 356 316 286
Rs:400 001
Running Costs
Select the appropriate table depending on the type of vehicle and the type of
fuel. (Note: Ordinary vehicles include passenger cars and multi purpose
vehicles (MPVs), while light commercial vehicles (LCVs) include bakkies
and double-cabs with a load box). Select the appropriate engine capacity of the
vehicle. Multiply Column A (fuel factor) by the current fuel price in Rounds
per liter. The resultant figure will be in cents per kilometer. To this,
add Column B (service and repair costs) AND Column C (tire costs).
Example:
If the vehicle has an engine capacity of 1.6 and is petrol driven, choose the
Running Cost Table for Petrol Vehicles and select the engine capacity 1501 -
1800.
Multiply Column A (8.03) by the current petrol price (R11.77*) = 94.51 (*Fuel
price used for example only. Use the latest fuel price in your calculations.)
Where applicable, add the following percentages to the Running Costs only:
Fuel Maintenance
A B C
A B C
A B C
A B C
Fuel Maintenance
A B C
A B C
CHAPTER 2
RESEARCH DESIGN
DEFINITION:
A detailed outline of how an investigation will take place. A research design
will typically include how data is to be collected, what instruments will be
employed, how the instruments will be used and the intended means for
analyzing data collected.
MEANING:
After deciding the basic aspects of research project (i.e. formulating research
problem, objectives of research, data requirement, sample design, etc) and
before the commencement of work of research project, the researcher has to
prepare research design. It is a major step in the research process /procedure.
The research work will be conducted (i.e. data collection, etc) as per the
research design prepared.
Research design means to prepare detailed plan and procedures for the conduct
of the research project.
It is like preparing a master plan/blue print for the conduct of formal
investigation.
It is the basic plan that guides researcher in the execution of the research
project undertaken. It is like road map which enables the researcher to conduct
various activities for the completion of research project.
In short, research design is a systematic planning, organizing and executing a
research project within specified time limit and resource allocation. Research
design tells the type of data to be collected, the sources of data and the
SCOPE OF STUDY:
The area of the study of this project is to analyses the differences in the cost on
the profitability of the firms in manufacturing and service industries. Only
2010-11 and 2013-2014 annual reports have been studied and the operating
leverage of the company.
LIMITATIONS OF STUDY:-
The most important limitation of the study is that the study solely
depends on the published data and documents such as balance sheet and
income statement.
Lack of availability of full data.
Specified time period was not sufficient.
It is not possible to have an in depth study because of limited
information.
RESEARCH METHODOLOGY:
Meaning:
Secondary Source:
Data collection methods, the study is based on both secondary and examines
the total costs vs. operating costs. The results are drawn mainly from the
primary and secondary data collected.
Secondary data has been collected from the various sources such as
Annual reports.
Text books.
CHAPTERISATION OVERVIEW:
Chapte-1: Introduction-
It is on introduction of “ Operating Cost ” with special reference of BMTC.
In this last chapter we can give some suggestion to company for adopting new
technology and improvement of services and to help for a making of good
profit of the company.
CHAPTER-3
COMPANY PROFILE
HISTORY OF BMTC
PERIOD COVERED:
MANAGEMENT:
The amended KSRTC Act 1982 provides for the management of the
Corporation by Board of Directors. The Board of the Bangalore Metropolitan
Transport Corporation as on 31st March 2013 consisted of 11 official Directors
and 6 non officials Directors. The Government of Karnataka appoints the
Official Directors representing the State Government and also non official
Directors. The Official Directors representing Central Government are
nominated by Government of India.
ADMINISTRATIVE SETUP:
aged vehicles were scrapped/transferred and removed from the fleet during the
year.
OPERATIONAL EFFICIENCY:
b. Average Effective Km’s. operated per day: During the year 1996-97 the
daily service kilometers operated were in the order of 3.41 lakhs only. The
Corporation has increased the service kilometers by augmenting more and
more schedules year after year. This has helped in improving the service
kilometers to 4.95 lakhs in 2000-01, 5.63 lakhs in 2001-02, 6.07 lakhs in
2002-03, 7.11 lakhs in 2003-04, 8.15 lakhs in 2004-05, 8.67 lakhs in 2005-
06, 9.14 lakhs in 2006-07, 10.29 lakhs in 2007-08, 11.13 lakhs in 2008-
09,12.11 lakhs in 2009-10, 12.55 lakhs in 2010-11,12.72 lakhs in 2011- 12,
13.22 lakhs and 2012-13, During the year under report the corporation has
operated 13.74 lakhs effective km’s per day.
c. Average Vehicle Utilization: The average vehicle utilization performed by
the vehicles of the corporation during the year under report is recorded at
224.6 km’s per vehicle per day as against the achievement of 222.1 km’s.
recorded during the year 2010-11. There has been an increase of vehicle
utilization by 2.5 km’s. per vehicle per day over the previous year. The
vehicle utilization was of the order of 193.9 km’s per day during 1996-97.
f. Rate of Accidents per lakh kilometers: The Corporation has recorded the
Accident rate per lakh km’s of 0.13 during the year 2012-13 as compared to
0.10 recorded during 2011-12. The Accident rate was in the order of 0.26 in
the year 1996-97.
g. Financial Performance:
1. Revenue: The Corporation has recorded significant improvement on the
financial front. During the year under report it has realized Traffic
Revenue of Rs. 151600.16 lakh as against Rs. 138624.61 lakh realized
during 2012-13 showing 13.4% growth. Added to this, the Corporation
has realized Rs.11686.62 lakh by way of revenue from other sources
during the year under report as against Rs. 11810.98 lakh realized during
previous year. Thus during the year under report the Corporation has
3. Margin: With the above revenue realization and the cost of operations,
the Corporation has been able to record a profit of Rs.2141.54 lakh
during the year under report as against the profit of Rs. 5034.98 lakh
recorded during the previous year.
The Corporation has been conferred with the following awards during
the year 2013-14.
a. ASRTC Productivity award for minimum operational cost (without
the element of tax) –urban service for the year 2011-12.
b. ASRTC Productivity award for hihest tyre performance –urban
service for the year 2011-12.
c. Greentech foundation award 2013 in the category of public utility
services organisation for outstanding achievement in safety
management.
d. IIMM Corporate exellence award in supply chain management .
e. 60th UITP Award for customer services innovation for “innovative
initiative on customer need based pertion of service and
development of transport infrastructure in bangalore metropolitan
area’’, May 2013
b. Employee Welfare:
Uniform has been issued to Administrative staff to maintain dress
code
Entering into MOU with selected list of 39 hospitals for medical
treatment for employees and their dependants
Voluntary Retirement Scheme and Welfare Fund (VRS and WF)
for distressed employees
Janatha group Insurance Scheme for accidental benefits to all
employees, for Rs.1.00 lakh for loss of life while on duty
A novel insurance scheme of Rs 3.00 lakh payable to the dependent
of deceased employees with 25% share to parents for death while in
service
Providing financial assistance for higher studies for employees and
their children
Encouraging the employees children with meritorious awards
Free coaching for SSLC failed employees children
Financial assistance towards diagnosis of major diseases
Functioning of Ladies grievance committee to redress all grievances
of female employees of the Corporation
Summer camp for employees’ children
Training activities for employees and their dependants
c. Financial front:
Tendering of Diesel supply.
Tendering in chassis procurement
Table3.1
Bangalore-560070
3 Sri. Anjum Parwez, I.A.S., Director
Managing Director, (Official)
BMTC Central Office, K.H.Road, Shanthinagar,
Bangalore-560027.
4 Sri.P.N. Shrinivasachari, IAS., Director
Principal Secretary to Govt, Transport Department, M.S (Official)
Building bangalore.
Government of Karnataka, M.S.Building,
Bangalore-560001
5 Sri. T. Shyambhat, I.A.S., Director
Commissioner, Bangalore development authority, (Official)
Bangalore-560002.
6 Sri. Kumar Pushkar, IFS Director
Director (information technology)
Bmtc Bangalore.
Three Board Meetings have been conducted during the year 2012-13 and 64
subjects have been placed before the Board for consideration and passed 64
Resolutions.
Services:
Table:3.2
VAJRA SERVICES:
Features like kneeling mechanism, collapsible exit floor and room for wheel-
chair make them physically challenged friendly buses too. Volvo buses are
being operated under the brand name “Vajra Services”. These are mostly
deployed on high potential I.T. sectors.
BIG-10 Services:
• BIG10 is the name given to Suvarna services operated on all the 10 major
traffic corridors of the city that connect it with the surrounding sub-urbs.
They are Hosur road, Whitefield, Bannerghatta road, Sarjpura road,
Kanakapura road, Mysore road, Magadi Road, Nelamangala Road, Bellary
Road, Hoskote Road etc. These services are operated on a Suvarna fare in
specially branded buses. These services operated from important traffic
points from each of the 12 roads providing direct connectivity to those
traveling between the sub-urbss and city center.
• These services are expected to reduce congestion in the city center due to
reduction of cars and two-wheelers. At present 159 such services are in
operation.
Kilometers covered:
Table-3.3
Variation over previous
Sl Performance year
Factors
No
2011-12 2012-13 Difference Percentage
The details of vehicles held for operation with their utilization during the
year under report as compared with the position as on 31-3-2012 are furnished
in Table-3.4
Table-3.4
5 Percentage of vehicles
5.5 - 5.5 4.9 - 4.9
Off-road
8 Average carrying
capacity
During the year under report, on an average the Corporation (only BMTC
owned fleet) held 6069.0 vehicles per day. Out of them 5636.2 vehicles were
kept on-road every day, 300.4vehicles were off-road and 132.4 vehicles were
kept as road-worthy spare. In all 4.9% of the vehicles were held off-road
during the year under report. Corporation has recorded a fleet utilization of
92.9% during the year under report as compared to 92.3% recorded during the
previous year. Vehicle utilization of 224.6 km’s per vehicle per day has been
achieved during the period on effective km’s and 234.3 km’s on gross km’s as
against the performance of 222.1 km’s and 237.3 km’s recorded during last
year period respectively.
On an average 45.30 lakh passengers were carried every day by the
BMTC buses.
COMMUTER PASS SYSTEM : BMTC has one of the best and well-
patronized Commuter pass system. A variety of passes tailored to suit the
travel requirements of different sections of society are made available to the
public. The system is very popular owing to services offered at modest rates to
these pass users, it accounts for more than half of the traffic revenue earnings
of BMTC. They include
1. DAY PASSES
Bus Day :
Bus day, Car-free day, Bi-cycle day are observed by environment conscious
societies the world over. The intention behind this exercise is to draw
attention of the public to the serious issue of pollution and deterioration in
mobility in fast growing cities. Induce a shift from personal mode (cars and
two wheelers) to public mode of transport.
BMTC started the Bus day campaign from the month of February 2010 in
the IT intensive areas like Electronic city & Whitefield and is observing the
first anniversary on 4th February 2011, after successful conduct of 12
monthly Bus days.
The campaign initially restricted to I.T. intensive areas with high
concentration of cars and two wheeler users is now observed in the whole
city of Bangalore.
Fleet Position:
Table-3.5
Sl. Position as on Position as on
Factors
No. 31-03-2012 31-03-2013
f. Corona 0 15
2 Departmental vehicles
b. Jeeps 30 30
c. Trucks 12 13
FINANCE:-
Table-3.6
Receipts Repay-
Position as on Position as on
During ment in
31-03-2012 31-03-2013
Sl. Source 2012-13 2012-13
I State Govt.
1. Capital
Contribution 12.25 0.01 - - 12.25 0.01
II Union Govt.:
1. Capital - - - - - -
Contribution
2. Equity Capital - - - - - -
Resources
V Loans:
a. Debentures
b. Rural Debn.
c. Commercial
Banks 9410.33 4.85 16900.00 7150.27 19160.06 9.19
d. LIC
e. IDBI
g. Deferred payment
in ACGL, GOA
h. SIHS Scheme
j. Others
-: LABOUR:-
Industrial Disputes:
During the year, totally 229 Industrial disputes were raised by the
employees of the Corporation at various levels like conciliation, Labour Court,
Industrial Tribunal and Hon’ble High Court of Karnataka. Totally, 299 disputes
have been disposed out of which 153 cases were disposed in favor of the
Corporation and 146 cases were disposed against the Corporation. 637 cases
including earlier references were pending as on 31.03.2013
Totally 202 accident claim cases were disposed before the MACT and
High Court of Karnataka during the year 2012-13. Out of these, 30 cases were
disposed in favor of the Corporation and 172 cases were disposed against the
Corporation including 7 cases, which came up before the LokAdalath
(JanathaNyayalaya). During the year the Corporation has deposited
Rs.3,11,71,434/-. In all, 192 accident claim cases were pending for disposal as
on 31-03-2013 before Motor Accident Claims Tribunal and Hon’ble High
Court of Karnataka. From 30-12-2006 all the vehicles of the Corporation have
been insured with United Insurance Co. They will contest the claims in the
courts for all the accidents occurring after that date the company will contest
the claims and the responsibility of providing compensation lies with the
company.
1.Gratuity:
3.Medical Aid:
Employees met with an accident while on duty and sustains injuries are
extended with best possible medical treatment either in Government or in
private hospital depending on the nature of the injury. Besides, eligible
compensation amount as per the provisions of the Workmen’s Compensation
Act is also deposited with the concerned Authority. During the report period,
an amount of Rs.7,48,936/- has been deposited as compensation in respect of
one of the deceased employee.
the deceased employees is entitled for lump sum benefit of Rs.25,000/- along
with contribution of the employees plus interest. During the year under Report,
a sum of Rs.84.36 lakhs has been paid from KSRTC Death-cum-Retirement
Benefit Fund to 372 employees who were retired/resigned, expired and
dismissed. Apart from this, an amount of Rs.3000/- is also paid as an additional
monitory support to the dependents of the employees expired from the MIWF.
6.Awards to the meritorious children of employees:
Table.3.7
90 and
SSLC Rs.3000/- Rs.2500/-
above
90 and
IInd PUC Rs.3500/- Rs.3000/-
above
During the year 684 children of the employees of BMTC have availed
the benefit amounting to Rs.15.33 lakhs.
HUMAN RESOURCES:-
Objectives of department:
vehicle defects, stress management, yoga and maintaining good health. The
above said training has been given to 7463 drivers during 2012-13. The results
of the training are encouraging and there is improvement in KMPL.
.
Program on HIV/AIDS:
The program is organized to all the employees of the Corporation
regarding HIV/AIDS awareness.
ISO certification:
JN-NURM Projects:-
Picture:-Jnnurm bus
Table.3.8
Total 3000.00
BMTC has identified 45 locations for Traffic and Transit Management Centers
(TTMCs) in and around Bangalore city which is incorporated in its vision plan.
These TTMC’s are urban transport infrastructure projects included in the
Traffic & Transportation Plan (CTTP) for Bruhat Bangalore city approved by
Government of Karnataka. These projects are aimed at providing enhanced
public transport services to commuters through the state of art - technology bus
terminal having Bus maintenance facilities, Public amenities, Park and Ride
facilities etc. These act as transportation hubs by providing inter modal
connectivity besides addressing the issues of traffic congestion and
environmental concerns (air pollution) in the long run.
In the first phase, 10 TTMC projects are taken up under Jn-Nurm scheme at
a project cost of Rs.333.00 crores under central and state financial assistance of
35% from GOI and 15% from GOK and 50% from BMTC internal sources.
In the 2nd phase, TTMC Hebbal project is planned to take up under Public
Private Partnership (PPP) and obtained approval from GOK and 3 more TTMC
projects viz., TTMCs Indiranagar, Katriguppe & Jayanagar ‘T’ Block are
planned to take up under PPP through Single Window Clearance.
BMTC being the unique urban transport service provider in Bruhat Bangalore
city with prime objective to provide affordable, economic, efficient, hi-quality,
eco and commuter friendly bus transport system to the citizens of Bruhat
Bangalore has 12 more TTMC projects in pipeline at, BTM Layout, HSR
Layout, Nandini Layout, Nagarabhavi, Kengeri, Yelahanka, MS.
CHAPTER.4
Data collected during monitoring will only be useful if analyzed and reported
appropriately.
Data analysis:
When planning for monitoring and evaluation you will have asked yourself a
series of questions. These now need to be broken down into a set of sub-
questions which will enable you to find patterns for analysis. Factors such as
what influenced or prevented change, whether there were unexpected
outcomes, and whether the planned benefits were those most valued by users
can be investigated. In this way information can be obtained not just about
overall outcomes, but about which particular groups benefited or did not
receive benefits, and in what circumstances
Interpretation:
Interpretation means looking beyond the data itself and asking what the results
mean in relation to your evaluation questions. Be wary of assuming that there
are links of cause and effect between your project activities and results. Involve
other people in this level of interpretation and, where appropriate, acknowledge
in your report the possibility of other interpretations. Remember to place data
in context, bringing out the individual differences behind the responses.
Operating Cost:
The costs, which are incurred to perform the operation of the enterprise, are
called as operating cost.
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.
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. “Cost accounting
is the and appropriate allocation of classifying, recording expenditure for the
determination of the costs of products or services, and to the presentation of suitably;
arranged data for the purposes of control and guidance of management.”It includes
the ascertainment of the costs of every process, operation, services or contrast as may
be appropriate. It deals with the cost of production, selling and distribution. It thus,
the provision of such analysis and classification of expenditure as will enable the
total cost of any particular 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 labour and other expenses
incurred so as to control and reduce the cost). arrive at the total costs of these costs
are to be accounted for in order to 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
services, and to the presentation of suitably; arranged data for the purposes of control
and guide of management.”It includes the ascertainment of the costs of every
process, contrast as may be operation, services or appropriate. It deals with the cost
of production, selling and distribution. It thus, the provision of such analysis and
classification of expenditure as will enable the total cost of any particular 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 used, the amount
of material and other expenses incurred) so as to control and reduce the cost.
Table-4.1
( Amount in crores )
PARTICULARS AMOUNT
Sales 1000.63
Contribution 153.51
EBIT 55.85
EBT/PROFIT 55.18
Analysis:
The above Table Shows Income Statement of the company for the year 2010-
11. The Net Sales is 1000.63 crores. Variable Cost is 847.12 crores.
Contribution is 153.51 crores. Fixed Cost is 97.66 crores. EBIT is 55.85 crores.
Interest is 0.67 crores. EBT/PROFIT is 55.18 crores.
Graph-4.1:
AMOUNT
1200
1000.63
1000
847.12
800
600
400
200 153.51
97.66 55.85 55.18
0.67
0
Sales Less: Contribution Less: Fixed EBIT Less: Interest EBT/PROFIT
Variable Cost Cost (Interest on
Government
loan & other
loans )
INTERPRETATION:
The above Graph shows that Income Statement for the year 2010-11. In which
profit is shows 55.18 crores. Here variable cost is a main key factor for the
profit. Here the Operating Cost is favorable.
Table-4.2:
( Amount in crores )
PARTICULARS AMOUNT
Sales 1130.33
Contribution 169.33
EBIT 66.52
EBT/PROFIT 65.13
ANALYSIS:
The above Table Shows Income Statement of the company for the year 2011-
12. The Net Sales is 1130.33 crores. Variable Cost is 960.40 crores.
Contribution is 169.33 crores. Fixed Cost is 103.41 crores. EBIT is 66.52
crores. Interest is 1.39 crores. EBT/PROFIT is 65.13 crores.
Graph-4.2:
AMOUNT
1130.33
1200
960.4
1000
800
600
400 169.33
103.41 66.52 65.13
200 1.39
0
INTERPRETATION:
The above Graph in the year 2011-12 sales volume is increased by 129.7
crores, when compared to the previous financial year. In the same way profit of
the company also increased by 9.95 crores from the year 2009-2010 to 2010-
2011, so here the Operating Cost of the company is increased.
Table-4.3:
( Amount in crores )
PARTICULARS AMOUNT
Sales 1327.07
Contribution 175.11
EBIT 60.04
EBT/PROFIT 50.35
ANALYSIS:
The above Table Shows Income Statement of the company for the year 2012-
13. The Net Sales is 1327.07 crores. Variable Cost is 1151.96 crores.
Contribution is 175.11 crores. Fixed Cost is 115.07 crores. EBIT is 60.04
crores. Interest is 9.69 crores. EBT/PROFIT is 50.35 crores.
Graph-4.3:
AMOUNT
1400 1327.07
1151.96
1200
1000
800
600
400
175.11
200 115.07
60.04 9.69 50.35
0
Sales Less: Contribution Less: Fixed EBIT Less: Interest EBT/PROFIT
Variable Cost Cost (Interest on
Government
loan & other
loans )
INTERPRETATION:
The above graph reveals that sales of the company is increased by 196.74
crores, but the profit of the company is decreased by 50.35 crores when
compared to the previous financial year. Here in the year 2012-13 the fixed
cost value is increased as compare to previous year value, so the operating cost
is increased to the company.
Table-4.4:
( Amount in crores )
PARTICULARS AMOUNT
Sales 1503.07
Contribution 153.08
EBIT 33.71
EBT/PROFIT 21.42
ANALYSIS:
The above Table Shows Income Statement of the company for the year 2013-
14. The Net Sales is 1503.07 crores. Variable Cost is 1349.99 crores.
Contribution is 153.08 crores. Fixed Cost is 119.37 crores. EBIT is 33.71
crores. Interest is12.29 crores. EBT/PROFIT is 21.42 crores.
Graph-4.4:
AMOUNT
1600 1503.07
1349.99
1400
1200
1000
800
600
400
153.08 119.37
200 33.71 12.29 21.42
0
Sales Less: Contribution Less: Fixed EBIT Less: Interest EBT/PROFIT
Variable Cost Cost (Interest on
Government
loan & other
loans )
INTERPRETATION:
The above Graph of 2013-14 shows that the net sales of the company is
increased as compared to the previous year net sales, and the variable cost and
fixed cost is also increased by 1349.99 crores and 119.37 crores, but the
interest rate and profit is decreased as compare to previous financial year, the
both will be decreased by approximately 5% of the company.
Table-4.5:
Analysis:
The above Table Shows the Operating Expenses incurred for payments and
provision for employees of the company for the year 2010-11 is 325.05 crores,
2011-12 is 398.12 crores, 2012-13 is 464.84 crores, 2013-14 is 583.55 crores
expenses will be incurred.
Graph-4.5:
45
40
35
2010-11
30
25 2011-12
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above graph shows that the operating expenses of the payments to and
provision for employees expenses is increased by way the of year to year, when
compared to the previous financial year 2010-11 is 398.12 crores expenses
incurred but in the 2011-12 it will increased 66.72 crores and also the expenses
is increased by 2012-13 for the financial year of the company upto 583.55
crores.
Here the company will increased the payment and provision for
employees to making a good profit and to motivate the employees to work very
sincerely and honestly.
HASANATH COLLEGE FOR WOMEN,BANGALORE Page 82
A Study on Operating Cost at BMTC
Table-4.6:
The Table Showing the HSD ( High Speed Diesel ) Of the Financial
Year
2010-11 359.27
2011-12 412.06
2012-13 495.83
2013-14 534.27
Analysis:
The above Table Shows the Operating Expenses incurred for HSD (
High Speed Diesel ) of the company for the year 2010-11 is 359.27 crores,
2011-12 is 412.06 crores, 2012-13 is 495.83 crores, 2013-14 is 534.27 crores
will be incurred.
Graph-4.6:
The Graph Shows the HSD ( High Speed Diesel ) of Financial Year
45
40
35
30 2010-11
25 2011-12
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above graph shows that the operating expenses of the HSD ( High Speed
Diesel ) is increased by compared to year to year, when compare to previous
year the expenses is increased by 2010-11 is 359.27 crores, 2011-12 is 412.06
crores, 2012-13 is 495.83 crores and 2013-14 is 534.27 crores.
Here the company will increased the HSD expenses for increased the capacity
of bus speed and engine value and to giving the good service to public.
Table-4.7:
2010-11 74.74
2011-12 57.03
2012-13 88.18
2013-14 102.28
Analysis:
The above Table Shows the Operating Expenses incurred for spare
parts of the company for the year 2010-11 is 74.74 crores, 2011-12 is 57.03
crores, and 2012-13 is 88.18 crores, 2013-14 is 102.28 crores will be incurred.
Graph-4.7:
28.46
43.85 2010-11
2011-12
2012-13
29.27 2013-14
27.01
INTERPRETATION:
The above graph shows that the operating expenses of the spare parts
of the company is favorable in the year 2010-11 is 74.74 crores, but it is
decreased the value in the year 2011-12 is 57.03 crores, but automatically it is
increased the value of 57.03 crores to 88.18 crores in the year 2012-13. And
also the expenses of the company is increased by 102.28 crores in 2013-14.
Here the company will purchase spare parts for introducing new
machines for garage and adopting new technology in buses for implementation
and giving service to the public, it is the way of increasing the capital of
company.
Table-4.8:
The Table Showing the Motor Vehicle Tax Of the Financial Year
2010-11 49.91
2011-12 55.68
2012-13 66.62
2013-14 76.94
Analysis:
The above Table Shows the Operating Expenses incurred for motor vehicle tax
of the company for the year 2010-11 is 49.91 crores, 2011-12 is 55.68
crores, and 2012-13 is 66.62 crores, in 2013-14 is 76.94 crores will be
incurred.
Graph-4.8:
28.46
43.85 2010-11
2011-12
2012-13
29.27 2013-14
27.01
INTERPRETATION:
Here in motor vehicle tax of the company will introduced new high
qualified and new technology to adopting that motor vehicle (bus), so the tax
will be increased year to year.
Table-4.9:
The Table Showing the Other Operating Cost Of the Financial Year
2010-11 28.46
2011-12 29.27
2012-13 27.01
2013-14 43.85
Analysis:
The above Table Shows the Operating Expenses incurred for Other Operating
Cost of the company for the year 2010-11 is 28.46 crores.2011-12 is 29.27
crores, and 2012-13 is 27.01 crores, 2013-14 is 43.85 crores will be incurred.
Graph-4.9:
45
40
35 2010-11
30
2011-12
25
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above Graph shows that the Expenses of Other Operating Cost in 2010-11
it is favorable. The expenses is increased in the year 2011-12 upto 29.27
crores, but it is decreased compared to previous year operating cost it will in
the year 2012-13 is 27.01 crores, suddenly in the year 2013-14 increased 43.85
crores of the company expenses.
Table-4.10:
2010-11:
Operating Leverage =
Contribution
EBIT
= 153.51
55.85
= 2.75 times
2011-12:
Contribution
169.33
=…………..……………..
66.52
= 2.54 times
2012-13:
Contribution
175.11
=…………..……………..
60.04
= 2.92 times
2013-14:
Contribution
153.08
=…………..……………..
33.7
= 4.54 times
Analysis:
The above Table shows that the Operating Leverage of the company in the year
of 2010-11 is 2.75 times, 2011-12 is 2.54 times, 2012-13 is 2.92 times and
2013-14 is 4.54 times.
Graph-4.10:
2010-11 to 2013-14
4.5
3.5
2.5
1.5
0.5
0
5 4 3 2 1 0
INTERPRETATION:
The above graph shows that the Operating Leverage of year 2010-11 is
2.75 times, after next year it is decreased by in 2011-12 is 2.54 times, next
financial year it is increased in the year 2012-13 is 2.92 times and 2013-14 is
4.54 times of the company.
Here the graph reveals that the operating leverage affected on operating
activities of the company, hence the operating leverage is helpful to calculate
the total cost of the company.
Graph.4.11:
The Graph shows the Total Operating Cost Sheet of the Financial Year
2010-11 To 2012-13
80000
70000
60000
50000
40000
30000
20000
10000
INTERPRETATION:-
The above graph shows that the operating cost sheet of the company is
increased by one year to another year, when compared to previous year
operating cost sheet, the total operating cost is increased to year to year.
Here the company is increased the operating cost in every financial year
because of making the good profit and to gain more profit of the business to the
company income.
Table 4.11
The Table shows the Total Operating Cost Sheet of the Financial Year
2010-11 to 2012-13
Analysis
The above table shows the operating cost sheet of the company for the year
2010-11 to 2012-13. Here in the in the 2010-11 the total operating cost sheet is
69651.94 lakhs, 2011-12 is 77362.43 and in 2012-13 is 84803.14 lakhs
incurred.
CHAPTER-5
FINDINGS:-
2. From the above analysis in the year 2012-13 the profit of the company is
decreased as compared other previous year profit, but the sales is
increased.
7. In the above analysis and study we don’t have any direct tax because it’s
a service oriented govt. company.
10. The operating leverage is increased in the total cost of the company from
year to year.
11. The main aim of the company is giving good service to the public from
adopting new technology and innovation of the company.
SUGGESTION
1.To reduce the expenses and increase the profits. To maintain the same
leverage in between operating leverage of the company.
10.BMTC should gain state and national competitive advantage over the
other competing firms.
11.To adopt new more technology in the technical service to the giving
good facility to the public.
12.To maintain the cleaning and other facility in bus stations and also in
satellite stations.
13.BMTC should make strategic value chain analysis for the efficient
utilization and control over the resources.
14.To give a proper training to the employees for how to behave with
passengers in the some miss understanding that time.
CONCLUSION:-
1. Profit of the company is increasing from one year to another year. Only
in the year 2012-13 and 2013-14 it is seen down continuously.
2. Costs of the company is increasing from one year to another year. When
the profit is decrease also cost is not decreased.
3. Performance of the company is increasing the profit of the society for the
help of service industry.
4. Interest is decreasing from one year to another next year. But only in the
year 2013-14 it is increased more.
5. Operating expenses and operating costs are also increasing by one year
to another year.
BIBLIOGRAPHY
Web Addresses:-
www.bmtc.co.in
www.mybmtc.com
www.serviceindustry.com
www.google.com
www.wikipedia.com