INTRODUCTION

COST:
Cost is essential in every walk of our life national, domestic and Business. A cost is
prepared to have effective utilization of funds and for the realization of objective as
efficiently as possible. Costing is a powerful tool to the management for performing its
functions i.e., formulation plans, coordination activities and controlling operations etc.,
efficiently. For efficient and effective management planning and control are tow highly
essential functions. Costing and cost control provide a set of basic techniques for planning
and control.
A cost fixes a target in terms of rupees or quantities against which the actual performance is
measured. A cost is closely related to both the management function as well as the
accounting function of an organization.
As the size of the organization increases, the need for costing is correspondingly more
because a cost is an effective tool of planning and control. Cost is helpful in coordinating the
various activities (such as production, sales, purchase etc) of the organization with result that
all the activities precede according to the objective. Costs are means of communication.
Ideas of the top management are given the practical shape. As the activities of various
department heads are coordinated at the much needed for the very success of an
organization. Cost is necessary to future to motivate the staff associated, to coordinate the
activities of different departments and to control the performance of various persons
operating at different levels.
Costs may be divided into two basic classes. Capital and operating costs. Capital cost is
directed towards proposed expenditure for new projects and often require special financing.

The operating costs are directed towards achieving short-term operational goals of the
organization for instance, production or profit goals in a business firm. Operating costs may
be sub-divided into various departmental of functional costs.

Definition of 'Cost-Benefit Analysis'

A process by which business decisions are analyzed. The benefits of a given situation or
business-related action are summed and then the costs associated with taking that action are
subtracted. Some consultants or analysts also build the model to put a dollar value on
intangible items, such as the benefits and costs associated with living in a certain town. Most
analysts will also factor opportunity cost into such equations.
You may have been intensely creative in generating solutions to a problem, and rigorous in
your selection of the best one available. This solution may still not be worth implementing,
as you may invest a lot of time and money in solving a problem that is not worthy of this
effort.
Cost Benefit Analysis or cba is a relatively simple and widely used technique for deciding
whether to make a change. As its name suggests, to use the technique simply add up the
value of the benefits of a course of action, and subtract the costs associated with it.
Costs are either one-off, or may be ongoing. Benefits are most often received over time. We
build this effect of time into our analysis by calculating a payback period. This is the time it
takes for the benefits of a change to repay its costs. Many companies look for payback over
a specified period of time e.g. three years.
In its simple form, cost-benefit analysis is carried out using only financial costs and financial
benefits. For example, a simple cost/benefit analysis of a road scheme would measure the
cost of building the road, and subtract this from the economic benefit of improving transport
links. It would not measure either the cost of environmental damage or the benefit of quicker
and easier travel to work.

NEED OF THE STUDY:

The importance of cost reduction programs within a company cannot be overstated.
Companies that are losing money, need to increase profits, or must become more
competitive need to cut expenses in order to succeed. Knowing how to implement effective
cost reduction strategies can be the determining factor in the survival of a business.
When a company must generate more cash as fast as possible, management will have to
decide which costs can be most effectively reduced. If the reduction is needed quickly,
expenses cut first will normally be those that are not fixed or directly tied to production. It is
not a good idea to drastically reduce expenses that produce the company product or service
without careful evaluation.
If your company understands the importance of cost reduction as a tool to increase
profitability, the company will have a much better chance of remaining profitable no matter
what stage of the economic cycle is occurring. That is because cost reduction is an effective
tool that can be responsive to a company's need. Managing expenses is just as important as
managing revenue.
Keeping the competitive edge means keeping the company razor sharp. There is no room for
laxness which dulls the ability of a company to be responsive to market trends. Changes can
occur rapidly, and a company that cannot respond with new methods, new material usage,
service efficiency changes, or technological adaptability will be quickly outperformed by
other businesses. The importance of cost reduction strategies lies in its contribution to a
company's honing of performance.

SCOPE OF THE STUDY:

Since it will not be possible to conduct a micro level study of all type industries in Andhra
Pradesh, the study is restricted to Kesoram Cement ltd only.

OBJECTIVES OF STUDY
THE STUDY HAS THE FOLLOWING:
To provide the material frame work of cost and Cost Control Analysis
To describe the profit of the organization as a backdrop for undertaking a study of
Cost Benefit Analysis.
To analyze the cost system in practice in Kesoram Cement ltd with particular
reference to their objectives and phases of organizational and re-appropriation.

In addition to the analysis of the conventional cost system in practice in Kesoram

Cement ltd The study aims at evaluation and modification to the current cost system
with reference to the various types of costs. The scope in the formulation of
performance cost is also studied.

SOURCES OF DATA:
The data of Kesoram Cement ltd have been collected mainly from secondary sources viz.,

Form the concerned officers of the Kesoram Cement ltd

Kesoram Cement ltd journals.

Accounting books, records.

Key books of concerned title.

Statistical records

Kesoram Cement ltd library.

METHODOLOGY:
The proposed study is carried with the help of both primary and secondary sources of data.

PRIMARY DATA:
The primary data is collected by interacting with the finance manager and other concerned
executives at the administrative office of the company.

SECONDARY DATA:
All the secondary data used for the study has been extracted from the annual reports,
manuals and other published material of the company.

LIMITATIONS:

Estimates are used as basis for cost plan and estimates are based mostly on available
facts and best managerial judgment

Cost control cannot reduce the managerial function to a formula. It is only a

managerial.

Tool which increase effectiveness of managerial control.

The use of cost may be to restricted use of resources. Costs an often taken as limits.

Efforts may therefore not be made to exceed the performance beyond the cost
targets.

Frequent changes may be called for in costs due to first changing industrial climate.

In order that a system may be successful, adequate costs education should be

imparted at least through the formative period. Sufficient training programs should
be arranged to make employees give positive response to cost activities.

The study is the limited up to the date and information provided by Kesoram
Cement ltd and its annual reports.

REVIEW OF LITARETURE
INTRODUCION TO COST & COST CONTROL
The management is efficient if it is able to accomplish the objective of the enterprise. It is
effective when it accomplishes the objectives with minimum effort and cost in order to attain
long-range efficiency and effectiveness management must chat out its course in advance. A
systematic approach to facilitate effective management performance is profit planning and
control or costing. Costing is therefore an integral part of management in a way, a cost
control system has been described as a historical combination of a goal setting machine for
increasing an enterprises profits and a goal achieving machine for facilitating organizational
co ordination and planning while achieving the costed targets.

MEANING OF COST:
It is a financial and quantitative statement, prepared and approved prior to a defined period
of time of policy to be pursued during that period for purpose of attaining a given objective.
It may include income, expenditure and employment capital.
In other words is a pre-determined detailed plan of action developed and distributed as a
guide to current operations and as a partial basis for the subsequent evaluation of
performance.

MEANING OF COSTING:
The process of planning all flows of financial resources into within and from an entity
during some specified future period. It includes providing for the detailed allocation of
expected available future resources to projects, functions, responsibilities and time
periods.From above definition it is clear that costing is the actual act of preparing the cost. It
is the process of evolving the final statement. Cost is the end product of costing.

MEANING OF COSTORY CONTROL:

It is the process of establishing of departmental costs relating the responsibilities of
executives to the requirements of a policy, and the continuous comparison of actual with
costed results, either to secure by individual action the objectives of the policy a firm basis
for its revision.
First of all costs are prepared and then actual results are the comparison of costed and actual
figures will enable the management to find out discrepancies and take remedial measures at
a proper time. The cost control is continuous process, which helps in planning and co
ordination. It provides a method of control too. A cost is a means and cost control is the end
result.
In the word of J.A Solt cost control is the system of management control and accounting in
which all operations are forecast and so as possible planned ahead and actual results
compared with the forecast and the planned ones.

ESSENTIALS OF COST CONTROL:

Costing, or the process of preparing the cost, is the starting point for cost control
Distribution of costs pertaining to each function to all the relevant section within
organization.
Collection of actual data pertaining to till costed activities.Continuous comparison of actual
performance with costed performance. Initiation of corrective action to ensure that actual
performance is in line with costed performanceRevision of costed if it is felt that the costs
prepared are no longer relevant on account of unforeseen developments.

OBJECTIVES OF COST CONTROL:

The primary objective of cost controls to help the management is systematic planning and
in controlling the operations of the enterprise. The primary objective can be met only of

there is proper communication and coordination amongst different within the organization.
Thus the objectives can be stated as:

1. PLANNING:
Businesses require planning to ensure efficient and maximum use of their resources. The
first step in planning is to define the broad aims and objectives of the business. Then,
strategies to achieve the desired goals are formulated and tentative schedule of eh proposed
combinations of the various factors of production, which is the most profitable for the
defined period. Cost influences strategies that need to be followed by the originations. It
cultivates forced planning aiming managers.

2. CO-ORDINATION:
Co-ordination is managerial functions under which all factors of production and all
departmental activities are balanced and integrated achieve the objectives of the
organization. Costing provides the basis for individual in all department to exchange ides on
how best the organizations objectives can be realized. Executives are forced ot think of the
relationship between their department and the company as a whole. This removes
unconscious bases against other departments. It also helps to identify weaknesses in the
organization structure.

3. COMMUNICATIONS:
All people in the organization must know the objectives, policies and performances of the
organizations. They must have a clear understanding of their part in the organizations goals.
This is made possible by ensuring their participation in the costing process.

4. CONTROLS AND PERFORMANCE EVALUTION:

Control ensures control by continuous comparison of actual performance with the costed
performance. Variances are highlighted and corrective action can be initiated. Costs also
from the basis of performance evaluation in an organization as they reflect realistic estimates
of acceptable and expected performance.

COST, COSTING AND COST CONTROL:

A cost is BLUE PRINT of a plan expressed in a quantitative terms. Costing is a technique
for formulating costs. Cost control relates to the principles, procedures, and practice of
achieving given objectives thorough costs.
From the above definitions we can differentiated the three terms as costs are the individuals
objectives of a department, etc, where ascosting may be said to be the act of building cost.
Cost control embraces all and in addition includes the science of planning the costs to effect
on overall management tool for the business planning and control.

ESSENTIALS OF COST CONTROL:

The proper organization is essential for the successful preparation, maintenance and
administration of costs. A cost committee is formed which comprises the departmental heads
of various departments. All the functional heads are entrusted with the responsibility if
ensuring proper implementation of their respective departmental costs.
The chief executive is the overall in charge of cost system. He constitutes a cost committee
for preparing realistic costs. A cost officer is the convener of the cost committee who coordinates the costs of different departments. The managers of different departments are made
responsible for their departmental costs.

COST OFFICER:
The chief executive appoints cost officer. Such cost officer also called as cost controller or
cost director. His rank should be equal to other functional managers.
The cost officer does not have the direct responsibility of preparing the costs. The various
functional managers prepare the costs. His role is that of a supervisor. The cost officer has

the specific duty of administering the cost. He is responsible for timely completion of
costing activity by various departments and for co-ordination between them so the t there is
a proper link between them. He is empowered to scrutinize the costs prepared by different
functional heads and to make changes in them. If the situation so demands.
The cost officer works as a coordinator among different department. He continuously
monitors the actual performance of different departments. He determines the deviations in
the costs and takes necessary steps to rectify the deficiencies, if any. He also informs the top
management about the performance of different department.
The cost officer will be able to carry out his work only if is conversant with the working of
all the departments he must have technical knowledge of the business and should also
possess accounting knowledge.

3. COST COMMITTEE:
A cost committee is formed to assist the cost officer. The heads of the entire important
departments are made members of this committee. The committee is responsible for
preparation and execution of costs. The members of this committee put up the case of their
respective departments and help the committee to take collective decisions, if necessary. The
cost committee is responsible for reviewing the costs prepared by various functional heads.
Co ordinate all the costs and approve the final costs, the cost officer acts as coordinator of
this committee. All the functional heads are entrusted with the responsibility of ensuring
proper of ensuring proper implementation of their respective final departmental costs.

4. COSTS CENTERS:
A cost centers is that part of the organization for which the cost is prepared. A cost center
may be a department, section of a department or any other part of the department. Ideally,
the head of every center should be a member of the cost committee. However, it must be
ensured that each cost center at least has an indirect representation in the cost committee.

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The establishment of cost centers is essential for covering all parts of the organization
becomes easy. When different centers are establishment. The cost centers are also necessary
for cost control purposes.

5. COST MANUAL:
a) A cost manual is a document that spells out the duties and responsible of the various
executives concerned it specifies among various functional areas. A cost manual
covers the following matters.
b) A cost manual clearly defines the objectives of cost control system. It also gives the
benefits and principles of this system.
c) The duties and responsibilities of various persons dealing with preparation and exec
ton of costs are also given in a cost manual. It enables the management to know the
persons dealing with various aspects to costs and provides clarity on their duties and
responsibilities,
d) It gives information about the sanctioning authorities of various costs. The financial
powers of different managers are given in the manual for enabling he spending
amount on various expenses.
e) A proper table for costs including the sending of performance reports is drawn so
that every work starts in time and systematic control is exercise.
f) The specimen forms and number of copies to be listed for cost repots is also stated.
Cost involved should be clearly stated.
g) The length of various cost periods and control points is clearly given.
h) The procedure to the followed in the entire system is clearly stated.
i) A method of accounting to be used for various expenditures is also stated in the
manual.
The cost manual helps in documentation the role of every employee, his duties,
responsibilities the ways of undertaking various tasks etc. thus it also in reducing ambiguity
at any point of time.

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6. COST PERIOD:
A cost period is the length of time for which a cost is prepared. It depends upon a number of
factors. The choice of a cost period depends upon the following considerations. The types of
cost (long/short)

The nature of demand for the products.

The timings for the availability of the finance.

The economic situations of the cycles.

All the above mentioned factors are taken into account while fixing the period of costs. In
this costing process the financial manager has to take the financial decision on the costs.
The financial manager usually responsible for organizing this cost, he must perform the
following functions.
To decide the general policies and guidelines.
To officer technical advice
To suggest changes
To receive and review individual cost estimates
To reconcile divergent views
To co-ordinate costing activities.
To approve costs with or without revisions.
To scrutinize control reports later on
To scrutinize cost repots later on
To disseminate these guide lines.

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CONTINUOUS COSTING SYSTEM:

A continuous costing system is a method of having two different cost periods with in the
same cost. The purpose of having this system is to have greater control in terms of
operational activities without losing sight is to have greater control in terms of it results in
incorporating the effect of changes in the short term on the long-term targets of the
organization.

DETERMINATION OF KEY FACTOR:

The costs are prepared for all functional areas. These costs are interring dependent and interrelated. A proper co-ordination among different costs in necessary for cost control to be
successful. The constraints on some costs may have an effect on other costs too. A factor
which influences all other costs is known as key factor or principal factor.
The key factor may not necessity remain the same. The raw materials supply may be limited
at one time but it may be easily available at another time. Similarly, other factors may also
improve at different times. The key factor highlights are limitations of the enterprise. This
will enable the management to improve the working of these departments where scope for
improvement exists.

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REQUISITES FOR A SUCCESSFUL COST

CONTROL SYSTEM
For making a cost control system successful requisites are required.

1. CLARIFYING OBJECTIVES:
The costs are used to realize objectives of the business. The objective must be clearly spelt
out to that costs are properly prepared. In the absence of clear goals, the costs will also be
unrealistic.

2. PROPER DELEGATION OF AUTHORITY AND RESPONSIBILITY:

Cost preparation and control is done are every level of management. Even though costs are
finalized at top level but involvement of persons from lower levels of management is
essential for their success. This necessitates proper delegation of authority and
responsibility.

3. PROPER COMMUNICATION SYSTEM:

An effective system of communication is required for a successful cost control. The flow of
information regarding costs should be quick so that these are implemented. The upward
communication will help in knowing the difficulties in implementation of costs. The
performance reports of various levels will help top management in cost control.

4. COST EDUCATION:
The employees should be educated about the benefit of costing system. They should be the
benefits of costing system they should be educating about their roles in the success of this
system. Cost control may not be taken only as a control device by the employees but it
should be used as a tool to improve their efficiency.

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5. FLEXIBILITY:
Flexibility in costs is required to make them suitable under changed circumstances. Costs
are prepared for the future, which is always uncertain, even though costs are prepared by
considering the future possibilities but still some adjustment. Flexibility makes the costs
more appropriate and realistic.

6. MOTIVATION:
Costs are to be implemented by human beings. Their successful implementation will depend
upon the interest shown by the employees. All persons should be motivated to improve their
working so that costing is successful. A proper system of motivation should be introduced
for making this system a success.

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TYPES OF COSTS:

LONGTERM
COST

INTERI
M
COSTS

TYPES
OF
COST
S

SHORTTERM
COST

CURRE
NT
COST
1. LONG -TERM COSTS:
The long-term costs prepared for a long period of five to ten years. They are concerned with
planning the operations of a firm over a considerably long period of time. The financial
controller exclusively for the top management usually prepares long-term costs. These
costs are very useful in terms of physical units (i.e. quantities) or percentages, since accrued
values may be difficult to forecast over such long-period. Capital expenditure, research and
development costs, etc, are examples of long-term costs.

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2. SHORT TERM COSTS:

Short-term costs are costs prepared for a short period of one to two year. They are prepared
for those activities the trend in which cannot be for seen easily over long periods. These
costs are very useful in case of consumer goods industries such as sugar, cotton, textiles, etc.
they are generally prepared in terms of physical units (i.e. quantities) as well as monetary
units (i.e. values) materials cost. Each costetc, are example of short-term cost. They are
useful to lower level of management for control purpose.

3. CURRENT COSTS:
Current cost is a cost, which is established for use over a short period of time and is related
to current conditions. Thus current costs are essentially short term costs adjusted to current
(i.e., present or prevailing) condition or circumstances. They are prepared for a very short
period. Say, a quarter or a month. They related to current activities of the costs.

4. INTERIM COSTS:
Interim costs are costs, which are prepared in between two cost periods. These costs may get
integrated with the cost of the following period.

CLASSIFICATION OF COSTS ACCORDING TO CONTENT:

Costs may be classified into costs in physical terms and into costs in monetary terms.

A) COSTS IN PHYSICAL TERMS:

Costs in physical terms are cost in terms quantities only. They do not include corresponding
rupee value. Long-term costs are usually prepared in physical terms. Examples of such costs
are production costs, material cost etc

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B) COSTS IN MONETARY TERMS:

Costs in monetary terms are costs that cost in terms of quantities as well as their
corresponding rupee value, sales cost, purchase cost, etc are example of such costs. Costs
such as cash cost, capital expenditure cost, etc that may not have physical quantities also
from part of costs in monetary terms.

CLASSIFICATION OF COSTS ACCORDING TO FUNCTION:

Costs can be classified into:
1. operating costs
2. financial costs
3. master costs

1) OPERATING COST:
These costs relate to different activities or operations of a firm. The number of such costs
depends upon the size and nature of the business, the commonly used operating costs are:
1) Sales costs
2) Purchase costs
3) Raw material costs
4) Labor costs
5) Factory utilization cost
6) Manufacturing expenses or works overhead cost
7) Administrative and selling expenses cost etc.
The operating cost for a firm may be constructed in terms of programmers or responsibility
areas, and hence may consist of:
Programmed cost
Responsibility cost

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A) PROGRAMME COST:
It consists of expected revenues and costs of various products or projects that are Termed as
the major programmers of the firm, such a cost can be prepared for each product line or
project showing revenues, cost and the relative profitability of the various in locating areas
where efforts may be required to reduce costs and increase revenues. They are also useful in
determining imbalance and inadequacies in programmers so that corrective action may be
taken in future.
B) RESPONSIBILITY COSTS:
Where the operating cost of a firm is constructed in terms of responsibility
Areas, such a cost show the plan in terms of persons responsible for achieving them. It is
used by the management as a control them. It is used by the management as a control device
to evaluate the performance of executives who are in charge of various cost centers. Their
performance is compared to the targets (costs), set for them and proper action is taken for
adverse results.
Responsibility areas may be classified under three broad categories:
Cost /expense center
Profit center
Investment center

2) FINANACIAL COSTS:
Financial costs are concerned with cash receipts and disbursements, working Capital,
financial position and results of business operations. The commonly used financial costs
include cash cost, working capital cost and income statement cost, statement of retained
earnings cost, costed balance sheet or position statement cost.

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3) MASTER COSTS:
The master cost is the summary cost incorporating its functional costs. All The operational
and financial costs are integrated into the master cost. The cost officer for the benefit of the
top level management prepares this cost. This cost is used to coordinate the activities of
various functional departments. It is also used as an effective control device.

CLASSIFICATION ON THE BASIS OF FLEXIBILITY:

A) FIXED COST:
According to ICMA London a fixed cost is a cost which is designed to
Remain unchanged irrespective of the level of activity actually attained it is based on a fixed
volume of activity and shows one volume of output and related cost. It is not adjusted
according to the actual level of activity attained.
A fixed cost is useful only when the actual level of activity corresponds with the costed level
of activity. But this generally does not happen as such a fixed costs is not useful for
managerial purposes.
B) FLEXIBILE VARIABLE SLIDING SCALE OR CONTROL TYPECOSTS:
According to ICMA London a flexible cost is a cost which is designed to Change in
accordance with the level of activity actually attained. Thus a flexible cost changes
according to the change in the level of activity. In other words it provides the costed costs at
any level of activity.Business activity cannot be accurately predicted on account of
uncertainties of Businessenvironment. A flexible cost contains several estimates for different
assumed circumstances instead of just one estimate, it provides for automatic adjustments
with changes in the volume of activity. Hence, a situations operating in an unpredictable
environment.

Cost Output and Relationship:

Short run cost curve is divided into total fixed cost and total variable cost. So, we can
indicate it as:

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TC = TFC+TVC
TC = Total Cost
TFC = Total Fixed Cost
TVC = Total Variable Cost
TVC is known as the total variable cost which changes directly with the change in output. It
refers cost of labour, raw material, power etc.

We can show it in a figure:

Total Fixed Cost Curve

There is another diagram which will show the curve of Total Variable Cost:

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Total Variable Cost Curve

We can show the diagram to put all the curves also:

The TC, TVC and TFC Curves

At last, we can say that costs are very important in decision making because though all the
units are sold in the same price but the cost of production of these units are not same.
Marginal cost and incremental cost are relevant in decision making whereas sunk cost are
irrelevant.

COST AND COST SYSTEM IN KESORAM CEMENT LTD

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The costing process is used in the performance costing for the construction of phase. Which
includes pre-commission activities. Besides meeting the essential requirements of
managerial control. The costing exercise also covers the long-term capital costing, which is
presented in the form of annual plan.

OBJECTIVES OF THE COST SYSTEM:

To prepare annual costs in such a manner those managers at various levels in the
organization carry out periodical exercise in respect of each contact or responsibility
center for physical planning and matching resources broke up into monthly targets or
cash flows.
To introduce and operate responsible for achievement of specified targets with the
resources allocated for the purpose.
To bring about effective co-ordination of all activities of the organization of all
activities of the organization and to gear up service divisions to meet effectively the
requirement of projects.

COST PERIOD AND PHASING:

The cost period or annual costs should correspond with the financial year. The cost should
be drawn up for the ensuring financial year in the form of cost estimates financial year in the
form of Revised Estimates (R.E) in addition, the cost are to be reviewed on monthly basis by
project review teams, in the light of actual expenditure and projections in the cost period.
Costs should indicate monthly phasing of expenditure and targets for the first and quarterly
phasing for the second half of the year. At the time of review of the cost estimates to frame
revised estimates the quarterly phasing should be broken up into monthly phasing.
While drawing up the actual cost in October every year, the long-term capital cost for
ongoing and new schemes should be formulated as a part of the exercise for preparation of
Annual plan. The long term capital cost should indicate for a period of six years following
the cost period project wise annual phasing of the capital expenditure and physical schedules
resource based network.

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COST HEADS:
For uniform accounting, it is essential that costs are collected for each system of the factory
tough this may involve splitting up of payments against contracts which embrace more than
one system. Allocation of the cost as system wise affords a sound basis for cost accounting,
inter-firm comparisons and provides valuable inputs to data bank. Cost provisions are
related to project estimated and monitoring of actual expenditure where as control cables for
part control and instrumentation system.Factory piping which include pipelines, for ash
water mains, compressed air system and civil works piping.
Auxiliary pumps for water treatment plant and civil works system. If there are, any contracts
not covered in the cost heads provision for such contracts should be shown against the
appropriate system head by adding code number.

5 TYPES OF COSTS IN HERO MOTOCORP LTD (HMIL):

According to the nature expenditure cost are classified as under
Direct capital outlay on works
Technical consultancy
Incident expenditure during construction
Employee cost

Other establishment expenses:

Training and recruitment
Preliminary expenses
Misc. brought-out assets
Township cost

BRIEF EXPLANATION TO THE NATURE OF EXPENDITURE

INCLUDED IN EACH COST INDICATED BELOW:

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These comprises of salaries, wages, allowance, contribution to PF and other funds and
welfare expenses such as LIC, Medical reimbursement, canteen subsidy etc., and provision
for areas of salary/D.A.

OFFICE AND OTHER EXPENSES:

Expenses incidental to construction and capital works not traceable directly to incidental
expenditure, during contribution equipments, vehicle running expense, office rent. Cost of
drawings, traveling expenses, printing & stationery, communication expenses, advertisement
for tenders etc., are major items in this category.

TRIANING RECRUITMENT & OTHER DEFFERED REVENUE

EXPENDITURE:
The first part of the cost consist of expenses for training executives, and non-executive
trainees, rent for training halls and expenses for management development courses. The
second part consists of expenses for recruitment such as advertisement for recruitment,
interview expenses for to candidate etc., the third part combines preliminary expenses
including share registration lees and research and development expenses.

MISCELLANEOUS BOUGHT OUT PASSESS:

Vehicles, furniture and fixtures equipments, hospital and medical equipment, miscellaneous
assesses town ship figure in this cost.

REVIEW OF PROJECT COST:

MONTHLY REVIEW:
At monthly intervals, the costs should be reviewed by project review committee (PRC).
Project cost should report actual expenditure against cost heads. Works heads and corporate
cost by the 7th of the month following the reporting month. The monthly review should be
examined by project review team (PRT), who should record reasons for any aviations and
action proposed for expending works in the minutes of the meetings reasons for any
variations in the case of cost heads exceeding 10% of the cost estimates revised estimates or
whichever is lower Rs.5 lakhs should be analyzed and reported upon.

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QUATERLY REVIEW:
PRT should conduct a quarterly cost review with a view to projecting anticipated
expenditure during the year against approved cost estimates/ revised estimates. As time is
essence of such review, only a quick estimate of anticipated expenditure for individual cost
heads involving provisions exceeding for individual cost heads involving provisions
exceeding Rs 50 lakhs in each case should be made and reported upon in minutes of PRT.
For this purpose, project cost should furnish all the relevant data to general manager
(project) and planning and systems by the 10th of the month following the quarter project
cost committee should review the actual expenditure and assess anticipated expenditure
contract co ordination/engineers in charge the assessments of anticipated expenditure should
be furnished by the project cost committee to general manager (project) by the 30 th of the
month following the quarter under review.

COST OF SERVICE DIVISION / CORPORATE COSTS:

A review of costs of service and corporate divisions should be conducted at quarterly
intervals by corporate cost committee (CSC). for this purpose, corporate accounts should
report actual expenditure up to the end of the quarter by the 10th of the month following
quarter to corporate cost and cost co-ordination of the remaining period of the year should
be sent to corporate cost should be sent to corporate cost should put up a consolidated report
division wise and project wise to corporate cost committee (CBC) by the 15 th of the may,
August, November and February every year.

OBJECTIVES OF THE CURRENT COST CONTROL SYSTEM IN

Hero MotoCorp Ltd.
In current to corporate cost control system operating phase has been compiled to achieve
the following objectives.
To control actual performance with reference to standards / norms adopted in the
cost, ascertain the deviations analyze and establish the reasons.

26

 To identify constraints in generation and tamely action for estimation of constraints.

To monitor the generation of internal resources so as to ensure availability of
adequate funds.
To prepare revenue cost so as to forecasting the periodical profitability of the
organization.
To develop standards / norms of performance in the various areas of operation and
maintenance based on the experience.
To involve managers at various in the process of developing performance cost so as
to introduce the concept of responsibility accounting and participate management.
To ensure effective co-ordinate planning of all activities so the all the inputs and
services necessary for achieving the physical targets are available at appropriate
time.
To create cost consciousness among the managers responsible for decision making.
To provide data regarding operational norms and costs for the purpose of formulating
tariff.

SCOPE OF THE PERFORMANCE COST:

The cost for operation and maintenance activities will be called performance cost operation.
This, in effect means that all financial targets in the cost will be based on performance
targets in physical terms.
The current cost control system operation phase envisages generation and transmission line
projects as independents investment centers. It becomes applicable to a project in the year in
which it plans to commercialize its first generation unit. However, the costing for expenses
(net of revenue) from the date of synchronization to the date of commercial generation (i.e.
during trail run) is to be taken case of in the capital cost of the respective project. Similarly,
in the case of transmission line project, the system becomes applicable from the year in the
date commercial generation of the first unit of generating project, with which this line is
associated, whichever is later. For subsequent lines, the O & M will be prepared from the
energisation.

27

The sum totals of costs of the cost centers will be the cost for the investment center.
However, the cost for the profit center will be worked out by apportioning the revenue and
cost of various cost centers to individuals profits centers bases on specified norms.
The performance cost operation will consists of following costs along with the supporting
schedules
A. Cost balance sheet
B. Cost profit and loss account
C. Revenue cost
In addition, separate costs for revenue activities other than operation for research and
development consultancy contracts etc.
The expenses in respect of developmental expenditure for improvements, additions,
replaautomobile, renewals, balancing facilities etc., are of capital nature and will be costed
for in the construction cost of cost control system construction phase.
To facilitate management control the system also envisages, phasing of these costs into
monthly/quarterly targets. The actual performance then will be reasons for variations will be
analyzed and established for taking corrective remedial actions. The scope also includes
projections of internal resources for a period ranging from 5 to 15 years and updating of
5years plan as well as perspective plan of the company.

STAGES IN THE FORMULATION OF PERFORMANCE COST:

The system provides for a two stages formulation for performance cost-operation the
stages are given below.

INITIAL PROPOSAL:
In the initial proposal, the project is required to indicate yearly targets. In he addition, to
furnishing basic information like synchronization and commercial generation dates

28

Constraints on coal operation at less than the designed specification, calorific value of raw
material and lime stone, material consumption in physical terms for items whose
consumption value in Rs.5 lakhs or more, planned shut down for a maintenance and
overhauling and norm for various operation parameters provided for design specification
and in the tariff agreements to the corporate cost committee.
In the initial proposals is planned to be submitted after considering these factors and keeping
in view the perspective plan of the organization, fixes as well as norms for various operating
parameters. These targets and norms are then communicated to all stations and transmissions
line offices in the last week of July to be used for formulating detailed cost in the firm of
final proposal.

FINAL PROPOSAL:
Costed balance sheet, costed profit & loss account and costs in the form of cash cost along
with the proposal will consist of detailed supporting schedules for each of the investment
center / cost center. This final proposal needs to be submitted to corporate center with in 3
weeks of receiving approval for initial proposal.
The final proposal, after approval by board, will become the basis of monitoring
performance for cost centers and investment centers.
The frequency and extent review and monitoring will be done is under:
i.

The monitoring of actual performance against costed targets for investment center /
profit center on monthly basis and for cost centers on quarterly for remedial /
corrective actions.

ii.

The review of performance cost on quarterly basis to assess the anticipated

profitability.

The first step in the preparation of performance cost, O & M is formulation of maintenance
and overhauling schedules for Boiler and to which generation, then considering the grid
demand, the availability or inputs and factory problems.

NEXT GENERATION:
The sales value will be determined from quantum of net generation (i.e. gross generation
aux. Consumption)

29

AUXILIARY CONSUMPTION / CONSUMPTION BY UTILITES:

The automobile consumption by each of the cost centers for individuals unit auxiliaries,
station auxiliaries as well as transformer losses are to be estimated separately based on
designed specifications and added in order to workout total auxiliary consumption rather
than fixing a overall percentage. Similarly consumption by utilities will also need to be
indicated by concerned cost centers / departments like township and construction
department. This will be valued at cost net generation to arrive at the sales values for owns
consumptions.

CHEMICAL CONSUMPTION:
The chemical are used by many cost centers for treatment of water. The consumption of
chemicals will be correlated with volume of water treated and certain norms will have to be
developed for different type of chemicals and different types of treatment.Based on these
norms, each of the cost centers will indicate consumption of chemical in quantitative as well
as financial terms. The cost center wise requirement will be consolidated to arrive at total
chemicals consumption to be charged to profit and loss account. The valuation of chemical
will be done at current prices only.

EMPLOYEE COST:
The basis employee cost will be approved manpower cost effective for respective years of
cost period. The estimation of employee cost is to be done for each grade considering midpoint of the scale as basis pay and after adding various allowance like D.A., H.R.A., C.C.A
project allowance etc., as admissible in respective grades. This is to be worked 49 out or
each of the cost period based on existing strength (at the time of estimation) in each grade
and additions during each quarter (taking 70% satisfaction for additions).

The provisions for LTC, medical reimbursement, PF and other welfare expenses are to be
made based on trend of expenses in previous years and taking into account polices changes,
if any. The details of welfare expenses like liveries and uniforms, safety expenses, accident

30

compensation, games & sports, canteen subsidy etc., are to list out as per chart of account.
The provisions for incentive, bonus and payments of one time nature are to be shown
separately based on total employee cost for executives, supervisors and non-supervisors and
total man power in these categories, separate rates of cost per employee will be worked out
for each of these categories as under.
1. Salaries and allowance
2. Contribution to PF and other funds
3. Welfare expenses
The cost center of employee cost will be worked out based on these rates separately for
executives, supervisors and non-supervisors. This will again be consolidated separately for
operations. Maintenance and common service function. The employee cost of common
function will be appropriated between construction and O & M costs in the ratio of capital
expenditure and sales during the respective years.

REPAIRS & MAINTANANCE:

In line, with costing system following three activities can represent major classification of
repairs and maintenance.
1. Major overhaul
2. Preventive maintenance
3. Break down maintenance
Normally costing will be done for the former two: under each activity separate estimates
will be prepared for consumption of materials and maintenance jobs. This estimation will be
done at each of the sub cost center wise details are required to be mentioned.
The consumption material for repairs and maintenance will be classified into spares,
lubricants, loose tools and plants, consumables and others.

31

The cost center wise total separately for three activities will be added to arrive at summary
of material consumption and maintenance jobs, which will be reflected in the profit & loss
account.
The material consumption especially of spares can be estimated based on the expected life
of various consumption / spears in the installed equipment the frequency of breakdowns in
the past and the requirement for prevented maintenance and major overhauls. The actual life
of components may be different from that indicated in the manufacturers specification.
Therefore, it is very difficult t estimate requirements of spares. But this new station it will be
advisable to collect such information from old stations that have gained experience in this
field.

Normally maintenance of equipment through contractors should be avoided. But in certain

areas, if the expertise and in house capability or sufficient man power is not available,
maintenance jobs can be got done through contractors. Such contracts will need to be listed
out separately. If any owner supply items are covered in such contracts the cost of these
items will be included in the material cost.

FACTORY & GENERAL OVERHEADS:

All the items of expenditures under this head will be estimated based on past trend with due
adjustment for policy changes. The estimates will be given by cost center needs for items
identified with respective cost centers. The total administrative cost of service cost centers
will be allocated between construction and O & M in the ration of capital expenditure and
sales during the respective years.

DEPRECIATION:
This is to be charged as per ES act from the year following the year in which assets have
been capitalized. This will be done separately by each of the cost centers on the basis of

32

capitalized value and rates of depreciation furnished by site finance and account for different
categories of assets. Cost center-wise depreciation will be added at total depreciation for the
investment center.

INTEREST ON FIXED CAPITAL:

As per existing accounting policy, the interest is to be charged to profit & loss account based
on the loan content in the capitalized assets restricted to total accrued interest on the actual
loans.
For costing purposes, interest will be worked on equated loan content or equated loan which
ever is less.

INDUSTRY PROFILE
In the most general sense of the word, a cement is a binder, a substance which sets and
hardens independently, and can bind other materials together. The word "cement" traces to
the Romans, who used the term "opus caementicium" to describe masonry which resembled
concrete and was made from crushed rock with burnt lime as binder. The volcanic ash and
pulverized brick additives which were added to the burnt lime to obtain a hydraulic binder
were later referred to as cementum, cimentum, cment and cement. Cements used in
construction are characterized as hydraulic or non-hydraulic.
The most important use of cement is the production of mortar and concretethe bonding of
natural or artificial aggregates to form a strong building material which is durable in the face
of normal environmental effects.
Concrete should not be confused with cement because the term cement refers only to the dry
powder substance used to bind the aggregate materials of concrete. Upon the addition of
water and/or additives the cement mixture is referred to as concrete, especially if aggregates
have been added.
It is uncertain where it was first discovered that a combination of hydrated non-hydraulic
lime and a pozzolan produces a hydraulic mixture (see also: Pozzolanic reaction), but

33

concrete made from such mixtures was first used on a large scale by Roman engineers.They
used both natural pozzolans (trass or pumice) and artificial pozzolans (ground brick or
pottery) in these concretes. Many excellent examples of structures made from these
concretes are still standing, notably the huge monolithic dome of the Pantheon in Rome and
the massive Baths of Caracalla. The vast system of Roman aqueducts also made extensive
use of hydraulic cement. The use of structural concrete disappeared in medieval Europe,
although weak pozzolanic concretes continued to be used as a core fill in stone walls and
columns.

Modern cement
Modern hydraulic cements began to be developed from the start of the Industrial Revolution
(around 1800), driven by three main needs:
Hydraulic renders for finishing brick buildings in wet climates
Hydraulic mortars for masonry construction of harbor works etc, in contact with sea water.
Development of strong concretes.
In Britain particularly, good quality building stone became ever more expensive during a
period of rapid growth, and it became a common practice to construct prestige buildings
from the new industrial bricks, and to finish them with a stucco to imitate stone. Hydraulic
limes were favored for this, but the need for a fast set time encouraged the development of
new cements. Most famous was Parker's "Roman cement." This was developed by James
Parker in the 1780s, and finally patented in 1796. It was, in fact, nothing like any material
used by the Romans, but was a "Natural cement" made by burning septaria - nodules that are
found in certain clay deposits, and that contain both clay minerals and calcium carbonate.
The burnt nodules were ground to a fine powder. This product, made into a mortar with
sand, set in 515 minutes. The success of "Roman Cement" led other manufacturers to
develop rival products by burning artificial mixtures of clay and chalk.
John Smeaton made an important contribution to the development of cements when he was
planning the construction of the third Eddystone Lighthouse (1755-9) in the English
Channel. He needed a hydraulic mortar that would set and develop some strength in the
twelve hour period between successive high tides. He performed an exhaustive market

34

research on the available hydraulic limes, visiting their production sites, and noted that the
"hydraulicity" of the lime was directly related to the clay content of the limestone from
which it was made. Smeaton was a civil engineer by profession, and took the idea no further.
Apparently unaware of Smeaton's work, the same principle was identified by Louis Vicat in
the first decade of the nineteenth century. Vicat went on to devise a method of combining
chalk and clay into an intimate mixture, and, burning this, produced an "artificial cement" in
1817. James Frost,orking in Britain, produced what he called "British cement" in a similar
manner around the same time, but did not obtain a patent until 1822. In 1824, Joseph Aspdin
patented a similar material, which he called Portland cement, because the render made from
it was in color similar to the prestigious Portland stone.
All the above products could not compete with lime/pozzolan concretes because of fastsetting (giving insufficient time for placement) and low early strengths (requiring a delay of
many weeks before formwork could be removed). Hydraulic limes, "natural" cements and
"artificial" cements all rely upon their belite content for strength development. Belite
develops strength slowly. Because they were burned at temperatures below 1250 C, they
contained no alite, which is responsible for early strength in modern cements. The first
cement to consistently contain alite was made by Joseph Aspdin's son William in the early
1840s. This was what we call today "modern" Portland cement. Because of the air of
mystery with which William Aspdin surrounded his product, others (e.g. Vicat and I C
Johnson) have claimed precedence in this invention, but recent analysis of both his concrete
and raw cement have shown that William Aspdin's product made at Northfleet, Kent was a
true alite-based cement. However, Aspdin's methods were "rule-of-thumb": Vicat is
responsible for establishing the chemical basis of these cements, and Johnson established the
importance of sintering the mix in the kiln.
William Aspdin's innovation was counter-intuitive for manufacturers of "artificial cements",
because they required more lime in the mix (a problem for his father), because they required
a much higher kiln temperature (and therefore more fuel) and because the resulting clinker
was very hard and rapidly wore down the millstones which were the only available grinding
technology of the time. Manufacturing costs were therefore considerably higher, but the
product set reasonably slowly and developed strength quickly, thus opening up a market for
use in concrete. The use of concrete in construction grew rapidly from 1850 onwards, and

35

was soon the dominant use for cements. Thus Portland cement began its predominant role. it
is made from water and sand

Types of modern cement

Portland cement
Cement is made by heating limestone (calcium carbonate), with small quantities of other
materials (such as clay) to 1450C in a kiln, in a process known as calcination, whereby a
molecule of carbon dioxide is liberated from the calcium carbonate to form calcium oxide,
or lime, which is then blended with the other materials that have been included in the mix .
The resulting hard substance, called 'clinker', is then ground with a small amount of gypsum
into a powder to make 'Ordinary Portland Cement', the most commonly used type of cement
(often referred to as OPC).
Portland cement is a basic ingredient of concrete, mortar and most non-specialitygrout. The
most common use for Portland cement is in the production of concrete. Concrete is a
composite material consisting of aggregate (gravel and sand), cement, and water. As a
construction material, concrete can be cast in almost any shape desired, and once hardened,
can become a structural (load bearing) element. Portland cement may be gray or white.
Portland cement blends
These are often available as inter-ground mixtures from cement manufacturers, but similar
formulations are often also mixed from the ground components at the concrete mixing plant.
Portland blastfurnace cement contains up to 70% ground granulated blast furnace slag, with
the rest Portland clinker and a little gypsum. All compositions produce high ultimate
strength, but as slag content is increased, early strength is reduced, while sulfate resistance
increases and heat evolution diminishes. Used as an economic alternative to Portland
sulfate-resisting and low-heat cements.
Portland flyash cement contains up to 30% fly ash. The fly ash is pozzolanic, so that
ultimate strength is maintained. Because fly ash addition allows a lower concrete water
content, early strength can also be maintained. Where good quality cheap fly ash is
available, this can be an economic alternative to ordinary Portland cement.

36

Portland pozzolan cement includes fly ash cement, since fly ash is a pozzolan, but also
includes cements made from other natural or artificial pozzolans. In countries where
volcanic ashes are available (e.g. Italy, Chile, Mexico, the Philippines) these cements are
often the most common form in use.
Portland silica fume cement. Addition of silica fume can yield exceptionally high strengths,
and cements containing 5-20% silica fume are occasionally produced. However, silica fume
is more usually added to Portland cement at the concrete mixer.
Masonry cements are used for preparing bricklaying mortars and stuccos, and must not be
used in concrete. They are usually complex proprietary formulations containing Portland
clinker and a number of other ingredients that may include limestone, hydrated lime, air
entrainers, retarders, waterproofers and coloring agents. They are formulated to yield
workable mortars that allow rapid and consistent masonry work. Subtle variations of
Masonry cement in the US are Plastic Cements and Stucco Cements. These are designed to
produce controlled bond with masonry blocks.
Expansive cements contain, in addition to Portland clinker, expansive clinkers (usually
sulfoaluminate clinkers), and are designed to offset the effects of drying shrinkage that is
normally encountered with hydraulic cements. This allows large floor slabs (up to 60 m
square) to be prepared without contraction joints.
White blended cements may be made using white clinker and white supplementary materials
such as high-purity metakaolin.
Colored cements are used for decorative purposes. In some standards, the addition of
pigments to produce "colored Portland cement" is allowed. In other standards (e.g. ASTM),
pigments are not allowed constituents of Portland cement, and colored cements are sold as
"blended hydraulic cements".
Very finely ground cements are made from mixtures of cement with sand or with slag or
other pozzolan type minerals which are extremely finely ground together. Such cements can
have the same physical characteristics as normal cement but with 50% less cement
particularly due to their increased surface area for the chemical reaction. Even with intensive
grinding they can use up to 50% less energy to fabricate than ordinary Portland cements.
Non-Portland hydraulic cements

37

Pozzolan-lime cements. Mixtures of ground pozzolan and lime are the cements used by the
Romans, and are to be found in Roman structures still standing (e.g. the Pantheon in Rome).
They develop strength slowly, but their ultimate strength can be very high. The hydration
products that produce strength are essentially the same as those produced by Portland
cement.
Slag-lime cements.Ground granulated blast furnace slag is not hydraulic on its own, but is
"activated" by addition of alkalis, most economically using lime. They are similar to
pozzolan lime cements in their properties. Only granulated slag (i.e. water-quenched, glassy
slag) is effective as a cement component.
Supersulfated cements. These contain about 80% ground granulated blast furnace slag, 15%
gypsum or anhydrite and a little Portland clinker or lime as an activator. They produce
strength by formation of ettringite, with strength growth similar to a slow Portland cement.
They exhibit good resistance to aggressive agents, including sulfate.
Calcium aluminate cements are hydraulic cements made primarily from limestone and
bauxite. The active ingredients are monocalcium aluminate CaAl2O4 (CaO Al2O3 or CA in
Cement chemist notation, CCN) and mayenite Ca12Al14O33 (12 CaO 7 Al2O3 , or C12A7 in
CCN). Strength forms by hydration to calcium aluminate hydrates. They are well-adapted
for use in refractory (high-temperature resistant) concretes, e.g. for furnace linings.
Calcium sulfoaluminate cements are made from clinkers that include ye'elimite
(Ca4(AlO2)6SO4 or C4A3

in Cement chemist's notation) as a primary phase. They are used

in expansive cements, in ultra-high early strength cements, and in "low-energy" cements.

Hydration produces ettringite, and specialized physical properties (such as expansion or
rapid reaction) are obtained by adjustment of the availability of calcium and sulfate ions.
Their use as a low-energy alternative to Portland cement has been pioneered in China, where
several million tonnes per year are produced. Energy requirements are lower because of the
lower kiln temperatures required for reaction, and the lower amount of limestone (which
must be endothermicallydecarbonated) in the mix. In addition, the lower limestone content
and lower fuel consumption leads to a CO 2 emission around half that associated with
Portland clinker. However, SO2 emissions are usually significantly higher.
"Natural" Cements correspond to certain cements of the pre-Portland era, produced by
burning argillaceous limestones at moderate temperatures. The level of clay components in

38

the limestone (around 30-35%) is such that large amounts of belite (the low-early strength,
high-late strength mineral in Portland cement) are formed without the formation of
excessive amounts of free lime. As with any natural material, such cements have highly
variable properties.
Geopolymer cements are made from mixtures of water-soluble alkali metal silicates and
aluminosilicate mineral powders such as fly ash and metakaolin.

COMPANY PROFILE
Kesoram Cement Industry is one of the leading manufactures of cement in India. It is a day
process cement Plant. The plant capacity is 8.26 lakh tones per annum It is located at
Basanthnagar in Karimnagar district of Andhra Pradesh. Basanthnagar is 8 km away from
the Ramagundram Railway station, linking Madras to New Delhi. The Chairman of the
Company is syt. B.K.Birla,
HISTORY :
The first unit at Basanthnagar with a capacity of 2.1 lakh tones per annum
incorporating humble suspension preheated system was commissioner during the year 1969.
The second unit was setup in year 1971 with a capacity of 2.1 lakh tones per annum went on
stream in the year 1978. The coal for this company is being supplied from
SingereniColleries and the power is obtained from APSEB. The power demand for the
factory is about 21 MW. Kesoram has got 2 DG sets of 4 MW each installed in the year
1987.

39

Kesoram Cement has setup a 15 KW captor power plant to facilitate for

uninterrupted power supply for manufacturing of cement at 24th august 1997 per hour 12
mw, actual power is 15 mw.
The Company was incorporated on 18th October, 1919 under the Indian Companies Act,
1913, in the name and style of Kesoram Cotton Mills Ltd. It had a Textile Mill at 42, Garden
Reach Road, Calcutta 700 024. The name of the Company was changed to Kesoram
Industries & Cotton Mills Ltd. on 30th
August, 1961 and the same was further changed to Kesoram Industries Limited on 9th July,
1986. The said Textile Mill at Garden Reach Road was eventually demerged into a separate
company.
The First Plant for manufacturing of rayon yarn was established at Tribeni, District Hooghly,
West Bengal and the same was commissioned in December, 1959 and the second plant was
commissioned in the year 1962 enabling it to manufacture 4,635 metric tons per annum
(mtpa) of rayon yarn. This Unit has 6,500 metric tons per annum (mtpa) capacity as
on31.3.2009.
The plant for manufacturing of transparent paper was also set up at the same location at
Tribeni, District Hooghly, West Bengal, in June, 1961. It has the annual capacity to
manufacture

3,600

metric

tons

per

annum

(mtpa)

of

transparent

Paper.

The Company diversified into manufacturing of cast iron spun pipes and pipe fittings at
Bansberia, District Hooghly, West Bengal, with a production capacity of 45,000 metric tons
per annum (mtpa) of cast iron spun pipes and pipe fittings in December, 1964.
The Company subsequently diversified into the manufacturing of Cement and in 1969
established its first cement plant under the name 'Kesoram Cement' at Basantnagar, Dist.
Karimnagar (Andhra Pradesh) and to take advantage of favourable market conditions, in
1986 another cement plant, known as 'Vasavadatta Cement', was commissioned by it at
Sedam, Dist.

40

Gulbarga (Karnataka). The cement manufacturing capacities at both the plants were
augmented from time to time according to the market conditions and as on 31.3.2009
Kesoram Cement and Vasavadatta Cement have annual cement manufacturing capacities of
1.5

million

metric

tons

and

4.1

million

metric

tons

respectively.

The Company in March 1992, commissioned a plant at Balasore known as Birla Tyres in
Orissa, for manufacturing of 10 lac MT p.a. automotive tyres and tubes in the first phase in
collaboration with Pirelli Ltd., U.K., a subsidiary company of the world famous Pirelli
Group of Italy - a pioneer in production and development of automotive tyres in the world.
The capacity at the said plant was further augmented during the year by 19 MT per day
aggregating to 271 MT per day production facility. The Greenfield Project of 257 MT per
day capacity in the State of Uttarakhand with a capex of about Rs.760 crores commenced
the commercial production in phases during the financial year 2008-09.The Company as on
31.3.2009 had the manufacturing capacities of 3.71 million tyres, 2.95 million tubes and
1.53 million flaps per annum in the Plants including at Uttarakhand Plant.
It has small manufacturing capacities of various Chemicals at Kharda in the State of West
Bengal also. It has the annual manufacturing capacities of 12,410 mtpa of Caustic Soda Lye,
5,045 mtpa of Liquid Chlorine, 6,205 mtpa of Sodium Hypochlorite, 8,200 mtpa of
Hydrochloric Acid, 3,200 mtpa of Ferric Alum, 18,700 mtpa of Sulphuric Acid and
1,620,000 m3pa of purified Hydrogen Gas.
The Company is a well-diversified entity in the fields of Cement, Tyre, Rayon Yarn,
Transparent Paper, Spun Pipes and Heavy Chemicals with two core business segments i.e.
Cement

and

Tyres.

In Spun Pipes & Foundries, a unit of the Company, work suspended from 2nd May, 2008
still

commences

till

further

notice.

The Company as of now is listed on three major Stock Exchanges in India i.e. Bombay
Stock Exchange Ltd., Mumbai, Calcutta Stock Exchange Association Ltd., Kolkata and

41

National Stock Exchange of India Ltd., Mumbai and at the Societe de la Bourse de
Luxembourg, Luxembourg.
A further expansion upto 1.65 million tons of cement per annum in Vasavadatta Cement at
Sedam in Karnataka as unit IV at the same site is in progress, with a 17.5 MW Captive
Power Plant, involving a capital expenditure of about Rs. 783.50 crores (including the cost
of Captive Power Plant).
The commercial production of cement in the aforesaid unit IV has commenced in June 2009.
The work for the further expansion in the Tyres Section at Uttarakhand for radial tyres with
100 MT per day capacity and bias tyres with 125 MT per day capacity involving an
estimated aggregate capital outlay of about Rs. 840 crores is under progress. The Board has
further approved a Motor Cycle Tyre Project of 70 MT per day capacity at the same site
involving a capital outlay of Rs.190 crore. The civil construction of both the Projects is in
full swing. The commercial production in both the Projects is likely to start by December
2009/ January 2010.
Birla Supreme in popular brand of Kesoram cement from its prestigious plant of
Basantnagar in AP which has outstanding track record.In performance and productivity
serving the nation for the last two and half decades. It has proved its distinction by bagging
several national awards. It also has the distinction of achieving optimum capacity utilization.
Kesoram offers a choice of top quality portioned cement for light, heavy
constructions and allied applications. Quality is built every fact of the operations.
The plant lay out is rational to begin with. The limestone is rich in calcium
carbonate a key factor that influence the quality of final product. The day process
technology uses in the latest computerized monitoring overseas the manufacturing process.
Samples are sent regularly to the bureau of Indian standards. National council of
construction and building material for certification of derived quality norms.
The company has vigorously undertaking different promotional measures for
promoting their product through different media, which includes the use of news papers
magazine, hoarding etc.
Kesoram cement industry distinguished itself among all the cement factories in Indian by
bagging the National Productivity Award consecutively for two years i.e. for the year 1985-

42

1987. The federation of Andhra Pradesh Chamber & Commerce and Industries (FAPCCI)
also conferred on Kesoram Cement. An award for the best industrial promotion expansion
efforts in the state for the year 1984.Kesoram also bagged FAPCCI awarded for Best
Family Planning Effort in the state for the year 1987-1988.
One among the industrial giants in the country today, serving the nation on the
industrial front. Kesoram industry ltd., has a checked and eventful history dating back to the
twenties when the Industrial House of Birlas acquired it. With only a textile mill under its
banner 1924, it grew from strength to strength and spread its activities to newer fields like
Rayon, Transparent paper, pipes, Refractors, tyres and other products.
Looking to the wide gap between the demand and supply of a vital commodity
cement, which play in important role in National building activity the Government of India
had de-licensed the cement industry in the year 1966 with a review to attract private
entrepreneur to augment the cement production. Kesoram rose to the occasions and divided
to set up a few cement plants in the country.
Kesoram cement undertaking marketing activities extensively in the state of Andhra
Pradesh, Karnataka, Tamilnadu, Kerala, Maharashtra and Gujarat. In A.P. sales Depts., are
located in different areas like Karimnagar, Warangal, Nizamabad, Vijayawada and Nellore.
In other states it has opened around 10 depots.
The market share of Kesoram Cement in AP is 7.05%. The market share of the
company in various states is shown as under.
STATES

MARKET SHARE

Karnataka

4.09%

Tamilnadu

0.94%

Kerala

0.29%

Maharashtra

2.81%

Process and Quality Control :

It has been the endeavor of Kesoram to incorporate the Worlds latest technology in
the plant and today the plant has the most sophisticated.
X-ray analysis :

43

Fully computerized XRF and XRD X-RAY Analysers keep a constant round the
clock vigil on quality.
Supreme performance :
One of the largest Cement Plants in Andhra Pradesh, the plant in corporate the latest
technology in Cement - making.
It is professionally managed and well established Cement Manufacturing Company
enjoying the confidence of the consumers. Kesoram has outstanding track record in
performance and productivity with quite a few national and state awards to its credit.
BIRLA SUPREME, the 43 Grade Cement, is a widely accepted and popular brand in
the market, commanding a premium.
However to meet the specific demands of the consumer, Kesoram bought out the 53
grade BIRLA SUPREME GOLD, which has special qualities like higher fineness, quicksetting, high compressive strength and durability.
Supreme Strength :
Kesoram Cement has huge captive Limestone Deposits, which make it possible to
feed high- grade limestone consistently, Its natural Grey colour is anion- born ingredient and
gives good shade.
Both the products offered by Kesoram, i.e. BIRLA SUPREME-43 Grade and BIRLA
SUPREME-GOLD-53 Grade cement are outstanding with much higher compressive
strength and durability.
The following characteristics show their distinctive qualities.
Comprehensive

Opc 43

Birla

Opc 43 gr

Birla

Strength

grls 8112

Supreme 43

Is 1226987

Supreme

3 days mpa
7 days mpa
28 days mpa

1989
Min. 23
Min. 23
Min. 43

grade
31 +
42+
50+

Min. 27
Min. 37
Min. 53

Gold 53 gr
38+
48+
60+

D.C. SYSTEM :

44

Clinker making process is a key step in the overall cement making process. In the case of
BIRLA SUPREME/GOLD, the clinker-making process is totally computer. control. The
Distributed Control System (DCS) constantly monitors the process and ensures operating
efficiency. This eliminates variation and ensures consistency in the quality of Clinker.
PHYSICAL CHARACTERISTICS
Ope 43

Birla

Ope 53 gr

Birla Supreme

Is 8 112-89

Supreme

Is 12269-87

Gold 53 gr

Setting time

Min30

43 grade
120-180

Min 30

130-170

a. Initial (mats)

Max 600

180-240

Max 600

170-220

b. final (mats)

Min 225

270-280

300-320

Fincncssm 2/Kg

Max 10

1.0-2.0

Max 10

0.5-1.0

Soundness

Max 0.8

0.04-0.08

Max 0.080.

0.04-0.2

Min 225

a. le-chart (mm)
b. autoclave (%)
SUPREME EXPERTISE:
The Best Technical Team, exclusive to Kesoram, mans the Plant and monitors the
process, to blend the cement in just the required proportions, to make BIRLA
SUPREME/GOLD OF Rock Strength.
18 MILLION TONES OF SOLID FOUNDATION :
Staying at the top for over a Quarter Century, Quarter Century is no less an achievement.
Infact.Kesoram is synonymous with for over 28 years.
Over the years, Kesoram has dispatched 18 million tones of cement to the nook and corners
of the country and joined hands in strengthening the Nation. No one else in Andhra Pradesh
has this distinction. The prestigious World Bank aided Ramagundam Super Thermal Power
Project of NTPC and Mannair Dam of Pochampad project in AP arc a couple of projects for
which Kesoram Cement was exclusively uses: to cite an example.
CHEMICAL CHARACTERISTICS :

45

Opc 43 gr

Birla

Is 81 132-989 Supreme

Ope 53 gr

Birla

Is 12269-

Supreme

87
Max 4.0

Gold 53 gr.
<1.5

Loss on inflection %

Max 5

43 grade
<1.6

Insoluble residue %

Max 2.0

<0.8

Max 2.0

< 0.6

Magnesium oxide %

Max 6.0

< 1.3

Max 6.0

< 1.3

Lime saturation factor

0.66-1.02

0.8-0.9

0.8-1.02

0.88-0.9

Alumna: iron ratio

MinO.66

1.5-1.7

MinO.66

1.5-1.7

Sulfuric anhydride %

Max 2.5/3

1.6-2.0

Max 2. 5/3

1.6-2.0

Alkalis Chlorides

Max 0.05

Max 0.01

Max 0.05

Max 0.4

Kesoram Cement - advantages :

Helps in designing sleeker and more elegant.
Structures, giving greater flexibility in design concept.
Due to its fine quality, super fine construction can be achieved..Its gives maximum strength
at Minimum use of cement with water in the water cement ratio, especially the 53 grade
Birlas supreme-gold.
Feathers in Kesoram'scap :
Kesoram has outstanding track record, achieving over 100% capacity utilization I
productivity and energy conservation. It has proved its distinction by bagging several
national and state awards, noteworthy being.
NATIONAL :
1.

National productivity award for 1985-86

2.

National productivity award for 1986-87

3.

National award for mines safety for 1985-86

4.

National award for mines safety for 1986-87

5.

National award for energy conservation 1989-90

STATE
1.

A.P. State productivity award for 1988

46

2.

State award for best industrial management 1988-89.

3.

Best industrial productivity award of FAPCCI (federation of A.P. chamber of

commerce and industry), 1991

4.

Best management award of the state Govt. 1993

5.

FAPCCI award for the workers welfare, 1995-96.

I.S.O. 9002
All quality systems of Kesoram have been certified under I.S.O. 9002/1.S. 4002, which
proves the worldwide acceptance of the products.
All quality systems in production and marketing of the product have been certified by B.I.S.
under ISO 9002/1S 14002.
The first unit was installed at basanthnagar with a capacity of 2.5 lakhs TPA (tones per
annum) incorporating humble supervision, preheated system, during the year 1969.
The second unit followed suit with added a capacity of 2 lakhs TPA in 1971.
The plant was further expanded to 9 lakhs by adding 2.5 lakhs tones in august 1978, 1.13
lakhs tones in January 1981 and 0.87 lakhs tones in September 1981.
Power:
Singarein collieries make the supply of coal for this industry and the power
was obtained from AP TRANSCO. The power demand for the factory is about 21MW.
Kesoram has got 2-diesel generator seats of 4 MW each installed in the year 1987.
Kesoram cement now has a 15MWcaptive power plant to facilities for
uninterrupted power supply for manufacturing of cement.
Performance:
The performance of kersoram cement industry has been
outstanding achieving over cent percent capacity utilization all through despite many odds
like power cuts and which most 40% was wasted due to wagon shortage etc.
The company being a continuous process industry works round the clock and
has excellent records of performance achieving over 1005 capacity utilization.
Kesoram has always combined technical progress with industrial performance. The
company had glorious track record for the last 27 years in the industry.
Technology:

47

Kesoram cement uses most modern technology and the computerized control
in the plant. A team of dedicated and well- experienced experts manages the plant.
The quality is maintained much above the bureau of Indian standards.
The raw materials used for manufacturing cement are:
Lime stone
Bauxite
Hematite
Gypsum
Environmental and Social Obligations:
For environmental promotion and to keep up the ecologicalbalancae,this section has
planted over two lakhs trees .on social obligation front ,this section has undertaken various
social welfare programs by adopting ten nearly villages, organizing family welfare campus,
surgical camps, animal health camps blood donation camps, children immunization camps,
seeds, training for farmers etc were arranged.
Welfare and Recreation Facilities:
For the purpose of recreation facilities 2 auditoriums were provided for
playing indoor games, cultural function and activities like drama, music and dance etc.
The industry has provided libraries and reading rooms. About 1000 books
are available in the library. All kinds of newspaper, magazines are made available.
Canteen is provided to cater to the needs of the employees for supply of snacks, tea,
coffee and meals etc.
One English medium and one Telugu medium school are provided to meet the
educational requirements.
The company has provided a dispensar with a qualified medical office and
paramedical staff for the benefit of the employees. The employees covered under ESI
scheme have to avail the medical facilities from the ESI hospital.
Competitions in sports and games are conducted ever year for august 15 th
Independence Day and January 26th, republic day among the employees.
Electricity:
The power consumption per ton of cement has come down to 108 units
against 113 units last year, due to implementation of various energy saving measures. The

48

performance of captive power plant of this section continues to be satisfactory. Total power
generation during the year was 84 million units last year. This captive power plant is a major
role in keeping power costs with in economic levels.
The management has introduced various HRD programs for training and
development and has taken various other measures for the betterment of employees
efficiency.
The section has installed adequate air pollution control system and equipment
and is ISO14001 such as Environment management system is under implementation.
Awards:
Kesoram cement bagged many prestigious awards including national awards for
productivity, technology, conservation and several state awards since 1984. The following
are the some of important awards.

AWARDS OF KESORAM CEMENT:

National/
Year
1989-90

Awards
Management award community

state
State

1991

Development
Energy conservation may day award of the

State

1991

Govt.
Pandit Jawaharlal Nehru rolling trophy for best

State

1993

National productivity effort indira Gandhi

State

1994

national award
Best management award

State

1994-

Best industrial rebellion award

State

1995
1995

Rural development by chief minister

State

1995

Environment and mineral conservation award

Best industrial rebellion award

State

1995-

Best effort of an industrial unit to development

National

No
1

49

1996

rural economy shri.s.r.rungta award for social

10

1996

Awareness for best rural development efforts

State

11

1999

Best workers welfare best family welfare

State

12

2001

award
First prize for mine environment &pollution

State

13

2002

control for the 3rd year in succession

Vanamithra award from AP Govt

State

14

2003

Company has got OHSAS-18001

State

15

2005

Certification from DNV, New Delhi.

State

16

2006

Award for pollution control and environmental

State

protection FAPCCI award for best rural

development in the state

Products of the organization:

50

DATA ANALYSIS AND INTERPRETATION

KESORAM CEMENTS LTD
ESTIMATED COST IN SALES
TABLE-I

SL.N
O

PARTICULAR

(Rs in corers)

Coasted estimated
for the 2015-16

Actual for the year

2015-16

Sales
Fixed cost recovery

724

72.4

618

61.8

Variable cost recovery

840

84.0

740

74.0

51

Fuel price adjustment recovery

820

82.0

863

86.3

Own consumption

132

13.2

148

14.8

Total of 1

2516

251.6

2369

236.9

Average intensives

102

10.2

98

9.8

Other income

56

5.6

49

4.9

2674

267.4

2516

251.6

GRAND TOTAL (1+2+3)

INTERPRETATION
The data pertaining to the generation and consumption have been obtained from the year
2015-16 and represented in table -1. The aspect included are total generation in (croresRs)
and utilization for auxiliary consumption respectively.
During the year 2015-16 the sales, fixed costs, variable cost , own Consumption was
decreased. When the estimated costed so sales consumption is 267% respectively.
During the year 2015-16 the average intensive are decreased 9.8% the other Income also
decreased 7% respectively.
Finally with regard to the result in revenue cost of Kesoram cements
totally decreased 251.6% in the year 2015-16 respectively.

52

KESORAM CEMENTS LTD

ESTIMATED COST IN SALES
TABLE-II

SL.N
O

PARTICULAR

(Rs in corers)

Costed estimated
for the 2014-15

Actual for the year

2014-15

Sales
Fixed cost recovery

702

70.2

598

59.8

Variable cost recovery

802

80.2

680

68.0

53

adjustment recovery

790

79.0

852

85.2

Own consumption

121

12.1

122

12.2

Total of 1

2398

239.8

2168

216.8

Average intensives

96

9.6

84

8.4

Other income

51

5.1

40

4.0

2545

254.5

2292

229.2

GRAND TOTAL (1+2+3)

INTERPRETATION
The data pertaining to the generation and consumption have been obtained from the year
2014-15 and represented in table -2. The aspect included are total generation in (croresRs)
and utilization for auxiliary consumption respectively.
During the year 2014-15 the sales, fixed costs, variable cost,own Consumption was
decreased. When the estimated costed so sales consumption is 254.5% respectively.
During the year 2014-15 the average intensive are decreased 13% the other Income also
decreased11% respectively.
Finally with regard to the result in revenue cost of Kesoram Cements

54

totally decreased 229.2% in the year 2014-15 respectively.

KESORAM CEMENTS LTD

ESTIMATED COST IN SALES
TABLE-III

SL.N
O

PARTICULAR

Costed estimated
for the 2013-14

Sales
Fixed cost recovery

(Rs in corers)

Actual for the year

2013-14

%
657

55

%
65.7

565

56.5

Variable cost recovery

762

76.2

563

56.3

adjustment recovery

750

75.0

798

79.8

Own consumption

121

12.1

102

10.2

Total of 1

2290

229.0

2028

202.8

Average intensives

89

8.9

84

8.4

Other income

51

5.1

40

4.0

2430

243.0

2152

215.2

GRAND TOTAL (1+2+3)

INTERPRETATION
The data pertaining to the generation and consumption have been obtained from the year
2013-14 and represented in table -3. The aspect included are total generation in (croresRs)
and utilization for auxiliary consumption respectively.
During the year 2013-14 the sales, fixed costs, variable cost , own Consumption was
decreased. When the estimated costed so sales consumption is 243.0% respectively.

56

During the year 2013-14 the average intensive are decreased 5% the other Income also
decreased11% respectively.
Finally with regard to the result in revenue cost of KESORAM CEMENTS LTD
totally decreased 215.2% in the year 2013-14 respectively.

KESORAM CEMENTS LTD

ESTIMATED COST IN SALES
TABLE-IV
SL.N
O

PARTICULAR

Costed estimated
for the 2012-11

57

(Rs in corers)
Actual for the year
2012-11

Sales

Fixed cost recovery

680

68.0

569

56.9

Variable cost recovery

789

78.9

623

62.3

adjustment recovery

695

69.5

812

81.2

Own consumption

121

12.1

122

12.2

Total of 1

2285

228.5

2126

212.6

Average intensives

96

9.6

84

8.4

Other income

51

5.1

40

4.0

2432

243.2

2250

225.0

GRAND TOTAL (1+2+3)

INTERPRETATION
The data pertaining to the generation and consumption have been obtained from the year
2012-13 and represented in table -4. The aspect included are total generation in (croresRs)
and utilization for auxiliary consumption respectively.
During the year 2012-13 the sales, fixed costs, variable cost , own Consumption was
decreased. When the estimated costed so sales consumption is 243.2% respectively.

58

During the year 2012-13 the average intensive are decreased 13% the other Income also
decreased11% respectively.
Finally with regard to the result in revenue cost of Kesoram cements ltd
totally decreased 225.0% in the year 2012-13 respectively.

Kesoram Cements Ltd

Operational Expenditure Cost for the Year 2015-16

TABLE I
Rs in corers

59

SL.
NO

1
2
3

COSTED ESTIMATED

PARTICULAR

FOR THE 2015-16

VARIABLE COST
OPERATIVE

ACTUAL FOR THE

YEAR

AMOUNT

RS/MT

AMOUNT

897

89.7

856

2015-16
S/MT
85.6

254

25.4

215

21.5

Deprecation

42

4.2

15

1.5

Interest on fixed capital

18

1.8

20

2.0

Total of 3

60

6.0

35

3.5

1211

121.1

1106

110.6

MAINTENANCE COST
FINANCE CHARGES

GRAND TOTAL (1+2+3)

INTERPRETATION
Observed from the above table that the operational expenditure cost of Kesoram Cements
Ltd in the year 2015-16.Maintenance, employee cost, stationary & general expenses, rebate
and share of other expenses is all are fluctuating with the expenses of the year 2015-16.
However the total operating maintenance costs are 25.4% decreasing respectively.
In finance charges depreciation and interest on fixed capital, has been included
The total finance charges recording decreasing of 9.5% in the year 2015-16 respectively.
The overall costs results of Kesoram Cements Ltd are earning more profits.

Kesoram Cements Ltd

Operational Expenditure Cost for the Year 2014-15

TABLE II
Rs in corers

60

SL.
NO

1
2
3

COSTED ESTIMATED

PARTICULAR

FOR THE 2014-15

VARIABLE COST
OPERATIVE

ACTUAL FOR THE

YEAR

AMOUNT

RS/MT

AMOUNT

841

84.1

822

2014-15
S/MT
82.2

247

24.7

201

20.1

Deprecation

39

3.9

12

1.2

Interest on fixed capital

15

1.5

18

1.8

Total of 3

54

5.4

30

3.0

1142

114.2

1053

105.3

MAINTENANCE COST
FINANCE CHARGES

GRAND TOTAL (1+2+3)

INTERPRETATION
Observed from the above table that the operational expenditure cost of Kesoram Cements
Ltd in the year 2014-15.Maintenance, employee cost, stationary & general expenses, rebate
and share of other expenses is all are fluctuating with the expenses of the year 2014-15.
However the total operating maintenance costs are 24.7% decreasing respectively.
In finance charges depreciation and interest on fixed capital, has been included
The total finance charges recording decreasing of 2.4% in the year 2014-15respectively.
The overall costs results of Kesoram Cements Ltd are earning more profits.

Kesoram Cements Ltd

Operational Expenditure Cost for the Year 2013-14

TABLE III

61

Rs in corers

SL.
NO

1
2
3

PARTICULAR

VARIABLE COST
OPERATIVE

COSTED ESTIMATED
FOR THE 2013-14

ACTUAL FOR THE

YEAR

AMOUNT

RS/MT

AMOUNT

811

81.1

798

2013-14
S/MT
79.8

214

21.4

157

15.7

Deprecation

36

3.6

11

1.1

Interest on fixed capital

15

1.5

18

1.8

Total of 3

51

5.1

29

2.9

1076

107.6

984

98.4

MAINTENANCE COST
FINANCE CHARGES

GRAND TOTAL (1+2+3)

INTERPRETATION
Observed from the above table that the operational expenditure cost of Kesoram Cements
Ltd in the year 2013-14.Maintenance, employee cost, stationary & general expenses, rebate
and share of other expenses is all are fluctuating with the expenses of the year 2013-14.
However the total operating maintenance costs are 21.4% decreasing respectively.
In finance charges depreciation and interest on fixed capital, has been included
The total finance charges recording decreasing of 2.2% in the year 2013-14respectively.
The overall costs results of Kesoram Cements Ltd are earning more profits.

Kesoram Cements Ltd

Operational Expenditure Cost for the Year 2012-13

TABLE IV
Rs in corers

62

SL.
NO

1
2
3

PARTICULAR

VARIABLE COST
OPERATIVE

COSTED ESTIMATED
FOR THE 2012-13

ACTUAL FOR THE

YEAR

AMOUNT

RS/MT

AMOUNT

754

75.4

658

2012-13
S/MT
65.8

198

19.8

135

13.5

Deprecation

29

2.9

0.9

Interest on fixed capital

15

1.5

18

1.8

Total of 3

44

4.4

27

2.7

GRAND TOTAL (1+2+3)

996

99.6

820

82.0

MAINTENANCE COST
FINANCE CHARGES

INTERPRETATION
Observed from the above table that the operational expenditure cost of Kesoram Cements
Ltd in the year 2012-13.Maintenance, employee cost, stationary & general expenses, rebate
and share of other expenses is all are fluctuating with the expenses of the year 2012-13.
However the total operating maintenance costs are 19.8% decreasing respectively.
In finance charges depreciation and interest on fixed capital, has been included
The total finance charges recording decreasing of 5.3% in the year 2012-13 respectively.
The overall costs results of Kesoram Cements Ltd are earning more profits.

FINDINGS & CONCLUSIONS

SUGGESTIONS
BIBLIOGRAPHY

63

FINDINGS
Every organization has pre-determined set of objectives and goals, but reaching those
objectives and goals only by proper planning and executing of the plans economically.
The Hero MotoCorp Ltdis objectives of planning promoting and organizing an integrated
development of cement Company.
The corporation mission of Hero MotoCorp Ltdis to make available and quality service in
increasingly large quantities, the company will spear head the process of accelerated
development of banking sector by expeditiously.
The organization needs the capable personalities as management to lead the organization
successfully, the management makes the plans and implement of these plans are expressed in
terms of cost and cost control.
The Hero MotoCorp Ltdhas cost process in two stages. One is the capital expenditure cost
and another is operating maintenance cost, the capital expenditure cost shows the list of
capital projects selected for investment along with their estimated cost, operating &
maintenance cost refers to the repairs & maintenance costs, the special costs are rarely used
in the organization like long-term costs, research & development cost and cost for
consultancy.
It Is to make available and quality work efficient resources and implementation of
sophisticated technology and cement generation and also creating ambience of collective
working of its employees.

64

SUGGESTIONS

Planning has become the primary function of management most of the planning relates to
individual and individual proposals. Costs are nothing but his expressions, largely in
financial terms, cost control has, therefore become and essential tool of management for
controlling and maximizing profits.
The company objectives of the organization and how they can be achieved through
cost control
Time tables for all stages of costing follow
Reports, statements, forms and other record to be maintained
Continuous comparison of actual performance with coasted performance.

65

BIBLIOGRAPHY

FINANCIAL ACCOUNTING

RP TRIVEDI

FINANCIAL MANAGEMENT

I.M. PANDEY

ANNUAL REPORT OF HERO MOTOCORP LTD

FUNDAMENTAL OF FINANCIAL MANAGEMENT
PRASANNA CHANDRA

DETAILED PROJECT REPORT OF Hero MotoCorp Ltd

www.google.com
www.hero.com
www.costcontrolinindia.com
www.yahoofinance.com

66