Académique Documents
Professionnel Documents
Culture Documents
FOR
MAHARASHTRA STATE POWER GENERATION COMPANY
(SPECIALISATION)
(FINANCE)
SUBMITTED BY
Mr./Ms. (KUNAL RAMESH WAGH)
MBA 2nd YEAR
YEAR 2018-19
SUBMITTED TO
SAVITRIBAI PHULE UNIVERSITY OF PUNE
~1~
ACKNOWLEDGEMENT
I would like to this opportunity to express my respect & deep gratitude to Mr.
D.K. SHINDE Branch Manager of MAHARASHTRA STATE POWER
GENERATION COMPANY
Nashik division for his timely help & positive encouragement. I would also like to
express my gratitude towards my project guide Prof. M. R. JADHAV & also Dr. Y. M.
GOSAVI Director of the institute for guiding me in successful completion of this project.
I expected my sincere thanks to all faculty members of the college and all employees of
Mahindra sonaltd , Nasik, for their king guidance, cooperation and assistance in
completing this project.
~2~
DECLARATION
I hereby declare that this project work titled“Analytical Study of Cost of Material
(Coal)”in partial fulfillment of Masterof Business Administrationdegree course of
SavitribaiPhule Pune University is my own work and submitted by me under the
guidance of Prof. M. R. JADHAV
I also declare that the present work has not been submitted by me to any other University
for the fulfillment of any degree or diploma.
I have prepared this report independently and I have gathered all the relevant information
personally. I have prepared this project for MBA curriculum 2018-2019.
Date :
Place :
~3~
TABLE OF CONTENTS
Chapter Page
Contents
No. No.
1 INTRODUCTION 08
1.1 Object of the Project 09-10
1.2 Introduction (Selection of the topic) 11-14
1.3 Objectives of the study 15-16
1.4 Statement of Hypothesis (if any) 17-20
1.5 Scope of the Study 21-23
1.6 Rationale/contribution of the study 24-27
1.7 Limitations of the study 28-33
2 RESEARCH METHEDOLOGY 34
2.1 Method of study 35
2.2 Sampling 36
2.3 Data Collection 36-37
2.4 Presesntation of Data, Tools of analysis & interpretation 38-42
3 PROFILE OF THE ORGANISATION 43
3.1 History & general information 44
3.2 Organisation 45
3.3 Products/Activities 46
3.4 Corporate and Functional practices
4 REVIEW OF LITERATURE
4.1 Meaning & Concepts of the Topic
4.2 Basic theories of the topic
4.3 Review of Research on the selected topic
5 DATA PRESENTATION, ANALYSIS & INTERPRETATION 47
6 CONCLUSION & SUGGESTIONS 57
~4~
ANNEXURE/APPENDICES
I) QUESTIONNAIRE
II) ABBREVIATIONS
III) CONCEPTS/GLOSSARY 57
IV) REFERENCES/BIBLIOGRAPHY 60
~5~
EXECUTIVE SUMMARY
The NTPS Plant is located at Eklahare, five kilometer away from Nashik Road,
Nashik. It is one of the units of MSPGCL (Maharashtra State Power Generation Co.
Ltd.). The NTPS is thermal power station in which electricity is generated mainly using
coal and water vapor. The topic ‘Material Costing’ was selected after discussions with
Accounts Department of the organization and project guide at our institute. The project
The First chapter contains Company profile which gives company establishment,
capacity, power stations, power distribution and achievements, company CSR etc. Data
the topic i.e. Costing System. The chapter contains meaning and techniques of Costing;
Material Costing is being one of them, its importance etc. All the details regarding raw
Secondary data.
The Fourth chapter is data analysis and interpretation which contains details about
month wise coal purchases, consumption and expenditure. Data regarding it extracted
~6~
from the financial statements of the company, its interpretation and in some cases reasons
The Fifth chapter contains findings which we drawn from the data given by the
The Sixth chapter is conclusions, which contains conclusions drawn from the
amount spent on purchases of coal, coal relating expenditure and losses using financial
Suggestions, which gives combination of preventive and curative actions that should be
taken by the management of the organization to minimize the transit loss and other coal
related expenses.
The chapter entitled ‘Bibliography’ gives details about the references availed for
the accomplishment of the project. The source contains books, magazines, annual reports
~7~
Chapter : I
INTRODUCTION
~8~
INTRODUCTION OF STUDY
The ICMA (Institute of Cost and Management Accounting) defines material
costing as, “the costing of commodities, other than fixed asset, introduces in to products
or consume in the operation of an organization”.
~9~
MEANING
The term ‘cost’ means the amount of expenses [actual or notional] incurred on or
attributable to specified thing or activity.
As per Institute of cost and work accounts (ICWA) India, Cost is ‘measurementin
monetary terms of the amount of resources used for the purpose ofproduction of goods or
rendering services.
To get the results we make efforts. Efforts constitute cost of getting theresults. It
can be expressed in terms of money; it means the amount ofexpenses incurred on or
attributable to some specific thing or activity.
Elements of cost
Costing system
Total expenditure / income of this TPS are considered as per Revenue Accounts.
The classification of expenses are based on account head code developed by erstwhile
~ 10 ~
MSEB as per Commercial accounting system for State Electricity Boards under The
Electricity (Supply) (Annual Accounts) Rules, 1985.
ACCOUNT
ACCOUNT HEAD
CODE
10 TO 29 ASSET ACCOUNTS
30 TO 39 INTER-UNIT ACCOUNTS
40 TO 59 LIABILITY ACCOUNTS
60 TO 69 INCOME ACCOUNTS
90 TO 99 MEMORANDUM ACCOUNTS
In thermal generation with pulverized fuel boilers coal received from coal
handling plant is ground to a fine powder in coal mills & blown into.A furnace along
with a stream of primary air, in the furnace the fine coal particulars burn in suspension,
thus converting the chemical energy of coal into thermal energy. Dematerialized water
circulating through the water tubes [known as riser & down comer] surrounding the
furnace gates heated up by this thermal energy is converted by a rotating shaft to the
generator rotor which is rigidly coupled with turbine rotor & the electricity is generated
• In a power generation process there are following closed loop & independent
cycles;
~ 11 ~
a] Feed Water – Stream condensate cycle.
b] Raw coal Pulverized coal – Bottom ash & fly ash cycle.
c] Primary air secondary air – Bottom ash & fly ash cycle.
PROCESS OF GENERATION
The main Raw material in Generation of Electricity is COAL. The Raw coal is
received in generating station through Railway from different coal fields. The raw coal
gets crushed into small pieces & during this process stones are being separated in order to
get pure crushed coal .This coal is stored in stock yard if bunkers level are sufficient
~ 12 ~
&from where it is subsequently reclaimed whenever required by means of stacker
declaimer.
The raw water is pumped with the help of water pumps. Raw water is distributed to
various systems like Pretreatment plant, Ash Handling plant, etc. Raw water is very much
contaminated & is not suitable for any use as it is. Raw water pass through different
processes called Pretreatment plant, Softening water plant & Demineralization plant. Raw
water requires certain basic processing & this is being done in Pretreatment plant with the
help of materials & chemicals like Alum, Lime, Bleaching powder etc. to remove the
impurities & then gets filtered with the help of sand to make it more pure. The pretreated
water is input for Softening water plant & Demineralization plant. The inputs used for
softening process are Chlorine gas and common salt. Filtered water is converted into
Dematerialized water with the help of chemicals like HCL acid & caustic soda lye which
becomes suitable for use in Boiler.
Steam at a temperature of 510 Degree Centigrade & a pressure of about 87.9 kgs/cm2 is
let out from the Boiler & admitted into the turbine where its heat energy is converted into
mechanical energy. The turbine shaft drives the rotor of the Generator to produce
electricity. After carrying out the work in turbine, steam is passed through condenser
where it gets converted into water. Such hot water is again used in the system.
Coal after burning in the furnace is partly converted into clinker ash which is collected in
hoppers below the furnace where it is periodically removed. Rest of the ash is carried
~ 13 ~
with the flue gases to the Electrostatic Precipitators where it is separated out & collected
in the hoppers from where it is evacuated periodically. Finally only clear flue gases are
let out to the atmosphere through the chimney & rest of the ash is converted into slurry
with the help of water, which is carried to a distant open area
INFORMATION OF COAL:-
In the Generation of Electricity into the NTPS the major part of Raw Material is
consume by Coal which is approximately 80%. The coal requirement for such a big
thermal power station is enormous. For full rated generation, it requires 12 to 13 thousand
M.T. of coal a day. Nashik is linked for coal supplies with Western Coalfields and South
Eastern Coalfields.
For the Power generation process Nashik Thermal Power Station used the following
types of Raw Material.
Coal
o Raw / Local Coal
o Wash Coal
o Imported Coal
Raw Water
Furnace Oil
Light Diesel Oil
~ 14 ~
COAL
INDIGENOUS IMPORTED
COAL COAL
RAW / LOCAL
WASH COAL
COAL
Coal :-
The coal requirement for such a big thermal power station is enormous. For full
rated generation, it requires 12 to 13 thousand M.T. of coal a day. Nashik is linked for
coal supplies with Western Coalfields and South Eastern Coalfields. Nashik being located
far away from the collieries, the freight component is considerable and is normally 80 to
100% of the cost of coal. Thus, making a landed cost of Rs. 410.00 per ton (1986 prices).
Indigenous Coal :-
Raw / Local Coal :-
This coal is belong to the country it means it is Indian coal. This coal mainly
found in Vardha, Nagpur, Umred etc. This coal is found in various Grades and there are
seven types of grades such as A, B….G and these grades are decided by Chemist on the
basis of useful heat rate.
~ 15 ~
Wash Coal :-
This coal is also a local coal but as the name itself suggest in this coal the wastage
like
Soil, stones etc, are removed in washeries. These washeries are generally located near the
coal mines. The heat rate of this coal is high as compare to local coal and also the
purchase price as it includes beneficiation charges given to washery operator.
Imported Coal :-
This coal is purchase from outside India. The company is in contract with Bhatia
International company for purchase of imported coal which purchase coal from China,
Indonesia and South Africa. The rate of imported coal is fixed by publication like
RichardBay, Barlow Junkers, Energy Publishing etc.
1. TRANAIT LOSS
During the process of extraction from the mine up to loading to the boiler, the
and also adds to the weight of coal at the loading point. Thus, the coal when
weighted at the loading point contains water whereas when weighted at the
~ 16 ~
The key factors attributing to transit loss of coal are:
b) Error/Deviations in Weighbridges
Change in Weight
Change in Grade
2. UNDER LOADING
Under loading is loss due fillings less coal in railway wagons than its capacity.
Although company filled less coal than carrying capacity of railway wagons,
railway department charges fright for full capacity of railway wagons. (CC =
Carrying capacity)
~ 17 ~
3. OVER LOADING
Under loading is loss due filling less coal in railway wagons than its capacity.
railway wagons at normal rate and for overloaded coal at higher rate. Hence,
4. DEMURRAGE
scheduled time.
unload the coal from railways wagons and for this delay time Railway
Department charge some penalty to NTPS at per hour per box called
Demurrage.
~ 18 ~
5. SIDING CHARGES:-
The Siding Charges for the coal which is taken outside the security wall for
the purpose of the warehouse belonging to the respective TPS shall be levied
at the rate applicable to private operation, if the cargo is moved by rail at later
date. The weight for this purpose will be the weight on which freight is
Industrial Sector
• Agriculture Sector
• Street Light
• Domestic Sector
• Commercial Sector
• Railways Area
~ 19 ~
COST CENTRES:
The following cost centers have been introduced for purposes of cost records
compilation by Thermal Power Station.
~ 20 ~
OBJECTIVES OF STUDY:-
1. To have comprehensive knowledge of the Nasik Thermal Power Station profile and
structure.
2. To study and understand the various cost associated and ascertainment of cost
whichinvolves collection and classification of expenses at first instance.
3. To study the costing systems that is designed specifically to provide information
concerning costs and efficiency.
4. To study extensively and to elaborate purchase procedure, as purchasing provide right
quality of material, at right place, at right quantity, on right time and at right cost.
5. To evaluate storekeeping objectives like, easy identification of materials, to prepare
purchase requisitions, ensuring the safety of all types of materials to facilitate quick
issue control over materials.
6. To asses issue methods, as pricing of material issues to a large extent influences the
cost of product and the value of closing stock. The issue price must cover the cost of
purchase of materials and it must reflect current market price.
7. To study the costing method that help organization in finding out cost per unit of a
product or service.
8. To have exhaustive view of cost, so that decision making is easier for management
and various decisions for cost control is taken that further reduces the cost of
material.
~ 21 ~
1.5 SCOPE OF THE STUDY
The scope of any subject refers to the various areas of study included in that subject.
Material costing refers to various areas for study like :
2. Receiving of material is the next step after purchase order. Receiver has to
receive material and also make inspection department to know about material
received.
~ 22 ~
Chapter: II
~ 23 ~
INDUSTRY PROFILE
We are at the doorstep of 21st century. We are witnessing four distinct phases
since our entry in organization as under.
Liberalization, Globalization and Privatization have become need of the hour and
to stand on firm footing for the challenges before us, we have to restructure the system
for effective functioning. To keep pace with the cut-throat competition as private sector is
entering in power generation network 740 MW Dabhol power stations dedicated to nation
recently and still to come more! We cannot remain embraced with our hands folded and
just watch helplessly what is going on around us.
Let us hope the competition race in power sector will be an eye opener for our
lethargic and complacent attitude. There can be number of excuses. If the sincere desire
to set the new trend is absent in our mind. We spend much of our energy time and talent
in finding others mistakes and conveniently stay away form applying our ability,
authority and responsibility for the purpose.
~ 24 ~
Net work of power station O&M is basically structured equipment oriented like
Boiler, Turbine and Generator supported with common utilities like WT Plant, AHP,
CHP etc. Among the stars twinkle in the sky the distant tiny CIRCUS like efficiency so
far remained neglected having a cartoon like entity just recording the parameters
somehow sending the information in different formats.
With the advent of energy audit & efficiency management concepts the efficiency
has come in light with new avenues to deal with. It has become imperative to closely
record, analyze, identify and draw action plans to economise the resources and also to
maintain quality of operational parameters as well as efficient operation of equipments.
Initially with background as above the established O&M were rigid with
reservations of the old type outlook towards efficiency but everything here on earth
undergoes a change.
It is not difficult to transform the impression that CIRUS is not tiny dot but a star
bigger than sun what we normally see. (27 times brighter than the Sun.)
At NTPS from 2003 onwards the systematic efforts could bring efficiency dept in
commanding stage influencing day to day generation activities confined to quality of
operational parameters and equipment outputs as well.
It was coincidence that stringent modalities were enforced even form H.Q. to
streamline functioning of efficiency dept. it was pertinent to concentrate on efficiency
activities to the extent of day to day monitoring of inputs losses and quality of equipment
and operational parameters.
~ 25 ~
We must salute to the exhaustive efforts taken by C.E.(TIC) office in formulating
the various parameters for evaluation of efficiency test results. Manual so brought out by
C.E.(TIC) office is more than enough to make a good start. Systematic study of the
manual as above which is available at all MAHAGENCO Power Stations is ready tool to
transform the cartoon entity of efficiency in to tycoon.
The electricity generated in generating station & utilize by consumers the whole
system is known as power system. A power system consists of generators to produce
electricity, & transformers, switchgear and other Components which are interconnected
by underground lines to supply it to consumers. The power system is consisting of four
parts:
1. Generation
2. Transmission
3. Distribution
4. Utilization
~ 26 ~
COMPANY PROFILE
MSEB
MAHAGENCO
Maharashtra State Power Generation Co Ltd. (MSPGCL) or Mahanirmiti or
Mahagenco has been incorporated on 31.5.2005 with The Registrar of Companies,
Maharashtra, and Mumbai and has obtained Certificate of Commencement of Business
on 15.09.2005. Mahagenco is engaged in the business of generation and supply of
Electricity.
~ 27 ~
MAHATRANSCO
Transmission Utility if notified by the State Government under the provisions of Section
39 of Electricity Act, 2003.
MAHADISCOM
2.2 ORGANIZATION
~ 28 ~
[M.S.P.G.C.L.], power is generated with the help of coal; hence it is called as the Nashik
Thermal Power Station [N.T.P.S.]. It has lot of branches in all over Maharashtra like
Koradi, Khaperkheda, Bhusawal, Parali, and Chandrapur.
The N.T.P.S. is the second big power generation plant in Maharashtra belonging to
the Maharashtra State Power Generation Company Limited & also achieved ISO-9001.
There are two stages of Power Generation at N.T.P.S. Stage-I & Stage-II
Stage-I contains 2 units of total capacity of 280 MW while Stage-II contains 3 units of
630 MW
Details of Stage-I
Details of Stage - II
The stage I comprises of 2 x 140 MW units. The first unit was synchronized
on 16th August 1970 followed by the second Unit on 21st March 1971. The cost of the
unit including civil work was Rs 56.5 crores each thus making the cost per installed KW
Rs. 1750. The pulverized fuel boilers of the unit are front fired type from Babcock and
Wilcock of France and the turbines also are from France.
~ 29 ~
The Stage II comprises of three units of 210 MS each of BHEL makes. The first
of the 210 MW units was synchronized on 26th April 1979 at a total project cost of Rs.
94.73 crores. The next two units i.e. Unit No 4 and 5 of 210 MW were constructed at the
cost of Rs 143.95 crores and were commissioned on 10th July 1980 and 30th January
1981 respectively. Thus total cost of stage II is Rs 238.68 crores, making thecost of per
installed KW Rs. 4075. The equipment for Station "B" i.e. 3 x 210 MW was supplied by
BHEL. Boilers are corner fired using pulverised fuel and incorporate American design
made by Combustion Engineering. The Turbines are of Russian design. Each unit has an
independent control room, housing all sophisticated equipment.
After the commissioning of all the five units the total installed capacity is 910 MW.
The Power Station boasts a spacious self contained township with all amenities. The
entire complex including the Power Station Colony and Railway siding covers 472
hectares of land on the bank of river Godavari.
SHAKTIMAN
A SYMBOL OF VISIONARY RESOURCEFULNES S
ISO scale outs to be measure for efficiency of personnel, material & machinery
in the industry being a buzz word in today’s corporate competitive environment. NTPS
was therefore ahead to imbibe merits of ISO Certification on 12th April 2002.
~ 30 ~
COAL HANDLING PLANT
The coal requirement for such a big thermal power station is enormous. For full
rated generation, it requires 12 to 13 thousand M.T. of coal a day. Nashik is linked for
coal supplies with Western Coalfields and South Eastern Coalfields. Nashik being located
far away from the collieries, the freight component is considerable and is normally 80 to
100% of the cost of coal. Thus, making a landed cost of Rs. 410.00 per ton (1986 prices).
OIL HANDLING PLANT
Oil is used as a secondary fuel for the boilers and is required for initial start up
and during low load operation. Fuel oil is received in rail tankers (HSD by road tankers).
The power plant has an unloading capacity of 64 rail tankers at a time. NTPS was the first
power station in Maharashtra State Electricity Board (MSEB) to successfully switch over
from imported F.O. to LSHS ( which is an indigenous product of Bombay High) thus
achieving savings in foreign exchange.
POWER STATIONS
Energy is one of the most important factors of our day-to-day life. Energy is the
most valuable asset of any organization. Energy is an important factor for the functioning
of most of the industrialized world as well as developing & under developed nations.
Many functions necessary for the day-to-day living grind to be halt when the supply of
energy stops. As a matter of fact, there is a close relationship between the energy used per
person & his standard of living. Greater the per capital consumption of energy in a
country, higher the standard of living of its people.
POWER DISTRIBUTION
Electricity produced by the generators at 15.75
KV is boosted up to200 KV by means ofstep-up
transformers. The power so boosted up to 200
KV is fed to the Maharashtra Grid through six
nos of 220 KV and two nos of 132 KV
transmission lines. Surplus power is also fed to
~ 31 ~
the neighboring Gujarat Grid via the 220 KVNavsari line.
The sub-station and transmission lines being the vital links between the consumer and
the power station, they are given top most priority in terms of maintenance. The lines
pass through high hills, forest and along sea shore etc. and are subjected to vagaries of
nature, causing stresses and making them prone to failure. The maintenance of such high
voltage lines in the difficult terrain offers a really challenging job. MSEB has
successfully accomplished this task through its determined staff and special T&P.
RIVER BARRAGE
The water requirement of the power station is met by pumping water from the
river Godavari by means of four river water pumps of capacity 3050 m3 per hour, out of
which normally two pumps are running, the other two being standby. For sufficient
storage of water, a barrage has been constructed downstream of pump house. The barrage
has rotary-type gates which operate on the principle of buoyancy. These gates are
lowered during the monsoon to let out the flood water.
Electricity itself is not a source of primary energy, but it is by far the most
versatile & convenient form into which the primary energy of coal & oil, nuclear energy
& the potential energy of stored water can be transformed. Electricity can be converted
into heat with 100% efficiency & into mechanical motion with very high efficiency. This
is done without producing any pollution or waste product of any kind. For any
equipment, electricity generated in power stations is much cheaper source of energy than
primary batteries i.e. dry cells. Secondary storage batteries offer a convenient way of
making this energy available to portable equipment.
Transmission is the bulk movement of energy from power stations to load centers,
& from one load center to another. Distribution is the movement of electrical energy from
substations to consumers.
~ 32 ~
industry faltered, mainly because of large increase in the price of oil especially, & coal to
a lesser extent.
We can now look at the various sources of energy which can be used to generate
electricity in a power system, & how the source of energy influences the design &
location of each power station.
ACHIEVEMENTS:
NTPS is the first power station to adopt ISO 9001:2000 'Quality Management
System' in MSPGCL
NTPS is the first power station to install highest capacity unit in 1970.
NTPS is the first high capacity unit completing 37 year and sharing full load.
Tation set all time maximum Generation record of 6523.029 MU one month
ahead of financial year 2006-2007 in NTPS history.
Proper & effective management of imported coal was a major asset in
Performance Improvement i.e. PLF improved from 72.17% [2005-06], 81.83%
[2006-07] to 81.28% [2007-08]
Lease line up graded to 64 kbps to 512 kbps.
~ 33 ~
CHAPTER III
RESEARCH METHODOLOGY
~ 34 ~
STUDY OF RESEARCH METHODOLOGY
Methodology is theimportant part of research study, which enables the researcher
to form blue print of the research undertake. Research methodology involves the
systematic procedure by which the research starts from the time of initial
identification of the final conclusion.
RESEARCH DESIGN
All the documents like Bin Card, inspection report, purchase requisition note
etc. need to be collected for proper presentation of report.
After collection of all the data analysis and interpretation of that data is done.
Presentation of collected data for drawing conclusion and identify the loop
holes.
~ 35 ~
PRIMARY AND SECONDARY DATA
Primary Data:
Primary data is collected by having informal conversion with the managers and the other
persons/workers.
They have given the purchase procedure for purchasing coal and other materials. For
power generation purpose coal is centralized purchased.
They have also explained the Division of cost of material coal and costing system
used in NTPS.
They have helped to understand coal purchase related expenditures and technique
used for issue.
Secondary Data:
Cost Sheet
Internet.
~ 36 ~
Chapter-IV
~ 37 ~
STATEMENT SHOWING THE DETAILS OF COAL
CONSUMPTION FOR THE YEAR 2011-2012
MONTH OPENING BAL. PURCHASE CONSUMPTION CLOSING BAL
QTY AMT QTY AMT QTY AMT QTY AMT
Apr-11
Local coal 150460 400839972 211614 699867101 190479 576969718 164450 498125912
Imp coal 29241 131075564 67203 301247529 79787 357655497 16657 74667596
wash 43220 105844330 80289 202171750 101681 253580071 21828 54436009
May-11
Local coal 164450 498125912 197229 675082407 226936 734619343 132074 427539550
Imp coal 16657 74667596 71160 318985522 85098 381462830 2719 12190288
wash 21828 54436009 73154 182647311 91793 229123178 3189 7960142
Jun-11
Local coal 132074 427539550 176601 635439751 240255 826226920 65304 224577105
Imp coal 2719 12190288 42254 191523561 44974 203713849 0 0
wash 3189 7960142 71095 183843567 74284 191803709 0 0
Jul-11
Local coal 65304 224577105 217581 714121165 148197 491393190 132594 439657260
Imp coal 0 0 0 0 0 0 0 0
wash 0 0 105875 273103096 100773 259942803 5102 13160293
Aug-11
Local coal 132594 439657260 149277 490654104 106916 352333657 172959 569973508
Imp coal 0 0 0 0 0 0 0 0
wash 5102 13160293 58078 151470995 61879 161242739 1300 3388549
Sep-11
Local coal 172959 569973508 173477 519672357 131110 412362092 213539 671614211
Imp coal 0 0 0 0
wash 1300 3388549 29961 77344833 27279 70448685 3982 10284697
Oct-11
Local coal 213539 671614211 203491 707384122 267281 882673522 146643 484276383
Imp coal 0 0 3799 27821777 130 952173 3669 26869604
wash 3982 10284697 0 0 3982 10284697 0 0
Nov-11
Local coal 146643 484276383 155909 536943591 189371 639466974 112802 380908680
Imp coal 3669 26869604 133168 975376855 93501 684839794 43335 317406665
wash 0 0 0 0
Dec-11
Local coal 112802 380908680 196301 766253068 200062 741881874 108294 401583401
Imp coal 43335 317406665 96398 705905178 98941 724577089 40792 298734754
wash 0 0 0 0
Jan-12
Local coal 108294 401583401 225949 778933657 187884 663351816 145127 512391474
Imp coal 40792 298734754 104732 752018415 78056 563601265 67468 487151904
wash 0 0 0 0
Feb-12
Local coal 145127 512391474 203003 803306614 193628 731268023 152932 577571934
Imp coal 67468 487151904 78221 569122316 44718 324213724 100971 732060496
~ 38 ~
Wash 0 0 0 0
Mar-12
Local coal 152932 577571934 203764 879562770 270102 1103011534 85681 349893860
Imp coal 100971 732060496 131465 950839975 84065 608654085 148371 1074246386
Wash 0 0 0 0
Mar-12
Local coal 85681 349893860 85681 349893860
Imp coal 148371 1074246386 148371 1074246386
wash 0 0 0 0
TOTAL
~ 39 ~
Material Coal Analysis:
Month wise Amount Spend on Material and Consumption For the Period
2011-2012 :
For April - 2012
100
90
80
70
Amt in Crores
60
MATERIAL AVAILABLE
50
CONSUMPTION
40
30
20
10
0
Local Coal Imported Coal Wash Coal
Types of Coal
From the above graph, for the month April company had the local coal of Rs.
95.93 Crores, imported coal of Rs. 13.99 crores, wash coal of Rs. 15.06 crores and
consumption was local coal of Rs. 76.30 crores, imported coal of Rs. 9.58 crores and
wash coal of Rs. 15.05 crores. It means availability and consumption of local coal is high.
~ 40 ~
INTERPRETATION
The heating continues for such time as is required for the flame of the burning
volatile matter to die out. Turn off the heat and allow the crucible to cool. The
test can be carried out in a furnace (D720), or using either electric or gas
heating (D720 and ISO 501). The shape of the coke button formed in the crucible
is classified by comparison with a chart of standard profiles and corresponding
swelling index numbers. At least three buttons are made for each sample, and
the average of the profile numbers is taken as the free-‐swelling index. The
standard profiles and corresponding swelling number are shown in Figure 15.
~ 41 ~
For May – 2011
80
70
60
50
Amt in Crores
40 MATERIAL AVAILABLE
30 CONSUMPTION
20
10
0
Local Coal Imported Coal Wash Coal
Types of Coal
From the above graph, for the month May company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 42 ~
For June – 2011
70
60
50
Amt in Crores
40
MATERIAL AVAILABLE
30
CONSUMPTION
20
10
0
Local Coal Imported Coal Wash Coal
Types of Coal
From the above graph, for the month June company had the local coal of Rs.
64.07 Crores, imported coal of Rs. 33.97 crores, wash coal of Rs. 25.63 crores and
consumption was local coal of Rs. 50.71 crores, imported coal of Rs. 23.45 crores and
wash coal of Rs. 23.37 crores. It means availability and consumption of local coal is high.
~ 43 ~
For July – 2011
80
70
60
50
MATERIAL AVAILABLE
40
CONSUMPTION
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month July company had the local coal of Rs. 64.07
Crores, imported coal of Rs. 33.97 crores, wash coal of Rs. 25.63 crores and consumption
was local coal of Rs. 50.71 crores, imported coal of Rs. 23.45 crores and wash coal of Rs.
23.37 crores. It means availability and consumption of local coal is high.
~ 44 ~
For August – 2011
80
70
60
50
MATERIAL AVAILABLE
40
CONSUMPTION
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month August company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 45 ~
For September – 2011
80
70
60
50
MATERIAL AVAILABLE
40
CONSUMPTION
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month September company had the local coal of
Rs. 77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 46 ~
For October – 2011
90
80
70
60
50 MATERIAL AVAILABLE
40 CONSUMPTION
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month October company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 47 ~
For November – 2011
80
70
60
50
MATERIAL AVAILABLE
40
CONSUMPTION
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month November company had the local coal of
Rs. 77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 48 ~
For December – 2011
100
90
80
70
60
MATERIAL AVAILABLE
50
CONSUMPTION
40
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month December company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 49 ~
For January – 2012
120
100
80
MATERIAL AVAILABLE
60
CONSUMPTION
40
20
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month January company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 50 ~
For February – 2012
120
100
80
MATERIAL AVAILABLE
60
CONSUMPTION
40
20
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month February company had the local coal of Rs.
77.89 Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and
consumption was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and
wash coal of Rs. 17.90 crores. It means availability and consumption of local coal is high.
~ 51 ~
For March – 2012
100
90
80
70
60
MATERIAL AVAILABLE
50
CONSUMPTION
40
30
20
10
0
Local Coal Imported Coal Wash Coal
From the above graph, for the month March company had the local coal of Rs. 77.89
Crores, imported coal of Rs. 58.33 crores, wash coal of Rs. 20.47 crores and consumption
was local coal of Rs. 68.18 crores, imported coal of Rs. 40.82 crores and wash coal of Rs.
17.90 crores. It means availability and consumption of local coal is high.
~ 52 ~
STATEMENT SHOWING THE EXPENDITURE INCURED ON PURCHASE OF
COAL FOR THE PERIOD 2011-12
EXPENDITURE AMOUNT
APR 0.64
MAY 0.74
JUN 1.43
JUL 1.23
AUG 0.54
SEPT 0.62
OCT 0.57
NOV 0.44
DEC 1.06
JAN 1.21
FEB 0.42
MAR 1.10
AMOUNT
1.6
1.4
1.2
0.8 AMOUNT
0.6
0.4
0.2
0
APR MAY JUN JUL AUG SEPT OCT NOV DEC JAN FEB MAR
~ 53 ~
STATEMENT SHOWING THE COST OF PROCUREMENT OF COAL FOR
THE PERIOD 2011-12
Cost per MT
No. Particulars Quantity Rate Amount
2011-2012
A Purchase:
Local purchases incl. Freight (Indigenous coal) 3565402.11 1954.811482 6969688982 1954.811482
Imported purchases incl. Freight 608268.85 7477.348469 4548238154 7477.348469
Wash Coal
Freight 0
Transit Loss 37498.7 2736.655104 102621008.8 28.78245022
Less: Inter unit transfer
Less: Value Adj.
Total Purchases 4136172.26 2809.493274 11620548145 2809.493274
Coal Cost Variance
Net Value 4136172.26 2809.493274 11620548145
B Other incidental Charges:
- demurrage on coal wagons 105853791 25.59221047
- siding charges 4084220 1.145514552
- commission to agents 0
- payments to Railway staff posted at TPS 1935211 0.467874856
- stock shortage on physical verification 0 0
- other related expenses 27570234.74 6.665639874
- coal stock maintenance
-Recovery from coal
-Others, if any (specify)
Sub total Incidental charges 139443456.7 33.87123975
C Opening Balance-Local 197614.04 2314.914851 457459676 2314.914851
Opening Balance-Imported 3651.84 6409.653764 23407030 6409.653764
D Closing Balance-Local 193680.4 2616.08455 506684302 2616.08455
Closing Balance-Imported 29240.8 4482.625783 131075564 4482.625783
E Coal consumption 4114516.94 2820.03905 11603098441 2820.03905
Less: Sale of Rejected coal 95088975
Less: VAT set off
Coal consumption transfer to Prof 'C' 4114516.94 2796.928445 11508009466 2796.928445
~ 54 ~
Chapter-V
FINDINGS
~ 55 ~
The financial condition of NTPS is weak because the company is incurring
losses.The loss has been decreasing which is a positive sign for the management.
The organization has achieved cost reduction in the areas like maintenance, water
charges.
GCL submits that pilferage during transit continues to be the single biggest
menace to the improvement of transit losses and accounts for a lion's share of the
transit losses.
MSPGCL submits that pilferage during transit continues to be the single biggest
menace to the improvement of transit losses and accounts for a lion's share of the
transit losses.
~ 56 ~
Chapter-VI
CONCLUSION AND SUGGESTIONS
~ 57 ~
CONCLUSION
After a careful observation, discussions and interview with the project guide, &
concerned persons, and study of the practical implications of fee based income, the
process and departments. Material cost is the most important elements of costing and it is
as much as important to control and manage the two elements in an organization. After
the study of material costing we have clearly shown the method that is used today in
controlling and effective management of material in the Nashik Thermal Power Station
(NTPS).
For the power generation purpose NTPS used the various types of material but
company still paid a high consumption cost (80% approx.) on Coal. Which available in
three types Local Coal, Imported Coal and Wash Coal but company mostly preferred the
imported coal and local coal because of imported coal is reduced the ash contents
(Industrial Waste) but imported coal is very costlier as compare to the other two coals.
For the cost benefit Purpose Company used a local coal and imported coal instead of
wash coal.
The firm has successfully managed to increase its production; hence utilizing its
installed capacity in a good manner. Due to low quality of raw material, mainly coal, the
~ 58 ~
SUGGESTIONS
Cost of coal has maximum effect on the profitability of the firm as it contributes
nearly 80% to the cost of production. But the company faced some problems
related to the quality of coal, transit loss. Company always compromise with
quality and transit loss for the cost benefit.
Company try to purchase imported coal because it gives better performance for
production and reduces the ash contents means industrial waste.
The price of coal is going to increase in the coming years which unavoidable. So
expenses under other heads should be reduced to their minimum level.
In the NTPS for the material issue purpose company used a periodical Weighted
Average method but this method is having some disadvantage which is as follows
:
The value of closing stock nighters reflects current market price nor
actual cost. Firm has achieved cost reduction in areas like water charges,
depreciation and maintenance. It should maintain such techniques which
will result in reduced cost.
Contact Railway Protection Force in respective area for eliminating coal theft
from loaded rakes.
Periodically calibrate and maintain the Power Station weigh bridges. A team has
been formed for checking weigh bridges at colliery end on periodical basis for
WCL, SECL & MCL collieries. Claims for transit losses are being lodged with
the railways
~ 59 ~
Chapter-VII
BIBLIOGRAPHY
~ 60 ~
Referencing Scheme:
• Books:
• Cost Audit Report for the year 2008-09 published by Head Office, Bandra,
and Mumbai.
• Websites:
• www.mahagenco.com
• www.google.com
• www.wikipedia.com
~ 61 ~