0601063 study on finanance department

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A

PROJECT REPORT

ON

“STUDY ON FINANANCE DEPARTMENT”

ON HCL/MCP

SUBMITTED BY

SOURAV VIJAY PRUSTY

MBA-II

2006-08

UNDER GUIDANCE OF

MR MAHESH HALALE

SUBMITTED TO

“UNIVERSITY OF PUNE”

IN PARTIAL FULLFILLMENT OF THE REQUIRMENT FOR THE

AWARD OF THE DEGREE OF

MASTERS OF BUSINESS ADMINISTRATION (MBA)

THROUGH

VISHWAKARMA INSTITUTE OF MANAGEMENT

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ACKNOWLEDGMENT

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ACKNOWLDGEMENT

We are very much thankful to Mr. Bhatacharya(head of the

department, finance,(M.C.P) for providing us a golden opportunity for doing summer

training in finance department..

I express our heartily gratitude to all the officers of finance department. Who

support us and motivate us and giving us their valuable time in completing the project

with in the scheduled period

We are thankful for kind cooperation and guidance of :Shri Debasis De, Shri N.K.Singh,

Shri D.R.Chauhan, P.V.N.Rao, Shri S.D.Pashine, and P.N.Gokhale

. We shall be failing in our duty if we don’t acknowledge

Mr.Bhatacharya (Asst.G.M admn. of M.C.P) for giving this opportunity for training in

completing the project.

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TO WHOM SO EVER IT MAY CONCERN

This is to certify that Mr. Sourav Vijay Prusty is a bonafide student of our institute. He

has successfully carried out his summer project “study of finance departments on

MCP/HCL . This is the original study of Mr. Sourav Vijay Prusty and important sources

of data used by him have been acknowledged in his report.

The report is submitted in partial fulfillment of two years full time course of Masters in

Business Administration 2006-2008 as per rules.

___________________ ________________________

Prof.Mr Mahesh Halale Dr. Sharad L. Joshi

(Project Guide) (Director)

Vishwakarma Institute of Management

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INDEX

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Chapter Description Page no

1 Executive Summary 6 2 Introduction 12 3 Company Profile 16 4 Objectives 38 5 Research Methodology 40 6 Activities 43 7 Analyzing 52 8 Status of Share 75 9 Conclusion 80 10 Suggestion 83 11 Advantages & Limitation 86 12 Bibliography 89

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EXECUTIVE SUMMERY

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EXECUTIVE SUMMARY (1) Copper has been known to man since 4000 BC and its popular alloys i.e.Bronze and

Brass have been known since 3000 BC and 1000 BC respectively. The usage of

copper increased substantially with the industrial revolution in 18th century. Copper

and its alloys are widely being used today in electrical & electronics industry,

construction, transportation etc. Its properties of high electrical and thermal

conductivity, resistance to corrosion, ductility and malleability, lack of

magnetism makes it a versatile metal.

(2) Copper deposit exists as sulphide, carbonates or silicates and sulphide ores account

for approx. 40-50% of the world copper reserves. Peru, Chile, Papua New Guinea,

Indonesia, Philippines have large quantities of sulphide ores which have small copper

content (0.3-2% range),Zambia and Zaire have copper deposits with higher copper

content (2- 6% range). The reserves of copper in the world are estimated at 525

million tonne in terms of metal content.

(3) The first copper smelter was set up at Ghatsila (Bihar) in 1928. An electrolytic

refinery for cathodes and wire bar plant was commissione at Ghatsila in 1965. Flash

smelter based on Outokumpu Flash smelting technology was set up in 1971. The first

continuous cast rod unit was established in the country during 1984.

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(4) Hindustan Copper Ltd (HCL) was set up in 1967 for production of primary

copper in the public sector. Presently HCL is the sole producer of copper in India and

has following four units : Khetri Copper Complex, Rajasthan (31,000 TPA of Blister

Copper, has the following operations such as Ore mining, Beneficiation, Smelting,

Electrolytic refining etc; Indian Copper Complex, Ghatsila, Bihar (16,500 TPA of Blister

Copper) has same operations as in Khetri and has a precious metal recovery plant

(Gold, Silver, Selenium etc); Malanjkhand Copper Project, M.P. (2 million TPA mining

and beneficiation) has operations of ore mining and beneficiation. The concentrate is

sent for further processing to KCC and ICC and excess quantity is sent abroad for

toll smelting; Taloja Copper Project, Maharastra (60,000 TPA) has C.C. rod facility.

(5) The production of copper ore in India has remained stagnant over the years i.e. 51.36

lakh tonne in 1987-88 and 51.13 lakh tonne during 1992-93. This is because of low level

of ore deposit establishment. The present ore deposits are estimated at 734 million tonne

(with 9.4 million tonne of copper metal). Nearly 90% of the copper reserves are

concentrated in the states of Bihar, Madhya Pradesh and Rajasthan.

(6) During the year 1992-93 production of copper concentrates, blister copper and refined

copper by HCL was as follow :-

Concentrate : 52.53 lakh tonne

Blister Copper : 48006 tonne

Refined Copper : 45275 tonne

The capacity utilization at HCL plants was high about 98% in mining sector and 100%

in metallurgical sector during 1992-93.

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(7) The demand of copper in India during 1992-93 was of the order of 1.8 lakh TPA

which is expected to increase at a rate of 5-6% per annum. In order to meet the

requirement, copper was imported to the tune of 70% of the requirement. With a number

of smelters being planned & executed in the private sector as well at Malanjkhand by

HCL, it isestimated that the imports could be reduced to a level of 35-40% by the year

1999-2000.

(8) The dereservation of non-ferrous industry by the Government of India has opened

doors to the private sector. Sterlite Industries (India) Ltd is implementing a 60,000 TPA

Capacity (Cu Cathode) project with an estimated cost of Rs 700 crore. The

technology has been provided by MIM Holdings, Australia and the input material

would be copper concentrates which would be imported.

(9) The plants of HCL to produce primary copper are based on technology of

Outokumpu, Finland who are known world wide and have installed about 30 plants

world over. The process is based on semi-autogenous smelting of copper concentrates

in flash smelter followed by conversion in PS converter, Fire refining, electrorefining etc.

The initial agreement (xviii) period is over and a new agreement has been executed

effective from April, 1992 towards modernisation & expansion of KCC plant.

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(10)The process of manufacture of primary copper at HCL's plants is summarized

below:-

Copper ore containing about 1% copper are reduced from 150 mm size to 25 mm size in

cone crushers. The crushed ore is grinded in rod & ball mills to 74 micron size. The ore is

further refined through Froth Flotation process comprising of rougher cells and second

stage cell where xanthates and pine oil are used as reagents. Copper comes in the froth

and slurry containing about 15% copper, is thickened in rake type thickner from a level

of 30% solid content to 60% solid content. The thickened slurry is treated in vacuum disc

filters to remove water and powder concentrate so obtained has 12% moisture. The

moisture content in the concentrate is further reduced to a level of 0.2% in rotary air

dryer. Concentrate along with preheated air enriched in oxygen is fed to the Flash

Smelter where separate layers of molten material are formed i.e. Matte (rich in copper

contains 43-50% Cu) and slag (4-5% copper). Gases rich in sulphur dioxide are formed in

the smelter which are utilised to produce sulphuric acid. Matte is further refined in PS

converter to obtain blister copper (99% purity) and fire refined in Anode furnace and

casted in Anode Casting wheel to obtain 99.4% pure copper anodes. The Anodes are

electro-chemically refined to obtain copper cathodes of 99.99% purity. Precious metals

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i.e. Gold, Silver, Tellurium, Selenium etc. are recovered by refining of Anode slime

obtained from electrolytic refinery.

(11) Malanjkhand Copper project of HCL, Madhya Pradesh has the largest open cast

mine of capacity 2 million TPA with a matching concentrator capacity. The plant

incorporates State-of-the-art equipments & techniques i.e. hydraulic excavators of large

bucket capacities (10-12 cu.m) drill masters capable of larger diameter hole drilling (200

mm), computerized instream analysers and large capacity & energy efficient

rougher floatation cells (120 cu.ft) etc.

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INTRODUCTION

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INTRODUCTION Hindustan copper ltd was incorporated on 9-Nov-1967. It was the only vertically

Integrated multi-unit copper producer in India , engaged in a wide spectrum Of activities

Hindustan Copper Limited the premier copper producer for he last 37 years, Has

made its landmark in the history of copper mining ,smelting and refining

In India . H.C.L operation in short include mining, crushing and grinding of Ore to

produce concentrate, which is then smelted and electro refined to Produce copper

cathodes ,wire bars and continous cast copper wire rods.

These operation involve highly Mechanized Mining Technology. In 1967 H.C.L

established itself as an “A” grade company with four producing unit ,one each in

Rajasthan, Jharkhand, Madhaya Pradesh, Maharastra and a series of commercial office

all over India .

These units are:- Khetri copper complex [Rajasthan] Indian copper complex [Jharkhand] Malanjkhand Copper Project [Madhya Pradesh] Taloja Copper Project [Maharastra]

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Opportunities and Threats In India, there is under-capacity at the mining stage as compared to domestic copper

demand. HCL is the only fully integrated copper producing company in the country

having its own copper mines. Therefore, the Company has ample opportunity to augment

its mining capacity by inceasing production from the existing mines and by developing

new mines and thereby improving the bottomline. The present market scenario offers

ample opportunity to being in value added niche products into HCL’s portfolio, such as

‘oxygen free copper’, besides developing niche markets for existing products.The export

market in Asian region presents a strong opportunity for refined copper producer like

HCL.The threat perception for the company includes great volatility of world copper

prices and increasing cost of inputs, particularly power and fuel due to global

inflationary trends. Further, HCL may also witness threat to its existing market share on

account of intense competition from imports and domestic manufacturers of refined

copper. The gradual but inevitable lowering of import duty on cathode / wire rod will

impact sales realization.

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Business Scenario During the year, the demand for copper in the global market has been growing steadily.

Demand growth in Asian countries, particularly China & India is driving the LME copper

prices in the global market and the trend is expected to continue in the near future.

Growth of copper usage in the country is projected to be about 6% this year, exceeding

the world average of about 3-4%. In 2005-06, the total refined copper usage in the

country was around 420,000 MT; in the coming years, this is expected to rise to about

600,000 MT which argues well for the Company.

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COMPANY PROFILE

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ABOUT MALANJKHAND COPPER PROJECT,(H.C.L) INTRODUCTION Malanjkhand Copper Project (MCP) is the single largest Copper deposit of India with

nearly 50% of Country’s Copper reserves and contributes to around 70% of HCL’s total

Copper production. It is located in Central India at an altitude of 575 MRL and is

connected by roads to the nearest broad gauge Railway station at Gondia and Durg which

are located at 130 and 150 Kms away from MCP respectively. Airports located nearby

are at Jabalpur (M.P), Raipur (Chhattisgarh) and Nagpur (Maharashtra).

The Project consists of an open pit mine having initial rated production capacity of 2.0

million Tonnes copper ore per annum with matching Concentrator plant, Tailing disposal

system and other auxiliary facilities.

The minerable ore reserves with the Open Pit Mine have been estimated at 60 million

tonnes, averaging a grade of 1.2% Cu. at 0.45% cut-off.Malanjkhand copper project

which is under (H.C.L), i.e Hindustan copper limited. Malanjkhand copper project is

fall in the tahsil of Baihar ,which is 22 k.m away from the project. Government sanction

for the Project was obtained in June 1977 and stripping operation started in August

1979, after the first shovel was commissioned and haul roads and shovel faces

constructed. The mine at full production capacity will remove 11.5 million tones of

overburden and waste rock, to recover 2 million tones of chalcopyrite ore of average

grade 1.2 cu per annum. A total of 22.6 Km of diamond drilling in 91 bore holes has been

carried out till September 1978 to explore ore reserves upto a depth 376 MRL

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The detailed project report was prepared by Russian Consultants in 1976, and the

mine design work was done by M/S RTZC In 1978.

Construction of mine concentration plant and other facilities started in 1978 and

regular production started in 1982, as per schedule.

With the liberalization of Indian economy, the supportive measures like canalization of

copper import, administrative pricing policy restricting the investment in copper Mining

to public sector were disponeed with along this , the import duty was progressively

and drastically reduced and copper was placed under general license.

Copper prices in India linked with the prices of London Metal Exchange (L.M.E)

Were bulk of non furious metal is traded could not sustain the fluctions of L.M.E

Prices which in turn depend several factor like its world wide production, consumption,

its inventory and were houses.

H.C.L was making profit till 1996 even after the arrival of

economic liberalization but it could not survive the sudden, crashing Of international

prices in spite of its best physical performance or the last five years a drastic drop in

the L.M.E prices of copper and custom duty had presented a firm.

In the past liberalisation era, H.C.L came free to face with some of the unforeseen

challenges which forced H.C.L to evolve a turn around strategy for surviving the

shift competition in the International market.

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[Malanjkhand Copper Project] Present Operation Open Pit Mines Concentrator Infrastructure Facility

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PRESENT OPERATION Hindustan Copper Limited have constructed an Open pit mine to produce 2.0 million

tones of copper ore annually.

A concentrator Plant of manufacturing capacity and other infrastructure facilities such as

power and Water supply, rearing facility, tailing disposal etc.

Open Pit Mine Open pit mines is designed to produce 64 million tones of ores 1.2% at an

overall strip ratio of 1:4. The ultimate pit design to provide for Deepings the pit up to

376 MRL i.e around 200m from surface.

Total length of the pit – 2200m

Total width of the pit – 600 meter

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THE CONCENTRATOR The concentrator plant has been designed to treat 2 millions tones of

copper ore annually. The plant consists of the following section.

Crushing section Grinding section Flotation Thickeing & filtration Tailing disposal and water recirculation The basic design of the plant was done atmeggha be institute Leningrad based on the

pilot-plant studies conducted at National Metallurgical labrotory and Jamsedpur and also

Mekhnastore institute.

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INFRASTURCTURE FACILITIES Malanjkhand Copper Project has infrastructure facility as under:

(1) Repairing Facility: Facility like Mechanical maintenance, electrical maintenance, civil maintenance are existing in Malanjkhand CopperProject.

(2) Power supply System: There is 132kv main receiving sub-station which has two 20/26 MVA, 132/11 kv transformers step down sub-stations have been constructed suiting to requirement of various equipment and utilities.

(3) Water supply system: Water from concentrator plant as well as protactable for the project and township is drawn from Banjar River.

(4) Residential Township: With shopping complex’s to cater to almost all house hold requirement and clubs, play grounds parks for recreation.

(5) Health and Medical facility. (6) Education facility.

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FINANCE DEPARTMENT These are the various section under financial Department in

M.C.P. The structure of finance sections are as under.

The Structure of Finance Sectionsss

FINANCE DEPARTMENTS

ESTABLISHMENT SECTION

SALARY SECTION

MIS SECTION

CONTRACT/WORK SECTION

SUPPLIERS SECTION

STORES SECTION

SUPPLIERS SECTION

STORES SECTION

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ESTABLISHMENT SECTION In establishment section nature of job is dealing with all types of receipts and

payments.

Receipts

(1) Outside agencies are depositing cash towards

the cost of tender document

(2) House rent if allotted

(3) Electricity if allotted

(4) Excess payment if made

Employees Receipts

Deposited by cash as Travel allowance

and dearness allowance.

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Payments

(1). Payment to irrigation department

(2). Electricity payment

(3). Commercial rate

(4). Water supply payment

(5).Royalty

(6).Office and administration

(7).Property tax to Municipal council of Mahugaon.

Employees Payments

(1) Medical advance

(2) Travel allowances

(3) L.T.C advance

(4) Advance some company work(impress advance)

and all types of adjustments

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Payments to outside agencies(contractor)

Property tax to Municipal council of Mahangaon

Approx 5000000/month

Royalty 6000000 paid to collector of Balaghat

Electricity paid by the company 2.5corore

10 lakhs for water supply

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SALARY SECTION Number of employees of MCP & their scale of pay Technical :- Level Revised scale of pay T-1 4000-80-5600 T-2 4200-90-6000 T-3 4400-100-6400 T-4 4600-110-6800 T-5 4800-125-7300 T-6 5000-140-7800 T-7 5300-155-8400 T-8 5600-170-9000 T-9 6000-185-9700 T-10 6400-200-11200

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CLERICAL:- Level Revised scale of pay C-1 4000-80-5600 C-2 4200-90-6000 C-3 4800-110-6600 C-4 5500-155-8400 C-5 5600-170-9000 C-6 6000-185-9700 EXECUTIVE:- Level Revised scale of pay E-0 6550-200-11350 E-1 8600-250-14600 E-2 10750-300-16750 E-3 13000-350-18250 E-4 14500-350-18700 E-5 17500-400-22300 E-6 18500-450-23900 E-7 18500-450-23900 E-8 20500-500-26500 E-9 23750-600-28500 SALARY Salary leave Three types of leave

(1) Earn leave (18days)

(2)Seek leave 12days

(3)Casual leave 12 days

Earn leave 33 days for executive

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SUPPLIER SECTION

Nature of job:

� Passing the bills of suppliers of material by various

Suppliers.

� Passing of bills of repairs and maintance against various work

order.

(1) Purchase order

(2) Work order

(1) User department shall give the indent requirement of material to purchase

department.

(2) Then purchase department shall float the enquiry to the Registered supplier

for submitting quotations after with a submitted time.

(3) Received the quotation from various parties all the quotation shall be

open by the tender comity by the complaint authority

(4) After receiving it comparative statement prepared by purchase department

of all the quotation and submit the files to the finance concerance.

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After receiving the financial concerance for

Placement of order purchase department will issued the purchase order to

the suppliers with all term the condition.

(1) Payment term

(2) Quantity

(3) Specification

(4) Security deposited specially

Security Deposit: In the from of draft

In the form of bank guarantee.

10% of the w.o or p.o for performance of material

* If the particular has not achieved the penalty should be recovered from the amount

security deposit.

* After receiving and acceptance of the purchase order

* The order will be cleared by various competitive authorities according to their

powers.

After receiving and acceptance of the purchase order the supplier will start the supply

of the material either by his own transport or by authorized

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STORE SECTION Nature of job:-

Store section received the Receipt voucher on the issue vouche on the basis

of these issue statements and receipts statements is prepared for maintain

the statement following procedure must be followed.

(1) raised the indent (concerned department)

(2) Material department (float the enquiry tender enquiry to all department.

(3) then make party quotation.

(4) Material department made a (comparative statement)

(5) The send purchase order to the supplier section.

.

(6) Daily receipt Register maintain all records.

(7) Receipts voucher made.

(8) Bin card.

(9) Store section received it then they will send it to system department.

System department after checking it. Send again to store section (PSL)

price Store ledger maintain.

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WORK / CONTRACTS

Nature of job:

Pass the tender proposal and the estimate were made. i.e

NIT – Notice inventory tender

LIE – Limited tender enquiry

OTE- Open tender

Comparative statement according to:-

DSR – Delhi schedule of rates

CPWD – Central public worries depth

Mine development

Press tender

Work order passed

Bills also passed

E.M.D earnest money deposit

10% security deposit of contract amount

Secured advance – [fixed items only]

Mobilized items [to mobilized the work]

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Management Information System

MIS [section]

According to various: receipts voucher

Payment voucher

Issue voucher

MIS Section prepared the journal voucher all the daily records

are recorded in it

Debit and credit entries passed in it and balance amount in last

Ay of the month.

According to the journal voucher

*trail balance

*and ledger prepared

*costing

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Trial Balance

The trail balance include

.. All receipt and expenditure

.. Debtors and Creditors

.. Assets and liabilities are recorded

With The help of trial balance final accounts are prepared

i.e. In the shape of balance sheet and profit & loss A/C.

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COST SHEET in making of cost sheet the following items should be included . (1) Summarized production and cost data (2) Ore (3) Over burden removal (4) Excavation (5) Milling (6) Concentrate (7) Consumptions of major material (8) Calculation of input cost in conc. (9) Amortizations Calculation

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DISTRUBUTION OF COST SHEET The cost sheet of the organization should be distributed to the following staffs: (1) TA to CMD (2) D (f), HO (3) DGM (tec), HO (4) Advisor Finance (5) AGM (finance)/KCC (6) GM/MCP (7) Office copy The cost sheet is prepared at the end of every month.

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OBJECTIVES

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OBJECTIVES As a student of M.B.A previous it is a great honour for me to complete my summer

training on H.C.L. We are mainly considering the Department of finance in H.C.L,

under (M.C.P), Malanjkhand Copper Project.

Main Motive Of This Training (1) To increase our knowledge in depth.

(2) To convert our bookish knowledge into practical knowledge.

(3) To increase our efficiency to deal with the people who are very

experienced and knowledgeable.

(4) The data which we have collected from Malanjkhand Copper Project

is for our purpose of acquiring the knowledge not for any other

purpose.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY The purpose of research is conducted when there are few or no earlier studies to which

references can be made for information. The aim is to look for patterns, ideas or

hypotheses rather than testing or confirming a hypotheses. In research the focus is on

gaining insights and familiarity with the subject area for more rigorous investigation

later. In an undergraduate dissertation it is likely that you will drawing on previous

studies and so pure exploratory research is not generally appropriate for studies at this

level-it is more appropriate for postgraduate research. However, it is possible that you

may carry out an initial survey to establish areas of concerns and then research these

issues in more depth .

Research is also an academic activity and as such the term should be used in

technical sense. According to Clifford research comprises defining and redefining

problems ,formulating suggested solution; collecting, organizing and evaluating data;

making deductions and reaching conclusion; and at last carefully testing the conclusion to

determine whether they fit the formulating hypothesis.

The research programmed is focused on the causal relationship between the

finance department & their development. It will also try to identify a core of financial

services that are necessary for poverty reducing growth and their institutional structures

that have been more successful in providing them.

In the period of my summer project I collect the information, Datas, ideas through

various sources and each of these sources are very useful & very helpful for me for

completing my summer project in HCL (Malanjkhand Copper Project).

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The various types of sources are as follows.

*. My discussion with senior and experienced persons working in Malanjkhand Copper

Project.

*. Discussion with other friends and colleagues, and other workers of the organization.

*. The research on past data, information available in the organization.

*. Web-sites of HCL is very useful for collecting the information.

*. Various types of files, notes, books that were provided and referred by the manager

of Malanjkhand Copper Project.

*. By see the working pattern of the worker help me for collecting the information

regarding the work

*. The library of Malanjkhand Copper Project provide knowledge and ideas.

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VARIOUS TYPES OF ACTIVITIVES

DONE UNDER MCP

44

Basis of Preparation of Accounts :

1.The accounts have been prepared to comply in all material aspects with applicable

accounting principles in India, mandatory Accounting Standards issued by the Institute of

Chartered Accountants of India consistently being followed and the relevant provisions

of the Companies Act, 1956. The Financial Statements have been prepared under the

historical cost convention on an accrual basis in a going concern concept.

2. Financial statements have been prepared based on in-house technical estimates in

respect of the following :

- Allocation of service shaft expenses, underground mining expenditure

between revenue and capital.

- Metal content in raw materials, WIP and finished goods.

- Credit of anode scrap generation in refinery plant.

- Mineable ore reserves in underground mines.

- Stripping ratio in open cast mines.

BALANCE SHEET :

3. Fixed Assets :

3.1 Fixed assets are recorded at cost net of CENVAT and VAT credit wherever

applicable less accumulated depreciation and impairment loss,if any.

3.2 Pending reconciliation/receipt of the final bills against capital items, capitalization is

done on the basis of cost booked and depreciation is charged accordingly. Price

differences, if any, are adjusted in the year of finalization of bills.

45

3.3 In respect of expenditure during construction of a new unit in a new

location, all direct capital expenditure as well as all indirect expenditure

incidental to construction are capitalized allocating to various items of

fixed assets on an appropriate basis. Expansion programme involving

construction concurrently run with normal production activities in an existing unit, all

direct capital expenditure in relation to such expansion are capitalized but indirect

expenditure are charged to revenue.

3.4 Project expenses incurred for implementation of new projects are carried forward

against respective project till execution. Project expenses rendered infructuous or

abandoned are charged to the Profit & Loss Account.

3.5 Physical verification of fixed assets is carried out once in every five years.

4. Depreciation :

Depreciation on fixed assets is provided on straight line method at the rates prescribed in

Schedule XIV to the Companies Act, 1956. Depreciation on assets acquired prior to

01.04.93 is charged on derived rates by allocating the unamortized value over the

remaining life arrived at on the basis of rates prescribed under the Schedule XIV to the

Companies Act,1956. Depreciation in respect of plant & machinery and building of new

project is charged from the date of commercial production.

Impairment of Assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable

value. An impairment loss is charged to the Profit and Loss Account in the year in which

46

an asset is identified as impaired. The impairment loss recognized in prior

accounting period is reversed if there has been a change in the estimate of

recoverable amount.

7. Mine Development Expenditure :

7.1 In case of underground mines :

The expenditure on development of a new mine in all cases and on subsequent

development of a working mine in specified cases is capitalized and amortized on the

basis of ore raised during the year and the mineable ore reserves estimated from time to

time. The ore obtained during development activity is adjusted against such expenditure

at its derived realizable value.

7.2 In case of working mines, where development activities

are going on simultaneously :

Expenses are apportioned between capital or revenue on the basis of sinhouse technical

estimates.

7.3 In respect of open cast mines :

The expenditure on removal of waste and overburden, is capitalized and the same is

amortized in relation to actual ore production during the year and the stripping ratio of

the mine as determined by the company at the weighted average rate.

7.4 Expenditure incurred on exploration of new deposits is included in mine development

expenditure. If the exploration activities are found to be not fruitful, the expenditure on

such exploratory work included in mine development expenditure is written off in the

year in which it is decided to abandon the project.

8. Major Overhauling Expenses :

The expenditure attributable to major overhaul of smelter/refinery is charged to the

Accounts in the year of incurrence.

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9. Inventories :

9.1 Stocks of raw materials, stores and spare parts, loose tools and

materials in-transit are valued at cost. Loose tools when issued are charged off to

revenue.

9.2 Finished goods and work-in-process are valued at the lower of the net realizable value

and weighted average cost to the unit. The cost is exclusive of financing cost, such as,

interest, bank charges etc. The value of slag under work in process is taken at equivalent

value to the extent credited to the process, where the said products have been generated.

The reverts under work- in-process are valued at lower of cost (equivalent value of

concentrates) and net realizable value. Subsidy on fertilizers is not considered for the

purpose of fertilizer stock valuation.

9.3 The stock of anode slime arising from treatment and refining processes are valued at

realizable value based on the year end London Metal Exchange price for gold and silver

after making due adjustments of their physical recovery and the treatment and refining

charges.

9.4. Liability for excise duty on finished goods in stock lying at works or warehouses, is

provided for in the accounts and also considered in stock valuation.

9.5 The inventories out of inter-unit transfers at the close of the year are valued on the

basis of cost or net realizable value whichever is lower to the transferor unit. No

adjustment is made in respect of difference between the cost and transfer price for such

transferred products in case of partly processed materials lying at various stages of

production and finished stocks at the end of the year, since this is not practically

ascertainable.

48

9.6 Imported materials are valued at weighted average cost at a

provisional price pending finalization of invoice price and customs duty.

Variations are accounted for in the year of finalization.

9.7 Once in every three years provision is made in the accounts for non-moving stores

and spares (other than insurance spares) which have not moved for more than five years.

9.8 Scraps are accounted for on realization.

PROFIT AND LOSS ACCOUNT :

10. Sales :

Sales are net of discounts other than cash discounts.

11. 1. Other Income

11.1 1.1 Claims :

Claims on account of liquidated damages and insurance are accounted for as and when

these are deducted and/or considered recoverable by the company.

11.2 1.2 Conversion charges :

Income from conversion of job work is accounted for on the basis of dispatches made .

11.3 1.3 Interest on L/C bills :

Interest up to the date of Balance Sheet on all outstanding bills is accounted for on

accrual basis.

12. Retirement Benefit

12.1 Gratuity and Leave encashment :

49

Gratuity and leave encashment liability on retirement are provided based

on actuarial valuation.

12.2 Deficit in Provident Fund :

Deficit, if any, on account of Provident Fund Trust is accounted for on the basis of

accrued liability, as ascertainable on the basis of last accounts closed by the Provident

Fund Trust.

13. Borrowing cost :

Interest/finance cost on loans specifically borrowed for new and expansion projects up to

the start of commercial production is charged to the capital cost of the projects

concerned. All other borrowing cost are charged to revenue.

14. ACCOUNTING FOR TAXES ON INCOME :

Income Tax Expense comprises current tax and deferred tax charge. Deferred Tax is

recognized on timing differences, being the difference between Taxable Income and

Accounting Income that originate in one period and are capable of reversal in one or

more subsequent periods. Deferred Tax Assets are recognized only if there is virtual

certainty that sufficient future taxable income will be available against which Deferred

Tax Assets will be realized. Such balances of Deferred Tax Assets are reviewed as at

each Balance Sheet Date to reassess the realisability thereof.

15. General :

15.1 For Foreign Currency Transactions ransactions :

Transactions in foreign currencies are recognized at the rates existing at transaction time

at which the transaction is settled. Year-end balances of receivables/payables are

translated at applicable forward contract/year-end rates and resultant translation

differences relating to fixed assets are adjusted against fixed assets and the balance is

recognized in the Profit and Loss Account.

15.2 Recognition of Contingent Liability :

50

A contingent liability is recognized when as a result of past events there is

a possible obligation or a present obligation that may, but probably will

not, require an outflow of resources and are disclosed by way of Notes.

15.3 Events occurring after the Balance Sheet Date :

Assets and Liabilities are adjusted for events occurring after the Balance Sheet that

provide additional evidences to assist the estimation of accounts relating to conditions

existing at the Balance Sheet Date.

15.4 Prior Period & Extra Ordinary Items :

(i)The nature and amount of prior period items (ii) extra-ordinary items are separately

disclosed in the statement of Profit & Loss in a manner that their impact on the current

Profit & Loss can be perceived.

15.5 Research and Development Expenditure :

Expenditure on research and development is charged off to Profit & Loss account in the

year it is incurred. Expenditure on fixed assets in this regard is capitalized.

15.6 Mine Closure Expenditure :

Financial implications towards final mine closure plans under relevant Acts and Rules are

technically estimated and the involvement, not being material, are charged off on actual

incurrence.

51

16. Voluntary Retirement Expenses :

16.1 Paid out of own fund :

In respect of Voluntary Retirement expenditure incurred by the company out of own

funds is charged off to revenue over a period of 60 months.

16.2 Paid out of Government Grant :

Voluntary Retirement Expenditure is charged to the Profit & Loss Account on receipt of

Grants from the Government of India with corresponding credits to the Profit & Loss

Account.

52

ANALYSIS OF FINANCIAL REPORTS &

COST SHEET

53

Financial Report of H.C.L of last 10 years

10 Year At A Glance(Rs. In Lakhs)

2005-2006 (12 months)

2004-2005 (12 months)

2003-2004 (12 months)

2002-2003 (12 months)

2001-2002 (12 months)

1999-2001 (18 months)

1998-1999 (12 months)

1997-1998 (18 months)

1996-1997 (12 months)

1995-1996 (12 months)

FOR THE YEAR

1 2 3 4 5 6 7 8 9 10

Turnover 105376 55911 51887 50568 60498 94558 47949 120348 98024 111802

Profit/(Loss) 16425 11173 289 (8999) (12592) (10626) (11276) (1725) (7677) 13099

Depreciation

and

Amortisation

5837 5575 5905 5771 5812 9019 5925 8848 5384 5515

Net

Profit/(Loss) 10588 5598 (5616) (14770) (18404) (19644) 17201 10573 13062 7584

Value Added 43102 35042 22901 14737 15309 33591 16724 28946 21937 41359

Value of

production 104837 63124 53443 50153 58666 100166 51347 118022 100529 118627

AT THE YEAR END

Share

Capital 94895 94895 90895 79511 71011 54361 53661 52511 33820 33820

Internal

Resources (11057) (29884) (35030) (31039) (16945) (49) 19097 33896 42018 53305

Long-term

loans 18750 22275 27562 29182 29182 64332 37236 11527 17456 17456

Cash credit

from banks 481 11823 7611 13949 12204 12270 8416 11960 12322 10709

Capital

expenditure

gross

97789 96771 99431 100559 102477 106076 106621 105082 101630 97772

Working

Capital 6278 3394 (102) (2595) 751 1798 649 8635 14440 24529

Capital

employed 24747 23455 21528 20389 24929 28306 29871 40368 45978 57081

Manpower 5583 5665 5995 7865 9502 12043 15271 18234 19884 20108

54

Quarterly Performance Report 0f Hindustan Copper Ltd.

First Quarter (Apr 2007 to Jun 2007)

Particulars (Lakh Rs.) Q1 (2007-08) Q1 (2006-07) Change %

Gross Sales & Operating

Revenue 43,325.27 38,035.34 13.91

Other Income 1,717.73 113.20 1417.43

Total Expenditure 34,649.53 32,818.30 5.58

P B D I T 10,393.47 5,330.23 94.99

Interest 922.36 774.58 19.08

Depreciation 459.25 464.34 -1.1

Profit before Tax 9,011.86 4,091.31 120.27

Provision for Tax 1,467.00 7.50 19460

Net Profit 7,544.86 4,083.81 84.75

Earning Per Share(Rs.) 0.98 0.56 75

Second Quarter (July 2006 to Sept 2006)



Revenue 36,618.51 22,568.99 62.25

Other Income 628.64 208.04 202.17

Total Expenditure -9,231.02 18,270.67 -150.52

P B D I T 10,568.72 4,506.36 134.53

Interest 883.82 919.92 -3.92

Depreciation 317.52 478.41 -33.63


Provision for Tax 7.50 0 -

55

Net Profit 9,359.88 3,108.03 201.15

Earning Per Share(Rs.) 1.29 0.43 200

Third Quarter (Oct 2006 to Dec 2006)



Revenue 55,189.06 30,170.23 82.93

Other Income 332.44 116.98 184.19


P B D I T 14,337.22 4,026.51 256.07

Interest 706.86 840.52 -15.9

Depreciation 462.53 486.41 -4.91


Provision for Tax 7.50 6.70 11.94

Net Profit 13,160.33 2,692.88 388.71

Earning Per Share(Rs.) 1.71 0.37 362.16

Fourth Quarter (Jan 2007 to Mar 2007)



Revenue 50,213.21 38,413.25 30.72

Other Income 1,275.64 358.42 255.91


P B D I T 8,307.22 4,738.26 75.32

Interest 992.40 784.10 26.57

Depreciation 466.35 484.35 -3.72


Provision for Tax 2,109.52 6.22 33815.11

Net Profit 4,738.95 3,463.59 36.82

Earning Per Share(Rs.) 0.62 0.48 29.17

56

Sales Report of H.C.L:- Sales Revanue

2007)

Item Description Q1 (2007-08) Q1 (2006-07) Change %

Copper Cathode 2,975.01 804.74 269.69

Copper CC Rods 39,781.17 32,362.83 22.92

Copper Sulphate 36.85 41.20 -10.56

Copper wire-bar 0 2,048.90

Gold 0 646.53

Nickel 0 0 -

Plladium 0 0 -

Selenium 0 92.41

Silver 257.97 213.44 20.86

Sulphuric Acid 0 187.35

Second Quarter (July 2006 to Sept 2006)


Copper Cathode 1,234.52 1,900.75 -35.05

Copper CC Rods 34,102.28 20,777.76 64.13

Copper Sulphate 56.74 35.37 60.42

Copper wire-bar 0 250.53

Gold 857.14 0 -

Nickel 0 4.21

Plladium 0 0 -

Selenium 43.57 67.18 -35.14

Silver 216.88 17.38 1147.87

57

Sulphuric Acid 82.95 171.81 -51.72

Third Quarter (Oct 2006 to Dec 2006)


Copper Cathode 3,210.19 1,986.00 61.64

Copper CC Rods 39,959.09 26,606.80 50.18

Copper Sulphate 43.17 23.21 86

Copper wire-bar 0 992.86

Gold 0 0 -

Nickel 0 0 -

Plladium 0 0 -

Selenium 0.60 101.46 -99.41

Silver 0 106.61

Sulphuric Acid 175.44 361.67 -51.49

Fourth Quarter (Jan 2007 to Mar 2007)


Copper Cathode 2,604.79 1,042.25 149.92

Copper CC Rods 44,211.05 35,645.05 24.03

Copper Sulphate 66.64 48.67 36.92

Copper wire-bar 0 1,272.80

Gold 0 393.56

Nickel 0 0 -

Plladium 0 0 -

Selenium 0 0 -

Silver 0 235.32

Sulphuric Acid 287.06 241.37

58

COST SHEET

In making of cost sheet there are types of cost included Like variable expenses, fixed

expenses lets know about These types of expenses.

Variable cost:-

Variable cost is the aggregate of direct material, direct labour and direct

expenses and variable overheads (i.e prime cost + variable overheads), variable cost in

total is termed as a ‘Marginal Cost’ it is deduct from sales and contribution is ascertained.

“Variable cost is in operating expenses, or a group of

operating expenses that vary directly and in proportion to the level of activity, viz. sales

or production. Examples are materials consumed, direct labour, power, sales,

commission, utilities, freight, packaging etc.

ICMA, India

59

Fixed Cost :-

Fixed cost means total of all fixed overheads. But it is important to note that

in India,where

* Most of the labour force is on daily wages.

* Most of labour costs consists of Dearness allowance(DA)

* ‘Reternchment’ & ‘Lay-off’ is not possible in the ordinary

course of business.

Labors cost is also sometimes treated as fixed and included in fixed cost. Treatment

of the fixed cost in marginal costing is very peculiar ‘Fixed Cost’ are also as ‘time cost’,

‘period Cost’, ‘capacity cost’, ‘stand-by-cost’, or ‘constant cost’. Fixed Costs are not

concerned with the output level. They are rather period costs. During the given period,

they are required to be incurred irrespective of the fact, whether the output is produced

or not. Therefore fixed cost are written-off to a marginal cost profit & loss account. They

are not included in cost of good sold, neither in closing stock. At the end of the period,

contribution (i.e difference between sales & marginal cost) is credited to marginal costing

profit & loss account to which fixed cost are debited. The contribution first recopes fixed

cost and then earns profit. It fixed cost is more than contribution, then there is a loss.

60

There are various types of activity will be done under costing department of HCL

(Malanjkhand Copper Project) let us see with the help of cost sheet of Malanjkhand

copper project up to the month of March 2007.

SUMMARISED PRODUCTION & COST DATA

A.PRODUCTION DATA UNIT for march 2007 up to march 2007 _______________________________________________________________ 1. Deptt. Excavation M3 230000.000 2510000.000 2 .Deptt. OB Removal M3 158509.294 1820685.874 3. Deptt ore prod+Reclamed Ore MT 192310.000 1854255.000 4. Deptt Ore Grade % 1.058 1.016 5. Deptt MIO+MIO Reclamed or MT 2035.640 18842.221 6. Cont. Excavation M3 746000.000 1272346.000 7. Deptt OB Removval M3 66557.993 1109396.929 8. Deptt. Ore Production MT 21633.000 438333.000 9. Deptt Ore Grade % 0.704 1.081 10 Deptt. Metal in Ore MT 152.375 4739.986 11.Ore Milling MT 211284.000 2154691.000 12.Grade of Ore % 1.096 1.035 13.Metal in Ore Milled MT 2257.823 22305.789 14.Concentrates (25%Gr.) MT 8460.708 83854.036 15.Metal in Conc. MT 2115.177 20963.509 16.Rate of Recovery % 93.682 93.982

61

B. COST DATA Unit for march 07 upto march 07 I.DEPARTMENTAL: 01.Ore production Rs/MT 444.19 437.59 02.Ore pro.with intt.&HO Exp Rs/MT 471.22 471.87 03. Metal in Ore Rs/MT 44538.94 46436.63 04.Overburden Removal Rs/M3 297.10 279.66 05.Excavation Rs/M3 297.10 279.66 06.-do-with intt.& HO Exp. Rs/M3 319.70 304.99 07.Ore Milling Rs/MT 279.29 271.41 08.-do-with intt.& HO Exp Rs/MT 303.89 300.91 09.Concenrates(25% Gr.) Rs/MT 20709.82 19374.95 10.-do-with intt,HOExp. & Transportation Rs/MT 24543.13 23191.63 11.Metal in conc. Rs/MT 73220.77 73074.69 12.-do-with intt,Ho Exp. & Transportation Rs/MT 86773.67 87469.71 II.CONTRACTUAL 01. Ore Production Rs/MT 375.24 427.03 02. Metal in ore Rs/MT 53273.74 39489.54 03. Excavation/OB Removal Rs/M3 185.00 185.00 04. Excavation/OB Removal (with blasting) Rs/M3 203.54 204.48

62

Cost sheet Sub Centre :- ORE

Particulars For Mar 07 Upto Mar 07 ------------------------------------------------------------------------------------------------------------------Ore prod.+ Reclaimed from OB(MT) 192310.00 1854255.00 Grade (%) 1.06 1.02 MIO + Reclaimed from OB (MT) 2034.64 18842.22 ------------------------------------------------------------------------------------------------------------Cont.Ore Production (MT) 21633.00 438333.00 Grade(%) 0.70 1.08 Metal in Ore 152.38 4739.99 Value Cost Value Cost (Rs lacs) (Rs/T) (Rs lacs) (Rs/T) ---------------------------------------------------------------------------------------------------------------------A .VARIABLE COST OPERATING MATARIALS -Explosives 13.26 6.89 131.33 7.08 -Drills Bits 0.15 0.08 1.34 0.07 -Detonators 0.00 0.00 0.00 0.00 -Others-tyre & tubes 19.56 10.17 141.30 7.62 -Other Diesel 37.64 19.57 331.00 17.85 -Other Lubricants 5.29 2.75 47.12 2.54 -Others 0.42 0.22 7.34 0.40 SUB TOTAL 76.31 39.68 659.43 35.56 STORES 3.47 1.80 19.77 1.07 SPARES (1/3) 12.90 6.71 98.46 5.31 POWER 4.15 2.16 68.61 3.70 INCENTIVES BONUS 1.07 0.56 11.20 0.60 COMPRESSED AIR 6.33 3.29 62.34 3.36 ROYALITY 185.69 96.56 1864.97 100.58 AMORTISATION 456.13 237.19 4344.73 234.31 OTHERS 2.23 1.16 20.75 1.12 -----------------------------------------------------------------------------------------------------------------Total variable cost 748.28 389.10 7150.26 385.61

63

Value Cost Value Cost (Rs/lacs) (RS/T) (Rs/lacs) (Rs/T) ---------------------------------------------------------------------------------------------------------------------- B.DIRECT FIXED COST SALARIES & WAGES -operations 7.80 4.06 75.81 4.09 -repairs & mantaince 10.33 5.37 100.30 5.41 SUB TOTAL 18.13 9.43 176.11 9.50 SPARES (2/3) 25.80 13.42 196.93 10.62 CONTRACTUAL REPAIRS 20.28 10.54 114.89 6.20 CENTRAL SERVICES -salary & wages 3.66 1.90 35.52 1.92 -power 0.53 0.27 6.10 0.33 -stores & repairs 2.33 1.21 28.26 1.52 -others 0.00 0.00 0.00 0.00 SUB TOTAL 6.51 3.39 69.88 3.77 MINES SERVICES -salary & wages 5.75 2.99 55.86 3.01 -power 0.00 0.00 0.00 0.00 -stores 0.61 0.32 53.07 2.86 -others 0.00 0.00 0.00 0.00 SUB TOTAL 6.36 3.31 108.93 5.87 GENRAL OVERHEADS -salary & wages 9.12 4.74 87.10 4.7 -power 0.28 0.14 3.63 0.2 -stores & spares 0.96 0.50 10.78 0.58 -others 0.78 0.40 8.14 0.44 SUB TOTAL 11.14 5.79 109.66 5.9 SOCIAL OVERHEADS -salary 1.92 1.00 20.10 1.08 -power 2.71 1.41 29.77 1.61 -stores & spares 0.96 0.50 10.78 0.58 -others 0.78 0.40 8.14 0.44 SUB TOTAL 6.37 3.31 68.80 3.71 DEPERCATION 11.33 5.89 118.66 6.40 ----------------------------------------------------------------------------------------------------------------------Total fixed cost (B) 105.94 55.09 963.85 51.98 ----------------------------------------------------------------------------------------------------------------------

64

(Rs/lacs) (Rs/T) (Rs/lacs) (Rs/T)----------------------------------------------------------------------------------------------------------------------- C.ALLOCATED FIXED COST HO EXPENSES 29.93 15.56 333.88 18.01 INTREST IN C/C & OTHERS 7.64 3.97 82.43 4.45 INTREST ON BONDS(old) 0.00 0.00 0.00 0.00 INTREST ON BONDS(new) 12.12 6.30 133.83 7.22 INTREST ON ICICI DEBENTURE 2.31 1.20 53.58 2.89 INTREST ON GOVT LOAN 0.00 0.00 0.00 0.00 ----------------------------------------------------------------------------------------------------------------------Total allocated fixed cost(C) 51.99 27.03 635.58 34.28 ----------------------------------------------------------------------------------------------------------------------Total cost (A+B+C) 906.21 471.22 8749.69 471.87 ----------------------------------------------------------------------------------------------------------------------

65

SUB CENTRE :- OVER BURDEN

Particulars for March 07 upto March 07 Dept.over burden Removed(M3) 158509.29 1829037.92 Cont.over burden Removed(M3) 66557.99 1109396.93 ----------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (Rs/T) (Rs/lacs) (Rs/T) ------------------------------------------------------------------------------------------------- A.VARIBLE COST OPERATING MATARIALS -explosives 29.39 18.54 352.74 19.29 -drill bits 0.33 0.21 3.59 0.20 -detonators 0.00 0.00 0.00 0.00 -others-tyre & tubes 43.38 27.37 379.54 20.75 -other-diesel 83.44 52.64 889.05 48.61 -others-lubricants 11.72 7.40 126.57 6.92 -others 0.94 0.59 19.71 1.08 SUB TOTAL 169.20 106.75 1771.20 96.84 STORES 7.69 4.85 53.09 2.90 SPARES (1/3) 28.60 18.04 264.47 14.46 POWER 9.20 5.80 184.29 10.08 INCENTIVES BONOUS 2.37 1.50 30.09 1.65 COMPRESSED AIR 14.03 8.85 167.44 9.15 ROYALTY 0.00 0.00 0.00 0.00 AMORTISATION 0.00 0.00 0.00 0.00 OTHERS 4.95 3.13 55.73 3.05 -----------------------------------------------------------------------------------------------------------------Total variable cost 236.05 148.92 2526.31 138.12 ----------------------------------------------------------------------------------------------------------------- B.DIRECT FIXED COST SALARIES & WAGES -operations 17.30 10.92 203.62 11.13 -repairs & maintance 22.91 14.45 269.40 14.73 SUB TOTAL 40.21 25.37 473.02 25.86 SPARES(2/3) 57.20 36.09 528.94 28.92 CONTRACTUAL REPAIRS 44.96 28.37 308.59 16.87 CENTRAL SERVICES

66

-salary & wages 8.11 5.12 95.40 5.22 -power 1.17 0.74 16.39 0.90 -stores & spares 5.16 3.26 75.91 4.15 -others 0.00 0.00 0.00 0.00 SUB TOTAL 14.44 9.11 187.70 10.26 MINES SERVICES -salary & wages 12.76 8.05 150.03 8.20 -power 0.00 0.00 0.00 0.00 -stores & spares 1.35 0.85 142.54 7.79 -others 0.00 0.00 0.00 0.00 SUB TOTAL 14.11 8.90 292.57 16.00 GENERAL OVERHEADS -salary & wages 20.22 12.76 233.95 12.79 -power 0.62 0.39 9.76 0.53 -stores & spares 2.14 1.35 28.96 1.58 -others 1.72 1.09 21.86 1.20 SUB TOTAL 14.13 8.92 184.79 10.10 DEPRECIATION 25.12 15.85 318.70 17.42 -----------------------------------------------------------------------------------------------------------------Total Fixed Cost (B) 234.88 148.18 2588.86 141.54 ----------------------------------------------------------------------------------------------------------------- C. Allocated Fixed Costs HO EXPENSES 0.00 0.00 0.00 0.00 INTREST ON C/C & OTHERS 0.00 0.00 0.00 0.00 -----------------------------------------------------------------------------------------------------------------Total allocated fixed cost (c) 0.00 0.00 0.00 0.00 -----------------------------------------------------------------------------------------------------------------Total cost (A+B+C) 470.93 297.10 5115.17 279.66 -----------------------------------------------------------------------------------------------------------------Cont with blasting exp. 135.47 203.54 2268.47 204.48

67

SUB SECTION;- EXCAVATION

--------------------------------------------------------------------------------------------Particulars for March 07 up to March 07 Dept.Excavation (M3) 230000.00 2510000.00 Cont.Excavation(M3) 74600.00 1272346.00 ------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (Rs/M3) (Rs/lacs) (Rs/M3) --------------------------------------------------------------------------------------------A.VARIABLE COST OPERATING MATARIALS -explosives 42.65 18.54 484.07 19.29 -drill bits 0.48 0.21 4.93 0.20 -detonators 0.00 0.00 0.00 0.00 -others ;tyres &tubes 62.94 27.37 520.84 20.75 -other –Diesel 121.08 52.64 1220.05 48.61 -other –lubricants 17.01 7.40 173.69 6.92 -others 1.36 0.59 27.05 1.08 SUB TOTAL 245.52 106.75 2430.63 96.84 STORES 11.16 4.85 72.86 2.90 SPARES(1/3) 41.50 18.04 362.94 14.46 POWER 13.35 5.80 252.90 10.08 INCENIVES BONUS 3.44 1.50 41.29 1.65 CONT.DRILLING 20.35 8.85 229.78 9.15 ROYALTY 0.00 0.00 0.00 0.00 AMORTISATION 0.00 0.00 0.00 0.00 WATER 7.19 3.13 76.48 3.05 ----------------------------------------------------------------------------------------------------------------Total variable Cost(A) 342.51 148.92 3466.87 138..12 ---------------------------------------------------------------------------------------------------------------B.DIRECT FIXED COST. SALARIES & WAGES -operation 25.10 10.92 279.43 11.13 -Repairs & Maintenance 33.24 14.45 369.70 14.73 SUB TOTAL 58.34 25.37 649.13 25.86 SPARES(2/3) 83.00 36.09 423.48 16.87 CONTRACTUAL REPAIRS 65.24 28.37 423.48 16.87

68

--------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (Rs/M3) (Rs/lacs) (Rs/M3) --------------------------------------------------------------------------------------------------------------- CENTRAL SERVICES -salary & wages 11.77 5.12 130.92 5.22 -power 1.69 0.74 22.49 0.90 -stores & spares 7.49 3.26 104.17 4.15 -others 0.00 0.00 0.00 0.00 SUB TOTAL 20.96 9.11 257.58 10.26 MINES SERVICES -salary & wages 18.51 8.05 205.89 8.20 -power 0.00 0.00 0.00 -stores & spares 1.96 0.85 195.61 7.79 -others 0.00 0. 00 0.00 0.00 SUB TOTAL 20.47 8.90 401.50 16.00 GENRAL OVERHEADS -salary & wages 29.35 12.76 321.05 12.79 -power 0.90 0.39 13.40 0.53 -stores & spares 3.10 1.35 39.74 1.58 -others 2.50 1.09 30.00 1.20 SUB TOTAL 35.84 15.58 404.19 16.10 SOCIAL OVERHEADS -salary & wages 6.18 2.68 74.10 2.95 -power 8.73 3.80 109.75 4.37 -stores & spares 3.10 1.35 39.74 1.58 -others 20.51 8.92 253.59 10.10 SUB TOTAL 20.51 8.92 253.59 10.10 DEPRECATION 36.45 15.85 437.36 17.42 ---------------------------------------------------------------------------------------------------------------total fixed cost (B) 340.82 148.18 3552.71 141.54 --------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (Rs/M3) (Rs/lacs) (Rs/M3) ---------------------------------------------------------------------------------------------------------------C.ALLOCATED FIXED COST HO EXPENCES 29.93 13.01 333.88 13.30 INTREST ON C/C & OTHERS 7.64 3.32 82.43 3.28 INTREST ON BONDS(old) 0.00 0.00 31.86 3.28 INTREST ON BONDS (new) 12.12 5.27 133.83 5.33 INTREST ON ICICI DEB. 2.31 1.00 53.58 2.13 INTREST N GOVT .LOAN 0.00 0.00 0.00 0.00

69

---------------------------------------------------------------------------------------------------------------total allocated fixed cost (C) 51.99 22.60 635.58 25.32 ---------------------------------------------------------------------------------------------------------------total cost (A+B+C) 51.99 22.60 635.58 25.32 ---------------------------------------------------------------------------------------------------------------cont with blasting exp. 151.84 203.54 2601.66 204.48 ]

70

SUB CENTRE :- MILLING

MILLING Particulars For March 07 Up to March 07 Ore Milled 211284.00 2154691.00 Metal Grade (%) 1.07 1.04 Metal in ore(MT) 2257.82 22305.79 Recovery (%) 93.68 93.98 Metal in Concentrate 2115.18 20963.51 Value Cost Value Cost (Rs/lacs) (Rs/T) (Rs/lacs) (Rs/T) A.INPUT MATARIAL COST OWN ORE 958.66 453.73 9470.95 439.55 IUT ORE 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------------------------TOTAL INPUT MATARIAL COST (A) 958.66 453.73 9470.95 439.55 ------------------------------------------------------------------------------------------------------------------------OPERATING MATARIALS -grinding media 129.33 61.21 1275.30 59.19 -pine oil 3.89 1.84 44.44 2.06 -xanthate 0.67 0.32 6.62 0.31 -lime 2.32 1.10 26.85 1.25 -others 7.00 3.31 30.62 1.42 SUB TOTAL 143.21 67.78 1383.82 64.22 STORES 33.42 15.82 183.00 8.49 SPARES(1/3) 16.90 8.00 118.76 5.51 POWER 178.80 84.63 1963.26 91.12 INCENTIVES 4.89 2.32 58.70 2.72 WATER 29.45 13.94 313.85 14.57 ------------------------------------------------------------------------------------------------------------------------Total Variable Cost (B) 406.68 192.48 4021.39 186.63 ------------------------------------------------------------------------------------------------------------------------ B.DIRECT FIXED COST SALRIES & WAGES -operation 25.11 11.88 279.29 12.96 -repairs & maintenance 27.34 12.94 304.15 14.12 SUB TOTAL 52.45 24.82 583.44 27.08

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SPARES (2/3) 33.80 16.00 237.53 11.02 CONTRACTUAL REPAIRS 22.76 12.90 182.52 8.47 CENTRAL SERVICES -salary & wages 8.74 4.14 97.18 4.51 -power 1.13 0.54 15.04 0.70 -stores & spares 5.01 0.00 0. 00 0.00 ------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------ -others 0.00 0.00 0.00 0.00 SUB TOTAL 14.88 7.04 181.86 8.44 GENRAL OVERHEADS -salary & wages 21.78 10.31 238.31 11.06 -power 0.60 0.28 8.96 0.42 -stores & spares 2.07 0.98 26.57 1.23 -others 4.46 2.11 51.35 2.38 SUB TOTAL 28.91 13.69 325.19 15.09 SOCIAL OVERHEADS -salary & wages 4.58 2.17 55.01 2.55 -power 5.84 2.76 73.38 3.41 -stores & spares 2.07 0.98 26.57 1.23 -others 4.46 2.11 51.35 2.38 SUBTOTAL 16.95 8.02 206.31 9.57 DEPRECTION 9.15 4.33 109.84 5.10 ------------------------------------------------------------------------------------------------------------------------Total fixed cost (C) 183.41 86.81 1826.68 84.78 ------------------------------------------------------------------------------------------------------------------------ C. ALLOCATED FIXED COST HO EXPENSES 29.93 14.17 333.88 15.50 INTREST ON C/C & OTHERS 7.64 3.61 82.43 3.83 INTREST ON BONDS(old) 0.00 0.00 31.86 1.48 INTREST ON BONDS(new) 12.12 5.73 133.83 6.21 INTREST ON ICICI DEB 2.31 1.09 53.58 2.49 INTREST ON GOVT.LOAN 0.00 0.00 0.00 0.00 ------------------------------------------------------------------------------------------------------------------------total allocated fixed cost (D) 51.99 24.61 635.58 29.50 ------------------------------------------------------------------------------------------------------------------------total cost (A+B+C+D) 642.08 303.89 6483.65 300.91 -------------------------------------------------------------------------------------------------------

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COST CENTRE: CONCENTRATE -----------------------------------------------------------------------------------------------------Particulars For March 07 upto March 07 ----------------------------------------------------------------------------------------------------------------------ORE MILLED (MT) 211284.00 2154691.00 METAL GRADE (%) 1.07 1.04 METAL IN ORE (MT) 2257.82 22305.79 RECOVERY(%) 93.68 93.98 METAL IN CONCENTRATE(MT) 2115.18 20963.51 CONCENTRATE(25%GRADE) 7478.33 79066.10 ---------------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (Rs/T) (RS/lacs) (Rs/T) ---------------------------------------------------------------------------------------------------------------------- A.INPUT MATARIAL COST OWN ORE 958.66 45323.03 9470.95 45178.25 IUT ORE 0.00 0.00 0.00 0.00 ----------------------------------------------------------------------------------------------------------------------Total input material cost 958.66 45323.03 9470.95 45178.25 ----------------------------------------------------------------------------------------------------------------------OPERATING MATARIALS -grinding media 129.33 6144.15 1275.30 6083.41 -pine oil 3.89 184.05 44.44 211.99 -xanthate 0.67 31.77 6.62 31.59 -lime 2.32 109.76 26.85 128.06 -others 7.00 330.94 30.62 146.06 SUB TOTAL 143.21 6770.67 1383.82 6601.11 STORES 33.42 1580.01 183.00 872.95 SPARES(1/3) 16.90 798.99 118.76 566.52 POWER 178.80 231.26 58.70 280.00 INCENTIVE BONUS 4.89 231.26 58.70 280.00 OTHER 29.45 1392.50 313.85 1497.11 -----------------------------------------------------------------------------------------------------------------Total variable cost (B) 406.68 19226.75 4021.39 19182.81

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B.DIRECT FIXED COST SALARIES & WAGES -operations 25.11 1187.13 279.29 1332.25 -repairs & maintenance 27.34 1292.34 304.15 1450.87 SUB TOTAL 52.45 2479.47 583.44 2783.12 SPARES (2/3) 33.80 1597.98 237.53 1133.05 CONTRACTUAL REPAIRS 22.76 1288.70 182.52 870.64 CENTRAL SERVICES -salary & wages 8.74 413.17 97.18 463.54 -power 1.13 53.57 15.04 71.74 ---------------------------------------------------------------------------------------------------------------------- Value Cost Value Cost (Rs/lacs) (RS/T) (Rs/lacs) (Rs/T) ----------------------------------------------------------------------------------------------------------------------stores & spares 5.01 236.80 69.65 332.24 -others 0.00 0.00 0.00 0.00 SUB TOTAL 14.88 703.54 181.86 867.52 GENERAL OVERHEADS -salary & wages 21.78 1029.80 238.31 1136.77 -power 0.60 28.33 8.96 42.73 -stores & spares 2.07 98.04 26.57 126.76 -others 4.46 210.82 51.35 244.96 SUB TOTAL 28.91 1366.99 325.19 1551.22 SOCIAL OVERHEADS -salary & wages 4.58 216.71 55.01 262.39 -power 5.84 276.00 73.38 350.02 -stores & spares 2.07 98.04 26.57 126.76 others 4.46 210.82 51.35 244.96 SUB TOTAL 16.95 801.57 206.31 984.13 DEPRECIATION 9.15 432.75 109.84 523.96 ----------------------------------------------------------------------------------------------------------------------Total fixed cost (C) 183.41 8670.99 1826.68 8713.63 C.ALLOCATED FIXED COST HO EXPENSES 59.86 2830.02 667.76 3185.34 INTREST ON C/C & OTHERS 15.27 721.93 164.86 786.41 INTREST ON BONDS(old) 0.00 0.00 0.00 0.00 INTREST ON BONDS(new) 24.23 1145.53 267.66 1276.79 INTREST ON ICICI DEB. 4.62 218.42 107.16 511.17

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INTREST ON GOVT. LOAN 0.00 0.00 0.00 0.00 ----------------------------------------------------------------------------------------------------------------------Total allocated fixed cost (D) 103.98 4915.90 1271.16 6063.68 ----------------------------------------------------------------------------------------------------------------------TANSPORTATION (E) 182.69 8637.00 1746.54 8331.34 ----------------------------------------------------------------------------------------------------------------------TOTAL COST (A+B+C+D+E) 1835.42 86773.67 18336.72 87469.71 -----------------------------------------------------------------------------------------------------

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STATUS OF SHARE

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Share Holding pattern of H.C.L

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Share Transfer System : Share transfer requests received by the Company are processed and certificates

dispatched to the buyers within 30 days from the date of receipt as stipulated in Listing

norms of Stock Exchanges.

Distrubtion of Share Holding

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Stock Market Price Data : Monthly high and low quotations of shares traded on The Bombay Stock Exchange

Limited (BSE) during the financial year was as follows :

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FINDINGS

All the section of finance department (1) Follow same procedure [according to the rules of govt].and all their section are linked with each other (2) In each department centralized authority may finally pass for all the orders and payments. (3) In all the finance department Paper work is more so it is better to say that paper work involve must. (4) In finance departments authority may not be delegated to each and every person the work is delegated to only efficient and experienced person . (5) All the work is done as per rules and regulation and every step follow procedures. (6) For every movement of activities they maintain the record so lots of paper work followed here, so proof or evidence of any loop holes in activity easily recognized. (7) Efficiency in work, accuracy in all work done, maintain discipline. (8) On comparing the turn over, profit & loss of the company it is found that the company turn over is good on the year 95-96,04-05,05-06 otherwise the company is in loss. (9)The company internal resources is decrease year after year. (10) The percentage of net profit of first, second, third fourth quarter is by 84.75%,

201.15%, 388.71%,36.82%.

(11) The company makes sales of various items namely Copper cathode, Copper CC rod,

Copper Sulphate, Copper Wire bar, gold, nickel, palladium, selenium, sulphur and

sulphuric acid.

(12) Under costing department cost sheet is prepared for Ore, Overburden, Excavation,

Milling, Concentrate and cost sheet is distributed to mainly director finance, DGM,

Advisor Finance, AGM(finance), GM.

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CONCLUSION

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CONCLUSION

Hindustan copper project [M.C.P] is a big organization. All the work is done very

efficiently and effectively. But some where its inefficiency was observed, Technology

which are used here is not efficient

(1) All the department in finance adopt same type of procedure so it is important that

Some research and development section is to be made by which work is to be done in

fast and effective manner.

(2) Authority for some important work also delegated to inefficient employee and by

which the employees are motivated and emphasized by the superior for best performance

and are rewarded for incentives and promotions.

(3) There are lots of old techniques used in finance department of MCP which

is time consuming and people working by those techniques take more time to do their

work so It is time consuming as well as there maintenance is more and there is also

wastage of money e.g., typewriter is used instead of computer.

(4) The organization has lots of paper work which take lots of extra time and there is

chance of misuse of important papers, documents etc, so there should be reduction in

paper work.

(5) Because it is a govt organization so discipline is not maintained in a proper way. The

organization should be more disciplined.

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(6) On the survey it is clear that the various internal resources and human resources of the

company decrease year after year and the main important resources which is man power

resources also decreases.

(7) On seeing the Profit & loss statement it is found that the loss is more as compare to

profit.

(8) By comparing the monthly high and low quotations of share traded on Bombay stock

exchange limited the price go high on the year August 2005 and low in October 2005.

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SUGGESTION

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SUGGESTION

(1) Time consuming : every activity follow long procedure, and it take more time so

it is important to avoid such types of long procedure and adopt the short cut method.

(2) Money wastage : office and administration require lots of paper and administrative

things, by which the money were waste so it is necessary to adopt new types of methods

and technologies.

(3) Technology : It is important that out dated technology are not used for administrative

purpose.

(4) Jobs have limitation some times employees take more time to do small and same

type of work therefore the employees are also bored to do the same activities all the

time and their also efficiency decreases, and the worker who is efficient in their work

do not work up to the mark. So in this types of situation such types of conditions are

made by which employee enjoy their work and not to be bore.

(5) Because it is a Government organization so employee can not fell any pressure in

regarding with their work, so as result they do not do their work properly, so this types of

situation also avoid.

(6) I the organization such types of environment is made which is not fill with politics

and diplomacy, and it is found that there are lot of unnecessary types of work is done in

the organization so this is also avoid.

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(7) On comparing the last ten year financial reports the loss is more as compare to profit,

so organization take some action on this.

(8) The success of organization depend upon their internal and man power resourses and

these resourses decrease year after year so the organization take some action on this also.

(9) Before delegated the authority to the worker it is important to give some training and

instruction to the worker by which he complete the work in effective manner. And in case

of accounts & cost sheet their should be a advisor or a guide who guide the new or

ineffective worker to whom work is delegated.

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ADVANTAGES & LIMITATION OF PROJECT

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ADVANTAGES & LIMITATION OF PROJECT ADVANTAGES

*. It helped me to increase my knowledge in management field while working within the

organisation.

*. I got the practical knowledge by doing project in the company.

*. The working pattern of the organization is understood.

*. The behavior of colleagues , workers and managers is understood.

*. It helped me to analysis the different departments of the organisation.

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LIMITATION OF THE PROJECT

*. Some times workers refused to corporate properly.

*. The environment of Malanjkhand Copper Project is full with diplomacy & politics.

*. Exact and update information can not be obtained or provided by the employee.

*. Response was not good by the people.

*. Lack of co-operative people in the organization.

*. Some times discussion take extra time, because the discussion was done with the

permission of manager and for this appointment is required which is time consuming.

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BIBLOGROPHY

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BIBLOGRAPHY

♦ Analysing of MCP department

♦ HCL monthly magazines

♦ Tamra Patari Magazines

♦ MCP notes (collection of different data of department)

♦ Websites of MCP

♦ Websites of HCL

0601063 study on finanance department

Business

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