A Project On Cost Analysis 5c184r

A PROJECT REPORT ON COST ANALYSIS IN SURANA TELECOM AND POWER LTD. by PARVATHI DEVI (520875269) Submitted in partial fulfillment of the requirement for the award of the Master of Business istration

Acme College of Information Technology (d to Sikkim Manipal University)

2008-2010

DECLARATION I Parvathi.Devi student of M.B.A (Finance) of Acme College of Information Technology d to Sikkim Manipal University. Hereby declare that the work presented in the project is based on my own research. This project has not been accepted for the award of any degree in any university and to the best of my knowledge and belief contain no material written by another person except where due reference or acknowledgement has been made.

DATE:

PARVATHI DEVI

ACKNOWLEDGEMENTS I take this opportunity to acknowledge, all the people who rendered their valuable advice in bringing the project to function. As part of curriculum at Acme college, under SIKKIM MANIPAL UNIVERSITY Hyderabad the project enables us to enhance our skills, expand our knowledge by applying various theories, concepts and laws to real life scenario which would further prepare us to face the extremely ‘Competitive Corporate World’ in near future. I respectfully express my gratitude Mr.Surendra Bhutoria Chief Finance Officer of Surana Telecom & Power ltd for giving me opportunity to undertake this project work. I express my gratitude to my faculty guide Mr.G.Srinivas Reddy (Finance Lecturer) Acme College, Hyderabad for his unparallel throughout my project I have tried my level best to put my experience and analysis in writing this reports. I am grateful to Surana Telecom & Power Ltd as an Organization and its various employees for helping me to learn and explore many fields.

ABSTRACT The establishment of Costs relating the responsibilities of executives to the requirement of a policy, and the continuous comparison of actual with cost sheet results, either to secure by individual action the objectives of that policy, or to provide a basis for its revision. The project is taken up with the object to study Cost Analysis System in Surana Telecom and Power Pvt Ltd. The project is mainly a study to know about the meaning of the Cost ing, Cost preparation Process and comparing cost provision with actual. The main aim of the study is to know the effectiveness of the current and if any requirements for improvements. It’s also An indication and explanation of the important of the Cost ing technique An overview of the advantages and disadvantages of Costing An introduction to the methods for preparing cost sheet An appreciation of the uses of costs Conclusion is drawn on the basis of analysis of the cost ing. The analysis reveals the company financial position i.e. it’s Expenditure and Revenue generated

TABLE OF CONTENTS

Chapters

Description

Page.No.

Chapter – I

Introduction of the study Scope Objectives Methodology

1-2 3 4 5

Chapter – II

Review Of Literature Introduction of Cost Analysis Definition of Cost Analysis Characteristics of Cost Analysis Advantages of Cost Analysis

6-25 7 8 9 10

Limitations of Cost Analysis Methods & Techniques of Cost Analysis Elements of Cost Analysis

11 12-17 18-25

Company Profile Data Analysis & Interpretation Findings & Conclusion Suggestion & Recommendation Bibliography Appendices

27-46 48-56 58 60 62 64-69

Chapter – III Chapter – IV Chapter – V Chapter – VI Chapter – VII Chapter – VIII

CHAPTER – I

INTRODUCTION

INTRODUCTION

A Cost Analysis is a “technique and process of ascertaining costs”. It is a Terminology of Cost ing, the amount of Expenditure actual notional, incurred on or attributable to a given thing. The important reason behind my study is know the actual importance of cost in a manufacturing unit. The move behind this is to go through every detail which helps in the cost control and Ascertainment of profitability as well as presentation of information for the purpose of managerial decision making The rationale for conducting this study is be efficiently able to carry out the firms objective and yield higher profits by reducing the cost. It aims at analyzing the quantitative data measuring the accomplishments. My project focuses on a cost sheet or cost statement which present the information regarding the various elements of cost incurred in production during a defined period of time. The Cost Sheet is generally prepared at short intervals (weekly or monthly) and presents the total cost as well as cost per unit of products manufactured during the period. The Cost Sheet does not have any statutory format. It is not a part of the ing system. The purpose of Cost Sheet is to present the Element of cost in as much detail as possible. In order to provide comparison, a Cost may have information pertaining to the previous year in an additional column. Alternatively, standard costs may also be provided. Cost Sheet includes only such expenses that are a charge against profit. It shows a breakup of total cost into various elements, sales value of goods and Profit earned or Loss incurred during a period. Expenditure incurred towards servicing of dept, acquisition of assets, payments are not included in the Cost Sheet

SCOPE

The main review is done on the use of Cost ing and its common objective. It always expressed in of quality and money. It is the policy to be followed during the cost period for attainment of specified organization.  Financial and quantitative statement of the action plan.

 Laid down prior to the cost period during which it followed.

 Prepared for specified objective and

 Based on management policy. The types of issue raised in my study are to relate the actual operation and performance of a firm in existences. This system which uses cost for controlling and reduction different activities of business.  Division of organization on function basis into different sections for cost reduction of Surana Telecom and power LTD;

 Preparation of separate cost for each cost centers for planning strategies for innovations and growth of the Company;

 Consolidation of all functional cost to present overall Surana Telecom & power objective

 Comparison of actual level performance against cost. Comparison process is stretched far enough to declare either attainment of objective or basis of revision of plan of action

 Reporting the Variance with proper analysis to provide basis for future.

Objectives

My objective is study the cost analysis in a manufacturing unit is to get insight of the conceptual details of “a cost analysis helps in formulating its pricing policies and prepare estimates” and how much truth does this substantiate. Some of the important objectives are  To ascertain the cost per unit of different products manufactured or services rendered by the undertaking.  To maintained a systematic records of the cost incurred by analyzing and classifying the cost information so that necessary cost data and information is available.  To point out how wastage of time, money, machinery, equipment occurs and to prepare such reports which may be necessary to control such wastage.  For an effective communicating which is the basic essence of organizational aims objective to subunits so as to encourage them to play their part efficiently, My Cost effectively communicate this information to the employees at different level for maximum contribution to companies objective  Coordination holds importance in synchronize the company’s active factors effectively. To coordinate is to harmonies all the objective of a company so as to facilitate its successful working. A. each department works harmonious with the other B. each of them plays a specific role to accomplish an overall objective c. The sequential arrangement of activities of different department is to govern the overlapping of activities and wasting time.  Motivation depends purely on how the workers can get involve mentally and physically to put on their maximum output. An active cost helps the employee to closely relate their personal interest with the organizations plan it acts like a motivation for plan achievement.  Control in a functional cost a thorough discussion is done on the forecasted cost therefore there are a lot of cuts and adjustments to be made to fit in organizational objective. system helps in the extending of variation b/t the actual levels of performance and the forecasted cost.  Approved plan: Master cost sheet is an approved summary of result to be expected from proposed plan of action. It serve as a guide to executives and departmental heads responsible for various objectives To develop an understanding the Surana telecom &Power Ltd in the management point of view in general and manufacturing unit in particular. Ascertaining the major

of cost and its actual implications of the costing process at Surana Telecom & Power Ltd

Methodology: Data collection: Primary data collection from the company records and one to one interaction with the employees of the company Secondary data: Through business magazines literary books journals annual reports of the company and web based recourses Data analysis: Mainly analytical (qualitative) however quantitative tool will be employed as and when required Inferences and observations; Drawn on the basis of analysis done Conclusions and recommendations: To conclude the Project

Chapter -II

REVIEW OF LITERATURE

INTRODUCTION Cost ing is that part of management ing which establishes budget and actual cost of operations, processes, departments or product and the analysis of variances, profitability or social use of funds. Managers use cost ing to decision making to reduce a company's costs and improve its profitability. As a form of management ing, cost ing need not follow standards such as GAAP, because its primary use is for internal managers, rather than external s, and what to compute is instead decided pragmatically. Costs are measured in units of nominal currency by convention. Cost ing can be viewed as translating the Supply chain (the series of events in the production process that, in concert, result in a product) into financial values. Cost ing has long been used to help managers understand the costs of running a business. Modern cost ing originated during the industrial revolution, when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions. Management requires information to look into the future. Moreover, it has to ensure that adequate resources are made available and plans are achieved at the least cost. Formulation of budgets, pricing of new products or investment in new projects, etc are all examples of costing information being an aid to planning. Thus, costing helps management plan the product to be produced in order of priority, quantity of production, fixation of optimum selling price, associated costs and expected profits. Analysis, allocation and apportionment of costs requires considerable amount of clerical work. It involves huge financial burden on the concern.

Definition: Method of ing in which all elements of cost incurred in carrying out an activity or accomplishing a purpose are collected, classified, and recorded. This data is then summarized and analyzed to arrive at a selling price, or to determine where savings are possible. In contrast to financial ing (which considers money as the measure of economic performance) cost ing considers it as the economic factor of production. •

Accumulation, examination, and manipulation of cost data for comparisons and projections.

•

Cost analysis is ing & Auditing and Statistics, Mathematics, & Analysis subjects. “Method of arriving at selling price of an item with reference to another item without performing a cost analysis. It is employed usually where the two items are so similar that price differences between them can be identified and justified”.

FORECASTE:

What will happen probable?

COST CONTROL:

What management will try and make happen i.e. planning

And Control in a Cost, planning only in a forecast.

Need to manage cost: Some costs tend to remain the same even during busy periods, unlike variable costs which rise and fall with volume of work. Over time, the importance of these "fixed costs" has become more important to managers. Examples of fixed costs include the depreciation of plant and equipment, and the cost of departments such as maintenance, tooling, production control, purchasing, quality control, storage and handling, plant supervision and engineering. In the early twentieth century, these costs were of little importance to most businesses. However, in the twenty-first century, these costs are

often more important than the variable cost of a product, and allocating them to a broad range of products can lead to bad decision making. Managers must understand fixed costs in order to make decisions about products and pricing.

For example: A company produced railway coaches and had only one product. To make each coach, the company needed to purchase $60 of raw materials and components, and pay 6 laborers $40 each. Therefore, total variable cost for each coach was $300. Knowing that making a coach required spending $300; managers knew they couldn't sell below that price without losing money on each coach. Any price above $300 became a contribution to the fixed costs of the company. If the fixed costs were, say, $1000 per month for rent, insurance and owner's salary, the company could therefore sell 5 coaches per month for a total of $3000 (priced at $600 each), or 10 coaches for a total of $4500 (priced at $450 each), and make a profit of $500 in both cases.

Characteristics of good costs:

A good Cost Sheet is characterized by the

following:

•

Organization set-up: There should be a gradual and smooth introduction of the system.

•

Promptness: The system should be so designed that the relevant information and data is made available promptly and regularly.

•

Accuracy: The costing system must provide accurate information relating to operations of the organization.

•

Uniformity: The costing system must ensure that the various forms and records used for collection and presentation of cost data is uniformity. Instruction to staff must be clear.

•

Minimal Clerical Work: Paper work is disliked by almost every one and yet it is important. It must be kept to the minimum particularly in case of lower level employees providing manual labor.

•

Periodicity: The system must provide for periodical preparation and presentation of costing results.

•

Reconciliation: The system must ensure that figures in cost records can be easily reconciled with that of financial records. The possibility of installing an integrated ing system must be ensured

Advantages of Cost Analysis: Many of us prepare costs analysis on a personal level: How much income for the month; how much I, am going to spend; and most importantly, is there anything left over? It seems true; however, that many businessmen do not prepare cost sheet their relatively simple lives, when it comes to the much more complex situation of their business, they prefer to let cash inflows and outflows look after themselves. The purpose of this part of the chapter is to demonstrate that cost analysis is useful, informative and communicative. We will see that a cost is a necessity not a Luxury. There is number of advantages to Cost Analysis and Cost ing: •

It reveals profitable and unprofitable activities.

•

It helps in controlling costs with special techniques like standard costing and budgetary control

•

It supplies suitable cost data and other related information for managerial decision making such as introduction of a new product, replacement of machinery with an automatic plant etc

•

It helps in deciding the selling prices, particularly during depression period when prices may have to be fixed below cost

•

It helps in inventory control

•

It helps in the introduction of a cost reduction programmed and finding out new and improved ways to reduce costs

•

Cost audit system which is a part of cost ancy helps in preventing manipulation and frauds and thus reliable cost can be furnished to management

•

A good system of costing affords an independent reliable check on the accuracy of financial s. Reconciliation of results shown by cost s and that by financial s establishes accuracy of both sets of books.

•

Cost s records the time spent by each workers on a job or process. This helps the management in ascertaining the unit cost labor for each activity. The time and job cards indicate the loss caused by idle time. Suitable measures can be taken to minimize the same.

•

Cost ing will enable the management to measures its efficiency and then to maintain and improve it.

Problems or limitation of cost ing Expensive: Analysis, allocation and apportionment of costs requires considerable amount of clerical work. It involves huge financial burden on the concern. To install a good system of Cost ing, some amount of initial expenditure must be incurred, but this expenditure should be treated as capital expenditure.

Unnecessary: It is argued that costing is of recent origin and many concerns have prospered in the past and still prospering without any costing system. Hence, expenditure incurred in installing a costing system would be an unnecessary expenditure. It is to be ed that the atmosphere under which industries are now operating is entirely different from what it was some fifty years ago.

Inapplicable: It is inapplicable to many types of industries. It cannot be applied in case of small business houses and new types of industries that are coming up in recent times. There is no ready-made system of Cost ing applicable to all industries. The system of Cost ing should be modified in such a way as to suit the special requirements of industries.

Unproductive: It is argued that costing system adopted in many concerns has not produced the desired results. Hence it is defective. There is no rigid system of Cost ing applicable to all industries.

Lack of Uniformity: There is a lack of uniform principles and procedures in Cost ing.

Estimation: Cost ing works on a basis of estimates. The does not receive the time or exact cost. An error in estimation may throw up totally different results.

Suitability: Cost data is required for decision making purposes. Thus, a cursory comparison may result in misleading conclusions.

Role of Management: The usefulness of Costing ing is restricted to the ability and willingness of management to take decisions based on information received.

Paper work: it is argued that as the cost system requires the use of number of forms, after some time it becomes stereotyped and degenerates into a matters of forms and rulings.

METHODS AND TECHNIQUES OF COSTING Methods of Costing: Costing methods is a method of costing that is designed to suit the way goods are processed or manufactured or the way services are provided. Each industry will have costing methods with its unique features. However, the basic costing principles relating to analysis, allocation and apportionment will be the same. There are two broad categories of product costing methods, namely Specific Order Costing and Continuous Operation or Process Costing.

1. Specific Order Costing: The institute of Cost and Works ants of India (ICWAI) defines specific order costing as “the basic costing method applicable where the work consists of separate

contracts, jobs or batches, each of which is authorized by a special order or contract”. Thus job costing, contract costing and batch costing come under the category of specific order costing.

(A) Job Costing: Cost unit in job order costing is taken to be a job or work order for which costs are separately collected and computed. A job cost card is prepared for the purpose of cost accumulation. Furniture made, repairs undertaken, printing etc are examples where job costing is used.

(B) Contract Costing: Contract costing is very identical to job costing, except that it is applied to a job which is of relatively long duration and is required to be executed on the site of the client. Contract costing system normally has higher proportion of direct costs. There are frequent problems of cost control on of large scale of the contract. A separate is kept for each contract. Contract costing is normally used in construction.

(C) Batch Costing: This method is applicable where a quantity of identical articles is manufactured as a batch. The procedures of batch costing are very similar to that of job costing. The batch itself would be treated as a job and the ‘batch’ becomes the cost unit. On completion of the batch, the cost per unit is calculated by dividing total batch cost with number of good units produced in the batch. Batch costing is adapted in the engineering component industry, footwear, garments industries etc.

2. Continuous Processing: The ICMA defines continuous processing as “the basic costing method applicable where goods or services results from a sequence of continuous or repetitive operations or processes to which costs are charged before being averaged over the units produced during the period”. The goods or services produced are standardized. It includes process costing including for t products and by products, operating in services costing and unit or output costing.

(A)Process Costing:

This is used in mass production industries manufacturing standardized products in continuous processes of manufacturing. Costs are accumulated for each process or department. For spinning mills, process costing is employed. Accurate records are maintained of number of finished goods and unfinished goods (work in progress), normal and abnormal loss at each process etc. As the processes are in a sequence, the output of one process is charged as input for the next process. Procedures are clearly defined for separating costs in the events of two or more products being simultaneously produced by a particular process. It is applied in Brewing, Oil Refining, and chemical, Textile, Food Processing and many other industries

(B) Unit or Output Costing: It is a costing method where organization produces only single product. Consequently, the whole production process is geared to the one product and is frequently highly mechanized. The object of this method is to ascertain the total cost and the cost per unit of output. Cement, mines, quarries, dairies, bricks etc are example of industries using this method. It is also called Single Costing.

(C) Operating or Service Costing: It is a method of costing of specific services. It is applied to transport undertaking, hotels, hospitals, colleges, power supply companies etc. A particular difficulty in case of operating costing is to define a realistic cost unit that represents a suitable measure of service provided. A composite cost unit such as enger kilometer or patient days is more relevant and hence more commonly adapted.

Multiple costing: It refers to application of more than one costing methods in case of same organization. It is suitable in case of organizations producing a number of unrelated products or components required to be assembled into a final product. It is necessary to ascertain the cost of each component separately. This method is prominently used in toy manufacturing companies, automobile factories, watch factories and other industries requiring large-scale assembly.

Techniques of Costing Techniques of costing refers to the specialized procedures adopted for ascertaining the cost of products or services for certain special purposes under special conditions, and for providing relevant cost data to the management for purpose of cost control, management policy and managerial decision making. The various techniques are stated as under:

1. Historical Costing: It refers to ascertainment of cost after they are actually incurred. It has very limited use, as no control can be ascertained over actual costs. Although it helps periodic comparison, it is similar to a postmortem action akin to financial ing.

2. Marginal Costing: It is technique that distinguishes b/t fixed and variable costs. The ‘marginal’ cost of a product is its variable cost. The fixed costs of the period are written off against total contribution earned in that period, where contribution is the excess of sales realization over marginal cost. Even the inventory is valued only at marginal or variable cost. Marginal Costing technique is used to determine the impact of changes in volume or change in product mix or shut down of a production unit or current profits.

3. Direct Costing: It is a technique where in only the direct costs are charged to operations, processes or products and the indirect costs are written off against profits of the period. Direct costing technique is very similar to marginal costing technique, since most direct costs are variable in the nature. It is a useful tool for decision making.

4. Absorption Costing: It is a technique that takes into the total cost of running an enterprise. It is also known as Total Costing or Full Costing. It is a traditional technique and does not distinguish b/t various kinds of costs, particularly fixed and variable costs. It values inventory also at a total cost. It is useful in preparation of job estimates or quotations.

5. Standard Costing: It is a technique that establishes pre-determined estimates of costs of products and services and then compares them with actual costs as they are incurred. It is very detailed and requires considerable development work before it can be put the greatest benefits is obtained in case of substantial degree of repetitive activity in the manufacturing process. It facilitates formulation of production and pricing policies before the actual start of production.

6. Uniform Costing: Uniform costing refers to the use of the same costing methods, principles and techniques by several organizations to facilitate common control and comparison of stocks. Uniform costing normally does not contain advanced or novel features, but ensures that there are similar costing foundation and reports in all organizations that may belongs to the same groups, industry or trade association. It is not a distinct technique in itself, but only a tool that facilitates comparison.

Cost Concepts 1. Cost: The Institute of Cost & Management ant (ICMA) has defined cost as “the amount of expenditure actual or notional, incurred on or attributable to a specified thing or activity”. It is the amount of resources sacrificed to achieve a specific objective. A cost must be with references to the purpose for which it is used and the conditions under which it is computed. To take decisions, managers wish to know the cost of something. This something is called a Cost Unit.

2. Cost Unit: A cost unit is anything for which a separate measurement of costs is desired. A product, service, department, project or an educational course can all be cost units. Cost units

are chosen not for their own sake but to aid decision-making. Thus, a cost unit is a “quantitative unit or product or service in relation to which costs are ascertained. The cost units may be units of production such as tons of cement produced, or units of services such as consulting man hours, Cost units can be single cost unit such as meters of cloth or composite or compound cost unit such as enger kilometers.

3. Cost Centre: According to ICMA, London, Cost Centre is “a location, persons or items of equipment is respect of which costs may be ascertained and related to cost units for control purposes”. It is simply a method by which costs are gathered together, according to their incidence, usually by means of cost centre codes. It is a smallest element of an organization in respect of which costs are charged and ascertained. Maintenance Department, a Public Relations Officer, a printing machine are all examples of cost center’s. The establishment of cost centers serves two important purposes. Firstly, cost ascertainment made possible by collecting and charging cost to each cost centre. Secondly, cost control is ensured as costs can be more closely looked at and more easily monitored by a responsible official. The setting up of cost centers depends on numerous factors such as organization of the factory, conditions of cost incidence, availability of information system, requirement of the costing system and management policy.

Types of Cost Center’s 1. Production and Service Cost Centre : A production cost centre is directly concerned with production or manufacturing wherein raw material is processed into finished goods. A service cost centre provides service to production centers. A stores department or transport department are example of service cost centre. A mixed cost centre is engaged both in production and service activity. A carpentry shop making moulds and also taking up repairs is an example of mixed cost centre.

2. Personal and Impersonal Cost Centre: A personal cost centre consists of a person or group of persons such as sales representatives, customer etc. Impersonal cost centre consists of a location, machine or department.

3. Operation and Process cost Centre: An operation cost centre consists of machines and or persons working on a process consisting of continuous stream of operations.

ELEMENTS OF COSTS Elements of cost refer to the essential components or parts of the total cost of a cost unit. Total cost can be classified on the basis of traceability into Direct Costs and Indirect Costs. Costs can also classify based on their physical characteristics into Material, Labour and Overheads. The various components of Total cost can be stated as Element of cost. Let us understand each of the elements of cost in details

ELEMENTS OF COST

Material

Direct Indirect

Labour

Direct

Other Expenses

Indirect Direct

Indirect

Overheads Factory Overheads &Distribution Overheads

Office Overheads

Selling

MATERIAL COST DIRECT MATERIAL: Direct Material is the material that can be measures and charged directly to the Cost of the product. It is that which can be conveniently identified with and allocated to cost units. Direct materials generally become a part of the finished product. For example, cotton used in a spinning mill is a direct material. Primary packing material such as cartons is also part of direct material. Expenses incurred towards purchase such as carriage inwards, import duty, etc are also added to the cost of “Direct Material”.

INDIRECT MATERIAL: Indirect Material is that

which cannot be conveniently identified with individual cost

units. They are required to be distributed amongst multiple cost units. Such material does not form a part of a finished product. In a spinning mill, engineering department spares, maintenance spares, lubricating oils, greases, ring travelers etc. some material, although forming part of the product, may not be treated as direct materials if they are used in measuring the same. For example, the thread used in stitching of dress material will be treated as indirect material.

LABOUR COST DIRECT LABOUR: Direct Labour is that labour which is used for manufacture of specific article, process; job etc. Cost consists of wages paid to workers directly engaged in converting raw materials into finished products. These wages can be conveniently identified with a particular product, job or process. However, even such expenses can be considered as “direct labour” if they are exclusively engaged for a particular products, process or order.

INDIRECT LABOUR: Indirect Labour is that Labour that cannot be conveniently identified with and allocated to a specific product, process, job or order. It is not directly engaged in productive operations. Indirect labour includes labour engaged in store keeping, material handling, maintenance, clerical activities etc. Indirect labour includes labour that is directly

identifiable with the finished product, but the cost is too small to merit separate measurement. For example, wages paid to trainees is taken as indirect labour.

OTHER EXPENSES All costs other than material and labour are termed as expenses. DIRECT EXPENSES: Direct expenses, also known as ‘chargeable expenses’, includes all such expenditure other that expenses on direct material and labour that can be directly identified with a cost unit. Examples of direct expenses are Architect or Surveyor’s fee, cost of drawing and patterns, Royalty, Repairs and maintenance of plan obtained on hire etc.

INDIRECT EXPENSES: Indirect Expenses are also called Overheads. They are also referred to as “On Costs”. They include indirect material, indirect labour, and other expenses, which cannot be directly charged to specific cost units. The overheads can be divided into three groups namely, (1) Factory overheads (2) istrative overheads and (3) Selling and Distribution overheads.

OVER HEADS FACTORY OVER HEADS: Factory overheads or Factory expenses includes all indirect expenses, which are connected with the manufacture of a product. When they allocate to different cost units they are referred to as Factory ‘On Cost’ or work ‘On Cost’. Examples of factory overheads are salary of factory manager, supervisors’ etc. rents, rates and insurance of factory building, power, factory lighting and heating, drawing office expenses, depreciation of plant and machinery, expenses incurred on equipments etc.

ITRATIVE EXPENSES: istrative expenses or overheads include all indirect expenses relating to istration and management of an enterprise. They are also called as Office

Overheads or Office on Costs. They include expenses incurred towards formulation of policies, planning and controlling the functions and motivating the personnel of the organization. Examples of istrative expenses are general office stationery, postage, telephone and telegram expenses, remuneration of managing directors, general managers, bank charges, legal expenses and audit fees etc.

SELLING AND DISTRIBUTION OVER HEADS: Selling and Distribution overheads are indirect expenses connected with marketing and sales. Selling expenses consist of expenses incurred in security and retaining customers. They include advertising, salaries and commission of sales manager, salesmen training Expenses cost of samples, catalogues, price lists, exhibition and demonstration expenses, market research expenses and expenses incurred on entertaining customers. Distribution expenses are expenses incurred in ensuring that the products are available at all potential points of sales. They include expenses on handling the products from the time they are placed in the ware house until they reach their destination. Examples of distribution overheads are cost of ware housing, packing and loading charges, freight outwards, damages in transit etc.

ELEMENTS OF COST: A cost is composed of three elements i.e. material, labour and expense. Each of these elements may be direct or indirect.

DIRECT COST

INDIRECT COST

Direct material

Indirect material

Direct labour

Indirect labour

Direct expenses

Indirect expenses

By grouping the above elements of cost, the following divisions are obtained:

1. PRIME COST = Direct Material + Direct Labour + Direct Expenses 2. WORK COST (FACTORY) = Prime Cost + Works or Factory Overheads 3. COST OF PRODUCTION = Works Cost + istrative Overheads 4. TOTAL COST OR COST OF SALES = Cost of Production+ Selling & Distribution Overheads.

COST SHEET Cost Sheet of ……………..for the period ended………….. Particulars

Rs.

Direct materials consumed Opening stock of raw materials ADD: Purchase of raw materials Carriage on purchases LESS: Closing stock of raw materials Direct Wages Direct expenses PRIME COST ADD: Factory Overheads LESS: Sale of Scrap ADD: Work in Progress(Beginning) LESS: Work in Progress(closing) WORKSCOST or FACTORY COST ADD: istrative Overheads COST OF PRODUCTIONOF GOODS SOLD ADD: Opening stock of finished goods LESS: goods

Closing

stock of

finished

XXXX XXXX XXXX XXXX XXXX

Rs.

XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

Cost per unit Rs.

Xx Xx Xx Xx

Xx Xx

COST OF GOODS SOLD ADD: Selling & Distribution Overhead COST OF SALES or TOTAL COST NET PROFIT SALES

XXXX XXXX XXXX XXXX XXXX

Xx Xx Xx Xx

OTHER TECHNIQUES OF COSTING Standard Cost ing In modern cost ing, the concept of recording historical costs was taken further, by allocating the company's fixed costs over a given period of time to the items produced during that period, and recording the result as the total cost of production. This allowed the full cost of products that were not sold in the period they were produced to be recorded in inventory using a variety of complex ing methods, which was consistent with the principles of GAAP (Generally Accepted ing Principles). It also essentially enabled managers to ignore the fixed costs, and look at the results of each period in relation to the "standard cost" for any given product.

For example:

if the railway coach company normally produced 40 coaches per

month, and the fixed costs were still $1000/month, then each coach could be said to incur an overhead of $25 ($1000/40). Adding this to the variable costs of $300 per coach produced a full cost of $325 per coach. This method tended to slightly distort the resulting unit cost, but in mass-production industries that made one product line, and where the fixed costs were relatively low, the distortion was very minor.

For example:

if the railway coach company made 100 coaches one month, then the

unit cost would become $310 per coach ($300 + ($1000/100)). If the next month the company made 50 coaches, then the unit cost = $320 per coach ($300 + ($1000/50)), a relatively minor difference.

An important part of standard cost ing is a variance analysis which breaks down the variation between actual cost and standard costs into various components (volume variation, material cost variation, labor cost variation, etc.) so managers can understand why costs were different from what was planned and take appropriate action to correct the situation.

Weaknesses of Standard Cost ing for Management Decision Making As time went on, standard cost ing lost its usefulness for management decision making due to a variety of reasons: •

The practice of paying workers on a 'set-piece' basis changed in favor of paying on an hourly rate.

•

Modern companies tend to have relatively low truly variable costs (primarily raw material, commissions or casual workers) and very high fixed costs (worker salaries, engineering costs, quality control, etc.).

•

Equipment has become more complex and specialized and may be a very significant proportion of total costs.

•

Changes in the level of full cost inventory create swings in profitability that is difficult to explain or understand. An increase in inventory can "absorb" costs of production and increase profits, while a decrease in inventory level will decrease profits.

•

Organizations with a wide range of products or services have processes which are common to several finished items, making cost allocation irrelevant or misleading.

As a result of the above, using standard cost ing to analyze management decisions can distort the unit cost figures in ways that can lead managers to make decisions that do not reduce costs or maximize profits. For this reason, managers often use the "direct costs" and "indirect costs" to replace the standard costing, to better reflect the way allocation of overhead is actually calculated. Indirect costs (often large) are usually allocated in proportion to labor cost, other direct costs, or some physical resource utilization.

For example: If the railway coach company now paid its workforce a fixed monthly rate of $8,000 (total) and its other fixed costs had risen to $2,600/month, the total fixed costs would then be $10,600/month. The unit cost to make 40 coaches per month would still be $325 per coach ($60 material + ($10,600/40)), but producing 100 coaches would result in a unit cost of $166 per coach ($60 + ($10, 600/100)), provided the company had the capacity to increase production to that level.

Managers using the standard cost for 40 coaches per month would likely reject an order for 100 coaches (to be produced in one month) if the selling price was only $300 per unit, seeing that it would result in a loss of $25 per unit. If they analyzed the fixed vs. variable cost distinction, they would see clearly that filling this order would result in a contribution to fixed costs of $240 per coach ($300 selling price less $60 materials) and would result in a net profit for the month of $13,400 (($240 x 100) - 10,600).

Activity-based costing Activity-based costing (ABC) is a system for asg costs to products based on the activities they require. In this case, activities are those regular actions performed inside a company. "Talking with customer regarding invoice questions" is an example of an activity performed inside most companies. ants assign 100% of each employee's time to the different activities performed inside a company (many will use surveys to have the workers themselves assign their time to the different activities). The ant then can determine the total cost spent on each activity by summing up the percentage of each worker's salary spent on that activity.

A company can use the resulting activity cost data to determine where to focus their operational improvement efforts. For example, a job based manufacturer may find that a high percentage of their workers are spending their time trying to figure out a hastily written customer order. Via ABC, the ants now have a currency amount that will be associated with the activity of "Researching Customer Work Order Specifications". Senior management can now decide how much focus or money to budget for the resolutions of this process deficiency. Activity-based management includes (but is not restricted to) the use of activity-based costing to manage a business.

CHAPTER – III

COMPANY PROFILE

SURANA TELECOM AND POWER LIMITED 1 .BUSINESS OF THE COMPANY: The company currently operates in two main business segments, telecommunication and Power sector. The company has off late forayed in the infrastructure and Non Conventional Energy sector. The company is all set to venture into the Solar Photo voltaic (SPV) industry by manufacturing of SPV Modules. The company has also made a strategic investment in its t venture Company M/s. Surana Ventures Ltd

1.1 TELECOM DIVISION: The Company Telephone Cables division mainly comprises of manufacture of Jelly Filled Telephone Cables and optical Fiber cables in addition to the manufacture of ting kits and assembling of CDMA phones.

1.1

A. Jelly Filled Telephone Cables

One of the core areas of the company’s business is manufacture of jelly Filled Telephone Cables. The company started this division in the year 1994-95 and has manufacturing facilities at Hyderabad & Goa. The company manufactures cable from the range of 5 pairs to 800 pairs with a total production capacity of 2.9 million CKM. The latest technology and testing facilities have let to the units being recognized and approved by the BSNL, MTNL, and Indian Railways (IR) and Airtel

The demand for cable is expected to decrease in future. Mitigating this to some extend is lower incidents of sales tax and income tax, low component of depreciation on its plans in Goa and low marginal financial cost to the company. Therefore, the company is continuously shifting its focus on other divisions.

1.1

B. Optical Fiber Cables

Keeping pace with the change in technology, the company started manufacturing of Optical Fiber Cables in the year 1995. A sophisticated plant equipped with the state -of-the-art equipment from ROSENDAHL-KOBELKO helps the division produce 6000 route kilometers of pairs 6, 12, 24 fiber optic cables and accessories such as branch closures, optical fiber termination boxes and tool kits.

With the present trend of rapid technological up gradation in the Telecommunication Sectors, communication network. In order to meet this new challenge, in the year 2001 under backward Integration Plan, the company established its manufacturing facility for

Optical Fiber (which is the main raw material for manufacture of Optical Fiber Cables) at Hyderabad with an annual capacity of 2.5 lacks km initially, with Optical Fiber Drawing Towers equipment from KOBELCO of Japan.

1.1 C.HEAT SHRIKABLE CABLE TING KITS DIVISION Extensive R & D and technological integral has led to this unit becoming entirely selfsufficient today. An annual production capacity of 6,00000 kits. Equipped with the most modern and sophisticated plant supplied by German centers of excellence, the company has successful in totally indigenizing the manufacturing process.

1.1 D. CDMA TELEPHONES The company has also entered into assembling and marketing with, LG Electronics of Korea and Huawei of China for CDMA Fixed Wireless Telephone and WLL telephones. During the year 2006-07, the company has executed orders worth 13 crores. Though the market for CDMA phones is growing rapidly, the Company is not aggressively pursuing the same as the margins are low.

1.2 POWER DIVISION: To cope with the situation of declining JFTC demand, and in view of the high demand for the Power Cables in the market and availability of required resources coupled with optimal utilization of existing facilities, the company restructured a part of its JFTC plant to manufacture power cables, which in the long run, will help in increase in the revenues of the Company?

1.3 INFRASTRUCTURE DIVISION: Anticipating the potential in the infrastructure business, the Company started investing its surplus funds in IT infrastructure and leased the same to prominent IT Companies. The company has presently initialed projects to build up IT/ITES facilities and Hardware Infrastructure in various parts of the country.

1.4 NON CONVENTIONAL ENERGY DIVISION:

With the growing concern over Global Warming and fast depletion of fossil fuels, worldwide the importance of generating power from non conventional energy resources such as Wind, Solar, etc, is being recognized. Recently your Company has made a foray into the non-conventional energy sector with a wind power project with an initial capacity of 1.25 MW at kapatgudda, Karnataka State. The project was commissioned on 30.03.07. The Company is also eligible for carbon credit for this project.

1.5 SOLAR PHOTO VOLTAIC Taking a step further in the field of Non Conventional energy resources, your Company has ventured into Solar Photovoltaic (SPV) Sector by establishing SPV Modules manufacturing Plant (a 100% EOU) at Cherlapally, Hyderabad with an installed capacity of 12 MW. Photovoltaic is the best known as a method for generating solar power by using solar cells packaged in photovoltaic modules, often electrically connected in multiples as solar photovoltaic arrays to convert energy from the sun into electricity. To explain the photovoltaic solar more simply, photons from sunlight knock electrons into a higher state of energy from the sun, creating electricity. The term photovoltaic denotes the unbiased operating mode of a photodiode in which current through the device is entirely due to the transducer light energy. Virtually all photovoltaic devices are some type of photodiode.

2. INDUSTRY ANALYSIS 2.1 A. Jelly Filled Telecom Cables: JFTC demand has suffered as a result of the increasing deployment of wireless networks and popularity of mobile services and the decline in the rollout of and demand for wire line services. It is expected that the business scenario for JFTC producers, battling with huge unused capacities (over 90 % of the industry capacity is lying idle) and weak demand, to continue to remain unfavorable. Cumulative JFTC demand during 2005-06 to 2009-10 is forecast to be at around 560 lack km (as against 1660 lack km during the period 2000-01 to 2004-05) which translates into an average demand of 112 lack km annually JFTC demand in each of the years during this period would primarily depend on the order flow from BSNL, the largest buyer of JFTC, and rollout plans of private operators such as Reliance Infocomm and Bharti Tele-Ventures Limited.

2.1 B. Optical Fiber Cables: The year 2007 experience an impressive revival in global demand for optical fibers. Developed and emerging economies had encouraging announcements on infrastructure development projects. There are new and sustainable demand drivers on the anvil and there is wave of activity to develop new products to address applications as fiber comes closer to the subscriber. The increase in emerging-market backbone deployments has resulted from deregulation or “liberalizing” market developments, investment in new infrastructure to compete with incumbents, and deployments in t developing economies by utilities that have extensive rights-of-way. The demand of the fiber optic cables by Indian Private Telecom Incumbents, Cellular Industry, CATV Industry, MSOs and others have sured that of the Government incumbents like BSNL, MTNL and Railtel, which were traditionally the largest buyers of fiber optic cables in India. The Indian Government as a buyer of Fiber Optic Cables through the Telecom Incumbents & Public Sector Undertaking such as the Oil and Gas Sector, Power Sector, etc. cumulatively constituted about 25% of the total purchases of Fiber Optic Cables in India in FY 2007-08. The Private Telecom Operators constituted about 34%. There has been a country wide renewal in demand from the Cellular Industry, with new and expanded networks being laid to cater to the booming subscriber base. There is also an increasing adaptation of fiber-base networks by the Cable TV Segment, MultiService Operators (MSOs) and e-Governance State Initiatives. This set of buyers had a cumulative purchase of about 1.2 million-km of Optical Fibers, which constituted about 41% of India’s purchases of Fiber Optic Cables in India in FY 2007-08

2.2 POWER CABLES: Given the strong growth drivers, the industry is expected to grow at a CAGR of 20-25% over the next few years. The size of the industry is expected to @ Rs 15-20bn p.a. and touch around Rs 150bn by FY2012 from the current Rs 50bn. Most of the business is expected to flow to existing players, especially the largest ones, because approvals and references play a very important role in obtaining orders and these take a long period (around 3-5 years) to be in place. Hence in spite of low Capex requirement (Sales to Capex ratio of around 4x), supply to some extent will be constrained. The key

experience, execution skills and strong management bandwidth in of streamlining capacity expansion plans to sustain the accelerated growth rates. Most of the players witnessed a poor performance over the past few years with poor demand from the Power Sectors, a sluggish economy and declining performance of the Telecom cable business. However, there has been a sharp swing in the performance from the previous year with a healthy demand scenario, especially from the Power sector, resulting in improving utilization levels and a sharp improvement in margins. With a strong demand expected to flow over the next few years, most of the players are ramping up operations by aggressively adding capacities. The product mix is also witnessing a Change with focus on HT Cables. With cost rationalization, higher operating leverage and improved product mix, the margins of the major players are expected to stabilize at higher levels of around 14-16%. Thus a strong demand potential, healthy growth in revenues and positive outlook on profitability drives creates a bullish view on the sectors.

2.3 Infrastructure: The Indian economy continues to surge ahead. The strong economic growth has augured well for Indian real estate market. Almost 80% of the real estate development is IT Parks & residential space and the rest comprises of offices, hotels, malls and entertainment avenues. Technology sector and the outsourcing story coupled with the demographic shift Characterized by rising disposable incomes and increased consumer spending has changed the face of commercial real estate market in India. It has been estimated that there is a demand for approximately 75-85mn .sq .ft of IT space over the next 5 years. The housing boom, despite firming up of interest rates on housing loans, continued its fourth successive year of price rise. 2007-08 witnessed a sharp price increase, with price rises ranging from 20-505 depending upon cities and locations within the cities. India possesses the elements of very strong demand growth on the housing market in the coming decades. In a very conservative scenario in which the average household size remains constant at the present-day level, the backlog of demand cannot be unwound and no shift in quality take place, each year some 4.7 million housing units would have to be completed up to 2030. This figure is based on additional demand of roughly 2.7 million housing units and annual replacement demand of roughly 2 million dwellings.

2.4 NON CONVENTIONAL ENERGY (Wind Power): India consumes about 3.7% of the world’s commercial energy and is ranked as the fifth largest consumer of energy in the world in of energy demanded this being despite having one of the lowest per capita energy consumption in the world. Continued economic development and increasing population are pushing up the demand for energy at a higher rate than additions in generation capacity. India’s incremental energy demand for the next decade is projected to be among the highest in the world, spurred by sustained economic growth, rise in income levels and increased availability of goods and services. With a gross domestic product (GDP) growth target of over 8.0% set for the next few years, the energy demanded is expected to grow over 5.0% annually. It has been estimated that to the government’s GDP growth targets, the electricity sector alone will have to increase supply by a minimum of 10-15% annually. With the rising price of fossil fuels and increasing environmental concerns, renewable energy, particularly wind power, seems to be back in favour. The major’s benefit of wind energy is that it is renewable unlike fossil fuels such as coal and oil. Secondly, it is a clean energy source so there are no emissions of carbon dioxide, surplus dioxide and other pollutants

2.5 SOLAR PHOTO VOLTAIC: Photo voltaic (PV) is the field of technology and research related to the application of Solar cells for energy by converting sunlight directly into electricity. Due to the growing need for solar energy, the manufacture of solar cells and photovoltaic arrays has expanded dramatically in recent years. Photovoltaic production has been doubling every two years, increasing by an average of 485 each year since 2002, marketing it the world’s faster-growing energy technology. At the end of 2007, according to preliminary data, cumulative global production was 12400 megawatt. Roughly 90% of this generating capacity consists of grid-tied electrical systems. Such installations may be ground-mounted or built into the roof or walls of a building, known as Building Integration Photovoltaic or BIVP for short. Although the selling price of modules is still too high to compete with grid electricity in most places financial incentives, such as preferential feed-in tariffs for solar-generated electricity and net metering, have ed solar PV installations in many counties

including , Japan, and the United States, which comprises the potential export market for the Company.

3. RISK ANALYSIS & MITIGATION 3.1 Business Risk The state of Indian economy and the development in infrastructure, power and industrial projects and expansions have a direct bearing on the performance of the Company these sectors are expected to grow and are expected to drive the demand for the Company’s products also, however, an adverse development in these sectors can have negative impact on Company’s performance and its financials. The instability in the raw material prices especially of metals like Copper and Aluminum being used in the manufacture of cables can also have an adverse impact on the performance of the Company.

3.2 Technology Risk The Company keeps track of the latest trends in the cable industry globally. The Company has an in-built quality assurance system whereby the product is tested at every stage for its quality and technical accuracy. Management of the Company is giving Quality Assurance and Research its highest priority. Continuous improvements in the existing products and enhancement of product offerings will enable the company to emerge as a reliable, cost competitive and quality provider of complete cable solutions.

3.3 Financial risk Company’s investment from time to time is made after due analysis and study. The Company has adequate system to control financial risks. Company has adequate system and control to monitor adequate inventory levels so as to reduce the cost of capital and unpredicted fluctuations in the prices of inventory.

3.4 Human Resources Human resources is the most valuable asset of the Company as it is the ultimate key to the success of any organization and the Company gives due importance to maintain cordial employer-employee relations. The Company is committed to foster a high

performance environment, which characterizes the organizational climate that delivers that business strategy. The company has low labour turnover and has adequate system to reward and recognize the employee contribution towards the growth of the company.

4. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY The Company has adequate Internal Control systems and producers with regard to purchase of stores, Raw Material including components, plant and machinery, equipment, sale of goods and other assets. The Company has clearly defined roles and responsibilities for all managerial positions and all operating parameters are monitored and controlled. The company has an internal audit system commensurate with its size and nature of business M/s Luharuka & Associates, a firm of chartered ants, are acting as Internal Auditors of the Company. Periodic reports of Internal Auditors are reviewed in the meeting of the Audit Committee of the Board. Compliance with laws and regulations is also ensured and confirmed by the Internal Auditors of the Company. Standard operating procedures and guidelines are issued from time to time to best practice for internal control.

5. BUSINESS OUTLOOK 5.1 A. Jelly Filled Cables Division: The demand for cable is expected to decrease in Future. Mitigating this to some extent is lower incidence of sales tax and income tax, low component of depreciation on the plans in Goa and low marginal financial cost to the Company. The Company is gradually reducing dependence on jelly filled dabbles and is shifting its focus on other divisions.

5.1 B Optical Fiber Cables: During the current year this business has been adversely affected due to deferment of buying program of PSU telecom majors such as BSNL and MTNL. However, the Company retains a positive outlook on this business and look forward to increase business opportunities in the new markets.

5.2 Power Cables: In view of the anticipated investments in infrastructure, power railways and industrial sector, it is expected that the demand for the Company’s power cables will grow rapidly. The Company has already received several orders for LT Power cables and has been constantly maintaining the positions b/w L_1 L_3 in tenders floated by various Electricity boards across the country. It is expected that the turnover of the company and its profitability will increase substantially during the next financial year if the development taking place in the infrastructure, power and industrial sector, continues to grow at the current pace.

5.3 Infrastructure The Company has acquired several pockets of land in SEZ, IT Parks and Hardware Parks in various places in India where the Company will build IT/ITES Infrastructure. The Company has started the preliminary work for all the projects as detailed in the New Project Initiatives segmentation of the Directions report and the construction work will soon commence.

5.4 Wind Power: The Wind Power project with the present capacity of 1.25 MW will continue to contribute a steady revenue of about a crore annually. The Company has entered into a Power purchase Agreement with Gulbarga Electricity Supply Company for sale of Power for 20 years.

5.4 Solar Photovoltaic: To start with the Company is all set to commence the production of SPV Modules at its 100% EOU plant at Cherlapally, Hyderabad. The Company through its JV Company, M/s Surana Ventures Limited shall take a step further into the Solar Photo voltaic industry wherein the company is planning to establish facilities for manufacturing of SPV Modules, Cells and Wafers at its facility at Fab City SEZ, Hyderabad. The Commercial production of the same with an initial capacity of 40MW is expected to

commence by Nov/Dec08. Thereafter, the Company shall also venture into the manufacture of SPV Cells.

7.

FINANCIAL

PERFORMANCE

&

OPERATIONAL

PERFORMANCE 7.1 Financial Performance: Capital Structure: The Equity Share capital of the Company as on 31st March 2009 is Rs 20804400/comprising of 104022000 Equity Share of Rs 5/- each fully paid.

Reserves and Surplus: The Reserves and Surplus of the Company currently stands at Rs 58.89 Crore in the previous year.

Fixed Assets: During the year company has added Fixed Assets amounting to Rs252.39 Lakhs.

Inventories: Inventories as on 31st March, 2010 amounted to Rs 1359.26 Lacks in the previous year.

Sundry Debtors: Sundry Debtors amounted to Rs 1505.30 lakhs as on 31 st March, 2010 as against Rs 948.12 lakhs in the previous year. These Debtors are considered good and realizable.

Cash and Bank Balances: Cash and Bank balances with Scheduled Banks as well as in hand amounting to Rs 450.23 lakhs include amounts deposited with banks as Security and margin Money Deposit.

Loans and Advances: The Loans and Advance’s of amounts to Rs 915.86 Lakhs.

Current Liabilities: Sundry Creditors represent the amount payable to vendors for supply of goods. Advances received from Customers denote monies received for the delivery of future services.

7.2 Operational Performance: During the year 2009-10, the turnover of the Company was Rs 6722.50 Lakhs as compared to Rs 8689.03 Lakhs in the previous year. Other Incomes as on 31st March, 2010 was Rs 601.76 Lakhs as compared to Rs 572.96 Lakhs in the previous year.

Expenditure: During the year company incurred expenses amounting to Rs 1173.64 Lakhs as compared to Rs 1020.52 Lakhs in the previous.

Depreciation: The Company has provided a sum of Rs 220.32 Lakhs towards depreciation for the year as against Rs235.65 Lakhs in the previous year.

Provision for Tax: The Company has provided a sum of Rs 135.00 Lakhs as current Tax, Rs6.63 Lakhs as Deferred Tax, and Rs5.25 Lakhs as fringe Benefit Tax for the current year.

Net Profit: The Net Profit of the Company after tax is Rs919.48Lakhs as against Rs 817.88 Lakhs in the previous year.

Earnings per Share: Basic Earnings per Share for the year ended 31.03.2010is Rs4.07 for face value of Rs 5/- as against Rs 3.62 per share for the year ended 31.03.2009

HUMAN

RESOURCES

DEVELOPMENT

AND

INDUSTRAIL

RELATIONS: The company believes that the quality of its employees is the key to its success in the long run and is committed to provide necessary human resource development and training opportunities to equip them with skills, which would enable them to adapt to contemporary technological advancements. The Company is also maintaining a residential colony for its employees. Industrial Relations during the year continues to be cordial and the Company is committed to maintain good industrial relations through negotiations, meetings etc. As on 31st March 2008, the company has a total strength of 119 employees.

BOARD OF DIRECTORS G. Mangilal Surana

- Chairman

O. Swaminatha Reddy

- Director

R. Surrender Reddy

- Director

S.R Vijayakar

- Director

Dr. R.N Sreenath

- Director

Narender Surana

- Managing Director

Devendra Surana

- Director

S.Balasubramanian

- Whole time Director

STATUTORY COMMITTEES AUDIT COMMITTEE O. Swaminatha Reddy

- Chairman

G. Mangilal Surana

- Member

R. Surender Reddy

- Member

S.R Vijayakar

- Member

SHARE HOLDERS GRIEVANCE COMMITTEE G. Mangilal Surana

- Chairman

Narender Surana

- Member

Devendra Surana

- Member

V.P CORPORATE AFFAIRS & COMPANY SECRETARY P.Rajesh Kumar Jain

BANKERS State Bank of India Development credit Bank Limited Corporation Bank HDFC Bank Limited

STATUTORY AUDITORS Sekhar & Company Chartered ant 133/4, R.P Road, Secunderabad-500003.

INTERNAL AUDITORS Luharuka & Associates Chartered ants 5-4-187/3&4, Soham Mansion 2nd Floor, Above Bank of Baroda M G Road, Secunderabad-500003.

DIRECTOR’S RESPOSIBILITY Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility statement, it is hereby confirmed: (1) That in the preparation of the s for the financial year ended 31st March, 2008; the applicable ing standards have been followed along with proper explanations relating to material departures; (2) That the Directors have such ing policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of the financial year and of the Profit or Loss of the Company for the year under review; (3) That the Directors have taken proper and sufficient care for maintenance of adequate ing records in accordance with the provision of the Companies Act, 1956 for Safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (4)That the Directors have prepared the s for the financial year ended 31 st March, 2008 on a ‘going concern’ basis.

SIGNIFICANT ING POLICIES A. Basis of Preparation of Financial Statements The financial statements are prepared under the Historical cost convention with the generally accepted ing principles in India and the provisions of the Companies Act, 1956.

B. use of Estimates The Preparation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference b/t the actual results and estimates are recognized in the period in which the results are known materialized.

C. Own Fixed Assets Fixed Assets are stated are at cost net of modvat/ cenvat /value added Tax, less accumulated depreciation and impairment loss, if any. Any costs, including financial costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized.

D. Leased Assets paid on Leased Assets is amortized over the lease period and annual lease rentals are charged to Profit and Loss in the year it accrues.

E. Depreciation Depreciation is provided on written down value methods, except for Wind Power Plant for which Straight Line Method is followed, at the rate and in the manner prescribed in schedule XIV to the Companies Act, 1956.

F. Impairment of Assets An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior ing period is reversed if there has been a change in the estimate of recoverable amount.

G. Investments Current investments are carried at the lower of cost and quoted/fair value, computed category wise. Long Term Investment is stated at cost. Provision for diminution in the value of long-term investment is made only if such decline is other than temporary in the opinion of the management.

H. inventories Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out

basis. Semi fix shed goods are valued at cost or net realizable value whichever is low. Finished goods are valued at cost including excise duty payable or net realizable value whichever is low. Cost includes direct Material, Labour cost and appropriate overheads.

I. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rate, prevailing on the date of transaction or at the exchange rates under the related forward exchange contracts. Profit/Loss on outstanding Foreign Currency has been ed for at the exchange rates, prevailing at the yearend rates as per FEDAI/RBI.

J. Employee Retirement /Terminal Benefits. The employees of the Company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The paid there on is charged to Profit and Loss . Leave of best management estimates on actual entitlement of eligible employees at the end of the year.

K. Provision Continent Liabilities and Contingent Assets Provision involving substantial degree of estimation in measurement is recognized when past events and it is probable that there will be an outflow of resources. Contingent Liabilities Which are not recognized are disclosed in notes? Contingent assets are neither recognized nor disclosed in Statements.

L. Turnover Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net), excise duty. Inter-Unit sales are excluded in the Main Profit and Loss .

M. Revenue Recognition in case of real Estate Transactions. Revenue in case of real estate transactions is made on the basis of concluded on contracts for sales and purchases.

N. Segment Reporting Company’s operating Business, organized & Managed unit wise, according to the nature of the products and service provided, are recognized in Segments representing one or more strategic business units that offer products or services of different nature and to different Markets. Company’s operations could not be analyzed under geographical segments in considering the guiding factors as per ing Standard-17 (AS-17) issued by the Institute of Chartered ants of India.

O. provision for Taxation Provision is made for Income Tax, estimated to arise on the results the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, b/t the ing & taxable profits, is ed for on the liability methods, at the current rate of Tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

P. Excise and Customs Duty Excise and Customs Duty are ed on accrual basis. CENVAT credit is ed by crediting the amount to cost of purchases on receipt of goods and is utilized on dispatch of material by debiting excise duty . .

Q. Prior Period Expenses/Income Prior period items, if material are separately disclosed in Profit & Loss together with the nature and amount. Extraordinary items & changes in Policies having material impact on the financial affairs of the Company are disclosed.

R. Sundry debtors, Loans and Advances Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable.

S. Earnings per Share The Company reports basis and diluted earnings per share in accordance with ing Standard-20 (AS-20) issued by the Institute of Chartered ants of India. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net Profit or Loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are antidilutive.

NOTES ON S (A). Share Warrants During the year the Company has issued 3,395600 optionally convertible share warrants at the conversion rate of 31 per share. The application money received is shown under the head “share warrants pending allotment” in the Balance Sheet. The warrants are to be converted in 18 months from the date of issue. None of the warrant holders have opted for conversion as on the date of Balance sheet. The proceeds of the warrants have been utilized for setting of new Aluminum Plant as a part of backward integration.

(B). Secured Loans Working Capital limited is secured by Hypothecation of stocks, debtors and first charge on pari-u basis on specific fixed assets of the company.

(C) Unsecured Loans – Sales Tax deferment The total sales Tax Loan outstanding as on 01-04-2008 was Rs 684.56 Lakhs. During the year the company has repaid a sum of Rs 25.63 Lakhs and availed a credit of Rs 10.68 Lakhs. The outstanding liability stands at Rs 669.61 Lakhs as on 31.03.2010.

(D) Depreciation on Revalued Assets. The company had credited a sum of Rs 199053280/- towards revaluation reserve in the financial year 2008-09. The excess depreciation on of revaluation of assets amounting to Rs 15767697/- for the current year has been withdrawn from the said Reserve and credited to depreciation . There is no impact on of above revaluation on the Book Profit of the Company.

(E) Assets – Impairment. The management of the Company has reviewed the assets keeping in the view the ing Standard 28 issued by the Institute of Chartered ants of India and is of the view that there is no impairment in the value of assets in accordance to that standard.

(F) Sundry debtors & Other Balances In case of balance in Sundry Debtors, loans and Advances, Other Current assets and sundry Creditors, letter – seeking confirmation and reconciliation. The Company does not owe any sum to Micro & Small enterprises at the end of the ing year on of principal and interest under the Micro, small and Medium Enterprises Development Act, 2006 as per the information and records available with the company about their industrial status which has been relied upon by the auditors.

(G) Employees Benefits: 1. The company has adopted the revised ing Standard AS-15 –Employees Benefits with effect from 1st April, 2007. 2. Gratuity: The Company makes annual contribution to the employees group Gratuity scheme of Life Insurance Corporation of India (LIC), a funded defined benefits plan for qualifying employees. Gratuity is payable to all eligible on separation / termination or death in of the provisions of The Payment of Gratuity (Amendment) act, 1997 or per company’s scheme whichever is more beneficial to the employees. 3. The expected return on plan assets of 85 has been considered based on the information given by LIC which manages the funds.

4. Gratuity cost amounting to Rs 0.84 Lakhs has been included in schedule – 18 under contribution to Provident and other funds.

FINANCIAL POSITION OF THE COMPANY PARTICULARS

SCHEDULE N0.

2009-2010 (Rs)

2008-2009 (Rs)

Sources of Funds a)

Share Capital

1

113,022,000

113,022,000

b)

Reserves and Surplus

2

758,660,988

708,926,682

Share holders Funds

871,682,988

821,948,682

Equity share warrants

14,716,360

c)

Loans Funds

i) Secured loans

3

6,706,717

70,524,415

ii) Unsecured loans

4

66,960,974

68,456,511

Net deferred Tax Liability

14

7,605,400

6,942,300

Total

967,672,439 967,871,908

Application of Funds Fixed Assets (At cost) a) Gross Block

738,252,728

780,690,578

b) Less Depreciation

348,555,618

324,020,748

c) Net Block

389,697,110

456,669,830

capital work-in-progress

85,848,531

45,154,000

6

43,974,677

29,185,585

a) Inventories

7

135,926,008

39,806,569

b) Sundry debtors

8

150,530,610

94,811,568

c) Cash & Bank Balances

9

45,823,896

54,776,673

d) other current assets

10

190,786,451

266,902,337

e) Loans & Advances

11

91,586,225

81,705,199

614,653,190

538,002,346

Investment (at cost)

5

Current assets, Loans and advances

CHAPTER -V

DATA ANALYSIS AND INTERPRETATION

ANALYSIS As This Company has two units that is SURANA TELECOM & POWER LIMITED of Hyderabad unit (STL of Hyd) and SURANA TELECOM & POWER LIMITED of GAO unit ((STL of GAO) The analysis has done on b/w this two unit of cost sheet.

1) SALES: Table.1

UNITS

SALES

STL (Hyd)

200540678.8

STL (Goa)

388298312.6

INTERPRETATION: The sales of STL (Hyd) unit amounts to Rs 200540678.8 and the sales of STL (GAO) unit amounts to Rs 388298312.6

ANALYSIS: The sales of STL (Goa) unit are high because the sales of Jelly Filled Telephone Cable are higher as compare to STL (Hyd) the sales are low because the sale of Jelly Filled Telephone Cable are nil.

2) PROFIT: TABLE.2 UNITS

PROFIT

STL(Hyd)

(9795463.19)

STL(Goa)

71607241.61

INTERPRETATION: There is a Loss in STL (Hyd) unit which amounts to Rs 9795463.19 and Profit in STL (Goa) unit which amounts to Rs 71607241.61

ANALYSIS:

As the sales are high in STL (Goa) unit and Expenses are low there is a Profit where as in STL (Hyd) unit the sales are low and Expenses are high there is a Loss.

3) MATERIAL CONSUMED: TABLE.3

UNITS

MATERIAL CONSUMED

STL (Hyd)

193744317

STL (Goa)

253962722.8

INTERPRETATION: The Material Consumed of STL (Hyd) unit amounts to Rs 193744317 whereas of STL (Goa) unit amounts to Rs 253962722.8.

ANALYSIS:

The Material Consumed of STL (Goa) unit is high because its Purchases are high, where as the Material Consumed of STL (Hyd) unit is low because its Purchases are low

4) PRIME COST: TABLE.4

UNITS

PRIME COST

STL (Hyd)

205300223

STL (Goa)

308305585.6

INTERPRETATION: The Prime cost of STL (Hyd) unit is amounts to Rs 205300223 where as the Prime cost of STL (Goa) unit is amount to Rs 308305585.6.

ANALYSIS:

The Prime Cost of STL (Goa) unit is high because its Direct Expenses are high, where as the Prime Cost of STL (Hyd) unit is low because its Direct Expenses are low.

5) WORK COST: TABLE.5

UNITS

WORK COST

STL (Hyd)

195107623.7

STL (Goa)

323600058.1

INTERPRETATION: The Work Cost of STL (Hyd) unit amounts to Rs195107623.7, where as the Work Cost of STL (Goa) unit amounts to Rs323600058

ANALYSIS:

The Work cost of STL (Goa) unit is high because its Electricity Expenses are high which amounts to Rs 6477816, as compare to STL (Hyd) unit the Electricity Expenses are low which amounts to Rs 4446262.64.

6) COST OF PRODUCTION: TABLE.6 UNITS

COST OF PRODUCTION

STL (Hyd)

204052062.5

STL (Goa)

3699233.92

INTERPRETATION: The Cost of Production of STL (Hyd) unit amounts to Rs 204052062.5, where as the Cost of Production of STL (Goa) unit amounts to Rs 3699233.92.

ANALYSIS:

The Cost of Production of STL (Goa) unit is high because its Telephone Charges are high which amounts to Rs 366338, as compare to the Cost of Production of STL (Hyd) unit are low because its Telephone Charges are low.

7) COST OF GOODS SOLD: TABLE.7

UNITS

COST OF GOODS SOLD

STL (Hyd)

205864037.5

STL (Goa)

308189675

INTERPRETATION: The Cost of Goods Sold of STL (Hyd) unit is Rs 205864037.5; where as the Cost of goods sold of STL (Goa) unit is Rs 308189675

ANALYSIS:

The Cost of Goods Sold of STL (Goa) units are high because remaining other Expenses are high, as compare to STL (Hyd) units are low because other Expenses are low.

8) TOTAL COST: TABLE.8 UNITS

TOTAL COST

STL (Hyd)

210336142

STL (Goa)

323600058.1

INTERPRETATION: The total cost of STL (Hyd) unit is 210336142, where as the Total cost of STL (Goa) unit are 323600058.1.

ANALYSIS:

The Total cost of STL (Goa) unit are high because its Transportation Charges are high which amounts to Rs 6873019, as compare to STL (Hyd) unit its Transportation Charges are low which amounts to Rs 3048588.

OVER ALL ANALYSIS: As we can see that the STL (Goa) unit is having low Expenses and high sales which results into Profit. Whereas the STL (Hyd) unit are having higher Expenses and low sales which results into Loss’s. So, as per the Analysis the STL (Goa) unit is doing well as compare to STL

CHAPTER –V

FINDINGS AND CONCUSIONS

FINDINS & CONCLUSION

SURANA TELECOM & POWER LTD OF HYDERABAD (STL, HYD) •

Major factors effecting to STL (Hyd) unit is loss

•

This unit is good at Cost of Production as compare to it Other unit

•

This unit have more expenditure and less Sales

•

It is observed that these units except cost of production, all the other majors’ area are not satisfactory.

SURANA TELECOM &POWER LTD OF GOA (STL, GOA) • There is an increase in net profit in 2008-2009 •

The Management has control over the service management.

•

Its sales are very high and expenditure is manageable low.

•

Its cost of production is very low.

•

A current liability of the company position is increased and then there is a positive growth.

CHAPTER -VI

SUGGESTIONS AND RECOMENDATIONS

SUGGESTIONS & RECOMMENDATION •

The STL (Hyd) unit should take steps to overcome the deficits or loss as soon as possible.

•

The STL (Hyd) company should work out maintains its expenses, which would ultimately increased the profits.

•

The company should control its cost, and do the best cost analysis, which in turn reduced its expenditure and increased its revenue.

•

Diversification of products in the global markets.

•

Proper utilization of funds.

•

Should able to meet the competitive environment.

•

However the STL (Goa) unit is doing well only need to maintain the same strategies as long as its earned profits.

CHAPTER-VII

BIBLOGRAPHY

BIBLOGRAPHY BOOKS REFERED 1)

R.P Trivedi and Manoj Trivedi, Cost and Management ing

2)

M.Y Khan and P.K Jain, Financial Management

3)

Company Annual Reports (Literature)

WEBSITES http://www.surana.com www.google.com

CHAPTER –VIII

APPENDICES

COST SHEET OF STL GOA UNIT FOR YEAR ENDED 31-3-2010 PARTICULARS OPENING STOCK 0F R.M STOCK TRANSFER FROM STL UNIT-1 ADD-PURCHASES STEEL TAPE R.M TO OTHERS TING KIT COMPONENTS OTHER PURCHASES FAST EITHERNET TO E1 CONVERTS GALVANISHED M.S WIRE POLYESTER TAPE NYLON CABLE BINDER YARN PVC TELECOM TAPE HEAT SHRINKABLE PROFIT F.R.P RODS POLYESTER FILM MASTER BATCHES FILING COMPOUND CLEARING LIQUID BRANCH OFF CLIPS SHEATH CONNECTORS S.SCHANNELS A.L CANNISTERS CC RODS A.L FOIL HDPE LDPE GRANUALERS ADD-CARRIAGE INWARDS

LESS-MODVAT ON RAW MATERIAL MODVAT ON CAPITAL GOODS CLOSING STOCK OF RAW MATERIALS

AMOUNTS

4280800.99 3744608 1970080 2484 29987120 680292 917446 1438999 83866 2038115 538270 2555540 2608906 4447737 381790 151449 167516 829475 786408 119243916 20218173 3112863 4623106 204808960 2379208 207188168 10098630 212296 20917851 31228777

AMOUNT 8258603 69744728.79

207188168 285191499.8

31228777

AMOUNT

MATERIAL CONSUMED DIRECT EXPENSES CUSTOM DUTY CLEARING CHARGES JOBWORK OTHERS STORE & SPARES STORE CONSUMABLES CONSUMABLE STORES TOTAL DIRECT EXPS DIRECT WAGES SALARY HOUSE RENT ALLOWANCE LEAVE ENCHASEMENT SERVICE CHARGES ALLOWANCES LABOUR CHARGES E.S.I CONTRIBUTION (EEY'S) P.F CONTRIBUTION (EEY'S) STAFF & LABOUR WELFARE TOTAL DIRECT WAGES PRIME COST FACTORY OVERHEADS DIESEL FOR GENERATORS ELECTRICITY EXPS WOODEN DRUMS PACKING MATERIAL HANDLING CHARGES FREIGHT & CARTAGE REPAIRS & MAINTENANCES TO MACHINERY R & M TO BUILDING R & M TO ELECTRICALS LAB MAINTENANCE R & M TO OTHERS R & M TO CDMA PHONES PETROLS R & M TO VEHICALS FACTORY MAINTENANCE LEASE RENT LESS-FREIGHT CHARGES

253962722.8

46205805 707530 104677 597686 4845 836547.05 43732 48500822.05 48500822.05

3187633 6500 13167 2850 6625 2138061 113319 268465 105420.8 5842040.8

3687007 6477816 7123123 1040815 3720 199805 2901463.47 47859 249852 1772 375035 14448906 209622 222414 34013 248500 37271722.47 9616681

5842040.8 308305585.6

308305585.6

TOTAL FACTORY COST

27655041.47 27655041.47

ADD-OPENING STOCK OF WIP LESS-CLOSING STOCK OF WIP LESS-SALE OF SCRAP WORK COST ISTRATION OVERHEADS PRINTING & STATIONARY POSTAGE & TELEGRAM TELEPHONE CHARGES INSURANCE RENT EMPLOYEES RESIDENT RATE & TAXES PROFESSIONAL & CONSULTANCY CHARGES SUNDRY BALANCE WRITEOFF INCIDENTAL CHARGES BOOKS & PERIODICALS TYPE APPROVALS FEES WATER CHARGES WATCH & WARD TESTING CHARGES TENDER A/C OCTROI CHARGES OFFICE MAINTENANCE MISC EXPENSES LEGAL & LICENSE FEES FILING FEES ENTERTAINMENT EXPS BANK CHARGES BANK CHARGES ON LC'S

217406 99992 366338 17914 7500 186046 131246 351592.29 33281 475 333517 25621 601951 152863 57926 4957 27630 13856 32973 11796 49626 103964.63 870763 3699233.92

COST OF PRODUCTION ADD-OPENING STOCK OF FINISHEDGOODS LESS-CLOSING OF FINISHEDGOODS COST OF GOODS SOLD SELLING & DISTRIBUTION TRANSPORTATION CHARGES COMMISSION ON SALE CONVEYANCE TRAVELLING EXPS(INLAND) MENT

6873019 1086223 51999 313851 11574

3699233.92

27655041.47 335960627.1 10585080 346545707.1 21799238 324746469.1 1146411 323600058.1

3699233.92 327299292 2877980 330177272 21987597 308189675

SALES PROMOTION BUSSINESS PROMOTION DONATION

32743 129987 2000 8501396

8501396

TOTAL COST PROFIT GROSS SALES LESS-SALE OF TING KIT JELLY FILLED TELEPHONE CABLE SALE OF POLY ALUMINIUM FOIL SALE OFBLACK SHEATING COMPOUND SALE OF EITHERNET TO E1 CONVERTS STOCK TRF TO STL UNIT 1 JOB WORK SALE OF OTHERS

8501396 316691071 71607241.61

23071434 307026393 4288283 4314129 44802089 408164.55 4387670 150 388298312.6

388298312.6

COST SHEET OF SURANA TELECOM & POWER LTD YEAR ENDING 31-3-2010 PARTICULARS AMOUNT AMOUNT AMOUNT OPENING STOCK OF R.M 4011487 ADD-STOCK TRANFER TO GOA UNIT 2 408164.56 ADD-PURCHASES OF R.M TING KIT COMPONENTS 85472 MASTER BATCHES 1446399 CC RODS 41690174 CDMA ACCESSORIES 2500 PURCHASE OF PREFORMS 17728000 RAW MATERIAL T JELL FILLEDCABLE 243152 R.M TO OPTICAL FIBRE 8803696 NYLON GRANUALS 11510110 RODVING TEX 891643 F.R.P RODS 6319754 OPTICAL FIBRE 8967098 COPPER CATHODES 3760553 COPPER MATALLIC SCRAP 9964882 POLYAMIDE CHIPS 330319 P.V.C COMPOUD 22257 NYLON CABLE BINDS YARN 2522710 CDMA-BATTERY CONNECTIONCABLE 6000

BLACK POLYTHENE GRANUALS POLYESTER TAPE POLYBUTYLENE TEREPTHALATE HDPE LDPE GRANUALS FILING COMPOND CLEARING LIQUID POLYAMIODE R.M TO OTHERS ADD : CARRIAGE INWARDS

LESS: MODVAT IN R.M MODVAT ON CAPTIAL GOODS CLOSING STOCK OF R.M MATERIALS CONSUMED DIRECT EXPENSES JOB WORK OTHERS STORES & SPARES STORES CONSUMABLE CLEARING CHARGES CUSTOM DUTY

143884 1428651 5735285 54288033 14142992 1184502 339691 562096 1001650 193121503 622814 193744317 193744317 198163969 183435 167289 32115718 32466442 32466442 193744317 19521 13218 2574608.5 1157026 4174895 7939268.5

DIRECT WAGES LABOUR CHARGES SERVICE CHARGES SALARY LEAVE ENCHASHMENT ESI CONTRIBUTION (EES) PF CONTRIBUTION (EES) STAFF & LABOUR WELFARE GRATUITY HIRE CHARGES

PRIME COST FACTORY OVERHEADS ADD: DIESEL FOR GENERATOR ELECTRICITY EXP REPAIRS TO BUILDING

99861 22600 2715784 2533 86370 253340 298781.5 83905 53463 3616637.5 11555906 205300223 496480 4446262.6 704221 1274237

205300223

REPAIRS & MAINTAINENCE TO MACHINERY R & M TO ELECTRICITY R & M TO OTHERS R & M TO CDMA PHONES PETROL R & M TO VEHICLES PACKING MATERIAL WODDEN DRUMS FREIGHT & CARTAGE LESS : FREIGHT CHARGES

83968 176646 2888558 36940.05 34562 229656 2399030 185042 12955603 1389191 11566412

11566411.69 216866634.7 2001840 218868474.7 10927258 207941216.7 12833593 195107623.7

ADD: OPENING STOCK OF WIP LESS : CLOSING STOCK OF WIP LESS: SALE OF SCRAP WORK COST STRATIVE OVERHEADS ADD- PRINTING & STATIONERY POSTAGE TELEGRAM TELEPHONE CHARGES INSURANCE RENT EES RESIDENCE RATES & TAXES PROFESSIONAL & CONSULTANCY CHARGES REGISTRATION CHARGES INCIDENTAL CHARGES TYPE OFF APPROVAL FEES WATCH & WARD TESTING CHARGES OFFICE MAINTAINENCE HIP FEES MISC EXPENSES LEGAL & LICENCE FEES FILLING FEES BOOKS & PERIODICALS BANK CHARGES BANK CHARGES ON LC DEPRECIATION TENDER A/C FINANCIAL CHARGES

11566412

259476 364490 134223 348795 34000 342634 320239 6742 186920 157857 588507 129542 21372 60980 62650 26180 5618 4808 2931 15601 4931758 208194 42010.8

AMC CHARGES ENTERTAINMENT EXPENSES LESS:SUNDRY BALANCE WRITE OFF

688266 762 8944555.8 141962.51 8944438.8

8944438.8

COST OF PRODUCTION ADD: OPENING STOCK OF FINISHED GOODS

204052062.5 4609975 208662037.5 2798000 205864037.5

LESS:CLOSING STOCK OF FINISHED GOODS COST OF GOODS SOLD ADD- TRANSPORTATION CHARGES COMMISSION SALES/RENT MENT SALES PROMOTION BUSSINESS PROMOTION

3048588 845528 141823 334268.5 101897 4472104.5 4472104.5

TOTAL COST LOSS OPTICAL FIBER CABLES HS SLEEVES SALES OF COPPER WIRE ROD SALES OF CDMA WIL PHONES COPPER CATHODES OPTIC FIBRE BUNDLES/CABLES STOCK TRANSFERS TO GOA UNIT 2 STOCK OF R.M Total Sales

8944438.8

15731625 1383896 43063831 7000 3031592 65931681 69744729 1646325 200540679

4472104.5 210336142 -9795463.19

200540678.8