Shilpa Project

A Study on Operating Cost at BMTC
Project Report on
“A STUDY ON OPERATING COST AT BMTC"

Submitted in Partial Fulfillment & Requirement for the Award of the
Degree of
MASTER OF COMMERCE
In
BANGALORE UNIVERSITY
SUBMITTED BY
SHILPA .B.S
(Reg. No.13AVCMN034)
UNDER THE GUIDANCE OF
Dr. SYED SAIFULLA M.COM,PH.D
ASSISTANT PROFESSOR,DEPARTMENT OF COMMERECE
HASANATH COLLEGE FOR WOMEN
HASANATH COLLEGE FOR WOMEN
43,Dickenson Road,Bangalore-560042
2014-2015
HASANATH COLLEGE FOR WOMEN,BANGALORE Page 1
CHAPTER.1
INTRODUCTION
INTRODUCTION TO SERVICE INDUSTRY
Service Sector in India today accounts for more than half of Indian’s GDP.
According to data for the financial year 2009-2010, the share of services,
industry, and agriculture in Indian’s GDP in 55.1%, 26.4%, and 18.5%
respectively. The fact that the service sector now accounts for more than half
the GSP marks a watershed in the evolution of the Indian economy and takes it
closer to the fundamentals of a developed economy. Services or the “tertiary
sector” of the economy covers a wide gamut of activities like trading, banking
& finance, information, real estate, transportation, security, management &
technical consultancy among several others. The various sectors that combine
together to constitute service industry in India are:
1. Trade
2. Hotels and Restaurants
3. Railways
4. Other Transport & Storage
5. Communication (Post, Telecom)
6. Banking
7. Insurance
8. Dwellings
9. Real Estate
10.Business Services
11.Public Administration

12.Defense
13.Personal Services
14.Community Services
15.Other Service
There was marked acceleration in services sector growth in the 80’s and 90’s,
especially in the 90’s. While the share of services in India’s GDP increased by
21% points in the 50years between 1950 and 2000, nearly 40% of that increase
was concentrated in the 90’s. While almost all service sectors participated in
this boom, growth was fastest in communications, banking, hotels and
restaurants, community services, trade, and business services. One of the
reasons for the sudden growth in the services sector in India in the 90’s was the
liberalization in the regulatory framework that gave rise to innovation and
higher exports from the services sector.
The boom in the services sector has been re-actively “jobless”. The rise in
services share in GDP has not accompanied by proportionate increase in the
sector’s share of national employment. Some economists have also cautioned
that service sector growth must be supported by proportionate growth of the
industrial sector, otherwise the service sector grown will not be sustainable, in
the current economic scenario it looks that the boom in the services sector is
here to stay as India is fast emerging as global services hub.
India gross domestic product (GDP) means the total value of all the services
and goods that are manufactured within the territory of the nation during the
specified period of time.
The Indian economy is the second fastest major growing economy in the whole
world with the growing rate of the GDP at 9.4% in 2006-2007. The economy

of India is the 12th biggest in the world for it has the GDP of US$ 1.09 trillion
in 2007.
Services Sector in India

India ranks 15th in the services output and it provides employment to around
23% of the total workforce in the country. The various sector under the
services sector in India are construction, trade, hotels, transport, restaurant,
communication, financing, business services and real estate.
Services sector contribution to the Indian economy. The services sector
contributes the most to the Indian GDP. The sector of services in India has the
biggest share in the country’s GDP for it accounts for around 53.85 in 2005.
The contribution of the services sector in India GDP has increased a lot in the
last few years. The services sector’s share in the country’s GDP has increased
from 43.695 in 1990-1991 to around 51.16% in 1998-1999. This shows that the
services sector in India accounts for over half of the country’s GDP.
The Reason for the growth of Services Sector contribution to the India’s GDP-
The contribution of the services sector has increased very rapidly in the India
GDP for many foreign consumers have shown interest in the country’s service
exports. This is due to the fact that India has a large pool of highly skilled, low
cost, and educated workers in the country. The foreign companies seeing this
have started outsourcing their work to India especially in the area of business
services which includes business process outsourcing and information
technology services. This has given a major boost to the services sector in
India, which in its turn has made the sector contribute more to the India GDP.

INTRODUCTION TO OPERATING COST
Definition of 'Operating Cost':

Expenses associated with administering a business on a day to day basis.
Operating costs include both fixed costs and variable costs. Fixed costs, such as
overhead, remain the same regardless of the number of products produced;
variable costs, such as materials, can vary according to how much product is
produced.
Meaning:
A Operating Cost is a Cost per unit of a product or service, or the annual cost
incurred on a continuous process. Operating costs do not include capital outlays
or the costs incurred in design and implementation phases of a new process.
The information concerning the business enterprise is very helpful to the

management to control it in an efficiently way. As the other branches like
financial accountancy and management accountancy, the cost accountancy also
serves the important information to the management decisions or evaluates
operating management performance with the information provided by cost
accounting.
The term operation in business terminology refers to inactivity of the business.

It is very important to study the operations of the business in detail because
depends on the operations, which it performs. The management should always
concentrate on the efficiency of the operation and also the costs associated to
the operations. It is very important to control the costs associated to the
operations for the enterprises like manufacturing companies, companies

engaged in the process of extraction of materials from earth like, coal mines
etc.
Generally, the above mentioned businesses enterprises depend on the operation

that it has to be performed in to produce into produce the final output. The
costs associated with such operations are generally higher. These costs are
called as “Operating Costs”.
The costs, which are incurred to perform the operation of the enterprise, are
called as operating cost.
These costs are to be accounted for in order to arrive at the total costs of
operation or process, which helps in determining the price of the final product.
operation or process, which helps in determining the price of the final
product. “Cost accounting is the and appropriate allocation of classifying,
recording expenditure for the determination of the costs of products or services,
and to the presentation of suitably; arranged data for the purposes of control
and guidance of management.”It includes the ascertainment of the costs of
every process, operation, services or contrast as may be appropriate. It deals
with the cost of production, selling and distribution. It thus, the provision of
such analysis and classification of expenditure as will enable the total cost of
any particular unit of production to be ascertained with reasonable degree of
accuracy and at the some time to disclose exactly how such total cost is
constituted (i.e. the value of material used, the amount of labour and other
expenses incurred so as to control and reduce the cost).
Arrive at the total costs of These costs are to be accounted for in order to
operation or process, which helps in determining the price of the final
product. “Cost accounting is the classifying, recording and appropriate

allocation of expenditure for the determination of the costs of products or
services, and to the presentation of suitably; arranged data for the purposes of
control and guide of management.”It includes the ascertainment of the costs of
every process, contrast as may be operation, services or appropriate. It deals
with the cost of production, selling and distribution. It thus, the provision of
such analysis and classification of expenditure as will enable the total cost of
any particular unit of production to be ascertained with reasonable degree of
accuracy and at the same time to disclose exactly how such total cost is
constituted (i.e. the value used, the amount of material and other expenses
incurred) so as to control and reduce the cost.
Methods of Costing and Types of Costing
Methods of Costing
As per the nature and peculiarities of the business, different Industries follow
different methods to find out the cost of their product. There are different
principles and procedure for doing the costing. However the basic principle and
procedure of costing remain the same. Some of the methods are mentioned
below:
1. Unit Costing
2. Job Costing
3. Contract Costing
4. Batch Costing
5. Operating Costing
6.Process Costing.

7. Multiple Costing
8. Uniform Costing.
Different Methods of Costing
Unit Costing: This method also called 'Single output Costing'. This method of
costing is used for products which can be expressed in identical quantitative
units and is suitable for products which are manufactured by continuous
manufacturing activity. Costs are ascertained for convenient units of output.
Examples: Brick making, mining, cement manufacturing, dairy, flour mills etc.
Job Costing: Under this method costs are ascertained for each work order
separately as each job has its own specifications and scope. Examples:
Painting, Car repair, Decoration, Repair of building etc.
Contract Costing: Under this method costing is done for big jobs which
involves heavy expenditure and stretches over a long period and often it is
undertaken at different sites. Each contract is treated as a separate unit for
costing. This is also known as Terminal Costing. Construction of bridges,
roads, buildings, etc. comes under contract costing.
Batch Costing: This method of costing is used where the units produced in a
batch are uniform in nature and design. For the purpose of costing each batch is
treated as a job or separate unit. Industries like Bakery, Pharmaceuticals etc.
usually use batch costing method.
Operating Costing or Service Costing: Where the cost of operating a service

such as nursing home, Bus, railway or chartered bus etc. this method of costing
is used to ascertain the cost of such particular service. Each particular service is
treated as separate units in operating costing. In the case of a Nursing Home, a

unit is treated as the cost of a bed per day and for buses operating cost for a
kilometer is treated as a unit.
Process Costing: This kind of costing is used for the products which go
through different processes. For example, manufacturing cloths goes through
different process. Fist process is spinning. The output of spinning is yarn. It is a
finished product which can be sold in the market to the weavers as well as use
as a raw material for weaving in the same manufacturing unit. For the purpose
of finding out the cost of yarn, the cost of spinning process is to be ascertained.
The second step is the weaving process. The output of weaving process is cloth
which also can be sold as a finished product in the market. In such case, the
cost of cloth needs to be evaluated. The third process is converting cloth in to
finished product such as shirt or trouser etc. Each process is to be evaluated
separately as the output of each process can be treated as a finished good as
well as consumed as a raw material for the next process. In such industries
process costing is used to ascertaining the cost at each stage of production.
Multiple Costing: When the output comprises many assembled parts or

components such as in television, motor Car or electronic gadgets, costs have
to be ascertained or each component as well as the finished product. Such
costing may involve different methods of costing for different components.
Therefore this type of costing is known as composite costing or multiple
costing.
Uniform Costing: This is not a separate method of costing. This is a system of

using the same method of costing by a number of firms in the same industry. It
is treated as a common system of using agreed principles and standard

accounting practices in the identical firms or industry. This helps in fixation of

price of the product and inter-firm comparisons.
Types of Costing
There are different types or techniques of costing are used in cost accounting.
Different types of costing are used in different industries to analyze and
presenting costs for the purposes of control and managerial decisions. The
generally used types of costing are as follows:
Marginal Costing: In Marginal Costing, it allocates only variable costs i.e.

direct materials, direct labour and other direct expenses and variable overheads
to the production. It does not take into account the fixed cost of production.
This type of costing emphasizes the distinction between fixed and variable
costs.
Absorption Costing: The technique of absorbing fixed and variable costs to

production is called absorption costing. Under absorption costing full costs, i.e.
fixed and variable costs are absorbed to the production.
Standard Costing: When costs are determined in advance on certain

predetermined standards under a given set of operating conditions, it is called
standard costing. Standard costing is to be compared with the actual costs
periodically to analyze the changes in the cost to revise the standards to avoid
any loss due to outdated costing.
Historical costing: When costs are determined in terms of actual costs and not
in terms of predetermined standards cost is called Historical costing. In this
system of cost accounting, costs are determined only after they have been
incurred. Almost all organizations use historical costing system of accounting

for costs.
Reconciliation of Cost and Financial Accounts
Cost accounts act as a check on financial accounts. To achieve this, we have to

compare the profit/loss ascertained under the cost accounts with the profit/loss
arrived under financial accounts. By preparing a reconciliation statement, we
can find out the causes of difference in cost accounting and financial accounts.
Double entry system of account is being used by large manufacturing firms and
they adopt one of the following two methods:
1. Integral or integrated Accounting: When cost and financial transactions

are unified, it is called the integral/integrated accounting. In integral or
integrated accounting Cost and financial transactions are not kept separate;
they are together recorded in one set of books of account.
2. Non-integral or Independent Accounting. When the cost and financial

transactions are kept separate, the method followed is called "non-integral or
Independent Accounting". A separate set of books are maintained under this
system.
Need of reconciliation of cost and financial accounts arises only when non-
integral accounting method is followed.
Integral Accounting: means the maintenance of cost and financial accounts in

a single set of books. In other words the merger of financial and cost
accounting by using a single set of books of accounts .This serve the purpose
of both financial account and cost account. A cost ledger and three subsidiary
ledgers i.e. Stores Ledger, Work-in-progress Ledger and Finished Stock Ledger
are also maintained in addition to the General Ledger, Sales Bought Ledger
and Sales Ledger.
 Cost Ledger: It contains all the nominal accounts and known as

principal ledger in cost accounting. Please note when the non-integral
account is followed, cost ledger contains control account for each
subsidiary ledger. Example: Work-in-progress Ledger Control Account,
Finished Stock Ledger Control Account, Stores Ledger Control Account
etc. It is also be noted that when the integral account method is followed
these control accounts are maintained in the General Ledger.
1. Work-in-progress ledger: It is a subsidiary ledger which contains an

account for each process, job or operation which is pending on the
shop floor. The cost of materials, overheads and labour is debited and
the cost of goods transferred to Finished Stock Ledger is credited to
the account as and when they are completed.
 Finished Stock Ledger: It is a subsidiary ledger which contains an

account for each item of job completed or finished product
manufactured. Each such completed job or product account is debited
with the cost of production and credited with the cost of goods
transferred to Cost of Sales Account.
 Stores Ledger: It is a subsidiary ledger where in all the items of stores

and its movements are recorded. Purchase of materials debited to this
account and issue of materials to jobs credited to this account.
Under this method, no costing profit and loss account is prepared since
only one set of account is maintained. Therefore, there is no need for

reconciliation of costing and financial profit or loss.

Non-integral Accounting
The subsidiary ledgers and the cost ledger are inter-locked through control
accounts maintained in each ledger when independent cost accounts are
maintained. This is practice (maintaining Control Accounts) is followed for the
purpose of cross checking the accuracy of ledgers and also make each ledger
self balance so that a separate trial balance may be prepared for each ledger
without reference to the other ledgers. A general ledger Adjustment Account is
opened in the cost ledger for all items of income and expenditure besides the
control accounts. It is also known as "Cost Ledger Control Account". The cost
ledger also contains control accounts such as Production Overheads Control
Account, Wages Control Account, Administrative Overheads Control Account,
Selling and Distribution Overheads Control Account etc. The double entry is
completed through control accounts in the Non-integral accounting system.
Therefore, it is also known as "Control Accounts System".
Costing Profit and Loss Account: A separate Costing Profit and Loss
Account is prepared for determining the profit or loss of a particular period
when cost accounts are maintained independent of financial accounts. This
account is debited with the cost of sales and credited with the sales value. It is
also debited with items like abnormal losses, under-absorption of overheads,
loss or sale of special jobs etc., and credited with items like abnormal gains,
over-absorption of overheads, profit on sale of special jobs, etc. The balance of
this account will indicate the profit or loss as per cost records which should be
reconciled with the profit or loss as per financial records.

Need for reconciliation of Cost and Financial Accounts.

When financial and cost accounts are maintained independently many a times
the profit or loss disclosed by the two sets of books may differ from each other.
This difference in profit/loss necessitates the preparation of a reconciliation
statement. This statement will show the reason for the difference in figures in
the two accounts i.e. cost account and financial account. It not only helps in
checking the arithmetical accuracy of operating results shown by the financial
accounts but also establish the accuracy of cost accounts.
THE FEATURES OF COST ACCOUNTING :
1. It is a process of accounting for costs
2. It records income and expenditure relating to goods and services
3. It provides statistical data on the basis of which future estimates are

prepared
4. And quotations are submitted.
5. It is concerned with cost ascertainment, cost control and cost
reduction.
6. Finally it involves the preparation of right information to the right
person at the right time so that it may be helpful to management for
planning, evaluation of performance, control and decision-making.
ADVANTAGES OF COSTACCOUNTANCY :
1. It enables a concern to measure the efficiency and then to maintain and
improve it. This can be done with the help of comparison of data made

available of the previous periods and current period.2. It provides

information upon which estimates and tenders are based.
2. It provides information upon which estimates and tenders are based.
3. It guides for future production polices. It explains the cost incurred and
there by provides data on the basis of which production can be
appropriately planned.
4. The extract cause of decrease or increase in profit/loss can be detected.

A concern may suffer not because of the cost of production is high or
prices are low but also because the output is much below the capacity of
the concern.
5. Efficiency of public enterprises. Costing has a more important role to

play in public enterprises than in private enterprises. The primary
objective of the public enterprises is not to raise profits but it is to serve
the society by providing quality good at cheaper rates.
6. The efficiency of a public sector can be judged by comparing it cost of

production of its counterparts.
Reduced application operating costs:
After an application is deployed, the costs of operating the application become

an important measure of success. IBM® Web Sphere® Multichannel Bank
Transformation Toolkit offers cost savings that take effect at and continue

beyond deployment. Following are some of the ways that the toolkit reduces
operating costs:
Preservation of back-end systems

Deployment of a toolkit-based application does not require changes in
existing business logic or transactions run in back-end systems. The
toolkit uses JCA connectors and invokers to connect existing back-end
systems and the application located on a middle-tier server.
Reduced maintenance and operational costs

The use of the network computing architecture, which is based on
Internet technologies, results in immediate cost savings on client
administration, code distribution, and server management. In addition,
Web Sphere Multichannel Bank Transformation Toolkit solutions
minimize the code distribution that is required for incremental changes.
Operational portability
If operational conditions require that the application be moved to another
platform, this can be quickly performed since the application is platform-
independent.
Ease of maintenance
During operation, it is common to discover that application changes are
required. The environment and the distributed nature of the application
supports easy, quick, and universal application updates no matter how
many resources application delivery channels and users are affected.

Adjustments to suit available system

Technology and systems are subject to change; toolkit-based
applications can quickly be adapted to take advantage of more system
resources or compensated for a reduction in resources.
Reduced workstation requirements

The distributed architecture of toolkit-based applications reduces the
resources that are required to deliver the application to the user. User
workstations need to do little more than support the application
presentation and any directly connected peripherals. Adding
workstations is extremely cost-efficient since the server-based
application can be distributed to any number of client workstations.
Common functionality across channels

An application can be designed to provide a common set of functions
across multiple delivery channels. This consistent approach to service
delivery promotes user satisfaction and reduces the training time needed
if the user moves between channels.
Calculating the Operating Cost of a Vehicle
Effective April 2013
To determine the total operating cost of a vehicle, you need to:
1. Establish what the vehicle's Fixed Cost value is (see Fixed Costs Table
below).
2. Determine the Running Cost value (see appropriate Running Costs
Table below).

3. Add these two figures together (Fixed Cost and Running Cost) to get the
Total Vehicle Operating Cost in cents per kilometer.
Fixed Costs
The Fixed Cost values (which are inclusive of VAT) include:
1. The depreciation on the vehicle's value.

2. Comprehensive insurance.
3. The licensing of the vehicle.
Insurance figures are determined according to a sliding scale based on the

'Purchase Price'. The scale reflects a general average rate for the annual
premium.
Purchase Price % Of Purchase Price
1 – Rs 100 000 11.92%
Rs 100 001 – Rs 250 000 7.43%
Rs 250 001 – Rs 400 000 5.29%
Rs 400 001 + 4.69%
(Add a 30% loading for a driver with a driver's license held for less than 5
years)
It is assumed that:
 Vehicles below Rs 200 000 are fitted with a VESA level 4 alarm /
immobilizer device.
 Vehicles above Rs 200 000 are fitted with a vehicle-tracking device.

Hire purchase repayments are not included in the calculation of the vehicle's
Fixed Cost values.
Using The Fixed Costs Table
Select from the first column the purchase price (not the current value) you paid
for the vehicle. It does not matter whether you bought it new or used. Decide
how many kilometers you travel on average each year (include both business
and personal travel). The value depicted where the row and column meet is the
Fixed Cost value of the vehicle.
Example: If a vehicle with a purchase price of R60 000 travels an average of

20 000 km per year, the Fixed Cost value will be 119c/km.
Purchase Price Fixed Costs Table

(Incl. VAT)
Averaged Fixed Cost (c/km) - All costs inclusive of VAT
Annual Distance Travelled
<10 000 10 001 15 001 20 001 25 001 30 001 35 001 >40 001
to to to to to to
15 000 20 000 25 000 30 000 35 000 40 000
up to R30 000 93 62 47 38 32 28 25 22
Rs:30 001 –
157 104 79 63 53 47 41 37
Rs:50 000
Rs:50 001 –
237 158 119 96 81 71 63 57
Rs:75 000

Rs:s:75 001 –
318 213 160 129 108 95 84 76
Rs:100 000
Rs:100 001 –
344 230 173 140 118 103 92 83
Rs:125 000
Rs:125 001 –
415 277 209 169 142 124 110 100
Rs:150 000
Rs:150 001 –
487 325 245 198 166 146 130 117
Rs:175 000
Rs:175 001 –
560 374 281 227 191 168 149 135
Rs:200 000
Rs:200 001 –
704 470 354 286 240 211 187 169
Rs:250 000
Rs:250 001 –
788 526 396 320 269 237 210 191
Rs:300 000
Rs:300 001 –
927 619 466 377 317 279 247 224
Rs:350 000
Rs:350 001 –
1067 713 536 434 365 321 285 258
Rs:400 000
More than
1183 790 594 481 404 356 316 286
Rs:400 001

Running Costs
The Running Cost values include:
1. Maintenance costs (servicing, repairs, tires and lubrication).

2. Fuel.
Using The Running Costs Tables
Select the appropriate table depending on the type of vehicle and the type of
fuel. (Note: Ordinary vehicles include passenger cars and multi purpose
vehicles (MPVs), while light commercial vehicles (LCVs) include bakkies
and double-cabs with a load box). Select the appropriate engine capacity of the
vehicle. Multiply Column A (fuel factor) by the current fuel price in Rounds
per liter. The resultant figure will be in cents per kilometer. To this,
add Column B (service and repair costs) AND Column C (tire costs).
Running Costs calculation (c/km) = (A multiplied by fuel price in R/liter) + B

+C
Example:
If the vehicle has an engine capacity of 1.6 and is petrol driven, choose the
Running Cost Table for Petrol Vehicles and select the engine capacity 1501 -
1800.
Multiply Column A (8.03) by the current petrol price (R11.77*) = 94.51 (*Fuel
price used for example only. Use the latest fuel price in your calculations.)
Add Column B (22.73) and Column C (16.70) = 133.94 c/km

Round off to the nearest decimal point = 134 c/km
Additional Running Cost Adjustments:
Where applicable, add the following percentages to the Running Costs only:
 Bakkie fully loaded - add 12%

 4x4 fully loaded - add 25%
 Single axle trailer - add 8%
 Double axle trailer - add 10%
Engine Capacity Running Costs Table - Petrol Vehicles

(cc)
Averaged Running Cost (c/km) - All costs inclusive of
VAT
Fuel Maintenance
Petrol Service And Repair Costs Tire Costs (in

Factor (in cents) cents)
A B C
< 1 300 6.62 17.18 8.98
1 301 - 1 500 7.39 19.76 13.10
1 501 - 1 800 8.03 22.73 16.70
1 801 - 2 000 9.24 24.29 22.00
2 001 - 2 500 10.60 29.17 25.20
2 501 - 3 000 10.96 35.97 31.70

3 001 - 4 000 12.02 38.02 32.50
> 4 001 14.40 52.34 41.00
Running Costs calculation (c/km) = (A multiplied by petrol price in R/liter) +

B+C
Running Costs Table - Diesel Vehicles

VAT
Engine Capacity
Fuel Maintenance
(cc)
Diesel Service And Repair Costs Tire Costs (in
A B C
< 2 000 6.50 28.34 22.00
2 001 - 2 500 7.70 33.80 25.20
2 501 - 3 000 8.78 40.18 31.70
3 001 - 4 000 9.90 42.67 32.50
> 4 001 11.93 60.22 41.00

Running Costs calculation (c/km) = (A multiplied by diesel price in R/liter) +

B+C
Running Costs Table - Petrol LCVs

VAT
Engine Capacity
Fuel Maintenance
(cc)
A B C
< 2 000 10.00 22.79 12.90
2 001 - 2 500 13.30 23.56 15.20
2 501 - 3 000 14.05 24.71 17.00
3 001 - 4 000 14.70 26.00 21.53
> 4 001 15.80 30.32 22.10


B+C
Running Costs Table - Diesel LCVs

VAT
Engine Capacity
Fuel Maintenance
(cc)
A B C
< 2 000 8.57 28.48 12.90
2 001 - 2 500 11.10 30.18 15.20
2 501 - 3 000 11.43 30.62 17.00
> 3 001 13.26 37.82 22.10
Running Costs calculation (c/km) = (A multiplied by diesel price in R/liter) +

B+C
Running Costs Table - Petrol SUVs

Engine Capacity
(cc) Averaged Running Cost (c/km) - All costs inclusive of
VAT

Fuel Maintenance

A B C
< 2 000 9.42 29.50 22.00
2 001 - 2 500 11.30 32.95 25.20
2 501 - 3 000 12.70 34.78 31.70
3 001 - 4 000 14.20 36.69 32.50
> 4 001 16.90 41.83 41.00

B+C
Running Costs Table - Diesel SUVs

VAT
Engine Capacity
Fuel Maintenance
(cc)
A B C

< 2000 8.24 33.01 22.00
2 001 - 2 500 9.59 36.77 25.20
2 501 - 3 000 10.90 38.11 31.70
3 001 - 4 000 12.46 39.76 32.50
> 4 001 13.30 44.29 41.00

CHAPTER 2
RESEARCH DESIGN
DEFINITION:
A detailed outline of how an investigation will take place. A research design
will typically include how data is to be collected, what instruments will be
employed, how the instruments will be used and the intended means for
analyzing data collected.
MEANING:
After deciding the basic aspects of research project (i.e. formulating research
problem, objectives of research, data requirement, sample design, etc) and
before the commencement of work of research project, the researcher has to
prepare research design. It is a major step in the research process /procedure.
The research work will be conducted (i.e. data collection, etc) as per the
research design prepared.
Research design means to prepare detailed plan and procedures for the conduct
of the research project.
It is like preparing a master plan/blue print for the conduct of formal
investigation.
It is the basic plan that guides researcher in the execution of the research
project undertaken. It is like road map which enables the researcher to conduct
various activities for the completion of research project.
In short, research design is a systematic planning, organizing and executing a
research project within specified time limit and resource allocation. Research
design tells the type of data to be collected, the sources of data and the

procedures to be followed in data collection. Research design provides suitable

framework that guides the collection and analysis of data.
TITLE OF THE STUDY:
A Study on “Operating Cost” at BMTC, Bangalore
STATEMENT OF THE PROBLEM:
The operating cost is an important technique which helps the management to

take sound, prudent, financial and investment decisions. It also helps to
evaluate business, financial, total risk of any organization. The task of choosing
most suitable combination of different techniques in the light of the firm’s
anticipated securities for financing fund requirements earnings in facilitated by
it. In matters relating to investment also operating cost is immensely helpful. It
acts a useful guideline in setting the maximum limits by which the business of
the firm should be expanded.
OBJECTIVES OF THE STUDY:
The study of “operating costs of a BMTC” proposes the following:

a) To identify the operations of the BMTC.
b) To identify the different technologies used to operating cost
in transportation.
c) To find the associated with the process under various
technologies.

SCOPE OF STUDY:
The area of the study of this project is to analyses the differences in the cost on
the profitability of the firms in manufacturing and service industries. Only
2010-11 and 2013-2014 annual reports have been studied and the operating
leverage of the company.
LIMITATIONS OF STUDY:-
 The most important limitation of the study is that the study solely
depends on the published data and documents such as balance sheet and
income statement.
 Lack of availability of full data.
 Specified time period was not sufficient.
 It is not possible to have an in depth study because of limited
information.
RESEARCH METHODOLOGY:
Meaning:
Research Methodology is a way to find out the result of a given problem on a

specific matter or problem that is also referred as research problem. In
Methodology, researcher uses different criteria for solving/searching the given
research problem. Different sources use different type of methods for solving
the problem. If we think about the word “Methodology”, it is the way of
searching or solving the research problem. (Industrial Research Institute,
2010).

According to Goddard & Melville (2004), answering unanswered questions

or exploring which currently not exist is a research. The Advanced Learner’s
Dictionary of current English lays down the meaning of research as a careful
investigation or inquiry especially through search for new facts in any branch
of knowledge. Redmen &Mory (2009), define research as a systematized effort
to gain new knowledge.
METHODOLOGY OF THE STUDY:

 Primary source:
The information is obtained from the personal interaction with
executives of the company. The primary data pertaining to the study are
collected from the records maintained by the Finance and Accounts
department.
 Secondary Source:
Data collection methods, the study is based on both secondary and examines
the total costs vs. operating costs. The results are drawn mainly from the
primary and secondary data collected.
Secondary data has been collected from the various sources such as
Publications of the Industry.
Annual reports.
Text books.
Web sites of the Industry.

CHAPTERISATION OVERVIEW:
Chapte-1: Introduction-
It is on introduction of “ Operating Cost ” with special reference of BMTC.
Chapter-2: Research Design And Methodology-

In this chapter we are study about the statement of problem, scope of study,
limitation and objectives, and collecting the information of sources of data
availability about the topic…
Chapter-3: Company Profile-

Here in this chapter we study about the company profile through with the help
of collecting information through company website or officers guidelines.
Chapter-4: Data Analysis and Interpretation-

The data analysis and interpretation is very important for in project work, here
whatever data we will get from the company side, here we analyzed with the
help of table and interpret by graph shown in the project work.
Chapter-5: Summary of Findings, Conclusion and Suggestions

This is very important chapter for doing a project work, because it is mainly
focused on the interpret the data and conclude the analyses of the above topic
of company.
In this last chapter we can give some suggestion to company for adopting new
technology and improvement of services and to help for a making of good
profit of the company.

CHAPTER-3
COMPANY PROFILE
HISTORY OF BMTC
Bangalore Metropolitan Transport Corporation (BMTC) was formed, as

an independent Corporation with effect from 15-08-1997 after bifurcation from
Karnataka State Road Transport Corporation, vide GO No. HTD/ 127/ TRA/
96 dated 7-8-1997, in which it consisted of two Divisions headed by Director
(BTS) since 1993. Prior to that since 1961 it was under MSRTC/KSRTC.
Consequent upon the formation of BMTC, the organization was

structured to function under a two-tier system- viz., Depots and the Corporate
office and during 2011-12 the systems has been switched over to three tier
systems viz, Depots divisions and corporate office with a view to have closer
liaison and better control.

PERIOD COVERED:
This is the sixteenth Annual Administration Report of Bangalore

Metropolitan Transport Corporation. It covers the period from 1 st April 2012 to
31st March 2013.
MANAGEMENT:
The amended KSRTC Act 1982 provides for the management of the
Corporation by Board of Directors. The Board of the Bangalore Metropolitan
Transport Corporation as on 31st March 2013 consisted of 11 official Directors
and 6 non officials Directors. The Government of Karnataka appoints the
Official Directors representing the State Government and also non official
Directors. The Official Directors representing Central Government are
nominated by Government of India.
ADMINISTRATIVE SETUP:
The Corporation is functioning with three-tier system of administration

with Corporate office, Divisions and Depots. There were 37 Depots, 5
Divisions and two Central Workshops under its jurisdiction as on 31-03-2012.
GROWTH DURING 2012-13:
BMTC is catering to the transport services in city and suburban areas of

Bangalore in a radius of about 40.4 km’s and the area of operation is expanded
from 3527 Sq. km’s to 5130 Sq. km’s in view of Greater Bangalore. The
operations have improved during the year by adding 154 schedules. The no, of
schedules were increased from 5869 to 5949, 385 vehicles were added and 299

aged vehicles were scrapped/transferred and removed from the fleet during the
year.
OPERATIONAL EFFICIENCY:
The operational results during the year 2012-13 as compared to the

earlier periods are as under:
a. Cancellation of Km’s: The percentage of cancellation was to the tune of
14.8% in 1996-97. This incidence of cancellation of km’s was steadily
brought down to 2.6% in 2002-03, 1.9% in 2003-04, 1.2% in 2004-05, 2.6%
in 2005-06, 3.5% in 2006-07, 3.0% in 2007-08, 2.8% in 2008-09, 2.8% in
2009-10 , 2.4% in 2010-11 and 2.5% in 2011-12. During the year 2012-13,
the cancellation recorded was 3.3 %. This was mainly due to the traffic
congestion prevailing in Bangalore city.
b. Average Effective Km’s. operated per day: During the year 1996-97 the
daily service kilometers operated were in the order of 3.41 lakhs only. The
Corporation has increased the service kilometers by augmenting more and
more schedules year after year. This has helped in improving the service
kilometers to 4.95 lakhs in 2000-01, 5.63 lakhs in 2001-02, 6.07 lakhs in
2002-03, 7.11 lakhs in 2003-04, 8.15 lakhs in 2004-05, 8.67 lakhs in 2005-
06, 9.14 lakhs in 2006-07, 10.29 lakhs in 2007-08, 11.13 lakhs in 2008-
09,12.11 lakhs in 2009-10, 12.55 lakhs in 2010-11,12.72 lakhs in 2011- 12,
13.22 lakhs and 2012-13, During the year under report the corporation has
operated 13.74 lakhs effective km’s per day.
c. Average Vehicle Utilization: The average vehicle utilization performed by
the vehicles of the corporation during the year under report is recorded at
224.6 km’s per vehicle per day as against the achievement of 222.1 km’s.
recorded during the year 2010-11. There has been an increase of vehicle

utilization by 2.5 km’s. per vehicle per day over the previous year. The
vehicle utilization was of the order of 193.9 km’s per day during 1996-97.
d. KMPL (Diesel): The performance in KMPL has been recorded at 3.89

during 1996-97. The performance has improved steadily over years and
recorded at 4.74 during the year 2004-05. This performance has dropped
down to 3.97 during the year under report as against the KMPL of 3.98
recorded during the year 2011-12. There is reduction in KMPL due to
introduction of Volvo, BS-4 and BS-3 buses.
e. Rate of Breakdowns per 10,000 km’s: The Corporation recorded a rate of

breakdowns of 0.06 during the year 2012-13 as against 0.05 during 2011-
12. The rate of breakdown was 0.64 in 1996-97.
f. Rate of Accidents per lakh kilometers: The Corporation has recorded the
Accident rate per lakh km’s of 0.13 during the year 2012-13 as compared to
0.10 recorded during 2011-12. The Accident rate was in the order of 0.26 in
the year 1996-97.
g. Financial Performance:
1. Revenue: The Corporation has recorded significant improvement on the
financial front. During the year under report it has realized Traffic
Revenue of Rs. 151600.16 lakh as against Rs. 138624.61 lakh realized
during 2012-13 showing 13.4% growth. Added to this, the Corporation
has realized Rs.11686.62 lakh by way of revenue from other sources
during the year under report as against Rs. 11810.98 lakh realized during
previous year. Thus during the year under report the Corporation has

realized a gross revenue of Rs. 150311.23 lakh as against Rs. 132934.51

lakh realized during previous year, which shows a net growth of 13.1%.
2. Cost of Operations: The Corporation has incurred total expenditure of

Rs. 148169.69 lakh towards the cost of operations comprising of
variable and fixed costs as against Rs. 127899.53 lakh incurred during
previous year. The cost of operations has shown an increase by
15.8%over previous year’s expenditure.
3. Margin: With the above revenue realization and the cost of operations,
the Corporation has been able to record a profit of Rs.2141.54 lakh
during the year under report as against the profit of Rs. 5034.98 lakh
recorded during the previous year.
PASSENGER AMENITIES AND FACILITIES:

The Corporation has accorded high priority for providing increased
amenities to the commuters. Four major Bus Stations at Subhashnagar
(Kempegowda Bus Station), Shivajinagar, City Market and Shanthinagar were
setup. In addition to this, 48 minor bus stations in different parts of Bangalore
city have also been setup.

Picture: BMTC Head Office, Shanthinagar, Bangalore.
Facilities at BMTC Bus Stations:
 All transport facilities under one roof

 Modern High-Tech Bus stations
 Drinking Water
 Seating Arrangements
 Modern Toilets
 Canteen Facilities
 Pre-paid taxi and auto
 ATM facilities
 Dust-proof parking area
 Two Wheelers and Four Wheelers Parking Facilities
 Digital Display and Intelligent Transport System
 Public Addressing System
 Commercial Establishments and Offices
 Crew Rest Rooms
 Modern Lighting Facilities
 Cloak Rooms
 Luggage Counters

Picture: BMTC Bus Station, Majestic.
Picture: BMTC Bus Station, Shivajinagar
Picture: BMTC Bus Station, Kengeri

AWARDS CONFERRED ON BMTC:
Today's Paper » NATIONAL » KARNATAKA

Published: December 28, 2012 00:00 IST | Updated: December 28, 2012 05:50 IST
‘BMTC is the best’

Staff Reporter
The Corporation has been conferred with the following awards during
the year 2013-14.
a. ASRTC Productivity award for minimum operational cost (without
the element of tax) –urban service for the year 2011-12.
b. ASRTC Productivity award for hihest tyre performance –urban
service for the year 2011-12.
c. Greentech foundation award 2013 in the category of public utility
services organisation for outstanding achievement in safety
management.
d. IIMM Corporate exellence award in supply chain management .
e. 60th UITP Award for customer services innovation for “innovative
initiative on customer need based pertion of service and
development of transport infrastructure in bangalore metropolitan
area’’, May 2013

Programme for 2013-14:
The Corporation has formulated an Action Plan for 2013-14 through

which steps are taken to improve operational efficiency by setting norms not
only to bring down the cost of operations but also to improve various
operational parameters.
The Bangalore Metropolitan Transport Corporation (BMTC) has been

putting up an impressive performance since it came into being in 1997,
following its bifurcation from the parent Karnataka State Road Transport
Corporation (KSRTC). In 2012-13, the year under report was no different.
To meet the challenges of the growing needs of the traveling public in

the state, Government of Karnataka issued a White Paper on ‘Effective
Transport Management Initiatives for implementation in the Transport sector
of Karnataka. These Effective Transport Management Initiatives comprise of
five different initiatives, which are listed bellow:
a. Public relations for the Effective Transport Management Initiatives

b. Innovative Technology for Effective Transport Management Initiatives
c. Vehicular Air pollution Management Initiatives
d. Road Safety Management Initiatives
e. Infrastructure for Effective Transport Management Initiatives
These initiatives focused on bringing in technological advancement,

infrastructure development, innovative management, increased public
responsiveness, containing vehicular air pollution and improved road safety

management. BMTC as a part of the process focuses its activities around these
initiatives to meet the objectives under urban transport. The Corporation has
made all efforts to implement these initiatives that are listed below:
A. New Initiatives – Implementation highlights:
a. Public relations for the Effective Transport Management Initiatives:

 Commuter Comfort Task Force and Commuter Advisory and
Facilitation Committee with official and non-official members to
redress public grievances
 Help desks at bus stations, central offices and at control room were
established
 Updated Citizens’ charter was published
 HRD related documentary films were prepared and utilized in the
training of the personals.
b. Innovative Technology for Effective Transport Management

Initiatives:
 Updation of newly designed BMTC website www.bmtcinfo.com
 Bus route information and query on website
 Payment of salary to employees through Electronic Clearance System
(ECS)
 Online registration of complaints for 12 hours in a day through Call
center facilities for commuters through outsourced agencies
 Issue of passenger ticket through Electronic Ticket Vending
machines in 1489 buses on pilot basis

 Electronic LED based destination board in buses on pilot basis

 Smart card for student passes and ID cards of monthly passes
 Online paperless recruitment by launching of website
www.bmtccareers.com
 Installation of Air suspension for smooth riding
 Voice Announcement System has been provided in the buses under
JnNURM scheme
c. Vehicular Air Pollution Management Initiatives:

 ISO-14001 certification for 4 Depots
 Functioning of Environmental Cell in BMTC
 Operation of ParisaraVahini buses
 Stringent checking of vehicles for compliance with pollution norms
 Computerized smoke testing system at Depot level
 Installation of water recycling plant at Depot level
d. Road Safety Management Initiatives:

 Rigorous, transparent and fully computerized process of selection of
drivers adopted
 Coaching for drivers in Depots
 Test track for Driver at Peenya established
 All mechanized trade test at Kengeri
e. Infrastructure for Effective Transport Management Initiatives:

 Newly constructed Traffic and Transit Management Centre (TTMC)
at Yeshwanthapura and Banashankari under JNNURM scheme was
made operational for benefit of passengers
 Augmentation of 852 new buses

 Operation of Night services
 Operation of Suvarna buses brand name BIG 10
 Operation of 571 world class Volvo bus services on major routes
 Introduction of specially designed buses under brand name
“AtalSarige” for the benefit of economically backward passengers
 Operation of specially designed 1000 buses under JnNURM scheme
viz, 3 categories ordinary, air conditioned Marcopolo and Volvo.
 Operation of direction oriented grid routes
 Addition of new Depots at Banashankari and Hosakote
 Operation of Vayuvajra buses to Bengaluru International Airport
Limited.
 BMTC is operating Suvarna branded buses. The bus is specially
designed for passenger comfort.
 Integrated daily pass namely ‘Sangama pass’ has been introduced so
as to enable the passengers to travel in both KSRTC and BMTC
buses.
B. Strengthening of earlier Initiatives and other new Initiatives:
a. Systems improvement:
 Operation of sector-wise core and mini ring route services connecting
different extensions
 Operation of ‘Bangalore Rounds’ bus services on similar lines of
Curitiba model
 10 Traffic and Transit Management Centers which were being
constructed under JN-NURM project with an estimated cost of Rs.
460.15 crore have been completed at all the 10 places wiz
Jayanagar,Kengeri, Bannerghatta, Shanthinagar, ITPL (Whitefield),

Koramangala, Domlur, Vijayanagar, Yeshawanthapura and

Banashankari.
b. Employee Welfare:
 Uniform has been issued to Administrative staff to maintain dress
code
 Entering into MOU with selected list of 39 hospitals for medical
treatment for employees and their dependants
 Voluntary Retirement Scheme and Welfare Fund (VRS and WF)
for distressed employees
 Janatha group Insurance Scheme for accidental benefits to all
employees, for Rs.1.00 lakh for loss of life while on duty
 A novel insurance scheme of Rs 3.00 lakh payable to the dependent
of deceased employees with 25% share to parents for death while in
service
 Providing financial assistance for higher studies for employees and
their children
 Encouraging the employees children with meritorious awards
 Free coaching for SSLC failed employees children
 Financial assistance towards diagnosis of major diseases
 Functioning of Ladies grievance committee to redress all grievances
of female employees of the Corporation
 Summer camp for employees’ children
 Training activities for employees and their dependants
c. Financial front:
 Tendering of Diesel supply.
 Tendering in chassis procurement

 Prompt payment Discount (PPD) scheme for Chassis and other

supplies enhanced from 2% to 3%
d. Others:
 Running of commuter friendly ‘Sarathi’ patrolling vehicle for bus
monitoring on the routes. Number of patrolling vehicles has been
increased to 11.
Composition of the Board of Directors.
The Board of Bangalore Metropolitan Transport Corporation consisted

of 17 Directors including Chairman and Vice Chairman as on 31-03-2013 Out
of these 17 Directors the Chairman, Vice Chairman and the 4 Directors are
Non Official Directors and the remaining 11 Directors are Official Directors.
All the Directors are appointed by the State Government.
Following Was The Composition Of Directors On The Board Of BMTC

As On 31.03.2014
Table3.1
Sl No Name and address Official/

Non Official
1 Sri R. Ramalingareddy Chairman
Hon’ble Minister, Transport minister (Non-official)
Government of Karnataka,, VidhanaSoudha, Bangalore-
560001
2 Sri M.Krishnappa, Vice-hairman
MLA, Bangalore South Constituency, (Non-official)
#196, 124th cross,18th main, Banashankari 2ndstage,

Bangalore-560070
3 Sri. Anjum Parwez, I.A.S., Director
Managing Director, (Official)
BMTC Central Office, K.H.Road, Shanthinagar,
Bangalore-560027.
4 Sri.P.N. Shrinivasachari, IAS., Director
Principal Secretary to Govt, Transport Department, M.S (Official)
Building bangalore.
Government of Karnataka, M.S.Building,
Bangalore-560001
5 Sri. T. Shyambhat, I.A.S., Director
Commissioner, Bangalore development authority, (Official)
Bangalore-560002.
6 Sri. Kumar Pushkar, IFS Director
Director (information technology)
Bmtc Bangalore.
7 Sri Nandan Singh, Director

Dy Secretary (Transport), (Official)
Ministry of Road Transport & Highways, Central Govt.
Room No 141, Sanchar Bhavan, SamsadMarg, Representative
Government of India, New Delhi
8 Sri. S.R.Umashankar. I A S Director
Secretary to Government, Director
Finance Department , Vidhana souda,
Government of Karnataka, Bangalore,560001.

9 Sri N.Manjunatha Prasad, I.A.S., Director

Managing Director, (Official)
KSRTC, Central Office, K.H.Road, Shanthinagar,
Bangalore-560027.
10 Sri . G. Ramesh, I.P.S.,

Director (Security & Vigilance), Director
bmtc, Central Office, K.H.Road, Shanthinagar, (Official)
Bangalore-560027.
11 Sri .P. K. Subbayya, K.A.S., (Super time scale) Director
Director (Personnel & Environment), KSRTC, Central (Official)
Office, K.H.Road, Shanthinagar, Bangalore-560027
12 Sri G.N.Shivamurthy, K.A.S., (Selection Scale) Director

Managing Director, (Official)`
NEKRTC, Central Office, SarigeSadana, Main Road,
Gulburga-585102.
13 Sri. B.N.S. Reddy, IPS. Director(S & V) KSRTC Director
14 SRI. Umesh .H. Kusugallia, KAS. Managing Director Director

NWKRTC, Hubli.
Number of meetings conducted, subjects placed and resolution passed.
Three Board Meetings have been conducted during the year 2012-13 and 64
subjects have been placed before the Board for consideration and passed 64
Resolutions.
Services:

Traffic operations of the Corporation are categorized mainly into City,

Suburban Services which are further categorized on the basis of quality and
brands into the services like Parisaravahini, Pushpak, Suvarna,
Vajra,VayuVajra, Suvarna A.C, BIG-10 etc,. The service-wise and percentage-
wise operation details are as given below.
Table:3.2
Category City Sub- PK+JPV Suvarna Suvarna Vajra/ BIG-

of service urban A.C. 10
VayuVajra
Schs 1105 3574 282 255 92 482 159
lakhs 2.18 8.69 0.68 0.57 0.18 1.13 0.37
Percentage 15.83 62.88 4.93 4.15 1.31 8.19 2.72
VAJRA SERVICES:
Vajra (Volvo) Service: These services are added to BMTC to enhance

the quality of service and to put it on par with personalized mode of Transport
in terms of comfort. The Volvo buses deployed are Air-conditioned, Euro-III
conforming, City type buses offering a soothing ambience. They are passenger
and environmental friendly and hence considered the best among all kinds of
services operated by BMTC.
Features like kneeling mechanism, collapsible exit floor and room for wheel-
chair make them physically challenged friendly buses too. Volvo buses are
being operated under the brand name “Vajra Services”. These are mostly
deployed on high potential I.T. sectors.

VAYU VAJRA SERVICES :
• BMTC is operating Vayuvajra services with the aim of providing

seamless, safe and comfortable and reliable bus connectivity between the
city and the new International Airport.
• It was also aimed at presenting a suitable alternative to other modes like
Taxies etc which till then had monopolized this sector of transport
activity.
BIG-10 Services:

• BIG10 is the name given to Suvarna services operated on all the 10 major
traffic corridors of the city that connect it with the surrounding sub-urbs.
They are Hosur road, Whitefield, Bannerghatta road, Sarjpura road,
Kanakapura road, Mysore road, Magadi Road, Nelamangala Road, Bellary
Road, Hoskote Road etc. These services are operated on a Suvarna fare in
specially branded buses. These services operated from important traffic
points from each of the 12 roads providing direct connectivity to those
traveling between the sub-urbss and city center.
• These services are expected to reduce congestion in the city center due to
reduction of cars and two-wheelers. At present 159 such services are in
operation.
Kilometers covered:
The details of effective kilometers, dead kilometers and gross kilometers

operated along with the average daily kilometers performed during 2011-12 as
compared to the performance in 2010-11 are furnished in the Table-3.3

Table-3.3
Variation over previous
Sl Performance year
Factors
No
2011-12 2012-13 Difference Percentage
1. Kilometers operated (in

lakhs)
a. Gross km’s 4832.65 4854.19 21.54 0.2154%
b. Effective km’s 4633.49 4638.38 4.89 0.0489%
c. Dead km’s 199.16 215.81 16.65 0.1665%
During 2012-13, the Corporation operated 4854.19 lakh effective

kilometers as against 4832.65 lakh km’s operated in 2011-12. There has been
an increase in difference of amount dead km’s to 16.65 recorded during the
year under report as compared to the previous year difference of 110.35. The
Division-wise details of kilometers operated during the year 2012-13 along
with the comparative figures of 2011-12 are furnished in Appendix-1.
Vehicles and Vehicle Utilization:
The details of vehicles held for operation with their utilization during the
year under report as compared with the position as on 31-3-2012 are furnished
in Table-3.4
Table-3.4
Sl. HASANATH COLLEGE FOR WOMEN,BANGALORE

2011-12 2012-13 Page 52
Factors
No
BMT Privat Priva

Total BMTC Total
C e te
1 Average No. of buses

6074.5 35.5 6110.0 6069.0 21.8 6090.8
held in the Corporation
2 Average No. of vehicles

5605.0 35.5 5640.5 5636.2 21.8 5658.0
On-road
3 Average No. of vehicles

335.1 - 335.1 300.4 - 300.4
Off-road
4 Average road worthy

134.4 - 134.4 132.4 - 132.4
spare vehicles
5 Percentage of vehicles
5.5 - 5.5 4.9 - 4.9
Off-road
6 %age of fleet utilization

92.3 - 92.3 92.9 - 92.9
(operating Fleet)
92. Average Vehicle

97 utilization (in km’s)
a. On Gross Km’s. 237.3 274.1 237.5 234.3 271.8 234.4
b. On Effective Km’s. 222.1 274.1 222.5 224.6 271.8 224.8
8 Average carrying
capacity
9 Percentage Load Factor 66.5 - 66.5 71.4 - 71.4

10 Total No. of passengers 15877.5 16579.4 16579.4

- - -
carried (in lakhs) 0 6 6
11 Avg. No. of passengers -

- 43.50 45.30 - 45.30
carried / day (In lakhs)
During the year under report, on an average the Corporation (only BMTC
owned fleet) held 6069.0 vehicles per day. Out of them 5636.2 vehicles were
kept on-road every day, 300.4vehicles were off-road and 132.4 vehicles were
kept as road-worthy spare. In all 4.9% of the vehicles were held off-road
during the year under report. Corporation has recorded a fleet utilization of
92.9% during the year under report as compared to 92.3% recorded during the
previous year. Vehicle utilization of 224.6 km’s per vehicle per day has been
achieved during the period on effective km’s and 234.3 km’s on gross km’s as
against the performance of 222.1 km’s and 237.3 km’s recorded during last
year period respectively.
On an average 45.30 lakh passengers were carried every day by the
BMTC buses.
Concessions/Season passes and free passes:
Concessions extended by the Corporation to different categories of

traveling public/students are detailed below:
COMMUTER PASS SYSTEM : BMTC has one of the best and well-
patronized Commuter pass system. A variety of passes tailored to suit the
travel requirements of different sections of society are made available to the
public. The system is very popular owing to services offered at modest rates to

these pass users, it accounts for more than half of the traffic revenue earnings
of BMTC. They include
1. DAY PASSES
2. MONTHLY COMMUTER PASSES
3. MONTHLY DEDICATED PASSES.
Bus Day :
 Bus day, Car-free day, Bi-cycle day are observed by environment conscious
societies the world over. The intention behind this exercise is to draw
attention of the public to the serious issue of pollution and deterioration in
mobility in fast growing cities. Induce a shift from personal mode (cars and
two wheelers) to public mode of transport.
 BMTC started the Bus day campaign from the month of February 2010 in
the IT intensive areas like Electronic city & Whitefield and is observing the
first anniversary on 4th February 2011, after successful conduct of 12
monthly Bus days.
 The campaign initially restricted to I.T. intensive areas with high
concentration of cars and two wheeler users is now observed in the whole
city of Bangalore.

 Operation of additional services to improve frequency, posting of traffic

staff at en-route bus stops to assist the commuters, distribution of publicity
pamphlets, display of banners at important locations, public interaction
before and during the bus day are the important features of the campaigns.
 BMTC offered Vajra - a high quality, high comfort, safe, hassle-free and
comparatively cheaper alternative to attract personalized mode users.
 Individuals and organizations representing different sections of civil society
are extending enthusiastic support to the bus day campaign by propagating
use of public transport.
 Prominent citizens from all walks of life have contributed to the success of
the campaign by foregoing use of personal mode on bus day.
Fleet Position:
With reference to the above, this is to intimate that, as on 31-03-2013 the

Corporation held BMTC owned 6150 passenger buses. During the year under
report 299 vehicles were scrapped and removed from the fleet. During the year
under report 389 new vehicles were added to the fleet, comprising of 299 Tata,
23 Leyland, 15 Corona and 48 Volvo buses. The corporation also held 159
domestic vehicles such as Cars, Vans, Jeeps, Trucks and Cranes, etc., at the
end of the year.
The overall fleet composition as on 31-3-2013 compared with 31-3-2012
Table-3.5
Sl. Position as on Position as on
Factors
No. 31-03-2012 31-03-2013
1 Registered Passenger Buses

a. Leyland 3275 3045
b. Tata 1780 2038
c. Eicher 401 401
d. Swaraj Mazda 137 132
e. Volvo 471 519
f. Corona 0 15
Total( a to f ) 6064 6150
2 Departmental vehicles
a. Cars and Vans 53 60
b. Jeeps 30 30
c. Trucks 12 13
Others (Water Tanker, Cranes Motor

d. 57 56
Cycles etc)
Total (a to d) 152 159
FINANCE:-
Consequent upon its separation from KSRTC and formation of BMTC

vide G.O No.HTD: 127: TRA: 96 dated 7-8-97 BMTC have started functioning
independently w.e.f. 15-8-1997. The financial results of the Corporation and
salient features of the financial management during the year 2012-13 are
detailed in the following paragraphs.

The capital contribution of the Corporation consists of contribution from

the participating Government i.e., State Government. The Capital investment
of the Corporation is shown in Table-3.6
Table-3.6
Receipts Repay-
Position as on Position as on
During ment in
31-03-2012 31-03-2013
Sl. Source 2012-13 2012-13
No. Rs. In As % to Rs. In Rs. in Rs. As % to
Lakhs Total Lakhs Lakhs in lakhs Total
I State Govt.
1. Capital
Contribution 12.25 0.01 - - 12.25 0.01
2. Equity Capital 10459.48 5.39 - - 10459.48 5.02
3. Infrastructure 5325.00 2.75 25.00 5300.00 2.54

fund
II Union Govt.:
1. Capital - - - - - -
Contribution
2. Equity Capital - - - - - -
III JnNURM Grants 17481.66 9.01 4925.07 5075.87 17330.86 8.31
IV Internal 129270.79 66.67 8801.86 - 138072.65 66.23

Resources
V Loans:
a. Debentures
b. Rural Debn.
c. Commercial
Banks 9410.33 4.85 16900.00 7150.27 19160.06 9.19
d. LIC
e. IDBI
f. KUIDFC 21940.22 11.32 1163.00 4965.68 18137.54 8.70
g. Deferred payment
in ACGL, GOA
h. SIHS Scheme
i. IDBI term Loan
j. Others
193899.73 100.00 31789.93 17216.82 208472.84 100.00

Total
-: LABOUR:-
Picture: Celebration of International Women’s Day

A separate Labour Welfare Department is functioning in the Corporation

particularly to look after the day-to-day grievances of employees, to ensure
proper implementation of all the labour welfare schemes, to liaison with unions
to maintain harmonious industrial relations as well as to ensure high morale
among the employees of the Corporation.
Public utility service:
The Government of Karnataka issues notification declaring the services

of the Corporation as public utility service from time to time considering the
importance of Public Transport. Besides, depending on the urgency part of it,
the Government of Karnataka is also issuing notifications declaring services of
the Corporation as Essential Services under the provisions of the Essential
Services Maintenance Act.
Industrial Disputes:
During the year, totally 229 Industrial disputes were raised by the
employees of the Corporation at various levels like conciliation, Labour Court,
Industrial Tribunal and Hon’ble High Court of Karnataka. Totally, 299 disputes
have been disposed out of which 153 cases were disposed in favor of the
Corporation and 146 cases were disposed against the Corporation. 637 cases
including earlier references were pending as on 31.03.2013
Accident claim cases:
Totally 202 accident claim cases were disposed before the MACT and
High Court of Karnataka during the year 2012-13. Out of these, 30 cases were
disposed in favor of the Corporation and 172 cases were disposed against the
Corporation including 7 cases, which came up before the LokAdalath
(JanathaNyayalaya). During the year the Corporation has deposited

Rs.3,11,71,434/-. In all, 192 accident claim cases were pending for disposal as
on 31-03-2013 before Motor Accident Claims Tribunal and Hon’ble High
Court of Karnataka. From 30-12-2006 all the vehicles of the Corporation have
been insured with United Insurance Co. They will contest the claims in the
courts for all the accidents occurring after that date the company will contest
the claims and the responsibility of providing compensation lies with the
company.
1.Gratuity:
Gratuity to the eligible employees is paid as per the provisions of

KSRTC employees Gratuity Regulations or in-accordance with the provisions
of payment of Gratuity Act 1972 whichever is beneficial to the employees.
During the report period, the Corporation has paid an amount of Rs.670.17
lakhs as gratuity to 452 employees who have retired, resigned, expired as well
as dismissed from service.
2.Employees Provident Fund Scheme:
The Corporation is covered under the exempted category of the

provisions of the employees Provident Fund Scheme and having a separate
trust called KSRTC Employees Provident Fund Trust. During the report period,
the Corporation has made payment of Rs.1623.05 lakhs towards final
settlement of 672 employees who have retired, expired, dismissed as well as
resigned from the service. An amount of Rs.3094.27 lakhs paid to 2368
employees’ as non-refundable advance to purchase sites, construct houses and
medical purpose. The Corporation has made a refundable advance of
Rs.2839.01 lakhs in 5098 cases.
3.Medical Aid:

Employees of the Corporation as well as their dependents are entitled for

medical treatment/reimbursement as per provisions of the Karnataka Medical
Attendance Rules 1973 and the claims are being audited on par with DPAR
Circular of the Government. During the year, an amount of Rs.491.26 lakhs
was paid towards Medical re-imbursement in respect of 11,458 employees. The
Corporation is also providing medical treatment facilities at dispensary of the
Corporation, separate Clinics provided at Kempegowda Bus Stand,
Shivajinagar Bus Stand and Vijayanagar Bus Stand as well as at KSRTC
Hospital, Jayanagar.
4.Compensation under Workmen’s Compensation Act:
Employees met with an accident while on duty and sustains injuries are
extended with best possible medical treatment either in Government or in
private hospital depending on the nature of the injury. Besides, eligible
compensation amount as per the provisions of the Workmen’s Compensation
Act is also deposited with the concerned Authority. During the report period,
an amount of Rs.7,48,936/- has been deposited as compensation in respect of
one of the deceased employee.
5.Death-cum-Retirement Benefit Fund:
All the employees and officers of the Corporation are enrolled as

members of this fund contributing Rs.20/- per month. Out of which, Rs.7/- is
set apart towards risk coverage of colleague employees and the balance of
Rs.13/- will be credited to the employees account. In the event of death of an
employee while in service, the Corporation will immediately arrange for
payment of Rs.5000/- towards the funeral expenses. The dependent/nominee of

the deceased employees is entitled for lump sum benefit of Rs.25,000/- along
with contribution of the employees plus interest. During the year under Report,
a sum of Rs.84.36 lakhs has been paid from KSRTC Death-cum-Retirement
Benefit Fund to 372 employees who were retired/resigned, expired and
dismissed. Apart from this, an amount of Rs.3000/- is also paid as an additional
monitory support to the dependents of the employees expired from the MIWF.
6.Awards to the meritorious children of employees:
In order to encourage the employees to improve the educational

standards and hidden talents of their children, the Corporation has introduced
an award scheme as a part of Labour Welfare measure. Students who secure
more than 70% marks in S.S.L.C., and P.U.C., examination and more than 60%
marks in degree are eligible for the award as detailed below:
Table.3.7
Percentage Kannada English

Class
of marks Medium Medium
SSLC 70 to 80 Rs.1500/- Rs.1000/-
SSLC 80 to 90 Rs.2500/- Rs.2000/-
90 and
SSLC Rs.3000/- Rs.2500/-
above
IInd PUC 70 to 80 Rs.2000/- Rs.1500/-
IInd PUC 80 to 90 Rs.3000/- Rs.2500/-
90 and
IInd PUC Rs.3500/- Rs.3000/-
above

Final year 60 and

Rs.4000/- Rs.3500/-
Degree above
During the year 684 children of the employees of BMTC have availed
the benefit amounting to Rs.15.33 lakhs.
HUMAN RESOURCES:-
The Human Resources Development Department of BMTC started functioning

independently w.e.f. 01-12-2004. In this training center at BMTC Central
Offices and at modernised driver training center at Vaddarahalli the training is
imparted to all categories of staff working in the Corporation.
Objectives of department:
The main objective of this department is to arrange programmes by way of

training the skills and personality development of Human Resources of BMTC
keeping in view the technological changes from time to time.
The training to the staff at the newly constructed modernized training

centre at Vaddarahalli:
The refresher training is imparted continuously to the drivers regarding
safe driving and fuel saving at BMTC training centre at Central Offices and at
modernised driver training center at Vaddarahalli. The drivers are trained about
the accident free & safe driving, the traffic rules and need for its compulsory
adherence in all the training sessions. The drives are enlightened about the
placement of camera at traffic signals. The drivers involved in fatal accidents
are trained about accident free and safe driving in which special focus is given
about good driving, to follow traffic rules, the primary knowledge about
vehicle defects, stress management, yoga and maintaining good health. The
above said training has been given to 7463 drivers during 2012-13. The results
of the training are encouraging and there is improvement in KMPL.
Refresher training to Conductors and Driver-cum-Conductors:

The conductors and driver-cum-conductors are continuously trained
about effective communication, person to person communication skills, honest
and patient behavior with public, personality expression, stress management,
yoga, maintaining good health and improving traffic revenue. During the year
2012-13, 1084 conductors and driver-cum-conductors have been provided
training. The special training has been imparted to 175 conductors and driver-
cum-conductors involved in public complaints regarding complaints and to
avoid the repetition.
Induction Training for the newly recruited Staff:

The newly recruited staff are provided with induction training for minimum
one week and maximum one month according to their profession. During year
2012-13, 977 newly recruited different category staff is have been trained.
Training to women employees:

The special programs are given to the women employees and dependant of
employees for working as well as` maintaining the family responsibilities
effectively, maintaining good health and polices towards the harassment at
work places. During year 2012-13, 315 women mechanical staff has availed
the benefit of this program. The response to the above program has been good
and encouraging.

.
Program on HIV/AIDS:
The program is organized to all the employees of the Corporation
regarding HIV/AIDS awareness.
ISO certification:
The Corporation has initiated action for implementation of integrated

management system ISO-9001 and ISO-14001 certification with a view to
confirm to International Standards in Quality Management system (QMS) and
Environmental Management system (EMS).
JN-NURM Projects:-
Picture:-Jnnurm bus

Ministry of Urban Development, Government of India has formulated

National Urban Renewal Mission (NURM) for Infrastructural development in
urban areas for the selected cities in the country and Bangalore is one among
them. Under this mission, Urban Transport is considered as one of the activities
for extending financial assistance for development.
Corporation being the urban transport service provider in Bangalore city

functioning under Government of Karnataka as an independent Corporation
has the prime objective to provide affordable, economic, efficient and eco and
commuter friendly bus transport system to the citizens of Bangalore. In this
endeavor, infrastructural development plan for 5 years under the title “VISION
PLAN 2005-2011” for Rs.3000.00 crore on various infrastructural
development, HRD and IT activities has been proposed and details are
provided as below.
Table.3.8
Sl No Particulars Proposed cost (Rs in

crore)
1 Induction of new buses 1047.37
2 Improvement of Civil 1619.37

infrastructure
3 Development of HRD 150.00

infrastructure
4 Improvement of IT infrastructure 183.26

Total 3000.00
BMTC has proposed to mobilize its share of financial requirement for

this project to the tune of Rs.1500.00 crore through its internal surplus and
borrowing from financial institutions.
BMTC has identified 45 locations for Traffic and Transit Management Centers
(TTMCs) in and around Bangalore city which is incorporated in its vision plan.
These TTMC’s are urban transport infrastructure projects included in the
Traffic & Transportation Plan (CTTP) for Bruhat Bangalore city approved by
Government of Karnataka. These projects are aimed at providing enhanced
public transport services to commuters through the state of art - technology bus
terminal having Bus maintenance facilities, Public amenities, Park and Ride
facilities etc. These act as transportation hubs by providing inter modal
connectivity besides addressing the issues of traffic congestion and
environmental concerns (air pollution) in the long run.
In the first phase, 10 TTMC projects are taken up under Jn-Nurm scheme at
a project cost of Rs.333.00 crores under central and state financial assistance of
35% from GOI and 15% from GOK and 50% from BMTC internal sources.
The 10 TTMCs at Jayanagar, Kengeri, Bannerughatta, Shanthinagar, ITPL,

Vijayanagar, Koramangala, Domlur, Yeshwanthapura and Banashankari are
already inaugurated and dedicated to commuters during 2009-10 and 2010-11.
The total cost of the project as on complention is Rs.460.15 crore.
In the 2nd phase, TTMC Hebbal project is planned to take up under Public
Private Partnership (PPP) and obtained approval from GOK and 3 more TTMC

projects viz., TTMCs Indiranagar, Katriguppe & Jayanagar ‘T’ Block are
planned to take up under PPP through Single Window Clearance.
BMTC being the unique urban transport service provider in Bruhat Bangalore
city with prime objective to provide affordable, economic, efficient, hi-quality,
eco and commuter friendly bus transport system to the citizens of Bruhat
Bangalore has 12 more TTMC projects in pipeline at, BTM Layout, HSR
Layout, Nandini Layout, Nagarabhavi, Kengeri, Yelahanka, MS.

CHAPTER.4
DATA ANALYSIS & INTERPRETATION

Meaning:
Data collected during monitoring will only be useful if analyzed and reported
appropriately.
Data analysis:
When planning for monitoring and evaluation you will have asked yourself a
series of questions. These now need to be broken down into a set of sub-
questions which will enable you to find patterns for analysis. Factors such as
what influenced or prevented change, whether there were unexpected
outcomes, and whether the planned benefits were those most valued by users
can be investigated. In this way information can be obtained not just about
overall outcomes, but about which particular groups benefited or did not
receive benefits, and in what circumstances
Organizations sometimes have difficulty in analyzing qualitative outcome data.

One important element in overcoming this is to design questionnaires and other
data collection tools to allow responses against pre-set categories, so that
information can be presented quantitatively. Completely open questions and
responses, permitting a wide variety of information to be collected, will require
breaking down into categories at the analysis stage, so that themes and trends
can be established. More detailed qualitative information can be used to
supplement and illustrate the emerging themes.

Interpretation:
Interpretation means looking beyond the data itself and asking what the results
mean in relation to your evaluation questions. Be wary of assuming that there
are links of cause and effect between your project activities and results. Involve
other people in this level of interpretation and, where appropriate, acknowledge
in your report the possibility of other interpretations. Remember to place data
in context, bringing out the individual differences behind the responses.
It is not always easy to get a sense of the significance of different findings

when you first look at the data – you may lose the most important point in
studying and presenting the detail, or overemphasis a minor finding. So try to
stand back from your findings and look at the broader picture before finalizing
your report.
Operating Cost:
The term operation in business terminology refers to an activity of the

business. It is very important to study the operations of the business in detail
because depends on the operations, which it performs. The management should
always concentrate on the efficiency of the operation and also the costs
associated to the operations. It is very important to control the costs associated
to the operations for the enterprises like manufacturing companies, companies
engaged in the process of extraction of materials from earth like, coal mines
etc.
Generally, the above mentioned business enterprises depend on the operation

that it has to be performed in to produce into produce the final output. The
costs associated with such operations are generally higher. These costs are
called as “Operating Costs”.

The costs, which are incurred to perform the operation of the enterprise, are
called as operating cost.
operation or process, which helps in determining the price of the final product.
These costs are to be accounted for in order to arrive at the total costs of operation or
process, which helps in determining the price of the final product. “Cost accounting
is the and appropriate allocation of classifying, recording expenditure for the
determination of the costs of products or services, and to the presentation of suitably;
arranged data for the purposes of control and guidance of management.”It includes
the ascertainment of the costs of every process, operation, services or contrast as may
be appropriate. It deals with the cost of production, selling and distribution. It thus,
the provision of such analysis and classification of expenditure as will enable the
total cost of any particular unit of production to be ascertained with reasonable
degree of accuracy and at the same time to disclose exactly how such total cost is
constituted(i.e. the value of material used, the amount of labour and other expenses
incurred so as to control and reduce the cost). arrive at the total costs of these costs
are to be accounted for in order to operation or process, which helps in determining
the price of the final product. “Cost accounting is the classifying, recording and
appropriate allocation of expenditure for the determination of the costs of products or
services, and to the presentation of suitably; arranged data for the purposes of control
and guide of management.”It includes the ascertainment of the costs of every
process, contrast as may be operation, services or appropriate. It deals with the cost
of production, selling and distribution. It thus, the provision of such analysis and
classification of expenditure as will enable the total cost of any particular unit of
production to be ascertained with reasonable degree of accuracy and at the same time
to disclose exactly how such total cost is constituted (i.e. the value used, the amount
of material and other expenses incurred) so as to control and reduce the cost.

Table-4.1
The Table Showing the Income Statement of 2010-2011
( Amount in crores )
PARTICULARS AMOUNT
Sales 1000.63
Less: Variable Cost 847.12
Contribution 153.51
Less: Fixed Cost 97.66
EBIT 55.85
Less: Interest (Interest on Government

0.67
loan & other loans )
EBT/PROFIT 55.18
Analysis:
The above Table Shows Income Statement of the company for the year 2010-
11. The Net Sales is 1000.63 crores. Variable Cost is 847.12 crores.
Contribution is 153.51 crores. Fixed Cost is 97.66 crores. EBIT is 55.85 crores.
Interest is 0.67 crores. EBT/PROFIT is 55.18 crores.

Graph-4.1:
The Graph Shows The Income Statement of 2010-2011
AMOUNT
1200
1000.63
1000
847.12
800
600
400
200 153.51
97.66 55.85 55.18
0.67
0
Sales Less: Contribution Less: Fixed EBIT Less: Interest EBT/PROFIT
Variable Cost Cost (Interest on
Government
loan & other
loans )
INTERPRETATION:
The above Graph shows that Income Statement for the year 2010-11. In which
profit is shows 55.18 crores. Here variable cost is a main key factor for the
profit. Here the Operating Cost is favorable.

Table-4.2:
The Table Showing The Income Statement of 2011-2012
PARTICULARS AMOUNT
Sales 1130.33
Contribution 169.33
EBIT 66.52
Less: Interest (Interest on Government

1.39
loan & other loans )
EBT/PROFIT 65.13
ANALYSIS:
Contribution is 169.33 crores. Fixed Cost is 103.41 crores. EBIT is 66.52
crores. Interest is 1.39 crores. EBT/PROFIT is 65.13 crores.

Graph-4.2:
AMOUNT
1130.33
1200
960.4
1000
800
600
400 169.33
103.41 66.52 65.13
200 1.39
0
INTERPRETATION:
The above Graph in the year 2011-12 sales volume is increased by 129.7
crores, when compared to the previous financial year. In the same way profit of
the company also increased by 9.95 crores from the year 2009-2010 to 2010-
2011, so here the Operating Cost of the company is increased.

Table-4.3:
PARTICULARS AMOUNT
Sales 1327.07
Contribution 175.11
EBIT 60.04
Less: Interest (Interest on

9.69
Government loan & other loans )
EBT/PROFIT 50.35
ANALYSIS:
crores. Interest is 9.69 crores. EBT/PROFIT is 50.35 crores.

Graph-4.3:
AMOUNT
1400 1327.07
1151.96
1200
1000
800
600
400
175.11
200 115.07
60.04 9.69 50.35
0
Government
loan & other
loans )
INTERPRETATION:
The above graph reveals that sales of the company is increased by 196.74
crores, but the profit of the company is decreased by 50.35 crores when
compared to the previous financial year. Here in the year 2012-13 the fixed
cost value is increased as compare to previous year value, so the operating cost
is increased to the company.

Table-4.4:
PARTICULARS AMOUNT
Sales 1503.07
Contribution 153.08
EBIT 33.71
Less: Interest (Interest on

12.29
Government loan & other loans )
EBT/PROFIT 21.42
ANALYSIS:
crores. Interest is12.29 crores. EBT/PROFIT is 21.42 crores.

Graph-4.4:
AMOUNT
1600 1503.07
1349.99
1400
1200
1000
800
600
400
153.08 119.37
200 33.71 12.29 21.42
0
Government
loan & other
loans )
INTERPRETATION:
The above Graph of 2013-14 shows that the net sales of the company is
increased as compared to the previous year net sales, and the variable cost and
fixed cost is also increased by 1349.99 crores and 119.37 crores, but the
interest rate and profit is decreased as compare to previous financial year, the
both will be decreased by approximately 5% of the company.

Table-4.5:
The Table Showing the Payments to & Provisions for Employees
YEAR Expenses Incurred ( Rs. In crores )

2010-11 325.05
2011-12 398.12
2012-13 464.84
2013-14 583.55
Analysis:
The above Table Shows the Operating Expenses incurred for payments and
provision for employees of the company for the year 2010-11 is 325.05 crores,
2011-12 is 398.12 crores, 2012-13 is 464.84 crores, 2013-14 is 583.55 crores
expenses will be incurred.

Graph-4.5:
The Graph Shows the Payments to and Provision for Employees of

Financial Year
Expenses Incurred ( Rs. In crores )
45
40
35
2010-11
30
25 2011-12
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above graph shows that the operating expenses of the payments to and
provision for employees expenses is increased by way the of year to year, when
compared to the previous financial year 2010-11 is 398.12 crores expenses
incurred but in the 2011-12 it will increased 66.72 crores and also the expenses
is increased by 2012-13 for the financial year of the company upto 583.55
crores.
Here the company will increased the payment and provision for
employees to making a good profit and to motivate the employees to work very
sincerely and honestly.
Table-4.6:
The Table Showing the HSD ( High Speed Diesel ) Of the Financial
Year
2010-11 359.27
2011-12 412.06
2012-13 495.83
2013-14 534.27
Analysis:
The above Table Shows the Operating Expenses incurred for HSD (
High Speed Diesel ) of the company for the year 2010-11 is 359.27 crores,
2011-12 is 412.06 crores, 2012-13 is 495.83 crores, 2013-14 is 534.27 crores
will be incurred.

Graph-4.6:
The Graph Shows the HSD ( High Speed Diesel ) of Financial Year
45
40
35
30 2010-11
25 2011-12
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above graph shows that the operating expenses of the HSD ( High Speed
Diesel ) is increased by compared to year to year, when compare to previous
year the expenses is increased by 2010-11 is 359.27 crores, 2011-12 is 412.06
crores, 2012-13 is 495.83 crores and 2013-14 is 534.27 crores.
Here the company will increased the HSD expenses for increased the capacity
of bus speed and engine value and to giving the good service to public.

Table-4.7:
The Table Showing The Spare Parts Of the Financial Year
2010-11 74.74
2011-12 57.03
2012-13 88.18
2013-14 102.28
Analysis:
The above Table Shows the Operating Expenses incurred for spare
parts of the company for the year 2010-11 is 74.74 crores, 2011-12 is 57.03
crores, and 2012-13 is 88.18 crores, 2013-14 is 102.28 crores will be incurred.

Graph-4.7:
The Graph Shows the Spare Parts of Financial Year2010-11 to 2013-14
28.46
43.85 2010-11
2011-12
2012-13
29.27 2013-14
27.01
INTERPRETATION:
The above graph shows that the operating expenses of the spare parts
of the company is favorable in the year 2010-11 is 74.74 crores, but it is
decreased the value in the year 2011-12 is 57.03 crores, but automatically it is
increased the value of 57.03 crores to 88.18 crores in the year 2012-13. And
also the expenses of the company is increased by 102.28 crores in 2013-14.
Here the company will purchase spare parts for introducing new
machines for garage and adopting new technology in buses for implementation
and giving service to the public, it is the way of increasing the capital of
company.

Table-4.8:
The Table Showing the Motor Vehicle Tax Of the Financial Year
2010-11 49.91
2011-12 55.68
2012-13 66.62
2013-14 76.94
Analysis:
The above Table Shows the Operating Expenses incurred for motor vehicle tax
of the company for the year 2010-11 is 49.91 crores, 2011-12 is 55.68
crores, and 2012-13 is 66.62 crores, in 2013-14 is 76.94 crores will be
incurred.

Graph-4.8:
The Graph Shows the Motor Vehicle Tax of Financial Year
28.46
43.85 2010-11
2011-12
2012-13
29.27 2013-14
27.01
INTERPRETATION:
The above Graph shows that the Expenses is increased compared to

previous year 2010-11 and 2011-12 In the year 2012-13 the expenses is 66.62
crores increased and also the year 2013-14 it will increase 76.94 crores for the
paid tax of motor vehicle in the company expenses.
Here in motor vehicle tax of the company will introduced new high
qualified and new technology to adopting that motor vehicle (bus), so the tax
will be increased year to year.

Table-4.9:
The Table Showing the Other Operating Cost Of the Financial Year
2010-11 28.46
2011-12 29.27
2012-13 27.01
2013-14 43.85
Analysis:
The above Table Shows the Operating Expenses incurred for Other Operating
Cost of the company for the year 2010-11 is 28.46 crores.2011-12 is 29.27
crores, and 2012-13 is 27.01 crores, 2013-14 is 43.85 crores will be incurred.

Graph-4.9:
The Graph Shows the Other Operating Cost of Financial Year2010-11 to

2013-14
45
40
35 2010-11
30
2011-12
25
20 2012-13
15 2013-14
10
5
0
2010-11 2011-12 2012-13 2013-14
INTERPRETATION:
The above Graph shows that the Expenses of Other Operating Cost in 2010-11
it is favorable. The expenses is increased in the year 2011-12 upto 29.27
crores, but it is decreased compared to previous year operating cost it will in
the year 2012-13 is 27.01 crores, suddenly in the year 2013-14 increased 43.85
crores of the company expenses.

Table-4.10:
The Table Showing the Operating Leverage Of the Financial Year

2010-11 To 2013-14
2010-11 2011-12 2012-13 2013-14

PARTICULARS
(Amounts in 000’s)
Contribution 153.51 169.33 175.11 153.08
EBIT 55.85 66.52 60.04 33.71
Calculation of Operating Leverage:
2010-11:
Operating Leverage =
Contribution
EBIT
= 153.51
55.85
= 2.75 times

2011-12:
Contribution
Operating Leverage = =…………..……………..

EBIT
169.33
=…………..……………..
66.52
= 2.54 times
2012-13:
Contribution

EBIT
175.11
=…………..……………..
60.04
= 2.92 times

2013-14:
Contribution

EBIT
153.08
=…………..……………..
33.7
= 4.54 times
Analysis:
The above Table shows that the Operating Leverage of the company in the year
of 2010-11 is 2.75 times, 2011-12 is 2.54 times, 2012-13 is 2.92 times and
2013-14 is 4.54 times.

Graph-4.10:
The Graph Shows the Operating Leverage of the Financial Year
2010-11 to 2013-14
4.5
3.5
2.5
1.5
0.5
0
5 4 3 2 1 0
INTERPRETATION:
The above graph shows that the Operating Leverage of year 2010-11 is
2.75 times, after next year it is decreased by in 2011-12 is 2.54 times, next
financial year it is increased in the year 2012-13 is 2.92 times and 2013-14 is
4.54 times of the company.
Here the graph reveals that the operating leverage affected on operating
activities of the company, hence the operating leverage is helpful to calculate
the total cost of the company.

Graph.4.11:
The Graph shows the Total Operating Cost Sheet of the Financial Year
2010-11 To 2012-13
80000
70000
60000
50000
40000
30000
20000
10000
INTERPRETATION:-
The above graph shows that the operating cost sheet of the company is
increased by one year to another year, when compared to previous year
operating cost sheet, the total operating cost is increased to year to year.
Here the company is increased the operating cost in every financial year
because of making the good profit and to gain more profit of the business to the
company income.

Table 4.11
The Table shows the Total Operating Cost Sheet of the Financial Year
PARTICULARS 2010-11 2011-12 2012-13
(a) Standing Charges;

Taxes On Passenger Vehicles 6710.31 7735.13 8652.50
Total A 6710.31 7735.13 8652.50
2010-11 to 2012-13

(b) Maintenance Charges : 12759.13 147939.41 15892.52

Repairs And Maintenance
12759.13 147939.41 15892.52
Total B
(c) Operating Running Charges: 50182.50 54381.07 60258.12

Fuel, Oil, And Lubricants - 306.82 -
Cleaning And Seeping Charges
50182.50 54687.89 60258.12

Total C
69651.94 77362.43 84803.14

Grand Total (A+B+C)
Analysis
The above table shows the operating cost sheet of the company for the year
2010-11 to 2012-13. Here in the in the 2010-11 the total operating cost sheet is
69651.94 lakhs, 2011-12 is 77362.43 and in 2012-13 is 84803.14 lakhs
incurred.

CHAPTER-5
FINDINGS, SUGGESTIONS AND CONCLUSION
FINDINGS:-
1. The profit of company is increasing from one year to another year,

however in the year 2010-11 its favorable, but it is increased in the next
2011-12.
2. From the above analysis in the year 2012-13 the profit of the company is
decreased as compared other previous year profit, but the sales is
increased.
3. The operating expenses of the company is increased from year to year,

because to increase the company profit and to motivate the employees to
work sincerely and honestly.
4. The operating expenses is increased it is helpful in adopting new

technology and implementation of company service to the public.
5. However leverage is increasing from year to year in the same manner

operating costs and financial costs are respectively increasing.
6. The operating leverage is favorable because sales are increasing year on

year. When sales volume has a positive magnifying it effect on EBIT.

7. In the above analysis and study we don’t have any direct tax because it’s
a service oriented govt. company.
8. All the profits of the company go’s to the respected government.
9. Contribution of the company is in average basis it is increasing by one

year to another year.
10. The operating leverage is increased in the total cost of the company from
year to year.
11. The main aim of the company is giving good service to the public from
adopting new technology and innovation of the company.
12. To giving more helping facility to employees and depends, because to

promote the employees for good work.

SUGGESTION
From the above study we can suggest to the company as follows:
1.To reduce the expenses and increase the profits. To maintain the same
leverage in between operating leverage of the company.
2. To maintain the same revenues through for maintaining the good

service to the society.
3. To take care of losses in future year of the company.
4. BMTC should focus on reduction in the present costs in order to

increase the profit.
5. The company can make optimum utilization of its own financial

resources rather than borrowing from financial institutions.
6. To increase the profits of the BMTC by giving prominence to sales

promotion.
7. BMTC should makes a strategic customer analysis to understand the

expectation of the customers or society.
8. To maintain the good relationship between the public and employees.

9. To increase the profit of the company with taking into consideration of

customers capability to pay.
10.BMTC should gain state and national competitive advantage over the
other competing firms.
11.To adopt new more technology in the technical service to the giving
good facility to the public.
12.To maintain the cleaning and other facility in bus stations and also in
satellite stations.
13.BMTC should make strategic value chain analysis for the efficient
utilization and control over the resources.
14.To give a proper training to the employees for how to behave with
passengers in the some miss understanding that time.

CONCLUSION:-
From the above study we can conclude that:
1. Profit of the company is increasing from one year to another year. Only
in the year 2012-13 and 2013-14 it is seen down continuously.
2. Costs of the company is increasing from one year to another year. When
the profit is decrease also cost is not decreased.
3. Performance of the company is increasing the profit of the society for the
help of service industry.
4. Interest is decreasing from one year to another next year. But only in the
year 2013-14 it is increased more.
5. Operating expenses and operating costs are also increasing by one year
to another year.
The operating leverage of the company is fluctuating from one year to

another year, because of the reason of inflation and deflation in the
economy. Behalf of these reasons the prices of fuel, oil and other
employee costs are increasing.

BIBLIOGRAPHY
Sl.No Title Author Name Edition Year Published
1. Business Research Donald R Cooper 9th 2006 Tata McGraw-

Methods Hill
Pamela S Schindler
2. Cost Accounting H.S.Mahabaleswar-a 1st 2006 HPH

Bhatta
3. Cost Accounting Ravi M Kishore 4th 2012 TAXMANN
4. Methods & M.N.Arora 2nd 2008 HPH

Techniques of Cost
Accounting
5. Advanced Cost and V.K.Saxena 7th 2006 Sulthan Chand &

Management Sons
C.D.Vashista
Accounting
Web Addresses:-
www.bmtc.co.in
www.mybmtc.com
www.serviceindustry.com
www.google.com
www.wikipedia.com


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A Study on Operating Cost at BMTC

“A STUDY ON OPERATING COST AT BMTC"

UNDER THE GUIDANCE OF

Dr. SYED SAIFULLA M.COM,PH.D

ASSISTANT PROFESSOR,DEPARTMENT OF COMMERECE

HASANATH COLLEGE FOR WOMEN

HASANATH COLLEGE FOR WOMEN

INTRODUCTION TO SERVICE INDUSTRY

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 2

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 3

Services Sector in India

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 4

INTRODUCTION TO OPERATING COST

Definition of 'Operating Cost':

The information concerning the business enterprise is very helpful to the

The term operation in business terminology refers to inactivity of the business.

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 5

Generally, the above mentioned businesses enterprises depend on the operation

product. “Cost accounting is the classifying, recording and appropriate

Methods of Costing and Types of Costing

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 7

Different Methods of Costing

Operating Costing or Service Costing: Where the cost of operating a service

treated as separate units in operating costing. In the case of a Nursing Home, a

Multiple Costing: When the output comprises many assembled parts or

Uniform Costing: This is not a separate method of costing. This is a system of

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 9

accounting practices in the identical firms or industry. This helps in fixation of

Marginal Costing: In Marginal Costing, it allocates only variable costs i.e.

Absorption Costing: The technique of absorbing fixed and variable costs to

Standard Costing: When costs are determined in advance on certain

incurred. Almost all organizations use historical costing system of accounting

Reconciliation of Cost and Financial Accounts

Cost accounts act as a check on financial accounts. To achieve this, we have to

1. Integral or integrated Accounting: When cost and financial transactions

2. Non-integral or Independent Accounting. When the cost and financial

Integral Accounting: means the maintenance of cost and financial accounts in

 Cost Ledger: It contains all the nominal accounts and known as

1. Work-in-progress ledger: It is a subsidiary ledger which contains an

 Finished Stock Ledger: It is a subsidiary ledger which contains an

 Stores Ledger: It is a subsidiary ledger where in all the items of stores

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 12

reconciliation of costing and financial profit or loss.

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 13

Need for reconciliation of Cost and Financial Accounts.

THE FEATURES OF COST ACCOUNTING :

1. It is a process of accounting for costs

2. It records income and expenditure relating to goods and services

3. It provides statistical data on the basis of which future estimates are

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 14

available of the previous periods and current period.2. It provides

4. The extract cause of decrease or increase in profit/loss can be detected.

5. Efficiency of public enterprises. Costing has a more important role to

6. The efficiency of a public sector can be judged by comparing it cost of

Reduced application operating costs:

After an application is deployed, the costs of operating the application become

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 15

Preservation of back-end systems

Reduced maintenance and operational costs

HASANATH COLLEGE FOR WOMEN,BANGALORE Page 16

Adjustments to suit available system

Reduced workstation requirements

Common functionality across channels

Calculating the Operating Cost of a Vehicle