A SUMMER INTERNSHIP REPORT

ON
COST AND BUDGET
AT
C.M.P.D.I. HEAD QUARTER
KANKE, RANCHI

A Report Submitted in partial fulfillment of the Bachelor’s Degree in Business

Administration
(St. Xavier’s College Ranchi)

By

KUMAR SAHIL

Exam Roll No. 18PBBA039941 Session. 2018 - 2021

Department of BBA
St. Xavier’s College- 834001
Ranchi

[1]
 DECLARATION

I hereby declare that the work incorporated in this

report entitled “COST AND BUDGETING” is the
outcome of the study undertaken by me carried out
under the guidance of CA. ARIF ALI and CMA.
PRADEEP KUMAR PANDIT.
I further declare that the matter in this report has not
been submitted by me as a whole or in part at any
other University or Institution for the award of any
Degree or Diploma.

DATE - 23/03/2021
PLACE - C.M.P.D.I. H.Q., RANCHI

[2]
 CERTIFICATE

THIS IS TO CERTIFY THAT Mr. KUMAR SAHIL

(18PBBA039941) WHO IS PURSUING B.B.A.
FROM St. XAVIER’s COLLEGE, RANCHI HAS
SUCCESSFULLY COMPLETED HIS
INTERNSHIP IN FINANCE AND HAS
SUBMITTED HIS STUDY REPORT ON COST
AND BUDGETING IN CMPDIL BETWEEN
24/02/2021 TO 23/03/2021.

[3]
 ACKNOWLEDGEMENT

I WOULD LIKE TO EXPRES MY GRATITUDE TO MY

GUIDES AND MENTORS CA. ARIF ALI and CMA. PRADEEP
KUMAR PANDIT OF FINANCE DEPARTMENT WHOSE
MENTORING AND GUIDANCE HAVE HELPED ME TO
PATCH THIS INTERNSHIP AND MAKE IT FULL PROOF
SUCCESS. THEIR SUGGESTIONS AND INSTRUCTIONS
HAVE SERVED AS THE MAJOR CONTRIBUTION
TOWARDS THE COMPLETION OF MY STUDY PERIOD IN
CMPDIL, RANCHI.
THEN I WOULD LIKE TO THANK ALL THE EMPLOYEES
OF THE CMPDIL, RANCHI, MY PARENTS AND FRIENDS
WHO HAVE HELPED ME WITH THEIR VALUABLE
SUPPORT, SUGGESTIONS AND GUIDANCE WHICH HAS
BEEN HELPFUL IN VARIOUS PHASES OF THE
COMPLETION OF MY INTERNSHIP.
LAST BUT NOT THE LEAST I WOULD LIKE TO THANK THE
H.R.D. OF CMPDIL, RANCHI FOR GIVING ME THE
OPPURTUNITY TO WORK IN THEIR RENOWNED
ORGANIZATION.

KUMAR SAHIL
18PBBA039941 | SXCR

[4]
INDEX

SL NO. TOPIC PAGE NO.

1 BRIEF INTRODUCTION ABOUT 08
COAL INDIA LTD.
2 SUBSIDIARIES OF CIL 09

3 DETAILS OF SHAREHOLDERS 10
OF CIL
4 MISSION & VISION OF 12-13
C.M.P.D.I.L.
5 INTRODUCTION OF C.M.P.D.I.L. 14
6 MARKETING POLICIES 17
7 RESPONSIBLITIES 17
8 SERVICES 18-21
9 CORPORATE OBJECTIVE 22-23

10 FUNCTIONS 23-25

11 STRATEGIES 25-26

12 PERFORMANCE AT A GLANCE 27-28

[5]
13 S.W.O.T. ANALYSIS 29-31

14 DEFINATION OF COST & 33-34

BUDGETING
15 TERMINOLOGY OF BUDGET 34-36

16 TYPES OF BUDGET 36-38

17 FUNCTION OF BUDGETING 38

18 ADVANTAGES & LIMITATIONS 39-40

19 PRESENT SCENARIO OF 40-42

COSTING IN C.M.P.D.I.L.

20 COST SHEET 43-46

21 BUDGETING 47-48

22 MOU 49

23 ANNUAL ACTION PLANS 50

24 SUGGESTION 51

25 BENEFITS 52

26 CONCLUSION 53-54
[6]
27 BIBLIOGRAPHY 55

[7]
INTRODUCTION of CIL

• Coal India Ltd. (CIL) is an Indian state controlled

coal mining company.
• It was founded in 1975.
• CIL is a parent company of CMPDIL.
• Headquarter of CIL is in Kolkata, West Bengal,
India.
• It is largest coal producer in the world and is a
Maharatna company.
• It contributes to around 82% of the coal production
in India.
• In April 2011, CIL was conferred the Maharatna
status by Union Government of India.
• As on October 2015, its Market capitalization was
US$ 31 Billion making it India’s 8th most valuable
company by market value.
• Revenue of CIL is US$12 Billion in 2017.
• Government of India owns CIL and controls the
operation of CIL through Ministry of coal.

[8]
SUBSIDIARIES OF CIL

Name of Employees Revenue Coal Production

subsidiaries FY (2019- (RS (in MT)
2020) Billions)
COKING NON- TOTAL
COAL COKING PRODUC
COAL TION
BCCL 56,051 89.37 26.97 4.24 31.2
1
CCL 45,051 92.38 16.15 31.90 48.0
6
ECL 68,681 97.40 0.043 33.86 33.9
1

MCL 22,259 120.93 _ 107.8 107.

8

NCL 16,226 99.86 _ 70.02 70.0

2

SECL 67,800 176.48 0.157 118.0 118.

6 21
WCL 50,071 74.23 0.330 41.95 42.2
87
CMPDI 3,629 6.05 _ _ _

[9]
TOTAL 3,29,768 756.7 43.65 407.8 451.
3 48

SHAREHOLDERS OF CIL

SHAREHOLDERS (as on 21 Shareholding (%)

September 2020)
Government of India 79.65

Foreign Institutional 8.52

Investors (FII)
Domestic Institutions 8.62

Non – Institutional 3.21

Total 100

[10]
INTRODUCTION OF CENTRAL
MINE PLANNING & DESIGN
INSTITUTE LTD.
(C.M.P.D.I.L)

(A SUBSIDIARY OF COAL INDIA LTD.)

A Mini Ratna Company

[11]
MISSION AND VISION OF C.M.P.D.I.

VISION
To be the global market leader in an
expanding earth resource sector and
allied professional activities.

[12]
MISSION

To provide total consultancy in coal and

mineral exploration, mining, engineering
and allied field as the premier consultant in
India and also in the international arena

[13]
INTRODUCTION

• The Central Mine Planning & Design Institute

(C.M.P.D.I) is a fully owned subsidiary of Coal India Ltd.
• It was established in 1974 under Coal Mines Authority
Ltd. (CMAL) former name of coal India.
• It came out from the planning division of now defunct
National Coal Development Corporation (NCDC) as a
single window set up to consolidate all aspect of Indian
mining industry under one roof.
• Subsequent to the nationalization of coal mines in India,
C.M.P.D.I was reconstituted as a public sector
undertaking in 1975.
• It is a public sector undertaking under the Government of
India and is rated as a Schedule –B and Mini Ratna –II
company in 2009.
• It is engaged in the field of environmental engineering and
provides consultancy and engineering services across the
globe.
• It is involved in mineral exploration, resource
management, mining geology, hydro-geological and
Geophysical studies and engineering geology
investigations.

• It qualified to offer consultancy services in the fields of

environmental engineering such as open pit and
[14]
 underground mine planning & design in coal, lignite &
other minerals.
• The institute is active in geological exploration,
geological, geotechnical & allied support, mine planning
& design, environmental management & training services.
• Mr. Shekhar Sharan is the CMD of C.M.P.D.I.

REGIONAL INSTITUTES OF C.M.P.D.I.L

SL NO. REGIONAL INSTITUTE AREA

1 RI-I ASANSOL
2 RI-II DHANBAD
3 RI-III RANCHI
4 RI-IV NAGPUR
5 RI-V BILASPUR
6 RI-VI SINGRAULI
7 RI-VII BHUBANESWAR

[15]
[16]
MARKETING POLICY

1. C.M.P.D.I is committed to provide consultancy services in

all possible areas as and when demanded by Coal India Ltd.
and its subsidiaries on priority basis.

2. C.M.P.D.I. is also committed to undertake jobs from

outside CIL clients with due consideration of the
importance and strategic values, wherever such outside
consultancy jobs can be undertaken.

RESPONSIBILITIES OF C.M.P.D.I.

C.M.P.D.I. has two distinct responsibilities, business and

corporate, as per the set mandate.

BUSINESS FUNCTIONS
Mineral exploration consultancy and support, infrastructure
engineering and environmental management.

[17]
CORPORATES FUNCTIONS
Preparation and upkeep of data on coal inventories, operations
and potential, advising the Ministry of Coal and NITI AAYOG
on coal related matter, nodal agency functions on behalf of the
Government of India in the matters related to mineral
exploration, co-ordination activities between related companies
in India and research development in the field of mineral
mining

MAJOR SERVICES OFFERED BY

C.M.P.D.I

1. GEOLOGICAL EXPLORATION & DRILLING

• Detailed geological exploration of regionally

explored blocks with a view to generate reliable
geological and geo-engineering data and assess in
coal reserves for preparation of mining project report.
• Geophysical survey through multi-probe geophysical
logging.
• High resolution shallow seismic survey.

[18]
 • Hydro geological investigation and identification of
coal bed methane resources.

2. PROJECT PLANNING & DESIGN

• Preparation of feasibility reports, detailed project

reports and detailed engineering drawing for
underground and open cast mines, master plans of
coal fields, coal and minerals beneficiation &
utilization plants, coal handling plants, workshops
and other ancillary units .
• It also includes Infrastructure facilities including
techno-economic evaluation of various scheme &
project reports for investment decisions.

3. ENGINEERING SERVICES

• Detailed design of system and sub-system for mines,

beneficiation and utilization plants, coal handling
plants, power supply system, workshop and other
units, architectural planning & design.

4. RESEARCH & DEVELOPMENT

[19]
 • Serving as nodal agency for all S&T schemes funded
by Ministry of Coal and R&D scheme funded by
R&D Board of CIL.
• C.M.P.D.I., on its own, also takes up applied research
and development in the field of mining,
beneficiation, utilization, environment, exploration,
etc.

5. LABORATORY SERVICES

• Well-equipped state of art laboratories are

providing quality analysis of mines gases, coal core
sample, Non-Destructive Testing (NDT) air, water,
washability characteristics of coal , physic-
mechanical strength of strata, petrography etc.

6. ENVIRONMENTAL SERVICES

• Preparation of Environment Management Plans, its

implementation and monitoring through Regional
Institute (RI) and Headquarter and analysis of air,
water, noise sample at in-house CPCB approved
laboratories.

[20]
 • Utilization of remote sensing satellite data for land
use monitoring has also started for entire CIL
mines.

7. INFORMATIONAL TECHNOLOGY

8. HUMAN RESOURCES DEVELOPMENT

9. SPECIALISED SERVICES

❖ Geometrics including Remote Sensing

❖ Ventilation & Gas survey in mines.
❖ Controlled Blasting.
❖ Performance evaluation of new explosives.
❖ Mining Electronics.
❖ Mine capacity Assessment.
❖ Mine Support Design, Rock Mass Rating (RMR).
❖ Non-Destructive Testing.
❖ Management System Consultancy.
❖ Measurement of Coal and OBR.

[21]
CORPORATE OBJECTIVE

Major objective of C.M.P.D.I. are as follows:-

1. assessment for optimum mine planning.

2. To optimize generation of internal resources by

improving productivity of resources, preventing wastage
and to mobilize adequate external resources to meet
investment need.

3. Project planning and designing for coal mines, coal

beneficiation and Utilization Plant, etc.

4. To promote, co-ordinate and ensure effectiveness of

research activities in coal sector under S&T and R&D
schemes.

5. To undertake formulation of Environmental Management

Plans (EMPs), Environment Impact Assessment (EIA To
provide consultancy support in coal & mineral
6. exploration including geological, geophysical,
hydrological & environmental data generation.

7. To improve quality of exploration and feasibility reports

providing higher level of confidence of geological

[22]
 8. ) and Mines Closure Plans for coal mining and related
projects.

9. Extending remote sensing services for land reclamation

monitoring, environmental data generation, vegetation
cover mapping, coal mine fire mapping, large scale
topographical mapping of coalfield, infrastructure
planning including selection of TPS and Washery
location, etc.

10. To provide field and laboratory services to

subsidiary coal producing companies of CIL.

11. To provide consultancy services to outside

organizations other than CIL and its subsidiaries.

FUNCTIONS OF C.M.P.D.I.

A brief description of all the functions of CMPDI is given

below:-

A. Geological exploration and support services – This core

function of CMPDI since its inception, offers the following
services for mineral deposits:-
• Planning and execution of exploration;
• Resource evaluation and documentation for
investment and exploitation decisions;
[23]
 • Related field tests and laboratory support.

B. Planning, design and support services - Being another

core function of CMPDI since inception. The following
services are offered for construction and operation of
mining, beneficiation, utilization and other infrastructure
and engineering projects.

• Formulation and / or evaluation of conceptual / pre-

feasibility / feasibility studies, project reports and basic
and detailed engineering design;
• Engineering and other related consultancy and support;
• Related field tests and laboratory support.

C. Environmental management services – under offer since

1992, these cover all round support to mining and mineral
industry for environmental management during their
planning and operations including Mine Closure Planning,
laboratory and test support. Land reclamation monitoring of
opencast mines producing more than 5 million cu.m. (Coal
+OB) per annum are being carried out by satellite
surveillance on yearly basis where that in respect of less than
5 million (Coal +OB) per annum are being carried out since
2011.

D. Management system services – under offer since 1997,

these cover complete range of consultancy and support for
creation, documentation, implementation and training
[24]
 various management system standards, e.g. ISO 9001
(Quality Management System), ISO 14001 (Environmental
Management System) etc.

E. Human Resources Development – Under offer since 1976,

these cover technical, managerial and management -system
related training to the market clientele, particularly in
mineral and mining sector.

F. Specialized services – Expert consultancy services are also

offered in the field of Geomatics including Remote Sensing,
Ventilation & Gas survey in mines, Controlled Blasting,
Performance evaluation of new explosive, Mining
Electronics, Mine capacity Assessment, Mine Support
Design, Rock Mass Rating (RMR), Non-Destructive
Testing, Management System Consultancy, OBR Check
Measurement, etc.

STRATEGIES OF C.M.P.D.I

With the depth of knowledge and market place CMPDI has

in mineral, mining and allied sectors, it is adopting the
following strategies and business plan to realize its
corporate objective and vision:-

[25]
1. Enhancing exploration capacity with addition of
skilled manpower, equipment, plant & machinery, etc.

2. Diversification in newer areas of mineral, mining and

allied engineering sectors other than coal.

3. Increasing market share for outsider clients.

4. Tie-up with strategic partners both within and outside

the country.

5. Upgradation and modernization of existing facilities

and infrastructure.

6. Increasing operational efficiency and work quality.

7. Improving corporate culture and internal systems.

8. Rationalizing manpower utilization and executive

manpower induction to ensure continued planning and
specialized support to the coal industry.

[26]
 PERFORMANCE AT A GLANCE

(Rs in crores)
SL Particular 2019-20 2018- 2017- 2016-
no. As per 19(As 18(As per 17(As per
ind. AS per GAAP) GAAP)
Ind.AS)
1 Sales of 930.52 759.27 759.27 726.72
services(net
sales)
2 Profit before tax 62.83 38.03 42.54 39.33

3 Profit after tax 38.82 23.97 28.48 25.04

4 Retained profit 38.82 23.97 28.48 25.04

5 Net Block 135.19 100.26 99.99 81.58

6 Net worth 255.7 215.25 214.98 182.84
7 Current Asset 820.03 799.38 688.23 791.28
8 Current 602.09 612.45 550.27 575.89
Liabilities
9 Working Capital 217.94 186.93 137.96 215.39
(7 -8)
10 Capital 353.13 287.19 237.95 296.97
Employed
11 Gross Margin 83.40 50.66 50.66 49.90

[27]
12 Return on capital 17.79 13.24 17.88 13.24
Employed
13 Earnings per 2131.8 480.04 1496.00 1315.13
Share 3

Note:-The Unit of Earning per Share is in Rs

Net worth = Paidup capital + Reserve &

Surplus –Accumulated loss & deferred
revenue expenditure

Gross Margin = Net Profit + Depreciation +

Interest + PP Adjustment + Tax Expenses

Capital Employed = Net Block + Working

Capital

[28]
 S.W.O.T. ANALYSIS

STRENGTH
• C.M.P.D.I is truly a multi-disciplinary organization,
perhaps one of its kind, providing almost all the
services prior to mining, during the mining operation
and after the mining operations under one roof.

• With strategically located RIs, it is able to provide

door-step service to CIL subsidiaries.

• It has coalfield-wise/mines-wise strong data base of

CIL subsidiaries.

• Has rich experience of executing over 1300 integrated

coal exploration projects, planning of over 1000
mining Project Reports with individual project capacity
up to 70 MTY opencast mine and 3.5 MTY
underground mine, large number of infrastructural-
facilities, etc.

• It has the largest infrastructure for coal exploration

(largest fleet of drill in the country for detailed
[29]
 exploration) having geographical spread in 8 states,
laboratory facilities, baseline data generation capacity,
etc.
WEAKNESS

• Shortage of skilled and qualified personnel in

executive and non-executive cadre.

• High rate of Attrition (New Recruits are leaving the

organization after being trained).

OPPORTUNITIES

• The demand for coal is likely to continue at least up

to 8 to 10 years providing scope for C.M.P.D.I.
services.
• Need to enhance the application of IT in coal sector.

• Diversification in non-coal sector.

• Expertise in providing specialized services related to

CBM/CMM/UCG/Shale Gas, Geomatics, NDT, etc.
THREATS

[30]
• In absence of commensurate growth in the regional
exploration, sustenance of the present detailed
drilling capacity beyond XII plan seems difficult.

• Undue delay in obtaining forestry clearances for

drilling operation with required number of borehole
density.

• Restrictions in exploration in forest area may pose

problem in expansion programme.

• Poor law and order conditions in different states pose

hindrance to exploration works.

• Further opening of the coal sector may result in

market competition from other domestic or
international consultancy service providers.

• Some doubt have started being raised over India’s

reducing appetite for thermal coal and sustenance of
the coal demand over a longer time horizon in future.

[31]
COST

AND

BUDGETING
[32]
COST & BUDGET

DEFINITION
Budgeting and cost control comprises the estimation of
costs, the setting of an agreed budget, and management of
actual and forecast costs against that budget.

A budget identifies the planned expenditure for a project

programme or portfolio. It is used as a baseline against which
the actual expenditure and predicted eventual cost of the work
can be reported.

Initial cost estimates can be comparative or parametric. These

are defined as the feasibility and desirability of the initiative are
investigated and a greater understanding of scope, schedule and
resources is developed.

The major component of budget are:-

1. The base cost estimate.

2. Contingency.

[33]
 3. Management reserve

The base cost estimate is made up of known costs

such as:-
1. Resourcing (e.g. staff costs or consultants’ fees)

2. Previous year expenditure

3. Expected increment

4. Accommodation

5. Consumable (e.g. power)

6. Expenses (e.g. travels)

7. Capital items

TERMENOLOGY OF BUDGET

BUDGET, BUDGETING, BUDGETARY CONTROL

BUDGET

[34]
 Budget represents the objectives of any organization that
is based on the implication of forecast and related to
planned activities.

Budget is neither an estimate nor a forecast because an

estimation is a predetermination of future events, may be
based on simple guess or any scientific principles.

BUDGETING

Budgeting represents the formation of the budget with

the help and coordination of all or the various departments
of the firm.

BUDGETARY CONTROL

Budgetary control is a tool for the management to allocate

responsibility and authority in planning for future and to
develop a basic of measurement to evaluate the efficiency of
operations.
Budgetary control helps in coordinating the economic trends,
financial position, policies, plans, and actions of an
organization.
Budgetary controls also helps the management to ensure and
control the plan and activities of the organization. Budgetary

[35]
control makes it possible by continuous comparison of actual
performance with that of the budgets.
“Budgets are the individual objectives of a department whereas
budgeting may be said to be the act of building budgets.
Budgetary control embraces all this and in addition, includes
the science of planning the budget themselves and utilization of
such budget to effect an overall management tool for the
business planning and control.”

By
Rowland and Williams

TYPES OF BUDGETS

Budget can be categorized in various ways.

FUNCTIONAL BUDGETS
It relates to any function of the firm such as sales,
production, cash, etc. Following budgets are prepared in
function budgets:-

❖ Sales Budget
❖ Production Budget
❖ Material Budget
❖ Manufacturing Budget
[36]
 ❖ Administrative Cost Budget
❖ Plant Utilization Budget
❖ Capital Expenditure Budget
❖ Research and Development Cost Budget
❖ Cash Budget

MASTER BUDGET OR SUMMARIZED BUDGET OR

FINALIZE PROFIT PLAN

This budget is very useful for the top management of the

company because it covers all the information in summarized
manner.

FIXED BUDGET
It is a rigid budget and is drawn on the assumption that there
will be no change in budget level.

ZERO BASE BUDGETING

Zero base budgeting is not based on the incremental approach;
previous year figures are not adopted as base.

FLEXIBLE BUDGET

It is also called a sliding scale budget. It is useful in:-

[37]
 • The new organization where it is difficult to foresee.
• The firms where activity level changes due to seasonal
nature or change in demand.
• The industries based on change of fashion.
• The unit which keep on introducing new product.
• The firms which are engaged in ship-building business.

FUNCTIONS OF BUDGETING

Budgeting in its general sense is the act of quantifying

objectives in financial terms. Budgeting assists managers
in decision making process in an organization. It is the
function of management accountant to provide
information needed in budgeting process.

Functions of budgeting are:-

1. Planning:-The budget is a formal planning

framework that provides specific deadline to achieve
departmental objectives and contributes towards the
overall objectives of an organization.

2. Coordination:-It is a managerial function under

which all factors of production and all departmental
activities are balanced and integrated to achieve the
objectives of the organization.

[38]
 3. Communication:-It is necessary in an efficient
organization that all people be informed about the
objectives, policies, programmes and performances.
Budgets inform each manager of what others have
agreed to do.

ADVANTAGES
1. Budgeting compels and motivates management to makes
an early and timely study of its problems. It generates a
sense of caution and care, and adequate study among
managers before decisions made by them.
2. Budgeting provides a valuable means of controlling
income and expenditure of business as it is a “plan for
spending”.
3. Budgeting provides a tool through which managerial
policies and goals are periodically evaluated, tested and
established as guidelines for the entire organization.

LIMITATIONS

1. Planning, budgeting or forecasting is not an exact science;

it uses approximation and judgment which may not be cent
percent accurate. At best a budget is an estimate no one
known precisely what will happen in future.
[39]
 2. The success and utility of budgeting depends on the
corporation and participation of all members of
management. Many a time budgeting has failed because
executive management has paid only lip service to its
executions.
3. The establishment of a budgeting process takes time.

PRESENT SCENARIO
COSTING

The costing of services provided by C.M.P.D.I.L. is done

differently which is as follows:-

EXPLORATION

Costing of exploration services, which involves drilling in

coal bearing blocks is rated as drilling per meter. All the
cost related to this cost centre is charged directly to
Exploration services. Indirect cost/common expenses is
allocated to this cost centre on the basis of manpower
expenses. It has completed over 1000 coal exploration
projects in India in all types of terrain and geological set-
up. This has resulted in providing more than 95 billion
tons of expected coal reserves. C.M.P.D.I. has drilling
areas spread over seven states in India through 18 drilling
camps. It is the most important services provided by
[40]
C.M.P.D.I. It expenses 69% in Exploration of total
expenses occurred.

PLANNING AND DESIGN

Costing of planning and designing services in C.M.P.D.I.

is rated as per Engineering Days. It is one of the most
important services offered by C.M.P.D.I. In P&D includes
preparation of feasibility reports detailed engineering
drawing for underground and open cast mines, master
plans of coalfield, coal and mineral beneficiations and
utilizations plants, coal handling plants, workshops and
others ancillary units and infrastructure facilities including
techno-economics evaluation of various schemes and
project reports for investment decisions. P&D services
accounts for 26% of total expenses incurred as CMPDI as
a whole.

NATURAL RESOURCE MONITORING (NRM)

The costing of natural resource monitoring services is

rated as per Engineering Day. In NRM the most
important is Environmental Monitoring. In environmental
services it includes preparation of Environment
Management Plans, its implementation and monitoring
[41]
through Regional Institutes (RIs) and Headquarters and
analysis of air, water, noise sample at in-house and CPCB
approved laboratories. Utilization of remote sensing
satellite data for land use monitoring has also started for
entire CIL mines. NRM services accounts for 5% of total
expenses incurred of CMPDI as a whole.

EXPENDITURE BREAKUP 2019-20 ON THE

BASIS OF SEGNMENT

EXPENDITURE
P&D EXPLORATION ENVIRONMENT

5%

26%

69%

[42]
COST SHEET

A cost sheet is a report on which is accumulated all the cost

associated with a product or services. A Cost Sheet is used
to compile the margin earned on a product or services and
can form the basis for the setting of prices on similar
products in the future. It can also be used as the basis for a
variety of cost control measures.

In C.M.P.D.I. the cost sheet is made by all its (RIs) and after
that they report it to the Headquarter who consolidate it and
make final cost sheet.
Cost sheet of C.M.P.D.I. is divided into 3 categories
• P&D Service cost sheet:- In Planning and design, cost
is divided into 2 categories
1. P&D
2. Common cost

• Drilling cost:- In drilling the cost is divided into 2

categories
1. Department drilling
[43]
 2. Other exploration services

• Environmental cost

In the cost sheet it includes all the direct and indirect cost.

1. Manpower:- All direct and indirect, executive and non-

executive manpower are included in the cost sheet.

2. Engineering days (ED):- All the costing of P&D and

Environmental Monitoring is rated as per ED. The
services offered to CIL or other parties billed as per ED.

3. Expenditure:- In the expenditure it includes salaries &

wages given to the employees of the company, power &
fuel, Repair & maintenance of plant & machinery, repair
(other than P&M), consultancy expenses, contractual
expenses, other expenditure, depreciation, Interest,
common cost at RIs. All the above expenditure are
recorded in the cost sheet.

4. Other overhead:- In the other overhead all the expenses

occurred in the headquarter are included.

[44]
CONSOLIDATED COST SHEET FOR
C.M.P.D.I.L.

[45]
[46]
BUDGETING

REVENUE BUDGET

The amount of money allocated to the maintenance and growth

of a business. A revenue budget is essential tool for control
purposes in the hand of management and it is a result of a
business’s forecasts of sales, revenue expenses. Revenue
budgets help business save time and effort by the proper
allocation of resources.
In C.M.P.D.I. the revenue budget is prepared on the basis of
previous year expenditure. All RIs send their revenue budget
requirement to the HQ. After that Headquarter will decide the
amount of budget to be allocated to them on the basis of the last
year expenditure and estimated increment. If the previous year
expenditure is less than the budget allotted that year, then most
probably HQ should not allot more than that amount unless
there is proper justification by RIs. Final approval for revenue
budget is given by Coal India Ltd. All of these process results
in strict control over revenue expenditure.

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CAPITAL BUDGET

Capital budgeting is the process in which a business determines

and evaluates potential expenses or investments that are long
term in nature. These expenditures include projects such as
building a new plant or investing in a long-term venture.

In C.M.P.D.I. the capital budget is prepared on the basis of

requirement of plant & machinery, other Capital nature
expenses like building construction of the RIs & engineering
department of HQ. After the approved requirement is given by
the RI, the company allots the fund after detailed deliberation
with the concerned user. Capital budget is also prepare for some
other purpose e.g. replacement of old machinery, updation of
technology, etc. Capital budget is approved by C.M.P.D.I.
board of directors.

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Memorandum Of Understanding
(MOU)

Government of India through Ministry Of Coal signs MOU

with Coal India Ltd. which is the parent company of C.M.P.D.I.
Government gives the target to CIL for the production of coal.
After that CIL divides the target to its subsidiaries. Coal India
gives target of drilling to the C.M.P.D.I.

Mini-Ratna Company C.M.P.D.I. has been awarded the best

MOU rating in the ‘Energy, Power Generation &
Transmission’ syndicate. The award came amongst 175 PSUs.
It also got the second best MOU rating for the year 2018-19 and
was awarded for excellent MOU for 2014-15. The C.M.P.D.I.
has also carried out an all-time drilling of 9.94 lakh meter in
2019-20. This is nearly 20% over the 8.28 lakh meter achieved
in the year ago period.

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Annual Action Plan

After the MOU C.M.P.D.I. makes the annual action plans. The
annual action plans is based on MOU and the target given by
the Coal India Ltd. The annual action plans is made for the
achievement of target of drilling given by Coal India Ltd.
Through the accurate action plan C.M.P.D.I. achieve more
from its target. For e.g. target in June 2017.

Drilling performance of CMPDI in June 2017

target achivement 113379 m

96200 m

81084 m

63600 m

32600 m 32295 m

Departmental Outsourcing Overall

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SUGGESTION

All the process in Cost & Budget Section like preparation of

Cost Sheet, rate determination of services, Budget preparation
should be more automated, it means less human intervention
while data capturing, which can result in more transparent &
accurate preparation of reports and hence better decision
making.

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BENEFITS OF COST AND BUDGETING

The benefits of cost and budgeting are as follows:-

1. Cost control:-It helps to control the cost of the company.

2. OBJECTIVE:-It helps in better planning to achieve the

organizational Goal/Objective.

3. DECISION MAKING:- It helps higher management to take

better decision in an Organization.

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CONCLUSION

The aspect of cost control is most important for every

organization. There are many ways in which cost control is
implemented in various organizations, the cost control
practices are overseen by cost and budget department, the
practices followed by C.M.P.D.I. is one of the best and as per
standard of industry.

Finance Department plays a very important role in every

organization. No other department can work without the
Finance Department.

Under Finance Dept. there are various sub departments:

i. PAYROLL DEPARTMENT
A payroll department is a company’s list of its
employees and their salaries.
All the expenses of employees of CMPDI are
reimbursed such as travelling expense; medical
expense; hotel expense and miscellaneous expenses.

ii. CASH DEPARTMENT

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 A cash department receives and pays cash directly
which work as a media to communicate with the
clients.

iii. EXPENDITURE DEPARTMENT

Processing of bills of outside parties.

iv. TAXATION DEPARTMENT

Computation of Various Tax Liability and
compliance of statutory provisions
in this regard.

v. COST AND BUDGETING DEPARTMENT

Preparation of Cost budget, Cost Estimate and
approval of funds.

It was a wonderful experience to participate and learn

corporate culture working in various department and
standard management process of CMPDI. It gave me a
platform where I expressed my views and participated
in the financial work of Company.

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 BIBLIOGRAPHY
- Research Design: The study is based on descriptive and
applied science.

Data Source: Both primary and secondary data are used for
the collection of the information required for the report.

Primary Data

Data collected through officers of accounts department.

Data collected through officers of central accounts department.
Data collected through officers of Payroll department.
Data collected through officers of budget department.

Secondary Data

Annual report of the company.

Company’s data records.
Company’s website.

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