CHAPTER-1

INDUSTRY AND COMPANY PROFILE

INTRODUCTION TO TRANSPORT COMPANY

In the modern era, the business is becoming complex, competitive, globalize, diversified
and opportunities taker or loser day by day. The businessmen should be more knowledgeable and
capable of understanding the issues involved and deciding the strategies to achieve business
Mission.
A Large motor vehicle design to carry passengers usually along a fixed route according to
a schedule.
Historically, the term bus or omni bus transportation has been used to carry number of
people in one vehicle without regard to type of power used to motivate the vehicle or whether a
fare was paid. Therefore, historically speaking, bus transportation probably had its beginning in
the era of the Romans. Still speaking historically, most authorities agree that the first example of
a fare been charged for ‘bus’ service occurred in France in 1662, when coaches called,
“Carrosses a Cinq Sols” commenced operating in Paris. A decade later-on march 18, 1672 seven
vehicles that may fairly be called omni buses, built to carry 8 passengers, all inside, began to
operate between the various quarters of the city. However, as soon as the upper class ceased to
patronize these new coaches, revenue fell of and in less than a year, the service was
discontinued.
One or two futile attempts to initiate omni bus route were made in England in 1800, it
was not until 1820 did the first successful operation in England commence the London general
omni Bus Company eventually bought out and merged the companies operating these services
within the capital of England.
Bus or stage service was instituted in the United States of America in the latter part of the
17th centuries. The first four open stage coach routes were opened in 1683 between Boston, MA
and Portsmouth, NH. Until 1832, practically no changes were made in transportation vehicles. In
that year, the horse-drawn passenger vehicle on wheels was introduced to city service and put
into operation on Fourth Avenue, New York city.

MODERN MOTOR BUS BEGINNINGS:

 England generally is recognized as the birth place of the modern commercial motor bus
industry. As early as 1904, the London general omni bus corporation received a license from
Scotland Yard to operate the first gasoline motor bus on the streets of the city of London.
The first records of motor bus operation in the United States from 1905.In that year, the
Fifth avenue coach company, New York City, imported one of the London buses for trail on
Fifth Avenue, with a view to replacing the horse drawn vehicles then in operation. This was also
the first use of the double-deck bus in the United States.
What is believed to be the first bus built in the United States was constructed in 1894 by
the Mack brothers, who then conducted a wagon shop in Brooklyn, NY, and later organized the
Mack brothers Motor car company, which ultimately became Mack trucks, Inc. Early bus
transportation developments in the United States were mostly in city or local service. In 1912 the
Cleve land railway company put into service 3 gasoline busses to serve districts on the outskirts
of the city. In 1914 several other companies in the street railway industry recognized in the
Jitney- as buses were then called- a possible ally and made a installation to obtain first hand
operating costs.
In 1914 and 1915, Stone and Webster established 3 bus lines to feed their Inter-Urban
electric railways then operating in the state of Washington and through service from Seattle to
Bothell, a distance of 60 miles. Lack of patronage forced the abandonment of these early feeder
lines within 2 years of their installation. About 1914, the transit company operating in St.Louis.
Early in 1914, two busses were put into operation in Dallas, TX and experiments were conducted
in Los Angeles, CA.

GLOBAL DEVELOPMENT:
As humanity embraced the 1940’s, few foreign countries had kept pace with the bus
industry in the United States; with the exception of England and Switzerland. The majority of
busses were municipally operated in England, and the London transport system was then the
largest single bus company in the world. During 2nd World War the buses in England, as
elsewhere in the world, did yeomen service.

COMPANY PROFILE
In the long, the earth has been ample smaller. The transportation trade, transport freights via
trains, boats, hydroplanes, and Lorries, is victimization state-the-art telecommunication-from
global-system mobile communications (GSM) satellites to radio tags- to trace freight and
guarantee fast and secure delivery of wares. But in addition to advanced enhancements, a simple
mental box has been polar in unifying the earth of freight shipping.
Transport and arrangement organizations extending from Taiwan shipping monster evergreen
marine to Europe's arrangement, Airfreight, and transportation group emerge have at least 1
think about normal; the ever blessing instrumentation. The transportation business has more than
eight million institutionalized. Instrumentation overall exploitation basic dealing with
methodology and instrumentation in current expansion allow multi-purpose clumps of cargo, as
aftereffects of consistent unit are normally staked on railcars, towed by trucks, or set in ships
holds. The 1966 concurrence on the association for institutionalization (ISO) is only one in each
of the numerous ISO-masterminded universal assertions that have prompted additional sparing
cargo transport.
The sea shipping business decisions such crucial weights as which work U.S. based shipper.
Developing at in regards to 4 wheel drives a year, the business has looked for after to strengthen
efficiencies finished up containerization, also as through programmed taking care of, satellite
trailing, and totally extraordinary propelled measures. It's all things considered hoped to low-tech
arrangements. Some hour of the world's middle class naval force is enrolled beneath open
registries, among that ship-proprietors unit subjects to bring down wages, less duties, and less-
prohibitive tenets, giving arrangement offices unit an obtrusive business area, as fabricates look
for to supply arrangement instead of keep up transportation inventories.
The transportation exchange is colossal, encompassing all from metropolitan transport, tram, and
voyager prepare frameworks that get individuals to and personnel to the instrumentation sends
that vehicle item from port all around the worldwide; from the rail and truck age arranges that
move those holders through states, countries, and landmasses to the aircrafts we have a tendency
to tend to use to travel to terminuses close and far for work and joy, to the exact delivery firms "
For once it totally, completely should be there overnight"

MEANING OF TRANSPORT:
Transport means conveyance or movement of goods and persons from one place to another.
INDIAN TRANSPORT SYSTEM:
In India street transport administrations are worked both by open and private areas however
quick increment of traveller activity has prompted sharp rivalry among the private organizations
and individuals were not able duplicate up with the costs changed by them.
Another purpose behind the foundation of open transportation framework was developing
populace, which was outside the ability to control of private organizations and therefore
Karnataka state undertaking rose and K.S.R.T.C is one of them
Sr. No. State Bus Armada of all STU's
1 Karnataka 23138
2 Tamil Nadu 23078
3 Maharashtra 16050
4 Uttar pradesh 12194
5 Andhra pradesh 11785
6 Gujarat 10850
7 Telangana 10476
8 Kerala 6240
9 Delhi 5578
10 Rajasthan 4500

COMPANY PROFILE
The Karnataka state road transport corporation (KSRTC) may be a state preserved road company
among the state of Asian nation. KSRTC has the foremost vital fleet of Volvo buses among state
owned transport corporations.
COMPANY LOGO:

Karnataka state road Transport Corporation

Type : Public Transport Corporation

Industry : Public transport bus service
Founded : 1961
Headquarters: Bangalore, India
Area served : Karnataka and adjacent areas
Key people : K. Gopala Poojary (chairman) Basawaraj Bull (MD)
Services : Public Transport
Revenue : 16.3585 billion (us$ million) (2008-09)
Subsidiaries : Bangalore metropolitan transport corporation (BMTC),
North eastern Karnataka state road Transport Corporation (NEKSRTC)
North western Karnataka state road Transport Corporation (NWEKSRTC)
Website : KSRTC

HISTORY OF KSRTC
KSRTC was built up in 1961 under the prerequisites of street transport company Act1950. it's
worn out hand by the govt of region. In august 1997 another new street transport enterprise
called North western region Road Transport Corporation (NWKRTC) was framed to oblige the
transportation wants of north western parts of territory. Afterward, the North Japanese Province
Road Transport Corporation (NEKRTC) was mutually shaped with its organization work in
Gulbarga.
To oblige the vehicle needs of the voyaging open of the then province of Mysore, Mysore
Government Road Transport Department (MGRTD) was introduced with 120 transports on
twelfth September 1948.
The State Transport, which was being controlled as a Department of the Govt. of Mysore was
hence changed over into a free Corporation under Section 3 of the Road Transport Corporation
Act, 1950 on first of August 1961. The advantages and liabilities of MGRTD aside from those of
BTS unit as on 01-08-1961 were passed on to the new Corporation, which was named as
MSRTC. The benefits and liabilities of the lingering MGRTD i.e. of BTS Unit were in this way
passed on to the Corporation on first of October 1961. Along these lines, Corporation was
eventually settled for the whole State of Mysore
Restructured STU Operations
INCEPTION:
Karnataka state road transport corporation (KSRTC) is the biggest publicity
transport corporation in India. It is the renowned public sector transport undertaking kept by the
state of Karnataka, and governed by a board of directors, appointed by the state.
KSRTC is given the most moderate and tried and true transport benefit from decades to the
general population in and around Bangalore city. With its successful plans and productive
collaboration, it can meet the developing needs of the expanding number of workers and growing
state limit limits. Transportation is the vital factor in the headway of progress and is the
backbone of business.
It was at one time a period a misfortune making open segment association. Today it is the main
open division transport company making benefit. It is flourishing by perceiving and embracing
itself to the adjustments in advancements, needs, tastes, and inclinations and serving to the best.
The prime goal of KSRTC is to give reasonable, effective and eco and worker well disposed
transport framework to the nationals of Bangalore. It has started numerous formative developers
for the welfare of workers and the general public.

KSRTC SERVICES
 KSRTC works 6463 projects amid a day covering a productive separation of hundred
thousand kilometres with an entire armada of 7599 transports.
 KSRTC transports on a customary of 24.57 need travellers for each day.
 KSRTC covers 92% towns in Karnataka.
  KSRTC is that the state transport enterprise to exhibit B & RLE low body town
transports in Republic of India.
 It also works to the adjacent conditions of geographic district, Andhra Pradesh,
Tamilnadu, Kerala, Goa and Pondicherry.

VISION OF KSRTC
 To fulfil customer’s expectation in providing in providing environment friendly and
value based servicer.
 To have constant development through use of advanced technology and strain on creative
thinking.
 To move the spirit of duty and candour of correspondence among our staff towards
setting issues.
 To meet the security, condition and contamination control norms the state government to
have finish nationalization of traveller’s vehicle in the state. With the execution of these
plans, the armada quality was 4494 out of 1978-79. A critical improvement was the
nationalization of the private contract auto.

MISSION OF KSRTC
 To provide economic reliable environment friendly courteous safe transport service to
commuters.
 KSRTC in the matter of diesel motors, genets and water driven drivers and frameworks.
 To satisfy client's desire in giving air inviting and esteem based offices.
 To lay weight on labourer’s welfare and human asset improvement and to impart quality
awareness in our worker in any regard levels.
 Customer fulfilment and accomplish noteworthy upgrades in returns on support utilized

QUALITY POLICY
KSRTC shall adopt ISO 9001:2000 quality management system and strive continually to
improve the system with continual training. KSRTC is committed to continually improve service
to achieve consistent quality satisfaction, in order to become a global leader.

The Board of Directors of KSRTC as on 01-03-2019.

Sl.No. Names Official/ Non-Official
SRI. B. SATHYANARAYANA,
Hon’ble MLA., and,
1
Chairman, KSRTC,
CHAIRMAN
Central Offices, Bangalore 560027.
SRI. I.S.N. PRASAD, IAS
Additional Chief Secretary to Government,
2 DIRECTOR
Finance Dept., Government of Karnataka,
(Official)
Vidhana Soudha, Bangalore-560 001
DR: B. BASAVARAJU, IAS
Principal Secretary to Government,
3 Transport Dept., Government of Karnataka, DIRECTOR
(Official)
M.S. Buildings, Bangalore-560 001
SRI. SHIVAYOGI C KALASAD, IAS

4 Managing Director, DIRECTOR

KSRTC, Central Office, (Official)
Bangalore- 560 027
DR: N.V. PRASAD, IAS
Managing Director,
5 DIRECTOR
BMTC, Central Office,
(Official)
Bangalore -560 027
SRI. PARESH KUMAR GOEL
Director(Transport),
Ministry of Road Transport & Highways, DIRECTOR
6 Transport Bhavan, (Official)
No.1, Parliament Street, (Central Govt.
Government of India, Representative)
New Delhi 110 001.
Metropolitan Commissioner

BMRDA,
1
Govt.of Karnataka, INVITEE
No.1, Ali Asker Road,
Bangalore-560001.
kSRTC Key Statistics (as on 28-02-2019)
1 Depots 84
2 Divisions 17
3 Bus stations 165
4 Vehicles 8670
5 Schedules 8204
6 Effective Kms per day 29.01 lakh
7 Average traffic revenue per day Rs. 857.23 lakh
8 Average passengers travelled per day 29.57 lakh
9 Staff 38668
10 Staff ratio per schedule 4.71

PRODUCTS AND SERVICES

 FLY BUS
Fully air conditioned continuous luxury, Volvo multi shaft facility among metropolis world field
and Mysore with room, chemical bogs, and live show of flight timings, GPS, wireless local area
network services and in-bus live diversion.

 AIRAVAT
Fully air conditioned luxury Volvo multi shaft bus services with chemical loos, Wi-Fi,
stowage and individual TV screens.
 AIRAVAT DIAMOND
Fully air conditioned luxury provision worked apply Shania multi-axle buses with hi- definition
vision cameras for recording at intervals the bus and fleet organization structure for performance
observing intervals the bus..
 RAJAHAMSA
Non air conditioned deluxe public-service corporation with lounger seats in 2/2 configuration
designed on Tata and Ashok Leyland chassis.
 CORONA AMBAARI
Completely air suspension non AC reclaimable seat transport, beside raajahamsa that
unremarkably employ over North Japanese Mysore areas
  CORONA
Fully air conditioned and air suspension bus with 2+2 reclaimable seats. can suppose it to be
Associate in Nursing alternate alternative for Airavata.
 SHEETHAL
Fully air conditioned and air interruption bus with 3+2 non-reclaimable seats designed on Ashok
Leyland chassis. primarily operates between Mysore and Bengaluru, however presently replaced
with Volvo Airavata.
 VAIBHAVA
Non air conditioned deluxe company with lounger seats in 2+2 arrangement engineered on Tata
and Ashok Leyland chassis.
 GRAAMAANTRA SARIGE
Buses that links rural community with traditional fare (slightly costs lesser than suvarna sarige).
 NAGARA SARIGE
These units of mensuration intra city/town buses plying in Tier-2 cities and cities across Mysore
engineered on Ashok Leyland, Tata and Etcher chassis. On air conditioned sleeper utility
designed on Tata chassis.
BIFURCATION OF KSRTC
To rise operational productivity, to offer uniformity transport administration to the venturing out
open and to have a not too bad administration on the activities of the partnership, the govt. of
Mysore has arrange NO.HTD 127 TRA ninety-six dated 22-02-1997.
Along these lines, KSRTC was a solid states Road Transport attempt till 1996-97. During the
time 1997-98, the govt isolated KSRTC and wanted out 2 new companies, viz, the city
Metropolitan Transport Corporation (BMTC), with its organization topographical point at city
and also the North West State Road Transport Corporation; with its organization land point
Hubli. The city metropolitan Transport Corporation that appeared with affect from 01-11-1997
takes into account the north western areas of state. NWKRTC turned out to be monetarily
independent i.e. 01-04-1998 underneath RTC Act 1982.One all the more new Corporation was
assembled built up with result from 15-08-2000 along the edge of his home office at Gulbarga to
take into account the north Japanese regions of territory, that turned out to be financially
independent 1-10-2000. Rebuilt STU Operation
COMPETITORS OF KSRTC
1. These are the buses playing from neighbouring state like Kerala, Andhra Pradesh,
Tamilnadu, and Telangana.
2. KERALA ROAD TRANSPORT CORPORATION.
3. INDIAN RAIL WAYS.
4. ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION.
5. TAMILNADU STATE ROAD TRANSPORT CORPORATION.
6. TELNANGANA STATE ROAD TRANSPORT CORPORATION.
7. GUJARAT STATE ROAD TRANSPORT CORPORATION.
8. There are many private competitors who give very good and better service and facilities
namely.
9. NATIONAL TRAVELS
10. BLUE LINES
11. SHARMA TRAVELS
12. VRL TRAVELS
13. SRS TRAVELS

KSRTC INFRASTRUCTURE AND SERVICES

KSRTC infrastructure embody corporation work, divisional offices, depots, bus stations,
Divisional work look, machine, regional workshops, Hospitals, employment institutes,
officers/Workers Quarters one sports sophisticated.
Commercial institution and offices
Tourist data system
Crew rest rooms
Modern lighting facilities

FACILITIES AT BUS STATIONS

 Modern sophisticated bus stations
  Drinking water
 Arrangements of seating’s
 Modern bogs
 Canteen facilities
 Reservation counters
 Pre-paid automobile cart
 Pre-paid taxi
 ATM facilities
 Dust-proof of lot
 Two wheelers and 4 wheelers parking facility
 Digital show and Intelligent transport system
 Public addressing system
 Commercial institution and offices
 Tourist data system
 Crew bathroom
 Cloak rooms

AWARDS
1. Golden peacock environment management award-2003.
2. Rajiv Gandhi national quality award-2009 best large scale trade among the country.
3. Best Employer Award -2010 Award for modernism in Recruitment.
4. IIMM company excellence-2010 in global climate change mitigation &
Adaption.
5. SKOCH the planet is open Award- 2010.
6. E-India Award - 2010.
7. Union transport minister’s trophy for the nethermost accident record-1998-2001.
8. Parisara award by govt. of Karnataka-2001
9. Asia’s Best Employer award-2011.
10. Volvo sustainable mobility award-2011.
11. UITP-First Px2 political commitment award-2011.
 12. ASRTU award - 2011.
13. National Genentech HR GOLD AWARD-2016.

Present Status (as on 2019)

KSRTC has its Corporation point at city. By and by, it covers seventeen Districts (Bangalore
Urban, city Rural, Ramanagar, Kolar, Chickaballapur, Tumkur, Chitradurga, Davanagere,
Shivamogga, Mangalore, Udapi, Chickmagaluru, Hassan, Mysore, Mandya, Chamarajnagar,
Coorg at interims the State to a lower put its operational jurisdiction. It’s entire fifteen Divisions
- 14 operational Divisions viz. city Central, Ramanagar, Tumkur, Kolar, Chikkaballapur, Mysore
city, Mysore Rural, Mandya, Chamarajnagar, Hassan, Chickmagalur, Mangalore, puttur,
Davanagere and one terminal division viz., KBS. 79 Depots, it is a hands of with respect to
36875 staff. It works twenty six.43 number km day by day holding an armada of 8348 vehicles
(Volvo 198, Volvo Multi shaft 141, Volvo town fifty, Mercedes Benz ten, Mercedes Benz Multi
Axle20, Corona Sleeper seventy four, Corona Seater about six, Scania 35, Tata 4711, Leyland
2864, either 236 and Swaraj Mazad 3), procures activity income of Rs. 754.57 number every day
line of work to twenty five.57 whole number travellers on a middle. It stands fifth among STUs
at interims the state by estimate
KSRTC Key Statistics [As on 31-12-2016]
Depots 83
Divisions 16
Bus stations 155
Vehicles 8680
Schedules 8106
Effective Km per day 28.52 lakh
Average traffic revenue per day Rs. 809.43 lakh
Average passengers travelled per day 28.80 lakh
Staff 38189
Staff ration per schedule 4.71

KSRTC PASSENGERS ACCIDENT RELIEF FUND TRUST

 KSRTC traveller’s mishap alleviation subsidize has been composed w.e.f.01-06-2002
along these lines on turn out quick money help to the legitimate beneficiaries of the
 perished traveller’s reality association organization pass on in street mischances with
movement in KSRTC transports.
 The alleviation paid by the ARF trust is to boot to the MACT claims settled the KSRTC.
 The alleviation sum has been collected to rs.2.50. Lakhs per mortal w.e.f.01-09-2018.
 Trust possesses and keeps up eight wreckers to carryout alleviation task all through street
mishaps.
SWOT ANALYSIS OF KSRTC
The SWOT examination might be a key thinking of hardware that stands for: qualities,
shortcoming, openings, and dangers. The SWOT examination is critical to comprehension the
different very surprising danger and prizes of any speculation. Examiner, speculators,
understudies and talented for organizations qualities, shortcomings, openings, and dangers.
STRENGTHS:
 Customer centric:
 Ability to blend the operations and performance of KSRTC to meet the need and demand
of commuters are the source of earnings.
 In order to provide comfortable travelling, it has introduced never models of various
buses with more luxuries seating, air conditioned like Volvo.
 Special& passes-daily, weekly, monthly introduced for various sections of society
according to their needs and also concessional passes to blind passengers, etc.
 Monopoly over market of public transportation:
 Sound government support:
 Distributed networks:
 Charted contract services:

WEAKNESS:
 Ineffective marketing of various services provided by KSRTC to customers.
 In spite of conducting programmers for improvement of soft skills, mannerisms, and
behavioural aspect of the workers.
 The accident rate (even if decreasing) results in damaging the goodwill of the company as
it is concerned with life and death matters.
 Slow adopting process of various technological introductions.
  In efficient management in the morning office hours.
OPPORTUNITY:
 The wide spread opportunity to cover rural market.
 The expending to expand its operations, increase responsibility and revenue.
 Great opportunity to dominate entire urban rural market by utilizing modern
technologies.
 Can attract more customers by providing special services to tourist places in and around
Bangalore.

THREATS:
 Increasing traffic congestion is increasing a barrier in achieving punctuality.
 Private transportation is acting as a favourable mode of transport in rural areas by
providing services at challenging fares and schedules.
 METRO RAIL is rising as the competitor.
 The drivers and conductors working on routes for 8 to 10 hours daily severally exposed
to the environmental pollution, which increases the risk of health.
 Belief of customer towards the mannerism of drivers and conductors might reduce the
goodwill of the company.
GROWTH AND PROSPECTIVE OF KSRTC
Alongside the quick advance of Karnataka in all circles of action, KSRTC has risen as the best
association in meeting goals of Kannadigas and the general population of neighboring conditions
of Karnataka. As toward the finish of 31-03-1997, the Corporation worked its administrations in
19 Divisions - 18 Divisions working mofussil administrations and 1 Division working city
administrations of Bangalore. It had 108 Depots, 2 Regional Work Shops and a Central Office at
Bangalore. There were 281 lasting and 11 brief transport stations with 337 wayside covers and
1009 get covers. The aggregate number of workers conveyed was 59033 and the staff proportion
per plan was 6.22. The aggregate number of courses worked was 13273 with 9493 calendars,
course length of 9.49 lakh klm. What’s more, normal day by day booked km of 27.95 lakh km.
The aggregate number of between state courses worked by the Corporation on an equal premise
with the neighboring states was 602
 CHAPTER- 2
CONCEPTUAL BACKGROUND OF THE STUDY & REVIEW LITERATURE

INTRODUCTION TO FINANCE:
Finance is regarded as lifeblood of an enterprise. This is because in the modern money
oriented economy finance is one of the basic foundations of all kinds of economic activities. It is
the master key, which provides access to all sources for being employed in manufacturing
activities. It has been rightly said that business needs money to make more money, however, it
also true that money begets more money only when it is properly managed; therefore efficient
management of every business enterprise is closely linked with efficient management of its
finance.
FINANCE:
Finance refers to the management of flows of money through an organization. It defined as the
provision of money at the time when it is required.

BUSINESS FINANCE:
According to - GUTHMANN AND DAUGALL.
“Business finance can be broadly defined as the activity concerned with planning, rising,
controlling, and administrating of funds used in the business”.’

FUNCTIONS OF BUSINESS FINANCE:

Finance functions can be classified into two types:
1) Recurring finance function
2) Non-recurring finance function
1) Recurring finance function.
Recurring finance function encompasses all such financial activities as are carried out
regularly for the efficient conduct of a firm planning of funds, placing of funds, allocation of
funds, income and controlling the uses of funds are the contents of recurring finance
function.
a) Planning of funds: It is an act of deciding in advances the quantum of funds
required and its duration and make-up of such investment to achieve the primary goal
enterprise. While planning financial manager aims at synchronizing cash inflows and
outflows so that the firm does not have any resources unutilized. The financial manager
must maintain some amount of working capital in reserve so as to ensure solvency of the
firm.
b) Rising of funds: Company raises the funds by floating security issues. The
financial manager has to arrange the issue of prospectus for security issues. In order to
ensure quick sale of securities of generally stockbrokers who deal in securities in stock
market and who are in constant touch with their clients are approached.

c) Allocation of funds: Financial manager has to locate funds assets in such

allocation factors must be considered such as competing uses, immediate requirement,
and management of assets, profit prospectus and overall management plans.

d) Allocation of income: Allocation of annual income of the organization in

between different uses it is the exclusive responsibility of financial manager income may
be retained for financing, expansion or may be distributed as dividend as return of capital
employed. The basic problem in this regard is that if the company retains the income and
reinvest, the current shareholders will receive an immediate sum but will sacrifices part
of their claim to future growth.
e) Control of funds: Financial manger should control the use of funds so has to
ensure cash flowing as per plan and if there is deviation between actualize and estimates
the financial manger has to evaluate the receivable management so has to ensure credit
collection policies of the firm.
 2) Non-recurring financial functions
It refers to the use of functional activities that a financial executive has to perform
very infrequently. Preparation of financial plan at the time of promotion of the company. The
financial readjustments in times of liquidity crisis, valuation of the firm at the time of merger.
Successful handle of such problems requires financial skills and understanding of
principles and techniques of finance.

MEANING OF ACCOUNTING
Accounting is discipline which provides Information to managers, external users,
stakeholders and others for accomplishing their varying objectives. Managers and others who
participate in the management of an organization require information for planning, decision
making, controlling, management of costs ascertainment and analysis, formulating strategies to
discharge managerial responsibilities and to achieve business objectives. To accomplish their
goals, the users have to familiar about the accounting standard and its usage.

BRANCHES OF ACCOUNTING
1. Financial Accounting
2. Cost Accounting
3. Management Accounting
Meaning of Financial Accounting
It means “ the art of recording, classifying & summarizing in a significant manner & in
terms of money, transactions & events, which are in part at least of a financial character &
interpreting the results there of”.

Meaning of Management Accounting

“Management Accounting is the presentation of accounting information in such a way as
to assist in the creation of policy & day to day operation of undertaking”.
MEANING OF COST ACCOUNTING
It means “Cost Accounting is a branch of accounting dealing with the Classification,
Recording and Allocation, Summarizing and reporting of current and Prospective Costs.”

INTRODUCTION TO COST
In its earlier concept, costing was defined as the technique and process of ascertaining cost of a
given things. In sixties the definition of the cost accounting was modified as the application of
costing and cost accounting principle, methods and techniques to the science art and practice of
cost control and ascertainment of profitability of goods and services. It included the presentation
of information derived there from for the purpose of managerial decision making.

It clearly emphasis the important of cost accountancy achieved during the Period by using cost
concept in seven more areas and helping an agreement to arrive at good business. Today, the
scope of cost accounting has enlarge to such extent that it now refers to the collection and
providing all sorts of the information that assists the executives in fulfilling the organizational
goals.

Modern cost accounting is being termed as management accounting, since manager being the
primary user of accounting information are increasingly using data provided the accounts, setting
objectives and controlling the peration of the Business.

MEANING OF COST:
Cost is the amount of expenditure [actual or notional] incurred or attributable to a given things.
As a verb, cost means of estimate the amount of money needed to produce a product or perform
a service.
Costing is the technique consisting of principles and rules, which govern the procedure of
ascertaining cost of product and services. Costing refers to the principles and rules governing
ascertainment of cost product and service.

MEANING OF COST MANAGEMENT

Cost management is the process by which companies control and plan the cost of doing business.
Individual project should have cost management plans and companies as a whole also integrate
cost management into their overall business model.

MEANING OF COST ACCOUNTING

Cost accounting is the process of accounting for cost from the point at which expenditure is
incurred or committed to the established of its ultimate relationship with cost centre and cost
units.

SCOPE OF COST ACCOUNTING

The scope of cost accounting is very wide. There are lots of techniques,
tools, procedures, processes, program, are used in cost accounting for calculating cost and its
control.

IT INCLUDES THE FOLLOWING

COST ASCERTAINMENT:
In this region of cost accounting, cost accounting collects product’s material, labors and
overhead and try to calculate total and per unit cost of product. This total cost calculation will be
based on historical or standard or estimated basis.

COST RECORDS:
In this part of cost accounting, cost accountant maintains cost books; Vouchers, ledger, reports
and others cost related documents for furthercompanies and references.

COST CONTROL:
This is the end boundary of cost accounting scope. In this division, cost accountant used different
techniques and methods for controlling the cost. The cost can be controlled by standard costing,
budgetary control and cost audit.

OBJECTIVES OF COST ACCOUNTING

The following are the main objectives of cost accounting.
i. To ascertain the cost per unit of the different products manufactured by a
business concern. To provide a correct analysis of cost both by process or
operation and by different elements of costs.
ii. To disclose sources of wastage whether of material, time or expense or in the
use of machinery, equipments and tools and to prepare such reports which may be
necessary to control such wastage.
iii. To provide requisite data and serve as guide to price fixing of products
manufactured or services rendered.
iv. To ascertain the profitability of each of the products and advice the
management as to how these profits can be maximized.

ADVANTAGES OF COST ACCOUNTING

The main advantages of cost accounting are as follow:
1. It helps in optimum utilization of men, material and machines.
2. It identifies the areas requiring corrective action.
3. It helps the managements in formulation of policies.
4. It presents a tailor-made solution for the problem.
5. It helps the management in making short-term decision by use of technique like marginal
costing etc.
6. It provide useful data cost analysis by giving cost of closing stock of raw
material, work in progress and finished products.

COMPONENTS OF TOTAL COST

1. PRIME COST:
Prime cost consists of cost of directs materials, direct labors and direct
expenses. It is also known prime cost.

2. FACTORY COST:
Factory cost companies prime cost and in addition, work or factory
Overheads that include cost of indirect material, indirect labors and indirect
expenses incurred in a factory. It is also known as works cost, production or manufacturing cost.

3. OFFICE COST:
Office cost is the sum of office and administration overheads and factory
cost. This is also termed as administration cost or the total cost of production.

4. TOTAL COST:
Selling and distribution overheads are added to the total cost of
production to get total cost or the cost of sales.

INTRODUCTION TO COST CONCEPTS

In the earlier times, the concept of costing was defined as the technique and process of
ascertaining cost of a given thing. In sixties, the definition of cost accounting was modified as
“the application of costing and cost accounting principles, methods and technique to the science,
art and practice of cost control and ascertainment of profitability of goods or services. It includes
the presentation of information derived there from for the purpose of managerial decision-
making.

Objectives and Function of Cost Accounting

 Determination of cost incurred under different circumstances.
 Controlling of cost to improve the efficiency and reduce wastage
 Evaluation of performance
 Fixing of selling price
 Acts as a guide to business policy

Advantages of Cost Accounting

 It reveals the in-depth information of a concern.
 It increases the efficiency of the organization.
 It provides useful information on which tenders can be quoted.
 The cause of inefficiency which has led to the loss of a concern can be detected
  It helps the management in taking decisions.
Disadvantages of Cost Accounting

 It is unnecessary.
 It is an expensive.
 It is a in applicable.
 It is a failure.

CLASSIFICATION OF COST:
1. Standing or Fixed Cost: The cost, which remains unaffected by the variation or change in
the volume of output.
E.g.: Salary of operating manager, supervisor, MV tax, license fee, garage rent etc.

2. Maintenance Cost: Cost that is partly fixed and partly variable used for maintaining
purpose.
E.g.: Tyres and Tubes, repairs and painting, overhaul etc.

3. Operating and Running cost: These charges or cost are the cost which vary on the basis of
output or kms run by vehicles
E.g.: Petrol, Oil, Grease and Wages of drivers of conductors
 Difference between Cost Accounting and Financial Accounting

Basis Financial Accounting Cost Accounting

The main purpose of financial The main purpose of cost

accounting is to prepare P&L accounting is to provide detail
1 Purpose account & balance sheet for cost information to
reporting to owners or shareholders management, i.e. internal
& other outside agencies, i.e. users.
external users.
These accounts are obligatory to be Maintenance of these accounts
prepared accounting to the legal is voluntary except in certain
2 Stationary requirements of Companies Act & industries where it has been
Requirements Income Tax Act. made obligatory to keep cost
records under the Companies
Act.

It reviles the profit or loss of the It shows the detailed cost &
business as a whole for a particular profit data for each product
3 Analysis of period. It does not show the figure line, deportment, process, etc.
Cost & Profit of cost & profit for individual
products, deportments & processes.
Financial reports are prepared Cost reporting is a continues
4 Periodicity of periodically, usually on an annual process & may be daily,
Reporting basis weekly, monthly basis etc.
It lays emphasis on the regarding of It provides for a detailed
financial transactions & does not system of controls with the
5 Control attach importance to control aspect. help of certain special
Aspect techniques like standard
costing & budgetary control.
 It is concerned almost exclusively It is concerned not only with
with historical records. The historical costs but also with
historical nature of financial pre-determined costs. This is
accounting can be easily understood because cost accounting does
in the context of the purposes for not end with what has
6 Historical & which it was designed. happened in the past. It
Pre- extends to plans & policies to
Determined improve performance in the
Costs future.

It has a single uniform format of It has varied forms of

presenting information, i.e. P&L presenting cost information
7 Format of account, Balance Sheet & Cash which are tailored to meet the
presenting Flow Statements. needs of management & thus
information lacks a uniform format.

It records only external transactions It nit only records external

like sales, purchases, receipts, etc., transactions but also internal
8 Types of with outside parties. It does not or inter-departmental
transactions record internal transactions. transactions like issue of raw-
recorded materials by stores-keeper to
production deportment.

It prepares general purpose It generally special purpose

statements like profit & loss account statements & reports like
& balance sheet. That is to say that report on loss of materials, idle
financial accounting must produce time report, variance report,
9 Types of information that is used by many etc. it identifies the user,
Statements classes of people, none of whom discuss his problems needs &
Prepared have explicitly defined provide tailored information.
 informational needs.

The Following Pictures Includes Methods & Techniques of Costing

Budgetary
Budgetary Managerial
Managerial Absorption
Absorption
Control
Control Costing
Costing Costing
Costing

Standard
Standard Absorption
Absorption
Costing
Costing COST Costing
Costing
COST DATA
DATA

Job
Job Costing
Costing Process
Process Costing
Costing

Factory
Factory Job
Job Batch
Batch Contract
Contract Unit
Unit Operatio
Operatio Operatin
Operatin
Costing
Costing Costing
Costing Costing
Costing Costing
Costing nn Costing
Costing Costing
Costing

Multiple
Multiple
Costing
Costing

TECHNIQUES OF COSTING

 Standard costing
 Budgetary costing
 Marginal costing]
 Total costing
 Total absorption costing
 Uniform costing

Standard costing
 This is very valuable technique to control the cost in this technique, standard cost is
predetermined as a target of performance and actual performance is measured against the
standard.

Budgetary costing
Closely allied to standard costing is the techniques of budgetary control. A budget is an
expression of a firms plan in financial form and budgetary control is a technique applied to the
control of total expenditure on materials, wages and overhead by comparing actual performance
with planned performance.

Marginal costing
This is a technique of profit planning. In this techniques, separation of costs into fixed
and variable (marginal) is of special interest and importance. This is so because marginal costing
regards only variable costs of the products.
Total absorption costing
It traditional method of costing where by total costs (fixed and variable) are charged to
products. This is in complete contract to marginal costing where only variable costs are charged
to products.

Uniform costing
This is not a separate technique or method of costing like standard costing or process
costing. Uniform costing simply denotes a situation in which a number of firms adopt a uniform
set of costing principles.

METHODS OF COSTING
 Job costing
 Process costing

Job Order Costing

 This method “Applies where work is undertaken to customers special requirements “.
Cost unit in job order costing is a job or work order for which costs are separately collected and
accumulated. A job big og small comprises a specific quantity of a product is that to be
manufactured as per customers specifications.

Contract Costing
This is a variation of job costing and therefore principles of job costing apply to this
method. The difference between job and contract is that job is small and contract is big.

Batch Costing
Like contract costing, this is also a variation of job costing. In this method the cost of a
batch or group of identical products is ascertained and therefore each batch of products is a cost
unit for which costs are ascertained. This method is used in companies eangaged in the products
is of readymade garments, Toy’s, shoes, tyres and tubes, component parts, etc.

Process Costing
As per farm job costing, this method is used in mass production industries manufacturing
standardized products in continuous of manufacturing costs are accumulated for each process or
departments. Here raw material has to pass through a number of processes in a particular
sequence to completion stage.
Operation Costing
This is nothing but a refinement and a mare detailed application of processes costing
operations may consist of a number of operations and operations costing involves cost
ascertainment for each operation instead of a process.

Single, Output or Unit Costing

This method of cost ascertainment is used when production is uniform and consists of a
single or two three verities of the some product. Where the product is produced in different
grades, costs are ascertainment grade wise.
Operating or Service Costing
This method should not be confused with operation costing. Operating costing is used in
undertakings which provide services instead of manufacturing products. For ex- Transport
undertaking (road transport, railway, airways, shipping companies), electricity companies hotels,
hospitals, cinema etc.,

Multiple or Composite Costing

It is an application of more than one method of cost ascertainment in respect of the same
product. This method is used in industries where a number of companies are separately
manufactured and then assembled into a final product. For ex- in a television company methods
of costing manufacture of different component parts may require different production methods
and thus different methods of costing may have to be used. Assembly of these components into
final product still requires another method of costing other examples of industries which make
use of this method are air conditioners, refrigerators, scooters, cars, locomotive works etc..

TRANSPORT COSTING

PRELUDE TO TRANSPORT COSTING

Transport or Transportation is the movement of people and goods from one place to
another. The term is derived from the Latin trans ("across") and portare ("to carry"). Industries
which have the business of providing equipment, actual transport, transport of people or goods
and services used in transport of goods or people make up a large broad and important sector of
most national economies, and are collectively referred to as transport industries
Transportation modes are an essential component of transport systems since they are the
means by which mobility is supported. Geographers consider a wide range of modes that may be
grouped into three broad categories based on the medium they exploit: land, water and air. Each
mode has its own requirements and features, and is adapted to serve the specific demands of
freight and passenger traffic. This gives rise to marked differences in the ways the modes are
deployed and utilized in different parts of the world. Recently, there is a trend towards
integrating the modes through intermodality and linking the modes ever more closely into
production and distribution activities. At the same time, however, passenger and freight activity
is becoming increasingly separated across most modes.
Meaning of Transport Accounting
Transport costing is defined as the determination of the cost per unit of service rendered
by a vehicle or cost per passenger kilometer or cost per tone kilometer

Objectives of Transport Costing:

 To ascertain the operating cost of running a vehicle per kilometer.
 To fix the rates of cartage of goods and passengers on the basis of operating
 To decide the hire charges where vehicles are given on hire.
 To compare the cost of using own motor vehicles with that of costing alternative modes
of transport.
 To determine the cost to be charged to departments which use internal transport facilities.

Costing procedure
 Determination of cost unit or unit of service
The basic problem in transport costing is adoption of a suitable cost unit. Cost unit in transport
costing may of the following two types, simple cost unit, cost unit in expense per kilometer as
per tone kilometer i.e. ascertaining the cost of running a vehicle per Km. as per mile composite
cost unit ex- per passenger kilometer or per tone kilometer i.e., cost of transporting a passenger
or a tone of goods for one kilometer.

 Compilation of costs
In transport costing costs are classified and compiled in an operating cost sheet as
follows:
Fixed cost: These are constant costs and do not change with the increase in the number of units
of service rendered by the company.

 Variable or operating costs

These are running costs and only when the vehicles run ex- are petrol or diesel oil,
lubricating oil, depreciation, tyros and tubes, wages of drivers ( if the payment is according to
distance as trips) etc.
  Determining cost per unit of service.
As the service rendered by transport undertakings is of uniform type, the cost per unit of
service is the average cost i.e., the total cost divided by the number of units of service, for ex- if
total cost per month in a transport company is Rs/24000 & the bus has run for 48000 Km. during
the month, the operating cost per kilometer will be Rs. 24000/ 48000 kms = 50 paise.

SPECIMEN OF OPERATING COST SHEET

Vehicle No………… period………..

Cost unit………….. No. of Cash Units……..

Total Rs Total Rs.

 Fixed Cost (as standing charges)
Garage rent
Road tax
Insurance
Managers Salary
Office Expenses
Interest on capital
Drivers wages

Total (A)

Variable (Running) Costs

Depreciation
Lubricants
Petrol or diesel
Repairs and Maintenance
Tyres & tubes
Total (B)

Grand Total (A+B)

Transportation costs can be categorized by the following attributes:

1. Distribution (Internal and External Impacts)

Internal (also called user) costs and benefits are borne or accrue by others social good’s
consumer. External costs and benefits are borne or accrue by others. Social costs are the
 total of both internal and external impacts. External impacts do not directly affect
consumers’ decisions, and they are forms of market failure (Market Principles).

2. Variable and Fixed

Variable (also called marginal) costs increase with consumption. Fixed costs do
not. For example, fuel, travel time and crash risk are variable vehicle costs because they
increase directly with vehicle mileage, while depreciation, insurance, and residential
parking are considered fixed, because vehicle owners pay the same, regardless of how
much a vehicle is used. The distinction between fixed and variable often depends on
perspective. For example, depreciation is often considered a fixed cost because car
owners make the same payments no matter how many miles a year they drive, but a car’s
operating life and resale value are affected by how much it is driven, so depreciation is
partly variable over the long term.

3. Market or Non-Market
Market costs involve goods that are traded in a competitive market, such as vehicles, land
and fuel. Non-market costs involve goods that are not regularly traded in markets such as
clean air, crash injuries, and quiet. A number of techniques can be used to determine the
value that consumers place on non-market goods.
4. Perceived or Actual
There is often a difference between perceived and actual automobile costs. Motorists
tend to perceive immediate costs such as travel time, stress, parking fees, fuel, and transit
fares, while costs that are paid infrequently, such as insurance, depreciation, maintenance,
repairs and residential parking, are often underestimated.

5. Price
Price refers to what a consumer pays in exchange for a particular good, or perceived-
internal-variable cost. In general, a market is most efficient if prices reflect marginal
costs (Market Principles).

Features of Transport Costing:

 In transport costing the cost per unit of service rendered by a vehicle is determined.
  Total unit of service of passenger’s vehicle is ascertained by multiplying the number of
passengers carried by the distance covered.
Literature Review

1. M.E. Davalos, MT French, AE Burdick ….-Telemedicine. Telemedicine programs offer

specialty health service to remote population using telecommunication skill. This New
innovation approach to medical care delivery has been captured for few years and currently
covers various specialty areas.
2. A Rindfleisch, JB Heide the journal of Marketing, 1997-JSTOR…considered as a whole.
Literature has identified a set of distinct antecedent conditions or governance problems, such
as safe guarding specific assets. These are TCA’s independent variables. Transactions cost
analysis dependent variables are the governance.

3. Y LIU, Q WANG, L PENG- R & D management,2009-en.cnki.com.cn “here coded the

studies according to research objective, research methods, level of analysis and research
subject”.

4. E Anderson, H gatignon Journal of International Business Studies, 1986, JSTOR mode

decision (in 1978Robinsonreview) pointed out that very few companies have consciously
and deliberately cost\benefit analysis options.

5. FBrayer- Journal of Health Economics, 1987-Elsevier. The specification of a hospital

cost function. A comment on the recent literature. Friedrich Brayer. Fren University
Hagen, D-5800 Hagen. FRG. Available online 23 march 2002. Barer, 1982; ML cited by
153 related articles all 6 versions cite save.

6. ME Davalos, MT France, AE Burdick ......, telemedicine and e ... 2018 online

.liebertpub.com .Abstract telemedicine pragma use of telecommunications technology to
provide remote public health professional service. This innovative approach to health-
care services has been arrested for several years, currently covering various fields of
expertise.

7. Zohar Herbsman, Wei Tong Chen, William Epstein, (1995) found that “the innovative
contracting methods in construction projects have been very successful in reducing
 construction time, while only increasing overall construction costs minimally, if at all.

8. ‘If corporate resources, such as labour, material and equipment, are required to perform
the individual activities, then an Activity - Based Costing (ABC) technique must be
developed that can accommodate the inherent variability in a process if actual costs are to
be accurately predicted. If process cycle time and process cost per cycle can be
accurately predicted for complex, highly variable processes, companies are in a much
better position to determine how proposed corporate initiatives for process improvement
might actually impact overall process performance, say Edward Back, Donald A.
Maxwell, Leroy J. Isidore (2000).

9. “Cost and schedule increases are common in engineering design projects. Analyse the
cause effect relationship, trace responsibility, and improve performance for engineering
design projects”, points out Andrew Shing - Tar Chang (2001).

10. “Analyse the key parameters that affect the cost structure of design firms, such as (i)
direct salary costs (ii) indirect salary related cost (iii) direct non salary costs (iv) general
and administrative costs. These design costs are usually summarized and presented as
labour, overhead and direct non salary costs. A detailed analysis of the elements that
comprise overhead and the key elements that affect overhead can be presented”, say
Michel W. Hurley and Ali touran (2002).
11. “Quantitative data on the historical operating and maintenance costs of these facilities,
along with knowledge of the factors affecting the costs were elicited through various
sources. Cost prediction models developed, using neural networks, regression analyses,
and random deviation detection methods. The system created may be used to assist and
advise on certain aspects of facility management, such as the estimation of operating and
maintenance costs, and the development of preventive and general maintenance plans for
facilities similar to those investigated” say John Christian, Gillin, Amar Pandeya (1997).

12. “Identify the variables for integrated Cost and Schedule control in terms of reducing
required work load. Potential variables including project delivery system, Contract type,
level of outsourcing, degree of specialization, progress measurement methods, budget
 format, management detail, vertical integration and so on can be identified”, according to
Iris Tommelein, Editor, Youngsoo Jung (2005).

13. “Reducing the cost of Construction is a primary concern for owners, designers, and
builders of facilities. So identify the design constraints that limit constructor’s ability to
perform construction operations effectively on-line computer tools that provide cost-
specific constructability feedback to help project teams develop more cost-effective and
constructable design” says Sheryl Staub - French (2003).

14. James B Ang,a survey on recent development in the literature of finance and
growth,2018:”

15. E Anderson, H gatignon Journal of International Business Studies, 1986, JSTOR mode
decision (in 1978Robinsonreview) pointed out that very few companies have consciously
and deliberately cost\benefit analysis options.

16. S Klein, GL Frazier, VJ Roth-journal of marketing research, 1990-JSTOR Literature

review the predictions of transaction analysis in terms of asset specificity and internal
uncertainty (i.e., performance evaluation) have been supported in studies by Anderson
(1985) and John and waits (1988), and Anderson and Coughlin (1987). For an
information review of the technique in cost effectiveness analysis. There can be great
amount of uncertainty involved in the construction of these ratios.

17. DS Sachdev, (2006) suggested that "fast-track completion, is to be followed by increased

use of management techniques, such as CPM / PERT, value analysis, standard cost,
budget control, to improve physical performance and reduce costs."

18. According to Gregory L. Magee (1996), "appropriate financial management required by

the project manager, which provides cash and accrual method of accounting reporting
system. Project accounting system and cost accounting methods of cost control is also
important."

19. According to Ronald · Gulezian and Frederick Samelian (2003), "The variety of methods
to quantify the loss has been applied to the construction of productivity losses. This can
 be used to establish a baseline of productivity applications to the construction
productivity measurement-based the loss of the right to basic requirements on statistical
methods as an auxiliary map "application consists of a process control.

20. D Benavides, S Segura, A Ruiz-Cortes-information systems, 2010-Elsevier “this paper

provides a comprehensive literature review on the automated analysis of feature models
20 years after of their invention”

21. C Ma, DI Stern-Energy economics,2018-Elsevier “A decomposition analysis” the

endeavor of this paper is to inspect the reasons of this setback in the trend and to apply a
more in dept disintegration analysis to a longer period of time.

CHAPTER-3

RESEARCH DESIGN

INTRODUCTION:-
 Every corporate sector main objective is to maximize profits, so they use to manufacture
the goods and render services. To fix the price in manufacturing industry they use to analyze the
incurred cost for producing the single product, but in case of service sector like hotel industry,
hospitals, transport company, consultancy services etc it depends upon the efforts of individuals,
skills of human beings, quality of service provided. So in the service sector operational
performance analysis is a wide task for the organization.

TITLE OF THE STUDY:-

A STUDY ON “COST MANAGEMENT SYSTEM AT KSRTC”, CHICKBALLAPUR

STATEMENT OF THE PROBLEM:-

One of the important objective of any organization whether it may be manufacturing or
service sector is to perform well in order to make profit. This profit can be achieved through
selling goods or rendering services. The profit of any organization depends on the cost of factors
of production and the prevailing competition. The difference between the selling price and cost
incurred provides the margin that is profit.

In order to take strategic decisions they have to analyze the operational performance, so it
directly shows the success or failures of a company. Hence the financial results directly reflect
the operational performance during the financial year.

NEED FOR THE STUDY

The base for fixing the selling price is the cost of manufacturing the profit percentage varies
depending on the cost of manufacturing the Manufacturing Company ascertains the cost on the
unit manufactured. But the main problem faced by the service industry is, the cost depends on
the skill of an individual or concerned type of service (like hotel, hospital, transport etc..,).

Planning is the basic managerial function the techniques of cost accounting such as
standard costing and budgeting are followed which are helpful in measuring efficiency
fromulation of production and pricing policing and jointly acts as a measuring tools for the
performance of the organisation.
The change is the order of the day. If there is no forethought, the industry may not face the
changes of environment, which will affect the performance. Therefore to visualize and to have,
effective guidelines on the basis of control technique are very much essential.

On this line the standard or budgeted control is one of the effective tools for strategic
planning cost control. It is possible to translate the plans into reality by simply preparing budget.
The object of executive is to prepare analytical, functional, budget of different levels as a basis
for planning, control and decision making to save costs and to access the performance of the
company.

Thus it is necessary to understand as to how these service industries are charging for their
services and how the cost of servicing is accumulated. Whether they are able to earn profit, how
cost control is exercised. This is conducted to analyze the costing method adopted in a transport
industry with respect to Karnataka State Road Transport Corporation (K.S.R.T.C), fully owned
by State Government of Karnataka.

OBJECTIVES OF THE STUDY

 To study the operational performance of KSRTC in respect of its
revenue.
 To compare the financial and physical performance.
 To know the cost of operation for rendering services.
 To study the services provided by KSRTC.

SCOPE OF THE STUDY

The study includes the financial and physical performance of KSRTC, various services
rendered, the cost incurred per kilometer and operational coverage of KSRTC at Chickballapur.

METHODOLOGY OF THE STUDY

The study is based on both Primary and Secondary Data. The Primary data is collected by
discussion with the concerned authorities. The research was carried through analytical method.
Research Methodology:
This project is on descriptive research and some extent it regards to causal research, and to use
the available facts as information and analyze these to make a critical evaluation of the materials
this is also a causal research with an aim to find a solution for an immediate problem facing by
industry or business organization. The control aim of descriptive research is to discover a
solution for some pressing problem.

Tools and Techniques of Data Collection:

The tools and techniques of data collection are:
1. Primary data
Primary sources are original sources from which the researchers directly collects the
data that have not been prviously collected.

Primary data was collected by way of interview with the officials of Cost accounting
and Financial departments, and Human resources Departments.

2. Secondarey data
Secondary data are the sources of data which have been collected and complied
statistical statement and reports.

Secondary sources was obtained from various records, like Annual reports,Financial
statements of companies, company profile, Website,Marketing managers reports, Past records.
The theory part is obtained by various reffering text books and other reliable sources.

SAMPLING PLAN
There are two ways in which the required information may be obtained they are:
 Complete enumeration method
 Sampling technique

Here the study is based on complete enumeration method i.e data are collected for
analysis of operational and physical performance as the case may be.
 The advantage of this type of survey will be that no item is left out and hence greater
accuracy may be ensured.

FIELDWORK
The study involves a framework of around 45days, where in the data is collected with the
concerned officials of each of the departments of KSRTC by discussing through posing
questions.

PLAN OF ANALYSIS:
 Summarization of performance statements.
 Calculation of percentage variation.
 Graphical representation over study period.
 Summary of results.

OPERATIONAL DEFINITIONS
 Vehicle Utilization
It is the percentage of Available vehicles in the depot utilized effectively for the purpose
of completing their schedules.
 Load factor

Load factor is the percentage of actual passenger earnings to expected passenger

earnings at full load including standees allowed

 Fleet
Number of vehicle held in the depot for meeting the daily services.

 Fleet utilization
Fleet utilization represents percentage of buses utilized on road to the number of buses
held.
 Spare fleet
It is the extra fleet held in order to overcome the failures in the total fleet of the depot.
 Percentage of the cancellation:
The percentage of cancelled schedules availed in the depot.

TRAFFIC REVENUE
Corporation Revenue:
The revenue obtained from the completing the availed schedules by the regular drivers and
conductors.

1. Private Revenue:
The revenue obtained from the casual hiring and by completing the schedules by hiring private
drivers and conductors.
2. Cost of Operation
It is the cost incurred for the operational activities carried out in the depot for the purpose
of providing service to the public.
3. Breakdown
It is mechanical and non-mechanical failures of the busses.
4. Total revenue
It is the revenue obtained from the corporation and private modes of transport by the KSRTC.
5. Average revenue per bus

It is the revenue obtained by dividing the total revenue from the total number of busses utilized
for the purpose of obtaining the bus services.

6. Transport Coverage
It is the total number of kilometers run by the KSRTC vehicles in order to complete the daily
service.

LIMITATIONS OF THE STUDY

1. Due to constraints of time and other resources, the data collected is only for three
consecutive years.
2. Analysis was made on the numerical data provided.
3. Due to busy schedule of concerned authorities the questions asked were insufficient.