iocl

Summer Training Report

OnREVENUE BUDGET

AtINDIAN OIL CORPORATION LIMITED

(MATHURA REFINERY)

SUBMITED IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE

OFMASTER OF BUSINESS ADMINISTRATION

BYPRADEEP KUMAR

ROLL NO. 0725170041(2007-09)

G.L.A. INSTITUTE OF BUSINESS MANAGEMENT, MATHURA (U.P.)

(Affiliated to U.P. Technical University, Luck now)

GREEN REFINERY CLEAN REFINERY MATHURA REFINERY

1

DECLARATION

I hear by declare that this project report submitted in M.B.A.of

G.L.A.I.B.M. Mathura is the result of my own work. I also declare that to the best of my knowledge & belief the report is my self individual.

Place: Mathura

Pradeep Kumar

G.L.A.I.B.M

MBA (3ndSem)

2


ACKNOWLEDGEMENT

I would like to take this opportunity to express my gratitude towards all those who have, in

various ways, helped me in the completion of this project.

I would like to take this opportunity to thank Mr.S.VIJAY MOHAN, CM (MS & TRG)

IOCL (Mathura Refinery) for giving me the opportunity to work with them and providing

me with necessary resources for our project.

I take this opportunity to extend my sincere thanks to Mr. L.P.BHATTRAI Finance

Manager, IOCL, (Mathura Refinery) and my project guide in the company, Mr. ANSUL

BANSAL guiding me to complete the project.

I would also like to thank the Finance Department, IOCL Mathura for making me

familiar with the intricacies of project development and ensuring that work in a systematic

way.

Also, I would like to extend my gratitude to my institute- G.L.A.I.B.M for giving me an

opportunity to have a practical experience of job.

A warm thanks to all my Colleague Trainees for their cooperation and support throughout

the development process of this project.

3


TABLE OF CONTENTS

Title page

Certificates

Preface(DECLARATION)

Acknowledgement

Table of content

Chapter 1 Introduction

Chapter 2 Introduction about Mathura refinery

Chapter 3 Budget

Chapter 4 Revenue Budget

Chapter 5 Research Methodology

Chapter 6 Analysis and Interpretation

Chapter 7 limitations

Chapter 8 Finding and conclusion

Chapter 9 Graph

Chapter 10 Annexure

Chapter 11 Glossary

Chapter 12 Reference

4


INTRODUCTION OF IOCL

5


INTRODUCTION ABOUT IOCL

Welcome to the world of Indian Oil. Under the administrative control of

the Ministry of Petroleum & Natural Gas, Govt. of India.

Indian Oil, the largest commercial enterprise of India (by sales turnover), is the only Indian

company to find a place in Fortune's "Global 500" of the world's largest companies (Rank

116 in the 2007Global 500). Among Petroleum Refining companies, it has a global ranking

of 17 in terms of revenue. IOC ranks at 189 in the Forbes International listing of 500 largest

non-US companies for the year 2007.

Indian Oil touches every Indian’s heart by keeping the vital oil supply line operating

relentlessly in every nook and corner of India. With the backing of over 33% of the

country’s refining capacity as of 1st April 2007 (over 48%, if the capacity of recently

acquired subsidiaries is also added) and 6523 kms of crude/product pipelines across the

length and breadth of the country, Indian Oil’s vast distribution network of over 21,000 sales

point ensures that essential petroleum products reach the customer at the "right place and

right time".

6


Indian Oil’s marketing share is about 53.2% among oil public sector undertakings India.

Indian Oil’s activities are backed by its "Research and Development Center", the first such

center established in India.

This center has over the years grown into a major technological development center of

international repute. Indian Oil also has four overseas offices in Kuwait, Kuala Lumpur,

Dubai and Mauritius. As the premier National Oil Company, our endeavor is to serve the

national economy and the people of India.

We also have a "vision beyond tomorrow" – of becoming an integrated and diversified

"Global Energy Corporation". We are continuously innovating and strengthening areas of

core competence. At the same time, we are exploiting opportunities offered in the new

liberalized scenario by globalizing and diversifying into related areas.

FOUNDATION

Indian Oil Corporation Ltd. and Indian Oil Company Ltd. Were set up in the year 1958and

1959 respectively to build national competence in the Oil refinery and marketing business.

On 1st September these two companies merged to form Indian OIL Corporation Ltd. (Indian

Oil)

In 1981, Assam Oil Corporation was born. In 1981, Assam Oil Corporation, a private sector

company was nationalized and merged with Indian Oil Corporation.

7

GREEN REFINERY CLEAN REFINERY MATHURA REFINE

STRUCTURE

Indian Oil carries its activities through its five divisions namely:

1 Refinery Division

2 Pipe Line Divisions

3 Marketing Divisions

4 Assam Oil Divisions

5 Researches and Development Division

A Board of Directors manages the company. Besides the Chairman, the

Board has the following full time directors.

1. Director (Refinery)

2. Director (Pipeline)

3. Director (Marketing)

4. Director (Finance)

5. Director (HR)

6. Director (P&BD)

7. Director (R&D)

REFINERIES

Refineries Year of commencement

Guwahati 1962

Barauni 1964

Gujarat 1965

Haldia 1975

Mathura 1982

Panipat 1999

8


Besides the above refineries, namely Digboi refinery is in AOD with installed capacity of .5

million tones. One more proposed refinery Paraded refinery is also under construction with

the capacity with the capacity of 6.0 million.

OIL PIPELINES

Indian Oil has the country’s largest network of on-land crude and product pipelines, with a

combined length o f6, 453 km and 43.45 MMTPA capacities.

MAJOR FEATURES

INDIAN Oil Corporation (Indian Oil) is the largest commercial enterprise in India.

Indian Oil continue to be the loan Indian presence in the Fortune “Global 500” listing of

world’s largest Corporation for the sixth consecutive year. In the largest Fortune listing

based on data for fiscal 2007,Indian Oil is ranked 189 by revenue, 46 steps ahead of the last

year’s position. Among the petroleum refining companies Indian Oil continues to be the 16 th

largest in the world.

Indian Oil is the only Indian company chosen as one of the 15 most admired

companies in the world in the petroleum Refining category as per the survey conducted by

Hay Group Consultancy for Fortune Magazine.

In the “2000 Industry Perception” survey of Asia Pacific Petroleum Trading

Companies conducted by Applied Training System, Indian Oil has BEEN ranked 2nd

amongst the 14 National Oil Companies.

In the list of 800 largest non-US companies published by Forbes Magazine, Indian

Oil is ranked 100th by Revenue.

9

Its main activities are manufacturing various petroleum products through refining of

crude oil, marketing of petroleum products, transporting petroleum product and crude

through its pipeline, research and development in the field of petroleum products etc.


Indian Oil owns and operates 7 of the country’s 14 refineries with a refining share of

over 35.55% its eighth refinery I fine million tones per annum capacity at Pradeep in east

India is under construction.

Indian Oil has a 6,453 km network of pipeline comparable with that of any standard oil

company in other parts of the world for economical, reliable and eco-friendly transportation

of crude oil and petroleum products.

Indian Oil meets 55% of the petroleum product consumption of India. It is also the

canalizing agency for import of crude oil and major petroleum products. Its extensive

network of over 20,000 sales points covers the entire country, and is backed for supplies by

184 terminals and depots, 43 LPG bottling plants and 92 aviation fuel stations.

Indian Oil is the only company in the country with ISO9001/9002 accreditation for

over 50 unit which include refineries, pipelines, aviation fuel stations, tube bottling plants

and the Indian Oil were accredited with ISO 14001 certification for Environment

Management Systems. Indian Oil’s comprehensive, ISO 9001 certified R&D center has

done pioneering job in lubricates. refinery process and pipeline transportation. The center

has developed over 1880 lubricants formulation and obtained approval from national and

international equipment builders. A wholly owned subsidiary

Indian Oil Blending Ltd. Manufactures over 450 grades of the country’s leading SERVO

brand lubricants and greases.

Vision

A major, diversified, transnational, integrated energy company, with national

leadership and a strong environment conscience, playing a national role in oil security and

public distribution.

10


Mission

1. To achieve international standard of excellence in all aspects of energy and

diversified business with focus on customer delight through value of products and

services, and cost reduction.

2. To maximize creation of wealth, value and satisfaction for the stakeholders.

3. To attain leadership in developing, adopting and assimilating state-of the art

technology for competitive advantage.

To provide technology and services through sustained research and development.To

foster a culture o participation and innovation for employee growth and

contribution.

4. To cultivate high standards of business ethic and total quality management for a

strong corporate identity and brand equity.

OBJECTIVES

1. To serve the national interests in the oil and related sectors in accordance and

consistent with Government policies.

2. To ensure and maintain continuous and supplies of petroleum products by way of

crude refining, transportation and marketing activities and to provide appropriate

assistance to the consumer conserve and use petroleum products efficiently.

3. To earn a reasonable rate of interest on investment.

4. To work towards the achievement of self-sufficiency in the field o

foil refinery by setting up adequate capacity and to build up expertise

in laying of crude oil/petroleum product pipelines

11

GREEN REFINERY CLEAN REFINERY MATHURA REFINE

12


INTRODUCTION

ABOUT

MATHURA REFINERY

13


INTRODUCTION ABOUT MATHURA REFINERY

Mathura Refinery, commissioned in 1982, presently operates @ 8.0 MMTPA crude

processing level and is meeting the product demand of North -West region of the country

including the National Capital Delhi.

The Refinery processes low sulphur crude from Bombay High, Nigeria, and high

sulphur crude from Middle East Countries. The process configuration of the Refinery

employs the state-of-the-art technologies with minimal impact on the environment.

Various steps have been taken by Mathura Refinery to monitor and control the

emission of Sulphur Dioxide. Mathura Refinery is the only refinery in the country to

have set up the concern of community and archeological sites. These Ambient Air

Monitoring Stations were commissioned before commissioning of the Refinery in

1981 and being continuously operated thereafter.

Mathura Refinery has taken many initiatives to produce more and more clean fuels in stages

in the interest of environment, public health and preservation of national monuments around.

Its noteworthy efforts are stage-wise implementation of various projects like Catalytic

Reforming Unit,

Diesel Hydrodesphurisation Unit and Hydro cracker for quality up gradation of automobile

fuels. The Refinery has full-fledged ETP comprising of physical, chemical and biological

treatment facilities. The treated effluent from the Refinery fully meets the MINAS (Minimal

National Standards), the prescribes effluent discharge standards.

14

For the protection of the land environment, Mathura Refinery has initiated biodegradation of

oily sludge through "Oilivorous-S", an oily sludge degrading bacterial consortium developed

by IOC (R&D) in collaboration with Tata Energy Research Institute.

A beautiful ecological park has been developed in an area of 4.45 acres. During the recent

survey, the experts from the BNHS (Bombay Natural History Society) have identified 96

species of birds of which 30 migratory ones in the park giving a testimony of richness of life

in the ecosystem.

Mathura Refinery has done extensive tree plantation in and around Refinery. The Refinery

ahs also taken extra-ordinary initiatives to provide green cover to the archeological heritage

sites especially the Taj Mahal by planting 1, 15,000 trees in the Taj region.


STRUCTURE

Broadly Mathura Refinery apart from its Headquarter governed by following departments

namely:

1. Personnel and Administration Department

2. Training Department

3. Management Services Department

4. Vigilance Department

5. Finance Department

6. Internal Audit Department

7. Medical Department

8. Materials Department

9. Production Department

10. Fire and Safety Department

11. Power and Utilities Department

12. Maintenance Department

13. Process Project Department

14. Technical service Department

15


Personnel Department

The primary function of the department are planning & organizing manpower requirement,

estimating vacancies, recruitment to seek and attract qualified applicants to fill vacancies at

lower level, organizational planning to determine the organizational structure, selection,

staffing, internal transfers and promotions, recreation, communication, employee discipline,

performance evaluation, medical services, grievance handling etc.

The primary objectives of personnel department are to design and develop an organizational

structure with well defined relationships commensurate with the business plans and

corporate strategies, promote and develop cooperative attitude among employees for

fostering harmonious relations and cultivate the sense of belonging, evolve progressive and

pragmatic personnel policies, promote and inculcate the culture of employees’ participation

in management, inculcate productivity consciousness among the employees etc.

Training Department

The department is primarily responsible for fulfilling the low-level training needs of

refinery employees and to develop the capability and proficiency of employees and their

advancement through appropriate training and continuous knowledge updating to face

corporate challenges and new technologies.

16

Management Services Department

The department is primarily responsible for fulfilling the data base requirement, EDP

requirements, programming developing & maintenance.

Vigilance Department

The department is primarily responsible for running of the organization free of

frauds, mistakes etc. in each department.


Internal Audit DepartmentThe department is primarily responsible for routine check-up of general day-to-day

working of the organization in order to have the organization free of frauds, mistakes etc. in

each department.

Medical DepartmentThe department is working under the personnel & administration department and is

responsible for the medical awareness and medical requirements of the employees.

Materials DepartmentThe department is primarily responsible for making an integrated approach to the

improvement in Total Materials Management with active involvement of all concerned at

the grass root level

The main function of the department are planning material cycle by avoiding over

stocking, locking up of capital, developing new sources of supply, maintain good suppliers

relations, to procure desired quality material at the appropriate time and at reasonable prices,

to maintain an effective inventory control system, to encourage progressive indigenous

development of imported spares/equipment, to ensure prompt dealings with impartiality,

integrity and courtesy towards vendors and suppliers, to promote ancillary and auxiliary

17

industries, transportation, receipts, inspection, warehousing, preservation, issue, accounting,

to help in physical verification and reconciliation of stores, economic disposal of surplus and

scrap, inventory control including codification, standardization, variety reduction, value

analysis, ABC analysis, FSN analysis etc.


Production Department

The primary function of the department is to receive the crude oil and refining it

through distillation process in order to converting it into the finished product.

Products which are being refined in the Mathura Refinery are Liquefied Petroleum Gas,

Naphtha (Fertilizer use), Aviation Turbine Fuel, Superior Kerosene, Bitumen, Furnace Oil,

Heavy Petroleum Stock, Light Diesel Oil, High Speed Diesel, Motor Spirit, Residual Fuel

Oil, Heavy Petroleum Stock, MS-93. Among the given products of Mathura Refinery,

Sulphur is the by-product, which Refinery produces because of environmental factors.

The main processing units are

1) CDU (Crude Distillation Unit)

2) VDU (Vacuums Distillation Unit)

3) FCCU (Fluid Catalyst Cracking Unit)

4) GCU (Gas Concentration Unit)

5) VBU (Visbreker Unit)

6) BTU (Bitumen Unit

7) SRU (Sulphur Recovery Unit)

8) ARU (Ammine Regircration Unit

9) PRU (Poly Propylene Recovery Unit)

10) CRU (Catalytic Reformer Unit)

11) MSPF (Matching Secondary Process Facilities Unit)

18

12) DHDS (Diesel Hydro De Sulphurization Unit)

13) HGU (Hydrogen Generation Unit)

14) SRU (Sulphur Recovery Unit)

15) GT (Gas Turbine)-Phase 2 etc.

Fire and Safety Department

The department is primarily responsible for fire & safety arrangement and awareness

in the organization in order to have the organization and its employee working in safety

environment. Its main function is to prevent and overcome the hazardous situations.


Power and Utilities DepartmentThe department is primarily responsible for providing and maintaining the power

supply and public utility works in refinery as well as in township.

Maintenance Department

Maintenance department has its three divisions namely:

Mechanical maintenance – responsible for mechanical maintenance work in the

refinery.

Instrumentation maintenance – responsible for instrumental maintenance work in the

refinery.

Civil maintenance – responsible for civil maintenance work in the refinery.

Process Project Department

The department is primarily responsible for project work implementing in the

refineries mainly of process units. Its main function is to procurement of material, plant

construction and its commissioning.

Technical service Department

The department is primarily responsible for technical aspects of the refineries mainly

production and working of units.

19

MAJOR FEATURES Mathura Refinery is the second biggest refinery in India with a capacity of 7.5 MT.

Its main products are Liquefied Petroleum Gas, Naphtha (Fertilizer use), Aviation

Turbine Fuel, Superior Kerosene, Bitumen, Furnace Oil, Heavy Petroleum Stock,

Light Diesel Oil, High Speed Diesel, Motor Spirit, Residual Fuel Oil, Heavy

Petroleum Stock, MS-93 etc.

It is the major supplier for various petroleum products in Northern India.

It is a ISO 14001 and ISO 9001 certified unit of Indian Oil.

Its capacity utilization is more than hundred percent.


Phased dismantling of the Administered Price Mechanism (APM) is one of the

strengths for the corporation as it gives the scope to the organization to compete in

the coming competitive scenario.

Mathura Refinery prepares annual budgets for rural development every year.

IOC Mathura is just 56 Kms. away from Taj Mahal so it has to incur a lot of

expenditure so as to ensure that the pollution is minimum.

A pace setter among the Indian Refineries has become a model for synthesizing

refining technology with environment.

Power is supplied for the whole processing through Thermal Power Station (TPS) in

which 2 of the 3 turbines are used at a time having a Thermal power.

Capacity of 12.5 MW per turbine and total capacity of 3 turbines is 37.5 MW (Mega

Watt).

The Raw Material for refinery is basically Crude Oil from Bombay offshore and

imported crude oil from Australia in the east and Nigeria and Venezuela.

Products are dispatched from this refinery through Rail, Road and Mathura, Delhi,

Ambala and Jalandhar pipeline.

Refinery use of the two pipeline, Mathura Tudala,Matura Jalandhar

OBJECTIVES & CONTRIBUTION The unit has contributed lot on the part of environment.

It has the objective of “Green Refinery Clean refinery”.

It is also the ISO 14001 certified unit.20

FINANCIAL OBJECTIVES

1) To ensure adequate return on capital employed and maintain a reasonable annual

dividend on its equity capital.

2) To ensure maximum economy in expenditure.

3) To generate sufficient internal resources for financing partly/wholly expenditure on new

capital projects.


4) To develop long term corporate plans to provide adequate growth of the activities of the

corporation.

5) To continue to make an effort in bringing reduction in the cost of production of

petroleum products by means of systematic cost control measures.

6) The endeavor to complete all plan projects with in stipulated time and with in stipulated

cost estimates.

FINANCIAL GOALS

1) To inculcate cost consciousness in user departments.

2) Development of Standard Refining costs at each unit level.

3) Proper implementation of budgetary control and submission of MIS in time.

4) To keep the level of inventories below the level fixed by the Board and outstanding

debts, loans and advances and claims at bare minimum.

5) Ensure payment on due date to various agencies.

6) Monitor capital expenditure to ensure completion within stipulated time and cost.

7) Optimize utilization of working capital.

8) Efficient management of funds.

FUNCTIONS OF THE FINANCE DEPARTMENT

21

1) Management of the financial resources for meeting the corporation’s programs of

operations and capital expenditure including investment of surplus fund if any.

2) Ensuring uniform financial and accounting policies and procedures, to the extent

possible, in the division.

3) Establish and maintain a system if financial scrutiny and internal checks and render

advice on financial matters, including examining of feasibility studies and detailed

project reports.

4) Establish and maintain an appropriate system of Budgetary Control and

MIS (Management Information System) for different levels of the Management.


5) Carry out periodical / special studies with a view to control costs , reduce

expenditure , economy in administrative expenditure , improve efficiency to

maximize profitability of the corporation.

6) Maintain the financial accounts, cost accounts and other relevant books and records in

accordance with the various statutory and other requirements.

7) Advise on corporate cash planning, credit policy and pricing of the Corporation.

8) Ensuring that the Corporation acts in all financial and accounting matters as per

approved policies of the corporation within the framework of Government policy for

public enterprises.

GUIDING PRINCIPLES FOR FINANCIAL CHECKS AND

ACCOUNTING

The Principles for financial checks and accounting to be followed by the Finance

Department and by other departments shall among other things include the following:

1) That there is provision of funds for expenditure in accordance with the approved budget

of the corporation or by re-appropriation under delegated powers.

2) That any expenditure is committed/incurred or any liability involving expenditure is

created only after the proposed expenditure has been sanctionedby general or special

approval of an authority to which the power has been duly delegated in this behalf. If the

22

sanction is for a limited period , expenditure beyond that period should be admitted

only after obtaining fresh sanction.

3) That all necessary pre – requisites before an expenditure is incurred such as

preparation of estimates, calling of tenders, acceptance of tenders etc. are observed as

per procedures.

4) That the authorities to who power has been delegated to incur expenditure shall be

responsible for control of expenditure against the corresponding sanction.

That the payments made for work done, supplies made or services rendered shall be as

per legal obligations and in accordance with the agreements entered into by the corporation

5) ends shall be made to proper persons against acknowledgements so that a second

claim against the corporation for the same transaction is ruled out.


6) That proper books of accounts and records shall be maintained in accordance with the

statutory requirements in respect of income and expenditure of the company and such

income and expenditure shall be classified properly.

7) That all moneys due are regularly recovered and checked against demand and that

moneys received are duly bought into the company’s books of accounts.

8) That proper accounts of company’s property , assets , stores, spares etc. shall be

maintained and any loss or shortage of money or stores or other property caused by theft,

pilferage, defalcation or otherwise shall be promptly brought to the notice of the

concerned authorities.

9) That the property and assets of the company whether movable or immovable shall

be periodically verified and reconciled with the books of accounts of the company

to ensure that the books represent the correct position.

10) That the expenditure conforms to the general principles of financial propriety and is

justified on the ground of economical viability or administrative prudence.

11) That the expenditure conforms to the relevant provisions of the Company’s Act ,

Memorandum of Association and the Articles of Association of the company.

12) That the directives issued from time to time by the company regarding financial

scrutiny , internal check , economy in the expenditure or any other allied matters shall

be fully adhered to.

23

13) All regulations , orders or instructions which are of financial nature or having

financial implications shall be issued only after due scrutiny by the G.M ( Finance) at the

Head Office or the Head of Finance at the units concerned.

14) Every employee who is entrusted with the physical custody of the cash , assets ,

materials , or other valuables belonging to the Corporation shall be responsible to

render a proper account of such cash, assets, materials or other valuables as and when

required to do so.


SECTION OF FINANCE DEPARTMENT

MISCELLANEOUS SECTION While the important functions of the department have been dealt with separately in the

earlier chapters, there are several miscellaneous jobs required to be carried out by the

department. The miscellaneous jobs can be broadly divided into following categories: -

Accounting of cash imprested &advance for company;

Passing of bills of miscellaneous nature;

Miscellaneous recoveries from outsiders;

Inter –sectional coordination.

CASH SECTION Cash section shall be responsible for:

Receipts of cash, cheques and bank drafts

Payment by cash, cheques, bank drafts.

Handling of bank deposits/ withdrawals, custody of cash

and transfer of funds

Security arrangement for cash handling

24

Safe custody of valuables & documents

Petty cash Impart

Maintenance of subsidiary cash credit account & special cash credit accounts

Maintenance of cashbook and bank cashbooks.

PAYROLL SECTION

Appointments for vacancies are made either by recruitment or by departmental promotion

or by deputation from Govt./other Department. Against leave vacancies officiating

appointments are permitted in certain cases. All appointments are made in accordance with

the rules prescribed Manual.


The matter relating to recruitment, promotion , transfer, suspension , are dealt with by the

personal deptt. In each case office order is issued by the personal deptt. After observing the

prescribe procedure and given the fixation copies of these office orders are sent to the

finance deptt for the drawing the pay & allowance incumbents.

Rules for pay and allowances are prescribed by Head Office from time to time. The

eligibility for special types of allowances such as special allowances, shift allowance etc. is

determined by Personnel Department and the intimations are sent to Finance Department for

employees eligible for such allowances.

With a view to ensure easy identification each employee shall be allotted a Permanent

employee number by the Office where the employee first joins. This number remains

unaltered as long as the employee continues in service in the

With a view to ensure easy identification each employee shall be allotted a Permanent

employee number by the Office where the employee first joins. This number remains

unaltered as long as the employee continues in service in the Corporation. This number shall

not be allotted to any other employee even if he/she leaves the Corporation. This permanent

number is allotted from the block numbers allotted to various units as under:

25

The annual increments are drawn quarterly on April 1st, July 1st, October 1st and January

1st each year. The eligibility of an employee for annual increment with reference to a

particular quarter of the year is determined as per rules in the Personnel Manual.

For all employees, annual increment is drawn automatically as and when it is due unless

there is an intimation from the Personnel Department to the contrary. Under the present

rules, the date of increment once fixed remains unchanged except for leave without pay in

certain cases when increment is shifted to next quarter by the Office Order from Personnel

Department.

Rules for various types of advances are prescribed in the Personnel/ Administration

Manual. Applications for various advances are received by the Personnel/Administration

Department through the department concerned. They examine the eligibility of each

applicant as per rules and sanctions are forwarded to Finance. Based on the sanctions,

payment is made by Finance and the recovery is affected in installments as per rules.

Payments relating to leave travel concession advance, lump sum payment in lieu of LTC

facility, leave encashment etc., are made on the basis of advice received from Personnel

Department in each case. The eligibility relating to the LTC Block and the number of tickets

as well as leave

enchased shall be examined by the Personnel Department. The amount payable shall be

determined by the Finance as per rules.

The authority for dealing with cases relating to termination of services, voluntary

retirement resignation, retirement etc rests with the Personnel Department.Payment for

retrenchment compensation, gratuity, terminal leave. actual period of work remaining

unpaid etc. shall be made by Finance as per rules on receipt of advice and No Dues

Certificate from the Personnel Deptt. Claims for T.A., medical expenses including post

retirement medical facilities, conveyance reimbursement, Meal/Conveyance for additional

and extended duties, etc. are settled by Finance in accordance with the rules and procedure

prescribed from time to time in each case.

26

Various statutory returns such as returns under Factories Act, ESI Act, Provident Fund Act

etc. are submitted by the Personnel Department. Monetary figures wherever necessary are

provided by Finance.

FUNCTIONS

Function of the Section dealing with Establishment can be broadly classified as follows:

Scrutiny and concurrence of proposals from Personnel Department

Payment of Salaries and Allowances

Advances to employees


Deductions from Pay Bills

Other Welfare Schemes including Gratuity

Personal Claims and other payments

Statutory and Statistical requirements

ACOCUNTING OF ASSETS

For all items of fixed assets such as buildings, plant & machinery, furniture & fixtures etc.

asset register shall be maintained by the Finance Department for complying the various

accounting provisions under the Companies Act and the Income Tax Act.

Adequate depreciation on the cost of fixed assets shall be charged to the Profit & Loss

Account before ascertaining the profit. The acquisition cost of assets should include all

expenses for bringing the asset into existence. Such cost, therefore, includes purchase cost,

erection cost, supervision cost etc. incurred up to the stage the asset is ready for

commissioning

27

The Companies Act prescribes the minimum quantum of depreciation which should be

charged to the profits of limited company before such profits are distributed as dividend,

Keeping in view the statutory requirements and the effective life of the assets, the Board of

Directors have prescribed the rates of depreciation for various categories of assets on

straight line method.

The rates of depreciation admissible under the Income Tax Act are based on written-down

value method and are different from the rates adopted by the Company, for its annual

accounts. As such for compliance of the income tax requirements, details of depreciation at

income tax rate are being maintained separately by Marketing Division, Bombay

In case any item of asset is discarded, sold or written off, the difference between the sale

price of such asset and the written-down value shall be adjusted in the books of accounts as

loss or gain.


Inter-unit and Inter-divisional transfer of movable assets shall be done through the stores

Department.

After issue of the asset item the issue voucher as usual shall be sent to Finance, who on the

basis of the identification number available in the issue voucher shall write the same in their

asset ledger for future reference.

Physical verification of all assets shall be undertaken at least~ once in every three years.

The verification team shall start on the basis of the identification

FUNCTIONS

Following are the main functions in respect of accounting of assets:

i) Capitalization of the cost of acquisition of assets.

ii) Accounting of depreciation

iii) Transfers, disposal and discarding of assets

iv) Maintenance of Asset Ledger

28

v) Arrangement for physical verification of assets.

OIL ACCOUNTING

The Oil Movement and Storage Section in the Refinery is responsible for handling of

receipt, storage and dispatch transactions for crude oil and oil products. The receipt

transactions comprise crude oil supplies and finished products manufactured and/or

procured from outside for blending, if any. Dispatch of finished products is based on the

advice from the Marketing Division.


FUNCTIONS

— Accounting of Crude Oil receipts

— Accounting of Customs Duty on Crude Oil

— Accounting of finished products receipts

— Accounting of dispatch of products

— Excise procedure and accounting

— Material balance and production statistics

PURCHASE FUNCTION

The transactions relating to procurement of materials from the indenting stage to the

payment stage have been divided in various parts whereby each part of the work is handled

by an independent agency till the transaction is completely closed. This division of work

between various agencies operates

29

Detailed procedure as prescribed in the Materials Management Manual is to be followed for

all purchases. A general outline of the functions involved in the

The authority to place indent for materials is subject to provisions in the approved budgets.

Indents for materials on capital account are raised against capital/additional facilities

budgets and on revenue account against purchase budget. Indents for project materials

required for execution of works are to be

The necessity for purchase of the required materials is to be determined solely by the

indenting department and approved by indent approving authority as provided in Materials

Management Manual. The indents are to be raised for the right quantity and at the right time.

The indenting departments are answerable for any stock outs or over-stocking of the

materials.


The Purchases are to be made in accordance with the Tendering Procedure prescribed in the

Materials Management Manual.

The objective of the Tendering Procedure is to ensure that right quality of materials are

purchased from competitive sources and on best available terms and rates, keeping in view

the delivery considerations. lt is also necessary to ensure that no undue advantage accrues to

any particular supplier while finalizing a purchase contract.

After the tenders are invited by the Materials Deptt. the selection of suppliers and the

placement of purchase order is done as per recommendations of the Tender committee with

the concurrence of Finance Deptt.

The placement of purchase orders is to be approved by the competent authority in

accordance with the financial limits prescribed as per delegation of powers.

FUNCTIONS30

The Section dealing with the accounting of purchases is responsible for:

i) Scrutiny and concurrence of purchase proposals;

ii) Deposits and advance payments to suppliers:

iii) Passing of bills for supplies received;

iv) Pricing of Goods Receipt Notes;

v) Accounting of cash purchases made by the Materials Department;

vi) Arrangement for insurance of transit risk;

vii) Maintenance of books of accounts;

viii) Sales Tax matters.


INSURANCE

It is necessary to ensure that timely steps are taken to insure the properties of the

Corporation like plant and machinery, inventories, cash etc. against various risks in

accordance with the policy decisions taken by the Management from time to time.

All policies for general insurance are to be obtained from the subsidiaries of the General

Insurance Corporation of India.

Insurance policies, as far as possible, should be obtained on an annual basis to coincide

with the financial year of the company. When a policy is taken during mid of a year, the

policy shall be extended up to next financial year closing, at the time of its renewal so that

thereafter the renewal of the policy coincides with renewal of other insurance policies.

31

Timely action for renewal should be taken and renewal instructions should reach the

insurers at least one week before the expiry of the policy so that the cover can be granted by

the insurers before the expiry of the current period.

According to the Insurance Amendment Act, 1968 and the rules framed there under,

premium for insurance should be paid in advance. If the premium is not paid in advance, the

risk is not held covered and it results in the nullification of the insurance cover. GREEN

The Insurance Act, however, provides that the premium on insurance policy can be paid

within 60 days of the start of the insurance policy cover provided a Bank Guarantee in the

Performa given in the Act and Rules for an amount equivalent to the amount of Insurance

premium is submitted to the Insurance Company before start of the risk coverage. All the

units have been provided with adequate Bank Guarantee limits for issue of the bank

guarantees in this behalf.

The Act also provides that no cover can be granted for a back dated period. As such

proposals for insurance/renewals should be sent to the insurers well in time.


General insurance contract is a contract of indemnity, the purpose of which is only to

indemnity any actual loss suffered by the insured. After the insurer agrees to indemnity the

actual loss suffered by the insured? the insurer becomes entitled to all the rights and

privileges which the insured is enjoying against third party for indemnification of losses.

Indemnification of losses can not be claimed from the insurers as well as from the third

parties.

Insurance is a contract of good faith. The law casts upon the insured as also the insurer the

duty to disclose mutually every material fact within knowledge. There should be no mis-

statement or omission of facts.

32

STORES SECTION

FUNCTIONS

The Section dealing with accounting of stores in the Finance Department shall have

following functions:

i) Passing and accounting of transportation bills;

ii) Accounting of receipts, issues, return and transfer of materials;

iii) Accounting of imported materials for capital works and operations

maintenance:

iv) Stock verification;

v) Accounting for sale of surplus materials.


AUDIT SECTION

TYPES OF AUDIT

There are five different types of audit in the Organization viz:

a) Statutory Audit;

b) Government Audit;

c) Internal Audit;

d) Technical Audit;

33

e) Tax Audit.

STATUTORY AUDIT

to The Statutory Auditors/Branch Auditors (Chartered Accountants) are appointed by the

Company Law Board in consultation with the Comptroller and Auditor General of India u/s

619(2) of the Companies Act, 1956 for conducting the audit in accordance with the

provisions of the Companies Act. The DFM, In charge of the Main Accounts Section shall

coordinate the Audit work and supply of relevant information,/records/ documents as

required by the auditors. With a view to finalize the annual accounts well within the

prescribed time, it is necessary that all such information, documents are provided

expeditiously by the concerned Sections/Departments the Auditors.


GOVERNMENT AUDIT

Normally the Government audit conducts audit of the following three types:—

i) Routine/Phase Audit;

ii) Periodical review;

iii) Balance Sheet audit under Section 619(4) of the Companies Act.

34

INTERNAL AUDIT

The Internal Audit is functioning under the Director (Finance) through the GM(Internal

Audit) at the Chairman's Office. The functions, duties, responsibilities and powers of

Internal Audit Department have been detailed separately in the Internal Audit Manual.

Internal Audit shall examine independently the final accounts and attached Schedules to the

Balance Sheet and Profit & Loss Account concurrently with finalization of annual accounts.

Any point of observation shade by the Internal Audit, which the Head of Finance

Department considers acceptable for modification of the accounts, may be accepted and

changes be made in Accounts. However, comments by Internal Audit should be offered well

before the finalization of the accounts at the Unit level.

TECHNICAL AUDIT

The Technical Audit Cell has been organized in each of the Units as well as at Head Office.

This cell functions directly under the Head of Technical Services Department at Unit level

and under the GM/DGM at Head Office


TAX AUDIT

Under Section 44 AB of the Income Tax Act, 1961, it is obligatory for every person carrying

on business, if his total sales, turn over or gross receipts, as the case may be, exceed Rs. 40

lakhs in a year to get certain information/data relevant to Income Tax assessment audited

before the specified date by the Tax Auditors (Clattered Accountants) and obtain report of

the audit in prescribed form.

35


36

BUDGETING


WHAT IS BUDGETINGBudgeting is the current outlay of cash in the anticipation (estimate) of future benefit.

The Budget is generally described as a detailed plan for a measured period, setting

goals and outlining resources to meet those goals. In short, it provides details of the

government's receipts and payments.

37

BUDGETARY PROCESS

The budgetary process in business operation can broadly be divided into

Four functions of management.

Communication

Planning

Co-ordination

Control

COMMUNICATION

It is the function of top management to inform people at lower level of

management about the performance expected of them. Top

management uses budgeting as vehicle to communicate goals and expectation to employees

PLANNINGThe effectiveness of budgets depends greatly on the quality of the planning, which has

preceded their framing. Not be realistic or useful. All members of management have to

participate in the preparation of budgets even at the stage of planning, as it will evoke

interest at all levels of management.


38

CO-ORDINATION

To ensure effective implementation of the budgets, it is necessary to have proper co-

ordination. This is achieved by ensuring that budget plans are communicated to all level of

management.

CONTROL

Budget actually covers not only expenditure but all the phases of operations. The function

of control is to ensure that the performance strictly follows the plan envisaged and to point

out the variations between performance and plan as per budget.

REQUISITES OF GOOD BUDGETING

Budgeting is not a function to be performed by finance deptt. Alone. The planning and

budgeting have to be grass root operation in which all levels of management participates.

Finance deptt. Receives the operating plans of the line managers and other departmental

head and transplant those plans into comprehensive projection of financial condition &

operating results.

Budgets are means for setting standard of performance accepted from all levels of

management. Maximum efforts should be made in framing correct estimate of all the factors

involved so that budgets are prepared on a realistic basis.

It is necessary to review the budget procedures continuously.

It is necessary to fix standard of performance, which should be realistic in respect of

various levels of operations. Efforts should be made to adhere to these standards & to

improve upon.

GREEN REFINERY CLEAN REFINERY MATHURA REFINERY39

ADVANTAGES OF BUDGETING

Budgeting ensures effective plans for the most economical use of the resources. It

helps in effective implementation of the plans of the organization. It is based on estimate

and the implementation of any programmed will depend to a large extent on the correctness

of these basic estimates.

Forced planning

Coordinated operation

Performance evaluation and control

Effective communication

Optimum utilization of recourses

Productivity improvement

Profit-mindedness

Efficiency

LONG TERM BUDGET

Long-range plan covers a duration of 5 years. Long range planning is aimed to achieve the

broad objectives envisaged in the perspective plan by fixing specific targets and actions

plans for various functions. It is updated every year so as to have detailed plans for 5 years

at any point of time. It is reviewed periodically with reference to actual performance.

SHORT TERM BUDGET

In addition, cash budget is prepared on monthly basis In the short term, the corporation

prepares revenue & capital budgets indicating the revised estimates for the current year and

budget estimate for the next year. These budgets are more detailed and indicate the expected

physical/financial performance of operations and projects for close monitoring and control

for fund management.


40

TYPES OF BUDGET

Revenue budget

Capital budget

Programme \Activity Budget

Responsibility budget

Cash budget

Sales budget

Production budget

Material budget

Purchasing budget


41

ZERO BASE BUDGETING

In the preparation of the budgets, the principle of zero base budgeting (ebb) is followed

according to which each manager is required to justify his requirement after evaluation of

various alternatives and ranking them in order of importance by systematic analysis.

Activity was taken up in the past. The connotation of any activity is required to be justified

along with other competing claims.

Zbb concept shall be extended only to those areas where it is possible to control the

expenditure. In case of salary & wages, for instance, zbb concept need not be applied.

However, in case of over time, which is controllable, zbb concept shall be applied.

APPROVAL OF BUDGETS

Revenue & capital budgets shall be approved by board of directors. In case of revenue

budget prior approval of the govt is required only in case the budgeted performance shows a

deficit.

42


REVENUE BUDGET

43


REVENUE BUDGET

Revenue Budget is the usual starting point for budgeting because production and inventory

level depends on the forecasted level of revenue.

Consists of Revenue Receipts and Revenue Expenditure of the government

The Revenue Budget is basically a budget of income and expenditure.

OBJECTIVE OF REVENUE BUDGET

To fix a target in respect of physical parameters viz.Throughput, product

pattern, fuel and loss and also that of operating expenses which then become

the basis for monitoring and control.

To estimate based on the targeted physical parameters/ operating expenses,

the likely profit/ internal resource generation, which will then form the basis

for funds management.

Components of Revenue BudgetThe components of Revenue Budget are:

Throughput, Product pattern, Fuel & Loss

Operating income

Raw Material Cost

Operating expenses

44

Based on the above, the summarized position of Revenue Budget is prepared

indicating the estimated profit/ loss during the budget period.


Throughput, Product Pattern and fuel and Loss

For the preparation of Revenue Budget, basic requirement is the estimation of likely

throughput / product pattern for Refineries and estimated throughput of Pipelines.

This estimation is done by inter-active process between Refinery units and Head

Office taking into consideration the shut down schedules, crude oil availability and

other technical consideration. Each Refinery indicates at the beginning of the year,

the shut down schedules, on stream days available etc. to Head Office. Head Office

interacts with OCC to ensure the availability of various products and intimates units

the crude processing profile and the demand for different products. Based on this

data, the Units work out the possible product pattern, which is again sent to HO for

review and confirmation.

Operating Income

Transfer of Products :

Based on the projected throughput/ product pattern, the stocks in hand at the

beginning of the year, and the anticipated stock at the end of the year the dispatches

to Marketing Division shall be worked out. The same is to be valued at the existing

ex-refinery prices for formula products and transfer price for free trade products.

Pool Accounts Adjustments:

The Pool Accounts adjustments relating to products viz. Product pattern variation,

ex-refinery – retention price differential, etc. shall be worked out as per existing

instructions of OCC / Govt.

45


Raw Material Cost

Based on the types of crude to be processed as already determined, the raw material

cost shall be worked out taking into consideration the prevailing cost of crude and

the various Pool Accounts adjustment with regard to Crude Oil Price Equalization

Account (COPE), Cost and Freight Adjustment Account (C&F), etc.

Operating expenses

Controllable Cost

The operating costs are estimated based on Zero Base Budgeting (ZBB) concepts in

respect of controllable items of expenditure. The following illustrative items are

covered under ZBB:

- Chemicals & Catalysts

- Repairs & Maintenance

- Overtime

- Traveling & conveyance

- Communication expenses

- Printing & Stationery

- Staff Car expenses

46


Chemicals & Catalysts

The quantitative data should be based on the Technical parameters and separate

decision package should be prepared in respect of each chemical / catalyst. In case of

centrally procured chemicals, the rates will be advised by HO and in case of other

chemicals, the rate has to be taken as per the latest prevailing prices with appropriate

escalations. In all cases, the landed cost of chemicals at refinery / Pipeline location

should be the basis for valuing the same.

Repairs & Maintenance

The decision packages for different jobs have been standardized and they are

indicated in the forms. In order to ensure uniformity, these decision packages should

be operated.

Overtime

The estimate of overtime should be based on the assessment of the overtime

requirements in terms of hours. Generally overtime estimate is coordinated by MS

Department of each Unit. The overtime is converted in terms of value by taking into

account the prevailing wage rates with appropriate escalation factor.

Traveling & Conveyance

While estimating the requirements, care should be taken to included the increase in

the number of employee. The latest reimbursement rates are to be taken into account

while estimating the expenditure. In case of official tours, the estimate shall be based 47

on the ZBB concept. It shall be ensured that the latest prevailing trains / airfare is

considered while working out the projected expenses.


Communication Expenses

The increase in tariff for telephones / postage etc. should be taken into consideration

while estimating the requirements. The additional facilities installed viz. Increase in

number of telephone connections, telex facilities, introduction of courier service, etc.

should also be taken into account while estimating the requirements.

Printing & Stationery

The requirement on account of computer stationery, special printing jobs that may be

undertaken during the year etc. are to be taken into consideration while estimating

the requirements.

Staff car expenses

The expenditure under this head would include amount spent on Company owned

cars/ jeeps and buses. While estimating the requirements, the latest prevailing rates

for petrol / diesel is to be taken into account.

NON-CONTROLLABLE COST

- Power & Fuel

- Establishment

- General Administration Expenses

48

- Depreciation

The following points shall be taken care of at the time of estimation:


Establishment

Increase in manpower shall be identified with reference to specific projects and the

impact of the same shall be considered while estimating the expenditure. Escalations

for normal increments/ DA are to be provided as per advice from HO from time to

time. Care shall be taken to project realistically the expenditure on welfare items like

canteen/ medical based on the experience of the Unit.

General Administration Expenses

The trend of expenses should be analyzed based on the last two to three years to

establish the normal rate of increase. In case of insurance, the estimate should be

based on the actual amount of insurance as per the cover already taken and the likely

increase in replacement cost. For future projections, the impact of new additions

should also be taken into account.

Depreciation

Care should be taken to ensure that in case of assets reaching 95% of the original

cost, no further depreciation is provided as per the Accounting Policy. In case of

assets, which have to be commissioned during the years for which budgets are

prepared, adequate depreciation should be provided for them.

It shall be ensured that the additions are in conformity with the completion schedule

as indicated in the plan documents / AF Budget.

49


Review at Head Office

The budgets received from Refinery Units / Pipelines Head Office shall be reviewed

by Finance of Head office R&P Division in association with other functional

departments in Head Office. Wherever changes are advised by the other functions,

the same shall be carried out. The budgets thus finalized shall be submitted to the

Budget Committee at Head Office for consideration and approval. After, the

approval, the detailed analysis for consolidation at corporate level and submission to

Board of Directors.

Approval of Budgets

Chairman’s office after consolidating the budgets received from various Divisions

will put up the same to the Board of Directors for approval. After the approval of the

Board is received, the same shall be intimated to the Divisions. The budgets as

finally approved by the

Board will be the basis for comparison with the actual for monitoring and review.

Based on the final approval, Head Office of Refineries & Pipelines Division shall

forward the detailed budgets to the Refinery Units / Pipelines Head Office for

monitoring and review.

Revenue Budget Guideline

Crude oil and product prices-Indigenous and imported crude oil prices and product prices to be considered for the purpose

of budget.

50

Throughput and crude mix-Throughput and crude mix are to be advice of technical deptt.


Entry tax-Entry tax to the extent of production of four major products( LPG, MS, SKO,and HSD) to

be shown separately .

Natural Gas-The details of natural gas consumption (Qty, Rate and Value) should be shown separately.

Operating Cost-Units should provide details of extraordinary activities along with operating cost details and

steps taken for cost control/ reductions.

As per instructions from corporate office, operating cost is allowed to the extent of

actualOf 2006-07 or 2007-08whichever is Higher.In a view of that the details of one time expenditure & new item expenditure on new projects

to be shown separately along withFor all the years.

A separate note on cost control measures along with steps taken & proposed to be taken to

keep the cost at the levels of actual 2006-07 or 2007-08 , whichever is Higher, may be

enclosed .

Chemical, Catalyst & Consumables - Details of actual consumption, quantity, rate for the year 2006-07 along with the projections

for RE 2006-07 & 2007-08may be sent reasons for variation in quantity may be given.

Norms considered for chemical consumption to be enclosed. One time chemicals to be

reported separately.

Repairs and Maintenance -

51

The summary of the expenditure department – wise/cost center wise is required to be

furnished to enable the maintenance department of HQ to review the same before

finalization .The same may be sent in advance so that it may be reviewed by M&I

department. GREEN REFINERY CLEAN REFINERY MATHURA REFINERY

Overtime-

A summary of department wise overtime hours & overtime amounts should be furnished

along with reasons for variation.

Traveling& Convenience , Printing And Stationary And Communication

Expenses -

Reconciliation of this expenses may be furnished . communication expenditure to be based

on the latest tariff in view of reduction in rates.

.

Other Overheads-

Overheads may be considered keeping in mind cost control drive . expenses on technical

fees , community development and enlistment of SC/ST may be assessed and highlighted

separately.

Depreciation-

Depreciation shall be provided at existing rates on pro-rata bases taking into consideration

likely addition during the year. The details of air pollution control equipment, water

pollution control equipment and energy saving devices which carry 100% dep. Under rule 5

of the Income Tax Act 1962 may be shown separately.

Environment And Pollution Control - 52

Actual expenditure and amount provided in RE 2006-07 and BE 2007-08 for environmental

up-gradation and environmental protection and pollution control may be given


Research methodology

53


Research methodology

1.SAMPLE SIZE: During the sample survey reports of my project we asked the question to

hundred peoples who are employed in Mathura Refinery.

2.SAMPLE AREA: During the survey report we cover all the departments in Mathura

Refinery.

METHOD OF DATA COLLECTION

1. PRIMARY DATA:- Primary data were collected by the method of distribution

questionnaire to the Finance department of Mathura refinery and analyzing and

evaluating feedback from.

2. SOURCES OF SECONDARY DATA:- secondary data were collected by following

sources

Text books

Internet & Websites

Annual General report

54


ANALYSIS AND INTERPRETATION

55


ANALYSIS AND INTERPRETATION

CURRENT RATIO = CURRENT ASSET

CURRENT LIABILITIES

=1.7 (IN 2008)

=1.5 (IN 2007)

INTERPRETATION:- Relatively high current ratio is an indication that the firm is liquid

and has the ability to pay its current obligations in the time us and when they become due

and low current ratio represents that the liquidity position of the firms is not good and firms

shall not be able to pay its currents liabilities in the time without facing difficulties.

DEBT EQUIT RATIO = BOAROD FUND

OWNER FUND

=0.6(IN 2008)

=1.35(IN 2007

INTERPRETATION:-its indicate the margin of safety to long term creditors. A low debt

equity ratio implies the use of more equity than debt which means a larger safety margin for

creditors since owners equity is treated as a margin of safety by creditors and vice versa.

56

EQUITY RATIO = PROPRIETORS

TOTAL ASSETS

=0.6 (IN 2008)

=1.35 (IN 2007

INTERPRETATION: An equity ratio represents the relationship of owners funds to total

assets, the higher ratio or the share in total capital of company, better is the long tern

solvency position of company.


STOCK TURN OVER RATIO = NET SALE

AVERGE INVENTORY

=26.81 (IN 2008)

=18.96 (IN 2008)

INTERPRETATION: If too high ratio may be the result of a very low inventory levels and

too high low ratio may be result of excessive inventory level. show making incurred the high

carrying cost.

FIXED ASSETS OVER RATIO = NET SALE

AVERGE FIXED ASSETS

=18.86 (IN2008)

=17.80 (IN2007

INTERPRETATION: It indicates the firm’s ability to generate sale per rupees of investment

in fixed assets .higher the ratio is the more efficient the management and utilization of fixed

assets.

NET PROFIT RATIO = NET PROFIT * 100

NET SALE

=13.72% (IN 2008)57

=6.90% (IN 2007)

INTERPRETATION:

Average net margin earned an the sale of Rs100

What portion of sale is left to pay dividend and to create the reserve and higher the

ratio is the greater the capacity.


LIMITATIONS

There were a lot of problems at the time of project reports.

1. Shortage of time

2. Shortage of money

3. Wrong answers

4. Improper data

5. During Training time most of the staff on leave.

58


FINDING AND

59

CONCLUSION


FINDINGS

1.In the broad sense training is necessary to make the students of professional institution

familiar with industrial environment This regard we gain knowledge about the topic of

Revenue Budget..

2.Revenue Budget basically it is the benefit of the company because this is based on the

income and expenditure of the company.

CONCLUSION

60

Mathura Refinery was commissioned in 1982. First Lady P.M. Mrs. Indris Gandhi laid the

foundation. It is the second largest refinery in India with the capacity of 7.5 MMTPA. The

refinery mainly produces middle distillates and supplies them to Northern India through a

product pipeline to Jalandhar, Punjab via Delhi.

From the data interpretation Result we can conclude that, the Revenue Budget of this year

higher than the previous year it means total expenditure is less than income.Compaire of the

to year Balance sheet data throught different Financial ratio such as Debt Ratio, Turn over

ratio, Net profit ratio, Equity ratio, Fixed assets ratio,etc.


61

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

YEAR

RS.IN

YEAR 2,008 2007

RS.IN 991,315,563 478,419,617

1 2

GRAPHS


PLANT&MACHINARY

62

0

500,000

1,000,000

1,500,000

2,000,000

YEARRS.IN

YEAR 2,008 2007

RS.IN 959,189 1,717,948

1 2

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000

YEARRS.IN

YEAR 2,008 2007

RS.IN 7,731,185 7,084,292

1 2

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

YEAR

RS.IN

YEAR 2,008 2007

RS.IN 3,252,286 2,927,173

1 2

ELECTRICITY&WATER

COMMUNICATION

GREEN REFINERY CLEAN REFINERY

MATHURA REFINERY

BANK CHARGE

63

0

20,000,000

40,000,00060,000,00080,000,000

100,000,000

120,000,000140,000,000

160,000,000

180,000,000

YEAR

RS.IN

YEAR 2,008 2007

RS.IN 155,403,467 144,657,032

1 2

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

YEAR

RS.IN

YEAR 2,008 2007

RS.IN 54,276,670 49,387,563

1 2

OVERETIME

TRAVELLING AND CONVEYANCE

64


ANN

EXURE

65


MATHURA REFINERY PROFIT & LOSS ACCOUNTPARTICULARS 2008 2007

66

INCOME1.TRANSFER OF PRODUCTS TO MRKT. DIVISION EX-REFINERY PRICE TW/TL/PIPELINES INCLUDING EXCISE DUTIES ON TOP LESS; EXCISE DUTY ON TOP TO MRKT.DIVISION

SALES(NET)

2.INCREASE/DECREASE IN STOCK3.THER INCOME4.INTEREST FROM MARKETING DIVISION5.INTEREST FROM A.O.D.5.SERVICE CHARGE FROM MKTG.DIVISION6.SERVICES CHARGE FROM PIPELINES7.TRANSFER OF ELECTRICITY TO PIPELINE TOTAL INCOME

EXPENDITURE

1.MANUFACTURING,ADMN.SELLING AND OTHER EXPENCES LESS; CO.USE OF OWN OIL NET

2.TRANSFER OF FINISHED PRODUCTS FROM MARKETING DIVISION3.INTER UNIT TRANSFER IF PRODUCTS4.EXCISE DUTY LESS;EXCISE DUTY ON TOP TO MKT. DIVISIONNET5.DEPRECIATION AMORTISATION6.INTEREST ON LOANA.OCC/OIDB LOAN B.GOVT.LOANC.BANKSD.FOREIGN BANK CREDITE.OTHERSTOTAL

261,262,522,609

42,958,302,306

218,304,220,303

3,218,783,0961,031,100,166

00

70,837,8525,930,060

31,423,487

222,662,294,964

191,381,790,7720

191,381,790,772

0

-1,580,973,09343,168,810,59842,958,302,306

210,508,2921,825,472,273

517,446,33100

38,325,66258,579,117

614,351,110,

263,369,804,298

48,492,932,526

214,876,871,772

153,290,954194,759,206

00

69,583,8284,920,000

28,564,951

215,327,990,711

199,901,168,0700

199,901,168,070

0

-2,624,433,02648,821,666,67048,492,932,526

328,734,1441,866,335,467

712,009,12300

43,034,338264,266

755,307,727

MATHURA REFINERY PROFIT & LOSS ACCOUNTPARTICULARS 2008 2007

67

7.SERVICE CHARGE PAID TO BO8.COMMITMENT CHARGE9.EXPENDITURE PAID TO OTHER DIVISION10.HO EXPENSES ALLOCATIONTOTAL EXPENDITURE11.PROFIT FOR THE YEAR BEFORE TAX12.INCOME RELATING TO PREVIOUS YEAR(NET)13.PROFIT BEFORE TAX14.BALANCE BROUGHT FORWARD FROM YEAR ACCOUNT15.LESS:TRANSFERRED TO REGUSTERED OFFICE 16.BALANCE CARRIED TO BALANCE SHEET

17,360,78700

248,098,000 192,716,608,141

29,945,686,8238,243,968

29,953,930,791

14,840,602,48314,840,602,483

29,953,930,791

17,003,56600

2189,129,000200,462,244,49814,865,745,763

-25,143,280

14,840,602,483

20,074,905,62720,074,905,627

14,840,602,483


MATHURA REFINERY BALANCE SHEETPARTICULARS 2008 2007

68

SOURCES OF FUNDS

1.SHARE CAPITAL2.RESERVES&SURPLUS3.TOTAL SHAREHOLDER FUND4.LOANS A-SECURED B-UNSECURED

5.TOTAL FUNDS EMPLOYED

6.HO/A/C/BRANCHA/C(CONTRAS)

TOTAL

APPLICATION OF FUNDS

1.FIXED ASSETS a. GROSS BLOCK b.LESS DEPRECIATION

c.NET BLOCK

d.DISMANTLED CAPITAL STORES e.CAPITAL WORK IN PROGRESS

TOTAL-1

2.INTANGIBLE ASSETS a. GROSS CARRYING AMOUNT

b.LESS:ACCUMULATED AMORTISATION

c. LESS:ACCUMULATED IMPAIRMENT LOSS

d.NET CARRYING AMOUNT

029,953,930,79129,953,930,791

24,004,4840

29,977,935,275

5,818,228,402

35,796,163,677

37,219,011,82214,657,310,790

22,561,701,032

8,872,109567,180,637

23,137,753,778

209,201,139

71,295,941

0

137,905,198

0 14,840,602,,483 14,840,602,483

45,586205 0

14,886,188,688

18,197,566,293

33,083,754,981

36,969,069,348 12,899,777,315

24,069,292,033

8,729,200 447,891,590

24,525,912,823

209,201,139

44,816,314

0

164,384,825


MATHURA REFINERY BALANCE SHEETPARTICULARS 2008 2007

69

3.INVESTMENTS4.CURRENT ASSETS, LOANS&ADVANCES A.CURRENT ASSETS a. INVENTORIES b.SUNDRY DEBTORS c.CASH&BANK BALANCE B.LOANS&ADVANCED

TOTAL-4

5.LESS: CURRENT LIABILITIES &PROVISION a)CURRENT LIABILITIES b)PROVISION

6.NET CURRENT ASSETS(4-5)7.MISCELLANEOUS EXPENDITURE DEFERRED REVENUE EXPENDITURE 1.VOLUNTARY RETIREMENT COMPENSATION AS PER LAST A/C ADD: EXPENDITURE INCURRED DURING THE YEAR LESS:AMORTISED DURING THE YEAR

8.INTER DIV/UNIT BALANCES a. MARKETING DIVISION b.PIPLINES c.A.O.D. d.R&D CENTRE

TOTAL

2,000

16,281,256,739 0 112,919 17,611,784,476 33,893,154,134

19,998,051,505 0

13,895,102,629

0

3,945,924 3,945,924

-1,451,240,078 76,640,150 0 0

35,796,163,677

2,000

11,328,059,102 0 2,625,744 18,434,453,083 29,765,137,929

2,005,1712,590 0

9,713,425,339

7,871,469

2,421,874 10,293,343

-1,361,326,334 41,356,328 0 0

33,083,754,981


70

GLOSSARY

71


GLOSSARY1. AL – Authority Letter

2. CFM –Chief Finance Manager

3. CHO – Central Head Office

4. DGTD – Director Of Trade and Distribution

5. DOP – Delegation Of Power

6. ED – Executive Director

7. EMD – Earnest Money Deposit

8. GRN – Goods Received Note

9. GM – General Manager

10. HOD – Head of the Department

11. IOCL – Indian Oil Corporation Limited

12. ISD – Initial security credit

13. LSC – Letter Short Credit

14. MR – Mathura Refinery

15. MB – Measurement Book

16. MIV – Material Issue Voucher

17. MRV – Material Receipt Voucher

18. POS – Preliminary Observation Slip

19. PRE-MAC – Management Audit Committee

20. QRIP – Quarterly Report on Important Point

21. ROP – Re Order Point

22. RA – Running Account

23. SAF – Significant Audit Findings

24. ZBB – Zero Base Budgeting

25. MS- Motor Spirits

26. FO-Furnace oil

27. RFO-Residual Furnaces oil

28. HSD-High speed diesel

29. SKO-Superior Kerosene oil

30. RN-Naphtha

72


REFERENCES

73


REFERENCES

INTRODUCTION ABOUT IOCL WWW.IOCL.COM

FINANCIAL & OPERATIONAL PERFORMANCE DARPAN

(Magazine of IOCL)

ACCOUNT MANNUAL OF IOCL

WORK PROCEDURE MANNUAL OF IOCL

FINANCIAL MANAGEMENT I M PANDEY &

KHAN AND JAIN

74


75

Documents

iocl