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Iocl ppt
- 3. Nation’s flagship oil firm with turnover more than Rs. 457 thousand crore. Ranked 96th in Fortune 500. 49% market share of petroleum products in the country. 31% national refining capacity. Second largest petrochemical player in the country. Employs more than 34,000 people.
- 5. IOCL Corporate Office Refinery Division Pipeline Division Marketing Division R&D Assam Oil Division
- 6. Processing of crude oil and deliver final product (Refinery Division) Dispatch/Transfer Final Product (Pipeline Division) Receipt and Sales (Marketing Division)
- 7. Marketing Division Northern Region Punjab State Office Rajasthan State Office Delhi State Office Lucknow State Office Noida State Office Southern Region Tamil Nadu State Office Kerala State Office Karnataka State Office Telangana and Andhra PradeshState Office Western Region Gujarat State Office Maharashtra State Office Madhya Pradesh & Chhattishgarh State Office Eastern Region Kolkatta State Office Orissa State Office Bihar State Office Guwhati State Office
- 8. DSO Retail Sales Consumer Sales Operation LPG Lubes HR IS Finance Legal Engineering
- 9. DSO Installations Panipat Ambala Bijwasan Rewari Tikri Kalan LPG Plants Tikri Kalan Madanpur Khadar Karnal Gurgaon Lube Plants Asaoti Manesar AFS (Aviation) Ambala Palam Divisional Offices Delhi Panipat Gurgaon Hissar Area offices Delhi Karnal
- 11. Finance Department Main/Final Accounting Capital Budget and Asset Accounting Revenue Budget Banking Customer Accounting Sales Tax Payments and Assessment
- 12. A quantitative statement which gives the estimated revenues and expenditures for the period under consideration. It serves as the guiding financial document which depending on the estimated costs, allocates the funds to various departments and functions to carry out different activities.
- 13. A budget is prepared for a fixed period of time. A budget expresses the policies to be followed by the organisation to achieve the stated objective of the firm. Budget serves as a benchmark against which the performance of the firm is constantly monitored. A budget needs to be flexible to allow for the variations in actuals and estimated in ever changing environment.
- 15. Budget According to Time Long Term Short Term Current Budget According to Function Sales Budget Production Budget Materials Budget Labour Budget Factory Overhead Budget Administrative Expenses Budget Selling and Distribution Overhead Budget Cash Budget Master Budget Capital Expenditure Budget According to Flexibility Fixed Budget Flexible Budget
- 16. Units/Locations Sent requirements for the period under consideration State Office Contact Heads of different functions for their requirements After critically reviewing, the same is consolidated and Sent to Regional Office Regional Office Committee of 5 members including 2 Finance Representatives each from state office Regional office review the budget, consolidate the budget for entire region and sent it Head Office Head Office Consolidated Date is Received from all the regions Further review, consolidation ,and sent to Board of Directors for final approval
- 17. Controllable Expenses Overtime (C_OVERTIME) Travelling and Conveyance (C_LTOUR AND C_FTOUR) Non- Controllable Expenses N_SALARY N_INSURANC N_INTEREST N_LEGAL N_LOSSES N_MEDICAL N_RENT N_TAXES
- 18. Actual Expenses 2013 -2014 (-) Extraneous amount (for 2013 -2014) (-) cut amount (Reduction for the purpose of economy) (+) inflation amount (+) additional amount for new activities (2014 – 2015) (+) Extraneous activity (current year) (=) RBE (2014 – 2015)
- 19. RBE 2014 -2015 (-) Extraneous amount (for 2014 -2015) (-) cut amount (Reduction for the purpose of economy) (+) inflation amount (+) additional amount for new activities (2015 – 2016) (+) Extraneous activity (current year) (=) OBE (2015 – 2016)
- 20. Variance analysis looks for the reasons in the difference between the budgeted and the actuals. Depending on the analysis which helps in identifying the major sources of the differences, corrective action can be taken by IOCL.
- 21. 2014 – 2015 ( Rs /lacs) Amount (Rs/Lacs) Budget Head Function Actual RBE Variance Reasons of Variance LPG Store LPG Plants 945.48 1305.52 360.04 Reduction in replacement of Cylinder Valves and rate variance during CY. Additionally, a drive was initiated to limit the expenditure to 90% of the allocated budget. Tour DO Retails 47.43 51.31 3.88 Less tours during CY as per Austerity measures. Overtime Installation 621.47 616.69 -4.78 Additional activities at new terminal during CY. Repair & Maintenance DO Retails 17.18 13.61 -3.57 Increase in M&R Cost at Retail outlets , New M&R Jobs at RO's for better look , expense on account of Swatch Bharat Abhiyan etc.
- 23. There has been a substantial increase in maintenance and repair costs of around 15% more than the expected as well as new additional jobs at the retail outlets which indicate towards the standards being used to estimate the same resulting in underestimation and thus negative variance. Such situations can be avoided by strengthening the internal estimation practices and linking the estimation of repair costs to the expected new jobs as well. In many of the heads of budget a positive variance was achieved due to the austerity measures initiated where it was targeted to limit the actual expense to the 90% of the allocated budget. Also, with increased efficiency funds could be better utilized as indicated by the positive variance in LPG plant consumerables head which resulted in less losses and thus positive variance.
- 25. The process of filling the gap in any budget head by compensating it from the surplus budget head is known as Re-appropriation of Budget. Re – appropriation can be done in following ways: One Head to another head under same function Inter-function
- 26. Function requiring budget prepares approval note for short budget which is signed by function surrendering the surplus budget. Finance Department verifies the correctness of data in SAP and same is concurred and sent to approving authority for final approval. Final approval note is sent to Finance for re-appropriation of addition budget. Addition of budget/ re-appropriation in SAP is done using T Code FR58.
- 27. Enter the Details of Surplus Head Enter Details of Deficient Head
- 28. Before the actual process of re – appropriation can be initiated, an informal process needs to be carried out where the cost head having short budget knows that the particular cost head which is having the surplus budget. This results in lot of coordination problem where a lot of effort is wasted by the short budget department in finding the department with the surplus budget. Improvement: This drawback can be overcome by providing a module in SAP application where the approved authorities can have a look at the departments with non – committed budget as well as those departments which have almost committed the budget allocated to them.
- 30. SES No Company Code (1100 DSO)
- 31. This option allows to receive the bill forwarded to the user. This tab shows the bill that has been forwarded to this user.
- 32. An overtime charge of 0.5% was applied for each week on the vendor for the delayed completion of work after the stipulated date. The upper limit on the over time charge was 10% i.e. if there is more than 20 weeks delay in the completion of work and the over time charge would be kept at 10%. Also, IOCL has the policy of with-holding 30% of the amount of invoice i.e. at the time of payment, 70% of the invoice payment after cutting of taxes (service tax of 4% in Delhi, 6% in Harayana) and other charges is paid to the vendor. The remaining 30% payment is paid after the observation period i.e. after IOCL is satisfied about the performance of the service or the component provided by the vendor. The recent version being used provides an option of BTS (Bill Tracking System) which was not present earlier. This is one of the most useful additions as it helps both IOCL and its partners/vendors to track the present status of the invoice ranging from being cleared by the Engineering department to the payment being made by IOCL. Also, it also provides the employee id in whose bucket is pending. This has increased the invoice clearing system dramatically.
- 33. SAP R3 (Version: 7300.2.5.1084) IOCL uses SAP R3 version 7300.2.5.1084, ERP system which provides real time, on-line information for decision making and analysis.
- 34. Reduction of paper work More training to the manpower especially to the people with more than 10 -15 years of work experience The internal mechanisms need to be further strengthened specially for re –appropriation
- 35. Thank You