Beruflich Dokumente
Kultur Dokumente
A REPORT
ON
AT
Submitted by:
Mehul K Patel.
MBA 4TH SEM
BIMS
Place: Vadodara
Signature
Date: 05-10-2010
( Mehul K Patel)
08
HIGHLIGHTS
09
HISTORY OF IPCL
PRODUCTS AND BRANDS
PRODUCT FLOW CHART
13
2002 ONWARDS-RELIANCE ACQISITION
14
COMPANY LOGOS
16
RIL MILESTONE
17
GROWTH THROUGH CHALLENGES
21
BOARD OF DIRECTORS
23
MISSION & VISION
24
VALUES & QUALITY POLICY
25
THE VADODARA COMPLEX
27
CENTRAL TIME OFFICE (CTO)
29
LEGAL AND WELFARE
SOCIAL EVENTS AT RIL VMD 30
50
OPERATION CYCLE
51
REPORT ON WORKING CAPITAL MANAGEMENT
HIGHLIGHTS
HISTORY OF IPCL
2002 ONWARDS-RELIANCE ACQISITION
COMPANY LOGOS
RIL MILESTONE
GROWTH THROUGH CHALLENGES
BOARD OF DIRECTORS
MISSION & VISION
VALUES & QUALITY POLICY
THE VADODARA COMPLEX
CENTRAL TIME OFFICE (CTO)
LEGAL AND WELFARE
HIGHLIGHTS
)
Significant contribution to India’s economic growth
HISTORY OF IPCL
HISTORY (1969-2002)
Indian Petrochemicals Corporation Limited (IPCL). A company
under the Companies Act with Registered Office at Jamnagar (near
Vadodara) in Gujarat was registered n March 22, 1969. It was
assigned the responsibility of setting up two upstream mother units
and two downstream units near an established public sector refinery,
Gujarat Refinery of Indian Oil Corporation on the outskirts of
Vadodara in Gujarat. The first board meeting of the board of
directors of the company held on March 26, 1969 at New Delhi. The
private sector entrepreneurs who were initially allocated six
downstream units during that period were reluctant to invest in this
industry. The industry was highly capital intensive, involved
handling and processing of hazardous material, involved development
of nascent markets and managing new technologies with a skill base
that was inadequate. Hence they were doubtful about the prospects in
the industry and were unwilling to invest. On the other hand, the
government realized the importance of integrated nature of the entire
project.
under a single ownership, being the first of its kind in the Indian
Limited (EIL) carried out majority of detailed engineering and
construction jobs for the complex at vadodra. The inauguration of
these downstream plants marked the successful culmination of the
cooperation between India designs, engineering and construction
companies. Indian and foreign equipment manufactures, various
govt. and private research organizations and the international process
licensers. This also meant a beginning of an era for chemicals,
thermoplastic elastomers, and synthetic fibers, organic intermediates
for drugs, insecticides, pharmaceuticals, dyestuffs and synthetic
detergents.
Disinvestments
74% higher than the closing price of IPCL's shares at National Stock
Exchange, Mumbai.
The offer from Indian Oil Corporation was Rs. 826 crores (Rs.
128 per share) and that from Nirma Chemical Works Ltd. was Rs.
711 Crores (Rs. 110 per share).
COMPANY LOGOS
growth, rooted in the earth and in harmony with the other elements -
water, light, air and space
RIL MILESTONE
YEAR EVENTS
1969 IPCL was incorporated under company act.
1970 Construction of our first Petrochemicals complex commenced at
Vadodara, Gujarat.
1973 Commenced commercial operation at Vadodara.
1992 Initial public offering and listing on the Vadodara stock
exchange
1992 Second Petrochemical Complex commenced at Nagothane,
Maharashtra
1996 Third Petrochemical Complex commenced at Gandhar
1999 Gandhar complex commissioned.
2000 Completion of the second phase of the Gandhar complex
2002 Reliance took over IPCL.
2004 Amendment agreement between the government and the
strategic partner, Reliance petroleum limited, a Reliance group
company.
2005 Government of India withdrew its nominee directors from the
board of directors of India petrochemicals co. ltd.
2006 Amalgamation of six polyester companies i.e. Apollo fibres ltd,
Central India ploysters ltd, India polyfibres ltd, Orissa polyfibres
ltd, Recron synthetics ltd and Silvassa industries Pvt ltd with
IPCL.
2007 RIL complete a landmark acquisition of IPCL.
2008 RIL signed MOU with GAIL(INDIA) Ltd. to explore
opportunities of setting of petrochemical plants.
2009 RPL merged with RIL Ltd : value creation through scale &
synergies.
"Hard work, timely decisions, speed and ingenuity" says one of the
senior managers of Reliance Industries to sum up what Reliance is all
about.
"Between my past, the present and the future, there is one common
factor: Relationship and Trust. This is the foundation of our
growth."
Shri Mansingh L.
Shri Yogendra P. Trivedi Dr. D. V. Kapur
Bhakta
OUR MISSION
QUALITY POLICY
P.O.: Petrochemicals,
Dist.: Vadodara - 391 346.
Tel: 91 - 265 - 3067221
Facsimile: 91 - 265 – 3067333
Casual leave - 10
Restricted holidays-2
Fixed holidays-10
Privilege leaves – 2.5days per month
• Overnite express
• DHL
• Pashva Engineers
• RMS
LEGAL
RIL VMD also has a legal department as other industry have the
major activities consist.
- Co ordination with advocates for litigation in various
courts. Legal section provides co – ordination between
HOD & advocates.
- Internal consultancy is also handled by legal section and
gives advice to internal departments in legal matters.
2. Conveyance advances
WORKING CAPITAL
CONCEPT OF WORKING CAPITAL
WORKING CAPITAL MANAGEMENT
TYPES OF WORKING CAPITAL
FACORS DETERMINING OF WORKING CAPITAL
Gross working capital is the total of all current assets. Net working
capital is the difference between current assets and current liabilities.
Though the later concept of working capital is commonly used it is an
accounting concept with little sense to say that a firm manages its net
working capital. What a firm really does is to take decisions with
respect to various current assets and current liabilities. The
constituents of current assets and current liabilities are shown in table
A.
TABLE A:
Constituents of Current Assets and Current Liabilities
PART –A: CURRENT ASSETS
Trade Debtors.
Loans and Advances.
Investments.
Cash and Bank balance.
PART –B: CURRENT LIABILITIES
Sundry Creditors.
Trade Advances.
Borrowings.
Provisions.
1) Size of Business :
The working capital requirements of a concern are directly influenced
by the size of the business which may be measured in terms of scale of
operations. Greater the size of a business unit generally larger will be
the requirement of working capital. However, in some cases even a
smaller concern may need more working capital due to high overhead
charges
Insufficient use of available resources and other economic
disadvantages of small size.
Production Policy:-
In certain industries the demand is subject to wide fluctuation due to
seasonal variation. The requirement of working capital, in such cases
depends upon the production policy. The production could be kept
either steady by accumulating inventories during slack period with a
view to meet high demand during the peak season or the production
could be curtailed during the slack season and increased during peak
season. If the policy is to keep production steady by accumulation
inventories it will require higher working capital. A company should
have some production policy i.e. to maintain the production is a
considerable range in order to meet the changing demand. A company
like RIL whose productive capacities can be utilized for
manufacturing varied products can have the advantages of diversified
activities and solve their working capital problem.
2)Manufacturing Process/ Length of the production cycle:-
In manufacturing business, the requirements of working capital
increase in direct proportion to length of manufacturing process,
longer the process period of manufacture, longer is the amount of
working capital required. The longer the manufacturing time, the raw
materials and other supplies have to be carried for a longer period in
the process with progressive increment of labor and service costs
before the finished product is finally obtained. Therefore, if there is
5)Credit Policy:-
The credit policy is concerned in its dealings with debtors and
creditors influence considerably the requirements of the working
capital. A concern that purchases its requirements on credit and sells
its products/services on cash requires lesser amount of working capital.
On the other hand a concern buying its requirements for cash and
allowing credit to its customers, shall need larger amount of funds are
bound to be tied up in debtors or bills receivables.
6)Business Cycle:-
Business Cycle refers to alternate expansion and contraction in general
business activities. In a period of born i.e. when the business is
prosperous there is a need for larger amount of working capital due to
increase in sales, rise in prices, optimistic expansion of business etc.
On the country at he time of depression i.e. when there is a down
swing of the cycle, business contracts, sales decline, difficulties are
faced in collections from debtors and firms may have a large amount
of working capital lying ideal
7)Rate of Growth Of business:-
The working capital requirements of a concern increase with the
growth and expansion of its business activities. Although it is difficult
to determine the relation between growth in the volume of the business
and in the growth of the working capital of the business, yet it may be
concluded that for normal rate of expansion in the volume of the
business, we may have retained profits to provide for more working
capital but in the first growing concerns, we shall require larger
amount of capital.
with high earning capacity may generate cash profits from operations
and contribute to their capital. The dividend policy of a concern also
influences the requirements of the working capital. A firm that
maintains steady high rate of cash dividend irrespective of its
generation of profits needs more capital than the firm retains larger
part of its profits and does not pay high rate of cash dividend.
9)Price Level Changes:-
Changes in the prices level also effects the working capital
requirements. Generally the rising prices will require the firm to
maintain larger amount of working capital as more funds will require
maintaining the same current assets. The effect of rising prices may be
different for different firms. Some firms may be affected much while
some other may not be affected at all by the rise in prices.
10) Other Factors:-
Certain other factors such as operating efficiency, management ability,
irregularities a supply, import policy, asset structure, importance of
labor, banking facilities etc. also influences the requirement of
working capital.
12)Other Factors:-
Certain other factors such as operating efficiency, management ability,
irregularities a supply, import policy, asset structure, importance of
labor, banking facilities etc. also influences the requirement of
working capital.
3) The length of sales cycle during which finished goods are kept
waiting for sales.
3) Trade creditors
4) Installment credit
5) Advances
6) Accounts receivable- credit/factoring
7) Accrued expenses
8) Commercial paper
Commercial banks are the most important sources of short term
capital. The major portions of working capital loans are provided by
commercial banks. They provide of wide variety of loans tailored to
meet the specific
requirements of a concern. The different forms in which the banks
normally provide loans and advances are as follows:-
A) Loans
b) Cash credits
c) Overdrafts
D) Purchasing and discounting of bills
• MANAGEMENT OF INVENTORY
• MANAGEMENT OF CASH
• MANAGEMENT OF RECEIVABLES
MANAGEMENT OF INVENTORY:-
MANAGEMENT OF CASH:-
Cash is the important current asset for the operation of the business.
Cash is the basic input needed to keep the business running in the
continuous basis, it is also the ultimate output expected to be realized
by selling or product manufactured by the firm.
The firm should keep sufficient cash neither more nor less. Cash
shortage will disrupt the firm’s manufacturing operations while
excessive cash will simply remain ideal without contributing anything
towards the firm’s profitability. Thus a major function of the financial
manager is to maintain a sound cash position.
Cash is the money, which a firm can disburse immediately without
any restriction. The term cash includes coins, currency and cheques
held by the firm and balances in its bank account. Sometimes near
cash items such as marketing securities or bank term deposits are also
included in cash. Generally when a firm has excess cash, it invests it
is marketable securities. This kind of investment contributes some
profit to the firm.
the other hand a supplier who used to give credit for 15 days may not
have the stock to supply or he may not be in opposition to give credit
at present.
Speculative Motive: - The speculative motive relates to the holding of
cash for investing in profit making opportunities as and when they
arise.
The opportunities to make profit changes. The firm will hold cash,
when it is expected that interest rates will rise and security price will
fall.
MANAGEMENT OF RECEIVABLE:-
A sound managerial control requires proper management of liquid
assets and inventory. These assets are a part of working capital of the
business. An efficient use of financial resources is necessary to avoid
financial distress. Receivables result from credit sales. A concern is
required to allow credit sales in order to expand its sales volume. It is
not always possible to sell goods on cash basis only. Sometimes other
concern in that line might have established a practice of selling goods
on credit basis. Under these circumstances, it is not possible to avoid
credit sales without adversely affecting sales. The increase in sales is
also essential to increases profitability. After a certain level of sales
the
Operating cycle:
Operating cycle refers to the time duration required to convert sales
,after the conversion of recourses into inventories, into cash .the
operating cycle of a manufacturing company like RIL includes:
1.)Accusation of resources such as raw materials, labor, power and
fuel etc.
2.)Manufacture of the product which includes conversion of materials
into work-in-progress into finished goods.
3.)Sale of the product either for cash or on credit. Credit sales create
account receivables for collection.
OPERATING CYCLE:
Research Methodology
Research Design
Problem Identification
@ Find out Ratios related to working capital management of RIL and
compare with last 5 years.
@ Find deviation of calculated from standard or Norms
CURRENT RAIO
ACID-TEST RATIO
CURRENT RATIO
It is also known as “working capital ratio” .It is a measures of short-
term financial strength of the business and shows whether the
business will be able to meet it’ s current liabilities as when they
mature.
= 2.19
= 1.77
= 1.96
= 2.14
Interpretation:
ACID-TEST RETIO
= 1.38
= 1.05
= 1.15
= 1.58
Interpretation :
= 31.21 days
= 22.60 days
= 29.92 days
= 19.50 days
= 16.82 days
Interpretation :
We know that the higher Debtor’s turnover ratio is not good for the
firm. The lesser the period of the collection the better policy of
collection of the company. In the year 2008-09 it is 31.21 days to
collect the debts. So we can say that the collection policy of the
company is very good that they recover their debts near to 31 days
that is 1 month. But we also consider that in previous year this period
is less than 1 month so some improvement is needed.
= 3.33 days
= 4.62 days
= 5.47 days
= 5.49 days
= 3.96 days
YEARS CREDITOR’S
TURNOVER RATIO
2008-09 3.33 days
2007-08 4.62 days
2006-07 5.47 days
2005-06 5.49 days
2004-05 3.96 days
Interpretation :
This ratio is also known as” stock turnover ratio”. The number of
times the average stock is turnover during the year is known as stock
turnover. It is computed by deciding the sales by the inventory. The
ratio is important in joining the ability of management which it can
move the stock.
= 7.51 times
= 7.17 times
= 9.20 times
= 8.00 times
= 8.91 times
YEARS INVENTORY
TURNOVER RATIO
2008-09 7.51 times
2007-08 7.17 times
2006-07 9.20 times
2005-06 8.00 times
2004-05 8.91 times
Interpretation:
Higher the ratio more profitability the business would be. The ratio is
joining the ability of management with which it can move the stock.
Inventory turnover ratio is highest in the year 2006-07 is 9.20 as
compare to the other year but in current year it is 7.51 which is little
bit lower than previous year but it is obvious that in heavy industries
like Reliance Industries Limited have lower ration as compare to
FMCG.
= 7.60 times
= 5.57 times
= 9.85 times
= 10.00 times
= 5.83 times
YEARS INVENTORY
TURNOVER RATIO
2008-09 7.60 times
2007-08 5.57 times
2006-07 9.85 times
2005-06 10.00 times
2004-05 5.83 times
INTERPRITATION:
As per the balance sheet data of the creditor the working capital
turnover ratio is different for the different years. The ratio is 7.60 in
2008-09 and 5.57 in 2007-08 but the best favorable ratio is in 2005-06
which is 10 times. So it means that higher the ratio better the working
capital condition of the company.
The Debt Collection shows the number of days taken to collect the
debts of credit sales. It shows the efficiency and collection policy of
the company. The ratio is computed by dividing the Debtor’s turnover
ratio in to 365 days.
= 11.00 days
= 16.15 days
= 12.20 days
= 18.71 days
= 21.70 days
YEARS INVENTORY
TURNOVER RATIO
2008-09 11.00 days
2007-08 16.15 days
2006-07 12.20 days
2005-06 18.71 days
2004-05 20.71 days
20
15
0
2008-09 2007-08 2006-07 2005-06 2004-05
INTERPRETATION:
CONCLUSION
1) For inventory, in order to improve the position, RIL can reduce the
level of stocks by resorting to phased production i.e. producing
according to requirement and disposing off or recycling the
unserviceable inventories.
However, the low turnover of stock may also be due to
problems with generation of sales
Inventory management is a great concern for RIL especially
stores and spares. The purchase manager should take proper steps for
procurement of inventories.
2.) The plant must take certain steps to decrease the working capital
cycle. One way can be better management of inventories.
4.) Short term credit period availed must be reduced and sundry
creditors should be paid faster.
7.) Plant should given freedom in deciding the credit policies, cash
discount or credit ratings.
8). RIL can also consider negotiating its creditors for relaxing the
debt repayment period and repaying only on or just before the expire
of the credit period.
Bibliography
Websites:-
www.ril.com
www.stockindia.com
www.scribd.com
www.nse.com
www.bse.com
www.investopedia.com
www.tutor24.net