hpcl1

Sales v/s Collection Reconciliation

CHAPTER 1

1


INTRODUCTION

Indian Petroleum Industry started its journey during the fiscal year 1890 in the north-

eastern provinces of India especially in the place called Digboi.

The production of petroleum along with the exploration of new sites was primarily

restricted to north-eastern India up to the 1970s. But the scenario changed drastically

with the discovery of Bombay High. Indian Petroleum Industry was entirely state

sponsored and was under the management control of all the industries involved in it

were entirely with the government

At the time of Independence in 1947, the Oil & Gas industry was controlled by

international companies. India's domestic oil production was just 250,000 tonnes per

annum and the entire production was from one state - Assam.

The foundation of the Oil & Gas Industry in India was laid by the Industrial Policy

Resolution, 1954, when the government announced that petroleum would be the core

sector industry. In pursuance of the Industrial Policy Resolution, 1954, Government-

owned National Oil Companies ONGC (Oil & Natural Gas Commission), IOC (Indian Oil

Corporation), and OIL (Oil India Ltd.) were formed.

ONGC was formed as a Directorate in 1955, and became a Commission in 1956. In

1958, Indian Refineries Ltd, a government company was set up. In 1959, for marketing

of petroleum products, the government set up another company called Indian Refineries

Ltd. In 1964, Indian Refineries Ltd was merged with Indian Oil Company Ltd. to form

Indian Oil Corporation Ltd.

During 1960s, a number of oil and gas-bearing structures were discovered by ONGC in

Gujarat and Assam. Discovery of oil in significant quantities in Bombay High in

February, 1974 opened up new avenues of oil exploration in offshore areas.

2


During 1970s and till mid 1980s exploratory efforts by ONGC and OIL India yielded

discoveries of oil and gas in a number of structures in Bassein, Tapti, Krishna-Godavari-

Cauvery basins, Cachar (Assam), Nagaland, and Tripura. In 1984-85, India achieved a

self-sufficiency level of 70% in petroleum products.

In 1984, Gas Authority of India Ltd. (GAIL) was set up to look after transportation,

processing and marketing of natural gas and natural gas liquids. GAIL has been

instrumental in the laying of a 1700 km-long gas pipeline (HBJ pipeline) from Hazira in

Gujarat to Jagdishpur in Uttar Pradesh, passing through Rajasthan and Madhya

Pradesh.

After Independence, India also made significant additions to its refining capacity. In the

first decade after independence, three coastal refineries were established by

multinational oil companies operating in India at that time. These included refineries by

Burma Shell, and Esso Stanvac at Mumbai, and by Caltex at Visakhapatnam. Today,

there are a total of 18 refineries in the country comprising 17 in the Public Sector, one in

the private sector.

The 17 Public sector refineries are located at Guwahati, Barauni, Koyali, Haldia,

Mathura, Digboi, Panipat, Vishakapatnam, Chennai, Nagapatinam, Kochi, Bongaigaon,

Numaligarh, Mangalore, Tatipaka, and two refineries in Mumbai. The private sector

refinery built by Reliance Petroleum Ltd is in Jamnagar. It is the biggest oil refinery in

Asia.

By the end of 1980s, the petroleum sector was in the doldrums. Oil production had

begun to decline whereas there was a steady increase in consumption and domestic oil

production was able to meet only about 35% of the domestic requirement. The situation

was further compounded by the resource crunch in early 1990s.

3


The Government had no money for the development of some of the then newly

discovered fields (Gandhar, Heera Phase-II and III, Neelam, Ravva, Panna, Mukta,

Tapti, Lakwa Phase-II, Geleki, Bombay High Final Development schemes etc.

This forced the Government to go for the petroleum sector reforms which had become

inevitable if India had to attract funds and technology from abroad into the petroleum

sector. The government in order to increase exploration activity, approved the New

Exploration Licensing Policy (NELP) in March 1997 to ensure level playing field in the

upstream sector between private and public sector companies in all fiscal, financial and

contractual matters. This ensured there was no mandatory state participation through

ONGC/OIL nor there was any carried interest of the government.

To meet its growing petroleum demand, India is investing heavily in oil fields abroad.

India's state-owned oil firms already have stakes in oil and gas fields in Russia, Sudan,

Iraq, Libya, Egypt, Qatar, Ivory Coast, Australia, Vietnam and Myanmar. Oil and Gas

Industry has a vital role to play in India's energy security and if India has to sustain its

high economic growth rate.

4


HIGHLIGHTS IN THE PETROLEUM & NATURAL GAS SECTOR DURING

2008-09

India has total reserves of 775 million metric tonnes of crude oil and 1074

billion cubic metres of natural gas as on 1.4.2009.

The total number of exploratory and development wells and metreage drilled in

onshore and offshore areas during 2008-09 was 381 and 888 thousand metres

respectively.

Crude oil production during 2008-09 at 33.51 million metric tonnes is 1.79%

lower than 34.12 million metric tonnes produced during 2007-08.

Gross Production of Natural Gas in the country at 32.85 billion cubic metres

during 2008-09 is 1.33% higher than the production of 32.42 billion cubic

metres during 2007-08.

The production of Natural Gas at 50.95% and 0.06% of the total were highest

and lowest in Mumbai High and West Bengal respectively during 2008-09.

The flaring of Natural Gas in 2008-09 at 3.29% of gross production is higher

than at 2.89% in 2007-08.

The refining capacity in the country increased to 177.97 million tonnes per

annum (MTPA) as on 1.4.2009 from 148.968 MTPA as on 1.4.2008. (Table-

14)

5


The total refinery crude throughput during 2008-09 at 160.77 million metric

tonnes is 2.99% higher than 156.10 million metric tonnes crude processed in

2007-08 and the prorate capacity utilisation in 2008-09 was 107.9% as

compared to 104.8% in 2007-08.

The production of petroleum products during 2008-09 was 152.678 million

metric tonnes (including 2.162 million metric tonnes of LPG production from

natural gas) registering an increase of 3.87% over last year’s production at

146.990 million metric tonnes (including) 2.060 million metric tonnes of LPG

production from natural gas).

The country exported 36.932 million metric tonnes of petroleum products

against the imports of 18.285 million metric tonnes during 2008-09.

The sales/consumption of petroleum products during 2008-09 were 133.400

million metric tonnes (including sales through private imports) which is 3.45%

higher than the sales of 128.946 million metric tonnes during 2007-08.

The total number of retail outlets of Public Sector Oil Marketing Companies as

on 1.4.2009 has gone up to 35066 from 34101 on 1.4.2008.

The total numbers of LPG consumers of Public Sector Oil Marketing

Companies as on 1.4.2009 were 105.632 million against 100.915 million as on

1.4.2008. (Table-23)

The number of persons employed (including contract employees) in petroleum

industry reached 139823 in 2008 and is 138973 in 2009

6


OBJECTIVE OF THE STUDY

Based on the kind of study, and its ramifications, the following objectives were

created. It is hoped that the study would help achieve these objectives.

To understand the following aspects

The performance of the Dronagiri outlet since its inception

The profitability of the outlet

Purchases and Sales are going in order

Sales v/s Collections

Analysis of sales (Product wise)

Overview of different payments instruments like Cheque, DD, Cash,

RTGS etc

7


NEED OF THE PROJECT

The study was carried out in order to check the performance of the Dronagiri

outlet since its inception and to check whether the Sales and Collection are going

in order. Following needs have been identified.

To study and analyze the RECO of every month since its inception, and to

make a summary

To carry out the feasibility study on Sales and Collection of the Dronagiri

Outlet

To come out with the overall performance of the Outlet, with respect to

Overall product wise sales

To identify the fluctuations in sales

To identify the Collections through different payment instruments

To make a report of overall Analysis of the outlet by finance department

8


RESEARCH METHODOLOGY

Research is an important aspect of any project. It is a systematic collection,

recording and analysis of data concerning the related issues. The principle objective

of this task is to unfold certain facts regarding a predicted area of inquiry.

The Research is carried out in the following given format:

Data Collection

Data Analysis & Findings

Recommendations

While doing this Project both the data for Research have been used; i.e. primary and

Secondary Data.

1. Primary Data:

This data is collected first time through the observation and interaction with

Employees of HPCL. It has been observed that on how different accounts are

maintain how sales v/s collections reconciliation is done in the company.

2. Secondary Data:

This data is collected from the information from various websites through

Internet. Some data is extracted from the current proposal of Employees of

HPCL.

9


CHAPTER 2

10


COMPANY PROFILE: HPCL

Name : Hindustan Petroleum Corporation Limited (HPCL)

Incorporation : 1974

Constitution : Public Limited Company

Sector : Petroleum Refinery

Industry : Petroleum

Activities : Bitumen, LPG, CNG, and downstream petroleum products.

Standard Vacuum Refining Company of India Limited on July 5, 1952

ESSO Standard Refining Company of India Limited on 31st March 1962

Hindustan Petroleum Corporation Limited comes into being after the takeover

and merger of erstwhile Esso and Lube India Undertaking

Caltex Oil Refining Ltd. is taken over by the Government of India and

subsequently merged with HPCL in 1978.

11


Kosan Gas Company, the concessionaries of HPCL in the domestic LPG market,

are taken over and merged with HPCL.

HPCL thus comes into being after merging four different organisations at different

points of time.

VISION

To be a World Class Energy Company known for caring and delighting the customers

with high quality products and innovative services across domestic and international

markets with aggressive growth and delivering superior financial performance. The

Company will be a model of excellence in meeting social commitment, environment,

health and safety norms and in employee welfare and relation.

MISSION

HPCL, along with its joint ventures, will be a fully integrated company in the

hydrocarbons sector of exploration and production, refining and marketing; focusing on

enhancement of productivity, quality and profitability; caring for customers and

employees; caring for environment protection and cultural heritage.

It will also attain scale dimensions by diversifying into other energy related fields and by

taking up transnational operations."

12


BOARD OF DIRECTORS

Mr.Arun Balakrishnan Chairman & Managing Director

Mr.S.Roy Choudhury Director- Marketing

Mr.V. Vizia Saradhi Director- HumanResources

Mr.B.Mukherjee Director- Finance

Mr.K. Murali Director- Refineries

Mr.P.K.Sinha Director

Mr.L.N.Gupta Director

Prof. Prakash G Apte Director

Mr.P.V.Rajaraman Director

Dr. Gitesh K Shah Director

13


Background of Company and Operations

HPCL is the second largest player in Indian Oil sector and in highly competitive

lubricants market. It was formed in 1974 on nationalization of ESSO India operations.

HPCL has two refineries producing a wide variety of petroleum products-one in Mumbai

(West Coast) and the other in Visakhapatnam (East Coast). The HPCL refinery in

Mumbai is situated in Mahul, west coast. It is in an M.I.D.C. area, which also has other

big industries like Indian Oil Corporation limited (IOCL), Bharat Petroleum Corporation

limited (BPCL), Tata power plant etc.

The Corporation also holds major equity in Mangalore Refinery and Petrochemicals

Limited, and is proposing to set up a refinery in the state of Punjab.

Type of Industry

HPCL refinery can be classified as an analytical type of industry. It is petrochemical

industry i.e. broadly speaking chemical engineering industry.

Petroleum refinery is a production industry where raw material crude petroleum is

transformed into various useful products using some chemical processes.

Capacity

HPCL Mumbai refinery has a capacity 5.5MMPTA. HPCL Mumbai is operating one of

the largest lube oil refinery in the country which has a capacity of 335TMT. This Lube

Refinery accounts for over 40% of the India's total Lube Base Oil production. The

refining capacity steadily increased from 5.5 million tonnes in 1984/85 to 13.70 million

metric tonnes (MMT) presently.

According to Auto Fuel Policy, EURO-IV norms are to be followed in metro cities by

2010.To supply it in future additional capacity planning is being done. Diesel hydro

treating (DHT) of about 2.2MMTPA will be introduced in HPCL. Majority of EURO-IV

HSD will be produced in HPCL, Mumbai.

14


Location selection criteria

Oil Refineries process millions of gallons of oil that have been drilled from the Earth’s

crust. Choosing the location of an oil refinery is not an easy task because a number of

environmental and safety concerns need to be taken into account.

India does not have high crude oil reserves, and hence it depends totally on import of

petroleum crude oil. Gulf countries are the main suppliers to India.

Transportations and refining costs are very high for any refinery and hence these

factors take priority in considering plant location.Oil Refineries are often located on the

coast and away from busy cities. When choosing the location for an oil refinery, the

following factors need to be taken into consideration:

Coast:

HPCL is located at its Chembur in Mumbai and Vizag in Andhra Pradesh because of

the proximity of sea routes from the plant location. As for transportation purpose, the

raw material used in the production in HPCL i.e. crude oil can be easily transported via

the sea routes.

There is a rail route specially built for transportation of coal, from vadala to refinery

area. Almost all oil refineries like BPCL, IOCL are situated at the Mahul gaon location

at Chembur in Mumbai. HPCL petroleum refinery is on Mumbai west coast because

generally refining is carried on along the coast, where low cost water transportation

can be used.

Transportation:

The oil refinery must be near to rail, road or sea links and close to the site the oil has

been drilled. HPCL has port near to it.

15


Available workforce:

It may be tempting to build an oil refinery in a remote location where no people or

animals can be affected. However, a refinery needs workers living relatively nearby.

Even though HPCL refinery is far from residential area transport facilities from workers

quarters is available.

Available customers:

Oil refineries need to be within easy reach of customers. It is essential to have good

transport links. Some refineries are pipelines as a method of transportation.

Air pollution

Although industries are regulated by strict controls regarding the amount of pollution

they release into the atmosphere, oil refineries emit number of polluting gases. To

reduce the effects of air pollution on people, refineries should be built away from the

built-up areas. Care should be also taken to position the refinery so that prevailing

winds do not carry pollution in the direction of towns and cities. One can see boards

specifying height from sea level in entire HPCL refinery area.

Water pollution

Some refineries use water from local rivers and streams for cooling purposes. This

means that the water is pumped out of the river or stream, circulated around a cooling

tower and returned to the river at a higher temperature. This increase in water

temperature is called thermal pollution. Some species of fish are unable to survive in

these conditions. Waste products from refinery may also be washed into local rivers and

streams.

16


Noise Pollution

Machinery that operates 24 hours a day can make a lot of noise for people living

nearby. Lorries and trains that come to pick up refined products also contribute to the

noise.

Special sites of interest

Like other buildings, oil refineries must avoid areas of special scientific interests. These

can include regions where rare animals are being protected.

17


Products & Services

Refineries

Without refining, the rich resources of crude petroleum of nature would remain latent.

Value-added products from crude petroleum like petrol, diesel, kerosene, liquefied

petroleum gas, naphtha and many more products would not be available for growth

and development of a nation.

HPCL refineries upgrade the crude petroleum into many value-added products and

over 300 grades of lubricants, specialties and greases. The Lubricating Oils Refinery

set up at Mumbai is largest lube refinery in India. It produces superior quality lube

base oils.

Aviation

Hindustan Petroleum (as Esso and Caltex prior to 1974) has been providing aviation

refueling (Aviation Turbine Fuel - ATF) services at various airports in India for more

than half a century

Bulk Fuels & Specialties

The Bulk Fuel & Specialities Business unit caters to marketing of Bulk fuels &

Petroleum products directly to Industrial consumers like power plants, chemicals,

fertilisers, shipping companies and airlines. This unit is also involved in exports of Bulk

fuels and finished Petroleum Products.

18


International trade

The activities related to International trade are;

o Crude oil imports,

o Petroleum Product Imports / Exports,

o Shipping,

o Production planning for Refineries,

LPG - HP GAS

HP Gas, the HPCL brand of LPG, is what keeps the fire burning in millions of Indian

homes. Bottled at 43 LPG Bottling Plants throughout the country with a total capacity

of over 2500 thousand metric tonnes per annum (TMTPA).

Lubes - HP LUBES

HP Lubes is an integral part of Hindustan Petroleum Corporation Limited, one of

India's frontline oil majors, committed to providing energy and fueling growth in every

significant area of development.

Retail

At HPCL retail outlets, we believe in maintenance. Maintaining not just the vehicle,

but a steady relationship with our consumer. And to do so, provide better and

efficient services. We take care of not only your fuelling needs, but also complete

vehicle care. We stock related products like tyres, batteries and accessories, so you

don't have to go shop-hopping. All our other value-added services ensure that your

vehicle is well looked after.

19


Exploration & Production

"HP-E&P is world class and technically proficient, with global presence delivering

superior returns from a sustainable balanced portfolio with highest commitment to

HSSE* and Society" Oman, Egypt, India, Australia

Joint Ventures

Crude Refining and Marketing of finished Petroleum products is the core area of the

Corporation. Opportunities are also being explored to access new revenue streams,

and augment downstream businesses. Accordingly, HPCL has ventured in

Upstream activities (Exploration and Production) and piped gas distribution in major

cities

Major Joint Ventures

• HPCL-Mittal Energy Ltd. (HMEL)

• Hindustan Colas (HINCOL)

• Prize Petroleum Company Limited

• South Asia LPG Co Pvt. Ltd. ( SALPG)

• Bhagyanagar Gas Limited (BGL)

• Aavantika Gas Limited

• Petronet India Limited (PIL)

• Petronet MHB Limited (PMHBL)

• Mangalore Refineries and Petrochemicals Limited (MRPL)

• CREDA-HPCL Biofuel Limited (CHBL)

20


Functional Groups

HPCL refinery is spread over a very large area. It has many plants within its campus

area. So management of such a big organization becomes very challenging. HPCL has

managed it very well till now by organizing itself into appropriate functional departments.

The various departments are as under:

Human resource:

HPCL HR department has taken number of HR initiatives to make the Corporation a

great place to work. The ‘Balanced Scorecard’ tool to set up performance targets and

evaluation, Competency Mapping and Development Centers to enhance employee

capabilities. Six Sigma for quality improvement have yielded rich dividends and are

being constantly upgraded to higher levels of sophistication.

A significant HR event of the period was the conduct of an International Program on

‘Emotional Intelligence’ in association with TISS wherein a large number of

professionals and students participated and appreciated the program. The Corporation

continues to give utmost importance to training by nominating employees both for in-

house and external programs.

HPCL has bagged DMA Erehwon Innovative HR Award because it has successfully

taken an HR idea from concept to reality and has sustained results.

They also got Amity HR Excellence Award for achieving enviable position of one of the

best and most admired companies due to innovative strategies for Human Resource

Management and Development

21


Finance:

The finance function involves keeping record of financial data related to fixed assets,

intangible assets, which forms most important part of a refinery operation. Additionally it

also monitors the construction period expenses on projects occurring on monthly and

quarterly basis and keeps record of other important financial depreciation, impairment of

assets, foreign transactions, investments, inventories, duties on bonded stocks, Grants

provision, exploration and production expenses, employee benefit, sales of products,

research and development., Taxes on income, contingent liabilities and commitment

capitals, accounting, classification of expenditure and income.etc.

Marketing:

LPG Marketing in India has traditionally been confined to domestic & non-domestic

consumers in urban/semi urban markets and all efforts till date have been in meeting

the demands of these markets. With the saturation of urban and semi urban markets

and the adequate availability of LPG in India, there is a need to look for alternative

markets. Rural India presents a big opportunity for growth of LPG in India.

HPCL is a major bunker fuel supplier to the ships (vessels) at major Indian ports viz

Calcutta, Haldia, Visakhapatnam, Kakinada, Chennai, Cochin, Mangalore, Goa-Vasco,

Mumbai, Kandla.

HPCL also supplies other petrochemicals like hydrocarbons, lube base oils, tar, petrol,

and diesel, ATF etc. Hence it has very good chain of distributors.

22


SAFETY & HEALTH POLICY

The safety & health policy declared by IPCL reads as follows: -

Professionally manage and comply with the statutory provisions by giving high priority to

health, safety and environment control programs.

Ensure that technology absorbed, assimilated, upgraded and developed by the

company lays emphasis on safety in and around the workplace.

Ensure continuous improvement in safety and health aspects by carrying out safety

audit, risk analysis etc.

Constitute safety committees to promote safety awareness and ensure participation of

employees in safety and health related functions.

Organize structured training programs on continuous basis to educate employees and

neighboring society on safety, health and loss prevention and control aspects.

Ensure codification of safety standards and extend services to parties associated with

the company on safety aspects.

Recognize contributions made by an individual employee towards safety and health

aspects.

23


HPCL TODAY

A fortune 500 Navaratna Company with an annual turnover of about Rs 1,16,428

Crores during the financial year 2008-09. [Rs 1,31,802 crores from the sales and

operations income]

Ranked in the 311th position in the fortune 500 list.

Market share of about 20% with a strong infrastructure.

Last year’s figures were Rs 1,03,837 crores and Rs. 1,12,098 Crores

HPCL operates 2 major refineries producing a wide variety of petroleum fuels &

specialties, one in Mumbai (West Coast) of 5.5 Million Metric Tonnes Per Annum

(MMTPA) capacity and the other in Vishakhapatnam, (East Coast) with a

capacity of 7.5 MMTPA.

HPCL holds an equity stake of 16.95% in Mangalore Refinery & Petrochemicals

Limited with a capacity of 9 MMTPA.

Another Refinery of 9 MMTPA is under construction in Bathinda, Punjab by

HMEL, a Joint Venture with Mittal Energy Investments Pte.Ltd.

HPCL also owns and operates the largest Lube Refinery in India producing Lube

Base Oils of international standards. With a capacity of 335 TMT. This Lube

Refinery accounts for over 40% of the India's total Lube Base Oil production.

Presently HPCL produces over 300+ grades of Lubes, Specialities and Greases.

The marketing network of HPCL consists of 13 Zonal offices in major cities and

90 Regional offices facilitated by a Supply & Distribution infrastructure comprising

Terminals, Aviation Service Facilities, LPG Bottling Plants, Lube filling plants,

Inland Relay Depots, Retail Outlets (Petrol Pumps) and LPG & Lube

Distributorships.

24

http://www.hmel.in/

http://en.wikipedia.org/wiki/Bathinda


HPCL has, over the years, moved from strength to strength on all fronts. The

refining capacity steadily increased from 5.5 million metric tonnes in 1984/85 to

13.00 million metric tonnes (MMT) now. On the financial front, the turnover grew

from Rs. 2687 crores in 1984-85 to Rs 1,31,802 Crores in Financial year 2008-

09.

HPCL has, over the years, moved from strength to strength on all fronts. The

refining capacity steadily increased from 5.5 million metric tonnes in 1984/85 to

13.00 million metric tonnes (MMT) now. On the financial front, the turnover grew

from Rs. 2687 crores in 1984-85 to Rs 1,31,802 Crores in Financial year 2008-

09.

25


CHAPTER 3

26


DRONAGIRI T&E STATION

INTRODUCTION

Name: Dronagiri T&E station

Company: Hindustan Petroleum Corporation Ltd

Started: 4th Feb. 2006

Location: Dronagiri

Area: 2600 sq.mtrs

No. of Dispenser: 11

Products offered: MS, POWER, HSD, TURBOJET, LUBE OIL

Working time: 24 hrs

Work force: 1 – officer

5- supervisors

23-boys

3-watchmens

3-gunmen

Shifts: shift 1: 7am-3pm

Shift 2: 3pm- 11pm

Shift 3: 10pm-7am

COMPETITORS

INDIAN OIL CORPORATION

BHARAT PETROLEUM CORPORATION

RELIANCE

IBP

27


PRODUCTS & SERVICES OFFERED

MS

POWER

HSD

TURBOJET

LUBE OIL

LUBES

- LAL GHODA-20 - WH BEARING GR

- LAL GHODA-7.5 - AP GREASING-1KG

- LAL GHODA-5 - AP GREASING ½ KG

- L G 500 - AP GREASE-200 KG

- B R OIL- 500ML - AP GREASE 18KG

- B R OIL- 250 ML - G O -1 LTR

- 2T 250 - G O 1/2

- R4 1 - ENKLO 60-20 LT

- 2T 40ML - ENKLO 68-210

- 2T 60ML - A.T.F.-5

- CRUISE- 1LTR - A.T.F.-1

- CRUOSE OIL-1/2 - T.RAJA-1 LTR

- B-WATER-5 - A.T.F.210

- B-WATER-1 - CHAM-210 LTR

- B.ACID-1 - GEAR DRIVE 210

- CHAM-1LTR - M TURBO-20

- M TURBO-5 - ESMO- 1 LTR

- M TURBO-1 - K GUARD-1

28


KEY CUSTOMERS OF DRONAGIRI OUTLET

- CWC - CHAITANYA

- SKY - PORT MAERKS

- TRANSFARE - ULA

- VIRAJ - LCL

- SHRI KAILASH - HIND TERMINALS

- SAI CARGO - GDL

- N.G.B - CHAITANYA

- BALMAR LAWRIE - DIWANCHAND

- CONTINENTAL - SHREE.V.L

- BHAVINIDDC - GURPREET

- SHREE GANESH - NEETA

- HERITAGE - COSMOS

- AMEYA - INMARTECH

- TRANS INDIA - PEARL

- SEA BREEZE - MAERKS

29


What is Reconciliation?

Accounts Reconciliation is a process of comparing two sets of related records

(usually balances) from different sources (accounts, systems) identifying and

analyzing differences and making corrections (if need)

Basic Steps in the Process

Gather documentation and supplies i.e. DSR and Duty Sheet.

Verify that the prior month’s ending balance agrees with the current month’s

beginning balance on the Statement of Account.

Verify that prior month errors have been corrected.

Collections details i.e. total Cash Collections, Credit card Collections, Cheque

and DD collections etc

Show evidence of reconciliation.

Prepare Summary of Reconciliation.

Obtain approval from department head.

30


CHAPTER 4

31


DATA ANALYSIS AND INTERPRETATION

Following is the Sales v/s Collections Reconciliation (RECO) for the month of May-2010,

which the Station Manager has to submit to Finance department (regional office)

SALES :-

LTR RATE AMT.

MS 97256.00 50.7 4930879.2

POWER 18046.00 53.43 964197.78

HSD 648421.00 38.7 25093892.7

TURBOJET 17776.00 40.47 719394.72

TOTAL LTR. 781499.00

TOTAL METER SALES (A) 31708364.4

LUBE (B) 120169.00

D.T. PLUS RELOAD 350900.00

Total sale (A+B+C) 32179433.40

SALE AGAINST DEPOSITE

MAERKS. 866880.00

CWC. 123840.00

ULA. 1784073.97

PEARL 550939.20

LCL. 0.00

HIND T. 4910640.94

GDL. 42819.00

CHAITANYA. 328950.00

DIWANCHAND 841879.80

SHREE. V.L. 666.10

SEA BREEZE 141035.10

AMEYA 140127.41

INMARTECH 12356.83

DDC 49670.92

SALE AGAINST DEPOSITE 9793879.26

32


Credit Card sale 840863.00

D.T.PLUS Purchase Sale 418984.25

Total Card 1259847.25

BDS deposited (E) 20600040 31653766.51

D.G.Set 15982

MAY. 2010 Open. Bal. (F) 1654353.43

DD/ Chq. Recd. (G) 3241378.00

CASH ADV.(I) 0.00

RTGS (H) 7125000.00

SALE AGAINST DEPOSITE 9793879.26

OPENING BALANCE MONTH OF JUN. 2010

(F+G+H) - (I) = 2226852.17

Above table shows how the Sales and Collections are been recorded.

Total of product wise sales, i.e. how much quantity of sales of each product took

place for month of May-2010

Collections through different instruments like cash, Cheques, Demand draft,

RTGS, Credit Card etc is been recorded

Total deposits in Bank, which is known as BDS

Collection through Drive Track

Advance Cheques collected

Reload of Drive Track

Different Codes used in RECO:

33


PRODUCTS:

DT 1682 - Petrol

DT 1682P - Power

DT 1683 - High speed Diesel

DT 1683T - Turbojet diesel

WHS – lubes

COLLECTIONS

E - Electronic (RTGS)

M- Cheques

N - DD

S - Cash

SALES v/s COLLECTIONS

34


I IN VOICE MONTH QUANTITY AMOUNT COLLECTIONS

35


Feb-06 87,337 3705991.05 3,749,965

Mar-06 249245 9301752.1 8,506,666.00

Apr-06 261634 15178137.6 8,960,357.00

May-06 297981 11124820.4 11,920,881.00

Jun-06 368693 14780585.49 12,991,980

Jul-06 450630 17696312.93 17,058,767.50

Aug-06 583118 22794059.23 20,784,273

Sep-06 661602 25776536.89 23,917,572

Oct-06 635054 24884923.93 23,133,979.50

Nov-06 711345 27786439.4 27,111,646

Dec-06 813292 29026977.74 27,039,175.84

5119931 202056536.8 185,175,263

Jan-07 796593 28510412.42 26,756,663.74

Feb-07 774401 27152125.99 28,106,345.25

Mar-07 948672 32816123.11 31,061,707.80

Apr-07 916494 31882526.32 30,268,987.24

May-07 945311 32914255.22 29,322,284.84

Jun-07 903776 31302667.42 33,618,493.57

Jul-07 962022 33718046.95 33,706,366.47

Aug-07 954975 33163175.55 30,279,384

Sep-07 909209 31660900.72 27,917,851

Oct-07 1032297 35632554.05 32,470,583

Nov-07 936984 32624447.87 32,244,296.01

Dec-07 1063703 37014718.9 34,623,040.48

11144437 388391954.5 370,376,003.40

Jan-08 1060654 36879585.61 36,697,058

Feb-08 1003368 35743234.12 36,999,317

Mar-08 1095097 40875315.2 47,327,733

Apr-08 707315 25963120.47 34,937,537.09

36


May-08 1238508 45605534.04 48,834,017.33

Jun-08 956282 37309589.17 43,803,090.91

Jul-08 855506 34324236.05 29,205,614.32

Aug-08 725972 29077230.24 31,263,343

Sep-08 729349 28905195.77 30,695,839

Oct-08 612053 24459600.29 26,916,974

Nov-08 658629 26269959.96 26,431,855

Dec-08 618390 23501531.34 24,351,075

10261123 388914132.3 417,463,454

INVOICE MONTH QUANTITY AMOUNT COLLECTIONS

Jan-09 708635 26329755.29 25,333,233.00

Feb-09 580053 20415560.53 20,323,140.00

Mar-09 710356 24428198.13 25,804,024.00

Apr-09 761497 26277035.32 24,022,192.00

May-09 662388 23074808.78 21,445,343.65

Jun-09 656492 22947653.79 24,833,918.00

Jul-09 705603 25866535.61 24,561,686.00

Aug-09 665039 24685638.14 24,921,706.23

Sep-09 652178 24206866.44 23,481,222.59

Oct-09 595085 22293168.42 22,182,052.80

Nov-09 633193 23626184.11 22,151,799.90

Dec-09 700537 26102143.83 26,586,774.66

8031056 290253548.4 285,647,092.83

Jan-10 632838 23735743.29 23,029,145.73

Feb-10 819141 28914105.04 28,760,125.78

Mar-10 455148 18653169.36 31,194,335.28

37


Apr-10 539965 22227361.87 31,495,106.00

May-10 315000 13004898.08 16,088,435.00

2762092 106535277.6 130,567,147.79

The above statement shows the Sales v/s Collection of Dronagiri Outlet since its inception

from month of FEB -2006 to MAY -2010

The finance department has to maintain such reports for each and every month, has to

submit to the head office.

It helps to track the collections of the company on monthly basis, and to judge the

performance of the Outlet on the basis of sales.

DATA ANALYSIS AND INTERPRETATION

38


GRAPH NO- 2.1

Above Graph no 2.1 shows the sales figure for calendar year, and up to Month of

May for calendar year 2010. The overall trend of sales was god when Dronagiri

outlet was started

During the initial years there were less petrol pumps in the area, but due to rising

demand by the logistics company, Competitors started setting up petrol pumps in

different locations in year 2007, and which effected the sales of the HPCL ‘s

Dronagiri outlet.

Key customers started leaving Dronagiri outlet due to Credit Limit offered by other

Competitors outlet was more, which acts as a vital factor.

As Dronagiri Outlet is company owned outlet it was not allowed to give credit to

customers. Hence many HSD consuming customers left, which resulted in

drastically decline in sales in year 2009

PRODUCT WISE SALES (QUANTITY)

39


Graph no: 2.2

Graph no 2.2 gives information about the overall product wise sales for the calendar

year 2006.2007,2008,2009. Wherein we can see HSD holds the maximum sales

compare to other products. But overall trend of the sales is declining due to rising

competition in the area of operations.

SALES v/s COLLECTIONS

40


Graph no.2.3

The above graph no 2.3 shows the difference between sales and collections of the

Dronagiri outlet, in calendar year 2006, 2007. Collections were not proper due to some

reason which the company did not disclose. But in 2008 some pending collections of

year 2006 and 2007 were collected with immediate action, thus we can see a rise in

collections in 2008.

41


CHAPTER 5

RECOMMENDATIONS

42


As the study indicates the overall performance of the Dronagiri outlet is declining

due to rising competition in the area of operations

As per the study Credit to Customers act as the vital factor.

Other companies petrol pump are Dealer pumps, hence Credit facilities to

customers are given, if the Company what to regain their customers HPCL

should also allow credit facilities to their customers.

To retain their existing customers company should come with new marketing

strategies.

Also company should do competitors analysis, due to which company will come

to know what the competitors are offering.

More promotion should be done of Drive track.

CONCLUSION

43


After this project, I came to know how daily Sales is been recorded and

collections are handled on day to day basis.

How the Finance department makes the RECO.

Sales and Collections Reconciliation acts as very important work in the Finance

department of the company as it provides the overall information on the

performance of the outlet.

The station manager as to make Monthly report on the Sales and Collection

Reconciliation, which to be submitted to regional office

At Regional Office Finance Manager scrutinizes the report , puts the information

in his records and submits the report with his findings to the Senior regional

Manager and thereby to head office of the company.

BIBLIOGRAPHY

44


Mr. Mahendra Udhwani Station Manager of the Dronagiri outlet enabled me to

understand the overall Sales and collections of the outlet.

The data collected from Regional office and Dronagiri Outlet.

WEBSITES

http://www.hindustanpetroleum.com, HPCL official website

www.iloveindia.com/economy-of-india/oil-gas-industry.ht

45


46

hpcl1

Documents