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1 FINANCE FUNCTION 23/8/13 ROLE OF FINANCE IN THE ORGANIZATION APPLICATION OF UNIFORM FINANCIAL POLICIES - WORKS / PURCHASE PROCEDURES/DOA.

DURES/DOA. MAINTAIN A SUITABLE SYSTEM OF FINANCIAL SCRUTINY. MAINTAIN FINANCIAL ACCOUNTS AS PER STATUTORY REQUIREMENTS. TO INCULCATE PRACTICE OF COST CONSCIOUSNESS - COST BENEFIT ANALYSIS. DEVELOPMENT OF STD . REFINING COST AT EACH UNIT. TO KEEP THE INVENTORIES , LOANS AND ADVANCES AT MINIMUM . ENSURE TIMELY PAYMENTS TO VENDORS AND EMPLOYEES. MONITOR CAPITAL & REVENUE EXPENDITURE W.R.T APPROVED BUDGET. OPTIMUM UTILIZATION OF WORKING CAPITAL . FUND FLOW MANAGEMENT CASH FLOW, PROJECT/WORKING CAPITAL , SURPLUS FUND INVESTMENT, FOREIGN LOAN.

FINANCE FUNCTIONS PREPARATION OF ACCOUNTS BUDGET PREPARATION FUND MANAGEMENT PREPARATION OF ANNUAL PLAN AND FIVE YEAR PLANS REPORTING/MIS CO-ORDINATION WITH AUDIT PRODUCT PRICING TAXATION COST CONTROL PAYMENT CONCURRENCE

CORPORATE FINANCE FUNCTIONS Implementation of Accounting Standards & Review of Accounting Policies Industry Consensus on common accounting issues Accounting guidelines to Divisions/ Subsidiaries/ JV Companies Consolidation and finalisation of Corporate Accounts for the presentation and approval from the Board Coordination with Internal Audit, Statutory Auditors and Government Audit (CAG) Finalisation of Revenue and Capital Budget on Corporate Basis for approval of the Board Finalisation of Financial Parameters for inclusion in the MOU with GOI.

2 REFINERY ECONOMICS 24/8/13 Sources of Funds


As on 31.03.2011 Share Capital Reserves Net Worth Loans Deferred Tax Liability Total Sources As on 31.03.2012

2428 52904 55332 52734 6337 114403

2428 55449 57877 75447 5242 138566

Application of Funds

As on 31.03.2011 Gross Fixed Assets Less: Depreciation Net Fixed Assets Construction W.I.P. Investments Working Capital Misc. Expenditure Total Application 93138 34950 58188 12647 19545 24008 15 114403

As on 31.03.2012 99183 39336 59847 21789 18678 38232 20 138566

IMPROVEMENT OF GRM Optimizing input cost by maximizing HS crude processing Reduction in fuel and loss Optimization of product mix to have better yield Optimisation of refinery operation by production of value added products viz benzene, toluene, lobs, phenol GRM for the year 2011-12 & 2012-13 of IOCL refineries were $ 3.63/bbl & $2.26/bbl respectively.

3 REFINING COST Refining Cost Varies from refinery to refinery depending upon: Capacity,Technology,Configuration,Age,Location.

INPUT COST CRUDE COST ELEMENTS FOB Crude Cost ( Approx 95% of total cost) Crude Freight Cost Tanker demurrage Ocean loss Insurance Port Charges Custom duties Crude Oil Pipeline Costs for land locked Refineries Optimization of input cost is very vital for a refinery to improve its profitability

GRM= VALUE OF THE PRODUCT COST OF CRUDE


NET MARGIN = GROSS MARGIN

VARIABLE COST

OPERATIONAL RESULT = NET MARGIN REFINERY FIXED COST

Under recovery sharing mechanism 1/3rd of the under recoveries are absorbed by the upstream oil companies, i.e ONGC, OIL and GAIL broadly in the ratio of their profit after tax. The Govt. bears on 1/3rd under recovery to OMCs. (However, % contribution varies year to year). The balance under recovery is to be absorbed by the OMCs.

4 HR FUNTIONS ,POLICY & Performance Appraisal 26/8/13 CARRER PROGRESSION OF EMPLOYEES If you're walking down the right path and you're willing to keep walking, eventually you'll make progress -Barack Obama

CAREER PLANNING OBJECTIVES Career planning is a systematic identification of suitable roles to support career progression of employees by providing them

Higher responsibility Accountability Based on capability and performance This includes defining systems committed to managing career movements of individuals within the organization based on Requirement Performance and Potential of the individual BASIC ELEMENTS Performance Potential Qualification Seniority

FEATURES OF CAREER PROGRESSION POLICY Entry level for Officers - Grade A. Growth ladder up to Board level Merit based promotions Expanding business offers higher growth prospects. Opportunities to work in diversified areas

5 Experience is cummulative rather than repetitive. Overview of Promotion Policy Promotion involves a movement from the post in the lower grade to a post in higher grade. Employees are eligible for promotion with in the same cadre/discipline on completion of the prescribed period and attainment of satisfactory standards in conduct and performance. Promotions are Based on following criteria: Performance as reflected in Performance Appraisal/Confidential Reports Qualification Seniority Discipline e.g. Vigilance, disciplinary action. Must have minimum 6 months of service left from the date of issue of orders Marking System :The Marking System will be as follows : Annual Performance Appraisal Report (APAR) - 40 Qualification- 30 Seniority- 30 e-PMS Indian Oil implemented e-PMS for officers in 2005-06 Departmental promotion, individual based incentive and PRP disbursed based on e-PMS rating and scores To make the system transparent, from 2010 summary appraisal report is available to all officers through e-PMS on a pre-notified date. Appraise has opportunity to make representation against the final rating. Selection of KRAs :- Maximum 12 no's of KRAs including role, special and additional. Role Based KRAs :- They are Mandatory KRAs Applicable to an incumbent by the virtue of roleMinimum 60% weightage Special KRAs :- Define by role holder in the particular year, if required Additional KRAs :- Defined in the system & the user would be able to choose from them Defining KPI for KRAs:- The appraise should select at least one KPI for each KRAs

360 Feedback Mechanism for Officers 360 0 Feedback Mechanism was approved EC on 25th October, 2012 The feedback mechanism is being implemented for Grades D to H The feedback will be used for promotion related decisions in DPC-2013. The questionnaire has been developed keeping in view the 'Leadership Competency Framework' developed for the IOCL by M/s KPMG as a part of Succession Management Engagement initiative.

6 CAREER DEVELOPMENT SCHEMES Sponsoring officers for part time MBA programs:Management Education programmes at prominent institutes like IIMs, FMS,NMIMS, MDI, IMT, SIBM,IMI,IIFT Cost Incurred by IOCL RS. 3 Lakh or Course fee which ever is less. Sponsorship to various educational courses /programmes