sip presenttion

7/31/2019 SIP Presenttion

1/15

Prepared by : XYZ

Roll no. : 113

Enrolment no. : xxxxxxxxxxxx

Guided by : ABC


2/15

The Reliance group is founded by Dhirubhai H. Ambani in 1958 with

textile company at Naroda, near Ahmedabad.

Reliance started their petrochemical plant firstly at Hazira in 1991

and earn high profit.

Jamnagar petrochemicals complex and refinery complexcommissioned in 1999-2000.

Jamnagar is the worlds largest grass roots refinery project, with an

estimated crude capacity of approximately 27 million tons per year.

It is called a grass roots refinery because it was built at a new

location all at once, from the ground (grass roots) up, as opposedto additions to or refurbishment of an existing facility.


3/15

Situated on the northwest coast of India, the integrated refinery-

cum-petrochemicals complex is located at village Motikhavdi, Lalpur

Taluka, Jamnagar District, in the state of Gujarat.

The entire Jamnagar complex entailed a total investment of about

Rs. 25000 crores or about US$ 6 billion.


4/15

Budgeting

Budget means the quantitative expression of a proposed plan of

action by management for a specified period.

It is the process of planning all flows of financial resources during

some specified future time period.- National Association Accounts (USA)

Budgeting is the whole process of designing, implementing and

operating BUDGET.

There are many methods of Budgeting but Reliance Industries

Limited uses the zero based Budgeting method.


5/15

Purpose of Budgeting:a) To provide a forecast of revenue and expenditure.

b) To enable the actual financial operation of the business

to be measured against the forecast.

c) Compels strategic planning and implementation of

plans.

d) Provide a framework for judging performance.


6/15

Budgeting in RIL

-

CAPITAL

BUDGETING

REVENUE

BUDGETING

Capital

ExpenditureOperation

Expenditure


7/15

Types of Budgeting:

1) Capital Budgeting (CAPEX)

2) Revenue Budgeting (OPEX)

Capital Budgeting:

Capital budgeting is the process of planning and managing a

firms long-term investments. It is the decision process that

managers use to identify projects that add value to a firm. In

capital budgeting, the financial manager tries to identify

investment opportunities that add value to the firm.


8/15

Capital Budget is prepare by different discounting technique

like;

1) Payback

2) Net Present Value

3) Internal Rate Of Return


9/15


10/15

Revenue Budgeting:

Revenue Budget means budget forecasting for those types

of expenses those are generally occurs in routine

operation, maintenance, cleaning activities, administrative

expenses, etc. Revenue Budget includes only those types of

expenses those recovered within 1 year.

Main purpose of revenue budget is to maintain the routine

expenses and revenue expenses for whole year.


11/15


12/15

Recommendation

The CAPEX portal should be merged with SAP so that the duplication

of efforts of entering into CAPEX as well as SAP is removed. At

present the person who has to raise the request for capital budget

makes the entry through CAPEX portal and the person in Budget

department re-enters the information in SAP thus leading to

duplication of work.

Reporting done monthly and bi-weekly can be automated to reduce

the manual efforts.

Most of the projects are evaluated based on payback period. More

extensive use of other techniques like IRR, NPV can be employed for

more accurate results.


13/15

Conclusion

RIL uses the two types of Budgeting methods CAPEX and OPEX.

It is helpful to understand the capital expenditure and revenueexpenditure.

RIL gets good returns on their long term investment by usingdifferent Budgeting technique.

RIL uses three types of different criteria for evaluation of cash inflowfrom long term investment.

RIL helps to improve shareholders wealth maximization by investingtheir money into those assets which gives good returns to thecompany.


14/15

Books:

Prasanna Chandra, Financial Management, Eight

Edition, Tata McGraw-Hill Publishing Company Limited,

New Delhi.

I M Pandey, Financial Management, Ninth Edition,

2009, Vikash Publishing House PVT. LTD., Noida.


15/15

Websites:

www. Ril.com

http://www.studyfinance.com

http://www.wikipedia.com

Magazines: Business world RIL Annual Report

Company Periodicals

sip presenttion

Documents