1. Revision in
Cash Management System
@
Indian Oil Corporation Limited

2. SHANTANU
MITALI
YASH ROHITJA
PRESENTED
BY
SWATHI CHETAN
NIKETESH
SAIMAHESH

3. Type Public
Traded as BSE: 530965
NSE: IOC
Industry Oil and gas
Founded 1964
Headquarters New Delhi, India
Area served India
Key people R.S Butola (Chairman)
Products Fuels, lubricants,petrochemicals
Revenue US$ 76.05 billion (2012)
Operating income US$ 3.30 billion (2012)
Profit US$ 786 million (2012)
Total assets US$ 40.88 billion (2012)
Total equity US$ 11.59 billion (2012)
Owner(s) Government of India
Employees 36,198 (2012)
Website www.iocl.com

4. INTRODUCTION
• Indian Oil Corporation Ltd. (IOCL) was India's largest company by
sales
• with a turnover of Rs 2710.740 billion and
• profit of Rs. 102.210 billion for the year 2009-10.
• IOCL was India's largest commercial enterprise and flagship national
oil company and downstream petroleum major.
• It operated the largest and widest network of fuel stations in the
country.
• In 2010, IOCL had a market share of 41% in refining, 54% in product
pipelines, and 46% in the petroleum products market.

5.  By financial year 2010-11, IOCL had 14 products such as;
• Indane Gas Domestic and Industrial Gas
• Auto Gas Automotive Natural Gas
• Xtra Premium Automotive Premium Petrol
• Xtra Mile Automotive Premium Diesel
• Servo Lubricants and Greases
 It was a major supplier to core sectors such as the
• Army
• The Railways,
• State Road Transport Corporations,
• The Air Force,
• The Navy,
• Power, and
• Aviation.
 IOCL revised its Cash Management System or Treasury
Management System in the year 2006-07.

6. History[edit]
Indian Oil began operations in 1959 as Indian Oil Company Ltd.
The Indian Oil Corporation was formed in 1964, with the merger of
Indian Refineries Ltd. Indian Oil is the biggest oil producer and
marketeer Oil's product range covers petrol, diesel, LPG, auto LPG,
aviation turbine fuel,
lubricants,naphtha, bitumen, paraffin, kerosene etc. Xtra Premium
petrol, Xtra Mile diesel, Servo lubricants, Indane LPG cooking gas,
Autogas LPG, IndianOil Aviation are some of its prominent brands.
Recently Indian Oil has also introduced a new business line of
supplying LNG (liquefied natural gas) by cryogenic transportation.
This is called "LNG at Doorstep".
Stock price: 530965 (BSE)Rs. 228.60+3.55 (+1.58%)

7. Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation
with its headquarters in New Delhi, India. It is the world's 88th largest corporations, according
to the Fortune Global 500 list, and the largest public corporation in India when ranked by
revenue.[2]IndianOil and its subsidiaries account for a 49% share in the petroleum products
market, 31% share in refining capacity and 67% downstream sector pipelines capacity in India.
The Indian Oil Group of companies owns and operates 10 of India's 22 refineries with a
combined refining capacity of 65.7 million metric tonnes per year. The President of India owns
78.92% (1.9162 billion shares) in the company.[citation needed] In FY 2012 IOCL sold 75.66
million tonnes of petroleum products and reported a PBT of 37.54 billion, and the Government
of India earned an excise duty of 232.53 billion and tax of 10.68 billion. It is one of the
seven Maharatna status companies of India, apart from Coal India Limited, NTPC Limited, Oil
and Natural Gas Corporation, Steel Authority of India Limited, Bharat Heavy Electricals
Limited and Gas Authority of India Limited.[3]
IndianOil operates the largest and the widest network of fuel stations in the country, numbering
about 20,575 (16,350 regular ROs & 4,225 Kisan Seva Kendra). It has also started Auto LPG
Dispensing Stations (ALDS). It supplies Indane cooking gas to over 66.8 million households
through a network of 5,934 Indane distributors. In addition, IndianOil's Research and
Development Center (R&D) at Faridabad supports, develops and provides the necessary
technology solutions to the operating divisions of the corporation and its customers within the
country and abroad. Recently Indian Oil Corp (IOC) has raised $500 million by selling 10-year
dollar-denominated bonds, its fourth such issue overseas in the last three and a half years

8. OIL INDUSTRY
BACKGROUND

9. CATEGORIZED INTO 3 TYPES
• UPSTREAM
• DOWNSTREAM
• MARKETING
• DISTRIBUTION

10. UPSTREAM
• INDIA has 26 sedimentary basins
• Total area 3.14 million sq.km out of which
1.35 million sq.km are under deep water
• Domestic production
2005-2006 – 32.19 MT
2006-2007 – 33.98 MT
2007-2008 – 34.11 MT

11. DOWNSTREAM
• In 2008-2009- Refining capacity- 178
MMTPA
• In 2011-India has 17 refineries out of which 7
are owned by IOCL
• No new refineries has been set up in US &
Europe
• India has also benefit of geographic location

12. MARKETING
• INDIA’s major PSU’s are:- IOCL,BPCL,HPCL
• In April 2002-Private sector came into
existence:- Essar Oil, RIL , Royal Dutch Shell
• Public Distribution System was emerged
through subsidized LPG
• IOCL has 35,066 retail outlets in INDIA till
09’
• 9366 LPG distributions & 6614 superior
kerosene oil

13. DISTRIBUTION
• Supply of oil & gas for household purpose
Railways – 40%
Pipelines- 30%
Coastal tankers – 12%
Road- 18%
• National Gas Grip was also planned

14. COMPANY STRUCTURE

16. •THE ESTABLISHMENT OF THE CASH
MANAGEMENT PRODUCT MODULE IN
IOCL IN 2006-2007, THE TRANSACTION
TOOK PLACE THROUGH THE
COVENTIONAL METHOD USING THE
REGIONAL CASH CREDIT MODULE.
•IN THE RCC MODULE ,STATE BANK OF INDIA
BRANCHES IN VARIOUS LOCATION,SENT
INFORMATION ABOUT THE REMMITTANCE OF THE
FUND TO THE REGIONAL OFFICES AND THEY IN TURN
FORWARDED THAT INFORMATION TO SBI HEAD
OFFICE

17. HIGH VALUE TRANSACTION i.e. THOSE ABOVE
Rs.500000 WERE BEING INFORMED PRIOR TO
THEIR COLLECTION SO THAT THEY COULD BE
CONSIDERED IN ITS DAILY BUDGETING PROCESS
AND WOULD HELP IOCL TO ALLOCATE FUNDS
NECESSARY FOR PAYMENTS. ANYTHING BELOW
Rs. 500000 WAS TREATED AS LOW VALUE
TRANSACTION AND PRIOR INFORMATION FOR
THESE TRANSACTIONS WAS NOT DEEMED
NECESSARY.

18. CURRENT
CASH MANAGEMENT SYSTEM

19. WHAT IS CASH MANAGEMENT
SYSTEM?
• The corporate process of collecting, managing
and investing cash.
• This is a key component of ensuring a company’s
financial stability and solvency.
• The above definition is as given in theory. But in
real world cash management system is one of the
industries endear and ear hearing magnet for most
of the organization catering into IT,
manufacturing and outsourcing companies.

20. UTILIY of cash management system
• When there is a demand for particular product in the market, the
demanded company has to maintain his position in the market and on the
other hand they have to maintain their shares in the top position in the
stock market.
• So, cash management system helps the company to achieve this targets.
Ways to achieve this targets?
- By using optimum resources, and limited raw material
- Maintaining price strategy by giving a reasonable price to the customers
for a long period of time.

21. Example of effective Cash
Management System

22. Collections modes:-
 Non e-collection mode.
 Local instruments.
 outstation instruments.
 collection account.
 special current account.
 current account.
 letter of authority.
 railway credit note.
 cash credit account.
BANKING ARRANGEMENTS

23.  E-collection mode.
 REAL TIME GROSS SETTLEMENT (RTGS).
 NATIONAL ELECTRONIC FUND TRANSFER (NEFT).
 CORPORATE INTERNET BANKING.
 CORE TO CORE.
 INSTRUCTION CARD.
BANKING ARRANGEMENTS

24. CASH FLOW FORECASTING
A key element of cash management involved projections of
inflows and outflows of cash by the corporation.
• Projections were done in two stages:-
• Monthly: by the 7th of every month.
• Rolling: by the 22nd of every month for the next month.

25. • For effective forecasting, managers at IOCL required
credible information from multiple sources.
• For budgeting December 2010,the months that were
taken as per method were Sep.,Oct. and November. The
actual collections were put in region wise.
Then the total of each region was arrived at and this was
divided by three to find the average of three months.

26. • Likewise in December 2009,the actual collection of
same period was summed up and divided by three to get
the average of each region.
• The actual collection for December 2009 was also noted
region wise.
• The percentage for adjustment was obtained by dividing
actual collection in December 2009 by average
collection.
• This percentage of adjustment was carried forward and
multiplied with average of each region in the 2010
figures.

27. IOCL BPCL HPCL
OPERATING INCOME 447096.41 240115.75 206958.80
COST OF SALES 433359.56 234008.95 202697.14
OPERATING PROFIT 13736.85 6106.80 4261.66
OTHER RECURRING INCOME 3514.79 1680.23 1102.36
ADJUSTED PBDIT 17251.64 7787.03 5364.02
FINANCIAL EXPENSES 6409.15 1825.24 2019.33
DEPRECIATION 5200.99 1926.10 1983.52
ADJUSTED PBT 5641.50 4035.69 1361.17
TAX CHARGES 642.63 1392.79 630.47
ADJUSTED PAT 4998.87 2642.90 730.70
OTHER NON CASH ADJUSTMENT 6.30 174.01
REPORTED NET PROFIT 5005.17 2642.90/ 3142.90 904.71/10587.4
EQUITY DIVIDEND 1505.33 795.39 287.83
DIVIDEND TAX 255.83 127.47 48.92
RETAINEND EARNING 3244.01 2220.04 10250.70

28. IOCL BPCL HPCL
SHARES IN ISSUE 24279.52 L 7230.84L 3386.27 L
EARNING PER
SHARE
16.29/- 36.55/- 26.72/-
EQUITY DIVIDEND
(%)
50.00 110.00 85.00
BOOK VALUE 238.38 230.04 405.35