OVERHEAD COST STRUCTURE ANALYSIS OF OIL REFINERIES

Transcription

1 OVERHEAD COST STRUCTURE ANALYSIS OF OIL REFINERIES 7.1 Introduction 7.2 Overheads Classification of overhead 7.3 Total cost analysis 7.4 Direct overhead to total cost of sampled units 7.5 Indirect overhead to total cost of sampled units 7.6 Indirect overhead of BPCL Production overhead of BPCL Administrative overhead of BPCL Selling and distribution, R&D, and other overhead of BPCL 7.7 Indirect overhead of HPCL Production overhead of HPCL Administrative overhead of HPCL Selling and distribution, R & D, and other overhead of HPCL 295

2 7.8 Indirect overhead of IOC Production overhead of IOC Administrative overhead of IOC Selling and distribution, R & D, and other overhead of IOC 7.9 Indirect overhead of MRPL Production overhead analysis of MRPL Administrative overhead analysis of MRPL Selling and distribution, R & D, and other overhead of MRPL 7.10 Indirect overhead of NRL Production overhead of NRL Administrative overhead of NRL Selling and distribution, R & D, and other overhead of NRL 7.11 Indirect overhead of CPCL Production overhead of CPCL Administrative overhead analysis of CPCL Selling and distribution, R & D, and other overhead of CPCL 296

3 7.1 Introduction This section deals with non-financial performance with reference to overhead Cost-structure. So let as start with cost generally cost means difference between total sales and total profit figure. The cost is reflected to both the centre profit centre and revenue centre. The management need to proper accounting of cost to take specific decision CIMA defines cost accounting as the establishment of budgets, standard costs and actual cost of operation, processes, activities or products, or products, and the analysis of variances, profitability or the social use of funds. Cost accounting accounts for the costs of a product, a service or an operation. It is concerned with actual cost incurred and the estimation of future costs. Cost accounting is a conscious and rational procedure by accountants for accumulating cost and relating such costs to specific products or departments for effective management action. Cost accounting establishes budgets, standard costs and actual costs. Cost accounting is a set of procedures used in refining raw data in to usable information for management decision making, for ascertainment of cost of production and services and its profitability. Cost accounting is a management information system which analyses for managerial decision making. Total cost segregated in to two portions (1) direct expense (2) indirect overhead. This chapter deals with overhead. So now understand about overheads. 7.2 Overheads Overheads are the indirect costs which cannot be allocated to any specific job. Process because they are not capable of being identified with any specific job or process. Overheads include cost of indirect material, indirect labor, indirect expe nses which cannot be conveniently charged to any job, process cost unit etc for example, costs like rent, rates, administration and supervision, depreciation, maintenance, selling and directly attributed to cost antis produced the costing treatment of overheads deals with methods where by these indirect expenses can be related to cost units. CIMA defined overhead cost as the total costs of indirect materials, indirect materials, indirect job our and indirect expenses overhead is the cost of materials, 297

4 labour and expenses which cannot be economically identified with specific saleable cost unit Classification of overhead Classification is the process of arranging items in to groups according to their degree of similarity. CIMA defines classification as the arrangement of items in logical groups having regard their nature (subjective classification) or the purpose to be fulfilled (objective classification). Accurate classification of all items is a prerequisite to any form of cost analysis and control system.the classification system must meet the objective of all the system which may use the classification. The classification of overheads is shown in following figure:- Classification of overheads Element wise Classification Function wise Classification Behavior wise Classification Indirect materials Indirect labour Indirect expenses Production overhead Administration overhead Selling overhead Distribution overhead Research and development overhead Fixed overhead Semi-variable overhead Variable overhead Element wise classification- The Element wise classification of overheads consist of cost of indirect material, indirect labour and indirect expenses. A) Indirect materials The costs incurred on materiel used to further the manufacturing process which cannot be traced into the end product and the material required in the production process but not necessarily built into the product are called indirect materiel. For example cutting oil used in cutting 298

5 surface, threads and buttons used in stitching clothes, lubricates used maintenance of plant and machinery, cotton waste used in canning the machinery etc. are considered as indirect materials. Sometimes indirect materials like coat, fuel used in kilns etc. are considered as part of the prime cost and some material which are considered in small quantities in the end product like gums and threads used in binding the books even though forming part of direct material cost,but is considered not worth analyzing to cost units and may be categorized as indirect material cost. (B)Indirect labour The cost Indirect labour consist of all salaries and wages paid to the staff for the purpose of carrying tasks incidental goods or services, which will not form part of salaries and wages paid in working directly upon the product. For example, salaries and wages paid to store keepers, watch and ward, supervise, time keepers, quality control, managers, clerical staff, salesmen s etc. these Indirect labour costs cannot be identified with any particular job process, cost unit or cost center. (c)indirect expenses Indirect expense are those which are incurred by the organization in carrying out their total business activities and cannot be conveniently allocated job process, cost unit or cost center. Rent, rates, taxes, insurance, lighting, telephone, postage and telegrams, depreciation etc. are the examples of indirect expense. Indirect costs cannot be allocated which can be apportioned to cost centers or cost units. These costs are also called common costs and are not traceable to any plant, department, and operation or to any individual find product.the Indirect costs cannot be directly allocated to cost units or cost centers and have to be absorbed or recovered in cost units Functional classification-based on function, the overhead can be classified into 1.production overhead 2.administration overhead 3.selling overhead 4.distribution overhead 5.resarch and development overheads. (A)Production overhead The Production overhead is inclusive of all indirect materials, indirect labour and indirect expenses concerned with manufacturing activity which starts with supply of materials and ends with primary packing of the production overhead is also called manufacturing overhead, works overhead 299

6 and factory overhead. Costs which can be classified as production overheads include the following: - Factory rent, rates, lighting and heating. - Insurance of plant and Machinery, factory buildings, furniture and equipment. - Repairs and maintenance of plant and Machinery, factory premises. - Salaries, wages and incentives to indirect workers and staff like factory watch and ward, office boys, Time keepers, store keepers, factory clerical staff, maintenance staff, tool room operators etc. - Idle time wages - Fire protection service - Carriage inwards - Depreciation of plant and machinery, factory buildings and other assets - Cost of estimation department, drawing office, quality control department etc. - Remuneration paid to directors and other higher officials concerned with production and factory management - Consumable stores and material of little value - Factory administration cost like printing and stationery, postage and telegrams, telephone, computer department cost. (B)Administration overhead- The administration overhead is incurred for carrying the administrative function of the organization i.e., cost of policy formulation and its implementation to attain the objectives of the organization. The administration overhead costs may include the following: - Office rent, rates and taxes - Office lighting, seating and cleaning. - Depreciation, insurance, repairs and maintenance of office buildings, furniture, equipment and fittings - Salaries of administrative staff. - Printing and stationery, postage and telegrams, telephones etc. - Accounts and secretariat costs. - Audit and legal fees. - Bank charges. - Salaries to office staff. 300

7 - Director s remuneration and sitting fees. (C) Selling overhead The selling overhead refers to the cost of selling function i.e. the cost of activities relating to Create and stimulates demand for company s Products and to secure orders. The selling overhead includes the following: - Salaries, commissions and traveling expenses to sales staff - Remuneration of sales director - Administration and upkeep of sales office and showrooms - Advertising and publicity expenses - Cost of catalogues, price lists and samples - Depreciation, insurance, repairs, maintenance of sales office and showrooms - Bad debts and cost incurred for collection of bad debts (D) Distribution overhead The distribution overhead will be incurred on goods made available to the customers. These costs include the cost of maintaining and creating demand for the product, making the goods available in the hands of customer. - Carriage and freight outwards - Packing and delivery charges - Depreciation, insurance maintenance and maintenance of delivery vehicles - Rent, depreciation, deprecation, insurance and maintenance of distribution outlets - Administration cost of ducts, new distribution outlets - Wages of packers, drivers and delivery boys etc, (E) Research and development overhead Reach overhead is the cost of searching for new products, new manufacturing processes or equipment. The development over head is the cost of putting research result on commercial basis. Some of the cost relating to research and development overhead is given below: - Cost of raw materials used in research - Salaries and wages of R and D staff - Subscriptions to books and journals - Subscriptions to research associations - Cost of test conducted and trails runs - Depreciation, insurance, repairs and maintenance of building and research equipment, plant etc. 301

8 - Up- keep and maintenance of R and D office - Travelling cost for surveys etc. Behavior wise classification- Based on the behavior, overhead can be classified into.1. Fixed, Variable and Semi-variable of semi- fixed overhead. (A) Fixed overhead Fixed overhead consist of items of expanse which will not vary with output but remain constant. For example, rent, rates, insurance, salaries are fixed in nature irrespective of the level of capacity utilized or units produced. (B) Variable overhead Variable overhead costs are those which vary in direct proportion to the volume of output. For example, power consumption, consumption of indirect materials and indirect labour etc. There is linear relationship between volume and variable overhead. They are constant per unit. (C) Semi-variable overhead Some overhead neither perfectly variable nor absolutely fixed in relation to changes in volume. The change in same direction as volume but not in direct proportion thereto. For example, in telephone charge, the rental element is fixed cost whereas charges for calls made are a variable cost. 7.3 Total cost analysis Earlier discuss in previous section total cost is reflected to both the center profit center and revenue centre. Total cost of selected units has shows in following table: Table 7.3 Total cost of sampled units Companies BPCL HPCL IOC MRPL NRL CPCL Average Years Mean SD CV (%) Table 7.3 indicates total cost of selected units. The total of BPCL was Rs.1, 09,078 crores in the year which was increase twice in the year up to 302

9 Rs.2,11,791 crores. In HPCL total cost was Rs.1, 07,108 cores in the year and it was increased in next year up to Rs.1, 23,109 crores compare to previous year but last two year it was increased and reached to Rs.1,78,142 crores on the year Thw average total cost of IOC was Rs3,12,452 crores it was highest due to virtue of size. The total cost of IOC was decline approximately 20% compared to previous year but once again it is increase up to Rs.4,26,523 crores in the year The total in MRPL was Rs cores in the year and it is increase continuously throughout the study period up Rs crores in the year (Excluding the year ). The highest total cost of MRPL was Rs crores in the year Total cost of CPCL was Rs crores in the year which was decline for year and as well. Instant of decline the cost, company increase loss in the year , due to decline in revenue from the operation. CV of BPCL was 26.98% and for NRL 27.11% which was higher than industry CV. 7.4 Direct overhead to total cost of sampled units Table 7.4 Direct overhead to total cost of sampled units Companies BPCL HPCL IOC MRPL NRL CPCL Average Years Mean SD CV (%) (In %) Table 7.4 shows contribution of direct overhead to total cost of selected units. In BPCL direct overhead contribution to total cost was %in the year which was decline in next year but once again increased for last three year of study period. In HPCL CV was only 0.28% that suggested that the consistency in direct overhead. The direct overhead total cost in IOC was 94.92% in which was decline in the year up to 92.38%. The overall mixture movements regard to this ratio and CV was also 1.20%. In MRPL highest contribution was 97.35% in the 303

10 year and lowest contribution was 96.13% in the year The direct overhead to total cost contribution on NRL was 96.25% in the year which was decline up to 94.27% in the year However in last year it was increased. The CPCL was varying between 90.63% to 96.25% regard to indirect overhead to total cost. The industry mean was 94.96%, the MRPL and NRL only two unit means was higher than industry mean. 7.5 Indirect overhead to total cost of sampled units Table 7.5 Indirect overhead to total cost Companies BPCL HPCL IOC MRPL NRL CPCL Average Years Mean SD CV (%) (In %) Table 7.5 Indicate that the percentage of indirect overhead to total cost. The indirect overhead to total cost was 3.96 for BPCL in the year The average contribution in BPCL was 5.34%, The HPCL has consistence regard to indirect overhead to total cost because only 5.82%. In IOC ratio are show mixture trend under study period. Indirect overhead contribution to total cost in MRPL was varies between 2.65% to 3.87%. The individual sample mean was 4.85%, 5.71% for NRL and CPCL respectively. 7.6 Indirect overhead of BPCL Indirect cost which cannot be allocated to any specific job process because they are not capable of being indentified with any specific job or process. To overcome the difficulties in ascertainments of units cost and profitability proper classification and codification is done for ease of recording, collection and control of cost data. Earlier discuss same like as classification has done in many ways. I.e. Element wise, function wise, and behavior wise. For effective analysis of cost 304

11 function wise classifications is more suitable. Based on the functions the overhead can be classified in to. 1. Production overhead 2. Administrative overhead 3. Selling overhead 4. Distribution overhead 5. Research and development overhead. Let us start with production overhead. The production overhead analysis of BPCL is given below: Production overhead of BPCL Components Table Production overhead of BPCL Total Rs. % Power and Fuel Rent Repairs and maintenance: Building Repairs and maintenance: Machinery Repairs and maintenance: Others Excise Duty on Inventory differential Total Table shows production overhead of BPCL. The BPCL was consumed Rs. 62 crores power and fuel in the year The consumption of power and fuel was increase entire study period up to Rs. 716 crores in the year The rent expenses was Rs. 139 crores in the year which was decreased in the year up to Rs. 122 crores. The mix trend was prevails under study period for consumption of rent. The company has paid Rs.24 crores repairs and maintenance about building in the year which was lower under study period. The higher maintenance about building was Rs. 40 crores in the year The total machinery repairs and maintenance expenses was Rs crores. The other repairs and maintenance expenses was Rs. 93 crores in the year which was decreased on next two year after that last two year of study period that was increased 305

12 up to Rs. 106 crores in the year The excise duty on inventory differential was negative under study period because of higher provision in previous year, Components wise analysis reveals that the % contribution made by the machinery repairs and maintenances which was higher from other contribution. Similar like power and fuel contribution was % in total production overhead. From the year wise analysis, in the year production overhead was increased approximately 100% from the privies year after than continuously increased under study period Administrative overhead of BPCL Table Administrative overhead of BPCL Components Total Rs. % Charges paid to other oil companies Contribution to gratuity fund Contribution to other funds Contribution to provident fund Depreciation and amortization Insurance Interest Remuneration to auditors Telephone, Telex, Cables, Postage etc Utilities Voluntary Retirement Scheme Welfare expenses Salaries and wages Total Table exhibits that the administrative overhead of BPCL. The BPCL was paid Rs.63 crores for charges paid to other oil companies which was increased up to Rs.123 crores in the year The charges paid to other oil company was decline up to Rs.109 crores in the year which was increase in last year of study period. In BPCL contribution to gratuity fund was Rs.10 crores in the year

13 which was rapidly increase in next year up to Rs.211 but after that it was decline in next three year of study period. The contribution to other funds was Rs.851 crores which was higher under study period. Depreciation and amortization of BPCL was Rs.1098 crores in the year which was fluctuate under study period. The BPCL was paid Rs. 26 crores insurance expenses in the year which was lower one and Rs.42 crores in the year which was higher one. Initially three year company paid little remuneration to auditors but after that company paid Rs. 27 crores and Rs.39 crores remuneration to auditors for the year and respectively. The BPCL was paid Rs.22 crores to Rs.26 crores for telephone, telex, cable and postage expenses. For BPCL a utility expenses was varies between Rs.104 crores to Rs.151 crores under study period. The company incurred Rs.94 crores expenses for voluntary retirement scheme in the only one year In BPCL mix trend was prevails about welfare expenses under study period. The company was paid Rs.102 crores for salaries and wages which was increase up Rs.1006 crores in the year Percentage of individual components to total administrative overhead shows that the approximately 80% contribution by three components I.e. Depreciation and amortizations, salaries and interest Selling and distribution, R & D, and other overhead of BPCL Table Selling & Distribution, R & D, and other overhead of BPCL 307 Components Total Rs. % Charities and donations Foreign Exchange fluctuations (net) Loss on sale of current Investments Loss on sale/write off of fixed assets Other expenses Provi. for doubtful debts and advances Provision towards diminution in value of investments Travelling and conveyance Write off of Bad debts Total

14 Table shows the selling and distribution, R& D, and other overhead analysis of BPCL. It can be seen from the table company was paid only Rs.00.2 crores expenses for charities and donation, in the year The company has no incurred foreign exchange fluctuation for the year and , but in the year and FEF was Rs.1303 crores and Rs, 1420 crores respectively. The loss on sale of current investment was Rs.515 crores in the year which was higher under study period. For BPCL negligible loss or write of fixed assets for initially two year but after that in the year it was Rs.8 crores. No loss on sale of fixed assets for last two year of study period. The company made Rs.73 crores provision for doubtful debts and advances in the year The negative value was there for provision towards diminution in value of investment for initially three year of study period, but after that in the year it was Rs.829 crores. The travelling and conveyance expense was varies between Rs.110 crores to Rs.118 crores under study period excluding the year In the year it was only Rs.9 crores. Write of total bad-debt was Rs crores. The higher selling and distribution, R & D and other overhead was incurred in the year that was Rs crores and excluding other expenses higher contribution made By FEF that was up to 31.20% to total selling and distribution expenses. 7.7 Indirect overhead of HPCL Production overhead of HPCL Table Production overhead of HPCL Components Total Rs. % Electricity and water Excise Duty on Inventory differential Power and Fuel Rent Repairs and maintenance: Building Repairs and maintenance: Machinery Repairs and maintenance: Others Total

15 Table shows production overhead of HPCL. The electricity and water expenses was Rs.174 crores in the year which was increased up to Rs.403 crores in the year The excise duty on inventory differential was negative in the year and , due to higher provision in previous year. The power and fuel expenses were Rs.17 crores and Rs.19 crores in the year and respectively. After that power and fuel expenses were rapidly increase in the last three year of study period. For HPCL rent was increased in upward trend under study period. The repairs and maintenance about building was Rs. 17 crores in the year which was increase up to Rs.38 crores in the year after that it was decreased up to Rs.28 crores in the year The repairs and maintenance to other expenses was varies between Rs.96 crores and Rs.345 crores under study period. In the total production overhead, 24.47% contribution by the machinery repairs and maintenance expenses, 20.49% contribution by the electricity and water and 18.69% contribution by power and fuel to total production overhead Administrative overhead of HPCL Table Administrative overhead of HPCL Components Total Rs. % Security charges Contribution to gratuity fund Contribution to P.F Depreciation and amortization Exploration Expenses Insurance Interest Salaries and wages Telephone, Telex, Cables, Postage etc Welfare expenses Total Table exhibits administrative overhead analysis of HPCL for the year to The security charges expenses was increase through study period. The gratuity fund was Rs. 35 cores it was increase up to Rs.86 crores in the year The contribution to gratuity fund was Rs. 435 crores in the year The contribution to provident fund was Rs. 44 crores in the year which 309

16 was increased up to Rs. 77 crores in the year and In the year HPCL was writing of depreciation and amortization up to Rs. 851 crores in the year it was increased up to Rs.1712 crores in the year The exploration expenses was Rs. 255 crores in the year which was highest under study period. The company was incurred insurance expenses between Rs. 17 crores to Rs.31 crores under study period. The HPCL was incurred interest expenses up to Rs.766 crores in the year it was increase suddenly up to Rs.2083 crores. There were no interest expenses in the year The HPCL was paid Rs.632 crores as a salaries and wages which was increased till the up to Rs.1281 crores. However in the year it was decreased up to 1096 crores. Telephone, telex, cable, postage etc was Rs. 9 crores in the year it was increase up to Rs.13 in the year The welfare expanses were increase continuously for first four year of the study period but at last year it was decreased approximately 120% Selling and distribution, R & D, and other overhead of HPCL Table Selling & Distribution, R & D, and other overhead of HPCL Components Total Rs. % Advertisement and publicity Consultancy and technical services Charities and donations Foreign Exchange fluctuations (net) Loss on sale of current Investments Loss on sale/write off of fixed assets Provi. for doubtful debts and advances Provision towards diminution in value of investments Travelling and conveyance Write off of Bad Other expenses Total

17 Table shows the selling and distribution, R& D, and other overhead analysis of HPCL. The advertisement and publicity expenses was Rs.100 crores in the year which was decreased up to Rs.84 crores in the year but once again it was increase up to Rs. 104 crores in the year The overall mix trend was under study period. The consultancy and technical services was Rs. 22 crores, Rs.29 crores and Rs.30 crores for the year , and respectively. The company has transfer Rs.19 crores as a charities and donations in the year it was decreased up to Rs. 15 crores in the year The charities and donation expenses was Rs.27 cores in the year and Rs crores in the year The loss on sale of current investment Rs. 235 crores in the year which was higher under study period. The loss on sale or write off fixed assets was no Rs. 50 crores in the year There was loss on fixed assets in the For last two year loss in fixed assets was Rs. 14 crores and Rs.10 crores respectively. The provision for doubtful debts and advances was fluctuating between Rs. 20 crores to Rs.36 crores. The provision towards diminution in value of investment was Rs crores in the year and remaining last four year it was negative. Travelling and conveyance expenses was Rs. 95 crores in the it was increase up to Rs. 123 crores in the year The total expenses about write off bad-debts, stores and spare and other was Rs crores for HPCL. 7.8 Indirect overhead of IOC Production overhead of IOC Table Production overhead of IOC Components Total Rs. % Electricity and water Power and Fuel Rent Repairs and maintenance: Building Repairs and maintenance: Machinery Repairs and maintenance: Others Throughout processing, royalty Total

18 Table shows production overhead of IOC. For IOC electricity and water expenses were. 141 cores in the year it was increase up to Rs. 178 crores in the year but in the year it was decreased up to Rs.156 crores. In the last year it was Rs.199 crores. The power and fuel expenses was Rs. 358 crores in the year which was increase up to Rs.3801 crores in year The rent expense was varies between Rs.272 crores to Rs.378 crores under study period. The repairs and maintenance expenses about building was Rs.123 crores in the year it was decreased up to Rs.110 crores in the year , after that it was increases in remaining three year up to Rs.148 crores. The repairs and maintenance expenses about machinery was Rs.838 crores in the year , Rs.836 crores in the year Rs.1195 crores in the year , Rs.1241 crores in the year and Rs 1466 crores in the year The total repairs and maintenance expenses about other were Rs.419 crores under study period. The IOC has paid total Rs.722 Crores royalty throughout processing under study period. It is reveals from the year wise total, the total production overhead analysis was increase continuously reveals that the 43.26% contribution also by the power and fuel and up to 32.33% contribution by the repairs and maintenances of machinery Administrative overhead of IOC Table exhibits the administrative overhead of IOC. In administrative overhead. IOC has been paid Rs.42 crores bank charges in the year it was increase up to Rs.69 crores in the year but once again it was decreased up to Rs.46 cores in the year The total bank charges were Rs.241 crores under study period. The printing and stationery charges was varies between Rs,. 23 Crores to Rs.31 crores. The contribution to gratuity fund was Rs. 17 crores and Rs. 6 crores for year and respectively. The contribution to provided fund was Rs. 585 crores in the year it was increased up to Rs.1626 crores in the year However in the year it was only Rs. 715 crores. A total depreciation and amortization expense was Rs crores throughout study period and also they shows upward trend under study period. The higher exploration cost Rs. 333 crores in the year and lower exploration was Rs.172 crores under study period. The handling expenses was Rs.124 crores in the year and Rs.214 cores in the year The company has paid total insurance premium Rs. 332 crores under study period. The company has paid approximately Rs crores to 1.91 crores as 312

19 remunerations to auditors. The salaries and wages expenses was Rs crores in the year it was increased approximately 110% in the next year. The mix movement for salaries and wages under study period. The IOC has security forces charges continuously increased and communication expenses was fluctuate between Rs39 crores to Rs.48 crores. The voluntary retirement expenses was Rs.19 crores in the year , 1.73 crores in the year and 2.03 crores in the year In IOC total welfare expenses was Rs crores under study period. Looking to the percentage wise contribution % contribution by depreciation and amortization % by the interest and 25.41% by the salaries and wages. Table Administrative overhead of IOC Components Total Rs. % Bank Charges Printing &Stationery Contribution to gratuity Contribution to P.F Depreciation & amortization Exploration cost Handling Exp Insurance Interest Remuneration to auditors Salaries and wages Security Force Fees Telephone, Telex, Cables, Postage etc Voluntary Retirement Scheme Welfare expenses Total

20 7.8.3 Selling and distribution, R & D, and other overhead of IOC Table Selling & Distribution, R & D, and other overhead of IOC Components Total Rs. % Amortization of Premium on Forward Contracts Expenses for enabling facilities Expenses on CSR activities MTM loss on interest rate swap Provision for probable contingencies Commodity Hedging loss Foreign Exchange fluctuations (net) Inventory carrying cost Loss on sale of current Investments Loss on sale/write off of fixed assets Provision for Diminution on Receivable from Trust Provision for doubtful debts and advances Provision towards diminution in value of investments Sales Promotion exp Technical Assistance Fees Travelling and conveyance Write off of Bad debts & others Other expenses Total

21 Table shows the selling and distribution, R& D, and other overhead of IOC. The IOC was paid premium in forward contract Rs.237 crores in the year it was decreased up to Rs.89 crores in the year The expenses for enables facilities were Rs.4 crores in the year The IOC was paid Rs. 76 crores on CSR activities for the only year Interest rate swap made a provision in the probable contingencies of Rs.31 crores in the year , Rs.26 crores in the year , Rs.42 crores in the year , Rs.43 crores in the year and Rs.93 crores in the year The company has an incurred Rs.93 crores commodity hedging loss. The FEF was Rs.4014 crores in the year and Rs.2769 crores in the year The inventory carrying cost was Rs. 50 crores in the year and Rs.57 crores in the year No inventory carrying cost for last three year No inventory carrying cost for last three year. The company has incurred Rs total cost on sale of current investment under study period. The loss or write off fixed assets was Rs which was higher and Rs.1.8 crores which was lower one under study period. The provision for diminution on receivable from thrust was Rs.75 crores in the year The provision for doubtful debts and advances was Rs.330 crores in the year it was decreased in next year up to Rs.43 crores. The sales promotion expense was not stable under study period. The technical assistance fees were varies between Rs crores to Rs.129 crores under study period. The travelling and conveyance expenses were increased throughout study period. The total bad-debts written expenses were Rs crores under study period. The selling and distribution research and development and other overhead expenses of IOC were Rs crores, in the year , and Rs crores in the year Indirect overhead of MRPL Production overhead analysis of MRPL Table reveals production overhead analysis of MRPL. The excise duty on inventory differential was Rs.9.28 crores in the year it was negative in the year and in the year it was Rs crores. The power and fuel consumption expenses were varies between Rs.3.8 crores to Rs crores. The company was paid Rs crores as total rent during the study period. The building repairs and maintenance was Rs.86.2 crores in the year which was higher 315

22 one. The repairs and maintenance expenses of machinery was Rs crores in the year which was increase up to Rs crores in the year other than building and machinery. The total repairs and maintenance expenses was Rs crores between to The higher production overhead was Rs.306 crores in the year Percentage wise contribution to total production reveals that the, 34.44% by the machinery and maintenance, 30.19% by the other repairs and maintenance and 14.64% repairs and maintenance and 14.64% by the excise duty on inventory differential. Components Excise Duty on Inventory Table Production overhead of MRPL Total Rs. % differential 9.28 Power and Fuel Rent Repairs and maintenance: Building Repairs and maintenance: Machinery Repairs and maintenance: Others Total Administrative overhead analysis of MRPL Table Administrative overhead of MRPL Components Total Rs. % Provision for nonmoving inventory loss Contribution to provident fund Depreciation and amortization Insurance Interest Remuneration to auditors Salaries and wages Welfare expenses Total

23 Table shows that the administrative overhead analysis of MRPL. The total provision for non-moving inventory loss was Rs.4.37 crores under study period. The contribution to provident fund was Rs crores in the year it was increase up to Rs.29.5 crores in the year In MRPL depreciation and amortization was Rs crores in the year which was increases up to Rs crores in the year The insurance expenses of MRPL was varies between Rs crores to Rs. 9.9 crores under study period. The interest expenses was Rs crores in the year which decline up to Rs. 104 cores in the Rs crores. The company has paid Rs.9.28 crores remuneration to auditors in the year and remaining four year it was negligible. The salaries and wages expenses of MRPL were vary between Rs crores to Rs.165 crores with the total of Rs, crores under study period. The total welfare expenses were Rs under study period. Year-wise total reveals that the administrative overhead decline for initially three year of study period but after that they increase up to Rs crores in year The contribution of depreciation and amortization to total administrative overhead was Rs.57.78% under study period Selling and distribution, R & D, and other overhead of MRPL Table Selling & Distribution, R & D, and other overhead of MRPL Components Total Rs. % Foreign Exchange fluctuations (net) Loss on sale/write off of fixed assets Provision for doubtful debts and advances Other expenses Total Table represent selling and distribution, research and development and other overhead of MRPL. The foreign exchange fluctuation was Rs crores in the year and Rs crores in the year The loss on sale write off of fixed assets was Rs. 019 crores in the year it was increased up to 0.97 crores in the year , after that it was increased suddenly up Rs. 73 crores in the 317

24 year The company has made total Rs crores for provision for doubtful debts and advance. The other expenses were Rs crores in the year which was lowest one. In total selling and distribution, R & D and other overhead 73.14% contribution by the foreign exchange fluctuations Indirect overhead of NRL Production overhead of NRL Components Table Production overhead of NRL Total Rs. % Excise Duty on Inventory differential Power and Fuel Rent Repairs and maintenance: Building Repairs and maintenance: Machinery Repairs and maintenance: Others Total Table shows production overhead of NRL. The excise duty on inventory differential was negative under study period excluding the year The power and fuel was Rs crores in the year after that it was decreased up to Rs and stable for next year. The power and fuel expenses were Rs. 130 crores in the year The company was paid Rs crores rent under study period. The repairs and maintenance expenses of building was Rs.029 crores in the year it was decline in next year up to Rs.0.28 crores and once again increase up to Rs.0.45 crores in the year The machinery repairs and maintenance was varies between Rs.13 crores to Rs. 41 crores under study period. Other repairs and maintenance was Rs. 0.2 crores in the year it was increased suddenly up to Rs. 31 crores in the year In the last year it was Rs. 44 crores. The total production overhead was Rs crores in the year it was increase up to Rs crores in the year The total production was Rs crores in the 318

25 year and Rs crores in the year In.the total production overhead 34.23% contribution by the machinery repairs and maintenance Administrative overhead of NRL Table Administrative overhead of NRL Components Total Rs. % Contribution to gratuity fund Contribution to provident fund Depreciation and amortization Exploration Expenses Facility hire charges Insurance Interest Remuneration to auditors Salaries and wages Telephone, Telex, Cables, Postage etc Welfare expenses Total Table represents administrative overhead analysis of NRL. The gratuity fund was Rs.0.15 crores which was lower one the year and Rs which was higher one in the year The contribution to provident fund continually increases throughout study period and it was increases suddenly in the year last year up to Rs crores from the Rs crores. Total depreciation was Rs. 804 crores under study period. In total administrative overhead 53.51% contribution by the depreciation and amortization expenses. The exploration expenses increased under study period and reach to Rs crores in the year The facility hire chares was Rs crores in the year which decline for next two year up to Rs crores in the year but once again it was increased up to Rs crores in the year The initially three year insurance premium expenses were decline but after that it was increased for last two year of study period. The NRLwas paid Rs crores total insurance premium under study period. The interest expenses was 319

26 Rs crores in the year , Rs crores in the year , Rs crores in the year In the year interest expenses suddenly increase up to Rs. 29 crores and Rs. 39 crores in the year In total administrative overhead only 0.025% remunerations paid to auditors under study period. The salary and wages expenses was Rs. 40 crores in the year it was increased up to Rs crores in the year but in the year salaries and wages was decline up to Rs. 73 crores. The total telephone, telex, cable, postage expenses was Rs crores under study period and contribution to administrative expenses was 0.25% by all these communication expenses. The welfare expense was increase from Rs. 10 crores to Rs. 30 crores in the year to In total administrative overhead 53.51% contribution by the depreciation and amortization, 24.74% contribution by salaries and wages and 7.84% contribution by interest Selling and distribution, R & D, and other overhead of NRL Table Selling & Distribution, R & D, and other overhead of NRL Components Total Rs. % Provision for stores Charities and donations Foreign Exchange fluctuations (net) Loss on sale/write off of fixed assets Provision for doubtful debts and advances Provision/(Reversal) towards diminution in value of investments Travelling and conveyance Write off of Bad debts. Store & Spares and others Other expenses Total

27 Table represent selling and distribution, research and development and other overhead of NRL. The provision for stores was Rs crores in the only one year The charities and donations was Rs crores in the year after that it was increased up to Rs crores in year , once again increase up to Rs crores but in the year decreased little up to Rs crores and once again increased up to Rs crores in the year The foreign exchange fluctuations was Rs.0.79 crores in the year The loss on sale or write off fixed assets was Rs in the year it was increase up to Rs crores in the year but at last year it was decline up to Rs. 7.2 crores. The provision for doubtful debts and advances was Rs crores and Rs. 4 crores for the year and respectively. The travelling and conveyance overhead was Rs. 10 crores in the year it was increased up to Rs in the year but next year it was decline up to Rs.9.86 crores. The bad debts write off, stores and spares and other was Rs crores in the year The total selling and distribution overhead expenses were Rs crores under study period. Percentage wise analysis shows that the 46.23% contribution by other expenses, 23.74% contribution by travelling and conveyance, 11.26% contribution by charities and donation and 11.19% by the loss on sale or write off fixed assets Indirect overhead of CPCL Production overhead of CPCL Table Production overhead of CPCL Components Total Rs. % Processing fees Electricity and water Excise Duty on Inventory differential Power and Fuel Rent Repairs and maintenance: Building Maintenance: Machinery Maintenance: Others Total