SUMMER TRAINING PROJECT

PRESENTATION
REPORT ON IMPORT PROCEDURE AND
PAYMENT AT IPCL
PREPARED BY
SIMMIN SHAIKH
MBA- 2005-07
SKPIMCS

OVERVIEW OF THE PRESENTATION

INTRODUCTION TO PETROCHEMICALS INDUSTRY

AND IPCL

THEORETICAL ASPECTS OF STUDY

IMPORT PROCEDURE

INCOTERMS

FILE STUDY OF IMPORT OF CARBON BLACK

PAYMENT TERMS
SAP ACCOUNTING
E- PAYMENT

PETROCHEMICALS INDUSTRY

Petrochemicals are derived from chemical

compound obtained from the feedstock which is
obtained from the distillation of crude oil.

The feedstock is converted into base chemical from

which the end product is produced.

Cracking is the process which breaks down large

molecules into small molecules.

ABOUT IPCL

Pioneering petrochemicals industry in India.

Main business being manufacture and sale of
petrochemicals.
The main business comprises of polymers,
synthetic fiber, solvents, industrial chemicals and
other chemicals.
IPCL owns three petrochemicals complexes, a
Naphtha based complex at Vadodara and two Gas
based complexes at Gandhar and Nagothane.

Research and Development

Before the commencement of actual operations the

R&D center had been set up.

It has stepped forward by developing a new paraffin

dehydrogenation catalyst.

IPCL has bagged the Indian Chemical Manufacturers

Association Award for forward technology development
for isomerisation catalyst.

IPCL has won National/ State Awards from DSIR,

FICCI, DGDT.

JOINT VENTURES

IPCL is the main promoter of GCPTCL.

IPCL and General Electrics Plastics (GEP) Netherlands

have jointly ventured to manufacture advanced
engineering plastics in India.

It is the first time an MNC has collaborated with an

Indian Public Sector with equal equity participation.

JOINT VENTURES

IVCOL Indian Vaccines Corporation Ltd, was

incorporated as joint venture with Department of
Biotechnology, IPCL and PMSV , France with three of
the organization sharing equally sharing equity capital.

FINANCIAL HIGHLIGHTS - 2006

TURNOVER of Rs.9597 against Rs.9386 crore for the

previous year.
OPERATING PROFIT of Rs. 1888 crore awith an
increase of 8% corresponding to previous year.
NET PROFIT of Rs. 1005 crore. against Rs. 786 crore in
previous year.
EPS for the year was Rs. 40.5
EXPORTS of goods was Rs. 1685 crore with an increase
of 3% compared to preceding year.

IMPORT PROCEDURE

Creation of Indent
Purchase Requisition
Request for Proposition
Selection of tender
Purchase Order
Accounting of the goods received.
Preparation of GRN and IV

INCOTERMS- INTERNATIONAL
COMMERCIAL TERMS
Knowledge of INCOTERMS is
necessary to decide the price basis of
the import.
It is set of terms made by the
International Chamber of Commerce
(ICC)
It is divided into different groups
E- Ex- Works

F- FCA Free Carrier

FAS Free Alongside Ship
FOB Free on Board
C- CFR Cost and Freight
CIF Cost, Insurance and Freight
CPT Cost Paid To
CIP Carriage and Insurance Paid To

D- DAF Delivered at Frontier

DES Delivered Ex Ship
DEQ Delivered Ex Quay
DDU Delivered Duty Unpaid
DDU Delivered Duty Paid

FILE STUDY OF IMPORT OF

CARBON BLACK

Look at the procedure and documents

involved.
Date wise
Quotation from XYW Ent, Ltd.
Proposal for procurement of carbon
black.
Purchase order
Interoffice memo- for release of
payment.

OGL by GM
Request for making Advance Payment
Payment by TT to Mgr. SBI to M/S XYZ Ent.
Ltd.
Letter by SBI stating it has debited IPCL account
Bill of Entry
Goods Receipt Note
Invoice Verification document.

PAYMENT TERMS

Letter of Credit
Cash against document through bank
Cash against documents received by
signatory/ directly. Direct payment
through TT/ DD also

SAP ACCOUNTING
In SAP Accounting module all the
accounts are coded generally of 7
digits.
The following is the procedure for the
accounting entries for import
when load port is prepared following
entry is passed
Purchases
Dr.
To, Provisional Liability

Entry for expense

Expense a/c
Dr.
To, Supplier of Services

When expenses are paid following

entry is passed
Supplier of Services
Dr.
To, Bank

At the end of credit period allowed by

vendor the prov. Liability a/c is
transeferred to vendor a/c which is
finally settled by making payment
Provisional Liability
Dr.
To, Vendor a/c
Vendor a/c
To, Bank

Dr.