Prepared by : XYZ Roll no. : 113 Enrolment no.

: xxxxxxxxxxxx Guided by : ABC

 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 complex commissioned 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 opposed to additions to or refurbishment of an existing facility.

 Situated on the northwest coast of India, the integrated refinerycum-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.

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.

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.

Budgeting in RIL

CAPITAL BUDGETING

REVENUE BUDGETING

Capital Expenditure Operation Expenditure

 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.

Capital Budget is prepare by different discounting technique

like; 1) 2) 3) Payback Net Present Value Internal Rate Of Return

Categories Of Capital Budget

CAPEX

STAND ALONE ASSETS

FCO

FIXED BED CATLYST

ADMIN ASSETS

IT ASSETS

OTHER ASSETS

WBS

FUND CENTER

FUND CENTER

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.

 Categories Of Revenue Budget:

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.

Conclusion
RIL uses the two types of Budgeting methods CAPEX and OPEX. It is helpful to understand the capital expenditure and revenue expenditure. RIL gets good returns on their long term investment by using different Budgeting technique. RIL uses three types of different criteria for evaluation of cash inflow from long term investment. RIL helps to improve shareholders wealth maximization by investing their money into those assets which gives good returns to the company.

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.

Websites:
www. Ril.com

http://www.studyfinance.com http://www.wikipedia.com

Magazines:
Business world

RIL Annual Report Company Periodicals