An Internship Report

On

Overall Activities of

Meghna Petroleum Limited

Internship Report On

1

Overall Activities of

Meghna Petroleum Limited.

(Internship report is Submitted For the Partial Fulfillment of the Degree of Bachelor of Business of

Administration with a Major in Finance)

Submitted To:Mr. A.H.M Shamsud Duha

Managing DirectorPADMA Oil Company Limited

Strand Road, SadarghatChittagong.

Prepared ByName: Ireen Akter Mily

Roll No. 9950268Registration No. 9999678

Program: BBASemester: 8th

Major in Finance

DATE OF SUBMISSION:

16-06-2014

Letter Of transmittal

Date:

ToThe Supervisor

2

NCC NeuralChittagong.

Sub: Submission of Internship report titled “Overall Activities of Meghna Petroleum Limited”.

Dear Madam

With the respect, I state the fact for your kind consideration that, I have to perform 2 month

internship program due to BBA course outline to acquire practical knowledge about the

present trend of MPL.

You will be interested to note that MPL is a subsidiary of Bangladesh Petroleum corporation

which marketing the Petroleum Oil and Lubricants. I try to focus the problems, prospects and

performances of my company in this report, with my all efforts.

May, I therefore, pray and hope that you would kindly accept my Internship report errors and

omission should be considered and oblige thereby.

Sincerely yours

Name:

( )Name: Ireen Akter MilyRoll No. 9950268Registration No. 9999678Program: BBASemester: 8th Major in Finance

Acknowledgement

At first all praise and indebt ness to the Almighty Allah, the Lord of Glory and Honor and his Friend our Prophet Mohammad (SM), for all the blessing showers upon me to make such a success.

In order to present the Internship Report to the Instructor of our department I proceeded to the

Meghna Petroleum Limited with the recommendation letter from the department. Gradually I

3

obtained the permission from the authority and started the Internship program with, Meghna

Petroleum Limited, Agrabad, Head Office, Chittagong.

I would like to offer a special thanks to my supervisor and the authority of NCC Neural.

During my internship program I attended the office regularly in the office time in order to collect

data and to observe the every day operating system of the Meghna Petroleum Limited.

It beings a part of academic study with practical implication. This study has been initiated to explore

the General activities, Account, ERL, finance, audit, HRM activities of Meghna Petroleum Limited.

In this regard, I would like thank my Managing Director, Mr. Md. Abul Khair, DGM (Operation),

Mr. Md. Alim Uddin, DGM (ER) Mr. Md. Masudur Rahman, DGM (Finance) Mr. Md. Kamrul

Hossain, AGM (Finance) Mr. Kazi Monowar Dilder, AGM (ER) Mr. Md. Akther Hossain.

At last numerous thanks to almighty Allah for pouring his blessing in every moment.

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Executive Summary

Meghna Petroleum is a subsidiary of Bangladesh Petroleum Corporation (BPC), had been serving

the nation for the last four decades through marketing of petroleum product. The aim of the company

is to earn profit through consumer satisfaction & to deliver the product at the right time, at the right

place & right quantity. MPL do not produce my product they receive the product from ERL as per

share. Meghna Petroleum Limited has sales activities in whole country divided in 4 regions. These

are (1) Chittagong region (2) Dhaka region (3) Bogra Region and (4) Khulna region.

The price of the Bulk product are set by the government, they receive a margin for it. They offer

three incentive program in a year to increase the sales. They transport their product through river,

railway, road. They do business through dealer, agent, and customer. They sells in cash, They also

credit sales army, navy, defence, PDB, Bangladesh Railway. They sells the product through pay n

slip, DD, In MPL there are 2 worker union organizations for collective bargaining with management

for different aspect for the benefit of the workers, namely- Meghna Petroleum Sramic Karmachari

Union, Registration No-B-1743 & Meghna Petroleum Sramic Union, Registration No-B- 1833.

During 2009-2010, company’s net sales of all kinds of Petroleum Products (including Lubricating

Oils) were 11.96 Lac Metric Tons of sales value of Tk. 646386.35 lac. Market share participation of

MPL was 35.23 in Fuel, LPG & Bitumen and 47.10 (7523 MT) in Lubricants (among the three oil

marketing companies). During the year the countries overall petroleum product has been increased

by 3.50 Luc M.Tons.

Table of ContentContent Page noTitle Page iCover Page iiLetter of Transmittal iii

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Acknowledge ivExecutive Summary vChapter – One1.0 Introduction 1.2 Objectives of the study: 1.3 Scope of the study 1.4 methodology of the study 1.5 Limitations of the study

1-4

Chapter – Two2.1 Meghna at a Glance 2.2 Historical Background of MPL2.3 Vision of the MPL2.4 Company philosophy 2.5 Company Objectives 2.6 Company Goals 2.7 Company Rules & Regulations

5-12

Chapter – Three3.0 Function of ERD3.1 Introduction of ERD3.2 ORGANOGRAM OF EMPLOYER RELATIONS DEPARTMENT 3.4 Practice of human Resource Management in MPL. 3.5 Sales & Marketing Department 3.6 Introduction of Marketing Department 3.7 Organogram of Marketing Department:3.8 Companies Marketing Activities:3.9 Marketing Management Process of MPL3.10 Introduction of Sales Department: 3.11 Technical Services3.12 Functions of Planning & Economics Department 3.13 Functions of Engineering Departme

13-34

Chapter – Four4.0 Operations Department4.1 Introductions of Operations Department:4.2 Organogram of Operations Dept: 4.3 Functions of Operations Department 4.4 Deport: 4.5 Introduction of Main Installation.4.6 Functions of Main Installation 4.7 Introduction of S&D4.8 Functions of Supply and Distribution Department:4.9 Introduction of Purchase Department4.10 COMPANY’S PURCHASING PROCEDURES:4.11 Section of Accounts & Finance:

35-62

Chapter – Five5.1 Problems 5.2 Recommendations 5.3 Conclusion

63-66

6

7

Chapter – OneIntroduction

1.0 Introduction

Padma Oil Limited, a subsidiary of Bangladesh Petroleum Corporation, is engaged in Procuring,

storing and marketing of Petroleum products, lubricants and greases, bitumen and Liquefied

Petroleum Gas (LPG) throughout the country. The company get the entitled to market the products

from Bangladesh Petroleum Corporation (BPC), which import finished products and crude product

8

(Subsequently convert it into finished products) as per country’s requirement. It gets the lubricants

products from British Petroleum Company plc (BP) London. The company perform its operation

through is main installation at Guptakhal, Potenga, Chittagong and 16 upcountry Depots throughout

the country, It has appointed a lot of dealers, (Filling Station), Distributors, packed point dealer’s to

market petroleum products and LPG Dealers for marketing of LPG gas throughout the country.

None of us are beyond of marketing. Without ensuring proper marketing let alone a firm, not even a

man can think of its long existence in a present competitive world. At present there are three oil

marketing companies owned by GOB engaged in marketing of petroleum, oil & lubricants (POL) in

Bangladesh. Padma Oil Limited (POL) has a long history of operation in oil sector with wide

network and distribution channel. It has also great contribution in establishing equal price for

petroleum products all over the country with proper supply. POL was offload its 30% shares, it will

require more transparency and more operational and financial efficiency,

1.2 Objectives of the study: . The other objectives are as follows,

1) To know about the managerial activities of POL.

2) To know about the marketing activities of POL.

3) To find out the market position of the POL in the oil marketing companies.

4) To know about the import process of POL.

5) To monitor the sales volume of POL in different category.

.

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1.3 Methodology of the study:

The information and the data have been collected after attending the internship program. Both

primary and secondary sources of data are being used, these sources are as follows.

Secondary sources:

Different Publications of Padma Oil.

Different Publications of BPC.

Web sites of BPC,Pol, MPL, Related ministries, divisions and departments of GOB.

1.4 Limitations of the study:

All efforts have been made to arrange all the collected data and information in the present form of

the report. The main limitations are:-

1) Lack of sufficient data & information.

2) Lack of harmonious relationship & close contract between the officials of the organization.

3) Lack of financial support.

4) The study requires experience to be fruitful but it was completely absent to me.

Despite of numerous problems with limitation & Bottlenecks, I tried my best to make the report

more information with recent data, so as to arouse high satisfaction to my respectable teacher as per

his expectation. .

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Chapter-2Overview Of the Company

11

Padma Oil Company Limited is not only the biggest but also the oldest with its antecedents stretching well back to the colonial period of British-India. Its ancestral enterprise 'Rangooon Oil Company' established petroleum business in this part of the world by the middle of the nineteenth century. Following is a synopsis of Padma Oil Company's historical background;

1.In 1871 'Rangoon Oil Company' was registered as a joint stock company in Scotland having its main business activities in Burma (Known to the British until the later years of the 19th century as Burmah, which was a province of the then British India). 2. In 1885, Rangoon Oil Company was reconstituted and reformed as Burmah Oil Company. Business of this company was then spread over other provinces of British India, including Assam and Bengal. The Company's Head office was at 191 West George Street, UK.

3. Burmah Oil Company for the first time introduced drilling equipments for exploration of Oil in Burma in the year 1888. Previously oil was being collected in Burma by hand dug well.

4. Burmah Oil Company established their 'Moheshkhal Oil Installation' at Chittagong in the year 1903.

5. In 1908, Burmah Oil Company conducted a geological survey in Chittagong.6. In 1914, Burmah Oil Company drilled a well at Sitakunda, Chittagong.7. In the year 1920, M/s Bullock Brothers, a major distributor of Burmah Oil Company established their trading office at Sadarghat, Chittagong.8. In the year 1929, Burmah Oil Company took over the office of Bullock Brothers at Sadarghat, Chittagong including 4.1 acres of land and established their own office there.9. Prior to the partition of the sub-continent in 1947, mainly two oil marketing companies namely Burmah Oil Company (BOC) and Burmah Shell Oil Storage and Distribution Company (BSOC) were operating petroleum business in the area what now comprise Bangladesh. Burmah Shell established Aviation Depot at Tejgaon Airport in the year 1948.

10. Considering the Oil Marketing situation in erstwhile East Pakistan, Burmah Shell Transferred their share to BOC and in the year 1965 a new company called 'Burmah Eastern Limited' was formed with 49 per cent share of BOC. The rest portion of the share was issued to public and private individuals of Pakistan.11. In 1977, Burmah Eastern Limited became a subsidiary of Bangladesh Petroleum Corporation.12. In the year 1985, BOC transferred its entire property in Bangladesh (including share of Burmah Eastern Limited) in favour of Bangladesh Petroleum Corporation (BPC)As per terms of the transfer of BOC, Burmah Eastern Limited was required to change its name and as such subsequently the company's name was changed as 'Padma Oil Company Limited' in the year 1988.

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Mission:

To be the leader in oil marketing industries in Bangladesh in terms of efficiency, capital adequacy, asset quality, sound management and profitability having strong liquidity.

Vision

To build an efficient, market-driven and customer-focused institution with a good corporate governance structure. Continuous improvement in our business policies, procedure and operations through Integration of technology at all levels.

To have sustained growth, broaden and improve range of products and services in all areas of Bangladesh with the aim

to add increased value to share holders' investment and offer highest possible benefit to our customers.

CORPORATE HEADQUATERS:

PADMA BHABAN, STRAND ROAD CHITTGONG – 4000,BANGLADESH

RESIDENT OFFICE: 6 PARIBAGH, DHAKA, BANGLADESH

MAIN INSTALLATION:

GUPTAKHAL, PATENGA, CHITTAGONG, BANGLADESH

YEAR OF INCORPORATION:

27 APRIL 1965

BUSINESS LINE:PROCURING, STORAGE AND MARKETING OF PETROLEUM PRODUCTS,LUBRICANTS & GREASES,BITUMEN AND LPG,MANUFACTURES & MARKETING OF AGRO CHEMICALS

LISTING STATUS: PUBLIC LIMITED COMPANY

STOCK EXCHANGE:DHAKA STOCK EXCHANGE, CHITTAGONG STOCK EXCHANGE

AUTHORIZED CAPITAL:

1000 MILLION TAKA

PAID UP CAPITAL: 661.50 MILLION TAKA

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NUMBER OF SHARES:

66.15 MILLION

NUMBER OF SHAREHOLDERS:

14,063

NUMBER OF EMPLOYEES:

993

Padma oil-Directors PanelMd. Eunusur Rahman

ChairmanChairman,Bangladesh Petroleum Corporation,BSC Bhaban,Saltgola,Ctg-4100

Mamtaz-Ala-Shakoor AhmedDirector

Joint Secretary Finance Division, Ministry of Finance, Dhaka

Md. Masud SadiqDirector

Commissioner of Custom,Custom House,Chittagong.

Begum Farzana MamtazDirector

Dy. Secretary (Operations-1).Energy & Mineral Resources Division, Ministry of Power, Energy & Mineral Resources, Dhaka

Mohammed Abdul AwwalDirector

Chairman. Bengal Shipping Lines Ltd. Chittagong

AKM Afzalur Rahman BabuDirector

Managing Director, Landmark Footwear Ltd. Baridhara, Dhaka

Ahmed Jamal Khan ChowdhuriIndependent Director

CEO Dairy Farm Project of the Consolidated Tea & Lands Co. Ltd. Dhaka

Md. Abul KhairDirector

Managing Director, Padma Oil Company Ltd. Chittagong

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Corporate ManagementMd.Abul Khair

Managing Director

Md. Kazi Ali HossainGM (Marketing)

Helal Ahmed ChowdhuryGM (Finance)

Khondakar Sarwarul AlamDGM (Chemicals)

Swapendau Sekhar GayenDGM (P&A)

Naresh Chandra DasDGM (Dhaka)

Ataur RahmanDGM-CA

Kafil Uddin Mahamud ChowdhuryDGM (Sales)

Mohiuddin AhmedDGM (Audit) & Company Secretary

Akter UdduzaDGM (Chemical Prog.Co-ord)

M. Enayet Kabir ChowdhuryDGM (Aviation)

Md.Abu Saleh IqbalDGM(Operations)

Md. Numan Ahmed TaffaderAGM(E&P)

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Major Petroleum Products of Padma Oil Company

Short Name

Product Name UnitRevised

Price(TK)

Effect From

Remarks

HSDHIGH SPEED DIESEL

OILlitter 42.71

30/11/1999

SKOSUPERIOR KEROSENE

OILLitter 43.13

29/11/1999

MS MOTOR SPRITE Litter 71.7929/11/199

9

HOBCHIGH OCTANE

BLENDING COMPOUND

Litter 74.8129/11/199

9

FO FURNACE OIL Liter 26.0029/11/199

9

JBO JUTE BATCHING OIL Liter 45.7029/11/199

9

LDO LIGHT DIESEL OIL Litter 45.7029/11/1999

Minor Petroleum Products of Padma Oil Company

Padma Lubs

Type Product Name UnitRevised

Price(TK)

Effect From

Remarks

16

Engine OilPADMA SUPER ENGIN

OIL

5 Liter Can

645.7929/11/199

9

Automative Gear Oil

AUTO GEAR OIL 90 EP/140 EP

5 Liter Can

698.6429/11/199

9

Industrial Oil

INDUSTRIAL GEAR OIL 68/100/150/220/320/460

205 Liter Drum

136.1429/11/199

9

Hydrolic OilHLP OIL

32/46/68/100/150/220

205 Liter Drum

125.4229/11/199

9

Spindle OilBOC SUPER SPINDLE

OIL ISO 10

205 Liter Drum

190.0029/11/199

9

Padma Greases

Short Name

Product Name UnitRevised

Price(TK)

Effect From

Remarks

WROG COMPOUND A/C/D/E/F/G/H

180 KG

Drum146.00

29/11/1999

Padma LPG

Short Name

Product Name UnitRevised

Price(TK)

Effect From

Remarks

LPG FILLED CYLINDERCylinde

r678.00

29/11/1999

LPG EMPTY CYLINDER01/01/197

0

Padma Bitumen

Short Name Product Name UnitRevised

Price(TK)

Effect From

Remarks

BITUMEN BITUMEN 80/100 Drum 635029/11/199

9

17

Other Petroleum Products of Padma Oil Company

Short Name

Product Name UnitRevised

Price(TK)

Effect From

Remarks

OCTANE 100/130 OCTANE 200.0029/11/199

9

MTT MINERAL TURPENTINE 48.0029/11/199

9

 

Agro Chemical Products of Padma Oil Company

Short Name

Product Name UnitRevised

Price(TK)

Effect From

Remarks

FURADAN FURADAN 5G29/11/199

9

MIPCIN MIPCIN 75WP29/11/199

9

RIPCORD 10EC29/11/1999

Company Objectives:

To maintain consumer rights.

To deliver product within specific time with good quality.

To promote employees

To motivate employees for better service

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To pay Govt. Tax, Duty, Vat etc.

To increase profit with minimization of cost.

ERD looks after the Company rules & regulations. These are

1) Maintains the office hour and attend the office just in time.

2) Enjoy leave by maintaining the company’s leave policy.

3) By getting the permission of Managing Director and need of the company, company will send the

employee for office tour and that employee will receive transport allowance & daily allowance as

per company rules.

4) If an employee has any potentiality and good quality & qualification, he will get yearly

increments.

5) If an employee are transferred by company one office to another then he or she will get transfer

benefit as per company rules.

6) Medical allowance also offered by the company for its employee himself/herself, his/her wife/

husband, children who are less than 18 years old and also parents if they stay with them.

7) As per company rules employees will get yearly two bonuses.

8) Employees should always give priority of the company interest.

9) Employee’s salary and other allowances are fixed by Government & Board of Directors.

10) Every employee should try to hard & soul for the better service to the company with sincerity,

honest, patience, experience, responsibility, dedication & concentration.

11) Employer & every employee must keep secret any kind of information of the company.

12) Employee does not have any right to involve with labor organization.

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Chapter - Three

Activities Of Padma Oil

20

Five Years Sales PerformanceFive Years Sales Performance

Quantity in M. Ton:

PRODUCT 2005-06 2006-07 2007-08 2008-09 2009-10

HOBC 45316 34167 33029 29259 31668

MS 47866 40909 38499 34054 38199

SKO 191799 166414 153851 126819 145375

HSD 855261 814442 830587 805551 910521

LDO 0 0 0 0 0

FO 87230 66432 61514 45999 36243

JBO 4914 3750 3972 3299 5052

LUBE/GR 8397 6490 8076 6823 7523

LPG/Battery Water 5094 3839 3722 2963 4003

BITUMIN 19485 17928 13022 12288 17245

TOTAL 1265362 1154371 1146272 1067055 1195829

Sales & Marketing Department:

Introduction of Marketing Department:

Marketing is very important part of an organization. Companies profitability mostly depend on the

marketing activities. So the importance of marketing is boundless.

Meghna Petroleum Limited is a marketing company. The company does not manufacture anything.

It markets there POL products tart are received from two Eastern Refinery Ltd. (ERL) and Direct

Import. MPL can not import petroleum products directly. Bangladesh Petroleum Corporation (BPC)

imports two types of petroleum products.

a) Refined Oil : Every year BPC imports 70% of total requirements of Bangladesh and

distributes by turns among the three marketing companies i.e. POL, JOCK and POCL

as per their requirement.

b) Crude Oil: The rest of the total requirements i.e. 30% is imported as crude oil by BPC

and sent to ERL for refining. After ERL distributes the products among three oil

marketing companies according to their market share.

Companies Marketing Activities :

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The Companies Marketing Activities are as follows:

1. To monitor dealers sales, receive and stock and keep them running.

2. Agent can receive product from others competitors so that we have to be aware about their

activities.

3. Visit direct customer and keep them good relation & ensure better service increase business

with them.

Organogram of Marketing Department

Padma Petroleum Ltd.Sales & Marketing Organogram

General Manager(Marketing)

DGM(Engineering)

DGM(Sales)

DGM(P & E)

DGM(Operation)

AG

M(A

gency)

AG

M(B

ogra)

AG

M(K

hulna)

AG

M(D

haka)

AG

M(C

hittagong)

AG

M(R

etail Trade)

AG

M(D

irect Business)

AG

M(T

echnical Service)

AG

M(C

hemical S

ales)

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Manager(S

ales),H/O

Manager

(Technical S

ervice)

Manager (S

ales)

Manager (S

ales)

Manager (S

ales)

Manager (S

ales)

Manager

(Sales)C

entral A/cs

23

Marketing Management Process of POL:

The marketing management process consist of analyzing marketing opportunities, selecting target

markets, developing the marketing mix and managing the marketing effort. The marketing

management process of POL is given below.

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Analyzing Market Opportunities :Marketing research and information system

Consumer MarketsOrganization Markets

Selecting target markets:Measuring and forecasting demand

Market segmentation targeting and positioning

Developing marketing mix:Designing products

Pricing productsPlacing products

Promoting products

Managing the marketing Competitors analysis and competitive

Planning, implementing and controlling Marketing programs

Marketing research of

Marketing research is the faction that links the consumer, customer and public to the marketer

through. Information are used to identify and define marketing opportunities and problems to

generate, refine and evaluate marketing actions to monitor marketing performance and to improve

understanding of the marketing process.

Research methods (a) Observational research

The research officer gathers primary data by observing the number of irrigation projects number of

ships, new industries coming up increase of vehicles, actions and situations. Observational research

is used to obtain information that consumer of POL products are unable to provide.

(b) Survey research:

Survey research is the approach best suited for gathering descriptive information. POL wants to

know about the users knowledge, attitude performance or buying behavior of petroleum products

asking them directly.

(c) Laboratory research

This method is used by POL to test the quality and quantity of the petroleum products. When the

customers complain about the quality, grades and colour variation of the POL products of MPL, this

type of research in laboratory is arranged.

Selecting the target markets:

It is impossible to satisfy all consumers in a given market, at least not all consumers in the same

way. There are too many different kinds of consumers with too many different kinds of needs. We

select four (4) steps:

1. Demand measurement and sales forecasting.

2. Market segmentation.

3. Marketing targeting and

4. Market positioning.

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Demand measurement and sales forecasting :

The total market demand for a product or a service is the total volume that would be bought by a

defined consumer group in a defined geographic are during a defined time period in a defined

marketing environment under a defined level and mix of industry marketing effort. Forecasting is the

art of estimating future demand by anticipating what buyers are likely to do under a given condition.

Market segmentation:

Market consists of buyers and differ in one or more ways. They may differ in their wants resources

and locations, buying attitudes buying practices. Any of these variables can be used to segment a

market. Market segmentation is the act of dividing a market into distant groups of buyers who might

call for separate products of marketing mixes. Its segments its total market into four regions.

They are:

1) Chittagong region

2) Dhaka region

3) Khulna region

4) Bogra region

On the other hand, MPL segments total market on the basic of business characteristics, which are as

follow:-

1) Retail trade business.

2) Reseller business

3) Direct business.

Market target:

Market segmentation reveals the market segment opportunities facing a firm. The firm now has to

evaluate the various segments and decide the number of segments. Market targeting is the act of

evaluating each market segment to enter. POL targets those who use POL products and to serve them

in a better way than other oil marketing companies.

Market Positioning:

Market Positioning is the arrangement for a product to occupy a clear distinctive and desirable place

relative to competing products in the market of target customer. POL determines positions that

distinguish its lubricating oil from competing products and that give it the greatest strategic

advantage. For example, POL is in the position to say for liberating oils “Use BP engine oils. We

have the right oil for your engine”.

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Developing the marketing mix:

The marketing mix consists of everything the firm can to do influence the demand for its products.

The many possibilities can be collected into four groups of variables known as the 4 Ps:

1) Product

2) Price

3) Place

4) Promotion

The marketing mix of POL are discussed as under:

Product:

A product is anything that can be offered to market for attention, acquisition, use or consumption

that might satisfy gnat or need. Products that are marketed include physical goods (e.g. automobiles,

books), service (e.g. hair cuts, concerts), person (e.g. Mow, Bipasha), places (e. geckoes Bazaar,

Rangamati).

Product : The product of POL

Petroleum products:

MPL markets various types of POL products. These are:

Name User

High Octane Blending components (HOBC) Motor Vehicles

Motor sprit (MS)/ Petrol Motor Vehicles

Superior Kerosene oil (SKO) Domestic Use.

High Speed Diesel (HSD) Motor Vehicles

Light Diesel Oil (LDO) Industry Railway Ship

Jute Batching Oil (JBO) Jute Mill

Furnace Oil (FO) Industry & Brick Field

Liquefied Petroleum Gas (LPG) Domestic Field use

Bitumen Road Carpeting

Lubricants Engine Oil

Battery Water

27

Price:

Pricing is very important factors.

They have different pricing for different product. Such as

1. Pricing of bulk product : Set by the BPC

2. Pricing of lube: Set by the condition of BP.

3. Element of cost considered in pricing : Cost oriented Demand oriented.

4. Demand difference pricing

5. Competition oriented.

6. Going rate pricing

7. Special pricing

Zone pricing

The basing- point system

Uniform FOB pricing

The Principle of pricing are as follows:

1. Bank charge commission

2. Insurance

3. Port duties

4. Survey fees

5. Handling commission

6. Refinery cost

7. Import duty

8. VAT

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Technical Services

Technical services department plays a vital role to market lubricating oil. Technical service Manager

experienced in technical side. All activities are performed to import lubricating oils from world

famous British petroleum. He also gives suggestion to blend base oil imported by PBC as per MPL

requirements to the two blending company i.e. SAOCL and ELBL according to formula of BP.

Lubricating oils is the most profitable product which gives the highest profit margin. Technical

Services manager also renders post sales service to the customer regarding quality and performance

of the product.

Two types of lubricants marketed by POL. These are:

i) Blended

ii) Non-Blended

1. Blended : POL directly imports BP lubricants in different packed sizes and drum sizes.

MPL imports lube in the following sizes:

Can Size – 5Ltr, 4 Ltr, 3 Ltr, 1 Ltr, Ltr.

Drum size – 210 Ltr, 209 Ltr, 208 Ltr, 205 Ltr and 200 Ltr.

2. Non Blended : In this case base oil is imported by BPC in 3 grades i.e. SN150, SN500,

SBS150 and blended in ELBL or SAOCL using additives according to BP formula and

marketed in the name of BP Brand.

Locally blended lubricating oil has different category like as

Engine Oil

Hydraulic Oil

Turbine Oil

Industrial Oil

Circulating Oil

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Complains Handling :

One of important function of sales department is to handle complains properly and efficiently.

Complains come from various sources which are as follows.

1. Maximum complains come from direct customers who directly procure from POL.

2. Sometimes retailers also complain about the quality Quantity grades color etc. of POL

product.

Complains should be handled with due care and attention to protect the goodwill of company. For

this reason MPL takes some steps to handle complains which are given below:

* Listing complains with care and attention.

* Classify the nature of complain

* Send officer to investigate the real facts

* If any complains comes from customer regarding product quality, grades, uses etc. then

advices and technical assistance are provided to them.

Functions of Planning & Economics Department

This department performs the following functions:

* Sales forecasting

* Schedule operation program

* Company’s Future demand forecasting and infrastructure development plan to meet demand.

* Long term and sustainable planning.

* Study economical and technical feasibility

* Analyze previous sales tread find out area wise weakness and plan effective strategy.

* Business diversification plans.

Generally sales forecasting is done considering the amount of crude and finished products planned

for sales and the availability of funds for making that amount of sale etc.

Operational program ensures right quantity of POL products in the right place and right time with

the bet mode of transportation. For this operational program, a nationwide

network is designed connecting all dealer’s, agents all over Bangladesh to make available the

products in all required concerns.

Once Meghna decided to start fertilizer business other than marketing POL products but due to some

constraint this business was stopped. At present MPL has an agreement with Rahim Afrooz for

marketing battery water.

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Functions of Engineering Department

Engineering department is very important department of POL as it is responsible for project planning

& implementation, preparing & reviewing the company’s budget estimation before tending etc.

Engr. Department takes measure for total safety & securities at the depots through out the country. It

follows & implements the explosive rules of 1937.

1. Capital Budget : This budget is about 20/25 crore take per year that include project like

storage tanks building, big amount of renovation, procuring office equipment etc. For capital

budget expenses required BUD-2c (cut of budget allocation).

2. Revenue Budget – Expenses for normal day to day items like stationery, salary, maintenance

etc. are revenue kinds of budget. It is about 5 crore taka per year.

SHIPPING, DUTY & CLAIMS SECTION:

Shipping : This section has been closed when Esso Company sold out their company to the

Bangladesh Government.

Duty : MPL has 27 tanks, Two type of tanks:

Duty paid tank (ERL paid the Duty)

Bonded tank for imported bulk product.

When MPL received the oil from Ship, they submit the Into Bond Bill of entry to the Custom

Authority within 15 days from the receiving time. POL will submit the Ex Bond bill of entry to the

Custom Authority when product will be dispatched and POL will pay the duty as per rules, BPC

reimburse this duty to the POL.

Duty for own import: POL import lube, additives, grease, transformer oil, meter, hose pipe, pump,

with the approval of BPC. After approval of BPC, MPL open L/C. When supplier send the shipment

document, MPL handover this document to the C&F Agent. C&F Agent completes the whole

formalities within free times. When this time extend, Custom claims demurrage to the MPL. If the

fault is from BP, BP bears the demurrage, otherwise POL bears it.

Claims: 4 types of Claims:-

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1. Claim lodged with Bangladesh Railway dispatch through tank wagon within 6 months

being dispatch.

2. Lodged with sea Custom Authority against excess payment of Customs dues with 120

days being payment.

3. Lodged with Customs, Excise & VAT Authority against excess payment of VAT within

120 days.

4. Lodged with Insurance Company against short receive of imported packed product. There

is no time limit.

SECURITY SECTION:

Security section plays a vital role in any organization. Indirectly they are the owner of the

organization. MPL has a security section with a Strong Security officer and a large number of elder

securities. But in the security section of MPL no young security.

There are various ways of wastes and theft change of POL products through the pipe line or tank. So

the security system of main installation is highly organized. They maintain of checking every person

who are entering in the area through metal detector.

MPL operates mainly three jetties:

I. Dolphin Oil Jetty (DOJ-5)

II. River Mooring (RM-5)

III. Lighter Jetty (LJ-4)

According to organogram three should be 60 safety where three are only 36 guards among them 16

are from Ansers. They do their duties through 3 shifting hours:

a) 1st shift 8am – 4pm

b) 2nd shift :4pm – 12am

c) 3rd shift; 12am – 8pm

The functions of this section are:

Bulk products delivery (registered)

Lube products delivery (reg)

LPG in & out (reg)

Bitumen in & out (reg)

All source of store item

Material gate pass

Maintain Local Store House Order (LSHO) Form

Maintain daily labor slip

Checking all the men and materials

Lubricants import handling (reg+ marine products)

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Import handling.

LPG SECTION:

POL receives LPG from only sources LPG plant Chittagong. LPG plant Chittagong bottles LPG and

MPL markets it. The LPG section is responsible for all kinds of marketing activities of LPG. LPG

section invites and makes agreement with the carrying contractors through tender. These carrying

contractors carrying out the LPG bottles/ cylinders from LPG plant to main Installation in order to

that these contractors Tk. 2.90 per cylinder as carrying charges and also distribute through out the

country. Every cylinder contains 12.5 kg’s of LPG.

WAGON SECTION:

Wagon section is a part of Bulk section. Bulk product like- HSD, FO, JBO, SKO, MS etc. send to

different rail-head depots by wagon. By this wagon a certain amount of necessary oil are send to

Railway. We provide oil in our different depots by railway wagon. Such as:

Shreemongal Depot-HSD, SKO

Rangpur Depot-SKO, HSD

Chandpur Depot- JBO.

Rangpur Gas Turbine power plant- HSD.

Wagon Filling Shed:

Before load POL product into wagon this is necessary to wash up the wagon purely. So every wagon

should discharge system under it which wagon I load POL products. This is

necessary to have different pipe line from BP Shed for Wagon Shed because for wagon and DP shed

there have parallel line and both move at a time. As a result line pressure become slowly and it will

take time to load. Some times we see that wagon loading keep stop for DP shed after shutting down

the DP shed wagon will give to load. It is very watchful task to load the wagon, because no delivery

flow meter is used to load the wagon.

ORDER & BILLING SECTION:

Order & Billing section is the payment receiving section. All payment against POL and Lube oil

from customers received here. Amount received through pay-in-slip, payment order / DD etc. There

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is no cash received. But no on account sells excepts Defense, Railway, and Port for special

consideration.

Introduction of S&D:

Supply and Distribution Department plays a vital role in case of supply and distribution of POL

products to all of the depots in Bangladesh to supply & distribution properly for every product, there

is an AGM (S &D) who supervises the timing, dispatching, agreement of rent and payment of coastal

tanker, shallow tanker, railway box wagon and tank wagon etc. S&D works as vein of human body

which helps to flow the blood between heart & cell. Without vein the blood cannot flow. Like as

vein without S &D, the POL product cannot be sold everywhere in Bangladesh.

Functions of Supply and Distribution Department :

To share out POL product from ERL and import on the basis of demand.

To provide POL product through all the depots from MI.

To help BPC to prepare import schedule.

To give coastal tanker program.

To inform JOCL and POCL about import product.

To recruit coastal tanker, shallow draft tanker, truck, etc. on contract basis by tender on

basis of company charter.

To make transit loss and deduct it from freight bill.

To prepare ERL and import received statement.

4.9 Introduction of Purchase Department:

Any kind of purchase of the MPL everything is done by this department. To maintain the purchase

department there is a manager in this department. Through different types of purchase depend on

different top level employee; every single purchase goes through the purchase department.

Depending on the price purchase can divided in to theree types These are:

1. Direct purchase by user up to Tk. 2000

2. Purchase of goods valuing below Tk. 30000

3. Purchase of goods valuing above Tk. 30000.

Types of purchase:

Local Purchase (It is done by local tender)

Foreign Purchase (It is done by International tender)

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Types of Tender:

Open Tender

Seal Tender (Only enlisted party can participate & it only done

when the value is with 30,000 Tk)

4.10 COMPANY’S PURCHASING PROCEDURES:

1 st Step:

Budget item Summary Sheet (BUD-2C):

This is applicable only for capital items and must.

2 nd Step:

Purchase Requisition (PA-07):

o Single Envelope System

o Two Envelope Systems.

The purchase Requisition (LPR: From PA-07) is an advice and authority to the purchasing Section to

make a purchase. No purchase will be made by the Purchase Section unless authorized by a properly

approved purchase requisition on from PA-07.

3 rd Step:

Quotation:

Direct procurement or Committee procurement in a very special case & approved

by MD.

UP to Tk. 30,000/- Distributed thru enlisted party.

4 th Step:

Opening for Tender (Technical):

It has finished thru Tender Committee. It is applicable for Two Envelope System only. At least 3

bidders are required to fulfill tender quorum otherwise it is proposed/noticed for re-tender but for 3rd

time tender it is not applicable to fulfill tender quorum.

5 th Step:

Evaluation of Tender :

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It has finished thru Technical evaluation Committee. It is applicable for Two Envelope System only.

At least 3 bidders are required to fulfill quorum otherwise it is proposed/noticed for re-tender but for

3rd time tender it is not applicable to fulfill tender quorum.

6 th Step:

Opening of Tender (Commercial) :

It has finished thru Tender Committee. At least 3 bidders are required to fulfill tender quorum

otherwise it is proposed/noticed for re-tender but for 3rd time tender it is not applicable to fulfill

tender quorum.

7 th Step:

Comparative Statement (PA-31) :

The Tender Committee recommends awarding the job to the lowest bidder/bidders

to the Management.

Up to Tk. 50,00,000/- must be approved by MD.

Above Tk. 50,00,000/- Up to Tk. 1,00,00,000/- must be approved by MD & as

well as by MPL Board.

Above Tk. 1,00,00,000/- must be approved by MD and as well as By MPL Board

& BPC Board.

8 th Step:

Purchase Order (PA-09) :

Finally purchase order issued to the approved lowest bidder/bidders.

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Functions of Accounts & Finance:

1. Financing the equipment personal, operational facility etc. of the oil market & office.

2. Preparing & verifying the consolidated financial statement of the centralized and

decentralized cost center unit.

3. Obtaining accounting report from all units in each months.

4. Monitor mgt information using competitor and other system & keep all sorts of

financial analysis & calculation update.

5. Carries out auditing by internal external & international auditors in order to verify

consolidated financial statement report analysis.

6. Verifies the efficiency & effectiveness of inventory control, security wastage,

supervision.

4.11 Section of Accounts & Finance:

1) Cash Section

2) Trade Accounts Receivable Section (TAR)

3) Banking & Insurance Section

4) Order & Billing Section (O&B)

5) Budget & Marketing Section

6) Accounts Payable Section

7) Stock Section

8) Ledger & Taxation Section

9) Payroll section

10) Office Service Section

11) Provident Fund Section

12) Computer Section

CASH SCTION:

This section deals with petty cash. Initially it receives Tk. 100000 as revolving fund to bear small

day-to-day cash payment. Normally this section pays conveyance bill, small amount of medical bill,

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small amount stationery bill. On the payment of accumulated amount of Tk. 50000 cash section

prepare a PCR to have the Tk. 50000 again.

In addition to this, Cash Section deals with the Main Installation (MI) sales proceed like Pay Order,

Demand Draft (DD), Pay-In-Slip etc. deposit to Bank & Prepare a monthly bank statement of deposit

instruments & give it to computer section.,

Further more when Terminal receive Pay-Order or Demand Draft through SA-02, they send a

summary sheet after making to the Bank and this section done the cross check with Invoice.

TAR SECTION:

The TAR Section prepares individual customer-wise sales data. Basically when Govt. party i.e.

Defense, PWD, Railway and PDB wants to receive product by credit. This section made the actual

figure of sales. This section also looks after the sales of Semi Govt. organization wise, Filling Station

wise, Agency points wise. Dealer wise etc. It is also known as “Customer Account”. Normally each

depot sends sales report-party wise, product wise details to TAR department & this section input the

data to party wise ledger book. This section normally does the following functions and

responsibilities:

Prepares monthly statement of A/R through SA-01.

Prepares aging analysis.

Prepares summary of Control Sheet.

Maintain each customer account.

Maintain Customer’s ledger namely GE-09 & RE-23 in

every month for every region.

Data of this section is very much essential for taking decision.

ORDERS AND BILLING SECTION:

O & B section performs the following responsibilities to protect the financial jeopardize in MPL

depending on invoices SA-01 and SA-02, which are sent by different depots to O & B section.

Record the sales for every depot with location wise, product wise, agent wise.

Prepare & Issue of Debit note & Credit note.

Prepare Freight Poll account.

O & B prepares the only monthly Journal Voucher. The Journal are-

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o JV-01- To issue with Credit Note.

o JV-02- To issue with Debit Note.

o JV-20- Record the sales.

The entire sales & stocks figure of the company confirm by the reconciling the data of TAR section

& O&B section. This section prepares the Debit note for receiving the payment & Credit note for

receiving excess payment.

BUDGET & MARKETING SECTION:

The section is responsible to prepare different type of budget. Basically every department prepare

their round the year requirements & this section compile all the requirements, transforms the

requirements into financial data & thus the transform into MPL budget.

*** Expenses Budget – Revenue Budget.

*** Project/ Establishment Budget = Capital Budget.

This section also prepare the review budget after 6 (six) month of every year.

The main objectives of this department are to:

Ensure custodianship of all company assets to verifying their physical existence.

Monitor and assets proper informational needs pertinent to company activities and

thereby facilities according procedures and achieve financial growth.

The main features of the department are:

Financing the equipment, personnel, operational facilities etc. of the oil market and

office.

Preparing and verifying consolidated financial statements of all centralized and

decentralized cost centers units.

Obtaining according reports from all units in each month.

Monitor management information using competitor and other system and keeps all

sorts of financial analysis and calculation update.

Carriers our auditing by Internal External and International Auditors in order to verify

consolidated financial statements, reports and analysis.

Verifies the efficiency and effectives of inventory control, security wastage, working

procedures, supervision, machine maintenance workers safety, advertising tools etc.

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ACCOUNTS PAYABLE SECTION:

Payment sections are made by two sections:

1. Banking Section.

2. A/P Section

The Nature of payments are-Salary, Leave Encashment & every allowance other than direct

payment. Cartage bill, Railway, CPA, BIWTA, BIWTC, Tanker Bill, Defense, Rent for Office,

Medical fee, Gas, Wasa, Electricity bill, Fitness for car, Telephone bill, Newspaper bill, Purchase of

medicine, Employees Traveling expenses, Reimbursement of Petty cash.

It is very important section of the accounts department as all mot all the payment process through

this, section makes the following payments.

Payment for purchase of ERL,

Payment for product imported to BPC

Payment to Tanker Owner.

Payment to Trolley Owner.

Control all the payment to depots, offices through out the country.

STOCK SECTION:

Stock section deals with procurement and distribution and storage amount the POL products. This

section calculates stock in hand of all the depots and MI to calculate stock positions (Monthly,

Quarterly, Yearly). It prepares product wise, depot wise region stock position in the basis of DBPSR

(Daly Bulk Product Sales & Received) it considers different types of losses, purchases and opening

stocks. Stock section prepares JV-14 for monthly product purchase with details product summary.

They also prepare the JV-16 for monthly operational loss & gain with the help of depot wise

operational data.

For preparing of product Balance Sheet the main document are:

IN-17- Summary of stock.

IN-89- Inventory entry, In & Out

IN-43- Transshipment order for Refine product.

IN-44- Other than Refine product for Transshipment

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IN-72- Product assistant (Inter Company

Transaction received by dealer)

DBPSR- Refine stock Information.

Stock Batch- Document listing summary.

Sales Batch – Sales related document.

Sales statement-From Depot.

Some Journal Vouchers are:

JV-16-Operational loss/gain

JV-13- Rebranding (Only lube)

JV-14- All purchase

JV-55- Tanker operations (Transit loss & tanker

freight bill)

JV-56- Closing stock valuation

JV-91-Opening stock

JV-12- Product own use

Loose JV-Wind fall loss/gain, Conversion loss/gain,

Retransshipment, MMSC.

LEDGERS and TAXATION SECTION:

Ledgers and Taxation section is the last section where all postings are made by this section and

output is Financial Statement. This section makes key statement of the financial activities where we

get the idea of the performance of the company. These key statements are sent to GM and BPC

according to the instructions. This section deals with the Company Taxation matters (for last ¾ years

this matter is deals by company nominated Ta consultancy firm “Huda Vasi & Company”. This

section prepares several types of statement like.

General Ledger

Trial Balance

Profit & Loss Account

Balance Sheet

Notes & subsidiary ledger (break down of the general ledger)

Income Statements

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Cash flow statements.

PAYROLL SECTION:

Payroll section is running by “Pay Master”. Payroll section deals with salaries, wages, all sorts of

bonus, overtime, utility etc. most the payment make through bank. The functions of payroll section

are as follows:

Process the salary.

Maintain bank account of Non-Management and Management Employees.

Prepare salary sheet for Management and Non-Management Employees.

Maintain Non-Management attendance record (ER maintains the Management records).

There is software which name is Foxpro. Here 4 file that is as follows:

MN-Salary main file.

MN-Loan file

M-Bank

PROVIDENT FUND SECTION:

Company provide 10% provident fund (on Basic salary) facilities for all the permanent employees.

The account of PF supervise by the section. It controls the investment, loan, final settlement under

the certain rule.

COMPUTER SECTION:

MPL has a computer section under the supervision of Accounts & Finance Department. Only the

entry & store of data is done here. Basically the data of TAR section, Banking section, Marketing

section are process & store here.

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Chapter-FourFindings and analysis

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Findings

No organization exits without weakness and problem. In POL, the following weakness exits:

1. Office environment is not that much homogeneous with the change of time.

2. The grievance handling procedure for employees of POL is not sufficient and strong

enough.

3. Existing training program for POL management and non-management are not applied at

all.

4. Seminar/workshops for field’s level officials for extensive marketing activities and

development are not satisfactory.

5. Main installation of POL with other depots are also not within safety net.

6. The sales promotional activities which are taken by POL are not sufficient and business

oriented.

7. POL cannot meet up product demand in the market in time. As for examples LP Gas and

Bitumen.

8. Product import tanker handling by POL which is governed by BPC hence POL suffers

sometimes to get proper share import handling, which is profitable for the company.

9. Transshipment of POL products from MI to different depots are not in smooth and timely

operative.

10. POL product pricing is determined by the government where profit margin is kept low, as

such POL does not get any benefit from huge turnover.

11. Appointment of middlemen (like Dealer, Agent) is not under proper procedure of POL.

12. The overall product distributor and operating system with other functions are still done

by manual.

13. The activities of Employee Relations department is not well equipped and informative.

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Recommendations:

1. Quality man power is sales department is to be increased.

2. POL should be needed to arrange for field level officials, sale oriented seminar / Workshop

for extensive marketing activities and development.

3. POL should take more promotional activities for the settlement of company.

4. POL needs total computerized and accounting software system immediately.

5. Establish of proper fire fighting materials and supporting training courses for workers to use

it properly.

6. Good carrying contractor with sufficient trucks, agent, and dealer of filling station should be

appointed by POL.

7. Employee Relations department should be more strong and timely compliance based.

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Conclusion

Petroleum is such kind of product, without which sustainable development of a country can not be

possible. Economic condition of every country of the world depends on its price ups and down.

Bangladesh is not out of them. So, this kind of important product deals by POL. The present product

market performance of the company is good in visible scene. The management of the company

always careful about his commitment. The management contents qualified, experienced & skilled

teams who are able to implement any types of decision which are fruitful for the company. I

specially give thank to all executive or departmental head for arranging such kinds of training.

Though POL deals precious & valuable product and the people of the country depends on its. It fail

means total fall in darkness. So, we all should be cautious about all kinds of devil activities.

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References:

.Different publications of Padma Oil Limited.

Prospectus and Brochures.

Previous report.

Different web publications.

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