Sunday, 13 January 2019

Overview of Finance & Accounts Department of RDCIS

Overview of Finance & Accounts Department
The Finance & Accounts Department plays a pivotal role in any organization, and is generally considered to be the nerve center of all activities, as all activities have a commercial implication. The activities of the department can be broadly classified into the following categories:

1.      Finance functions - dealing with the sourcing, control of funds and finances as   well as concurrence of proposals
2.      Accounts function - dealing with the preparation of financial statements.
3.      Legal function - compliance and adherence of various laws.
4.      Audit functions - compliance with company rules & regulations.
5.      MIS functions - providing the management with data for decision making.

The major function performed by this department is the arrangement of the working capital for the RDCIS, MTI, SSO, CET, which are the units of SAIL located in Ranchi itself. So the cash division of the RDCIS looks after the working capital requirements of the other three units also. Working capital management means the arrangement of funds and the proper utilization of the funds. Here at RDCIS there is no permanent source of revenue generation. The research activities carried on here results in benefits generation but not in the revenue generation. However the technologies once marketed and the testing and lab facilities rendered here lead to a minimal revenue generation for the organization. Thus the revenue generation here at RDCIS takes place by the following:-
·          As a fee charged for rendering testing facilities at the chemical and the pollution lab
·          Transfer of technical know-how by signing memorandum of understanding with institutes like IITs and IISC.
·          Sale proceeds from scrap.

RDCIS is dependent fully on the corporate office for its funds The corporate office on the receipt of the requirement sheet from the cash section of the RDCIS allocates the amount it finds suitable to the cash credit account of the RDCIS, The cash credit account for the organization is maintained at the SBI, Doranda .The amount allocated by the corporate office is not credited at one go but is credited according to the requirement schedule provided. The general procedure followed is:-
Ever month the requirements for the funds is collected by the cash section from all the four units of the SAIL located here at Ranchi. The requirement form has a specific format and the requirement are mentioned under the following headings:

EMPLOYEE RELATED: - for eg: Salary and wages
STATUTORY PAYMENTS for eg: income tax and PF payments
ADVANCES (Employee related) eg : vehicles, furniture)
OTHER PAYMENTS for eg capital payments, supplier bills, telephone bills.
All the information collected is the consolidated and sent to the corporate office in the specified formats every fortnight.

The corporate office allocates the funds which may be either equal or less than the requirements posed by the department and the sends a copy of the allocations to the bank in which the RDCIS holds its cash credit account so that the part of the monitoring of the utilization of the allocated funds can be done both by the organization itself and also by the bank.

Once the allocated funds are received by the cash department, it is also responsible to give time to time regarding the utilization of the allocated funds to the bank.In case it exceeds the allocated amount then for such an action the prior approval from an competent authority is required.

Monitoring of the funds is also done by the cash department. Data regarding the payments made till date and the bills pending is sent to the corporate office.For this purpose an utilization certificate is prepared and the operation remittal form is also duly filed by the department which gives detais about the payments made on a datewise basis.Using the above given inputs and utilization report is the prepared which has the following headings :-

LOCAL COLLECTIONS – (C ) The net funds utilization is = [A+B- C]
The cash section is also entitled with responsibility of the preparation of the cash budget at the beginning of the financial year. The budget is prepared on the basis of the past records.

Distribution of the budget circular among the various departments of RDCIS.
A budget circular is an order that defines the formats and the outlays in which the various departments need to submit their planned outlay or the capital expenditure for the financial year.
It clearly mentions the date schedules of the submission of the budget plan by each individual department.
It mentions the corporate plan whitin whose guideline the outlay needes to be prepared.
The time overrun of the projects and the stipulated time of completion of the project need to be clearly mentioned stating the reason for the deviations.
The number of projects proposed to be sanctioned in the remainig part of the financial year as per the ongoing annual plan and the corporate plan also need to be mentioned.
 Details of the AMR schemes both sanctioned and unsanctioned is ought to be given separately as per the annexure mentioned.
In case of the completed projects the proposed outlay shall be restricted based on realistic assessment of actual liability.
The convertibility rates for Indian currencies into foreign currencies is also mentioned clearly.
Description of the formats is given differentiating the projects on the basis of outlay involved in it.
For ex: the projects costing less than 2 crore are given as per the annexures 1 where as as those wit planned expenditure greater than 2 crore are given as per the annexure 2 and 3.
Ø    Submission of the statements of capital expenditure by each individual department as per the formats and schedule mentioned in the budget circular.
Ø    Consolidation of the statements submitted by the finance department as per the format mentioned in the ongoing scheme (11th five year plan).
Ø    Submission of the draft budget proposals in the prescribed formats (volume 1 and 2).
Ø    Preparation of statement and consolidation at the corporate office.
Ø    Discussion with the Bhilai and Rourkela steel plants by corporate office.
Ø    Discussion with RMD, Bokaro, Durgapur, Iisco, Salem, Asp, Visl, co and Melsteel plants by corporate office.
Ø    Submission of final budget to corporate office in (floppy and hard copy).
Ø    Submission of the budget for the approval of the board of directors.
Ø    Submission of the budget proposal to the ministry of steel.
Ø    Discussion with the ministry of steel if required.
Ø    Submission to ministry of steel of final budget proposalfor the submission to the planning commission.
Ø    Reporting and monitoring of the accepted budget plan by the finance department of the RDCIS.

The payments made here at the Paybill section are of two types one are the employee related and the other type of payment are the non employee related payments which are made to the suppliers
As decided by the Government of INDIA and the board of directors of SAIL
The employee related payments made are
The basic salary
The dearness allowance.
Incentive bonus
Yearly profit sharing
The retirement benefits ,leave encashment, gratuity

Deductions and the voluntary recoveries are calculated and deducted from the salary of the employees and filed with the respective departments.


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