PREFACE

Professional study is incomplete without the practical

knowledge. Now a day’s theory without practical is of little
use. No doubt theory provides the fundamental stone for
the guidance of practice but practice examines the element
of truth lying in the theory. Therefore a stand co-ordination
of theory and practice is very essential to make MMS
perfect. As a student of Business Management, we were
required to undergo 8 (Eight) weeks practical training in
any organization of repute connected with Animation
Education Industry. We were required to work on some
specific research project and work assigned by the
organization.
I completed this practical training at “Ace Pipeline
Contracts Pvt,Ltd” Mumbai. This project report of the work
consists of preparation of budget & estimated cashflow
statement of pipeline construction projects of the Ace
Pipeline Contracts Pvt,ltd.
Full care has been taken to make this report error free.
Last but not the least i hope this research work will helpful
for Ace Pipeline Contracts Pvt,Ltd.
[Link] Title [Link]
1 Certificate
2 Acknowledgement
3 Executive Summery
4 History Of Company
5 Hierarchy In the Company
6 Introduction
7 Details Of Work Done
8 Budgeting
9 Research Methodology
10 Methods Of making Budgeting
11 Actual Format Of Budgeting
12 Cashflow Statement
13 Methods Of Making Cashflow
Statement
14 Actual Format Of Cashflow Statement
15 Difference Between Budgeting &
Cashflow Statement
16 Advantages Of Budgeting & Cashflow
Statement
17 Recommendation
18
 ACKNOWLEDGEMENT

Apart from the efforts of me, the success of any project depends
largely on the encouragement and guidelines of many others.I
take this opportunity to express my gratitude to the people who
have been instrumental in the successful completion of this
project.

I take immense pleasure in thanking [Link] The principle

of Mumbai Institute Of Management & Research, Wadala, for
having permitted me to carry out this project work.

I would like to show my greatest appreciation to Mr. Anoop Singh

the Managing Director Of Ace Pipeline Contracts Pvt,Ltd. for
giving me an opportunity to work in this esteemed organization.

I can’t say thank you enough for tremendous support and help I
received from [Link], Industry Mentor. I feel motivated and
encouraged every time I interacted with him. Without his
encouragement and guidance this project would not have
materialized.

Lastly I would like to express my appreciation towards all the Staff

of Ace pipeline Contracts Pvt,Ltd. that I interacted with them for
sparing their valuable time and contributing towards the
completion of my project.
Executive Summery
 History Of Ace Pipeline Contracts
[Link].
Ace pipeline Contracts was established in [Link] has had its
roots in [Link] have grown over the years in our ability to
execute diverse contracts across the nation. Oil & hydrocarbon industry
provides the fuel to the growth of the nation, and they take pride in
building the critical supply chain to the wheels of the nation. Having
growth from the modest start of the execution of shutdown project, they
are transitioning towards the EPC projects and hope to take our values to
the world.

Mission Of Ace pipeline Contracts Pvt.

Ltd.

They are a Construction and Engineering company with a focus on the

hydrocarbon industry, we specialize in laying of cross country pipelines,
with a core competence in area such as pipeline engineering, hydro
testing ,pre-commissioning of the pipeline system, laying pipelines by
trenchless technologies and installation of cathodic protection systems of
pipeline.

Vision Of Ace pipeline Contracts [Link].

They invision ourselves as a leading provider of engineering services to

the hydrocarbon pipeline infrastructer encompassing
design,execution,preservation and O&M with projects across the [Link]
shall be their endeavor to blend technological advances with the benefit
of loe labour cost to provide our customers with world class solutions at
affordable prices.
ETHICS followed by company for its success are:

 To work as a dedicated cohesive

organization.

 Be the best employer in its business.

 Committed to building and furthering a

reputation of reliability in all its dealing, both on
quality and on their ability to complete the
project schedule.

 Building long lasting relationships with

Clients.

 Ethical dealings across all our business.

Projectsto be Carried out By Ace

pipeline Contracts [Link].

Haldia Petrochemical Ltd.

Reliance Industries Ltd.

Oil & Natural gas Corporation

Oil India Ltd.

 Guajrat State Petronet Ltd.

Bharat Petroleum Corporation Ltd.

 Indian Oil Corporation Ltd

Hindustan Petroleum Corporation Ltd.

Mumbai Port Trust

GAIL Ltd & many more.

QUALITY POLICY

Ace Group Of Companies

Ace Pipeline Contracts [Link].

Ace Energy Infrastructure [Link].

Committed to

• Maintain its position as a leader in pipeline

construction.

• Continual improvement in quality

performance and set targets.
 • Assure customer satisfaction and compliance
to their stated and implied needs.

• Provide necessary training to employees .

Its services are offered all over INDIA and with some
of the reputed clients like Hindustan Petroleum
Corporation Ltd, ONGC, Bharat petroleum
Corporation Ltd., Reliance industries ltd, etc.
ACE’s quality Objectives

[Link] build the corporate image of ACE as one of the

best pipeline project execution organization
through continual improvement and adherence to
quality management system as per ISO 9001:2008
[Link] improves its turnover through quality services
in the area of engineering, procurement,
Costruction and project management by executing
projects within time schedules and budget
estimates.
[Link] adopt Continual review and improvement as a
way of life by improving expertise and upgrading
competence of its staff through motivation and/or
training.
[Link] establish goodwill for ACE with improved
customer satisfaction and fulfilling customer
requirements through data analysis, appropriate
feedback and feed forward reports.
[Link] maintain rejection/defects levels of services
provided to a bear minimum level
[Link] carry out human resources planning on short
term and long term basis so as to ensure optimum
resources utilization.
[Link] conserve natural resources while
implementing the projects.
 Hierarchy Of The company:
Managing Directors:[Link] Singh
Vice President:[Link] Singh
[Link] Singh
[Link]
C.A(Finance Advisor):-[Link] Tansalia.
General Manager:[Link]
Finance Manager:-[Link]
Account Head:[Link]
Purchase Head:[Link]
[Link]:[Link]
 Introduction
Budgeting
Budgeting meaning of budgeting in simple words is estimation or
making forcasting about future expense which company have to
incurred for execution of project activities.
Budget of any project will include all the expenses relate to the
project,so while making budgeting all the small expense also have
to be consider.

DOCUMENT REQUIRES FOR MAKING THE BUDGET

For making budget of any pipeline project first off all one should go
through the tender copy

TENDER COPY:-It is a document which gives all the details

about project, the terms & condition of the [Link] includes main
things like:-

Project Period:-It gives the details about within what time all
mechanical as well as the commissioning part of the pipeline
should be completed.

Scope Of Work (SOW):-It gives the details about what exactly

the task have to do under main heads
Eg:-
Topographical survey:
 Pipeline route study including locating the centre line of
pipeline alignment on the ground.
 Soil investigation.
 Reserved forests, Mining sites, Religious Places.
  How many crossing are there on the path of the pipeline route
& on that basis what angle should keep for making horizontal
directional drilling.
 How many power & telephone poles are there in between the
pipeline route.
 Corrossion Survey which includes chemical analysis of soil
investigation.
Scope Of Rate (SOR):-It gives the details about estimated cost for
executing all the activities related to the project.
Scope Of Quantity(SOQ):-It gives details about quantity of material
required.

Eg.
how much quantity of casing pipes of different diameter will be
required.
Payment Terms:-It gives the details about the payment terms like
when the owner will make the payment, which further depends
upon the percentage of completion of work.
Eg:-
Piping Material:-
A) 90% Of item rate will be paid on receipt of all material at site.
B) 10% on completion of testing, insulation, commissioning.
Civil Work:-
A)75% till completion of all work
B)25% on acceptance of completion of entire job.
Structural Steel:-
A)90% of item rate will be on receipt of all material at site
B)10% on completion of testing, insulation, commissioning
Details about liquidity damage:-it gives the details about how much
percentage of contract value as LD contractor have to pay for not
completing the project in time.
Details about Bank Garauntee :-It gives the details about how
much percentage of total project cost have to be kept aside in the
bank in the favour of contractee.
Test to be carried out:-It gives the details about which different test
the contractor have to be carried out while execution of the project
Eg :-

 Non-destructive test(NDT)
 Electronic Gauge pigging(EGP)

 Hydrostatic test.

 Horizontal Directional Drilling(HDD)

Pipeline details:-It gives the details about pipeline
Eg:-
How much will be the length of pipelines.
What are diameter pipes have to used for different pipelines.

All above mention details are important from budgeting point of

view.
CHAPTER-2

Work Done On Budgeting & preparation Of estimated cash flow

statement Of HINDUSTAN PETROLEUM CORPORATION
LIMITED Project.

Details of the projects:-

HPCL is planning to construct pipeline for white oil terminal & LPG
terminal, in which all white oil products except mineral turpentine
oil(MTO) & Hexane which will be received through cross country
pipeline from additional tankage package(ATP)to white oil
[Link] will be received through cross country pipeline from
refinery to new white oil terminal & hexane will be received by tank
trucks & LPG facility will be capable of handling LPG ,Auto LPG &
Propylene,& major quantity of LPG will be supplied to GAIL
terminal.

Following products will be handled at white oil terminal

 Mineral Turpentine Oil (MTO)

 Aviation Turbine Fuel (ATF)

 Naphtha

 Super kerosene Oil (SKO)

 High Speed Diesel(HSD)

 Motor Spirit(MS)
  Soft Super kerosene Oil (Soft SKO)

Following Products will be handled at LPG terminal

 Liquefied Petroleum Gas(LPG)

 Auto Liquefied Petroleum Gas(Auto LPG)

 Propylene

Details Of pipeline
[Link] PIPELINE NAME UNDERGROUND ABOVEGROUND TOTAL
PILELINE PIPELINE LENGTH
LENGTH(Mtrs.) LENGTH(Mtrs.) (Mtrs.)
WHITE OIL TERMINAL PIPELINE DETAILS
1 14”FIRE WATER 903.16 460 1363.16
PIPELINE
2 10”ATF 903.16 749.22 1652.38
PIPELINE
3 14”NAPHTHA 903.16 749.22 1652.38
PIPELINE
4 16”MS PIPELINE 903.16 749.22 1652.38

5 16”HSD 903.16 749.22 1652.38

PIPELINE
6 16”SKO/ATF 903.16 749.22 1652.38
PIPELINE
7 24”SKO/HSD 903.16 749.22 1652.38
PIPELINE
8 12”SSKO 903.16 153.37 1056.53
PIPELINE
9 4”MTO PIPELINE 3337.89 288.11 3626

10 24”COMMON 3337.89 2712.16 6050.05

 PIGGABLE
WHITE OIL
PIPELINE
LPG TERMINAL PIPELINE DETAILS
1 12”LPG GAIL 692.49 - 692.49
PIPELINE
2 6”PROPYLENE 3337.89 800.28 4138.17
PIPELINE
3 6”AUTO LPG 3337.89 800.28 4138.17
PIPELINE
4 12”LPG 692.49 - 692.49
PIPELINE

Project Duration
[Link] Terminals Details Duration(Months)
1 White Oil Terminal 10
2 LPG Terminal 8

Project Cost:-21.5 Cr.

Payment Terms:
 Piping Material:-

A) 90% Of item rate will be paid on receipt of all material at site.

B) 10% on completion of testing, insulation, commissioning.

 Civil Work:-
A)75% till completion of all work
B)25% on acceptance of completion of entire job.
 Structural Steel:-
 A)90% of item rate will be on receipt of all material at site
B)10% on completion of testing, insulation, commissioning

 For Erection & laying Of Pipeline

For piping material
A)75% of item rate will be on fabrication & testing
B) 25% after completion of entire job.

 Topographical Survey & Soil investigation

A) 75% of item rate on completion of specified job
B) 25% after completion of entire job.

Test to be carried out during the execution of the project

 Non Destructive Test (NDT).

 Cathodic Protection System (CPS).

 Horizontal Directional Boring (HDB).

 Soil Investigation test.

 Hydrostatic test.

 Geotechnical Survey.
 Ace pipeline Contracts [Link] will have to pay 7.5 % of
project value per week as LD for not completing the project
ontime & 15 % of the project value as bank garuntee have to
keep aside.

BUDGETING

The meaning of budgeting in simple words is estimation of

expenses or making forcasting about future expense which
company have to incurred for execution of project activities.
Budget of any project will include all the expenses relate to the
project,so while making budgeting all the small expense also have
to be consider.
As Ace pipeline Contracts [Link] is basically dealing with pipeline
costruction project,so the major expenses in that area are:-

 PROCUREMENT COST

 SUBCONTRACTOR SERVISES COST

  OTHER EXPENSE

RESEARCH METHODOLOGY

Sources of DATA COLLECTION

Finance Department

Account Department
Purchase Department
HR Department
Tendor Copy
 Information Collected From Employees

Procedure for making the budgeting of project

Following Steps individual should follow to make the budget of any
project.
[Link] through the tender copy & understand the details about the
project.
[Link] upon scope of work analyse the requirement of
material for the execution of the project,different test to be carried
out during the execution of the project.
[Link] the help of Board of Director deside whether to give any
part of the project to be completed to the sub-contractors.
[Link] the different activity to be carried out & based on that
make proper analysis of requirement of labour,equipment,What will
be the Mobilisation cost & many more.
The standard Format of Budgeting of HPCL project

Procedure to find out the budget of procurement

1)First off all go through SOQ in the tender copy as well as through
the drawings & checked the required numbers of different material.
2)By concerning with the purchase department Cheque the
availability of the different vendors in the market for any particular
item with their rates & depending upon rate & their delivery date
finalize the vendor ,likewise follow the same pocedure for all the
material & depending upon the requirement of quantity make the
budget of the procurement expense.

Procedure to find out budget of Subcontractor Services

1) With the help of Board of directors first off all decide which part
of the project have to be given to the sub-contractor for execution
on contractor’s behalf.
2)Go through the tender copy to make bench marking of the
length of pipeline where subcontractor services have to be carried
out.
3)cheque the availability of different vendors for the execution of
the services & analyse their different rates to carry out those
services.
3)Analyze what will be requirement of different machinery required
to carried out that activity
Eg: For making the budget of Non destructive test (NDT) Xtechs.
Pvt. Ltd have following rates.
1)Rs.10/-per inch of exposed film using 3”wide film
2)Rs.11/-per inch of exposed film using 4”wide film
3)Rs.70/-per exposure for joints 2 inch & below
4)Rs1200/-per day unit charge for X-ray tube & Generator.
5)Service Tax @ 10.3 %

Estimated Cost of NDT

For carrying
out NDT
through X-ray

Diameter of length of per joint

pipeline pipeline(Mtrs.) [Link] joints cost Total cost

14" 3015.54 251 540 135699

10" 1652.38 138 480 66095
16" 4957.14 413 600 247857
24" 7702.43 642 900 577682
12" 1749.02 146 600 87451
4" 3626 302 300 90650
6" 8276.34 690 375 258636
sub
total 1464070
Gamma -rays

Diameter of length of per joint

pipeline pipeline [Link] joints cost Total cost

14" 3015.54 251 400 100518

10" 1652.38 138 450 61964
16" 4957.14 413 600 247857
24" 7702.43 642 900 577682
12" 1749.02 146 480 69961
4" 3626 302 225 67988
6" 8276.34 690 270 186218
sub
total 1312187
machinery
cost months
1200*30 8 288000
Mobilization &
Demobilization 50000
Subtotal 3114258
Service
tax(10.3%) 320768.556
Total
Cost 3435026.381

For making the budget of Cathodic Protection Services.

First off all we have to find out requirement of different material to
carried out test
Sr. No. Item Description
1 CPPSM
2 MMC Anode Bed
3 Anode Junction Box
4 Cathode Junction Box
5 1C*35 sq mm cable
6 1C*4 sq mm cable
7 3C*6Sq mm cable
8 Reference cell
9 Computerized Test Station Unit
10 CTSU reader
11 Pin Brazing Consumables
12 Any Other material & consumable required
for the completion of work
Then individual have to see the availability of the subcontractors
available to carried out that activity.

Sr. No. Pipeline Details Length Of Cost Per Total Cost

The Km.
Pipeline
White Oil terminal
1 14" fire water
P/L 1.36316 51000 69521

2 10"ATF
52221 86289
1.65238
3 14" NAPHTHA
51000 84271
1.65238
4 16"MS
1.65238 49000 80967
5 16"HSD
1.65238 49000 80967
6 16"SKO/ATF
1.65238 49000 80967
7 24"SKO/HSD 44507
26935
1.65238
8 12"SSKO 1.05653 57053
54000

9 4"MTO 3.626 217560

60000

LPG terminal

1 12”LPG GAIL 0.69249 54000 37394

PIPELINE
2 6”PROPYLEN
E PIPELINE 4.13817 58000 240014
3 6”AUTO LPG
PIPELINE 4.13817 58000 240014
4 12”LPG 0.69249 54000 37394
 PIPELINE
Total 1519876

Likewise we can make the Budget Of different activities of the

subcontractor services.

Procedure for making budget of other expenses

For this first off all we have to see what will be the other
expenses.
A)Drawing Expense.
B)Equipment Rental Charges.
C)Labour Expense.
D)Mobilization,Demobilization expense
E)Site expenses
F)Diesel,Fuel Expense.
G)Repair & maintenance Cost
& many more

To find out the budget of other expense first off all one must have
to analyse the execution of the project activity.

Eg.
Suppose one want to find out the labour requirement then as
at the starting of the project menpower requirement will be less as
in the starting all the topographical survey & documentation work
will be carried out & after few month the requirement of the
manpower will be more as project will lead to peak.& again at the
last menpower requirement will be less as at the last almost all the
task shall been completed.
Again depending upon the monthwise execution of the pipeline
project activity the requirement of the menpower will vary.
Desig
natio
n No JUN JUL AUG SEP OCT NOV
no amt no amt no amt no amt no amt no
acco 1001 2251 2251 2651 2651
unt 1 0 2 0 2 0 2 0 2 0 2
1033 2857 2857 3881 3881
cook 2 0 6 5 6 5 7 5 7 5 6
1100
diesel dispn. 1 5000 2 0 1 6000 1 6000 1 7500 1
documentati 1300 1300 1300 1300 1300
on 1 0 1 0 1 0 1 0 1 0 1
drive 2960 4292 4292 6409
r 1 7000 3 0 5 0 5 0 7 0 7
3900 1251 1042 6550 9034
engg 2 0 6 48 5 90 3 0 4 0 5
engg, 2700 4929
ndt 1 0 3 0
1800 1800 1800 1800 1800
p&a 1 0 1 0 1 0 1 0 1 0 1
1124 2024 4424 5124 5374
fitter 1 0 2 0 4 0 5 0 5 0 4
grind 1380 2800 5583 6082 6082
er 2 0 4 0 8 2 9 0 9 0 5
opera 3750 8601 9000 1119 8800
tor 3 0 8 6 8 0 10 30 8 0 7
6000 6000 6000 6000 6000
pm 1 0 1 0 1 0 1 0 1 0 1
rigger 1001 2002 1001 1501 1501
foreman 1 0 2 0 1 0 1 0 1 0 1
safety 1200 1200 1200 1200 1200
officer 1 0 1 0 1 0 1 0 1 0 1
super 5000 3000 1180 1144 1144
visor 2 0 2 0 6 00 6 20 6 30 6
surve 5500 6978 6978 4875 4500
yor 3 0 4 0 4 0 3 0 3 0 2
welding 1170 5971 6776 7073 7173
helper 3 0 15 5 17 0 18 0 18 0 18
weld 2020 1594 1581 1684 1819
er 1 0 11 40 12 75 13 60 13 00 10
welding 1200 1200 1200 1600 1600
supervisor 1 0 1 0 1 0 1 0 1 0 1
coating 1200 1200 3200 1600
supervisor 1 0 1 0 2 0 1 0 1
coating 3000 1800 1200 2070
hepler 5 0 3 0 2 0 3 0 2
electrician
hepler 1 4000 1 4000 1 4000 1 4000 1
electr 1441 1441 1441 1641
ician 2 0 2 0 2 0 2 0 1
welding 5400 5400
engg 2 0 2 0 2
fore 5000 2500 3500
man 2 0 1 0 1 0 1
gas
cutte
r 1 4500 1 4500 1 4500 1 5300 1
helpe 6111 9762 7246 7246
r 15 6 19 0 18 0 18 0 17
hydra
For making the equipment rental expense following steps must have to be f

1)first of all analyse the requirement of the equipment for the executi

2)Cheque the availability of required equipment for the execution of the pro

3)find out what are the rental charges of equipment

For making the Site expense following steps should be taken:-

1)Analyse what will be the site expense like mess,office setup cost,campus

2)have to analyse what different activity have to be performed under the ma

3)Depending upon the menpower how much will be the expense under diffe
Site Expense
A. Mess
[Link] Head Qty. Rate Month Amt
1 Premises 2 4000 10 80000
2 Elect.& water 2000 10 35000
3 Fridge 2 10000 20000
4 Chairs 42 300 12600
5 Dinning Table 8 8000 64000
6 Kitchen Utensils 20000
7 LPG gas 10 110000
8 Grossary 10 500000
9 Misc. 40000

Sub Total 881600

B. Campus Cost
[Link] Head Qty. Rate Month Amt
1 Store room 2 40000 8 640000
2 Elect.& water 25000 10 250000
3 Illumination 100000
4 Fencing 150000

114000
Sub Total 0

C. Office Setup
[Link] Head Qty. Rate Month Amt
Building Hire
1 Charges 1 40000 10 400000
2 Electricity 10000 10 100000
3 Chairs 15 900 13500
4 Drinking Water 4000 10 40000
5 Table 15 2000 30000
6 Filing Racks 20 3000 60000
7 Computers 12 30000 360000
8 Printers 3 5000 15000
9 Fax machines 1 6000 6000
10 AC 4 10000 40000
11 Fans 5 1000 5000
12 Tubelights 10 350 3500
13 Stationeries 60000
14 Misc. 50000

118300
Sub Total 0

320460
Total Site Expenses 0
For making the mobilization expense following steps should be taken:-

[Link] Cost Per

[Link] Head trip trip Heads Amt

1 Senior Staff 10 15000 3 450000

2 Engg. 2 2000 15 60000
3 staff 2 1500 120 360000
4 Others 4 3000 10 120000

Sub Total 990000

Likewise we can make the budget of all the other expenses.

All this was about the direct expenses which company have to incurred
individual have to consider while making the budget, the details are as follow

 Taxes

 Works Contract Tax

 Service Tax on own contract

 Have to make the provision for the liquidity damage(LD)

By knowing all the estimated expense for different activities of the project on
CASHFLOW STATEMENT

In simple words Cash means Money,& there will be either cash inflow or cas
In project Cash inflow means the receipt of bills from the owner & cash ou
incurred for execution of project.

Cash flow statement includes following details:-

Cash inflow

 Openinig Balance

 Internal Funds

 Loan details

 Sales receipts

Cash Outflow

 Procurement Cost

 Subcontractor Services Cost

 Other expenses

 Loan payment

 Interest on loan payment

 While making the cash flow statement individual must have the proper
activities of project.

Eg.
For making the cash flow statement of inflows
first of all individual have to see what are the terms & condition of the payme
that when contractor will receive the bills.
And based on that only individual can get idea about the monthly earning of
Again depending upon the loan terms & conditions when we will
the loan term month wise.

For making the cash flow statement of cash outflow.

individual must have the proper analysis of monthwise execution of dif

Eg.
For procurement individual must have to make the preplanning ab
with the purchase department.

For the Subcontractor services expense & for other expenses indiv
& have to make analysis which activity will carry out in which month &
monthly expenses of that activity.

by concerning with the fund manager the distribution of different loa

monthwise.
Difference Between Budget & Cashflow statement

 Budget gives the details about the overall expense of the project f

 Cash flow statement gives the details about the monthwise expen

 In budgeting individual only consider expenses (Cash outflow).

 In Cashflow statement individual consider both inflow as well as th

Advantages Of budgeting & Cashflow statement

 By making the budget of project individual can get idea about the

 Depending upon the availability of internal funds & estimated bu

advance.

 By making the budget individual can make the margin of the profit

 Through the cashflow statement individual get idea about monthw

Advantages of maintaining the actual cash flow statement while execut

 The company will get idea about the running expense of the proje

 The company can keep the track weather the estimated cost flow
also get idea about the efficiency level of the project.
 Recommendations

There should be contribution of every department.

 For making of exact cash flow statement there.
 Recommendations

There should be contribution of every department.

 For making of exact cash flow statement there.