Numaligarh Refinery Limited

To assess the financial health of Numaligarh Refinery Limited, I would analyze key financial ratios such as the current ratio, debt-to-equity ratio, and return on equity. Additionally, examining cash flow statements and income statements over the past few years would provide insights into operational efficiency and profitability trends.

In a previous role, I identified a risk in the inventory management process where discrepancies in stock levels were not being reconciled promptly. I addressed this by implementing a more frequent reconciliation schedule and introducing an automated inventory tracking system, which reduced discrepancies by 30%.

Recent changes include the introduction of the GST regime which impacts input tax credits for the oil and gas sector, and the reduction in corporate tax rates which could affect profitability. Additionally, amendments in customs duties on crude oil imports can significantly impact cost structures.

I would conduct a thorough financial analysis including NPV, IRR, and payback period calculations to evaluate the project's viability. Additionally, I would assess strategic alignment with company goals, potential risks, and market conditions.

I would develop a comprehensive compliance checklist based on current regulations, conduct regular audits, and ensure continuous training for staff on compliance requirements. Implementing a robust internal control system would also be critical.

I would prioritize compliance by exploring alternative strategies that align with business objectives without breaching tax laws. Open communication with stakeholders to find a balanced solution is key.

Managing working capital involves optimizing inventory levels, negotiating favorable terms with suppliers, and ensuring efficient accounts receivable processes. Regular monitoring of cash flow forecasts is essential to maintain liquidity.

I would start by identifying potential risks across all business functions, assess their likelihood and impact, and prioritize them based on severity. Developing a risk mitigation plan and continuously monitoring the risk environment would be crucial.

Strategies could include utilizing tax credits and incentives, optimizing the capital structure, and exploring tax-efficient investment options. Regular reviews of tax positions and compliance with transfer pricing regulations are also important.

Fluctuating crude oil prices can significantly impact the cost of goods sold and profit margins. To mitigate this, hedging strategies and long-term supply contracts can be employed to stabilize costs.

I would conduct regular audits to test the effectiveness of existing controls, recommend improvements, and ensure that all employees are trained on control procedures. Technology can also be leveraged to automate control processes.

Challenges include classification issues, input tax credit restrictions, and compliance with multiple state regulations. Addressing these requires a thorough understanding of GST laws and effective communication with tax authorities.

I would use a combination of valuation methods such as discounted cash flow analysis, comparable company analysis, and precedent transactions. Each method provides a different perspective, ensuring a comprehensive valuation.

I would begin by understanding the process flow and objectives, identify key risks and controls, and develop an audit program tailored to these elements. Continuous feedback and process improvement would be integral.

I regularly attend industry seminars, subscribe to tax journals, and participate in professional networks. Additionally, I review updates from tax authorities and engage with peers to discuss recent changes.

Key metrics include EBITDA, net profit margin, return on capital employed, and operating cash flow. These indicators provide insights into profitability, efficiency, and financial stability.