A PROJECT REPORT

ON

Inventory Management & other financial functions at VECV

AT

VE Commercial Vehicles, Pithampur, Indore

Submitted to:

Jiwaji University
Gwalior

For the partial fulfillment of the award of Master of Business Administration

(2021-23)

Submitted BY

SAKSHI SHARMA

PRESTIGE INSTITUTE OF MANAGEMENTAND RESEARCH, GWALIOR (M.P.)

i
 DECLARATION

I hereby declare that the training report entitled, Inventory Management & other
financial functions at VECV submitted by me to Prestige Institute of Management &
Research, Gwalior in fulfilment of the requirement for the award of masters of
Business Administration is a record of my original work carried out by me under the
guidance of Mr. Manish Arankar (D.G.M.), I, further declare that the work reported
in this report has not been submitted, and will not be submitted, either in part or in full,
for the award of any other degree or diploma of this University or to any other institute
or university.

Date: 08/07/2022

Place: Pithampur, Indore

SAKSHI SHARMA

ii
 Certificate

This is to certify that Mr./ MS. Student of MBA (FT) program has completed his
summer training of 7 Weeks from 23/05/2022 to 08/07/2022 and prepared this report
entitled Inventory Management & other financial functions at VECV under my
guidance.
Her performance during the training was excellent.

Date:

(Signature of Faculty Guide…………………………….)

Name of Faculty Guide: Sr. Asst. Prof. Chanda Gulati

iii
iv
 ACKNOWLEDGEMENT

I owe a great thank to people who helped and support me during preparing this project.
My deepest thank to Sr. Asst. Prof. Chanda Gulati, for guiding and correcting various
documents with attention and care. She has taken pain to go through the project and
make necessary correction as and when needed.

I would like to thank our company’s Guide Mr. Manish Arankar (D.G.M.). He gave his
precious time to help me complete summer internship Report on the topic “Inventory
Management & other financial functions at VECV”.
Furthermore, I would also like to acknowledge with much appreciation the crucial role
of the Dr. Nishant Joshi, Director of PIMR and staff of PIMR, who gave all the
permission to use all the required equipment and the necessary material to complete the
task.

Sakshi Sharma
MBA 3rd Sem.

v
 TABLE OF CONTENT

S.NO PAGE
. NO.

  COMPANY OVERVIEW  
1. HISTORY OF ORGANIZATION and OBJECTIVE OF THE QRGANIZATION  1-3
2. ORGANIZATION STRUCTURE  4-5
3. FINANCIAL PERFORMANCE  6-10
4. COMMUNITY INITIATIVE  11-15
5. PRODUCT OFFERED  16
6. WORKING CAPITAL  17-20
7. STRENGTH AND WEAKNESS OF THE ORGANIZATION  21
INTRODUCTION OF THE TOPIC  

1. i. INVENTORY MANGEMENT & OTHER FINANCIAL FUNTIONS 22-25

2. ii. SCHEDULING AGREEMENT 26-32

3. iii. FINISHED GOOD VALUATION 33-35

4. iv. EMPLOYEE PAYROLL FUNCTION 36-37

5. v. OVERHEAD CONTROLLING & BUDGETING 38

6. vi. INSURANCE 39-43

7. CONCLUSION 44
8. DAILY REPORT 45-46
9. WEEKLY REPORT 47
10. STUDENT EVALUATION CERTIFICATE BY INDUSTRY GUIDE 48
11. STUDENT EVALUATION CERTIFICATE BY FACULTY GUIDE 49-50

vi
HISTORY & OBJECTIVES OF THE ORGANIZATION

VECV JOINT VENTURE

The most successful joint venture in the Indian CV Industry
In 2008, two leading players, Volvo Group and Eicher Motors, in the commercial vehicle
business joined hands with a common vision of driving modernization in the commercial
transport business in India. Volvo Group comes with global expertise, leadership in product
technology, well-defined processes and a brand that is respected all over the world. Eicher
Motors is a leader in the Light and Medium Vehicle segment and brings to the table frugal
engineering, considerable after sales infrastructure, and cost-effective operations. Together
they complement each other and combine their strengths to deliver effective solutions that
favourably impact the eco-system. This partnership has helped modernise and evolve the
industry in India and many other countries with emerging markets.

The company includes the complete range of Eicher branded trucks and buses, Volvo buses,
exclusive distribution of Volvo Trucks in India, engine manufacturing and exports for Volvo
Group, non-automotive engines and Eicher component business. A multi-brand, multi-
division company, backed by innovative products & services, VECV today, is recognised as
an industry leader in CV industry.

VECV offers a range of ultra-modern trucks across 4.9-55T, along with a wide range of safe
and efficient buses with seating capacity of 12- 72 across light, medium and heavy- duty
applications.

The world of commercial vehicles is always on the move, be it new emerging markets, state-
of-the-art infrastructure, new policies and the aspirations of customer. And VECV is always
ahead with a continuous transformation of a holistic ecosystem which is based on
progressive thinking, advanced technology and unshakable values. This keeps VECV miles
ahead from the rest.

1
 Plants under VECV

ETB
Bhopal
Plant VEPDC
VEPT Bus Plant
Plant

 Vision
To be recognized as the industry leader driving modernization in commercial transportation in
India and the developing world.

 Mission
VECV aims to continuously improve transportation efficiency in India and developing markets,
thereby reducing logistics costs for goods and people – leading to higher enablement of
specialization in manufacturing, agriculture and services, thereby increasing the nation's
economic activity and productivity.

• We choose to do this in a sustainable manner by having the safest, most durable and
efficient products in the market.
• We care for our customers holistically by offering not just trucks and buses, but also the
best services and soft products which enable them to achieve maximum profits.
• We work with the driver community to enhance their productivity and overall working
environment
• We will partner with all stakeholders to deliver maximum uptime of the vehicles through
innovative support services
• We work with professionalism, passion, and the greatest respect for all individuals.

 Going forward
2
VECV aims to continuously improve transportation efficiency in India and the developing
markets via relevant modernization, thereby reducing logistics costs for goods and people
leading to economic growth and productivity.

VECV will strive to produce the most technologically advanced, safe and efficient trucks and
buses for our chosen markets, and provide superior uptime and best in class after-sales support to
our customers through innovative technology and network expansion

 Values
• Respect - At VECV, respecting all our stakeholders is a central belief that makes us
deliver on our promises and hold ourselves accountable to all commitments
• Fair & Ethical - We strive to conduct our business with integrity, treat everyone fairly,
and be reasonable and ethical in all our dealings.
• Excellence - We constantly challenge ourselves to innovate for the future and strive
uncompromisingly to develop new standards for exceeding customer expectations.
• Customer-Centric - At VECV, we aim to create a mutually beneficial long- term
relationship with our customers by proactively focusing on their changing needs and consistently
delivering excellent service.
• Passion - We revel in our work, demonstrate constant enthusiasm and strongly believe in
making a difference to our customers by walking the extra mile.

ORGANIZATIONAL STRUCTURE
3
Board of Directors

SIDDHARTHA LAL Managing Director - Eicher Motors Ltd., Chairman - VE

Commercial Vehicles Ltd.

JAN GURANDER Deputy CEO Volvo Group

VINOD AGGARWAL MD and CEO - VE Commercial Vehicles Ltd

JOACHIM ROSENBERG EVP and Executive Board Member, Volvo Group

Chairman of the Board, UD Trucks Corporation

PHILIPPE DIVRY SVP - Group Trucks Strategy, AB Volvo

RAUL RAI Director

LILA POONAWALLA Non-Executive Director

INDER MOHAN SINGH Independent Director

MANAGEMENT
4
VINOD AGGARWAL MD and CEO – VECV

R. S. SACHDEVA COO - Eicher Trucks and Buses

AKASH PASSEY PRESIDENT, BUS DIVISION, VECV

S S GILL EVP, International Business and Company-

Owned Retail, VECV

B SRINIVAS EVP, Purchase and Supply Chain, Product

Strategy, VECV

RAJESH MISHRA EVP and Chief Digital Officer, VECV

ADITYA K SHRIVASTAVA EVP, Manufacturing Operations, VECV

B DINAKAR EVP, Volvo Trucks India

VISHAL MATHUR SVP – LMD Trucks Business, VECV

RAMESH RAJAGOPALAN SVP – Aftermarket and Network Development,

VECV

GAGANDEEP SINGH GANDHOK SVP – HD Trucks Business, VECV

SURESH CHETTIAR SVP - Volvo Buses India

BHAGWAN K BINDIGANAVILE SVP – Strategic Planning, Brand and

Communication, VECV

GYANENDRA DASS SVP - Eicher Engineering Components

SUDEEP KUMAR DEV SVP & Chief Human Resources Officer- VECV

FINANCIAL STATEMENTS FOR THE YEAR

5
Column1 Column2 Column3 Column4 Column5 Column6

6
Balance Sheet of Eicher Motors (in Rs. Cr.) Mar 22 Mar 21 Mar 20 Mar 19 Mar 18
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 27.34 27.33 27.30 27.28 27.26
Total Share Capital 27.34 27.33 27.30 27.28 27.26
Reserves and Surplus 10,767.23 9,677.67 8,248.04 7,099.17 5,344.97
Total Reserves and Surplus 10,767.23 9,677.67 8,248.04 7,099.17 5,344.97
Total Shareholders’ Funds 10,794.57 9,705.00 8,275.34 7,126.45 5,372.23
NON-CURRENT LIABILITIES
Long Term Borrowings 0.00 0.00 0.00 0.00 0.00
Deferred Tax Liabilities [Net] 222.86 221.13 252.04 276.49 142.97
Other Long Term Liabilities 349.75 247.51 169.31 73.23 55.72
Long Term Provisions 38.50 22.56 21.20 23.00 29.12
Total Non-Current Liabilities 611.11 491.20 442.55 372.72 227.81
CURRENT LIABILITIES
Short Term Borrowings 5.98 0.00 0.00 76.38 85.98
Trade Payables 1,764.46 1,692.13 1,020.77 1,231.10 1,170.47
Other Current Liabilities 958.56 646.85 764.14 613.11 890.97
Short Term Provisions 149.87 89.73 76.21 57.65 47.21
Total Current Liabilities 2,878.87 2,428.71 1,861.12 1,978.24 2,194.63
Total Capital And Liabilities 14,284.55 12,624.91 10,579.01 9,477.41 7,794.67
ASSETS
NON-CURRENT ASSETS
Tangible Assets 2,904.81 1,888.30 2,180.76 1,688.32 1,454.76
Intangible Assets 0.00 535.06 184.83 178.98 38.66
Capital Work-In-Progress 0.00 59.78 26.75 272.14 141.89
Other Assets 0.00 0.00 3.16 3.51 3.86
Fixed Assets 2,904.81 2,733.52 2,680.92 2,320.55 1,830.49
Non-Current Investments 5,525.26 968.71 1,413.08 2,577.72 3,232.59
Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.00
Long Term Loans And Advances 0.00 0.00 0.00 0.00 0.00
Other Non-Current Assets 356.68 174.99 148.41 194.71 207.17
Total Non-Current Assets 8,786.75 3,877.22 4,242.41 5,092.98 5,270.25
CURRENT ASSETS
Current Investments 424.70 1,076.08 2,512.50 468.81 633.40
Inventories 898.37 769.13 518.05 605.34 379.23
Trade Receivables 492.87 256.18 133.97 106.61 78.02
Cash And Cash Equivalents 2,698.56 5,798.91 2,926.38 2,940.07 1,208.82

7
Short Term Loans And Advances 676.79 459.16 0.12 1.29 0.28
OtherCurrentAssets 306.51 388.23 245.58 262.31 224.67
Total Current Assets 5,497.80 8,747.69 6,336.60 4,384.43 2,524.42
Total Assets 14,284.55 12,624.91 10,579.01 9,477.41 7,794.67
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 0.00 197.98 167.35 422.79 456.72
CIF VALUE OF IMPORTS
Raw Materials 0.00 0.00 0.00 0.00 0.00
Stores, Spares And Loose Tools 0.00 0.00 0.00 0.00 0.00
Trade/Other Goods 0.00 0.00 0.00 0.00 0.00
Capital Goods 0.00 0.00 0.00 0.00 0.00
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency 0.00 337.27 392.75 430.69 369.13
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign Currency -- -- -- -- --
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods -- 682.82 709.47 343.95 213.54
Other Earnings -- -- -- -- --
BONUS DETAILS
Bonus Equity Share Capital -- -- -- -- --
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market
Value -- -- 1,345.11 2,511.63 3,185.80
Non-Current Investments Unquoted Book
Value -- -- 5.13 0.09 0.09
CURRENT INVESTMENTS
Current Investments Quoted Market Value -- 1,076.08 2,512.50 468.81 633.40
Current Investments Unquoted Book Value -- -- -- -- --

Profit & Loss Aspect on Financial Performance

8
 Mar 22 Mar 21 Mar 20 Mar 19 Mar
18
12 mths 12 mths 12 mths 12 mths 12
mths
INCOME
Revenue From Operations [Gross] 9,983.10 8,571.64 9,008.69 9,715.16 9,167.7
3
Less: Excise/Service Tax/Other Levies 0.00 0.00 0.00 0.00 254.30
Revenue From Operations [Net] 9,983.10 8,571.64 9,008.69 9,715.16 8,913.4
3
Other Operating Revenues 139.76 47.40 68.78 79.32 44.08
Total Operating Revenues 10,122.8 8,619.04 9,077.47 9,794.48 8,957.5
6 1
Other Income 454.28 452.03 615.34 508.04 332.43
Total Revenue 10,577.1 9,071.07 9,692.81 10,302.52 9,289.9
4 4
EXPENSES
Cost Of Materials Consumed 5,759.44 5,052.57 4,661.17 5,053.96 4,515.6
0
Purchase Of Stock-In Trade 226.18 204.58 214.25 207.26 154.97
Changes In Inventories Of FG,WIP And
-23.76 -154.76 110.35 -198.46 -31.47
Stock-In Trade
Employee Benefit Expenses 776.83 803.95 765.12 679.53 547.86
Finance Costs 10.25 9.20 10.86 2.99 3.04
Depreciation And Amortisation Expenses 445.52 446.03 377.92 298.93 222.34
Other Expenses 1,270.61 926.19 1,122.80 1,107.81 917.35
Total Expenses 8,465.07 7,287.76 7,262.47 7,152.02 6,329.6
9
Mar 22 Mar 21 Mar 20 Mar 19 Mar
18
12 mths 12 mths 12 mths 12 mths 12
mths
Profit/Loss Before Exceptional,
2,112.07 1,783.31 2,430.34 3,150.50 2,960.2
Extraordinary Items And Tax 5

9
Exceptional Items 0.00 0.00 0.00 -17.52 -311.98
Profit/Loss Before Tax 2,112.07 1,783.31 2,430.34 3,132.98 2,648.2
7

Tax Expenses-Continued Operations

Current Tax 525.85 492.61 548.82 941.92 877.34
Deferred Tax 0.00 -39.00 -22.30 136.62 58.02
Total Tax Expenses 525.85 453.61 526.52 1,078.54 935.36
Profit/Loss After Tax and Before
Extraordinary Items 1,586.22 1,329.70 1,903.82 2,054.44 1,712.9
1
Profit/Loss From Continuing
Operations 1,586.22 1,329.70 1,903.82 2,054.44 1,712.9
1
Profit/Loss For The Period 1,586.22 1,329.70 1,903.82 2,054.44 1,712.9
1

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 58.02 48.68 697.50 753.37 629.07
Diluted EPS (Rs.) 57.96 48.61 697.16 752.54 627.88
VALUE OF IMPORTED AND INDIGENIOUS
RAW MATERIALS
STORES, SPARES AND LOOSE TOOLS
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 0.00 0.00 682.43 299.93 272.22
Tax On Dividend 0.00 0.00 126.30 48.23 44.90
Equity Dividend Rate (%) 2,100.00 1,700.00 1,250.00 1,250.00 1,100.00

10
 COMMUNITY INITIATIVES

 Goodearth Education Foundation

Foundation set up by the Eicher Group of companies to implement its mission: "To educate
India's children with a special emphasis on the girl child starting with primary education for
the rural poor."

This mission statement emerged from the deep desire among Founder members of the company
to contribute to efforts in the field of education, which they believe is a key area for
facilitating change and progress in India.

The work of the Foundation has, as its focus, interventions for improvement in quality of
education initially in the government primary schools in rural areas.

Work started in 1996 by providing support to an initiative based in Rai Bareilly district in U.P.

11
This project covered 63 schools and has Goodearth Education Foundation benefited about
15,000 children over a period of 4 years. In 1998, further efforts were initiated in Thane district
(Maharashtra), Alwar district (Rajasthan) and Solan district (Himachal Pradesh) where in the
first phase we are covering a total of approximately 90 schools and 9,000 children.

What We Do
• Training of teachers to build their capacities and motivation
• On-going facilitation and resource support to teachers to help them improve quality of
education
• Development of appropriate teaching - learning material
• Regular interaction with parents and other community members to develop awareness
and mobilize support for education
• Regular interaction with Cluster, Block and District level education authorities need
based school improvement activities like repair and maintenance of building, etc.
• Setting up of alternative schools for children unable to access the government schools.

 Dr Shroff Charitable Eye Hospital

Vision: "To have a major impact on blindness and deafness eradication in India, especially
among poor, by building an accessible, self-sufficient model institution, that has internationally
approved performance standards and is focussed on quality, excellence and patient-care".

Founded in 1926, Dr. Shroff's Charity Eye hospital is a non-commercial, non-profit trust setup to
enable people from all walks of life and all sections of society to receive quality eye care. SCEH
has a strong 75-year old tradition of eye care, and more recently, ear, nose and throat care. It has
been known for both, its high quality as well as the compassionate treatment it has
offered its patients.

The Eicher group started providing substantial assistance to this hospital in 1996 and started to
support this institution with funds and expertise. And gradually this hospital has started to
emerge as one of the finest ophthalmic and ENT hospitals in Delhi owing to its international
standards and adherence to hygiene and quality.

SCEH's long term goal is to provide care approaching that of international standards for all
patients, while at the same time increasing the number of poor people treated at minimal or no
cost – becoming a true centre of excellence. SCEH is now following a combination of the very
successful models used by the three outstanding Indian eye hospitals with international quality
standards – L.V Prasad Eye Institute in Hyderabad, Sankara Nethralaya in Chennai, and Arvind
Eye Hospitals in Madurai. During recent years, SCEH has expanded its services. These include:
• Centre, which provides vision-enhancing devices and advice to those who are
severely visually impaired or blind and for whom little more can be done surgically or medically.
• A School Screening Programme in which teachers in schools are given the necessary
training so as to identify the students who are having some visual impairment. These students are
treated in SCEH and return to school with improved capacities.
• An aggressive Outreach Programme which connects people who are financially needy,
living in relatively distant or less accessible locations, and who are also poorly informed about
what can be done about their unnecessary blindness. The main outreach is its

12
satellite clinic in Alwar, Rajasthan. It has also introduced high quality educational conferences, a
Quality Assurance Programme, and an intensive medical and patient focused skills enhancement
agenda. Over the years, SCEH has made tremendous strides towards excellence and is currently
expanding and upgrading its services and reach.

Facilities
• Four Operating rooms with support facilities to provide aseptic facilities for surgeries
• Facilities to conduct vitreo-retina surgeries and cataract implant
• Work in progress to set up an Eye Bank to facilitate Keratoplasties
• Completely modernised Pathology Laboratory
• Work in progress for setting up Microbiology and Histopathology Laboratories
• Library with latest editions of reference books in Ophthalmology, ENT & Anaesthesia
• Reception and enquiry facilities
• A new canteen building has been built for providing quality food to patients, their
attendants, employees and visitors
• Round-the-clock Eye and ENT care
• Computerised storage of personal and other reference data of the patients in the Medical
Records Department
• In house Medical Stores to supply drugs and other medical requirement to patients and
wards
• For post-surgical recovery, there are air-conditioned rooms each with comforts such as
colour television, refrigerator and attached bathroom. Due to current advances in
Ophthalmology, most patients do not require to stay overnight. There is a Day Care recovery
room in which a patient rests for a short time after surgery
• SCEH Optical Shop: A range of spectacles and frames to choose from. Backed by quality
and workmanship you can depend on
• Department of Paediatric Ophthalmology: Specially constructed under international
specifications to keep the little ones occupied while they wait to see a doctor. State-of- the-art
Paediatric Ophthalmological equipment imported from abroad.

 EICHER SCHOOLS

1. Eicher School – Parwanoo established in 1993, Eicher School strives to provide

comprehensive quality education for developing all-round personality of the child. The
Institution, situated in a pollution free & beautiful scenic environment, seeks to develop every
student into a balanced self-reliant, socially useful, disciplined and law abiding citizen. Besides
imparting academic instruction, it strives to:
• Allow full scope for the development of student's personality so as to facilitate
specialization of the individual through suitable creative work
• Provide motivation and competitiveness so as to make the student a highly alert person to
meet the challenges of the modern world
• Provide training for leadership so as to assume a sense of responsibility towards the
school community and the country
• Promote merit and excellence in all fields of endeavour
• Provide an environment to develop a questioning spirit and scientific temper

13
Facilities
Primary School Students
• The Play and activity areas: Dollhouse for Activity based learning. Ample space both for
indoor and outdoor games
• Computer Room: Exposing children at a very young age to user friendly computers
• Reading Room: to inculcate reading habits in students
• Health: Medical Room to provide comfort and first aid to the sick children. Medical
Check-up (eye, ear and dental) conducted at regular intervals by a team of doctors Senior School
Students
• Well-equipped laboratories: Physics, Chemistry and Biology
• Computers: Two Computer labs with multimedia hardware
• Sports: Facilities for playing Volley ball, Basketball, Kabaddi, 110 m four line tracks for
athletics
• Extracurricular: Expert instructors for teaching Judo, Theatre, Music & Dance
• Hobby Classes: Arrangement for remedial and hobby classes after the school hours

2. Eicher School - Faridabad

Eicher School, Faridabad was established in 1994. This school has a profound philosophy of
raising successful and responsible citizens, rooted in Indian culture and tradition. The working
motto of the school is to tempt children to learn and not to torment them with its burden. The
endeavor of this institution is to make education a happy learning experience, which would
sensitize children to feel, observe, absorb, listen, understand and live life in a more meaningful
manner. In order to create a harmonious balance between mental & physical development of the
child, the school has large lush green playgrounds and facilities for horse riding.

The school ensures individual care to each of its students and provides a perfect home for
learning with emotional warmth, Indian ambience and modern outlook. There are special and
innovative features like home visits to every child's home so as to meet the child in that
environment and assist him in planning his daily schedule. Involvement of the parents and
transparency are the hallmark of this institution. Apart from this there are features like Fixed
Menu Schedule to meet the daily dietary requirements of children. Special classes on thinking,
observation, memory and communication skills are conducted regularly to ensure a holistic
development of the child.

Facilities
• Teaching Staff: A Student – teacher ratio of 1: 20. Frequent seminars and workshops for
honing up the skills of teaching staff. Besides subject – competence, teachers are regularly
updated and trained in communication skills, child psychology and attitude grooming
• Infrastructure: Library, Computer Lab and a swimming pool. Common, well-furnished
Science Laboratory for middle school and separate properly equipped Chemistry, Physics and
Biology Labs for senior classes
• Extracurricular: Special Science camps are held during the holidays to facilitate the
process of learning by doing. Extracurricular activities like Drama, debates, elocution,
declamation, quiz and art work enrich the teaching learning edifice. Special leadership training
camps and programmes are conducted to spot and nurture talent in students. Regular Group
Discussions are encouraged and organized on various ethical issues

14
throughout the year to sharpen not only the intellect of students but also their reasoning and
analytical skills
• Sports: Combination of Calisthenics, aerobics, yoga and meditation exercises. Indoor
games like Carrom Board, Table Tennis, Chess, and Checkers are also encouraged. Outdoor
sports facilities available in the school are Basket Ball, Badminton, Volley Ball, Table Tennis,
Throw Ball, Hockey, Cricket, Football
• Social Evolution: Developing Protocol and Etiquette; Developing leadership -> Public
speaking, Group Discussion, Prefectural Board, Functions ; Social Awareness Programme
• Education: Minimum Level of learning set for each class. Remedial classes arranged for
lacking students. Short visits to public places like banks, police stations, nature study and science
camps made a part of the school curriculum
• Health: Yearly Health Check Up for all students including dental and eye care. Pre
decided menu arranged for students. No Canteen in school in order to discourage habit of eating
junk food. Monthly menu prepared and given to parents
• Clubs Available: English Elocution, Hindi Elocution, Dramatics Club, Music Club,
Dance Club, Fine arts, Science Club, Environmental Club, Home science, Quiz. It is ensured that
over a period of time, each student goes through the three dimensions of the cultural triangle:
Dance and Music; Literary Activities; Art and Craft
• Interaction: Group and individual counselling sessions conducted for both students and
parents

3. Eicher School - Alwar

The Alwar Public School is an English Medium Co-educational Senior Secondary School, which
strives to provide comprehensive quality education to develop all facets of a child's personality.
This school was started by Shankar Lal Memorial Education Foundation, a trust created by
Eicher which now is renamed as the Goodearth Foundation. The school was started on a very
humble scale but with the combined efforts of the enlightened management and committed and
competent staff, it soon touched dizzy heights of success in all fields of excellence. The school
concentrates on imparting excellent academic education from nursery to Class XII. Focus areas
also include all round development of child's personality, encouragement of competitive spirit
and inculcation of strong value systems in the students. It strives to allow full

scope for the development of the personality so as to facilitate specialisation of the individual
through suitable creative work. Also it concentrates on providing training in leadership through
active participation and a sense of responsibility towards community and country. Built on 20
acres of land, the school has facilities such as Swimming pool and playgrounds. A large state-of-
the-art multipurpose hall is the latest addition.

Facilities
• Well-furnished library-cum-reading room equipped with over 10000 books. The school
subscribes to a wide range of newspapers and periodicals. The library follows an open shelf
system.
• School Shop: The school shop sells books & stationery items, school belt, tie, blazer/
pullover etc.
• K.G.Block: Separate K.G Block where tiny tots have a playground & lawn to themselves.
• Computer Rooms: Compulsory computer education for students from Class II onwards.
• Music & Dance Rooms: For students for training in Dance, Instrument & Music.

15
• Art/Craft Room: Provides students with ample opportunity to hone their skills.
• School Clinic: Full-time qualified nurse to attend to students. Visits by the school doctor
undertaken thrice a week. The Clinic caters to the treatment of minor ailments and injuries. All
the students are required to undergo a medical check-up by the school doctor.
• Laboratories: The school has well equipped laboratories for Biology, Physics, Chemistry,
Computer Science, Home Science and Fine Arts.
• Audio Visuals: The school uses audio-visual aids as means of educating the children.
Educative films are shown through a V.C.R and a projector.
• Swimming Pool: The school provides training to boys & girls in swimming under the
guidance of an experienced and full-time swimming coach.

Product Offered

Products

Trucks Buses Special

Applications

School Bus Skyline Ambulance

16
Heavy Duty Light & Medium
Trucks Duty Trucks
Route
B-type
Haulage Light
 Tipper Heavy D-type
Bus Chassis

Tractor Tipper
Trailer
Sub 5 Ton

Working capital

Working Capital = Current Assets - Current Liabilities

WORKING CAPITAL

CURRENT ASSETS CURRENT LIABILITIES

 Inventory
 Accounts payable
 Cash and cash
 Accrued expenses
equivalents
 Deferred revenue
 Account receivables
 Short term debt
 Prepaid expenses

Working capital, also known as net working capital (NWC), is the difference between a
company’s current assets—such as cash, accounts receivable/customers’ unpaid bills, and
inventories of raw materials and finished goods—and its current liabilities, such as accounts
payable and debts. It's a commonly used measurement to gauge the short-term health of an
organization. Working capital estimates are derived from the array of assets and liabilities on a
corporate balance sheet. By only looking at immediate debts and offsetting them with the most

17
liquid of assets, a company can better understand what sort of liquidity it has in the near future.

Working capital is also a measure of a company’s operational efficiency and short-term financial
health. If a company has substantial positive NWC, then it could have the potential to invest in
expansion and grow the company. If a company’s current assets do not exceed its current
liabilities, then it may have trouble growing or paying back creditors. It might even go bankrupt.

Working Capital @VECV

As VECV is the manufacturing company, VECV need to manage not only long-term capital for
procuring manufacturing equipment but also working capital to ensure business continuity.
Company is aware of the importance of working capital but managing consistent cash flow can
be a challenge. Challenges are like managing inventory issues, unsteady cash flow, overstocking
problems, internal risks, high operating costs, etc.

• Eicher Motors's net working capital last quarter was -₹4.388 billion.
• Eicher Motors's net working capital for fiscal years ending March 2018 to 2022 averaged
-₹8.483 billion.
• Eicher Motors's operated at median net working capital of -₹9.227 billion from fiscal
years ending March 2018 to 2022.
• Looking back at the last five years, Eicher Motors's net working capital peaked in March
2022 at -₹4.388 billion.
• Eicher Motors's net working capital hit its five-year low in March 2018 of -
₹14.142 billion.

• Eicher Motors's net working capital decreased in 2018 (-₹14.142 billion,

+51.1%) and increased in 2019 (-₹9.238 billion, -34.7%), 2020 (-₹9.227 billion,
-0.1%), 2021 (-₹5.422 billion, -41.2%) and 2022 (-₹4.388 billion, -19.1%).

Working Capital
(billion)

₹9.24 ₹9.23

₹5.42
₹4.39

1 2 3 4 5

(₹14.14)

18
 VECV manages the working capital as per the given Performa:

Particulars April'22
Bud Act
Amount Days Amount Days

A. CURRENT ASSETS
1. Inventory
Component inventory – Ind
Component inventory – Imp
Finished goods - (vehicles)
Machine Tools and spare
Spares Parts
Total (1)
2. Receivables
Domestic – Vehicles
Domestic - Open Market-Non channel
Domestic - Reimbursement a/c
Domestic – Institutional
International Business
Spares and NA Engine

19
Total (2)
3. Cash & bank balances
4. Other loans and advances
a. Employee advances
b. Excise & customs deposits
c. Excise Rebate claims - International Business
d. Supplier advances
e. Prepaid expenses
k. Sales Tax Receivable
l. Export Incentives (DBK/DEPB/MEIS)
m. TDS Receivable
n. Others (DBK/Deposits etc.)
Total (4)
C) Grand total c. assets & loans and advances (1-4)
CURRENT LIABILITIES
1.Vendor credit
Normal-Material creditors
Overdue-Material creditors
Capital
Others-(TPT/Provision-P2P/Service provider etc.)
Other current liabilities
2 Salaries / wages payable
3.Customer advances
4.MSPSD\LSPSD
5.TDS payable
6.GST /Sales Tax payable
7.Warranty provision
8.AMC Income Accrued but not due
9.Provision for MVC and Incentives
10.Provision for Long term employee benefits
11.Others & Provisions

20
D) Total Liabilities and provisions

SWOT Analysis of VECV

Strength Weakness
 Eicher Motor Limited is Zero Debt
 Falling Profit after tax and
Company.
revenue since the last two years.
 Wide presence of Royal Enfield in 1750
Indian cities having around 2000 stores.  High dependency on 350 cc
 Increasing exports and market share segment in the motor cycle
globally. No.2 in CV exports. portfolio.
 World Class manufacturing facilities.

Opportunities Threats

21
  Huge potential to increase it’s presence  Fall of domestic sales across
in the Indian states. commercial vehicles and motor
 Potential to increase exports in the mid- size cycle.
segment (250cc – 750cc)  Decrease in production due to
 To increase vehicle after sales and semi- conductor chip shortage
accessories for motorcycle. and pandemic.
 Increasing competition globally
across all products

INTRODUCTION TO THE PROJECT: -

INVENTORY MANAGEMENT & OTHER FINANCIAL FUNCTIONS

A. Purchase Order Function-

Under Broad Classification of Purchase Order:

- Type of POs:
1. One-time PO (related to expenses)
2. Scheduling Agreement (related to production).
One-Time PO
Step 1: Purchase order related to Expenses i.e. One-Time PO are generated:
Purchase Order is initiated by user on the SAP. User can either generate it on the SAP and
upload it in the workflow or share the PO with Finance Dept. via Email.
Step 2: Classification of PO:
These POs are further classified in Capex and Revenue Purchase Orders.
• Capex Purchase Order: - This PO is generated when money is invested by a company to
acquire or upgrade fixed, physical, non-consumable assets, such as a building, a computer or a
new business.
The procurement team working on a Capex project needs to focus on specifics:
- ensuring delivery satisfies the requirements,
- The budget, and
- The delivery timeline.
• Revenue POs: It is the persuasive evidence of existence of a contract between buyer and
seller for a particular material or service. It is a one-time PO

Workflow for PO approval and releasing: SAP Verification.

1. Initialization of the purchase order by the user.
2. Approved by mentioned authority. (in PO should be name of Authority signatory S1 and
S2 with prepaid by)

22
3. User s end to PO for GL and CCN verification to budget controller (Finance)
4. Finance Department receives request for release and approval of the purchase order.
5. Addresses any discrepancies.
6. Review of all the checking points i.e., verification of PO.
7. Purchase Order Release.
There is different type of POs and in order to release this POs different checker points has been
verified:

Type of POs: Codes Nature Purpose Mandatory Check Points Screenshot

s
1 CAP: 14110 Capex 1 Nature of PO
1 PUR: 14910 Capex 2 Duplicity, if any.
1 CHR 14210 Revenue For regular 3 Authority Matrix: S1
purchase off and S2 signatory
1 MNT 14600 Revenue For norms.
Maintenance 4 Tax Code (G0-
(Consumables) Domestic and I0-
1 FRT 14410 Revenue For Freight Import)
1 PDD 14810 Revenue 5 In service PO, TDS
1 PUR 14910 Revenue code should be
1 IMP 14510 Import For Import checked based on
vendor master –
C1/C2/J1/J2/I1/I2
6 TDS Code should not
be updated in
Material PO’s it is
cover by Material
Group by
– 2700/2702/5000.
7 SAC or HSN

23
Code
should be updated
in India Tab.

24
8 If PO related to service in
SAP is made with account
assignment + item category
i.e. K+D (Cost Centre +
Service), in CAPEX should
be P+D (Project with
Service)
9 If PO related to material in
SAP should be made with
account assignment
+ item category i.e., K or P
+ Material Code.
10 GL and CCN Number: In
order to identify the nature
of expense.
11 Vendor Quote and
negotiation summary.
12 In 1 MNT should be cover
by Material Indent and PO
value till 5 Lakh should be
approved by Sunil Sir
Finance.
13 NAP Approval is required
other than tooling or
Industry CAPEX PO as per
IPS authority norms for
more than 25k to 1 Lakh
approved by DM and more
than 1 lakh should
be approved by DGM

25
 and above. 14 If > 25000:
 Same as above.
 NAP Approval is
required, and for any
amount above 1 lakh
NAP approval is
required from K
Ranjeet Sir.
15 For the PO amount above
500000: Approval of Mr.
Ajay Goel Sir is required.
16 T-code for releasing is:
YMM1S083 or ME28
17 T- code for review PO
and display - ME23N

Step 3: Preparation of Gate Entry / Gate Receipt or Service Entry:

Capex and Revenue POs, both the POs can be generated for material as well as for service
orders.
For material - “Gate Entry or Gate Receipt” – A gate entry or gate receipt is generated for each
purchase order.
For services - “Service Entry” is generated
Step 4: Invoicing
Invoice is generated for each purchase order.
Step 5: Payment and recording in Books of Accounts:
After invoicing, payments are made for the respective POs and entries are recorded in the
books of accounts.

26
 Scheduling Agreement

 Workflow for PO approval and releasing:

1. Initialization of the purchase order by the user.
2. Approved by mentioned authority.
3. PCM/ Material Controller’s approval is mandatory.
4. Finance Department receives request for release and approval of the purchase order.
5. Addresses any discrepancies.
6. Review of all the checking points i.e., verification of PO.
7. Purchase Order Release.

• Workflow for releasing of a purchase order

 (For Manual PO release): PO release through T-code (YMM1S083)
 There are different release codes for different plants- 1000-MC (Mother Control)
1100/1110-SC (Scares Control) 1500-BC (Bus Control)
1501/1200-AC (Application Control) 1400-CC (Cargo Body Control) 3200- 32

 Checker Points for the verification of POs-

 Tax code (G0, GZ, ZO, I0) can be seen
 Validity end date should be 31.12.9999 for all scheduling agreement.
 HSN should be there.
 Stock type X should be there for all assembly parts codes where part codes are in Alpha
numerical format.
 There should not be stock type X in all DD PO and spares PO, there should be SV check
tick in DD PO.
 BOM should be updated in DD PO; otherwise it will not be released.
 Amortization Rate for Amortization PO can be seen.

 Debit able Rate (ZSV1) for subcontracting PO can be seen. It is required for
alphanumeric parts. It is mandatory otherwise will not be released. Doc. Type that requires this –
1LSP and 1LSD.

 Bills of material check through CS15 (Single Item)

- Details to fill as below on the SAP Window: Material: Material Code
Direct and Material BOM: to be Ticked
Valid Form: Today’s Date then to click next screen through icon mentioned at the top. Plant: Of
the same where BOM is to be viewed.
Multi-level tick should be there and then executed.
 ME2M (for material history)
- ME2M to be executed with the part code and scope of the list should be ZBEST
 Checker Points: (for ME2M)
• To ensure there is no duplicate PO, existing on the same vendor code.
• To ensure there is no one time and scheduling PO, remained open simultaneously.

27
• To ensure there is no non-amortization and Regular PO remained open at same time.
• To ensure there is no price variance for the same part at two vendor code/two different
plants.

Special Checking Points- (applicable for all)

1. PO approving authorities will be checked as per BOM.
2. In case material is not available in BOM for normal PO it should be released for 15
vehicles sets only.
3. In case of direct delivery PO if material is not available in BOM it should not be released.
4. 1LSD and 1ASD (Sub-contracting DD PO) Doc. Type – BOM and Debit able condition
(alphanumeric parts) must need.
5. In case of Spares PO material will not be in BOM.
6. In case of sub-contracting PO there should be debit able rate mentioned in SAP.
7. In case part is already available in SAP with lower rate, then PO is released with higher
rate – one level approval would be required.

8. Authority Matrix required for approval of PO

 PO wise Document Type & Series:

Types of PO 1000 1500 3220

Doc. Doc. Doc.
Series Type Series Type Series Type
Plant Po 1611XX 1LBP 1511X BLBP 325XX 32LP
X

Sub-contracting 1621XX 1LSP N 325XX 32SP

A

DD PO 1631XX 1LBD N 325XX 32LD

A

Sub-Contracting DD
PO 1641XX 1LSD NA 325XX 1SD

Tooling As As
Amortization PO 17XX Below 27XX BABP 325XX Below
Plant PO 17XX 1ABP 325XX 32AP

28
Sub-contracting 17XX 1ASP 325XX 32AB
DD PO 17XX 1ABD 325XX 32AD
Sub-contracting DD NA
PO 17XX 1ASD 325XX 32ASD

One time PO* 1491XX 1PUR 1621X BGEN 324XX 32NB

X

Import PO
One Time 1451XX 1IMP 1621X BGEN NA
X
Schedule 1841XX 1IMP NA NA
Spares 1841XX 1IMP NA NA

Spares PO & RDC 1831XX 1LPS 1831X 1LPS 1831XX 1LPS

X

 Comprehensive Table of all checking points for all type of POs:

Type of PO Doc. Type Checking Points

OE 1LBP Tax Code- G0
If supply from ETB (Pithampur) to Bhopal plant or Dewas Plant
or Vice Versa – Tax Code – GZ
To ensure there is no duplicate PO exists on the same vendor
code.
In case material is not available in BOM for normal PO it should
be released for 15 vehicles sets only. For more than 15 vehicles
Manish Sir’s approval is required.
Authority Matrix – Page 52

29
 1LSP All the mentioned points applicable.
If part is numeric – No debit able condition required
If part is alpha numeric- Debit able condition is mandatory.

1LBD All the points in 1LBP are applicable.

If part is not in BOM Po will not be released.
No Duplicate PO should be there for the same vendor
code (Two DD Pos can be there at same vendor code for two
different DD address.)
1LSD All the conditions mentioned in 1 LBD and 1LSP are applicable.
No Duplicate PO should be there for the same vendor code (Two
DD Pos can be there at same vendor code
for two different DD address.)

Amortization 1ABP Basic amount + Amt. amount (AM02) condition mandatory.

Check points are same as in 1 LBP.

1ASP Condition same as above.

Check points are same as in 1 LSP

1ASD Condition same as above.

Check points are same as in 1 LSD

1 ABD Condition same as above.

Check points are same as in 1 LBD

One Time 1PUR Check Duplicity if regular PO for the same is released or not.
If regular PO is released, one time PO cost and regular PO cost
will be compared. Total Cost Impact
is notified.
Import 1IMP (1451) If regular PO is released, one time PO cost and regular PO cost

30
 one time PO will be compared. Total Cost Impact is notified.
for import
Matrix will be seen as per the INR
Import Team approval must require – Mr. B Shivraj and Ms.
Shubhi Shukla.
Tax code – I0
1IMP Import Team approval must require – Mr. B Shivraj and Ms.
Shubhi Shukla.
Tax code – I0
1IMP Import Team approval must require – Mr. B Shivraj and Ms.
Shubhi Shukla.
Tax code – I0
OES 1LPS Tax code – G0
Rate should be matched with OE PO. (OE= OES).
If same part is approved by the higher level of
authority in OE PO, then in this case approval of one level down
authority is considered.
In case scheduling agreement is to be released for a part for which one time Po has already
been released, then first we need to block the one-time PO before releasing
scheduling agreement.

 Details given in the PO –

31
Doc. Type Details given in the PO
Material PO Company Name –
Address –
Purchase Order no –
Format no –
Page no –
Supplier Code –
Supplier PAN no. –
Suppliers Address –
Supplier GSTN –
VECV GSTN –
Plant Code –
Doc. Type –
Purchase Org. Code –
Purchase Group Code –
PO Date –
Validity start date –
Validity End Date – 31/12/9999
Our Ref. –
Your Ref. -
Quote Date –
Vendor Type –
Item Code –
Material Code –
Item Description –
Quantity –
Units –
GST amount – IGST/CGST/SGST
Basic Price –

32
Discount (if any)
HSN Code
G/L Acc. – Cost
Centre –
Payment due (in
days) – Total
value (without
taxes) Value in
words –
Signatures – (For
VECV) PO
prepared by –
Authorized
Signatory 1
Authorized
Signatory 2

33
B. Finished Goods Valuation-

 Finished Goods are the final products ready to be sold in the Market. In order to value
finished goods, we have to ascertain the Cost and NRV of the FG. FG is valued at
• Cost; or
• Net realisable value (NRV), WHICHEVER IS LESS

COST

Admin/ Inflation and

Material Body cost Freight
direct
instsco deflation
cost

NRV

Sale price of
the trucks
and busses Dealer
Discount margin FINAL NRV
allowed

C. Scrap Valuation:
Scrap is generated in the process of converting Raw Material into Finished Goods. Scrap is of
two types:
• One-time Scrap:
• Regular generated scrap:
Process that Company undertakes while dealing in Scrap:
Step 1: Invitation to Bidders: An invitation along with the photograph of the Scarp is send to
the potential customers/bidders in order to invite them to participate in the upcoming Auction
Process. Potential customers/bidders can be new customer or an old regular customer.
Step 2: Plant visit by the Bidder: After receiving invitation from the company, potential
customers/bidders can visit plant or scrap yard in order to look at the condition of the scrap and
decide whether to participate in Auction or not.

34
Step 3: Earnest Money Deposits collected by SteelEz from the Bidders: SteelEz, who acts as
an intermediary between Company and the potential customers, collects EMD from all the
customers who are participating in the Auction Process. It is like a security deposit from the
bidders (it is refundable).
Step 4: Initiation of Auction: After collecting EMD, Company initiates Auction Process.
• Company provides starting price to initiate the process.
• All the participants start bidding at various prices.
• At the end, customer who quotes highest price wins and becomes the buyer for the
respective Scrap.
Step 5: Analysis by Scrap Committee: After completing the Auction process, Scrap Committee
analyses the rate on the basis of:
• Last Rate Quoted
• Mandi Rate
• Market Condition
• Material Condition
• No. of Bidders participated
• No. of Bids received during the auction

After analysis it is identified that whether the rate quoted by the bidder is appropriate or not.
• If rate is identified to be appropriate – Further process takes place.
• If rate is identified to be inappropriate – This auction gets rejected and Re-auction is
conducted for the same Scrap.
Step 6: Agreement with the Winner of Bidding: If rate is identified to be appropriate, an
agreement is made between the Company and Buyer of the Scrap.

Content of Agreement:
• Terms and Conditions
• Tenure (Validity)
• Part Code
• Part Description
• Part UOM (Unit of Measurement)

• Rate Quoted (Finalized Rate)

• Security Deposit
Step 7: Customer Code Creation: After signing an agreement, Customer Code is created in
SAP for the buyer of the Scrap. For creating this code, following information and
documentations are asked to be submitted by the Buyer:
• Aadhar Card
• PAN Card
• GST Certificate
• Complete details on the Customer’s Letter Head (Signed and Sealed)
Step 8: Receipt of Money from Customer: After the complete process, finally buyer has to
transfer the amount (Material Price + Security Deposit) to the company at which it has purchased
the Scrap.
Step 9: Security Deposit Maintenance: Security Deposit received from the customer is
transferred from the General account to the Special Account created specifically for the Security

35
Deposits.
Step 10: Rate Realize: Moving forward, finally the rate is realized in the market, including the
details that XYZ is the buyer of ABC Scrap, for which he has quoted a Price H1 and has signed
an agreement with company for next 3 months to buy the above- mentioned scrap.
Step 11: Invoicing by Operations Department: Operations Department, then, prepares the
invoice and dispatch the scarp at the place of Buyer along with the Invoice. This is called
Material Out.
Step 12: Security Deposit Reversal: After successful completion of the entire auction process,
Security Deposit is refunded to the Buyer, which was earlier transferred to the Special account,
i.e., Security Deposit Account.
In Case of Default,
There may be some cases where buyer is the defaulter and does not fulfill the contract due to
numerous reasons; in such situation company sends reminders along with the penalties.

Reminder Amount of Penalty

1 Rs. 5000
2 Rs.10000
3 Rs.20000

Even after the reminders if buyer remains defaulter, his account is blocked and he is not allowed
to participate in any of the Auction activities of the Company as well as its sister concerns for the
next 6 months.

EMPLOYEE PAYROLL FUNCTION

36
 Salary Payment: Salary is the fixed amount of payment which has been paid to the
employees by the company in return for their services. Salary is inclusive of two components,
Fixed and Variables:

Type of Payments:
- Fixed Payment-
• Basic Salary:
• Dearness Allowance:
• House Rent Allowances:
• Shift
• Washing
• Education
• City Compensation Allowance
• Medical
• Alternate

- Variable Payment-
• Bonus
• Leave Travel Encashment:
• Special Medical reimbursement
• Gift
• Interest Free Loan
• Others: Maternity Benefits, Family planning

 Calculation of TDS and Payment of Salary to Employees:

In this, on the basis of Income and Investment of Workmen, TDS calculation is done. After
deducting the calculated amount of the TDS, Salaries are created to the Account of Workmen.
Company uses software named Spine payroll for this function.
Stepwise understanding of this process:
• Step 1: Submission of Form 12BB by Workmen:
• Step 2: Maintenance of Database:
• Step 3: CSV file submission from database on Software:
• Step 4: Software calculates monthly TDS:
• Step 5: Final submission of 12BB by workmen near the year end with the updates or
additions in Income or Investments.
• Step 6: TDS deducted every month on the basis of investment declared in form 12BB.

 Formula for TDS calculation:

Income
Less: Investment
= Net Income
* TDS Rate
= Amount of TDS to be deducted
The above calculated amount of TDS will be divided by 12 months and TDS will be deducted
from Salary of Workmen each month.

37
Mode of Payment:

Mode of
Paymen
t

1. Other
than Salary

a. Manual b. Online
Payment Payment

 Other than salary head can be bifurcated into:

- Manual Payment: These are the payments made to:
• TOT
• Apprentice
- Online Payment: These payments are made for the following:
• Workmen
• Loan
• Expenses Reimbursement
• Medical Reimbursement
• LTA
• Scholarship
 Salary head includes payment to be made to the following workmen:
• ETB: WKM, TOT and Apprentice
• Bus: WKM, TOT and Apprentice
• Bhopal: TOT, Apprentice, Dip. Apprentice and F.T Employee.
• Students:
- VEPT: DST
- Bhopal: DST

- ETB: WT
- ETB: MoU
- ETB:ITI

OVERHEAD CONTROLLING AND BUDGETING

38
• Budgeting: Budgeting is the process of preparing and using overall budget. Budgets are
the comprehensive formal plan that estimates the probable expenditures and income for an
organization over a specific period.
• Overheads: Overhead expenses are what it costs to run the business, including rent,
insurance, and utilities. Operating expenses are required to run the business and cannot be
avoided.
• Overheads controlling: Overhead expenses should be reviewed regularly in order to
increase profitability. Hence, there are certain controls prescribed and put in place to review
overheads.
Steps undertaking by the organization for Overhead Controlling:
 Step 1: Preparation of Budget:
All the departments prepare budget for the year according to their analysis and requirement.
Finance Dept. then evaluate different budgets and approves the budget if they are efficient and
effective.
 Step 2: Allocation of Overhead expenses in Budget:
Allocation of expenses is done by apportioning & distributing the amount under various heads of
overheads expenses.
 Step 3: Review of Overheads:
Then, the overheads are reviewed by finance department. It is checked whether the amount spent
on the respective expense is appropriate and required or not. The reasons are evaluated and
queries are raised in order be sure that the amount actually spent is unavoidable.

 Step 4: Controlling Function:

During the month end, actual expenses are compared with the budgeted overheads, and for any
difference authorized person/department is accountable. The reason for the same is thoroughly
evaluated whether it is justifiable or not.

*If there is any sudden expense or the expenses exceeds the total budget, department take special
approval.

INSURANCE

39
 FG
outside
plant

Mega
Spares
Risk outside
plant

INSURANCE
POLICIES AT VECV

Vendor Third party

Tooling job work

Marine
Policy

1. Mega Risk Policy

Mega risk policy covers the losses of assets and profit at various plants in VECV.

Components: -
 Building
 Plant & Machinery
 Fixture & Furniture
 Office Equipment
 Stock

 LOP
 CWIP

Exclusions in FAR: -

Some assets are non-insurable or covered under other policies, thus excluded from FAR Below
mentioned is the list of such assets:
 Computer Software's
• Computers -EFS

40
• Design & Trademarks
• Design Development - Cabin
• Design Development - Other Technology
• Freehold
• Furnishing Mobile
• Furnishing Set A
• Furnishing Set B
• Leasehold
• Product design prototypes

 Vehicles
Remove Vehicles from insurable assets as the same are insured under Motor Vehicle Insurance:
• Company Owned- 2 Wheelers
• Demo Vehicles
• Employee Scheme 2 Wheelers
• Employee Scheme- Cars
• Pool Car
• Staff Bus
• Test vehicles

 Others
Land including topsoil, backfill or land values, water, roads, runways, railway lines, transmission
and distribution lines outside plant Premises, drainage and culverts, canals, dams, reservoirs,
wells, pipelines outside plant Premises, tunnels, bridges, mining property, any property
underground, drilling rigs, docks, piers, wharves, offshore property;
Valuation of stock for Mega Risk: -

MIS
Working
capital
Stock

Step 1 – Open MIS

Step 2 – Click on the ‘working capital’ head
Step 3 – Check on the items under ‘stock’ head. Some items in stock are considered in other
policies thus not considered in Mega Risk Policy.

41
Heads to be included/excluded: -

INVENTORY AS PER MIS REMARKS POLICY NAME

In Plant Plant Mega Risk

Slow moving Plant Plant Mega Risk

Slow moving PLR PLR Job Work

PLR (Net off slow moving) PLR Job Work

RGP (Employee other than float) Others No where

Warehouse / transporter/GIT GIT Marine

Component inventory – Imp Plant Mega Risk

Non-Auto Engines/Axle Plant Mega Risk

Finished goods - (vehicles) FG Based on capacity - in plant

WIP vehicles FG Based on capacity - in plant

Machine Tools and spare Plant Mega Risk

Spares Parts (VEPDC)/UD Spares Plant Mega Risk

1152 RDC Spares outside Plant

1153 RDC Spares outside Plant

1154 RDC Spares outside Plant

1141 RDC Spares outside Plant

COCO Spares S&M No where

Reman/Cut Section S&M No where

Float units S&M No where

42
 2. Marine Policy

To insure the inventory, that has been procured, in order to avoid the future losses.

Marine

Impor Domestic/ Inland

t

Ex Work
FOR Ex Work

FOR – Free on trade, where insurance cover is not taken by the company as vendor is
responsible for any damage or loss occurred during the transit.
Ex-Work – Insurance is required, as the company is responsible for any loss or damage of the
inventory, during transit.

3. Vendor tooling
The company provides tools to the vendor for processing. These tools are property of the
company hence it is necessary to insure them.

4. Third party job work

We send raw material to the vendor for further processing (job work) hence insurance is required
for that inventory.

5. Spares outside plant

Inventories which are stored outside plant i.e. in warehouses & Regional Distribution Centers
have to be insured

6. FG outside plant.

Company has taken different yards & warehouses to store its finished goods inventories.

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Quantity * Rate = F.G. Value
// Quantity - We take insurance based on estimated FG quantity received from custodian of the
yard.
// Rate - Rate will be taken from FG Valuation File.

CONCLUSION
VECV tried well to stay in the market through diversifying their products. The company
produces different types of trucks and buses for different purposes. It follows robotic technique

44
to paint the trucks and it is kept confidential so that the competitors cannot copy the technique.

If we talk about the finance department, it is very well structured as different persons are
appointed for every job role so that every process can be smoothly performed.

DAILY REPORT

Name of the Student: Sakshi Sharma

Course and Semester: MBA (FT)

45
Batch: 2021-2023
Specialization: FINANCE & MARKETING
Name of Summer Training Organization: Volvo Eicher Commercial Vehicles

Day Learning
1 1 CHR - Purchase Order Release basics
2 BOM (Bill of Material)
3 Overview of VECV plant
4 Scheduled PO & Employee Tax Deduction (TDS)
5 Employee Tax Declaration (TDS) (Continued)
6 Week off
7 Week off
8 Documents entry in excel
9 Valuation of finished goods
10 Manufacturing Line Visit
11 Assembly Line Visit
12 Documents entry in excel
13 Week off
14 Week off
15 Insurance
16 Paint Shop Visit
17 Documents entry in excel
18 Special Medical Bill (Document Verification)
19 Special Medical Bill (Entry in SAP)
20 Week off
21 Week off
22 Special Medical Bill (Park & post in SAP)
23 Documents entry in excel
24 Documents entry in excel
25 Loans and allowances for workman
26 Scrap Management
27 Week off
28 Week off
29 Presentation on Insurance
30 Presentation on Insurance
31 Employee Payroll

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 32 Employee Payroll
33 Documents entry in excel
34 Week off
35 Week off
36 Employee Payroll
37 Overhead Controlling
38 Overhead Controlling
39 Documents entry in excel
40 Presentation on Insurance
41 Week off
42 Week off
43 Budgeting
44 Budgeting
45 Documents entry in excel
46 Preparation of report
47 Preparation of report
48 Week off
49 Week off

Name of the Faculty Guide: Sr. Asst. Prof. Chanda Gulati

Signature of Faculty Guide:

Remark:

Note: Student have to enclose this daily work report sheet with their summer training report at the time of
submission along with the signature of their Faculty Guide. Student will not be able to submit his/ her file
to the department without the signature of faculty guide.

Weekly Report

Name of the Student: Sakshi Sharma

Course and Section: MBA (FT) C
Weekly report for (Duration of Week): 7 Weeks

47
WEEK FROM TO DESCRIPTION OF WORK
1. 23-05-2022 27-05-2022 Overview of VECV plant

2. 30-05-2022 03-05-2022 Documentation, Valuation of finished goods

3. 06-05-2022 10-06-2022 Special Medical Bill (Document

Verification). Special Medical Bill (Entry in
SAP)
4. 13-06-2022 17-06-2022 Loans and allowances for workman, Scrap
Management
5. 20-06-2022 24-06-2022 Presentation on Insurance, Employee payroll
6. 27-06-2022 01-07-2022 Overhead Controlling
7. 04-06-2022 08-07-2022 Budgeting

48
49
 STUDENT EVALUATION FORM FOR FACULTY GUIDE

Name of the Student: Sakshi Sharma

Course: MBA
Specialization: FINANCE+MARKETING
Section: C
Batch: 2021 - 2023
Date and Day when student reported first time:

Kindly give feedback for the following points

1. Whether the student have reported before he/she proceeded for summer training.

a. YES
b. NO

2. Whether the Student get the approval for Topic of Summer Training.
a. YES
b. NO

3. Kindly mark the performance of the student for following Parameters on a scale of 1 to 5

a. Regularity and Punctuality during training including reporting and submission of Weekly
wok report

1 2 3 4 5
b. Openness for Learning and Acceptability of task allotted

1 2 3 4 5

c. Able to work in team

1 2 3 4 5

d. Behavior

1 2 3 4 5

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e. Quality in work allotted

1 2 3 4 5

Overall Remark on Student performance

……………………………………………………………………………………………………
………………………………………………………………………………………………………
………………………………………………………………………………………………………
…

Date:

Place:

Sr. Asst. Prof. Chanda Gulati

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