Submitted To:- Submitted By:-

Mr. D.C. Dani Dharm Jeeta Singh

(Deputy Manager Finance) M.B.A. IIIrd Sem.

Affiliated by Uttarakhand Technical University,Dehradun

 DECLARATION

I hereby declare that the Project Report

“ACCOUNTING SYSTEM” with special reference to
Minda Industries Limited submitted to Saraswati
Institute of Management & Technology,
Rudrapur in partial fulfillment of the requirement
for the degree of Master of Business Administration is
my original work and not submitted for the award of
any other Degree, Diploma or other similar title or
prizes.

Place: Rudrapur
Date:
 ACKNOWLEDGEMENT
I wish to express my heartfelt Gratitude to the Management of Minda Industries Limited
(Minda Group Company), Rudrapur (Uttarakhand) for extending co-operation and
guidance to me during the Summer Training. They provide me an excellent, disciplined
and cordial work environment throughout the training.

I would like to express my gratefulness in particular Mr. D.C.Dani (Leader Finance &
Accounts) for accepting me as a summer trainee in his highly esteemed organization.
His help, guidance and keen interest in the project are a source of inspiration for me to
ameliorate the research. In spite of the busy schedules, his deep involvement in the
project directs me to proceed in the right direction with enhanced enthusiasm and zeal.

I humbly acknowledge the help and support rendered by Mr. U.C. Joshi (Dy. Manager
Finance) in Minda Industries Ltd (Switch Division), RUDRAPUR in the preparation of
this project report. His outstanding co-operation was instrument in the smooth
completion of this report. His knowledge of exclusive software applications helped me in
making this project more comprehensive.

This is a combined effort of so many people both inside and outside of the organization
without their help it would have been very difficult for me to the present shape to the
project.

The successful completion of this project in very short time has been possible due to the
personal interest taken by Mr. Prasant Prabhakar (HOD, Mgmt Deptt.), Mrs.Salu
Arora, & Mrs.Preeti Dixit, Faculty of Finance at Saraswati Institute of Management &
Technology, Rudrapur. I am very obliged to these persons who helped us out during our
training tenure.

I would be failing in my duty if I do not thank all the family members and friends &
seniors who helped me with their active and valuable co-operation and made me
training tenure a very fruitful, one last, but not the least, our thank is due, to all those
who have contributed their own to make my project a success.

PREFACE

Theory and practice are the two aspects of management education. In order to produce
a dynamic and promising executive, the two have to be blended together. In India, the
industrial training in the domain of management courses has received pivotal
importance. It exposes the potential manager to the actual work environment and
provides them a rich insight into what actually goes on in the industrial climate of India.
Infact it is the implementation of theory in practice is the life force of management.

A six week vocational training is a requirement for the award of the Master Degree in
Business Administration. I had the privilege of doing my summer training at Minda
Industries Limited (Rudrapur); I must say that the management provided me with an
excellent work atmosphere for learning.

The project I worked on during my training at Minda Industries Limited was

Mr. U.C.Joshi (Dy. manag Finance & Accounts) motivated me to undertaken this topic
for my project report.
 EXECUTIVE ABSTRACT
TITLE
Accounting System (MIL)

PROBLEM IDENTIFICATION
Employees in accounts department want changes in the working of computer systems
with in the organization and want the applicability of new software packages.

RESEARCH OBJECTIVES
 Basically to know the working style of accounts department in MIL

 To examine the Accounting standards of an organization and to learn the

practical knowledge of the job.

 To suggest remedial measures for ideal working of accounts department.

RESEARCH METHODOLOGY
Exploratory research

FINDINGS
Accounts department in MIL is serving its best efforts to the proper working of the
management in the organization. And Accounts department is quite sufficient to perform
their tasks.

STRENGTH

• No communication gap between the all departments in the organization.

• All employees have efficient skills to perform their jobs.
 CONTENTS
SECTION – I
OBJECTIVE OF THE STUDY
COMPANY PROFILE
A.COMPANY HISTORY
B.MANAGEMENT OF THE COMPANY
C.UNITS / BRACHES OF COMPANY
D.PRODUCTS OF THE COMPANY
E.ORGANIZATION CHART OF THE COMPANY
F.FUTURE PLAN OF THE COMPANY

SECTION – II
INTRODUCTION, MEANING AND DEFINITION OF ACCOUNTING
BRANCHES OF ACCOUNTING
NEEDS OF ACCOUNTING
BENEFITS OF ACCOUNTING
INDIAN ACCOUNTING STANDARD
WORKING OF ACCOUNTS DEPARTMENT

SECTION – III
PRESENTATION OF DATA
REASONS FOR APPROCHING TO MIL
TARGETS OF THE COMPANY
SUMMARY
RECOMMENDATION
CONCLUSION

ANNEXURE
BIBLIOGRAPHY
 OBJECTIVE
The main purpose of my practical training at Minda Industries Ltd., was to study the
proper working system of the Accounts/Finance Department with in the organization, to
gain the practical knowledge in the Accounts/Finance field, to have some idea on the
working of the administration to manage its activities according to the priorities already
setup, to study the employee's behavior, to trained my self properly before working with
an organization to properly deal with the problems in the company. My Specialization at
the Management Programme is in Finance in Accounts department, it is the most
important aspect according to any Organization’s point of view. The study was
conducted mainly to know the important work performed by the Accounts Department in
Minda Industries Limited. Secondly the subsidiary object of this study was to
undergone with the various activities performed with in the organization, to gain the
practical knowledge about the jobs, knowing the various welfare programmes &
employees services taken up by the Management of the company and the sort
comings of the programme . I have discussed there two aspect in detail in this project
report. In the end, I have given the conclusion of my study and have offered suggest to
the Management of the company to bring about better Human Relations in the
organization.
 COMPAN
Y PROFILE

COMPANY HISTORY

Our chairman , Mr. S.L. Minda founded the mind group in 1958.He begun with a
small team of five people and the vision of becoming a leading player in the
automotive components industry. His pioneering efforts diversified, customer
oriented, multi-product and multi-location organization.

Under the dynamic leadership of Mr. Nirmal K. Minda, who took over as the
Managing Director in the year 1995, the N.K. Minda Group has grown manifold .
Today,it has an annual turnover of Rs. 9.3 billion (USD 233 million) and the
employs around 5000 people in 19 manufacturing facilities spread across India
and 1 in Indonesia.

Over the year, N.K. Minda Group has acquired a customer base that includes the
who’s who of the automotive sector in India and around the world.
 VISION

To pursue excellence in quality with the future mind.

To keep abreast of changing consumer perceptions.

And

To provide comprehensive value for money to our discerning consumers.

Minda Group is India’s foremost manufacturer of a range of automotive components.

The Group has an annual turnover of Rs. 9.3 billion(US $ 233 million ) and is a leading
supplier to Original Equipment Manufacturers. N.K. Minda group works with the leading
auto components specialists globally, to bring the most technologically advanced
products to its customers.

The Minda Group product profile comprises of:

Switches – 2 / 3 wheelers
Switches – 4 wheelers
Lighting
Horns
Alternate Fuel Kits - LPG / CNG Fuel Kits

The company has joined hands with global leaders to constantly fine-tune our offerings
and have some of the most reputed automotive component manufacturers as our joint-
venture partners such as:
Tokai Rika Co. Ltd., Japan
TYC Brother Ind. Company Ltd., Taiwan
Fiamm S.p.A, Italy
Impco Technologies Inc., USA
CORPORATE OUTLINE
Established: 1958
Chief Executive: Mr. NK Minda, Managing Director
Number of Employees: 5000
Annual Turnover: Over US $ 233 million (Rs. 9.3 Billion)

Corporate Office: Registered Office:

Minda Industries Limited B-73, Wazirpur Industrial Area
Vill. Nawada Fatehpur, Delhi – 110052
P.O. Sikanderpur Badda,
Manesar
Distt. Gurgaon
Haryana – 122004

INTERNATIONAL BUSINESS:
Minda Group has forged strategic partnerships with some of the leading players in the
business across the world. These include Joint Ventures and Technical Collaborations
with a host of specialists in the auto component sector like Tokai Rika for switches,
Fiamm for horns, TYC for lighting and Impco for Alternate Fuel Technologies.

Some of the Minda Group’s global customers include Honda - Indonesia, Suzuki -
Malaysia, Indonesia, Philippines & Thailand, Yamaha - Indonesia, Thailand, Malaysia &
MBK France, Piaggio - Italy, Peugeot – France, Aprilla – Italy and Triumph – UK in the
2/3 wheeler segment.

As far as 4-wheeler segment is concerned, some of the international customers include

Case New Holland, General Motors - DAT Korea & Mexico, Ford - China, John Deere,
Suzuki - Japan, Piaggio - Italy and Yanmar Agricultural Machinery - Japan.

The other global customers include Domino – Italy, Surya Jaya – Indonesia, Mission
Trading – USA, International Trust – USA, KAG Associates – Sri Lanka, Torica – Japan,
Overseas Automotive, Sri Lanka and Microcar – Sri Lanka.

With an aim of reaching out to the world and providing top of the line automotive
components that are not just technologically superior and high qualities but also
aesthetically pleasing, Minda Group has spread its network far and wide and has 11
manufacturing facilities across India.

Today Minda already has offices and representation in Europe, UK, USA and Asia. The
Group, in its Endeavour to charter a new course in the global markets has already
constituted a new company called PT Minda ASEAN Automotive and is setting up an
automotive component manufacturing facility in Indonesia, which is likely to be
operational by the end of 2005.

RESPONSIBILITIES:

CORPORATE GOVERNANCE

Sustainable development and a clean environment integrated with the business

objective is the focus of operations at Minda Group.

The Minda Group firmly believes in fostering the spirit of enterprise and accountability,
promoting transparency and responsibility. This spirit is carried forward in all its dealings
with the regulatory bodies, employees, shareholders, customers and other stakeholders.
At Minda Group, all regulatory compliances are followed in letter and in spirit and all
stakeholders are kept informed of developments that impact the organization.

Registered Office:
B – 73, Wazirpur Industrial Area
Delhi 110052
Share Registrars:
M/s.Intime Spectrum Registry Limited,
A-31, 3rd Floor, Near PVR Cinema,
Naraina Industrial Area,Phase-1,
New Delhi-110028.
Ph:011-51410592-4
Minda Industries Limited

BSE Code: 532539

Face Value: Rs. 10
Market lot: 1
 MANAGEMENT OF THE COMPANY
FINANCIALS: BOARD OF DIRECTORS

Name Designation

Shri. SL Minda Chairman

Shri. Nirmal K Minda Managing Director
Shri. Ashok Minda Director
Shri. B.R.Agarwal Director
Shri. Raja Ram Gupta Director
Shri. Subhash Lakhotia Director
Shri. S.K. Arya Director

Mr. S.L.Minda, Chairman

Mr. Shadi Lal Minda, the Founder of the Minda Group is a Visionary under whose able
guidance the organization has grown manifold. Awell respected social reformer and an
able statesman, Mr. S.L. Minda is is revered for his caring philosophl. He is also the
Chairman & Whole time Director of M/s Minda Finance Limited.

Mr. Nirmal K. Minda, Managing Director

Mr. Nirmal K. Minda is the Managing Director of Minda Industries Limited. He is also the
MD of Mindarika Pvt. Limited. And Minda Autogas Limited. Mr. Minda is also a director of
Minda Fiamm Acoustic Limited, Fiamm Minda Automotive Limited, PT MInda Asean
Limited, Minda Huf Limited and Minda Sai Limited

Mr. Ashok Minda, Director

Mr. Ashok Minda is the Managing Director of Huf Limited and Minda Instruments
Limited. He is also the Director of M/s Expoglobe Limited, Mindarika Pvt. Ltd.,Minda
wirelinks Private Limited, Minda sai Limited & Minda Management Services
Mr. B.R.Agarwal, Director

Mr. B.R. Agarwal has over 45 years of experience, out of which more than 40 years was
with the Birla Group., where he retired as the Chief Executive President of one of their
companies. He is also a Director of Minda Huf Limited and Minda Sai Limited.

Mr. Raja Ram Gupta, Director

A specialist in the field of Management and marketing of automotive parts and moulding
businesswith over 42 years experience, Mr. R.R. Gupta is also the Director of Siyaram
Sales Pvt. Ltd. Siyaram Brother Limited, Chadarmani Commercial & Investment Pvt.
Ltd.,and SRB Moulding Pvt. Ltd.

Mr. Subhash Lakhotiya, Director

Mr. Subhash Lakhotia is a well known consultant specializing in tax planning, tax
documentation and investment planning. He has over 32 years of experience and is also
a Director of Realone Developers Private Limited.

Mr. S.K. Arya, Director

Mr. S. K. Arya is the Vice Chairman & Managing Director of Jay Bharat Maruti Limited.
He is also a Director in all JBM Group Companies, A to Z Securities Limited, Liberty
Shoes Limited, among several others.

INTERNAL
AUDITORS
AUDITORS
N. Bahl & Co.
R.N. Saraf & Co.
Chartered
Chartered Accountants
Accountants
UNITS / BRANCHES OF THE COMPANY
GROUP COMPANIES:
Minda Group is a specialized automotive components manufacturer that provides
products and solutions to automobile companies across the globe.
The Group comprises of the following companies:

Minda Industries Limited

Mindarika Pvt. Ltd.
Minda TYC Automotive Limited
Minda Fiamm Acoustic Limited
Fiamm Minda Automotive Limited
Minda Impco Limited
PT Minda ASEAN Automotive
PRODUCTS OF THE COMPANY

MINDA TYC AUTOMOTIVE - LIGHTING

Minda TYC produces a variety of world-class lighting products for the
2/3 wheelers and off roaders as well as 4 wheeler vehicles.

The various product offerings include:

Tail Lamp
Side Indicators
Head Lamps
Work Lamp
Front Fog Lamps
Rear Fog Lamps
Warning Triangles
High Mounting Stop Lamps

MINDA-SWITCH
Minda collebrated with Tokai Rika for switches and produce a huge variety of
Switches. The various product offerings include:

Brake Switch
Ignition Switch
Ignition cum Starter Switch
Blinker Switch
Heater Switch
Light Switch
Hzard Warning Switch
Handle bar Switch
Pannel Switch
Neutral Switch
Tractor Switch
QUALITY CERTIFICATIONS
Minda Group has always focused on quality. Today the Group
companies have all industry and process specific certifications
applicable to the automotive components industry globally.

ISO 9001 - Quality management system

ISO 14001 – Environment management system
Q 1 Ford Certificate – Preferred Supplier Status of the Ford Motor
Company
OHSAS 18001 – Occupational Health & Safety
ISO TS 16949 - Quality management system in automotive
industry

Quality is of paramount importance at the Minda Group. The Group

has implemented Enterprise-wide, internationally recognized, Quality
standards that include:

BEST- Business Excellence through Simple Techniques

Kaizen
5S
Quality Circles
Visual Control

The Minda Zero Defect policy puts emphasis on Quality from the
design stage to the final manufacturing. It involves looking at and
addressing possible quality issues at the inception itself and not after
its manifestation. It has stringent quality assurance norms
incorporated within the process, which eliminate possible errors and
make the processes inherently strong and error-free.

Customer Name of Minda Industries

ACCOUNTING:
In the words of the Committee on terminology of the American Institute of Certified
Public Accountants:
 “Accounting is the art of recording, classifying and summarizing in
a significant manner and in terms of money; transactions and
events which are, in part at least, of a financial character, and
interpreting the results there of”.
It is said that accounting is the language of business. It means that a firm communicates
with the outside world, including the proprietors, through accounting statements. One
cannot understand the affairs of a firm unless the firm prepares financial statements
intelligibly. Smith and Ashburn have kept in view this aspect of accounting. In
their words, “Accounting is the science of recording and classifying business
transactions and events, primarily of a financial character, and the art of making
significant summaries, analysis and interpretations of those transactions and
events and communicating the results of persons who must make decisions or
form judgments”.

ATTRIBUTES OF ACCOUNTING:

There are few attributes of accounting which are as follows:

1. Financial transaction: Accounting is the term which never considered non

monetary aspects; it includes only the monetary or the financial items.
2. Recording: It is the systematic way of recording the financial transactions in the
books of Accounts to make the study easy and to provide more help in the
comparative study.
3. Classifying: It is the process of grouping the transactions properly according to
their nature.
4. Summarizing: It is the art of presenting the classified data into a desired way
which will also helpful in analyzing it.
5. Analysis and Interpretation: Accounting provides the facility of preparing plans
in advance and analyzing the prepared records for interpreting the results out of
them.

BRANCHES OF ACCOUNTING:
 1. Financial Accounting: Accounting system which is concerned only with the
financial state of affairs and financial results of operation is called the Financial
Accounting.
2. Cost Accounting: The main purpose of cost Accounting has been to analyze the
expenditure involved so as to ascertain the cost of various products
manufactured and fix their prices.
3. Management Accounting: The main purpose of the management accounting is
to provide necessary information about funds, costs, profits, etc. as will enable
management to discharge its function properly.

VARIOUS PARTIES INTERESTED IN ACCOUNTING INFORMATION:

1. Owner: They are the persons, who contributes their capital to the enterprise and
they are also the risk holders, they invest their money in the business to get a
reasonable rate of return on the capital invested.
2. Investors: These are the other people who invest their money in the business
and also bear the risk.
3. Creditors: Consignor who supply goods and services to us on credit basis and
are interested in knowing the firms position to get their payments against their
supply / Services.
4. Lenders: These are the persons known as the initial funds providers or the
owners.
5. Employee: This is the group who is interested in knowing the financial position to
receive the money/salary in return of the services provided by them.
6. Government: This party is interested in accounting information to receive taxes
and their chargeable amount from the parties/business.
7. Researchers: Researchers are interested in getting the accounting information
because they want realistic data or the information for their further research
study.

OBJECTIVES OF ACCOUNTING:
1. To maintain the records of the business/group/organization.
2. Calculation of profit and loss of the business.
3. Depiction of financial position of the business.
4. To make the information available to various groups and users such as: creditors,
debtors, government, researchers, investors and all.

ADVANTAGES OF ACCOUNTING:

1. Assistance to management: It gives assistance to management with

considering the points: planning, decision making, controlling and reports etc.
2. Replacement of memory: It is helpful for getting the new and the updated data.
3. Comparatives study: It is the system which provides the comparative study
with the other information prepared to find out the results for the current year.
4. Settlement of taxation policy: It is also useful in the calculation and the
settlement policy of the taxation.
5. Sale of business: We can get the previous information/past information, with the
help of the accounting information when it is required at the time of the sale of
the business or another set-up of same plant where ever is necessary
according to demand.

INDIAN ACCOUNTING STANDARDS

Accounting is the art of recording transactions in the best manner possible, so as to
enable the reader to arrive at judgments/come to conclusions, and in this regard it is
utmost necessary that there are set guidelines. These guidelines are generally called
accounting policies. The intricacies of accounting policies permitted Companies to alter
their accounting principles for their benefit. This made it impossible to make
comparisons. In order to avoid the above and to have a harmonised accounting
principle, Standards needed to be set by recognised accounting bodies. This paved the
way for Accounting Standards to come into existence.

Accounting Standards in India are issued By the Institute of Chartered Accountanst of

India (ICAI). At present there are 30 Accounting Standards issued by ICAI.

Objective of Accounting Standards

Objective of Accounting Standards is to standarize the diverse accounting policies and

practices with a view to eliminate to the extent possible the non-comparability of financial
statements and the reliability to the financial statements.

The institute of Chatered Accountants of India, recognizing the need to harmonize the
diversre accounting policies and practices, constituted at Accounting Standard Board
(ASB) on 21st April, 1977.

Compliance with Accounting Standards issued by ICAI

Sub Section(3A) to section 211 of Companies Act, 1956 requires that every Profit/Loss
Account and Balance Sheet shall comply with the Accounting Standards. 'Accounting
Standards' means the standard of accounting recomended by the ICAI and prescribed
by the Central Government in consultation with the National Advisory Committee on
Accounting Standards(NACAs) constituted under section 210(1) of companies Act,
1956.

Accounting Standards Issued by the Institute of Chatered Accountants of India

are as below:

• Disclosure of accounting policies:

• Valuation Of Inventories:
• Cash Flow Statements
• Contingencies and events Occurring after the Balance sheet Date
• Net Profit or loss For the period, Prior period items and Changes in accounting
Policies.
• Depreciation accounting.
• Construction Contracts.
• Revenue Recognition.
• Accounting For Fixed Assets.
• The Effect of Changes In Foreign Exchange Rates.
• Accounting For Government Grants.
• Accounting For Investments.
• Accounting For Amalgamation.
• Employee Benefits.
• Borrowing Cost.
• Segment Reporting.
• Related Party Disclosures.
• Accounting For Leases.
• Earning Per Share.
• Consolidated Financial Statement.
• Accounting For Taxes on Income.
• Accounting for Investment in associates in Consolidated Financial Statement.
• Discontinuing Operation.
• Interim Financial Reporting.
• Intangible assets.
• Financial Reporting on Interest in joint Ventures.
• Impairment Of assets.
• Provisions, Contingent, liabilities and Contingent assets.
• Financial instrument.
• Financial Instrument: presentation.
 • Financial Instruments, Disclosures and Limited revision to accounting standards.

Disclosure of Accounting Policies: Accounting Policies refer to specific accounting

principles and the method of applying those principles adopted by the enterprises in
preparation and presentation of the financial statements.

Valuation of Inventories: The objective of this standard is to formulate the method of

computation of cost of inventories / stock, determine the value of closing stock /
inventory at which the inventory is to be shown in balance sheet till it is not sold and
recognized as revenue.

Cash Flow Statements: Cash flow statement is additional information to user of

financial statement. This statement exhibits the flow of incoming and outgoing cash. This
statement assesses the ability of the enterprise to generate cash and to utilize the cash.
This statement is one of the tools for assessing the liquidity and solvency of the
enterprise.

Contigencies and Events occuring after the balance sheet date: In preparing
financial statement of a particular enterprise, accounting is done by following accrual
basis of accounting and prudent accounting policies to calculate the profit or loss for the
year and to recognize assets and liabilities in balance sheet. While following the prudent
accounting policies, the provision is made for all known liabilities and losses even for
those liabilities / events, which are probable. Professional judgement is required to
classify the likehood of the future events occuring and, therefore, the question of
contingencies and their accounting arises.

Objective of this standard is to prescribe the accounting of contigencies and the events,
which take place after the balance sheet date but before approval of balance sheet by
Board of Directors. The Accounting Standard deals with Contingencies and Events
occuring after the balance sheet date.

Net Profit or Loss for the Period, Prior Period Items and change in Accounting
Policies : The objective of this accounting standard is to prescribe the criteria for certain
items in the profit and loss account so that comparability of the financial statement can
be enhanced. Profit and loss account being a period statement covers the items of the
income and expenditure of the particular period. This accounting standard also deals
with change in accounting policy, accounting estimates and extraordinary items.

Depreciation Accounting : It is a measure of wearing out, consumption or other loss of

value of a depreciable asset arising from use, passage of time. Depreciation is nothing
but distribution of total cost of asset over its useful life.

Construction Contracts : Accounting for long term construction contracts involves

question as to when revenue should be recognized and how to measure the revenue in
the books of contractor. As the period of construction contract is long, work of
construction starts in one year and is completed in another year or after 4-5 years or so.
Therefore question arises how the profit or loss of construction contract by contractor
should be determined. There may be following two ways to determine profit or loss: On
year-to-year basis based on percentage of completion or On cpmpletion of the contract.

Revenue Recognition : The standard explains as to when the revenue should be

recognized in profit and loss account and also states the circumstances in which
revenue recognition can be postponed. Revenue means gross inflow of cash, receivable
or other consideration arising in the course of ordinary activities of an enterprise such
as:- The sale of goods, Rendering of Services, and Use of enterprises resources by
other yeilding interest, dividend and royalties. In other words, revenue is a charge made
to customers / clients for goods supplied and services rendered.

Accounting for Fixed Assets : It is an asset, which is:- Held with intention of being
used for the purpose of producing or providing goods and services. Not held for sale in
the normal course of business. Expected to be used for more than one accounting
period.

The Effects of changes in Foreign Exchange Rates : Effect of Changes in Foreign

Exchange Rate shall be applicable in Respect of Accounting Period commencing on or
after 01-04-2004 and is mandatory in nature. This accounting Standard applicable to
accounting for transaction in Foreign currencies in translating in the Financial Statement
Of foreign operation Integral as well as non- integral and also accounting for For forward
exchange.Effect of Changes in Foreign Exchange Rate, an enterprises should disclose
following aspects:

• Amount Exchange Difference included in Net profit or Loss;

• Amount accumulated in foreign exchange translation reserve;
• Reconciliation of opening and closing balance of Foreign Exchange translation
reserve;

Accounting for Government Grants : Governement Grants are assistance by the

Govt. in the form of cash or kind to an enterprise in return for past or future compliance
with certain conditions. Government assistance, which cannot be valued reasonably, is
excluded from Govt. grants,. Those transactions with Governement, which cannot be
distinguished from the normal trading transactions of the enterprise, are not considered
as Government grants.

Accounting for Investments : It is the assets held for earning income by way of
dividend, interest and rentals, for capital appreciation or for other benefits.

Accounting for Amalgamation : This accounting standard deals with accounting to be

made in books of Transferee company in case of amalgamtion. This accounting
standard is not applicable to cases of acquisition of shares when one company
acquires / purcahses the share of another company and the acquired company is not
dissolved and its seperate entity continues to exist. The standard is applicable when
acquired company is dissolved and seperate entity ceased exist and purchasing
company continues with the business of acquired company

Employee Benefits : Accounting Standard has been revised by ICAI and is applicable
in respect of accounting periods commencing on or after 1st April 2006. the scope of the
accounting standard has been enlarged, to include accounting for short-term employee
benefits and termination benefits.

Borrowing Costs : Enterprises are borrowing the funds to acquire, build and install the
fixed assets and other assets, these assets take time to make them useable or saleable,
therefore the enterprises incur the interest (cost on borrowing) to acquire and build these
assets. The objective of the Accounting Standard is to prescribe the treatment of
borrowing cost (interest + other cost) in accounting, whether the cost of borrowing
should be included in the cost of assets or not.

Segment Reporting : An enterprise needs in multiple products/services and operates in

different geographical areas. Multiple products / services and their operations in different
geographical areas are exposed to different risks and returns. Information about multiple
products / services and their operation in different geographical areas are called
segment information. Such information is used to assess the risk and return of multiple
products/services and their operation in different geographical areas. Disclosure of such
information is called segment reporting.

Related Paty Disclosure : Sometimes business transactions between related parties

lose the feature and character of the arms length transactions. Related party relationship
affects the volume and decision of business of one enterprise for the benefit of the other
enterprise. Hence disclosure of related party transaction is essential for proper
understanding of financial performance and financial position of enterprise.

Accounting for leases : Lease is an arrangement by which the lesser gives the right to
use an asset for given period of time to the lessee on rent. It involves two parties, a
lessor and a lessee and an asset which is to be leased. The lessor who owns the asset
agrees to allow the lessee to use it for a specified period of time in return of periodic rent
payments.

Earning Per Share :Earning per share (EPS)is a financial ratio that gives the
information regarding earning available to each equiy share. It is very important financial
ratio for assessing the state of market price of share. This accounting standard gives
computational methodology for the determination and presentation of earning per share,
which will improve the comparison of EPS. The statement is applicable to the enterprise
whose equity shares or potential equity shares are listed in stock exchange.
Consolidated Financial Statements : The objective of this statement is to present
financial statements of a parent and its subsidiary (ies) as a single economic entity. In
other words the holding company and its subsidiary (ies) are treated as one entity for the
preparation of these consolidated financial statements. Consolidated profit/loss account
and consolidated balance sheet are prepared for disclosing the total profit/loss of the
group and total assets and liabilities of the group. As per this accounting standard, the
conslidated balance sheet if prepared should be prepared in the manner prescribed by
this statement.

Accounting for Taxes on Income : This accounting standard prescribes the accounting
treatment for taxes on income. Traditionally, amount of tax payable is determined on the
profit/loss computed as per income tax laws. According to this accounting standard, tax
on income is determined on the principle of accrual concept. According to this concept,
tax should be accounted in the period in which corresponding revenue and expenses are
accounted. In simple words tax shall be accounted on accrual basis; not on liability to
pay basis.

Accounting for Investments in Associates in consolidated financial statements :

The accounting standard was formulated with the objective to set out the principles and

procedures for recognizing the investment in associates in the cosolidated financial

statements of the investor, so that the effect of investment in associates on the financial
position of the group is indicated.

Discontinuing Operations : The objective of this standard is to establish principles for

reporting information about discontinuing operations. This standard covers
"discontinuing operations" rather than "discontinued operation". The focus of the
disclosure of the Information is about the operations which the enterprise plans to
discontinue rather than dsclosing on the operations which are already discontinued.
However, the disclosure about discontinued operation is also covered by this standard.

Interim Financial Reporting (IFR) : Interim financial reporting is the reporting for
periods of less than a year generally for a period of 3 months. As per clause 41 of listing
agreement the companies are required to publish the financial results on a quarterly
basis.

Intangible Assets : An Intangible Asset is an Identifiable non-monetary Asset without

physical substance held for use in the production or supplying of goods or services for
rentals to others or for administrative purpose

Financial Reporting of Interest in joint ventures : Joint Venture is defined as a

contractual arrangement whereby two or more parties carry on an economic activity
under 'joint control'. Control is the power to govern the financial and operating policies
of an economic activity so as to obtain benefit from it. 'Joint control' is the contractually
agreed sharing of control over economic activity.

Impairment of Assets : The dictionary meanong of 'impairment of asset' is weakening

in value of asset. In other words when the value of asset decreases, it may be called
impairment of an asset. As per AS-28 asset is said to be impaired when carrying amount
of asset is more than its recoverable amount.

Provisions, Contingent Liabilities And Contingent Assets : Objective of this

standard is to prescribe the accounting for Provisions, Contingent Liabilitites, Contingent
Assets, Provision for restructuring cost.
Provision: It is a liability, which can be measured only by using a substantial degree of
estimation.
Liability: A liability is present obligation of the enterprise arising from past events the
settlement of which is expected to result in an outflow from the enterprise of resources
embodying economic benefits.

Financial Instrument: Recognition and Measurement, issued by The Council of the

Institute of Chartered Accountants of India, comes into effect in respect of Accounting
periods commencing on or after 1-4-2009 and will be recommendatory in nature for An
initial period of two years. This Accounting Standard will become mandatory in respect of
Accounting periods commencing on or after 1-4-2011 for all commercial, industrial and
business Entities except to a Small and Medium-sized Entity. The objective of this
Standard is to establish principles for recognizing and measuring Financial assets,
financial liabilities and some contracts to buy or sell non-financial items. Requirements
for presenting information about financial instruments are in Accounting Standard.

Financial Instrument: presentation : The objective of this Standard is to establish

principles for presenting financial instruments as liabilities or equity and for offsetting
financial assets and financial liabilities. It applies to the classification of financial
instruments, from the perspective of the issuer, into financial assets, financial liabilities
and equity instruments; the classification of related interest, dividends, losses and gains;
and the circumstances in which financial assets and financial liabilities should be offset.
The principles in this Standard complement the principles for recognising and measuring
financial assets and financial liabilities in Accounting Standard Financial Instruments:

Financial Instruments, Disclosures and Limited revision to accounting standards:

The objective of this Standard is to require entities to provide disclosures in their
financial statements that enable users to evaluate:

• the significance of financial instruments for the entity’s financial position and
performance; and

• the nature and extent of risks arising from financial instruments to which the
entity is exposed during the period and at the reporting date, and how the entity
manages those risks.
FLOW CHART OF THE ACCOUNTS DEPARTMENT
 MINDA INDUSTRIES LIMITED
SYSTEM FLOW CHART
ACCOUNTS DEPARTMENT

INFLOW OUTFLOW

RM/CAPITAL PO's, CAPITAL CIJ VENDOR PAYMENT, SALES TAX FORMS

PURCHASE PURCHASE
VENDOR BILLS JOB WORK, TDS FORMS
PRODUCT COST SHEETS PERMISSIBLE PUCHASE INVENTORY
A
CUSTOMER PO's, PAYMENTS DESPATCH TO CUSTOMERS
MARKETING MARKETING
YEARLY SALES FORECAST B.G./ I.B. FOR CUSTOMERS
MONTHLY INDENT QTY.
C
IMP. RM/CAPITAL PO's, CAPITAL CIJ SUBMISSION-FOREIGN DOC. & BILL OF ENTRY
IMPORT IMPORT
REQUEST-REMITTENCE & CUSTOM DUTY
C ISSUE-REMITTENCE & CUSTOM DUTY

PAYROLL
O SALARY DISTRIBUTION
ADMINISTRATION ADMINISTRATION

U
DAILY PRODUCTION (MOVEMENT SLIPS)
PRODUCTION

N ANNUAL BUDGET, DAILY & WEEKLY REPORT

MANAGEMENT
MONTHLY MIS, AUDITED B/S, P/L
STOCK STATEMENT, MONTHLY RECEIVING ADVANCE TO VENDOR
STORES TOOL COSTING REPORTS
MODVAT COPY,GR
CHALLANS & GATE PASS
T
REQUISITION FOR CASH PAYMENT PAYMENTS (CASH, IMPREST)
ALL DEPTT.
RELEVENT INFO. FOR MUL COSTING
S STAFF ADVANCE, TA BILL CLEARANCE
ALL DEPTT.

ANNUAL BUDGET COMPUTATION OF TAX (SALARY) FORM 16

ANNUAL RETURNS TO RBI

MONTHLY RETURNS EXCISE DUTY ROYALTY, TESTING FEE TCK REMITTENCE
SALES TAX -QTR.RETURN MONTHLY RETURN TAX AUDIT, I.T. RETURNS L\C OPENING, IMPRT TRANSACTIONS
ASSESSMENT - INTIMATION TAX DEPOSIT BANK GUARANTEE
ST-38 FORMS DECLARATION ANNUAL RETURNS (TAX) MONTHLY RECON. - C\A
(Inwards /Outwards) CONCESSIONAL DUTY (SALARY / CONTRACTORS/Rent) MONTHLY RECON. - F.D.
CERTIFICATES (INTEREST / COMMSISSION ) MONTHLY RECON. - OF INTT.
QTLY RECON. - ON INTT. ON CC LIMITS

SALES TAX EXCISE INCOME TAX BANK

DEPTT. DEPTT. DEPTT.

SERVICET TAX CREDIT

MONTHLY RETURN (CREDIT)
S.TAX HALF YRL.RETURN

ASSESSMENT SERVICE TAX

DEPOSIT TAX

( U.C. Joshi)

Flow chart:
This flow chart has been prepared to show the proper working of the Accounts
department in the Minda Industries Limited in a simple way or step by step:

Purchase:
The working of accounts department started from the PURCHASE; Under this purchase
part the first step is the preparation of the Purchase Order (PO), this PO consists of the
complete information the product which has placed to the customer for buying.
Secondly, the purchase order is of different types. Two major are as follows:
a. regular purchase
b. capital purchase
PO includes the total purchase flow which is discussed below:

Purchase flow involves steps like:

i. Purchase Order (PO)
ii. Gate Entry
iii. Goods Receipt (GR)
iv. Flow and Inventory methods by ABC Analysis

Purchase Order:
Purchase department is responsible cell which is directly in contact with the vendors for
purchasing material. Before purchasing the material they prepare the purchase order
which is the mandatory step, as per the terms and conditions finalize with the parties in
which they provide the complete information regarding the product procurement.

Purchase order has been prepared in order to keep and maintain the proper records of
the transactions going on, which gives details like the quantity, item description, terms
and conditions to be applicable or instructions, vendor code, process, discount
allowed/received, surcharge, sales tax, total amount, payment terms and type: it means
through cheque or cash, freight included, terms of delivery, packaging charges and
insurance, validity etc. which has to be accurately correctly mentioned and checked by
the Department Head and later on approved from the respective authorities.

Gate Entry:
Gate Entry is the very important procedure of this Company, to represents and confirm
receiving of material during the whole purchase activities. At the time of receiving of
material by a Gate Keeper who are sitting in Gate have to complete the entry in SAP
and fill the columns like Party’s Name, Party’s A/c No., Challan cum Invoice number,
date and time of receiving of material, Quantity, Item Name and Specification.

Store Receipt Voucher:

After the complete process of the gate entry the material goes to the store and the store
keeper or the authorize member of the store prepares the Goods Receipt (GR). It is the
document in which the requirements have been fulfilled. Identification of the material is
mention in GR like Party’s Name A/c No. & Address, Challan Cum Invoice Number,
Gate entry Number and Date. P.O. Number and date, Item description, Qty. as per
Invoice, Qty Received Actual and Qty. Accepted / Rejected. In SAP.

After all these activities the material entered into the store is strictly inspected by the
Quality department. Quality department is the branch which checks or measures the real
or the perfect quality of the product that the product should be categorized according to
the reasonable standards of accuracy. There after the GR would be approved by the
Quality Head and sign the same.

During this planning horizon, certain activities take place:

a. GR No is written on vendor’s bill/Invoice and then forward to accounts

department.

b. Responsibilities of account department are to provide the detailed information

related to: Party’s Name A/c No. & Address, bill number, date, basic rate of
items, then it is verified with the Purchase Order automatically by the SAP
System.

c. If it is required to prepare the Debit note then the system automatically generates
the same.

d. After the above steps it shows the bill and approved amount to ask for the
approval of the bill.
 e. And finally the approved bill amount goes to the party’s ledger.

With all those formalities; different type of reports has been prepared in the system.
Reports like: party’s ledger, sundry creditors, trial balance, creditors aging.

FLOW AND CONTROLLING OF PURCHASE BY ABC ANALYSIS

Now the procedure begins with the Vendor’s. The original copy of the bill is handed over
to the transporter and then it is received by the store (Gate) with the other required
documents like GR. After receiving the bill from the vendor placed all these things to
their Quality Circle and quality department send their team of quality inspector to check
out whether the inventory is absolutely perfect or not, if the quality department approved
the inventory then the bill is later on pass to the Accounts department for the final
approval.

It also includes the preparation of the Product Cost Sheet. This product cost sheet takes
Bill of Material(BOM) in its account, Bill of Material is listing down of all the items in a
single document, the copies of this BOM are send to Account’s, Purchase, Design and
to production department. There are Five copies of this BOM which are Master,
Duplicate-Triplicate, Quadruplicate and Control copy. The Performa of BOM is shown
below;
 Daily production 800 p
c
3 15
ABC ANALYSIS OF TL 800 CC CAR-MUL

value %
MAX.
S. No Price( Volum 3Da 15 value value cumm STAT
No
Part Name
off Rs) e ys Days 01 day 03 day
15 age
%age US % invtry INV.
days Cost
VALUE
Wiring 240 34800 19.0
1 harness 1 29.00 800 0 12000 23200 69600 0 9 19.09 A 7.14
PP FPT 20% 43 104 33669 18.4
2 (gms) 5 64.50 348 4 5220 22446 67338 0 7 37.57 A 6.91
Pmma Red 18 58474. 29237 16.0
3 (gms) 5 131.70 148 444 2220 19492 8 4 4 53.61 A 6.00
Bulb 12/21 240 18576 10.1
4 amber 1 15.48 800 0 12000 12384 37152 0 9 63.80 A 3.81
240 13068
5 Bulb 12/21-5 1 10.89 800 0 12000 8712 26136 0 7.17 70.97 A 2.68 86233.60
240 12600
6 Gasket 1 10.50 800 0 12000 8400 25200 0 6.91 77.88 B 7.76
240
7 Bulb 12/21 1 7.21 800 0 12000 5768 17304 86520 4.75 82.63 B 5.33
Pmma clear
8 (gms) 55 121.00 44 132 660 5324 15972 79860 4.38 87.01 B 4.92
Hot melt
9 (gms) 20 295.00 16 48 240 4720 14160 70800 3.88 90.89 B 4.36 72636.00
240
10 Inner lens 1 6.22 800 0 12000 4976 14928 74640 4.10 94.99 C 22.98
Vent. Pipe 720
11 Assy. 3 0.95 2400 0 36000 2280 6840 34200 1.88 96.87 C 10.53
480
12 Screw (L) 2 0.57 1600 0 24000 912 2736 13680 0.75 97.62 C 4.21
144
13 Screw (S) 6 0.14 4800 00 72000 672 2016 10080 0.55 98.17 C 3.10
480
14 Screw+ oring 2 0.41 1600 0 24000 656 1968 9840 0.54 98.71 C 3.03
Rubber 480
15 washer 2 0.40 1600 0 24000 640 1920 9600 0.53 99.24 C 2.96
480
16 Screw(M) 2 0.38 1600 0 24000 608 1824 9120 0.50 99.74 C 2.81
165960.0
480
17 PP washer 2 0.20 1600 0 24000 320 960 4800 0.26 100.00 C 1.48 0
324829.6
12150 36452 18226 100.
TOTAL 9.6 8.8 44 00 0
Inv . No of 2.
days 67

A CLASS=1 B CLASS= 3 C CLASS= 15

DAY DAYS DAYS
The Bill of Material BOM is the fundamental procedure involved in the Purchase. Under
this process of BOM the SWOT Analysis of the products has been done which clearly
defines the strengths, weaknesses, opportunities and threats of the items. ABC Analysis
is done for the bill of material prepared. ABC Analysis is done basically to put the
material in the right category according to quantity, quality, percentage of the cost, price
of the product, values of the days and the status of the product actually is or any other
characteristics of the material. It is used as a technique to analyzing the BOM or to find
out the Break Even Point (where the organization is at the constant stage/no profit and
no loss). Under the ABC Analysis ‘A’ category means the products which involves high
cost, ‘B’ category means products which are having less cost than the category A and
the last category is ‘C’ the class of that products which are having very less cost
compared to A&B . ABC Analysis is done in any organization to know the effects on
working capital, to do better manpower planning , documentation, time saving and
proper space utilization to help out our self from facing an uncomfortable situations.
Some of the techniques have been used by the organizations to do these analyses such
as FIFO, LIFO, HIFO, Weighted Average Method etc. Right now in this Industry follows
the FIFO method(First in First out).

Marketing:

Marketing is the most important cell who play a major role in working of an
Organization or say in another words “IT IS BACK-BONE OF A COMPANY” who
find-out the various source and methods for how to reach the customers. The
Marketing department display the whole products range to customer after a
complete satisfactory reports thereafter the negotiate them price ,terms and
conditions. Customer who are totally convinced and prepares PO’s in favour of
consignor against those goods which was agreed in earlier discussion .

Now marketing department have to obtain the information for supply of goods in
shape of PO’s raised at customer end .The information mention Like : Quantity,
Item Name, Terms of delivery , prevailing customers price, insurance covered risk, other
taxes (excise duty, sales tax). Thereafter marketing member supply this information to
production team as well as Accounts Department to ensure the supply of material as
per framed schedule which was given by customer in earlier.
Marketing is the mandatory step in the proper working procedure of an organization for
e.g. In this Industry the lights, lamps, horns and many other items of 2wheelers and 4
wheelers are producing. This Industry requires such a procedure to make their product
more important in the Market, to sale their product, to identify the supply order, to create
demand for their product in the market and lastly to make the product more useful to the
customers. So this Marketing is the technique can fulfill all the requirements of the
organization regarding their product.

The main target of adopting the Marketing facility is to:

a. Fix the price of the particular item.
b. To place the order of the item which is in demand?
c. To satisfy the respected customer.

Marketing serves the organization in other way also by providing the detailed information
regarding the yearly sales estimation and the Monthly indent quantity. Marketing
provides the information about what should be the yearly sales by examining the
conditions prevails in the market. Marketing department collects the information/data and
interprets the total requirement regarding the sales matter i.e. how much quantity is
needed or demanding by the customers? Is production is beneficial for the
organization? if yes, then the quantity in real terms; how much increase or decrease in
the quantity demand change? comparison of previous year sales with the current one.
This is done on the basis of last year data available and the data is compared with the
present year’s data and finally drag out the results. This is done to fix/set up the target
for the financial year and better management and planning in the organization.

Secondly marketing is useful in case of Monthly indent quantity. On the basis of the
orders present in the hand it is calculated that what will be the present months target to
produce, what is the particular amount requirement in this month. Marketing also
performs the function in favour of the yearly sales forecast and all.

With the help of the information provided by the Marketing department it is easier to
dispatch the goods to the customer because we are having clear instructions or the
exact information regarding the data that how much, when, where, rate everything is
clearly defined and we had already studied the whole hierarchy so it is the very simplest
procedure to dispatch the goods to the customers.

When everything is clear and the complete procedure has done the customer has to pay
the amount for the goods which had purchased by him. The procedure of the payment is
done when the conditions between the both parties are fulfilled, and the amount of the
payment has already been setup. The period of payment is also setup by the both
parties or it is the agreed ratio, it could be 30 days, more than 30 days or it could be less
than of these. Customer can make the payments in three ways:
i. Direct payment through cheque or either by demand draft.
ii. Through bill discounting (By banks or by financial institutions).It depends upon
the mutual understanding between both the parties, i.e. which terms and
conditions are more beneficial for the organization. E.g. SIDBI
iii. Through Inland letter of credit (ILC). It is the dealing done between the banks of
both the parties, it is the direct involvement of the banks only, payment is given
or taken by the banks itself not by the parties.

SALES PROCEDURE:

Steps:
i. Enagare (By Electronic Mail System)
ii. Downloading of Goods supply schedule
iii. Invoicing as per delivery schedule
iv. Dispatch to transporter to Customer
v. Online Dispatch of material

Under the sales procedure the first and the most important step is to issue the Enagare.
This document is issued by the Customer/Buyer or the party who is going to take the
delivery of the products. Enagare is the document which is having the details of the Item
like: what item or product is required by the organization, at what cost of production ; unit
is agreed to sell the item, at what particular time the item is need, the proper address of
the place where the goods should kept, as well as the email address of the organization
who is going to buy the item with the clear information regarding the date and the time of
the dispatch of the goods .
The second step is the Downloading of the information needed for doing the supply.
Downloading is basically the collection of the useful information which is necessary for
manufacturing the product. The information in the sense that what are the basic and the
major responsibilities of the firm while producing the product in accordance with the
satisfaction of the others, which is collected from the internet by entering the right email
ID of the related firm.

Invoicing of the items or products as per delivery schedule means that the particular
identification number of the delivered product which also mentioned the quantity, its
code which has already been decided which has to be perfectly checked and after that
entered in the invoicing accordingly customer wise schedule which are actually
involved in the dealing procedure.

Date of delivery of the goods is the other required step under the sales procedure. It is
already specified in the invoice receipt at the time of the distribution of the goods. Now
the turn for the last and the final step is the dispatch of the items to the transporters.
Those transporters generally hired by the firms for the dispatch of their products
manufactured for e.g. This Industry have its own transports facilities.

Sales flow:

Sales flow is the process which is carried forward by the Marketing department. This is
the duty of the Marketing department to collect the Purchase Order from their customers
in order to collect the data which is required for the preparation of the sales forecast,
sales forecast is maintaining the sales targets in advance and with the help of this sales
forecast and considering this, marketing department give their schedule to production
cell for make it their production planning in every 1 st of month . It means in
accordance with the forecasting information the further production of the organization is
directly linked. Marketing department submits the copy of all these things to the accounts
department for further procedures or planning makings.

There after production department prepares their own plans and bring the production
procedure in action. After the whole of this production procedure the movement slip is
prepared by the production department and thereafter the quality department makes
their final inspection the put the seal of ok and sign the same and handed over to
the bonded store member ,at the last material comes into the Bonded Room.

On the basis of the Purchase Order, the accounts department visits the website of their
customer on which the customer has prescribed its daily requirements which has been
further submitted to the site’s address. Accounts department makes the processing keep
on going which includes downloading of the schedule of requirements of the customers
and thereafter on the basis of the schedule Accounts Department checks the stocks
available in their Daily stock register i.e. R.G.I(given in annexure) and thereafter
prepares the sale invoicing in which all the details of the material has to be given. As per
customers requirement there should be proper bar coding is necessary to be mentioned
on the invoices.

Administration:

Administration consists of the performance or management of transactions and

other matters, and the making and implementing of major decisions. Administrator can
serve as the title of the General Manager who reports to a corporate board of directors.
Administration is playing the key role in the management working. It is the branch which
administers the proper communicational relationship between the different departments
working in the organization. This is the responsibility of the administration branch to
monitor the major processing done by its different department.

This is the responsibility of the Administration department to have a proper structural

based on criterion of the Payroll subject. This Payroll includes the facts related to the
Basic pay structure of the employees of the organization, arrear information; in case the
company is providing some provisions against this, HRA records are also prepare under
this Payroll, it also include the city compensatory allowance (CCA), uniform allowance,
conveyance allowance, canteen allowance, special allowance, children education
allowance and the sum total of all these items written above is the gross salary of an
employee in the organization and this is the basic definition for the Payroll. Total of all
these is the Gross salary which is received by an employee of the company and in other
terms it is the Total Cost of an employee to the company. The basic structure of the
Payroll with in the company is as follows:-
 Basic pay=100%

HRA=40% (For Excutive),60% (For Associate & Deputy Manager),

Company P.F=12%

CCA=10%

So it is the duty of the Administration department to compensate their employees against

the services provided by them in the form of wages, salary’s, and other fringe benefits.
Therefore the salaries of employee’s are distributed to them according to their job
performed.

This is the role performed by the administration department while we are considering the
processing of the Accounts Branch in any organization.

Import:
Import is the other procedure which is considered as an important part of the Accounts
department. Import is the part of the Commerce, transaction done for placing the order
of the required material from abroad. Imports are done when the material is not present
with in the country, if the available material is not up to the mark/the quality of the
material is poor and we can not make productions with using that material. In India also,
so many products are categorized in the list of the items which are imported from the
other countries such as tools and equipments.

Every company which is dealing in Import and Export must having an IC code(Import
and Export code) and this code is allotted by the custom department. Import is basically
done to produce the product according to the technological requirement and to fulfill the
requirement of the product. It is done to get the better response also. Minda Industry is
importing many items from different countries such as:
 a. Bulb holders from Japan
b. Bulbs from France
c. Coupler and Terminals from Taiwan
d. Silicon Monoxide from USA etc.

While importing the materials from the foreign countries first of all Production planning is
done with the help of Production Planning Control technique. Under this the decisions
regarding the quantity required, cost offered, total charges imposed and other required
information related to the importing policy is taken into the consideration with the
applicability of all terms and conditions. And after all this process the duty begins with
approaching to the Import head for fulfilling all the other legal requirements. And the
procedure of Import started on the Schedule basis (Weekly, Fortnightly and Monthly),
Sales Supply Order or it is adjusted according to comfort of the organization. During this
import procedure a document related to the import procedure is also submitted to the
foreign country and a bill of entry is prepared by the country itself. And the custom duty
charged on the goods is paid by the importer when the goods have been received.

The procedure of the import is as same as like the Purchase schedule; raising of PO,
Capital Indent Justification (CIJ) and then at the last send to the Accounts department
for the remittance which is done on the basis of the Performa invoice, which is consisted
of the applied terms and conditions accepted by the both parties i.e. importing and the
exporting parties. After importing the goods from the foreign country now the turn is for
paying the amount the exporting party. And this could be done in different ways either in
the form of TT (Telephonic transfer) or either by Telex method and by Demand draft
(which is the international transaction used by different countries to make the payments
clear).

Payments could be done either on the Credit basis also; under this credit basis payment
system payment could be made through the help of foreign letter of credit. This letter is
the base for the agreement between the both parties, payment could be made or receive
by banks only. When the material is dispatch by the party thereafter the payment is
released by the other party too. It is having the credit period of the 90 days which is the
secure letter of credit period for any organization.
Accounts department will collect the Purchase Order and the Performa invoice prepared
by the consigner. In this Performa invoice the concepts like: Invoice copy is taken which
is having the details like item code, serial no., rate, quantity, amount secondly terms and
conditions are mentioned such as material will be imported on FOB basis and CIF basis.
Under this FOB basis, import is done under the condition that the country who is
exporting its material to the other country is responsible at the certain limits or the
boundary such as ports for the delivery of the material it means the total cost which the
material is required to reach at the ports is beard by the country itself, but after crossing
the regions of the ports the responsibility is transferred to the other party, and in the case
of CIF it is slightly different while comparing with the FOB, under this the total
responsibility is of the exporter country to safely deliver the products to the other country
or the cost is beard by the country itself until the goods are not delivered to the
boundaries of the other country. And at the last other terms and conditions are
expressed in this Performa Invoice which includes the mode of payments like: DD,
Telex, FLC.

Under the whole procedure of this import another document is prepared which is

Here we are taking the examples of Minda Industries Limited which is importing Raw
Material like: Lens, Plastic, Bulb etc. from Taiwan (TYC). Against this called as Foreign
Document, it is the legal document which covers the following details:

i. Request placed by the vendor’s (Requisition letter)

ii. A1/A2 paper: A1 document is made for keeping record of the physical
material/items and the A2 document is prepared to keep records of the non
physical items which we cannot see but we can have the detail information of the
services rendered by that product.
iii. OGL (Open General List)
iv. Declaration cum undertaking
v. Copy of Invoice and Performa

After whole this procedure material is imported, there also have some legal obligations
for importing the material from abroad which is consist of
 1. Issuing of Bill of Entry in favor of Consignee in terms of :
a) Importer Copy
b) Exchange Control Copy
c) Excise Copy
d) Custom office’s copy

After receiving the material to close the transaction one copy of the exchange control is
send to the Foreign Department Bank because it is the respective authorized dealer of
RBI.

2. Issue: It is basically concerned with the submission of the legal

documents on time to their respective authority, also includes the information
related to import and remittance of the material.

Custom Duty: It is charged on the material which we are importing. Except few items
which are exempted under the custom tariff for which we will not have to pay the custom
duty but other than these items on the other items we will have to pay custom duty
usually as per the schedules decided transaction the Minda Group have to pay the
custom duty there on.

E.g. suppose a material’s basic housing price is 36.45 dollar on FOB

basis, so the custom duty will be calculated as under:

1 dollar = 43.80 Rs. As per Indian currency so

Basic Price of Housing/Lens=36.45*43.80=1596.51 this is the FOB

Add: freight cost=10% i.e. 159.65=1756.16

Insurance=1% 17.56=1773.72 or it is called as CIF

That is total cost of Imported Material.

Now the custom duty will be charged on the computed value:

 Basic = 30% i.e. 1744+532=2306 in which we are going to add 16% of
Counter Value Duty i.e. 2306+617.35=2923.35 then we add education
cess upon this i.e. 2% which is =2% of 617.35=12.35 which is added to
the 2923.35+12.35=2935.70 this is the total value on which we charged
4% special additional duty (SAD) =117.42

2935.70+117.42=3053.12 it is the net value comes out in front of us.

Above written is the whole procedure of the Import in which the total involvement and the
working of Accounts Department has the main role.

Production:
Production is defined as producing something when there is such requirement of any of
the product. Accounts department also works upon this part. Production is the real
source of the income for any industrial organization. Organization is established only for
the purpose of solving the problems of the customers related to production of the
products. It is the foremost step in an organizations working. Production is done on the
daily basis it means an organization is involved daily in the work of production. Daily
production includes production of the items which are required for the organization on
the daily basis or which is the usual item produced by the company. This production is
the involvement of the tools and equipment, technology, manpower, money and all.

Movement Slip -: It is a proper document which is prepared according to the legal

requirement. This process will be done after procuring the material, which is taking the
shape of final product or called as Finished-Goods. Thereafter the PDI (Pre Dispatch
Inspection) ensures the correctness which is done by Quality Assurance person and
then after doing this the instructions are given to the team members to paste OK green
sticker there on and then finally Movement Slip issued for product which is manufactured
and shifted from that place to bonded room where the final product kept, through the
Movement Slips and having two copies of this, which are send to the under written
departments-:

a. Accounts/Excise (Green)
b. Logistics (Dispatch Department) (Yellow)
The copies of this movement slip are sending to these departments for updating the
records which are helpful for the Excise Authority in the organization.

ANNUAL BUDGETS, DAILY AND WEEKLY REPORT is also prepared, because these
reports are very much beneficial for the proper working of the Management with in the
organization. Reports are taken as:

Under the outflow process of the System flow chart prepared by the Accounts
department, the management is used to prepare the Annual Budget, Daily and weekly
reports for the proper working of the industrial organization and the proper growth as
well as the development of the organization.

The Daily Report consists of the current day’s production budget i.e. how much
production is required or needed, it is decided in advance .Everything means from the
very beginning of the production what so ever is required for egg. Raw material, financial
requirement, labor requirement, machinery, tools and equipment etc. all these things
have to be decided in advance. Then after this the indent received, modified indent, what
should be the basic target is to be achieved has to be decided.

After all this the production procedure is done according to the budgeted point of view
and then the product is sold in the market or to the customer/buyer. Then their might be
some comparisons done between the Indent received and the Actual sales. The daily
report is the collection of the critical items to be known, quality problems, new products
launch, IT complaints and other requirements at the time of the production or after the
production. And at the last the whole data or the information is entered into the records
maintained or in a proper manner in the Books of account. This is the basically what a
daily report is.

And the other two which are Annual Budget and Weekly Reports are also prepared by
the Accounts Department in the same manner, but the data is not taken here on the
same basis like Daily Reports, where as the data or the information is taken on the
weekly as well as annually basis.
STORES:
Store is the part or the branch of the accounts Department where accounts Department
perform its duties in favor of this department. Store is the place where Raw Material is
kept to be used by the various departments in the organization according to the need
and requirement of the various departments.

The processing of store is done with the preparation of Invoice first of all. Thereafter the
actual work of the stores department starts in respect with Accounts department. The
Invoice of material is prepared and it is handed over to the Store. After this all the
documents related to the legal requirement is properly checked which includes the
documents like: original invoice, mode weight copy, PDI (Pre dispatch Inspection) report.

This PDI report is the report regarding the physical material present in the store, it
includes the information regarding the facts that the material is sufficient/up to the mark,
and more requirement is there/less material, Shortage of the material. These are the
three situations which always exist in the store.

Having these three situations in the store, it raises the need of the material and material
requirement remittance is given. Then the material enters into the organization’s
premises. Thereafter the gate entry of the material is done in which the party’s name,
serial no, bill no, date and quantity is shown here. After the gate entry the next step is to
make an entry of the material in the personal computer of the store department and
entry is done by the store member in SAP. Material should be absolute as per challan
and as per actual receive. This challan is the legal document which is signed by the
authorized person, it is the required document which is necessary or must for the
material.
Purchase Order plays an important role over here because without this PO entry of the
material is restricted to be entered in the stores ledger. And when the Invoice and SRV
are approved thereafter Accounts person is allowed to sign the document called Receipt
Material (Credit). Then SRV is send to the Quality department for inspection of the
component and quality person inspects the component if the material is not having any
fault then the quality person approved the product and In case the material is not good
or having fault like damages and scratches over them then in that the material is
Rejected by the quality in charge and this process is called the rejection procedure.
When the component is approved by the quality person then the Material is finally send
to the main store and an entry has been placed for entering the material in the ledger of
the main store. This is the processing of Material Receipt. Thereafter material is kept in
the main store. Each department raises its requirement according to their need, for this
purpose Requisition slip has to be prepared by the different departments. In this
requisition slip the entire department represents its demand for the following product and
its quantity also. And according to the quantity issued to the department the same
quantity is subtracted from the ledger of the store. This Requisition slip is prepared for
the any product. In the processing of the stores one more process takes place it is the
issuing of the Job Card. This job card is issue when the order comes into the department
for issuing the material with the respective quantity, so this document is issued.

ALL DEPARTMENTS:

Accounts department performs very important role related to all departments in the
organization. All departments mean HR, Marketing, Finance, Marketing, Production,
Banking and insurance and others. Accounts are the main head of above written these
departments, because Accounts department is the one which keeps and maintain
records of these departments.

All these departments approach this Accounts department for the requisition of cash
payments. All the vouchers have been cleared by the Accounts department itself or any
of the requirement of any of the department is fulfilled by the Accounts department. All
departments done their scheduling activities which are assigned to them by the
management of the organization and make the proper records of all the activities done,
to claim the total cost which is occurred for them. Then every department check the
records maintained by themselves and then after checking out the records these records
are sent to the Accounts department for doing the whole processing in the accurate
manner and to keep the records of the all the activities of an organization.

All the departments then prepare their requisition slips for the cash payments, for issuing
of the cash they will provide the relevant information which the Accounts department
wants from them. Then the Accounts department issue cash to the different departments
according to their requirements.
Role of Accounts department includes the activities like:

a. Advance payment to the staff members.

b. Providing traveling allowance to the employees.
c. It is the other responsibility of the Accounts department to clear all the bills of the
different departments.
d. It is the duty of the Accounts department to compute the taxes.
e. Accounts department also distribute the salary of the employee.

OTHER ROLES PERFORMED BY THE ACCOUNTS

DEPARTMENT

It is the responsibility of the Accounts department to maintain the proper records of the
each and every activity done by any of the Department in the organization. There are so
many other roles which the Accounts department has to perform. In these roles the first
activity is to maintenance of Accounts books, the second role is preparation of
management reports and the third is very important role, which is to take care of all
statutory records.

Right now we are describing here the aforesaid roles which are as under-:

a. Maintenance Of Records
b. Management Reports
c. Maintenance of Statutory

Maintenance Of Records : Basically the role of Accounts Department is to

updating the day to day transactions in books, so that the information & respective
statement will available at any time like - : Preparation of various types of voucher
which are related to staff’s reimbursement and other tour bill etc . (Cash /Petty Cash /
Journal /Bank Voucher) and 2nd is proper recording of Purchase and Sales Invoice.
On that basis the accounts member who are responsible for finalization of these
accounting transactions, are scrutinized these head wise in the accounts so that all
necessary transaction will be shown in a proper and correct manner.
Management Reports: After doing the proper postings in the accounts books the team
member who is appointed and responsible for the preparation of Management Report
will start preparing these reports. The every Management demands the various reports
on its own Company structure or requirement basis report , but the Mechanism / Thumb
rule is generally same because it is a standard that would be based on C.A. Institute
guide Line . On that basis a Corp. Finance Head whose duty and responsibility is to
makes plan and give a right direction or picture in front of Company’s Director as
well as Shareholders.

In this Unit the following reports have been prepared for management’s aspect as well
as statutory or Tax planning point of view which is as under:

Management related:

Daily Reports: It is a plant summary sheet (format attached) where the day to day data
of sales /purchase/ Quality / Tool Room/ I.T. And staff’s /Operator activities have
been monitored and checked date wise and finally at the end of the month it has been
summarized.

In the next month the management reviews that : why and how the sales or
purchase is not in time or less then the target decided. Why production is not done
according to the monthly Indent etc. The DAILY REPORT help the top management
to know that how and when an unit have the requirement of more or additional, financial
or technical need or how much additional manpower is required to complete a fixed
production or an additional production on the demand of customers . Basically the
idea of top management whose responsibility is to review this report and to take the
correct decision and freezed those parameters which are observed during the
monthly reports so that, In future we will not loose our sales target because the sales
achievement is the major role in every Organization and on that basis, the company
expands its plant capacity or to plan for new projects .

Quick MIS: It is the gist of Monthly Income Statement (MIS) on that basis the company
just go for the tax planning and as well as know the quick profit earning ratio.
MIS: In every company the accounts department prepares Monthly Income
Statement, it is a detailed statement. MIS is the system, which make available
the right information to the right person, at the right place, at the right time, in the
right form & at the right cost.

Davis & Olson has expressed the meaning of MIS as: “MIS is an integrated user-
machine system for providing information to support operations, management &
decisions-making functions in an organization. The system utilizes computer
hardware & software, manual procedure/models for analysis, planning, control &
decision-making & database”.

Kelly has expressed the meaning of MIS as: “MIS a combination of human &
computer based resources. Which result in collection, storage, retrieval,
communication & use of data for the purpose of efficient management of
operations & for business planning?”

Characteristics of MIS
MIS was envisioned as a single, highly integrated system, bringing data processing for
all organizational functions, MIS is now viewed as a federation of subsystems,
developed/implemented as needed but conforming to an overall plan. Each sub-system
consists of: production, Inventory, finance, marketing etc. there could be functional sub-
system as well as activities sub-system as illustrated below:
Functional Sub-systems
Marketing Sales forecasting, sales planning, customer & sales Analysis

Manufacturing Production planning & scheduling, cost control

analysis

Logistics Planning & control of purchasing, inventories, distribution

Personnel Planning personal requirements, analyzing performance,

salary administration.
Finance & Financial analysis, cost analysis, capital requirements
Accounting planning in income measurement

Information Information system planning, cost –effective analysis

Processing
Top management Strategic planning, resource allocation
 Activities Sub-system

Transaction Processing processing of order, shipments & receipts

Operational Control scheduling of activities & performance reports

Management Control Formulation of budget & resource allocation

Strategic Planning Formulation of objectives & strategic plans

Under this report the following information are required in which details are as
under:

a) Top Sheet of Balance sheet

b) Profit & Loss A\c for and Upto
c) Profitability Analysis for and Upto
d) Depreciation Chart
e) Head wise expenses sheet

i. Sales

a. Variable Cost
• Raw Material Consumption
• Manufacturing
• other Cost
b. Fixed Cost
• Personnel Cost
• Administrative Cost
• Selling &Distribution Cost
• Financial Cost

ii. Stock statement

iii. Debtors and Creditors age and bill wise details
iv. Advance from Debtors
v. Advance to Creditors
On the afore said report basis the top management review this report with Budget Vs.
Actual statement, Working Capital and unnecessary holding of Inventory and advances
to Creditors and as well as also review the legal part Like :

a. No. of Labor Law case are pending

b. Defaults of taxes OR Annual returns of I.TAX/Sales Tax/Excise /Service Tax etc.

Maintenance of Statutory : A company which is registered under the Company Act

1956 has to maintained the following legal records .

A) Central Excise Duty

Central Excise duty is an indirect tax which is levied and collected on the
goods/commodities manufactured in India. Generally, manufacturer of commodities is
responsible to pay duty to the Government. This indirect taxation is administered through
an enactment of the Central Government viz., The Central Excise Act, 1944 and other
connected rules- which provide for levy, collection and connected procedures. The rates
at which the excise duty is to be collected are stipulated in the Central Excise Tariff Act,
1985. It is mandatory to pay Central Excise duty payable on the goods manufactured,
unless exempted eg. Duty is not payable on the goods exported out of India.

1. Duties under Central Excise Act - Basic duty and special duty of excise are l
levied under Central Excise Act. Basic excise duty (also termed as Cenvat as per
section 2A of CEA added w.e.f. 12-5-2000) is levied at the rates specified in First
Schedule to Central Excise Tariff Act, read with exemption notification, if any. The
general rate is 16% w.e.f. 1-3.2001. There is partial exemption of 8% and 4 % to a
few products. Some commodities like pan masala, cars etc. are leviable with special
duty

2. Additional Duty on goods of special importance - Some goods of special

importance are levied Additional Excise under Additional Duties of Excise (Goods of
Special Importance) Act, 1957

3. Cess - A cess has been imposed on certain products.

 a. Every manufacturer of dutiable excisable goods
b. First and Second stage of dealers (including mfrs.) desiring to issue Cenvatable
invoices.
c. Persons holding warehouses for storing non duty paid goods
d. Persons who obtain excise goods for availing end -use based exemption
e. Exporter –manufacturers under rebate /bond procedure or 100% EOU
f. Persons who get yarns ,fabrics ,readymade garments etc. mfg on job work rule
under 12b
The exempt from registration:

i. Mfg. of goods which are chargable to nil rate of duty are fully exempt.
ii. SSI (Small Scale Industry) having the turn over up-to 4 crore.
iii. Job workers of goods under chapter 61 & 62 on behalf of another person who
undertakes to pay duty and comply with all the procedures.

Return Frequency: ER-1 on or before of every 10th of Month

Duty Deposit in Personnel Ledger Accounts (P.L.A.)on or before 5th of Month

Books Maintenance:
 Daily Stock Register (DSA)
 Entry posting in RG 23 A PART-I
 Entry posting in RG 23 A PART-II
 Entry posting in RG 23 C PART-I
 Entry posting in RG 23 C PART-II
INCOME TAX: A tax levied on net personal or business income.

Income Tax Rates in India - Last updated

Table of Income Tax Rates in India for an Individual, HUF, AOP’s, BOI’s in (2010 - 2011)

Tax % Income (INR)

0% Up to 1,60,000
10% 1,60,001 – 300,000
20% 300,001 – 500,000
30% Above 5,00,001

• A 10% "surcharge" is applicable to income in excess of INR 1000000 for 2006 -

2007.
• From April 2004, there is an "education tax" (CESS) of 2%

Reporting Dates and Payment

• The tax year in India begins on April 1 and ends on March 31.
• An individual whose income is from a business must submit an annual return by
October 31. There is a fine of 10% of the tax payable for each month's delay.
• An individual whose income is from a wage or whose income is subject to a
deduction of tax at source is exempt from submitting an annual return.
• An advance payment must be made on 3 dates - September 15, December 15
and March 15.
• There is an official body in India that deals with the subject of pre-ruling in
connection with tax problems that are presented for discussion.

Taxation of Employees
• An employer is obligated to deduct tax at source on a monthly basis from a
salaried employee and to make additional contributions to a provident fund and
insurance.
• The employer's contribution to national insurance in India for an insurance plan is
4.75% of the salary. The employee's contribution is 1.75% of his salary.
Other TDS Deductions:

The following payments are subject, in India, to a deduction of tax at source:

• Dividend - 0%.
• Interest - 10%
• Royalties -2%.
• Contractor 2%
• Legal & Professional 10%
• TCS 1%
• Rent 10 % in case of company or 15% other than company
• A 10% Surcharge" is applicable to income in excess of INR 100000 for 2010 -
2011.
• From April 2010, there is an "education tax" (CESS) of 2%.
• From April 2010, there is an “S.H.Ed.” 1%

Sales Tax:
A tax levied on the retail price of merchandise and collected by the retailer.

Tax levied on the sale of goods and services that is usually calculated as a percentage
of the purchase price and collected by the seller.

Sales tax, levies on the sale of goods or services, generally calculated as a percentage
of the selling price, and sometimes called a purchase tax. It is usually collected in the
form of an extra charge by the retailer, who remits the tax to the government. It may be
levied each time a commodity changes hands as from manufacturer to wholesaler, from
wholesaler to retailer and is then called a transactions, or turnover, tax. Many oppose
the tax as being regressive, i.e., as placing a disproportionately heavy burden on the
poor; but it yields large revenue, and governments find it easy to collect. As of 1999, 45
states, the District of Columbia, a number of cities and counties, and many foreign
countries levied sales taxes. A modern variant of the sales tax is the value-added tax.

A sales tax is a tax on consumption. It is normally a certain percentage that is added

onto the price of a good or service that is purchased.

Ideally a sales tax is charged exactly once on any one item. A conventional or retail
sales tax attempts to achieve this by charging the tax only on retail transactions, not on
businesses buying raw materials for production or finished goods for resale. This
prevents so-called tax "cascading," in which an item is taxed more than once as it makes
its way from production to final retail sale. A related type of tax is the value-added tax, or
VAT. It is a system in which all businesses remit taxes on their sales, but they are also
refunded the amount of VAT remitted by their suppliers. In addition to avoiding
cascading, under VAT there is no need for government to determine which sales are
taxable and which are not, since all sales--retail and wholesale--are taxed.

Most countries in the world have sales taxes or value-added taxes at either the national
or local level. Countries in western Europe, especially in Scandinavia have some of the
world's highest valued-added taxes. Denmark, Sweden and Hungary have the highest
VATs at 25% although reduced rates are sometimes used. In some countries, there are
multiple levels of government which each impose a sales tax. For example, sales tax in
Chicago is 8.75%, consisting of 5% state, 2% city, 0.75% county and 1% regional
transportation authority.

Sales taxes are generally regressive, that is, poorer people tend to pay a greater
percentage of their income in sales tax than richer people, because they tend to spend a
far higher percentage of their income. In some locations, items such as food, clothing, or
prescription drugs are exempt from sales taxes ostensibly to alleviate the burden on the
poor. Some of these exemptions (such as exemptions for clothing or prescription drugs)
actually may make the tax more regressive, since poorer individuals may spend a
smaller percentage of their incomes on these items than do richer individuals.

Since the 1990s, the idea of replacing the income tax with a national sales tax has been
floated in the United States; many of the actual proposals would include giving each
household an annual rebate, paid in monthly installments, equivalent to the percentage
of the tax (which varies from 15% to 23% in most cases) multiplied by the poverty level
based on the number of persons in the household, in an effort to reduce the sales tax's
inherent regressivity. Chances of such a change ever being adopted are considered
remote by most American political observers.
 SERVICE TAX

Service tax presently administered under the provisions of Section 64 - 96 of the

Finance Act, 1994 as duly amended in 1996, 1997 and 1998 and the Service Tax Rules,
1994. Levy and collection of the tax is handled by the Central Excise Officers, duly
authorised for the purpose, in terms of Rule 3 of Service Tax Rules, 1994. Given below
are the provisions of Finance Act, 1994 and Service Tax Rules, 1994 in brief.

Finance Act 1994, as amended:

i. Section 64 specifies the name and extent of the law.

ii. Section 65 deals with the definitions of various services brought under tax net,
and the service providers with special reference to taxable services under section
65(41).
iii. Section 66 authorises the levy of service tax.
iv. Section 67 describes value of taxable services.
v. Section 68 deals with the payment of service tax.
vi. Section 69 refers to registration.
vii. Section 70 enumerates persons responsible for filing the returns.
viii. Section 71 deals with the assessment of service tax returns.
ix. Section 72 provides for best judgment assessment.
x. Section 73 deals with the value of the taxable service which has escaped
assessment.
xi. Section 74 deals with the rectification of mistakes.
xii. Section 75 provides for payment of interest on delayed payment of service tax.
xiii. Section 76 - 80 deals with various penalties.
xiv. Section 81 deals with offences by companies.
xv. Section 82 authorises search of premises.
xvi. Section 83 enumerates the various Central Excise provisions, made applicable to
the service tax.
xvii. Section 84 provides for appeal to the Commissioner of Central Excise (Appeals).
xviii. Section 85 provides for an appeal to the appellate tribunal.
xix. Section 86 describes powers of review, appeal etc.
xx. Section 87 - 92 deals with prosecution (deleted by Finance Act, 1998).
xxi. Section 93 provides for issuance of General and specific Exemption notifications.
xxii. Section 94 gives powers to make rules.
xxiii. Section 95 provides power to remove difficulties.
xxiv. Section 96 provides for making provisions of Limitation Act inapplicable to the
service tax provisions.

Service Tax Rules, 1994:

i. Rule 1 provides the name and date of Service Tax Rules.

ii. Rule 2 defines the act, assessment, form, half-year and the person responsible
for payment of service tax.
iii. Rule 3 deals with appointment of officers.
iv. Rule 4 deals with mode of registration.
v. Rule 5 deals with records.
vi. Rule 6 describes manner of payment of service tax.
vii. Rule 7 refer filing of Returns.
viii. Rule 8 provides for the form of appeal to Commissioner of Central Excise
(Appeal).
ix. Rule 9 provides for the form of appeals to appellate tribunal.

A number of provisions of Central Excise Act, 1944 have been

made applicable to service tax provisions. They are indicated
below in brief:

i. Section 9C - Presumption of culpable mental state.

ii. Section 9D - Relevancy of statements under certain circumstances.
iii. Section 11 - Recovery of sums due to Government.
iv. Section 11B - Claim for refund of duty.
v. Section 11BB - Interest on delayed refunds.
vi. Section 12A - Price of goods to indicate the amount of duty has been paid
thereon.
vii. Section 12B - Presumption that incidence of duty has been passed to the buyer.
viii. Section 12C & 12D - Consumer Welfare Fund and its utilization.
ix. Section 12E - Power of Central Excise Officers.
x. Section 14 - Power to summon person to give evidence and produce document
in enquiries under this Act.
 xi. Section 15 - Officer required to assist Central Excise Officer.
xii. Section 35F - Deposit pending appeal of duty demanded or penalty levied.
xiii. Section 35G to 35O - Provisions relating to High Court & Supreme Court.
xiv. Section 35Q - Appearance by authorized representative.
xv. Section 36A & 36B - Presumption as to documents and admissibility of
microfilms, etc. as evidence.
xvi. Section 37A - Delegation of powers.
xvii. Section 37B - Instruction to Central Excise Officers.
xviii. Section 37C - Service of decisions, orders & summons, etc.
xix. Section 37D - Rounding off of duty, etc.
xx. Section 40 - Protection of action taken under this Act.

Registration – Application for registration in Form ST-1 in duplicate has to be made to

the proper officer who will issue the registration certificate in Form ST-2 after the scrutiny
of the application.

Records – Records (including private or maintained under any law in force and whether
computerized or written manually) which contain the data of amounts received in lieu of
services should be neatly maintained and preserved.

Payments of Service Tax – Value of taxable services has to be computed in the

manner laid down in the Section 67 of Finance Act, 1994 and the service tax thereon
calculated @ 10% advolarem and education tax 2% on 10%. The tax is to be paid
through TR-6 challans in the nominated Banks by the due date in terms of Section 68
ibid.

Return - Return in Form ST-3/ST-3(A) has to be filed by the due dates in terms of
Section 70 ibid.
Service tax presently administered under the provisions of Section 64 - 96 of the
Finance Act, 1994 as duly amended in 1996, 1997 and 1998 and the Service Tax Rules,
1994. Levy and collection of the tax is handled by the Central Excise Officers, duly
authorised for the purpose, in terms of Rule 3 of Service Tax Rules, 1994. Given below
are the provisions of Finance Act, 1994 and Service Tax Rules, 1994 in brief.

Levi & collection of Service Tax:

In terms of section 66 of "the Finance Act, 1994 (32 of 1994) as amended by the Finace
Act, 2001 (14 of I- 2001) Service Tax at the rate of 5% is levied on the value of the
taxable service. The value of any taxable service shall be i Ae gross amount charged by
the service provider for such service rendered by him as laid down in Section 67 of the
Finance Act, 1994 as amended. Every person providing taxable service to any person
shall pay service tax in terms of Section 68 of, Act.

Rectification of mistake:

Section 74 of the Act, as amended, empower the Assistant Commissioner / Deputy

Commissioner of the Central Excise, as the case may be, to rectify the mistake apparent
from the records within two years of the date on which such order was passed.

Interest on delayed payment of Service Tax:

Section 75 of the Act, as amended, every person, liable to pay the tax in accordance
with the provisions of section 68 or rules made there under, who fails to credit the tax or
any part thereof to the account of the Central Government within the period prescribed,
shall pay simple interest @ 24% per annum for me period on delayed payment of
Service Tax.

Penalty:

In terms of section75-A of the Act, any person liable to pay Service Tax in accordance
with the provisions of section 68 or the rules made there under, fails to make an
application for registration under section 69, shall pay, by way of penalty, a sum of five
hundred rupees.
In terms of section 76 of the Act, if any person, liable to pay service tax in accordance
with the provisions

And at the last we just want to conclude the whole of the matter in few lines, in which we
are discussing the main activities done by the Accounts department. It is the duty of this
department to clearly maintain the records of the each and every activity performed in
the organization and to keep those records in the properly manner and in a systematic
way so anybody who wants to search any kind of the data for any of the purpose should
easily get that from the books of the Accounts.

Accounts basically help an organization to:

i. Depicts its financial position that where that organization stands in the
competitive edge of the various industries.
ii. It is helpful for the organization to represents its data collected in a proper format.
iii. To find out the assets and liabilities of the business.
iv. To know the Profit and Losses of the business.
v. To compare the financial results with the other year’s data.
PRESENTATION OF DATA

I have collected both types of data that is primary & secondary. Primary data are those
data which I have collected directly from the members, employees and through the
complete study of the organization and originally collected by me. I have also gathered
from the reports & records of the company. And the secondary data is collected from
the magazines, with the help of the projects made others, internet, records etc. I had
also conducted interviews of the officers as well as workers to know their opinion about
there job satisfaction level, motivational methods, welfare measures by the company. I
had used tables for presenting the data in other good way.
REASONS FOR APPROACHING MINDA INDUSTRIES LIMITED:

a. The basic idea to join as a summer trainee in Minda group because the
material is being supplied to World class company which are producing
large numbers of vehicles ( 2wheeler and 4wheeler vehicles) and they
have various types of systems for operating a unit. For e.g. Maruti Udyog
Ltd.

b. Now a day’s lot of economic downfall exists in the economy but Minda
Group is still performing very well as compare to the last 10 decades and
providing the best results according to their objectives already setup.

c. Minda Industry is continuously enhancing the new technology by

performing their activities by adopting the new and advanced
technological techniques and achieved their growth and developmental
status.

d. This organization has adopted the Joint Venture Policy. This policy is
helpful in the up gradation of the economy and technology as well as
providing mutual funds to the organization. Under this it has been working
with different countries which are considered as super powers such as:
USA, Japan, Italy, and Taiwan.
 TARGET

The target of any industrial organization is based upon the actual working style of that
organization. Every organization is having its own terminologies, rules, conditions and
priorities. Each organization is having its own MPCP’s (Managing points and check
points) which will be set up before starting of any project and manufacturing.

The targets of the Minda group are established as:

a. Earning maximum profit and increase production with the help

of minimum resources.
b. Implementation of ERP (Enterprise Resource Planning) in the
organization.
c. To reduce the rejections in the organization.
d. To improve the quality, & increase the goodwill of company.

Rejection is the situation when the product is rejected by the organization itself or by the
other party due to the minor defect in the quality of the material, when dimensions
mentioned are not according to the given criteria, when product is not up to the mark due
to any reason for e.g. a product is rejected when the quality inspector found even a
minor scratch on the product. Rejection is of two types: SRV rejection and Line rejection.

e. Customer Satisfaction:
Customer is supreme
Minda industries have taken over the responsibility to serve their customers in better
way, by considering these things:
We strive to understand and anticipate customer needs and exceed their expectations.
We are committed to offer innovative and value added solutions to our customers.
We always ask “How can we serve our customers best?”

f. Respect for individual:

Employees are treated here as members not as workers or laborers, they are having the
rights to express themselves in front of the management and to give their views towards
the better growth and development of the management. It is the duty of the management
to give respect to each and every individual or any other organization.
 SUMMARY

The sum and substance and jest of the study is that the working of Accounts
Department in this unit is quite good and all the decisions and plans related to the
development of the organization are taken into consideration according to the proper
rules and regulations or the priorities maintained in the organization. Organization had
already decided its limitations beyond which it will not work. The Management is taking
lot of interest for the development of their each department, frequent plans are
maintained, and the policy of ERP is applied in the organization. It means the
Administration is able to work successfully in the economy. So the company is perfectly
working in the professional styles. The studies surveys, interviews, questionnaire all
reveal positive points. Hence, the organization needs certain, other better solutions or
options for more development and growth.
 RECOMMENDATION

One the basis of my extensive as well as intensive study, however there is no need to
give suggestions to this unit because the Accounts department and the Management is
best to serve its effective services but we can offer the following suggestions to the
management of\ the company to improve on these parts for being the Top most
company in the world. The following are the important suggestions.

a. Applicability of such Software Packages (Computer system) which are

more helpful for doing the work of Accounts department , which saves the
time, money, reduce the manual work, provides much accuracy and suitable
for the Accounts department as well as all the departments are benefited by
that.
b. Employees of Accounts department must be routinely awarded for their
services provided and the company should develop participative which will
encourage employee’s involvement more & more.
c. Provide the proper training to all members of Accounts Department , time
to time.
d. Provide the batter working condition and equipment (As computer
system, Printer , Scanner) in the account department.
e. And at the last, Accounts department has to be approached the
Management to increase the number of the members in it.

It is hoped by me that if above recommendation are accepted and implemented by the

company. They will go a long way in improving the working of accounts department in
the company as well as Industrial Relation at the company. It will also improve the
Accounting system, satisfaction level of the people; it will raise productivity and
prosperity of the company. I am giving my recommendations and suggestion to Minda
Group’s to be adopted and implemented in the company. It will be my humble endeavor
and ambitious that the company adopts my humble suggestions to improve the lot of
the company.

In the end of this report, I want to say only that I have learned a lot during the
preparation of this project report and I had gained practical knowledge about the working
of Accounts department in an organization and which will provide help me to accepting
Finance Field as my specialization in my next semester. During the training period have
not found any weak point or any negative aspect in the working of Accounts department

but as I know that no one is perfect in any field so further requirements are there which
the Accounts department must follows or accepts. And some problems can be avoided
through the understanding adjustment, Co-operation, mutual trust & faith between the
employees and management.
 CONCLUSION

The Conclusion are derived from the data collected on the bases of remarks given by
interviewers and recommendations made at the time of the study of the working of
Accounts department in Minda Industries Limited. And the conclusion is that the
Accounts department in Minda Industries Limited is quite good as per their task
performed, their roles and responsibilities and all the departments are cooperatively
working with the Accounts department, and Accounts department is the root of the
industry, which gives full contribution in the compilation of data as well as necessary
reports generated for committing their targets with a maximum results by a minimum
efforts accordingly to management expectations. In another words it could be said that
“The accounts department is the backbone of the industry”.
 BIBLIOGRAPHY

1. FINANCIAL ACCOUNTING : J.R. MONGA, T.S.GREWAL

2. FINANCIAL ACCOUNTANCY : S.N.MAHESHWARI

3. ACCOUNTING PRINCIPLES : T.S.GREWAL

& PRACTICES

4. RESEARCH METHODOLOGY : C.R. KOTHARI

5. MAGZINES : BUSINESS WORLD, CII,

BUSINESS STANDARD

5. NEWS PAPER : THE TIMES OF INDIA

6. WEB SITE : www.mindaweb.com

www.incometax.com
www.excise.com
www.simpletaxindia.org