INTERNSHIP REPORT AT

In partial fulfilment for the award of bachelor commerce degree

from Bengaluru city university

BY
MAHENDRA A.M
(REGISTER NO: U18BH21C0031)
UNDER THE GUIDANCE OF
Mrs M.A. SUNITHA M. Com , MBA .M.Phil. (Faculty in commerce and
managaement)
(DURATION 6RD MAY 2024 TO 25ND MAY 2024)

BEL FIRST GRADE COLLEGE

JALAHALLI, BANGALORE – 560013

2023-2024
 DECLARATION

I, MAHENDRA A.M, SON OF B.CHINNAESHWARAMMA certify that the

project report entitled on “SHIVA ENTERPRISES” prepared by me is my
personal and is authentic work under the guidance of .
Mrs. Sunitha faculty in commerce and management.

Date:
Place: Bangalore
Name: MAHENDRA A.M
Register no:U18BH21C0031
Signature:
 ACKNOWLEDGMENT

The present work is an effort to throw some light on SHIVA ENTERPRISIS

“Water purifier sales & services (Domestic &commercial). The work would not
have been possible to come to the present shape without the able guidance,
supervision and help to me by number of people. I convey my heartful affection
to all those people who helped and supported me during the course for
completion of my Project Report.

DATE:
PLACE:BANGLORE
SIGN:
 INDEX

SL.NO PARTICULAR PAGE.

NO

01. INTRODUCTION

02. COMPANY PROFILE

a. Vision, mission, objective
b. SBU

03. INTERNSHIP EXPERIENCE

a. Inventory management
b. Bills reciveable
c. Bills payable
d. Costing
e. Purchase finance

04. LEARNING OUTCOME

05. CONCLUSION
INTRODUCTION OF COMPANY
1.company name
Shiva enterprises

2.abouts us
We are an EPC (Engineering, Procurement & Construction)
Company providing comprehensive
solutions for Water, Wastewater & Environmental Technologies
Business.
Whether you are anticipating to have a New Water (and/ or)
Wastewater Plant or rather Reengineering/Upgrading/
Refurbishing an Existing plants, Operation & Maintenance
Solutions,
Chlorination, Spare Parts or Chemical supplies MIDWATER
ARE PROUDLY THERE FOR YOU!

3.AREA OF APPLICANTIONS
Municipalities; Food Industries, Pharmaceutical, Oil Fields,
Petrochemicals, Power Plants, Rural
Areas, Resorts & Tourism, Marine, Camps, Pumping Stations, Army
Fields, Airports, Ports, Reverse
Osmosis (RO), Chlorination, Chemical supplies for plants, spare parts
supplies, Operations &
Maintenance, training, … and etc.
 COMPANY PROFILE

a. VISION, MISSION & OBJECTIVES

Vision
SHIVA ENTERPERSES
To be a world-class enterprise in professional water purifies
MISSION
To be a customer focused globally competitive company in WATER
PUERIFIER and in other
OBJECTIVES
chosen areas of professional , through quality, technology innovation.
To be a customer focused company providing state-of-the-art products &
solutions at competitive prices, meeting the demands of quality, delivery &
service.
To generate internal resources for profitable growth.
Quality Policy:
"Meeting & exceeding our customer expectation through supply of quality
products & services".
Quality Objectives:

 To identify the needs of our customers.

 To meet identified needs without errors online everything.
 To institute organization, system & procedure for strengthening the
concept of quality.
 To achieve quality by the involvement/commitment of every individual
including our supplier.
 To build quality in every process, we carry out.
 To ensure that quality comes through prevention rather then inspection.
 To design & develop services to meet the requirement of quality,
reliability safety & cost.
 To measure quality by cost of non- conformance to the requirements &
optimize quality related cost.
 To allocate available resources for training, workspace improvements &
infrastructure up gradation.
 To ensure that every individual in the company understands maintenance
& implements quality policy.

b. SBU

Shiva enterprises has 5 Strategic Business Units.

1. Advance technology
2. Smart City Business.
3. Strategic Communications
4. Unmanned Systems.
5. export manufacturing.
Objectives of inventory control
The main objectives of inventory control are:
1. To maintain a large size of inventory for efficient and smooth production
and sales operation.
2. To maintain a minimum investment in inventories to maximize
profitability.
3. To ensure a continuous supply of raw material in periods of short supply
and anticipate price change
4. To ensure a continuous supply of raw material in periods of short supply
and anticipate price change
5. Maintain sufficient finished goods inventory for smooth sales operation
and efficient customer services.
6. Minimize the carrying cost and time.
7. Control investment in inventories and keep it at an optimum level.

Advantages of inventory control

The following are suggested advantages:
1. Eliminates wastages in use of materials.
2. It reduces the risk of loss form and theft.
3. It helps in keeping perpetual inventory and other records to facilities the
preparation of accurate material reports management.
4. To reduce the capital tied up in inventories.
5. It reduces cost of storage.
6.
Disadvantages of inventory control
Every firm has to maintain optimal level of inventories. If not the following will
be the result in front of losses.
1. Opportunity cost: Every firm has to maintain inventory for that some
investment in needed it is known as opportunity cost and handle the
investment in inventory are more the funds are blocks up with inventory.
2. Excessive inventories: it will lead to firm losses due to excessive carrying
costs the risk of liquidity. It is also referred as danger level.

3. Inadequate inventory: it is another danger which result is production

hold-up and failure to meet delivery commitments. In adequate raw
material and work-in-process inventors will result in frequent production
interruptions. It finished goods are not sufficient customers may shift to
competitors.

4. Danger due to physical decoration: it is one of the reasons with the

inventories due to maintaining stocks at high levels they will be
deteriorated due to passage of time, sometimes due to mishandling or
improper storage facilities.

TYPES OF PRODUCTS:

Amount the factors influencing inventory management and controls, the

type of product is fundamental. if the material used in the manufacture of
the product has a high value, when purchase, a much closer control is
usually on order. If the materials used in the product is in short supply or
is auctioned by the government, this may influence the purchase of this
material and stock maintained.

The manufacture of standard product as compared to custom-made items

still influence inventories as materials needed to manufacture a standard
product is easy to obtain and a close control on the stock is not necessary
whereas materials required to produce made-to-order items need strict
control to ensure that no items is lost in the process of manufacture. Such
materials and tools are of special and expensive nature and loss of any
small part will hold up the production.

INVENTORY VALUATION

Many methods of materials costing and inventory valuation has come into
use among the more common methods of costing material and vaulting
inventories are:
1. First in first out method (FIFO)
Here the earliest acquired stock is assumed to be used fist. The stock is bought
first is issued first. In other word the principle is the materials are issued in this
order and at the price their original purchase.
This method is claimed to be accurate for the reasons that the materials are
charged into production at actual cost in the order of receipt. The closing
inventories are valued at the most recent prices. If the closing inventory balance
incudes material at several different priced on the basis of the cost of materials
received earliest, soon and so forth

THE ADVANTAGES OF THE METHODS IS:

1. The pricing of materials is perhaps consistent with the practice of
issuing oldest material first followed in many manufacturing
organizations.
2. The value of materials in stock is fairly close to current cost.
3. Issue of materials at different prices complicates stores accounting.
4. Comparison of job costs becomes difficult when similar jobs may be
changes with different prices for the same materials.
5. In period of raising prices, the change to production is low. This tends to
inflate reports profile, increases tax burden and push up dividends as a
consequence the firm is sapped financially.

LAST IN FIRST OUT METHODS (LIFO)

This method is the opposite of the FIFO method. It assumes that the material,
which Is acquired, last is issued first. Hence material issues are priced on the
basis of the cost of the recent purchase.

The advantages of the methods is:

1. The cost of production reflects the current cost of material better.
2. In a period of raising prices, reported profits are depressed dividends
are kept low and working capital is conserved.
3. The issue of material ay different prices complicates store accounts
 4. Pricing of materials is not consistent with the commonly followed
practices of issuing the oldest material fist.
5. Comparison of job costs becomes difficult when similar jobs may be
changes for the same materials at different price.

WEIGHTED AVERAGE COST METHOD

Under this method issues are priced at the weighted average cost of materials in
stocks (the weights being proportional to quantities). To get an weights average
cost figures, a new weighted cost is calculated each times a delivery is received.

STANDARD PRICE METHOD

Under this method a standard price is pre-determined when materials are
purchased the stock account is debited with the standard price. The difference
between the actual price and standard between the actual price and standard a
price is carried to a variance accounts. Materials issued is charges as per the
standard price.
Advantage of this method are:
 All materials issues priced identically.
 The possibility of jobs using the same material being changed with
different costs, a problem costs, a problem with FIFO or LIFO method
does not exist.
 Stock accounting is fairly amplified
 There is no need for specific price attributable to specific issue of
materials.

The merits are:

 It discloses the efficiency of buying.
 Tenders based on production costs, which reflect current prices, may
before realistic.

The disadvantages are:

 Determining of replacement realizable price may sometimes be difficult.
  Comparison of job cost becomes difficult when similar jobs are charges
for the same materials at different prices.
 Since this method is not based cost, confusing may arise.

SIMPLE AVARAGE METHOD

Under this method, material issues are valued at average price. It is calculated
by dividing the total price of the materials in the stock, from which the material
to be priced could drawn by the number of prices used in the total. The issue
price is determined as follows:
This method works well there is little variation in the purchase prices. The
simple average is particularly useful in the following circumstance

The advantages are:

 This method works well there is little variation in the purchase prices.
 The simple average is particularly useful in the following circumstances.
 A particular purchase at a higher or lower rate does not disturb the rice to
great extent because the particular difference in the price is averaged out.
 Simplicity is the greatest advantages of this method.

Disadvantages of the method are:
 Material cost does not represent actual cost price.
 When prices fluctuate considerable, this method will give very incorrect
result.
 This method does not give regard to quantities of material held at each
price.

TREND ANALYSIS:
It is one of the indicators which show relationship between inventory and sales.

Value of production:
Sales + closing stock of finished goods and working progress value of
production can be expressed as.
Opening stock of finished goods and working progress.
Here one i.e.., the first year of the analysis is taken as base year and cumulative
increase is calculated.
Cost of goods sold
Average stock of finished goods

Inventory requirements of shiva enterprises

 Restricted use intermediate inventories in the chain (inventory not related
to a customer order is not be kept, except at suppliers)
 Inventory is to be driven as much as possible earlier (up stream) in the
supply chain and preferable to the supplier.
 Definitions are clear and that policies specify times, delivery precision
flexiability and inventory days for each of the goods and services.
 Lead times are synchronized with deli vary centers from the suppliers and
to body builders to the find customers handover to facilitate complete
deliveries.
 Slander products will have a preferred treatment both in lead times and in

BILLS RECEIVABLE

SALE ORDER RELEASE:

The process starts with the creation and release of sale order. The export sale
order is generated by marketing department upon receipt of an order from
customer. The same has to be released by Finance department in order to start
the material procurement and manufacturing process. The key points to be
checked while releasing an export sale order is as follows:
1) Obtaining all the documents required
 a) Customer Order copy with details of Ship to Party, Bill to party name,
incoterms, payment terms, Item name, part no., rate, value and supply
schedule.
b) Management approval copy of selling price of the item to be supplied.
2) The above documents have to be scrutinized for any terms and conditions
in favorable to BEL and necessary amendments have to be obtained like
applicability of LD etc.
3) The SAP sale order has to be released in compliance with the customer
order and management approval after checking the conditions tab for
taxes applicable and accounting tab to ensure proper flow of journal
entries in SAP.

BILLS PAYABLE

Bills payable are physical record of the amount owing for any products or
services that a company buys on credit. Bills payable can include service
invoice, phone bills and utility bills. The seller of the goods and services
is referred to as a vendor, because of that bill’s payable are sometimes
called vendor invoices.

Payment to vendors and accounting of payment is an important finance

function. With the introduction of SAP in vendor payment process, the
payment process is more transparent and easier to
operate. SAP facilities complete history of supplies and payments under a
Single Purchase order and this ensures tracking down of outstanding
supplies and Rejections in addition to outstanding dues at any point of
time.

ACCOUNTING OF GOODS AT THE TIME OF RECEIPT

 The receipt of material against Purchase Order is done at IG of

respective Division / SBUs and on preparation of GR, the
following entry is generated. (Inventory/Consumption A/c, GR/IR
Cleaning A/c)
  MIGO entry is passed by the stores department on receipt of Items
based on the Delivery Challan/ Invoice Copy.
 Loading of ED/ET &VAT on material cost will be taken care by the
system based on the tax codes decided at the time of releasing the
PO. The same is to be rechecked at the time of creating the MIRO
for rectification, if any.

PRICING OF INVOICES
 Original Vetted Purchase Order.
 Original Invoice issued by Vendor (Excise Invoice in case of
Excisable goods)
 Accepted GR (Goods Receipt) – Inspection Report (either hard
copy or system acceptance)

CHECKLIST FOR VERIFICATION OF DOCUMENTS

 PO : Payment Terms, Price, Part No & Description, Unit Rate,
Quantity, Tax Rate, Inco-Terms, LD Clause, Warranty, PBG
Clause, others.
 INVOICE: Packing & Forwarding Charges, Freight, Excise Duty,
Taxes & Other Charges and Levies, applicable TDS. Invoice
should be within tax credit availment period
 GR: Quantity Received & Accepted data, Discrepancies, & any
other Remarks.

MISCELLANEOUS BILLS:

Management sanctions are taken by respective department for various purpose

which are not covered by other routes of payment.
Management sanctions comprises of:
1. One-time sanctions in respect of payment to be released on one time basis.
2. Single time sanctions in respect of payment to be released on multiple
occasions.
ADVANCE PAYMENTS – MANAGEMENT SANCTIONS

Payment is released as advance for expenditure to be incurred. In case, payment

has to be released as advance same is released to the authorized person/ Officers
against their staff no. Advance payment needs to be monitored regularly till the
settlement. At the time of releasing advance payment, through analysis of scope
of approval needs to be done, accordingly the amount and payee needs to be
ascertained.

STEPS FOR MAKING ADVANCE PAYMENT

1. Verify documents received from the concerned departments requesting for
the advance payment.
2. Enter relevant details.
3. Enter proper Narration/Text for future reference.

IMPREST BILLS: The Imprest account system is basically used for

procurement of Consumables. Spares and other items of small value required
for smooth functioning of day-to-day activities. The Concerned Department is
required to obtain Management Sanction providing the details w.r.t the nature of
expenditure to be incurred for the day-to-day activities.

COSTING
Introduction:

Today, the world has become a global village. There is a sea change in the
business environment. Business has to face competition worldwide. In order to
survive in this global economy, business must have a competitive edge over
others. This objective can be achieved if the business is the inclined towards
being cost effective and quality conscious. Cost effectiveness/cost
consciousness is an important element in determine the success of a business
enterprise. Management can achieve this goal provided it has perfect and
detailed knowledge about costs. Accounting in its traditional sense fails to
provide meaningful information to the management to achieve modern
objective of business.

Financial accounting is primarily concerned with record keeping and is directed

towards the preparation of (i) Profit & Loss A/c (ii) Balance Sheet. It is basic
accounting and provides information to shareholders, creditors, bankers,
government and tax authorities etc., about the profit and loss and financial
position of the business. But financial accounting does not provide necessary
cost information to the management for efficient planning, decision making and
control. Keeping in view the needs of the business, cost accounting plays a
significant role.

Meaning of Cost Accounting:

Cost Accounting is the classifying, recording and appropriate allocation

of expenditure for the determination of costs of the products or services,
and for the presentation of suitably arranged data for purposes of control
and guidance of the management. It includes the ascertainment of the cost
of every order, job, contract, process, services or unit as may be
appropriate.

Element of cost:

Strictly speaking, there are three elements of cost i.e. material, Labour,
and other expenses. Each of these elements may be direct or indirect.

Material Direct Indirect

material material
Labour Direct Indirect
Labour Labour
Other expenses Direct Indirect
expenses expenses
All direct items of cost from part of prime cost and all items of cost are known
as overheads.

Direct material

Direct materials are those materials which can be identified in the product. They
can be conveniently measured and directly charged to the product. Thus, these
materials directly enter the product and from a part of the finished product.
Following are normally classified as direct materials.

 All raw materials like jute in the manufacture of gunny bags, pig iron in
foundry, and fruits in canning industry.

 Materials specifically purchased for a specific job, process or order like glue
for book binding, starch powered for dressing yarn.

 Parts or components purchased or produced like batteries for cars and tyre’s
for cycles.

 Primary packaging materials like cartoons, wrapping, card-boards boxes etc.

Indirect materials

Indirect materials are those materials which cannot be identified with the
product. They cannot be conveniently assured and directly charged the product.
These materials either

(i) Do not firm part of the product; e.g. lubricating oil, gasses, sand paper,
coal, etc.
(ii) (ii) If found in the finished product, are of nominal value; e.g. sewing
thread in rudiment garments, nails in sofa set, etc.

Direct Labour
Direct Labour is call Labour expended in altering the construction, composition,
confirmation or condition of the product. In simple words, it is that Labour
which can be conveniently identified or attributed wholly to a particular job,
product or process or expended in converting raw material into finished goods.
Wages of such Labour is known as direct wages.

Indirect Labour

The wages of that Labour which cannot be allocated but which can be
apportioned or absorbed by cost centre’s or unit cost is known as indirect
Labour. In others words, wages paid to Labour which are employed other than
on production constitute indirect Labour costs.
Direct expenses
All expenses which can be identified to a particular cost center and hence
directly charged to the center are known as direct expenses. In other words, all
expenses increased specifically for a particular product, job department etc. are
called direct expenses. These are directly charged to product.

Indirect expenses

Indirect expenses are expenses which cannot be allocated to a particular cost

center or cost unit. These expenses are common and are to be apportioned to or
observed by cost center. Rent, rates, insurance, municipal taxes, telephone
expenses, depreciation, etc. are such example of indirect expenses.

Prime cost

It is the sum total of direct materials, direct Labour and direct expenses,

Overheads
Overheads may be defined as the aggregate of the cost of I direct materials,
indirect Labour and indirect expenses. Overheads include all item of cost other
than direct costs. In general, overheads comp [raised all expenses incurred for or
in connection with the whole of the Organisation or part of the undertaking.

1.Cost Sheet
Cost sheet or statement of cost shows the total cost as well as the cost per unit
for a given period. The total cost is calculated in a logical order and under
proper division of cost. It shows prime cost, work cost, cost of production, cost
of goods sold, and total cost. It is prepared for a specific period as a week, a
month, a quarter or a year.

Thus it is a statement designed to show the output of a particular accounting

period along with breakup of costs. The data in corrupted in cost sheet are
collected from various statements of accounts which have been written in
accounts.

Purpose of Cost Sheet

(a) It discloses the total cost and the cost per unit of the units produced
during the given period.

(b) It enables a manufacturer to keep a close watch and control over the
cost of production.

(c) It acts as a guide to the manufacturer and helps him in performing a

definite

useful production policy.

(d) It helps in fixing up the selling price more accurately.

(e) It helps the business man to minimize the cost of production when
there is a cut throat competition.
format of Cost Sheet

Following is the preform of preparing cost sheet or statement of cost

COST SHEET OR STATEMENT OF COST

PARTICULAR Cost per Total Cost

unit
Direct Material

Direct Labour

Direct Expenses

Prime Cost

Add: Works Overheads

Manufacturing or works Cost

Add: Administration Overheads

Cost of Production

Add: selling and distribution Overheads.

Total cost or cost of sales

Purchase Financing Options

Purchase finance

Purchasing finance typically refers to the process of acquiring goods or

services through financing options rather than making an upfront
payment. This could include obtaining loans, credit, or leasing
arrangements to fund the purchase. The specific approach to purchasing
finance can vary depending on the nature of the purchase, the financial
institution or lender involved, and the terms and conditions of the
financing agreement.

Here are a few common types of purchasing finance:

Personal Loans: You can obtain a personal loan from a bank or financial
institution to finance your purchase. Personal loans are typically
unsecured, meaning you don't need to provide collateral, and the funds
can be used for a variety of purposes, including purchasing goods or
services.

Credit Cards: Using a credit card to make a purchase is a common form

of purchasing finance. When you make a purchase using a credit card,
you essentially borrow money from the credit card issuer and repay it
later. Be mindful of interest rates and fees associated with credit card
purchases.

Installment Plans: Some retailers offer installment plans where you can
make a purchase and pay it off over a set period in equal installments.
These plans may or may not involve interest charges, depending on the
terms.

Leasing: In certain cases, you may opt to lease a product or service

instead of purchasing it outright. Leasing involves paying regular
installments for the use of the item without owning it. This can be
common for items like cars or equipment.

Vendor Financing: In some cases, vendors or suppliers may offer

financing options to customers. This could involve deferred payment
terms, where you receive the goods or services and make payments at a
later date.

It's important to carefully consider the terms, interest rates, fees, and
repayment options associated with any financing arrangement. It's
advisable to compare offers from different lenders or financial institutions
to find the most favorable terms that suit your needs and financial
situation.
Learning Outcomes

By participating in an internships or co-op are to:

 Develop communication, interpersonal and other critical skills in the job
interview Process.
 Practical experience.
 Collaboration and teamwork.
 Skill development.
 Build a record of work experience
 Learn to appreciate work and its function in the economy.
 Develop work habits and attitudes necessary for job success
 Explore career alternatives prior to graduation.
 Integrate theory and practice.
 Assess interests and abilities in their field of study.
 CONCLUSION

WATER PURIFIER is one of the most important departments of SHIVA

ENTERPRISES. It is one important SUB of SHIVA ENTERPRISES.

Changes in the world market and in technological conditions in the world

economy in the recent past, in the last decade, pose new challenges to
industrialization and the development of a competitive manufacturing sector.

In many respects the conventional advantage of low labour cost is being

undermined by the increasing importance of competitive characteristics other
than cost of production, notably product/service quality and just-in-time
delivery. To cope with these requirements, greater effort will be required to
develop design, marketing and new organizational and linkage capabilities, in
addition to selectively acquiring new manufacturing technologies.