INTRODUCTION

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INTRODUCTION ABOUT JCB

JCB limited is a UK based multinational company. JCB is one of Britain’s great success
stories. The business began on 23rd Oct 1945 when Joseph Cyril Bamford made a screw-
tipping trailer with a £1 welding set in a lock up garage he rented in Uttoxeter. He sold it
at the town market for £45 and so a great engineering began.
Today JCB is Europe premier manufacturer of construction equipment and export 72% of
its product to 140 territories around the world. It has nine subsidiary companies in
Europe, the US and Singapore and 9 factories in UK. Its famous yellow backhoe loaders
and excavators have become part of landscape and part of language – the name JCB is
even in the Oxford and Collins dictionary.
The Bamford family still privately owns the company and present chairperson and
managing director is Sir Anthony Bamford, the eldest son of Mr. Joseph Cyril Bamford.
Mr. Bamford, born in 1916, retired at the end of 1975 and lived in Switzerland until his
death in March 2001. Under Sir Anthony leadership, the business has prospered still
further. In 1999, group sales were £833 and profits were £91.2.
The company has won more than 50 major awards for engineering excellence, exports,
design, marketing, management and for its care for the environment. Among them are
fifteen Queen’s awards for technology and export achievement.
The Rochester headquarters and factory are thoughtfully land soaped in 175 acres of
Stafford shire countryside with three lakes, wildlife and sculptures by local artisan. The
original garage where the business begin was demolish in 1969 but sir Anthony Bamford
has had an exact replica built which stands by JCB’s sports and social club at the
Rochester site. The queen unveiled the replica garage when she and the Duke of
Edinburgh visited JCB in Dec. 1965 as a part of the company’s jubilee celebrations.
JCB was founded by Joseph Cyril Bamford in October 1945
in Uttoxeter, Staffordshire, England. He rented a lock-up garage 3.7 by 4.6 m (12 by 15
feet). In it, using a welding set which he bought second-hand for £1 from English

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Electric, he made his first vehicle, a tipping trailer from war-surplus materials. The
trailer's sides and floor were made from steel sheet that had been part of air-raid shelters.
On the same day as his son Anthony was born, he sold the trailer at a nearby market for
£45 (plus a part-exchanged farm cart) and at once made another trailers.

At one time he made vehicles in Eckersley's coal yard in Uttoxeter. The first trailer and
the welding set have been preserved.

In 1948, six people were working for the company, and it made the first hydraulic tipping
trailer in Europe. In 1950, it moved to an old cheese factory in Rocester, still employing
six. A year later, he began painting his products yellow. In 1953, his first backhoe loader
was launched, and the JCB logo appeared for the first time. It was designed by Derby
Media and advertising designer Leslie Smith. In 1957, the firm launched the "hydra-
digger", incorporating the excavator and the major loader as a single all-purpose tool
useful for the agricultural and construction industries.

In 1960, JCB's hydraulic tractors entered the North American market, proving a long-
lasting success. JCB became, and still is, the brand leader in the world. By 1964, JCB had
sold over 3,000 3C backhoe loaders. The next year, the first 360-degree excavator was
introduced, the JCB 7.

In 1978, the Loadall machine was introduced. The next year, JCB started its operation
in India. In 1991, the firm entered a joint venture with Sumitomo of Japan to produce
excavators, which ended in 1998.

Two years later, a JCB factory was completed in Pooler near Savannah, Georgia in the
USA, and the next year a factory was opened in Brazil.

Production of the first engine designed and manufactured by JCB, the JCB444 diesel
engine, started in 2004.

In 2005, for the first time in nearly forty years, JCB bought a company, purchasing the
German equipment firm Vibromax. In the same year, the firm opened a new factory
in Pudong, China. By 2006, the firm had 4000 employees, twice what it had in 1975.

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Planning of a new £40 million pound JCB Heavy Products site began following the
launch of an architectural design competition in 2007 managed by RIBA Competitions,
and by the next year, the firm began to move from its old site in Pinfold Street in
Uttoxeter to the new site beside the A50; the Pinfold Street site was demolished in 2009.
During that year, JCB announced plans to make India its largest manufacturing hub. Its
factory at Ballabgarh in Haryana, was to become the world’s largest backhoe loader
manufacturing facility.

JCB shed 2,000 jobs during the recession, but in 2010 it announced it was recruiting up to
200 new workers. The Company was a member of the business lobby group CBI until on
the 11th of October 2016 it emerged on BBC news that JCB had left the group in the
summer of 2016 following the Brexit vote.

VISION
To provide extra ordinary customer satisfaction

MISSION
JCB’s business is to manufacture market and support construction and earthmoving
equipment. JCB’s aim is to exceed customer’s expectations through innovation
continuous quality improvement and people involvement.
JCB will profitably grow along with their stakeholders and achieve Markey leadership in
the core segments of their business.

QUALITY POLICY
1. Customers are the cores of the business and all the actions must lead to delighting
them.
2. Resources will be provided to continually improve the processes to meet changing
customer requirements, always improving quality, reliability and responsiveness.
Problem will be solved at source by putting efforts into prevention.

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 3. Good working relationships will be constantly strove for that is founded on trust,
respect and fairness. Work must be done as a team to solve problems in an open
and constructive manner.
4. A good reputation is hard won and easily lost. Affairs must be conducted in the
company and in public to the highest standard of honesty and integrity.

COMPANY PROFILE

JCB India Limited is a leading manufacturer of earthmoving and construction equipment

in India. The company started as a joint venture in 1979 and is now a fully owned
subsidiary of J.C Bamford Excavators, United Kingdom. With five state-of-the-art
factories in India, it today manufactures a wide range of world-class equipment, not only
for India, but also for Global markets.

It introduced Backhoe Loaders in India close to four decades ago and has since expanded
its product range to over 50 different models in eight product categories. The Ballabgarh
factory near New Delhi, which is the world’s largest factory for Backhoe Loaders, is also
the Headquarters for JCB India. This facility, apart from Backhoe Loaders, also
manufactures Skid Steer Loaders, Telehandlers, Diesel Generators and Diesel Engines.

The company expanded its operations in 2006 and 2007 by setting up two factories at
Pune for its Heavy line business. These factories manufacture Tracked Excavators,
Wheeled Loaders, Compaction equipment and Fabrications for the Group. With over 400
engineers, Pune also has JCB’s largest Design Center outside of the United Kingdom.
A further investment in India was made at Jaipur in 2014 with the inauguration of a 114-
acre, eco-friendly, green manufacturing facility. This facility today manufactures Mini
Excavators, Skid Steers and Fabrications. With all plants operating on the principle of
One Global Quality, JCB India is a manufacturing hub for Global markets. Products
made in these factories have been exported to more than 85 countries around the world.
Over the years JCB has invested Rs. 2,000 crores in India and today employs 5,000
people in its Indian operations. It has a network of more than 60 dealers and 650 outlets
spread throughout India, who further employ 6,000 professionally trained personnel.

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These far-reaching outlets provide the vital product support to customers for their
equipment. Five strategically set up warehouses at Pune, Chennai, Faridabad, Guwahati
and Kolkata support these dealerships and outlets for parts supplies. It has also built and
supported an indigenized supply chain for the manufacturing of its products. Over 380
world-class Indian suppliers are aligned to JCB’s Group objectives and have grown along
with JCB through various supplier development initiatives.
JCB is also creating employment and entrepreneurship amongst youth through its 15
Operator Training Centers in India. It provides a one month certified course on machine
operations and maintenance, which includes both, classroom and practical training on
how to operate JCB machines safely and productively. It has a 16 week detailed induction
program at the welding training school at the Jaipur facility for ITI and Diploma
graduates. Comprehensive skills developed through these programs have helped young
men and women excel in their careers, especially women engineers, who are now making
their careers in traditionally male dominated areas of manufacturing such as welding and
assembly.
JCB is committed to CSR through the Lady Bamford Charitable Trust. Registered in the
year 2000, the Trust has followed an organic and consistent growth with a focus on
disadvantaged communities around JCB factories in India. Today its outreach extends to
56 Government schools and nine vocational training centers through which it reaches out
to about 12,500 students and trainees. The Trust is active in communities around its three
factories in Delhi-NCR, Pune, and Jaipur.

JCB has always remained committed to India. It has launched innovative India centric
products and has expanded by way of new factories with Customer Focus and One
Global Quality being at the core of its operations. In December 2000 JCB was fined
€39.6m by the European Commission for violating European Union antitrust law. This
related to restrictions on sales outside allotted territories, purchases between authorized
distributors, bonuses and fees which restricted out of territory sales, and occasional joint
fixing of resale prices and discounts across different territories. JCB appealed the
decision, with the European Court of First Instance upholding portions of the appeal and
reducing the original fine by 25%. JCB appealed to the European Court of Justice but this

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final appeal was rejected in 2006, with the court slightly increasing the reduced fine by
€864,000.

Production of the first engine designed and manufactured by JCB, the JCB444 diesel
engine, started in 2004. In 2005, for the first time in nearly forty years, JCB bought a
company, purchasing the German equipment firm Vibromax. In the same year, the firm
opened a new factory in Pudong, China. By 2006, the firm had 4000 employees, twice
what it had in 1975.

Planning of a new £40 million pound JCB Heavy Products site began following the
launch of an architectural design competition in 2007 managed by RIBA
Competitions, and by the next year, the firm began to move from its old site in Pinfold
Street in Uttoxeter to the new site beside the A50; the Pinfold Street site was demolished
in 2009. During that year, JCB announced plans to make India its largest manufacturing
hub. Its factory at Ballabgarh in Haryana was to become the world's largest backhoe
loader manufacturing facility.

JCB shed 2,000 jobs during the recession, but in 2010 it announced it was recruiting up to
200 new workers. The company was a member of the CBI business lobby group until
2016. In October 2016, it was reported that JCB had left the CBI in the summer of 2016
following the Brexit vote.

JCB has also been a significant donor to the UK Conservative Party; since 2007 JCB and
related Bamford entities have given the party £8.1m in cash or kind. JCB
chairman Anthony Bamford donated £100,000 to Vote Leave, the official pro-Brexit
group.

JCB has 18 factories in the UK, Germany, North and South America, Australia, India,
China, and CIS. The company employs some 12,000 people on four continents and sells
its products in 150 countries through 1500 dealer depot locations. The company has a
range of more than 300 products.

JCB is headquartered in Rocester, United Kingdom, which is also the production site for
backhoe loaders and telescopic 'Loadall' handlers. It has a further three production plants
in nearby Cheadle, Staffordshire (JCB Earthmovers, JCB Land power and JCB Compact

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Products), one in Rugeley (JCB Cab Systems), three in Uttoxeter (JCB Attachments, JCB
Heavy Products and JCB World Parts Centre), one in Foston in Derbyshire (JCB Power
Systems) and one in Wrexham in North Wales (JCB Drivetrain Systems).

In July 2013 the company opened a dedicated logistics hub in Newcastle-Under-

Lyme. This facility is the central hub for component distribution to production facilities,
as distinct from the World Parts Centre in Uttoxeter which distributes spare parts to
dealers and customers.

In December 2013 it was announced that the Rugeley Cab Systems plant would move to
a new facility in Uttoxeter which would allow the in-sourcing of cab assembly currently
contracted to third parties. This investment is to be accompanied by the expansion of the
Rocester and Cheadle production sites by 2018.

Its Indian factories are based in Faridabad (Haryana), Jaipur and Pune, its US factory is
in Pooler, Georgia, its Brazilian factory in Sorocaba, and its Chinese factory was
completed in 2005 in Pudong near Shanghai. JCB also owns Vibromax, a German
compaction equipment company based in Gatersleben.

JCB has also licensed its name and image to a line of consumer power tools,
manufactured by Alba PLC.

The products are sold through franchised dealerships, many of which are often exclusive
and cover whole countries.

JCB dominates the Indian construction equipment market with every three out of every
four construction equipment sold in India being a JCB. JCB India's revenue rose more
than 12 times to $1 billion in 2012–13 from $75 million in 2001. The Indian operations
of the UK Company account for 17.5% of its total revenue.

JCB India Ltd—the largest manufacturer of construction equipment in the country—

increased its revenue from Rs. 5,550 crores in 2014 to Rs8,100 crores at the end of 2017,
helped by the Union government’s focus on building infrastructure across the country.

The UK-headquartered firm has been focusing on exports in the last five years in order to
reduce its dependence on the domestic business.

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According to data released by the company, it exports to 93 companies around the world
from India. Its new manufacturing facility in Jaipur, established in 2014, is already
exporting to 53 countries which are expected to increase in the near future.

On the sidelines of a “Made in Rajasthan” event organized by the company at its Jaipur
facility, Anthony Bamford, chairman, JC Bamford Excavators Ltd, told Mint that each
year has been better for the company domestically, but that JCB is exporting as well and
the export market work in different cycles to the Indian economy.
“This (Jaipur) plant exports to around 50 countries and rest of the plants exports to 90
countries. Here it is gradually building up. Just a few minutes before I met some large
customers from Saudi Arabia who were saying how good the machines are that we
manufacture here,” Bamford said.

JCB India Ltd started domestic operations in 1979 and has five manufacturing capacities
in three locations—Ballabhgarh in the National Capital Region (NCR), Pune and Jaipur.
The economic slowdown before the 2014 elections took a toll on the company with
volumes declining year on year but with the National Democratic Alliance government
announcing huge investments in the infrastructure sector, including railways in this year’s
budget, the top management of the company is expecting the current growth momentum
to continue.

“The present government focused a lot on public investment in infrastructure though we

are still waiting for the private investment in infrastructure. In fact, we are getting a lot of
foreign investment. The industry is growing as a whole and JCB is growing with the
industry. We have the largest product range (50 products) in India and are made to one
global quality,” said Vipin Sondhi, managing director and chief executive officer, JCB
India.

As of now the company has 650 sales and service outlets across the country and every
year around 50 outlets are added to the tally. According to Graeme MacDonald, chief
executive officer, JCB Group, India, 2017 was a good year for the sales of construction
equipment globally as volumes increased by 20%.

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Equipment sales in India were around 60,000 units while the same in China stood at
200,000 units. Hence the company thinks there is huge potential in India.

REVISED POLICY ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

-22.06.2018
The Corporate Social Responsibility Policy (CSR Policy) of JCB India Limited has been
formulated in accordance with section 135 of the Companies Act 2013 and the rules made
there under. The CSR Policy shall apply to all the CSR activities undertaken by the
Company.
CSR Vision Statement
To work in partnership with communities and relevant stakeholders to facilitate
individuals and groups from the disadvantaged sections to access a better quality of life.
CSR Objectives
The CSR objective of the Company is to carry out CSR activities as aligned to the
Schedule VII of the Companies Act, 2013. The Company will, therefore, focus on the
range of activities as mentioned in the same. The CSR activities to be undertaken by the
Company shall include:
1) Eradicating hunger, poverty and malnutrition, promoting health care including
preventive health care and sanitation including contribution to the Swachh Bharat Kosh
set-up by the Central Government for the promotion of sanitation and making available
safe drinking water.
2) Promoting education, including special education and employment enhancing vocation
skills especially among children, women, elderly and the differently abled and livelihood
enhancement projects.
3) Promoting gender equality, empowering women, setting up homes and hostels for
women and orphans; setting up old age homes, day care centres and such other facilities
for senior citizens and measures for reducing inequalities faced by socially and
economically backward groups;
4) Ensuring environmental sustainability, ecological balance, protection of flora and
fauna, animal welfare, agroforestry, conservation of natural resources and maintaining

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quality of soil, air and water including contribution to the Clean Ganga Fund set-up by
the Central Government for rejuvenation of river Ganga;
5) Protection of national heritage, art and culture including restoration of buildings and
sites of historical importance and works of art; setting up public libraries; promotion and
development of traditional arts and handicrafts;
6) Measures for the benefit of armed forces veteran, war widows and their dependents;
7) Training to promote rural sports nationally recognized sports and Olympic sports
8) Contribution to the Prime Minister's National Relief Fund or any other fund set up by
the Central Government for socio-economic development and relief and welfare of the
Scheduled Castes, Tribes, other backward classes, minorities and women;
9) Contributions or funds provided to technology incubators located within academic
institutions which are approved by the Central Government;
10) Rural development projects
11) Slum area development.
The Company would also seek to partner with the government departments, government
projects, other NGOs and most importantly with the communities themselves to
implement the above objectives.
CSR Programmed Areas
The Company will focus on the areas as mentioned above.
In keeping with the larger body of development work in the country and the rapidly
changing sector of CSR, the Company will also invest in relevant opportunities to add to
and consolidate this work.
Validity of CSR Policy
The CSR policy as approved by the CSR Committee and the Board of Directors of the
Company shall be implemented with immediate effect and shall be amended from time to
time as may be required under the provisions of Section 135, Companies Act, 2013 and
rules made thereunder
CSR Budget
The Board of Company shall ensure that in each financial year, the Company spends at
least 2% of the average net profit made during the immediate three preceding financial
years. Any surplus / unspent amount from out of the CSR Budget shall not form part of

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business profits of the Company and shall be carried forward and spent in the subsequent
years.
Implementation
The Company’s CSR projects will be implemented in a time-bound manner with clear
objectives, plan, targets and robust monitoring and evaluation mechanisms.
The ongoing CSR projects will be aligned to the Policy. This Policy builds on the
learnings and good practices of the CSR projects initiated by the Company as well as the
expertise of the development sector.
The Company will facilitate the coming together of the scale provided by the
government, the development expertise provided by the NGOs, the mobilization provided
by the agency of the communities and the core competencies of the corporate sector, to
design and implement innovative, scalable and replicable models of CSR.
In implementing the above projects, the Company will work through a combination of
direct implementation and implementation through technical and knowledge partnerships
with NGOs, business partners, registered societies, companies with charitable
objects(Section 8 Companies under Companies Act, 2013) etc. The Company will select
its partners after appropriate due diligence. It will use services of expert agencies,
consultancy firms etc. wherever required for carrying out base line surveys, guidance on
project design and implementation, impact assessment surveys etc.
The teams responsible for implementing the various CSR projects are mentioned in the
section on the Governance Structure of the Policy.
The head of the CSR team in JCBI will be authorized to sign Memorandums of
Understanding (MOUs)/Agreements with the implementing partners after taking due
approvals.
CSR Governance Structure
In accordance with the provisions of Section 135 of the Companies Act, 2013 and the
rules made thereunder, the Company has constituted the CSR Committee of Directors,
comprising of the following members:

Sr. No. Name Category Designation

1 Mrs. Preeti Gautam Mehta Independent Director Chairperson
2 Mr. Vipin Sondhi Managing Director & CEO Member

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3 Mr. Michael Hargreaves Non - executive Director Member
The responsibility of the CSR Committee shall be to:
• Formulate and recommend the CSR Policy to the Board for approval. The Committee
shall indicate the projects to be undertaken by the Company as specified in Schedule VII.
• Recommend the amount of expenditure to be incurred on activities undertaken in CSR
projects.
• Monitor the CSR Policy and recommend changes from time to time.
The Board of the Company will be responsible for the following:
• Approve the CSR Policy of the Company as recommended by CSR Committee and
disclose the content of the Policy in its report and place the Policy on the Company's
website in such a manner as prescribed under Section 135 of the Companies Act 2013
and rules thereunder.
• Ensure that the activities included in CSR Policy are undertaken by the Company.
• Ensure that the Company spends, in every financial year, at least 2% of the average net
profits of the Company made during the three immediately preceding financial years in
pursuance of the Policy.
• Establish a monitoring mechanism to ensure that the CSR activities as recommended by
CSR Committee and undertaken by the Company are implemented.
CSR Team
1. Composition of the CSR Team: The Company's existing CSR team under the HR
department is accountable for coordinating the CSR activities.
2. Responsibility of the CSR Team:
• Act as central coordinating point for the CSR implementing projects.
• Coordinate with the implementing teams for project designing in compliance with the
Section 135 of the Companies Act and the CSR Rules.
• Plan annual budgets for CSR projects in coordination with the implementing
departments and make a proposal to the CSR Committee.
• Interface with various implementing departments within the Company to ensure
effective implementation of CSR projects.
• Report to the CSR Committee the progress on CSR projects and status of CSR
expenditure half yearly.

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• Documentation and reporting of all CSR activities of the Company in pursuit of the
Companies Act and the CSR Rules.
Monitoring and Reporting Framework
Project monitoring
The Company has in place and will consolidate its well-defined monitoring and
evaluation mechanism to ensure that each social project has:
• Clear objectives developed out of the societal needs that are determined through
baselines studies and research
• Clear targets, time lines and measureable parameters wherever possible.
• A progress monitoring and reporting framework that is aligned with the requirements of
the section 135 of the Companies Act and the CSR Rules.
Budget monitoring
The Company will establish an accounting system to ensure project wise accounting of
CSR spend.
Reporting framework
• The Company will monitor progress on the CSR projects and CSR spend and report to
the top management quarterly and the CSR Committee half yearly.
• The Company will report CSR performance in its annual report as per the structure and
format prescribed in the notified CSR Rules.

PRODUCTS of JCB

Many of the vehicles produced by JCB are variants of the backhoe loader,
including tracked or wheeled variants, mini and large versions and other variations for
carrying and moving items, for example fork lift vehicles and telescopic handlers for
moving materials to the upper floors of a building site. Wheeled loading shovels and
articulated dump trucks are also produced.

JCB produces the following products:

1. Excavators

Tracked 360° excavators ranging from the JZ70 (7 tons zero tail swing excavator) to the
JS460 (46 tons tracked excavator). In 2008 at Con expo JCB revealed a new top range
JS520 which included the new style paintjob with rams painted black.

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Wheeled 360° excavators ranging from the JS130W to the JS200W.

Machines can be produced with either miniboom or a triple articulated boom.

2. Wheeled loaders

Industrial and agricultural wheeled loaders from compact 6 tons hydrostatic machines to
larger 25 tons quarrying machines using a mix of 4 and 6 cylinder diesel engines.

3. Tractors

JCB has also made its name in the tractor world by producing one of the first such
machines that features proper suspension and is capable of travelling at speed on roads.
The JCB Fastrac entered production in 1990.

Prior to this design, the suspension was difficult because of the fixed-height connections
required to farm machinery, and tractors were notoriously slow on the roads.

Dependent on the model, the Fastrac can travel at 50 km/h, 65 km/h or 75 km/h (40 mph).
At launch the Fastrac was featured on the BBC television program Tomorrow's World,
and years later as Jeremy Clarkson's tractor of choice in Top Gear. From 2006 the
company also produces a range of compact tractors designed for grounds-care,
horticultural, and light agricultural duties.

4. Military vehicles

JCB also makes a range of military vehicles, which also concentrate on load-handling and
excavation. These include the JCB HMEE.

5. JCB Diesel max

In April 2006, JCB announced that they were developing a Diesel-powered Land Speed
Record vehicle known as the 'JCB Diesel max'. The car is powered by two modified JCB
444 diesel power plants using a two-stage turbocharger to generate 750 bhp, one engine
driving the front wheels and the other the rear wheels.

On 22 August 2006 the Diesel max, driven by Andy Green, broke the diesel engine land
speed record, attaining a speed of 328.767 mph (529 km/h). The following day, the record
was again broken, this time with a speed of 350.092 mph (563.418 km/h).

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 6. JCB Vibro max

JCB acquired the German company Vibro max, which manufactures compaction
equipment.

7. JCB Phones

JCB licenses its brand for a series of rugged feature phones and smartphones targeted at
construction personnel. The design and marketing contract was awarded to Data Select in
2010.

Logo

The JCB logo dates from 1953; from 1960 the company typewriters were given an extra
key to render it accurately. The company has mainly advertised in the trade publications
and their advertisements have won many awards, particularly for photography. The logo
was designed by Leslie Smith, and is off-set at 18 degrees from the horizontal and 22
degrees from the vertical – the angles Joe Bamford liked.

Display team

To demonstrate his faith in the hydraulic fail safes on JCB machines (which lock the arms
in the event of a loss of hydraulic pressure, preventing them from crashing to the ground),
Joe Cyril Bamford arranged to have several backhoes raise themselves up on their arms,
and drove his car beneath them.

This has since developed into a world-famous demonstration of the versatility of the
backhoe configuration. The JCB display team (JCB Dancing Diggers) tour agricultural
shows and produce videos, showing some of the unusual ways in which such vehicles can
support themselves or maneuver.

For example, it is quite common for drivers to support the vehicle on both buckets, either
for turning on the spot without damaging ground, or for spinning the tracks in a puddle to
clean them. The display team expanded this concept into a sort of vehicle gymnastics.
The drivers are members of JCB's demonstration team, who visit prospective customers

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and demonstrate machines on the customer's property to prove the machine's suitability
for the task at hand.

JCB Insurance Services Ltd.

JCB Insurance Services was founded in 1984 by JCB chairman Sir Anthony Bamford as a
fully owned subsidiary to provide for the insurance needs of the customers purchasing the
firm's equipment, with the funding they obtained from another fully owned subsidiary,
JCB Finance. The insurance subsidiary provides all-risks policies, with optional additions
for road risks coverage, and for public liability and employer’s liability.

JCB Research

JCB Research is described as an obscure company worth £27,000 which donated £2m to
the Conservative party making it the largest donor in the run up to the 2010 election.
Ownership of the company which has never filed accounts is disputed by the Bamford
brothers. According to The Guardian, much of the Bamford money was held in shares in
offshore trusts.

JCB PEDIGREE
Joseph Cyril Bamford launched the construction and agricultural equipment
manufacturing company that bears his initials, in 1945. He began his business in a garage
that measured 12 feet by 15 feet.
Today JCB’s world headquarters is one of the finest engineering factories in Europe. The
company that began as a ‘one man band’ now employs over 4000 people and produces
over 130 different models on a 4 different continents with bases in the UK, USA, INDIA
and SOUTH AMERICA.
It also sells a full range of equipment in over 150 countries. However, JCB’s remarkable
success story cannot be fully appreciated by studying a litany of statistics. JCB has an
ethos, a spirit and an identity that cannot be conveyed by facts and figures. Perhaps one

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question and one dictionary definition might go some way to explaining why JCB is a
very special company.
The question: ‘How many global brands are still run as a family business?’
The dictionary meaning: JCB n Trademark. A type of construction machine with a
hydraulically operated shovel on the front and an excavators arm on the back (named
from the initials of Joseph Cyril Bamford, its English manufacturer).
JCB is a unique company where unique people produce unique products, but it shares one
vitally important characteristic with many other successful global brands. It never stands
still. JCB may have an exciting future because of its illustrious global but it never takes
anything for granted. It is constantly seeking new horizons.
Today’s successful businesses satisfy the need of their customers. Tomorrow’s successful
brands have to exceed their customer’s expectations.
JCB is always looking for a better way. It is always prepared to go that extra mile, always
determined to do whatever it can do to help its customers to do a better job.
The real JCB difference is that it is a global operation that is run like a family business. It
retains a sense of family and continuity within a highly sophisticated corporate structure.
It is a still family owned with no outside shareholders.
In the final analysis, JCB is not about machines. It is about people. People who believes
in business, in addition, in the product. People who consider themselves part of the JCB
family.
JCB is a company with basic belief in the merits of hard work. At the core of his modern
manufacturing giant is an old-fashioned work ethic.
Nobody works harder on behalf of his or her customers. Nobody tries harder to improve
their products and their service. JCB people believe their products are the best but they
still want them to be better. That is why JCB is unique.

JCB’S PROMISE
We plan to deliver the best customer support in our industry- putting the customer at the
very heart of our business.

JCB INDIA LIMITED- A PROFILE

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Company : JCB INDIA LIMITED
Product Range : Excavators Loaders
Front End Loaders
Articulated Loading Shovels
Tracked Excavators
Skid Steer Loaders
Models : Eleven
Equipment Population : Over 35000
Manufacturing location : Ballabgarh, Haryana
JCB INDIA Offices : 21
Dealership Outlets : 140

JCB INDIA LIMITED £315 million manufacturer of earthmoving and Construction

Equipment is a fully owned subsidiary of JCB Excavators (UK).
J.C. Bamford Excavators Limited of United Kingdom is ranked in the top 5
manufacturers of earthmoving and construction equipment in the world and is considered
one of Britain most success stories.
JCB is the world number one producer for backhoe loaders.
JCB machines were initially blue and red, before they too became yellow. This was
mainly because the color yellow had become associated with safety on a building site.
The reason for this is that you are much more likely to notice a yellow machine or object
in your periphery vision (by that I mean what you see out of the corner of your eye,) than
any other color.
Nowadays most construction machines are yellow for safety reasons.
JCB India Limited started operation in 1979 as a joint venture between the Escorts group
and JCB Excavators (UK).
In 2003, JCB acquired 100% share and today JCB is the fastest growing company in the
Indian earthmoving and construction equipment industry.
The company is the pioneer in the industry and has recording excellent growth rates.
JCB engages in the manufacture and distribution of heavy equipment.

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It offers articulated dump trucks, backhoe loaders, compact track loaders, excavators,
rough terrain forklifts, skid steer loaders, telescopic handlers, wheel loaders, agricultural
telescopic handlers, multi-purpose vibratory compactors, single drum rollers, tandem
rollers, industrial forklifts, articulated dump truck tipping trailers, tracked excavators, and
more.
JCB India Limited is a leading manufacturer of earthmoving and construction equipment
in India. The company started as a joint venture in 1979 and is now a fully owned
subsidiary of J.C Bamford Excavators, United Kingdom. With five state-of-the-art
factories in India, it today manufactures a wide range of world-class equipment, not only
for India, but also for export markets. JCB introduced Backhoe Loaders in India over 35
years ago and has since expanded its product range to 48 models in eight product
categories.
The factory at Delhi-NCR, which is the world’s largest factory for Backhoe Loaders, is
also the Headquarters for JCB in India. This facility, apart from Backhoe Loaders, also
manufactures Skid Steer Loaders, Telehandlers, Diesel Engines and Diesel Generators.
The company expanded its operations in 2006 and 2007 by setting up two factories at
Pune for its Heavy line business.
These factories manufacture Tracked Excavators, Wheeled Loaders, Compaction
equipment and Fabrications for the Group. With over 330 engineers, Pune also has JCB’s
largest Design Center outside of the United Kingdom. A further investment in India was
made at Jaipur in 2014 with the inauguration of a 115-acre, eco-friendly, and green
manufacturing facility.
This facility currently manufactures Fabrications for the Group. With all plants operating
on the principle of one global quality, products made in these factories are sold not just in
the Indian market but are also exported to over 65 countries. Over the years, JCB
invested Rs. 2,000 crores in India and today employs over 5,000 people in its Indian
operations.
It has a network of 63 dealers who further employ 6,000 professionally trained people in
650 outlets spread throughout India. These far-reaching outlets provide the vital parts and
product support to customers. Dealerships and outlets get Parts support from four
strategically set up warehouses at Pune, Chennai, Faridabad and Kolkata.

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INTRODUCTION TO PROJECT

INVOICE VERIFICATION

Invoice Verification is a process which confirms in SAP that an invoice has been received
by the Department. Goods receipt will have to have been entered on SAP prior to invoice
verification unless that process has been by-passed at the raising of the purchase order.

The cost-level of the invoice verification department has always been one that was under
pressure of a cost-cutting management team. Since the benefit to the company output is
low the most important criteria for this function has been to perform it as simple, accurate
and cheap as possible.

In the last 10 years, dramatic re-engineering in the area was hype in the consultant’s
world. With this, also the foundation was laid for software-solutions to facilitate these
new processes and make them less labor and/or error intensive. This SAP takes off on the
promise of the so called “don’t bill us we will credit you”.

A process optimization approach that builds on the potential of technical tools like
document scanning, optical character recognition and workflow software to streamline
and cut costs in the area of the invoice verification.

Most factoring companies verify your invoices before giving you the advance. They
verify an invoice in order to be certain that the invoice is accurate and does not have any
problems. This process helps prevent accidental over-financing or financing invoices that
have disputes.

Most factoring companies verify the following information:

1. That the product/service was delivered

2. That the product/service met your client’s expectations
3. That the invoice amount is accurate
4. That the due date is correct

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Verification methods

The preferred method for verifying invoices is by email. Simply, your account manager
sends an email to the accounts payable representative at your customer and gets the
needed information. Since email doesn’t always provide quick results, invoices can also
be verified by phone. In some instances, invoices can also be verified by fax, though that
method is falling out of use.

Customer impact of verifications

It is recommended that you advise customers that invoices will be verified regularly as
part of your quality assurance process. Be sure to emphasize that one of the objectives of
this practice is to ensure that they are satisfied with your company. Framing it in positive
terms helps obtain their collaboration. Your factoring company should be able to give you
more information on how to best approach your clients.

Disputes and problems

Every so often, the verification process uncovers a problem. Often, problems occur if
your client is not satisfied with the services or if there is a misunderstanding regarding
expectations. Most factors inform you of issues immediately so that you can engage your
customer and resolve the problem. Invoices that have disputes can’t be financed until the
problem is resolved.

The verification process is one of the most important points of contact between your
clients and the factoring company. You should become familiar and comfortable with
your provider’s verification processes before you sign on as a client. You should also
consider that some clients may not agree or collaborate with the verification process. If
that is the case, you may be better off not financing invoices for that particular client.

SAP DEFINITION OF INVOICE VERIFICATION

“The matching of document created during Purchase Order process, the goods receipt
process and accounts payable process which is an integral part of an organization”.

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PROCESS DESCRIPTION:

When you receive a credit note for goods for which you have entered a purchase order
and carried out goods receipt and invoice verification on SAP, you will need to process
the credit note on SAP.
This User Guide explains how to process a credit note for items ordered, received and
Invoiced where there is a change in the price of the items to your advantage (i.e. no
change in the quantity of Items to be paid for).
Invoice Verification is a process which confirms in SAP that an invoice has been received
by the Department. Goods receipt will have to have been entered on SAP prior to invoice
verification unless that process has been by-passed at the raising of the purchase order.
This Guide also explains how to process a credit note for items ordered, received and
invoiced where some items were sent back to the vendor (i.e. a change in the quantity a
of items to be paid for).
SAP always expects the invoice to be processed before the credit note can enter.
The company needs to pay its invoices in order to function properly. It also needs to
record vendor invoices and payments in the accounting books and registers. SAP is a help
here. Accounts Payable is an important part of SAP Finance.

Procedure of Invoice Verification:

1.1 Accessing the Logistics Invoice Verification screen:

To access the screen to enter a credit note, follow the menu path: Logistics> Materials
Management> Invoice Verification> Logistics Invoice Verification or use transaction
code MIRO.

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1.2 Entering credit note data:

On the Invoice Verification screen, enter information as specified in the table above.

On the Invoice Verification screen, enter information as specified in the table below:
Field Name Description User Action and Values Comments

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Transaction Subsequent credit or Select and enter either the Select the
Credit memo ‘Subsequent credit’ or ‘Subsequent
‘Credit memo’ transaction. credit’ transaction
where there is no
change in the
quantity of items
to be paid for.
Select the ‘Credit
memo’ transaction
where there is a
change in the
quantity of items
to be paid for.

Invoice The date of the credit Enter the date printed on

date note the credit note
Posting The date you are This will default in as
date entering the credit note today’s date

The credit note number Enter the credit note Entering the credit
Reference
number from the credit note note number in
here in the same format as the same format
it is on the document will make it easier
if you need to
refer to/find it
again at a later
date
Amount The total of the credit The total amount of the
note credit note including tax.

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Tax The tax amount The tax portion of the
credit note

Calculate Don’t put anything in here

tax
Tax code Don’t put anything in here

The purchase order The purchase order number

Purchase
number from when you placed the
order/sched
order.
uling
If the credit note refers to
agreement
several purchase orders, the
several purchase order
numbers can be entered by
clicking on the ‘More
allocation criteria’ yellow
arrow.
PRESS ENTER

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1.3 Checking the vendor payee details:
You will see the vendor number for the vendor that the purchase order was raised against
and the name and address of the vendor default into the screen:

27
If the credit note is from a different vendor to the vendor entered on the purchase order
and the original invoice was verified with this different vendor as an alternative payee,
then enter the different vendor on the credit note as an alternative payee on the details tab.
If you are entering a ‘Subsequent credit’, i.e. paying less for items with no change in the
quantity of items to be paid for, proceeds to Section 1.4.

If you are entering a ‘Credit memo’, i.e. a change in the quantity of items to be paid for,
proceed to Section 1.5.

1.4 Verifying a Subsequent credit:

By following Sections 1.1, 1.2, and 1.3, details of the line items will have defaulted into
the screen from the original purchase order.
Enter the net amount of the credit against the appropriate line items.
Note: a credit note cannot be for more than the amount already invoiced.

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Select the lines that the credit refers to by clicking on the boxes to the left of the items so
that they are a darker shade of grey.

Proceed to Section 1.6 to simulate the posting of the Credit memo.

In this screen, check the following:
 Each of your line items should be against its ledger code; nothing should be assigned
to G/L account 91250.
 The Debit should equal the Credit, and the Balance at the bottom should be 0.00.
If the simulation is correct, proceed to Section 1.7 to post the credit note.

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If the simulation is not correct, go back to the Invoice Verification screen by clicking on
the ‘Back’ icon and make your corrections.
When simulating the posting of the credit note, if the warning message ‘Invoice
document still contains messages (see error log) appears, see Section 1.8

1.7 Posting the credit note for payment:

Click on the save button to post the credit note for payment. This takes you back to the
Invoice Verification screen ready for the next invoice/credit note. The document
number is given at the bottom of the screen. Every time SAP carries a function, it
creates a unique document number within a range. The number range for
invoice/credit note verification starts with 51.
Use the rubber stamp on the invoice and write in the document number SAP produces in
the box marked ‘Document no’ and obtain the appropriate signature to authorize the
credit note.
Send the verified and authorized credit note to the payments office

1.8 Processing error messages:

When simulating the posting of a credit note (Section 1.6), if the warning message,
appears instead of the simulate screen, follow the path: Go to> Messages. Note the
Verification log Message text, ‘Enter’ to return to the Invoice Verification screen and
make the appropriate change to the verification entry.

BANK GUARANTEE

A bank guarantee is when a lending institution promises to cover a loss if a borrower

defaults on a loan. The guarantee lets a company buy what it otherwise could not, helping
business growth and promoting entrepreneurial activity.

There are different kinds of bank guarantees, including direct and indirect guarantees.
Banks typically use direct guarantees in foreign or domestic business, issued directly to

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the beneficiary. The term direct guarantee applies when the bank’s security does not rely
on the existence, validity and enforceability of the main obligation. Individuals often
choose guarantees for international and cross-border transactions, which can be more
easily adapted to foreign legal systems and practices due to not having form
requirements.

Indirect guarantees occur most often in the export business, especially when government
agencies or public entities are the beneficiaries of the guarantee. Many countries do not
accept foreign banks and guarantors because of legal issues or other form requirements.
With an indirect guarantee one uses a second bank, typically a foreign bank with a head
office in the beneficiary’s country of domicile. For example, Company A is a new
restaurant that wants to buy $3 million in kitchen equipment. The equipment vendor
requires Company A to provide a bank guarantee to cover payments before they ship the
equipment to Company A. Company A requests a guarantee from the lending institution
keeping its cash accounts. The bank essentially cosigns the purchase contract with the
vendor.

Who Can Get a Bank Guarantee?

By providing a guarantee, a bank offers to honor any payment to the creditors upon
receiving a request. This requires that the financial institution be very sure of the business
or individual to whom the bank guarantee is being issued. So, banks run risk assessments
to ensure that the guaranteed sum can be retrieved back from the business. This may
require the business to furnish a security in the shape of cash or capital assets. Any entity
that can pass the risk assessment and provide security may obtain a bank guarantee.

How Do Bank Guarantees Work?

The system for providing bank guarantees work like this:

 Applicant and the creditor ascertain that there is a need for a bank guarantee.
 Applicant reaches out to a financial institution to issue a bank guarantee to the
creditor.

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  The bank runs a risk assessment and asks for a security.
 The applicant furnishes the security and the bank, or the financial institution
processes the bank guarantee.
 The bank guarantee is sent to the creditor’s bank or the creditor, or the applicant
may be asked to collect it in person to give it to their creditor.

Advantages of Bank Guarantee

A business benefits from a bank guarantee as:

 It allows one to defer payment for goods or services procured on the basis of the
security provided by the bank guarantee.
 All the money is not tied up in one project but can be spread around.
 There is the cash available to explore and expand business.

Types & Purposes of Bank Guarantees:

There are in general two types of Bank Guarantee:

1. Direct bank guarantee is a guarantee which is issued by the bank of the account
holder directly in favor of the Beneficiary.
2. Indirect guarantee is a guarantee which is issued by a second bank in return for a
counter-guarantee.

A financial institution can provide many different types of bank guarantees. These
include the following:

 Performance Guarantee (or Performance Bond) – these are bonds that act
as collateral for any loss suffered by the buyer in case the performance of the
seller is below par.
 Advance Payment Guarantee – this is to ensure the safety of any advance
payment made by the buyers to the seller. In case the seller is unable to deliver the
service or the goods, then the buyer can get his money back.

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  Payment Guarantee – this guarantee is provided to the seller, ensuring payment by
a predetermined date.
 Conditional Payment Undertaking – This is an instruction to the bank from an
account holder to pay a sum of money to a creditor on completion of certain
conditions. This bond is a post contract instrument that is used to pay off agents
and contractor on completion of a project.
 Guarantees Securing Credit Line – This surety is given to a creditor on claims
against the debtor in case a loan is not repaid as per the terms of the agreement.
 Order and Counter Guarantee – This is a surety given by the debtor to the creditor,
to protect against the failure to fulfill an obligation as contracted. In case of
default, the creditor can demand the payment back

Examples of Bank Guarantees:

Because of the general nature of a bank guarantee there are many kinds. Here are some
common examples:

 A payment guarantee assures a seller the purchase price is paid on a set date.
 An advance payment guarantees acts as collateral for reimbursing advance
payment from the buyer if the seller does not supply the specified goods per the
contract.
 A credit security bond serves as collateral for repaying a loan.
 A rental guarantee serves as collateral for rental agreement payments.
 A confirmed payment order is an irrevocable obligation where the bank pays the
beneficiary a set amount on a given date on the client’s behalf.
 A performance bond serves as collateral for the buyer’s costs incurred if services
or goods are not provided as agreed in the contract.
 A warranty bond serves as collateral ensuring ordered goods are delivered as
agreed.

This is issued by the Bank in favor of a buyer who makes the advance, at the request of
the seller/contractor who received the advance, representing the Bank's commitment to

33
repay the sum in the event that the seller/contractor fails to honor the contract terms in
their entirety or in part.

Suppliers' Credit Guarantee

Such guarantee is issued by the Bank to meet any claims to be made by the local or
foreign supplier (beneficiary) in case the debtor (local buyer) fails to repay in accordance
with the terms and conditions of the contract.

Retention Guarantee

Such guarantee is issued by the Bank to provide security to the party accepting the
release of the retention (beneficiary) in the event that the seller or the contractor fails to
perform its obligation as per the term and conditions of the contract.

CUSTOM DUTY

Customs Duty is a tax imposed on imports and exports of goods. A tax levied on imports
(and, sometimes, on exports) by the customs authorities of a country to raise state
revenue, and/or to protect domestic industries from more efficient or predatory
competitors from abroad. Customs duty is based generally on the value of goods or upon
the weight, dimensions, or some other criteria of the item (such as the size of the engine,
in case of automobiles).

In the past few months, the government of India brought a major change in the tax
systems of the nation. They introduced GST (Goods and Services Tax), a new tax
collection system, that is a destination based tax, which implies that the consumers are
liable to pay when they use any goods and services.

Earlier, the tax system was complex. Multiple taxes such as service tax, value added tax,
state tax, central excise, etc. were imposed on various goods and services. Under GST,
these multiple taxes have been replaced by just one tax – GST.

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GST has three categories – CGST (Central Goods and Services Tax), SGST (States
Goods and Services Tax) and IGST (Integrated Goods and Services Tax).

Both CGST and SGST are applicable on the intra-state transactions whereas the IGST is
applicable on the inter-state transactions.

The custom duty is now replaced by IGST, which means that instead of the custom duty,
IGST tax is applicable (along with other applicable custom duties) on every import and
export of goods and services. Let’s read further to understand it better.

CVD / SAD IN ADDITION TO BASIC CUSTOMS DUTY - In addition to basic

customs duty, Special Additional Duty of 4% (SAD) and Countervailing duty (CVD)
equal to excise duty is also payable.

Scope and coverage of Customs Law:

Section 12 of Customs Act provides levy of duty on Imports as well as exports. The rate
of duty is as prescribed in Customs Tariff Act, 1975, read with relevant exemption
notifications. Import duty is levied on almost all items, while export duty is levied only
on a few limited products, where Indian goods are in commanding position. Raising
revenue for Central Government is the main but not the only purpose of Customs Act.
Customs Act is used to (a) regulate imports and exports (b) protect Indian industry from
dumping (c) collect revenue of customs duty. In addition, provisions of Customs Act are
used for other Acts like Foreign Trade (Development and Regulation) Act, Foreign
Exchange Management Act (FEMA) etc. Customs Law is covered under various Acts,
rules, regulations and notifications, as follows:

CUSTOMS ACT, 1962 - This is the main Act, which provides for levy and collection of
duty, import/export procedures, prohibitions on importation and exportation of goods,
penalties, offences etc.

CUSTOMS TARIFF ACT, 1975 - The Act contains two schedules - Schedule 1 gives
classification and rate of duties for imports, while schedule 2 gives classification and

35
rates of duties for exports. In addition, the CTA (Customs Tariff Act) makes provisions
for duties like additional duty (CVD), preferential duty, anti-dumping duty, protective
duties.

REVIEW OF LITERATURE
The study was undertaken to know what exactly Invoice Verification, Bank Guarantee,
and Custom Duty is. How Invoice verification is done through ERP (SAP).
How custom duties are levied on the goods and the rates are specified in the schedules of
Custom Tariff Act, 1975.

WHAT THIS PROJECT INCLUDES:

This project depict clear understanding of functioning of Invoice Verification and

different rates used for calculation of Custom Duty. The term INVOICE VERIFICATION
means to review to improve accountability of state funds by providing reasonable
assurances that overpayments and erroneous billings are not occurring with providers of
services. And CUSTOM DUTY means tax imposed on imports. They are used for
restricting Imports for conserving foreign exchange.

This also gives overview of BANK GUARANTEE. Bank Guarantee is an indemnity

letter in which the bank commits itself to pay a certain sum if a third party fails to
perform or if any other form of default occurs. The data used is in this project is
Secondary Data and Sample Design is used.

This study has been conducted with the help of material and information provided by the
company and from company’s website.

Some limitation may be there in a study of this nature because some confidential data
may create problem. I have tried my best to explain the concepts.

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37
RESEARCH
METHDOLOGY

38
RESEARCH METHDOLOGY
Research in common refers to “search for knowledge”. It is scientific system and for
pertinent information on specific topic. It may be understood as a science of studying
how research is done scientifically. Research methodology is the specific procedures or
techniques used to identify, select, process, and analyze information about a topic. In
a research paper, the methodology section allows the reader to critically evaluate
a study's overall validity and reliability. A research method is a systematic plan for
conducting research. Sociologists draw on a variety of
both qualitative and quantitative research methods, including experiments, survey
research, participant observation, and secondary data. Quantitative methods aim to
classify features, count them, and create statistical models to test hypotheses and explain
observations. Qualitative methods aim for a complete, detailed description of
observations, including the context of events and circumstances.

The Experiment

An experiment is a research method for investigating cause and effect under highly
controlled conditions. When conducting an experiment, researchers will test a hypothesis.
A hypothesis is a statement of how two or more variables are related. For example, let's
say we wanted to examine whether studying affects a person's GPA. Our hypothesis
might be: the more a person studies, the higher a person's GPA will be. In this example,
studying would be the independent variable (the cause), while a person's GPA would be
the dependent variable (the effect).

If we wanted to test this hypothesis, we would randomly assign subjects into two groups.
The experimental group is a group of individuals that are exposed to the independent
variable. The control group, on the other hand, is not exposed to the independent variable.
We would require that the control group doesn't study at all, but that our experimental
group has to study at least 10 hours a week. After one semester, we would then determine

39
which group has the higher GPA. If the experimental group has a statistically higher
GPA, we can assume our hypothesis is correct.

It is important to note that sometimes a change in the dependent variable could be the
result of something entirely different than what was being studied (maybe, for example,
those chosen for the experimental group were simply more intelligent than those in the
control group). When two variables change together but neither one causes the other, we
call this a spurious correlation.

RESEARCH DESIGN
Research Design is a framework in which research resides. The research opted is
EXPLORATORY. It is of flexible nature. It is based on secondary data. So researchers
have to adjust them according to changing environment. The rate of custom duty depends
upon the policy of government. The adoption of software depends upon the decision of
the manufacturer. A research design is the set of methods and procedures used in
collecting and analyzing measures of the variables specified in the research
problem research. The design of a study defines the study type (descriptive, correlation,
semi-experimental, experimental, review, meta-analytic) and sub-type (e.g., descriptive-
longitudinal case study), research problem, hypotheses, independent and dependent
variables, experimental design, and, if applicable, data collection methods and a
statistical analysis plan. A research design is a framework that has been created to find
answers to research questions.

There are many ways to classify research designs, but sometimes the distinction is
artificial and other times different designs are combined. Nonetheless, the list below
offers a number of useful distinctions between possible research designs. A research
design is an arrangement of conditions or collections.

 Descriptive (e.g., case-study, naturalistic observation, survey)

 Correlational (e.g., case-control study, observational study)
 Semi-experimental (e.g., field experiment, quasi-experiment)
 Experimental (experiment with random assignment)

40
 Review (literature review, systematic review)
 Meta-analytic (meta-analysis)

SAMPLE DESIGN
A sample is representative of whole population. Researchers while conducting research
has to draw certain sample for study purpose. A sample design is a definite plan
determined before any data are actually collected for obtaining samples for the same
study. Sample design of my study is RANDOM SAMPLING.

DATA COLLECTION
Data collection is the process of gathering and measuring information on variables of
interest, in an established systematic fashion that enables one to answer stated research
questions, test hypotheses, and evaluate outcomes. The data collection component of
research is common to all fields of study including physical and social sciences,
humanities, business, etc. While methods vary by discipline, the emphasis on ensuring
accurate and honest collection remains the same.

The data is of two types: PRIMARY AND SECONDARY. Data are the facts presented to
the researcher from the study of environment.

41
  PRIMARY DATA in this research was collected through continuous meeting with
employees.
 SECONDARY DATA was collected through websites of company.

After the collection of data, it is edited and edited data is put into a form that makes
research meaningful.

Quantitative and Qualitative Data collection methods

The Quantitative data collection methods rely on random sampling and structured data
collection instruments that fit diverse experiences into predetermined response categories.
They produce results that are easy to summarize, compare, and generalize.

Quantitative research is concerned with testing hypotheses derived from theory and/or
being able to estimate the size of a phenomenon of interest. Depending on the research
question, participants may be randomly assigned to different treatments. If this is not
feasible, the researcher may collect data on participant and situational characteristics in

42
order to statistically control for their influence on the dependent, or outcome, variable. If
the intent is to generalize from the research participants to a larger population, the
researcher will employ probability sampling to select participants.

Typical quantitative data gathering strategies include:

 Experiments/clinical trials.
 Observing and recording well-defined events (e.g., counting the number of
patients waiting in emergency at specified times of the day).
 Obtaining relevant data from management information systems.
 Administering surveys with closed-ended questions (e.g., face-to face and
telephone interviews, questionnaires).

Interviews

In Quantitative research (survey research), interviews are more structured than in

Qualitative research. In a structured interview, the researcher asks a standard set of
questions and nothing more.

Face -to -face interviews have a distinct advantage of enabling the researcher to establish
rapport with potential participants and therefor gain their cooperation. These interviews
yield highest response rates in survey research. They also allow the researcher to clarify
ambiguous answers and when appropriate, seek follow-up information. Disadvantages
include impractical when large samples are involved time consuming and expensive.

Telephone interviews are less time consuming and less expensive and the researcher has
ready access to anyone on the planet that has a telephone. Disadvantages are that the
response rate is not as high as the face-to- face interview as but considerably higher than
the mailed questionnaire. The sample may be biased to the extent that people without
phones are part of the population about whom the researcher wants to draw inferences.

Computer Assisted Personal Interviewing (CAPI): is a form of personal interviewing, but

instead of completing a questionnaire, the interviewer brings along a laptop or hand-held

43
computer to enter the information directly into the database. This method saves time
involved in processing the data, as well as saving the interviewer from carrying around
hundreds of questionnaires. However, this type of data collection method can be
expensive to set up and requires that interviewers have computer and typing skills.

Questionnaires

Paper-pencil-questionnaires can be sent to a large number of people and saves the

researcher time and money. People are more truthful while responding to the
questionnaires regarding controversial issues in particular due to the fact that their
responses are anonymous. But they also have drawbacks. Majority of the people who
receive questionnaires don't return them and those who do might not be representative of
the originally selected sample.

Web based questionnaires:

A new and inevitably growing methodology is the use of Internet based research. This
would mean receiving an e-mail on which you would click on an address that would take
you to a secure web-site to fill in a questionnaire. This type of research is often quicker
and less detailed. Some disadvantages of this method include the exclusion of people who
do not have a computer or are unable to access a computer. Also the validity of such
surveys is in question as people might be in a hurry to complete it and so might not give
accurate responses.

Questionnaires often make use of Checklist and rating scales. These devices help simplify
and quantify people's behaviors and attitudes. A checklist is a list of behaviors,
characteristics, or other entities that the researcher is looking for. Either the researcher or
survey participant simply checks whether each item on the list is observed, present or true
or vice versa. A rating scale is more useful when a behavior needs to be evaluated on a
continuum. They are also known as Likert scales.

Qualitative data collection methods play an important role in impact evaluation by

providing information useful to understand the processes behind observed results and

44
assess changes in people’s perceptions of their well-being. Furthermore qualitative
methods can be used to improve the quality of survey-based quantitative evaluations by
helping generate evaluation hypothesis; strengthening the design of survey questionnaires
and expanding or clarifying quantitative evaluation findings. These methods are
characterized by the following attributes:

 they tend to be open-ended and have less structured protocols (i.e., researchers
may change the data collection strategy by adding, refining, or dropping
techniques or informants)
 they rely more heavily on iterative interviews; respondents may be interviewed
several times to follow up on a particular issue, clarify concepts or check the
reliability of data
 they use triangulation to increase the credibility of their findings (i.e., researchers
rely on multiple data collection methods to check the authenticity of their results)
 generally their findings are not generalizable to any specific population, rather
each case study produces a single piece of evidence that can be used to seek
general patterns among different studies of the same issue

Regardless of the kinds of data involved, data collection in a qualitative study takes a
great deal of time. The researcher needs to record any potentially useful data thoroughly,
accurately, and systematically, using field notes, sketches, audiotapes, photographs and
other suitable means. The data collection methods must observe the ethical principles of
research.

The qualitative methods most commonly used in evaluation can be classified in three
broad categories:

 in-depth interview
 observation methods
 document review

OJECTIVE OF STUDY
 To study in detail the concept of Invoice verification

45
  To study what is the concept of Bank Guarantee, Custom Duty
 The objective of Invoice Verification is to review to improve accountability of state
funds by providing reasonable assurances that overpayments and erroneous billings
are not occurring with providers of services

 To ensure that accounts for payment and settlement are verified in a cost-effective
and efficient manner while maintaining the required level of control.

 Payment may be made in advance of completion of invoice verification

 Customs duty can be used for achieving Restricting Imports for conserving foreign
exchange.

 Restricting Imports for conserving foreign exchange

 Protecting Indian Industry from undue competition
 Prohibiting imports and exports of goods for achieving the policy objectives of the
Government.
 Regulating exports
 Coordinating legal provisions with other laws dealing with foreign exchange such
as Foreign Trade Act, Foreign Exchange Regulation Act, Conservation of Foreign
Exchange and Prevention of Smuggling Act, etc.

SIGNIFICANCE OF THE STUDY

 Enhanced Adaptability: Enhanced adaptability actually refers towards the

adaptability of SAP towards the existing Business System in any organization. It
provides a heterogeneous environment, integrating the various applications;
databases and making available open technologies like web services readily
available to the user. It saves money on unnecessary customization of the existing
business System.
 Better ROI: SAP increases the return on investment. As mentioned earlier, by
using this technology IT strategies can be synchronized with SAP solutions. This

46
synchronization makes the system more reliable leading to better assessment
services, which in turn lead to financial benefits.

47
ANALYSIS
AND
INTERPRETATIONS

48
INVOICE VERIFICATION
In SAP, three types of bills are passed:-
o excluding freight
o including freight
o job work only

INVOICE (VALID FOR INPUT TAX)

TUBEWELL WORKSHOP & GENERAL INDUSTRIES
INVOICE NO. 544 DATE 15-06-2018
PURCHASE ORDER NO. 6200000197
CONSIGNEE:
M/S JCB INDIA LTD.
23/7 MATHURA ROAD, BALLABGARH
FARIDABAD (HARYANA)
S PART NO. DESCRIPTION QTY. UNIT VALUE BED
NO. RATE Rs. P. Rs. P.
1. 1690 DOUBLER 22 489.60 10771.20 1723.40
40/301701 PLATE
2. 1700 DOUBLER 22 489.60 10771.20 1723.40
40/301702 PLATE
3. 1750 REINFORCING 22 235.20 5174.40 827.91
40/301706 PLATE
4. 1760 REINFORCING 22 235.20 5174.40 827.91
40/301707 PLATE

Total price in words TOTAL VALUE 31891.20

THIRTY EIGHT THOUSAND FIVE
16% 5102.62
HUNDRED SEVENTY NINE & PAISE
Cess 2%on excise 102.05
SEVENTY ONLY.
37095.87
HGST 4% 1483.83
G.TOTAL 38579.70

49
TAX INVOICE
PANCHAL MANUFACTURING CO.PVT.LTD.
36A, Industrial Area, N.I.T Faridabad-121005, India

NAME&ADDRESSOF CONSIGNEE INVOICE NO. 894

JCB INDIA LTD. DATE OF ISSUE 17-06-2018
23/7, MATHURA ROAD,
BALLABGARH
FARIDABAD, HARYANA

ASSESSABLE
S. NO. PART NUMBER DESCRIPTION QTY.
RATE PER VALUE
OF GOODS
UNIT
1. 40/301916 10 G.A. BUCKET 15 120.00 1800.00
LINK NOS

JOB WORK

Total invoice value in words TOTAL INVOICE VALUE 1800.00

Rs.ONE THOUSAND EIGHT HUNDRED ONLY

INVOICE

50
SAKET HARDWARE INDUSTRIES INVOICE NO. 1399
PLOT NO.94 , SEC 59, HSIDC INDUSTRIAL DATE 19-06-2018
ESTATE RATE OF DUTY 16.00%
BALLABGARH, FARIDABAD

S. NO. PART NO. DESCRIPTION OF QTY. RATE ASSESSABLE

GOODS VALUE

4220 335/04060 WA GRILL HOUSING 32 1168.20 37382.40

4250 40/302456 SIDE PANEL 32 174.74 5591.68

4260 40/302457 SIDE PANEL RH 32 174.74 5591.68

4290 40/302258 FAN COWL 8 386.10 3088.80

4610 40/302821 J BOLT 100 3.39 339.00

4660 125/00456 HOSE GUIDE L 10 51.01 510.10

4670 125/00457 HOSE GUIDE R 10 51.01 510.10

51
 SUB TOTAL 53013.76
CENVAT@16% 8482.21
CESS @ 2% 169.64
TAXABLE TOTAL 61665.61
TOTAL VALUE IN WORDS V.A.T 2466.62
SIXTY FOUR THOUSAND ONE HUNDRED THIRTY ROUND OFF -0.23
TWO ONLY G. TOTAL 64132.00

TUBEWELL WORKSHOP $
GENERAL INDUSTRIES
S.NO. 527 DATE 12-06-2018

CONSIGNEE
M/S JCB INDIA LTD
23/7, BALLABGARH
FARIDABAD, HARYANA

S. PART NO. DESCRIPTION QTY. UNIT VALUE BED

NO. RATE Rs. P. Rs. P.

1. 960 629/00137 LH FLOOR EXT. PLATE 5 555.8 2779.00 444.64

2. 1040 696/00705 RH FLOOR EXT. PLATE 5 440.90 2204.50 352.72
3. 1100 696/01390 W.A. CRADLE 1 12667.00 12667.00 2026.72
4. 1110 696/01402 FLY WHEEL ADAPTOR 4 2728.00 10912.00 1745.92
5. 1130 JAV0074 LINK ARM RH 1 623.80 623.80 99.81
6. 1140 JAV0075 LINK ARM LH 1 810.00 810.00 129.60
7. 1150 JAV0076 BUCKET LINK 1 2648.00 2648.00 423.68
8. 1490 40/301760 LH LATCHBOOM LOCK 32 106.03 3392.96 542.88
9. 1500 40/301761 RH LATCHBOOM LOCK 32 106.03 3392.96 542.88

52
10. 1790 40/302438 CROWD LEVER 34 320.13 10884.42 1741.51
11. 1800 40/302439 INTER LEVER 34 561.45 19089.30 3054.29

TOTAL 69403.94
VALUE
16% 11104.65
cess@2%on excise 222.09
80730.68
HGST 4% 3229.23
FREIGHT 2000.00
TOTAL PRICE IN WORDS
G. TOTAL 85959.91
EIGHTY FIVE THOUSAND NINE HUNDRED
FIFTY NINE $ PAISE NINETY ONE ONLY

BANK GUARANTEE

BANK GUARANTEE is a written promise issued by the Bank to compensate (pay a sum
of money) to the beneficiary (third party, local or foreign) in the event that the obligor
(customer) fails to honor its obligations in accordance with the terms and conditions of
the guarantee/agreement/contract. JCB INDIA maintains Bank Guarantee information in
MS-EXCEL. It includes BANK GUARANTEE NO., PARTY NAME, AMOUNT,
EXPIRY DATE, and BANK NAME.

53
BANK GUARANTEE EXPIRY
NO. PARTY NAME AMOUNT DATE BANK NAME
M/S TAL
MANUFACTURING UNION BANK OF
SOLUTIONS LTD 546000 30.09.18 INDIA
M/s.CONVEX AVIO
0005BA00015006 PVT LTD 1164300 30.06.18 1CICI BANK LTD.
M/S SIMA LABS
34/06 PVT LTD 37000 27.10.18 CANARA BANK
M/S SUDHIR SYNDICATE
163/06 GENSETS LIMITED 633600 23.07.18 BANK
M/S SUDHIR SYNDICATE
162/06 GENSETS LIMITED 738000 23.07.18 BANK
M/S ACTIVENT
6022IPEBG060017 ENGINEERING 735000 15.10.18 BANK OF INDIA
M/S HIND
HYDRALUCIS &
6700:FG:2006:582 ENGINEERS 442500 17.06.18 BANK OF INDIA
M/S CHICAGO
PNEUMATIC
5606066506 SALES 142500 18.12.18 CITI BANK N.A.
M/S HIND
HYDRALUCIS &
6700:FG:2006:567 ENGINEERS 95000 05.02.19 BANK OF INDIA
M/S JOST'S
ENGINEERING
COMPANY SOUTH BANK
LIMITED 96000 30.09.18 INDIA LIMITED
M/S GRIP
ENGINEERS PVT MERRADPALLI,
37:05:00 LTD. 219000 31.12.18 SECUNDERABAD
M/S CARYAIRE
EQUIPMENTS
0220/00000732 INDIA PVT LTD. 55900 10.01.19 UTI BANK LTD.
37/05 M/S GRIP 219000 31.12.18 CANARA BANK

54
 ENGINEERS PVT
LTD.
M/S UBIQUE BANK OF
2005/24 SYSTEM 164758 20.06.18 BARODA
M/S TAL
MANFACTURING UNION BANK OF
SOLUTIONS LTD. 1110000 31.03.18 INDIA
M/S TAL
MANFACTURING UNION BANK OF
SOLUTIONS LTD. 9510000 27.10.18 INDIA
M/S BHARAT STATE BANK OF
0302406BG0000022 FRITZ 397448 05.02.18 INDIA
M/S H.S.TOOL PUNJAB
1LG 1805 ROOM CENTRE 60000 15.02.18 NATIONAL BANK
M/S BHARAT STATE BANK OF
0302405BG0000612 FRITZ 280000 31.12.18 INDIA
STATE BANK OF
2005/243 M/S VOLTAS LTD. 97500 24.08.18 INDIA
M/S SKG COORPORATION
PNEUMATICS 33679 25.05.18 BANK
M/S MAKINO ASIA
550-02-0326839 PTE LTD 4425000 24.12.18 DBS BANK LTD
M/S MAKINO ASIA
550-02-0329382 PTE LTD 4425000 26.12.18 DBS BANK LTD
M/S H.S.TOOL PUNJAB
550-02-0329384 ROOM CENTRE 45500 30.06.18 NATIONAL BANK
M/S
INGERSOLLSOLL-
RAND WADCO
5545284504 TOOLS PVT. LTD 119920 10.10.18 CITI BANK N.A.
SAP (UK) LTD 31.04.18
M/S BHARAT STATE BANK OF
0302405BG0000532 FRITZ 1900000 31.08.18 INDIA
M/S BHARAT STATE BANK OF
0302405BG0000513 FRITZ 1070000 07.09.18 INDIA

55
 CUSTOM DUTY

Customs duty is on import into India and export out of India

PREPARATION OF CUSTOM DUTY IN MS-EXCEL

ASSESSABLE TOTAL
QTY RATE AMT VALUE BCD CVD CESS CESS ADD. DUTY

2 45 90 14060.56184 1757.5702 2530.901 50.618023 86.78178768 739.4573205

20 8.2 164 25621.46824 3202.6835 4611.864 92.237286 158.135702 1347.455562
50 67.19 3359.5 524849.5278 65606.191 94472.92 1889.4583 3239.371286 27602.29854
25 3.77 94.25 14724.53282 1840.5666 2650.416 53.008318 90.87981655 774.3761384
5 9.46 47.3 7389.60639 923.7008 1330.129 26.602583 45.60865064 388.6259029
50 5.73 286.5 44759.45519 5594.9319 8056.702 161.13404 276.2553575 2353.939137
8 33.03 264.24 41281.80957 5160.2262 7430.726 148.61451 254.7913286 2171.046693
6 9.74 58.44 9129.991489 1141.2489 1643.398 32.867969 56.35030747 480.1542868
3 103.14 309.42 48340.21161 6042.5265 8701.238 174.02476 298.3557861 2542.254268
3 46.04 138.12 21578.27557 2697.2844 3884.09 77.681792 133.1811168 1134.820501
4 17.47 69.88 10917.24513 1364.6556 1965.104 39.302082 67.38123693 574.1475284
160 0.91 145.6 22746.86449 2843.3581 4094.436 81.888712 140.3936476 1196.277621
6 10.18 61.08 9542.434636 1192.8043 1717.638 34.352765 58.89590657 501.8450349
20 10.25 205 32026.8353 4003.3544 5764.83 115.29661 197.6696275 1684.319452
20 6.23 124.6 19466.06673 2433.2583 3503.892 70.07784 120.1445638 1023.737579
4 11.63 46.52 7267.748187 908.46852 1308.195 26.163893 44.85654181 382.2172728
10 19.01 190.1 29699.03118 3712.3789 5345.826 106.91651 183.3024204 1561.898185
8 11.33 90.64 14160.54806 1770.0685 2548.899 50.977973 87.39890262 744.7156837
5745.19 939743.9 112195.28 161561.2 3231.224 5539.753986 47203.5867
329731.04

JCB INDIA LTD CALCULATES THE FOLLOWING DUTIES

BCD = ASSESSABLE VALUE * 12.5%
CVD = (ASSESSABLE VALUE + BCD) * 16%
CESS = CVD * 2%
TOTAL CESS = (BCD + CVD + CESS) * 2%
ADDITIONAL DUTY= (ASSESSABLE VALUE+BCD + CVD + CESS+ TOTAL
CESS)* 4%

56
FINDINGS,
SUGGESTION
&

57
CONCLUSION

58
FINDINGS & SUGESSTIONS

 Successful implementation of SAP will result in tremendous cost savings and

increased productivity.
 Import of all packaged commodities should be made subject to compliance of
all the conditions of the Standards of Weights and Measures (Packaged
Commodity) Order 1977, as applicable on domestic producers.
 Rate of Custom duty should be set within the limit.

CONCLUSION
Invoice verification through SAP provides a complete solution to standard business
requirements. It results in:
 enhanced adaptability
 better ROI
Bank guarantee
 Develop trust needed by your business associates.
 Facilitate your business activities

Custom duty increases the competitiveness of Domestic industry

LIMITATIONS OF THE STUDY:

1. Limitation of remembering too many codes in SAP.

2. High rate of Custom Duty reduce the competitiveness of industry in International
market.
3. Complex nature of SAP.
4. Fulfillment of legal formalities for undertaking Bank Guarantee.

59
BIBLIOGRAPHY

60
BIBLIOGRAPHY

 C.R. Kothari, Gaurav Garg, RESEARCH METHDOLOGY, Methods and

Techniques, Third Edition, New Age International Publishers
 Zikmund, Millian G., Business Research Methods, Thomson Learning, Bombay
 SAP MM, Invoice Verification, Technical Reference and Learning Guide, P.K.
Agarwal
 TAXMANN’s INDIRECT TAX LAWS, University Edition, V.S. Datey, Vineet
Sodhani
 Cooper, Donald R- and Pamels Schindler, Business Research Methods, Tata
McGraw Hills, New Delhi
 www.achrn.org
 people.uwec.edu
 www.google.com
 www.thespot4sap.com
 www.businessdictionary.com
 www.paisabazaar.com
 www.wikipedia.org
 www.jcb.com
 www.cleverism.com
 www.investopedia.com

61
ANNEXURE

62
ANNEXURE

Invoice verification in SAP was done through Invoice’s available.

INVOICE

SAKET HARDWARE INDUSTRIES INVOICE NO. 1399

PLOT NO.94 , SEC 59, HSIDC INDUSTRIAL ESTATE DATE 19-06-2006
BALLABGARH, FARIDABAD RATE OF DUTY 16.00%

S. PART NO. DESCRIPTION OF QTY. RATE ASSESSABLE

NO. GOODS VALUE
4220 335/04060 WA GRILL 32 1168.20 37382.40
HOUSING

4250 40/302456 SIDE PANEL 32 174.74 5591.68

4260 40/302457 SIDE PANEL RH 32 174.74 5591.68

4290 40/302258 FAN COWL 8 386.10 3088.80

4610 40/302821 J BOLT 100 3.39 339.00

4660 125/00456 HOSE GUIDE L 10 51.01 510.10

4670 125/00457 HOSE GUIDE R 10 51.01 510.10

63
 SUB TOTAL
53013.76

CENVAT@16%
8482.21
CESS @ 2%
169.64
TAXABLE TOTAL
61665.61
V.A.T
2466.62
ROUND OFF
TOTAL VALUE IN WORDS -0.23
SIXTY FOUR THOUSAND ONE HUNDRED G. TOTAL
THIRTY TWO ONLY 64132.00

CUSTOM DUTY CERTIFICATE

525830
Citibank MC / DD / FT APPLICATION
Date____________________

To: OIC, Cash Management, Citibank N.A., □ Ahmedabad □ Bangalore □ Chandigarh □ Chennai
□ Coimbatore ◙Delhi □ Gurgaon □ Hyderabad □ Jaipur □ Kochi □ Kolkata
□ Ludhiana □ Mumbai □ Pune □ Vadodara

Applicant: ________________ JCB INDIA LTD___________________Account No_______1040006

Please arrange to issue the following as per details below:

64
□ Pay Order / Manager’s check □ Demand Draft □ Funds Transfer (for Metros only)
□ The instrument is to be
◙ Collected by our representative from Citibank Mr. Puneet Kaushik
□ Delivered to. (Please give the complete address_______________________________________________
_________________________________________________________
_________________________________________________________

□ The fund are to be credited to account no______________with_____________Bank

at____________Branch
in_____________________________________________________________________________________
_

Payment Details
Sr No. Beneficiary Location Amount
1. PNB A/C CUSTOM DUTY A/C JCB INDIA LTD. NEW DELHI 750418.00
2. ……………………DO……………………………. …….DO………. 17029.00

Total amount 767447.00

(In Words) Seven Lacs sixty seven thousand four hundred forty seven only ……………………..
………………………………………………………………………………………………………

Reimbursement Instruction
□ Debit our account no ___________1040006___________for principal and charges.

65
□ Find enclosed funding check for Rs._________________for amount as well as charges.
___________________________________________
Authorized Signatory with Co. Stamp

CITIBANK PAYS THE CUSTOM DUTY ON BEHALF OF JCB INDIA LTD.

66