A STUDY OF SAFETY MEASURES & WELFARE ACTIVITIES AT INDO COUNT INDUSTRIES LIMITED, KOLHAPUR

REPORT ONMANAGEMENT THESIS

Payment Procedures

WITH SPECIAL REFERENCE TO,

(Ratnagiri)

Under the guidance of

Faculty Supervisor

Mr. Ajay RazdanSUBMITTED BY:-

Mr. Ashish AyareEnrollment No. 36 SUBMITTED TO Mumbai UniversityCOMPANY CERTIFICATECOLLEGE CERTIFICATE

DECLARATION

I Mr. Ashish Ayare student of MASTERS OF MANAGEMENT STUDIES 2nd year (III Semester) at RAJENDRA MANE COLLEGE OF ENGINEERING AND TECHNOLOGY, AMBAV. Hereby declare that I have completed my research project titled A Payment Gateways & Procedures as partial fulfillment of the requirement of the course curriculum for the academic year 2011-12, under the guidance of Mr. Ajay Razdan.The data that has been collected by me is truly authentic and is not borrowed or copied from any dissertation report. The project contains true and complete information.

Place:

Signature of the student

Date:

Specialization: FinanceACKNOLOGMENT: I express my heartfelt thanks to the R.M.C.E.T. College, who has given me an opportunity to do my project report. My sincere thanks to my faculty guides Mr. Ajay Razdan, who has always been a great source of motivation and guidance during my project report work.

The motivation and practicality he has taught me is of immense value to me. It was his guidance and support that enabled me to complete my project report. He took care of all my requirements and always helped me out when I was in need.

My heartfelt gratitude to my H.O.D. Prof. M.Y. Shinde and all the Accounts & finance department members of JSW ENERGY Ltd. Jaigad who though far away kept on guiding and motivating me day in and day out.

I am indebted to all my colleagues who have helped me both professionally and socially during this project report work.

PLACE- JAIGAD, RATNAGIRI

DATE-Ashish AyareEXICUTIVE SUMMARY

For doing the project report I Select the topic A study of Payment gateways & procedures at the jsw energy ltd. This study has conducted at JSW ENERGY LTD. At Jaigad Plant, Ratnagiri. Researcher has collected data from the Accounts & Finance department regarding the payment systems to the other parties of the company. Regarding to Vendors, Employees, etc. Accounts & Finance department assisted very well. It was detail discussion with department heads regarding the Payment System, Effective internal control on it, Payment Gateways.CONTENTSSr. No.Particulars

1.Introduction

2.History & IntroductionOf Workplace

3.Objectives

4.Literature review for Project

5.Payment gateways & Procedures

6.Brief summary & Conclusion

INTRODUCTION

The Study

This study has conducted at JSW Energy Ltd, Ratnagiri. The Plant is wholly subsidiary of JSW group, engaged in producing Power. This study is focused on various finance functions and effects of payment procedures on financial condition of the Company.

The study is conducted with the help of accounts & Finance team in the company, focused on the How the payments generated in favor of vendors, employees, local bodies etc. and how it affects on the overall financial condition of the company includes Working capital requirement, various financial decisions etc.

JSW ENERGY Brief Overview

Indias GDP grew at the robust 8.6% against the backdrop of a good monsoon & growing momentum in the manufacturing sector for most part of fiscal 2011.The financial year 2010-2011 was a landmark year for power sector specifically from generation prospective as the country achieved the highest ever yearly addition to the installed power generation capacity of 14228 MW. The 11th plan period is expected to witness the highest capacity addition in power generation in any plan period with estimates being revised to 62000 MW during the plan period (2007-2012). This has been feasible due to the favourable climate provided by Govt by way of reforms & active private sector participation.

Provisional Power Generation programme in IndiaJSW ENERGY with its dynamic track record of project completion and efficiency in operations clicked significant growth over the previous year. Gross energy generation of 9.85 invoiceion units during this year registers a 62% increase over last year.

735 MW of increased generation capacity from the commissioning of 2 units of 300MW power at Ratnagiri, Maharashtra and one unit of 135 MW power project at Barmer, Rajastjan.

Sales grew significantly by 82% while EBITDA and PBT grew by 32% and 13% respectively over last year.

Balance 2 x 300 MW units of Ratnagiri would attain Commercial operation in first half of the FY 2011-12 and balance 6 X 35 MW of Barmer would be commissioned during the FY 2011-12. JSW Energy achieve Techno Economic Clearance and Environment Clearance for 240 MW Kutehr Hydro Project and signed the Implementation Agreement with Himachal Pradesh Government. Companys maiden venture in Transmission Jaigad Power Transco Limited- a Joint venture with Maharashtra State Electricity Transmission Company Limited, achieved commercial operation of first segment of 400 KV double circuit quad conductors Jaigad- New Koyna Transmission line on 7th July,2010 and second segment Jaigad-Karad Transmission line would be commissioned in the first half of 2011-12.

Management

Board of directors 1) MR.SAJJAN JINDAL

Chairman and Managing Director

2) Mr. N.K. JAIN

Vice-Chairman

3) MR.LALIT KUMAR GUPTA

Joint Managing Director and CEO

4) MR.S. S. RAO

Whole Time Director

5) MR.T. R. BAJALIA

Nominee Director of IDBI bank ltd.

6) MR. D. J. BALAJI RAO

Director

SYMBOL OF THE COMPANY:

ACHIVEMENTS OF THE COMPANYThe financial year 2010-11 was a landmark year for Power sector

Specifically from generation perspective as the Country achieved the highest ever yearly addition to installed power generation capacity of 14,228 MW. JSW Energy, with its dynamic track record

of project completion and efficiency in operations clocked significant growth over the previous year. Some of the key

Highlights are:

Gross energy generation of 9.85 invoiceion units during this year

Registers a 62 % increase over last year.

735 MW of increased Generation capacity - from the commissioning of 2 units of 300 MW power project at

Ratnagiri, Maharashtra and one unit of 135 MW power project at Barmer, Rajasthan.

Sales grew significantly by 82% while EBITDA and PBT grew by 32% and 13% respectively over last year.LIST OF COMPETITORS:There is couple of competitors of this power plant.

1. KOYNA power project run by Maharashtra State Electricity Company.2. Around six to seven Thermal Power projects running in Maharashtra.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March 2011 is summarized below:

DIVIDEND

Directors have recommended Dividend of 1 per share (10%) on 164,00,54,795 Equity Shares of Face Value of 10 each for financial year 2010-11 (Rs. 0.75 per share (7.5%) in previous year), subject to the approval of the Members at the ensuing Annual General Meeting. Together with the Dividend Distribution Tax, the total outflow on account of Equity dividend will be Rs. 190.62 croresNEW PROJECTS, INITIATIVES AND JOINT VENTURESKuther Hydro Project

Company is implementing the 240MW (3X80 MW), run of the river Hydro Electric Project (HEP) on the upper reaches of river Ravi in the district of Chamba, Himachal Pradesh. An Implementation Agreement (IA) is signed with Himachal Pradesh Government on 4th March, 2011. Central Electricity Authority (CEA) has granted consent for the project on 31st August, 2010 and has approved the estimated project cost at Rs. 1,798.13 crores. The Company intends to finance the Project with a Debt Equity ratio of 75:25. In terms of IA, the Company will be required to sell certain quantum of power to the Government of Himachal Pradesh with the balance power being available for sale by way of short-term power purchase agreements through JSWPTC. The Project is progressing well and The Company has invested Rs. 119.42 crores into the Project upto 31st March, 2011.660 MW Power Plant at Vijayanagar

The Company proposes to expand the capacity at Vijayanagar by setting up one unit of 660MW based on super critical technology. Steps have been initiated to obtain necessary consents to set up and operate the Power Plant. Total project cost is estimated at Rs. 3,630 crores and is proposed to be financed with a debt equity ratio of 75:25.3200 MW Power Plant at Ratnagiri

The Company is also considering the development of the 4 X 800 (3200) MW super-critical coal-based power plant at Ratnagiri, Maharashtra. The Environment Clearance for this project is pending on account of the review being undertaken by Western Ghat Expert Ecology Panel constituted by Ministry of Environment and Forests. The Company has acquired certain portion of the land and also proposes to acquire/lease further land for this project as may be required / necessary.

The estimated project cost is approximately Rs. 15,000 crores. The Company has invested Rs. 61 crores on this project as on 31st March, 2011.1620 MW - Coal based Thermal Power Plant at Jharkhand

The Company has plans to develop a 1,620 MW Power Plant near Baranda, Jharkhand. The Company is still in the process of finalizing the location for the Power Plant and initiating steps to

secure the fuel linkage for the proposed power project.Toshiba JSW Turbine & Generator Private Limited (Toshiba JSW)

Toshiba JSW has been incorporated with a shareholding of 75% by Toshiba Corporation Limited, Japan, 20% by The Company and 5% by JSW Steel Limited to design, manufacture, marketing and maintenance services of large sized Supercritical Steam Turbines & Generators of size 500 MW to 1000 MW. Technology transfer agreement was signed between Toshiba Corporation, Japan and Toshiba JSW for transferring supercritical turbine manufacturing technology. The land development, civil work, engineering and procurement of equipment have been completed and Toshiba JSW has

achieved 86 % progress on construction of manufacturing facility on land leased from Government of Tamil Nadu near Ennore Port, Chennai. The Blade shop is ready and trial manufacturing of blades have commenced. The manufacturing of complete Steam Turbine Generator is expected to commence from July 2012. The JV with Toshiba is expected to provide the Company with advantage while enhancing its generation capacity in terms of being its preferred client.MJSJ Coal Limited (MJSJ)

In terms of the Joint Venture Agreement to develop Utkal-A and Gopal Prasad (West) Thermal coal block in Orissa, The Company has participated in the 11% equity of MJSJ, Orissa along with four other partners. The Government of India has decided to allot 1,522 acres of Gopal Prasad west area to MJSJ. Mahanadi Coalfields Limited, a Public sector Company holds 60% of the equity. Land acquisition is currently under progress. The Company has invested ` 4.41 crores in MJSJ for 11% stake as on 31st March, 2011.Power Exchange of India Limited (PXIL)

The Company has acquired 3.64% stake by investing ` 1.25 crores in PXIL which provides the platform for trading in electricity. PXIL is promoted by National Stock Exchange of India Limited

and National Commodities & Derivatives Exchange Limited.

CIC Energy Corp (CIC)

The Company has entered into a binding Agreement with CIC, a Company incorporated in the British Virgin Islands and listed on the Toronto and Botswana Stock Exchanges and having Coal reserves of 2.7 invoiceion tons in Botswana, to acquire all of the shares of CIC at a price of CAD 7.42 per share, amounting to a total consideration of approximately CAD 422 million. The acquisition is to be effected by a subsidiary of the Company which is subject to regulatory approvals and completion of confirmatory due diligence while CIC has to comply with certain conditions precedent to the offer.Acquisition of South African Coal Mining Holdings Limited (SACMH)

The Company through JSWENRSAL has acquired 49.80% shareholding of Royal Bafokeng Capital (Proprietary) Limited (RBC), a majority shareholder of SACMH with 58.47% shareholding. JSWENRSAL has acquired an additional 30.37% stake in SACMH under the open offer for acquiring the shares of SACMH. Thus, The Company now has an aggregate holding of 59.49% in SACMH as on 31st March, 2011.OPPORTUNITIES AND THREATS

With the economy expected to maintain growth levels of 8.2%, it is essential for the power sector to continue the pace of growth in generation capacity besides expediting the reforms in transmission and distribution. This provides ample opportunity for the Company in the sector. The present operations of the Company are located in the deficit prone states of Maharashtra, Karnataka and Rajasthan, thereby providing competitive edge to sell power. Besides, the units are located in close proximity to fuel source or infrastructure, enabling efficient operations and considerably reduce risk related to fuel logistics and related costs. As an established power Company with proven operating track record, the Company has good standing in the power industry thereby having ability to attract and retain talent. The low gearing and liquidity in the Company will enable the Company to achieve financial closure for new projects as also consider acquisitions to strengthen the business profile. However the following factors may impact the business of our Company. As we have to sell sizable volumes on merchant basis, our business is dependent significantly on our ability to sell in merchant market, which is dependent on the procurement plan of the distribution licensees. With the addition in power generation capacity, the competition for sale of power in merchant market is expected to increase and may impact our pricing ability and impact our results of operation. Rising price of imported thermal coal and dependence on purchase of coal at spot prices are expected to increase the cost of procurements. Inability of firmed up fuel supplies to perform as per the contract will expose us to spot procurement. Delays in land acquisition, environmental clearances and other approvals remain an area of concern and may impact the schedule of projects under implementation and projects under development planned by the Company.CORPORATE SOCIAL RESPONSIBILITY

The CSR vision of the JSW group is spearheaded by the JSW Foundation and stands for the Companys strong belief in inclusive growth. The idea is to facilitate growth and empowerment by

providing holistic opportunities across various fields. JSW Energy undertakes some community projects directly as well as through the Foundation depending on the end objective.

Jindal Vidya Mandir at Jaigad, Ratnagiri accredited to CBSE Board provides education up to Class V level and is equipped with high quality teaching staff. The school provides all round personality development to the students in terms of academics as well as extracurricular activities. The Company is constructing a total of 250 individual toilets Units as part of its focused sanitation initiative at Ratnagiri in collaboration with the Total Sanitation Campaign of the Government.

The Company is also developing a village school ground as Part of its community service initiative to enable students to Make use of the facility. At the Sir J J School of Arts in Mumbai, the foundation is presently completing the restoration of the Interiors of the Fine Arts Building as part of the major exterior restoration initiative. A scholarship has been created in collaboration with the Prince of Wales Charities for an Indian student to acquire advanced training in line drawing and sketching.Introduction to WorkplacePROJECT PHOTOGRAPH AT JSW ENERGY LTD. JAIGAD, RATNAGIRI.

JAIGAD Plant, (RATNAGIRI.)

JSW energy ltd. Jaigad, (Ratnagiri) was established in 2007. The XIth plan period is expected to witness the highest capacity addition in power generation in any plan period with estimates being revised to 62,000 MW during the Plan Period (2007-2012).

During fiscal 2011, JSW Energy (Ratnagiri) Limited (JSWERL), a wholly owned subsidiary of the Company, setting up a 1,200 MW (4 X 300 MW) power plant at Ratnagiri, Maharashtra, was merged with itself pursuant to a Court approved Scheme of Amalgamation with an appointed date of 1st April, 2010. Two units of 300 MW each commenced commercial operations at Ratnagiri and hence the financial results for fiscal 2011 include the results of perations of these two units as well.

This Company is also considering the development of the 4 X 800 (3200) MW super-critical coal-based power plant at Ratnagiri, Maharashtra. The Environment Clearance for this

Project is pending on account of the review being undertaken by Western Ghat Expert Ecology Panel constituted by Ministry of Environment and Forests.

This Company has acquired certain portion of the land and also proposes to acquire/lease further land for this project as may be required / necessary. The estimated project cost is approximately Rs. 15,000 crores. The Company has invested 61 crores on this project as on 31st March, 2011. Objectives

The Study

To study the organization. History of the orgnisation, Current projects, Future expansions of the company. Identify the Procedures followed in Accounts & Finance Department for Payment, the structure of payment processes, verifying the Purchase/ Work orders issued to the vendors, Invoices raised by the vendors & the payment vouchers prepared by the accounts team is properly analyzed & scrutinized.

To understand the Factors affecting various procedures in the department. To draw proper conclusions based on data analysis & give suggestions, if required. Payment Gateway Process

Accounts Department JSW Energy

Literature Review

In recent years, agencies have taken advantage of advancing technology to streamline operations and reduce costs in financial management systems. Many of the agencies designs and systems modifications have been creative and innovative in streamlining payment systems and reducing costs.In each case, after working with the agencies, we summarized their designs and our positions with regard to the internal control in their designs Our intentions are to (1) Assist agencies in maintaining sound internal control

(2) Help them focus requests for our assistance on the effectiveness of planned internal control for revised payment systems.

Traditional Payment ProcessThe following steps of the acquisition and payment process involving general purchases(1) Purchase authorization (the ordering function)

(2) Receipt and acceptance of the items ordered,

(3) Receipt of the invoice

(4) Payment approval and authorization, and

(5) Actual payment (disbursement of funds).

The purchase authorization portion of the process is the formal approvalof the purchase by responsible designated officials within the agency and usually results in the obligation of budget authority. The receipt and acceptance portion generally involves a government employee taking possession of the items purchased and verifying quantity and quality of the

items received. Receipt of the invoice or invoice from the supplier or vendor represents a claim against the government for the items sent or delivered per the governments purchase order.The payment approval and authorization portions of the process can involve a multistep process with administrative approvals being first followed by payment authorization. An administrative approval is generally performed by a responsible official in the unit that ordered or received the items purchased. The administrative approval normally is based on verification that the items ordered were actually received and met the governments specifications, and thus validates a vendors request (invoice) for payment. Payment authorization is generally restricted to designated persons in the agency. These individuals can be held personally liable, under certain circumstances, for authorizations made by them. These individuals are responsible for ensuring the legality, propriety, validity, and accuracy of all payments they authorize. Specifically, they must determine whether

The payment is permitted by law;

The appropriation amounts are available at the time and are being used for

the intended purpose;

The goods and services have been received and conform to the

requirements of the order or agreement;

The required administrative approvals have been obtained; and

The quantities, prices, and calculations are accurate.

Once the staff was satisfied that the invoice reflected a legal, proper, valid, and accurate amount, the invoice was deemed ready for payment. The invoice amount, or an adjusted or modified amount, was prepared for payment on a specific form. The specific form was forwarded along with the related supporting documents to the agency certifying or disbursing officer for review and approval. Once approved, by signature, the form without the supporting documents was forwarded to Treasury (for civil agencies) or another unit under the disbursing officer (for DOD) for actual payment. Lastly, the hard copy documents (i.e., obligation document, receiving report, and the invoice) supporting a disbursement were normally filed centrally at the certifying or disbursing officers location for easy access in the event of a management review or outside audit of the payment process.

Importance of Effective Internal Control and Financial Management SystemsEach agencys internal control over the payment process should be based on the operating needs of the agency. In particular, the units that process payments under the direction of the certifying and disbursing officers should have in place effective internal control activities to ensure payments are legal, proper, valid, and accurate and that duplicate payments are avoided. Under traditional payment processes, certifying officers reviewed all invoices they authorized for payment. Although the certifying officers are primarily responsible for payments authorized, the volume of transactions, the geographic dispersion of activities, and the emphasis on prompt payment make it virtually impossible for these individuals to review all invoices before authorizing payment. Consequently, in fulfilling their responsibilities, these officers must rely on the systems, internal controls, and personnel that process the transactions. As a result, payment process oversight has generally shifted from individual transaction reviews to reviews of internal control over systems that process the transactions.

While new technologies and reengineering of business processes may change how certifying and disbursing officers operate, their basic responsibilities and accountabilities remain unaltered. Consequently, these officers must have valid and documented assurances that the systems and key controls on which they rely for authorizing payments are working as intended and remain intact and effective over time. This confidence in the systems and control should be based on several factors; among the most significant are the following:

A well-defined organizational structure and flow of work, appropriate separation of responsibilities, and clearly written policies and procedures governing purchase authorization, receipt of goods and services, and examination and approval of invoices for payment.

Effective application of available technology for efficient and effective acquisition of goods and services and processing of payment authorization.

Review of the invoice examination process in sufficient scope, depth, and frequency to provide reasonable assurance that systems and controls are working as intended and are reliable.Payment Process at JSW

Generate payments for Vendor.

1. Work Orders / Purchase Orders are raised by the concerned departments, by requesting various quotations & approving best quote among them. The W.O/P.O is raised through ERP. Which having the details like the Name & address of the vendor, Description of work or Product ordered, payment conditions, delivery conditions etc.

2. The W.O/ P.O raised by the concerned departments are given to the vendors to start the work or supply quoted material. Generally Work orders raised by concerned Departments & Purchase orders raised by the Purchase Department.

3. If any mobilization advance payment is required then the W.O/P.O is come to accounts department to process payment.

4. After completion of work this W.O/P.O is submitted by the concern department along with the GRN & FR.

GRN (Goods Received Note) is the note raised by the store stating that the ordered material received in the store or at the site. The GRN consists the store officer signature on the delivery challan as well as entry in the ERP used by the company.

FR (Finance Requisition) is prepared by concern departments or Purchase Department requesting finance against the invoices submitted by the Vendors. This FR is authenticated & Signed by the concern department officials & seniors.

5. The received invoice is verified by the A/C department.

Following things are mainly verified in the invoice.

Invoice should be generated by the vendor to whom the concerned W.O/P.O is issued.

The GRN code of material/work completion certificate by concern head of department or Head of the consultancy appointed for the work.6. Then the invoice is booked against the asset or Expenses as per the nature of the invoice into the ERP system.7. The Payment is made after deducting the TDS, WCT etc. taxes as per applicability.

8. The payment voucher is made & cheque is prepared.

9. The Cheque is signed by the authorized signatories of the Company. And then it is handed over to the concern party. In some cases payments are also made through the pay order, RTGS, NEFT etc.

Departmental Hierachy, their work allocation andResponsibilities at Accounts & finance Department.

Jobs and Responsibilities of the employees.

General Manager (Head of the department)

a) Control the activities in the department.

b) Authenticating payments.

c) Sign Cheques.

d) Co-ordinate with the head of other departments

Manager Accounts

a) Verification / Rechecking the Invoices & supported documents to Paymentrequestions.

b) To look after the basic tax aspects with which company deals like VAT, Excise & Income tax.

Conclusion

An overview Following conclusions are drawn by me after completion of the study.1. It is found that the payment process protocols are followed while preparing the payment.

2. There is a good co ordination and understanding between the employees who handles the system.3. The process is well defined among the employees. The payments are made legally also.

4. There are less chances of double payments or wrong party payments made by the employee due to having effective control over the system.

5. There are less chances are having loopholes in the system.

6. We can conclude that the payment process & payment gateways are well designed & having good amount of security.

GM

Accounts & Finance

Manager Accounts

Manager Finance

Assistant Manager

Assistant Manager

Assistant Manager

Assistant Manager

VENDOR NAME

Address:-

Contact No:- Email:-

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