Prepared by : Majid ali.

Registration no : uw-17-mgt-bsaf-012.
Submitted to
Mr. Amjad HusSain
Manager M.T.C (Management Training Center)

UNIVERSITY OF WAH
Supervisor’s certificate
This is certified that Mr Majid Ali (UW-17-MGT-BASF-012) student of University of
Wah has completed his internship under our supervision. We have checked this report
and found it free from mistakes.

__________________ _________________
Mr. Nabil Ahmed Mr. Tayyab
Executive Officer (Finance) Assistant Manager (Accounts)
 This is one of the greatest blessings of Allah, almighty that I got enough courage
to complete this internship program with good manner.
I would like to give thanks to all those who directly and indirectly helped me in this
duration. I offer my heartiest feelings and deep appreciation to Mr. Nabil Ahmed
(Executive Officer Finance) and Mr. Tayyab (Assistant Manager Accounts) for
supervising this internship program and I thankful to all concerned staff of Finance &
Accounts Departments for their full co-operation and guidance during my stay in this
organization.
Their unfailing patience, vast experience, able guidance and willingness to guide me have
been highly instructive.
At the end I want to express my appreciation and gratitude towards my parents as what I
am today, it is because of them.
 H.M.C (PVT) starts in 1970s. At that time there was no mechanical firm who
make heavy machinery. H.M.C is leading engineering goods manufacturing organization
in Pakistan situated at Taxila about 30Km north of capital Islamabad. H.M.C has
international certificates (ISO 9001) and tax with holding agent of Government. H.M.C
has gained rich experience in designing & manufacturing of large projects through
celebration with internationally reputed engineering organization. H.M.C is making sugar
plants, Cement plants, Cranes, Boilers, road rollers, Defense equipments, thermal power
plants, Railway equipments & miscellaneous heads.

“We are to be seen as a capital goods manufacturing organization that

provide Quality products and services which meet or even exceed the
expectation of customers”

Heavy Mechanical Complex Taxila (PVT) LTD,

District Rawalpindi.
Certificate No: 9704143 Fax: 92-51-9270560
Telephone: 51-9270562 92-0596-9314202, 9314203
92-596-9314181
E-mail:
hmcengg@hmc.com.pk
planning@hmc.com.pk
marketing@hmc.com.pk
finance@hmc.com.pk

1. H.M.C I (Mechanical works):-

 H.M.C (I) is producing different things. Iron sheets are purchased and cut off as
diagrams and joint those in such a manner a new product made and this process are called
Fabrication. Tinny parts used as raw material in F.F.W.
2. F.F.W (Foundry & Forging works):-
In this department scraps material melted in the Furness then some mare
compositions are added in it to produce some special type of Iron. When Iron become in
liquid shape it is put into dais for some specific shape. When it become cold then for
further processing it goes to machine shop for finishing it is called Casting.
Runner:-
Melted iron put into tubes and it fill the gap into tubes it is called runner.
Riser:-
When dais fills up then more liquid iron put into it. The impurities become up & taken
out from slag.
Ingots are also made in H.M.C. These are Iron blocks. The iron is heated in small Furness
and then molded into any shape which one is required.

Finance:-
It is a source & it means rising and allocation of funds at appropriate place at right
time is called financing. There are two ways of financing in an organization
1. Investment:-
Investing money in any other organization to get interest or open an
account in a bank on the name of organization.
2. Expenditures:-
Acquiring any resource for the use of organization. There are three ways
of expenses in this organization.
a. Payroll.
b. Credit control.
c. Billing.

Vouchers:-
There are three major types of vouchers.
1. Payment vouchers.
-Bank payment vouchers.
2. Receipt Vouchers.
-Bank receipt vouchers.
3. Journal vouchers.

1. Payment vouchers:-
-Bank payment:-
If the amount is more than 3000/- then a cross check is made on the name of that
person & he get his amount from that bank in which organization account.
-Cash payment:-
If the amount is less than 3000/- then a bill made by bill section & that person get his
amount from cash office. Petty cash payment also included in these vouchers.

2. Receipt vouchers:-
-Direct deposit:-
Customers directly deposit amount in the account of organization.
-Bank Receipt:-
Cross check issued on the Organization and it is submitted in the bank for
collection.
3. Journal vouchers:-
In this type the non cash expenses are treated such as depreciation & adjustments.
At the end of financial period the books of accounts are journalize & adjusted and
suppliers and customers are cleared from books of accounts.
Benefits:-
All those facilities which are given to all type of employees from top level
management to low level employees. Just as medical facility, transport & Housing
facility.
Incentives:-
Reward against performance. Not given to all employees who perform he get
reward against his performance.
Gratuity Fund:-
A type of benefits given to those employees whose service is more than 20 years
or more. 65% of accumulated amount given to employee at the time of retirement and
remaining as monthly pension.
Gratuity fund= (number of years worked * basic salary at the time of retirement)
Letter of credit:-
It is a note given to the seller on behalf of purchaser. It is a guarantee which
means that in the account of purchaser bank have enough amounts, if purchaser fails to
pay the amount then bank will be liable to pay the amount.
It is given on the purchase across the border.

Guarantee:-
It is a note given to the seller on behalf of purchaser. It is a guarantee which
means that in the account of purchaser bank have enough amounts, if purchaser fails to
pay the amount then bank will be liable to pay the amount.
This note given on sale of any product within the country.
Debit:-
It is a Latin word. In accounting its means that right side. Increase in asset and
expenses will be recorded on debit side & decrease in asset and expenses will be recorded
on credit side.

Credit:-
 It is a Latin word. In accounting its means that left side. Increase in income,
liability and Equity will be recorded on credit side & decrease in income, liability and
Equity will be recorded on debit side.
Production Planning control (P.P.C):-
It is a control system which maintains the records of all shops in the factory. All
the departments are interdependent to each other.
Process of acquiring asset/goods:-
 The head of project make an S.R (Store Reacquisition) on which he mentions that
what is required & how much required?
 Then this S.R goes to S.S (Sub Store).
 If the product is not available in S.S then it refers to G.S (General Store).
 If product is not available in the G.S then store keeper make purchase order &
refers to purchase department.
 Purchase department advertise and get quotations from registered suppliers.
 The suppliers give their quotations and purchase department select one supplier
whose terms and conditions suit them and he is providing that product on low
price.
 Then that quotation send to finance department for checking that is this supplier is
suitable for organization or not?
 If it is approved then this file goes to M.D (Managing Director) for approval.
 After approval three copies are generated
1. Bill section:-
For billing and generating finance for payment.
2. Purchase department:-
To give the order to supplier to supply the product.
3. Supplier:-
To provide the accurate product which is mentioned in the purchase order?

 Then the supplier sent product and its invoice in which he mentions total units,
per unit price and total price payable.
 When the product received then storekeeper make a R.R (Receiving Report). Four
copies are generated of this R.R & sent to
 Store.
 Purchase department to give to supplier.
 Bill section for payment.
 Inspection committee to inspect.
 The inspection committee inspect the product and compare the S.R, R.R and
Invoice and make a report in which it is mentioned
 Units ordered.
 Good units.
 Defected units.
 Rejected units.
 Then this inspection note dispatch and send to finance department.
 Finance department check that the supplier charges that price which was
mentioned in quotation.
 The payment made through bank and a bank payment voucher made by finance
department.
 If complete units are received in good condition then finance department make a
I.O.M (Inter Office Memo) in which sales tax add in the price of that product
which is 16% and deduct 3.5% income tax from the payment which is payable &
1% tax also deducted as sales tax withheld and submit it within 15 days in
government treasury.
 At the end of financial period the organizations issue a certificate to supplier
which shows that tax has been submitted in government treasury.
A Bill contains
 R.R (Receiving Report).
 Inspection note.
 Bank payment voucher.
 Invoice.
 I.O.M (Inter Office Memo).

Duties of Bill section

 Processing of bills
 Utility bills.
 Advertisement bills.
 Postage, courier & newspaper.
 Professional, consultant and commission agents.
 Civil works.
 Miscellaneous reimbursement.
 Hospital bills.
 Vehicle maintenance.
 Agency commission.
 Others
 Advance payment to supplier & subsequent adjustment.
 Pricing of receiving reports.
 Reconciliation of advances.
 Monthly wages payment to contractors.
 Payment of freight.
 Payment of duties, custom, sales tax & income tax.
 Payment of advances against expenses to employee.
 Payment of inspection and annual subscription.
 Deposit of income tax and income tax certificate.
 Report uploaded on website of F.B.R (Federal Board of Revenue) Income
tax deducted.
S.R (Store Reacquisition):
Any thing which is required for production or maintenance of factory is issued
against S.R.
Journal Entries for S.R
 In the books of shop:
Material (Dr) ***
To Store account (Cr) ***

 In the books of store:

Shop (Dr) ***
To Material (Cr) ***
 Ultimate:
Shop account (Dr) ***
Store accounts (Cr) ***
S.R.C (Store Return for Credit):
Any thing which is returned to store after completion of task is returned in the
store against S.R.C.
Journal Entries for S.R.C
 In the books of shop:
Store account (Dr) ***
To Material (Cr) ***
 In the books of store:
Material (Dr) ***
To Shop Account (Cr) ***
 Ultimate:
Store account (Dr) ***
To Shop account (Cr) ***
Warf age charges:
Expenses related to port such as crane charges, containers etc.
Clearing & Forwarding charges:
All those charges which are incurred to clear the consignment from sea port or
airport.
This department deals with customers through L.C’s & Bank Guarantee.
Payment methods by customers:-
There are two methods used in H.M.C.
1. Advance: The payment will be made as a whole at start or after completion.
2. Progressive payment: Time to time payment will be made in form of post
dated cheqes or when other party receives a part of project.
FOB (Free on Boat):
The shipping charges will be paid by H.M.C for foreign purchase & it cleared in
contract document.
P.N.S.C (Pakistan National Shipping Corporation):
H.M.C has contract with P.N.S.C for transshipment of goods.
Performance bond (5%):
When ever any thing purchased 5% of its amount hold by H.M.C and paid after
some specific period to supplier because if goods become damage then withheld amount
(5%) not paid to supplier.

Cash office:
Reimbursement of expenses to employees such as medical expenses & vehicle
maintenance expenses. Minimum cash maintained in cash office is 1, 00,000/- for petty
cash payments to employees.
Taxation
HMC is Government tax with holding agent so it deduct tax on
 3.5% on income.
 6% on services.
 1% medical.
 1% sales tax with held.
 2% Freight.
It is a register in which the database of all the employees is recorded.
Pay slip:
Employee Designation Token. Basic Benefits Deductions Net
Name No salary salary
- - - - Description Amount Description Amount
ABC Hammer 1012 10,000 Dearness 200 House rent 700 9500
operator allowance

Salary distributation:
In this organization there are two types of employees.
1. Permanent employees.
2. Daily wages employees.

1. Permanent employees:
30.5 days counted in a month for permanent employees. Double payment given to
permanent employees for working more than 8 hours.
Basic salary +Overtime
Overtime calculation:-
Basic pay * 12monts = annual salary
Annual salary / 365 days = per day pay
Per day / 8 hours = 1 hour pay
1 hour rate * 2 = Over time hour rate per hour.
2. Daily wages:
26 days in a month counted. Per day wage is 350 plus overtime.
350 + overtime = one day wage.
Overtime calculation:
350 / 8 hours = per hour wage rate
Per hour rate * hours worked = monthly salary.