1. introduction to the report
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3.1.6.2 (D) Issuance of Items A proper computer record is maintained for the items in the store. When requisition for some items is received, first of all the BSO checks the record of those items with the help of a computer. If the required items are available at the stock, he issues the required items, files a copy of the requisition and generates a print out through the computer. 3.1.6.2 (E) Stock Checking The Finance Department, from time to time, sends a list to the Engineering store. The items specified on the list are counted by a BSO of the engineering store with the help of a specified team member from the SMD. If any difference is found it is reported to the finance department along with a description. 3.1.6.2 (F) Running Log A running Log of the receipts and transfers is printed at the end of the day or early in the morning on the following day which shows Receipt quantity and Binn number( number representing a specified position in the store for each G-R sheeted item) of the items. Running Logs of the current and previous year are kept for record purposes. 3.1.7 THE HUMAN RESOURCES DEPARTMENT (HRD) 3.1.7.1 Mission Statement: “Drive a winning corporate culture & operational excellence to have passionate skilled and confident employees who enthusiastically perform to make PTC a first choice for every one.” The main functions of the HR department are to resolve the workers grievances, care of disciplinary procedures, misconduct, faults and omissions, Industrial and Commercial Establishment standing order 1968 and Industrial Relations Ordinance 1969.
The workers employed in PTC Akora Khattak Factory and its Leaf Areas are classified into two main categories:
(A) Permanent Workers (Non-Seasonal Workers) The factory HRD, on permanent basis, directly employs them. Therefore, they are required to meet all the requirements that the company has established for a worker. In PTC the following grades are available for the permanent workers:
(B) Temporary Workers (Seasonal Workers): They are hired for a period of six months (July to December). At the depots they are hired for buying tobacco and doing jobs such as loading and unloading etc at the leaf areas, while at the factory they are normally hired for the GLT services. 3.1.7.3 Labor Unions in the Factory There are three labor federations at Akora Khattak Factory:
3.1.7.4 POLICIES OF THE HUMAN RESOURCE DEPARTMENT: A. Hiring Policy In PTC Akora Khattak Factory there are 36 grades. Out of which grades 1 to 10 include general workers, senior supervisors and clerks. From 30 to 33 include Business Support Officers and from 34 to 36 are Members of Management. The HR department is concerned with the hiring of only those employees that fall in the category of grade 1 to 10. The minimum qualification that is required for a permanent employee is SSC or diploma in engineering plus physical suitability.
There are two basis of promotion in PTC; one is suitability and the other is seniority. Where suitability means a person’s suitability in terms of his performance on the job and seniority means the time he has spent in PTC offering his services. C. Retirement Policy No individual can work through out his life. Therefore every organization has kept an age limit for the individual’s job. When he reaches that limit he must be retired from the job. In PTC, the age of compulsory retirement is 58 years for workers and managers. First extension is given at the age of 55 years, second at 56years and third at57 years subject to his performance and medical fitness. D. Retirement on Medical Grounds If a person becomes disabled and can not perform his job, he requests the company to refer him to the medical board. The medical board examines the worker thoroughly and sends his medical report to the PTC. If the report reveals that he is really unable to perform his job, then he is given retirement on medical grounds and is provided all the benefits as is in case of ordinary retirement. E. Voluntary Separation Scheme (VSS) Under this scheme, the permanent employees are provided an opportunity to get early retirement. The person getting early retirement is given some percentage of his salary plus his Provident Fund. The percentage of salary to be paid to them depends upon the number of years remaining to his actual retirement. CHAPTER NO. 4 4. FINANCE DEPARTMENT 4.1 MISSION STATEMENT “To be a pro-active value-adding business partner in delivery of the strategic imperatives and the management of shareholder value expectations.” Finance department is the back bone of every enterprise. Like the HR, finance also plays an important role in the running of an enterprise. Overall factory tasks are completed by the help of finance department because it depends on your budget. Finance department manage the finance of all the departments of the factory. The main function of the finance is to allocate the budget of the factory. Finance department has a close check on the incoming and outgoing of the cash. Finance keeps the record of all the cash related activities made in the factory. The work of finance is too much critical. The profit and loss of the company is in the hands of finance. The finance department of the AKF has seven major sections
4.2 VARIABLE COST & EXCISE DUTY In finance terminology “variable cost various in total and fixed in units “ If the production of the factory increases / decreases the variable cost also various. The AKF has kept a separate section in the finance department which deals with the variable cost and excise duty. All the variable things related to the production are involved in the variable cost. Variable cost items these are wrapping material, machines maintenance, electricity, labor hours, tobacco etc the duty of this section is to record the variable cost and post it to the General ledger. The company pays excise duty on Tobacco and cigarette to the government. When the trucks are leaving the shipping Godowns AR (application for removal of consignment) is made according to the excise rate. The excise rates per ten cigarettes are as follow. Table 4.1. Excise Duty Slabs for Different Brand Categories
Source: Fareed Ullah Shah, Variable Cost & Excise Duty Section After that a summary of shipment is send to the finance department based on which AR1 for tobacco and cigarettes are made. AR1 shows sales tax in addition to excise duty. Excise duty on tobacco is 20% and sales tax is 15%. No differ facility is available for tobacco duty payment. However, it is available for fourteen days for cigarette excise payment up to limit of Rs 220 million against a Bank bond. RT1 is another excise document which shows quantity of each kind of tobacco purchased and each brand of cigarette shipped and excise duty paid on them. A slab wise statement shows the quantity shipped and excise duty of the same month for the current and previous year so that comparison can be made. Recapitulation statement is also prepared which portrays the deposits on challans of cigarettes and tobacco duties. Tobacco CESS of 3% is paid of which 5% goes to excise & 95% is paid to PTB. THE VARIABLE COST FLOW
On arrival of Tobacco to L.R.R In PMD On used Tobacco On shipment of finished goods to sales godowns 
Custom Duty Tobacco Excise Duty Tobacco CESS Sales Tax & Cig Excise Duty  
 
Total Variable Cost Fig 4.1. The Variable Cost Flow Source: Mr. Fareed Ullah Shah Variable Cost Section Finance Department PTC AKF 4.3 LEAF SECTION This section of finance department is concerned with the purchase and the payment of the green leaf. 4.3.1 The Purchase Process PTC has to purchase from the grower a budgeted quantity of tobacco. PTC has some depots near the places/Areas where tobacco is grown and then it is purchased from that grower in the basis of agreement. In the purchase of tobacco a rule (MLO 783) is followed that rule has two basic points
The tobacco is purchased from different depots on the bases of grade and types. There are five different type of tobacco for purchase.
The VFC, which is grown in Mansehra, is considered the best tobacco in Pakistan. In every cigarette brand upto about 70% of VFC is used. The average price of tobacco is Rs 40 per kg. After the tobacco is purchased its physical inspection takes place and it is bought to the GLT for process. In every 100 kg of leaf there is 70 kg of lamina, 20 kg of stem, 2 to 3 kg of dust, 2 to 3 kg of by product and 2 to 3 kg is accountable loss. Thus the price revaluation is also done in GLT, which is necessary because 10 kg of leaf is wasted in that process. 4.3.2 The Payment Process The payment to the grower is made within seven to thirty days of the purchase. The payment process is through checques. 1st of all voucher is prepared for the payment. When the code allocation is done, then the voucher is passed. After that the cheques are prepared for payment and given to the growers. Recently the dueche Bank system is implemented. This Bank sends the cheques by post to each person. The DPLV account is in the bank. The Special feature of DPLV account is the credit allowed by the bank up to 20million.which gives flexibility to the company for payments. The payment of other expenses of Godown in the depots is also made through banks.
The crop cost has the following main components
The crop costing procedure starts with budgeting of leaf purchase based on the marketing projections. These projections are generally for the next five years. 4.3.4 The Crop Costing Procedure The crop costing procedure starts with the yield figure given by the GLT. These figures are an estimate of the GLT plant and also show the type of leaf being processed .the figure varies from to leaf and within a process as well. The figure taken from calculation is usually 69 % (approximately) which means that 69% by weight of tobacco processed is converted into lamina. All the costs are added together .the value of stem and by-product are subtracted from this total the answer is then divided by total lamina to obtain the total cost per kg of the leaf purchased. These costs are then entered into the computer and the printout of the details is sent to the Head Office. The HO enters it into the Central Stock Averages (CSA) to update the average cost per kg of different verities of tobacco available with the company. 4.4 PRODUCTION EXPENSES This section of the finance department deals with the recording all the expenses, which is related to the production. The expenses are recorded by the concerned person of the production department and entered into the system. Recently SAP (System, Applications and products) is introduced. This transfers the data directly into general ledger, when these expenses are verified and if any rectification requires, it takes place and is posted in the trial balance. The production expenses are divided into the three categories.
4.5 PAYROLL SECTION Payroll section is responsible for providing timely wages to the worker and maintaining their record. When a permanent employee comes inside the factory, he/she punches the hand in the punch machine at the gate. Their time in and out is calculated by that machine. This machine is attached with the TOM (Time Office Management) system in the production department, payment is given to the employee according to the TOM. There are other types of employees who are working under contractor. The payment is given to these employees by the contractor. Wages to the permanent employees are paid at the end of the month. Payroll section prepare the pay slip, with the help of the TOM, this system sums up the attendance of the employees. It also records the overtime of the employees. When the payment sheet is prepared, it is sending to the banks and that month amount automatically deposits in the employee bank account. PTC gives various allowances and incentives, which are added in monthly salary these allowances are
Provident fund is the special allowance that is deducted as well as added to the employee’s salary, 10% fund is deducted from the employee and 10% is deposit from the employer side. 4.6 CASH MANAGEMENT SECTION Cash is the section plays a vital role in factory’s running. It deals with all the outgoing and incoming cash in the AKF. The inflow of the cash in AKF is basically done through three sources. It either arrives through the sales receipts and auction. The sale revenue is generated through the sale department situated in Bahawalpur, Faisalabad and Peshawar. They transfer their reserves to the AKF other sources of cash included the auction. There are certain items that are either wastage with in the process. The item is put to auction by the MMD and then cash is sent to the finance department. Similarly some product that cannot be auctioned e.g. dust and wastes of wrapping material etc. are sold to different parties. That amount is also sent to the Finance department. For the payment voucher is raised for that expense. The expense head is allocated on the vouchers. Then payment is charged against head expenses. 1st of all voucher is passed and then cheque prepared. After that it is put into the system which automatically transfers to the ledger account and then to the trial balance. Some of the meager amount expense is made in AKF. These expenses are passed to the PETTY CASH. It is allowed to make payment up to the limit of five lakes. These expenses are daily based expenses. 4.7 FIXED ASSET This is very important section of the Finance Department. The major jobs of this section are
When the asset is required for AKF, they send Debt Note to the head office. HO (head office) sends the asset to the branch, AKF record as asset Debt and the head of credit. The asset above Rs 10,000 is fixed asset of PTC. When the PTC applies DOFA (Disposal of Fixed Asset), they prepare the FA-1. AKF send Debt Note to head office. PTC crushed it machinery when it complete its useful life because no other low quality cigarette manufacturing company use this machine.
The main function of this section is the closing of all accounts at the end of the month and making the trial balance. In account all the expenses have a different head, under which the total expenses of the month are added. At the end that ledger account is posted to the trial balance account. The activity and information from all the departments are transferred to this section either through the computer system or on Lotus note. This information is verified and then enters into the trial balance which is then sent to the head office for the preparation of P&L account and balance sheet. 4.9 ORGANOGRAM FINANCE DEPARTMENT 
                  
Chart 4.1 Organogram Finance Department PTC, AKF Source: Syed Dilawar Abbas TOM, Finance Department CHAPTER#5 5. PROJECTS It is mandatory for all the internees at PTC to work on certain projects that are assigned to him by the department of which he is an internee. This is a two way process by which not only the internee gets an opportunity to fully understand the operations of the concerned department but also the department is benefited by having some valuable work and recommendations on hand. Thus being an internee of the Finance Department at PTC AKF, I was also required to complete the following three projects and to present one of these before the factory management as well, the projects were:
Among these the first two are presented here in this chapter, while the last one i.e. ratio analysis of financial statements is included in the analysis portion of the report in chapter 6. PROJECT#1 5.1 VERIFICATION OF FIXED ASSETS This project is normally assigned to every internee of the finance department at PTC AKF. The project requirement is to verify the existence of the fixed assets that are installed in a given department. For this purpose the internee is provided with a list of the fixed assets of particular department/departments along with their asset codes, and all that he has to do is to verify the presence and asset codes of these assets. The departments or areas of which I was to verify its fixed assets included the following 18 Departments:
(Out of these I am going to present the verification record of a few ones for the sake of conciseness of the report) Download 1,61 Mb. Do'stlaringiz bilan baham:
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